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OFFON

CLEAN ENERGY FUELS CORP.

(CLNE)
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CLEAN ENERGY FUELS : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

05/06/2021 | 04:25pm EDT
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 unaudited condensed 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 condensed
consolidated financial statements. For additional context with which to
understand our financial condition and results of operations, refer to the MD&A
included in our Annual Report on Form 10-K for our fiscal year ended December
31, 2020, which was filed with the Securities and Exchange Commission ("SEC") on
March 9, 2021, as well as the audited consolidated financial statements and
notes included therein (collectively, our "2020 Form 10-K").

Cautionary Note Regarding Forward-Looking Statements

This MD&A and the other disclosures in this report contain 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, although the absence of
these words does not mean that a statement is not forward-looking. The
forward-looking statements we make in this discussion include statements about,
among other things, our future financial and operating performance, our growth
strategies, including expectations regarding our delivery and sales of RNG and
Environmental Credits (as defined below), and anticipated trends in our industry
and our business.

The preceding list is not intended to be an exhaustive list of all 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. 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 these
forward-looking statements. Factors that might cause or contribute to such
differences include, among others, those discussed under "Risk Factors" in Item
1A of this report, as such factors may be amended, supplemented or superseded
from time to time by other reports we file with 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 effect 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.

All of our forward-looking statements in this report are made only as of the
date of this document and, except as required by law, we undertake no obligation
to update publicly any forward-looking statements for any reason, including to
conform these statements to actual results or to 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.

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 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

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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; 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; and obtain federal,
state and local tax credits, grants and incentives.

At present, we see the best use of RNG is 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 3.9
million heavy duty trucks operating in the U.S. that use over 35 billion GGEs of
diesel per year. We deliver RNG to the transportation market through 545 fueling
stations we own, operate or supply in 40 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 the 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 March 31,
2021, we served over 1,000 fleet customers operating over 48,000 vehicles on our
fuels.

Longer term, we expect to also be able 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 have the capability to add electric vehicle charging at our station sites,
and we believe our RNG can be used to generate clean electricity to power
electric vehicles.

Impact of COVID-19

The COVID-19 pandemic has resulted, and is likely to continue to result, in
significant economic disruption and has adversely affected and will likely
continue to adversely affect our business. Except as described herein, the
COVID-19 pandemic has not resulted in any adverse effects to our operations,
including financial reporting systems, internal control over financial reporting
and disclosure controls and procedures. Our technicians and O&M services
continued to operate effectively, and we believe our supply chain has not been
disrupted. Additionally, we have adopted and applied protocols and procedures in
accordance with federal, state and local government policies and mandates and
Centers for Disease Control guidelines for our offices.

We began to see the negative effects of COVID-19 on volumes delivered in
mid-March 2020 and continued to see declines in volumes delivered through March
31, 2021, as compared to the respective periods in 2019 and 2020. We saw our
volumes bottom in the second quarter of 2020 and have since seen improvement in
volumes as volumes delivered for the first quarter of 2021 increased 3% over the
second quarter of 2020. Additionally, volumes delivered in March 2021 increased
3% compared to March 2020. The negative effects of COVID-19 in relation to our
volumes continue to be seen in the airports (fleet services) and public transit
customer markets, which were down by between 16% and 22% during the three months
ended March 31, 2021 compared to the comparable 2020 period due to federal,
state and local government mandates to restrict normal daily activities, as well
as travel bans, quarantines and "shelter-in-place" orders. Although many of
these restrictions have been lifted or scaled back in recent months, the
continued prevalence of COVID-19 in certain areas has resulted in the
re-imposition of certain restrictions and may lead to other restrictions being
re-implemented in response to efforts to reduce the spread of COVID-19. These
measures, which may remain in place for a significant amount of time, may
further adversely affect airports, public transit and government fleet customer
markets.

Our volume of GGEs delivered for the three months ended March 31, 2021 declined 7% compared to the three months ended March 31, 2020. 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 effects of the COVID-19 pandemic.


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It is possible that the prolonged effect of the COVID-19 pandemic could
negatively affect our future volumes. Declines in volume have resulted and could
continue to result in lower gross margin dollars year-over-year 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 continue to affect our AFTC revenue as a portion of the decline in
volume is from 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, low oil prices and the adoption of 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 II, 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 $146.2 million as of March 31, 2021, and $7.6 million of current
debt. We will also collect receivables related to the 2020 and 2021 AFTC revenue
in 2021 and the first half of 2022; we expect AFTC revenue to be approximately
$20 million for 2021 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:




                                Three Months Ended
                                    March 31,
Revenue (in millions)           2020          2021
Volume-related (1)            $    75.1$    68.1
Station construction sales          5.5           4.5
AFTC (2)                            5.4           4.5
Total                         $    86.0$    77.1

(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 6. The following table summarizes our volume-related revenue in the
    periods:



                                                    Three Months Ended
                                                        March 31,
Revenue (in millions)                               2020          2021
Fuel sales and performance of O&M services        $    63.6$   60.6
Change in fair value of derivative instruments          5.6        (2.0)
RIN Credits                                             2.5          5.6
LCFS Credits                                            3.4          3.9
Total volume-related revenue                      $    75.1$   68.1

(2) Represents the federal alternative fuel tax credit that we refer to as AFTC,

which is currently available for vehicle fuel sales made through December 31,

    2021. AFTC may not be reinstated for vehicle fuel sales made after
    December 31, 2021.


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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 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, 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, 2018, 2019 and 2020 and for the three months ended
March 31, 2020 and 2021:




                                                       Year Ended                Three Months Ended
                                                      December 31,                   March 31,
Gasoline gallon equivalents delivered (in
millions)                                      2018       2019       2020        2020          2021
CNG (1)                                         299.5      335.7      321.0         84.1          78.6
LNG                                              66.0       65.1       61.5         15.2          13.8
Total                                           365.5      400.8      382.5         99.3          92.4



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, 2018, 2019 and 2020 and for the
three months ended March 31, 2020 and 2021, were as follows:




                                                       Year Ended                Three Months Ended
                                                      December 31,                   March 31,
Gasoline gallon equivalents of RNG
delivered (in millions)                        2018       2019       2020        2020          2021
CNG                                              81.5      112.5      124.4         29.3          30.1
LNG                                              28.6       30.8       28.9          6.7           6.9
Total                                           110.1      143.3      153.3         36.0          37.0





                                                       Year Ended                Three Months Ended
                                                      December 31,                   March 31,
Gasoline gallon equivalents delivered (in
millions)                                      2018       2019       2020        2020          2021
O&M services                                    157.3      158.5      138.5         34.1          35.1
Fuel (1)                                        133.6      162.4      157.6         42.7          37.5
Fuel and O&M services (2)                        74.6       79.9       86.4         22.5          19.8
Total                                           365.5      400.8      382.5         99.3          92.4



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, 2018, 2019 and 2020 and for the three months ended March 31, 2020
and 2021, were as follows:




                                                       Year Ended               Three Months Ended
                                                      December 31,                  March 31,
Gasoline gallon equivalents of RNG
delivered (in millions)                        2018       2019       2020       2020          2021
Fuel                                             64.3       87.3       86.2        21.2          19.2
Fuel and O&M services (2)                        45.8       56.0       67.1        14.8          17.8
Total                                           110.1      143.3      153.3        36.0          37.0





                                                       Year Ended                Three Months Ended
                                                      December 31,                   March 31,
Other operating data (in millions)             2018       2019       2020        2020          2021
Station construction cost of sales            $  25.1$  23.5$  24.0$     5.1$    4.0
Gross margin (3) (4)                          $ 133.5$ 132.0$ 106.3$    33.1$   26.7
Net income (loss) attributable to Clean
Energy Fuels Corp. (3)                        $ (3.8)$  20.4$ (9.9)$     1.7$  (7.2)


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(1) As noted above, amounts include our proportionate share of the GGEs sold as

CNG by our joint venture MCEP. GGEs sold by this joint venture were 0.5

million, 0.4 million and 0.3 million for the years ended December 31, 2018,

2019 and 2020, respectively, and 0.1 million for each of the three months

ended March 31, 2020 and 2021.

(2) Represents GGEs at stations where we provide both fuel and O&M services.

(3) Includes the following amounts of AFTC revenue: $26.7 million, $47.1 million

and $19.8 million for the years ended December 31, 2018, 2019 and 2020, and

$5.4 million and $4.5 million for the three months ended March 31, 2020 and

2021, respectively.

(4) Gross margin includes an unrealized gain (loss) from the change in fair value

of commodity swap and customer fueling contracts of $10.3 million, $(6.6)

million and $2.1 million for the years ended December 31, 2018, 2019 and

2020, respectively, and $5.6 million and $(2.0) million for the three months

ended March 31, 2020 and 2021, respectively. See Note 6 for more information

regarding the commodity swap and customer contracts.

Recent Developments


Total Joint Venture. On March 3, 2021, we entered an agreement ("Total JV
Agreement") with Total that created a 50/50 joint venture ("Total JV") to
develop ADG RNG production facilities in the U.S. The Total JV Agreement
contemplates that the Total JV will invest up to $400 million of equity in
production projects, and Total and the Company each committed to initially
provide $50 million for the Total JV. To fund our equity in the Total JV, we
have the option to borrow $20 million from Société Générale pursuant to the term
credit agreement described in Note 12. Total has also agreed to provide credit
support of $65.0 million to support our development in the RNG value chain,
including $45.0 million for contracted RNG fueling infrastructure.



SG Credit Agreement. On March 12, 2021, we amended the credit agreement with
Société Générale, a company incorporated as a société anonyme under the laws of
France ("SG"), to permit the Company to use up to $45.0 million of loan proceeds
to fund certain station build costs and up to $20.0 million to fund Total JV
Equity Obligations.



bp Joint Venture. On April 13, 2021, we entered an agreement ("bp JV Agreement")
with BP Products North America ("bp") that created a 50/50 joint venture
("bpJV") to develop ADG RNG production facilities in the United States. Pursuant
to the bp JV Agreement, bp and the Company have committed to provide $50 million
and $30 million, respectively, with bp and the Company each receiving 30 million
of Class A Units and bp also receiving 20 million of Class B Units. bp's initial
$50 million contribution consisted of all unpaid principal outstanding under the
loan agreement dated December 18, 2020, pursuant to which bp advanced us $50
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. We have the option, exercisable prior
to August 31, 2021, to commit an additional $20 million to the bpJV and force
conversion of bp's Class B Units into Class A Units. 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.

Amazon. On April 16, 2021, in connection with execution of a Project Addendum to
Fuel Pricing Agreement with Amazon Logistics, Inc., a subsidiary of Amazon
("Fuel Agreement"), we entered into a Transaction Agreement with Amazon (the
"Transaction Agreement"), pursuant to which, among other things, we issued to
Amazon Holdings a warrant (the "Warrant") to purchase up to an aggregate of
53,141,755 shares (the "Warrant Shares") of 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, excluding any payments attributable to "Pass Through
Costs," which consist all costs associated with the delivered cost of gas and
applicable taxes determined by reference to the selling price, gallons or gas
sold. Importantly, if all the vesting conditions of the Amazon Warrant are
satisfied, Amazon will have purchased hundreds of millions of GGEs of RNG from
us.

Under the Transaction Agreement we are 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 Common Stock (such number of
shares, the "Share Cap"), as may be required pursuant to the Nasdaq Global
Select Market's ("Nasdaq") Listing

                                       31

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Rule 5635(b) (the "Stockholder Approval"). Until the Stockholder Approval is
obtained, Nasdaq Listing Rule 5635(b) may restrict the issuance of shares of
Common Stock exceeding the Share Cap pursuant to, and upon the exercise of, the
Warrant. In connection with obtaining the Stockholder Approval and pursuant to
the Transaction Agreement, we agreed to file a proxy statement and hold a
meeting of our stockholders as promptly as practicable to obtain the Stockholder
Approval. To the extent the Stockholder Approval is not obtained at such
stockholder meeting, at Amazon's request, we are required to cause another
stockholder meeting to be held every twelve (12) months until either the
Stockholder Approval is obtained, or the term of the Warrant expires. We will
seek the Stockholder Approval at our 2021 annual meeting of stockholders, which
is scheduled to be held on June 14, 2021.

We believe a 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 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 incenting Amazon to purchase the maximum amount of
fuel under the Fuel Agreement is important for our trajectory.

For the year ended December 31, 2021, the Warrant is expected to result in
non-cash contra revenue charges of approximately $76 million, which will impact
the Company's operating income. Additional non-cash contra revenue charges will
be recognized in subsequent years as Amazon purchases fuel and Warrant Shares
vest.

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%.

Business Risks and Uncertainties and Other Trends

Our business and prospects are exposed to numerous risks and uncertainties. For
more information, see "Risk Factors" in Part II, Item 1A of this report. In
addition, our performance in any period may be affected by various trends in our
business and our industry, including certain seasonality trends. See the
description of the key trends in our past performance and anticipated future
trends included in the MD&A contained in our 2020 Form 10-K. Except as set forth
below, and in "Impact of COVID-19" above, there have been no material changes to
such trends as described in the MD&A contained in our 2020 Form 10-K.

The market for natural gas as a vehicle fuel is a relatively new and developing
market, and has experienced 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 and more limited than we anticipated. Also, other
important markets, including airports, refuse and public transit, had slower
volume and customer growth in 2020 and in the three months ended March 31, 2021
that we expect to continue, principally due to the COVID-19 pandemic and the
efforts taken to reduce its spread.

Market prices for RINs and LCFS Credits can be volatile and unpredictable, and
the prices for such credits can be subject to significant fluctuations. The
value of RINs and LCFS Credits (derived from market prices) can materially
affect our revenue. For example, since approximately the beginning of June 2019
to January 2020, market prices for RINs trended to historical lows. Although RIN
prices have generally increased since late January 2020, prices have fluctuated
significantly during 2021 and will likely continue to be volatile. Further, LCFS
Credit prices have fluctuated significantly during 2021 and will likely continue
to be volatile.

The market price of our common stock can be volatile and unpredictable. During
the first quarter of 2021, our stock price fluctuated. If a decline of our
market capitalization were sustained we may need to perform goodwill impairment
tests more frequently and it is possible that our goodwill could become impaired
which could result in a material non-cash charge and adversely affect our
results of operations.

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Debt Compliance

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 March 31, 2021, we were in compliance with all of these covenants.

Risk Management Activities


Our risk management activities are discussed in the MD&A contained in our 2020
Form 10-K. During the three months ended March 31, 2021, there were no material
changes to these activities.

Critical Accounting Policies and Estimates


The preparation of our condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America
requires the appropriate application of accounting policies, some of which
require us to make estimates and assumptions that affect the amounts reported
and related disclosures in our condensed consolidated financial statements. We
base our estimates on historical experience and various assumptions that we
believe are reasonable under the circumstances. To the extent there are
differences between these estimates and actual results, our financial condition
or results of operations could be materially affected.

Our critical accounting policies and the related judgments and estimates are
discussed in the MD&A contained in our 2020 Form 10-K, except for our adoption
of new guidance for income taxes effective January 1, 2021, which is described
in Note 1. There have been no other material changes to our critical accounting
policies as described in the MD&A contained in our 2020 Form 10-K.

Recently Adopted and Recently Issued Accounting Standards

See Note 1 for a description of recently adopted accounting standards and recently issued accounting standards pending adoption.

Results of Operations

The table below presents, for each period indicated, each line item of our statements of operations data as a percentage of our total revenue for the period. Additionally, the narrative that follows provides a comparative discussion of certain of these line items between the periods indicated. Historical results are not indicative of the results to be expected in the current period or any future period.


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Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020




                                                              Three Months Ended
                                                                  March 31,
                                                               2020         2021
Statements of Operations Data:
Revenue:
Product revenue                                                  88.0 %       87.7 %
Service revenue                                                  12.0         12.3
Total revenue                                                   100.0        100.0
Operating expenses:
Cost of sales (exclusive of depreciation and amortization
shown separately below):
Product cost of sales                                            54.3         58.1
Service cost of sales                                             7.3          7.3
 Change in fair value of derivative warrants                      0.5      

-

 Selling, general and administrative                             21.2      
  27.8
Depreciation and amortization                                    13.9         15.2
Total operating expenses                                         97.2        108.4
Operating loss                                                    2.8        (8.4)
Interest expense                                                (2.6)        (1.9)
Interest income                                                   0.4          0.3
Other income, net                                                 0.2          0.9
Income (loss) from equity method investments                      0.2      
 (0.6)
Loss before income taxes                                          1.0        (9.7)
Income tax expense                                              (0.1)        (0.1)
Net loss                                                          0.9        (9.8)
Loss attributable to noncontrolling interest                      0.9      

0.4

Net loss attributable to Clean Energy Fuels Corp.                 1.8 %    
 (9.4) %




Revenue. Revenue decreased by $8.9 million to $77.1 million in the three months
ended March 31, 2021, from $86.0 million in the three months ended March 31,
2020. This decrease was primarily due to the change in fair value of our
commodity swap and customer contracts entered into in connection with our Zero
Now truck financing program, and decreases in station construction sales and
AFTC revenue, 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 in connection with our Zero Now
truck financing program, increased by $0.7 million between periods, attributable
to an increase in the effective price per gallon earned, partially offset by a
decrease in gallons 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 $(7.6) million,
as we recognized an unrealized gain of $5.6 million in 2020 compared to an
unrealized loss of $(2.0) million in 2021 (see Note 6 for more information).

Our effective price per gallon earned increased by $0.06 per gallon to $0.76 per
gallon in the three months ended March 31, 2021 compared to $0.70 per gallon in
the three months ended March 31, 2020, excluding the effect of the change in
fair value of derivative instruments 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 per gallon was due
to certain sales of natural gas commodities into higher daily spot pricing
markets and higher RIN prices.

Station construction sales decreased by $1.0 million between periods due to decreased construction activities.

AFTC revenue decreased by $0.9 million between periods due to the decrease in
gallons sold during the three months ended March 31, 2021 compared to the three
months ended March 31, 2020.

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Cost of sales. Cost of sales decreased by $2.5 million to $50.4 million in the
three months ended March 31, 2021, from $52.9 million in the three months ended
March 31, 2020. This decrease was primarily due to a decrease in gallons
delivered and a decrease in the cost of station construction activities,
partially offset by an increase in our effective cost per gallon.

Our effective cost per gallon increased by $0.02 per gallon to $0.50 per gallon
in the three months ended March 31, 2021 from $0.48 per gallon in the
three months ended March 31, 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.

Change in fair value of derivative warrants. Change in fair value of derivative
warrants, all of which were issued by our subsidiary, NG Advantage, decreased by
$0.4 million to $0.0 million in the three months ended March 31, 2021, from $0.4
million in the three months ended March 31, 2020. The warrants expired
unexercised on July 2, 2020.

Selling, general and administrative. Selling, general and administrative
expenses increased by $3.1 million to $21.4 million in the three months ended
March 31, 2021, from $18.3 million in the three months ended March 31, 2020.
This increase was primarily driven by an increase in stock compensation expense
due to equity awards granted during the period and the Company's higher stock
price.

Depreciation and amortization. Depreciation and amortization decreased by $0.2
million to $11.7 million in the three months ended March 31, 2021, from $11.9
million in the three months ended March 31, 2020, primarily due to a lower
amount of depreciable assets.

Interest expense. Interest expense decreased by $0.8 million to $1.4 million in
the three months ended March 31, 2021, from $2.2 million in the three months
ended March 31, 2020, primarily due to lower average interest rates on
outstanding indebtedness between periods.

Other income, net. Other income, net increased by $0.5 million from $0.2 million
in the three months ended March 31, 2020 to $0.7 million in the three months
ended March 31, 2021, primarily due to certain other fees earned.

Income (loss) from equity method investments. Income (loss) from equity method
investments changed to a loss of $0.4 million for the three months ended March
31, 2021 from income of $0.1 million for the three months ended March 31, 2020,
primarily due to the operating results of SAFE&CEC S.r.l.

Income tax expense. Income tax expense was $0.1 million in each of the three
months ended March 31, 2021 and 2020, primarily comprised of deferred taxes
associated with goodwill and the Company's expected state tax expense which was
consistent between the periods.

Loss attributable to noncontrolling interest. During the three months ended
March 31, 2021 and 2020, we recorded a gain of $0.3 million and $0.8 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.

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


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and the principal and interest we are obligated to pay on our indebtedness,
which could be influenced by the potential 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.

Cash Flows
Cash provided by operating activities was $3.3 million in the three months ended
March 31, 2021, compared to cash used in operating activities of $4.3 million in
the comparable 2020 period. The increase in cash provided by operating
activities was primarily attributable to changes in working capital resulting
from the timing of receipts and payments of cash in the three months ended March
31, 2021 from the comparable 2020 period.

Cash used in investing activities was $6.1 million in the three months ended
March 31, 2021, compared to cash provided by investing activities of $30.4
million in the comparable 2020 period. The decrease in cash from investing
activities was primarily attributable to a decrease in net maturities of
short-term investments and a decrease in earn-out proceeds received in
connection with our sale of certain RNG production facilities and assets to bp
in 2017 (the "bp Transaction") from the comparable period in 2020.

Cash provided by financing activities was $6.5 million in the three months ended
March 31, 2021, compared to $5.6 million used in financing activities in the
comparable 2020 period. The increase in cash provided by financing activities
was primarily attributable to an increase in proceeds from issuances of common
stock and debt, reimbursements from Chevron in connection with the Adopt-a-Port
program, and lower share repurchases during the three months ended March 31,
2021 from the comparable 2020 period.

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 originally called for approximately $27.5 million in capital
expenditures in 2021. 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. As a result of the Fuel Agreement with Amazon
Logistics, Inc., we expect to deploy an additional $45.0 million to $60.0
million in capital expenditures to build fueling stations that will support RNG
fueling volume contracted to Amazon Logistics, Inc. during the year ended
December 31, 2021. We may fund up to $45.0 million of these expenditures through
our SG Facility. Further, in 2021 we anticipate deploying up to approximately
$100.0 million to develop dairy RNG production projects.

In addition, NG Advantage may spend up to $0.4 million in 2021 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.


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We had total indebtedness, consisting of our debt and finance leases, of
approximately $90.4 million in principal amount as of March 31, 2021, of which
approximately $3.5 million, $61.6 million, $9.9 million, $5.4 million, $1.7
million, and $8.3 million is expected to become due in 2021, 2022, 2023, 2024,
2025 and thereafter, respectively. Importantly, $50.0 million of such
indebtedness was "Preformation Funding" provided by bp to fund capital costs and
expenses incurred prior to formation of the bpJV. All such Preformation Funding
was contributed to the bpJV in April 2021 and is no longer outstanding
indebtedness. We expect our total interest payment obligations relating to this
indebtedness to be approximately $2.3 million in 2021, $0.4 million of which had
been paid when due as of March 31, 2021. 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 $51.7 million as of March 31, 2021, of which
approximately $4.0 million, $5.5 million, $5.4 million, $5.4 million, $5.3
million and $26.1 million is expected to become due in 2021, 2022, 2023, 2024,
2025 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 $7.0 million drawn as of March 31,
2021.

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.

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.


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; and sales of assets. As of March 31, 2021, we had total cash and
cash equivalents and short-term investments of $146.2 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 Part II, Item 1A. "Risk
Factors" of this report.

In October 2018 and January 2019, we entered into agreements to implement our
Zero Now truck financing program, which permit us to incur up to an additional
$93.0 million of indebtedness through the beginning of January 2022, obligate us
to make certain interest and other fee payments in connection with this debt and
THUSA's related guaranty (which payments will vary in amount but will be owed by
us regardless of the revenue we may receive from the program), and subject us to
potential additional payments in connection with related commodity swap
arrangements. We are permitted to use any proceeds we receive under these
agreements to fund the incremental cost of trucks purchased or financed by
operators that participate in the Zero Now program. Additionally, in March 2021,
the term credit agreement with SG was amended to permit us to use proceeds up to
$45.0 million to fund certain station build costs and up to $20.0 million to
fund Total JV Equity Obligations.

See Note 12 for more information about all of our outstanding debt.

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 expected 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


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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 dairy RNG production projects and
fueling stations to support contracted RNG fueling volume as described above
under "Liquidity and Capital Resources - Capital Expenditures, Indebtedness and
Other Uses of Cash," we will be required to raise significant additional capital
during 2021.

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.

Off-Balance Sheet Arrangements


As of March 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 $29.6 million;

? One long-term natural gas purchase contract with a take-or-pay commitment;

? Quarterly fixed price natural gas purchase contracts with take-or-pay

commitments;

? One long-term natural gas sale contract with a fixed supply commitment 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 March 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 March
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 March
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.

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In addition, as of March 31, 2021, we had a fixed supply arrangement with UPS for the supply and sale of 170.0 million GGEs of RNG through March 2026.

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Financials (USD)
Sales 2021 297 M - -
Net income 2021 -58,7 M - -
Net cash 2021 21,5 M - -
P/E ratio 2021 -40,6x
Yield 2021 -
Capitalization 2 355 M 2 355 M -
EV / Sales 2021 7,85x
EV / Sales 2022 6,45x
Nbr of Employees 465
Free-Float 76,5%
Chart CLEAN ENERGY FUELS CORP.
Duration : Period :
Clean Energy Fuels Corp. Technical Analysis Chart | CLNE | US1844991018 | MarketScreener
Technical analysis trends CLEAN ENERGY FUELS CORP.
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 6
Average target price 19,00 $
Last Close Price 11,78 $
Spread / Highest target 129%
Spread / Average Target 61,3%
Spread / Lowest Target -6,62%
EPS Revisions
Managers and Directors
NameTitle
Andrew J. Littlefair President, Chief Executive Officer & Director
Robert M. Vreeland Chief Financial Officer
Stephen A. Scully Chairman
Mitchell W. Pratt Chief Operating Officer
Barbara Johnson Bechthold Vice President-Administration
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