Value Investing

Carl Icahn’s Icahn Enterprises Investor Presentation [Slides]

Carl Icahn’s Icahn Enterprises investor presentation slides

Icahn Enterprises: Investment Highlights

Mr. Icahn believes that the current environment continues to be conducive to activism

  • Several factors are responsible for this:
  1. low interest rates, which make acquisitions much less costly and therefore much more attractive,
  2. abundance of cash rich companies that would benefit from making synergistic acquisitions. and
  3. the current awareness by many institutional investors that the prevalence of mediocre top management and ncn-caring boards at many of America’s companies must be dealt with if we are ever going to end high unemployment and be able to compete in world markets
  • But an activist catalyst is often needed to make an acquisition happen
  • We, at Icahn Enterprises, have spent yews engaging in the activist model and believe it is the catalyst needed to drive highly accretive M&A and consolidation activity
  • As a corollary, low interest rates will greatly increase the ability of the companies IEP controls to make judicious, friendly or net so friendly, acquisitions using our activist expertise

Proven track record of delivering superior returns

  • Icahn Enterprises total stock return of 1,485%11l since January 1, 2000
    • S&P 500. Dow Jones Industrial and Russell 2000 Indices returns of approximately 90%. 123% and 195% respectively over the same period
  • Icahn Investment Funds performance since inception in November 2004
    • Total return of approximately 245%t2) and compounded average annual return of approximately 1390)
    • Returns of 33.3%, 15.2%, 34.5%, 20.2%(), 30.8%, (7.4%) and 4.3% in 2009, 2010, 2011, 2012, 2013, 2014 and 20154/ respectively

Recent Financial Results

  • Adjusted Net Income attributable to Icahn enterprises of 5162 millionts) for the three months ended March 31, 2015
  • Indicative Net Asset Value of approximately 58.3 billion as of March 31, 2015
  • Adjusted EBITDA attributable to Icahn Enterprises of approximately 512 billion for the last twelve months ended March 31, 2015

$6.00 annual distribution (6.6% yield as of April 30, 2015)

The Icahn Strategy

Across all of our businesses. our success is based on a simple formula: we seek to find undervalued companies in the Graham & Dodd tradition. a methodology for valuing stocks that primarily looks for deeply depressed prices. However, while the typical Graham & Dodd value investor purchases undervalued securities and waits for results, we often become actively involved in the companies we target. That activity may involve a broad range of approaches, from influencing the management of a target to take slaps to improve sharehotler value. to acquiring a controlling interest or outright ownership of the target company in order to implement changes that we believe are required to improve its business, and than operating and expanding that business. This activism has brought about very strong returns over the years.

Today, we are a diversified holding company owning subsidiaries engaged in the following operating businesses: Investment. Automotive. Energy. Metals. Railcar, Gamng. Food Packaging. Real Estate and Home Fashion. Through our Investment segment, as of April 30. 2015. we have significant positions in various investments. which include Apple, eBay, Chesapeake Energy, Hertz Global, Hologic, Nuance Communications, Herbalife, Talisman Energy, Navistar International, Netflix, Gannett Co, Transocean, Mentor Graphics, Manitowoc and Seventy Seven Energy.

Several of our operating businesses started out as investment positions in debt or equity securities. held either directly by our investment segment or Mr. Icahn. Those positions ultimately resulted in control or complete ownership of the target company. In 2012. we accquired a controlling interest in CVR Energy. Inc. (“CVR”) which started out as a position in our Investment segment and is now an operating subsidiary that comprises our Energy segment. As of April 30. 2015. based on the closing sale price of CVR stock and distributions since we acquired control. we had a gain of approximately 52.1 billion on our purchase of CVR. The recent acquisition of CVR. like our other operating subsidiaries. reflects our opportunistic approach to value creation. through which returns may be obtained by. among other things. promoting change through minority positions at targeted companies in our Investment segment or by acquiring control of those target companies that we believe vie could run more profitably ourselves.

In 2000. we began to expand our business beyond our traditional real estate activities. and to fully embrace our activist strategy. On January 1. 2000. the closing sale price of our depositary units was 57.625 per depositary unit. On April 30. 2015. our depositary units closed at 591.55 per depositary unit representing an increase of approximately 1.480% since January 1. 2000 (including reinvestment of distributions into additional depositary unis and taking into account in-kind distributions of depositary units). Comparatively. the S&P 500. Dow .tines Industrial and Russell 2000 indices increased approximately 90%. 123% and 105%. respectively. over the same period (including reinvestment of distributions into those indices).

During the next several years. we see a favorable opportunity to follow an activist strategy that centers on the purchase of target stock and the subsequent removal of any barriers that might interfere with a friendly purchase offer from a strong buyer. Alternatively, in appropriate circumstances. we or our subsidiaries may become the buyer of target companies, adding them to our portfolio of operating subsidiaries. thereby expanding our operations through such opportunistic acquisitions. We believe that the companies that we target for our activist activities are undervalued for many reasons. often including inept management. Unfortunately for the individual investor, in particular, and the economy, in general, many poor management teams are often unaccountable and very difficult to remove.

Icahn Enterprises

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