UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q/A
Amendment No. 1

 

(Mark One)
x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2009

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from  to 

Commission File Number 1-9516

 

ICAHN ENTERPRISES L.P.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		13-3398766
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

767 Fifth Avenue, Suite 4700
New York, NY 10153

(Address of Principal Executive Offices) (Zip Code)

(212) 702-4300

(Registrant’s Telephone Number, Including Area Code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large Accelerated Filer o		Accelerated Filer x
Non-Accelerated Filer o		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 31, 2009, there were 74,775,597 depositary units and 13,127,179 preferred units outstanding.

TABLE OF CONTENTS

EXPLANATORY NOTE

On April 28, 2009, we received a comment letter from the Securities and Exchange Commission (“SEC”) regarding certain financial matters set forth in our 2008 Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed with the SEC on March 4, 2009. In response to the comment letter, we are amending Part I, Item 1, Financial Statements, in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009, filed with the SEC on May 6, 2009, to reformat our consolidated balance sheets, and statements of operations and cash flows for all periods presented. This amendment has no effect on our consolidated financial position, results of operations or cash flows.

Except as described above, no other changes have been made to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P.
  
INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			1
Consolidated Balance Sheets — March 31, 2009 (unaudited) and December 31, 2008			1
Consolidated Statements of Operations — Three Months Ended March 31, 2009 and 2008 (unaudited)			2
Consolidated Statement of Changes in Equity and Comprehensive Income — Three Months Ended March 31, 2009 (unaudited)			3
Consolidated Statements of Cash Flows — Three Months Ended March 31, 2009 and 2008 (unaudited)			5
Notes to Consolidated Financial Statements
1. Description of Business and Basis of Presentation			8
2. Operating Units			12
3. Discontinued Operations and Assets Held for Sale			13
4. Related Party Transactions			14
5. Investments and Related Matters			17
6. Fair Value Measurements			19
7. Financial Instruments			24
8. Inventories, Net			25
9. Goodwill and Intangible Assets			26
10. Property, Plant and Equipment, Net			26
11. Equity Attributable to Non-Controlling Interests			27
12. Debt			30
13. Compensation Arrangements			32
14. Pensions, Other Postemployment Benefits and Employee Benefit Plans			32
15. Preferred Limited Partner Units			32
16. Income Per LP Unit			33
17. Segment Reporting			36
18. Income Taxes			37
19. Commitments and Contingencies			39
20. Subsequent Events			39
Reports of Independent Registered Public Accounting Firms			40
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			42
Overview			43
Results of Operations			43
Liquidity and Capital Resources			55
Critical Accounting Policies and Estimates			60
Forward-Looking Statements			61
Item 3. Quantitative and Qualitative Disclosures About Market Risk			61
Item 4. Controls and Procedures			61
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			63
Item 1A. Risk Factors			63
Item 6. Exhibits			63
Signature			64

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
CONSOLIDATED BALANCE SHEETS
(In millions, except unit amounts)

		March 31, 2009				December 31, 2008
		(unaudited)
ASSETS
Cash and cash equivalents		$	2,080			$	2,612
Cash held at consolidated affiliated partnerships and restricted cash			2,838				3,947
Investments			3,911				4,515
Accounts receivable, net			1,096				1,057
Due from brokers			101				54
Inventories, net			1,052				1,093
Property, plant and equipment, net			2,780				2,878
Goodwill			1,053				1,086
Intangible assets			926				943
Other assets			601				630
Total Assets		$	16,438			$	18,815
LIABILITIES AND EQUITY
Accounts payable		$	546			$	679
Accrued expenses and other liabilities			2,526				2,805
Securities sold, not yet purchased, at fair value			991				2,273
Due to brokers			73				713
Postemployment benefit liability			1,285				1,302
Debt			4,566				4,571
Preferred limited partner units			131				130
Total liabilities			10,118				12,473
Commitments and contingencies (Note 19)
Equity:
Limited partners:
Depositary units: 92,400,000 authorized; issued 75,912,797 at March 31, 2009 and December 31, 2008; outstanding 74,775,597 at March 31, 2009 and December 31, 2008			2,498				2,582
General partner			(174	)			(172	)
Treasury units at cost			(12	)			(12	)
Equity attributable to Icahn Enterprises			2,312				2,398
Equity attributable to non-controlling interests			4,008				3,944
Total equity			6,320				6,342
Total Liabilities and Equity		$	16,438			$	18,815

 
 
See notes to consolidated financial statements.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit amounts)

		Three Months Ended March 31,
		2009				2008(1)
		(unaudited)
Revenues:
Net sales		$	1,407			$	1,082
Net gain (loss) from investment activities			251				(24	)
Interest and dividend income			81				67
Other income, net			27				5
			1,766				1,130
Expenses:
Cost of goods sold			1,259				944
Selling, general and administrative			261				140
Restructuring and impairment			57				9
Interest expense			72				58
			1,649				1,151
Income (loss) from continuing operations before income tax benefit (expense)			117				(21	)
Income tax benefit (expense)			10				(20	)
Income (loss) from continuing operations			127				(41	)
Income from discontinued operations			—				489
Net income			127				448
Less: net (income) loss attributable to non-controlling interests			(126	)			5
Net income attributable to Icahn Enterprises		$	1			$	453
Net income (loss) attributable to Icahn Enterprises from:
Continuing operations		$	1			$	(36	)
Discontinued operations			—				489
		$	1			$	453
Net income attributable to Icahn Enterprises allocable to:
Limited partners		$	1			$	485
General partner			—				(32	)
		$	1			$	453
Basic and diluted income (loss) per LP unit:
Income (loss) from continuing operations		$	0.01			$	(0.26	)
Income from discontinued operations			0.00				7.14
		$	0.01			$	6.88
Weighted average LP units outstanding			75				70
Cash distributions declared per LP unit		$	0.25			$	0.25

 
 
See notes to consolidated financial statements.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY AND COMPREHENSIVE INCOME
Three Months Ended March 31, 2009
(Unaudited) (In millions)

		Equity Attributable to Icahn Enterprises
		General Partner’s Equity (Deficit)				Limited Partners’ Equity – Depositary Units				Held in Treasury								Total Partners’ Equity				Non-Controlling Interests				Total Equity
										Amount				Units
Balance, December 31, 2008		$	(172	)		$	2,582			$	(12	)			1			$	2,398			$	3,944			$	6,342
Comprehensive income:
Net income			—				1				—				—				1				126				127
Net unrealized losses on available-for-sale securities			—				(5	)			—				—				(5	)			—				(5	)
Translation adjustments and other			(2	)			(62	)			—				—				(64	)			(21	)			(85	)
Comprehensive income			(2	)			(66	)			—				—				(68	)			105				37
Partnership distributions			—				(19	)			—				—				(19	)			—				(19	)
Investment Management distributions			—				—				—				—				—				(47	)			(47	)
Investment Management contributions			—				—																8				8
Change in subsidiary equity and other			—				1				—				—				1				(2	)			(1	)
Balance, March 31, 2009		$	(174	)		$	2,498			$	(12	)			1			$	2,312			$	4,008			$	6,320

Accumulated Other Comprehensive Loss was $842 and $752 at March 31, 2009 and December 31, 2008, respectively.

 
 
See notes to consolidated financial statements.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2009 and 2008
(In millions)

		Three Months Ended March 31,
		2009				2008(1)
		(unaudited)
Net income		$	127			$	448
Cash Flows from operating activities:
Income (loss) from continuing operations		$	127			$	(41	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Investment (gains) losses			(193	)			394
Purchases of securities			(304	)			(1,977	)
Proceeds from sales of securities			807				1,497
Purchases to cover securities sold, not yet purchased			(1,141	)			(116	)
Proceeds from securities sold, not yet purchased			129				263
Net premiums received on derivative contracts			8				28
Depreciation and amortization			96				39
Deferred income tax (expense) benefit			(17	)			1
Impairment loss on long-lived assets			15				—
Other, net			44				3
Changes in operating assets and liabilities			89				(297	)
Net cash used in continuing operations			(340	)			(206	)
Net cash used in discontinued operations			(1	)			(3	)
Net cash used in operating activities			(341	)			(209	)
Cash flows from investing activities:
Capital expenditures			(51	)			(34	)
Purchases of marketable equity and debt securities			—				(1	)
Proceeds from sales of marketable equity and debt securities			—				63
Net change in restricted cash relating to 1031 exchange transactions			—				(1,168	)
Net proceeds from the sale and disposition of long-lived assets			—				15
Acquisitions of businesses, net of cash acquired			—				795
Other			1				(2	)
Net cash used in investing activities from continuing operations			(50	)			(332	)
Net cash provided by investing activities from discontinued operations			—				1,199
Net cash (used in) provided by investing activities			(50	)			867

 
 
See notes to consolidated financial statements.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF CASH FLOWS – (continued)
Three Months Ended March 31, 2009 and 2008
(In millions)

		Three Months Ended March 31,
		2009				2008(1)
		(unaudited)
Cash flows from financing activities:
Investment Management:
Capital subscriptions received in advance			—				4
Capital distributions to non-controlling interests			(109	)			(220	)
Capital contributions by non-controlling interests			8				368
Partnership distributions			(19	)			(1	)
Proceeds from borrowings			2				—
Repayments of borrowings			(9	)			(8	)
Other			(9	)			6
Net cash (used in) provided by financing activities from continuing operations			(136	)			149
Net cash used in financing activities from discontinued operations			—				(255	)
Net cash used in financing activities			(136	)			(106	)
Effect of exchange rate changes on cash			(5	)			5
Net (decrease) increase in cash and cash equivalents			(532	)			557
Net increase in cash of assets held for sale			—				69
Cash and cash equivalents, beginning of period			2,612				2,113
Cash and cash equivalents, end of period		$	2,080			$	2,739
Supplemental information:
Cash payments for interest		$	87			$	53
Net cash (refunds) payments for income taxes		$	(15	)		$	9
Net unrealized losses on securities available for sale		$	(5	)		$	(8	)
Redemptions payable to non-controlling interests		$	107			$	1

 
 
See notes to consolidated financial statements.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

1. Description of Business and Basis of Presentation

General

Icahn Enterprises L.P. (“Icahn Enterprises” or the “Company”) is a master limited partnership formed in Delaware on February 17, 1987. We own a 99% limited partner interest in Icahn Enterprises Holdings L.P. (“Icahn Enterprises Holdings”). Icahn Enterprises Holdings and its subsidiaries own substantially all of our assets and liabilities and conduct substantially all of our operations. Icahn Enterprises G.P. Inc. (“Icahn Enterprises GP”), our sole general partner, which is owned and controlled by Mr. Carl C. Icahn, owns a 1% general partner interest in both us and Icahn Enterprises Holdings, representing an aggregate 1.99% general partner interest in us and Icahn Enterprises Holdings. As of March 31, 2009, affiliates of Mr. Icahn owned 68,740,822 of our depositary units and 11,360,173 of our preferred units, which represented approximately 91.9% and 86.5% of our outstanding depositary units and preferred units, respectively.

We are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses: Investment Management, Automotive, Metals, Real Estate and Home Fashion. We also report the results of our Holding Company, which includes the unconsolidated results of Icahn Enterprises and Icahn Enterprises Holdings, and investment activity and expenses associated with the Holding Company. Further information regarding our continuing reportable segments is contained in Note 2, “Operating Units,” and Note 17, “Segment Reporting.”

The accompanying consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (“fiscal 2008”). The financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) related to interim financial statements. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are necessary to present fairly the results for the interim periods. All such adjustments are of a normal and recurring nature. Certain prior period amounts have been reclassified in order to conform to the current period presentation.

In accordance with United States generally accepted accounting principles (“U.S. GAAP”), assets transferred between entities under common control are accounted for at historical cost similar to a pooling of interests, and the financial statements of previously separate companies for all periods under common control prior to the acquisition are restated on a consolidated basis.

The consolidated financial statements include the accounts of (i) Icahn Enterprises, (ii) the wholly and majority owned subsidiaries of Icahn Enterprises in which control can be exercised and (iii) entities in which Icahn Enterprises has a controlling, general partner interest or in which it is the primary beneficiary of a variable interest entity in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 46R, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 (“FIN 46R”). Icahn Enterprises is considered to have control if it has a direct or indirect ability to make decisions about an entity’s activities through voting or similar rights. As a result, there are entities that are consolidated in our financial statements in which we only have a minority interest in the equity and income. All material intercompany accounts and transactions have been eliminated in consolidation.

We conduct and plan to continue to conduct our activities in such a manner as not to be deemed an investment company under the Investment Company Act of 1940 (the “ ‘40 Act”). Therefore, no more than 40% of our total assets will be invested in investment securities, as such term is defined in the ‘40 Act. In addition, we do not invest or intend to invest in securities as our primary business. We intend to structure our investments to continue to be taxed as a partnership rather than as a corporation under the applicable publicly traded partnership rules of the Internal Revenue Code, as amended (the “Code”).

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

1. Description of Business and Basis of Presentation  – (continued)

Because of the nature of our business, the results of operations for quarterly and other interim periods are not indicative of the results to be expected for the full year. Variations in the amount and timing of gains and losses on our investments can be significant. The results of our Real Estate and Home Fashion segments are seasonal. The results of our Automotive segment are moderately seasonal.

Change in Presentation

On April 28, 2009, we received a comment letter from the Securities and Exchange Commission (the “SEC”) regarding certain financial matters set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008. In response to the comment letter, we reformatted our consolidated balance sheets, and statements of operations and cash flows for all periods presented. This reformatting of our consolidated financial statements has no effect on our consolidated financial position, results of operations or cash flows.

Adoption of New Accounting Pronouncements

SFAS No. 160.  In December 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 160, Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51 (“SFAS No. 160”). SFAS No. 160 requires a company to clearly identify and present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the company’s equity; non-controlling interests will be presented within the statement of changes in equity and comprehensive income as a separate equity component. It also requires that the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income; income per LP unit be reported after the adjustment for non-controlling interest in net income (loss); changes in ownership interest be accounted for similarly as equity transactions; and, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair value. SFAS No. 160 applies prospectively as of January 1, 2009, except for the presentation and disclosure requirements which has been applied retrospectively for all periods presented. We adopted SFAS No. 160 as of January 1, 2009 with the presentation and disclosure requirements as discussed above reflected in our consolidated financial statements.

SFAS No. 161.  In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS No. 161”), which requires enhanced disclosures about an entity’s derivative and hedging activities thereby improving the transparency of financial reporting. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged. We adopted SFAS No. 161 on a prospective basis as of January 1, 2009. The adoption of SFAS No. 161 did not affect our financial condition, results of operations or cash flows. See Note 7, “Financial Instruments,” for additional information.

Recently Issued Accounting Pronouncements

FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2 and 124-2”). On April 9, 2009, the FASB issued FSP FAS 115-2 and 124-2 which is intended to make the guidance more operational and improve the presentation and disclosure of other-than-temporary impairments (“OTTI”) on debt and equity securities in the financial statements. FSP 115-2 and 124-2 applies to debt securities and requires that the total OTTI be presented in the statement of income with an offset for the amount of impairment that is recognized in other comprehensive income, which amount represents the noncredit component. Noncredit component losses are to be recorded in other comprehensive income if an investor can assess that (a) it does not have the intent to sell or (b) it is not more likely than not that it will have to sell the security prior to its anticipated recovery. FSP 115-2 and 124-2 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15,

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

1. Description of Business and Basis of Presentation  – (continued)

2009. FSP 115-2 and 124-2 will be applied prospectively with a cumulative effect transition adjustment as of the beginning of the period in which it is adopted. An entity early adopting FSP 115-2 and 124-2 must also early adopt FSP 157-4 (as defined below). We are currently evaluating the impact of FSP 115-2 and 124-2 on our consolidated financial statements.

FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP 157-4”). On April 9, 2009, the FASB issued FSP 157-4 which provides additional guidance on determining whether a market for a financial asset is not active and a transaction is not distressed for fair value measurements under SFAS No. 157, Fair Value Measurements. FSP 157-4 will be applied prospectively and retrospective application will not be permitted. FSP 157-4 will be effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity early adopting FSP 157-4 must also early adopt FSP 115-2 and 124-2. We are currently evaluating the impact of FSP 157-4 on our consolidated financial statements.

FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP 107-1 and APB 28-1”). On April 9, 2009, the FASB issued FSP FAS 107-1 and APB 28-1 which will amend SFAS No. 107, Disclosures about Fair Value of Financial Instruments. FSP 107-1 and APB 28-1 will require an entity to provide disclosures about the fair value of financial instruments in interim financial information. FSP 107-1 and APB 28-1 would apply to all financial instruments within the scope of SFAS No. 107 and will require entities to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments, in both interim financial statements as well as annual financial statements. FSP 107-1 and APB 28-1 will be effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity may early adopt FSP 107-1 and APB 28-1 only if it also elects to early adopt FSP 157-4 and FSP 115-2 and 124-2. Since FSP 107-1 and APB-28-1 will require disclosures about fair values in interim periods, the adoption of FSP FAS 107-1 and APB 28-1 will not have any impact on our consolidated financial statements.

Filing Status of Subsidiary

Federal-Mogul Corporation (“Federal-Mogul”) is a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and files annual, quarterly and current reports. Each of these reports is separately filed with the SEC and is publicly available.

2. Operating Units

a. Investment Management

Icahn Onshore LP (the “Onshore GP”) and Icahn Offshore LP (the “Offshore GP” and, together with the Onshore GP, the “General Partners”) act as general partner of Icahn Partners LP (the “Onshore Fund”) and the Offshore Master Funds (as defined herein), respectively. The “Offshore Master Funds” consist of (i) Icahn Partners Master Fund LP, (ii) Icahn Partners Master Fund II L.P. and (iii) Icahn Partners Master Fund III L.P. The Onshore Fund and the Offshore Master Funds are collectively referred to herein as the “Investment Funds.” In addition, the “Offshore Funds” consist of (i) Icahn Fund Ltd. (referred to herein as the Offshore Fund), (ii) Icahn Fund II Ltd. and (iii) Icahn Fund III Ltd. The Offshore GP also acts as general partner of a fund formed as a Cayman Islands exempted limited partnership that invests in the Offshore Master Funds. This fund, together with other funds that also invest in the Offshore Master Funds, constitute the “Feeder Funds” and, together with the Investment Funds, are referred to herein as the “Private Funds.”

Effective January 1, 2008, in addition to providing investment advisory services to the Private Funds, the General Partners provide or cause their affiliates to provide certain administrative and back office services to the Private Funds that had been previously provided by Icahn Capital Management LP (the “Services”) and, in consideration of providing the Services, the General Partners will receive special profits interest allocations

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

2. Operating Units  – (continued)

from the Investment Funds. This allocation is generally equal to 0.625% of the balance in each fee-paying capital account as of the beginning of each quarter (for each investor of fee-paying capital account, the Target Special Profits Interest Amount) except that amounts are only allocated to the General Partners in respect of special profits interest allocations if there is sufficient net profits in the Investment Funds to cover such amounts. The General Partners may also receive incentive allocations, generally 25% of the net profits generated by fee-paying investors in the Investment Funds, and are subject to a “high water mark” (whereby the General Partners do not earn incentive allocations during a particular year even though the fund had a positive return in such year until losses in prior periods have been recovered). The General Partners do not provide such services to any other entities, individuals or accounts. Interests in the Private Funds are offered only to certain sophisticated and qualified investors on the basis of exemptions from the registration requirements of the federal securities laws and are not publicly available.

Our Investment Management segment’s revenues are affected by the combination of fee-paying assets under management (“AUM”) and the investment performance of the Private Funds. The General Partners’ incentive allocations and special profits interest allocations earned from the Private Funds are accrued on a quarterly basis in accordance with Method 2 of Emerging Issues Task Force (“EITF”) Topic D-96, Accounting for Management Fees Based on a Formula, and are allocated to the General Partners at the end of the Private Funds’ fiscal year (or sooner on redemptions). Such quarterly accruals may be reversed as a result of subsequent investment performance or redemptions prior to the conclusion of the Private Funds’ fiscal year.

As of March 31, 2009, the full Target Special Profits Interest Amount was $91 million, which includes a carryforward Target Special Profits Interest Amount of $70 million from December 31, 2008, a Target Special Profits Interest Amount for the first quarter of the fiscal year ending December 31, 2009 (“fiscal 2009”), and a hypothetical return on the full Target Special Profits Interest Amount from the Investment Funds. Of the full Target Special Profits Interest Amount as of March 31, 2009, $87 million was accrued as a special profits interest allocation for the first quarter of fiscal 2009 and $4 million will be carried forward to the extent that there are sufficient net profits in the Investment Funds during the investment period to cover such amounts. This compares with a special profits interest allocation accrual for the first quarter of fiscal 2008 of $5 million.

b. Automotive

We conduct our Automotive segment through our majority ownership in Federal-Mogul. Federal-Mogul is a leading global supplier of technology and innovation in vehicle and industrial products for fuel economy, alternative energies, environment and safety systems. Federal-Mogul serves the world’s foremost original equipment manufacturers (“OEM”) of automotive, light commercial, heavy-duty, industrial, agricultural, aerospace, marine, rail, and off-road vehicles, as well as the worldwide aftermarket. During the first quarter of fiscal 2009, Federal-Mogul consolidated its product groups and eliminated the Automotive Products group. As of March 31, 2009, Federal-Mogul is organized into four product groups: Powertrain Energy, Powertrain Sealing and Bearings, Vehicle Safety and Protection, and Global Aftermarket.

In accordance with U.S. GAAP, assets transferred between entities under common control are accounted for at historical cost similar to a pooling of interests. As of February 25, 2008 (the effective date of control by Thornwood Associates Limited Partnership, or Thornwood, and, indirectly, by Carl C. Icahn) and thereafter, as a result of our acquisition of a majority interest in Federal-Mogul on July 3, 2008, we consolidated the financial position, results of operations and cash flows of Federal-Mogul. We evaluated the activity between February 25, 2008 and February 29, 2008 and, based on the immateriality of such activity, concluded that the use of an accounting convenience date of February 29, 2008 was appropriate.

Federal-Mogul believes that its sales are well-balanced between OEM and aftermarket, as well as domestic and international markets. Federal-Mogul’s customers include the world’s largest light and commercial

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

2. Operating Units  – (continued)

vehicle OEMs and major distributors and retailers in the independent aftermarket. Federal-Mogul has operations in established markets, such as Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States, and emerging markets, including Brazil, China, Czech Republic, Hungary, India, Korea, Mexico, Poland, Russia, Thailand and Turkey. The attendant risks of Federal-Mogul’s international operations are primarily related to currency fluctuations, changes in local economic and political conditions and changes in laws and regulations.

Accounts Receivable, Net

Federal-Mogul’s subsidiaries in Brazil, France, Germany, India, Italy and Spain are parties to accounts receivable factoring arrangements. Gross accounts receivable factored under these facilities were $205 million and $222 million as of March 31, 2009 and December 31, 2008, respectively. Of those gross amounts, $185 million and $209 million, respectively, were factored without recourse and treated as sales under SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS No. 140”). Under terms of these factoring arrangements, Federal-Mogul is not obligated to draw cash immediately upon the factoring of accounts receivable. Thus, as of March 31, 2009 and December 31, 2008, Federal-Mogul had outstanding factored amounts of $14 million and $8 million, respectively, for which cash had not yet been drawn. Expenses associated with receivables factored or discounted are recorded in the consolidated statements of operations within selling, general and administrative.

Restructuring Expenses

Federal-Mogul’s restructuring activities are undertaken as necessary to execute its strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize Federal-Mogul’s businesses and to relocate manufacturing operations to lower cost markets. These activities generally fall into one of the following categories:

An unprecedented downturn in the global automotive industry and global financial markets led Federal-Mogul to announce, in September 2008 and December 2008, certain restructuring actions, herein referred to as “Restructuring 2009,” designed to improve operating performance and respond to increasingly challenging conditions in the global automotive market. This plan, when combined with other workforce adjustments, is expected to reduce Federal-Mogul’s global workforce by approximately 8,600 positions. Federal-Mogul continues to solidify certain components of this plan, and will announce those components as plans are finalized. For the three months ended March 31, 2009, Federal-Mogul has recorded $38 million in restructuring charges associated with Restructuring 2009 and other restructuring programs, and expects to incur additional restructuring charges up to $18 million through the fiscal year ending December 31, 2010. As the majority of the costs expected to be incurred in relation to Restructuring 2009 are related to severance, such activities are expected to yield future annual savings at least equal to the incurred costs.

Federal-Mogul expects to finance its restructuring programs over the next several years through cash generated from its ongoing operations or through cash available under its debt agreements, subject to the terms of applicable covenants. Federal-Mogul does not expect that the execution of these programs will have an adverse impact on its liquidity position.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

2. Operating Units  – (continued)

As of December 31, 2008, the accrued liability balance relating to restructuring programs was $113 million. For the three months ended March 31, 2009, Federal-Mogul incurred $38 million of restructuring charges and paid $21 million of restructuring charges. Restructuring charges are included in restructuring and impairment within our consolidated statements of operations. As of March 31, 2009, the accrued liability balance was $126 million, which is included in accrued expenses and other liabilities in our consolidated balance sheet.

Total cumulative restructuring charges through March 31, 2009 were $170 million. We report cumulative restructuring charges for Federal-Mogul effective March 1, 2008, the date on which Federal-Mogul became under common control with us.

c. Metals

We conduct our Metals segment through our indirect wholly owned subsidiary, PSC Metals Inc. (“PSC Metals”). PSC Metals collects industrial and obsolete scrap metal, processes it into reusable forms and supplies the recycled metals to its customers including electric-arc furnace mills, integrated steel mills, foundries, secondary smelters and metals brokers. PSC Metals’ ferrous products include shredded, sheared and bundled scrap metal and other purchased scrap metal such as turnings (steel machining fragments), cast furnace iron and broken furnace iron. PSC Metals also processes non-ferrous metals including aluminum, copper, brass, stainless steel and nickel-bearing metals. Non-ferrous products are a significant raw material in the production of aluminum and copper alloys used in manufacturing. PSC Metals also operates a secondary products business that includes the supply of secondary plate and structural grade pipe that is sold into niche markets for counterweights, piling and foundations, construction materials and infrastructure end-markets. For each of the three months ended March 31, 2009 and 2008, PSC Metals’ had four customers who accounted for approximately 30% and 37% of net sales, respectively.

See Note 9, “Goodwill and Intangible Assets,” for disclosures concerning our Metals segment’s impairment charges related to its goodwill and indefinite lived intangibles.

d. Real Estate

Our Real Estate segment consists of rental real estate, property development and associated resort activities.

As of March 31, 2009 and December 31, 2008, we owned 31 rental real estate properties. Our property development operations are run primarily through Bayswater, a real estate investment, management and development subsidiary that focuses primarily on the construction and sale of single-family and multi-family homes, lots in subdivisions and planned communities and raw land for residential development. Our New Seabury development property in Cape Cod, Massachusetts and our Grand Harbor and Oak Harbor development property in Vero Beach, Florida each include land for future residential development of approximately 335 and 870 units of residential housing, respectively. Both developments operate golf and resort operations as well.

Our Real Estate operations compares the carrying value of its real estate portfolio, which includes commercial property for rent and residential property for current and future development, to its estimated realizable value to determine if its carrying costs will be recovered. In cases where our Real Estate operations do not expect to recover its carrying cost, an impairment charge is recorded as an expense and a reduction in the carrying cost of the asset. In developing assumptions as to estimated realizable value, our Real Estate operations consider current and future house prices, construction and carrying costs and sales absorptions for its residential inventory and current and future rental rates for its commercial properties.

For the three months ended March 31, 2009 and 2008, our Real Estate operations recorded no impairment charges.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

2. Operating Units  – (continued)

As of March 31, 2009 and December 31, 2008, $93 million and $94 million, respectively, of the net investment in financing leases and net real estate leased to others, which is included in property, plant and equipment, net, was pledged to collateralize the payment of nonrecourse mortgages payable.

e. Home Fashion

We conduct our Home Fashion segment through our majority ownership in WestPoint International, Inc. (“WPI”), a manufacturer and distributor of home fashion consumer products. WPI is engaged in the business of manufacturing, sourcing, marketing and distributing bed and bath home fashion products, including, among others, sheets, pillowcases, comforters, blankets, bedspreads, pillows, mattress pads, towels and related products. WPI recognizes revenue primarily through the sale of home fashion products to a variety of retail and institutional customers. In addition, WPI receives a small portion of its revenues through the licensing of its trademarks.

A relatively small number of customers have historically accounted for a significant portion of WPI’s net sales. For three months ended March 31, 2009 and 2008 net sales to two customers amounted to 33% and 30%, respectively, of total net sales.

Restructuring and Impairment Expenses

To improve WPI’s competitive position, WPI management intends to continue to reduce its cost of goods sold by restructuring its operations in the plants located in the United States, increasing production within its non-U.S. facilities and joint venture operation and sourcing goods from lower cost overseas facilities. In the second quarter of fiscal 2008, WPI entered into an agreement with a third party to manage the majority of its U.S. warehousing and distribution operations, which WPI consolidated into its Wagram, NC facility. In April 2009, as part of its ongoing restructuring activities, WPI announced the closure of certain of its manufacturing facilities located in the United States. In the future, the vast majority of the products currently manufactured or fabricated in these facilities will be sourced from plants located outside of the United States. As of March 31, 2009, $158 million of WPI’s assets are located outside of the United States, primarily in Bahrain.

WPI incurred restructuring costs of $4 million and $7 million for the three months ended March 31, 2009 and 2008, respectively. Included in restructuring expenses are cash charges associated with the ongoing costs of closed plants, employee severance, benefits and related costs and transition expenses. Restructuring charges are included in restructuring and impairment within our consolidated statements of operations. The amount of accrued restructuring costs at December 31, 2008 was $1 million. WPI paid $4 million of restructuring charges for the three months ended March 31, 2009. As of March 31, 2009, the accrued liability balance was $1 million, which is included in accrued expenses and other liabilities in our consolidated balance sheet.

Total cumulative restructuring charges from August 8, 2005 (acquisition date) through March 31, 2009 were $62 million.

WPI incurred non-cash impairment charges that were primarily related to plants that will close of $2 million for the three months ended March 31, 2009. In recording the impairment charges related to its plants, WPI compared estimated net realizable values of property, plant and equipment to their current carrying values. Impairment charges are included in restructuring and impairment within our consolidated statements of operations.

WPI anticipates that restructuring charges will continue to be incurred throughout fiscal 2009. WPI anticipates incurring restructuring costs and impairment charges in fiscal 2009 relating to the current restructuring plan between $20 million and $24 million primarily related to the continuing costs of its closed facilities, employee severance, benefits and related costs, transition expenses and impairment charges. Restructuring costs could be affected by, among other things, WPI’s decision to accelerate or delay its restructuring efforts. As a result, actual costs incurred could vary materially from these anticipated amounts.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

3. Discontinued Operations and Assets Held for Sale

Gaming

On February 20, 2008, we consummated the sale of our subsidiary, American Casino & Entertainment Properties LLC (“ACEP”), for $1.2 billion to an affiliate of Whitehall Street Real Estate Fund, realizing a gain of approximately $476 million, after taxes. The sale of ACEP included the Stratosphere and three other Nevada gaming properties, which represented all of our remaining gaming operations.

Home Fashion — Retail Stores

WPI closed all of its retail stores based on a comprehensive evaluation of the stores’ long-term growth prospects and their on-going value to the business. On October 18, 2007, WPI entered into an agreement to sell the inventory at all of its retail stores and subsequently ceased operations of its retail stores. Accordingly, it has reported the retail outlet stores business as discontinued operations for all periods presented. As a result of the sale, WPI incurred charges related to the termination of the leases relating to its retail outlet stores facilities. As of March 31, 2009 and December 31, 2008, the accrued lease termination liability balance was $3 million each, which is included in accrued expenses and other liabilities in our consolidated balance sheets.

Real Estate

Operating properties are reclassified to held for sale when subject to a contract. The operations of such properties are classified as discontinued operations. The properties classified as discontinued operations did not change during the three months ended March 31, 2009.

Results of Discontinued Operations

The financial position and results of operations for our former Gaming and certain portions of the Home Fashion and Real Estate segments described above are presented as other assets in the consolidated balance sheets and discontinued operations in the consolidated statements of operations for all periods presented in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Results from discontinued operations for the three months ended March 31, 2009 were not material. Results from discontinued operations for the three months ended March 31, 2008 included a gain on sale of discontinued operations of $476 million, net of income taxes of approximately $260 million, recorded on the sale of ACEP. With respect to the taxes recorded on the sale of ACEP, $103 million was recorded as a deferred tax liability pursuant to a Code 1031 Exchange transaction completed during the third quarter of fiscal 2008.

4. Related Party Transactions

From time to time, we have entered into several transactions with entities affiliated with Carl C. Icahn. The transactions include purchases by us of business and business interests, including debt, of the affiliated entities. Additionally, other transactions have occurred as described below.

All related party transactions are reviewed and approved by our Audit Committee. Our Audit Committee obtains independent legal counsel on all related party transactions and independent financial advice when appropriate.

In accordance with U.S. GAAP, assets transferred between common control entities are accounted for at historical cost similar to a pooling of interests, and the financial statements of previously separate companies for periods prior to the acquisition are restated on a consolidated basis. Additionally, prior to the acquisition, the earnings, losses, capital contributions and distributions of the acquired entities are allocated to the general partner as an adjustment to equity, and the consideration in excess of the basis of net assets acquired is shown as a reduction to the general partner’s capital account.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

4. Related Party Transactions  – (continued)

a. Investment Management

Until August 8, 2007, Icahn Management LP (“Icahn Management”) elected to defer most of the management fees from the Offshore Funds and such amounts remain invested in the Offshore Funds. At March 31, 2009, the balance of the deferred management fees payable (included in accrued expenses and other liabilities) by the Offshore Funds to Icahn Management was $100 million. The deferred management fee payable increased by $7 million for the three months ended March 31, 2009. The change in deferred management fee payable for the three months ended March 31, 2008 was not material.

Effective January 1, 2008, Icahn Capital LP (“Icahn Capital”) paid for salaries and benefits of certain employees who may also perform various functions on behalf of certain other entities beneficially owned by Carl C. Icahn (collectively, “Icahn Affiliates”), including administrative and investment services. Prior to January 1, 2008, Icahn & Co. LLC paid for such services. Under a separate expense-sharing agreement, Icahn Capital charged Icahn Affiliates $0.4 million and $0.3 million for such services for the three months ended March 31, 2009 and 2008, respectively. As of March 31, 2009, accrued expenses and other liabilities in the consolidated balance sheet included $1.4 million to be applied to Icahn Capital’s charges to Icahn Affiliates for services to be provided to them.

Carl C. Icahn, along with his affiliates, make investments in the Private Funds (other than the amounts invested by Icahn Enterprises and its affiliates). These investments are not subject to special profits interest allocations or incentive allocations. As of March 31, 2009 and December 31, 2008, the total fair value of these investments was approximately $1.2 billion and $1.1 billion, respectively.

b. Metals

For the three months ended March 31, 2008, PSC Metals sold material to Alliance Castings aggregating $3 million. Such amounts were not material for the three months ended March 31, 2009. Mr. Icahn is a major shareholder of Alliance Castings.

c. Administrative Services — Holding Company

For each of three months ended March 31, 2009 and 2008, we paid an affiliate approximately $1 million for the non-exclusive use of office space.

For each of the three months ended March 31, 2009 and 2008, the Holding Company provided certain professional services to an Icahn affiliate for which we charged $0.6 million and $0.5 million respectively. As of March 31, 2009, accrued expenses and other liabilities in the consolidated balance sheet included $2.2 million to be applied to the Holding Company’s charges to the affiliate for services to be provided to it.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

5. Investments and Related Matters

a. Investment Management

Securities owned, and securities sold, not yet purchased consist of equities, bonds, bank debt and other corporate obligations, and derivatives, all of which are reported at fair value in our consolidated balance sheets. The following table summarizes the Private Funds’ securities owned, securities sold, not yet purchased and unrealized gains and losses on derivatives (in millions of dollars):

		March 31, 2009								December 31, 2008
		Amortized Cost				Carrying Value				Amortized Cost				Carrying Value
Securities Owned, at fair value:
Common stock		$	4,397			$	2,340			$	5,112			$	2,826
Convertible preferred stock			31				5				30				9
Call options			16				22				41				41
Corporate debt			1,900				1,310				1,830				1,385
Total Securities Owned, at fair value		$	6,344			$	3,677			$	7,013			$	4,261
Securities Sold, Not Yet Purchased, at fair value:
Common stock		$	1,266			$	988			$	2,821			$	2,273
Corporate debt			3				3				—				—
Total Securities Sold, Not Yet Purchased, at fair value		$	1,269			$	991			$	2,821			$	2,273
Unrealized Gains on Derivative Contracts, at fair value(1)		$	90			$	76			$	74			$	79
Unrealized Losses on Derivative Contracts, at fair value(2)		$	118			$	525			$	95			$	440

Upon the adoption of Statement of Position No. 07-1, Clarification of the Scope of the Audit and Accounting Guide — Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investment Companies (“SOP 07-1”), the General Partners lost their ability to retain specialized accounting pursuant to the AICPA Audit and Accounting Guide — Investment Companies. For those investments that (i) were deemed to be available-for-sale securities, (ii) fall outside the scope of SFAS No. 115 or (iii) the Private Funds would otherwise account for under the equity method, the Private Funds apply the fair value option pursuant to SFAS No. 159. The application of the fair value option pursuant to SFAS No. 159 is irrevocable. The Private Funds record unrealized gains and losses for the change in the fair value of these securities as a component of Investment Management revenues in the consolidated statements of operations.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

5. Investments and Related Matters  – (continued)

The following table summarizes those investments for which the Private Funds would otherwise apply the equity method of accounting under APB 18. The Private Funds applied the fair value option pursuant to SFAS No. 159 to such investments through March 31, 2009 (in millions of dollars):

		Private Funds Stock Ownership Percentage				Fair Value March 31, 2009				Gains (Losses)
										Three Months Ended March 31,
Investment										2009				2008
Adventrx Pharmaceuticals Inc.			3.83	%		$	0.6			$	0.3			$	0.3
Blockbuster Inc.			7.75	%			9.6				(6.6	)			(9.3	)
WCI Communities Inc.			0.00	%			—				—				(2.1	)
						$	10.2			$	(6.3	)		$	(11.1	)

The Private Funds assess the applicability of APB 18 to their investments based on a combination of qualitative and quantitative factors, including overall stock ownership of the Private Funds combined with those of affiliates of Icahn Enterprises.

We believe that these investments as noted in the above table are not material, individually or in the aggregate, to our consolidated financial statements. These companies are registered SEC filers and their consolidated financial statements are available at www.sec.gov.

Investments in Variable Interest Entities

The General Partners consolidate certain variable interest entities (“VIEs”) when they are determined to be their primary beneficiary, either directly or indirectly through other consolidated subsidiaries. The assets of the consolidated VIEs are primarily classified within cash and cash equivalents and investments in the consolidated balance sheets. The liabilities of the consolidated VIEs are primarily classified within securities sold, not yet purchased, at fair value, and accrued expenses and other liabilities in the consolidated balance sheets and are non-recourse to the General Partners’ general credit. Any creditors of VIEs do not have recourse against the general credit of the General Partners solely as a result of our including these VIEs in our consolidated financial statements.

The consolidated VIEs consist of the Offshore Fund and each of the Offshore Master Funds. The Offshore GP sponsored the formation of and manages each of these VIEs and, in some cases, has an investment therein. In evaluating whether the Offshore GP is the primary beneficiary of such VIEs, the Offshore GP has considered the nature and extent of its involvement with such VIEs and whether it absorbs the majority of losses among other variable interest holders. In most cases, the Offshore GP was deemed to be the primary beneficiary of such VIEs because it would absorb the majority of expected losses among other variable interest holders and its close association with such VIEs, including the ability to direct the business activities of such VIEs.

The following table presents information regarding interests in VIEs for which the Offshore GP holds a variable interest as of March 31, 2009 (in millions of dollars):

		Offshore GP is the Primary Beneficiary												Offshore GP is not the Primary Beneficiary
		Net Assets				Offshore GP’s Interests(2)				Pledged Collateral(1)				Net Assets				Offshore GP’s Interests(2)
Offshore Fund and Offshore Master Funds		$	2,313			$	5			$	830			$	545			$	0.1

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

5. Investments and Related Matters  – (continued)

b. Automotive, Metals, Home Fashion and Holding Company

Investments for Automotive, Metals, Home Fashion and Holding Company consist of the following (in millions of dollars):

		March 31, 2009								December 31, 2008
		Amortized Cost				Carrying Value				Amortized Cost				Carrying Value
Marketable equity and debt securities – available for sale		$	26			$	13			$	26			$	19
Equity method investments and other			221				221				235				235
Total investments		$	247			$	234			$	261			$	254

With the exception of the Automotive segment as discussed below, it is our policy to apply the fair value option to all of our investments that would be subject to the equity method of accounting pursuant to APB 18. We record unrealized gains and losses for the change in fair value of such investments as a component of revenues in the consolidated statements of operations. We believe that these investments, individually or in the aggregate, are not material to our consolidated financial statements.

The Holding Company previously had applied the fair value option pursuant to SFAS No. 159 to its investments in ImClone Systems Incorporated and Lear Corporation. The Holding Company held no positions with respect to these investments as of March 31, 2009. For the three months ended March 31, 2008, the Holding Company recorded $4 million of unrealized losses with respect to these investments. Such amounts are included in net gain (loss) from investment activities in the consolidated statements of operations.

Investments in Non-Consolidated Affiliates

Federal-Mogul maintains investments in 14 non-consolidated affiliates, which are located in China, Germany, Italy, Japan, Korea, Turkey, the United Kingdom and the United States. Federal-Mogul’s direct ownership in such affiliates ranges from approximately 1% to 50%. The aggregate investment in these affiliates approximates $210 million and $221 million at March 31, 2009 and December 31, 2008, respectively, and is included in our consolidated balance sheets as a component of investments. These investments are accounted for under the equity method pursuant to APB 18.

Equity in the earnings of non-consolidated affiliates amounted to approximately $1 million and $3 million for three months ended March 31, 2009 and the period March 1, 2008 through March 31, 2008, respectively. For the three months ended March 31, 2009, these entities generated sales of approximately $89 million, net income of approximately $3 million and at March 31, 2009 had total net assets of approximately $401 million. Distributed dividends to Federal-Mogul from non-consolidated affiliates were not material for the three months ended March 31, 2009.

6. Fair Value Measurements

We adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), as of January 1, 2007, which, among other things, requires enhanced disclosures about investments that are measured and reported at fair value. SFAS No. 157 establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

6. Fair Value Measurements  – (continued)

Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 — Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level 1 include listed equities and listed derivatives. As required by SFAS No. 157, we do not adjust the quoted price for these investments, even in situations where we hold a large position.

Level 2 — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Investments that are generally included in this category include corporate bonds and loans, less liquid and restricted equity securities and certain over-the-counter derivatives.

Level 3 — Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

The following table summarizes the valuation of our investments by the above SFAS No. 157 fair value hierarchy levels as of March 31, 2009 (in millions of dollars).

Investment Management

		Level 1				Level 2				Level 3				Total
Assets
Securities owned		$	2,340			$	1,314			$	23			$	3,677
Unrealized gains on derivative contracts(1)			—				76				—				76
		$	2,340			$	1,390			$	23			$	3,753
Liabilities
Securities sold, not yet purchased		$	988			$	3			$	—			$	991
Unrealized losses on derivative contracts(2)			16				509				—				525
		$	1,004			$	512			$	—			$	1,516

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

6. Fair Value Measurements  – (continued)

The changes in investments measured at fair value for which the Investment Management operations has used Level 3 input to determine fair value are as follows (in millions of dollars):

Balance at December 31, 2008		$	56
Realized and unrealized (losses), net			(33	)
Purchases, net			—
Balance at March 31, 2009		$	23
Unrealized (losses) included in earnings related to investments still held at reporting date		$	(33	)

Total realized and unrealized gains and losses recorded for Level 3 investments are reported in net gain from investment activities in the consolidated statements of operations.

Automotive, Holding Company and Other

		Level 1				Level 2				Total
Assets
Available for sale investments:
Marketable equity and debt securities		$	13			$	—			$	13
Unrealized gains on derivative contracts(1)			—				1				1
		$	13			$	1			$	14
Liabilities(2)
Derivative financial instruments		$	—			$	95			$	95
Unrealized losses on derivative contracts			—				5				5
		$	—			$	100			$	100

7. Financial Instruments

Certain derivative contracts executed by the Private Funds and our Automotive operations with the same counterparty are reported on a net-by counterparty basis where a legal right of offset exists under an enforceable netting agreement. Values for the derivative financial instruments, principally swaps, forwards, over-the-counter options and other conditional and exchange contracts are reported on a net-by-counterparty basis. As a result, the net exposure to counterparties is reported as either an asset or a liability in our consolidated balance sheets.

a. Investment Management and Holding Company

The Private Funds currently maintain cash deposits and cash equivalents with major financial institutions. Certain account balances may not be covered by the Federal Deposit Insurance Corporation, while other accounts may exceed federally insured limits. The Onshore Fund and the Offshore Master Funds have prime broker arrangements in place with multiple prime brokers as well as a custodian bank. These financial institutions are members of major securities exchanges. The Onshore Fund and Offshore Master Funds also have relationships with several financial institutions with whom they trade derivative and other financial instruments.

In the normal course of business, the Private Funds trade various financial instruments and enter into certain investment activities, which may give rise to off-balance-sheet risk. Currently, the Private Funds’

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

7. Financial Instruments  – (continued)

investments include futures, options, credit default swaps and securities sold, not yet purchased. These financial instruments represent future commitments to purchase or sell other financial instruments or to exchange an amount of cash based on the change in an underlying instrument at specific terms at specified future dates. Risks arise with these financial instruments from potential counterparty non-performance and from changes in the market values of underlying instruments.

Securities sold, not yet purchased represent obligations of the Private Funds to deliver the specified security, thereby creating a liability to repurchase the security in the market at prevailing prices. Accordingly, these transactions result in off-balance-sheet risk, as the Private Funds’ satisfaction of the obligations may exceed the amount recognized in the consolidated balance sheets. The Private Funds’ investments in securities and amounts due from broker are partially restricted until the Private Funds satisfy the obligation to deliver the securities sold, not yet purchased.

The Private Funds enter into derivative contracts, including swap contracts, futures contracts and option contracts with the objective of capital appreciation or as economic hedges against other securities or the market as a whole. The Private Funds also enter into foreign currency derivative contracts to economically hedge against foreign currency exchange rate risks on all or a portion of their non-U.S. dollar denominated investments.

The Private Funds and the Holding Company have entered into various types of swap contracts with other counterparties. These agreements provide that they are entitled to receive or are obligated to pay in cash an amount equal to the increase or decrease, respectively, in the value of the underlying shares, debt and other instruments that are the subject of the contracts, during the period from inception of the applicable agreement to its expiration. In addition, pursuant to the terms of such agreements, they are entitled to receive other payments, including interest, dividends and other distributions made in respect of the underlying shares, debt and other instruments during the specified time frame. They are also required to pay to the counterparty a floating interest rate equal to the product of the notional amount multiplied by an agreed-upon rate, and they receive interest on any cash collateral that they post to the counterparty at the federal funds or LIBOR rate in effect for such period.

The Private Funds trade futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of a standardized amount of a deliverable grade commodity, security, currency or cash at a specified price and specified future date unless the contract is closed before the delivery date. Payments (or variation margin) are made or received by the Private Funds each day, depending on the daily fluctuations in the value of the contract, and the whole value change is recorded as an unrealized gain or loss by the Private Funds. When the contract is closed, the Private Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The Private Funds utilize forward contracts to seek to protect their assets denominated in foreign currencies from losses due to fluctuations in foreign exchange rates. The Private Funds’ exposure to credit risk associated with non-performance of forward foreign currency contracts is limited to the unrealized gains or losses inherent in such contracts, which are recognized in unrealized gains or losses on derivative, futures and foreign currency contracts, at fair value in the consolidated balance sheets.

From time to time, the Private Funds also purchase and write option contracts. As a writer of option contracts, the Private Funds receive a premium at the outset and then bear the market risk of unfavorable changes in the price of the underlying financial instrument. As a result of writing option contracts, the Private Funds are obligated to purchase or sell, at the holder’s option, the underlying financial instrument. Accordingly, these transactions result in off-balance-sheet risk, as the Private Funds’ satisfaction of the obligations may exceed the amount recognized in the consolidated balance sheets. The Private Funds did not have any written put options at each of March 31, 2009 and December 31, 2008.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

7. Financial Instruments  – (continued)

Certain terms of the Private Funds’ contracts with derivative counterparties, which are standard and customary to such contracts, contain certain triggering events that would give the counterparties the right to terminate the derivative instruments. In such events, the counterparties to the derivative instruments could request immediate payment on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on March 31, 2009 is $525 million.

At March 31, 2009, the Private Funds had approximately $1 billion posted as collateral for derivative positions, including those derivative instruments with credit-risk-related contingent features; these amounts are included in cash held at consolidated affiliated partnerships and restricted cash within our consolidated balance sheet.

FIN 45 requires the disclosure of information about obligations under certain guarantee arrangements. FIN 45 defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity’s failure to perform under an agreement as well as indirect guarantees of the indebtedness of others.

The Private Funds have entered into certain derivative contracts, in the form of credit default swaps, that meet the accounting definition of a guarantee under FIN 45, whereby the occurrence of a credit event with respect to the issuer of the underlying financial instrument may obligate the Private Funds to make a payment to the swap counterparties. As of March 31, 2009 and December 31, 2008, the Private Funds have entered into such credit default swaps with a maximum notional amount of approximately $476 million and $604 million, respectively, with terms ranging from three months to eight years. We estimate that our potential exposure related to these credit default swaps approximates 22.9% of such notional amounts.

The following table presents the notional amount, fair value, underlying referenced credit obligation type and credit ratings for derivative contracts in which the Private Funds are assuming risk as of March 31, 2009 (in millions of dollars).

Credit Derivative Type by Derivative Risk Exposure		Notional Amount				Fair Value				Underlying Reference Obligation
Single name credit default swaps:
Investment grade risk exposure		$	40			$	—				Corporate Credit
Below investment grade risk exposure			196				(121	)			Corporate Credit
Index credit default swaps:
Investment grade risk exposure			240				(80	)			Commercial Mortgage-Backed Securities
		$	476			$	(201	)

The following table presents the fair values of the Private Funds’ derivative and balance sheet locations within the consolidated balance sheets (in millions of dollars):

		Asset Derivatives(1)								Liability Derivatives(2)
Derivatives not Designated as Hedging Instruments Under SFAS No. 133		March 31, 2009				December 31, 2008				March 31, 2009				December 31, 2008
Interest rate contracts		$	—			$	20			$	—			$	18
Foreign exchange contracts			—				8				2				—
Equity contracts			—				—				31				17
Credit contracts			214				176				630				530
Sub-total			214				204				663			$	565
Netting across contract types(3)			(138	)			(125	)			(138	)			(125	)
Total(4)		$	76			$	79			$	525			$	440

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

7. Financial Instruments  – (continued)

The following table presents the effects of the Private Funds’ derivative instruments on the statement of operations for the three months ended March 31, 2009 (in millions of dollars):

Derivatives not Designated as Hedging Instruments Under SFAS No. 133		Amount of Gain (Loss) Recognized in Income(5)
Interest rate contracts		$	48
Foreign exchange contracts			1
Equity contracts			(14	)
Credit contracts			74
		$	109

b. Automotive

Federal-Mogul manufactures and sells its products in North America, South America, Asia, Europe and Africa. As a result, Federal-Mogul’s financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets in which Federal-Mogul manufactures and sells its products. Federal-Mogul’s operating results are primarily exposed to changes in exchange rates between the U.S. dollar and European currencies.

Federal-Mogul generally tries to use natural hedges within its foreign currency activities, including the matching of revenues and costs, to minimize foreign currency risk. Where natural hedges are not in place, Federal-Mogul considers managing certain aspects of its foreign currency activities and larger transactions through the use of foreign currency options or forward contracts. Principal currencies hedged have historically included the euro, British pound, Japanese yen and Canadian dollar. Federal-Mogul had notional values of approximately $3 million and $5 million of foreign currency hedge contracts outstanding at March 31, 2009 and December 31, 2008, respectively, of which all mature in less than one year and substantially all were designated as hedging instruments for accounting purposes. Unrealized net gains of $1 million each were recorded in accumulated other comprehensive loss as of March 31, 2009 and December 31, 2008. No hedge ineffectiveness was recognized during the three months ended March 31, 2009.

During fiscal 2008, Federal-Mogul entered into a series of five-year interest rate swap agreements with a total notional value of $1,190 million to hedge the variability of interest payments associated with its variable-rate term loans. Through these swap agreements, Federal-Mogul has fixed its base interest and premium rate at a combined average interest rate of approximately 5.37% on the hedged principal amount of $1,190 million. As of March 31, 2009 and December 31, 2008, unrealized net losses of $65 million and $67 million, respectively, were recorded in accumulated other comprehensive loss as a result of these hedges. As of March 31, 2009, losses of $26 million are expected to be reclassified from accumulated other comprehensive loss to consolidated statement of operations within the next 12 months. No hedge ineffectiveness was recognized for the three months ended March 31, 2009.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

7. Financial Instruments  – (continued)

These interest rate swaps reduce Federal-Mogul’s overall interest rate risk. However, due to the remaining outstanding borrowings on Federal-Mogul’s debt agreements that continue to have variable interest rates, management believes that interest rate risk to Federal-Mogul could be material if there are significant adverse changes in interest rates.

Federal-Mogul’s production processes are dependent upon the supply of certain raw materials that are exposed to price fluctuations on the open market. The primary purpose of Federal-Mogul’s commodity price forward contract activity is to manage the volatility associated with these forecasted purchases. Federal-Mogul monitors its commodity price risk exposures regularly to maximize the overall effectiveness of its commodity forward contracts. Principal raw materials hedged include natural gas, copper, nickel, lead, high-grade aluminum and aluminum alloy. Forward contracts are used to mitigate commodity price risk associated with raw materials, generally related to purchases forecast for up to 15 months in the future.

Federal-Mogul had 292 and 364 commodity price hedge contracts outstanding with a combined notional value of $64 million and $91 million at March 31, 2009 and December 31, 2008, respectively, of which substantially all mature within one year. Of these outstanding contracts, 241 and 346 commodity price hedge contracts with a combined notional value of $50 million and $83 million at March 31, 2009 and December 31, 2008, respectively, were designated as hedging instruments for accounting purposes. Unrealized net losses of $19 million and $33 million were recorded in accumulated other comprehensive loss as of March 31, 2009 and December, 31, 2008, respectively. Unrealized net gains of $1 million were recognized in other income, net on the consolidated statement of operations during the three months ended March 31, 2009 associated with designated hedge ineffectiveness. Realized and unrealized net losses of $2 million and $3 million were recognized in cost of goods sold and other income, net, respectively, on the consolidated statement of operations during the three months ended March 31, 2009 associated with undesignated commodity price hedge contracts.

For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness. Unrealized gains and losses associated with ineffective hedges, determined using the hypothetical derivative method, are recognized in other income, net on the consolidated statements of operations. Derivative gains and losses included in accumulated other comprehensive loss for effective hedges are reclassified into operations upon recognition of the hedged transaction. Derivative gains and losses associated with undesignated hedges are recognized in other income, net on the consolidated statements of operations for outstanding hedges and cost of goods sold upon hedge maturity. Federal-Mogul’s undesignated hedges are primarily commodity hedges and such hedges have become undesignated mainly due to forecasted volume declines.

Financial instruments, which potentially subject Federal-Mogul to concentrations of credit risk, consist primarily of accounts receivable and cash investments. Federal-Mogul’s customer base includes virtually every significant global light and commercial vehicle manufacturer and a large number of distributors and installers of automotive aftermarket parts. Federal-Mogul’s credit evaluation process and the geographical dispersion of sales transactions help to mitigate credit risk concentration. No individual customer accounted for more than 6% of Federal-Mogul’s sales during the three months ended March 31, 2009. Federal-Mogul requires placement of cash in financial institutions evaluated as highly creditworthy.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

7. Financial Instruments  – (continued)

The following table presents the fair values and balance sheet locations of Federal-Mogul’s derivative instruments (in millions of dollars):

		Asset Derivatives(4)								Liability Derivatives(4)
Derivatives Designated as Cash Flow Hedging Instruments Under SFAS No. 133		March 31, 2009				December 31, 2008				March 31, 2009				December 31, 2008
Interest rate swap contracts		$	—			$	—			$	(65	)		$	(67	)
Commodity contracts			—				—				(21	)			(37	)
Foreign exchange contracts			1				1				—				—
		$	1			$	1			$	(86	)		$	(104	)

Derivatives not Designated as Hedging Instruments Under SFAS No. 133
Commodity contracts		$	—			$	—			$	(9	)		$	(7	)
		$	—			$	—			$	(9	)		$	(7	)

The following tables present the effect of Federal-Mogul’s derivative instruments on the consolidated statement of operations for the three months ended March 31, 2009 (in millions of dollars):

Derivatives Designated as Hedging Instruments Under SFAS No. 133		Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)				Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)				Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)				Location of Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)				Amount of Gain Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing
Interest rate swap contracts		$	(7	)			Interest expense			$	(9	)						$	—
Commodity contracts			6				Cost of goods sold				(8	)			Other income, net				1
Foreign exchange contracts			1				Cost of goods sold				1								—

Derivatives not Designated as Hedging Instruments Under SFAS No. 133		Location of Loss Recognized in Income on Derivatives				Amount of Loss Recognized in Income on Derivatives
Commodity contracts			Cost of goods sold			$	(2	)
Commodity contracts			Other income, net				(3	)
						$	(5	)

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

8. Inventories, Net

Our consolidated inventories, net consists of the following (in millions of dollars):

		March 31, 2009				December 31, 2008
Raw materials:
Automotive		$	164			$	166
Home Fashion			13				12
			177				178
Work in process:
Automotive			124				125
Home Fashion			29				33
			153				158
Finished Goods:
Automotive			600				603
Home Fashion			69				87
			669				690
Metals:
Ferrous			16				27
Non-ferrous			4				5
Secondary			33				35
			53				67
Total Inventories, net		$	1,052			$	1,093

9. Goodwill and Intangible Assets

Goodwill and other intangible assets consist of the following (in millions of dollars):

						March 31, 2009												December 31, 2008
Description		Amortization Periods				Gross Carrying Amount				Accumulated Amortization				Net Carrying Value				Gross Carrying Amount				Accumulated Amortization				Net Carrying Value
Definite-lived intangible assets:
Automotive			1 – 22 years			$	639			$	(88	)		$	551			$	640			$	(76	)		$	564
Metals			5 – 15 years				11				(3	)			8				11				(2	)			9
							650				(91	)			559				651				(78	)			573
Indefinite-lived intangible assets:
Automotive															354												354
Metals															—												3
Home Fashion															13												13
															367												370
Total intangible assets														$	926											$	943
Goodwill:
Automotive														$	1,053											$	1,076
Metals															—												10
														$	1,053											$	1,086

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

9. Goodwill and Intangible Assets  – (continued)

Automotive

Given the complexity of the calculation of goodwill impairment and the significance of fourth quarter economic activity, Federal-Mogul had not completed its annual impairment assessment for fiscal 2008 prior to filing its annual report on Form 10-K. During the quarter ended March 31, 2009, Federal-Mogul completed this assessment, and recorded a reduction to its goodwill impairment charge of $3 million. The goodwill impairment charges were required to adjust the carrying value of goodwill and other indefinite-lived intangible assets to estimated fair value. The estimated fair values were determined based upon consideration of various valuation methodologies, including guideline transaction multiples, multiples of current earnings, and projected future cash flows discounted at rates commensurate with the risk involved.

For the three months ended March 31, 2009 and for the period March 1, 2008 through March 31, 2008, Federal-Mogul recorded amortization expense of $12 million and $5 million, respectively, associated with definite-lived intangible assets. Federal-Mogul utilizes the straight line method of amortization, recognized over the estimated useful lives of the assets.

Metals

Our Metals segment tests indefinite-lived intangible assets for impairment annually as of September 30 or more frequently if it believes indicators of impairment exist. Our Metals segment determines the fair value of its indefinite-lived intangible assets utilizing discounted cash flows. The resultant fair value is compared to its carrying value and an impairment loss is recorded if the carrying value exceeds its fair value. Impairment tests performed as of September 30, 2008 indicated that no impairment was necessary based on economic conditions at that time.

Our Metals segment’s sales for the first quarter of fiscal 2009 declined significantly as the demand and prices for scrap fell to extremely low levels due to historically low steel mill capacity utilization rates and declines in other sectors of the economy served by our Metals segment. Given the indication of a potential impairment, our Metals segment completed a valuation in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, as of March 31, 2009, utilizing discounted cash flows based on current market conditions. This valuation resulted in an impairment loss for goodwill and other indefinite-lived intangible assets of $13 million which was recorded in the first quarter of fiscal 2009. Impairment charges are included in restructuring and impairment within our consolidated statements of operations.

10. Property, Plant and Equipment, Net

Property, plant and equipment consists of the following (in millions of dollars):

		March 31, 2009				December 31, 2008
Land		$	294			$	307
Buildings and improvements			480				492
Machinery, equipment and furniture			1,590				1,605
Assets leased to others			590				590
Construction in progress			275				275
			3,229				3,269
Less accumulated depreciation and amortization			(449	)			(391	)
Property, plant and equipment, net		$	2,780			$	2,878

Depreciation and amortization expense from continuing operations related to property, plant and equipment for the three months ended March 31, 2009 and 2008 were $70 million and $22 million, respectively.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

11. Equity Attributable to Non-Controlling Interests

Equity attributable to non-controlling interests consists of the following (in millions of dollars):

		March 31, 2009				December 31, 2008
Investment Management		$	3,678			$	3,560
Automotive			230				276
Home Fashion and other			100				108
Total equity attributable to non-controlling interests		$	4,008			$	3,944

Investment Management

The Investment Management segment consolidates those entities in which it (i) has an investment of more than 50% and has control over significant operating, financial and investing decisions of the entity, (ii) has a controlling general partner interest pursuant to EITF Issue No. 04-05, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights (“EITF 04-05”), or (iii) is the primary beneficiary of a VIE pursuant to FIN 46R. The Investment Funds and the Offshore Fund are consolidated into our financial statements even though we have only a minority interest in the equity and income of these funds. As a result, our consolidated financial statements reflect the assets, liabilities, revenues, expenses and cash flows of these funds on a gross basis, rather than reflecting only the value of our investments in such funds. As of March 31, 2009, the net asset value of the consolidated Private Funds on our consolidated balance sheet was approximately $4.8 billion, while the net asset value of our investments in these consolidated funds was approximately $1.1 billion.

12. Debt

Debt consists of the following (in millions of dollars):

		March 31, 2009				December 31, 2008
Senior unsecured variable rate convertible notes due 2013 – Icahn Enterprises		$	556			$	556
Senior unsecured 7.125% notes due 2013 – Icahn Enterprises			961				961
Senior unsecured 8.125% notes due 2012 – Icahn Enterprises			352				352
Exit facilities – Federal-Mogul			2,495				2,495
Mortgages payable			122				123
Other			80				84
Total debt		$	4,566			$	4,571

Senior Unsecured Variable Rate Convertible Notes Due 2013 — Icahn Enterprises

In April 2007, we issued an aggregate of $600 million of variable rate senior convertible notes due 2013 (the “variable rate notes”). The variable rate notes were sold in a private placement pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and issued pursuant to an indenture dated as of April 5, 2007, by and among us, as issuer, Icahn Enterprises Finance Corp. (“Icahn Enterprises Finance”), as co-issuer, and Wilmington Trust Company, as trustee. Icahn Enterprises Finance, our wholly owned subsidiary, was formed solely for the purpose of serving as a co-issuer of our debt securities in order to facilitate offerings of the debt securities. Other than Icahn Enterprises Holdings, no other subsidiaries guarantee payment on the variable rate notes. The variable rate notes bear interest at a rate of three-month LIBOR minus 125 basis points, but the all-in-rate can be no less than 4.0% nor more than 5.5%, and are convertible into our depositary units at a conversion price of $132.595 per depositary unit per $1,000 principal amount, subject to

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

12. Debt  – (continued)

adjustments in certain circumstances. Pursuant to the indenture governing the variable rate notes, on October 5, 2008, the conversion price was adjusted downward to $105.00 per depositary unit per $1,000 principal amount. As of March 31, 2009, the interest rate was 4.0%. The interest on the variable rate notes is payable quarterly on each January 15, April 15, July 15 and October 15. The variable rate notes mature on August 15, 2013, assuming they have not been converted to depositary units before their maturity date.

In the event that we declare a cash dividend or similar cash distribution in any calendar quarter with respect to our depositary units in an amount in excess of $0.10 per depositary unit (as adjusted for splits, reverse splits and/or stock dividends), the indenture governing the variable rate notes requires that we simultaneously make such distribution to holders of the variable rate notes in accordance with a formula set forth in the indenture. On March 30, 2009, we paid an aggregate cash distribution of $1 million to holders of our variable rate notes in respect to our distributions payment to our depositary unitholders. Such amounts have been classified as interest expense.

Senior Unsecured Notes — Icahn Enterprises

Senior Unsecured 7.125% Notes Due 2013

On February 7, 2005, we issued $480 million aggregate principal amount of 7.125% senior unsecured notes due 2013 (the “7.125% notes”), priced at 100% of principal amount. The 7.125% notes were issued pursuant to an indenture dated February 7, 2005 among us, as issuer, Icahn Enterprises Finance, as co-issuer, Icahn Enterprises Holdings, as guarantor, and Wilmington Trust Company, as trustee (referred to herein as the “2005 Indenture”). Other than Icahn Enterprises Holdings, no other subsidiaries guarantee payment on the notes.

On January 16, 2007, we issued an additional $500 million aggregate principal amount of 7.125% notes (the “additional 7.125% notes” and, together with the 7.125% notes, the “notes”), priced at 98.4% of par, or at a discount of 1.6%, pursuant to the 2005 Indenture. The notes have a fixed annual interest rate of 7.125%, which is paid every six months on February 15 and August 15, and will mature on February 15, 2013.

As described below, the 2005 Indenture restricts the ability of Icahn Enterprises and Icahn Enterprises Holdings, subject to certain exceptions, to, among other things: incur additional debt; pay dividends or make distributions; repurchase units; create liens; and enter into transactions with affiliates.

Senior Unsecured 8.125% Notes Due 2012

On May 12, 2004, Icahn Enterprises and Icahn Enterprises Finance co-issued senior unsecured 8.125% notes due 2012 (“8.125% notes”) in the aggregate principal amount of $353 million. The 8.125% notes were issued pursuant to an indenture, dated as of May 12, 2004, among Icahn Enterprises, Icahn Enterprises Finance, Icahn Enterprises Holdings, as guarantor, and Wilmington Trust Company, as trustee. The 8.125% notes were priced at 99.266% of principal amount and have a fixed annual interest rate of 8.125%, which is paid every six months on June 1 and December 1. The 8.125% notes will mature on June 1, 2012. Other than Icahn Enterprises Holdings, no other subsidiaries guarantee payment on the notes.

As described below, the indenture governing the 8.125% notes restricts the ability of Icahn Enterprises and Icahn Enterprises Holdings, subject to certain exceptions, to, among other, things: incur additional debt; pay dividends or make distributions; repurchase units; create liens and enter into transactions with affiliates.

Senior Unsecured Notes Restrictions and Covenants

The 2005 Indenture governing our senior unsecured 7.125% notes and the indenture governing our senior unsecured 8.125% notes 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 governing our senior unsecured notes require that on

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

12. Debt  – (continued)

each quarterly determination date that we and the guarantor of the notes (currently only Icahn Enterprises Holdings) maintain certain minimum financial ratios, as defined in the applicable indenture. The indentures also restrict the creation of liens, mergers, consolidations and sales of substantially all of our assets, and transactions with affiliates.

As of March 31, 2009 and December 31, 2008, we are in compliance with all covenants, including maintaining certain minimum financial ratios, as defined in the applicable indentures. Additionally, as of March 31, 2009, based on certain minimum financial ratios, we and Icahn Enterprises Holdings could not incur additional indebtedness.

Senior Secured Revolving Credit Facility — Icahn Enterprises

On August 21, 2006, we and Icahn Enterprises Finance as the borrowers, and certain of our subsidiaries, as guarantors, entered into a credit agreement with Bear Stearns Corporate Lending Inc., as administrative agent, and certain other lender parties. Under the credit agreement, we are permitted to borrow up to $150 million, including a $50 million sub-limit that may be used for letters of credit. Borrowings under the agreement, which are based on our credit rating, bear interest at LIBOR plus 1.0% to 2.0%. We pay an unused line fee of 0.25% to 0.5%. As of March 31, 2009, there were no borrowings under the facility.

Obligations under the credit agreement are guaranteed and secured by liens on substantially all of the assets of certain of our indirect wholly owned holding company subsidiaries. The credit agreement has a term of four years and all amounts are due and payable on August 21, 2010. The credit agreement includes covenants that, among other things, restrict the creation of liens and certain dispositions of property by holding company subsidiaries that are guarantors. Obligations under the credit agreement are immediately due and payable upon the occurrence of certain events of default.

Exit Facilities — Federal-Mogul

On December 27, 2007 (the “Effective Date”), Federal-Mogul entered into a Term Loan and Revolving Credit Agreement (the “Exit Facilities”) with Citicorp U.S.A. Inc. as Administrative Agent, JPMorgan Chase Bank, N.A. as Syndication Agent and certain lenders. The Exit Facilities include a $540 million revolving credit facility (which is subject to a borrowing base and can be increased under certain circumstances and subject to certain conditions) and a $2,960 million term loan credit facility divided into a $1,960 million tranche B loan and a $1,000 million tranche C loan. Federal-Mogul borrowed $878 million under the term loan facility on the Effective Date and the remaining $2,082 million of term loans, which were available for up to 60 days after the Effective Date, have been fully drawn.

The obligations under the revolving credit facility shall mature December 27, 2013 and shall bear interest for the six months at LIBOR plus 1.75% or at the alternate base rate (“ABR,” defined as the greater of Citibank, N.A.’s announced prime rate or 0.50% over the Federal Funds Rate) plus 0.75%, and thereafter shall be adjusted in accordance with a pricing grid based on availability under the revolving credit facility. Interest rates on the pricing grid range from LIBOR plus 1.50% to LIBOR plus 2.00% and ABR plus 0.50% to ABR plus 1.00%. The tranche B term loans shall mature December 27, 2014 and the tranche C term loans shall December 27, 2015; provided, however, that in each case, such maturity may be shortened to December 37, 2013 under certain circumstances. In addition, the tranche C term loans are subject to a pre-payment premium, should Federal-Mogul choose to prepay the loans prior to December 27, 2011. All Exit Facilities term loans bear interest at LIBOR plus 1.9375% or at ABR plus 0.9375% at Federal-Mogul’s election.

During fiscal 2008, Federal-Mogul entered into a series of five-year interest rate swap agreements with a total notional value of $1,190 million to hedge the variability of interest payments associated with its variable rate term loans under the Exit Facilities. Through these swap agreements, Federal-Mogul has fixed its base interest and premium rate at a combined average interest rate of approximately 5.37% on the hedged principal

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

12. Debt  – (continued)

amount of $1,190 million. Since the interest rate swaps hedge the variability of interest payments on variable rate debt with the same terms, they qualify for cash flow hedge accounting treatment.

Under the Exit Facilities, Federal-Mogul had $96 million and $57 million of letters of credit outstanding at March 31, 2009 and December 31, 2008, respectively. As of March 31, 2009 and December 31, 2008, the borrowing availability under the revolving credit facility was $494 million and $476 million, respectively.

The obligations of Federal-Mogul under the Exit Facilities are guaranteed by substantially all of its domestic subsidiaries and certain foreign subsidiaries of Federal-Mogul, and are secured by substantially all personal property and certain real property of Federal-Mogul and such guarantors, subject to certain limitations. The liens granted to secure these obligations and certain cash management and hedging obligations have first priority.

The Exit Facilities contain certain affirmative and negative covenants and events of default, including, subject to certain exceptions, restrictions on incurring additional indebtedness, mandatory prepayment provisions associated with specified asset sales and dispositions, and limitations on (i) investments; (ii) certain acquisitions, mergers or consolidations; (iii) sale and leaseback transactions; (iv) certain transactions with affiliates; and (v) dividends and other payments in respect of capital stock. At March 31, 2009 and December 31, 2008, Federal-Mogul was in compliance with all debt covenants under the Exit Facilities.

Mortgages Payable

Mortgages payable, all of which are non-recourse to us, bear interest at rates between 4.97% and 7.99% and have maturities between July 1, 2009 and July 1, 2016.

Secured Revolving Credit Agreement — WestPoint Home, Inc.

On June 16, 2006, WestPoint Home, Inc., an indirect wholly owned subsidiary of WPI, entered into a $250 million loan and security agreement with Bank of America, N.A., as administrative agent and lender. On September 18, 2006, The CIT Group/Commercial Services, Inc., General Electric Capital Corporation and Wells Fargo Foothill, LLC were added as lenders under this credit agreement. Under the five-year agreement, borrowings are subject to a monthly borrowing base calculation and include a $75 million sub-limit that may be used for letters of credit. Borrowings under the agreement bear interest, at the election of WestPoint Home, either at the prime rate adjusted by an applicable margin ranging from minus 0.25% to plus 0.50% or LIBOR adjusted by an applicable margin ranging from plus 1.25% to 2.00%. WestPoint Home pays an unused line fee of 0.25% to 0.275%. Obligations under the agreement are secured by WestPoint Home’s receivables, inventory and certain machinery and equipment.

The agreement contains covenants including, among others, restrictions on the incurrence of indebtedness, investments, redemption payments, distributions, acquisition of stock, securities or assets of any other entity and capital expenditures. However, WestPoint Home is not precluded from effecting any of these transactions if excess availability, after giving effect to such transaction, meets a minimum threshold.

As of March 31, 2009, there were no borrowings under the agreement, but there were outstanding letters of credit of approximately $11 million. Based upon the eligibility and reserve calculations within the agreement, WestPoint Home had unused borrowing availability of approximately $35 million at March 31, 2009.

13. Compensation Arrangements

Investment Management

Effective January 1, 2008, the General Partners amended employment agreements with certain of their employees whereby such employees have been granted rights to participate in a portion of the special profits interest allocations (in certain cases, whether or not such special profits interest is earned by the General

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

13. Compensation Arrangements  – (continued)

Partners) effective January 1, 2008 and incentive allocations earned by the General Partners, typically net of certain expenses and generally subject to various vesting provisions. The vesting period of these rights is generally between two and seven years, and such rights expire at the end of the contractual term of each respective employment agreement. The unvested amounts and vested amounts that have not been withdrawn by the employee generally remain invested in the Investment Funds and earn the rate of return of these funds, before the effects of any special profits interest allocations effective January 1, 2008 or incentive allocations, which are waived on such amounts. Accordingly, these rights are accounted for as liabilities in accordance with SFAS No. 123 (Revised 2004), Share-Based Payment (“SFAS No. 123(R)”), and remeasured at fair value each reporting period until settlement.

The General Partners recorded compensation expense of $5 million and $3 million related to these rights for the three months ended March 31, 2009 and 2008, respectively. Compensation expense is included in selling, general and administrative in the consolidated statements of operations. Compensation expense arising from grants in special profits interest allocations is recognized in the consolidated financial statements over the vesting period. Accordingly, unvested balances of special profits interest allocations allocated to certain employees are not reflected in the consolidated financial statements. Unvested amounts not yet recognized as compensation expense within the consolidated statements of operations were $4 million each as of March 31, 2009 and December 31, 2008, respectively. That cost is expected to be recognized over a weighted average of 2.8 years. Cash paid to settle rights that had been withdrawn for the three months ended March 31, 2009 was not material. Cash paid to settle rights that had been withdrawn for the three months ended March 31, 2008 was $3 million.

Automotive

Stock-Based Compensation

On December 27, 2007, Federal-Mogul entered into a deferred compensation agreement with Mr. José Maria Alapont, its President and Chief Executive Officer. Under the terms of this deferred compensation agreement, Mr. Alapont is entitled to certain distributions of Federal-Mogul Common Stock, or, at the election of Mr. Alapont, certain distributions of cash upon certain events as set forth in the agreement. The amount of the distributions shall be equal to the fair value of 500,000 shares of Federal-Mogul Common Stock, subject to certain adjustments and offsets.

On February 15, 2008, Federal-Mogul entered into a Stock Option Agreement with Mr. Alapont dated as of February 15, 2008 (the “CEO Stock Option Agreement”), which was subsequently approved by Federal-Mogul’s stockholders effective July 28, 2008. The CEO Stock Option Agreement grants Mr. Alapont a non-transferable, non-qualified option (the “CEO Option”) to purchase up to 4,000,000 shares of Federal-Mogul’s Common Stock subject to the terms and conditions described below. The exercise price for the CEO Option is $19.50 per share, which is at least equal to the fair market value of a share of Federal-Mogul’s Common Stock on the date of grant of the CEO Option. In no event may the CEO Option be exercised, in whole or in part, after December 27, 2014. The CEO Stock Option Agreement provides for vesting as follows: 80% of the shares of Common Stock subject to the CEO Option are vested as of March 31, 2009 and the final 20% of the shares of Common Stock subject to the CEO Option shall vest on March 23, 2010.

Federal-Mogul revalued the options granted to Mr. Alapont at March 31, 2009, resulting in a revised fair value of $8 million. During the three months ended March 31, 2009 and 2008, Federal-Mogul recognized $3.4 million and $1.7 million, respectively, in expense associated with these options. Since the deferred compensation agreement provides for net cash settlement at the option of Mr. Alapont, the CEO Option is treated as a liability award under SFAS No. 123(R), and the vested portion of the CEO Option, aggregating $6.5 million, has been recorded as a liability as of March 31, 2009. The remaining $1.5 million of total unrecognized compensation cost as of March 31, 2009 related to non-vested stock options is expected to be recognized ratably over the remaining term of Mr. Alapont’s employment agreement.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

13. Compensation Arrangements  – (continued)

Key assumptions and related option-pricing models used by Federal-Mogul are summarized in the following table:

		March 31, 2009 Valuation
		Plain Vanilla Options				Options Connected to Deferred Compensation				Deferred Compensation
Valuation Model		Black-Scholes				Monte Carlo				Monte Carlo
Expected volatility			69	%			69	%			69	%
Expected dividend yield			0	%			0	%			0	%
Risk-free rate over the estimated expected option life			1.14	%			1.25	%			1.25	%
Expected option life (in years)			2.97				3.36				3.36

14. Pensions, Other Postemployment Benefits and Employee Benefit Plans

Automotive

Pensions and Other Postemployment Benefits

Federal-Mogul sponsors several defined benefit pension plans (“Pension Benefits”) and health care and life insurance benefits (“Other Benefits”) for certain employees and retirees around the world. Federal-Mogul funds the Pension Benefits based on the funding requirements of federal and international laws and regulations in advance of benefit payments and the Other Benefits as benefits are provided to participating employees. The net periodic benefit costs for the three months ended March 31, 2009 and the period March 1, 2008 through March 31, 2008 were $32 million and $6 million, respectively.

15. Preferred Limited Partner Units

Pursuant to certain rights offerings consummated in 1995 and 1997, preferred units were issued. Each preferred unit has a liquidation preference of $10.00 and entitles the holder to receive distributions, payable solely in additional preferred units, at the rate of $0.50 per preferred unit per annum (which is equal to a rate of 5% of the liquidation preference thereof), payable annually at the end of March (each referred to herein as a Payment Date). On any Payment Date, we, subject to the approval of the Audit Committee, may opt to redeem all of the preferred units for an amount, payable either in all cash or by issuance of our depositary units, equal to the liquidation preference of the preferred units, plus any accrued but unpaid distributions thereon. On March 31, 2010, we must redeem all of the preferred units on the same terms as any optional redemption.

Pursuant to the terms of the preferred units, on February 23, 2009, we declared our scheduled annual preferred unit distribution payable in additional preferred units at the rate of 5% of the liquidation preference per preferred unit of $10.00. The distribution was paid on March 31, 2009 to holders of record as of March 17, 2009. A total of 624,925 additional preferred units were issued. As of March 31, 2009, the number of authorized preferred units was 14,100,000. As of March 31, 2009 and December 31, 2008, 13,127,179 and 12,502,254 preferred units were issued and outstanding, respectively.

We recorded $2 million of interest expense for the three months ended March 31, 2009 and $2 million for the three months ended March 31, 2008, in connection with the preferred units distribution.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

16. Income per LP Unit

Basic income per LP unit are based on net income attributable to Icahn Enterprises allocable to limited partners after deducting preferred pay-in-kind distributions to preferred unitholders. Net income allocable to limited partners is divided by the weighted-average number of LP units outstanding. Diluted income per LP unit are based on basic earnings adjusted for interest charges applicable to the variable rate notes and earnings before the preferred pay-in-kind distributions as well as the weighted-average number of units and equivalent units outstanding. The preferred units are considered to be equivalent units for the purpose of calculating income per LP unit. All equivalent units have been excluded from the calculation of diluted income per LP unit for the three months ended March 31, 2009 and 2008 as the effect of including them would have been anti-dilutive.

The following table sets forth the allocation of net income (loss) from continuing operations attributable to Icahn Enterprises allocable to limited partners and the computation of basic and diluted income per LP unit for the periods indicated (in millions, except per unit data):

		Three Months Ended March 31,
		2009				2008
Income (loss) from continuing operations attributable to Icahn Enterprises		$	1			$	(36	)
Less: Income from common control acquisitions allocated to general partner			—				17
			1				(19	)
Limited partners’ 98.01% share of income (loss)			1				(19	)
Basic and diluted income (loss) from continuing operations attributable to Icahn Enterprises allocable to limited partners		$	1			$	(19	)
Basic and diluted income from discontinued operations attributable to Icahn Enterprises allocable to limited partners		$	—			$	504	(1)
Weighted average LP units outstanding			75				70
Basic and diluted income per LP Unit:
Income (loss) from continuing operations per LP unit (basic and diluted)		$	0.01			$	(0.26	)
Income from discontinued operations per LP unit (basic and diluted)			0.00				7.14
		$	0.01			$	6.88

As their effect would have been anti-dilutive, the following equivalent units have been excluded from the weighted-average LP units outstanding for the periods indicated (in millions):

		Three Months Ended March 31,
		2009				2008
Redemption of preferred LP units			4				1
Variable rate notes			5				5

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

17. Segment Reporting

As of March 31, 2009, our five reportable segments are: (1) Investment Management; (2) Automotive; (3) Metals; (4) Real Estate and (5) Home Fashion. Our Investment Management segment provides investment advisory and certain management services to the Private Funds, but does not provide such services to any other entities, individuals or accounts. Our Automotive segment consists of Federal-Mogul. Our Metals segment consists of PSC Metals. Our Real Estate segment consists of rental real estate, residential property development and the operation of resort properties associated with our residential developments. Our Home Fashion segment consists of WPI. In addition to our five reportable segments, we present the results of the Holding Company which includes the unconsolidated results of Icahn Enterprises and Icahn Enterprises Holdings, and investment activity and expenses associated with the activities of the Holding Company.

We assess and measure segment operating results based on segment earnings as disclosed below. Segment earnings from operations are not necessarily indicative of cash available to fund cash requirements, nor synonymous with cash flow from operations. Certain terms of financings for our Automotive, Home Fashion and Real Estate segments impose restrictions on the segments’ ability to transfer funds to us, including restrictions on dividends, distributions, loans and other transactions.

In the table below, the Investment Management segment is represented by the first four columns. The first column, entitled Icahn Enterprises’ Interests, represents our interests in the results of operations of the Investment Management segment without the impact of eliminations arising from the consolidation of the Private Funds. This includes the gross amount of any special profits interest allocations, incentive allocations and returns on investments in the Private Funds that are attributable to Icahn Enterprises only. This also includes gains and losses on Icahn Enterprises’ direct investments in the Private Funds. The second column represents the total consolidated income and expenses of the Private Funds for all investors, including Icahn Enterprises, before eliminations. Additionally, the second column includes the results of the General Partners and Icahn Capital. The third column represents the eliminations required in order to arrive at our consolidated U.S. GAAP reported results for the segment, which is provided in the fourth column. (Amounts are in millions of dollars).

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

17. Segment Reporting  – (continued)

		Three Months Ended March 31, 2009
		Investment Management
		Icahn Enterprises’ Interests				Consolidated Private Funds				Eliminations				U.S. GAAP Investment Management				Automotive				Metals				Real Estate				Home Fashion				Holding Company				Consolidated Results
Revenues:
Net sales		$	—			$	—			$	—			$	—			$	1,238			$	76			$	9			$	84			$	—			$	1,407
Special profit interests allocation			87				—				(87	)			—				—				—				—				—				—				—
Incentive allocations			—				—				—				—				—				—				—				—				—				—
Net gain (loss) from investment activities			71	(1)			259				(71	)			259				—				—				—				—				(8	)			251
Interest and dividend income			—				75				—				75				2				—				2				—				2				81
Other income, net			—				—				—				—				14				1				11				1				—				27
			158				334				(158	)			334				1,254				77				22				85				(6	)			1,766
Expenses:
Cost of goods sold			—				—				—				—				1,080				98				2				79				—				1,259
Selling, general and administrative			9				19				—				28				197				3				12				17				4				261
Restructuring and impairment			—				—				—				—				38				13				—				6				—				57
Interest expense			—				1				—				1				34				—				2				1				34				72
			9				20				—				29				1,349				114				16				103				38				1,649
Income (loss) from continuing operations before income tax (expense) benefit			149				314				(158	)			305				(95	)			(37	)			6				(18	)			(44	)			117
Income tax (expense) benefit			—				—				—				—				(3	)			14				—				—				(1	)			10
Income (loss) from continuing operations			149				314				(158	)			305				(98	)			(23	)			6				(18	)			(45	)			127
Less: (Income) loss attributable to non- controlling interests from continuing operations			—				(223	)			67				(156	)			24				—				—				6				—				(126	)
Income (loss) attributable to Icahn Enterprises from continuing operations		$	149			$	91			$	(91	)		$	149			$	(74	)		$	(23	)		$	6			$	(12	)		$	(45	)		$	1

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

17. Segment Reporting  – (continued)

		Three Months Ended March 31, 2008
		Investment Management
		Icahn Enterprises’ Interests				Consolidated Private Funds				Eliminations				U.S. GAAP Investment Management				Automotive(2)				Metals				Real Estate				Home Fashion				Holding Company				Consolidated Results
Revenues:
Net sales		$	—			$	—			$	—			$	—			$	646			$	303			$	19			$	114			$	—			$	1,082
Special profit interests allocation			5				—				(5	)			—				—				—				—				—				—				—
Incentive allocations			1				—				(1	)			—				—				—				—				—				—				—
Net gain (loss) from investment activities			(1	)(1)			(26	)			1				(26	)			—				—				—				—				2				(24	)
Interest and dividend income			—				40				—				40				5				—				2				1				19				67
Other income, net			—				—				—				—				2				—				3				—				—				5
			5				14				(5	)			14				653				303				24				115				21				1,130
Expenses:
Cost of goods sold			—				—				—				—				560				270				9				105				—				944
Selling, general and administrative			8				6				—				14				77				6				10				26				7				140
Restructuring and impairment			—				—				—				—				2				—				—				7				—				9
Interest expense			—				1				—				1				21				—				2				—				34				58
			8				7				—				15				660				276				21				138				41				1,151
(Loss) income from continuing operations before income tax (expense) benefit			(3	)			7				(5	)			(1	)			(7	)			27				3				(23	)			(20	)			(21	)
Income tax (expense) benefit			—				—				—				—				(10	)			(11	)			—				—				1				(20	)
(Loss) income from continuing operations			(3	)			7				(5	)			(1	)			(17	)			16				3				(23	)			(19	)			(41	)
Less: (Income) loss attributable to non-controlling interests from continuing operations			—				(1	)			(1	)			(2	)			—				—				—				7				—				5
(Loss) income attributable to Icahn Enterprises from continuing operations		$	(3	)		$	6			$	(6	)		$	(3	)		$	(17	)		$	16			$	3			$	(16	)		$	(19	)		$	(36	)

Total assets by reportable segment are not presented because there have been no material changes for the three months ended March 31, 2009.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

18. Income Taxes

We recorded an income benefit of $10 million and an income tax expense of $20 million on pre-tax income of $117 million and pre-tax loss of $21 million for the three months ended March 31, 2009 and 2008, respectively. Our effective income tax rate was (8.5)% and (95.2)% for the respective periods. The difference between the effective tax rate and the statutory federal rate of 35% is due principally to income or losses from partnership entities in which taxes are the responsibility of the partners, as well as changes in valuation allowances.

19. Commitments and Contingencies

Federal-Mogul

Environmental Matters

Federal-Mogul has been designated as a potentially responsible party (“PRP”) by the United States Environmental Protection Agency, other national environmental agencies and various provincial and state agencies with respect to certain sites with which Federal-Mogul may have had a direct or indirect involvement. PRP designation typically requires the funding of site investigations and subsequent remedial activities.

Many of the sites that are likely to be the costliest to remediate are often current or former commercial waste disposal facilities to which numerous companies sent wastes. Despite the joint and several liability that might be imposed on Federal-Mogul pertaining to these sites, Federal-Mogul’s share of the total waste sent to these sites has generally been small. The other companies that sent wastes to these sites, often numbering in the hundreds or more, generally include large, solvent, publicly owned companies and in most such situations the government agencies and courts have imposed liability in some reasonable relationship to contribution of waste. Thus, Federal-Mogul believes its exposure for liability at these sites is limited.

Federal-Mogul has also identified certain other present and former properties at which it may be responsible for cleaning up or addressing environmental contamination, in some cases as a result of contractual commitments. Federal-Mogul is actively seeking to resolve these actual and potential statutory, regulatory and contractual obligations. Although difficult to quantify based on the complexity of the issues, Federal-Mogul has accrued amounts corresponding to its best estimate of the costs associated with such regulatory and contractual obligations on the basis of available information from site investigations and best professional judgment of consultants.

Federal-Mogul is a party to two lawsuits in Ohio and Michigan relating to indemnification for costs arising from environmental releases from industrial operations of the predecessor company to Federal-Mogul prior to 1986. In the Ohio lawsuit brought by Federal-Mogul against a number of insurers, most of the insurer-defendants have been dismissed because of settlements that Federal-Mogul has reached with them. The case is proceeding against several non-settling insurers. In the insurer-initiated Michigan lawsuit, Federal-Mogul has settled with the insurer that initiated the action, and these two parties have jointly filed a motion for dismissal of the action. The settlements with insurers reached by Federal-Mogul during the three months ended March, 31 2009 resulted in a net recovery to Federal-Mogul of $12 million. Federal-Mogul continues to engage in settlement discussions with several of the parties remaining in the Ohio case, although no assurances can be given regarding the outcome of such discussions.

Total environmental reserves were $24 million and $26 million at March 31, 2009 and December 31, 2008, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheet.

Federal-Mogul believes that recorded environmental liabilities will be adequate to cover its estimated liability for its exposure in respect to such matters. In the event that such liabilities were to significantly exceed the amounts recorded by Federal-Mogul, our Automotive segment’s results of operations could be materially affected. At March 31, 2009, Federal-Mogul estimates that reasonably possible material additional losses above and beyond its best estimate of required remediation costs as recorded to be $44 million.

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

19. Commitments and Contingencies  – (continued)

Conditional Asset Retirement Obligations

Federal-Mogul records conditional asset retirement obligations (“CARO”) in accordance FIN 47, Accounting for Conditional Asset Retirement Obligations — an interpretation of FASB Statement 143 (“FIN 47”), when the amount can be reasonably estimated, typically upon the expectation that an operating site may be closed or sold. Federal-Mogul has identified sites with contractual obligations and several sites that are closed or expected to be closed and sold in connection with Restructuring 2009. In connection with these sites, Federal-Mogul has accrued $27 million each as of March 31, 2009 and December 31, 2008 for CARO, primarily related to anticipated costs of removing hazardous building materials, and has considered impairment issues that may result from capitalization of CARO in accordance with SFAS No. 144.

Federal-Mogul has additional CARO, also primarily related to removal costs of hazardous materials in buildings, for which it believes reasonable cost estimates cannot be made at this time because Federal-Mogul does not believe it has a reasonable basis to assign probabilities to a range of potential settlement dates for these retirement obligations. Accordingly, Federal-Mogul is currently unable to determine amounts to accrue for CARO at such sites.

For those sites that Federal-Mogul identifies in the future for closure or sale, or for which it otherwise believes it has a reasonable basis to assign probabilities to a range of potential settlement dates, Federal-Mogul will review these sites for both CARO in accordance with FIN 47 and impairment issues in accordance with SFAS No. 144.

Other Matters

Federal-Mogul is involved in other legal actions and claims, directly and through its subsidiaries. We do not believe that the outcomes of these other actions or claims are likely to have a material adverse effect on the operating results or cash flows of our Automotive segment. However, we cannot predict the outcome of these proceedings or the ultimate impact on our investment in Federal-Mogul and its subsidiaries.

WPI Litigation

We are defendants in two lawsuits, one in federal court in New York and one in the Delaware state court, challenging, among other matters, the status of our ownership interests in the common and preferred stock of WPI.

We continue to vigorously defend against all claims asserted in the federal and Delaware proceedings and believe that we have valid defenses. However, we cannot predict the outcome of these proceedings or the ultimate impact on our investment in WPI and its subsidiaries or the business prospects of WPI and its subsidiaries.

If we were to lose control of WPI, it could adversely affect the business and prospects of WPI and the value of our investment in it. In addition, we consolidated the balance sheet of WPI as of March 31, 2009 and WPI’s results of operations for the period from the date of acquisition (August 8, 2005) through March 31, 2009. If we were to own less than 50% of the outstanding common stock or the challenge to our preferred stock ownership is successful, we would have to evaluate whether we should consolidate WPI and, if so, our consolidated financial statements could be materially different from those presented for all periods presented.

National Energy Group, Inc.

National Energy Group, Inc. (“NEGI”) is a defendant, together with Icahn Enterprises and various individuals, including one of our current directors, as additional defendants, in a purported stockholder derivative and class action lawsuit filed in February 2008 alleging that among other things, certain of NEGI’s current and former officers and directors breached their fiduciary duties to NEGI and its stockholders in connection with NEGI’s sale of its 50% interest in an oil and gas holding company. Following such disposition, NEGI has had no business and its principal assets consist of cash and short term investments which

TABLE OF CONTENTS

ICAHN ENTERPRISES L.P. AND SUBSIDIARIES
  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009

19. Commitments and Contingencies  – (continued)

currently aggregate approximately $48 million. In March, 2008, NEGI dissolved and filed a Form 15 with the SEC deregistering its securities with the SEC under the Exchange Act. As a result, NEGI’s status as a public company has been suspended. No cash distributions will be made to NEGI’s shareholders until the NEGI board determines that NEGI has paid, or made adequate provision for the payment of, its liabilities and obligations, including any liabilities relating to the lawsuit.

NEGI believes it has meritorious defenses to all claims and will vigorously defend the action; however, we cannot predict the outcome of the litigation on us or on our interest in NEGI.

PSC Metals

Environmental Matters

PSC Metals has been designated as a PRP by U.S. federal and state superfund laws with respect to certain sites with which PSC Metals may have had a direct or indirect involvement. It is alleged that PSC Metals and its subsidiaries or their predecessors transported waste to the sites, disposed of waste at the sites or operated the sites in question. PSC Metals has reviewed the nature and extent of the allegations, the number, connection and financial ability of other named and unnamed potentially responsible parties and the nature and estimated cost of the likely remedy. Based on reviewing the nature and extent of the allegations, PSC Metals has estimated its liability to remediate these sites to be immaterial at each of March 31, 2009 and December 31, 2008. If it is determined that PSC has liability to remediate those sites and that more expensive remediation approaches are required in the future, PSC Metals could incur additional obligations, which could be material.

Certain of PSC Metals’ facilities are environmentally impaired in part as a result of operating practices at the sites prior to their acquisition by PSC Metals and as a result of PSC Metals’ operations. PSC Metals has established procedures to periodically evaluate these sites, giving consideration to the nature and extent of the contamination. PSC Metals has provided for the remediation of these sites based upon management’s judgment and prior experience. PSC Metals has estimated the liability to remediate these sites to be $24 million at each of March 31, 2009 and December 31, 2008. Management believes, based on past experience that the vast majority of these environmental liabilities and costs will be assessed and paid over an extended period of time. PSC Metals believes that it will be able to fund such costs in the ordinary course of business.

Estimates of PSC Metals’ liability for remediation of a particular site and the method and ultimate cost of remediation require a number of assumptions that are inherently difficult to make, and the ultimate outcome may be materially different from current estimates. Moreover, because PSC Metals has disposed of waste materials at numerous third-party disposal facilities, it is possible that PSC Metals will be identified as a PRP at additional sites. The impact of such future events cannot be estimated at the current time.

20. Subsequent Events

Investment Management

Based on values at March 31, 2009, the Private Funds have received redemption notices of approximately 10% of the net assets under management as of March 31, 2009 for redemptions effective June 30, 2009.

Declaration of Distribution on Depositary Units

On May 4, 2009, the Board of Directors approved a payment of a quarterly cash distribution of $0.25 per unit on our depositary units payable in the second quarter of fiscal 2009. The distribution will be paid on June 3, 2009, to depositary unitholders of record at the close of business on May 22, 2009. Under the terms of the indenture dated April 5, 2007 governing our variable rate notes due 2013, we will also be making a $0.15 distribution to holders of these notes in accordance with the formula set forth in the indenture.

TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Partners of
Icahn Enterprises L.P.

We have reviewed the accompanying consolidated balance sheet of Icahn Enterprises L.P. and Subsidiaries (the “Partnership”) (a Delaware limited partnership) as of March 31, 2009, and the related consolidated statements of operations and cash flows for the three-month periods ended March 31, 2009 and 2008, and the consolidated statement of changes in equity and comprehensive income for the three-month period ended March 31, 2009. These consolidated interim financial statements are the responsibility of the Partnership’s management.

We were furnished with the report of other accountants on their reviews of the consolidated interim financial statements of Federal-Mogul Corporation, a subsidiary, whose total assets as of March 31, 2009, and whose revenues for the three-month period ended March 31, 2009 and the period from February 29, 2008 (date of consolidation) through March 31, 2008, constituted $6.9 billion, $1.3 billion and $0.7 billion, respectively, of the related consolidated totals.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews and the report of other accountants, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Partnership as of December 31, 2008, and the related consolidated statements of operations, changes in equity and comprehensive income, and cash flows for the year then ended (not presented herein); and in our report dated March 4, 2009 (except for Note 1 related to the effect of the adoption of SFAS No. 160 and the reformatted consolidated financial statements, as to which the date is August 4, 2009), we expressed an unqualified opinion on those consolidated financial statements. Our report made reference to the report of other auditors as it relates to amounts included for Federal-Mogul Corporation, a subsidiary, and contained explanatory paragraphs relating to the retrospective application of SFAS No. 160 effective January 1, 2009, reformatted consolidated financial statements, and the change in method of accounting for its investments with the adoption of SFAS No. 157 and SFAS No. 159 in 2007.

In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2008, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ GRANT THORNTON LLP

New York, New York
May 6, 2009 (except for Note 1 related to
the reformatted consolidated interim financial
statements, as to which the date is August 4, 2009)

TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Federal-Mogul Corporation

We have reviewed the consolidated balance sheet of Federal-Mogul Corporation and subsidiaries as of March 31, 2009, and the related consolidated statements of operations and cash flows for the three-month periods ended March 31, 2009 and 2008, included in its Form 10-Q for the quarter ended March 31, 2009 (not presented herein). These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Federal-Mogul Corporation and subsidiaries as of December 31, 2008, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for the year ended December 31, 2008 (not presented herein) and in our report dated February 24, 2009, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph for the application of AICPA Statement of Position 90-7, Financial Reporting by Entities under the Bankruptcy Code and a change in method of accounting for pensions and other postretirement plans in 2006 and tax uncertainties in 2007. As described in Note 1 to the unaudited consolidated interim financial statements of Federal-Mogul Corporation included in its Form 10-Q for the quarter ended March 31, 2009, on January 1, 2009, Federal-Mogul Corporation and subsidiaries changed its method of accounting for noncontrolling interests on a retrospective basis resulting in revision of the December 31, 2008 consolidated balance sheet. We have not audited and reported on the revised balance sheet reflecting the change in the method of accounting for noncontrolling interests.

/s/ Ernst & Young LLP

Detroit, Michigan
May 5, 2009

TABLE OF CONTENTS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations is comprised of the following sections: