Welcome to the Icahn Enterprises LP First Quarter 2015 Earnings Call with Jesse Lynn, General Counsel Keith Guza, President and CEO and Seung Won Cho, Chief Financial I will now turn the call over to Jesse Lin, who will read the opening statement.
Thank you. 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 includes certain non GAAP financial measures. I'll now turn it over to Keith Cozza, our Chief Executive Officer.
Thanks, Jesse. Good morning, and welcome to the Q1 20 15 Icahn Enterprises earnings conference call. Joining me on today's call is Sungwon 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. Adjusted net 2015 after adding back the loss on extinguishment of debt was $162,000,000 or $1.28 per LP unit compared to an adjusted net income after adding back the loss on extinguishment of debt of $92,000,000 or $0.77 per LP unit in the prior year period. Adjusted EBITDA attributable to Icahn Enterprises for Q1 2015 was $575,000,000 compared to $359,000,000 in Q1 of 2014. Our investment funds had a return of 4.3% in Q1 of 2015 compared to a return of negative 0.4% in the prior year period. Q1 performance was driven by gains from a number of our core long equity positions.
We continue to take a cautious view with respect to the global economy, which is reflected in the positioning of our investment portfolio. We ended the quarter with a net long exposure of just 4%. Q1 2015 sales for Federal Mogul were 1,800,000,000 in 12% on a constant dollar basis from Q1 of 2014. Powertrain's revenue reflects the inclusion of TRW's engine valve business, which was purchased in February of 2015, as well as increases in volume and market share gains in the quarter. Federal Mogul's Motor Parts offset by the loss of sales from their acquired divestiture of 2 facilities in the quarter.
The Motor Parts division continues to make progress in a number of key initiatives designed to accelerate growth and reduce costs. During the quarter, Federal Mogul successfully completed the shareholder common stock rights offering of $250,000,000 of which IEP invested approximately 230,000,000 dollars In our Energy segment, CVR Refining posted solid results operationally and financially for Q1 of 2015. Refining margins, which were low at the beginning of the year, gradually improved and continue to be favorable. Additionally, the fertilizer business is seeing strong customer demand for its UAN product in 2015. Our railcar segment had record quarterly railcar shipments in Q1 of 2015 and continues to build its lease fleet with approximately 42,000 railcars at the end of the quarter.
In our gaming segment, Tropicana had a strong operational quarter, especially at its Atlantic City property. Trop AC experienced higher gaming volumes as it benefited from the closure of competitors as well as from growth of its online gaming. With that, let me turn it over to Sung.
Thanks, Heath. I will begin by briefly reviewing our consolidated results for the Q1 of 2015 and then highlight the performance of our operating segments and comment on the strength of our balance sheet. In Q1 2015, our adjusted net income attributable to Icahn Enterprises after adding back the Enterprises after adding back the loss on extinguishment of debt was $162,000,000 or $1.28 per LP unit compared to adjusted net income after adding back the loss and extinguishment of debt of $92,000,000 or $0.70 per unit in the prior year period. Adjusted EBITDA attributable to Icahn Enterprises for Q1 2015 was $575,000,000 compared to $359,000,000 in Q1 2014. As you can see on Slide 5, the improvement from the prior year was primarily driven by the performance of the investment funds.
I will now provide more detail regarding the performance of our individual segments. Our investment segment had a gain attributable to Icahn Enterprises of $184,000,000 for Q1 2015. The investment funds had a return of 4.3% in Q1 2015 compared to a negative return of 0.4% for Q1 2014. Long positions had a positive 6% return for the current quarter, while the short positions and other expenses had a negative performance attribution of 1.7%. Since the inception in November 2004 through the end of Q1 2015, the investment funds gross return is 2 45% or 13% annualized.
The investment funds continue to be significantly hedged. As Keith mentioned, at the end of Q1 2015, net line exposure was 4% compared to 14% at the end of 20 And now to our Energy segment. For Q1 2015, our Energy segment reported revenues of $1,400,000,000 and consolidated adjusted EBITDA of $236,000,000 compared to revenues of $2,400,000,000 and consolidated adjusted EBITDA of $224,000,000 for the prior year period. Q1 results reflect the solid financial and operational performance of our fertilizer and petroleum subsidiaries. CVR Refining reported Q1 2015 adjusted EBITDA of $162,000,000 compared to $194,000,000 in the prior year period.
CVR Refining posted solid results operationally and financially for Q1 2015. Group 3 refining margins, which were extremely poor at the beginning of the year gradually improved and peaked at the end of February. Margins leveled off by the end of March, but continue to be favorable. CVR Partners reported Q1 20 15 adjusted EBITDA of $38,000,000 compared to $30,000,000 for Q1 2014. The fertilizer facility performed well in the quarter with on stream rates of 99% for the gasifier and nearly 98% for the UAN plant.
We also benefited from continued strong customer demand for UAN and favorable pricing during the quarter. For Q1 2015, average realized gate prices for UAN and ammonia were $2.63 per ton $5.53 per ton respectively, compared to $2.53 a ton $4.79 a ton respectively for the same period in 2014. Now turning Federal Mogul's Q1 2015 sales were $1,800,000,000 up 13% in constant dollars from Q1, 2014. Operational EBITDA was $140,000,000 in Q1, 2015 compared to $169 in Q1 2014. Q1 2015 operational 15 operational EBITDA was negatively impacted by $23,000,000 due to changes in foreign exchange rates and by $27,000,000 of costs related to strategic initiatives and integration of recent acquisitions in the Motorparts segment.
Federal Mogul's Power Train division maintained strong performance in the quarter with revenue of over $1,100,000,000 up 12% on a constant dollar basis from Q1 2014. The increase in powertrains revenue reflects the inclusion of TRW's engine valve business, which quarter. Operational EBITDA was $110,000,000 or 9.7 percent of revenue compared to $117,000,000 or 10.3 percent of revenue in Q1, 2014. Operational EBITDA was impacted unfavorably by $15,000,000 of negative foreign currency movements during the quarter. Federal Mobile's Motorparts division reported revenue of $773,000,000 in Q1, 2015 compared to $720,000,000 in Q1, 2014, an increase of 7% or 15% on a constant dollar basis.
The increase was driven by sales from chassis and Honeywell brake component acquisitions net of the loss of sales from required divestitures of 2 facilities in the quarter. Motorparts recorded operational EBITDA of $30,000,000 in Q1 2015 compared to $52,000,000 in Q1 2014. The results for the quarter reflect the ongoing investment in the business, including $27,000,000 of incremental costs associated with strategic initiatives and the integration of Affinia and Honeywell acquisitions. Additionally, operational EBITDA was further impacted negatively by $8,000,000 related to foreign currency movements. During the quarter, Federal Mogul successfully completed a shareholder common stock rights offering of $250,000,000 of which IUP invested approximately $230,000,000 Now turning to railcar.
Our railcar segment had record quarterly shipments in Q1 2015 of approximately 2,670 railcars, including approximately 1780 railcars to leasing customers as compared to 16 10 railcars for the prior year period, of which approximately 700 railcars were to leasing customers. As of March 31, 2015, ARI had a backlog of approximately 10,470 railcars including 3,590 railcars for lease customers. According to the Railway Supply Institute, the railcar manufacturing backlog dropped from a record level of nearly 143,000 railcars at the end of 2014 down to approximately 139,000 railcars at the end of Q1 2015. Tank cars are now only 38 percent of the industry backlog down from a peak of 85% in Q1 2013. Recently announced tank car regulations, however, may spur additional orders.
We are investing in capital and have plans to further expand our manufacturing facilities and repair capacity to address the anticipated needs of the industry from the new tank car regulations. Total manufacturing revenues for Q1 2015 increased by over 40% from the prior year period before elimination of railcar sales to our railcar segment's leasing operations. The increase was driven by strong levels of hopper and tank railcar shipments. Gross margin for manufacturing operations before intercompany eliminations for Q1 2015 were $73,000,000 compared to $56,000,000 for the prior year period. Gross margin for manufacturing operations as a percentage of manufacturing revenues decreased to 24% in Q1 2015 as compared to 26% in the prior year.
The decrease in gross margin percentage was primarily due to a shift in the sales mix to a higher mix of hopper cars that generally sell at lower prices and lower margins than tank railcars. The leasing businesses within the railcar segment continue to perform well. In Q1, we grew the combined leased car portfolios to roughly 41,600 from approximately 39,000 700 railcars at the end of 2014. Lease rates continue to remain strong. Consolidated adjusted EBITDA attributable to IEP grew to $110,000,000 in Q1 2015 from $93,000,000 in the prior year.
The increase is primarily driven by strong railcar shipments and higher leasing revenues. Our railcar segment's liquidity position is strong with $581,000,000 of cash at the end of Q1 2015. During Q1, we were able to complete a $626,000,000 secured financing at a wholly owned subsidiary of ARI, which added approximately $210,000,000 of cash to the balance sheet. Now turning to our Gaming segment. Gaming operating revenues improved from the prior year period due to an increase in consolidated gaming volumes.
Increased volumes were due to the inclusion of the Lumiere acquisition in April 2014, coupled with higher gaming volumes at Trop AC. Based on market data, the Atlantic City market experienced year over year declines in casino win of 9.3% for Q1 2015. Tropicana Atlantic City, however, experienced higher volumes as it benefited from closures of Internet gaming revenues also increased during Q1 2015 as compared to the prior year period. 0.2% in Q1 twenty fourteen. Tropicana's consolidated slot hold percentage was 9.4% in Q1 twenty fifteen compared to 9.6% in the prior year.
Tropicana's consolidated adjusted EBITDA for Q1 2015 was $30,000,000 compared to $18,000,000 in the prior year. The increase in EBITDA was primarily due to the higher revenues in Atlantic City and the Lumiere acquisition. $186,000,000 in cash and cash equivalents as of March 31, 2015. Now turning to our Food Packaging segment. Net sales for Q1 2015 decreased by $3,000,000 or 3% compared to the prior year.
The decrease was primarily due to unfavorable foreign currency translation and unfavorable price and product mix, offset in part by higher sales volume. Consolidated adjusted EBITDA was $13,000,000 in Q1 2015, which was a $3,000,000 decrease from the prior year period. Gross margin as a percentage of sales was 22% in Q1 2015 compared to 25% in the prior year. The decline in the gross margin as a percentage of sales was due to pension expense and the change in foreign currency exchange rates. This case's cash balance at the end of Q1 2015 was $39,000,000 And now to our metals segment.
Net sales for Q1 2015 decreased by $83,000,000 or 44 percent compared to the prior year. The decrease was primarily due to lower shipment volumes and lower prices of ferrous. Adjusted EBITDA was a loss of $9,000,000 in Q1 2015 compared to a loss of $3,000,000 in the prior year. Gross margin as a percentage of net sales was a loss of 9% in Q1 2015 compared to a loss of 2% in Q1 2014. The market environment remains challenging with reduced demand from domestic steel mills, a weak export market for scrap, declining iron ore prices and competition for shredder feedstock.
The company continues to invest in its operations with a focus on strengthening our competitive position within our existing markets. And now to our Real Estate segment. Q1 Real Estate revenues were $38,000,000 compared to $24,000,000 in the prior year period. Revenues were higher primarily from a $19,000,000 gain recorded from the sale of a net leased property in Q1 2015. Revenues from our rental and resort operations consistent with the prior year period.
Our net lease portfolio continues to drive earnings in this segment with its 28 properties generating strong cash flows. The Real Estate segment generated $10,000,000 of adjusted EBITDA in Q1 2015. Now turning to home fashion. Q1 2015 net sales increased by $5,000,000 compared to the prior year due to higher sales volumes. We are continuing to concentrate on higher margin lines and believe we will have solid placements for the remainder of 2015.
15. Adjusted EBITDA was $2,000,000 in Q1 2015 compared to $1,000,000 in the prior year period. Gross margin a percentage of sales was 15% for Q1 2015 compared to 12% in the prior year. The increase was primarily due to higher margins on more profitable programs and customers. As of March 31, 2015, West Point had $6,000,000 of unrestricted cash.
Now I will discuss our liquidity position. We maintain ample liquidity at the holding company in each of our operating subsidiaries to take advantage of attractive opportunities. We ended Q1 with cash, cash equivalents, liquid assets and our investment in the investment funds totaling approximately $7,300,000,000 Our subsidiaries have approximately $2,000,000,000 of cash and $800,000,000 of undrawn credit facilities to enable to enable them to take advantage of attractive opportunities. In summary, we continue to focus on building asset value and maintaining ample liquidity to enable us to capitalize on opportunities within and outside of our existing operating segments. Thank you.
Operator, can you please open it up for questions?
Our first question comes from the line of Brennan Hawken from UBS. Your question please.
Hey guys, this is Brent Dilts on for Brennan. How are you?
Good. How are you?
Good. I'll keep it pretty brief here. Just a couple of questions on investment opportunities. First, just with energy prices kind of still lower. What are you guys thinking in terms of investment opportunities in the space either standalone opportunities or maybe something for CVR?
Yes. So I mean, I would the first crack at it, I'd say is in our Investment segment. As you know, we have a pretty significant long equity book with certain names that we're in. And so we continue to focus on those. We're constantly on the lookout.
But from our perspective, historically, we like to buy things cheap, as you know. And despite the volatility in oil prices, although we're always looking, we haven't found the grand bargain, so to speak, that we tend to look for. Prices of the underlying companies haven't really fallen as much as we would like, but we're continuing to look. As far as CVR, we're always looking at potential assets that either come on the market or where there's potential combination to do something there where if we think we can operate the refinery better or drop it in our MLP structure to create value. And so I'd say we're on the lookout, but nothing has materialized yet.
Okay. And just my last question here will be just on Europe. Anything in that market? You guys don't seem to do as much in Europe, but I didn't know just with QE going on there and kind of concerns about the U. S.
Economy and a rising rate environment and everything here. Just if you're looking more at Europe or what you're seeing out there?
Well, I mean there's two answers. At the investment segment in the investment funds, we are pretty U. S. Centric. So we'll look everywhere, but we believe our core competency is here in the U.
S. But the second part of the answer would be with respect to our portfolio companies. A number of them have significant operations and exposures to Europe. And so from that perspective, obviously, we're doing a lot of business in Europe and constantly looking for potential tuck in acquisitions, so to speak, that could we have Federal Mogul, we have Viscase. They have a number they have significant revenue streams from Europe.
And so they're continuing to they have a big focus there. But at the Investment segment level, not as much.
Okay, great. Thanks guys.
Sure.
Thank
you. Our next question comes from the line of Mark Heilman from Tuohy Capital. Your question please.
Hey, good morning guys. Thanks for taking the call. Just two quick questions. The first on the Investment segment. Just given that the comments on the general market are conservative or perhaps bearish, could you comment on just where the exposures, the net exposures are?
And perhaps maybe even if they're negative, if they're that bearish? And then my second question is just on the gaming segment, Tropicana in particular. You guys have done and the management there has done a great job with it. Obviously, with Tropicana AC and with the Lumiere deal. But one disconnect that there is, is that as you have it valued on your sheets now is close to 2x the market value.
I realize it's not incredibly liquid. Do you have any thoughts for sort of getting that value up? Or do you just kind of consider it a private equity investment? Thanks.
Sure. Thanks. So with respect to the exposures at the investment fund, we ended the quarter net long 4%. So that's effectively flat in our mind. I'm doing it off memory, but we were probably at generally 20% to 30% in prior quarters.
So this is all disclosed in the 10 Q also. By the way, under the Liquidity and Capital Resource section, it gives you our long exposures and short exposures. But I think generally speaking, our long equity positions are the publicly known positions that have been a number of macro hedges, specifically being short the S and a number of macro hedges specifically being short the S and P 500 and other and certain single name stocks to try to hedge out just general economic risk. But all the longs and the shorts with respect to the credit and equity and everything is disclosed in the Q. So I refer you to that.
As far as Tropicana, yes, I mean, Tropicana, we're really just focused on we're a majority owner there. We own 68% of it. We're focused on the performance of the underlying company improving our market share in various markets that are generally flat year over year and operating the company to the best that we can. As far as the stock price and the liquidity, there's no immediate plans to address that. Okay.
Thanks.
Thank you. There are no further questions in
the queue at this time. I'd like to hand the program back to management. Okay. Thank you very much everybody for joining the call. We'll talk to you after the Q2.
Thank
you, ladies and gentlemen, for
your participation in today's conference. This does conclude the program. You may now disconnect. Good day.