Delaware | 1-9516 | 13-3398766 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
767 Fifth Avenue, Suite 4700, New York, NY 10153 |
(Address of Principal Executive Offices) (Zip Code) |
o | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ICAHN ENTERPRISES L.P. | |||
(Registrant) | |||
By: | Icahn Enterprises G.P. Inc., | ||
its general partner | |||
By: | /s/ Peter Reck | ||
Peter Reck | |||
Chief Accounting Officer |
• | Sales of $1.9 billion, or 7 percent higher than Q2 2013 |
• | Operational EBITDA of $180 million or 9.6 percent of sales, up from $162 million or 9.3 percent of sales in Q2 2013 |
• | Operating income of $100 million, up $10 million from Q2 2013 |
• | Adjusted net income from continuing operations of $50 million |
• | Free Cash Flow of $67 million in Q2 2014 |
• | Adjusted net income per share from continuing operations was $0.33 in Q2 2014 |
Financial Summary | Q2 2014 | Q2 2013 | B/(W) | ||||||||
($ millions) | |||||||||||
Net Sales | $ | 1,872 | $ | 1,744 | $ | 128 | |||||
Gross Margin | $ | 297 | $ | 278 | $ | 19 | |||||
pct. of sales | 15.9 | % | 15.9 | % | 0% | ||||||
SG&A | $ | (195 | ) | $ | (184 | ) | $ | (11 | ) | ||
pct. of sales | (10.4 | )% | (10.6 | )% | 0.2 | % | |||||
Operating Income 1 | $ | 100 | $ | 90 | $ | 10 | |||||
Restructuring and Impairment Charges | $ | (32 | ) | $ | (10 | ) | $ | (22 | ) | ||
Net (Loss) Income from Continuing Operations | $ | (3 | ) | $ | 63 | $ | (66 | ) | |||
Adjusted Net Income from Continuing Operations 2 | $ | 50 | $ | 52 | $ | (2 | ) | ||||
Net Income (Loss) attributable to Federal-Mogul | $ | (5 | ) | $ | 56 | $ | (61 | ) | |||
(Loss) Earnings Per Share in dollars, diluted EPS | $ | (0.03 | ) | $ | 0.57 | $ | (0.6 | ) | |||
Operational EBITDA 3 | $ | 180 | $ | 162 | $ | 18 | |||||
pct. of sales | 9.6 | % | 9.3 | % | 0.3 | % | |||||
Free Cash Outflow 4 | $ | 67 | $ | 73 | $ | (6 | ) |
Domestic calls: | 888.680.0890 | |
International calls: | 617.213.4857 | |
Passcode I.D.: | 11612248 |
Domestic calls: | 888.286.8010 | |
International calls: | 617.801.6888 | |
Passcode I.D.: | 73504144 |
(1) | Operating Income is defined as net (loss) income from continuing operations less interest, taxes, restructuring and impairment charges, loss on extinguishment of debt and OPEB curtailment gains or losses. Note: Presented on a continuing operations basis. |
(2) | Adjusted net income from continuing operations is defined as net (loss) income from continuing operations less restructuring and impairment charges, loss on extinguishment of debt, OPEB curtailment gains or losses and related tax impact on these items. |
(3) | Management believes that Operational EBITDA provides supplemental information for management and investors to evaluate the operating performance of its business. Management uses, and believes that investors benefit from referring to Operational EBITDA in assessing the Company’s operating results, as well as in planning, forecasting and analyzing future periods as this financial measure approximates the cash flow associated with the operational earnings of the Company. Additionally, Operational EBITDA presents measures of corporate performance exclusive of the Company’s capital structure and the method by which assets were acquired and financed. Operational EBITDA is defined as earnings from continuing operations before interest, income taxes, depreciation and amortization, and certain items such as restructuring and impairment charges, Chapter 11 and U.K. Administration related reorganization expenses, gains or losses on the sales of businesses, the non-service cost components of the U.S. based funded pension plan, OPEB curtailment gains or losses, the income statement impacts associated with stock appreciation rights, and loss on extinguishment of debt. |
(4) | Free Cash Flow is defined as net cash provided from (used by) operating activities less capital investment for plant, property and equipment. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions of Dollars, Except Per Share Amounts) | |||||||||||||||
Net sales | $ | 1,872 | $ | 1,744 | $ | 3,651 | $ | 3,403 | |||||||
Cost of products sold | (1,575 | ) | (1,466 | ) | (3,080 | ) | (2,876 | ) | |||||||
Gross margin | 297 | 278 | 571 | 527 | |||||||||||
Selling, general and administrative expenses | (195 | ) | (184 | ) | (376 | ) | (368 | ) | |||||||
OPEB curtailment gain | — | 19 | — | 19 | |||||||||||
Interest expense, net | (31 | ) | (24 | ) | (53 | ) | (53 | ) | |||||||
Restructuring expense, net | (30 | ) | (8 | ) | (38 | ) | (15 | ) | |||||||
Loss on debt extinguishment | (24 | ) | — | (24 | ) | — | |||||||||
Equity earnings of non-consolidated affiliates | 13 | 10 | 27 | 19 | |||||||||||
Amortization expense | (12 | ) | (12 | ) | (24 | ) | (24 | ) | |||||||
Adjustment of assets to fair value | (2 | ) | (2 | ) | (2 | ) | (2 | ) | |||||||
Other (expense) income, net | (4 | ) | (1 | ) | (10 | ) | 3 | ||||||||
Income from continuing operations before income taxes | 12 | 76 | 71 | 106 | |||||||||||
Income tax expense | (15 | ) | (13 | ) | (33 | ) | (24 | ) | |||||||
Net income (loss) from continuing operations | (3 | ) | 63 | 38 | 82 | ||||||||||
Loss from discontinued operations, net of income tax | — | (5 | ) | — | (56 | ) | |||||||||
Net income (loss) | (3 | ) | 58 | 38 | 26 | ||||||||||
Less net income attributable to noncontrolling interests | (2 | ) | (2 | ) | (3 | ) | (4 | ) | |||||||
Net income (loss) attributable to Federal-Mogul | $ | (5 | ) | $ | 56 | $ | 35 | $ | 22 | ||||||
Amounts attributable to Federal-Mogul: | |||||||||||||||
Net income (loss) from continuing operations | $ | (5 | ) | $ | 61 | $ | 35 | $ | 78 | ||||||
Loss from discontinued operations, net of income tax | — | (5 | ) | — | (56 | ) | |||||||||
Net income (loss) | $ | (5 | ) | $ | 56 | $ | 35 | $ | 22 | ||||||
Net income (loss) per common share attributable to Federal-Mogul Basic and diluted: | |||||||||||||||
Net income (loss) from continuing operations | $ | (0.03 | ) | $ | 0.62 | $ | 0.23 | $ | 0.79 | ||||||
Loss from discontinued operations, net of income tax | — | (0.05 | ) | — | (0.57 | ) | |||||||||
Net income (loss) | $ | (0.03 | ) | $ | 0.57 | $ | 0.23 | $ | 0.22 |
June 30 2014 | December 31 2013 | ||||||
(Millions of Dollars) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 628 | $ | 761 | |||
Accounts receivable, net | 1,470 | 1,324 | |||||
Inventories, net | 1,146 | 1,068 | |||||
Prepaid expenses and other current assets | 245 | 224 | |||||
Total current assets | 3,489 | 3,377 | |||||
Property, plant and equipment, net | 2,054 | 2,038 | |||||
Goodwill and other indefinite-lived intangible assets | 1,055 | 1,017 | |||||
Definite-lived intangible assets, net | 385 | 356 | |||||
Investments in non-consolidated affiliates | 289 | 253 | |||||
Other noncurrent assets | 152 | 141 | |||||
$ | 7,424 | $ | 7,182 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt, including current portion of long-term debt | $ | 108 | $ | 1,694 | |||
Accounts payable | 850 | 799 | |||||
Accrued liabilities | 524 | 454 | |||||
Current portion of pensions and other postemployment benefits liability | 44 | 44 | |||||
Other current liabilities | 172 | 147 | |||||
Total current liabilities | 1,698 | 3,138 | |||||
Long-term debt | 2,581 | 905 | |||||
Pensions and other postemployment benefits liability | 984 | 1,028 | |||||
Long-term portion of deferred income taxes | 390 | 383 | |||||
Other accrued liabilities | 126 | 127 | |||||
Shareholders’ equity: | |||||||
Preferred stock ($.01 par value; 90,000,000 authorized shares; none issued) | — | — | |||||
Common stock ($0.01 par value; 450,100,000 authorized shares; 151,624,744 issued shares and 150,029,244 outstanding shares as of June 30, 2014 and December 31, 2013) | 2 | 2 | |||||
Additional paid-in capital, including warrants | 2,649 | 2,649 | |||||
Accumulated deficit | (483 | ) | (518 | ) | |||
Accumulated other comprehensive loss | (620 | ) | (626 | ) | |||
Treasury stock, at cost | (17 | ) | (17 | ) | |||
Total Federal-Mogul shareholders’ equity | 1,531 | 1,490 | |||||
Noncontrolling interests | 114 | 111 | |||||
Total shareholders’ equity | 1,645 | 1,601 | |||||
$ | 7,424 | $ | 7,182 | ||||
Six Months Ended June 30 | |||||||
2014 | 2013 | ||||||
(Millions of Dollars) | |||||||
Cash Provided From (Used By) Operating Activities | |||||||
Net income | $ | 38 | $ | 26 | |||
Adjustments to reconcile net income to net cash provided from operating activities: | |||||||
Depreciation and amortization | 163 | 144 | |||||
Loss on debt extinguishment | 24 | — | |||||
Net loss from business dispositions | — | 52 | |||||
Restructuring expense, net | 38 | 16 | |||||
Payments against restructuring liabilities | (19 | ) | (12 | ) | |||
Change in postemployment benefits | (31 | ) | (29 | ) | |||
Equity earnings of non-consolidated affiliates | (27 | ) | (19 | ) | |||
Cash dividends received from non-consolidated affiliates | 5 | 4 | |||||
OPEB curtailment gain | — | (19 | ) | ||||
Adjustment of assets to fair value | 2 | 2 | |||||
Deferred tax benefit | (4 | ) | (4 | ) | |||
Gain from sales of property, plant and equipment | (1 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (124 | ) | (152 | ) | |||
Inventories | (12 | ) | (53 | ) | |||
Accounts payable | 65 | 108 | |||||
Other assets and liabilities | 44 | 52 | |||||
Net Cash Provided From Operating Activities | 161 | 116 | |||||
Cash Provided From (Used By) Investing Activities | |||||||
Expenditures for property, plant and equipment | (173 | ) | (186 | ) | |||
Payments to acquire businesses, net of cash acquired | (165 | ) | — | ||||
Net proceeds from sales of property, plant and equipment | 3 | — | |||||
Net payments associated with business dispositions | — | (25 | ) | ||||
Capital investment in non-consolidated affiliate | — | (4 | ) | ||||
Net Cash Used By Investing Activities | (335 | ) | (215 | ) | |||
Cash Provided From (Used By) Financing Activities | |||||||
Proceeds from term loans, net of original issue discount | 2,589 | — | |||||
Principal payments on term loans | (2,537 | ) | (15 | ) | |||
Debt issuance cost | (12 | ) | — | ||||
Decrease in other long-term debt | (2 | ) | 3 | ||||
Increase in short-term debt | — | 42 | |||||
Net remittances on servicing of factoring arrangements | (1 | ) | (4 | ) | |||
Net Cash Used By Financing Activities | 37 | 26 | |||||
Effect of foreign currency exchange rate fluctuations on cash | 4 | (19 | ) | ||||
Decrease in cash and equivalents | (133 | ) | (92 | ) | |||
Cash and equivalents at beginning of period | 761 | 467 | |||||
Cash and equivalents at end of period | $ | 628 | $ | 375 |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions of Dollars) | |||||||||||||||
Net income (loss) | $ | (3 | ) | $ | 58 | $ | 38 | $ | 26 | ||||||
Discontinued operations | — | 5 | — | 56 | |||||||||||
Net income (loss) from continuing operations | (3 | ) | 63 | 38 | 82 | ||||||||||
Depreciation and amortization | 82 | 72 | 162 | 142 | |||||||||||
Interest expense, net | 31 | 24 | 53 | 53 | |||||||||||
Restructuring expense, net | 30 | 8 | 38 | 15 | |||||||||||
Loss on debt extinguishment | 24 | — | 24 | — | |||||||||||
OPEB curtailment gain | — | (19 | ) | — | (19 | ) | |||||||||
Non-service cost components associated with U.S. based funded pension plans | (2 | ) | 1 | (3 | ) | 1 | |||||||||
Adjustment of assets to fair value | 2 | 2 | 2 | 2 | |||||||||||
Stock appreciation rights | (1 | ) | 1 | (2 | ) | — | |||||||||
Income tax expense | 15 | 13 | 33 | 24 | |||||||||||
Other | 2 | (3 | ) | 2 | — | ||||||||||
Operational EBITDA | $ | 180 | $ | 162 | $ | 347 | $ | 300 | |||||||
Net income (loss) from continuing operations | $ | (3 | ) | $ | 63 | $ | 38 | $ | 82 | ||||||
Restructuring and impairment charges, net | 32 | 10 | 40 | 17 | |||||||||||
OPEB curtailment gain | — | (19 | ) | — | (19 | ) | |||||||||
Loss on extinguishment of debt | 24 | — | 24 | — | |||||||||||
Net tax impact on above | (3 | ) | (2 | ) | (4 | ) | (3 | ) | |||||||
Adjusted net income from continuing operations | $ | 50 | $ | 52 | $ | 98 | $ | 77 | |||||||
Free Cash Flow | |||||||||||||||
Net cash provided from operating activities | $ | 144 | $ | 166 | $ | 161 | $ | 116 | |||||||
Expenditures for property, plant and equipment | (77 | ) | (93 | ) | (173 | ) | (186 | ) | |||||||
$ | 67 | $ | 73 | $ | (12 | ) | $ | (70 | ) |