NextDecade Corp 10-Q

Item 1. Financial Statements. NextDecade Corporation Consolidated Balance Sheets (1) (in thousands, except per share data, unaudited) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 130,938 $ 148,137 Restricted cash 255,209 244,625 Derivatives 14,270 16,867 Prepaid expenses and other current assets 4,368 2,943 Total current assets 404,785 412,572 Property, plant and equipment, net 5,702,709 5,020,003 Operating lease right-of-use assets 164,995 166,082 Deferred financing fees 292,971 317,788 Derivatives 303,214 472,057 Other non-current assets 24,996 15,557 Total assets $ 6,893,670 $ 6,404,059 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 256,765 $ 244,642 Operating leases 2,847 2,881 Accrued and other current liabilities 216,068 347,561 Total current liabilities 475,680 595,084 Debt, net 4,549,202 3,920,425 Operating leases 143,787 144,164 Other non-current liabilities 1,463 — Total liabilities 5,170,132 4,659,673 Commitments and contingencies (Note 10) Stockholders’ equity Common stock, $ 0.0001 par value, 480.0 million authorized: 260.7 million and 260.2 million outstanding, respectively 26 26 Treasury stock: 3.1 million shares and 3.1 million respectively, at cost ( 20,965 ) ( 20,916 ) Preferred stock, $ 0.0001 par value, 0.5 million authorized: none outstanding — — Additional paid-in-capital 865,745 852,054 Accumulated deficit ( 542,328 ) ( 453,523 ) Total stockholders’ equity 302,478 377,641 Non-controlling interest 1,421,060 1,366,745 Total equity 1,723,538 1,744,386 Total liabilities and equity $ 6,893,670 $ 6,404,059 (1) Amounts presented include balances held by our consolidated variable interest entity, Intermediate Holdings, as further discussed in Note 7, Variable Interest Entity . The accompanying notes are an integral part of these unaudited consolidated financial statements. 2 Table of Contents NextDecade Corporation Consolidated Statements of Operations (in thousands, except per share data, unaudited) Three Months Ended March 31, 2025 2024 Revenues $ — $ — Operating expenses: General and administrative expense 44,942 32,505 Development expense 307 2,509 Depreciation and amortization expense 3,149 3,103 Other 3,518 — Total operating expenses 51,916 38,117 Total operating loss ( 51,916 ) ( 38,117 ) Other (expense) income: Derivative (loss) gain ( 168,700 ) 258,872 Interest expense, net of capitalized interest ( 27,205 ) ( 25,479 ) Loss on debt extinguishment — ( 7,440 ) Other income (expense), net 2,593 ( 1,061 ) Total other (expense) income ( 193,312 ) 224,892 Net (loss) income attributable to NextDecade Corporation ( 245,228 ) 186,775 Less: net (loss) income attributable to non-controlling interest ( 156,423 ) 158,429 Net (loss) income attributable to common stockholders $ ( 88,805 ) $ 28,346 Net (loss) income per common share — basic and diluted $ ( 0.34 ) $ 0.11 Weighted average shares outstanding — basic 260,405 256,707 Weighted average shares outstanding — diluted 260,405 266,886 The accompanying notes are an integral part of these unaudited consolidated financial statements. 3 Table of Contents NextDecade Corporation Consolidated Statement of Stockholders’ Equity and Convertible Preferred Stock (in thousands, unaudited) Three Months Ended March 31, 2025 2024 Total stockholders' equity, beginning balances $ 1,744,386 $ 740,434 Common stock 26 26 Treasury Stock: Beginning balance ( 20,916 ) ( 14,214 ) Shares repurchased related to share-based compensation ( 49 ) ( 94 ) Ending balance ( 20,965 ) ( 14,308 ) Additional paid-in-capital: Beginning balance 852,054 693,883 Share-based compensation 6,602 4,409 Receipt of equity commitments 4,262 91,423 Exercise of common stock warrants 2,827 4,886 Ending balance 865,745 794,601 Accumulated deficit: Beginning balance ( 453,523 ) ( 391,772 ) Net (loss) income ( 88,805 ) 28,346 Ending balance ( 542,328 ) ( 363,426 ) Total stockholders' equity 302,478 416,893 Non-controlling interest: Beginning balance 1,366,745 452,511 Receipt of equity commitments 210,738 103,204 Net (loss) income ( 156,423 ) 158,429 Ending balance 1,421,060 714,144 Total equity, ending balances $ 1,723,538 $ 1,131,037 The accompanying notes are an integral part of these unaudited consolidated financial statements. 4 Table of Contents NextDecade Corporation Consolidated Statements of Cash Flows (in thousands, unaudited) Three Months Ended March 31, 2025 2024 Operating activities: Net (loss) income attributable to NextDecade Corporation $ ( 245,228 ) $ 186,775 Adjustment to reconcile net (loss) income to net cash used in operating activities Depreciation 613 84 Share-based compensation expense 6,602 4,439 Derivative loss (gain) 168,700 ( 258,872 ) Derivative settlements 3,932 4,905 Amortization of right-of-use assets 1,087 1,324 Loss on extinguishment of debt — 7,440 Corporate fixed asset retirements 3,518 — Amortization of debt issuance costs 16,916 16,388 Other ( 158 ) 1,614 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 1,149 ) ( 1,104 ) Accounts payable 2,071 3,466 Operating lease liabilities ( 412 ) ( 668 ) Accrued expenses and other liabilities ( 25,318 ) 5,384 Net cash used in operating activities ( 68,826 ) ( 28,825 ) Investing activities: Acquisition of property, plant and equipment ( 769,971 ) ( 774,615 ) Acquisition of other non-current assets ( 9,438 ) ( 6,033 ) Net cash used in investing activities ( 779,409 ) ( 780,648 ) Financing activities: Proceeds from debt issuance 645,000 768,881 Receipt of equity commitments 215,000 194,627 Repayment of debt — ( 176,000 ) Costs associated with repayment of debt — ( 995 ) Debt issuance costs ( 18,330 ) ( 20,026 ) Shares repurchased related to share-based compensation ( 49 ) ( 94 ) Net cash provided by financing activities 841,621 766,393 Net (decrease) increase in cash, cash equivalents and restricted cash ( 6,614 ) ( 43,080 ) Cash, cash equivalents and restricted cash – beginning of period 392,761 294,478 Cash, cash equivalents and restricted cash – end of period $ 386,147 $ 251,398 Balance per Consolidated Balance Sheets: March 31, 2025 Cash and cash equivalents $ 130,938 Restricted cash 255,209 Total cash, cash equivalents and restricted cash $ 386,147 The accompanying notes are an integral part of these unaudited consolidated financial statements. 5 Table of Contents NextDecade Corporation Notes to Consolidated Financial Statements (unaudited) 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 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”). The Rio Grande LNG Facility has three liquefaction trains and related infrastructure (“Phase 1”) under construction, train 4 has achieved substantial commercial progress and is being advanced toward a final investment decision (“FID”), and train 5 is 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. In March 2025, the U.S. Court of Appeals for the D.C. Circuit issued a revision to its August 2024 decision regarding our FERC order, resulting in a remand without vacatur of the FERC order for the first five liquefaction trains at the Rio Grande LNG Facility. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. In our opinion, all adjustments, consisting only of normal recurring items, which are considered necessary for a fair presentation of the unaudited consolidated financial statements, have been included. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results for the full year. 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. Note 2 — Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): March 31, 2025 December 31, 2024 Rio Grande LNG Facility under construction $ 5,696,258 $ 5,009,239 Corporate and other 8,163 12,742 Total property, plant and equipment, at cost 5,704,421 $ 5,021,981 Less: accumulated depreciation ( 1,712 ) ( 1,978 ) Total property, plant and equipment, net $ 5,702,709 $ 5,020,003 Note 3 — 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 6 — Debt . As of March 31, 2025, 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. 6 Table of Contents 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 net fair value of the Swaps is approximately $ 317.5 million as of March 31, 2025, and is classified as Level 2 in the fair value hierarchy. Note 4 — 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 three months ended March 31, 2025 and 2024, our operating lease costs were $ 2.5 million and $ 3.0 million, respectively. For the three months ended March 31, 2025 and 2024, we paid approximately $ 1.9 million and $ 2.1 million, respectively, in cash for amounts included in the measurement of operating lease liabilities, all of which are presented within operating cash flows. Maturity of operating lease liabilities as of March 31, 2025 are as follows (in thousands, except lease term and discount rate): 2025 (remaining) $ 5,703 2026 9,522 2027 9,565 2028 9,609 2029 9,654 Thereafter 189,588 Total undiscounted lease payments 233,641 Discount to present value ( 87,008 ) Present value of lease liabilities $ 146,633 Weighted average remaining lease term — years 26.5 Weighted average discount rate — percent 4.1 Note 5 — Accrued Liabilities and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2025 December 31, 2024 Rio Grande LNG Facility costs $ 196,990 $ 276,137 Accrued interest 4,632 40,911 Employee compensation expense 3,767 13,425 Other accrued liabilities 10,679 17,088 Total accrued and other current liabilities $ 216,068 $ 347,561 7 Table of Contents Note 6 — Debt Debt consisted of the following (in thousands): March 31, 2025 December 31, 2024 Senior Secured Notes and Loans: 6.67 % Senior Secured Notes due 2033 $ 700,000 $ 700,000 6.85 % Senior Secured Notes due 2047 190,000 190,000 6.58 % Senior Secured Notes due 2047 1,115,000 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 2,612,000 12.00 % Corporate Credit Agreement due 2030 (1) 180,250 175,000 Credit Facilities: CD Senior Working Capital Facility — — CD Credit Facility 1,610,000 1,022,000 TCF Credit Facility 283,000 226,000 Total Credit Facilities 1,893,000 1,248,000 Total debt 4,685,250 4,035,000 Unamortized debt issuance costs ( 136,048 ) ( 114,575 ) Total debt, net $ 4,549,202 $ 3,920,425 (1) Includes paid-in-kind interest of approximately $ 5.3 million . 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 Under the terms of the Corporate Credit Agreement, 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”). For additional details about the Warrants, refer to Note 8, Stockholders' Equity . 8 Table of Contents Credit Facilities Below is a summary of our committed credit facilities outstanding as of March 31, 2025 (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 — 1,610,000 283,000 Letters of credit issued 67,287 — — Available commitment $ 432,713 $ 6,838,000 $ 517,000 Priority ranking Senior secured Senior secured Senior secured Interest rate on outstanding balance SOFR + 2.25 % SOFR + 2.25 % SOFR + 2.25 % Commitment fees on undrawn balance 0.68 % 0.68 % 0.68 % Maturity Date 2030 2030 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 require 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 trains 4 and 5 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 March 31, 2025, the Company was in compliance with all covenants related to its respective debt agreements. 9 Table of Contents Interest Expense Total interest expense, net of capitalized interest, consisted of the following (in thousands): Three Months Ended March 31, 2025 2024 Interest per contractual rate $ 73,105 $ 36,591 Amortization of debt issuance costs 16,916 16,388 Other interest costs 785 551 Total interest cost 90,806 53,530 Capitalized interest ( 63,601 ) ( 28,051 ) Total interest expense, net of capitalized interest $ 27,205 $ 25,479 Fair Value Disclosures The following table shows the carrying amount and estimated fair value of our debt (in thousands): March 31, 2025 December 31, 2024 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Senior Notes — Level 2 $ 2,005,000 $ 1,952,335 $ 2,005,000 $ 1,984,836 Senior Loans — Level 2 607,000 600,753 607,000 609,082 Corporate Credit Agreement — Level 2 180,250 130,040 175,000 169,750 The fair value of the Senior Secured Notes, Senior Secured Loans and Corporate Credit Agreement was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including interest rates on debt issued by parties with comparable credit ratings. The fair value of the CD Credit Facility, TCF Credit Facility and Corporate Credit Facility approximates its respective carrying amount due to its variable interest rate, which approximates a market interest rate. Note 7 — Variable Interest Entity Intermediate Holdings and its wholly owned subsidiaries, including Rio Grande, have been formed to undertake construction and operation of Phase 1 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 Intermediate Holdings. 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 only and exclude intercompany balances between Intermediate Holdings and NextDecade, which are eliminated in the Consolidated Financial Statements of NextDecade. 10 Table of Contents March 31, 2025 December 31, 2024 Assets Current assets: Restricted cash $ 255,209 $ 244,625 Derivatives 14,270 16,867 Prepaid expenses and other current assets 2,890 1,084 Total current assets 272,369 262,576 Property, plant and equipment, net 5,693,913 5,007,345 Operating lease right-of-use assets 152,821 153,679 Deferred financing fees 292,971 317,788 Derivatives 303,214 472,057 Other non-current assets 21,441 15,407 Total assets $ 6,736,729 $ 6,228,852 Liabilities Current liabilities: Accounts payable $ 253,523 $ 242,689 Accrued liabilities and other current liabilities 207,110 321,162 Operating lease 2,673 2,649 Total current liabilities 463,306 566,500 Operating lease 128,575 129,253 Derivatives — — Debt, net 4,411,331 3,788,802 Total liabilities $ 5,003,212 $ 4,484,555 Note 8 — Stockholders' Equity 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 P30D-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) an affirmative FID on train 4 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 have been excluded from the computation of diluted loss per share for the three months ended March 31, 2025 because including them in the computation would have been antidilutive for the period presented. Note 9 — Share-based Compensation The Company has granted restricted stock and restricted stock units (collectively, “Restricted Stock”), as well as unrestricted stock and stock options, to employees, directors and outside consultants under the 2017 Omnibus Incentive Plan, as amended (the “2017 Plan”). Upon the vesting of Restricted Stock, shares of common stock are released to the grantee. As of March 31, 2025, we had approximately 8.4 million shares of service-based and approximately 4.3 million shares of performance-based Restricted Stock outstanding. Further, the approximately 12.7 million shares of Restricted Stock, as well as approximately 1.5 million stock options outstanding, have been excluded from the computation of diluted 11 Table of Contents loss per share for the three months ended March 31, 2025 because including them in the computation would have been antidilutive for the period presented. For the three months ended March 31, 2025 and 2024, the Company recognized approximately $ 6.6 million and $ 4.4 million, respectively, of share-based compensation expense related to all share-based awards. Note 10 — 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 March 31, 2025, management is not aware of any claims or legal actions against the Company 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. Note 11 — Supplemental Cash Flows The following table provides supplemental disclosure of cash flow information (in thousands): Three Months Ended March 31, 2025 2024 Interest payments classified as operating activities $ 27,299 $ 1,461 Accounts payable for acquisition of property, plant and equipment 251,513 166,893 Accruals for acquisition of property, plant and equipment 198,539 270,393 Non-cash settlement of warrant liabilities 2,828 4,886 12 Table of Contents