SEC Filing | Icahn Enterprises

View:

Download DOC

Download PDF

Download XLS

Download XBRL

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, 2022

☐ 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

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. 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). 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):


Large Accelerated Filer	⌧	Accelerated Filer	◻	Emerging Growth Company	☐
Non-accelerated Filer	◻	Smaller Reporting 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). Yes ☐ No ⌧

As of November 3, 2022, there were 337,473,951 of Icahn Enterprises’ depositary units outstanding.

ICAHN ENTERPRISES L.P.

TABLE OF CONTENTS

		Page No.
	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	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	50

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and use of Proceeds	53
Item 5.	Other Information	53
Item 6.	Exhibits	54

Table of Contents

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 the Private Securities Litigation Reform Act. 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; the impacts from the Russia/Ukraine conflict, including economic volatility and the impacts of export controls and other economic sanctions; 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, other feed stocks and refined products, declines in global demand for crude oil, refined products and liquid transportation fuels as result of the COVID-19 pandemic, 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 our suppliers to timely deliver raw materials, and the failure to effectively respond to industry changes in casings technology; supply chain issues; inflation, including increased costs of raw materials and shipping, including as a result of the Russia/Ukraine conflict; interest rate increases; labor shortages and workforce availability; 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, 2021 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,
	2022		2021

	(in millions, except unit amounts)
ASSETS
Cash and cash equivalents	$	2,432	$	2,321
Cash held at consolidated affiliated partnerships and restricted cash		4,778		2,115
Investments		4,877		9,151
Due from brokers		5,747		5,530
Accounts receivable, net		610		546
Inventories, net		1,674		1,478
Property, plant and equipment, net		4,057		4,085
Derivative assets, net		1,511		612
Goodwill		286		290
Intangible assets, net		547		595
Other assets		1,001		1,023
Total Assets	$	27,520	$	27,746
LIABILITIES AND EQUITY
Accounts payable	$	1,007	$	805
Accrued expenses and other liabilities		2,019		1,778
Deferred tax liabilities		344		390
Derivative liabilities, net		713		787
Securities sold, not yet purchased, at fair value		5,382		5,340
Due to brokers		1,061		1,611
Debt		7,127		7,692
Total liabilities		17,653		18,403

Commitments and contingencies (Note 16)

Equity:
Limited partners: Depositary units: 337,473,951 units issued and outstanding at September 30, 2022 and 293,403,243 units issued and outstanding at December 31, 2021		4,748		4,298
General partner		(745)		(754)
Equity attributable to Icahn Enterprises		4,003		3,544
Equity attributable to non-controlling interests		5,864		5,799
Total equity		9,867		9,343
Total Liabilities and Equity	$	27,520	$	27,746

See notes to condensed consolidated financial statements.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(in millions, except per unit amounts)
Revenues:
Net sales	$	3,334	$	2,657	$	10,098	$	7,487
Other revenues from operations		197		168		562		486
Net (loss) gain from investment activities		(187)		(177)		310		1,035
Interest and dividend income		88		34		180		94
Other loss, net		(28)		(33)		(150)		(79)
		3,404		2,649		11,000		9,023
Expenses:
Cost of goods sold		3,026		2,270		8,738		6,812
Other expenses from operations		156		134		441		381
Selling, general and administrative		305		316		921		930
Restructuring, net		—		1		—		6
Interest expense		139		158		424		511
		3,626		2,879		10,524		8,640
(Loss) income before income tax (expense) benefit		(222)		(230)		476		383
Income tax benefit (expense)		7		19		(93)		(57)
Net (loss) income		(215)		(211)		383		326
Less: net (loss) income attributable to non-controlling interests		(92)		(63)		311		448
Net (loss) income attributable to Icahn Enterprises	$	(123)	$	(148)	$	72	$	(122)

Net (loss) income attributable to Icahn Enterprises allocated to:
Limited partners	$	(121)	$	(145)	$	71	$	(120)
General partner		(2)		(3)		1		(2)
	$	(123)	$	(148)	$	72	$	(122)

Basic (loss) income per LP unit	$	(0.37)	$	(0.55)	$	0.23	$	(0.47)
Basic weighted average LP units outstanding		324		266		308		253

Diluted (loss) income per LP unit	$	(0.37)	$	(0.55)	$	0.23	$	(0.47)
Diluted weighted average LP units outstanding		324		266		308		253
Distributions declared per LP unit	$	2.00	$	2.00	$	6.00	$	6.00

See notes to condensed consolidated financial statements.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(in millions)
Net (loss) income	$	(215)	$	(211)	$	383	$	326
Other comprehensive loss, net of tax:
Translation adjustments		(6)		(5)		(13)		(4)
Post-retirement benefits and other		1		—		1		1
Other comprehensive loss, net of tax		(5)		(5)		(12)		(3)
Comprehensive (loss) income		(220)		(216)		371		323
Less: Comprehensive (loss) income attributable to non-controlling interests		(92)		(64)		311		448
Comprehensive (loss) income attributable to Icahn Enterprises	$	(128)	$	(152)	$	60	$	(125)

Comprehensive (loss) income attributable to Icahn Enterprises allocated to:
Limited partners	$	(125)	$	(149)	$	59	$	(123)
General partner		(3)		(3)		1		(2)
	$	(128)	$	(152)	$	60	$	(125)

See notes to condensed consolidated financial statements.

Table of Contents

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		Interests		Total Equity

	(in millions)
Balance, December 31, 2021	$	(754)	$	4,298	$	3,544	$	5,799	$	9,343
Net income		6		317		323		562		885
Partnership distributions payable		(12)		(591)		(603)		—		(603)
Partnership contributions		4		180		184		—		184
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(36)		(36)
Changes in subsidiary equity and other		—		(5)		(5)		(10)		(15)
Balance, March 31, 2022	$	(756)	$	4,199	$	3,443	$	6,315	$	9,758
Net loss		(3)		(125)		(128)		(159)		(287)
Other comprehensive loss		—		(7)		(7)		—		(7)
Partnership distributions payable reversal		12		591		603		—		603
Partnership distributions		(2)		(100)		(102)		—		(102)
Partnership contributions		4		210		214		—		214
Investment segment contributions from non-controlling interests		—		—		—		5		5
Investment segment distributions to non-controlling interests		—		—		—		(3)		(3)
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(26)		(26)
Changes in subsidiary equity and other		(1)		5		4		(1)		3
Balance, June 30, 2022		(746)		4,773		4,027		6,131		10,158
Net loss		(2)		(121)		(123)		(92)		(215)
Other comprehensive loss		—		(5)		(5)		—		(5)
Partnership distributions		(1)		(59)		(60)		—		(60)
Partnership contributions		4		160		164		—		164
Investment segment distributions to non-controlling interests		—		—		—		(19)		(19)
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(156)		(156)
Balance, September 30, 2022	$	(745)	$	4,748	$	4,003	$	5,864	$	9,867


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

	(in millions)
Balance, December 31, 2020	$	(853)	$	4,236	$	3,383	$	5,875	$	9,258
Net income		3		159		162		437		599
Other comprehensive loss		—		(1)		(1)		—		(1)
Partnership distributions payable		(10)		(489)		(499)		—		(499)
Partnership contributions		4		182		186		—		186
Investment segment contributions from non-controlling interests		—		—		—		40		40
Changes in subsidiary equity and other		—		(1)		(1)		—		(1)
Balance, March 31, 2021	$	(856)	$	4,086	$	3,230	$	6,352	$	9,582
Net (loss) income		(2)		(134)		(136)		74		(62)
Other comprehensive income		—		2		2		1		3
Partnership distributions payable reversal		10		489		499		—		499
Partnership distributions		(1)		(56)		(57)		—		(57)
Partnership contributions		4		198		202		—		202
Investment segment contributions from non-controlling interests		—		—		—		6		6
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(144)		(144)
Changes in subsidiary equity and other		(1)		(4)		(5)		1		(4)
Balance, June 30, 2021		(846)		4,581		3,735		6,290		10,025
Net loss		(3)		(145)		(148)		(63)		(211)
Other comprehensive loss		—		(4)		(4)		(1)		(5)
Partnership distributions		(1)		(35)		(36)		—		(36)
Partnership contributions		4		218		222		—		222
Investment segment contributions from non-controlling interests		—		—		—		22		22
Dividends and distributions to non-controlling interests in subsidiaries		—		—		—		(11)		(11)
Changes in subsidiary equity and other		—		1		1		—		1
Balance, September 30, 2021	$	(846)	$	4,616	$	3,770	$	6,237	$	10,007

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,
	2022		2021

	(in millions)
Cash flows from operating activities:
Net income	$	383	$	326
Adjustments to reconcile net income to net cash provided by operating activities:
Net gain from securities transactions		(178)		(1,603)
Purchases of securities		(883)		(1,991)
Proceeds from sales of securities		4,920		3,246
Payments to cover securities sold, not yet purchased		(2,623)		(2,325)
Proceeds from securities sold, not yet purchased		2,925		3,626
Changes in receivables and payables relating to securities transactions		(768)		(1,672)
Changes in derivative assets and liabilities		(966)		(171)
Gain on disposition of assets, net		(3)		—
Depreciation and amortization		380		385
Deferred taxes		(44)		18
Other, net		48		60
Changes in other operating assets and liabilities		149		167
Net cash provided by operating activities		3,340		66
Cash flows from investing activities:
Capital expenditures		(254)		(239)
Turnaround expenditures		(74)		(3)
Acquisition of businesses, net of cash acquired		—		(20)
Proceeds from sale of investments		153		422
Proceeds from disposition of businesses and assets		4		60
Net cash (used in) provided by investing activities		(171)		220
Cash flows from financing activities:
Investment segment (distributions) contributions from non-controlling interests		(14)		62
Partnership contributions		560		586
Partnership distributions		(162)		(92)
Dividends and distributions to non-controlling interests in subsidiaries		(218)		(81)
Proceeds from Holding Company senior unsecured notes		—		1,214
Repayments of Holding Company senior unsecured notes		(500)		(1,205)
Proceeds from subsidiary borrowings		91		1,116
Repayments of subsidiary borrowings		(155)		(1,477)
Other, net		(5)		(13)
Net cash (used in) provided by financing activities		(403)		110
Effect of exchange rate changes on cash and cash equivalents and restricted cash and restricted cash equivalents		8		5
Net increase in cash and cash equivalents and restricted cash and restricted cash equivalents		2,774		401
Cash and cash equivalents and restricted cash and restricted cash equivalents, beginning of period		4,436		3,291
Cash and cash equivalents and restricted cash and restricted cash equivalents, end of period	$	7,210	$	3,692

See notes to condensed consolidated financial statements.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Description of Business

Overview

Icahn Enterprises L.P. (“Icahn Enterprises”) is a master limited partnership formed in Delaware on February 17, 1987. References to “we,” “our” or “us” herein include both Icahn Enterprises and Icahn Enterprises Holdings and their subsidiaries, unless the context otherwise requires.

Icahn Enterprises owns a 99% limited partner interest in Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”). Icahn Enterprises Holdings and its subsidiaries own substantially all of our assets and liabilities and conduct substantially all of our operations. Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”), which is indirectly owned and controlled by Mr. Carl C. Icahn, owns a 1% general partner interest in each of Icahn Enterprises and Icahn Enterprises Holdings as of September 30, 2022, representing an aggregate 1.99% general partner interest in Icahn Enterprises Holdings and us. Mr. Icahn and his affiliates owned approximately 86% of our outstanding depositary units as of September 30, 2022.

Description of Continuing Operating Businesses

We are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion and Pharma. In addition, we operated our Metals segment until sold in December 2021. We also report the results of our Holding Company, which includes the results of certain subsidiaries of Icahn Enterprises (unless otherwise noted), and investment activity and expenses associated with our Holding Company. See Note 12, “Segment Reporting,” for a reconciliation of each of our reporting segment’s results of operations to our consolidated results. Certain additional information with respect to our segments is discussed below.

Investment

Our Investment segment is comprised of various private investment funds (“Investment Funds”) in which we have general partner interests and through which we invest our proprietary capital. As general partner, we provide investment advisory and certain administrative and back-office services to the Investment Funds but do not provide such services to any other entities, individuals or accounts. We and certain of Mr. Icahn’s family members and affiliates are the only investors in the Investment Funds. Interests in the Investment Funds are not offered to outside investors. We had interests in the Investment Funds with a fair value of approximately $4.4 billion and $4.2 billion as of September 30, 2022 and December 31, 2021, respectively.

Energy

We conduct our Energy segment through our majority owned subsidiary, CVR Energy, Inc. (“CVR Energy”). CVR Energy is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing businesses through its holdings in CVR Refining, LP (“CVR Refining”) and CVR Partners, LP (“CVR Partners”), respectively. CVR Refining is an independent petroleum refiner and marketer of high value transportation fuels primarily in the form of gasoline and diesel fuels, as well as renewable diesel. CVR Partners produces and markets nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. CVR Energy has a general partner interest in each of CVR Refining and CVR Partners. In addition, CVR Energy is the sole limited partner of CVR Refining and owns approximately 37% outstanding common units of CVR Partners as of September 30, 2022. As of September 30, 2022, we owned approximately 71% of the total outstanding common stock of CVR Energy.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Automotive

We conduct our Automotive segment through our wholly owned subsidiary, Icahn Automotive Group LLC (“Icahn Automotive”). Icahn Automotive is engaged in the retail and wholesale distribution of automotive parts in the aftermarket (“aftermarket parts”) as well as providing automotive repair and maintenance services (“automotive services”) to its customers. Icahn Automotive’s aftermarket parts and automotive services businesses serve different customer channels and have distinct strategies, opportunities and requirements and therefore are operated as two independent operating companies, each with its own management team.

Food Packaging

We conduct our Food Packaging segment through our majority owned subsidiary, Viskase Companies, Inc. (“Viskase”). Viskase is a producer of cellulosic, fibrous and plastic casings used to prepare and package processed meat products. As of September 30, 2022, we owned approximately 89% of the total outstanding common stock of Viskase.

Real Estate

Our Real Estate segment consists primarily of investment properties, the development and sale of single-family homes and the management of a country club.

Home Fashion

We conduct our Home Fashion segment through our wholly owned subsidiary, WestPoint Home LLC (“WPH”). WPH’s business consists of manufacturing, sourcing, marketing, distributing and selling home fashion consumer products.

Pharma

We conduct our Pharma segment through our wholly owned subsidiary, Vivus LLC, formerly Vivus, Inc. (“Vivus”). Vivus is a specialty pharmaceutical company with two approved therapies and one product candidate in active clinical development.

Metals

We conducted our Metals segment through our wholly owned subsidiary, PSC Metals LLC (“PSC Metals”). PSC Metals was principally engaged in the business of collecting, processing and selling ferrous and non-ferrous metals, as well as the processing and distribution of steel pipe and plate products. PSC Metals collected industrial and obsolete scrap metal, processed it into reusable forms and supplied the recycled metals to its customers.

On December 7, 2021, we closed on the previously announced sale of 100% of the equity interests in PSC Metals. As a result of the sale of PSC Metals, we no longer operate a Metals segment at December 31, 2021 and September 30, 2022.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

2. Basis of Presentation and Summary of Significant Accounting Policies

We conduct and plan to continue to conduct our activities in such a manner as not to be deemed an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Therefore, no more than 40% of our total assets can be invested in investment securities, as such term is defined in the Investment Company Act. In addition, we do not invest or intend to invest in securities as our primary business. We structure and intend to continue structuring our investments to be taxed as a partnership rather than as a corporation under the applicable publicly traded partnership rules of the Internal Revenue Code, as amended.

Events beyond our control, including significant appreciation or depreciation in the market value of certain of our publicly traded holdings or adverse developments with respect to our ownership of certain of our subsidiaries, could result in our inadvertently becoming an investment company that is required to register under the Investment Company Act. Our sales of Federal-Mogul LLC, Tropicana Entertainment Inc., American Railcar Industries, Inc., Ferrous Resources Ltd., and PSC Metals in recent years did not result in our being considered an investment company. However, additional transactions involving the sale of certain assets could result in our being considered an investment company. Following such events or transactions, an exemption under the Investment Company Act would provide us up to one year to take steps to avoid becoming classified as an investment company. We expect to take steps to avoid becoming classified as an investment company, but no assurance can be made that we will successfully be able to take the steps necessary to avoid becoming classified as an investment company.

The accompanying condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) related to interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are necessary to present fairly the results for the interim periods. All such adjustments are of a normal and recurring nature.

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of (i) Icahn Enterprises and (ii) the wholly and majority owned subsidiaries of Icahn Enterprises, in addition to variable interest entities (“VIEs”) in which we are the primary beneficiary. In evaluating whether we have a controlling financial interest in entities that we consolidate, we consider the following: (1) for voting interest entities, including limited partnerships and similar entities that are not VIEs, we consolidate these entities in which we own a majority of the voting interests; and (2) for VIEs, we consolidate these entities in which we are the primary beneficiary. See below for a discussion of our VIEs. Kick-out rights, which are the rights underlying the limited partners’ ability to dissolve the limited partnership or otherwise remove the general partners, held through voting interests of partnerships and similar entities that are not VIEs are considered the equivalent of the equity interests of corporations that are not VIEs.

Except for our Investment segment and Holding Company, for equity investments in which we own 50% or less but greater than 20%, we generally account for such investments using the equity method. All other equity investments are accounted for at fair value.

Consolidated Variable Interest Entities

We determined that Icahn Enterprises Holdings is a VIE because it is a limited partnership that lacks both substantive kick-out and participating rights. Although Icahn Enterprises is not the general partner of Icahn Enterprises Holdings, Icahn Enterprises is deemed to be the primary beneficiary of Icahn Enterprises Holdings principally based on

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

its 99% limited partner interest in Icahn Enterprises Holdings, as well as our related party relationship with the general partner, and therefore continues to consolidate Icahn Enterprises Holdings. Icahn Enterprises Holdings and its subsidiaries own substantially all of our assets and liabilities and therefore, the balance sheets of Icahn Enterprises and Icahn Enterprises Holdings are substantially the same.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, cash held at consolidated affiliated partnerships and restricted cash, accounts receivable, due from brokers, accounts payable, accrued expenses and other liabilities and due to brokers are deemed to be reasonable estimates of their fair values because of their short-term nature. See Note 4, “Investments,” and Note 5, “Fair Value Measurements,” for a detailed discussion of our investments and other non-financial assets and/or liabilities.

The fair value of our long-term debt is based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The carrying value and estimated fair value of our long-term debt as of September 30, 2022 was approximately $7.1 billion and $6.4 billion, respectively. The carrying value and estimated fair value of our long-term debt as of December 31, 2021 was approximately $7.7 billion and $7.8 billion, respectively.

Cash Flow

Cash and cash equivalents and restricted cash and restricted cash equivalents on our condensed consolidated statements of cash flows is comprised of (i) cash and cash equivalents and (ii) cash held at consolidated affiliated partnerships and restricted cash.

Cash Held at Consolidated Affiliated Partnerships and Restricted Cash

Our cash held at consolidated affiliated partnerships balance was $3,640 million and $102 million as of September 30, 2022 and December 31, 2021, respectively. Cash held at consolidated affiliated partnerships relates to our Investment segment and consists of cash and cash equivalents held by the Investment Funds that, although not legally restricted, are not available to fund the general liquidity needs of the Investment segment or Icahn Enterprises.

Our restricted cash balance was $1,138 million and $2,013 million as of September 30, 2022 and December 31, 2021, respectively. Restricted cash includes, but is not limited to, our Investment segment’s cash pledged and held for margin requirements on derivative transactions.

Revenue From Contracts With Customers and Contract Balances

Due to the nature of our business, we derive revenue from various sources in various industries. With the exception of all of our Investment segment’s and our Holding Company’s revenues, and our Real Estate segment’s leasing revenue, our revenue is generally derived from contracts with customers in accordance with U.S. GAAP. Such revenue from contracts with customers is included in net sales and other revenues from operations in the condensed consolidated statements of operations, however, our Real Estate and Automotive segment’s leasing revenue, as disclosed in Note 9, “Leases,” is also included in other revenues from operations. Related contract assets are included in accounts receivable, net or other assets and related contract liabilities are included in accrued expenses and other liabilities in the condensed consolidated balance sheets. Our disaggregation of revenue information includes our net sales and other revenues from operations for each of our reporting segments as well as additional disaggregation of revenue information for our Energy and Automotive segments. See Note 12, “Segment Reporting,” for our complete disaggregation of revenue information. In addition, we disclose additional information with respect to revenue from contracts with customers and contract balances for our Energy and Automotive segments below.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Energy

Our Energy segment’s deferred revenue is a contract liability that primarily relates to fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer. Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts requiring prepayment are generally short-term in nature and revenue is recognized at the point in time in which the customer obtains control of the product. Our Energy segment had deferred revenue of $65 million and $87 million as of September 30, 2022 and December 31, 2021, respectively. For the nine months ended September 30, 2022 and 2021, our Energy segment recorded revenue of $86 million and $30 million, respectively, with respect to deferred revenue outstanding as of the beginning of each respective period.

As of September 30, 2022, our Energy segment had $7 million of remaining performance obligations for contracts with an original expected duration of more than one year. Our Energy segment expects to recognize approximately $2 million of these performance obligations as revenue by the end of 2022 and the remaining balance thereafter.

Automotive

Our Automotive segment has deferred revenue with respect to extended warranty plans of $43 million and $42 million at September 30, 2022 and December 31, 2021, respectively, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. For the nine months ended September 30, 2022 and 2021, our Automotive segment recorded revenue of $19 million and $18 million, respectively, with respect to deferred revenue outstanding as of the beginning of each respective period.

Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which amends FASB ASC Topic 848, Reference Rate Reform. By June 30 2023, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”) which is used globally by all types of entities for various types of transactions. As a result, LIBOR could be discontinued, as well as other interest rates used globally. This ASU provides companies with optional expedients for contract modifications under U.S. GAAP, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates. Companies can apply this ASU immediately and will only be available for a limited time (generally through December 31, 2022). We are currently assessing the impact of adopting this new accounting standard and do not expect it to have a material impact on our condensed consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which amends guidance in Topic 820, Fair Value Measurement. The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring the fair value. The guidance also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendment requires the following disclosures for equity securities subject to contractual sale restrictions: the fair value of equity securities subject to contractual sale restrictions; the nature and remaining duration of the restriction(s); and the circumstances that could cause a lapse in the restriction(s) The amended guidance is effective January 1, 2024 on a prospective basis. Early adoption is permitted. We are currently assessing the impact of adopting this new accounting standard on our condensed consolidated financial statements.

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

3. Related Party Transactions

Our second amended and restated agreement of limited partnership expressly permits us to enter into transactions with our general partner or any of its affiliates, including buying or selling properties from or to our general partner and any of its affiliates and borrowing and lending money from or to our general partner and any of its affiliates, subject to limitations contained in our partnership agreement and the Delaware Revised Uniform Limited Partnership Act. The indentures governing our indebtedness contain certain covenants applicable to transactions with affiliates.

Investment Funds

As of September 30, 2022 and December 31, 2021, the total fair market value of investments in the Investment Funds made by Mr. Icahn and his affiliates (excluding us and Brett Icahn) was approximately $5.2 billion and $5.0 billion, respectively, representing approximately 54% of the Investment Funds’ assets under management as of each respective date.

We pay for expenses pertaining to the operation, administration and investment activities of our Investment segment for the benefit of the Investment Funds (including salaries, benefits and rent). Based on an expense-sharing arrangement, certain expenses borne by us are reimbursed by the Investment Funds. For the three months ended September 30, 2022 and 2021, $2 million in each respective period was allocated to the Investment Funds based on this expense-sharing arrangement and for the nine months ended September 30, 2022 and 2021, $8 million and $10 million, was allocated to the Investment Funds based on this expense-sharing arrangement.

Other Related Party Agreements

On October 1, 2020, we entered into a manager agreement with Brett Icahn, the son of Carl C. Icahn, and affiliates of Brett Icahn. Under the manager agreement, Brett Icahn serves as the portfolio manager of a designated portfolio of assets within the Investment Funds over a seven-year term, subject to veto rights by our Investment segment and Carl C. Icahn. On May 5, 2022, we entered into an amendment to the manager agreement, which allows the Investment Funds to add, from time to time, two additional separately tracked portfolios, in addition to the existing portfolios, which will not be subject to the manager agreement. Additionally, Brett Icahn provides certain other services, at our request, which may entail research, analysis and advice with respect to a separate designated portfolio of assets within the Investment Funds. Subject to the terms of the manager agreement, at the end of the seven-year term, Brett Icahn will be entitled to receive a one-time lump sum payment as described in and computed pursuant to the manager agreement. Brett Icahn will not be entitled to receive from us any other compensation (including any salary or bonus) in respect of the services he is to provide under the manager agreement other than restricted depositary units granted under a restricted unit agreement. In accordance with the manager agreement, Brett Icahn will co-invest with the Investment Funds in certain positions, will make cash contributions to the Investment Funds in order to fund such co-investments and will have a special limited partnership interest in the Investment Funds through which the profit and loss attributable to such co-investments will be allocated to him. During the nine months ended September 30 2022, Brett Icahn had net redemptions of $16 million in accordance with the manager agreement and in the nine months ended September 30, 2021 he contributed $68 million. As of September 30, 2022 and December 31, 2021 he had investments in the Investment Funds with a total fair market value of $48 million and $93 million, respectively. We also entered into a guaranty agreement with an affiliate of Brett Icahn, pursuant to which we guaranteed the payment of certain amounts required to be distributed by the Investment Funds to such affiliate pursuant to the terms and conditions of the manager agreement.

4. Investments

Investments

Investments and securities sold, not yet purchased consist of equities, bonds, bank debt and other corporate obligations, all of which are reported at fair value in our condensed consolidated balance sheets. In addition, our

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Investment segment has certain derivative transactions which are discussed in Note 6, “Financial Instruments.” The carrying value and detail by security type, including business sector for equity securities, with respect to investments and securities sold, not yet purchased held by our Investment segment consist of the following:


	September 30,		December 31,
	2022		2021

	(in millions)
Assets
Investments:
Equity securities:
Communications	$	317	$	352
Consumer, cyclical		666		1,281
Energy		1,067		3,184
Utilities		1,163		992
Healthcare		341		1,009
Technology		634		931
Materials		143		194
Industrial		418		895
		4,749		8,838
Corporate debt securities		37		114
	$	4,786	$	8,952
Liabilities
Securities sold, not yet purchased, at fair value:
Equity securities:
Consumer, non-cyclical	$	753	$	—
Consumer, cyclical		499		848
Energy		2,180		2,028
Utilities		818		659
Healthcare		319		1,049
Materials		372		365
Industrial