Good morning, and welcome to the Icahn Enterprises, L.P. Q2 2013 Earnings Call, with Felicia Buebel, Assistant General Counsel; Dan Ninivaggi, President; and SungHwan Cho, Chief Financial Officer. I would like to hand the call over to Felicia Buebel, who will read the opening statements.

Good morning. 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 include certain non-GAAP financial measures. And now, I'd like to turn the program over to our President and Chief Financial -- Chief Executive Officer, Dan Ninivaggi.

Thanks, Felicia. Good morning and welcome to the Second Quarter 2013 Icahn Enterprises Earnings Conference Call. Joining me today are SungHwan Cho, our Chief Financial Officer; and Keith Cozza, our Executive Vice President. I'd like to begin by providing some brief highlights for the quarter. Sung will then provide an in-depth review of our financial results and the performance of our business segments. We'll then be available to address your questions. Icahn Enterprises' net income for the second quarter was $54 million or $0.48 per depositary unit, compared to net income of $257 million or $2.37 per unit in the prior year period. For the first 6 months of 2013, the company had net income of $331 million or nearly $3 per depositary unit versus net income of $306 million or $2.93 per depositary unit in the first 6 months of 2012. Our indicative net asset value per unit has increased from $57 at the beginning of the year to $71 per unit at July 31. Our investment funds had a return of 6.7% year-to-date through June 30. Subsequent to the end of Q2, the funds returned 6.2% in July with year-to-date return to 13.3%. Our investment segment return has been driven by several of our large core equity positions including Herbalife, Netflix and Chesapeake. In our energy segment, performance was solid at both CVR Refining and CVR partners. Although CVR Refining has now seen the impact of narrowing crack spreads and higher cause of renewable identification numbers or RINs, the Coffeyville and Wynnewood refineries had strong operational performance with record throughput at Wynnewood for the quarter. In addition, RIN prices have recently declined significantly from peak levels several weeks ago. Federal-Mogul had a solid quarter, considering the continued weak environment in Europe and lower commercial vehicle production globally. In…

Thanks, Dan. I will begin on Slide 4, briefly reviewing our consolidated results for Q2 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 2013 was $54 million compared to income of $257 million in the prior year period. Year-to-date, net income attributable to Icahn Enterprises increased from $306 million to $331 million. As you can see on Slide 5, the change in Q2 net income from prior year was primarily due to the performance of the investment funds, and the fact that Q2 2012 benefited from a release of a tax valuation allowance. Comparing year-to-date net income, the primary drivers were the inclusion of CVR Energy for the full period and the release of a tax valuation allowance in 2012. We ended Q2 with consolidated cash and cash equivalents of approximately $3.3 billion and our direct investment and the investment funds was $2.5 billion. I will now provide more detail regarding the performance of our individual segments. Our investment segment had a loss attributable to Icahn Enterprises of $72 million for Q2 2013 due to negative performance of our direct investment in the investment funds during the quarter. The investment funds had a negative growth return of 2.8% for Q2 2013 compared to a positive 5.2% for the prior year period. During Q2 2013, the fund's net equity exposure was 36% compared to 13% at the end of 2012. The fund's long equity exposure had a 1% return for the second quarter, while the fund's short equity exposure had a negative return of 4%. The fund's net credit exposure at the end of Q2 2013 was approximately 8% and generated a return of under 1%. As of June 30, 2013, our investment…

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

I'd like to start to talk a little bit about just the overall M&A environment. Just kind of putting aside your current pursuits. Relative to Q1, are you guys seeing more active engagement? Or has kind of like the volatility that we saw in June, tempered things a little bit at this point?

I think we're seeing sort of steady progress on that front. I think the volatility hurts, but I think people are more confident that -- with the tail risk, so we're seeing steady improvement in the overall M&A environment and expect that it will accelerate as the economy improves.

Okay. And perhaps related to that, how much actually debt capacity do you have and the ability to go after some of the larger targets and stuff?

We don't really want to disclose the amount of tech capacity we really have. Obviously, there a lot of sources. Are you talking about both within IEP and then within the hedge funds, right?

That is correct, yes.

Right. So I would just say that we have ample capacity to pursue larger targets and I don't want to put a number on it.

Okay. No, good, that's fine. So maybe related to the kind of the M&A stuff. Can you maybe talk a little bit about the exit side of things? Like you've got a pretty solid portfolio going in and it looks like operating fundamentals, at least for a large part portion of your portfolio, things are on the upswing. Now, is there a certain window that's ideal for exiting and stuff? Or as if rates were to rise or suddenly start rising that presents more of a difficulty in maybe moving some of these properties and things? And then maybe related to that, how do you see the portfolio looking out maybe 12 months from now? Any changes there?

Yes, so look, we see ample synergistic M&A activity in most of our operating segments. So we have our return thresholds, if we believe that we can participate by being a consolidator and pursuing M&A on our own and it hits our return threshold, we'll do it. And right now, we see a lot of opportunities for that within the existing operating segments. Of course we'll balance the risk and the return over time and at the appropriate time, we'll get out. But right now, I'd say that we see more opportunity to build the segments than to sell any of our existing operating subs.

Okay, I appreciate that. And then maybe hoping for a little bit more color on the kind of the current environment and the activist strategy. I mean, you guys have been doing really, really well with that. But as the market continues to trend higher, are you seeing more resistance from companies who are simply kind of benefiting from this rising market that maybe you guys are a little less effective in the current environment? Or at least face more challenges or obstacles?

Yes, I think Carlos has talked publicly a lot over the last 6 months that in an environment where capital is relatively cheap, where organic growth is relatively limited, there should be a lot more synergistic M&A activity than there has been. Capital markets are wide open, debt markets have been somewhat volatile recently but are still very, very strong. So we're seeing -- I think, Carl would say he's seeing more opportunities now than he ever has. And that's in part why we're so active. We're seeing it on our existing operating segments as well. So we don't see that declining anytime soon. We think this is a multiyear kind of thing. And so, we're very active.

That sounds good. I mean, we've definitely been hearing a lot about you guys in the news. So maybe turning to the Energy segment, I guess the stock has come in a little bit, with the crack spreads and kind of the bank WTI differential narrowing, kind of what is your outlook there? Are we kind of now back at more normalized operating environments or level? Or do you kind of see that kind of some of the pullback in the spreads were just more of a short-term thing?

Yes. So look, stepping back from it, we think it's fundamentally. The increased crude production in North America will benefit CVR and other mid-continent refiners. There will continue to be bottlenecks of crude in the mid-continent, but it's going to fluctuate quarter-to-quarter. I mean, there's going to be some volatility in it. Right now that's -- the reason that the Brent TI differentials have narrowed is really a result of pipeline -- pipelines coming in. So outflow capacity out of Cushing has outpaced inflow of pipelines into Cushing. And so you're seeing a narrowing of cracks out of differentials. If you look at the futures, the Brent TI futures, you see the crack spread or the differential widening over the next 12 months. So we think it's -- now it's bottoming out here, in the back half of the year and that differentials will increase going into 2014. That ultimately, the differential will gravitate towards the transportation cost of crude of the marginal transportation cost of crude out of the mid-continent, which is basically Railcar. And so we think that, that differential, longer-term, will be in the $7, $8 to $10, $12 range. But there will be fluctuations quarter-to-quarter, or even year-to-year. But we think the underlying fundamentals are very strong for the long term. And keep in mind too that we were very impacted by this RINs issues in the first half of the year. And that is -- who knows when and if there'll be a regulatory or legislative fix to that, but that's been a drag on earnings and we think longer term that'll be resolved as well.

Okay. And in just one other part of the refining business, kind of it seems like your throughput is around roughly 200k barrels per day, now that seems -- that's a little bit above your official rated capacity and I assume part of that is kind of a mix that's going through, but are those levels kind of sustainable or should they be coming in a little bit?

Again, we -- last year, we just got through a couple of big turnarounds, right? So both our refineries went through turnaround, so the throughput will be a little bit better right after turnaround then it'll be over 4-year cycle. But we think the operating -- I mean, CVR has tremendous operating performance. If you compare it to most other refiners, our operating costs per barrel, very, very strong, your operational performance has been great. They've invested hundreds of millions of dollars into the refineries over the last several years. We've got a very good synergies at Wynnewood since the acquisition. And so I think you're going to see their throughput always outperformed their peers. But it'll be up and down. I mean, refineries go down for reasons. We've had a couple of outages from time to time. We get back on our feet very quickly. But over time, you'll see it gravitate more towards the nameplate capacity, which is 150,000 -- 185,000 barrels. So that's probably what you'll see over the long term, but their operating performance has been good for a long period of time.

[Operator Instructions] Our next question comes from the line of Andrew Berg from Post Advisory Group.

A couple of quick questions. One is housekeeping. Did you guys ever disclose what the sales price was from River Palms?

No. But you're familiar with that property. It's a $5 million range, $5 million to $6 million range.

Okay. And then with respect to WestPoint, can you just go a little bit more detail, you said you've got -- you're optimistic because you're going to be adding some brands, can you just flush that out a little bit more, what are you adding and help me understand the optimism a little bit better?

Okay. So earlier in the year or last year, we talked about kind of continuing to rationalize the business. For the past 3 years, that really meant rationalizing the manufacturing footprint and the cost structure. And over the last 6 months or so, it's been more about rationalizing the customer base and the product portfolio, focusing in on higher margin customers and higher margin products. And so part of that has been, we've gotten some licensing deals on brands like Southern Tide or under the Canopy and a few other brands. Using our own house brands a little bit more effectively and focusing in on customers where there's better alignment, strategic alignment. So that would be sort of deemphasizing commodity products and very high volume, low margin customers and focusing higher on the value chain. And so far, that's worked pretty well, although we've been disappointed on the sales. The sales backlog hasn't been a strong as we'd like. We think, given that the housing market is somewhat coming back somewhat, that should be a bit of a tailwind. And these things do take some time to get traction. You just don't rollout a brand and then in 6 months later, you see it in sales. It takes time. We're very happy with the management team there. I think they're doing a great job. And we're confident in it longer term. But again, we're keeping an eye on that sales backlog to make sure the strategy stays on track.

We currently have no further questions in the queue.

All right. Well, thank you very much. And it's been a solid first half of the year and we look forward to even better second half. Take care.