FTAI Infrastructure Inc. Q3 FY2025 earnings call

• Quarter was active: Acquired Wheeling & Lake Erie Railway, West Virginia gas production started. Adjusted EBITDA $70.9 million, up 55% QoQ and nearly double YoY.
• Rail segment: Acquired Wheeling, which is exceeding expectations. Long Ridge gas production over 100,000 MMBtu/day. Jefferson preparing for revenue service. Repauno Phase 2 construction progressing, Phase 3 permit received.

Rail

• Q3 revenue: $61.7 million, adjusted EBITDA: $29.1 million. Adjusted EBITDA included $8.4 million from Wheeling for 5 weeks, with standalone Wheeling generating ~$20 million adjusted EBITDA for full quarter. Transtar had stable carloads, coke volumes affected by U.S. Steel incident but rebounding. Wheeling volumes and revenues up ~10% vs 2Q, EBITDA up 20% vs 2Q.

Long Ridge

• Q3 EBITDA: $35.7 million, up from Q2. Producing over 100,000 MMBtu per day in West Virginia gas, expecting $160 million annual EBITDA run rate in Q4. Pursuing strategic alternatives including potential monetization.

Jefferson

• Q3 revenue: $21.1 million, adjusted EBITDA: $11 million. Volumes slightly lower due to softer crude oil imports but offset by higher average rates. Has 2 contracts representing $20 million of incremental annual adjusted EBITDA commencing soon.

Repauno

• Phase 2 construction progressing, with 2 contracts and 1 LOI for ~$80 million annual EBITDA. Phase 3 cavern system permit received, significant expansion with economics expected to be compelling.

• Expect annual adjusted EBITDA over $450 million excluding organic growth. Results to continue growing with full contribution from Wheeling and West Virginia gas. $20 million annual savings from Wheeling and $80 million from Repauno/Jefferson already in place.

• Federal government shutdown may affect Surface Transportation Board (STB) approval timeline for Wheeling acquisition.
• Uncertainty in execution of synergies between Wheeling and Transtar, and in strategic alternatives for Long Ridge.

Q: Congrats on the quarter and transition to operating company. Are you expecting material increases in SG&A?

A: Fundamentally no, G&A is more fixed, should stay relatively flat. Q4 may have slight end-of-year adjustments but aggregate expense expected consistent.

Q: Examples of synergies between Wheeling and Transtar?

A: $20 million cost savings and efficiencies, including combined purchasing power and elimination of redundant expenses. Also network optimization opportunities like keeping volumes on Wheeling system longer for more revenue.

Q: Updated timeline for STB approval of Wheeling acquisition?

A: Still reasonable expectation, STB had target end of November, priority for STB, expect green light soon after government reopens.

Q: Cash generation in Rail segment and uses of excess cash?

A: Rail segment EBITDA ~$40 million in Q3. Cash available for parent, initially for debt service, with excess likely used for deleveraging.

Q: Next steps for Repauno Phase 3 and CapEx?

A: Finalize construction contracting, ~$200 million per cavern, timing ~2-3 years to build, economics compelling with ~$70-80 million annual EBITDA.

Q: Thinking about Long Ridge strategic alternatives and integrated gas?

A: Broad spectrum of potential buyers, interest in whole asset including gas, power plant, and land. Integrated gas is differentiator and driver of value, buyer universe appreciates integrated aspect.