Icahn Enterprises(US:IEP)2023-02-23 16:00Financial Performance - Icahn Enterprises reported net sales of $13,378 million for the year ended December 31, 2022, an increase of 30.2% from $10,304 million in 2021[377]. - The company experienced a net loss attributable to Icahn Enterprises of $183 million in 2022, compared to a net loss of $218 million in 2021, reflecting a 16.1% improvement[377]. - Total assets increased to $27,914 million as of December 31, 2022, up from $27,746 million in 2021, representing a growth of 0.6%[376]. - Total liabilities decreased slightly to $18,356 million in 2022 from $18,403 million in 2021, indicating a reduction of 0.3%[376]. - The company reported comprehensive loss attributable to Icahn Enterprises of $179 million in 2022, compared to a loss of $213 million in 2021, showing a 16% improvement[379]. - As of December 31, 2022, Icahn Enterprises reported a net loss of $25 million, a significant improvement from a net loss of $500 million in 2021 and $2,468 million in 2020[383]. - Cash and cash equivalents increased to $2,337 million in 2022 from $2,321 million in 2021, a growth of 0.7%[376]. - The company’s equity attributable to Icahn Enterprises rose to $3,900 million in 2022, up from $3,544 million in 2021, reflecting a 10.1% increase[376]. Revenue Recognition - The company recognizes revenue from the sale of nitrogen fertilizer products upon delivery and acceptance by the customer[460]. - The Automotive segment recognizes revenues from franchise royalties based on a percentage of franchise sales, generally received over time[467]. - The Pharma segment recognizes product revenue net of estimated returns and consideration paid to customers, wholesalers, and pharmacies[471]. - The Food Packaging segment recognizes revenue at the time products are shipped to the customer, net of discounts and allowances[469]. Investment Activities - The company holds approximately 46% investment in the Investment Funds, which mitigates the impact of fair value changes on its net gain or loss from investment activities[356]. - The total carrying value of investments held by the Investment segment was $6,719 million as of December 31, 2022, compared to $8,952 million in 2021[492]. - The unrealized losses for the Investment segment related to securities still held were $(1,544) million for 2022, $1,153 million for 2021, and $65 million for 2020[493]. - The Investment segment recognized a net loss of $(322) million attributable to investee shareholders for Xerox in 2022, with net sales from operations amounting to $7,107 million[501]. - The company obtained significant influence over Xerox Holding Corporation in the first quarter of 2022, with a fair value investment of $500 million[496]. Debt and Interest Rate Exposure - As of December 31, 2022, the carrying value of the company's long-term debt was approximately $7.1 billion, with an estimated fair value of $6.6 billion[410]. - The company has additional borrowing availability of $305 million subject to variable interest rates, increasing its exposure to interest rate fluctuations[361]. - The company estimates that a 10% adverse change in the fair value of its investments would decrease the fair values of securities owned, sold, and derivatives by approximately $672 million, $650 million, and $968 million, respectively, as of December 31, 2022[356]. Segment Performance - The Energy segment, primarily through CVR Energy, is engaged in petroleum refining and nitrogen fertilizer manufacturing, with CVR Energy owning approximately 71% of its common stock as of December 31, 2022[388]. - The Automotive segment operates through Icahn Automotive Group LLC, focusing on the retail and wholesale distribution of automotive parts and services[389]. - The Pharma segment, through Vivus LLC, includes two approved therapies and one product candidate in active clinical development[394]. Inventory and Cost Management - The cost of goods sold rose to $11,689 million in 2022, up from $9,485 million in 2021, marking a 23.2% increase[377]. - Total inventories increased from $1,478 million in 2021 to $1,531 million in 2022, with raw materials rising from $291 million to $335 million[531]. - The Automotive segment recorded inventory using the last-in, first-out method valued at $246 million as of December 31, 2022, down from $264 million in 2021[431]. Risk Factors - The company faces risks related to economic downturns, competition, and rising operating costs, which could materially affect its financial condition[8]. - The company is subject to risks associated with its investment activities, including potential declines in the fair value of investments due to market conditions[10]. - The company has significant exposure to commodity price risk, particularly in its Energy segment, which relies on a positive spread between raw material costs and finished product values[357]. Cash Flow and Capital Expenditures - The cash flows from operating activities for 2022 were $1,055 million, compared to $321 million in 2021 and a cash outflow of $416 million in 2020[383]. - Capital expenditures for 2022 amounted to $338 million, up from $305 million in 2021[383]. Tax and Regulatory Considerations - The company may be negatively impacted by changes in tax laws and the potential for becoming taxable as a corporation if not treated as a partnership for U.S. federal income tax purposes[12]. Asset Management - The company recorded out-of-period adjustments of $51 million of income related to inventory write-downs at the Automotive Segment in Q4 2022[408]. - Goodwill is reviewed for impairment annually, with an impairment existing when a reporting unit's carrying value exceeds its fair value[435]. - The company utilizes a portfolio approach for accounting right-of-use assets and lease liabilities, reflecting options to extend or terminate leases when reasonably certain[454].