November 8, 2018 - 8:00 AM EST
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Icahn Enterprises L.P. Reports Third Quarter 2018 Financial Results
  • For the trailing twelve months ended September 30, 2018 indicative net asset value increased by $1.57 billion to $8.64 billion compared to $7.08 billion as of September 30, 2017

NEW YORK, Nov. 08, 2018 (GLOBE NEWSWIRE) -- Icahn Enterprises L.P. (NASDAQ:IEP) is reporting third quarter 2018 revenues of $2.7 billion and net income attributable to Icahn Enterprises of $126 million, or $0.68 per depositary unit, including a loss of $29 million from continuing operations, or $0.16 per depositary unit. For the three months ended September 30, 2017 revenues were $3.5 billion and net income attributable to Icahn Enterprises was $597 million, or $3.53 per depositary unit, including $577 million from continuing operations, or $3.41 per depositary unit. For the three months ended September 30, 2018, Adjusted EBITDA attributable to Icahn Enterprises was $26 million compared to $345 million for the three months ended September 30, 2017. For the three months ended September 30, 2018, Adjusted EBIT attributable to Icahn Enterprises was a loss of $55 million compared to income of $260 million for the three months ended September 30, 2017.

For the nine months ended September 30, 2018, revenues were $9.4 billion and net income attributable to Icahn Enterprises was $572 million, or $3.15 per depositary unit, including $243 million from continuing operations, or $1.34 per depositary unit. For the nine months ended September 30, 2017 revenues were $10.5 billion and net income attributable to Icahn Enterprises was $2.1 billion, or $13.23 per depositary unit, including $2.0 billion from continuing operations, or $12.58 per depositary unit. The prior year period includes a $1.0 billion gain, net of tax, from the sale of ARL in June 2017. For the nine months ended September 30, 2018, Adjusted EBITDA attributable to Icahn Enterprises was $689 million compared to $813 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, Adjusted EBIT attributable to Icahn Enterprises was $434 million compared to $547 million for the nine months ended September 30, 2017.

For the twelve months ended September 30, 2018 indicative net asset value increased by $1.57 billion to $8.64 billion compared to $7.08 billion as of September 30, 2017. For the nine months ended September 30, 2018 indicative net asset value increased by $784 million to $8.64 billion compared to $7.86 billion as of December 31, 2017.

Icahn Enterprises L.P., a master limited partnership, is a diversified holding company engaged in nine primary business segments: Investment, Automotive, Energy, Railcar, Metals, Mining, Food Packaging, Real Estate and Home Fashion.

Caution Concerning Forward-Looking Statements

Results for any interim period are not necessarily indicative of results for any full fiscal period. This release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, many of which are beyond our ability to control or predict. Forward-looking statements may be identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of Icahn Enterprises L.P. and its subsidiaries. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors, including risks related to economic downturns, substantial competition and rising operating costs; risks related to our investment activities, including the nature of the investments made by the private funds in which we invest, losses in the private funds and loss of key employees; risks related to our ability to continue to conduct our activities in a manner so as to not be deemed an investment company under the Investment Company Act of 1940, as amended; risks related to our automotive activities, including exposure to adverse conditions in the automotive industry, and risks related to operations in foreign countries; risks related to our energy business, including the volatility and availability of crude oil, other feed stocks and refined products, unfavorable refining margin (crack spread), interrupted access to pipelines, significant fluctuations in nitrogen fertilizer demand in the agricultural industry and seasonality of results; risks related to our railcar activities, including reliance upon a small number of customers that represent a large percentage of revenues and backlog, the health of and prospects for the overall railcar industry and the cyclical nature of the railcar manufacturing business; risks related to our food packaging activities, including competition from better capitalized competitors, inability of its suppliers to timely deliver raw materials, and the failure to effectively respond to industry changes in casings technology; risks related to our scrap metals activities, including potential environmental exposure; risks related to our real estate activities, including the extent of any tenant bankruptcies and insolvencies; risks related to our home fashion operations, including changes in the availability and price of raw materials, and changes in transportation costs and delivery times; and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. Past performance in our Investment segment is not indicative of future performance. We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit amounts)

 

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2018 2017 2018 2017
        
Revenues:(Unaudited)
Net sales$2,864  $2,404  $8,220  $7,107 
Other revenues from operations217  181  632  705 
Net gain from investment activities(514) 420  328  604 
Interest and dividend income36  34  99  94 
Gain on disposition of assets, net65  446  65  1,969 
Other income (loss), net17  19  83  (11)
 2,685  3,504  9,427  10,468 
Expenses:       
Cost of goods sold2,406  2,054  7,007  6,174 
Other expenses from operations173  144  490  469 
Selling, general and administrative340  323  1,042  945 
Restructuring17  1  20  3 
Impairment    7  76 
Interest expense130  164  407  525 
 3,066  2,686  8,973  8,192 
(Loss) income from continuing operations before
  income tax benefit (expense)
(381) 818  454  2,276 
Income tax benefit (expense)71  (18) 57  (13)
(Loss) income from continuing operations(310) 800  511  2,263 
Income from discontinued operations163  29  353  131 
Net (loss) income(147) 829  864  2,394 
Less: net (loss) income attributable to non-
  controlling interests
(273) 232  292  262 
Net income attributable to Icahn Enterprises$126  $597  $572  $2,132 
        
Net (loss) income attributable to Icahn Enterprises
  from:
       
  Continuing operations$(29) $577  $243  $2,027 
  Discontinued operations155  20  329  105 
 $126  $597  $572  $2,132 
        
Net income attributable to Icahn Enterprises
  allocable to:
       
Limited partners$124  $586  $561  $2,090 
General partner2  11  11  42 
 $126  $597  $572  $2,132 
        
Basic and diluted (loss) income per LP unit:       
Continuing operations$(0.16) $3.41  $1.34  $12.58 
Discontinued operations0.84  0.12  1.81  0.65 
 $0.68  $3.53  $3.15  $13.23 
Basic and diluted weighted average LP units
  outstanding
183  166  178  158 
Cash distributions declared per LP unit$1.75  $1.50  $5.25  $4.50 

 

 


CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

 September 30,
2018
 December 31,
2017
    
ASSETS(Unaudited)
Cash and cash equivalents$1,053  $1,264 
Cash held at consolidated affiliated partnerships and restricted cash801  766 
Investments9,332  10,038 
Due from brokers338  506 
Accounts receivable, net700  612 
Inventories, net1,961  1,805 
Property, plant and equipment, net6,179  6,364 
Goodwill336  334 
Intangible assets, net513  544 
Assets held for sale8,891  8,790 
Other assets871  778 
Total Assets$30,975  $31,801 
LIABILITIES AND EQUITY   
Accounts payable$1,025  $1,001 
Accrued expenses and other liabilities1,069  1,033 
Deferred tax liability787  924 
Unrealized loss on derivative contracts985  1,275 
Securities sold, not yet purchased, at fair value625  1,023 
Due to brokers243  1,057 
Liabilities held for sale5,998  6,202 
Debt7,907  7,918 
Total liabilities18,639  20,433 
    
Equity:   
Limited partners5,837  5,341 
General partner(225) (235)
Equity attributable to Icahn Enterprises5,612  5,106 
Equity attributable to non-controlling interests6,724  6,262 
Total equity12,336  11,368 
Total Liabilities and Equity$30,975  $31,801 


Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in evaluating its performance. These include non-GAAP EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT. EBITDA represents earnings from continuing operations before interest expense, income tax (benefit) expense and depreciation and amortization. EBIT represents earnings from continuing operations before interest expense and income tax (benefit) expense. We define Adjusted EBITDA and Adjusted EBIT as EBITDA and EBIT, respectively, excluding the effects of impairment, restructuring costs, certain pension plan expenses, OPEB curtailment gains, purchase accounting inventory adjustments, certain share-based compensation, discontinued operations, gains/losses on extinguishment of debt, major scheduled turnaround expenses, FIFO adjustments and unrealized gains/losses on energy segment derivatives and certain other non-operational charges. We present EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT on a consolidated basis and attributable to Icahn Enterprises net of the effect of non-controlling interests. We conduct substantially all of our operations through subsidiaries. The operating results of our subsidiaries may not be sufficient to make distributions to us. In addition, our subsidiaries are not obligated to make funds available to us for payment of our indebtedness, payment of distributions on our depositary units or otherwise, and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements to which these subsidiaries currently may be subject or into which they may enter into in the future. The terms of any borrowings of our subsidiaries or other entities in which we own equity may restrict dividends, distributions or loans to us.

We believe that providing EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT to investors has economic substance as these measures provide important supplemental information of our performance to investors and permits investors and management to evaluate the core operating performance of our business without regard to interest, taxes and depreciation and amortization and the effects of impairment, restructuring costs, certain pension plan expenses, OPEB curtailment gains, purchase accounting inventory adjustments, certain share-based compensation, discontinued operations, gains/losses on extinguishment of debt, major scheduled turnaround expenses, FIFO adjustments and unrealized gains/losses on energy segment derivatives and certain other non-operational charges. Additionally, we believe this information is frequently used by securities analysts, investors and other interested parties in the evaluation of companies that have issued debt. Management uses, and believes that investors benefit from referring to these non-GAAP financial measures in assessing our operating results, as well as in planning, forecasting and analyzing future periods. Adjusting earnings for these charges allows investors to evaluate our performance from period to period, as well as our peers, without the effects of certain items that may vary depending on accounting methods and the book value of assets. Additionally, EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT present meaningful measures of performance exclusive of our capital structure and the method by which assets were acquired and financed.

EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under generally accepted accounting principles in the United States, or U.S. GAAP. For example, EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT:

  • do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments;
  • do not reflect changes in, or cash requirements for, our working capital needs; and
  • do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal  payments on our debt.

Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Other companies in the industries in which we operate may calculate EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT differently than we do, limiting their usefulness as comparative measures. In addition, EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.

EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT are not measurements of our financial performance under U.S. GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with U.S. GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. Given these limitations, we rely primarily on our U.S. GAAP results and use EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT only as a supplemental measure of our financial performance.

Use of Indicative Net Asset Value Data

The Company uses indicative net asset value as an additional method for considering the value of the Company’s assets, and we believe that this information can be helpful to investors. Please note, however, that the indicative net asset value does not represent the market price at which the units trade. Accordingly, data regarding indicative net asset value is of limited use and should not be considered in isolation.

The Company's depositary units are not redeemable, which means that investors have no right or ability to obtain from the Company the indicative net asset value of units that they own. Units may be bought and sold on The NASDAQ Global Select Market at prevailing market prices. Those prices may be higher or lower than the indicative net asset value of the units as calculated by management.

See below for more information on how we calculate the Company’s indicative net asset value.

($ in millions)September 30,
2018
 December 31,
2017
 September 30,
2017
      
Market-valued Subsidiaries:(Unaudited)
Holding Company interest in Funds (1)$3,003  $3,052  $2,882 
CVR Energy (2)2,864  2,651  1,844 
CVR Refining - direct holding (2)113  95  57 
American Railcar Industries (2)547  494  458 
  Total market-valued subsidiaries$6,527  $6,293  $5,241 
      
Other Subsidiaries:     
Tropicana (3)$1,566  $1,439  $1,440 
Viskase (4)185  173  179 
Federal-Mogul (5)2,041  1,690  1,690 
Real Estate Holdings (1)888  824  851 
PSC Metals (1)179  182  169 
WestPoint Home (1)134  144  153 
RemainCo (6)  18  537 
Ferrous Resources (1)166  138  123 
Icahn Automotive Group (1)1,891  1,728  1,487 
Trump Entertainment (1)27  22  64 
  Total - other subsidiaries$7,077  $6,359  $6,693 
  Add:  Holding Company cash and cash equivalents (7)97  526  484 
  Less:  Holding Company debt (7)(5,505) (5,507) (5,508)
  Add:  Other Holding Company net assets (7)448  189  175 
Indicative Net Asset Value$8,644  $7,860  $7,085 

Indicative net asset value does not purport to reflect a valuation of IEP. The calculated Indicative net asset value does not include any value for our Investment Segment other than the fair market value of our investment in the Investment Funds. A valuation is a subjective exercise and Indicative net asset value does not necessarily consider all elements or consider in the adequate proportion the elements that could affect the valuation of IEP. Investors may reasonably differ on what such elements are and their impact on IEP. No representation or assurance, expressed or implied is made as to the accuracy and correctness of indicative net asset value as of these dates or with respect to any future indicative or prospective results which may vary.

  1. Represents equity attributable to us as of each respective date.
  2. Based on closing share price on each date (or if such date was not a trading day, the immediately preceding trading day) and the number of shares owned by the Holding Company as of each respective date.
  3. September 30, 2018 value is pro-forma the announced sale of Tropicana. December 31, 2017 and September 30, 2017 based on market comparables due to lack of material trading volume, valued at 9.0x Adjusted EBITDA for the twelve months ended December 31, 2017 and September 30, 2017.
  4. Amounts based on market comparables due to lack of material trading volume, valued at 9.0x Adjusted EBITDA for the twelve months ended September 30, 2018, December 31, 2017 and September 30, 2017.
  5. September 30, 2018 value is pro-forma the announced sale to Tenneco Inc. December 31, 2017 and September 30, 2017 represents the value of the company based on IEP's tender offer during Q1 2017.
  6. September 30, 2018, December 31, 2017 and September 30, 2017 represents the option purchase price of the remaining cars not sold in the initial ARL sale, plus working capital as of that date.
  7. Holding Company's balance as of each respective date.

($ in millions)Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2018 2017 2018 2017
        
Consolidated Adjusted EBITDA:(Unaudited)
Net (loss) income from continuing operations$(310) $800  $511  $2,263 
Interest expense, net127  161  402  519 
Income tax (benefit) expense(71) 18  (57) 13 
Depreciation and amortization124  130  384  398 
Consolidated EBITDA$(130) $1,109  $1,240  $3,193 
Impairment of assets    7  76 
Restructuring costs13  1  16  3 
Non-Service cost U.S. based pensions  1  8  3 
FIFO impact (unfavorable) favorable(3) (15) (45)  
Major scheduled turnaround expense1  24  7  40 
Gain on disposition of assets(65) (445) (70) (1,969)
Unrealized loss (gain) on certain derivatives4  17  (35) 6 
Tax settlements  (38)   (38)
Other6  16  34  38 
Consolidated Adjusted EBITDA$(174) $670  $1,162  $1,352 
        
IEP Adjusted EBITDA:       
Net (loss) income from continuing operations attributable to Icahn Enterprises$(29) $577  $243  $2,027 
Interest expense, net107  116  325  371 
Income tax (benefit) expense(82) 17  (75) 10 
Depreciation and amortization81  85  255  266 
EBITDA attributable to IEP$77  $795  $748  $2,674 
Impairment of assets    5  76 
Restructuring costs11  1  14  2 
Non-Service cost U.S. based pensions  1  6  2 
FIFO impact (unfavorable) favorable(2) (9) (27)  
Major scheduled turnaround expense1  14  4  24 
Gain on disposition of assets(66) (445) (71) (1,969)
Unrealized loss (gain) on certain derivatives2  10  (21) 4 
Tax settlements  (38)   (38)
Other3  16  31  38 
Adjusted EBITDA attributable to IEP$26  $345  $689  $813 


($ in millions)Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2018 2017 2018 2017
Consolidated Adjusted EBIT:(Unaudited)
Net (loss) income from continuing operations$(310) $800  $511  $2,263 
Interest expense, net127  161  402  519 
Income tax (benefit) expense(71) 18  (57) 13 
Consolidated EBIT$(254) $979  $856  $2,795 
Impairment of assets    7  76 
Restructuring costs13  1  16  3 
Non-Service cost U.S. based pensions  1  8  3 
FIFO impact (unfavorable) favorable(3) (15) (45)  
Major scheduled turnaround expense1  24  7  40 
Gain on disposition of assets(65) (445) (70) (1,969)
Unrealized loss (gain) on certain derivatives4  17  (35) 6 
Tax settlements  (38)   (38)
Other6  16  34  38 
Consolidated Adjusted EBIT$(298) $540  $778  $954 
        
IEP Adjusted EBIT:       
Net (loss) income from continuing operations attributable to Icahn Enterprises$(29) $577  $243  $2,027 
Interest expense, net107  116  325  371 
Income tax (benefit) expense(82) 17  (75) 10 
EBIT attributable to IEP$(4) $710  $493  $2,408 
Impairment of assets    5  76 
Restructuring costs11  1  14  2 
Non-Service cost U.S. based pensions  1  6  2 
FIFO impact (unfavorable) favorable(2) (9) (27)  
Major scheduled turnaround expense1  14  4  24 
Gain on disposition of assets(66) (445) (71) (1,969)
Unrealized loss (gain) on certain derivatives2  10  (21) 4 
Tax settlements  (38)   (38)
Other3  16  31  38 
Adjusted EBIT attributable to IEP$(55) $260  $434  $547 

 

Investor Contacts:
SungHwan Cho, Chief Financial Officer
Peter Reck, Chief Accounting Officer
(212) 702-4300


Source: GlobeNewswire (November 8, 2018 - 8:00 AM EST)

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