FTAI Infrastructure (FIP) 31 Oct 242024 Q3 Earnings call transcript

Hello, and welcome to FTAI Infrastructure Third Quarter 2024 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Alan Andreini, Investor Relations.

You may begin.

Thank you, Towanda. I would like to welcome you all to the FTAI Infrastructure Third Quarter 2024 Earnings Call.

are Christopher, the the today Infrastructure; of here Scott and company's me Ken CEO Nicholson, FTAI Joining CFO.

download we We and have please being the you note which open call so. and is public our presentation have to encourage to press release that webcast. already posted on our Also, an done if you investor in is mode not this website, listen-only

non-GAAP those financial adjusted In to measures the addition, discussing we comparable including of will call be the directly EBITDA. The most some reconciliations can found measures be the today, measures earnings during GAAP in supplement.

turn nature certain actual Ken, I quarterly statements are filed differ the to materially encourage uncertain and and I earnings. These presentation the regarding statements, our forward-looking would in that factors will call financial today future risk SEC. out you contained forward-looking to and investor be disclaimers may report statements point Before press measures over with made our and the including release non-GAAP review results. from the their We like by review to regarding to in statements

Now the like to to over would call I Ken. turn

Good Thank our quarter welcome earnings and All you, third morning, call. to right. XXXX Alan. everyone,

be I'll For the earnings website. you supplement, which find to call today, posted referring the can our on

on dividend record Before getting of paid to quarterly I'm to XX a share the financials, report pleased holders be that into authorized on the XX. per our Board $X.XX has to November November

year-over-year opportunities quarter We're of the XXXX but quarter, more Now the quarter X% new up we're up EBITDA ahead. the with $XX.X that XX% quarterly from about to of million in on results. a pleased from the of third We excited the results, adjusted third lay recorded second even XXXX. the and record

we for of $XX and line of annual approximately portfolio, terms new across Across in pursuing EBITDA, million beyond. Third ever. events as with time representing spin-off is the we're run strong us company These successful for our estimates million. And companies data we potential as positioning number contracted exclude our commitments, impact $XXX when we in established EBITDA combined $XXX was such act acquisitions and or current may a contracts Ridge. executed opportunities significant now estimate our growth our substantial next converting are into developments EBITDA tuck-in or Long any with at which annual one annual as approximately a momentum of of have of total Today, company. quarter new under sight of million. pipeline new of year any incremental represents since at of than business we more the in business, the these opportunities Transtar we acquisitions business excess investments If on center rate

another adjusted Transtar each while revenue posting of million Carloads the delivered strong the $XX.X continued terms and segment, highlights grow. EBITDA. In of held rates third-party to steady for of quarter, quarter

value and to Our range investments to the XX% organic in growth through annually EBITDA focus is accretive and further drive acquisitions. maintain Transtar creation of

resources of X added to XX-year and EBITDA EBITDA actively $XX.X and pursue X-year of nay was million annual a on contracted well time budget the service team summer they number projects total our spring in projects commencing contribute revenue We $XX of acquisition have the XXXX. Once proceeding will of of the as million and ensure to X is and Jefferson, on for positioned At these for terms. are we operational, Construction under continue offsets to arise. a on quarter. M&A opportunities to act

and if quarter products. These both execution successfully of at II Repauno, with At long-term business During third involving pivotal $XX of annual opportunities, new conventional and another QX, entered negotiations represents we Phase EBITDA projects our into one number also transloading contract system. our the a contracted, advanced million Jefferson. of the for of renewable on first was volumes a

at in the markets we contracts system's for perfect of financing for and asset say plans On quarter, extremely potential. business debt units. the the have place first our Ridge, to $XX.X capacity. of plans for to construction to tremendous about shortly, construction quarters the raise months and the has Long X $XXX for finally, We tax-exempt at billion September hand, year-end. And suffice plan landscape the -- have at are ambitious Ridge the the Ridge additional factor XX, debt in corporate discussions by coming was to while us the We of commercial was we have upside XX%. $X.X generated the million in upcoming contract capacity of total nearly XXX all of and our system we rest but in the our a million had of level, active reflecting debt million debt coming positioning the financing favorable of I'll Long multiple several is balance in remainder EBITDA Long talk at in at Phase sheet. With here with the believe parties

in completely be I'm briefly at to talk while debt coming approximately debt-free, million $XXX Jefferson of and about planning months, Repauno. number $XX and accretive debt was was of each. to continues a the We're going financings million Transtar

on all launched The debt Repauno, construction. fully will fund II required issue we needs. the and slated December. We'll is November to in million in close low-cost financing should Phase to fund at taxes capital First, of $XXX be

in higher and or plan at flow existing we series arrange we opportunity at Long of to today equal order to refinancing required price cash hedges financial funding Ridge well anticipate debt prices. this power be approximately power generate to our under we of entering received into and current existing we're market megawatt have Ridge. Long specifically, reflect for therefore, the arrangements the that the in $XX the new prices. Depending we Ridge, our sell contracts build upon started in will pricing conjunction the results per reset current power new higher hedges closer by the price figure overall financing, initial price plant. Those opportunity existing still final an hedges impact the explain are a we conjunction below that to Long are terms hour, and power the to Ridge, the To at market of reducing we In were entered at we substantial. hedges power debt, at a more a Second, fixed time debt, meaningfully construction of place hedges, today into sale our and into providing new the financial convert power that to with set the refinance also and with charges flexibility. In to preparing Long more financing

And Our cash credit plan goals Ridge refinance finally, power for completion our Repauno accretive to enhancing, hedges existing and and Long reduce to flow corporate shareholders. to fixed upon expect prior after preferred new common consummate both the debt year-end. of service we bonds to financings, be of and and which the financing in increase to we charges

remain EBITDA held the environment the in rates also and for to quarter, adjusted million questions. steady to will talk with through the largely revenue and compared we Transtar, for detailed at plan for Transtar for million the posted of and other of unchanged of $XX.X $XX.X X going on for then revenue segments, quarter. volumes expect Slide supplement, and it the costs $XX.X fuel the Operating material stable I'm results expenses and million of over of QX adjusted average rates EBITDA the remainder million $XX.X volumes were I turn as our with year. each to QX. Carload Starting of strong and in were of costs and

to continues in ramping At this Michigan, Third-party customer new rail has next quarter we're to driven transload for facility currently demand take number slots maintaining XX initial transloading EBITDA as XX anticipating our organic from higher car grow come in the our third rate quarter railcar a and repair slots expecting capacity. All fourth completing activity an Pittsburgh locations transloading roughly opportunities exceeded to by our the quarter growth arise. to with for than and all year they to existing of up. facility with expansion growth in, incremental in we're customer as XX% slots EBITDA transshipments truck

Jefferson their QX. Lower volumes shortfalls. minimum of Beaumont revenue QX versus million of for million and quarter to trains, the impact volume adjusted $XX.X of units one $XX.X of a on little in at products our Reduced all lower revenue $XX.X to crude were majority and the revenue had EBITDA maintenance requirements, Now million Jefferson. of of Exxon result of contain of on which in fewer as million performed which refined well $XX.X volumes as EBITDA now generated as mitigated volume in we oil contracts QX. receive production expect exports as

quarter in throughput return day. barrels per expect We the over fourth to to XXX,XXX

we EBITDA $XX negotiations Our million in handle currently and of commenced the year, with products annual X spring contracts and contracts and refined in summer conventional for renewable are to additional multiple parties representing fuels. crude, late-stage incremental of next

annual If targets. we're of $XXX prior we'll in converting post opportunities exceeding EBITDA business to far wins, in our excess successful million, these

first our million assuming $XXX during II as be Phase can a complete. expect rates markets the additional annual consistent EBITDA with during we're Repauno. in X% to Repauno. will $XX equity market, of interest X to already we exempt QX, expecting commenced, described the construction II rates the number to Phase utilization the on million accretive of environment, Now execute funded and costs of Phase the X%, II contract range I of those to Total We system the value to million $XX for signed making the quarter. Construction highly earlier. In contracts of for project tax current capital once estimated in fourth our and Phase full system export has executed, contribute

to we're While in development Phase advancement next additional at the come. X including storage months of current for remains which permitting our we about complete of Repauno expect to priority, phase the the underground excited

million Ridge out with Long EBITDA closing versus $XX.X QX Long Ridge. $X.X in in in million generated QX. Finally,

to continue we As the entering the capacity will the was quarter be and share. value will year in advance power revenue profile data for power behind-the-meter with capacity down the Long cash in XX% excited number current of production up, center refinancing quarter $XX the are data results including revenue, coal-fired at I annual Long anticipated to including that capacity discussions, we're the at described upgrade for most megawatts increase anticipate effect lower capacity next flow potential hyperscalers EBITDA previously managed million million XXXX. advancing year centers Long and price surge our the notably the Ridge. projects, sale well $XX ahead. higher represent Ridge. The the a plants. Higher about pricing the We're increase Meanwhile, mandated take a and in described, power as number both during pleased the that of transformation significantly EBITDA first have driven to gas of at power together while of state and by June with auction flow XXX remain the related we plant years continued be levels environment. remainder quarter, to XX% for by wrap in plant one recent power indications or and in of with of revenue and cash developments as the for gas currently during come, a to XXXX higher initiatives into our retirements All half more on of factor demand at or of proposition transactions negotiations for To developers. Based and Ridge the XXXX to

turn call the Alan. back to will I Now

you, Towanda, Thank you open the now call Q&A. may Ken. to

[Operator Instructions]

Compass question with Bologna the Our of comes line Point. Giuliano first from

like lot all Congratulations new a seems the last quarters. on in progress couple initiatives working the of of on, you're

contracts Long because the bit you're curious $XX-plus little talking in us seems like supplement. a question, you're if to get of potential of incremental give annualized new that -- first about the here And the that on yes then already can all million million accretion priced talking the EBITDA it a As is the where $XX-plus sense quarter, and about. Ridge expand maybe financing I'm you a

to also the could what -- financing sense see like and look So that structure I'd get be curious of a there? upside

flow Yes, Yes, its question. generation it cash absolutely. would report the Giuliano, for you're thanks accretive for share. It and will right. XX% be what the meaningfully to

into started I the debt, raised we million construction $XXX Just to sale when first hedges entered construction. And and as of the these context, of revenue fix to some fund with debt the plants, enhance of Ridge you under give debt we power Long we credit agreement. part as that required said, to

a per megawatt. megawatt. a in steady for few per XXs the those low is closer to of As but $XX price weeks months. changes at swaps been -- entered day, That now into I it's Today, described, were $XX number pricing in at every

Assuming that to $XX level, the existing pretty at we There enter at Ridge swaps. terminating hour Long cost megawatt is approximately a into incremental $XX new swaps per is annually, EBITDA significant. the million

$XXX well And swaps. cost but over so incremental financing in amount incur in of excess we fund transaction. The highly it incremental is million would a terminating cost, the to time is refinanced the of more EBITDA those termination accretive the of than

So it year. attractive is suspect and debt Isolation overall reduce a just will the new very, placed between also borrowing. the transaction. the will cost very be financially the I of end now of

pro the if a basis. basis. think today high a And -- can Xs forma in we on low is not a be Xs, Our handle blended debt has we existing on X it high on the

accretive. So we to very expect be that financing

very company And over appreciate that. then I the level. That's maybe turning helpful. holding to

is you think obviously lot can the since better helped curious I'm holdco years traded -- debt XX.X% today. refinance it holdco you where ago. a was Your you notes

Yes.

I think did we with a refinancing handle. we could now a refinance today, right X if

Our stock, it preferred is existing bonds XX.X% coupon, our a today have XX%.

Xs So attractive. extremely of in that's in itself, refinance can if we the and

I the those because do enhancing immediately better even the any independently we us after are to think if credit are and transactions bring Ridge Long we story. transaction whole behind Repauno

thereafter. plan. Repauno be of Ridge and refinancing X soon to So The possible our that's by transactions humanly as the sequencing fit as immediately Long followed of the

the And on congrats all progress working assets. on different all the

the from with McKenna comes JMP. Brian next Citizens of question line Our

So I Transtar. few questions had a on

Steel First, have the on U.S. thoughts you year-end? on any here? do updated implications potential from updates And transaction any just the

gets that it I a you whether just said, I'm That start Nippon approval. to going tell The just -- And I'll on final in by view obviously saying as it's get to the they or to One significantly have other, invest uncertain [ approved a can't Pittsburgh second. won't Nippon the in ] way say would on intend it's if Transtar. complex. is the better because us material slightly impact I for Valley Mon our to

to Nippon And a weeks the expect meaningful -- we you good been more transaction transaction I itself, the the or not the optimistic that saw, to so much approved sure be but labor for -- close Nippon about terribly supported approved. downside that end Transtar Transtar. But to how being finally on just that's obviously of a not few am don't day, and in material and event at is unions the acquisition. I'm that thing for around have approved the if recommended supported the came ago, difficult government Nippon transaction. the

So number is unions, there the the it negotiations sounds of a in support fair of -- now union with around that like hand. headlines was and

the I is optimistic Nippon at for approved, event we on My So think in understanding if material we're approval is, at In don't And stage, time guess, that's had to and has a December, not it. some development. Transtar. said, that's impact this sloted a is what expecting, decision business big we're [indiscernible] about it I in a as December. slot were

Yes.

And a follow-up Got That's helpful. guess it. as on then Transtar well. Okay. I

around potential You've in clearly M&A for been talking Transtar. the about and

be So relative where ultimately, you've laid your on could XX% timing some to stand around this front? growth potential do then things the of think transaction? And expectation annual transactions? a And of about to Is how accretion organic what's there M&A this from a target any additive way the out? the

be It meaningful. could

transaction. currently of some market and on to is multiple you for do is the math, a of see X multiple couple opportunities, base transactions, are middle think combined It's if guess are no slightly just -- will rail EBITDA million one in acquisitions, EBITDA. the the be And and in is smaller EBITDA, I these in an to value million and $XX would $X migrate X if is will paying million at trade bit freight investments the mid-double market. And we $XXX part innings, processes. And those it's the will, a that, I is activity. you its $XX an external and of well-established in a million, portfolios at platform XXx transactions. creation. them pretty of describe acquisitions, them We we tell as plan. negotiated of $XX the amazing businesses, that side, the looking It at diversifies always I EBITDA of where there million M&A TranStar digits. looking take future would on in We're is increase of acquire And competitive you part I leverage a at annual That it a that revenue of one larger. a put of are terms Look, meaningful. multiple thesis significant Transtar. business are through more

the for plus a And This grown there M&A still organic I owned business It years. value proposition. has going annual years is X in growth past consistently the several CAGRs. for years, to but a of at XX% is to now be certainly we've is X over terms at changer come, think game that EBITDA Transtar

So on. we are focused extremely

next comes Elmaghrabi the line question of BTIG. from Our Sherif with

First EBITDA that contracts could you get remains next million included to from with new them unpack line? across The and what what Jefferson. $XX the in contracts investment are of year,

to happy contracts. Two do Yes, that.

X on April a is $X for about of generates oil. year, next that first crude contract X with of and The of million It's major refineries, EBITDA. X handling X-year a annual our contract commences

$XX million $X that's of million. So the

over funded. ammonia major The X, on the $XX they quarter. time, commences any at end the delay term. of XX-year second a in ammonia don't advanced contract. It's of represents I tax this in minimum Both see pretty are projects. money fully that a on And export, contract. a the producer It's XX-year We escalators well an annually contract are and million We're of July great with global with it's and budget. markets deal with a projects both the stage. transloading is some EBITDA contract great, ammonia second risk raised

And online. then so a construction completing contracts and bringing the the it's of matter just

what associated contract in lead That's helpful. that queue, center data the I'm role there's getting half GE's mentioned of any? their And year. Ridge, could service first wondering On And especially into given growing then Long the time on they a a if the backlog. if next call, see in with operating,

we is is determined generate of turbine The course, software is that of There generations XXX needs that today, a require. happen megawatts. megawatts. need allow at is, by than It to today other is the megawatts there additional We no approval it that of cost capable software the -- or GE bought part There XXX and incremental we mechanical turbine. a as to GE. nothing could from change just generation XXX Yes. generating to regulates turbine no power in component megawatts. literally no do is to increase day. We it just the software a change. is regulatory the to reprogramming There's XX

it to don't we outside technology, on the connect of from upgrade. being rely anything GE's So GE

queue. no the I'm questions would now back gentlemen, showing and turn over I further Ladies call in like the Alan. to to

forward for call. Towanda, all you We Thank look conference updating participating after you thank to QX. you, and today's in

you conference gentlemen, this and your Ladies Thank participation. concludes call. today's for

disconnect. You may now