XPLR Infrastructure, LP

Previous 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 June 30, 2025, XPLR owned an approximately 48.8% limited partner interest in XPLR OpCo and NEE Equity owned a noncontrolling 51.2% 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.

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 had an investment in natural gas pipeline assets, which investment was sold in September 2025 (see Note 1). XPLR consolidates the results of XPLR OpCo and its subsidiaries through its controlling interest in the general partner of XPLR OpCo. At September 30, 2025, XPLR owned an approximately 48.8% limited partner interest in XPLR OpCo and NEE Equity owned a noncontrolling 51.2% 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

This discussion should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2024 Form 10-K. The results of operations for an interim period generally will not give a true indication of results for the year. In the following discussions, all comparisons are with the corresponding items in the prior year period. In August 2025, certain indirect subsidiaries of XPLR entered into an agreement to sell their ownership interests in Meade. See Note 9 - Disposal of Investment in Pipeline Assets.

Current wording

This discussion should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2024 Form 10-K. The results of operations for an interim period generally will not give a true indication of results for the year. In the following discussions, all comparisons are with the corresponding items in the prior year period.

Previous wording

A number of legislative and administrative activities have occurred in 2025 that affect XPLR including the enactment of the OBBBA, the issuance of a number of federal executive orders and presidential actions, the imposition of tariffs on a variety of imports, and the issuance of guidance by various federal agencies. A number of regulatory actions were issued or remain pending, such as Treasury Department guidance regarding clean energy tax credits, trade investigations that may lead to additional tariffs, and ordered reviews of, and process changes for, federal permitting and approvals for wind and solar projects.

Current wording

A number of legislative, executive and administrative activities have occurred in 2025 that affect XPLR including 1) the enactment of the OBBBA which, among other things, modified tax legislation affecting clean energy tax credits, 2) the issuance of a number of federal executive orders and presidential actions, 3) the imposition of tariffs on a variety of imports and 4) the issuance of guidance by various federal agencies. A number of similar activities remain pending or are in various phases of implementation, such as Treasury Department rulemaking authorized by the OBBBA, trade investigations that may lead to additional tariffs or place limitations on imports of certain materials and ordered reviews of, or process or policy changes with respect to, federal permitting and approvals for wind and solar projects. There has been no material impact on XPLR's operations or financial performance as a result of these developments and XPLR believes that the previously announced wind repowering program will qualify for clean energy tax credits if placed into service as planned. XPLR will assess any further developments for potential impacts in future periods.

Previous wording

The $12 million net gains on disposal of businesses/assets recognized during the six months ended June 30, 2025 reflect insurance recoveries on four permanently damaged wind turbines and a working capital adjustment relating to the disposal of a business.

Current wording

The change in net gains (losses) on disposal of businesses/assets recognized during the three months ended September 30, 2025 reflects the absence of prior year insurance recoveries on three permanently damaged wind turbines.

Previous wording

The increase in interest expense of $223 million during the six months ended June 30, 2025 primarily reflects approximately $213 million of unfavorable mark-to-market activity ($116 million of losses recorded in 2025 compared to $97 million of gains in 2024).

Current wording

The decrease in interest expense of $30 million during the three months ended September 30, 2025 primarily reflects approximately $64 million of favorable mark-to-market activity ($1 million of gains recorded in 2025 compared to $63 million of losses in 2024), partly offset by $35 million of higher interest expense due to higher average debt outstanding.

Previous wording

For the three months ended June 30, 2024, XPLR recorded income tax expense of $21 million on income before income taxes of $79 million, resulting in an effective tax rate of approximately 27%. The tax expense is comprised primarily of income tax expense of approximately $17 million at the U.S. federal statutory rate of 21% and $12 million attributable to noncontrolling interests, partly offset by income tax benefit of $9 million attributable to clean energy tax credits. See Note 4.

Current wording

For the three months ended September 30, 2024, XPLR recorded income tax expense of $34 million on loss from continuing operations before income taxes of $30 million, resulting in an effective tax rate of approximately (113)%. The tax expense is comprised primarily of income tax expense of approximately $39 million attributable to noncontrolling interests and $7 million of state taxes, partly offset by income tax benefit of $8 million attributable to clean energy tax credits and $6 million at the statutory rate of 21%. See Note 5.

Previous wording

For the three months ended June 30, 2025, the change in net loss attributable to noncontrolling interests primarily reflects lower net income attributable to NEE Equity's noncontrolling interest of approximately $47 million ($67 million of net income in 2025 compared to $114 million of net income in 2024) and lower net income attributable to Class B noncontrolling membership interests of $18 million, primarily due to buyout of the Class B membership interests in XPLR Renewables II in April 2025 (see Note 7 – Class B Noncontrolling Interests), partly offset by lower net loss allocated to differential membership interest investors of $26 million ($195 million in 2025 compared to $221 million in 2024). See Note 9 – Noncontrolling Interests.

Current wording

For the three months ended September 30, 2025, the change in net loss attributable to noncontrolling interests primarily reflects lower net loss allocated to differential membership interest investors of $28 million ($136 million in 2025 compared to $164 million in 2024) as a result of buyouts and higher net income attributable to NEE Equity's noncontrolling interest of approximately $15 million ($35 million of net income in 2025 compared to $20 million of net income in 2024), partly offset by lower net income attributable to Class B noncontrolling membership interests of $18 million, primarily due to buyout of the Class B membership interests in XPLR Renewables II in April 2025 (see Note 8 – Class B Noncontrolling Interests) and lower net income of $11 million relating to noneconomic ownership interests (see Note 6 for discussion regarding the non-economic ownership interests). See Note 10 – Noncontrolling Interests.

Previous wording

O&M expenses decreased $37 million during the three months ended June 30, 2025 primarily reflecting lower net operating expenses at the existing XPLR projects of $35 million primarily relating to vendor credits for unplanned O&M expenses.

Current wording

O&M expenses decreased $27 million during the nine months ended September 30, 2025 primarily reflecting lower net operating expenses at the existing XPLR projects primarily relating to vendor credits for unplanned O&M expenses, partly offset by dismantlement costs associated with repowering of wind facilities.

Previous wording

The $253 million goodwill impairment charge recognized during the six months ended June 30, 2025 reflects the non-cash goodwill impairment charge recognized in March 2025. See Note 3 – Nonrecurring Fair Value Measurements.

Current wording

The $253 million goodwill impairment charge recognized during the nine months ended September 30, 2025 reflects the non-cash goodwill impairment charge recognized in March 2025. See Note 4 – Nonrecurring Fair Value Measurements.

Previous wording

The $9 million net gains on disposal of businesses/assets recognized during the three months ended June 30, 2025 reflect a working capital adjustment relating to the disposal of a business and insurance recoveries on three permanently damaged wind turbines.

Current wording

The change in net gains on disposal of businesses/assets recognized during the nine months ended September 30, 2025 reflect lower insurance recoveries on permanently damaged wind turbines, partly offset by a working capital adjustment relating to the disposal of a business.

Previous wording

The increase in interest expense of $77 million during the three months ended June 30, 2025 primarily reflects approximately $55 million of unfavorable mark-to-market activity ($27 million of losses recorded in 2025 compared to $28 million of gains in 2024) and $22 million of higher interest expense due to higher average debt outstanding.

Current wording

The increase in interest expense of $154 million during the nine months ended September 30, 2025 primarily reflects approximately $106 million of unfavorable mark-to-market activity ($102 million of losses recorded in 2025 compared to $4 million of gains in 2024) and $48 million of higher interest expense due to increased average debt outstanding.

Previous wording

For the three months ended June 30, 2025, the change in other – net primarily reflects the absence of the interest income from NEER for cash sweep amounts held relating to proceeds from the December 2023 sale of the Texas pipelines, partly offset by interest income earned on cash on hand during the quarter.

Current wording

For the nine months ended September 30, 2025, the change in other – net primarily reflects the absence of the interest income from NEER for cash sweep amounts held relating to proceeds from the December 2023 sale of the Texas pipelines, partly offset by interest income earned on cash on hand.

Previous wording

For the six months ended June 30, 2025, XPLR recorded income tax benefit of $86 million on loss before income taxes of $378 million, resulting in an effective tax rate of approximately 23%. The tax benefit is primarily comprised of tax benefits of approximately $79 million at the U.S. federal statutory rate of 21%, $16 million of state taxes and $14 million attributable to clean energy tax credits, partly offset by tax expense of $24 million related to taxes attributable to noncontrolling interests. See Note 4.

Current wording

For the nine months ended September 30, 2025, XPLR recorded income tax benefit of $36 million on loss from continuing operations before income taxes of $354 million, resulting in an effective tax rate of approximately 10%. The tax benefit is primarily comprised of income tax benefits of approximately $74 million at the federal statutory rate of 21%, $34 million attributable to clean energy tax credits and $7 million of state income taxes, partly offset by tax expense of $77 million related to taxes attributable to noncontrolling interests. See Note 5.

Previous wording

For the six months ended June 30, 2024, XPLR recorded income tax expense of $8 million on income before income taxes of $100 million, resulting in an effective tax rate of approximately 8%. The tax expense is comprised primarily of income tax expense of approximately $21 million at the U.S. federal statutory rate of 21%, partly offset by income tax benefit of $16 million attributable to clean energy tax credits. See Note 4.

Current wording

For the nine months ended September 30, 2024, XPLR recorded income tax expense of $39 million on income from continuing operations before income taxes of $36 million, resulting in an effective tax rate of approximately 108%. The tax expense is comprised primarily of income tax expense of approximately $44 million related to taxes attributable to noncontrolling interests, $8 million at the federal statutory rate of 21% and $9 million relating to state income taxes, partly offset by income tax benefit of $25 million attributable to clean energy tax credits. See Note 5.

Previous wording

For the six months ended June 30, 2025, the change in net loss attributable to noncontrolling interests primarily reflects the change in the net income or loss attributable to NEE Equity's noncontrolling interest of approximately $252 million ($66 million of net loss in 2025 compared to $186 million of net income in 2024) and lower net income attributable to Class B noncontrolling membership interests of $21 million, primarily due to the buyout of the Class B membership interests in XPLR Renewables II in April 2025 (see Note 7 – Class B Noncontrolling Interests), partly offset by lower net loss allocated to differential membership interest investors of $36 million ($388 million in 2025 compared to $424 million in 2024). See Note 9 – Noncontrolling Interests.

Current wording

For the nine months ended September 30, 2025, the change in net loss attributable to noncontrolling interests primarily reflects the change in the net income or loss attributable to NEE Equity's noncontrolling interest of approximately $237 million ($31 million of net loss in 2025 compared to $206 million of net income in 2024) and lower net income attributable to Class B noncontrolling membership interests of $38 million, primarily due to the buyout of the Class B membership interests in XPLR Renewables II in April 2025 (see Note 8 – Class B Noncontrolling Interests), partly offset by lower net loss allocated to differential membership interest investors of $63 million ($524 million in 2025 compared to $587 million in 2024). See Note 10 – Noncontrolling Interests.

Previous wording

At June 30, 2025, XPLR's liquidity position was approximately $3,296 million. The table below provides the components of XPLR’s liquidity position:

Current wording

At September 30, 2025, XPLR's liquidity position was approximately $3,174 million. The table below provides the components of XPLR’s liquidity position:

Previous wording

XPLR OpCo and its direct subsidiary are parties to the $2,450 million XPLR OpCo credit facility. During the six months ended June 30, 2025, approximately $330 million of borrowings outstanding under the XPLR OpCo credit facility were repaid. 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 June 30, 2025, 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. See Note 6.

Current wording

XPLR OpCo and its direct subsidiary are parties to the $2,450 million XPLR OpCo credit facility. During the nine months ended September 30, 2025, approximately $330 million of borrowings outstanding under the XPLR OpCo credit facility were repaid. 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 September 30, 2025, 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. See Note 7.

Previous wording

During the six months ended June 30, 2025, XPLR OpCo issued $825 million of 8.375% senior unsecured notes due 2031 and $925 million of 8.625% senior unsecured notes due 2033 and approximately $182 million principal amount of the 2020 convertible notes were repurchased for $177 million. Also during the six months ended June 30, 2025, certain indirect subsidiaries of XPLR entered into limited-recourse senior secured variable rate term loan facilities (term loan facilities) totaling approximately $426 million which mature in 2030 and under which $338 million was borrowed. At June 30, 2025, approximately $88 million was available under one of the term loan agreements, subject to specified conditions. In August 2025, the XPLR subsidiaries amended the term loan facilities and the combined facilities provide up to $1,047 million to finance certain wind repowering projects. As of August 7, 2025, approximately $709 million was available under the combined facilities, subject to specified conditions. See Note 6 and Part II, Item 5(a).

Current wording

During the nine months ended September 30, 2025, XPLR OpCo issued $825 million of 8.375% senior unsecured notes due 2031 and $925 million of 8.625% senior unsecured notes due 2033 and approximately $182 million principal amount of the 2020 convertible notes were repurchased for $177 million. Also during the nine months ended September 30, 2025, certain indirect subsidiaries of XPLR entered into limited-recourse senior secured variable rate term loan facilities (term loan facilities) to finance certain wind repowering projects totaling $1,047 million, which mature in 2030. At September 30, 2025, the XPLR subsidiaries had borrowed approximately $412 million under the term loan facilities and a total of $635 million was available under the combined facilities, subject to specified conditions. In October and November 2025, the XPLR subsidiaries borrowed approximately $203 million and $157 million, respectively, under the term loan facilities. As of November 4, 2025, approximately $274 million was available under the combined facilities, subject to specified conditions. See Note 7 and Part II, Item 5(a).

Previous wording

In April 2025, XPLR exercised its buyout right and purchased the remaining outstanding Class B membership interests in XPLR Renewables II. See Note 7 – Class B Noncontrolling Interests.

Current wording

In April 2025, XPLR exercised its buyout right and purchased the remaining outstanding Class B membership interests in XPLR Renewables II. In September 2025, XPLR purchased the remaining outstanding Class B membership interests in XPLR Pipelines. See Note 8 – Class B Noncontrolling Interests.

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 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 six months ended June 30, 2025 and 2024, XPLR had capital expenditures of approximately $170 million and $133 million, respectively, primarily relating to repowering of wind facilities.

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 nine months ended September 30, 2025 and 2024, XPLR had capital expenditures of approximately $684 million and $189 million, respectively, primarily relating to repowering of wind facilities.

Previous wording

The increase in net cash provided by operating activities was primarily driven by lower O&M expenses, higher solar resource and the timing of transactions impacting working capital.

Current wording

The increase in net cash provided by operating activities was primarily driven by lower O&M expenses and the timing of transactions impacting working capital.

Previous wording

The change in net cash provided by investing activities was primarily driven by lower payments received from NEER subsidiaries (net of amounts paid) under the CSCS agreement and higher capital expenditures and other investments, net of reimbursements, partly offset by higher distributions from non-economic ownership interests (see Note 5 for discussion regarding non-economic ownership interests).

Current wording

The change in net cash provided by investing activities was primarily driven by lower payments received from NEER subsidiaries (net of amounts paid) under the CSCS agreement and higher capital expenditures and other investments, net of reimbursements, partly offset by proceeds from the sale of equity method investments and higher distributions from non-economic ownership interests (see Note 6 for discussion regarding non-economic ownership interests).

Previous wording

Net Cash Provided by (Used in) Financing Activities

Current wording

Net Cash Used in Financing Activities

Previous wording

The change in net cash provided by (used in) financing activities primarily reflects issuances of long-term debt in 2025 compared to retirements in 2024 and larger buyout of Class B noncontrolling interest investors in 2025.

Current wording

The change in net cash used in financing activities primarily reflects issuances of long-term debt in 2025 compared to retirements in 2024 and lower partner distributions, partly offset by larger buyouts of Class B noncontrolling interest investors and differential membership interests in 2025.

Previous wording

XPLR has long-term debt instruments that subject it to the risk of loss associated with movements in market interest rates. At June 30, 2025, approximately 99% of the long-term debt, including current maturities, was not exposed to fluctuations in interest expense as it was either fixed rate debt or financially hedged. At June 30, 2025, the estimated fair value of XPLR's long-term debt was approximately $6.5 billion and the carrying value of the long-term debt was $6.6 billion. See Note 3 – Financial Instruments Recorded at Other than Fair Value. Based upon a hypothetical 10% decrease in interest rates, the fair value of XPLR's long-term debt would increase by approximately $40 million at June 30, 2025.

Current wording

XPLR has long-term debt instruments that subject it to the risk of loss associated with movements in market interest rates. At September 30, 2025, approximately 99% of the long-term debt, including current maturities, was not exposed to fluctuations in interest expense as it was either fixed rate debt or financially hedged. At September 30, 2025, the estimated fair value of XPLR's long-term debt was approximately $5.9 billion and the carrying value of the long-term debt was $5.9 billion. See Note 4 – Financial Instruments Recorded at Other than Fair Value. Based upon a hypothetical 10% decrease in interest rates, the fair value of XPLR's long-term debt would increase by approximately $94 million at September 30, 2025.

Previous wording

At June 30, 2025, XPLR had interest rate contracts with a net notional amount of approximately $3.8 billion related to managing exposure to the variability of cash flows associated with outstanding and expected future debt issuances and borrowings. Based upon a hypothetical 10% decrease in rates, XPLR’s net derivative assets at June 30, 2025 would decrease by approximately $60 million.

Current wording

At September 30, 2025, XPLR had interest rate contracts with a net notional amount of approximately $3.0 billion related to managing exposure to the variability of cash flows associated with outstanding and expected future debt issuances and borrowings. Based upon a hypothetical 10% decrease in rates, XPLR’s net derivative assets at September 30, 2025 would decrease by approximately $48 million.