Thank you, Michelle. I would like to welcome you all to the FTAI Infrastructure earnings call for the third quarter of 2026.

Joining me here today are Ken Nicholson, the CEO of FTAI Infrastructure; Buck Fletcher, the company's CFO; and John Carnes, CEO of the Wheeling, our freight rail business. We have posted an investor presentation and 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 a 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 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 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 very much, Alan.

Good morning, everyone, and welcome to the call. It's been a very active past few months at FIP, and we are excited to provide updates on a number of important developments.

We had a great quarter financially, posting new records for revenue and EBITDA, led by continued growth at a railroad. We'll walk you through the building blocks of all of that in just a bit here.

Equally important, we advanced a handful of strategic priorities away from the railroad that should contribute to meaningful value creation in the quarters to come. I'm going to kick things off on slide 3 of the supplement.

Our core business is the freight railroad, and in Q3, we again posted record financial results. We're seeing a strong environment both in terms of volumes and pricing, and are optimistic about continued organic growth.

Nippon Steel recently announced some additional investments at the Mon Valley facilities in Pittsburgh, and we'll see meaningful incremental volumes from propane shipments commencing next year. All in, we're forecasting continued double-digit growth in revenue and EBITDA in the year ahead.

In addition, we're experiencing a high level of M&A activity in the market, and we're actively evaluating several potential acquisition opportunities. I firmly believe that our business is one of the best positioned buyers in the market, especially as it relates to larger, more strategic rail assets, and I'm excited about a number of near-term opportunities.

At our Long Ridge energy and gas business, I'm thrilled to report that just this week, we finally received the regulatory approvals for the sale of the company. With approval in hand, we expect to close the sale by the end of this month.

Gross proceeds of just over $1.5 billion will be used almost entirely to repay debt, resulting in a material reduction in leverage, and more importantly, lower interest expense at our parent level. With a lighter balance sheet, we plan to continue our focus on growing our core rail business.

Finally, we continue to position our terminals for monetizations next year. Last month, we announced the acquisition of logistics assets from USD Group, which we plan to combine with Jefferson to transform the value proposition of that combined business.

At Repano, our Phase 2 buildout is approaching completion and setting us up for an exciting 2027. As we look ahead, our strategy is straightforward: continue to reduce leverage, grow the value of our rail platform, materially increase EBITDA at Jefferson, Repano, and ultimately monetize those terminal assets, as we are doing with Long Ridge.

I'm going to move to slide 4, and we'll dig into the consolidated financial results for the quarter. Adjusted EBITDA for Q3 came in at $95.3 million, up materially from $70.9 million in the third quarter of 2025.

On the right side of the slide, we illustrate our historical quarterly adjusted EBITDA, excluding the results of Long Ridge given the pending sale. Excluding Long Ridge, adjusted EBITDA was $54.4 million for Q3, another quarterly record.

In the quarters ahead, we expect EBITDA to continue to grow driven by a handful of high-confidence events: first, organic growth at our railroad; second, the USD acquisition and the inclusion of USD's financial results with Jefferson going forward; and third, the commencement of Phase 2 operations at Repano next year. Flipping to page 5, I'll talk briefly about our balance sheet and our deleveraging trajectory.

With the Long Ridge sale, we expect to eliminate approximately $1.4 billion of total debt from our balance sheet, of which a little over $1.1 billion is at the Long Ridge level, and a little under $300 million is at other parent entities. Debt service at our parent level will decline by approximately $25 million per year, meaningfully improving our leverage metrics.

We expect our leverage profile to continue to improve over the next several quarters as we integrate the USD assets and bring online Phase 2 at Repano. I'm now going to walk through the more detailed financial performance at each of our segments, and we'll also talk about some recent developments and our priorities in the quarters ahead.

We're going to start with our railroad on slide 7. We posted new quarterly records across the board: carloads, average rates per car, revenue, and EBITDA all came in at all-time highs.

Revenue was $104.2 million, and adjusted EBITDA was $47.4 million for the quarter compared with Q3 2025 revenue of $61.7 million and adjusted EBITDA of $29.1 million. We closed the acquisition of the Wheeling & Lake Erie railroad in August of last year, year-over-year comparisons are not entirely comparable, but even if we assumed we had owned the Wheeling for the entirety of Q3 last year, all key metrics would be higher year-over-year.

Volumes for the quarter were strong in all categories, with the exception of slightly lower volumes at our Gary railway, as US Steel continued to undertake a substantial overhaul and upgrade of the largest blast furnace at Gary Works, which was completed in September and is once again operating at full capacity. Average rate per car reflected a strong pricing environment, as well as higher fuel surcharges, which we pass along to our customers.

Integration of the Wheeling & Lake Erie is largely complete with the final systems integration taking place here in November, we should continue to see cost savings opportunities continuing into this fourth quarter. We expect strong growth in our rail business continuing to 2027, and we highlight some of the drivers of that on slide 8.

Organically, the outlook for both volumes and rates is favorable. Shipments of energy products, steel products, and other raw materials all strong, and pricing also trending higher again next year.

Nippon continues to roll out committed investments at US Steel's Pittsburgh and Gary facilities that should drive incremental volumes in the years to come. Propane shipments originating in Ohio destined for our Repano terminal will commence next year.

While the outlook for organic growth is favorable, we're equally excited about the M&A market and opportunities that we're evaluating. Our objective is not simply to add EBITDA; it is to build scale in a highly strategic portfolio of assets, where we believe our operating capabilities and existing network can make those assets more valuable under our ownership.

Now, on to our Jefferson terminal. At Jefferson, we reported $24.9 million of revenue and $14.2 million of adjusted EBITDA in Q3 versus $21.1 million of revenue and $11 million of EBITDA in Q3 of last year.

Refined products came in at a new quarterly record in terms of both volumes and revenues, as our export business continues to grow. Crude volumes continued to be impacted by volatility in the Middle East and the temporary reduction in inbound ship volumes, but we're encouraged to see inbound crude volumes recovering materially so far in Q4, with October crude volumes averaging 85,000 barrels per day, more than double the 41,000 barrels per day we averaged during Q3.

Based on our most current interactions with the refineries we serve, we forecast the remainder of Q4 to be strong on the crude front. We continue to negotiate new contracts to expand our business at Jefferson and have recently finalized commercial terms with two new customers for crude oil exports.

The new business will commence on January 1st next year and should represent approximately $8 million of incremental annual EBITDA. We also continue to discuss larger opportunities with existing customers that involve expansions of the services we currently provide with little to no CapEx.

Our goal is to execute on all of these larger opportunities in the coming months, but as I mentioned, the majority of growth at Jefferson will be driven by the acquisition of the USD assets, which we expect to be reflected in our Jefferson financials upon closing of that transaction in the middle of this month of November. On slide 10, we walk through the USD acquisition in more detail.

The assets we're acquiring include a rail-connected crude terminal in the Beaumont-Port Arthur energy complex and a 50% joint venture interest in a diluent recovery unit in Alberta, Canada. The two assets form the bookends of a supply chain that handles approximately 50,000 barrels per day of Canadian crude oil under a take-or-pay, long-term contract with an investment-grade customer.

Crude oil originates in Canada, where low-value diluent, which is used in the initial recovery process, is removed from the product to concentrate the oil into higher-value pure crude, which is then shipped by rail to Beaumont and piped to the P66 crude oil hub. All together, at contracted minimum volumes, the USD assets generate approximately $50 million of annual EBITDA.

What is particularly attractive to us is both the quality and visibility of that EBITDA. More importantly, the addition of the USD assets transforms our Jefferson business, and we talked through some of the highlights on slide 11.

Jefferson's growth trajectory takes another leap forward with the addition of USD volumes, and ultimately has the potential to drive meaningful value creation in advance of our plans to monetize Jefferson next year. The combined business will provide critical energy logistics services to a total of seven high-quality customers under long-term contracts.

The resulting combined EBITDA is expected to exceed $100 million annually before including the impact of increased capacity utilization at Jefferson's main terminal. We expect to execute these additional contracts in the near term, and we see opportunities also to realize cost savings from integrating the USD assets with Jefferson.

Together, those initiatives provide meaningful upside to EBITDA in 2027, and importantly, should enhance the value of Jefferson as we position the business for sale next year. Finally, turning to Repano.

Our focus continues on Phase 2, where construction proceeds as planned toward our goal of completing in the coming months and revenue commencing shortly thereafter. We have long-term contracts in place for a portion of our capacity and are seeing high demand for the remaining available space.

Spreads for propane exports continue to be attractive, and based on the conversations we are having, we expect to commence revenue service in 2027 near or at full capacity. Construction of Phase 2 is progressing well with the new cryogenic tank readying for completion, as well as pipes and manifolds connecting the tank to our rail racks and ship dock.

Here in Q4, we are converting our existing cavern, previously utilized for butane handling, to propane in order to start handling propane in advance of completion and commissioning of Phase 2. Repano is approaching an important inflection point.

We've invested the capital, construction is nearing completion, and the focus is now shifting from development to cash flow generation. As that cash flow becomes visible in 2027, we believe the value of Repano should be increasingly apparent and position us well for a potential monetization.

I will conclude our remarks there, and now let me turn the call back over to Alan.

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

Good morning and congrats on great quarter. Jumping into the rail side, it looks like the growth in EBITDA in the rail segment is accelerating.

Can you expand on that, what's driving that acceleration, and how durable that is? Yeah.

Good morning, Giuliano, thanks for the question. We were very happy with Q3 and the results.

We certainly are seeing a very good start to Q4, everything I mentioned, double-digit year-over-year growth in revenue, and a little more than that in EBITDA, is what we continue to expect. It really is not one specific thing.

It's, which is great, it's a combination of many things. Carloads and the overall volume environment just continues to be strong.

We're seeing propane volumes as high as I think we've ever seen them or certainly Wheeling has ever seen them. It's great to have the business at Gary now back online for the entirety of Q4.

The largest blast furnace in Gary, Indiana, was out of service for the bulk of Q3, we're excited about that. Pricing in the rail industry continues to be attractive.

We continue to see at least mid-single-digit pricing growth going forward. In some cases, pricing will be higher than that into the higher single digits next year.

That's not in all cases, but in some cases. Really, the growth is driven by revenue gains, and we're really happy with what we're seeing.

Yes, I think it's very sustainable into 2027.

That's very helpful. Then, you mentioned that the rail M&A environment is robust.

Can you give us a little more color on what you're seeing in the types of opportunities you're looking at?

Definitely. I do have to say, we've been invested in the rail sector here for quite some time, and we've seen the waves of M&A and consolidation.

This is certainly one of the most active, if not the most active environments we've seen in at least 10 years, maybe 20 years. There's a lot going on, and it's driven by a number of various dynamics.

Big companies, smaller companies, all looking to sell. The rail industry is a dynamic one.

You have lots of different types of companies with different ownership profiles. There are over 500 short line and regional railroads in North America, there's a big base and potential candidates for consolidation in a fragmented market.

You've got either individual owners who have owned their rail assets for significant periods of time and they're just getting to a point where they're ready to sell and move on to their next challenge. There was a big wave of M&A over the past 5 or 10 years, and a lot of private equity firms came into the sector, and their funds, which typically have 10-year terms, are coming up on maturities, and so they need to sell.

Then we continue to look at some corporate carve-outs, kind of like our acquisition of Transtar from US Steel. I'm particularly fond of those types of situations, because I think we can be a very differentiated buyer given our experience with US Steel.

It's super active, looking at all different types of things. I do think our focus is going to be on the bigger opportunities.

There are a handful of smaller things out there that don't quite move the needle for us, and I think our time and energy is probably better spent on some of the bigger, more strategic situations.

That's very helpful. I appreciate it.

Congrats on the quarter. I'll jump back in the queue.

Hi. Thank you, and good morning, and thanks for taking my questions.

I was hoping to talk a little bit about Jefferson just following the acquisition. Could you talk about that impact on the acquisition and in what that does for Jefferson, not only in terms of how you're thinking about integrating that and organically growing EBITDA, but maybe does this lead to a potential I don't know, strategic alternatives opportunity where this could be sold at some point in the future?

Yeah. Good morning, Greg.

Thanks for the question. The answer is yes.

I think the acquisition does a lot for Jefferson. First, outside of any strategic opportunities, it materially changes the cash flow profile of the business.

Jefferson is an asset that's been bought over years and years, and the team down in Beaumont has done an exceptional job building out the infrastructure. That is a gold-plated terminal, and I really believe all of our customers are very happy with the performance down there.

It has taken time, of course. There have been some frustrations in the amount of time that it has taken to ramp up.

I really think we've done a phenomenal job, again, led by the core team down in Beaumont, finally getting to a point where cash flows exceed interest expense on the debt that was incurred to build out all that infrastructure. Now, that infrastructure will live for the next 50 to 100 years, but it took a lot of capital, and we were able to borrow a fair amount of that capital to build out all that infrastructure.

It has left Jefferson relatively tight on a cash flow basis. This acquisition of USD completely transforms and changes the cash flow profile of the business.

Jefferson will now be generating ample excess cash flow, and that just in and of itself is very important. On a strategic front, I do think there's the 1 plus 1 equals 3 dynamic here.

We add a new high-quality pure investment-grade customer. We get access to new products, kind of akin to renovating your house before you sell it.

I'm looking forward to preparing the company for sale next year. Obviously, we've still got to execute somewhat, but look, I think the combined capital we have into Jefferson and the purchase price of USD will certainly be less than the total proceeds we'll get from a sale.

I think it's very accretive transaction as we look to a potential monetization next year.

All right. Super helpful.

Thank you very much.

Hey, good morning, guys. Thanks for taking the question.

Congrats on a solid quarter. What impact at Jefferson has the crisis in the Middle East presented you guys, in terms of customers or potential contracts?

Hey Matt. Good morning.

Yeah. As I mentioned in some of my comments, seems like that is recovering, but Q2 and Q3 at Jefferson were, I would say, meaningfully impacted by the activity in the Middle East.

A significant amount of volume historically, crude oil volume, that has come into Jefferson has originated in Saudi Arabia. Crude oil coming in by ship, frankly, it's high-margin.

Obviously high volume, and these are big ships and there's a lot of volume and a lot of margin. That historically has been good business for us at Jefferson, and things really slowed down in the second quarter.

I think the month of July saw no barrels imported from Saudi Arabia into the US at all, anywhere. I think that was the first month since some period in the 1980s that the United States did not import one drop of crude oil from Saudi Arabia.

It is certainly been a tough haul. Luckily, refined products, our ammonia business is holding strong and, frankly, running at record levels as it relates to refined products, we've been able to offset some of that softness.

I would tell you we are definitely seeing a recovery. It's a little choppy.

We don't have incredible visibility into a flow of ships back into Jefferson. What we're really focused on is helping customers access crudes from other production regions.

I mentioned in my remarks we're going to be commencing some new crude business here starting January 1st with actually two new customers, which is great. A good chunk of that crude is actually coming from the Uinta Basin.

We're looking at sources outside of Saudi and starting to really grow that Uinta Basin crude import. This is actually going to be crude barrels that will likely be exported, but, as long as we handle it, we're somewhat indifferent as to where it goes.

Look, I think the inbound ships are returning. We've certainly seen that in October, but the way to minimize any risk of uncertainty there is to really help our customers find barrels from other destination points, we can replace some of that volume.

Got it. That's helpful.

Then just to clarify on the USD assets, you expect that to close mid-November?

Yeah. We're hoping the week of November 16th.

Okay. Awesome.

Thank you, guys. Appreciate it.

Thank you very much, and congratulations. Just a terrific quarter all the way around.

A question for Ken, and bear with me, this is going to be a little convoluted. I want to hit two items you discussed for the Wheeling.

Number one, you've got this very large investment by Nippon Steel, and it's going to affect both Gary and Pittsburgh. I wanted to understand what that could mean over the three-year period in terms of whether it's incremental carloads, incremental revenues, and how that plays out.

Then the second is on the cost side. You still have these savings programs and integration plans with the Wheeling.

How far along are you on the cost synergies? Maybe an easier way to think about it is the railroad did a 76.6% operating ratio this quarter, and that's how rail people think about things, operating ratio.

Where can that OR go when these synergies and cost savings are fully implemented? I guess a question on revenue potential and a question on costs.

Great. We will certainly comment on both of those.

I'm joined here by John Carnes, who runs our railroad, I might lean on John for some commentary as it relates to the integration. Let's take the Nippon question first.

Nippon committed to about $11 billion of total investment at Gary, Indiana, and in the Mon Valley complex. The first piece of that we saw was up at the blast furnace, the relining of the blast furnace in Gary, and that took the bulk of the summer.

I think we're seeing more volumes going through Gary than frankly we've seen in a very long time, and it's because that blast furnace is back online, we're really encouraged by that. The bigger news was just a couple of weeks ago, I don't know if you saw it, but Nippon announced about $3 billion of investment in the Mon Valley complex primarily focused on US Steel's Edgar Thomson integrated mill.

They expect the investment to grow production volume from about 2.2 million tons per year to 3.5 million tons per year. What that means for us is a significant increase in carloads and ultimately revenue.

Hard to say with precision, but it's well into the tens of thousands of incremental carloads. Could be 30, 40, 50,000 incremental carloads for our Union Railroad, which is what serves the Mon Valley complex for US Steel.

Now, it's going to take a few years for those investments to be made, we'll start seeing that probably in 2 years or 3 years, but it's the kind of activity and volume that will be with us for a very long time thereafter. I'm super excited about what that means.

Obviously, there's still more investment to come, and we don't have a crystal ball on precisely what that's going to mean, but I'm sure Nippon will continue to make announcements as they commit their $11 billion investment. Probably over the next few years, a good tens of thousands of carloads of incremental volume, and that's probably $20 million of incremental EBITDA.

That's the kind of thing we're looking at. As it relates to cost savings and integration, I'm going to let John talk briefly, and then I'll come back to talk about some of the margins.

Sure. Thanks, Ken.

We're on track for about $19 million of annual cost savings, excluding one-time costs. Most of that's personnel reduction, there's some procurement purchasing power, if you think about the consolidation of the things we buy, it just doubled.

Lower overhead, things like insurance. The full benefit of that we'll really feel effective January 1st, that's when kind of the existing agreements come to an end.

Of course, the cost savings also tie closely with our integration. Last Sunday we cut over the Wheeling & Lake Erie railroad operating systems.

The financial systems were already cut over earlier in the year. It's gone about as smoothly as we could have hoped.

Most of it is behind us. There were no meaningful disruptions or impact of service to customers.

Really looking forward to a common platform. There's major benefits there.

The operating team immediately was very excited about the visibility and the tools to better manage the railroad. Think about speeding up your asset utilization.

We just got a whole new toolbox, and we're looking forward to implementing that on the Wheeling. Overall, the integration is, like I said, going about as well as we could have expected.

Yeah. I would just say on the margins, yes, OR is the industry standard and we're in the mid-70s.

I think these cost savings take us down into the low 70s. Ultimately, we'd love to ultimately get to a 6-handle, but that's going to take some time.

OR is something we look at. It's not at the top of our list.

What is unique about our rail business is cash flow and cash flow conversion. These assets are particularly low capital expenditure.

The cash flow generation, about 15% of our EBITDA goes into capital expenditures and 85% is available for reinvestment, distribution up to FIP, our parent, whatever it may be. Your typical railroad consumes 30, 40, sometimes 50% of EBITDA just to fund CapEx every year.

These railroads are shorter, they're more dense, and so we really benefit from a very low CapEx profile. That's not captured in the OR statistic, and so it's a big differentiator for our business.

When John and I talk about how did the month go, how did the quarter go, we look at margins of course and the various cost line items, but we're particularly focused on cash flow for those periods of time.

That was terrific. A lot of clarity.

Thank you.

Thank you, Michelle, and thank you all for participating in today's call. We look forward to updating you after Q4.