Clean Energy Fuels Annual Report 2016

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 For the fiscal year ended: December 31, 2016oro TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934Commission File Number: 001-33480CLEAN ENERGY FUELS CORP.(Exact name of registrant as specified in its charter)Delaware(State or other jurisdiction of incorporation) 33-0968580(IRS Employer Identification No.) 4675 MacArthur Court, Suite 800, Newport Beach, CA 92660(Address of principal executive offices, including zip code) (949) 437-1000(Registrant's telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, par value $0.0001 per share The NASDAQ Global Select MarketSecurities registered pursuant to section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No xIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes x No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). Yes x No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and willnot be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer o Accelerated filer x Non-accelerated filer o (Do not check if a smallerreporting company) Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes o No xThe aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2016 , the last business day of the registrant's mostrecently completed second fiscal quarter, was approximately $338,632,713 (computed by reference to the price at which the registrant's common stock was lastsold on such date, as reported by The NASDAQ Global Select Market). Shares of common stock held by the registrant's officers and directors and holders of 10%or more of the outstanding shares of the registrant's common stock have been excluded from the calculation of this amount because such persons may be deemed tobe affiliates; however, this determination of affiliate status is not, and shall not be considered, a determination of affiliate status for any other purpose.As of February 28, 2017 , the number of outstanding shares of the registrant's common stock was 149,591,164 .DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant's definitive proxy statement for its 2017 annual meeting of stockholders are incorporated in Part III of this report by reference tothe extent stated therein.Clean Energy Fuels Corp.Annual Report on Form 10-KFor the Fiscal Year Ended December 31, 2016TABLE OF CONTENTS PageCautionary Note Regarding Forward-Looking Statements2 Part I4Item 1. Business4Item 1A. Risk Factors11Item 1B. Unresolved Staff Comments22Item 2. Properties22Item 3. Legal Proceedings23Item 4. Mine Safety Disclosures23 Part II24Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities24Item 6. Selected Financial Data25Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations26Item 7A. Quantitative and Qualitative Disclosures About Market Risk42Item 8. Financial Statements and Supplementary Data44Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure84Item 9A. Controls and Procedures84Item 9B. Other Information85 Part III86Item 10. Directors, Executive Officers and Corporate Governance86Item 11. Executive Compensation86Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters86Item 13. Certain Relationships and Related Transactions and Director Independence86Item 14. Principal Accounting Fees and Services86 Part IV87Item 15. Exhibits, Financial Statement Schedules871CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to future eventsor circumstances or our future financial performance and are based upon our current assumptions, expectations and beliefs concerning future developments andtheir potential effect on our business. In some cases, you can identify forward-looking statements by the following words: "if," "may," "might," "shall," "will,""can," "could," "would," "should," "expect," "intend," "plan," "goal," "objective," "initiative," "anticipate," "believe," "estimate," "predict," "project," "forecast,""potential," "continue," "ongoing" or the negative of these terms or other comparable terminology, although the absence of these words does not mean that astatement is not forward-looking. We believe that the statements that we make in this report regarding the following subject matters are forward-looking by theirnature:•Future supply, demand, use and prices of crude oil, gasoline, diesel, natural gas and other alternative fuels, including electricity, hydrogen, renewablediesel, biodiesel and ethanol;•Our expectations regarding the market's perception of a need for alternative vehicle fuels generally;•Our expectations regarding the market's perception of the benefits of natural gas relative to gasoline and diesel and other alternative vehicle fuels,including with respect to factors such as cost savings, supply, environmental and safety benefits;•Expected adoption of and growth in the market for natural gas as a vehicle fuel and our ability to capture a substantial share of and enhance our leadershipposition within this market, when and if it expands;•Development, commercial availability and adoption of natural gas vehicles, including for heavy-duty trucks and medium- and light-duty applications, andthe factors that may impact these events, such as estimated incremental costs, annual fuel usage and annual fuel cost savings for vehicles using natural gasinstead of gasoline or diesel;•Our business plans and our ability to successfully implement them, including, among others, our nationwide network of natural gas-truck friendly fuelingstations (we refer to this network as "America's Natural Gas Highway" or "ANGH") and our objective to fuel a substantial number of natural gas heavy-duty trucks;•The competitive environment in our industry, including the potential for a significant number of established businesses to enter the market for natural gasand other alternatives for use as vehicle fuels;•The effect of advances in conventional fuels and other alternative vehicle fuels and technologies, including improvements in the efficiency, fuel economyor greenhouse gas emissions of engines for conventional and alternative vehicles;•The availability and effect on our business of environmental, tax or other regulations, programs or incentives that promote natural gas as a vehicle fuel,including, among others, a federal alternative fuels tax credit (“VETC”) and the programs under which we generate and sell credits by selling natural gasand renewable natural gas ("RNG") as a vehicle fuel, including Renewable Identification Numbers ("RINs" or "RIN Credits") under the federalRenewable Fuel Standard ("RFS") Phase 2 and credits under the California and Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits");•Potential adoption of government policies favoring vehicle fuels other than natural gas, including gasoline and diesel fuel, or favoring alternative vehicles,including growing support for electric and hydrogen-powered vehicles;•The impact of, or potential for changes to, emissions requirements on gasoline- and diesel-powered vehicles, as well as on liquefied natural gas (“LNG”),compressed natural gas (“CNG”) and RNG production and LNG and CNG fueling stations and fuel sales•The effect of environmental regulations on oil and natural gas production and distribution;•The success and importance of acquisitions, divestitures, investments or other strategic relationships or transactions;•Our efforts to expand our CNG business, including our efforts to add CNG fueling to our ANGH stations and our anticipated CNG trailer needs;•The success of our business of selling RNG as a vehicle fuel and the completion of our proposed sale of our assets relating to our existing RNGproduction business;•The performance of our subsidiary Clean Energy Compression, which manages our business of manufacturing and internationally selling natural gas fuelcompressors and other equipment;2•Strategic benefits of owning our subsidiaries, including Clean Energy Compression, Clean Energy Renewables (“Renewables”) (which manages our RNGbusiness) and NG Advantage, LLC (“NG Advantage”) (which manages our “virtual natural gas pipeline” business);•General political, regulatory, economic and market conditions, including the impact of general uncertainty regarding the U.S. regulatory and economicenvironment as a result of the recent U.S. presidential election;•Our need for and access to additional capital to fund the growth of our business or repay our debt, through selling assets or pursuing debt or equityfinancing; and•Our expectations regarding our cash balances and other operating and financial results, including, among other things, projected capital expenditures,project development costs and other funding requirements.The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Although the forward-looking statements in this reportreflect our good faith judgment, based on currently available information, they are only predictions and involve known and unknown risks, uncertainties and otherfactors that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levelsof activity, performance, or achievements expressed or implied by these forward-looking statements. Factors that might cause or contribute to such differencesinclude, among others, those discussed below under Item 1A. Risk Factors. As a result of these and other potential risk factors, the forward-looking statements inthis report may not prove to be accurate. All forward-looking statements in this report are made only as of the date of this document and, except as required by law,we undertake no obligation to update publicly any forward-looking statements for any reason, including to conform these statements to actual results or to changesin our expectations. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and ExchangeCommission after the date we file this report.Unless the context indicates otherwise, all references to "Clean Energy," the "Company," "we," "us," or "our" in this report refer to Clean Energy FuelsCorp., together with its majority and wholly owned subsidiaries. Although we do not use the “™” symbol in each instance in which one of our common lawtrademarks appears in this report, we own unregistered trademark rights to Redeem ™ , NGV Easy Bay ™ , Clean Energy ™ , Clean Energy Renewables ™ , CleanEnergy Compression ™ and Clean Energy Cryogenics ™ .3PART IItem 1. BusinessOverviewWe are the leading provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, based on the number of stations operatedand the amount of gasoline gallon equivalents ("GGEs") of CNG, LNG and RNG delivered.Our principal business is supplying CNG, LNG and RNG (which can be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehiclesand providing operation and maintenance ("O&M") services for natural gas fueling stations. As a comprehensive solution provider, we also: design, build, operateand maintain fueling stations; manufacture, sell and service non-lubricated natural gas fueling compressors and other equipment used in CNG stations and LNGstations; offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehiclefleets; transport and sell CNG and LNG to industrial and institutional energy users who do not have direct access to natural gas pipelines; sell RNG; sell tradablecredits we generate by selling natural gas and RNG as a vehicle fuel, including LCFS Credits and RIN Credits; help our customers acquire and finance natural gasvehicles; and obtain federal, state and local credits, grants and incentives.We serve fleet vehicle operators in a variety of markets, including heavy-duty trucking, airports, refuse, public transit, government fleets, and industrial andinstitutional energy users. We believe these fleet markets will continue to present a growth opportunity for natural gas vehicle fuel for the foreseeable future. As ofDecember 31, 2016 , we serve nearly 1,000 fleet customers operating over 45,000 natural gas vehicles and we own, operate or supply over 570 natural gas fuelingstations in 42 states in the United States and four provinces in Canada.Market for Natural Gas as an Alternative Vehicle FuelAs of December 31, 2016 , Natural Gas Vehicles for America ("NGV America") estimates that there were approximately 1,750 natural gas fueling stations inthe United States and about 153,000 natural gas vehicles on American roads, including 39,500 heavy-duty vehicles (e.g. tractors, refuse trucks and buses), 25,800medium-duty vehicles (e.g. delivery vans and shuttles) and 87,000 light-duty vehicles (e.g. passenger cars, small utility vehicles, trucks and vans).We believe that natural gas is an attractive alternative to gasoline and diesel for use as a vehicle fuel in the United States because it is plentiful, domesticallyproduced, cleaner and typically cheaper than gasoline or diesel. Historically, oil, gasoline and diesel prices have been highly volatile, while natural gas prices havegenerally been stable and lower than the cost of oil, gasoline and diesel on an energy equivalent basis. Additionally, we expect increasingly stringent federal, stateand local air quality regulations, additional regulations mandating low carbon fuels and expanding initiatives by fleet operators to lower greenhouse gas emissionsand increase fuel diversity, all of which may increase market adoption of natural gas as an alternative to gasoline and diesel as a vehicle fuel. We believe thesefactors may encourage the development of an opportunity to market natural gas as a vehicle fuel in the United States.Benefits of Natural Gas FuelDomestic and Plentiful Supply. Technological advances in natural gas drilling and production, including the widespread deployment of horizontal drillingtechniques and the use of hydraulic fracturing, have unlocked vast natural gas reserves. The United States produces the highest volume of natural gas in the world,with proven, abundant and growing reserves of natural gas.Less Expensive. Due to the abundance of natural gas, the cost of natural gas in the United States is less than the cost of crude oil, on an energy equivalentbasis. Based on projections from the U.S. Energy Information Administration, we believe that natural gas will remain cheaper than gasoline and diesel for theforeseeable future. In addition, because the price of the natural gas commodity makes up a smaller portion of the cost of a GGE of CNG or LNG relative to thecommodity portion of the cost of a GGE of diesel or gasoline, the price of a GGE of CNG or LNG is less sensitive to increases in the underlying commodity cost.Cleaner. Natural gas contains less carbon than any other fossil fuel and thus produces fewer carbon dioxide emissions when burned. The California AirResources Board ("CARB") has concluded that a natural gas vehicle emits fewer greenhouse gas emissions than a comparable gasoline or diesel fueled vehicle ona well-to-wheel basis. Additionally, a study from Argonne National Laboratory, a research laboratory operated by the University of Chicago for the U.S.Department of Energy, indicates that natural gas vehicles produce at least 13% to 21% fewer greenhouse gas emissions than comparable gasoline and diesel fueledvehicles. For natural gas vehicles that run on RNG, we estimate, based on CARB data, that the greenhouse gas emissions produced are from 50% to 125% less thancomparable gasoline and diesel fueled vehicles, depending on the source of biogas. We believe4the RNG we sell for use as a vehicle fuel, which is distributed under the brand name Redeem™, is the first commercially available RNG vehicle fuel made fromorganic waste.Safer. As reported by NGV America, CNG and LNG are relatively safer than gasoline and diesel because they dissipate into the air when spilled or in theevent of a vehicle accident. When released, CNG and LNG are also less combustible than gasoline or diesel because they ignite only at relatively hightemperatures. The fuel tanks and systems used in natural gas vehicles are subjected to a number of federally required safety tests, such as fire, environmentalhazard, burst pressure and crash testing, according to the U.S. Department of Transportation National Highway Traffic Safety Administration. Additionally, CNGand LNG are stored in above-ground tanks and therefore will not contaminate soil or groundwater in the event of a spill or leak.Natural Gas VehiclesNatural gas vehicles use internal combustion engines similar to those used in gasoline or diesel powered vehicles and the acceleration and other performancecharacteristics of natural gas vehicles are similar to those of gasoline or diesel powered vehicles of the same weight and engine class. Additionally, natural gasvehicles, whether they run on CNG or LNG, are refueled using a hose and nozzle that makes an airtight seal with the vehicle's gas tank.Natural gas vehicles have engines specially tuned to run on natural gas fuels, which have higher octane content than gasoline or diesel, and fuel tanks andlines specially designed to hold CNG and LNG and deliver it to the vehicle’s engine. These special features, including primarily the fuel tanks that hold CNG andLNG, cause natural gas vehicles to typically cost more than gasoline- or diesel-powered vehicles. Additionally, for heavy-duty vehicles, spark ignited natural gasvehicles generally operate more quietly than diesel-powered vehicles.Virtually any car, truck, bus or other vehicle is capable of being manufactured or modified to run on natural gas. Many models of heavy-, medium- and light-duty natural gas vehicles and engines are available in the United States and Canada. These vehicles include long-haul tractors, refuse trucks, regional tractors,transit buses, ready-mix trucks, delivery trucks, vocational work trucks, school buses, shuttles, passenger sedans, pickup trucks and cargo and passenger vans. Weexpect that additional models and types of natural gas vehicles will become available if natural gas is increasingly adopted as a vehicle fuel in the United States.Products, Services and Other Business ActivitiesCNG Sales. CNG is natural gas that is compressed and dispensed in gaseous form. We typically deliver CNG by obtaining natural gas from local utilitiesor third-party marketers and then compressing, storing and dispensing it into our customers' vehicles. Some of the natural gas we obtain from third parties for CNGsales is purchased under take-or-pay contracts that require us to purchase minimum volumes of natural gas.We sell CNG for use as a vehicle fuel through fueling stations located on our customers' properties and through our network of public access fueling stations.Our CNG vehicle fuel sales are made primarily through contracts with our customers. Under these contracts, pricing is principally determined on an index-plusbasis, which is calculated by adding a margin and delivery cost to the local index or utility price for natural gas. As a result, CNG vehicle fuel sales determined byan index-plus methodology increase or decrease as a result of an increase or decrease in the cost of natural gas which includes transportation charges, utilities, andother fees. The remainder of our CNG vehicle fuel sales are on a per fill-up basis at prices we set at public access stations based on prevailing market conditions.Our subsidiary, NG Advantage also sells CNG for non-vehicle purposes. NG Advantage uses a fleet of 70 high-capacity tube trailers to deliver CNG toinstitutions and industrial energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines.Utilizing its trailer fleet, NG Advantage creates a "virtual natural gas pipeline" that allows oil, diesel or propane users to take advantage of the cost savings andenvironmental benefits of natural gas. We anticipate that NG Advantage will need to purchase or lease additional trailers in the future to transport CNG in supportof its operations.LNG Production and Sales. LNG is natural gas that is cooled at a liquefaction facility to approximately -260 degrees Fahrenheit until it condenses into aliquid. We obtain LNG from our own liquefaction plants and from third party suppliers. We own and operate LNG liquefaction plants near Houston, Texas andBoron, California, which we call the "Pickens Plant" and the "Boron Plant," respectively. The Pickens Plant has the capacity to produce 35 million gallons of LNGper year and includes a tanker trailer loading system and a 1.0 million gallon storage tank that can hold up to 840,000 usable gallons. The Boron Plant is capable ofproducing 60 million gallons of LNG per year and has a dual tanker trailer loading system and a 1.8 million gallon storage tank that can hold up to 1.5 millionusable gallons. In 2016 , we purchased 44% of our LNG from third-party suppliers and we produced the remainder of our LNG at the Pickens Plant and the BoronPlant. Some natural gas we obtain from third-parties for LNG sales is purchased under “take or pay” contracts that require us to purchase minimum volumes ofnatural gas.5We sell LNG for use as a vehicle fuel on a bulk basis to fleet customers, who often own and operate their fueling stations, and through our network of publicaccess fueling stations. We deliver LNG via our fleet of 84 tanker trailers to fueling stations, where it is stored and then dispensed in liquid form into vehicles. Wecontract with third parties to provide tractors and drivers. The need to liquefy and transport LNG generally causes LNG to cost more than CNG. We sell LNGthrough supply contracts that are priced on an index-plus basis, such that LNG sales under these contracts increase or decrease as a result of an increase or decreasein the cost of natural gas. We also sell LNG vehicle fuel on a per fill-up basis at prices we set at public access stations based on prevailing market conditions.Additionally, we sell LNG for non-vehicle purposes, including to customers who use LNG in oil fields, and for industrial, utility, marine and rail applications.O&M Services. We perform O&M services for CNG and LNG fueling stations that we do not own. For these services, we generally charge a fixed or a per-gallon fee based on the volume of fuel dispensed at the station. We have an operations team performing preventive maintenance and available to respond to servicerequests.VETC. Under separate pieces of U.S. federal legislation from October 1, 2006 through December 31, 2015, we were eligible to receive a federal alternativefuels tax credit (“VETC”) of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that we sold as vehicle fuel. From January 1, 2016,the new credit was the same as the credit it replaced, except that the credit for LNG sold as a vehicle fuel in 2016 was based on the diesel gallon equivalent of LNGsold rather than the liquid gallon of LNG sold. Based on the service relationship with our customers, either we or our customers claimed the credit. VETC ceasedto be available after it expired on December 31, 2016, and it may not be available for any subsequent period.Station Construction and Engineering. We design and construct fueling stations and facility modifications and sell or lease some of these stations to ourcustomers. We charge construction or other fees or lease rates based on the size and complexity of the project.Since 2008, we have served as general contractor or supervised qualified third-party contractors to build 416 natural gas fueling stations. We acquired theadditional stations that we own but did not build through acquisitions of assets or businesses. We use a combination of custom designed and off-the-shelfequipment to build fueling stations. Equipment for a CNG station typically consists of dryers, compressors (including those manufactured by Clean EnergyCompression), dispensers and storage tanks. Equipment for a LNG station typically consists of storage tanks and dispensing equipment. Many of our fuelingstations have separate public access areas for retail customers, which generally have the look, feel and dispensing rates of gasoline and diesel fueling stations.We also offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gasvehicle fleets. For example, our NGV Easy Bay™ product is a natural gas vapor leak barrier developed specifically for natural gas vehicle facilities.RNG Production and Sales. RNG is produced from waste streams such as landfills, animal waste digesters and waste water treatment plants. RNGproduction plants are connected to natural gas pipelines, which allow RNG to be transported to vehicle fueling stations where it can be compressed and dispensedas CNG, and to LNG liquefaction facilities where it is converted to LNG.We obtain RNG through our own production plants as well as through third-party producers. Our subsidiary, Renewables, currently owns RNG productionfacilities located at Republic Services landfills in Canton, Michigan and North Shelby, Tennessee, and has entered into long-term fixed-price sale contracts for themajority of the RNG that we expect these facilities to produce over the next seven years. Additionally, we have sought to expand our RNG business by pursuingadditional RNG production projects, either on our own or with project partners. For instance, Renewables, entered into agreements to form joint ventures with AriaEnergy Operating LLC, a developer of RNG production facilities, to develop RNG production facilities at a Republic Services landfill in Oklahoma City,Oklahoma and an Advanced Disposal landfill near Atlanta, Georgia.We sell some of the RNG we produce through our natural gas fueling infrastructure for use as a vehicle fuel. In addition, we purchase RNG from third partyproducers and sell that RNG for vehicle fuel use through our fueling infrastructure. The RNG we sell for vehicle fuel is distributed under the name Redeem™ .In February 2017, we entered into an agreement to sell the assets related to our existing RNG production business, including our two existing RNGproduction facilities and our interest in the two new RNG production facilities in development. We expect this sale to close on or before March 31, 2017, andthereafter we will continue to procure and sell RNG as Redeem.Sales of RINs and LCFS Credits. We generate LCFS Credits when we sell RNG and conventional natural gas for use as a vehicle fuel in California andOregon, and we generate RIN Credits when we sell RNG for use as a vehicle fuel in the United States. We can sell these credits to third parties who need the RINsand LCFS Credits to comply with federal and state emissions requirements . Generally, the amount of RINs and LCFS Credits we generate increases as we sellhigher volumes of natural gas as a vehicle fuel, but the amount of these credits that we sell and our revenue from these sales can vary depending on the market6for these credits, which has historically been volatile and subject to significant price fluctuations, and changes to applicable regulations.Natural Gas Fueling Compressors. Our subsidiary Clean Energy Compression manufactures, sells and services non-lubricated natural gas fuelingcompressors and related equipment for the global natural gas fueling market. Clean Energy Compression is headquartered near Vancouver, British Columbia, hasan additional manufacturing facility near Shanghai, China, and has sales and service offices in the United States, Bangladesh, Colombia and Peru. Clean EnergyCompression enables us to satisfy our internal compressor needs since compressors are the most important piece of equipment for a CNG station. Clean EnergyCompression also allows us to offer a high-quality and price competitive "equipment only" solution for customers who do not want our full suite of engineeringand construction services.Vehicle Acquisition and Finance. We offer vehicle finance services, including loans and leases, to help our customers acquire natural gas vehicles. Asappropriate, we apply for and receive federal, state and local incentives associated with natural gas vehicle purchases and pass these benefits through to ourcustomers. We may also secure vehicles to place with customers and/or pay deposits with respect to these vehicles prior to receiving a firm order from ourcustomers, which we may be required to purchase if our customers fail to purchase the vehicle as anticipated.Sales and MarketingWe have sales representatives covering all of our major operating territories, including the United States, Canada, China, Peru, Columbia, Mexico andEurope.We market primarily through our direct sales force, attendance at trade shows and participation in industry conferences and events. Our sales and marketinggroup also works closely with federal, state and local government agencies to provide education on the value of natural gas as a vehicle fuel and to keep abreast ofproposed and newly adopted regulations that affect our industry.Key Markets and CustomersWe serve customers in a variety of markets, such as trucking, airports, refuse, public transit, industrial and institutional energy users and government fleets.We believe these customers markets are well-suited for the adoption of natural gas vehicle fuel because they use relatively high volumes of fuel, can be served by afueling infrastructure that is centralized or along well-defined routes and/or are facing increasingly stringent emissions or other environmental regulations.Trucking. We believe that heavy-duty trucking represents one of the greatest opportunities for natural gas to be used as a vehicle fuel in the United States,and as of December 31, 2016 we fuel over 3,000 heavy-duty trucks. Because these high-mileage vehicles consume substantial amounts of fuel, they can derivesignificant benefits from the lower cost of natural gas. Many well-known shippers, manufacturers, retailers and other truck fleet operators have started to adoptnatural gas fueled trucks to move their freight. Such companies include Honda, Frito-Lay, FedEx, Anheuser-Busch, Verizon, Bimbo, Johnson & Johnson, TheHome Depot, AT&T, Colgate-Palmolive, Costco Wholesale, Lowes, Pepsi, UPS, MillerCoors, HP, Unilever, Starbucks, Kraft, Kroger, P&G, Hertz and OwensCorning.To help facilitate the transition of trucking fleets to natural gas, we have negotiated favorable CNG and LNG tank pricing from manufacturers, which we arepassing along to our customers, and we've built America's Natural Gas Highway. Many existing ANGH stations are located at Pilot Flying J Travel Centers, one ofthe largest truck fueling operators in the United States. Building ANGH has required, and may continue to require, a commitment of capital and other resources.For instance, most of our ANGH stations were initially built to provide LNG, which costs more than CNG on an energy equivalent basis, and we have beenspending, and expect to continue to spend, additional capital to add CNG fueling capability to many of our ANGH stations.Airports. We estimate that vehicles serving airports in the United States, including airport delivery fleets, rental car and parking passenger shuttles and taxis,consume an aggregate of approximately two billion gallons of fuel per year . Additionally, many U.S. airports face emissions challenges and are under regulatorydirectives and political pressure to reduce pollution, particularly as part of any expansion plans. As a result, many of these airports have adopted various strategiesto address tailpipe emissions, including rental car and hotel shuttle consolidation, and requiring or encouraging service vehicle operators to switch their fleets tonatural gas. To assist in this effort, airports are contracting with service providers to design, build and operate natural gas fueling stations in strategic locations ontheir properties.We serve customers at 39 airports, including Atlanta Hartsfield Jackson International, Baltimore Washington International, Dallas-Ft. Worth International,Denver International, Dulles International, George Bush International, Las Vegas, Logan International, LaGuardia, John F. Kennedy International, Los AngelesInternational, Newark International, Oakland International, Orlando, Phoenix Sky Harbor International, San Francisco International, San Diego International,SeaTac International (Seattle) and Tampa, International.7Refuse. According to INFORM, there are nearly 200,000 refuse trucks in the United States that collect and haul refuse and recyclables, which collectivelyconsume approximately two billion gallons of fuel per year. We estimate that approximately 55% of new refuse trucks in 2016 operate on natural gas, up fromapproximately 3% of new refuse trucks in 2008. Refuse haulers are increasingly adopting trucks that run on CNG to realize operating savings and to address theircustomers' demands for reduced emissions.We fuel over 10,000 refuse vehicles for customers including Waste Management and Republic Services, as well as other waste haulers such as AtlasDisposal, Burrtec, Recology, South San Francisco Scavenger, Waste Connections and Waste Pro, among others. We also provide vehicle fueling services tomunicipal refuse fleets, including fleets in Dallas, Los Angeles, San Antonio, and New York City, among other locations.Transit Agencies. According to the American Public Transportation Association, there are over 71,000 municipal transit buses operating in the United States.In many areas increasingly stringent emissions standards have limited the fueling options available to public transit operators. Also, transit agencies typically fuelat a central location and use high volumes of fuel. We estimate that transit agencies in the United States consume approximately 1.5 billion gallons of fuel per year.Many transit agencies have been early adopters of natural gas vehicles, and over 25% of existing transit buses and over 35% of new transit buses operate on naturalgas.We fuel close to 9,000 transit vehicles and our U.S. public transit customers include the following: Los Angeles Metropolitan Transit Authority, FoothillTransit, Orange County Transit Authority, Santa Monica Big Blue Bus, Dallas Area Rapid Transit Phoenix Transit, Jacksonville Transportation Authority, NICEBus and Washington Metro Area Transportation Authority. We also serve public transit customers in British Columbia.Industrial and Institutional Customers. See "Business - Products, Services and Other Business Activities" above for a description of industrial andinstitutional customers we supply with CNG and LNG.Government Fleets. In 2014 , 2015 and 2016 , approximately 18% , 18% and 16% of our revenue, respectively, were derived from contracts with governmententities such as municipal transit fleets. As government regulations on pollution continue to become more stringent, government agencies are evaluating ways tomake their fleets cleaner and run more economically.Our representative government fleet customers include the California Department of Transportation, State of New York, State of Colorado, City of NewYork, City of Denver, City and County of Los Angeles, City of Newport Beach, South Coast Air Quality Management District, City and County of San Francisco,City of Oakland, City and County of Dallas, City of Phoenix, The University of California, and Oklahoma State University.Grant ProgramsWe apply for and help our fleet customers apply for federal, state and local grant programs in areas where we operate. These programs provide funding fornatural gas vehicle conversions and purchases, natural gas fueling station construction and natural gas vehicle fuel sales.CompetitionThe market for vehicle fuels is highly competitive. We believe the biggest competition for CNG and LNG is gasoline and diesel, as the vast majority ofvehicles in the United States and Canada are powered by gasoline and diesel. We also compete with suppliers of other alternative vehicle fuels, includingrenewable diesel, biodiesel and ethanol, as well as fuelers of alternative vehicles, including hybrid, electric and hydrogen-powered vehicles. Additionally, ourstations compete directly with other natural gas fueling stations and indirectly with electric vehicle charging stations and other alternative fueling stations. Further,for certain of our key customer markets, such as airports and public transit, we indirectly compete with companies such as Uber and Lyft that provide alternativetransportation methods.A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, utilitiesand their affiliates, industrial gas companies, truck stop and fuel station operators, fuel providers and other organizations have entered or may enter the market fornatural gas and other alternatives for use as vehicle fuels. Many of these competitors have longer operating histories, larger customer bases, greater brandrecognition and market penetration and substantially greater financial, marketing, research, and other resources. As a result, they may be able to respond morequickly to changes in customer preferences or legal requirements, devote greater resources to the development, promotion and sale of their products, adopt moreaggressive pricing policies, devote substantially more resources to infrastructure and systems development or exert more influence on the regulatory landscape thatimpacts the vehicle fuels market. Additionally, utilities and their affiliates typically have additional and unique competitive advantages, including a lower cost ofcapital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales and marketingorganizations.8We believe we have approximately 75 competitors in the market for natural gas vehicle fuels, including:•Providers of CNG fuel infrastructure and fueling services, including Love's Trillium, Gain Clean Fuels, TruStar Energy, AmpCNG and EVO CNG, ;•Fuel station owners, such as Kwik Trip, a company that owns CNG fueling stations in the Midwestern United States;•Shell Oil Products U.S., which operates LNG fueling stations;•Applied LNG Technology, Stabilis and Prometheus Energy, each of which distributes LNG; and•Utilities and their affiliates in several states, including California, Utah, Georgia, Michigan, New Jersey, North Carolina and Washington, which own andoperate public access CNG stations that compete with our stations. In addition, utilities are seeking approval from the California Public UtilitiesCommission to spend approximately $1.0 billion on electric vehicle charging infrastructure for trucks, buses and other vehicles which infrastructure, ifbuilt, would compete with our stations.We also manufacture and sell CNG fueling equipment through Clean Energy Compression. The market for CNG fueling equipment is highly competitiveand our competitors in this market include Aspro, GNC Galileo, GE, SAFE, ANGI Energy Systems, and Atlas Copco. Numerous other equipment or compressormanufacturing companies may also enter this market in the future. We also compete with many third parties for the rights to develop RNG production facilities, therights to acquire RNG from third party producers and for customers to purchase the RNG that we sell. In addition, we sell CNG to industrial and institutionalenergy users through NG Advantage and compete with other participants in this highly competitive market, including Xpress Natural Gas, OsComp Systems andIrving Ltd.We compete for vehicle fuel users based on demand for the type of fuel, which may be affected by such factors as fuel cost, supply and availability, cost andavailability of vehicles, convenience and accessibility of fueling stations, the quality, cleanliness and safety of the fuel, and brand recognition. As of December 31,2016 , we owned, operated or supplied over 570 CNG and LNG fueling stations, which we estimate is approximately four times the number of CNG fuelingstations operated by our next largest competitor. We believe we are the only company in the United States or Canada that provides both CNG and LNG vehiclefuel on a significant scale, and our natural gas fueling operations cover more states and provinces than any of our competitors.We expect competition to increase in the alternative fuel markets generally and, if the demand for natural gas vehicle fuel increases, the market for naturalgas fuel.Government Regulation and Environmental MattersCertain aspects of our operations are subject to regulation under federal, state, local and foreign laws. Further, if we were to violate these laws or if the lawswere to change, it could have a material adverse effect on our business, financial condition and results of operations. Regulations that significantly affect ouroperations are described below. We believe we are in material compliance with these and other regulatory requirements known to apply to our business.Compliance with these regulations has not had a material effect on our capital expenditures, earnings or competitive position to date, but new laws or regulations oramendments to existing laws or regulations to make them more stringent, such as more rigorous air emissions requirements or increased regulation of greenhousegas emissions, could require us to undertake significant capital expenditures in the future.CNG and LNG Stations. To construct a CNG or LNG fueling station, we must satisfy permitting and other requirements and either we or a third partycontractor must be licensed as a general engineering contractor. Each CNG and LNG fueling station must be constructed in accordance with federal, state and localregulations pertaining to station design, environmental health, accidental release prevention, above-ground storage tanks and hazardous waste and other materials.We are also required to register with certain state agencies as a retailer/wholesaler of CNG and LNG.Transfer of LNG. Federal safety standards require each transfer of LNG to be conducted in accordance with specific written safety procedures. Theseprocedures must be located at each transfer location and must require that qualified personnel be in attendance during all LNG transfer operations.LNG Liquefaction Plants. To build and operate LNG liquefaction plants, we must apply for facility permits or licenses that address many factors, includingstorm water and wastewater discharges, waste handling and air emissions related to production activities or equipment operations. The construction of LNG plantsmust also be approved by local planning boards and fire departments.Financing. State agencies generally require the registration of finance lenders. For example, in California, pursuant to the California Finance Lenders Law,one of our subsidiaries is required to be registered as a finance lender with the California Department of Corporations.9Natural Gas Fueling Compressors. Our manufacturing facility for natural gas fueling compressors and other equipment is located in Canada and is registeredwith the British Columbia Safety Authority and the Society of Mechanical Engineers for manufacturing and operating pressure vessels. Additionally, CNG fuelingequipment is manufactured to meet the electrical and mechanical design standards of the country where the equipment will be installed.RNG. RNG production facilities are required to comply with Title V of the Clean Air Act. In addition, RNG projects must produce RNG that meets the gasquality specifications of the local utilities that accept the gas. These specifications are approved by the applicable state utilities commission.RIN Credits. In February 2010, the U.S. Environmental Protection Agency ("EPA") finalized the RFS (which was established by the Energy Policy Act of1992/2005), which creates RINs that can be generated by the production and use of RNG in the transportation sector and can be sold to fuel providers that are notcompliant under the RFS.Greenhouse Gas Emissions. California has adopted laws requiring statewide reductions of greenhouse gas emissions to 1990 levels by 2020, 40% below1990 levels by 2030, and 80% below 1990 levels by 2050. As of January 1, 2015, California's AB 32 law began regulating the greenhouse gas emissions fromtransportation fuels, including the emissions associated with LNG and CNG vehicle fuel.Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. We will incur costs to comply with AB 32 based onhow much LNG vehicle fuel we sell that is regulated, CARB's guidance on the regulation of LNG vehicle fuel, potential regulatory changes and the cost of carboncredits under AB 32. We anticipate that we will pass the costs we incur to comply with this law through to our LNG customers. With respect to CNG, theregulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas is sold. We anticipate that, over time, as the utilities'compliance costs increase, we or, to the extent we pass these costs through to our customers, our CNG customers will be required to pay more for CNG vehiclefuel to cover the increased AB 32 compliance costs of the utility. The amount of these costs that we or our CNG customers will be required to pay will bedetermined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 and the amount of natural gas we or our customers buythrough a utility’s pipeline.Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the availability of any such exemption isuncertain at this time due to the complexity of the requirements that must be met in order to qualify for such an exemption and the possibility of changes to the law.Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG derived from fossil fuel natural gas.To help achieve the greenhouse gas emissions reductions for mobile sources that are mandated by AB 32, CARB approved the Low Carbon Fuel Standard,which encourages low carbon "compliant" transportation fuels (including CNG, LNG and RNG) in the marketplace by allowing producers of these fuels togenerate LCFS Credits that can be sold to noncompliant regulated parties.The federal and other state governments are also considering measures to regulate and reduce greenhouse gas emissions. Any of these regulations, if andwhen implemented, may regulate the greenhouse gas emissions produced by or associated with our LNG production plants, our CNG and LNG fueling stations,our existing RNG production facilities (which we expect to sell on or before March 31, 2017, as described under "- Products, Services and Other BusinessActivities - RNG Production and Sales" above) or the CNG, LNG and RNG we sell, and could require us to obtain emissions credits or invest in costly emissionsprevention technology. We cannot estimate the potential costs associated with compliance with potential federal, state or local regulation of greenhouse gasemissions and these unknown costs are not contemplated by our existing customer agreements or our budgets and cost estimates.EmployeesAs of December 31, 2016 , we employed 832 people. We have not experienced any work stoppages and none of our employees is subject to collectivebargaining agreements. We believe that our employee relations are good.Financial Information about Segments and Geographic AreasWe operate our business in one reportable segment. For information about our revenue, operating income (loss) and long-lived assets in different geographicareas, see Note 17 to our consolidated financial statements included in this report. We are subject to certain risks attendant to our foreign operations, which aredescribed below in Item 1A. Risk Factors.Corporate Information; Acquisitions and DivestituresWe were incorporated under the laws of the State of Delaware in 2001. We have completed, and we anticipate continuing to pursue, acquisitions,investments, divestitures, joint ventures and other partnerships as we become aware of opportunities that10we believe can increase our competitive advantages, expand our product offerings, take advantage of industry developments, enhance our market position orprovide other benefits, including streamlining operations and reducing our costs. Recent significant transactions of this nature include: our acquisition of themanufacturing and servicing business of Clean Energy Compression in September 2010; our sale of our former natural gas vehicle conversion business in June2013; our acquisition of a controlling interest in NG Advantage in October 2014; our sale of our interest in a RNG production facility in Dallas, Texas in December2014; and our proposed sale of the assets related to our RNG production business, which we expect to occur on or before March 31, 2017.Additional InformationOur website is located at www.cleanenergyfuels.com. We make available, free of charge on our website, our annual report on Form 10-K, quarterly reportson Form 10-Q, current reports on Form 8-K and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonablypracticable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. The reference to our website is an inactivetextual reference and the contents of our website are not incorporated into this report.Item 1A. Risk FactorsAn investment in our Company involves a high degree of risk of loss. You should carefully consider the risk factors discussed below and all of the otherinformation included in this annual report on Form 10-K before you make any investment decision regarding our securities. We believe the risks and uncertaintiesdescribed below are the most significant we face. The occurrence of any of the following risks could harm our business, financial condition, results of operations,prospects and reputation and could cause the trading price of our common stock to decline. Additional risks and uncertainties not presently known to us or that wecurrently deem immaterial may also impair our business.We have a history of losses and may incur additional losses in the future.In 2014 , 2015 and 2016 , we incurred pre-tax losses of $89.8 million, $133.8 million and $ 12.4 million , respectively. During these periods our losseswere substantially decreased by approximately $28.4 million, $31.0 million and $ 26.6 million of revenue, respectively, from the VETC alternative fuels tax credit,which ceased to be available as of January 1, 2017 and may not be available for any subsequent period. We may continue to incur losses, the amount of our lossesmay increase, and we may never achieve or maintain profitability, which would adversely affect our business, prospects and financial condition, and may cause theprice of our common stock to fall.Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.As of December 31, 2016 , our total indebtedness was approximately $314.3 million in principal amount, which includes amounts incurred under the7.5% Notes, 5.25% Notes, Canton Bonds, and Plains Note, each of which is defined and discussed in Note 10 to our consolidated financial statements included inthis report and is reflected under “Contractual Obligations” in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ofthis report. As of December 31, 2016 , approximately $ 6.1 million , $ 189.6 million , $ 55.5 million , $ 54.6 million , $ 4.0 million and $ 4.5 million of theprincipal amount of our indebtedness matures in 2017 , 2018 , 2019 , 2020 , 2021 and thereafter, respectively. We expect our total interest payment obligationsrelating to our indebtedness to be approximately $ 19.7 million in 2017 .We generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment and/or refinancing ifand when opportunities arise.Our ability to make payments of the principal and interest on our indebtedness, whether at or prior to their due dates, depends on our future performance,which is subject to economic, financial, competitive and other factors, including those described in these risk factors, many of which are beyond our control. Ourbusiness may not generate cash flow from operations sufficient to service our debt.In that case, we may be required to pursue one or more alternatives to meet our debt obligations. For instance, as of the date of this report, we arepermitted to repay up to $ 125.0 million of our outstanding indebtedness at maturity with shares of our common stock rather than cash, with the amount of sharesdetermined by the then-current trading price of our common stock. Any repayment of our debt with equity would increase the number of our outstanding sharesand may significantly dilute the ownership interest of our stockholders. Additionally, any shortfall of cash from operations to service our debt may lead us to seekcapital from other sources, such as selling assets, restructuring or refinancing our debt or obtaining additional equity capital or debt financing. Our ability to engagein any of these activities, should we decide to do so, would depend on the capital markets, the state of our industry and our business and our financial condition atthe time, and we may not be successful in obtaining11additional capital on desirable terms, at a desirable time or at all. Any failure to make payments on our debt when due, either in cash or stock, could result in adefault on our debt obligations.Additionally, certain of the agreements governing our indebtedness contain restrictive covenants, and any failure by us to comply with any of thesecovenants could also cause us to be in default under the agreements governing the indebtedness. In the event of any default on our debt obligations, the holders ofthe indebtedness could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of ouravailable cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy orliquidation, or, with respect to our indebtedness that is secured, elect to foreclose on the assets that secure the debt, which could force us to relinquish rights toassets that are revenue generating or profitable or that we believe are otherwise beneficial or essential to our business. In addition, the substantial amount of ourindebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could makeus more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and government regulations, limit ourflexibility to plan for, or react to, changes in our business and industry, place us at a disadvantage compared to our competitors who have less debt or limit ourability to borrow additional amounts as needed.We may need to raise additional capital to continue to fund the growth of our business or repay our debt, which may not be available when needed, onacceptable terms or at all.As of December 31, 2016 , we had total liquidity of $109.8 million consisting of cash and cash equivalents of $ 36.1 million and short-term investmentsof $ 73.7 million . Our business plan calls for approximately $ 29.0 million in capital expenditures for 2017 , as well as additional capital expenditures thereafter.We may also require capital to make principal or interest payments on our indebtedness, either prior to or at their due dates, or for unanticipated expenses, mergers,acquisitions or strategic investments. As a result, we may find it necessary to raise additional capital through selling assets or pursuing debt or equity financing.Asset sales and equity or debt financing options may not be available when needed on terms favorable to us, or at all. Any sale of our assets may limit ouroperational capacity and could limit or eliminate any revenue streams or business plans that are dependent on the sold assets. Additional issuances of our commonstock or securities convertible into our common stock (including through our established at-the-market offering program or other equity offerings) would increasethe number of our outstanding shares and dilute the ownership interest of our stockholders. We may also pursue debt financing since, despite the high level of ourexisting indebtedness, the agreements governing much of this indebtedness do not restrict our ability to incur additional secured or unsecured debt or require us tomaintain financial ratios or specified levels of net worth or liquidity. Debt financing options that we may pursue include, among others, equipment financing, salesof convertible notes, high-yield debt, asset-based loans, term loans, project finance debt, municipal bond financing, loans secured by receivables or inventory orcommercial bank financing. Any debt financing we obtain may require us to make significant interest payments and to pledge some or all of our assets as security.In addition, higher levels of indebtedness could increase our risk of non-repayment and could adversely affect our creditworthiness, which could limit our ability toobtain further debt or equity financing as needed and restrict our flexibility in responding to changing business, industry and economic conditions. Further, we mayincur substantial costs in pursuing any future capital-raising transactions, including investment banking, legal and accounting fees, printing and distributionexpenses and other similar costs. On the other hand, if we are unable to obtain capital in amounts sufficient to fund our contractual obligations, business plans,unanticipated expenses, capital expenditures, mergers, acquisitions or strategic investments, we could be forced to suspend, delay or curtail these plans,expenditures or other transactions, which could negatively affect our business and prospects.Our success is dependent upon the willingness of fleets and other consumers to adopt natural gas as a vehicle fuel, which may not occur in a timely manner orat all.Our success is highly dependent upon the adoption by fleets and other consumers of natural gas as a vehicle fuel. If the market for natural gas as a vehiclefuel does not develop as we expect or develops more slowly than we expect or if a market does develop but we are not able to capture a significant share of themarket or the market subsequently declines, our business, prospects, financial condition and operating results would be harmed.The market for natural gas as a vehicle fuel is a relatively new and developing market characterized by intense competition, evolving governmentregulation and industry standards and changing consumer demands and behaviors.Factors that may influence the adoption of natural gas as a vehicle fuel include, among others:•Increases, decreases or volatility in the prices of oil, gasoline, diesel, natural gas and other vehicle fuels;•The availability of natural gas compared to gasoline, diesel and other vehicle fuels;12•Natural gas vehicle cost, availability (including for heavy, medium and light duty applications), quality, safety, design and performance, all relativeto vehicles powered by other fuels;•The existence of government programs, policies, regulations or incentives promoting natural gas, including tax credits, grants, renewable fuelstandards and low carbon fuel standards;•The availability or perceived availability of, consumer acceptance of and favor by lawmakers, regulators and other policy makers for non-natural gasfuels and vehicles, including gasoline and diesel powered vehicles and growing favor for electric and hydrogen-powered vehicles;•Improvements in the efficiency, fuel economy or greenhouse gas emissions of engines for gasoline and diesel-powered and alternative vehicles;•Perceptions about greenhouse gas emissions from natural gas production and transportation methods, natural gas fueling stations and natural gasvehicles, and the environmental consciousness of fleets and consumers;•Access to natural gas fueling stations and the convenience and cost to fuel and service natural gas vehicles; and•The other risks discussed in these risk factors.Increases, decreases and general volatility in oil, gasoline, diesel and natural gas prices could adversely affect our business.In recent years, the prices of oil, gasoline, diesel and natural gas have been volatile, and this volatility may continue. Additionally, prices for crude oil inrecent years have been low, due in part to over-production and increased supply without a corresponding increase in demand. Market adoption of CNG, LNG andRNG (which can be delivered in the form of CNG or LNG) as vehicle fuels could be slowed or limited if the low prices and over-supply of gasoline and diesel,today’s most prevalent and conventional vehicle fuels, continue or worsen, or if the price of natural gas increases without equal and corresponding increases inprices of gasoline and diesel. Any of these circumstances could decrease the market's perception of a need for alternative vehicle fuels generally and could causethe success or perceived success of our industry and our business to materially suffer. In addition, low gasoline and diesel prices contribute to the differentialbetween the cost of natural gas vehicles and gasoline or diesel-powered vehicles. Generally, natural gas vehicles cost more initially than gasoline or diesel poweredvehicles, as the components needed for a vehicle to use natural gas add to the vehicle’s base cost. Operators seek to recover the additional costs of acquiring orconverting to natural gas vehicles over time through the lower costs of fueling natural gas vehicles; however, operators may perceive an inability to timely recoverthese additional costs if we do not offer CNG and LNG fuel at prices lower than gasoline and diesel. Our ability to offer our customers an attractive pricingadvantage for CNG and LNG and maintain an acceptable margin on our sales becomes more difficult if prices of gasoline and diesel decrease or if prices of naturalgas increase. These pricing conditions exacerbate the cost differential between natural gas vehicles and gasoline or diesel powered vehicles, which may leadoperators to delay or refrain from purchasing or converting to natural gas vehicles at all. Any of these outcomes would decrease our potential customer base andharm our business prospects. Further, fluctuations in natural gas prices affect the cost to us of the natural gas commodity. High natural gas prices adversely impactour operating margins in cases where we cannot pass the increased costs through to our customers. Conversely, lower natural gas prices reduce our revenue incases where the commodity cost is passed through to our customers. As a result, these fluctuations in natural gas prices can have a significant and adverse impacton our operating results.Factors that can cause fluctuations in gasoline, diesel and natural gas prices include, among others, changes in supply and availability of crude oil andnatural gas, government regulations and political conditions, inventory levels, consumer demand, price and availability of other alternative fuels, weatherconditions, negative publicity surrounding drilling, production or importing techniques and methods for oil or natural gas, economic conditions and the price offoreign imports.With respect to natural gas supply and use as a vehicle fuel, there have been recent efforts to place new regulatory requirements on the production ofnatural gas by hydraulic fracturing of shale gas reservoirs and other means and on transporting, dispensing and using natural gas. Hydraulic fracturing andhorizontal drilling techniques have resulted in a substantial increase in the proven natural gas reserves in the United States. Any changes in regulations that make itmore expensive or unprofitable to produce natural gas through these techniques or others, as well as any changes to the regulations relating to transporting,dispensing or using natural gas, could lead to increased natural gas prices.If pricing conditions worsen, or if all or some combination of factors causing further volatility in natural gas, oil and diesel prices were to occur, ourbusiness and our industry would be materially harmed.13Vehicle and engine manufacturers produce very few natural gas vehicles and engines for the United States and Canadian markets, which limits our customerbase and our sales of CNG, LNG and RNG.Original equipment manufacturers produce a relatively small number of natural gas engines and vehicles, including heavy duty trucks, medium dutyapplications and other types of vehicles, in the U.S. and Canadian markets. Further, these manufacturers may not decide to expand, or they may decide todiscontinue or curtail, their natural gas engine or vehicle product lines. This limited production of natural gas engines and vehicles increases the cost to purchasethese vehicles and limits their availability, which restricts their large-scale introduction and adoption. As a result of these and other factors, the limited supply ofnatural gas vehicles could reduce our potential customer base and natural gas fuel sales, which could harm our business and prospects.The failure of our America’s Natural Gas Highway initiative and objective to fuel a greater number of natural gas heavy-duty trucks would materially andadversely affect our financial results and business.We are seeking to fuel a substantial number of natural gas heavy-duty trucks and in connection with that effort we have built a nationwide network ofnatural gas-truck friendly fueling stations, which we refer to as America’s Natural Gas Highway. Our ability to successfully execute these initiatives facessubstantial risks, including, among others:•The adoption of natural gas engines that are well-suited for heavy duty trucks is essential to the success of these initiatives. We have no influenceover the development, production, sales and marketing, cost or availability of natural gas trucks powered by these engines. Currently, CumminsWestport is the only natural gas engine manufacturer for the heavy-duty market, and we have no control over whether and the extent to whichCummins Westport will remain in the natural gas engine business or whether other manufacturers will enter the natural gas engine business;•These initiatives depend upon the development and expansion of the U.S. natural gas heavy duty market. Operators may not adopt heavy-duty naturalgas trucks due to cost, actual or perceived performance issues, or other factors that are outside of our control. To date, adoption and deployment ofnatural gas trucks have been slower and more limited than we anticipated;•As a natural gas heavy-duty truck market develops in the United States, truck and other vehicle operators may not fuel at our stations due to lack ofaccess or convenience, fuel prices or other factors.•Building ANGH has required, and may continue to require, a commitment of capital and other resources and we may not be able to raise sufficientcapital to complete it.•Most of our ANGH stations were initially built to provide LNG, which costs more than CNG on an energy equivalent basis. We have been spending,and expect to continue to spend, additional capital to add CNG fueling capability to many of our ANGH stations, and we may not have sufficientcapital in the future for this purpose.•Our ANGH stations may experience mechanical or operational difficulties, which could require significant costs to repair and could reduce customerconfidence in our stations.•We may not be able to obtain acceptable margins on fuel sales at ANGH stations.•As of December 31, 2016 , we had 39 completed ANGH stations that were not open for fueling operations. We expect to open these stations when wehave sufficient customers to fuel at the locations, but we do not know when this will occur. As long as these stations remain unopened, we willcontinue to have substantial investments in assets that do not produce revenue.We must effectively manage these risks and any other risks that may arise in connection with the completion of ANGH to successfully execute ourbusiness plan. If the U.S. market for heavy-duty natural gas trucks does not develop, our financial results, operations and business, including our ability to repayour debt, would be materially and adversely affected.We face increasing competition from a variety of businesses, many of which have far greater resources, customer bases, and brand awareness than we have,and we may not be able to compete effectively with these businesses.The market for vehicle fuels is highly competitive. We believe the biggest competition for CNG and LNG is gasoline and diesel, as the vast majority ofvehicles in the United States and Canada are powered by gasoline and diesel. We also compete with suppliers of other alternative vehicle fuels, includingrenewable diesel, biodiesel and ethanol, as well as fuelers of alternative vehicles, including hybrid, electric and hydrogen-powered vehicles. Additionally, ourstations compete directly with other natural gas fueling stations and indirectly with electric vehicle charging stations and other alternative fueling stations. Further,for certain14of our key customer markets, such as airports and public transit, we indirectly compete with companies such as Uber and Lyft that provide alternativetransportation methods. We also face high levels of competition with respect to our other business activities, including our manufacture and sale of natural gascompressors and other equipment, our production and sale of RNG and our sale of CNG and LNG to industrial and institutional energy users.A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors,utilities and their affiliates, industrial gas companies, truck stop and fuel station owners, fuel providers and other organizations have entered or may enter themarket for natural gas and other alternatives for use as vehicle fuels. Many of these competitors have longer operating histories, larger customer bases, greaterbrand recognition and market penetration and substantially greater financial, marketing, research and other resources. As a result, they may be able to respondmore quickly to changes in customer preferences or legal requirements, devote greater resources to the development, promotion and sale of their products, adoptmore aggressive pricing policies, devote substantially more resources to infrastructure and systems development or exert more influence on the regulatorylandscape that impacts the vehicle fuels market. Additionally, utilities and their affiliates typically have additional and unique competitive advantages, including alower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales andmarketing organizations. We may not be able to compete effectively against these organizations.We expect competition to increase in the alternative fuels market generally and, if the demand for natural gas vehicle fuel increases, the market for naturalgas vehicle fuel. Any such increased competition may lead to pricing pressure, reduced operating margins and fewer expansion opportunities.If there are advances in other alternative vehicle fuels or technologies, or if there are improvements in gasoline, diesel or hybrid engines, demand for naturalgas vehicles may decline.Technological advances in the production, delivery and use of gasoline, diesel or other alternative fuels that are, or are perceived to be, cleaner, more cost-effective, more readily available or otherwise more attractive than CNG, LNG or RNG may slow or limit adoption of natural gas vehicles. For example, advancesin gasoline and diesel engine technology, including efficiency improvements and further development of hybrid engines, may offer a cleaner, more cost-effectiveoption and make fleet customers less likely to convert their vehicles to natural gas. Additionally, technological advances related to ethanol or biodiesel, which areused as an additive to, or substitute for gasoline and diesel fuel, may slow the need to diversify fuels and affect the growth of the natural gas vehicle fuel market.Further, use of electric heavy-duty trucks, buses and refuse trucks, or the perception that such vehicles may soon be widely available and providesatisfactory performance at an acceptable cost, may reduce demand for natural gas vehicles. In addition, renewable diesel, hydrogen and other alternative fuels mayprove to be cleaner, more cost-effective alternatives to gasoline and diesel than natural gas. Advances in technology that reduce demand for natural gas as a vehiclefuel or the failure of natural gas vehicle technology to advance at an equal pace could slow or curtail the growth of natural gas vehicle purchases or conversions,which would have an adverse effect on our business.Our business is influenced by environmental, tax and other government regulations, programs and incentives that promote cleaner fuels and alternativevehicles, and their adoption, modification or repeal could impact our business.Our business is influenced by federal, state and local government tax credits, rebates, grants and similar programs and incentives that promote the use ofCNG, LNG and RNG as a vehicle fuel, including the VETC, which expired on December 31, 2016 and may not be available in any subsequent period, and variousgovernment programs that make available grant funds for the purchase and construction of natural gas vehicles and stations. Additionally, our business isinfluenced by laws, rules and regulations that require reductions in carbon emissions and/or the use of renewable fuels, such as the California and Oregon LowCarbon Fuel Standards and the federal Renewable Fuel Standard Phase 2, under which we generate LCFS Credits and RIN Credits by selling CNG, LNG and RNGas a vehicle fuel.These programs and regulations that have the effect of encouraging the use of CNG, LNG or RNG as a vehicle fuel are subject to change, and couldexpire or be repealed or amended for a variety of reasons. For example, parties with an interest in gasoline and diesel or other alternative fuels, such as electricity,hydrogen, renewable diesel, biodiesel or ethanol, many of whom have substantially greater resources and influence than we have, invest significant time andmoney in efforts to delay, repeal or otherwise negatively influence regulations and programs that promote natural gas as a vehicle fuel. Further, changes in federal,state or local political, social or economic conditions could result in the modification or repeal of these programs or regulations. For instance, the results of therecent U.S. presidential election have created increased uncertainty regarding the future of many of these programs and regulations. Any failure to adopt, delay inimplementing, expiration, repeal or modification of these programs and regulations, or the adoption of any such programs and regulations that encourage the use ofother alternative fuels or alternative vehicles over natural gas, could harm our operating results and financial condition.15Compliance with greenhouse gas emissions regulations affecting our LNG plants, RNG production facilities, LNG and CNG fueling stations or CNG, LNGand RNG fuel sales may prove costly and negatively affect our financial performance.California has laws requiring statewide reductions of greenhouse gas emissions to 1990 levels by 2020, 40% below 1990 levels by 2030, and 80% below1990 levels by 2050. As of January 1, 2015, California's AB 32 law began regulating the greenhouse gas emissions from transportation fuels, including theemissions associated with LNG and CNG vehicle fuel.Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. We will incur costs to comply with AB 32 basedon how much LNG vehicle fuel we sell that is regulated, CARB's guidance on the regulation of LNG vehicle fuel, potential regulatory changes and the cost ofcarbon credits we purchase to comply with AB 32. We anticipate that we will pass the costs we incur to comply with this law through to our LNG customers. Withrespect to CNG, the regulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas is sold. We anticipate that, over time, asthe utilities' compliance costs increase, we or, to the extent we pass these costs through to our customers, our CNG customers will be required to pay more forCNG vehicle fuel to cover the increased AB 32 compliance costs of the utility. The amount of these costs that we or our CNG customers will be required to paywill be determined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 and the amount of natural gas we or our customers buythrough a utility’s pipeline. These increased costs of LNG and CNG vehicle fuel as a result of AB 32 may diminish the attractiveness of LNG and CNG as avehicle fuel for existing and potential future California customers, which could reduce our customer base and fuel sales and cause our performance to suffer.Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the availability of any such exemptionis uncertain at this time due to the complexity of the requirements that must be met in order to qualify for such an exemption and the possibility of changes to thelaw. Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG derived from fossil fuel natural gas.The federal and other state governments are also considering measures to regulate and reduce greenhouse gas emissions. Any of these regulations, if andwhen implemented, may regulate the greenhouse gas emissions produced by or associated with our LNG production plants, our CNG and LNG fueling stations,our existing RNG production facilities (which we expect to sell on or before March 31, 2017, as describe under "Business - Products, Services and Other BusinessActivities - RNG Production and sales" above) or the CNG, LNG and RNG we sell, and could require us to obtain emissions credits or invest in costly emissionsprevention technology. We cannot estimate the potential costs associated with compliance with potential federal, state or local regulation of greenhouse gasemissions and these unknown costs are not contemplated by our existing customer agreements or our budgets and cost estimates. If any of these regulations areimplemented, any associated compliance costs that we are not able to pass through to our customers may have a negative impact on our financial performance,reduce our margins, impair our ability to fulfill customer contracts and reduce our cash available for other aspects of our business, including operating costs,investments and debt repayments. Further, these regulations and any increased customer costs may discourage consumers from adopting natural gas as a vehiclefuel.We are subject to risks associated with station construction and similar activities, including difficulties identifying suitable station locations, zoning andpermitting issues, local resistance, cost overruns, delays and other contingencies.In connection with our station construction operations, we may not be able to identify suitable locations for the stations we or our customers seek to build.Even if preferred sites can be located, we may also encounter land use or zoning difficulties, challenges obtaining and retaining required permits or approvals orother local resistance that prohibit us or our customers from building new stations on these sites or limit or restrict the use of new or existing stations. Any suchdifficulties, resistance or limitations or any failure to comply with local permit, land use or zoning requirements could restrict our station construction activity orexpose us to fines, reputational damage or other liabilities, which would harm our business and results of operations. In addition, we act as the general contractorand construction manager for station construction and facility modification projects and typically rely on licensed subcontractors to perform the construction work.We may be liable for any damage we or our subcontractors cause, or for injuries suffered by our employees or our subcontractors’ employees, during the course ofour projects. Shortages of skilled subcontractor labor for our projects could significantly delay a project or otherwise increase our costs. Our profit on our projectsis based in part on assumptions about the cost of the projects and cost overruns, delays or other execution issues may, in the case of projects that we complete andsell to customers, result in our failure to achieve our expected margins or cover our costs, and in the case of projects that we build and own, result in our failure toachieve an acceptable rate of return.Clean Energy Compression's manufacturing operations could subject us to significant costs and other risks, including product liability claims.Our subsidiary, Clean Energy Compression, designs, manufactures, sells and services non-lubricated natural gas fueling compressors and relatedequipment used in CNG stations. The equipment Clean Energy Compression produces and sells may fail to perform, as expected, or according to legal orcontractual specifications. Additionally, Clean Energy Compression may incur16significant and unexpected costs during or after the manufacture of its products, including costs incurred to repair product malfunctions. The scope and likelihoodof these risks may increase if Clean Energy Compression makes efforts to expand its services to new geographic and other markets. Further, the success of ourcompressor business is dependent upon the success of the natural gas vehicle fuels market generally, and is thus subject to many of the other risks described inthese risk factors. The occurrence of any of these risks may reduce sales of Clean Energy Compression's products and services and revenue to us from thisbusiness, damage our customer relationships and reputation, delay the launch of new Clean Energy Compression products and services, force product recalls and/orresult in product liability claims.The global scope of Clean Energy Compression's operations exposes us to additional risks and uncertainties.Clean Energy Compression, which has operations in Canada, China, Colombia, Bangladesh and Peru, manufactures its natural gas compressionequipment primarily in Canada and sells this equipment globally. The global scope of these operations exposes us to a number of risks and uncertainties that canarise from international trade transactions, local business practices and cultural considerations, including, among others:•Failure to comply with the United States Foreign Corrupt Practices Act and other applicable anti-bribery laws;•Political unrest, terrorism, war, natural disasters and economic and financial instability;•Low prices for locally produced oil, gasoline or diesel;•Changes in environmental and other regulatory requirements;•Uncertainty related to developing legal and regulatory systems and standards for economic and business activities, real property ownership andapplication of contract rights;•Trade restrictions and import-export regulations, including uncertainty in the current political climate regarding existing and proposed tradeagreements and the ability to import goods into the United States;•Difficulties enforcing agreements and collecting receivables;•Difficulties complying with the laws and regulations of multiple jurisdictions;•Difficulties ensuring that health, safety, environmental and other working conditions are properly implemented and/or maintained by local offices;•Differing employment practices and/or labor issues, including wage inflation, labor unrest and unionization policies;•Limited intellectual property protection;•Longer payment cycles by international customers;•Inadequate local infrastructure and disruptions of service from utilities or telecommunications providers, including electricity shortages;•Difficulties forecasting demand and sales trends in foreign markets;•Risks associated with currency exchange and convertibility, including vulnerability to appreciation and depreciation of foreign currencies against theU.S. dollar;•Uncertain repatriation of earnings as a result of economic, monetary and regulatory factors in some countries that affect our ability to convert fundsto U.S. dollars or move funds from accounts in these countries; and•Potentially adverse tax consequences.These risks and uncertainties could limit our operations, increase our costs or expose us to fines or other legal sanctions or damages, any of which wouldnegatively impact our business and financial condition.17Our RNG business may not be successful.As of the date of this report we own RNG production facilities located in Canton, Michigan and North Shelby, Tennessee. We have also sought to expandour RNG business by pursuing additional RNG production projects, either on our own or with project partners, including two new projects in development inOklahoma and Georgia.The RNG production business is subject to a number of risks, including risks related to developing and operating the projects and generating a financialreturn. Generally, projects that produce pipeline-quality RNG have often failed due to a variety of factors, including, among others, the volatile prices ofconventional natural gas, technological difficulties associated with operating the production facilities, high costs of operating the production facilities andinabilities to obtain adequate financing to fund these costs; a general lack of government programs and regulations that support these activities, unpredictable RNGproduction levels , limited availability or unfavorable composition of collected landfill gas, failures to obtain and renew necessary permits, landfill mismanagementand plant shutdowns caused by upgrades, expansion or required maintenance. Additionally, we have experienced difficulties producing the expected volumes ofRNG at our RNG plants in the past, due to, among other factors, problems with key equipment, severe weather, landfill conditions and construction delays. Thesedifficulties may continue or worsen in the future at our plants or at the production facilities of third-party producers from which we purchase RNG.In February 2017, we entered into an agreement to sell the assets related to our RNG production business, including our two existing RNG productionfacilities and our interest in the two new RNG production facilities in development. Following the completion of this sale and assuming that it occurs when and asplanned, which we expect will be on or before March 31, 2017, we will continue to sell RNG for use as vehicle fuel.In addition to RNG production, the success of our RNG business also depends on our ability to enter into RNG supply agreements with third parties andto either sell RNG at substantial premiums to conventional natural gas prices or to sell, at favorable prices, credits we may generate under federal or state laws,rules and regulations, including RINs and LCFS Credits. If we are not successful at one or more of these activities, our RNG business could fail and ourperformance and financial condition could be materially harmed.Although we expect to continue to generate RINs and LCFS Credits from our continued sales of RNG for use as vehicle fuel, we expect the amount ofrevenue we generate from such credits will decrease if our existing RNG production assets are sold as planned, which could adversely affect our results ofoperations, particularly in the near term. Further, the market for RINs and LCFS Credits is volatile, and the prices for these credits are subject to significantfluctuations. We have entered into futures contracts for the sale of fixed amounts of RINs over specified periods and at fixed prices, which we expect to sell inconnection with the sale of our RNG production assets. These futures contracts subject us to risks based on fluctuations in the prevailing market price for RINs,since we could be forced to purchase RINs in the open market if we are not able to produce sufficient RINs through our operations to satisfy our obligations underthese futures contracts. Additionally, the value of RINs and LCFS Credits may be adversely affected by any changes to federal and state programs under whichthese credits are generated and sold. For example, CARB recently raised the carbon intensity rating of the RNG we sell in California, which reduced the amount ofLCFS Credits we generate and may adversely affect our RNG business and our financial results. Additionally, in the absence of federal and state programs thatsupport premium prices for RNG or that allow us to generate and sell LCFS Credits and RINs or other credits, or if our customers are not otherwise willing to paya premium for RNG, we may be unable to operate our RNG business profitably or at all.Our warranty reserves may not adequately cover our warranty obligations, which could result in unexpected costs.We provide product warranties with varying terms and durations for natural gas compressors and stations we build and sell to customers, and we establishreserves for the estimated liability associated with these product warranties. Our warranty reserves are based on historical trends as well as our understanding ofspecifically identified warranty issues, and the amounts estimated for these reserves could differ materially from the warranty costs that may actually be realized.We would be adversely affected by an increase in the rate of warranty claims or the amounts involved with warranty claim or by the occurrence of unexpectedwarranty claims, any of which could increase our costs beyond our established reserves and cause our cash position and financial condition to suffer.Increased global IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions andservices.Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and theconfidentiality, availability and integrity of our data. Depending on their nature and scope, such threats could potentially lead to the compromise of confidentialinformation, improper use of our systems and networks, manipulation and destruction of data and operational disruptions.18We have significant contracts with government entities that are subject to unique risks.We have, and will continue to seek, long-term CNG, LNG and RNG station construction, maintenance and fuel sales contracts with various governmentbodies, which accounted for approximately 18%, 18% and 16% of our annual revenue in 2014 , 2015 and 2016 , respectively. In addition to normal business risks,including the other risks discussed in these risk factors, our contracts with government entities are often subject to unique risks, some of which are beyond ourcontrol. Long-term government contracts and related orders are subject to cancellation if adequate appropriations for subsequent performance periods are not made.The termination of funding for a government program supporting any of our government contracts could result in a loss of anticipated future revenue attributable tothat contract, which could have a negative impact on our operations. The current political climate, including uncertainties following the recent U.S. presidentialelection, may increase these risks.In addition, government entities with which we contract are often able to modify, curtail or terminate contracts with us at their convenience and withoutprior notice and would only be required to pay for work completed and commitments made at the time of termination. Modification, curtailment or termination ofsignificant government contracts could have a material adverse effect on our results of operations and financial condition. Further, government contracts arefrequently awarded only after competitive bidding processes, which are often protracted. In many cases, unsuccessful bidders for government contracts areprovided the opportunity to formally protest certain contract awards through various agencies or other administrative and judicial channels. The protest processmay substantially delay a successful bidder’s contract performance, result in cancellation of the contract award entirely and distract management. As a result, wemay not be awarded contracts for which we bid and substantial delays or cancellation of contracts may follow any successful bids as a result of these protests.Our operations entail inherent safety and environmental risks that may result in substantial liability to us.Our operations entail inherent risks, including equipment defects, malfunctions, failures, and misuses, which could result in uncontrollable flows ofnatural gas, fires, explosions and other damage. For example, operation of LNG pumps requires special training because of the extremely low temperatures ofLNG. Also, LNG tanker trailers and CNG fuel tanks and trailers, if involved in accidents or improper maintenance or installation, may rupture and result inexplosions, fires and other damage, including death or serious injury. Further, refueling of natural gas vehicles or operation of natural gas vehicle fueling stationscould result in venting of methane gas, which is a potent greenhouse gas, and such methane emissions are regulated by some state regulatory agencies and may inthe future be regulated by the EPA and/or by additional state regulators. These safety and environmental risks may expose us to liability for personal injury,wrongful death, property damage, pollution and other environmental damage. We may incur substantial liability and costs if damages are not covered by insuranceor are in excess of policy limits or if environmental damage causes us to violate applicable greenhouse gas emissions or other environmental laws. Moreover, anyof these occurrences could harm our reputation, our business and adoption levels of natural gas generally.Natural gas purchase commitments may exceed demand, causing our costs to increase.We are a party to two long-term natural gas purchase agreements that have a take-or-pay commitment, and we may enter into additional similar contractsin the future. Take-or-pay commitments require us to pay for the natural gas that we have agreed to purchase irrespective of whether we can sell the gas. If themarket for natural gas as a vehicle fuel declines or fails to develop as we anticipate, if we lose significant natural gas vehicle fueling customers, or if demand underany existing or any future sales contract does not maintain its volume levels or grow, these commitments may exceed our natural gas demand, which could causeour operating and supply costs to increase without a corresponding increase in revenue and our margins and performance may be negatively impacted.We provide financing to fleet customers for natural gas vehicles, which exposes our business to credit risks.We lend to certain qualifying customers a portion and occasionally up to 100% of the purchase price of natural gas vehicles they agree to purchase. Risksassociated with these financing activities include, among others, that: the equipment financed consists mostly of vehicles, which are mobile and easily damaged,lost or stolen; and the borrower may default on payments, enter bankruptcy proceedings and/or liquidate. As of December 31, 2016 , we had $9.1 millionoutstanding in loans provided to customers to finance natural gas vehicle purchases.Our business is subject to a variety of government regulations that may restrict our operations and result in costs and penalties.We are subject to a variety of federal, state and local laws and regulations relating to the environment, health and safety, labor and employment, buildingcodes and construction, zoning and land use, foreign business practices, public reporting and taxation, among others. Additionally, we are subject to changing andcomplex regulations related to the government procurement process and any political activities or lobbying relating to natural gas or greenhouse gas emissionsregulations in which we may engage. It is difficult and costly to manage the requirements of every authority having jurisdiction over our various activities and tocomply with their varying standards. These laws and regulations are complex, change frequently and in many cases have become19more stringent over time. Any changes to existing regulations or adoption of new regulations may result in significant additional expense to us and our customers.Further, from time to time, as part of the regular evaluation of our operations, including newly acquired or developing operations, we may be subject to complianceaudits by regulatory authorities, which may distract management from our operations and involve significant costs and use of other resources. Also, in connectionwith our operations, we often need facility permits or licenses to address, among other things, storm water or wastewater discharges, waste handling and airemissions, which may subject us to onerous or costly permitting conditions or delays if permits cannot be timely obtained.Our failure to comply with any applicable laws and regulations may result in a variety of administrative, civil and criminal enforcement measures,including assessment of monetary penalties, imposition of corrective requirements, or prohibition from providing services to government entities.We may from time to time pursue acquisitions, divestitures, investments or other strategic relationships or transactions, which could fail to meet expectationsand harm our business.We may acquire or invest in other companies or businesses or pursue other strategic transactions or relationships. Acquisitions, investments and otherstrategic transactions and relationships involve numerous risks, any of which could harm our business, including, among others:•Difficulties integrating the technologies, operations, contracts, personnel and service providers of an acquired company or partner;•Diversion of financial and management resources from existing operations or alternative acquisition, investment or other opportunities;•Failure to realize the anticipated benefits or synergies of a transaction or relationship;•Failure to identify all of the problems, liabilities, shortcomings or challenges of a company or technology we may partner with, invest in or acquire,including issues related to intellectual property rights, regulatory compliance practices, revenue recognition or other accounting practices or employee,customer or vendor relationships;•Risks of entering new customer or geographic markets in which we may have limited or no experience;•Potential loss of an acquired company's, business' or partners' key employees, customers and vendors in the event of an acquisition or investment, orpotential loss of our assets, employees or customers in the event of a divestiture or other similar strategic transaction;•Inability to generate sufficient revenue to offset costs related to an acquisition, investment or other strategic transaction;•Additional costs or incurrence of debt or equity dilution associated with funding an acquisition, investment or other relationship; and•Possible write-offs or impairment charges relating to the businesses we partner with, invest in or acquire.We depend on key people to generate our strategies and operate our business, and our business could be harmed if we are unable to retain our key people.We believe that our future success is dependent upon the contributions of our executive officers and directors and certain other key managerial, sales,technical and finance personnel. All of our executive officers and other United States employees may terminate their employment relationships with us at any time.Additionally, our directors may resign at any time or fail to be re-elected by our stockholders on an annual basis. In many cases, these individual’s knowledge ofour business and experience in our industry would be extremely difficult to replace. Additionally, qualified individuals are in high demand, and we may incursignificant costs to attract and retain our key people. If we are unable to retain our executive officers and key directors and employees, or if such individuals leaveour Company and we are unable to attract and successfully integrate quality replacements in a timely manner, our business, operating results and financialcondition could be harmed.Our quarterly results of operations fluctuate significantly and are difficult to predict.Our quarterly results of operations, which are disclosed under “Quarterly Results of Operations” in Item 8. Financial Statements and Supplementary Dataof this report, have historically experienced significant fluctuations and may continue to fluctuate significantly as a result of a variety of factors, including theamount and timing of compressor and other equipment sales, station construction sales, sales of RINs and LCFS Credits and recognition of government credits,fluctuations in commodity20costs, natural gas prices and sale activity, and our billing, collections and liability payments, as well as the other factors described in these risk factors.As a result of the significant fluctuations of our operating results in prior periods, period-to-period comparisons of our operating results may not bemeaningful and investors in our common stock should not rely on the results of any one quarter as an indicator of future performance. For example, in the fourquarterly periods in 2016 , our results were positively affected by gains related to repurchases of our outstanding convertible debt, and such gains may not recurregularly, in the same amounts or at all in future periods. Additionally, if our quarterly results of operations fall below the expectations of securities analysts orinvestors, the price of our common stock could decline substantially.Risks Related to Our Common StockSales of shares could cause the market price of our stock to drop significantly, regardless of the state of our business.As of December 31, 2016 , there were 145,538,063 shares of our common stock outstanding, 11,467,796 shares underlying outstanding options, 2,072,304shares underlying restricted stock units and 16,573,799 shares underlying outstanding convertible notes. All outstanding shares of our common stock are eligiblefor sale in the public market, subject in certain cases to the requirements of Rule 144 of the Securities Act. Also, shares issued upon exercise or conversion ofoutstanding options and convertible notes are eligible for sale in the public market to the extent permitted by the provisions of the applicable option and convertiblenote agreements and Rule 144, or if such shares have been registered under the Securities Act. If these shares are sold, or if it is perceived that they may be sold, inthe public market, the trading price of our common stock could decline.As of December 31, 2016 , 12,969,485 shares of our common stock held by our co-founder and board member T. Boone Pickens were pledged as securityfor loans made to Mr. Pickens. We are not a party to these loans. If the price of our common stock declines, Mr. Pickens may be forced to provide additionalcollateral for the loans or to sell shares of our common stock in order to remain within the margin limitations imposed under the terms of the loans. Any sales ofour common stock following a margin call that is not satisfied or any other large sales of our common stock by our officers and directors, such as Mr. Pickens' saleof 3,000,000 shares of our common stock in December 2016, may cause the price of our common stock to decline.A significant portion of our stock is beneficially owned by a single stockholder whose interests may differ from yours and who is able to exert significantinfluence over our corporate decisions, including a change of control.As of December 31, 2016 , our co-founder and board member T. Boone Pickens beneficially owned approximately 11.84 % of our outstanding commonstock (including 12,969,485 outstanding shares of common stock, 725,000 shares underlying options and 4,113,923 shares underlying convertible promissorynotes). As a result, Mr. Pickens is able to influence or control matters requiring approval by our stockholders, including the election of directors and mergers,acquisitions or other extraordinary transactions. Mr. Pickens may have interests that differ from yours and may vote in ways with which you disagree and that maybe adverse to your interests. This concentration of ownership may also have the effect of delaying, preventing or deterring a change of control of our Company,which could deprive our stockholders of an opportunity to receive a premium for their stock as part of a sale of our Company and affect the market price of ourcommon stock. Conversely, this concentration may facilitate a change of control at a time when you and other investors may prefer not to sell.The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.The market price of our common stock has experienced, and may continue to experience, significant volatility. Such volatility may be in response tofactors that are beyond our control. In addition to the other factors discussed in these risk factors, factors that may cause volatility in our stock price include, amongothers:•Volatility in the supply, demand, use and prices of crude oil, gasoline, diesel, natural gas and other alternative fuels, including renewable diesel,biodiesel, ethanol, electricity and hydrogen;•The market's perception of a need for alternative vehicle fuels generally;•The market's perception of the benefits of natural gas relative to gasoline and diesel and other alternative vehicle fuels, including with respect tofactors such as cost savings, supply, environmental and safety benefits;•Expected adoption of and growth in the market for natural gas as a vehicle fuel and our ability to capture a substantial share of and enhance ourleadership position within this market, if and when it expands;21•Development, commercial availability and adoption of natural gas vehicles, including for heavy-duty trucks and medium and light duty applications,and the factors that may impact these events, such as estimated incremental costs, annual fuel usage and annual fuel cost savings for vehicles usingnatural gas instead of gasoline or diesel;•Successful implementation of our business plans;•Failure to meet or exceed financial estimates and projections of the investment community, due to fluctuations in our operating results or otherfactors;•Increasing competition, as a significant number of established businesses, many of which have substantially greater financial, marketing and otherresources than we have, have entered or are planning to enter the market for natural gas and other alternatives for use as vehicle fuels;•Other competitive developments, including advances in conventional fuels and other alternative vehicle fuels and technologies, such asimprovements in the efficiency, fuel economy or greenhouse gas emissions of engines for conventional and alternative vehicles;•Changes to the availability or effect on our business of environmental, tax or other regulations, programs or incentives that promote natural gas as avehicle fuel, including, among others, VETC and the programs under which we generate and sell LCFS Credits and RINs;•Adoption of government policies favoring vehicle fuels other than natural gas, including gasoline and diesel fuel, or favoring alternative vehicles,including growing support for electric and hydrogen-powered vehicles;•Changes to emissions requirements on gasoline and diesel powered vehicles, as well as on LNG, CNG and RNG production and LNG and CNGfueling stations and fuel sales, and the impact of environmental regulations and pressures on oil and natural gas supply;•The market's perception of the success and importance of acquisitions, divestitures, investments or other strategic relationships or transactions;•Changes in general political, regulatory, economic and market conditions, including general uncertainty regarding the U.S. regulatory and economicenvironment as a result of the recent U.S. presidential election;•Changes to our management, including executive officer or director departures or other changes;•Sales of our common stock by us or our officers, directors or significant stockholders; and•A decline in the trading volume of our common stock.In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operatingperformance of particular companies, which have affected the market prices of these companies’ securities. These market fluctuations may also materially andadversely affect the market price of our common stock.Item 1B. Unresolved Staff Comments.None.Item 2. Properties.Our corporate headquarters are located at 4675 MacArthur Court, Suite 800, Newport Beach, California 92660, where we occupy approximately 48,000square feet of office space. Our lease for this facility expires in June 2021.We own and operate the Pickens Plant located in Willis, Texas, approximately 50 miles north of Houston. We own approximately 24 acres of land on whichthe plant is situated, along with approximately 34 acres surrounding the plant.We own and operate the Boron Plant in Boron, California, approximately 125 miles from Los Angeles. In November 2006, we entered into a 30 year groundlease for the 36 acres on which this plant is situated.22We lease the land upon which we operate our RNG production facilities in North Shelby, Tennessee and Canton, Michigan. As described under "Business -Products, Services and Other Business Activities - RNG Production and Sales" above, we expect to sell these RNG production facilities and their associated leaseson or before March 31, 2017.We lease a manufacturing facility in Chilliwack, British Columbia where we occupy approximately 81,000 square feet of space. The lease for this facilityexpires in January 2018.Item 3. Legal Proceedings.We are or may become party, and our property may become subject, to various legal actions in the ordinary course of our business. We are also subject toaudit by tax authorities for varying periods in various federal, state, local, and foreign tax jurisdictions, and disputes have arisen, and may continue to arise, duringthe course of these audits. It is impossible to determine the liabilities that we may incur resulting from any of these lawsuits and proceedings, audits, commitments,contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably it is possible that such anoutcome could have a material adverse effect upon our consolidated financial position, results of operations, or liquidity. We do not, however, anticipate such anoutcome and we believe that the ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results ofoperations, or liquidity.Item 4. Mine Safety Disclosures.None.23PART IIItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Market InformationOur common stock trades on The Nasdaq Global Select Market under the symbol "CLNE." Set forth below are the high and low sales prices for our commonstock as reported by The Nasdaq Global Select Market for the fiscal periods indicated. Sales Prices High Low 2015 First Quarter$6.25 $3.99 Second Quarter$10.48 $5.33 Third Quarter$6.94 $3.73 Fourth Quarter$6.44 $3.21 2016 First Quarter$3.80 $2.15 Second Quarter$3.97 $2.65 Third Quarter$4.80 $2.70 Fourth Quarter$4.62 $2.84 HoldersThere were approximately 54 stockholders of record as of March 2, 2017 . We believe there are approximately 71,186 additional stockholders whose sharesof our common stock are held on their behalf by brokerage firms or other agents.Dividend PolicyWe have not paid any dividends to date and do not anticipate paying any dividends on our common stock in the foreseeable future. We anticipate that allfuture earnings will be retained to finance future growth.Performance GraphThis performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing under theSecurities Act or the Exchange Act, unless it is specifically incorporated by reference into any such filing. The graph is required by applicable rules of theSecurities and Exchange Commission and is not intended to forecast or be indicative of possible future performance of our common stock.The following graph compares the five-year total return to holders of our common stock relative to the cumulative total returns of the Nasdaq Global MarketIndex, and the Russell 2000 Index. The graph assumes that $100 was invested in our common stock and on each of these indices on December 31, 2011 (the lasttrading day before the beginning of our fifth preceding fiscal year). We chose to include the Russell 2000 Index because it includes issuers with similar marketcapitalizations as us and due to the lack of a comparable industry or line-of-business index or peer group, as we are the only actively traded public company whoseonly line of business is to sell natural gas for use as a vehicle fuel and the associated equipment and services necessary to use natural gas as a vehicle fuel.24Item 6. Selected Financial Data.The following selected historical consolidated financial data should be read together with Item 7. Management's Discussion and Analysis of FinancialCondition and Results of Operations of this report and our consolidated financial statements and the related notes included in this report.The consolidated statements of operations data for the years ended December 31, 2014 , 2015 and 2016 and the consolidated balance sheet data as ofDecember 31, 2015 and 2016 , are derived from our audited consolidated financial statements included in this report. The consolidated statements of operationsdata for the years ended December 31, 2012 and 2013 , and the consolidated balance sheet data as of December 31, 2012 , 2013 and 2014 are derived from ouraudited consolidated financial statements that are not included in this report. Historical results are not indicative of the results to be expected in the current periodor any future period. Year Ended December 31, 2012 2013 2014 2015 2016 (In thousands, except share data) Statement of Operations Data: Total revenue (1)$334,008 $352,475 $428,940 $384,320 $402,656 Operating loss(70,522) (51,691) (54,364) (41,623) (17,637) Net loss(100,862) (66,919) (90,859) (135,458) (13,724) Basic and diluted loss per share$(1.16) $(0.71) $(0.96) $(1.47) $(0.10) _______________________________________________________________________________(1)Total revenue includes the following amounts: Year Ended December 31, (In thousands)2012 2013 2014 2015 2016 Alternative fuel tax credits (VETC)$(2,057)(a)$45,439(b)$28,359 $30,986 $26,638 _______________________________________________________________________________25(a)Represents settlement with the Internal Revenue Service over certain VETC amounts.(b)Amount includes $20,800 related to fuel sales in 2012. December 31, 2012 2013 2014 2015 2016 Balance Sheet Data: Cash and cash equivalents and short-terminvestments$146,697 $378,273 $214,927 $146,668 $109,837 Restricted cash, short term8,445 8,403 6,012 4,240 6,996 Working capital170,778 400,990 293,428 82,773 172,542 Total assets975,200 1,250,965 1,160,409 1,000,528 897,257 Total debt inclusive of capital lease obligations(1)331,025 620,418 570,670 567,150 312,376 Total Clean Energy Fuels Corp. stockholders'equity542,713 514,572 437,426 302,552 468,865 (1)2015 and 2016 amounts include debt issuance costs as a deduction from the carrying amount of the related liability.Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of theSecurities Exchange Act of 1934, as amended. Forward-looking statements relate to future events or circumstances or our future financial performance and arebased upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. In some cases, you canidentify forward-looking statements by the following words: “if,” “may,” “might,” “shall,” “will,” “can,” “could,” “would,” “should,” “expect,” “intend,”“plan,” “goal,” “objective,” “initiative,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “forecast,” “potential,” “continue,” “ongoing” or thenegative of these terms or other comparable terminology, although the absence of these words does not mean that a statement is not forward-looking. We believethat the statements that we make in this discussion about our future financial and operating performance, our growth strategies and anticipated trends in ourindustry and our business are forward-looking by their nature. Although the forward-looking statements in this discussion reflect our good faith judgment, basedon currently available information, they are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or ourindustry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance orachievements expressed or implied by these forward-looking statements. Factors that might cause or contribute to such differences include, among others, thosediscussed under Item 1A. Risk Factors of this report. As a result of these and other potential risk factors, the forward-looking statements in this discussion may notprove to be accurate. All forward-looking statements in this discussion are made only as of the date of this document and, except as required by law, we undertakeno obligation to update publicly any forward-looking statements for any reason, including to conform these statements to actual results or to changes in ourexpectations. This discussion should be read together with our consolidated financial statements and related notes included in this report.We are the leading provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, based on the number of stationsoperated and the amount of gasoline gallon equivalents ("GGEs") of compressed natural gas ("CNG"), liquefied natural gas ("LNG") and renewable natural gas("RNG") delivered. Our principal business is supplying CNG, LNG and RNG (which can be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehicles and providing operation and maintenance ("O&M") services for vehicle fleet customer stations. As a comprehensive solution provider, we alsodesign, build, operate and maintain fueling stations, manufacture, sell and service non-lubricated natural gas fueling compressors and other equipment used inCNG stations and LNG stations, offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilitiesfor natural gas vehicle fleets, transport and sell CNG and LNG to industrial and institutional energy users who do not have direct access to natural gas pipelines,sell RNG, sell tradable credits we generate by selling natural gas and RNG as a vehicle fuel, including credits under the California and Oregon Low Carbon FuelStandards (collectively, "LCFS Credits") and Renewable Identification Numbers ("RIN Credits" or "RINs") under the federal Renewable Fuel Standard Phase 2,help our customers acquire and finance natural gas vehicles and obtain federal, state and local tax credits, grants and incentives.26OverviewThis overview discusses matters on which our management focuses in evaluating our financial condition and operating performance and results.Sources of Revenue.The following table represents our sources of revenue: Year Ended December 31,(In millions)2014 2015 2016Volume Related (1)$247.9 $260.6 $283.9Compressor Sales84.8 54.5 27.3Station Construction Sales67.4 37.8 64.9VETC (2)28.4 31.0 26.6Other0.4 0.4 —Total$428.9 $384.3 $402.7(1)Our volume-related revenue primarily consists of CNG, LNG and RNG fuel sales, RINs and LCFS Credits sales and O&M services.(2)Represents a federal alternative fuels tax credit that we refer to as "VETC."Key Operating Data.In evaluating our operating performance, our management focuses primarily on: (1) the amount of CNG, LNG and RNG gasoline gallon equivalentsdelivered (which we define as (i) the volume of gasoline gallon equivalents we sell to our customers, plus (ii) the volume of gasoline gallon equivalents dispensedat facilities we do not own but where we provide O&M services on a per-gallon or fixed fee basis, plus (iii) our proportionate share of the gasoline gallonequivalents sold as CNG by our joint venture with Mansfield Ventures, LLC called Mansfield Clean Energy Partners, LLC (“MCEP”), plus (iv) our proportionateshare (as applicable) of the gasoline gallon equivalents of RNG produced and sold as pipeline quality natural gas by the RNG production facilities we own oroperate), (2) our station construction cost of sales, (3) our gross margin (which we define as revenue minus cost of sales), and (4) net income (loss) attributable tous. The following tables, which should be read in conjunction with our consolidated financial statements and notes included in this report, present our keyoperating data for the years ended December 31, 2014 , 2015 , and 2016 : Year Ended December 31, 2014 2015 2016 Gasoline gallon equivalents delivered (in millions) CNG (1)182.6 229.2 259.2 RNG (2)12.2 8.8 3.0 LNG70.3 70.5 66.8 Total265.1 308.5 329.0 Year Ended December 31, 2014 2015 2016 Gasoline gallon equivalents delivered (in millions) O&M services137.3 159.3 176.6 Fuel (1)108.2 130.1 128.5 Fuel and O&M services (3)19.6 19.1 23.9 Total265.1 308.5 329.0 27 Year Ended December 31, 2014 2015 2016 Other Operating data (in millions) Station construction cost of sales56.3 32.3 57.0 Gross margin (4)120.2 125.8 147.1 Net loss attributable to Clean Energy Fuels. Corp (4)$(89.7) $(134.2) $(12.2) _______________________________________________________________________________(1)As noted above, includes our proportionate share of the GGEs sold as CNG by our joint venture MCEP, which were 0.0 million, 0.4 million and 0.5 million for the years endedDecember 31, 2014 , 2015 and 2016 , respectively.(2)Represents RNG sold as non-vehicle fuel. RNG sold as vehicle fuel is included in CNG and LNG.(3)Represents gasoline gallon equivalents at stations where we provide both fuel and O&M services.(4)Includes $28.4 million, $31.0 million and $ 26.6 million of revenue from VETC for the years ended December 31, 2014 , 2015 and 2016 , respectively.Recent DevelopmentsRNG Production . In November 2016, our subsidiary, Clean Energy Renewables ("Renewables") entered into agreements to form joint ventures with Aria Energy OperatingLLC (“Aria”), a developer of RNG production facilities, to develop RNG production facilities at a Republic Services landfill in Oklahoma City, Oklahoma and anAdvanced Disposal landfill near Atlanta, Georgia. We refer to these joint ventures as the “RNG Ventures.” Renewables and Aria each have a 50% ownershipinterest in the RNG Ventures and, subject to certain conditions, are each responsible for 50% of the costs of developing the RNG production facilities that areowned by the RNG Ventures. We also have the exclusive right to purchase 100% of the RNG that will be produced by these facilities for the vehicle fuels market.As of December 31, 2016, we have an investment balance of $0.8 million in the RNG Ventures. See Note 8 to the consolidated financial statements included in thisreport for further information.On February 27, 2017, Renewables entered into an asset purchase agreement (the “APA”) with BP Products North America, Inc. (“BP”), pursuant towhich Renewables agreed to sell to BP certain assets relating to its RNG production business, including our two existing RNG production facilities and our interestin the RNG Ventures (collectively, the “RNG Assets”), in exchange for $155.0 million in cash and the right to receive up to an additional $25.0 million in cashover a five-year period if certain performance criteria relating to the RNG Assets are met (the “Asset Sale”). In addition, we will collect royalties on gas purchasedfrom BP and sold as Redeem at our stations. This royalty payment is in addition to any payment obligation of BP under the APA. Subject to the satisfaction ofcustomary closing conditions, including, among others, the receipt of required government and third-party consents and approvals, the Asset Sale is expected toclose on or before March 31, 2017. At the closing of the Asset Sale, BP will pay $30.0 million of the closing purchase price in cash and deliver to us a promissorynote for $125.0 million to be paid on April 3, 2017. Following completion of the Asset Sale we will continue to obtain RNG from third-party producers, includingRNG produced from the production facilities to be sold in the Asset Sale and sold to us by BP under a long-term supply contract, and resell such RNG through ournatural gas fueling infrastructure as Redeem™, our RNG vehicle fuel.Debt Arrangements. On February 29, 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapitalBank ("Plains"), pursuant to which Plains agreed to lend us up to $50.0 million on a revolving basis for a term of one year (the "Credit Facility"). Simultaneously,we drew down $50.0 million under the Credit Facility, which we repaid in full on August 31, 2016. On October 31, 2016, the Credit Facility's maturity date wasextended from February 28, 2017 to September 30, 2018. On December 22, 2016 we drew down $23.5 million under the Credit Facility, which remainedoutstanding as of December 31, 2016.On March 1, 2016 and pursuant to the consent of the holders of our outstanding 7.5% convertible promissory notes due in August 2016 (the "SLG Notes"),we prepaid in cash an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. Additionally, onJuly 14, 2016, we entered into separate privately negotiated exchange agreements with each holder of an SLG Note to exchange the outstanding principal amountof each SLG Note, totaling $85.0 million for all SLG Notes, and all accrued and unpaid interest thereon, totaling $0.2 million for all SLG Notes, for an aggregateof 14,000,000 shares of our common stock and $38.2 million in cash. We recognized a loss of $0.9 million for the year ended December 31, 2016 related to thesettlement of the SLG Notes. The repurchased and exchanged SLG Notes have been surrendered and canceled in full and we have no further obligations under theSLG Notes.28In 2016, our board of directors authorized and approved our purchase of our outstanding 5.25% Convertible Senior Notes due 2018 (the "5.25% Notes") inthe open market, in accordance with the terms of the indenture governing the 5.25% Notes. Pursuant to this approval, in 2016, we paid an aggregate of $84.3million in cash to repurchase and retire $114.6 million in aggregate principal amount of 5.25% Notes, together with accrued and unpaid interest thereon.Additionally, pursuant to a privately negotiated exchange agreement with certain holders of the 5.25% Notes, on May 4, 2016, we issued an aggregate of 6,265,829shares of our common stock in exchange for an aggregate principal amount of $25 million of 5.25% Notes held by such holders, together with accrued and unpaidinterest thereon. Our repurchase and exchange of 5.25% Notes in 2016 resulted in a total gain of $35.2 million recorded during the period. All repurchased andexchanged 5.25% Notes have been surrendered to the trustee for such notes and canceled in full and we have no further obligations under such notes.In February 2017, we purchased from one of our directors and significant stockholders, T. Boone Pickens, the 7.5% Convertible Note due July 2018 havingan outstanding principal amount of $25.0 million held by Mr. Pickens for a cash purchase price of $21.75 million.See Note 10 to the consolidated financial statements included in this report for further information about our debt.ATM Program . On November 11, 2015, we entered into an equity distribution agreement with Citigroup Global Markets Inc. ("Citigroup"), as sales agentand/or principal, to commence an "at-the-market" offering program (the "ATM Program"). Initially, we were permitted to issue and sell, from time to time, throughor to Citigroup, shares of our common stock having an aggregate offering price of up to $75.0 million in the ATM Program. On September 9, 2016, we enteredinto an amended and restated equity distribution agreement with Citigroup for the primary purpose of increasing, from $75.0 million to $110.0 million, theaggregate offering price of shares of our common stock available for issuance and sale in the ATM Program. On December 21, 2016, we entered into a secondamended and restated equity distribution agreement with Citigroup for the primary purpose of increasing, from $110.0 million to $200.0 million, the aggregateoffering price of shares of our common stock available for issuance and sale in the ATM Program.VETC Expiration. On December 31, 2016, the VETC alternative fuels tax credit expired and ceased to be available, and it may not be available in anysubsequent period. Under VETC, we were eligible to receive credits of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that wesold as a vehicle fuel through December 31, 2015, and $0.50 per gasoline gallon equivalent of CNG and $0.50 per diesel gallon equivalent of LNG that we sold asa vehicle fuel from January 1, 2016 through December 31, 2016.LiquidityLiquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of investments or other assets or theacquisition of additional funds through capital management or capital-raising transactions. Our liquidity is, and will continue to be, influenced by a variety offactors, including the level of our outstanding indebtedness and the principal and interest we are obligated to pay on our indebtedness, our capital expenditurerequirements and any merger, divestiture or acquisition activity, as well as our ability to generate cash flows from our operations or from other sources. See "-Liquidity and Capital Resources" below for additional information.Debt Level and Debt ComplianceAs of December 31, 2016 , we had total indebtedness of $314.3 million in principal amount, of which approximately $6.1 million is expected to become duein 2017 . Certain of the agreements governing our outstanding debt, which are discussed in Note 10 to our consolidated financial statements included in this report,have certain non-financial covenants with which we must comply. As of December 31, 2016 , we were in compliance with all of these covenants.Business Risks and UncertaintiesOur business and prospects are exposed to numerous risks and uncertainties. For more information, see Item 1A. Risk Factors in this report.Key TrendsRecent TrendsMarket for Natural Gas. CNG and LNG are generally less expensive than gasoline and diesel on an energy equivalent basis and, according to studiesconducted by the California Air Resources Board ("CARB") and Argonne National Laboratory, a research laboratory operated by the University of Chicago for theU.S. Department of Energy, cleaner than gasoline and diesel fuel. According to the U.S. Energy Information Administration, demand for natural gas fuels in theUnited States has increased in recent years and is expected to continue to increase. We believe the growth in demand in recent years is attributable primarily29to the higher prices of gasoline and diesel relative to CNG and LNG during much of this period, increasingly stringent environmental regulations affecting vehiclefleets and increased supply of natural gas.In the recent past, however, the prices of oil, gasoline, diesel and natural gas have been significantly lower and volatile, and these trends of lower pricesand volatility may continue. Additionally, in spite of growth in demand in recent years, there are significant uncertainties affecting the current market for naturalgas as a vehicle fuel, including growing favor among lawmakers, regulators, other policy makers and other powerful industry participants for other alternative fuelsor vehicles, including electric and hydrogen-powered vehicles, and uncertainties regarding the availability and effect on our business of environmental and otherregulations, programs or incentives that promote cleaner vehicle fuels, particularly in light of the results of the recent U.S. presidential election. These conditionshave resulted in lower revenue levels in certain periods due in large part to a decreased pricing advantage when comparing natural gas prices to diesel and gasolineprices, which we believe has decreased overall demand for natural gas as a vehicle fuel, and reduced the prices we have been charging our customers for CNG andLNG, which have reduced our profit margins. To the extent these volatile and lower-pricing conditions and other uncertainties persist, our financial results maycontinue to be adversely affected.Our Performance. Our gross revenue is mostly comprised of volume related revenue, compressor and other equipment sales, station construction sales,and VETC revenue. Our revenue can vary between periods due to a variety of factors, including natural gas prices and sale activity, fluctuations in commoditycosts and the amount and timing of recognition of government credits, sales of RINs and LCFS credits, compressor and other equipment sales and stationconstruction sales. Our volume-related revenue, which is further discussed below, increased from 2014 to 2016, due largely to the increase in gallons we delivered,and sales of tradable credits in 2015 and 2016.Our cost of sales can also vary between periods due to a variety of factors, including the factors described above.See "Results of Operations" below for a further discussion of our performance.Volume-Related Revenue. The amount of CNG, LNG and RNG GGEs we delivered increased by 24.1% from 2014 to 2016 .The RNG we sell for vehicle fuel, which is delivered in the form of CNG or LNG is distributed under the name Redeem™. The amount of Redeemvehicle fuel we delivered increased from 20.2 million GGEs in 2014 to 58.6 million GGEs in 2016 , a 190.1% increase. We believe this demand for Redeem™ islargely attributable to the lower greenhouse gas emissions that it produces relative to gasoline and diesel.Our sales of increasing volumes of CNG, LNG and RNG for use as a vehicle fuel has resulted in our generation of increasing amounts of RINs and LCFSCredits which, together with the increasing prices for RINs and LCFS Credits, has resulted in increased revenue associated with these credits.The following table summarizes our revenue from RINs and LCFS Credits: Year Ended December 31, (In millions)2014 2015 2016 RIN Credits2.1 10.3 29.0 LCFS Credits3.5 8.1 20.0 Total$5.6 $18.4 $49.0 Although we expect to continue to generate revenue relating to the sale of RINs and LCFS Credits from our continued sales of our Redeem RNG vehiclefuel, the amount of revenue we would receive from the sale of such credits will decrease if the existing RNG Assets are sold in the Asset Sale as planned, whichwould adversely affect our results of operations and reduce our effective price per gallon in future periods as compared to 2016. Completion of the Asset Sale will,however, improve our liquidity. Further, the markets for RINs and LCFS Credits have historically been volatile, and the prices for these credits have been subjectto significant fluctuations. Additionally, the value of RINs and LCFS Credits may be adversely affected by any changes to the federal and state programs underwhich such credits are generated and sold. For example, CARB recently raised the carbon intensity rating of the RNG we sell in California, which will reduce theamount of LCFS Credits we generate.Our Stations. The number of fueling stations we owned, operated, maintained and/or supplied increased from over 470 as of January 1, 2014 to over 570as of December 31, 2016 (a 21.3% increase). Included in this number are all of the CNG and LNG fueling stations we own, operate, maintain or with which wehave a fueling supply contract.30We have made a significant commitment of capital and other resources to build a nationwide network of natural gas truck friendly fueling stations, whichwe refer to as "America's Natural Gas Highway" or "ANGH." At December 31, 2016, we had 39 completed ANGH stations that were not open for fuelingoperations. We expect to open these stations when we have sufficient customers to fuel at the locations, but we do not know when this will occur. We believe thatgrowth in the heavy-duty truck customers depends, in part, on the adoption of natural gas engines that are well-suited for heavy-duty trucks, which has been slowerand more limited than anticipated. If heavy-duty trucking customers do not develop and if we do not open these stations, we will continue to have substantialinvestments in assets that do not produce revenue.Anticipated Future Trends.Although natural gas continues to be less expensive than gasoline and diesel in most markets, the price of natural gas has been significantly closer to theprices of gasoline and diesel in recent years as a result of lower oil prices, thereby reducing the price advantage of natural gas as a vehicle fuel. We anticipate that,over the long term, the prices for gasoline and diesel will continue to be higher than the price of natural gas as a vehicle fuel and will increase overall, which wouldimprove the cost savings of natural gas compared to gasoline and diesel. It is uncertain, however, whether the prices for gasoline and diesel will increase from theircurrent levels, and we expect that adoption of natural gas as a vehicle fuel and growth in our customer base and revenue will be negatively affected while oil anddiesel prices remain low. Our belief that natural gas will continue, over the long term, to be a cheaper vehicle fuel than gasoline or diesel is based in large part onthe growth in recent years of natural gas production in the United States, as well as increasingly stringent environmental regulations affecting vehicle fleets, whichwe believe drives the market for alternative fuels generally.According to the U.S. Energy Information Administration, demand for natural gas fuels in the United States is expected to increase. We believe naturalgas fuels are well-suited for use by vehicle fleets that consume high volumes of fuel, refuel at centralized locations or along well-defined routes and/or areincreasingly required to reduce emissions. As a result, we believe there will be growth in the consumption of natural gas as a vehicle fuel among vehicle fleets, andour goal is to capitalize on this trend, if and when it materializes, and to enhance our leadership position in these markets. Our business plan calls for expanding oursales of natural gas vehicle fuel in the markets in which we operate, including heavy-duty trucking, airports, refuse, public transit, government fleets and industrialand institutional energy users, and pursuing additional markets as opportunities arise. Additionally, we expect that the lower greenhouse gas emissions associatedwith our Redeem vehicle fuel will result in continued increased demand for this fuel, resulting in our delivery of increasing volumes of Redeem to our vehicle fleetcustomers. If these projections materialize and our business grows as we anticipate, then our operating costs and capital expenditures may increase, primarily fromthe anticipated expansion of our station network, additional investments in ANGH stations to add CNG fueling, purchases of additional CNG trailers by NGAdvantage, and increased RNG production, as well as the logistics of delivering more natural gas fuel to our customers. We also may seek to acquire assets and/orbusinesses that are in the natural gas fueling infrastructure, which may require us to spend additional capital.Although we expect competition in the market for natural gas vehicle fuel to remain steady in the near-term, we expect competition in the alternative fuelsmarket generally to increase. Any such increased competition would lead to amplified pricing pressure, reduced operating margins and fewer expansionopportunities.Risk Management ActivitiesFrom time to time, we enter into natural gas fuel sales contracts that require us to sell CNG or LNG to our customers at a fixed price. These contracts exposeus to the risk that the price of natural gas may increase above the natural gas cost component included in the price at which we are committed to sell the natural gasto our customers.In an effort to mitigate the volatility of our earnings related to any futures contracts and to reduce our risk related to our fixed price sales contracts, weoperate under a natural gas hedging policy pursuant to which we only purchase futures contracts to hedge our exposure to variability in expected future cash flowsrelated to a particular fixed price contract or bid. Subject to the conditions set forth in the policy, we purchase futures contracts in quantities reasonably expected toeffectively hedge our exposure to cash flow variability related to fixed price sales contracts entered into after the date of the policy. Unless otherwise agreed inadvance by our board of directors and the derivatives committee thereof, we will conduct our futures contract activities and enter into fixed price sales contractsonly in accordance with our natural gas hedging policy.Due to the restrictions of our hedging policy, we expect to offer fewer fixed price sales contracts to our customers. If we do offer a fixed price sales contract,we anticipate including a price component that would cover our estimated cash requirements over the duration of the underlying futures contracts. The amount ofthis price component will vary based on the anticipated volume and the natural gas price component to be covered under the fixed price sales contract.31Critical Accounting PoliciesOur discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have beenprepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The preparation of financial statementsrequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilitiesat the date of the financial statements, and revenue and expenses recorded during the reporting periods.On a periodic basis we evaluate our estimates based on historical experience and various other assumptions we believe are reasonable under thecircumstances. Actual results could differ from those estimates under different assumptions or conditions. For further information on our significant accountingpolicies, see Note 1 to our consolidated financial statements included in this report.We believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our consolidatedfinancial statements.Revenue Recognition.We recognize revenue on various products and services.Our volume related revenue primarily consists of CNG, LNG and RNG fuel sales, RINs and LCFS Credits sales and O&M services. This revenue isrecognized in accordance with US GAAP, which requires that the following four criteria must be met before revenue can be recognized: (1) persuasive evidence ofan arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the customer or services have beenrendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured.Applying the factors above, we typically recognize revenue from the sale of natural gas fuel at the time the fuel is dispensed or, in the case of LNG salesagreements, delivered to our customers' storage facilities. We generate LCFS Credits when we sell RNG and conventional natural gas for use as a vehicle fuel inCalifornia and Oregon and we generate RIN Credits when we sell RNG for use as a vehicle fuel. We can sell these credits to third parties who need the RINs andLCFS Credits to comply with federal and state emission requirements. We recognize revenue from the generation of these credits when we have an agreement inplace to sell the credits at a fixed or determinable price. We recognize revenue from O&M service agreements as we provide the related services.We recognize compression revenue through our subsidiary Clean Energy Compression when it sells non-lubricated natural gas fueling compressors and otherequipment. Clean Energy Compression uses the percentage of completion method of accounting to recognize revenue because its projects are small and it has beenable to demonstrate that it can reasonably estimate costs to complete. In these circumstances, revenue is recognized based on costs incurred in relation to totalestimated costs to be incurred for a project.Beginning January 1, 2016, we began using the percentage of completion method to recognize revenue for station construction projects using the cost-to-costmethod. Under this method, we estimate the percentage of completion of a project based on the costs incurred to date for the associated contract in comparison tothe estimated total costs for such contract at completion. Historically, we recognized revenue on station construction projects using the completed-contract methodbecause we did not have a reliable means to make estimates of the percentage of the contract completed. Under the completed contract method, the constructionprojects were considered substantially complete at the earlier of customer acceptance of the fueling station or the time when fuel dispensing activities at the stationbegan. The sale of compressors and related equipment continues to be recognized under the percentage of completion method as in previous periods. EffectiveJanuary 1, 2016, we implemented a cost tracking system that provides for a detailed tracking of costs incurred on its station construction projects on a project byproject basis. We also changed related accounting activities and processes to timely identify and monitor costs. As a result of this implementation, we are able tomake reliable estimates as to the percentage of a project that is complete at the end of each reporting period.Station construction contracts are generally short-term, except for certain larger and more complex stations, which can take up to 24 months to complete.Management evaluates the performance of contracts on an individual contract basis. Contract price and cost estimates are reviewed periodically as work progressesand adjustments proportionate to the percentage of completion are reflected in contract revenues in the reporting period when such estimates are revised.The nature of accounting for contracts is such that refinements of estimates to account for changing conditions and new developments are continuous andcharacteristic of the process. Many factors that can affect contract profitability may change during the performance period of a contract, including differing siteconditions, the availability of skilled contract labor, the32performance of major suppliers and subcontractors, and unexpected changes in material costs. Changes to these factors may result in revisions to costs and income,which are recognized in the period in which the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in whichsuch losses become known. During the year ended December 31, 2016, there were no significant losses on open contracts. We consider unapproved change orders to be contract variations for which the customer has approved the change of scope but an agreement has not beenreached as to an associated price change. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims have historically beeninsignificant. There were no significant unapproved change orders, claims, contract penalties, settlements or changes in contract estimates during the year endedDecember 31, 2016.In certain transactions with our customers, we agree to provide multiple products or services, including construction of and sale of a station, providing O&Mservices to the station, and sale of fuel to the customer. We evaluate the separability of revenues based on Financial Accounting Standards Board ("FASB")authoritative guidance, which provides a framework for establishing whether or not a particular arrangement with a customer has one or more revenue elementsand allows us to use a combination of internal and external objective and reliable evidence to develop management's best estimate of the fair value of the contractelements. If the arrangement contains a lease, we use the existing evidence of fair value to separate the lease from the other elements in the arrangement. Thearrangement's consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the estimated relative selling price of eachdeliverable, which is determined based on the historical data derived from our stand-alone projects. The revenue allocated to the construction of the station isrecognized using the completed-contract method. The revenue allocated to the O&M is recognized ratably over the term of the arrangement and sale of fuel isrecognized as the fuel is delivered.We recognize revenue received from the VETC alternative fuels tax credit. Based on the service relationship with our customers, either we or our customersclaim the credit. We record our VETC credits, if any, as revenue in our consolidated statements of operations, as the credits are fully payable and do not need tooffset income tax liabilities to be received. As such, the credits are not deemed income tax credits under the accounting guidance applicable to income taxes.We collect and remit taxes assessed by various governmental authorities that are imposed on and concurrent with revenue-producing transactions between usand our customers. These taxes may include, among others, fuel, sales and value-added taxes. We report the collection of these taxes on a net basis.Impairment of Goodwill and Long-Lived Assets.Goodwill represents the excess of costs incurred over the fair value of the net assets of acquired businesses. We assess our goodwill using a qualitativeapproach to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes thepotential impact on a reporting unit's fair value of certain events and circumstances, including our market capitalization value, macroeconomic conditions, industryand market considerations, cost factors and other relevant entity-specific events. If it is determined, based upon the qualitative assessment, that it is more likelythan not that the reporting unit's fair value is less than its carrying amount, then a two-step quantitative impairment test is performed. We perform the impairmenttest annually as of October 1, or more frequently if facts and circumstances warrant a review.We are required to use judgment when applying the goodwill impairment test, including, among other considerations, the identification of reporting units andthe assessment of qualitative factors involved in the test. Applying this judgment, we have determined that we are a single reporting unit and, based upon ourqualitative assessment of goodwill, we have concluded it is more likely than not that the fair value of our reporting unit exceeds its carrying amount and no furtherquantitative analysis was warranted. During 2014 , 2015 and 2016 , there were no indicators of impairment to goodwill. Subsequent to December 31, 2016 , ourstock price has declined due to adverse macroeconomic conditions surrounding the energy industry, which are driven in part by depressed oil prices. As a result ofthe recent volatility of our market capitalization, it is possible that our goodwill could become impaired, which could result in a material charge and adverselyaffect our results of operations.We review long-lived assets, which includes property and equipment and intangible assets for impairment whenever events or changes in circumstancesindicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carryingamount of an asset to future undiscounted cash flows expected to be generated by the asset or asset group. Estimated future cash flows are determined bymanagement based on a number of estimates, including future cash flow projections, discount rates and terminal values. In determining these estimates,management considers internally generated information and information obtained from market participants. The determination of fair value requires significantjudgment by management. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amountof the assets exceeds the fair value of the assets.33In the fourth quarter of 2014, we determined that a long-lived asset related to a contract acquired in our acquisition of the business of Clean EnergyCompression was impaired and recorded an impairment charge of $4.8 million. There were no impairments of our long-lived assets during 2015 and 2016 .Income Taxes.Income taxes are computed using the asset and liability method. Under this method, deferred income taxes are recognized by applying enacted statutory taxrates applicable to future years to differences between the tax bases and financial carrying amounts of existing assets and liabilities. The impact on deferred taxesof changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidatedfinancial statements in the period of enactment. Valuation allowances are established when management determines it is more likely than not that deferred taxassets will not be realized. When evaluating the need for a valuation analysis, we use estimates involving a high degree of judgment including projected future USGAAP income and the amounts and estimated timing of the reversal of any deferred tax assets and liabilities.We have a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected tobe taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authoritiesbased on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of beingrealized upon ultimate settlement. We recognize potential accrued interest and penalties related to unrecognized tax benefit in income tax expense.We operate within multiple domestic and foreign taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues,which may require an extended period of time to resolve. Although we believe that adequate consideration has been given to these issues, it is possible that theultimate resolution of these issues could be significantly different than originally estimated.Fair Value Measurements.We have established a framework that follows the authoritative guidance for fair value measurements with respect to assets and liabilities that are measuredat fair value on a recurring basis and non-recurring basis. Under the framework, fair value is defined as the exit price, or the amount that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The framework also establishes a hierarchyfor inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the mostobservable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based onmarket data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our assumptions about the factors market participantswould use in valuing the asset or liability and are developed based upon the best information available in the circumstances. The hierarchy consists of the followingthree levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs include quoted prices for similar assetsor liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that areobservable for the asset or liability, either directly or indirectly; Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuationhierarchy is based upon the lowest level of input that is significant to the fair value measurement.Our significant uses of fair value measurements include the allocation of the purchase price paid to acquire businesses to the assets acquired and liabilitiesassumed in those acquisitions, which requires significant judgment.Recently Adopted Accounting Changes and Recently Issued and Adopted Accounting Standards.See Note 1 to our consolidated financial statements included in this report.34Results of OperationsFiscal Year Ended December 31, 2016 Compared to Fiscal Year Ended December 31, 2015The table below presents our results of operations as a percentage of total revenue and the narrative that follows provides a detailed discussion of certainline items for the years presented. Twelve Months Ended December 31, 2015 2016 Statement of Operations Data: Revenue: Product revenue85.6 % 87.2 % Service revenue14.4 12.8 Total revenue100.0 100.0 Operating expenses: Cost of sales (exclusive of depreciation and amortization shown separately below): Product cost of sales60.0 57.1 Service cost of sales7.3 6.4 Gain from change in fair value of derivative warrants(0.4) 0.0 Selling, general and administrative29.5 26.2 Depreciation and amortization14.4 14.7 Total operating expenses110.8 104.4 Operating loss(10.8) (4.4) Interest expense(24.9) (7.3) Interest income0.2 0.2 Other income (expense), net0.7 (0.1) Loss from equity method investments(0.2) 0.0 Gain from extinguishment of debt, net— 8.5 Gain from sale of subsidiary0.2 — Loss before income taxes(34.8) (3.1) Income tax expense(0.4) (0.3) Net loss(35.2) (3.4) Loss from noncontrolling interest0.3 0.4 Net loss attributable to Clean Energy Fuels Corp.(34.9) (3.0) Revenue. Revenue increased by $ 18.4 million to $ 402.7 million for 2016 , from $384.3 million for 2015 . This increase was primarily due to increasedvolumes, including higher RINs and LCFS Credits sales, and increased station construction sales, partially offset by lower VETC revenue and compressor sales.Volume related revenue increased by $23.3 million between periods primarily due to an increase of 20.5 million gallons delivered, which providedapproximately $17.7 million of increased revenue. This increase in gallons delivered was due to a 30.0 million gallon increase in CNG gallons delivered, whichwas primarily attributable to 16 new refuse customers, six new transit customers and two new trucking customers, partially offset by a 5.8 million decrease in RNGgallons delivered for non-vehicle fuel and a 3.7 million decrease in LNG gallons delivered. Additionally, approximately $5.5 million of the increase in volumerelated revenue was the result of an increase in the effective price charged per gallon delivered. Our effective price per gallon charged was $0.86 for 2016 , a $0.02per gallon increase from $0.84 per gallon charged for 2015 . The increase in our effective price charged was primarily due to increases of $ 18.7 million and $11.9million in revenue from sales of RINs and LCFS Credits, respectively, which do not result in increased costs, partially offset by a decline in the effective price pergallon charged of approximately $0.08 per gallon caused primarily by lower retail prices driven by lower commodity costs. The effective price per gallon isdefined as revenue generated from selling CNG, LNG, RNG and any related RINs and LCFS Credits and providing O&M services to our vehicle fleet customers atstations that we do not own and for which we receive a per-gallon or fixed fee, all divided by the total GGEs delivered less GGEs delivered by non-consolidatedentities, such as entities that are accounted for under the equity method.35Station construction sales increased by $27.1 million between periods, principally from the sale of more full station projects than station upgrades in the2016 period, as full station projects generally have substantially higher price points than station upgrades.These revenue increases were partially offset by a decrease in Clean Energy Compression's revenue of $27.2 million between periods due to lowercompressor sales, which we believe is a result of a lower global demand for compressors.VETC revenue decreased by $4.4 million between periods, primarily due to the VETC credit being changed for 2016 to be based on the diesel gallonequivalent of LNG sold rather than the liquid gallon of LNG sold. See “-Overview-Recent Developments-VETC Expiration” above for additional information.Cost of sales. Cost of sales decreased by $ 2.9 million to $ 255.6 million for 2016 , from $258.5 million for 2015 . This decrease was primarily due to a$24.1 million decrease in compressor costs between periods, as a result of decreased compressor sales and a $3.5 million decrease in gas commodity costs betweenperiods as a result of a decrease in natural gas prices (discussed below). These decreases were partially offset by a $24.7 million increase in costs related toincreased station construction sales between periods.Our effective cost per gallon decreased by $0.04 per gallon between periods, to $0.52 per gallon for 2016 , from $0.56 for 2015 . Our effective cost pergallon is defined as the total costs associated with delivering natural gas, including gas commodity costs, transportation fees, liquefaction charges, and other siteoperating costs, plus the total cost of providing O&M services at stations that we do not own and for which we receive a per-gallon or fixed fee, including directtechnician labor, indirect supervisor and management labor, repair parts and other direct maintenance costs, all divided by the total GGEs delivered less GGEsdelivered by non-consolidated entities, such as entities that are accounted for under the equity method. The decrease in our effective cost per gallon was primarilydue to a decrease in natural gas prices between periods. The decrease in natural gas prices partially offset by the increase in gallons delivered resulted in a netdecrease of $3.5 million in gas commodity costs between periods.Selling, general and administrative. Selling, general and administrative expenses decreased by $ 8.2 million to $ 105.5 million for 2016 , from $ 113.7million for 2015 . This decrease was primarily driven by a $4.9 million decrease in employee-related expenses between periods and a $3.8 million decrease intravel and promotional expenses between periods. These decreases were partially offset by a $0.5 million increase in research and development costs betweenperiods.Depreciation and amortization. Depreciation and amortization increased by $ 4.1 million to $ 59.3 million for 2016 , from $ 55.2 million for 2015 , due topurchases of property and equipment, primarily for our stations.Gain from extinguishment of debt, net. Gain from extinguishment of debt, net was $34.3 million for 2016 as a result of repurchasing and retiring $284.6million in principal amount of our 5.25% Notes and SLG Notes, together with $3.6 million accrued and unpaid interest thereon, for an aggregate purchase price of$185.9 million in cash and 20.3 million shares of our common stock. See Note 10 for further information.Interest expense. Interest expense decreased by $ 66.2 million to $ 29.6 million for 2016 , from $ 95.8 million for 2015 . This decrease was primarily dueto a non-cash charge of $54.9 million in 2015 related to the elimination of unamortized debt issuance costs associated with our termination of our former creditagreement with General Electric Capital Corporation ("GE"), as well as our reduction of outstanding indebtedness in 2016. See “Overview-Recent Developments-Debt Arrangements” and Note 10 for further information.Other income (expense), net. Other income (expense), net, decreased by $ (2.9) million to $ (0.3) million for 2016 , from $ 2.6 million for 2015 . Thisdecrease was primarily due to a $0.8 million increase in the loss from foreign currency transactions not in our subsidiaries’ functional currency, a decrease of $0.5million between periods as result of a litigation settlement in 2015 and a $1.6 million decrease due to a $0.9 million gain from asset disposals in 2015 compared to$0.7 million in losses from asset disposals in 2016.Income tax expense. Income tax expense decreased by $0.3 million to $1.3 million for 2016 , from $1.6 million for 2015 . The decrease in income taxexpense is primarily attributable to a decrease in our tax on foreign operations between periods.Loss from noncontrolling interest. In 2016 , we recorded a $ 1.6 million loss for the noncontrolling interest in the net loss of NG Advantage LLC ("NGAdvantage"), compared to a $1.2 million loss for 2015 . See Note 2 to our consolidated financial statements included in this report for further information. Thenoncontrolling interest in NG Advantage represents a 46.7% interest, which was held by third parties during the applicable periods.36Fiscal Year Ended December 31, 2015 Compared to Fiscal Year Ended December 31, 2014The table below presents our results of operations as a percentage of total revenue and the narrative that follows provides a detailed discussion of certainline items for the years presented. Twelve Months Ended December 31, 2014 2015 Statement of Operations Data: Revenue: Product revenues88.6 % 85.6 % Service revenues11.4 14.4 Total revenues100.0 100.0 Operating expenses: Cost of sales (exclusive of depreciation and amortization shown separately below): Product cost of sales67.9 60.0 Service cost of sales4.0 7.3 Gain from change in fair value of derivative warrants(1.3) (0.4) Selling, general and administrative29.6 29.5 Depreciation and amortization11.4 14.4 Impairment of long-lived asset1.1 — Total operating expenses112.7 110.8 Operating loss(12.7) (10.8) Interest expense(10.4) (24.9) Interest income0.1 0.2 Other income (expense), net(0.6) 0.7 Loss from equity method investments(0.1) (0.2) Gain from sale of subsidiary2.8 0.2 Loss before income taxes(20.9) (34.8) Income tax expense(0.3) (0.4) Net loss(21.2) (35.2) Loss from noncontrolling interest0.3 0.3 Net loss attributable to Clean Energy Fuels Corp.(20.9)% (34.9)% Revenue. Revenue decreased by $44.6 million to $384.3 million for 2015 from $428.9 million for 2014 due to lower effective pricing and fewer stationconstruction and compressor sales. Revenue for station construction sales decreased by $29.6 million principally from the sale of more station upgrades and fewerfull station projects in 2015. Full station projects generally have substantially higher price points than station upgrades. Clean Energy Compression revenuedecreased by $30.3 million due to the effects of a continued global decline in oil prices, the strength of the U.S. dollar and slower than expected sales in China.Approximately $24.3 million of the decrease in revenue was the result of lower effective prices of gallons delivered, which were caused by lower commodity costsin 2015 compared to 2014. Our effective price per gallon charged was $0.84 for 2015, a $0.10 per gallon decrease from $0.94 per gallon charged for 2014. Thedecrease in our effective price was due to lower fuel prices driven by lower commodity costs, partially offset by increased RINs and LCFS credits sales of $8.2 and$4.6 million, respectively. The effective price per gallon is defined as revenues generated from selling CNG, LNG, RNG, any related RINs and LCFS Credits salesand providing O&M services to our vehicle fleet customers at stations that we do not own and for which we receive a per-gallon fee, all divided by the total GGEsdelivered less GGEs delivered by non-consolidated entities, such as equity method investments.37The decrease in revenue was partially offset by a 43.4 million increase in the number of gallons delivered, from 265.1 million gallons delivered in 2014 to308.5 million gallons delivered in 2015, which provided approximately $36.6 million in increased revenue for 2015 compared to 2014. The increase in volume wasdue to a 46.6 million gallon increase in CNG volume delivered, which was primarily attributable to 22 new refuse customers, six new transit customers and sevennew trucking customers partially offset by a decrease of 3.4 million gallons in RNG volume delivered, primarily due to the sale in December 2014 of our interest inDCE and, with it, our interest in a RNG extraction and processing project at the McCommas Bluff landfill in Dallas, Texas. LNG volume delivered was relativelyflat between periods.Cost of sales. Cost of sales decreased by $50.3 million to $258.5 million for 2015, from $308.8 million for 2014. The decrease was primarily due to fewerstation and compressor sales, as we experienced a $24.0 million decrease in station installation costs and a $28.1 million decrease in compressor costs betweenperiods due to decreased activity. Our effective cost per gallon decreased by $0.09 per gallon, from $0.65 per gallon for 2014 to $0.56 per gallon for 2015. Oureffective cost per gallon is defined as the total costs associated with delivering natural gas, including gas commodity costs, transportation fees, liquefactioncharges, and other site operating costs, plus the total cost of providing O&M services at stations that we do not own and for which we receive a per-gallon fee,including direct technician labor, indirect supervisor and management labor, repair parts and other direct maintenance costs, all divided by the total GGEsdelivered less GGEs delivered by non-consolidated entities, such as equity method investments. The decrease in our effective cost per gallon was primarily due tolower natural gas prices. The increased gas volumes delivered partially offset by decreased natural gas prices resulted in a net decrease of $1.2 million in gascommodity costs. In addition, service costs increased as a percentage of service revenues during 2015 due to lower margin services performed by Clean EnergyCryogenics and Clean Energy Compression compared to the prior year. These decreases were partially offset by a $3.0 million increase between periods of othernatural gas delivery costs.Gain from change in fair value of derivative warrants. Derivative gains decreased by $4.3 million to $1.4 million for 2015, from $5.7 million for 2014.These amounts represent the non-cash impact with respect to valuing our outstanding warrants based on our mark-to-market accounting for the warrants during theperiods (see Note 5 to our consolidated financial statements included in this report).Selling, general and administrative. Selling, general and administrative expenses decreased by $12.7 million to $113.7 million for 2015, from $126.4million for 2014. The decrease is primarily attributable to a $6.7 million decrease in employee-related expenses between periods due to company-wide cost cuttingmeasures. Reduced expenditures in travel and entertainment, stock-based compensation expense, and business insurance premiums led to a decrease of $3.0million compared to the prior period. Further contributing to the decrease between periods was the absence in 2015 of certain events that caused increasedexpenses in 2014, such as $1.3 million in retirement benefits related to the retirement of our former Chief Marketing Officer in 2014 and $0.6 million in severancecosts related to the departure of our former Chief Financial Officer in 2014.Impairment of long-lived intangible definite lived assets. In the fourth quarter of 2014, we recorded an impairment to an intangible asset contract acquiredin connection with the Clean Energy Compression acquisition in an amount of $4.8 million. There were no impairments in 2015.Depreciation and amortization. Depreciation and amortization increased by $6.1 million to $55.2 million for 2015, from $49.1 million for 2014. Thisincrease was primarily due to additional depreciation expense in 2015 related to increased property and equipment balances between periods from our expandedstation network and assets we acquired in our acquisition of NG Advantage during the fourth quarter of 2014.Interest expense. Interest expense increased by $51.1 million to $95.8 million for 2015, from $44.7 million for 2014. This increase was primarily due to anon-cash charge related to the elimination of unamortized debt issuance costs of $54.9 million associated with our termination of our Credit Agreement with GE.This increase was partially offset when compared to interest expense 2014 by the extinguishment of the Mavrix Note and resulting discontinuation of interestaccrual thereunder in December 2014 (see Note 10 to our consolidated financial statements included in this report for a description of our outstanding debt).Other income (expense), net. Other income (expense), net, increased by $5.2 million to $2.6 million for 2015, from $(2.6) million for 2014. This increasewas primarily due to foreign currency exchange rate changes between periods on our Clean Energy Compression customer deposits held in foreign currencies anda $1.4 million gain from a litigation settlement in 2015.Loss from equity method investment. Losses from our equity method investments increased by $0.3 million to $0.8 million for 2015, compared to a loss of$0.5 million for 2014 due to losses from our MCEP joint venture, which was formed in September 2014.Gain from sale of subsidiary. In 2014, we recorded a gain of $12.0 million from the sale of DCE and in 2015 we recorded a related earn-out of $0.9million (see Note 2 to our consolidated financial statements included in this report for additional discussion of the sale of DCE).38Income tax expense. Income tax expense increased by $0.5 million to $1.6 million for 2015 compared to $1.1 million for 2014. The increase is primarilyattributable to an increase in our tax on foreign operations between periods.Loss (income) of noncontrolling interest. In 2015, we recorded $1.2 million for the noncontrolling interest in the net income of NG Advantage and in 2014we recorded a total of $1.2 million for the noncontrolling interest in the net income of DCE and NG Advantage (see Note 2 to our consolidated financial statementsincluded in this report for additional discussion of the noncontrolling interests in DCE and NG Advantage). The noncontrolling interests represent the 46.7%noncontrolling interest in NG Advantage upon our acquisition of a 53.3% interest in NG Advantage in October 2014, and the 30% interest of our joint venturepartner in DCE until September 2014 when we sold 19% of DCE to our joint venture partner, which increased its interest from 30% to 49%. In December 2014, wesold our remaining 51% ownership interest in DCE to the joint venture partner.Seasonality and InflationTo some extent, we experience seasonality in our results of operations. Natural gas vehicle fuel amounts consumed by some of our customers tend to behigher in summer months when buses and other fleet vehicles use more fuel to power their air conditioning systems. Natural gas commodity prices tend to behigher in the fall and winter months due to increased overall demand for natural gas for heating during these periods.Since our inception, inflation has not significantly affected our operating results; however, costs for construction, repairs, maintenance, electricity andinsurance are all subject to inflationary pressures, which could affect our ability to maintain our stations adequately, build new stations, expand our existingfacilities or pursue additional facilities, and could materially increase our operating costs.Liquidity and Capital ResourcesCash FlowsCash provided by operating activities was $46.1 million in 2016 , an increase of $58.2 million , compared to $12.1 million used in 2015 . The increase in cashprovided by operating activities was primarily the result of improved operating results of $36.4 million , exclusive of non-cash expenses and gains, due to anincrease in our gross margin and lower interest expense in 2016 compared to 2015 . The increase in cash provided by operations was also attributed to a reductionin net working capital of approximately $21.8 million , which resulted primarily from a decrease in other receivables at year end related to the timing of fuel taxcredit revenue recognition and cash receipts thereof.Cash used in operating activities was $12.1 million in 2015, a decrease of $63.9 million, compared to $76.0 million used in operating activities in 2014. Thedecrease in cash used between periods is primarily due to an improvement in our net loss of $26.4 million, net of non-cash adjustments, and increased cash fromchanges in operating assets and liabilities of approximately $37.5 million which includes the cash receipt of $28.4 million of VETC revenues attributable to naturalgas vehicle fuel sales in 2014, plus $9.1 million of normal changes in working capital due to timing differences.Cash provided by investing activities was $ 1.1 million in 2016 , an increase of $35.0 million compared to $33.9 million used in investing activities in 2015 .The increase in cash provided by investing activities was primarily attributable to decreased capital expenditures of $27.8 million between periods, due to cost-cutting efforts and a decrease in construction of Company-owned stations. Additionally, cash provided by our short-term investments that matured, net ofpurchases, increased by $10.5 million between periods. Partially offsetting this increase in cash provided by investing activities was $0.8 million used in 2016 inconnection with the RNG Ventures, which were formed in November 2016 (see Note 8 to the consolidated financial statements) and $1.1 million received in 2015from the sale of DCE which did not occur again in 2016.Cash used in investing activities was $33.9 million in 2015, a decrease of $13.0 million, compared to $46.9 million in 2014. Capital expenditures decreasedby $37.2 million primarily due to our purchase in 2014 of 67 CNG-In-A-Box units (relatively small turn-key, self-contained CNG stations) for $18.4 million whichwere not repeated in 2015 and less construction of Company owned stations between periods. In 2014, we received $39.8 million in net cash proceeds for the saleof DCE and in 2015 we received an additional $1.1 million for certain related performance tests. Additionally, we had an increase of $3.9 million of cash providedfrom our maturities, net of purchases of short term investments, and a decrease of $6.6 million used for investments in other entities due to the absence of any suchinvestments in 2015.Cash used in financing activities was $ 55.6 million in 2016 compared to $0.4 million provided by financing activities in 2015 . The increase in cash used infinancing activities of $56.0 million was primarily due to a $231.5 million increase in debt payments, repayments of long term debt prior to maturity andrepayment of our line of credit. Partially offsetting this increase in cash used in financing activities was a $96.4 million increase in cash as a result of our sales ofcommon stock through the ATM39program (as defined and discussed below) and a $80.5 million increase as a result of proceeds from our PlainsCapital Bank credit facility and other debt proceeds.Cash provided by financing activities was $0.4 million in 2015, an increase of $26.2 million, compared to $25.8 million used in 2014. The change wasprimarily due to the excess of repayments of borrowings over proceeds from such borrowings in 2014 that was not repeated in 2015. The repayments in 2014 relateto the payoffs of a revolving line of credit and the Mavrix Note. Offsetting the repayments in 2014 was proceeds from the issuance of the Canton Bonds by ourCanton subsidiary for $12.4 million in 2014, with no issuance in 2015. Additionally, there was an increase of $4.0 million in proceeds from issuances of commonstock in 2015 which includes cash received from our ATM Program described below.Capital Expenditures and Other Uses of Cash.We require cash to fund our capital expenditures, operating expenses and working capital requirements, including costs associated with fuel sales, outlaysfor the design and construction of new fueling stations, additions or other modifications to existing fuel stations, debt repayments and repurchases, purchases ofnew CNG tanker trailers, maintenance of LNG production facilities, manufacturing natural gas fueling compressors and other equipment, mergers and acquisitions(if any), financing natural gas vehicles for our customers and general corporate purposes, including geographic expansion (domestically and internationally),pursuing new customer markets and supporting our sales and marketing activities, including supporting legislative and regulatory initiatives.Our business plan calls for approximately $29.0 million in capital expenditures in 2017 , primarily related to the construction of CNG and LNG fuelingstations, additional investments in ANGH stations to add CNG fueling, the purchase of additional CNG trailers by NG Advantage and LNG plant maintenancecosts.We had total indebtedness of approximately $314.3 million in principal amount as of December 31, 2016 , of which approximately $6.1 million , $ 189.6million , $ 55.5 million , $ 54.6 million , $ 4.0 million and $ 4.5 million is expected to become due in 2017 , 2018 , 2019 , 2020 , 2021 and thereafter, respectively.Additionally, we expect our total interest payment obligations relating to our indebtedness to be approximately $ 19.7 million for the year ending December 31,2017 . We generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment and/or refinancing ifand when opportunities arise. With respect to certain of our outstanding indebtedness due in 2018 , our board of directors authorized and approved the purchase ofour outstanding 5.25% Notes in the open market, in accordance with the terms of the indenture governing the 5.25% Notes and at the date of this report we haveused an aggregate $84.3 million for such purchases.We may also elect to invest additional amounts in companies, assets or joint ventures in the natural gas fueling infrastructure, vehicle or services industries oruse capital for other activities or pursuits, including those described above.Sources of Cash.Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, including, if available, grants, VETC andother credits and cash provided by financing activities and sales of assets. As of December 31, 2016 , we had total cash and cash equivalents and short-terminvestments of $ 109.8 million , compared to $146.7 million at December 31, 2015 .We expect cash provided by our operating activities to fluctuate depending on our operating results, which can be affected by natural gas prices and saleactivity, fluctuations in commodity costs and the amount and timing of recognition of government credits, sales of RINs and LCFS Credits, compressor and otherequipment sales, station construction sales and our billing, collections and liability payments, among other factors. See Item 1A. Risk Factors of this report forfurther information.We commenced the ATM Program on November 11, 2015. We were initially permitted to issue and sell, from time to time, through or to Citigroup, shares ofour common stock having an aggregate offering price of up to $75.0 million in the ATM Program. On September 9, 2016 and December 21, 2016, we haveincreased the aggregate offering price of shares of our common stock available for issuance and sale in the ATM Program, first to $110.0 million and subsequentlyto $200.0 million. As of the date of this report, shares of our common stock having an aggregate offering price of $78.7 million remain available for sale in theATM Program. We continue to use any net proceeds from the ATM Program for general corporate purposes, including retiring certain of our indebtedness.40The following table summarizes the activity under the ATM Program for the periods presented: Year ended December 31, Year ended December 31, Through March 7, (in millions) 2015 2016 2017 Gross proceeds $7.0 $103.6 $121.3 Fees and issuance costs 0.5 2.6 3.3 Net proceeds $6.5 $101.0 $118.0 Shares issued 1.6 31.1 36.4 On February 29, 2016, we entered into the Credit Facility with Plains, pursuant to which Plains agreed to lend us up to $50.0 million on a revolving basis fora term of one year. Simultaneously, we drew down $50.0 million under the Credit Facility, which we repaid in full on August 31, 2016. On October 31, 2016, theCredit Facility's maturity date was extended from February 28, 2017 to September 30, 2018. On December 22, 2016 we drew down $23.5 million under the CreditFacility which remained outstanding as of December 31, 2016.See Note 10 to our consolidated financial statements included in this report for a description of all of our outstanding debt.In September and December 2014, we sold all of our interest in DCE and, with it, our interest in a RNG extraction and processing project at the McCommasBluff landfill in Dallas, Texas. As consideration for this sale, we received $7.0 million in cash in September 2014, $40.6 million in cash in December 2014 and$1.1 million in cash in September 2015 due to the results of certain performance tests performed at the McCommas Bluffs project.In February 2017, we entered into the APA to sell the RNG Assets relating to our RNG production business. If this Asset Sale closes as planned, weexpect to receive $155.0 million in cash and the right to receive up to an additional $25.0 million in cash over a five-year period if certain performance criteriarelating to the RNG Assets are met. In addition, we will collect royalties on gas purchased from BP and sold as Redeem at our stations. This royalty payment is inaddition to any payment obligation of BP under the APA.We believe that our current cash and cash equivalents and short-term investments and cash provided by our operating and financing activities will satisfy ourroutine business requirements for at least the next 12 months; however, we will need to raise additional capital to fund any capital expenditures, investments ordebt repayments that we cannot fund through available cash, cash provided by our operations or other sources, such as with our common stock.The timing and necessity of any future capital raise would depend on various factors, including our rate of new station construction, debt repayments (eitherprior to or at maturity), any potential merger or acquisition activity and the other factors that influence our liquidity, as described under “—Overview—Liquidity”above.We may seek to raise additional capital through one or more sources, including, among others, selling assets, obtaining new or restructuring existing debt,obtaining equity capital (including through the ATM Program or other equity offerings), or any combination of these or other available sources of capital. We maynot be able to raise capital when needed, on terms that are favorable to us or our stockholders or at all. Any inability to raise necessary capital may impair ourability to build new stations, develop natural gas fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness andmay reduce our ability to build our business and generate sustained or increased revenue.Contractual ObligationsThe following represents the scheduled maturities of our contractual obligations as of December 31, 2016 :41 Payments Due by Period Contractual Obligations: (in thousands)Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Long-term debt and capital lease obligations(a)$361,420 $25,756 $269,398 $61,733 $4,533 Operating lease commitments(b)48,598 8,055 12,972 9,770 17,801 Long-term "take or pay" natural gas purchasecommitment contracts(c)13,234 3,816 7,969 1,449 — Construction contracts(d)7,268 7,268 — — — Total$430,520 $44,895 $290,339 $72,952 $22,334 _______________________________________________________________________________(a)Consists of long-term debt and capital lease obligations to finance acquisitions and equipment purchases, including future interest payments.(b)Consists of various space and ground leases for our California LNG plant, office spaces and fueling stations as well as leases for equipment.(c)Represents our estimates for two long-term fixed "take-or-pay" natural gas purchase commitment contracts.(d)Consists of our obligations to fund various fueling station construction projects, net of amounts funded through December 31, 2016 and excludingcontractual commitments related to station sales contracts.Off-Balance Sheet ArrangementsAs of December 31, 2016 , we had the following off-balance sheet arrangements that had, or are reasonably likely to have, a material effect on our financialcondition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources:•Outstanding surety bonds for construction contracts and general corporate purposes totaling $ 63.8 million;•Two long-term take-or-pay contracts for the purchase of natural gas; and•Operating leases where we are the lessee.We provide surety bonds primarily for construction contracts in the ordinary course of business, as a form of guarantee. No liability has been recorded inconnection with our surety bonds as we do not believe, based on historical experience and information currently available, that it is probable that any amounts willbe required to be paid under these arrangements for which we will not be reimbursed.We have two long-term take-or-pay contracts that require us to purchase minimum volumes of natural gas at index based prices which expire in March 2020and December 2020, respectively.We have entered into operating lease arrangements for certain equipment and for our office and field operating locations in the ordinary course of ourbusiness. The terms of our leases expire at various dates through 2038. Additionally, in November 2006, we entered into a ground lease for 36 acres in Californiaon which we built our California LNG liquefaction plant. The lease is for an initial term of 30 years and requires payments of $0.2 million per year, plus up to $0.1million per year for each 30 million gallons of production capacity utilized, subject to adjustment based on consumer price index changes. We must also pay aroyalty to the landlord for each gallon of LNG produced at the facility, as well as a fee for certain other services that the landlord provides.Item 7A. Quantitative and Qualitative Disclosures about Market Risk.In the ordinary course of business, we are exposed to various market risks, including commodity price risk and risks related to foreign currency exchangerates.Commodity Price Risk.We are subject to market risk with respect to our sales of natural gas, which have historically been subject to volatile market conditions. Our exposure tomarket risk is heightened when we have a fixed-price sales contract with a customer that is not covered by a futures contract, or when we are otherwise unable topass through natural gas price increases to customers. Natural gas prices42and availability are affected by many factors, including, among others, drilling activity, supply, weather conditions, overall economic conditions and foreign anddomestic government regulations.Natural gas costs represented $75.7 million and $72.8 million of our cost of sales in 2015 and 2016 , respectively.To reduce price risk caused by market fluctuations in natural gas, we may enter into exchange traded natural gas futures contracts. These arrangementsexpose us to the risk of financial loss in situations where the other party to the contract defaults on the contract or there is a change in the expected differentialbetween the underlying price in the contract and the actual price of natural gas we pay at the delivery point. We did not have any futures contracts outstanding atDecember 31, 2016 .Foreign Currency Exchange Rate Risk.Because we have foreign operations, we are exposed to foreign currency exchange gains and losses. Since the functional currency of our foreign subsidiariesis their local currency, the currency effects of translating the financial statements of those foreign subsidiaries, which operate in local currency environments, areincluded in the accumulated other comprehensive income (loss) component of consolidated equity in our consolidated financial statements and do not impactearnings. However, foreign currency transaction gains and losses not in our subsidiaries’ functional currency do impact earnings and resulted in approximately $0.1million of gains in 2016 . During 2016 , our primary exposure to foreign currency rates related to our Canadian operations which had certain outstanding accountsreceivable and accounts payable denominated in the U.S. dollar that were not hedged.We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to our monetary transactions denominated in foreign currency. Ifthe exchange rates on these assets and liabilities were to fluctuate by 10% from rates as of December 31, 2016 , we would expect a corresponding fluctuation in thevalue of the assets and liabilities of approximately $1.7 million .43Item 8. Financial Statements and Supplementary Data.The following tables set forth our quarterly consolidated statements of operations data for the eight quarters ended December 31, 2016 . The information foreach quarter is unaudited and we have prepared the information on the same basis as the audited consolidated financial statements included in this report. Thisinformation includes all adjustments that management considers necessary for the fair presentation of such data. See Item 7. Management’s Discussion andAnalysis of Financial Condition and Results of Operations of this report for descriptions of the effects of any extraordinary, unusual or infrequently occurring itemsrecognized in any of the periods covered by the below quarterly data. The quarterly data should be read together with our consolidated financial statements andrelated notes included in this report. The results of operations for any one quarter are not necessarily indicative of results to be expected in the current period or anyfuture period. (In thousands, except per share data, Unaudited) For the Quarter Ended March 31,2015 June 30,2015 September 30,2015 December 31,2015 Revenue: Product revenue$69,297 $75,744 $77,355 $106,772 Service revenue16,551 11,124 14,902 12,575 Total revenue85,848 86,868 92,257 119,347 Operating expenses: Cost of sales (exclusive of depreciation and amortization shownseparately below): Product cost of sales55,379 59,387 59,313 56,542 Service cost of sales9,354 4,399 7,410 6,701 Derivative loss (gain) on warrant valuation(883) 300 (502) (329) Selling, general and administrative30,233 28,994 27,800 26,626 Depreciation and amortization12,886 13,402 14,000 14,931 Total operating expenses106,969106,482108,021104,471 Operating income (loss)(21,121) (19,614) (15,764) 14,876 Interest expense(10,041) (10,187) (10,355) (65,230) Interest income146 214 203 280 Other income, net547 317 2,648 52 Loss from equity method investments(204) (345) (154) (112) Loss before income taxes(30,673)(29,615)(23,422)(50,134) Income tax benefit (expense)(854) (740) 241 (261) Net loss(31,527)(30,355)(23,181)(50,395) Loss attributable to noncontrolling interest380 393 62 381 Net loss attributable to Clean Energy Fuels Corp. $(31,147)$(29,962)$(23,119)$(50,014) Basic loss per share$(0.34) $(0.33) $(0.25) $(0.54) Diluted loss per share$(0.34) $(0.33) $(0.25) $(0.54) 44 For the Quarter Ended March 31,2016 June 30,2016 September 30,2016 December 31,2016 Revenue: Product revenue$83,992 $94,731 $84,456 $87,859 Service revenue11,790 13,294 12,561 13,973 Total revenue95,782 108,025 97,017 101,832 Operating expenses: Cost of sales (exclusive of depreciation and amortization shownseparately below): Product cost of sales53,371 61,880 55,481 59,212 Service cost of sales5,884 6,848 6,377 6,497 Derivative loss (gain) on warrant valuation2 (1) (26) 3 Selling, general and administrative25,593 25,262 25,914 28,734 Depreciation and amortization14,961 14,920 14,801 14,580 Total operating expenses99,811 108,909 102,547 109,026 Operating loss(4,029) (884) (5,530) (7,194) Interest expense(9,301) (8,136) (6,406) (5,752) Interest income141 315 123 248 Other income (expense), net250 (147) (109) (300) Income (loss) from equity method investments(74) 67 (13) (2) Gain (loss) from extinguishment of debt15,923 10,120 (668) 8,973 Income (loss) before income taxes2,910 1,335 (12,603) (4,027) Income tax expense(381) (432) (416) (110) Net income (loss)2,529 903 (13,019) (4,137) Loss attributable to noncontrolling interest299 627 391 254 Net income (loss) attributable to Clean Energy Fuels Corp. $2,828 $1,530 $(12,628) $(3,883) Basic income (loss) per share$0.03 $0.01 $(0.10) $(0.03) Diluted income (loss) per share$0.03 $0.01 $(0.10) $(0.03) 45INDEX TO FINANCIAL STATEMENTS Page Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 47 Consolidated Balance Sheets 48 Consolidated Statements of Operations 49 Consolidated Statements of Comprehensive Income (Loss) 50 Consolidated Statements of Stockholders' Equity 51 Consolidated Statements of Cash Flows 52 Notes to Consolidated Financial Statements 53 Financial Statement Schedule Schedule II—Valuation and Qualifying Accounts 87 46Report of Independent Registered Public Accounting FirmThe Board of Directors and StockholdersClean Energy Fuels Corp.:We have audited the accompanying consolidated balance sheets of Clean Energy Fuels Corp. and subsidiaries (the "Company") as of December 31, 2015 and2016 , and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2016 . In connection with our audits of the consolidated financial statements, we also have audited the related financial statementschedule. We also have audited the Company's internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management isresponsible for these consolidated financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and forits assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control OverFinancial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule and an opinion on theCompany's internal control over financial reporting based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effectiveinternal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made bymanagement and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understandingof internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believethat our audits provide a reasonable basis for our opinions.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control overfinancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Clean Energy FuelsCorp. and subsidiaries as of December 31, 2015 and 2016 , and the results of its operations and its cash flows for each of the years in the three-year period endedDecember 31, 2016 , in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, whenconsidered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material aspects, the information set forth therein. Also,in our opinion, Clean Energy Fuels Corp. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31,2016 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO)./s/ KPMG LLPIrvine, CaliforniaMarch 7, 201747CLEAN ENERGY FUELS CORP. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share data) December 31, 2015 December 31, 2016 Assets Current assets: Cash and cash equivalents$43,724 $36,119 Restricted cash4,240 6,996 Short-term investments102,944 73,718 Accounts receivable, net of allowance for doubtful accounts of $1,895 and $1,063 as of December 31, 2015 and2016, respectively73,645 79,432 Other receivables60,667 21,934 Inventory29,289 29,544 Prepaid expenses and other current assets14,657 14,021 Total current assets329,166 261,764 Land, property and equipment, net516,324 483,923 Notes receivable and other long-term assets, net14,732 16,377 Investments in other entities5,695 3,475 Goodwill91,967 93,018 Intangible assets, net42,644 38,700 Total assets$1,000,528 $897,257 Liabilities and Stockholders' Equity Current liabilities: Current portion of debt and capital lease obligations$149,856 $5,943 Accounts payable26,906 23,637 Accrued liabilities59,082 52,601 Deferred revenue10,549 7,041 Total current liabilities246,393 89,222 Long-term portion of debt and capital lease obligations352,294 241,433 Long-term debt, related party65,000 65,000 Other long-term liabilities7,896 7,915 Total liabilities671,583 403,570 Commitments and contingencies Stockholders' equity: Preferred stock, $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding no shares— — Common stock, $0.0001 par value. Authorized 224,000,000 shares; issued and outstanding 92,382,717 shares and145,538,063 shares as of December 31, 2015 and 2016, respectively9 15 Additional paid-in capital915,199 1,090,361 Accumulated deficit(591,683) (603,836) Accumulated other comprehensive loss(20,973) (17,675) Total Clean Energy Fuels Corp. stockholders' equity302,552 468,865 Noncontrolling interest in subsidiary26,393 24,822 Total stockholders' equity328,945 493,687 Total liabilities and stockholders' equity$1,000,528 $897,257 See accompanying notes to consolidated financial statements.48CLEAN ENERGY FUELS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share data) Years Ended December 31, 2014 2015 2016 Revenue: Product revenue$380,199 $329,168 $351,038 Service revenue48,741 55,152 51,618 Total revenue428,940 384,320 402,656 Operating expenses: Cost of sales (exclusive of depreciation and amortization shown separately below): Product cost of sales291,462 230,621 229,958 Service cost of sales17,325 27,864 25,592 Gain from change in fair value of derivative warrants(5,748) (1,414) (22) Selling, general and administrative126,435 113,653 105,503 Depreciation and amortization49,058 55,219 59,262 Impairment of long-lived asset4,772 — — Total operating expenses483,304 425,943 420,293 Operating loss(54,364) (41,623) (17,637) Interest expense(44,720) (95,813) (29,595) Interest income363 843 827 Other income (expense), net(2,571) 2,627 (306) Loss from equity method investments(490) (815) (22) Gain from extinguishment of debt, net— — 34,348 Gain from sale of subsidiary11,998 937 — Loss before income taxes(89,784) (133,844) (12,385) Income tax expense(1,075) (1,614) (1,339) Net loss(90,859) (135,458) (13,724) Loss attributable to noncontrolling interest1,200 1,216 1,571 Net loss attributable to Clean Energy Fuels Corp. $(89,659) $(134,242) $(12,153) Loss per share: Basic and diluted$(0.96) $(1.47) $(0.10) Weighted average common shares outstanding: Basic and diluted93,678,432 91,607,578 119,395,423 See accompanying notes to consolidated financial statements.49CLEAN ENERGY FUELS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In thousands) Year Ended December 31, 2014 Year Ended December 31, 2015 Year Ended December 31, 2016 Clean Energy Fuels Corp. Noncontrolling Interest Total Clean Energy Fuels Corp. Noncontrolling Interest Total Clean Energy Fuels Corp. Noncontrolling Interest Total Net loss$(89,659) $(1,200) $(90,859) $(134,242) $(1,216) $(135,458) $(12,153) $(1,571) $(13,724) Other comprehensiveincome (loss), net oftax: Foreign currencytranslationadjustments net of $0tax in 2014, 2015 and2016(7,958) — (7,958) (9,653) — (9,653) 1,567 — 1,567 Foreign currencyadjustments on intra-entity long-terminvestments, net of$0 tax in 2014, 2015and 20164,866 — 4,866 (8,078) — (8,078) 1,652 — 1,652 Unrealized gains onavailable-for-salesecurities, net of $0tax in 2014, 2015 and2016544 — 544 6 — 6 79 — 79 Total othercomprehensive income(loss)(2,548) — (2,548) (17,725) — (17,725) 3,298 — 3,298 Comprehensive loss$(92,207) $(1,200) $(93,407) $(151,967) $(1,216) $(153,183) $(8,855) $(1,571) $(10,426) See accompanying notes to consolidated financial statements.50CLEAN ENERGY FUELS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(In thousands, except share data) Common stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest in Subsidiary Total Stockholders' Equity Shares Amount Balance, December 31, 201389,364,397 $9 $883,045 $(367,782) $(700) $3,966 $518,538 Issuance of common stock, net ofoffering costs838,947 — 6,050 — — — 6,050 Exercise of additional membershipinterest in subsidiary 2,363 2,363 Stock-based compensation— — 11,514 — — — 11,514 Foreign currency adjustments onintra-entity long-term investmentsconverted to equity— — (4,866) — — — (4,866) Acquisition of non-controllinginterest in subsidiary— — — — — 28,075 28,075 Sale of non-controlling interest insubsidiary— — — — — (3,232) (3,232) Net loss— — — (89,659) — (1,200) (90,859) Accumulated other comprehensiveincome (loss)— — — — (2,548) — (2,548) Balance, December 31, 201490,203,344 9 898,106 (457,441) (3,248) 27,609 465,035 Issuance of common stock2,179,373 — 6,314 — — — 6,314 Stock-based compensation— — 10,779 — — — 10,779 Net loss— — — (134,242) — (1,216) (135,458) Accumulated other comprehensiveincome (loss)— — — — (17,725) — (17,725) Balance, December 31, 201592,382,717 9 915,199 (591,683) (20,973) 26,393 328,945 Issuance of common stock, net ofoffering costs32,889,517 4 101,116 — — — 101,120 Issuance of common stock inconnection with debt extinguishment20,265,829 2 65,954 — — — 65,956 Stock-based compensation— — 8,092 — — — 8,092 Net loss— — — (12,153) — (1,571) (13,724) Accumulated other comprehensiveincome (loss)— — — — 3,298 — 3,298 Balance, December 31, 2016145,538,063 $15 $1,090,361 $(603,836) $(17,675) $24,822 $493,687 See accompanying notes to consolidated financial statements.51CLEAN ENERGY FUELS CORP. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Years Ended December 31, 2014 2015 2016 Cash flows from operating activities : Net loss$(90,859) $(135,458) $(13,724) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization49,058 55,219 59,262 Provision for doubtful accounts, notes and inventory1,277 2,656 4,374 Derivative gain(5,748) (1,414) (22) Stock-based compensation expense11,514 10,779 8,092 Amortization of debt issuance cost4,194 2,969 1,527 Non-cash interest charge related to a terminated credit agreement— 54,925 — Accretion of notes payable412 57 — Gain on extinguishment of debt, net— — (34,348) Long-lived intangible impairment4,772 — — Gain on sale of subsidiary(11,998) (937) — Gain on contingent consideration for acquisitions(208) — — Changes in operating assets and liabilities, net of assets and liabilities acquired and disposed: Accounts and other receivables(55,573) 3,426 30,171 Inventory(979) 5,407 (1,520) Prepaid expenses and other assets1,361 2,876 347 Accounts payable9,126 (12,005) (764) Accrued expenses and other7,646 (596) (7,333) Net cash provided by (used in) operating activities(76,005) (12,096) 46,062 Cash flows from investing activities: Purchases of short-term investments(157,629) (158,840) (137,023) Maturities and sales of short-term investments171,902 176,969 165,695 Purchases of and deposits on property and equipment(88,628) (51,415) (23,640) Loans made to customers(9,140) (4,279) (2,816) Payments on and proceeds from sales of loans receivable6,580 928 842 Restricted cash(3,567) 1,650 (2,634) Cash received with sale of subsidiary, net of cash transferred39,760 1,118 — Investments in other entities(6,634) — (833) Capital from equity method investment— — 3,031 Acquisitions, net of cash acquired467 — (1,550) Net cash provided by (used in) investing activities(46,889) (33,869) 1,072 Cash flows from financing activities: Issuances of common stock2,300 7,197 103,591 Fees paid for issuances of common stock— (883) (2,283) Proceeds from debt instruments12,778 384 7,412 Proceeds from revolving line of credit34,607 31 73,508 Proceeds from exercise of additional membership interest in subsidiary6,992 — — Repayment of borrowings under revolving line of credit(40,354) (64) (50,027) Repayment of capital lease obligations and debt instruments(41,036) (6,258) (187,824) Contingent consideration paid relating to business acquisitions(176) — — Payment for debt issuance costs(896) — — Net cash provided by (used in) financing activities(25,785) 407 (55,623) Effect of exchange rates on cash and cash equivalents1,027 (3,099) 884 Net decrease in cash and cash equivalents(147,652) (48,657) (7,605) Cash and cash equivalents, beginning of year240,033 92,381 43,724 Cash and cash equivalents, end of year$92,381 $43,724 $36,119 Supplemental disclosure of cash flow information: Income taxes paid$943 $890 $1,012 Interest paid, net of $3,160, $835 and $447 capitalized, respectively$39,224 $37,662 $29,774 See accompanying notes to consolidated financial statements.52Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(In thousands, except share and per share data)( 1 ) Summary of Significant Accounting PoliciesThe CompanyClean Energy Fuels Corp., together with its majority and wholly owned subsidiaries (hereinafter collectively referred to as the "Company," unless the contextor the use of the term indicates or requires otherwise) is engaged in the business of selling natural gas as an alternative fuel for vehicle fleets and related natural gasfueling solutions to its customers, primarily in the United States and Canada.The Company's principal business is supplying compressed natural gas (“CNG”), liquefied natural gas (“LNG”) and renewable natural gas ("RNG") (whichcan be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehicles and providing operation and maintenance ("O&M") services for naturalgas fueling stations. As a comprehensive solution provider, the Company also designs, builds, operates, and maintains fueling stations; manufactures, sells andservices non-lubricated natural gas fueling compressors and other equipment used in CNG stations and LNG stations; offers assessment, design and modificationsolutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets; transports and sells CNG and LNG to industrialand institutional energy users who do not have direct access to natural gas pipelines; processes and sells RNG; sells tradable credits it generates by selling naturalgas and RNG as a vehicle fuel, including credits under the California and the Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits") and RenewableIdentification Numbers ("RIN Credits" or "RINs") under the federal Renewable Fuel Standard Phase 2; helps its customers acquire and finance natural gasvehicles; and obtains federal, state and local credits, grants and incentives.In addition, through December 29, 2014, the Company processed, extracted, and sold RNG from its former McCommas Bluff landfill in Dallas, Texas. SeeNote 2 for further information.Basis of PresentationThe accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, and, in the opinion of management, reflect alladjustments necessary to state fairly the Company's financial position, results of operations, comprehensive loss and cash flows in accordance with accountingprinciples generally accepted in the United States of America ("US GAAP"). All intercompany accounts and transactions have been eliminated.ReclassificationsPrior period Interest income of $363 and $843 for the years ended December 31, 2014 and 2015, respectively, were reclassified from Interest expense, netas a separate line item to conform to the classifications used to prepare the consolidated financial statements for the year ended December 31, 2016 . Thisreclassification had no material impact on the Company’s financial position, results of operations or cash flows as previously reported.During the year ended December 31, 2016, the Company adopted Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest ,which requires that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related liability, rather than as a deferredcharge. The standard is required to be applied on a retrospective basis. As a result of applying the standard, unamortized debt issuance costs of $273 werereclassified from Prepaid expenses and other current assets to Current portion of debt and capital lease obligations and $4,991 were reclassified from Notesreceivable and other long-term assets to Long-term portion of debt and capital lease obligations as of December 31, 2015.Use of EstimatesThe preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect theamounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and may result in materialeffects on the Company's operating results and financial position. Significant estimates made in preparing the consolidated financial statements include (but are notlimited to) those related to revenue recognition, goodwill and long-lived intangible asset valuations and impairment assessments, income tax valuations, fair valuemeasurements and stock-based compensation expense.53Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)Cash and Cash EquivalentsThe Company considers all highly liquid investments with maturities of three months or less on the date of acquisition to be cash equivalents.Fair Value of Financial InstrumentsThe carrying values of the Company's financial instruments, including cash and cash equivalents, restricted cash, short-term investments, accounts and otherreceivables, notes receivable, accounts payable, accrued expenses and other current liabilities, capital lease obligations and notes payable, approximate theirrespective fair values.InventoryInventory consists of raw materials and spare parts, work in process and finished goods and is stated at the lower of cost (first-in, first-out) or market. TheCompany writes down the carrying value of its inventory to net realizable value for estimated obsolescence or unmarketable inventory in an amount equal to thedifference between the cost of inventory and its estimated realizable value based upon assumptions about future demand and market conditions, among otherfactors.Inventories consisted of the following as of December 31, 2015 and 2016 : 2015 2016 Raw materials and spare parts$25,113 $24,843 Work in process973 845 Finished goods3,203 3,856 Total inventory$29,289 $29,544 Property and EquipmentProperty and equipment are recorded at cost. Depreciation and amortization are recognized over the estimated useful lives of the assets using the straight-linemethod. The estimated useful lives of depreciable assets are three to twenty years for LNG liquefaction plant assets, up to 10 years for station equipment and LNGtrailers, and three to seven years for all other depreciable assets. Leasehold improvements are amortized over the shorter of their estimated useful lives or relatedlease terms. Periodically, the Company receives grant funding to assist in the financing of natural gas fueling station construction. The Company records the grantproceeds as a reduction of the cost of the respective asset. Total grant proceeds received were approximately $959 , $4,292 , and $3,295 for the years endedDecember 31, 2014 , 2015 and 2016 , respectively.Long-Lived AssetsThe Company reviews long-lived assets, which include property and equipment and intangible assets, for impairment whenever events or changes incircumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparingthe carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset or asset group. Estimated future cash flows are determinedby management based on a number of estimates, including future cash flow projections, discount rates and terminal values. In determining these estimates,management considers internally generated information and information obtained from discussions with market participants. The determination of fair valuerequires significant judgment by both management and outside experts engaged to assist in this process. If such assets are considered to be impaired, theimpairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. In the fourth quarter of2014, the Company determined that a long-lived asset related to a contract acquired in its acquisition of the business of Clean Energy Compression was impairedand recorded an impairment charge of $4,772 . The Company had no impairments of the Company’s long-lived assets during the years ended December 31, 2015or 2016 .Intangible assets with finite useful lives are amortized over their respective estimated useful lives using the straight-line method. The estimated useful livesof intangible assets with finite useful lives are two to 20 years for technology, one to eight years for customer relationships, one to 10 years for acquired contracts,two to 10 years for trademarks and trade names, and three years for non-compete agreements. In 2014, the Company acquired a controlling interest in NGAdvantage, LLC (“NG Advantage”)54Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)and allocated approximately $5,600 of the purchase price to the identifiable intangible assets related to customer relationships and trade names.The Company's intangible assets as of December 31, 2015 and 2016 were as follows: 2015 2016 Technology$54,400 $54,400 Customer relationships16,576 16,576 Acquired contracts3,694 4,384 Trademark and trade names8,200 8,200 Non-compete agreements2,060 2,060 Total intangible assets84,930 85,620 Less accumulated amortization(30,442) (37,591) Foreign currency rate change(11,844) (9,329) Net intangible assets$42,644 $38,700 Amortization expense for intangible assets was $7,024 , $5,539 , and $5,794 for the years ended December 31, 2014 , 2015 and 2016 , respectively.Estimated amortization expense for the five years and thereafter succeeding the year ended December 31, 2016 is approximately $6,956 , $5,913 , $4,532 , $3,835 ,$3,184 and $14,280 , respectively.GoodwillGoodwill represents the excess of costs incurred over the fair value of the net assets of acquired businesses. The Company assesses its goodwill using aqualitative approach to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. The qualitative assessmentincludes the potential impact on a reporting unit's fair value of certain events and circumstances, including the Company's market capitalization value,macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity-specific events. If it is determined, based upon the qualitativeassessment, that it is more likely than not that the reporting unit's fair value is less than its carrying amount, then a two-step quantitative impairment test isperformed. The Company performs the impairment test annually on October 1, or more frequently if facts and circumstances warrant a review.The Company is required to use judgment when applying the goodwill impairment test, including, among other considerations, the identification of reportingunits and the assessment of qualitative factors involved in the test. Applying this judgment, the Company has determined that it is a single reporting unit and, basedupon its qualitative assessment of goodwill, has concluded it is more likely than not that the fair value of its reporting unit exceeds its carrying amount and nofurther quantitative analysis was warranted. During the years ended December 31, 2014 , 2015 and 2016 , there were no indicators of impairment to goodwill.The Company reduced its goodwill balance by $7,205 when it sold its subsidiary Dallas Clean Energy McCommas Bluff, LLC ("DCEMB") on December 29,2014 and added $21,070 to its goodwill balance when it acquired NG Advantage on October 14, 2014 (all as described in Note 2 ). The goodwill balances on theconsolidated balance sheets include foreign currency translation gains (losses) of $(6,578) and $1,051 as of December 31, 2015 and 2016 , respectively. See Note 2for further information.Revenue RecognitionThe Company recognizes revenue on various products and services. The table below and the following discussion describe the Company’s revenue by groupof similar products.55Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued) Year Ended December 31, (in thousands)2014 2015 2016 Volume Related$247,899 $260,629 $283,814 Compressor Sales84,775 54,497 27,262 Station Construction Sales67,392 37,830 64,942 VETC28,359 30,986 26,638 Other515 378 — $428,940 $384,320 $402,656 Volume RelatedThe Company’s volume related revenue primarily consists of CNG, LNG and RNG fuel sales, RINs and LCFS Credits sales and O&M services. This revenueis recognized when the following four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred and title and the risks andrewards of ownership have been transferred to the customer or services have been rendered; (iii) the price is fixed or determinable; and (iv) collectability isreasonably assured. Applying these factors, the Company typically recognizes revenue from the sale of natural gas fuel at the time the fuel is dispensed or, in thecase of LNG sales agreements, delivered to the customers' storage facilities. The Company recognizes revenue from O&M service agreements as the relatedservices are provided.The Company generates LCFS Credits when it sells RNG and conventional natural gas for use as a vehicle fuel in California and Oregon and it generatesRIN Credits when it sells RNG as a vehicle fuel in the United States. The Company can sell these credits to third parties who need the credits to comply withfederal and state requirements. RIN and LCFS Credits are included in volume related revenues. The Company recognizes revenue from the generation of thesecredits when it has an agreement in place to sell the credits at a fixed or determinable price.Compressor SalesThe Company recognizes compression revenues through its subsidiary Clean Energy Compression when it sells non-lubricated natural gas fuelingcompressors and other equipment. Clean Energy Compression uses the percentage-of-completion method of accounting to recognize revenue because its projectsare small and it has been able to demonstrate that it can reasonably estimate costs to complete. In these circumstances, revenue is recognized based on costsincurred in relation to total estimated costs to be incurred for a project.Station Construction SalesBeginning January 1, 2016, the Company began using the percentage of completion method to recognize revenue for station construction projects using thecost-to-cost method. Under this method, the Company estimates the percentage of completion of a project based on the costs incurred to date for the associatedcontract in comparison to the estimated total costs for such contract at completion. Historically, the Company recognized revenue on station construction projectsusing the completed contract method because the Company did not have a reliable means to make estimates of the percentage of the contract completed. Under thecompleted contract method, the construction projects were considered substantially complete at the earlier of customer acceptance of the fueling station or the timewhen fuel dispensing activities at the station began. The sale of compressors and related equipment continues to be recognized under the percentage of completionmethod as in previous periods. Effective January 1, 2016, the Company implemented a cost tracking system that provides for a detailed tracking of costs incurredon its station construction projects on a project by project basis. The Company also changed related accounting activities and processes to timely identify andmonitor costs. As a result of this implementation, the Company is able to make reliable estimates as to the percentage of a project that is complete at the end ofeach reporting period. Station construction contracts are generally short-term, except for certain larger and more complex stations, which can take up to 24 months to complete.Management evaluates the performance of contracts on an individual contract basis. Contract price and cost estimates are reviewed periodically as work progressesand adjustments proportionate to the percentage of completion are reflected in contract revenues in the reporting period when such estimates are revised.The nature of accounting for contracts is such that refinements of estimates to account for changing conditions and new developments are continuous andcharacteristic of the process. Many factors that can affect contract profitability may change56Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)during the performance period of a contract, including differing site conditions, the availability of skilled contract labor, the performance of major suppliers andsubcontractors, and unexpected changes in material costs. Changes to these factors may result in revisions to costs and income, which are recognized in the periodin which the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses become known.During the year ended December 31, 2016 , there were no significant losses on open contracts.The Company considers unapproved change orders to be contract variations for which the customer has approved the change of scope but an agreement hasnot been reached as to an associated price change. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims have historicallybeen insignificant. There were no significant unapproved change orders, claims, contract penalties, settlements or changes in contract estimates during the yearended December 31, 2016 .As a result of using the percentage of completion method to recognize revenues, revenue and operating income from station construction sales during theyear ended December 31, 2016 were higher by $18,683 and $1,666 , respectively, than would have been recognized during the period under the completed contractmethod. Additionally, net loss per diluted share was $0.01 lower than what would have been reported using the completed contract method.In certain transactions with its customers, the Company agrees to provide multiple products or services, including construction of and sale of a station,providing O&M services to the station, and sale of fuel to the customer. The Company evaluates the separability of revenues based on Financial AccountingStandards Board ("FASB") authoritative guidance, which provides a framework for establishing whether or not a particular arrangement with a customer has one ormore revenue elements, and allows the Company to use a combination of internal and external objective and reliable evidence to develop management's bestestimate of the fair value of the contract elements. If the arrangement contains a lease, the Company uses the existing evidence of fair value to separate the leasefrom the other elements in the arrangement. The arrangement's consideration that is fixed or determinable is then allocated to each separate unit of accountingbased on the estimated relative selling price of each deliverable, which is determined based on the historical data derived from the Company's stand-alone projects.The revenue allocated to the construction of the station is recognized using the percentage of completion method. The revenue allocated to the O&M services isrecognized ratably over the term of the arrangement and sale of fuel is recognized as the fuel is delivered.See the discussion under “Alternative Fuels Excise Tax Credit” below for further information.OtherThe Company collects and remits taxes assessed by various governmental authorities that are imposed on and concurrent with revenue-producing transactionsbetween the Company and our customers. These taxes may include, but are not limited to, fuel, sales and value-added taxes. The Company reports the collection ofthese taxes on a net basis.Alternative Fuels Excise Tax CreditUnder separate pieces of U.S. federal legislation from October 1, 2006 through December 31, 2014, the Company was eligible to receive a federal alternativefuels tax credit (“VETC”) of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that it sold as vehicle fuel. In December 2015,another alternative fuels tax credit, which the Company also refers to as VETC, was made available for the period from January 1, 2015 through December 31,2016. This new credit was the same as the credit it replaced, except that the alternative fuels tax credit for LNG sold as a vehicle fuel in 2016 was based on thediesel gallon equivalent of LNG sold rather than the liquid gallon of LNG sold.Based on the service relationship with its customers, either the Company or its customers claims the credit. The Company records its VETC credits, if any, asrevenue in its consolidated statements of operations as the credits are fully payable and do not need to offset income tax liabilities to be received. As such, thecredits are not deemed income tax credits under the accounting guidance applicable to income taxes.VETC revenue for years ended December 31, 2014 , 2015 and 2016 was $28,359 , $30,986 and $26,638 , respectively.LNG Transportation CostsThe Company records the costs incurred to transport LNG to its customers in the line item product cost of sales in the accompanying consolidated statementsof operations.57Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)Advertising CostsAdvertising costs are expensed as incurred. Advertising costs amounted to $439 , $44 and $15 for the years ended December 31, 2014 , 2015 and 2016 ,respectively.Stock-Based CompensationThe Company recognizes compensation expense for all stock‑based payment arrangements, net of an estimated forfeiture rate, over the requisite serviceperiod of the award. For stock options, the Company determines the grant date fair value using the Black‑Scholes option pricing model, which requires the input ofcertain assumptions, including the expected life of the stock‑based payment awards, stock price volatility and risk‑free interest rates. For restricted stock units, theCompany determines the grant date fair value based on the closing market price of its common stock on the date of grant. Income TaxesIncome taxes are computed using the asset and liability method. Under this method, deferred income taxes are recognized by applying enacted statutory taxrates applicable to future years to differences between the tax bases and financial carrying amounts of existing assets and liabilities. The impact on deferred taxesof changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidatedfinancial statements in the period of enactment. Valuation allowances are established when management determines it is more likely than not that deferred taxassets will not be realized. When evaluating the need for a valuation analysis, we use estimates involving a high degree of judgment including projected future USGAAP income and the amounts and estimated timing of the reversal of any deferred tax assets and liabilities.The Company has a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken orexpected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxingauthorities based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that has a greater than 50 percentlikelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefit inincome tax expense.The Company operates within multiple domestic and foreign taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involvecomplex issues, which may require an extended period of time to resolve. Although the Company believes that adequate consideration has been given to theseissues, it is possible that the ultimate resolution of these issues could be significantly different than originally estimated.Net Loss Per ShareBasic net loss per share is computed by dividing the net loss attributable to Clean Energy Fuels Corp. by the weighted-average number of common sharesoutstanding and common shares issuable for little or no cash consideration during the period. Diluted net loss per share is computed by dividing the net lossattributable to Clean Energy Fuels Corp. by the weighted-average number of common shares outstanding and common shares issuable for little or no cashconsideration during the period and potentially dilutive securities outstanding during the period, and therefore reflects the dilution from common shares that maybe issued upon exercise or conversion of these potentially dilutive securities, such as stock options, warrants, convertible notes and restricted stock units. Thedilutive effect of stock awards and warrants is computed under the treasury stock method. The dilutive effect of convertible notes and restricted stock units iscomputed under the if-converted method. Potentially dilutive securities are excluded from the computations of diluted net loss per share if their effect would beantidilutive.The following potentially dilutive securities have been excluded from the diluted net loss per share calculations because their effect would have beenantidilutive: 2014 2015 2016Stock options11,486,301 11,487,938 11,467,796Warrants6,130,682 2,130,682 —Convertibles notes35,185,979 35,185,979 16,573,799Restricted stock units2,591,752 3,419,776 2,072,30458Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)In 2013, 5,000,000 shares of common stock subject to the GE Warrant, as defined and described in Notes 10 and 12 , were included in the basic net loss pershare calculation. On September 11, 2014, the Company determined it no longer met certain conditions required to include 4,000,000 of the shares of commonstock subject to the GE Warrant in its weighted average share calculations. As a result, from September 11, 2014 to December 31, 2015, the Company (i) excluded4,000,000 shares of common stock issuable upon exercise of the GE Warrant from the weighted average number of shares outstanding in the basic net loss pershare calculations, and (ii) included the remaining 1,000,000 shares of common stock issuable upon exercise of the GE Warrant in the weighted-average number ofshares outstanding in the basic and diluted net loss per share calculations, as 500,000 shares became exercisable in 2012 upon the execution of the associatedCredit Agreement, as defined and described in Note 10 and an additional 500,000 shares became exercisable on December 31, 2014 in connection with anamendment to the Credit Agreement executed on December 29, 2014. On December 31, 2015, the Company terminated the Credit Agreement. As a result of thistermination and as of it effective date, 4,000,000 shares subject to the GE Warrant that were not then vested became incapable of vesting because the vestingconditions relating to these shares could not occur following such termination and, accordingly, the GE Warrant effectively became exercisable for the 1,000,000shares that were then vested. On October 4, 2016, the holders of the GE Warrant exercised the warrant to purchase the 1,000,000 shares of common stock that werevested and exercisable thereunder pursuant to the cashless exercise provisions thereof, which resulted in the Company's issuance of 997,740 shares of commonstock to such holders. Following such exercise, the GE Warrant has been surrendered and canceled in full and the Company has no further obligations under suchGE Warrant.Foreign Currency TranslationThe Company uses the local currency as the functional currency of its foreign subsidiaries. Accordingly, all assets and liabilities outside the United States aretranslated into U.S. dollars at the rate of exchange in effect at the balance sheet date. Revenue and expense items are translated at the weighted-average exchangerates prevailing during the period. Foreign currency translation adjustments are recorded as accumulated other comprehensive income (loss) in stockholders'equity.Foreign currency transactions occur when there is a transaction denominated in other than the respective entity's functional currency. The Company recordsthe changes in the exchange rate for these transactions in the consolidated statements of operations. For the years ended December 31, 2014 , 2015 and 2016 ,foreign exchange transaction gains and (losses) were included in other income (expense) in the accompanying consolidated statements of operations and were$(3,188) , $975 and $132 , respectively.Comprehensive LossComprehensive loss is defined as the change in equity (net assets) of a business enterprise during the period from transactions and other events andcircumstances from non-owner sources. The difference between net income and comprehensive loss for the years ended December 31, 2014 , 2015 and 2016 wasprimarily comprised of the Company's foreign currency translation adjustments. During 2014, the Company converted a long-term equity intra-entity investment toequity and the related translation adjustments were reclassified to additional paid-in capital.Concentration of Credit RiskCredit is extended to all customers based on financial condition, and collateral is generally not required. Concentrations of credit risk with respect to tradereceivables are limited because of the large number of customers comprising the Company's customer base and dispersion across many different industries andgeographies. Certain international customers, however, have historically been slower to pay on trade receivables. Accordingly, the Company continually monitorscollections and payments from its customers and maintains a provision for estimated credit losses based upon its historical experience and any specific customercollection issues that it has identified. In addition, through Export Development Canada, Clean Energy Compression maintains accounts receivable insurance on asubstantial portion of its foreign trade receivables, which covers up to 90% of the related outstanding balance. Although credit losses have historically been withinthe Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has inthe past.The Company places its cash and cash equivalents with high credit quality financial institutions. At times, such investments may be in excess of the FederalDeposit Insurance Corporation ("FDIC"), Canadian Deposit Insurance Corporation ("CDIC"), and other foreign insurance limits. Financial instruments thatpotentially subject the Company to concentrations of credit risk consist principally of cash deposits. The amounts in excess of FDIC insurance limits were $40,691and $34,439 as of December 31, 2015 and 2016 , respectively.59Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)Recently Adopted Accounting Changes and Recently Issued and Adopted Accounting StandardsIn January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The newstandard eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under theamendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount andrecognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard is effective for annualand interim goodwill impairment tests in fiscal years beginning after December 15, 2019, which for the Company is the first quarter of 2020 and should be appliedon a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company will evaluatethe impact this ASU will have on its consolidated financial statements and related disclosures.In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The new standard providesguidance to entities to assist with evaluating when a set of transferred assets and activities (collectively, the "set") is a business and provides a criteria to determinewhen a set is not a business. Under the new guidance, when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a singleidentifiable asset, or group of similar assets, the assets acquired would not represent a business. Also, to be considered a business, an acquisition would have toinclude an input and a substantive process that together significantly contribute to the ability to produce outputs. The new standard is effective for fiscal years, andinterim periods within those fiscal years, beginning after December 15, 2017, which for the Company is the first quarter of 2018 and should be applied on aprospective basis to any transactions occurring within the period of adoption. Early adoption is permitted for interim or annual periods in which the financialstatements have not been issued. The Company will evaluate the impact this ASU will have on its consolidated financial statements and related disclosures.In December 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new standard requires restricted cashand restricted cash equivalents to be included as components of total cash and cash equivalents as presented on the statement of cash flows. This pronouncement iseffective for reporting periods beginning after December 15, 2017, which for the Company is the first quarter of 2018. Early adoption is allowed in an interim orannual reporting period. The Company will evaluate the impact this ASU will have on its consolidated financial statements and related disclosures.In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Under the newstandard, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving)entity is required to recognize a deferred tax asset or liability, as well as the related deferred tax benefit or expense, upon purchase or receipt of the asset. Thispronouncement is effective for reporting periods beginning after December 15, 2017, which for the Company is the first quarter of 2018, with early adoptionpermitted. The Company will early adopt the standard as of January 1, 2017. The impact of adoption will not have a material impact to the Company's financialstatements.In September 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments .The new standard provides clarification as to the classification of certain transactions as operating, investing or financing activities. This pronouncement iseffective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company will evaluate the impact this ASU will have on itsconsolidated financial statements and related disclosures.In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments . The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology,which will result in the more timely recognition of losses. This pronouncement is effective for reporting periods beginning after December 15, 2019, which for theCompany is the first quarter of 2020. The Company is evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718) ): Improvements to Employee Share-BasedPayments Accounting . The new standard was issued to simplify the accounting for share-based payment transactions, including income tax consequences, theclassification of awards as either equity or liabilities, and the classification on the statement of cash flows. The Company will adopt the standard in the first quarterof fiscal 2017, prospectively. In connection with the adoption, the Company will elect to recognize forfeitures when they occur. Previously, the Companyestimated a forfeiture60Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(1) Summary of Significant Accounting Policies (Continued)rate in accordance with prior guidance. This election will be implemented under the modified retrospective approach, resulting in an immaterial decrease toretained earnings representing the cumulative additional compensation expense that would have been amortized through the date of adoption had this accountingpolicy election been in place.In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard requires most leases to be recognized on the balance sheet which willincrease reported assets and liabilities. Lessor accounting remains substantially similar to current guidance. The new standard is effective for annual and interimperiods in fiscal years beginning after December 15, 2018, which for the Company is the first quarter of 2019, and mandates a modified retrospective transitionmethod. The Company is evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities . The new standardrequires equity investments to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equityinvestments without readily determinable fair values, eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value,requires use of the exit price notion when measuring fair value, requires separate presentation in certain financial statements, and requires an evaluation of the needfor a valuation allowance on a deferred tax asset related to available-for-sale securities. The new standard is effective for fiscal years beginning after December 15,2017, which for the Company is the first quarter of 2018. The Company is evaluating the impact this ASU will have on its consolidated financial statements andrelated disclosures.In May 2014, the FASB issued an accounting standard update related to revenue from contracts with customers, which, along with amendments issued in2015 and 2016, will provide a single, comprehensive revenue recognition model for all contracts with customers. The underlying principle is to recognize revenuewhen promised goods or services are transferred to customers in amounts that reflect the consideration that is expected to be received for those goods or services.The new standard also requires entities to enhance disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contractswith customers. This accounting standard update, as amended, will be effective for annual reporting periods after December 15, 2017, which for the Company isthe first quarter of fiscal 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulativeeffect recognized in retained earnings as of the date of adoption ("modified retrospective basis"). The Company expects to adopt this accounting standard update ona modified retrospective basis and is currently evaluating the impact of this accounting standard update on its consolidated financial statements and relateddisclosures.(2) Acquisitions and DivestituresNG AdvantageOn October 14, 2014, the Company entered into a Common Unit Purchase Agreement ("UPA") with NG Advantage. NG Advantage is engaged in thebusiness of transporting CNG in high-capacity trailers to industrial and institutional energy users, such as hospitals, food processors, manufacturers and papermills, that do not have direct access to natural gas pipelines. The Company viewed the acquisition as a strategic investment in the expansion of the Company'sinitiative to deliver natural gas to industrial and institutional energy users. Under the terms of the UPA, the Company paid NG Advantage $37,650 for a 53.3%controlling interest in NG Advantage. $19,000 of the purchase price was paid in cash on October 14, 2014 and the remaining $18,650 of the purchase price waspaid in the form of an unsecured promissory note issued by the Company (the "NG Advantage Note"). The principal amount of the NG Advantage Note was paidby the Company in two payments as follows: (i) $3,000 was paid on January 13, 2015 and (ii) the remaining $15,650 was paid on April 1, 2015. The NGAdvantage Note did not bear interest. The fair value of the NG Advantage Note delivered to NG Advantage is excluded from the Company's consolidatedstatements of cash flows as it is a non-cash investing activity. The consideration paid is accounted for as an intercompany transaction, as NG Advantage's financialresults are included in the Company's consolidated financial statements.The Company recognized the assets acquired and the liabilities assumed, measured at their fair values, as of the date of acquisition. The following tablesummarizes the allocation of the aggregate purchase price to the fair value of the assets acquired and liabilities assumed:61Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(2) Acquisitions and Divestitures (Continued)Current assets$40,558 Property, plant and equipment20,862 Other long-term assets5,115 Identifiable intangible assets5,600 Goodwill21,070 Total assets acquired93,205 Current liabilities assumed(9,165) Long-term debt including capital leases assumed, excluding current installments(17,604) Other liabilities(711) Noncontrolling interest(28,075) Total purchase price$37,650 In connection with its purchase of a controlling interest in NG Advantage, the Company assumed debt of $20,439 on a consolidated basis related topurchases of capital assets and working capital needs. Immediately after the Company's purchase of the controlling interest, $10,361 of such debt was paid withproceeds of the Company's investment in NG Advantage, and the related debt instruments were canceled.Management allocated $5,600 of the purchase price to the identifiable intangible assets related to customer relationships and trade names that were acquiredwith the acquisition. The fair value of the identifiable intangible assets will be amortized on a straight-line basis over the estimated useful lives of such assetsranging from four to seven years . The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill, which primarily representsadditional market share available to the Company as a result of the acquisition, and is not deductible for income tax purposes.Management determined the fair value of the noncontrolling interest to be $28,075 using a market approach and using inputs that included use of acomparable transaction to calculate the value of the noncontrolling interest adjusted for a control premium.The results of NG Advantage's operations have been included in the Company's consolidated financial statements since October 14, 2014. The Companyrecorded a loss from the noncontrolling interest of $1,200 , $1,216 and $1,571 for the years ended December 31, 2014 , 2015 and 2016 , respectively. Thenoncontrolling interest was $26,393 and $24,822 as of December 31, 2015 and 2016 , respectively. For the year ended December 31, 2016 , NG Advantagepurchased assets for $1,550 .DCE and DCEMBOn September 4, 2014, Mavrix, LLC ("Mavrix"), a wholly owned subsidiary of the Company, sold to Cambrian Energy McCommas Bluff III LLC("Cambrian") 19% of its then 70% interest in Dallas Clean Energy, LLC ("DCE"). On December 29, 2014, Mavrix entered into a Membership Interest PurchaseAgreement (the "Agreement") with Cambrian, pursuant to which Mavrix sold to Cambrian its entire remaining 51% interest in DCE. DCE owns all of the equityinterests in DCEMB, which owns a RNG extraction and processing project at the McCommas Bluff landfill in Dallas, Texas. As consideration for the sale of DCE,the Company, through Mavrix, received $6,992 in cash in September 2014, $40,588 in cash in December 2014 and $1,118 in cash in September 2015 due to theresults of certain performance tests performed at the McCommas Bluffs project in accordance with the terms of the Agreement. The Company continues to havethe right to market and sell biomethane produced at the McCommas Bluff project under its Redeem™ renewable natural gas vehicle fuel brand. The transactionresulted in a total gain of $12,935 , comprised of $11,998 and $937 that was recorded in gain from sale of subsidiary in the Company's statements of operations forthe years ended December 31, 2014 and 2015, respectively. Included in the determination of the total gain is goodwill that was allocated to the disposed businessbased on the relative fair values of the business disposed and the portion of the reporting unit that was retained.The Company determined that the disposal did not meet the definition of a discontinued operation as the disposal did not represent a significant disposal norwas the disposal a strategic shift in the Company's strategy.(3) Restricted CashThe Company classifies restricted cash as short-term and a current asset if the cash is expected to be used in operations within a year or to acquire a currentasset. Otherwise, the restricted cash is classified as long-term. Restricted cash as of December 31, 2015 and 2016 consisted of the following: December 31, 2015 December 31, 2016 Short-term restricted cash: Standby letters of credit$1,631 $1,753 Canton Bonds (see Note 10)2,609 3,665 Held in escrow— 1,578 Total short-term restricted cash$4,240 $6,996 (4) InvestmentsAvailable-for-sale securities are carried at fair value, inclusive of unrealized gains and losses. Unrealized gains and losses are included in othercomprehensive income (loss) net of applicable income taxes. Gains or losses on sales of available-for-sale securities are recognized on the specific identificationbasis. All of the Company's short-term investments are classified as available-for-sale securities.The Company reviews available-for-sale securities for other-than-temporary declines in fair value below their cost basis each quarter and whenever events orchanges in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length oftime and the extent to which the fair value has been below its cost basis and adverse conditions related specifically to the security, including any changes to thecredit rating of the security. As of December 31, 2016 , the Company believes its carrying values for its available-for-sale securities are properly recorded.Short-term investments as of December 31, 2015 consisted of the following: Amortized Cost Gross Unrealized Losses Estimated Fair Value Municipal bonds & notes$16,797 $(7) $16,790 Zero coupon bonds500 (1) 499 Corporate bonds37,181 (77) 37,104 Certificate of deposits48,551 — 48,551 Total short-term investments$103,029 $(85) $102,944 Short-term investments as of December 31, 2016 consisted of the following: Amortized Cost Gross Unrealized Losses Estimated Fair Value Municipal bonds & notes$8,791 $(4) $8,787 Corporate bonds21,517 (7) 21,510 Certificate of deposits43,421 — 43,421 Total short-term investments$73,729 $(11) $73,718 ( 5 ) Fair Value MeasurementsThe Company follows the authoritative guidance for fair value measurements with respect to assets and liabilities that are measured at fair value on arecurring basis and non-recurring basis. Under the standard, fair value is defined as the exit price,62Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(5) Fair Value Measurements (Continued)or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurementdate. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use ofunobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing theasset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’sassumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in thecircumstances. The hierarchy consists of the following three levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that arenot active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; Level 3 inputs are unobservable inputs forthe asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.As of December 31, 2016 , the Company's financial instruments consisted of available-for-sale securities, debt instruments and liability-classifiedwarrants. The Company’s available-for-sale securities are classified within Level 2 because they are valued using the most recent quoted prices for identical assetsin markets that are not active and quoted prices for similar assets in active markets. The liability-classified warrants are classified within Level 3 because theCompany uses the Black-Scholes option pricing model to estimate the fair value based on inputs that are not observable in any market. The fair values of theCompany's debt instruments approximated their carrying values as of December 31, 2015 and 2016 . See Note 10 for further information about the Company's debtinstruments. There were no transfers of assets between Level 1, Level 2 or Level 3 of the fair value hierarchy as of as of December 31, 2015 and December 31,2016 , respectively.The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 andDecember 31, 2016 , respectively:DescriptionBalance atDecember 31, 2015 Level 1 Level 2 Level 3Assets: Available-for-sale securities(1): Municipal bonds and notes$16,790 $— $16,790 $—Zero coupon bonds499 — 499 —Corporate bonds37,104 — 37,104 —Certificate of deposits48,551 — 48,551 —Liabilities: Warrants(2)632 — — 632DescriptionBalance atDecember 31, 2016 Level 1 Level 2 Level 3Assets: Available-for-sale securities(1): Municipal bonds and notes$8,787 $— $8,787 $—Corporate bonds21,510 — 21,510 —Certificate of deposits43,421 — 43,421 —Liabilities: Warrants(2)581 — — 581_______________________________________________________________________________(1)Included in short-term investments in the consolidated balance sheets. See Note 4 for further information.(2)Included in accrued liabilities and other long-term liabilities in the consolidated balance sheets.63Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(5) Fair Value Measurements (Continued)The following tables provide a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the tables abovethat used significant unobservable inputs (Level 3).Liabilities: Warrants2015 2016 Beginning Balance$2,046 $632 Gain included in earnings(1,414) (51) Ending Balance$632 $581 (6) Other ReceivablesOther receivables as of December 31, 2015 and 2016 consisted of the following: 2015 2016 Loans to customers to finance vehicle purchases$10,531 $7,416 Accrued customer billings7,106 4,308 Fuel tax credits40,730 6,358 Other2,300 3,852 Total other receivables$60,667 $21,934 (7) Land, Property and EquipmentLand, property and equipment as of December 31, 2015 and 2016 consisted of the following: 2015 2016 Land$2,858 $2,858 LNG liquefaction plants94,634 94,634 RNG plants46,397 47,545 Station equipment316,258 341,605 Trailers50,414 54,985 Other equipment83,687 93,118 Construction in progress139,586 117,662 733,834 752,407 Less accumulated depreciation(217,510) (268,484) Total land, property and equipment, net$516,324 $483,923 Included in the land, property and equipment are capitalized software costs of $22,886 and $25,728 as of December 31, 2015 and 2016 , respectively. Theaccumulated amortization on the capitalized software costs is $13,793 and $17,237 as of December 31, 2015 and 2016 , respectively. The Company recorded$2,993 , $3,053 and $3,444 of amortization expense related to the capitalized software costs during the years ended December 31, 2014 , 2015 and 2016 ,respectively.As of December 31, 2015 and 2016 , $5,955 and $4,053 , respectively, are included in accounts payable and accrued liabilities balances, which amounts arerelated to purchases of property and equipment. These amounts are excluded from the consolidated statements of cash flows as they are non-cash investingactivities.(8) Investment in Other EntitiesIn November 2016, the Company, through its wholly owned subsidiary, Clean Energy Renewables ("Renewables"), entered into agreements to form jointventures with Aria Energy Operating LLC ("Aria"), a developer of RNG production facilities, to64Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(8) Investment in Other Entities (Continued)develop RNG production facilities at a Republic Services landfill in Oklahoma City, Oklahoma and an Advanced Disposal landfill near Atlanta, Georgia. Thesejoint ventures are referred to as the "RNG Ventures." Renewables and Aria each have a 50% ownership interest in the RNG Ventures and, subject to certainconditions, are each responsible for 50% of the costs of developing the RNG production facilities that are owned by the RNG Ventures. Additionally, Renewableshas the exclusive right to purchase 100% of the RNG that will be produced by these facilities for the vehicle fuels market. The Company accounts for its interest inthe RNG Ventures using the equity method of accounting as the Company has the ability to exercise significant influence over these operations. As ofDecember 31, 2016 , the Company had an investment balance of $833 in the RNG Ventures.On September 16, 2014, the Company formed a joint venture with Mansfield Ventures LLC (“Mansfield Ventures”) called Mansfield Clean EnergyPartners LLC ("MCEP"), which is designed to provide natural gas fueling solutions to bulk fuel haulers in the United States. The Company and MansfieldVentures each have a 50% ownership interest in MCEP. The Company accounts for its interest in MCEP using the equity method of accounting as the Companyhas the ability to exercise significant influence over MCEP's operations. The Company recorded a loss from this investment of $490 , $815 and $22 for the yearsended December 31, 2014 , 2015 and 2016 , respectively. Additionally, during the year ended December 31, 2016 , the Company received a return of capital of$3,031 with no change in ownership interest. The Company has an investment balance of $4,695 and $1,642 as of December 31, 2015 and 2016 , respectively.(9) Accrued LiabilitiesAccrued liabilities as of December 31, 2015 and 2016 consisted of the following: 2015 2016 Accrued alternative fuels incentives (1)15,651 9,840 Accrued employee benefits3,042 4,317 Accrued interest3,718 1,849 Accrued gas and equipment purchases14,133 11,657 Accrued property and other taxes5,344 4,572 Salaries and wages9,537 12,293 Other7,657 8,073 Total accrued liabilities$59,082 $52,601 (1) Includes VETC and tradable RINs and LCFS Credits (discussed in Note 1 ) payable to third parties.( 10 ) DebtDebt and capital lease obligations as of December 31, 2015 and 2016 consisted of the following and are further discussed below:65Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued) December 31, 2015 Principal Balances Unamortized Debt FinancingCosts Balance, Net of FinancingCosts 7.5% Notes (1)$150,000 399 $149,601 SLG Notes145,000 38 $144,962 5.25% Notes250,000 3,985 $246,015 Canton Bonds10,910 514 $10,396 Capital lease obligations6,448 — $6,448 Other debt10,056 328 $9,728 Total debt and capital lease obligations572,414 5,264 567,150 Less amounts due within one year(150,129) (273) (149,856) Total long-term debt and capital lease obligations$422,285 $4,991 $417,294 December 31, 2016 Principal Balances Unamortized Debt FinancingCosts Balance, Net of FinancingCosts 7.5% Notes (1)150,000 274 $149,726 5.25% Notes110,450 1,088 $109,362 PlainsCapital Bank Credit Facility23,500 — 23,500 Canton Bonds9,520 373 $9,147 Capital lease obligations6,028 — $6,028 Other debt14,850 237 $14,613 Total debt and capital lease obligations314,348 1,972 312,376 Less amounts due within one year(6,126) (183) (5,943) Total long-term debt and capital lease obligations$308,222 $1,789 $306,433 (1) Includes 7.5% $65,000 in principal amount held by T. Boone Pickens ("Pickens") as of December 31, 2016, which is classified as “Long-term debt, related party” on the consolidatedbalance sheets. See the description below for additional information.The following is a summary of the aggregate maturities of debt and capital lease obligations for each of the years ending December 31, as of December 31,2016: 2017 2018 2019 2020 2021 Thereafter 7.5% Notes (1)— 50,000 50,000 50,000 — — 5.25% Notes— 110,450 — — — — PlainsCapital Bank Credit Facility— 23,500 — — — — Canton Bonds1,420 1,460 1,555 1,665 1,695 1,725 Capital lease obligations1,890 1,569 1,568 462 265 274 Other debt2,816 2,667 2,370 2,507 2,036 2,454 Total$6,126 $189,646 $55,493 $54,634 $3,996 $4,453 7.5% NotesOn July 11, 2011, the Company entered into a loan agreement (the "CHK Agreement") with Chesapeake NG Ventures Corporation ("Chesapeake"), anindirect wholly owned subsidiary of Chesapeake Energy Corporation, whereby Chesapeake agreed to purchase from the Company up to $150,000 of debtsecurities pursuant to the issuance of three convertible promissory notes over a three -year period, each having a principal amount of $50,000 (each a "CHK Note"and collectively the "CHK Notes" and,66Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued)together with the CHK Agreement and other transaction documents, the "CHK Loan Documents"). The first CHK Note was issued on July 11, 2011 and the secondCHK Note was issued on July 10, 2012.On June 14, 2013 (the "Transfer Date"), Pickens and Green Energy Investment Holdings, LLC, an affiliate of Leonard Green & Partners, L.P. (collectively,the "Buyers") and Chesapeake entered into a note purchase agreement ("Note Purchase Agreement") pursuant to which Chesapeake sold the outstanding CHKNotes (the "Sale") to the Buyers. Chesapeake assigned to the Buyers all of its right, title and interest under the CHK Loan Documents (the "Assignment") and eachBuyer severally assumed all of the obligations of Chesapeake under the CHK Loan Documents arising after the Sale and the Assignment including, withoutlimitation, the obligation to advance an additional $50,000 to the Company in June 2013 (the "Assumption"). The Company also entered into the Note PurchaseAgreement for the purpose of consenting to the Sale, the Assignment and the Assumption.Contemporaneously with the execution of the Note Purchase Agreement, the Company entered into a loan agreement with each Buyer (collectively, the"Amended Agreements"). The Amended Agreements have the same terms as the CHK Agreement, other than changes to reflect the new holders of the CHK Notes.Immediately following execution of the Amended Agreements, the Buyers delivered $50,000 to the Company in satisfaction of the funding requirement they hadassumed from Chesapeake (the "2013 Advance"). In addition, the Company canceled the existing CHK Notes and issued replacement notes and the Company alsoissued notes to the Buyers in exchange for the 2013 Advance (the replacement notes and the notes issued in exchange for the 2013 Advance are referred to hereinas the " 7.5% Notes").The 7.5% Notes have the same terms as the original CHK Notes, other than changes to reflect their different holders. They bear interest at the rate of 7.5%per annum and are convertible at the option of the holder into shares of the Company's common stock at a conversion price of $15.80 per share (the " 7.5% NotesConversion Price"). Upon written notice to the Company, each holder of a 7.5% Note has the right to exchange all or any portion of the principal and accrued andunpaid interest under its 7.5% Notes for shares of the Company's common stock at the 7.5% Notes Conversion Price.Additionally, subject to certain restrictions, the Company can force conversion of each 7.5% Note into shares of its common stock if, following the secondanniversary of the issuance of a 7.5% Note, such shares trade at a 40% premium to the 7.5% Notes Conversion Price for at least 20 trading days in any consecutive30 trading day period.The entire principal balance of each 7.5% Note is due and payable seven years following its issuance and the Company may repay each 7.5% Note atmaturity in shares of its common stock (with a value determined by the per share volume weighted-average price for the 20 trading days prior to the maturity date)or cash. All of the shares issuable upon conversion of the 7.5% Notes have been registered for resale by their holders pursuant to a registration statement that hasbeen filed with and declared effective by the Securities and Exchange Commission.The Amended Agreements provide for customary events of default which, if any of them occurs, would permit or require the principal of, and accruedinterest on, the 7.5% Notes to become, or to be declared, due and payable. No events of default under the 7.5% Notes have occurred as of December 31, 2016 .On August 27, 2013, Green Energy Investment Holdings, LLC transferred $5,000 in principal amount of the 7.5% Notes to certain third parties.As a result of the foregoing transactions, as of December 31, 2016 , (i) Pickens held 7.5% Notes in the aggregate principal amount of $65,000 , (ii) GreenEnergy Investment Holdings, LLC held 7.5% Notes in the aggregate principal amount of $80,000 and (iii) other third parties held 7.5% Notes in the aggregateprincipal amount of $5,000 . SLG NotesOn August 24, 2011, the Company entered into convertible note purchase agreements (each, an "SLG Agreement" and collectively the "SLG Agreements")with each of Springleaf Investments Pte. Ltd., a wholly owned subsidiary of Temasek Holdings Pte. Ltd., Lionfish Investments Pte. Ltd., an investment vehiclemanaged by Seatown Holdings International Pte. Ltd., and Greenwich Asset Holding Ltd., a wholly owned subsidiary of RRJ Capital Master Fund I, L.P. (each, a"Purchaser" and collectively, the "Purchasers"), pursuant to which the Purchasers agreed to purchase from the Company $150,000 of 7.5% convertible promissorynotes due in August 2016 (each a "SLG Note" and collectively the "SLG Notes"). The transaction closed and the SLG Notes were issued on August 30, 2011. OnMarch 1, 2012, Springleaf Investments Pte Ltd. transferred $24,000 in principal amount of the SLG Notes to Baytree Investments (Mauritius) Pte Ltd.67Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued)On February 29, 2016, and pursuant to the consent of the holders of the SLG Notes, the Company prepaid in cash an aggregate of $60,000 in principalamount and $1,812 in accrued and unpaid interest owed under the SLG Notes.On July 14, 2016, the Company entered into separate privately negotiated exchange agreements with each holder of an SLG Note to exchange theoutstanding principal amount of the SLG Notes, totaling $85,000 for all SLG Notes and all accrued and unpaid interest thereon, totaling $248 for all SLG Notes,for an aggregate of 14,000,000 shares of the Company's common stock and $38,155 in cash. The value of the shares of the Company's common stock issued to theholders of the SLG Notes in the exchange has been excluded from the Company's consolidated statements of cash flows, as it is a non-cash financing activity. TheCompany recognized a loss of $891 for the year ended December 31, 2016 related to the exchange of the SLG Notes for the Company's common stock. Therepurchased and exchanged SLG Notes have been surrendered and canceled in full and the Company has no further obligations under the SLG Notes.5.25% NotesIn September 2013, the Company completed a private offering of $250,000 in principal amount of 5.25% Convertible Senior Notes due 2018 (the " 5.25%Notes") and entered into an indenture governing the 5.25% Notes (the "Indenture").The net proceeds from the sale of the 5.25% Notes after the payment of certain debt issuance costs of $7,805 were $242,195 . The Company has used the netproceeds from the sale of the 5.25% Notes to fund capital expenditures and for general corporate purposes. The 5.25% Notes bear interest at a rate of 5.25% perannum, payable semi- annually in arrears on October 1 and April 1 of each year, beginning on April 1, 2014. The 5.25% Notes will mature on October 1, 2018,unless purchased, redeemed or converted prior to such date in accordance with their terms and the terms of the Indenture.Holders may convert their 5.25% Notes, at their option, at any time prior to the close of business on the business day immediately preceding the maturitydate of the 5.25% Notes. Upon conversion, the Company will deliver a number of shares of its common stock, per $1 principal amount of 5.25% Notes, equal tothe conversion rate then in effect (together with a cash payment in lieu of any fractional shares). The initial conversion rate for the 5.25% Notes is 64.1026 sharesof the Company's common stock per $1 principal amount of 5.25% Notes (which is equivalent to an initial conversion price of approximately $15.60 per share ofthe Company's common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events as described in the Indenture.Upon the occurrence of certain corporate events prior to the maturity date of the 5.25% Notes, the Company will, in certain circumstances, in addition todelivering the number of shares of the Company's common stock deliverable upon conversion of the 5.25% Notes based on the conversion rate then in effect(together with a cash payment in lieu of any fractional shares), pay holders that convert their 5.25% Notes, a cash make-whole payment in an amount as describedin the Indenture. The Company may, at its option, irrevocably elect to settle its obligation to pay any such make-whole payment in shares of its common stockinstead of in cash. The amount of any make-whole payment, whether it is settled in cash or in shares of the Company's common stock upon the Company'selection, will be determined based on the date on which the corporate event occurs or becomes effective and the stock price paid (or deemed to be paid) per shareof the Company's common stock in the corporate event, as described in the Indenture.The Company may not redeem the 5.25% Notes prior to October 5, 2016. On or after October 5, 2016, the Company may, at its option, redeem for cash all orany portion of the 5.25% Notes if the closing sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during any 30consecutive trading day period ending on, and including, the trading day immediately preceding the date on which notice of redemption is provided, exceeds 160%of the conversion price on each applicable trading day. In the event of the Company's redemption of the 5.25% Notes, the redemption price will equal 100% of theprincipal amount of the 5.25% Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for inthe 5.25% Notes.If the Company undergoes a fundamental change (as defined in the Indenture) prior to the maturity date of the 5.25% Notes, subject to certain conditions asdescribed in the Indenture, holders may require the Company to purchase, for cash, all or any portion of their 5.25% Notes at a repurchase price equal to 100% ofthe principal amount of the 5.25% Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date.The Indenture contains customary events of default with customary cure periods, including, without limitation, failure to make required payments ordeliveries of shares of the Company’s common stock when due under the Indenture, failure to comply with certain covenants under the Indenture, failure to paywhen due or acceleration of certain other indebtedness of the Company68Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued)or certain of its subsidiaries, and certain events of bankruptcy and insolvency of the Company or certain of its subsidiaries. The occurrence of an event of defaultunder the Indenture will allow either the trustee or the holders of at least 25% in principal amount of the then-outstanding 5.25% Notes to accelerate, or upon anevent of default arising from certain events of bankruptcy or insolvency of the Company, will automatically cause the acceleration of, all amounts due under the5.25% Notes. No events of default under the 5.25% Notes had occurred as of December 31, 2016 .The 5.25% Notes are senior unsecured obligations of the Company and rank senior in right of payment to the Company's future indebtedness that isexpressly subordinated in right of payment to the 5.25% Notes; equal in right of payment to the Company's unsecured indebtedness that is not so subordinated;effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to allindebtedness (including trade payables) of the Company's subsidiaries.For the year ended December 31, 2016 , the Company paid an aggregate of $84,344 in cash to repurchase and retire $114,550 in aggregate principal amountof the 5.25% Notes, together with $1,546 in accrued and unpaid interest thereon. Additionally, pursuant to a privately negotiated exchange agreement with certainholders of the 5.25% Notes, on May 4, 2016, the Company issued 6,265,829 shares of its common stock in exchange for an aggregate principal amount of $25,000of 5.25% Notes held by such holders and accrued and unpaid interest thereon. The value of the shares of the Company's common stock issued to the holders of the5.25% Notes in the exchange has been excluded from the Company's consolidated statements of cash flows as it is a non-cash financing activity. The Company'srepurchase and exchange of 5.25% Notes for the year ended December 31, 2016 resulted in a total gain of $35,239 recorded during the period. All repurchased andexchanged 5.25% Notes have been surrendered to the trustee for such notes and canceled in full and the Company has no further obligations under such notes.PlainsCapital Bank Credit FacilityOn February 29, 2016, the Company entered into a Loan and Security Agreement (“LSA”) with PlainsCapital Bank (“Plains”), pursuant to which Plainsagreed to lend the Company up to $50,000 on a revolving basis from time to time for a term of one year (the “Credit Facility”). Simultaneously, the Companydrew down $50,000 under this Credit Facility, which the Company repaid in full on August 31, 2016. On October 31, 2016 the LSA was amended solely toextend the Credit Facility's maturity date from February 28, 2017 to September 30, 2018. On December 22, 2016, the Company drew down $23,500 under theCredit Facility, which remained outstanding on December 31, 2016. The Credit Facility is evidenced by a promissory note the Company issued on February 29,2016 in favor of Plains (the “Plains Note”). Interest on the Plains Note is payable monthly and accrues at a rate equal to the greater of (i) the then-current LIBORrate plus 2.30% or (ii) 2.70% . As collateral security for the prompt payment in full when due of the Company's obligations to Plains under the LSA and thePlains Note, the Company pledged to and granted Plains a security interest in all of its right, title and interest in the cash and corporate and municipal bonds ratedAAA, AA or A by Standard & Poor’s Rating Services that the Company holds in an account at Plains. In connection with such pledge and security interest grantedunder the Credit Facility, on February 29, 2016, the Company entered into a Pledged Account Agreement with Plains and PlainsCapital Bank - WealthManagement and Trust (the “Pledge Agreement” and collectively with the LSA and the Plains Note, the “Plains Loan Documents”).The Plains Loan Documentsinclude certain covenants of the Company and also provide for customary events of default, which, if any of them occurs, would permit or require, among otherthings, the principal of, and accrued interest on, the Credit Facility to become, or to be declared, due and payable. Events of default under the Plains LoanDocuments include, among others, the occurrence of certain bankruptcy events, the failure to make payments when due under the Plains Note and the transfer ordisposal of the collateral under the LSA. The Company had $23,500 outstanding under the Credit Facility as of December 31, 2016 and no events of default underthe Plains Loan Documents had occurred as of December 31, 2016 .Canton BondsOn March 19, 2014, Canton Renewables LLC ("Canton"), a wholly owned subsidiary of the Company, completed the issuance of Solid Waste FacilityLimited Obligation Revenue Bonds (Canton Renewables, LLC—Sauk Trail Hills Project) Series 2014 in the aggregate principal amount of $12,400 (the "CantonBonds").The Canton Bonds were issued by the Michigan Strategic Fund (the "Issuer") and the proceeds of the issuance were loaned by the Issuer to Canton pursuantto a loan agreement that became effective on March 19, 2014 (the "Loan Agreement"). The Canton Bonds are expected to be repaid from revenue generated byCanton from the sale of RNG and are secured by the revenue and assets of Canton. The Canton Bond repayments will be amortized through July 1, 2022, theaverage coupon interest rate on the69Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued)Canton Bonds is 6.6% , and all but $1,000 of the principal amount of the Canton Bonds is non-recourse to Canton's parent companies, including the Company.Canton used the Canton Bond proceeds primarily to (i) refinance the cost of constructing and equipping its RNG extraction and production project in Canton,Michigan and (ii) pay a portion of the costs associated with the issuance of the Canton Bonds. The refinancing described in the prior sentence was accomplishedthrough distributions to Canton's direct and indirect parent companies who provided the financing for the RNG production facility, and such companies have usedsuch distributions to finance construction of additional RNG extraction and processing projects and for working capital purposes.The Loan Agreement contains customary events of default, with customary cure periods, including without limitation, failure to make required paymentswhen due under the Loan Agreement, failure to comply with certain covenants under the Loan Agreement, certain events of bankruptcy and insolvency of Canton,and the existence of an event of default under the indenture governing the Canton Bonds that was entered into between the Issuer and The Bank of New YorkMellon Trust Company, N.A., as trustee. The occurrence of an event of default under the Loan Agreement will allow the Issuer or the trustee to, among otherthings, accelerate all amounts due under the Loan Agreement. No events of default under the Loan Agreement have occurred as of December 31, 2016 .Other DebtThe Company has other debt due at various dates through 2023 bearing interest at rates up to 21.5% and with a weighted average interest rate of 6.35% and5.00% as of December 31, 2015 and 2016 , respectively.December 2015 Termination of GE Credit AgreementOn November 7, 2012, the Company, through two wholly owned subsidiaries (the "Borrowers"), entered into a credit agreement ("Credit Agreement") withGeneral Electric Capital Corporation ("GE"). Pursuant to the Credit Agreement, GE agreed to loan to the Borrowers up to an aggregate of $200,000 to finance thedevelopment, construction and operation of two LNG plants (individually a "Project" and together the "Projects").The Credit Agreement included a commitment fee on the unutilized loan amounts of 0.5% per annum, which was $1,014 for each of the years endedDecember 31, 2014 and 2015 and was charged to interest expense in the consolidated statements of operations.Concurrently with the execution of the Credit Agreement, the Company issued to GE a warrant to purchase up to 5,000,000 shares of its common stock at aprice of $0.01 per share (the "GE Warrant"). See Note 12 for further information.On December 29, 2014, the Borrowers and GE entered into an amendment to the Credit Agreement providing, among other things, that (i) the CreditAgreement would terminate if the initial loans under the Credit Agreement (collectively, "Loans") for the Projects were not made prior to December 31, 2016(rather than December 31, 2015, as the Credit Agreement originally provided), (ii) each Project was required to be completed by the earlier of (a) the date that is 30months after the funding of the initial Loans with respect to such Project and (b) December 31, 2018 (rather than December 31, 2016, as the Credit Agreementoriginally provided), and (iii) prior to the funding of the Loans, the Borrowers were required to enter into agreements with GE Oil & Gas, Inc. relating to thepurchase of equipment for the Projects.On December 31, 2015, the Company terminated the Credit Agreement and all related documents except for the GE Warrant, which effectively becameexercisable for only 1,000,000 shares because the vesting conditions relating to the other 4,000,000 shares subject to the GE Warrant could not occur followingsuch termination. See Note 12 for further information about the GE Warrant. No amounts had been borrowed by the Borrowers under the Credit Agreement as ofits termination. As a result of the termination of the Credit Agreement, all related unamortized deferred financing costs that were to be amortized to interestexpense in future periods have been removed from the balance sheet and a non-cash charge totaling $54,925 was recorded in interest expense in the fourth quarterof 2015.December 2014 Termination of Mavrix NoteOn April 25, 2013, Mavrix entered into a note purchase agreement (the “NPA”) with Massachusetts Mutual Life Insurance (the “Note Purchaser”) and issuedto the Note Purchaser a secured multi draw promissory note (the “Mavrix Note”) in the maximum aggregate principal amount of $30,000 . The Note Purchaserfunded $15,000 under the Mavrix Note during 2013. In connection70Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(10) Debt (Continued)with the Company’s sale of its interests in DCE and DCEMB, on December 29, 2014, Mavrix paid $13,594 to the Note Purchaser as payment in full of alloutstanding indebtedness under the NPA and the Mavrix Note. Such amount includes approximately $750 as payment of an early termination fee required pursuantto the terms of the NPA and the Mavrix Note. Concurrently with such payment, the NPA, the Mavrix Note and all other documents related thereto were terminatedin full.(11) Derivative TransactionsThe Company had no commodity futures contracts or forward exchange contracts outstanding during the years ended December 31, 2015 and 2016 ,respectively. The Company marks-to-market its open futures positions and forward exchange contracts at the end of each period and records the net unrealized gainor loss during the period in derivative (gains) losses in the consolidated statements of operations or in accumulated other comprehensive income (loss) in theconsolidated balance sheets in accordance with the applicable accounting guidance. During the year ended December 31, 2014 , the Company recorded unrealizedgains of $108 in other comprehensive income (loss) related to its futures contracts and recognized a loss of $65 in cost of sales in the accompanying consolidatedstatements of operations related to its futures contracts that were settled during the year. This amount was reclassified from accumulated other comprehensiveincome (loss).71Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' EquityAuthorized SharesThe Company's certificate of incorporation authorizes the issuance of two classes of capital stock designated as common stock and preferred stock, eachhaving $0.0001 par value per share. As of December 31, 2016 , the Company was authorized to issue 225,000,000 shares, of which 224,000,000 shares aredesignated common stock and 1,000,000 shares are designated preferred stock.Dividend ProvisionsThe Company did not declare or pay any dividends during the years ended December 31, 2014 , 2015 or 2016 .Voting RightsEach holder of common stock has the right to one vote per share owned on matters presented for stockholder action.Issuance of Common Stock and WarrantsSeries I WarrantsIn November 2008, the Company issued to certain investors 4,419,192 Series I Warrants to purchase up to 3,314,394 shares of common stock. The Series IWarrants became exercisable beginning six months from the date of issuance, had a term of seven years from the date they became exercisable, and carried anexercise price of $12.54 per share. All outstanding Series I Warrants expired in April 2016.GE WarrantConcurrently with the execution of the Credit Agreement on November 7, 2012, the Company issued to GE the GE Warrant, which entitled GE to purchaseup to 5,000,000 shares of the Company's common stock at a price per share of $0.01 . The Company terminated the Credit Agreement on December 31, 2015 andas a result, 4,000,000 shares subject to the GE Warrant could not become exercisable because the vesting conditions relating to these shares could not occurfollowing such termination. On October 4, 2016, the holders of the GE Warrant exercised the warrant to purchase the 1,000,000 shares of common stock that werevested and exercisable thereunder pursuant to the cashless exercise provisions thereof, which resulted in the Company's issuance of 997,740 shares of commonstock to such holders. Following such exercise, the GE Warrant has been surrendered and canceled in full and the Company has no further obligations under theGE Warrant.The Company measured the fair value of the original 5,000,000 shares subject to the GE Warrant at $56,158 and recorded the amount in additional paid-in-capital and other long-term assets as a deferred financing cost. The fair value of the 1,000,000 shares that remained exercisable under the GE Warrant following thetermination of the Credit Agreement were being amortized over the estimated term of the Credit Agreement on the straight-line basis. The issuance of the GEWarrant is not included in the consolidated statements of cash flows as it is a non-cash financing activity.In connection with the termination of the Credit Agreement, all related unamortized deferred financing costs that were to be amortized to interest expense infuture periods have been eliminated from the consolidated balance sheets in full through a non-cash charge to the consolidated statement of operations, reported ininterest expense, of $54,925 in the fourth quarter of 2015. See Note 10 for further information.At-The-Market Offering ProgramOn November 11, 2015, the Company entered into an equity distribution agreement with Citigroup Global Markets Inc. ("Citigroup") as sales agent and/orprincipal, pursuant to which the Company may issue and sell, from time to time, through or to Citigroup, shares of the Company's common stock having anaggregate offering price of up to $75,000 in an “at-the-market” offering program (the “ATM Program”). On September 9, 2016, the Company entered into anamended and restated equity distribution agreement with Citigroup for the primary purpose of increasing from $75,000 to $110,000 , the aggregate offering priceof shares of common stock available for issuance and sale in the ATM Program. On December 21, 2016, the Company entered72Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' Equity (continued)into a second amended and restated equity distribution agreement with Citigroup, for the primary purpose of increasing from $110,000 to $200,000 , the aggregateoffering price of shares of common stock available for issuance and sale in the ATM program.The following table summarizes the activity under the ATM Program for the periods presented: Year ended December 31, Year ended December 31, (in 000s, except for per-share amounts) 2015 2016 Gross proceeds $6,943 $103,591 Fees and issuance costs $493 $2,612 Net proceeds $6,450 $100,979 Shares issued 1,561,902 31,064,434 OtherAs of December 31, 2016 , third parties held outstanding warrants, which expire in 2020, to purchase equity interests in NG Advantage. Such warrants allowthe purchase of up to 127,200 NG Advantage common units and are accounted for as liability-classified warrants. The fair value was $561 and $581 as ofDecember 31, 2015 and 2016 , respectively (see Note 5 for additional information) and the gain (loss) from the change in fair value was $0 , $69 and $(21) for theyears ended December 31, 2014 , 2015 and 2016 , respectively.Stock-Based CompensationThe following table summarizes the compensation expense and related income tax benefit related to the Company's stock-based compensation arrangementsrecognized in the consolidated statements of operations: Years Ended December 31, 2014 2015 2016 Stock-based compensation expense, net of $0 tax in 2014, 2015 and 2016$11,514 $10,779 $8,092 Equity Incentive PlansIn December 2002, the Company adopted its 2002 Stock Option Plan ("2002 Plan").In December 2006, the Company adopted its 2006 Equity Incentive Plan ("2006 Plan"), which became effective on May 24, 2007, the date the Companycompleted its initial public offering of common stock. The 2002 Plan became unavailable for new awards upon the effectiveness of the 2006 Plan. Unissuedawards under the 2002 Plan are available for future grant under the 2006 Plan. If any outstanding option under the 2002 Plan expires or is canceled, the sharesallocable to the unexercised portion of that option will be added to the share reserve under the 2006 Plan and will be available for grant under the 2006 Plan.In May 2016, the Company adopted its 2016 Performance Incentive Plan ("2016 Plan"), which became effective on May 26, 2016, the date of approval ofthe 2016 Plan by the Company's stockholders. The 2006 Plan became unavailable for new awards upon the effectiveness of the 2016 Plan. Unissued awards underthe 2002 and 2006 Plans are not available for future grant under the 2016 Plan. If any outstanding award under the 2002 and 2006 Plans expires or is canceled, theshares allocable to the unexercised portion of that award will be added to the share reserve under the 2016 Plan and will be available for grant under the 2016 Plan.As of December 31, 2016 , the Company had 6,112,582 shares available for future grant under the 2016 Plan.Stock OptionsThe following table summarizes the Company's stock option activity:73Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' Equity (continued) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options Outstanding as of December 31, 201311,526,998 $11.79 Granted957,000 10.23 Exercised(468,279) 3.78 Forfeited or Expired(529,418) 13.40 Options Outstanding as of December 31, 201411,486,301 $11.91 Granted1,415,200 5.39 Exercised(608,279) 2.96 Forfeited or Expired(805,284) 14.04 Options Outstanding as of December 31, 201511,487,938 $11.44 Granted284,750 3.63 Exercised— — Forfeited or Expired(304,892) 11.30 Options Outstanding as of December 31, 201611,467,796 $11.25 3.99 — Options Exercisable as of December 31, 201610,176,324 $11.96 3.41 — Options Vested and Expected to Vest as of December 31, 201611,351,637 $11.30 3.88 — As of December 31, 2016 , there was $2,794 of total unrecognized compensation cost related to unvested shares underlying outstanding stock options. Thatcost is expected to be expensed over a remaining weighted average period of 1.68 years. The total fair value of shares vested during the year ended December 31,2016 was $2,544 .The intrinsic value of all stock options exercised during the year ended December 31, 2014 , 2015 and 2016 was $2,568 , $2,197 and $0 respectively.The fair value of each stock option granted was estimated as of the date of grant using the Black-Scholes option pricing model and using the followingassumptions: Years Ended December 31, 2014 2015 2016Dividend yield0.0% 0.0% 0.0%Expected volatility52.3% to 67.0% 59.2% to 72.0% 61.1% to 70.8%Risk-free interest rate1.1% to 1.8% 1.7% to 1.8% 1.2% to 2.0%Expected life in years6.0 6.0 6.0The weighted-average grant date fair values of stock options granted during the years ended December 31, 2014 , 2015 and 2016 , were $ 5.32 , $3.29 and$2.30 , respectively. The volatility amounts used were estimated based on the Company's historical and implied volatility of its traded options. The expected livesused were based on historical exercise periods and the Company's anticipated exercise periods for its outstanding stock options. The risk free interest rates usedwere based on the U.S. Treasury yield curve for the expected life of the stock options at the time of grant. The Company recorded $7,286 , $5,195 and $2,561 ofstock option expense during the years ended December 31, 2014 , 2015 and 2016 , respectively. The Company has not recorded any tax benefit related to its stockoption expense.74Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' Equity (continued)Market-Based Performance Restricted Stock UnitsThe Company granted 2,034,500 market-based performance restricted stock units ("Market-Based RSUs") to certain key employees during 2012 and 2014 .A holder of Market-Based RSUs will receive one share of the Company's common stock for each Market-Based RSU held if (x) between two years and four yearsfrom the date of grant of the Market-Based RSU, the closing price of the Company's common stock equals or exceeds, for twenty consecutive trading days, 135%of the closing price of the Company's common stock on the Market-Based RSU grant date (the "Stock Price Condition") and (y) the holder is employed by theCompany at the time the Stock Price Condition is satisfied. If the Stock Price Condition is not satisfied prior to four years from the date of grant, the Market-BasedRSUs are automatically forfeited. As a result, as of December 31, 2016 , Market-Based RSUs granted in January and May 2012 and entitling the holders to receive1,605,500 shares of the Company’s common stock had been forfeited for failure to satisfy the applicable Stock Price Condition.The Market-Based RSUs are subject to the terms and conditions of the 2006 Plan and a Notice of Grant of Restricted Stock Unit and Restricted Stock UnitAgreement.The following table summarizes the Company's Market-Based RSU activity: Number of Shares Weighted Average Fair Value at Grant Date Weighted Average Remaining Contractual Term (in years) RSU Outstanding as of December 31, 20131,545,000 $11.42 Granted489,500 8.26 Vested— — Forfeited or Expired(265,500) 10.62 RSU Outstanding as of December 31, 20141,769,000 $10.67 Granted— — Vested— — Forfeited or Expired— — RSU Outstanding as of December 31, 20151,769,000 $10.67 Granted— — Vested— — Forfeited or Expired(1,340,000) 11.44 RSU Outstanding and Unvested as of December 31, 2016429,000 $8.26 1.09 RSU Expected to Vest as of December 31, 2016— — 0.00 As of December 31, 2016 , there was $0 of total unrecognized compensation cost related to unvested shares underlying outstanding Market-Based RSUs.The Company recorded $2,556 , $1,770 and $169 of expense during the years ended December 31, 2014 , 2015 and 2016 , respectively, related to theMarket-Based RSUs. The Company has not recorded any tax benefit related to its Market-Based RSU expense.Service-Based Restricted Stock UnitsThe Company has granted service-based restricted stock units ("Service-Based RSUs") to key employees that vest annually over the three years followingthe date of grant at a rate of 34% , 33% and 33% , respectively, if the holder is in service to the Company at each vesting date. The Service-Based RSUs are subjectto the terms and conditions of the 2006 and 2016 Plans and a Notice of Grant of Restricted Stock Unit and Restricted Stock Unit Agreement.75Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' Equity (continued)The following table summarizes the Company's Service-Based RSU activity: Number of Shares Weighted Average Fair Value at Grant Date Weighted Average Remaining Contractual Term (in years) RSU Outstanding as of December 31, 201345,836 $13.09 Granted792,500 5.54 Vested(15,584) 13.09 Forfeited or expired— — RSU Outstanding as of December 31, 2014822,752 $5.82 Granted1,167,750 5.38 Vested(283,726) 5.94 Forfeited or expired(56,000) 5.57 RSU Outstanding as of December 31, 20151,650,776 $5.50 Granted850,125 3.63 Vested(726,687) 5.53 Forfeited or expired(130,910) 4.91 RSU Outstanding and Unvested as of December 31, 20161,643,304 $4.56 1.19 RSU Expected to Vest as of December 31, 20161,545,222 $4.56 0.99 As of December 31, 2016 , there was $5,799 of total unrecognized compensation cost related to unvested shares underlying outstanding Service-BasedRSUs. That cost is expected to be expensed over a remaining weighted average period of 1.21 years.The Company recorded $365 , $2,622 and $4,395 of expense during the years ended December 31, 2014 , 2015 and 2016 , respectively, related to theService-Based RSUs. The Company has not recorded any tax benefit related to its Service-Based RSU expense.The fair value of each Service-Based RSU granted during the year ended December 31, 2016 was estimated using the closing stock price of the Company'scommon stock on the date of grant.Employee Stock Purchase PlanOn May 7, 2013, the Company adopted an employee stock purchase plan (the "ESPP"), pursuant to which eligible employees may purchase shares of theCompany's common stock at 85% of the fair market value of the common stock on the last trading day of two consecutive, non-concurrent offering periods eachyear. The Company has reserved 2,500,000 shares of its common stock for issuance under the ESPP, and the first offering period under the ESPP commenced onSeptember 1, 2013.The Company recorded $67 , $50 and $51 of expense related to the ESPP during the years ended December 31, 2014 , 2015 and 2016 , respectively. TheCompany has not recorded any tax benefits related to its ESPP expense. As of December 31, 2016 , the Company had issued an aggregate of 199,884 sharespursuant to the ESPP.Non-Qualified Non-Public Subsidiary Unit OptionsIn September 2013, the Company's wholly owned subsidiary Renewables adopted a unit option plan (the "Clean Energy Renewables Plan"). 150,000 Class Bunits representing membership interests in Renewables were initially reserved for issuance under the Clean Energy Renewables Plan.76Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(12) Stockholders' Equity (continued)The following table summarizes Renewables' unit option activity: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options Outstanding as of December 31, 2013115,000 $40.80 Options granted— — Options exercised— — Options forfeited or expired— — Options Outstanding as of December 31, 2014115,000 $40.80 Options granted— — Options exercised— — Options forfeited or expired(7,000) 40.80 Options Outstanding as of December 31, 2015108,000 $40.80 Options granted— — Options exercised— — Options forfeited or expired— — Options Outstanding and Exercisable as of December 31, 2016108,000 $40.80 6.72 $94.62 As of December 31, 2016 , there was $0 of total unrecognized compensation cost related to unvested units underlying outstanding unit options.The grant date fair value of unit options granted in September 2013 was $31.65 , which was determined contemporaneously with the unit option grants. Thevolatility amount used was estimated based on the historical volatility of a certain peer group of Renewables for a period commensurate with the expected life ofthe unit options granted. The expected life used was Renewables' anticipated exercise periods for its outstanding unit options. The risk free interest rate used wasbased on the U.S. Treasury yield curve for the expected life of the unit options at the time of grant. Renewables recorded $1,240 , $1,115 and $803 of unit optionexpense during the years ended December 31, 2014 , 2015 and 2016 , respectively. Renewables has not recorded any tax benefit related to its unit option expense.(13) Income TaxesThe components of income (loss) before income taxes for the years ended December 31, 2014 , 2015 and 2016 are as follows: 2014 2015 2016 U.S. $(64,913) $(111,437) $7,150 Foreign(24,871) (22,407) (19,535) Total loss before income taxes$(89,784) $(133,844) $(12,385) The provision for income taxes consists of the following:77Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(13) Income Taxes (Continued) 2014 2015 2016 Current: Federal$190 $9 $(226) State238 248 93 Foreign1,017 912 567 Total current1,445 1,169 434 Deferred: Federal29 337 478 State(10) 71 75 Foreign(389) 37 352 Total deferred(370) 445 905 Total$1,075 $1,614 $1,339 Income tax expense for the years ended December 31, 2014 , 2015 and 2016 differs from the "expected" amount computed using the federal income tax rateof 35% as a result of the following: 2014 2015 2016 Computed expected tax (benefit)$(30,415) $(46,846) $(4,335) Nondeductible expenses10,690 24,998 5,971 Tax rate differential on foreign earnings5,733 3,701 720 Tax credits(8,286) (9,988) (9,331) Other(1,121) (372) 833 Change in valuation allowance24,474 30,121 7,481 Total tax expense$1,075 $1,614 $1,339 During the year ended December 31, 2014, federal tax legislation enacted VETC through December 31, 2014 with retroactive effect to January 1, 2014, andduring the year ended December 31, 2015, federal tax legislation enacted VETC through December 31, 2016 with retroactive effect to January 1, 2015.Additionally, in 2013 federal tax guidance was issued that clarified that the VETC in excess of the Company's fuel tax obligation, which is collected fromcustomers, can be excluded from taxable income. The Company recorded a federal tax benefit of $8,221 , $9,298 and $9,112 related to the exclusion of VETCassociated with 2014 , 2015 and 2016 fuel sales in excess of its fuel tax obligation, respectively. These amounts increased the Company's deferred tax assetattributed to its federal net operating loss carryforwards and the Company's deferred tax asset valuation allowance.Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.The tax effect of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2015 and 2016 are as follows:78Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(13) Income Taxes (Continued) 2015 2016 Deferred tax assets: Accrued expenses$4,512 $4,566 Sales-type leases154 55 Alternative minimum tax and general business credits5,780 6,137 Stock option expense23,113 26,154 Other2,283 1,168 Loss carryforwards174,157 181,884 Total deferred tax assets209,999 219,964 Less valuation allowance(189,203) (195,968) Net deferred tax assets20,796 23,996 Deferred tax liabilities: Depreciation and amortization(17,398) (19,364) Goodwill(4,600) (5,599) Partnership income(293) (1,432) Total deferred tax liabilities(22,291) (26,395) Net deferred tax liabilities$(1,495) $(2,399) As of December 31, 2016 , the Company had federal, state and foreign net operating loss carryforwards of approximately $447,788 , $329,058 and $79,148 ,respectively. The Company's federal, state and foreign net operating loss carryforwards will, if not utilized, expire beginning in 2026, 2017 and 2028, respectively.The Company also has federal tax credit carryforwards of $5,907 that will expire beginning in 2026. Due to the change of ownership provisions of InternalRevenue Code Section 382, utilization of a portion of the Company's net operating loss and tax credit carryforwards may be limited in future periods.In assessing the realizability of the net deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assetswill not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which thosetemporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. As ofDecember 31, 2015 and 2016 , the Company provided a valuation allowance of $189,203 , and $195,968 , respectively, to reduce the net deferred tax assets due touncertainty surrounding the realizability of these assets. The net increase in the valuation allowance for the years ended December 31, 2015 and 2016 was $28,767, and $6,765 , respectfully. The changes in the valuation allowance were primarily attributable to operating losses incurred in certain jurisdictions for which a fullvaluation allowance was established.As of December 31, 2016 , the Company has not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences ofapproximately $4,568 resulting from earnings of certain non-U.S. subsidiaries which are permanently reinvested outside the United States. Unrecognized deferredtaxes on remittance of these funds are not expected to be material.The Company does not recognize the impact of a tax position in its financial statements unless the position is more likely than not to be sustained, based onthe technical merits of the position. The Company has unrecognized tax benefits of $49,602 at December 31, 2016 including $692 of tax benefits that, ifrecognized, would reduce the Company's annual effective tax rate. The remaining $48,910 , if recognized, would not result in a tax benefit since it would be fullyoffset with a valuation allowance.79Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(13) Income Taxes (Continued)The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended December 31, 2014 , 2015 and 2016 :Unrecognized tax benefit—December 31, 2014$21,974 Gross increases—tax positions in current year5,523 Gross increases—tax positions in prior years— Unrecognized tax benefit—December 31, 201527,497 Gross increases—tax positions in current year4,556 Gross increases—tax positions in prior years17,549 Unrecognized tax benefit—December 31, 2016$49,602 The increase in the Company's unrecognized tax benefits during the years ended December 31, 2015 and 2016 is primarily attributable to the portion ofVETC revenue that was offset by the fuel tax the Company collected from its customers as an unrecognized tax benefit during 2015 and 2016 . The Companybelieves the portion of VETC revenue that is offset by the fuel tax the Company collects from its customers can be excluded from taxable income, although theultimate outcome of this tax position is uncertain.The Company increased its reserve for unrecognized tax positions in the year ended December 31, 2016 . As unrecognized tax positions are not recognizedfor financial reporting purposes, this position does not have an impact on the balance sheet, statement of operations or statement of cash flows. If this position wereto be sustained, then there would be an increase in the Company's deferred tax assets attributed to its federal and state net operating loss carryforwards, as well asan increase to the amount of the Company's deferred tax asset valuation allowance. The increase in the Company's reserve for unrecognized tax positions wasattributable to the write-off of unamortized debt issuance costs resulting from the Company's termination of its Credit Agreement with GE on December 15, 2015.Although the ultimate outcome of this tax position is uncertain, the Company believes that this non-cash charge can be deducted in determining its U.S. taxableincome for the year ended December 31, 2015. FASB authoritative guidance requires the Company to accrue interest and penalties where there is an underpayment of taxes based on the Company's bestestimate of the amount ultimately to be paid. The Company's policy is to recognize interest accrued related to unrecognized tax benefits and penalties as incometax expense. In addition to the unrecognized tax benefits noted above, the Company accrued $178 and $241 of interest expense as of December 31, 2015 and 2016, respectively. The Company recognized interest expense related to uncertain tax positions of $54 , $58 and $62 for the years ended December 31, 2014 , 2015 and2016 , respectively.The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company's tax years for 2012 through 2016 aresubject to examination by various tax authorities. While the Company is no longer subject to U.S. examination for years before 2013, and for state taxexaminations for years before 2012, taxing authorities can adjust the net operating losses that arose in earlier years if and when the net operating losses reducefuture income.A number of years may elapse before an uncertain tax position is finally resolved. It is often difficult to predict the final outcome or the timing of resolutionof an uncertain tax position, but the Company believes that its reserves for income taxes reflect the most probable outcomes. The Company adjusts the reserve, aswell as the related interest and penalties, in light of changing facts and circumstances. The amount of penalties accrued is immaterial. Settlement of any particularposition would usually require the use of cash and result in the reduction of the related reserve, or there could be a change in the amount of the Company's netoperating loss. The resolution of a matter would be recognized as an adjustment to the provision for income taxes at the effective tax rate in the period ofresolution. The Company does not expect a significant increase or decrease in its uncertain tax positions within the next twelve months.(14) Commitments and ContingenciesEnvironmental MattersThe Company is subject to federal, state, local and foreign environmental laws and regulations. The Company does not anticipate any expenditures tocomply with such laws and regulations that would have a material impact on the Company's80Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(14) Commitments and Contingencies (Continued)consolidated financial position, results of operations or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal,state, local and foreign environmental laws and regulations.Litigation, Claims and ContingenciesThe Company may become party to various legal actions in the ordinary course of its business. The Company is also subject to audit by tax authorities forvarying periods in various federal, state, local and foreign tax jurisdictions, and disputes may arise during the course of these audits. It is impossible to determinethe liabilities that the Company may incur resulting from any of these lawsuits and proceedings, audits, commitments, contingencies and related matters or thetiming of these liabilities, if any. If these matters were to ultimately be resolved unfavorably it is possible that such an outcome could have a material adverse effectupon the Company's consolidated financial position, results of operations or liquidity. The Company, however, does not anticipate such an outcome and believesthat the ultimate resolution of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations orliquidity.Operating Lease CommitmentsThe Company leases facilities, including the land for its LNG production plant in Boron, California and certain equipment under noncancelable operatingleases expiring at various dates through 2038 . The following schedule represents the future minimum lease obligations for all noncancelable operating leases as ofDecember 31, 2016 :Fiscal year: 2017$8,055 20186,685 20196,287 20205,575 20214,195 Thereafter17,801 Total future minimum lease payments$48,598 Rent expense, including variable rent, totaled $10,140 , $8,629 , and $11,058 for the years ended December 31, 2014 , 2015 and 2016 , respectively.Long-Term Take-or-Pay Natural Gas Supply ContractsIn October 2007, the Company entered into an LNG supply contract with Desert Gas Services (formerly known as Spectrum Energy Services, LLC)("DGS") to purchase LNG, on a take-or-pay basis, starting in March 2010 and expiring in March 2020. For the years ended December 31, 2014 , 2015 and 2016 ,the Company paid approximately $14,267 , $11,852 , and $9,692 respectively, under this contract. As of December 31, 2016 , the fixed commitments under thiscontract totaled approximately $3,614 , $3,614 , $3,614 and $901 for the years ending December 31, 2017, 2018, 2019 and 2020 respectively.During 2015, the Company entered into a CNG supply contract with Jacksonville Transit Authority ("JTA") to purchase CNG, on a take-or-pay basis,starting in January 2016 and expiring in December 2020. As of December 31, 2016 , the fixed commitments under the JTA contract totaled approximately $203 ,$313 , $429 and $548 for the years ending December 31, 2017, 2018, 2019 and 2020, respectively.(15) Capitalized Lease Obligation and ReceivablesThe Company leases equipment under capital leases with a weighted-average interest rate of 8.7% . As of December 31, 2016 , future payments underthese capital leases are as follows:81Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(15) Capitalized Lease Obligation and Receivables (Continued)2017$2,319 20181,887 20191,777 2020575 2021338 Thereafter295 Total minimum lease payments7,191 Less amount representing interest(1,163) Future minimum lease payments6,028 Less current portion(1,890) Capital lease obligations, less current portion$4,138 The value of the equipment under capital lease as of December 31, 2015 and 2016 was $8,970 and $10,168 , with related accumulated amortization of $2,766and $4,073 , respectively.The Company also leases certain fueling station equipment to certain customers under sales-type leases at a weighted average effective interest rate of 12.1%. The leases are payable in varying monthly installments through September 2030 .As of December 31, 2016 , future receipts under these leases are as follows:2017$380 2018251 2019186 2020186 2021186 Thereafter1,612 Total2,801 Less amount representing interest(1,394) $1,407 (16) 401(k) PlanThe Company has established a savings plan ("Savings Plan") which is qualified under Section 401(k) of the Internal Revenue Code. Eligible employeesmay elect to make contributions to the Savings Plan through salary deferrals of up to 90% of their base pay, subject to Internal Revenue Code limitations. TheCompany may also make discretionary contributions to the Savings Plans that are subject to limitations. For the years ended December 31, 2014 , 2015 and 2016the Company contributed approximately $1,040 , $304 , and $1,527 of matching contributions to the Savings Plan, respectively.(17) Geographic InformationDisclosures are required for certain information regarding operating segments, products and services, geographic areas of operation and major customers.Segment reporting is based upon the “management approach,” which assesses, how management organizes the Company’s operating segments for which separatefinancial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and inassessing performance. The Company’s CODM is the Chief Executive Officer.The Company operates in a single segment to sell natural gas. In making operating decisions, the CODM primarily considers consolidated financialinformation, accompanied by information about revenue disaggregated by geographic region. The assessment of operating results and the allocation of resourcesamong the components of the business by the CODM are made82Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)(In thousands, except share and per share data)(17) Geographic Information (Continued)on a project by project basis, rather than on a component-by-component basis, and are based on evaluating the economics of a mix of products and services for acustomer.The table below presents the Company's revenue, operating income (loss) and long-lived assets by geographic area. Several of the Company's functions,including marketing, engineering, and finance are performed at the corporate level. As a result, significant interdependence and overlap exists among theCompany's geographic areas. Geographic revenue data reflect internal allocations and are therefore subject to certain assumptions and the Company’smethodology. Accordingly, revenue, operating income (loss), and long-lived assets shown for each geographic area may not be the amounts that would have beenreported if the geographic areas were independent of one another. Revenue by geographic area is based on where services are rendered and finished goods are sold.Operating income (loss) by geographic area is based on the location of the entity selling the finished goods or providing the services. Long-lived assets bygeographic area is based on the location of the assets. 2014 2015 2016 Revenue: United States$360,881 $330,003 $378,497 Canada16,241 21,818 11,502 Other51,818 32,499 12,657 Total revenue$428,940 $384,320 $402,656 Operating income (loss): United States$(41,543) $(33,067) $(8,693) Canada(3,087) (4,980) (4,212) Other(9,734) (3,576) (4,732) Total operating income (loss)$(54,364) $(41,623) $(17,637) Long-lived assets: United States$582,028 $582,644 $547,279 Canada85,984 68,292 66,191 Other6,854 5,693 5,646 Total long-lived assets$674,866 $656,629 $619,116 The Company's goodwill and intangible assets as of December 31, 2014 , 2015 and 2016 relate to its United States operations, including the operations ofClean Energy Compression, Clean Energy Cryogenics and NG Advantage (beginning on October 14, 2014, see Note 2 ).(18) ConcentrationsDuring the years ended December 31, 2014 , 2015 and 2016 , two , three and four suppliers, respectively, each accounted for 10% or more of the Company'snatural gas expense related to LNG and CNG purchases.During the years ended December 31, 2014 , 2015 and 2016 , no single customer accounted for 10% or more of the Company's total revenue.83Table of ContentsCLEAN ENERGY FUELS CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(In thousands, except share and per share data)( 19 ) Subsequent EventsThe Company has evaluated subsequent events and determined that no subsequent events have occurred that would require recognition in the financialstatements or disclosure in the notes thereto other than as listed below. On February 27, 2017, Renewables entered into an asset purchase agreement (the “APA”) with BP Products North America, Inc. (“BP”), pursuant towhich Renewables agreed to sell to BP certain assets relating to its RNG production business, including Renewables' two existing RNG production facilities and itsinterest in the RNG Ventures (collectively, the “RNG Assets”) in exchange for $155,000 in cash and the right to receive up to an additional $25,000 in cash ifcertain performance criteria relating to the Assets are met (the “Asset Sale”). Subject to the satisfaction of customary closing conditions, including, among others,the receipt of required governmental and third-party consents and approvals, the Asset Sale is expected to close on or before March 31, 2017. In addition, we willcollect royalties on gas purchased from BP and sold as Redeem at our stations. This royalty payment is in addition to any payment obligation of BP under the APA.At the closing of the Asset Sale, BP will pay $30,000 of the closing purchase price in cash and deliver to Renewables a promissory note for $125,000 to be paid onApril 3, 2017. Following completion of the Asset Sale, the Company, through Renewables, will continue to obtain RNG from third-party producers, includingRNG produced from the production facilities to be sold in the Asset Sale and sold to Renewables under a long-term supply contract, and resell such RNG throughits natural gas fueling infrastructure as Redeem™, the Company’s RNG vehicle fuel.In February 2017, the Company purchased from Pickens, the 7.5% Note due July 2018 having an outstanding principal amount of $25,000 heldby Pickens for a cash purchase price of $21,750 .Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Evaluation of Disclosure Controls and Procedures.We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submitunder the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and ExchangeCommission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,as appropriate, to allow timely decisions regarding required disclosure. In designing the disclosure controls and procedures, management recognizes that anycontrols and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition,the design of our disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgmentin evaluating the benefits of possible controls and procedures relative to their costs.Our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (ourprincipal executive and principal financial officers, respectively) of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our ChiefExecutive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by thisreport.Changes in Internal Control over Financial Reporting .We regularly review and evaluate our internal control over financial reporting and make changes to our processes and systems to improve controls andincrease efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, moreefficient systems, consolidating activities, and migrating processes.There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting.Management's Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) underthe Exchange Act). Our management, with the participation of our Chief Executive Officer and84Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2016 . In making its assessment of theeffectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of theTreadway Commission in Internal Control—Integrated Framework (2013) . Based on these criteria, our management has concluded that, as of December 31, 2016, our internal control over financial reporting is effective. Our independent registered public accounting firm, KPMG LLP, has issued an attestation on our internalcontrol over financial reporting, which is included in Part II, Item 8 of this report.Item 9B. Other Information.None.85PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders to be filedwith the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2016 .Item 11. Executive Compensation.The information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders to be filedwith the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2016 .Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders to be filedwith the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2016 .Item 13. Certain Relationships and Related Transactions and Director Independence.The information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders to be filedwith the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2016 .Item 14. Principal Accounting Fees and Services.The information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders to be filedwith the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2016 .86PART IVItem 15. Exhibits and Financial Statement Schedules.(a)(1) Consolidated Financial Statements.The following items are filed in Part II, Item 8 of this report:Report of Independent Registered Public Accounting FirmConsolidated Balance SheetsConsolidated Statements of OperationsConsolidated Statements of Comprehensive Income (Loss)Consolidated Statements of Stockholders' EquityConsolidated Statements of Cash FlowsNotes to Consolidated Financial Statements(a)(2) Financial Statement Schedules.The financial statement schedule set forth below is filed as a part of this report. All other schedules have been omitted as they are not required, notapplicable, or the required information is otherwise included.Schedule II: Valuation and Qualifying Accounts Allowances for Doubtful Trade Receivables Allowance for Doubtful Notes Receivables Balance as of December 31, 2013$832 $2,416 Charges (benefit) to operations387 890 Deductions(467) (456) Balance as of December 31, 2014752 2,850 Charges (benefit) to operations1,514 1,142 Deductions(371) (2) Balance as of December 31, 20151,895 3,990 Charges (benefit) to operations1,107 1,617 Deductions(1,939) (4,377) Balance as of December 31, 2016$1,063 $1,230 (a)(3) Exhibits.The information required by this Item 15(a)(3) is set forth on the exhibit index that immediately follows the signature page to this report and is incorporated hereinby reference.Item 16. Form 10-K Summary.We have elected not to provide summary information.87SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. CLEAN ENERGY FUELS CORP. By: /s/ ANDREW J. LITTLEFAIR Andrew J. Littlefair President and Chief Executive Officer Date: March 7, 2017POWER OF ATTORNEYIN WITNESS WHEREOF, each person whose signature appears below constitutes and appoints Andrew J. Littlefair and Robert M. Vreeland as his trueand lawful agent, proxy and attorney-in-fact, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in anyand all capacities, to (i) act on and sign any amendments to this report, with exhibits thereto and other documents in connection therewith, (ii) act on and sign suchcertificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, and in each case file the same with theSecurities and Exchange Commission, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes maylawfully do or cause to be done by virtue thereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities and on the dates indicated.88 Signature Title Date /s/ ANDREW J. LITTLEFAIR President, Chief Executive Officer (Principal Executive Officer)and Director March 7, 2017 Andrew J. Littlefair /s/ ROBERT M. VREELAND Chief Financial Officer (Principal Financial Officer and PrincipalAccounting Officer) March 7, 2017 Robert M. Vreeland /s/ WARREN I. MITCHELL Chairman of the Board and Director March 7, 2017 Warren I. Mitchell /s/ VINCENT C. TAORMINA Director March 7, 2017 Vincent C. Taormina /s/ JOHN S. HERRINGTON Director March 7, 2017 John S. Herrington /s/ JAMES C. MILLER III Director March 7, 2017 James C. Miller III /s/ BOONE PICKENS Director March 7, 2017 Boone Pickens /s/ JAMES E. O'CONNOR Director March 7, 2017 James E. O'Connor /s/ KENNETH M. SOCHA Director March 7, 2017 Kenneth M. Socha /s/ STEPHEN A. SCULLY Director March 7, 2017 Stephen A. Scully 89EXHIBIT INDEXExhibitNumber Incorporated herein by reference to the following filings: Description Form Filed on3.1 Restated Certificate of Incorporation, as amended by theCertificate of Amendment to the Restated Certificate ofIncorporation of the Registrant dated May 28, 2010, asfurther amended by the Certificate of Amendment to theRestated Certificate of Incorporation of the Registrant datedMay 8, 2014. Filed as Exhibit 3.1.2 to the Quarterly Report on Form 10-Qfor the quarter ended June 30, 2014. August 7, 2014 3.2 Amended and Restated Bylaws. Filed as Exhibit 3.2 to the Current Report on Form 8-K. February 23, 2011 3.2.1 Amendment No. 1 to Amended and Restated Bylaws. Filed as Exhibit 3.2.1 to the Current Report on Form 8-K. February 27, 2014 4.1 Specimen Common Stock Certificate. Filed as Exhibit 4.1 to the Registration Statement on Form S-1, as amended. March 27, 2007 4.10 Form of Replacement Note issued by the Registrant. Filed as Exhibit 4.9 to the Current Report on Form 8-K. June 18, 2013 4.11 Indenture dated September 16, 2013, between the Registrantand U.S. Bank National Association. Filed as Exhibit 4.11 to the Current Report on Form 8-K. September 16, 2013 4.12 Form of 5.25% Convertible Senior Note due 2018. Included with Exhibit 4.11 to the Current Report on Form 8-K. September 16, 2013 10.4+ Form of Indemnification Agreement. Filed as Exhibit 10.4 to the Registration Statement onForm S-1, as amended. March 27, 2007 10.6+ Stock Option Agreement dated May 18, 2006 between theRegistrant and G. Michael Boswell. Filed as Exhibit 99.3 to the Registration Statement onForm S-8. August 14, 2007 10.7+ 2006 Equity Incentive Plan—Form of Notice of StockOption Grant and Stock Option Agreement. Filed as Exhibit 99.5 to the Registration Statement onForm S-8. August 14, 2007 10.12† Ground Lease dated November 3, 2006 among theRegistrant, Clean Energy Construction and U.S. Borax, Inc. Filed as Exhibit 10.25 to the Registration Statement onForm S-1, as amended. May 24, 2007 10.16+ 2006 Equity Incentive Plan—Form of Stock AwardAgreement. Filed as Exhibit 10.2 to the Quarterly Report on Form 10-Qfor the quarter ended March 31, 2008. May 15, 2008 10.63+ Amended and Restated 2006 Equity Incentive Plan. Filed as Exhibit 10.63 to the Annual Filing on Form 10-K forthe fiscal year ended 2011. March 12, 201210.64+ Amended and Restated 2006 Equity Incentive Plan—Formof Notice of Stock Unit Award and Stock Unit Agreement. Filed as Exhibit 10.64 to the Annual Filing on Form 10-K forthe fiscal year ended 2011. March 12, 2012 10.80 Lease dated March 18, 2013, between The IrvineCompany LLC and Clean Energy. Filed as Exhibit 10.80 to the Quarterly Report on Form 10-Qfor the quarter ended March 31, 2013. May 8, 2013 10.81 First Amendment to Lease dated April 17, 2013, betweenThe Irvine Company LLC and Clean Energy. Filed as Exhibit 10.81 to the Quarterly Report on Form 10-Qfor the quarter ended March 31, 2013. May 8, 2013 10.83 Note Purchase Agreement dated June 14, 2013, among theRegistrant, Chesapeake NG Ventures Corporation, BoonePickens and Green Energy Investment Holdings, LLC. Filed as Exhibit 10.83 to the Current Report on Form 8-K. June 18, 2013 90ExhibitNumber Incorporated herein by reference to the following filings: Description Form Filed on10.84 Loan Agreement dated June 14, 2013, between the Registrantand Green Energy Investment Holdings, LLC. Filed as Exhibit 10.84 to the Current Report on Form 8-K. June 18, 2013 10.85 Loan Agreement dated June 14, 2013, between the Registrantand Boone Pickens. Filed as Exhibit 10.85 to the Current Report on Form 8-K. June 18, 2013 10.86 Registration Rights Agreement dated June 14, 2013, amongthe Registrant, Boone Pickens and Green Energy InvestmentHoldings, LLC. Filed as Exhibit 10.86 to the Current Report on Form 8-K. June 18, 2013 10.87 Marketing Agreement dated June 28, 2013, among CleanEnergy, Westport Power Inc. and Westport Fuel Systems Inc. Filed as Exhibit 10.87 to the Current Report on Form 8-K. June 28, 2013 10.90+ Clean Energy Fuels Corp. Employee Stock Purchase Plan. Filed as Exhibit Annex A to Schedule 14A Definitive ProxyStatement. March 28, 2013 10.91+ Clean Energy Renewable Fuels, LLC Unit Option Plan,Form of Notice of Option Award and Option Agreement. Filed as Exhibit 10.91 to the Quarterly Report on Form 10-Qfor the quarter ended September 30, 2013. November 7, 2013 10.92† Liquefied Natural Gas Fueling Station and LNG MasterSales Agreement dated August 2, 2010, between CleanEnergy and Pilot Travel Centers, LLC. Filed as Exhibit 10.92 to the Annual Report on Form 10-Kfor the year ended December 31, 2013. February 27, 2014 10.93 Loan Agreement dated March 1, 2014, between CantonRenewables, LLC and Michigan Strategic Fund. Filed as Exhibit 10.93 to the Current Report on Form 8-K. March 21, 2014 10.94 Form of Common Unit Purchase Agreement datedOctober 14, 2014, among NG Advantage, LLC, CleanEnergy and the other investors named therein. Filed as Exhibit 10.94 to the Current Report on Form 8-K. October 15, 2014 10.95 Purchase Agreement dated October 14, 2014, between CleanEnergy and NG Advantage, LLC. Filed as Exhibit 10.95 to the Report on Form 8-K. October 15, 2014 10.96 Lease dated October 14, 2014, between Clean Energy andNG Advantage, LLC. Filed as Exhibit 10.96 to the Report on Form 8-K. October 15, 2014 10.102+ Employment Agreement dated January 1, 2013 between theRegistrant and Peter J. Grace. Filed as Exhibit 10.102 to the Quarterly Report onForm 10‑Q for the quarter ended March 30, 2015. May 11, 2015 10.103+ Amended and Restated 2006 Equity Incentive Plan - Form ofNotice of Stock Unit Award. Filed as Exhibit 10.103 to the Quarterly Report onForm 10‑Q for the quarter ended March 30, 2015. May 11, 2015 10.104+ 2006 Equity Incentive Plan - Form of Notice of Stock OptionGrant. Filed as Exhibit 10.104 to the Quarterly Report onForm 10‑Q for the quarter ended March 30, 2015. May 11, 2015 10.105+ Employment Agreement dated May 1, 2015 between theRegistrant and Robert M. Vreeland. Filed as Exhibit 10.105 to the Quarterly Report onForm 10‑Q for the quarter ended March 30, 2015. May 11, 2015 10.106+ Amended and Restated Employment Agreement datedDecember 31, 2015, between the Registrant and Andrew J.Littlefair. Filed as Exhibit 10.106 to the Current Report on Form 8‑K. December 31, 2015 91ExhibitNumber Incorporated herein by reference to the following filings: Description Form Filed on10.107+ Amended and Restated Employment Agreement datedDecember 31, 2015, between the Registrant and Robert M.Vreeland. Filed as Exhibit 10.107 to the Current Report on Form 8‑K. December 31, 2015 10.108+ Amended and Restated Employment Agreement datedDecember 31, 2015, between the Registrant and Mitchell W.Pratt. Filed as Exhibit 10.108 to the Current Report on Form 8‑K. December 31, 2015 10.109+ Amended and Restated Employment Agreement datedDecember 31, 2015, between the Registrant and Barclay F.Corbus. Filed as Exhibit 10.109 to the Current Report on Form 8‑K. December 31, 2015 10.110+ Amended and Restated Employment Agreement datedDecember 31, 2015, between the Registrant and Peter J.Grace. Filed as Exhibit 10.110 to the Current Report on Form 8‑K. December 31, 2015 10.111 Promissory Note dated February 29, 2016, between theRegistrant, Clean Energy and PlainsCapital Bank. Filed as Exhibit 10.111 to the Annual Report on Form 10-Kfor the year ended December 31, 2015. March 3, 2016 10.112 Pledged Account Agreement dated February 29, 2016,between Clean Energy, PlainsCapital Bank and PlainsCapitalBank - Wealth Management and Trust. Filed as Exhibit 10.112 to the Annual Report on Form 10-Kfor the year ended December 31, 2015. March 3, 2016 10.113 Loan and Security Agreement dated February 29, 2016,between the Registrant, Clean Energy and PlainsCapitalBank. Filed as Exhibit 10.113 to the Annual Report on Form 10-Kfor the year ended December 31, 2015. March 3, 2016 10.114+ Clean Energy Fuels Corp. 2016 Performance Incentive Plan. Filed as Exhibit 10.114 to the Current Report on Form 8-K. March 27, 2016 10.115 Form of 7.5% Notes Exchange Agreement. Filed as Exhibit 10.115 to the Current Report on Form 8-K. July 15, 2016 10.116 Form of 5.25% Notes Exchange Agreement. Filed as Exhibit 10.116 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. August 9, 2016 10.117+ Clean Energy Fuels Corp. 2016 Performance Incentive Plan-Form of Notice of Stock Option Grant and Terms andConditions of Nonqualified Stock Option. Filed as Exhibit 10.117 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. August 9, 2016 10.118+ Clean Energy Fuels Corp. 2016 Performance Incentive Plan-Form of Notice of Stock Unit Award and Terms andConditions of Stock Unit Award. Filed as Exhibit 10.118 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. August 9, 2016 10.119 Loan Modification Agreement dated October 31, 2016,between the Registrant, Clean Energy and PlainsCapitalBank. Filed as Exhibit 10.116 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2016. November 3, 2016 10.120 Note Repurchase Agreement dated February 6, 2017, by andbetween the Registrant and T. Boone Pickens. Filed as Exhibit 10.119 to the Current Report on Form 8-K. February 6, 2017 21.1* Subsidiaries. 23.1* Consent of Independent Registered Public Accounting FirmKPMG LLP. 92ExhibitNumber Incorporated herein by reference to the following filings: Description Form Filed on24.1* Power of Attorney (included on the signature page to thisreport). 31.1* Certification of Andrew J. Littlefair, President and ChiefExecutive Officer, pursuant to Rule 13a-14(a) or 15d-14(a)of the Securities and Exchange Act of 1934, as adoptedpursuant to Section 302 of the Sarbanes- Oxley Act of 2002. 31.2* Certification of Robert M. Vreeland, Chief Financial Officer,pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities andExchange Act of 1934, as adopted pursuant to Section 302 ofthe Sarbanes-Oxley Act of 2002. 32.1** Certification pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002,executed by Andrew J. Littlefair, President and ChiefExecutive Officer, and Robert M. Vreeland Chief FinancialOfficer. 99.1 Natural Gas Hedge Policy dated May 29, 2008. Filed as Exhibit 99.1 to the Current Report on Form 8-K. June 20, 2008 101 The following materials from the Company's Annual Reporton Form 10-K for the year ended December 31, 2016,formatted in XBRL (eXtensible Business ReportingLanguage): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income(Loss); (iv) Consolidated Statements of Stockholders' Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. _______________________________________________________________________________†Portions of this exhibit have been omitted pursuant to the grant of a request for confidential treatment and the non-public information has been filedseparately with the SEC.*Filed herewith.**Furnished herewith.+Management contract or compensatory plan or arrangement.93

Continue reading text version or see original annual report in PDF format above