Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 Fortress Transportation and Infrastructure Investors LLC Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Alan Andreini, Head of Investor Relations. Sir, you may begin.

Thank you. I would like to welcome you to the Fortress Transportation and Infrastructure fourth quarter 2017 earnings call. Joining me here today are Joe Adams, our Chief Executive Officer; and Scott Christopher, our Chief Financial Officer. We have posted an investor presentation in 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. The reconciliation of those measures to the most directly comparable GAAP measures can be found in the earnings supplement. Before I turn the call over to Joe, 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 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 Joe.

Thank you, Alan. To start, I am pleased to announce our eleventh dividend as a public company and our 26th consecutive dividend since inception. The dividend of $0.33 per share will be paid on March 27 based on a shareholder record date of March 16. Before going over the numbers for each operating entity, I’m pleased to announce the following numbers for Q4. Adjusted EBITDA $47.8 million, adjusted net income $6.2 million, Aviation closings in the quarter $160 million and finally projected Aviation FAD from the existing portfolio plus our current letters of intent, $250 million. Now let me review the numbers in more detail. The key metrics for us are adjusted EBITDA and FAD, or Funds Available for Distribution. Adjusted EBITDA for Q4 2017 was $47.8 million compared to Q3 of 2017 of $37.8 million, and Q4 of 2016 of $22.4 million. FAD was $47.2 million in Q4 versus $73.6 million in Q3 of 2017 and $20.5 million in Q4 of 2016. During the fourth quarter, the $47.2 million FAD number was comprised of $79.1 million from our equipment leasing portfolio, negative $16.4 million from our infrastructure business, and negative $15.5 million from corporate. The negative infrastructure number increased due to a one-time charge for interest expense which had been capitalized during the year. The overall infrastructure revenue increased primarily due to butane sales at Repauno offset by increased operating expenses related to the ramp up in ethanol and refined products operating expenses at Jefferson. The increase in the negative FAD at corporate compared to Q3 was primarily due to the increase in interest expense from $100 million add-on to our six and three-quarter percent unsecured debt issue. Finally, $30.2 million of the 79.1 million for the equipment FAD was the result of the sale of our investment in…

Thank you, Joe. Operator, you may now open the call to Q&A.

Thank you. [Operator Instructions] And our first question comes from [Bryan Colin with Stephens]. Your line is now open.

Hey, good morning guys. So just wanted to talk about Aviation leasing, just wondering how we should think about the rents there going forward and when you would expect to get to that $250 million FAD run rate?

I think all those LOIs should be closed by Q2 so I think you would see it full in Q3.

Okay. That’s helpful. And secondly so last quarter you gave a breakdown of the $25 million to $40 million EBITDA you expect for Jefferson this year, just curious if your expectation for the mix of business there you know within that 25 to 40 has changed at all.

I would say the refine products is probably a little lower just because it’s been a slower ramp up, ethanol is probably a little bit higher but it’s not dramatically different.

Okay. And then could you give an update on how discussions are progressing around potential crude by rail contract. At this point what do you think is the main thing that’s holding potential customers back you know from signing a deal.

Well we could sell very possibly everything we could get to the terminal right now. As I mentioned the constraint is currently getting rail capacity and for a variety of reasons the Canadian railroads had a very busy winter with crane, with frac sand, intermodal and so when everyone came to them and said I’m ready to do crude by rail again, they said we’re not ready. And by the way the last time we did you left me standing at the altar in that I didn’t like that. So, it was a bit of a negotiation going on and we were able to secure what is pretty limited rail class [ph] starting in Q3. I think it will be about five to six trains a month under that contract and we’re trying to get more. So as much as we can get right now, we could sell it profitably.

Right, so I mean in the quarter, the throughput volumes were up pretty nicely. Just curious when you would expect to recognize the revenue there because it was down sequentially.

Well I would say right now we’re indicating that it will be more Q3 at the beginning in Q3 but we’re going to try to do more in Q2 if we can get it.

Thank you. Our next question comes from Chris Wetherbee from Citigroup. Your line is now open.

I want to actually follow up on with that question on Jefferson with another, there was substantial value so how we think about those translating into revenue and then also I want to get your sense of volumes in Q1 and how those might be translating into revenue as well?

Yeah, one thing that happened in Q4 is that revenue shifted as we book a lot of business through the ethanol as it shows up in other as opposed to revenue and so if you can want to think about it properly you should really combine those because the ethanol is a joint venture and so it gets booked as other. And so, a lot of the activity in Q4 and particularly December was ethanol. And so then going forward we’re expected approximately 30 trains in Q1 and probably 45 trains in Q2 on ethanol and on the refine products roughly 10 in Q1 and probably 30 in Q2.

Alright. That’s helpful and then also you made a comment about e-commerce demand within aviation, I want to get more color on that to see how you see that manifesting. And if there is a particular customer or if you pair with a particular customer and what level of demand that might be?

Well it's a great question, since we are largely an investor in engines and a lot of our engines go on 757s and 767s and 737, 800s. The longer those aircraft fly and where more demand is for our engines and the more money we will make. And so, it's actually a terrific macro because if the 757, 76s a passenger plane might fly for 20 to 25 years, as a freighter it could fly for 35 to 40 years. So that demand from that space makes our engines more valuable, so to me it’s a great, its icing on the cake, but it’s a lot of icing.

And so, does that mean, there might be more acquisitions and investment in that, since you see, [indiscernible] and if that like 160 was more opportunistic or if it sort of what we should expect moving forward?

Well it’s a little bit high, I think last year we started out the year expecting we would invest about 215, we ended up doing more than 400. I would probably say the expectation maybe should stay the same, but maybe it’s a bit higher, I think the size of the market opportunity that we look at keeps growing, and in particular, the activity around 737 MGs and A320s is much bigger than the 75, and the 76 market. So, in general I think we will probably do more, but as I have said many times, we don’t really budget new investments, they happen because, the deals are attractive enough, not because we are out trying to make them happen.

Thank you. And our next question comes from Ariel Rosa, with Bank of America. Your line is now open.

Hey, morning guys. So, I wanted to start out, there’s obviously between the sales, the off-shore investment and the equity raise, you guys are getting a bit of an inflow of capitals here. Could you just layout, kind of what are priorities for that capital, obviously with all the projects that you have, there is a lot of CapEx in each. Where do you see that capital kind of going throughout the year, and how much incremental capital do you think you might have to raise in terms of debt?

So I think the priorities are aviation number one, and we have a pretty good pipeline of deal opportunities ahead of us and some of them are probably bigger than they have been, so I think that’s part of it is being positioned and we need to be opportunistic in that and also just continue to [regular way] business, so that’s the top priority and its, it's very profitable business from the beginning, it's not -- it should be very low lag in those fields in terms of producing income. And then the second priority for capital this year will be the power plant at Long Ridge Energy Terminal. And that's something as I mentioned is coming here nicely, we are out in the market right now, talking to long-term off-takers for power and as soon as we have that in a position where we are comfortable, we have got that locked down and I think we would go forward with that project and that’s $550 million, so its sizable, but it's over three years, so it's not immediate, but that would be the next priority. And then beyond that its not to the level yet where I could specific identify, as I mentioned Repauno, the underground storage caverns are a great opportunity but we haven’t finished the core sampling yet, so I, it's premature to say that’s not a committed or go yet.

But, so you did mention, Jefferson in there, is that to say that using the CapEx needs there rather limited or what’s thinking on CapEx needs on Jefferson.

We have invested in the -- last year we did ethanol and the refined products were doing storage this year and we believe that most of what we do going forward at Jefferson will be debt financed at the Jefferson level. So, I don’t think of that as a corporate FTAI requirement.

Got it. So, you expect that will come from the revolver from that $50 million revolver?

Over long-term debt at Jefferson, we already have $200 million of tax exempt debt at the Jefferson level and I would expect that we have opportunistic invest, building out storage or doing a pipeline connection will be what we are doing and I would expect that they have a contract attached to it which would enable us to debt finance long term on that investment probably all of it.

Got it. Understood. And then switching gears little bit, obviously the returns in Aviation look very attractive right now. Are you seeing more money coming into that space is there risk that influx of capital from competitors could potentially diminish some of the returns there and the attractiveness of that business?

It’s been that way for the last couple of years. I don’t think it’s much worse than it has been. But there is a lot of capital that is mostly focused on newer aircraft and longer-term leases. And so, where we’ve done almost all of our investments have been in older equipment with either shorter leases or off lease and we’re focused really on the engine. So, we don’t see any increase in competition in that area.

Okay. That’s helpful. And then just last question from me. Joe, maybe you could explain a little bit more this question of the challenges in terms of securing rail capacity for Canadian crude. It seems like if the capital is there and that historically has been a very high return business for the railroads. I guess I’m a little confused as to why it’s so difficult to secure capacity or why it would be pushed out so far in the third quarter. Maybe you could provide a little more color I mean obviously I understand that the rails have gone burdened in the past investing there but it seems like somebody would be going to step in and kind of commit to some sort of take or pay arrangement or something like that?

Yeah and we have. I think the CN has given three slots out to people and we’re one of them. So, they will make commitments and they will make capacity available. I don’t mean to suggest there was nothing, but in Q1 they had as they commented they had a tremendous amount of grain business and a lot of frac sand business, they had a delay at Prince Rupert, they had a lot of intermodal business. And so, they just basically said we don’t have the capacity in Q1. We are trying to get capacity in Q2 from CP as well as CN so I think that that could open up and then definitely by Q3 we’re getting capacity. So, I think it will ramp up and if you look at over the next few years for the next three years, there is no new pipeline that’s going to come online. So, rail is a solution. So, I think just the railroads don’t necessarily move quickly, which we know we’ve been one so they are not fast, but they will respond and I don’t think it’s a permanent thing, I think it just is a confluence of events that they just said we don’t have the capacity right now and we want people not to just come in for a quarter and then leave.

Okay. So just and then really quickly so it indicating you expect EBITDA from Jefferson kind of towards the low end of the 25 to $40 million range. Is that primarily what’s driving that or is it something else. I mean help me understand that incremental move?

Yes, it was a delay of getting starting so we had the hurricane which shut down the terminal for six weeks and then we had construction delays resulting after that. So, it was a combination of the delays and then partly getting this rail capacity more towards the backend of the year is what’s driving it.

Thank you. And our next question comes from Devin Ryan with JMP Securities. Your line is now open.

Hey thanks good morning. Maybe just first one on aviation, just lobbying an update on how you’re thinking about you know the contribution from the engine overhaul, how that’s going. Any new thoughts on capacity there and then just how we should think about the kind of the timing of development and how that business is ramping?

Sure. That’s going very well, we’re one year into what is three year you know project and so but the first year has gone very well and we’ve achieved the milestone, it's an important milestone that we, that have given us a lot of confidence that the next two years are going to go well. So very, pleased with that and looking forward to the potential that but it's not an immediate, it's not going to produce immediate income but it does give us a tremendous strategic advantage and proprietary products in that space. As I mentioned last time we were also working on other ways to reduce the cost of those engine overhauls including working at a parts distributor for lowering the cost of our parts that go into the overhauls and then an ability to do module swaps with engines instead of putting a whole engine into the shop you can swap modules from one engine to the other and then create one good engine where you might have had two mediocre engines. So, we’ve got all those going in and those should start to contribute this year. So, I’m positive on how we position ourselves strategically to be able to take advantage of that CFM 567B and 5D market which is the biggest engine market in the world. So, all good.

Got it okay, good update. Thanks, and then just on Repauno I’m trying to think a little bit more about the long-term opportunity there in natural gas liquids, I appreciate the update on the county economics and building storage and the EBITDA contribution which I think should give a pretty good framework. But can you remind us kind of the total long-term capacity and then once the half ago there you know what the timeline will look like around building stores, maybe the first million barrels?

Sure, so you know the engineers today have done a number of caverns of similar nature and familiar with the geology have estimated that they think the total capacity we can build is between 4 and 6 million barrels of storage capacity underground. But we won’t have the final numbers until they’re finished with the quarrying samples that they starting with the quarrying samples and that should be done by the end of Q2 -- do it like in one month, so we’re reasonably confident based on what we know and we know that, that there is going to be significant capacity. And then as I said, we’re talking to off takers people that buy propane and butane and most of those are European or Middle East or African, could be Asian. But, there is a fair amount of capacity refining capacity and chemical plants being built that need propane and butane. So, the demand side looks pretty good and we are out engaging with those people now to see if we can sign up long-term off-takes. To build the first cavern is probably 18 months, so if we figured, -- if we got to go in June of this year, we would probably be, seems like everything is 20-20, that will be a big year for us. But, that’s kind of the timeline to get in service. The thing that was -- we could start interim service, you don’t have to wait for the cavern to deliver to be able to load propane and butane, we can actually do that now through our existing cavern and we could load directly on to ship. So unlike, the power plant, where you don’t get revenue until you turn it on, with this you could actually see a ramp up in revenue in beginning in 2019.

And then just last one here on Jefferson and the guidance update, that maybe I’ll try to ask a little bit differently. I know that timing can impact the contribution if the sliding scale based on delays and the real capacity as you highlighted. But based on that $25 million to $40 million range, I think the implication here is that the contributions are going to be more back half skewed off of that. Can you maybe give us any perspective of what that implies if were run rate heading out of the year and I think that’s probably the better way to think about it, because it seems like, the fact that you are still in this range to just at the run rate of the back half of that higher than previously implied or thought, and so just trying to make sure that’s kind of a reasonable thought and then any other detail you can provide on that would be helpful?

Yeah, I think that’s right. The run rate should be higher than we had originally expected by the end of this year, definitely the volumes as I mentioned, we have additional growth opportunities in every category, so we can increase the refined products meaningfully we can increase the crude and as I said, we’ll be to this new storage tanks that we’ll have, will have the ability to go directly to shift, so that’s a new market for us in 2019. So, I expect that the run rate number would be higher than it was previously.

Thank you. Our next question comes from Rob Salmon with Wolfe Research. Your line is now open.

Hey, good morning guys. I guess continuing on the Jefferson, could you give us an update with regard to the pipeline and the connection that you guys are looking to establish, what sort of throughput you think that can provide for Jefferson looking out and the timing that we should be thinking about this coming online.

So, we have a [indiscernible] trans Canada to connect to Market Links, so market link is got a tremendous class here to 40-inch pipe, so its 100s of 1,000s of barrels of day. It can supply us, what as much crude as we need. So, then the thing is what you need to build storage to handle that and so that’s where we are out in having conversations with both local refineries as well as sort of a new entry in that market is some international players have come and looking for storage on the Gulf. And the Gulf is a better location today than Cushing is because Cushing is in the middle of Oklahoma and you can’t get easily to water from there. So, with export opportunities increasing and U.S. is increasingly about to become the largest oil producer in the world and surpass Russia it’s a very attractive market for having storage. So, what we need is -- we have the pipeline and we can deliver the crude, now we need the person who says I'll contract for storage and that’s why we’re out discussing with a number of different parties for millions of barrels of commitment.

Okay. And then I would imagine from the revenue and EBITDA contribution it will be -- the activities around kind of the refining which is going to provide similar benefit to the storage from an EBITDA perspective.

Yeah.

Is that the way to think about it?

I’m not sure I understood the question.

I guess Joe, when we’re thinking about the see -- making money off of the storage activity that would be kind of the big driver of the pipeline, can you give us a sense that as that comes on what that EBITDA potential is?

Yes, I think we have indicated previously that roughly for every million barrels of storage there's about 10 million of annual EBITDA.

That’s helpful. And I guess switching gears a little bit here, it’s a Long Ridge we’ve been hearing kind of just the market has been very competitive from a long-term purchaser of power within that region. Can you give us a sense of when you’re expecting to kind of get better visibility on timing for those long-term contracts, do you need the long-term contract to offer data centers within the region or is that really dependent on having the power plant up and running, so kind of a two-part question there.

Yeah so, the market is always competitive for electricity but we’re out in the market now and engaged with people and we’re hearing good things in terms of -- we have probably the lowest cost gas, we have very competitive and low-cost infrastructure given that we already had transmission lines and it’s a flat spot on the river that doesn’t have to be graded. And then we have the most efficient new technology available with a 6400 e-grade [ph]. So, we can compete and they have money with anybody. And so, we’re out and we’re looking to sign up on long-term agreements roughly half of the capacity of the power plant and we expect to do that in the next couple of months. To offer to data centers, we don’t need to do anything, we’re out also talking to that market and we’re offering them the location and the long-term power agreement and we’re sort of thinking that roughly half of the capacity of the power plant we will allocate for the data centers, but the timing of that commitment will be probably after it will be later in the year than the other half.

And then from a capital investment perspective how should we think about the cadence of that $550 million that you discussed over a three-year period, is that readably gone over the three years, is it front end loaded back end loaded?

We’re still negotiating on that but I would say for the moment I think ratable is fine but we’re still in discussions on that so it could change ratable now that they had assumption.

Alright, appreciate the color and can you give us kind of -- with regard to the update from an EBITDA and FAD perspective, it sounds like you guys are very close to kind of fully covering the dividend. Should we think about based on the timing of the EBITDA coming online this would be a second quarter at the latest third quarter event.

Yeah, that’s fair.

Thank you. [Operator Instructions]. Our next question comes from Robert Dodd with Raymond James. Your line is now open.

Hi guys. Most of my questions have been answered already but I’ve got one kind of overall structure of the entity. Some of the publicly traded LPs have said that obviously contemplating conversion to a C-Corp tax reform at least one of them has already come to the conclusion that that’s actually the right idea. Obviously, you guys are on an LP and LC. So, has that been considered, is it being considered. Can you give us any color there?

We have looked at it, we’ve tried to figure out some of the nuances of this new tax bill which is still being analyzed. We have a lot of our income come from Aviation obviously and obviously all of that is, it’s a non-US entity and so at the moment we haven’t found a way to convert which wouldn’t have a meaningfully negative cash cost to us. So, at this point we don’t have a solution but we’ll keep monitoring it and I’ve learned in tax that you know sometimes unexpected things present themselves, so we understand that if we could do it efficiently we would. It's just trying to find the efficient solution.

Thank you. I’m not showing any further questions. At this time, I would like to turn the call back to Alan Andreini head of investors for any further remarks.

Thank you for participating in today’s conference call. We look forward to updating you after Q1.

Ladies and gentlemen thank you for participating in today’s conference. This concludes today’s program, you may all disconnect. Everyone have a great day.