Good morning, and welcome to the Icahn Enterprises L.P. Q1 2014 Earnings Call with Jesse Lynn, Assistant General Counsel; Keith Cozza, President and CEO; and SungHwan Cho, Chief Financial Officer. I'd now like to hand the call over to Jesse Lynn, who will read the opening statement.

Good morning. The Private Securities Litigation Reform Act of 1995 provides the Safe Harbor for forward-looking statements we make in this presentation, including statements regarding our future performance and plans for our businesses and potential acquisitions. These forward-looking statements involve risks and uncertainties that are discussed in our filings with the Securities and Exchange Commission, including economic, competitive, legal and other factors. Accordingly, there is no assurance that our expectations will be realized. We assume no obligation to update or revise any forward-looking statements should circumstances change, except as otherwise required by law. This presentation also includes certain non-GAAP financial measures.

Good morning. Welcome to the First Quarter 2014 Icahn Enterprises Earnings Call. Joining me on today's call is SungHwan Cho, our Chief Financial Officer. I'd like to begin by providing some brief highlights. Sung will then provide an in-depth review of our financial results from the performance of our business segments. We will then be available to address your questions. Adjusted net income attributable to Icahn Enterprises for Q1 2014, after adding back the loss on extinguishment of debt with $92 million, or $0.77 per LP unit, compared to adjusted net income of $274 million, or $2.49 per LP unit in the prior year period. Adjusted EBITDA attributable to Icahn Enterprises for Q1 2014 was $356 million, compared to $618 million in Q1 of 2013. While the first quarter produced somewhat modest results compared to the standards we hold ourselves -- out for ourselves, we believe that the second quarter is off to a great start, with preliminary net income attributable to Icahn Enterprises of over $200 million for the month of April. Our Investment segment was essentially flat for the quarter in a volatile market, but year-to-date, the Investment Funds are now approximately 4% through the end of the April 2014. Q1 2014 results for Federal-Mogul improved from the prior year period, driven by strong conversion on higher sales and improved operating performance, particularly in their Powertrain division. Powertrain continues to gain market share in all regions in the quarter, and financial results of the aftermarket business, VCS have stabilized. Management is aggressively investing in Federal-Mogul's VCS product portfolio, improving distribution infrastructure and pursuing growth initiatives, including Federal-Mogul's most recent acquisitions for the Honeywell friction and Affinia chassis businesses. In our Energy segment, the refining and fertilizer MLP has had excellent operational performance in the first quarter. CVR Refining…

Thanks, Keith. I'll begin by briefly reviewing our consolidated results for Q1 2014 and then highlight the performance of our operating segments and comment on the strength of our balance sheet. In Q1 2014, net income attributable to Icahn Enterprises was a loss of $29 million. This is impacted by losses on debt extinguishment related to the refinancings completed in the quarter. Adjusted for the losses on data extinguishments are adjusted net income attributable to Icahn Enterprises was $92 million, compared to adjusted net income of $274 million in the prior year period. As you can see on Slide 5, Q1 2014 adjusted EBITDA attributable to IEP was $356 million, compared to $618 million in the prior year. Most of the decrease is tied to the decrease in the performance in the Investment segment and lower refining margins in the Energy segment. All the other operating segments showed improvement year-over-year. I will now provide more detail regarding the performance of our individual segments. Our Investment segment had income attributable to Icahn Enterprises of $5 million. For Q1 2014, the Investment Funds had a gross return of negative 0.4%, compared to positive 9.7% for Q1 2013. Long positions had a 10.5% return for the current quarter, while short positions and other expenses had a negative performance attribution of negative 10.9%. In April, the Investment Funds generated a return of 4.1% bringing year-to-date performance up to 3.7%, compared to 2.6% for the S&P 500. Since inception, in November 2004, through the end of Q1 2014, the Investment Funds gross return is 255%, or 14.4% annualized. We continue to maintain relatively low net exposures. At the end of Q1 2014, net equity exposure was 34%, compared to 13% at the end of Q1 2013. During the quarter, we contributed an additional $1 billion…

[Operator Instructions] Our first question comes from the line of Daniel Fannon from Jefferies.

So I just wanted to touch base on the highest level in terms of the activist strategy. In the past, we've kind of spoken about how it can be successfully applied in, in any environment. But, with the current market volatility since the last quarter and kind of growth going out of favor, somewhat to -- more towards value-oriented, how does that strategy change? I mean, do you start targeting different types of companies? Or is that -- it just kind of universal, you're always kind of looking what for a certain playbook?

Dan, it's Keith. I think the -- there is no one set of -- one specific strategy in any particular environment. I think, you're seeing a lot of -- we're finding opportunities across the gamut. We're actually looking at some distressed opportunities, and we are -- you saw on the first quarter, alone we're very active with eBay and Apple. So I don't think, there is one specific type of company or specific strategy when it comes to activism. There's different things work in different environments. We always -- It's always those going to be case specific. But we're finding no shortage of opportunities in deploying capital.

Perhaps touching a little bit on the Energy segments, we talked about, you guys mentioned, record throughputs in first quarter, but there were some challenges around the refining margin. Can you talk a little bit about your outlook for crack spreads? And then maybe your hedging strategy? How variable is that in terms of how much you guys hedge as a percentage on a forward basis your production?

Yes, so I'll take the second part first. This year, I think we have somewhere in the range, just north of 30 -- 30% hedged out for 2014, maybe a little bit higher than 30%. And we have our -- our goal is always going to be, and I think we've said this historically, to hedge anywhere between 30% and 40% of production, lock in kind of a base rate of EBITDA. And then we're going to kind of roll along with the markets on the remaining balance. So for '14, that's pretty much a lock down. For '15, we are still implementing our hedging strategy be obviously have certain targets on both the heating oil crack side and the gasoline cracks. So when they get to certain levels, that's when we layer them on. So as a base, if you're modeling it out, you can use 30% of the base kind of hedge of our production.

And then, Dan, I'd add to the first part of the question, our view on spreads. It's -- the regional spreads will vary depending on the balance of crude production, and the demand in each of the regions, and we continue to be bullish on the prospects of crude production in the U.S., especially crude, making its way to the mid-continent, which is where CVR operates. So we continue to be optimistic on that front.

So if I was to just maybe follow-on that, given that you guys are at the lower end of the amount that's hedged, it would appear that you guys would be bullish on spreads basically. I guess, why this thesis?

I think long-term, that these -- our thesis has not changed and that we've consistently said that 900,000 plus barrel -- incremental barrels of production are coming on every day year-over-year in the U.S., and it's got go to somewhere, and a lot of that going to get -- a lot of that supply is going to get trap, where our refiners are positioned, and so we should have long-term advantage to favorable purchases of WTI at a discount. As far as hedging 30% to 40%, we have 2 refineries. Refineries could -- you always are reading about refineries going down for maintenance or whatever it maybe, so you don't want to -- 40% maybe, a little higher than that, that's going to be the absolute top, just from a risk management point of view. I don't -- I'm not even saying, it's necessarily a bullish view on spreads, although, we're long-term bullish on our positioning in the marketplace. You can't -- if you hedged 80% and one of your refineries go down, I'm going to be making short.

That make sense. And then maybe one final question on kind of the Railcar segment. We've -- we're beginning to -- we're seeing a lot of demand there. It seems we're in the early stages or mid-stages of a bull cycle there, especially given kind of the outlook for U.S. energy production. I guess one of the questions I have there is, how far do you think we're into that cycle? It just seems demand is very strong and it will remain strong?

Yes, the demand is strong. I think you're continuing to see big orders being placed, especially in the covered hopper car side recently. On the tank car side, there is some guidance that, I think, the whole industry is waiting for in terms of the safety standards and any required retrofits on car designs. And so, we think there has been a slowdown of orders until all that gets cleared up. But it's all going to be driven by end demand, and for the tank car side, especially driven a lot by crude by rail. But backlogs continue to be at the highest levels in many, many years. And so we think, they'll -- there is still another wave of orders to come, when the regulations get finalized.

And I would add to that, Dan, to what Sung said and just tying into the statement I made earlier about, back to the incremental U.S. oil production, and the various bottlenecks kind of also reconciles into, as that supply continues to grow, there is only so much pipeline capacity. And so, we used to -- moving oil by rail will continue to grow with it. So to Sung's point, we do think, tied into that thesis, we have a ways to go here.

[Operator Instructions] And I see no further questions in the queue at this time.

Okay. Thanks, everyone. We'll look forward to talking to you during the -- at the second quarter results.

Thank you.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone have a good day.