IEP Q1 2026 Earnings Transcript

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DATE

Wednesday, May 6, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Ted Papapostolou
• Former Chief Executive Officer — Andrew Teno
• Chief Financial Officer — Robert E. Flint

TAKEAWAYS

• Leadership Transition -- Ted Papapostolou formally succeeded Andrew Teno as Chief Executive Officer, as announced on the call.
• Net Loss -- Consolidated net loss attributable to Icahn Enterprises L.P. (NASDAQ:IEP) was $459 million, representing a loss of $0.71 per unit.
• Investment Segment Hedge Impact -- The Investment segment incurred $320 million in losses on refining hedges, directly weighing on overall results.
• Adjusted EBITDA -- Adjusted EBITDA loss attributable to IEP was $216 million, improving from an adjusted EBITDA loss of $228 million in the prior-year quarter.
• Investment Funds Return -- The investment funds produced a positive 4.4% return excluding refining hedges, while the return including refining hedges was negative 8.2%.
• Net Short Exposure -- Net short notional exposure for the investment funds stood at 29% at quarter-end, versus 13% at year-end; excluding refining hedges, net short was 2%, down from a net long of 19% at year-end.
• Cash Position -- The funds held approximately $782 million in cash at quarter-end.
• Investment in Funds -- IEP’s investment in its funds totaled approximately $2.2 billion as of the end of the period.
• Distribution -- The Board declared an unchanged distribution of $0.50 per depository unit.
• Energy Segment Performance -- The Energy segment reported adjusted EBITDA of negative $5 million, versus negative $6 million in the prior-year quarter.
• Energy Segment Headwinds -- The segment recorded $158 million in unrealized derivative losses and higher RFS obligation costs impacted margins.
• Strong Fertilizer Demand -- Fertilizer segment performance was bolstered by seasonal spring planting demand and cited global supply tightness.
• Automotive Service Revenues -- Automotive service revenues fell by $9 million, attributed to store closures, partially offset by price increases; same-store sales rose by 2%.
• Real Estate Segment -- Real Estate adjusted EBITDA increased by $18 million, mainly due to asset transfers from Automotive (including $9 million intercompany and $2 million from third-party tenants).
• Food Packaging EBITDA -- Food Packaging adjusted EBITDA declined by $6 million, reflecting volume reductions and headwinds from restructuring.
• Home Fashion Segment -- Home Fashion adjusted EBITDA decreased by $2 million, cited as due to retail/hospitality softness and supply disruptions in the Strait of Hormuz.
• Pharma Segment -- Pharma adjusted EBITDA fell by $10 million, explained by generic competition in anti-obesity and higher R&D for the ongoing pivotal drug trial (TRANSCEND for PAH).
• Operating Liquidity -- At quarter-end, the holding company reported $2.8 billion in cash and investment in funds; subsidiaries maintained cash and revolver availability of $1.3 billion.
• CVI Dividend -- CVI announced a $0.10 dividend, referenced as a highlight for the investment portfolio.
• Key Portfolio Position Movements -- Notable Q1 stock gains included AEP up 14%, Century up 16%, IFF up 8%, Caesars up 13%, and EchoStar up 8%.

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RISKS

• Chief Financial Officer Robert E. Flint cited a consolidated net loss attributable to IEP of $459 million and a first-quarter adjusted EBITDA loss of $216 million, directly stating, Our first-quarter consolidated results include $425 million of losses on refining hedges in our Investment segment and $158 million of unrealized derivative losses in our Energy segment.
• Management pointed to negative trends in Food Packaging, Home Fashion, and Pharma, each reporting year over year adjusted EBITDA declines, with cited reasons including disruptive headwinds from restructuring, supply chain disruptions in the Strait of Hormuz, softening demand, increased R&D expenses, and heightened generic competition.

SUMMARY

The earnings call highlighted a leadership handoff to Ted Papapostolou amid continued challenges from refining hedges, which contributed to a consolidated net loss and widespread segment-level headwinds. The company underscored significant net short exposure in its investment funds and outlined both positive and negative returns across major portfolio positions and business segments. Management confirmed the positioning of the investment funds and core operating businesses to leverage liquidi assets amid sector volatility and outlined sustained focus on building asset value.

• Portfolio commentary noted that AEP reaffirmed its 2026 EPS outlook and raised its long-term operating earnings CAGR target to over 9%, supported by 63 gigawatts of contracted load growth and 11% rate base expansion through 2030.
• Century delivered 2,850% year-over-year base revenue and gross profit growth for Q4, with management referencing ongoing double-digit growth expectations for 2026.
• Caesars' digital business posted a 61% EBITDA increase, and management cited expectations for significant 2026 cash flow with potential for share repurchases and debt reduction.
• Management indicated ongoing liquidity reserves across the holding company and subsidiaries, positioning IEP to pursue opportunities within and outside current business lines.

INDUSTRY GLOSSARY

• RFS obligation costs: Regulatory costs tied to the Renewable Fuel Standard, which mandates blending renewable fuels with transportation fuel, impacting refinery margins.
• TRANSCEND trial: A pivotal clinical trial referenced for evaluating IEP’s investigational drug for pulmonary arterial hypertension (PAH).
• Net short notional exposure: The percentage of a portfolio’s value exposed to short positions, representing a directional bet against assets, after accounting for any offsetting long positions.
• CAGR: Compound annual growth rate, measuring the year-over-year growth rate of an investment over a specified time period.

Full Conference Call Transcript

I will now turn it over to Andrew Teno.

Andrew Teno: Thank you, Joe, and good morning, everyone. I wanted to say thank you to everyone whom I have worked with over the past few years, both before becoming CEO and after. It is an honor and privilege to work with and learn from the living legend of activism in our Chairman, Carl Icahn. Over the past few years, we have worked hard to high-grade the investment fund portfolio and to get our controlled operations moving in the right direction. I leave the company knowing that it is in good hands with a significant war chest to take advantage of opportunities as they arise. It has been a pleasure and an honor.

And with that, I will hand it over to Ted, our new CEO. Congratulations, Ted.

Ted Papapostolou: Thank you, Andrew. Before turning to the work ahead, I want to begin by thanking Andrew for his leadership and service to Icahn Enterprises and to wish him continued success in his next chapter. I am honored to take on the role of CEO and excited by the opportunity ahead. Icahn Enterprises has a unique portfolio, a strong heritage of disciplined capital allocation, and a culture of accountability and long-term thinking. I look forward to building on that foundation, working closely with Carl and our board, to continue strengthening the enterprise and executing on our priorities. I also look forward to working with Rob in his new role as CFO. With that, let us get into the results.

First-quarter NAV increased by [inaudible] compared to year-end. The increase was primarily driven by an increase of [inaudible] in our long position in CVI, which was offset in part by losses on refining hedges of $320 million in our Investment segment, also known as the funds. Regarding CVI, major geopolitical events drove volatility, which has set up attractive market opportunities for the balance of 2026. We believe CVI is well positioned to allow for potential future debt reductions and capital returns to shareholders. We are pleased with CVI’s announcement of a $0.10 dividend. For Q1, the Investment segment was up approximately 4% excluding the refining hedges.

In terms of our top positions, AEP is an electric utility that benefits from the AI infrastructure build. In the first quarter, the company reaffirmed its 2026 operating EPS outlook and increased its long-term operating earnings CAGR to greater than 9%, supported by 63 gigawatts of incremental contracted load and 11% rate base growth through 2030. AEP stock was up approximately 14% for Q1. Century reported strong base revenue and gross profit growth of 2,850% in Q4. The company also guided to strong double-digit base revenue and gross profit growth for 2026 as it continues to capture the tremendous tailwinds from increased energy infrastructure investment. The stock was up approximately 16% for Q1.

IFF continues to execute on its portfolio optimization, running a sale process for its food ingredients business and announcing the completion of its divestiture of the soy crush business. IFF stock was up approximately 8% for Q1. Caesars reported solid Q1 results, with Vegas stabilizing, regional sales growing in the low single digits, and Digital posting strong EBITDA growth of 61%. Caesars is expected to generate significant cash flow in 2026, which we hope will fund meaningful share repurchases and debt paydown. Caesars stock was up approximately 13% for Q1.

EchoStar lowered its total expected tax and decommissioning costs related to its divested assets, and we believe meaningful upside remains for the position, with the IPO of SpaceX potentially serving as a material positive catalyst. EchoStar stock was up approximately 8% for Q1. As of quarter-end, we had approximately $782 million in cash at the funds. Lastly, the Board declared an unchanged distribution at $0.50 per depository unit. I will now pass it to Rob to discuss our financial results.

Robert E. Flint: Thank you, Ted. For 2026, net loss attributable to IEP was $459 million, or a loss of $0.71 per unit. Our first-quarter consolidated results include $425 million of losses on refining hedges in our Investment segment and $158 million of unrealized derivative losses in our Energy segment. Q1 2026 adjusted EBITDA loss attributable to IEP was $216 million, compared to adjusted EBITDA loss attributable to IEP of $228 million for the prior-year quarter. I will now provide more detail regarding the performance of our individual segments. The investment funds had a positive return of 4.4% for the quarter, excluding refining hedges. Including the refining hedges, the funds had a negative return of 8.2% for the quarter.

Long and other positions had a net positive performance of 4.1%, and short positions had a negative performance attribution of 12.9%. The investment funds had a net short notional exposure of 29% at the end of the quarter, compared to a net short of 13% at year-end. Excluding our refining hedges, the funds had a net short notional exposure of 2% as of quarter-end, compared to a net long of 19% at year-end. Our investment in the funds was approximately $2.2 billion as of quarter-end. Moving to our Energy segment, Energy segment adjusted EBITDA attributable to IEP was negative $5 million for Q1 2026, compared to negative $6 million for Q1 2025.

The first-quarter refining operations were solid, with crude utilization of 97%, although margins were weighed down by higher RFS obligation costs and unrealized derivative losses. The Fertilizer segment had strong results driven by robust demand for the spring planting season. We believe that CVI’s assets are well positioned to benefit from the global tightness in refined product and nitrogen fertilizer. Now turning to our Automotive segment, Q1 2026 automotive service revenues decreased by $9 million compared to the prior-year quarter, primarily driven by the closure of stores during the balance of 2025, offset in part by increased price. Same-store sales paint a better picture, having increased by approximately 2% as compared to the prior-year quarter.

We are pleased with this positive revenue trajectory, but there is still a lot more work to be done. We continue to focus our efforts on product, pricing, labor, and distribution strategy. Now turning to all other operating segments. Real Estate’s Q1 2026 adjusted EBITDA increased by $18 million compared to the prior-year quarter. The increase is primarily driven by income from the assets that were transferred from the Automotive segment, of which $9 million is intercompany income from the Auto segment and $2 million from third-party tenants. Food Packaging’s adjusted EBITDA attributable to IEP decreased by $6 million for Q1 2026 as compared to the prior-year quarter.

The decrease is primarily due to lower volume and disruptive headwinds from the restructuring plan. Home Fashion’s adjusted EBITDA decreased by $2 million when compared to the prior-year quarter, primarily due to softening demand in retail and hospitality businesses and supply chain disruptions in the Strait of Hormuz. Pharma’s adjusted EBITDA decreased by $10 million when compared to the prior-year quarter, primarily due to reduced sales resulting from generic competition in the anti-obesity market and increased R&D expenses related to our ongoing pivotal drug trials. The TRANSCEND trial preparation for our PAH drug is on schedule, and the first patient will be dosed in the next 60 to 90 days.

The physician community remains excited by the potential for a disease-modifying designation. Now turning to our liquidity. We maintain liquidity at the holding company and at our operating subsidiaries to take advantage of attractive opportunities. As of quarter-end, the holding company had cash and investment in the funds of $2.8 billion, and our subsidiaries had cash and revolver availability of $1.3 billion. We continue to focus on building asset value and maintaining liquidity to enable us to capitalize on opportunities within and outside our existing operating segments. Thank you. Operator, can you please open the call for questions?

Operator: We will now open the call for questions. Star 11 on your telephone and wait for your name to be announced. To remove yourself, press 11 again. One moment, please. As I see no questions in the queue, I will pass it back to Ted Papapostolou for closing comments.

Ted Papapostolou: Thank you, everyone, and we look forward to our next update call.

Operator: This concludes our conference. Thank you for participating, and you may now disconnect.

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