Financial Analysis

Commitments and Contingencies Commitments At June 30, 2026, XPLR OpCo had funding commitments related to four to-be-built battery storage projects. At June 30, 2026, XPLR OpCo's funding commitments are estimated to be approximately $49 million and $266 million in 2026 and 2027, respectively. The estimated funding commitments are subject to continuing review and adjustment and the actual amounts invested may vary from these estimates. In July 2026, XPLR OpCo invested approximately $13 million in two joint ventures which will build two of the battery storage projects. Legal Proceedings XPLR, NEE, certain former executives of XPLR and certain current and former directors of XPLR are the named defendants in a purported federal securities class action lawsuit filed in the U.S. District Court for the Southern District of California (Southern District of California) in July 2025 that seeks unspecified damages alleging that the defendants made false and misleading statements regarding XPLR's business model, XPLR distributions and arrangements relating to Class B noncontrolling members' interests under certain limited liability company agreements to which XPLR and certain of its subsidiaries are or were a party. The alleged class includes all persons or entities other than the defendants and certain affiliated parties of the defendants as named in the lawsuit who purchased or otherwise acquired XPLR securities between September 27, 2023 and January 27, 2025. In January 2026, the plain …

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Non-Derivative Fair Value Measurements Non-derivative fair value measurements consist of XPLR's cash equivalents. The fair value of these financial assets is determined by using the valuation techniques and inputs as described in Note 3 Fair Value Measurement of Derivative Instruments. The fair value of money market funds that are included in cash and cash equivalents, current other assets and noncurrent other assets on XPLR's condensed consolidated balance sheets is estimated using a market approach based on current observable market prices. Recurring Non-Derivative Fair Value Measurements XPLRs fair value measurements made on a recurring basis by fair value hierarchy level are as follows: June 30, 2026 December 31, 2025 Level 1 Level 2 Total Level 1 Level 2 Total (millions) Assets: Cash equivalents $ 218 $ $ 218 $ 623 $ $ 623 Total assets $ 218 $ $ 218 $ 623 $ $ 623 Financial Instruments Recorded at Other than Fair Value The carrying amounts and estimated fair values of other financial instruments recorded at other than fair value are as follows: June 30, 2026 December 31, 2025 Carrying Value Fair Value Carrying Value Fair Value (millions) Long-term debt, including current maturities (a) $ 6,030 $ 6,216 $ 6,202 $ 6,312 ____________________ (a) At June 30, 2026 and December 31, 2025, approximately $6,203 million and $6,298 million, respectively, of the fair value is estimated using a market approach based on quoted market prices for the same or similar issues (Level 2); the …

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Income Taxes 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. A reconciliation of the income tax benefit and effective tax rate based on the statutory U.S. federal income tax rate is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (millions, except for percentages) Income tax expense (benefit) at U.S. statutory rate of 21% $ 21.0 % $ 3 21.0 % $ (20) 21.0 % $ (71) 21.0 % Increases (reductions) resulting from: Taxes attributable to noncontrolling interests (8) (392.4) (24) (206.2) 10 (10.8) 21 (6.0) State income taxes net of federal income tax expense (benefit) 1 62.9 (7) (59.2) (0.4) (15) 4.4 Clean energy tax credits (5) (271.1) (9) (74.1) (55) 56.5 (14) 4.2 Valuation allowance 10.5 2.6 2 (2.2) 1 (0.2) Other net 1 19.1 (1) (0.8) 1 (0.2) (2) 0.3 Income tax benefit and effective tax rate from continuing operations $ (11) (550.0) % $ (38) (316.7) % $ (62) 63.9 % $ (80) 23.7 % …

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Debt Long-term debt issuances and borrowings by subsidiaries of XPLR during the six months ended June 30, 2026 were as follows: Date Issued/Borrowed Debt Issuances/Borrowings Interest Rate Principal Amount Maturity Date (millions) March 2026 April 2026 Senior secured limited-recourse debt Variable (a) $ 523 (b) 2030 (a) Variable rate is based on an underlying index plus a margin. Interest rate contracts, primarily swaps, have been entered into for the debt borrowings. (b) As of July 28, 2026, approximately $27 million was available under one term loan facility, subject to specified conditions. In June 2026, XPLR repaid the $500 million principal amount of its 2022 convertible notes at maturity. XPLR OpCo and its subsidiaries' secured long-term debt agreements are secured by liens on certain assets and contain provisions which, under certain conditions, could restrict the payment of distributions or related party fee payments. At June 30, 2026, XPLR and its subsidiaries were in compliance with all financial debt covenants under their respective financing agreements …

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Related Party Transactions Each project entered into O&M agreements and ASAs with subsidiaries of NEER whereby the projects pay a certain annual fee plus reimbursable costs incurred in connection with certain O&M and administrative services performed under these agreements. These services are reflected as operations and maintenance in XPLR's condensed consolidated statements of income (loss). Certain projects have also entered into various types of agreements including those related to shared facilities and transmission lines, transmission line easements, technical support and development and construction coordination with subsidiaries of NEER whereby certain fees or cost reimbursements are paid to, or received by, certain subsidiaries of NEER. Costs incurred in connection with development and construction coordination provided by NEER, primarily in connection with wind repowering of approximately $13 million and $51 million during the three and six months ended June 30, 2026, respectively, and $203 million and $525 million during the three and six months ended June 30, 2025, respectively, were capitalized. Remaining costs under these agreements are reflected as operations and maintenance in XPLR's condensed consolidated statements of income (loss). Management Services Agreement Under the MSA, an indirect wholly owned subsidiary of NEE provides operational, management and administrative services to XPLR, including managing XPLRs day-to-day affairs and providing indivi …

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Revenue Revenue is recognized when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. XPLR's operating revenues are generated primarily from various non-affiliated parties under PPAs. XPLR's operating revenues from contracts with customers are partly offset by the net amortization of intangible assets PPAs and intangible liabilities PPAs. Revenue is recognized as energy and any related renewable energy attributes are delivered, based on rates stipulated in the respective PPAs. XPLR believes that the obligation to deliver energy is satisfied over time as the customer simultaneously receives and consumes benefits provided by XPLR. In addition, XPLR believes that the obligation to deliver renewable energy attributes is satisfied at multiple points in time, with the control of the renewable energy attribute being transferred at the same time the related energy is delivered. XPLRs operating revenues for the three and six months ended June 30, 2026 are revenue from contracts with customers for energy sales of approximately $348 million and $611 million, respectively. XPLR's operating revenues for the three and six months ended June 30, 2025 are revenue from contracts with customers for energy sales of approximately $331 million and $602 million, respectively. XPLR's accounts receivable are associated with revenues earned from contracts …

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Summary of Significant Accounting and Reporting Policies Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. XPLR primarily holds such investments in money market funds. Certain cash and cash equivalents are held at the project level for, among other things, debt service and other operational needs. At June 30, 2026 and December 31, 2025, approximately $260 million and $334 million , respectively, relates to cash and cash equivalents held at the project level. Restricted Cash A t June 30, 2026 and December 31, 2025 , XPLR had approximately $61 million and $62 million, respectively, of restricted cash included in current other assets on XPLR's condensed consolidated balance sheets. Restricted cash at June 30, 2026 and December 31, 2025 is primarily related to an operating cash reserve. Restricted cash reported as current assets is recorded as such based on the anticipated use of these funds. Property, Plant and Equipment Property, plant and equipment consists of the following: June 30, 2026 December 31, 2025 (millions) Property, plant and equipment, gross $ 18,964 $ 18,878 Accumulated depreciation (3,779) (3,512) Property, plant and equipment net $ 15,185 $ 15,366 Income Taxes Clean energy tax credits generated during the taxable year can be transferred to an unrelated purchaser for cash and are accounted for under Accounting Standards Codification 740 Income Taxes . Proceeds resulting fr …

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Equity Earnings Per Unit Diluted earnings per unit is calculated based on the weighted-average number of common units and potential common units outstanding during the period, including, when outstanding, the dilutive effect of convertible notes (see Note 7). During periods with dilution, the dilutive effect of the outstanding convertible notes is calculated using the if-converted method. The reconciliation of XPLR's basic and diluted earnings per unit is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (millions, except per unit amounts) Numerator net income (loss) attributable to XPLR: From continuing operations $ 38 $ 87 $ 71 $ (1) From discontinued operations (8) (18) Net income (loss) attributable to XPLR $ 38 $ 79 $ 71 $ (19) Denominator: Weighted-average number of common units outstanding basic 94.3 94.0 94.2 93.8 Effect of dilutive convertible notes (a) Weighted-average number of common units outstanding assuming dilution 94.3 94.0 94.2 93.8 Earnings (loss) per common unit attributable to XPLR basic and assuming dilution: From continuing operations $ 0.40 $ 0.93 $ 0.76 $ (0.01) From discontinued operations (0.09) (0.19) Earnings (loss) per common unit attributable to XPLR basic and assuming dilution $ 0.40 $ 0.84 $ 0.76 $ (0.20) (a) During all periods the outstanding convertible notes were antidilutive and as such were not included in the calculation of diluted earnings per unit. ATM Program XPLR's at-the-market equity issuance pro …

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