To The Moon

$XPLR Infrastructure, LP(XIFR)$

Founded in 2014, XPLR Infrastructure, LP (a wholly owned indirect subsidiary of $NextEra(NEE)$ ) is a limited partnership that owns clean energy infrastructure assets, with a focus on contracted renewable energy projects, including wind, solar, and battery storage projects, which generate long-term, stable cash flows.

As of March 31, 2025, the average duration of contracted Power Purchase Agreements (PPAs) is 13 years. Within their asset portfolio, 73% have an estimated useful life of about 25 years.

They have roughly 10 GW of operational assets situated across 31 US states, comprising 8 GW of wind, 1.8 GW of solar, and 0.2 GW of storage. Additionally, 71% of their portfolio is concentrated in the West and South. They are the 3rd largest producer of wind and solar energy in the US.

• The company’s capital allocation strategy focuses on the following

• Simplify capital structure via buyout of Convertible Equity Portfolio Financing (CEPFs)

• Invest in its existing portfolios

• Clean energy assets

• Returns of capital via buybacks (although this is not happening at the moment)

Corporate Reorganization (effective May 22, 2025)

In the first quarter of 2025, another reorganization was announced. This shows that turbulent times persist in management, which is not ideal during such a delicate transition of their business model.

Resignations

• James M. May, Controller of the Company, resigned in connection with his appointment for a new position with NextEra Energy, Inc. (NEE).

• Rebecca Kujawa, Director of the Company, plans to retire from the Board of Directors.

New appointments

• William J. Gough was appointed Controller of the Company. 

• Michael H. Dunne appointed to the Board as an XPLR GP* Appointed Director.

*XPLR GP: The general partner of XPLR LP is a wholly owned indirect subsidiary of NextEra Energy, Inc. XPLR LP serves as the primary business entity responsible for owning and operating infrastructure assets. The general partner (GP) is the corporate entity that controls and manages the limited partnership (LP), making key decisions, appointing board members, and fulfilling other obligations outlined in the LP agreement.

William Gough served as Vice President, Financial Planning and Analysis of NEE since October 2024. He also served as Assistant Controller of NEE from August 2023 to January 2024 and Controller of NextEra Energy Transmission from August 2021 to August 2023.

Before joining NEE, Gough served National Grid US, an electricity, natural gas, and energy delivery company, as its Vice President, New York Financial Controller from December 2019 to April 2021, and as its Head of Corporate Accounting from July 2018 to November 2019. From September 2009 to June 2018, Gough held various positions with PricewaterhouseCoopers LLP, most recently as an audit service senior manager from July 2017 to June 2018.

Michael Dunne served as Treasurer of NEE and FPL and Assistant Secretary of NEE since January 2023. He served as Vice President, Finance of NEE from April 2022 to December 2022. He also served as Treasurer and Assistant Secretary of the Company from February 2023 to January 2025 and of XPLR GP from December 2022 to February 2025. Before joining NEE, Mr. Dunne served as Managing Director, Global Energy & Power Investment Banking for Bank of America from January 2012 to March 2022.

Class Action Lawsuit

• March 10, 2025: A group of investors filed a federal securities class action lawsuit against XPRL. They claimed that the company made false or misleading statements about its business model, the arrangements with the Class B members’ interests, and distributions (dividend payouts).

• March 13, 2025: The court dismissed the lawsuit without prejudice since it was filed as a “shotgun complaint”, which indicates the complaint was legally insufficient.

• March 14, 2025: The plaintiff filed a notice of voluntary dismissal, which was granted on March 17, 2025, and the case was dismissed without prejudice and closed.

Debt Refinance and Fund Growth

On the 25th of March 2025, XPLR issued $1.75 billion in senior unsecured (no collateral) notes, where $825 million is at 8.375% due 2031, and $925 million at 8.625% due 2033.

They will use the proceeds for the following:

• Repowering capital expenditure

• Repay outstanding debt (including convertible notes due in November 2025)

• Investments to improve and expand the existing portfolio

• Exercise buyout rights relating to noncontrolling class B members' interests

These notes are not registered with the SEC for public sale, so only qualified institutional buyers and certain non-US investors can buy them. This helps avoid SEC registration costs and can reach large institutional investors faster.

They initially announced $1.4 billion, but it was increased to $1.75 billion, indicating strong demand from institutional investors. However, the yields are significantly high, which suggests that investors perceive it as a higher-risk note.

Management Update

• Completed ~$930 million buyout of CEPF 1 and plan to refinance those assets with traditional project debt (secured loans backed by the cash flow of the projects). This should help free up cash and reduce the need to issue unsecured notes, which are costly to the company.

• Progressing plan to address CEPF 2 by year-end 2025.

• Repaid previously outstanding revolver balance of $330 million, which should reduce interest expense. Revolvers are designed to facilitate liquidity, helping to manage the timing of cash inflows/outflows, and they typically carry higher interest rates.

• Repurchased ~$182 million of 2025 convertible notes.

• Targeting ~$1.1 to $1.2 billion project-level financing in 2025 to support repowering capex

Finally, management was able to provide a summary of their CEPFs:

XPLR's CEPF Portfolio

Financials

Net income was heavily impacted by $253 million in goodwill impairment charges and $159 million in interest expense ($90 million of losses recorded in 2025).

Regarding the goodwill impairment, since the company’s stock (unit) price dropped so significantly, it triggered the impairment test. They found that the goodwill on the books was overstated and not justifiable, so it was written completely down.

Operating revenue and adjusted EBITDA growth demonstrate that the underlying business model continues to produce positive results, even with negative net income. The increase was primarily due to favorable wind resource (103% of long-term average wind speeds in 2025 compared to 97% in 2024) and higher solar generation, since there was a planned outage in 2024.

Cash Flows

• Operating cash flow increased due to goodwill impairment and changes in the value of derivatives (unrealized gains)

• Investing cash flow changes were due to higher capital expenditures (repowering program & equipment)

• Financing cash flow increased due to the recent issuance of long-term debt (senior unsecured notes)

Balance sheet

• Total assets increased due to higher cash and cash equivalents

• Liabilities increased due to higher long-term debt

Guidance tracker