Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Icahn Enterprises LP (NASDAQ:IEP) maintained a strong liquidity position with $1.4 billion in cash and cash equivalents at the holding company and an additional $915 million at the funds.
• The real estate segment saw a significant increase of $292 million due to property sales and fair value adjustments.
• The board maintained the quarterly distribution at $0.50 per depositary unit, reflecting confidence in cash flow stability.
• The energy segment's renewable margin improved significantly, with a positive margin per vegetable oil throughput gallon compared to a loss in the prior year.
• The company has a robust activist strategy, leveraging its brand and history to drive shareholder value through proxy contests and board collaborations.

Negative Points

• Net Asset Value (NAV) decreased by $223 million from the third quarter of 2024, primarily due to a decline in CVR Energy.
• The energy segment's EBITA decreased significantly from $204 million in Q4 2023 to $99 million in Q4 2024, driven by reduced throughput and lower crack spreads.
• The automotive segment continues to underperform due to previous strategic missteps, with expectations for normalization only by the second half of 2025.
• Investment funds were down approximately 1.6% for the quarter, with significant declines in investments like Caesars.
• Real estate adjusted EBITA decreased by $5 million compared to the prior year, driven by reduced sales of single-family homes.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with IEP.

Q: Can you provide details on the hedge fund's net notional long position and how it changed from the third quarter? A: The hedge fund ended with a net notional long of 22%, or 35% excluding energy hedges. At the end of the third quarter, the fund was net short by 2%. The change was due to opportunistic adjustments in refining hedges based on crack spread movements. (Respondent: Andrew Tino, CEO)

Q: What caused the significant adjustment to the indicative net asset value in the real estate segment? A: The adjustment was due to an agreement to sell certain properties at prices far exceeding their book value. This led us to mark these properties to the anticipated sales price and obtain appraisals for the remaining assets, resulting in a $300 million increase quarter over quarter. (Respondent: Ted Papapostolo, CFO)

Q: What was the composition of the properties that led to the fair value jump in the real estate segment? A: The properties included in the sale agreement contributed approximately $200 million to the increase, with the rest of the portfolio adding about $90 million. The properties were previously discussed in our last call. (Respondent: Ted Papapostolo, CFO)

Q: Can you elaborate on the automotive segment's performance and future outlook? A: The automotive segment continues to face challenges due to past issues. A new permanent CEO has been appointed to implement strategies to address these challenges, with expectations for normalization by the second half of 2025. (Respondent: Ted Papapostolo, CFO)

Q: What is the company's focus moving forward, and how does it plan to leverage its strengths? A: Icahn Enterprises remains focused on its activism strategy, leveraging its brand and history in proxy contests. With a strong balance sheet and liquidity, the company is positioned to tender for entire businesses, aiming to drive shareholder value through its activist efforts. (Respondent: Andrew Tino, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.