Good morning, and welcome to the Icahn Enterprises L.P. Q2 2015 Earnings Call with Andrew Langham, General Counsel; Keith Cozza, President and CEO; and SungHwan Cho, Chief Financial Officer. I would now like to hand over the call to Andrew Langham, who will read the opening statement.

Thank you. The Private Securities Litigation Reform Act of 1995 provides a 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. And now, I'd like to hand it over to Keith Cozza, President and CEO.

Thanks, Andrew. Good morning, and welcome to the second quarter 2015 Icahn Enterprises earnings conference call. Joining me on today's call is SungHwan Cho, our Chief Financial Officer. I would like to begin by providing some brief highlights. Sung will then provide an in-depth review of our financial results and the performance of our business segments. We will then be available to address your questions. Net income attributable to Icahn Enterprises for the second quarter of 2015 was $212 million or $1.68 per LP unit compared to an adjusted net income after adding back the loss on extinguishment of debt of $520 million or $4.32 per LP unit in the prior-year period. Adjusted EBITDA attributable to Icahn Enterprises for the second quarter of 2015 was $619 million compared to $883 million in the prior-year period. Our Investment Funds earned a return of 3.9% in the second quarter of 2015 compared to 10.7% in the prior-year period. Second quarter performance was driven by gains in our core long equity positions, as well as positive performance from various hedging activities. Year-to-date through June 30, 2015, the funds have earned a return of 8.4%. Federal-Mogul had record sales of $2 billion for the second quarter of 2015, an increase of 16% in constant dollars compared to the prior-year period. Federal-Mogul's Powertrain division maintained strong performance in the quarter with revenue increasing 12% on a constant dollar basis compared to the prior-year period. Powertrain's revenue reflects the inclusion of TRW's engine valve business, which closed in February of this year, as well as organic growth. Subsequent to quarter-end, the Powertrain division closed on phase 2 of the acquisition of TRW's engine valve business, which included the purchase of engine component plants located in Tennessee and Thailand. Federal-Mogul's Motorparts division reported sales growth driven by…

Thanks, Keith. I will begin by briefly reviewing our consolidated results for the second quarter of 2015, and then highlight the performance of our operating segments and comment on the strength of our balance sheet. Net income attributable to Icahn Enterprises for Q2 2015 was $212 million or $1.68 per LP unit, compared to adjusted net income after adding back the loss on extinguishment of debt of $520 million or $4.32 per LP unit in the prior-year period. Adjusted EBITDA attributable to Icahn Enterprises for Q2 2015 was $619 million compared to $883 million in Q2 2014. As you can see on Slide 5, most of the decrease from the prior year is tied to the performance in the Investment segment in the respective periods. I will now provide more detail regarding the performance of our individual segments. Our Investment segment had a gain attributable to Icahn Enterprises of $176 million for Q2 2015. The Investment Funds had a return of 3.9% in Q2 2015 compared to a return of 10.7% for Q2 2014. Long positions had a positive 5.5% return for the current quarter, while short positions and other expenses had a negative performance attribution of 1.6%. Since inception in November 2004 through the end of Q2 2015, the Investment Funds gross [ph] return is 258% or 13% annualized. The Investment Funds continue to be significantly hedged. At the end of Q2 2015, net long exposure was 3% compared to 14% at the end of 2014. IEP's investment in the funds was $4.6 billion as of June 30, 2015. And now to our Energy segment. For Q2 2015, our Energy segment reported net sales of $1.6 billion and consolidated adjusted EBITDA of $230 million compared to net sales of $2.5 billion and consolidated adjusted EBITDA of $215 million for…

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

I'd actually like to start -- touch base first just on the liquidity. I noticed that the cash at the holding company level is down to about $230 million or so. That's the lowest level it's been in some time. How are you guys thinking about that in terms of going forward? What is the right level and maybe are we looking at maybe raising some more capital if you continue to see some interesting opportunities out there?

Yes. Hi, Dan, it's Keith. Yes, so I think it's -- we had 2 -- as we discussed, 2 very big acquisitions that obviously took down the holding company cash and we acquired the Auto Plus assets or the formerly known as Uni-Select assets and then we acquired Ferrous Resources, so that was the reason for it. I don't -- I wouldn't say -- just to answer your question, I don't think we have plans -- if you're asking about like equity issuances or anything like that, we certainly don't see that as being necessary. That will always be price dependent, but we think we'll see that cash balance go back up over the next quarter or so from the typical dividend upstreams. I think you're pretty familiar with them, but we have a number of cash flows that are upstream from CVI and American Railcar Industries. And then we're also going to -- we paid for the Auto Plus assets fully in cash. That's a business that is highly concentrated on inventory and accounts receivable. So it's frankly, ripe for probably some debt at that level of the capital structure for our Auto Plus business and that could really -- that could also result in some cash flow up top as well.

So we see it rebuilding over the next couple of quarters. What's the right level? We've always talked historically of the $500 million level as kind of a base level and more -- if we're not finding lots of opportunities, it's gone up, as you know, in history over $1 billion. But we're generally seeing a lot of good opportunities in the marketplace.

That's helpful. And then so I guess, maybe on the topic of opportunities. It seems like the market for M&A activity seems to be picking up a little bit. Would you agree with that? And in the past, we've -- in our previous conversations, we've talked about that maybe M&A activity has been a little bit light. So do you think we're potentially entering a cycle where we may see some more activity and opportunity?

100%. From IEP's perspective, obviously, we agree -- I mean, we bought 2 companies this quarter alone. We have a bunch of stuff that we're looking at in the pipeline at our subsidiary levels of tack-on acquisitions. So we see the M&A activity very robust. From an industry -- from an overall global perspective or at least the U.S. perspective, we were recently looking at data and this year, M&A activity is on pace to exceed $2 trillion, double what it was 5 years ago. So there's a lot of M&A going on. We're picking our spots where it make sense, where we either have industry expertise or where we already have a company or a segment where it could be -- where we could expand that segment.

So is that maybe one of the things is that the investment fund continues to have or take a relatively cautious outlook? So is maybe the M&A can be a sign of we're maybe nearing the market top at this point? Or are there certain segments of the market that you guys are seeing that are maybe much more interesting than perhaps other segments that maybe overvalued?

I would say -- I have to break the question into 2 components. From the 9 operating segments that we have, we have, I would say, more of a balanced approach because if we already have a company and we're doing a tack-on acquisition, we may be paying a multiple that is higher than we would normally pay. But their pro forma synergies and things of that nature, it may still make a lot of sense for us and that gives us a lot of cushion on the downside or comfort level in what we're paying. At the investment fund level, I think we're finding opportunities in certain segments. Obviously, there are certain segments that are beaten down pretty substantially. And so we've been pretty aggressive in building positions in a couple of opportunities that will be disclosed over the next quarter or so. So we are finding segments that are beaten down, but obviously, we're very cautious on overall market levels. And hence, the -- Sung's reference earlier to net equity exposure in the single digits. Very, very cautious on -- and our Chairman has been very vocal about that over the last quarter in seeing various aspects of the market in bubble state.

Fair enough. That's helpful. And then maybe kind of just a final question here. Just any thoughts on maybe how the market environment might change as we potentially enter a rising rate environment here? Or would it simply be business as usual for you guys? Do you see anything -- any maybe slight change in strategy or anything like that going forward?

I don't think -- you will not see a change in the strategy of IEP. How the market reacts to higher interest rates? Again, I -- our Chairman has been very vocal on we'd be very, very cautious, especially in the high-yield debt space, as to how that reaction will be absorbed by the market in a rising rate environment. Again, we've been pretty vocal about credit spreads for low-quality corporate companies, and there could be a problem there. But I don't think it will change our approach and I think we've positioned ourselves from an IEP perspective to -- we hope to be able to make market -- make money in a rising rate environment or lower rate environment. So we're cautiously optimistic, but very, very cautious on -- the answer is we don't know what the reaction will be, but we're -- we have worries.

Fair enough. And then maybe just a quick tack-on. Is there anything that would make you less cautious like I guess, maybe -- that maybe you would get a little more bullish or optimistic about what's out there or a change in stance?

It's hard, Dan, I mean, there's -- for us it always comes down to risk-adjusted returns, risk reward, to say it simply. I suppose if we -- we see a lot of risks. I'm not going to name every one of them, but they are the popular risks that everybody talks about in China, in the high-yield market, rate environments. We see a lot of risks. And so simply put, paying 20x P/E ratios when weighing those risks is not, in our opinion, a great risk-reward return. So if we see those risks subside or valuations come in to reflect the better risk-return ratio, then we could -- we would probably adjust accordingly, but it's hard to say what would cause us to adjust. I think the single-digit equity exposure speaks for itself on our view of the market.

And I am currently showing no more questions in queue.

Okay. Thanks, everybody. We look forward to talking to you in November for the third quarter result. Have a good day.