Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the Icahn Enterprises L.P.'s Q4 2022 Earnings Call with Rob Flint, Director of accounting; David Willetts, President and CEO and Ted Papapostolou, Chief Financial Officer.

I will now like to hand the call over to Rob Flint, who will read their opening statement.

Rob Flint

Thank you, operator. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for forward-looking statement we make in this presentation, including statements regarding our future performance and plans for our businesses and potential acquisitions.

Forward-looking statement 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 L.P. subsidiaries. its and

filings revise assurance and due should results risks, differ from legal in materially and Commission, and no will and Actual expectations be economic including a outcomes variety change We expectations competitive, our assume discussed are severity, to factors other factors the unknown otherwise law. the pandemic. of our Securities other our Exchange events and including that may magnitude with known required uncertainties the statement, Accordingly, that COVID-XX to any update except as or obligation of circumstances duration there forward-looking is no by realized. and

financial also financial found in measures of certain includes presentation. measures. financial the such back presentation of measures A most non-GAAP the this reconciliation GAAP can This to be non-GAAP comparable directly

I'll to now Chief Willetts, Executive Officer. our turn over David it

David Willetts

welcome Rob. Enterprises conference Good call. morning you, Thank the and Icahn XXXX fourth earnings quarter to

on Together, today's is me questions. our an available Papapostolou, results then Ted QX provide for of be we'll Joining and Financial Officer. call, Chief overview

we our minority our I'd segment. principles reemphasize effect activism both we believe our and controlled paradigm like the in We're into into results, best Before that is activist for in to positions investment. the held our majority get putting investment

positions strongly the our we we're Additionally, believe especially today. in to in living risk mitigate hedging volatile in markets that

all and unless amounts EBITDA income we’ll brevity, attributable net otherwise specified. Enterprises, sake to are of Icahn For the discuss

million, of a million, EBITDA million. improvement adjusted on which represents Now Full Full numbers. improvement $XXX $XXX XXXX million. year-over-year XXXX was to the $XXX represents was of for which loss year a year-over-year net $XXX year

million loss loss negative a million, $XX compared million adjusted $XXX and EBITDA in QX and net we million $XXX the prior For period. of $XXX adjusted year negative had an net of to XXXX, a of EBITDA

asset value by change reported million included are to includes fair not net of GAAP the which indicative net asset changes in things, XXXX. in December billion The XX, above. increased other to as end our compared in quarter $X.X indicative value value $XXX subsidiaries, Our at as certain among earnings

Regarding of X.X%. our negative segments. had a our funds Year-to-date, return investment

For approximately a per spreads quarter increase XX% share X, CVI performance, down XXXX, continued the largely year. to $XX.XX X'XX ended with share. increased bring total comparison, the dividends to Dividends versus per $X.XX in volumes. strong quarter in $X.XX XXX the for to due with quarter S&P was about the XXXX to for been XXXX crack flat

for of 'XX, Partners in strongly which markets and UAN, to QX by pricing XXXX CVR performed were both QX up strong ammonia XX%-plus. versus largely due approximately

Automotive Services, In revenue efficiency actions the of the For XXXX. over targeting year cost QX, at growth discipline. strong the first phase full executed for SG&A team of XX% corporate remained

units. The $X half additional XXXX, place its now rapidly the The CEO are a payable Although company is in additional of focus company the the its efficiency team and leadership intensifying board customer plan overall in the actions is are declared first cash in distribution for performance. service XXXX on services and new CFO offerings. quarterly and upgrading with IEP planned the executing for premium

With all of over discussion segments. for that, me our Ted let it to of detailed turn

Ted Papapostolou

the strength of I our the balance results on by segments David. consolidated and our highlight begin you, Thank will operating comment reviewing then of and our performance sheet.

of period. prior had net EBITDA million we year of to million, adjusted and EBITDA $XX loss of and 'XX, the net negative For $XXX in negative of adjusted million $XXX compared QX $XXX million loss

negative was the long by in our by part the more of driven I will offset now detail certain provide the performance return of positions. segments. for quarter, a The our performance investment had short negative regarding of funds which positions, X.X%

other and positive end of a had while the of to exposure investment short end performance attribution at of a notional funds XX% had had XX% net exposure the For positions the compared notional net X.X%. quarter, QX. of a long at the attribution short negative year, performance The of X.X% a of short

was $X.X in investment funds of billion as the year-end. approximately Our

unit. to Energy segment. QX,'XX, our CVI increase reported CVR margin year compared in to sales Compared cash in segment was was billion throughput refining Partners barrel quarter per to dividend billion spreads. was Energy net in compared of $XX widening $X.X distribution now declared QX'XX. to for due per the QX And and In $X.XX 'XX a $X.XX declared primarily the year a crack quarter. share per our to prior fourth Adjusted This QX EBITDA quarter. cash $X.X $XX.XX $XX.XX, million 'XX prior million of $XXX

per have continue $XXX prior refining year of to ton XX% to realized cost per to to quarter. RINs for business negative QX a our XX% $XXX 'XX for impact quarter. the expense million compared ammonia improved average prices the on of by and The when $XXX related UAN by gate improved ton, with

year compared million in increases offset QX Now net volumes. EBITDA $XX period, from lower $XX to due negative $XX increase 'XX. 'XX sales revenues year was the million by QX other increased negative quarter. million, to segment QX as segment. for to million Service compared Automotive revenue Automotive prior million an by $XXX and our QX the of to the was 'XX $XX Automotive 'XX prior adjusted price

decreased period, by QX year aftermarket due $XX volumes. lower sales mainly million part as compared to prior to 'XX the

was and segment the out-of-period increased by adjustments. impacted quarter, inventory negatively reserves the During

have and parts Icahn to Auto to Auto a will Plus, limited held an within aftermarket not filed voluntary Subsequent This segment impact Enterprises. bankruptcy. the significant Chapter to XX year-end, is a distributor Plus proceeding

sales portfolio. 'XX, our QX'XX. Now was its to compared and EBITDA the is $X segment. team across prior The highly quarter. other year QX occupancy for net strong $X continued Adjusted to management Real revenues on million, the and performance million segment QX 'XX increased $X for Estate focused negative to million by compared increasing the

compared mainly 'XX year prior EBITDA and compared 'XX, quarter. for million net QX sales were operating QX other segments. to revenues relatively the as other other which more to Adjusted to prior million all our efficiencies the due for inflationary 'XX was year in productivity increases, quarter, compared QX'XX. This to pressures energy across prioritize case continues company. the turning Management $XX price during for manufacturing Now improved flat materials. than offset to and $X segments to raw and QX

on its to quarter, has impacted business costs. to the Home During hospitality retail in reduce overhead e-commerce. Fashion its products exit was by within products Management negatively business, retail focus and decided particularly unprofitable

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

credit approximately value liquidity have attractive enable facilities and enable us take building subsidiaries and $XXX opportunities operating advantage of outside to to of our to to million within cash of In Our undrawn them maintaining capitalize and opportunities. on summary, on asset we to $XXX million segments. focus continue existing

you please for can Operator, the up you. questions? call open Thank

Operator

One first Fannon question, moment from from Daniel our for [Operator it Jefferies. comes Instructions]

Daniel Fannon

positioning. Hey, good the morning, just guys. the A question on the fund -- and

Given done. what start likely a good the has not into position short this beta just given year, heading

as on, the framework your just the kind us you're this So broader kind of inform going -- but the about there think how the a just year about of you lot can on investment of of just kind macro views is you and is of of -- about curious backdrop? Obviously, kind outlook? kind thinking

David Willetts

Thanks, Dan. Sure.

when interest really on I most that what question, rates least and it's marks There of. go we're they'll number really always satisfying all is think a that this on up, the economy. aware the they question ripple are effects underlying has go operating difficult ball. less will on because then crystal factors up of

several to uncertainty. both and We broad market positions due always, to specific have years, least positions the at for the hedge looked last

opportunities outlook remain radically that our which that's nature. So, rifle there environment an in That shot are changed. It's are uncertain very an in doesn't environment. said, often

be our we'll quite or So certainly appropriately, we as folks that on can quarter, to is as of hedged risk our out focused execute different hedging while theses. may all our on us are depending situation be helps the we a either view in manage distressed But changes. we us. But hurt based these much on

Daniel Fannon

could in think in fall environment. and on potentially of also investing power question, that buying opportunities you harder presents terms returns might I assume times that guess we more benefit your higher Understood. how about activist from as And that think is some similar also rate to companies I But as you just about higher ability the a that rates. obviously generate change. impacted need, by

said, you -- businesses? how -- you they whether and as thinking wanted are the been, have what that's that with potentially rates just maybe guys backdrop going higher, across about for that and So where you means are

David Willetts

and opportunities more our Yeah. moving realistic Interest does costs present present up operating debt. for -- is does rates it

difference all continually many, thing now think that back to we're really interest even back there just snap in many, to that a as at to I is one rate marked XXXX recalibrating lived an not rates, though really probably abnormally in XXXX-XX in compared to the interest high still environment. certainly many We're have we is for environments years. we've

it's is we're bleed pay not it interest this not obviously, nose but at yes, levels more -- welcome at So to point.

operate. quickly. as that double-digit of favorable We've requires terms making say But few unusually based gotten concern, extraordinary we'd a as sure one we've return but rate investments normally just a it's disciplined years. a it be that and tailwind in is interest some we ever us on those in have execute environments how So the to last from choosing been we it's not

Daniel Fannon

just then last Understood. And one.

significant. You that? to mentioned being consolidated is I there And it's of Auto-Parts just business. way your within the not guess, the bankruptcy a quantify

on would play and little through should a that color just as that process Thank helpful. means So what unfolds how that more be you. bit

David Willetts

Yeah. that one? want take to you Ted, do

Ted Papapostolou

not a subsidiary Yes. Icahn nor financials, and out business the getting rid in shift significant of break Plus subsidiary. Enterprises did We our Plus strategic was was it but a deem that Auto don't Auto we of

time, was not it can't this So would a it but and it a we quantify event. subsequent at significant be impact,

during able provide we'll QX earnings, the be So color. to maybe more

Daniel Fannon

Okay, thank you.

Operator

the for please. Advisory moment comes our One Berg, Group. question, it from you. Andrew Thank of Post next line And

Andrew Berg

guys. Thanks,

reasonably short. net X-point Just thing did or you me circling on you moment. to that positions investment probably to in biggest equity notional on back the hurt did areas? in long name adjustment looked an the guys adjust change for short Obviously, that the equity well. like It the you Was other predominantly was single a the funds

David Willetts

you you perform thing as been last as only that the really the four quarter here several quarters. see the is through not volatile think running pointed was has did Certainly, out, short, I well.

did relatively well, longs not shorts the the but perform did well. perform particularly So

on between the positions, just terms overall our think So in change equities. performance fundamental reflect of positioning, relative a in our I it doesn't them

Andrew Berg

what to as Okay. guess And Q we'll the and it funds change the CMBX I was shorts? see between the the in index

David Willetts

XXXX, of back declined if terms CMBX certainly shorts, up. time over the over -- Those you exposure has the defease I'll a maybe to in shorts XXXX go and Well, our context. provide naturally bit time, wind broader to CMBX those as so

over and impact planned been and larger past in So numbers as quarters pronounced an and certainly we predictable action. just just the aren’t seen see an last years, several a defeasing we in impact, have than that's those more that's

I So read wouldn't for than course that it's too other that much the into -- security. natural

Andrew Berg

numbers that, suggest somewhere probably quarter. breakeven the Okay. And that in my was

that? see was be million wondering we driving real I a but might was swing at improvement it from significant in think don't $X exactly there? to I I'm look performance, It's just detractor the what EBITDA, improvement the When is the what estate, great wrong. So

David Willetts

in good areas. the two to They real opportunities, we They've mean companies. estate focused move But we've interest still development been done have They've well. on very rate or progress continue done news our there's that seen in very certainly despite well I forward. continued is one and environments.

of do. be the strategy we We about our continue to development and that excited type

own. space We really then the had have to 'XX come they and 'XX that is course of focused versus of we're started 'XX, those want into I'd its were over select -- continued net lease to estate plenty really But still lease And area. perform to that. well. that progress more We on stay idle. real to in we've tuned in say leasing what And out continue properties, where has see out

Andrew Berg

you show that the to in guys were write-downs of big from lastly, automotive there real that that at value that understand Can we were XQ. indicative quarter quantify those that taken. there decline XQ the happened where Great. And just want were subsequent And And certain call was bit have to saw you end, mentioned areas write-downs? you Okay. of which better values in I X the Auto value then given about a change, just sort in looking you we on three automotive-owned as estate. asset to provide, Plus it think little that

David Willetts

the value adjusted move down real approach, separate think the obviously which companies I mean has consider non-GAAP. a values valuation-based is that in a I our biggest operating we estate. cap what into And real we Sure. once the is is we'll represented rates, I there, And movement The it real the the given estate which significant, in estate been relatively asset in sector. net year. NAV

as on then have for when the based you do you really But reality at recognize the getting methodology. rents doesn't our look of underlying you sector that It valuation, ability may to market change past. that you for our get independent much to, wish rates, any we're to is cap in economics not that an as the you

biggest sector. real the was that the So estate single automotive change in

in that there operations, were leadership particularly a as items characterize review, that were ensuring And we from a full the focused as I of a in saw is team that We've terms say we to been on our sheet processes, new of would stemming to a number really the up of be. I'd balance not looked number where liking. needs it items back, cleaning controllership services.

some additional several would of posted I characterize reserves as change. so methodology And which were them

post excess let's example, obsolete For an inventory and methodology.

the Those reevaluation capitalized methodology. for of just are some yield reevaluate Let's items inventory. of

more that promptly had frankly, been recognized should they items QX, QX And than a QX between bit then to and perhaps have are little that there and QX. been other have recognize we

Andrew Berg

Okay.

much pretty coming cleanup. new a it's and bit of management So makes sense. in a That

David Willetts

cleanup. It's a bit of a

Andrew Berg

guys. Got it. Thanks,

David Willetts

We're really focused on the integrity there. of numbers the

Andrew Berg

Helpful. Okay.

Operator

our question. line Investor for Monrad comes moment from One Group. it the next Bruce with you. And Thank of Northeast

Bruce Monrad

hear you okay? can me guys, Hi,

David Willetts

Yes, we can.

Bruce Monrad

and that up on question. of improvement hosting sort hopefully, what inning case that's how are Thanks the or in What the call A nice Food value, you Maybe to there? both at is say? marking and packaging And first would with inning Okay. as question great. this going the it EBITDA Great. of the and question. in, the always [indiscernible] for production that's you see okay. the

David Willetts

particularly North the plants. With plants, regards to the American

to scrap rates. been plan reality through. Here's driver. what we're not consternation at I would still not They were at It's of opportunity. consistently just source say. has There that's The line an volumes. material rate is that muscling are a that is scrap running close the but issues a for But

first performing, I is are there items -- What the on So point many and consistently. we discipline indicators line wrong our indicators are we're of the yet, but R&R we've We're gotten gauge would select most plants on still not maybe taken personnel have inning would a done performance. performing -- say at the but right? say of the first they're not say plant We where stabilization wonderfully, and performing I we is we're -- replaced in very much is in quarter, maybe the baseball actions. I'd

measure quarter its it's the now make and much we that to next good of say be, still a seeing to believe three-month point like function increase efficiency. where not I small Oceola. it in -- we'd We've X we're to improvements. It's it's sustain seen in OEE but very I'd is is The issues, upward. first consistent the need step improvements general a in always OEE news has phase, but entirely percentage

it step a scheduling in you big you opportunity bang My scheduling with do X a plant unless with reliability is experience to with issues percentage have you when machine functions. labor, plants with a in rarely multiple X point get get it's

quarter, in to mix not say my but Square the here. we're at I'd still analogies X, So first we're

not I always been that can reliable progress. us quarter, for we of gives quarter. for overall steady, worry weather. And factor interruption is trajectory making that have about one say the But power are for that weather-related certainly, blips and We first there something concern first issues.

Bruce Monrad

Good. Okay. for? sorry, And OEE stands I'm

David Willetts

Equipment Overall Efficiency. Equipment Efficiency. basically It's

Bruce Monrad

and go how do and back down. management pretty of was it off? was of do do a Do they in Do do Last XQ good, of budgeting say, that then 'XX, off XQ and last and year? after obviously, is for of it okay, running some you off improvements? And but let's budget terms up it is Oceola it year, you

are be they answer how that? budgeting, question a if about going So can would you

David Willetts

always it's on budgeting mark. mean, I multiple is So year-over-year management delivered is -- plan us a so not that asked sciences much effectively, based we've factors. and But they've a improvement

which the across mix so mix a some are are of are on of plant which all improvements, which the get rearranging are some of continents. you richer of we costs, sourcing, of some focused Some which

When do fully for take are We we rates an we look be take been example. XXXX, plans plans have don't that budget, compare the that and versus average actually run that for at executed. and of exit executed how a the look we at to

So the I just average. take we but convoluted, an bit think that's a is short don't little version

fairly But look to announced. what a do? exit letting is initiatives highly XX% year supposed had not factor do do? and right? is the Or a and we in we're caution but the risks the scientifically confident that budget plant wanted meaningful XXXX We achievable Where that XX% that the to what growth, supposed sandbag, is opportunities showed to at management we so

the long-winded that's So a question you answer to asked.

Bruce Monrad

Again, Great. congratulations. It does. quarter. some you Very I the headwinds much FX know had appreciated. in

I to you've Thank appreciate other question. got chance ask things So the but the there, you.

David Willetts

welcome. You're

Operator

that, remarks. turn David the will the call with final Q&A Willetts conclude I I'll back And you. to Thank session. And for

David Willetts

Thank everyone, attending. for much, Great. you very Thank you.

several are frame. back and we you concerns you to I you ask in in will means that you to attempt or if questions get to reasonable time refer or would a get there to, and weren't our your able have always, can website, comments, we As to questions which

very you to Thank look in and much, three months. roughly Take care. Yeah. forward talking we

Operator

Thank you, that, good now with Thank conference day. our for you participating. And we and for conclude may you today. disconnect. And

Icahn Enterprises (IEP) 24 Feb 232022 Q4 Earnings call transcript