IEP profits name for the length finishing December 31, 2024.
Symbol supply: The Motley Idiot.
Icahn Enterprises (IEP -2.53%)This fall 2024 Profits CallFeb 26, 2025, 10:00 a.m. ET
Contents:
Ready Remarks Questions and Solutions Name Contributors
Ready Remarks:
Operator
Just right morning, and welcome to the Icahn Enterprises L.P. fourth-quarter 2024 profits name. Presently, all individuals are in a listen-only mode. We will have Andrew Teno, president and CEO; Ted Papapostolou, leader monetary officer; and Robert Flint, leader accounting officer.
I’d now like handy the decision over to Robert Flint who will learn the hole observation.
Rob Flint — Leader Accounting Officer
Thanks, operator. The Personal Securities Litigation Reform Act of 1995 supplies a protected harbor for forward-looking statements we make on this presentation, together with statements referring to our long term efficiency and plans for our companies and attainable acquisitions. Ahead-looking statements is also known through phrases reminiscent of expects, anticipates, intends, plans, believes, seeks, estimates, will, or phrases of an identical which means and come with, however don’t seem to be restricted to, statements in regards to the anticipated long term industry and monetary efficiency of Icahn Enterprises L.P. and its subsidiaries.
Exact occasions, effects, and results might range materially from our expectancies because of plenty of recognized and unknown dangers, uncertainties, and different elements which can be mentioned in our filings with the Securities and Alternate Fee together with financial, aggressive, felony, and different elements. Accordingly, there is not any assurance that our expectancies shall be learned. We suppose no legal responsibility to replace or revise any forward-looking statements must cases alternate, excluding as differently required through regulation. This presentation additionally comprises sure non-GAAP monetary measures, together with adjusted EBITDA.
A reconciliation of such non-GAAP monetary measures to probably the most without delay related GAAP monetary measures will also be discovered at the back of this presentation. We additionally provide indicative internet asset worth. Indicative internet asset worth comprises, amongst different issues, adjustments within the truthful worth of sure subsidiaries which don’t seem to be incorporated in our GAAP profits. All internet source of revenue and EBITDA quantities we can speak about are as a result of Icahn Enterprises until differently specified.
I will now flip it over to Andrew Teno, our leader govt officer.
Andrew Teno — President and Leader Government Officer
Thanks, Rob, and excellent morning, everybody. NAV reduced $223 million from the 0.33 quarter of 2024. The 2 giant occasions all over the quarter had been the decline in CVR Power and an settlement to promote sure homes in our actual property section. CVI declined through $286 million within the quarter.
As we mentioned at the remaining name, crack spreads weakened within the fourth quarter and, when blended with a big turnaround, led CVI to chop its dividend. In keeping with what we consider used to be a ravishing funding alternative, we introduced a young be offering and had been a hit in buying 878,000 stocks. That is lower than we had was hoping for, however we can stay value delicate and track stipulations going ahead. Lately, crack spreads have progressed off their lows, which bodes smartly for CVI.
As well as, we’re excited that the alternate in management might result in the answer of our remarkable litigation referring to small refinery exemptions, which has the possible to take away over $300 million or extra of liabilities. As a reminder, all over the remaining Trump management, Wynnewood won small refinery exemptions. Our actual property section larger $292 million within the quarter. The rise used to be because of a mixture of the sale of sure homes, which led us to truthful worth the rest property, a transformation from how we’ve valued those property in prior sessions.
The GAAP fairness as a result of IEP in actual property held secure. The funding price range had been down roughly 1.6% for the quarter. The most important decliner used to be our funding in Caesars, and the biggest gainer the place our refinery hedges. We ended the quarter with $1.4 billion of money and money equivalents on the conserving corporate and an extra $915 million of money on the price range.
So, as Carl appreciated to mention, we’ve an important conflict chest to benefit from alternatives as they get up. Finally, the Board has maintained the quarterly distribution at $0.50 in keeping with depositary unit. Now, turning to our funding section. In relation to our Best 5 disclosed names, we see really extensive worth advent attainable.
At SWX, we see a gasoline application this is ultimate its ROE hole to friends and isolating the application products and services industry with vital expansion alternative. We see upside in each the gasoline application and the products and services industry. At AEP, we see new control ultimate its ROE hole, making improvements to regulatory results and profiting from super expansion in electrical energy call for because of AI-driven knowledge heart call for. AEP lately introduced the sale of a 20% stake in a portion of its transmission industry, which helped to beef up the stability sheet and used to be identical to issuing stocks at a 70% top rate to the then percentage value.
At Caesars, Carl has vital admire for Tom Reeg and what he has completed. We consider we’re purchasing an excellent industry with super actual property worth, an excellent control workforce this is actively purchasing again stocks and with a rising virtual industry, all at a unfastened money drift yield more than 15%. IFF is a fine quality substances corporate that are meant to see making improvements to natural earnings expansion and extending margins from new control. IFF trades at an important cut price to its friends on EV to EBITDA.
At Bausch, we see really extensive worth each at BHC and BLCO. The price range ended the quarter roughly 22% internet lengthy. Adjusting for our refining hedges, the fund used to be 35% internet lengthy. And now, I will be able to move it over to Ted to hide our managed companies.
Ted Papapostolou — Leader Monetary Officer
Thanks, Andrew. I will be able to get started at our power section. Power section EBITDA used to be 99 million for This fall ’24, in comparison to 204 million in This fall ’23. This lower used to be pushed through lowered throughput and decrease crack spreads.
This fall ’24 refining margin in keeping with throughput barrel used to be $8.37 in comparison to $15.01 within the prior-year quarter. The primary drivers for the lower is because of decrease crack spreads and unfavourable marketplace by-product and stock valuations. This fall ’24 renewable margin in keeping with vegetable oil throughput gallon used to be $0.79 in comparison to a lack of $0.90 within the prior-year quarter. The drivers for the rise had been cheaper price of gross sales and an building up within the HOBO unfold.
This fall ’24 reasonable learned gate costs for UAN declined through 5% to $229 in keeping with ton, and ammonia larger through 3% to $475 in keeping with ton when in comparison to the prior-year quarter. Now, turning to our automobile section. Our automobile industry continues to lag in comparison to prior-year effects because of the self-inflicted wounds we mentioned prior to now. Now we have lately introduced an enduring CEO, who has carried out new projects and techniques to remediate the temporary demanding situations we’re these days experiencing.
Control’s plan anticipates those demanding situations shall be resolved, and the consequences to be normalized through the second one part of 2025. Throughout the quarter, an important tenant in our automobile actual property portfolio made a strategic choice to go out sure places. We won an early termination fee of 42 million, and we’ve begun advertising those places to potential tenants and be expecting to fill them throughout the subsequent 24 months. Now we have considerably finished the go out of our aftermarket portions industry, which shall be finished through the top of Q1 ’25.
Now, turning to our different segments. Actual property This fall ’24 adjusted EBITDA reduced through 5 million in comparison to the prior-year quarter, pushed through lowered gross sales of single-family properties. Meals packaging’s adjusted EBITDA as a result of IEP reduced through 6 million for This fall ’24 as in comparison to the prior-year quarter. Volumes have larger.
On the other hand, a shift in product combine and decrease pricing ended in a discount in internet gross sales. As prior to now discussed, there are alternatives to beef up potency on the vegetation. On the other hand, we don’t be expecting a significant have an effect on till we execute a capital plan to modernize apparatus and cut back the total price construction. House model’s adjusted EBITDA larger through 2 million as in comparison to the prior-year quarter, basically pushed through decrease subject material prices and progressed production efficiencies.
Pharma section’s adjusted EBITDA for This fall ’24 progressed through 1 million as in comparison to the prior-year quarter, basically because of upper prescription expansion. Lately, one in all our developmental remedies cleared an important FDA milestone, and we’ve begun making ready for scientific trials. Now, turning to our liquidity. We handle liquidity on the conserving corporate and at each and every of our running subsidiaries to benefit from sexy alternatives.
As of quarter-end, the conserving corporate had money and investments within the price range of four.1 billion, and our subsidiaries had money and revolver availability of one.5 billion. In abstract, we proceed to concentrate on development asset worth and keeping up liquidity to permit us to capitalize on alternatives inside of and outdoor our current running segments. Thanks. Operator, are you able to please open up the decision for questions?
Questions & Solutions:
Operator
Thanks. [Operator instructions] One second for our first query. It comes from the road of Andrew Berg with Publish Advisory Crew. Please continue.
Andrew Berg — Publish Advisory Crew — Analyst
Thanks. Yeah. Only a couple questions. With admire to the hedge price range, you guys ended with a internet notional lengthy of twenty-two%, and I believe you mentioned it used to be 35% ex the power hedges.
Are you able to job my memory the place you had been on the finish of the 0.33 quarter? As a result of I believe, total, the fund used to be internet brief 2%. I do not recall what the determine used to be ex the power hedges. And can you supply any observation as to what level within the quarter you had flipped that place from being quite detrimental to, clearly, a lot larger share lengthy now?
Andrew Teno — President and Leader Government Officer
Yeah. Hiya, Andrew, excellent morning.
Andrew Berg — Publish Advisory Crew — Analyst
Just right morning.
Andrew Teno — President and Leader Government Officer
So, if you happen to take a look at the hedge fund, while you consider probably the most hedges which can be in there, a large number of them are because of the refining hedges. And if you happen to checked out crack spreads and, I assume, simply on the whole how the refining hedge is traded, after we see crack spreads come down, that is our time to take off a few of the ones hedges. And as crack spreads pass up or different refiners pass up, that is after we put them again on. So, it is simply being opportunistic, I would say.
Andrew Berg — Publish Advisory Crew — Analyst
OK. So, on the finish of the 0.33 quarter, are you able to — I do not know if in case you have that during entrance of you or we wish to practice up afterwards, the place you had been — what that internet 2% brief used to be when we take the hedges out the place you had been.
Andrew Teno — President and Leader Government Officer
Yeah. We will be able to practice up proper after the decision if you need.
Andrew Berg — Publish Advisory Crew — Analyst
OK. Nice. After which with admire to the actual property section, you had a beautiful vital adjustment to the indicative internet asset worth for that section. Are you able to more or less stroll us thru what was making that bounce? I do know the footnote it talks about, I assume, some valuation — third-party valuation paintings.
However are you able to more or less give us slightly bit higher working out the place that used to be and the way that took place and what had been the underlying drivers for this type of vital building up?
Ted Papapostolou — Leader Monetary Officer
Yeah. Hiya, Andrew. It is Ted. Yeah.
So, previous to December thirty first, we felt that GAAP e-book worth used to be a excellent proxy for indicative asset worth for the section. And what modified within the fourth quarter is we signed an settlement to promote sure homes that a long way exceeded the e-book worth. So, because of this tournament, we felt that the GAAP e-book worth not represents the indicative truthful worth. So, consequently, we marked those homes to the expected gross sales value.
And to be constant for the rest property throughout the section, we simply got value determinations and marked the ones homes accordingly. So, that is what you may see the massive bounce off. The driving force is in reality like 290, however you’ll be able to see the true absolute worth is set 300 quarter over quarter.
Andrew Berg — Publish Advisory Crew — Analyst
Yeah. What — what used to be the composition of the ones homes?
Ted Papapostolou — Leader Monetary Officer
You imply the truthful worth bounce? So, those we’ve a sale settlement in position, I’d say it is about roughly a $200 million building up because of the ones homes. And the remainder of the portfolio, simply huge strokes, is set 90 million.
Andrew Teno — President and Leader Government Officer
With a few of them going up and a few taking place.
Ted Papapostolou — Leader Monetary Officer
Yeah, that is an added adjustment.
Andrew Berg — Publish Advisory Crew — Analyst
Used to be this essentially uncooked land, or used to be it retail, administrative center, business? I am simply looking to get a greater sense — single-family house — of what used to be the underlying property that had been such a lot upper than the place you had it marked.
Andrew Teno — President and Leader Government Officer
I believe we discussed at the remaining name that there used to be some homes that we had been browsing at. I believe it is on the press.
Andrew Berg — Publish Advisory Crew — Analyst
Say that once more? I am sorry.
Andrew Teno — President and Leader Government Officer
Yeah. We discussed it on our remaining name, you recognize, that we had been exploring the sale of sure homes. So, I believe if you happen to had been to reference the ones feedback, you would see the place they’re.
Andrew Berg — Publish Advisory Crew — Analyst
OK. I will return and glance. I do not recall what sort of — what form of homes the ones had been. Thanks.
Andrew Teno — President and Leader Government Officer
OK.
Operator
Thanks. [Operator instructions] All proper. As I see no additional questions within the queue, I will be able to flip it again to Andrew Teno for ultimate remarks.
Andrew Teno — President and Leader Government Officer
Thanks. So, I would like to go away with a reminder that right here at Icahn Enterprises, we’re intensely fascinated with our activism technique. Now we have distinctive benefits, together with the Icahn emblem title and a protracted historical past and willingness to salary proxy contest. It’s this observe file which steadily permits us to be invited to sign up for forums and paintings cooperatively with our fellow administrators to make the important thing adjustments that can pressure shareholder worth.
Moreover, given our stability sheet, liquidity, and everlasting capital construction, we be able to soft for whole companies, a device most easily don’t possess. Regardless that our returns will also be lumpy and dissatisfying from time to time as we proceed to concentrate on our activist efforts at each our funding section and regulated companies, we consider they’ll endure fruit for all unitholders. We will discuss quickly. Bye.
Operator
[Operator signoff]
Period: 0 mins
Name individuals:
Rob Flint — Leader Accounting Officer
Andrew Teno — President and Leader Government Officer
Ted Papapostolou — Leader Monetary Officer
Andrew Berg — Publish Advisory Crew — Analyst
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