FTAI Infrastructure Q2 Earnings Call Highlights

FTAI Infrastructure (NASDAQ:FIP) reported second-quarter adjusted EBITDA of $76.1 million, compared with $45.9 million in the prior-year period, as the company advanced plans to sell its Long Ridge energy asset, expanded its rail platform and continued development work at its terminal operations.

Excluding Long Ridge, which is now accounted for as an asset held for sale, adjusted EBITDA was a quarterly record of $48.7 million, equating to an annualized run rate of just under $200 million, Chief Executive Officer Ken Nicholson said on the company’s second-quarter earnings call.

“We made good progress” during the quarter on the company’s three priorities for 2026: selling Long Ridge and reducing debt, growing the railroad portfolio, and preparing the Jefferson and Repauno terminals for potential monetizations next year, Nicholson said.

Long Ridge Sale Expected by End of Third Quarter

FTAI Infrastructure announced the sale of Long Ridge in late April and currently expects the transaction to close by the end of the third quarter, according to Nicholson. The sale is expected to eliminate roughly $1.4 billion of debt, including more than $1.1 billion at the Long Ridge level and about $300 million of other debt.

The company expects annual parent-level debt service to decline by approximately $25 million following the transaction. Nicholson said the resulting deleveraging and higher free cash flow should position FTAI Infrastructure to pursue additional investment opportunities, particularly in freight rail.

Long Ridge generated $27.4 million of adjusted EBITDA during the second quarter, up from $23 million a year earlier. Its power plant operated at an 85% capacity factor, affected by an outage that began in the first quarter and continued for 11 days into the second quarter.

Outside the outage, Nicholson said power prices and capacity revenue remained at historically high levels. The operation produced more than 73,000 MMBtu per day of gas on average, above the 70,000 MMBtu per day required by the plant. He said Long Ridge had begun the third quarter with capacity factor near 100% and gas production above plant requirements.

Rail Segment Posts Record Results, Adds Tidewater

The railroad business recorded quarterly revenue of $92.2 million and adjusted EBITDA of $42.4 million. Those figures compared with pro forma second-quarter 2025 revenue of $81.2 million and adjusted EBITDA of $37.6 million, with the prior-year pro forma figures including results from the Wheeling Lake Erie Railway.

Higher carloads at Wheeling offset somewhat lower volumes at Transtar, where U.S. Steel is undertaking an overhaul of the largest blast furnace at its Gary Works facility. Nicholson said Wheeling carloads generally carry higher average rates than Transtar volumes, contributing to higher blended pricing.

The integration of Wheeling is about 80% complete, Nicholson said in response to analyst questions. The company identified $20 million in expected cost efficiencies and remains on target, with the full impact expected to become more visible in the third and fourth quarters as initiatives implemented during the second quarter take effect. Remaining integration work includes IT consolidation, which is expected to conclude in the third quarter.

Management said revenue opportunities from combining the railroads have exceeded original expectations, including new transload facilities in Pittsburgh and potential growth in propane traffic. Nicholson reiterated an estimate of more than $50 million of incremental annual EBITDA potential from future revenue initiatives across the rail platform.

At the end of the second quarter, FTAI Infrastructure acquired Tidewater Logistics for $45 million in cash, financed through an add-on to its existing parent-level term loan. Tidewater operates four rail-served terminals and handles and transloads more than 20,000 carloads annually. The company expects Tidewater to contribute approximately $9 million of annual EBITDA.

Nicholson said FTAI Infrastructure is evaluating further rail acquisitions, including portfolios of short-line and regional railroads, industrial railroad carve-outs and smaller railroad or terminal tuck-ins. The company is particularly interested in businesses with opportunities for commodity and customer diversification, pricing flexibility, owned infrastructure and growth potential through capital investment.

Terminal Projects Target Growth Ahead of Potential Monetizations

At Jefferson, second-quarter revenue rose to $24.3 million from $21.6 million a year earlier, while adjusted EBITDA increased to $13 million from $11.1 million. Refined-products and ammonia volumes and revenue reached quarterly records, Nicholson said.

Crude volumes were affected by Middle East volatility that temporarily reduced inbound ship traffic during the quarter. However, the company has been informed that ship volumes are expected to recover in the third quarter. Jefferson is also increasing crude volumes delivered by rail from Utah, which require blending with pipeline-supplied crude.

Nicholson said FTAI Infrastructure completed an infrastructure project connecting Jefferson to the Southern Star Pipeline, enabling more efficient handling of light and heavy crude. The company forecasts a stronger crude outlook for the remainder of 2026 and is pursuing three expansion opportunities with existing customers that together could represent more than $50 million of incremental annual EBITDA while requiring little or no additional capital spending.

At Repauno, phase two construction remains on track for completion by year-end, with revenue service expected to begin in early 2027. The company has long-term contracts for part of the capacity and reported strong demand for the remaining space.

Combined phase one and phase two capacity is expected to approach 100,000 barrels per day and represent approximately $80 million of annual EBITDA. Most phase two spending has been financed through long-term, low-cost tax-exempt debt, Nicholson said.

FTAI Infrastructure has permitted and designed a potential phase three expansion at Repauno, though management said it will not begin financing or construction without a long-term customer contract. Nicholson said the company does not intend to delay the potential Repauno sale process while awaiting a phase three commitment.

About FTAI Infrastructure (NASDAQ:FIP)

FTAI Infrastructure Ltd (NASDAQ: FIP) is a closed-end investment company that acquires and manages infrastructure assets offering stable, long-term cash flows. The company targets core and core-plus infrastructure sectors with contracted or regulated revenue streams, aiming to deliver attractive risk-adjusted returns for its shareholders. FTAI Infrastructure’s portfolio is diversified across multiple sub-sectors, geographies and counterparties to manage risk and capture growth opportunities in global infrastructure markets.

The company focuses on three primary investment categories: communications infrastructure, transport and logistics infrastructure, and utility infrastructure.

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