Icahn Enterprises boasts $7.73 billion liquidity, holding company cash of $958 million in Q3

By Lisa Kerner

Charlotte, N.C., Nov. 4 - Icahn Enterprises LP (IEP) ended the third quarter with consolidated cash and cash equivalents of about $3.3 billion, according to chief financial officer SungHwan Cho.

In addition, the company had a $3.6 billion direct investment in the investment fund.

"We maintain ample liquidity at the holding company and at each of our operating subsidiaries to take advantage of attractive opportunities," said Cho during Icahn Enterprises' earnings conference call on Monday.

"We ended Q3 2013 with cash and cash equivalents, liquid assets and our investment in the funds totaling approximately $6.8 billion."

Total liquidity was about $7.73 billion.

Holding company cash at quarter-end was about $958 million.

"Our subsidiaries also have over $2.3 billion of cash and $900 million of undrawn credit facilities to enable them to take advantage of attractive opportunities," Cho said.

Automotive business segment Federal Mogul completed a $500 million common stock rights offering during the quarter to facilitate a refinancing of its debt.

"IEP repurchased an additional million of shares at $9.78 per share, bringing our ownership position to 80.7%," said Cho.

A portion of the proceeds were used to repay a portion of Federal Mogul's term debt.

Icahn Enterprises reported third-quarter revenues of $5.7 billion and net income of $472 million, or $4.10 per LP unit. This compares to $4.5 billion, $84 million and $0.75 per LP unit, respectively, for the same period last year.

For the nine months ended Sept. 30, revenues were $15.7 billion, and net income was $803 million, or $7.17 per LP unit, compared to revenues of $11.4 billion and net income of $390 million, or $3.69 per LP unit, for the year-ago period.

On Nov. 1, the board of directors of the general partner of Icahn Enterprises declared a quarterly distribution in the amount of $1.25 per depositary unit, to be paid on or about Jan. 13 to depositary unit holders of record at the close of business on Nov. 14.

When asked about the use of cash and possible dividend increases, director and president Dan Ninivaggi said the company targets $1 billion of liquidity at the holding company. Excess cash can be put into the fund or used for other opportunities.

"Frankly we see a lot of investment opportunities in the existing operating segments as well as through the hedge fund, so we evaluate that all the time," said Ninivaggi of the dividend.

And while there is not a stated payout ratio, "if it's appropriate to increase it, we'll increase it," Ninivaggi said.

The New York City-based holding company is primarily engaged in the investment management, automotive, metals, real estate and home fashion businesses.

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