Hội nghị công bố kết quả kinh doanh Quý 3/2026 của FTAI Infrastructure (FIP): Kết quả mảng đường sắt kỷ lục và giảm đòn bẩy

Những điểm nhấn chính

• FTAI Infrastructure (FIP) đã công bố EBITDA điều chỉnh kỷ lục trong quý 3/2026 đạt 95,3 triệu USD, tăng 34,4% so với mức 70,9 triệu USD trong quý 3/2025. Nếu không tính Long Ridge, EBITDA điều chỉnh đạt mức kỷ lục theo quý là 54,4 triệu USD.
• Mảng đường sắt đã thiết lập kỷ lục về sản lượng toa xe hàng, giá cước bình quân trên mỗi toa, doanh thu và EBITDA. Doanh thu tăng 68,9% so với cùng kỳ năm trước lên 104,2 triệu USD, trong khi EBITDA điều chỉnh tăng 62,9% lên 47,4 triệu USD.
• Ban lãnh đạo dự kiến thương vụ thoái vốn Long Ridge sẽ hoàn tất vào cuối tháng 11. Tổng số tiền thu được hơn 1,5 tỷ USD dự kiến sẽ giúp xóa bỏ khoảng 1,4 tỷ USD nợ và giảm chi phí trả nợ hàng năm ở cấp công ty mẹ khoảng 25 triệu USD.
• Các tài sản của USD Group dự kiến sẽ đóng góp khoảng 50 triệu USD vào EBITDA hàng năm theo sản lượng tối thiểu đã ký hợp đồng. Ban lãnh đạo kỳ vọng hoạt động kinh doanh sau sáp nhập của Jefferson sẽ vượt mức 100 triệu USD EBITDA hàng năm, trước khi tính đến việc nâng cao hiệu suất sử dụng công suất và các khoản tiết kiệm từ việc tích hợp.
• Ban lãnh đạo dự báo doanh thu mảng đường sắt sẽ tiếp tục tăng trưởng ở mức hai con số trong năm 2027, trong đó EBITDA dự kiến sẽ tăng nhanh hơn đôi chút nhờ sản lượng cao hơn, giá cước thuận lợi và các khoản tiết kiệm từ việc tích hợp Wheeling.
• Dự án xây dựng Giai đoạn II của Repauno đang gần hoàn tất. Dựa trên các cuộc thảo luận hiện tại với khách hàng, ban lãnh đạo kỳ vọng hoạt động thương mại tạo doanh thu sẽ bắt đầu vào năm 2027 với công suất gần đạt hoặc đạt mức tối đa.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và hoạt động

Đường sắt

Kết quả hoạt động của mảng đường sắt được củng cố nhờ sản lượng và giá cước đều tăng mạnh. Sản lượng của Gary Railway từng bị ảnh hưởng tạm thời do đợt đại tu lò cao lớn nhất tại Gary Works, nhưng dự án đã hoàn thành vào tháng 9 và lò cao này đã hoạt động trở lại với công suất tối đa.

Ban lãnh đạo cho biết sản lượng propan đã đạt hoặc gần đạt mức kỷ lục, trong khi mặt bằng giá của ngành tiếp tục duy trì thuận lợi. Công ty kỳ vọng giá cước sẽ tăng ít nhất ở mức một chữ số tầm trung, với một số hợp đồng đạt mức tăng ở mức một chữ số cao trong năm 2027.

Quá trình tích hợp Wheeling phần lớn đã hoàn tất. Ban lãnh đạo kỳ vọng sẽ tiết kiệm được khoảng 19 triệu USD chi phí hàng năm, chủ yếu nhờ tinh giản nhân sự, tối ưu hóa mua sắm và giảm chi phí quản lý chung, với toàn bộ lợi ích dự kiến sẽ phát huy từ ngày 1/1.

Nippon Steel đã cam kết đầu tư khoảng 11 tỷ USD vào Gary và tổ hợp Mon Valley. Khoản đầu tư khoảng 3 tỷ USD của tập đoàn này vào Mon Valley nhằm nâng công suất sản xuất từ khoảng 2,2 triệu tấn lên 3,5 triệu tấn mỗi năm. Ban lãnh đạo ước tính dự án này sau cùng có thể bổ sung thêm 30.000 đến 50.000 toa xe hàng cho mảng đường sắt và mang lại khoảng 20 triệu USD EBITDA tăng thêm, dù các lợi ích này dự kiến sẽ xuất hiện dần trong nhiều năm.

Kho cảng Jefferson

Mảng sản phẩm lọc dầu của Jefferson đã đạt kỷ lục theo quý về cả sản lượng lẫn doanh thu. Hoạt động vận chuyển dầu thô diễn ra trầm lắng hơn trong quý 2 và quý 3 do các chuyến hàng nhập vào sụt giảm liên quan đến những biến động tại Trung Đông, nhưng sản lượng trong tháng 10 đã phục hồi lên 85.000 thùng/ngày từ mức trung bình 41.000 thùng/ngày của quý 3.

Công ty đã chốt các điều khoản thương mại với hai khách hàng dầu thô mới. Các hợp đồng này dự kiến bắt đầu có hiệu lực từ ngày 1/1 và được ban lãnh đạo kỳ vọng sẽ tạo ra thêm khoảng 8 triệu USD EBITDA hàng năm.

FTAI Infrastructure dự kiến sẽ hoàn tất thương vụ mua lại tài sản của USD Group vào khoảng tuần ngày 16/11. Các tài sản này xử lý khoảng 50.000 thùng dầu thô Canada mỗi ngày theo hợp đồng bao tiêu dài hạn (take-or-pay) với một khách hàng có xếp hạng tín nhiệm đầu tư, mang lại khoảng 50 triệu USD EBITDA hàng năm tính theo sản lượng tối thiểu đã cam kết.

Ban lãnh đạo có kế hoạch tích hợp các tài sản này với Jefferson, tìm kiếm các cơ hội tiết kiệm chi phí và chuẩn bị vị thế cho mảng kinh doanh kho cảng sau sáp nhập để hướng tới khả năng thoái vốn vào năm 2027.

Repauno

Công tác xây dựng Giai đoạn II đang tiến dần đến ngày hoàn thành, bao gồm một bồn chứa đông lạnh mới cùng các tuyến kết nối liên quan tới hệ thống giàn nạp đường sắt và bến tàu. Công ty cũng đang chuyển đổi một kho ngầm chứa butan hiện hữu sang phục vụ propan để bắt đầu tiếp nhận propan trước khi Giai đoạn II chính thức đi vào vận hành toàn diện.

Các hợp đồng dài hạn đã bao tiêu một phần công suất sẵn có. Ban lãnh đạo cho biết nhu cầu đối với phần công suất còn lại hiện rất cao và kỳ vọng cơ sở này sẽ bắt đầu đi vào hoạt động thương mại vào năm 2027 với công suất gần đạt hoặc đạt mức tối đa. Công ty có thể xúc tiến hiện thực hóa giá trị tài sản sau khi dòng tiền trở nên rõ ràng.

Định hướng của ban lãnh đạo

• Ban lãnh đạo kỳ vọng doanh thu mảng đường sắt sẽ tiếp tục tăng trưởng ở mức hai con số so với cùng kỳ năm trước trong năm 2027, trong đó mức tăng trưởng EBITDA sẽ cao hơn đôi chút.
• Giá cước đường sắt dự kiến sẽ tăng ít nhất ở mức một chữ số tầm trung, với mức tăng ở mức một chữ số cao trong một số trường hợp.
• Thương vụ Long Ridge dự kiến sẽ hoàn tất vào cuối tháng 11, tùy thuộc vào việc hoàn tất giao dịch sau khi nhận được sự phê duyệt của cơ quan quản lý.
• EBITDA hàng năm sau sáp nhập của Jefferson dự kiến sẽ vượt 100 triệu USD sau thương vụ mua lại USD, trước khi tính đến hiệu suất sử dụng cao hơn tại kho cảng chính và các khoản tiết kiệm tiềm năng từ việc tích hợp.
• Hai hợp đồng dầu thô mới của Jefferson dự kiến sẽ đóng góp thêm khoảng 8 triệu USD vào EBITDA hàng năm bắt đầu từ ngày 1/1.
• Doanh thu từ Giai đoạn II của Repauno dự kiến sẽ bắt đầu ghi nhận vào năm 2027, với khả năng gần đạt hoặc đạt mức công suất tối đa dựa trên các cuộc đàm phán thương mại hiện tại.

Rủi ro và các yếu tố cần theo dõi

• Mảng tiếp nhận dầu thô nhập khẩu của Jefferson vẫn chịu rủi ro trước sự biến động của các dòng cung ứng từ Trung Đông. Ban lãnh đạo nhận định đà phục hồi diễn ra chưa đồng đều và khả năng dự báo về lịch trình cập bến của các tàu chở dầu vẫn còn hạn chế.
• Những lợi ích kỳ vọng từ thương vụ mua lại USD phụ thuộc vào việc hoàn tất giao dịch, tích hợp thành công, ký kết thêm hợp đồng mới và thực hiện tiết kiệm chi phí.
• Triển vọng của Repauno phụ thuộc vào việc hoàn thành xây dựng và đưa Giai đoạn II vào vận hành, cũng như việc ký kết hợp đồng cho phần công suất còn lại.
• Thời điểm và quy mô sản lượng đường sắt tăng thêm từ các khoản đầu tư của Nippon Steel vẫn chưa chắc chắn do các dự án này sẽ được triển khai trong nhiều năm.
• Khả năng thoái vốn tại Jefferson và Repauno hiện vẫn là các mục tiêu chiến lược chứ chưa phải là các giao dịch đã hoàn tất.

Những điểm nhấn trong phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho rằng đà tăng trưởng EBITDA mảng đường sắt được thúc đẩy bởi sự kết hợp của nhiều yếu tố như sản lượng toa xe cao hơn, nhu cầu propan mạnh mẽ, công suất của Gary Works được khôi phục và mặt bằng giá cước thuận lợi, thay vì chỉ đến từ một động lực duy nhất. Ban lãnh đạo đánh giá xu hướng tăng trưởng này mang tính bền vững sang năm 2027.

Về hoạt động M&A trong ngành đường sắt, ban lãnh đạo nhận định thị trường hiện tại đang ở giai đoạn sôi động nhất trong vòng 10 đến 20 năm qua. FTAI Infrastructure đang ưu tiên các tài sản chiến lược quy mô lớn hơn, bao gồm các mảng kinh doanh được tách ra từ doanh nghiệp (corporate carve-outs) và các tài sản do các quỹ đầu tư tư nhân sắp đến hạn thoái vốn nắm giữ.

Đối với Jefferson, ban lãnh đạo cho biết thương vụ mua lại USD sẽ cải thiện đáng kể dòng tiền thặng dư, đồng thời mở rộng tệp khách hàng và danh mục sản phẩm của kho cảng. Công ty tin rằng nền tảng sau sáp nhập sẽ có vị thế thuận lợi hơn cho một thương vụ thoái vốn tiềm năng vào năm 2027.

Ban lãnh đạo cho biết hệ số chi phí hoạt động (operating ratio) của mảng đường sắt sau cùng có thể giảm từ vùng giữa 70% về vùng 60%, mặc dù điều này sẽ cần thời gian. Ban lãnh đạo nhấn mạnh hiệu quả chuyển đổi tiền mặt quan trọng hơn hệ số chi phí hoạt động, đồng thời lưu ý rằng chi phí vốn của mảng đường sắt chỉ chiếm khoảng 15% EBITDA, để lại khoảng 85% dành cho tái đầu tư hoặc phân phối lợi nhuận.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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.