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Item 7. Management’s Discussion and Analysis

2022-02-25 compared with 2021-02-26 · 182 added, 193 removed, 326 unchanged (53% of the section changed)

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Icahn Enterprises L.P.

(“Icahn Enterprises”) is a master limited partnership formed in Delaware on February 17, 1987.

Icahn Enterprises Holdings L.P.

(“Icahn Enterprises Holdings”) is a limited partnership formed in Delaware on February 17, 1987.

References to “we,” “our” or “us” herein include both Icahn Enterprises and Icahn Enterprises Holdings and their subsidiaries, unless the context otherwise requires.

Icahn Enterprises owns a 99% limited partner interest in Icahn Enterprises Holdings.

Icahn Enterprises Holdings and its subsidiaries own substantially all of the assets and liabilities of Icahn Enterprises and conduct substantially all of its operations.

Therefore, the financial results of Icahn Enterprises and Icahn Enterprises Holdings are substantially the same, with differences relating primarily to the allocation of the general partner interest.

We do not discuss Icahn Enterprises and Icahn Enterprises Holdings separately unless we believe it is necessary to an understanding of the businesses.

(“Icahn Enterprises”) is a master limited partnership formed in Delaware on February 17, 1987 and headquartered in Sunny Isles Beach, Florida.

We are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses:

Investment, Energy, Automotive, Food Packaging, Metals, Real Estate, Home Fashion and, as of December 2020, Pharma.

We also report the results of our Holding Company, which includes the results of certain subsidiaries of Icahn Enterprises and Icahn Enterprises Holdings (unless otherwise noted), and investment activity and expenses associated with our Holding Company.

Our historical results also report the results of our Mining segment, until sold on August 1, 2019, and our Railcar segment through the date we sold our last remaining railcars on lease, which occurred in the third quarter of 2018.

Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion and Pharma.

In addition, we operated our Metals segment until sold in December 2021.

We also report the results of our Holding Company, which includes the results of certain subsidiaries of Icahn Enterprises (unless otherwise noted), and investment activity and expenses associated with our Holding Company.

Our historical results also report the results of our Mining segment, until sold on August 1, 2019.

References to “we,” “our” or “us” herein include Icahn Enterprises and its subsidiaries, unless the context otherwise requires.

Icahn Enterprises owns a 99% limited partner interest in Icahn Enterprises Holdings L.P.

(“Icahn Enterprises Holdings”).

Icahn Enterprises Holdings and its subsidiaries own substantially all of our assets and liabilities and conduct substantially all of our operations.

Icahn Enterprises G.P.

(“Icahn Enterprises GP”), which is indirectly owned and controlled by Mr.

Icahn, owns a 1% general partner interest in each of Icahn Enterprises and Icahn Enterprises Holdings as of December 31, 2021, representing an aggregate 1.99% general partner interest in Icahn Enterprises Holdings and us.

Icahn and his affiliates owned approximately 88% of Icahn Enterprises’ outstanding depositary units as of December 31, 2021.

Significant Transactions and Developments

Current Economic Conditions

In March 2020, the World Health Organization categorized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency.

The COVID-19 pandemic, and actions taken by governments and others in response thereto, has negatively impacted the global economy, financial markets, and the industries in which our subsidiaries operate.

Our consolidated results of operations and financial condition have been impacted primarily by the volatility in the fair value of investments held by our Investment segment and the Holding Company (primarily unrealized) as well as declines in the global demand for refined products, especially gasoline and diesel fuels, with respect to our Energy segment.

The impact on our businesses has also included the acceleration of selective planned store closures in our Automotive segment, lowering current year forecasts across various segments and recording write-downs to inventories.

The extent and duration of the impact on our future results of operations, liquidity and financial condition is uncertain and may be significant.

However, we believe that we and our subsidiaries have sufficient available liquidity to meet anticipated cash requirements for at least the next twelve months.

Debt Issuances

On October 27, 2021, IEP Utility Holdings LLC (“IEP Utility”), a wholly owned subsidiary of Icahn Enterprises Holdings, commenced a cash offer (the “SWX Tender Offer”) to acquire, subject to certain terms and conditions, all of the issued and outstanding shares of common stock of Southwest Gas Holdings, Inc.

(“Southwest Gas”) not held by affiliates of Icahn Enterprises Holdings at a price of $75.00 per share.

Southwest Gas, through its wholly owned subsidiaries, is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions of Arizona, Nevada, and California.

Southwest Gas’ shares of common stock are listed on the New York Stock Exchange under the symbol “SWX.” The SWX Tender Offer has been extended and is scheduled to expire at 12:00 midnight, New York City Time, on March 23, 2022, unless the offer is further extended.

Sale of PSC Metals, LLC

On December 7, 2021, we closed on the previously announced sale of 100% of the equity interests in PSC Metals, LLC (“PSC Metals”).

In connection with this sale, we received proceeds of $323 million and recorded a pretax gain on disposition of assets of $163 million in the fourth quarter of 2021.

As a result of the sale of PSC Metals, we no longer operate a Metals segment.

Debt Issuances and Repayments

In January 2021, Icahn Enterprises and Icahn Enterprises Finance Corp.

(together the “Issuers”) issued an additional $600 million in aggregate principal amount of 4.750% senior unsecured notes due 2024 (the “New 2024 Notes”) and an additional $250 million in aggregate principal amount of 5.250% senior unsecured notes due 2027 (the “New 2027 Notes”) The proceeds from these notes, together with cash on hand, were used to redeem all of our prior outstanding $1.35 billion principal amount of 5.875% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

In January 2021, the Issuers issued $750 million in aggregate principal amount of 4.375% senior unsecured notes due 2029 (the “New 2029 Notes”).

The proceeds from these notes, together with cash on hand, were used to redeem $750 million principal amount of our 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

Acquisition of Vivus, Inc.

In December 2020, we acquired all of the outstanding common stock of Vivus, Inc.

(“Vivus”) upon its emergence from bankruptcy.

Prior to Vivus’ emergence from bankruptcy, we held an investment in all of Vivus’ convertible corporate debt securities as well as all of its other outstanding debt.

As a result of this transaction, we consolidate the results of Vivus beginning December 2020 and report the results within our new Pharma segment.

(together the “Issuers”) issued $750 million in aggregate principal amount of 4.375% senior unsecured notes due 2029 (the “New 2029 Notes”).

The proceeds from the New 2029 Notes were used to redeem $750 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

In April 2021, the Issuers issued $455 million in aggregate principal amount of additional 5.250% senior unsecured notes due 2027.

The proceeds from this issuance were used to redeem the remaining $455 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

In February 2022, we repaid all of our outstanding $500 million aggregate principal amount of 6.750% senior unsecured notes due 2024 at par.

Results of Operations

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In addition to the summarized financial results below, refer to Note 13, “Segment and Geographic Reporting,” to the consolidated financial statements for a reconciliation of each of our reporting segment’s results of continuing operations to our consolidated results.

The comparability of our summarized consolidated financial results presented below is affected by, among other factors, (i) the performance of the Investment Funds, (ii) the results of our Energy segment’s operations, impacted by the demand and prices for its products, (iii) impairment charges, primarily in our Automotive segment in 2018 and (iv) the sale of Ferrous Resources in 2019.

Throughout 2020 and 2021, the COVID-19 pandemic, and actions taken by governments and others in response thereto, has negatively impacted the global economy, financial markets, and certain of the industries in which our subsidiaries operate.

Our consolidated results of operations and financial condition have been impacted primarily by the volatility in the fair value of investments held by our Investment segment and the Holding Company as well as volatility in the global demand for refined products, especially gasoline and diesel fuels, with respect to our Energy segment.

The impact on our businesses has also included the acceleration of selective planned store closures in our Automotive segment and recording write-downs to inventories.

The economic conditions that persisted for much of 2020 have improved in 2021 as more governments reduce restrictions and more businesses resume operations.

The comparability of our summarized consolidated financial results presented below is affected by, among other factors, (i) the performance of the Investment Funds, (ii) the results of our Energy segment’s operations, impacted by the demand and prices for its products and (iii) the sales of PSC Metals in 2021 and Ferrous Resources in 2019.

Refer to our respective segment discussions and “Other Consolidated Results of Operations,” below for further discussion.

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As of December 31, 2021 and 2020, the total fair market value of investments in the Investment Funds made by Mr.

Icahn and his affiliates (excluding us), was approximately $5.0 billion and $4.5 billion, respectively.

Icahn and his affiliates (excluding us and Brett Icahn), was approximately $5.0 billion and $5.0 billion, respectively.

Our Investment segment’s results of operations are reflected in net income (loss) in the consolidated statements of operations.

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Future funds allocated to the Investment Funds may increase or decrease based on the contributions and redemptions by our Holding Company, Mr.

Icahn and his affiliates and by Brett Icahn, son of Mr.

Icahn and his affiliates and by Brett Icahn, Mr.

Additionally, historical performance results of the Investment Funds are not indicative of future results as past market conditions, investment opportunities and investment decisions may not occur in the future.

Changes in general market conditions coupled with changes in exposure to short and long positions have significant impact on our Investment segment’s results of operations and the comparability of results of operations year over year and as such, future results of operations will be impacted by our future exposures and future market conditions, which may not be consistent with prior trends.

Changes in general market conditions coupled with changes in exposure to short

and long positions have significant impact on our Investment segment’s results of operations and the comparability of results of operations year over year and as such, future results of operations will be impacted by our future exposures and future market conditions, which may not be consistent with prior trends.

Refer to the “Investment Segment Liquidity” section of our “Liquidity and Capital Resources” discussion for additional information regarding our Investment segment’s exposure as of December 31, 2021.

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Short positions

For 2021, the Investment Funds’ negative performance was driven by net losses in short positions, offset in part by net gains in long positions.

The negative performance of our Investment segment’s short positions was driven primarily by the negative performance of broad market hedges of $1.2 billion, an energy sector investment of $752 million and a consumer, cyclical sector investment of $506 million.

The aggregate performance of investments with net losses across various sectors accounted for an additional negative performance of our Investment segment’s short positions.

The negative performance of our Investment segment’s short positions was offset in part by gains from a consumer, cyclical sector investment of $204 million.

The positive performance of our Investment segment’s long positions was driven primarily by gains from two energy sector investments aggregating approximately $1.7 billion, a consumer, non-cyclical sector investment of $420 million and a utilities sector investment of $220 million.

The aggregate performance of investments with net gains across various sectors accounted for an additional positive performance of our Investment segment’s long positions.

For 2020, the Investment Funds’ negative performance was driven by net losses in their short positions and, to a lesser extent, net losses in their long positions.

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Net losses in long positions were further offset in part by the aggregate performance of investments with net gains across various other sectors.

For 2019, the Investment Funds’ negative performance was driven by net losses in their short positions offset in part by net gains in their long positions.

The negative performance of our Investment segment’s short positions was driven by the negative performance of broad market hedges of approximately $2.5 billion and the aggregate performance of short positions with net losses across various sectors.

The positive performance of our Investment segment’s long positions was driven by gains from a consumer, cyclical sector investment, two technology sector investments, two financial sector investments and a consumer, non-cyclical sector investment with gains aggregating approximately $1.7 billion.

The aggregate performance of investments with net gains across various other sectors accounted for an additional $495 million positive performance of our Investment segment’s long positions.

The positive performance of long positions was offset in part by losses from a consumer, non-cyclical sector investment, an energy sector investment and a technology sector investment with losses aggregating $727 million.

Our Energy segment is primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing businesses.

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The COVID-19 pandemic has also resulted in significant business and operational disruptions, including business closures, liquidity strains, destruction of non-essential demand, as well as supply chain challenges, travel restrictions, stay-at home orders, and limitations on the availability of the workforce.

As a result, the demand for gasoline and diesel in the regions that our Energy segment operates have declined for 2020 compared to 2019.

Continuing concerns over the negative effects of the COVID-19 pandemic on economic and business prospects across the world have contributed to increased market and price volatility and have diminished expectations for the global economy and may precipitate a prolonged economic slowdown or recession.

As a result, the demand for gasoline and diesel in the regions that our Energy segment operates declined beginning in the first quarter of 2020.

The declines were amplified in the first quarter of 2020 by market plays between the world’s largest oil producers.

The simultaneous shocks in oil supply and demand has resulted in a decline in the price of crude oil and lead to a significant decrease in the price of refined products sold by our Energy segment.

In addition to current market conditions, there are long-term factors that may impact the demand for refined products.

The simultaneous shocks in oil supply and demand have resulted in a decline in the price of crude oil and lead to a significant decrease in the price of refined products sold by our Energy segment.

However, beginning in late 2020 and into 2021, the U.S.

market for refined products has improved and demand has increased as travel restrictions and stay-at-home orders have been eased.

In addition to recent market conditions, there are long-term factors that may impact the demand for refined products.

These factors include mandated renewable fuels standards, proposed climate change laws and regulations, and increased mileage standards for vehicles.

The petroleum business is also subject to the Renewable Fuel Standard of the United States Environmental Protection Agency (“RFS”), which requires it to either blend “renewable fuels” with its transportation fuels or purchase renewable identification numbers (“RINs”), in lieu of blending.

The petroleum business is also subject to the Renewable Fuel Standard of the United States Environmental Protection Agency, which requires the operating companies in our Energy segment to either blend “renewable fuels” with their transportation fuels or purchase renewable identification numbers (“RINs”), to the extent available, in lieu of blending, or to seek other exemptions.

The price of RINs has been extremely volatile and the future cost of RINs for the petroleum business is difficult to estimate.

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Refer to Note 17, “Commitments and Contingencies,” to the consolidated financial statements for further discussion of RINs.

In December 2020, our Energy segment approved a renewable diesel project at one of its refineries, which would convert the refinery’s hydrocracker to a renewable diesel unit (“RDU”) capable of producing 100 million gallons of renewable diesel per year and approximately 180 million RINs annually.

As a result of conversion, the crude oil capacity of the refinery will be reduced.

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Our Energy segment has additional plans to add pretreating capabilities for the RDU and construction of a similar facility at its other refinery.

These collective renewable diesel efforts could reduce our Energy segment’s RFS exposure.

However, any actions taken by the Supreme Court, resulting administration efforts under the RFS, such as denial of existing or previous waiver applications, and market conditions could significantly impact the amount by which our Energy segment’s renewable diesel business.

These collective renewable diesel efforts could reduce our Energy segment’s Renewable Fuels Standard (“RFS”) exposure.

The following table presents our Energy segment’s net sales, cost of goods sold and gross margin:

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Cost of goods sold

Net sales for our Energy segment decreased by approximately $2.4 billion (38%) for the year ended December 31, 2020 as compared to the comparable prior year period, primarily due to a decrease in our petroleum business’ net sales, which decreased approximately $2.4 billion.

The decrease in the petroleum business’ net sales was primarily due to a decrease in gasoline sales as well as a decrease in sales of distillates attributable to a decrease in volumes and unfavorable pricing conditions.

These decreases were the result of reduced demand and excess supply attributable to the current market dynamics resulting from government actions to address the COVID-19 pandemic.

Additionally, during 2020, scheduled maintenance at one refinery has contributed to the decline in volumes.

Our nitrogen fertilizer business’ net sales decreased $54 million primarily due to a decrease in UAN sales due to unfavorable pricing, partially offset by an increase in volumes.

Cost of goods sold for our Energy segment decreased by approximately $1.5 billion (27%) for the year ended December 31, 2020 as compared to the comparable prior year period.

The decrease was primarily due to our petroleum business as a result of lower cost of consumed crude oil.

The lower cost of consumed crude oil was due to a decrease in volumes resulting from the scheduled maintenance, as discussed above, reduced utilization at one refinery, lower crude oil prices and higher derivative gains of $36 million.

These decreases were offset in part by a $58 million write-down of inventory to net realizable value in the first quarter of 2020 and a $147 million increase in the net cost of RINs.

Gross margin for our Energy segment decreased by $891 million for the year ended December 31, 2020 as compared to the comparable prior year period.

Net sales for our Energy segment increased by approximately $3.3 billion (84%) for the year ended December 31, 2021 as compared to the comparable prior year period due to an increase in our petroleum business’ net sales, which increased approximately $3.1 billion, as well as an increase in our nitrogen fertilizer business’ net sales, which increased $183 million over the comparable periods.

The increase in the petroleum business’ net sales was primarily due to an increase in sales of gasoline and distillates attributable to an increase in volumes and more favorable pricing conditions.

Volumes were lower in the comparable prior year period due to the full planned turnaround at one of the refineries while another refinery experienced reduced utilization in response to demand reductions driven by the impacts of the COVID-19 pandemic.

Our nitrogen fertilizer business’ net sales increased primarily due to an increase in urea ammonium nitrate (“UAN”) sales primarily due to favorable pricing conditions.

Cost of goods sold for our Energy segment increased by approximately $2.9 billion (70%) for the year ended December 31, 2021 as compared to the comparable prior year period.

The increase was primarily due to our petroleum business as a result of higher cost of consumed crude oil.

The higher cost of consumed crude oil was due to an increase in volumes, as discussed above, as well as a $245 million increase in the net cost of RINs and lower derivative performance of $99 million.

Gross margin for our Energy segment improved by $407 million for the year ended December 31, 2021 as compared to the comparable prior year period.

Gross margin as a percentage of net sales was 2% and (6)% for the year ended December 31, 2021 and 2020, respectively.

The decrease in the gross margin as a percentage of net sales was primarily attributable to the petroleum business, which was primarily due to unfavorable market pricing and crack spreads, offset in part by higher derivative gains over the comparable periods.

Our Automotive segment’s results of operations are generally driven by the distribution and installation of automotive aftermarket parts and are affected by the relative strength of automotive part replacement trends, among other factors.

Our Automotive segment is in the process of implementing a multi-year transformation plan, which includes the integration and restructuring of its businesses.

The improvement in the gross margin as a percentage of net sales was primarily attributable to the petroleum business, which was primarily due to higher crack spreads, offset in part by an increase in the net cost of RINs and lower derivative performance.

Our Automotive segment’s results of operations are generally driven by the distribution and installation of automotive aftermarket parts and the demand for automotive service and maintenance, and is affected by the relative strength of automotive part replacement trends, among other factors.

Our Automotive segment has been in the process of implementing a multi-year transformation plan, which includes the restructuring of its businesses.

The transformation plan includes operating the automotive services and aftermarket parts businesses as separate businesses, streamlining Icahn Automotive’s corporate and field support teams, facility closures, consolidations and conversions, inventory optimization actions, and the re-focusing of its automotive parts business on certain core markets.

Costs to implement the transformation plan will include restructuring charges, which will be recorded when specific plans are approved, and which may be significant.

As part of this plan, in 2021 Icahn Automotive entered into an agreement to sell certain inventory assets relating to its aftermarket parts business at 109 locations and a distribution center in California and certain other inventory and fixed assets in California.

Aftermarket parts sales from these locations aggregated $78 million during the year ended December 31, 2021.

Costs to implement the transformation plan include restructuring charges, which are recorded when specific plans are approved.

Our Automotive segment’s priorities include:

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Cost of goods sold and other expenses from operations

Net sales and other revenue from operations for our Automotive segment for the year ended December 31, 2020 decreased by $406 million (14%) as compared to the comparable prior year period.

The decrease was attributable to a decrease in aftermarket parts sales of $261 million (17%) and a decrease in automotive services revenues of $145 million (11%).

On an organic basis, aftermarket parts sales decreased $106 million over the comparable periods due to a decrease in commercial sales of $59 million (6%) and a decrease in retail sales of $47 million (12%).

Store closures related to the transformation plan accounted for another $155 million decrease in aftermarket parts sales.

The decrease in automotive services revenues represents a decrease on a primarily organic basis.

The COVID-19 pandemic, and the impacts of the actions taken by governments and others, have significantly contributed to the decline in revenues, in particular the automotive services revenues and commercial sales revenues which, until March 2020, were experiencing growth on an organic basis.

Cost of goods sold and other expenses from operations for the year ended December 31, 2020 decreased by $296 million (14%) as compared to the comparable prior year period.

The decrease was due to lower sales volumes, as described above.

Net sales and other revenues from operations for our Automotive segment for the year ended December 31, 2021 decreased by $94 million (4%) as compared to the comparable prior year period.

The decrease was attributable to a decrease in aftermarket parts sales of $243 million (19%), offset in part by an increase in automotive services revenue of $149 million (12%).

Store closures related to the transformation plan accounted for a $249 million decrease in aftermarket parts sales, which was offset in part by a $6 million increase in aftermarket parts sales on an organic basis.

The increase in automotive services revenues represents an increase on a primarily organic basis as sales have improved over the comparable prior year period.

The COVID-19 pandemic, and the impacts of the actions taken by governments and others, have significantly contributed to a decline in revenues in 2020, which have recovered significantly in 2021.

Cost of goods sold and other expenses from operations for the year ended December 31, 2021 increased by $8 million as compared to the comparable prior year period.

The increase was primarily due to a $56 million inventory obsolescence write-down and higher costs associated with higher services revenues, offset in part by lower costs attributable to lower aftermarket parts sales.

Gross margin on net sales and other revenue from operations for the year ended December 31, 2021 decreased by $102 million (15%) as compared to the comparable prior year period.

Gross margin as a percentage of net sales and other revenue from operations was 28% for each of the years ended December 31, 2020 and 2019.

Our Automotive segment has experienced some margin rate contraction for its aftermarket parts businesses due to the effect of stores that were in the process of closing down and the shift in aftermarket parts sales from retail to commercial, as well as from the negative impact from the COVID-19 pandemic, as described above.

This was offset by the acceleration of planned store closures, which resulted in a greater portion of our Automotive segment’s business being derived from higher margin automotive services, as described above.

Gross margin as a percentage of net sales and other revenue from operations was 24% and 28% for the years ended December 31, 2021 and 2020, respectively.

Gross margins were negatively impacted by the write down to inventory, as described above, and the continuation of store closures however, this was offset in part by an increase in services revenues, which had a positive impact on gross margins.

Food Packaging

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Net sales for the year ended December 31, 2021 increased $7 million (2%) as compared to the comparable prior year period.

The increase was due to an increase of $17 million in volumes and an increase of $7 million due to price and product mix.

Cost of goods sold for the year ended December 31, 2020 increased by $15 million (5%) as compared to the comparable prior year period due to an increase in volumes and lower absorption of manufacturing costs.

The increase was due to an increase in price and product mix as well as the favorable effects of foreign exchange, offset in part by lower volumes.

Cost of goods sold for the year ended December 31, 2021 increased by $16 million (5%) as compared to the comparable prior year period due to the effects raw material price inflation,

manufacturing variances and distribution costs.

Gross margin as a percentage of net sales was 18% and 20% for the year ended December 31, 2021 and 2020, respectively.

The scrap metals business is highly cyclical and is substantially dependent upon the overall economic conditions in the United States and other global markets.

Ferrous and non-ferrous scrap has been historically vulnerable to significant declines in consumption and product pricing during prolonged periods of economic downturn or stagnation.

Net sales for the year ended December 31, 2020 decreased by $27 million (8%) compared to the comparable prior year period due to lower shipping volumes driven by the impact of the COVID-19 pandemic.

Cost of goods sold for the year ended December 31, 2020 decreased by $45 million (13%) compared to the comparable prior year period due to lower material costs due to lower volumes and market prices.

Gross margin as a percentage of net sales was less than 5% and (1)% for the year ended December 31, 2020 and 2019, respectively.

Our Real Estate segment consists primarily of investment properties, the development and sale of single-family homes, and the management of a country club.

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Our Home Fashion segment is significantly influenced by the overall economic environment, including consumer spending, at the retail level, for home textile products.

Net sales for the year ended December 31, 2020 increased by $1 million (1%) compared to the comparable prior year period due to a business acquired in the second quarter of 2019, which accounted for an increase of $21 million, and an increase in sales from newly added facemasks of $15 million, resulting from the COVID-19 pandemic, offset in part by a $35 million decrease from existing businesses, primarily as a result of the current economic conditions.

Cost of goods sold for the year ended December 31, 2020 decreased by $9 million (6%) compared to the comparable prior year period due to a decrease in sales from existing businesses, as discussed above, as well as a shift to lower cost products, such as facemasks, offset in part by an increase from the acquired business.

Net sales for the year ended December 31, 2021 increased by $9 million (5%) compared to the comparable prior year period primarily due to the reduced impact of the COVID-19 pandemic on our Home Fashion segment’s hospitality and department store businesses, offset in part by a decline resulting from lower demand for facemasks.

Cost of goods sold for the year ended December 31, 2021 increased $9 million (6%) compared to the comparable prior year period due to higher material and freight costs.

Gross margin as a percentage of net sales was 19% and 20% for the year ended December 31, 2021 and 2020, respectively.

The increase is due to the reduction in sales to certain lower margin customers, the business acquired having higher margins than the existing businesses and due to the addition of higher margin facemask products.

The decrease is due to higher material and freight costs and a decline in the sale of certain higher margin products.

The scrap metals business is highly cyclical and is substantially dependent upon the overall economic conditions in the United States and other global markets.

Ferrous and non-ferrous scrap has been historically vulnerable to significant declines in consumption and product pricing during prolonged periods of economic downturn or stagnation.

As discussed above, we sold PSC Metals on December 7, 2021, which impacts the comparability of the results of operations discussed below.

Net sales for the year ended December 31, 2021 increased by $211 million (67%) compared to the comparable prior year period primarily due to higher volumes and higher selling prices.

Cost of goods sold for the year ended December 31, 2021 increased by $183 million (61%) compared to the comparable prior year period due to higher volumes as well as higher material costs.

Gross margin as a percentage of net sales was 8% and 5% for the year ended December 31, 2021 and 2020, respectively, with the improvement primarily due to higher material margins as the prior year period was negatively impacted by the effects of the COVID-19 pandemic.

Holding Company

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As discussed in Note 1, "Description of Business,"

to the consolidated financial statements, we sold Ferrous Resources, resulting in a pretax gain on disposition of assets of $252 million for the year ended December 31, 2019.

to the consolidated financial statements, we sold PSC Metals, resulting in a pretax gain on disposition of assets of $163 million for the year ended December 31, 2021.

In addition, we sold Ferrous Resources, resulting in a pretax gain on disposition of assets of $252 million for the year ended December 31, 2019.

Selling, General and Administrative

Our consolidated selling, general and administrative during the year ended December 31, 2020 decreased by $184 million (13%) as compared to the comparable prior year period, primarily due to (i) lower occupancy costs for various locations and other general and administrative costs due to the current market conditions for our Automotive segment, (ii) lower deferred compensation and other payroll related costs for our Energy segment, (iii) lower compensation costs for our Investment segment and (iv) the sale of our former Mining segment in August 2019, offset in part by an increase attributable to our Real Estate segment primarily for the demolition costs relating to a property not in service.

Restructuring

Our consolidated restructuring, net for the years ended December 31, 2020 and 2019 primarily relates to our Automotive segment’s transformation plan and restructuring activities at our Food Packaging segment.

Our Automotive segment’s restructuring, net increased $2 million over the comparable periods as it continues to implement its multi-year transformation plan.

Our Food Packaging segment’s restructuring, net was higher in 2019 by $7 million due to restructuring charges for employee costs relating to certain of its European operations.

Refer to Note 13, “Segment and Geographic Reporting,” to the consolidated financial statements for net restructuring charges recorded by each of our segments.

Our consolidated selling, general and administrative during the year ended December 31, 2021 increased by $50 million (4%) as compared to the comparable prior year period primarily due to the addition of the results of our Pharma segment for a full year, our Energy segment, primarily due to higher share-based compensation as well as higher compensation costs for our Investment segment, offset in part by lower costs resulting from our Automotive segment, due to store closures and our Real Estate segment, which incurred additional costs in the second quarter of 2020 relating to the demolition of one of its properties.

Refer to Note 5, “Fair Value Measurements,” and Note 9, “Goodwill and Intangible Assets, Net,” to the consolidated financial statements for a discussion of impairments of assets, which were not significant.

Interest Expense

Our consolidated interest expense during the year ended December 31, 2020 increased by $83 million (14%) as compared the comparable prior year period.

The increase was primarily due to higher interest expense from our Investment segment attributable to an increase in average due to broker balances over the respective periods as well as higher interest expense from our Energy segment as a result of certain debt offerings in the first quarter of 2020, which resulted in additional debt outstanding.

These increases were offset in part by lower interest expense for our Automotive segment, due to lower debt outstanding and lower variable rate interest, as well as due to our Holding Company as a result of certain debt refinancings in the first quarter of 2020, which resulted in outstanding debt with lower interest rates.

Our consolidated interest expense during the year ended December 31, 2021 decreased by $22 million (3%) as compared to the comparable prior year period.

The decrease was primarily due to lower interest expense for our Holding Company and Energy segment due to lower weighted average interest rates resulting from their respective debt refinancings.

This was offset in part by an increase in interest expense for our Investment segment relating to its derivatives and margin balances.

Income Tax Expense

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In addition, our subsidiaries are not obligated to make funds available to us and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements.

As of December 31, 2020, our Holding Company had cash and cash equivalents of $925 million and total debt of approximately $5.8 billion.

As of December 31, 2021, our Holding Company had cash and cash equivalents of $1.7 billion and total debt of approximately $5.8 billion.

As of December 31, 2021, our Holding Company had investments in the Investment Funds with a total fair market value of approximately $4.2 billion.

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4.375% senior unsecured notes due 2029

Holding Company debt consists of various issues of fixed-rate senior unsecured notes issued by the Issuers and guaranteed by Icahn Enterprises Holdings (the “Guarantor”).

Interest on each tranche of senior unsecured notes are payable semi-annually.

In January 2020, the Issuers issued an additional $600 million in aggregate principal amount of the New 2024 Notes and an additional $250 million in aggregate principal amount of the New 2027 Notes.

The additional proceeds from these notes, together with cash on hand, were used to redeem all of our prior outstanding $1.35 billion principal amount of 5.875% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

In January 2021, the Issuers issued $750 million in aggregate principal amount of the New 2029 Notes.

Holding Company debt consists of various issues of fixed-rate senior unsecured notes issued by Icahn Enterprises and Icahn Enterprises Finance Corp.

(together the “Issuers”) and guaranteed by Icahn Enterprises Holdings (the “Guarantor”).

Interest on each tranche of senior unsecured notes is payable semi-annually.

In January 2021, the Issuers issued $750 million in aggregate principal amount of 4.375% senior unsecured notes due 2029 (the “New 2029 Notes”).

The proceeds from the New 2029 Notes were used to redeem $750 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

Interest on the New 2029 Notes is payable semi-annually.

In April 2021, the Issuers issued $455 million in aggregate principal amount of additional 5.250% senior unsecured notes due 2027.

The proceeds from this issuance were used to redeem the remaining $455 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses.

Each of our senior unsecured notes and the related guarantees are the senior unsecured obligations of the Issuers and rank equally with all of the Issuers’ and the Guarantor’s existing and future senior unsecured indebtedness and senior to all of the Issuers’ and the Guarantor’s existing and future subordinated indebtedness.

Each of our senior unsecured notes and the related guarantees are effectively subordinated to the Issuers’ and the Guarantor’s existing and future

secured indebtedness to the extent of the collateral securing such indebtedness.

Each of our senior unsecured notes and the related guarantees are effectively subordinated to the Issuers’ and the Guarantor’s existing and future secured indebtedness to the extent of the collateral securing such indebtedness.

Each of our senior unsecured notes and the related guarantees are also effectively subordinated to all indebtedness and other liabilities of the Issuers’ subsidiaries other than the Guarantor.

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The indentures also restrict the creation of liens, mergers, consolidations and sales of substantially all of our assets, and transactions with affiliates.

Additionally, each of the senior unsecured notes outstanding as of December 31, 2020, except for the New 2024 Notes, the New 2027 Notes and the New 2029 Notes, are subject to optional redemption premiums in the event we redeem any of the notes prior to certain dates as described in the indentures.

Additionally, each of the senior unsecured notes outstanding as of December 31, 2021, except for the 4.750% senior unsecured notes due 2024, the 5.250% senior unsecured notes due 2027 and 4.375% senior unsecured notes due 2029, are subject to optional redemption premiums in the event we redeem any of the notes prior to certain dates as described in the indentures.

As of December 31, 2021 and 2020, we were in compliance with all covenants, including maintaining certain minimum financial ratios, as defined in the indentures.

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however, we are permitted to issue new notes in connection with debt refinancings of existing notes.

In February 2022, we repaid all of our outstanding $500 million aggregate principal amount of 6.750% senior unsecured notes due 2024 at par.

Future Debt Service Obligations

In January 2021, we redeemed $750 million principal amount of our 6.250% senior unsecured notes due 2022, as described above, and our Holding Company has $455 million in principal amount remaining on such notes, which mature on February 1, 2022.

For 2021, interest payments on our Holding Company’s senior unsecured notes will be approximately $333 million, including the effects of the debt refinancing transaction in January 2021, as described above.

Such interest payments, which do not contemplate any other potential future debt refinancings, will be approximately $311 million for 2022, $297 million for 2023 and an aggregate of $739 million for 2024 through 2029.

2019 At-The-Market Offering

On May 2, 2019, Icahn Enterprises announced the commencement of its “at-the-market” offering pursuant to its Open Market Sale Agreement, pursuant to which Icahn Enterprises may sell its depositary units, from time to time, during the term of the program ending on March 31, 2021, for up to $400 million in aggregate sale proceeds.

During the year ended December 31, 2020, Icahn Enterprises sold 1,908,099 depositary units pursuant to this agreement, resulting in gross proceeds of $101 million.

As of December 31, 2020, Icahn Enterprises may sell its depositary units for up to an additional $244 million in aggregate sale proceeds pursuant to this agreement.

Interest payments on our Holding Company’s senior unsecured notes, including the effects of the debt repayment in January 2022, as described above, will be approximately $308 million for 2022, $290 million for each of 2023 and 2024, $237 million for 2025 and an aggregate of $276 million for 2026 through 2029.

At-The-Market Offerings

In May 2019, Icahn Enterprises entered into a new Open Market Sale Agreement, pursuant to which Icahn Enterprises was able to sell its depositary units, from time to time, for up to $400 million in aggregate sale proceeds, under its ongoing “at-the-market” offering.

This agreement has been subsequently terminated and superseded by subsequent agreements with substantially the same terms.

During the year ended December 31, 2021, Icahn Enterprises sold 15,170,519 depositary units pursuant to these agreements, resulting in gross proceeds of $833 million.

As of December 31, 2021, we continue to have an active Open Market Sale Agreement and Icahn Enterprises may sell its depositary units for up to an additional $328 million in aggregate gross sale proceeds pursuant to this agreement entered into on December 3, 2021.

No assurance can be made that any or all amounts will be sold during the term of this agreement, and we have no obligation to sell additional depositary units under this Open Market Sale Agreement.

Depending on market conditions, we may continue to sell depositary units under the Open Market Sale Agreement, and, if appropriate, enter into a new Open Market Sale Agreement to continue our “at-the-market” sales program once we have sold the full amount of our existing Open Market Sale Agreement.

Our ability to access remaining capital under our “at-the-market” program may be limited by market conditions at the time of any future potential sale.

While we were able to sell shares during the year ended December 31, 2021, there can be no assurance that any future capital will be available on acceptable terms or at all under this program.

LP Unit Distributions

During the year ended December 31, 2021, we declared four quarterly distributions aggregating $8.00 per depositary unit.

In connection with these distributions, aggregate cash distributions to all depositary unitholders was $516 million, of which $422 million relates to the distribution declared in the first quarter of 2020.

Icahn and his affiliates have historically elected to receive their distributions in additional units;

however, in the first quarter of 2020, they received their distribution in cash.

For the distributions declared in the second, third and fourth quarters of 2020, Mr.

Icahn and his affiliates elected to receive their distributions in additional units and cash distributions paid to other depositary unitholders was $30 million, $31 million and $33 million, respectively.

Icahn and his affiliates may in the future elect to receive all or a portion of their distributions in cash or in additional depositary units.

On February 24, 2021, the Board of Directors of the general partner of Icahn Enterprises declared a quarterly distribution in the amount of $2.00 per depositary unit.

The quarterly distribution is payable in either cash or additional depositary units, at the election of each depositary unitholder and will be paid on or about April 28, 2021 to depositary

unitholders of record at the close of business on March 26, 2021.

Depositary unitholders will have until April 16, 2021 to make an election to receive either cash or additional depositary units;

if a holder does not make an election, it will automatically be deemed to have elected to receive the distribution in additional depositary units.

In connection with these distributions, aggregate cash distributions to all depositary unitholders were $132 million.

On February 23, 2022, the Board of Directors of the general partner of Icahn Enterprises declared a quarterly distribution in the amount of $2.00 per depositary unit, which will be paid on or about April 27, 2022 to depositary unitholders of record at the close of business on March 18, 2022.

Depositary unitholders will have until April 14, 2022 to make a timely election to receive either cash or additional depositary units.

If a unitholder does not make a timely election, it will automatically be deemed to have elected to receive the distribution in additional depositary units.

Depositary unitholders who elect to receive (or who are deemed to have elected to receive) additional depositary units will receive units valued at the volume weighted average trading price of the units during the five consecutive trading days ending April 22, 2022.

Icahn Enterprises will make a cash payment in lieu of issuing fractional depositary units to any unitholders electing to receive (or who are deemed to have elected to receive) depositary units.

The declaration and payment of distributions is reviewed quarterly by Icahn Enterprises GP’s board of directors based upon a review of our balance sheet and cash flow, our expected capital and liquidity requirements, the provisions of our partnership agreement and provisions in our financing arrangements governing distributions, and keeping in mind that limited partners subject to U.S.

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There can be no assurance as to whether or in what amounts any future distributions might be paid.

Sale of PSC Metals

On December 7, 2021, we closed on the previously announced sale of 100% of the equity interests in PSC Metals, LLC (“PSC Metals”).

In connection with this sale, we received proceeds of $323 million.

Sale of Investments

During 2021, we received proceeds of $405 million from the sale of equity investments held by the Holding Company.

On October 27, 2021, IEP Utility, a wholly owned subsidiary of Icahn Enterprises Holdings, commenced the SWX Tender Offer.

We estimate that the maximum amount of funds required to complete the SWX Tender Offer would be up to approximately $4.2 billion.

IEP Utility and Icahn Enterprises Holdings intend to obtain such funds from cash, cash equivalents, and from their ability to make redemptions from their investment in the Investment Funds.

Investment Segment Liquidity

During the year ended December 31, 2020, we invested $750 million in the Investment Funds, net of redemptions, and affiliates of Mr.

Icahn (excluding us) contributed approximately $1.2 billion of primarily like-kind investments in the Investment Funds.

In addition to investments by us and Mr.

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As of December 31, 2021, the Investment Funds’ had a net short notional exposure of 31%.

The Investment Funds’ long exposure was 90% (89% long equity and 1% long credit and other) and its short exposure was 142% (119% short equity and 23% short credit and other).

The Investment Funds’ long exposure was 112% (111% long equity and 1% long credit) and its short exposure was 143% (121% short equity and 22% short credit).

The notional exposure represents the ratio of the notional exposure of the Investment Funds’ invested capital to the net asset value of the Investment Funds at December 31, 2021.

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Of the Investment Funds’ 143% short exposure, 57% was comprised of the fair value of its short positions and 86% was comprised of short broad market index swap derivative contracts and short credit default swap contracts.

With respect to both our long positions that are not notionalized (88% long exposure) and our short positions that are not notionalized (27% short), each 1% change in exposure as a result of purchases or sales (assuming no change in value) would have a 1% impact on our cash and cash equivalents (as a percentage of net asset value).

With respect to both our long positions that are not notionalized (95% long exposure) and our short positions that are not notionalized (57% short exposure), each 1% change in exposure as a result of purchases or sales (assuming no change in value) would have a 1% impact on our cash and cash equivalents (as a percentage of net asset value).

Changes in exposure as a result of purchases and sales as well as adverse changes in market value would also have an effect on funds available to us pursuant to prime brokerage lines of credit.

With respect to the notional value of our other short positions (115% short exposure), for short positions in an unrealized loss position, our liquidity would decrease by the balance sheet unrealized loss if we were to close the positions at year end prices.

With respect to the notional value of our other short positions (86% short exposure), our liquidity would decrease by the balance sheet unrealized loss if we were to close the positions at quarter end prices.

This would be offset by a release of restricted cash balances collateralizing these positions as well as an increase in funds available to us pursuant to certain prime brokerage lines of credit.

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Food Packaging

In January 2020, CVR Energy issued $600 million in aggregate principal amount of 5.25% senior unsecured notes due 2025 and $400 million in aggregate principal amount of 5.75% senior unsecured notes due 2028.

A portion of the net proceeds from the issuance of these notes was used to fund the redemption of CVR Refining’s existing senior unsecured notes due 2022.

The remaining net proceeds will be used for CVR Energy’s general corporate purposes, which may include funding (i) acquisitions, (ii) capital projects, and/or (iii) share repurchases or other distributions to CVR Energy’s stockholders.

In October 2020, Viskase entered into a credit agreement providing for a $150 million term loan and a $30 million revolving credit facility.

The proceeds from the new term loan, plus cash received from the equity private placement in October 2020, as discussed in Note 1, “Description of Business,” to the consolidated financial statements, were used to repay in full Viskase’s existing term loan.

The new term loan and credit facility mature in 2023.

In June 2021, CVR Partners issued $550 million in aggregate principal amount of 6.125% senior secured notes due 2028.

Proceeds from these notes were used to fund a partial redemption of its existing 9.25% senior secured notes due 2023.

Subsequent to this, an additional $30 million of CVR Partners’ existing 9.25% senior secured notes due 2023 were redeemed in 2021 and the remaining $65 million outstanding was redeemed in February 2022.

These senior secured notes issued by CVR Partners are guaranteed on a senior secured basis by all of CVR Partners’ existing domestic subsidiaries, excluding CVR Nitrogen Finance Corporation.

The indenture governing these notes contain certain covenants that restrict the ability of the issuers and their restricted subsidiaries from incurring additional debt or issuing certain disqualified equity, create liens on certain assets to secure debt, pay dividends/distributions or make other equity distributions, purchase or redeem capital stock/common units, make certain investments, transfer and sell assets, agree to certain restrictions on the ability of restricted subsidiaries to make distributions, loans, or other asset transfers to the issuers, consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets, engage in transactions with affiliates and designate restricted subsidiaries as unrestricted subsidiaries.

In August 2021, all of our Automotive segment’s outstanding credit facility was repaid in full in the amount of $350 million.

As of December 31, 2021, all of our subsidiaries were in compliance with all debt covenants.

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Future Debt Service Obligations

Future debt service obligations for our other operating segments are primarily within our Energy and Automotive segments.

As of December 31, 2020, our Energy segment’s future debt maturities (excluding financing leases) are $645 million for 2023, $600 million for 2025 and $400 million for 2028, and future interest payments for our Energy segment are expected to be approximately $120 million for each of 2021, 2022 and 2023.

Interest payments are expected to be $60 million for 2024 and 2025 and an aggregate of $78 million for 2026 through 2028.

As of December 31, 2020, our Automotive segment’s future debt maturities are $351 million for 2021 and future interest payments for our Automotive segment are expected to be $9 million in 2021.

Our Automotive segment intends to refinance its debt prior to maturity.

Future debt service obligations for our other operating segments are primarily within our Energy segment.

After giving effect to certain debt activity in February 2022, as discussed above, our Energy segment’s future debt maturities (excluding financing leases) are $600 million for 2025 and $950 million for 2028.

Future interest payments for our Energy segment are expected to be approximately $88 million to $89 million for each of 2022, 2023 and 2024.

Interest payments are expected to be $62 million for 2025, $57 million for 2026 and an aggregate of $77 million for 2027 through 2028.

Subsidiary Dividends

In view of the uncertainty of the depth and extent of the contraction in oil demand due to the COVID-19 pandemic, combined with the weaker commodity price environment, CVR Energy has remained focused on safe and reliable operations, cash conservation and protecting its balance sheet.

As a result of these factors, and in light of the uncertainty of the current economic environment as well as potential future cash requirements of CVR Energy, the Board of Directors of CVR Energy approved a reduction in its cash dividend for the first quarter of 2020 and elected not to declare a cash dividend for the second, third and fourth quarters of 2020.

These decisions support CVR Energy’s continued focus on financial discipline through a balanced approach of stockholder distributions and strategic investments while providing the flexibility to weather the uncertain environment.

The Board of Directors of CVR Energy will continue to evaluate the economic environment, CVR Energy’s cash needs, and other applicable factors, and may elect to make additional changes to CVR Energy’s dividend in future periods.

In the second quarter of 2021, our Energy segment paid a special dividend, which was comprised of $241 million in cash as well as the common stock of an equity investment with a fair value of $251 million.

Our portion of the dividend included $171 million in cash and the common stock of an equity investment with a fair value of $177 million.

In addition, in the third and fourth quarters of 2021, our Energy segment had aggregate distributions to non-controlling interests of $31 million as a result of distributions paid by CVR Partners to its common unit holders.

Subsidiary Stock Repurchase Program

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Repurchases, if any, including the timing, price and amount, may be made at the discretion of CVR Energy management and CVR Energy is not obligated to make any repurchases.

CVR Energy did not repurchase any shares of

its common stock as of December 31, 2020.

Due to the market and oil price volatility, coupled with the current economic conditions, CVR Energy does not currently intend to repurchase any stock if these, and other, conditions continue.

CVR Energy did not repurchase any shares of its common stock as of December 31, 2021.

On May 6, 2020, the Board of Directors of CVR Partners’ general partner approved a unit repurchase program which would enable it to repurchase up to $10 million of its common units from time to time through open market transactions, block trades, privately negotiated transactions or otherwise in accordance with applicable securities laws.

On February 22, 2021, the Board of Directors of CVR Partners authorized an additional $10 million under the unit repurchase program.

During 2021, CVR Partners repurchased common units on the open market at a cost of $1 million.

As of December 31, 2021, CVR Partners has $12 million remaining under its unit repurchase program.

On February 22, 2021, the Board of Directors of CVR Partners authorized an additional $10 million under the unit repurchase program.

Purchase Obligations

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Our Investment segment’s cash flows are primarily driven by investment transactions, which are included in net cash flows from operating activities due to the nature of its business, as well as contributions to and distributions from Mr.

Icahn and his affiliates (including Icahn Enterprises and Icahn Enterprises Holdings) and Brett Icahn, which are included in net cash flows from financing activities.

Icahn and his affiliates (including Icahn Enterprises) and Brett Icahn, which are included in net cash flows from financing activities.

Our other operating segments’ cash flows are driven by the activities and performance of each business as well as transactions with our Holding Company, as discussed below.

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Other operating segments

Discontinued operations

Total before eliminations

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Eliminations in the table above relate to certain of our Holding Company’s transactions with our Investment and other operating segments.

Our Holding Company’s net (investments in) distributions from the Investments Funds, when applicable, are included in cash flows from investing activities for our Holding Company and cash flows from financing activities for our Investment segment.

Our Holding Company’s net (investments in) distributions from the Investments Funds, when

applicable, are included in cash flows from investing activities for our Holding Company and cash flows from financing activities for our Investment segment.

Similarly, our Holding Company’s net distributions from (investments in) our other operating segments are included in cash flows from investing activities for our Holding Company and cash flows from financing activities for our other operating segments.

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Net cash receipts for income taxes, net of payments

Operating transactions with subsidiaries

Operating costs and other

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Partnership distributions

Payments to acquire additional interests in subsidiaries

Net debt transactions

(Decrease) increase in cash and cash equivalents and restricted cash and restricted cash equivalents

The decrease in interest payments during 2020 compared to 2019 is due to lower interest rates on certain of our senior unsecured notes due to certain debt refinancings in the first quarter of 2020.

Net cash receipts for income taxes, net of payments, is net of tax sharing receipts (payments) from certain of our consolidated subsidiaries aggregating $10 million, $(3) million and $27 million during the years ended December 31, 2020, 2019 and 2018, respectively.

Proceeds from the sale of businesses includes proceeds from the sales Ferrous Resources in 2019, Federal-Mogul, Tropicana and ARI in 2018 and residual sales of American Railcar Leasing LLC’s remaining railcars also in 2018.

The cash flows with respect to each of Federal-Mogul, Tropicana and ARI are reported in discontinued operations for all periods presented and the cash proceeds from each of the sales remain with our Holding Company in continuing operations.

Purchase of investments in 2020 relates to the purchase of an equity investment and a debt investment.

Proceeds from the sale of investments in 2020 primarily relates to proceeds from the sale of an equity investment.

Proceeds from the sale of investments in 2019 related to the sale of a certain equity investment.

During 2020 and 2019, we received $102 million and $55 million, respectively, (including $2 million and $1 million, respectively, from our general partner) in connection with our “at-the-market” offering pursuant to our Open Market Sale Agreement announced in May 2019, as discussed above.

Net (investments in) distributions from the Investment Funds, Net distributions from (investments in) other operating segments and Note (repayment) proceeds from other operating segments are eliminated in consolidation and discussed further below.

The decrease in interest payments during 2021 compared to 2020 is due to lower interest rates on certain of our senior unsecured notes due to certain debt refinancings in the first and second quarters of 2021.

Proceeds from the sale of businesses and assets includes proceeds from the sales PSC Metals in 2021 and Ferrous Resources in 2019.

Net (investments in) distributions from the Investment Funds and Net distributions from (investments in) other operating segments are eliminated in consolidation and discussed further below.

Partnership contributions represent sales in connection with our “at-the-market” offerings pursuant to our Open Market Sale Agreements entered into beginning May 2019, as discussed above.

Partnership distributions represent cash paid to depositary unitholders in connection with our regularly quarterly distributions.

Icahn and his affiliates have historically elected to receive their distributions in additional units;

however, for the first quarter of 2020, they elected to receive their distribution in cash.

For distributions declared for all other quarters in 2021, 2020 and 2019, Mr.

Icahn and his affiliates elected to receive their distributions in additional depositary units.

Investment Segment

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Icahn and his affiliates and Brett Icahn.

Our Investment segment had net cash provided by financing activities of $763 million for the year ended December 31, 2020, including an investment from us of $750 million, net of redemptions, a contribution of $12 million from Brett Icahn in accordance with his manager agreement and $1 million from Mr.

Icahn and his affiliates (excluding us).

For the year ended December 31, 2019, our Investment segment had net cash provided by financing activities of $220 million, for contributions received from Mr.

Icahn and his affiliates (excluding us).

For the year ended December 31, 2018, our Investment segment had net cash provided by financing activities of $2.0 billion, which included our $1.7 billion net investment in the Investment Funds as well as $310 million received from Mr.

Our Investment segment had net cash provided by financing activities of $74 million for the year ended December 31, 2021, as a result of contributions from Brett Icahn in accordance with his manager agreement.

For the year ended December 31, 2020, our Investment segment had net cash provided by financing activities of $763 million, including an investment from us of $750 million, net of redemptions, a contribution of $12 million from Brett Icahn in accordance with his manager agreement and $1 million from Mr.

Icahn and his affiliates (excluding us).

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Changes in operating assets and liabilities

Transactions with Holding Company

Investing Activities:

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Effect of exchange rate changes on cash and cash equivalents and restricted cash and restricted cash equivalents

Add back change in cash and restricted cash of assets held for sale

Increase in cash and cash equivalents and restricted cash and restricted cash equivalents

Our other operating segments’ net cash flow from operating activities before changes in operating assets and liabilities were primarily attributable to our Automotive segment’s negative results in 2020 and our Energy segment’s positive results from operations for 2019 and 2018.

(Decrease) increase in cash and cash equivalents and restricted cash and restricted cash equivalents

Our other operating segments’ net cash flow from operating activities before changes in operating assets and liabilities were primarily attributable to our Automotive segment’s negative results in 2021 and 2020 and our Energy segment’s positive results from operations for 2021.

Changes in operating assets and liabilities for 2021 were primarily attributable to our Energy segment resulting primarily from an increase in crude oil prices during 2021 and increase in its open RFS position.

Changes in operating assets and liabilities for 2020 were primarily attributable to our Automotive segment resulting from inventory reductions.

Changes in operating assets and liabilities for 2019 were primarily attributable to our Energy segment resulting primarily from an increase in accounts payable.

Capital expenditures are primarily from our Energy and Automotive segments and are primarily for maintenance.

Refer to Note 13, “Segment and Geographic Reporting,” for capital expenditures reported for each of our segments.

Capital expenditures decreased in 2020 compared to 2019 due to a reduction in capital expenditures at our Metals segment resulting from a reduction in growth expenditures and due to a reduction at our Automotive segment due to fewer stores requiring maintenance expenditures.

Turnaround expenditures relates to our Energy segment, which increased in 2020 due to planned maintenance at one of its refineries.

Acquisition of businesses, net of cash acquired, primarily relates to our Automotive segment.

Our Automotive segment’s acquisitions included various service businesses aggregating $2 million in 2020, $10 million in 2019 and $15 million in 2018.

In addition, our Home Fashion and Metals segments acquired businesses for $21 million and $8 million, respectively, in 2019.

During 2020, Vivus’ emergence from bankruptcy included $12 million of cash acquired reported for our Pharma segment with the cash portion of the consideration paid included in the Holding Company discussion above.

Purchases of investments primarily relates to our Energy segment’s purchase of an equity investment in 2020 and our Automotive segment’s investments in 767 Leasing in 2019 and 2018.

Proceeds from sale of investments relates to our Automotive segment’s cash received from 767 Leasing in 2020.

Proceeds from sale of assets are primarily due to our Automotive and Real Estate segments in 2020, our Energy segment in 2019 and our Real Estate segment’s dispositions of certain properties in 2018.

Distributions to non-controlling interests were from our Energy segment for the years ended December 31, 2020, 2019 and 2018, relating to its regular quarterly dividends and distributions, excluding payments made to us.

Due to the current economic conditions, our Energy segment only paid dividends in 2020 relating to the fourth quarter of 2019 and a reduced dividend relating to the first quarter of 2020.

Net payments to acquire additional interests in consolidated subsidiaries relates to our Energy segment’s acquisition of the remaining common units of CVR Refining during 2019, which includes $60 million paid to us for our direct investment in CVR Refining.

Net contributions from and distributions to our Holding Company include the dividends and distributions paid by our Energy segment of $85 million, $217 million and $192 million for the years ended December 31, 2020, 2019 and 2018, respectively, as well as by our Real Estate segment of $68 million, $24 million and $543 million, respectively, and by our Automotive segment of $75 million in 2020.

During the years ended December 31, 2020, 2019 and 2018, our Automotive segment received funds in the form of investments from our Holding Company of $115 million, $276 million and $365 million, respectively, primarily for the acquisition of businesses, investments in 767 Leasing and costs associated with our Automotive segment’s multi-year transformation plan.

Turnaround expenditures relates to our Energy segment, which were higher in 2020 due to planned maintenance at one of its refineries.

Purchases of investments primarily relates to our Energy segment’s purchase of an equity investment in 2020.

Proceeds from sale of investments relates to our Automotive segment’s cash received from 767 Leasing in 2021 and 2020.

Proceeds from sale of assets are primarily due to our Automotive segment in 2021 and our Automotive and Real Estate segments in 2020.

Our Automotive segment continues to sell stores and other assets in connection with its transformation plan.

Distributions to non-controlling interests were from our Energy segment relating to its regular quarterly dividends and distributions, excluding payments made to us, as well as a special dividend made in 2021.

Due to the recent economic conditions, our Energy segment only paid dividends in 2020 relating to the fourth quarter of 2019 and a reduced dividend relating to the first quarter of 2020.

Net contributions from and distributions to our Holding Company include the dividends and distributions paid by our Energy segment of $171 million in 2021 compared to $85 million in 2020, as well as by our Automotive segment of $36 million in 2021 compared to $75 million in 2020.

During 2021, Automotive segment received funds in the form of investments and loans from our Holding Company of $425 million compared to $115 million for 2020, primarily for the refinancing of its debt and costs associated with our Automotive segment’s multi-year transformation plan.

During 2020, our Food Packaging segment received funds in the amount of $100 million in connection with Viskase’s equity private placement in October 2020.

Our other operating segments received funds in the form of loans and investments from our Holding Company aggregating $23 million, $17 million and $34 million during the years ended December 31, 2020, 2019 and 2018, respectively.

Our other operating segments received funds in the form of loans and investments from our Holding Company aggregating $3 million in 2021 compared to $23 million in 2020.

Consolidated Capital Spending

Refer to Note 13, “Segment and Geographic Reporting,” for a reconciliation of our segments’ capital expenditures to consolidated capital expenditures for each of the years ended December 31, 2021, 2020 and 2019.

In addition, our Energy segment had turnaround expenditures of $159 million, $38 million and $8 million during the years ended December 31, 2020, 2019 and 2018, respectively, which is reported separately from capital expenditures.

For 2021, we estimate our consolidated capital expenditures to be approximately $215 million to $230 million for our Energy segment, for both maintenance and growth, including $95 million to $100 million for our Energy segments’ renewable diesel unit capital expenditures, $89 million for our Automotive segment, primarily for maintenance and restructuring related activities, and approximately $48 million in the aggregate for all other segments.

In addition, our Energy segment had turnaround expenditures of $5 million, $159 million and $38 million during the years ended December 31, 2021, 2020 and 2019, respectively, which is reported separately from capital expenditures in our consolidated statements of cash flows.

For 2022, we estimate our consolidated capital expenditures to be approximately $212 million to $241 million for our Energy segment, for both maintenance and growth, including $70 million to $80 million for our Energy segments’ renewable diesel unit capital expenditures, $140 million for our Automotive segment and approximately $89 million in the aggregate for all other segments.

Our Energy segment also expects its turnaround expenditures to be approximately $28 million to $33 million in 2022.

In addition, our Energy segment approved a renewable diesel project at one of its refineries, which would convert the refinery’s hydrocracker to a renewable diesel unit capable of producing 100 million gallons of renewable diesel per year.

The total estimated costs for the project are currently $110 million and completion of the project is expected in June 2021.

In addition, our Energy segment approved a renewable diesel project at one of its refineries, which would convert the refinery’s hydrocracker to a renewable diesel unit (“RDU”) capable of producing 100 million gallons of renewable diesel per year.

The total estimated costs for the project are currently $160 million and completion of the project is expected in in the second quarter to 2022.

In May 2021, our Energy segment approved $10 million to complete the process design and ordering of certain long-lead equipment relating to a potential project to add pretreating capabilities for the RDU at one of its refineries and to complete process design to potentially convert an existing hydrotreater at another refinery to renewable diesel service.

In November 2021, our Energy segment approved a pretreater project at one of its refineries, which is expected to be completed in the fourth quarter of 2022 at an estimated cost of $60 million.

Critical Accounting Estimates

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The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.

requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.

Among others, estimates are used when accounting for valuation of investments.

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For each of December 31, 2021 and 2020, we concluded, based on the projections of taxable income, that certain of our corporate subsidiaries more likely than not will realize a partial benefit from their deferred tax assets and loss carry forwards.

Ultimate realization of the deferred

tax assets is dependent upon, among other factors, our corporate subsidiaries’ ability to generate sufficient taxable income within the carryforward periods and is subject to change depending on the tax laws in effect in the years in which the carryforwards are used.

Ultimate realization of the deferred tax assets is dependent upon, among other factors, our corporate subsidiaries’ ability to generate sufficient taxable income within the carryforward periods and is subject to change depending on the tax laws in effect in the years in which the carryforwards are used.

See Note 14, “Income Taxes,” to the consolidated financial statements for further discussion regarding our income taxes.

18 unchanged sentences

As of December 31, 2021, our long-lived assets did not have any impairment indicators.

However, during the second quarter of 2020, two primary products of our Energy segment’s nitrogen fertilizer business experienced significant pricing declines resulting from the broader economic conditions caused by the COVID-19 pandemic.

There was significant uncertainty as to the nature and extent of the impacts on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which could negatively impact demand for its products.

As a result, we evaluated the long-lived assets of our Energy Segment’s nitrogen fertilizer business to determine if the carrying value of the asset group exceeded its recoverability.

Based on our assessment, which included estimating the recoverability of the asset group using an undiscounted cash flow model, we determined that the recoverability of the asset group was significantly in excess of its carrying value and no impairment was necessary.

Indefinite-lived intangible assets, such as goodwill and trademarks, held by our various segments are reviewed for impairment annually, or more frequently if impairment indicators exist.

Goodwill impairment testing consists of (i) a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, and/or, if necessary, (ii) a quantitative analysis which involves comparing the fair value of our reporting units to their respective carrying values.

If the fair value of the reporting unit exceeds its carrying

value, no impairment is necessary.

If the fair value of the reporting unit exceeds its carrying value, no impairment is necessary.

If the carrying amount of the reporting unit exceeds its fair value, an impairment loss, equal to the difference (limited to the total amount of goodwill allocated to the tested reporting unit), is recognized in accordance with U.S.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis