FIP Q1 2026 Earnings Call Transcript

Chief Executive Officer — Kenneth Nicholson Head of Investor Relations — Alan Andreini Need a quote from a Motley Fool analyst? Email pr@fool.com Kenneth Nicholson: Thank you, Alan, and good morning, everyone. Welcome to the call. As we typically do, we ll be referring to the earnings supplement, which you can find posted on our website. Before we get into the quarterly financial results, we re going to kick things off with a discussion of Long Ridge and provide some details on the sale transaction that we announced last week. I m going to briefly walk through the transaction terms and then I ll talk a little bit about why we believe it to be an important and highly accretive event for our company. Just over a week ago, we signed an agreement to sell Long Ridge to Mara Holdings for an aggregate transaction value of $1.52 billion. We expect to close the transaction in the third quarter of this year after receiving required regulatory approvals, and there are no other material conditions to closing. Existing Long Ridge debt will either be repaid or assumed by the purchaser, bringing expected net proceeds to FTAI in excess of $300 million. We re pleased with the outcome of the sale process and believe Mara is a great fit as the next owner of Long Ridge. I want to recognize and thank Bob Wholey and the Long Ridge team for doing a remarkable job throughout the entire life cycle of our investment, developing the business plan building a power plant, acquiring gas reserves and turning on and maintaining operations to ultimately create what today is one of the most efficient and profitable power assets in the country. The transaction value reflects the uniqueness of the Long Ridge asset and results in a meaningful economic return for FTAI over the life of our investment. More importantly, the sale of Long Ridge will allow us to accomplish 2 key goals: First, deleveraging. We plan to use the bulk of the net proceeds received at closing to repay higher cost debt at a parent level, resulting in lower interest expense and higher free cash flow going forward; second, increasing our focus on our core freight rail business. We expect 2026 to be an active year for our railroad with growth driven internally by integration of Transtar and the Wheeling and externally as we pursue a number of acquisition opportunities that leverage our existing platform. Having higher cash flow and additional debt capacity to fund acquisitions puts us in a good position to make accretive investments in the rail sector in the near future. I m going to flip to Page 4, and we ll talk a little bit more about deleveraging. As you may recall, our existing corporate debt contains terms allowing for repayment with proceeds from the Long Ridge sale to be made at a lower premium than would otherwise be due if funded with other sources of cash. So with less premium required, we were able to repay more principal. In total, we expect to reduce parent debt by at least $300 million and reduce our parent level interest expense by about $30 million per year meaningfully improving our leverage metrics. We expect our leverage metrics to continue to improve over the next several quarters as we realize more integration efficiencies at our rail business and bring online new business at our terminals, especially Repauno. Turning to Slide 5, with the deleveraged balance sheet and higher free cash flow generation, we expect the bulk of our long-term growth going forward to be driven in the rail sector. We have an enormous opportunity set in front of us in the North American freight rail space and an exceptional platform from which to grow. We expect the remainder of 2026 to be a particularly active one for the rail sector M&A, and we re actively evaluating multiple opportunities and look forward to reporting back on our progress. While we expect our freight rail business to emerge as the dominant source of earnings for us going forward, we re also excited about the future of our 2 terminals and are focused on ensuring that both Jefferson Repauno each reach their earnings potential with the view to monetizing both assets in the future. Jefferson is currently engaged in conversations with customers for new business, representing at least $50 million of additional annual EBITDA and Repauno similarly is expected to complete its Phase 2 expansion at the end of this year and start revenue service shortly thereafter. Now we ll go into the results for the quarter. Adjusted EBITDA for Q1 came in at $70.6 million, up materially from $35.2 million for the first quarter of 2025. Given the investment activity during last year, year-over-year comparisons are less meaningful, but I can say that the quarter was a strong one that reflected great progress across our portfolio. At Long Ridge, we took an outage for 25 days that impacted revenues and EBITDA for the quarter. The outage was planned but longer than typical as it related to inspection of the hot gas section of the

FIP Q1 2026 Earnings Call Transcript

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FIP Q1 2026 Earnings Call Transcript

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