Business context and reporting period
Icahn Enterprises L.P. is a diversified master limited partnership and holding company. This Form 10-K covers the fiscal year ended December 31, 2023. Its businesses include Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion and Pharma. Energy generated about 83% of consolidated net sales. Carl Icahn and affiliates held approximately 86% of the depositary units at year-end.
Key financial metrics
Amounts are in U.S. dollars; figures are for the year ended December 31 unless stated otherwise.
| Metric | 2023 | 2022 |
|---|---|---|
| Reported revenues | $10.847 billion | $14.101 billion |
| Net sales | $11.077 billion | $13.378 billion |
| Net loss | $1.012 billion | $25 million |
| Net loss attributable to Icahn Enterprises | $684 million | $183 million |
| Loss per limited partner unit | $1.75 | $0.57 |
| Net cash provided by operating activities | $3.736 billion | $1.055 billion |
| Cash and cash equivalents at year-end | $2.951 billion | $2.337 billion |
| Total debt at year-end | $7.207 billion | $7.096 billion |
Reported revenue includes investment results and other items, so it is not directly comparable to net sales. The 2023 net loss included a $1.575 billion net loss from investment activities, a $246 million non-cash loss on Auto Plus deconsolidation, and a $139 million credit-loss expense on a related-party note. Operating cash flow includes investment-fund trading activity and should not be read as operating cash generation alone.
At year-end, the Holding Company reported approximately $1.6 billion of cash and $4.847 billion of debt; operating-segment debt totaled $2.360 billion. Consolidated cash held at affiliated partnerships and restricted cash was a further $2.995 billion, not all of which was available for general use. The company declared distributions of $6.00 per unit for 2023, with holders able to elect cash or additional units.
Material changes versus 2022
- Investment Funds returned negative 16.9%, compared with negative 2.4% in 2022. The 2023 loss reflected losses on short and long positions, including a $704 million loss on a broad-market hedge.
- Reported revenue fell to $10.847 billion from $14.101 billion, while net loss attributable to Icahn Enterprises increased to $684 million from $183 million.
- Energy net sales declined 15% to $9.247 billion, but gross profit increased to $1.228 billion from $1.085 billion; gross margin rose to 13% from 10%. Lower RFS expense and favorable derivative impacts helped, partly offset by lower crack spreads and unfavorable inventory valuation.
- Automotive net sales and other operating revenue fell 28% to $1.685 billion, primarily because Auto Plus was deconsolidated after filing for Chapter 11 on January 31, 2023. The segment recorded a $246 million deconsolidation loss; its remaining Auto Plus equity investment was valued at zero.
- Food Packaging revenue rose 3% and gross margin improved to 21% from 17%. Home Fashion revenue fell 19%; Pharma revenue rose 41% and gross margin improved to 40% from 27%.
- Holding Company debt decreased to $4.847 billion from $5.309 billion after refinancing and repurchases. In December 2023, it issued $700 million of 9.750% notes due 2029 and used proceeds plus cash to repay its remaining 4.750% notes due 2024.
- Outstanding units increased to 429.0 million from 353.6 million, primarily reflecting distributions paid in units and 3.4 million units sold through the at-the-market program.
Outlook, commentary and risks
- Management estimated 2024 capital expenditures of $226–$250 million for Energy, $73 million for Automotive and approximately $29 million across other segments. No consolidated earnings or revenue guidance is provided in the filing.
- Management identified volatile refining margins, commodity prices and RIN costs as material Energy risks. RFS obligations and related litigation remain uncertain; management expected compliance costs to remain significant into 2024 and beyond.
- Auto Plus’s Chapter 11 proceeding and deconsolidation reduced Automotive sales and assets. Management described continuing transformation priorities for Automotive, including inventory, distribution, store and process improvements.
- The filing describes securities and derivative losses, concentrated investment positions and short exposure as risks. At year-end the Investment Funds had 89% long and 125% short notional exposure, or net short exposure of 36%.
- Following a May 2023 short-seller report, the company disclosed consolidated securities class actions, a derivative action and a books-and-records action, as well as SEC Enforcement Division and U.S. Attorney inquiries concerning, among other matters, governance, disclosures, valuation, offerings and Carl Icahn’s loans and pledged assets. Management said it did not currently expect these matters to have a material impact, but no outcome is assured.
- As of December 31, 2023, Icahn and affiliates had pledged approximately 352.7 million units and $1.3 billion of Investment Fund interests against personal loans. The company is not party to those loans; the filing nevertheless describes possible effects on unit sales, fund withdrawals and company liquidity.
- Liquidity also depends on subsidiary cash transfers, which may be restricted by debt agreements. Other disclosed risks include the high coupon on new Holding Company notes, debt covenant compliance, environmental and RFS obligations, interest rates, inflation, conflicts in Ukraine and the Middle East, and potential partnership-tax or investment-company status issues.
- A $1.00-per-unit distribution was declared on February 26, 2024, payable in cash or units at the holder’s election. The filing states future distributions are subject to quarterly review and are not assured. Andrew Teno became President and CEO in February 2024, succeeding David Willetts.
Important facts for investors to verify
- How Investment Fund performance, exposure and redemptions affect the value and liquidity of Icahn Enterprises’ approximately $3.2 billion fund investment.
- Availability of reported cash, including restricted cash and cash held at affiliated partnerships, and the capacity of subsidiaries to transfer funds to the Holding Company.
- Debt maturities, refinancing needs, covenant headroom and the effect of the 9.750% notes on future interest costs.
- Developments in Auto Plus liquidation, the related-party note recovery and the disclosed securities litigation and government inquiries.
- Whether Energy’s RFS liabilities, pending exemption matters and commodity conditions materially change operating results or cash flow; also verify future distribution decisions and the impact of unit issuance.