Icahn Enterprises(IEP) - 2025 Q1 - Quarterly Report

Forward-Looking Statements This report contains forward-looking statements regarding future results, performance, and strategies, subject to numerous risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like "believes," "expects," "potential," and similar expressions, and are not guarantees of future performance[8] - The company identifies a wide range of risks that could impact future results, including economic conditions, geopolitical conflicts, investment performance, regulatory changes, and operational challenges within its diverse business segments like energy price volatility, automotive industry conditions, and supply chain issues[9] PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Q1 2025 show a net loss attributable to Icahn Enterprises of $422 million, a significant increase from the $38 million loss in Q1 2024, with total assets decreasing to $15.5 billion from $16.3 billion at year-end 2024 Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $15,481 | $16,279 | | Cash and cash equivalents | $2,183 | $2,603 | | Investments | $2,073 | $2,310 | | Total Debt | $6,794 | $6,809 | | Total Liabilities | $11,739 | $11,658 | | Total Equity | $3,742 | $4,621 | Condensed Consolidated Statement of Operations (in millions, except per unit data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $1,867 | $2,470 | | Net loss from investment activities | $(394) | $(96) | | Net loss | $(580) | $(26) | | Net loss attributable to Icahn Enterprises | $(422) | $(38) | | Basic and Diluted loss per LP unit | $(0.79) | $(0.09) | | Distributions declared per LP unit | $0.50 | $1.00 | - Net cash used in operating activities was $182 million for Q1 2025, compared to $251 million in Q1 2024, resulting in a net decrease in cash and equivalents of $364 million in Q1 2025[19] Note 1. Description of Business Icahn Enterprises is a diversified holding company with subsidiaries in Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion, and Pharma, with Mr. Carl C. Icahn and his affiliates owning approximately 86% of outstanding depositary units as of March 31, 2025 - The company operates through seven primary segments: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion, and Pharma[22] - As of March 31, 2025, Mr. Icahn and his affiliates held a controlling interest of approximately 86% of outstanding depositary units[21] Note 10. Debt As of March 31, 2025, total debt was approximately $6.8 billion, slightly down from year-end 2024, with the Holding Company carrying the majority at $4.7 billion in senior notes and the Energy segment being the most indebted operating segment with $1.9 billion Debt Composition (in millions) | Category | March 31, 2025 | | :--- | :--- | | Holding Company | $4,699 | | Reporting Segments | $2,095 | | Total Debt | $6,794 | - The company and its subsidiaries were in compliance with all debt covenants as of March 31, 2025[98] Note 12. Segment Reporting For Q1 2025, the Investment segment reported the largest net loss attributable to Icahn Enterprises at $224 million, contrasting sharply with the Energy segment's $49 million profit in Q1 2024, which turned into an $86 million loss in Q1 2025, while the Holding Company also contributed a significant loss of $64 million Net (Loss) Income Attributable to Icahn Enterprises by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Investment | $(224) | $(23) | | Energy | $(86) | $49 | | Automotive | $(27) | $(9) | | Food Packaging | $(13) | $2 | | Real Estate | $(4) | $(2) | | Home Fashion | $(2) | $(1) | | Pharma | $(2) | $1 | | Holding Company | $(64) | $(55) | | Total | $(422) | $(38) | Note 16. Commitments and Contingencies The company faces several commitments and contingencies, including the Energy segment's $438 million Renewable Fuel Standard (RFS) liability, $21 million in pension liabilities for Viskase's underfunded plan, and an information request from the U.S. Attorney's office regarding corporate governance and capitalization - The Energy segment's RFS obligation liability increased to $438 million as of March 31, 2025, up from $323 million at year-end 2024[122] - The company is contingently liable for an underfunded pension plan at Viskase, estimated at $21 million as of March 31, 2025[128] - On May 3, 2023, the U.S. Attorney's office for the Southern District of New York requested information from the company regarding its governance, capitalization, securities offerings, and other materials, to which the company has produced documents in response[132] Note 18. Subsequent Events Subsequent to the quarter's end, the Board declared another quarterly distribution of $0.50 per unit, payable in June 2025, and Mr. Icahn and his affiliates redeemed $208 million from their personal interest in the Investment Funds in April 2025 - On May 5, 2025, the Board declared a quarterly distribution of $0.50 per depositary unit[134] - In April 2025, Mr. Icahn and his affiliates redeemed $208 million from the Investment Funds[135] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the Q1 2025 net loss of $422 million primarily to the poor performance of the Investment Funds, which had a negative return of 8.4%, and a significant downturn in the Energy segment, while the Holding Company's liquidity remains substantial with $1.3 billion in cash but relies on volatile subsidiary distributions Results of Operations The consolidated net loss widened significantly in Q1 2025, driven by the Investment and Energy segments, with the Investment Funds returning a negative 8.4% and the Energy segment's gross profit swinging from a $150 million profit to a $102 million loss YoY due to lower refining margins and higher RFS costs Investment Funds Performance | Period | Return | | :--- | :--- | | Q1 2025 | (8.4)% | | Q1 2024 | (0.8)% | - The Investment Funds' Q1 2025 negative performance was driven by net losses in long positions, particularly in the healthcare, consumer cyclical, and industrials sectors[155] - The Energy segment's gross profit decreased by $252 million YoY, primarily due to lower refining margins, increased RFS expenses, and unfavorable sales volumes from planned maintenance[166] - The Automotive segment's net sales and other revenues decreased by $34 million (9%) YoY due to lower pricing and exiting the Aftermarket Parts business[174] Liquidity and Capital Resources The Holding Company maintained a strong liquidity position with $1.3 billion in cash and $2.5 billion invested in the Investment Funds as of March 31, 2025, but its cash flow depends on distributions from subsidiaries, which can be restricted, as CVR Energy suspended its dividend in Q4 2024 and Q1 2025 Holding Company Liquidity (as of March 31, 2025) | Item | Amount (billions) | | :--- | :--- | | Cash and cash equivalents | $1.3 | | Investments in Investment Funds | $2.5 | | Total Debt | $4.7 | - The Holding Company's ability to meet obligations depends on cash flows from subsidiaries, which may be restricted, with CVR Energy suspending its dividend, impacting cash flow to the parent[194] - As of March 31, 2025, the Investment Funds had a net long notional exposure of 20%, with 95% long exposure and 74% short exposure[210] - The company has a repurchase program authorizing up to $500 million in depositary units and has re-approved authorization for up to an additional $500 million in senior notes[207] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk exposure is through its Investment segment, where a hypothetical 10% adverse change in the fair value of investments would negatively impact securities owned by $204 million, securities sold short by $90 million, and derivatives by $365 million - The company's predominant market risk is tied to the investment activities of its Investment Funds[236] - A hypothetical 10% adverse change in the fair value of investments held by the Investment Funds would result in significant negative impacts: $204 million for securities owned, $90 million for securities sold short, and $365 million for derivatives[239] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[240] - No material changes were made to the internal control over financial reporting during the first quarter of 2025[241] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is subject to litigation in the ordinary course of business, with no material changes to lawsuits and proceedings from those reported in the 2024 Annual Report on Form 10-K, as detailed in Note 16 of the financial statements - No material changes to legal proceedings were reported for the quarter, with details on ongoing matters referenced in Note 16, "Commitments and Contingencies"[244] Item 1A. Risk Factors There were no material changes to the company's risk factors during the first quarter of 2025 as compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - The company reported no material changes to its risk factors from its most recent annual report[245] Item 2. Unregistered Sales of Equity Securities and Use or Proceeds The company did not repurchase any of its depositary units during the quarter under its approved repurchase program - No depositary units were repurchased by the issuer during the period[247] Item 5. Other Information During the last fiscal quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter[248] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including amended partnership agreements, CEO/CFO certifications required by the Sarbanes-Oxley Act, and Inline XBRL data files - The exhibits include required CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906[249]