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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 June 30, 2023

OR

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 August 3, 2023, there were 393,458,414 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

37

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

52

Item 4.

Controls and Procedures

52

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

54

Item 1A.

Risk Factors

54

Item 5.

Other Information

57

Item 6.

Exhibits

58

i

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, 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; 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, or be taxed as a corporation; risks relating to short sellers and associated litigation and regulatory inquires; risks related to our general partner and controlling unitholder; 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, unfavorable refining margin (crack spread), interrupted access to pipelines, significant fluctuations in nitrogen fertilizer demand in the agricultural industry and seasonality of results; the success of a spin-off of the fertilizer business including risks related to any decision to cease exploration of a spin-off; risks related to our automotive activities and exposure to adverse conditions in the automotive industry, including as a result of the COVID-19 pandemic and the Chapter 11 filing of our automotive parts subsidiary; 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, 2022 and below in Item 1A. Risk Factors, of Part II of this Quarterly Report on Form 10-Q. 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.

1

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

June 30, 

December 31, 

    

2023

    

2022

(in millions, except unit amounts)

ASSETS

Cash and cash equivalents

$

2,488

$

2,337

Cash held at consolidated affiliated partnerships and restricted cash

 

2,598

 

2,549

Investments

 

4,937

 

6,809

Due from brokers

 

4,219

 

7,051

Accounts receivable, net

 

495

 

606

Related party notes receivable

82

Inventories, net

 

1,015

 

1,531

Property, plant and equipment, net

 

3,959

 

4,038

Deferred tax asset

184

127

Derivative assets, net

344

805

Goodwill

 

288

 

288

Intangible assets, net

 

502

 

533

Other assets

 

1,103

 

1,240

Total Assets

$

22,214

$

27,914

LIABILITIES AND EQUITY

 

  

 

  

Accounts payable

$

723

$

870

Accrued expenses and other liabilities

 

1,878

 

1,981

Deferred tax liabilities

 

354

 

338

Derivative liabilities, net

 

911

 

691

Securities sold, not yet purchased, at fair value

 

3,370

 

6,495

Due to brokers

 

713

 

885

Debt

 

7,078

 

7,096

Total liabilities

 

15,027

 

18,356

Commitments and contingencies (Note 18)

 

  

 

  

Equity:

 

  

 

  

Limited partners: Depositary units: 393,458,414 units issued and outstanding at June 30, 2023 and 353,572,182 units issued and outstanding at December 31, 2022

 

4,153

 

4,647

General partner

 

(757)

 

(747)

Equity attributable to Icahn Enterprises

 

3,396

 

3,900

Equity attributable to non-controlling interests

 

3,791

 

5,658

Total equity

 

7,187

 

9,558

Total Liabilities and Equity

$

22,214

$

27,914

See notes to condensed consolidated financial statements.

2

Table of Contents

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended June 30, 

Six Months Ended June 30, 

2023

    

2022

    

2023

    

2022

(in millions, except per unit amounts)

Revenues:

Net sales

$

2,684

$

3,796

$

5,442

$

6,764

Other revenues from operations

 

198

 

197

 

385

 

365

Net (loss) gain from investment activities

 

(500)

 

(442)

 

(943)

 

497

Interest and dividend income

 

167

 

50

 

338

 

92

Other loss, net

 

(9)

 

(98)

 

(41)

 

(122)

 

2,540

 

3,503

 

5,181

 

7,596

Expenses:

Cost of goods sold

 

2,310

 

3,174

 

4,570

 

5,712

Other expenses from operations

 

160

 

148

 

318

 

285

Selling, general and administrative

 

215

 

315

 

444

 

616

Credit loss on related party note receivable

116

116

Loss on deconsolidation of subsidiary

 

20

 

 

246

 

Interest expense

 

136

 

151

 

278

 

285

 

2,957

 

3,788

 

5,972

 

6,898

(Loss) income before income tax (expense) benefit

 

(417)

 

(285)

 

(791)

 

698

Income tax (expense) benefit

 

(2)

 

(2)

 

14

 

(100)

Net (loss) income

 

(419)

 

(287)

 

(777)

 

598

Less: net (loss) income attributable to non-controlling interests

 

(150)

 

(159)

 

(238)

 

403

Net (loss) income attributable to Icahn Enterprises

$

(269)

$

(128)

$

(539)

$

195

Net (loss) income attributable to Icahn Enterprises allocated to:

Limited partners

$

(264)

$

(125)

$

(528)

$

191

General partner

 

(5)

 

(3)

 

(11)

 

4

$

(269)

$

(128)

$

(539)

$

195

Basic and Diluted (loss) income per LP unit

$

(0.72)

$

(0.41)

$

(1.46)

$

0.64

Basic and Diluted weighted average LP units outstanding

 

367

 

306

 

361

 

300

Distributions declared per LP unit

$

2.00

$

2.00

$

4.00

$

4.00

See notes to condensed consolidated financial statements.

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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

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

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2023

    

2022

    

2023

    

2022

(in millions)

Net (loss) income

$

(419)

$

(287)

$

(777)

$

598

Other comprehensive income, net of tax:

 

 

 

 

Translation adjustments

 

1

 

 

5

 

Post-retirement benefits and other

 

2

 

(7)

 

2

 

(7)

Other comprehensive income (loss), net of tax

 

3

 

(7)

 

7

 

(7)

Comprehensive (loss) income

 

(416)

 

(294)

 

(770)

 

591

Less: Comprehensive (loss) income attributable to non-controlling interests

 

(150)

 

(159)

 

(238)

 

403

Comprehensive (loss) income attributable to Icahn Enterprises

$

(266)

$

(135)

$

(532)

$

188

Comprehensive (loss) income attributable to Icahn Enterprises allocated to:

 

  

 

 

 

Limited partners

$

(261)

$

(132)

$

(521)

$

184

General partner

 

(5)

 

(3)

 

(11)

 

4

$

(266)

$

(135)

$

(532)

$

188

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

    

Interests

    

Total Equity

(in millions)

Balance, December 31, 2022

$

(747)

$

4,647

$

3,900

$

5,658

$

9,558

Net loss

(5)

 

(265)

(270)

(88)

(358)

Other comprehensive income

 

 

4

 

4

 

 

4

Partnership distributions payable

 

(15)

 

(709)

 

(724)

 

 

(724)

Partnership contributions

 

4

 

175

 

179

 

 

179

Investment segment distributions to non-controlling interests

 

 

 

 

(80)

 

(80)

Dividends and distributions to non-controlling interests in subsidiaries

 

 

 

 

(85)

 

(85)

Changes in subsidiary equity and other

 

 

2

 

2

 

 

2

Balance, March 31, 2023

 

(763)

 

3,854

 

3,091

 

5,405

 

8,496

Net loss

 

(6)

 

(263)

 

(269)

 

(150)

 

(419)

Other comprehensive income

 

3

 

3

 

 

3

Partnership distributions payable reversal

15

709

724

724

Partnership distributions

 

(3)

 

(152)

 

(155)

 

 

(155)

Investment segment distributions to non-controlling interests

 

 

 

 

(1,380)

 

(1,380)

Dividends and distributions to non-controlling interests in subsidiaries

 

 

 

 

(84)

 

(84)

Changes in subsidiary equity and other

 

 

2

 

2

 

 

2

Balance, June 30, 2023

 

$

(757)

 

$

4,153

 

$

3,396

 

$

3,791

 

$

7,187

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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

See notes to condensed consolidated financial statements.

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ICAHN ENTERPRISES L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 

    

2023

    

2022

(in millions)

Cash flows from operating activities:

Net (loss) income

$

(777)

    

$

598

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

Net gain (loss) from securities transactions

 

310

 

(335)

Purchases of securities

 

(446)

 

(566)

Proceeds from sales of securities

 

2,084

 

3,979

Payments to cover securities sold, not yet purchased

 

(3,618)

 

(2,597)

Proceeds from securities sold, not yet purchased

 

444

 

1,423

Changes in receivables and payables relating to securities transactions

 

2,774

 

15

Changes in derivative assets and liabilities

 

681

 

(249)

Gain on disposition of assets, net

 

(3)

 

(2)

Depreciation and amortization

 

251

 

249

Loss on deconsolidation of subsidiary

246

Deferred taxes

 

(88)

 

(18)

Other, net

 

9

 

45

Changes in other operating assets and liabilities

 

110

 

87

Net cash provided by operating activities

 

1,977

 

2,629

Cash flows from investing activities:

 

  

 

  

Capital expenditures

 

(131)

 

(154)

Turnaround expenditures

(50)

(68)

Proceeds from sale of investments

 

 

152

Proceeds from disposition of businesses and assets

 

 

2

Other, net

 

25

 

(1)

Net cash used in investing activities

 

(156)

 

(69)

Cash flows from financing activities:

 

  

 

  

Investment segment contributions from non-controlling interests

 

 

5

Investment segment distributions to non-controlling interests

(1,462)

Partnership contributions

 

185

 

398

Partnership distributions

 

(155)

 

(102)

Dividends and distributions to non-controlling interests in subsidiaries

 

(170)

 

(62)

Repayments of Holding Company senior unsecured notes

 

 

(500)

Proceeds from subsidiary borrowings

 

32

 

66

Repayments of subsidiary borrowings

 

(48)

 

(122)

Other, net

 

(3)

 

(16)

Net cash used in financing activities

 

(1,621)

 

(333)

Effect of exchange rate changes on cash and cash equivalents and restricted cash and restricted cash equivalents

 

 

6

Net increase in cash and cash equivalents and restricted cash and restricted cash equivalents

 

200

 

2,233

Cash and cash equivalents and restricted cash and restricted cash equivalents, beginning of period

 

4,886

 

4,436

Cash and cash equivalents and restricted cash and restricted cash equivalents, end of period

$

5,086

$

6,669

See notes to condensed consolidated financial statements.

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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 June 30, 2023, representing an aggregate 1.99% general partner interest in Icahn Enterprises Holdings and us. Mr. Icahn and his affiliates owned approximately 85% of our outstanding depositary units as of June 30, 2023.

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. 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 14, “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 $3.8 billion and $4.2 billion as of June 30, 2023 and December 31, 2022, 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 marketing businesses as well as in the nitrogen fertilizer manufacturing businesses through its holdings in CVR Partners, LP, a publicly traded limited partnership (“CVR Partners”). CVR Energy 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 holds 100% of the general partner interest and approximately 37% of the outstanding common units of CVR Partners as of June 30, 2023. As of June 30, 2023, we owned approximately 71% of the total outstanding common stock of CVR Energy.

On November 21, 2022, CVR Energy’s board of directors had authorized its management to explore a potential spin-off of CVR Energy’s interest in the nitrogen fertilizer business into a newly created and separately traded public company. On June 13, 2023, CVR Energy announced that it has concluded such process and that its board of directors has determined not to pursue the potential spin-off at this time.

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Automotive

We conduct our Automotive segment through our wholly owned subsidiary, Icahn Automotive Group LLC (“Icahn Automotive”) and our wholly owned subsidiary, AEP PLC LLC (“AEP PLC”). Icahn Automotive is engaged in providing a full range of automotive repair and maintenance services (“automotive services”) to its customers as well as a retail business which consists of sales of automotive aftermarket parts and retailed merchandise (“aftermarket parts”).

On January 31, 2023, a subsidiary of Icahn Automotive, IEH Auto Parts Holding LLC and its subsidiaries (“Auto Plus”), an aftermarket parts distributor held within our Automotive segment, filed voluntary petitions in the United States Bankruptcy Court. As a result of Auto Plus’s filings for bankruptcy protections on January 31, 2023, we no longer controlled the operations of Auto Plus, therefore, we deconsolidated Auto Plus as of January 31, 2023. See Note 3, “Subsidiary Bankruptcy and Deconsolidation”, for a detailed discussion of the Auto Plus bankruptcy and deconsolidation.

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 June 30, 2023, we owned approximately 90% 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.

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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, 2022. 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. For entities over which the Company does not have significant influence, the Company accounts for its equity investment at fair value, except for the Company’s equity interest in Auto Plus.

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 such 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 its 99% limited partner interest in Icahn Enterprises Holdings, as well as our related party relationship with the general

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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.

During the quarter ended June 30, 2023, we established a captive insurance program to supplement the insurance coverage of the officers, directors, employees and agents of the Company, its subsidiaries and our general partner. We hold assets in a protected cell, which we are the primary beneficiary of, and therefore consolidate the protected cell. The total assets related to the protected cell were $100 million at June 30, 2023 and are included in restricted cash in the condensed consolidated balance sheet.

Reclassifications

Certain reclassifications from the prior year presentation have been made to conform to the current year presentation, which did not have an impact on previously reported net income and equity and are not deemed material.

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 5, “Investments,” and Note 6, “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 June 30, 2023 was approximately $7.1 billion and $6.3 billion, respectively. The carrying value and estimated fair value of our long-term debt as of December 31, 2022 was approximately $7.1 billion and $6.6 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 $367 million and $1,019 million as of June 30, 2023 and December 31, 2022, 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 $2,231 million and $1,530 million as of June 30, 2023 and December 31, 2022, respectively. Restricted cash includes, but is not limited to, our Investment segment’s cash pledged and held for margin requirements on derivative transactions and cash held related our captive insurance program.

Long-Lived Assets

The company reviews long-lived assets for impairment when impairment indcators exist. An evaluation of impairment consists of reviewing the carrying value of a long-lived asset for recoverability. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to esimtaed undiscounted future net cash flows expected to be generated by the asset. If the carrying value of the long-lived asset is not determined to be recoverable, a fair value assessment if performed.

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During the second quarter of 2023, a significant tenant of a commercial high-rise property, within our Real Estate segment, was notified of default for non-payment. The tenant was unable to cure the default status and the lease was terminated. We considered this default, along with other facts and circumstances, a triggering event for potential impairment and we assessed the carrying value of this long-lived asset for recoverability using the undiscounted cash flow method during the second quarter of 2023. We determined the total undiscounted cash flows of the property exceeded its carrying value and therefore, no impairment is required.

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 and Automotive segments’ 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 segments’ leasing revenue, as disclosed in Note 11, “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 14, “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.

Energy

Our Energy segment’s deferred revenue is a contract liability that includes 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. In addition, it includes deferred revenue associated with agreements entered into with third-party investors that has allowed our Energy segment to monetize certain tax credits available under Section 45Q of the Internal Revenue Code (the “45Q Transaction”). Our Energy segment had deferred revenue of $44 million and $48 million as of June 30, 2023 and December 31, 2022, respectively. For the six months ended June 30, 2023 and 2022, our Energy segment recorded revenue of $46 million and $84 million, respectively, with respect to deferred revenue outstanding as of the beginning of each respective period.

As of June 30, 2023, our Energy segment had $2 million of remaining performance obligations for contracts with an original expected duration of more than one year. Our Energy segment expects to recognize a majority of these performance obligations as revenue by the end of 2023 and the remaining nominal balance in 2024.

Automotive

Our Automotive segment had deferred revenue with respect to extended warranty plans of $44 million at each of June 30, 2023 and December 31, 2022, respectively, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets. For the six months ended June 30, 2023 and 2022, our Automotive segment recorded revenue of $13 million and $12 million, respectively, with respect to deferred revenue outstanding as of the beginning of each respective period.

Adoption of New 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

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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. We adopted this ASU effective January 1, 2023. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities- Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations to require entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of such programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations of where in the financial statements outstanding amounts are present. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. The amendments are effective in periods beginning after December 15, 2022, except that the amendments to disclose a rollforward of obligations outstanding will be effective beginning after December 15, 2023. We early adopted provisions of this ASU effective January 1, 2023, with the exception of the amendment on rollforward information, which will be adopted in the fourth quarter of 2023. The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

Recently Issued Accounting Standards

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.

3. Subsidiary Bankruptcy and Deconsolidation

On January 31, 2023, a subsidiary of Icahn Automotive, IEH Auto Parts Holding LLC and its subsidiaries, (collectively, “Auto Plus”), an aftermarket parts distributor held within our Automotive segment, filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code. On May 2, 2023, the Bankruptcy Court approved a global settlement in the Chapter 11 Cases between Auto Plus, its non-Auto Plus affiliates, and the Official Committee of Unsecured Creditors appointed in the Chapter 11 Cases (the "Committee”) that provides for a guaranteed recovery to unsecured creditors, the payment of all administrative and priority claims in the Chapter 11 Cases, and the resolution of all disputes between Auto Plus, its non-Auto Plus affiliates, and the Committee. On May 19, 2023, the Bankruptcy Court approved five sales of Auto Plus’ assets to five different bidders pursuant to Section 363 of the Bankruptcy Code, comprising a significant majority of Auto Plus’ total assets (the “363 Sales”). A wholly owned subsidiary of IEP, AEP PLC, was the buyer for one of the 363 Sales, pursuant to a credit bid of $10 million for a portion of its senior secured debtor-in-possession loan to Auto Plus. The last of the 363 sales closed on June 12, 2023. The proceeds of the 363 Sales will be used to satisfy obligations to Auto Plus’ creditors. On June 16, 2023, the Bankruptcy Court entered an order approving Auto Plus’ Third Amended Combined Disclosure Statement and Joint Plan of Liquidation (the “Bankruptcy Plan”).  The Bankruptcy Plan provides for the orderly liquidation of Auto Plus and distribution of its assets. As of the date hereof, the effective date of the Bankruptcy Plan had not yet occurred.

As a result of the filing of the Chapter 11 Cases, the Company has determined that it no longer controls Auto Plus under the criteria set out in Statement of Financial Accounting Standards (“FASB”) ASC Topic 810, “Consolidation” and has deconsolidated its investment effective January 31, 2023. In order to deconsolidate Auto Plus, we removed the carrying values of the assets and liabilities of Auto Plus as of January 31, 2023 and recorded our investment in Auto Plus at $0 resulting in a non-cash charge of $246 million during the six months ended June 30, 2023.

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4.  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 June 30, 2023 and December 31, 2022, 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 $3.0 billion and $4.9 billion, respectively, representing approximately 44% and 54% of the Investment Funds’ assets under management as of each respective date. During the six months ended June 30, 2023, Mr. Icahn and his affiliates (excluding us and Brett Icahn) had redemptions of $1,452 million from the Investment Funds. There were no redemptions in the six months ended June 30, 2022.

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 six months ended June 30, 2023 and 2022, $7 million and $6 million, respectively, was allocated to the Investment Funds based on this expense-sharing arrangement.

Auto Plus and AEP PLC

As discussed in Note 3. “Subsidiary Bankruptcy and Deconsolidation,” Auto Plus was deconsolidated as of January 31, 2023. Subsequent to January 31, 2023, Auto Plus had certain transactions with entities within our Automotive and Real Estate segments. Agreements and transactions include (i) lease agreements between Auto Plus and entities in the Automotive segment in which Auto Plus is the lessee, (ii) lease agreements between Auto Plus and entities in the Automotive segment in which Auto Plus is the lessor, (iii) auto parts purchases by entities in the Automotive segment from Auto Plus, (iv) auto parts sales from entities within the Automotive segment to Auto Plus, and (v) lease agreements between entities in the Real Estate segment and Auto Plus in which Auto Plus is the lessee.

For the five months from the date of deconsolidation of January 31, 2023 through June 30, 2023, the total lease revenues of entities within the Automotive segment from leases with Auto Plus was $3 million. Total inventory purchases of entities within the Automotive segment from Auto Plus were $4 million and total net trade accounts payable due to Auto Plus as of June 30, 2023 was 2 million.

For the five months from the date of deconsolidation of January 31, 2023 through June 30, 2023, the total lease revenues of entities within the Real Estate segment from Auto Plus were $3 million.

Note Receivable from Auto Plus

In connection with the Auto Plus bankruptcy filing, we entered into a priming, senior secured, super priority debtor-in-possession credit facility with Auto Plus (the “DIP Credit Facility”) on January 31, 2023, under which (i) we agreed to provide new loans in an aggregate amount of up to $75 million and (ii) subject to final approval of the DIP Credit Facility by the Bankruptcy Court, all the loans under our pre-petition credit facility with Auto Plus would be rolled-up and converted into loans under the DIP Credit Facility. On May 2, 2023, we converted and rolled up our related party note receivable with our existing loans under the DIP Credit Facility. In the second quarter of 2023, we estimated our cash to be collected for the repayment of the note receivable to be $82 million, resulting in a write-off of $116 million during the six months ended June 30, 2023.

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AEP PLC

In connection with the Auto Plus auction, our wholly owned subsidiary AEP PLC, acquired $10 million of assets mostly comprised of aftermarket parts inventory during the second quarter of 2023. The transaction was considered an asset acquisition, as AEP PLC does not meet the definition of a business defined in FASB ASC Topic 805. The results of AEP PLC are consolidated within our Automotive segment at June 30, 2023 and were not material.

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. Brett Icahn had net redemptions of $8 million in the six months ended June 30, 2023 and contributed $3 million in accordance with the manager agreement in the six months ended June 30, 2022. As of June 30, 2023 and December 31, 2022 Brett Icahn had investments in the Investment Funds with a total fair market value of $39 million and $50 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.

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5.  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 Investment segment has certain derivative transactions which are discussed in Note 7, “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:

June 30, 

December 31, 

    

2023

    

2022

(in millions)

Assets

Investments:

 

  

 

  

Equity securities:

 

  

 

  

Communications

$

$

199

Consumer, cyclical

 

504

 

692

Energy

 

689

 

909

Utilities

 

1,238

 

1,205

Healthcare

 

474

 

320

Technology

 

639

 

655

Materials

 

142

 

153

Industrial

 

 

486

 

3,686

 

4,619

Debt Securities:

Financials

1,001

1,958

Real Estate

134

131

Communications

11

 

1,135

 

2,100

$

4,821

$

6,719

Liabilities

 

  

 

  

Securities sold, not yet purchased, at fair value:

 

  

 

  

Equity securities:

 

  

 

  

Consumer, non-cyclical

$

116

$

1,006

Consumer, cyclical

352

Energy

 

1,794

 

2,690

Utilities

 

563

 

813

Healthcare

 

 

387

Materials

 

579

 

598

Industrial

146

480

3,198

6,326

Debt securities:

Materials

172

169

$

3,370

$

6,495

The portion of unrealized (losses) and gains that relates to securities still held by our Investment segment, primarily equity securities, was $(69) million and $(894) million for the three months ended June 30, 2023 and 2022, respectively, and $(124) million and $(694) million for the six months ended June 30,2023 and 2022, respectively.

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Other Segments and Holding Company

With the exception of certain equity method investments at our operating subsidiaries and our Holding Company disclosed in the table below, our investments are measured at fair value in our condensed consolidated balance sheets. The carrying value of investments held by our other segments and our Holding Company consist of the following:

June 30, 

December 31, 

    

2023

    

2022

(in millions)

Equity method investments

$

102

$

76

Other investments measured at fair value

 

14

 

14

$

116

$

90

The portion of unrealized gains and (losses) that relates to equity securities still held by our other segments and Holding Company was zero and $3 million for each of the three months ended June 30, 2023 and 2022, respectively, and zero and $61 million for the six months ended June 30, 2023 and 2022, respectively.

6.  Fair Value Measurements

U.S. GAAP requires enhanced disclosures about assets and liabilities that are measured and reported at fair value and has established a hierarchal disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of, and the characteristics specific to, the assets and liabilities. Assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 – Quoted prices are available in active markets for identical assets and liabilities as of the reporting date.

Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies where all significant inputs are observable. The inputs and assumptions of our Level 2 assets and liabilities are derived from market observable sources including reported trades, broker/dealer quotes and other pertinent data.

Level 3 – Pricing inputs are unobservable for the assets and liabilities and include situations where there is little, if any, market activity for the assets and liabilities. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the assets and liabilities. Significant transfers, if any, between the levels within the fair value hierarchy are recognized at the beginning of the reporting period when changes in circumstances require such transfers.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the valuation of our assets and liabilities by the above fair value hierarchy levels measured on a recurring basis:

June 30, 2023

December 31, 2022

    

Level 1

    

Level 2

    

Level 3

    

Total

    

Level 1

    

Level 2

    

Level 3

    

Total

(in millions)

Assets

Investments (Note 5)

$

3,648

$

1,134

$