Good day and welcome to the First Quarter 2025 FTAI Infrastructure Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call is being recorded. I'd like to turn the call over to Alan Andreini, Investor Relations. Please go ahead.

Thank you, Michelle. I would like to welcome you all to the FTAI Infrastructure earnings call for the first quarter of 2025. Joining me here today are Ken Nicholson, the CEO of FTAI Infrastructure, and Buck Fletcher, the company's newly appointed CFO. We have posted an investor presentation in our press release on our website, which we encourage you to download if you have not already done so. Also, please note that this call is open to the public in listen-only mode and is being webcast. In addition, we will be discussing some non-GAAP financial measures during the call today, including adjusted EBITDA. The reconciliation of those measures to the most directly comparable GAAP measures can be found in the earnings supplement. Before I turn the call over to Ken, I would like to point out that certain statements made today will be forward-looking statements, including regarding future earnings. These statements by their nature are uncertain and may differ materially from actual results. We encourage you to review the disclaimers in our press release and investor presentation regarding non-GAAP financial measures and forward-looking statements and to review the risk factors contained in our quarterly report filed with the SEC. Now, I would like to turn the call over to Ken.

Okay, thank you, Alan. Good morning everyone and welcome to our earnings call for our first quarter of 2025. As we typically do for today's call, we'll be referring to the earnings supplement, which you can find posted on our website. Before digging into the quarterly results, I'm pleased to report that our board has authorized another quarterly dividend of $0.03 per share to be paid on May 27 to the holders of record on May 19. I'd also like to take a minute to welcome Buck Fletcher to the company. Buck joined us officially as our new CFO in late March, and we’re thrilled to have him on board. We have tremendous opportunities ahead of us on several fronts, including a number of financial and strategic objectives, and Buck comes to us with a skill set and experience that will certainly help us accomplish it all. Now, on to the financial results. Adjusted EBITDA was $35.2 million for the first quarter of 2025, up 21% from the fourth quarter, and up 29% from the first quarter of last year. The quarter was a highly productive one, especially at our Long Ridge business unit where we completed a series of important transactions that have already started to generate materially higher reported financial results. As a result of the Long Ridge transaction, we recorded a non-cash gain of $120 million, which is reflected in our financial statements, but we're excluding it from adjusted EBITDA in today's financial discussion for comparative purposes. The gain we recorded was related to purchase accounting adjustments as a result of our acquisition of our partner's 49.9% interest in late February and the resulting consolidation of Long Ridge into our financial statements going forward. We are extremely optimistic about the year ahead. As a result of the Long Ridge activity, as well as a number of other developments, we expect 2025 to be transformational for our company. As the bar chart on the right side of Slide 3 illustrates, we continue to have a line of sight across our portfolio on approximately $190 million of incremental locked-in annual EBITDA under executed agreements, which when combined with our first quarter results represents total company annual EBITDA of over $330 million. And the pipeline for new business continues to be healthy. If we're successful in converting new opportunities into contracted business, we continue to estimate annual EBITDA potential in excess of $400 million. Our $400 million target excludes the impact of any new investments or acquisitions we may act on, such as acquisitions at Transtar or data center developments at Long Ridge. On Slide 4, I'll briefly talk through the key highlights at each of our companies. At Transtar, adjusted EBITDA of $19.9 million was up slightly from the fourth quarter as volumes remained steady, notwithstanding the uncertain environment surrounding tariffs and the impacts on global trade. So far in the second quarter, we continue to see stable volumes from our core U.S. steel business, and we remain focused on driving growth from third parties as well as through strategic investments. At Long Ridge, reported EBITDA for the quarter was $18.1 million excluding the non-cash $120 million gain, which I referred to previously. Importantly, the first quarter's results reflected only a portion of the impact of the transactions we closed in late February. We typically don't provide monthly results, but to give you a sense of the current run rate at Long Ridge, EBITDA for the month of March, which fully included the impact of the transactions, was over $10 million, approaching $130 million on an annualized basis. By mid-year, we expect Long Ridge to reach an annual run rate EBITDA of approximately $160 million, which includes $30 million of annual EBITDA from higher capacity revenue, which starts on June 1st of this year. At Jefferson, EBITDA was up year-over-year, but slightly lower versus last quarter as we had 4 storage tanks off lease during the quarter while we transitioned them to long-term service under a new, more profitable contract that commenced on April 1st. EBITDA for the quarter would have exceeded $10 million had we had those 4 tanks on lease for the quarter. It's a big year ahead for Jefferson as we have $25 million of long-term annual EBITDA commencing this year under 3 contracts, all with minimum volume commitments. And at Repauno, we recently launched the financing for our Phase 2 transloading project. We're issuing $300 million of tax-exempt debt to fund construction and a number of reserve accounts and also refinancing existing debt with a new taxable term loan. Importantly, we recently signed an additional letter of intent for our Phase 2 project, bringing our total volumes under contract and LOI to just over 70,000 barrels per day and representing a total of approximately $80 million of annual EBITDA. Our new outlook is up $30 million from estimates we provided last quarter. Revenue from Phase 2 will commence upon completion of construction expected in late 2026. I'll briefly walk through the balance sheet before getting into our company's quarterly results. We reported total debt of $2.8 billion at March 31. Debt at the corporate level is unchanged from last quarter at $572 million, with the rest of our debt at our business units non-recourse to FIP. Transtar continues to be completely debt-free, while approximately $975 million of debt was at Jefferson, and $73 million was at Repauno. We now consolidate the full balance sheet of Long Ridge and reflected total Long Ridge debt of $1.1 billion on March 31. Upon completion of the Repauno financing, which we are planning for this month, we plan to refinance our corporate bonds and existing preferred stock in another accretive financing, which will reduce fixed charges and increase cash flow after debt service for common shareholders. Now, on to the detailed quarterly results at each of our segments. Starting with Transtar on Slide 7 of the supplement. Transtar posted revenue of $42.6 million and adjusted EBITDA of $19.9 million in Q1 compared with revenue of $43.3 million and adjusted EBITDA of $19.4 million in Q4. Carloads, average rates, and revenues for Q1 were largely unchanged versus last quarter. Operating expenses also continued to be stable as fuel costs and other material cost items have been largely unchanged. We expect third-party customer activity to pick up in the months to come, and we now have near-term line of sight on over a dozen third-party opportunities across Transtar's railroads, representing annual revenue of approximately $20 million and annual EBITDA of at least $10 million. Our strategic activity continues to progress. Our M&A efforts are focused on the acquisition of complementary railroads that diversify our revenue and commodity base and open up additional growth opportunities through an expanded platform. One of our primary goals has been to leverage Transtar to make highly accretive investments, and I'm confident we'll be successful in doing so this year. Next, on to Long Ridge, where we coupled strong operating performance in Q1 with a highly accretive refinancing and an increase in our ownership of the company. Long Ridge generated $18.1 million of EBITDA in Q1 versus $9.9 million in Q4. Power plant capacity factor was nearly perfect at 99% for the quarter versus 87% in Q4, while gas production increased to be in line with the gas supply level required to run the power plant. We'll be bringing our West Virginia gas production online this summer, resulting in a substantial increase in gas production and allowing us to generate incremental revenue in EBITDA from excess gas sales. As I mentioned earlier, the reported results of Q1 reflect only 1 month of the impact of the refinancing and our ownership increase, so we expect to report significantly higher results in Q2 just by virtue of reflecting 100% ownership. Also, higher capacity revenues kick in on June 1, representing approximately $30 million of additional annual EBITDA. In addition, Long Ridge was officially fast-tracked by the PJM regulator for the 20 megawatt upgrade in our power generation, meaning it's highly likely that we will receive authorization at some point here in the remainder of 2025. With the debt refinancing and consolidation behind us, we're focused on advancing multiple behind-the-meter projects, including most notably negotiations with data center developers. Based on the current state of discussions, we anticipate entering into one or more transactions for data centers at Long Ridge in the coming months. Now on to Jefferson. Jefferson generated $19.4 million of revenue and $8 million of adjusted EBITDA in Q1 versus $21.2 million of revenue and $11.1 million of EBITDA in Q4. While volumes were slightly higher in the first quarter, average pricing per barrel was lower as the mix of products included a larger proportion of lower rate refined products. For the duration of the first quarter, 4 of our tanks were off lease as Jefferson cleaned and transitioned those tanks to a new customer and product type, which commenced revenue service on April 1. We estimate the impact of having the tanks off lease for the quarter was approximately $2.8 million of revenue and $2.3 million of EBITDA that Jefferson did not record in the quarter. But our focus for Jefferson is on the months ahead. As discussed, we have 3 contracts representing a total of $25 million of incremental annual EBITDA commencing this year. In addition, we're in late-stage negotiations for additional contracts with multiple parties to handle conventional crude and refined products as well as renewable fuels, with some of these negotiations involving business that would still commence in 2025. If we're successful in converting those opportunities to business wins, we will be in a position to post annual EBITDA of approximately $120 million. Closing out with Repauno. Our commercial progress for Phase 2 is proceeding well. We have 2 customers signed up under long-term contracts and an additional customer under a letter of intent that we expect to convert to a long-term contract this summer. In the aggregate, these 3 pieces of business represent minimum volumes of 71,000 barrels per day and approximately $80 million of annual EBITDA for Phase 2. The two contracts are each for 5-year terms, commencing upon completion of Phase 2 construction, while the third letter of intent is for 5 years with a 2-year extension option, at the option of our customer. As I previously mentioned, financing for Phase 2 construction is underway with Repauno's $300 million tax-exempt debt issuance currently in the market, and we expect to price and close the financing in this month of May. While Phase 2 remains our current priority, we're excited about the advancement of the next phase of Repauno, including the development of additional underground storage for which we expect to complete permitting in the months to come. To wrap up, we're pleased with the quarter and excited about the year ahead, and I will now turn the call back over to Alan.

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

Our first question comes from Giuliano Bologna with Compass Point. Your line is open.

Good morning and congrats on the continued progress across the asset base. Maybe starting off on Repauno. I'm curious how much longer after the public hearing on May 14 do you estimate it will take for the cavern approvals to come through?

Hey Giuliano, good morning. Yes, we're very, very close. I'm excited about it. Typically, it's a 30-day wait after the hearing date. There's a period that the final permit has to sit after the hearing, but it's typically a 30-day process. That is not sort of preordained, but we expect it to be 30 days, maybe 45 days max before we actually have the permit in hand. So, it's conceivable, as quickly as we have that permit in hand, we'll complete engineering and construction contracting, and we could be underway on Phase 3 actually later this year.

That's great. Very helpful. And then pivoting over to Long Ridge, can you describe the type of data center deals that you're working on Long Ridge? And what those will look like?

Yes, definitely. Very active. The various conversations we're having all have slightly different potential structures, but I would say the most typical structure would be where we would lease or sell the land that we own adjacent to the power plant and in addition build and provide backup power to a data center developer. What that would mean is there would not be a need to disconnect our existing 485-megawatt power plant from the grid. That's a good thing, because that's an element of the transaction that could be subject to timing and a regulatory process. So by doing it this way, data center developers can be up and running more quickly. And at the end of the day, it would allow us to maintain our existing, call it, $160 million of EBITDA from the existing plant and gas and then generate incremental EBITDA from the lease of land and the supply of backup power. I think we've said before, our estimates are that incremental EBITDA above and beyond the existing $160 million, we estimate to be in the $70 million plus or minus annual range.

It's very helpful. I appreciate that. And then switching over to Transtar, I'm curious if you have any update on the Nippon deal or anything related to how things should play out there from an upside perspective related to the transaction?

Yes, we're encouraged by the latest developments from Washington. You may have noticed that President Trump directed CFIUS to take a 45-day period to review the Nippon acquisition of U.S. Steel, which he announced around April 6. If we count 45 days from that date, we expect to receive findings in about two weeks. Overall, the sentiment is positive. We've indicated that approval of Nippon's investment would likely be beneficial. It may not necessarily harm Transtar if the outcome is negative, but it would likely be a positive development if Nippon's investment in U.S. Steel is approved.

Very helpful and I appreciate it, and I will jump back in the queue.

Our next question comes from Brian McKenna with Citizens. Your line is open.

Thanks. Good morning Ken, Buck, and Alan. I hope everyone is doing well. The situation clearly remains fluid here. But Ken, based on everything that we know today, can you just walk through some of the puts and takes from the tariffs on your business? I know there are some positives, maybe some negatives, but it would just be helpful to get the latest here?

Yes, good morning Brian. I think the answer to the question is it depends. It is, of course, an uncertain environment. I think certain of our businesses are positioned to benefit from the direction global trade is going, particularly as it relates to our assets that have more direct exposure to the international energy markets and flows. You may have seen President Trump a number of weeks ago stated that one of his primary goals was, through all of this, to have it end up where Europe was committing to purchase more energy products from the United States. And I think he quoted up to $350 billion of energy products every year. Repauno is obviously best positioned to take advantage of that with natural gas liquids being shipped out of the East Coast to the European market. So, I will tell you, we have seen some positive indications at Repauno in particular and some increase in interest. As I mentioned on the call, we've signed 3 contracts and an LOI over the past several months. Each consecutive signing has come at a higher rate. And as we've been utilizing supply and our remaining supply has diminished, we've seen customers willing to pay more for the declining supply that we have. That's a good sign. People want to make sure they have the supply available at Repauno or anywhere in the event energy flows to Europe pick up in the coming months. So, encouraged by Repauno. At the same time, Jefferson is also an export terminal. We export waxy crudes out of Utah. And so that business, I think, could also benefit. Transtar, it's certainly a potential benefit. I mean there was certainly some good news out of the negotiations with Great Britain yesterday for steel imports into Great Britain from the U.S. looking to increase. I can't say that Gary and Mon Valley complexes at Transtar are big players in the export markets, but that doesn't mean that they couldn't be. And so that's probably only a good thing as well. At Long Ridge, we're more focused on our internal business there and the things that we're doing. And so I'm not sure tariffs are a huge plus or minus at Long Ridge, but I think we have a lot of opportunity at Long Ridge, obviously, regardless of whatever happens on the international market.

Okay. Super helpful. And then maybe just following up on Repauno, and it's good to hear all that positive commentary, and it's good to see the incremental $30 million of adjusted EBITDA from that third contract. Is there any remaining capacity to contract beyond what you have today? And then thinking about the upside potential from Phase 2, I mean is that $80 million at the top end of the range? Or could there actually be some upside to that longer term?

There's not a tremendous amount of available capacity above and beyond the 70,000 barrels we have contracted at under LOI for Phase 2. Where there is available capacity is remaining at Phase 1. I'll give you a sort of an example. For Phase 1, which, of course, is operating today, we have a contract with a customer who is committed to minimum volumes of 8,500 barrels per day. That customer just recently nominated for next month, I think it was over 13,000 barrels per day. We have total capacity to handle over 20,000 barrels per day for Phase 1. And so that is underutilized, and there's definitely upside for Phase 1, I think another, call it, annual $10 million of EBITDA out of Phase 1 if we can increase utilization closer to the 80%, 90%. Phase 2, the 70,000 barrels that we have in place is not a lot of remaining capacity, based on the design of Phase 2. That would have to come from Phase 3 in the future.

Yes. Got it. Okay. And then just the last one for me. The 20-megawatt increase at the power plant, Long Ridge. Great to hear that's been fast-tracked. I think you said it should be authorized at some point later in 2025. I mean, are there any other more specifics you can give here? Is it 3Q, 4Q? Just trying to think through that. And then can you just remind us on the incremental earnings from the increase here?

Yes, it would likely be in the fourth quarter. I don't think it will be in the third quarter. It's a positive indication. Our confidence regarding the approval for the uprate is very high. Several plants in the PJM were on the list for fast-tracking, and while many were not selected, we were, which is very encouraging. The uprate is expected to bring about $8 million of additional EBITDA. It requires no capital and can essentially be implemented overnight with a quick software change. The turbine is already capable of generating up to 505 megawatts, so we can activate it as soon as we receive approval. The timing with the PJM is not fixed, and there is no specific timetable provided, but based on what we are hearing, I would anticipate it happening late this year.

Okay, I’ll leave it there. Thanks again.

Our next question comes from Greg Lewis with BTIG. Your line is open.

Thank you, and good morning. I appreciate the opportunity to ask my questions. I would like to get more details regarding Transtar, specifically the $10 million of adjusted EBITDA. Will this require any capital expenditures from Transtar, or is it primarily about maximizing profits from the existing operations?

There is no significant additional capital required. We're looking at maybe tens of thousands to around $100,000 for specific projects. We have over a dozen projects on our active list, which probably includes 30 to 40 opportunities. In terms of the near-term activities we plan to activate this year, there are well over a dozen. These opportunities span several railroads at Transtar, mostly involving new freight business and transloading for new customers. Additionally, about 20% of these opportunities pertain to increased mechanical work, mainly at our new car repair shop on the Union Railroad in the Pittsburgh area. It's beneficial to have a variety of opportunities across different railroads. These initiatives typically take several months to develop before they start generating results, but once they do, they generally remain stable. We're consistently adding to our list of opportunities and expanding our team at Transtar, so I'm optimistic about what lies ahead.

Okay. Great to hear. You mentioned the $2 million impact at Jefferson. As we look ahead over the next few quarters, can you let us know if there are any other contract roll-offs, particularly with Transtar or Jefferson? I don't believe Long Ridge is affected, and are there any planned maintenance activities we should be aware of as we move into the next couple of quarters?

Nothing across Jefferson. The only consistent maintenance outages we have are really at Long Ridge, where every 6 months or so, we have a brief maintenance outage that can last anywhere from 3, 4, 5 days to up to 10 days or so. It's a pretty typical thing, it's required. And we take those maintenance outages every 6 months. We try to manage to take those outages at times when we can dovetail it nicely with gas production or otherwise, so that it has a minimal financial impact. We are going to take a maintenance outage here in the second quarter at Long Ridge. Again, don't expect it to have a material financial impact for the quarter. We expect certainly the full impact of the consolidation of Long Ridge to, by far, overwhelm any impact from a maintenance outage. Outside of that, no, no meaningful contract roles or episodes like we had in the first quarter with Jefferson.

Okay, great. Thank you very much.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Alan Andreini for closing remarks.

Thank you, Michelle, and thank you all for participating in today's call. We look forward to updating you after Q2.

Thank you for your participation. You may now disconnect. Everyone, have a great day.