XPLR Infrastructure LP

Previous wording

NEP is a growth-oriented limited partnership with a strategy that emphasizes acquiring, managing and owning contracted clean energy assets with stable long-term cash flows with a focus on renewable energy projects. NEP consolidates the results of NEP OpCo and its subsidiaries through its controlling interest in the general partner of NEP OpCo. At December 31, 2023, NEP owned an approximately 48.6% limited partner interest in NEP OpCo and NEE Equity owned a noncontrolling 51.4% limited partner interest in NEP OpCo. Through NEP OpCo, NEP owns, or has a partial ownership interest in, a portfolio of contracted renewable energy assets consisting of wind, solar and solar-plus-storage projects and a stand-alone battery storage project, as well as a pipeline investment. NEP's financial results are shown on a consolidated basis with financial results attributable to NEE Equity reflected in noncontrolling interests.

Current wording

XPLR is a limited partnership that, through its ownership in XPLR OpCo, has a partial ownership interest in clean energy infrastructure assets including wind, solar and battery storage projects and an investment in natural gas pipeline assets. XPLR consolidates the results of XPLR OpCo and its subsidiaries through its controlling interest in the general partner of XPLR OpCo. At December 31, 2024, XPLR owned an approximately 48.6% limited partner interest in XPLR OpCo and NEE Equity owned a noncontrolling 51.4% limited partner interest in XPLR OpCo. XPLR's financial results are shown on a consolidated basis with financial results attributable to NEE Equity reflected in noncontrolling interests.

Previous wording

During 2023, 2022 and 2021, NEP acquired interests in various projects as discussed in Note 3. In January 2023, NEP completed the sale of a 62 MW wind project located in North Dakota and in December 2023, NEP sold its Texas pipelines which has been presented as discontinued operations (see Note 2 – Disposal of Wind Project and – Assets Held for Sale and Discontinued Operations and Note 4). In 2022, NEP sold its ownership interests in a pipeline (see Note 2 – Disposal of Pipeline).

Current wording

During 2023 and 2022, XPLR acquired interests in various projects as discussed in Note 3. In January 2023, XPLR completed the sale of a 62 MW wind project located in North Dakota and in December 2023, XPLR sold its Texas pipelines which has been presented as discontinued operations (see Note 2 – Disposal of Wind Project and – Discontinued Operations and Note 4). In 2022, XPLR sold its ownership interests in a pipeline (see Note 2 – Disposal of Pipeline). In January 2025, XPLR announced a strategic repositioning, including suspension of the distribution to its common unitholders and a plan to sell its ownership interest in Meade in the second half of 2025 and the assets underlying XPLR Renewables III, LLC, formerly known as NEP Renewables III, LLC, in 2027.

Previous wording

Operating revenues primarily consist of income from the sale of energy under NEP's PPAs, partly offset by the net amortization of intangible assets – PPAs and intangible liabilities – PPAs (see Note 2 – Intangible Assets – PPAs and – Intangible Liabilities – PPAs). Operating revenues increased $109 million during the year ended December 31, 2023. The increase primarily reflects approximately $185 million related to the projects acquired in late 2022 and 2023 (see Note 3), partly offset by unfavorable wind resource in 2023.

Current wording

Operating revenues primarily consist of income from the sale of energy under XPLR's PPAs, partly offset by the net amortization of intangible assets – PPAs and intangible liabilities – PPAs (see Note 2 – Intangible Assets – PPAs and – Intangible Liabilities – PPAs). Wind and solar resource levels, weather conditions and the performance of XPLR's renewable energy portfolio represent significant factors that could affect XPLR's operating results because these variables impact energy sales. XPLR utilizes the wind production index to determine the impact of wind resource levels. The wind production index represents a measure of the actual wind speeds available for energy production for a stated period relative to long-term average wind speeds. XPLR compares the actual wind speeds observed at each wind facility applied to turbine-specific power curves to produce the estimated MWh production for a stated period to the estimated long-term average wind speeds at each wind facility applied to the same turbine-specific power curves to produce the long-term average MWh production which results in the current period wind production index to determine the impact of wind resource for the stated period. Additionally, any investments to improve and expand XPLR's existing portfolio, including repowering of renewable energy projects, or any investment opportunities in areas adjacent to its existing clean energy assets could impact future revenues.

Previous wording

O&M expenses include interconnection costs, labor expenses, equipment servicing costs, land payments, insurance, materials, supplies, shared services and administrative expenses attributable to NEP's projects, and costs and expenses under the MSA, ASAs and O&M agreements (see Note 15). O&M expenses also include the cost of maintaining and replacing certain parts for the projects in the portfolio to maintain, over the long term, operating income or operating capacity. O&M expenses decreased $7 million during the year ended December 31, 2023 primarily due to approximately $95 million of lower other corporate expenses primarily relating to the suspension of the IDR fee, partly offset by $61 million related to the projects acquired in late 2022 and 2023 and $24 million of higher operating costs. In May 2023, the MSA was amended to suspend the IDR fee to be paid by NEP in respect to each calendar quarter beginning with the IDR fee related to the period commencing on (and including) January 1, 2023 and expiring on (and including) December 31, 2026. See Item 5– Incentive Distribution Rights Fee.

Current wording

O&M expenses decreased $16 million during the year ended December 31, 2024 primarily due to approximately $61 million of lower other corporate expenses primarily relating to the suspension of the IDR fee and absence of costs related to the disposal of the Texas pipelines which occurred in 2023, partly offset by $31 million of higher operating costs and $14 million related to the renewable energy projects acquired in 2023. In May 2023, the MSA was amended to suspend the IDR fee to be paid by XPLR in respect to each calendar quarter beginning with the IDR fee related to the period commencing on (and including) January 1, 2023 and expiring on (and including) December 31, 2026. See Item 5 – Incentive Distribution Rights Fee.

Previous wording

O&M expenses related to the existing portfolio are expected to remain relatively stable from year to year. However, NEP's O&M expenses are likely to increase as NEP acquires new projects.

Current wording

O&M expenses related to the existing portfolio are expected to remain relatively stable from year to year. However, XPLR's O&M expenses would likely increase if it acquires new projects.

Previous wording

Depreciation and amortization expense reflects costs associated with depreciation and amortization of NEP's assets, based on depreciable asset lives and consistent depreciation methodologies. For certain of the renewable energy projects, CITCs are recorded as a reduction in property, plant and equipment – net on the consolidated balance sheets and amortized as a reduction to depreciation and amortization expense over the estimated life of the related property. Depreciation and amortization expense also includes a provision for wind and solar facility dismantlement, asset removal costs and accretion related to asset retirement obligations and the amortization of finite-lived intangible assets.

Current wording

Depreciation and amortization expense reflects costs associated with depreciation and amortization of XPLR's assets, based on depreciable asset lives and consistent depreciation methodologies. For certain of the renewable energy projects, CITCs are recorded as a reduction in property, plant and equipment – net on the consolidated balance sheets and amortized as a reduction to depreciation and amortization expense over the estimated life of the related property. Depreciation and amortization expense also includes a provision for wind and solar facility dismantlement, asset removal costs and accretion related to asset retirement obligations and the amortization of finite-lived intangible assets.

Previous wording

Depreciation and amortization expense increased $143 million during the year ended December 31, 2022 primarily due to depreciation related to projects acquired in the second half of 2021 and in 2022.

Current wording

Depreciation and amortization expense increased $29 million during the year ended December 31, 2024 primarily due to depreciation and amortization associated with the clean energy projects acquired or placed in service in 2023.

Previous wording

Taxes Other than Income Taxes and other – net increased $25 million for the year ended December 31, 2023 primarily due to impacts of acquisitions in late 2022 and in 2023 and the absence of a gain realized in 2022 relating to settlement of a payable relating to a CITC.

Current wording

Taxes other than income taxes and other – net increased $8 million during the year ended December 31, 2024 primarily due to the absence of property tax refunds.

Previous wording

Gains (Losses) on Disposal of Businesses/Assets – Net

Current wording

Gains on Disposal of Businesses/Assets – net

Previous wording

The $36 million net gains on disposal of businesses/assets recognized during the year ended December 31, 2022 primarily reflects the gain recorded for the sale of NEP's interests in a pipeline in Texas. See Note 2 – Disposal of Pipeline.

Current wording

The $13 million net gains on disposal of businesses/assets recognized during the year ended December 31, 2024 primarily reflects insurance recoveries on three permanently damaged wind turbines.

Previous wording

Interest expense primarily consists of interest under long-term debt agreements and mark-to-market gains and losses on interest rate contracts. Interest expense increased $1,242 million during the year ended December 31, 2023 primarily reflecting approximately $1,193 million of unfavorable mark-to-market activity ($176 million of losses recorded in 2023 compared to $1,017 million of gains recorded in 2022) and higher interest expense due to increased average debt outstanding. See Note 6 – Financial Statement Impact of Derivative Instruments and Note 13.

Current wording

Interest expense primarily consists of interest under long-term debt agreements and mark-to-market gains and losses on interest rate contracts. Interest expense decreased $224 million during the year ended December 31, 2024 primarily reflecting approximately $268 million of favorable mark-to-market activity ($146 million of gains recorded in 2024 compared to $122 million of losses recorded in 2023), partly offset by $30 million of higher interest expense due to higher interest rates on the average debt outstanding and $15 million relating to projects acquired in 2023. See Note 6 – Financial Statement Impact of Derivative Instruments and Note 13.

Previous wording

NEP recognizes in income its applicable ownership share of income taxes due to the disregarded tax status of substantially all of the projects under NEP OpCo. Net income or loss attributable to noncontrolling interests includes minimal income taxes.

Current wording

XPLR recognizes in income its applicable ownership share of income taxes due to the disregarded tax status of substantially all of the projects under XPLR OpCo. Net income or loss attributable to noncontrolling interests includes minimal income taxes.

Previous wording

For the year ended December 31, 2023, NEP recorded income tax benefit of $25 million on loss from continuing operations before income taxes of $257 million, resulting in an effective tax rate of approximately 10%. The income tax benefit is primarily comprised of federal income tax benefits of approximately $54 million at the federal statutory rate of 21% and $28 million of PTCs, partly offset by income tax expense of $54 million related to income tax attributable to noncontrolling interests. See Note 8.

Current wording

For the year ended December 31, 2023, XPLR recorded income tax benefit of $25 million on loss from continuing operations before income taxes of $257 million, resulting in an effective tax rate of approximately 10%. The tax benefit is primarily comprised of federal tax benefits of approximately $54 million at the U.S. federal statutory rate of 21% and $28 million of renewable energy tax credits, partly offset by tax expense of $54 million related to tax attributable to noncontrolling interests. See Note 8.

Previous wording

Income from discontinued operations reflects the gain recognized on the sale of the Texas pipelines of approximately $375 million ($329 million after tax) as well as the operations of the Texas pipelines prior to the sale in December 2023. See Note 4.

Current wording

Income from discontinued operations for the year ended December 31, 2023 reflects the gain recognized on the sale of the Texas pipelines of approximately $375 million ($329 million after tax) as well as the operations of the Texas pipelines prior to the sale in December 2023. See Note 4.

Previous wording

Net income attributable to noncontrolling interests primarily reflects the net income or loss attributable to NEE Equity's noncontrolling interest in NEP OpCo, a non-affiliated party's interest in one of the Texas pipelines, a non-affiliated party's interest in Star Moon Holdings, LLC, the loss allocated to differential membership interest investors, the income allocated to Class B noncontrolling membership interests and NEER's noncontrolling ownership interests in Silver State South Solar, LLC, Sunlight Renewables Holdings, LLC and Emerald Breeze Holdings, LLC. Net income attributable to noncontrolling interests decreased $626 million during the year ended December 31, 2023 primarily reflecting a lower net income allocation to NEE Equity's noncontrolling interest due to a decrease in net income as compared to 2022 and higher net losses allocated to differential membership interest investors relating to acquisitions in 2022 and 2023. See Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests.

Current wording

During the years ended December 31, 2024 and 2023, net loss (income) attributable to noncontrolling interests primarily reflects the net income or loss attributable to NEE Equity's noncontrolling interest in XPLR OpCo, a non-affiliated party's interest in Star Moon Holdings, LLC, the loss allocated to differential membership interest investors, the income allocated to Class B noncontrolling membership interests and NEER's noncontrolling ownership interests in Silver State South Solar, LLC, Sunlight Renewables Holdings, LLC and Emerald Breeze Holdings, LLC. During the year ended December 31, 2023, net income attributable to noncontrolling interests also reflects the net income or loss attributable to a non-affiliated party's interest in one of the Texas pipelines which was sold in December 2023 (see Note 4).

Previous wording

Net income attributable to noncontrolling interests increased $357 million during the year ended December 31, 2022 primarily reflecting a higher net income allocation to NEE Equity's noncontrolling interest due to an increase in net income as compared to 2021, partly offset by higher losses allocated to differential membership interest investors due to higher wind resource resulting in higher PTCs. See Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests.

Current wording

During the year ended December 31, 2024, the change in net loss (income) attributable to noncontrolling interests primarily reflects lower net income allocation of approximately $299 million to NEE Equity's noncontrolling interest in 2024 compared to 2023, higher net loss allocation of $69 million to differential membership interest investors resulting from higher renewable energy tax credits due to favorable wind resource, a higher net loss allocation of $20 million to differential membership interest investors resulting from the renewable energy projects acquired in 2023 and $25 million of lower net income allocation to Class B noncontrolling interest investors primarily due to buyouts in 2023. See Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests.

Previous wording

NEP’s ongoing operations use cash to fund O&M expenses, including related party fees discussed in Note 15, maintenance capital expenditures, debt service payments and related derivative obligations (see Note 13 and Note 6), distributions to common unitholders, and distributions to the holders of noncontrolling interests. NEP expects to satisfy these requirements primarily with cash on hand and cash generated from operations. In addition, as a growth-oriented limited partnership, NEP expects from time to time to make acquisitions (see Note 3), including in connection with the exercise of buyout rights (see Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests), and other investments. These acquisitions and investments are expected to be funded with borrowings under credit facilities or term loans, issuances of indebtedness, issuances of additional NEP common units, including under its ATM program, or capital raised pursuant to other financing structures, cash on hand and cash generated from operations and divestitures (see Note 4). NEP may also utilize non-voting common units (convertible into common units) to fund the payment of specified portions of the purchase price payable in connection with the exercise of certain buyout rights (see Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests). In addition, NEP expects to fund debt maturities through refinancing. NEP may, but does not expect to, issue common units to satisfy NEP's conversion obligation in excess of the aggregate principal amount of the convertible notes upon conversion (see Note 13).

Current wording

XPLR’s ongoing operations use cash to fund O&M expenses, including related party fees discussed in Note 15, maintenance capital expenditures, debt service payments and related derivative obligations (see Note 13 and Note 6) and distributions to the holders of noncontrolling interests. XPLR expects to satisfy these requirements primarily with cash on hand and cash generated from operations. In addition, XPLR expects to consider additional repowering opportunities at its existing projects and other investment opportunities, and to exercise buyout rights relating to noncontrolling Class B members' interests under certain limited liability company agreements to which XPLR and certain of its subsidiaries is a party (see Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests). The investment, development and buyout opportunities are expected to be funded with borrowings under credit facilities or term loans, issuances of indebtedness or capital raised pursuant to other financing structures, cash on hand and cash generated from operations and divestitures, and may be funded with issuances of additional XPLR common units, including under its ATM program. XPLR may also utilize non-voting common units (convertible into common units) to fund the payment of specified portions of the purchase price payable in connection with the exercise of certain buyout rights (see Note 2 – Noncontrolling Interests and Note 14 – Class B Noncontrolling Interests). In addition, XPLR expects to fund debt maturities through refinancing. XPLR may, but does not expect to, issue common units to satisfy XPLR's conversion obligation in excess of the aggregate principal amount of the convertible notes upon conversion (see Note 13).

Previous wording

These sources of funds are expected to be adequate to provide for NEP's short-term and long-term liquidity and capital needs, although its ability to make future acquisitions, fund repowering of existing projects, fund the purchase price payable in connection with the exercise of buyout rights, refinance debt maturities and maintain and increase its distributions to common unitholders will depend on its ability to access capital on acceptable terms.

Current wording

These sources of funds are expected to be adequate to provide for XPLR's short-term and long-term liquidity and capital needs, although its ability to fund repowering of existing projects, fund battery storage and other investment opportunities, fund the purchase price payable in connection with the exercise of buyout rights, refinance debt maturities and return capital to common unitholders will depend on its ability to access capital on acceptable terms.

Previous wording

As a normal part of its business, depending on market conditions, NEP expects from time to time to consider opportunities to repay, redeem, repurchase or refinance its indebtedness or equity arrangements. In addition, NEP expects from time to time to consider potential investments in new acquisitions and the repowering of existing projects. These events may cause NEP to seek additional debt or equity financing, which may not be available on acceptable terms or at all. If available, additional debt financing, including refinancing, could impose operating restrictions, additional cash payment obligations and additional covenants, including limitations on distributions to common unitholders.

Current wording

As a normal part of its business, depending on market conditions, XPLR expects from time to time to consider opportunities to repay, redeem, repurchase or refinance its indebtedness or equity arrangements. If available, additional debt financing, including refinancing, could impose operating restrictions, additional cash payment obligations and additional covenants, such as limitations on distributions to common unitholders.

Previous wording

NEP OpCo has agreed to allow NEER or one of its affiliates to withdraw funds received by NEP OpCo or its subsidiaries and to hold those funds in accounts of NEER or one of its affiliates to the extent the funds are not required to pay project costs or otherwise required to be maintained by NEP's subsidiaries, until the financing agreements permit distributions to be made, or, in the case of NEP OpCo, until such funds are required to make distributions or to pay expenses or other operating costs. NEP OpCo will have a claim for any funds that NEER fails to return:

Current wording

XPLR OpCo has agreed to allow NEER or one of its affiliates to withdraw funds received by XPLR OpCo or its subsidiaries and to hold those funds in accounts of NEER or one of its affiliates to the extent the funds are not required to pay project costs or otherwise required to be maintained by XPLR's subsidiaries, until the financing agreements permit distributions to be made, or, in the case of XPLR OpCo, until such funds are required to make distributions or to pay expenses or other operating costs. XPLR OpCo will have a claim for any funds that NEER fails to return:

Previous wording

• when its subsidiaries’ financings otherwise permit distributions to be made to NEP OpCo;

Current wording

• when its subsidiaries’ financings otherwise permit distributions to be made to XPLR OpCo;

Previous wording

• when funds are required to be returned to NEP OpCo; or

Current wording

• when funds are required to be returned to XPLR OpCo; or

Previous wording

• when otherwise demanded by NEP OpCo.

Current wording

• when otherwise demanded by XPLR OpCo.

Previous wording

In addition, NEER and certain of its affiliates may withdraw funds in connection with certain long-term debt agreements and hold those funds in accounts belonging to NEER or its affiliates and provide credit support in the amount of such withdrawn funds. If NEER fails to return withdrawn funds when required by NEP OpCo's subsidiaries’ financing agreements, the lenders will be entitled to draw on any credit support provided by NEER in the amount of such withdrawn funds.

Current wording

In addition, NEER and certain of its affiliates may withdraw funds in connection with certain long-term debt agreements and hold those funds in accounts belonging to NEER or its affiliates and provide credit support in the amount of such withdrawn funds. If NEER fails to return withdrawn funds when required by XPLR OpCo's subsidiaries’ financing agreements, the lenders will be entitled to draw on any credit support provided by NEER in the amount of such withdrawn funds.

Previous wording

If NEER or one of its affiliates realizes any earnings on the withdrawn funds prior to the return of such funds, it will be permitted to retain those earnings except as otherwise agreed upon with NEP OpCo.

Current wording

If NEER or one of its affiliates realizes any earnings on the withdrawn funds prior to the return of such funds, it will be permitted to retain those earnings, and will not pay interest on the withdrawn funds except as otherwise agreed upon with XPLR OpCo.

Previous wording

At December 31, 2023, NEP's liquidity position was approximately $4,232 million. The table below provides the components of NEP’s liquidity position:

Current wording

At December 31, 2024, XPLR's liquidity position was approximately $2,530 million. The table below provides the components of XPLR’s liquidity position:

Previous wording

(a) At December 31, 2023, approximately $50 million had a maturity date in 2025. In February 2024, the maturity date for substantially all of the NEP OpCo credit facility was extended until 2029.

Current wording

(a) At December 31, 2024, approximately $50 million had a maturity date in 2025 and an additional $90 million had a maturity date in 2028. In February 2025, $50 million of the available capacity matured which reduced the available balance to $2,450 million.

Previous wording

Management believes that NEP's liquidity position and cash flows from operations will be adequate to finance O&M expenses, maintenance capital expenditures, distributions to its unitholders and to the holders of noncontrolling interests and liquidity commitments. Management continues to regularly monitor NEP's financing needs consistent with prudent balance sheet management.

Current wording

Management believes that XPLR's liquidity position and cash flows from operations will be adequate to finance O&M expenses, maintenance capital expenditures, distributions to the holders of noncontrolling interests and liquidity commitments. Management continues to regularly monitor XPLR's financing needs consistent with prudent balance sheet management.

Previous wording

NEP OpCo and its direct subsidiary are parties to a $2,500 million revolving credit facility (NEP OpCo credit facility) maturing in February 2029. During 2023, $1,040 million was drawn under the NEP OpCo credit facility and this same amount was repaid. At December 31, 2023, no amounts were outstanding under the NEP OpCo credit facility. For a discussion of the NEP OpCo credit facility, see Note 13.

Current wording

As of February 21, 2025, XPLR OpCo and its direct subsidiary are parties to a $2,450 million revolving credit facility (XPLR OpCo credit facility) substantially all of which matures in February 2029. During 2024, $330 million was drawn under the XPLR OpCo credit facility and at December 31, 2024 this same amount was outstanding. In order to borrow or to have letters of credit issued under the XPLR OpCo credit facility as well as to avoid default and related acceleration provisions, XPLR OpCo and its direct subsidiary are required to, among other things, be in compliance with financial covenants of a maximum leverage ratio and a minimum interest coverage ratio, as defined in the XPLR OpCo credit facility. At December 31, 2024, XPLR and its direct subsidiary were in compliance with these required ratios. Under the XPLR OpCo credit facility, XPLR OpCo's ability to pay cash distributions is subject to certain other restrictions. For a discussion of the XPLR OpCo credit facility, see Note 13.

Previous wording

During 2023, NEP OpCo issued $750 million in aggregate principal amount of 7.25% senior unsecured notes due in 2029 and, in connection with projects acquired, an indirect subsidiary of NEP borrowed approximately $330 million under a senior secured limited-recourse variable rate term loan facility maturing in 2028. Also during 2023, an indirect subsidiary of NEP borrowed approximately $237 million under a revolving credit facility and in December 2023, as part of the sale of the Texas pipelines, $437 million outstanding under the credit agreement was paid off which included a $200 million term loan. See Note 13

Current wording

During 2023, XPLR OpCo issued $750 million in aggregate principal amount of 7.25% senior unsecured notes due in 2029 and, in connection with projects acquired, an indirect subsidiary of XPLR borrowed approximately $330 million under a senior secured limited-recourse variable rate term loan facility maturing in 2028. Also during 2023, an indirect subsidiary of XPLR borrowed approximately $237 million under a revolving credit facility and in December 2023, as part of the sale of the Texas pipelines, $437 million outstanding under the credit agreement was paid off which included a $200 million term loan. See Note 13.

Previous wording

During 2022, NEP issued $500 million in aggregate principal amount of 2.50% convertible senior notes due in 2026. See Note 13.

Current wording

During 2022, XPLR issued $500 million in aggregate principal amount of 2.50% convertible senior notes due in 2026. See Note 13.

Previous wording

NEP OpCo and certain indirect subsidiaries are subject to financings that contain financial covenants and distribution tests, including debt service coverage ratios. In general, these financings contain covenants customary for these types of financings, including limitations on investments and restricted payments. Certain of NEP's financings provide for interest payable at a fixed interest rate. However, certain of NEP's financings accrue interest at variable rates based on an underlying index plus a margin. Interest rate contracts were entered into for certain of these financings to hedge against interest rate movements with respect to interest payments on the related borrowings. In addition, under the project-level financing structures, each project or group of projects will be permitted to pay distributions out of available cash so long as certain conditions are satisfied, including that reserves are funded with cash or credit support, no default or event of default under the applicable financing has occurred and is continuing at the time of such distribution or would result therefrom, and each project or group of projects is otherwise in compliance with the related covenants. For substantially all of the project-level financing structures, minimum debt service coverage ratios must be satisfied in order to make a distribution. For one project-level financing, the project must maintain a leverage ratio and an interest coverage ratio in order to make a distribution. At December 31, 2023, NEP's subsidiaries were in compliance with all financial debt covenants under their financings.

Current wording

XPLR OpCo and certain indirect subsidiaries are also subject to financings that contain financial covenants and distribution tests, including debt service coverage ratios. In general, these financings contain covenants customary for these types of financings, including limitations on investments and restricted payments. Certain of XPLR's financings provide for interest payable at a fixed interest rate. However, certain of XPLR's financings accrue interest at variable rates based on an underlying index plus a margin. Interest rate contracts were entered into for certain of these financings to hedge against interest rate movements with respect to interest payments on the related borrowings. In addition, under the project-level financing structures, each project or group of projects will be permitted to pay distributions out of available cash so long as certain conditions are satisfied, including that reserves are funded with cash or credit support, no default or event of default under the applicable financing has occurred and is continuing at the time of such distribution or would result therefrom, and each project or group of projects is otherwise in compliance with the related covenants. For substantially all of the project-level financing structures, minimum debt service coverage ratios must be satisfied in order to make a distribution. For one project-level financing, the project must maintain a leverage ratio and an interest coverage ratio in order to make a distribution. At December 31, 2024, XPLR and its subsidiaries were in compliance with all financial debt covenants under their financings.

Previous wording

Certain NEP OpCo subsidiaries have issued and sold noncontrolling Class B membership interests in their subsidiaries. NEP has buyout rights, subject to certain limitations and/or extensions, under which NEP has the right to pay a portion of the buyout price with respect to the noncontrolling Class B membership interests in NEP non-voting common units or NEP common units, as specified in the related limited liability company agreement. The noncontrolling Class B investors receive a specified allocation of the related subsidiaries' distributable cash, which would increase if certain minimum buyout rights are not exercised prior to specified deadlines. While NEP has the right to exercise the buyout right to purchase the noncontrolling Class B membership interests during a specified period of time as set forth in the related limited liability company agreement and may exercise the buyout right by paying cash, NEP may exercise, or begin to exercise if exercisable only in part, the buyout right on or at the beginning of the buyout period, and the buyout price may consist of the maximum percentage of NEP non-voting common units or NEP common units, as specified in the related limited liability company agreement. See Note 14 – Class B Noncontrolling Interests.

Current wording

Certain XPLR OpCo subsidiaries have issued and sold noncontrolling Class B membership interests in their subsidiaries. XPLR has buyout rights, subject to certain limitations and/or extensions, under which XPLR has the right to pay a portion of the buyout price with respect to the noncontrolling Class B membership interests in XPLR non-voting common units or XPLR common units, as specified in the related limited liability company agreement. The noncontrolling Class B investors receive a specified allocation of the related subsidiaries' distributable cash, which would increase if certain minimum buyout rights are not exercised prior to specified deadlines. While XPLR has the right to exercise the buyout right to purchase the noncontrolling Class B membership interests during a specified period of time as set forth in the related limited liability company agreement and may exercise the buyout right by paying cash, XPLR may exercise, or begin to exercise if exercisable only in part, the buyout right on or at the beginning of the buyout period, and the buyout price may consist of the maximum percentage of XPLR non-voting common units or XPLR common units, as specified in the related limited liability company agreement. See Note 14 – Class B Noncontrolling Interests.

Previous wording

In 2023, NEP paid aggregate consideration of approximately $792 million in cash for the buyout of the Class B noncontrolling membership interests in South Texas Midstream, LLC and $180 million in cash for the buyout of 15% of the Class B noncontrolling membership interests in NEP Renewables II, LLC. In 2021, NEP paid aggregate consideration of approximately $885 million, consisting of approximately 7.3 million NEP common units and $265 million in cash, for the buyout of the Class B noncontrolling membership interests in NEP Renewables, LLC. See Note 14 – Class B Noncontrolling Interests.

Current wording

In 2024, XPLR paid aggregate consideration of approximately $187 million in cash for the buyout of 15% of the originally issued Class B noncontrolling membership interests in XPLR Renewables II, LLC, formerly known as NEP Renewables II, LLC, and $67 million in cash for the buyout of 25% of the originally issued Class B noncontrolling membership interests in XPLR Infrastructure Pipelines, LLC, formerly known as NextEra Energy Partners Pipelines, LLC. In 2023, XPLR paid aggregate consideration of approximately $792 million in cash for the buyout of all of the Class B noncontrolling membership interests in South Texas Midstream, LLC and $180 million in cash for the buyout of 15% of the originally issued Class B noncontrolling membership interests in XPLR Renewables II, LLC. See Note 14 – Class B Noncontrolling Interests.

Previous wording

NEP has an at-the-market equity issuance program (ATM program), which was renewed in 2023, pursuant to which NEP may issue, from time to time, up to $500 million of its common units. During 2023, 2022 and 2021, NEP issued approximately 5.1 million common units, 1.8 million common units and 0.7 million common units under the ATM program for gross proceeds of approximately $316 million, $145 million and $50 million, respectively. As of December 31, 2023, NEP may issue up to approximately $337 million in additional common units under the ATM program. See Note 14 – ATM Program.

Current wording

XPLR has an at-the-market equity issuance program (ATM program), which was renewed in 2023, pursuant to which XPLR may issue, from time to time, up to $500 million of its common units. During 2024, XPLR did not issue any common units under the ATM program. During 2023 and 2022, XPLR issued approximately 5.1 million common units and 1.8 million common units under the ATM program for gross proceeds of approximately $316 million and $145 million, respectively. As of December 31, 2024, XPLR may issue up to approximately $337 million in additional common units under the ATM program. See Note 14 – ATM Program.

Previous wording

During 2023 and 2022, NEP issued approximately 1.7 million NEP common units and 0.8 million NEP common units, respectively, upon NEE Equity's exchange of NEP OpCo common units on a one-for-one basis.

Current wording

During 2023 and 2022, XPLR issued approximately 1.7 million XPLR common units and 0.8 million XPLR common units, respectively, upon NEE Equity's exchange of XPLR OpCo common units on a one-for-one basis.

Previous wording

In July 2021, NEP filed a shelf registration statement with the SEC, which became effective upon filing, for an unspecified amount of securities. The amount of securities issuable by NEP is established from time to time by the board. Securities that may be issued under the registration statement include common units, preferred units, warrants, rights, debt securities, equity purchase contracts and equity purchase units.

Current wording

In July 2024, XPLR filed a shelf registration statement with the SEC for an unspecified amount of securities, which became effective upon filing. The amount of securities issuable by XPLR is established from time to time by the board. Securities that may be issued under the registration statement include common units, preferred units, warrants, rights, debt securities, equity purchase contracts and equity purchase units.

Previous wording

Annual capital spending plans are developed based on projected requirements for the projects. Capital expenditures primarily represent the estimated cost of capital improvements, including construction expenditures that are expected to increase NEP OpCo’s operating income or operating capacity over the long term. Capital expenditures for projects that have already commenced commercial operations are generally not significant because most expenditures relate to repairs and maintenance and are expensed when incurred. For the years ended December 31, 2023 and 2022, NEP had capital expenditures, excluding the purchase prices of acquired projects, of approximately $1,269 million and $1,351 million, respectively. The 2023 capital expenditures primarily relate to the assets acquired from NEER in December 2022 which were acquired under construction or recently placed in service, and the 2022 capital expenditures primarily relate to the three facilities acquired in December 2021 from NEER that were under construction (see Note 3). Costs of approximately $1,063 million and $1,161 million were reimbursed by NEER in 2023 and 2022, respectively. In the first quarter of 2022, the three facilities acquired from NEER in December 2021 were placed in service and in the third quarter of 2023, the under construction facilities acquired from NEER in December 2022 were placed in service.

Current wording

Annual capital spending plans are developed based on projected requirements for the projects. Capital expenditures primarily represent the estimated cost of capital improvements, including development and construction expenditures that are expected to increase XPLR OpCo’s operating income or operating capacity over the long term. Capital expenditures for projects that have already commenced commercial operations are generally not significant because most expenditures relate to repairs and maintenance and are expensed when incurred. For the years ended December 31, 2024 and 2023, XPLR had capital expenditures, excluding the purchase prices of acquired projects, of approximately $241 million and $1,269 million, respectively. The 2024 capital expenditures primarily relate to wind turbine repowering. The 2023 capital expenditures primarily relate to the assets acquired from NEER in December 2022 which were acquired under construction or had recently been placed in service (see Note 3). Such expenditures were reimbursed by NEER as contemplated in the acquisition. Estimates of planned capital expenditures, including those relating to expected repowering of existing projects, are subject to continuing review and adjustments and actual capital expenditures may vary significantly from these estimates.

Previous wording

NEP's partnership agreement requires it to distribute available cash quarterly. Generally, available cash is all cash on hand at the date of determination relating to that quarter (including any expected distributions from NEP OpCo), less the amount of cash reserves established by the board. NEP currently expects that cash reserves would be established solely to provide for the payment of income taxes by NEP, if any. Cash flow is generated from distributions NEP receives from NEP OpCo each quarter. Although, as described above, NEP currently expects that cash reserves would be established by the board solely to provide for the payment of NEP's income taxes, if any, NEP expects NEP OpCo to establish cash reserves prior to making distributions to NEP to pay costs and expenses of NEP's subsidiaries, in addition to NEP's expenses, as well as any forecasted payment of debt and other obligations and future capital expenditures.

Current wording

XPLR's partnership agreement requires it to distribute all of its available cash quarterly. Generally, available cash is all cash on hand at the date of determination relating to that quarter (including any expected distributions from XPLR OpCo), less the amount of cash reserves established by the board. XPLR currently expects that any cash on hand at the date of determination relating to that quarter would be reserved by the board to provide for the proper conduct of XPLR's business. Cash flow is generated from distributions XPLR receives from XPLR OpCo each quarter. XPLR expects XPLR OpCo to establish cash reserves prior to making distributions, if any, to XPLR to pay costs and expenses of XPLR's subsidiaries, in addition to XPLR's expenses, as well as any debt service requirements, future capital expenditures and to provide for the exercise of the buyout rights relating to noncontrolling Class B members' interest under certain limited liability company agreements to which XPLR and certain of its subsidiaries is a party or by which it is bound, or its assets are subject, or otherwise for the proper conduct of XPLR OpCo's business.

Previous wording

NEP OpCo's partnership agreement requires it to distribute all of its available cash to its unitholders, including NEP, each quarter. Generally, NEP OpCo's available cash is all cash on hand at the date of determination relating to that quarter, plus any funds borrowed, less the amount of cash reserves established by NEP OpCo GP. The majority of such available cash is expected to be derived from the operations of the projects. The cash available for distribution could fluctuate from quarter to quarter, and in some cases significantly, as a result of the performance of the projects, seasonality, fluctuating wind and solar resource, maintenance and outage schedules, timing of debt service and other factors.

Current wording

XPLR OpCo's partnership agreement requires it to distribute all of its available cash to its unitholders, including XPLR, each quarter. However, XPLR OpCo GP may reserve cash that otherwise would be available for distribution to unitholders, including XPLR, for other business purposes in its discretion. Generally, XPLR OpCo's available cash is all cash on hand at the date of determination relating to that quarter, plus any funds borrowed, less the amount of cash reserves established by XPLR OpCo GP. The majority of such available cash is expected to be derived from the operations of the projects and could fluctuate from quarter to quarter, and in some cases significantly, as a result of the performance of the projects, seasonality, fluctuating wind and solar resource, maintenance and outage schedules, timing of debt service and other factors. XPLR OpCo currently expects that any cash on hand at the date of determination relating to that quarter would be reserved to pay costs and expenses of XPLR's subsidiaries, in addition to XPLR's expenses, as well as any debt service requirements, future capital expenditures and to provide for the exercise of the buyout rights relating to noncontrolling Class B members' interest under certain limited liability company agreements to which XPLR and certain of its subsidiaries is a party or by which it is bound, or its assets are subject, or otherwise for the proper conduct of XPLR OpCo's business.