NextDecade Corp 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements NextDecade Corporation and Subsidiaries Page Report s of Independent Registered Public Accounting Firm (PCAOB ID Number 185 ) 44 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 47 Consolidated Balance Sheets 48 Consolidated Statements of Operations 49 Consolidated Statements of Stockholders’ Equity and Convertible Preferred Stock 50 Consolidated Statements of Cash Flows 51 Notes to Consolidated Financial Statements 52 43 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors NextDecade Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of NextDecade Corporation and subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of operations, stockholders’ equity and convertible preferred stock, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Fair value of interest rate swaps agreements As discussed in Notes 2 and 4 to the consolidated financial statements, the Company recorded a derivatives asset of $488.9 million related to the fair value of level 2 interest rate swaps agreements, which were classified as Level 2 in the fair value hierarchy as of December 31, 2024. The interest rate swaps agreements were valued using an income-based approach based on observable inputs to the valuation model including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data. We identified the assessment of the fair value of the interest rate swaps agreements as a critical audit matter. Specifically, auditor judgment and specialized skills and knowledge were required to evaluate the application of the fair value estimate. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the valuation of interest rate swaps agreements. This included controls related to the application of the discounted cash flows model. We involved valuation professionals with specialized skills and knowledge, who assisted in developing an independent expectation of the fair value of the interest rate swap agreements and comparing such expectation to the Company’s estimate of fair value. 44 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Evaluation of the Company's ability to continue as a going concern As discussed in Notes 1 and 7 to the consolidated financial statements, the Company has historically generated negative cash flows from operations and has an accumulated deficit of $453.5 million as of December 31, 2024. The Company entered into a credit agreement on December 31, 2024, and as of December 31, 2024, had $148.1 million in cash and cash equivalents, which the Company expects will fund its planned operations and development activities for more than one year after the date the consolidated financial statements are issued. We identified the evaluation of the Company’s assessment of its ability to continue as a going concern as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate whether existing conditions and events may raise substantial doubt about the Company’s ability to continue as a going concern for more than one year after the date the consolidated financial statements are issued. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s going concern assessment, including controls related to its evaluation of whether existing conditions and events may raise substantial doubt. We compared the Company’s historical budgeted expenditures to actual results to assess whether the cash and cash equivalents on hand are sufficient to fund the Company’s planned operations and development activities for more than one year after the date the consolidated financial statements are issued. We inspected certain of the Company’s contractual agreements to evaluate potential future commitments. We assessed the Company’s disclosures related to its going concern assessment by comparing the disclosures to the audit evidence obtained. /s/ KPMG LLP We have served as the Company’s auditor since 2024. Houston, Texas February 27, 2025 45 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors NextDecade Corporation: Opinion on Internal Control Over Financial Reporting We have audited NextDecade Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2024, the related consolidated statements of operations, stockholders’ equity and convertible preferred stock, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Controls Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Houston, Texas February 27, 2025 46 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders NextDecade Corporation Opinion on the financial statements We have audited the accompanying consolidated balance sheet of NextDecade Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations, stockholders’ equity and convertible preferred stock, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Going concern The 2023 consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 of the 2023 consolidated financial statements, the Company has incurred operating losses since its inception and management expects operating losses and negative cash flows to continue for the foreseeable future. These conditions, along with other matters as set forth in Note 1 of the 2023 consolidated financial statements, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 of the 2023 consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ GRANT THORTON LLP We served as the Company's auditor from 2018 to 2024. Houston, Texas March 11, 2024 (except for Note 2, Segments, as to which the date is February 27, 2025) 47 NextDecade Corporation Consolidated Balance Sheets (1) (in thousands, except per share data) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 148,137 $ 38,241 Restricted cash 244,625 256,237 Derivatives 16,867 17,958 Prepaid expenses and other current assets 2,943 2,089 Total current assets 412,572 314,525 Property, plant and equipment, net 5,020,003 2,437,733 Operating lease right-of-use assets 166,082 170,827 Deferred financing fees 317,788 389,695 Derivatives 472,057 — Other non-current assets 15,557 11,021 Total assets $ 6,404,059 $ 3,323,801 Liabilities and Equity Current liabilities: Accounts payable $ 244,642 $ 243,129 Operating lease liabilities 2,881 3,143 Accrued and other current liabilities 347,561 306,115 Total current liabilities 595,084 552,387 Operating lease liabilities 144,164 145,962 Derivative liability — 66,899 Debt, net 3,920,425 1,816,301 Other non-current liabilities — 1,818 Total liabilities 4,659,673 2,583,367 Commitments and contingencies (Note 13 ) Equity: Common stock, $ 0.0001 par value, 480.0 million authorized: 260.2 million and 256.5 million outstanding, respectively 26 26 Treasury stock: 3.1 million and 2.2 million respectively, at cost ( 20,916 ) ( 14,214 ) Preferred stock, $ 0.0001 par value, 0.5 million authorized after designation of the convertible preferred stock: none outstanding — — Additional paid-in-capital 852,054 693,883 Accumulated deficit ( 453,523 ) ( 391,772 ) Total stockholders' equity 377,641 287,923 Non-controlling interest 1,366,745 452,511 Total equity 1,744,386 740,434 Total liabilities and equity $ 6,404,059 $ 3,323,801 (1) Amounts presented include balances held by our consolidated variable interest entity, Intermediate Holdings, as further discussed in Note 8, Variable Interest Entity . The accompanying notes are an integral part of these consolidated financial statements. 48 NextDecade Corporation Consolidated Statements of Operations (in thousands, except per share data) Year Ended December 31, 2024 2023 Revenues $ — $ — Operating expenses: General and administrative expense 150,109 111,468 Development expense 8,260 4,891 Lease expense 10,775 6,141 Depreciation expense 1,931 168 Total operating expenses 171,075 122,668 Total operating loss ( 171,075 ) ( 122,668 ) Other income (expense): Derivative gain (loss), net 586,541 ( 44,803 ) Interest expense, net of capitalized interest ( 87,539 ) ( 50,285 ) Loss on debt extinguishment ( 49,314 ) ( 9,531 ) Other (expense) income, net ( 1,166 ) 5,647 Total other income (expense) 448,522 ( 98,972 ) Net income (loss) attributable to NextDecade Corporation 277,447 ( 221,640 ) Less: net income (loss) attributable to non-controlling interest 339,198 ( 59,379 ) Less: preferred stock dividends — 20,484 Net loss attributable to common stockholders $ ( 61,751 ) $ ( 182,745 ) Net loss per common share - basic & diluted $ ( 0.24 ) $ ( 0.94 ) Weighted average shares outstanding - basic & diluted 258,535 194,595 The accompanying notes are an integral part of these consolidated financial statements. 49 NextDecade Corporation Consolidated Statement of Stockholders’ Equity and Convertible Preferred Stock (in thousands) Year Ended December 31, 2024 2023 Total stockholders' equity, beginning balance $ 740,434 $ 54,371 Common stock: Beginning balance 26 14 Issuance of common stock — 6 Preferred stock conversion — 6 Ending balance 26 26 Treasury Stock: Beginning balance ( 14,214 ) ( 4,587 ) Shares repurchased related to share-based compensation ( 6,702 ) ( 9,627 ) Ending balance ( 20,916 ) ( 14,214 ) Additional paid-in-capital: Beginning balance 693,883 289,084 Share-based compensation 20,041 26,600 Issuance of common stock, net — 254,394 Receipt of equity commitments 100,964 174,303 Exercise of common stock warrants 8,571 — Sale of equity in Intermediate Holdings — ( 252,882 ) Warrants issued in connection with Debt (Note 7) 28,595 — Preferred stock dividends — ( 20,484 ) Preferred stock conversion — 222,868 Ending balance 852,054 693,883 Accumulated deficit: Beginning balance ( 391,772 ) ( 230,140 ) Subsidiary deconsolidation due to sale — 629 Net loss ( 61,751 ) ( 162,261 ) Ending balance ( 453,523 ) ( 391,772 ) Total stockholders' equity 377,641 287,923 Non-controlling interest: Beginning balance 452,511 — Receipt of equity commitments 575,036 — Sale of equity in Intermediate Holdings — 511,890 Net income (loss) 339,198 ( 59,379 ) Ending balance 1,366,745 452,511 Total equity, ending balance $ 1,744,386 $ 740,434 Preferred Stock, Series A-C: Beginning balance $ — $ 202,443 Preferred stock dividends — 20,431 Preferred stock conversion — ( 222,874 ) Ending balance $ — $ — The accompanying notes are an integral part of these consolidated financial statements. 50 NextDecade Corporation Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 Operating activities: Net income (loss) attributable to NextDecade Corporation $ 277,447 $ ( 221,640 ) Adjustment to reconcile net loss to net cash used in operating activities Depreciation 1,931 168 Share-based compensation expense 19,907 26,553 Loss on common stock warrant liabilities 2,888 1,879 Derivative (gain) loss ( 586,541 ) 44,803 Derivative settlements 48,676 4,138 Amortization of right-of-use assets 4,745 2,980 Gain on sale of assets — ( 5,712 ) Amortization of debt issuance costs 65,336 41,390 Loss on extinguishment of debt 49,314 9,531 Other 593 26,432 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 854 ) ( 940 ) Accounts payable ( 2,222 ) 4,057 Operating lease liabilities ( 2,060 ) ( 179 ) Accrued expenses and other liabilities 25,255 ( 7,080 ) Net cash used in operating activities ( 95,585 ) ( 73,620 ) Investing activities: Acquisition of property, plant and equipment ( 2,567,801 ) ( 1,737,636 ) Acquisition of other non-current assets ( 6,404 ) ( 15,164 ) Net cash used in investing activities ( 2,574,205 ) ( 1,752,800 ) Financing activities: Proceeds from debt issuance 3,523,243 2,083,000 Receipt of equity commitments 676,000 457,659 Proceeds from sale of common stock — 254,400 Repayment of debt ( 1,338,243 ) ( 233,000 ) Costs associated with repayment of debt ( 13,423 ) — Debt and equity issuance costs ( 72,801 ) ( 494,270 ) Preferred stock dividends — ( 53 ) Shares repurchased related to share-based compensation ( 6,702 ) ( 9,627 ) Net cash provided by financing activities 2,768,074 2,058,109 Net increase in cash, cash equivalents and restricted cash 98,284 231,689 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 Year Ended December 31, 2024 2023 Cash and cash equivalents $ 148,137 $ 38,241 Restricted cash 244,625 256,237 Total cash, cash equivalents and restricted cash per Consolidated Balance Sheet $ 392,762 $ 294,478 The accompanying notes are an integral part of these consolidated financial statements. 51 NextDecade Corporation Notes to Consolidated Financial Statements Note 1 — Background and Basis of Presentation NextDecade Corporation, a Delaware corporation, is a Houston-based energy company primarily engaged 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 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 five liquefaction trains and LNG exports totaling 27 million tonnes per annum (“MTPA”). The Rio Grande LNG Facility has three liquefaction trains and related infrastructure (“Phase 1”) under construction while liquefaction trains 4 and 5 are currently being commercialized. We are also developing and seeking to commercialize potential carbon capture and storage (“CCS”) projects. 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. On August 6, 2024, the U.S. Court of Appeals for the D.C. Circuit (the “Court”) issued a decision vacating the FERC’s reauthorization 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. 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. Basis of Presentation Our Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to conform prior period information to the current presentation. The reclassifications did not have a material effect on the Company's financial position, results of operations or cash flows. In the fourth quarter we changed the presentation of certain amounts previously presented as additional paid-in-capital to be presented as non-controlling interest, which did not change total equity or otherwise materially change the consolidated financial statements. The Company's consolidated financial statements have been prepared assuming it will continue as a going concern. The going concern assumption contemplates the continuity of operations, and the realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company has generated negative cash flows from operations and has an accumulated deficit as of December 31, 2024. The Company believes the conditions and events, which previously raised substantial doubt about its ability to continue as a going concern, no longer exist following the execution of the credit agreement (the “Corporate Credit Agreement”), as disclosed in Note 7 – Debt. Accordingly, its current cash and cash equivalents will be sufficient to fund its operations for at least the next 12 months after the date the consolidated financial statements are issued. Note 2 — Summary of Significant Accounting Policies Variable Interest Entities (“VIEs”) and Non-Controlling Interests The Company makes a determination at the inception of each arrangement whether an entity in which the Company has made an investment, sold equity in a subsidiary or in which it has other variable interests is considered a VIE. Generally, an entity is a VIE if either (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity's investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when it is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that has the power to make decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that in either case, could be potentially significant to the VIE. When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the entity are included in the Company's Consolidated Financial Statements. For those consolidated entities in which the Company owns less than 100%, the Company records a non-controlling interest as a component of equity in the Consolidated Balance Sheets, which represent the third party ownership in the net assets of the respective consolidated subsidiary. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net loss attributable to non-controlling interest on the Consolidated Statements of Operations. 52 NextDecade Corporation Notes to Consolidated Financial Statements Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. Management evaluates its estimates and related assumptions on a regular basis. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates . Concentrations of Cash We maintain cash balances and restricted cash at financial institutions, which may, at times, be in excess of federally insured levels. We have not incurred losses related to these balances to date. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in Restricted cash on our Consolidated Balance Sheets. Property, Plant and Equipment Fixed assets are recorded at cost. We depreciate our property, plant and equipment, excluding land, using the straight-line depreciation method over the estimated useful life of the asset. Upon retirement or other disposition of property, plant and equipment, the cost and related accumulated depreciation are removed, and the resulting gains or losses are recorded in our Consolidated Statements of Operations. Management tests property, plant and equipment for impairment whenever there are indicators that the carrying amount of property, plant and equipment might not be recoverable. Derivative Instruments The Company uses derivative instruments to hedge its exposure to cash flow variability from interest rate risk. Derivative instruments are recorded at fair value and included in the Consolidated Balance Sheets as current or non-current assets or liabilities depending on the derivative position and the expected timing of settlement. Leases The Company determines if a contractual arrangement represents or contains a lease at inception. Operating leases with lease terms greater than twelve months are included in Operating lease right-of-use assets and Operating lease liabilities in the Consolidated Balance Sheets. Operating lease right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The right-of-use assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has lease arrangements that include both lease and non-lease components. The Company accounts for non-lease components separately from the lease component. Warrants The Company determines the accounting classification of warrants that are issued, as either liability or equity, by first assessing whether the warrants meet liability classification in accordance with Accounting Standards Codification (“ASC”) 480 Distinguishing Liabilities from Equity (“ASC 480”), and then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815-40”). Under ASC 480, warrants are considered liability classified if the warrants are mandatorily redeemable, obligate the issuer to settle the warrants or the underlying shares by paying cash or other assets, or must or may require settlement by issuing a variable number of shares. If warrants do not meet liability classification under ASC 480, the Company assesses the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash or a variable number of shares are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature. If the warrants do not require liability classification under ASC 815-40, in order to conclude equity classification, the Company assesses whether the warrants are indexed to our common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP. After all relevant assessments are made, the Company concludes whether the warrants are classified as liability or equity. Liability classified warrants are required to be accounted for at fair value both on the date of issuance and on subsequent accounting period ending dates, with all changes 53 NextDecade Corporation Notes to Consolidated Financial Statements in fair value after the issuance date recorded in the statements of operations as a gain or loss. Equity classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. Debt Discounts, fees and expenses incurred with the issuance of debt are amortized over the term of the debt. These amounts are presented as a reduction of our indebtedness on the accompanying Consolidated Balance Sheets. See Note 7 , Debt , for additional details. Fair Value of Financial Instruments The Company uses three levels of the fair value hierarchy of inputs to measure the fair value of an asset or a liability. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Level 3 inputs are inputs that are not observable in the market. The Company is subject to all three levels of the fair value hierarchy. Net Loss Per Share Basic net loss per share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share reflects potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive. Share-based Compensation We recognize share-based compensation at fair value on the date of grant. The fair value is recognized as expense over the requisite service period using the straight-line method. For equity-classified share-based compensation awards, compensation cost is recognized based on the grant-date fair value using the quoted market price of our common stock and not subsequently remeasured. The fair value is recognized as expense, net of any capitalization, using the straight-line basis for awards that vest based on service conditions and using the graded-vesting attribution method for awards that vest based on performance conditions. We estimate the service periods for performance awards utilizing a probability assessment based on when we expect to achieve the performance conditions. For liability classified share-based compensation awards, compensation cost is initially recognized on the grant date using estimated payout levels. Compensation cost is subsequently adjusted quarterly to reflect the updated estimated payout levels based on the changes in our stock price. We account for forfeitures as they occur. Income Taxes 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. A valuation allowance is recorded to reduce the carrying value of our net deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will expire before realization of the benefit or future deductibility is not probable. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the tax position. Segments The Company’s chief operating decision maker, the Chief Executive Officer, allocates resources and assesses financial performance on a consolidated basis. As such, for purposes of financial reporting under U.S. GAAP during the years ended December 31, 2024 and 2023, the Company operated as a single operating segment. As the Company is a single operating segment, our segment profit or loss, assets and expenditures for additions to long-lived assets are reported as part of our consolidated financial statements. The Company does not currently generate revenues, and it is not expected to until Phase 1 operations commence. The Company has adopted ASU 2023-07, “ Segment Reporting (Topic 280) ”, effective retrospectively for the year ended December 31, 2024. 54 NextDecade Corporation Notes to Consolidated Financial Statements Note 3 — Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): December 31, 2024 2023 Rio Grande LNG Facility under construction $ 5,009,239 $ 2,431,389 Corporate and other 12,742 7,518 Total property, plant and equipment, at cost 5,021,981 2,438,907 Less: accumulated depreciation ( 1,978 ) ( 1,174 ) Total property, plant and equipment, net $ 5,020,003 $ 2,437,733 Note 4 — Derivatives In July 2023, Rio Grande entered into interest rate swaps agreements (the “Swaps”) to protect against interest rate volatility by hedging a portion of the floating-rate interest payments associated with the credit facilities described in Note 7 — Debt . In June 2024, Rio Grande reduced the maximum notional amount associated with the Swaps by approximately $ 583.1 million, which resulted in a realized derivative gain of $ 30.9 million. As of December 31, 2024, Rio Grande has the following Swaps outstanding (in thousands): Initial Notional Amount Maximum Notional Amount Maturity (1) Weighted Average Fixed Interest Rate Paid Variable Interest Rate Received $ 123,000 $ 7,916,900 2048 3.4 % USD - SOFR (1) Swaps have an early mandatory termination date in July 2030. The Swaps are not designated as cash flow hedging instruments, and changes in fair value are recorded within our Consolidated Statements of Operations. The Company values the Swaps using an income-based approach based on observable inputs to the valuation model including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data. The fair value of the Swaps is approximately $ 488.9 million as of December 31, 2024, and is classified as Level 2 in the fair value hierarchy. Note 5 — Leases The Company commenced the Rio Grande LNG Facility site lease on July 12, 2023 and it has an initial term of 30 years. The Company has the option to renew and extend the term of the lease for up to two consecutive renewal periods of ten years each, but as the Company is not reasonably certain that those options will be exercised, none are recognized as part of our right of use assets and lease liabilities. The Company has also entered into an office space lease which expires on December 31, 2035, and does not include any options for renewal. For the years ended December 31, 2024 and 2023, our operating lease costs were $ 10.8 million and $ 6.1 million, respectively. 55 NextDecade Corporation Notes to Consolidated Financial Statements Maturity of operating lease liabilities as of December 31, 2024 are as follows (in thousands, except lease term and discount rate): 2025 $ 7,608 2026 9,522 2027 9,565 2028 9,609 2029 9,654 Thereafter 189,589 Total undiscounted lease payments 235,547 Discount to present value ( 88,502 ) Present value of lease liabilities $ 147,045 Weighted average remaining lease term - years 26.8 Weighted average discount rate - percent 4.1 Other information related to our operating leases is as follows (in thousands): Year Ended December 31, 2024 2023 Operating cash flows for amounts paid included in the measurement of operating lease liabilities $ 8,022 $ 3,122 Noncash right-of-use assets recorded for new operating lease liabilities during the period — 147,727 Note 6 — Accrued and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2024 2023 Rio Grande LNG Facility costs $ 276,137 $ 268,821 Accrued interest 40,911 20,392 Employee compensation expense 13,425 9,270 Other accrued liabilities 17,088 7,632 Total accrued and other current liabilities $ 347,561 $ 306,115 56 NextDecade Corporation Notes to Consolidated Financial Statements Note 7 — Debt Debt consisted of the following (in thousands): December 31, 2024 2023 Senior Secured Notes and Loans: 6.67 % Senior Secured Notes due 2033 $ 700,000 $ 700,000 6.85 % Senior Secured Notes due 2047 190,000 — 6.58 % Senior Secured Notes due 2047 1,115,000 — 6.72 % Senior Secured Loans due 2033 356,000 356,000 7.11 % Senior Secured Loans due 2047 251,000 251,000 Total Senior Secured Notes and Loans 2,612,000 1,307,000 12.00 % Corporate Credit Agreement due 2030 175,000 — Credit Facilities: CD Senior Working Capital Facility — — CD Credit Facility 1,022,000 484,000 TCF Credit Facility 226,000 59,000 Total Credit Facilities 1,248,000 543,000 Total debt 4,035,000 1,850,000 Unamortized debt issuance costs ( 114,575 ) ( 33,699 ) Total debt, net $ 3,920,425 $ 1,816,301 Senior Secured Notes and Loans The 6.67 % Senior Secured Notes, 6.85 % Senior Secured Notes and 6.58 % Senior Secured Notes (collectively, the “Senior Secured Notes”) as well as the 6.72 % Senior Secured Loans and 7.11 % Senior Secured Loans (collectively, the “Senior Secured Loans”) are senior secured obligations of Rio Grande, ranking senior in right of payment to any and all of Rio Grande’s future indebtedness that is subordinated to the Senior Secured Notes and the Senior Secured Loans, and equal in right of payment with Rio Grande’s other existing and future indebtedness that is senior and secured by the same collateral securing the Senior Secured Notes and Senior Secured Loans. The Senior Secured Notes and Senior Secured Loans are secured on a first-priority basis by a security interest in all of the membership interests in Rio Grande and substantially all of Rio Grande’s assets, on a pari passu basis with the CD Credit Agreement and the TCF Credit Facility. Corporate Credit Agreement On December 31, 2024, Super Holdings, a wholly-owned subsidiary of the Company, entered into a credit agreement (the “Corporate Credit Agreement”) to borrow an aggregate principal amount of $ 175.0 million. The Corporate Credit Agreement matures on December 31, 2030 and bears a fixed annual interest rate of 12.0 % which is payable quarterly. The Company may elect to add to the outstanding principal as paid-in-kind interest with respect to the first eight interest payment dates and may elect 50 % as paid-in-kind interest of each interest payment date thereafter. The Company may prepay the principal of the Corporate Credit Agreement, plus any unpaid interest, as follows: Prepayment Prior To (1) % of Principal December 31, 2026 100.0 % December 31, 2027 105.0 % December 31, 2028 102.5 % December 31, 2030 100.0 % (1) Prepayment prior to December 31, 2026 would require an additional make whole premium. In conjunction with the Corporate Credit Agreement, we issued to the lender warrants to purchase 7.2 million shares of our common stock (the “Warrants”). The relative fair value of the Warrants of approximately $ 28.6 million has been recognized as a discount to the Corporate Credit Agreement. For more information about the Warrants, see Note 9 , Stockholders’ Equity . 57 NextDecade Corporation Notes to Consolidated Financial Statements Credit Facilities Below is a summary of our committed credit facilities as of December 31, 2024 (in thousands): CD Senior Working Capital Facility CD Credit Facility TCF Credit Facility Total facility size $ 500,000 $ 8,448,000 $ 800,000 Less: Outstanding balance — 1,022,000 226,000 Letters of credit issued 217,225 — — Available commitment $ 282,775 $ 7,426,000 $ 574,000 Priority ranking Senior secured Senior secured Senior secured Interest rate on outstanding balance SOFR plus margin of 2.25 % SOFR plus margin of 2.25 % SOFR plus margin of 2.25 % Commitment fees on undrawn balance 0.68 % 0.68 % 0.68 % Maturity date July 12, 2030 July 12, 2030 July 12, 2030 The obligations of Rio Grande under the CD Senior Working Capital Facility and CD Credit Facility are secured by substantially all of the assets of Rio Grande as well as a pledge of all of the membership interests in Rio Grande on a first-priority, pari passu basis with the Senior Secured Notes, the Senior Secured Loans and the loans made under the TCF Credit Facility. The obligations of Rio Grande under the TCF Credit Agreement are secured by substantially all of the assets of Rio Grande as well as a pledge of all of the membership interests in Rio Grande on a first-priority, pari passu basis with the Senior Secured Notes, the Senior Secured Loans and the loans made under the CD Credit Agreement. Total Energies Holdings SAS provides contingent credit support to the lenders under the TCF Credit Agreement to pay past due amounts owing from Rio Grande under the agreement upon demand. Restrictive Debt Covenants The CD Credit Facility and the TCF Credit Facility (collectively, the “Rio Grande Facilities”) include certain covenants and events of default customary for project financings, including a requirement that interest rates for a minimum of 75 % of the projected and outstanding principal amount be hedged or have fixed interest rates. The Rio Grande Facilities, the Senior Secured Loans, and Senior Secured Notes require Rio Grande to maintain a historical debt service coverage ratio of at least 1.10 :1.00 at the end of each fiscal quarter starting from the initial principal payment date. With respect to certain events, including a change of control event and receipt of certain proceeds from asset sales, events of loss or liquidated damages, the Senior Secured Notes and Senior Secured Loans requires Rio Grande to make an offer to repay the amounts outstanding at 101 % (with respect to a change of control event) or par (with respect to each other event). The Corporate Credit Agreement permits subsidiaries of Super Holdings to incur indebtedness to fund project-level equity in support of the construction of the fourth and fifth liquefaction trains of the Rio Grande LNG Facility, subject to the terms and conditions provided therein, including that Super Holdings make an offer to prepay the Corporate Credit Agreement in full at par plus accrued and unpaid interest. As of December 31, 2024, Rio Grande was in compliance with all covenants related to its respective debt agreements. 58 NextDecade Corporation Notes to Consolidated Financial Statements Debt Extinguishments As of December 31, 2024, the Company has made repayments of $ 1,338.2 million. As a result of these repayments, the Company recognized an approximate $ 49.3 million loss on extinguishment for the year ended December 31, 2024. Debt Maturities Years Ending December 31, Principal Payments 2025 - 2029 $ — Thereafter 4,035,000 Total $ 4,035,000 Interest Expense Total interest expense, net of capitalized interest, consisted of the following (in thousands): Year Ended December 31, 2024 2023 Interest per contractual rate $ 194,873 $ 43,268 Amortization of debt issuance costs 65,336 41,390 Other interest costs 3,148 — Total interest cost 263,357 84,658 Capitalized interest ( 175,818 ) ( 34,373 ) Total interest expense, net of capitalized interest $ 87,539 $ 50,285 Fair Value Disclosures The following table shows the carrying amount and estimated fair value of our debt (in thousands): December 31, 2024 December 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Secured Notes $ 2,005,000 $ 1,984,836 $ 700,000 $ 743,593 Senior Secured Loans 607,000 609,082 607,000 632,998 Corporate Credit Agreement 175,000 169,750 — — The fair value of the Company's Senior Secured Notes, Senior Secured Loans and Corporate Credit Agreement represent Level 2 instruments in the fair value hierarchy. The fair value of the Company’s CD Credit Facility and TCF Credit Facility approximates its' carrying amount due to its variable interest rate, which approximates a market interest rate. Note 8 — Variable Interest Entity Intermediate Holdings and its wholly owned subsidiaries, including Rio Grande, have been formed to undertake Phase 1 of the construction and operation of the Rio Grande LNG Facility. The Company is not obligated to fund losses of Intermediate Holdings, however, the Company's capital account, which would be considered in allocating the net assets of Intermediate Holdings were it to be liquidated, continues to share in losses of Intermediate Holdings. Further, Rio Grande has granted the Company decision-making rights regarding the construction of Phase 1 of the Rio Grande LNG Facility and key aspects of its operation, which may only be terminated by equity holders for cause, via agreements with NextDecade LLC. Due to the foregoing, the Company determined that it holds a variable interest in Rio Grande through Intermediate Holdings and is its primary beneficiary, and therefore consolidates Intermediate Holdings in these Consolidated Financial Statements. The following table presents the summarized assets and liabilities (in thousands) of Intermediate Holdings, which are included in the Company's Consolidated Balance Sheets. The assets in the table below may only be used to settle the obligations of Rio Grande. In addition, there is no recourse to us for the consolidated VIE’s liabilities. The assets and liabilities in the table below include assets and liabilities of Intermediate Holdings and its subsidiaries only and exclude 59 NextDecade Corporation Notes to Consolidated Financial Statements intercompany balances between Intermediate Holdings and NextDecade, which are eliminated in the Consolidated Financial Statements of NextDecade. December 31, 2024 2023 Assets Current assets: Restricted cash $ 244,625 $ 256,237 Derivatives 16,867 17,958 Prepaid expenses and other current assets 1,084 108 Total current assets 262,576 274,303 Property, plant and equipment, net 5,007,345 2,428,583 Operating lease right-of-use assets 153,679 157,053 Deferred financing fees 317,788 389,695 Derivatives 472,057 — Other non-current assets 15,407 9,374 Total assets $ 6,228,852 $ 3,259,008 Liabilities Current liabilities: Accounts payable $ 242,689 $ 238,582 Accrued liabilities and other current liabilities 321,162 288,779 Operating leases 2,649 2,554 Total current liabilities 566,500 529,915 Operating leases 129,253 131,901 Derivatives — 66,899 Debt, net 3,788,802 1,816,301 Total liabilities $ 4,484,555 $ 2,545,016 Note 9 — Stockholders' Equity As discussed in Note 7 , Debt , on December 31, 2024 (the “Issuance Date”), the Warrants were issued in two tranches giving the lender the right to purchase up to approximately 3.6 million shares of our common stock at $ 7.15 per share (“Tranche A”) and an additional approximately 3.6 million shares of our common stock at $ 9.30 per share (“Tranche B”). The Warrants may be exercised by the holder solely on a cashless exercise basis at any time prior to December 31, 2029. The Company, at its discretion, may cause Tranche A to be exercised on a cash exercise basis (i) on any date between June 30, 2026 and December 31, 2026, if the 30-day volume weighted average trading price (“VWAP”) of the Company equals or exceeds $ 13.50 per share and the closing price for the Company's common stock exceeds such VWAP immediately prior to the date of exercise, or (ii) on any date between January 1, 2027 and July 1, 2027, if the 30-day VWAP for the Company's common stock equals or exceeds $ 15.00 per share and the closing price of the Company's common stock exceeds such VWAP immediately prior to the date of exercise, provided that in each case (a) a final investment decision on the fourth liquefaction train of the Rio Grande LNG Facility has been taken and (b) certain liquidity conditions regarding the holders ability to sell the shares of the Company's common stock have been met. The Warrants were valued using a Monte Carlo model that resulted in a relative fair value of approximately $ 28.6 million on the Issuance Date and are not subject to subsequent remeasurement. The Warrants have been classified as equity and are recognized within Additional paid-in capital on our Consolidated Balance Sheets. 60 NextDecade Corporation Notes to Consolidated Financial Statements Note 10 — Net Loss Per Share Potentially dilutive securities not included in the diluted net loss per share computations because their effect would have been anti-dilutive were as follows (in thousands): Year Ended December 31, 2024 2023 Unvested stock and stock units (1) 8,348 4,842 Common stock warrants 798 1,548 Total potentially dilutive common shares 9,146 6,390 (1) Includes the impact of unvested shares containing performance conditions to the extent that the underlying performance conditions are satisfied based on actual results as of the respective dates. Note 11 — Share-based Compensation We have granted restricted stock and restricted stock units (collectively, “Restricted Stock”), as well as unrestricted stock and stock options, to employees, consultants and non-employee directors under our 2017 Omnibus Incentive Plan. For the years ended December 31, 2024 and 2023, the Company recognized approximately $ 19.9 million and $ 26.6 million, respectively, of share-based compensation expense related to all share-based awards. As of December 31, 2024, unrecognized compensation expense, based on the grant date fair value, for all share-based awards totaled approximately $ 53.6 million, of which $ 39.8 million is expected to be recognized over a weighted-average period of 1.5 years. Restricted Stock Upon the vesting of restricted stock, shares of common stock will be released to the grantee. Upon the vesting of certain restricted stock units, the units will be converted into shares of common stock and released to the grantee. As of December 31, 2024, there was no Restricted Stock that would be required to be settled in cash. As of December 31, 2024, we had approximately 8.8 million shares of service-based Restricted Stock outstanding and 4.5 million shares of performance-based Restricted Stock. The fair value of the Restricted Stock was established by the market price on the date of grant and, for service-based awards, is being recognized as compensation expense ratably over the vesting term. The table below provides a summary of our Restricted Stock transactions for the year ended December 31, 2024 (in thousands, except for per share information): Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2024 12,812 $ 4.72 Granted 3,832 4.75 Vested ( 3,176 ) 4.60 Forfeited ( 183 ) 5.71 Unvested at December 31, 2024 13,285 $ 4.71 Stock Options During the year ended December 31, 2024, certain 2017 Plan participants were granted non-qualified options to purchase shares of common stock. Stock options were granted at an exercise price of $ 10.00 , which was above the market price of the common stock on the date of grant. Stock options vest after three years of service or as otherwise set forth in the underlying award agreement. Vested options shall be exercisable at such time and under such conditions set forth in the underlying award agreement, but in no event shall any option be exercisable later than the tenth anniversary of the date of grant. 61 NextDecade Corporation Notes to Consolidated Financial Statements The following table provides a summary of our stock option transactions for the year ended December 31, 2024 (stock options in thousands): Stock Options Weighted Average Exercise Price Outstanding at January 1, 2024 — $ — Granted 1,479 10.00 Exercised — — Forfeited — — Outstanding at December 31, 2024 1,479 $ 10.00 Exercisable at December 31, 2024 — $ — The fair value of each stock option award was estimated using the Black-Scholes option pricing model which resulted in a grant date fair value of $ 2.69 . Valuation assumptions used to determine the grant date fair value were as follows: Expected term (in years) 6.5 Expected volatility 76.0 % Expected dividend yield — % Risk-free rate 3.8 % Due to our limited history, the Company has elected to apply the simplified method to determine the expected term. Additionally, due to our limited history, expected volatility is based on a blend of our historical volatility and our implied volatility. The expected dividend yield is based on our historical yields on the date of grant. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Note 12 — Income Taxes The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows: Year Ended December 31, 2024 2023 U.S. federal statutory rate, beginning of year 21 % 21 % Non-controlling interest ( 27 ) ( 6 ) Officers' compensation 1 ( 2 ) Valuation allowance 5 ( 13 ) Effective tax rate as reported — % — % — % 62 NextDecade Corporation Notes to Consolidated Financial Statements Significant components of our deferred tax assets and liabilities at December 31, 2024 and 2023 are as follows (in thousands): December 31, 2024 2023 Deferred tax assets Net operating loss carryforwards and credits $ 78,779 $ 54,839 Investment in Intermediate Holdings 17,774 31,782 Operating lease liabilities 3,131 2,972 Other 8,283 4,996 Less: valuation allowance ( 104,685 ) ( 91,465 ) Total deferred tax assets 3,282 3,124 Deferred tax liabilities Operating lease right-of-use assets ( 2,564 ) ( 2,809 ) Other ( 718 ) ( 315 ) Total deferred tax liabilities ( 3,282 ) ( 3,124 ) Net deferred tax assets (liabilities) $ — $ — At December 31, 2024, we had federal net operating loss (“NOL”) carryforwards of approximately $ 370.5 million. Approximately $ 26.1 million of these NOL carryforwards will expire between 2034 and 2038. Due to our history of NOLs, current year NOLs and significant risk factors related to our ability to generate taxable income, we have established a valuation allowance to offset our deferred tax assets as of December 31, 2024 and 2023. We will continue to evaluate our ability to release the valuation allowance in the future. Due to our full valuation allowance, we have not recorded a provision for federal or state income taxes during the years ended December 31, 2024 or 2023. Deferred tax assets and deferred tax liabilities are classified as non-current in our Consolidated Balance Sheets. The Tax Reform Act of 1986 (as amended) contains provisions that limit the utilization of NOL and tax credit carryforwards if there has been a change in ownership as described in Section 382 of the Internal Revenue Code (“Section 382”). Substantial changes in the Company's ownership have occurred that may limit or reduce the amount of NOL carryforwards that the Company could utilize in the future to offset taxable income. The Company has not completed a detailed Section 382 study at this time to determine what impact, if any, that ownership changes may have had on its NOL carryforwards. In each period since its inception, the Company has recorded a valuation allowance for the full amount of its deferred tax assets, as the realization of the deferred tax asset is uncertain. As a result, the Company has not recognized any federal or state income tax benefit in its Consolidated Statement of Operations. We remain subject to periodic audits and reviews by taxing authorities; however, we did not have any open income tax audits as of December 31, 2024. The federal tax returns for the years beginning 2021 remain open for examination. We have not recorded any unrecognized tax benefits related to uncertain tax positions as of December 31, 2024. Note 13 — Commitments and Contingencies Legal Proceedings From time to time the Company may be subject to various claims and legal actions that arise in the ordinary course of business. As of December 31, 2024, management is not aware of any claims or legal actions that, separately or in the aggregate, are likely to have a material adverse effect on the Company’s financial position, results of operations or cash flows, although the Company cannot guarantee that a material adverse effect will not occur. 63 NextDecade Corporation Notes to Consolidated Financial Statements Note 14 — Supplemental Cash Flows The following table provides supplemental disclosure of cash flow information (in thousands): Year Ended December 31, 2024 2023 Interest payments classified as operating activities $ 3,557 $ 23,365 Accounts payable for acquisition of property, plant and equipment 242,057 238,105 Accruals for acquisition of property, plant and equipment 276,137 268,821 Non-cash settlement of warrant liabilities 8,571 — Corporate fixed asset retirements 1,256 — Non-cash issuance of the Warrants and associated discount to the Corporate Credit Agreement 28,595 — Reclassification from other non-current assets to property, plant and equipment 1,867 9,006 Reclassification from other non-current assets to operating lease right-of-use assets — 24,606 Accrued liabilities for debt and equity issuance costs 4,750 764 Paid-in-kind dividends on convertible preferred stock — 20,431 64 NextDecade Corporation Item 9. Changes in and Disagreements with Accountants None.