{ "docId": "019dd923-622c-750b-8b9d-445c574836db", "docSlug": "f02e5ba83fc8", "documentTitle": "Icahn Enterprises L.P. (self) (IEP)", "authorId": "14_Icahn", "authorName": "Icahn Enterprises", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2015-08-01 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 6, "pageCount": 42, "prevPage": 5, "nextPage": 7, "slideType": "key_messages", "function": "summarize", "density": "overcrowded", "nDataPoints": 1, "notes": "The slide outlines the investment philosophy of Icahn Enterprises, emphasizing the use of activist pressure to force M&A activity among cash-rich, underperforming companies.", "elementsJson": [ "headline_text", "paragraph" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9d-445c574836db/6", "deckHref": "/decks/019dd923-622c-750b-8b9d-445c574836db", "deckJsonHref": "/decks/019dd923-622c-750b-8b9d-445c574836db.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9d-445c574836db#slide-6", "components": [ { "bbox": null, "kind": "callout", "text": "We believe that the best way to do this is to make underperforming management teams and boards accountable or to replace them.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-64cd-733b-aca7-fd6a5ba3baae", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.34 }, "kind": "paragraph", "text": "The Chairman of the Board of our general partner, Carl C. Icahn, has been an activist investor since 1980. Mr. Icahn believes that the current environment continues to be conducive to activism. Many major companies have substantial amounts of cash. We believe that they are hoarding cash, rather than spending it, because they do not believe investments in their business will translate to earnings.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0ed0a498-7a19-4386-8457-aa4090aaa881", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.18 }, "kind": "paragraph", "text": "Unlike the individual investor, we have the wherewithal to purchase companies that we feel we can operate more effectively than incumbent management. In addition, through our Investment segment, we are in a position to pursue our activist strategy by purchasing stock or debt positions and trying to promulgate change through a variety of activist approaches, ranging from speaking and negotiating with the board and CEO to proxy fights, tender offers and taking control. We work diligently to enhance value for all shareholders and we believe that the best way to do this is to make underperforming management teams and boards accountable or to replace them.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1cada343-b474-402b-8134-0ab489f43832", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.66 }, "kind": "paragraph", "text": "We believe that the activist catalyst adds value because, for companies with strong balance sheets, acquisition of their weaker industry rivals is often extremely compelling financially. We further believe that there are many transactions that make economic sense, even at a large premium over market. Acquirers can use their excess cash, that is earning a very low return, and/or borrow at the advantageous interest rates now available, to acquire a target company. In either case, an acquirer can add the target company's earnings and the income from synergies to the acquirer's bottom line, at a relatively low cost. But for these potential acquirers to act, the target company must be willing to at least entertain an offer. We believe that often the activist can step in and remove the obstacles that a target may seek to use to prevent an acquisition.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "281fdf3f-ecf7-458d-a95d-7e51da334a78", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.45 }, "kind": "paragraph", "text": "We believe that one of the best ways for many cash-rich companies to achieve increased earnings is to use their large amounts of excess cash, together with advantageous borrowing opportunities, to purchase other companies in their industries and take advantage of the meaningful synergies that could result. In our opinion, the CEOs and Boards of Directors of undervalued companies that would be acquisition targets are the major road blocks to this logical use of assets to increase value, because we believe those CEOs and boards are not willing to give up their power and perquisites, even if they have done a poor job in administering the companies they have been running. In addition, acquirers are often unwilling to undertake the arduous task of launching a hostile campaign. This is precisely the situation in which a strong activist catalyst is necessary.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3b75a1f8-3da8-405b-bf81-147ba519857f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.9, "x": 0.05, "y": 0.82 }, "kind": "paragraph", "text": "It is our belief that our strategy will continue to produce strong results into the future, and that belief is reflected in the action of the board of directors of our general partner, which announced in March 2014, a decision to modify our distribution policy to increase our annual distribution to $6.00 per depositary unit. We believe that the strong cash flow and asset coverage from our operating segments will allow us to maintain a strong balance sheet and ample liquidity.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "92a39c58-cbf1-4ab7-9ae1-cb0473089d4e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.91 }, "kind": "paragraph", "text": "In our view Icahn Enterprises is in a virtuous cycle. We believe that our depositary units will give us another powerful activist tool, allowing us both to use our depositary units as currency for tender offers and acquisitions (both hostile and friendly) where appropriate. All of these factors will, in our opinion, contribute to making our activism even more efficacious, which we expect to enhance our results and stock value.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bc9ca9f7-5605-49bc-8715-c65dd46789c4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.4, "x": 0.05, "y": 0.08 }, "kind": "title", "text": "The Icahn Strategy (continued)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7dca490d-4b05-49f2-83a2-5c86e949d920", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 6, "from": 5, "beatId": "fdff49c3-3711-4bea-a82c-f0f4bb25951b", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Problem & Complication", "beatSlug": "consultants-gambit-problem-complication", "evidence": "The document outlines the Icahn strategy and its ability to maximize shareholder value.", "position": 1, "confidence": 0.8, "parentBeatName": "Complication", "parentBeatSlug": "complication" } ], "loops": [ { "to": 6, "from": 5, "name": "Golden Circle", "slug": "11-golden-circle", "bestFor": "Visionary leadership, brand positioning, mission statements", "matchId": "f495a2dc-c337-45f2-a149-adb5e84af872", "evidence": "The document presents the Icahn strategy as a golden circle of why, how, and what.", "position": 1, "objective": "Why is the Icahn strategy effective?", "structure": "The Why (Belief) -> The How (Process) -> The What (Result)", "confidence": 0.7, "description": "Invert the typical pitch by starting with why you exist, rather than what you do" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }