10-K: Icahn Enterprises L.P. Reports Full Year 2024 Results

Icahn Enterprises L.P. files its annual report on Form 10-K, detailing its financial performance and business activities for the year ended December 31, 2024.

Summary

• Icahn Enterprises L.P., a diversified holding company, released its Form 10-K for the fiscal year ended December 31, 2024.
• The company owns subsidiaries engaged in Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion, and Pharma.
• As of December 31, 2024, Icahn Enterprises had investments in Investment Funds with a fair market value of approximately $2.7 billion.
• CVR Energy, the Energy segment, had a combined refining capacity of approximately 206,500 barrels per day.
• The Automotive segment includes approximately 910 company-operated stores and 738 franchise locations.
• A subsidiary of Icahn Automotive, Auto Plus, filed for Chapter 11 bankruptcy on January 31, 2023, and was deconsolidated.
• Viskase, the Food Packaging segment, derived approximately 68% of its net sales from customers outside the United States in 2024.
• The company had 37 employees at the Holding Company and Investment segment, and approximately 15,000 employees across its other operating segments.
• The aggregate market value of Icahn Enterprises depositary units held by non-affiliates as of June 30, 2024 was $1.1 billion.
• As of February 25, 2025, there were 522,736,315 depositary units outstanding.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the company's diversified portfolio and strategic initiatives, it also acknowledges significant losses and challenges, resulting in a neutral to slightly negative outlook.

Positives

• The company has a diversified portfolio of businesses across multiple sectors.
• The company is actively managing its debt through repurchases and issuances.
• The company is exploring strategic transactions to enhance the value of its Energy segment.
• The company is focused on improving operational efficiency and profitability in its Automotive segment.
• The company is expanding its Pharma segment by selling certain products to wholesalers and pharmacies in Europe.
• The company has a strong balance sheet and ample liquidity from its operating subsidiaries.

Negatives

• The company experienced a net loss from investment activities.
• The company's Energy segment experienced a decrease in net sales and gross profit.
• The company's Automotive segment experienced a decrease in net sales and other revenues from operations.
• The company's Real Estate segment experienced a decrease in net sales.
• Auto Plus, a subsidiary of Icahn Automotive, filed for Chapter 11 bankruptcy on January 31, 2023, leading to its deconsolidation and a non-cash charge of $246 million.
• The company is subject to the pension liabilities of its affiliates.
• The company has become subject to, and may in the future be subject to, short selling strategies driving down the market price of our depositary units and increasing the volatility of the trading market for our depositary units, as well as regulatory investigations and litigation.

Risks

• The company's general partner and its control person have significant influence over the company.
• The company is subject to the risk of becoming an investment company.
• The company may become taxable as a corporation if it is no longer treated as a partnership for U.S. federal income tax purposes.
• The company's investments may be subject to significant uncertainties.
• The company's consolidated operating subsidiaries are subject to various risks, including changes in regulations, operational disruptions, and environmental liabilities.
• The company's Energy segment businesses are cyclical and highly volatile.
• The company is subject to cybersecurity and other technological risks.
• The COVID-19 pandemic had, and any future pandemics may have, a material adverse impact on our and our subsidiaries operations and financial performance, as well as on the operations and financial performance of many of the customers and suppliers in our operating segments.
• Global economic conditions may have adverse impacts on our businesses and financial condition.
• An increase in inflation could have adverse effects on our results of operations.

Future Outlook

The company sees a favorable opportunity to follow an activist strategy that centers on the purchase of target stock and the subsequent removal of any barriers that might interfere with a friendly purchase offer from a strong buyer.

Management Comments

• Mr. Icahn believes that the current environment continues to be conducive to activism.
• We often find investment opportunities when companies execute value destructive acquisitions or fail to unlock their own hidden jewels through separation transactions.
• It is our belief that our strategy will continue to produce strong results into the future.
• We believe that the strong cash flow and asset coverage from our operating subsidiaries will allow us to maintain a strong balance sheet and ample liquidity.

Industry Context

The document provides insights into various industries in which Icahn Enterprises operates, including energy, automotive, food packaging, and real estate, reflecting the competitive landscape and market trends within each sector.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards for all segments.
• However, it mentions that the automotive aftermarket industry is in the mature stage of its life cycle, indicating an understanding of industry benchmarks.
• CVR Energy's refining capacity is mentioned, providing a metric for comparison against other refineries.
• The document mentions several companies in which Icahn Enterprises has significant positions, including Southwest Gas Holdings, Inc. (SWX), American Electric Power Company, Inc. (AEP), Caesars Entertainment Inc. (CZR), International Flavors and Fragrances Inc. (IFF) and Bausch Health Companies, Inc. (BHC).

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to litigation from time to time in the ordinary course of its business.
• CVR Energy and certain of its affiliates are engaged in two lawsuits relating to settlement of the consolidated lawsuits filed by purported former unitholders of CVR Refining on behalf of themselves and an alleged class of similarly situated unitholders against CVR Energy and certain of its affiliates including Mr. Icahn relating to CVR Energys exercise of the call option under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refinings general partner including the Stipulation, Compromise and Release (the Settlement), which Settlement was entered into in August 2022 and had no further impact on CVR Energys financial position or results of operations beyond the amount recognized within Other (expense) income, net in the Consolidated Statements of Operations for the year ended December 31, 2022.
• In connection with mediation conducted in September 2024, Exxon Mobil Corporation (XOM) formally demanded, pursuant to a guaranty claimed by XOM to have been issued in its favor in 1993 by a subsidiary of CVR Energy (the Alleged Guaranty), that a subsidiary of CVR Energy defend and indemnify it against claims asserted by various property owners in Louisiana alleging contamination from historic well operations relating to oil and gas leases in Louisiana sold by XOM in 1993 (the LA Leases).
• Icahn Enterprises L.P. was contacted on May 3, 2023 by the U.S. Attorneys office for the Southern District of New York and on June 21, 2023 by the staff of the Division of Enforcement of the U.S. Securities and Exchange Commission (the SEC), seeking production of information relating to the Company and certain of its affiliates corporate governance, capitalization, securities offerings, disclosure, dividends, valuation, marketing materials, due diligence and other materials.
• A derivative complaint was filed in the U.S. District Court for the Southern District of Florida, naming the Companys general partner, its directors, and certain current and former officers as defendants, and the Company as a nominal defendant, alleging breaches of fiduciary duties with respect to the Companys disclosure, Patrick Pickney v. Icahn Enterprises G.P. Inc. Case No. 1:23-cv-22932-KMW (S.D. Fl.).
• In addition, an action to compel inspection of our books and records was filed on November 2, 2023 in the Court of Chancery of the State of Delaware, Bruno v. Icahn Enterprises, L.P. et al., Case No. 2023-1170-SEM.

Related Party Transactions

• The company has engaged, and in the future may engage, in transactions with its affiliates.
• We have invested and may in the future invest in entities in which Mr. Icahn also invests.
• We also have purchased and may in the future purchase entities or investments from him or his affiliates.
• We are considering, with CVR Energy, Inc. (CVR Energy), potential strategic transactions available to CVR Energy and its subsidiaries, which may include the acquisition of additional entities, assets or businesses, including the acquisition of material amounts of refining assets through negotiated mergers and/or stock or asset purchase agreements by CVR Energy or its subsidiaries, and/or strategic options involving CVR Partners, LP, a controlled subsidiary of CVR Energy (CVR Partners).

Stakeholder Impact

• The company's performance and strategic decisions can impact key stakeholders such as shareholders, employees, customers, suppliers, and creditors.
• The company's ability to pay distributions to unitholders is affected by various factors, including cash flow, capital requirements, and financing arrangements.
• The company's compliance with environmental regulations and labor agreements can impact its operations and relationships with stakeholders.

Next Steps

• The company is considering potential strategic transactions for CVR Energy.
• Viskase is considering a potential business combination transaction involving Enzon Pharmaceuticals, Inc.
• The company will continue to implement initiatives to improve the performance of its Automotive segment.
• The company will continue to evaluate and manage its investments in the Investment Funds.

Key Dates