Good morning, and welcome to the Icahn Enterprises LP Q1 2018 Earnings Call with Jesse Lin, General Counsel Keith Cozza, President and CEO and Sung hwan Cho, Chief Financial Officer. I would now like to hand over the call to Jesse Lin, who will read the opening statements.
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. A reconciliation of such non GAAP financial measures to the most directly comparable GAAP financial measures can be found in the back of this presentation. I'll now turn it over to Keith Cozza, our Chief Executive Officer.
Thanks, Jesse. Good morning and welcome to the Q1 2018 Icahn Enterprises earnings conference call. Joining me on today's call is Sung Hwan Cho, our Chief Financial Officer. I'll 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'll then be available to address your questions. For Q1 2018, we had net income attributable to Icahn Enterprises of $137,000,000 or 0 point $0.77 per LP unit compared to a net loss of $18,000,000 or $0.12 per LP unit in the prior year period. Adjusted EBITDA attributable to Icahn Enterprises for Q1 2018 was $551,000,000 compared to 421,000,000 dollars for Q1 of 2017. Our investment funds earned a return of 5.3 percent in Q1 of 2018 compared to a negative return of 2.7% for the prior year period. Our positive performance in Q1 2018 was driven by net gains in our core long equity positions as well as gains from single name and index short positions.
We increased our net long exposure to 18% as of the end of Q1 compared to 14% at the end of 2017. Net sales and service revenues for our automotive segment in Q1 of 2018 were $2,700,000,000 compared to $2,600,000,000 in the prior year period. The increase was primarily due to acquisitions at Icahn Automotive Group and favorable foreign exchange rates at Federal Mogul. In our Energy segment, our Q1 twenty 18 net sales were $1,500,000,000 and consolidated adjusted EBITDA was 138,000,000 dollars CVR Refining had a solid first quarter led by strong crack spreads, while CVR Partners results were hampered by some downtime at our City, Evansville and St. Louis properties.
Subsequent to quarter end, we announced 2 transactions. First, announced the sale of Federal Mogul to Tenneco Inc. For a total transaction value of approximately $5,400,000,000 All of Federal Mogul's outstanding debt will be assumed by Tenneco. At closing, IEP will receive $800,000,000 in cash and 29,500,000 shares of Tenneco stock, valued at $1,600,000,000 at the time of announcement. Tenneco has the option to reduce the number of shares we receive at closing by 7 point 3,000,000 shares and increase the cash consideration proportionately by $400,000,000 As a reminder, IEP acquired a controlling interest in Federal Mogul in 2,008.
Tenneco has announced its intention to separate the combined businesses into 2 independent publicly traded companies that will establish an aftermarket ride performance company and a powertrain technology company. We believe the combination gives the pro form a companies the scale to compete effectively in these markets. We will be the largest shareholder post close and have representation on the Board. We would like to thank Reiner Jukestock, Brad Norton and the entire Federal Mogul team for all their hard work and efforts creating value over the years. 2nd, we announced the sale of Tropicana Entertainment for approximately $1,850,000,000 in cash to Eldorado Resorts and GLPI.
We acquired a controlling interest in Tropicana in 2010 after years of mismanagement and lack of capital investment in the properties. Since acquiring Control, we installed a new management team and reinvested every single dollar of profits back into the business. We'd like to thank Tony Rodeo and the entire management team at Tropicana for their years of hard work to establish Tropicana as one of the most successful regional gaming companies in the United States. We expect both of these transactions to close in the second half of twenty eighteen subject to various closing Both transactions are illustrative of our strategy at Icahn Enterprises, where we seek to acquire undervalued assets, nurture, guide and improve their condition and operations and ultimately develop them into more valuable businesses, which creates value for our unitholders. With that said, let me turn it over to Saum.
Thanks, Keith. I will begin by briefly reviewing our consolidated results and then highlight the performance of our operating segments and comment on the strength of our balance sheet. In Q1 2018, net income attributable to Icahn Enterprises was $137,000,000 compared to a net loss of $18,000,000 in the prior year period. As you can see on Slide 5, in Q1 2018, the performance of our investment funds was the primary driver of net income in the quarter. Adjusted EBITDA attributable to Icahn Enterprises for Q1 2018 was $551,000,000 compared to $421,000,000 in Q1 2017.
I will now provide more detail regarding the performance of our individual segments. Our investment segment had a gain attributable to Icahn Enterprises of $161,000,000 for Q1 2018. The investment funds had a positive return of 5.3 percent in Q1 2018 compared to a negative return of 2.7% for Q1 2017. Long positions had a positive performance attribution of 3% for the current quarter, while short positions and other expenses had a positive performance attribution of 2.3%. Since inception in November 2004 through the end of Q1 2018, the investment fund's gross return is 132% or approximately 6.5% annualized.
The investment funds continue to be significantly hedged. At the end of Q1 2018, net long exposure was 18% compared to net long exposure of 14% at the end of 2017 and net short exposure of 110% at the end of Q1 2017. IEP's investment in the funds was $3,200,000,000 as of March 31, 2018. And now to our Energy segment. For Q1 2018, our Energy segment reported revenues of $1,600,000,000 and consolidated adjusted EBITDA of $133,000,000 for the prior year period.
CVR Refining had a solid first quarter performance, led by strong crack spreads, hedging gains, a reduction to its RINs obligation and lower RINs prices. CVR Refining reported Q1 2018 adjusted EBITDA of $126,000,000 compared to $115,000,000 in the prior year period. Combined crude oil throughput was approximately 178,000 barrels per day for the quarter and was negatively impacted by an extended outage at our Coffeyville refinery. Refining margin adjusted for FIFO impact, a non GAAP financial measure was $13.77 per barrel in Q1 2018 compared to $11.54 per barrel in the prior year period. CVRR declared a distribution of $0.51 per unit for the quarter.
CVR Partners reported Q1 2018 adjusted EBITDA of $13,000,000 compared to $21,000,000 for Q1 2017. CVR Partners' Coffeyville fertilizer plant performed extremely well during Q1 2018 posting on stream rates close to 100%. While the Coffeyville plant performed well, operations at East Dubuque were interrupted by 12 days of unplanned downtime. Average prices for UAN and ammonia were $153 per ton and $3.22 per respectively in Q1 2018 compared to $160 per ton and $308 per ton respectively for the same period in 'seventeen. Management anticipates a strong application period with solid demand driven by lower than normal customer inventory levels and an estimated 88,000,000 planted corn acres.
Now turning to our Automotive segment. Our Automotive segment's Q1 2018 net sales and service revenues were $2,700,000,000 up 6% from the prior year period. The increase is primarily due to sales and service volume increases from acquisitions as well as favorable effect of foreign currency exchange. Federal Mogul on a standalone basis reported Q1 net sales of $2,100,000,000 compared to $2,000,000,000 in the comparable prior year period. The increase was due to favorable effect of foreign currency and higher OE sales offset in part by lower aftermarket sales in the U.
S. And EMEA. Operational EBITDA in Q1 2018 was $205,000,000 down $18,000,000 from the prior year period. At ICON Automotive Group, Q1 2018 operating revenues were approximately $686,000,000 compared to $637,000,000 in Q1 2017. The increase was primarily due to 2017 acquisitions.
Now turning to our railcar segment. Our railcar segment had railcar shipments in Q1 2018 of 8 11 railcars, including 195 railcars to leasing customers compared to 11 51 railcars for the prior year period, of which 602 railcars were to leasing customers. As of March 31, 2018, ARI had a backlog of 3,144 railcars, including 259 railcars for lease customers. According to the Railway Supply Institute, the railcar manufacturing backlog was approximately 55,000 railcars at the end of Q1 2018. 79% of the current industry backlog is comprised of tank cars and covered hopper cars, the 2 primary railcar types manufactured and leased by our railcar segment.
Total manufacturing revenues for Q1 2018 increased by $3,000,000 or 5% as compared to the prior year period. The increase was primarily due to an increase in shipments to non leasing customers. The segment's railcar leasing revenue declined in Q1 2018 as compared to the prior year due to the sale of ARL in 2017. The lease fleet was 13,122 railcars the end of Q1 2018 down from 46,335 railcars at the end of Q1 2017 due to the sale of the ARL railcars. Adjusted EBITDA attributable to IEP for the railcar segment was $23,000,000 for Q1 2018 compared to $88,000,000 in the prior year period.
Now turning to our gaming segment. Our Gaming segment continues to perform well with significant gains at core properties within Tropicana Entertainment. For Q1 2018, Tropicana operating revenues increased by 3% from the prior year period and consolidated adjusted EBITDA increased 9% to $49,000,000 These gains were primarily driven by the performance at the Evansville and St. Louis properties. Now turning to food packaging.
Net sales for Q1 2018 increased by $7,000,000 or 8% compared to the prior year. The increase was primarily due to the inclusion of recent acquisitions. Consolidated adjusted EBITDA was $11,000,000 in Q1 2018, which was $1,000,000 below the prior year period. Gross margin as a percent of net sales was 24% for Q1 2018, which was consistent with the prior year. And now to our Metals segment.
Net sales for Q1 2018 increased by $15,000,000 or 15% compared to the prior year. The net sales increase was driven by higher selling prices and higher volumes for most product lines with ferrous net sales accounting for a majority of the increase. Ferrous shipment volumes increased due to improved demand from domestic steel mills and improved flow of raw materials into the recycling yards driven by increased market 18 compared to $7,000,000 in the prior year period. Gross margin has improved due to continued focus on disciplined buying higher pricing of non ferrous auto residue, improved market pricing and by continued efforts to bring processing costs in line with volume and market pricing. And now to our Real Estate segment.
Real Estate operating revenues were $17,000,000 in Q1 2018, which was slightly down from the prior year period. Revenue from our real estate operations for both Q1 2018 and Q1 2017 were substantially derived from income from club and rental operations. The Real Estate segment generated $15,000,000 of adjusted EBITDA in Q1 2018. Now turning to Mining segment. Our Mining segment has been concentrating on sales in Brazil.
In Q1 2018 sales decreased to $20,000,000 compared to $33,000,000 in the prior year. Consolidated adjusted EBITDA was $1,000,000 for Q1 2018 compared to $13,000,000 in the prior year period. The decline in Q1 performance was due to declines in both iron ore price as well as volumes. Now turning to our home fashion segment. Q1 2018 net sales for our home fashion segment were down 11% as compared to Q1 2017 due to lower sales volumes.
Adjusted EBITDA was a loss of $1,000,000 which was consistent with the prior year period. Gross margin as a percentage of net sales was 14% for Q1 2018 as compared to 15% for Q1 2017. Now I will discuss our liquidity position. We maintain ample liquidity at the holding company and at each of our operating subsidiaries to take advantage of attractive opportunities. We ended Q1 2018 with cash, cash equivalents, our investment in the investment funds and revolver availability totaling approximately $5,500,000,000 Our subsidiaries have approximately $1,100,000,000 of cash and $1,100,000,000 of undrawn credit facilities to enable them to take advantage of attractive opportunities.
In summary, we continue to focus on building asset value and maintaining ample liquidity enable us to capitalize on opportunities within and outside of our existing operating segments. Thank you. Operator, can you please open the call for questions?
Thank you. We'll now take questions as part of our Q and A Our first question comes from Dan Fannon of Jefferies. Your line is open.
Good morning. Just wanted to touch base on the 2 recent about that going forward?
Yes. Hi, Dan. Yes, I think it'll some will go to holding the holding company to kind of replenish holding company cash and a good portion of it will go into the investment segment. We're always on the lookout for additional tack on acquisitions at some of our existing segments and we're looking at a bunch of other stuff that could become new segments if the price is right. But in a vacuum with nothing in the pipeline, it would go into the investment segment.
Understood. And then in terms of just kind of where the general portfolio sits with the portfolio companies, obviously, you talked a little bit about there being the potential for some incremental investment. How should we think about just the overall strategy maybe where things sit in the sense that is everything for sale at the right price at this point? Obviously, there were no exits for some time and then there's obviously a spate of them recently. How should we think about that?
And then any color there that you can provide on the portfolio companies from a strategy perspective?
Yes, sure. Yes, I think that's a fair statement what you made. I mean, at the right price, anything is for sale, but that's not something new. That's something that's been part of our strategy for the last 20 years. The inconsistency in asset monetization is really just a derivative of market multiples or market perceptions of value on our particular segments.
Our strategy and job is to increase the value of our portfolio companies by through a number of different means, whether it's tack on acquisitions, improving the cost structure, putting in the right management team, etcetera. Once we we want to just to keep improving value, whether we own it for 30 years or 3 years is we're somewhat indifferent. We're going to keep creating the value and at some point market multiples get to a point where we think that's a fair exit price and we'll monetize those assets. It just happened that we've had a few over the last couple of years with Federal Mogul, Tropicana, American Railcar Leasing and the former Fountain Blue assets over the last 18 months to 24 months. But then prior to that, to your point, we've just been kind of operating the businesses for multiple year periods trying to create that value.
So it takes time. It's a long term strategy. We don't live quarter to quarter. But to summarize, yes, I would agree with you. Everything is for sale at the right price.
And you'll see over the next few years, new things come new segments being you look at the history of Icon Enterprises over the last 20 years, we've sold segments, we've added new segments and I expect that to continue. It's part of the model.
Fair enough. And then maybe just a little bit more color. If I were to ask about the level of conversations that you guys have been having, would you say it's more than in the past at this point in terms of with others that maybe are looking to acquire those properties from you guys? Or is it just kind of there's a normalized level or it truly is just it's really dependent on the at a very specific point in time?
Yes, it's just dependent. I mean, obviously, we have general conversations regarding the industries we're in on a somewhat regular basis with the typical bankers and potential buyers and sellers, etcetera. We're always on the prowl looking for things and people are making inquiry thoughts, but that's kind of normal course. I don't think there's any kind of difference in level. It's just really a matter of we just happened to connect with 2 transactions here where it made a ton of sense for both parties regarding Tenneco and Eldorado.
I mean, what we would refer to as a win win for both sides.
That's helpful. And then maybe one more quick question on the investment fund. Is there can you provide us an update in terms of just the management strategy there? The question here is alluding to at one point, obviously the Sargon portfolio was involved. I just wanted to kind of understand where things are generally from a management perspective of the funds and the assets?
Yes. Well, obviously, look, Carl is still the captain and is heavily involved in every investment decision, but we have a deep bench of portfolio managers. We recently added Nick Graziano, Courtney Mather has been here for 3 or 4 years now. Brad Icahn is consulting with us on a number of different names and we have a number of other younger analysts as well that are all generating ideas, but it all ties into the activist strategy. We've been pretty vocal about it over the last decade.
And at the end of the day, we're not we're never we have no idea where macro markets are going. We try to find undervalued situations where we can be the catalyst to unlock intrinsic value. And we're finding some decent opportunities over the last so far this year. I mean, you've seen Newell Brands was 1 and we're in a little thing with SandRidge. And so we're finding our spot we're finding pockets of where we think the risk reward is skewed and we think we can play a role in unlocking some of that value.
And so we're pretty optimistic about of the portfolio. But there's no shortage of idea generation amongst the management team.
Understood. That's helpful. That's it for me. Thank you.
Yes. Thanks, Dan.
I currently have no more questions in queue.
Okay. Thanks very much everybody. We'll look forward to speaking with you after the second quarter results. Thank you.