FTAI Infrastructure NASDAQ: FIP used its first-quarter 2026 earnings call to focus heavily on the pending sale of its Long Ridge power and gas asset, a transaction CEO Ken Nicholson said is expected to materially improve the company’s leverage profile and sharpen its strategic emphasis on freight rail growth.
Long Ridge sale: $1.52 billion transaction value, expected Q3 close
Nicholson said the company signed an agreement “just over a week ago” to sell Long Ridge to MARA Holdings for an aggregate transaction value of $1.52 billion. The company expects to close in the third quarter of 2026, subject to regulatory approval. Nicholson told analysts the primary approval is from the Federal Energy Regulatory Commission (FERC) for a change of control, and that the filing was expected imminently. He guided to “the middle of the third quarter” for approval, adding the company is focused on closing as soon as possible because earlier repayment would reduce interest expense.
According to Nicholson, existing Long Ridge debt will be repaid or assumed by the buyer, and expected net proceeds to FTAI Infrastructure are anticipated to be in excess of $300 million. He said the company plans to use the bulk of those proceeds to repay higher-cost parent-level debt and to increase focus on its core freight rail operations.
On deleveraging, Nicholson said the company expects to reduce parent debt by “at least $300 million” and lower parent-level interest expense by about $30 million per year. He noted the corporate debt includes terms that allow repayment with Long Ridge sale proceeds at a lower premium than would otherwise apply.
Strategic shift toward rail M&A and integration savings
Nicholson said the company expects “the bulk of our long-term growth going forward to be driven in the rail sector,” describing a large opportunity set in North American freight rail and anticipating an active period for rail M&A during the remainder of 2026.
During Q&A, Nicholson said incremental rail acquisitions would likely be financed primarily with incremental debt, supplemented by some cash retained from the Long Ridge transaction. He said paying down debt increases capacity for additional borrowing and argued it would be more efficient to issue debt for accretive acquisitions.
He also described why he expects deal flow to increase, citing three factors:
- Potential Class I railroad mergers, which could lead to divestitures of short-line and regional assets.
- Private equity and institutional owners nearing the end of typical 10-year fund lives, prompting monetizations over the next “six to 12 months.”
- Long-time individual owners considering exits after decades in the industry.
Q1 results: adjusted EBITDA $70.6 million; outage at Long Ridge
For the first quarter, Nicholson reported adjusted EBITDA of $70.6 million, up from $35.2 million in the first quarter of 2025. He cautioned year-over-year comparisons are less meaningful given investment activity, but described the quarter as strong and said the portfolio made progress.
Long Ridge results were affected by a 25-day planned outage tied to an inspection of the hot gas section of the power turbine, which Nicholson said is typically required every four to five years. While the inspection resulted in a “clean bill of health,” the outage reduced revenue and EBITDA for the quarter. Nicholson said that excluding the outage impact, consolidated first-quarter EBITDA would have exceeded $80 million, which would have been a record.
Segment performance: rail, Jefferson, Repauno, and Long Ridge
Rail: Nicholson reported rail segment adjusted EBITDA of $40.2 million in Q1. He said it was up 31% on an apples-to-apples basis and noted Q1 was the first full quarter with active control of the Wheeling operation, with integration savings beginning to show. Revenue was $85 million, compared to pro forma Q1 2025 revenue of $79.3 million; pro forma adjusted EBITDA for Q1 2025 was $30.6 million. Growth was attributed to higher volumes and rates and reduced expenses from cost-savings initiatives started in Q1. Nicholson also noted the first quarter is typically seasonally soft, especially at Wheeling due to winter impacts on construction materials.
On integration, Nicholson said the combination of Transtar and Wheeling is expected to drive gains through near-term cost savings and longer-term revenue opportunities. He said the company is targeting $23 million of annual cost savings, with $10 million enacted in Q1 (representing $2.5 million of EBITDA in the quarter) and the remaining $13 million expected to be implemented in the “relatively near term.” He also said the company sees more than $50 million of incremental annual EBITDA potential from new revenue sources over time, including propane carloads planned to start early next year when Repauno Phase II begins operations.
Jefferson Terminal: Jefferson posted $27.3 million of revenue and $14.4 million of adjusted EBITDA, compared with $19.5 million and $8 million, respectively, a year earlier. Nicholson said volumes averaged 275,000 barrels per day, driven by a new ammonia export contract that commenced in late November and increased inbound crude volumes.
Asked about softer unit pricing, Nicholson said there had been “no realized downward pricing” on any specific contract and characterized the change as a product mix shift between business lines such as crude oil and refined products. He added that crude oil typically commands a higher rate due to handling requirements, but that does not necessarily imply higher margins versus refined products.
He also said inbound crude volumes had not been affected “to date” by the conflict in the Middle East and the blockage of the Strait of Hormuz, because crude destined to Jefferson has originated largely from Saudi west coast terminals. Nicholson said crude volumes were steady so far in the second quarter.
On growth, Nicholson said the terminal is negotiating contract expansions largely with existing customers and hopes to execute on three opportunities during the year. He said the three opportunities represent more than $50 million of incremental annual EBITDA and would require little to no incremental capital investment. He also said discussions could take volumes above 500,000 barrels per day, with operational capacity around 600,000 barrels per day using existing infrastructure.
Repauno: Nicholson said construction of Repauno Phase II continues on plan and that once Phase II is operational, the terminal is expected to be capable of handling over 80,000 barrels per day of natural gas liquids and generating approximately $80 million of annual EBITDA across Phase I and Phase II. In later remarks, he described Phase II completion targeted by the end of 2026 with revenue beginning “shortly thereafter,” and said the company expects to commence revenue service in early 2027 at full capacity, citing strong demand and attractive propane export spreads.
On Repauno Phase III underground storage, Nicholson said the company remains focused on Phase II, but sees a favorable market environment for Phase III contracting and financing. He said monetization of Repauno “next year is certainly doable,” adding that a buyer would likely want to see Phase II complete and operating.
Long Ridge: Adjusted EBITDA at Long Ridge was $26.4 million in Q1, up from $18.1 million a year earlier, with a capacity factor of 73% due to the outage. Nicholson said power prices and capacity revenue remained at historically high levels. Gas production averaged “a little more than 86,000 MMBtu per day” versus “a little more than 70,000” required at the plant, allowing for excess gas sales. He said Long Ridge entered Q2 with a 100% capacity factor at the time of the call and continued production in excess of plant needs.
Balance sheet update: new term loan and Jefferson refinancing commitments
Nicholson said the company closed a new term loan of approximately $1.35 billion during the quarter, using proceeds to repay the initial loan issued in connection with the Wheeling acquisition. He said the new term loan is the only parent-level debt and carries a 9.75% annual coupon, and that the balance is expected to be about $300 million lower after the Long Ridge sale closes.
He also said the company received commitments to refinance a little over $200 million of debt at Jefferson, and characterized the overall result as a stable balance sheet with no near-term maturities and “a path for meaningful deleveraging” after the Long Ridge sale.
During Q&A, Nicholson acknowledged that beyond the planned debt repayment, the transaction should leave some additional cash on the balance sheet depending on timing and cash generation through closing. He said possible uses include additional debt repayment, retaining cash to fund acquisitions (including “a couple smaller situations” in rail he described as potentially highly accretive), and covering transaction fees that will be recognized at closing. He added that management and the board continuously evaluate other options for capital allocation.
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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