UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): December 5, 2007
ICAHN ENTERPRISES L.P.
(Exact Name of Registrant as Specified in Its Charter)
 	 	 	 	 	
Delaware	 	1-9516	 	13-3398766	
(State or Other
Jurisdiction of Incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
767 Fifth Avenue,
Suite 4700,
New York, NY 10153
(Address of Principal Executive Offices) (Zip Code)
(212) 702-4300
(Registrant’s Telephone Number, Including Area Code)
American Real Estate Partners, L.P.
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 	o	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

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This Current Report on Form 8-K is being filed to provide the financial statements and pro forma financial information relating to our recent acquisition of PSC Metals, Inc. (“PSC Metals”).
On November 9, 2007, we filed our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2007 (“Form 10-Q”). In Part II, Item 5 of the Form 10-Q (“Other Information”), we reported the completion, on November 5, 2007, of our acquisition of all the issued and outstanding stock of PSC Metals, Inc. from Philip Services Corporation, in which Carl C. Icahn indirectly owns a 95.6% interest and we indirectly own the remaining 4.4% interest. We reported the acquisition in Item 5 of the Form 10-Q in lieu of reporting it in Item 2.01 of a Current Report on Form 8-K which would otherwise have been required to be filed with respect to such information.
PSC Metals is engaged in the business of transporting, recycling and processing metals. We are a diversified holding company owning subsidiaries in the following continuing operating businesses: Investment Management, Metals, Real Estate and Home Fashion.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
 	 	 	 	
 	 	Page	 	
(a) Financial Statements of Businesses Acquired.
	 	 	  	 	 	
PSC Metals, Inc.
	 	 	  	 	 	
Report of Independent Certified Public Accountants	 	 	1	 	 	
Consolidated Balance Sheets as of December 31, 2006 and 2005	 	 	2	 	 	
Consolidated Statements of Income for the Years Ended December 31, 2006, 2005 and 2004	 	 	3	 	 	
Consolidated Statements of Stockholders’ Equity and Other Comprehensive Income for the Years Ended December 31, 2006, 2005 and 2004	 	 	4	 	 	
Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004	 	 	5	 	 	
Notes to Consolidated Financial Statements	 	 	6	 	 	
Consolidated Balance Sheets as of September 30, 2007 (Unaudited) and December 31, 2006	 	 	19	 	 	
Consolidated Statements of Income for the Three Months Ended September 30, 2007 and 2006 (Unaudited)	 	 	20	 	 	
Consolidated Statements of Income for the Nine Months Ended September 30, 2007 and 2006 (Unaudited)	 	 	21	 	 	
Consolidated Statement of Stockholders’ Equity and Other Comprehensive Income for the Nine Months Ended September 30, 2007 (Unaudited)	 	 	22	 	 	
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006 (Unaudited)	 	 	23	 	 	
Notes to Consolidated Financial Statements	 	 	24	 	 	
(b) Unaudited Pro Forma Financial Information.
	 	 	  	 	 	
The following required pro forma financial information is filed on the pages listed below.
	 	
Unaudited Pro Forma Condensed Combined Financial Information for Icahn Enterprises L.P. and Subsidiaries:
	 	 	  	 	 	
Introduction to Unaudited Pro Forma Condensed Combined Financial Information	 	 	33	 	 	
Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2007	 	 	34	 	 	
Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2007	 	 	36	 	 	
Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2006	 	 	37	 	 	
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2006	 	 	38	 	 	
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2005	 	 	39	 	 	
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2004	 	 	40	 	 	
Notes to Unaudited Pro Forma Condensed Combined Financial Statements	 	 	41	 	 	
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ICAHN ENTERPRISES L.P.
(Registrant)
 	By:	Icahn Enterprises G.P. Inc.
its General Partner	
 	By:	/s/ Andrew R. Skobe

Andrew R. Skobe
Chief Financial Officer	
Date: December 5, 2007
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
PSC Metals, Inc.
We have audited the accompanying consolidated balance sheets of PSC Metals, Inc. and Subsidiaries as of December 31, 2006 and 2005 and the related consolidated statements of income, stockholder’s equity and other comprehensive income, and cash flows for three years in the period ended December 31, 2006, all on an Icahn pushdown basis. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of PSC Metals, Inc. and Subsidiaries as of December 31, 2006 and 2005 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.
/s/ GRANT THORNTON LLP
Cleveland, Ohio
November 5, 2007
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PSC METALS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2006 and 2005
(In Thousands)
 	 	 	 	 	
 	 	December 31,	
  	 	2006	 	2005	
ASSETS
	 	 	  	 	 	 	  	 	
CURRENT ASSETS
	 	 	  	 	 	 	  	 	
Cash and cash equivalents	 	$	22,332	 	 	$	12,949	 	
Marketable securities	 	 	5,543	 	 	 	—	 	
Accounts receivable (net of allowance for doubtful accounts of $593 and $1,379 at December 31, 2006 and 2005, respectively)	 	 	55,308	 	 	 	67,997	 	
Accounts receivable from related parties	 	 	555	 	 	 	1,046	 	
Inventories	 	 	58,438	 	 	 	54,894	 	
Prepaid expenses and other current assets	 	 	6,412	 	 	 	5,096	 	
Deferred income taxes	 	 	3,304	 	 	 	2,215	 	
Total current assets	 	 	151,892	 	 	 	144,197	 	
PROPERTY, PLANT AND EQUIPMENT, NET	 	 	50,917	 	 	 	42,753	 	
DEFERRED INCOME TAXES — NONCURRENT	 	 	14,178	 	 	 	11,727	 	
OTHER ASSETS	 	 	3,080	 	 	 	3,211	 	
TOTAL ASSETS	 	$	220,067	 	 	$	201,888	 	
LIABILITIES AND STOCKHOLDER'S EQUITY
	 	 	  	 	 	 	  	 	
CURRENT LIABILITIES
	 	 	  	 	 	 	  	 	
Current maturities of long-term debt and capital lease obligations	 	$	652	 	 	$	1,195	 	
Accounts payable	 	 	23,769	 	 	 	24,171	 	
Accounts payable to related party	 	 	352	 	 	 	353	 	
Accrued liabilities	 	 	8,647	 	 	 	8,021	 	
Total current liabilities	 	 	33,420	 	 	 	33,740	 	
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
LESS CURRENT PORTION	 	 	1,607	 	 	 	2,271	 	
ACCRUED ENVIRONMENTAL COSTS	 	 	19,861	 	 	 	19,931	 	
COMMITMENTS AND CONTINGENCIES (Notes 8 and 9)	 	 	—	 	 	 	—	 	
STOCKHOLDER'S EQUITY
	 	 	  	 	 	 	  	 	
Common stock	 	 	—	 	 	 	—	 	
Additional paid-in capital	 	 	131,482	 	 	 	131,482	 	
Retained earnings	 	 	30,138	 	 	 	14,373	 	
Accumulated other comprehensive income	 	 	3,559	 	 	 	91	 	
Total stockholder's equity	 	 	165,179	 	 	 	145,946	 	
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	 	$	220,067	 	 	$	201,888	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2006, 2005 and 2004
(In Thousands)
 	 	 	 	 	 	 	
 	 	Year Ended December 31,	
  	 	2006	 	2005	 	2004	
Revenues	 	$	710,054	 	 	$	600,989	 	 	$	660,172	 	
Cost of sales	 	 	652,090	 	 	 	555,311	 	 	 	563,909	 	
Gross profit	 	 	57,964	 	 	 	45,678	 	 	 	96,263	 	
Selling, general and administrative	 	 	15,028	 	 	 	14,525	 	 	 	18,196	 	
Operating income	 	 	42,936	 	 	 	31,153	 	 	 	78,067	 	
Interest expense	 	 	(160	) 	 	 	(278	) 	 	 	(2,405	) 	
Interest and other income	 	 	5,144	 	 	 	1,457	 	 	 	4,502	 	
Income before income taxes	 	 	47,920	 	 	 	32,332	 	 	 	80,164	 	
Provision (benefit) for income taxes	 	 	(2,845	) 	 	 	8,907	 	 	 	(18,949	) 	
NET INCOME	 	$	50,765	 	 	$	23,425	 	 	$	99,113	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY
AND OTHER COMPREHENSIVE INCOME
For the Years Ended December 31, 2006, 2005 and 2004
(In Thousands)
 	 	 	 	 	 	 	 	 	 	 	
 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Retained
Earnings	 	Accumulated
Other
Comprehensive
Income
(Loss)	 	Total
Stockholder's
Equity	
Balance at January 1, 2004	 	$	—	 	 	$	70,702	 	 	$	(98,165	) 	 	$	(728	) 	 	$	(28,191	) 	
Comprehensive income:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Net income	 	 	—	 	 	 	—	 	 	 	99,113	 	 	 	—	 	 	 	99,113	 	
Foreign currency translation
adjustments	 	 	—	 	 	 	—	 	 	 	—	 	 	 	854	 	 	 	854	 	
Minimum pension liability
adjustment	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(205	) 	 	 	(205	) 	
Total comprehensive income	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	99,762	 	
Capital contribution	 	 	—	 	 	 	60,780	 	 	 	—	 	 	 	—	 	 	 	60,780	 	
Balance at December 31, 2004	 	 	—	 	 	 	131,482	 	 	 	948	 	 	 	(79	) 	 	 	132,351	 	
Comprehensive income:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Net income	 	 	—	 	 	 	—	 	 	 	23,425	 	 	 	—	 	 	 	23,425	 	
Foreign currency translation
adjustments	 	 	—	 	 	 	—	 	 	 	—	 	 	 	717	 	 	 	717	 	
Minimum pension liability adjustment	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(547	) 	 	 	(547	) 	
Total comprehensive income	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	23,595	 	
Dividend payment	 	 	—	 	 	 	—	 	 	 	(10,000	) 	 	 	—	 	 	 	(10,000	) 	
Balance at December 31, 2005	 	 	—	 	 	 	131,482	 	 	 	14,373	 	 	 	91	 	 	 	145,946	 	
Comprehensive income:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Net income	 	 	—	 	 	 	—	 	 	 	50,765	 	 	 	—	 	 	 	50,765	 	
Foreign currency translation adjustments	 	 	—	 	 	 	—	 	 	 	—	 	 	 	391	 	 	 	391	 	
Minimum pension liability adjustment	 	 	—	 	 	 	—	 	 	 	—	 	 	 	245	 	 	 	245	 	
Unrealized gain on available for sale securities, net of tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,832	 	 	 	2,832	 	
Total comprehensive income	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	54,233	 	
Dividend payments	 	 	—	 	 	 	—	 	 	 	(35,000	) 	 	 	—	 	 	 	(35,000	) 	
Balance at December 31, 2006	 	$	—	 	 	$	131,482	 	 	$	30,138	 	 	$	3,559	 	 	$	165,179	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2006, 2005 and 2004
(In Thousands)
 	 	 	 	 	 	 	
 	 	Year Ended December 31,	
  	 	2006	 	2005	 	2004	
CASH FLOWS FROM OPERATING ACTIVITIES
	 	 	  	 	 	 	  	 	 	 	  	 	
Net income	 	$	50,765	 	 	$	23,425	 	 	$	99,113	 	
Adjustments to reconcile net income to net cash provided by operating activities:
	 	 	  	 	 	 	  	 	 	 	  	 	
Depreciation	 	 	6,816	 	 	 	4,097	 	 	 	2,827	 	
Deferred income taxes	 	 	(5,512	) 	 	 	6,357	 	 	 	(20,299	) 	
Gain on sale of assets	 	 	(797	) 	 	 	(1,035	) 	 	 	(1,666	) 	
Gain on sale of available for sale securities	 	 	(3,185	) 	 	 	—	 	 	 	—	 	
Change in minimum pension obligation	 	 	245	 	 	 	(547	) 	 	 	—	 	
Cash flow before changes in operating assets and liabilites	 	 	48,332	 	 	 	32,297	 	 	 	79,975	 	
Changes in operating assets and liabilities	 	 	8,604	 	 	 	(280	) 	 	 	(40,091	) 	
Net cash provided by operating activities	 	 	56,936	 	 	 	32,017	 	 	 	39,884	 	
CASH FLOWS FROM INVESTING ACTIVITIES
	 	 	  	 	 	 	  	 	 	 	  	 	
Purchase of property, plant and equipment, net	 	 	(15,900	) 	 	 	(26,972	) 	 	 	(10,585	) 	
Proceeds from sale of property, plant and equipment	 	 	1,717	 	 	 	989	 	 	 	1,989	 	
Marketable securities acquired	 	 	(1,180	) 	 	 	—	 	 	 	—	 	
Proceeds from sale of available for sale securities	 	 	3,626	 	 	 	—	 	 	 	—	 	
Net cash used in investing activities	 	 	(11,737	) 	 	 	(25,983	) 	 	 	(8,596	) 	
CASH FLOWS FROM FINANCING ACTIVITIES
	 	 	  	 	 	 	  	 	 	 	  	 	
Principal payments on debt	 	 	(415	) 	 	 	(8,115	) 	 	 	(57,903	) 	
Principal borrowing on debt	 	 	11	 	 	 	932	 	 	 	11,363	 	
Principal payments of capital lease obligations	 	 	(803	) 	 	 	(1,185	) 	 	 	(1,284	) 	
Capital contributions from Parent	 	 	—	 	 	 	—	 	 	 	39,200	 	
Dividend payment	 	 	(35,000	) 	 	 	(10,000	) 	 	 	—	 	
Net cash used in financing activities	 	 	(36,207	) 	 	 	(18,368	) 	 	 	(8,624	) 	
Effect of exchange rate changes on cash	 	 	391	 	 	 	717	 	 	 	—	 	
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	 	9,383	 	 	 	(11,617	) 	 	 	22,664	 	
Cash and cash equivalents at beginning of year	 	 	12,949	 	 	 	24,566	 	 	 	1,902	 	
Cash and cash equivalents at end of year	 	$	22,332	 	 	$	12,949	 	 	$	24,566	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 1 — Organization and Basis of Presentation
Business
PSC Metals, Inc. (the “Company”), an Ohio corporation, and its wholly owned subsidiaries Cappco Tubular Products Canada, Inc., Cappco Tubular Products USA, Inc. (collectively “Cappco”) and PSC Metals-Akron, Inc., are principally engaged in the business of collecting and processing ferrous and non-ferrous metals. As of December 31, 2006, the Company was a wholly owned subsidiary of Philip Services Corporation (“Philip”), a Delaware corporation that is principally engaged in providing industrial outsourcing and environmental services to major industry sectors throughout North America. As discussed in Note 14, “Subsequent Events,” on November 5, 2007 Icahn Enterprises L.P. (“Icahn Enterprises”), through a direct wholly owned subsidiary, acquired all of the issued and outstanding capital stock of the Company for $335,000 in cash.
The Company collects industrial scrap metal and obsolete scrap metal, processes it into reusable forms, and supplies the recycled metals to its customers including electric-arc furnace mills, integrated steel mills, foundries, secondary smelters and metals brokers. These services are provided through the Company’s recycling facilities located in eight states. The Company’s ferrous products include primarily shredded, sheared, bundled scrap metal and other purchased scrap metal such as turnings and cast and broken furnace iron. The Company also processes non-ferrous metals including aluminum, copper, brass, stainless steel and other nickel-bearing metals.
Cappco is in the secondary steel pipe business and has multiple stocking locations throughout Canada and the United States. Cappco distributes secondary and structural grade pipe to industries that include casing, fiber optics, tunneling, foundation piling, road-boring and fabrication.
Basis of Presentation
In June 2003, Philip and substantially all of its U.S. domiciled subsidiaries, including the Company, filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On December 10, 2003, the Bankruptcy Court confirmed the Second Amended and Restated Joint Plan of Reorganization (the “Plan”). Under the terms of the Plan, Philip became wholly owned by entities owned by Mr. Carl C. Icahn. As a result, the accompanying consolidated financial statements reflect the historical push-down basis of the assets and liabilities as if the Company had been acquired by entities owned by Mr. Icahn on December 31, 2003, the effective date of control.
The consolidated financial statements of the Company have been prepared in U.S. dollars using accounting principles generally accepted in the United States of America.
Note 2 — Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management of the Company to make estimates and assumptions that affect reported amounts of assets, liabilities, income and expenses and disclosures of contingencies. Actual results could differ from the estimates and judgments made in preparing these consolidated financial statements, which could be material. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment, inventories, deferred income tax assets, environmental liabilities and insurance claims.
Principles of Consolidation
These consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany balances, transactions and profits have been eliminated in consolidation.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 2 — Significant Accounting Policies  – (continued)
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit and deposits in money market instruments, with original maturity dates of less than three months from the date they are acquired. At December 31, 2006 and 2005, the Company had cash balances in excess of the Federal Deposit Insurance Corporation maximum of $100. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
Marketable Securities
Marketable securities consist of shares of stock, acquired in bankruptcy settlement, and held for resale. The securities are accounted for as available-for-sale in accordance with SFAS No. 115,  Accounting for Certain Investments in Debt and Equity Securities , and are classified as marketable securities on the Consolidated Balance Sheets. Available-for-sale securities are required to be carried at fair value, with any unrealized gains and losses reported on the Consolidated Statement of Stockholder’s Equity within a separate component, accumulated other comprehensive income (loss). The Company utilizes the specific identification method to determine the cost of the securities sold.
Accounts Receivable, Net
Accounts receivable are recorded when billed or accrued and represent amounts due from customers on product and other sales. The Company’s receivables, net of allowance for doubtful accounts, represent their estimated net realizable value. The Company establishes its allowance for doubtful accounts based on a number of factors, including the age of the balance, past experience with the customer, changes in collection patterns and general industry conditions.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined using the average cost method. The production and accounting process utilized by the Company to record recycled metals inventory quantities relies on significant estimates. The Company relies upon perpetual inventory records that utilize estimated recoveries and yields that are based upon historical trends and periodic tests for certain unprocessed metal commodities. Over time, these estimates are reasonably good indicators of what is ultimately produced; however, actual recoveries and yields can vary depending on product quality, moisture content and source of the unprocessed metal. To assist in validating the reasonableness of the estimates, the Company performs periodic physical inventories. Physical inventories may detect significant variations in volume, but because of variations in product density and production processes utilized to manufacture the product, physical inventories will not generally detect smaller variations. To help mitigate this risk, the Company adjusts its physical inventories when the volume of a commodity is low and a physical inventory can more accurately predict the remaining volume.
Details of inventory are as follows:
 	 	 	 	 	
 	 	2006	 	2005	
Ferrous	 	$	30,360	 	 	$	33,963	 	
Non-ferrous	 	 	7,871	 	 	 	3,005	 	
Secondary	 	 	20,207	 	 	 	17,926	 	
  	 	$	58,438	 	 	$	54,894	 	
Property, Plant and Equipment
Property, plant and equipment are recorded at cost less accumulated depreciation. Major rebuilds and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. Depreciation is
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 2 — Significant Accounting Policies  – (continued)
determined for financial reporting purposes using the straight-line method over the following estimated useful lives: 10 to 20 years for buildings and 3 to 25 years for equipment.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Management will determine whether there has been a permanent impairment on such assets held for use in the business by comparing anticipated undiscounted future cash flows from operating activities involving the asset to the carrying value of the asset. The amount of any resulting impairment will be calculated using the present value of the same cash flows. Long-lived assets to be disposed of are valued at the lower of carrying amount or net realizable value.
Environmental Liability
The Company accrues environmental remediation costs associated with identified sites where an assessment has indicated that cleanup costs are probable and can be reasonably estimated. Such accruals are based on currently available information, existing technology and enacted laws and regulations. The liability for environmental and closure costs is included in the consolidated balance sheet under accrued environmental costs. The Company accounts for its environmental remediation costs in accordance with AICPA Statement of Position 96-1,  Environmental Remediation Liabilities .
Self-Insured Reserves
For medical claims for most of its employees, workers’ compensation claims and general liability claims, the Company has a deductible or self-insurance retention and is protected by stop-loss insurance policies. The Company records a reserve for reported but unpaid claims and the estimated cost of incurred but not reported (“IBNR”) claims. IBNR reserves are based on a lag estimate for medical claims and actuarial assumptions for workers’ compensation and general liability claims.
Impact of New Accounting Pronouncements
In June 2006, the Financial Accounting Standards Board (the “FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes —  an interpretation of FASB No. 109  (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and provides guidance on the recognition, de-recognition, and measurement of benefits related to an entity’s uncertain tax positions. FIN 48 is effective for the Company beginning January 1, 2007. As a result of the implementation of FIN 48, the Company will recognize an increased liability of approximately $1.3, which will be accounted for as a reduction to the January 1, 2007 balance of retained earnings.
In September 2006, the FASB issued FASB Statement (“SFAS”) No. 157, Fair Value Measurements (“SFAS No. 157”). This statement defines “fair value,” establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of its adoption of SFAS No. 157.
In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R)  (“SFAS No. 158”). SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. The Company is required to adopt SFAS No. 158 as of December 31, 2007. The Company is evaluating the effect the adoption of this statement will have on its consolidated financial position or results of operations.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 2 — Significant Accounting Policies  – (continued)
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115  (“SFAS No. 159”). The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs) and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 is not expected to be material to our financial statements.
Financial Instruments
The Company’s accounts receivable, accounts payable and long-term debt constitute financial instruments. The fair value of the Company’s long-term debt is discussed in Note 6 to the Consolidated Financial Statements. The Company’s accounts receivable and accounts payable approximated their fair value at December 31, 2006 and 2005. Concentration of credit risk in accounts receivable is limited, due to the large number of customers the Company services throughout North America. One customer represented 13% and 12% of accounts receivable at December 31, 2006 and 2005, respectively. Sales to this customer represented 7.7%, 7.1% and 7.8% of revenues for the years ended December 31, 2006, 2005 and 2004, respectively.
Revenue Recognition
The Company’s primary source of revenue is from the sale of processed ferrous and non-ferrous scrap metals. The Company also generates revenues from the brokering of scrap metals or from services performed. Revenues from processed ferrous and non-ferrous scrap metal sales are recognized when title passes to the customer. Revenues relating to brokered sales are recognized upon receipt of the materials by the customer. Revenues from services are recognized as the service is performed. Sales adjustments related to price and weight differences and allowances for uncollectible receivables are accrued against revenues as incurred.
Income Taxes
Deferred income taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities. The deferred income tax provision represents the change during the reporting period in the deferred tax assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which these temporary differences are expected to be recovered or settled. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Foreign Currency Translation
The functional currency of the Company’s foreign subsidiary, Cappco Tubular Products Canada Inc., is the Canadian dollar. Transaction gains or losses are realized when incurred. The assets and liabilities denominated in a foreign currency for foreign operations are translated at exchange rates in effect at the balance sheet date. The resulting gains and losses are reflected in the other accumulated comprehensive income in stockholder’s equity.
Stock-Based Compensation
The Company does not have any stock-based employee compensation arrangements at December 31, 2006, 2005 or 2004.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 3 — Marketable Securities
Marketable securities consist of shares of common stock of Keystone Consolidated Industries, Inc. (“Keystone”), acquired in bankruptcy settlement, and held for resale. In 2006, the Company determined the value of Keystone common stock it received from the emergence of the bankruptcy protection. As such, 590,033 shares of common stock at a valuation of $1,180 were recorded as marketable securities, available-for-sale. Also, during 2006, the Company sold 220,500 shares for $3,626 recording a gain on sale of $3,185.
As of December 31, 2006, the marketable securities consist of 369,533 shares of Keystone common stock. Any unrealized gains or losses with respect to investments classified as available-for-sale are recognized within the Consolidated Statement of Shareholder’s Equity as accumulated other comprehensive income, net of deferred taxes. At December 31, 2006, the fair value of the securities was an asset of $5,543 and the Company recorded a gross unrealized gain of $4,803 (including the tax effect of $1,972) for the year ended December 31, 2006.
Note 4 — Income Taxes
The Company accounts for income taxes under SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”). Under SFAS No. 109, the Company provides deferred income taxes for the tax effects of temporary differences between the financial reporting and income tax basis of the Company’s assets and liabilities.
As of December 31, 2006, 2005 and 2004, the Company had federal net operating loss carryforwards in the United States of approximately $100, $15,900 and $15,700, respectively. The U.S. net operating loss carryforwards expire in 2022.
The Company is a part of an affiliated group of corporations controlled by Carl C. Icahn and is included as part of the consolidated federal income tax return for the years ended December 31, 2006, 2005 and 2004. The ultimate parent entity of Philip and the affiliated group of corporations controlled by Mr. Icahn is Starfire Holding Corporation (“Starfire”). The tax provision was prepared on a separate company basis as if the Company filed a stand-alone tax return.
U.S. and foreign income from operations before taxes are as follows:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
U.S.	 	$	43,923	 	 	$	29,083	 	 	$	78,461	 	
Non-U.S.	 	 	3,997	 	 	 	3,249	 	 	 	1,703	 	
Total income from operations	 	$	47,920	 	 	$	32,332	 	 	$	80,164	 	
Federal, state and foreign expense (benefit) for income taxes are as follows:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
U.S. federal and state — current	 	$	1,354	 	 	$	142	 	 	$	690	 	
U.S. federal and state — deferred	 	 	(5,683	) 	 	 	6,407	 	 	 	(19,782	) 	
  	 	 	(4,329	) 	 	 	6,549	 	 	 	(19,092	) 	
Non-U.S. — current	 	 	1,313	 	 	 	2,408	 	 	 	660	 	
Non-U.S. — deferred	 	 	171	 	 	 	(50	) 	 	 	(517	) 	
  	 	 	1,484	 	 	 	2,358	 	 	 	143	 	
Total expense (benefit)	 	$	(2,845	) 	 	$	8,907	 	 	$	(18,949	) 	
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 4 — Income Taxes  – (continued)
The Company’s expense (benefit) for income taxes is comprised of the following:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Income tax rate based on statutory income tax rate	 	 	35.00	% 	 	 	35.00	% 	 	 	35.00	% 	
State taxes, net of federal benefit	 	 	4.18	% 	 	 	18.52	% 	 	 	(2.15	)% 	
Tax rate differentials in other jurisdictions	 	 	.46	% 	 	 	3.12	% 	 	 	1.78	% 	
Other	 	 	.15	% 	 	 	.21	% 	 	 	.08	% 	
Adjustment due to 2004 tax return filings (U.S. and Canada)	 	 	—	 	 	 	(35.67	)% 	 	 	—	 	
Valuation allowance	 	 	(45.73	)% 	 	 	6.37	% 	 	 	(58.33	)% 	
Expense (benefit) for income taxes related to income statement	 	 	(5.94	)% 	 	 	27.55	% 	 	 	(23.64	)% 	
The net deferred tax asset/(liabilities) consists of the following temporary differences:
 	 	 	 	 	
 	 	2006	 	2005	
Current Deferred Asset
	 	 	  	 	 	 	  	 	
Net operating loss	 	$	3,748	 	 	$	—	 	
Excess interest carryforward	 	 	—	 	 	 	3,931	 	
Accruals not yet deductible	 	 	3,296	 	 	 	2,702	 	
Inventory related	 	 	2,439	 	 	 	2,406	 	
Other	 	 	(231	) 	 	 	—	 	
Marketable securities	 	 	(1,971	) 	 	 	—	 	
Valuation allowance	 	 	(3,977	) 	 	 	(6,824	) 	
Current Deferred Asset	 	$	3,304	 	 	$	2,215	 	
Noncurrent Deferred Asset
	 	 	  	 	 	 	  	 	
Net operating loss	 	$	—	 	 	$	11,206	 	
Property, plant and equipment and goodwill basis differences	 	 	23,826	 	 	 	29,203	 	
Environmental/insurance related	 	 	7,420	 	 	 	7,453	 	
Valuation allowance	 	 	(17,068	) 	 	 	(36,135	) 	
Noncurrent Deferred Asset	 	$	14,178	 	 	$	11,727	 	
Deferred tax asset	 	$	17,482	 	 	$	13,942	 	
Management considers whether it is more likely than not that all of the deferred tax assets will be realized. Projected future income tax-planning strategies and the expected reversal of deferred tax liabilities are considered in making this assessment. Based on the projected taxable income for 2007, the Company has adjusted its valuation allowance with regard to its U.S. deferred tax assets. For the years ended December 31, 2006 and 2005, the valuation allowance has decreased/(increased) by $21,914 and $(2,060), respectively. The Company will analyze and assess this valuation allowance again as of December 31, 2007. The Company has not provided a valuation allowance against its Canadian deferred tax assets, primarily comprised of tax basis goodwill, based on the level of projected future taxable income over the periods in which the deferred tax assets are deductible.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 5 — Property, Plant and Equipment
Details of property, plant and equipment are as follows:
 	 	 	 	 	
 	 	2006	 	2005	
Land	 	$	6,511	 	 	$	4,605	 	
Buildings	 	 	3,816	 	 	 	3,245	 	
Equipment	 	 	50,123	 	 	 	31,436	 	
Construction in progress	 	 	8,312	 	 	 	14,741	 	
  	 	 	68,762	 	 	 	54,027	 	
Less accumulated depreciation	 	 	17,845	 	 	 	11,274	 	
  	 	$	50,917	 	 	$	42,753	 	
Details of depreciation expense are as follows:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Cost of sales	 	$	6,553	 	 	$	3,847	 	 	$	2,606	 	
Selling, general and administrative	 	 	263	 	 	 	250	 	 	 	221	 	
  	 	$	6,816	 	 	$	4,097	 	 	$	2,827	 	
Note 6 — Long-Term Debt
 	 	 	 	 	
 	 	2006	 	2005	
Loans collateralized by certain assets having a net book value of $2,723 at December 31, 2006 and 2005 bearing interest at a weighted average fixed rate of 5.5% (2005 — 5%) maturing at various dates up to 2020	 	$	1,747	 	 	$	2,151	 	
Obligations under capital leases on equipment bearing interest at rates varying from 5% to 8% maturing at various dates to 2011	 	 	512	 	 	 	1,315	 	
  	 	 	2,259	 	 	 	3,466	 	
Less current maturities of long-term debt	 	 	652	 	 	 	1,195	 	
  	 	$	1,607	 	 	$	2,271	 	
As a wholly owned subsidiary of Philip, the Company is jointly and severably liable for debt obligations of its Parent.
Credit Agreement
On December 30, 2004, Philip and its subsidiaries, including the Company, entered into a credit agreement with UBS Securities LLC, as lead arranger, and three other financial institutions, of up to $120,000, which matures on December 30, 2009. The Company is a co-borrower under the credit agreement and has granted a security interest in substantially all of its assets to secure its obligations thereunder. The credit agreement provides for a revolving line of credit, subject to a borrowing base formula calculated on eligible accounts receivable and eligible scrap metal inventory. Borrowings under the credit agreement bear interest at a rate equal to the base rate (which is based on the UBS AG Bank “prime rate”) plus 1.00%, 1.25% or 1.50% depending on Philip’s total liquidity (greater than $50,000, $25,000 to $50,000 and less than $25,000, respectively). Total liquidity is generally defined in the credit agreement as the sum of the borrowing base availability (determined monthly) and the available cash. The credit agreement will generally be used for working capital purposes and to issue letters of credit to support financial assurance needs related to insurance, environmental, bonding and vendor programs. The letters of credit bear an annual fee of 2.0%. Philip
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 6 — Long-Term Debt  – (continued)
had undrawn capacity of $64,077 and $43,877 at December 31, 2006 and 2005, respectively, no borrowings outstanding and outstanding letters of credit of $55,674 and $74,391 at December 31, 2006 and 2005, respectively.
As of December 31, 2006 and 2005, Philip was required to maintain the following financial covenants under the credit agreement: (i) maximum leverage, which is consolidated indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”), ratio of 5 to 1, (ii) maximum senior leverage, which is consolidated indebtedness less all subordinated indebtedness to consolidated EBITDA, ratio of 3 to 1 and (iii) minimum fixed charge coverage, which is consolidated EBITDA to the sum of consolidated interest expense, capital expenditures, cash tax payments and principal payments, ratio of 1.1 to 1. Financial covenants are not tested if total liquidity is $25,000 or greater. At December 31, 2006 and 2005, Philip was in compliance with the covenants under the credit agreement.
The various components of long-term debt described in this note are financial instruments. As of December 31, 2006 and 2005, the carrying value of the Company’s debt approximated its fair market value.
At December 31, 2006, the aggregate amount of payments required to meet long-term debt installments including capital lease obligations, in each of the next five years and thereafter, is as follows:
 	 	 	
2007	 	$	652	 	
2008	 	 	394	 	
2009	 	 	272	 	
2010	 	 	115	 	
2011	 	 	113	 	
Thereafter	 	 	713	 	
  	 	$	2,259	 	
Note 7 — Accrued Liabilities
Accrued liabilities consist of the following:
 	 	 	 	 	
 	 	2006	 	2005	
Accrued employee compensation and benefit costs	 	$	4,460	 	 	$	2,924	 	
Accrued purchases	 	 	984	 	 	 	1,587	 	
Income taxes payable to parent	 	 	1,835	 	 	 	1,515	 	
Accrued closure, severance and restructuring costs	 	 	438	 	 	 	722	 	
Insurance claims outstanding	 	 	476	 	 	 	610	 	
Accrued other	 	 	317	 	 	 	510	 	
Accrued property and commodity taxes	 	 	137	 	 	 	153	 	
  	 	$	8,647	 	 	$	8,021	 	
The Company determines its insurance claims’ liabilities using actuarial principles on an undiscounted basis. The Company retains liability for (i) auto and general liability claims of up to $1,000 for each occurrence and (ii) certain property claims of up to $2,000 for each occurrence. Other than for Ohio, the Company retains liability for workers’ compensation claims of up to $1,000 for each occurrence. In Ohio, the Company is in the State Fund which is administered by the Bureau of Workers Compensation (the “Bureau”). The Bureau makes payments for all workers’ compensation benefits out of the premiums the Company pays into the State Fund.
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 7 — Accrued Liabilities  – (continued)
To the extent that any insurance carrier is unable to meet its obligations under existing insurance policies, the Company could be liable for the defaulted amount. From time to time, other retention/deductible amounts apply because claims arise under policies of subsidiary, acquired or predecessor companies.
Note 8 — Commitments
Future rental payments required under operating leases for premises and equipment are as follows:
 	 	 	
2007	 	$	3,783	 	
2008	 	 	3,446	 	
2009	 	 	3,243	 	
2010	 	 	2,813	 	
2011	 	 	2,521	 	
Thereafter	 	 	12,094	 	
  	 	$	27,900	 	
Rental expense amounted to $3,805, $3,603 and $3,758 for the years ended December 31, 2006, 2005 and 2004, respectively.
Note 9 — Contingencies
The Company is not currently a party to any material pending legal proceedings, other than routine matters incidental to its business, and no material developments have occurred in any such proceedings. The Company is unable to predict the outcome of the foregoing matters and cannot provide assurance that these or future matters will not have a material adverse effect on the results of operations or financial position of the Company.
The Company is subject to federal, state, local and foreign environmental laws and regulations concerning discharges to the air, soil, surface and subsurface waters and the generation, handling, storage, transportation, treatment and disposal of waste materials and hazardous substances. The Company is also subject to other federal, state, local and foreign laws and regulations including those that require the Company to remove or mitigate the effects of the disposal or release of certain materials at various sites.
It is impossible to predict precisely what effect these laws and regulations will have on the Company in the future. Compliance with environmental laws and regulations may result in, among other things, capital expenditures, costs and liabilities. Management believes, based on past experience and its best assessment of future events, that these environmental liabilities and costs will be assessed and paid over an extended period of time. The Company believes that it will be able to fund such costs in the ordinary course of business.
Certain of the Company’s facilities are environmentally impaired in part as a result of operating practices at the sites prior to their acquisition by the Company and as a result of Company operations. The Company has established procedures to periodically evaluate these sites, giving consideration to the nature and extent of the contamination. The Company has provided for the remediation of these sites based upon management’s judgment and prior experience. The Company has estimated the liability to remediate these sites to be $19,861 and $19,931 at December 31, 2006 and 2005, respectively.
The Company has been named as a potentially responsible or liable party under U.S. federal and state superfund laws in connection with various sites. It is alleged that the Company and its subsidiaries or their predecessors transported waste to the sites, disposed of waste at the sites, or operated the sites in question. The Company has reviewed the nature and extent of the allegations, the number, connection and financial ability of other named and unnamed potentially responsible parties and the nature and estimated cost of the likely remedy. Based on its review, the Company has accrued its estimate of its liability to remediate these
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 9 — Contingencies  – (continued)
sites to be $0 and $300 at December 31, 2006 and 2005, respectively. If it is determined that more expensive remediation approaches are required in the future, the Company could incur additional obligations, which could be material.
Estimates of the Company’s liability for remediation of a particular site and the method and ultimate cost of remediation require a number of assumptions and are inherently difficult to make, and the ultimate outcome may differ from current estimates. As additional information becomes available, estimates are adjusted. It is possible that technological, regulatory or enforcement developments, the results of environmental studies or other factors could alter estimates and necessitate the recording of additional liabilities, which could be material. Moreover, because the Company has disposed of waste materials at numerous third-party disposal facilities, it is possible that the Company will be identified as a potentially responsible party at additional sites. The impact of such future events cannot be estimated at the current time.
Note 10 — Common Stock
 	 	 	 	 	
 	 	2006	 	2005	
Share capital consists of:
	 	 	  	 	 	 	  	 	
Authorized: 100 shares of common stock, issued and outstanding:
	 	 	  	 	 	 	  	 	
Quantity	 	 	1	 	 	 	1	 	
Par value per share	 	$	1.00	 	 	$	1.00	 	
Note 11 — Consolidated Statements of Cash Flows
Changes in operating assets and liabilities are as follows:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Accounts receivable	 	$	13,180	 	 	$	(245	) 	 	$	(29,690	) 	
Inventories	 	 	(3,544	) 	 	 	(979	) 	 	 	(11,861	) 	
Prepaid expenses and other current assets	 	 	(1,316	) 	 	 	(419	) 	 	 	5,494	 	
Other assets	 	 	131	 	 	 	(262	) 	 	 	(2,578	) 	
Accounts payable	 	 	(403	) 	 	 	7,109	 	 	 	3,034	 	
Accrued liabilities	 	 	556	 	 	 	(5,484	) 	 	 	(4,490	) 	
  	 	$	8,604	 	 	$	(280	) 	 	$	(40,091	) 	
The supplemental cash flow disclosures are as follows:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Interest paid	 	$	160	 	 	$	250	 	 	$	321	 	
Income taxes paid, net of refunds	 	 	1,485	 	 	 	2,491	 	 	 	—	 	
Reorganization exit costs paid	 	 	—	 	 	 	—	 	 	 	2,556	 	
Non-cash capital contributions from Parent	 	$	—	 	 	$	—	 	 	$	21,580	 	
Note 12 — Employee Benefit Plans
401(k) Plan
The Company offers a 401(k) plan covering all U.S. employees, with the exception of the Columbus Hourly Union employees. The Company provides a matching contribution equal to 50% of the employee’s pre-tax contribution to a maximum of $3 per year. The Company’s contributions to the Columbus Hourly
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 12 — Employee Benefit Plans  – (continued)
Union’s 401(k) Plan are made in accordance with the Collective Bargaining Agreement. Total Company contributions to both plans for the years ended December 31, 2006, 2005 and 2004 was $577, $552 and $479, respectively.
Forfeitures of unvested Company contributions are used to reduce future Company matching contributions.
Pension Plans
The Company sponsors four defined benefit pension plans for hourly union employees. The four defined benefit pension plans have been frozen and there is no further accrual of benefits/service. The Company’s funding policy for the pension plans is to contribute amounts required to meet regulatory requirements.
The following table sets forth the pension costs for the years ended December 31, 2006, 2005 and 2004:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Service cost	 	$	37	 	 	$	94	 	 	$	200	 	
Interest cost	 	 	304	 	 	 	309	 	 	 	295	 	
Expected return on plan assets	 	 	(391	) 	 	 	(384	) 	 	 	(357	) 	
Amortization of net transition asset	 	 	—	 	 	 	—	 	 	 	(7	) 	
Amortization of net loss	 	 	55	 	 	 	49	 	 	 	42	 	
Net periodic benefit cost	 	$	5	 	 	$	68	 	 	$	173	 	
The components of the change in benefit obligation of the pension plans are as follows at December 31, 2006, 2005 and 2004:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Benefit obligation at beginning of year	 	$	5,759	 	 	$	5,416	 	 	$	4,838	 	
Service cost	 	 	37	 	 	 	94	 	 	 	200	 	
Interest cost	 	 	304	 	 	 	309	 	 	 	295	 	
Actuarial loss	 	 	436	 	 	 	215	 	 	 	385	 	
Benefits paid	 	 	(284	) 	 	 	(275	) 	 	 	(302	) 	
Benefit obligation at end of year	 	$	6,252	 	 	$	5,759	 	 	$	5,416	 	
The reconciliation of the beginning and ending balances of the fair value of the assets of the pension plans are as follows at December 31, 2006, 2005 and 2004:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Fair value of plan assets at beginning of year	 	$	4,989	 	 	$	4,920	 	 	$	4,588	 	
Actual return on plan assets	 	 	665	 	 	 	294	 	 	 	467	 	
Employer contributions	 	 	59	 	 	 	50	 	 	 	167	 	
Benefits paid	 	 	(284	) 	 	 	(275	) 	 	 	(302	) 	
Fair value of plan assets at end of year	 	$	5,429	 	 	$	4,989	 	 	$	4,920	 	
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 12 — Employee Benefit Plans  – (continued)
The funded status of the pension plans are as follows at December 31, 2006, 2005 and 2004:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Funded status	 	$	(823	) 	 	$	(770	) 	 	$	(496	) 	
Unrecognized net loss	 	 	1,723	 	 	 	1,616	 	 	 	1,360	 	
Net amount recognized	 	$	900	 	 	$	846	 	 	$	864	 	
Amounts recognized in the Consolidated Balance Sheets consist of the following at December 31, 2006 and 2005, respectively:
 	 	 	 	 	
 	 	2006	 	2005	
Prepaid benefit cost	 	$	352	 	 	$	—	 	
Accrued benefit liability	 	 	(823	) 	 	 	(770	) 	
Accumulated other comprehensive income	 	 	1,371	 	 	 	1,616	 	
Net amount recognized	 	$	900	 	 	$	846	 	
Weighted average assumptions used in the pension plans to determine benefit obligations and net periodic benefit cost are as follows at December 31:
 	 	 	 	 	 	 	
 	 	2006	 	2005	 	2004	
Discount rate	 	 	5.50	% 	 	 	5.75	% 	 	 	6.25	% 	
Expected return on plan assets	 	 	8.00	% 	 	 	8.00	% 	 	 	8.00	% 	
The expected rate of return on plan assets assumption is based upon actual historical returns, future expectations for returns for each asset class and the effect of periodic target asset allocation rebalancing. These expected results were adjusted for the payment of reasonable expenses of the plan from plan assets.
The Company made cash contributions of $59, $50 and $167 in 2006, 2005 and 2004, respectively, to its pension plans. Based on estimates provided by its actuaries, the Company expects to make cash-funding contributions to its pension plans of approximately $40 during 2007.
The weighted-average asset allocation of the pension plan assets by asset category and target range are as follows:
Percentage of Plan Assets at December 31, 2006 and 2005:
 	 	 	 	 	
 	 	2006	 	2005	
Equity securities	 	 	68	% 	 	 	66	% 	
Debt securities	 	 	32	% 	 	 	34	% 	
Total	 	 	100	% 	 	 	100	% 	
The Company’s pension plan assets are managed by outside investment managers. The Company’s investment strategy with respect to pension plan assets is to maximize returns while preserving principal.
Note 13 — Related Parties
During the first two months of 2005, Philip’s largest stockholder, Carl C. Icahn, participated in Philip’s payment-in-kind debt facilities through entities he controlled. During 2004 Mr. Icahn also participated in the term debt facilities. Philip repaid in full the $150,000 term loan provided by Mr. Icahn during 2004. Mr. Icahn controlled $0 and approximately $14,316 of Philip’s debt as of December 31, 2005 and 2004, respectively,
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PSC METALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
(Amounts in Thousands Except Share Amounts)
Note 13 — Related Parties  – (continued)
and was associated with approximately $56 and $8,570 in interest expense and fees for the years ended December 31, 2005 and 2004, respectively.
Philip has entered into a Tax Allocation Agreement (the “Agreement”) with Starfire. The Agreement provides that Starfire will pay all consolidated federal income taxes on behalf of the consolidated group which includes Philip. Philip will make payments to Starfire in an amount equal to the tax liability, if any, that it would have if it were to file as a consolidated group separate and apart from Starfire.
The Company uses XO Communications, Inc. to provide the majority of its telecommunications services and incurred $352, $353 and $148 for the years ended December 31, 2006, 2005 and 2004, respectively. Mr. Icahn owns a majority interest in XO Communications, Inc.
The Company sold material to Alliance Castings of approximately $11,025, $9,105 and $6,792 for the years ending December 31, 2006, 2005 and 2004, respectively. Material sold to Chicago Castings was approximately $557, $2,308 and $3 for the years ended December 31, 2006, 2005 and 2004, respectively. Mr. Icahn is a major shareholder of each of the companies.
Included in selling, general and administrative costs is approximately $106, $100 and $1,500 paid to Philip for certain services provided to the Company for the years ended December 31, 2006, 2005 and 2004, respectively.
Note 14 — Subsequent Events
On February 26, 2007, the Company acquired substantially all the assets of Ravenna Salvage, Inc., a full service scrap metal recycler in Ohio. The purchase price of $5,628 and the results of operations for the two yards acquired are reflected in the consolidated results of the Company from the date of acquisition.
On June 20, 2007, the Company acquired substantially all the assets of Midwest Sales, LLC, a full service scrap metal recycler in Missouri. The purchase price of $1,307 and the results of operations for the two yards acquired are reflected in the consolidated results of the Company from the date of acquisition.
On September 10, 2007, the Company acquired substantially all the assets of Wimco Operating Company, Inc., a full service scrap metal recycler in Ohio. The purchase price of $39,960 and the results of operations for these five yards and trucking fleet are reflected in the consolidated results of the Company from the date of acquisition.
On November 5, 2007, Icahn Enterprises, through a direct wholly owned subsidiary, purchased 100% of the issued and outstanding capital stock of the Company in exchange for approximately $335,000 in cash and the Company became an indirect wholly owned subsidiary of Icahn Enterprises. Philip used a portion of the proceeds to pay the Company’s portion of the joint credit agreement, approximately $34,600, and the Company was released from all claims, guarantees and future obligations under the credit agreement. In addition, Philip used proceeds to collateralize the Company’s letters of credit of approximately $6,300.
The Company is currently under negotiations to enter into a $100,000 asset-based borrowing agreement. Subsequent to the closing of the borrowing agreement, the Company will fund its letters of credit from its borrowing base and funds used to collateralize the letters of credit by Philip will be released.
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PSC METALS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
 	 	 	 	 	
 	 	September 30,
2007	 	December 31,
2006	
  	 	(Unaudited)	 	  	
ASSETS
	 	 	  	 	 	 	  	 	
CURRENT ASSETS
	 	 	  	 	 	 	  	 	
Cash and cash equivalents	 	$	3,302	 	 	$	22,332	 	
Marketable securities	 	 	6,855	 	 	 	5,543	 	
Accounts receivable (net of allowance for doubtful accounts of $1,431 and $593 at September 30, 2007 and December 31, 2006, respectively)	 	 	94,911	 	 	 	55,308	 	
Accounts receivable from related parties	 	 	622	 	 	 	555	 	
Inventories	 	 	68,655	 	 	 	58,438	 	
Prepaid expenses and other current assets	 	 	5,906	 	 	 	6,412	 	
Deferred income taxes	 	 	3,970	 	 	 	3,304	 	
Total current assets	 	 	184,221	 	 	 	151,892	 	
PROPERTY, PLANT AND EQUIPMENT, NET	 	 	78,365	 	 	 	50,917	 	
GOODWILL	 	 	14,908	 	 	 	—	 	
DEFERRED INCOME TAXES NONCURRENT	 	 	17,037	 	 	 	14,178	 	
OTHER ASSETS	 	 	8,240	 	 	 	3,080	 	
TOTAL ASSETS	 	$	302,771	 	 	$	220,067	 	
LIABILITIES AND STOCKHOLDER'S EQUITY
	 	 	  	 	 	 	  	 	
CURRENT LIABILITIES
	 	 	  	 	 	 	  	 	
Current maturities of long-term debt and capital lease obligations	 	$	35,114	 	 	$	652	 	
Accounts payable	 	 	32,466	 	 	 	23,769	 	
Accounts payable to related party	 	 	274	 	 	 	352	 	
Accrued liabilities	 	 	12,071	 	 	 	8,647	 	
Total current liabilities	 	 	79,925	 	 	 	33,420	 	
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
LESS CURRENT PORTION	 	 	1,934	 	 	 	1,607	 	
ACCRUED ENVIRONMENTAL COSTS	 	 	24,012	 	 	 	19,861	 	
ACCRUED OTHER LIABILITIES	 	 	1,340	 	 	 	—	 	
COMMITMENTS AND CONTINGENCIES (Note 9)	 	 	—	 	 	 	—	 	
STOCKHOLDER'S EQUITY
	 	 	  	 	 	 	  	 	
Common stock	 	 	—	 	 	 	—	 	
Additional paid-in capital	 	 	132,022	 	 	 	131,482	 	
Retained earnings	 	 	55,927	 	 	 	30,138	 	
Accumulated other comprehensive income	 	 	7,611	 	 	 	3,559	 	
Total stockholder's equity	 	 	195,560	 	 	 	165,179	 	
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	 	$	302,771	 	 	$	220,067	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended September 30, 2007 and 2006
(In Thousands)
 	 	 	 	 	
 	 	Three Months Ended
September 30,	
  	 	2007	 	2006	
Revenues	 	$	198,903	 	 	$	179,173	 	
Cost of sales	 	 	184,368	 	 	 	168,412	 	
Gross profit	 	 	14,535	 	 	 	10,761	 	
Selling, general and administrative	 	 	5,446	 	 	 	2,412	 	
Operating income	 	 	9,089	 	 	 	8,349	 	
Interest expense	 	 	(214	) 	 	 	(37	) 	
Interest and other income	 	 	147	 	 	 	437	 	
Income before income taxes	 	 	9,022	 	 	 	8,749	 	
Income tax benefit (expense)	 	 	(180	) 	 	 	520	 	
NET INCOME	 	$	8,842	 	 	$	9,269	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Nine Months Ended September 30, 2007 and 2006
(In Thousands)
 	 	 	 	 	
 	 	Nine Months Ended
September 30,	
  	 	2007	 	2006	
Revenues	 	$	622,282	 	 	$	556,143	 	
Cost of sales	 	 	578,274	 	 	 	509,743	 	
Gross profit	 	 	44,008	 	 	 	46,400	 	
Selling, general and administrative	 	 	15,979	 	 	 	11,617	 	
Operating income	 	 	28,029	 	 	 	34,783	 	
Interest expense	 	 	(532	) 	 	 	(126	) 	
Interest and other income	 	 	172	 	 	 	718	 	
Income before income taxes	 	 	27,669	 	 	 	35,375	 	
Income tax benefit (expense)	 	 	(540	) 	 	 	2,101	 	
NET INCOME	 	$	27,129	 	 	$	37,476	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY AND
OTHER COMPREHENSIVE INCOME
(Unaudited)
For the Nine Months Ended September 30, 2007
(In Thousands)
 	 	 	 	 	 	 	 	 	 	 	
 	 	Common
Stock	 	Additional
Paid-in
Capital	 	Retained
Earnings	 	Accumulated
Other
Comprehensive
Income	 	Total
Stockholder's
Equity	
Balance at December 31, 2006	 	$	—	 	 	$	131,482	 	 	$	30,138	 	 	$	3,559	 	 	$	165,179	 	
Cumulative effect of adjustment from adoption of FIN 48	 	 	—	 	 	 	—	 	 	 	(1,340	) 	 	 	—	 	 	 	(1,340	) 	
Comprehensive income:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Net income	 	 	—	 	 	 	—	 	 	 	27,129	 	 	 	—	 	 	 	27,129	 	
Foreign currency translation
adjustments	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,199	 	 	 	3,199	 	
Unrealized gain on available for sale securities, net of tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	853	 	 	 	853	 	
Total comprehensive income	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	31,181	 	
Capital contribution	 	 	—	 	 	 	540	 	 	 	—	 	 	 	—	 	 	 	540	 	
Balance at September 30, 2007	 	$	—	 	 	$	132,022	 	 	$	55,927	 	 	$	7,611	 	 	$	195,560	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended September 30, 2007 and 2006
(In Thousands)
 	 	 	 	 	
 	 	Nine Months Ended
September 30,	
  	 	2007	 	2006	
CASH FLOWS FROM OPERATING ACTIVITIES
	 	 	  	 	 	 	  	 	
Net income	 	$	27,129	 	 	$	37,476	 	
Adjustments to reconcile net income to net cash provided by operating activities:
	 	 	  	 	 	 	  	 	
Depreciation	 	 	7,275	 	 	 	5,037	 	
Amortization	 	 	360	 	 	 	—	 	
Deferred income taxes	 	 	(3,526	) 	 	 	(4,263	) 	
Gain on sale of assets	 	 	(514	) 	 	 	(355	) 	
Cash flow before changes in assets and liabilites	 	 	30,724	 	 	 	37,895	 	
Changes in operating assets and liabilities	 	 	(22,111	) 	 	 	(9,545	) 	
Net cash provided by operating activities	 	 	8,613	 	 	 	28,350	 	
CASH FLOWS FROM INVESTING ACTIVITIES
	 	 	  	 	 	 	  	 	
Purchase of property, plant and equipment, net	 	 	(19,879	) 	 	 	(18,820	) 	
Proceeds from sale of property, plant and equipment	 	 	177	 	 	 	425	 	
Acquisitions	 	 	(46,886	) 	 	 	—	 	
Receipts on long-term notes receivable	 	 	358	 	 	 	—	 	
Net cash used in investing activities	 	 	(66,230	) 	 	 	(18,395	) 	
CASH FLOWS FROM FINANCING ACTIVITIES
	 	 	  	 	 	 	  	 	
Principal borrowing on debt	 	 	62,411	 	 	 	9	 	
Principal payments on debt	 	 	(27,402	) 	 	 	(406	) 	
Principal payments of capital lease obligations	 	 	(221	) 	 	 	(594	) 	
Dividend payment	 	 	—	 	 	 	(10,000	) 	
Capital contribution	 	 	540	 	 	 	—	 	
Other	 	 	60	 	 	 	—	 	
Net cash provided by (used in) financing activities	 	 	35,388	 	 	 	(10,991	) 	
Effect of exchange rate changes on cash	 	 	3,199	 	 	 	896	 	
NET DECREASE IN CASH AND CASH
EQUIVALENTS	 	 	(19,030	) 	 	 	(140	) 	
Cash and cash equivalents at beginning of period	 	 	22,332	 	 	 	12,949	 	
Cash and cash equivalents at end of period	 	$	3,302	 	 	$	12,809	 	

The accompanying notes to consolidated financial statements are an integral part of these statements.
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 1 — Organization and Basis of Presentation
Business
PSC Metals, Inc. (the “Company”), an Ohio corporation, and its wholly owned subsidiaries Cappco Tubular Products Canada, Inc., Cappco Tubular Products USA, Inc. (collectively “Cappco”), PSC Metals-Akron, Inc., PSC Metals-Alliance, LLC, PSC Metals-Aliquippa, LLC, PSC Metals-CAW, LLC, PSC Metals-Elyria, LLC, PSC Metals-Garn, LLC, PSC Metals-Joyce, LLC, PSC Metals-Metalics, LLC, and PSC Metals-Wooster, LLC, are principally engaged in the business of collecting and processing ferrous and non-ferrous metals. As of September 30, 2007, the Company is a wholly owned subsidiary of Philip Services Corporation (“Philip”), a Delaware corporation that is principally engaged in providing industrial outsourcing and environmental services to major industry sectors throughout North America. As discussed in Note 14, “Subsequent Events,” on November 5, 2007, Icahn Enterprises, through a direct wholly owned subsidiary, acquired all of the issued and outstanding capital stock of the Company for $335,000 in cash.
The Company collects industrial scrap metal and obsolete scrap metal, processes it into reusable forms, and supplies the recycled metals to its customers including electric-arc furnace mills, integrated steel mills, foundries, secondary smelters and metals brokers. These services are provided through the Company’s recycling facilities located in eight states. The Company’s ferrous products include primarily shredded, sheared, bundled scrap metal and other purchased scrap metal such as turnings and cast and broken furnace iron. The Company also processes non-ferrous metals including aluminum, copper, brass, stainless steel and other nickel-bearing metals.
Cappco is in the secondary steel pipe business and has multiple stocking locations throughout Canada and the United States. Cappco distributes secondary and structural grade pipe to industries that include casing, fiber optics, tunneling, foundation piling, road-boring and fabrication.
Basis of Presentation
In June 2003, Philip and substantially all of its U.S. domiciled subsidiaries, including the Company, filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On December 10, 2003, the Bankruptcy Court confirmed the Second Amended and Restated Joint Plan of Reorganization (the “Plan”). Under the terms of the Plan, Philip became wholly owned by entities owned by Mr. Carl C. Icahn. As a result, the accompanying consolidated financial statements reflect the historical push-down basis of the assets and liabilities as if the Company had been acquired by entities owned by Mr. Icahn on December 31, 2003, the effective date of control.
The accompanying unaudited consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the entire year. Our balance sheet at December 31, 2006 is derived from the December 31, 2006 audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements included herein should be read in conjunction with the financial statements and notes for the years ended December 31, 2006, 2005 and 2004.
The Company has not changed its significant accounting and reporting policies from those disclosed in the Company's financial statements and notes for the year ended December 31, 2006, with the exception of
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 1 — Organization and Basis of Presentation  – (continued)
the adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes  (“FIN 48”). Refer to Note 5, “Income Taxes,” for the impact of the adoption of this interpretation. There have been no significant changes in the methods or assumptions used in accounting policies requiring material estimates and assumptions.
The consolidated financial statements of the Company have been prepared in U.S. dollars using U.S. GAAP.
Note 2 — Significant Accounting Policies
Principles of Consolidation
These consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany balances, transactions and profits have been eliminated in consolidation.
Inventories
Details of inventory are as follows:
 	 	 	 	 	
 	 	September 30, 2007	 	December 31, 2006	
Ferrous	 	$	36,278	 	 	$	30,360	 	
Non-ferrous	 	 	9,741	 	 	 	7,871	 	
Secondary	 	 	22,636	 	 	 	20,207	 	
  	 	$	68,655	 	 	$	58,438	 	
Impact of New Accounting Pronouncements
In September 2006, the FASB issued FASB Statement (“SFAS”) No. 157, Fair Value Measurements (“SFAS No. 157”). This statement defines “fair value,” establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of its adoption of SFAS No. 157.
In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132  (“SFAS No. 158”). SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The Company is required to adopt SFAS No. 158 as of December 31, 2007. The Company is evaluating the effect the adoption, of this statement, will have on its consolidated financial position or results of operations.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115  (“SFAS No. 159”). The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs) and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 is not expected to be material to our financial statements.
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 2 — Significant Accounting Policies  – (continued)
The Company adopted FIN 48 on January 1, 2007; see Note 5 — Income Taxes.
Financial Instruments
The Company’s accounts receivable, accounts payable and long-term debt constitute financial instruments. The fair value of the Company’s long-term debt is discussed in Note 7 to the Consolidated Financial Statements. The Company’s accounts receivable and accounts payable approximated their fair value for the periods ended at September 30, 2006 and December 31, 2006. Concentration of credit risk in accounts receivable is limited, due to the large number of customers the Company services throughout North America. One customer represented 10% and 13% of accounts receivable at September 30, 2007 and December 31, 2006, respectively. No one customer accounted for more than 10% of sales for both the three and nine months ended September 30, 2007 and 2006.
Note 3 — Acquisitions
On February 26, 2007, the Company acquired substantially all the assets of Ravenna Salvage, Inc., a full service scrap metal recycler in Ohio. The purchase price of $5,628 and the results of operations for the two yards acquired are reflected in the consolidated results of the Company from the date of acquisition.
On June 20, 2007, the Company acquired substantially all the assets of Midwest Sales, LLC, a full service scrap metal recycler in Missouri. The purchase price of $1,307 and the results of operations for the two yards acquired are reflected in the consolidated results of the Company from the date of acquisition.
On September 10, 2007, the Company acquired substantially all the assets of Wimco Operating Company, Inc., a full service scrap metal recycler in Ohio. The purchase price of $39,960 and the results of operations for these five yards and trucking fleet are reflected in the consolidated results of the Company from the date of acquisition.
The following is a summary of the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition:
 	 	 	 	 	 	 	
 	 	Ravenna	 	Midwest	 	Wimco	
Net working capital	 	$	693	 	 	$	300	 	 	$	14,705	 	
Property, plant and equipment	 	 	3,935	 	 	 	595	 	 	 	9,879	 	
Intangibles	 	 	1,000	 	 	 	—	 	 	 	5,000	 	
Goodwill	 	 	—	 	 	 	412	 	 	 	14,496	 	
Environmental reserve	 	 	—	 	 	 	—	 	 	 	(4,120	) 	
 
	 	$	5,628	 	 	$	1,307	 	 	$	39,960	 	
Goodwill of $14,908 represents the excess of purchase price over the fair value of the net tangible and identified intangible assets acquired. $10,788 of the goodwill is deductible for tax purposes over a 15-year period and $4,120 is deductible for tax purposes in the period environmental reserve payments are made. In accordance with SFAS No. 142, goodwill is allocated to a reporting unit level and tested for impairment at least annually.
Note 4 — Marketable Securities
Marketable securities consist of shares of common stock of Keystone Consolidated Industries, Inc. (“Keystone”), acquired in bankruptcy settlement, and held for resale. In 2006, the Company determined the value of Keystone common stock it received from the emergence of the bankruptcy protection. As such,
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 4 — Marketable Securities  – (continued)
590,033 shares of common stock at a valuation of $1,180 were recorded as marketable securities, available-for-sale. Also, during 2006, the Company sold 220,500 shares for $3,626 recording a gain on sale of $3,185.
As of September 30, 2007, the marketable securities consist of 369,533 shares of Keystone common stock. Any unrealized gains or losses with respect to investments classified as available-for-sale are recognized within the Consolidated Statement of Shareholder’s Equity as accumulated other comprehensive income, net of deferred taxes. At September 30, 2007, the fair value of the securities was an asset of $6,855 and the Company recorded a gross unrealized gain of $1,312 (including the tax effect of $459) for the nine months ended September 30, 2007.
Note 5 — Income Taxes
The Company accounts for income taxes under SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”). Under SFAS No. 109, the Company provides deferred income taxes for the tax effects of temporary differences between the financial reporting and income tax basis of the Company’s assets and liabilities.
As of December 31, 2006, the Company had federal net operating loss carryforwards in the United States of approximately $100.
The Company is a part of an affiliated group of corporations controlled by Carl C. Icahn and filed as part of a consolidated federal income tax return for the years ended December 31, 2006, 2005 and 2004. The ultimate parent entity of Philip and the affiliated group of corporations controlled by Mr. Icahn is Starfire Holding Corporation (“Starfire”). The tax provision was prepared on a separate company basis as if the company filed a stand-alone tax return.
For the year ending December 31, 2007, the Company anticipates the effective tax rate on continuing operations to be approximately 41.05%, and the Company anticipates the release of the valuation allowance based on the projected pretax income for 2008 and 2007, respectively.
In June 2006, the FASB issued FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and provides guidance on the recognition, de-recognition, and measurement of benefits related to an entity’s uncertain tax positions. FIN 48 is effective for the Company beginning January 1, 2007. At the adoption date of January 1, 2007, the Company had $1,340 of unrecognized tax uncertainties including $77 of interest and penalties, of which $1,340 would affect the Company’s effective tax rate if recognized. During the nine month period ended September 30, 2007, the Company recognized no additional unrecognized tax uncertainties, interest or penalties. As of September 30, 2007, there were no unrecognized tax uncertainties that are expected to significantly increase or decrease within the next 12 months.
Note 6 — Depreciation Expense
Details of depreciation expense are as follows:
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
  	 	2007	 	2006	 	2007	 	2006	
Cost of sales	 	$	3,264	 	 	$	2,730	 	 	$	7,079	 	 	$	4,630	 	
Selling, general and administration	 	 	65	 	 	 	67	 	 	 	196	 	 	 	407	 	
  	 	$	3,329	 	 	$	2,797	 	 	$	7,275	 	 	$	5,037	 	
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 7 — Long-Term Debt
 	 	 	 	 	
 	 	September 30, 2007	 	December 31, 2006	
Loans collateralized by certain assets having a net book value
of $2,723 bearing interest at a weighted average fixed rate of 8.6% (2006 — 5.5%) maturing at various dates up to 2020	 	$	36,756	 	 	$	1,747	 	
Obligations under capital leases on equipment bearing interest
at rates varying from 5% to 8% maturing at various dates
to 2011	 	 	292	 	 	 	512	 	
  	 	 	37,048	 	 	 	2,259	 	
Less current maturities of long-term debt	 	 	35,114	 	 	 	652	 	
  	 	$	1,934	 	 	$	1,607	 	
As a wholly owned subsidiary of Philip, the Company is jointly and severably liable for debt obligations of its Parent.
Credit Agreement
On December 30, 2004, Philip and its subsidiaries, including the Company, entered into a credit agreement with UBS Securities LLC, as lead arranger, and three other financial institutions, of up to $120,000, which matures on December 30, 2009. The Company is a co-borrower under the credit agreement and has granted a security interest in substantially all of its assets to secure its obligations, thereunder. The credit agreement provides for a revolving line of credit, subject to a borrowing base formula calculated on eligible accounts receivable and eligible scrap metal inventory. Borrowings under the credit agreement bear interest at a rate equal to the base rate (which is based on the UBS AG Bank “prime rate”) plus 1.00%, 1.25% or 1.50% depending on Philip’s total liquidity (greater than $50,000, $25,000 to $50,000 and less than $25,000, respectively). Total liquidity is generally defined in the credit agreement as the sum of the borrowing base availability (determined monthly) and the available cash. The credit agreement will generally be used to issue letters of credit to support financial assurance needs related to insurance, environmental, bonding and vendor programs. The letters of credit bear an annual fee of 2.0%. Philip had undrawn capacity of $23,416 and $64,077 at September 30, 2007 and December 31, 2006, respectively, no borrowings outstanding and outstanding letters of credit of $61,984 and $55,674 at September 30, 2007 and December 31, 2006, respectively.
As of September 30, 2007 and December 31, 2006, Philip was required to maintain the following financial covenants under the credit agreement: (i) maximum leverage, which is consolidated indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”), ratio of 5 to 1, (ii) maximum senior leverage, which is consolidated indebtedness less all subordinated indebtedness to consolidated EBITDA, ratio of 3 to 1 and (iii) minimum fixed charge coverage, which is consolidated EBITDA to the sum of consolidated interest expense, capital expenditures, cash tax payments and principal payments, ratio of 1.1 to 1. Financial covenants are not tested if total liquidity is $25 million or greater. At September 30, 2007 and December 31, 2006, Philip was in compliance with the covenants under the credit agreement.
The various components of long-term debt described in this note are financial instruments. As of September 30, 2007 and December 31, 2006, the carrying value of the Company’s debt approximated its fair market value.
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 8 — Accrued Liabilities
Accrued liabilities consist of the following:
 	 	 	 	 	
 	 	September 30, 2007	 	December 31, 2006	
Accrued employee compensation and benefit costs	 	$	5,471	 	 	$	4,460	 	
Accrued purchases	 	 	1,062	 	 	 	984	 	
Income taxes payable to parent	 	 	3,042	 	 	 	1,835	 	
Accrued closure, severance and restructuring costs	 	 	486	 	 	 	438	 	
Insurance claims outstanding	 	 	888	 	 	 	476	 	
Accrued other	 	 	259	 	 	 	317	 	
Accrued property and commodity taxes	 	 	863	 	 	 	137	 	
  	 	$	12,071	 	 	$	8,647	 	
The Company determines its insurance claims’ liabilities using actuarial principles on an undiscounted basis. The Company retains liability for (i) auto and general liability claims of up to $1,000 for each occurrence and (ii) certain property claims of up to $2,000 for each occurrence. Other than for Ohio, the Company retains liability for workers’ compensation claims of up to $1,000 for each occurrence. In Ohio, the Company is in the State Fund which is administered by the Bureau of Workers Compensation (the “Bureau”). The Bureau makes payments for all workers’ compensation benefits out of the premiums the Company pays into the State Fund.
To the extent that any insurance carrier is unable to meet its obligations under existing insurance policies, the Company could be liable for the defaulted amount. From time to time, other retention/deductible amounts apply because claims arise under policies of subsidiary, acquired or predecessor companies.
Note 9 — Contingencies
The Company is not currently a party to any material pending legal proceedings, other than routine matters incidental to its business, and no material developments have occurred in any such proceedings. The Company is unable to predict the outcome of the foregoing matters and cannot provide assurance that these or future matters will not have a material adverse effect on the results of operations or financial position of the Company.
The Company is subject to federal, state, local and foreign environmental laws and regulations concerning discharges to the air, soil, surface and subsurface waters and the generation, handling, storage, transportation, treatment and disposal of waste materials and hazardous substances. The Company is also subject to other federal, state, local and foreign laws and regulations including those that require the Company to remove or mitigate the effects of the disposal or release of certain materials at various sites.
It is impossible to predict precisely what effect these laws and regulations will have on the Company in the future. Compliance with environmental laws and regulations may result in, among other things, capital expenditures, costs and liabilities. Management believes, based on past experience and its best assessment of future events, that these environmental liabilities and costs will be assessed and paid over an extended period of time. The Company believes that it will be able to fund such costs in the ordinary course of business.
Certain of the Company’s facilities are environmentally impaired in part as a result of operating practices at the sites prior to their acquisition by the Company and as a result of Company operations. The Company has established procedures to periodically evaluate these sites, giving consideration to the nature and extent of the contamination. The Company has provided for the remediation of these sites based upon management’s
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 9 — Contingencies  – (continued)
judgment and prior experience. The Company has estimated the liability to remediate these sites to be $24,012 and $19,861 at September 30, 2007 and December 31, 2006, respectively.
The Company has been named as a potentially responsible or liable party under U.S. federal and state superfund laws in connection with various sites. It is alleged that the Company and its subsidiaries or their predecessors transported waste to the sites, disposed of waste at the sites, or operated the sites in question. The Company has reviewed the nature and extent of the allegations, the number, connection and financial ability of other named and unnamed potentially responsible parties and the nature and estimated cost of the likely remedy. Based on its review, the Company has accrued its estimate of its liability to remediate these sites to be $0 at September 30, 2007 and December 31, 2006. If it is determined that more expensive remediation approaches are required in the future, the Company could incur additional obligations, which could be material.
Estimates of the Company’s liability for remediation of a particular site and the method and ultimate cost of remediation require a number of assumptions and are inherently difficult to make, and the ultimate outcome may differ from current estimates. As additional information becomes available, estimates are adjusted. It is possible that technological, regulatory or enforcement developments, the results of environmental studies or other factors could alter estimates and necessitate the recording of additional liabilities, which could be material. Moreover, because the Company has disposed of waste materials at numerous third-party disposal facilities, it is possible that the Company will be identified as a potentially responsible party at additional sites. The impact of such future events cannot be estimated at the current time.
Note 10 — Common Stock
 	 	 	 	 	
 	 	September 30, 2007	 	December 31, 2006	
Share capital consists of:
	 	 	  	 	 	 	  	 	
Authorized: 100 shares of common stock, issued and outstanding:
	 	 	  	 	 	 	  	 	
Quantity	 	 	1	 	 	 	1	 	
Par value per share	 	$	1.00	 	 	$	1.00	 	
Note 11 — Consolidated Statement of Cash Flows
Changes in assets and liabilities are as follows:
 	 	 	 	 	
 	 	September 30, 2007	 	September 30, 2006	
Accounts receivable	 	$	(29,191	) 	 	$	(7,453	) 	
Inventories	 	 	(3,976	) 	 	 	(973	) 	
Prepaid and other current assets	 	 	1,207	 	 	 	(284	) 	
Other assets	 	 	7,056	 	 	 	(906	) 	
Accounts payable	 	 	2,287	 	 	 	(1,774	) 	
Accrued liabilities	 	 	506	 	 	 	1,845	 	
  	 	$	(22,111	) 	 	$	(9,545	) 	
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 11 — Consolidated Statement of Cash Flows  – (continued)
The supplemental cash flow disclosures are as follows:
 	 	 	 	 	
 	 	September 30, 2007	 	September 30, 2006	
Interest paid	 	$	531	 	 	$	126	 	
Income taxes paid, net of refunds	 	$	1,638	 	 	$	212	 	
Note 12 — Employee Benefit Plans
401(k) plan
The Company offers a 401(k) plan covering all U.S. employees, with the exception of the Columbus Hourly Union employees. The Company provides a matching contribution equal to 50% of the employee’s pre-tax contribution to a maximum of $3 per year. The Company’s contributions to the Columbus Hourly Union’s 401(k) Plan are made in accordance with the Collective Bargaining Agreement. Total Company contributions to both plans for the periods ended September 30, 2007 and 2006 were $587 and $577, respectively.
Forfeitures of unvested Company contributions are used to reduce future Company matching contributions.
Pension Plans
The Company made cash contributions for the periods ended September 30, 2007 and 2006 of $21 and $59, respectively. Based on estimates provided by its actuaries, the Company expects to make cash funding contributions to its pension plans of approximately $40 during 2007.
Note 13 — Related Parties
During the first two months of 2005, Philip’s largest stockholder, Carl C. Icahn, participated in Philip’s payment-in-kind facilities through entities he controlled. During 2004 Mr. Icahn also participated in the term debt facilities. Philip repaid in full the $150,000 term loan provided by Mr. Icahn during 2004. Mr. Icahn controlled $0 and approximately $14,316 of Philip’s debt as of December 31, 2005 and 2004, respectively, and was associated with approximately $56 and $8,570 in interest expense and fees for the years ended December 31, 2005 and 2004, respectively.
Philip has entered into a Tax Allocation Agreement (the “Agreement”) with Starfire. The Agreement provides that Starfire will pay all consolidated federal income taxes on behalf of the consolidated group which includes Philip. Philip will make payments to Starfire in an amount equal to the tax liability, if any, that it would have if it was to file as a consolidated group separate and apart from Starfire.
The Company uses XO Communications, Inc. to provide the majority of its telecommunications services and incurred $281 and $352 for the periods ended September 30, 2007 and 2006, respectively. Mr. Icahn owns a majority interest in XO Communications, Inc.
The Company sold material to Alliance Castings of approximately $11,025 and $9,105 for the periods ended September 30, 2007 and 2006, respectively. Mr. Icahn is a major shareholder of this company.
Included in selling, general and administrative costs are $27 and $27 for the three months ended September 30, 2007 and 2006, respectively, and $81 and $79 for the nine months ended September 30, 2007 and 2006, respectively, paid to Philip for certain services provided to the Company.
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PSC METALS, INC.
  
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
(Amounts in Thousands Except Share Price)
Note 14 — Subsequent Events
On November 5, 2007, Icahn Enterprises, through a direct wholly owned subsidiary, purchased 100% of the issued and outstanding capital stock of the Company in exchange for approximately $335,000 in cash and the Company became an indirect wholly owned subsidiary of Icahn Enterprises. Philip used a portion of the proceeds to pay the Company’s portion of the joint credit agreement, approximately $34,600, and the Company was released from all claims, guarantees and future obligations under the credit agreement. In addition, Philip used proceeds to collateralize the Company’s letters of credit of approximately $6,300.
The Company is currently under negotiations to enter into a $100,000 asset-based borrowing agreement. Subsequent to the closing of the borrowing agreement, the Company will fund its letters of credit from its borrowing base and funds used to collateralize the letters of credit by Philip will be released.
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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information is presented to give effect to:
 	•	the acquisition on November 5, 2007 of all of the issued and outstanding stock of PSC Metals, Inc. (“PSC Metals”); and	
 	•	the pending sale of American Casino & Entertainment Properties LLC (“ACEP”), an indirect wholly owned subsidiary of Icahn Enterprises L.P (“Icahn Enterprises”), formerly known as American Real Estate Partners, L.P.	
The unaudited pro forma condensed combined financial information is based on the (i) historical financial statements of Icahn Enterprises, (ii) historical consolidated financial statements of PSC Metals, which financial statements are included elsewhere in this current report on Form 8-K and (iii) historical financial statements of ACEP, as well as in each case the assumptions and adjustments described below and in the accompanying notes to the unaudited pro forma condensed combined financial information.
The acquisition of PSC Metals is accounted for as a combination of entities under common control and recorded at the historical pushdown basis of the assets and liabilities acquired at the effective date of control, December 31, 2003, by Icahn Enterprises. The unaudited pro forma condensed combined balance sheet at September 30, 2007, included herein, includes the pro forma combination of Icahn Enterprises and PSC Metals.
The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2007 and 2006 (i) combine the historical unaudited consolidated statements of operations of PSC Metals for each such period and (ii) reflect the combination of such entity with Icahn Enterprises during the period of common control, commencing January 1, 2004.
The unaudited pro forma condensed combined statements of operations for the years ended December 31, 2006, 2005 and 2004 (i) combine the historical audited consolidated statements of operations of PSC Metals for each such period and (ii) reflect the combination of such entity with Icahn Enterprises during the period of common control, commencing January 1, 2004.
The unaudited pro forma condensed combined balance sheet as of September 30, 2007 is presented as if the pending sale of ACEP occurred on September 30, 2007. In its quarterly report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2007, Icahn Enterprises reported the financial position and results of operations of ACEP as assets and liabilities held for sale in its consolidated balance sheet as of September 30, 2007 and discontinued operations in its consolidated statements of operations for the nine months ended September 30, 2007 and 2006. In its current report on Form 8-K filed with the SEC on December 5, 2007, Icahn Enterprises reported the financial position and results of operations of ACEP as assets and liabilities held for sale in its consolidated balance sheets as of December 31, 2006 and 2005, and discontinued operations in its consolidated statements of operations for each of the three years in the period ended December 31, 2006, respectively.
The unaudited pro forma condensed combined financial information does not purport to be indicative of the financial position and results of operations that Icahn Enterprises will obtain in the future, or that Icahn Enterprises would have obtained if the acquisition of PSC Metals and pending sale of ACEP were effective as of the dates indicated above. The pro forma adjustments are based upon currently available information and upon certain assumptions that Icahn Enterprises believes are reasonable. The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements of Icahn Enterprises included in its annual reports on Form 10-K and quarterly reports on Form 10-Q, and related amendments.
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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
September 30, 2007
(In $000s)
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	 	 	
  	 	Icahn
Enterprises	 	PSC
Metals (1)	 	Subtotal	 	Acquisition of PSC
Metals (1)	 	Sale of ACEP(2)	 	Pro Forma Results	
ASSETS
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Cash and cash equivalents	 	$	4,095	 	 	$	—	 	 	$	4,095	 	 	$	—	 	 	$	—	 	 	$	4,095	 	
Cash held at consolidated affiliated partnerships and restricted cash	 	 	1,136,546	 	 	 	—	 	 	 	1,136,546	 	 	 	—	 	 	 	—	 	 	 	1,136,546	 	
Securities owned, at fair value	 	 	5,585,669	 	 	 	—	 	 	 	5,585,669	 	 	 	—	 	 	 	—	 	 	 	5,585,669	 	
Unrealized gains on derivative contracts, at fair value	 	 	55,855	 	 	 	—	 	 	 	55,855	 	 	 	—	 	 	 	—	 	 	 	55,855	 	
Due from brokers	 	 	1,600,306	 	 	 	—	 	 	 	1,600,306	 	 	 	—	 	 	 	—	 	 	 	1,600,306	 	
Other assets	 	 	154,003	 	 	 	—	 	 	 	154,003	 	 	 	—	 	 	 	—	 	 	 	154,003	 	
  	 	 	8,536,474	 	 	 	—	 	 	 	8,536,474	 	 	 	—	 	 	 	—	 	 	 	8,536,474	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Cash and cash equivalents	 	 	2,836,403	 	 	 	3,302	 	 	 	2,839,705	 	 	 	(335,000)(3a)	 	 	 	1,096,112	(4a) 	 	 	3,600,817	 	
Restricted cash	 	 	41,405	 	 	 	—	 	 	 	41,405	 	 	 	—	 	 	 	—	 	 	 	41,405	 	
Investments	 	 	501,604	 	 	 	6,855	 	 	 	508,459	 	 	 	—	 	 	 	—	 	 	 	508,459	 	
Unrealized gains on derivative contracts, at fair value	 	 	1,849	 	 	 	—	 	 	 	1,849	 	 	 	—	 	 	 	—	 	 	 	1,849	 	
Inventories, net	 	 	233,865	 	 	 	68,655	 	 	 	302,520	 	 	 	—	 	 	 	—	 	 	 	302,520	 	
Trade, notes and other receivables, net	 	 	148,742	 	 	 	94,911	 	 	 	243,653	 	 	 	—	 	 	 	—	 	 	 	243,653	 	
Assets of discontinued operations held for sale	 	 	646,278	 	 	 	—	 	 	 	646,278	 	 	 	—	 	 	 	(589,054)(4b)	 	 	 	57,224	 	
Property, plant and equipment, net	 	 	445,365	 	 	 	78,365	 	 	 	523,730	 	 	 	—	 	 	 	—	 	 	 	523,730	 	
Intangible assets and goodwill	 	 	20,400	 	 	 	14,908	 	 	 	35,308	 	 	 	—	 	 	 	—	 	 	 	35,308	 	
Other assets	 	 	51,700	 	 	 	35,775	 	 	 	87,475	 	 	 	—	 	 	 	—	 	 	 	87,475	 	
  	 	 	4,927,611	 	 	 	302,771	 	 	 	5,230,382	 	 	 	(335,000	) 	 	 	507,058	 	 	 	5,402,440	 	
Total assets	 	$	13,464,085	 	 	$	302,771	 	 	$	13,766,856	 	 	$	(335,000	) 	 	$	507,058	 	 	$	13,938,914	 	
LIABILITIES AND PARTNERS' EQUITY
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Accounts payable, accrued expenses and other liabilities	 	$	29,219	 	 	$	—	 	 	$	29,219	 	 	$	—	 	 	$	—	 	 	$	29,219	 	
Deferred management fee payable to related party	 	 	146,863	 	 	 	—	 	 	 	146,863	 	 	 	—	 	 	 	—	 	 	 	146,863	 	
Subscriptions received in advance	 	 	23,336	 	 	 	—	 	 	 	23,336	 	 	 	—	 	 	 	—	 	 	 	23,336	 	
Payable for purchases of securities	 	 	211,279	 	 	 	—	 	 	 	211,279	 	 	 	—	 	 	 	—	 	 	 	211,279	 	
Securities sold, not yet purchased, at fair value	 	 	1,068,262	 	 	 	—	 	 	 	1,068,262	 	 	 	—	 	 	 	—	 	 	 	1,068,262	 	
Unrealized losses on derivative contracts, at fair value	 	 	116,498	 	 	 	—	 	 	 	116,498	 	 	 	—	 	 	 	—	 	 	 	116,498	 	
  	 	 	1,595,457	 	 	 	—	 	 	 	1,595,457	 	 	 	—	 	 	 	—	 	 	 	1,595,457	 	

See accompanying notes.
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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET – (continued)
September 30, 2007
(In $000s)
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	 	 	
  	 	Icahn
Enterprises	 	PSC
Metals (1)	 	Subtotal	 	Acquisition of PSC
Metals (1)	 	Sale of ACEP(2)	 	Pro Forma Results	
Holding company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Accounts payable	 	 	76,487	 	 	 	32,740	 	 	 	109,227	 	 	 	—	 	 	 	—	 	 	 	109,227	 	
Accrued expenses and other liabilities	 	 	113,235	 	 	 	13,411	 	 	 	126,646	 	 	 	—	 	 	 	255,484	(4c) 	 	 	382,130	 	
Unrealized losses on derivative contracts, at fair value	 	 	5,687	 	 	 	—	 	 	 	5,687	 	 	 	—	 	 	 	—	 	 	 	5,687	 	
Accrued environmental costs	 	 	—	 	 	 	24,012	 	 	 	24,012	 	 	 	—	 	 	 	—	 	 	 	24,012	 	
Liabilities of discontinued operations held for sale	 	 	314,895	 	 	 	—	 	 	 	314,895	 	 	 	—	 	 	 	(302,698)(4b)	 	 	 	12,197	 	
Long-term debt	 	 	2,040,058	 	 	 	37,048	 	 	 	2,077,106	 	 	 	—	 	 	 	—	 	 	 	2,077,106	 	
Preferred limited partnership units	 	 	122,049	 	 	 	—	 	 	 	122,049	 	 	 	—	 	 	 	—	 	 	 	122,049	 	
  	 	 	2,672,411	 	 	 	107,211	 	 	 	2,779,622	 	 	 	—	 	 	 	(47,214	) 	 	 	2,732,408	 	
Total Liabilities	 	 	4,267,868	 	 	 	107,211	 	 	 	4,375,079	 	 	 	—	 	 	 	(47,214	) 	 	 	4,327,865	 	
Commitments and contingencies
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Non-controlling interests in consolidated entities:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	6,601,480	 	 	 	—	 	 	 	6,601,480	 	 	 	—	 	 	 	—	 	 	 	6,601,480	 	
Holding Company and other operations	 	 	164,472	 	 	 	—	 	 	 	164,472	 	 	 	—	 	 	 	—	 	 	 	164,472	 	
  	 	 	6,765,952	 	 	 	—	 	 	 	6,765,952	 	 	 	—	 	 	 	—	 	 	 	6,765,952	 	
Partners’ equity:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Partners' equity	 	 	2,430,265	 	 	 	195,560	 	 	 	2,625,825	 	 	 	(335,000)(3a)	 	 	 	554,272	(4d) 	 	 	2,845,097	 	
Total liabilities and partners' equity	 	$	13,464,085	 	 	$	302,771	 	 	$	13,766,856	 	 	$	(335,000	) 	 	$	507,058	 	 	$	13,938,914	 	

See accompanying notes.
35

TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Nine Months Ended September 30, 2007
(In 000s, Except Per Unit Data)
 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	
  	 	Icahn Enterprises	 	PSC
Metals (1)	 	Acquisition of PSC Metals (3b)	 	Pro Forma Results	
Revenues:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Interest, dividends and other income	 	$	133,045	 	 	$	—	 	 	$	—	 	 	$	133,045	 	
Net gain from investment activities	 	 	554,223	 	 	 	—	 	 	 	—	 	 	 	554,223	 	
Management fees, related parties	 	 	7,494	 	 	 	—	 	 	 	—	 	 	 	7,494	 	
  	 	 	694,762	 	 	 	—	 	 	 	—	 	 	 	694,762	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	622,282	 	 	 	—	 	 	 	622,282	 	
Real Estate	 	 	83,617	 	 	 	—	 	 	 	—	 	 	 	83,617	 	
Home Fashion	 	 	531,109	 	 	 	—	 	 	 	—	 	 	 	531,109	 	
Interest and other income	 	 	114,860	 	 	 	172	 	 	 	—	 	 	 	115,032	 	
Net gain from investment activities	 	 	75,647	 	 	 	—	 	 	 	—	 	 	 	75,647	 	
Other income, net	 	 	28,478	 	 	 	—	 	 	 	—	 	 	 	28,478	 	
  	 	 	833,711	 	 	 	622,454	 	 	 	—	 	 	 	1,456,165	 	
Total revenues	 	 	1,528,473	 	 	 	622,454	 	 	 	—	 	 	 	2,150,927	 	
Expenses:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	82,934	 	 	 	—	 	 	 	—	 	 	 	82,934	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	594,253	 	 	 	—	 	 	 	594,253	 	
Real Estate	 	 	73,416	 	 	 	—	 	 	 	—	 	 	 	73,416	 	
Home Fashion	 	 	656,158	 	 	 	—	 	 	 	—	 	 	 	656,158	 	
Holding Company expenses	 	 	24,564	 	 	 	—	 	 	 	—	 	 	 	24,564	 	
Interest expense	 	 	98,689	 	 	 	532	 	 	 	—	 	 	 	99,221	 	
  	 	 	852,827	 	 	 	594,785	 	 	 	—	 	 	 	1,447,612	 	
Total expenses	 	 	935,761	 	 	 	594,785	 	 	 	—	 	 	 	1,530,546	 	
Income from continuing operations before income taxes and non-controlling interests in income of consolidated entities	 	 	592,712	 	 	 	27,669	 	 	 	—	 	 	 	620,381	 	
Income tax expense	 	 	(13,267	) 	 	 	(540	) 	 	 	—	 	 	 	(13,807	) 	
Non-controlling interests in (income) loss of consolidated entities:
	 	 	  	 	 	 	  	 	 	 	—	 	 	 	  	 	
Investment Management	 	 	(417,242	) 	 	 	—	 	 	 	—	 	 	 	(417,242	) 	
Holding Company and other operations	 	 	43,644	 	 	 	—	 	 	 	—	 	 	 	43,644	 	
  	 	 	(373,598	) 	 	 	—	 	 	 	—	 	 	 	(373,598	) 	
Income from continuing operations	 	$	205,847	 	 	$	27,129	 	 	$	—	 	 	$	232,976	 	
Income from continuing operations applicable to:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Limited partners(5)	 	$	29,320	 	 	 	 	 	 	 	 	 	 	$	29,320	 	
Earnings per limited partnership unit:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	$	0.47	 	 	 	 	 	 	 	 	 	 	$	0.47	 	
Diluted	 	$	0.47	 	 	 	 	 	 	 	 	 	 	$	0.47	 	
Weighted average limited partnership units outstanding:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	 	63,533	 	 	 	 	 	 	 	 	 	 	 	63,533	 	
Diluted	 	 	63,533	 	 	 	 	 	 	 	 	 	 	 	63,533	 	

See accompanying notes.
36

TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Nine Months Ended September 30, 2006
(In 000s, Except Per Unit Data)
 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	
  	 	Icahn Enterprises	 	PSC
Metals (1)	 	Acquisition of PSC Metals (3b)	 	Pro Forma Results	
Revenues:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Interest, dividends and other income	 	$	45,115	 	 	$	—	 	 	$	—	 	 	$	45,115	 	
Net gain from investment activities	 	 	571,774	 	 	 	—	 	 	 	—	 	 	 	571,774	 	
  	 	 	616,889	 	 	 	—	 	 	 	—	 	 	 	616,889	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	556,143	 	 	 	—	 	 	 	556,143	 	
Real Estate	 	 	101,316	 	 	 	—	 	 	 	—	 	 	 	101,316	 	
Home Fashion	 	 	672,350	 	 	 	—	 	 	 	—	 	 	 	672,350	 	
Interest and other income	 	 	33,798	 	 	 	718	 	 	 	—	 	 	 	34,516	 	
Net gain from investment activities	 	 	84,830	 	 	 	—	 	 	 	—	 	 	 	84,830	 	
Other income, net	 	 	13,535	 	 	 	—	 	 	 	(440	) 	 	 	13,095	 	
  	 	 	905,829	 	 	 	556,861	 	 	 	(440	) 	 	 	1,462,250	 	
Total revenues	 	 	1,522,718	 	 	 	556,861	 	 	 	(440	) 	 	 	2,079,139	 	
Expenses:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	45,600	 	 	 	—	 	 	 	—	 	 	 	45,600	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	521,360	 	 	 	—	 	 	 	521,360	 	
Real Estate	 	 	78,235	 	 	 	—	 	 	 	—	 	 	 	78,235	 	
Home Fashion	 	 	777,517	 	 	 	—	 	 	 	—	 	 	 	777,517	 	
Holding Company expenses	 	 	19,093	 	 	 	—	 	 	 	—	 	 	 	19,093	 	
Interest expense	 	 	63,769	 	 	 	126	 	 	 	—	 	 	 	63,895	 	
  	 	 	938,614	 	 	 	521,486	 	 	 	—	 	 	 	1,460,100	 	
Total expenses	 	 	984,214	 	 	 	521,486	 	 	 	—	 	 	 	1,505,700	 	
Income from continuing operations before income taxes and non-controlling interests in income of consolidated entities	 	 	538,504	 	 	 	35,375	 	 	 	(440	) 	 	 	573,439	 	
Income tax (expense) benefit	 	 	(1,720	) 	 	 	2,101	 	 	 	—	 	 	 	(381	) 	
Non-controlling interests in (income) loss of consolidated entities:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	(422,337	) 	 	 	—	 	 	 	—	 	 	 	(422,337	) 	
Holding Company and other operations	 	 	47,876	 	 	 	—	 	 	 	—	 	 	 	47,876	 	
  	 	 	(374,461	) 	 	 	—	 	 	 	—	 	 	 	(374,461	) 	
Income from continuing operations	 	$	162,323	 	 	$	37,476	 	 	$	(440	) 	 	$	199,359	 	
Income from continuing operations applicable to:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Limited partners(5)	 	$	15,997	 	 	 	  	 	 	 	  	 	 	$	15,566	 	
Earnings per limited partnership unit:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	$	0.25	 	 	 	  	 	 	 	  	 	 	$	0.25	 	
Diluted	 	$	0.25	 	 	 	  	 	 	 	  	 	 	$	0.25	 	
Weighted average limited partnership units outstanding:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	 	61,857	 	 	 	  	 	 	 	  	 	 	 	61,857	 	
Diluted	 	 	61,857	 	 	 	  	 	 	 	  	 	 	 	61,857	 	

See accompanying notes.
37

TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year Ended December 31, 2006
(In 000s, Except Per Unit Data)
 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	 	 	
  	 	Icahn Enterprises	 	PSC
Metals (1)	 	Acquisition of PSC Metals (3b)	 	Pro Forma Results	
Revenues:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Interest, dividends and other income	 	$	73,563	 	 	$	—	 	 	$	—	 	 	$	73,563	 	
Net gain from investment activities	 	 	1,030,740	 	 	 	—	 	 	 	—	 	 	 	1,030,740	 	
  	 	 	1,104,303	 	 	 	—	 	 	 	—	 	 	 	1,104,303	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	710,054	 	 	 	—	 	 	 	710,054	 	
Real Estate	 	 	132,610	 	 	 	—	 	 	 	—	 	 	 	132,610	 	
Home Fashion	 	 	890,840	 	 	 	—	 	 	 	—	 	 	 	890,840	 	
Interest and other income	 	 	50,433	 	 	 	5,144	 	 	 	—	 	 	 	55,577	 	
Net gain from investment activities	 	 	91,308	 	 	 	—	 	 	 	—	 	 	 	91,308	 	
Other income, net	 	 	20,828	 	 	 	—	 	 	 	(1,540	) 	 	 	19,288	 	
  	 	 	1,186,019	 	 	 	715,198	 	 	 	(1,540	) 	 	 	1,899,677	 	
Total revenues	 	 	2,290,322	 	 	 	715,198	 	 	 	(1,540	) 	 	 	3,003,980	 	
Expenses:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	79,735	 	 	 	—	 	 	 	—	 	 	 	79,735	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	667,118	 	 	 	—	 	 	 	667,118	 	
Real Estate	 	 	105,825	 	 	 	—	 	 	 	—	 	 	 	105,825	 	
Home Fashion	 	 	1,034,216	 	 	 	—	 	 	 	—	 	 	 	1,034,216	 	
Holding Company expenses	 	 	25,822	 	 	 	—	 	 	 	—	 	 	 	25,822	 	
Interest expense	 	 	85,298	 	 	 	160	 	 	 	—	 	 	 	85,458	 	
  	 	 	1,251,161	 	 	 	667,278	 	 	 	—	 	 	 	1,918,439	 	
Total expenses	 	 	1,330,896	 	 	 	667,278	 	 	 	—	 	 	 	1,998,174	 	
Income from continuing operations before income taxes and non-controlling interests in income of consolidated entities	 	 	959,426	 	 	 	47,920	 	 	 	(1,540	) 	 	 	1,005,806	 	
Income tax benefit (expense)	 	 	(2,156	) 	 	 	2,845	 	 	 	—	 	 	 	689	 	
Non-controlling interests in (income) loss of consolidated entities:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	(763,137	) 	 	 	—	 	 	 	—	 	 	 	(763,137	) 	
Holding Company and other operations	 	 	65,827	 	 	 	—	 	 	 	—	 	 	 	65,827	 	
  	 	 	(697,310	) 	 	 	—	 	 	 	—	 	 	 	(697,310	) 	
Income from continuing operations	 	$	259,960	 	 	$	50,765	 	 	$	(1,540	) 	 	$	309,185	 	
Income from continuing operations applicable to:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Limited partners(5)	 	$	2,133	 	 	 	  	 	 	 	  	 	 	$	624	 	
Earnings per limited partnership unit:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	$	0.03	 	 	 	  	 	 	 	  	 	 	$	0.01	 	
Diluted	 	$	0.03	 	 	 	  	 	 	 	  	 	 	$	0.01	 	
Weighted average limited partnership units outstanding:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	 	61,857	 	 	 	  	 	 	 	  	 	 	 	61,857	 	
Diluted	 	 	61,857	 	 	 	  	 	 	 	  	 	 	 	61,857	 	

See accompanying notes.
38

TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year Ended December 31, 2005
(In 000s, Except Per Unit Data)
 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	 	 	
  	 	Icahn Enterprises	 	PSC
Metals (1)	 	Acquisition of PSC Metals (3b)	 	Pro Forma Results	
Revenues:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Interest, dividends and other income	 	$	47,436	 	 	$	—	 	 	$	—	 	 	$	47,436	 	
Net gain from investment activities	 	 	305,440	 	 	 	—	 	 	 	—	 	 	 	305,440	 	
  	 	 	352,876	 	 	 	—	 	 	 	—	 	 	 	352,876	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	600,989	 	 	 	—	 	 	 	600,989	 	
Real Estate	 	 	98,392	 	 	 	—	 	 	 	—	 	 	 	98,392	 	
Home Fashion	 	 	441,771	 	 	 	—	 	 	 	—	 	 	 	441,771	 	
Interest and other income	 	 	41,174	 	 	 	1,457	 	 	 	—	 	 	 	42,631	 	
Net loss from investment activities	 	 	(21,260	) 	 	 	—	 	 	 	—	 	 	 	(21,260	) 	
Other income, net	 	 	9,749	 	 	 	—	 	 	 	(443	) 	 	 	9,306	 	
  	 	 	569,826	 	 	 	602,446	 	 	 	(443	) 	 	 	1,171,829	 	
Total revenues	 	 	922,702	 	 	 	602,446	 	 	 	(443	) 	 	 	1,524,705	 	
Expenses:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	26,050	 	 	 	—	 	 	 	—	 	 	 	26,050	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	569,836	 	 	 	—	 	 	 	569,836	 	
Real Estate	 	 	81,596	 	 	 	—	 	 	 	—	 	 	 	81,596	 	
Home Fashion	 	 	462,115	 	 	 	—	 	 	 	—	 	 	 	462,115	 	
Holding Company expenses	 	 	17,142	 	 	 	—	 	 	 	—	 	 	 	17,142	 	
Interest expense	 	 	72,328	 	 	 	278	 	 	 	—	 	 	 	72,606	 	
  	 	 	633,181	 	 	 	570,114	 	 	 	—	 	 	 	1,203,295	 	
Total expenses	 	 	659,231	 	 	 	570,114	 	 	 	—	 	 	 	1,229,345	 	
Income from continuing operations before income taxes and non-controlling interests in income of consolidated entities	 	 	263,471	 	 	 	32,332	 	 	 	(443	) 	 	 	295,360	 	
Income tax expense	 	 	(2,271	) 	 	 	(8,907	) 	 	 	—	 	 	 	(11,178	) 	
Non-controlling interests in (income) loss of consolidated entities:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	(241,361	) 	 	 	—	 	 	 	—	 	 	 	(241,361	) 	
Holding Company and other operations	 	 	9,466	 	 	 	—	 	 	 	—	 	 	 	9,466	 	
  	 	 	(231,895	) 	 	 	—	 	 	 	—	 	 	 	(231,895	) 	
Income from continuing operations	 	$	29,305	 	 	$	23,425	 	 	$	(443	) 	 	$	52,287	 	
Loss from continuing operations applicable to:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Limited partners(5)	 	$	(48,469	) 	 	 	  	 	 	 	  	 	 	$	(48,903	) 	
Loss per limited partnership unit:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	$	(0.90	) 	 	 	  	 	 	 	  	 	 	$	(0.91	) 	
Diluted	 	$	(0.90	) 	 	 	  	 	 	 	  	 	 	$	(0.91	) 	
Weighted average limited partnership units outstanding:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	 	54,085	 	 	 	  	 	 	 	  	 	 	 	54,085	 	
Diluted	 	 	54,085	 	 	 	  	 	 	 	  	 	 	 	54,085	 	

See accompanying notes.
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TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year Ended December 31, 2004
(In 000s, Except Per Unit Data)
 	 	 	 	 	 	 	 	 	
 	 	Historical	 	Pro Forma Adjustments	 	 	 	 	
  	 	Icahn Enterprises	 	PSC
Metals (1)	 	Acquisition of PSC Metals (3b)	 	Pro Forma Results	
Revenues:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Interest, dividends and other income	 	$	2,846	 	 	$	—	 	 	$	—	 	 	$	2,846	 	
Net gain from investment activities	 	 	59,254	 	 	 	—	 	 	 	—	 	 	 	59,254	 	
  	 	 	62,100	 	 	 	—	 	 	 	—	 	 	 	62,100	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	660,172	 	 	 	—	 	 	 	660,172	 	
Real Estate	 	 	60,123	 	 	 	—	 	 	 	—	 	 	 	60,123	 	
Interest and other income	 	 	41,096	 	 	 	4,502	 	 	 	—	 	 	 	45,598	 	
Net gain from investment activities	 	 	16,540	 	 	 	—	 	 	 	—	 	 	 	16,540	 	
Other income, net	 	 	7,913	 	 	 	—	 	 	 	—	 	 	 	7,913	 	
  	 	 	125,672	 	 	 	664,674	 	 	 	—	 	 	 	790,346	 	
Total revenues	 	 	187,772	 	 	 	664,674	 	 	 	—	 	 	 	852,446	 	
Expenses:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	1,976	 	 	 	—	 	 	 	—	 	 	 	1,976	 	
Holding Company and other operations:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Metals	 	 	—	 	 	 	582,105	 	 	 	—	 	 	 	582,105	 	
Real Estate	 	 	49,166	 	 	 	—	 	 	 	—	 	 	 	49,166	 	
Holding Company expenses	 	 	4,741	 	 	 	—	 	 	 	—	 	 	 	4,741	 	
Interest expense	 	 	28,381	 	 	 	2,405	 	 	 	—	 	 	 	30,786	 	
  	 	 	82,288	 	 	 	584,510	 	 	 	—	 	 	 	666,798	 	
Total expenses	 	 	84,264	 	 	 	584,510	 	 	 	—	 	 	 	668,774	 	
Income from continuing operations before income taxes and non-controlling interests	 	 	103,508	 	 	 	80,164	 	 	 	—	 	 	 	183,672	 	
Income tax benefit (expense)	 	 	(81	) 	 	 	18,949	 	 	 	—	 	 	 	18,868	 	
Non-controlling interests in income of consolidated entities:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Investment Management	 	 	(48,649	) 	 	 	—	 	 	 	—	 	 	 	(48,649	) 	
Income from continuing operations	 	$	54,778	 	 	$	99,113	 	 	$	—	 	 	$	153,891	 	
Income from continuing operations applicable to:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Limited partners(5)	 	$	22,677	 	 	 	  	 	 	 	  	 	 	$	22,677	 	
Earnings per limited partnership unit:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	$	0.49	 	 	 	  	 	 	 	  	 	 	$	0.49	 	
Diluted	 	$	0.49	 	 	 	  	 	 	 	  	 	 	$	0.49	 	
Weighted average limited partnership units outstanding:
	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	
Basic	 	 	46,098	 	 	 	  	 	 	 	  	 	 	 	46,098	 	
Diluted	 	 	46,098	 	 	 	  	 	 	 	  	 	 	 	46,098	 	

See accompanying notes.
40

TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Acquisition of PSC Metals, Inc.
On November 5, 2007, Icahn Enterprises acquired, through a subsidiary, all of the issued and outstanding capital stock of PSC Metals from Philip Services Corporation (“Philip”) for $335.0 million in cash. PSC Metals is engaged in transporting, recycling and processing metals.
Carl C. Icahn indirectly owns a 95.6% interest and Icahn Enterprises indirectly owns the remaining 4.4% interest in Philip. The transaction was approved by a special committee of independent members of the board of directors of Icahn Enterprises. The special committee was advised by its own legal counsel and independent financial advisor with respect to the transaction. The special committee received an opinion from its financial advisor as to the fairness to Icahn Enterprises, from a financial point of view, of the consideration paid by Icahn Enterprises.
PSC Metals is considered an entity under common control with Icahn Enterprises. Accordingly, the accompanying unaudited pro forma condensed combined financial statements include the net assets and results of operations of PSC Metals during the period of common control.
2. Pending Sale of American Casino & Entertainment Properties LLC
On April 22, 2007, American Entertainment Properties Corp. (“AEP”), a wholly owned indirect subsidiary of Icahn Enterprises, entered into a Membership Interest Purchase Agreement with W2007/ACEP Holdings, LLC, an affiliate of Whitehall Street Real Estate Funds, a series of real estate investment funds affiliated with Goldman Sachs & Co. to sell all of the issued and outstanding membership interests of ACEP, which comprises all of the remaining gaming operation, for $1.3 billion, plus or minus certain adjustments such as working capital, more fully described in the agreement. Pursuant to the terms of the agreement, AEP is required to cause ACEP to repay from funds provided by AEP, the principal, interest, prepayment penalty or premium due on ACEP’s 7.85% senior secured notes due 2012 and ACEP’s senior secured credit facility. With this transaction, Icahn Enterprises anticipates realizing a gain of approximately $0.57 billion on its investments in ACEP, after income taxes. ACEP’s casino assets are comprised of the Stratosphere Casino Hotel & Tower, the Arizona Charlie’s Decatur, the Arizona Charlie’s Boulder and the Aquarius Casino Resort. The transaction is subject to the approval of the Nevada Gaming Commission and the Nevada State Gaming Control Board, as well as customary conditions. The parties expect to close the transaction by the end of the first quarter of fiscal 2008; however, there can be no assurance that the transaction will be consummated.
3. Pro Forma Adjustments — Acquisition of PSC Metals, Inc.
 	3a	Cash paid for the acquisition of all issued and outstanding stock of PSC Metals.	
 	3b	As a result of the acquisition, we have adjusted for dividends paid by PSC Metals to Philip, its parent company in which one of our subs owned a 4.4% interest in. There are no agreements or other arrangements that require further adjustment to the pro forma condensed combined statements of operations.	
4. Pro Forma Adjustments — Disposition of ACEP
 	4a	To record the following adjustments to cash:	

 	 	(in 000s)	
Estimated gross proceeds from sale of ACEP	 	$	1,300,000	 	
Add: net working capital	 	 	71,575	 	
Total proceeds	 	 	1,371,575	 	
Repayment of long-term debt	 	 	(255,000	) 	
Debt early redemption fees	 	 	(8,600	) 	
Net proceeds	 	 	1,107,975	 	
Estimated transaction costs	 	 	(6,863	) 	
Stay bonuses	 	 	(5,000	) 	
Total adjustments to cash	 	$	1,096,112	 	
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TABLE OF CONTENTS
ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
4. Pro Forma Adjustments — Disposition of ACEP  – (continued)
 	4b	Reflects the elimination of the September 30, 2007 carrying value of the assets and liabilities of ACEP.	
 	4c	Reflects the estimated amount of income taxes payable relating to the sale of ACEP.	
 	4d	Reflects the amount of the estimated net gain on the transaction, net of income taxes.	
5. Earnings per Limited Partnership Unit
Basic earnings per LP unit are based on earnings attributable to Icahn Enterprises’ limited partners. Earnings of PSC Metals prior to the acquisition by Icahn Enterprises on November 5, 2007 are allocated to the general partner for accounting purposes and pro forma presentation. Therefore, these earnings are excluded from the computation of basic and diluted earnings per LP unit.
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