Investments

12 Months Ended

Dec. 31, 2019

Investments.

Investment

Investments and securities sold, not yet purchased consist of equities, bonds, bank debt and other corporate obligations, all of which are reported at fair value in our consolidated balance sheets. These investments are considered trading securities. In addition, our Investment segment has certain derivative transactions which are discussed in Note 6, “Financial Instruments.” The carrying value and detail by security type, including business sector for equity securities, with respect to investments and securities sold, not yet purchased held by our Investment segment consist of the following:


	December 31,
	2019		2018
Assets	(in millions)
Investments:
Equity securities:
Basic materials	$	281	$	414
Consumer, non-cyclical	2,085		2,161
Consumer, cyclical	2,427		1,161
Energy	1,717		1,598
Financial	—		167
Technology	2,425		1,040
Other	127		145
	9,062		6,686
Corporate debt securities	145		181
	$	9,207	$	6,867
Liabilities
Securities sold, not yet purchased, at fair value:
Equity securities:
Basic materials	$	209	$	—
Consumer, non-cyclical	29		57
Consumer, cyclical	379		106
Energy	124		305
Financial	152		—
Technology	217		—
Other	80		—


	$	1,190	$	468

The portion of unrealized gains (losses) that relates to securities still held by our Investment segment, primarily equity securities, was $706 million, $(800) million and $1,413 million for the years ended December 31, 2019, 2018 and 2017, respectively.

As discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” when certain investments become subject to the equity method of accounting, our Investment segment elects the fair value option to such investment. Investments become subject to the equity method of accounting when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when we possess more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. Conversely, there is a presumption that for investments in which we have less than 20% of the voting interests of the investee that we do not have the ability to exercise significant influence. However, such presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is present, such as when we have representation on the board of directors of such investee.

After considering specific facts and circumstances, including the collective ownership in entities by the Investment Funds and affiliates of Mr. Icahn, as well as their collective representation on each of the boards of directors, we have determined that we have the ability to exercise significant influence over the operating and financial policies of certain investees below. The following table summarizes our direct ownership in such investees as well as certain financial information with respect to such investees in our consolidated financial statements during the respective periods in which we possessed the ability to exercise significant influence over the operating and financial policies of the investee.


	Voting Interests⁽¹⁾	Fair Value of Investment									Gains (Losses) Recognized in Income
	December 31, 2019	December 31,									Year Ended December 31,
				2019			2018			2019			2018			2017
		(in millions)
Herbalife Nutrition Ltd.	19.1%	$	1,343		$	1,661		$	(318)		$	864		$	357
Hertz Global Holdings, Inc.	24.6%	551			320			105			(197)			13
Caesars Entertainment Corporation	13.4%	1,243			—			478			—			—
		$	3,137		$	1,981		$	265		$	667		$	370

⁽¹⁾Voting interest represents our share of the voting common stock currently held as of December 31, 2019; however, voting common stock held by Mr. Icahn and his affiliates (excluding us) are not included.

The following tables contain summarized financial information with respect to these investees as if such investees were consolidated in our financial statements during the respective periods (or partial periods) in which we possessed the ability to exercise significant influence over the operating and financial policies of the investee. In addition, each of these investees file annual, quarterly and current reports, and proxy and information statements with the SEC.

Herbalife Nutrition Ltd.


	December 31,
	2019		2018
	(in millions)
Total assets	$	2,679	$	2,790
Total liabilities	3,069		3,513
Equity (deficit)	(390)		(723)


	Year Ended December 31,
	2019		2018		2017
	(in millions)
Revenue	$	4,877	$	4,892	$	4,428
Net income attributable to shareholders	311		297		214

Hertz Global Holdings, Inc.


	December 31,
	2019		2018
	(in millions)
Total assets	$	24,627	$	21,382
Total liabilities	22,739		20,262
Equity	1,888		1,120


	Year Ended December 31,
	2019		2018		2017
	(in millions)
Revenue	$	9,779	$	9,504	$	8,803
Net income attributable to shareholders	(58)		(225)		327

Caesars Entertainment Corporation

We obtained significant influence over Caesars Entertainment Corporation (“Caesars”), and elected the fair value option with respect to our investment in Caesars, beginning in the first quarter of 2019. As of December 31, 2019, Caesars had total assets of approximately $25.3 billion, total liabilities of $23.1 billion and equity of $2.2 billion. For 2019, during the period in which we had significant influence over Caesars, revenues were $8.7 billion and net income attributable to Caesars’ shareholders was $(1.2) billion. During the second quarter of 2019, we agreed to vote our Caesars’ shares in favor of the proposed merger between Caesars and Eldorado Resorts, Inc. (“Eldorado”). Pursuant to the merger, Caesars will merge into a subsidiary of Eldorado and Caesars stockholders will have the right, subject to certain allocation limitations, to elect to receive cash, stock in Eldorado, or a combination of cash and stock. Upon consummation of the merger, depending on what consideration we and other stockholders elect, we expect to receive a combination of cash and Eldorado shares. The transaction has not yet been consummated as of December 31, 2019.

Other Segments and Holding Company

With the exception of certain equity method investments at our operating subsidiaries and our Holding Company disclosed in the table below, our investments are measured at fair value in our consolidated balance sheets. The carrying value of investments held by our other segments and our Holding Company consist of the following:


	December 31,
	2019		2018
	(in millions)
Equity method investments	$	201	$	143
Other investments (measured at fair value)	537		1,327
	$	738	$	1,470

The portion of unrealized (losses) gains that relates to equity securities still held by our other segments and our Holding Company was $(421) million, $(339) million and $67 million for the years ended December 31, 2019, 2018 and 2017, respectively.