- Names Icahn Capital Portfolio Manager, Andrew Teno, as Chief Executive Officer
- Names Current Chief Executive Officer, David Willetts, as Chief Executive Officer of
Pep Boys
- Announces Estimated Indicative Net Asset Value of
$4.76 billion as of Year End
2023
- Maintains Quarterly Distribution of $1.00 per Depositary Unit
- During the last few months we have defeased all our 2024
notes and the next note maturity of $750
million is December of 2025
- Our cash position was $2.7
billion across the Holding Company and Investment segments
as of Year End 2023 (1)
SUNNY
ISLES BEACH, Fla., Feb. 21,
2024 /PRNewswire/ -- Icahn Enterprises
L.P. (NASDAQ: IEP) today released the following:
Chairman Carl C. Icahn
stated:
"I have come to believe that activism, on a risk reward basis,
is the best investment paradigm that exists. While this method of
investing certainly is somewhat volatile, over the long term the
returns cannot be matched.
In 2000, IEP began to expand its business beyond its traditional
real estate activities to fully embrace the activist
strategy. On January 1, 2000,
the closing sale price of our depositary units was $7.63 per depositary unit. On February 16, 2024, our depositary units closed at
$21.22 per depositary unit,
representing an increase of approximately 1,066% since January 1, 2000 (including reinvestment of
distributions into additional depositary units and taking into
account in-kind distributions of depositary units). Comparatively,
the S&P 500, Dow Jones Industrial and Russell 2000 indices
increased approximately 436%, 491% and 453%, respectively, over the
same period (including reinvestment of distributions into those
indices).
The reason activism works so well is that, somewhat
unfortunately, many public companies are not well run. It is
very difficult and expensive to remove a poorly-performing CEO and
board. And that is why so few investors today employ true activism.
Fortunately for IEP and its unitholders, we are in a unique
position to be activists. Given our track record, our stable
capital base, and our willingness to launch proxy contests (which
are extremely arduous and expensive to conduct and even more so to
win), we are frequently invited into the tent without ever having
to take aggressive actions. To that end, we currently have 25
board seats in our disclosed public company investments.
We encourage all of our companies to pursue spin-offs and asset
sales when they create value, improve leadership in key positions
and help manage and settle complex litigation. We often find
ourselves investing in companies that are temporarily out of favor
and/or contain hidden jewels. We have continued to pick our spots
and find new, exciting activist opportunities, including the
recently announced positions in American Electric Power Company,
Inc. (ticker: AEP) and JetBlue Airways Corp. (ticker: JBLU) within
our Investment segment.
To best position IEP and our activist efforts for future
success, we are making several management changes — including
naming Icahn Capital portfolio manager Andrew Teno as CEO of IEP and naming
David Willetts as Chief Executive
Officer of Pep Boys."
Mr. Teno has worked at Icahn Capital as a portfolio manager
since October 2020. In addition, Mr.
Teno serves as a director of Southwest Gas Holdings, Inc. (NYSE:
SWX) and Illumina, Inc. (NASDAQ: ILMN). Mr. Teno previously
served as a director of FirstEnergy Corp. (NYSE: FE), Crown
Holdings Inc. (NYSE: CCK), Cheniere Energy, Inc. (NYSE: LNG) and
Herc Holdings Inc. (NYSE: HRI). Mr. Teno received an undergraduate
business degree from the Wharton School at the University of Pennsylvania in 2007.
Andrew Teno stated: "There is
nobody in corporate America who is not familiar with Carl Icahn and his often imitated but never
duplicated activist strategy. I look forward to working with Carl,
even more closely than I have since joining in 2020.
Chairman Carl C. Icahn stated:
"Andrew has had an impressive record of stock picking and position
stewardship within our Investment segment. I am confident in his
ability to help lead IEP into the next phase of its
evolution."
Chairman Carl C. Icahn further
stated: "David Willetts has done an
admirable job in improving the operational performance of our
portfolio companies. We believe David's skill set is particularly
suited to work on a day-to-day basis to drive the significant value
creation potential in Pep Boys."
Mr. Icahn continued: "Over the long term, our activist returns
have been outstanding. Given our hedge portfolio and the frequent
long time horizon of our complex activist investments, our
returns can often be lumpy. There are also times when our
hedge book can go against us and overwhelm the performance of our
long positions. This underperformance has occurred several times in
IEP's history. While there are never guarantees, we expect our
returns to improve back to historical levels where our long
positions far outperform our hedges. If successful, this should
result in greatly enhanced NAV."
Icahn Enterprises is also announcing estimated indicative Net
Asset Value of $4.76 billion as of
December 31, 2023, a decrease of
approximately $411 million, with
underperformance driven primarily by the investment funds and the
return of capital to unitholders.
In addition, IEP is announcing its intention to again
declare a $1.00 per depositary unit
distribution for Q4 2023, which represents a 19% annualized yield
based on the closing price on February 16,
2024, and unitholders will continue to have the right to
elect whether to receive cash or additional depositary units.
|
(1)
|
Our cash position of
$2.7 billion consists of Investment segment cash held at
consolidated partnerships of $1.1 billion, Holding Company cash and
cash equivalents of $1.6 billion and Investment segment cash and
cash equivalents of $23 million.
|
Caution Concerning Forward-Looking Statements
This release may contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, many of which are beyond our ability to control or
predict. Forward-looking statements may be identified by words such
as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "will" or words of similar meaning and
include, but are not limited to, statements about the expected
future business and financial performance of Icahn Enterprises and
its subsidiaries. Actual events, results and outcomes may differ
materially from our expectations due to a variety of known and
unknown risks, uncertainties and other factors, including risks
related to economic downturns, substantial competition and rising
operating costs; the impacts from the Russia/Ukraine conflict and conflict in the
Middle East, 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 to
be taxed as a corporation; risks related to short sellers and
associated litigation and regulatory inquiries; 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; risks related to 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 and conflict in the
Middle East; 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, manufacturing disruptions, and changes in
transportation costs and delivery times; and other risks and
uncertainties detailed from time to time in our filings with the
Securities and Exchange Commission including out Annual Report on
Form 10-K and our quarterly reports on Form 10-Q under the caption
"Risk Factors". 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. Past performance in our
Investment segment is not indicative of future performance. We
undertake no obligation to publicly update or review any
forward-looking information, whether as a result of new
information, future developments or otherwise.
Use of Indicative Net Asset Value Data
The Company uses indicative net asset value as an additional
method for considering the value of the Company's assets, and we
believe that this information can be helpful to investors. Please
note, however, that the indicative net asset value does not
represent the market price at which the depositary units trade.
Accordingly, data regarding indicative net asset value is of
limited use and should not be considered in isolation.
The Company's depositary units are not redeemable, which means
that investors have no right or ability to obtain from the Company
the indicative net asset value of units that they own. Units may be
bought and sold on The Nasdaq Global Select Market at prevailing
market prices. Those prices may be higher or lower than the
indicative net asset value of the depositary units as calculated by
management.
See below for more information on how we calculate the Company's
indicative net asset value.
|
Estimated
|
|
Actual
|
|
|
December 31,
|
|
September 30,
|
|
|
2023
|
|
2023
|
|
|
(in
millions)(unaudited)
|
|
Market-valued Subsidiaries and
Investments:
|
|
|
|
|
|
Holding
Company interest in Investment Funds(1)
|
$
3,243
|
|
$
3,634
|
|
|
CVR
Energy(2)
|
2,021
|
|
2,270
|
|
|
Total market-valued subsidiaries and
investments
|
$
5,264
|
|
$
5,904
|
|
|
|
|
|
|
|
Other Subsidiaries:
|
|
|
|
|
|
Viskase(3)
|
$
386
|
|
$
378
|
|
|
Real
Estate Holdings(1)
|
439
|
|
440
|
|
|
WestPoint
Home(1)
|
153
|
|
158
|
|
|
Vivus(1)
|
227
|
|
227
|
|
|
|
|
|
|
|
Automotive
Services(4)
|
660
|
|
601
|
|
|
Automotive
Parts(1)(5)
|
15
|
|
8
|
|
|
Automotive
Owned Real Estate Assets(6)
|
763
|
|
831
|
|
|
Icahn
Automotive Group
|
1,438
|
|
1,440
|
|
|
|
|
|
|
|
Total other subsidiaries
|
$
2,643
|
|
$
2,643
|
|
|
Add: Other
Net Assets(7)
|
114
|
|
117
|
|
|
Indicative Gross Asset Value
|
$
8,021
|
|
$
8,664
|
|
|
Add:
Holding Company cash and cash equivalents(8)
|
1,584
|
|
1,813
|
|
|
Less:
Holding Company debt(8)
|
(4,847)
|
|
(5,308)
|
|
|
Indicative Net Asset Value
|
$
4,758
|
|
$
5,169
|
|
Indicative net asset value does not purport to reflect a
valuation of IEP. The calculated indicative net asset value
does not include any value for our Investment Segment other than
the fair market value of our investment in the Investment Funds. A
valuation is a subjective exercise and indicative net asset value
does not necessarily consider all elements or consider in the
adequate proportion the elements that could affect the valuation of
IEP. Investors may reasonably differ on what such elements are and
their impact on IEP. No representation or assurance, express or
implied, is made as to the accuracy and correctness of indicative
net asset value as of these dates or with respect to any future
indicative or prospective results which may
vary.
|
(1)
|
Represents GAAP
equity attributable to us as of each respective date.
|
|
|
|
(2)
|
Based on closing share
price on each date (or if such date was not a trading day, the
immediately preceding trading day) and the number of shares owned
by the Holding Company as of each respective date.
|
|
|
|
(3)
|
Amounts based on
market comparables due to lack of material trading volume,
valued at 9.0x Adjusted EBITDA for the trailing twelve months ended
as of each respective date
|
|
|
|
(4)
|
Amounts based on
market comparables, valued at 10.0x Adjusted EBITDA for the
trailing twelve months ended as of each respective
date.
|
|
|
|
(5)
|
Beginning in Q2 of
2023, a wholly owned subsidiary of IEP within the Automotive
segment acquired assets from the Auto Plus bankruptcy auction,
which are reflected in Automotive Parts.
|
|
|
|
(6)
|
Management performed a
valuation on the owned real-estate with the assistance of
third-party consultants to estimate fair-market-value. This
analysis utilized property-level market rents, location level
profitability, and utilized prevailing cap rates ranging from 7.0%
to 10.0% as of December 31, 2023 and 6.8% to 8.0% as of September
30, 2023. The valuation assumed that triple net leases are in place
for all the locations at rents estimated by management based on
market conditions. There is no assurance we would be able to sell
the assets on the timeline or at the prices and lease terms we
estimate. Different judgments or assumptions would result in
different estimates of the value of these real estate assets.
Moreover, although we evaluate and provide our indicative net asset
value on a regular basis, the estimated values may fluctuate in the
interim, so that any actual transaction could result in a higher or
lower valuation.
|
|
|
|
(7)
|
Represents GAAP equity
of the Holding Company Segment, excluding cash and cash
equivalents, debt and non-cash deferred tax assets or liabilities.
As of December 31, 2023 and September 30, 2023, Other Net Assets
includes $20 million and $26 million, respectively, of Automotive
Segment liabilities assumed from the Auto Plus bankruptcy.
|
|
(8)
|
Holding Company's
balance as of each respective date.
|
Investor Contact:
Ted Papapostolou, Chief Financial
Officer
IR@ielp.com
(800)
255-2737
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content:https://www.prnewswire.com/news-releases/icahn-enterprises-lp-announces-management--financial-update-302066891.html
SOURCE Icahn Enterprises L.P.
