Loading...
•
Dec 31, 2024
NextEra Energy Partners Q4 2024 Earnings Report
XPLR Infrastructure experienced a net loss due to a goodwill impairment charge, but reported a solid adjusted EBITDA. The company announced a strategic repositioning, suspending distributions to unitholders and focusing on reinvesting cash flows.
Key Takeaways
XPLR Infrastructure reported a net loss attributable to XPLR Infrastructure of $101 million for Q4 2024, including a one-time after-tax impairment of goodwill of $194 million. Adjusted EBITDA for the quarter was $483 million. The company is strategically repositioning to reinvest retained cash flows and has suspended distributions to unitholders.
Strategic repositioning to focus on reinvesting retained cash flows in existing assets and other investments.
Suspension of distributions to common unitholders indefinitely to facilitate a business plan without equity issuance.
All convertible equity portfolio financing buyout payments are expected to be paid in cash.
Credit ratings affirmations received from all agencies.
NextEra Energy Partners
NextEra Energy Partners
Forward Guidance
XPLR Infrastructure expects adjusted EBITDA to be roughly flat year-over-year in 2025, with potential impacts from the timing of the Meade pipeline investment sale. For 2026, adjusted EBITDA is expected to be $1.75 billion to $1.95 billion, with free cash flow before growth in the range of $600 million to $700 million.
Positive Outlook
- Expects to complete its previously announced 1.6-GW repowering program by mid-2026.
- Believes there are numerous repowering and co-located storage opportunities within its existing portfolio.
- Expects free cash flow before growth to be in the range of $600 million to $700 million in 2026 and remain relatively consistent through the end of the decade.
- Cumulative free cash flow before growth will exceed the remaining convertible equity portfolio financing buyout options.
- The partnership will have a consistent source of capital which it can invest back in the business at attractive returns.
Challenges Ahead
- Suspending its distribution to common unitholders for an indefinite period.
- Results may be impacted by the timing of the expected sale of the Meade pipeline investment that is currently expected in the fourth quarter 2025.
- The decline in adjusted EBITDA of approximately $105 million is due to the expected sale of the Meade pipeline investment in the fourth quarter of 2025.
- 2025 is a transition year which will have partial impacts of approximately $945 million for convertible equity portfolio financing buyouts, the potential Meade pipeline investment sale and other holdco financings.
- Adjusted EBITDA expectations assume, among other things, normal weather and operating conditions; positive macroeconomic conditions in the U.S.