Icahn Enterprises L.P. Reports Second Quarter 2022 Financial Results

Rhea-AI Summary

Icahn Enterprises reported a net income of $195 million for the first half of 2022, up from $26 million in the same period last year, leading to $0.64 per depositary unit. Revenue rose to $7.6 billion, compared to $6.4 billion previously. However, a $128 million net loss occurred in Q2 2022, slightly better than the $136 million loss in Q2 2021. Adjusted EBITDA for the first half increased to $742 million, while Q2's Adjusted EBITDA fell to $126 million. The indicative net asset value rose to $6.6 billion, a $1.5 billion increase since December 2021.

Positive

• Net income increased to $195 million from $26 million YoY.
• Revenue rose to $7.6 billion from $6.4 billion YoY.
• Adjusted EBITDA improved to $742 million for the first half of 2022.

Negative

• Q2 2022 net loss of $128 million compared to $136 million loss in Q2 2021.
• Q2 Adjusted EBITDA decreased to $126 million from $192 million YoY.

• For the six months ended June 30, 2022, net income attributable to Icahn Enterprises was $195 million, or $0.64 per depositary unit. For the six months ended June 30, 2021, net income attributable to Icahn Enterprises was $26 million, or $0.10 per depositary unit. For the six months ended June 30, 2022, Adjusted EBITDA attributable to Icahn Enterprises was $742 million compared to $627 million for the six months ended June 30, 2021
• Second quarter net loss attributable to IEP was $128 million with Adjusted EBITDA attributable to IEP of $126 million. This represents an improvement of $8 million of net loss attributable to IEP and a decrease of $66 million of Adjusted EBITDA attributable to IEP compared to Q2 2021
• Indicative Net Asset Value increased to $6.6 billion as of June 30, 2022, an increase of $1.5 billion compared to December 31, 2021. The change in indicative net asset value includes, among other things, changes in the fair value of certain subsidiaries which are not included in our GAAP earnings
• Board approves quarterly distribution of $2.00 per depositary unit (the 69th consecutive quarterly distribution since 2005)

SUNNY ISLES BEACH, Fla., Aug. 4, 2022 /PRNewswire/ -- Icahn Enterprises L.P. (Nasdaq:IEP) believes activism is the best paradigm for investing. We are putting our activist principles into effect at our majority-controlled companies as well as the minority positions held in our investment segment, and currently have representatives on fourteen public company boards.  Additionally, we believe strongly in hedging our positions to mitigate risk, especially in markets that we are living in today. 

Icahn Enterprises L.P. is reporting revenues of $7.6 billion and net income attributable to Icahn Enterprises of $195 million, or $0.64 per depositary unit, for the six months ended June 30, 2022. For the six months ended June 30, 2021, revenues were $6.4 billion and net income attributable to Icahn Enterprises was $26 million, or $0.10 per depositary unit. Adjusted EBITDA attributable to Icahn Enterprises was $742 million for the six months ended June 30, 2022, compared to $627 million for the six months ended June 30, 2021.   

Second quarter 2022 revenues were $3.5 billion and net loss attributable to Icahn Enterprises was $128 million, or a loss of $0.41 per depositary unit. For the three months ended June 30, 2021, revenues were $3.0 billion and net loss attributable to Icahn Enterprises was $136 million, or a loss of $0.53 per depositary unit. For the three months ended June 30, 2022, Adjusted EBITDA attributable to Icahn Enterprises was $126 million compared to $192 million for the three months ended June 30, 2021.   

For the six months ended June 30, 2022, indicative net asset value increased by $1.5 billion to $6.6 billion. The change in indicative net asset value includes, among other things, changes in the fair value of certain subsidiaries which are not included in our GAAP earnings reported above.   

On August 3, 2022, 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 September 28, 2022, to depositary unitholders of record at the close of business on August 19, 2022. Depositary unitholders will have until September 16, 2022, 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 five consecutive trading days ending September 23, 2022. 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 owning subsidiaries currently engaged in the following continuing operating businesses: Investment, Energy, Automotive, Food Packaging, 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 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; the impacts from the Russia/Ukraine conflict, including economic volatility and the impacts of export controls and other economic sanctions,; 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, other feed stocks and refined products, declines in global demand for crude oil, refined products and liquid transportation fuels as a result of the COVID-19 pandemic, 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 our suppliers to timely deliver raw materials, and the failure to effectively respond to industry changes in casings technology; supply chain issues; inflation, including increased costs of raw materials and shipping, including as a result of the Russia/Ukraine conflict; labor shortages and workforce availability; 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. Additionally, there may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements. 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 June 30,						Six Months Ended June 30,
		2022			2021			2022			2021
		(in millions, except per unit amounts)
Revenues:
Net sales		$	3,796		$	2,612		$	6,764		$	4,830
Other revenues from operations			197			164			365			316
Net (loss) gain from investment activities			(442)			206			497			1,212
Interest and dividend income			50			34			92			60
Other loss, net			(98)			(28)			(122)			(46)
			3,503			2,988			7,596			6,372
Expenses:
Cost of goods sold			3,174			2,398			5,712			4,537
Other expenses from operations			148			126			285			244
Selling, general and administrative			315			304			616			620
Restructuring, net			—			5			—			5
Interest expense			151			158			285			353
			3,788			2,991			6,898			5,759
(Loss) income before income tax expense			(285)			(3)			698			613
Income tax expense			(2)			(59)			(100)			(76)
Net (loss) income			(287)			(62)			598			537
Less: net (loss) income attributable to non-controlling interests			(159)			74			403			511
Net (loss) income attributable to Icahn Enterprises		$	(128)		$	(136)		$	195		$	26
Net (loss) income attributable to Icahn Enterprises allocated to:
Limited partners		$	(125)		$	(134)		$	191		$	25
General partner			(3)			(2)			4			1
		$	(128)		$	(136)		$	195		$	26
Basic (loss) income per LP unit		$	(0.41)		$	(0.53)		$	0.64		$	0.10
Basic weighted average LP units outstanding			306			251			300			247
Diluted (loss) income per LP unit		$	(0.41)		$	(0.53)		$	0.64		$	0.10
Diluted weighted average LP units outstanding			306			251			300			247
Distributions declared per LP unit		$	2.00		$	2.00		$	4.00		$	4.00

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		June 30,			December 31,
		2022			2021
		(in millions)
ASSETS
Cash and cash equivalents		$	2,453		$	2,321
Cash held at consolidated affiliated partnerships and restricted cash			4,216			2,115
Investments			5,812			9,151
Due from brokers			5,080			5,530
Accounts receivable, net			728			546
Inventories, net			1,787			1,478
Property, plant and equipment, net			4,043			4,085
Derivative assets, net			900			612
Goodwill			288			290
Intangible assets, net			563			595
Other assets			1,025			1,023
Total Assets		$	26,895		$	27,746
LIABILITIES AND EQUITY
Accounts payable		$	1,151		$	805
Accrued expenses and other liabilities			2,060			1,778
Deferred tax liabilities			374			390
Derivative liabilities, net			822			787
Securities sold, not yet purchased, at fair value			4,062			5,340
Due to brokers			1,134			1,611
Debt			7,134			7,692
Total liabilities			16,737			18,403
Equity:
Limited partners			4,773			4,298
General partner			(746)			(754)
Equity attributable to Icahn Enterprises			4,027			3,544
Equity attributable to non-controlling interests			6,131			5,799
Total equity			10,158			9,343
Total Liabilities and Equity		$	26,895		$	27,746

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in evaluating its performance. These include non-GAAP EBITDA and Adjusted EBITDA. EBITDA represents earnings from continuing operations before interest expense, income tax (benefit) expense and depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding certain effects of impairment, restructuring costs, certain pension plan expenses, gains/losses on disposition of assets, gains/losses on extinguishment of debt and certain other non-operational charges. We present EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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 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 and Adjusted EBITDA present meaningful measures of performance exclusive of our capital structure and the method by which assets were acquired and financed. 

EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA: 

• 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 and Adjusted EBITDA  differently than we do, limiting their usefulness as comparative measures. In addition, EBITDA and Adjusted EBITDA  do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations. 

EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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. 

	June 30,		December 31,
	2022		2021
	(in millions)(unaudited)
Market-valued Subsidiaries and Investments:
Holding Company interest in Investment Funds(1)	$ 4,469		$ 4,271
CVR Energy(2)	2,385		1,197
Delek(2)	-		105
Total market-valued subsidiaries and investments	$ 6,854		$ 5,573
Other Subsidiaries:
Viskase(3)	$ 210		$ 230
Real Estate Holdings(1)	459		472
WestPoint Home(1)	137		132
Vivus(1)	251		259
Automotive Services(4)	851		952
Automotive Parts(1)	479		422
Automotive Owned Real Estate Assets(5)	1,187		1,187
Icahn Automotive Group	2,517		2,561
Total other subsidiaries	$ 3,574		$ 3,654
Add: Other Holding Company net assets(6)	15		(3)
Indicative Gross Asset Value	$ 10,443		$ 9,224
Add: Holding Company cash and cash equivalents(7)	1,446		1,707
Less: Holding Company debt(7)	(5,310)		(5,810)
Indicative Net Asset Value	$ 6,579		$ 5,121

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 and other net assets attributable to IEP. 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, express 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 GAAP 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 June 30, 2022 and December 31, 2021.
(4)	Amounts based on market comparables due to lack of material trading volume, valued at 14.0x Adjusted EBITDA for the twelve months ended June 30, 2022 and December 31, 2021.
(5)	Management performed a valuation on the owned real-estate with the assistance of third-party consultants to estimate fair-market-value. This analysis utilized property-level market rents, location level profitability, and utilized prevailing cap rates ranging from 5.5% to 6.5%. The valuation assumed that triple net leases are in place for all the locations at rents estimated by management based on market conditions. There is no assurance we would be able to sell the assets on the timeline or at the prices and lease terms we estimate. Different judgments or assumptions would result in different estimates of the value of the real estate assets. Moreover, although we evaluate and provide our Indicative Net Asset Value on a quarterly basis, the estimated values may fluctuate in the interim, so that any actual transaction could result in a higher or lower valuation.
(6)	Holding Company's balance as of each respective date, excluding non-cash deferred tax assets or liabilities.
(7)	Holding Company's balance as of each respective date.

 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)(unaudited)
Adjusted EBITDA
Net (loss) income	($287)		($62)		$ 598		$ 537
Interest expense, net	149		157		281		351
Income tax expense	2		59		100		76
Depreciation and amortization	127		132		249		259
EBITDA before non-controlling interests	(9)		286		1,228		1,223
(Gain) loss on disposition of assets, net	-		1		(2)		1
Transformation losses	13		48		29		72
Net loss on extinguishment of debt	-		7		1		5
Other	84		3		84		(4)
Adjusted EBITDA before non-controlling interests	$ 88		$ 345		$ 1,340		$ 1,297
Adjusted EBITDA attributable to IEP
Net (loss) income	($128)		($136)		$ 195		$ 26
Interest expense, net	110		115		213		251
Income tax (benefit) expense	(15)		63		75		94
Depreciation and amortization	86		93		171		185
EBITDA attributable to IEP	53		135		654		556
(Gain) loss on disposition of assets, net	-		1		(2)		1
Transformation losses	13		48		29		72
Net loss on extinguishment of debt	-		5		1		3
Other	60		3		60		(5)
Adjusted EBITDA attributable to IEP	$ 126		$ 192		$ 742		$ 627

Investor Contact:
Ted Papapostolou, Chief Financial Officer
(305) 422-4100

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SOURCE Icahn Enterprises L.P.

FAQ

What was Icahn Enterprises' net income for the first half of 2022?

Icahn Enterprises reported a net income of $195 million for the first half of 2022.

How much revenue did Icahn Enterprises generate in Q2 2022?

Icahn Enterprises generated $3.5 billion in revenue during Q2 2022.

What is the indicative net asset value of Icahn Enterprises as of June 30, 2022?

As of June 30, 2022, the indicative net asset value of Icahn Enterprises is $6.6 billion.

What was the Adjusted EBITDA for Icahn Enterprises in Q2 2022?

The Adjusted EBITDA for Icahn Enterprises in Q2 2022 was $126 million.

When is the next distribution payment scheduled for Icahn Enterprises?

The next distribution payment of $2.00 per depositary unit is scheduled for on or about September 28, 2022.