ICAHN ENTERPRISES L.P. The following discussion is intended to assist you in understanding our present business and the results of operations together with our present financial condition. This section should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes contained in this Quarterly Report on Form 10-Q for the period endedSeptember 30, 2021 (this "Report"), as well as our Annual Report on Form 10-K for the year endedDecember 31, 2020 filed with theSecurities and Exchange Commission onFebruary 26, 2021 . Executive Overview IntroductionIcahn Enterprises L.P. ("Icahn Enterprises ") is a master limited partnership formed inDelaware onFebruary 17, 1987 .Icahn Enterprises Holdings L.P. ("Icahn Enterprises Holdings ") is a limited partnership formed inDelaware onFebruary 17, 1987 . References to "we," "our" or "us" herein include bothIcahn Enterprises andIcahn Enterprises Holdings and their subsidiaries, unless the context otherwise requires.Icahn Enterprises owns a 99% limited partner interest inIcahn Enterprises Holdings .Icahn Enterprises Holdings and its subsidiaries own substantially all of the assets and liabilities ofIcahn Enterprises and conduct substantially all of its operations. Therefore, the financial results ofIcahn Enterprises andIcahn Enterprises Holdings are substantially the same, with differences relating primarily to allocations to the general and limited partners. We do not discussIcahn Enterprises andIcahn Enterprises Holdings separately unless we believe it is necessary to an understanding of the businesses. We are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses: Investment, Energy, Automotive,Food Packaging , Metals, Real Estate, Home Fashion and Pharma. We also report the results of our Holding Company, which includes the results of certain subsidiaries ofIcahn Enterprises andIcahn Enterprises Holdings (unless otherwise noted), and investment activity and expenses associated with our Holding Company.
Significant Transactions and Developments
Tender Offer
OnOctober 27, 2021 ,IEP Utility Holdings LLC ("IEP Utility"), a wholly owned subsidiary ofIcahn Enterprises Holdings , commenced a cash offer (the "SWX Tender Offer") to acquire, subject to certain terms and conditions, all of the issued and outstanding shares of common stock of Southwest Gas Holdings, Inc. ("Southwest Gas ") not held by affiliates ofIcahn Enterprises Holdings at a price of$75.00 per share. Southwest Gas, through its wholly owned subsidiaries, is engaged in the business of purchasing, distributing, and transporting natural gas for customers in portions ofArizona ,Nevada , andCalifornia . Southwest Gas' shares of common stock are listed on theNew York Stock Exchange under the symbol "SWX." The SWX Tender Offer is scheduled to expire at 12:00 midnight, New York City Time, onDecember 27, 2021 , unless the offer is extended.
Pending Sale of
OnOctober 29, 2021 , we announced a definitive agreement to sell 100% of the equity interests inPSC Metals, LLC ("PSC Metals"), our wholly owned subsidiary through which we conduct our Metals segment, for total consideration of approximately$290 million (including indebtedness that will be repaid at closing and subject to customary working capital adjustments). The sale is expected to close in the fourth quarter of 2021, subject to receiving applicable regulatory approvals, and to the satisfaction of other customary closing conditions. 41 Table of Contents Debt Issuances InJanuary 2021 ,Icahn Enterprises andIcahn Enterprises Finance Corp. (together the "Issuers") issued$750 million in aggregate principal amount of 4.375% senior unsecured notes due 2029 (the "New 2029 Notes"). The proceeds from the New 2029 Notes were used to redeem$750 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses. InApril 2021 , the Issuers issued$455 million in aggregate principal amount of additional 5.250% senior unsecured notes due 2027. The proceeds from this issuance were used to redeem the remaining$455 million principal amount of 6.250% senior unsecured notes due 2022, and to pay accrued interest, related fees and expenses. Management Changes
OnApril 5, 2021 , we announced the hiring ofAris Kekedjian , who succeededKeith Cozza as President and Chief Executive Officer as ofMay 10, 2021 .Mr. Kekedjian also joined the board of directors of our general partner. In addition, onMay 17, 2021 , we announced the hiring ofDavid Willetts , who succeededSungHwan Cho as Chief Financial Officer as ofJune 7, 2021 .Mr. Willetts also joined the board of directors of our general partner.
Results of Operations
Consolidated Financial Results
Our operating businesses comprise consolidated subsidiaries which operate in
various industries and are managed on a decentralized basis. In addition to our
Investment segment's revenues from investment transactions, revenues for our
operating businesses primarily consist of net sales of various products,
services revenue, franchisor operations and leasing of real estate. Due to the
structure and nature of our business, we primarily discuss the results of
operations by individual reporting segment in order to better understand our
consolidated operating performance. Certain other financial information is
discussed on a consolidated basis following our segment discussion, including
other revenues and expenses included in continuing operations as well as our
results from discontinued operations. In addition to the summarized financial
results below, refer to Note 12, "Segment Reporting," to the condensed
consolidated financial statements for a reconciliation of each of our reporting
segment's results of continuing operations to our consolidated results.
Throughout 2020 and 2021, the COVID-19 pandemic, and actions taken by
governments and others in response thereto, has negatively impacted the global
economy, financial markets, and certain of the industries in which our
subsidiaries operate. Our consolidated results of operations and financial
condition have been impacted primarily by the volatility in the fair value of
investments held by our Investment segment and the Holding Company as well as
volatility in the global demand for refined products, especially gasoline and
diesel fuels, with respect to our Energy segment. The impact on our businesses
has also included the acceleration of selective planned store closures in our
Automotive segment and recording write-downs to inventories. The economic
conditions that persisted for much of 2020 have improved in 2021 as more
governments reduce restrictions and more businesses resume operations.
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The comparability of our summarized consolidated financial results presented
below is affected primarily by the performance of the Investment Funds (as
defined below), the results of operations of our Energy segment, impacted by the
demand and pricing for its products, and our Holding Company's realized and
unrealized gains and losses on certain equity investments. Refer to our
respective segment discussions and "Other Consolidated Results of Operations,"
below for further discussion.
Net Income (Loss)
Revenues Net Income (Loss) Attributable to Icahn Enterprises
Three Months Ended September 30, Three Months EndedSeptember 30 , Three Months Ended September
30,
2021 2020 2021 2020 2021 2020
(in millions)
Investment $ (131) $ (1,130) $ (187) $ (1,183) $ (84) $ (543)
Holding Company (27) (21) (63) (87) (63) (87)
Other Operating Segments:
Energy 1,883 943 94 (120) 54 (73)
Automotive 574 658 (55) (26) (55) (26)
Food Packaging 103 106 1 4 1 3
Metals 144 85 7 3 7 3
Real Estate 30 29 - 8 - 8
Home Fashion 51 53 (3) 1 (3) 1
Pharma 19 - (5) - (5) -
Other operating segments 2,804 1,874 39 (130) (1) (84)
Consolidated $ 2,646 $ 723 $ (211) $ (1,400) $ (148) $ (714)
Net Income (Loss)
Revenues Net Income (Loss) Attributable to Icahn Enterprises
Nine Months Ended September 30,
Nine Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020 2021 2020
(in millions)
Investment $ 1,001 $ (1,793) $ 820 $ (1,937) $ 375 $ (990)
Holding Company (6) (226) (376) (507) (376) (507)
Other Operating Segments:
Energy 5,212 2,794 13 (236) 10 (140)
Automotive 1,806 1,875 (139) (149) (139) (149)
Food Packaging 302 298 2 3 2 3
Metals 418 205 19 (10) 19 (10)
Real Estate 74 76 (5) (4) (5) (4)
Home Fashion 143 143 (9) (2) (9) (2)
Pharma 68 - 1 - 1 -
Other operating segments 8,023 5,391 (118) (398) (121) (302)
Consolidated $ 9,018 $ 3,372 $
326 $ (2,842) $ (122) $ (1,799)
Investment
We invest our proprietary capital through various private investment funds
("Investment Funds"). As of September 30, 2021 and December 31, 2020 , we had
investments with a fair market value of approximately $4.6 billion and $4.3
billion , respectively, in the Investment Funds. As of September 30, 2021 and
December 31, 2020 , the total fair market value of investments in the Investment
Funds made by Mr. Icahn and his affiliates (excluding us and Brett Icahn ) was
approximately $5.5 billion and $5.0 billion , respectively.
Our Investment segment's results of operations are reflected in net income
(loss) in the condensed consolidated statements of operations. Our Investment
segment's net income (loss) is driven by the amount of funds allocated to the
Investment Funds and the performance of the underlying investments in the
Investment Funds. Future funds allocated to the Investment Funds may increase or
decrease based on the contributions and redemptions by our Holding Company,
Mr. Icahn and his affiliates and by Brett Icahn , Mr. Icahn's son. Additionally,
historical performance results of the Investment Funds are not indicative of
future results as past market conditions, investment opportunities and
investment decisions may not occur in the future. Changes in general market
conditions coupled with changes in exposure to short and long positions have
significant impact on our Investment segment's results of operations and the
comparability of
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results of operations year over year and as such, future results of operations
will be impacted by our future exposures and future market conditions, which may
not be consistent with prior trends. Refer to the "Investment Segment Liquidity"
section of our "Liquidity and Capital Resources" discussion for additional
information regarding our Investment segment's exposure as of
September 30, 2021 .
For the three months ended
The following table sets forth the performance attribution for the Investment
Funds' returns.
Three Months Ended September 30 ,
Nine Months Ended
2021 2020 2021 2020
Long positions (1.6) % (3.0) % 27.9 % (20.4) %
Short positions (0.1) % (8.8) % (18.8) % 1.6 %
Other (0.1) % - % (0.3) % - %
(1.8) % (11.8) % 8.8 % (18.8) %
The following table presents net income (loss) for our Investment segment for
the three and nine months ended
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(in millions)
Long positions $ (168) $ (260) $ 2,738 $ (1,952)
Short positions (7) (923) (1,886) 10
Other (12) - (32) 5
$ (187) $ (1,183) $ 820 $ (1,937) Three Months Ended
For the three months endedSeptember 30, 2021 , the Investment Funds' negative performance was primarily driven by net losses in long positions. The negative performance of our Investment segment's long positions was driven primarily by losses from a consumer, cyclical sector investment of$223 million and an energy sector investment of$141 million . The aggregate performance of investments with net losses across various sectors accounted for an additional negative performance of our Investment segment's long positions. The negative performance of our Investment segment's long positions was offset in part by gains from a consumer, non-cyclical sector investment of$231 million and an energy sector investment of$177 million . The negative performance of our Investment segment's short positions was driven primarily by the net negative performance of various short equity positions aggregating$80 million offset in part by the net positive performance of short credit positions aggregating$73 million . For the three months endedSeptember 30, 2020 , the Investment Funds' negative performance was driven by net losses in short positions and, to a lesser extent, net losses in long positions. The negative performance of our Investment segment's short positions was driven primarily by the negative performance of broad market hedges of$677 million , losses from a consumer, non-cyclical sector investment of$156 million and the aggregate performance of various other short positions with net losses aggregating$161 million across various sectors. The negative performance of our Investment segment's short positions was partially offset by net gains from its short exposure to commercial mortgage-backed securities through credit default swap contracts of$71 million . The negative performance of our Investment Segment's long positions was driven by losses from an energy sector investment of$699 million , offset in part by gains from a consumer, cyclical sector investment of$257 million . Net losses in long positions were further offset in part by the aggregate performance of investments with net gains across various other sectors. 44
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Nine Months Ended
For the nine months endedSeptember 30, 2021 , the Investment Funds' positive performance was driven by net gains in long positions, offset in part by net losses in short positions. The positive performance of our Investment segment's long positions was driven primarily by gains from two energy sector investments aggregating approximately$1.6 billion and a consumer, non-cyclical sector investment of$436 million . The aggregate performance of investments with net gains across various sectors accounted for an additional positive performance of our Investment segment's long positions. The negative performance of our Investment segment's short positions was driven primarily by the negative performance of an energy sector investment of$757 million , broad market hedges of$669 million and a consumer, cyclical sector investment of$216 million . The aggregate performance of investments with net losses across various sectors accounted for an additional negative performance of our Investment segment's short positions. The negative performance of our Investment segment's short positions was offset in part by gains from a consumer, cyclical sector investment of$199 million . For the nine months endedSeptember 30, 2020 , the Investment Funds' negative performance was driven by net losses in long positions. The negative performance of our Investment segment's long positions was driven by losses from an energy sector investment of$758 million , a consumer, non-cyclical sector investment of$637 million and aggregate losses from two technology sector investments of$536 million . The aggregate performance of investments with net losses across various other sectors accounted for an additional negative performance of our Investment segment's long positions. The negative performance of our Investment segment's long positions was partially offset by net gains from a consumer, cyclical sector investment of$284 million . The performance of our Investment segment's short positions was driven by the positive performance of their short exposure to commercial mortgage-backed securities through credit default swap contracts of approximately$1.4 billion , offset in part primarily by the negative performance of broad market hedges of$910 million and the aggregate performance of various other short positions with net losses across various sectors.
Energy
Our Energy segment is primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing businesses. The petroleum business accounted for approximately 93% and 91% of our Energy segment's net sales for the nine months endedSeptember 30, 2021 and 2020, respectively. The results of operations of the petroleum business are primarily affected by the relationship between refined product prices and the prices for crude oil and other feedstocks that are processed and blended into petroleum products, such as gasoline, diesel fuel and jet fuel, that are produced by a refinery ("refined products"). The cost to acquire crude oil and other feedstocks and the price for which refined products are ultimately sold depend on factors beyond our Energy segment's control, including the supply of and demand for crude oil, as well as gasoline and other refined products. This supply and demand depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and the extent of government regulation. Because the petroleum business applies first-in, first-out accounting to value its inventory, crude oil price movements may impact gross margin in the short-term fluctuations in the market price of inventory. The effect of changes in crude oil prices on the petroleum business' results of operations is influenced by the rate at which the prices of refined products adjust to reflect these changes. The COVID-19 pandemic, and the actions taken by governments and others, has negatively impacted the energy industry. The COVID-19 pandemic has also resulted in significant business and operational disruptions, including business closures, liquidity strains, destruction of non-essential demand, as well as supply chain challenges, travel restrictions, stay-at home orders, and limitations on the availability of the workforce. As a result, the demand for gasoline and diesel in the regions that our Energy segment operates declined beginning in the first quarter of 2020. The declines were amplified in the first quarter of 2020 by market plays between the world's largest oil producers. The simultaneous shocks in oil supply and demand have resulted in a decline in the price of crude oil and lead to a significant decrease in the price of refined products sold by our Energy segment. However, beginning in late 2020 and into 2021, the U.S. market for refined products has improved and demand has increased as travel restrictions and stay-at-home orders have been eased. 45
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In addition to recent market conditions, there are long-term factors that may impact the demand for refined products. These factors include mandated renewable fuels standards, proposed climate change laws and regulations, and increased mileage standards for vehicles. The petroleum business is also subject to the Renewable Fuel Standard of theUnited States Environmental Protection Agency , which requires the operating companies in our Energy segment to either blend "renewable fuels" with their transportation fuels or purchase renewable identification numbers ("RINs"), to the extent available, in lieu of blending, or to seek other exemptions. The price of RINs has been extremely volatile and the future cost of RINs for the petroleum business is difficult to estimate. Additionally, the cost of RINs is dependent upon a variety of factors, which include the availability of RINs for purchase, the price at which RINs can be purchased, transportation fuel production levels, the mix of the petroleum business' petroleum products, as well as the fuel blending performed at its refineries and downstream terminals, all of which can vary significantly from period to period. Refer to Note 16, "Commitments and Contingencies," to the condensed consolidated financial statements for further discussion of RINs. InDecember 2020 , our Energy segment approved a renewable diesel project at one of its refineries, which would convert the refinery's hydrocracker to a renewable diesel unit ("RDU") capable of producing 100 million gallons of renewable diesel per year and approximately 170 to 180 million RINs annually. As a result of conversion, the crude oil capacity of the refinery will be reduced. Further, the conversion enables our Energy segment to capture additional benefits associated with the existing blenders' tax credit that expires at the end of 2022 and low carbon fuel standard programs in states such asCalifornia . Our Energy segment has additional plans to add pretreating capabilities for the RDU and construction of a similar facility at its other refinery. These collective renewable diesel efforts could reduce our Energy segment's Renewable Fuels Standard ("RFS") exposure. However, any actions taken by theSupreme Court , resulting administration efforts under the RFS, such as denial of existing or previous waiver applications, and market conditions could significantly impact the amount by which our Energy segment's renewable diesel business mitigates our costs to comply with the RFS, if at all. Three Months EndedSeptember 30 ,
Nine Months Ended
2021 2020 2021 2020
(in millions)
Net sales $ 1,883 $ 1,005 $ 5,129 $ 2,811
Cost of goods sold 1,686 1,040 5,022 2,934
Gross margin $ 197 $ (35) $ 107 $ (123)
Three Months
Net sales for our Energy segment increased by$878 million (87%) for the three months endedSeptember 30, 2021 as compared to the comparable prior year period due to an increase in our petroleum business' net sales, which increased$813 million , as well as an increase in our nitrogen fertilizer business' net sales, which increased$65 million over the comparable periods. The increase in the petroleum business' net sales was primarily due to an increase in sales of gasoline and distillates attributable to an increase in volumes and more favorable pricing conditions. Volumes were lower in the comparable prior year period due to the full planned turnaround at one of the refineries while another refinery experienced reduced utilization in response to demand reductions driven by the impacts of the COVID-19 pandemic. Our nitrogen fertilizer business' net sales increased primarily due to an increase in urea ammonium nitrate ("UAN") sales primarily due to favorable pricing conditions. Cost of goods sold for our Energy segment increased by$646 million (62%) for the three months endedSeptember 30, 2021 as compared to the comparable prior year period. The increase was primarily due to our petroleum business as a result of higher cost of consumed crude oil. The higher cost of consumed crude oil was due to an increase in volumes, as discussed above, as well as lower derivative performance of$17 million , offset in part by a$52 million decrease in the net cost of RINs. Gross margin for our Energy segment improved by$232 million for the three months endedSeptember 30, 2021 as compared to the comparable prior year period. Gross margin as a percentage of net sales was 10% and (3)% for the three months endedSeptember 30, 2021 and 2020, respectively. The improvement in the gross margin as a percentage of net sales was primarily attributable to the petroleum business, which was primarily due to higher crack spreads and a decrease in the net cost of RINs, offset in part by lower derivative performance. 46 Table of Contents
Nine Months Ended
Net sales for our Energy segment increased by approximately$2.3 billion (82%) for the nine months endedSeptember 30, 2021 as compared to the comparable prior year period due to an increase in our petroleum business' net sales, which increased approximately$2.2 billion , as well as an increase in our nitrogen fertilizer business' net sales, which increased$84 million over the comparable periods. The increase in the petroleum business' net sales was primarily due to an increase in sales of gasoline and distillates attributable to an increase in volumes and more favorable pricing conditions. Volumes were lower in the comparable prior year period due to the full planned turnaround at one of the refineries while another refinery experienced reduced utilization in response to demand reductions driven by the impacts of the COVID-19 pandemic. Our nitrogen fertilizer business' net sales increased primarily due to an increase in urea ammonium nitrate ("UAN") sales primarily due to favorable pricing conditions. Cost of goods sold for our Energy segment increased by approximately$2.1 billion (71%) for the nine months endedSeptember 30, 2021 as compared to the comparable prior year period. The increase was primarily due to our petroleum business as a result of higher cost of consumed crude oil. The higher cost of consumed crude oil was due to an increase in volumes, as discussed above, as well as a$264 million increase in the net cost of RINs and lower derivative performance of$116 million . Gross margin for our Energy segment improved by$230 million for the nine months endedSeptember 30, 2021 as compared to the comparable prior year period. Gross margin as a percentage of net sales was 2% and (4)% for the nine months endedSeptember 30, 2021 and 2020, respectively. The improvement in the gross margin as a percentage of net sales was primarily attributable to the petroleum business, which was primarily due to higher crack spreads, offset in part by an increase in the net cost of RINs and lower derivative performance.
Automotive
Our Automotive segment's results of operations are generally driven by the distribution and installation of automotive aftermarket parts and the demand for automotive service and maintenance, and is affected by the relative strength of automotive part replacement trends, among other factors. Our Automotive segment has been in the process of implementing a multi-year transformation plan, which includes the restructuring of its businesses. The transformation plan includes operating the automotive services and aftermarket parts businesses as separate businesses, streamliningIcahn Automotive's corporate and field support teams, facility closures, consolidations and conversions, inventory optimization actions, and the re-focusing of its automotive parts business on certain core markets. As part of this plan,Icahn Automotive entered into an agreement to sell certain inventory assets relating to its aftermarket parts business at 109 locations and a distribution center inCalifornia and certain other inventory and fixed assets inCalifornia . Aftermarket parts sales from these locations aggregated$12 million and$77 million during the three and nine months endedSeptember 30, 2021 . Costs to implement the transformation plan include restructuring charges, which are recorded when specific plans are approved, and which may be significant.
Our Automotive segment's priorities include:
? Positioning the service business to take advantage of opportunities in the
do-it-for-me market and vehicle fleets;
? Optimizing the value of the commercial parts distribution business in certain
high-volume core markets;
? Exiting the automotive parts distribution business in certain low volume,
non-core markets;
? Improving inventory management across
distribution network;
? Investment in customer experience initiatives and selective upgrades in
facilities;
? Investment in employees with focus on training and career development
investments; and
? Business process improvements, including investments in our supply chain and
information technology capabilities.
The following table presents our Automotive segment's operating revenue, cost of
revenue and gross margin. Our Automotive segment's results of operations also
include automotive services labor. Automotive services labor revenues are
included in other revenues from operations in our condensed consolidated
statements of operations, however, the sale
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of any installed parts or materials related to automotive services are included
in net sales. Therefore, we discuss the combined results of our automotive net
sales and automotive services labor revenues below.
Three Months Ended September 30 ,
Nine Months Ended
2021 2020 2021 2020
(in millions)
Net sales and other
revenues from operations $ 591 $ 660 $ 1,826 $ 1,882
Cost of goods sold and
other expenses from
operations 418 466 1,304 1,375
Gross margin $ 173 $ 194 $ 522 $ 507
Three Months Ended
Net sales and other revenues from operations for our Automotive segment for the three months endedSeptember 30, 2021 decreased by$69 million (10%) as compared to the comparable prior year period. The decrease was attributable to a decrease in aftermarket parts sales of$97 million (29%), offset in part by an increase in automotive services revenue of$28 million (9%). On an organic basis, aftermarket parts sales decreased$7 million over the comparable periods due to a decrease in retail sales of$4 million (22%) and a decrease in commercial sales of$3 million (2%). Store closures related to the transformation plan accounted for a$90 million decrease in aftermarket parts sales. The increase in automotive services revenues represents an increase on a primarily organic basis as sales have improved over the comparable prior year period. Cost of goods sold and other expenses from operations for the three months endedSeptember 30, 2021 decreased by$48 million (10%) as compared to the comparable prior year period. The decrease was primarily due to lower costs attributable to lower aftermarket parts sales which exceeded higher costs associated with higher services revenues. Gross margin on net sales and other revenue from operations for the three months endedSeptember 30, 2021 decreased by$21 million (11%) as compared to the comparable prior year period. Gross margin as a percentage of net sales and other revenue from operations was 29% and 29% for the three months endedSeptember 30, 2021 and 2020, respectively.
Nine Months Ended
Net sales and other revenues from operations for our Automotive segment for the nine months endedSeptember 30, 2021 decreased by$56 million (3%) as compared to the comparable prior year period. The decrease was attributable to a decrease in aftermarket parts sales of$167 million (17%), offset in part by an increase in automotive services revenue of$111 million (12%). On an organic basis, aftermarket parts sales decreased$4 million over the comparable periods due to a 4% decrease in retail sales. Store closures related to the transformation plan accounted for a$163 million decrease in aftermarket parts sales. The increase in automotive services revenues represents an increase on a primarily organic basis as sales have improved over the comparable prior year period. The COVID-19 pandemic, and the impacts of the actions taken by governments and others, have significantly contributed to a decline in revenues beginning inMarch 2020 . Cost of goods sold and other expenses from operations for the nine months endedSeptember 30, 2021 decreased by$71 million (5%) as compared to the comparable prior year period. The decrease was primarily due to lower costs attributable to lower aftermarket parts sales which exceeded higher costs associated with higher services revenues. Gross margin on net sales and other revenue from operations for the nine months endedSeptember 30, 2021 increased by$15 million (3%) as compared to the comparable prior year period. Gross margin as a percentage of net sales and other revenue from operations was 29% and 27% for the nine months endedSeptember 30, 2021 and 2020, respectively. Due to the COVID-19 pandemic, our Automotive segment accelerated planned store closures in 2020, shifting our Automotive segment's business from a majority attributable to aftermarket parts sales to a majority attributable to higher margin automotive services. 48 Table of ContentsFood Packaging
Our Food packaging segment's results of operations are primarily driven by the production and sale of cellulosic, fibrous and plastic casings for the processed meat and poultry industry and derives a majority of its total net sales from customers located outsidethe United States .
Three Months Ended
Net sales for the three months endedSeptember 30, 2021 decreased by$1 million (1%) as compared to the comparable prior year period due to an increase in price and product mix as well as the favorable effects of foreign exchange, offset in part by lower volumes. Cost of goods sold for the three months endedSeptember 30, 2021 increased by$1 million (1%) as compared to the comparable prior year period due to the effects of raw material price inflation, manufacturing variances and distribution costs. Gross margin as a percentage of net sales was 18% and 20% for the three months endedSeptember 30, 2021 and 2020, respectively.
Nine Months Ended
Net sales for the nine months endedSeptember 30, 2021 increased$4 million (1%) as compared to the comparable prior year period. The increase was due to an increase in price and product mix as well as the favorable effects of foreign exchange, offset in part by lower volumes. Cost of goods sold for the nine months endedSeptember 30, 2021 increased by$9 million (4%) as compared to the comparable prior year period due to the effects raw material price inflation, manufacturing variances and distribution costs. Gross margin as a percentage of net sales was 19% and 21% for the nine months endedSeptember 30, 2021 and
2020, respectively. Metals
The scrap metals business is highly cyclical and is substantially dependent upon the overall economic conditions inthe United States and other global markets. Ferrous and non-ferrous scrap has been historically vulnerable to significant declines in consumption and product pricing during prolonged periods of economic downturn or stagnation.
Three Months Ended
Net sales for the three months endedSeptember 30, 2021 increased by$61 million (73%) compared to the comparable prior year period primarily due to higher selling prices. Cost of goods sold for the three months endedSeptember 30, 2021 increased by$54 million (69%) compared to the comparable prior year period due to higher material costs. Gross margin as a percentage of net sales was 8% and 6% for the three months endedSeptember 30, 2021 and 2020, respectively, with the improvement primarily due to higher material margins as the prior year period was negatively impacted by the effects of the COVID-19 pandemic.
Nine Months Ended
Net sales for the nine months endedSeptember 30, 2021 increased by$214 million (105%) compared to the comparable prior year period primarily due to higher volumes and higher selling prices. Cost of goods sold for the nine months endedSeptember 30, 2021 increased by$182 million (90%) compared to the comparable prior year period due to higher volumes as well as higher material costs. Gross margin as a percentage of net sales was 8% and 1% for the nine months endedSeptember 30, 2021 and 2020, respectively, with the improvement primarily due to higher material margins as the prior year period was negatively impacted by the effects of the COVID-19 pandemic.
Real Estate
Our Real Estate segment consists primarily of investment properties, the development and sale of single-family homes, and the management of a country club. Sales of single-family homes are included in net sales in our consolidated statements of operations. Results from investment properties and country club operations are included in other revenues from operations in our consolidated statements of operations. Revenue from our real estate operations for each
of
the
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nine months ended
Home Fashion
Our Home Fashion segment is significantly influenced by the overall economic environment, including consumer spending, at the retail level, for home textile products.
Three Months Ended
Net sales for the three months endedSeptember 30, 2021 decreased by$2 million (4%) compared to the comparable prior year period primarily due to a decrease in facemask sales due to the reduced impact of the COVID-19 pandemic. Cost of goods sold for the three months endedSeptember 30, 2021 remained flat compared to the comparable prior year period due to higher material and freight costs offset by lower volumes. Gross margin as a percentage of net sales was 18% and 21% for the three months endedSeptember 30, 2021 and 2020, respectively. The decrease is due to higher material and freight costs.
Nine Months Ended
Net sales for the nine months endedSeptember 30, 2021 increased by$3 million (2%) compared to the comparable prior year period primarily due to the reduced impact of the COVID-19 pandemic on our Home Fashion segment's hospitality and department store businesses, offset in part by a decline resulting from exiting lower margin business. Cost of goods sold for the nine months endedSeptember 30, 2021 increased$6 million (5%) compared to the comparable prior year period due to higher material and freight costs. Gross margin as a percentage of net sales was 18% and 21% for the nine months endedSeptember 30, 2021 and 2020, respectively. The decrease is due to higher material and freight costs.
Pharma
Our Pharma segment derives revenues primarily from the sale of its products directly to customers, wholesalers and pharmacies. To a lesser extent, our Pharma segment derives revenues through supply, licensing and royalty arrangements. We began consolidating our Pharma segment in the fourth quarter of 2020. For the three months endedSeptember 30, 2021 , our Pharma segment had$17 million of net product revenue,$1 million of supply revenue and$1 million of royalty revenue. For the nine months endedSeptember 30, 2021 , our Pharma segment had$48 million of net product revenue,$17 million of supply revenue and$3 million of royalty revenue. For our Pharma segment's supply revenue,$13 million is attributable to the one-time sale of product to a single customer in the first quarter of 2021. Holding Company Our Holding Company's results of operations primarily reflect investment gains and losses from equity investments and the interest expense on its senior unsecured notes for each of the three and nine months endedSeptember 30, 2021 and 2020.
Other Consolidated Results of Operations
Selling, General and Administrative
Three Months Ended
Our consolidated selling, general and administrative during the three months endedSeptember 30, 2021 increased by$27 million (9%) as compared to the comparable prior year period primarily due to the addition of the results of our Pharma segment and from our Energy segment, primarily due to higher share-based compensation. 50 Table of Contents
Nine Months Ended
Our consolidated selling, general and administrative during the nine months endedSeptember 30, 2021 increased by$49 million (6%) as compared to the comparable prior year period primarily due to the addition of the results of our Pharma segment, our Energy segment, primarily due to higher share-based compensation as well as higher compensation costs for our Investment segment, offset in part by lower costs resulting from our Real Estate segment, which incurred additional costs in the second quarter of 2020 relating to the demolition of one of its properties.
Interest Expense
Three Months Ended
Our consolidated interest expense during the three months endedSeptember 30, 2021 decreased by$13 million (8%) as compared to the comparable prior year period. The decrease was primarily due to lower interest expense from our Energy segment and our Holding Company due to lower weighted average interest rates resulting from their respective debt refinancings.
Nine Months Ended
Our consolidated interest expense during the nine months endedSeptember 30, 2021 decreased by$6 million (1%) as compared to the comparable prior year period. The decrease was primarily due to lower interest expense for our Holding Company and Energy segment due to lower weighted average interest rates resulting from their respective debt refinancings.
Income Tax Expense
Certain of our subsidiaries are partnerships not subject to taxation in our condensed consolidated financial statements and certain other subsidiaries are corporations, or subsidiaries of corporations, subject to taxation in our condensed consolidated financial statements. Therefore, our consolidated effective tax rate generally differs from the statutory federal tax rate. Refer to Note 13, "Income Taxes," to the condensed consolidated financial statements for a discussion of income taxes.
Liquidity and Capital Resources
Holding Company Liquidity
We are a holding company. Our cash flow and our ability to meet our debt service obligations and make distributions with respect to depositary units depends on the cash flow resulting from divestitures, equity offerings and debt financings, interest income, returns on our interests in the Investment Funds and the payment of funds to us by our subsidiaries in the form of loans, dividends and distributions. We may pursue various means to raise cash from our subsidiaries. To date, such means include receipt of dividends and distributions from subsidiaries, obtaining loans or other financings based on the asset values of subsidiaries or selling debt or equity securities of subsidiaries through capital market transactions. To the degree any distributions and transfers are impaired or prohibited, our ability to make payments on our debt or distributions on our depositary units could be limited. The operating results of our subsidiaries may not be sufficient for them to make distributions to us. In addition, our subsidiaries are not obligated to make funds available to us and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements. As ofSeptember 30, 2021 , our Holding Company had cash and cash equivalents of approximately$1.3 billion and total debt of approximately$5.8 billion . As ofSeptember 30, 2021 , our Holding Company had investments in the Investment Funds with a total fair market value of approximately$4.6 billion . We may redeem our direct investment in the Investment Funds upon notice. See "Investment Segment Liquidity" below for additional information with respect to our Investment segment liquidity. See "Consolidated Cash Flows" below for additional information with respect to our Holding Company liquidity. 51
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Holding Company Borrowings and Availability
September 30, December 31,
2021 2020
(in millions)
6.250% senior unsecured notes due 2022 $ - $ 1,209
6.750% senior unsecured notes due 2024 499
499
4.750% senior unsecured notes due 2024 1,105
1,106
6.375% senior unsecured notes due 2025 748
748
6.250% senior unsecured notes due 2026 1,250
1,250
5.250% senior unsecured notes due 2027 1,461
999
4.375% senior unsecured notes due 2029 747
-
$ 5,810 $ 5,811
Holding Company debt consists of various issues of fixed-rate senior unsecured
notes issued by Icahn Enterprises and Icahn Enterprises Finance Corp. (together
the "Issuers") and guaranteed by Icahn Enterprises Holdings (the "Guarantor").
Interest on each tranche of senior unsecured notes is payable semi-annually.
In January 2021 , the Issuers issued $750 million in aggregate principal amount
of 4.375% senior unsecured notes due 2029 (the "New 2029 Notes"). The proceeds
from the New 2029 Notes were used to redeem $750 million principal amount of
6.250% senior unsecured notes due 2022, and to pay accrued interest, related
fees and expenses. Interest on the New 2029 Notes is payable semi-annually.
In April 2021 , the Issuers issued $455 million in aggregate principal amount of
additional 5.250% senior unsecured notes due 2027. The proceeds from this
issuance were used to redeem the remaining $455 million principal amount of
6.250% senior unsecured notes due 2022, and to pay accrued interest, related
fees and expenses.
Each of our senior unsecured notes and the related guarantees are the senior
unsecured obligations of the Issuers and rank equally with all of the Issuers'
and the Guarantor's existing and future senior unsecured indebtedness and senior
to all of the Issuers' and the Guarantor's existing and future subordinated
indebtedness. Each of our senior unsecured notes and the related guarantees are
effectively subordinated to the Issuers' and the Guarantor's existing and future
secured indebtedness to the extent of the collateral securing such
indebtedness. Each of our senior unsecured notes and the related guarantees are
also effectively subordinated to all indebtedness and other liabilities of the
Issuers' subsidiaries other than the Guarantor.
The indentures governing our senior unsecured notes described above restrict the
payment of cash distributions, the purchase of equity interests or the purchase,
redemption, defeasance or acquisition of debt subordinated to the senior
unsecured notes. The indentures also restrict the incurrence of debt or the
issuance of disqualified stock, as defined in the indentures, with certain
exceptions. In addition, the indentures require that on each quarterly
determination date, Icahn Enterprises and the guarantor of the notes (currently
only Icahn Enterprises Holdings ) maintain certain minimum financial ratios, as
defined therein. The indentures also restrict the creation of liens, mergers,
consolidations and sales of substantially all of our assets, and transactions
with affiliates. Additionally, each of the senior unsecured notes outstanding as
of September 30, 2021 , except for the 4.750% senior unsecured notes due 2024,
the 5.250% senior unsecured notes due 2027 and 4.375% senior unsecured notes due
2029, are subject to optional redemption premiums in the event we redeem any of
the notes prior to certain dates as described in the indentures.
As of September 30, 2021 and December 31, 2020 , we were in compliance with all
covenants, including maintaining certain minimum financial ratios, as defined in
the indentures. Additionally, as of September 30, 2021 , based on covenants in
the indentures governing our senior unsecured notes, we are not permitted to
incur additional indebtedness; however, we are permitted to issue new notes in
connection with debt refinancings of existing notes.
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At-The-Market Offerings
OnFebruary 26, 2021 ,Icahn Enterprises entered into a new Open Market Sale Agreement, pursuant to whichIcahn Enterprises was able to sell its depositary units, from time to time, for up to$400 million in aggregate sale proceeds, under its ongoing "at-the-market offering. OnAugust 6, 2021 , this agreement was terminated and replaced by a new Open Market Sale Agreement, pursuant to whichIcahn Enterprises may sell its depositary units, from time to time, for up to$400 million in aggregate sale proceeds. During the nine months endedSeptember 30, 2021 ,Icahn Enterprises sold 10,783,098 depositary units pursuant to this agreement, resulting in gross proceeds of$604 million . As ofSeptember 30, 2021 ,Icahn Enterprises may sell its depositary units for up to an additional$180 million in aggregate gross sale proceeds pursuant to its agreement entered into onAugust 6, 2021 . No assurance can be made that any or all amounts will be sold during the term of the agreement, and we have no obligation to sell additional depositary units under the Open Market Sale Agreement. Depending on market conditions, we may continue to sell depositary units under the Open Market Sale Agreement, and, if appropriate, enter into a new Open Market Sale Agreement to continue our "at-the-market" sales program once we have sold the full amount of our existing Open Market Sale Agreement. Our ability to access remaining capital under our "at-the-market" program may be limited by market conditions at the time of any future potential sale. While we were able to sell shares during the nine months endedSeptember 30, 2021 , there can be no assurance that any future capital will be available on acceptable terms or
at all under this program. LP Unit Distributions
During the nine months endedSeptember 30, 2021 ,Icahn Enterprises declared three quarterly distributions aggregating$6.00 per depositary unit in which each depositary unitholder had the option to make an election to receive either cash or additional depositary units. In connection with these distributions, aggregate cash distributions to all depositary unitholders that made a timely election to receive cash was$91 million during the nine months endedSeptember 30, 2021 . OnNovember 1, 2021 , the Board of Directors of the general partner ofIcahn Enterprises declared a quarterly distribution in the amount of$2.00 per depositary unit, which will be paid on or aboutDecember 22, 2021 to depositary unitholders of record at the close of business onNovember 16, 2021 . Depositary unitholders will have untilDecember 10, 2021 to make a timely election to receive either cash or additional depositary units. If a unitholder does not make a timely election, it will automatically be deemed to have elected to receive the distribution in additional depositary units. Depositary unitholders who elect to receive (or who are deemed to have elected to receive) additional depositary units will receive units valued at the volume weighted average trading price of the units during the five consecutive trading days endingDecember 17, 2021 .Icahn Enterprises will make a cash payment in lieu of issuing fractional depositary units to any unitholders electing to receive (or who are deemed to have elected to receive) depositary units. The declaration and payment of distributions is reviewed quarterly byIcahn Enterprises GP's board of directors based upon a review of our balance sheet and cash flow, our expected capital and liquidity requirements, the provisions of our partnership agreement and provisions in our financing arrangements governing distributions, and keeping in mind that limited partners subject toU.S. federal income tax have recognized income on our earnings even if they do not receive distributions that could be used to satisfy any resulting tax obligations. The payment of future distributions will be determined by the board of directors quarterly, based upon the factors described above and other factors that it deems relevant at the time that declaration of a distribution is considered. Payments of distributions are subject to certain restrictions, including certain restrictions on our subsidiaries which limit their ability to distribute dividends to us. There can be no assurance as to whether or in what amounts any future distributions might be paid.
Tender Offer
OnOctober 27, 2021 , IEP Utility, a wholly owned subsidiary ofIcahn Enterprises Holdings , commenced the SWX Tender Offer. We estimate that the maximum amount of funds required to complete the SWX Tender Offer would be up to approximately$4.2 billion .IEP Utility andIcahn Enterprises Holdings intend to obtain such funds from cash, cash equivalents, and from their ability to realize cash upon sale of liquid securities. 53 Table of Contents Pending Sale ofPSC Metals
OnOctober 29, 2021 , we announced a definitive agreement to sellPSC Metals for total consideration of approximately$290 million (including indebtedness that will be repaid at closing and subject to customary working capital adjustments). The sale is expected to close in the fourth quarter of 2021, subject to receiving applicable regulatory approvals, and to the satisfaction of other customary closing conditions.
Investment Segment Liquidity
In addition to investments by us and
Additionally, our Investment segment liquidity is driven by the investment activities and performance of the Investment Funds. As ofSeptember 30, 2021 , the Investment Funds' had a net short notional exposure of 11%. The Investment Funds' long exposure was 108% (107% long equity and 1% long credit) and its short exposure was 119% (98% short equity and 21% short credit). The notional exposure represents the ratio of the notional exposure of the Investment Funds' invested capital to the net asset value of the Investment Funds atSeptember 30, 2021 . Of the Investment Funds' 108% long exposure, 94% was comprised of the fair value of its long positions (with certain adjustments) and 14% was comprised of single name equity forward contracts and credit contracts. Of the Investment Funds' 119% short exposure, 48% was comprised of the fair value of its short positions and 71% was comprised of short broad market index swap derivative contracts and short credit default swap contracts. With respect to both our long positions that are not notionalized (94% long exposure) and our short positions that are not notionalized (48% short exposure), each 1% change in exposure as a result of purchases or sales (assuming no change in value) would have a 1% impact on our cash and cash equivalents (as a percentage of net asset value). Changes in exposure as a result of purchases and sales as well as adverse changes in market value would also have an effect on funds available to us pursuant to prime brokerage lines of credit. With respect to the notional value of our other short positions (71% short exposure), our liquidity would decrease by the balance sheet unrealized loss if we were to close the positions at quarter end prices. This would be offset by a release of restricted cash balances collateralizing these positions as well as an increase in funds available to us pursuant to certain prime brokerage lines of credit. If we were to increase our short exposure by adding to these short positions, we would be required to provide cash collateral equal to a small percentage of the initial notional value at counterparties that require cash as collateral and then post additional collateral equal to 100% of the mark to market on adverse changes in fair value. For our counterparties who do not require cash collateral, funds available from lines of credit would decrease.
Other Segment Liquidity
Segment Cash and Cash Equivalents
Segment cash and cash equivalents (excluding our Investment segment) consists of
the following:
September 30, December 31,
2021 2020
(in millions)
Energy $ 566 $ 667
Automotive 48 25
Food Packaging 10 16
Metals - 1
Real Estate 30 21
Home Fashion 4 2
Pharma 11 8
$ 669 $ 740
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Segment Borrowings and Availability
Segment debt consists of the following:
September 30, December 31,
2021 2020
(in millions)
Energy $ 1,676 $ 1,691
Automotive 16 368
Food Packaging 154 151
Metals 18 16
Real Estate 2 1
Home Fashion 36 21
$ 1,902 $ 2,248
Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for
information concerning terms, restrictions and covenants pertaining to our
subsidiaries' debt. As of September 30, 2021 , all of our subsidiaries were in
compliance with all debt covenants.
Our segments have additional borrowing availability under certain revolving credit facilities as summarized below:
September 30,
2021
(in millions)
Energy $ 406
Food Packaging 19
Metals 50
Home Fashion 8
$ 483
The above outstanding debt and borrowing availability with respect to each of our continuing operating segments reflects third-party obligations.
InJune 2021 , CVR Partners issued$550 million in aggregate principal amount of 6.125% senior secured notes due 2028. Proceeds from these notes were used to fund a partial redemption of its existing 9.25% senior secured notes due 2023. These senior secured notes issued by CVR Partners are guaranteed on a senior secured basis by all of CVR Partners' existing domestic subsidiaries, excludingCVR Nitrogen Finance Corporation . The indenture governing these notes contain certain covenants that restrict the ability of the issuers and their restricted subsidiaries from incurring additional debt or issuing certain disqualified equity, create liens on certain assets to secure debt, pay dividends/distributions or make other equity distributions, purchase or redeem capital stock/common units, make certain investments, transfer and sell assets, agree to certain restrictions on the ability of restricted subsidiaries to make distributions, loans, or other asset transfers to the issuers, consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets, engage in transactions with affiliates and designate restricted subsidiaries as unrestricted subsidiaries.
In
Subsidiary Dividends
In the second quarter of 2021, our Energy segment paid a special dividend, which was comprised of$241 million in cash as well as the common stock of an equity investment with a fair value of$251 million . Our portion of the dividend included$171 million in cash and the common stock of an equity investment with a fair value of$177 million . In 55
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addition, in the third quarter of 2021, our Energy segment had distributions to non-controlling interests of$11 million as a result of a distribution paid by CVR Partners to its common unit holders.
Subsidiary Stock Repurchase Program
OnOctober 23, 2019 , the Board of Directors of CVR Energy approved a stock repurchase program which would enable it to repurchase up to$300 million of its common stock from time to time through open market transactions, block trades, privately negotiated transactions or otherwise in accordance with applicable securities laws. The stock repurchase program has a duration of four years, which may be terminated by the Board of Directors of CVR Energy at any time. Repurchases, if any, including the timing, price and amount, may be made at the discretion of CVR Energy management and CVR Energy is not obligated to make any repurchases. CVR Energy did not repurchase any shares of its common stock as ofSeptember 30, 2021 . OnMay 6, 2020 , the Board of Directors of CVR Partners' general partner approved a unit repurchase program which would enable it to repurchase up to$10 million of its common units from time to time through open market transactions, block trades, privately negotiated transactions or otherwise in accordance with applicable securities laws. OnFebruary 22, 2021 , the Board of Directors of CVR Partners authorized an additional$10 million under the unit repurchase program. During 2021, CVR Partners repurchased common units on the open market at a cost of$1 million . As ofSeptember 30, 2021 , CVR Partners has$12 million remaining under its unit repurchase program.
Consolidated Cash Flows
Our Holding Company's cash flows are generally driven by payments and proceeds associated with our senior unsecured debt obligations and payments and proceeds associated with issuances of equity byIcahn Enterprises . Additionally, our Holding Company's cash flows include transactions with our Investment and other operating segments. Our Investment segment's cash flows are primarily driven by investment transactions, which are included in net cash flows from operating activities due to the nature of its business, as well as contributions to and distributions fromMr. Icahn and his affiliates (includingIcahn Enterprises andIcahn Enterprises Holdings ) andBrett Icahn , which are included in net cash flows from financing activities. Our other operating segments' cash flows are driven by the activities and performance of each business as well as transactions with our Holding Company, as discussed below.
The following table summarizes cash flow information for
Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020
Net Cash Provided By (Used In) Net Cash Provided By (Used In)
Operating Investing Financing Operating Investing Financing
Activities Activities Activities Activities Activities Activities
(in millions)
Holding Company $ (262) $ 161 $ 497 $ (266) $ (867) $ (919)
Investment 21 - 62 912 - 751
Other Operating Segments:
Energy 382 (204) (279) 62 (396) 361
Automotive (71) 45 48 19 41 (51)
Food Packaging (3) (9) 2 8 (10) (7)
Metals - (2) - (20) (1) 16
Real Estate 14 (5) 1 14 (3) (39)
Home Fashion (18) (1) 14 (5) (4) 9
Pharma 3 - - - - -
Other operating segments 307 (176) (214) 78 (373) 289
Total before eliminations 66 (15) 345 724 (1,240) 121
Eliminations - 235 (235) - 689 (689)
Consolidated $ 66 $ 220 $ 110 $ 724 $ (551) $ (568)
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Eliminations
Eliminations in the table above relate to certain of our Holding Company's transactions with our Investment and other operating segments. Our Holding Company's net (investments in) distributions from the Investments Funds, when applicable, are included in cash flows from investing activities for our Holding Company and cash flows from financing activities for our Investment segment. Similarly, our Holding Company's net distributions from (investments in) our other operating segments are included in cash flows from investing activities for our Holding Company and cash flows from financing activities for our other operating segments. Holding Company
Our Holding Company's cash flows from operating activities for each of the nine months endedSeptember 30, 2021 and 2020 were primarily attributable to our semi-annual interest payments on our senior unsecured notes. The decrease in interest payments over the comparable periods is primarily due to our recent debt transactions, which resulted in a lower weighted average interest rate over the comparable periods. Our Holding Company also had lower interest income and tax receipts during the nine months endedSeptember 30, 2021 compared to the comparable prior year period. Our Holding Company's cash flows from investing activities for the nine months endedSeptember 30, 2021 were primarily attributable to proceeds from the sale of equity investments and debt securities aggregating$396 million and dividends from our Energy segment of$171 million offset in part by a net investment in our Automotive segment of$405 million . Our Holding Company's cash flows from investing activities for the nine months endedSeptember 30, 2020 were primarily driven by an investment in the Investment Funds of$750 million (net of redemptions), our purchase of investments aggregating$177 million and net contributions and loans to our operating subsidiaries aggregating$63 million , including a net investment in our Automotive segment of$60 million . This was offset in part by net cash dividends and distributions from our Energy and Real Estate segments aggregating$124 million . Our Holding Company's cash flows from financing activities for the nine months endedSeptember 30, 2021 were due to proceeds from our "at-the-market" offering offset in part by aggregate payments on our quarterly distributions. Our Holding Company's cash flows from financing activities for the nine months endedSeptember 30, 2020 were primarily due to aggregate payments on our quarterly distributions and the effects of certain debt refinancing transactions, which included the repayment of certain senior unsecured notes inJanuary 2020 using proceeds from senior unsecured note issuances inDecember 2019 . This was offset in part by proceeds from our "at-the-market" offering.
Investment Segment
Our Investment segment's cash flows from operating activities for the comparable periods were attributable to its net investment transactions.
Our Investment segment's cash flows from financing activities for the nine months endedSeptember 30, 2021 were attributable toBrett Icahn's contribution to the Funds of$62 million . Our Investment segment's cash flows from financing activities for the nine months endedSeptember 30, 2020 were attributable to our investment in the Investment Funds of$750 million , net of redemptions, and$1 million fromMr. Icahn and his affiliates (excluding us).
Other Operating Segments
Our other operating segments' cash flows from operating activities included net cash flows from operating activities before changes in operating assets and liabilities of$137 million and$6 million for the nine months endedSeptember 30, 2021 and 2020, respectively, primarily due to the results of our Energy and Automotive segments for each period. Changes in working capital for each period was$170 million and$72 million , with the improvement primarily attributable to our Energy segment. Our Energy segment's working capital improved over the comparable periods primarily due to the increase in crude oil prices during 2021 and increases in its open RFS position.
Our other operating segments' cash flows from investing activities were
primarily due to the purchase of investments of zero in 2021 compared to
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primarily for our Energy segment's RDU project, and
Our other operating segments' cash flows from financing activities were primarily due to net debt transactions. In 2020, our Energy segment had net proceeds from senior debt transactions of$500 million . In addition, our other operating segments also had net contributions from our Holding Company aggregating$235 million for the nine months endedSeptember 30, 2021 compared to net distributions aggregating$61 million for the nine months endedSeptember 30, 2020 , as described above. For the nine months endedSeptember 30, 2021 and 2020, our Energy segment had distributions to non-controlling interests of$81 million and$36 million , respectively.
Consolidated Capital Expenditures
There have been no material changes to our planned capital expenditures as
compared to the estimated capital expenditures for 2021 reported in our Annual
Report on Form 10-K for the year ended
Critical Accounting Estimates
The critical accounting estimates used in the preparation of our condensed consolidated financial statements that we believe affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements presented in this Report are described in Management's Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year endedDecember 31, 2020 .
There have been no material changes to our critical accounting policies and
estimates during the nine months ended
Recently Issued Accounting Standards
Refer to Note 2, "Basis of Presentation and Summary of Significant Accounting Policies," to the condensed consolidated financial statements for a discussion of recent accounting pronouncements applicable to us.
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