NextEra Energy Partners(NEP) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second-Quarter 2025 Performance Highlights XPLR Infrastructure reported solid second-quarter 2025 financial results, with net income attributable to XPLR Infrastructure of $79 million and adjusted EBITDA of $557 million, largely in line with the prior year. Free cash flow before growth (FCFBG) increased by 6% to $261 million, driven by lower net operating expenses and improved pricing Second-Quarter 2025 Key Financial Performance | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net Income Attributable to XPLR | $79M | $62M | | Adjusted EBITDA | $557M | $560M | | Free Cash Flow Before Growth (FCFBG) | $261M | $246M | - Adjusted EBITDA and FCFBG benefited from lower net operating expenses and improved pricing, partially offset by lower year-over-year wind resource and absence of interest income from Texas pipeline sale proceeds[2] - Completed approximately 740 megawatts of repowering projects to date, representing about 47% of the previously announced 1.6-gigawatt program[4][6] - Secured over $1 billion in project financing commitments year-to-date in 2025 to support the repowering program, with $338 million borrowed in June[4][6] Strategic Initiatives & Outlook The company signed a definitive agreement to sell the Meade pipeline investment for approximately $1,078 million, with proceeds intended to address project-level debt and convertible equity financing, generating over $100 million in net proceeds. XPLR Infrastructure reaffirmed its adjusted EBITDA expectations for 2025 and 2026, with a projected decline in 2026 primarily due to the Meade pipeline sale - Signed a definitive agreement to sell the Meade pipeline investment for approximately $1,078 million, expected to close by the end of Q3[3][6] - Anticipates using sales proceeds to address outstanding project-level debt and buyout related convertible equity portfolio financing, expecting over $100 million in net proceeds[3][5] Adjusted EBITDA and FCFBG Expectations | Metric | 2025 Expectation | 2026 Expectation | | :---------------- | :----------------- | :----------------- | | Adjusted EBITDA | $1.85B - $2.05B | $1.75B - $1.95B | | FCFBG | N/A | $600M - $700M | - The decline in 2026 adjusted EBITDA expectations is primarily due to the exclusion of contributions from the Meade pipeline investment[5] Company Overview About XPLR Infrastructure, LP XPLR Infrastructure, LP is a limited partnership focused on clean energy infrastructure with long-term, stable cash flows. The company aims to deliver long-term value to unitholders through disciplined capital allocation and is positioned for growth in the U.S. power sector, with a diversified portfolio including wind, solar, battery storage, and natural gas pipeline assets - XPLR Infrastructure, LP (NYSE: XIFR) is a limited partnership with ownership interests in a clean energy infrastructure portfolio generating long-term, stable cash flows[7] - Portfolio is diversified across generation technologies, including wind, solar, and battery storage projects in the U.S., and an investment in natural gas pipeline assets in Pennsylvania[7] Non-GAAP Financial Measures XPLR Infrastructure's management uses non-GAAP financial measures, Adjusted EBITDA and FCFBG, for internal financial planning, performance analysis, and external communication with analysts and investors. These measures are considered more meaningful for representing cash available for capital allocation, though quantitative reconciliation of forward-looking non-GAAP measures to GAAP net income is not provided due to inherent forecasting difficulties - Management uses Adjusted EBITDA and FCFBG internally for financial planning, performance analysis, and reporting to the board, and externally for communicating financial results and outlook[9] - These non-GAAP measures are believed to provide a more meaningful representation of cash available for capital allocation[9] - A quantitative reconciliation of forward-looking Adjusted EBITDA to GAAP net income is not provided due to the inherent difficulty in forecasting and quantifying certain items like unrealized gains/losses from derivative transactions[10] Financial Results Second-Quarter 2025 Financial Performance XPLR Infrastructure reported a net income attributable to XPLR Infrastructure of $79 million for Q2 2025, an increase from $62 million in Q2 2024. Adjusted EBITDA was $557 million, slightly down from $560 million year-over-year, while Free Cash Flow Before Growth (FCFBG) increased by 6% to $261 million Condensed Consolidated Statements of Income (Loss) - Key Figures (Three Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | | :------------------------------------------ | :-------------- | :-------------- | | Operating Revenues | $342 | $360 | | Operating Income (Loss) | $90 | $66 | | Net Income (Loss) | $36 | $58 | | Net Income (Loss) Attributable to XPLR | $79 | $62 | | Earnings (loss) per common unit – basic | $0.84 | $0.66 | Reconciliation of Net Income (Loss) to Adjusted EBITDA and FCFBG (Three Months Ended June 30) | Metric | 2025 (millions) | 2024 (millions) | | :------------------------- | :-------------- | :-------------- | | Net Income (Loss) | $36 | $58 | | Adjusted EBITDA | $557 | $560 | | Free Cash Flow Before Growth | $261 | $246 | - The increase in FCFBG was primarily driven by lower net operating expenses and improved pricing, partially offset by lower wind resource and the absence of interest income from the Texas pipeline sale[2] Financial Outlook XPLR Infrastructure reaffirms its adjusted EBITDA expectations for 2025 in the range of $1.85 billion to $2.05 billion. For calendar year 2026, the company expects adjusted EBITDA of $1.75 billion to $1.95 billion and FCFBG of $600 million to $700 million, with the 2026 adjusted EBITDA decline attributed to the planned sale of the Meade pipeline investment Adjusted EBITDA and FCFBG Expectations | Metric | 2025 Expectation | 2026 Expectation | | :---------------- | :----------------- | :----------------- | | Adjusted EBITDA | $1.85B - $2.05B | $1.75B - $1.95B | | FCFBG | N/A | $600M - $700M | - The anticipated decline in adjusted EBITDA for 2026 is primarily due to the exclusion of contributions from the Meade pipeline investment, which is expected to close by the end of the third quarter[5] - Proceeds from the Meade pipeline sale are intended to repay associated project-level indebtedness and purchase remaining outstanding Class B membership interests in XPLR Pipelines, with any excess for general business purposes[5] Strategic Developments Meade Pipeline Investment Sale XPLR Infrastructure has signed a definitive agreement to sell its Meade pipeline investment for approximately $1,078 million. This transaction is a key step in the company's strategic plan to strengthen its balance sheet and focus on high-quality assets. The sale is expected to close by the end of the third quarter, generating over $100 million in net proceeds after debt and equity obligations are met - Signed a definitive agreement to sell the Meade pipeline investment for a base purchase price of approximately $1,078 million[3][6] - The transaction is expected to close by the end of the third quarter[3][5] - Anticipates using sales proceeds to address outstanding project-level debt and buyout related convertible equity portfolio financing, expecting to generate net proceeds of over $100 million[3][5] Repowering Program & Financing The company is actively executing its repowering program, having completed approximately 740 megawatts of projects, which accounts for about 47% of the announced 1.6-gigawatt program. To support these initiatives, XPLR Infrastructure has secured over $1 billion in project financing commitments year-to-date in 2025, with $338 million already borrowed in June - Completed a cumulative total of approximately 740 megawatts of repowering projects, representing approximately 47% of the previously announced 1.6-gigawatt repowering program[4][6] - Secured over $1 billion in project financing commitments so far in 2025 to support the repowering program[4][6] - Approximately $338 million of the secured financing was borrowed in June[4] Cautionary Statements and Risk Factors This section outlines various forward-looking statements and a comprehensive list of risks and uncertainties that could materially affect XPLR Infrastructure's future operating results, financial condition, and business plans. These risks span operational, financial, regulatory, environmental, and competitive factors, including reliance on renewable energy project performance, development risks, market conditions, and relationships with affiliates - The news release contains 'forward-looking statements' regarding future operating results, adjusted EBITDA, FCFBG, asset sales, financing needs, and repowering plans[13] - Risks and uncertainties include, but are not limited to, performance of renewable energy projects (wind/solar conditions, market prices), operational risks (outages, damage), weather impacts, reliance on portfolio assets, project development and financing risks, cybersecurity threats, insurance availability, third-party infrastructure reliance, environmental regulations, land rights, litigation, customer/vendor credit risk, PPA renewals, government incentives, competition, regulatory decisions, access to capital, indebtedness, and relationships with NextEra Energy, Inc. (NEE) and its affiliates[13][14][15] - Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially due to these risks[13] Unaudited Financial Information Condensed Consolidated Statements of Income (Loss) This section presents the unaudited condensed consolidated statements of income (loss) for XPLR Infrastructure, LP, for the three and six months ended June 30, 2025, and 2024, detailing operating revenues, expenses, and net income (loss) attributable to XPLR | | | | Three Months Ended | | | | Six Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | June 30, | | | | June 30, | | | | | 2025 (millions) | | 2024 (millions) | | 2025 (millions) | | 2024 (millions) | | OPERATING REVENUES | $ | 342 | $ | 360 | $ | 624 | $ | 617 | | OPERATING EXPENSES | | | | | | | | | | Operations and maintenance | | 102 | | 139 | | 212 | | 261 | | Depreciation and amortization | | 141 | | 138 | | 277 | | 274 | | Goodwill impairment charge | | — | | — | | 253 | | — | | Taxes other than income taxes and other – net | | 18 | | 16 | | 37 | | 36 | | Total operating expenses – net | | 261 | | 293 | | 779 | | 571 | | GAINS (LOSSES) ON DISPOSAL OF BUSINESSES/ASSETS – NET | | 9 | | (1) | | 12 | | (1) | | OPERATING INCOME (LOSS) | | 90 | | 66 | | (143) | | 45 | | OTHER INCOME (DEDUCTIONS) | | | | | | | | | | Interest expense | | (131) | | (54) | | (290) | | (67) | | Equity in earnings of equity method investees | | 31 | | 48 | | 48 | | 78 | | Equity in earnings (losses) of non-economic ownership interests | | (3) | | 1 | | (3) | | 5 | | Other – net | | 8 | | 18 | | 10 | | 39 | | Total other income (deductions) – net | | (95) | | 13 | | (235) | | 55 | | INCOME (LOSS) BEFORE INCOME TAXES | | (5) | | 79 | | (378) | | 100 | | INCOME TAX EXPENSE (BENEFIT) | | (41) | | 21 | | (86) | | 8 | | NET INCOME (LOSS) | | 36 | | 58 | | (292) | | 92 | | NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 43 | | 4 | | 273 | | 40 | | NET INCOME (LOSS) ATTRIBUTABLE TO XPLR | $ | 79 | $ | 62 | $ | (19) | $ | 132 | | Earnings (loss) per common unit attributable to XPLR – basic | $ | 0.84 | $ | 0.66 | $ | (0.20) | $ | 1.41 | | (a) Earnings (loss) per common unit attributable to XPLR – assuming dilution | $ | 0.84 | $ | 0.66 | $ | (0.20) | $ | 1.41 | | Weighted-average number of common units outstanding – basic (millions) | | 94.0 | | 93.5 | | 93.8 | | 93.5 | | Weighted-average number of common units outstanding – assuming dilution (millions) | | 94.0 | | 93.5 | | 93.8 | | 93.5 | Reconciliation of Net Income (Loss) to Adjusted EBITDA and FCFBG This section provides a reconciliation of net income (loss), the most directly comparable GAAP measure, to the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow Before Growth (FCFBG) for the three and six months ended June 30, 2025, and 2024 | | | | Three Months Ended | | | Six Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | June 30, | | | June 30, | | | | | 2025 (millions) | | 2024 (millions) | | 2025 (millions) | 2024 (millions) | | Net income (loss) | $ | 36 | $ | 58 | $ | (292) $ | 92 | | Add back: | | | | | | | | | Depreciation and amortization | | 141 | | 138 | | 277 | 274 | | Interest expense | | 131 | | 54 | | 290 | 67 | | Income tax expense (benefit) | | (41) | | 21 | | (86) | 8 | | Goodwill impairment charge | | — | | — | | 253 | — | | Tax credits - gross | | 257 | | 279 | | 508 | 543 | | Amortization of intangible assets/liabilities – PPAs – net | | 21 | | 21 | | 41 | 41 | | Noncontrolling interests in Silver State, Star Moon Holdings, Emerald Breeze and Sunlight Renewables Holdings | | (26) | | (19) | | (41) | (25) | | Losses (gains) on disposal of businesses/assets – net | | (9) | | 1 | | (12) | 1 | | Equity in losses (earnings) of non-economic ownership interests | | 3 | | (1) | | 3 | (5) | | Depreciation and interest expense included within equity in earnings of equity method investees | | 7 | | 17 | | 16 | 31 | | (a) Other | | 37 | | (9) | | 70 | (5) | | Adjusted EBITDA | $ | 557 | $ | 560 | $ | 1,027 $ | 1,022 | | (b) Tax credits | | (240) | | (263) | | (415) | (451) | | Cash interest paid | | (20) | | (25) | | (91) | (80) | | Payments to Class B noncontrolling investors | | (17) | | (14) | | (38) | (33) | | (c) Payments to tax equity investors | | (15) | | (9) | | (23) | (16) | | Capital maintenance and environmental expenditures | | (3) | | (2) | | (5) | (4) | | Other - net | | (1) | | (1) | | 1 | 3 | | Free cash flow before growth | $ | 261 | $ | 246 | $ | 456 $ | 441 | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets for XPLR Infrastructure, LP, as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | | | | | PRELIMINARY | | --- | --- | --- | --- | --- | | | | June 30, 2025 (millions) | | December 31, 2024 (millions) | | ASSETS | | | | | | Current assets: | | | | | | Cash and cash equivalents | $ | 880 | $ | 283 | | Accounts receivable | | 148 | | 105 | | Other receivables | | 90 | | 86 | | Due from related parties | | 93 | | 148 | | Inventory | | 100 | | 108 | | Other | | 145 | | 130 | | Total current assets | | 1,456 | | 860 | | Other assets: | | | | | | Property, plant and equipment – net | | 14,871 | | 14,555 | | Intangible assets – PPAs – net | | 1,733 | | 1,817 | | Goodwill | | — | | 253 | | Investments in equity method investees | | 1,753 | | 1,784 | | Other | | 683 | | 1,023 | | Total other assets | | 19,040 | | 19,432 | | TOTAL ASSETS | $ | 20,496 | $ | 20,292 | | LIABILITIES AND EQUITY | | | | | | Current liabilities: | | | | | | Accounts payable and accrued expenses | $ | 60 | $ | 65 | | Due to related parties | | 598 | | 159 | | Current portion of long-term debt | | 1,026 | | 705 | | Accrued interest | | 88 | | 46 | | Accrued property taxes | | 30 | | 32 | | Other | | 93 | | 80 | | Total current liabilities | | 1,895 | | 1,087 | | Other liabilities and deferred credits: | | | | | | Long-term debt | | 5,608 | | 4,609 | | Asset retirement obligations | | 375 | | 366 | | Due to related parties | | 44 | | 43 | | Intangible liabilities – PPAs – net | | 1,077 | | 1,121 | | Other | | 226 | | 200 | | Total other liabilities and deferred credits | | 7,330 | | 6,339 | | TOTAL LIABILITIES | | 9,225 | | 7,426 | | COMMITMENTS AND CONTINGENCIES | | | | | | EQUITY | | | | | | Common units (94.0 and 93.5 million units issued and outstanding, respectively) | | 3,200 | | 3,221 | | Accumulated other comprehensive loss | | (6) | | (6) | | Noncontrolling interests | | 8,077 | | 9,651 | | TOTAL EQUITY | | 11,271 | | 12,866 | | TOTAL LIABILITIES AND EQUITY | $ | 20,496 | $ | 20,292 | Condensed Consolidated Statements of Cash Flows This section presents the unaudited condensed consolidated statements of cash flows for XPLR Infrastructure, LP, for the six months ended June 30, 2025, and 2024, categorizing cash flows from operating, investing, and financing activities | | | | PRELIMINARY | | | --- | --- | --- | --- | --- | | | | | Six Months Ended June 30, | | | | | 2025 (millions) | | 2024 (millions) | | CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | Net income (loss) | $ | (292) | $ | 92 | | Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | Depreciation and amortization | | 277 | | 274 | | Intangible amortization – PPAs | | 41 | | 41 | | Change in value of derivative contracts | | 140 | | (76) | | Deferred income taxes | | (82) | | 41 | | Equity in earnings of equity method investees, net of distributions received | | 31 | | 5 | | Equity in earnings (losses) of non-economic ownership interests, net of distributions received | | 15 | | (5) | | Losses (gains) on disposal of businesses/assets – net | | (12) | | 1 | | Goodwill impairment charge | | 253 | | — | | Other – net | | 9 | | 13 | | Changes in operating assets and liabilities: | | | | | | Current assets | | (111) | | (84) | | Noncurrent assets | | (8) | | (13) | | Current liabilities | | 42 | | 23 | | Noncurrent liabilities | | 19 | | (3) | | Net cash provided by operating activities | | 322 | | 309 | | CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | Capital expenditures and other investments | | (170) | | (133) | | Payments from related parties under CSCS agreement – net | | 111 | | 830 | | Distributions from non-economic ownership interests | | 309 | | — | | Reimbursements from related parties for capital expenditures | | — | | 49 | | Other – net | | 15 | | 2 | | Net cash provided by investing activities | | 265 | | 748 | | CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | Proceeds from issuance of common units – net | | 4 | | 3 | | Issuances of long-term debt, including premiums and discounts | | 2,092 | | 24 | | Retirements of long-term debt | | (740) | | (548) | | Debt issuance costs | | (35) | | (2) | | Partner contributions | | 5 | | 45 | | Partner distributions | | (351) | | (374) | | Payments to Class B noncontrolling interest investors | | (38) | | (33) | | Buyout of Class B noncontrolling interest investors | | (931) | | (187) | | Proceeds from differential membership investors | | 81 | | 75 | | Payments to differential membership investors | | (23) | | (31) | | Buyout of differential membership investors | | (48) | | — | | Other – net | | (1) | | (2) | | Net cash provided by (used in) financing activities | | 15 | | (1,030) | | NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | | 602 | | 27 | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF PERIOD | | 328 | | 294 | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH – END OF PERIOD | $ | 930 | $ | 321 |