XPLR Infrastructure (NYSE:XIFR) executives said 2025 marked a “pivotal year” as the company transitioned to a capital allocation business model, emphasizing capital structure simplification, selected portfolio investments, and steps to improve financial flexibility. Management also highlighted progress on wind repowerings and introduced a new interconnection monetization and battery storage co-investment agreement with NextEra Energy Resources.
2025 results and drivers
For full-year 2025, the company reported adjusted EBITDA of $1.88 billion and Free Cash Flow before growth of $746 million. CEO Alan Liu said the results reflect “the strong underlying cash flow-generating capabilities of our assets,” while CFO Jessica Geoffroy described the portfolio as continuing to generate “strong cash flows from long-duration contracted assets.”
- The absence of an approximately $40 million one-time settlement payment that benefited the fourth quarter of 2024
- Asset dispositions, including the sale of investments in the Meade Pipeline and certain distributed generation assets in the third quarter of 2025
Those impacts were partially offset by improved pricing (including contract escalators and more favorable market conditions at certain projects) and lower net operating costs, she said. Free Cash Flow before growth was also affected by higher corporate interest expense tied to debt issued during refinancing and capital structure actions, as well as the timing of tax credit monetization.
2026 outlook and near-term operating assumptions
For 2026, the company maintained its expectations for adjusted EBITDA of $1.75 billion to $1.95 billion and Free Cash Flow before growth of $600 million to $700 million. Geoffroy said the outlook assumes “normal weather and operating conditions.”
Capital structure actions and CEPF strategy
Management said it executed the major items laid out a year earlier, including asset sales, financing initiatives, and addressing near-term maturities. Liu said the company addressed two Convertible Equity Portfolio Financings (CEPF), reducing third-party non-controlling equity interests by more than $1.1 billion. He added that proceeds from asset sales—about $160 million of net proceeds from the Meade Pipeline and certain distributed generation assets—were used in part to support a $250 million reduction in corporate debt issuance previously contemplated for 2026.
Geoffroy said XPLR bought out the remaining third-party non-controlling equity interest in its CEPF 1 asset portfolio and used Meade Pipeline sale proceeds to address CEPF 2. She emphasized that CEPF structures include call options that the company evaluates as investment decisions relative to other capital allocation needs and balance sheet priorities. Depending on whether it exercises options, XPLR could pursue an asset sale (with investor consent) or allow substantially all cash flows from underlying assets to transfer to the CEPF investor.
On remaining CEPFs:
- CEPF 3: The company continues evaluating options, including a potential sale of the underlying assets, but does not need to make a definitive decision until the fourth quarter of 2027. Liu told analysts there was “no change in the plan,” but management wanted to clarify timing and optionality.
- CEPF 5: Geoffroy said XPLR expects to exercise a call option on the first partial buyout later this year and outlined planned partial buyout investments of approximately $150 million in 2026 and $470 million in 2027.
- CEPF 4: The first opportunity to exercise a call option for increased equity is not until the end of 2028, according to Geoffroy.
Geoffroy said the company’s current plan would result in a more than $2 billion reduction in third-party non-controlling equity interest by 2030, and that this would be achieved “without putting undue pressure on the balance sheet or relying on the issuance of new equity.”
Battery storage co-investment and interconnection monetization with NextEra Energy Resources
Liu announced an interconnection sale and battery storage co-investment agreement with NextEra Energy Resources. Under the agreement, XPLR will monetize surplus interconnection capacity and rights at certain existing sites through sales to NextEra Energy Resources, while retaining the ability to co-invest in four new co-located battery storage projects.
The four storage projects total 400 MW of capacity and have “long-dated capacity agreements with investment-grade off-takers,” Liu said. They are expected to reach commercial operations by the end of 2027. In response to a Jefferies question, management said the projects would therefore add to 2028 and beyond cash flows, and were not included in the company’s 2026 Free Cash Flow before growth bridge.
Liu said XPLR can add up to approximately 200 net MW of storage capacity through the arrangement. Each project is expected to be held in a joint venture in which XPLR has the right to invest up to a 49% stake. If it elects to invest across all four projects, XPLR’s expected net equity contribution is approximately $80 million after receipt of asset-level financing proceeds.
To fund the investment, XPLR agreed to sell certain interconnection assets and rights associated with the four co-located projects for approximately $31 million, and to sell additional interconnection assets and rights to enable a 150 MW storage project co-located with the Palo Duro wind site for approximately $14 million. XPLR said it intends to sell additional interconnection assets and rights to enable up to 500 MW of potential future battery storage projects on other XPLR sites to fund the remaining portion of its expected net equity contributions. XPLR will not have co-investment rights in those additional projects or the Palo Duro storage project.
NextEra Energy Resources will provide development, engineering, and construction services as well as equipment for the four joint venture projects, and will fund the balance of project costs not invested by XPLR. Liu said the structure is intended to accelerate execution while reducing risk and providing an “efficient pathway” to monetize non-cash-flow-generating surplus interconnection capacity.
On timing, management said XPLR has 45 days under the agreement to finalize its evaluation of the development plan and make an election on the co-investment, and that the agreement includes a process to identify additional interconnection asset sales to fund the remainder of the expected equity contribution.
Repowering expansion and longer-term upside discussion
Repowering remained a major focus. Liu said the company completed nearly 1.3 GW of its previously announced repowering plan, with projects achieving commercial operations “on time and on budget.” Based on that progress, XPLR updated its repowering plan from 1.6 GW to approximately 2.1 GW through 2030, adding 500 MW of additional repowerings that management said are expected to deliver strong equity returns. The company anticipates funding the new repowerings through a combination of retained cash flows and additional project-level financing.
When asked about returns, management reiterated it has previously targeted “minimum double-digit returns” for repowering projects. Liu also characterized the battery storage opportunity as “modestly lower-returning” than repowerings but “still double-digit.”
Management also pointed to potential longer-term upside from recontracting as power purchase agreements expire. Liu said approximately 80% of the MWh sold are contracted at prices “below where the market prices are currently” and below forecasted prices at maturity. Using third-party forecasted power prices, the existing portfolio was “estimated to be able to deliver more than $200 million of incremental revenue by 2040,” though management emphasized actual outcomes will depend on market conditions and execution.
On funding flexibility, Geoffroy said the capital plan through the end of the decade is expected to be largely funded by retained cash flows, supplemented where appropriate with project-level financing and selective use of corporate debt. She also noted the company reduced the size of its corporate revolving credit facility from $2.5 billion to $1.25 billion, and said XPLR has $750 million or less in corporate debt maturities over any 12-month period through year-end 2030.
About XPLR Infrastructure (NYSE:XIFR)
XPLR Infrastructure LP engages in the acquisition, management, and ownership of contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America and natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.
