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DATE

Thursday, May 7, 2026 at 9 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Alan Liu
  • Chief Financial Officer — Jessica Geoffroy

TAKEAWAYS

  • Adjusted EBITDA -- $435 million, directly reported, reflecting portfolio generation and specific impacts described by management.
  • Free Cash Flow Before Growth -- $89 million, noted as comprising 12%-15% of anticipated annual total due to seasonality and interest expense timing.
  • Wind Resource -- Came in at 99% of the long-term average, compared with 103% in the prior year period.
  • O&M Costs -- Increased year over year, primarily due to accelerated major component work executed ahead of schedule.
  • Incremental Corporate Interest Expense -- Approximately $74 million attributed to $1.75 billion unsecured notes issued in March 2025.
  • Incremental Project Financing Interest Expense -- $12 million higher year over year, due to project financings raised in 2025.
  • Repowering Progress -- Around 30% of planned 2026 repowering projects completed, with remaining projects on schedule.
  • Battery Storage Joint Venture -- XPLR exercised options to co-invest with a 49% interest in four projects, adding approximately 200 megawatts of storage by 2027; net equity requirement of $80 million to be funded through asset and rights sales to NextEra Energy Resources and four joint ventures.
  • Recontracting -- Roughly 90 megawatts at a wind site re-contracted at a rate about $25 per megawatt hour above prior realized pricing; new agreement is a 15-year busbar contract.
  • 2026 Guidance -- Adjusted EBITDA projected in the $1.75 billion to $1.95 billion range; Free Cash Flow Before Growth targeted between $600 million and $700 million, conditional on normal operating conditions.

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RISKS

  • First quarter Free Cash Flow Before Growth declined due to higher financing costs from 2025 recapitalization and balance sheet simplification activities, partially offset by asset repowering contributions.
  • Quarterly Free Cash Flow Before Growth results can fluctuate with timing of interest payments and seasonality in wind and solar generation, resulting in lighter first quarter contributions.
  • Lower wind resource at 99% of average, compared with 103% in the prior period, negatively affected project financial performance for the quarter.
  • Repowering and battery storage investments remain subject to potential cost overruns, as direct equity co-investments require additional partner funding if expenses exceed current estimates.

SUMMARY

XPLR Infrastructure (XIFR +5.30%) reported that approximately 30% of its 2026 repowering projects are completed, with the remainder described as on track to support future portfolio performance. Management confirmed execution of the planned draw from 2025 project financing commitments, stating the next significant corporate refinancing activity is not expected until 2027. The company is advancing a battery storage joint venture with NextEra Energy Resources, with XPLR set to hold a 49% interest in four projects, adding roughly 200 net megawatts of storage capacity by 2027. Management disclosed that a recent recontracting of roughly 90 megawatts yielded a rate that is roughly $25 per megawatt hour higher under a new 15-year busbar agreement. and signaled expanded opportunity for similar contract optimization, particularly as legacy wind contracts mature.

  • XPLR management stated, "with the list and the opportunities that we're looking at, we feel confident we will be able to fund those with additional asset sales," indicating no immediate need for incremental investment commitments beyond current joint venture plans.
  • Approximately $943 million in cash and equivalents was reported on the balance sheet at quarter end, with about $300 million identified as held in project-level reserves based on previous SEC filings.
  • The recontracting opportunity pipeline is weighted toward wind assets, with management indicating that roughly 70% of these prospects will materialize after 2030, but actionable opportunities are being pursued now.
  • XPLR's disciplined capital allocation framework means participation in further co-located storage or asset monetizations will depend on site-specific returns and broader capital plan priorities.

INDUSTRY GLOSSARY

  • Busbar Contract: Power purchase agreement in which the price is set and paid at the generating plant’s point of delivery, transferring price risk from the seller to the buyer.
  • Repowering: The process of upgrading or replacing existing wind or solar generation equipment to increase output, efficiency, or asset life.
  • Free Cash Flow Before Growth: Cash available from operations after sustaining capital expenditures, but before investments in new projects or capacity expansions.
  • Co-located Storage: Battery energy storage projects developed at or adjacent to existing generation sites, sharing grid interconnection infrastructure.

Full Conference Call Transcript

Alan Liu: Thank you, Kanghee. Good morning, everyone. We delivered a solid start to 2026. Performance across the business was consistent with our expectations as we continue to advance our strategy to simplify our capital structure and maximize the value of our portfolio. The portfolio continues to deliver steady performance, and the team continues to execute in a disciplined manner with progress across our key focus areas. Our repowering program continues to progress well. To date, we have completed approximately 30% of the repowering projects planned for 2026.

The remaining projects are on track and are expected to enhance output and longevity of XPLR's fleet and support overall portfolio performance over time, while positioning XPLR for the future in this growing power demand environment. We also completed the final expected draw from our project financing commitments secured in 2025, successfully funding certain of our repowering investments with long-term and low-cost asset level financing. With the successful execution of planned refinancing and recapitalization activities in 2025, we have a relatively modest financing plan ahead of us with the next major corporate refinancing activity not expected until 2027.

With respect to the previously announced interconnection sale and battery storage co-investment agreement with NextEra Energy Resources, XPLR completed its evaluation and exercised its options to co-invest in the storage projects. XPLR will participate with a 49% expected interest in each of the four projects, which are expected to add approximately 200 net megawatts of battery storage capacity to our portfolio by year-end 2027. As a reminder, after asset level financing proceeds, the net equity required for XPLR is expected to be approximately $80 million, which XPLR plans to fund through the sale of certain interconnection assets and rights to NextEra Energy Resources and to the four to-be-formed joint ventures.

We believe that the structure for the joint ventures represents a disciplined and capital-efficient way to add incremental growth, leveraging our existing platform while maintaining a focus on balance sheet strength. Lastly, we continue to see improving power market fundamentals that we believe are supportive of the value and the optionality of our assets, and those favorable market dynamics are starting to translate into tangible opportunities. We recently recontracted roughly 90 megawatts at an existing wind site at a rate that is roughly $25 per megawatt hour higher than realized pricing on that project's generation over the past year. It's a small project, but the revenue uplift is meaningful on a percentage basis.

And more importantly, we are optimistic that this is an early example of a broader opportunity set as legacy contracts expire. Our team is pursuing additional opportunities to recontract and optimize existing contracts across multiple markets where there is strong demand growth. With that, let me turn it over to Jessica, who will review our first quarter 2026 results in more detail.

Jessica Geoffroy: Thank you, Alan, and good morning, everyone. Let's begin with XPLR Infrastructure's detailed results. For the first quarter of 2026, XPLR portfolio generated approximately $435 million in adjusted EBITDA and $89 million in Free Cash Flow Before Growth. First quarter results from existing projects were affected by lower wind resource, which came in at approximately 99% of the long-term average compared to 103% in the prior year period. This impact was partially offset by contributions from repowered assets, which continue to enhance generation and cash flow across the portfolio.

Favorable weather and strong execution during the first quarter allowed us to pull ahead planned major component work from later in the year, which was the primary driver of higher year-over-year O&M costs. In addition, the results for both adjusted EBITDA and Free Cash Flow Before Growth reflect the impact of asset dispositions completed in 2025. The year-over-year decline in Free Cash Flow Before Growth was consistent with the company's expectations as it was primarily driven by higher financing costs resulting from the balance sheet simplification and capital plan funding activities in 2025.

Specifically, XPLR Infrastructure's First Quarter 2026 Free Cash Flow Before Growth includes approximately $74 million of incremental corporate interest expense from the approximately $1.75 billion of unsecured notes issuances in March 2025. It also includes approximately $12 million higher year-over-year interest expense from project financings raised in 2025. As a reminder, Free Cash Flow Before Growth reflects actual cash interest payments within the measurement period. As a result, quarterly results can vary based on the timing of interest payments, along with the natural seasonality of wind and solar generation. Taken together, these factors typically result in a lighter contribution in the first quarter.

Specifically, XPLR's First Quarter 2026 Free Cash Flow Before Growth is expected to represent roughly 12% to 15% of its expected full year results. Additional granularity on the timing of expected interest payments can be found in the appendix of today's presentation. For 2026, we continue to expect adjusted EBITDA of $1.75 billion to $1.95 billion and Free Cash Flow Before Growth of $600 million to $700 million. As always, our expectations assume our usual caveats, including normal weather and operating conditions. Let me close by reinforcing the key elements of the XPLR platform. XPLR is a contracted infrastructure platform generating stable cash flows supported by long-term agreements and high credit quality counterparties.

Our strategy remains focused on two priorities: continuing to simplify the capital structure and executing on attractive investments into the existing asset base to create value for unitholders. We believe that consistent execution against these priorities supports both our financial flexibility and our strategic positioning. We believe that the combination of stable cash flow generation and a disciplined capital plan allows XPLR to allocate retained cash flows in a value-maximizing manner over time. That discipline underpins our strategy and positions XPLR to capture long-term value as U.S. power demand continues to grow. That concludes our prepared remarks, and we will now open the line for questions.

Operator: [Operator Instructions] We will take our first question from Nelson Ng from RBC Capital Markets.

Nelson Ng: Alan, you mentioned there was a small recontracting during the quarter with a $25 improvement in the power price. Are you able to provide the power price prior to the recontracting? I was just wondering what the percentage improvement was.

Alan Liu: We didn't provide the prior contract price, so just commercial sensitivity of where the ultimate PPA landed here. But I would say, if you think about it, right, and we've given you some disclosure previously about on average, kind of the uplift. This is in line or even slightly better than kind of the uplift that we would have expected for this market. The opportunities, obviously, we've highlighted before, right? They're generally in SPP and ERCOT, and WACC. So it's a project in one of those markets and in line with where we expected, which is it's a multiple above where the previous price was.

Nelson Ng: Okay. And then just on the battery storage front, I think you previously agreed to sell interconnection rights to raise $45 million of the $80 million required for your equity contribution. Have you identified the rest of the projects that you're looking to sell? And then just a follow-up on that. Is there a time line in terms of when there could be another batch of projects that XPLR could co-invest in?

Alan Liu: I'll address the first question, which is the funding for the existing storage JV. We're certainly working through a list of potential opportunities with NEER. As a reminder, construction for these projects aren't slated to begin until at the earliest end of this year, but most likely, it's throughout 2027 and then they are COD in late 2027. So we have some time. But with the list and the opportunities that we're looking at, we feel confident we will be able to fund those with additional asset sales. I think your question about will there be additional storage opportunities?

I think the right way to think about it is across our 10-gigawatt portfolio, we certainly have multiple gigawatts of surplus interconnection. Those represent potential opportunities. We certainly feel out of that set, there are opportunities for additional co-located storage or other development opportunities. But whether or not those projects are ultimately attractive to XPLR site location specific. It comes down to a lot of factors, including the demand and the pricing that can be achieved for those specific projects. And then ultimately, whether or not we participate or monetize those, the value of that interconnect is going to fall under our existing capital allocation framework, right?

It's subject to what else can we do with our money, are there better returning allocations or and then also it's subject to the balance sheet and our cost of financing. So a long way of saying, yes, there's opportunity. We have not committed to any incremental investments at this time, but we'll keep you posted.

Nelson Ng: And then just one last question. You mentioned the balance sheet. So looking at the balance sheet, there's about $943 million of cash and equivalents. I presume a lot of that cash is at the project level. But like roughly how much of that cash is readily available at the corporate level?

Jessica Geoffroy: Nelson, it's Jessica. So you can see in our SEC filings, we break out the amount of cash held in reserves at the projects. Our 10-Q for this quarter will come out after market close today. But looking back at the last quarter, there's roughly $300 million held in reserves at the projects.

Operator: [Operator Instructions] And we will take our next question from the line of Mark Jarvi from CIBC Capital Markets.

Mark Jarvi: Just going back to the recontracting opportunity. Can you comment at all in terms of like how big the funnel would be? Like how many megawatts across your portfolio are something you're actively exploring? And we're sort of -- I assume it's more weighted to wind just given the vintage of the contracts and assets. Is that right?

Alan Liu: Mark, this is Alan. That is correct. I think that's the right way to think about it. The majority of the opportunity will exist in wind projects and obviously, in the specific markets. We've highlighted this before in prior presentations. In the near term, and we've given you a schedule a rough kind of chart that shows there are increasing opportunities as we get closer to 2030. But there's definitely going to be tangible opportunities that we're working on as we speak. But the majority, I would say, roughly 70% of the kind of opportunity exists beyond 2030. And we're hoping to continue to execute in the next few years leading up to that.

Mark Jarvi: And obviously, the pricing you received was attractive. I think NextEra said around $20 a megawatt hour what they got. So that's a good uplift. Just curious in terms of what the tenor of the contracts are out there and sort of that trade-off between price and duration.

Alan Liu: I believe it was a 15-year contract, but we'll confirm.

Mark Jarvi: But that's generally what the counterparties are looking for, that sort of that term at this point? Or is there a real range out there of shorter duration? Yes.

Alan Liu: Yes. So just to confirm, it was a 15-year busbar contract here. And as you know, there's always a trade-off between tenor, right, whether it's hub settled or busbar. And ultimately, for us, this made the most sense, right, between duration of the contract, like the fact that in this particular market, we prefer the busbar over a potentially higher hub settled contract here.

Mark Jarvi: Got it. And just on the battery projects co-investment, are the costs all locked down for those projects, like everything locked down in terms of equipment, EPC, all that kind of stuff, just so that you know that the $80 million investment is more or less firm at this point?

Alan Liu: So this is a true equity co-investment alongside NEER Energy Resources. So as with any equity investment, we -- if there are cost overruns, we, of course, would be as a partner funding that. But we feel good about this project. It's well advanced. Supply chain, we have the same benefits, right, the benefit of having NEER as a co-investment partner here is that we have access to that supply chain and the equipment. We feel very good about having secured.

Operator: There are no further questions on the queue. That concludes our question-and-answer session for today. That also concludes our call for today. Thank you all for joining, and you may now disconnect.