Icahn Enterprises L.P. Q3 2026 Earnings Webcast - ICAHN ENTERPRISES LP

Financial Performance:

• Reported a net loss of $225 million ($0.31 per unit) for Q3 2026, compared to net income of $287 million ($0.49 per unit) in Q3 2025.
• Adjusted EBITDA loss attributable to IEP was $214 million, reversing a $75 million profit in the prior year quarter.
• Investment funds delivered a negative return of 5.5% excluding refining hedges, but a negative return of 31.3% including hedges; net short notional exposure reduced from 30% to 7%.
• Energy segment adjusted EBITDA surged to $404 million from $98 million in the prior year, driven by record crack spreads and operations at the Windywood Refinery.
• Automotive segment generated $645 million in proceeds from the sale of Pep Boys, recognized a $215 million pre-tax gain, and reported a $175 million revenue decline due to the divestiture.
• Holding company liquidity stood at $2.3 billion (cash and fund investments), while subsidiaries held $582 million in cash and revolver availability.

Guidance and Future Outlook:

• NAV increased by $865 million sequentially; Q4 began positively with a $525 million NAV gain in CVI and $60 million from funds.
• Management expects CVI's newly acquired assets to generate substantial cash flow over the next 12 months and beyond given the favorable refining environment.
• Pro forma impact of CVI's $4.2 billion acquisition is projected to increase CVR EBITDA by over $1 billion and EPS by more than 105% for the nine months ended Sept 30, 2026.
• IEP committed a $500 million backstop for the CVI acquisition but expects to be fully reimbursed via the concurrent CVI equity offering.
• Senior notes maturing May 2027 may become callable in November 2026; management intends to address these notes using available liquidity as conditions allow.
• Board declared an unchanged distribution of $0.50 per depository unit.

Business Segments and Product Lines:

• CVI (Energy): Announced acquisition of two refineries and a marketing platform at <3.5x 2026 EBITDA; received 100% waiver for small refiner status at Windywood; announced a 10-cent dividend.
• Fertilizer (Energy): Results impacted by ECW turnaround; positioned to benefit from tight nitrogen supplies and fall ammonia season now that facility is online.
• Investment (Funds): Century posted double-digit growth in pipeline and sales; IFF executed food ingredients business sale and authorized $2.5 billion share repurchase; Caesars showed continued regional and digital growth.
• Automotive: Closed sale of Pep Boys; retained businesses now focus on royalty income from franchising operations.
• Real Estate: Adjusted EBITDA rose $11 million year-over-year due to operating leases assumed from Pep Boys (Supercenters), with plans to lease up vacant space.
• Food Packaging: Adjusted EBITDA up $2 million driven by volume, price, and product mix improvements reducing waste.
• Home Fashions: EBITDA remained flat despite soft hospitality demand and Strait of Hormuz supply chain disruptions.
• Pharma: EBITDA down $4 million due to generic competition in anti-obesity therapies and increased R&D for pivotal trials; Transcend trial for PAH drug remains on schedule.

Market and Competitive Landscape:

• Refining environment described as "favorable" with global tightness in refined products and nitrogen fertilizer supporting asset valuations.
• Competitors in pharma facing generic erosion on anti-obesity drug therapy, pressuring margins.
• Supply chain disruptions in the Strait of Hormuz continue to impact home fashions.
• CVI's acquisition strategy targets assets at attractive valuations (<3.5x EBITDA) to add to strong cash-generating portfolios.

Risks and Challenges:

• Refining hedges within the funds caused significant losses, contributing to a 31.3% negative fund return.
• Short positions in the fund portfolio underperformed with a 24.3% negative attribution.
• Ongoing generic competition in the pharmaceutical sector impacting sales.
• Supply chain constraints and soft demand in hospitality sectors.
• Potential volatility in NAV and earnings due to fair value changes in subsidiaries (non-GAAP).

Management Commentary and Tone:

• Tone was confident regarding the CVI acquisition's accretive nature and the strategic value of the refining assets.
• Management emphasized strong liquidity flexibility to capitalize on opportunities and manage debt maturities.
• CEO and CFO highlighted the "transformative" nature of the CVI deal and the robust cash generation expected in the current market.
• Statements were balanced regarding the fund's short positions, noting the reduction in net short exposure from 30% to 7%.

Analyst Questions and Answers:

• No specific analyst questions or answers were included in the provided transcript text.

Other Key Points:

• CVI secondary equity transaction announced to increase share liquidity and provide liquidity to IEP.
• Real estate segment assumed operating leases from the sold Pep Boys business, shifting from automotive to real estate operating results.
• Non-GAAP measures (Adjusted EBITDA, Indicative NAV) are used to exclude fair value changes not included in GAAP earnings.
• Forward-looking statements covered regarding future performance, acquisitions, and plans are subject to risk factors detailed in SEC filings.