What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-29 · 227 added, 184 removed, 347 unchanged (54% of the section changed)

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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.

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Significant Transactions and Developments

Subsidiary Bankruptcy and Deconsolidation

On January 31, 2023, a subsidiary of Icahn Automotive Group LLC (“Icahn Automotive”), IEH Auto Parts Holding LLC and its subsidiaries (collectively “Auto Plus”), an Aftermarket Parts distributor held within our Automotive segment, filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code.

As a result of this filing, the Company determined that it no longer controls Auto Plus under the criteria set out in Statement of Financial Accounting Standards ASC Topic 810, “Consolidation” and deconsolidated its investment effective the date of the filing.

As a result of Auto Plus’ bankruptcy, the Company recorded a non-cash charge of $246 million in the year ended December 31, 2023.

We collected cash for the repayment of the note receivable of $48 million during the year ended December 31, 2023.

We estimated our cash to be collected for the repayment of the note receivable to be $11 million at December 31, 2023, resulting in a write-off of $127 million during the year ended December 31, 2023.

Debt Repurchase, Issuance and Discharge

In November and December of 2023, we repurchased in the open market approximately $35 million aggregate principal amount of our 4.750% senior unsecured notes due 2024 which the Company then cancelled and reduced the outstanding principal, $12 million aggregate principal amount of our 6.25% senior unsecured notes due 2026, $5 million aggregate principal amount of our 5.25% senior unsecured notes due 2027, and $40 million aggregate principal amount of our 4.375% senior unsecured notes due 2029 for total cash paid of $84 million for a total aggregate principal amount $92 million.

The remaining repurchased notes of $57 million aggregate principal were extinguished but were not retired and are held in treasury.

In April 2024, we sold $12 million in aggregate principal amount of our 6.250% senior notes due 2026 and $5 million in aggregate principal amount of our 5.250% senior notes due 2027, both previously repurchased and held in treasury, in the open market.

In August and September of 2024, we repurchased in the open market approximately $52 million aggregate principal amount of our 6.25% senior notes due 2026, $73 million aggregate principal amount of our 5.25% senior notes due 2027, and $52 million aggregate principal amount of our 4.375% senior notes due 2029 for total cash paid of $168 million and total aggregate principal amount of $177 million of our senior notes repurchased.

The repurchased notes of $177 million aggregate principal were extinguished but were not retired and are held in treasury.

In December 2024, we received $21 million as part of the redemption of our 6.25% senior notes due 2026 held in treasury.

In December 2023, Icahn Enterprises and Icahn Enterprises Finance Corp.

issued $700 million in aggregate principal amount of 9.750% senior unsecured notes due 2029.

The net proceeds, together with $376 million of cash and cash equivalents on hand, was used to satisfy and discharge the remaining outstanding 4.750% senior unsecured notes due 2024, along with any accrued interest associated with the notes and related fees and expenses.

issued $700 million in aggregate principal amount of 9.750% senior notes due 2029.

The net proceeds, together with $376 million of cash and cash equivalents on hand, was used to satisfy and discharge the remaining outstanding 4.750% senior notes due 2024, along with any accrued interest associated with the notes and related fees and expenses.

In May 2024, we issued $750 million in aggregate principal amount of 9.000% senior notes due 2030.

The net proceeds from the issuance were used to redeem the remaining outstanding 6.375% senior notes due 2025 in full on June 13, 2024.

In November of 2024, we issued $500 million in aggregate principal amount of 10.000% senior secured notes due 2029 (the “10% 2029 Notes”).

The net proceeds from the sale of the Notes was approximately $495 million after

deducting the initial purchaser’s discounts and commissions and fees and expenses related to the offering, and were used to partially redeem the our 6.250% Senior Notes due 2026 (the “2026 Notes”) on December 16, 2024.

The 10% 2029 Notes are secured by substantially all of our assets directly owned by us and Icahn Enterprises Holdings, the guarantor of the 10% 2029 Notes, subject to customary exceptions.

Concurrently with the consummation of the offering of the 10% 2029 Notes, we granted a lien in favor of the holders of the our 2026 Notes, 5.250% Senior Notes due 2027, 4.375% Senior Notes due 2029, 9.750% Senior Notes due 2029 and 9.000% Senior Notes due 2030 (collectively, the “Existing Notes”) such that the Existing Notes are secured equally and ratably with the 10% 2029 Notes, resulting in substantially all of our outstanding debt being secured.

Potential Strategic Transactions

As previously disclosed, we are considering, with CVR Energy, Inc.

(“CVR Energy”), potential strategic transactions available to CVR Energy and its subsidiaries, which may include the acquisition of additional entities, assets or businesses, including the acquisition of material amounts of refining assets through negotiated mergers and/or stock or asset purchase agreements by CVR Energy or its subsidiaries, and/or strategic options involving CVR Partners, LP, a controlled subsidiary of CVR Energy (“CVR Partners”).

There is no assurance that any of the aforementioned or previously disclosed or other transactions will develop or materialize, or if they do, as to their timing.

On January 8, 2025, we completed a tender offer to acquire additional shares of CVR Energy’s common stock, purchasing a total of 878,212 shares, bringing our aggregate percentage ownership to approximately 67% of CVR Energy’s outstanding shares of common stock.

To the extent we become the owner of 80% or more of the outstanding shares of CVR Energy , this ownership would allow for tax consolidation of CVR Energy within the tax group of American Entertainment Property Corp (“AEPC,” and such tax group, the “AEPC Group”) for U.S.

federal income tax purposes.

On December 20, 2024, AEPC entered into a Rule 10b5-1 trading plan to purchase up to 320,000 common units of CVR Partners.

The plan will terminate on June 1, 2025 if not earlier terminated by its terms.

On February 21, 2025, AEPC entered into a Rule 10b5-1 trading plan to purchase up to 13,356,539 shares of common stock of CVI .

The plan will terminate on February 21, 2026, if not earlier terminated by its terms.

Viskase Companies, Inc.

("Viskase"), our majority owned subsidiary, is currently considering a potential business combination transaction involving Enzon Pharmaceuticals, Inc.

(“Enzon”), of which we own approximately 49% of the outstanding common stock, through a negotiated merger transaction or otherwise.

In connection therewith, we may engage in other activities, discussions and/or negotiations regarding a potential transaction involving Viskase and Enzon.

Results of Operations

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In addition to the summarized financial results below, refer to Note 15, “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.

Throughout 2021 and continuing in 2022, the COVID-19 pandemic, and actions taken by governments and others in response thereto, 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 were 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 also included the acceleration of selective planned store closures in our Automotive segment and recording write-downs to inventories.

The economic conditions improved in 2021 and 2022 as more governments reduced restrictions and more businesses resumed operations, although supply chain issues have continued to persist.

Recent interest rate increases have increased the costs of borrowing.

The war between Israel and Hamas, which began in October 2023, and the ongoing Russian/Ukraine conflict, can significantly impact the global oil, fertilizer, and agriculture markets.

Such conflicts pose significant geopolitical risks to global markets, raise concerns of major implications, such as enforcement of sanctions, can contribute to further oil inventory tightening and price volatility, and can disrupt the production and trade of fertilizer, grains, and feedstock supply through several means, including trade restrictions and supply chain disruptions.

The conflict in the Middle East and the ongoing Russian/Ukraine conflict can significantly impact the global oil, fertilizer, and agriculture markets.

Such conflicts pose significant geopolitical risks to global markets, raise concerns of major implications, such as enforcement of sanctions, can contribute to further oil price volatility, and can disrupt the production and trade of fertilizer, grains, and feedstock supply through several means, including trade restrictions and supply chain disruptions.

The ultimate outcome of these conflicts and any associated market disruptions are difficult to predict and may affect our business, operations, and cash flows in unforeseen ways.

The comparability of our summarized consolidated financial results presented below is affected primarily by (i) the performance of the Investment Funds (as defined below), (ii) the results of operations of our Energy segment, impacted by the demand and pricing for its products, (iii) the sale of PSC Metals in 2021 and (iv) the deconsolidation of Auto Plus within our Automotive segment.

The comparability of our summarized consolidated financial results presented below is affected primarily by (i) the performance of the Investment Funds (as defined below), (ii) the results of operations of our Energy segment, impacted by the demand and pricing for its products and (iii) the deconsolidation of Auto Plus within our Automotive segment.

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

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During the year ended December 31, 2024, Mr.

Icahn and his affiliates (excluding us and Brett Icahn) redeemed $2.0 billion from the Investment Funds.

In addition, in December 2023, the Investment Funds issued a pro-rata distribution of $400 million, including $158 million to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) redeemed $250 million from the Investment Funds.

In addition, during the year ended December 31, 2024, the Investment Funds issued a pro-rata distribution of $650 million, including $256 million to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) and $394 million to the Holding Company.

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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, 2024.

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Our Investment Funds’ returns represent a weighted-average composite of the average returns, net of expenses.

The following table sets forth the performance attribution for the Investment Funds’ returns:

The Other category is primarily comprised of interest income earned on cash balances, collateral posted to counterparties and short rebates.

The following tables sets forth the performance attribution and net income (loss) for the Investment Funds’ returns for the years ended December 31, 2024, 2023 and 2022, respectively, and includes performance of all investment and derivative position types including the impact of the use of leverage through options, short sales, swaps, forwards and other derivative investments.

Year Ended December 31,

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Short positions

The following table presents net (loss) for our Investment segment:

Year Ended December 31,

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For the year ended December 31, 2024, the Investment Funds’ negative performance was driven by net losses in both our short and long positions.

The negative performance of our Investment segment’s short positions was driven primarily by losses in broad market hedge of $261 million, net losses in the utilities, materials and industrials sectors of $222 million and the negative performance of certain credit default swap positions of $62 million, offset in part by gains in the energy sector of $302 million.

The negative performance of our Investment segment’s long positions was driven primarily by the negative performance in the energy and consumer cyclical sectors of $375 million, offset in part by gains in the utilities sector of $190 million.

For the year ended December 31, 2023, the Investment Funds’ negative performance was driven by net losses in both our short and long positions.

The negative performance of our Investment segment’s short positions was driven primarily by losses from a broad market hedge of $704 million, the negative performance of certain credit default swap positions totaling $188 million, losses from two energy and industrial segment investments aggregating $172 million and $124 million, respectively, and the aggregate performance of short positions with net losses across various sectors of $167 million.

The negative performance of our Investment segment’s long positions was driven primarily by the negative performance of one healthcare investment of $164 million, one communications investment of $116 million and one material sector investment of $100 million, offset in part by the aggregate performance of investments with net gains of $81 million across various sectors.

For the year ended December 31, 2022, the Investment Funds’ negative performance was driven by net losses in long positions and short positions.

The negative performance of long positions was primarily driven by the negative performance of a healthcare investment of approximately $1.3 billion and the aggregate performance of investments with net losses across various sectors of $1.0 billion, offset in part by gains from two energy sector investments aggregating $2.0 billion.

The negative performance of our Investment segment’s short positions was driven by the negative performance of certain credit default swap positions of $742 million and an energy sector hedge totaling $420 million offset in part by gains from a broad market hedge totaling $1.0 billion.

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

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

The petroleum business accounted for approximately 91%, 89% and 91% of our Energy segment’s net sales for the years ended December 31, 2024, 2023 and 2022, respectively.

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The effect of changes in crude oil prices on the petroleum business’ results of operations is partially influenced by the rate at which the processing of Refined Products adjusts to reflect these changes.

In addition to recent market conditions, such as the war between Israel and Hamas and the impact of the Russia/Ukraine conflict, 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 and emissions standards for vehicles.

In addition to geopolitical conditions, such as the ongoing conflict in the Middle East and the impact of the Russia/Ukraine conflict, there are long-term factors such as the potential for increased tariffs, future trade conflicts and the potential changes in U.S.

economic trade policy that may impact the demand for and inventory of Refined Products.

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

The petroleum business is also subject to the EPA’s Renewable Fuel Standard (“RFS”), which, each year, absent exemptions or waivers, requires the operating companies in our Energy segment to blend “renewable fuels” with their transportation fuels, purchase renewable identification numbers (“RINs”), to the extent available, in lieu of blending, or face liability.

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Refer to Note 19, “Commitments and Contingencies,” to the consolidated financial statements for further discussion of RINs.

The costs to comply with the RFS (excluding the impacts of any exemptions or waivers to which the petroleum business’ obligated-party subsidiaries may be entitled) increased significantly throughout 2022, remained significant in 2023 and is expected to remain significant through 2024 and beyond.

In April 2022, our Energy segment completed a renewable diesel project at one of its refineries, which converted the refinery’s hydrocracker to a renewable diesel unit (“RDU”) capable of producing up to 100 million gallons of renewable diesel per year at a total cost of $179 million.

The renewable diesel facility produces renewable diesel and has a nameplate capacity of approximately 7,500 barrels per day.

Further, the conversion enables our Energy segment to capture additional benefits associated with the existing blenders’ tax credit that is currently set to expire at the end of 2024 and low carbon fuel standard programs in states such as California.

In addition, our Energy segment’s renewable feedstock pretreater was mechanically completed in the fourth quarter of 2023, at a cost of approximately $94 million.

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

However, impacts from recent climate change initiatives under the Biden Administration, actions taken by the courts, resulting administration actions under the RFS, and market conditions could significantly impact the amount by which our Energy segment’s renewables business could mitigate our costs to comply with the RFS, if at all.

The conflict in the Middle East and the ongoing Russian/Ukraine conflict can significantly impact the global oil, fertilizer, and agriculture markets.

The ultimate outcome of these conflicts and any associated market disruptions are difficult to predict and may affect our business, operations, and cash flows in unforeseen ways.

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

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Cost of goods sold

Net sales for our Energy segment decreased by approximately $1.6 billion (15%) for the year ended December 31, 2023 as compared to the comparable prior year period due to a decrease in our petroleum business’ net sales by approximately $1.5 billion, as well as a decrease in our nitrogen fertilizer business’ net sales by $155 million over the comparable period.

The decrease in the petroleum business’ net sales was primarily due to lower refined product prices resulting from declining demand and increased inventory levels in the current period.

In addition, the onset of the Russia/Ukraine war disrupted global energy markets in the prior period causing increased prices and tighter inventory levels resulting in higher sales in the prior period.

Our nitrogen fertilizer business’ net sales decreased primarily due to a decrease in UAN and ammonia pricing conditions primarily due to lower natural gas prices and increased global supply of nitrogen fertilizers in the current year, offset in part by increased sales volumes, which were primarily attributable to increased production at both fertilizer facilities due to operating reliability, strong customer demand in the Fall and a draw in inventories of UAN and ammonia.

Cost of goods sold for our Energy segment decreased by approximately $1.8 billion (18%) for the year ended December 31, 2023 as compared to the comparable prior year period.

The variance was primarily due to a lower crude oil price environment reducing feedstock costs and a decline in RFS expense which includes a favorable RINs liability revaluation of $419 million which was driven by a decline in RINs prices and an increase in RINs generated from ethanol and biodiesel blending.

Gross profit for our Energy segment improved by $143 million for the year ended December 31, 2023 as compared to the comparable prior year period.

Net sales for our Energy segment decreased by approximately $1.6 billion (18%) for the year ended December 31, 2024 as compared to prior year due to a decrease in our petroleum business’ net sales by approximately $1.4 billion, as well as a decrease in our renewable business’ net sales by $122 million and a decrease in our nitrogen fertilizer business’ net sales by $157 million over the comparable period.

The decrease in the petroleum business’ net sales was primarily due to lower refined product prices resulting from elevated inventory levels and reduced demand along with a decline in sales as a result of the Wynnewood Refinery fire and an unplanned outage at the Coffeyville Refinery.

Our renewables business’ net sales decreased due to reduced production and sales volume coupled with decreased biodiesel RIN prices resulting from increased renewable diesel supply in the market for the year ended December 31, 2024 as compared to the prior year.

Our nitrogen fertilizer business’ net sales decreased primarily due to unfavorable UAN and ammonia pricing conditions and sales volumes.

Cost of goods sold for our Energy segment decreased by approximately $569 million (7%) for the year ended December 31, 2024 as compared to prior year.

The decrease was primarily due to declines in our petroleum business as a result of a decrease in net sales and increased RFS expenses, net of RINS sales, of $42 million, which includes unfavorable RINs liability revaluation of $195 million.

Gross profit for our Energy segment declined by $1.1 billion for the year ended December 31, 2024 as compared to prior year.

Gross margin as a percentage of net sales was 2% and 13% for the year ended December 31, 2024 and 2023, respectively.

The improvement in gross margin was primarily attributable to the petroleum business, and was a result of the decline in RFS expense and favorable derivative impacts, offset by lower crack spreads and unfavorable inventory valuation.

The decline in gross margin for the Energy segment was primarily attributable to the petroleum business, as a result of lower refining margins driven by decreased crack spreads, unfavorable sales volume impacts related to unplanned outages and increased RFS expenses in the current year.

Our Automotive segment’s results of operations are generally driven by the demand for automotive service and maintenance, which is impacted by general economic factors, vehicle miles traveled, and the average age of vehicles on the road, among other factors.

Our Automotive segment has been in the process of a multi-year transformation plan.

As part of this plan, during the year ended December 31, 2022, our Automotive segment completed the separation of certain of its Automotive Services and Aftermarket Parts businesses into two separate operating companies.

In January 2023, Auto Plus filed a voluntary bankruptcy petition seeking relief under Chapter 11 of the Bankruptcy Code, which has reduced our Automotive segment’s assets, reduced the sales of our Automotive segment in the year ended December 31, 2023, and will result in lower net sales from our Automotive segment in future periods.

Our results of operations for the year ended December 31, 2023 include the results of Auto Plus prior to its January 31, 2023 bankruptcy petition.

Our Automotive segment’s results include AEP PLC LLC (“AEP PLC”), which acquired $10 million in assets, mainly comprised of Aftermarket Parts inventory from the Auto Plus auction.

As part of this plan, our Automotive segment completed the separation of certain of its Automotive Services and Aftermarket Parts businesses into two separate operating companies.

Auto Plus, which operated the majority of our Aftermarket Parts business, began operating in locations owned and leased by the Aftermarket Services business from 2021 until 2023.

In January 2023, Auto Plus filed a voluntary bankruptcy petition seeking relief under Chapter 11 of the Bankruptcy Code, resulting in the cessation of operations and deconsolidation, which reduced our Automotive segment’s assets.

Our results of operations for the year ended December 31, 2023 include the results of Auto Plus prior to its deconsolidation as of January 31, 2023.

Following the bankruptcy, Auto Plus exited the Automotive Services locations within which it operated.

Our Automotive segment’s results also include AEP PLC LLC (“AEP PLC”), which acquired $10 million in assets, mainly comprised of Aftermarket Parts inventory from the Auto Plus auction.

We are in the process of selling the remaining inventory, which was substantially completed at the end of 2024, and which we expect will be fully completed in the first quarter of 2025, removing us from the Aftermarket Parts business.

In connection with its transformation plan, the Automotive segment leases available and excess real estate in certain locations under long-term operating leases, in which the Aftermarket Parts business formerly operated.

During this transformation plan the Automotive segment will continue investing capital to repurpose these locations for future multi-tenant use and we anticipate future revenue streams.

During the fourth quarter of 2024, the Automotive segment reached agreement with a tenant to terminate a group of leases effective as of March 31, 2025.

The termination will result in an increase in Automotive Services’ available and excess real estate.

As part of this transaction, we received an early termination payment of $42 million, resulting in a $38 million gain for the quarter.

While we can re-lease the locations, it will delay the transformation plan and result in reduced cash flow over the lease-up period.

During the third quarter of 2024, we experienced declining sales in our Automotive Services business, due to, among other factors, reduced consumer spending on automotive repairs and maintenance and certain operational challenges, resulting in a reduction in expected future cash flows.

This led to a goodwill triggering event during the

quarter ended September 30, 2024.

Our goodwill impairment testing concluded that no impairment was required at that time, and we have undertaken operational changes, including changes in management and strategy, that we believe will lead to improvements in the performance of the business and cash flows.

However, if our growth and profitability initiatives do not realize their expected benefits, our assets in this business may be subject to impairment.

Our Automotive segment’s priorities include:

● Positioning the Automotive Services business to take advantage of opportunities in the do-it-for-me market and vehicle fleets;

● Improving inventory management and distribution network;

● Positioning the Automotive Services broad offerings to take advantage of opportunities in the do-it-for-me market and vehicle fleets;

● Strategic investment in brownfields and greenfields supplementing existing store footprints;

● Investment in, and strategic review of, capital projects within Icahn Automotive’s owned and leased locations to increase leasing revenue, restructure lease liabilities, and reduce occupancy costs;

● Strategic investment in brownfield and greenfield supplementing existing store footprints;

● Investment in customer experience initiatives and selective upgrades in facilities;

● Optimization of Store and Distribution Center network while improving inventory and cost position;

● Investment to improve the overall customer experience through process, facilities and automation;

● Investment in employees with focus on training and career development;

● Business process improvements, including investments in our supply chain and information technology capabilities.

● Business process improvements and sharing best practices through investments in people, technology, and our overall supply chain.

The following table presents our Automotive segment’s net sales and other revenue from operations, cost of goods sold and other expenses from operations and gross profit.

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Net sales and other revenues from operations for our Automotive segment for the year ended December 31, 2024 decreased by $240 million (14%) as compared to the comparable prior year period.

The decrease was attributable to a decrease in Aftermarket Parts sales of $660 million (83%), as well as a decrease in Automotive Services revenue of $4 million (0%).

The decrease in Aftermarket Part sales was primarily due to the deconsolidation of Auto Plus as of January 31, 2023.

The decrease in Automotive Services revenues was driven by lower car counts primarily from closed stores.

The decrease was attributable to a decrease in Automotive Services revenue of $128 million (8%), mainly due to reduced consumer spending on automotive repairs and maintenance.

The decrease was also due to a decrease in Aftermarket Parts revenue of $112 million (82%), due to the winding down of the Aftermarket Parts business resulting from the deconsolidation of Auto Plus as of January 31, 2023.

Cost of goods sold and other expenses from operations for the year ended December 31, 2024 decreased by $129 million (11%) as compared to the comparable prior year period.

The decrease was primarily driven by decreased Aftermarket Parts sales of $660 million, primarily related to the deconsolidation of Auto Plus.

The decrease was primarily driven by lower net sales related to reduced consumer spending on automotive repairs and maintenance at our Automotive Services business and decreased aftermarket parts sales related to the winding down of the Aftermarket Parts business.

Gross profit on net sales and other revenue from operations for the year ended December 31, 2024 decreased by $111 million (23%) as compared to the comparable prior year period.

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Our Food packaging segment’s results of operations are primarily driven by the production and sale of cellulosic, fibrous and plastic casings for the processed meat and poultry industry and derives a majority of its total net sales from customers located outside the United States.

Net sales for the year ended December 31, 2023 increased $15 million (3%) as compared to the comparable prior year period.

The increase was due to an increase of $39 million in price and product mix and $3 million due to favorable effects of foreign exchange rates, offset by a decrease of $27 million due to lower volume.

Net sales for the year ended December 31, 2024 decreased $42 million (9%) as compared to the comparable prior year period.

The decrease was due to an decrease of $25 million in price and product mix and a decrease of $17 million due to lower volume.

Cost of goods sold for the year ended December 31, 2024 decreased by $16 million (5%) as compared to the comparable prior year period due to lower absorption of manufacturing costs resulting from lower sales volume.

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Results from operations at investment properties and our country clubs are included in other revenues from operations in our consolidated statements of operations.

Revenue from our real estate operations for the year ended December 31, 2023 was primarily derived from the sale of residential units and rental operations.

Revenue from our real estate operations for the year ended December 31, 2022 was primarily derived from the sale of single-family homes.

Net sales for the year ended December 31, 2023 increased by $8 million (13%) as compared to the comparable prior year period.

The increase was primarily due to higher net sales of single-family homes of $5 million and the sale of an investment property of $17 million in the current period, offset in part by the sale of an investment property of $14 million in the prior period.

Cost of goods sold for the year ended December 31, 2023 increased $8 million (20%) compared to the prior year period primarily due to the sale of an investment property which had a cost basis of $11 million.

Revenue from our real estate operations for the year ended December 31, 2024 and 2023, was primarily derived from the sale of single-family homes and country club operations.

Net sales for the year ended December 31, 2024 decreased by $48 million (70%) as compared to the comparable prior year period.

The decrease was primarily due to the one-time sale of a $17 million investment property in the prior year period and a decrease in single-family home sales as inventory is nearly fully sold at one country club.

Cost of goods sold for the year ended December 31, 2024 decreased $33 million (69%) compared to the prior year period primarily due to the sale of an investment property which had a cost basis of $11 million in the prior year.

Gross margin as a percentage of net sales was 29% and 30% for the years ended December 31, 2024 and 2023, respectively.

Other revenues from operations for the year ended December 31, 2023 increased by $16 million (28%) as compared to the comparable prior year period primarily due to a lease termination fee of $5 million on an investment property during the year ended December 31, 2023.

Other expenses from operations for the year ended December 31, 2023 increased $7 million (13%) compared to the comparable prior year period primarily due to higher expenses related to a lease default that occurred at an investment property in the year ended December 31, 2023.

Other revenues from operations for the year ended December 31, 2024 increased by $2 million (3%) as compared to the comparable prior year period.

Other expenses from operations for the year ended December 31, 2024 increased $5 million (8%) compared to the comparable prior year period primarily due to higher expenses related to a full year of country club operations, compared to only three months in the prior year.

In November 2024, we entered into an agreement to sell certain properties in our Real Estate segment, which is expected to close in the first quarter of 2025.

These properties have historically generated approximately $3 million in annual revenue.

As a result, we anticipate a reduction in future other revenues from operations by this amount following the completion of the sale of these properties.

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, 2023 decreased by $42 million (19%) compared to the comparable prior year period mostly due to normalized demand for our hospitality business in 2023 compared to a post pandemic related increase in demand in 2022 and a one-time textile award for the 2022 FIFA World Cup.

Retail sales have decreased as the soft home category has slowed, retailers have trimmed inventory and some retail customers have filed for bankruptcy.

Cost of goods sold for the year ended December 31, 2023 decreased $48 million (26%) compared to the comparable prior year period mostly due to lower hospitality and retail sales along with lower material and freight costs.

Net sales for the year ended December 31, 2024 increased by $1 million (1%) compared to the comparable prior year period.

Cost of goods sold for the year ended December 31, 2024 decreased $3 million (2%) compared to the comparable prior year period mostly due to lower material costs and improved manufacturing efficiency.

Gross margin as a percentage of net sales was 23% and 21% for the years ended December 31, 2024 and 2023, respectively.

Our Pharma segment derives revenues primarily from the sale of its products directly to customers, wholesalers and pharmacies.

Drugs in active clinical development may generate positive cash flow if successful, but there is also the risk

that these drugs may not progress through clinical trials, resulting in no return.

Additionally, we incur research and development costs associated with these drugs.

Pursuant to previously announced settlement agreements, at the end of 2024 a competitor became, and in the second half of 2025 a second competitor will be, permitted to launch competing generic products to the patent-protected weight loss treatment sold within our Pharma segment in the United States, which we anticipate will cause a moderate reduction of prescription volume in the retail pharmacy market in the United States.

In the third quarter of 2024, our Pharma segment began selling certain products to wholesalers and pharmacies in Europe.

Net sales for the year ended December 31, 2024 increased by $12 million (13%) compared to the comparable prior year period primarily due to higher prescription growth resulting in increased sales.

Cost of goods sold for the year ended December 31, 2023 increased $8 million (17%) compared to the comparable prior year period due to increased sales.

Cost of goods sold for the year ended December 31, 2024 decreased $1 million (2%) compared to the comparable prior year period primarily due to improved inventory management.

Gross margin as a percentage of net sales was 48% and 40% for the years ended December 31, 2024 and 2023, respectively.

Holding Company

Our Holding Company’s results of operations primarily reflect the loss on deconsolidation of one of its subsidiaries, credit loss on its related party note receivable, and net interest expense on its senior unsecured notes for each of the years ended December 31, 2023 and 2022.

Our Holding Company’s results of operations primarily reflect the interest expense on its senior notes for the years ended December 31, 2024 and 2023, and a loss on deconsolidation of one of its subsidiaries and a credit loss on its related party note receivable for the year ended December 31, 2023.

Other Consolidated Results of Operations

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Selling, General and Administrative

Our consolidated selling, general and administrative costs during the year ended December 31, 2023 decreased by $398 million (32%) as compared to the comparable prior year period primarily due to lower expenses of $402 million at our Automotive segment mainly related to the deconsolidation of Auto Plus, partially offset by higher expenses at the Holding Company.

Our consolidated selling, general and administrative costs during the year ended December 31, 2024 decreased by $69 million (8%) as compared to the comparable prior year period primarily due to lower expenses of our Automotive segment of $60 million (13%) mainly related to the deconsolidation of Auto Plus.

Refer to Note 11, “Goodwill and Intangible Assets, Net,” to the consolidated financial statements for a discussion of impairments of assets, which were not significant.

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Our consolidated interest expense during the year ended December 31, 2024 decreased by $31 million (6%) as compared to the comparable prior year period.

The decrease was primarily due to lower interest expense from our Investment segment due to a reduction in short credit exposure.

The decrease was primarily due to lower interest expense for our Investment segment of $84 million attributable to changes in short exposure composition.

The decrease was offset in part by higher interest expense in our Holding Company segment and Energy segment of $31 million and $25 million, respectively, mainly due to the refinancing of our senior notes at higher interest rates than the prior year.

Income Tax Expense

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The operating results of our subsidiaries may not be sufficient for them to make distributions to us.

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.

For the third quarter of 2024, CVR Energy, our subsidiary in our Energy segment, elected to suspend payment of its cash dividend, and it continued to not pay dividends in the fourth quarter of 2024, which reduced our cash flow for the relevant periods.

As of December 31, 2024, our Holding Company had cash and cash equivalents of approximately $1.4 billion and total debt of approximately $4.7 billion.

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(in millions)

4.750% senior unsecured notes due 2024

6.375% senior unsecured notes due 2025

6.250% senior unsecured notes due 2026

5.250% senior unsecured notes due 2027

4.375% senior unsecured notes due 2029

9.750% senior unsecured notes due 2029

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

6.375% senior notes due 2025

6.250% senior notes due 2026

5.250% senior notes due 2027

4.375% senior notes due 2029

9.750% senior notes due 2029

10.000% senior notes due 2029

9.000% senior notes due 2030

Unamortized discounts, premiums, and debt issuance costs

Notes held in treasury (1)

(1) At December 31, 2024, total debt is net of notes held in treasury of $31 million aggregate principal amount of our 6.250% senior notes due 2026, $73 million aggregate principal amount of our 5.250% senior notes due 2027, and $92 million aggregate principal amount of our 4.375% senior notes due 2029.

At December 31, 2023, total debt is net of shares held in treasury of $12 million aggregate principal amount of our 6.25% senior notes due 2026, $5 million aggregate principal amount of our 5.25% senior notes due 2027, and $ 40 million aggregate principal amount of our 4.375% senior notes due 2029.

(2) Concurrently with the consummation of the issuance of our secured 10.000% senior notes due 2029, the Issuers granted a lien in favor of the holders of the Existing Notes (as defined below) such that the Existing Notes are secured equally and ratably with the secured notes upon the issuance thereof.

Accordingly, while we previously designated the Existing Notes as our senior unsecured notes they are now designated as our senior notes.

Holding Company debt consists of various issues of fixed-rate senior 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.

The remaining repurchased notes of $57 million aggregate principal were extinguished but were not retired and are held in treasury.

In December 2023, the Issuers issued $700 million in aggregate principal amount of 9.750% senior unsecured notes due 2029.

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

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 also effectively subordinated to all indebtedness and other liabilities of the Issuers’ subsidiaries other than the Guarantor.

The indentures governing our senior unsecured notes described above restrict the payment of cash distributions, the purchase of equity interests or the purchase, redemption, defeasance or acquisition of debt subordinated to the senior unsecured notes.

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

In November 2024, the Issuers issued $500 million in aggregate principal amount of secured 10.000% senior notes due 2029 (the “10% 2029 Notes”).

The 10% 2029 Secured Notes are secured by substantially all of our assets directly owned by us and Icahn Enterprises Holdings, the guarantor of the 10% 2029 Notes, subject to customary exceptions.

The net proceeds from the issuance were used to partially redeem $500 million of the outstanding 6.250% senior notes due 2026 on December 16, 2024.

Concurrently with the consummation of this issuance, the Issuers granted a lien in favor of the holders of the Issuers’ 6.250% senior notes due 2026, 5.250% senior notes due 2027, 4.375% senior notes due 2029 and the 9.000% senior notes due 2030 (collectively, the “Existing Notes”) such that the Existing Notes are secured equally and ratably with the 10% 2029 Notes upon the issuance thereof.

In May 2024, the Issuers issued $750 million in aggregate principal amount of 9.000% senior notes due 2030.

The net proceeds from the issuance were used to redeem the remaining outstanding 6.375% senior notes due 2025 in full on June 13, 2024.

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

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

The indentures governing our senior notes described above restrict the payment of cash distributions, the purchase of equity interests or the purchase, redemption, defeasance or acquisition of debt subordinated to the senior notes.

The indentures also restrict the incurrence of debt or the issuance of disqualified stock, as defined in the indentures, with certain exceptions.

In addition, the indentures require that on each quarterly determination date, Icahn Enterprises and the guarantor of the notes (currently only Icahn Enterprises Holdings) maintain certain minimum financial ratios, as defined therein.

In addition, the indentures require that on each quarterly determination date, Icahn Enterprises and

the guarantor of the notes (currently only Icahn Enterprises Holdings) maintain certain minimum financial ratios, as defined therein.

Our notes include a maintenance covenant that requires us to maintain a specified ratio of unencumbered assets compared to our total outstanding principal amount of unsecured indebtedness.

Upon the closing of our secured debt offering in November of 2024, all of our notes are now secured and, as a result, will be excluded from the calculation of the ratio test under these covenants, and we no longer have a material amount of unsecured indebtedness.

As a result, we and our subsidiaries will have substantially more capacity under these covenants, and we no longer have a material amount of unsecured indebtedness.

As a result, we and our subsidiaries will have substantially more capacity under these covenants to incur additional unsecured indebtedness (but subject to the other covenants in the indentures governing our senior notes that restrict the ability of the Issuers and the Guarantors, as well as the ability of our non-guarantor subsidiaries, to incur incremental indebtedness).

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

Additionally, the 6.375% senior unsecured notes due 2025, the 6.250% senior unsecured notes due 2026 and the 9.750% 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.

Additionally, each of the 5.250% senior notes due 2027, the 4.375% senior notes due 2029, the 10.000% senior notes due 2029 and the 9.000% senior notes due 2030 are subject to optional redemption premiums in the event we redeem any of the notes prior to six months before maturity.

The 9.750% senior notes due 2029 are subject to optional redemption premiums in the event we redeem these notes prior to three months before maturity.

As of December 31, 2024 and 2023, we were in compliance with all covenants, including maintaining certain minimum financial ratios, as defined in the indentures.

Additionally, as of December 31, 2023, based on covenants in the

indentures governing our senior unsecured notes, we are not permitted to incur additional indebtedness;

Additionally, as of December 31, 2024, based on covenants in the indentures governing our senior notes, we are not permitted to incur additional indebtedness;

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

Debt Repurchase and Sales

In November and December of 2023, we repurchased in the open market approximately $35 million aggregate principal amount of our 4.750% senior notes due 2024, $12 million aggregate principal amount of our 6.25% senior notes due 2026, $5 million aggregate principal amount of our 5.25% senior notes due 2027, and $40 million aggregate principal amount of our 4.375% senior notes due 2029 for total cash paid of $84 million for a total aggregate principal amount $92 million.

The Company cancelled and reduced the outstanding principal of the repurchased 4.750% senior notes due 2024, and the remaining repurchased notes of $57 million aggregate principal were extinguished but were not retired and are held in treasury.

In April 2024, we sold the $12 million in aggregate principal amount of our 6.250% senior notes due 2026 and the $5 million in aggregate principal amount of our 5.250% senior notes due 2027, both previously repurchased and held in treasury, in the open market.

In August and September of 2024, we repurchased in the open market approximately $52 million aggregate principal amount of our 6.25% senior notes due 2026, $73 million aggregate principal amount of our 5.25% senior notes due 2027, and $52 million aggregate principal amount of our 4.375% senior notes due 2029 for total cash paid of $168 million and a total aggregate principal amount of $177 million of our senior notes repurchased.

The repurchased notes of $177 million aggregate principal were extinguished but were not retired and are held in treasury.

In December 2024, we received $21 million as part of the redemption of our 6.25% senior notes due 2026 held in treasury.

Settlement of Exchange Offer

In August 2024, we commenced an offer to exchange $700 million aggregate principal amount of our 9.750% senior notes due 2029 that have been registered under the Securities Act for $700 million aggregate principal amount of our issued and outstanding, unregistered 9.750% senior notes due 2029 and $750 million in aggregate principal amount of our 9.000% senior notes due 2030 that have been registered under the Securities Act for $750 million in aggregate principal amount of our issued and outstanding, unregistered 9.000% senior notes due 2030.

The offer expired on October 17, 2024.

Future Debt Service Obligations

Interest payments on our Holding Company’s senior unsecured notes will be approximately $271 million for 2024, $301 million for 2025, $214 million for 2026, $137 million for 2027 and an aggregate of $149 million for 2028 through 2029.

Interest payments on our Holding Company’s senior notes will be approximately $332 million for 2025, $304 million for 2026, $242 million for 2027, $215 million for 2028 and an aggregate of $147 million for 2029 through 2030.

At-The-Market Offerings

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

During the year ended December 31, 2023, Icahn Enterprises sold 3,395,353 depositary units pursuant to its current agreement, resulting in gross proceeds of $175 million.

During the year ended December 31, 2022, Icahn Enterprises sold 14,619,272 depository units pursuant to its current agreement, resulting in gross proceeds of $759 million.

As of December 31, 2023, we continue to have an Open Market Sale Agreement and Icahn Enterprises may sell its depositary units for up to an additional $149 million in aggregate gross sale proceeds pursuant to this agreement.

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.

During the year ended December 31, 2024, Icahn Enterprises sold 5,806,986 depositary units pursuant to its existing agreement, resulting in gross proceeds of $102 million.

During the year ended December 31, 2023, Icahn Enterprises sold 3,395,353 depositary units pursuant to its then current agreement, resulting in gross proceeds of $175 million.

On August 26, 2024, we entered into a new Open Market Sales Agreement providing for sales of depositary units of up to $400 million.

We continue to have effective Open Market Sale Agreements and Icahn Enterprises may sell its depositary units for up to an additional $47 million in aggregate gross sale proceeds pursuant to its Open Market Sales Agreement entered into November 21, 2022 and up to $400 million in aggregate gross sales proceeds pursuant to its Open Market Sales Agreement entered into August 26, 2024.

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

Depending on market conditions, we may continue to sell depositary units under the Open Market Sale Agreements, 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 Agreements.

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 depositary units during the year ended December 31, 2023 (all of which were completed during the three months ended March 31, 2023), there can be no assurance that any future capital will be available on acceptable terms or at all under this program.

While we were able to sell depositary units during the year ended December 31, 2024, there can be no assurance that any future capital will be available on acceptable terms or at all under this program.

LP Unit Distributions

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The payment of future distributions will be determined by the board of directors quarterly, based upon the factors described above and other factors that it deems relevant at the time that declaration of a distribution is considered.

Payments of distributions are subject to certain

restrictions, including certain restrictions on our subsidiaries which limit their ability to distribute dividends to us.

Payments of distributions are subject to certain restrictions, including certain restrictions on our subsidiaries which limit their ability to distribute dividends to us.

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

Repurchase Authorization

On May 9, 2023, the Board of Directors of Icahn Enterprises GP, the Company’s General Partner, approved a repurchase program which authorizes Icahn Enterprises or affiliates of Icahn Enterprises to repurchase up to an aggregate of $500 million worth of any of our outstanding fixed-rate senior unsecured notes issued by Icahn Enterprises and Icahn Enterprises Finance Corp.

and up to an aggregate of $500 million worth of the depositary units issued by Icahn Enterprises (the “Repurchase Program”).

On May 9, 2023, the board of directors of Icahn Enterprises GP, the Company’s general partner, approved a repurchase program which authorizes Icahn Enterprises or affiliates of Icahn Enterprises to repurchase up to an aggregate of $500 million worth of any of our outstanding fixed-rate senior notes issued by Icahn Enterprises and Icahn Enterprises Finance Corp.

and up to an aggregate of $500 million worth of the depositary units issued by Icahn Enterprises (the “Repurchase Program”), in each case subject to restrictions on use of our cash contained in the indentures governing our indebtedness.

The repurchases of senior notes or depositary units may be done for cash from time to time in the open market, through tender offers or in privately negotiated transactions upon such terms and at such prices as management may determine.

The authorization of the Repurchase Program is for an indefinite term and does not expire until later terminated by the board of directors of Icahn Enterprises GP.

As of December 31, 2023, the Company has not repurchased any of the Company’s depositary units and the Company has repurchased $92 million worth of senior notes in the aggregate under the Repurchase Program, of which $57 million are held in treasury and $35 million was cancelled.

Partial Sale of Interests in Consolidated Subsidiaries

During the year ended December 31, 2023, we decreased our ownership in CVR Energy through the sale of common stock resulting in proceeds of $158 million, and as of December 31, 2023, we owned approximately 66% of the total outstanding common stock of CVR Energy, compared to 71% as of December 31, 2022.

As of December 31, 2024, the Company has not repurchased any of the Company’s depositary units and the Company has repurchased $269 million worth of senior notes in aggregate under the Repurchase Program.

On November 6, 2024, the Board re-approved the Repurchase Program, and, pursuant to the reapproved Program, we are authorized to repurchase up to an additional $500 million worth of our outstanding fixed-rate senior notes, in addition to the approximately $269 million we have already repurchased under the Repurchase Program, and we remain authorized to repurchase up to $500 million of our depositary units, in each case subject to restrictions on use of our cash contained in the indentures governing our indebtedness.

Captive Insurance Program

On May 1, 2023, we established a captive insurance program to supplement the insurance coverage of the officers, directors, employees and agents of the Company, its subsidiaries and our general partner, in addition to our newly established commercial insurance program.

As a result, our cash available to our Holding Company decreased by $100 million as these assets were transferred to restricted cash.

During 2023, we established a captive insurance program to supplement the insurance coverage of the officers, directors, employees and agents of the Company, its subsidiaries and our general partner, in addition to our newly established commercial insurance program.

As a result, cash available to our Holding Company decreased by $108 million and $100 million at December 31, 2024 and December 31, 2023, respectively, as these assets were transferred to restricted cash.

Whenever the captive insurance program is cancelled, any remaining assets will become available to the Holding Company.

Sale of Investments

In 2023, the Holding Company did not sell any investments.

During 2022, we received proceeds of $153 million from the sale of equity investments held by the Holding Company.

The Holding Company did not sell any investments during 2024 and 2023.

Investment Segment Liquidity

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Icahn, the Investment Funds historically have access to significant amounts of cash available from prime brokerage lines of credit, subject to customary terms and market conditions.

Our cash held at consolidated affiliated partnerships balance was $0.9 billion and $1.1 billion as of December 31, 2024 and December 31, 2023, respectively.

Cash held at consolidated affiliated partnerships relates to our Investment segment and consists of cash and cash equivalents held by the Investment Funds that, although not legally restricted, are not used for the general operating needs of Icahn Enterprises.

Additionally, our Investment segment liquidity is driven by the investment activities and performance of the Investment Funds.

As of December 31, 2023, the Investment Funds had a net short notional exposure of 36%.

As of December 31, 2024, the Investment Funds had a net long notional exposure of 22%.

The Investment Funds’ long exposure was 102% (97% long equity and 5% long credit) and its short exposure was 80% (72% short equity, 7% short credit and 1% short commodity).

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, 2024.

Of the Investment Funds’ 89% long exposure, 54% was comprised of the fair value of its long positions (with certain adjustments) and 35% was comprised mostly of single name equity forward and swap contracts and an option contract.

Of the Investment Funds’ 102% long exposure, 54% was comprised of the fair value of its long positions and 48% was comprised mostly of single name equity forward and swap contracts.

Of the Investment Funds’ 80% short exposure, 33% was comprised of the fair value of its short positions and 47% was comprised mostly of short broad market index swap derivative contracts, short credit default swap contracts and short commodity contracts.

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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 (60% short exposure), our liquidity would decrease by the balance sheet unrealized loss if we were to close the positions at quarter end prices.

With respect to the notional value of our other long positions (48% long exposure) and short positions (47% 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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For our counterparties who do not require cash collateral, funds available from lines of credit would decrease.

During the second quarter of 2023, our bearish view on the market shifted which has impacted and may continue to impact our net short position accordingly, which can be offset by exiting certain long positions and market performance.

Investment Funds Redemption

During the year ended December 31, 2023, Mr.

Icahn and his affiliates (excluding us and Brett Icahn) redeemed $2.0 billion from his personal interests in the Investment Funds included in the Investment segment.

Investment Funds Redemptions and Distributions

During the year ended December 31, 2024 and 2023, Mr.

Icahn and his affiliates (excluding us and Brett Icahn) redeemed $250 million and $2.0 billion from his personal interests in the Investment Funds included in the Investment segment.

As of December 31, 2024 and 2023, the total fair market value of investments in the Investment Funds owned by the Company was approximately $2.7 billion and $3.2 billion, respectively, representing approximately 64% and 60% of the Investment Funds’ assets under management as of each respective date.

In addition, in December 2023, the Investment Funds issued a pro-rata distribution of $400 million, including $158 million to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) and $242 million to the Holding Company.

During the year ended December 31, 2024 and 2023, the Investment Funds issued a pro-rata distribution of $650 and $400 million, including $256 million and $158 million to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) and $394 million and $242 million to the Holding Company, respectively.

Other Segment Liquidity

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Food Packaging

As of December 31, 2023, our Energy segment’s cash and cash equivalents includes $598 million of reserved funds to be utilized for the repayment of the 5.250% senior unsecured notes due 2025.

As of December 31, 2023, our Energy segment’s cash and cash equivalents included to $598 million of reserved funds that were utilized for the repayment of the 5.250% senior notes due 2025 on February 15, 2024.

Sale of Equity Method Investment

During the fourth quarter of 2024, our Energy segment sold an equity method investment for cash consideration of approximately $90 million, resulting in a gain of $24 million included within Other income, net.

Segment Borrowings and Availability

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Food Packaging

In December 2023, CVR Energy issued $600 million in aggregate principal amount of 8.500% senior unsecured notes due 2029.

In December 2024, CVR Energy and certain of its subsidiaries (the “Term Loan Borrowers”) entered into a senior secured term loan facility in the amount of $325 million, which was borrowed in full on the closing date, with net proceeds of $318 million.

At the option of the Term Loan Borrowers, the term loan facility uses a variable interest rate based on SOFR plus 4.00% per year, or an alternate base rate, plus 3.00%.

In February 2024, CVR Energy redeemed all outstanding 5.250% senior unsecured notes due 2025, at par.

As a result of this transaction, CVR Energy will recognize a $1 million loss on extinguishment of debt in the first quarter of 2024.

As a result of this transaction, CVR Energy recognized a $1 million loss on extinguishment of debt in the year ended December 31, 2024.

In December 2023, CVR Energy issued $600 million in aggregate principal amount of 8.500% senior unsecured notes due 2029.

As of December 31, 2024, all of our subsidiaries were in compliance with all debt covenants.

On February 14, 2025, Viskase entered into an amendment to its credit agreement providing for, among other things, a waiver of any events of default relating to financial covenants under the credit agreement for the measurement period ended December 31, 2024, and greater flexibility for the measurement of the financial covenants for each of the fiscal quarters in 2025.

Our segments have additional borrowing availability under certain revolving credit facilities as summarized below:

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Food Packaging

As of December 31, 2023 and 2022, total availability under CVR Energy ABL and CVR Partners variable rate asset based revolving credit facilities aggregated $288 million and $287 million, respectively.

CVR Energy ABL also had $26 million and $23 million of letters of credit outstanding as of December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2024 and 2023, total available capacity under the CVR Energy ABL and CVR Partners’ variable rate asset based revolving credit facilities aggregated $277 million and $288 million, respectively.

The CVR Energy ABL also had $24 million and $26 million of letters of credit outstanding as of December 31, 2024 and December 31, 2023, respectively.

The above outstanding debt and borrowing availability with respect to each of our continuing operating segments reflects third-party obligations.

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

After giving effect to certain debt activity in February 2024, as discussed above, our Energy segment’s future debt maturities (excluding financing leases) are $950 million for 2028 and $600 million for 2029.

Our Energy segment’s future debt maturities (excluding financing leases) are $325 million for 2027, $950 million for 2028 and $600 million for 2029.

Future interest payments for our Energy segment are expected to be approximately $137 million for 2025, $133 to $134 million for each of 2026 and 2027, $69 million for 2028 and $2 million for 2029.

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During the year ended December 31, 2024, our Investment segment paid a pro-rata distribution of $650 million, which included $394 million in cash received by the Company in connection with its portion.

During the year ended December 31, 2023, our Energy segment paid four quarterly distributions aggregating $2.00 per share.

During the year ended December 31, 2024, our Energy segment paid three quarterly distributions aggregating $1.50 per share.

Our portion of the dividend aggregated to $100 million.

In addition, in the third and fourth quarters of 2023, our Energy segment paid a special dividend aggregating $2.50 per share, which included $171 million in cash for our portion.

Furthermore, during the year ended December 31, 2023, our Energy segment had aggregate distributions of $319 million to non-controlling interests, of which $178 million are distributions paid by CVR Partners to its public unit holders.

Subsequent to December 31, 2023, our Energy segment declared a dividend of $0.50 per share, which is payable March 11, 2024 to shareholders of record as of March 4, 2024.

Our portion of the dividend is estimated to be $33 million in cash.

In addition, during the year ended December 31, 2024, our Energy segment had aggregate distributions of $95 million to non-controlling interests, of which $44 million are distributions paid by CVR Partners to its public unit holders.

Subsidiary Stock Repurchase Program

On October 23, 2019, the Board of Directors of CVR Energy authorized a stock repurchase program, which would have enabled it to repurchase up to $300 million of its common stock.

As of December 31, 2023, CVR Energy did not repurchase any common stock, and such program expired, in accordance with its terms, on October 22, 2023.

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 2023, CVR Partners did not repurchase any common units.

During 2022, CVR Partners repurchased common units on the open market at a cost of $12 million.

As of December 31, 2023, CVR Partners had a nominal amount remaining under its unit repurchase program.

On February 20, 2024, the UAN GP Board, on behalf of CVR Partners, terminated the nominal authority remaining under the unit repurchase program.

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Operating Activities:

Cash payments for interest on senior unsecured notes

Cash payments for interest on senior notes

Interest and dividend income

Cash payments for income taxes, net of receipts

Net cash receipts for income taxes, net of payments

Operating transactions with subsidiaries

Operating costs and other

Investing Activities:

Proceeds from the sale of consolidated businesses

Distributions from the Investment Funds

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Proceeds from partial sale of interests in consolidated subsidiaries

Proceeds from Holding Company senior unsecured notes

Repayments and repurchases of Holding Company senior unsecured notes

Proceeds from Holding Company senior notes

Repurchase of senior notes held in treasury

Repayments and repurchases of Holding Company senior notes

Other financing activities, net

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

The decrease in interest payments during 2023 compared to 2022 was primarily due to the redemption of $500 million of senior unsecured notes in February 2022.

Proceeds from the sale of consolidated businesses include proceeds from the sale of PSC Metals in 2021.

Distributions paid from the Investment Funds include a pro-rata distribution paid, which includes payment to the Holding Company, and are eliminated in consolidation.

Cash from operating segments is made up of dividends, distributions, and intercompany loans that are eliminated in consolidation.

During 2023, this includes cash dividends received from CVR Energy of $311 million, cash distributions received from our Real Estate segment of $64 million and repayments of intercompany loans received from our Pharma segment of $10 million.

During 2022, this includes cash dividends received from CVR of $342 million and cash distributions received from our Real Estate segment of $25 million.

Cash to operating segments is made up of contributions and intercompany loans to our operating segments that are eliminated in consolidation.

Changes in cash to operating segments were mainly attributable to cash paid to our Real Estate and Automotive segment in 2023.

Proceeds from the sale of investments include proceeds from the sale of equity investments in 2022 and 2021.

During 2024, this included cash dividends received from CVR Energy of $100 million, cash distributions received from our Real Estate segment of $32 million and repayments of intercompany loans received from our Pharma segment of $28 million and other distributions of $7 million.

During 2023, this included cash dividends received from CVR Energy of $311 million, cash distributions received from our Real Estate segment of $64 million and repayments of intercompany loans received from our Pharma segment of $10 million.

Cash to operating segments is made up of intercompany loans and contributions to our operating segments that are eliminated in consolidation.

During 2024, this included cash paid to our Automotive segment of $38 million, Real Estate segment of $37 million and Home Fashion segment of $18 million.

During 2023, this included cash paid to our Real Estate segment of $32 million and Automotive segment of $10 million.

Proceeds from the sale of investments include proceeds from the sale of equity investments in 2022.

Cash to operating segments are eliminated in consolidation.

Changes in cash to operating segments was mainly attributable for cash paid to our Automotive and Real Estate segments for each year presented.

Proceeds from the sale of investments include proceeds from the sale of equity investments in 2022 and 2021.

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

Proceeds from the partial sale of interests in consolidated subsidiaries include proceeds related to the sale of CVR common stock in 2023.

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

Payments to acquire additional interests in subsidiaries include proceeds related to the purchase of CVR Partners’ common units in 2024.

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

In the fourth quarter of 2023, Mr.

Icahn and his affiliates elected to receive their distribution in a combination of cash and additional depositary units.

For distributions declared for all other quarters in 2023, 2022 and 2021, Mr.

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

In December 2023, proceeds from Holding Company senior unsecured notes include the issuance of $700 million aggregate principal amount of 9.750% senior unsecured notes due 2029.

Repayments of Holding Company senior unsecured notes include the satisfaction and discharge of the 4.750% senior unsecured notes due 2024 and repurchases of treasury notes.

Investment Segment

Our Investment segment’s cash flows from operating activities for the comparable periods were attributable to its net investment transactions.

Our Investment segment’s cash flows used in financing activities for the year ended December 31, 2023 were mainly attributable to redemptions paid to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) of $2.0 billion.

In addition, in December 2023, our Investment segment distributed a pro-rata distribution of $400 million.

For the year ended December 31, 2022, our Investment segment had net cash provided by financing activities of $14 million, as a result of contributions from Brett Icahn in accordance with his manager agreement.

Our Investment segment’s cash flows used in financing activities for the year ended December 31, 2024 was mainly attributable to a pro-rata distribution of $650 million and redemptions paid to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) of $250 million from the Investment Funds.

For 2023, our Investment segment paid redemptions to Mr.

Icahn and his affiliates (excluding us and Brett Icahn) of $2.0 billion and issued a pro-rata distribution of $400 million.

Other Operating Segments

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Acquisition of businesses, net of cash acquired

Proceeds from sale of investments

Proceeds from sale of assets

Proceeds from sale of equity method investments

Financing Activities:

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Increase (decrease) 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 an increase in the operating results of our Energy segment primarily associated with a decrease in expenses resulting from lower crude oil prices and favorable RINs liability revaluation.

Changes in operating assets and liabilities for 2023 and 2022 were primarily attributable to our Energy segment resulting primarily from a decrease in RINs obligations.

Our other operating segments’ cash flow from operating activities before changes in operating assets and liabilities were primarily attributable to the results of our Energy segment during both periods.

The decrease in cash flows from operating activities for the year ended December 31, 2024 as compared to 2023 was primarily due to a decrease in the operating results of our Energy segment primarily associated with a decrease in our petroleum business’ net sales.

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

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Turnaround expenditures relates to our Energy segment, which were higher in 2023 due to planned maintenance at one of its refineries.

Acquisition of businesses, net of cash acquired relates to our Real Estate segment’s purchase of an development land and a country club in 2023.

Proceeds from other borrowings were mainly attributable to CVR Energy’s issuance of $600 million aggregate principal amount of its 8.50% senior unsecured notes due 2029 issued in 2023.

Repayments of other borrowings was mainly attributable to loan repayments in our Home Fashion and Food Packaging segments.

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 2023, 2022 and 2021.

Repayments of other borrowings are related to our Energy segment’s redemption of $600 million principal amount of its 5.25% senior notes due February 2025.

Distributions to non-controlling interests were from our Energy segment relating to its regular quarterly dividends and distributions, excluding payments made to us.

Cash from Holding Company is made up of intercompany loans and contributions between our Holding Company and subsidiaries that are eliminated in consolidation.

During 2024, this included cash paid to our Automotive segment of $38 million, Real Estate segment of $37 million and Home Fashion segment of $18 million.

During 2023, this included cash paid to our Real Estate segment of $32 million and Automotive segment of $10 million.

Cash to Holding Company is made up of dividends, distributions, and intercompany loans that are eliminated in consolidation.

During 2022, this includes cash dividends received from CVR of $342 million and cash distributions received from our Real Estate segment of $25 million.

Cash from Holding Company is made up of intercompany loans to our Holding Company that are eliminated in consolidation.

Changes in cash to operating segments were mainly attributable to cash paid to our Real Estate and Automotive segment in 2023.

Consolidated Capital Spending

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For 2025, we estimate our consolidated capital expenditures to be approximately $165 million to $205 million for our Energy segment, for both maintenance and growth, $113 million for our Automotive segment and approximately $94 million in the aggregate for all other segments.

In addition, our Energy segment mechanically completed a renewable diesel project at one of its refineries in the fourth quarter of 2023 at a cost of $94 million.

Critical Accounting Estimates

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Management periodically evaluates all evidence, both positive and negative, in determining whether a valuation allowance to reduce the carrying value of deferred tax assets is still needed.

For each of December 31, 2023 and 2022, 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.

For each of December 31, 2024 and 2023, 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.

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Similarly, long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

We performed a trademarks and brand names impairment analysis in accordance with FASB ASC 350, Intangibles-Goodwill and other , as of December 31, 2023.

Our impairment analyses compare the fair values of these assets to the related carrying values, and impairment charges are recorded for any excess of carrying values over fair values.

The fair values of these assets are based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets.

Following this analysis, our Automotive segment recognized a $7 million impairment charge in the fourth quarter of 2023.

As of December 31, 2024, our long-lived assets did not have any impairment indicators.

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.

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As of December 31, 2024, our consolidated goodwill was $288 million, primarily within our Automotive segment’s reporting unit.

We perform the annual goodwill impairment test for our Automotive segment as of October 1 of each year.

Based on our quantitative annual goodwill impairment analysis for our Automotive segment, we determined that the fair value of our Automotive segment was higher than its carrying value and therefore, no impairment is required.

We perform the annual goodwill impairment test for our Automotive segment

as of October 1 of each year.

This led to a goodwill triggering event during the quarter ended September 30, 2024.

However, if our growth and profitability initiatives do not realize their expected benefits, our assets in this business may be subject to impairment.

On October 1, 2024, we performed a qualitative annual goodwill impairment analysis for our Automotive segment, we determined that it was not more likely than not that the fair value of the Service reporting unit was below its carrying amount and therefore, no impairment is required.

As of December 31, 2024, our Automotive segment had remaining goodwill of $250 million, which is allocated entirely to its reporting unit.

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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