SEC Filing | Icahn Enterprises

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Table of Contents

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, 2020

☐ 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

16690 Collins Avenue, PH-1

Sunny Isles Beach, FL 33160

(305) 422-4100



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

16690 Collins Avenue, PH-1

Sunny Isles Beach, FL 33160

(305) 422-4100

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, 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 6, 2020, there were 232,082,223 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	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 6.	Exhibits	66

Table of Contents

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, including the impact of the COVID-19 pandemic, 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 include risks related to economic downturns, substantial competition and rising operating costs; risks related to the severity, magnitude and duration of the COVID-19 pandemic and its impact on the global economy, financial markets and industries in which our subsidiaries operate; risks related to our investment activities, including the nature of the investments made by the private funds in which we invest, declines in the fair value of our investments as a result of the COVID-19 pandemic, losses in the private funds and loss of key employees; risks related to our ability to continue to conduct our activities in a manner so as to not be deemed an investment company under the Investment Company Act of 1940, as amended; risks related to our energy business, including the volatility and availability of crude oil, declines in global demand for crude oil, refined products and liquid transportation fuels as result of the COVID-19 pandemic, other feed stocks and refined products, unfavorable refining margin (crack spread), interrupted access to pipelines, significant fluctuations in nitrogen fertilizer demand in the agricultural industry and seasonality of results; risks related to our automotive activities and exposure to adverse conditions in the automotive industry, including as a result of the COVID-19 pandemic; risks related to our food packaging activities, including competition from better capitalized competitors, inability of its suppliers to timely deliver raw materials, and the failure to effectively respond to industry changes in casings technology; risks related to our scrap metals activities, including potential environmental exposure; risks related to our real estate activities, including the extent of any tenant bankruptcies and insolvencies; risks related to our home fashion operations, including changes in the availability and price of raw materials, and changes in transportation costs and delivery times. These risks and uncertainties also include the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020 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.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	September 30,		December 31,
	2020		2019

	(In millions, except unit amounts)
ASSETS
Cash and cash equivalents	$	1,862	$	3,794
Cash held at consolidated affiliated partnerships and restricted cash		2,687		1,151
Investments		6,910		9,945
Due from brokers		1,682		858
Accounts receivable, net		443		483
Inventories, net		1,536		1,795
Property, plant and equipment, net		4,297		4,454
Unrealized gain on derivative contracts		1,439		182
Goodwill		284		282
Intangible assets, net		400		431
Other assets		1,284		1,264
Total Assets	$	22,824	$	24,639
LIABILITIES AND EQUITY
Accounts payable	$	663	$	945
Accrued expenses and other liabilities		1,451		1,453
Deferred tax liability		578		639
Unrealized loss on derivative contracts		172		1,224
Securities sold, not yet purchased, at fair value		970		1,190
Due to brokers		1,971		54
Debt		8,146		8,192
Total liabilities		13,951		13,697

Commitments and contingencies (Note 16)

Equity:
Limited partners: Depositary units: 232,082,223 units issued and outstanding at September 30, 2020 and 214,078,558 units issued and outstanding at December 31, 2019		4,086		6,268
General partner		(856)		(812)
Equity attributable to Icahn Enterprises		3,230		5,456
Equity attributable to non-controlling interests		5,643		5,486
Total equity		8,873		10,942
Total Liabilities and Equity	$	22,824	$	24,639

See notes to condensed consolidated financial statements.

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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(In millions, except per unit amounts)
Revenues:
Net sales	$	1,764	$	2,484	$	4,950	$	7,371
Other revenues from operations		163		170		460		504
Net loss from investment activities		(1,259)		(657)		(2,152)		(1,968)
Interest and dividend income		46		69		135		192
Gain on disposition of assets, net		7		249		5		256
Other income (loss), net		1		5		(27)		16
		722		2,320		3,371		6,371
Expenses:
Cost of goods sold		1,599		2,069		4,543		6,098
Other expenses from operations		127		141		369		409
Selling, general and administrative		289		352		888		1,027
Restructuring, net		1		4		8		15
Impairment		1		—		6		1
Interest expense		171		153		517		443
		2,188		2,719		6,331		7,993
Loss before income tax benefit		(1,466)		(399)		(2,960)		(1,622)
Income tax benefit		66		26		118		12
Loss from continuing operations		(1,400)		(373)		(2,842)		(1,610)
Loss from discontinued operations		—		—		—		(24)
Net loss		(1,400)		(373)		(2,842)		(1,634)
Less: net loss attributable to non-controlling interests		(686)		(324)		(1,043)		(693)
Net loss attributable to Icahn Enterprises	$	(714)	$	(49)	$	(1,799)	$	(941)

Net loss attributable to Icahn Enterprises from:
Continuing operations	$	(714)	$	(49)	$	(1,799)	$	(917)
Discontinued operations		—		—		—		(24)
	$	(714)	$	(49)	$	(1,799)	$	(941)
Net loss attributable to Icahn Enterprises allocated to:
Limited partners	$	(700)	$	(48)	$	(1,763)	$	(922)
General partner		(14)		(1)		(36)		(19)
	$	(714)	$	(49)	$	(1,799)	$	(941)

Basic and diluted loss per LP unit:
Continuing operations	$	(3.14)	$	(0.24)	$	(8.12)	$	(4.56)
Discontinued operations		—		—		—		(0.12)
Basic and diluted loss per LP unit	$	(3.14)	$	(0.24)	$	(8.12)	$	(4.68)
Basic and diluted weighted average LP units outstanding		223		202		217		197
Cash distributions declared per LP unit	$	2.00	$	2.00	$	6.00	$	6.00

See notes to condensed consolidated financial statements.

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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(in millions)
Net loss	$	(1,400)	$	(373)	$	(2,842)	$	(1,634)
Other comprehensive income (loss), net of tax:
Translation adjustments		1		(3)		—		(4)
Post-retirement benefits and other		1		(1)		1		1
Other comprehensive income (loss), net of tax		2		(4)		1		(3)
Comprehensive loss		(1,398)		(377)		(2,841)		(1,637)
Less: Comprehensive loss attributable to non-controlling interests		(686)		(325)		(1,042)		(694)
Comprehensive loss attributable to Icahn Enterprises	$	(712)	$	(52)	$	(1,799)	$	(943)

Comprehensive loss attributable to Icahn Enterprises allocated to:
Limited partners	$	(698)	$	(51)	$	(1,763)	$	(924)
General partner		(14)		(1)		(36)		(19)
	$	(712)	$	(52)	$	(1,799)	$	(943)

See notes to condensed consolidated financial statements.

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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)


	Equity Attributable to Icahn Enterprises
	General		Limited				Non-
	Partner’s		Partners’		Total Partners’		controlling
	(Deficit) Equity		Equity		Equity		Interests		Total Equity

	(In millions)
Balance, December 31, 2019	$	(812)	$	6,268	$	5,456	$	5,486	$	10,942
Net loss		(28)		(1,356)		(1,384)		(922)		(2,306)
Other comprehensive loss		—		(3)		(3)		—		(3)
Partnership distributions payable		(9)		(428)		(437)		—		(437)
Partnership contributions		—		7		7		—		7
Investment segment contributions from non-controlling interests		—		—		—		1,241		1,241
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(23)		(23)
Changes in subsidiary equity and other		—		(4)		(4)		—		(4)
Balance, March 31, 2020		(849)		4,484		3,635		5,782		9,417
Net income		6		293		299		565		864
Other comprehensive income		—		1		1		1		2
Partnership distributions payable reversal		9		428		437		—		437
Partnership distributions		(9)		(452)		(461)		—		(461)
Partnership contributions		—		19		19		—		19
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(13)		(13)
Changes in subsidiary equity and other		1		1		2		(2)		—
Balance, June 30, 2020		(842)		4,774		3,932		6,333		10,265
Net loss		(14)		(700)		(714)		(686)		(1,400)
Other comprehensive income		—		2		2		—		2
Partnership distributions		(1)		(31)		(32)		—		(32)
Partnership contributions		1		34		35		—		35
Changes in subsidiary equity and other		—		7		7		(4)		3
Balance, September 30, 2020	$	(856)	$	4,086	$	3,230	$	5,643	$	8,873


	Equity Attributable to Icahn Enterprises
	General		Limited				Non-
	Partner’s		Partners’		Total Partners’		controlling
	(Deficit) Equity		Equity		Equity		Interests		Total Equity

	(In millions)
Balance, December 31, 2018	$	(790)	$	7,350	$	6,560	$	6,420	$	12,980
Net loss		(8)		(386)		(394)		(270)		(664)
Partnership distributions 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 income		—		1		1		—		1
Partnership distributions payable reversal		8		383		391		—		391
Partnership distributions		(1)		(54)		(55)		—		(55)
Partnership contributions		—		10		10		—		10
Investment segment contributions from non-controlling interests		—		—		—		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 from non-controlling interests		—		—		—		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

See notes to condensed consolidated financial statements.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Nine Months Ended September 30,
	2020		2019

	(in millions)
Cash flows from operating activities:
Net loss	$	(2,842)	$	(1,634)
Adjustments to reconcile net loss to net cash provided by operating activities:
Loss from discontinued operations		—		24
Net loss from securities transactions		2,777		314
Purchases of securities		(1,480)		(3,885)
Proceeds from sales of securities		3,756		2,133
Payments to cover securities sold, not yet purchased		(2,291)		(451)
Proceeds from securities sold, not yet purchased		1,547		142
Changes in receivables and payables relating to securities transactions		1,080		609
Gain on disposition of assets, net		(5)		(256)
Depreciation and amortization		379		389
Deferred taxes		(59)		(84)
Other, net		79		(1)
Changes in unrealized gains/losses on derivative contracts		(2,309)		800
Changes in other operating assets and liabilities