Q1 2021 Fortress Transportation and Infrastructure Investors LLC Earnings Call

Excuse me. This is the operators and we stand by Q1, 2021 fortress transportation and infrastructure investors L. L. C earnings conference call will begin momentarily again. Please stand by your conference call will begin in a minute. Thank you.

[music].

Good day, and thank you for standing by and welcome to the Q1, 2021 and fortress transportation and infrastructure investors LLC earnings conference call at.

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, if anyone should require assistance during the conference. Please press Star and then zero on your Touchtone telephone and other.

During this conference call maybe recorded.

And I would like to turn the conference over to your host Mr. Alan and Dreams. Please go ahead Sir.

Thank you Patricia and I would like to welcome you to the fortress transportation and infrastructure first quarter 2021 earnings call. Joining me here today are Joe Adams, Our Chief Executive Officer, Scott, Christopher Our Chief Financial Officer, and Bo Willie CEO of our long Ridge energy terminal.

We have posted and the investor presentation, and our press release on our website, which we encourage you to download if you have not already done. So and also please note that this call is open to the public and 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 and the earnings supplement.

Before I turn the call over to Joe I would like to point out and 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.

GAAP financial measures and forward looking statements and to review the risk factors contained in our quarterly report filed with the SEC now.

Now I would like to turn the call over to Joe.

Thanks Alan.

<unk> I'm pleased to announce our 'twenty for its dividend as a public company and our 39th consecutive dividend since inception.

The dividend of 33 cents per share will be paid on may 25th based on a shareholder record date of may 14th.

Now, let's turn to the numbers.

The key metrics for us are adjusted EBITDA, and Fad or fad funds available for distribution.

And EBITDA for Q1, 2021 and was $47 2 million compared to Q4, 2020, or $46 2 million and Q1 and 2020 of $72 million.

Fad was $14 4 million and Q1, and 2021 versus $54 2 million and Q4, 2020, and 96 million and Q1 2020.

On a normalized basis, excluding sales proceeds and nonrecurring items Q1, 2021, Fad was $9 8 million compared to $35 7 million and Q4, 2020 and 67 4 million and Q1 2020.

During the first quarter of the $14 1 billion and Fad number was comprised of $66 million from our aviation leasing portfolio negative $3 8 million from our infrastructure businesses and negative $42 4 million from corporate and other.

Now turning first to aviation.

Q1, EBITDA for aviation of 61 million was a slight improvement from Q4 as we expected, but also as we expected we are seeing a meaningful uptick and activity in April and expect Q2 aviation EBITDA to exceed $80 million.

Example, we have signed 20, new leases for CFM 56 engines of which eight have already been delivered and the last few weeks.

75% of our fleet.

737, Mg and <unk> hundred 20 aircraft and engines, which are slowing mostly and domestic shorter haul markets, which are poised for strong rebound by Q3 of this year with many airlines planning flight schedules that are equal to or greater and Q3 of 2019.

And and 20% of our fleet is operating and the cargo markets, which continue to experience record high demand.

Our fleet is extremely well positioned for the recovery.

Our PMA initiative is progressing well with the second part is expected to be formally submitted to the FAA and July or August having had some minor tweaks to the final parts, which are now complete.

But the big development for US this quarter is the opening of our module store.

We believe for commercializing modules will disrupt traditional CFM 56 engine maintenance by enabling airlines operators owners and MRO is to save money and reduce turnaround time and.

Eliminate cost surprises and in many cases keep the engine on wing during the maintenance.

And we're well positioned and should be the leader and modules with our comprehensive suite of services.

<unk> PMA parts developed and with Chromalloy.

Our U S M or used serviceable material supply coming.

Coming out of our AAR partnership.

And the Lockheed Martin and Martin maintenance venture combined with our large inventory of 250, CFM 56 engines.

On Monday of this week, we formally launched the module store to the trade.

And invite everyone to take a tour and you can find the web site and a QR code link on page six of our investor presentation, which will be posted today.

And we've received a strong positive reaction from all industry participants and are convinced that this approach and change how major engine maintenance conducted for a meaningful segment of the market due to the substantial savings generated by maintaining our inventory of readily available modules.

And the potential financial impact to <unk> significant.

For the CFM 56 engine fleet today, there are roughly 2005 hundred aftermarket overhaul shop visits per annum and that's projected to grow to over 3000 by 2024.

<unk> 20 per cent for saying 500 of those shop visits only require work on one module.

Which makes it a perfect candidate for our module factory.

And if <unk> could capture 20% of that market for 100 module swaps per AD and we would expect to generate 50 million and annual EBITDA for FY, while saving and equal amount or more for the engine owner and operator.

And as more complete TMA product line becomes available and this number will only get bigger.

Now, let's turn to the infrastructure first on report O. After loading our first marine vessel and January through our state of the art NGL and natural gas liquids rail trans loading system. We have completed some facility operational enhancements, which will increase.

Flow rates from our existing cavern by over 40% and ultimately enable us to quickly change service between butane and propane and <unk>.

First to meet market demand.

In addition, we've now completed the loading of our second marine vessel and we have 30 additional vessel vessel scheduled over the coming months.

We have successfully negotiated firm contracts for NGL volume said, we're pato beginning in the second quarter this quarter and committing up to 90 per cent of the current capacity through the third quarter of 2021, we plan to have volume moving to international local and regional markets from a part of this year.

And then and straightening and the optimization capabilities associated with the strategic location of our facility.

We continue to discuss a long term strategic contracts with both producers and off takers, which will yield commercial justification for expansion of our facility through the construction of additional underground caverns.

We see.

Also increased interest and more discussions and renewable opportunities, including renewable fuels manufacturing and most notably potential customers for offloading staging and manufacturing wind farm components like.

At the moment and we have multiple conversations going with the leading wind farm developers off the east coast and the United States, and particularly in New Jersey, and New York.

But as mentioned previously reported is well positioned for these opportunities with heavy load roll on roll off dock capabilities and 200 available acres for development.

Yeah.

Turning now to long ridge, the long range power plant is nearing completion first fire of the gas turbine and is scheduled for for May and we will be fully operational by mid summer, which is significantly ahead of schedule relative to our planned November 2021 completion day, which was guaranteed by our EPC.

Contractor.

And importantly, starting next month long range will be generating cash flow from test operations.

By controlling our own natural gas and having the worlds most efficient plant.

Long range has one of the lowest power production costs in North America. This.

This provides many ways for us to create additional values and a good example of this is crypto mining we've.

We've seen a lot of interest from global crypto mining companies and as they search for sites that have the lowest cost.

Around 24 set and power and scale.

Several have identified long ridge and the best possible location to for their operations.

And as such we evaluated two different alternatives to approach this.

And increase EBITDA for the power plant.

The first way would be to lease land and cell tower to these miners at approximately 35 to $45 $40, a megawatt hour, which is a premium to our existing contracts of approximately $30 a megawatt hour.

The second approach would be to enter the mining business and.

And at current Bitcoin prices mining long ridge would be the equivalent of selling power for over $150 a megawatt hour after capital cost recovery and expenses.

Which is five times higher than our existing tower sales agreements.

This strategy could make a lot of sense and particular since our power plant is capable of generating more than 485 megawatts that and is currently rated for.

And the economics of using this extra capacity are extremely attractive.

If we were to utilize just 20 megawatts for crypto mining long Ridge EBITDA could increase from 120 million per annum to nearly 165 million per annum at current bitcoin prices.

So as such we are arranging for the first machines to be delivered this monday to our property.

And are negotiating for a larger order representing approximately two megawatts of power for and August 2021 startup.

We also continue to be excited about our hydrogen power plants at long Ridge, we are progressing on the design and engineering of the blending skid and.

And partnership with GE and remain on track to start blending hydrogen and by the end of this year.

This will make long ridge and <unk>.

First purpose built hydrogen and burning power plant and the United States and the first worldwide to blind and hydrogen and a G E H class gas turbine.

We're in discussions with numerous customers, who have expressed interest and the carbon free electricity and we will be able to provide.

Finally, the quarter was good for our Frac sand business, Despite continued English and industry wide slowdown and natural gas drilling, which translated over 210000 tons of frac sand and 33000 tons of load itself.

Turning now to Jefferson activity at the Jefferson Terminal remains robust near term product movements combined with long term project development continues to increase Jefferson's competitive positioning and the Houston and Beaumont.

Port Arthur terminal landscape.

While total terminal throughput and economics.

Turning to face headwinds and the short term Jefferson posted its fifth consecutive positive quarter with EBITDA of $2 8 million down from $4 2 million and Q4 and.

Lower quarter on quarter EBITDA can be attributed to challenge for crude by rail economics across North America, and lost throughput and refinery demand due to the ice storms and deep freeze and Texas in February.

And we look towards Q2, and the second half of 2020 one.

We're very optimistic about increased refinery demand and production increased oil production, which should drive terminal throughput higher and the next few months.

Combined with improved customer demand and a more stable economic picture globally, and and certainly domestically.

<unk> completed pipeline projects have strategically aligned Jefferson with long term top quartile and users.

Jefferson is becoming an essential logistical and extension of two of the largest refineries in North America and the long term strategy and vision continues to make excellent progress and providing increased joysticks optionality for customers and consistent and profitable business revenues for Jefferson.

As we described last quarter the pipeline project connecting the Jefferson terminal with Exxon and Beaumont refinery has been completed and there's been and service since January the gasoline and diesel pipelines accounts for two and six pipelines that go into the river connected and Jefferson with Exxon and we're already realizing that.

<unk>, 20% higher throughput volumes compared to the pre pipeline volumes, we expect refined product volumes to continue to steadily increase as a result of a more economic and ratable logistical solution.

Additionally project development work is well underway to put the additional for pipelines into service for other products and the near future.

Line fill and safety and start up procedures began in Q1 for the two other pipeline projects the pipeline to Motiva, which is owned by Saudi Aramco is now operational and the pay line Papa pipeline connecting Jefferson to Cushing, Oklahoma, We are projected will be operational and may.

And <unk>.

This crude optionality from both the inbound and outbound perspectives will expand the reach and successful crude oils available for Jefferson and our customers create enhanced blending options and then you can start to balancing out and crude flows in and out of the terminal via tight rail and marine.

And for the balance of the share remain and we remain in close contact with our customers and the U S Gulf Coast, Canada, and Mexico, and Utah and are getting closer and finalizing several large scale projects with our major customers.

So in conclusion as we look back over the last few months, if we were to Mark the end of the pandemic and the beginning of the recovery on the calendar. The end of Q1 feels like a pretty good guess.

Even still in Q1 and infrastructure, we completed the three pipeline projects at Jefferson and.

Natural gas loading export terminal and Parnell and are well on the way to commissioning the power plant at long Ridge.

And in aviation, we continue to improve the positioning of our fleet for the recovery and have added and excellent group of new airline customers to our network.

And very importantly, we have combined our CFM 56 products into an ecosystem that can reach and appeal to the entire CFM 56 user base through our brand New module factory.

So while feeling a great sense of relief for the travel and infrastructure worlds are growing again and.

I'm extremely excited about what other new things, we can do to make 2021 and 2022 truly exceptional for our employees our customers and our investors.

So with that I will turn the call back to Allen.

Yes.

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

Thank you and.

As a reminder, if you have.

Have a question at this time please press the Star and then the number one key on your Touchtone telephone.

For your question has been answered or you wish to remove yourself from the queue. Please press the pound and again thats far and wants to ask for question with box for a moment to compile the <unk> roster.

Your first question comes from the line of Josh Sullivan from Benchmark company.

Your line is open.

Hey, good morning, Joe and Scott.

Nice quarter here.

Good morning.

So it sounds like you guys do you guys have a lot of irons and the fire here, but but maybe if we could start with the Lockheed joint venture on the new module store and you mentioned a strong initial demand and our remarks can you just elaborate or maybe quantify what that initial response and looks like and he common thread among early adopters as far as your customer profile.

Bill or assets their registry and here.

Yes, and we have a lot of innovation week lead time to launch on Monday to sort of which the big Orlando and maintenance and repair conference started on Tuesday, So that was intentional.

And so as part of our marketing and initial marketing effort. We were with all of you know a lot of the right people to be in front of and a very good response from the charges hurt and it and the target group and its primarily going to be a three.

And three different.

Category and since it would be.

Aviation maintenance procurement folks, who buy and and manage the parts supply and and the engine.

Things that are bought from outside for their maintenance businesses and a module simplifies their life and a lot of ways. So it's a very positive response for.

From some very big Airlines, So Big Airlines, who you know and.

And some cases and serve their own maintenance shops, so illustrates.

And it illustrates the degree they're looking at cost savings as well as.

And capital efficiency, so that was positive.

But and and also small airlines, who don't have the resources. So that group is very.

Very intrigued and interested and is following up the second is a lot of maintenance shop. So if you don't have a big maintenance operation.

Injected and having the ability to buy and sell and exchange modules gives you a lot of flexibility for the big independent MRO shops. We also are very engaged with and then thirdly is and ultimately lessors, because lessors or managing maintenance reserves and maintenance expenses and.

And avoiding shop visit and since becoming a higher and higher priority. So the Orlando confidence primarily had the first two and not a lot of lessors there, but it was really more of a maintenance oriented conference and and at that conference and or during the first week, we got about 50 people to sign up and.

It is you know the mostly the airlines and the maintenance people and.

And signing up means you can get access to look at our inventory and today, you know and advance of this we rebuilt up a modular and share with you. We have 43 modules listed on the website you can click on a fan of core and they don't P. T and you can see what we have available and and get detailed.

Nickel inflammation and then you can also request.

A swap so if you guys and exchange that you want to do so if you haven't and L. P. T. For example that needs a shop visit and we were looking for replacing that with some one that doesn't it has hours and cycles available. You can you can specify what you'd like to exchanges and specify the timing of when you want to do it and you can also screen.

And scan our inventory to see it.

And requirements that you need or net by any of our available inventory.

And we intend to keep probably about that level of memory modules available you want to have enough inventories. So people can find what they want.

And it's a bit like having a store and you want to have probably 50 or so modules on the shelf.

So all in all it's off to a great start obviously to consummate a sale you can't you're not going to do that over the website and you're going to want to follow up with people and make sure that that's.

They're real and and.

And and what they and what we have meets their needs, but but it is a great tool and a great efficiency to get people using it and and thinking about and how they can reduce the downtime and and ultimately we're going to move.

More as well and I think there's a lot of enthusiasm about being able to do some maintenance and yet.

Engines on wing, so we have partnerships and we're talking about with other maintenance.

Maintenance shops that can allow us to provide that service and if you can avoid chicken and engine off for wing and that's a huge huge cost savings so.

So I think it was a great launch and.

We're very excited and customer bases and I'm very enthused and it's.

And is truly a unique offering and there's nobody that has done.

Done nobody has anything like this available including the OEM. So.

And there's never Gonna have PMA. So so we feel like we've got.

Other another sort of barrier to entry or another leg up on an.

And on the market.

And I got it.

It's all very helpful.

And then maybe just as a second question.

The demand youre seeing on the aviation side.

The step up you're pointing to here and into Q.

Place and strong sequential activity, what do you see and that gives you that confidence and and maybe what is your domestic versus international travel profile breakdown.

So we wouldn't.

And when you're talking about domestic and you're talking about U S or are you talking and net domestic markets around the world.

Domestic markets around the world.

So we're about as I mentioned that 70% 70.

75 per cent of our fleet. These 80, 320, Ceos and 737 and cheese, which are really domestic.

Airplanes, so 75 per cent and we've been consciously and targeting that market and and we're gonna that's likely to keep growing and the rest of our fleet and the cargo market. So it's really between those are and those are our primary focus and those are two of the best markets and aviation right now so so we're heavily.

And they are concentrated on domestic and which which we like.

And what we're seeing is.

And what we thought is there's there's still a fair amount of inventory and green time available out there that airlines can continue to use before and they do shop. So shop visits are being deferred.

Airlines are looking ahead, and so I'm looking for I'm going to fly My fleet are all out in Q3 of this year and maybe Q4 and Q1 next year because theres a lot of pent up and then they're going to run out of capacity fairly soon in terms of the engines available.

And airlines are and the terrorists and not good at planning so.

So there they're starting to so as I mentioned and we've put out a number of engines on lease and I think some of those some of those are two carriers that were coming out of restructuring and coming out of.

And <unk> bankruptcy and in some cases, who lead list and don't have a lot of options and then the next group is gonna be airlines that realize that pretty soon and they're going to run out of engines and what they're doing now is lining up.

And we are negotiating a lease agreements are negotiated and they're going through inventory and one availability and what they would like engines on their facility available so they're starting to get ready for the wind and they're going to need to lease engines and there are some rfps coming out with some airlines looking to expenses.

And why they want 10, or 15 engines and their bigger airlines are available. So so they're seeing it and and they're starting to plan and so that's kind of a second wave and.

And then the third wave is really when you use up all the green time and that that I think will be Q for Q1 of color.

Call It Q1 of 2022, where the.

People have to start doing shop visits again, and and and you know and good number and <unk>.

That is there's a fair amount of lead time, because if you want to get into a shop and you'd have to order parts you have to get a slot.

And so that's that takes you know advanced planning and that's I think where our module factory really fits and extremely well because if you only need to shop.

And if it ends and only needs work on the L. P. T. You don't want to put the entire engine and the shop and wait for the L. P T. The fixed so.

Doing a swap is really and.

Very very efficient.

And as I say, it's disruptive to the way it's done now because people don't do it that way and you think of everything is that's my engine. So don't you know don't give me a different you know module, but it's change.

Airlines themselves doing it and I think the rest of the industry is going to get there very quickly.

Got it and I'll get back in the queue appreciate the time.

Okay.

Your next question comes from the line nothing for Leandro below and yes from Compass point. Your line is open.

And a quick question for kind of going back to what you were mentioning last quarter on the aviation segment.

You had said you know roughly kind of the three different components from contribution from existing engines and then there was a contribution from new and new investments and then from the parts and maintenance JV and initiatives there.

Got to call for call it 450.

EBITDA for 'twenty, one and there was roughly call it $50 million to $60 million for infrastructure.

And 20, almost like you're kind of calling for and leaving out the corporate segment and I'm curious how those pieces still come together and how you are.

How are you thinking about that for 'twenty, one given kind of the earth.

Early results from here.

Yeah, well, we didn't really expect much out of Q1 and as I mentioned in the last call and and that has proved to be true because there's just no restrictions or you know we're heavily in place from Q1 as you know, but they are now opening up and everybody's.

And I'm planning for more flying so we're still.

Of the view that the 450 million for 2020, one is achievable and the components for roughly and I think it was 300.

$20 million from your existing portfolio.

80 million from new investments and 50 million from the three JV partners with partnerships with Chromalloy, Lockheed Martin and a yard and so.

So, it's obviously going to be heavily backend loaded so big big jump in Q3, and Q4, which which makes sense given and when I was just talking about so and we believe that that is that's still our view is for the year.

And then on an infrastructure also that I think the shift and news is very achievable.

We've got as I mentioned, we've got good initiatives now and to Ricardo with lots of activity around natural gas liquids and we're sold out for the summer and I think that's just going to build and the momentum and it's going to build there and then come up with new ways to make money on them.

And on the fact that we're now doing business with lots of different counterparties.

Long Ridge and it starts a fire and you know first fire of this month and for May and turns on and August So that'll start contributing and Jefferson you know very <unk>.

Very helpful about the volume is picking up as well as landing one or more big contracts here and the next our and the next couple of months.

That's great and then.

A little bit kind of to the comments you were making about potentially.

I'm sorry.

And center initiative at Longbridge.

And what are the most important and finances.

And usually power cost and I guess I have a couple of questions and recovers.

And what your cost per megawatt hour as at the power plants and then from there for kind of two follow ons and one was that you'd have to existing contracts.

For some of the supply agreements and I.

I think those.

You have the ability to cancel those because you've been talking about some of the data centers and they are involved canceling those and factors.

If it's possible to cancel or partially cancel any of those is the word.

The venture were to be successful and kind of a third burritos and I'm kind of curious if you got a few selected and any specific type of tenants you know pick my money and equipment because for a few different yep yep.

Providers out there and counselors abuse.

Maybe just like a specific mining equipment and mind.

Well I'll take the first and then I'll, let Doug talk about the equivalent for the.

In terms of the cost of power and then we've looked at a lot of these companies are starting up and converted and coal fired power plants and other older assets and are being repositioned and and we think we have by far the lowest cost and.

And it's and in several different categories for the and and we already vertically vertically integrated so years ago, we decided to go out and develop our own gas. So we're we're actually vertically integrated back to the gas and the ground and no one has that capability, which means.

We think our cost.

Power on the first 20 megawatts is about $12 a megawatt hour. So that is far lower than anything I've seen and I think far lower and reality than most people because a lot of people or avoid and there are ignoring costs that you know they just are convenient to ignore so I think.

We've got and <unk> 12, and and one of the reasons why the the first 20 megawatts. This is interesting to us and sort of got us thinking is that our power plant and it's going to be rated 485 megawatts.

By the manufacturer. So initially that's the most amount of power and you can sell under the capacity auction. So you can you can get paid for capacity.

And without ever using it and and.

And it's only the rate and amount we can get paid for it until there's a couple of years of operating data and you can't really upsize that 45, but we can actually produce a five to 505 megawatts.

So.

The first 20 megawatts is and.

Is the cheapest electricity and he knows it's just marginally only the only thing and we pay for the cost of fuel. So that's what got us thinking and gives US you know sort of the lowest cost of power that beyond that we have another was it 40 megawatts that we never contracted.

Yeah, we have about 457 contracted today and so 457 is under these long term contracts, which was like 94% and production and so we'd have another 40 megawatts or 30 megawatts.

We could use without terminating any of our existing contracts that the plan was just to sell that into the merchant market.

And then thirdly, if we wanted to go beyond that we have the right under our.

Long term offtake agreements to terminate those contracts under make whole provisions so think of it like and interest rate swap.

And if the market moves you just have to be able to replace the counterparty has to go out and the market and replace what they had with us with someone else and right now.

Because of the way the power market should move they actually would pay if we elected to terminate those contracts and under the make whole provisions and the counterparty would owe us money. So.

And quite an interesting dynamic and and it's a one way option, we have the right to terminate the counterparty does not have right to terminate.

So and restructured that way deliberately so that we could and I'll.

Find other.

Off takers, and then and then immediately replace those with higher and behind the meter users. So.

So really lots of I mean, we have a tremendous amount of flexibility to grow at very very attractive price and we have.

You know the most efficient chairman and the world of highest seat right as the as the 700 and trade auto too, which is where we're using so I don't think anybody in the world Scott that you know sort of firepower against and where we can so is because obviously the market has become more competitive and people are putting more resource towards.

And it's gonna be the lowest cost providers and it is going to win.

So that's where I think we have a and and we're we're more vertically integrated than anybody in the business and we know of.

So do you want to talk about the machines.

Yeah. So the machines that will start running Monday or the S. 19, pros and then for the next batch that we're looking at most likely S 19, J Pro which is the newest model and one of the most efficient and in terms of energy energy usage.

And there are 100, Tera hashed per second or 110 for the.

And on J REIT.

That's great.

I just had one very quick one and I'll jump right back in the queue after that.

Really appreciate all the help us I'd be curious kind of whats the other and power cost and just kind of.

We have identified the property from call. It 12 for me.

Hour for the kind of excess component I'd be curious kind of as you go further down the structure.

But the average if you book.

Kind of the core production capacity.

And might shake out.

Probably 16 and 17.

And yeah, I think order and magazine in 16, and 17 and now that would be represented for the entire.

Remaining capacity.

That's great and I really appreciate and.

All the time and answering my questions.

And Brad Thanks for all of these initiatives. Thank you.

And you have the line of piece that day.

And from DB Your line is open.

Yeah, Hey, thanks, good morning, guys.

Maybe if we could start on the aviation side and you mentioned, obviously the ramp up that you're expecting and the second quarter from what you did and the first quarter. If I look back over the last couple of years and obviously last year was a significant under earning here, but if I wanted to kind of get a better sense of what the portfolio looks like today and what the potential initiatives that you're working on look like.

In terms of our walk from where we were last year could you sort of help for build the pieces backups and we can get maybe more of a clean run rate and what aviation is capable of one and an adjusted EBITDA basis. Once some of these new initiatives are in place.

Yes, well I think.

What we've done is we've.

Moved more towards for the CFM 56 engine, which I think now is about 50% of our total.

Investment.

So now and that's probably up from maybe 30% prior to this journey.

And we have a couple of other deals and there we're still working on that and we think will add to that and grow that and then we've also increased and our cargo business. So I think that where you've seen the decrease has been and 767 passenger business, we had and some 75, seven and pasture and shows and.

And so those two have gone down and the CFM 56, and cargo has gone up.

And so that that's strategically I think we're we've been we decided you know really two years ago to start doing that and then accelerated it with the with the pandemic and.

And then on top of that.

Expresses and we want not only do we want to earn 25, EBITDA, 25% EBITDA Uninvested aviation capital and we.

Wanted to develop and revenue and EBITDA from other services that are not tied to owning assets.

Think of the and the chrome alloy Lockheed Martin and ER, which we say, we think we can earn and $50 million this year.

And that that number on the up or down is somewhat unlimited and and that and.

And I think the.

We talked for the last time and about how do we how do you accelerate that and you get airlines to basically let us and outsource and maintenance of their CFO and 56 fleet and I think that the module factory.

Is one of those moments, where you said, that's how we do it and that's exactly that's the mechanism and it isn't that complicated and it allows airlines.

Just sort of use that service on an AD hoc basis says they want and without going through some major RFP process that involves the OEM and 10. Other people. So you can deal with them solutions and it saves the maintenance department and a lot of money.

And it's very accessible easy to use allows them to be flexible and how to use PMA for example, and it's not you.

You know sort of in the face of anybody so.

It's it's the solution to what we were looking for and so I think that number's unbounded I really do.

Okay. Okay. That's helpful.

And then I guess you know me.

A question on Jefferson and so I'm kind of curious your take here. So obviously you know some some rail M&A news and.

It's been sort of building over the course of the last couple of weeks and particular last two weeks and so I was curious what your perspective is if you have one day, there's two potential competing carrier for the case. He has asked that you guys. Obviously get served like Acs at the facility you know and.

And as that business continues to sort of develop and you've gotten access to incremental refinery production.

If you have any take care and is there any sort of view on where you'd like to see that transaction go or do you think there is any impact at all on Jefferson and as a result, the per transaction any thoughts you have there would be helpful and I'm curious sort of how this plays out for you now.

Finical rail shipper.

Yes, we are.

A point of view and we've been engaged with both the both the Canadians are looking for support so I think.

It is an interesting dynamic and you know and never.

Well you know it changes too so as you think about the different temptation as options, but I think that it's going to work out better for us I think we've gotten.

Good dialogue and Tonight.

And how quickly and how they return their calls and things like that so.

It is.

We are focused on sort of developing a long term flow of.

Products from the.

And the Canadian market by rail and that.

And probably involves a D are you there's one that's being built it's about to be finished and.

And then there's a couple more that are being planned and so we're having good dialogue with both of them and ultimately think if they have a and things.

The Canadian carrier that has a three way all the way to Beaumont did that's good for us and good for the customers and also and might enable us to make sure that there is no.

Theres no way and we get cut out either and so you get most favored nations no matter what happens.

So I think we have ours, our thoughts together I think it's going to be good for us I think the dialogue around that.

And with the plans are much accelerated and much more open maybe than they were before.

And it's a multi party dialogue too because not only.

And we're talking to the Canadian railroads for we're talking to the Exxon and Motiva are impacted and also thinking about and so it's a.

It's fun and I think.

Yeah, I can imagine.

And that they're being fairly responses. It seems like an interesting opportunity for you guys potentially for you.

Yeah.

Net interest from all of this but oh.

And then we also Exxon has a big move we do a lot of we're doing like 30030, 5000 barrels a day and in Mexico for Exxon and.

And net.

Casey asked us for carrier, so that's going to be impacted.

So there's a lot of things going on but I do think it's ultimately that's usually good for the shippers.

Yeah. Okay. That's helpful. Thanks for the time appreciate it.

Thanks.

Yeah.

Next we have the lineup from sovereign.

And from Wolfe Research your line is open.

Hey, good morning, guys and thanks for taking the question I guess kind of another topical item has been the president and kind of infrastructure plants could you discuss and thoughts about potential government grants.

Help reduced appetite for capital outlays for book in terms of the magnitude and and timing just given how many project ready.

Investments you have across the entire portfolio.

Yes, so it's a that's another area of a lot of focus and interest because.

For instance, last week, we were talking about <unk>, and New Jersey, and I think there's there's for government grant programs that we're looking at right now.

Potentially we could apply for and could involve you know grant money.

So that's a good example, there is one and long ridge, which we already have and I think we could supplement that as well.

And yes, there's going to be a lot of I mean, as the plan and starts to take shape. There's obviously some key elements to a lot of it is you know.

Green focused so that's going to be something we were thinking that we've got a number of initiatives and new projects around that around ammonia and around hydrogen.

Around plastics recycling. So so yes, I think its I think it's great because you do.

You do have to have projects, there are semi ready and they're not all going to be shut.

Shovel ready, if you have something and semi ready and so much easier to get money, even if you're in the permitting phase and you have to do and you know and it's it's.

That's like for years so.

So so I think it's I think we're going to figure out there's going to be some there's going to be some good things, we're gonna be able to tap into.

Got it, but probably a little bit too early in terms of figuring out what that can mean from a.

Capital investment and avoidance or.

Or the timeline.

Yes, but I'm pretty sure we're going to get some I mean, I remember and rail America. We got I think like 300 million of government grant money over and over a seven year period and so it was a huge.

And and there are projects that come up that you know you never expect so it's.

It's going to have an impact there's really no trade ins and I always invested in and I think we're going in and it's gonna be beneficial.

That's helpful. And then I think if I think bigger picture about some of the proposed changes and intact as you know and including kind of capitalized capital gains and carried interest will that have any impact in terms of your bigger picture plans to to kind of unlock some value by by spraying.

Off kind of aviation and infrastructure or how the manager is compensated and.

Or even how you guys monetize assets more broadly across the portfolio.

I don't think so.

We started thinking about that obviously, there's very little of it was looked at yet in terms of specifics, it's mostly concepts, but so far.

Setting up the U S. C Corp is not you know.

Anything that it might be that instead of a 21% range you pay 28%, but everybody excuse me and the same boat and and if there's a minimum tax maybe you don't get to shelter as much income so, but it's still makes it it's still a better structure for us to get rid of K ones and that's something that.

We are you know we are looking at and it's on the it's on the target list of things to do and hopefully we'll be able to do something you know at the end of the by the end of this year, but but that's you know, we're working on and and I don't see any impediments.

Really appreciate the perspective.

Thanks.

Okay.

Next we have for line of Justin long from Stifel. Your line is open.

Thanks, Good morning.

So Joe you gave the guidance for the aviation business to do over $80 million of EBITDA and the second quarter, but could you talk a little bit more about what you're expecting for aviation EBITDA and the third and fourth quarter, just as we think about that exit rate this year and how that sets the stage for Tony.

'twenty two.

Sure well if you do the math you know, it's going to be over 100 million for each of Q3 and Q4. So that's it's pretty simple.

How much.

You know, we're thinking and obviously Q3 was.

And historically, it's been one of the biggest quarters and you know and that's where you can hide.

High utilization and you can you can get.

Everything's moving but I also think that this.

For this year I expect to be somewhat different and that.

You can't I mean people have a lot of trips that they come and take them for the last 15 months and you can't take 10 trips and a week. So I think there's gonna be a rollover and the seasonality I think and this year will probably be less and it has been historically and that people will be traveling and Q4 and Q1 to see you know their relatives or their customer.

Mers and their friends or or just to get out of you know wherever they won't they had been so.

I'll take that.

And the flying levels are going to and should be sustained and I think more so than they had been in the past. So so that's kind of the you know the rough guidance and we're expecting and no good fourth quarter as well.

Okay got it so <unk> and <unk> it sounds like maybe pretty similar and I know the other element and I was thinking about was just the parts and service business and some of the partnerships, you've announced and and how that could ramp, but it sounds like a pretty even split and the back half between the two quarters.

Yeah. So you know I think that some of the initiatives could you know, there's a little bit of a flywheel effect that you get bigger as you go and the and and you might do more part out and more trading and the fourth quarter than we have and third quarter. Because in Q3, you want to use everything you've got people will be.

No hoarding and you know and in Q4 will probably be more trading and our.

Opportunities.

But not all.

And I think it would be better than any.

Any other year, but but it's their.

And they're comparable I think.

Okay, Great and then just a bigger picture strategic question I know there have been discussions on prior calls about splitting up the company at some point any updated thoughts around the profitability of that materializing and the potential timing of that decision.

Yes, we have it is on the list of priorities things to do and I think we have a couple of other items and we need you know ahead of that but then I I believe it'll be and all.

Fairly and top of the list and hopefully we get something done by the end of the share that would be my personal goal not a not a stake and the ground yet, but it's a goal that I think is something we all agree we want to do it.

Got it thanks I appreciate the time.

Thanks.

Next we have the line of Robert Dodd from Raymond James Your line is open.

Hi, Hi, guys and.

On the outlook and then got setup and upon it.

You said I mean, basically you're sold out.

The third quarter can you give us any color on.

And.

And as congestion and other areas and shipping et cetera, et cetera, how is the competition for that.

And the Pan out and.

Oh, the for customers potential customers starting to try and talk to you about.

Longer term deals to kind of lock up either adult slots and storage stocks or anything like that longer term about the you know.

And as needed basis.

Yes, they are.

And quite a good commercial response and I think it gets to the well we always felt was that before you are in operation people are inherently skeptical and and and not willing to commit because they've seen too many projects that didn't get yeah.

And they didn't complete so so the big set for us and it was in January loading and at first vessel being in service and now.

And now we're basically we've got 30 ships were going to be very very busy for Q2, and Q3, which is seasonally a very and.

The strong market for propane and butane, but the but the number of PTH plants being built around the world and the volume of export of natural gas liquids continues to grow.

And we are.

Really the only other terminal to Marcus Hook on the East coast and the United States. So.

So I think the commercial response has been great.

And so now it's about how do we grow how do we expand our capacity because as you pointed out we will be our slots are dock will be occupied pretty much fully in second and third quarter.

So then the next.

Spansion is gonna be a doc two and additional underground storage and marine and we're in the process of getting both of those permanent.

So that's the and that's.

And that's the sequence I think once we have.

And this summer is over I think for our plan is to go to off takers and try to get multi year commitments from them by the end of this year for that additional capacity.

And they're not Astra and the other thing we're looking at and right now, we're primarily going to be rail served and so where else are and your other options for and connectivity, meaning types. So that would be another.

Big jump.

Jump up in terms of capacity and and efficiency.

Thank you Jay I appreciate I picked on what one one quick one on the aviation side and can you give us.

A full shop visit obviously.

So I mean, not just the booking time for the actual timing and shelf.

And what's the time differential between a full shop visit.

Module swaps, because obviously you can self people save people 50 million from a cost plus three months right.

The cost is the time versus say and and then and on wing module swap how fast does that apply and play out like two they've made a kind of thing.

Yes, well you cant you couldn't do a module swap on wing, but you can do certain repairs on wing and.

And then we're looking at.

And and doing more of them is and sort of very efficient. So there are there are.

And their ships and we're talking about now to do to provide that ongoing service and will give us really a more it just expands our portfolio of things and we can do to save their orange money in terms of a module swaps and this is a full shop and you were talking about the difference and time is probably between <unk>.

Six months for a full shop visit versus under 30 days for a module swaps. So you can you can go to if you can show and airline.

And we've done this $1 million of cost savings just from that day.

Time savings and so there's a huge amounts of money involved and and savings.

Savings and.

True you know people and figuring out how to use this service and we today have 43 modules and inventory. So it sounds like you're going to a store that's about to open and say do you have anything or can I preorder and so like.

We have it.

So the.

And the savings are going to be you know people are going to learn and experiment and you say well I can do that and and it's.

We think it's going to be quite a quite a big thing.

Thank you.

Yeah.

Next we have a question from the lineup.

From Bank of America. Your line is open.

Great and good morning, Joe Allen and Scott.

So I wanted to start on the aviation side.

Obviously last year thinking.

Thinking about acquiring aviation assets was it was kind of toxic and in some spaces and increasingly as the market improves.

And it seems like.

You know basically consensus that a day.

Demand for air travel is going to continue I'm wondering has that changed the availability of assets as you look to build the portfolio and do you think the pace of.

You know asset acquisitions, potentially slows because of that or how do you see that kind of playing out and how has the market evolved for pre aviation assets over the last couple of months.

It's a good question and the.

I mean typically.

Typically when you have these severe downturns I mean, the answer is we think there will be a very good market for our investors.

Investing in additional assets.

And and.

And particularly assets that are off lease because that is.

Something it's very tough for any you know anybody with a portfolio it doesn't want to have more assets off lease.

That's that's really where I think our primary opportunity will has arisen and will arise.

And and typically when you get a severe downturn at the bottom and everybody knows here and the worst angina and no one wants to sell and so so there are some great deals and we've picked up a few and we've bought some but generally the volume is not very significant because nobody's people are not that stupid and and they know this is.

And not a good time to sell.

But as you start as markets start to recover and prices and moved up and they are and you have I think a little bit. So if they were down 40% and they only down 30% and then I think you're starting to see a lot more volume and so I think we'll and we'll see a number of cleanup trades, where people are saying I've got 10, aircrafts and Australia and I just wanted to get rid of.

And.

And that is starting so I think we're gonna and you also still have airlines looking at you know if I'm going to.

He's out of my older assets and buy newer assets, then I'll do a sale leaseback. So I think that the market opportunity and it's gonna be good.

Cause of that it's not the rock bottom steels that we might have seen and you know.

2020, but it will be good prices, they've had a lot of upside and and I think it would be more volume.

So within that Joe any expectation on kind of what the portfolio looks like in terms of assets by the end of the year.

Well, we've historically.

Quickly, we've invested between three and 500 million and and.

So it's a year I would suspect we'll be in that range and potentially higher but that's you know more episodic and it's harder to project and maybe by the end of the share of people will be doing more of these cleanup yeah true.

And as I said, so I think that that's that's still good.

A good number to you know to plan with.

Okay, Great. That's really helpful. And then just turning to Jefferson and congratulations on completing pipeline construction with Motiva just.

You know obviously.

You know building a pipeline and implies a long term commitment I just wanted to get a better understanding of how youre thinking about structure.

Structuring those contracts were with Exxon and Motiva and how you guys are thinking about that long term commitment and maybe how and how youre kind of anticipating the short term benefits are balanced against kind of those.

The longer term outlook for the pipeline.

Yes for the goal is to get five to 10 year contracts and the first few deals. We did were shorter because we wanted to get for.

First of all the first deal we did with Exxon was a three year deal on refined products and then we built six pipelines and we didn't really have much of a commitment now we're talking about extending those terms you know as I said between five and 10 years and adding a lot of volume to it for contracts between five and 10 years.

And then G. Though we did the first deal we did on the storage and then they contracted for a million barrels of storage and the deal is structured so that if we.

If we never built the pipeline the term on the kind of on the storage was three years, but when we complete the pipeline those storage contracts changed from three years to five years, So and that's exactly what they wanted and they wanted to be built because that's more efficient for them and citizen and money. So.

That's the goal as you know five to 10 year contracts.

There's obviously, sometimes you'll do a shorter deal to get them to get in and get started and then and then look for growth, which usually happens and that's.

The beauty of this business is usually people go and they add things they don't take things away once your wired in and once you set up.

The other market that we're still you know and Canadian market has been and on and off market and it's sort of not ideal because you don't want to just be moving barrels when the arb is open. So the key to that I think is for the D. R. U D. R. U makes it a ratable flow and if people invest and hundreds of millions of dollars and.

And the D are you can only move by rail and so there I think you can get 10 year contracts and there is no. One that's been built and had a 10 year contract and when.

We think more will be built so.

Ideally I'd like to transform that Canadian and move into a 10 year fixed.

Fixed contract, which I think is doable and.

And I think for we're closer to that than ever before.

Got it all very exciting in terms of the prospect for Jefferson I think thanks for the time.

Jim.

Thanks.

Yeah.

Your next question comes from the line of Brandon <unk>.

And Steve from Barclays.

Your line is open.

Hey, good morning, and thanks for taking the question.

And I just want to come back to the 450.

Our guidance for aviation EBITDA. This year, because I think you know and the back half of the year would actually imply something closer to like 150 million run rate for <unk> and <unk>, we have our math out there and and maybe what are we missing.

No.

And it's obviously.

Yes, if we have we.

And we had 60 and Q1 and.

Let's call it more.

More than 80, and Q2 as you know you're close to $1 50, and get to $4 50, that's 300, and so you're going to you've got to come up for 300 and the back half for the year.

And that is correct.

And I guess is it utilization and the fleet or can you speak more to how you're going to get paid on this module.

No idea with Lockheed because we do understand for partnerships or where do you generate the revenue and EBITDA opportunity from that.

So every module swaps or exchange or sale, we're estimating and half a million or more and in EBITDA.

So we think that.

And that there's potential for that we have 43 modules and inventory right now and we expect it.

We would hope to turn those you know frequently so it is and some of the income obviously comes from that but and we also had the Cromwell and joint venture and we have the a and a part of our business as well so that the U S M and the AAR deal on the part out.

And it's been very well received and is actually fully operational now and we have torn down and I believe like seven engine. So it is and are very happy with it and there is large and there's a lot of demand for U S and so so really it's all of those things and it'll be increased flying.

Which generates a lot and where maintenance reserves from the portfolio.

B.

It would be.

Krummel I L D. A R it'll be the module factory and and it'll be that the part out business all all combined.

Okay. So still confident that the full year will be for 15, and it's not like an exit rate of 455.

No no.

Okay understood and then I guess just last one last one for me Joe.

Strategically infrastructure has obviously been the one that we've been waiting to get pretty solid contribution from over the years I was just wondering if you know.

The crypto currency opportunity, obviously, it could be very lucrative for you, but I think that would involve another capital outlay and and introduce volatility. So is that the right step for us, especially as you think about potentially separating the company and the future.

Well I do think when you think about.

That business the net.

The integration with low cost energy is it's very.

Tell him and so that's kind of what drove us to think about that is when you think about the highest and best use for electricity, it's $150 a megawatt hour today versus 30.

For industrial activities. So so it really is I don't know exactly where that will go but it felt like worth exploring and figuring it out so that we can and because we do have an asset we had so many people coming to us and they want to use our assets and they wanted to make all the money. So it's like well, it's not that hard.

Good day.

For buying machines and getting the business. So why don't we make the money and then and then C C.

See where that leads US you know whether that's a separate you know activity or a where it evolves or how it turns into it just felt like a good.

We have one of the best assets and the world for that activity right now and it happened the day, we got lucky that it's actually coming online.

In August with Bitcoin and $50000. So it was really it's a little opportunistic and that in that sense and how it evolves into infrastructure.

Infrastructure and how people think about it is TBD.

It's not that I can answer it's not true.

It's not that much of a capital outlay and paybacks are under two years.

So.

Yeah, I think the breakeven on you know getting.

Getting your money back and Bitcoin is like 20 accounts and so and you can stop the activity and have to keep doing it.

And some people say, Oh, it's really volatile volatilities and negative and it's like well I don't know if you could claim goes to 100000.

We will have all of our money back and in a couple of months and why is that bad.

I appreciate the response.

Thanks.

And again as a reminder, if you have any questions. Please press star then the number one.

And you touched on and California, and then that's far one. Your next question comes from Devin Ryan for from JMP Securities.

Your line is open.

Okay, great. Good morning, most questions have been asked but I wanted to ask one just about the dividend I think before the pandemic. There was a lot of talk about progressing and get a dividend.

For at least moving towards and increase and obviously the past year I think was a good reminder, around capital and potentially go over capitalization and the ability to be opportunistic as that you guys clearly have been and.

And so just maybe talk briefly about <unk>.

How you guys are thinking about the trajectory of the dividend just kind of taking that and consideration also.

The fact that there are so many compelling opportunity for deploy cash.

And I'll back into the business for growth right now so just.

Kind of thoughts have changed or evolved around that.

Yeah.

And it really changed obviously, we're looking to.

And to maintain a two to one coverage and.

Towards the back half of this year with the numbers, we're looking at and we would we would be greater than that so we would potentially that would put us in a position where we'd be looking for a dividend increase so we.

And we haven't changed our.

Philosophy on the dividend.

Okay great.

And then just one last follow up here on long Ridge.

Really interesting conversation crypto, especially kind of given your clean energy angle. So I think.

And it makes a lot of sense.

Do you have I guess, it's early but is the intention to hold.

And kind of bitcoin beyond kind of operating cost or have you guys kind of thought that through if youre comfortable you're holding on and the balance sheet or for you just want to sell it as you mine.

And if there's kind of a consideration there and then I'm assuming that with this kind of increased opportunity, there's probably pushes off the thoughts around selling the remaining stake and learn and rich ore.

And.

Separately, maybe doesn't make sense to do it all to the extent there's this per.

And if it kind of a newer opportunity for luck.

Maybe a little bit more flavor for that as well.

And there's a lot there.

And as you can imagine.

And our base case right now is to sell for the coins.

For instance, we mine as we mine and then but it obviously is something that we should think about in terms of you know.

<unk> shall hold and and we have but our base case plan is to sell as we as a reminder, and that's the way you looked at the model today, but obviously there's flexibility there.

In terms of whether it accelerates or not to the disposition and that's really a valuation issue I mean, if you look at some of the other public comps that don't stack up to I think as well as we do the valuations are standard.

So so I don't know whether it.

What it does to our timeline and on holding it really has to be you know it's hard to know.

Yeah, I understand a lot of moving parts, but.

Very interesting so I appreciate you taking my questions.

Thanks.

Your next question comes from the line of thought from the landscape from Stifel. Your line is open.

Great. Thank you very much I wanted to dig into the P&A business a little bit.

And.

And kind of ask about the <unk>.

If there's been any progress on acceptance of the part from the broader community.

And I guess, specifically, how many parts has been have been sold.

And how many have been put into your ends and so.

And so far and then how.

And how many engines have you repaired and that the Montreal facility and and.

And what percentage of that has been yours.

So I don't have actual specifics on every one of those questions, but we have.

And the Montreal facility everything that we've inducted as ours. So it's not for third parties and we're using that for our own.

Our own assets or our.

And there and I believe.

And like 30 engines and duct and something like that.

And get you an exact number on that but those are all our engines.

The PMA, we have ordered sets I think we under 10 sets for the vein so and.

And those.

I don't know if any of those have yet been installed and then we have and we receive from say a month ago and you know what.

We're planning the installation of those and are as we have and.

Outlook for the rest of the year in terms of.

Shop visits so I don't know that there are a couple of other airlines that have also ordered those.

Those parts from Chromalloy and.

And I don't have the exact sense as to where you and I know one of them and it's been installed but I don't know I don't know the status of all of those deliveries.

So far.

And what was the other.

No I think you've got most of it I guess just following up on that the Montreal facility, you said roughly 30 Directionally fine but.

Is it the intention for that is over time to have.

A third party and isn't that correct.

In addition to your own.

Well when you say third party I mean, we would be himself. So the inventory of modules and we have our all in Montreal and they're all 43 our engines. So those are.

So we're not managing shop visits for other people I think facility those are our engines that we own.

Okay. That's helpful.

And.

And then kind of switching gears, a little bit to the Jefferson.

Facility and.

With the pipeline completed and a little bit of progress potentially north and with the D. R U.

Do you have.

Like a base case long term profitability.

Uh huh.

Yes.

Outlook for that and then asset.

And with.

And with several hundred million dollars invested.

And I guess, what what do you look at it as like a.

Base, and and upside case for what those assets could realistically earn.

Well I think we've.

Indicated in the past, we believe based on the assets we have today.

And we could generate 150 million of EBITDA.

And in the future and then and this year, obviously, we projected a ramp and such and we would be exiting the year and Haiti.

So then it's a question of how and.

How do you layer and that incremental business and and when does that when does it kick in in 2022 years 2020 three if any.

And what's the ramp on that and we don't we haven't given a specific quarter by quarter estimate on that.

Okay.

The general numbers are fine and and one last question if I could.

Can you give us an update on capex needs for the company.

Outside of our additional engine purchases right that 170 million LOI, what capex is needed to kind of keep the aviation business operating and how does that compare for like how does this year kind of a weird year compare to a more normalized environment and then and what additional capex is needed at the other three infrastructure.

Projects.

Yeah. So.

So one way we've talked for the maintenance Capex and if you were to if you were to do the shop visits for every engine that we owe and when it's due to be done which is not something you necessarily have to do we estimate that to keep that fleet running permanently would be about 50 million per annum of investment and per year, So think of maintenance.

Next from the existing aviation assets is roughly 50.

The second part of it is capital expenditure programs, we had for long would you paulino and Jefferson and it really behind us so.

Other than new contracts that we would get them, we don't really have significant capex. It does it does and <unk>.

Vestments today, but.

But we're hoping we will have capex, that's not a bad thing. It's just we would only do it to expand and to grow at this point and obviously the biggest one would be it.

And we expanded upon our width with additional.

I don't know if say for instance, 3 million barrels of storage, which is what were you know and serve our target number of underground granite storage caverns.

That would be and another $300 million of capital, but we believe that we could generate 150 million and EBITDA from that so that's that's the biggest one that is out there remaining but it's not committed at this point.

And I guess just.

And on long ridge, and the Bitcoin and investment.

What's the Capex requirements.

For the various Ah.

Projects like that 20 million to 20 megawatt power how much do you need to put them in.

Mining equipment to.

To be done.

And about $70 million I think from the first 2 million and first two megawatts and represents a down and I think 630 machines and.

Thereabout, and 11 Downs and 12 films and today.

Elevated price so it's roughly about $7 million for this investment and we're making in August and it would be 10 times that if we wanted to go to $20 million.

And we also have a we have a 50 50 partner and long ridge shows and would expect that to be halved.

Sure Yeah that makes sense great. Thank you for other time really appreciate it.

Thanks.

And we have a question coming from the line of sub Sullivan from Wolfe Research. Your line is open.

So just to piggyback on the discussion in terms of Bitcoin can you give us a sense of what the sensitivity is to changing and bitcoin prices too.

And what kind of appetite annualized EBITDA would be.

And if youre thinking whether you want to talk about the two we're talking about for 'twenty. Just so we can get a sense of how that would impact our models, if we see prices gyrate.

Either upwards or downwards.

Yeah.

Yeah. So.

I can speak to that.

Yes, so just to pick up.

A sensitivity of what let's call it.

<unk> 10 per cent a year prior.

<unk> deep whether this is an increase or decrease.

It's about.

Call it.

And.

$12 million impact to EBITDA impact in either direction.

On the 20th 20 megawatts.

So I think Joe Joe touched on that.

Today's bitcoin prices, it's about a $45 million per year EBITDA increase of 20 megawatts.

And so if you if you do a big one price up or down it's call it $12 million a year of EBITDA impact.

Thanks, Scott and that that's.

Really helpful and I guess, the other kind of a real quick follow up that I had is with regard to the aviation expectations for the second quarter can you give us a sense of what you have built into the model from from maintenance revenue perspective, that's obviously been really depressed for the past couple of the past two quarters.

And as well as kind of the other revenue contributions for from the JV. Just so you know if we're seeing a better underlying demand environment. Just so we can kind of.

Better sensitize, our models for for either upside or downside there.

You had said and maintenance activity, where we're seeing a big uptick and maintenance and flying hours and April so call.

Call, It what probably 30, and 40% increase and maintenance revenue.

From Q1 to Q2.

And and that's just April which you know we don't know obviously, the rest of and for the quarter yet.

And then.

What was the second question.

I was just curious how much contribution from maintenance versus other revenue, but that that that kind of gives me and that's what the sensitivity there.

And that that corner, we do it for them.

Okay.

I really appreciate the time and follow up guys.

Yeah, it's probably.

Order of magnitude $10 million or so from.

From that and Q2.

[noise] up from negligible in Q1.

Yep.

And it makes sense. Thank you.

Yeah.

I am sure I am showing no further questions at this time I would like to turn it back to Mr. Alan.

For any further comments.

Thank you Patricia and thank you all for participating in today's conference call. We look forward to updating you after Q2.

Thanks.

Thanks.

And this concludes today's conference call and thank you all for joining you may now disconnect.

Yes.

Okay.

And.

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And then.

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And this year.

And then.

And.

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Yes.

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Okay.

[music] and.

Uh huh.

Yes.

And.