Icahn Enterprises(US:IEP)2023-05-09 16:00PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Presents the unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2023 Condensed Consolidated Balance Sheets Total assets decreased to $26.27 billion and total equity fell to $8.50 billion as of March 31, 2023 Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $26,269 | $27,914 | | Total Liabilities | $17,773 | $18,356 | | Total Equity | $8,496 | $9,558 | | Equity attributable to Icahn Enterprises | $3,091 | $3,900 | Condensed Consolidated Statements of Operations The company reported a net loss of $270 million for Q1 2023, a reversal from a $323 million net income in Q1 2022 Q1 2023 vs Q1 2022 Performance (in millions, except per unit data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenues | $2,641 | $4,093 | | Net (Loss) Gain from Investment Activities | $(443) | $939 | | Loss on Deconsolidation of Subsidiary | $226 | $-- | | Net (Loss) Income Attributable to Icahn Enterprises | $(270) | $323 | | Diluted (Loss) Income per LP Unit | $(0.75) | $1.06 | Condensed Consolidated Statements of Cash Flows Operating cash flow was $247 million in Q1 2023, a significant decrease from $1.92 billion in the prior-year period Cash Flow Summary (in millions) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $247 | $1,920 | | Net Cash (Used in) Provided by Investing Activities | $(45) | $38 | | Net Cash Provided by (Used in) Financing Activities | $1 | $(435) | Notes to Condensed Consolidated Financial Statements Details key events including the Auto Plus bankruptcy, segment operations, debt, and a new regulatory inquiry - The company operates through seven continuing segments: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion, and Pharma23 - The Auto Plus subsidiary's bankruptcy led to its deconsolidation and a non-cash charge of $226 million306061 - As of March 31, 2023, the company had total debt of approximately $7.1 billion, with $5.3 billion at the Holding Company level115 - The U.S. Attorney's office for the Southern District of New York requested information related to corporate governance and other materials153 Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses Q1 2023 results, segment performance, liquidity, and recent events including a new repurchase authorization Results of Operations The Q1 2023 net loss was driven by the Investment segment's (4.1)% return and the Auto Plus deconsolidation Net Income (Loss) Attributable to Icahn Enterprises by Segment (in millions) | Segment | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Investment | $(171) | $414 | | Holding Company | $(218) | $(126) | | Energy | $132 | $61 | | Automotive | $(13) | $(28) | | Consolidated | $(270) | $323 | - The Investment Funds' return was (4.1)% for Q1 2023, driven by net losses in short positions of (6.2)%173175 - The Automotive segment's net sales decreased by $113 million (20%) due to the deconsolidation of Auto Plus as of January 31, 2023197 - A pre-tax loss on deconsolidation of the Auto Plus subsidiary of $226 million was recorded for the three months ended March 31, 2023210 Liquidity and Capital Resources The Holding Company had $1.9 billion in cash and $5.3 billion in debt, with a new $1 billion repurchase program authorized - The Holding Company had cash and cash equivalents of approximately $1.9 billion and total debt of approximately $5.3 billion as of March 31, 2023215 - As of March 31, 2023, the Investment Funds had a net short notional exposure of 38%, with long exposure at 103% and short exposure at 141%226 - On May 9, 2023, the Board approved a repurchase program authorizing the repurchase of up to $500 million of senior notes and $500 million of depositary units224 - Subsequent to quarter-end, Mr. Icahn and his affiliates redeemed $867 million from the Investment segment232 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk stems from its Investment segment, with significant exposure to security value fluctuations - The company's predominant market risk exposure is from its Investment segment254 - Based on March 31, 2023 balances, a 10% adverse change in fair value would negatively impact securities owned by ~$652 million, securities sold short by ~$565 million, and derivatives by ~$1,058 million257 - The impact to IEP's net income from such a change would be less than the total change in fair value, as IEP holds an approximate 46% interest in the Investment Funds257 Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2023258 - No material changes to internal control over financial reporting occurred during the first quarter of 2023259 PART II. OTHER INFORMATION Legal Proceedings The company is subject to ordinary course litigation with no material changes from the 2022 Annual Report - The company is involved in various lawsuits arising in the normal course of business, with details in Note 17 of the financial statements262 Risk Factors Highlights risks from Carl Icahn's controlling ownership, short-seller reports, and potential investment impairments - Carl Icahn's control (approx. 84% ownership) and his substantially pledged units pose a risk of forced sale from a potential margin call264266 - The company is subject to short-selling strategies, with a recent report causing significant price volatility270 - There is a risk of being taxed as a corporation if less than 90% of gross income is 'qualifying' income272 - Investment risk is highlighted by the Auto Plus bankruptcy, which resulted in a $226 million non-cash charge and a write-down of the remaining equity to $0275 Other Information Reports an increase in the base salary for the Chief Financial Officer, Ted Papapostolou - Effective May 9, 2023, the base salary of CFO Ted Papapostolou was increased from $550,000 to $850,000 per year276 Exhibits Lists the exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL data files