Icahn Enterprises L.P. Reports Third Quarter 2020 Financial Results
Icahn Enterprises (IEP) reported a third quarter net loss of $714 million, translating to a loss of $3.14 per depositary unit. Revenues for the quarter were reported at $722 million, a significant decline from $2.3 billion in Q3 2019. The nine-month revenue total was $3.4 billion, down from $6.4 billion in the previous year. Adjusted EBITDA for the third quarter was $(550) million, worsening from $(121) million year-on-year. Despite the losses, the board declared a quarterly distribution of $2.00 per depositary unit, set to be paid by December 29, 2020.
- Quarterly distribution of $2.00 per depositary unit.
- Third quarter net loss of $714 million, $3.14 per depositary unit.
- Q3 revenues declined to $722 million from $2.3 billion year-on-year.
- Adjusted EBITDA decreased to $(550) million compared to $(121) million YoY.
- Nine-month loss escalated to $1.8 billion from $941 million YoY.
- Third quarter net loss attributable to Icahn Enterprises of
$714 million , or a loss$3.14 per depositary unit - Board approves quarterly distribution of
$2.00 per depositary unit
SUNNY ISLES BEACH, Fla., Nov. 06, 2020 (GLOBE NEWSWIRE) -- Icahn Enterprises L.P. (NASDAQ:IEP) is reporting third quarter 2020 revenues of
For the nine months ended September 30, 2020, revenues were
On November 4, 2020, the Board of Directors of the general partner of Icahn Enterprises declared a quarterly distribution in the amount of
Icahn Enterprises L.P., a master limited partnership, is a diversified holding company engaged in seven primary business segments: Investment, Energy, Automotive, Food Packaging, Metals, 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 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (In millions, except per unit amounts) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Net sales | $ | 1,764 | $ | 2,484 | $ | 4,950 | $ | 7,371 | ||||||||
| Other revenues from operations | 163 | 170 | 460 | 504 | ||||||||||||
| Net loss from investment activities | (1,259 | ) | (657 | ) | (2,152 | ) | (1,968 | ) | ||||||||
| Interest and dividend income | 46 | 69 | 135 | 192 | ||||||||||||
| Gain on disposition of assets, net | 7 | 249 | 5 | 256 | ||||||||||||
| Other income (loss), net | 1 | 5 | (27 | ) | 16 | |||||||||||
| 722 | 2,320 | 3,371 | 6,371 | |||||||||||||
| Expenses: | ||||||||||||||||
| Cost of goods sold | 1,599 | 2,069 | 4,543 | 6,098 | ||||||||||||
| Other expenses from operations | 127 | 141 | 369 | 409 | ||||||||||||
| Selling, general and administrative | 289 | 352 | 888 | 1,027 | ||||||||||||
| Restructuring, net | 1 | 4 | 8 | 15 | ||||||||||||
| Impairment | 1 | — | 6 | 1 | ||||||||||||
| Interest expense | 171 | 153 | 517 | 443 | ||||||||||||
| 2,188 | 2,719 | 6,331 | 7,993 | |||||||||||||
| Loss before income tax benefit | (1,466 | ) | (399 | ) | (2,960 | ) | (1,622 | ) | ||||||||
| Income tax benefit | 66 | 26 | 118 | 12 | ||||||||||||
| Loss from continuing operations | (1,400 | ) | (373 | ) | (2,842 | ) | (1,610 | ) | ||||||||
| Loss from discontinued operations | — | — | — | (24 | ) | |||||||||||
| Net loss | (1,400 | ) | (373 | ) | (2,842 | ) | (1,634 | ) | ||||||||
| Less: net loss attributable to non-controlling interests | (686 | ) | (324 | ) | (1,043 | ) | (693 | ) | ||||||||
| Net loss attributable to Icahn Enterprises | $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (941 | ) | ||||
| Net loss attributable to Icahn Enterprises from: | ||||||||||||||||
| Continuing operations | $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (917 | ) | ||||
| Discontinued operations | — | — | — | (24 | ) | |||||||||||
| $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (941 | ) | |||||
| Net loss attributable to Icahn Enterprises allocated to: | ||||||||||||||||
| Limited partners | $ | (700 | ) | $ | (48 | ) | $ | (1,763 | ) | $ | (922 | ) | ||||
| General partner | (14 | ) | (1 | ) | (36 | ) | (19 | ) | ||||||||
| $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (941 | ) | |||||
| Basic and diluted loss per LP unit: | ||||||||||||||||
| Continuing operations | $ | (3.14 | ) | $ | (0.24 | ) | $ | (8.12 | ) | $ | (4.56 | ) | ||||
| Discontinued operations | — | — | — | (0.12 | ) | |||||||||||
| Basic and diluted loss per LP unit | $ | (3.14 | ) | $ | (0.24 | ) | $ | (8.12 | ) | $ | (4.68 | ) | ||||
| Basic and diluted weighted average LP units outstanding | 223 | 202 | 217 | 197 | ||||||||||||
| Cash distributions declared per LP unit | $ | 2.00 | $ | 2.00 | $ | 6.00 | $ | 6.00 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (In millions) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 1,862 | $ | 3,794 | ||||
| Cash held at consolidated affiliated partnerships and restricted cash | 2,687 | 1,151 | ||||||
| Investments | 6,910 | 9,945 | ||||||
| Due from brokers | 1,682 | 858 | ||||||
| Accounts receivable, net | 443 | 483 | ||||||
| Inventories, net | 1,536 | 1,795 | ||||||
| Property, plant and equipment, net | 4,297 | 4,454 | ||||||
| Unrealized gain on derivative contracts | 1,439 | 182 | ||||||
| Goodwill | 284 | 282 | ||||||
| Intangible assets, net | 400 | 431 | ||||||
| Other assets | 1,284 | 1,264 | ||||||
| Total Assets | $ | 22,824 | $ | 24,639 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 663 | $ | 945 | ||||
| Accrued expenses and other liabilities | 1,451 | 1,453 | ||||||
| Deferred tax liability | 578 | 639 | ||||||
| Unrealized loss on derivative contracts | 172 | 1,224 | ||||||
| Securities sold, not yet purchased, at fair value | 970 | 1,190 | ||||||
| Due to brokers | 1,971 | 54 | ||||||
| Debt | 8,146 | 8,192 | ||||||
| Total liabilities | 13,951 | 13,697 | ||||||
| Equity: | ||||||||
| Limited partners | 4,086 | 6,268 | ||||||
| General partner | (856 | ) | (812 | ) | ||||
| Equity attributable to Icahn Enterprises | 3,230 | 5,456 | ||||||
| Equity attributable to non-controlling interests | 5,643 | 5,486 | ||||||
| Total equity | 8,873 | 10,942 | ||||||
| Total Liabilities and Equity | $ | 22,824 | $ | 24,639 | ||||
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.
| September 30, | December 31, | ||||||
| 2020 | 2019 | ||||||
| (In millions)(Unaudited) | |||||||
| Market-valued Subsidiaries and Investments: | |||||||
| Holding Company interest in Investment Funds(1) | $ | 4,058 | $ | 4,296 | |||
| CVR Energy(2) | 881 | 2,879 | |||||
| Tenneco(2) | 204 | 386 | |||||
| Total market-valued subsidiaries and investments | $ | 5,143 | $ | 7,561 | |||
| Other Subsidiaries: | |||||||
| Viskase(3) | $ | 240 | $ | 84 | |||
| Real Estate Holdings(1) | 433 | 474 | |||||
| PSC Metals(1) | 144 | 156 | |||||
| WestPoint Home(1) | 145 | 147 | |||||
| Icahn Automotive Group(1) | 1,654 | 1,750 | |||||
| Total other subsidiaries | $ | 2,616 | $ | 2,611 | |||
| Add: Other Holding Company net assets(4) | 185 | 186 | |||||
| Indicative Gross Asset Value | $ | 7,944 | $ | 10,358 | |||
| Add: Holding Company cash and cash equivalents(4) | 987 | 3,006 | |||||
| Less: Holding Company debt(4) | (5,812 | ) | (6,297 | ) | |||
| Indicative Net Asset Value | $ | 3,119 | $ | 7,067 | |||
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 September 30, 2020 and December 31, 2019. September 30, 2020 is pro forma for Viskase’s
(4) Holding Company’s balance as of each respective date. For September 30, 2020, Holding Company cash and cash equivalents is pro forma for Viskase’s
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (In millions)(Unaudited) | |||||||||||||||
| Adjusted EBITDA | |||||||||||||||
| Net income (loss) | $ | (1,400 | ) | $ | (373 | ) | $ | (2,842 | ) | $ | (1,610 | ) | |||
| Interest expense, net | 168 | 134 | 501 | 395 | |||||||||||
| Income tax expense (benefit) | (66 | ) | (26 | ) | (118 | ) | (12 | ) | |||||||
| Depreciation, depletion and amortization | 126 | 129 | 379 | 389 | |||||||||||
| EBITDA before non-controlling interests | (1,172 | ) | (136 | ) | (2,080 | ) | (838 | ) | |||||||
| Impairment of assets | 1 | - | 6 | 1 | |||||||||||
| Restructuring costs | 1 | 4 | 8 | 15 | |||||||||||
| Non-service cost of U.S. based pension | - | 1 | - | 2 | |||||||||||
| (Gain) loss on disposition of assets, net | (7 | ) | (252 | ) | (7 | ) | (251 | ) | |||||||
| Other | 14 | 17 | 93 | 37 | |||||||||||
| Adj. EBITDA before non-controlling interests | $ | (1,163 | ) | $ | (366 | ) | $ | (1,980 | ) | $ | (1,034 | ) | |||
| Adjusted EBITDA attributable to IEP | |||||||||||||||
| Net income (loss) | $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (917 | ) | |||
| Interest expense, net | 123 | 105 | 375 | 314 | |||||||||||
| Income tax expense (benefit) | (55 | ) | (33 | ) | (89 | ) | (35 | ) | |||||||
| Depreciation, depletion and amortization | 87 | 88 | 260 | 267 | |||||||||||
| EBITDA attributable to IEP | (559 | ) | 111 | (1,253 | ) | (371 | ) | ||||||||
| Impairment of assets | 1 | - | 6 | 1 | |||||||||||
| Restructuring costs | 1 | 4 | 8 | 13 | |||||||||||
| Non-service cost of U.S. based pension | - | 1 | - | 2 | |||||||||||
| (Gain) loss on disposition of assets, net | (7 | ) | (252 | ) | (7 | ) | (251 | ) | |||||||
| Other | 14 | 15 | 88 | 33 | |||||||||||
| Adjusted EBITDA attributable to IEP | $ | (550 | ) | $ | (121 | ) | $ | (1,158 | ) | $ | (573 | ) | |||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (In millions)(Unaudited) | |||||||||||||||
| Adjusted EBIT | |||||||||||||||
| Net income (loss) | $ | (1,400 | ) | $ | (373 | ) | $ | (2,842 | ) | $ | (1,610 | ) | |||
| Interest expense, net | 168 | 134 | 501 | 395 | |||||||||||
| Income tax expense (benefit) | (66 | ) | (26 | ) | (118 | ) | (12 | ) | |||||||
| EBIT before non-controlling interests | (1,298 | ) | (265 | ) | (2,459 | ) | (1,227 | ) | |||||||
| Impairment of assets | 1 | - | 6 | 1 | |||||||||||
| Restructuring costs | 1 | 4 | 8 | 15 | |||||||||||
| Non-service cost of U.S. based pension | - | 1 | - | 2 | |||||||||||
| (Gain) loss on disposition of assets, net | (7 | ) | (252 | ) | (7 | ) | (251 | ) | |||||||
| Other | 14 | 17 | 93 | 37 | |||||||||||
| Adj. EBIT before non-controlling interests | $ | (1,289 | ) | $ | (495 | ) | $ | (2,359 | ) | $ | (1,423 | ) | |||
| Adjusted EBIT attributable to IEP | |||||||||||||||
| Net income (loss) | $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (917 | ) | |||
| Interest expense, net | 123 | 105 | 375 | 314 | |||||||||||
| Income tax expense (benefit) | (55 | ) | (33 | ) | (89 | ) | (35 | ) | |||||||
| EBIT attributable to IEP | (646 | ) | 23 | (1,513 | ) | (638 | ) | ||||||||
| Impairment of assets | 1 | - | 6 | 1 | |||||||||||
| Restructuring costs | 1 | 4 | 8 | 13 | |||||||||||
| Non-service cost of U.S. based pension | - | 1 | - | 2 | |||||||||||
| (Gain) loss on disposition of assets, net | (7 | ) | (252 | ) | (7 | ) | (251 | ) | |||||||
| Other | 14 | 15 | 88 | 33 | |||||||||||
| Adjusted EBIT attributable to IEP | $ | (637 | ) | $ | (209 | ) | $ | (1,418 | ) | $ | (840 | ) | |||
Investor Contacts:
SungHwan Cho, Chief Financial Officer
(305) 422-4000
FAQ
What were Icahn Enterprises' earnings results for Q3 2020?
What is the future outlook for Icahn Enterprises?
How much revenue did Icahn Enterprises generate in the first nine months of 2020?
What was the Adjusted EBITDA for Icahn Enterprises in Q3 2020?
