ICAHN ENTERPRISES L.P. Annual Report - Fiscal Year 2025 Review

ICAHN ENTERPRISES L.P. navigated a challenging financial landscape in fiscal year 2025, reporting a net loss despite strategic portfolio management. Here's a detailed look at the company's performance and key developments:

Business Overview

ICAHN ENTERPRISES L.P. operates as a highly diversified holding company, actively managing a broad portfolio of businesses. In fiscal year 2025, its main operations spanned several key sectors:

• Energy: Through CVR Energy Inc., the company refines petroleum (CVR Refining LP) and produces nitrogen fertilizer (CVR Partners LP). This segment contended with significant commodity price volatility; refining margins softened in the latter half of the year, although fertilizer demand held relatively stable.
• Automotive: This segment focuses on automotive parts distribution and service. Following the 2023 strategic divestiture of its AutoPlus retail operations (known as 'deconsolidation'), the company streamlined its focus, emphasizing operational efficiency in a competitive market.
• Food Packaging: Viskase, the company's food packaging unit, saw consistent product demand, though raw material costs remained a key consideration.
• Real Estate: The company managed a property portfolio, generating steady rental income and strategically selling select assets.
• Investment Segment: A crucial part of the business, this segment actively manages a diverse portfolio of public and private equity, credit, and other financial instruments. In 2025, it recorded significant 'mark-to-market' losses—meaning the reported value of its investments declined on paper—due to challenging market conditions for certain holdings.
• Other areas: The company also holds smaller interests in pharmaceuticals and home fashion.

Financial Performance

ICAHN ENTERPRISES L.P. reported total revenues of approximately $12.5 billion for fiscal year 2025, down from $13.1 billion in 2024. This decline primarily stemmed from lower commodity prices in the Energy segment and strategic divestitures. The company recorded a net loss attributable to Icahn Enterprises L.P. of $350 million in 2025, a significant reversal from the $120 million net income reported in 2024. Substantial 'mark-to-market' losses in the Investment segment and non-cash impairment charges in the Energy sector largely drove this loss. Adjusted EBITDA, a key measure of operational performance, reached $1.2 billion for 2025, decreasing from $1.5 billion in 2024, which reflects the challenging operating environment. The Investment segment alone posted a net loss of $600 million in 2025, a stark contrast to its $400 million gain in 2024.

Management Discussion and Analysis (MD&A) Highlights

Management's discussion emphasizes the key operational and financial factors that shaped the company's performance and financial health. A primary challenge in 2025 involved navigating highly volatile commodity markets, which significantly impacted the Energy segment's profitability. The company also recorded a $200 million non-cash impairment charge related to certain Energy segment assets. This charge, which reduced reported profits, stemmed from a more conservative accounting estimate for the 'useful life' of these assets, rather than an immediate operational decline.

Despite these challenges, the company actively managed its portfolio, realizing $150 million in gains from selling select equity investments and $50 million from real estate dispositions. Additionally, in early 2026, the company successfully refinanced strategic debt, improving its maturity profile and anticipating reduced future interest costs.

No significant changes in executive leadership occurred in 2025. The company maintained its strategic focus on active portfolio management. A key strategic shift in 2023 involved the deconsolidation of the AutoPlus business within the Automotive segment. This move streamlined the segment, allowing it to concentrate on higher-margin parts distribution and service operations and reducing exposure to the highly competitive, lower-margin retail auto parts sector.

Looking ahead, the Energy segment is closely monitoring global energy transition policies and carbon reduction initiatives, which could influence future operations and capital expenditures. The Automotive segment is adapting to evolving vehicle maintenance trends and supply chain dynamics. Across all segments, inflationary pressures and interest rate movements remain critical macroeconomic factors, affecting consumer spending and operational costs.

Financial Health

As of December 31, 2025, ICAHN ENTERPRISES L.P. reported approximately $2.1 billion in cash and cash equivalents, which included $800 million in restricted cash. This represents a decrease from $2.5 billion at the end of 2024. Total consolidated debt stood at $7.8 billion at year-end 2025, a slight reduction from $8.0 billion in 2024.

The company's key debt instruments include:

• $1.0 billion in 4.75% Notes due 2026
• $1.5 billion in CVR Energy's 6.50% Notes due 2028
• $1.2 billion in new 5.25% Senior Unsecured Notes issued in 2024 and due 2029

The company's debt-to-EBITDA ratio, a measure of its ability to pay off its debt, increased to 6.5x from 5.3x in 2024, primarily reflecting the decline in EBITDA. ICAHN ENTERPRISES L.P. maintained access to $1.0 billion in revolving credit facilities, with $400 million undrawn at year-end, providing ample liquidity. Demonstrating proactive debt management, the company successfully refinanced approximately $1.0 billion of its 2026 Notes in early 2026, extending maturities and optimizing interest expenses.

Risk Factors

ICAHN ENTERPRISES L.P. navigates several significant risk factors:

• Market Volatility: The company faces substantial risk from market volatility, especially due to its large Investment segment and exposure to commodity prices like oil, natural gas, and fertilizer components. For example, a hypothetical 10% decline in its investment portfolio's value could reduce net assets by over $500 million.
• Interest Rate Risk: Rising interest rates pose a concern, as they could increase borrowing costs for variable-rate debt and future refinancings.
• Environmental Regulations: The Energy and manufacturing segments are exposed to evolving environmental regulations and associated compliance costs.
• Derivatives Use: The company extensively uses financial instruments known as 'derivatives' (such as forward contracts, commodity swaps, equity contracts, and credit default swaps) to manage risk. However, these instruments can also introduce counterparty risk and the potential for significant losses if market movements are unfavorable or if hedging strategies do not perform as expected.

Competitive Position

ICAHN ENTERPRISES L.P. maintains its competitive standing across its diverse segments:

• Energy: CVR Energy operates in highly competitive refining and fertilizer markets, leveraging its integrated structure for an advantage.
• Automotive: Following the AutoPlus deconsolidation, this segment focuses on niche parts distribution and service, competing effectively with larger national chains.
• Investment: The Investment segment's competitive edge comes from its activist investment strategy, which aims to unlock value in underperforming companies.

Future Outlook

Management anticipates ongoing volatility in commodity markets but remains committed to optimizing operational efficiency across its core segments. The successful debt refinancing completed in early 2026 enhances the company's financial flexibility. The Investment segment will continue to pursue opportunistic activist investments. Overall, ICAHN ENTERPRISES L.P. aims to improve profitability by leveraging its diversified portfolio and disciplined capital allocation, all while carefully managing its debt profile.