Icahn Enterprises L.p. · NASDAQ:IEP
Icahn Enterprises L.p — Investor Presentation (November 2013)
43 slides from Icahn Enterprises L.p's investor presentation, Nov 5, 2013
Slide 1: Icahn Enterprises L.P. Investor Presentation November 2013
Icahn Enterprises L.P. Investor Presentation November 2013
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward - Looking Statements and Non - GAAP Financial Measures Forward - Looking Statements This presentation contains certain statements that are, or may be deemed to be, “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E o
Slide 3: IEP stock performance has meaningfully outpaced all its peers
Investment Highlights IEP stock performance has meaningfully outpaced all its peers 3 (1) April 1, 2009 is the approximate beginning of the economic recovery. Source : Bloomberg. Includes reinvestment of distributions. Based on the share price as of October 31, 2013. Time Period IEP Berkshire Leucad
Slide 4: Investment Highlights: a better time for activist investing
Investment Highlights 4 Mr . Icahn believes there has never a better time for activist investing, if practiced properly, than today. – Several factors are responsible for this: 1) low interest rates, which make acquisitions much less costly and therefore much more attractive, 2) abundance of cash ri
Slide 5: The Icahn Strategy
The Icahn Strategy Across all of our businesses, our success is based on a simple formula: we seek to find undervalued companies in the Graham & Do dd tradition, a methodology for valuing stocks that primarily looks for deeply depressed prices. However, while the typical Graham & Dodd value investor
Slide 6: The Icahn Strategy (continued)
The Icahn Strategy (continued) Unlike the individual investor, we have the wherewithal to purchase companies that we feel we can operate more effectively th an incumbent management. In addition, through our Investment segment, we are in a position to pursue our activist strategy by purchasing stock
Slide 7: Company Overview
Company Overview 7
Slide 8: Overview of Icahn Enterprises
Overview of Icahn Enterprises Icahn Enterprises L.P . (“IEP” or the “Company”) is a diversified holding company with operating segments in Investment, Automotive , Energy, Gaming, Railcar, Food Packaging, Metals, Real Estate and Home Fashion IEP is a permanent capital vehicle that is majority owned
Slide 9: Summary Corporate Organizational Chart
71% CVR Energy Inc. (NYSE: CVI) Summary Corporate Organizational Chart WestPoint Home LLC PSC Metals Inc. AREP Real Estate Holdings, LLC Tropicana Entertainment Inc. (OTCPK:TPCA) Federal - Mogul Corp. (NasdaqGS:FDML) Icahn Enterprises G.P. Inc. Icahn Enterprises L.P. (NasdaqGS: IEP) Icahn Enterprise
Slide 10: Diversified Subsidiary Companies with Significant Inherent Value
Diversified Subsidiary Companies with Significant Inherent Value The Company’s diversification across multiple industries and geographies provides a natural hedge against cyclical and general economic swings Global market share leader in each of its principal product categories with a long history o
Slide 11: IEP history and record of acquiring undervalued assets
IEP began as American Real Estate Partners, which was founded in 1987, and has grown its diversified portfolio to nine operating segments and over $31 billion of assets as of September 30, 2013 IEP has demonstrated a history of successfully acquiring undervalued assets and improving and enhancing th
Slide 12: Ability to Maximize Shareholder Value Through Proven Activist Strategy
IEP seeks undervalued companies and often becomes “actively” involved in the targeted companies Activist strategy requires significant capital, rapid execution and willingness to take control of companies Implement changes required to improve businesses Ability to Maximize Shareholder Value Through
Slide 13: Situation Overview
Situation Overview Historically, two businesses had a natural synergy ─ Aftermarket benefitted from OEM pedigree and scale Review of business identified numerous dis - synergies by having both under one business ─ Different customers, methods of distribution, cost structures, engineering and R&D, an
Slide 14: Deep Team Led by Carl Icahn
Deep Team Led by Carl Icahn Led by Carl Icahn ─ Substantial investing history provides IEP with unique network of relationships and access to Wall Street Team consists of nearly 20 professionals with diverse backgrounds ─ Well rounded team with professionals focusing on different areas such as equit
Slide 15: Overview of Operating Segments
Overview of Operating Segments 15
Slide 16: Investment Segment: Highlights and Recent Developments
Highlights and Recent Developments Since inception in November 2004, the Investment Funds‘ return is 245%, representing an annualized rate of return of 15% through September 30, 2013 ─ Year - to - date returns of approximately 26.3% as of September 30, 2013 Long history of investing in public equity
Slide 17: Significant Holdings
Significant Holdings As of September 30 , 2013 (4) As of December 31, 2012 (4) As of December 31, 2011 (4) Company Mkt. Value ($mm) (5) % Ownership (6) Company Mkt. Value ($mm) (5) % Ownership (6) Company Mkt. Value ($mm) (5) % Ownership (6) $2,155 8.9% $1,083 11.5% $1,920 9.4% $1,847 0.4% $992 9.0%
Slide 18: Energy: Highlights and Recent Developments
Highlights and Recent Developments CVR Refining IPO completed on January 23, 2013 and secondary offering on May 14, 2013 CVR Partners secondary offering completed May 22, 2013. Crude supply advantages supported by increasing North American crude oil production, decreasing North Sea production, trans
Slide 19: CVR Refining, LP
Gasoline 46.8% Distillate 41.4% Other 11.8% CVR Refining, LP (NYSE:CVRR ) Two PADD II Group 3 refineries with combined capacity of 185,000 barrels per day The Company enjoys advantages that enhance the crack spread ─ Has access to and can process price - advantaged mid - continent local and Canadian
Slide 20: CVR Partners, LP
CVR Partners, LP (NYSE:UAN ) Attractive market dynamics for nitrogen fertilizer ─ Decreasing world farmland per capita ─ Increasing demand for corn (largest use of nitrogen fertilizer) and meat ─ Nitrogen represents ~62% of fertilizer consumption ─ Nitrogen fertilizers must be applied annually, crea
Slide 21: Segment: Automotive
Segment: Automotive Company Description Federal Mogul Corporation (NasdaqGS:FDML) operates in two business segments: Powertrain and Vehicle Component Systems ─ Powertrain focuses on original equipment powertrain products for automotive, heavy duty and industrial applications ─ Vehicle Component Syst
Slide 22: Federal-Mogul Corp.'s Leading Market Position
Powertrain Segment VCS Segment Product Line Market Position Product Line Market Position Pistons #1 in diesel pistons #2 a cross all pistons Engine Global #1 Rings & Liners Market leader Sealing Components Global #1 in Gaskets Valve Seats and Guides Market leader Brake Pads / Components Global #1 Be
Slide 23: Railcar: Highlights and Recent Developments
Highlights and Recent Developments ARI reported record results ─ $761 million of LTM revenue and $ 177 million of LTM Adjusted EBITDA ─ Approximately 6,300 railcar backlog as of September 30, 2013 ─ $1.00 annualized dividend ARI manufacturing segment strong Tank demand from increasing crude oil prod
Slide 24: Gaming: Highlights and Recent Developments
Highlights and Recent Developments Management uses a highly analytical approach to enhance marketing, improve utilization, optimize product mix and reduce expenses ─ Established measurable, property specific, customer service goals and objectives to meet customer needs ─ Utilize sophisticated custom
Slide 25: Food Packaging: Highlights and Recent Developments
Highlights and Recent Developments Future growth expected to be driven by changing diets of a growing middle class in emerging markets ─ Year to Date sales in emerging markets grew 14% ─ Emerging market sales are over 50% of global sales in 2013 compared to 36% in 2007 ─ In 2012, Viskase completed a
Slide 26: Metals: Highlights and Recent Developments
Highlights and Recent Developments North American steel use is expected to be flat in 2013 and grow 3.2% in 2014 (1) Increasing global demand for steel and other metals drives demand for U.S. scrap exports ─ Global steel use increasing 3.1% in 2013 and 3.3% in 2014 (1) PSC is in attractive regional
Slide 27: Real Estate: Highlights and Recent Developments
Highlights and Recent Developments Business strategy is based on long - term investment outlook and operational expertise Rental Real Estate Operations Net lease portfolio overview ─ Single tenant (~$190bn market cap, A - credit) for two large buildings with leases through 2020 – 2021 ─ 27 additiona
Slide 28: Home Fashion: Highlights and Recent Developments
Highlights and Recent Developments One of the largest providers of home textile goods in the United States Largely completed restructuring of manufacturing footprint ─ Transitioned majority of manufacturing to low cost plants in Bahrain and Pakistan Streamlined merchandising, sales and customer serv
Slide 29: Financial Performance
Financial Performance 29
Slide 30: Financial Performance
Financial Performance Adjusted EBITDA Attributable to Icahn Enterprises Equity Attributable to Icahn Enterprises 30 $939 $1,547 $1,542 $3,449 2010 2011 2012 LTM 9/30/13 $3,183 $3,755 $4,669 $5,720 2010 2011 2012 LTM 9/30/13 (1) In November 2010, IEP acquired a controlling interest in Tropicana while
Slide 31: Consolidated Financial Snapshot
Consolidated Financial Snapshot ($Millions) 31 2010 2011 2012 9/30/2012 9/30/2013 Revenues: Investment 887$ 1,896$ 398$ 304$ 1,706$ 1,800$ Automotive 6,239 6,937 6,677 5,083 5,177 6,771 Energy - - 5,519 3,651 6,735 8,603 Metals 725 1,096 1,103 872 737 968 Railcar 270 514 657 488 433 602 Gaming 78 62
Slide 32: Strong Balance Sheet
Strong Balance Sheet ($Millions) 32 Balance Sheet ($ millions) Investment Automotive Energy Metals Railcar Gaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Assets Cash and Cash Equivalents $ 5 $ 960 $ 887 $ 31 $ 115 $ 245 $ 14 $ 43 $ 16 $ 958 $ 3,274 Cash held at consolida
Slide 33: IEP Summary Financial Information
IEP Summary Financial Information Significant Valuation demonstrated by market value of IEP’s public subsidiaries and Holding Company interest in Funds and book value or market comparables of other assets Note: Indicative net asset value does not purport to reflect a valuation of IEP. The calculated
Slide 34: Appendix — EBITDA Reconciliation
Appendix — EBITDA Reconciliation 34
Slide 35: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation 35 ($ Millions) LTM September 30, 2010 2011 2012 9/30/2012 9/30/2013 2013 IEP Adjusted EBITDA: Net income 199$ 750$ 396$ 390$ 803$ 809$ Interest expense, net 338 377 456 337 346 465 Income tax expense (benefit) 11 27 (128) (60) 211 143 Depreciation, depletio
Slide 36: EBITDA Reconciliation by Segment – FYE 2012
EBITDA and Adjusted EBITDA Reconciliation by Segment – FYE 2012 36 ($ Millions) InvestmentAutomotive Energy MetalsRailcarGaming Food Packaging Real Estate Home Fashion Holding Company Consolidated FYE 2012 Adjusted EBITDA attributable to IEP: Net income attributable to IEP 157 (24) 263 (58) 29 21 4
Slide 37: EBITDA Reconciliation by Segment – FYE 2011
EBITDA and Adjusted EBITDA Reconciliation by Segment – FYE 2011 37 ($ Millions) InvestmentAutomotive Energy MetalsRailcarGaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Adjusted EBITDA attributable to IEP: Net income attributable to IEP 868 121 - 6 2 13 4 18 (56) (226) 75
Slide 38: EBITDA Reconciliation by Segment – FYE 2010
EBITDA and Adjusted EBITDA Reconciliation by Segment – FYE 2010 38 ($ Millions) InvestmentAutomotive Energy MetalsRailcarGaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Adjusted EBITDA attributable to IEP: Net income attributable to IEP 340 116 - 4 (15) - 10 8 (42) (222)
Slide 39: EBITDA Reconciliation by Segment – YTD Q3 2013
EBITDA and Adjusted EBITDA Reconciliation by Segment – YTD Q3 2013 39 ($ Millions) InvestmentAutomotive Energy Metals Railcar Gaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Adjusted EBITDA attributable to IEP: Net income attributable to IEP $ 690 $ 31 $ 340 $ (18) $ 15 $
Slide 40: EBITDA Reconciliation by Segment – YTD Q3 2012
EBITDA and Adjusted EBITDA Reconciliation by Segment – YTD Q3 2012 40 ($ Millions) InvestmentAutomotive Energy Metals Railcar Gaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Adjusted EBITDA attributable to IEP: Net income attributable to IEP $ 121 $ 38 $ 219 $ (21) $ 20 $
Slide 41: EBITDA Reconciliation by Segment – LTM Q3 2013
EBITDA and Adjusted EBITDA Reconciliation by Segment – LTM Q3 2013 41 ($ Millions) InvestmentAutomotive Energy MetalsRailcarGaming Food Packaging Real Estate Home Fashion Holding Company Consolidated Adjusted EBITDA attributable to IEP: Net income attributable to IEP 726 (31) 384 (55) 24 14 (6) 14 (
Slide 42: Adjusted EBITDA Reconciliation – American Railcar Industries, Inc. (ARII)
Adjusted EBITDA Reconciliation – American Railcar Industries, Inc. (ARII) 42 ($ Millions) Source: ARI Q3 2013 & Q4 2012 Earnings Press Release. Financials FYE FYE 2011 2012 Net Earnings 4$ 64$ 88$ Income Tax expense 4 42 56 Interest expense 20 18 9 Loss in debt extinguishment 0 2 0 Interest Income (
Slide 43: Adjusted EBITDA Reconciliation – CVR Energy (CVI)
Adjusted EBITDA Reconciliation – CVR Energy (CVI) 43 Source: CVR Energy Q3 2013 Earnings Presentation. Financials FYE FYE LTM Q3 ($ in millions) 2011 2012 2013 Net income (loss) attributable to CVR Energy stockholders 346$ 379$ 433$ Interest expense and other financing costs, net of interest income
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