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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-03-11 · 113 added, 149 removed, 99 unchanged (73% of the section changed)

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Overview of Business

NextDecade Corporation engages in construction and development activities related to the liquefaction and sale of LNG and the capture and storage of CO 2 emissions.

We are constructing and developing a natural gas liquefaction and export facility located in the Rio Grande Valley in Brownsville, Texas (the “Rio Grande LNG Facility”), which currently has three liquefaction trains and related infrastructure (“Phase 1”) under construction, and two additional liquefaction trains 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 through our NEXT Carbon Solutions business.

NextDecade Corporation engages in construction and development activities related to the liquefaction of natural gas and sale of LNG and the capture and storage of CO 2 emissions.

We are constructing and developing a natural gas liquefaction and export facility located in the Rio Grande Valley near Brownsville, Texas (the “Rio Grande LNG Facility”).

The Rio Grande LNG Facility has received Federal Energy Regulatory Commission (“FERC”) approval and Department of Energy (“DOE”) FTA and non-FTA authorizations for the construction of up to five liquefaction trains and LNG exports totaling up to 27 million tonnes per annum (“MTPA”).

Please see "Rio Grande LNG Facility Activity - Governmental Permits, Approvals and Authorizations" for more information regarding our FERC permit.

The Rio Grande LNG Facility has three liquefaction trains and related infrastructure ("Phase 1") under construction and liquefaction trains 4 and 5 are currently being commercialized.

We are also developing and beginning the permitting process for expansion trains 6 through 8 at the Rio Grande LNG Facility and developing a potential carbon capture and storage (“CCS”) project at the Rio Grande LNG Facility.

Overview of Significant Events

Significant developments since January 1, 2024 and through the date of this 10-K include the following:

Development and Construction

• On July 12, 2023, the Company announced a positive FID to construct Phase 1 of the Rio Grande LNG Facility, and Rio Grande issued full notice to proceed (“NTP”) to Bechtel under the EPC contracts for Phase 1.

◦ Expected capital project costs total $18.0 billion and include EPC costs, owner’s costs and contingencies, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland, installation of utilities, and interest during construction and other financing costs..

• 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.

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Within this project completion percentage, engineering was 84.9% complete, procurement was 69.2% complete, and construction was 10.6% complete.

◦ The overall project completion percentage for Train 3 of the Rio Grande LNG Facility was 4.4%, based on preliminary schedules, which is also in line with the schedule under the EPC contract.

◦ The overall project completion percentage for Train 3 of the Rio Grande LNG Facility was 15.3%, which is also in line with the schedule under the EPC contract.

Within this project completion percentage, engineering was 33.5% complete, procurement was 32.8% complete, and construction was 0.4% complete.

• In February 2025, the Company provided additional information regarding its development of additional liquefaction capacity at the Rio Grande LNG Facility.

beyond Trains 1 through 5.

Trains 6 through 8 are wholly owned by NextDecade and are cumulatively expected to increase the Company's total liquefaction capacity by approximately 18 MTPA once constructed and placed into operation.

◦ Train 6, with expected LNG production capacity of approximately 6 MTPA, is being developed inside the existing levee at the site and adjacent to Trains 1 through 5.

A pre-filing application with FERC for Train 6 is expected in 2025, and a full FERC application is expected in early 2026.

◦ Trains 7 and 8, with a total expected LNG production capacity of approximately 12 MTPA, are being developed on the site outside of the existing levee.

Strategic and Commercial

• In January 2023, Rio Grande entered into a 15-year LNG SPA with Itochu Corporation (“Itochu”) for the supply of 1.0 MTPA of LNG, indexed to Henry Hub and sold on a free-on-board (“FOB”) basis from the Rio Grande LNG Facility.

• In June 2023, Rio Grande entered into a 20-year LNG SPA with TotalEnergies SE (“TotalEnergies”) for the supply of 5.4 MTPA of LNG, indexed to Henry Hub and sold on an FOB basis from the Rio Grande LNG Facility.

• We have started the front-end engineering and design (“FEED”) and EPC contract processes with Bechtel for Train 4 and are progressing numerous discussions with potential buyers of LNG to provide commercial support for Train 4.

• In February 2023, we sold approximately 5.8 million shares of our common stock for gross proceeds of $35 million to HGC NEXT INV LLC and Ninteenth Investment Company.

• In June 2023, we entered into a common stock purchase agreement for three private placements with Global LNG North America Corp., an affiliate of TotalEnergies, pursuant to which we sold a total of approximately 44.9 million shares of our common stock for an aggregate purchase price of $219.4 million in three transactions occurring in June, July and September 2023.

• On July 12, 2023, in conjunction with the positive FID of Phase 1 of the Rio Grande LNG Facility, we and certain of our subsidiaries closed an approximately $18.4 billion project financing for Phase 1.

This financing underscores the critical role that LNG and natural gas are expected to play in the global energy transition and included the closing of:

◦ A joint venture agreement which included approximately $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company, and TotalEnergies;

◦ A commitment by the Company to invest approximately $283 million in Phase 1, which was completed in September 2023 and included $125 million of pre-FID capital investments and additional funds contributed from the proceeds of sales of the Company’s common stock to an affiliate of TotalEnergies;

◦ Senior secured non-recourse bank credit facilities of $11.6 billion with a 7-year maturity, consisting of $11.1 billion in construction term loans and a $500 million working capital facility;

◦ An offering of $700 million senior secured non-recourse private placement notes, which will mature in July 2033 and will accrue interest at a fixed rate of 6.67%.

• We hold equity interests in the Phase 1 joint venture that entitle us to receive up to 20.8% of the distributions of available cash during operations.

• Rio Grande has entered into several transactions to refinance a portion of the Phase 1 bank facilities, including:

◦ In September 2023, Rio Grande entered into a credit agreement with a group of lenders for $356 million of senior secured loans to finance a portion of Phase 1.

The senior secured loans were disbursed in one advance of $356 million on September 15, 2023, which resulted in a reduction in the commitments outstanding under Rio Grande’s existing bank credit facilities for Phase 1.

These senior secured loans will mature in July 2033, accrue interest at a fixed rate of 6.72%, and rank pari passu to Rio Grande’s existing senior secured financings.

◦ In December 2023, Rio Grande entered into a credit agreement with a group of lenders for $251 million of senior secured loans to finance a portion of Phase 1.

The senior secured loans were disbursed in one advance of $251 million on December 28, 2023, which resulted in a reduction in the commitments outstanding under Rio Grande’s existing bank credit facilities for Phase 1.

These senior secured loans will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity

in September 2047.

These senior secured loans bear interest at a fixed rate of 7.11% and rank pari passu to Rio Grande’s existing senior secured financings.

◦ In February 2024, Rio Grande issued and sold $190 million of senior secured notes to finance a portion of Phase 1.

• In May 2024, the Company entered into a 20-year LNG SPA with ADNOC for the sale of 1.9 MTPA of LNG from Train 4 at the Rio Grande LNG Facility for 20 years, on a free on board (“FOB”) basis at a price indexed to Henry Hub, subject to a positive FID on Train 4.

• In June 2024, the Company entered into a non-binding Heads of Agreement (HoA) with Aramco for a 20-year LNG SPA for offtake from Train 4 at the Rio Grande LNG Facility.

Under the terms of the HoA, Aramco expects to purchase 1.2 MTPA of LNG for 20 years, on an FOB basis at a price indexed to Henry Hub.

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

Skeik has over 20 years of experience delivering complex global mega projects in LNG, oil and petrochemicals across North America, the Middle East, and Asia.

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 U.S., Banyu Urip in Indonesia, Kearl Expansion in Canada, and QatarGas 2 in Qatar.

• In August 2024, the Company entered into an EPC contract with Bechtel for Train 4 and related infrastructure.

Pricing under the EPC contract for Train 4 and related infrastructure was valid through December 31, 2024, and a pricing refresh is in process and is expected to be completed in 2025.

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

Borrowings under the revolving credit facility were used for general corporate purposes, including development costs related to Train 4 at the Rio Grande LNG Facility.

Borrowings under the revolving credit facility bore interest at SOFR or the base rate plus an applicable margin as defined in the credit agreement.

All outstanding borrowings under the revolving credit facility and interest term loan were repaid in December 2024 utilizing proceeds from the senior secured loan issued in December 2024 and described below.

• In February 2024, Rio Grande issued and sold $190 million of senior secured notes in a private placement transaction to finance a portion of Phase 1.

The senior secured notes were issued on February 9, 2024, and resulted in a reduction in the commitments outstanding under Rio Grande's existing bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity in June 2047.

The senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

• As of December 2023, Rio Grande’s outstanding fixed-rate debt and executed interest rate swaps have reduced its exposure to movements in interest rates for approximately 84% of the debt currently projected to be incurred in support of Phase 1 construction.

• In January 2024, our wholly-owned subsidiary Next Decade LNG, 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.

Borrowings under the revolving credit facility may be used for general corporate purposes, including development costs related to Train 4 at the Rio Grande LNG Facility.

Borrowings bear interest at SOFR or the base rate plus an applicable margin as defined in the credit agreement.

The revolving credit facility and interest term loan mature at the earlier of two years from the closing date or 10 business days after a positive FID on Train 4.

• Rio Grande has syndicated a portion of its bank credit facility commitments, resulting in a supporting lender group of approximately 40 international banks.

These senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

• In June 2024, Rio Grande issued $1.115 billion of senior secured notes in a private placement, and net proceeds were utilized to reduce outstanding borrowings and commitments under existing Rio Grande bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of 18 years beginning in September 2029, with a final maturity in September 2047.

These senior secured notes bear interest at a fixed rate of 6.58% and rank pari passu to Rio Grande's existing senior secured financings.

Including this transaction, the Company has

refinanced a total of over $1.85 billion of the original $11.1 billion Rio Grande term loan facilities since a positive FID was reached on Phase 1 at the Rio Grande LNG Facility in July 2023.

• In December 2024, the Company's wholly-owned subsidiary, Rio Grande LNG Super Holdings, LLC ("Super Holdings"), entered into a credit agreement (the "Corporate Credit Agreement") which provided for a $175 million senior secured loan.

Proceeds from the senior secured loan were disbursed at closing on December 31, 2024, and net proceeds were used to repay outstanding borrowings under the NextDecade LLC January 2024 $50 million revolving credit facility and $12.5 million interest term loan, and will be used to fund working capital and general corporate purposes, including development expenses for expansion trains at the Rio Grande LNG Facility.

Borrowings under the senior secured loan bear interest at 12.0%, with interest payable quarterly.

Interest may be paid in-kind until March 31, 2027 and up to 50% in-kind thereafter.

The senior secured loan matures six years from the closing date.

• In conjunction with the closing of the Corporate Credit Agreement, the Company issued warrants in two equal tranches that are exercisable for an aggregate of approximately 7.2 million shares of NextDecade common stock to the lender of the senior secured loan.

The warrants are exercisable for five years after the closing date.

The first tranche of the warrants are exercisable at $7.15 per share, which represents the 30-day volume weighted average trading price for the 30 trading-day period immediately preceding the closing date, and the second tranche of the warrants are exercisable at $9.30 per share.

• In August 2024, the U.S.

Court of Appeals for the D.C.

Circuit (the "Court") issued a decision vacating FERC's 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 September 13, 2024, FERC issued notice of its intent to prepare a supplemental EIS in response to the Court's decision.

The notice set forth a schedule providing for the issuance of a draft of the supplemental EIS in March 2025, the final supplemental EIS by the end of July 2025, and issuance of a final order by November 20, 2025.

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

On December 9, 2024, petitioners in the case and FERC filed responses to the Company's request for rehearing, and the Court's decision is pending.

• 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 expects to take all available legal and regulatory actions, including appellate actions, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals will be maintained to enable a positive final investment decision (FID) on Trains 4 and 5 at the Rio Grande LNG Facility.

Rio Grande LNG Facility Activity

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The site is located on 984 acres of land which has been leased long-term and includes 15,000 feet of frontage on the Brownsville Ship Channel.

The Rio Grande LNG Facility has received all necessary approvals and authorizations required for construction, including those from the FERC.

We believe the site is advantaged due to its proximity to abundant natural gas resources in the Permian Basin and Eagle Ford Shale, access to an uncongested waterway for vessel loading, and location in a region that has historically been subject to fewer and less severe weather events relative to other locations along the US Gulf Coast.

The Rio Grande LNG Facility has been approved by the FERC and authorized by the DOE to export up to 27 MTPA of LNG from up to five liquefaction trains.

Please see "Rio Grande LNG Facility Activity - Governmental Permits, Approvals and Authorizations" for more information regarding our FERC permit.

Phase 1 at the Rio Grande LNG Facility is under construction, Trains 4 and 5 are currently being commercialized, and we are developing and beginning the permitting process for Trains 6 through 8.

In July 2023, construction commenced on Phase 1 of the Rio Grande LNG Facility following a positive FID and the closing of project financing by Rio Grande, which owns Phase 1 of the Rio Grande LNG Facility.

Phase 1 includes three liquefaction trains with a total expected nameplate capacity of approximately 17.6 MTPA of LNG production, 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.

Phase 1 includes

three liquefaction trains with a total expected nameplate capacity of approximately 18 MTPA of LNG production, 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 development area, and warehouses, administrative, operations control room and maintenance buildings.

As of January 2025, progress on Trains 1 through 3 is in line with the schedule under the EPC contracts.

Recent construction activities have included the start of Train 1 foundation concrete pours, piling activity for the LNG tanks, and construction of the levee and marine offloading facility.

Additionally, the civil works program has progressed via the deep soil mixing program, and meaningful progress has been made on the shoreline restoration program, with the majority of shoreline reclamation nearing completion, shoreline protection work has commenced.

Bechtel has also made meaningful progress on purchase orders for Train 3.

LNG Sale and Purchase Agreements

In January 2023, Rio Grande entered into a 15-year LNG SPA with Itochu Corporation (“Itochu”) for the supply of 1.0 mtpa of LNG, indexed to Henry Hub and sold on a free-on-board (“FOB”) basis from the Rio Grande LNG Facility.

In June 2023, Rio Grande entered into a 20-year LNG SPA with TotalEnergies SE (“TotalEnergies”) for the supply of 5.4 mtpa of LNG, indexed to Henry Hub and sold on an FOB basis from the Rio Grande LNG Facility.

These SPAs, in addition to the other Phase 1 LNG SPAs previously in place, are currently effective, and deliveries of LNG under these SPAs will commence on the respective Date of First Commercial Delivery (“DFCD”), which is primarily tied to the substantial completion of guaranteed substantial completion dates of specific trains as defined in each SPA.

Engineering, Procurement and Construction ( “ EPC ”) Agreements

On July 12, 2023, Rio Grande issued final notice to proceed to Bechtel Energy Inc.

under the EPC agreements for Phase 1.

Total expected capital costs for Phase 1 are estimated to be approximately $18.0 billion, including estimated owner’s costs, contingencies, and financing costs, and including amounts spent prior to FID under limited notices to proceed.

NEXT Carbon Solutions

NEXT Carbon Solutions offers proposed end-to-end CCS solutions for industrial facilities.

Leveraging our team’s engineering and project management experience, we have developed proprietary processes that are expected to lower the capital and operating costs of deploying CCS on industrial facilities.

We expect to partner with customers to invest in the deployment of CCS to reduce and permanently store CO 2 emissions.

We believe that integrating CCS with an industrial facility’s operations has the potential to increase the value of the industrial facility.

Through proposed commercial agreements and investments, NEXT Carbon Solutions will seek to share in the value created from this integration.

Private Placements of Company Common Stock

In February 2023, we sold 5,835,277 shares of Company common stock for gross proceeds of $35 million to HGC NEXT INV LLC and Ninteenth Investment Company.

On June 13, 2023, we entered into a common stock purchase agreement for three private placements (the “TTE Private Placement”) with Global LNG North America Corp., an affiliate of TotalEnergies SE (the “TTE Purchaser”), pursuant to which we agreed to sell (i) 8,026,165 shares (the “Tranche 1 Shares”) of Company common stock at a purchase price of $4.9837 per share, for an aggregate purchase price of $40.0 million, (ii) promptly after conversion of the Convertible Preferred Stock, 22,072,103 shares (the “Tranche 2 Shares”) of Company common stock, at a purchase price of $4.9837 per share, for an aggregate purchase price of $110.0 million, and (iii) promptly after, and conditioned upon, receipt of approval of the Company’s stockholders, a number of shares of Company common stock such that, following the conversion of the Convertible Preferred Stock, the TTE Purchaser will own, when including the Tranche 1 Shares and Tranche 2 Shares, an aggregate of 17.5% of the Company common stock then-outstanding (the “Tranche 3 Shares”).

On June 14, 2023, the Company closed the sale of the Tranche 1 Shares, and on July 26, we closed the sale of the Tranche 2 Shares.

On September 8, 2023, we closed the sale of 14,802,055 shares of common stock (Tranche 3 Shares) for a purchase price of $69.4 million.

FID Equity Transactions

On July 12, 2023, in conjunction with the positive FID to construct Phase 1 of the Rio Grande LNG Facility, Rio Grande LNG Intermediate Super Holdings, LLC, an indirect subsidiary of the Company (the “NextDecade Member”) entered into an amended and restated limited liability company agreement (the “JV Agreement”) of Rio Grande LNG Intermediate Holdings, LLC (“Intermediate Holdings”), and the other members party thereto.

The members of Intermediate Holdings, including the NextDecade Member and subsidiaries of Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company (collectively with GIP and GIC, the “Financial Investors”), and TotalEnergies, committed to fund $6.2 billion in aggregate to Intermediate Holdings.

The NextDecade Member committed to fund cash contributions of approximately $283 million to Intermediate Holdings, including approximately $125 million in contributions paid before FID.

The NextDecade Member completed its remaining equity commitment in September 2023 utilizing proceeds from the sale of common stock to the TTE Purchaser as described above.

FID Debt Transactions

On July 12, 2023, Rio Grande entered into a Credit Agreement (the “CD Credit Agreement”) that provides for the following facilities:

• A construction/term loan in an amount up to $10.3 billion available to partially finance the design, engineering, development, procurement, construction, installation, testing, completion, ownership, operation and maintenance of Phase 1, to pay certain fees and expenses associated with the CD Credit Agreement and the loans made thereunder;

• A revolving loan and letter of credit facility in an amount up to $500 million available to Rio Grande to finance certain working capital requirements of Rio Grande.

On July 12, 2023, Rio Grande entered into the TCF Credit Agreement (the “TCF Credit Agreement”) that provides for a construction/term loan facility in an aggregate amount up to $800 million available to Rio Grande to partially finance the design, engineering, development, procurement, construction, installation, testing, completion,

ownership, operation and maintenance of Phase 1 of the Rio Grande LNG Facility and to pay certain fees and expenses associated with the TCF Credit Agreement and the loans made thereunder.

TotalEnergies Holdings SAS (“Total Holdings”) agreed to provide contingent support to the lenders under the TCF Credit Agreement pursuant to, and subject to the terms and conditions of, a support agreement entered into on July 12, 2023, pursuant to which Total Holdings agreed that it will pay past due amounts owing from Rio Grande under the TCF Credit Agreement upon demand.

On July 12, 2023, Rio Grande entered into a Note Purchase Agreement through which it sold $700 million of 6.67% Senior Secured Notes due 2033 (the “Notes”).

The Notes were issued pursuant to an indenture between Rio Grande and Wilmington Trust, National Association as trustee and accrue interest that is payable semi-annually in arrears on March 30 and September 30 each year, beginning on September 30, 2023.

Conversion of Convertible Preferred Stock, Issuance of Common Stock

In connection with FID of Phase 1, the Company’s convertible preferred stock converted into approximately 59.5 million shares of common stock on July 26, 2023.

Refer to Note 10 — Preferred Stock and Common Stock Warrants for further information.

During the fourth quarter and early 2025, the construction team continued steel assembly in the Train 1 area and adjacent pipe racks.

Within Train 2, foundations were progressed and steel assembly began.

Tank 1 roof panels were set in place, and the first wall concrete pour for Tank 2 was completed.

Across the site, Bechtel’s work also continues on installing underground structures, loading berths, piling, concrete foundations, and other siteworks.

Bechtel has materially completed purchase orders for critical and high-value items for Phase 1.

Trains 4 and 5 at the Rio Grande LNG Facility are being commercialized, and we expect to make a positive final investment decision and commence construction of Trains 4 and 5 and related infrastructure at the Rio Grande LNG Facility, subject to, among other things, maintaining requisite governmental approvals, finalizing and entering into EPC contracts, entering into appropriate commercial arrangements, and obtaining adequate financing to construct each train and related infrastructure.

The Company is developing and beginning the permitting process for additional liquefaction capacity at the Rio Grande LNG Facility.

Financing Activity

Corporate Credit Facility and Senior Secured Loan

In January 2024, NextDecade LLC entered into a credit agreement that provided for a $50 million senior secured revolving credit facility with additional capacity of $12.5 million to cover interest.

Borrowings under the revolving credit facility were used for general corporate purposes, including development costs related to Train 4 at the Rio Grande LNG Facility.

Borrowings under the revolving credit facility bore interest at SOFR or the base rate plus an applicable margin as defined in the credit agreement.

In December 2024, the Company's wholly-owned subsidiary, Rio Grande LNG Super Holdings, LLC ("Super Holdings"), entered into a credit agreement (the "Corporate Credit Agreement") which provided for a $175 million senior secured loan.

Borrowings under the senior secured loan bear interest at 12.0%, with interest payable quarterly.

Interest may be paid in-kind until March 31, 2027 and up to 50% in-kind thereafter.

The senior secured loan matures six years from the closing date.

In conjunction with the closing of the Corporate Credit Agreement, the Company issued warrants in two equal tranches that are exercisable for an aggregate of approximately 7.2 million shares of NextDecade common stock to the lender of the senior secured loan.

The warrants are exercisable for five years after the closing date.

Rio Grande Refinancings

On September 15, 2023, Rio Grande entered into a credit agreement with a group of lenders for $356 million of senior secured loans to finance a portion of Phase 1.

The senior secured loans were disbursed in one advance for $356 million on September 15, 2023, which resulted in a reduction in the commitments outstanding under Rio Grande’s existing bank credit facilities for Phase 1.

These senior secured loans will mature in July 2033, accrue interest at a fixed rate of 6.72%, and rank pari passu to Rio Grande’s existing senior secured financings.

In December 2023, Rio Grande entered into a credit agreement with a group of lenders for $251 million of senior secured loans to finance a portion of Phase 1.

These senior secured loans will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity in September 2047.

These senior secured loans bear interest at a fixed rate of 7.11% and rank pari passu to Rio Grande’s existing senior secured financings.

In February 2024, Rio Grande entered into a note purchase agreement through which it sold $190 million of senior secured notes to finance a portion of Phase 1.

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These senior secured notes will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity in June 2047.

The senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

These senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

In June 2024, Rio Grande issued $1.115 billion of senior secured notes in a private placement, and net proceeds were utilized to reduce outstanding borrowings and commitments under existing Rio Grande bank credit facilities for Phase

These senior secured notes will be amortized over a period of 18 years beginning in September 2029, with a final maturity in September 2047.

These senior secured notes bear interest at a fixed rate of 6.58% and rank pari passu to Rio Grande's existing senior secured financings.

Including this transaction, the Company has refinanced a total of over $1.85 billion of the original $11.1 billion Rio Grande term loan facilities since a positive FID was reached on Phase 1 at the Rio Grande LNG Facility in July 2023.

Liquidity and Capital Resources

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Phase 1 FID Rio Grande Financing

In connection with the FID of Phase 1 of the Rio Grande LNG Facility, Rio Grande obtained approximately $6.2 billion in equity capital commitments, inclusive of commitments from the NextDecade Member, entered into senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private notes offering.

Rio Grande will utilize these capital resources to fund the approximately $18.0 billion total cost of Phase 1, including EPC cost, which was approximately $12.0 billion at FID, and to fund owner’s costs and contingencies, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities, and interest during construction and other financing costs.

In connection with the FID of Phase 1 of the Rio Grande LNG Facility, Rio Grande obtained approximately $6.2 billion in equity capital commitments, inclusive of commitments from NextDecade, entered into senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private notes offering.

Rio Grande will utilize these capital resources to fund the approximately $18.0 billion total cost of Phase 1, including EPC cost, owner’s costs and contingencies, dredging for the improvement project at the Brazos Island Harbor Channel, conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities, and interest during construction and other financing costs.

Near Term Liquidity and Capital Resources of NextDecade Corporation

In connection with the FID of Phase 1, the Company, through NextDecade Member, its wholly owned subsidiary, committed to invest approximately $283 million, including $125 million of pre-FID capital investments, into construction of Phase 1 of the Rio Grande LNG Facility.

As of September 30, 2023, the Company had funded its full equity commitment, utilizing proceeds of the sale of the third tranche of common stock to the TTE Purchaser.

In connection with the FID of Phase 1, the Company, through a wholly owned subsidiary, committed to invest approximately $283 million, including $125 million of pre-FID capital investments, into construction of Phase 1 of the Rio Grande LNG Facility.

As of December 31, 2024, the Company had funded its full equity commitment.

Prior to the FID on Phase 1 of the Rio Grande LNG Facility, our primary cash needs historically were funding development activities in support of the Rio Grande LNG Facility and our CCS projects, which included payments of initial direct costs of the Rio Grande site lease and expenses in support of engineering and design activities, regulatory approvals and compliance, commercial and marketing activities and corporate overhead.

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 of Phase 1 of the Rio Grande LNG Facility, costs associated with the Phase 1 EPC contracts, 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.

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

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 year ended December 31, 2023 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 December 31, 2023, 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.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial condition.

Our capital raising activities since January 1, 2024 have included the following:

• In February 2023, we sold 5,835,277 shares of Company common stock for $35.0 million.

• In June, July and September 2023, we sold 44,900,323 shares of Company common stock in the three tranches of the TTE Private Placement for approximately $219.4 million.

• In January 2024, NextDecade LLC executed a credit agreement that provides for a $50 million revolving credit facility that may be used for general corporate purposes and working capital requirements of NextDecade LLC and its subsidiaries, including development costs related to the fourth liquefaction train and related common facilities at the Rio Grande LNG Facility.

• In January 2024, NextDecade LLC executed a credit agreement that provided for a $50 million revolving credit facility that may be used for general corporate purposes and working capital requirements of NextDecade LLC and its subsidiaries, including development costs related to Train 4 and related common facilities at the Rio Grande LNG Facility.

All outstanding borrowings under the revolving credit facility and interest term loan were repaid in December 2024 utilizing proceeds from the senior secured loan issued in December 2024.

• In December 2024, Rio Grande LNG Super Holdings, LLC executed the Corporate Credit Agreement, which provided for a $175 million senior secured loan that was used to repay outstanding borrowings under the Company's January 2024 $50 million revolving credit facility and $12.5 million interest term loan and may be used to fund working capital and general corporate purposes, including development expenses for expansion trains at the Rio Grande LNG Facility.

Long Term Liquidity and Capital Resources of NextDecade Corporation

We will not receive significant cash flows from Phase 1 of the Rio Grande LNG Facility until it is operational, and the commercial operation date for the first train of Phase 1 is expected to occur in late 2027 based on the schedule under the EPC contracts.

the EPC contracts.

Any future phases of development at the Rio Grande LNG Facility and CCS projects will similarly take an extended period of time to develop, construct and become operational and will require significant capital deployment.

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Net increase in cash, cash equivalents and restricted cash 98,284 231,689

Cash and cash equivalents – beginning of period 62,789 25,552

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

Cash, cash equivalents and restricted cash – end of period $ 392,762 $ 294,478

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Operating cash outflows during the years ended December 31, 2024 and 2023 were $95.6 million and $73.6 million, respectively.

The increase in operating cash outflows in 2023 compared to 2022 was primarily due to an increase in employee costs and professional fees paid to consultants as we prepared for and achieved a positive FID in Phase 1 of the Rio Grande LNG Facility in July 2023.

The increase in operating cash outflows in 2024 compared to 2023 was primarily due to an increase in employee costs and professional fees after achieving a positive FID in Phase 1 of the Rio Grande LNG Facility in July 2023, as we prepare for operations.

Investing Cash Flows

Investing cash outflows during the years ended December 31, 2024 and 2023 were $2,574.2 million and $1,752.8 million, respectively.

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

The increase in investing cash outflows in 2023 compared to 2022 was primarily due to a positive FID in Phase 1 of the Rio Grande LNG Facility, the mobilization of the Bechtel workforce that began in July 2023 and subsequent progress payments made to Bechtel.

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 in 2024 compared to 2023 was primarily due to positive FID in Phase 1 of the Rio Grande LNG Facility, the mobilization of the Bechtel workforce that began in July 2023 and subsequent progress payments made to Bechtel.

Financing Cash Flows

Financing cash inflows during the years ended December 31, 2024 and 2023 were $2,768.1 million and $2,058.1 million, respectively.

Financing cash inflows during 2023 are primarily comprised of proceeds from the issuance of debt of $2,083.0 million, proceeds from the sale of equity in subsidiaries of $457.7 million and proceeds from the sale of Company common stock of $254.4 million.

The cash inflows for 2023 were partially offset by debt and equity issuances costs of $494.3 million, repayment of debt of $233.0 million and shares repurchased related to share-based compensation of $9.6 million.

Financing cash inflows during 2024 are primarily comprised of proceeds from the issuance of debt of $3,523.2 million and proceeds from receipt of equity contributions throughout 2024 of $676.0 million The cash inflows for 2024 were partially offset by debt and equity issuances costs of $72.8 million, repayment of debt of $1,338.2 million, costs associated with repayment of debt of $13.4 million and shares repurchased related to share-based compensation of $6.7 million.

Contractual Obligations

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Operating lease obligations $ 235,547 $ 7,608 $ 19,087 $ 19,263 $ 189,589

Other 2,800 2,800 — — —

Total $ 246,381 $ 10,829 $ 17,137 $ 19,174 $ 199,241

Operating lease obligations relate to the Rio Grande site lease and our office spaces in Houston, Texas and Singapore.

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General and administrative expense 150,109 111,468 38,641

Development expense, net 4,891 4,101 790

Development expense 8,260 4,891 3,369

Lease expense 10,775 6,141 4,634

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Operating loss (171,075) (122,668) (48,407)

Loss on common stock warrant liabilities (1,879) (5,747) 3,868

Derivative loss, net (44,803) — (44,803)

Derivative gain (loss), net 586,541 (44,803) 631,344

Interest expense, net of capitalized interest (87,539) (50,285) (37,254)

Loss on debt extinguishment (49,314) (9,531) (39,783)

Other income, net 7,526 151 7,375

Other (expense) income, net (1,166) 5,647 (6,813)

Net loss attributable to NextDecade Corporation 277,447 (221,640) 499,087

net loss attributable to non-controlling interest (59,379) — (59,379)

net income (loss) attributable to non-controlling interest 339,198 (59,379) 398,577

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

Net loss attributable to common stockholders $ (61,751) $ (182,745) $ 120,994

Our consolidated net loss was $182.7 million, or $(0.94) per common share (basic and diluted), for the year ended December 31, 2023 compared to a net loss of $84.4 million, or $(0.65) per common share (basic and diluted), for the year ended December 31, 2022.

The $98.4 million increase in net loss was primarily a result of increases in general and administrative expense, derivative loss, net, interest expense, net of capitalized interest, and loss on debt extinguishment, discussed separately below.

General and administrative expenses during the year ended December 31, 2023 increased $62.4 million compared to the year ended December 31, 2022, primarily due to an increase in share-based compensation expense of $19.1 million and increases in employee costs and professional fees.

The increase in share-based compensation expense for the year ended December 31, 2023 was primarily due to the recognition of compensation cost on restricted stock awards and units that vested at FID of Phase 1 of the Rio Grande LNG Facility.

Employee costs and professional fees increased during 2023 as we prepared for and achieved a positive FID on Phase 1 of the Rio Grande LNG Facility.

Derivative loss, net during the year ended December 31, 2023 of $44.8 million is due to a decrease in forward SOFR rates from July 12, 2023 to December 31, 2023.

Interest expense, net of capitalized interest during the year ended December 31, 2023 of $50.3 million represents total interest cost on debt of $84.7 million, net of capitalized interest of $34.4 million.

Net loss attributable to non-controlling interest during the year ended December 31, 2023 of $59.4 million is due to the sale of equity in Intermediate Holdings in July 2023 and the non-controlling interests share of Intermediate Holdings net loss.

Net loss attributable to common stockholders was approximately $61.8 million, or $(0.24) per common share (basic and diluted) for the year ended December 31, 2024 compared to a net loss of approximately $182.7 million, or $(0.94) per common share (basic and diluted), for the year ended December 31, 2023.

The approximately $121.0 million decrease was primarily a result of the following:

• General and administrative expenses during the year ended December 31, 2024 increased approximately $38.6 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 year ended December 31, 2024 increased approximately $631.3 million compared to the same period in 2023 primarily due to an increase in forward SOFR rates when compared to the prior period.

• Interest expense, net of capitalized interest during the year ended December 31, 2024 increased approximately $37.3 million compared to the same period in 2023 primarily due to an approximate $178.7 million increase in total interest costs, partially offset by a $141.4 million increase in capitalized interest.

• Loss on debt extinguishment during the year ended December 31, 2024 increased approximately $39.8 million compared to the same period in 2023 due to approximately $1,338.2 million in debt repayments compared to approximately $233.0 million in the prior year.

• Due to the changes in derivatives, interest expense, net of capitalized interest and loss on debt extinguishment described above, net income attributable to non-controlling interest during the year ended December 31, 2024 increased approximately $398.6 million as those activities are a component of Intermediate Holdings net income and loss.

Summary of Critical Accounting Estimates

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Management considers the following to be its most critical accounting estimates that involve significant judgment.

Impairment of Long-Lived Assets

A long-lived asset, including an intangible asset, is evaluated for potential impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable.

Recoverability generally is determined by comparing the carrying value of the asset to the expected undiscounted future cash flows of the asset.

If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value.

We use a variety of fair value measurement techniques when market information for the same or similar assets does not exist.

Projections of future operating results and cash flows may vary significantly from results.

Management reviews its estimates of cash flows on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment.

Derivative Instruments

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Such evaluation may involve significant judgment and the results are based on expected future events or conditions, particularly for those valuations using inputs unobservable in the market.

Our derivative instruments consist of interest rate swaps.

Our derivative instruments primarily consist of interest rate swaps.

We value our interest rate swaps using observable inputs including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data.

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The ultimate fair value of our derivative instruments is uncertain, and we believe that it is reasonably possible that a change in the estimated fair value could occur in the near future as interest rates change.

Share-based Compensation

The assumptions used in calculating the fair value of share-based payment awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment.

As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

For additional information regarding our share-based compensation, see Note 14 — Share-based Compensation of our Notes to Consolidated Financial Statements.

Valuation of Common Stock Warrant Liabilities

The fair value of Common Stock Warrant liabilities is determined using a Monte Carlo valuation model.

Determining the appropriate fair value model and calculating the fair value of Common Stock Warrant requires considerable judgment.

Any change in the estimates used may cause the value to be higher or lower than that reported.

The estimated volatility of our Common Stock Warrants at the date of issuance, and at each subsequent reporting period, is based on our historical volatility.

The risk-free interest rate is based on rates published by the government for bonds with maturity similar to the expected remaining life of the Common Stock Warrants at the valuation date.

The expected life of the Common Stock Warrants is assumed to be equivalent to their remaining contractual term.

The Common Stock Warrants are not traded in an active market and the fair value is determined using valuation techniques.

The estimates may be significantly different from those recorded in the consolidated financial statements because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

All changes in the fair value are recorded in the consolidated statement of operations each reporting period.

For additional information regarding the valuation of Common Stock Warrant liabilities, see Note 10 — Preferred Stock and Common Stock Warrants of our Notes to Consolidated Financial Statements.

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements.

Deferred tax assets and liabilities are included in the Consolidated Financial Statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the current period’s provision for income taxes.

We routinely assess our deferred tax assets and reduce such assets by a valuation allowance if we deem it is more likely than not that some portion or all of the deferred tax assets will not be realized.

assessment requires significant judgment and is based upon our assessment of our ability to generate future taxable income among other factors.

For additional information regarding the valuation of deferred tax assets, see Note 15 — Income Taxes of our Notes to Consolidated Financial Statements.

Recent Accounting Standards

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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-K

Item 7. Management’s Discussion and Analysis