Icahn Enterprises L.P. (NASDAQ:IEP) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 10:00 am ET


Icahn Enterprises L.P. (NASDAQ:IEP) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Icahn Enterprises LP Q3 2019 Earnings Call. With Jesse Lynn, General Counsel; Keith Cozza, President and CEO; and SungHwan Cho, Chief Financial Officer.

I would now like to hand over the call to Jesse Lynn, who will read the opening statements.

Jesse A. Lynn

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

These forward-looking statements involve risks and uncertainties that are discussed on our filings with the Securities and Exchange Commission, including economic, competitive, legal and other factors. Accordingly, there is no assurance that our expectations will be realized. We assume no obligation to update or revise any forward-looking statements should circumstances change, except as otherwise required by law.

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

I'll now turn it over to Keith Cozza, our Chief Executive Officer.

Keith Cozza

Thanks, Jesse. Good morning, everyone, and welcome to the third quarter 2019 Icahn Enterprises earnings conference call. Joining me on today's call is SungHwan Cho, our Chief Financial Officer. I will begin by providing some brief highlights. Sung will then provide an in-depth review of our financial results and the performance of our business segments. We will then be available to address your questions.

For Q3 2019, we had a net loss attributable to Icahn Enterprises of $49 million or $0.24 per LP unit, compared to net income of $118 million or $0.64 per LP unit in the prior year period. The quarterly loss was primarily driven by losses in our investment funds, offset in part by the gain from the sale of Ferrous Resources, which closed during the quarter.

Adjusted EBITDA attributable to Icahn Enterprises for Q3 2019 was a loss of $121 million, compared to a gain of $5 million for Q3 of 2018. Our investment funds had a negative return of 7.4% in Q3 2019, compared to a negative return of 6.3% for the prior year period. Our negative performance in Q3 was driven by net losses in our short equity index positions and certain core long equity positions. The Investment funds continue to be defensively positioned finishing the quarter with net short exposure of 16%.

In our Energy segment, our Q3 2019, net sales were $1.6 billion and consolidated adjusted EBITDA was $235 million. CVR Energy had a strong third quarter, led by improved capture rates, high throughput volumes and increased fertilizer sales volumes and pricing. Last week CVR announced an increase in its quarterly dividend from $0.75 per share to $0.80 per share, as well as the authorization of a $300 million stock repurchase program.

Net sales and service revenues for our Automotive segment in Q3 2019 were $744 million, compared to $735 million in the prior year period. The increase