Good morning and welcome to the Icahn Enterprises L.P. Second Quarter 2023 Earnings Call with Jesse Lynn, General Counsel; David Willetts, President and CEO; and Ted Papapostolou, Chief Financial Officer. I would now like to hand the conference over to Jesse Lynn, who will read their opening statement.

Thank you, operator. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for forward-looking statements we make in this presentation, including statements regarding our future performance and plans for our businesses and potential acquisitions. Forward-looking statements may be identified by words such as expects, anticipates, intends, plans, believes, seeks, estimates, will or words of similar meaning and include but are not limited to statements about the expected future business and financial performance of Icahn Enterprises L.P. and its subsidiaries. Actual events, results, and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties, and other factors that are discussed in our filings with the Securities and Exchange Commission, including economic, competitive, legal, and other factors. Accordingly, there is no assurance that our expectations will be realized. We assume no obligation to update or revise any forward-looking statement, should circumstances change except as otherwise required by law. This presentation also includes certain non-GAAP financial measures. A reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the back of this presentation. I'll now turn it over to David Willetts, our Chief Executive Officer.

Thank you, Jesse. Good morning and welcome to the second quarter 2023 Icahn Enterprises earnings conference call. Joining me on today's call is Ted Papapostolou, our Chief Financial Officer. I'll provide a brief overview of the second quarter results and then Ted and I will be available for questions. All net income and EBITDA amounts we'll discuss are attributable to Icahn Enterprises, unless we otherwise specify. For Q2 2023, we had a net loss of $269 million and an adjusted EBITDA of $34 million, compared to a net loss of $128 million and an adjusted EBITDA of $126 million for Q2 2022. The loss was attributable to the performance of the investment segment and additional losses related to the bankruptcy of Auto Plus, which is nearing completion. On a positive note, we see continued EBITDA improvements in our automotive segment and Food Packaging segments. Our indicative net asset value as of June quarter end decreased to $5 billion as compared to $5.6 billion at the end of December 31, 2022. Indicative net asset value includes, among other things, changes in the fair value of certain subsidiaries, which are not included in our GAAP earnings reported above. For Q2 2023, our investment funds had a negative return of $215 million, or 5.4%. We are encouraged by the results to date in July, which served to underscore the volatility inherent in the market. CVR Energy posted solid results for the 2023 second quarter, though commodity pricing led to moderate declines versus prior quarter and prior year quarter. Given the company's cash position, the CVR Energy board declared a $0.50 regular dividend and a special $1 dividend for the quarter. CVR Partners achieved solid results for the 2023 second quarter, led by strong production offset by lower fertilizer pricing during the quarter. Our automotive segment posted strong year-over-year performance on an income and adjusted EBITDA. Automotive Services continues to show progress on its improvement plan, and its results are fully in line with our expectations. After consideration, the IEP board declared a $1 quarterly distribution payable in cash for additional units. With that, let me turn it over to Ted for a detailed discussion of all of our segments.

Thank you, David. I will begin by reviewing our consolidated results and then highlight the performance of our operating segments and comment on the strength of our balance sheet. For Q2 '23, we had a net loss of $269 million, which was a decline of $141 million from the prior year quarter. Q2 '23 includes a one-time $116 million loss related to the loan receivable from Auto Plus in connection with the bankruptcy, which will be included in our holding company segment. I will now provide more detail regarding the performance of our individual segments. The investment funds had a negative return of 5.4% for the quarter, which was driven primarily by the negative performance of a broad market hedge and the negative performance of two single-name long positions. For the quarter, long and other positions had a net negative performance attribution of 2.6% and short positions had a negative performance attribution of 2.8%. The investment funds had a net short notional exposure of 18% at the end of the quarter compared to a net short notional exposure of 47% at year end. Our investment in the funds was approximately $3.8 billion as of quarter end and now to our Energy segments. In Q2 '23, our Energy segment reported net sales of $2.2 billion compared to $3.1 billion in the prior year quarter. Adjusted EBITDA was $173 million for Q2 '23 compared to $273 million in Q2 '22. CVI declared a $0.50 per share cash dividend and a $1 per share special dividend. Q2 '23 refining margin per throughput barrel was $18.21 compared to $26.10 in the prior year quarter. This decrease was primarily due to declining crack spreads. The cost of rents continued to have a negative impact on our refining business with $90 million of related expense for the quarter. Q2 '23 average realized gate prices for UAN decreased by 43% to $316 per ton and ammonia decreased by 40% to $707 per ton when compared to the prior year quarter. And now to our Automotive segment; Q2 '23 adjusted EBITDA was $32 million, a $19 million improvement as compared to Q2 '22. Q2 '23 net sales and other revenues for the auto segment were $425 million, a decrease of $196 million from the prior year quarter. The decrease in revenue is primarily due to the deconsolidation of Auto Plus, which occurred in Q1 '23. Automotive services revenues were down $1 million and auto parts revenues were down $195 million as compared to the prior year quarter. During the quarter, a wholly owned subsidiary of IEP within the auto segment acquired $10 million of assets, mainly comprised of aftermarket parts inventory from the Auto Plus auction. This inventory will be managed and sold by the Icahn automotive team. And now to our Real Estate segment; Q2 '23 net sales and other revenues increased by $3 million compared to the prior year quarter. Adjusted EBITDA was $5 million for Q2 '23 compared to $4 million for Q2 '22. The main drivers of the increase in EBITDA were due to the performance of the country club, which experienced membership growth, and our resort in Aruba had higher occupancy. During the quarter, a triggering event for potential impairment occurred at one of our properties. We assess the carrying value of this long-lived asset for recoverability and concluded the asset was not impaired. The management team is highly focused on achieving its long-term occupancy goals. And now to our Other segments; Q2 '23 net sales and other revenues for all other operating segments were relatively flat compared to the prior year quarter. Adjusted EBITDA was $27 million for Q2 '23 compared to $18 million for Q2 '22. This case's adjusted EBITDA improved by $6 million or 50% for Q2 '23 as compared to the prior year quarter. The company continues to improve manufacturing efficiencies and has reduced distribution costs compared to the prior year period. Home fashions' adjusted EBITDA was flat at $2 million as compared to the prior year quarter. They continue to be negatively impacted by products within its retail business, particularly in e-commerce. Management has done a good job of offsetting the decline in volume with cost-cutting initiatives. SG&A improved by $1 million as compared to the prior year's quarter. The Pharma segment's adjusted EBITDA for Q2 '23 improved by $3 million as compared to the prior year quarter, mainly due to Pancreaze's margin improvement and Qsymia's script growth. And now to our liquidity; we maintain liquidity at the holding company and each of our operating subsidiaries to take advantage of attractive opportunities. We ended the quarter with cash, cash equivalents, our investment in the investment funds, and revolver availability totaling approximately $6.6 billion. Our subsidiaries have approximately $914 million in cash and $360 million in joint credit facilities to enable them to take advantage of attractive opportunities. In summary, 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 up the call for questions?

Our first question comes from the line of Daniel Fannon with Jeffries. Please proceed.

Thanks. Good morning. I have a question regarding the dividend, specifically the decision to set it at $1 instead of $2. I’m interested in understanding the rationale behind this choice and how the cash flows from the underlying businesses will support it. Could you discuss the obligations concerning both debt and the dividend, as well as where you foresee generating cash flow to maintain the current dividend as mentioned today?

Good morning, Dan. Thanks for that. I think you've asked several questions there. So let me unpack that. As we've always done historically, we look at a number of different factors, right? Obviously, business performance, economic macros, obligations under the indentures, cash flows from the underlying companies. We look at the entire situation. Obviously, the world has changed at least for us given a number of the news articles that were in the first quarter, second quarter, and so we've taken all of that and with the board have looked at and determined that for this quarter, it made sense to adjust the dividend to a $1 distribution per unit, right? As we look forward, as we do every quarter, we take those same factors and we reassess what the dividend or distribution should be. Now, to your specific questions with regards to sources, there are several different sources, but, ultimately, what you take a look at is this is a lumpy, long-term business, right? We have large wins from time to time and we have volatility in the market. We are not a company that necessarily has steady, predictable cash flow coming in and out every quarter. So, given that unpredictability and lumpiness, we take a look at all the factors I mentioned to determine how we actually set a dividend or distribution. When it comes to sources, obviously, we have sizable amounts of cash on hand today. We have a large number of securities in our hedge funds, and we have new operating companies, all of which can be sources of profit or sources of capital to return to shareholders or unit holders as we look forward; anything else to add to it?

You're spot on, Dave.

So just to follow-up on that, is that implied that we should see more variability in the dividends on a quarterly or annual basis than we have seen historically?

I wouldn't read into it one way or the other, right. I think, when you take a look at a quarterly reevaluation every quarter, we have had the benefit in over the past number of years of having a fairly predictable, constant distribution. That said, I think we've always cautioned that we reevaluate that quarterly, and it's subject to change. There are no guarantees, but we have certainly served to provide a very healthy return to our unit holders over time with very attractive dividend yields and even when you take a look at the dividend yield, that would be implied based on share prices and per unit, it remains a healthy and attractive dividend yield. So I can't predict the future, but I think take everything I've said, as we're not changing our practice going forward, we're going to continue to do exactly what we've done, which is assessed things critically quarterly.

Understood. And then on the investment front, can you be more specific on what you have done in terms of the investment strategy that's different because it sounded very similar to what we've heard in the past, where the hedges are kind of broad and macro, and obviously the loans didn't contribute to positive returns either this quarter, but just so we understand going forward, how the investment strategy is potentially still utilizing hedging as ultimately, if it's really that different than what you've been doing on a long return basis?

I appreciate the question because it's an important one. Our perspective on activism remains unchanged. We currently have around eight to ten companies where we hold some level of board representation, and these companies are at various stages of development. In the second quarter, we experienced a mix of events affecting multiple positions. We saw reductions in many of those positions. Looking at the actual plans and management capabilities, we weren’t very encouraged by our holdings. We adjust our positions periodically, but I am proud of many of our long positions. Each one of them shows a clear progression over time, even though turnarounds can be challenging. We are comfortable with our long positions and continue to execute our strategy. Changes are more apparent in our short positions, not in strategy but in our philosophy regarding risk balance between long and short positions. We recognized that our previous stance was overly bearish and needed adjustment. To provide some numbers, if you look at the filings from our quarterly update, you’ll see that the overall size of our short position has changed significantly since December. Last year, it was a net negative 47%, which improved to negative 38% at the end of the first quarter, and further down to negative 18% by the end of the second quarter. This reduction in short positions is largely due to changes in long position performance but primarily driven by shorts. Our strategy with long positions remains consistent, while the approach to shorting continues to make sense, yet requires better balance. We are regularly reviewing the shorts and reassessing what positions are appropriate, both macro-wise and across different sectors. Additionally, I want to mention our operating companies, as they are also undergoing improvements. We maintain strong belief in CVI, and companies like Pep Boys and Viskase are generating increasing cash flow. Our strategy for our owned companies focuses on enhancing performance, which is reflected in various metrics—some show more cash flow, while others show increased income. Apologies for the lengthy response, but the question warranted a comprehensive answer.

Understood. And then just to clarify on the shorts, is it more of the market or broader hedges have come down and the shorts are more reflective of offsetting longs to be more hedged within the context of the investment portfolio directly?

Both are true, right? The broad market hedges have come down materially. We still have a level of them because we think it makes sense because not everything is hedgeable on a name-by-name basis. But we have very specific name-by-name hedges, resector hedges to attempt to offset any risk that we see with the specific loans in that sector or that specific long itself.

Understood. Okay. Thank you.

And it comes from the line of Bruce Monrad with Northeast Investors Trust. Please proceed.

Hi guys, can you hear me okay?

We can. Good morning, Bruce.

Good morning, I have a question about food packaging. The numbers from this case are impressive. Is the production aspect driving this success, or is it more related to revenue and pricing? What factors are contributing to these results?

The answer is yes. What I'd say is Tim and the team, I think, have done a very, very good job on multiple levers. Not every initiative is where we would want it to be. But I think when you take a look at how that team has skillfully managed to offset headwinds or surprises, you can basically see that performance is up, right? And the bumper sticker is, they have been very good at thoughtfully looking at their gross margin percentages and increasingly and that's not just price. That's also working with the customers to make sure they're selling the right SKUs or the right items, jettisoning low-value to the customer, negative or low-value to Viskase products. So gross margin management has been obviously a very, very strong performance factor. The plants, we have a new team on the plants. This isn't as of today, but it's over the course of this year, and they're getting their arms around our production issues. I think we have a very coherent, clear plan to continue to get yields and rates efficiencies where they need to be. They're not entirely where I think Tim wants them to be, but they're making steady and measured progress on a series of fairly complex process and technical issues. When you take a look at volume, generally speaking, there are puts and takes depending on which region you look at or which substrate you look at. But the team has done very well at balancing. I think the entire book of business and running it like a professional operation. I'm also pleased with the cash flow. They continue to generate cash flow, work through inventory and work to pay down the liabilities. So I think broadly speaking, the team has done a fantastic job.

Well, that's good. That's great. And these are obviously your top two toughest comparisons of the year. So this is great now. On the November call, you talked about a cocktail when things were good. I'll tell you that I'll be having a cocktail tonight and if you want to hop on a plane and come on up and join me with. Thank you.

Very good. Thanks, Bruce.

And it comes from the line of Andrew Berg with Post Advisory Group. Please proceed.

Thanks. And IF I can follow up a little bit on Dan's questions to start, excuse me, with respect to the hedges, and I guess we'll see it in the queue later, is there any reason to believe you guys would have materially changed the short view with respect to the commercial real estate or is it safe to assume you guys still maintain that negative position, negative view?

You're referring to the CMBX position?

Correct.

Yes. We obviously still have a CMBX position. If you know anything about CMBX, it is a very intricate series of securities, and they don't move in a traditional fashion. So what I would say is, yes, we're still in it. Obviously, there's good news and there's bad news. It's very specific to the particular tranche of CMBX we're in and several anchor malls within each one. Every day is bringing grim news for some malls across the country, whereas others are able to refinance and continue on with a very happy position. So it's a very active position that we monitor and manage, but it's all contingent upon the health of the underlying malls and their ability to refinance.

Okay. With respect to the dividend, given that you get dividends coming up out of CVI, you get dividends coming up out of some of the other subsidiaries, it would strike me that the actual cash amount of dividends that you guys would pay on an annual basis is probably somewhere less than $100 million now. Safe to assume Carl has not changed his view on taking his dividends in stock versus cash? And if that's correct, then the right way to think about it is maybe net $100 million or so of cash dividends going out the door versus your liquidity, which I think you said was $1.5 million of cash at the holding company, almost $1.6 million at the end of the quarter. Is that the right way...

Roughly $1.5 billion. I guess two answers to that question. I think the first answer is until all the shareholders elect, we really never know who is taking what in cash and who's taking what in securities. So the history would suggest some of the numbers that you've quoted. When we take a look at going forward, I think from this quarter, Carl has indicated, although he hasn't made a final determination that he is likely to take some mix of cash and securities. But his final election hasn't been determined, right? And obviously, beyond this quarter, there's no communication as to what his indications are, right? And historically, from time to time, Carl has taken distributions. So this is also in line, I think, with past practice.

Okay. And then from an operational basis segments with respect to automotive, on the services side, revenues were basically flat. Are you able to address what the EBITDA was coming out of the services business and how that may have moved in the quarter?

Ted, we don't disclose that specifically.

We don't disclose that. Currently, the automotive segment is significantly impacted because Auto Plus was deconsolidated during Q1. Therefore, Q2 is likely the first time you will see that the majority of it comes from the service business.

Let me specifically address your question. Here's how I view the services business. It has undergone a few changes, and while this might be a bit lengthy, the context is important. Looking back at 2020, 2021, and early 2022, we saw a decrease in store count as underperforming stores were closed and the footprint was reconfigured. So, while a drop in revenue might seem concerning, what we've observed is that revenue for services has only slightly decreased this quarter. In fact, pricing and margin management have significantly improved and have been key drivers of our year-to-date performance. Although we experienced a slight negative in volume, we're encouraged to see a 2% to 3% increase on a same-store basis as of late June and July. Revenue-wise, I'm actually quite satisfied with Pep Boys as a service company. Looking ahead to the next several quarters, they began exploring new store openings in late 2022. I understand the CEO is currently in Indianapolis celebrating the opening of two locations there, and they've been on a bit of a promotional tour. I believe some volume challenges will improve with the new store openings, and I've emphasized the need for more of them, even though the company wasn't in a place to fully commit to that before. The CEO has also reviewed store hours and refined marketing strategies, which gives us optimism regarding same-store sales volume potential. Regarding EBITDA, it was up in the first quarter compared to last year and flat in the second quarter, which aligns with our plan. The team has been focused on executing a variety of strategies, and we're pleased with what they've accomplished in cash generation. Generating cash was our top priority, and the year-over-year difference is significant. I'm less concerned about major EBITDA in the first half than I was about cash generation, which has been strong and should continue. As I look at the third and fourth quarters, I expect to provide more positive updates regarding EBITDA growth. In summary, EBITDA has been flat to slightly increased, depending on whether you're considering Q1 or Q2, while cash generation has improved significantly. Although revenue is slightly down, this doesn't reflect the impact of new store openings and takes into account the closure of several stores. I hope this helps clarify things.

Yes. No, that definitely helps. And it's nice to hear that you guys are making some progress there, especially from the cash generation side, and we look forward to hopefully seeing that EBITDA growth in the next couple of quarters? That's all I had. I appreciate all the color today guys.

Thanks, Andrew.

Thank you. And with that, I will end the Q&A queue. I'll pass it back to David Willetts for final comments.

All right. We appreciate everyone's time today. Thank you for dialing in or joining us on the webcast. We look forward to talking to you in roughly another three months for quarter three results. Everyone, have a good day. Take care.

Thank you, everyone, for participating in today's conference. This does conclude the program and you may now disconnect.