UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: December 31, 2021
or
For the transition period from
to
Commission File Number: 001-33480
CLEAN ENERGY FUELS CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
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
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.0001 par value per share
CLNE
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate 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 1934 during 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 requirements for the past
90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-
T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2021, the last business day of the registrant’s most recently
completed second fiscal quarter, was approximately $1,793,811,286. The treatment of persons as affiliates of the registrant for purposes of this calculation is not, and
shall not be considered, a determination as to whether any such person is an affiliate of the registrant for any other purpose.
As of February 18, 2022, there were 222,503,640 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.
Portions of the registrant’s definitive proxy statement for its 2022 annual meeting of stockholders are incorporated by reference in Part III of this report.
DOCUMENTS INCORPORATED BY REFERENCE
Clean Energy Fuels Corp.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2021
TABLE OF CONTENTS
Cautionary Note Regarding Forward-Looking Statements
Business
Risk Factors
Part I
Item 1.
Item 1A.
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4.
Properties
Legal Proceedings
Mine Safety Disclosures
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 6.
Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9.
Item 9A.
Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Part IV
Item 15.
Item 16.
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual 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 are statements other than historical facts. These statements
relate to future events or circumstances or our future performance, and they are based on our current assumptions,
expectations and beliefs concerning future developments and their 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. The absence of these words, however, does not mean that a statement is not forward-looking. The forward-
looking statements we make in this report include statements about, among other things, our future financial and operating
performance, our growth strategies, including expectations regarding our delivery and sales of renewable natural gas and
sale of U.S. federal, state and local government credits, and anticipated trends in our industry and our business.
The preceding list is not intended to be an exhaustive list of all of the topics addressed by our forward-looking
statements. Although the forward-looking statements we make reflect our good faith judgment based on available
information, they are only predictions of future events and conditions. Accordingly, our forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels
of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by our forward-looking statements. Factors that might cause or contribute to such
differences include, among others, those discussed in Item 1A. Risk Factors of this report, as such factors may be amended,
supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the
“SEC”). In addition, we operate in a competitive and rapidly evolving industry in which new risks emerge from time to
time, and it is not possible for us to predict all of the risks we may face. Nor can we assess the impact of all factors on our
business or the extent to which any factor or combination of factors could cause actual results to differ from our
expectations. As a result of these and other potential risks and uncertainties, our forward-looking statements should not be
relied on or viewed as guarantees of future events or conditions.
All of our forward-looking statements speak only as of the date they are made 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 changes in our expectations. You should, however, review the factors and risks we
describe in the reports we will file from time to time with the SEC for the most recent information about our forward-
looking statements and the risks and uncertainties related to these statements.
We qualify all of our forward-looking statements by this cautionary note.
* * * * * * *
Unless the context indicates otherwise, all references to “Clean Energy,” the “Company,” “we,” “us,” or “our” in
this report refer to Clean Energy Fuels Corp., together with its majority and wholly owned subsidiaries.
We own registered or unregistered trademark or service mark rights to Clean Energy™ and Clean Energy
Renewables™. Although we do not use the “®” or “™” symbol in each instance in which one of our trademarks appears
in this report, this should not be construed as any indication that we will not assert our rights thereto to the fullest extent
under applicable law. Any other service marks, trademarks and trade names appearing in this report are the property of
their respective owners.
Investors and others should note that we disseminate information to the public about our Company, our products,
services and other matters through various channels, including our website (www.cleanenergyfuels.com), SEC filings,
press releases, public conference calls and webcasts, in order to achieve broad, non-exclusionary distribution of
information to the public. We encourage investors and others to review the information we make public through these
channels, as such information could be deemed to be material information.
2
Item 1. Business.
Overview
PART I
Clean Energy Fuels Corp., a Delaware corporation, is a leading renewable energy company focused on the
procurement and distribution of renewable natural gas (“RNG”) and conventional natural gas, in the form of compressed
natural gas (“CNG”) and liquefied natural gas (“LNG”), for the United States and Canadian transportation markets. RNG,
which is delivered as either CNG or LNG, is created by the recovery and processing of naturally occurring,
environmentally detrimental waste methane (“biogas”) from non-fossil fuel sources - such as dairy and other livestock
waste and landfills - for beneficial use as a replacement for fossil-based transportation fuels. Methane is one of the most
potent climate-harming greenhouse gases (“GHG”) with a comparative impact on global warming that is about 25 times
more powerful than that of carbon dioxide. We are focused on developing, owning, and operating dairy and other livestock
waste RNG projects and supplying RNG (procured from our own projects or from third parties) to our customers in the
heavy and medium-duty commercial transportation sector. We have participated in the alternative vehicle fuels industry
for over 20 years. We believe we are in a unique position because the valuable Environmental Credits (as defined below)
are generated by the party that dispenses RNG into vehicle fuel tanks, and we believe we have access to more dispensers
than any other market participant.
We believe we were the first organization to supply RNG for vehicle fuel use in the U.S., and sales of our RNG for
such purpose have increased from 13.0 million gasoline gallon equivalents (“GGEs”) in 2013 to 167.0 million GGEs in
2021. We are North America’s leading provider of the cleanest fuel for the commercial transportation market, based on
both the number of stations we operate and the amount of GGEs delivered of RNG, CNG and LNG, which amounted to a
total of 402.6 million GGEs in 2021. With the Company’s focus on RNG, our sales of RNG have grown from 12% of our
vehicle fuel sales in 2013 to 78% of our vehicle fuel sales in 2021 (excluding GGEs from O&M (as defined below) sales
and non-vehicle sales). We believe that during 2021 we provided 58% and 47% of the RNG used for transportation fuel
in California and the United States, respectively.
As a comprehensive clean energy solutions provider, we also design and build, as well as operate and maintain
(“O&M”), public and private vehicle fleet customer stations in the United States and Canada; sell and service compressors
and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional natural gas
via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits (collectively,
“Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification Numbers
(“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California and the
Oregon Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits, grants
and incentives. We serve fleet vehicle operators in a variety of markets, including heavy-duty trucking, airports, refuse,
public transit, industrial and institutional energy users, and government fleets. We believe these fleet markets will continue
to present a growth opportunity for our vehicle fuels for the foreseeable future.
Commercial transportation, including heavy-duty trucking, generates a significant portion of the emissions of overall
carbon dioxide and other climate-harming GHGs, and transitioning this sector to low and negative carbon fuels is a critical
step towards reducing overall global GHG emissions. According to the Global Carbon Project’s Global Carbon Budget
published in November 2021, 34.8 billion metric tons of carbon dioxide were emitted globally in 2020, of which 7.3 billion
metric tons, or 21%, came from the transportation sector. There is a global demand for reducing GHG emissions, as
evidenced by 96% of the world’s countries having committed to the Paris Agreement according to The United Nations
Framework Convention in Climate Change, and 92% of S&P 500 companies focusing on sustainability metrics, including
GHG emissions, according to the Governance & Accountability Institute’s Flash Report published in 2021.
Biogas, the primary source of RNG, is produced by microbes as they break down organic matter in the absence of
oxygen. Our sources of commercial scale biogas are anaerobic digester gas (“ADG”), which is produced inside an airtight
tank used to breakdown organic matter such as dairy and other livestock waste, and landfill gas (“LFG”), which is produced
by the decomposition of organic waste at landfills.
3
Given the potential growth and positive environmental impact of RNG, our mission is to obtain as much RNG supply
as possible. To that end we are pursuing development and ownership of dairy and other livestock waste ADG projects on
our own and with partners including TotalEnergies S.E. (“TotalEnergies”) and BP Products North America (“bp”).
Further, we enter long-term RNG supply offtake agreements with well-known third parties that own RNG production
facilities. Because our business transforms waste methane into a renewable source of energy, our RNG generates valuable
Environmental Credits under federal and state initiatives.
Depending on the source, the California Air Resources Board (“CARB”) has determined that RNG can have a
significantly negative carbon intensity score, enabling our customers to achieve a net carbon negative emissions profile.
FUEL CARBON INTENSITY SCORES
(100p/ML)
200
100
0
(100)
(200)
(300)
(400)
164
56
Diesel
75
81
0
E
V
T
A
G
E
N
N
O
B
R
A
C
(346)
Hydrogen
Electricity
RNG
California Air Resources Board “Current Fuel Pathways” 2018 – 2020 (5th-95th percentile)
At present, we see the best use of RNG as a replacement for fossil-based fuel in the transportation sector. We believe
the most attractive market for RNG is U.S. heavy-duty Class 8 trucking and, based on information from the American
Trucking Association and our own internal estimates, we believe there are approximately 3.9 million Class 8 heavy-duty
trucks operating in the U.S. that use over 40 billion gallons of diesel fuel per year. As of December 31, 2021, we deliver
RNG to the transportation market through 548 fueling stations we own, operate or supply in 42 states and the District of
Columbia in the U.S., including over 200 stations in California. We also own, operate, or supply 25 fueling stations in
Canada. Critically, to generate valuable Environmental Credits, the RNG must be placed in vehicle fuel tanks. We believe
our stations and customer relationships allow us to deliver substantially more RNG to vehicle operators than any other
participant in the market – we calculate that we have access to more fueling stations and vehicle fleets than all our
competitors combined. As of December 31, 2021, we serve over 1,000 fleet customers operating over 48,000 vehicles on
our fuels. We believe we are the only company in the U.S. that provides RNG vehicle fuel at scale in California and
nationally.
Longer term, we plan to provide hydrogen fuel to vehicle fleets. As operators deploy more hydrogen powered
vehicles, we can modify our fueling stations to reform our RNG and deliver clean hydrogen to customers. We also believe
our RNG can be used to generate clean electricity to power electric vehicles, and we have the capability to add electric
vehicle charging at our station sites.
4
Our Principal Products, Services and Other Business Activities
Our principal products, services and other business activities are described below. Information about the revenue we
receive from these activities is discussed in this report in Item 7. “Management’s Discussion and Analysis of Results of
Operations and Financial Condition.”
RNG, CNG and LNG Sales.
• Unlike other renewables, RNG is easily stored, distributed, and replenished. RNG can be injected into the
existing natural gas distribution network and delivered to vehicle fuel stations and liquefaction facilities.
While other sources of green and renewable energy require significant infrastructure buildout to be
implemented, RNG is affordable and easily used in existing infrastructure and vehicles today. Further,
CARB has determined that RNG holds the lowest carbon intensity of any on-road vehicle fuel, including
fully renewable electric from solar and wind.
• CNG is RNG or conventional natural gas that is compressed and dispensed in gaseous form. CNG is typically
delivered by obtaining RNG or conventional natural gas from the pipeline and then compressing and storing
it at a fueling station and dispensing it directly into a vehicle. Our CNG vehicle fuel sales are made primarily
through contracts with our customers or on a per fill-up basis at prices we set at public access fueling stations
based on prevailing market conditions. Through our subsidiary NG Advantage, LLC (“NG Advantage”), we
also transport and sell CNG for non-vehicle purposes via virtual natural gas pipelines and interconnects to
industrial and institutional energy users that do not have direct access to pipelines. NG Advantage also has
the capability to transport RNG from production facilities to pipeline injection sites using its fleet of 98 high-
capacity trailers.
• LNG is RNG or conventional natural gas that is cooled at a liquefaction facility to approximately -260
degrees Fahrenheit until it condenses into a liquid. We obtain LNG from our own liquefaction plants and
from third-party suppliers. We own and operate LNG liquefaction plants near Boron, California and Houston,
Texas, which we refer to as the “Boron Plant” and the “Pickens Plant,” respectively. In 2021, we purchased
9.2% of our LNG from third-party suppliers, and we produced the remainder of our LNG at our plants. We
sell LNG for use as a vehicle fuel on a bulk basis to fleet customers and through our network of public access
fueling stations. We deliver LNG with our fleet of 74 tanker trailers to fueling stations, where it is stored and
then dispensed in liquid form into vehicles. The need to liquefy and transport LNG generally causes LNG to
cost more than CNG. We sell LNG through supply contracts and on a per fill-up basis at prices we set at
public access fueling stations based on prevailing market conditions. Additionally, we sell LNG for non-
vehicle purposes, including to customers who use LNG in rocket propulsion and oil fields, and for utility,
industrial, marine and rail applications.
Sales of Environmental Credits. We generate Environmental Credits consisting of RINs, as well as LCFS Credits,
when we sell RNG for use as a vehicle fuel in the United States, California, and Oregon, respectively. We sell these
Environmental Credits to third parties who must comply with federal and state emissions requirements. Generally, the
amount of Environmental Credits we generate increases as we sell higher volumes of RNG as a vehicle fuel. The number
of Environmental Credits we sell and our revenue from these sales can vary depending on a number of factors, including
the market for these credits, which has been volatile and subject to significant price fluctuations in recent periods (for
example, in 2021, market prices for RINs were as high as $3.81 and as low as $1.95), any changes to the federal and state
programs under which the credits are generated and sold, and our ability to strictly comply with these programs.
O&M Services. We perform maintenance service on Clean Energy-owned and customer-owned fueling stations. Our
maintenance program is backed by nearly 200 company employed service technicians and support personnel, an in-house
24/7 remote monitoring center, technician training center, computerized maintenance management system and inventory
warehouses throughout the United States and Canada. For maintenance services, we generally charge a fixed fee or per
gallon fee based on volume of fuel dispensed at the station.
5
Station Construction and Engineering. We design and construct fueling stations and sell or lease some of these
stations to our customers. Since 2008, we have served as the general contractor or supervised qualified third-party
contractors to build over 440 natural gas fueling stations.
Grant Programs. We apply for and help our fleet customers apply for federal, state and local grant programs in
areas in which we operate. These programs can provide funding for vehicle purchases, fueling station construction and
vehicle fuel sales.
Our Company’s Sustainability Program
Our vision is to deliver renewable transportation fuel for a cleaner, safer, more equitable tomorrow. We have a bold
program, supported by ambitious goals to drive progress across four key pillars: fueling the transition to renewable energy
in transportation, building the workforce for the future of renewable energy, advancing smart policies that drive the
transformation to zero carbon fuels, and earning stakeholder trust.
Fueling transportation’s transition to renewable energy.
The fuel we provide enables our customers to transition from diesel to a solution with significantly lower GHG
emissions and air quality impacts today. We are committed to pushing ourselves and our partners further by helping to
produce and distribute 100% RNG fuels, which can have a negative net carbon emissions profile. We are also committed
to doing our part to reduce our own emissions across our operations and supply chain.
Building the workforce for the future of renewable energy.
At Clean Energy we have always had a strong focus on employee and contractor safety and strive to be a zero-incident
workplace for our service technicians and staff, as well as our customers using our facilities. Looking towards the future,
we will continue to focus on employee recruitment, retention, and engagement, with a specific emphasis on diversity,
equity, and inclusion in all areas of our company. It is important that we build and maintain a diverse and inclusive
workforce, leadership team and supplier base that are reflective of the communities in which we operate. We acknowledge
the lack of diversity in the energy sector and strive to be part of the solution.
Advancing smart policies that drive the transformation to zero carbon fuels.
Widespread change will be necessary across all industries to achieve our collective climate goals. We recognize that
some physical climate impacts are unavoidable in the near-term and that the transition to a low carbon economy may bring
new risks to our business. We also recognize that natural gas extraction and processing causes environmental and social
impacts that must be appropriately managed. By investing in the energy transition, our aim is to reduce our own risks and
provide lasting benefits to society. To enable lasting change, we must ensure the adoption of performance-driven state and
federal policies that accelerate the shift from diesel and other transportation fuels with high GHG emissions and negative
air quality impacts to zero net carbon emission transportation fuels. We are also committed to contributing to quality of
life improvement and economic development in the communities where we conduct business, many of which are
disadvantaged communities that suffer from poor air quality due to the use of transportation fuels, including diesel, that
have high GHG emissions and significantly negative air quality impacts.
Earn stakeholder trust.
To realize our ambitious goals we are building trusted partnerships with our stakeholders. We strive to act ethically
and responsibly in all aspects of our business, seeking to meet expectations related to human rights, labor standards, air
quality, water stewardship, operational energy efficiency, biodiversity and land use, disaster preparedness, business ethics,
and other material topics.
6
Market Opportunity
Increasing demand for RNG
Demand for RNG produced from biogas is significant and growing in large part due to an increased focus by the U.S.
public and investors, as well as federal, state, and local regulatory authorities, on reducing the emission of GHG, such as
methane. According to the U.S. Environmental Protection Agency (“EPA”), methane is a significant GHG, which
accounted for roughly 10% of all U.S. GHG emissions from human activities in 2019 and which has a comparative impact
on global warming that is about 25 times more powerful than that of carbon dioxide. Biogas processing facilities
substantially reduce methane emissions at livestock farms and landfills, which together accounted for approximately 53%
of U.S. methane emissions in 2019 according to the EPA.
Over the past decade we have seen the transportation sector be the fastest growing end market for RNG, where RNG
is used as a replacement for fossil-based fuel. This growth has been principally driven by an increased focus on reducing
GHGs, as well as Environmental Credits to support the production of renewable transportation fuels. According to NGV
America, a national organization dedicated to the development of a growing, profitable, and sustainable market for vehicles
powered by RNG, from 2015 to 2020, “RNG use as a transportation fuel increased 267%, and, in 2020, RNG use as a
motor fuel displaced 3.5 million tons of carbon dioxide equivalent.” Further, RNG engines now commercially available
for heavy-duty, regional-haul, refuse, transit, and vocational applications have been certified to satisfy CARB’s optional
low nitrogen oxide (“NOx”) emission standard of 0.02 g/bhp-hr. This means that these engines emit 90% less smog-
forming NOx than the existing regulatory standards, making them the lowest certified ultra-low NOx emission engines in
the U.S.
Given public and investor calls for, and U.S. federal, state, and local regulatory trends and policies aimed at, reducing
GHG emissions, we expect continued regulatory support for RNG as a replacement for fossil-based fuels and therefore
continued and growing demand for RNG in the foreseeable future.
Increasing vehicle availability
RNG is a replacement for fossil-based fuel consumed by vehicles that use internal combustion engines like those used
in gasoline- or diesel-powered vehicles. Virtually any car, truck, bus, or other vehicle is capable of being manufactured to
run on RNG. Many types and models of heavy- and medium-duty RNG vehicles and engines are available in the U.S.,
including, among others, long-haul tractors, refuse trucks, regional tractors, transit buses, ready-mix trucks, delivery
trucks, vocational work trucks, school buses, shuttles, pickup trucks and cargo and passenger vans.
More broadly, many companies are developing and commercializing hydrogen and electric commercial vehicles,
particularly as the commercial transportation sector increasingly shifts toward low-emission, zero-emission, or carbon
neutral vehicle solutions. Cummins, Daimler, Dana, Navistar, PACCAR, Toyota, Volvo, XOS, Tesla and Nikola have
announced their plans to bring long-haul Class 8 commercial hydrogen- and battery-powered vehicles to the market over
the coming years.
Availability of long-term feedstock supply
Biogas is collected and processed to remove impurities for use as RNG and injected into existing natural gas pipelines.
RNG is fully interchangeable with and chemically identical to conventional natural gas. Common sources of biogas include
livestock farms, landfills, and wastewater resource recovery facilities.
Livestock- and landfill-sourced biogas represent a significant opportunity to produce RNG and reduce GHG
emissions. Although LFG has accounted for most of the growth in biogas projects to date, biogas from dairy and other
livestock farm waste represents significant opportunities for RNG production that remain largely untapped. According to
ICF Consulting, Inc., the global consulting services company, by 2040, the U.S. has the technical potential to annually
produce up to 34.4 billion GGEs of RNG, including up to 20.6 billion GGEs of ADG RNG.
7
All-in prices paid for RNG from livestock farms can be significantly higher than prices for RNG from landfills due to
higher value available from state-level low-carbon fuel incentives for these projects. Given our market leadership in RNG,
we believe we are well-positioned to take advantage of this market.
TotalEnergies Joint Venture
On March 3, 2021, we entered an agreement (“TotalEnergies JV Agreement”) with TotalEnergies that created a 50/50
joint venture (“TotalEnergies JV”) to develop ADG RNG production facilities in the United States. The TotalEnergies JV
Agreement contemplates that the TotalEnergies JV will invest up to $400 million of equity in production projects, and
TotalEnergies and the Company each committed to initially provide $50 million for the TotalEnergies JV. Pursuant to the
TotalEnergies JV Agreement, the Company and TotalEnergies have given the TotalEnergies JV a limited right of first
opportunity to invest in ADG RNG projects they respectively originate. On October 12, 2021, we entered into an LLC
agreement (the “DR Development Agreement”) with TotalEnergies to develop a dairy ADG RNG production facility
project (the “DR JV”). Under the DR Development Agreement, we and TotalEnergies have each committed to contribute
$7.0 million to the DR JV. On November 1, 2021, we and TotalEnergies have each contributed an initial $4.8 million
capital contribution to the DR JV.
bp Joint Venture
On April 13, 2021, pursuant to a memorandum of understanding we entered into with bp in December 2020, we
entered an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture (the “bpJV”) to develop, own and
operate new ADG RNG production facilities in the United States. Pursuant to the bp JV Agreement, bp and the Company
each committed to provide $50.0 million and $30.0 million, respectively, with an option available to the Company,
exercisable prior to August 31, 2021, to commit an additional $20.0 million to the bpJV. bp’s initial $50.0 million
contribution was made on April 13, 2021 and consisted of all unpaid principal outstanding under the loan agreement dated
December 18, 2020 (see Note 12), pursuant to which bp advanced $50.0 million to the Company to fund capital costs and
expenses incurred prior to formation of the bpJV, including capital costs and expenses for permitting, engineering,
equipment, leases and feed stock rights. On June 21, 2021, we contributed $50.2 million to the bpJV. In December 2021,
the bpJV authorized a capital call (the “bpJV Capital Call”) for additional funding of $143.2 million to construct ADG
RNG projects under the bpJV. Pursuant to the bpJV Capital Call, we and bp are each required to contribute $71.6 million
to the bpJV. As of December 31, 2021, we and bp have contributed $20.0 million and $71.6 million, respectively, to the
bpJV in connection with the bpJV Capital Call. The remaining contribution balance of $51.6 million due from us will be
paid on or prior to June 30, 2022. As of December 31, 2021, we and bp each own 50% of the bpJV. 100% of the RNG
produced from projects developed and owned by the bpJV will be provided to the vehicle fuels market pursuant to our
existing marketing agreement with bp.
Use of environmental credits to promote RNG growth
When used as a transportation fuel, RNG generates additional revenue streams through Environmental Credits. These
Environmental Credits are provided under a variety of programs, including the national Renewable Fuel Standards
(“RFS”), and state-level Low Carbon Fuel Standard (“LCFS”) programs.
The RFS program requires transportation fuel to contain a minimum volume of renewable fuel. To fulfill this
regulatory mandate, the EPA obligates refiners and importers (“Obligated Parties”) to blend renewable fuel with standard
fuel to meet renewable volume obligations (“RVOs”). Obligated Parties can comply with RVOs by either blending RNG
into their existing fuel supply or purchasing Renewable Identification Numbers, or RINs. RINs are generated when eligible
renewable fuels are produced or imported and blended with a petroleum product for use as a transportation fuel. The RFS
program has been a key driver of growth in the RNG industry since 2014 when the EPA ruled that RNG, when used as a
transportation fuel, would qualify for D3 RINs (for cellulosic biofuels), which are generally the most valuable among the
four categories of RINs. In 2021, we generated 47% of all D3 RINs in the U.S.
The monetization of RNG also benefits from low-carbon fuel initiatives at the state-level, specifically from established
programs in California and Oregon. California’s LCFS (“CA LCFS”) program requires fuel producers and importers to
reduce the carbon intensity (“CI”) of their products, with goals of a 10% reduction in carbon emissions from 1990 levels
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by 2020 and a 20% reduction by 2030. CARB awards CA LCFS credits to RNG projects based on each project’s CI score
relative to the target CI score for gasoline and diesel fuels. The CI score represents the overall net impact of carbon
emissions for each RNG pathway and is determined on a project-by-project basis. Because our business involves the
capture and transformation of waste methane into a renewable source of energy, our customers are able to significantly
reduce, if not eliminate, GHG emissions from their commercial transportation activities. Further, CARB calculates that
RNG produced by livestock farms as carbon negative, generating substantial incremental CA LCFS credits. Multiple other
states, including New York, Washington, and New Mexico are considering LCFS initiatives like those implemented in
California and Oregon. In 2021, we generated 37% of all LCFS credits under Bio-CNG and Bio-LNG pathways in the CA
LCFS.
Our Strategy
We aim to maintain and increase our position as the leading provider of RNG to the commercial vehicle market in
North America, and our goal is to deliver 100% RNG to our entire fueling infrastructure by 2025. We support this objective
through a multi-pronged strategy of:
•
•
•
•
•
promoting the reduction of GHG emissions and expanding the use of renewable fuels to displace fossil-based
fuels;
increasing supply of RNG through the development of new project investment opportunities, expanding our
existing supplier portfolio, and leveraging our existing fuel network and customer relationships;
empowering our customers to achieve their sustainability and carbon reduction objectives;
leveraging our management expertise; and
utilizing our environmental, health and safety and compliance leadership.
Promoting the reduction of methane emissions and expanding the use of renewable fuels to displace fossil-based fuels.
We share the renewable fuel industry’s commitment to provide sustainable renewable energy solutions and to offer
products with high economic and ecological value. By simultaneously replacing fossil-based fuels and reducing overall
methane emissions, our business has a substantial positive environmental impact. We are committed to the sustainable
development, deployment, and utilization of RNG to reduce the country’s dependence on fossil fuels. In addition to its
methane emission benefits, the increased production and use of RNG has several other environmental benefits.
Anaerobically digested livestock waste produces significantly less odor than conventional storage and land application
systems. The odor of stored livestock waste mainly comes from volatile organic acids and hydrogen sulfide, which has a
“rotten egg” smell. In an anaerobic digester, volatile organic compounds are reduced to methane and carbon dioxide, which
are odorless gases. The volatized fraction of hydrogen sulfide is captured with the collected ADG and destroyed.
Anaerobic digestion provides several water quality and land conservation benefits as well. Digesters, particularly heated
digesters, can destroy more than 90% of disease-causing bacteria that might otherwise enter surface waters and pose a risk
to human and animal health. Digesters also reduce biochemical oxygen demand (“BOD”). BOD is one measure of the
potential for organic wastes to reduce dissolved oxygen in natural waters. Because fish and other aquatic organisms need
minimum levels of dissolved oxygen for survival, farm practices that reduce BOD protect the health of aquatic ecosystems.
In addition to protecting local water resources, implementing anaerobic digesters on livestock facilities improves soil
health. Adding digestate to soil increases the organic matter content, reduces the need for chemical fertilizers, improves
plant growth and alleviates soil compaction. Further, digestion converts nutrients in manure to a more accessible form for
plants to use. The risks of water and soil contamination from flooding of open lagoons are also mitigated by digesters.
Increasing supply of RNG through the development of new project opportunities, expanding our existing supplier
portfolio, and leveraging our extensive fueling station network and customer relationships.
In our view, the market has not yet unlocked the full potential of RNG. We believe we were the first to deliver RNG
to the commercial vehicle fuels market, have the most extensive RNG fueling infrastructure and customer relationships,
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and our stations and customer relationships allow us to obtain and deliver substantially more RNG to vehicle operators
than any other participant in the market. This is important because RNG must be placed in vehicle fuel tanks to generate
the valuable Environmental Credits.
Dependable and economic sources of RNG are critical to our success. We continue to leverage our relationships built
over the past several decades to identify and execute new RNG project development and supply offtake opportunities.
These come from our relationships with feedstock owners and project developers who value our long operating history,
strong reputation in the industry and unmatched access to fueling infrastructure and vehicle operators for certainty of
Environmental Credit generation. Based on the foregoing, we believe that we are presented with nearly every material
development, supply and distribution opportunity in the market.
We exercise financial discipline in pursuing projects by targeting project returns that are in line with the relative risk
of the specific projects and associated feedstock costs and any related attributes that can be monetized. We also support
third parties that own RNG production facilities by entering into long-term RNG supply offtake agreements. As these
facility owners expand their operations, we provide additional access to our fueling infrastructure and customer
relationships.
As of December 31, 2021, we obtain RNG from over 60 supply sources. We believe that we have one of the largest
and most diverse supply portfolios in the RNG industry, which allows us to provide certainty of RNG supply to our vehicle
operator customers.
In our view, all the foregoing gives us a competitive advantage relative to existing and new market entrants.
Empowering our customers to achieve their sustainability and carbon reduction objectives.
In November 2021, global leaders met in Glasgow for the United Nations Climate Change Conference (“COP26”) to
draw up a successor plan to the Paris Agreement. With evidence indicating that the Paris Agreement targets may fall short
of limiting global warming to 1.5°C, governments and regulators globally face mounting public pressure to address the
threat of climate change. The United States has re-joined the Paris Agreement and key investors have made climate change
risk management a key priority: BlackRock stated in its 2021 stewardship expectations guidelines that “[t]he events of
[2020] have intensified our conviction that sustainability risk—and climate risk in particular—is investment risk” and
plans to expand its engagement to the over 1,000 companies that are responsible for producing 90% of GHG emissions in
its investment portfolio. Similarly, in his 2021 letter to boards, Cyrus Taraporevala, State Street’s CEO and President, said
the asset manager will be elevating its focus on climate risk, noting that ahead of COP26, “policymakers are assessing
progress on climate change action . . . many jurisdictions are signaling their intentions to make climate risk disclosure
mandatory.” Vanguard has determined that “it is critical that public company boards fully understand and own climate-
related risks.”
We are uniquely positioned to empower our customers to achieve their sustainability and carbon reduction goals.
Because our business involves the capture and transformation of waste methane into a renewable source of energy, we
believe our customers can significantly reduce, if not eliminate, GHG emissions from their commercial transportation
activities. Further, our RNG is available today to reduce climate harming GHG and meet sustainability objectives and at
a cost to customers that is very competitive to other fuels like diesel. We also assist our customers in their transition to
cleaner transportation fuels by helping them obtain federal, state and local tax credits, grants and incentives, providing
vehicle financing, including through our Zero Now and Chevron Adopt-a-Port programs, engineering and constructing
fueling stations, and facilitating customer selection of vehicle specifications that best meet their needs.
Management expertise
Our management team has decades of combined experience in the alternative vehicle fueling industry. We believe
our team’s proven track record in alternative vehicle fuels and focus on RNG gives us a strategic advantage in continuing
to grow our business profitably. Our diverse experience and integration of key technical, environmental, and administrative
support functions, along with our first-to-market advantage, further our ability to successfully deliver RNG to the
commercial vehicle fuels market.
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Environmental, health and safety and compliance leadership
Our executive team places the highest priority on the health and safety of our staff and third parties, as well as the
preservation of the environment. Our corporate culture is built around supporting these priorities, as reflected in our well-
established practices and policies. By setting and maintaining high standards in the renewable energy field, we are often
able to contribute positively to the safety practices and policies of our partners and customers. Our high safety standards
include use of wireless gas monitoring safety devices, active monitoring of all field workers, performing environmental
health and safety (“EHS”) audits and using technology throughout our safety processes from employee training in
compliance with operational processes and procedures to emergency preparedness. By extension, we incorporate our EHS
standards into our subcontractor selection qualifications to ensure that our commitment to high EHS standards is shared
by our subcontractors. For 2021, our Total Recordable Incident Rate (“TRIR”) was 1.55, which is lower than the 2020
national average of 3.00 TRIR for all industries. As of December 31, 2021, we have not received any U.S. Occupational
Health and Safety Administration (“OSHA”) or state OSHA citations in the last five years.
How We Generate Revenue
We generate revenue from selling RNG and conventional natural gas as a vehicle fuel, as well as by selling the
associated Environmental Credits. RNG made up 78% of our vehicle fuel sales in 2021, and we expect 100% of our
vehicle fuel sales to be RNG by 2025. Although RNG has the same chemical composition as natural gas from fossil
sources, it has unique Environmental Credits assigned to it due to its origin from low- and negative-carbon, renewable
sources. The Environmental Credits that we sell are composed of RINs and state low-carbon fuel credits, including CA
LCFS credits, which are generated from the conversion of biogas to RNG that is used as a transportation fuel.
In addition to revenues generated from sales of RNG and conventional natural gas as a vehicle fuel and Environmental
Credits, we also generate revenues by providing O&M services for public and private RNG, natural gas and hydrogen
vehicle fleet customer stations; selling and servicing compressors and other equipment used in RNG production and at
RNG, natural gas and hydrogen stations; and obtaining federal, state and local tax credits, grants and incentives.
We are experts in the engineering, design and construction of fueling stations. When we build stations for customers,
we charge construction, other fees, or lease rates based on the size and complexity of the project. Since 2008, we have
served as the general contractor or supervised qualified third-party contractors to build over 440 fueling stations.
• Equipment for RNG stations consists of compressors, storage tanks, and dispensers.
• As operators deploy hydrogen-powered vehicles, we can modify our fueling stations and build additional stations
to dispense clean hydrogen produced from our RNG. The equipment for hydrogen stations includes compressors,
storage tanks, and dispensers, provided that the cost of adding hydrogen fueling may be significant.
• We also have the capability to add high speed level 3 electric vehicle charging at our station sites, and our RNG
can be used as a clean resource to power electric vehicles via on-site generation and/or routing to the electric grid
serving our stations, although the cost of adding electric vehicle charging capacity may be significant.
Key Customer Markets
We serve customers in a variety of markets, including trucking, airports, refuse and public transit. We believe these
customer markets are well-suited for the adoption of RNG and other alternative vehicle fuels because they consume
relatively high volumes of fuel, refuel at centralized locations or along well-defined routes and/or are facing increasingly
stringent emissions or other environmental requirements. During the years ended December 31, 2019, 2020 and 2021, no
single customer accounted for 10% or more of our total revenue.
Trucking
We believe heavy-duty trucking represents the greatest opportunity for RNG and other alternatives to be used as a
vehicle fuel. We estimate there are over 3.9 million Class 8 heavy-duty trucks operating in the U.S. using over 40 billion
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gallons of diesel fuel each year. As of December 31, 2021, we provided our fuels to over 4,000 heavy-duty trucks. Because
these high-mileage vehicles consume substantial amounts of fuel, operators can derive significant benefits from the carbon
and GHG reductions associated with our vehicle fuels. We are focused on fueling more heavy-duty trucks, and many well-
known shippers, manufacturers, retailers and other truck fleet operators have started to use RNG fueled trucks to move
their freight, including, among others, Amazon, Pepsi Frito-Lay, FedEx, Anheuser-Busch, USPS, UPS, Kroger, KeHe
Distributors, Kenan Advantage Group, and Estes Express.
Zero Now
To help facilitate the transition of trucking fleets to our fuels, we have launched the Zero Now truck financing program,
which is intended to increase the deployment of the commercially available RNG heavy-duty trucks in the U.S. The Zero
Now program generally involves the following:
• One or more truck leasing or finance companies lease or sell RNG heavy-duty trucks to vehicle fleets pursuant
to lease or sale agreements with the fleet operators and with us, providing for periodic payments by the fleet
operators of amounts equal to the payments that will be made for the lease or purchase of an equivalent truck that
operates on diesel fuel, and providing for payment by us of the incremental cost of the RNG truck over and above
the diesel-equivalent truck; and
• The fleet operators participating in the program enter into fueling agreements with us, under which the operators
agree to purchase from us, and we agree to supply, minimum monthly volumes of RNG at prices (which are lower
than diesel prices per GGE) to operate the trucks leased or purchased in the program and allow us to recoup our
payment of the incremental cost of the RNG trucks.
We previously entered into the following agreements to implement the Zero Now program:
•
•
In January 2019, we entered into a term credit agreement with Société Générale (“SG”), as lender, under which
we were permitted to draw, from time to time, through January 2, 2022, up to an aggregate of $100.0 million to
satisfy our payment obligations for the incremental cost of RNG trucks under the truck lease or sale agreements
described above; and
In January 2019, we entered into a credit support agreement with TotalEnergies Holdings USA Inc. (“THUSA”),
a wholly owned subsidiary of TotalEnergies (which indirectly through another of its subsidiaries, holds
approximately 19% of our outstanding common stock), pursuant to which THUSA guaranteed our obligations
under the term credit agreement with SG. In consideration for such guaranty, we agreed to pay to THUSA a
quarterly fee at a rate per annum equal to 10% of the average amount owed by us under the term credit agreement
during the preceding quarter.
In addition, we are supporting the growth of the RNG heavy-duty truck market through commodity swap arrangements
under which we have locked in a discount price to diesel for customers fueling with us; our negotiation of favorable fuel
tank pricing from manufacturers, which we are passing along to our customers; and our network of truck-friendly fueling
stations (we refer to this network as “America’s Natural Gas Highway” or “ANGH”), which we have built in key locations
nationwide. Many existing ANGH stations are located at Pilot Travel Centers, the largest truck fueling operator in the
United States.
Chevron Adopt-a-Port Program
In 2020, we partnered with Chevron on Adopt-a-Port, an initiative that provides truck operators serving the ports
of Los Angeles and Long Beach with RNG to reduce emissions. For its part, Chevron provides funding for Adopt-a-Port
and supplies RNG to Clean Energy stations near the ports. Chevron’s funding allows truck operators to subsidize the cost
of buying new RNG-powered trucks. We manage the program, including offering fueling services for qualified truck
operators. Truck operators participating in the program, which supports the ports’ Clean Trucks Program and Clean Air
Action Plan, fuel at our stations supplied with Chevron RNG. Importantly, Adopt-a-Port provides a meaningful air quality
improvement for the adversely impacted communities around the port – such communities typically have the worst air
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quality in the nation. As of December 31, 2021, customers had ordered 211 trucks under Adopt-a-Port, and we expect over
300 additional trucks to be ordered in 2022.
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 regulatory directives and political pressure to reduce pollution,
particularly as part of any expansion plans. As a result, many of these airports have adopted various strategies to address
tailpipe emissions, including rental car and hotel shuttle consolidation and requiring or encouraging service vehicle
operators to switch their fleets to our vehicle fuels. As of December 31, 2021, we serve customers at 32 airports.
Refuse
We believe that there are nearly 200,000 refuse trucks in the United States that collect and haul refuse and recyclables,
which aggregately consume approximately two billion gallons of fuel per year. We estimate that approximately 60% of
new refuse trucks are capable of operating on RNG, up from approximately 3% of new refuse trucks in 2008. Refuse
haulers are increasingly adopting trucks that run on our vehicle fuels to realize operational savings and to address demands
for reduced emissions from the public, investors, and governmental agencies. As of December 31, 2021, we fuel
approximately 14,000 refuse vehicles for customers including Waste Management, Republic Services, Waste Connections,
GFL Environmental, Atlas Disposal, Burrtec, CR&R, Recology and Waste Pro, among others. We also provide vehicle
fueling services to municipal refuse fleets.
Public Transit
We believe that there are over 72,000 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 fuel at a central location and use high volumes of fuel. We estimate that transit agencies in the
United States consume approximately one billion gallons of fuel per year. Many transit agencies have been early adopters
of vehicles using our fuels, and over 25% of existing transit buses and approximately 35% of new transit buses can operate
on RNG. As of December 31, 2021, we fuel over 9,000 transit vehicles for customers including Los Angeles County
Metropolitan Transit Authority, New York MTA, Foothill Transit (Los Angeles County, California), Orange County
Transit Authority, Santa Monica Big Blue Bus, Dallas Area Rapid Transit, Phoenix Transit, New Jersey Transit,
Jacksonville Transportation Authority, NICE Bus (Nassau County, New York) and Washington Metro Area
Transportation Authority.
Competition
There are many other companies operating in the renewable energy and waste-to-energy space. Regarding RNG
production and supply, our primary competition is from other companies or solutions for access to biogas from waste.
Evolving consumer preferences, regulatory conditions, ongoing waste industry trends, and project economics have a strong
effect on the competitive landscape. We have demonstrated a track record of strategic flexibility across our history which
has allowed us to pivot towards projects and markets that we believe deliver optimal returns and stockholder value in
response to changes in market, regulatory and competitive pressures. The biogas and RNG markets are heavily fragmented.
We believe we are in a strong position to compete for new project development and supply opportunities. Competition for
such opportunities, however, including the prices being offered for fuel supply, affect the profitability of the opportunities
we pursue, and may make opportunities unsuitable to pursue.
The market for vehicle fuels is highly competitive. The biggest competition for RNG use as a vehicle fuel is gasoline
and diesel because most vehicles in our key markets are powered by these fuels. Many established businesses are in the
market for RNG and other alternatives for use as vehicle fuel, including alternative vehicle and alternative fuel companies,
refuse collectors, industrial gas companies, truck stop and fuel station owners, fuel providers, utilities and their affiliates
and other organizations. We also compete with suppliers of other alternative vehicle fuels, including renewable diesel,
biodiesel and ethanol, as well as producers and fuelers of alternative vehicles, including hybrid, electric and hydrogen-
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powered vehicles. Additionally, our stations compete directly with other natural gas fueling stations and indirectly with
electric vehicle charging stations and fueling stations for other vehicle fuels. In addition, we transport and sell CNG through
NG Advantage’s virtual natural gas pipelines and interconnects and compete with other participants in this market.
If the alternative vehicle fuel market grows then the number and type of participants in this market and their level of
capital and commitments to alternative vehicle fuel programs will increase. We compete for vehicle fuel users based on
demand for the type of fuel, which may be affected by a variety of factors, including, among others, cost, supply,
availability, quality, cleanliness, and safety of the fuel; cost, availability and reputation of vehicles and engines;
convenience and accessibility of fueling stations; regulatory mandates and other requirements; and recognition of the
brand. We believe we compare favorably with our competitors based on these factors; however, some of our competitors
have substantially greater financial, marketing, and other resources than we have. As a result, these competitors may be
able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends;
devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies,
dedicate more effort to infrastructure and systems development in support of their business or product development
activities; implement more robust or creative initiatives to advance consumer acceptance of their products; or exert more
influence on the regulatory landscape that impacts the vehicle fuels market.
Governmental Regulation
We are subject to a variety of federal, state and local laws and regulations relating to the environment, health and
safety, labor and employment, building codes and construction, zoning and land use, the government procurement process,
any political activities or lobbying in which we may engage, public reporting and taxation, among others. Many of these
laws and regulations are complex, change frequently and have become more stringent over time. Any changes to existing
regulations, adoption of new regulations or failure by us to comply with applicable regulations may result in significant
additional expense to us or our customers or a variety of administrative, civil, and criminal enforcement measures, any of
which could have a material adverse effect on our business, reputation, financial condition and results of operations.
Certain regulations that significantly affect our various operating activities are described below. Compliance with these
regulations has not had a material effect on our capital expenditures, earnings, or competitive position to date, but new
regulations or amendments to existing regulations to make them more stringent could have such an effect in the future.
We cannot estimate the expenses we may incur to comply with potential new laws or changes to existing laws, or the other
potential effects these laws may have on our business, and these unknown costs and effects are not specifically
contemplated by our existing customer agreements or our budgets and cost estimates.
We are subject to federal, state, and local air quality, solid waste, and water quality regulations and permitting
requirements. Specific construction and operating permit requirements may differ among states. Specific permits we
frequently must obtain include air permits, nonhazardous waste management permits, pollutant discharge elimination
permits, and beneficial use permits. We must also maintain compliance with relevant federal, state and local
environmental, health and safety requirements.
RNG projects are subject to federal RFS program regulations. The EPA administers the RFS program with volume
requirements for several categories of renewable fuels. The EPA’s RFS regulations establish rules for fuel supplied and
administer the RIN system for compliance, trading credits and rules for waivers. The EPA calculates a blending standard
for each year based on estimates of gasoline usage from the Department of Energy’s Energy Information Agency. Separate
quotas and blending requirements are determined for cellulosic biofuels, biomass-based diesel, advanced biofuels, and
total renewable fuel. Further, we are required to register each RNG project with the EPA and relevant state regulatory
agencies. We qualify our RINs through a voluntary Quality Assurance Plan, which typically takes from three to five
months from first injection of RNG into the commercial pipeline system. Further, we may make a large project investment
prior to receiving the regulatory approval and RIN qualification. In addition to registering each RNG project, we are subject
to quarterly audits under the Quality Assurance Plan of our projects to validate our qualification.
Our operations are also subject to state renewable fuel standard regulations. The CA LCFS program requires producers
of petroleum-based fuels to reduce the CI of their products, which began with a quarter of a percent in 2011 to a 10% total
reduction by 2020, and a 20% total reduction by 2030. Petroleum importers, refiners and wholesalers can either develop
their own low-carbon fuel products or buy CA LCFS credits from other companies that develop and sell low-
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carbon alternative fuels, such as biofuels, electricity, natural gas, or hydrogen. We are subject to a qualification process
like that for RINs, including verification of CI levels and other requirements, existing for CA LCFS credits.
Before an RNG project can be developed, all Resource Conservation and Recovery Act (“RCRA”) Subtitle D
requirements (requirements for nonhazardous solid waste management) must be satisfied. In particular, because methane
is explosive in certain concentrations and poses a hazard if it migrates, biogas collection systems must meet RCRA Subtitle
D standards for gas control. RNG projects may be subject to other federal, state and local regulations that impose
requirements for nonhazardous solid waste management.
Certain of our operations may be subject to federal requirements to prepare for and respond to spills or releases from
tanks and other equipment and provide training on operation, maintenance and discharge prevention procedures and the
applicable pollution control laws. We may be required to develop spill prevention, control and countermeasure plans to
memorialize our preparation and response plans and to update them on a regular basis.
Our operations may result in liability for hazardous substances or other materials placed into soil or groundwater.
Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or other federal, state,
or local laws governing the investigation and cleanup of sites contaminated with hazardous substances, we may be required
to investigate and/or remediate soil and groundwater contamination at our projects, contiguous and adjacent properties and
other properties owned and/or operated by third parties.
Additionally, biogas projects may need to obtain National Pollutant Discharge Elimination System permits if
wastewater is discharged directly to a receiving water body. If wastewater is discharged to a local sewer system, biogas
projects may need to obtain an industrial wastewater permit from a local regulatory authority for discharges to a Publicly
Owned Treatment Works. The authority to issue these permits may be delegated to state or local governments by the EPA.
The permits, which typically last five years, limit the quantity and concentration of pollutants that may be discharged.
Permits may require wastewater treatment or impose other operating conditions to ensure compliance with the limits. In
addition, the Clean Water Act and implementing state laws and regulations require individual permits or coverage under
general permits for discharges of storm water runoff from certain types of facilities.
On September 23, 2020, the California Governor issued an Executive Order N-79-20 setting goals for expanding the
sale and use of zero-emission vehicles within California, including 100% of in-state sales of new passenger cars and trucks
to be zero-emission by 2035, and 100% of medium- and heavy-duty truck vehicles in California to be zero-emission by
2045 for all operations where feasible. The Governor also directed CARB to develop and propose regulations to achieve
these goals consistent with state and federal law. This order is the latest in a series of targets set by California to transform
the energy and transportation fuel sectors and reduce GHG emissions. Executive Order B55-18 sets a statewide target to
achieve carbon neutrality no later than 2045. The transitioning of California’s energy markets to increased reliance on
renewable and carbon-free sources has the potential to create favorable market conditions for RNG but could also harm
our vehicle fueling business. Future regulatory actions will be required to meet the state’s zero-emission and carbon
neutrality targets.
Employees and our Human Capital
As of December 31, 2021, we employed 482 people. We have not experienced any work stoppages, and none of our
employees are subject to collective bargaining agreements.
The success and growth of our business is significantly correlated with our ability to recruit, train, promote and retain
talented individuals at all levels of our organization. To succeed in a competitive labor market, we have developed and
maintain key recruitment and retention strategies. These include competitive salary structures, including bonus
compensation programs, and competitive benefits policies, including paid time off for vacations, sick leave and holidays,
short-term disability coverage, group term life insurance, and various retirement savings and incentive plans.
Safety of our personnel is a core value of Clean Energy and maintaining a safe work environment is critical to an
energy company’s ability to attract and retain employees. To support the health and safety of our employees during
the COVID-19 pandemic, we have enhanced our safety protocols to promote social distancing, implemented more
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extensive cleaning and sanitation processes, incorporated temperature checks, required facial covering, instituted
employee questionnaires, restricted corporate travel and visitor access to facilities, and implemented work-from-home and
work-flex initiatives for certain employees.
Sales and Marketing
We market our brands, products and services primarily through our direct sales force, which includes sales
representatives covering all of our major geographic and customer markets, as well as attendance at trade shows and
participation in industry conferences and events. Our sales and marketing team also works closely with federal, state and
local government agencies to provide education about the value of our vehicle fuels and to keep abreast of proposed and
newly adopted regulations that affect our industry.
Seasonality
To some extent, our business may experience seasonality. For more information, see the discussion under “Seasonality
and Inflation” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Intellectual Property
Our intellectual property rights primarily consist of trade secrets, patents, know-how and trademarks, and we rely on
a combination of trademark laws, trade secret laws, confidentiality provisions and other contractual provisions to protect
these rights and our proprietary information. These intellectual property rights help us to retain existing business and secure
new relationships with customers.
More Information
Our website is located at www.cleanenergyfuels.com. We make available, free of charge on our website, our annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the SEC. The SEC maintains a website at www.sec.gov that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC,
including us. All references to our website in this report are inactive textual references, and the contents of our website
are not incorporated into this report.
Item 1A. Risk Factors
An 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 other information included in this report before you make any investment decision regarding
our securities. We believe the risks and uncertainties described below are the most significant we face, but additional risks
and uncertainties not known to us or that we currently deem immaterial could also be or become significant. The
occurrence of any of these 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.
Risks Related to Our Business
The COVID-19 pandemic and measures intended to reduce its spread has, and may continue to, adversely affect our
business, results of operations and financial condition.
Given the dynamic nature of the novel coronavirus (“COVID-19”) pandemic, including the travel bans, quarantines,
business limitations and other governmental restrictions that were previously instituted and may in the future be
reinstituted, and the related adverse impact these restrictions have had, and may continue to have, on the economy
generally, our business and financial results may continue to be adversely affected by the COVID-19 pandemic.
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Our operations have been designated “essential critical infrastructure work” in the energy sector by the U.S.
Department of Homeland Security, meaning that we have been able to continue full operations. Despite our essential
designation and our continued operations, however, we are subject to various risk and uncertainties because of the COVID-
19 pandemic that could materially adversely affect our business, results of operations and financial condition, including
the following:
•
•
•
a further delay in the adoption of our RNG and natural gas vehicle fuels by heavy-duty trucks and/or a delay in
increasing the use of our vehicle fuels;
a continued or further decrease in the volume of truck and fleet operations, including shuttle buses at airports,
and lower-than-normal levels of public transportation generally, which have resulted and may continue to result
in decreased demand for our vehicle fuels; and
the impact of business disruptions on the production of vehicles and engines that use our fuels, which has resulted
in, and may continue to result in, plant closures, decreased manufacturing capacity, and delays in deliveries.
The duration and extent of the impact of the COVID-19 pandemic on our business and financial results will depend
on future developments, including the duration, severity and spread of the pandemic, actions taken to contain its spread,
any further resurgence of COVID-19, the severity and transmission rates of new variants of COVID-19, the availability,
distribution, public acceptance and efficacy of vaccines and therapeutics for COVID-19, and how quickly and to what
extent normal economic and operating conditions can resume within the markets in which we operate, each of which are
highly uncertain at this time and outside of our control. Even after the COVID-19 pandemic subsides, we may continue
to experience adverse effects to our business and financial results because of its global economic impact, including any
economic downturn or recession that has occurred or may occur. The adverse effect of the COVID-19 pandemic on our
business, results of operations and financial condition could be material.
Our success is dependent on the willingness of fleets and other consumers to adopt our vehicle fuels, which may not
occur in a timely manner, at expected levels or at all.
Our success is highly dependent on the adoption by fleets and other consumers of our RNG and conventional natural
gas vehicle fuels. The market for our vehicle fuels has experienced slow, volatile and unpredictable growth in many sectors.
For example, adoption and deployment of our vehicle fuels in heavy-duty trucking has been slower and more limited than
we anticipated. Also, other important fleet markets, including airports and public transit, had slower volume and customer
growth in 2019, 2020 and 2021 that may continue. If the market for our vehicle fuels does not develop at improved rates
or levels, or if a market develops but we are not able to capture a significant share of the market or the market subsequently
declines, our business, prospects, financial condition, and operating results would be harmed.
Factors that may influence the adoption of our vehicle fuels, many of which are beyond our control, include, among
others:
• Lack of demand for trucks that use our vehicle fuels;
• Adoption of government policies or programs or increased publicity or popular sentiment in favor of vehicles or
fuels other than RNG and natural gas, including long-standing support for gasoline and diesel-powered vehicles,
changes to emissions requirements applicable to vehicles powered by gasoline, diesel, RNG, natural gas, or other
vehicle fuels and/or growing support for electric and hydrogen-powered vehicles;
• Perceptions about the benefits of our vehicle fuels relative to gasoline, diesel and other alternative vehicle fuels,
including with respect to factors such as supply, cost savings, environmental benefits and safety;
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Increases, decreases or volatility in the supply, demand, use and prices of crude oil, gasoline, diesel, RNG, natural
gas and other vehicle fuels, such as electricity, hydrogen, renewable diesel, biodiesel and ethanol;
Inertia among fleets and fleet vehicle operators, who may be unable or unwilling to prioritize converting a fleet
to our vehicle fuels over an operator’s other general business concerns, particularly if the operator is not
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sufficiently incentivized by emissions regulations or other requirements or lacks demand for the conversion from
its customers or drivers;
• Vehicle cost, fuel efficiency, availability, quality, safety, convenience (to fuel and service), design, performance
and residual value, as well as operator perception with respect to these factors, generally and in our key customer
markets and relative to comparable vehicles powered by other fuels;
• The development, production, cost, availability, performance, sales and marketing and reputation of engines that
are well-suited for the vehicles used in our key customer markets, including heavy-duty trucks and other fleets;
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Increasing competition in the market for vehicle fuels generally, and the nature and effect of competitive
developments in this market, including improvements in or perceived advantages of other vehicle fuels and
engines powered by these fuels;
• The availability and effect of environmental, tax or other government regulations, programs or incentives that
promote our products or other alternatives as a vehicle fuel, including certain programs under which we generate
credits by selling RNG as a vehicle fuel, as well as the market prices for such credits; and
• Emissions and other environmental regulations and pressures on producing, transporting, and dispensing our
fuels.
In June 2020, CARB adopted the Advanced Clean Trucks regulation, which requires manufacturers to sell a gradually
increasing proportion of zero-emission electric trucks, vans and pickup trucks from 2024 onwards. By the year 2045, the
Advanced Clean Trucks regulation seeks to have every new commercial vehicle sold in California be zero-emissions.
Further, in September 2020, the Governor of the State of California issued an executive order (the “September 2020
Executive Order”) providing that it shall be the goal of California that (i) 100% of in-state sales of new passenger cars and
trucks will be zero-emission by 2035, (ii) 100% of medium- and heavy-duty vehicles in California will be zero-emission
by 2045 for all operations, where feasible, and by 2035 for drayage trucks, and (iii) the state will transition to 100% zero-
emission off-road vehicles and equipment by 2035 where feasible. The September 2020 Executive Order also directed
CARB to develop and propose regulations and strategies aimed at achieving the foregoing goals. Among other things, we
believe the intent of the Advanced Clean Trucks regulation and the September 2020 Executive Order is to limit and
ultimately discontinue the production and use of internal combustion engines because such engines have “tailpipe”
emissions. If either the Advanced Clean Trucks regulation or any additional regulations adopted by CARB, including
pursuant to the September 2020 Executive Order, is permitted to take effect, it may slow, delay or prevent the adoption by
fleets and other commercial consumers of our vehicle fuels, particularly in California. Moreover, because of the adoption
of the Advanced Clean Trucks regulation and the issuance of the September 2020 Executive Order, other states have taken
steps to enact similar regulations, which actions may accelerate if either regulation is permitted to take effect, thereby
slowing, delaying or preventing the adoption of our vehicle fuels in those states as well. In December 2021, President
Biden signed an executive order (the “2021 Executive Order”) that directs the federal government to achieve certain goals,
including purchasing 100% zero-emission vehicles by 2035 for its fleet of over 600,000 cars and trucks.
Our RNG business may not be successful.
Our RNG business consists of procuring RNG from projects we plan to develop and own or from projects owned by
third-party producers and reselling this RNG through our fueling infrastructure.
The success of our RNG business depends on our ability to secure, on acceptable terms, a sufficient supply of RNG;
sell this RNG in adequate volumes and at prices that are attractive to customers and produce acceptable margins for us;
and sell Environmental Credits we may generate under applicable federal or state programs from our sale of RNG as a
vehicle fuel at favorable prices.
Our ability to maintain an adequate supply of RNG is subject to risks affecting RNG production. Projects that produce
RNG often experience unpredictable production levels or other difficulties due to a variety of factors, including, among
others, problems with equipment, severe weather, droughts, financial condition of the applicable ADG and LFG source
owner, health crises, including the ongoing COVID-19 pandemic, construction delays, technical difficulties, high
operating costs, limited availability, or unfavorable composition of collected feedstock gas, and plant shutdowns caused
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by upgrades, expansion or required maintenance. In addition, increasing demand for RNG will result in more robust
competition for supplies of RNG, including from other vehicle fuel providers, gas utilities (which may have distinct
advantages in accessing RNG supply including potential use of ratepayer funds to fund RNG purchases if approved by a
utility’s regulatory commission) and other users and providers. If we or any of our RNG suppliers experience these or
other difficulties in RNG production processes, or if competition for RNG development projects and supply increases,
then our supply of RNG and our ability to resell it as a vehicle fuel could be jeopardized.
Our ability to generate revenue from our sale of RNG or our generation and sale of Environmental Credits depends
on many factors, including the markets for RNG as a vehicle fuel and for Environmental Credits. The markets for
Environmental Credits have been volatile and unpredictable in recent periods, and the prices for these credits are subject
to fluctuations. For example, in 2021, market prices for RINs have been as high as $3.81 and as low as $1.95. Additionally,
the value of Environmental Credits, and consequently the revenue levels we may receive from our sale of these credits,
may be adversely affected by changes to the federal and state programs under which these credits are generated and sold,
prices for and use of oil, diesel or gasoline, the inclusion of additional qualifying fuels in the programs, increased
production and use of other fuels in the programs, or other conditions. Our ability to generate revenue from sales of
Environmental Credits depends on our strict compliance with these federal and state programs, which are complex and
can involve a significant degree of judgment. If the agencies that administer and enforce these programs disagree with our
judgments, otherwise determine we are not in compliance, conduct reviews of our activities or make changes to the
programs, then our ability to generate or sell these credits could be restricted permanently limited or lost entirely, and we
could also be subject to fines or other sanctions. Any of these outcomes could force us to purchase credits in the open
market to cover any credits we have contracted to sell, retire credits we may have generated but not yet sold, reduce or
eliminate a significant revenue stream or incur substantial additional and unplanned expenses. We experienced many of
these effects in connection with the administrative review by CARB of our generation of LCFS Credits in the third and
fourth quarters of 2017, during which we were restricted from selling and transferring accumulated LCFS Credits, we were
required to make cash payments to third parties to settle preexisting commitments to transfer LCFS Credits, and certain of
our LCFS Credits were invalidated. Any permanent or temporary discontinuation or suspension of federal and state
programs to provide credits, grants and incentives, such as an alternative fuel tax credit (“AFTC”), would also adversely
impact our revenue. Moreover, in the absence of programs that allow us to generate and sell Environmental Credits or
other federal and state programs that support the RNG vehicle fuel market, or if our customers are not willing to pay a
premium for RNG, we may be unable to operate our RNG business profitably or at all.
Our commercial success depends on our ability and the ability of our third-party supply sources to successfully develop
and operate projects and produce expected volumes of RNG.
Our specific focus on RNG exposes us to risks related to the supply of and demand for RNG and Environmental
Credits, the cost of capital expenditures, government regulation, and economic conditions, among other factors. As an
RNG supplier we may also be negatively affected by lower RNG production resulting from lack of feedstock, mechanical
breakdowns, faulty technology, competitive markets or changes to the laws and regulations that mandate the use of
renewable energy sources.
In addition, other factors related to the development and operation of renewable energy projects could adversely affect
our business, including: (i) changes in pipeline gas quality standards or other regulatory changes that may limit our ability
to transport RNG on pipelines for delivery to vehicles or increase the costs of processing RNG to allow for such deliveries;
(ii) construction risks, including the risk of delay, that may arise because of inclement weather, labor disruptions or
increases in costs for equipment and construction materials; (iii) operating risks; (iv) weather conditions, including
droughts; (v) financial condition of the applicable ADG and LFG source owner; (vi) health of the applicable dairy herd;
(vii) consolidation in the dairy industry; (viii) budget overruns; (ix) possible liabilities because of unforeseen
environmental, construction, technological or other complications; (x) failures or delays in obtaining desired or necessary
rights, including leases and feedstock agreements; and (xi) failures or delays in obtaining and keeping in good standing
permits, authorizations and consents from local city, county, state and U.S. federal governments as well as local and U.S.
federal governmental organizations. Any of these factors could prevent completion or operation of projects, or otherwise
adversely affect our business, financial condition, and results of operations.
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Acquisition, financing, construction, and development of projects by us or our partners that own projects may not
commence on anticipated timelines or at all.
Our strategy is to continue to expand, including through the acquisition of additional projects and by signing additional
supply agreements with third-party project owners. From time to time we and our partners enter into nonbinding letters of
intent for projects. Until the negotiations are final, however, and the parties have executed definitive documentation, we
or our partners may not be able to consummate any development or acquisition transactions, or any other similar
arrangements, on the terms set forth in the applicable letter of intent or at all.
The acquisition, financing, construction and development of projects involves numerous risks, including:
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the ability to obtain financing for a project on acceptable terms or at all;
difficulties in identifying, obtaining, and permitting suitable sites for new projects;
failure to obtain all necessary rights to land access and use;
inaccuracy of assumptions with respect to the cost and schedule for completing construction;
inaccuracy of assumptions with respect to the biogas potential, including quality, volume, and asset life;
delays in deliveries or increases in the price of equipment;
permitting and other regulatory issues, license revocation and changes in legal requirements;
increases in the cost of labor, labor disputes and work stoppages;
failure to receive quality and timely performance of third-party services;
unforeseen engineering and environmental problems;
cost overruns;
accidents involving personal injury or the loss of life; and
• weather conditions, catastrophic events, including fires, explosions, earthquakes, droughts and acts of terrorism,
and other force majeure events.
We are dependent on the production of vehicles and engines in our key customer and geographic markets by vehicle
and engine manufacturers, over which we have no control.
Vehicle and engine manufacturers control the development, production, quality assurance, cost and sales and
marketing of their products, which shapes the performance, availability and reputation of these products in the marketplace.
We are dependent on these manufacturers to succeed in our target markets, and we have no influence or control over their
activities. For example, Cummins Westport is the only engine manufacturer for the RNG and natural gas heavy-duty truck
market in the United States, and Cummins Westport and other original equipment manufacturers currently produce a
relatively small number of engines and vehicles that use our vehicle fuels. These manufacturers may decide not to expand
or maintain, or may decide to discontinue or curtail, their engine or vehicle product lines for a variety of reasons, including
as a result of the adoption of government policies or programs such as the Advanced Clean Trucks regulation and the
September 2020 Executive Order. Further, the supply of engines or vehicle product lines by these manufacturers has been
be disrupted/delayed due to the COVID-19 pandemic. The limited production of engines and vehicles that use our fuels
increases their cost and limits availability, which restricts large-scale adoption, and may reduce resale value, which may
contribute to operator reluctance to convert their vehicles to our fuels. In addition, some operators have communicated to
us that the first-generation models of heavy-duty truck engines using our fuels have a reputation for unsatisfactory
performance, and that this reputation or their first-hand experiences of such performance may be a factor in operator
decisions regarding whether to convert their fleets to vehicles that use our fuels.
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To secure ADG RNG from new projects we develop, we typically face a long and variable development cycle that
requires significant resource commitments and a long lead time before we realize revenue.
The development, design and construction process for ADG RNG projects generally lasts between 12 to 18 months
on average. Prior to entering into a letter of intent with respect to an ADG RNG project, we typically conduct a preliminary
assessment of whether the site is commercially viable based on our expected return on investment, investment payback
period, and other operating metrics, as well as the necessary permits to develop a project on that site. After entering a
project letter of intent, we perform a more detailed review of the site’s facilities, which serves as the basis for the final
specifications of the project. Finally, we negotiate and execute contracts with the site owner. This extended development
process requires the dedication of significant time and resources from our personnel, with no certainty of success or
recovery of our expenses. Further, upon commencement of operations, it takes about 12 months for the project to ramp up
to expected production level, receive necessary registrations and approvals from the Environmental Protection Agency
(the “EPA”) and CARB, and begin generating revenue. All these factors, and in particular, expenditures on development
of projects that will not generate significant revenue in the near term, can contribute to fluctuations in our quarterly
financial performance and increase the likelihood that our operating results in a particular period will fall below investor
expectations.
Livestock waste and dairy farm projects have different economic models and risk profiles than landfill facilities, and
we may not be able to achieve the operating results we expect from these projects.
Livestock waste and dairy farm projects produce significantly less RNG and have higher operating costs than landfill
facilities. As a result, these projects are even more dependent on the LCFS credits and, to a lesser extent, RINs for
commercial viability. If CARB reduces the CI score that it applies to waste conversion projects, such as dairy digesters,
the number of LCFS credits for RNG generated at livestock waste and dairy farm projects will decline. Additionally,
revenue from LCFS credits also depends on the price per LCFS credit, which is driven by various market forces, including
the supply of and demand for LCFS credits, which in turn depends on the demand for traditional transportation fuel and
the supply of renewable fuel from other renewable energy sources, and mandated CI targets, which determine the number
of LCFS credits required to offset LCFS deficits. Fluctuations in the price of LCFS credits or the number of LCFS credits
assigned will have a significantly greater effect on the success of livestock waste and dairy farm projects. A significant
decline in the value of LCFS credits adversely affect our business, financial condition, and results of operations.
We have a history of losses and may incur additional losses in the future.
We incurred pre-tax losses in 2018, 2020 and 2021. During 2019, 2020 and 2021, our results were positively affected
by $47.1 million, $19.8 million, and $20.7 million of AFTC revenue, respectively. We may incur losses in future periods,
and we may never sustain profitability, either of which would adversely affect our business, prospects and financial
condition and may cause the price of our common stock to fall. Furthermore, historical losses may not be indicative of
future losses due to the unpredictability of the COVID-19 pandemic, and our future losses may be greater than our past
losses. In addition, to try to achieve or sustain profitability, we may choose or be forced to take actions that result in
material costs or material asset or goodwill impairments. For instance, in the third and fourth quarters of 2017, we recorded
significant charges in connection with our former fueling compressor manufacturing business (which we combined with
another company’s fueling compressor manufacturing business in the CEC Combination (as defined in Note 3 to the
Consolidated Financial Statements)), our closure of certain fueling stations, our determination that certain assets were
impaired because of the foregoing, and other actions. We review our assets for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset or asset group may not be recoverable, and we perform a goodwill
impairment test on an annual basis and between annual tests in certain circumstances, in each case in accordance with
applicable accounting guidance and as described in the financial statements and related notes included in this report.
Changes to the use of our assets, divestitures, changes to the structure of our business, significant negative industry or
economic trends, disruptions to our operations, inability to effectively integrate any acquired businesses, further market
capitalization declines, or other similar actions or conditions could result in additional asset impairment or goodwill
impairment charges or other adverse consequences, any of which could have material negative effects on our financial
condition, our results of operations and the trading price of our common stock.
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Our plans for hydrogen and electric vehicle stations will require significant cash investments and management
resources and may not meet our expectations.
As operators deploy hydrogen powered vehicles, we plan to modify our fueling stations to reform our RNG, build
additional hydrogen stations, and deliver clean hydrogen. Further, we have the capability to add electric charging at our
sites, and we believe our RNG can be used to generate clean electricity to power vehicles.
Our plans will require significant cash investments and management resources and may not meet our expectations
with respect to additional sales of our vehicle fuels. We have experience constructing hydrogen fueling stations, but such
facilities cost significantly more than traditional RNG vehicle fueling stations. In addition, we have not yet added electric
charging capability to any of our stations, and the cost of such capability may be significant. We will need to ensure
compliance with all applicable regulatory requirements, including obtaining any required permits and land use rights,
which could take considerable time and expense and is subject to the risk that government support in certain areas may be
discontinued. If we are unable to modify our stations to provide hydrogen or add electric charging to our stations, or
experience delays, our stations may be unable to meet our customer demand, which may negatively impact our business,
prospects, financial condition, and operating results.
Cummins, Daimler, Dana, Navistar, PACCAR, Toyota, Volvo, XOS, Tesla and Nikola have announced their plans to
bring long-haul Class 8 commercial hydrogen- and battery- powered vehicles to the market. We will, however, be
dependent on these manufacturers to succeed in our target markets, and we will have no influence over their activities.
See the risks discussed under “We are dependent on the production of vehicles and engines in our key customer and
geographic markets by vehicle and engine manufacturers, over which we have no control,” above and elsewhere in these
risk factors.
Increases, decreases and general volatility in oil, gasoline, diesel, natural gas and RNG prices could adversely affect
our business.
The prices of RNG, natural gas, crude oil, gasoline and diesel can be volatile and this volatility may continue to
increase. Factors that may cause volatility in the prices of RNG, natural gas, crude oil, gasoline and diesel include, among
others, changes in supply and availability of crude oil, RNG, natural gas, government regulations, inventory levels,
consumer demand, price and availability of alternatives, weather conditions, negative publicity about crude oil or natural
gas drilling, production or transportation techniques and methods, economic, health and political conditions, transportation
costs and the price of foreign imports. If the prices of crude oil, gasoline and diesel are low or decline, or if the price of
RNG or natural gas increases without corresponding increases in the prices of crude oil, gasoline and diesel or
Environmental Credits, then we may not be able to offer our customers an attractive price for our vehicle fuels, market
adoption of our vehicle fuels could be slowed or limited and/or we may be forced to reduce the prices at which we sell our
vehicle fuels in order to try to attract new customers or prevent the loss of demand from existing customers. Natural gas
and crude oil prices are expected to remain volatile for the near future because of market uncertainties over supply and
demand, including due to the state of the world economies, energy infrastructure and other factors. Fluctuations in natural
gas prices affect the cost to us of the natural gas commodity. High natural gas prices adversely affect our operating margins
when we cannot pass the increased costs through to our customers. Conversely, lower natural gas prices reduce our revenue
when the commodity cost is passed through to our customers.
Pricing conditions may also exacerbate the cost differential between vehicles that use our fuels and gasoline or diesel-
powered vehicles, which may lead operators to delay or refrain from purchasing or converting to our vehicle fuels.
Generally, vehicles that use our fuels cost more initially than gasoline or diesel-powered vehicles because the components
needed for a vehicle to use our fuels add to the vehicle’s base cost. Operators then seek to recover the additional base cost
over time through a lower cost to use our fuels. Operators may, however, perceive an inability to timely recover these
additional initial costs if our vehicle fuels are not available at prices sufficiently lower than gasoline and diesel. Such an
outcome could decrease our potential customer base and harm our business prospects.
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We face increasing competition from competitors, many of which have far greater resources, experience, 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. The biggest competition for our products is gasoline and diesel
because most vehicles in our key markets are powered by these fuels. We also compete with suppliers of other alternative
vehicle fuels, including renewable diesel, biodiesel, and ethanol, as well as producers and fuelers of alternative vehicles,
including hybrid, electric and hydrogen-powered vehicles. Additionally, our stations compete directly with other natural
gas fueling stations and indirectly with electric vehicle charging stations and fueling stations for other vehicle fuels.
Many businesses are in the market for RNG and other alternatives for use as vehicle fuel, including alternative vehicle
and alternative fuel companies, refuse collectors, industrial gas companies, private equity groups, commodity traders, truck
stop and fuel station owners, fuel providers, gas marketers, utilities and their affiliates and other organizations. If the
alternative vehicle fuel market grows, then the number and type of participants in this market and their level of capital and
other commitments to alternative vehicle fuel programs could increase. Many of our competitors have substantially greater
experience, customer bases, brand awareness and financial, marketing and other resources than we have. As a result, these
competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry
or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more
aggressive pricing policies; dedicate more effort to infrastructure and systems development in support of their business or
product development activities; implement more robust or creative initiatives to advance consumer acceptance of their
products; or exert more influence on the regulatory landscape that affects the vehicle fuels market.
We expect competition to increase in the vehicle fuels market generally. In addition, if the demand for alternative
vehicle fuels, including RNG, increases, then we expect competition to also increase. Any such increased competition may
reduce our customer base and revenue and may lead to increased pricing pressure, reduced operating margins and fewer
expansion opportunities.
NG Advantage may not be successful.
NG Advantage provides “virtual pipelines” to transport CNG by truck from compression facilities to pipeline
interconnects and to industrial and commercial customer users that do not have direct access to natural gas pipelines. NG
Advantage faces unique risks, including among others: (i) it has a history of net losses and has incurred substantial
indebtedness; (ii) NG Advantage will need to raise additional capital, which may not be available, may only be available
on onerous terms, or may only be available from the Company; (iii) the labor market for truck drivers is very competitive,
which increases NG Advantage’s difficulty in meeting its delivery obligations; (iv) NG Advantage often transports CNG
in trailers over long distances and these trailers may be involved in accidents; and (v) NG Advantage’s CNG trailers may
become subject to new or changed regulations that could adversely affect its business. If NG Advantage fails to manage
any of these risks, our business, financial condition, liquidity, results of operations, prospects and reputation may be
harmed. In addition, we have been a significant source of financing for NG Advantage, consisting of loans of $18.4 million
and $12.9 million in the years ended December 31, 2021 and 2020, respectively, and a $5.0 million equity investment in
the year ended December 31, 2018. If NG Advantage is not able to obtain financing from external sources, we will need
to provide additional debt or equity capital to allow NG Advantage to satisfy its commitments and maintain operations.
Our station construction activities subject us to business and operational risks.
As part of our business activities, we design and construct vehicle fueling stations that we either own and operate
ourselves or sell to our customers. These activities require a significant amount of judgment in determining where to build
and open fueling stations, including predictions about fuel demand that may not be accurate for any of the locations we
target. As a result, we have built stations that we may not open for fueling operations, and we may open stations that fail
to generate the volume or profitability levels we anticipate, either or both of which could occur due to a lack of sufficient
customer demand at the station locations or for other reasons. For any stations that are completed but unopened, we would
have substantial investments in assets that do not produce revenue, and for any stations that are open and underperforming,
we may decide to close the stations. We determined to close a number of underperforming stations in the third and fourth
quarters of 2017 and recorded impairment charges in connection with these closures and other related actions. As of
December 31, 2021, we had 30 nearly completed stations with a carrying amount of $54.2 million that were not open for
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fueling operations. We expect to open these stations when we have sufficient customers to fuel at the locations, but we do
not know when or if this will occur and some of these stations are subject to agreements that may expire prior to us being
able to open such stations. Closure of these and/or any other stations could result in substantial additional costs and non-
cash asset impairments or other charges and could cause the price of our common stock to decline.
We also face many operational challenges in connection with our station design and construction activities. For
example, we may not be able to identify suitable locations for the stations we or our customers seek to build. Additionally,
even if preferred sites can be located, we may encounter land use or zoning difficulties, problems with utility services,
challenges obtaining and retaining required permits and approvals or local resistance, including due to reduced operations
of permitting agencies because of the ongoing COVID-19 pandemic, any of which could prevent us or our customers from
building new stations on these sites or limit or restrict the use of new or existing stations. Any such difficulties, resistance
or limitations or any failure to comply with local permit, land use or zoning requirements could restrict our activities or
expose us to fines, reputational damage or other liabilities, which would harm our business and results of operations. In
addition, we act as the general contractor and construction manager for new station construction and facility modification
projects, and we 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 of work on our projects. Additionally, shortages of skilled subcontractor labor could significantly delay a project
or otherwise increase our costs. Further, our expected profit from a project is based in part on assumptions about the cost
of the project, and cost overruns, delays or other execution issues may, in the case of projects we complete and sell to
customers, result in our failure to achieve our expected margins or cover our costs, and in the case of projects we build
and own, result in our failure to achieve an acceptable rate of return. If any of these events occur, our business, operating
results and liquidity could be negatively affected.
We have significant contracts with government entities, which are subject to unique risks.
We have, and expect to continue to seek, long-term fueling station construction, maintenance and fuel sale contracts
with various government bodies, which accounted for 21%, 22%, and 31% of our revenue in 2019, 2020 and 2021,
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 our control. For example, long-term
government contracts and related orders are subject to cancellation if adequate appropriations for subsequent performance
periods are not made. Further, the termination of funding for a government program supporting any of our government
contracts or any other governmental action that results in reduced support for our government contracts could result in the
loss of anticipated future revenue attributable to the contract. Moreover, government entities with which we contract are
often able to modify, curtail or terminate contracts with us at their convenience and without prior notice, and would only
be required to pay for work completed and commitments made at or prior to the time of termination.
In addition, government contracts are frequently awarded only after competitive bidding processes, which are often
protracted. In many cases, unsuccessful bidders for government contracts are provided the opportunity to formally protest
the contract awards through various agencies or other administrative and judicial channels. The protest process may
substantially delay a successful bidder’s contract performance, result in cancellation of the contract award entirely and
distract management. As a result, we may not be awarded contracts for which we bid, and substantial delays or cancellation
of contracts may follow any successful bids as a result of any protests by other bidders. The occurrence of any of these
risks would have a material adverse effect on our results of operations and financial condition.
We may from time to time pursue acquisitions, divestitures, investments or other strategic relationships or transactions,
which could fail to meet expectations or otherwise harm our business.
We may acquire or invest in other companies or businesses or pursue other strategic transactions or relationships, such
as joint ventures, collaborations, divestitures, or other similar arrangements. For example, in 2021 we created joint ventures
with each of TotalEnergies and bp to develop and own dairy RNG production projects. These strategic transactions and
relationships and any others we may pursue in the future involve numerous risks, any of which could harm our business,
performance and liquidity, including, among others, the following: (i) difficulties integrating the operations, personnel,
contracts, service providers and technologies of an acquired company or partner; (ii) diversion of financial and
management resources from existing operations or alternative acquisition, investment, strategic or other opportunities; (iii)
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failure to realize the anticipated synergies or other benefits of a transaction or relationship; (iv) risks of entering new
customer or geographic markets in which we may have limited or no experience; (v) potential loss of an acquired
company’s or partner’s key employees, customers or vendors in the event of an acquisition or investment, or potential loss
of our assets (and their associated revenue streams), employees or customers in the event of a divestiture or other strategic
transaction; and (vi) incurrence of substantial costs or debt or equity dilution to fund an acquisition, investment or other
transaction or relationship, as well as possible write-offs or impairment charges relating to any businesses we partner with,
invest in or acquire.
Our partners may choose to invest in renewable or low carbon vehicle fuels other than RNG.
Our partners, including TotalEnergies, bp and Chevron, may reallocate their resources from RNG to other renewable
or low carbon vehicle fuels. Any such action would have a material adverse effect on our plans, results of operations and
financial condition.
Our results of operations fluctuate significantly and are difficult to predict.
Our results of operations have historically experienced, and may continue to experience, significant fluctuations as a
result of a variety of factors, including, among others, the amount and timing of our vehicle fuel sales, Environmental
Credit sales and recognition of government credits, station construction sales, grants and incentives, such as AFTC (for
example, we recorded all of the AFTC revenue associated with our vehicle fuel sales made in 2017 during the first quarter
of 2018, and we recorded all of the AFTC revenue associated with our vehicles fuel sales made in 2018 and 2019 in the
fourth quarter of 2019); fluctuations in commodity, station construction and labor costs; variations in the fair value of
certain of our derivative instruments that are recorded in revenue; sales of compressors and other equipment used in RNG
production and at fueling stations; the amount and timing of our billing, collections and liability payments; and the other
factors described in these risk factors.
Our performance in certain periods has also been affected by transactions or events that have resulted in significant
cash or non-cash gains or losses. For example, our results for 2017 were positively affected by gains related to repurchases
or retirements of our outstanding convertible debt at a discount and by a gain related to bp, but were also negatively
affected by significant charges in connection with our closure of certain fueling stations, the decreased operating
performance of our former fueling compressor manufacturing business, our determination of an impairment of assets as a
result of the foregoing, and certain other actions. These or other similar gains or losses may not recur, in the same amounts
or at all in future periods.
These significant fluctuations in our operating results may render period-to-period comparisons less meaningful,
especially given the current uncertainties related to the ongoing COVID-19 pandemic, and investors in our securities
should not rely on the results of one period as an indicator of performance in any other period. Additionally, these
fluctuations in our operating results could cause our performance in any period to fall below the financial guidance we
may have provided to the public or the estimates and projections of the investment community, which could negatively
affect the price of our common stock.
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 the stations we build and sell, and we establish
reserves for the estimated liability associated with these warranties. Our warranty reserves are based on historical trends
and any specifically identified warranty issues known to us, and the amounts estimated for these reserves could differ
materially from the warranty costs we may actually incur. We would be adversely affected by an increase in the rate or
volume of warranty claims or the amounts involved in warranty claims, any of which could increase our costs beyond our
established reserves and cause our cash position and financial condition to suffer.
25
Risks Related to Our Indebtedness and Other Capital Resources.
We may need to raise additional capital to continue to fund our business, which could have negative effects and may
not be available when needed, on acceptable terms or at all.
We require capital to pay for capital expenditures, operating expenses, any mergers, acquisitions or strategic
investments, transactions or relationships we may pursue, and to make principal and interest payments on our indebtedness.
If we cannot fund any of these activities with capital on-hand or cash provided by our operations, we may seek to obtain
additional capital from other sources, such as by selling assets or pursuing debt or equity financing.
Asset sales and equity or debt financing may not be available when needed, on terms favorable to us or at all. Any
sale of our assets to generate cash proceeds may limit our operational capacity and could limit or eliminate any revenue
streams or business plans that are dependent on the sold assets. Any issuances of our common stock or securities
convertible into our common stock to raise capital would dilute the ownership interest of our existing stockholders. Any
debt financing we may pursue could require us to make significant interest or other 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, adversely affect
our creditworthiness, and amplify the other risks associated with our existing debt, which are discussed elsewhere in these
risk factors. Further, we may incur substantial costs in pursuing any capital-raising transactions, including investment
banking, legal and accounting fees. On the other hand, if we are unable to obtain capital in amounts sufficient to fund our
obligations, expenses, and strategic initiatives, we could be forced to suspend, delay or curtail our business plans or
operating activities or could default on our contractual commitments. Any such outcome could negatively affect our
business, performance, liquidity, and prospects.
We may not generate sufficient cash flow from our business to pay our debt.
As of December 31, 2021, we have consolidated indebtedness of $39.3 million, and we are permitted to incur
significant additional debt. Our outstanding and permitted indebtedness could make us more vulnerable to adverse changes
in general U.S. and worldwide economic, regulatory, and competitive conditions, limit our flexibility to plan for or react
to changes in our business or industry, place us at a disadvantage compared to our competitors that have less debt or limit
our ability to borrow or otherwise raise additional capital as needed.
Our payments of amounts owed under our various debt instruments will reduce our cash resources available for other
purposes, including pursuing strategic initiatives, transactions or other opportunities, satisfying our other commitments
and generally supporting our operations. Moreover, our ability to make these payments depends on our future performance,
which is subject to economic, financial, competitive and other factors, including those described in these risk factors, and
many of which are beyond our control. Our business may not generate sufficient cash from operations to service our debt.
If we cannot meet our debt obligations from our operating cash flows, we may pursue one or more alternative
measures. Any repayment of our debt with equity, however, would dilute the ownership interests of our existing
stockholders. Additionally, because the agreements governing much of our existing indebtedness contain minimal
restrictions on our ability to incur additional debt and do not require us to maintain financial ratios or specified levels of
net worth or liquidity, we may seek capital from other sources to service our debt, such as selling assets, restructuring or
refinancing our existing debt or obtaining additional equity or debt financing. Our ability to engage in any of these
activities, if we decide to do so, would depend on the capital markets and the state of our industry, business and financial
condition at the time, and could also subject us to significant risks, which are discussed elsewhere in these risk factors.
Moreover, we may not be able to obtain any additional capital we may pursue on desirable terms, at a desirable time or at
all. Any failure to pay our debts when due could result in a default on our debt obligations. In addition, certain of our debt
agreements contain restrictive covenants, and any failure by us to comply with these covenants could also cause us to be
in default under these agreements.
In the event of any default on our debt obligations, the holders of the indebtedness could, among other things, declare
all amounts owed immediately due and payable. Any such declaration could deplete all or a large portion of our available
cash flow, and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or
liquidation.
26
Risks Related to Environmental Health and Safety and Governmental and Environmental Regulations
Our business is influenced by environmental, tax and other government regulations, programs and incentives that
promote our vehicle fuels, and their modification or repeal could negatively affect our business.
Our business is influenced by federal, state, and local tax credits, rebates, grants and other government programs and
incentives that promote the use of our vehicle fuels. These include various government programs that make grant funds
available from the purchase of vehicles and construction of fueling stations, as well as the AFTC under which we generate
revenue for our vehicle fuel sales. The AFTC expired at the end of 2021. If the AFTC is not extended after 2021, the AFTC
would not be available for vehicle fuel sales, and our revenue would be materially adversely affected. Additionally, our
business is influenced by laws, rules and regulations that require reductions in carbon emissions and/or the use of
renewable fuels, such as the programs under which we generate Environmental Credits.
These programs and regulations, which have the effect of encouraging the use of RNG as a vehicle fuel, could expire
or be repealed or amended for a variety of reasons. For example, parties with an interest in gasoline and diesel, electric or
other alternative vehicles or vehicle fuels, including lawmakers, regulators, policymakers, environmental or advocacy
organizations, producers of alternative vehicles or vehicle fuels, or other powerful groups, may invest significant time and
money in efforts to delay, repeal or otherwise negatively influence regulations and programs that promote RNG. Many of
these parties have substantially greater resources and influence than we have. Further, changes in federal, state or local
political, social or economic conditions, including a lack of legislative focus on these programs and regulations, could
result in their modification, delayed adoption or repeal. Any failure to adopt, delay in implementing, expiration, repeal or
modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of
other alternative fuels or alternative vehicles over RNG (such as the September 2020 Executive Order or the 2021
Executive Order), would reduce the market for RNG as a vehicle fuel and harm our operating results, liquidity, and
financial condition.
For instance, California lawmakers and regulators have implemented various measures designed to increase the use
of electric, hydrogen and other zero-emission vehicles, including establishing firm goals for the number of these vehicles
operating on state roads by specified dates and enacting various laws and other programs in support of these goals.
Although the influence and applicability of these or similar measures on our business remains uncertain, a focus on “zero
tailpipe emission” vehicles over vehicles with an overall net carbon negative emissions profile, but with some tailpipe
emissions operating on RNG, would adversely affect the market for our fuels.
To benefit from Environmental Credits, RNG projects are required to be registered and are subject to audit.
RNG projects are required to register with the EPA and relevant state regulatory agencies. Further, we qualify our
RINs through a voluntary Quality Assurance Plan, which typically takes from three to five months from first injection of
RNG into the commercial pipeline system. Delays in obtaining registration, RIN qualification, and any LCFS credit
qualification of a new project could delay future revenues from a project and could adversely affect our cash flow. Further,
we may make large investments in projects prior to receiving the regulatory approval and RIN qualification. By registering
RNG projects with the EPA’s voluntary Quality Assurance Plan, we are subject to quarterly third-party audits and semi-
annual on-site visits of projects to validate generated RINs and overall compliance with the federal renewable fuel
standard. We are also subject to a separate third party’s annual attestation review. The Quality Assurance Plan provides a
process for RIN owners to follow, for an affirmative defense to civil liability, if used or transferred Quality Assurance
Plan verified RINs were invalidly generated. A project’s failure to comply could result in remedial action by the EPA,
including penalties, fines, retirement of RINs, or termination of the project’s registration, any of which could adversely
affect our business, financial condition and results of operations.
Our business could be negatively affected by federal or state laws, orders or regulations mandating new or additional
limits on GHG emissions, “tailpipe” emissions or internal combustion engines.
Federal or state laws, orders or regulations have been adopted, such as California’s AB 32 cap and trade law and the
2021 Executive Order, and may in the future be adopted that impose limits on GHG emissions or otherwise require the
adoption of zero-emission electric vehicles. The effects of GHG emission limits on our business are subject to significant
27
uncertainties based on, among other things, the timing of any requirements, the required levels of emission reductions, the
nature of any market-based or tax-based mechanisms adopted to facilitate reductions, the relative availability of GHG
emission reduction offsets, the development of cost-effective, commercial-scale carbon capture and storage technology
and supporting regulations and liability mitigation measures, the range of available compliance alternatives, and our ability
to demonstrate that our vehicle fuels qualify as a compliance alternative under any statutory, regulatory, or standards-
based organization (such as WBCSD) programs to limit GHG emissions. If our vehicle fuels are not able to meet GHG
emission limits or perform as well as other alternative fuels and vehicles, our solutions could be less competitive.
Furthermore, additional federal or state taxes could be implemented on “tailpipe” emissions, which would have a negative
impact on the cost of our vehicle fuels, as compared to vehicle fuels that do not generate tailpipe emissions. See also the
discussion above regarding the Advanced Clean Trucks regulation, the September 2020 Executive Order and the 2021
Executive Order under “Our success is dependent on the willingness of fleets and other consumers to adopt our vehicle
fuels, which may not occur in a timely manner, at expected levels or at all.”
Our business is subject to a variety of government regulations, which may restrict our operations and result in costs
and penalties or otherwise adversely affect our business and ability to compete.
We are subject to a variety of federal, state and local laws and regulations relating to the environment, health and
safety, labor and employment, building codes and construction, zoning and land use, the government procurement process,
any political activities or lobbying in which we may engage, public reporting and taxation, among others. It is difficult and
costly to manage the requirements of every authority having jurisdiction over our various activities and to comply with
their varying standards. Many of these laws and regulations are complex, change frequently, may be unclear and difficult
to interpret and have become more stringent over time. Any changes to existing regulations or adoption of new regulations
may result in significant additional expense to us or our customers. For example, in June 2020, California passed the
Advanced Clean Trucks regulation, which seeks to have all new commercial vehicles sold in California have zero-
emissions by 2045, in September 2020, California’s Governor issued the September 2020 Executive Order, which seeks
to have 100% of medium- and heavy-duty vehicles in California be zero emission by 2045, and in December 2021,
President Biden signed the 2021 Executive Order, which seeks to achieve 100% zero-emission vehicle acquisitions by the
federal government by 2035. 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 compliance audits by regulatory authorities, which may
distract management from our revenue-generating activities and involve significant costs and use of other resources. Also,
we often need to obtain facility permits or licenses to address, among other things, storm water or wastewater discharges,
waste handling and air emissions in connection with our operations, 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
could result in a variety of administrative, civil and criminal enforcement measures, including, among others, assessment
of monetary penalties, imposition of corrective requirements or prohibition from providing services to government entities.
If any of these enforcement measures were imposed on us, our business, financial condition, and performance could be
negatively affected.
We are subject to various environmental laws and regulations that could impose substantial costs upon us.
Our operations are and will be subject to federal, state and local environmental laws and regulations, including laws
relating to the use, handling, storage, disposal of and human exposure to hazardous materials. Moreover, we expect that
we will be affected by future amendments to such laws or other new environmental and health and safety laws and
regulations which may require us to change our operations, potentially resulting in a material adverse effect on our
business, prospects, financial condition, and operating results. These laws can give rise to liability for administrative
oversight costs, cleanup costs, property damage, bodily injury, fines, and penalties. Capital and operating expenses needed
to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and
penalties, third-party damages, suspension of production or a cessation of our operations.
Contamination at properties we own or operate, will own or operate, or formerly owned or operated or to which
hazardous substances were sent by us, may result in liability for us under environmental laws and regulations, including,
but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, which can impose
liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of
contaminated soil and ground water, for impacts to human health and for damages to natural resources. The costs of
28
complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect
to contamination in the future, could have a material adverse effect on our financial condition or operating results. We
may face unexpected delays in obtaining the required permits and approvals in connection with our planned RNG
production facilities that could require significant time and financial resources and delay our ability to operate these
facilities, which would adversely impact our business, prospects, financial condition and operating results.
Our operations entail inherent safety and environmental risks, which may result in substantial liability to us.
Our operations entail inherent safety risks, including risks associated with equipment defects, malfunctions, failures,
and misuses. For example, operation of LNG pumps requires special training because of the extremely low temperatures
of LNG. Also, LNG tanker trailers and CNG fuel tanks and trailers could rupture if involved in accidents or improper
maintenance or installation. Further, improper refueling of vehicles that use our fuels or operation of vehicle fueling
stations could result in sudden releases of pressure that could cause explosions. In addition, our operations may result in
the venting of methane, a potent GHG. These safety and environmental risks could result in uncontrollable flows of our
fuels, fires, explosions, death, or serious injury, any of which 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 any
such damages are not covered by insurance or are more than policy limits, or if environmental damage causes us to violate
applicable GHG emissions or other environmental laws. Additionally, the occurrence of any of these events with respect
to our fueling stations or our other operations could materially harm our business and reputation. Moreover, the occurrence
of any of these events to any other organization in our vehicle fuel business could harm our industry generally by negatively
affecting perceptions about, and adoption levels of, our vehicle fuels.
Risks Related to Our Common Stock
A significant portion of our outstanding common stock is owned or otherwise subject to acquisition by two
equityholders, each of which may have interests that differ from the Company’s other stockholders and which now or
in the future may be able to influence the Company’s corporate decisions, including a change of control.
After giving effect to the issuance of the Amazon Warrant, TotalEnergies Marketing Services, SAS (“TMS”), a wholly
owned subsidiary of TotalEnergies, owns 42,581,801 shares of our common stock, or 19.1% of our outstanding shares of
common stock as of December 31, 2021 (excluding 7,930,508 shares of our common stock that are the subject of a voting
agreement, dated May 9, 2018, among TMS, the Company and all of the Company’s directors and officers then in office);
the Amazon Warrant is immediately exercisable by Amazon Holdings for shares of our common stock representing
4.999% of our outstanding common stock. Subject to vesting of the Amazon Warrant, the Amazon Warrant will be
exercisable for up to 19.999% of our outstanding common stock on a fully diluted basis (determined at the time of issuance
of the Amazon Warrant), subject to certain anti-dilution provisions, and Amazon Holding’s beneficial ownership will
initially be contractually limited to the Beneficial Ownership Limitation unless Amazon Holdings gives the Company
sixty one (61) days’ notice that it is waiving such limitation. In addition, TotalEnergies was granted certain special rights
that our other stockholders do not have in connection with its acquisition of this ownership position, including the right to
designate two individuals to serve as directors of our Company and a third individual to serve as an observer on certain of
our board committees.
TotalEnergies or other large stockholders may be able to influence or control matters requiring approval by our
stockholders, including the election of directors and mergers, acquisitions, or other extraordinary transactions. Amazon,
through ownership by Amazon Holdings, could become a large stockholder if the Amazon Warrant were to vest further
through additional fuel purchases from the Company pursuant to the Fuel Agreement, and Amazon Holdings were to
exercise the Amazon Warrant to purchase vested Warrant Shares or Additional Warrant Shares and waive the Beneficial
Ownership Limitation. Large stockholders may have interests that differ from other stockholders and may vote or
otherwise act in ways with which the Company or other stockholders disagree or that may be adverse to your interests. A
concentration of stock 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 shares of our common
stock as part of a sale of our Company and could affect the market price of our common stock. Conversely, such a
concentration of stock ownership may facilitate a change of control under terms other stockholders may not find favorable
or at a time when other stockholders may prefer not to sell.
29
Sales of our common stock, or the perception that such sales may occur, could cause the market price of our stock to
drop significantly, regardless of the state of our business.
All outstanding shares of our common stock are eligible for sale in the public market, subject in certain cases to the
requirements of Rule 144 under the Securities Act. Also, shares of our common stock that may be issued upon the exercise,
vesting or conversion of our outstanding stock options and restricted stock units may be eligible for sale in the public
market, to the extent permitted by Rule 144 and the provisions of the applicable stock option and restricted stock unit
agreements or if such shares have been registered under the Securities Act.
Sales of large amounts of our common stock by large stockholders, or the perception that such sales may occur, could
cause the market price of our common stock to decline, regardless of the state of the Company’s business. Our common
stock held by TMS and our common stock underlying the Amazon Warrant may be sold in the public market under Rule
144 or in registered sales or offerings pursuant to registration rights held by each stockholder. For instance, we filed a
registration statement with the SEC to cover the resale of the shares of our common stock issued and sold to TMS, which
registration statement was declared effective in August 2018. If these shares are sold, or if it is perceived that they may be
sold, in the public market, the trading price of our common stock could decline. For instance, in the year ended December
31, 2021, TMS sold 8,274,495 shares of our common stock, which we believe caused downward pressure on the trading
price of our common stock.
General Risk Factors
We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security
failure of that technology could harm our business.
Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the security of
our systems and networks and the confidentiality, availability and integrity of our data. There have been several recent,
highly publicized cases in which organizations of various types and sizes have reported the unauthorized disclosure of
customer or other confidential information, as well as cyber incidents involving the dissemination, theft and destruction
of corporate information, intellectual property, cash or other valuable assets. There have also been several highly
publicized cases in which hackers have requested “ransom” payments in exchange for not disclosing customer or other
confidential information or for not disabling the target company’s computer or other systems. Implementing security
measures designed to prevent, detect, mitigate or correct these or other IT security threats involves significant costs.
Although we have taken steps to protect the security of our information systems and the data maintained in those systems,
we have, from time to time, experienced cyberattacks or other cyber incidents that have threatened our data and systems,
including malware and computer virus attacks and it is possible that future cyber incidents we may experience may
materially and adversely affect our business. We cannot provide assurance that our safety and security measures will
prevent our information systems from improper functioning or damage, or the improper access or disclosure of personally
identifiable information such as in the event of cyber incidents. Any IT security threats that are successful against our
security measures could, depending on their nature and scope, lead to the compromise of confidential information,
improper use of our systems and networks, manipulation and destruction of data, operational disruptions, and substantial
financial outlays. Further, a cyber incident could occur and persist for an extended period of time without detection, and
an investigation of any successful cyber incident would likely require significant time, costs and other resources to
complete. We may be required to expend significant financial resources to protect against or to remediate such cyber
incidents. In addition, our technology infrastructure and information systems are vulnerable to damage or interruption from
natural disasters, power loss and telecommunications failures. Any failure to maintain proper function, security and
availability of our information systems and the data maintained in those systems could interrupt our operations, damage
our reputation, subject us to liability claims or regulatory penalties, harm our business relationships or increase our security
and insurance costs, which could have a material adverse effect on our business, financial condition and results of
operations.
30
The price of our common stock may continue to 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. Factors
that may cause volatility in the price of our common stock, many of which are beyond our control, include, among others,
the following: (i) the factors that may influence the adoption of our vehicle fuels, as discussed elsewhere in these risk
factors; (ii) our ability to implement our business plans and initiatives and their anticipated, perceived or actual level of
success; (iii) failure to meet or exceed any financial guidance we have provided to the public or the estimates and
projections of the investment community; (iv) the market’s perception of the success and importance of any of our
acquisitions, divestitures, investments or other strategic relationships or transactions; (v) the amount of and timing of sales
of, and prices for, Environmental Credits; (vi) actions taken by state or federal governments to mandate or otherwise
promote or incentivize alternative vehicles or vehicle fuels over, or to the exclusion of, RNG; (vii) technical factors in the
public trading market for our common stock that may produce price movements that may or may not comport with macro,
industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as
may be expressed on financial trading and other social media sites), the amount and status of short interest in our common
stock, access to margin debt, and trading in options and other derivatives on our common stock; (viii) changes in political,
regulatory, health, economic and market conditions; and (ix) a change 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 operating performance of particular companies, but which have affected the market prices of these
companies’ securities. These market fluctuations may also materially and adversely affect the market price of our common
stock.
Volatility or declines in the market price of our common stock could have other negative consequences, including,
among others, further impairments to our assets (following the asset impairment charges we recorded in the third and
fourth quarters of 2017 related to our former fueling compressor manufacturing business and our closure of certain fueling
stations), potential impairments to our goodwill and a reduced ability to use our common stock for capital-raising,
acquisitions or other purposes. The occurrence of any of these risks could materially and adversely affect our financial
condition, results of operations and liquidity and could cause further declines in 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 48,000 square feet of office space. Our lease for this facility expires in June 2028.
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 ground lease for the 36 acres on which this plant is situated.
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 which this plant is situated, along with approximately 34 acres surrounding the plant.
Item 3. Legal Proceedings.
From time to time, we may become involved in various legal proceedings that arise in the ordinary course of our
business, including lawsuits, claims, audits, government enforcement actions and related matters. It is not possible to
predict when or if these proceedings may arise, nor is it possible to predict the outcome of any proceedings that do arise,
including, among other things, the amount or timing of any liabilities we may incur, and any such proceedings could have
a material effect on us regardless of outcome. In the opinion of management, however, we are not a party, and our
properties are not subject, to any pending legal proceedings that are material to us.
31
Item 4. Mine Safety Disclosures.
None.
32
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
PART II
Market Information
Our common stock trades on The Nasdaq Global Select Market under the symbol “CLNE.”
Holders
There were approximately 49 holders of record of our common stock as of February 18, 2022. The actual number of
holders of our common stock is greater than this number of record holders and includes stockholders who are beneficial
owners, but whose shares are held in street name by brokers or held by other nominees.
Issuer Purchases of Equity Securities
On March 12, 2020, our Board of Directors approved a share repurchase program of up to $30.0 million (exclusive of
fees and commissions) of our outstanding common stock (the “Repurchase Program”). On December 7, 2021, our Board
of Directors approved an increase in the aggregate amount of our common stock to be repurchased under the Repurchase
Program from $30.0 million to $50.0 million (exclusive of fees and commissions). The Repurchase Program does not have
an expiration date, and may be suspended or discontinued at any time. As of December 31, 2021, approximately $32.6
million remained available under the Repurchase Program.
The Repurchase Program does not obligate us to acquire any specific number of shares. Repurchases under the
Repurchase Program may be effected from time to time through open market purchases, privately negotiated transactions,
structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring
shares, in each case subject to market conditions, applicable securities laws and other relevant factors. Repurchases may
also be made under plans set up pursuant to Rule 10b5-1 promulgated under the Exchange Act (“Rule 10b5-1 plans”).
The following table summarizes the Company’s share repurchase activity during the three months ended
December 31, 2021 (in thousands, except share and per share amounts):
Total Number
of Shares
Purchased
Approximate
Dollar Value
of Shares That
Total Number of
Shares Purchased May Yet Be
Purchased
as Part of Publicly
Average
Price Paid Announced Plans Under the Plans
per Share (a)
or Programs
or Program
— $
— $
452,700 $
452,700 $
—
—
6.42
6.42
— $
—
452,700
452,700 $
15,508
15,508
32,601
32,601
Period
October 1, 2021 through October 31, 2021
November 1, 2021 through November 30, 2021
December 1, 2021 through December 31, 2021
Total
(a) Exclusive of fees and commissions.
Performance Graph
This performance graph shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulation
14A or 14C or to the liabilities of Section 18 of the Exchange Act, or incorporated by reference into any filing under the
Securities Act or the Exchange Act, except to the extent that we specifically request that such information be treated as
soliciting material or specifically incorporate it by reference into such a filing. The graph is required by applicable rules of
the SEC and is not intended to forecast, predict or be indicative of the possible future performance of our common stock.
33
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 Market Index and the Russell 2000 Index. The graph assumes that $100 was invested
in our common stock and in each of these indices at the close of market on December 30, 2016 (the last trading day before
the beginning of our fifth preceding fiscal year). We chose to include the Russell 2000 Index because it includes issuers
with similar market capitalizations 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 whose only 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.
460.00%
410.00%
360.00%
310.00%
260.00%
210.00%
160.00%
110.00%
60.00%
10.00%
-40.00%
-90.00%
Clean Energy Fuels Corp. (NasdaqGS:CLNE) - Share Pricing
Russell 2000 Index (^RUT) - Index Value
NASDAQ Composite Index (^COMP) - Index Value
Item 6. [Reserved].
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (this
discussion, as well as discussions under the same heading in our other periodic reports, are referred to as the “MD&A”)
should be read together with our audited consolidated financial statements and the related notes included in this report,
and all cross references to notes included in this MD&A refer to the identified note in such consolidated financial
statements. This section of the Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons of 2021
to 2020. Discussions of 2019 items and year-to-year comparisons of 2020 and 2019 that are not included in this Form 10-
K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II,
Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 9, 2021.
Cautionary Note Regarding Forward-Looking Statements
This MD&A contains forward-looking statements. See the discussion about these statements under “Cautionary
Note Regarding Forward-Looking Statements” at the beginning of this report.
Overview
We are North America’s leading provider of the cleanest fuel for the transportation market, based on the number of
stations operated and the amount of gasoline gallon equivalents (“GGEs”) of renewable natural gas (“RNG”) and
conventional natural gas delivered. Through our sales of RNG, which is derived from biogenic methane produced by the
34
breakdown of organic waste, we help thousands of vehicles, from airport shuttles to city buses to waste and heavy-duty
trucks, reduce their amount of climate-harming greenhouse gas from 60% to over 400% based on determinations by the
California Air Resources Board (“CARB”), depending on the source of the RNG, while also reducing criteria pollutants
such as Oxides of Nitrogen, or NOx. RNG is delivered as compressed natural gas (“CNG”) and liquefied natural gas
(“LNG”).
As a clean energy solutions provider, we supply RNG and conventional natural gas, in the form of CNG and LNG,
for medium and heavy-duty vehicles; design and build, as well as operate and maintain (“O&M”), public and private
fueling stations in the United States and Canada; develop and own dairy ADG RNG production facilities; sell and service
compressors and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional
natural gas via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits
(collectively, “Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification
Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California
and the Oregon Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits,
grants and incentives.
At present, we see the best use of RNG as a replacement for fossil-based fuel in the transportation sector. We believe
the most attractive market for RNG is U.S. heavy-duty Class 8 trucking; based on information from the American Trucking
Association and our own internal estimates, we believe there are approximately 3.9 million Class 8 heavy-duty trucks
operating in the U.S. that use over 40 billion gallons of diesel fuel per year. As of December 31, 2021, we deliver RNG to
the transportation market through 548 fueling stations we own, operate or supply in 42 states and the District of Columbia
in the U.S., including over 200 stations in California. We also own, operate, or supply 25 fueling stations in Canada.
Critically, to generate valuable Environmental Credits, RNG must be placed in vehicle fuel tanks. We believe our
stations and customer relationships allow us to deliver substantially more RNG to vehicle operators than any other
participant in the market – we calculate that we have access to more fueling stations and vehicle fleets than all our
competitors combined. As of December 31, 2021, we served over 1,000 fleet customers operating over 48,000 vehicles on
our fuels.
Longer term, we plan to provide hydrogen fuel to vehicle fleets. As operators deploy more hydrogen powered vehicles,
we can modify our fueling stations to reform our RNG and deliver clean hydrogen to customers. We also believe our RNG
can be used to generate clean electricity to power electric vehicles, and we have the capability to add electric vehicle
charging at our station sites, although the cost of adding electric vehicle charging capacity may be significant.
Impact of COVID-19
The COVID-19 pandemic has had an adverse impact on the volume of our sales, which we saw bottom in the second
quarter of 2020. We have since seen improvement in volumes, with volumes delivered for the fourth quarter of 2021 9%
higher compared to the fourth quarter of 2020, and 1% higher compared to the fourth quarter of 2019. We saw significant
improvement in our volumes delivered in the public transit customer markets and airports (fleet services), which increased
by 12% and 34%, respectively, during the three months ended December 31, 2021, compared to the prior year period. Our
volume of GGEs delivered for the year ended December 31, 2021 increased 5% compared to the prior year. The increase
in volumes delivered in the fourth quarter of 2021 and in fiscal year 2021 was primarily due to COVID-19 restrictions
being lifted and an increase in travel generally.
Although we are experiencing gradual improvements since the onset of the COVID-19 pandemic, there is no guarantee
this will continue due to uncertainties regarding the continuance of the COVID-19 pandemic. It is possible that the
prolonged effect of the COVID-19 pandemic could negatively affect our volumes. Lower volumes since the onset of the
COVID-19 pandemic have resulted in and could again result in lower gross margin dollars and likely a lower gross margin
per GGE due to lower output on fixed operating costs and the effect of less revenue from Environmental Credits. Lower
volumes have affected and may again affect our federal alternative fuel excise tax credit (“AFTC”) revenue as this leads
to lower AFTC-eligible volumes. Given the dynamic nature of these circumstances, significant uncertainty exists
concerning the duration of business disruption and the full extent of the effect of COVID-19 on our business, results of
operations and financial condition. Additionally, the effects of COVID-19, commodity prices and the adoption of
35
government policies and programs, or increased popular sentiment, in favor of other vehicle technologies or fuels may
delay adoption of natural gas vehicles, particularly heavy-duty natural gas trucks, by new or existing customers. For more
information, see “Risk Factors” in Part I, Item 1A of this report.
We believe we have sufficient liquidity to support business operations through this volatile period, including total
cash and cash equivalents and short-term investments of $229.2 million as of December 31, 2021 and $13.7 million of
current debt. We expect to collect receivables relating to AFTC credits generated from fuel sales during 2021 in the first
half of 2022. We also expect AFTC to be reinstated during 2022 and apply retroactively to vehicle fuel sales made
beginning January 1, 2022 and we anticipate AFTC revenue to be approximately $21.2 million for 2022 after giving
consideration to the effect of COVID-19 described above.
Performance Overview
This performance overview discusses matters on which our management focuses in evaluating our financial condition
and our operating results.
Sources of Revenue
The following tables represent our sources of revenue:
Revenue (in millions)
Volume-related (1) (2)
Station construction sales
AFTC (3)
Other
Total
Year Ended December 31,
2020
2019
2021
273.6 $
23.1
47.1
0.3
344.1 $
245.3 $
26.6
19.8
—
291.7 $
218.5
16.4
20.7
—
255.6
$
$
(1) Our volume-related revenue primarily consists of sales of RNG and conventional natural gas, in the form of CNG and LNG, performance of O&M
services, and sales of RINs and LCFS Credits in addition to changes in fair value of our derivative instruments. More information about our volume
of fuel and O&M services delivered in the periods is included below under “Key Operating Data,” and more information about our derivative
instruments, which consist of commodity swap and customer fueling contracts, is included in Note 7. Additionally, a discussion of volume-related
revenue is included below under “Results of Operations.” The following table summarizes our volume-related revenue in the periods:
Revenue (in millions)
Fuel sales and performance of O&M services (2)
Change in fair value of derivative instruments (a)
RIN Credits
LCFS Credits
Total volume-related revenue
Year Ended December 31,
2020
2019
2021
248.8 $
(6.6)
18.1
13.3
273.6 $
209.2 $
2.1
15.3
18.7
245.3 $
173.5
(3.5)
31.7
16.8
218.5
$
$
a.
The change in fair value of derivative instruments is related to the Company’s commodity swap and customer fueling contracts. The amounts
are classified as revenue because the Company’s commodity swap contracts are used to economically offset the risk associated with the
diesel-to-natural gas price spread resulting from customer fueling contracts under the Company’s Zero Now truck financing program.
(2)
Includes $83.6 million of non-cash stock-based sales incentive contra-revenue charges related to the Amazon Warrant (as defined below) for the
year ended December 31, 2021.
(3) Represents the federal alternative fuel tax credit, that we refer to as AFTC. AFTC was available for vehicle fuel sales made through December 31,
2021. AFTC may not be reinstated for vehicle fuel sales made after December 31, 2021.
Key Operating Data
In evaluating our operating performance, we focus primarily on: (1) the amount of RNG, CNG and LNG GGEs
delivered (which we define as (i) the volume of GGEs we sell to our customers as fuel, plus (ii) the volume of GGEs
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dispensed at 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 GGEs sold as CNG by our joint venture with Mansfield Ventures, LLC and Mansfield Clean
Energy Partners, LLC (“MCEP”), (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 to us. The following tables present our key operating
data for the years ended December 31, 2019, 2020 and 2021:
GGEs delivered (in millions)
CNG (1)
LNG
Total
Year Ended
December 31,
2020
321.0
61.5
382.5
2019
335.7
65.1
400.8
2021
347.4
55.2
402.6
RNG sold as vehicle fuel is included in the CNG or LNG amounts in the table above as applicable based on the form
in which it was sold. GGEs of RNG sold as vehicle fuel for the years ended December 31, 2019, 2020 and 2021, were as
follows:
GGEs of RNG delivered (in millions)
CNG
LNG
Total
GGEs delivered (in millions)
O&M services
Fuel (1)
Fuel and O&M services (2)
Total
Year Ended
December 31,
2020
124.4
28.9
153.3
Year Ended
December 31,
2020
138.5
157.6
86.4
382.5
2019
112.5
30.8
143.3
2019
158.5
162.4
79.9
400.8
2021
146.0
21.0
167.0
2021
148.4
164.1
90.1
402.6
RNG sold as vehicle fuel is included in the table above as applicable based on the services provided. GGEs of RNG
sold as vehicle fuel for the years ended December 31, 2019, 2020 and 2021, were as follows:
GGEs of RNG delivered (in millions)
Fuel
Fuel and O&M services (2)
Total
Other operating data (in millions)
Station construction cost of sales
Gross margin (3) (4) (5)
Net income (loss) attributable to Clean Energy Fuels Corp. (3) (5)
Year Ended
December 31,
2020
86.2
67.1
153.3
Year Ended
December 31,
2020
2019
87.3
56.0
143.3
2019
$
$
$
23.5 $
132.0 $
20.4 $
24.0 $
106.3 $
(9.9) $
2021
88.0
79.0
167.0
2021
15.0
40.0
(93.1)
(1) As noted above, amounts include our proportionate share of the GGEs sold as CNG by our joint venture with MCEP. GGEs sold by this joint
venture were 0.4 million, 0.3 million, and 0.4 million for the years ended December 31, 2019, 2020 and 2021, respectively.
(2) Represents GGEs at stations where we provide both fuel and O&M services.
(3)
Includes $47.1 million, $19.8 million, and $20.7 million of AFTC revenue for the years ended December 31, 2019, 2020, and 2021, respectively.
37
(4) Gross margin includes an unrealized gain (loss) from the change in fair value of commodity swap and customer fueling contracts of $(6.6) million,
$2.1 million, and $(3.5) million for the years ended December 31, 2019, 2020 and 2021, respectively. See Note 7 for more information regarding
the commodity swap and customer contracts.
(5)
Includes $0.0 million, $0.0 million, and $83.6 million of non-cash stock-based sales incentive contra-revenue charges related to the Amazon
Warrant (as defined below) for the years ended December 31, 2019, 2020 and 2021, respectively.
2019 -2021 Developments
TotalEnergies Joint Venture. On December 21, 2020, we announced a memorandum of understanding with
TotalEnergies S.E. (“TotalEnergies”) to create a joint venture to develop carbon negative RNG production facilities in the
United States, as well as credit support to build additional downstream RNG infrastructure. TotalEnergies will provide
$50.0 million, and we will provide $30.0 million for the proposed joint venture. TotalEnergies will also be providing credit
support of $65.0 million to support our development in the RNG value chain, including $45.0 million for contracted RNG
fueling infrastructure.
On March 3, 2021, we entered an agreement (“TotalEnergies JV Agreement”) with TotalEnergies that created a 50/50
joint venture (“TotalEnergies JV”) to develop anaerobic digester gas (“ADG”) RNG production facilities in the United
States. Each ADG RNG production facility project under the TotalEnergies JV will be formed as a separate limited liability
company (“LLC”) that is owned 50/50 by us and TotalEnergies, and contributions to such LLCs count toward the
TotalEnergies JV Equity Obligations (as defined below). The TotalEnergies JV Agreement contemplates that the
TotalEnergies JV will invest up to $400.0 million of equity in production projects, and TotalEnergies and the Company
each committed to initially provide $50.0 million for the TotalEnergies JV (the “TotalEnergies JV Equity Obligations”).
To fund our TotalEnergies JV Equity Obligations, we had the option to borrow $20.0 million from Société Générale, a
company incorporated as a société anonyme under the laws of France (“SG”), pursuant to the SG Credit Agreement (as
defined below). See Note 12 for additional information.
On October 12, 2021, we entered into an LLC agreement (the “DR Development Agreement”) with TotalEnergies to
develop a dairy ADG RNG production facility project (the “DR JV”). Under the DR Development Agreement, we and
TotalEnergies have each committed to contribute $7.0 million to the DR JV. On November 1, 2021, we and TotalEnergies
have each contributed an initial $4.8 million capital contribution to the DR JV.
SG Credit Agreement. On March 12, 2021, we amended the credit agreement (as amended, the “SG Credit
Agreement”) with SG, to permit us to use up to $45.0 million of loan proceeds to fund certain station build costs and up
to $20.0 million to fund TotalEnergies JV Equity Obligations. Our ability to draw under the SG Credit Agreement ended
on January 2, 2022.
bp Joint Venture. On December 18, 2020, we entered a memorandum of understanding (“MOU”) with bp Products
North America Inc. (“bp”). Pursuant to the MOU, we and bp intend to create a joint venture to develop, own, and operate
RNG production facilities at dairies. Contemporaneous with the execution of the MOU, we and bp executed a loan
agreement whereby bp advanced $50.0 million (in the form of a loan) to fund capital costs and expenses incurred prior to
formation of the joint venture. We expect that all unpaid principal and accrued interest outstanding under the loan
agreement will be contributed to the joint venture, provided that if the joint venture is not formed by April 30, 2022, we
are obligated to repay the outstanding principal and accrued interest within five days of April 30, 2022.
On April 13, 2021, we entered an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture (“bpJV”)
to develop, own and operate new ADG RNG production facilities in the United States. Pursuant to the bp JV Agreement,
we and bp have each committed to provide $30.0 million and $50.0 million, respectively, with bp and us each receiving
30.0 million of Class A Units in the bpJV and bp also receiving 20.0 million of Class B Units in the bpJV. bp’s initial
$50.0 million contribution was made on April 13, 2021 and consisted of all unpaid principal outstanding under the loan
agreement dated December 18, 2020 (see Note 12), pursuant to which bp advanced us $50.0 million to fund capital costs
and expenses incurred prior to formation of the bpJV, including capital costs and expenses for permitting, engineering,
equipment, leases and feed stock rights. 100% of the RNG produced from the projects developed and owned by the bpJV
will be provided to the vehicle fuels market pursuant to our existing marketing agreement with bp.
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Pursuant to the bp JV Agreement, we had the option, exercisable prior to August 31, 2021 (the “bp Option”), to
commit an additional $20.0 million to the bpJV upon which bp’s Class B Units would convert into Class A Units. On June
21, 2021, we contributed $50.2 million consisting of our initial contribution commitment of $30.0 million, the $20.0
million additional contribution to exercise our bp Option, plus $0.2 million of interest in accordance with the bp JV
Agreement to effect the conversion of bp’s Class B Units into Class A Units. In December 2021, the bpJV authorized a
capital call (the “bpJV Capital Call”) for additional funding of $143.2 million to construct ADG RNG projects under the
bpJV. Pursuant to the bpJV Capital Call, we and bp are each required to contribute $71.6 million to the bpJV. As of
December 31, 2021, we and bp have contributed $20.0 million and $71.6 million, respectively, to the bpJV in connection
with the bpJV Capital Call. The remaining contribution balance of $51.6 million due from us will be paid on or prior to
June 30, 2022. As of December 31, 2021, we and bp each own 50% of the bpJV.
Amazon. On April 16, 2021, we entered into a Project Addendum to Fuel Pricing Agreement (“Fuel Agreement”) with
Amazon Logistics, Inc., a subsidiary of Amazon.com, Inc. (“Amazon”), and a Transaction Agreement with Amazon (the
“Transaction Agreement”), pursuant to which, among other things, we issued to Amazon.com NV Investment Holdings
LLC, a subsidiary of Amazon (“Amazon Holdings”), a warrant to purchase up to an aggregate of 53,141,755 shares (the
“Warrant Shares”) of our common stock at an exercise price of $13.49 per share, which was a 21.3% premium to the
$11.12 closing price of our common stock on April 15, 2021.
The Warrant Shares vest in multiple tranches, the first of which for 13,283,445 Warrant Shares vested upon execution
of the Fuel Agreement. Subsequent tranches will vest over time based on fuel purchases by Amazon and its affiliates, up
to a total of $500 million in fuel purchases, excluding any payments attributable to “Pass Through Costs,” which consist
of all costs associated with the delivered cost of gas and applicable taxes determined by reference to the selling price,
gallons or gas sold. Importantly, in order for all the vesting conditions of the warrant to be satisfied, Amazon would have
to purchase hundreds of millions of GGEs of RNG from us.
Under the Transaction Agreement, we were required to use commercially reasonable efforts to obtain the approval of
our stockholders with respect to the issuance of Warrant Shares in excess of 50,595,531 shares of our common stock,
pursuant to The Nasdaq Stock Market LLC’s Listing Rule 5635(b) (the “Stockholder Approval”). On June 14, 2021, we
obtained the Stockholder Approval at our 2021 annual meeting of stockholders.
In accordance with the terms of the warrant, as a result of the issuance of shares of our common stock pursuant to the
ATM Programs (as defined below), on June 14, 2021, the number of shares of our common stock that may be purchased
pursuant to the warrant, at an exercise price of $13.49 per share, increased by an aggregate of 5,625,959 shares (the
“Additional Warrant Shares”). The Additional Warrant Shares vest in multiple tranches, the first of which for 1,406,490
Additional Warrant Shares vested on June 14, 2021. Subsequent tranches of the Additional Warrant Shares will vest over
time based on fuel purchases by Amazon and its affiliates, consistent with the vesting schedule for the Warrant Shares as
described above. The right to exercise the warrants and receive the Warrant Shares and Additional Warrant Shares (the
“Amazon Warrant”) that have vested expires April 16, 2031.
We believe our commercial partnership with Amazon will enhance our strategies, initiatives and efforts to achieve
our goals to grow fleet and other consumer support for the use of RNG as a vehicle fuel for our target customers and
geographies. We also believe the proceeds from the issuance of our common stock to Amazon in the event Amazon were
to vest and then exercise the Amazon Warrant in part or as a whole for cash would enhance our liquidity in support of our
operations, as well as our ability to execute our business plans and pursue opportunities for further growth. Accordingly,
we believe securing this commercial partnership and incentiving Amazon to purchase the maximum amount of fuel under
the Fuel Agreement is important for our business trajectory.
As a result of the immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares, we recognized
non-cash stock-based sales incentive contra-revenue charges (“Amazon Warrant Charges”) in the second quarter of 2021
of $76.6 million and a customer incentive asset of $38.4 million representing Amazon Warrant Charges associated with
future contractually required minimum fuel purchases which will be recognized as the fuel is purchased.
For the year ended December 31, 2021, Amazon Warrant Charges were $83.6 million, which included $76.6 million
from the immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares and $7.0 million associated
39
with fuel purchases. As of December 31, 2021, we had a customer incentive asset of $12.4 million and $22.1 million,
classified in “Prepaid expenses and other current assets” and “Notes receivable and other long-term assets, net,”
respectively, in the accompanying consolidated balance sheets.
At-The-Market Offerings. On May 10, 2021, we entered into an equity distribution agreement with Goldman Sachs &
Co. LLC, as sales agent, to sell shares of our common stock having an aggregate offering price of up to $100.0 million in
an at-the-market offering program (the “May ATM Program”). As of June 3, 2021, we sold 12,362,237 shares of our
common stock under the May ATM Program, which exhausted the May ATM Program. On June 7, 2021, we entered into
a new equity distribution agreement with Goldman Sachs & Co. LLC, as sales agent, to sell additional shares of our
common stock having an aggregate offering price of up to $100.0 million in a new at-the-market offering program (the
“June ATM Program” and, together with the May ATM Program, the “ATM Programs”). On June 8, 2021, we sold
10,473,946 shares of our common stock under the June ATM Program, which exhausted the June ATM Program.
For the year ended December 31, 2021, we issued 22,836,183 shares of our common stock under the ATM Programs
for gross proceeds of $200.0 million, and incurred transaction costs of $6.5 million, including $6.0 million in commissions
paid to Goldman Sachs & Co. LLC.
Share Repurchase Program. On March 12, 2020, our Board of Directors approved the Repurchase Program for up to
$30.0 million (exclusive of fees and commissions) of our outstanding common stock. On December 7, 2021, our Board of
Directors approved an increase in the aggregate purchase amount under the Repurchase Program from $30.0 million to
$50.0 million (exclusive of fees and commissions). The Repurchase Program does not have an expiration date, does not
obligate us to acquire any specific number of shares, and may be suspended or discontinued at any time. As of
December 31, 2021, we had utilized $17.4 million under the Repurchase Program to purchase 8,197,086 shares of our
common stock for a total cost of $17.6 million.
Plains Credit Facility. On May 1, 2021, we entered into a Loan and Security Agreement (the “Plains LSA”) with
PlainsCapital Bank (“Plains”) which provides us a $20.0 million revolving line of credit through May 1, 2022. The interest
rate on amounts outstanding under the Plains LSA is the greater of the Prime Rate or 3.25%. As of December 31, 2021,
no amounts were outstanding under the Plains LSA. On September 16, 2021, Plains issued an irrevocable standby letter
of credit on behalf of the Company to the Chevron Products Company, a division of Chevron U.S.A. Inc. (“Chevron”), for
$2.0 million relating to the Company’s Adopt-A-Port program with Chevron. The standby letter of credit is valid until
cancelled and is collateralized by the Company’s revolving line of credit with Plains, reducing the amount available under
the line of credit from $20.0 million to $18.0 million. As of December 31, 2021, no amounts have been drawn under the
standby letter of credit.
Chevron Adopt-a-Port. In June 2020, we entered into an agreement with Chevron Corp. (“Chevron”) to provide truck
operators serving the ports of Los Angeles and Long Beach with cleaner, carbon negative RNG to reduce emissions. Under
the agreement, Chevron will provide funding to allow truck operators to subsidize the cost of buying new RNG-powered
trucks and will supply RNG to our stations near the ports.
AFTC. On December 20, 2019, the AFTC was retroactively extended beginning January 1, 2018 through
December 31, 2020. As a result, AFTC revenue for vehicle fuel we sold in 2018 and 2019, which totaled $47.1 million,
was recognized during the year ended December 31, 2019. AFTC revenue recognized during the year ended December
31, 2020 totaled $19.8 million. The AFTC credit for 2018, 2019 and 2020 was equal to $0.50 per GGE of CNG that we
sold as vehicle fuel, and $0.50 per diesel gallon of LNG that we sold as vehicle fuel. In December 2020 AFTC was
extended for vehicle fuel sales made through December 31, 2021. We expect AFTC to be reinstated during 2022 and apply
retroactively to vehicle fuel sales made beginning January 1, 2022.
Zero Now Truck Financing Program. We launched the Zero Now truck financing program, which is intended to
facilitate and increase the deployment of commercially available RNG heavy-duty trucks in the United States and
encourage these operators to fuel their trucks at our stations. The Zero Now program is unique and complex, and has
involved our entry into various arrangements in order to launch the program, including a term credit agreement for delayed
draw loans of up to $100.0 million, which we could draw through January 2, 2022; a credit support agreement with
THUSA, a wholly owned subsidiary of TotalEnergies, under which THUSA has guaranteed our obligations under the term
40
credit agreement in exchange for a quarterly fee; and commodity swap arrangements with an affiliate of THUSA and
TotalEnergies covering five million diesel gallons of natural gas fuel volume annually from April 2019 through June 2024,
which are intended to manage diesel price fluctuation risks related to the natural gas fuel supply commitments we expect
to make in our anticipated fueling agreements with fleet operators that participate in the Zero Now program. See the
disclosure under “Key Customer Markets-Zero Now” in Item 1. “Business” of this report for information about these
agreements and the structure of the program.
Debt Repurchase and Repayment. In May 2020, we repaid the remaining $50.0 million of 7.5% Notes and related
accrued and unpaid interest thereon. Upon such payment, the 7.5% Notes were paid in full. See Note 12 for more
information about our outstanding debt.
NG Advantage. In February 2020, we converted the principal and accrued interest under the November 2019
Convertible Note (as defined in Note 4) into common units of NG Advantage, LLC (“NG Advantage”) and received
common units pursuant to the guaranty agreement entered in February 2018, resulting in an increase in our controlling
interest in NG Advantage to 93.3%.
Debt Level and Debt Compliance
As of December 31, 2021, we had total indebtedness, excluding finance lease obligations, of $36.1 million in principal
amount, of which $12.9 million is expected to become due in 2022. Certain of the agreements governing our outstanding
debt, which are discussed in Note 12, have certain financial and non-financial covenants with which we must comply. As
of December 31, 2021, we were in compliance with all of these covenants.
Key Trends
Market for RNG, CNG and LNG as a Vehicle Fuel
According to CARB, RNG and conventional natural gas are cleaner than gasoline and diesel fuel based on the
greenhouse gas emissions produced by vehicles operated by these fuels. Additionally, RNG and conventional natural gas
are generally less expensive for vehicle operators than gasoline and diesel on an energy equivalent basis. According to the
U.S. Energy Information Administration, demand for renewable and conventional natural gas fuels in the United States
has increased in recent years and is expected to continue to increase. We expect our sales of RNG and conventional natural
gas to grow as more companies look to operate in an increasingly sustainable way. In addition to pressure from politicians,
regulators and non-governmental organizations, the investment community has dramatically increased demands on
companies to diminish their contributions to climate change. We believe that RNG is the best tool available today to reduce
climate-harming greenhouse gas and meet sustainability objectives.
The market for our vehicle fuels, however, is a relatively new and developing market. As a result, it is difficult to
accurately predict demand for our vehicle fuels, in general and in any specific geographic and customer markets, and
consequently our timing and level of investment in particular markets may not be consistent with any growth in demand
in these markets. Further, the new and developing nature of the market for our vehicle fuels has led to slow, volatile or
unpredictable growth in many sectors. For example, to date, adoption and deployment of natural gas vehicles, both in
general and in certain of our key customer markets, including heavy-duty trucking, have been slower than we anticipated.
We believe challenging market conditions are caused by a number of factors, including the following:
• Volatile prices for oil, diesel and gasoline, which decreases the price advantage of our fuels. In addition, these
pricing conditions have led us to reduce the prices we charge some customers for our fuels, which has reduced
our profit margins.
• There has been increased focus by some parties, including lawmakers, regulators, policymakers, environmental
and advocacy organizations and other powerful groups, on electric or other alternative vehicles or vehicle fuels.
For example, the 2021 Executive Order directs the federal government to achieve certain goals, including
achieving 100% zero-emission vehicle acquisitions by 2035. In addition, California lawmakers and regulators
41
have implemented various measures designed to increase the use of electric, hydrogen and other zero-emission
vehicles, including establishing firm goals for the number of these vehicles operating on state roads by specified
dates and enacting various laws and other programs in support of these goals. Among other things, we believe
many California lawmakers and regulators desire to limit and ultimately discontinue the production and use of
internal combustion engines because such engines have “tailpipe” emissions.
• We believe the lack of substantial growth in the heavy-duty trucking market has been driven in part by the
experience of operators with, or perceptions of, unsatisfactory performance by prior models of heavy-duty natural
gas truck engines, actual or perceived insufficiencies in the financial incentives to convert, and improvements in
diesel engine technology. If these conditions continue, then the growth levels in this market will continue to be
low. We believe the newest models of heavy-duty natural gas truck engines have substantially addressed concerns
with prior models. Further, we have launched our Zero Now truck financing program and the Chevron Adopt-a-
Port program to combat operator concerns, but these programs may not ultimately be successful.
To the extent these or other factors have contributed to curtailed demand or slowing growth in the market for our
vehicle fuels, we believe they have also contributed to decreases in station construction activity in certain periods, as the
success of this activity is dependent on the success of the market for our vehicle fuels generally. Moreover, we believe
these factors have materially contributed to the volatility and declines in our stock price and market capitalization in
recent years, which has and could in the future lead to decreased cash flows and indications of asset or goodwill
impairment. If these adverse macroeconomic conditions and other uncertainties in our industry persist, our financial results
and stock price may continue to be adversely affected.
In spite of these market conditions, we believe our key customer markets, including heavy-duty trucking, airports,
refuse, and public transit, are well-suited for the adoption of our vehicle fuels because they consume relatively high
volumes of fuel, refuel at centralized locations or along well-defined routes and/or are facing increasingly stringent
emissions or other environmental requirements. We also expect the lower greenhouse gas emissions associated with our
RNG vehicle fuel will result in increased demand for this fuel, resulting in our continued delivery of increasing volumes
of RNG to our vehicle fleet customers. Additionally, we anticipate that, over time, cities and communities in the United
States and Canada will follow large cities in Europe in banning diesel vehicles. If these projections materialize, we believe
there will be growth in the consumption of our vehicle fuels in our key customer and geographic markets, and our goal is
to capitalize on this growth if and when it materializes. In that event, we expect our operating costs and capital expenditures
would increase in connection with any growth of our business in the future.
Our Performance
Overview. Our gross revenue mostly consists of volume-related revenue, station construction sales, and AFTC
revenue. Our revenue can vary between periods due to a variety of factors, including, among others, the amount and timing
of vehicle fuel sales, natural gas commodity prices, station construction sales, sales of Environmental Credits, and
recognition of government credits, grants and incentives, such as AFTC. In addition, our volume-related revenue has been
and may continue to be subject to fluctuations as a result of our entry into certain commodity swap arrangements in
October 2018, because the changes in fair value of these and certain other derivative instruments, including existing and
anticipated fueling contracts under our Zero Now truck financing program, are included in volume-related revenue.
Furthermore, our volume-related revenue has been affected by the Amazon Warrant Charges resulting from immediate
vesting of a portion of the Warrant Shares and Additional Warrant Shares and subsequent vesting associated with fuel
purchases made by Amazon and its affiliates.
Our cost of sales can also vary between periods due to a variety of factors, including fluctuations in natural gas
commodity prices, station construction and labor costs, as well as the other factors that impact our revenue levels described
above.
In addition, our performance in certain periods has been affected by transactions or events that have resulted in
significant cash or non-cash gains or losses. Such gains or losses may not recur regularly, in the same amounts or at all in
future periods and, with respect to non-cash gains and losses, do not impact our liquidity.
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These significant fluctuations in our operating results may render period-to-period comparisons less meaningful,
especially given the current uncertainties related to the ongoing COVID-19 pandemic, and investors in our securities
should not rely on the results of one period as an indicator of performance in any other period. Additionally, these
fluctuations in our operating results could cause our performance in any period to fall below the financial guidance we
may have provided to the public or the estimates and projections of the investment community, which could negatively
affect the price of our common stock.
See “Results of Operations” below for more information about our performance in 2020 and 2021.
Volume. The amount of RNG and conventional natural gas, in the form of CNG and LNG, that we delivered increased
by 5.3% from 2020 to 2021 primarily due to the effect of COVID-19 restrictions being lifted and increase in travel
generally.
The amount of RNG we sell as vehicle fuel, which is delivered in the form of CNG or LNG, has continued to
experience robust growth, and increased by 8.9% from 2020 to 2021. We believe the increased demand for RNG is
attributable to the dramatic reduction in the amount of climate-harming greenhouse gas that can be achieved through the
use of RNG and pressure from politicians, regulators, non-governmental organizations and the investment community
directed at companies to reduce their contributions to climate change. To the extent demand for RNG continues to increase,
we expect our TotalEnergies JV and our expanded supply agreement and bpJV could increase our volume-related revenue
due to increased volumes of RNG vehicle fuel sold and increased generation of RINs and LCFS Credits. In addition, such
an increase in RNG demand could also result in more robust competition for supplies of RNG, including from other vehicle
fuel providers, gas utilities (which may have distinct advantages in accessing RNG supply, including potential use of
ratepayer funds to fund RNG purchases if approved by a utility’s regulatory commission) and other users and providers.
We expect to invest in production projects to help ensure that we have adequate supply of RNG, and we are pursuing
development and ownership of livestock waste ADG projects on our own and with partners including TotalEnergies and
bp.
Environmental Credits. When we sell RNG and conventional natural gas for use as a vehicle fuel, we are eligible to
generate RINs and LCFS Credits, which we then seek to sell to third parties.
The markets for RINs and LCFS Credits have been volatile and unpredictable in recent periods, and the prices for
these credits have been subject to significant fluctuations. For example, in 2021, market prices for RINs have been as high
as $3.81 and as low as $1.95. Additionally, the value of RINs and LCFS Credits, and consequently the revenue levels we
may receive from our sale of these credits, may be adversely affected by changes to the federal and state programs under
which these credits are generated and sold, prices for and use of oil, diesel or gasoline, the inclusion of additional qualifying
fuels in the programs, increased production levels of other fuels in the programs, or other conditions. Further, our ability
to generate revenue from sales of these credits depends on our strict compliance with these federal and state programs,
which are complex and can involve a significant degree of judgment. If the agencies that administer and enforce these
programs disagree with our judgments, otherwise determine we are not in compliance, conduct reviews of our activities
or make changes to the programs, then our ability to generate or sell these credits could be temporarily restricted pending
completion of reviews or as a penalty, permanently limited or lost entirely, and we could be subject to fines or other
sanctions. Any of these outcomes could force us to purchase credits in the open market to cover any credits we have
contracted to sell, retire credits we may have generated but not yet sold, reduce or eliminate a significant revenue stream
or incur substantial additional and unplanned expenses.
Risk Management Activities
From time to time, we enter into fuel sales contracts that require us to sell CNG or LNG to our customers at a fixed
price. These contracts expose us to the risk that the price of natural gas commodity may increase above the natural gas
commodity cost component included in the price at which we are committed to sell the natural gas to 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, we operate under a hedging policy pursuant to which we purchase futures contracts to hedge
our exposure to variability in expected future cash flows related to a particular fixed price contract or bid. Subject to the
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conditions set forth in the policy, we purchase futures contracts in quantities reasonably expected to effectively hedge our
exposure to cash flow variability related to fixed price sales contracts entered into after the date of the policy. Unless
otherwise agreed in advance by our board of directors and the derivatives committee thereof, we will conduct our futures
contract activities and enter into fixed price sales contracts only in accordance with our hedging policy.
Due to the restrictions of our hedging policy, we expect to offer few 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 of this price component will vary based on
the anticipated volume and the natural gas price component to be covered under the fixed price sales contract.
In October 2018, in support of our Zero Now truck financing program, we executed two commodity swap contracts
with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies and THUSA, for a total of five million
diesel gallons annually from April 1, 2019 to June 30, 2024. These commodity swap contracts are intended to manage
risks related to the diesel-to-natural gas price spread in connection with the natural gas fuel supply commitments we have
made and expect to make in our current and anticipated fueling agreements with fleet operators that participate in the Zero
Now program.
Critical Accounting Policies and Estimates
This discussion is based upon our consolidated financial statements included in this report, which have been prepared
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The
preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates and may result in material effects on our operating results and financial position.
We believe the critical accounting policies discussed below affect our more significant estimates made in preparing
our consolidated financial statements. See Notes 1 and 2 for more information about these and our other significant
accounting policies.
Revenue Recognition
In general, revenue is recognized when control of the promised goods or services is transferred to our customers, in
an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. To
achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the
performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the
performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we
satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service
to the customer and is the unit of account for revenue recognition.
We recognize revenue on various products and services.
Our volume-related revenue primarily consists of sales of RNG and conventional natural gas, in the form of CNG and
LNG, O&M services, and RINs and LCFS Credits in addition to Amazon Warrant Charges and changes in fair value of
our derivative instruments.
Fuel and O&M services are sold pursuant to contractual commitments over defined goods-and-service delivery
periods. These contracts typically include a stand-ready obligation to supply natural gas and/or provide O&M services
daily based on a committed and agreed upon routine maintenance schedule or when and if called upon by the customer.
We recognize fuel and O&M services revenue in the amount to which we have the right to invoice. We have a right
to consideration based on the amount of GGEs of natural gas dispensed by the customer and current pricing conditions,
which are typically billed to the customer on a monthly basis. Since payment terms are less than a year, we have elected
the practical expedient which allows us to not assess whether a customer contract has a significant financing component.
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We sell RIN Credits and LCFS Credits to third parties that need the credits to comply with federal and state
requirements. Revenue is recognized on these credits when there is an agreement in place to monetize the credits at a
determinable price.
Changes in fair value of derivative instruments relates to our commodity swap and certain customer fueling contracts
under our Zero Now truck financing program. The contracts are measured at fair value with changes in the fair value
recorded in our consolidated statements of operations in the period incurred. The amounts are classified as revenue because
our commodity swap contracts are used to economically offset the risk associated with the diesel-to-natural gas price
spread resulting from existing and anticipated customer fueling contracts under our Zero Now truck financing program.
Amazon Warrant Charges are determined based on the grant date fair value of the award, and the associated non-cash
stock-based sales incentive charges, which is recorded as a reduction of revenue, are recognized as the customer purchases
fuel and vesting conditions become probable of being achieved. See Note 1 for additional information.
Station construction contracts are generally short-term, except for certain larger and more complex stations, which
can take up to 24 months to complete. For most of our station construction contracts, the customer contracts with us to
provide a significant service of integrating a complex set of tasks and components into a single station. Hence, the entire
contract is accounted for as one performance obligation.
We recognize station construction revenue over time as we perform under these contracts because of the continual
transfer of control of the goods to the customer, which typically controls the work in process. Revenue is recognized based
on the extent of progress towards completion of the performance obligation and is recorded proportionally as costs are
incurred. Costs to fulfill our obligations under these contracts typically include labor, materials and subcontractors’ costs,
other direct costs and an allocation of indirect costs.
Refinements of estimates to account for changing conditions and new developments are continuous and characteristic
of the process. Many factors that can affect contract profitability may change during the performance period of the contract,
including differing site conditions, the availability of skilled contract labor, the performance of major suppliers and
subcontractors, and unexpected changes in material costs. Because a significant change in one or more of these estimates
could affect the profitability of these contracts, the contract price and cost estimates are reviewed periodically as work
progresses and adjustments proportionate to the cost-to-cost measure of progress are reflected in contract revenues in the
reporting period when such estimates are revised as discussed above. Provisions for estimated losses on uncompleted
contracts are recorded in the period in which the losses become known.
In certain contracts with our customers, we agree to provide multiple goods or services, including construction of and
sale of a station, O&M services, and sale of fuel to the customer. These contracts have multiple performance obligations
because the promise to transfer each separate good or service is separately identifiable and distinct. This evaluation requires
significant judgment and the decision to combine a group of contracts or separate the combined or single contract into
multiple performance obligations could change the amount of revenue recognized in one or more periods.
We allocate the contract price to each performance obligation using best estimates of the standalone selling price of
each distinct good or service in the contract. The primary method used to estimate the standalone selling price for fuel and
O&M services is observable standalone sales, and the primary method used to estimate the standalone selling price for
station construction sales is the expected cost plus a margin approach because we sell customized customer-specific
solutions. Under this approach, we forecast expected costs of satisfying a performance obligation and then add an
appropriate margin for the good or service.
AFTC is considered variable consideration because it can either increase or decrease the transaction price based on
volumes of vehicle fuel sold. Additionally, AFTC is not recognized as revenue until it is authorized through federal
legislation, which also provides a determinable price. We recognize revenue in the period the credit is authorized through
federal legislation.
We collect and remit taxes assessed by various governmental authorities that are imposed on and concurrent with
revenue-producing transactions between us and our customers. These taxes may include, among others, fuel, sales and
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value-added taxes. We report the collection of these taxes on a net basis and they are excluded from revenue and cost of
goods sold.
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 either a qualitative or quantitative approach to determine whether it is more likely than not that the fair
value of our reporting unit is less than its carrying value. We are required to use judgment when applying the goodwill
impairment test, including, among other considerations, the identification of reporting unit(s), the assessment of qualitative
factors, and the estimation of fair value of a reporting unit in the quantitative approach. We determined that we are a single
reporting unit for the purpose of goodwill impairment tests. We perform the impairment test annually on October 1, or
more frequently if facts or circumstances change that would indicate that the carrying amount may be impaired.
The qualitative goodwill assessment includes the potential effect on a reporting unit’s fair value of certain events and
circumstances, including its enterprise value, macroeconomic conditions, industry and market considerations, cost factors,
and other relevant entity-specific events. If it is determined, based upon the qualitative assessment, that it is more likely
than not that the reporting unit’s fair value is less than its carrying amount, then a quantitative impairment test is performed.
Alternatively, we may bypass the qualitative assessment for a reporting unit and directly perform the quantitative
assessment.
The quantitative assessment estimates the reporting unit's fair value based on its market capitalization plus an assumed
control premium as evidence of fair value. The estimates used to determine the fair value of the reporting unit may change
based on results of operations, macroeconomic conditions stock price fluctuations or other factors. Changes in these
estimates could materially affect our assessment of the fair value and goodwill impairment for the reporting unit.
For our most recent goodwill impairment test, which was our annual test performed on October 1, 2021, we performed
a quantitative impairment assessment for the reporting unit as described above. In this test, the fair value of the reporting
unit substantially exceeded its carrying value.
We evaluated the volatility in the market price of our common stock subsequent to our annual test date through
December 31, 2021, and considered whether there were any other events or circumstances that would more likely than not
reduce the fair value of our reporting unit below its carrying value on a sustained basis, and concluded it was not more
likely than not that the fair value of our reporting unit decreased below its carrying value, on a sustained basis. As a result,
an interim impairment test was not considered necessary during the three months ended December 31, 2021.
If a significant decline in the market price of our common stock and our market capitalization were sustained, or if
other events or circumstances change that would more likely than not reduce the fair value of our reporting unit below its
carrying value, on a sustained basis, then we may perform impairment tests more frequently, and it is possible that our
goodwill could become impaired, which could result in a material charge and adversely affect our results of operations.
We review the carrying value of our long-lived assets, including property and equipment and intangible assets with
finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset
or asset group may not be recoverable. Events that could result in an impairment review include, among others, a significant
decrease in the operating performance of a long-lived asset or asset group or the decision to close a fueling station.
Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to
its carrying amount. If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment
exists. If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to
determine the amount of impairment, if any, to be recognized. An impairment loss is recognized to the extent that the
carrying amount of the asset or asset group exceeds its fair value. The fair value of the asset or asset group is based on
estimated discounted future cash flows of the asset or asset group using a discount rate commensurate with the related risk.
The estimate of future cash flows requires management to make assumptions and to apply judgment, including forecasting
future sales and expenses and estimating useful lives of the assets. These estimates can be affected by a number of factors,
including, among others, future results, demand and economic conditions, many of which can be difficult to predict.
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Income Taxes
Income taxes are computed using the asset and liability method. Under this method, deferred income taxes are
recognized by applying enacted statutory tax rates applicable to future years to differences between the tax bases and
financial carrying amounts of existing assets and liabilities. The impact on deferred taxes of 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
consolidated financial statements in the period of enactment. Valuation allowances are established when management
determines it is more likely than not that deferred tax assets will not be realized. When evaluating the need for a valuation
analysis, we use estimates involving a high degree of judgment including projected future U.S. GAAP 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 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 taxing authorities 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% likelihood of being realized
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 the ultimate 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 measured at 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 sell an asset or paid to transfer a liability in
an orderly transaction between market participants, as of the measurement date. The framework also establishes a hierarchy
for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable
inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market
participants would use in valuing the asset or liability and are developed based on market data obtained from sources
independent of our Company. Unobservable inputs are inputs that reflect our assumptions about the factors market
participants would use in valuing the asset or liability and are developed based upon the best information available in the
circumstances. 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 are not 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 for the asset or liability. Categorization within the valuation hierarchy 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 valuation of commodity swaps and customer contracts,
and warrants, all of which require significant judgment.
Recently Adopted Accounting Changes and Recently Issued and Adopted Accounting Standards.
See Note 1 for information about recently adopted accounting changes and recently issued accounting standards.
Results of Operations
The discussions below compare our results of operations in 2021 and 2020. Historical results are not indicative of the
results to be expected in the current period or any future period.
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2021 Compared to 2020
The table below presents, for each period, each line item of our statement of operations as a percentage of our total
revenue for the period. The narrative that follows provides a comparative discussion of certain of these line items between
periods.
Statements of Operations Data:
Revenue:
Product revenue
Service revenue
Total revenue
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below):
Product cost of sales
Service cost of sales
Change in fair value of derivative warrants
Selling, general and administrative
Depreciation and amortization
Total operating expenses
Operating loss
Interest expense
Interest income
Other income, net
Loss from equity method investments
Gain from sale of certain assets of subsidiary
Gain (loss) from formation of equity method investment
Loss before income taxes
Income tax expense
Net loss
Loss attributable to noncontrolling interest
Net loss attributable to Clean Energy Fuels Corp.
Year Ended
December 31,
2020
2021
86.4 %
13.6
100.0
83.4 %
16.6
100.0
55.4
8.1
—
23.5
16.3
103.3
(3.4)
(2.5)
0.5
1.0
(0.1)
0.4
0.2
(3.9)
(0.1)
(4.0)
0.6
(3.4)%
74.2
10.2
—
35.2
17.7
137.3
(37.2)
(1.7)
0.4
0.4
(0.2)
1.5
—
(36.8)
—
(36.8)
0.4
(36.4)%
Revenue. Revenue decreased by $36.1 million to $255.6 million for 2021, from $291.7 million for 2020. This
decrease was primarily due to the Amazon Warrant Charges of $83.6 million, an unrealized loss from the change in fair
value of our commodity swap and customer contracts entered into in connection with our Zero Now truck financing
program and a decrease in station construction sales, partially offset by an increase in volume-related revenue.
Volume-related revenue, excluding the effect of the change in fair value of our commodity swap and customer
contracts entered into in connection with our Zero Now truck financing program and the Amazon Warrant Charges,
increased by $62.5 million between periods, attributable to an increase in gallons delivered and a higher effective price
per gallon delivered. The effect to volume-related revenue as a result of the change in fair value of our commodity swap
and customer contracts entered into in connection with our Zero Now truck financing program was $5.6 million, as we
recognized an unrealized gain of $2.1 million in 2020 compared to an unrealized loss of $3.5 million in 2021 (see Note 7
for more information).
Our effective price per gallon increased by $0.12 per gallon to $0.76 per gallon in 2021 compared to $0.64 in 2020,
excluding the effects of the change in fair value of derivative instruments and Amazon Warrant Charges discussed above.
Our effective price per gallon is defined as revenue generated from selling RNG and conventional natural gas and any
related Environmental Credits and providing O&M services to our vehicle fleet customers at stations 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-
consolidated entities, such as entities that are accounted for under the equity method. The increase in our effective price
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per gallon was primarily due to higher RIN and natural gas prices, and a favorable fuel price mix, which is based on the
variation of fuel types and locations where we deliver fuel.
Station construction sales decreased by $10.2 million between periods due to decreased construction activities as a
result of construction delays relating to completion of certain projects.
AFTC revenue increased by $0.9 million between periods primarily due to the increase in gallons sold during the year
ended December 31, 2021 compared to the year ended December 31, 2020.
Cost of sales. Cost of sales increased by $30.2 million to $215.6 million in 2021, from $185.4 million in 2020. This
increase was primarily due to an increase in gallons delivered and an increase in our effective cost per gallon delivered,
partially offset by a decrease in the cost of station construction activities.
Our effective cost per gallon increased by $0.08 per gallon to $0.50 per gallon in 2021 from $0.42 per gallon in 2020.
Our effective cost per gallon is defined as the total costs associated with delivering our fuels, including commodity costs,
transportation fees, liquefaction charges, 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 or fixed fee, including direct technician labor, indirect
supervisor and management labor, repair parts and other direct maintenance costs, all divided by the total GGEs delivered
less GGEs delivered by non-consolidated entities, such as entities that are accounted for under the equity method. The
increase in our effective cost per gallon was due to higher commodity prices and transportation costs.
Selling, general and administrative. Selling, general and administrative expenses increased by $21.4 million to $89.9
million in 2021, from $68.5 million in 2020. The increase was primarily driven by an increase of $12.0 million in stock-
based compensation expense due to equity awards granted during the year and our higher stock price, an increase of $2.9
million in salaries and benefits, and an increase of $2.0 million in legal and consulting fees.
Depreciation and amortization. Depreciation and amortization decreased by $2.5 million to $45.2 million in 2021,
from $47.7 million in 2020, primarily due to a lower amount of depreciable assets.
Interest expense. Interest expense decreased by $2.9 million to $4.4 million in 2021, from $7.3 million in 2020. This
decrease was primarily due to a reduction of outstanding indebtedness between periods and a $1.2 million loss on
extinguishment of debt in 2020 that is included in interest expense.
Other income, net. Other income, net decreased by $2.1 million to $0.9 million in 2021, from $3.0 million in 2020,
primarily due to higher gains recorded for the disposal of certain assets in the prior year period.
Loss from equity method investments. Loss from equity method investments increased by $0.2 million to $0.4
million in 2021, from $0.2 million in 2020, primarily due to the operating results of SAFE&CEC S.r.l., the bpJV, and the
TotalEnergies JV.
Gain from sale of certain assets of subsidiary. In 2021, we recorded a gain of $3.9 million compared to a gain of
$1.1 million in 2020 as a result of the satisfaction of specified performance criteria in each of 2020 and 2021 related to the
assets sold in the bp Transaction in accordance with the related Amended Asset Purchase Agreement.
Gain from formation of equity method investment. In 2020, we recorded a gain of $0.7 million related to the release
of costs accrued in satisfaction of commitments made in connection with the CEC Combination (defined in Note 3). There
was no comparable gain or loss in 2021.
Income tax expense. Income tax expense decreased by $0.2 million to $0.1 million in 2021 from $0.3 million in
2020, primarily due to a decrease in deferred taxes associated with goodwill and a reduction in the Company’s expected
foreign tax exposure.
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Loss attributable to noncontrolling interest. In 2021 and 2020, we recorded a gain of $1.0 million and $1.7 million,
respectively, for the noncontrolling interest in the net loss of NG Advantage. The noncontrolling interest in NG Advantage
represents a 6.7% minority interest that was held by third parties during both the 2021 and 2020 periods.
Seasonality and Inflation
To some extent, we experience seasonality in our results of operations. Some of our customers tend to consume more
of our vehicle fuels in the summer months, when buses and other fleet vehicles use more fuel to power their air conditioning
systems, which typically translate to an increased volume of fuel delivered in the summer months. In addition, natural gas
commodity prices tend to be higher in the fall and winter months, due to increased overall demand for natural gas for
heating during these periods.
Historically, inflation has not significantly affected our operating results; however, costs for construction, repairs,
maintenance, electricity and insurance are all subject to inflationary pressures, which could affect our ability to maintain
our stations adequately, build new stations, expand our existing facilities or pursue additional facilities, and could
materially impact our operating costs.
Liquidity and Capital Resources
Liquidity
Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or
maturity of investments or the acquisition of additional funds through capital management. Our financial position and
liquidity are, and will continue to be, influenced by a variety of factors, including the level of our outstanding indebtedness
and the principal and interest we are obligated to pay on our indebtedness, which could be influenced by the discontinuance
of LIBOR for certain of our debt instruments that tie interest rates to this metric; the amount and timing of any additional
debt or equity financing we may pursue; our capital expenditure requirements; any merger, divestiture or acquisition
activity; and our ability to generate cash flows from our operations. We expect cash provided by our operating activities
to fluctuate as a result of a number of factors, including our operating results and the factors that affect these results,
including the amount and timing of our vehicle fuel sales, station construction sales, sales of RINs and LCFS Credits and
recognition of government credits, the effects of COVID-19, grants and incentives, if any; fluctuations in commodity,
station construction and labor costs; Environmental Credit prices; variations in the fair value of certain of our derivative
instruments that are recorded in revenue; and the amount and timing of our billing, collections and liability payments, as
discussed under “Key Trends-Our Performance” above.
Cash Flows
Operating Activities. Cash provided by operating activities was $41.3 million in 2021, compared to cash provided by
operating activities of $61.0 million in 2020. The decrease in cash provided by operating activities was primarily
attributable to the collection of AFTC receivables related to 2018 and 2019 volumes in 2020.
Investing Activities. Cash used in investing activities was $207.7 million in 2021, compared to cash provided by
investing activities of $24.2 million in 2020. The increase in cash used in investing activities was primarily attributable to
$100.2 million in net purchases of short-term investments in 2021, compared to $27.6 million in net maturities of short-
term investments in 2020, a $15.6 million increase in capital expenditures in 2021, higher investments in other entities in
2021, including our $70.2 million in contribution to the bpJV, a $1.7 million decrease in proceeds from property and
equipment disposals, and $3.9 million in lower net earn-out proceeds received in connection with the bp Transaction.
Financing Activities. Cash provided by financing activities was $152.8 million in 2021, compared to cash used in
financing activities of $18.7 million in 2020. Cash provided by financing activities in 2021 was primarily attributable to
approximately $193.5 million net proceeds from the issuance of common stock under our ATM Programs, proceeds from
the Chevron Adopt-a-Port program, and proceeds from debt instruments, partially offset by repurchases of common stock
and repayments of debt instruments and finance lease obligations. Cash used in financing activities in 2020 was primarily
50
attributable to repayments of debt instruments and finance lease obligations and repurchases of common stock, partially
offset by proceeds received from debt instruments.
Capital Expenditures, Indebtedness and Other Uses of Cash
We require cash to fund our capital expenditures, operating expenses and working capital and other requirements,
including costs associated with fuel sales; outlays for the design and construction of new fueling stations; additions or
other modifications to existing fueling stations; RNG production facilities; debt repayments and repurchases; repurchases
of common stock; purchases of heavy-duty trucks that use our fuels; additions or modifications of LNG production
facilities; supporting our operations, including maintenance and improvements of our infrastructure; supporting our sales
and marketing activities, including support of legislative and regulatory initiatives; financing vehicles for our customers;
any investments in other entities; any mergers or acquisitions, including acquisitions to expand our RNG production
capacity; pursuing market expansion as opportunities arise, including geographically and to new customer markets; and to
fund other activities or pursuits and for other general corporate purposes.
Our business plan calls for approximately $70.9 million in capital expenditures in 2022. These capital expenditures
primarily relate to the construction of fueling stations, IT software and equipment and LNG plant costs, and we expect to
fund these expenditures primarily through cash on hand and cash generated from operations. Further, in 2022, we anticipate
deploying up to approximately $195.0 million to develop ADG RNG production facilities. In 2021, we contributed $70.2
million and $4.8 million to the bpJV and the DR JV, respectively.
In addition, NG Advantage may spend up to $0.6 million in 2022 to purchase additional equipment in support of its
operations and customer contracts. Although NG Advantage has sought financing from third parties for capital
expenditures, we have provided and may continue to provide financing for these capital expenditures.
We had total indebtedness, consisting of our debt and finance leases, of approximately $39.4 million in principal
amount as of December 31, 2021, of which approximately $13.7 million, $10.0 million, $5.6 million, $1.8 million, and
$8.3 million is expected to become due in 2022, 2023, 2024, 2025, and 2026, respectively. Based on outstanding debt
balances and applicable interest rates as of December 31, 2021, we expect our total interest payment obligations relating
to our indebtedness to be $2.1 million for the year ending December 31, 2022. We plan to and believe we are able to make
all expected principal and interest payments in the next 12 months.
We also have indebtedness, including the amount representing interest, from our operating leases of approximately
$68.2 million as of December 31, 2021, of which approximately $6.1 million, $6.0 million, $6.1 million, $6.0 million,
$5.8 million and $38.0 million is expected to become due in 2022, 2023, 2024, 2025, 2026 and thereafter, respectively.
In addition, in connection with implementing our Zero Now truck financing program, we have entered into agreements
that permit us to incur a material amount of additional debt on a delayed draw basis and obligate us to make interest and
other fee payments that vary in amount depending on the outstanding principal of this debt and certain other factors; none
of this potential debt nor the related interest and other payments are included in the foregoing estimates, other than the
principal amount of $9.5 million drawn as of December 31, 2021. Our ability to draw additional debt under these
agreements expired on January 2, 2022.
We intend to make payments under our various debt instruments when due and pursue opportunities for earlier
repayment and/or refinancing if and when these opportunities arise. Although we believe we have sufficient liquidity and
capital resources to repay our debt coming due in the next 12 months, we may elect to suspend, or limit repurchases under,
our share repurchase program or pursue alternatives, such as refinancing, or debt or equity offerings, to increase our cash
management flexibility.
Sources of Cash
Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations,
including, if available, AFTC and other government credits, grants and incentives, cash provided by financing activities,
51
and sales of assets. As of December 31, 2021, we had total cash and cash equivalents and short-term investments of $229.2
million, compared to $138.5 million as of December 31, 2020.
We expect cash provided by our operating activities to fluctuate depending on our operating results, which can be
affected by the factors described above, as well as the other factors described in this MD&A and Item 1A. “Risk Factors”
of this report.
Subject to the following paragraph, we believe our cash and cash equivalents and short-term investments and
anticipated cash provided by our operating and financing activities will satisfy our business requirements for at least the
12 months following the date of this report. Subsequent to that period, we may need to raise additional capital to fund any
planned or unanticipated capital expenditures, investments, debt repayments, share repurchases or other expenses that we
cannot fund through cash on-hand, cash provided by our operations or other sources. Moreover, we may use our cash
resources faster than we predict due to unexpected expenditures, the effects of COVID-19, or higher-than-expected
expenses, in which case we may need to seek capital from alternative sources sooner than we anticipate. The timing and
necessity of any future capital raise would depend on various factors, including our rate and volume of, and prices for,
natural gas fuel sales and other volume-related activity, the effects of COVID-19, new station construction, debt
repayments (either before or at maturity) and any potential mergers, acquisitions, investments, divestitures or other
strategic relationships we may pursue, as well as the other factors that affect our revenue and expense levels as described
in this MD&A and elsewhere in this report.
If we deploy additional capital to develop ADG RNG production facilities and fueling stations to support contracted
RNG fueling volume, we could be required to raise additional capital.
We may raise additional capital through one or more sources, including, among others, obtaining equity capital,
including through offerings of our common stock or other securities, obtaining new or restructuring existing debt, selling
assets, or any combination of these or other potential sources of capital. We may not 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 our ability
to develop and maintain fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding
indebtedness and may reduce our ability to support and build our business and generate sustained or increased revenue.
Material Cash Requirements
The table below represents our material cash requirements, including the scheduled maturities of our contractual
obligations as of December 31, 2021. This table excludes certain potential cash requirements because they may involve
future cash payments that are considered uncertain and cannot be estimated because they vary based upon future
conditions; however, the exclusion of these obligations should not be construed as an implication that they are immaterial,
as they could significantly affect our short- and long-term liquidity and capital resource needs depending on a variety of
future events, facts and conditions.
Payments Due by Period
Contractual Obligations: (in thousands)
Long-term debt (1)
Finance lease obligations (2)
Operating lease commitments (3)
Long-term take-or-pay contracts (4)
Long-term supply contract (5)
Construction contracts (6)
JV capital contribution commitments (7)
Total
$
Total
40,884 $
3,578
68,173
2,565
1,141
25,433
51,600
Less than
1 year
14,842 $
990
6,148
1,340
1,141
25,433
51,600
1 - 3 years 3 - 5 years
More than
15,844 $
2,198
12,124
1,225
—
—
10,198 $
390
11,868
—
—
—
5 years
—
—
38,033
—
—
—
$ 193,374 $ 101,494 $
31,391 $
22,456 $
38,033
(1) Consists of long-term debt to finance acquisitions and equipment purchases, including future interest payments. For our variable-rate debt (which
consists of the SG Facility, as defined in Note 12), we have assumed an interest rate of 1.4% (LIBOR plus 1.30%) as of December 31, 2021.
52
(2) Consists of finance lease obligations to finance equipment purchases, including future interest payments.
(3) Consists of various space and ground leases for our Boron Plant, office spaces and fueling stations as well as leases for equipment.
(4) Represents our estimates for long-term and quarterly natural gas purchase contracts with a take-or-pay commitment.
(5) Represents our estimates for one long-term natural gas supply contract for our subsidiary NG Advantage, which entered into an arrangement with
bp for the supply, sale and transportation of CNG through February 2022.
(6) Consists of our obligations to fund various fueling station construction projects, net of amounts funded through December 31, 2021 and excluding
contractual commitments related to station sales contracts.
(7) Represents outstanding commitments for the bpJV pursuant to the bpJV Capital Call (see Note 15).
Off-Balance Sheet Arrangements
As of December 31, 2021, we had the following off-balance sheet arrangements that have had, or are reasonably likely
to have, a material current or future effect on our financial condition, 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 $43.4 million;
• One long-term natural gas purchase contract with a take-or-pay commitment, the amount of which is shown under
“Contractual Obligations” above;
• Quarterly fixed price natural gas purchase contracts with take-or-pay commitments, the amount of which is shown
under “Contractual Obligations” above;
• One long-term natural gas sale contract with a fixed supply commitment, the amount of which is shown under
“Contractual Obligations” above, along with a guaranty agreement; and
• One long-term natural gas sale contract with a fixed supply commitment.
We provide surety bonds primarily for construction contracts in the ordinary course of our business, as a form of
guarantee. No liability has been recorded in connection with our surety bonds because, based on historical experience and
available information, we do not believe it is probable that any amounts will be required to be paid under these
arrangements for which we will not be reimbursed.
As of December 31, 2021, we had one long-term natural gas purchase contract with a take-or-pay commitment, which
requires us to purchase minimum volumes of natural gas at index-based prices and expires in June 2022. Additionally, as
of December 31, 2021, we had quarterly fixed-price natural gas purchase contracts with take-or-pay commitments
extending through June 2023.
NG Advantage has entered into an arrangement with bp for the supply, sale and reservation of a specified volume of
CNG transportation capacity until February 2022. In connection with the arrangement, on February 28, 2018, we entered
into a guaranty agreement with NG Advantage and bp, which was amended in June 2020, in which we guarantee NG
Advantage’s payment obligations to the customer in the event of a default by NG Advantage under the supply arrangement,
in an amount up to $15.0 million plus related fees. Our guaranty is in effect until thirty days following our notice to bp of
termination.
In addition, as of December 31, 2021, we have a fixed supply arrangement with UPS for the supply and sale of 170.0
million GGEs of RNG through March 2026.
53
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
In the ordinary course of our business, we are exposed to various market risks, including commodity price risks, risks
related to foreign currency exchange rates, and risks related to fluctuations in interest rates.
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 to market 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 to pass through natural gas price increases to
customers. Natural gas prices and availability are affected by many factors, including, among others, drilling activity,
supply, weather conditions, overall economic conditions and foreign and domestic government regulations.
Natural gas costs represented $94.0 million, $74.6 million, and $111.8 million of our cost of sales in 2019, 2020, and
2021, respectively.
In October 2018, in support of our Zero Now truck financing program, we entered into two commodity swap contracts
with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies and THUSA, for a total of five million
diesel gallons annually from April 1, 2019 to June 30, 2024. These commodity swap contracts are intended to manage
risks related to the diesel-to-natural gas price spread in connection with the natural gas fuel supply commitments we make
in our fueling agreements with fleet operators that participate in the Zero Now truck financing program.
We have prepared a sensitivity analysis to estimate our exposure to price risk with respect to our commodity swap
contracts. If the diesel-to-natural gas price spread were to fluctuate by 10% as of December 31, 2021, we would expect a
corresponding fluctuation in the fair value of our commodity swap contracts of approximately $2.5 million.
Foreign Currency Exchange Rate Risk
For the year ended December 31, 2021, our primary exposure to foreign currency exchange rates relates to our other
Canadian operations that had certain outstanding accounts receivable and accounts payable denominated in the U.S. dollar,
which were not hedged.
We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to our monetary
transactions denominated in a foreign currency. If the exchange rates on these assets and liabilities were to fluctuate by
10% from the rates as of December 31, 2021, we would expect a corresponding fluctuation in the value of the assets and
liabilities of approximately $0.2 million, net.
Interest Rate Risk
As of December 31, 2021, we had $9.5 million of debt that bears interest at a rate equal to LIBOR or the Prime Rate
plus a margin per annum. Thus, our interest expense would fluctuate with a change in LIBOR or the Prime Rate. If these
rates were to increase or decrease by 1% for the year, our annual interest expense would increase or decrease by
approximately $0.1 million.
The SG Credit Agreement permits us to draw loans from time to time through January 2, 2022. These loans are subject
to an interest rate indexed to LIBOR, certain tenors of which were discontinued after 2021 with other tenors being
discontinued after June 2023. We intend to monitor the developments with respect to the discontinuance of LIBOR and
work with our lenders under the credit agreements, including SG, and any other indebtedness with an interest rate tied to
LIBOR to minimize the effect of such a discontinuance on our financial condition and results of operations; however, the
effect of the anticipated discontinuance of LIBOR on us and our debt instruments remains uncertain. If our lenders have
increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt,
which could adversely impact our interest expense, results of operations and cash flows.
54
Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 185)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Financial Statement Schedule
Schedule II—Valuation and Qualifying Accounts
Page
56
59
60
61
62
63
64
112
55
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Clean Energy Fuels Corp.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Clean Energy Fuels Corp. and subsidiaries (the
Company) as of December 31, 2021 and 2020, 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, 2021, and
the related notes and financial statement schedule II (collectively, the consolidated financial statements). We also have
audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each
of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting
principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is
to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal
control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained
in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
56
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate
to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
Fair value of embedded derivatives and commodity swaps
As discussed in Note 8 to the consolidated financial statements, the Company used the income approach to value its
derivative assets and liabilities associated with its embedded derivatives in fueling agreements under its Zero Now truck
financing program and the commodity swap contracts used to manage price risks related to these agreements. As of
December 31, 2021, the Company recorded derivative assets and liabilities related to the embedded derivatives and
commodity swaps of $6,939 thousand and $4,383 thousand, respectively. The Company used a discounted cash flow
model to estimate the fair value of these embedded derivatives and commodity swaps, classified as Level 3 in the fair
value hierarchy because they are valued using unobservable inputs.
We identified the assessment of the measurement of fair value for the embedded derivatives and commodity swaps as a
critical audit matter due to the significant measurement uncertainty associated with the fair value of such instruments.
There was a high degree of subjective auditor judgment in assessing the significant unobservable inputs, such as
commodity forward curves and differentials applied to the commodity forward curves.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of certain internal controls related to the Company’s derivatives process. This included
controls related to the (1) development of the significant unobservable inputs, including monitoring of changes to the
inputs, and (2) relevance and reliability of observable inputs reasonably available. We inspected the underlying fueling
agreements associated with the embedded derivatives, on a sample basis, to evaluate the existence and accuracy of inputs
into the valuation model. We also confirmed directly with the counter-party to the commodity swap contracts and inspected
the commodity swap contracts to evaluate the existence and accuracy of inputs into the valuation model, including
confirming the relevant terms of the commodity swap contracts. We involved financial instrument valuation professionals
with specialized skills and knowledge, who assisted in assessing the fair value of the embedded derivatives and commodity
swaps by developing an estimate of the fair values of the embedded derivatives and commodity swaps using commodity
forward curves and differentials applied to the commodity forward curves obtained from publicly available market data,
and compared the results to the Company’s fair value estimates.
Evaluation of the Company’s accounting analysis associated with the Amazon Warrant
As discussed in Notes 1 and 13 to the consolidated financial statements, the Company entered into an agreement with
certain subsidiaries of Amazon.com, Inc. (Amazon). Pursuant to the agreement, Amazon agreed to purchase a minimum
volume of fuel over a contractual period, and, in exchange, the Company issued warrants to Amazon to purchase shares
of common stock of the Company. Certain of these warrants vested upon consummation of the agreement, which resulted
57
in the Company recognizing an initial charge against revenue of $76.6 million and a customer incentive asset of $38.4
million. The customer incentive asset will be recognized as a charge against revenue as the contractually required minimum
fuel is purchased.
We identified the evaluation of the Company’s accounting for the warrants that immediately vested when issued to
Amazon as a critical audit matter. Complex auditor judgment was required in evaluating the provisions of the agreements
and the application of the relevant accounting guidance to the provisions of the agreements.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of the internal control related to the Company’s evaluation of the accounting for the
warrants issued to Amazon and the application of relevant accounting guidance. We inquired of management on the
business purpose of the transaction. We evaluated the Company’s assessment of the presentation of the warrant expense
as a charge against revenue and the determination of equity classification. We also assessed the timing of the recognition
of customer incentive asset over the minimum volume of contractual fuel by reading the underlying agreement to
understand the relevant terms and conditions of the agreement as well as the rights and features of the warrants. We
determined whether the Company’s assessment of the contractual terms and conditions was in accordance with the relevant
accounting standards.
/s/ KPMG LLP
We have served as the Company’s auditor since 2001.
Irvine, California
February 24, 2022
58
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31,
2020
December 31,
2021
Current assets:
Assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net of allowance of $1,335 and $1,205 as of December 31, 2020 and 2021,
respectively
Other receivables
Inventory
Prepaid expenses and other current assets
Derivative assets, related party
Total current assets
Operating lease right-of-use assets
Land, property and equipment, net
Restricted cash
Notes receivable and other long-term assets, net
Long-term portion of derivative assets, related party
Investments in other entities
Goodwill
Intangible assets, net
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt
Current portion of finance lease obligations
Current portion of operating lease obligations
Accounts payable
Accrued liabilities
Deferred revenue
Derivative liabilities, related party
Total current liabilities
Long-term portion of debt
Long-term portion of finance lease obligations
Long-term portion of operating lease obligations
Long-term portion of derivative liabilities, related party
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, $0.0001 par value. 1,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.0001 par value. 304,000,000 and 454,000,000 shares authorized; 198,491,204 shares
and 222,684,923 shares issued and outstanding as of December 31, 2020 and 2021, respectively
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total Clean Energy Fuels Corp. stockholders’ equity
Noncontrolling interest in subsidiary
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
$
$
108,977
29,528
$
99,448
129,722
87,433
24,447
31,302
37,584
—
409,936
42,537
261,761
7,008
56,189
—
109,811
64,328
5,500
957,070
12,845
846
3,551
24,352
75,159
7,251
1,900
125,904
23,215
2,427
39,431
2,483
8,199
201,659
61,784
23,655
28,100
9,404
1,591
263,039
25,967
290,911
11,000
27,299
4,057
27,962
64,328
464
715,027
3,592
840
2,822
17,310
52,637
2,642
—
79,843
82,088
2,552
23,698
—
3,996
192,177
$
$
—
—
20
1,191,791
(678,096)
(209)
513,506
9,344
522,850
715,027
$
22
1,519,918
(771,242)
(1,622)
747,076
8,335
755,411
957,070
See accompanying notes to consolidated financial statements.
59
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Revenue:
Product revenue
Service revenue
Total revenue
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown
separately below):
Product cost of sales
Service cost of sales
Change in fair value of derivative warrants
Selling, general and administrative
Depreciation and amortization
Total operating expenses
Operating income (loss)
Interest expense
Interest income
Other income, net
Loss from equity method investments
Gain from sale of certain assets of subsidiary
Gain from formation of equity method investment
Income (loss) before income taxes
Income tax expense
Net income (loss)
Loss attributable to noncontrolling interest
Net income (loss) attributable to Clean Energy Fuels Corp.
Net loss attributable to Clean Energy Fuels Corp. per share:
Basic
Diluted
Weighted-average common shares outstanding:
Basic
Diluted
2019
Year Ended December 31,
2020
2021
$
298,469 $
45,596
344,065
251,954 $
39,770
291,724
213,133
42,513
255,646
185,557
26,550
(1,039)
73,444
49,625
334,137
9,928
(7,574)
2,437
1,990
(119)
7,455
—
14,117
(858)
13,259
7,162
20,421 $
161,705
23,705
(40)
68,516
47,682
301,568
(9,844)
(7,348)
1,345
3,025
(161)
1,063
700
(11,220)
(309)
(11,529)
1,665
(9,864) $
189,600
26,004
—
89,906
45,184
350,694
(95,048)
(4,430)
1,082
905
(430)
3,885
—
(94,036)
(119)
(94,155)
1,009
(93,146)
0.10 $
0.10 $
(0.05) $
(0.05) $
(0.44)
(0.44)
$
$
$
204,573,287
205,987,509
200,657,912
200,657,912
213,118,694
213,118,694
See accompanying notes to consolidated financial statements.
60
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Net income (loss)
Other comprehensive
income (loss), net of tax:
Foreign currency
translation adjustments
net of $0 tax in 2019,
2020 and 2021
Unrealized gains on
available-for-sale
securities, net of $0 tax
in 2019, 2020 and 2021
Total other comprehensive
income (loss)
Comprehensive income
(loss)
Year Ended December 31, 2019
Year Ended December 31, 2020
Year Ended December 31, 2021
Clean Energy Noncontrolling
Fuels Corp.
Interest
Total
Clean Energy Noncontrolling
Fuels Corp.
Interest
Total
Clean Energy Noncontrolling
Fuels Corp.
Interest
Total
$
20,421 $
(7,162) $ 13,259 $
(9,864) $
(1,665) $ (11,529) $
(93,146) $
(1,009) $ (94,155)
505
—
505
1,355
—
1,355
(1,394)
—
(1,394)
67
572
—
—
67
572
2
—
2
(19)
—
(19)
1,357
—
1,357
(1,413)
—
(1,413)
$
20,993 $
(7,162) $ 13,831 $
(8,507) $
(1,665) $ (10,172) $
(94,559) $
(1,009) $ (95,568)
See accompanying notes to consolidated financial statements.
61
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
Common stock
Shares
Amount
Additional
Paid-In
Capital
Accumulated Comprehensive
Income (Loss)
Noncontrolling
Interest in
Subsidiary
Total
Stockholders’
Accumulated
Other
Balance, January 1, 2019
Issuance of common stock
Stock-based compensation
Net income (loss)
Other comprehensive income
Increase in ownership in subsidiary
Balance, December 31, 2019
Issuance of common stock
Repurchase of common stock
Stock-based compensation
Net loss
Other comprehensive income
Increase in ownership in subsidiary
Balance, December 31, 2020
Issuance of common stock, net of issuance costs
Repurchase of common stock
Stock-based compensation
Stock-based sales incentive charges
Net loss
Other comprehensive loss
Balance, December 31, 2021
203,599,892 $
1,123,163
—
—
—
—
204,723,055
1,512,535
(7,744,386)
—
—
—
—
198,491,204
24,646,419
(452,700)
—
—
—
—
222,684,923 $
20 $ 1,198,769 $
—
—
—
—
—
20
—
—
—
—
—
—
20
2
—
—
—
—
—
22 $ 1,519,918 $
309
3,880
—
—
228
1,203,186
1,683
(14,647)
2,957
—
—
(1,388)
1,191,791
197,919
(2,916)
14,994
118,130
—
—
Deficit
(688,653) $
—
—
20,421
—
—
(668,232)
—
—
—
(9,864)
—
—
(678,096)
—
—
—
—
(93,146)
—
(771,242) $
(2,138) $
—
—
—
572
—
(1,566)
—
—
—
1,357
—
(209)
—
—
—
—
—
(1,413)
(1,622) $
17,011
—
—
(7,162)
—
(228)
9,621
—
—
(1,665)
—
1,388
9,344
—
—
—
—
(1,009)
—
8,335 $
Equity
525,009
309
3,880
13,259
572
—
543,029
1,683
(14,647)
2,957
(11,529)
1,357
—
522,850
197,921
(2,916)
14,994
118,130
(94,155)
(1,413)
755,411
See accompanying notes to consolidated financial statements.
62
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Year Ended December 31,
2020
2019
2021
$
13,259 $
(11,529) $
(94,155)
Depreciation and amortization
Provision for credit losses and inventory
Stock-based compensation expense
Stock-based sales incentive charges
Change in fair value of derivative instruments
Amortization of discount and debt issuance cost
Loss (gain) on disposal of property and equipment
Loss on extinguishment of debt
Gain from sale of certain assets of subsidiary
Gain from formation of equity method investment
Loss from equity method investments
Non-cash lease expense
Deferred income taxes
Expense reimbursement from JV
Changes in operating assets and liabilities:
Accounts and other receivables
Inventory
Prepaid expenses and other assets
Operating lease liabilities
Accounts payable
Deferred revenue
Accrued liabilities and other
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of short-term investments
Maturities and sales of short-term investments
Purchases of and deposits on property and equipment
Disbursements for loans receivable for RNG production projects
Payments on and proceeds from sales of loans receivable
Cash received from sale of certain assets of subsidiary, net
Investments in other entities
Payment and deposits on equipment and manure rights for RNG production projects
Proceeds from disposal of property and equipment
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Issuance of common stock
Repurchase of common stock
Fees paid for issuance of common stock
Fees paid for debt issuance costs
Proceeds for Adopt-a-Port program
Repayment of proceeds for Adopt-a-Port program
Proceeds from debt instruments
Proceeds from revolving line of credit
Repayments of borrowing under revolving line of credit
Repayments of debt instruments and finance lease obligations
Payments of debt extinguishment costs
Net cash (used in) provided by financing activities
Effect of exchange rates on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
Supplemental disclosure of cash flow information:
Income taxes paid
Interest paid, net of $441, $57 and $0 capitalized, respectively
$
$
$
49,625
2,586
3,880
—
5,545
(728)
(2,536)
—
(7,455)
—
119
3,234
738
—
(63,408)
3,439
(16,617)
(3,786)
9,316
(3,528)
18,596
12,279
(171,080)
180,704
(27,088)
—
608
7,582
—
—
7,772
(1,502)
309
—
—
(123)
—
—
15,294
—
—
(7,795)
—
7,685
136
18,598
34,624
53,222 $
47,682
2,662
2,957
—
(2,175)
(46)
(2,875)
1,249
(1,063)
(700)
161
2,756
120
—
53,784
108
5,275
(3,141)
(9,337)
(10,976)
(13,871)
61,041
(74,292)
101,850
(13,273)
(535)
1,567
4,830
(650)
—
4,673
24,170
1,683
(14,647)
—
(131)
—
—
65,860
—
—
(70,399)
(1,023)
(18,657)
201
66,755
53,222
119,977 $
45,184
1,257
14,994
83,641
3,490
20
1,365
39
(3,885)
—
430
2,945
69
1,640
(24,260)
(5,704)
(10,498)
(3,053)
6,615
4,550
16,614
41,298
(324,170)
223,991
(23,075)
(3,905)
421
887
(78,919)
(5,830)
2,941
(207,659)
204,455
(2,916)
(6,534)
(1,277)
5,815
(360)
4,400
1,450
(1,450)
(50,737)
(14)
152,832
8
(13,521)
119,977
106,456
36 $
6,788 $
8 $
5,622 $
15
3,907
See accompanying notes to consolidated financial statements.
63
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 —Summary of Significant Accounting Policies
The Company and Nature of Business
Clean Energy Fuels Corp., together with its majority and wholly owned subsidiaries (hereinafter collectively referred
to as the “Company,” unless the context or the use of the term indicates or requires otherwise) is engaged in the business
of selling renewable and conventional natural gas as alternative fuels for vehicle fleets and related fueling solutions to its
customers, primarily in the United States and Canada. The Company’s principal business is supplying renewable natural
gas (“RNG”) and conventional natural gas, in the form of compressed natural gas (“CNG”) and liquefied natural gas
(“LNG”), for medium and heavy-duty vehicles and providing operation and maintenance (“O&M”) services for public
and private vehicle fleet customer stations. The Company is also focused on developing, owning, and operating dairy and
other livestock waste RNG projects and supplying RNG (procured from our own projects or from third parties) to its
customers in the heavy and medium-duty commercial transportation sector.
As a comprehensive clean energy solutions provider, the Company also designs and builds, as well as operates and
maintains, public and private vehicle fueling stations in the United States and Canada; sells and services compressors and
other equipment used in RNG production and at fueling stations; transports and sells CNG and LNG via “virtual” natural
gas pipelines and interconnects; sells U.S. federal, state and local government credits it generates by selling RNG as a
vehicle fuel, including Renewable Identification Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel
Standard Phase 2 and credits under the California and the Oregon Low Carbon Fuel Standards (collectively, “LCFS
Credits”); and obtains federal, state and local tax credits, grants and incentives.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, and,
in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state
fairly the Company’s consolidated financial position, results of operations, comprehensive income (loss) and cash flows
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All
intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and
these notes. Actual results could differ from those estimates and may result in material effects on the Company’s operating
results and financial position. Significant estimates made in preparing the accompanying consolidated financial statements
include (but are not limited to) those related to revenue recognition, fair value measurements, goodwill and long-lived
asset valuations and impairment assessments, income tax valuations, stock-based compensation expense and stock-based
sales incentive charges.
Inventory
Inventory 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 net realizable value. The Company evaluates inventory balances for excess quantities and
obsolescence by analyzing estimated demand, inventory on hand, sales levels and other information and reduces inventory
balances to net realizable value for excess and obsolete inventory based on this analysis.
64
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Inventories consisted of the following as of December 31, 2020 and 2021 (in thousands):
Raw materials and spare parts
Total inventory
Derivative Instruments and Hedging Activities
$
$
2020
28,100 $
28,100 $
2021
31,302
31,302
In connection with the Company’s Zero Now truck financing program, the Company entered into commodity swap
contracts in October 2018 intended to manage risks related to the diesel-to-natural gas price spread in connection with the
natural gas fuel supply commitments the Company makes in its fueling agreements with fleet operators that participate in
the Zero Now program. The Company has not designated any derivative instruments as hedges for accounting purposes
and does not enter into such instruments for speculative trading purposes. These derivative instruments are recorded in the
accompanying consolidated balance sheets and are measured as either an asset or liability at fair value with changes in fair
value recognized in earnings. See Note 7 for more information.
Property and Equipment
Property and equipment are recorded at cost. Depreciation and amortization are recognized over the estimated useful
lives of the assets using the straight-line method. The estimated useful lives of depreciable assets are three to twenty years
for LNG liquefaction plant assets, up to ten years for station equipment and LNG trailers, and three to seven years for all
other depreciable assets. Leasehold improvements are amortized over the shorter of their estimated useful lives or related
lease terms. Periodically, the Company receives grant funding to assist in the financing of fueling station construction. The
Company records the grant proceeds as a reduction of the cost of the respective asset. Total grant proceeds received were
approximately $1.6 million, $0.0 million, and $0.5 million for the years ended December 31, 2019, 2020, and 2021,
respectively.
Leases
On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 842, Leases, whereby leases
are classified as either operating leases or finance leases.
At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s
assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company
obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether
the Company has the right to direct the use of the asset. The commencement date of the contract is the date the lessor
makes the underlying asset available for use by the lessee.
Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term and lease
liabilities represent obligations to make lease payments arising from the lease. ROU assets and lease liabilities are
recognized at the commencement date based on the net present value of fixed lease payments over the lease term. ROU
assets also include any initial direct costs and advance lease payments made and exclude lease incentives. Lease liabilities
also include terminal purchase options when deemed reasonably certain to exercise. The Company’s lease term includes
options to extend when it is reasonably certain that it will exercise that option. The Company has elected not to recognize
ROU assets and lease liabilities for short-term leases that have a term of 12 months or less; the Company recognizes lease
expense for these leases on a straight-line basis over the lease term.
65
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As most of the Company’s operating leases do not have an implicit rate that can be readily determined, the Company
uses its secured incremental borrowing rate for the same term as the underlying lease based on information available at
lease commencement. For finance leases, the Company uses the rate implicit in the lease.
The lease classification affects the expense recognition on the consolidated statements of operations. Operating lease
charges are recorded in “Cost of sales, exclusive of depreciation and amortization,” and “Selling, general and
administrative” expense. Finance lease charges are split, whereby depreciation on assets under finance leases is recorded
in “Depreciation and amortization” expense and an implied interest component is recorded in “Interest expense.” The
expense recognition for operating leases and finance leases is substantially consistent with legacy accounting.
Long-Lived Assets
The Company reviews the carrying value of its long-lived assets, including property and equipment and intangible
assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value
of an asset or asset group may not be recoverable. Events that could result in an impairment review include, among others,
a significant decrease in the operating performance of a long-lived asset or asset group or the decision to close a fueling
station. Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset
group to its carrying amount. If the sum of the undiscounted future cash flows exceeds the carrying amount, then no
impairment exists. If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is
performed to determine the amount of impairment, if any, to be recognized. An impairment loss is recognized to the extent
that the carrying amount of the asset or asset group exceeds its fair value. The fair value of the asset or asset group is based
on estimated discounted future cash flows of the asset or asset group using a discount rate commensurate with the related
risk. The estimate of future cash flows requires management to make assumptions and to apply judgment, including
forecasting future sales and expenses and estimating useful lives of the assets. These estimates can be affected by a number
of factors, including, among others, future results, demand, and economic conditions, many of which can be difficult to
predict.
There were no impairments of the Company’s long-lived assets in the years ended December 31, 2019, 2020 and
2021.
Intangible assets with finite useful lives are amortized over their respective estimated useful lives using the straight-
line method. The estimated useful lives of intangible assets with finite useful lives are from one to eight years for customer
relationships, one to twenty years for acquired contracts, two to ten years for trademarks and trade names, and three years
for non-compete agreements.
The Company’s intangible assets as of December 31, 2020 and 2021 were as follows (in thousands):
Customer relationships
Acquired contracts
Trademark and trade names
Non-compete agreements
Total intangible assets
Less accumulated amortization
Net intangible assets
$
2020
5,376 $
4,384
2,700
860
13,320
(12,856)
$
464 $
2021
5,376
9,884
2,700
860
18,820
(13,320)
5,500
Amortization expense for intangible assets was $1.0 million, $0.8 million, and $0.5 million for the years ended
December 31, 2019, 2020, and 2021, respectively.
In 2021, the Company acquired contractual rights to manure feedstock for an anaerobic digester gas (“ADG”) RNG
production project totaling $5.5 million. The acquired manure rights have an initial term of 20 years. Amounts are
66
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
classified and included under “Acquired contracts” in the table above. As of December 31, 2021, the Company paid $1.0
million and accrued $4.5 million, which was included in “Accrued liabilities” in the accompanying consolidated balance
sheets, related to the acquired manure rights. The $4.5 million was excluded from the accompanying consolidated
statements of cash flows as it was a non-cash investing activity. The intangible asset related to manure rights will be
amortized over the contractual term of 20 years using the straight-line method with amortization commencing on the date
of commercial operation of the ADG RNG facility.
Estimated amortization expense subsequent to the year ended December 31, 2021 is expected to be approximately
$0.0 million in 2022, $0.0 million in 2023, $0.3 million in 2024, $0.3 million in 2025, $0.3 million in 2026, and $4.6
million thereafter.
Goodwill
Goodwill represents the excess of costs incurred over the fair value of the net assets of acquired businesses. The
Company assesses its goodwill using either a qualitative or quantitative 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 Company is required to use judgment
when applying the goodwill impairment test, including, among other considerations, the identification of reporting unit(s),
the assessment of qualitative factors, and the estimation of fair value of a reporting unit in the quantitative approach. The
Company determined that it is a single reporting unit for the purpose of goodwill impairment tests. The Company performs
the impairment test annually on October 1, or more frequently if facts and circumstances warrant a review.
The qualitative goodwill assessment includes the potential impact on a reporting unit’s fair value of certain events and
circumstances, including its enterprise value, macroeconomic conditions, industry and market considerations, cost factors,
and other relevant entity-specific events. If it is determined, based upon the qualitative assessment, that it is more likely
than not that the reporting unit’s fair value is less than its carrying amount, then a quantitative impairment test is performed.
The quantitative assessment estimates the reporting unit’s fair value based on its enterprise value plus an assumed
control premium as evidence of fair value. The estimates used to determine the fair value of the reporting unit may change
based on results of operations, macroeconomic conditions, stock price fluctuations, or other factors. Changes in these
estimates could materially affect our assessment of the fair value and goodwill impairment for the reporting unit.
During the years ended December 31, 2019, 2020 and 2021, the Company utilized the quantitative approach and
concluded there were no indicators of impairment to goodwill.
The following table summarizes the activity related to the carrying amount of goodwill (in thousands):
Balance as of December 31, 2019
Balance as of December 31, 2020
Balance as of December 31, 2021
Revenue Recognition
$
$
$
64,328
64,328
64,328
The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in
an amount that reflects the consideration to which it expects to be entitled in exchange for the goods or services. To achieve
that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance
obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance
obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies
the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to
the customer and is the unit of account for revenue recognition.
67
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company is generally the principal in its customer contracts because it has control over the goods and services
prior to them being transferred to the customer, and as such, revenue is recognized on a gross basis. Sales and usage-based
taxes are excluded from revenues. Revenue is recognized net of allowances for returns and any taxes collected from
customers, which are subsequently remitted to governmental authorities.
Volume-Related
The Company’s volume-related revenue primarily consists of sales of RNG and conventional natural gas, in the form
of CNG and LNG, O&M services and RINs and LCFS Credits in addition to Amazon Warrant Charges and changes in
fair value of the Company’s derivative instruments associated with providing fuel to customers under contracts.
Fuel and O&M services are sold pursuant to contractual commitments over defined goods-and-service delivery
periods. These contracts typically include a stand-ready obligation to supply natural gas and/or provide O&M services
daily based on a committed and agreed upon routine maintenance schedule or when and if called upon by the customer.
The Company applies the ‘right to invoice’ practical expedient and recognizes fuel and O&M services revenue in the
amount to which the Company has the right to invoice. The Company has a right to consideration based on the amount of
gasoline gallon equivalents of fuel dispensed by the customer and current pricing conditions, which are typically billed to
the customer on a monthly basis. Since payment terms are less than a year, the Company has elected the practical expedient
which allows it to not assess whether a customer contract has a significant financing component.
Contract modifications are not distinct from the existing contract and are typically renewals of fuel and O&M service
sales. As a result, these modifications are accounted for as if they were part of the existing contract. The effect of a contract
modification on the transaction price is recognized prospectively.
The Company sells RINs and LCFS Credits to third parties that need the credits to comply with federal and state
requirements. Revenue is recognized on these credits when there is an agreement in place to monetize the credits at a
determinable price.
Amazon Warrant Charges (defined in Note 13) are determined based on the grant date fair value of the award and the
associated non-cash stock-based sales incentive charges, which are recorded as a reduction of revenue and are recognized
as the customer purchases fuel and vesting conditions become probable of being achieved. See discussion under “Amazon
Warrant” below and Note 13 for additional information.
The changes in fair value of derivative instruments relate to the Company’s commodity swap and customer fueling
contracts. The contracts are measured at fair value with changes in fair value recorded in the accompanying consolidated
statements of operations in the period incurred. The amounts are classified as revenue because the Company’s commodity
swap contracts are used to economically offset the risk associated with the diesel-to-natural gas price spread resulting from
existing and anticipated customer fueling contracts under the Company’s Zero Now truck financing program. See Note 7
for more information about these derivative instruments. For the years ended December 31, 2019, 2020 and 2021, changes
in the fair value of commodity swaps and customer contracts amounted to a gain (loss) of $(6.6) million, $2.1 million, and
$(3.5) million, respectively.
Station Construction Sales
Station construction contracts are generally short-term, except for certain larger and more complex stations, which
can take up to 24 months to complete. For most of the Company’s station construction contracts, the customer contracts
with the Company to provide a significant service of integrating a complex set of tasks and components into a single
station. Hence, the entire contract is accounted for as one performance obligation.
68
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company recognizes revenue over time as the Company performs under its station construction contracts because
of the continual transfer of control of the goods to the customer, who typically controls the work in process. Revenue is
recognized based on the extent of progress towards completion of the performance obligation and is recorded
proportionally as costs are incurred. Costs to fulfill the Company’s obligations under these contracts typically include
labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs.
Refinements of estimates to account for changing conditions and new developments are continuous and characteristic
of the process. Many factors that can affect contract profitability may change during the performance period of the contract,
including differing site conditions, the availability of skilled contract labor, the performance of major suppliers and
subcontractors, and unexpected changes in material costs. Because a significant change in one or more of these estimates
could affect the profitability of these contracts, the contract price and cost estimates are reviewed periodically as work
progresses and adjustments proportionate to the cost-to-cost measure of progress are reflected in contract revenues in the
reporting period when such estimates are revised. Provisions for estimated losses on uncompleted contracts are recorded
in the period in which the losses become known.
Contract modifications are typically expansions in scope of an existing station construction project. As a result, these
modifications are accounted for as if they were part of the existing contract. The effect of a contract modification on the
transaction price and the Company’s measure of progress for the performance obligation to which it relates is recognized
as an adjustment to revenue (either as an increase or a reduction) on a cumulative catch-up basis.
Under the typical payment terms of the Company’s station construction contracts, the customer makes either
performance-based payments (“PBPs”) or progress payments. PBPs are interim payments of the contract price based on
quantifiable measures of performance or the achievement of specified events or milestones. Progress payments are interim
payments of costs incurred as the work progresses. For some of these contracts, the Company may be entitled to receive
an advance payment. The advance payment typically is not considered a significant financing component because it is
used to meet working capital demands that can be higher in the early stages of a construction contract and to protect the
Company if the customer fails to adequately complete some or all of its obligations under the contract. In addition, the
customer retains a small portion of the contract price until completion of the contract. Such retained portion of the contract
price is not considered a significant financing component because the intent is to protect the customer.
In certain contracts with its customers, the Company agrees to provide multiple goods or services, including
construction of and sale of a station, O&M services, and sale of fuel to the customer. These contracts have multiple
performance obligations because the promise to transfer each separate good or service is separately identifiable and is
distinct. This evaluation requires significant judgment and the decision to combine a group of contracts or separate the
combined or single contract into multiple performance obligations could change the amount of revenue recognized in one
or more periods.
The Company allocates the contract price to each performance obligation using best estimates of the standalone selling
price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price for
fuel and O&M services is observable standalone sales, and the primary method used to estimate the standalone selling
price for station construction sales is the expected cost plus a margin approach because the Company sells customized
customer-specific solutions. Under this approach, the Company forecasts expected costs of satisfying a performance
obligation and then adds an appropriate margin for the good or service.
AFTC
See discussion under “Alternative Fuel Tax Credit” below for more information about AFTC, which is not recognized
as revenue until the period the credit is authorized through federal legislation.
69
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other
The majority of other revenue is from sales of used natural gas heavy-duty trucks purchased by the Company. Revenue
on these contracts is recognized at the point in time when the customer accepts delivery of the truck.
Alternative Fuel Tax Credit
Under separate pieces of U.S. federal legislation, the Company has been eligible to receive a federal alternative fuels
tax credit (“AFTC”) for its natural gas vehicle fuel sales made between October 1, 2006 and December 31, 2021. The
AFTC, which had previously expired on December 31, 2016, was reinstated on February 9, 2018 to apply retroactively to
vehicle fuel sales made from January 1, 2017 through December 31, 2017. On December 20, 2019, AFTC was
retroactively extended beginning January 1, 2018 through December 31, 2020 and subsequently extended for vehicle fuel
sales made through December 31, 2021.
As a result of the legislation authorizing AFTC being signed into law on December 20, 2019, all AFTC revenue for
vehicle fuel the Company sold in the 2018 and 2019 calendar years, totaling $47.1 million, was recognized during the year
ended December 31, 2019. AFTC was extended in December 2020 and is currently available for vehicle fuel sales made
through December 31, 2021. The AFTC credit is equal to $0.50 per gasoline gallon equivalent of CNG that the Company
sold as vehicle fuel, and $0.50 per diesel gallon of LNG that the Company sold as vehicle fuel in 2019, 2020 and 2021.
Based on the service relationship with its customers, either the Company or its customer claims the credit. The
Company records its AFTC credits, if any, as revenue in its consolidated statements of operations because the credits are
fully payable to the Company and do not offset income tax liabilities. As such, the credits are not deemed income tax
credits under the accounting guidance applicable to income taxes.
LNG Transportation Costs
The Company records the costs incurred to transport LNG to its customers in “Product cost of sales” in the
accompanying consolidated statements of operations.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs were $1.2 million, $0.0 million and $0.0 million for
the years ended December 31, 2019, 2020 and 2021, respectively.
Stock-Based Compensation
The Company recognizes compensation expense for all stock‑based payment arrangements over the requisite service
period of the award and recognizes forfeitures as they occur. For stock options, the Company determines the grant date
fair value using the Black‑Scholes option pricing model, which requires the input of certain assumptions, including the
expected life of the stock‑based payment award, stock price volatility and risk‑free interest rate. For restricted stock units,
the Company determines the grant date fair value based on the closing market price of its common stock on the date of
grant.
Amazon Warrant
The Amazon Warrant (as defined in Note 13) is accounted for as an equity instrument and measured in accordance
with Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation. To determine the fair value
of the Amazon Warrant, the Company used the Black-Scholes option pricing model, which is based in part on assumptions
that require management to use judgment. For awards granted to a customer, which are not in exchange for distinct goods
or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of
70
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
the transaction price in accordance with ASC 606, Revenue from Contracts with Customers. Based on the fair value of the
award, the Company determines the amount of non-cash stock-based sales incentive charges on the customer’s pro-rata
achievement of vesting conditions, which is recorded as a reduction of revenue in the consolidated statements of
operations.
Income Taxes
Income taxes are computed using the asset and liability method. Under this method, deferred income taxes are
recognized by applying enacted statutory tax rates applicable to future years to differences between the tax bases and
financial carrying amounts of existing assets and liabilities. The impact on deferred taxes of 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
consolidated financial statements in the period of enactment. Valuation allowances are established when management
determines it is more likely than not that deferred tax assets will not be realized. When evaluating the need for a valuation
analysis, we use estimates involving a high degree of judgment including projected future US GAAP 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 or expected 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 taxing authorities 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 percent
likelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties
related to unrecognized tax benefit in income tax expense.
The Company operates within multiple domestic and foreign taxing jurisdictions and is subject to audit in these
jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. Although
the Company believes that adequate consideration has been given to these issues, it is possible that the ultimate resolution
of these issues could be significantly different from originally estimated.
Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Clean Energy Fuels
Corp. by the weighted-average number of common shares outstanding and common shares issuable for little or no cash
consideration during the period. Diluted net income (loss) per share is computed by dividing the net income (loss)
attributable to Clean Energy Fuels Corp. by the weighted-average number of common shares outstanding and common
shares issuable for little or no cash consideration during the period and potentially dilutive securities outstanding during
the period, and therefore reflects the dilution from common shares that may be issued upon exercise or conversion of these
potentially dilutive securities, such as stock options, warrants, convertible notes and restricted stock units. The dilutive
effect of stock awards and warrants is computed under the treasury stock method. The dilutive effect of convertible notes
and restricted stock units is computed under the if-converted method. Potentially dilutive securities are excluded from the
computations of diluted net income (loss) per share if their effect would be antidilutive.
Foreign Currency Translation and Transactions
The Company uses the local currency as the functional currency of its foreign subsidiary and equity method
investment. Accordingly, all assets and liabilities outside the United States are translated 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 exchange
rates 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 records the changes in the exchange rate for these transactions in its consolidated
71
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
statements of operations. For each of the years ended December 31, 2019, 2020 and 2021, foreign exchange transaction
gains and (losses) were included in “Other income (expense), net” in the accompanying consolidated statements of
operations and were $0.0 million.
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as the change in equity (net assets) of a business enterprise during the period
from transactions and other events and circumstances from non-owner sources. The difference between net income (loss)
and comprehensive income (loss) for the years ended December 31, 2019, 2020 and 2021 was comprised of the Company’s
foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities.
Concentration of Credit Risk
Credit is extended to all customers based on financial condition, and collateral is generally not required.
Concentrations of credit risk with respect to trade receivables are limited because of the large number of customers
comprising the Company’s customer base and dispersion across many different industries and geographies. Certain
international customers, however, have historically been slower to pay on trade receivables. Accordingly, the Company
continually monitors collections and payments from its customers and maintains a provision for estimated credit losses
based upon its historical experience and any specific customer collection issues that it has identified. Although credit losses
have historically been within the 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 in the past.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for
Income Taxes. This new standard clarifies and simplifies the accounting for income taxes, including guidance related to
intraperiod tax allocation, the recognition of deferred tax liabilities for outside basis differences, the methodology for
calculating income taxes in an interim period, and the application of income tax guidance to franchise taxes that are
partially based on income. This standard is effective for fiscal years, and interim periods within those years, beginning
after December 15, 2020, with early adoption permitted in any interim period within that year. The Company adopted this
standard in the first quarter of 2021. The adoption of this ASU did not have a material impact on its consolidated financial
statements and related disclosures.
Recently Issued Accounting Pronouncements
In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors–Certain Leases with Variable Lease
Payments. This new accounting amendment requires a lessor to classify leases with variable lease payments that do not
depend on an index or rate as operating leases on the commencement date if classification as a sales-type or direct financing
lease would result in a day-one loss. The amendment in this update is effective for fiscal years, and interim periods within
those years, beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the
impact of adopting this new accounting amendment and does not expect the update to have a material impact on its
consolidated financial statements and related disclosures.
In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business
Entities about Government Assistance, which requires business entities (except for not-for-profit entities and employee
benefit plans) to disclose information about certain government assistance they receive. The Topic 832 disclosure
requirements include: (i) the nature of the transactions and the related accounting policy used; (ii) the line items on the
balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and
(iii) significant terms and conditions of the transactions. The ASU is effective for fiscal years beginning after December
72
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this new ASU and
does not expect the update to have a material impact on its consolidated financial statements and related disclosures.
Note 2 —Revenue from Contracts with Customers
Disaggregation of Revenue
The table below presents the Company’s revenue disaggregated by revenue source (in thousands):
Years Ended December 31,
2020
2021
2019
Volume-related (1) (2)
Station construction sales
AFTC (3)
Other
Total revenue
$ 273,535 $ 245,300 $ 218,540
16,406
20,700
—
$ 344,065 $ 291,724 $ 255,646
23,120
47,123
287
26,593
19,831
—
(1) Includes changes in fair value of derivative instruments related to the Company’s commodity swap and customer fueling contracts. See Note 1 and
Note 7 for more information about these derivative instruments. For the years ended December 31, 2019, 2020 and 2021, changes in the fair value
of commodity swaps and customer fueling contracts amounted to a loss of $6.6 million, a gain of $2.1 million, and a loss of $3.5 million,
respectively.
(2) Includes non-cash stock-based sales incentive contra-revenue charges associated with the Amazon Warrant for the years ended December 31, 2019,
2020 and 2021 of $0.0 million, $0.0 million and $83.6 million, respectively. See Note 13 for more information.
(3) Represents the federal alternative fuel excise tax credit that we refer to as “AFTC,” which was extended for vehicle fuel sales made beginning
January 1, 2021 through December 31, 2021.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price of customer orders for which the work has not
been performed. As of December 31, 2021, the aggregate amount of the transaction price allocated to remaining
performance obligations was $19.8 million, which related to the Company’s station construction sale contracts. The
Company expects to recognize revenue on the remaining performance obligations under these contracts over the next 12
to 24 months.
For volume-related revenue, the Company has elected to apply an optional exemption, which waives the requirement
to disclose the remaining performance obligation for revenue recognized through the ‘right to invoice’ practical expedient.
Costs to Fulfill a Contract
The Company capitalizes costs incurred to fulfill its contracts that (1) relate directly to the contract, (2) are expected
to generate resources that will be used to satisfy the Company’s performance obligations under the contract, and (3) are
expected to be recovered through revenue generated under the contract. Contract fulfillment costs are recorded to
depreciation expense as the Company satisfies its performance obligations over the term of the contract. These costs
primarily relate to set-up and other direct installation costs incurred by NG Advantage, LLC (“NG Advantage”), for
equipment that must be installed on customers’ land before NG Advantage is able to deliver CNG to the customer because
the customer does not have direct access to the natural gas pipelines. These costs are classified in “Land, property, and
equipment, net” in the accompanying consolidated balance sheets. As of December 31, 2020 and 2021, these capitalized
costs incurred to fulfill contracts were $10.4 million and $10.1 million with accumulated depreciation of $7.1 million and
$7.6 million, respectively, and related depreciation expense of $0.8 million and $0.5 million for the years ended December
31, 2020 and 2021, respectively.
73
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled
receivables (contract assets), and customer advances and deposits (contract liabilities) in the accompanying consolidated
balance sheets. Changes in the contract asset and liability balances during the year ended December 31, 2021, were not
materially affected by any factors outside the normal course of business.
As of December 31, 2020 and 2021, the Company’s contract balances were as follows (in thousands):
Accounts receivable, net
Contract assets - current
Contract assets - non-current
Contract assets - total
Contract liabilities - current
Contract liabilities - non-current
Contract liabilities - total
Accounts Receivable, Net
2020
2021
$
61,784 $
87,433
$
$
$
$
729 $
3,998
4,727 $
1,638 $
59
1,697 $
966
3,532
4,498
5,523
—
5,523
“Accounts receivable, net” in the accompanying consolidated balance sheets include amounts billed and currently due
from customers. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance
to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment
of customer creditworthiness, historical payment experience, the age of outstanding receivables, and economic conditions
that may affect a customer’s ability to pay.
Contract Assets
Contract assets include unbilled amounts typically resulting from the Company’s station construction sale contracts,
when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the
customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable
value. Contract assets are classified as current or noncurrent based on the timing of billings. The current portion is included
in “Prepaid expenses and other current assets” and the noncurrent portion is included in “Notes receivable and other long-
term assets, net” in the accompanying consolidated balance sheets.
Contract Liabilities
Contract liabilities consist of billings in excess of revenue recognized from the Company’s station construction sale
contracts and payments received primarily from customers of NG Advantage in advance of the performance obligations
and are classified as current or noncurrent based on when the revenue is expected to be recognized. The current portion
and noncurrent portion of contract liabilities are included in “Deferred revenue” and “Other long-term liabilities,”
respectively, in the accompanying consolidated balance sheets. Billings in excess of revenue recognized of $1.0 million
and $5.4 million and advance payments of $0.6 million and $0.1 million are classified as current as of December 31, 2020
and 2021, respectively.
Revenue recognized during the year ended December 31, 2020 related to the Company’s contract liability balances
as of December 31, 2019 was $4.8 million. The increase in the contract liability balances for the year ended December 31,
74
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2021 was primarily driven by billings in excess of revenue recognized, offset by $1.5 million of revenue recognized related
to the Company’s contract liability balances as of December 31, 2020.
Note 3 —Divestitures
bp Transaction
On February 27, 2017, Clean Energy Renewable Fuels (“Renewables”) entered into an asset purchase agreement
(the “APA”) with BP Products North America (“bp”). Pursuant to the APA, Renewables agreed to sell to bp its assets
relating to its RNG production business (the “bp Transaction”), consisting of Renewables’ two RNG production facilities,
Renewables’ interest in joint ventures formed with a third-party to develop new RNG production facilities, and
Renewables’ third-party RNG supply contracts (the “Assets”).
Under the APA, bp was required, following the closing of the bp Transaction, to pay Renewables up to an additional
$25.0 million in cash over a five-year period if certain conditions relating to the Assets are met. In February 2018, the
Company received $0.9 million in cash for its satisfaction of the performance criteria for the first period under the APA,
which ended on December 31, 2017. Upon its receipt of such cash, the Company paid $0.1 million in cash and issued
15,877 shares of the Company’s common stock with a fair value of $0.0 million to former holders of options to purchase
membership units in Renewables. The performance criteria for the second period under the APA, which ended on
December 31, 2018, was also satisfied, and the Company received a cash payment of $5.4 million in March 2019. During
the year ended December 31, 2019, after receipt of the cash payment, the Company paid $0.6 million in cash to former
holders of options to purchase membership units in Renewables. In December 2019, the Company and bp entered into an
Amendment to the APA (“Amended APA”) which amended the earn-out for years four and five and paid the Company an
additional $2.8 million for year three of the earn-out period. As a result of the performance criteria for year three under
the APA being satisfied, and the additional $2.8 million received by the Company in December 2019 in accordance with
the Amended APA, the Company recognized a gross gain of $8.4 million and accrued amounts due to former holders of
options to purchase membership units in Renewables of $0.9 million as of December 31, 2019. During the year ended
December 31, 2020, the Company recognized a gross gain of $1.0 million and accrued amounts due to former holders of
options to purchase membership units in Renewables of $0.1 million as a result of the performance criteria being satisfied
for year four under the Amended APA. During the year ended December 31, 2021, the Company recognized a gross gain
of $4.4 million and accrued amounts due to former holders of options to purchase membership units in Renewables of
$0.5 million as a result of the performance criteria being satisfied for year five under the Amended APA, representing the
final earn-out payment under the Amended APA. The Company recognized a net gain of $7.5 million, $1.1 million, and
$3.9 million during the years ended December 31, 2019, 2020 and 2021, respectively, which is included in “Gain from
sale of certain assets of subsidiary” in the accompanying consolidated statements of operations.
As of December 31, 2021, the Company has paid $10.3 million in cash and issued 770,269 shares of the Company’s
common stock with a fair value of $2.0 million to former holders of options to purchase membership units in Renewables.
Following the completion of the bp Transaction, Renewables and the Company continue to procure RNG from bp
under a long-term supply contract (the “bp Supply Agreement”) and from other RNG suppliers and resell such RNG
through the Company’s fueling infrastructure. On October 1, 2018, Renewables and bp amended the bp Supply Agreement
to extend the term and add additional RNG supply. bp and Renewables share in the RINs and LCFS Credits generated
from the increased RNG supply sold through the Company’s vehicle fueling infrastructure and to other customers. See
Note 1 for information on revenue recognition of these credits.
SAFE&CEC S.r.l.
On November 26, 2017, the Company, through its former subsidiary, IMW Industries Ltd. (formerly known as Clean
Energy Compression Corp.) (“CEC”), entered into an investment agreement with Landi Renzo S.p.A. (“LR”), an
alternative fuels company based in Italy. Pursuant to the investment agreement, the Company and LR agreed to combine
75
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
their respective natural gas compressor fueling systems manufacturing subsidiaries, CEC and SAFE S.p.A, in a new
company, “SAFE&CEC S.r.l.” (such combination transaction is referred to as the “CEC Combination”). SAFE&CEC
S.r.l. is focused on manufacturing, selling and servicing natural gas fueling compressors and related equipment for the
global natural gas fueling market. At the closing of the CEC Combination on December 29, 2017, the Company owns 49%
of SAFE&CEC S.r.l. and LR owns 51% of SAFE&CEC S.r.l.
The Company accounts for its interest in SAFE&CEC S.r.l. using the equity method of accounting because the
Company does not control but has the ability to exercise significant influence over SAFE&CEC S.r.l.’s operations. The
Company recorded income (loss) from this investment of $0.0 million, $(0.2) million and $0.6 million for the years ended
December 31, 2019, 2020 and 2021, respectively. The Company had an investment balance in SAFE&CEC S.r.l. of $24.7
million and $23.9 million as of December 31, 2020 and 2021, respectively.
Note 4 —Investments in Other Entities and Noncontrolling Interest in a Subsidiary
TotalEnergies Joint Venture
On March 3, 2021, the Company entered an agreement (“TotalEnergies JV Agreement”) with TotalEnergies S.E.
(“TotalEnergies”) that created a 50/50 joint venture (“TotalEnergies JV”) to develop ADG RNG production facilities in
the United States. Each ADG RNG production facility project under the TotalEnergies JV will be formed as a separate
limited liability company (“LLC”) that is owned 50/50 by the Company and TotalEnergies, and contributions to such
LLCs count toward the TotalEnergies JV Equity Obligations (as defined below). The TotalEnergies JV Agreement
contemplates that the TotalEnergies JV will invest up to $400.0 million of equity in production projects, and TotalEnergies
and the Company each committed to initially provide $50.0 million for the TotalEnergies JV (the “TotalEnergies JV Equity
Obligations”). To fund the Company’s TotalEnergies JV Equity Obligations, the Company had the option to borrow $20.0
million from Société Générale, a company incorporated as a société anonyme under the laws of France (“SG”), pursuant
to the Credit Agreement (defined in Note 12). On October 12, 2021, TotalEnergies and the Company executed a LLC
agreement (the “DR Development Agreement”) for an ADG RNG production facility project (the “DR JV”). Under the
DR Development Agreement, TotalEnergies and the Company have each committed to contribute $7.0 million to the DR
JV. On November 1, 2021, TotalEnergies and the Company have each contributed an initial $4.8 million to the DR JV.
Assets related to the DR JV were deconsolidated from the Company as of October 12, 2021. No gain or loss was recognized
from the transaction. The Company accounts for its interest in the LLCs using the equity method of accounting because
the Company does not control but has the ability to exercise significant influence over the LLCs’ operations. The Company
recorded a loss of $0.1 million from the TotalEnergies JV for the year ended December 31, 2021, related to formation
expenses. As of December 31, 2021, the Company had an investment balance in the TotalEnergies JV of $4.7 million.
76
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table presents combined summarized financial information for the TotalEnergies JV (in thousands):
Revenue
Gross profit
Operating loss
Net loss
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
bp Joint Venture
Year Ended
December 31,
2021
$
$
$
$
—
—
(119)
(119)
As of December 31,
2021
$
$
$
$
3,086
13,103
16,189
6,770
—
6,770
On April 13, 2021, the Company entered an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture
(“bpJV”) to develop, own and operate new ADG RNG production facilities in the United States. Pursuant to the bp JV
Agreement, bp and the Company committed to provide $50.0 million and $30.0 million, respectively, with bp and the
Company each receiving 30.0 million of Class A Units in the bpJV and bp also receiving 20.0 million of Class B Units in
the bpJV. bp’s initial $50.0 million contribution was made on April 13, 2021 and consisted of all unpaid principal
outstanding under the loan agreement dated December 18, 2020, pursuant to which bp advanced $50.0 million to the
Company to fund capital costs and expenses incurred prior to formation of the bpJV, including capital costs and expenses
for permitting, engineering, equipment, leases and feed stock rights. 100% of the RNG produced from the projects
developed and owned by the bpJV will be provided to the vehicle fuels market pursuant to the Company’s marketing
agreement with bp.
Pursuant to the bp JV Agreement, the Company had the option, exercisable prior to August 31, 2021 (the “bp Option”),
to commit an additional $20.0 million to the bpJV upon which bp’s Class B Units would convert into Class A Units. On
June 21, 2021, the Company contributed $50.2 million to the bpJV, which consisted of (i) its initial contribution
commitment of $30.0 million, (ii) the $20.0 million additional contribution to effect the conversion of bp’s Class B Units
into Class A Units pursuant to the Company’s exercise of the bp Option, and (iii) $0.2 million for interest on bp’s Class B
Units to acquire additional Class A Units. In December 2021, the bpJV authorized a capital call (the “bpJV Capital Call”)
for additional funding of $143.2 million, requiring bp and the Company each to contribute $71.6 million. As of December
31, 2021, bp and the Company have contributed $71.6 million and $20.0 million, respectively, to the bpJV in connection
with the bpJV Capital Call. The remaining contribution balance of $51.6 million due from the Company will be paid on
or prior to June 30, 2022. As of December 31, 2021, the Company and bp each own 50% of the bp JV.
The Company accounts for its interest in the bpJV using the equity method of accounting because the Company does
not control but has the ability to exercise significant influence over the bpJV’s operations. The Company recorded a loss
of $0.4 million from this investment for the year ended December 31, 2021, related to formation expenses. The Company
had an investment balance in the bpJV of $69.8 million as of December 31, 2021.
77
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Combined summarized financial information for the bpJV is as follows (in thousands):
Revenue
Gross profit
Operating loss
Net loss
Net loss attributable to bpJV
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Equity attributable to shareowners of bpJV
Equity attributable to noncontrolling interest
Total equity
SAFE&CEC S.r.l.
Year Ended
December 31,
2021
$
$
$
$
$
—
—
(678)
(603)
(599)
As of December 31,
$
$
$
$
$
$
2021
152,072
70,433
222,505
24,932
1,000
25,932
191,170
5,403
196,573
On December 29, 2017, the Company obtained a 49% ownership interest in SAFE&CEC S.r.l. See Note 3 for more
information.
Summarized financial information for SAFE&CEC S.r.l. is as follows (in thousands):
Revenue
Gross profit
Operating income
Net income (loss)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
$
$
$
$
78
Year Ended December 31,
2020
89,535 $ 109,119
25,784
19,008 $
4,728
609 $
2,392
(306) $
2019
80,886 $
20,525 $
1,207 $
93 $
2021
$
As of December 31,
2021
2020
75,137
60,406 $
56,052
58,140
$ 118,546 $ 131,189
$
$
55,780 $
11,808
67,588 $
58,910
21,730
80,640
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other Equity Method Investments
The Company had an investment balance in other equity method investments of $2.3 million and $3.5 million as of
December 31, 2020 and 2021, respectively. The Company recorded income (loss) from other equity method investments
of $(0.1) million, $0.1 million, and $(0.6) million for the years ended December 31, 2019, 2020 and 2021, respectively.
The Company accounts for its interest using the equity method of accounting because the Company does not control but
has the ability to exercise significant influence over the investees’ operations.
Combined summarized financial information for the Company’s other equity method investments is as follows (in
thousands):
Revenue
Gross profit
Operating loss
Net loss
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NG Advantage
Year Ended December 31,
2020
2021
2019
$
$
$
$
546 $
178 $
(214) $
(250) $
463 $
155 $
(90) $
(126) $
704
216
(1,757)
(1,793)
As of December 31,
2020
2021
$
$
$
$
1,233 $
5,553
6,786 $
1,421 $
66
1,487 $
1,349
7,047
8,396
1,012
192
1,204
On October 14, 2014, the Company entered into a Common Unit Purchase Agreement (“UPA”) with NG Advantage
for a 53.3% controlling interest in NG Advantage. NG Advantage is engaged in the business of transporting CNG in high-
capacity trailers to industrial and institutional energy users, such as hospitals, food processors, manufacturers and paper
mills that do not have direct access to natural gas pipelines.
In connection with the arrangement between NG Advantage and bp for the supply, sale and reservation of a specified
volume of CNG transportation capacity until February 2022, on February 28, 2018, the Company entered into a guaranty
agreement with NG Advantage and bp pursuant to which the Company guarantees NG Advantage’s payment obligations
to bp in the event of default by NG Advantage under the supply arrangement, in an amount up to an aggregate of $30.0
million plus related fees which was reduced to $15.0 million effective June 24, 2020. As initial consideration for the
guaranty agreement, NG Advantage issued to the Company 19,660 common units, which increased the Company’s
controlling interest in NG Advantage from 53.3% to 53.5%.
On October 1, 2018, the Company purchased 1,000,001 common units from NG Advantage for an aggregate cash
purchase price of $5.0 million. This purchase increased Clean Energy’s controlling interest in NG Advantage from 53.5%
to 61.7%.
In each month from November 2018 through February 2019, the Company was issued 100,000 additional common
units of NG Advantage, for a total of 400,000 common units, pursuant to the guaranty agreement entered in February
2018. The issuance of 400,000 additional common units increased the Company’s controlling interest in NG Advantage
to 64.6%.
79
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During the year ended December 31, 2019, the Company agreed to lend NG Advantage up to $26.7 million under a
series of promissory notes that were incorporated into a delayed draw convertible promissory note (the “November 2019
Convertible Note”). In connection with the promissory notes between NG Advantage and the Company, NG Advantage
issued to the Company warrants to purchase 2,086,879 common units. On February 6, 2020, the Company converted the
outstanding principal and accrued interest under the November 2019 Convertible Note into common units of NG
Advantage, resulting in an increase in the Company’s controlling interest in NG Advantage from 64.6% to 93.2%.
On February 29, 2020, NG Advantage issued to the Company 283,019 common units of NG Advantage pursuant to
the guaranty agreement entered in February 2018, which increased the Company’s controlling interest in NG Advantage
to 93.3% as of December 31, 2020.
During the year ended December 31, 2021, NG Advantage borrowed $5.0 million from the Company under a series
of advance agreements. As of December 31, 2021, NG advantage had an outstanding balance of $18.4 million, plus accrued
and unpaid interest under the advance agreements. This intercompany transaction has been eliminated in consolidation.
The Company recorded a loss attributable to the noncontrolling interest in NG Advantage of $7.2 million, $1.7 million,
and $1.0 million for the years ended December 31, 2019, 2020 and 2021, respectively. The noncontrolling interest was
$9.3 million and $8.3 million as of December 31, 2020 and 2021, respectively.
Investments in Equity Securities
For investments in equity securities of privately held entities without readily determinable fair values, the Company
measures such investments at cost, adjusted for impairment, if any, and observable price changes in orderly transactions
for the identical or similar investment of the same issuer. As of December 31, 2021, the Company had investment balance
recorded at cost of $8.0 million. The Company did not recognize any adjustments to the recorded cost basis during the
year ended December 31, 2021.
Note 5 —Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash as of December 31, 2020 and 2021 consisted of the following (in
thousands):
Current assets:
Cash and cash equivalents
Total cash and cash equivalents
Long-term assets:
Restricted cash - standby letters of credit
Restricted cash - held as collateral
Total restricted cash
2020
2021
$
$
108,977 $
108,977 $
99,448
99,448
$
$
4,000 $
7,000
11,000 $
—
7,008
7,008
Total cash, cash equivalents and restricted cash
$
119,977 $
106,456
The Company considers all highly liquid investments with maturities of three months or less on the date of acquisition
to be cash equivalents.
The Company places its cash and cash equivalents with high credit quality financial institutions. At times, such
investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) and Canadian Deposit Insurance
Corporation (“CDIC”) limits. Financial instruments that potentially subject the Company to concentrations of credit risk
80
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
consist principally of cash deposits. The amounts in excess of FDIC and CDIC limits were approximately $107.6 million
and $98.0 million as of December 31, 2020 and 2021, respectively.
The 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 current asset. Otherwise, the restricted cash is classified as long-term. Long-term restricted
cash consisted of cash held as collateral for the benefit of a lender to NG Advantage.
Note 6 — Short-Term Investments
Short-term investments include available-for-sale debt securities and certificates of deposit. Available-for-sale debt
securities are carried at fair value, inclusive of unrealized gains and losses. Unrealized gains and losses on available for
sale debt securities are recognized in other comprehensive income (loss), net of applicable income taxes. Gains or losses
on sales of available-for-sale debt securities are recognized on the specific identification basis.
The Company reviews available-for-sale debt securities for declines in fair value below their cost basis each quarter
and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable, and
evaluates the current expected credit loss. This evaluation is based on a number of factors, including historical experience,
market data, issuer-specific factors, economic conditions, and any changes to the credit rating of the security. As of
December 31, 2021, the Company has not recorded a credit loss related to available-for-sale debt securities and believes
the carrying values for its available-for-sale debt securities are properly recorded.
Short-term investments as of December 31, 2020 consisted of the following (in thousands):
Municipal bonds and notes
Certificates of deposit
Total short-term investments
Gross
Unrealized
Amortized
Cost
28,998 $
530
29,528 $
Estimated
Gain (Loss) Fair Value
28,998
— $
530
—
29,528
— $
$
$
Short-term investments as of December 31, 2021 consisted of the following (in thousands):
Amortized
Cost
Gross
Unrealized
Loss
Municipal bonds and notes
Zero coupon bonds
Certificates of deposit
Total short-term investments
$
6,001 $
123,210
530
129,741 $
$
Note 7 - Derivative Instruments and Hedging Activities
Estimated
Fair Value
6,000
123,192
530
129,722
(1) $
(18)
—
(19) $
In October 2018, the Company executed two commodity swap contracts with TotalEnergies Gas & Power North
America, an affiliate of TotalEnergies and THUSA (as defined in Notes 12), for a total of 5.0 million diesel gallons
annually from April 1, 2019 to June 30, 2024. These commodity swap contracts are used to manage diesel price fluctuation
risks related to the natural gas fuel supply commitments the Company makes in its fueling agreements with fleet operators
that participate in the Zero Now truck financing program. These contracts are not designated as accounting hedges and as
a result, changes in the fair value of these derivative instruments are recognized in "Product revenue" in the accompanying
consolidated statements of operations.
The Company has entered into fueling agreements with fleet operators under the Zero Now truck financing program.
The fueling agreements contain a pricing feature indexed to diesel, which the Company determined to be embedded
81
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
derivatives and recorded at fair value at the time of execution, with the changes in fair value of the embedded derivatives
recognized as earnings in "Product revenue" in the accompanying consolidated statements of operations.
Derivatives and embedded derivatives as of December 31, 2020 consisted of the following (in thousands):
Gross Amounts Gross Amounts Net Amount
Recognized
Presented
Offset
Assets:
Commodity swaps:
Current portion of derivative assets, related party
Long-term portion of derivative assets, related party
Fueling agreements:
Prepaid expenses and other current assets
Notes receivable and other long-term assets, net
Total derivative assets
Liabilities:
Fueling agreements:
Accrued liabilities
Other long-term liabilities
Total derivative liabilities
$
1,591 $
4,057
249
542
6,439 $
— $
—
—
— $
1,591
4,057
249
542
6,439
283 $
273
556 $
— $
—
— $
283
273
556
$
$
$
Derivatives and embedded derivatives as of December 31, 2021 consisted of the following (in thousands):
Gross Amounts Gross Amounts Net Amount
Recognized
Presented
Offset
Assets:
Fueling agreements:
Prepaid expenses and other current assets
Notes receivable and other long-term assets, net
Total derivative assets
Liabilities:
Commodity swaps:
Current portion of derivative liabilities, related party
Long-term portion of derivative liabilities, related party
Total derivative liabilities
$
$
$
$
2,038 $
4,738
6,776 $
— $
—
— $
2,038
4,738
6,776
1,900 $
2,483
4,383 $
— $
— $
1,900
2,483
4,383
As of December 31, 2020 and 2021, the Company had a total volume on open commodity swap contracts of 16.9
million and 11.9 million diesel gallons, respectively, at a weighted-average price per gallon of approximately $3.18 per
gallon.
The following table reflects the weighted-average price of open commodity swap contracts as of December 31, 2020
and 2021, by year with associated volumes:
Year
2021
2022
2023
2024
December 31, 2020
December 31, 2021
Volumes
(Diesel Gallons)
Weighted-Average Price per
Diesel Gallon
Volumes
(Diesel Gallons)
Weighted-Average Price per
Diesel Gallon
5,000,000 $
5,000,000 $
5,000,000 $
1,875,000 $
3.18
3.18
3.18
3.18
— $
5,000,000 $
5,000,000 $
1,875,000 $
—
3.18
3.18
3.18
82
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8 —Fair Value Measurements
The Company follows the authoritative guidance for fair value measurements with respect to assets and liabilities that
are measured at fair value on a recurring basis and non-recurring basis. Under the standard, fair value is defined as the exit
price, 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 measurement date. The standard also establishes a hierarchy for inputs used in measuring
fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the
most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the
asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs
are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or
liability developed based upon the best information available in the circumstances. 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 are not 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 for the asset or liability. Categorization within the
valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company’s available-for-sale debt securities and certificate of deposits are classified within Level 2 because they
are valued using the most recent quoted prices for identical assets in markets that are not active and quoted prices for
similar assets in active markets.
The Company used the income approach to value its outstanding commodity swap contracts and embedded derivatives
in its fueling agreements under the Zero Now truck financing program (see Note 7). Under the income approach, the
Company used a discounted cash flow (“DCF”) model in which cash flows anticipated over the term of the contracts are
discounted to their present value using an expected discount rate. The discount rate used for cash flows reflects the specific
risks in spot and forward rates and credit valuation adjustments. This valuation approach is considered a Level 3 fair value
measurement. The significant unobservable inputs used in the fair value measurement of the Company’s derivative
instruments are Ultra-Low Sulfur Diesel (“ULSD”) forward prices and differentials from ULSD to Petroleum
Administration for Defense District (“PADD”) regions. Significant increases (decreases) in any of those inputs in isolation
would result in a significantly lower (higher) fair value measurement. Generally, a change in the ULSD forward prices is
accompanied by a directionally opposite but less extreme change in the ULSD-PADD differential.
The Company estimated the fair value of its outstanding commodity swap contracts based on the following inputs as
of December 31, 2020 and 2021:
Significant Unobservable Inputs
ULSD Gulf Coast Forward Curve
Historical Differential to PADD 3 Diesel
Historical Differential to PADD 5 Diesel
December 31, 2020
December 31, 2021
Input Range
$1.47 - $1.54 $
$0.81 - $1.58 $
$1.66 - $2.58 $
Weighted Average
1.50
0.99
2.01
Input Range
$ 2.03 - $ 2.15 $
$ .87 - $ 1.58 $
$ 1.82 - $ 2.69 $
$2.11
$1.03
$2.13
Weighted Average
The Company estimated the fair value of embedded derivatives in its fueling agreements under the Zero Now truck
financing program based on the following inputs as of December 31, 2020 and 2021:
December 31, 2020
December 31, 2021
Significant Unobservable Inputs
ULSD Gulf Coast Forward Curve
Historical Differential to PADD 3 Diesel
Historical Differential to PADD 5 Diesel
Input Range
$1.47 - $1.54 $
$0.81 - $1.58 $
$1.66 - $2.58 $
Weighted Average
1.50
0.99
2.01
Input Range
$ 2.03 - $ 2.15 $
$ .87 - $ 1.58 $
$ 1.82 - $ 2.69 $
$2.11
$1.03
$2.13
Weighted Average
83
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
There were no transfers of assets or liabilities between Level 1, Level 2, or Level 3 of the fair value hierarchy as of
December 31, 2020 or 2021.
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, 2020 and 2021 (in thousands):
Assets:
Available-for-sale securities (1):
Municipal bonds and notes
Certificates of deposit (1)
Commodity swap contracts (2)
Embedded derivatives (3)
Liabilities:
Embedded derivatives (3)
Assets:
Available-for-sale securities (1):
Municipal bonds and notes
Zero coupon bonds
Certificates of deposit (1)
Embedded derivatives (3)
Liabilities:
Commodity swap contracts (2)
December 31, 2020 Level 1
Level 2
Level 3
$
28,998 $
530
5,648
791
— $
—
—
—
28,998 $
530
—
—
—
—
5,648
791
$
556 $
— $
— $
556
December 31, 2021 Level 1
Level 2
Level 3
$
6,000 $
123,192
530
6,776
6,000 $
— $
—
—
—
123,192
530
—
—
—
—
6,776
$
4,383 $
— $
— $
4,383
(1)
Included in “Short-term investments” in the accompanying consolidated balance sheets. See Note 6 for more information.
(2)
(3)
Included in “Derivative assets, related party” and “Long-term portion of derivative assets, related party” as of December 31, 2020, and “Derivative
liabilities, related party” and “Long-term portion of derivative liabilities, related party” as of December 31, 2021, in the accompanying consolidated
balance sheets. See Note 7 for more information.
Included in "Prepaid expenses and other current assets", "Notes receivable and other long-term assets, net", “Accrued liabilities” and “Other long-
term liabilities” as of December 31, 2020, and "Prepaid expenses and other current assets" and "Notes receivable and other long-term assets, net"
as of December 31, 2021 in the accompanying consolidated balance sheets. See Note 7 for more information.
84
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on
a recurring basis as shown in the tables above that used significant unobservable inputs (Level 3), as well as the change in
unrealized gains or losses for the periods included in earnings (in thousands):
Balance as of December 31, 2019
Settlements, net
Total gain (loss)
Balance as of December 31, 2020
Balance as of December 31, 2020
Settlements, net
Total gain (loss)
Balance as of December 31, 2021
Change in unrealized gain (loss) for the year ended
December 31, 2020 included in earnings
Change in unrealized gain (loss) for the year ended
December 31, 2021 included in earnings
Other Financial Assets and Liabilities
Assets:
Embedded
Assets:
Commodity
Liabilities:
Commodity
Liabilities:
Embedded Liabilities:
Swap Contracts Derivatives Swap Contracts Derivatives Warrants
(40)
$
—
40
—
3,270 $
(1,652)
4,030
5,648 $
(81) $
—
(475)
(556) $
(164) $
56
108
—
68
791 $
723 $
— $
$
$
$
5,648 $
(225)
(5,423)
— $
791 $
—
5,985
6,776 $
— $
1,083
(5,466)
(4,383) $
(556) $
—
556
— $
—
—
—
—
$
2,378 $
68 $
164 $
(475) $
40
$
(5,648) $
5,985 $
(4,383) $
556 $
—
The carrying amounts of the Company’s cash, cash equivalents and restricted cash, receivables and payables
approximate fair value due to the short-term nature of those instruments. The carrying amounts of the Company’s debt
instruments approximated their respective fair values as of December 31, 2020 and 2021. The fair values of these debt
instruments were estimated using a discounted cash flow analysis based on interest rates offered on loans with similar
terms to borrowers of similar credit quality, which are Level 3 inputs. See Note 12 for more information about the
Company’s debt instruments.
Note 9 —Other Receivables
Other receivables as of December 31, 2020 and 2021 consisted of the following (in thousands):
Loans to customers to finance vehicle purchases
Accrued customer billings
Fuel tax credits
Other
Total other receivables
$
$
2020
2021
394 $
6,335
10,556
6,370
23,655 $
419
4,417
12,684
6,927
24,447
85
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10 —Land, Property and Equipment
Land, property and equipment, net as of December 31, 2020 and 2021 consisted of the following (in thousands):
Land
LNG liquefaction plants
Station equipment
Trailers
Other equipment
Construction in progress
Less accumulated depreciation
Total land, property and equipment, net
2020
3,476 $
94,633
344,839
79,860
89,276
73,272
685,356
(394,445)
290,911 $
2021
3,476
94,633
354,699
72,783
93,135
74,963
693,689
(431,928)
261,761
$
$
Included in “Land, property and equipment, net” are capitalized software costs of $32.3 million and $33.8 million as
of December 31, 2020 and 2021, respectively. Accumulated amortization of the capitalized software costs are $28.8
million and $30.4 million as of December 31, 2020 and 2021, respectively.
The Company recorded amortization expense related to the capitalized software costs of $3.9 million, $2.5 million
and $1.6 million for the years ended December 31, 2019, 2020 and 2021, respectively.
As of December 31, 2020 and 2021, $1.7 million and $2.1 million, respectively, are included in “Accounts payable”
and “Accrued liabilities” in the accompanying consolidated balance sheets, representing amounts related to purchases of
property and equipment. These amounts are excluded from the accompanying consolidated statements of cash flows as
they are non-cash investing activities.
Note 11 —Accrued Liabilities
Accrued liabilities as of December 31, 2020 and 2021 consisted of the following (in thousands):
Accrued alternative fuels incentives (1)
Accrued employee benefits
Accrued gas and equipment purchases
Accrued interest
Accrued property and other taxes
Accrued salaries and wages
Embedded derivatives
Other (2)
Total accrued liabilities
(1)
Includes the amount of RINs, LCFS Credits and the amount of AFTC payable to third parties.
(2) No individual item in “Other” exceeds 5% of total current liabilities.
$
2020
18,175 $
4,282
9,897
512
3,094
7,646
283
8,748
52,637 $
$
2021
28,106
4,547
17,158
893
3,369
8,172
—
12,914
75,159
86
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12 —Debt
Debt obligations as of December 31, 2020 and 2021 consisted of the following (in thousands):
December 31, 2020
bp Loan
NG Advantage debt
SG Facility
Other debt
Total debt
Principal Balance
$
Unamortized Debt Balance, Net of
Financing Costs Financing Costs
50,000
— $
29,418
117
5,100
—
1,162
—
85,680
117
(3,592)
(39)
82,088
78 $
50,000 $
29,535
5,100
1,162
85,797
(3,631)
82,166 $
Less amounts due within one year
Total long-term debt
$
NG Advantage debt
SG Facility
Other debt
Total debt
Less amounts due within one year
Total long-term debt
December 31, 2021
Principal Balance
25,832
$
9,500
800
36,132
(12,868)
23,264 $
Unamortized Debt Balance, Net of
Financing Costs Financing Costs
25,760
9,500
800
36,060
(12,845)
23,215
72
—
—
72
(23)
49 $
$
The following is a summary of the aggregate maturities of debt obligations for each of the annual periods subsequent
to December 31, 2021 (in thousands):
NG Advantage debt
SG Facility
Other Debt
Total
SG Credit Agreement
2022
2023
2024
2025
2026
Thereafter
Total
$ 2,991 $ 8,977 $ 4,161 $ 1,397 $ 8,306 $
9,500
377
—
262
—
161
—
—
—
—
$ 12,868 $ 9,239 $ 4,322 $ 1,397 $ 8,306 $
— $ 25,832
9,500
—
—
800
— $ 36,132
On January 2, 2019, the Company entered into a term credit agreement (the “Credit Agreement”) with Société
Générale, a company incorporated as a société anonyme under the laws of France (“SG”). The Credit Agreement provides
for a term loan facility (the “SG Facility”) pursuant to which the Company may obtain, subject to certain conditions, up to
$100.0 million of loans (“SG Loans”) in support of its Zero Now truck financing program. Under the Credit Agreement,
the Company is permitted to use the proceeds from the SG Loans to fund the incremental cost of trucks purchased or
financed under the Zero Now truck financing program and related fees and expenses incurred by the Company in
connection therewith. On March 12, 2021, the Credit Agreement was amended to permit the Company to use up to $45.0
million of proceeds from the SG Loans to fund certain station build costs, and up to $20.0 million to fund TotalEnergies
JV Equity Obligations. Under the amended terms of the Credit Agreement, the Company’s ability to draw from the SG
Facility expired on January 2, 2022. Interest on outstanding SG Loans accrues at a rate equal to LIBOR plus 1.30% per
annum, and a commitment fee on any unused portion of the SG Facility accrues at a rate equal to 0.39% per annum. Interest
and commitment fees are payable quarterly.
The Company is required to make quarterly principal payments of $2.5 million beginning March 31, 2022 with any
unpaid amount due on January 2, 2024, subject to the option to extend the maturity date for three successive terms of one
year each. The Company is required to make mandatory prepayments under the SG Facility equal to any amounts the
87
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Company receives for complete or partial refunds of the incremental cost of trucks purchased or financed under the Zero
Now program, and the Company is generally permitted to make complete or partial voluntary prepayments under the SG
Facility with prior written notice to SG but without premium or penalty. The Credit Agreement includes certain
representations, warranties and covenants by the Company and also provides for customary events of default which, if any
of them occurs, would permit or require, among other things, the principal of and accrued interest on the SG Loans to
become or to be declared due and payable. Events of default under the Credit Agreement include, among others,
nonpayment of principal and interest when due; violation of covenants; any default by the Company (whether or not
resulting in acceleration) under any other agreement for borrowed money in excess of $20.0 million; voluntary or
involuntary bankruptcy; repudiation or assignment of the Guaranty by THUSA (as defined below); or a change of control
of the Company.
The Credit Agreement does not include financial covenants, and the Company has not provided SG with any security
for its obligations under the Credit Agreement. As described below, THUSA has entered into the Guaranty to guarantee
the Company’s payment obligations to SG under the Credit Agreement. As of December 31, 2021, the Company had $9.5
million outstanding on the SG Facility and no events of defaults had occurred.
TotalEnergies Credit Support Agreement
The Company entered into a credit support agreement with TotalEnergies Holdings USA Inc. (“THUSA”), a wholly
owned subsidiary of TotalEnergies, on January 2, 2019, which was subsequently amended on March 12, 2021 (as amended,
the “CSA”) in conjunction with the March 12, 2021 amendment to the Credit Agreement. Under the CSA, THUSA agreed
to enter into a guaranty agreement (“Guaranty”) pursuant to which it has guaranteed the Company’s obligation to repay
SG up to $100.0 million in SG Loans and interest thereon in accordance with the Credit Agreement. In consideration for
the commitments of THUSA under the CSA, the Company is required to pay THUSA a quarterly guaranty fee at a rate
per quarter equal to 2.5% of the average aggregate Loan amount for the preceding calendar quarter.
Following any payment by THUSA to SG under the Guaranty, the Company would be obligated to immediately pay
to THUSA the full amount of such payment plus interest on such amount at a rate equal to LIBOR plus 1.0%. In addition,
the Company would be obligated to pay and reimburse THUSA for all reasonable out-of-pocket expenses it incurs in the
performance of its services under the CSA, including all reasonable out-of-pocket attorneys’ fees and expenses incurred
in connection with the payment to SG under the Guaranty or any enforcement or attempt to enforce any of the Company’s
obligations under the CSA. The CSA includes customary representations and warranties and affirmative and negative
covenants by the Company. In addition, upon the occurrence of a “Trigger Event” and during its continuation, THUSA
may, among other things: elect not to guarantee additional SG Loans; declare all or any portion of the outstanding amounts
the Company owes THUSA under the CSA to be due and payable; and exercise all other rights it may have under applicable
law. Each of the following events constitutes a Trigger Event: the Company defaults with respect to any payment obligation
under the CSA; any representation or warranty made by the Company in the CSA was false, incorrect, incomplete or
misleading in any material respect when made; the Company fails to observe or perform any material covenant, obligation,
condition or agreement in the CSA; or the Company defaults in the observance or performance of any agreement, term or
condition contained in any other agreement with THUSA or an affiliate of THUSA.
As security for the Company’s obligations under the CSA, on January 2, 2019, the Company entered into a pledge
and security agreement with THUSA and delivered a collateral assignment of contracts to THUSA, pursuant to which the
Company collaterally assigned to THUSA all fueling agreements it enters into with participants in the Zero Now truck
financing program. In addition, on January 2, 2019, the Company entered into a lockbox agreement with THUSA and
PlainsCapital Bank, under which the Company granted THUSA a security interest in the cash flow generated by the fueling
agreements the Company enters into with participants in the Zero Now truck financing program.
Until the occurrence of a Trigger Event or Fundamental Trigger Event (as described below) under the CSA, the
Company has the freedom to operate in the normal course and there are no restrictions on the flow of funds in and out of
the lockbox account established pursuant to the lockbox agreement. Upon the occurrence of a Trigger Event under the
CSA, all funds in the lockbox account will be: first, used to make scheduled debt repayments under the Credit Agreement;
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
and second, released to the Company. Further, upon the occurrence of a “Fundamental Trigger Event” under the CSA and
during its continuation, in addition to exercising any of the remedies available to THUSA upon the occurrence of a Trigger
Event as described above: all participants in the Zero Now program would pay amounts owed under their fueling
agreements with the Company directly into the lockbox account; under a “sweep” mechanism, all cash in the lockbox
account would be used to prepay all outstanding SG Loans under the Credit Agreement; no other disbursements from the
lockbox account could be made without THUSA’s consent; and THUSA would retain dominion over the lockbox account
and the funds in the account would remain as security for the Company’s payment and reimbursement obligations under
the CSA. Each of the following events constitutes a Fundamental Trigger Event: the Company defaults in the observance
or performance of any agreement, term or condition contained in the Credit Agreement that would constitute an event of
default thereunder, up to or beyond any grace period provided in such agreement, unless waived by SG; the Company
defaults in the observance or performance of any agreement, term or condition contained in any evidence of indebtedness
other than the Credit Agreement, and the effect of such default is to cause, or permit the holders of such indebtedness to
cause, acceleration of indebtedness in an aggregate amount for all such collective defaults of $20.0 million or more;
voluntary and involuntary bankruptcy and insolvency events; and the occurrence of a change of control of the Company.
The CSA will terminate following the later of: the payment in full of all of the Company’s obligations under the CSA;
and the termination or expiration of the Guaranty following the maturity date of the last outstanding SG Loan or December
31, 2023, whichever is earlier.
NG Advantage Debt
On November 30, 2016, NG Advantage entered into a Loan and Security Agreement (the “Wintrust LSA”) with
Wintrust Commercial Finance (“Wintrust”), pursuant to which Wintrust agreed to lend NG Advantage $4.7 million. The
proceeds were primarily used to fund the purchases of CNG trailers and equipment. Interest and principal is payable
monthly in 72 equal monthly installments at an annual rate of 5.17%. As collateral security for the prompt payment in full
when due of NG Advantage’s obligations to Wintrust under the Wintrust LSA, NG Advantage pledged to and granted
Wintrust a security interest in all of its right, title and interest in the CNG trailers and equipment purchased with the
proceeds received under the Wintrust LSA.
On December 10, 2020, NG Advantage entered an Amended and Restated Loan and Security Agreement with
Berkshire Bank (“Berkshire ALA”) to substitute and replace the two existing loans with Berkshire Bank dated May 12,
2016 and January 24, 2017 (collectively, the “Original Debt”). The Berkshire ALA provides NGA a 5-year term loan of
$14.5 million with payments of principal and interest due monthly beginning February 1, 2021 at an annual interest rate
of 5% maturing on January 1, 2026. NG Advantage used the funds provided by the Berkshire ALA to repay in full the
outstanding principal balance plus accrued and unpaid interest of the Original Debt, and to repay the outstanding balances
of certain other financing obligations to unrelated lenders, Nations and Liberty. NG Advantage has pledged as collateral
certain assets and equipment including trailers under the Berkshire ALA, and the Company has provided a limited guaranty
of up to $7.0 million classified in “Restricted cash” on the accompanying consolidated balance sheet. As of December 31,
2021, the Company was in compliance with the covenants under the Berkshire ALA.
The Berkshire ALA also provides NG Advantage a $1.0 million revolving line of credit which bears interest at the
greater of the Prime Rate or 3.00%, plus 0.25% and has a maturity date of July 31, 2022. As of December 31, 2021, NG
Advantage had no amounts outstanding on the revolving line of credit.
Financing Obligations
NG Advantage has entered into sale and leaseback transactions with various lessors as described below. In each
instance, the sale and leaseback transaction does not qualify for sale-leaseback accounting because of NG Advantage’s
continuing involvement with the buyer-lessor due to a fixed price repurchase option. As a result, the transactions are
recorded under the financing method, in which the assets remain on the accompanying consolidated balance sheets and
the proceeds from the transactions are recorded as financing liabilities.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On December 18, 2017, NG Advantage entered into a sale-leaseback arrangement through a Master Lease Agreement
(the “BoA MLA”) with Bank of America Leasing & Capital, LLC (“BoA”). Pursuant to the BoA MLA, NG Advantage
received $2.1 million in cash for CNG trailers and simultaneously leased them back from BoA for five years commencing
January 1, 2018 with interest and principal payable in 60 equal monthly installments at an annual rate of 4.86%.
On March 1, 2018, NG Advantage entered into a sale-leaseback arrangement through a Master Lease Agreement (the
“First National MLA”) with First National Capital, LLC (“First National”). Pursuant to the First National MLA, NG
Advantage received $6.3 million in cash, net of fees and the first month’s lease payment for CNG trailers and
simultaneously leased them back from First National for six years commencing March 1, 2018 with interest and principal
payable in 72 equal monthly installments at an annual rate of 9.28%.
On December 20, 2018 (the “Closing Date”), NG Advantage entered into a purchase agreement to sell a compression
station for a purchase price of $7.0 million to an entity whose member owners were noncontrolling interest member owners
of NG Advantage. On the Closing Date and immediately following the consummation of the sale of the compression
station, NG Advantage entered into a lease agreement with the buyer of the station pursuant to which the station was leased
back to NG Advantage for a term of five years with monthly rent payments equal to $0.1 million at an annual rate of
12.0%.
bp Loan
On December 18, 2020, the Company entered a memorandum of understanding (“MOU”) with bp to create the bpJV.
Contemporaneous with the execution of the MOU, the Company and bp executed a loan agreement whereby bp advanced
$50.0 million (“bp Loan”) to fund capital costs and expenses incurred prior to formation of the bpJV. The bp Loan bore
interest at the rate per annum equal to LIBOR plus 4.33%. As repayment of the bp Loan, the outstanding principal balance
was contributed to the bpJV in April 2021 upon entering into the bp JV Agreement. See Note 4 for additional information.
Plains Credit Facility
On May 1, 2021, the Company entered into a Loan and Security Agreement (the “Plains LSA”) with PlainsCapital
Bank (“Plains”), which provides the Company a $20.0 million revolving line of credit through May 1, 2022. The interest
rate on amounts outstanding under the Plains LSA is the greater of the Prime Rate or 3.25%. As of December 31, 2021,
no amounts were outstanding under the Plains LSA. As of December 31, 2021, the Company was in compliance with the
covenants under the Plains LSA.
On September 16, 2021, Plains issued an irrevocable standby letter of credit on behalf of the Company to the Chevron
Products Company, a division of Chevron U.S.A. Inc. (“Chevron”), for $2.0 million relating to the Company’s Adopt-A-
Port program with Chevron. The standby letter of credit is valid until cancelled and is collateralized by the Company’s
revolving line of credit with Plains, reducing the amount available under the line of credit from $20.0 million to $18.0
million. As of December 31, 2021, no amounts have been drawn under the standby letter of credit.
Other Debt
The Company has other debt due at various dates through 2024 bearing interest at rates up to 4.75% with a weighted-
average interest rate of 4.38% and 4.34% as of December 31, 2020 and 2021, respectively.
Note 13 —Stockholders’ Equity
Authorized Shares
The Company’s certificate of incorporation authorizes the issuance of two classes of capital stock designated as
common stock and preferred stock, each having $0.0001 par value per share. On June 14, 2021, the Company’s
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
stockholders approved an increase in the number of shares of Common Stock the Company is authorized to issue from
304,000,000 to 454,000,000. As of December 31, 2021, the Company is authorized to issue 455,000,000 shares, of which
454,000,000 shares of capital stock are designated common stock and 1,000,000 shares are designated preferred stock.
Dividend Provisions
The Company did not declare or pay any dividends during the years ended December 31, 2019, 2020 and 2021.
Voting Rights
Each holder of common stock has the right to one vote per share owned on matters presented for stockholder action.
TotalEnergies Private Placement
On May 9, 2018, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with
TotalEnergies Marketing Services, S.E. (“TMS”), a wholly owned subsidiary of TotalEnergies. Pursuant to the Purchase
Agreement, the Company agreed to sell and issue, and TMS agreed to purchase, up to 50,856,296 shares of the Company’s
common stock at a purchase price of $1.64 per share, all in a private placement (the “TotalEnergies Private Placement”).
The purchase price per share was determined based on the volume-weighted average price for the Company’s common
stock between March 23, 2018 (the day on which discussions began between the Company and TotalEnergies) and May 3,
2018 (the day on which the Company agreed in principle with TotalEnergies regarding the structure and basic terms of its
investment). As of the date of the Purchase Agreement, TotalEnergies did not hold or otherwise beneficially own any
shares of the Company’s common stock, and TotalEnergies has agreed, until the later of May 9, 2020 or such date when
it ceases to hold more than 5.0% of the Company’s common stock then outstanding, among other similar undertakings and
subject to customary conditions and exceptions, to not purchase shares of the Company’s common stock or otherwise
pursue transactions that would result in TotalEnergies beneficially owning more than 30.0% of the Company’s equity
securities without the approval of the Company’s board of directors.
On June 13, 2018, the Company and TMS closed the TotalEnergies Private Placement, in which: (1) the Company
issued to TMS all of the 50,856,296 shares of its common stock issuable under the Purchase Agreement, resulting in
TotalEnergies beneficially holding approximately 25.0% of the outstanding shares of the Company’s common stock and
the largest ownership position of the Company as of September 30, 2018; (2) TotalEnergies paid to the Company an
aggregate of $83.4 million in gross proceeds, which the Company has used and expects to continue to use for working
capital and general corporate purposes, which may include executing its business plans, pursuing opportunities for further
growth, and retiring a portion of its outstanding indebtedness; and (3) the Company and TotalEnergies entered into a
registration rights agreement, described below. In connection with the issuance of common stock, the Company incurred
transaction fees of $1.9 million.
Pursuant to the Purchase Agreement, the Company and TotalEnergies also entered into a registration rights agreement
on June 13, 2018, upon the closing under the Purchase Agreement. Pursuant to the registration rights agreement, the
Company filed a registration statement with the SEC to cover the resale of the shares issued and sold under the Purchase
Agreement, which was declared effective on August 16, 2018, and is obligated to use its commercially reasonable efforts
to maintain the effectiveness of such registration statement until all such shares are sold or may be sold without restriction
under Rule 144 under the Securities Act of 1933, as amended. As of December 31, 2021, the Company was in compliance
with all of its registration covenants set forth in the registration rights agreement.
At-The-Market Offerings
On May 10, 2021, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC, as
sales agent, to sell shares of the Company’s common stock having an aggregate offering price of up to $100.0 million in
an at-the-market offering program (the “May ATM Program”). Through June 3, 2021, the Company sold 12,362,237
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
shares of common stock under the May ATM Program, which exhausted the May ATM Program. On June 7, 2021, the
Company entered into a new equity distribution agreement with Goldman Sachs & Co. LLC, as sales agent, to sell
additional shares of common stock having an aggregate offering price of up to $100.0 million in a new at-the-market
offering program (the “June ATM Program” and, together with the May ATM Program, the “ATM Programs”). On June
8, 2021, the Company sold 10,473,946 shares of common stock under the June ATM Program which exhausted the June
ATM Program.
For the year ended December 31, 2021, the Company issued 22,836,183 shares of common stock under the ATM
Programs for gross proceeds of $200.0 million, and incurred transaction costs of $6.5 million, including $6.0 million in
commissions paid to Goldman Sachs & Co. LLC.
Share Repurchase Program
On March 12, 2020, the Company’s Board of Directors approved a share repurchase program of up to $30.0 million
(exclusive of fees and commissions) of the Company’s outstanding common stock (the “Repurchase Program”). On
December 7, 2021, the Company’s Board of Directors approved an increase in the aggregate purchase amount under the
Repurchase Program from $30.0 million to $50.0 million (exclusive of fees and commissions). The Repurchase Program
does not have an expiration date, and it may be suspended or discontinued at any time. During the year ended December
31, 2021, the Company repurchased 452,700 shares of its common stock under the Repurchase Program for a total cost of
$2.9 million. As of December 31, 2021, the Company had utilized a total of $17.4 million under the Repurchase Program
to repurchase 8,197,086 shares of common stock. The Repurchase Program does not obligate the Company to acquire any
specific number of shares. Repurchases under the Repurchase Program may be effected from time to time through open
market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share
repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions, applicable
securities laws and other relevant factors. Repurchases may also be made under Rule 10b5-1 plans.
Stock-Based Compensation
The following table summarizes the compensation expense and related income tax benefit related to the Company’s
stock-based compensation arrangements recognized in the accompanying consolidated statements of operations during the
periods presented (in thousands):
Stock-based compensation expense, net of $0 tax in 2019, 2020, and 2021 $
3,880 $
2,957 $
Year Ended December 31,
2020
2019
2021
14,994
Equity Incentive Plans
In December 2006, the Company adopted its 2006 Equity Incentive Plan (“2006 Plan”), which became effective on
May 24, 2007, the date the Company completed its initial public offering of common stock.
In May 2016, the Company adopted its 2016 Performance Incentive Plan (“2016 Plan”), which became effective on
May 26, 2016, the date of approval of the 2016 Plan by the Company’s stockholders. The 2006 Plan became unavailable
for new awards upon the effectiveness of the 2016 Plan. Unissued awards under the 2006 Plan are not available for future
grant under the 2016 Plan. If any outstanding award under the 2006 Plan expires or is canceled, the shares 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.
In May 2020, the Company adopted its Amended and Restated 2016 Performance Incentive Plan (“Amended 2016
Plan”), which increased the aggregate number of shares of the Company’s common stock to be delivered pursuant to all
awards granted under the 2016 Performance Incentive Plan by an additional 17,500,000 shares, and became effective on
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
May 15, 2020, the date of approval of the Amended 2016 Plan by the Company’s stockholders. As of December 31, 2021,
the Company had 7,595,607 shares available for future grant under the Amended 2016 Plan.
Service-Based Stock Options
The Company has granted service-based stock options to key employees that vest annually over the three years
following the 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 stock options granted have contractual terms of 10 years, and exercise price for the options
granted is equal to the closing market price of the Company's common stock on the date of grant. The stock options are
subject to the terms and conditions of the 2006 and 2016 Plans and a Notice of Grant of Stock Option and Stock Option
Agreement.
The following table summarizes the Company’s service-based stock option activity for the year ended December 31,
2021:
Weighted
Average
Exercise
Price
Number of
Shares
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in years) (in thousands)
Options outstanding as of December 31, 2020
Granted
Exercised
Forfeited or expired
Options outstanding as of December 31, 2021
Options exercisable as of December 31, 2021
Options vested and expected to vest as of December 31, 2021
8,142,831 $
6,186,260
(1,219,976)
(1,295,444)
11,813,671 $
5,133,792 $
11,813,671 $
5.38
8.32
4.59
8.68
6.64
5.52
6.64
7.27 $
4.37 $
7.27 $
15,409
12,329
15,409
As of December 31, 2021, there was $25.9 million of total unrecognized compensation cost related to unvested shares
subject to outstanding service-based stock options. That cost is expected to be expensed over a remaining weighted average
period of approximately 2.3 years. The total fair value of shares vested during the year ended December 31, 2021 was $1.8
million.
The fair value of each service-based stock option granted was estimated as of the date of grant using the Black-Scholes
option pricing model and using the following assumptions:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life in years
57.3% to 61.5%
2.11% to 2.53%
2019
0.0%
6.0
Year Ended December 31,
2020
0.0%
65.8% to 83.9%
0.37% to 1.21%
6.0
2021
0.0%
76.8% to 96.8%
0.58% to 1.31%
5.6 to 5.8
The volatility amounts used were estimated based on (i) the historical volatility of the Company’s common stock over
a term equal to the estimated life of the options and on (ii) implied volatility of the Company’s traded options. The expected
lives used were based on historical exercise experience and the Company’s anticipated exercise periods for its outstanding
stock options. The risk-free interest rates used were based on the U.S. Treasury yield curve with terms approximating the
expected life of the stock options at the time of grant.
The weighted-average grant date fair value per share of service-based stock options granted during the years ended
December 31, 2019, 2020 and 2021, were $1.28, $1.54 and $5.90, respectively. The aggregate intrinsic value of service-
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
based options exercised during the years ended December 31, 2019, 2020 and 2021 was $0.1 million, $1.8 million and
$10.1 million, respectively. The Company recorded $2.2 million, $1.7 million and $9.9 million of stock option expense
relating to service-based stock options during the years ended December 31, 2019, 2020 and 2021, respectively. The
Company has not recorded any tax benefit related to its service-based stock option expense.
Performance-Based Stock Options
The Company has granted 1,640,000 performance-based stock options to certain executives and key employees during
2021. The options granted vest in multiple tranches in which vesting of each tranche is contingent upon securing a defined
RNG production volume following the date of grant, if the holder is in service to the Company upon the achievement of
such performance hurdles. The performance-based stock options have contractual terms of 10 years, and the exercise price
for the options granted is equal to the closing market price of the Company's common stock on the date of grant. The stock
options are subject to the terms and conditions of the 2016 Plan and a Notice of Grant of Stock Option and Stock Option
Agreement.
The following table summarizes the Company’s performance-based stock option activity for the year ended
December 31, 2021:
Options outstanding as of December 31, 2020
Granted
Exercised
Forfeited or expired
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in years) (in thousands)
Weighted
Average
Exercise
Price
6.77
Number of
Shares
—
1,640,000
—
—
Options outstanding as of December 31, 2021
Options exercisable as of December 31, 2021
1,640,000 $
— $
6.77
—
9.94 $
— $
—
—
As of December 31, 2021, there was $6.6 million of total unrecognized compensation cost related to unvested shares
subject to outstanding performance-based stock options. Compensation cost for the performance-based stock options is
recognized when attainment of the performance hurdles is determined to be probable and over a period in which the
Company estimates the performance hurdles will be achieved. No vesting occurred during the year ended December 31,
2021.
The fair value of each performance-based stock option granted was estimated as of the date of grant using the Black-
Scholes option pricing model and using the following assumptions:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life in years
Year Ended
December 31,
2021
0.0%
77.1%
1.36%
6.2
The volatility amount used was estimated based on (i) the historical volatility of the Company’s common stock over
a term equal to the estimated life of the options and on (ii) implied volatility of the Company’s traded options. The expected
life used was based on historical exercise experience and the Company’s anticipated exercise period for its outstanding
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
performance-based stock options. The risk-free interest rate used was based on the U.S. Treasury yield curve with terms
approximating the expected life of the stock options at the time of grant.
The weighted-average grant date fair value per share of performance-based stock options granted during the year
ended December 31, 2021, was $4.58. There were no performance-based stock options exercised during the year ended
December 31, 2021. The Company recognizes the grant date fair value of the options that are probable of being earned
over the estimated performance period. Compensation cost on performance-based stock options was $1.0 million for
the year ended December 31, 2021. The Company has not recorded any tax benefit related to its performance-based stock
option expense.
Market-Based Stock Options
The Company has granted 3,700,000 market-based stock options to select executives and employees during 2021.
Market-based stock options vest if (i) the closing price of the Company’s common stock equals or exceeds $14.00 for
twenty consecutive trading days, representing 207% of the closing market price of the Company’s common stock on the
option grant date (the “Stock Price Condition”) and (ii) the holder is employed by the Company at the time the Stock Price
Condition is satisfied. The market-based stock options have contractual terms of 10 years, and the exercise price for the
options granted is equal to the closing market price of the Company's common stock on the date of grant. The stock options
are subject to the terms and conditions of the 2016 Plan and a Notice of Grant of Stock Option and Stock Option
Agreement.
The following table summarizes the Company’s market-based stock option activity for the year ended December 31,
2021:
Options outstanding as of December 31, 2020
Granted
Exercised
Forfeited or expired
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in years) (in thousands)
Weighted
Average
Exercise
Price
6.77
Number of
Shares
—
3,700,000
—
—
Options outstanding as of December 31, 2021
Options exercisable as of December 31, 2021
3,700,000 $
— $
6.77
—
9.94 $
— $
—
—
As of December 31, 2021, there was $17.8 million of total unrecognized compensation cost related to unvested shares
subject to outstanding market-based stock options. That cost is expected to be expensed over a remaining weighted average
period of approximately 6.8 years. No vesting occurred during the year ended December 31, 2021.
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CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The fair value of each market-based stock option granted was estimated on the date of grant using the Monte Carlo
simulation model. The Monte Carlo simulation method is subject to variability as certain assumptions must be made,
including the derived service period, which is estimated based on likely future stock price performance and volatility of
the Company’s common stock price. The fair value of each market-based stock option granted was estimated using the
following assumptions:
Dividend yield
Expected volatility
Risk-free interest rate
Expected life in years
Year Ended
December 31,
2021
0.0%
67.8%
1.5%
10.0
The volatility amount used was based on the historical volatility of the Company’s common stock over a term equal
to the estimated life of the options. The risk-free interest rate used was based on the U.S. Treasury yield curve with terms
approximating the expected life of the stock options at the time of grant. The expected life used was based on the
Company’s anticipated exercise period for its outstanding market-based stock options as the simulation was run from the
valuation date through the end of the contractual life of the options using weekly time steps.
The weighted-average grant date fair value per share of market-based stock options granted during the year ended
December 31, 2021, was $4.87. There were no market-based stock options exercised during the year ended December 31,
2021. The Company recorded $0.2 million of compensation cost relating to market-based stock options during the year
ended December 31, 2021. The Company has not recorded any tax benefit related to its market-based stock option expense.
Service-Based Restricted Stock Units
The Company has granted service-based restricted stock units (“Service-Based RSUs”) to key employees that vest
annually over the three years following the 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 subject to the terms and conditions of the 2016
Plan and a Notice of Grant of Restricted Stock Unit and Restricted Stock Unit Agreement.
The following table summarizes the Company’s Service-Based RSU activity for the year ended December 31, 2021:
RSU outstanding and unvested as of December 31, 2020
Granted
Vested
Forfeited or expired
RSU outstanding and unvested as of December 31, 2021
Number of
Shares
978,716
894,344
(722,193)
(23,925)
1,126,942
$
$
Weighted
Average
Fair Value at
Grant Date
1.71
10.24
2.54
6.86
8.08
The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2020 and 2021 was
$2.56 and $10.24, respectively.
As of December 31, 2021, there was $6.2 million of total unrecognized compensation cost related to unvested shares
subject to outstanding Service-Based RSUs. That cost is expected to be expensed over a remaining weighted-average
period of approximately 1.8 years.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company recorded $1.5 million, $1.0 million and $3.9 million of expense during the years ended December 31,
2019, 2020 and 2021, respectively, related to the Service-Based RSUs. The Company has not recorded any tax benefit
related to its Service-Based RSU expense.
Employee Stock Purchase Plan
On May 7, 2013, the Company adopted an employee stock purchase plan (the “ESPP”), pursuant to which eligible
employees may purchase shares of the Company’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 each year. 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 on
September 1, 2013.
The Company recorded $0.0 million of expense during the years ended December 31, 2019 and 2020 and $0.1 million
of expense during the year ended December 31, 2021 related to the ESPP. The Company has not recorded any tax benefit
related to its ESPP expense. As of December 31, 2021, the Company had issued an aggregate of 669,915 shares pursuant
to the ESPP.
Amazon Warrant
On April 16, 2021, the Company entered into a Project Addendum to Fuel Pricing Agreement (“Fuel Agreement”)
with Amazon Logistics, Inc., a subsidiary of Amazon.com, Inc. (“Amazon”), and a Transaction Agreement with Amazon
(the “Transaction Agreement”), pursuant to which, among other things, the Company issued to Amazon.com NV
Investment Holdings LLC, a subsidiary of Amazon (“Amazon Holdings”), a warrant to purchase up to an aggregate of
53,141,755 shares (the “Warrant Shares”) of the Company’s common stock at an exercise price of $13.49 per share, which
was a 21.3% premium to the $11.12 closing price of the common stock on April 15, 2021.
The Warrant Shares vest in multiple tranches, the first of which for 13,283,445 Warrant Shares vested upon execution
of the Fuel Agreement. Subsequent tranches will vest over time based on fuel purchases by Amazon and its affiliates, up
to a total of $500.0 million, excluding any payments attributable to “Pass Through Costs,” which consist of all costs
associated with the delivered cost of gas and applicable taxes determined by reference to the selling price of gallons or gas
sold.
Under the Transaction Agreement, the Company was required to use commercially reasonable efforts to obtain the
approval of its stockholders with respect to the issuance of Warrant Shares in excess of 50,595,531 shares of common
stock, pursuant to The Nasdaq Stock Market LLC’s Listing Rule 5635(b) (the “Stockholder Approval”). On June 14, 2021,
the Company obtained Stockholder Approval.
As a result of the issuance of additional shares of common stock under the ATM Programs and in accordance with
the terms of the warrant, on June 14, 2021, the number of shares of the Company’s common stock that may be purchased
pursuant to the warrant, at an exercise price of $13.49 per share, increased by an aggregate of 5,625,959 shares (the
“Additional Warrant Shares”). The Additional Warrant Shares vest in multiple tranches, the first of which for 1,406,490
Additional Warrant Shares vested on June 14, 2021. Subsequent tranches of the Additional Warrant Shares will vest over
time based on fuel purchases by Amazon and its affiliates, consistent with the vesting schedule for the Warrant Shares as
described above. The right to exercise the warrants and receive the Warrant Shares and Additional Warrant Shares (the
“Amazon Warrant”) that have vested expires April 16, 2031.
Amazon Holdings may not exercise the Amazon Warrant to the extent such exercise would cause Amazon Holdings
to beneficially own more than 4.999% of the number of shares of Common Stock outstanding immediately after giving
effect to such exercise (excluding any unvested portion of the Amazon Warrant) (the “Beneficial Ownership Limitation”).
Amazon Holdings may, however, waive or modify the Beneficial Ownership Limitation by providing written notice to the
Company sixty-one (61) days before such waiver or modification becomes effective (or immediately upon written notice
97
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
to the Company to the extent the Company is subject to certain acquisition transactions pursuant to a tender or exchange
offer).
Non-cash stock-based sales incentive contra-revenue charges (“Amazon Warrant Charges”) associated with the
Amazon Warrant are recognized as the customer purchases fuel and vesting conditions become probable of being achieved,
based on the grant date fair value of the Amazon Warrant. The fair values of the Amazon Warrant were determined as of
the grant date in accordance with ASC 718, Compensation – Stock Compensation, using the Black-Scholes option pricing
model and the following assumptions:
Dividend yield
Expected volatility
Risk-free interest rate
Expected term in years
April 16, 2021 June 14, 2021
0.0%
66.46%
1.59%
10.0
0.0%
67.97
1.49%
9.8
The volatility amounts used were estimated based on the historical volatility of the Company’s common stock over a
period matching the assumed term of the Amazon Warrant. The expected terms used were based on the term of the Amazon
Warrant at the date of issuance. The risk-free interest rates used were based on the U.S. Treasury yield curve for the
expected term of the Amazon Warrant at the date of issuance.
The following table summarizes the Amazon Warrant activity for the year ended December 31, 2021:
Outstanding and unvested as of December 31, 2020
Granted
Vested
Outstanding and unvested as of December 31, 2021
Warrant
Shares
—
58,767,714
(14,689,935)
44,077,779
As a result of the immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares, the Company
recognized Amazon Warrant Charges, in the second quarter of 2021, of $76.6 million and a customer incentive asset of
$38.4 million representing Amazon Warrant Charges associated with future contractually required minimum fuel
purchases which will be recognized as the fuel is purchased.
During the year ended December 31, 2021, Amazon Warrant Charges in the consolidated statements of operations
were $83.6 million. Amazon Warrant Charges during the year ended December 31, 2021 included $76.6 million from the
immediate vesting of a portion of the Warrant Shares and Additional Warrant Shares and $7.0 million associated with fuel
purchases. As of December 31, 2021, the Company had a customer incentive asset of $12.4 million and $22.1 million,
classified in “Prepaid expenses and other current assets” and “Notes receivable and other long-term assets, net,”
respectively, in the accompanying consolidated balance sheets.
Note 14 —Income Taxes
The components of income (loss) before income taxes for the years ended December 31, 2019, 2020 and 2021 are as
follows (in thousands):
U.S.
Foreign
Total income (loss) before income taxes
98
2019
2020
2021
$ 14,981 $ (11,216) $ (93,117)
(919)
$ 14,117 $ (11,220) $ (94,036)
(864)
(4)
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The provision for income taxes for the years ended December 31, 2019, 2020 and 2021 consists of the following (in
thousands):
Current:
State
Foreign
Total current
Deferred:
Federal
State
Total deferred
Total expense
2019
2020
2021
$
$
116 $
4
120
293
445
738
858 $
80 $
109
189
48
72
120
309 $
54
(4)
50
18
51
69
119
Income tax expense (benefit) for the years ended December 31, 2019, 2020 and 2021 computed using the federal
income tax rate of 21% as of December 31, 2019, 2020 and 2021 consists of the following (in thousands):
Computed expected tax (benefit)
Nondeductible expenses
Tax rate differential on foreign earnings
Joint ventures
Amazon warrants
Tax credits
Other
Change in valuation allowance
Total tax expense
$
2020
2021
2019
2,964 $ (2,356) $ (19,747)
617
2,775
3,087
189
(144)
245
(2)
(5,059)
3,745
3,707
—
—
(5,299)
(4,037)
(10,314)
1,463
1,559
665
19,191
466
7,571
119
858 $
309 $
$
On December 20, 2019, AFTC was retroactively extended beginning January 1, 2018 through December 31, 2020.
As a result, all AFTC revenue for vehicle fuel the Company sold in the 2018 and 2019 calendar year was recognized during
the year ended December 31, 2019. AFTC revenues for vehicle fuel the Company sold in the 2020 and 2021 calendar year
were recognized during the year ended December 31, 2020 and 2021, respectively. AFTC for vehicle fuel sales expired
on December 31, 2021, and it is not known whether or when AFTC will be reinstated for vehicle fuel sales made after
December 31, 2021.
The Company recorded a federal tax benefit of $10.5 million, $4.2 million and $4.9 million related to the exclusion
of AFTC associated with 2019, 2020 and 2021 fuel sales in excess of its fuel tax obligation, respectively. These amounts
increased the Company’s deferred tax asset and the Company’s deferred tax asset valuation allowance.
99
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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, 2020 and 2021 are as follows (in thousands):
2020
2021
Deferred tax assets:
Accrued expenses
Lease obligations
Alternative minimum tax and general business credits
Stock option expense
Amazon warrants
Other
Depreciation and amortization
Loss carryforwards
Total deferred tax assets
Less valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Right-of-use assets
Commodity swap contracts
Goodwill
Investments in joint ventures and partnerships
Total deferred tax liabilities
Net deferred tax liabilities
$
4,940 $
6,938
6,233
6,648
—
1,545
1,635
119,708
147,647
(134,974)
12,673
5,379
11,388
6,787
7,214
16,026
3,167
2,582
128,514
181,057
(162,018)
19,039
(6,788)
(1,596)
(2,221)
(2,926)
(13,531)
$
(858) $
(11,266)
(649)
(2,534)
(5,517)
(19,966)
(927)
As of December 31, 2021, the Company had federal, state and foreign net operating loss carryforwards of
approximately $500.1 million, $370.9 million and $2.7 million, respectively. The Company’s federal, state and foreign
net operating loss carryforwards will, if not utilized, expire beginning in 2026, 2022 and 2030, respectively. The Company
also has federal tax credit carryforwards of $6.8 million that will expire beginning in 2026. Due to the change of ownership
provisions of Internal Revenue 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 assets will not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers projected future taxable income and tax planning strategies in making this assessment. As of
December 31, 2020 and 2021, the Company provided a valuation allowance of $135.0 million and $162.0 million,
respectively, to reduce the net deferred tax assets due to uncertainty surrounding the realizability of these assets. The
increase in the valuation allowance for the year ended December 31, 2021 of $27.0 million was primarily attributable to
an increase in losses without benefit.
For the year ended December 31, 2021, the Company did not have any offshore earnings of certain non-U.S.
subsidiaries which are permanently reinvested outside the United States.
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 on the technical merits of the position. The Company has unrecognized tax benefits
of $50.6 million as of December 31, 2021 that, if recognized, would not result in a tax benefit since it would be fully offset
with a valuation allowance.
100
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended
December 31, 2019, 2020 and 2021 (in thousands):
Unrecognized tax benefit—December 31, 2019
Gross increases—tax positions in current year
Gross increases—tax positions in prior year
Unrecognized tax benefit—December 31, 2020
Gross increases—tax positions in current year
Gross increases—tax positions in prior year
Gross decreases—tax positions in prior year
Unrecognized tax benefit—December 31, 2021
$
$
41,475
2,954
870
45,299
3,508
2,142
(364)
50,585
The increase in the Company’s unrecognized tax benefits in the years ended December 31, 2020 is primarily
attributable to the portion of AFTC offset by the fuel tax the Company collected from its customers. The increase in the
Company’s unrecognized tax benefits in the years ended December 31, 2021 is primarily attributable to the warrants issued
to its customer and the portion of AFTC offset by the fuel tax the Company collected from its customers.
ASC 740, Income Taxes, requires the Company to accrue interest and penalties where there is an underpayment of
taxes based on the Company’s best estimate of the amount ultimately to be paid. The Company’s policy is to recognize
interest accrued related to unrecognized tax benefits and penalties as income tax expense. The Company recognized
interest and penalties related to uncertain tax positions of $0.0 million for each of the years ended December 31, 2019,
2020 and 2021.
The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s
tax years for 2018 through 2021 are subject to examination by various tax authorities. Although the Company is no longer
subject to U.S. examination for years before 2018, and for state tax examinations for years before 2017, taxing authorities
can adjust the net operating losses that arose in earlier years if and when the net operating losses reduce future income. In
addition, the Company is required to indemnify SAFE&CEC S.r.l. for taxes that are imposed on CEC for pre-contribution
tax periods.
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 resolution of an uncertain tax position, but the Company believes that its reserves for income
taxes reflect the most probable outcomes. The Company adjusts the reserve, as well as the related interest and penalties,
in light of changing facts and circumstances. The amount of penalties accrued is immaterial. Settlement of any particular
position 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 net operating 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 of resolution. The Company does not expect a
significant increase or decrease in its uncertain tax positions within the next twelve months.
Note 15 —Commitments and Contingencies
Environmental Matters
The Company is subject to federal, state, local and foreign environmental laws and regulations. The Company does
not anticipate any expenditures to comply with such laws and regulations that would have a material impact on the
Company’s 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.
101
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Litigation, Claims and Contingencies
The Company may become party to various legal actions that arise in the ordinary course of its business. The Company
is also subject to audit by tax and other authorities for varying periods in various federal, state, local and foreign
jurisdictions, and disputes may arise during the course of these audits. It is impossible to determine the ultimate liabilities
that the Company may incur resulting from any of these lawsuits, claims, 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 an outcome could have a material adverse effect upon the Company’s consolidated financial position,
results of operations, or liquidity. The Company does not, however, anticipate such an outcome and it believes the ultimate
resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results
of operations, or liquidity.
Long-Term Take-or-Pay Natural Gas Purchase Contracts
The Company has entered into one long-term CNG supply contract to purchase CNG, on a take-or-pay basis, that
expires in June 2022. As of December 31, 2021, the fixed commitments under this contract totaled approximately $0.1
million for the year ending December 31, 2022.
The Company has entered into quarterly fixed price natural gas purchase contracts with take-or-pay commitments
extending through June 2023. As of December 31, 2021, the fixed commitments under these contracts totaled
approximately $1.2 million for each of the years ending December 31, 2022 and 2023.
Long-Term Natural Gas Supply Contract
In June 2017, the Company’s subsidiary, NG Advantage, entered into an arrangement with bp for the supply, sale and
transportation of CNG over a five-year period starting in December 2018 and expiring February 2022 (see Note 4). The
arrangement is customary and ordinary course. As of December 31, 2021, the commitments for the specified volume under
this contract were estimated to be approximately $1.1 million for the year ending December 31, 2022.
bpJV Capital Call Contribution
In December 2021, the bpJV authorized a capital call in the amount of $143.2 million with bp and the Company each
required to contribute $71.6 million. Proceeds from the bpJV Capital Call will be used to fund working capital needs and
to fund RNG production facility projects undertaken by the bpJV. As of December 31, 2021, the Company has paid $20.0
million related to the bpJV Capital Call. The remaining contribution balance of $51.6 million will be paid on or prior to
June 30, 2022.
Note 16 —Leases
The Company’s operating leases are comprised of real estate for fueling stations, office spaces, warehouses, a LNG
liquefaction plant, and office equipment, and its finance leases are comprised of vehicles.
NG Advantage has provided residual value guarantees on leases of certain vehicles aggregating $1.0 million to the
lessors. NG Advantage expects to owe these amounts in full and therefore they have been included in the measurement of
the lease liabilities and ROU assets.
Certain of the Company’s real estate leases contain variable lease payments, including payments based on a change
in the index or gasoline gallon equivalents of natural gas dispensed at fueling stations. These variable lease payments
cannot be determined at the commencement of the lease, are not included in the ROU assets and lease liabilities, and are
recorded as a period expense when incurred.
102
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Lessee Accounting
As of December 31, 2020 and 2021, the Company’s finance and operating lease asset and liability balances were as
follows (in thousands):
Finance leases:
Land, property and equipment, gross
Accumulated depreciation
Land, property and equipment, net
Current portion of finance lease obligations
Long-term portion of finance lease obligations
Total finance lease liabilities
Operating leases:
Operating lease right-of-use assets
Current portion of operating lease obligations
Long-term portion of operating lease obligations
Total operating lease liabilities
2020
2021
$
$
$
$
4,915 $
(1,905)
3,010 $
840 $
2,552
3,392 $
5,617
(2,646)
2,971
846
2,427
3,273
$
25,967 $
42,537
$
$
2,822 $
23,698
26,520 $
3,551
39,431
42,982
The components of lease expense for finance and operating leases consisted of the following (in thousands):
Finance leases:
Depreciation on assets under finance leases
Interest on lease liabilities
Total finance leases expense
Operating leases:
Lease expense
Lease expense on short-term leases
Variable lease expense
Sublease income
Total operating leases expense
Year Ended December 31,
2021
2020
733 $
185
918 $
809
181
990
6,287 $
847
2,593
(736)
8,991 $
7,313
205
3,321
(726)
10,113
$
$
$
$
103
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Supplemental information on finance and operating leases is as follows (dollars in thousands):
Operating cash outflows from finance leases
Operating cash outflows from operating leases
Financing cash outflows from finance leases
Assets obtained in exchange for new finance lease liabilities (1)
ROU assets obtained in exchange for operating lease liabilities (1)
Weighted-average remaining lease term - finance leases
Weighted-average remaining lease term - operating leases
Weighted-average discount rate - finance leases
Weighted-average discount rate - operating leases
Year Ended December 31,
2021
2020
185 $
5,503 $
1,242 $
181
5,804
789
1,337 $
96 $
879
19,515
$
$
$
$
$
December 31, December 31,
2020
3.59 years
10.81 years
2021
2.87 years
12.31 years
5.27%
8.40%
5.22%
7.55%
(1) These amounts are excluded from the accompanying consolidated statements of cash flows as they are non-cash investing, operating and/or
financing activities.
The following schedule represents the Company’s maturities of finance and operating lease liabilities as of
December 31, 2021 (in thousands):
Fiscal year:
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Less amount representing interest
Present value of lease liabilities
Lessor Accounting
Finance Leases Operating Leases
$
$
990 $
893
1,305
390
—
—
3,578
(305)
3,273 $
6,148
6,037
6,087
6,028
5,840
38,033
68,173
(25,191)
42,982
The Company leases fueling station equipment to customers that contain an option to extend and an end-of-term
purchase option. Receivables from these leases are accounted for as finance leases, specifically sales-type leases, and are
included in “Other receivables” and “Notes receivable and other long-term assets, net” in the accompanying consolidated
balance sheets.
The Company recognizes the net investment in the lease as the sum of the lease receivable and the unguaranteed
residual value, both of which are measured at the present value using the interest rate implicit in the lease.
During the years ended December 31, 2020 and 2021, the Company recognized $0.5 million and $0.4 million,
respectively, in “Interest income” on its lease receivables.
104
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following schedule represents the Company’s maturities of lease receivables as of December 31, 2021 (in
thousands):
Fiscal year:
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Less amount representing interest
Present value of lease receivables
Note 17 – 401(k) Plan
$
$
1,182
962
962
962
1,034
2,339
7,441
(1,908)
5,533
The Company has established a savings plan (“Savings Plan”) which is qualified under Section 401(k) of the Internal
Revenue Code. Eligible employees may 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. The Company may also make discretionary
contributions to the Savings Plans, subject to limitations. For each of the years ended December 31, 2019, 2020 and 2021
the Company contributed approximately $1.3 million, $1.5 million and $1.6 million, respectively, of matching
contributions to the Savings Plan.
Note 18 – Net Income (Loss) Per Share
The following table sets forth the computations of basic and diluted earnings per share for the years ended
December 31, 2019, 2020 and 2021 (in thousands, except share and per share amounts):
Net income (loss) attributable to Clean Energy Fuels Corp.
$
2019
20,421 $
2020
(9,864) $
2021
(93,146)
Weighted-average common shares outstanding
Dilutive effect of potential common shares from restricted stock
units, stock options and stock warrants
Weighted-average common shares outstanding - diluted
Basic income (loss) per share
Diluted income (loss) per share
204,573,287
200,657,912
213,118,694
1,414,222
205,987,509
—
200,657,912
$
$
0.10 $
0.10 $
(0.05) $
(0.05) $
—
213,118,694
(0.44)
(0.44)
The following potentially dilutive securities have been excluded from the diluted net income (loss) per share
calculations because their effect would have been antidilutive. Although these securities were antidilutive for these periods,
they could be dilutive in future periods.
(in shares)
Stock options
Convertibles notes
Restricted stock units
Amazon warrant shares
Total
2019
7,652,463
3,164,557
—
—
10,817,020
2020
2021
8,142,831 17,153,671
1,112,783
—
1,126,942
978,716
58,767,714
—
77,048,327
10,234,330
105
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 19 —Related Party Transactions
TotalEnergies S.E.
During the years ended December 31, 2020 and 2021, the Company recognized revenue of $7.8 million and $4.9
million, respectively, related to RINs and LNG sold to TotalEnergies and its affiliates in the ordinary course of business,
AFTC credits, and settlements on commodity swap contracts (Note 7). As of December 31, 2020 and 2021, the Company
had receivables from TotalEnergies of $0.9 million and $1.4 million, respectively.
During the years ended December 31, 2020 and 2021, the Company paid TotalEnergies $0.7 million and $2.0 million,
respectively, for expenses incurred in the ordinary course of business, settlements on commodity swap contracts (Note 7),
and the guaranty fee under the CSA (Note 12). As of December 31, 2020 and 2021, the amount due to TotalEnergies was
$0.0 million and $0.1 million, respectively.
SAFE&CEC S.r.l
During the years ended December 31, 2020 and 2021, the Company received $1.2 million and $0.2 million,
respectively, from SAFE&CEC S.r.l. in the ordinary course of business. As of December 31, 2020, the Company had
receivables from SAFE&CEC S.r.l. of $0.2 million. Receivables balance as of December 31, 2021 was immaterial.
During the years ended December 31, 2020 and 2021, the Company paid SAFE&CEC S.r.l. $4.8 million and $9.6
million, respectively, for parts and equipment in the ordinary course of business. As of December 31, 2020 and 2021, the
Company had payables to SAFE&CEC S.r.l. of $0.9 million and $0.2 million, respectively.
TotalEnergies JV and bpJV
Pursuant to LLC agreements under the TotalEnergies JV and the bpJV, the Company manages the day-to-day
operations of RNG projects under the joint ventures in exchange for management fees. During the year ended December
31, 2021, the Company recognized management fee revenue of $0.4 million. As of December 31, 2021, the Company had
receivables from the joint ventures of $0.4 million.
Note 20 —Reportable Segments and Geographic Information
Disclosures are required for certain information regarding operating segments, products and services, geographic areas
of operation and major customers. Segment reporting is based on the “management approach,” which assesses, how
management organizes the Company’s operating segments for which separate financial information is (1) available and
(2) evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in
assessing performance. The Company’s CODM is its Chief Executive Officer.
The Company operates in a single segment to supply natural gas. In making operating decisions, the CODM primarily
considers consolidated financial information, accompanied by volumes delivered information. The assessment of operating
results and the allocation of resources among the components of the business are made by the CODM and are based on
gross margins and volumes delivered by market sector and volume type. Contracts are evaluated based on the economics
of a mix of products and services for a customer.
The table below presents the Company’s revenue, operating income (loss) and long-lived assets by geographic area
(in thousands). 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 the Company’s geographic areas.
Geographic revenue data reflect internal allocations and are therefore subject to certain assumptions and the Company’s
methodology. Accordingly, revenue, operating income (loss), and long-lived assets shown for each geographic area may
not be the amounts that would have been reported if the geographic areas were independent of one another. Revenue by
106
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
geographic area is categorized based on where services are rendered and finished goods are sold. Operating income (loss)
by geographic area is categorized based on the location of the entity selling the finished goods or providing the services.
Long-lived assets by geographic are categorized based on the location of the assets.
2019
2020
2021
Revenue:
United States
Canada
Total revenue
Operating income (loss):
United States
Canada
Total operating income (loss)
Long-lived assets:
United States
Canada
Total long-lived assets
$ 338,549 $ 281,546 $ 252,310
3,336
$ 344,065 $ 291,724 $ 255,646
10,178
5,516
$
$
10,805 $
(877)
9,928 $
(9,853) $ (94,157)
(891)
(9,844) $ (95,048)
9
$ 415,548 $ 383,463 $ 440,770
630
$ 415,774 $ 383,665 $ 441,400
226
202
The Company’s goodwill and intangible assets as of December 31, 2019, 2020 and 2021 relate to its United States
operations, and its subsidiaries, Clean Energy Cryogenics and NG Advantage (see Note 4).
Note 21 —Concentrations
During the years ended December 31, 2019, 2020 and 2021, one, three, and zero suppliers, respectively, each
accounted for 10% or more of the Company’s natural gas expense relating to CNG and LNG purchases.
During the years ended December 31, 2019, 2020 and 2021, no single customer accounted for 10% or more of the
Company’s total revenue.
Note 22 —Subsequent Events
NG Advantage Debt Refinancing
In January 2022, NG Advantage entered into a second amendment to the Berkshire ALA pursuant to which Berkshire
Bank agreed to lend NG Advantage $14.0 million (the “Berkshire Term Loan 2”). The Berkshire Term Loan 2 bears
interest at 5.00% with principal and interest payable in 59 equal monthly installments and a balloon payment due on
January 31, 2027. The debt is collateralized by various trailers and station assets of NG Advantage. In connection with the
Berkshire Term Loan 2, NG Advantage extinguished $11.1 million of existing debt obligations consisting of $10.4 million
in cash payoffs and an application of $0.8 million in deposits held with the former lenders.
In connection with the second amendment to the Berkshire ALA, Berkshire Bank released $7.0 million, classified in
“Restricted cash” on the accompanying consolidated balance sheet, to the Company related to the Company’s limited
guaranty under the Berkshire ALA. Concurrently, the Company issued an irrevocable standby letter of credit to Berkshire
Bank for $7.0 million as collateral under the second amendment to the Berkshire ALA. The standby letter of credit is valid
until specified release conditions are satisfied and is collateralized by the Company’s revolving line of credit, reducing the
total amount available under the line of credit to $11.0 million.
Stock Repurchase Activities
Subsequent to December 31, 2021, through the date of filing of this Report (the "filing date"), the Company
repurchased 511,010 shares of its common stock under the Repurchase Program for a total cost of $3.0 million (exclusive
107
CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
of fees and commissions) at an average price of $5.85 per share. As of the filing date, the Company had utilized a total of
$20.4 million to repurchase shares of its common stock in the open market and had a total of $29.6 million of authorized
funds remaining under the Repurchase Program.
108
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 submit under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the SEC, 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.
Our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial
Officer (our principal executive and principal financial officers, respectively) of the effectiveness of our disclosure controls
and procedures as of December 31, 2021, the end of the period covered by this report. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of
December 31, 2021.
Changes in Internal Control Over Financial Reporting
We regularly review and evaluate our internal control over financial reporting, and from time to time we may make
changes to our processes and systems to improve controls or increase efficiencies. Such changes may include, among
others, implementing new and more efficient systems, consolidating activities, and migrating processes.
There were no changes in our internal control over financial reporting that occurred during the quarter ended
December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act) for our Company. Our management, with the participation of our Chief
Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting
as of December 31, 2021. In making this assessment, our management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on
this assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting
was effective. Our independent registered public accounting firm, KPMG LLP, has issued an attestation report on our
internal control over financial reporting, which is included in Item 8. “Financial Statements and Supplementary Data” of
this report.
Inherent Limitations of Disclosure Controls and Procedures and Internal Control Over Financial Reporting
In designing our disclosure controls and procedures and internal control over financial reporting, management
recognizes that any controls 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 controls and procedures must reflect
the fact that there are resource constraints, and management necessarily applies its judgment in evaluating the benefits of
possible controls and procedures relative to their costs. Because of these inherent limitations, our disclosure and internal
controls may not prevent or detect all instances of fraud, misstatements or other control issues. In addition, projections of
any evaluation of the effectiveness of disclosure or internal controls to future periods are subject to risks, including, among
others, that controls may become inadequate because of changes in conditions or that compliance with policies or
procedures may deteriorate.
109
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
110
Item 10. Directors, Executive Officers and Corporate Governance.
PART III
We have adopted a written code of ethics that applies to our employees, officers and directors, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar
functions. A current copy of the code is posted under “Corporate Governance” on the Investor Relations section of our
website, www.cleanenergyfuels.com. To the extent required by applicable rules adopted by the SEC and the Nasdaq Stock
Market LLC, we intend to disclose future amendments to certain provisions of the code, or waivers of such provisions
granted to executive officers and directors, in this location on our website at www.cleanenergyfuels.com.
The remaining information required by Item 10 is incorporated by reference to our definitive proxy statement for our
2022 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended
December 31, 2021.
Item 11. Executive Compensation.
The information required by Item 11 is incorporated by reference to our definitive proxy statement for our 2022 annual
meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31,
2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by Item 12 is incorporated by reference to our definitive proxy statement for our 2022 annual
meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31,
2021.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by Item 13 is incorporated by reference to our definitive proxy statement for our 2022 annual
meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31,
2021.
Item 14. Principal Accountant Fees and Services.
The information required by Item 14 is incorporated by reference to our definitive proxy statement for our 2022 annual
meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31,
2021.
111
Item 15. Exhibits and Financial Statement Schedules.
(a)(1) Consolidated Financial Statements
PART IV
The following items are filed in Item 8. Financial Statements and Supplementary Data of this report:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes 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
because they are not required, not applicable, or the required information is otherwise included.
Schedule II - Valuation and Qualifying Accounts
(In thousands)
Balance as of December 31, 2018
Charges (benefit) to operations
Deductions
Balance as of December 31, 2019
Charges (benefit) to operations
Deductions
Balance as of December 31, 2020
Charges (benefit) to operations
Deductions
Balance as of December 31, 2021
(a)(3) Exhibits
$
Credit Losses
on Accounts
Receivables
Allowance for Allowance for
Credit Losses
on Notes
Receivables
4,163
931
(1,763)
3,331
1,250
(476)
4,105
650
—
4,755
1,919 $
908
(415)
2,412
796
(1,873)
1,335
77
(207)
1,205 $
$
The information required by this Item 15(a)(3) is set forth on the exhibit index, which immediately precedes the
signature page to this report and is incorporated herein by reference.
Item 16. Form 10-K Summary.
We have elected not to provide summary information.
112
EXHIBIT INDEX
Exhibit
Number
Description
3.1
Restated Certificate of Incorporation, as
Incorporated herein by reference to the following filings:
Form
Filed as Exhibit 3.1 to the Quarterly
Report on Form 10-Q for the quarter
ended June 30, 2018.
August 7, 2018
Filed on
amended by the Certificate of
Amendment to the Restated Certificate
of Incorporation of the Registrant dated
May 28, 2010, as further amended by
the Certificate of Amendment to the
Restated Certificate of Incorporation of
the Registrant dated May 8, 2014.
3.1.1
Certificate of Amendment to the
Restated Certificate of Incorporation of
Clean Energy Fuels Corp. dated June 8,
2018.
Filed as Exhibit 3.1.1 to the Quarterly
Report on Form 10-Q for the quarter
ended June 30, 2018.
August 7, 2018
3.1.2
Certificate of Amendment to Restated
Filed as Exhibit 3.1 to the Current Report
June 15, 2021
Certificate of Incorporation, dated June
14, 2021.
on Form 8-K
3.2
Amended and Restated Bylaws.
Filed as Exhibit 3.2 to the Current Report
February 23, 2011
on Form 8-K.
3.2.1
Amendment No. 1 to Amended and
Filed as Exhibit 3.2.1 to the Current
February 27, 2014
Restated Bylaws.
Report on Form 8-K.
4.1
Specimen Common Stock Certificate.
Filed as Exhibit 4.1 to the Registration
Statement on Form S-1, as amended.
March 27, 2007
4.2
Form of Replacement Note issued by
Filed as Exhibit 4.9 to the Current Report
June 18, 2013
the Registrant.
on Form 8-K.
4.3*
Description of Clean Energy Fuels
Corp. Capital Stock.
4.4†
Warrant to Purchase Common Stock of
Clean Energy Fuels Corp., between
Clean Energy Fuels Corp. and
Amazon.com NV Investment Holdings
LLC, dated as of April 16, 2021.
Filed as Exhibit 4.4 to the Current Report
April 16, 2021
on Form 8-K.
10.1+
Form of Indemnification Agreement.
Filed as Exhibit 10.4 to the Registration
Statement on Form S-1, as amended.
March 27, 2007
10.2+
2006 Equity Incentive Plan—Form of
Filed as Exhibit 99.5 to the Registration
August 14, 2007
Notice of Stock Option Grant and Stock
Option Agreement.
Statement on Form S-8.
10.3*††
Ground Lease dated November 3, 2006
among the Registrant, Clean Energy
Construction and U.S. Borax, Inc.
113
10.4*
First Amendment to Ground Lease
dated October 28, 2008 among Clean
Energy LNG, LLC, Clean Energy
Construction and U.S. Borax, Inc.
10.5+
Amended and Restated 2006 Equity
Filed as Exhibit 10.63 to the Annual
March 12, 2012
Incentive Plan.
Filing on Form 10-K for the fiscal year
ended 2011.
10.6+
Clean Energy Fuels Corp. Employee
Stock Purchase Plan.
Filed as Exhibit Annex A to Schedule
14A Definitive Proxy Statement.
March 28, 2013
10.7+
2006 Equity Incentive Plan - Form of
Notice of Stock Option Grant.
Filed as Exhibit 10.104 to the Quarterly
Report on Form 10-Q for the quarter
ended March 31, 2015.
May 11, 2015
10.8+
Amended and Restated Employment
Filed as Exhibit 10.106 to the Current
December 31,
Agreement dated December 31, 2015,
between the Registrant and Andrew J.
Littlefair.
Report on Form 8-K.
2015
10.9+
Amended and Restated Employment
Filed as Exhibit 10.107 to the Current
December 31,
Agreement dated December 31, 2015,
between the Registrant and Robert M.
Vreeland.
Report on Form 8-K.
2015
10.10+
Amended and Restated Employment
Filed as Exhibit 10.108 to the Current
December 31,
Agreement dated December 31, 2015,
between the Registrant and Mitchell W.
Pratt.
Report on Form 8-K.
2015
10.11+
Amended and Restated Employment
Filed as Exhibit 10.109 to the Current
December 31,
Agreement dated December 31, 2015,
between the Registrant and Barclay F.
Corbus.
Report on Form 8-K.
2015
10.12+
Clean Energy Fuels Corp. 2016
Performance Incentive Plan.
Filed as Exhibit 10.114 to the Current
May 27, 2016
Report on Form 8-K.
10.13+
Clean Energy Fuels Corp. 2016
Performance Incentive Plan-Form of
Notice of Stock Option Grant and
Terms and Conditions 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
10.14+
Clean Energy Fuels Corp. 2016
Performance Incentive Plan-Form of
Notice of Stock Unit Award and Terms
and Conditions 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
114
10.15+
Form of Option Surrender Agreement.
Filed as Exhibit 10.120 to the Quarterly
Report on Form 10-Q for the quarter
ended March 31, 2017.
May 4, 2017
10.16
Series A Preferred Units Issuance
Agreement dated July 14, 2017, by and
between Clean Energy and NG
Advantage LLC.
Filed as Exhibit 10.122 to the Quarterly
Report on Form 10-Q for the quarter
ended September 30, 2017.
November 2,
2017
10.17
10.18
Stock Purchase Agreement dated May
9, 2018, between the Registrant and
Total Market Services, S.A.
Filed as Exhibit 10.125 to the Quarterly
Report on Form 10-Q for the quarter
ended March 31, 2018.
May 10, 2018
Voting Agreement dated May 9, 2018,
among the Registrant, Total Market
Services, S.A., and the directors and
officers of the Registrant signatory.
Filed as Exhibit 10.126 to the Quarterly
Report on Form 10-Q for the quarter
ended March 31, 2018.
May 10, 2018
10.19
Form of Registration Rights Agreement
dated June 13, 2018, between the
Registrant and Total Market Services,
S.A.
Filed as Exhibit 10.127 to the Quarterly
Report on Form 10-Q for the quarter
ended March 31, 2018.
May 10, 2018
10.20
Term Credit Agreement, dated as of
Filed as Exhibit 10.129 to the Annual
March 12, 2019
January 2, 2019, between the Registrant
and Société Générale.
Report on Form 10-K for the year ended
December 31, 2018.
10.21
Credit Support Agreement, dated as of
January 2, 2019, by and between the
Registrant and Total Holdings USA,
Inc.
Filed as Exhibit 10.130 to the Annual
March 12, 2019
Report on Form 10-K for the year ended
December 31, 2018.
10.22
Amended and Restated 2016
Performance Incentive Plan.
Filed as Exhibit 10.1 to the Current
May 18, 2020
Report on Form 8-K.
10.23††
10.24††
10.25††
Memorandum of Understanding, dated
December 18, 2020, between Clean
Energy and BP Products North America
Inc.
Filed as Exhibit 10.24 to the Annual
March 9, 2021
Report on Form 10-K for the year ended
December 31, 2020.
USD $50,000,000 Loan Agreement,
dated December 18, 2020, between
Clean Energy and BP Products North
America Inc.
Filed as Exhibit 10.25 to the Annual
March 9, 2021
Report on Form 10-K for the year ended
December 31, 2020.
Joint Venture Agreement, dated March
3, 2021, between Clean Energy
Renewable Fuels, LLC and Total
Biogas Holdings USA, LLC.
Filed as Exhibit 10.26 to the Annual
March 9, 2021
Report on Form 10-K for the year ended
December 31, 2020.
115
10.26††
Limited Liability Company Agreement
of CE Renewco, LLC between Clean
Energy and BP Products North America
Inc.
Filed as Exhibit 10.27 to the Current
April 15, 2021
Report on Form 8-K.
10.27††
Transaction Agreement, between Clean
Energy Fuels Corp. and Amazon.com,
Inc., dated as of April 16, 2021.
Filed as Exhibit 10.27 to the Current
April 16, 2021
Report on Form 8-K.
21.1*
Subsidiaries.
23.1*
Consent of Independent Registered
Public Accounting Firm KPMG LLP.
24.1*
Power of Attorney (included on the
signature page to this report).
31.1*
Certification of Andrew J. Littlefair,
President and Chief Executive Officer,
pursuant to Rule 13a-14(a) or 15d-14(a)
of the Securities Exchange Act of 1934,
as adopted pursuant 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 Exchange Act of 1934, as
adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1**
Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act
of 2002, executed by Andrew J.
Littlefair, President and Chief
Executive Officer, and Robert M.
Vreeland Chief Financial Officer.
101
The following materials from the
Registrant’s Annual Report on Form
10-K for the year ended December 31,
2021, formatted in iXBRL (Inline
eXtensible Business Reporting
Language):
(i) Consolidated Balance Sheets;
(ii) Consolidated Statements of
Operations;
(iii) Consolidated Statements of
Comprehensive Income (Loss);
116
(iv) Consolidated Statements of
Stockholders’ Equity;
(v) Consolidated Statements of Cash
Flows; and
(vi) Notes to Consolidated Financial
Statements.
104
Cover Page Interactive Data File
(formatted as iXBRL and contained in
Exhibit 101)
+ Management contract or compensatory plan or arrangement.
†
Portions of this exhibit have been omitted pursuant to the grant of a request for confidential treatment and the non-
public information has been filed separately with the SEC.
†† Certain portions of this document that constitute confidential information have been redacted in accordance with
Item 601(b)(10) of Regulation S-K.
*
Filed herewith.
** Furnished herewith.
117
Pursuant 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 its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
CLEAN ENERGY FUELS CORP.
By:
/s/ ANDREW J. LITTLEFAIR
Andrew J. Littlefair
President and Chief Executive Officer
Date: February 24, 2022
POWER OF ATTORNEY
IN WITNESS WHEREOF, each person whose signature appears below constitutes and appoints Andrew J. Littlefair
and Robert M. Vreeland as his true and 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 any and 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 such
certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, and
in each case file the same with the Securities and Exchange Commission, hereby approving, ratifying and confirming all
that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.
118
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 registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ ANDREW J. LITTLEFAIR
Andrew J. Littlefair
/s/ ROBERT M. VREELAND
Robert M. Vreeland
/s/ STEPHEN A. SCULLY
Stephen A. Scully
President, Chief Executive Officer (Principal
Executive Officer) and Director
February 24, 2022
Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer)
February 24, 2022
Chairman of the Board and Director
February 24, 2022
/s/ LIZABETH ARDISANA
Lizabeth Ardisana
Director
/s/ JAMES C. MILLER III
James C. Miller III
Director
/s/ LORRAINE A. PASKETT
Lorraine A. Paskett
Director
/s/ KARINE BOISSY-ROUSSEAU
Karine Boissy-Rousseau
Director
/s/ KENNETH M. SOCHA
Kenneth M. Socha
Director
/s/ VINCENT C. TAORMINA
Vincent C. Taormina
Director
/s/ PARKER WEIL
Parker Weil
Director
/s/ LAURENT WOLFFSHEIM
Laurent Wolffsheim
Director
February 24, 2022
February 24, 2022
February 24, 2022
February 24, 2022
February 24, 2022
February 24, 2022
February 24, 2022
February 24, 2022
119