Good day and thank you for standing by. Welcome to the Third Quarter 2021 Fortress Transportation and Infrastructure Investors LLC Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. And now I would now like to turn the conference over to Mr. Alan Andreini. You may begin, sir.

Thank you, Operator. I would like to welcome you to the Fortress Transportation and Infrastructure third quarter 2021 earnings call. Joining me here today are Joe Adams, our Chief Executive Officer; and Scott Christopher, our Chief Financial Officer. 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 FAD. The reconciliations of those measures to the most directly comparable GAAP measures can be found in the earnings supplement. Before I turn the call over to Joe, 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 Joe.

Thank you, Alan. To start today, I'm pleased to announce our 26th dividend as a public company and our 41st consecutive dividend since inception. The dividend of $0.33 per share will be paid on November 29 based on a shareholder record date of November 15. Now let's turn to the numbers. The key metrics for us are adjusted EBITDA and FAD or funds available for distribution. Adjusted EBITDA for Q3 2021 was $96.4 million compared to Q2 2021 of $68 million and Q3 of 2020 of $58.6 million. FAD was $39.4 million in Q3 2021 versus $68.3 million in Q2 2021 and $39.9 million in Q3 2020. During the third quarter, the $39.4 million FAD number was comprised of $90.5 million from our aviation leasing portfolio, negative $0.2 million from our infrastructure business and negative $50.9 million from corporate and other. Turning now to Aviation. The aviation recovery continues as our EBITDA for Q3 was approximately $100 million, up from $80 million in Q2, and $60 million in Q1. We see broad improvement in demand across narrowbody markets, with some delays resulting from the Delta variant. As an example, we signed leases for approximately 30 engines in the quarter that airlines took actual delivery of approximately 15 as several regions had continuing travel restrictions, but for the most part now have reopened in Q4. We have a strong backlog of engine demand and expect to start new leases on over 40 engines in Q4, of which 30 are signed today and 10 have already been delivered. We're also closing new sale leaseback transactions on 16 aircraft with Alitalia and ITA and 19 aircraft with Avianca and funding those in November for an aggregate new investment of $340 million. The term of the leasebacks ranges from six months to 10 years, with an average of 15 months, and three-fourths of these 319s and 320 aircraft are CFM56 powered aircraft, which is an excellent addition that brings our total CFM56 engine count to approximately 300 engines. Our three CFM56 aerospace activities all made great strides forward. On PMA, the next part has completed production and documentation is being assembled to make the final FAA application complete in the next few weeks. As such, we expect to be able to use both parts for our own engines in Q1 2022 and are seeing strong third-party interest from multiple airlines and MROs or maintenance repair organizations for shop visits beginning in 2022. On the module factory, we have completed a number of module sales and swaps and are progressing with a few airlines in negotiating long-term programmatic supply agreements. Elsewhere, our used serviceable material business or USM Business with AAR we are targeting approximately $10 million in sales in Q4 with momentum growing into 2022. All combined, 2022 is shaping up very well with leasing EBITDA expected to be $500 million for the year and the three CFM56 aerospace activities are expected to contribute between $50 million and $100 million of total EBITDA for the year; total EBITDA for aviation for 2022 is expected to be $550 million to $600 million. Let’s now turn to infrastructure, starting with Jefferson, on the heels of the previously announced 10-year deal with Exxon in mid-July, the Jefferson Terminal continues to reshape and transform logistics options in the U.S. Gulf Coast, and in the Beaumont Port Arthur Texas refinery region. This region remains one of the largest refinery footprints in North America, and the Jefferson terminal has become an essential extension of the two largest refineries in North America. Looking specifically at Q3, near-term headwinds continue to impact the economics of crude by rail from Western Canada to the U.S. Gulf Coast. However, due to the improved logistics associated with the Exxon Mobil cross-channel pipeline system, Jefferson has seen an increase of 44% in 2021, compared to 2020 in the refined products by rail to Mexico business, resulting in Jefferson posting another positive quarter with EBITDA of $1.9 million. Enhanced terminal infrastructure and the in-service pipeline projects connecting Jefferson to Exxon and Motiva have been completed, and baseline business continues to steadily increase as these business partners ramp up refinery activity. As we look towards 2022, high oil prices and demand for refined products is good for Jefferson. Local refiners are lining up new sources of discounted crude from markets in Western Canada and new interbasin opportunities and looking for terminals like Jefferson to optimize blends and lower logistics costs. Additionally, international oil flows are increasing and Jefferson will be receiving its first ever inbound Aframax marine cargo from the North Sea this month. We have high expectations for additional inbound marine volumes from overseas and have line of sight on several other significant opportunities in the near future. Specifically, we are making progress on DRU, delivery recovery unit discussions as well as discussions relating to the movement of heavy wax barrels, which cannot move by pipeline. These two projects are important because they would lead to a radical flow of trains, which are not dependent upon crude spreads. Finally, we are moving forward with several interesting opportunities regarding the movement of natural gas liquids and other products which would involve the integration of Repauno, Long Ridge, and Jefferson into a seamless, flexible, and unique supply chain. Turning to Repauno, Repauno continued its strong phase in the third quarter, loading 14 marine vessels with over 900,000 barrels of butane down for international markets. This activity was complemented by increased truck movements to local premium markets to signal the beginning of the fall gasoline blending season. Rounding out the first export season, the highly flexible multimodal port and rail terminal firmly established itself as a premier distribution hub on the east coast of the United States. And we're excited to enter the local propane distribution market this winter. By increasing the suite of products handled simultaneously at the terminal and providing security of supply for local markets in the Northeast, we're meeting the customer's needs not only in New Jersey but also in the entire Northeast Region. Pushing towards further development outlined in FTAI's long-term vision, the newest port on the Delaware River plans to see expanded capacity, with three plus million barrels of highly efficient underground storage capable of handling a wide variety of LPG and refined products to be ready for export via all size ships, including VLGCs. Repauno is also looking at import opportunities as they rise in various markets and under various market conditions. Product movements will be available by rail, inbound and outbound by water across multiple new high-capacity deep-water docks, and eventually by truck from all major North American producing regions. And with 250-plus acres available for development, we also continue to move forward with several renewable opportunities. Repauno is prime for staging and manufacturing of wind farm components and for waste plastic recycling projects. These discussions are at advanced stages, and we hope to have one or more concluded by the year-end. Together with the Jefferson facility in Beaumont Texas, FTAI is well-positioned with multimode of distribution and export terminals on both the Gulf Coast and the Mid-Atlantic seaboard, providing unparalleled levels of service flexibility and optionality for our customers. Turning now to Long Ridge, Long Ridge has successfully transitioned from a development project into a cash-flowing operating business, as evidenced by the $15.5 million of EBITDA on a 100% basis generated in Q3. Most of the Q3 EBITDA was attributable to our natural gas production, which was sold into the market. And now that the power plant is operating, our natural gas is being utilized to generate electricity. While natural gas prices have rallied recently, and we benefited from that in Q3, the economics of generating electricity are even better. We anticipate Long Ridge to generate EBITDA of approximately $15 million in Q4 and $37 million in Q1 2022, which taken together is more than $40 million higher than we expected when we initially underwrote the project. This incremental cash flow is a result of completing construction nearly a month ahead of schedule and higher power natural gas prices in the market today. Our fixed-price power sales agreement commenced in February, locking in an attractive margin for the next seven to ten years, generating approximately $120 million per year of EBITDA. We’ve also recently seen a lot of interests from power intensive industries that want to locate and build new facilities at properties like Long Ridge. Importantly, we remain on track to be the first large frame power plant in the U.S. to blend hydrogen into our natural gas stream. We will start with a 5% hydrogen blend in December and hope to increase this percentage over time. Turning now to Transtar, our newest addition Transtar is off to a great start. John Karns and his team are already meeting or exceeding expectations. But I'll start with an important metric in the short line rail business which is safety, and that Transtar continues to lead the short line railroad industry in safety and is well-positioned to win another President's Award for safety from the American Short Line and Regional Railroad Association. All of the Transtar railroads are FRA and OSHA recordable injury free in 2021. Since July 28, when the Transtar acquisition closed, the company is tracking to the $80 million annual EBITDA number that we have projected. Transition expenses are tapering off and expected to be de minimis in 2022. As to the core, the strong steel markets continue to support shipment of both finished steel and raw material. We believe that improving ship availability will drive robust steel shipments for auto, which is a high profit margin business for us. We could see increased shipments to that sector in Q4 of this year and in Q1 of next year. Other steel segments are holding steady and strong. Mon Valley is running full while Gary Indiana has a planned maintenance outage at the number six furnace which is expected to be completed in November. As we look to 2022, we expect multiple new third-party opportunities to grow the $80 million EBITDA number. We are in discussions with third parties regarding car storage and railcar repair opportunities just to name two. In short, everything we had hoped to see happen post-acquisition is happening. Turning down corporate items on the spin-out of infrastructure, we have made considerable progress on the spin-off of infrastructure and conversion to C Corps. In Q3, we completed the refinancing of the Transtar acquisition financing and are now focused on completing the documentation and agreements which we hope to be finalized in December of this year for an SEC filing before year-end, which would set us up for having two separate trading entities in Q1 of 2022. The existing FTAI entity will retain aviation business and assets and all existing corporate debt totaling approximately $2.3 billion pre-acquisition of the Alitalia and Avianca fleets. Infrastructure to be spun out as a new C Corp entity comprised of Jefferson, Repauno, Long Ridge, and Transtar will retain all related project-level debt of those entities and intends to remit approximately $800 million in cash or obligations as part of the separation. While we intend to monetize this obligation to the maximum amount, the spin will not be subject to raising additional financing at completion. So in conclusion, the ramp back up in aviation to 2019 levels is progressing. Our revenue pass the kilometers continue to rise. As a result, we're seeing engine lease rates and demand for sale leasebacks rise as well. With the industry still straining from the shock of COVID-19, we're seeing demand for our Chromalloy, Lockheed Martin, AAR suite of products growing as well. As the infrastructure projects that restarted three to five years ago are now in full ramp-up mode, these projects along with Transtar now give us the ability to spin infrastructure into a robust standalone company. That vision, which we've been planning for years, is about to become reality. So we're at an exciting time in FTAI’s history. We're at that point because of the hard work of a lot of outstanding employees, and directors and the cooperation and partnership with some great customers. I want to thank everyone for helping bring us to this exciting inflection point. With that, I will turn the call back to Alan.

Thanks, Joe. Operator, you may now open the call to Q&A.

Thank you, Alan. Our first question comes from the line of Justin Long with Stephens. Your line is open.

Thanks and good morning. Joe, I wanted to start with a question around the pricing on the bridge financing for the two aviation deals that you announced and the plans for repayment there, and maybe you could just talk about the expectation for the balance sheet and leverage more broadly going forward as well.

Yes, so. So that's financing we wanted to keep it short, cheap, and flexible. So we have structured a one-year facility, which I believe the rate will be less LIBOR less than 300 LIBOR plus 300, a little less than that, like LIBOR plus 275. And, and can be prepaid at any time. Our goal over that is to prepay that from the $800 million of infrastructure funding that's going to come back to aviation. So essentially be reducing debt net on a net basis when the spin happens at Aviation. And so that's what we wanted to have that immediately or prepayable immediately. In terms of the leverage for the companies, we stated as part of the spin, we wanted to maintain a BB rating for the aviation aerospace business. We've been given very good feedback on that. I think we're in good shape, given the outline of what I just said. Both companies would then have access to capital going forward. I think it all sort of fits together with the parameters and the requirements that we set out to do as part of the spin.

Great. And on aviation. Could you also talk about the level of utilization that you're assuming into the fourth quarter and into 2022, as well as you think about the guidance you provided? And would also love to get a little bit more color on the quarterly cadence of the non-leasing aviation EBITDA. I know you said that it's still expected to be 50 million to 100 million next year, but just wanted to understand how that's going to ramp over the next couple of quarters or so.

Our engine utilization in Q3 was just over 60%, which was below our expectations. This was largely due to the Delta variant and COVID. While many airlines prepared to acquire more equipment, the return of restrictions caused them to slow their ramp-up and activities, which affected the third quarter. However, we're seeing increased activity in the market in October and November, and we anticipate leasing 40 engines, which should raise our utilization to around 70% or slightly higher. For next year, we expect to maintain a utilization rate of 75% to 80%. Every airline we are in discussions with is seeking additional equipment and engines. Notably, our agreements with Avianca, Alitalia, and American Airlines position us to expand these partnerships and provide engine and management services as a comprehensive package. We view the market for 2022 positively, with indications that businesses will be looking to grow again. Regarding our crude products, we forecast a robust year ahead. Our overall businesses have gained good momentum except for TMA due to pending approvals. However, our USM segment has developed well, and we have a significant number of engines in teardown. We are among the leading providers of USM. Although we have not yet seen an uptick in ramp-up and shop visit activity, this is expected to occur in 2022, and we anticipate strong sales for USM when it does.

Very helpful. Thanks, Joe. Appreciate the time.

Our next question is from Josh Sullivan with Benchmark Company. Your line is open.

Hey, good morning.

Good morning.

Just on the current PMA submission, how's that tracking relative to the first part and what the FAA has requested just as kind of a guide path? And then just curious how these the following parts are moving forward as well?

Yes, it's tracking very similarly, in that the FAA is being provided information along the way. So there's a lot of back and forth and review of test data and engineering information. So it's been a very similar way to the first part of that, and that's the way Chromalloy has been approaching these products, and it's worked well because there should be no surprises at the end. The second part is technically more complex than the first part, so there's probably a little bit more engineering and manufacturing data that's needed. But it's all been reviewed and signed off as we go. I think that the final submission and the approval should track similar to what happened with the first part, and Chromalloy is very confident; they've never had a part that didn't get approved. So, I would say very similar in terms of process to the first part. The third, fourth, and fifth parts are in design and engineering and are on track to be submitted in late 2022 or early 2023. Those are less complex parts. Obviously, we started with the more expensive ones and the higher difficulty ones first.

Got it. And then maybe one on the infrastructure side. With Transtar, the $80 million in EBITDA you're looking at those multiple opportunities that you mentioned in the remarks, I think auto and elsewhere, what do you think the timing on those projects are? And then does the global supply crunch here allow those opportunities maybe to speed up?

Some of them are sort of grinding it out by adding storage and repair services and right-of-way income that occurs just gradually over every quarter. Then some of them can be really project-driven if you get a new customer or you have a new service that you can provide; it could be a step function up. The rail market is obviously strong; the core industries that rail serves are all doing pretty well. We see development opportunities in many different spots and locations. We had a good dialogue with U.S. Steel about additional opportunities we can provide them. So, the playbook is really to try to come up with ten ideas that you can pursue, and hopefully three or four of them head. That's exactly what happened at RailAmerica when we did that, and those tend to be sizable and they tend to be sticky. It feels like deja vu, and we're in a very good macro environment with U.S. industry being strong and an infrastructure bill coming, which, who knows what that's going to provide, but it's going to be good in different areas. We're also observing it in Long Ridge. There are a lot of companies that have announced they are going to expand and build factories in the Midwest, which is good for railroads because that means a lot of stuff is going to be moving around. So, I think the environment is good. We've got the playbook and I think we're going to hit on a few of them.

Thank you for the time.

Thanks.

Next, from Guiliano Bologna with Compass Point. Your line is open.

Good morning, I guess jumping in on, I had a quick question on the PMA side, then I have a kind of a follow-up question on a different topic. But one thing I was curious about was, you have to have the first part approved. The second part is coming in, hopefully in the relatively near term. I think one of the discussion points that’s come up in the past is that a lot of airlines order the first and second part that you're going after in sets. That's probably creating a little bit of slow rollout at first. I'm curious if you have a lot of orders for sets or you have a lot of orders that are contingent on having both parts being approved to sell to third parties. And then from there just to get a general sense of the contribution of those two parts from a savings perspective and what you can do with those savings in the near term?

Yes, so there are orders for sets. I think you correctly point out that if an airline is going to put an engine through the shop, they want to put enough PMA in it to make it worthwhile. And so having two parts, particularly the high value parts, is pretty important to the program. I think they are sort of joined together for many airlines, particularly because they know what's coming. If they have a decision to make and rather than putting the first part without knowing the second part is coming in, it's easier to say, well I'm not doing a lot of shopping today, so why don’t I just wait for the second one, and then I'll decide. So I think that's the dynamic. But every airline knows it's coming; it's a big deal in the industry and they are very eager to get it. I think that backdrop is quite positive. We expect, as do most of the industry, that third-party shop visits are starting to grow, and we think will increase significantly in 2022. That will drive the business because if you can’t get parts or your shop is delayed, that will also facilitate looking at PMA as an alternative. The significant potential inflation in metals out there can lead to bigger price increases from OEMs when people have experienced previously. So, that’s another dynamic that I think could help the effort. I think the first two parts represent 60% of the savings we can provide. So if the five parts in total represent 80% of this aircraft cost, then this is 60% of the 80%, or half of it. So, 50% of the total aircraft cost is represented in these first two parts.

Got it. That's great. That's great. And surging to a different topic. I'm invested, so I was curious about one thing about the split of the company to judges is where if the preferred shares, if you intend to move to purchase one way or the other, I'm assuming they stay with aviation, but we get to confirm that.

Yes, that's correct. They'll stay with Aviation.

And then the only other question was I think you referred to the infrastructure business being spun off as a C Corp. I'm assuming using some sort of offer limited structure that would not have a long.

I didn't quite understand the question.

And on the aviation side, you mentioned what kind of legal structure you're planning on using? I'm assuming any legal structure you're planning is going to remove the K-ones.

Yes, it'll be a corporate structure. That would be a non-U.S. Corporation.

That's great. That's perfect. Thank you very much. And I'll jump back in the queue.

Yes, thanks.

Next question is from Chris Wetherbee with Citi. Your line is open.

Hey, thanks. Good morning, guys. Maybe want to touch on Jefferson for a moment. So Joe, you mentioned the DRU opportunity. I also wanted to kind of get a sense of how we think about the pipelines. When we might see opportunities ramped up there. I'm sure there's probably some WCS, WTI spread dynamics that we need to consider here. But as you think about 4Q, and then maybe the first half of next year, kind of give us some sense of what the outlook is, in terms of EBITDA or FAD in that business?

Yes, we, so that, I mean, the pipelines are operating, which is great. That was a big part of getting them into service and getting operating and functioning. Now, obviously, we're all over, everybody to try to use them. That's the game, and we have multiple pathways to sort of getting to our numbers and increasing utilization. We just need one or two of those to hit. Obviously, with the markets improving from an oil price point of view and refined product demand point of view, from refineries looking to bring in crudes from discount groups from all over the world. That helps because we're positioned to try to provide those options and optionality and the services that they need, whether it's by water from the North Sea, as we mentioned, or it's blended with Permian, or it comes from Utah, and heavy wax train, and we blend. We have all of that in front of everybody. The question is getting a couple of those to hit. That's really where all of our focus and attention is on that. We have multiple pathways to get there. I’m confident we'll get there, and the environment is going to help when we need to do. We just need to execute on it.

Okay. Alright, that's helpful. And then maybe a bigger picture question. When we think about aviation post-split, can you give us a sense of maybe what you think this sort of, I guess the question is the capital that has the potential to be deployed on an annual basis, given the size that you guys will be at the split? I just want to get a rough sense of kind of what you think the opportunity set is ahead of aviation as a standalone, maybe what kind of capital you'd be deploying on an annual basis?

Yes, so we've historically, if you look back, we've tended to invest between $300 and $500 million a year, pretty consistently, although I always say we don't budget CapEx. We don't tell anybody that that's what we want to do the beginning of the year because that's not the right way to think about investing. But it's been $300 million to $500 million. Now what we're doing is really I think is focused on, we're focused on the CFM 56, obviously. We're focused on some of these transactions that we think we can add engine business as part of the transaction. So, as I mentioned Avianca, Alitalia, American, we believe we're going to have follow-on opportunities above and beyond the sale leaseback that will enhance our design relationship and enhance our profitability without requiring additional capital. The goal is to try to leverage the capital to the maximum degree possible without investing the most capital. We'd rather keep the number and be strategic and invest $300 million or $400 million a year while getting additional service and fee business to grow that business without requiring capital. I'd rather do that than invest a billion dollars of capital, not getting any other business. That's the way we're thinking about it. The goal is to grow the non-asset based service businesses as to the maximum degree possible and use the capital in the most efficient way to do that.

Okay, that's helpful. Thanks for the call. Appreciate it, guys.

Next question is from Devin Ryan with JMP Securities. Your line is open.

Hey, good morning, Joe. Thanks for taking the question. I guess the first one is coming back to some of the earlier comments on Long Ridge. Great to hear about the increased contribution there was intermediate term here. If I missed it, the $40 million where is that or you can reinvest that back in the business that get dividend to the parent, how should we think about kind of increased profitability there? And then with electricity costs, their prices where they are now? Is there a way to kind of lock that in for longer, just obviously, there's been volatility but to sustain kind of a higher level of contribution from that segment?

Yes, so the $40 million is incremental cash that will come into Long Ridge above and beyond what we projected. Initially, the view would be to pay down debt. I think we're going to look at a refinance. We always expected that once the plant went live and was operational, we would look to refinance the debt. At that level, we'll get better rates and we may get more debt. There might be a recap opportunity that is helped and facilitated by having additional income. Profitability is good, and it's played out. We always expected that right around the time we went live, we would look seriously at refinancing the debt at Long Ridge. Rates are lower and profitability is higher; these are good things. We are looking at everything we could do to first of all, we only contracted I think 94% of capacity of plants, so we have 6% of that available. We also could potentially increase the capacity from 485 megawatts up to 505, and we believe it'll run at that level. So there’s another 20 megawatts. Then we're looking at how to increase gas production as well from what we have, so that we can also monetize some of that. We're looking at everything to try to take advantage of what's an amazing, incredible market opportunity there. We got lucky with the timing because we didn't, our hedges don't start until February, and we completed the project a little bit early, so we got lucky with the market environment. Clearly, power forward markets are strong through the winter. There are a lot of people that are pretty positive beyond that because the switchover to renewables is not as easy as maybe people were thinking initially, so it's a good dynamic. I think we'll look to refinance, take advantage of that opportunity and then look to add either from power and gas in any way we can to squeeze out more.

Okay, terrific. Obviously good to see. And then, just another follow-up here on the split of the businesses and you just procedurally I know you guys are working closely with the auditors. I know it's also kind of a complicated process here. So from the outside, it seems like gave a lot more detail, and things seem to be moving smoothly. Are there any potential sticking points as we're kind of following from the outside that could push the timeline out? Or that the auditors or others are having issues with or is it more just kind of rolling up your sleeves and just getting it done? I guess that's the first one. And then connected to that, just is it going to be the same management team? Joe, are you going to run both businesses, or has that been decided yet? Just kind of think about some of the infrastructure related to both of the businesses?

Yes, so the certainly the first question, we are more confident we, the probably the biggest issue that we had to address first was refinancing the Transtar acquisition debt which we did in Q3. That removes any transactional impediment to getting the spin done. Now, as you mentioned, it's just a process, and I'm looking at Scott because he's doing the audits, and the lawyers are doing the documents that we've done. Fortress has done several scans, and nobody has raised an issue yet, otherwise I wouldn't be getting a lot more detail. It feels like it's on a pretty good path to getting execution. There's no third-party or any outside process that would get in the way of it. That's good. In terms of management, what I’ve indicated is that I will be Chairman. I was Chairman and CEO of FTAI and Chairman of Infrastructure and likely will, around the spin, have a CEO that is not me, which is somebody that we know, we haven't disclosed in much more detail yet. That would be the management; otherwise, a few spots will look for some outside hires, but it's primarily just dividing up the team.

Yes. Okay. Terrific. Thanks so much for the update.

Yes.

We have a question from Brandon Oglenski with Barclays. Your line is open.

This is David on for Brandon. You talked a little bit about the acceleration you expected to see in non-service for material. Just wondering if you could provide some more color onto any earlier orders you're seeing or what do you think that acceleration could look like beyond early 2022? Do you think this would ultimately be untethered to the capital required to put into that business?

Yes, our ability to generate new services material is purely a function of how many engines we want to tear down. I think our initial goal was 20. I think we have 20 better positions that are either in teardown or in the process. That side of that we totally control. On the sales side, I would say we have two to three large airlines that have been buying USM and have done so for quite a while. Then we have probably three or four programs that we are working on bidding. Airlines go out and work with maintenance shops and say, 'Will you provide my shop is for the next five to ten years and give me a price?' We team up with the MRO and say, 'We'll provide you with used serviceable material and we'll provide you with modules.' We have three; that's what I was referring to and the programmatic nature of what we're shooting for. Those are progressing nicely. I would say that the ramp-up in shop visits is starting, but you are probably not going to see much activity until Q1 of 2022. We expect Q2 and Q3 of next year to be pretty busy, which I think is consistent with what the big independent MROs and even OEMs have been saying about shop visit activity. So it's starting, and we think the flywheel is moving; it will pick up momentum next, Q2 and Q3 of next year.

Awesome. Thanks for that one. And then on the funding on the split, I know you talked about it. Could you talk specifically about where you think the $800 million in funding is coming from and how the puts and takes are going there?

Yes, that would all be financing from infrastructure, the infrastructure company. The vast majority of that will be corporate debt. We have Transtar, which we acquired, which is unleveraged. That's $80 million of EBITDA and then the rest of the infrastructure business as well. Most of it will be debt; we also look at potentially asset sales to provide some of that, which is obviously a very good market for infrastructure and funds looking to invest capital in the space. There’s a lot of capital raised. We'll run a process and look at preferreds and other things to coincide with sometime in Q1 of next year. We don’t have to do all of it to spend either; we can stage it. We’ll run a full process and be delivered and look to sort of optimize that over the next six months.

Great. Thanks, Joe. I appreciate the answers.

Next question is from Greg Lewis with BTIG. Your line is open.

Yes, thank you. Good morning. Joe, I was hoping you could touch a little bit more on infrastructure. As we think about what's going on at Jefferson. Clearly, you guys have invested a lot of money there, built out the infrastructure there. It seems like the market's finally starting to go the right way with a little bit of an inflection in oil demand. Is there any way to kind of think about, and I don't know if the right word is utilization or efficiency? Like, as we think about the facility right now. Is there any way to kind of quantify how much spare capacity is there in terms of driving incremental volumes and revenues out of Jefferson without actually spending any more money?

Yes, I think that storage utilization is about 75%. There’s 45% availability there. Rail, it’s also about 25% right now. So there’s an additional 75% availability. And pipeline utilization is probably 10% of what it is. There’s a 90% availability. That’s exactly what we're focused on, filling that infrastructure that's already been built without any additional capital.

And really, I mean, based on what you kind of kicked around throughout the call is that's really just going to be a driver of what various crude spreads are whether it's in the North Sea. So you mentioned the Aframax, incoming tanker and WCS? Is that kind of the right way to just feel that at that potential growth or that you mentioned, thanks?

So, that's part of it. The other part is you mentioned would be, for instance, a DRU or diluent recovery unit in which volumes are coming from Canada on a steady basis. If you could bring one train today from DRU in the terminal, that's 50,000 barrels of rail in, and you blend that with additional pipelines, probably two or three to one. That's potentially like 200,000 barrels a day from just that one move, and that's the leverage. These are the deals that we're trying to hammer out, particularly to get a ratable flow to cover a lot of the existing capacity. You can be opportunistic with the Aframax volumes and the spread business.

Okay, great. Thank you very much.

Thanks.

Our last question is from Robert Dodd with Raymond James. Your line is open.

Hi, guys, and congratulations on getting these aviation deals. I'm going to ask about the development. When we look at funds available for distribution when we put on Transtar, put on these new deals, the new aviation deals, etcetera. You're going to be, by my math, you know about the two to one coverage of the dividend. At the same time, we're obviously heading into a spin-off and then changing corporate structure next year. So could you give us an outline if you've gotten that on what the plan would be for the dividends from one or both different pieces and what given where that is you'd expect the relative scale of those dividends to be maybe compared to what it is for the pure play the single appetite right?

Yes, the best guidance we can provide right now is that we believe approximately 75% of the existing dividend of $1.32 will come from FTAI Aviation, while the remaining 25% will come from infrastructure. This is not precise, but it reflects our thinking on the order of magnitude. Each entity will evaluate the extent to which funds available for distribution exceed the two to one coverage goal, which we aim to maintain. Therefore, we would increase the dividend for each entity if we have more than two to one coverage. This continues our existing policy of splitting the dividend roughly 75:25 between Aviation and Infrastructure, with each entity expected to grow differently and follow distinct trajectories moving forward.

Got it. I really appreciate that. Thanks a lot.

Thanks.

And now I would like to turn the call back to Alan Andreini.

Thank you all for participating in today's conference call. We look forward to updating you after Q4.

This concludes today's conference call. Thank you for participating. You may now disconnect.