What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-14 · 72 added, 69 removed, 237 unchanged (37% of the section changed)

15 unchanged sentences

• increases in interest rates increasing the cost of servicing Rio Grande's indebtedness;

• our reliance on third-party contractors to successfully complete the Rio Grande LNG Facility, the pipeline to supply gas to the Rio Grande LNG Facility and any CCS projects we develop;

• our reliance on third-party contractors to successfully complete the Rio Grande LNG Facility and any CCS projects we develop;

• our ability to develop and implement CCS projects;

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• the development risks, operational hazards and regulatory approvals applicable to our LNG and carbon capture and storage development, construction and operation activities and those of our third-party contractors and counterparties;

• the ability to obtain or maintain governmental approvals to construct or operate the Rio Grande LNG Facility and CCS projects, including in relation to the recent decision by the D.C.

• the ability to obtain or maintain governmental approvals to construct or operate the Rio Grande LNG Facility and CCS projects, including in relation to the August 2024 decision by the D.C.

Circuit Court of Appeals;

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Liquefaction trains 1 through 3 and related infrastructure are currently under construction and liquefaction trains 4 and 5 at the Rio Grande LNG Facility are currently in development.

We are also developing a planned carbon capture and storage (“CCS”) project at the Rio Grande LNG Facility and other potential CCS projects that would be located at third-party industrial facilities.

We are also developing and seeking to commercialize potential carbon capture and storage (“CCS”) projects.

We are constructing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel.

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These SPAs create a stable foundation of predictable, long-term cash flows to Rio Grande.

We believe our SPAs are attractive to our customers for several reasons, including long-term reliable supply, volumes to support growing demand for LNG and to replace customers’ contracts with legacy LNG suppliers, diversification of supply portfolios in terms of geography, price indexation, delivery points, and/or tenor, flexibility of volumes with no destination restrictions, and compatibility of some of our customers’ ESG goals with our expected lower carbon intensity LNG and planned CCS project at the Rio Grande LNG Facility.

We believe our SPAs are attractive to our customers for several reasons, including long-term reliable supply, volumes to support growing demand for LNG and to replace customers’ contracts with legacy LNG suppliers, diversification of supply portfolios in terms of geography, price indexation, delivery points, and/or tenor, flexibility of volumes with no destination restrictions, and the ability of our LNG to help our customers achieve their ESG goals.

Rio Grande expects to sell any commissioning LNG volumes and operational LNG volumes in excess of SPA volumes into the LNG market through spot, short-term, and medium-term agreements.

Rio Grande has entered into certain time charter agreements and expects to enter into additional time charter agreements with vessel owners to provide shipping capacity for LNG sales related to its existing DES SPA, commissioning volumes, and expected portfolio volumes.

Rio Grande will provide a number of services in support of producing and selling LNG from the Rio Grande LNG Facility pursuant to its SPAs, including natural gas feedstock procurement and transportation, liquefaction, and delivery of LNG to customers either at the loading dock of the Rio Grande LNG Facility or at the customer’s global delivery points via chartered vessels.

We are focused on constructing and operating the Rio Grande LNG Facility safely, efficiently, reliably, and sustainably.

We seek to provide a less carbon-intensive and more sustainable LNG through project design, responsibly sourced gas, proposed net-zero power, and our planned CCS project at the Rio Grande LNG Facility.

We also seek to make additional measurable contributions toward a net-zero future by developing CCS projects to reduce greenhouse gas emissions at other industrial facilities.

We will provide a number of services in support of producing and selling LNG from the Rio Grande LNG Facility pursuant to its SPAs, including natural gas feedstock procurement and transportation, liquefaction, and delivery of LNG to customers either at the loading dock of the Rio Grande LNG Facility or at the customer’s global delivery points via chartered vessels.

We are focused on constructing and operating the Rio Grande LNG Facility safely, efficiently, on schedule, and on budget.

We seek to deliver reliable, economically attractive, and sustainable energy solutions through the development and operation of liquefaction and CCS infrastructure.

Unless the context requires otherwise, references to “NextDecade,” “the Company,” “we,” “us,” and “our” refer to NextDecade Corporation and its consolidated subsidiaries, and references to “Rio Grande” refer to Rio Grande LNG, LLC and its subsidiaries.

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• Under the EPC contracts with Bechtel, Phase 1 progress is tracked for Train 1, Train 2, and the common facilities on a combined basis and Train 3 on a separate basis.

As of June 2024:

As of September 2024:

• The overall project completion percentage for Trains 1 and 2 and the common facilities of the Rio Grande LNG Facility was 30.5%, which is in line with the schedule under the EPC contract.

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Aramco and the Company are in the process of negotiating a binding LNG SPA, and once executed, the SPA will be subject to a positive FID on Train 4.

• In August 2024, the Company finalized an EPC contract with Bechtel for Train 4 and related infrastructure for a cost of approximately $4.3 billion.

Price validity under the EPC contract for Train 4 and related infrastructure extends through December 31, 2024.

• In July 2024, the Company appointed Tarik Skeik as Chief Operating Officer.

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He led the completion and start-up of six greenfield assets, and his experience includes the planning and execution through initial operation of projects including the Huizhou Chemicals Complex in China, Gulf Coast Growth Ventures in the US, Banyu Urip in Indonesia, Kearl Expansion in Canada, and QatarGas 2 in Qatar.

• In August 2024, the Company finalized an EPC contract with Bechtel for Train 4 and related infrastructure for a cost of approximately $4.3 billion.

Price validity under the EPC contract for Train 4 and related infrastructure extends through December 31, 2024.

• In January 2024, the Company’s wholly-owned subsidiary NextDecade LLC entered into a credit agreement that provides for a $50 million senior secured revolving credit facility with additional capacity of $12.5 million to cover interest.

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Court of Appeals for the D.C.

Circuit (the “Court”) issued an order vacating the FERC remand authorization of the Rio Grande LNG Facility on the grounds that the FERC should have issued a supplemental Environmental Impact Statement (“EIS”) during its remand process.

Circuit (the “Court”) issued a decision vacating the FERC reauthorization of the Rio Grande LNG Facility on the grounds that FERC should have issued a supplemental Environmental Impact Statement (“EIS”) during its reauthorization process.

On October 21, 2024, the Company filed a petition for rehearing and rehearing en banc with the Court.

• The Court's decision will not be effective until the Court has issued its mandate, which is not expected to occur until after the appeals process has been completed.

• At this time, construction continues on Phase 1 at the Rio Grande LNG Facility.

• The Company is reviewing the Court's decision and assessing all of its options, together with the key project constituencies, including its equity partners and lenders.

The Company expects to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction

on Phase 1 will continue and that necessary regulatory approvals will be maintained to enable the construction of Trains 4 and 5 at the Rio Grande LNG Facility.

• The Company expects to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals will be maintained to enable the FID of Trains 4 and 5 at the Rio Grande LNG Facility.

Rio Grande LNG Facility Activity

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Phase 1 includes three liquefaction trains with a total expected nameplate capacity of approximately 17.6 MTPA, two 180,000 cubic meter full containment LNG storage tanks, two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity, and associated site infrastructure and common facilities including feed gas pretreatment facilities, electric and water utilities, two totally enclosed ground flares for the LNG tanks and marine facilities, two ground flares for the liquefaction trains, roads, levees surrounding the entire site, and warehouses, administrative, operations control room and maintenance buildings.

As of June 2024, progress on Trains 1 through 3 is in line with the schedule under the EPC Contracts.Train 1 deep soil mixing has been completed and foundation pours are underway, including refrigeration compressor foundations.

Additionally, steel erection for Train 1 is in process, and first pipework has been placed in the Train 1 cryogenic rack.

Train 2 deep soil mixing is in process, and delivery of key materials such as large bore above-ground pipe and structural steel has continued.

LNG tank progress has been strong, with excavation, pile leveling, and rebar installation for Tank 1 underway and Tank 2 piling completed.

The permanent water supply for the site has been full constructed and is operational.

As of September 2024, progress on Trains 1 through 3 is in line with the schedule under the EPC Contracts.

Train 1 foundation pours continued during the third quarter with compressor foundations, and the first concrete pour was completed for Train 2.

Pipe work continued to progress on Train 1.

Deep soil mixing for Train 2 continued, and rebar work was completed for the Train 2 main pipe rack.

Work to relocate equipment and begin deep soil mixing is underway for Train 3, and tank wall construction began on Tank 1.

Bechtel has continued to make meaningful progress on procurement for Phase 1, with a focus on completing purchase orders for critical and high-value items early in the construction process.

As of June 2024, Bechtel has issued approximately 92% of the total purchase orders for Trains 1 and 2 and approximately 88% of the total purchase orders for Train 3.

As of September 2024, Bechtel has issued approximately 96% of the total purchase orders for Trains 1 and 2 and approximately 98% of the total purchase orders for Train 3.

LNG Sale and Purchase Agreements

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Natural Gas Transportation and Supply

For Phase 1 of the Rio Grande LNG Facility, Rio Grande has entered into a firm transportation agreement for capacity on the Rio Bravo Pipeline to transport natural gas feedstock to the Rio Grande LNG Facility.

For Phase 1 of the Rio Grande LNG Facility, we have entered into a firm transportation agreement for capacity on the Rio Bravo Pipeline to transport natural gas feedstock to the Rio Grande LNG Facility.

The Rio Bravo Pipeline will be developed by Whistler LLC, a joint venture between WhiteWater, I Squared, MPLX LP, and Enbridge, and will be constructed and operated by WhiteWater.

The Rio Bravo Pipeline will provide Rio Grande access to purchase natural gas supplies in the Agua Dulce area and will connect to six regional intra and interstate pipelines, giving Rio Grande access to prolific gas production from the Permian Basin and Eagle Ford Shale and providing significant flexibility to obtain competitively priced natural gas feedstock.

The Rio Bravo Pipeline will provide access to purchase natural gas supplies in the Agua Dulce area and will connect to multiple regional intra- and interstate pipelines, giving us access to prolific gas production from the Permian Basin and Eagle Ford Shale and providing significant flexibility to obtain competitively priced natural gas feedstock.

The Rio Bravo Pipeline is under development and is expected to be constructed and completed prior to the start of commissioning of Train 1 at the Rio Grande LNG Facility.

Rio Grande has also entered into an agreement for capacity on an interruptible basis with Enbridge’s Valley Crossing Pipeline to provide redundant natural gas transportation capacity to the Rio Grande LNG Facility for commissioning and operations.

We have also entered into an agreement for capacity on an interruptible basis with Enbridge’s Valley Crossing Pipeline to provide redundant natural gas transportation capacity to the Rio Grande LNG Facility for commissioning and operations.

We have entered into and may enter into additional transportation capacity agreements over time as part of our overall gas sourcing strategy to facilitate efficient and economic delivery of natural gas to the Rio Grande LNG Facility.

We have proposed and are in the process of executing on a substantial and diversified natural gas feedstock sourcing strategy to spread risk exposure across multiple contracts, counterparties, and pricing hubs.

We expect to enter into gas supply arrangements with a wide range of suppliers, and we also expect to leverage trading platforms and exchanges to lock in natural gas supply prices and/or hedge risk.

Certain of our LNG offtake counterparties have the option

to sell to Rio Grande some or all of the natural gas required to produce their respective contracted LNG volumes pursuant to structured options which define how much volume can be supplied and how much notice must be provided to switch to and from self-sourcing.

We expect to enter

into gas supply arrangements with a wide range of suppliers, and we also expect to leverage trading platforms and exchanges to lock in natural gas supply prices and/or hedge risk.

Certain of our LNG offtake counterparties have the option to sell to Rio Grande some or all of the natural gas required to produce their respective contracted LNG volumes pursuant to structured options which define how much volume can be supplied and how much notice must be provided to switch to and from self-sourcing.

We believe our proximity to major reserve basins and shale plays, increasing pipeline capacity in the area, a significant amount of natural gas production and infrastructure investment, as well as our existing contacts and discussions with some of the largest regional operators, represent key elements of a comprehensive and effective feed gas strategy.

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The Company has finalized an EPC contract with Bechtel for Train 4 and related infrastructure.

Price validity under the EPC contract for Train 4 and related infrastructure extends through December 31, 2024.

The Company continues to advance commercial discussions with multiple potential counterparties and expects to finalize commercial arrangements for Train 4 in the coming months to support a positive FID on Train 4.

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TotalEnergies also holds an LNG purchase option for 1.5 MTPA for Train 5, and the Rio Grande Phase 1 equity partners have options to invest in Train 5 equity which are materially equivalent to their options to participate in Train 4 equity.

On April 21, 2023, the FERC issued the order on remand (the “Remand Order”) reaffirming the order issued by FERC on November 22, 2019, authorizing the siting, construction and operation of the Rio Grande LNG Facility (the “Order”).

On April 21, 2023, FERC issued the order on remand (the “Remand Order”) reaffirming the order issued by FERC on November 22, 2019, authorizing the siting, construction and operation of the Rio Grande LNG Facility (the “Order”).

The Remand Order reaffirmed that the Rio Grande LNG Facility is not inconsistent with the public interest under the Natural Gas Act Section 3.

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Court of Appeals for the District of Columbia (the “D.C.

Circuit”) dated August 3, 2021, which denied all petitions filed by parties who filed requests for re-hearing of the Order, except for two technical issues dealing with environmental justice and GHG emissions, which were remanded to the FERC for further consideration.

Parties sought rehearing of the Remand Order, which FERC denied by operation of law on June 22, 2023, and subsequently issued a substantive order on the merits upholding the conclusions in the Remand Order, and its reaffirmation of the FERC Order.

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Circuit for review of the Remand Order.

Oral arguments were held on May 17, 2024.

On August 6, 2024, the D.C.

Circuit issued an order vacating FERC's remand authorization of the Rio Grande LNG Facility on the grounds that the FERC should have issued a supplemental EIS during its remand process.

Circuit's decision will not be effective until the appeals process has been completed.

On November 24, 2023, a motion was filed with FERC to stay construction of the Rio Grande LNG Facility, which FERC denied on January 24, 2024.

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On March 1, 2024 the motion to stay was denied by the D.C.

We are reviewing the D.C.

Circuit's decision and evaluating all of our options.

We expect to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals are maintained to enable the construction of Trains 4 and 5 at the Rio Grande LNG Facility.

Oral arguments in the review of the Remand Order were held on May 17, 2024.

On August 6, 2024, the D.C.

Circuit issued a decision vacating FERC's reauthorization of the Rio Grande LNG Facility on the grounds that FERC should have issued a supplemental EIS during its remand process.

On October 21, 2024, the Company filed a petition for

rehearing and rehearing en banc with the D.C.

Circuit's decision will not be effective until the Court has issued its mandate, which is not expected to occur until the appeals process has been completed.

We expect to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals are maintained to enable the FID of Trains 4 and 5 at the Rio Grande LNG Facility.

Corporate and Other Activities

We are required to maintain corporate and general and administrative functions to serve our business activities described above.

We are also in various stages of developing other projects, such as Train 4 and Train 5 at the Rio Grande LNG Facility, additional liquefaction expansions at the Rio Grande LNG Facility, a CCS project at the Rio Grande LNG Facilities, and potential CCS projects at third party industrial facilities.

Financing Activity

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We spent approximately $97.7 million on such development activities year-to-date through FID on July 12, 2023, which we funded through our cash on hand and proceeds from the issuances of equity and equity-based securities.

Following the FID on Phase 1 of the Rio Grande LNG Facility, costs associated with the Phase 1 EPC agreements, Rio Grande site lease, and other Phase 1 related costs are being funded by debt and equity proceeds received by Rio Grande.

Because our businesses and assets are under construction or in development, we have not historically generated significant cash flow from operations, nor do we expect to do so until liquefaction trains at the Rio Grande LNG Facility

begin operating or until we install CCS systems at third-party industrial facilities.

Following the FID on Phase 1 of the Rio

Grande LNG Facility, costs associated with the Phase 1 EPC agreements, Rio Grande site lease, and other Phase 1 related costs are being funded by debt and equity proceeds received by Rio Grande.

We intend to fund development activities for the foreseeable future with cash and cash equivalents on hand and through the sale of additional equity, equity-based or debt securities in us or in our subsidiaries.

There can be no assurance that we will succeed in selling equity or equity-based securities or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.

Our consolidated financial statements as of and for the three and six months ended June 30, 2024 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on our balance of cash and cash equivalents of $38.1 million and available commitments under a revolving loan facility of $26.2 million at June 30, 2024, there is substantial doubt about our ability to continue as a going concern within one year after the date that our consolidated financial statements were issued.

Our consolidated financial statements as of and for the three and nine months ended September 30, 2024 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on our balance of cash and cash equivalents of $38.2 million at September 30, 2024, there is substantial doubt about our ability to continue as a going concern within one year after the date that our consolidated financial statements were issued.

Our ability to continue as a going concern will depend on managing certain operating and overhead costs and our ability to raise capital through equity, equity-based or debt financings.

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The following table summarizes the sources and uses of our cash for the periods presented (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Operating cash flows $ (86,682) (52,627)

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Financing cash flows 1,937,600 1,446,135

Net decrease in cash, cash equivalents and restricted cash (91,399) (22,777)

Net (decrease) increase in cash, cash equivalents and restricted cash (28,680) 383,070

Cash, cash equivalents and restricted cash – beginning of period 294,478 62,789

1 unchanged sentence

Operating Cash Flows

Operating cash outflows during the six months ended June 30, 2024 and 2023 were $22.8 million and $41.2 million, respectively.

The decrease in operating cash outflows during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to cash received in the settlement of derivatives partially offset by an increase in employee costs and professional fees paid to consultants as we construct Phase 1 of the Rio Grande LNG Facility and continue to develop subsequent phases.

Operating cash outflows during the nine months ended September 30, 2024, amounted to $86.7 million, compared to $52.6 million for the same period in 2023.

The increase in 2024 was primarily due to an increase in employee costs and professional fees paid to consultants as we construct Phase 1 of the Rio Grande LNG Facility and continue to develop subsequent phases.

These increases were partially offset by cash received in the settlement of derivatives.

Investing Cash Flows

Investing cash outflows during the six months ended June 30, 2024 and 2023 were $1,374.3 million and $56.5 million, respectively.

Investing cash outflows primarily consist of cash used in the construction of Phase 1 of the Rio Grande LNG Facility.

The increase in investing cash outflows during the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to a positive FID on Phase 1 of the Rio Grande LNG Facility in July 2023 which has carried into 2024.

Investing cash outflows for the nine months ended September 30, 2024, amounted to $1,879.6 million, compared to $1,010.4 million for the same period in 2023.

The increase in 2024 was primarily driven by more extensive construction activity, as construction of Phase 1 of the Rio Grande LNG Facility did not begin until July 2023.

Financing Cash Flows

Financing cash inflows during the six months ended June 30, 2024 and 2023 were $1,305.7 million and $74.9 million, respectively.

Financing cash inflows during the 2024 period are primarily comprised of $2,300.6 million of proceeds from borrowings under Rio Grande's credit facilities and its issuance of senior secured notes and proceeds from the receipt of equity commitments in Intermediate Holdings of $333.3 million, partially offset by debt issuance costs of $36.6 million and repayment of $1,282.0 million of debt using proceeds of the senior secured notes offering during the 2024 period.

Financing cash inflows during the 2023 period were primarily comprised of the sale of Company common stock.

Financing cash inflows for the nine months ended September 30, 2024, totaled $1,937.6 million, compared to $1,446.1 million for the same period in 2023.

The increase in 2024 was primarily driven by a $1,599.9 million increase in debt and equity commitment proceeds and a $438.3 million decrease in debt issuance costs paid compared to the prior year.

This was partly offset by $1,282.0 million in debt repayments and the absence of common stock sales during the current period compared to the prior year.

Results of Operations

The following table summarizes costs, expenses and other income for the periods indicated (in thousands):

For the Three Months Ended June 30, For the Six Months Ended

For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2024

2024 2023 Change 2024 2023 Change

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Total operating loss (49,156) (35,835) (13,321) (126,807) (90,522) (36,285)

Other income (expense):

Derivative gain (loss) 109,067 (87,450) 196,517 367,939 (87,450) 455,389

Other (expense) income:

Derivative (loss) gain (329,733) 240,265 (569,998) 38,206 152,816 (114,610)

Interest expense, net of capitalized interest (15,905) (32,536) 16,631 (67,414) (32,536) (34,878)

1 unchanged sentence

Other, net 1,719 9,950 (8,231) (408) 4,450 (4,858)

Net income (loss) attributable to NextDecade Corporation 2,304 (120,289) 122,593 189,079 (147,636) 336,715

net income attributable to non-controlling interest 34,880 — 34,880 193,309 — 193,309

Net (loss) income attributable to NextDecade Corporation (393,075) 181,844 (574,919) (203,996) 34,208 (238,204)

net (loss) income attributable to non-controlling interest (269,876) 67,204 (337,080) (76,567) 67,204 (143,771)

preferred stock dividends — 7,030 (7,030) — 20,484 (20,484)

Net loss attributable to common stockholders $ (32,576) $ (127,043) $ 94,467 $ (4,230) $ (161,090) $ 156,860

Net loss attributable to common stockholders was $32.6 million, or $(0.13) per common share (basic and diluted) for the three months ended June 30, 2024 compared to a net loss of $127.0 million, or $(0.84) per common share (basic and diluted), for the three months ended June 30, 2023.

The $94.5 million decrease in net loss was primarily a result of derivative gain, partially offset by increases in general and administrative expense, net income attributable to non-controlling interest, loss on debt extinguishment and interest expense, net of capitalized interest.

Derivative gain during the three months ended June 30, 2024 of $109.1 million is primarily due to an increase in forward SOFR rates from March 31, 2024 to June 30, 2024 and cash received in derivative settlements.

General and administrative expense during the three months ended June 30, 2024 increased approximately $7.1 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

Interest expense, net of capitalized interest during the three months ended June 30, 2024 of $26.0 million represents total interest cost on debt of $63.8 million, net of capitalized interest of $37.8 million.

Net income attributable to non-controlling interest during the three and six months ended June 30, 2024 of $34.9 million and $193.3 million, respectively, is due to the sale of equity in Intermediate Holdings in July 2023 and the non-controlling interests share of Intermediate Holdings net income.

Net loss attributable to common stockholders was $4.2 million, or $(0.02) per common share (basic and diluted) for the six months ended June 30, 2024 compared to a net loss of $161.1 million, or $(1.08) per common share (basic and diluted), for the six months ended June 30, 2023.

The $156.9 million decrease in net loss was primarily a result of derivative gain, partially offset by increases in general and administrative expense, net income attributable to non-controlling interest, loss on debt extinguishment and interest expense, net of capitalized interest.

Derivative gain during the six months ended June 30, 2024 of $367.9 million is due to the reversal of derivative liabilities recognized at December 31, 2023, an increase in forward SOFR rates from December 31, 2023 to June 30, 2024 and cash received in derivative settlements.

General and administrative expense during the six months ended June 30, 2024 increased approximately $13.3 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

Interest expense, net of capitalized interest during the six months ended June 30, 2024 of $51.5 million represents total interest cost on debt of $117.4 million, net of capitalized interest of $65.9 million.

Net (loss) income attributable to common stockholders $ (123,199) $ 107,610 $ (230,809) $ (127,429) $ (53,480) $ (73,949)

Net loss attributable to common stockholders was $123.2 million, or $(0.47) per common share (basic and diluted) for the three months ended September 30, 2024 compared to a net income of $107.6 million, or $0.48 per common share (basic and diluted), for the three months ended September 30, 2023.

The $230.8 million decrease was primarily a result of the following:

• General and administrative expenses during the three months ended September 30, 2024 increased approximately $11.5 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

• Derivative losses during the three months ended September 30, 2024 increased approximately $570.0 million compared to the same period in 2023 primarily due to a decrease in forward SOFR rates when compared to the prior period.

• Interest expense, net of capitalized interest during the three months ended September 30, 2024 decreased approximately $16.6 million compared to the same period in 2023 primarily due to an approximate $43.3 million increase in capitalized interest, partially offset by a $26.6 million increase in total interest costs.

• Due to the changes in derivatives losses and interest expense, net of capitalized interest described above, net income attributable to non-controlling interest during the three months ended September 30, 2024 decreased approximately $337.1 million as those activities are a component of Intermediate Holdings net income and loss.

Net loss attributable to common stockholders was $127.4 million, or $(0.49) per common share (basic and diluted) for the nine months ended September 30, 2024 compared to a net loss of $53.5 million, or $(0.31) per common share (basic and diluted), for the nine months ended September 30, 2023.

The $73.9 million increase was primarily a result of the following:

• General and administrative expenses during the nine months ended September 30, 2024 increased approximately $24.8 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

• Derivative gains during the nine months ended September 30, 2024 decreased approximately $114.6 million compared to the same period in 2023 primarily due to a decrease in forward SOFR rates when compared to the prior period.

• Interest expense, net of capitalized interest during the nine months ended September 30, 2024 increased approximately $34.9 million compared to the same period in 2023 primarily due to an approximately $144.4 million increase in total interest costs partially offset by an increase of $109.1 million of capitalized interest.

• Loss on debt extinguishment of $47.6 million during the nine months ended September 30, 2024 due to $1,282.0 million in debt repayments compared to none in the prior year.

• Due to the changes in derivatives losses, interest expense, net of capitalized interest and loss on debt extinguishment described above, net income attributable to non-controlling interest during the nine months ended September 30, 2024 decreased approximately $143.8 million as those activities are a component of Intermediate Holdings net income and loss.

Summary of Critical Accounting Estimates

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis