UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 24, 2007

ICAHN ENTERPRISES L.P.

(Exact Name of Registrant as Specified in Its Charter)


Delaware	1-9516	13-3398766
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

767 Fifth Avenue, Suite 4700, New York, NY 10153

(Address of Principal Executive Offices) (Zip Code)

(212) 702-4300

(Registrant’s Telephone Number, Including Area Code)

American Real Estate Partners, L.P.

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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On August 9, 2007, Icahn Enterprises L.P., formerly known as American Real Estate Partners, L.P. (“IE”), filed its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2007 (“Form 10-Q”). In Part II, Item 5 (Other Information) of Form 10-Q, IE reported the completion on August 8, 2007 of its acquisition of Carl C. Icahn’s partnership interests in the general partners of a group of private investment funds managed and controlled by Mr. Icahn and the partnership interests in a newly formed management company. IE reported the acquisition in Item 5 of Form 10-Q in lieu of reporting such information under Item 2.01 of a Current Report on Form 8-K, which would otherwise have been required to be filed with respect to such information. This Form 8-K is being filed to provide the financial statements of the Icahn Investment Management Entities (as defined therein) and IE’s pro forma financial information.

IE is a diversified holding company owning subsidiaries in the following continuing operating businesses: Investment Management, Real Estate and Home Fashion. The Asset Management and GP Entities provide investment advisory and certain management services to the Private Funds (as such terms are defined in the financial statements of the Icahn Investment Management Entities) but do not provide such services to any other individuals or accounts.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.


Icahn Investment Management Entities
Report of Independent Registered Public Accounting Firm			2
Combined Statements of Financial Condition as of December 31, 2006 and 2005			3
Combined Statements of Income for the Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004 (Commencement of Operations) through December 31, 2004			4
Combined Statements of Changes in Partners’ Capital for the Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004 (Commencement of Operations) through December 31, 2004			5
Combined Statements of Cash Flows for the Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004 (Commencement of Operations) through December 31, 2004			6
Notes to Combined Financial Statements			7
Combined Statements of Financial Condition as of March 31, 2007 (Unaudited) and December 31, 2006			28
Combined Statements of Income for the Three Months Ended March 31, 2007 and 2006 (Unaudited)			29
Combined Statements of Changes in Partners’ Capital for the Three Months Ended March 31, 2007 and 2006 (Unaudited)			30
Combined Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006 (Unaudited)			31
Notes to Combined Financial Statements			32

(b) Unaudited Pro Forma Financial Information.


The following required pro forma financial information is filed on the pages listed below.
Unaudited Pro Forma Condensed Combined Financial Information for Icahn Enterprises L.P. and Subsidiaries:
Introduction to Unaudited Pro Forma Condensed Combined Financial Information			42
Unaudited Pro Forma Condensed Combined Balance Sheet at June 30, 2007			43
Unaudited Pro Forma Condensed Combined Statement of Operations for the Six Months Ended June 30, 2007			44
Unaudited Pro Forma Condensed Combined Statement of Operations for the Six Months Ended June 30, 2006			45
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2006			46
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2005			47
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2004			48
Notes to Unaudited Pro Forma Condensed Combined Financial Statements			50

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of the Icahn Investment Management Entities

We have audited the accompanying combined statements of financial condition of the Icahn Investment Management Entities (the “Company”) as of December 31, 2006 and 2005, and the related combined statements of income, changes in partners’ capital, and cash flows for the years ended December 31, 2006 and 2005, and the period from November 1, 2004 (commencement of operations) through December 31, 2004. These combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of the Icahn Investment Management Entities as of December 31, 2006 and 2005, and the results of its combined operations and its combined cash flows for the years ended December 31, 2006 and 2005, and the period from November 1, 2004 (commencement of operations) through December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

/S/ GRANT THORNTON LLP

New York, New York
October 23, 2007

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF FINANCIAL CONDITION
December 31, 2006 and 2005
(In 000s)


	December 31,
	2006		2005
ASSETS
Cash and cash equivalents	$	4,822	$	2,341
Cash held at consolidated affiliated partnerships and restricted cash		1,106,809		139,856
Securities owned, at fair value		2,757,229		2,581,634
Unrealized gains on derivative contracts, at fair value		80,216		29
Accrued interest and dividends receivable		5,061		11,893
Due from brokers		838,620		343,807
Prepaid expenses and other assets		1,312		665
Receivable from sales of securities		21,058		10,958
Receivables from affiliates		29		54
Total assets	$	4,815,156	$	3,091,237
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Accounts payable	$	41	$	154
Accrued expenses and other liabilities		14,671		434
Compensation payable		13,479		2,610
Income taxes payable (including deferred taxes of $2,504 and $834)		2,528		834
Securities sold, not yet purchased, at fair value		691,286		367,024
Unrealized losses on derivative, futures and foreign currency contracts, at fair value		1,770		9,353
Accrued interest and dividends payable		4,737		1,271
Payable for purchases of securities		11,687		23,138
Subscriptions received in advance – consolidated affiliated partnerships		66,030		40,560
Redemptions payable – consolidated affiliated partnerships		23,830		—
Total liabilities		830,059		445,378
Commitments and contingencies (Note 10)
Non-controlling interests in consolidated affiliated partnerships		3,628,470		2,548,900
Partners’ capital:
Limited partners		84,313		29,022
General partner		272,314		67,937
		356,627		96,959
Total liabilities and partners’ capital	$	4,815,156	$	3,091,237

The accompanying notes are an integral part of these combined financial statements.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF INCOME
Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)


	Year Ended December 31,						November 1, 2004 - December 31, 2004
	2006			2005			November 1, 2004 - December 31, 2004
Revenues
Consolidated affiliated partnerships:
Realized gains — securities	$	805,122		$	110,481		$	23,934
Unrealized gains — securities		158,206			182,006			35,320
Realized gains (losses) — derivative contracts		(20,357	)		21,481			—
Unrealized gains (losses) — derivative contracts		87,769			(8,528	)		—
Interest, dividends and other income		73,218			47,268			2,846
Other income		345			168			—
Total revenues		1,104,303			352,876			62,100
Expenses
Compensation		29,732			12,929			1,086
Shareholder actions		4,952			3,185			—
Rent		1,426			1,472			170
Professional fees		792			307			154
Office, administrative and other		727			200			31
Consolidated affiliated partnerships:
Interest expense		9,901			43			72
Dividend expense		6,256			2,149			116
Financing expense		13,853			—			—
Other investment expenses		8,260			1,701			—
Filing fees		500			1,668			—
Administration fees		2,051			1,451			72
Professional fees and other		1,285			945			275
Total expenses		79,735			26,050			1,976
Income before income taxes and non-controlling interests in consolidated affiliated partnerships		1,024,568			326,826			60,124
Less: Income attributable to non-controlling interests in consolidated affiliated partnerships		(763,137	)		(241,361	)		(48,649	)
Income taxes:
Current		(93	)		(82	)		(54	)
Deferred		(1,670	)		(808	)		(27	)
		(1,763	)		(890	)		(81	)
Net income	$	259,668		$	84,575		$	11,394

The accompanying notes are an integral part of these combined financial statements.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)


	General Partner		Limited Partner		Total
Capital contributions	$	970	$	20	$	990
Allocation of net income		9,537		1,857		11,394
Partners’ capital — December 31, 2004		10,507		1,877		12,384
Allocation of net income		57,430		27,145		84,575
Partners’ capital — December 31, 2005		67,937		29,022		96,959
Allocation of net income		204,377		55,291		259,668
Partners’ capital — December 31, 2006	$	272,314	$	84,313	$	356,627

The accompanying notes are an integral part of these combined financial statements.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)


	Year Ended December 31,						November 1, 2004 - December 31, 2004
	2006			2005			November 1, 2004 - December 31, 2004
Cash flows from operating activities:
Net income	$	259,668		$	84,575		$	11,394
Adjustments to reconcile net income to net cash used in operating activities:
Income attributable to non-controlling interests in consolidated affiliated partnerships		763,137			241,361			48,649
Deferred taxes		1,670			808			27
Realized and unrealized gains on investments		(963,328	)		(292,487	)		(59,254	)
Purchases of securities		(4,267,933	)		(3,186,738	)		(487,049	)
Proceeds from sales of securities		5,154,820			1,252,706			178,502
Purchases to cover securities sold, not yet purchased		(764,723	)		(127,324	)		—
Proceeds from securities sold, not yet purchased		989,829			455,319			51,715
Changes in operating assets and liabilities:
Cash held at consolidated affiliated partnerships and restricted cash		(966,953	)		420,643			(560,499	)
Due from brokers		(494,813	)		244,209			(588,016	)
Receivable from sales of securities		(10,099	)		(9,141	)		(1,817	)
Unrealized gains on derivative contracts		(80,187	)		(29	)		—
Accrued interest and dividends receivable		6,833			(10,070	)		(1,824	)
Receivables from affiliates		25			(54	)		—
Prepaid expenses and other assets		(648	)		(368	)		(297	)
Accounts payable, accrued expenses and other liabilities		14,124			(858	)		1,445
Compensation payable		10,869			2,391			219
Income taxes payable		24			—			—
Payable for purchases of securities		(11,451	)		23,138			—
Unrealized losses on derivatives, futures and foreign currency contracts		(7,581	)		8,557			796
Accrued interest and dividends payable		3,466			1,154			117
Net cash used in operating activities		(363,251	)		(892,208	)		(1,405,892	)
Cash flows from financing activities:
Capital contributions by and receipt of subscriptions receivable from partners		—			20			970
Subscriptions received in advance		66,030			40,560			300,445
Capital distributions to non-controlling interests in consolidated affiliated partnerships		(113	)		(5,191	)		—
Capital contributions by non-controlling interests in consolidated affiliated partnerships		299,815			857,937			1,105,700
Net cash provided by financing activities		365,732			893,326			1,407,115
Net increase in cash and cash equivalents		2,481			1,118			1,223
Cash and cash equivalents at beginning of period		2,341			1,223			—
Cash and cash equivalents at end of period	$	4,822		$	2,341		$	1,223
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	4,734		$	20		$	72
Cash paid during the period for taxes	$	—		$	316		$	—
Supplemental schedule of non-cash financing activities:
Redemptions payable to non-controlling interests in consolidated affiliated partnerships	$	23,830		$	—		$	—

The accompanying notes are an integral part of these combined financial statements.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 1 — Organization

Basis of Presentation

The accompanying combined financial statements include the accounts of three affiliated general partner and management entities under common control and management (Icahn Management LP (“Icahn Management”), Icahn Onshore LP (the “Onshore GP”) and Icahn Offshore LP (the “Offshore GP” and, together with the Onshore GP, the “General Partners”)) and their respective consolidated entities (i) Icahn Partners LP (the “Onshore Fund”); (ii) Icahn Fund Ltd. (the “Offshore Fund”); (iii) Icahn Sterling Fund Ltd. (the “Sterling Fund”) and (iv) Icahn Partners Master Fund LP (“Offshore Master Fund I”) collectively, the “Icahn Investment Management Entities” or the “Interests.” Prior to the sale of certain general partnership interests on August 8, 2007, as described below in more detail, each of Icahn Management and the General Partners was principally owned by Carl C. Icahn. Icahn Management provided certain management and administrative services to the Onshore Fund, the Offshore Fund, the Sterling Fund and Offshore Master Fund I, each of which was formed prior to 2007. In addition, in 2007, prior to the sale on August 8, 2007, Icahn Management provided such services to Icahn Partners Master Fund II L.P. (“Offshore Master Fund II”) and Icahn Partners Master Fund III L.P. (“Offshore Master Fund III”), each of which was formed in 2007. Offshore Master Fund I, Offshore Master Fund II and Offshore Master Fund III are collectively referred to herein as the “Offshore Master Funds.” In 2007, prior to the sale on August 8, 2007, Icahn Management also provided such services to Icahn Fund II, Icahn Fund III and Icahn Cayman Partners L.P. The accompanying combined financial statements include the net assets and results of operations of the Icahn Investment Management Entities during the period of common control, commencing November 1, 2004.

Sale of Partnership Interests to Icahn Enterprises L.P.

On August 8, 2007, Icahn Enterprises L.P. (“IE”), which was formerly known as American Real Estate Partners, L.P., acquired the general partnership interests in the General Partners and the general partnership interests in New Icahn Management (as defined below). These entities provide investment advisory and certain management services to the Private Funds (as defined below) but do not provide such services to any other entities, individuals or accounts. IE entered into a Contribution and Exchange Agreement (the “Contribution Agreement”) dated as of August 8, 2007, with CCI Offshore Corp. (“CCI Offshore”), CCI Onshore Corp. (“CCI Onshore”), Icahn Management (Icahn Management, CCI Offshore and CCI Onshore collectively referred to herein as the “Contributors”), and Carl C. Icahn. Pursuant to the Contribution Agreement, IE acquired general partnership interests in the General Partners, acting as general partners of the Onshore Fund and the Offshore Master Funds managed and controlled by Mr. Icahn (the Onshore Fund and the Offshore Master Funds collectively referred to herein as the “Investment Funds”). The General Partners also act as general partners of certain funds formed as Cayman Islands exempted limited partnerships that invest in the Offshore Master Funds. These funds, together with other funds that also invest in the Offshore Master Funds, are collectively referred to herein as the “Feeder Funds” and, together with the Investment Funds, the “Private Funds.” IE also acquired the general partnership interest in Icahn Capital Management LP (“New Icahn Management”), a newly formed management company that provides certain management and administrative services to the Private Funds. The total initial consideration paid for the acquisition was $810 million of IE depositary units. In addition, IE has agreed to make certain earn-out payments to the Contributors over a five-year period payable in additional depositary units based on IE’s after-tax earnings from the Partnership Interests that it acquired, which includes both management fees and performance-based or incentive allocations paid by the Private Funds to the Asset Management and GP Entities. There is a maximum aggregate earn-out (including any catch-up) of $1.121 billion which is subject to achieving total after-tax earnings in such period of at least $3.906 billion.

Prior to the formation of New Icahn Management, Icahn Management provided management and administrative services to the Private Funds. New Icahn Management currently provides management and administrative services to the Private Funds. As referred to herein, either Icahn Management (for the period prior to the sale on August 8, 2007) or New Icahn Management (for the period subsequent to the sale on

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 1 — Organization – (continued)

August 8, 2007) and the General Partners constitute the “Asset Management and GP Entities.” The accompanying combined financial statements and footnotes include the net assets and results of operations of the Icahn Investment Management Entities during the periods presented. Refer to Note 2 “Consolidation and Basis of Presentation” for discussion on principles of consolidation.

Nature of Businesses

The investment strategy employed by the General Partners for the Private Funds is set and led by Mr. Icahn. The Private Funds pursue a value-oriented activist investment philosophy. Although Mr. Icahn has been a long-time activist investor since 1987, Mr. Icahn has not managed a pool of funds raised from outside investors. The Private Funds invest across a variety of industries and types of securities, including long and short equities, long and short bonds, bank debt and other corporate obligations, risk arbitrage and capital structure arbitrage and other special situations. The Private Funds invest a material portion of their capital in publicly traded equity and debt securities of companies that the General Partners believe to be undervalued by the marketplace. The Private Funds from time to time take significant positions in the companies in which they invest.

Consolidated Onshore GP and the Onshore Fund

The Onshore GP, a Delaware limited partnership, is the general partner of the Onshore Fund and is responsible for the management and investment decisions of the Onshore Fund. The Onshore Fund is a limited partnership organized under the laws of the state of Delaware on September 13, 2004 to invest in various securities and other financial instruments, primarily for capital appreciation and current income. The Onshore Fund commenced operations on November 1, 2004. Prior to the sale on August 8, 2007, CCI Onshore, whose sole shareholder is Carl C. Icahn, was the general partner of the Onshore GP. The Onshore Fund is consolidated into the Onshore GP pursuant to U.S. generally accepted accounting principles (“U.S. GAAP”), as described in Note 2.

Consolidated Offshore GP, the Offshore Fund and the Offshore Master Funds

The Offshore GP, a Delaware limited partnership, is the general partner of each of the Offshore Master Funds and is responsible for the management and investment decisions of the Offshore Master Funds. Prior to the sale on August 8, 2007, CCI Offshore, whose sole shareholder is Carl C. Icahn, was the general partner of the Offshore GP. Offshore Master Fund I is a Cayman Islands exempted limited partnership formed on September 13, 2004 to invest in various securities and other financial instruments primarily for capital appreciation and current income. Offshore Master Fund I commenced operations on November 1, 2004. The Offshore Fund, a Cayman Islands exempted limited liability company, invests substantially all of its assets in Offshore Master Fund I. Each of Offshore Master Fund II and Offshore Master Fund III is a Cayman Islands exempted limited partnership that was formed in 2007. The Offshore Fund and Offshore Master Fund I are consolidated into these financial statements pursuant to U.S. GAAP, as described in Note 2.

The Sterling Fund

The Sterling Fund began operations on May 1, 2006. On October 1, 2006, the Sterling Fund’s assets were contributed to the Offshore Fund. During the period of May 1, 2006 through October 1, 2006, the Sterling Fund was consolidated into the Offshore GP pursuant to U.S. GAAP, as described in Note 2.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies

The accompanying combined financial statements are prepared in accordance with U.S. GAAP. The following are the significant accounting policies adopted by the Asset Management and GP Entities:

Consolidation and Basis of Presentation

As discussed above, the accompanying combined financial statements of the Icahn Investment Management Entities include the accounts of certain consolidated Private Funds. The Asset Management and GP Entities consolidate those entities in which (i) they have an investment of more than 50% and have control over significant operating, financial and investing decisions of the entity, (ii) they have a substantive, controlling general partner interest, or (iii) they are the primary beneficiary of a variable interest entity (a “VIE”). With respect to the consolidated Private Funds, the limited partners and shareholders have no substantive rights to impact ongoing governance and operating activities.

The Onshore Fund is consolidated into the Onshore GP pursuant to Emerging Issues Task Force (“EITF”) 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, which defines the criteria for determining whether a general partner controls a limited partnership when the limited partners have certain rights, such as “kick-out” rights. According to EITF 04-5, consolidation of a limited partnership by the general partner is required when these rights do not exist.

The Offshore Fund and the Sterling Fund (through October 1, 2006) are consolidated into the Offshore GP pursuant to FASB Interpretation No. 46R (“FIN 46R”), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, will absorb a majority of the VIE's expected losses or receive a majority of the expected residual returns as a result of holding variable interests.

The accompanying combined financial statements of the Icahn Investment Management Entities reflect the assets, liabilities, revenues, expenses and cash flows of the Onshore Fund and Offshore Master Fund I on a gross basis for the periods presented. The majority ownership interests in the Onshore Fund and Offshore Master Fund I, which represent the portion of the Icahn Investment Management Entities’ consolidated net assets and net income attributable to the limited partners and shareholders in the consolidated Private Funds for the periods presented, are reflected as non-controlling interests in consolidated affiliated partnerships in the accompanying combined financial statements of the Icahn Investment Management Entities.

Although the Private Funds are not investment companies within the meaning of the Investment Company Act of 1940, as amended, each of the consolidated Private Funds is, for U.S. GAAP purposes, an investment company under the AICPA Audit and Accounting Guide—Investment Companies (the “AICPA Guide”). The Asset Management and GP Entities have retained the specialized accounting of these funds in accordance with EITF Issue No. 85-12, Retention of Specialized Accounting for Investments in Consolidation. The Offshore Master Funds managed by the Offshore GP are generally structured as master-feeder arrangements, whereby the Feeder Funds make their investments primarily in the Offshore Master Funds. In instances where the Asset Management and GP Entities, through their direct equity interest and consolidated Feeder Funds, own all of the outstanding equity shares of an affiliated master fund, the Asset Management and GP Entities consolidate such master fund. Pursuant to the AICPA Guide, the consolidated Private Funds' investments are reflected in the combined financial statements at their estimated fair values with changes in unrealized gains and losses included as a component of net income. Furthermore, pursuant to their specialized accounting, the Private Funds are not subject to the consolidation provisions of FIN 46R with respect to their investments.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

The management fees earned by Icahn Management (and by New Icahn Management subsequent to the sale on August 8, 2007) from consolidated entities and the incentive allocations earned by the Onshore GP and the Offshore GP from the Onshore Fund and the Offshore Master Funds, respectively, are eliminated in consolidation; however, the Asset Management and GP Entities’ allocated share of the net income from the Private Funds includes the amount of these eliminated fees. Accordingly, the consolidation of the Private Funds has no material net effect on the Asset Management and GP Entities' earnings from the Private Funds. Management fees earned from unconsolidated Private Funds are reflected separately in the combined statements of income.

Use of Estimates

The preparation of combined financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Income earned by the Asset Management and GP Entities typically includes an annual management fee of 2.5% of net asset value before a performance-based or incentive allocation of 25% of the net profits earned by the Private Funds subject to a loss carryforward provision. Prior to the sale on August 8, 2007, Icahn Management recognized management fee income in the period in which the related services were performed and in accordance with the (i) Management Agreement, dated as of November 1, 2004, between Icahn Management and the Onshore Fund, as amended from time to time, (ii) Management Agreement, dated as of November 1, 2004, between Icahn Management and the Offshore Fund, as amended from time to time and (iii) Management Agreement, dated as of May 1, 2006 between Icahn Management and the Sterling Fund. Subsequent to the sale on August 8, 2007, New Icahn Management will continue to provide certain management and administrative services to the Private Funds and recognize management fee income in the period in which the related services are to be performed.

The general partner incentive allocations earned from the Onshore Fund and the Offshore Master Funds are accrued on a quarterly basis in accordance with Method 2 of EITF Topic D-96, Accounting for Management Fees Based on a Formula, and are allocated to the Onshore GP and the Offshore GP, respectively, at the end of the Onshore Fund’s and the Offshore Master Funds’ fiscal year (or sooner on redemptions). Such accruals may be reversed as a result of subsequent investment performance prior to the conclusion of the Onshore Fund’s and the Offshore Master Funds’ fiscal year.

The incentive allocations earned by the Onshore GP and the Offshore GP from the Onshore Fund and the Offshore Master Funds, respectively, and the management fees earned by Icahn Management (and by New Icahn Management subsequent to the sale on August 8, 2007), are eliminated in consolidation; however, the Asset Management and GP Entities’ allocated share of the net income from the Private Funds includes the amount of these eliminated fees.

Cash and Cash Equivalents

The Asset Management and GP Entities consider all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

Cash Held at Consolidated Affiliated Partnerships and Restricted Cash

Cash held at consolidated affiliated partnerships consists of (i) cash and cash equivalents held by the Onshore Fund and the Offshore Master Funds which, although not legally restricted, is not available to fund the general liquidity needs of the Asset Management and GP Entities, and (ii) restricted cash relating to derivatives held on deposit by the relevant financial institution.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Shareholder Actions

Shareholder actions include expenses relating to the conduct of proxy contests and tender offers, litigation expenses, legal expenses and other professional fees incurred in connection with the making or administration of investments, to the extent not borne by companies in which the Private Funds have an investment.

Compensation and Benefits

Salaries and cash bonuses are accrued and recognized as incurred. Icahn & Co. LLC, an affiliate of the Asset Management and GP Entities, pays the salaries of employees of the Asset Management and GP Entities that perform various functions such as accounting, administrative, investment, legal and tax services. Under a separate expense-sharing agreement, Icahn & Co. LLC charges the Asset Management and GP Entities for the portion of these expenses attributable to the services provided by these employees to the Asset Management and GP Entities.

Pursuant to separate contractual service arrangements, and in exchange for certain services provided during the initial raising of the Private Funds, certain individuals were granted profit-sharing interests in Icahn Management and the General Partners (which profit-sharing interests in Icahn Management were assumed by New Icahn Management subsequent to the sale on August 8, 2007) and such individuals were thereby entitled to a portion of the management fees and incentive allocations, net of certain expenses, earned by the Asset Management and GP Entities. Accordingly, management fees and incentive allocations earned by the Asset Management and GP Entities give rise to a corresponding profit-sharing obligation which is reflected in the combined statements of financial condition as compensation payable. Amounts payable under these profit-sharing arrangements are accrued and recorded as compensation expense when the underlying management fees and incentive allocations are earned.

In addition, in connection with agreements with certain employees, the Asset Management and GP Entities granted rights to these employees to participate in specified percentages of the management fees and incentive allocations generated by the Asset Management and GP Entities. Certain of these rights provide these employees with the right to defer and reinvest their respective share of these management fees and incentive allocations in the Private Funds. These rights typically vest over a period of two to seven years. Accordingly, they are accounted for as share-based payments in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payments (“SFAS 123R”), whereby compensation expense is measured at fair value and recognized over the vesting period. These arrangements are further described in Note 7.

Income Taxes

No provision for federal, state or local income taxes has been made since the Asset Management and GP Entities are not taxable entities and the individual partners are liable for their share of the Asset Management and GP Entities’ income or loss.

Icahn Management (and New Icahn Management subsequent to the sale on August 8, 2007) is subject to a New York City Unincorporated Business tax (“UBT”) at a statutory rate of 4% on a portion of its income. UBT is accounted for under the FASB’s Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes. Icahn Management accounts for these taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established when management believes it is probable that a deferred tax asset will not be realized.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Non-controlling Interests in Consolidated Affiliated Partnerships

Non-controlling interests in consolidated affiliated partnerships in the accompanying combined statements of financial condition represents the third-party limited partners’ or shareholders’ portion of the equity of the consolidated Private Funds. Non-controlling interests in earnings of consolidated affiliated partnerships in the accompanying combined statements of income represents the limited partners’ or shareholders’ portion of the income or loss of the consolidated Private Funds.

Allocation of Net Profits and Losses in Consolidated Affiliated Partnerships

Net investment income and net realized and unrealized gains and losses on investments of the Private Funds are allocated to both the respective general partner and the limited partners or shareholders of the Private Funds based on the ratio of their respective capital balances at the beginning of each allocation period to the total capital of all partners of the Private Funds. The beginning of an allocation period is defined as the beginning of each fiscal year, the date of admission of any new partner of the Private Funds, or the date of any additional subscription or redemption by a partner of the Private Funds. Upon the allocation to partners based on their respective capital balances, generally 25% of the net profits allocated to the Private Funds’ limited partners are then re-allocated to the Private Funds' general partners. Such re-allocation is referred to as the general partners' incentive allocation. The total profits and losses allocated to the respective general partners of the Private Funds are included in the net income of the combined Asset Management and GP Entities (as either the Onshore GP or Offshore GP act as general partner to the Private Funds), and are allocated in a manner consistent with the manner in which capital is allocated to the partners of the Asset Management and GP Entities as further discussed in Note 8.

Investments and Related Transactions

Investment Transactions and Related Investment Income of the Funds. Investment transactions of the Private Funds are recorded on a trade date basis. Realized gains or losses on sales of investments are based on the first-in, first-out or the specific identification method. Realized and unrealized gains or losses on investments are recorded in the combined statements of income. Interest income and expenses are recorded on an accrual basis, and dividends are recorded on the ex-dividend date. Premiums and discounts on fixed income securities are amortized using the effective yield method.

Valuation of Investments of the Funds. Securities of the Private Funds that are listed on a securities exchange are valued at their last sales price on the primary securities exchange on which such securities are traded on such date. Securities that are not listed on any exchange but are traded over-the-counter are valued at the mean between the last “bid” and “asked” price for such security on such date. Securities and other instruments for which market quotes are not readily available are valued at fair value as determined in good faith by the applicable general partner.

Foreign Currency Transactions of the Funds. The books and records of the Private Funds are maintained in U.S. dollars. Assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars at the rate of exchange in effect at the balance sheet date. Transactions during the period denominated in currencies other than U.S. dollars are translated at the rate of exchange applicable on the date of the transaction. Foreign currency translation gains and losses are recorded in the combined statements of income. The Private Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities. Such fluctuations are included in the net realized gains from securities transactions and the net unrealized gains on securities positions.

Fair Values of Financial Instruments. The fair values of the Private Funds’ assets and liabilities, which qualify as financial instruments under SFAS No. 107, Disclosures About Fair Value of Financial Instruments, approximate the carrying amounts presented in the combined statements of financial condition.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Securities Sold, Not Yet Purchased. The Private Funds may sell an investment they do not own in anticipation of a decline in the fair value of that investment. When the Private Funds sell an investment short, they must borrow the investment sold short and deliver it to the broker-dealer through which they made the short sale. A gain, limited to the price at which the Private Funds sold the investment short, or a loss, unlimited in amount, will be recognized upon the cover of the short sale.

Due from Brokers. Due from brokers represents cash balances with the Private Funds’ clearing brokers. A portion of the cash at brokers is related to securities sold, not yet purchased; its use is therefore restricted until the securities are purchased. Securities sold, not yet purchased are collateralized by certain of the Private Funds’ investments in securities. Margin debit balances, which may exist from time to time, are collateralized by certain of the Private Funds’ investments in securities.

Recently Issued Accounting Pronouncements

SFAS 155. On February 16, 2006, the FASB issued SFAS 155, Accounting for Certain Hybrid Instruments — an Amendment of FASB Statements No. 133 and 140. The statement amends Statement 133 to permit fair value measurement for certain hybrid financial instruments that contain an embedded derivative, and provides additional guidance on the applicability of Statements 133 and 140 to certain financial instruments and subordinated concentrations of credit risk. The new standard is effective for the first fiscal year beginning after September 15, 2006. The Asset Management and GP Entities adopted SFAS 155 as of January 1, 2007. The adoption of SFAS 155 did not have a material impact on the combined financial statements of the Icahn Investment Management Entities.

FIN 48. In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return, including issues relating to financial statement recognition and measurement. FIN 48 provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is “more-likely-than-not” of being sustained if the position were to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. If an uncertain tax position meets the “more-likely-than-not” threshold, the largest amount of tax benefit that is greater than 50 percent likely of being recognized upon ultimate settlement with the taxing authority is recorded. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Asset Management and GP Entities adopted FIN 48 as of January 1, 2007. The adoption of FIN 48 did not have a material impact on the combined financial statements of the Icahn Investment Management Entities.

SFAS 157. In September 2006, the FASB issued SFAS 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, SFAS 157 does not require any new fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, although early application is permitted. The Asset Management and GP Entities adopted SFAS 157 as of January 1, 2007, in conjunction with the adoption of SFAS 159 as required. The adoption of SFAS 157 did not have any material impact on the combined financial statements of the Icahn Investment Management Entities.

SFAS 159. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115 (“SFAS 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value (i.e., the fair value option), on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning partners’ equity. The Asset Management and GP Entities adopted SFAS 159 as of January 1, 2007. The adoption of SFAS 159 did not have a material impact on the combined financial statements of the Icahn Investment Management Entities.

FSP FIN 39-1. On April 30, 2007, the FASB issued FASB Staff Position No. FIN 39-1 (“FSP FIN 39-1”), which amends FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts (“FIN 39”). FSP FIN 39-1 impacts entities that enter into master netting arrangements as part of their derivative transactions by allowing net derivative positions to be offset in the financial statements against the fair value of amounts (or amounts that approximate fair value) recognized for the right to reclaim cash collateral or the obligation to return cash collateral under those arrangements. FSP FIN 39-1 is effective for fiscal years beginning after November 15, 2007, although early application is permitted. The Asset Management and GP Entities are currently evaluating the effect, if any, of the adoption of FSP FIN 39-1 on the combined financial statements of the Icahn Investment Management Entities.

SOP 07-1. In June 2007, Statement of Position No. 07-1, Clarification of the Scope of the Audit and Accounting Guide — Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies (“SOP 07-1”), was issued. SOP 07-1 addresses whether the accounting principles of the Audit and Accounting Guide for Investment Companies (the “AICPA Guide”) may be applied to an entity by clarifying the definition of an investment company and whether those accounting principles may be retained by a parent company in consolidation or by an investor in the application of the equity method of accounting. SOP 07-1 applies to reporting periods beginning on or after December 15, 2007, although early application is permitted. The Asset Management and GP Entities adopted SOP 07-1 as of January 1, 2007.

Upon the adoption of SOP 07-1, the Offshore GP lost its ability to retain specialized accounting pursuant to the AICPA Guide for either its equity method investment in the Offshore Master Funds or for its consolidation of the Offshore Fund, and the Onshore GP lost its ability to retain specialized accounting, for its consolidation of the Onshore Fund. Both the Offshore GP and the Onshore GP do not meet the requirements for retention of specialized accounting under SOP 07-1, since the Offshore GP and Onshore GP and their affiliates acquire interests for strategic operating purposes in the same companies in which their subsidiary investment companies invest.

However, upon losing their ability to retain specialized accounting, the Asset Management and GP Entities applied SFAS No. 115, Accounting for Investments in Debt and Equity Securities (“SFAS 115”), to their investments held by the consolidated Private Funds in debt securities and in those equity securities with readily determinable fair values, as defined by that Statement, and classified such investments as available-for-sale securities and elected the fair value option pursuant to SFAS 159. For those equity securities that fall outside the scope of SFAS 115 because they do not have readily determinable fair values as defined by that Statement, the Asset Management and GP entities elected the fair value option pursuant to SFAS 159 and measured the fair value of such securities in accordance with the requirements of SFAS 157. For those investments in which the Asset Management and GP Entities would otherwise account for such investments under the equity method, the Asset Management and GP Entities, in accordance with their acccounting policy, elected the fair value option pursuant to SFAS 159 for all such investments.

The election of the fair value option pursuant to SFAS 159 was deemed to most accurately reflect the nature of our business relating to investments. Derivative contracts entered into by the consolidated Private Funds continue to be accounted for pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), which was amended by SFAS No. 138, Accounting for Certain Derivative

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Instruments and Certain Hedging Activities (“SFAS 138”). These pronouncements require recognition of all derivatives as either assets or liabilities in the balance sheet at their fair value. All changes in the fair values of derivatives held by the consolidated Private Funds are reported in earnings.

FSP FIN 46(R)-7. In May 2007, the staff of the FASB issued FASB Staff Position FIN 46(R)-7, Application of FASB Interpretation No. 46(R) to Investment Companies (“FSP FIN 46(R)-7”). The staff position amends FIN 46R to indicate that investments accounted for at fair value in accordance with SOP 07-1 are not subject to consolidation under FIN 46R. The adoption of FSP FIN 46(R)-7 will require the Asset Management and GP Entities to apply consolidation provisions of FIN 46R to their consolidated entities that previously fell within the scope of the AICPA Guide. The adoption of FIN 46(R)-7 will not have any material impact on the combined financial statements of the Icahn Investment Management Entities.

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased

For the years ended December 31, 2006 and 2005, the Asset Management and GP Entities retained the specialized accounting applied by the Private Funds as prescribed under the AICPA Guide. A condensed schedule of investments provided in accordance with the requirements of such accounting follows. Positions in any one issuer aggregating 5% or more of net assets before non-controlling interests in consolidated affiliated partnerships in any particular year are separately disclosed. Dollars are in ($000s)



	Shares or Option Contracts		Cost		Fair Value		% of Net Assets			Shares or Option Contracts		Cost		Fair Value		%of Net Assets
Instrument	December 31, 2006									December 31, 2005
Securities Owned, at Fair Value
Common Stock
North America
Basic Materials			$	169,719	$	195,167		4.9	%			$	95,725	$	119,205		4.5	%
Communications
Time Warner Incorporated		20,030,922		339,535		436,273		10.9	%		19,453,000		348,017		339,260		12.8	%
Consumer, Cyclical
Federated Department Stores, Inc.		6,818,345		252,769		259,983		6.5	%				—		—		—
Hilton Hotels Corporation		4,057,440		111,089		141,605		3.5	%				—		—		—
Lear Corporation		9,595,953		206,174		283,367		7.1	%				—		—		—
Fairmont Hotels and Resorts, Inc.				—		—		—			7,122,600		234,341		302,069		11.4	%
Other Consumer, Cyclical				177,512		142,630		3.6	%				117,950		49,280		1.9	%
Total Consumer, Cyclical				747,544		827,585		20.7	%				352,291		351,349		13.3	%
Consumer, Non-Cyclical				187,960		186,873		4.7	%				95,067		103,862		3.9	%
Diversified				—		—		0.0	%				9,422		11,734		0.4	%
Energy
Kerr McGee Corp.				—		—		—			4,878,990		344,566		443,305		16.7	%
The Williams Companies Incorporated		4,840,724		106,307		126,440		3.2	%				—		—		—
Other Energy*				9,810		8,767		0.2	%				185,093		187,730		7.1	%
Total Energy				116,117		135,207		3.4	%				529,659		631,035		23.8	%
Financial
Cigna Corporation		679,733		63,618		89,432		2.2	%				—		—		—
Other Financial*				244,107		270,854		6.8	%				38,312		56,343		2.1	%
Total Financial				307,725		360,286		9.0	%				38,312		56,343		2.1	%
Industrial				—		—		—					52,522		57,720		2.2	%
Technology				20,917		35,350		0.9	%				14,329		20,043		0.8	%
Total North America				1,889,517		2,176,741		54.5	%				1,535,344		1,690,551		63.9	%
Europe
Financial				40,117		53,828		1.3	%				75,044		97,624		3.7	%
Industrial				—		—		—					44,230		63,076		2.4	%
Total Europe				40,117		53,828		1.3	%				119,274		160,700		6.1	%
Asia / Pacific
Consumer, Non-Cyclical
Korea Tobacco & Ginseng Corp				—		—		—			5,832,972		241,905		259,788		9.8	%
Other Consumer, Non-Cyclical				—		—		—					55,491		62,002		2.3	%
Total Asia / Pacific				—		—		—					297,396		321,790		12.2	%
Total Common Stock				1,929,634		2,230,569		55.8	%				1,952,014		2,173,041		82.1	%
Convertible Stock
North America
Consumer, Cyclical				30,400		39,064		1.0	%				30,400		27,968		1.1	%
Call Options
North America
Communications
Time Warner Incorporated				—		—		—			253,719		176,351		190,036		7.2	%
Consumer, Cyclical
Hilton Hotels Corporation		4,536,080		38,715		69,856		1.7	%				—		—		—
Energy
The Williams Companies Incorporated		11,216,800		81,931		102,297		2.6	%				—		—		—
Other Energy				33,861		54,541		1.4	%				14,286		13,978		0.5	%
Total Energy				115,792		156,838		3.9	%				14,286		13,978		0.5	%
Financial
Cigna Corporation		2,104,320		67,233		121,146		3.0	%				—		—		—
Total Call Options				221,740		347,840		8.7	%				190,637		204,014		7.7	%
REITs
North America
Financial				123,971		127,063		3.2	%				—		—		—
Corporate Debt
North America
Communications				—		—		—					31,743		31,485		1.2	%
Consumer, Cyclical				6,434		6,960		0.2	%				89,364		86,388		3.3	%
Financial				—		—		—					51,914		51,750		2.0	%
Total Corporate Debt				6,434		6,960		0.2	%				173,021		169,623		6.4	%
Warrants
North America
Consumer, Non-Cyclical				2,214		5,733		0.1	%				2,214		6,988		0.3	%
Total Securities Owned, at Fair Value			$	2,314,393	$	2,757,229		69.0	%			$	2,348,286	$	2,581,634		97.5	%

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased – (continued)


(Dollars in thousands)	Shares or Option Contracts	Proceeds		Fair Value		% of Net Assets			Shares or Option Contracts		Proceeds		Fair Value		% of Net Assets
Instrument	December 31, 2006								December 31, 2005
Securities Sold, Not Yet Purchased, at Fair Value
Common Stock
North America
Basic Materials		$	28,552	$	39,696		1.0	%			$	12,454	$	8,794		0.3	%
Consumer, Cyclical*			269,563		295,959		7.4	%				11,755		11,901		0.4	%
Communications			83,304		101,592		2.5	%				—		—		—
Financial			3,828		8,446		0.2	%				19,299		24,764		0.9	%
Funds			37,009		37,429		0.9	%				—		—		—
Energy Select Sector SPDR			—		—		—			4,800,000		235,911		241,488		9.1	%
Industrial			—		—		—					485		271		0.0	%
Total Common Stock			422,256		483,122		12.1	%				279,904		287,218		10.9	%
Put Options
North America
Communications			—		—		—					500		—		0.0	%
Consumer, Cyclical			45		—		—					—		—		—
Energy			128		—		—					—		—		—
Financial			22		—		—					—		—		—
Total Put Options			195		—		0.0	%				500		—		0.0	%
REITs
North America
Financial			75,836		81,784		2.0	%				65,467		73,878		2.8	%
Corporate Debt
North America
Consumer, Cyclical			126,491		126,380		3.2	%				5,926		5,928		0.2	%
Total Securities Sold, Not Yet Purchased, at Fair Value		$	624,778	$	691,286		17.3	%			$	351,797	$	367,024		13.9	%

No items greater than 5%.

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased – (continued)


(Dollars in thousands)	Shares or Option Contracts		Cost		Fair Value		% of Net Assets			Shares or Option Contracts	Cost		Fair Value		% of Net Assets
Instrument	December 31, 2006									December 31, 2005
Unrealized Gain on Open Derivative Contracts, at Fair Value
Equity Swaps
North America
Basic Materials			$	—	$	3,027		0.1	%		$	—	$	—		—
Consumer, Cyclical
Lear Corporation		4,669,120		—		47,366		1.2	%			—		—		—
Other Consumer, Cyclical				—		11,564		0.3	%			—		—		—
Total Consumer, Cyclical				—		58,930		1.5	%			—		—		—
Consumer, Non-Cyclical				—		7,207		0.2	%			—		—		—
Energy				—		9,630		0.2	%			—		—		—
Total North America				—		78,793		2.0	%			—		—		—
Asia / Pacific
Consumer, Non-Cyclical				—		1,422		0.0	%			—		—		—
Total Asia / Pacific				—		1,422		0.0	%			—		—		—
Total Equity Swaps				—		80,216		2.0	%			—		—		—
Credit Default Swaps-Buy Protection
North America
Basic Materials				—		—		—				—		29		0.0	%
Total Unrealized Gain on Open Derivative Contracts, at Fair Value			$	—	$	80,216		2.0	%		$	—	$	29		0.0	%
Unrealized Loss on Open Derivative Contracts, at Fair Value
Equity Swaps
North America
Energy			$	—	$	1,432		0.0	%		$	—	$	—		—
Credit Default Swaps-Sell Protection
North America
Consumer, Cyclical				—		—		—				—		1,352		0.1	%
Futures Contracts
North America
Financial				—		266		0.0	%			—		1,725		0.1	%
Total Forward Currency Contracts				—		72		0.0	%			—		6,276		0.2	%
Total Unrealized Loss on Open Derivative Contracts, at Fair Value			$	—	$	1,770		0.0	%		$	—	$	9,353		0.4	%

No items greater than 5%

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 4 — Investments in Variable Interest Entities

As described in Note 2, the Asset Management and GP Entities consolidate certain VIEs when they are determined to be the primary beneficiary, either directly or indirectly through other consolidated subsidiaries. The assets of the consolidated VIEs are primarily classified within cash and cash equivalents and securities owned, at fair value on the combined statements of financial condition. The liabilities of the consolidated VIEs are primarily classified within securities sold, not yet purchased, at fair value, subscriptions received in advance, and redemptions payable on the combined statements of financial condition and are non-recourse to the Interests’ general credit.

The consolidated VIE consists solely of the Offshore Fund whose purpose and activities are further described in Note 1. The Asset Management and GP Entities sponsored the formation of and manage this VIE.

The following table presents information regarding interests in VIEs for which the Asset Management and GP Entities hold a variable interest as of December 31, 2006 (in 000s):


	Asset Management and GP Entities are Primary Beneficiary
	Net Assets		Asset Management and GP Entities
Offshore Fund	$	2,016,375	$	87,171

Note 5 — Concentration Risk, Financial Instruments and Off-Balance Sheet Risks

The Private Funds maintain their cash deposits with major financial institutions. Certain account balances may not be covered by the Federal Deposit Insurance Corporation, while other accounts, at times, may exceed federally insured limits. The Asset Management and GP Entities believe that the risk is not significant. Substantially all of the Onshore Fund’s and the Offshore Master Funds’ investments are held by, and its depository and clearing operations are transacted with, two prime brokers. The prime brokers are highly capitalized and members of major securities exchanges.

Financial Instruments, Off-Balance-Sheet Risk and Concentrations of Credit Risk (the Private Funds)

In the normal course of their business, the Private Funds trade various financial instruments and enter into certain investment activities, which may give rise to off-balance-sheet risk. Currently, the Private Funds invest in futures, options and securities sold, not yet purchased. These financial instruments represent future commitments to purchase or sell other financial instruments or to exchange an amount of cash based on the change in an underlying instrument at specific terms at specified future dates. Risks may arise with these financial instruments from potential counter-party non-performance and from changes in the market values of underlying instruments.

Securities sold, not yet purchased represent obligations of the Private Funds to deliver the specified security, thereby creating a liability to repurchase the security in the market at prevailing prices. Accordingly, these transactions result in off-balance-sheet risk, as the Private Funds’ satisfaction of the obligations may exceed the amount recognized in the combined statements of financial condition. The Private Funds’ investments in securities and amounts due from broker are partially restricted until the Private Funds satisfy the obligation to deliver the securities sold, not yet purchased.

The Private Funds may also purchase and write option contracts. As a writer of option contracts, the Private Funds receive a premium at the outset and then bear the market risk of unfavorable changes in the price of the underlying financial instrument. As a result of writing option contracts, the Private Funds are obligated to purchase or sell, at the holder’s option, the underlying financial instrument. Accordingly, these transactions result in off-balance-sheet risk, as the Private Funds’ satisfaction of the obligations may exceed the amount recognized in the combined statements of financial condition. The Private Funds write put options that may require them to purchase assets from the option holder and generally are net settled in cash at a

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 5 — Concentration Risk, Financial Instruments and Off-Balance Sheet Risks – (continued)

specified date in the future. At December 31, 2006 and 2005, the maximum payout amounts relating to written put options were $510.5 million and $100.0 million, respectively. As of December 31, 2006 and 2005, the carrying amounts of the liability under written put options recorded within securities sold, not yet purchased, at fair value were $0.

The Private Funds have entered into total return swap contracts, which involve an exchange of cash flows based on a commitment to pay a variable rate of interest in exchange for a market-linked return based on a notional amount. The market-linked return may include, among other things, the total return of a security or index.

The Private Funds trade futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of a standardized amount of a deliverable grade commodity, security, currency or cash at a specified price and specified future date unless the contract is closed before the delivery date. Payments (“variation margin”) are made or received by the Private Funds from time to time, depending on the daily fluctuations in the value of the contract, and the whole value change is recorded as an unrealized gain or loss by the Private Funds. When the contract is closed, the Private Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The Private Funds utilize forward contracts to protect their assets denominated in foreign currencies from losses due to fluctuations in foreign exchange rates. The Private Funds’ exposure to credit risk associated with non-performance of forward foreign currency contracts is limited to the unrealized gains inherent in such contracts, which are recognized in unrealized losses on derivative, futures and foreign currency contracts, at fair value in the combined statements of financial condition.

Note 6 — Related-Party Transactions

On August 8, 2007, IE entered into the Contribution Agreement, pursuant to which, as more fully described in Note 1, IE acquired the Partnership Interests. Mr. Icahn controls the Contributors. The Onshore Fund, the Offshore Fund and Offshore Master Fund I were launched in November 2004 with approximately $1.0 billion in assets under management, of which $300 million was provided by Carl Icahn and his affiliated entities.

The Asset Management and GP Entities provide investment advisory and certain management services to the Private Funds. The Asset Management and GP Entities do not provide investment advisory or other management services to any other entities, individuals or accounts. Interests in the Private Funds are offered only to certain sophisticated and accredited investors on the basis of exemptions from the registration requirements of the federal securities laws and are not publicly available. The Asset Management and GP Entities generate income from amounts earned pursuant to contractual arrangements with the Private Funds. Such amounts typically include an annual management fee of 2.5% of net asset value before a performance-based, or incentive, allocation of 25% of net profits earned by the Private Funds subject to a “high water mark” (whereby the Asset Management and GP Entities do not earn incentive allocations during a particular year even though the fund had a positive return in such year until losses in prior periods are recovered), although such amounts have been (and may in the future be) modified or waived in certain circumstances. The Asset Management and GP Entities and their affiliates may also earn income through their principal investments in the Private Funds. As noted, the management fee income earned by Icahn Management (and, subsequent to the sale of the Partnership Interests on August 8, 2007, New Icahn Management) and the incentive allocations earned by the Onshore GP and the Offshore GP from the Onshore Fund and the Offshore Master Funds, respectively, is eliminated in consolidation; however, the Asset Management and GP Entities’ share of the net income from the Private Funds includes the amount of these eliminated fees.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

As consideration for the contribution to IE of the Partnership Interests, IE delivered to the Contributors 8,632,679 of its depositary limited partnership units at the closing, representing $810 million of such units based on the volume-weighted average price of the depositary units on the New York Stock Exchange for the 20-trading-day period ending on August 7, 2007 (the day before the closing). In addition, IE has agreed to make certain contingent earn-out payments to the Contributors over a five-year period payable in additional depositary units based on IE’s after-tax earnings from the Partnership Interests it acquired, which includes both management fees and performance-based or incentive allocations paid by the Private Funds to the Asset Management and GP Entities. The earn-out payments will be calculated as set forth in the Contribution Agreement, with the maximum earn-out payment equaling $120 million in the fiscal year ending December 31, 2007, (if such-after tax earnings exceed $289 million, with after-tax earnings for 2007 including the 2.5% annual management fee for only the fourth quarter of 2007), $165 million for the fiscal year ending December 31, 2008 (if such after-tax earnings exceed $540 million), $223 million for the fiscal year ending December 31, 2009 (if such after-tax earnings exceed $746 million), $279 million for the fiscal year ending December 31, 2010 (if such after-tax earnings exceed $1.004 billion) and $334 million for the fiscal year ending December 31, 2011, (if such after-tax earnings exceed $1.327 billion). There is a catch-up after 2011, based on total after-tax earnings in the five-year earn-out period, with a maximum aggregate earn-out (including any catch-up) of $1.121 billion, which is subject to achieving total after-tax earnings in such period of at least $3.906 billion.

CCI Offshore contributed to IE 100% of CCI Offshore’s general partnership interests in the Offshore GP (the “Offshore Partnership Interests”), and CCI Onshore contributed to IE 100% of CCI Onshore’s general partnership interests in Onshore GP (the “Onshore Partnership Interests”). The General Partners’ capital account with respect to the Offshore Partnership Interests and the Onshore Partnership Interests at the time of IE’s acquisition aggregated approximately $101.5 million including accrued incentive allocations.

Immediately prior to the execution and delivery of the Contribution Agreement, Icahn Management and New Icahn Management entered into an agreement pursuant to which Icahn Management contributed substantially all of its assets and liabilities, other than certain rights in respect of deferred management fees, to New Icahn Management in exchange for 100% of the general partnership interests in New Icahn Management. Such contribution included the assignment of the management agreements with the Private Funds. Pursuant to the Contribution Agreement, Icahn Management contributed to IE 100% of Icahn Management’s general partnership interests in New Icahn Management (the “New Icahn Management Partnership Interests” and, collectively with the Onshore Partnership Interests and the Offshore Partnership Interests, the “Partnership Interests”).

IE has also entered into an employment agreement (the “Icahn Employment Agreement”) with Mr. Icahn pursuant to which, over a five-year term, Mr. Icahn will serve as IE’s Chairman and as Chairman and Chief Executive Officer of New Icahn Management. Mr. Icahn also serves as the Chief Executive Officer of the General Partners. During the employment term, IE will pay Mr. Icahn an annual base salary of $900,000 and an annual incentive bonus based on a bonus formula with two components. The first component is based on the annual return on assets under management by the Asset Management and GP Entities. The second component of the annual bonus payable by IE is tied to the growth in its annual net income (other than income or losses resulting from the operations of the Asset Management and GP Entities).

Fifty percent of all bonus amounts payable by IE and New Icahn Management to Mr. Icahn shall be subject to mandatory deferral and treated as though invested in the Private Funds and as though subject to a 2% annual management fee (but no incentive allocation). Such deferred amounts shall be subject to vesting in equal annual installments over a three-year period commencing from the last day of the year giving rise to the bonus. Amounts deferred generally are not subject to acceleration and unvested deferred amounts shall be forfeited if Mr. Icahn ceases to be employed under his employment agreement, provided that all deferred amounts shall vest in full and be payable in a lump sum payment thereafter if either the employment of

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

Mr. Icahn is terminated by IE without Cause, Mr. Icahn terminates his employment for Good Reason (as such terms are defined in the Icahn Employment Agreement) or upon Mr. Icahn’s death or disability during the employment term. In addition, upon Mr. Icahn’s completion of service through the end of the employment term, Mr. Icahn will also vest in full in any mandatory deferrals. Vested deferred amounts (and all deferred returns, earnings and profits thereon) shall be paid to Mr. Icahn within 60 days following the vesting date. Returns on amounts subject to deferral shall also be subject to management fees charged by New Icahn Management.

IE, along with the Private Funds, also entered into an agreement (the “Covered Affiliate Agreement”), simultaneously with the closing of the transactions contemplated by the Contribution Agreement, pursuant to which IE (and certain of its subsidiaries) agreed, in general, to be bound by certain restrictions on its investments in any assets that the General Partners deem suitable for the Private Funds, other than government and agency bonds, cash equivalents and investments in non-public companies. IE and its subsidiaries will not be restricted from making investments in the securities of certain companies in which Mr. Icahn or companies he controlled had an interest in as of the date the initial launch of the Private Funds, and companies in which IE had an interest as of the date of sale on August 8, 2007. IE and its subsidiaries, either alone or acting together with a group, will not be restricted from (i) acquiring all or any portion of the assets of any public company in connection with a negotiated transaction or series of related negotiated transactions or (ii) engaging in a negotiated merger transaction with a public company and, pursuant thereto, conducting and completing a tender offer for securities of the company. The terms of the Covered Affiliate Agreement may be amended, modified or waived with the consent of IE and each of the Private Funds, provided, however, that a majority of the members of an investor committee maintained for certain of the Private Funds may (with IE’s consent) amend, modify or waive any provision of the Covered Affiliate Agreement with respect to any particular transaction or series of related transactions.

Pursuant to the Third Amended and Restated Limited Partnership Agreement of the Onshore Fund, dated as of January 1, 2006, as amended from time to time (the “Onshore Fund LPA”), the Onshore GP is entitled to an incentive allocation.

At the end of each fiscal year of the Onshore Fund (or sooner upon the occurrence of withdrawals), 25% of the capital appreciation (based on realized and unrealized gains and losses), if any, allocated to each capital account of a limited partner of the Onshore Fund (20% of the net increase, if any, for certain limited partners) for such fiscal year are reallocated to the capital account of the Onshore GP subject to a loss carry forward provision as described in the Onshore Fund LPA. The Onshore GP may, in its sole discretion, elect to reduce or waive the incentive allocation with respect to the capital account of any limited partner of the Onshore Fund. The incentive allocations accrued by the Onshore GP for the years ended December 31, 2006 and 2005, and the period from November 1, 2004 (commencement of operations) through December 31, 2004, is noted in the table below. Such amounts are eliminated in the combined financial statements of the Icahn Investment Management Entities.

Pursuant to the Second Amended and Restated Limited Partnership Agreement of Offshore Master Fund I, dated as of January 1, 2006, as amended from time to time (the “Offshore Master Fund I LPA”), the Offshore GP is entitled to an incentive allocation.

At the end of each fiscal year of Offshore Master Fund I and at certain other times, 25% (20% in some cases) of the net increase, if any, allocated to each capital account of a fee-paying limited partner of Offshore Master Fund I for such fiscal year are reallocated to the capital account of the Offshore GP, subject to a loss carryforward provision as described in the Offshore Master Fund I LPA. The Offshore GP may, in its sole discretion, elect to reduce or waive the incentive allocation with respect to the capital account of any limited partner. The incentive allocations accrued by the Offshore GP for the years ended December 31, 2006 and

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

2005, and the period from November 1, 2004 (commencement of operations) through December 31, 2004, are noted in the table below. Such amounts are eliminated in the combined financial statements of the Icahn Investment Management Entities.

Pursuant to the management agreements with the Onshore Fund, the Offshore Fund and the Sterling Fund, Icahn Management was entitled to receive a quarterly management fee on the first day of each quarter of .0625% (2.5% per annum) of the beginning capital account of each fee-paying limited partner or shareholder in the Onshore Fund, the Offshore Fund and the Sterling Fund. Such fee has been (and may in the future be) modified or waived in certain circumstances. The management fee was prorated for partial periods. The aggregate management fees earned for 2006 and 2005 and the period from November 1, 2004 (commencement of operations) through December 31, 2004 are set forth in the table below. Such amounts are eliminated in the combined financial statements. As of August 8, 2007, New Icahn Management is entitled to receive the quarterly management fees.

For the years ended December 31, 2006 and 2005 and the period from November 1, 2004 (commencement of operations) to December 31, 2004, the amount of the management and incentive allocations earned on an unconsolidated basis were as follows (in 000s):


	Year ended December 31,				November 1- December 31,
	2006		2005		2004
Management Fees:
Onshore Fund	$	21,018	$	15,029	$	1,394
Offshore Fund		61,397		29,172		1,804
Total	$	82,415	$	44,201	$	3,198
Incentive Allocations:
Onshore Fund	$	68,867	$	21,836	$	4,361
Offshore Master Fund I		121,611		35,466		5,300
Total	$	190,478	$	57,302	$	9,661

In addition, pursuant to the provisions of a deferred fee arrangement, Icahn Management was eligible to defer receipt of all or a portion of the management fee earned from the Offshore Fund during a particular fiscal quarter in a fiscal year, and to have a portion or all of the deferred fee invested either in the same manner as the Offshore Fund’s other assets, or in another manner approved by both the Offshore Fund and Icahn Management. The value of such deferred amounts constitutes a liability of the Offshore Fund to Icahn Management. Any amounts invested under the provisions of the deferred fee arrangement continue for all purposes to be part of the general assets of the Offshore Fund and generally earn the same return as other investors (except where fees are waived), and Icahn Management has no proprietary interest in any such assets. Such liability and any appreciation thereon are eliminated in the combined financial statements.

Icahn Management elected to defer 95% of the management fees from the Offshore Fund and such amounts remain invested in the Offshore Fund for 2006 (97% and 100% for 2005 and 2004, respectively). For fiscal years 2006, 2005 and 2004, the amounts of management fees elected to be deferred were $39,126,085, $25,980,974 and $1,803,893, respectively, and the appreciation earned upon them were $19,676,902 in 2006 and $2,387,317 in fiscal 2005.

Under separate deferred compensation employment agreements, certain employees of Icahn Management are entitled to receive a percentage of the management fees. As of December 31, 2005, deferred compensation related to management fees of Icahn Management amounted to $2,284,465, which included appreciation on such deferred amounts of $193,782. As of December 31, 2006, deferred compensation related to management fees of Icahn Management which are vested amounted to $6,707,224, which included appreciation since inception on such deferred amounts of $1,694,713. Appreciation in 2006 on such deferred amounts was $1,500,931.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

Icahn & Co. LLC and certain other entities beneficially owned by Carl C. Icahn and affiliates of Icahn Management (collectively referred to herein as “Icahn Affiliates”) paid for the salaries and benefits of employees who performed various functions including accounting, administrative, investment, legal and tax services. Under a separate expense-sharing agreement, Icahn Affiliates charge Icahn Management (for periods prior to the sale on August 8, 2007) and New Icahn Management (for periods subsequent to the sale on August 8, 2007) for a portion of these expenses. For 2006, 2005 and 2004, the amounts charged to Icahn Management were $12,418,571, $9,618,702 and $830,312, respectively. Icahn Affiliates have paid rent for the occupancy of space shared by the Asset Management and GP Entities. Icahn Affiliates charge the Asset Management and GP Entities for a portion of these expenses. For 2006, 2005 and 2004, the amounts charged to the Asset Management and GP Entities were $1,426,196, $1,472,116 and $169,450, respectively. The Asset Management and GP Entities believe that all allocated amounts are reasonable based upon the nature of the services provided (e.g. occupancy, salaries and benefits, etc.).

In addition, certain expenses borne by the Asset Management and GP Entities are reimbursed by Icahn Affiliates, as appropriate and when such expenses are incurred. The expenses include investment-specific expenses for investments acquired by both the Private Funds and Icahn Affiliates which are allocated based on the amounts invested by each party, as well as investment management-related expenses which are allocated based on estimated usage agreed upon by both the Asset Management and GP Entities and the Icahn Affiliates.

Note 7 — Compensation Arrangements

The Asset Management and GP Entities have entered into agreements with certain of their employees whereby these employees have been granted rights to participate in a portion of the management fees and incentive allocations earned by the Asset Management and GP Entities, net of certain expenses, and subject to various vesting provisions. The vesting period of these rights is generally between two to seven years, and such rights expire at the end of the contractual term of each respective employment agreement. Up to 100% of the amounts earned annually under such rights may be deferred for a period not to exceed ten years from the date of deferral, based on an annual election made by the employee for the upcoming fiscal year's respective management fee and incentive allocation rights. These amounts are reinvested into the Private Funds and generally earn the rate of return of these funds, before the effects of any levied management fees or incentive allocations, which are waived on such deferred amounts. Accordingly, these rights are accounted for as liabilities in accordance with SFAS 123R and remeasured at fair value each reporting period until settlement.

Prior to the adoption of SFAS 123R, the Asset Management and GP Entities had accounted for such rights under APB 25, which measured the liability at intrinsic value. The adoption of SFAS 123R and the remeasurement of all previously outstanding rights did not have any material impact on the combined financial statements as the intrinsic value of these awards, as further described herein, approximates their fair value.

The fair value of amounts deferred under these rights is determined at the end of each reporting period based on (i) the fair value of the underlying net assets of the Private Funds, upon which the respective management fees and incentive allocations are based and (ii) the performance of the Private Funds in which the deferred amounts are reinvested. The carrying value of such amounts represents the allocable management fees or incentive allocations initially deferred and the appreciation or depreciation on any reinvested deferrals. These amounts approximate fair value because the appreciation or depreciation on the deferrals is based on the fair value of the Private Funds' investments, which are marked-to-market through earnings.

The Asset Management and GP Entities recorded compensation expense of $17,313,254, $3,308,969 and $255,162 related to these rights for the years ended December 31, 2006 and 2005 and for the period ended December 31, 2004, respectively, which is included in compensation expense in the combined statements of income. Compensation expense arising from these deferral arrangements is recognized in the combined financial statements of the Asset Management and GP Entities over the vesting period. Accordingly, unvested

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 7 — Compensation Arrangements – (continued)

balances of deferred management fee and incentive fee income allocations to employees are not reflected in the combined financial statements. Deferred amounts not yet recognized as compensation expense within the combined statements of income are $7,999,574, $3,416,729 and $483,057 as of December 31, 2006, 2005 and 2004, respectively. That cost is expected to be recognized over a weighted-average period of 4.1 years. Cash paid to settle rights that had vested and been withdrawn for the years ended December 31, 2006 and 2005, and for the period from November 1, 2004 (commencement of operations) to December 31, 2004, was $6,443,959, $954,187 and $0, respectively.

Note 8 — Partners' Capital of the Asset Management and GP Entities

Each of the Asset Management and GP Entities is organized as a limited partnership formed pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act. Limited partnership interests have been granted in the Asset Management and GP Entities to allow certain employees and individuals to participate in a share of the management fees and incentive allocations earned by the Asset Management and GP Entities. Prior to the consummation of the sale of the Partnership Interests to IE on August 8, 2007, all partnership admissions to the Asset Management and GP Entities were determined by the respective general partner entity of the Asset Management and GP Entities, each of which was principally owned by Mr. Icahn.

The Asset Management and GP Entities, individually, intend to be treated as partnerships for federal income tax purposes, and as such shall maintain a capital account for each of their partners. Each partner will be allocated an amount of the management fee and incentive allocation subject to, and as determined by, the provisions of each limited partner's respective agreements with each of the Asset Management and GP Entities. All other partnership profits and losses of each of the Asset Management and GP Entities will be allocated among the respective partners in each of the Asset Management and GP Entities pro rata in accordance with their respective capital accounts.

Income allocations to all partners in each of the Asset Management and GP Entities, except the general partner entity and any limited partnership interests held directly by Mr. Icahn, are accounted for as compensation expense as more fully described in Note 2. All amounts allocated to these partners' capital accounts and their respective capital contributions are reflected as part of compensation payable and accrued expenses and other liabilities, respectively, on the combined statements of financial condition until those amounts are paid out in accordance with the terms of each respective partner's agreement. Income payments made to the respective general partner and any limited partnership interests held by Mr. Icahn are treated as equity distributions.

Note 9 — Income Taxes

Icahn Management (and New Icahn Management subsequent to the sale on August 8, 2007) is subject to New York City unincorporated business tax (“UBT”) on a portion of its income and has provided for applicable income taxes based on a statutory rate of 4.00%. The Asset Management and GP Entities recorded income tax provisions of $1.8 million, $0.9 million, and $0.1 million on pre-tax gain of $261.4 million, $85.5 million and $11.5 million for the years ended December 31, 2006 and 2005 and the period ended December 31, 2004, respectively.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 10 — Commitments and Contingencies

Indemnifications

In the normal course of business, the Onshore Fund and each Offshore Master Fund enter into contracts which provide a variety of general indemnifications. Such contracts include those with the Onshore Fund’s or each Offshore Master Fund’s Administrator, trading counterparties and the Asset Management and GP Entities. Any exposure to the Onshore Fund and the Offshore Master Funds under these arrangements would involve future claims that may be made against the Onshore Fund or each Offshore Master Fund. No such claims have occurred, nor are they expected to occur. Therefore, the Onshore Fund and the Offshore Master Funds have not accrued any liability in connection with such indemnifications.

Litigation

The Icahn Investment Management Entities are, from time to time, defendants, individually or in the aggregate, in legal actions from transactions conducted in the ordinary course of business. Management, after consultation with legal counsel, believes the ultimate liability arising from such actions that existed as of December 31, 2006, if any, will not materially affect the Icahn Investment Management Entities’ results of operations, liquidity or financial position.

Note 11 — Subsequent Events

Subsequent to December 31, 2006, through the date of this report, the Onshore Fund received $395.5 million in capital contributions from external investors, of which $10.5 million was received prior to December 31, 2006 and is reflected as a liability in the statement of financial condition. In addition, the Onshore Fund received $467.0 million in capital contributions from IE on which no management fees or incentive allocations are applicable. As disclosed in its quarterly report on Form 10-Q for the quarter ended June 30, 2007 filed with the SEC on August 9, 2007, IE intends to invest an additional $233.0 million for a total of $700.0 million in the Private Funds. Subsequent to December 31, 2006, through the date of this report, there were partnership withdrawals from the Onshore Fund in the amount of $6.2 million.

Subsequent to December 31, 2006, through the date of this report, Offshore Master Fund I received $748.0 million in subscriptions from Offshore Master Fund I limited partners (including investors in the Offshore Fund), and paid redemptions of $4.4 million.

Offshore Master Fund II, a Cayman Islands exempted limited partnership, was formed on January 18, 2007. Offshore Master Fund II commenced operations on February 1, 2007. Icahn Fund II Ltd., a Cayman Islands exempted limited liability corporation, invests substantially all of its assets in Offshore Master Fund II. Koala Holding Limited Partnership, a Delaware limited partnership (“Koala Holding”), is also an investor in Offshore Master Fund II. The Offshore GP is the general partner of Offshore Master Fund II and is responsible for the management and investment decisions of Offshore Master Fund II. Subsequent to December 31, 2006, through the date of this report, Offshore Master Fund II received $420.4 million in capital contributions from external investors and $404.3 million from affiliated parties. After these contributions, Offshore Master Fund II has unfunded capital commitments of $105.1 million from external investors and $100.9 million from affiliated parties.

Offshore Master Fund III, a Cayman Islands exempted limited partnership, was formed on March 7, 2007. Offshore Master Fund III commenced operations on April 1, 2007. Icahn Fund III Ltd., a Cayman Islands exempted limited liability corporation, invests substantially all of its assets in Offshore Master Fund III. Koala Holding is also an investor in Offshore Master Fund III. The Offshore GP is the general partner of Offshore Master Fund III and is responsible for the management and investment decisions of Offshore Master Fund III. Subsequent to December 31, 2006, through the date of this report, Offshore Master Fund III received $160.0 million in capital contributions from external investors and $161.3 million from affiliated parties. After these contributions, Offshore Master Fund III has unfunded capital commitments of $40.0 million from external investors and $40.2 million from afffiliated parties.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

Note 11 — Subsequent Events – (continued)

Icahn Cayman Partners L.P., a Cayman Islands exempted limited partnership (“Cayman Partners”), was formed on February 23, 2007 and invests substantially all of its assets in Offshore Master Fund I. The Offshore GP is the general partner of Cayman Partners. Subsequent to December 31, 2006, through the date of this report, Cayman Partners received $15.0 million in capital contributions from external investors.

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF FINANCIAL CONDITION
(In 000s)


	March 31, 2007		December 31, 2006
	(Unaudited)
ASSETS
Cash and cash equivalents	$	9,658	$	4,822
Cash held at consolidated affiliated partnerships and restricted cash		1,163,532		1,106,809
Securities owned, at fair value		2,884,977		2,757,229
Unrealized gains on derivative contracts, at fair value		150,003		80,216
Accrued interest and dividends receivable		12,383		5,061
Due from brokers		1,956,905		838,620
Receivable from sales of securities		20,169		21,058
Management fees receivable, related parties		520		—
Prepaid expenses and other assets		406		1,312
Receivable from affiliates		1,407		29
Total assets	$	6,199,960	$	4,815,156
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Accounts payable	$	3,703	$	41
Accrued expenses and other liabilities		16,025		14,671
Compensation payable		16,808		13,479
Income taxes payable (including deferred taxes of $3,229 and $2,504)		3,253		2,528
Securities sold, not yet purchased, at fair value		566,067		691,286
Unrealized losses on derivative contracts, at fair value		15,487		1,770
Accrued interest and dividends payable		2,158		4,737
Payable for purchases of securities		42,910		11,687
Subscriptions received in advance — consolidated affiliated partnerships		208,130		66,030
Redemptions payable — consolidated affiliated partnerships		115		23,830
Total liabilities		874,656		830,059
Commitments and contingencies (Note 7)
Non-controlling interests in consolidated affiliated partnerships		4,857,502		3,628,470
Partners’ capital
Limited partners		106,346		84,313
General partner		361,456		272,314
		467,802		356,627
Total liabilities and partners’ capital	$	6,199,960	$	4,815,156

The accompanying notes are an integral part of these combined financial statements

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ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF INCOME
(In 000s)


	Three Months Ended March 31,
	2007			2006
	(Unaudited)
Revenues
Management fees, related parties	$	811		$	—
Consolidated affiliated partnerships:
Realized gains — securities		265,646			142,962
Unrealized (losses) gains — securities		(7,916	)		23,858
Realized gains (losses) — derivative contracts		65,827			(14,548	)
Unrealized gains — derivative contracts		40,952			11,972
Interest, dividends and other income		38,947			12,502
Other income		120			44
Total revenues		404,387			176,790
Expenses
Compensation		12,221			5,680
Shareholder actions		490			1,409
Rent		476			354
Professional fees		1,032			38
Office, administrative and other		130			54
Consolidated affiliated partnerships:
Interest expense		3,214			1,452
Dividend expense		538			974
Other investment expenses		7,275			494
Filing fees		1,185			—
Administration fees		732			460
Professional fees and other		98			195
Total expenses		27,391			11,110
Income before income taxes and non-controlling interests in consolidated affiliated partnerships		376,996			165,680
Less: Income attributable to non-controlling interests in consolidated affiliated partnerships		(265,072	)		(122,611	)
Income taxes
Current		(124	)		—
Deferred		(625	)		(319	)
		(749	)		(319	)
Net Income	$	111,175		$	42,750

The accompanying notes are an integral part of these combined financial statements

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL
Three Months Ended March 31, 2007
(Unaudited)
(In 000s)


	General Partner		Limited Partners		Total
Partners’ capital — December 31, 2006	$	272,314	$	84,313	$	356,627
Allocation of net income		89,142		22,033		111,175
Partners’ capital — March 31, 2007	$	361,456	$	106,346	$	467,802

The accompanying notes are an integral part of these combined financial statements

TABLE OF CONTENTS

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2007 and 2006
(Unaudited)
(In 000s)


	Three Months Ended March 31,
	2007			2006
Cash flows from operating activities:
Net income	$	111,175		$	42,750
Adjustments to reconcile net income to net cash used in operating activities:
Income attributable to non-controlling interests in consolidated affiliated partnerships		265,072			122,611
Deferred taxes		625			319
Realized and unrealized gains on investments		(257,730	)		(166,820	)
Purchases of securities		(1,486,871	)		(1,365,104	)
Proceeds from sales of securities		1,652,554			906,949
Purchases to cover securities sold, not yet purchased		(552,534	)		(133,589	)
Proceeds from securities sold, not yet purchased		391,614			132,850
Changes in operating assets and liabilities:
Cash held at consolidated affiliated partnerships and restricted cash		(56,723	)		82,549
Due from brokers		(1,118,285	)		164,447
Receivable from sales of securities		888			(49,512	)
Management fees receivable from affiliates		(520	)		—
Unrealized gains on derivative contracts		(69,787	)		(4,299	)
Accrued interest and dividends receivable		(7,321	)		(515	)
Receivable from affiliates		(1,378	)		(470	)
Prepaid expenses and other assets		906			33
Accounts payable, accrued expenses and other liabilities		5,016			1,340
Compensation payable		3,329			1,295
Income taxes payable		100			—
Due to brokers		—			226,545
Payable for purchases of securities		31,222			11,074
Unrealized losses on derivative contracts		13,717			(7,618	)
Accrued interest and dividends payable		(2,579	)		1,018
Net cash used in operating activities		(1,077,510	)		(34,147

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 24, 2007

ICAHN ENTERPRISES L.P.

767 Fifth Avenue, Suite 4700, New York, NY 10153

(212) 702-4300

American Real Estate Partners, L.P.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF FINANCIAL CONDITION December 31, 2006 and 2005(In 000s)

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF INCOME Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004 (Commencement of Operations) to December 31, 2004 (In 000s)

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004 (Commencement of Operations) to December 31, 2004 (In 000s)

ICAHN INVESTMENT MANAGEMENT ENTITIES

COMBINED STATEMENTS OF CASH FLOWS Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004 (Commencement of Operations) to December 31, 2004 (In 000s)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 1 — Organization

Basis of Presentation

Sale of Partnership Interests to Icahn Enterprises L.P.

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 1 — Organization – (continued)

Nature of Businesses

Consolidated Onshore GP and the Onshore Fund

Consolidated Offshore GP, the Offshore Fund and the Offshore Master Funds

The Sterling Fund

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies

Consolidation and Basis of Presentation

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Use of Estimates

Revenue Recognition

Cash and Cash Equivalents

Cash Held at Consolidated Affiliated Partnerships and Restricted Cash

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Shareholder Actions

Compensation and Benefits

Income Taxes

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Non-controlling Interests in Consolidated Affiliated Partnerships

Allocation of Net Profits and Losses in Consolidated Affiliated Partnerships

Investments and Related Transactions

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

Recently Issued Accounting Pronouncements

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 2 — Summary of Significant Accounting Policies – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 3 — Securities Owned and Securities Sold, Not Yet Purchased – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 4 — Investments in Variable Interest Entities

Note 5 — Concentration Risk, Financial Instruments and Off-Balance Sheet Risks

Financial Instruments, Off-Balance-Sheet Risk and Concentrations of Credit Risk (the Private Funds)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 5 — Concentration Risk, Financial Instruments and Off-Balance Sheet Risks – (continued)

Note 6 — Related-Party Transactions

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 6 — Related-Party Transactions – (continued)

Note 7 — Compensation Arrangements

ICAHN INVESTMENT MANAGEMENT ENTITIES NOTES TO COMBINED FINANCIAL STATEMENTSDecember 31, 2006, 2005 and 2004

Note 7 — Compensation Arrangements – (continued)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

COMBINED STATEMENTS OF FINANCIAL CONDITION
December 31, 2006 and 2005
(In 000s)

COMBINED STATEMENTS OF INCOME
Years Ended December 31, 2006 and 2005 and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)

COMBINED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)

COMBINED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2006 and 2005, and the Period from November 1, 2004
(Commencement of Operations) to December 31, 2004
(In 000s)

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

ICAHN INVESTMENT MANAGEMENT ENTITIES

NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

COMBINED STATEMENTS OF FINANCIAL CONDITION
(In 000s)

COMBINED STATEMENTS OF INCOME
(In 000s)

COMBINED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL
Three Months Ended March 31, 2007
(Unaudited)
(In 000s)

COMBINED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2007 and 2006
(Unaudited)
(In 000s)