XIFR

XPLR Infrastructure, LP - Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. XPLR Infrastructure, LP (XPLR) is a limited partnership with a partial ownership interest in clean energy infrastructure assets, including wind, solar, and battery storage projects. The company sold its natural gas pipeline investment in September 2025, which is now reported as discontinued operations. As of March 31, 2026, XPLR owned approximately 48.8% of XPLR OpCo, with NextEra Energy Equity Partners, LP (NEE Equity) holding the remaining 51.2% noncontrolling interest.

Key Financial Metrics

Note: Q1 2025 results included a $253 million non-cash goodwill impairment charge and a $21 million loss from discontinued operations.

Material Changes vs. Prior Period

• Profitability Improvement: XPLR reported a net income of $33 million attributable to common unitholders in Q1 2026, a significant turnaround from a net loss of $98 million in Q1 2025. This improvement is primarily due to the absence of the $253 million goodwill impairment charge recorded in the prior year.
• Operating Expenses: Total operating expenses decreased by $223 million year-over-year, driven by the non-recurring goodwill impairment in 2025. However, Operations and Maintenance (O&M) expenses increased by $24 million to $134 million, reflecting higher outside services and rent for component repairs.
• Interest Expense: Interest expense decreased by $33 million to $102 million. This reduction was driven by $89 million in favorable mark-to-market activity on interest rate swaps, partially offset by higher interest costs on increased debt levels.
• Cash Flow: Net cash used in operating activities was $5 million in Q1 2026 compared to $90 million provided in Q1 2025. The shift was driven by higher O&M and interest expenses and working capital timing.

Outlook, Risks, and Unusual Items

• Capital Expenditures & Investments: XPLR has committed approximately $315 million to co-invest in four joint ventures with NextEra Energy Resources (NEER) to develop battery storage projects, expected to be completed in 2027. Additionally, the company sold interconnection assets for approximately $44 million.
• Liquidity: The company maintains a liquidity position of approximately $2.2 billion, comprising cash, amounts due under credit support agreements, and a $1.25 billion revolving credit facility maturing in 2031. The At-The-Market (ATM) equity program expired in March 2026 but was renewed in April 2026 for up to $300 million.
• Legal Proceedings: XPLR is a defendant in a federal securities class action lawsuit filed in July 2025 (amended January 2026) alleging false statements regarding the business model and distributions. A related unitholder derivative action is also pending. The company is vigorously defending these claims.
• Risk Factors: Key risks include dependence on NextEra Energy affiliates for credit support and management services, exposure to weather conditions affecting renewable output, and potential changes in clean energy tax credit legislation.

Investor Verification Checklist

• Goodwill Impairment: Verify the absence of further impairment charges given the significant write-down in Q1 2025.
• Related Party Transactions: Review the extent of cash sweeps and credit support reliance on NextEra Energy (NEE) affiliates, as detailed in Note 9.
• Debt Covenants: Confirm continued compliance with leverage and interest coverage ratios under the $1.25 billion revolving credit facility and project-level financings.
• Legal Exposure: Monitor the status of the securities class action lawsuit and potential financial impact of any settlements or judgments.
• Capital Deployment: Track the execution of the $315 million battery storage co-investment and the timing of associated cash outflows.