FTAI 인프라스트럭처(FIP) 2026년 3분기 실적 발표 콘퍼런스콜: 철도 부문 사상 최대 실적 및 디레버리징

주요 내용

• FTAI 인프라스트럭처(FIP)는 2026년 3분기 조정 EBITDA가 9,530만 달러로 2025년 3분기의 7,090만 달러 대비 34.4% 증가하며 사상 최고치를 기록했다고 발표했다. 롱리지(Long Ridge)를 제외한 조정 EBITDA는 분기 사상 최고치인 5,440만 달러에 달했다.
• 철도 부문은 화차 수송량, 화차당 평균 운임, 매출 및 EBITDA에서 모두 사상 최고치를 경신했다. 매출은 전년 동기 대비 68.9% 증가한 1억 420만 달러를 기록했고, 조정 EBITDA는 62.9% 증가한 4,740만 달러를 기록했다.
• 경영진은 롱리지 매각이 11월 말까지 완료될 것으로 예상하고 있다. 15억 달러를 소폭 상회하는 총 매각 대금은 약 14억 달러의 부채를 상환하고 모회사 차원의 연간 원리금 상환액을 약 2,500만 달러 절감하는 데 사용될 전망이다.
• USD 그룹 자산은 계약상 최소 물량 기준으로 연간 약 5,000만 달러의 EBITDA를 창출할 것으로 예상된다. 경영진은 추가적인 설비 가동률 상승 및 통합 비용 절감 효과를 반영하기 전에도 통합 제퍼슨 사업의 연간 EBITDA가 1억 달러를 넘어설 것으로 내다보고 있다.
• 경영진은 물동량 증가, 운임 인상, 휠링(Wheeling) 통합 비용 절감에 힘입어 2027년에도 철도 매출이 두 자릿수 성장을 이어갈 것으로 전망했으며, EBITDA 성장세는 이보다 다소 가파를 것으로 예상했다.
• 리포노(Repauno) 2단계 건설 공사는 완공을 앞두고 있다. 경영진은 현재 진행 중인 고객사와의 협의를 바탕으로 2027년에 가동률이 거의 100%에 근접하거나 전면 가동되는 수준에서 상업 가동을 개시할 수 있을 것으로 내다봤다.

주요 재무 데이터

사업 및 운영 실적

철도

철도 부문 실적은 견조한 물동량과 운임 수준에 힘입었다. 게리 레일웨이(Gary Railway) 물동량은 게리 웍스(Gary Works) 최대 고로의 개보수 작업으로 일시적인 영향을 받았으나, 해당 공사가 9월에 완료됨에 따라 고로는 전면 가동 상태로 복귀했다.

경영진은 프로판 물동량이 사상 최고치 또는 그에 근접한 수준을 기록했으며, 업계 운임 역시 우호적인 흐름을 유지했다고 전했다. 회사는 2027년에 최소 한 자릿수 중반의 운임 상승률을 예상하고 있으며, 일부 계약은 한 자릿수 후반대의 인상률을 기록할 것으로 보고 있다.

휠링 통합 작업은 대부분 마무리되었다. 경영진은 주로 인력 감축, 조달 최적화, 간접비 절감 등을 통해 연간 약 1,900만 달러의 비용 절감을 기대하고 있으며, 이러한 효과는 1월 1일부터 온전히 가시화될 전망이다.

일본제철(Nippon Steel)은 게리와 몬밸리(Mon Valley) 복합시설 전반에 약 110억 달러의 투자를 약정했다. 이 중 몬밸리에 대한 약 30억 달러 투자는 연간 생산능력을 약 220만 톤에서 350만 톤으로 확대하는 데 목적이 있다. 경영진은 이를 통해 궁극적으로 철도 화차 수송량이 3만~5만 량 증가하고 약 2,000만 달러의 EBITDA 증대 효과가 발생할 수 있을 것으로 추산했으나, 그 수혜는 수년에 걸쳐 점진적으로 실현될 것으로 내다봤다.

제퍼슨 터미널

제퍼슨의 석유제품 사업은 물동량과 매출 모두 분기 사상 최고치를 달성했다. 원유 부문은 중동 지역 정세 불안에 따른 반입 물량 감소 영향으로 2분기와 3분기 다소 부진했으나, 10월 물동량은 3분기 평균치인 하루 41,000배럴에서 하루 85,000배럴로 반등했다.

회사는 신규 원유 고객사 2곳과 상업 계약 조건을 최종 확정했다. 해당 계약은 1월 1일부터 발효될 예정이며, 경영진은 이를 통해 연간 약 800만 달러의 EBITDA가 추가로 창출될 것으로 예상하고 있다.

FTAI 인프라스트럭처는 11월 16일 주간 무렵 USD 그룹 자산 인수를 마무리할 예정이다. 해당 자산은 투자적격등급 고객사와의 장기 의무인수(take-or-pay) 계약을 기반으로 하루 약 50,000배럴의 캐나다산 원유를 처리하고 있으며, 계약상 최소 물량 기준으로 연간 약 5,000만 달러의 EBITDA를 내고 있다.

경영진은 이 자산들을 제퍼슨과 통합해 비용 절감을 도모하고, 2027년 통합 터미널 사업의 잠재적 매각을 추진할 수 있는 여건을 마련할 계획이다.

리포노

신규 극저온 탱크와 철도 랙 및 선박 도크 연결 시설을 포함한 2단계 공사가 완공을 향해 순조롭게 진행되고 있다. 회사는 또한 2단계 전면 상업 가동 이전에 프로판 취급을 개시하기 위해 기존 부탄 저장 공동(cavern)을 프로판용으로 전환하고 있다.

가용 설비 용량의 일부는 이미 장기 계약으로 체결되어 있다. 경영진은 잔여 용량에 대한 수요가 높다고 밝히며, 해당 시설이 2027년에 거의 전면 가동되거나 100% 가동되는 수준에서 상업 가동을 시작할 것으로 예상했다. 회사는 현금흐름이 뚜렷해진 이후 자산 유동화(매각)를 검토할 수 있다.

경영진 가이던스

• 경영진은 2027년 철도 부문 매출이 전년 대비 두 자릿수 성장을 이어가고, EBITDA 성장률은 이보다 다소 높을 것으로 전망하고 있다.
• 철도 운임은 최소 한 자릿수 중반 상승할 것으로 예상되며, 일부 계약에서는 한 자릿수 후반대 인상이 나타날 것으로 보인다.
• 롱리지 매각은 규제 승인에 따른 거래 종결 절차를 거쳐 11월 말까지 완료될 예정이다.
• USD 인수 완료 후 통합 제퍼슨의 연간 EBITDA는 메인 터미널의 가동률 상승 및 잠재적 통합 비용 절감 효과를 제외하더라도 1억 달러를 넘어설 것으로 예상된다.
• 제퍼슨의 신규 원유 계약 2건은 1월 1일부터 연간 약 800만 달러의 EBITDA를 더할 것으로 예상된다.
• 현재 진행 중인 상업 협의 내용을 고려할 때 리포노 2단계 매출은 2027년부터 발생하기 시작하며, 전면 가동에 근접하거나 전면 가동되는 수준에 달할 가능성이 있다.

위험 요인 및 주시할 부분

• 제퍼슨의 원유 반입 사업은 중동발 공급 물량의 변동성에 지속적으로 노출되어 있다. 경영진은 회복세가 불균등하며 선박 도착에 대한 가시성도 여전히 제한적이라고 설명했다.
• USD 인수로부터 기대되는 효과는 인수 절차의 최종 마무리, 성공적인 통합, 추가 계약 체결 및 비용 절감 여부에 좌우된다.
• 리포노의 향후 실적 전망은 2단계 건설 완공 및 시운전, 그리고 잔여 용량에 대한 계약 체결 성패에 달려 있다.
• 일본제철의 투자로 인한 철도 물동량 증가의 시점과 규모는 해당 프로젝트들이 수년에 걸쳐 집행되기 때문에 여전히 불확실성을 안고 있다.
• 제퍼슨과 리포노의 잠재적 매각은 현재로서는 완료된 거래라기보다는 전략적 목표에 해당한다.

애널리스트 Q&A 주요 내용

경영진은 철도 부문 EBITDA의 가파른 성장세가 단일 요인 때문이 아니라 화차 수송량 증가, 견조한 프로판 수요, 게리 웍스 생산능력 회복, 우호적인 운임 등이 복합적으로 작용한 결과라고 설명했다. 아울러 이러한 성장 흐름이 2027년까지 지속 가능하다고 평가했다.

철도 부문 M&A와 관련해 경영진은 현재 시장이 지난 10~20년 중 가장 활성화된 시기 중 하나라고 진단했다. FTAI 인프라스트럭처는 기업 카브아웃(사업 분할) 및 만기가 임박한 사모펀드 보유 자산 등 규모가 더 큰 전략적 자산에 우선순위를 두고 있다.

제퍼슨과 관련해 경영진은 USD 인수가 잉여 현금흐름을 실질적으로 개선하고 터미널의 고객사 및 취급 제품군을 다변화할 것이라고 밝혔다. 회사는 통합 플랫폼이 2027년 잠재적 매각 추진 시 한층 유리한 입지를 다지게 될 것으로 확신하고 있다.

경영진은 시간이 다소 걸릴 수 있겠으나 철도 부문 영업비율(operating ratio)이 궁극적으로 70%대 중반에서 60%대로 개선될 수 있다고 언급했다. 다만 철도 설비투자(CapEx) 규모가 EBITDA의 약 15% 수준에 불과해 약 85%는 재투자나 주주 환원에 활용 가능하다는 점을 짚으며, 영업비율 자체보다는 현금 전환 능력이 더욱 중요하다고 강조했다.

실적 발표 컨퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter 2026 FTAI Infrastructure Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn the conference over to Alan Andreini, Investor Relations. Please go ahead.

Alan Andreini

Thank you, Michelle. I would like to welcome you all to the FTAI Infrastructure Earnings Call for the third quarter of '26 joining me here today are Ken Nicholson, the CEO of FDI Infrastructure; Buck Fletcher, the company's CFO, and John Carnes, CEO of New 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 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.

Kenneth Nicholson

Okay. Thank you very much, Alan. Good morning, everyone, and welcome to the call. It's been a very active past few months at FTAI, 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 our railroad and walk you through the building blocks of all of that in just a bit here. But 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 of 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 power 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.

And finally, we continue to position our terminals for monetization 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. And at Repauno, our Phase II 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 increased EBITDA at Jefferson Repauno and ultimately monetize those terminal assets as we are doing with Longbridge.

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 Longbridge, adjusted EBITDA was $54.4 million for Q3, another quarterly record. And 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 II operations at Ripon next year.

Flipping to Page 5. I'll talk briefly about our balance sheet and our deleveraging trajectory. With the long reach 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. And we expect our leverage profile to continue to improve over the next several quarters as we integrate the USD assets and bring online Phase II at Ripon.

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 and Lake Gary railed in August of last year, so 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 U.S. Steel continue 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 and Lake area is largely complete with the final systems integration taking place here in November, so 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, with 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 U.S. Steel's Pittsburgh and Gary facilities that should drive incremental volumes in the years to come. And propane shipments originating in Ohio destined for our Repauno terminal will commence next year.

While the outlook for organic growth is favorable, we are equally excited about the M&A market and opportunities that we are 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 networks should 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. Fruit 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 1, 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 fruit terminal in the Bolon Port Arthur energy complex and a 50% joint venture interest in a diluent recovery unit in Alberta, Canada. Two assets formed 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. Altogether, at the 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 talk through some of the highlights on Slide 11. We 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.

And finally, turning to Repauno. Our focus continues on Phase II 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 II is progressing well with the new progenic tank readying for completion as well as the 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 II. Repauno is approaching an important inflection point. We have 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 Repauno 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.

Alan Andreini

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

Operator

[Operator Instructions] First come from Julian Bologna with Compass Point.

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Giuliano Anderes-Bologna

Congrats on successful great quarter. coming over to the rail side. It looks like the growth in EBITDA in the Rail segment is accelerating. Can you expand on that and what's driving that acceleration and how durable it is?

Kenneth Nicholson

Julian, thanks for the question. Yes, we're very happy with Q3 and the results, we certainly are seeing a very good start to Q4. So 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. 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 the wheeling has ever seen them. And it's great to have the business at Gary now back online for the entirety of Q4.

The largest blast furnace in Garidana was out of out of service for the bulk of Q3. So 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. And so really, the growth is driven by revenue gains, and we're really happy with what we're seeing. And yes, I think it's very sustainable into 2027.

Giuliano Anderes-Bologna

That's very helpful. And then you mentioned the rail M&A environment is robust. Can you give us a little more color on what you're seeing and the types of opportunities you're looking at?

Kenneth Nicholson

Yes, definitely. I mean 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 -- I mean, 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 -- you have -- 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. So there's a big base of potential candidates for consolidation in a fragmented market. But 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 five 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. And then we continue to look at some corporate carve-outs kind of like our acquisition of Transtar from USL particularly fondo those types of situations because I think we can be a very differentiated buyer given our experience U.S. Steel.

So 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.

Operator

And the next question will come from Greg Lewis with BTIG.

Gregory Lewis

I was hoping to talk a little bit about Jefferson just following the acquisition. Could you talk about that impact on the acquisition and 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?

Kenneth Nicholson

Yes. Greg, thanks for the question. The answer is yes. I think the acquisition does a lot or 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. I mean that is a gold-plated terminal and I really believe all of our customers are very happy with the performance down there.

But 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. 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 those infrastructure.

But 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 the strategic front, I do think there is the 1 plus 1 equals 3 dynamic here. We added new high-quality pure investment-grade customer. We get access to new products, kind of akin to renovating your house before you sell it. And I'm looking forward to preparing the company for sale next year. Obviously, we're still going to execute somewhat. But look, I think the combined capital we have at the Jefferson and the purchase price of will certainly be less than the total proceeds we'll get from a sale and it's a very accretive transaction as we look to a potential monetization next year.

Operator

Our next question will come from Matthew Ortner with Jones.

Matthew Erdner

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

Kenneth Nicholson

Yes. 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. The significant amount of volume historically, fruit oil volume that has come in to Jefferson has originated in Saudi Arabia. And crude oil coming in by ship is particularly, frankly, tight margin obviously, high volume and its big ships, and there's a lot of volume and a lot of margin. And so 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 U.S. at all anywhere. I think that was the first month some period in the 1980s that the United States did not import one drop of crude oil from Saudi Arabia. So it has certainly been a tough fall luckily, refined products, our ammonia business. Is holding strong and frankly, running at record levels as it relates to refined products. So 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 crude from other production regions. I mentioned in my remarks, we're going to be commencing some new crude business here starting January 1 with actually two new customers, which is great. And a good chunk of that crude is actually coming from the Ueno Basin. And so we're looking at sources outside of Saudi and starting to really grow that into basin crude import. There's 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.

So 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 so we can replace some of that volume.

Matthew Erdner

Got it. That's helpful. And then just to clarify on the USD assets. Do you expect that to close mid-November.

Kenneth Nicholson

Yes, we're hoping the week of November 16.

Operator

And the next question will come from Jeff Kauffman with Citizens Bank.

Jeffrey Kauffman

Congratulations. Just a terrific quarter all the way around. A question for Ken and bear with me in to be a little convoluted. But 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. And 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.

And 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? And 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? So I guess a question on revenue potential and a question on cost.

Kenneth Nicholson

Great. We will certainly comment on both of those. I'm joined here by John Kerns, who runs our railroad. So I might lean on John for some commentary as it relates to the integration, but 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. And -- the first piece of that, 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 then frankly, we've seen in a very long time. It's because that's right now, and it's because that blast furnace is back online. So we're really encouraged by that. But 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 U.S. Steel's, EDGAR Thompson integrated mill. They expect the investment to grow production volume for 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 I mean it's is well into the tens of thousands of incremental carloads, could be 30,000, 40,000, 50,000 incremental car loads for our Union Railway, which is what serves the Mon Valley complex for U.S. Steel. Now it's going to take a few years for those investments to be made. So we'll start seeing that probably in two years or three years. But it's the kind of activity and volume that will be with us for a very long time thereafter.

And so 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. So 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. So 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 and talk about some of the margins.

Jonathan Carnes

Sure. Thanks, Ken. We're on track for about $19 million of annual cost savings, excluding onetime costs. Most of that is personnel reduction. There's some procurement, purchasing power, if you think about the consolidation of what we bought it just the things we buy, which just don't lower overhead, things like insurance. The full benefit of that will really feel effective January 1 is when kind of the existing agreements come to an end.

And of course, the cost savings also tied closely with our integration. Last Sunday, we cut over the Wheeling and Lake are 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 service to impact service to customers, really looking forward to the 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.

So Overall, the integration is, I said going about as well as we could have expected.

Kenneth Nicholson

Yes. And 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 the Ultimately, we'd love to ultimately get to a six 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 expenditures. 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 upon CapEx every year. These railers 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. And 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.

Operator

And I'm showing no further questions in the queue. I would now like to turn the call back over to Alan for closing remarks.

Alan Andreini

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

Operator

This concludes today's conference call. Thank you for participating.