Icahn Enterprises L.P. (Nasdaq:IEP) is reporting first quarter 2021
revenues of $3.4 billion and net income attributable to Icahn
Enterprises of $162 million, or $0.65 per depositary unit. For the
three months ended March 31, 2020, revenues were $(60) million and
net loss attributable to Icahn Enterprises was $1.4 billion, or a
loss of $6.34 per depositary unit. For the three months ended March
31, 2021, Adjusted EBITDA attributable to Icahn Enterprises was
$435 million compared to $(1.3) billion for the three months ended
March 31, 2020. For the three months ended March 31, 2021, Adjusted
EBIT attributable to Icahn Enterprises was $342 million compared to
$(1.4) billion for the three months ended March 31, 2020.
For the quarter ended March 31, 2021, indicative net asset value
increased by $668 million to $4.22 billion compared to $3.55
billion as of December 31, 2020.
On May 5, 2021, the Board of Directors of the general partner of
Icahn Enterprises declared a quarterly distribution in the amount
of $2.00 per depositary unit, which will be paid on or about June
30, 2021 to depositary unitholders of record at the close of
business on June 1, 2021. Depositary unitholders will have until
June 18, 2021 to make a timely election to receive either cash or
additional depositary units. If a unitholder does not make a timely
election, it will automatically be deemed to have elected to
receive the distribution in additional depositary units. Depositary
unitholders who elect to receive (or who are deemed to have elected
to receive) additional depositary units will receive units valued
at the volume weighted average trading price of the units during
the 5 consecutive trading days ending June 25, 2021. Icahn
Enterprises will make a cash payment in lieu of issuing fractional
depositary units to any unitholders electing to receive (or who are
deemed to have elected to receive) depositary units.
Icahn Enterprises L.P., a master limited partnership, is a
diversified holding company engaged in eight primary business
segments: Investment, Energy, Automotive, Food Packaging, Metals,
Real Estate, Home Fashion and Pharma.
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 the severity, magnitude and
duration of the COVID-19 pandemic and its impact on the global
economy, financial markets and industries in which our subsidiaries
operate; risks related to our investment activities, including the
nature of the investments made by the private funds in which we
invest, declines in the fair value of our investments as a result
of the COVID-19 pandemic, 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 energy business, including the volatility and
availability of crude oil, declines in global demand for crude oil,
refined products and liquid transportation fuels as a result of the
COVID-19 pandemic, 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 automotive activities and exposure to adverse
conditions in the automotive industry, including as a result of the
COVID-19 pandemic; risks related to our food packaging activities,
including competition from better capitalized competitors,
inability of 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(UNAUDITED)
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
|
|
|
(In millions, except per unit amounts) |
Revenues: |
|
|
|
|
|
Net sales |
$ |
2,218 |
|
|
$ |
1,860 |
|
Other revenues from operations |
|
152 |
|
|
|
161 |
|
Net gain (loss) from investment activities |
|
1,006 |
|
|
|
(2,128 |
) |
Interest and dividend income |
|
26 |
|
|
|
64 |
|
Other loss, net |
|
(18 |
) |
|
|
(17 |
) |
|
|
3,384 |
|
|
|
(60 |
) |
Expenses: |
|
|
|
|
|
Cost of goods sold |
|
2,139 |
|
|
|
1,810 |
|
Other expenses from operations |
|
118 |
|
|
|
135 |
|
Selling, general and administrative |
|
316 |
|
|
|
308 |
|
Restructuring, net |
|
— |
|
|
|
2 |
|
Interest expense |
|
195 |
|
|
|
171 |
|
|
|
2,768 |
|
|
|
2,426 |
|
Income (loss) before income
tax (expense) benefit |
|
616 |
|
|
|
(2,486 |
) |
Income tax (expense)
benefit |
|
(17 |
) |
|
|
180 |
|
Net income (loss) |
|
599 |
|
|
|
(2,306 |
) |
Less: net income (loss)
attributable to non-controlling interests |
|
437 |
|
|
|
(922 |
) |
Net income (loss) attributable
to Icahn Enterprises |
$ |
162 |
|
|
$ |
(1,384 |
) |
|
|
|
|
|
|
Net income (loss) attributable
to Icahn Enterprises allocated to: |
|
|
|
|
|
Limited partners |
$ |
159 |
|
|
$ |
(1,356 |
) |
General partner |
|
3 |
|
|
|
(28 |
) |
|
$ |
162 |
|
|
$ |
(1,384 |
) |
|
|
|
|
|
|
Basic income (loss) per LP
unit |
$ |
0.66 |
|
|
$ |
(6.34 |
) |
Basic weighted average LP
units outstanding |
|
242 |
|
|
|
214 |
|
|
|
|
|
|
|
Diluted income (loss) per LP
unit |
$ |
0.65 |
|
|
$ |
(6.34 |
) |
Diluted weighted average LP
units outstanding |
|
245 |
|
|
|
214 |
|
Cash distributions declared
per LP unit |
$ |
2.00 |
|
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED)
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2021 |
|
2020 |
|
|
|
(In millions) |
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,942 |
|
|
$ |
1,679 |
|
Cash held at consolidated
affiliated partnerships and restricted cash |
|
1,134 |
|
|
|
1,612 |
|
Investments |
|
11,480 |
|
|
|
8,913 |
|
Due from brokers |
|
4,234 |
|
|
|
3,437 |
|
Accounts receivable, net |
|
572 |
|
|
|
501 |
|
Inventories, net |
|
1,559 |
|
|
|
1,580 |
|
Property, plant and equipment,
net |
|
4,231 |
|
|
|
4,228 |
|
Unrealized gain on derivative
contracts |
|
855 |
|
|
|
785 |
|
Goodwill |
|
294 |
|
|
|
294 |
|
Intangible assets, net |
|
643 |
|
|
|
660 |
|
Other assets |
|
1,353 |
|
|
|
1,296 |
|
Total
Assets |
$ |
28,297 |
|
|
$ |
24,985 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Accounts payable |
$ |
851 |
|
|
$ |
738 |
|
Accrued expenses and other
liabilities |
|
2,303 |
|
|
|
1,584 |
|
Deferred tax liabilities |
|
549 |
|
|
|
568 |
|
Unrealized loss on derivative
contracts |
|
584 |
|
|
|
639 |
|
Securities sold, not yet
purchased, at fair value |
|
4,863 |
|
|
|
2,521 |
|
Due to brokers |
|
1,509 |
|
|
|
1,618 |
|
Debt |
|
8,056 |
|
|
|
8,059 |
|
Total liabilities |
|
18,715 |
|
|
|
15,727 |
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
Limited partners |
|
4,086 |
|
|
|
4,236 |
|
General partner |
|
(856 |
) |
|
|
(853 |
) |
Equity attributable to Icahn
Enterprises |
|
3,230 |
|
|
|
3,383 |
|
Equity attributable to
non-controlling interests |
|
6,352 |
|
|
|
5,875 |
|
Total equity |
|
9,582 |
|
|
|
9,258 |
|
Total Liabilities and
Equity |
$ |
28,297 |
|
|
$ |
24,985 |
|
|
|
|
|
|
|
|
|
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 certain effects of
impairment, restructuring costs, certain pension plan expenses,
gains/losses on disposition of assets, gains/losses on
extinguishment of debt, major scheduled turnaround expenses,
certain tax settlements and certain other non-operational charges.
We present EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT on a
consolidated basis and on a basis attributable to Icahn Enterprises
net of the effects 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 certain effects of
impairment, restructuring costs, certain pension plan expenses,
gains/losses on disposition of assets, gains/losses on
extinguishment of debt, major scheduled turnaround expenses,
certain tax settlements 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 depositary 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 depositary units as calculated by
management.
See below for more information on how we calculate the Company’s
indicative net asset value.
|
|
|
|
|
March 31, |
|
December 31, |
|
2021 |
|
2020 |
|
|
|
(In millions)(Unaudited) |
Market-valued
Subsidiaries and Investments: |
|
|
|
Holding Company interest in Investment Funds(1) |
$ |
4,675 |
|
|
$ |
4,283 |
|
CVR Energy(2) |
|
1,366 |
|
|
|
1,061 |
|
Tenneco(2) |
|
136 |
|
|
|
292 |
|
Total market-valued
subsidiaries and investments |
$ |
6,177 |
|
|
$ |
5,636 |
|
|
|
|
|
Other
Subsidiaries: |
|
|
|
Viskase(3) |
$ |
293 |
|
|
$ |
285 |
|
Real Estate Holdings(1) |
|
443 |
|
|
|
440 |
|
PSC Metals(1) |
|
133 |
|
|
|
128 |
|
WestPoint Home(1) |
|
137 |
|
|
|
141 |
|
Vivus(1) |
|
270 |
|
|
|
262 |
|
Icahn Automotive Group(1) |
|
1,558 |
|
|
|
1,554 |
|
Total other
subsidiaries |
$ |
2,834 |
|
|
$ |
2,810 |
|
Add: Other Holding Company net assets(4) |
|
(124 |
) |
|
|
(12 |
) |
Indicative Gross Asset
Value |
$ |
8,887 |
|
|
$ |
8,434 |
|
Add: Holding Company cash and cash equivalents(5) |
|
1,134 |
|
|
|
925 |
|
Less: Holding Company debt(5) |
|
(5,805 |
) |
|
|
(5,811 |
) |
Indicative Net Asset
Value |
$ |
4,216 |
|
|
$ |
3,548 |
|
|
|
|
|
|
|
|
|
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) |
Amounts based on market comparables due to lack of material trading
volume, valued at 9.0x Adjusted EBITDA for the twelve months ended
March 31, 2021 and December 31, 2020. |
(4) |
Holding Company’s balance as of each respective date.
For March 31, 2021, the distribution payable was adjusted
to $27 million, which represents the actual distribution paid
subsequent to March 31, 2021. |
(5) |
Holding Company’s balance as of each respective date. |
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
|
|
|
(In millions)(Unaudited) |
Adjusted
EBITDA |
|
|
|
|
|
Net income (loss) |
$599 |
|
|
($2,306 |
) |
Interest expense, net |
|
194 |
|
|
|
162 |
|
Income tax expense (benefit) |
|
17 |
|
|
|
(180 |
) |
Depreciation, depletion and amortization |
|
127 |
|
|
|
121 |
|
EBITDA before
non-controlling interests |
|
937 |
|
|
|
(2,203 |
) |
Restructuring costs |
|
- |
|
|
|
2 |
|
Gain on disposition of assets, net |
|
- |
|
|
|
(1 |
) |
Other |
|
15 |
|
|
|
39 |
|
Adjusted EBITDA before
non-controlling interests |
$952 |
|
|
($2,163 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA
attributable to IEP |
|
|
|
|
|
|
|
Net income (loss) |
$162 |
|
|
($1,384 |
) |
Interest expense, net |
|
136 |
|
|
|
126 |
|
Income tax expense (benefit) |
|
30 |
|
|
|
(167 |
) |
Depreciation, depletion and amortization |
|
93 |
|
|
|
85 |
|
EBITDA attributable to
IEP |
|
421 |
|
|
|
(1,340 |
) |
Restructuring costs |
|
- |
|
|
|
2 |
|
Gain on disposition of assets, net |
|
- |
|
|
|
(1 |
) |
Other |
|
14 |
|
|
|
35 |
|
Adjusted EBITDA
attributable to IEP |
$435 |
|
|
($1,304 |
) |
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
|
|
|
(In millions)(Unaudited) |
Adjusted
EBIT |
|
|
|
|
|
Net income (loss) |
$599 |
|
|
($2,306 |
) |
Interest expense, net |
|
194 |
|
|
|
162 |
|
Income tax expense (benefit) |
|
17 |
|
|
|
(180 |
) |
EBIT before
non-controlling interests |
|
810 |
|
|
|
(2,324 |
) |
Restructuring costs |
|
- |
|
|
|
2 |
|
Gain on disposition of assets, net |
|
- |
|
|
|
(1 |
) |
Other |
|
15 |
|
|
|
39 |
|
Adjusted EBIT before
non-controlling interests |
$825 |
|
|
($2,284 |
) |
|
|
|
|
|
|
Adjusted EBIT
attributable to IEP |
|
|
Net income (loss) |
$162 |
|
|
($1,384 |
) |
Interest expense, net |
|
136 |
|
|
|
126 |
|
Income tax expense (benefit) |
|
30 |
|
|
|
(167 |
) |
EBIT attributable to
IEP |
|
328 |
|
|
|
(1,425 |
) |
Restructuring costs |
|
- |
|
|
|
2 |
|
Gain on disposition of assets, net |
|
- |
|
|
|
(1 |
) |
Other |
|
14 |
|
|
|
35 |
|
Adjusted EBIT
attributable to IEP |
$342 |
|
|
($1,389 |
) |
|
|
|
|
|
|
Investor Contacts:SungHwan Cho, Chief Financial
Officer(305) 422-4000
Icahn Enterprises (NASDAQ:IEP)
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