Icahn Enterprises L.P. Reports Third Quarter 2020 Financial Results
- 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
For the nine months ended
On
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| 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 |
$ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (941 | ) | ||||
| Net loss attributable to |
||||||||||||||||
| Continuing operations | $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (917 | ) | ||||
| Discontinued operations | — | — | — | (24 | ) | |||||||||||
| $ | (714 | ) | $ | (49 | ) | $ | (1,799 | ) | $ | (941 | ) | |||||
| Net loss attributable 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)
| 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 | ||||||
| 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 |
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
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
·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
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.
| 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: | |||||||
| $ | 240 | $ | 84 | ||||
| 433 | 474 | ||||||
| 144 | 156 | ||||||
| 145 | 147 | ||||||
| 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
(4) Holding Company’s balance as of each respective date. For
| Three Months Ended |
Nine Months Ended |
||||||||||||||
| 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 |
- | 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 |
- | 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 |
Nine Months Ended |
||||||||||||||
| 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 |
- | 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 |
- | 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:
(305) 422-4000
Source: Icahn Enterprises L.P.