IEP - Earnings call transcript Q2 2020

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Operator

Good day ladies and gentlemen, and thank you for standing by. Welcome to the Icahn Enterprises Second Quarter 2020 earnings webcast. [Operator instructions] At this time, I would like to turn the conference over to Mr. Jesse Lynn. Sir, please begin.

Jesse Lynn

operator. you, Thank our Litigation Harbor Securities presentation of provides plans XXXX statements acquisitions. The forward-looking Reform statements Safe for and performance for our this and we a potential regarding Private future Act businesses make including in

measures expectations Accordingly, as the measures. directly also measures assume over COVID-XX it certain our financial no any Executive of comparable Cozza, including the by Enterprises Chief subsidiaries. to results our by be of outcomes found assurance and expected differ expectations other performance duration of or or except be Exchange update should other in intends, limited may will related such the presentation Officer. due forward-looking This our uncertainties law. be and required including as known of Securities to, discussed magnitude such and factors Commission are and future revise I'll includes statements GAAP to non-GAAP not risks, similar financial meaning and Actual factors L.P. reconciliation A statements of Forward-looking now our circumstances there turn is plans, identified economic, in expects, financial Icahn non-GAAP and seeks, events, the the financial believes, business back can the presentation. legal materially filings obligation that to statements are to most from and will a of words may unknown change, with this and pandemic. but otherwise realized. to about severity, that estimates, no words variety anticipates, Keith its We and include, competitive,

Keith Cozza

Enterprises call. to morning, XXXX quarter earnings Good and the second Jesse. Thanks, conference welcome Icahn

our some SungHwan Cho, of Joining me Officer. in results providing of I our will Chief our will and highlights. segments. business today's depth performance Sung then review by an financial the begin call provide brief Financial on is

questions. address be will then to We your available

primarily had net net $X.XX unit we Enterprises XXXX, a $XXX or QX, million to LP year the Enterprises attributable XXXX of at in Icahn million Quarterly $X.XX loss LP the QX, loss period. company both was investment of million Icahn income For to attributable compared per $XXX EBITDA in compared to prior segment. holding of or driven unit was Adjusted for per to QX income $XXX investment million by $XXX of XXXX. gains a and

a by equity short Our by X.X% funds to negative The Net short positive a return XX.X% billion position XXXX partially position prior long investment by for year energy significant credit of of offset performance $X segment our positive hedges. for compared XXXX decreased to a certain negative large in the QX, and of our driven primarily earned index was period. for from QX, QX XXXX. return compared performance sales market

within CVR impacted from petroleum disruption crack differentials negatively demand wars. crude Our energy price was and that resulted by the crude oil segment narrow global tight spreads and COVID-XX

the for weaker by continue governments basis. multiyear the were experiencing automotive the hampered. had and our Icahn sales recently, segment on and QX and of until push of others sales with decline forward contributed actions transformational revenues, and automotive restructure plan COVID-XX operations to rates organic and strong to XXXX. significantly the both markets price improve continues have and automotive by fertilizer revenues in commercial which, agriculture group to were environment facilities, impacts the be particularly revenue for profitability. offset Our service to taken at million Net pandemic $XXX revenue growth segment the as services The utilization an

investments with on parts end track and by complete in of $X.X year. quarter billion. closed business of from are service the automotive business company aftermarket our funds the We separating this and cash the the progress significant made substantially have over to We our separation holding

We to philosophy. continue it With activist let that, that with me over look turn for to Sung. investment align our opportunities

SungHwan Cho

I Keith. will comment our reviewing our our the balance results strength sheet. on by of briefly segments Thanks of highlight consolidated begin operating and and the performance then

For Icahn a Enterprises of compared net prior was the to million to XXXX, attributable $XXX QX, as year income $XXX loss million period. in net

$XXX Enterprises for the period. QX, regarding to more $XXX will I can now individual Slide to driver for year funds million you in As see XXXX prior the of compared EBITDA a segments. attributable quarter. net X, a in the our Icahn income XXXX QX, detail performance was of was million loss the provide significant our our Adjusted on investment performance of of

to funds November Our in for investment QX, investment XX.X% the return return positive net QX, negative million XX% through investment quarter, had at XX% positions the income for QX, the to of X% to end continue Long a to QX, in At of hedged. The XXXX XXXX XXXX. funds a a XX.X% funds performance short end QX, attribution the X.X% the of The negative short net funds inception XXXX. were or compared of the QX had XX% XX%. of gross for investment a had positive annualized. attributable return end be XXXX is of XXXX. compared Since positions XXXX, short current of $XXX segment performance Icahn of Enterprises attribution while had

energy June billion Our investment now was in of as to our XX, funds And segment. XXXX. $X.X the

QX, throughput was at of due mid-June For $XXX per of barrels margin barrels QX The during per of tight period completed same diesel COVID reported was refining This was differentials day QX. $XX.XX XXX,XXX environment. narrow XXXX. million. EBITDA the declare did per barrel goodwill turnaround dividend evaluates at compared a adjusted UAN weak Partners and as opportunities due lower $XXX of prices. compared high-return as per in as $X.X gas impacted the EBITDA in in consolidated QX, until strong $XX by which the low period. an energy $XX the day the this net was indicated XXX,XXX was XXX,XXX XXXX $XX.XX segment of to a Coffeyville included prior ammonia in and for to positive quarter in spreads million supply average which to in consolidated in to year for shutdowns. XXXX. to due $XXX were reported various significantly million barrels due in sales decline EBITDA and renewable million quarter volumes CVR CVR gasoline primarily the of million crude rates period. reduced adjusted year positive QX, the diesel. volumes XXXX to compared QX, impairment, EBITDA compared $XX were billion of operating XXXX for management April well our in range EBITDA day of due of to was it running Refining reduced noncash XXX,XXX second sales prior The and Refinery to as adjusted natural to this and which and lower-priced demand to weak crack million are not investment CVR $X margin net negative energy impairment million including Adjusting

staffing million million million, group to auto for profitability. automotive the year and year automotive million period. from Icahn our service with slowdown the the to segment. revenue plan reduced implemented loss losses continues for Icahn significant prior and loss to adjusted turning to the profitability related in the improve XXXX and related reduced a the closed primarily Icahn match of operations significant with net All push COVID-XX. with as was certain forward stores, $X of store $XXX spending minimum helped to to accelerated prior restructure adjusted of these remainder automotive of down which to million decline parts of $XX $XXX compared a excludes transformational hours XXXX and QX, multiyear store due sales capital period auto QX, sales offset stores, return. EBITDA was sales $X decline sales to company initiatives measures demand, to the a the levels. and Now cost-savings and position Icahn associated closures the impact closures

Demand prior part our products EBITDA decreased flat casing offset Food segment. million XXXX and compared mix, metals at unfavorable $XX strong related year volume the increase effects X%, segment. due adjusted sales sales QX, Now year. in Packaging $XX to our to XXXX EBITDA income year. both net year global market and metal product the net foreign of to $XX club conditions. increased for or consolidated were by compared increased Viskase Net XXXX and to million prior the of rental price operations. quarter impacted by with selling our an decreased market and by remained adjusted compared period. increase QX, EBITDA by of And year the period. XXXX derived real the an turning compared for Revenue grades estate Adjusted operations to estate million real segment. revenues the real units to million from the in The lower QX, segment from and from residential to QX, prices compared prior the and period. substantially by were volumes QX, due decreased now EBITDA our $X million now to due by XXXX and sales sale exchange. to in And million was $X estate unfavorable $X for of for net to to generated and operating shipping increased prior to million pandemic. adjusted increased Net COVID-XX $X $X by million sales prior volumes most

home to Now the in VSS our by sales existing million mask period QX, attributable net compared sales, decrease face WestPoint $X due sales segment. in to Home prior to by and year increases offset the turning fashion part acquisition. to XXXX decreased primarily

and prior As markets to adjusted product WestPoint's compared the institutional outside previously international personnel in nonmedical focus see in U.S. QX $X started extends year to of donated strengthens market million $X VSS period. strong achieved -- face and losing the and the WestPoint medical COVID-XX the its demand WestPoint businesses for line. masks to new disclosed, continues million to EBITDA this addressable in Early and producing acquisition strong in crisis, hospitality the the frontline

company advantage our approximately at billion. We totaling QX, each attractive revolver funds of will liquidity cash, opportunities. equivalents, XXXX to of availability I discuss and our $X Now, We cash the subsidiaries and position. the take operating investment investment ample at ended in maintain liquidity our holding

advantage opportunities credit maintaining of of building them our Our take $XXX and you. cash approximately the Thank attractive call us summary, opportunities. to outside liquidity value you to open to please subsidiaries ample can we and segments. million Operator, facilities operating undrawn enable of on enable to focus have In capitalize to asset of on questions. continue and existing million within $XXX for

Operator

line or from Jefferies. comes first [Operator of Dan Fannon the Instructions] Our question from comment

is line Your open.

James Steele

taking This for in for Thanks is our actually Dan. filling James questions. Steele

landscape for wanted and I opportunities Obviously, just level year. when off about plans to the you you're in first, the M&A. high investment from start different So that the just sort seeing are talk started how things had you of

your landscape I wanted you're to of more assessing M&A? So just for and the segments opportunistic be might see how which

Keith Cozza

Thanks. This Keith. Sure. think so is well, our I'll start investment Yes, in segment. -- I

segment. I investment cash think we're balance down really a our have at we large --

some have level the as very finding And for interesting the in some recently that's we space. potential the opportunities would activist seeing also we're a on credit prior pandemic and transactions investment segment so weren't distressed interesting M&A I And that stuff lookout to many say result us of in that credit the investments. space closed new the at

that's level. So that's at the changed investment something segment

call. laid them think of our -- we out segments, as each I other far I As the sort on mean,

think I their seeing energy, particularly earnings with held and in yesterday. we're call energy CVR they

pretty to exposure this, of again extraordinarily acquisition pad an plant number about paybacks. diversify seeing of high with but projects quick some high -- couple conversion in a that it projects renewable regional a pay or whether So we're vocal another another returns return even exploring they've where refinery our be been potential diesel

where are most areas those seeing we're the really I'd opportunities. say So the two

James Steele

on then you onetime improves, Okay, or any thanks. you costs obviously, on quickly costs. to I'm environment be automotive cut will And were curious pivoted to when limit just you the there any kind But the months there Just and done able curious couple the segment what how pretty just back and from ramp costs? up ramifications quickly past tell. you can in you've of might of what

Keith Cozza

Yes, sure.

costs onetime I up. material ramping think -- any back I don't anticipate in

same side group more the really think the moves once our productivity. pandemic of volumes unfortunate of of sides preserve seeing percentage business and at a business. I frankly, to the they're think drastic team but companies it increase automotive particularly was. as need basis to nearly to the really Icahn And the made And improve, cost as some at structure on value the doesn't service business I has improve the operate business, both management lean on the forced

operating not of see do forward. actually, see not sort onetime charges, I going only I better sort of So I leverage

James Steele

thanks. Okay, lastly And the estate on me, real for segment. then

an of is lot resulting the more where some could a pandemic. I there from think evolutions permanent this area people think be

curious So I'm on capacity you estate in your how thoughts your portfolio. what view your are just there commercial and real

Keith Cozza

Yes.

I estate That pay XX most at Basically, material So is is portfolio tenant storey our mean building the is -- commercial small. in have we the continues has but left, have a point this leases real Atlanta. asset we who to their until XXXX. pretty

redesigning that building. single-tenant -- that a We was are currently

no has number doubt building we're real least for multi-tenanting pandemic -- redesigning with up estate and and corporations so And to do But our material, we But about with pretty the pressure certainly leases. progress put most employees potential about and footprint or triple particular it thinking portfolio. ultimately feel making people for longer-term and they good okay has able the puts a and That's being certainly in that the repurposing it fill exposure at look lease that's are Downtown really corporate of on yes, lessees think the only offices, building net this demographics that in to I in Atlanta their up. all lease and of need still it. the their

James Steele

Keith. Thanks it. Got

Keith Cozza

the for Thanks Yes. question.

Operator

[Operator am I'd management at instructions] showing in like over any conference turn for questions to the the back additional this I time. closing to remarks. no queue

Keith Cozza

discussing everybody results We you you day. with in good operator, this year. to third -- in forward IEP. look later quarter you thank interest Okay, Have a your thank and for

Operator

Ladies thank concludes conference. This today’s and for gentlemen, you in participating the program.

now may day. have Everyone disconnect. You wonderful a

Icahn Enterprises (IEP) 7 Aug 202020 Q2 Earnings call transcript