Financial Data and Key Metrics - Adjusted EBITDA before corporate expenses for Q2 2024 was 41.8million,up15200 million of run-rate annual EBITDA by the end of 2024 and expects to exceed this in 2025 [6] - Total debt as of June 30 was 1.6billion,with564 million at the corporate level and the rest at business units [9] Business Segment Performance Transtar - Adjusted EBITDA for Transtar was 22.1millioninQ2,withsteadycarloadvolumesandrecordaverageratesof667 per carload [6][10] - The company added new third-party customers and expects to add more in H2 2024, diversifying its revenue base [11] - Transtar is debt-free and has potential for acquisitions of short-line and regional rail assets [9][12] Jefferson - Jefferson generated 12.3millioninadjustedEBITDAinQ2,handlingrecordvolumesof215,000barrelsperday[7]−Twolong−termcontractscommencingin2025areexpectedtocontribute20 million in annual EBITDA [14] - The company is negotiating additional contracts that could generate 60millioninannualrevenue[14]Repauno−Phase2constructionissettobegininQ32024,withexpectedcapacityfor75,000barrelsperdayofnaturalgasliquids[15]−Phase2isprojectedtocontribute75 million in annual EBITDA upon completion, up from initial expectations of 40million[15]LongRidge−LongRidgegenerated8.8 million in EBITDA in Q2, impacted by scheduled maintenance in May [16] - Capacity auction results for 2025-2026 indicate a 10x increase in pricing, potentially adding 32millioninincrementalEBITDA[16][17]−Thecompanyisengagingwithmultiplepartiesforon−sitedatacenterprojects,leveragingitspowergenerationcapabilities[18]MarketandStrategicDirection−Thecompanyisfocusedonowningcoreinfrastructureinmajormarketswithlong−termcontractedcashflowsandgrowthopportunities[5]−Strategicinitiativesincludeexpandingthird−partycustomerbases,developingnewfacilities,andpursuingaccretiveacquisitions[6][12][34]−Thecompanyiswell−positionedtobenefitfrommacrotrendssuchasAI−drivenpowerdemandandenergytransitions[5][17]ManagementCommentaryonOperatingEnvironmentandOutlook−ManagementexpectscontinuedmomentuminH22024,drivenbynewbusinesswinsandstrategicinitiatives[4]−Thecompanyisoptimisticaboutthegrowthpotentialacrossallsegments,particularlyTranstarandLongRidge[34]−Thefavorablecommerciallandscapeandstrongdemandforpowerandinfrastructuresupportthecompany′sgrowthtrajectory[17][18]OtherKeyInformation−Thecompanydeclareda0.03 per share quarterly dividend, payable on August 20 [4] - Transtar's new railcar repair facility handled 816 railcars in Q2, with plans to introduce a second shift to increase capacity [11] - Jefferson completed a new financing in Q2, refinancing near-term maturities and funding construction projects [7][9] Q&A Session Summary Question: Transtar's third-party revenue growth - When acquired, Transtar's revenue was 95% from U.S. Steel, now below 85%, with a goal to reduce it to the mid-60s [20] Question: Transtar acquisition strategy - The company is focusing on short-line railroads with regional overlap and industrial switching lines, aiming to diversify revenue [22] Question: Repauno cavern approvals - Cavern permits are expected in H2 2024, with construction starting in 2025, adding significant value to Repauno [24] Question: Long Ridge capacity auction impact - The capacity auction results have increased negotiating leverage with behind-the-meter customers, including data centers [26] Question: Jefferson's new contracts - Two contracts commencing in 2025 will contribute $20 million in annual EBITDA, with no ramp-up period [28][29] Question: Balance sheet refinancing - The company is planning a refinancing in H2 2024 to reduce borrowing costs and increase flexibility, potentially leveraging Transtar [30][31] Question: Management's priorities - Top priorities include accretive acquisitions at Transtar and development opportunities at Long Ridge [34] Question: Long Ridge swaps and merchant power - Swaps have 3-5 years remaining, and the plant is technically a merchant plant, free to provide power to any customer [36] Question: Long Ridge data center backup power - Backup power costs are likely borne by the company, with flexibility in power management being a key advantage [38][39]
