Icahn Enterprises L.P. Q2 FY2025 earnings call

• NAV increased $252 million from first quarter, driven by positive performance in CVI, offset by decreases in Viskase and Auto Service.
• CVI share price increased by 38%, combined with $32 million share purchases led to significant NAV increase; crack spreads improved, no more planned turnarounds in 2025-2026; CVI paid down $90 million of term loan.
• Hopeful about resolution of RINs litigation regarding small refinery exemptions, which could remove $548 million liability and provide clarity.
• CVI's CEO Dave Lamp to retire, Mark Pytosh to replace as internal promotion.
• Investment funds down approx 0.5% for quarter, but excluding refining hedges up 2%.
• Auto Service division revenue improved in May and June, will accelerate in July.
• Pharma segment approved initiation of VIVUS' pivotal trial for VI-0106.
• Investment segment sees value creation potential in portfolio; AEP, SWX, Caesars have positive aspects.
• Liquidity maintained at holding company and operating subsidiaries, with $3.5 billion at holding company and $1.1 billion at subsidiaries.

Energy segment: Consolidated EBITDA was negative $24 million in Q2 '25 compared to $103 million in Q2 '24. CVR's refining business was negatively impacted by unfavorable mark-to-market RINs valuation and reduced throughput volumes, offset by positive performance in the fertilizer business. Auto segment: Q2 '25 automotive service revenues decreased by $8 million compared to prior year quarter, same-store revenues relatively flat; positive trajectory due to investment in labor, inventory, etc., closed 22 underperforming locations, plan to add 16 by year-end. Real Estate segment: Q2 '25 adjusted EBITDA decreased by $2 million compared to prior year quarter, sold one country club. Food Packaging segment: Adjusted EBITDA decreased by $9 million in Q2 '25 due to lower volume, higher inefficiencies, etc. Home fashion and pharma: Adjusted EBITDA flat compared to prior year quarter. CVI: NAV increased $252 million from first quarter, driven primarily by positive performance in CVI; CVI share price increased by 38%, combined with $32 million share purchases led to $561 million increase from first quarter; crack spreads improved, no more planned turnarounds in 2025-2026; CVI paid down $90 million of term loan. Investment funds: Down approx 0.5% for the quarter, primarily driven by gains in consumer cyclical sector, offset by broad market and refining hedges; excluding refining hedges, fund performance positive return of 2%. Auto Service division: Revenue improved to 1% growth in May and June, will accelerate in July. Pharma segment: Approved initiation of VIVUS' pivotal trial for VI-0106.

• Actual events, results and outcomes may differ materially from expectations due to various known and unknown risks, uncertainties and other factors like economic, competitive, legal factors.
• Presentation includes non-GAAP financial measures like adjusted EBITDA, and indicative net asset value which has certain components not in GAAP earnings.

Q: Just a quick question with respect to the decrease in the cash balance, was most of that -- I'm referring to cash at the holding company level, the $1.086 billion. Was most of that attributable to the increase in the CVR shares? Or can you just help reconcile the change from last quarter?

A: Yes. The big drivers of the decrease is we have our interest payments of 4 of the 6 tranches paid in the quarter. And we also had 2 of the LP distributions paid because in Q1, you don't have one, but it hits in Q2, those are 2 big drivers. And to an extent, the CVR repurchase, but that was about $32 million in the quarter.