XPLR Infrastructure

Good day and welcome to the Explorer Infrastructure fourth quarter and full year 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Conjie John, Director of Investor Relations. Please go ahead.

Thank you, Danielle. Good morning, everyone, and thank you for joining our fourth quarter and full year 2025 financial results conference call for Explore Infrastructure. With me this morning are Alan Liu, President and Chief Executive Officer of Explore Infrastructure, and Jessica Jeffery, Chief Financial Officer of Explore Infrastructure. Alan will start with opening remarks, and then Jessica will provide an overview of our results and near-term priorities. Our executive team will then be available to answer your questions. On this call, we'll be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release, in the comments made during this conference call, in the risk factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our website, www.xplrinfrastructure.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I'll turn the call over to Alan.

Thank you, Congi. Good morning, everyone. 2025 was a pivotal year for Explore as we transitioned to a capital allocation business model. Our strategy in the near term is focused on simplifying Explore's capital structure and executing on selected investments enabled by our existing portfolio of energy infrastructure assets. We believe executing on this strategy will enhance Explore's financial and strategic flexibility, position Explore to benefit over time from demand growth in the U.S. power markets, and ultimately maximize the long-term value of our assets for unit holders. To that end, a year ago, we presented a plan that called for executing on selected asset sales, addressing near-term debt maturities, buying out certain convertible equity portfolio financings, or CEPIS, and investing in selected wind repowering projects with attractive returns. Today, I'm pleased to report the team has delivered on every major action item we laid out a year ago. First, on operational and financial performance, Explore delivered full-year adjusted EBITDA of $1.88 billion and free cash flow before growth of $746 million. We believe these results reflect the strong underlying cash flow generating capabilities of our assets. We also achieved capital structure simplification objectives by addressing two SEPIPs, which resulted in a reduction of more than $1.1 billion in third-party non-controlling equity interests. We completed the sale of our investments in the Mead pipeline and certain distributed generation assets generating approximately $160 million of net proceeds that were used to support a $250 million reduction in corporate debt issuance previously contemplated for 2026. We achieved planned financing objectives by raising approximately $1.6 billion of project financing commitments to recapitalize certain assets and fund our wind repowering program. We also addressed near-term corporate debt maturities, including pre-funding 2026 maturities with an early notes issuance in November. As a result, we have now completed the financing plan we laid out for 2025 and 2026 and extended the duration of our debt maturity profile. We also made strong progress on our capital investment program. As of today, we have completed nearly 1.3 gigawatts of our previously announced repowering plan with projects achieving commercial operations on time and on budget. All in all, we are pleased with the team's execution thus far. Looking forward, we believe long-term fundamentals continue to improve for existing energy infrastructure assets, particularly those that provide efficient, clean energy. Explore's large and diversified portfolio of power generation assets produce substantial cash flows under long-term contracts with a strong set of credit-worthy customers. So our thesis remains the same. In the near term, retaining the cash flows generated by our portfolio should allow Explore to continue to advance its capital simplification strategy while also maintaining balance sheet strength and prudently managing liabilities. In using retained cash flows to fund selected SEPF buyouts, we plan to continue to reduce third-party investor ownership in assets that are highly valuable and that we believe could provide Explore a future upside. Our cash flows are also supporting selected investments enabled by our existing assets, such as repowering projects that we expect will provide strong risk-adjusted return on capital and enhance the long-term value of our fleet. We believe Explore's relationship with NextEra Energy provides meaningful competitive advantages when it comes to executing on these investments. The long-term service agreements with NextEra Energy, Explore benefits from scale and operations, engineering and construction expertise, and supply chain access. These are advantages that are difficult for standalone platforms to replicate. We believe our strategy, commitment to capital discipline, and strong execution will continue to enhance Explore's financial and strategic flexibility and position it well to realize its upside potential over time. One example of how Explore is unlocking embedded value in its portfolio is through the interconnection sale and battery storage co-investment agreement with Next Energy Resources that we are announcing today. Through this agreement, Explore infrastructure is monetizing surplus interconnection capacity and rights at certain of its existing project sites through sales to Next Energy Resources. Explore will also have the ability to co-invest alongside Next Energy Resources and four of the new battery storage projects co-located with existing Explorer sites. The storage projects, which total 400 megawatts of capacity, have long-dated capacity agreements with investment-grade off-takers and are expected to reach commercial operations by the end of 2027. For Explorer, we believe this agreement creates a clear and capital-efficient way to add up to approximately 200 net megawatts of storage capacity to our portfolio while generating strong project-level equity returns. By using proceeds from the planned sales of interconnection assets and rights to fund its net equity investment in these projects, Explore can generate new cash flow streams with zero expected net corporate capital commitment. Let me talk through in detail how the agreement is structured. Each of the four projects co-located on existing Explore sites is expected to be owned in a joint venture between Explore and Xterra Energy Resources. Explorer has the right to invest up to a 49% ownership stake in each project. If Explorer elects to exercise its co-investment rights across all four projects, its expected net equity contribution is approximately $80 million after receipt of asset-level financing proceeds. To partially fund this investment, Explorer has agreed to sell certain interconnection assets and rights to the four co-located battery storage projects for approximately $31 million. Explorer will also sell additional interconnection assets and rights to a subsidiary of Next Energy Resources to enable a 150-megawatt storage project co-located with Explorer's Palo Duro wind site for approximately $14 million. To fund the balance of its expected net equity contributions, Explorer intends to sell to Next Energy Resources interconnection assets and rights to enable up to 500 megawatts of potential future battery storage projects on different Explorer sites Explore will not have co-investment rights on these additional projects or the storage project co-located at the Palo Duro site. As part of the agreement, Next Energy Resources will provide development, engineering, construction services, as well as equipment to the four joint venture projects, and will fund the balance of total project costs not invested by Explore. This co-investment structure, which is subject to customary conditions, is expected to provide Explore with the flexibility to bring high quality projects to fruition on an accelerated timeline with significantly reduced execution risk and is an efficient pathway to monetize non-cash flow generating surplus interconnection capacity embedded within existing assets. Repowering is another way that Explore enhances the value of its portfolio. Given our execution progress in 2025, today we are updating our previously announced 1.6 gigawatt repowering plan to approximately 2.1 gigawatts through 2030. The 500 megawatts of repowerings added to our current program are expected to deliver strong equity returns and take advantage of a window of opportunity to execute projects that enhance the value and longevity of our fleet. We anticipate that the new wind repowerings will be funded through a combination of retained cash flows and additional project-level financing. While the total repowering opportunity set in Explore's portfolio is larger than the announced additions, We plan to continue to cadence our investments in a manner that maintains our near-term balance sheet priorities while achieving attractive returns. Over time, another way that Explore's portfolio could realize upside is through recontracting at higher prices as our existing power purchase agreements expire. Today, approximately 80% of the megawatt hours that we sell are contracted at prices that are below where the market prices are currently. and where power prices are forecasted to be in the future when contracts mature. Using third-party forecasted power prices to illustrate potential for further upside, the existing portfolio is estimated to be able to deliver more than $200 million of incremental revenue by 2040, recognizing that actual outcomes will depend on market conditions at the time of contract contracting and our execution. In summary, Xplor is a scaled, contracted clean energy infrastructure platform with durable cash flows and a long operating runway. Explore's assets are located across a diverse set of U.S. power markets that are experiencing increasing demand and tight supply. As those dynamics continue to play out, we believe our portfolio has significant embedded value and investment opportunities that can be harvested over time. We are taking actions to ensure Explore is positioned to capture those opportunities as they may arise. With that, let me turn it over to Jessica. who will review the 2025 results in more detail and discuss near-term priorities for the business.