Icahn Enterprises L.P.

What they do

Icahn Enterprises is a master limited partnership that operates seven reporting segments: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion, and Pharma. It seeks undervalued companies using a Graham & Dodd approach, often becoming actively involved or acquiring control. Its Investment segment holds significant positions in companies like American Electric Power, Southwest Gas, EchoStar, Centuri Holdings, and International Flavors and Fragrances. The Energy segment includes CVR Energy, which was originally an investment position and is now a controlled operating subsidiary.

Revenue drivers

• Energy (CVR Energy) — Petroleum refining and nitrogen fertilizer operations; 71% owned; a major revenue contributor but subject to volatile crack spreads and geopolitical impacts.
• Investment — Holds significant positions in public equities and private funds; generates returns from activism and market moves; reported a $243 million decrease in value from Investment Funds in Q2 2026.
• Automotive, Food Packaging, Real Estate, Home Fashion, Pharma — Operating segments that provide diversified revenue streams, though individual revenue breakdowns are not provided in the excerpts.

Recent performance

For Q2 2026, revenues were $3.0 billion and net loss attributable to IEP was $355 million, or a loss of $0.52 per depositary unit, compared to a net loss of $165 million in Q2 2025. Adjusted EBITDA loss was $134 million in Q2 2026, versus positive $40 million in the prior-year quarter. Indicative net asset value was approximately $2.6 billion as of June 30, 2026, down $765 million from March 31, 2026, driven by a $435 million decrease in the CVI long position and $243 million from Investment Funds losses. For the six months ended June 30, 2026, revenues were $5.2 billion and net loss was $814 million. The company declared a quarterly distribution of $0.50 per depositary unit.

Strategy

Management follows an activist strategy targeting undervalued companies, often removing barriers to friendly takeovers or becoming the buyer. It aims to structure activities to avoid being classified as an investment company and to be taxed as a partnership. Carl Icahn stated the company is 'right-sizing' its hedge portfolio to better align with underlying exposures and reduce volatility. He also highlighted CVR Energy as an undervalued controlled position with potential for long-term profitability, given barriers to new refinery construction and geopolitical threats to existing refining infrastructure.

Risks

• Geopolitical and hedge mismatch — Q2 2026 results were hurt by exceptional geopolitical events that disproportionately affected long refining exposure versus crack spreads and short refinery positions.
• Concentration risk in CVR Energy — A $435 million decline in the value of the long CVI position drove a significant portion of the quarterly net asset value decrease.
• Controlling unitholder influence and estate plan — Carl Icahn and affiliates own approximately 86% of depositary units, and his death or margin calls on his pledged units could impact liquidity and unit price.
• Investment company classification — The company must keep investment securities to no more than 40% of total assets to avoid being regulated as an investment company, limiting certain activities.

Outlook

Management expects the hedge portfolio adjustments to reduce periodic volatility and improve consistency of performance. Carl Icahn believes the current environment offers attractive opportunities for refineries like CVR, given capital barriers and geopolitical threats. He expressed optimism about liquidity and expects to update unitholders next quarter.