SEC Filing | Icahn Enterprises

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to



(Commission File Number)	(Exact Name of Registrant as Specified in Its Charter) (Address of Principal Executive Offices) (Zip Code) (Telephone Number)	(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
1-9516	ICAHN ENTERPRISES L.P.	Delaware	13-3398766

767 Fifth Avenue, Suite 4700

New York, NY 10153

(212) 702-4300



333-118021-01	ICAHN ENTERPRISES HOLDINGS L.P.	Delaware	13-3398767

767 Fifth Avenue, Suite 4700

New York, NY 10153

(212) 702-4300

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Depositary Units of Icahn Enterprises L.P. Representing Limited Partner Interests	IEP	NASDAQ	Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Icahn Enterprises L.P. Yes ☒ No ☐ Icahn Enterprises Holdings L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Icahn Enterprises L.P. Yes ☒ No ☐ Icahn Enterprises Holdings L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check One):

Icahn Enterprises L.P.

Icahn Enterprises Holdings L.P.

Large Accelerated Filer

☒

Accelerated Filer

☐

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Non-accelerated Filer

☒

Smaller Reporting Company

☐

Emerging Growth Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Icahn Enterprises L.P. Yes ☐ No ☒ Icahn Enterprises Holdings L.P. Yes ☐ No ☒

As of November 4, 2019, there were 207,489,066 of Icahn Enterprises’ depositary units outstanding.

ICAHN ENTERPRISES L.P.

ICAHN ENTERPRISES HOLDINGS L.P.

TABLE OF CONTENTS



		Page No.
	Explanatory Note and Forward-Looking Statements	1

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited).	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	59
Item 4.	Controls and Procedures.	59

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings.	60
Item 1A.	Risk Factors.	60
Item 5.	Other Information.	60
Item 6.	Exhibits.	61

EXPLANATORY NOTE

This Quarterly Report on Form 10-Q (this “Report”) is a joint report being filed by Icahn Enterprises L.P. and Icahn Enterprises Holdings L.P. Each registrant hereto is filing on its own behalf all of the information contained in this Report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

FORWARD-LOOKING STATEMENTS

This Report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), or by Public Law 104-67. All statements included in this Report, other than statements that relate solely to historical fact, are “forward-looking statements.” Such statements include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events, or any statement that may relate to strategies, plans or objectives for, or potential results of, future operations, financial results, financial condition, business prospects, growth strategy or liquidity, and are based upon management’s current plans and beliefs or current estimates of future results or trends. Forward-looking statements can generally be identified by phrases such as “believes,” “expects,” “potential,” “continues,” “may,” “should,” “seeks,” “predicts,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “could,” “designed,” “should be” and other similar expressions that denote expectations of future or conditional events rather than statements of fact.

Forward-looking statements include certain statements made under the caption, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under Part I, Item 2 of this Report, but also forward-looking statements that appear in other parts of this Report. Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statements. These risks and uncertainties may include the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2018 and those set forth in this Report, including under the caption “Risk Factors,” under Part II, Item 1A of this Report. Additionally, there may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)



	September 30, 2019			December 31, 2018
ASSETS	(In millions, except unit amounts)
Cash and cash equivalents	$	3,266		$	2,656
Cash held at consolidated affiliated partnerships and restricted cash	613			2,682
Investments	9,437			8,337
Due from brokers	842			664
Accounts receivable, net	500			474
Inventories, net	1,817			1,779
Property, plant and equipment, net	4,592			4,688
Goodwill	281			247
Intangible assets, net	449			501
Other assets	1,460			1,461
Total Assets	$	23,257		$	23,489
LIABILITIES AND EQUITY
Accounts payable	$	895		$	832
Accrued expenses and other liabilities	2,342			1,012
Deferred tax liability	625			694
Unrealized loss on derivative contracts	461			36
Securities sold, not yet purchased, at fair value	223			468
Due to brokers	114			141
Debt	7,449			7,326
Total liabilities	12,109			10,509

Commitments and contingencies (Note 17)

Equity:
Limited partners: Depositary units: 207,489,066 units issued and outstanding at September 30, 2019 and 191,366,097 units issued and outstanding at December 31, 2018	6,441			7,350
General partner	(808		)	(790		)
Equity attributable to Icahn Enterprises	5,633			6,560
Equity attributable to non-controlling interests	5,515			6,420
Total equity	11,148			12,980
Total Liabilities and Equity	$	23,257		$	23,489

See notes to condensed consolidated financial statements.

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:	(In millions, except per unit amounts)
Net sales	$	2,484		$	2,815		$	7,371		$	7,998
Other revenues from operations	170			166			504			491
Net (loss) gain from investment activities	(657		)	(514		)	(1,968		)	328
Interest and dividend income	69			36			192			98
Gain on disposition of assets, net	249			65			256			65
Other income (loss), net	5			1			16			(5		)
	2,320			2,569			6,371			8,975
Expenses:
Cost of goods sold	2,069			2,372			6,098			6,786
Other expenses from operations	141			138			409			397
Selling, general and administrative	352			329			1,027			1,012
Restructuring, net	4			17			15			20
Impairment	—			—			1			3
Interest expense	153			125			443			391
	2,719			2,981			7,993			8,609
(Loss) income from continuing operations before income tax benefit	(399		)	(412		)	(1,622		)	366
Income tax benefit	26			78			12			77
(Loss) income from continuing operations	(373		)	(334		)	(1,610		)	443
Income (loss) from discontinued operations	—			176			(24		)	388
Net (loss) income	(373		)	(158		)	(1,634		)	831
Less: net (loss) income attributable to non-controlling interests	(324		)	(276		)	(693		)	279
Net (loss) income attributable to Icahn Enterprises	$	(49	)	$	118		$	(941	)	$	552

Net (loss) income attributable to Icahn Enterprises from:
Continuing operations	$	(49	)	$	(45	)	$	(917	)	$	201
Discontinued operations	—			163			(24		)	351
	$	(49	)	$	118		$	(941	)	$	552
Net (loss) income attributable to Icahn Enterprises allocated to:
Limited partners	$	(48	)	$	116		$	(922	)	$	541
General partner	(1		)	2			(19		)	11
	$	(49	)	$	118		$	(941	)	$	552
Basic and diluted (loss) income per LP unit:
Continuing operations	$	(0.24	)	$	(0.24	)	$	(4.56	)	$	1.11
Discontinued operations	—			0.88			(0.12		)	1.93
	$	(0.24	)	$	0.64		$	(4.68	)	$	3.04
Basic and diluted weighted average LP units outstanding	202			183			197			178
Cash distributions declared per LP unit	$	2.00		$	1.75		$	6.00		$	5.25

See notes to condensed consolidated financial statements.

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(in millions)
Net (loss) income	$	(373	)	$	(158	)	$	(1,634	)	$	831
Other comprehensive income (loss), net of tax:
Translation adjustments	(3		)	(11		)	(4		)	(86		)
Post-retirement benefits and other	(1		)	3			1			18
Other comprehensive loss, net of tax	(4		)	(8		)	(3		)	(68		)
Comprehensive (loss) income	(377		)	(166		)	(1,637		)	763
Less: Comprehensive (loss) income attributable to non-controlling interests	(325		)	(278		)	(694		)	271
Comprehensive (loss) income attributable to Icahn Enterprises	$	(52	)	$	112		$	(943	)	$	492

Comprehensive (loss) income attributable to Icahn Enterprises allocated to:
Limited partners	$	(51	)	$	110		$	(924	)	$	482
General partner	(1		)	2			(19		)	10
	$	(52	)	$	112		$	(943	)	$	492

See notes to condensed consolidated financial statements.

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(In millions)



	Equity Attributable to Icahn Enterprises
	General Partner’s (Deficit) Equity			Limited Partners’ Equity			Total Partners’ Equity			Non-controlling Interests			Total Equity
Balance, December 31, 2018	$	(790	)	$	7,350		$	6,560		$	6,420		$	12,980
Net loss	(8		)	(386		)	(394		)	(270		)	(664		)
Distribution payable	(8		)	(383		)	(391		)	—			(391		)
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(30		)	(30		)
Changes in subsidiary equity and other	2			62			64			(307		)	(243		)
Balance, March 31, 2019	(804		)	6,643			5,839			5,813			11,652
Net loss	(10		)	(488		)	(498		)	(99		)	(597		)
Other comprehensive loss	—			1			1			—			1
Distribution payable reversal	8			383			391			—			391
Partnership distributions	(1		)	(54		)	(55		)	—			(55		)
Partnership contributions	—			10			10			—			10
Investment segment contributions	—			—			—			70			70
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(26		)	(26		)
Changes in subsidiary equity and other	—			3			3			(3		)	—
Balance, June 30, 2019	(807		)	6,498			5,691			5,755			11,446
Net loss	(1		)	(48		)	(49		)	(324		)	(373		)
Other comprehensive loss	—			(3		)	(3		)	(1		)	(4		)
Partnership distributions	(1		)	(27		)	(28		)	—			(28		)
Partnership contributions	1			24			25			—			25
Investment segment contributions	—			—			—			150			150
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(34		)	(34		)
Changes in subsidiary equity and other	—			(3		)	(3		)	(31		)	(34		)
Balance, September 30, 2019	$	(808	)	$	6,441		$	5,633		$	5,515		$	11,148



	Equity Attributable to Icahn Enterprises
	General Partner’s (Deficit) Equity			Limited Partners’ Equity			Total Partners’ Equity			Non-controlling Interests			Total Equity
Balance, December 31, 2017	$	(234	)	$	5,402		$	5,168		$	6,318		$	11,486
Net income	3			129			132			280			412
Other comprehensive income	—			40			40			3			43
Distribution payable	(6		)	(304		)	(310		)	—			(310		)
Investment segment contributions	—			—			—			280			280
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(31		)	(31		)
Cumulative effect adjustment from adoption of accounting principle	(1		)	(28		)	(29		)	—			(29		)
Changes in subsidiary equity and other	1			—			1			10			11
Balance, March 31, 2018	(237		)	5,239			5,002			6,860			11,862
Net income	6			296			302			275			577
Other comprehensive loss	(1		)	(93		)	(94		)	(9		)	(103		)
Distribution payable reversal	6			304			310			—			310
Partnership distributions	(1		)	(47		)	(48		)	—			(48		)
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(47		)	(47		)
Changes in subsidiary equity and other	(1		)	(5		)	(6		)	(1		)	(7		)
Balance, June 30, 2018	(228		)	5,694			5,466			7,078			12,544
Net income (loss)	2			116			118			(276		)	(158		)
Other comprehensive loss	—			(6		)	(6		)	(2		)	(8		)
Partnership distributions	(1		)	(24		)	(25		)	—			(25		)
Dividends and distributions to non-controlling interests in subsidiaries	—			—			—			(31		)	(31		)
Changes in subsidiary equity and other	3			90			93			6			99
Balance, September 30, 2018	$	(224	)	$	5,870		$	5,646		$	6,775		$	12,421

See notes to condensed consolidated financial statements.

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



	Nine Months Ended September 30,
	2019			2018
	(in millions)
Cash flows from operating activities:
Net (loss) income	$	(1,634	)	$	831
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Loss (income) from discontinued operations	24			(388		)
Net loss (gain) from securities transactions	314			(858		)
Purchases of securities	(3,885		)	(3,911		)
Proceeds from sales of securities	2,133			5,538
Payments to cover securities sold, not yet purchased	(451		)	(1,390		)
Proceeds from securities sold, not yet purchased	142			949
Changes in receivables and payables relating to securities transactions	609			(609		)
Gain on disposition of assets, net	(256		)	(65		)
Depreciation and amortization	389			383
Deferred taxes	(84		)	(85		)
Other, net	(1		)	48
Changes in operating assets and liabilities	832			(548		)
Net cash used in operating activities from continuing operations	(1,868		)	(105		)
Net cash provided by operating activities from discontinued operations	—			436
Net cash (used in) provided by operating activities	(1,868		)	331
Cash flows from investing activities:
Capital expenditures	(195		)	(193		)
Acquisition of businesses, net of cash acquired	(52		)	(13		)
Purchases of investments	(50		)	(25		)
Proceeds from sale of investments	458			1
Proceeds from disposition of businesses and assets	491			158
Other, net	(21		)	(7		)
Net cash provided by (used in) investing activities from continuing operations	631			(79		)
Net cash used in investing activities from discontinued operations	—			(393		)
Net cash provided by (used in) investing activities	631			(472		)
Cash flows from financing activities:
Investment segment contributions from non-controlling interests	220			280
Partnership contributions	35			—
Partnership distributions	(83		)	(73		)
Purchase of additional interests in consolidated subsidiaries	(241		)	—
Dividends and distributions to non-controlling interests in subsidiaries	(90		)	(95		)
Proceeds from Holding Company senior unsecured notes	1,757			—
Repayments of Holding Company senior unsecured notes	(1,700		)	—
Proceeds from subsidiary borrowings	565			1,003
Repayments of subsidiary borrowings	(597		)	(1,046		)
Other, net	(3		)	12
Net cash (used in) provided by financing activities from continuing operations	(137		)	81
Net cash used in financing activities from discontinued operations	—			(159		)
Net cash used in financing activities	(137		)	(78		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and restricted cash equivalents	(2		)	(1		)
Add back change in cash and restricted cash of assets held for sale	(83		)	70
Net decrease in cash and cash equivalents and restricted cash and restricted cash equivalents	(1,459		)	(150		)
Cash and cash equivalents and restricted cash and restricted cash equivalents, beginning of period	5,338			1,911
Cash and cash equivalents and restricted cash and restricted cash equivalents, end of period	$	3,879		$	1,761

See notes to condensed consolidated financial statements.

ICAHN ENTERPRISES HOLDINGS L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)



	September 30, 2019		December 31, 2018
ASSETS	(in millions)
Cash and cash equivalents	$	3,266	$	2,656
Cash held at consolidated affiliated partnerships and restricted cash	613