Clean Energy Fuels Corp.
Clean Energy Fuels Corp. (Form: 10-K, Received: 03/03/2016 16:30:06)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
 
 
ý
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the fiscal year ended: December 31, 2015
or
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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)
 
33-0968580
(IRS Employer Identification No.)
 
 
 
4675 MacArthur Court, Suite 800, Newport Beach, CA 92660
(Address of principal executive offices, including zip code)
 
(949) 437-1000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
 
The 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  o     No  x
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  o     No  x
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  x     No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x     No  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer   o
 
Accelerated filer  x
 
Non-accelerated filer  o
  (Do not check if a smaller
reporting company)
 
Smaller reporting company  o
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes  o     No  x
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2015 , the last business day of the registrant's second fiscal quarter, was approximately $399,840,166 (based on the closing price of the registrant's common stock as reported on such date by The NASDAQ Global Select Market). Shares of common stock held by officers and directors and holders of 10% or more of the outstanding shares of common stock have been excluded from the calculation of this amount because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of March 1, 2016 , the number of outstanding shares of the registrant's common stock was 97,360,841 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's proxy statement for its 2016 Annual Meeting of Stockholders are incorporated in Part III of this annual report on Form 10-K by reference, to the extent stated therein.



Table of Contents

Clean Energy Fuels Corp.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2015
TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this annual report on Form 10-K may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to future events or circumstances or our future financial performance and are based upon 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: "may," "will," "can," "could," "would," "should," "expect," "intend," "plan," "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. We believe that the statements that we make in this annual report on Form 10-K regarding the following subject matters are forward-looking by their nature:
expected adoption of and growth in the market for natural gas as a vehicle fuel and our ability to capture a substantial share of and enhance our leadership position within this market, when and if it expands;
future supply, demand, use and prices of crude oil and natural gas and fossil and alternative fuels, including gasoline, diesel, natural gas, biodiesel, ethanol, electricity and hydrogen;
our expectations regarding the market's perception of a need for alternative vehicle fuels generally;
our expectations regarding the market's perception of the benefits of natural gas relative to gasoline and diesel and other alternative vehicle fuels, including cost savings, supply, environmental and safety benefits;
the impact of advancements in conventional fuels and other alternative vehicle fuels and technologies, including improvements in the efficiency, fuel economy or greenhouse gas emissions of engines for conventional and alternative fuel vehicles;
the success of our initiative to build a nationwide network of truck friendly natural gas fueling stations (we refer to this network as "America's Natural Gas Highway" or "ANGH);
development, commercial availability and adoption of new natural gas engines for the U.S. heavy-duty truck market ;
the rate of adoption of natural gas vehicles, including heavy-duty trucks;
estimated incremental costs, annual fuel usage, fuel costs and annual fuel cost savings for vehicles using natural gas instead of gasoline or diesel;
the success and importance of acquisitions, partnerships and other strategic relationships;
the success of our business of producing renewable natural gas ("RNG") and selling RNG we generate and RNG we purchase from third-party producers as a vehicle fuel;
our ability to generate and sell credits generated by selling natural gas and RNG as a vehicle fuel, including Renewable Identification Numbers ("RINs" or "RIN Credits") we generate under the federal Renewable Fuel Standard ("RFS") Phase 2 and credits we generate under the California and Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits"), at prices that enable us to profitably market and sell RNG;
our ability to sell RNG we produce at prices that are at a premium to conventional natural gas prices;
plans to expand our station network and business with existing customers and to win business with new customers;
the potential for oil companies, natural gas utilities, fuel retailers, and others to enter the natural gas fuel market;
our efforts to expand our compressed natural gas ("CNG") business, through our acquisition of NG Advantage, LLC ("NG Advantage") and otherwise;
our future CNG compressor needs;
the success of our business of manufacturing and selling natural gas fuel compression equipment;
our ability to manage the international operations of our subsidiary Clean Energy Compression (formerly IMW Industries);
the existence of and our plans to participate in and eligibility for federal and state regulations, programs, incentives and grant programs that promote the use of cleaner burning fuels;

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the impact and availability of federal tax attributes, credits and incentives on our business;
strategic benefits of owning Clean Energy Compression, NG Advantage and our other subsidiaries;
more stringent emissions requirements on traditional gasoline and diesel powered vehicles, as well as on liquefied natural gas ("LNG") and CNG production, fueling stations and fuel sales;
the impact of environmental regulations and pressures on oil and natural gas supply;
projected capital expenditures, project development costs and related funding requirements;
access to equity capital and debt financing options, including, but not limited to, equipment financing, sale of convertible or non-convertible promissory notes or commercial bank financing;
the potential for a single large stockholder to exert significant influence over our corporate decisions; and
our expectations regarding our cash balances and other operating and financial results.
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Although the forward-looking statements in this report reflect our good faith judgment, based on currently available information, they are only predictions and 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 below under Item 1A. Risk Factors. As a result of these and other potential risk factors, the forward-looking statements in this annual report on Form 10-K may not prove to be accurate. All forward-looking statements in this report are made only as of the date of this document and, except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date we file this report with the Securities and Exchange Commission, or 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 Securities and Exchange Commission after the date we file this annual report on Form 10-K.
Unless the context indicates otherwise, all references to "Clean Energy," the "Company," "we," "us," or "our" in this annual report on Form 10-K refer to Clean Energy Fuels Corp., together with its majority and wholly owned subsidiaries.

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PART I
Item 1.    Business.
Overview
We are the leading provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, based on the number of stations operated and the amount of gasoline gallon equivalents ("GGEs") of CNG, LNG and RNG delivered.
Our principal business is supplying CNG, LNG and RNG (RNG can be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehicles and providing operation, repair and maintenance ("O&M") services for vehicle fleet customer stations. As a comprehensive solution provider, we also design, build, operate, service, repair and maintain fueling stations, manufacture, sell and service non-lubricated natural gas fueling compressors and other equipment used in CNG stations and LNG stations, offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets, transport and sell CNG to large industrial and institutional energy users who do not have direct access to natural gas pipelines, process and sell RNG, sell tradable credits we generate by selling natural gas and RNG as a vehicle fuel, including LCFS Credits and RIN Credits, and help our customers acquire and finance natural gas vehicles and obtain federal, state and local tax credits grants and incentives.
We target customers in a variety of markets, including heavy-duty trucking, airports, refuse, public transit, industrial and institutional energy users and government fleets, which has resulted in a broad customer base with, we believe, limited concentration risk. We seek to retain these customers by offering our robust fueling station network and superior service levels. As of December 31, 2015 , we serve approximately 986 fleet customers operating approximately 44,152 natural gas vehicles, and we own, operate or supply over 570 natural gas fueling stations in 42 states in the U.S. and in British Columbia and Ontario in Canada.
Market for Natural Gas as an Alternative Fuel for Vehicles
As of December 2015, Natural Gas Vehicles for America ("NGV America") estimates that there were approximately 1,750 natural gas fueling stations in the United States and about 153,000 natural gas vehicles on American roads, including 39,500 heavy-duty vehicles (e.g. tractors, refuse trucks and buses), 25,800 medium-duty vehicles (e.g. delivery vans and shuttles) and 87,000 light-duty vehicles (e.g. passenger cars, small utility vehicles, trucks and vans).
We believe that natural gas is an attractive alternative to gasoline and diesel for use as a vehicle fuel in the United States because it is plentiful, domestically produced, cleaner and typically cheaper than gasoline or diesel. Historically, oil, gasoline, and diesel prices have been highly volatile, while natural gas prices have generally been stable and lower than the cost of oil, gasoline and diesel on an energy equivalent basis. We also expect increasingly stringent federal, state and local air quality regulations, expanding initiatives by fleet operators to lower greenhouse gas emissions and increase fuel diversity and additional regulations mandating low carbon fuels, all of which would support increased market adoption of natural gas as an alternative to gasoline and diesel as a vehicle fuel. We believe these factors will support the development of an increased opportunity to market natural gas as a vehicle fuel in the United States.
Benefits of Natural Gas Fuel
Domestic and Plentiful Supply.     Technological advances in natural gas drilling and production, including the widespread deployment of horizontal drilling techniques and the use of hydraulic fracturing, have unlocked vast natural gas reserves. The U.S. is now the number one producer of natural gas in the world, with proven, abundant and growing reserves of natural gas.
Less Expensive.     Due to the abundance of natural gas, the cost of natural gas in the U.S. is less than the cost of crude oil, on an energy equivalent basis. Based on projections from the U.S. Energy Information Administration, we believe that natural gas will remain cheaper than gasoline and diesel for the foreseeable future. In addition, because the price of the natural gas commodity makes up a smaller portion of the cost of a GGE of CNG or LNG relative to the commodity portion of the cost of a GGE of diesel or gasoline, the price of a GGE of CNG or LNG is less sensitive to increases in the underlying commodity cost.
Cleaner.     Natural gas contains less carbon than any other fossil fuel and thus produces fewer carbon dioxide emissions when burned.  The California Air Resources Board ("CARB") has concluded that a natural gas vehicle emits fewer greenhouse gas ("GHG") emissions than a comparable gasoline or diesel fueled vehicle on a well-to-wheel basis. Additionally, a study from Argonne National Laboratory, a research laboratory operated by the University of Chicago for the U.S. Department of Energy, indicates that natural gas vehicles produce at least 13% to 21% fewer GHG emissions than comparable gasoline and diesel fueled vehicles.  For natural gas vehicles that run on Redeem, it is estimated, based on CARB data that the GHG emissions reduction ranges from 50% to 125%, depending on the source of biogas.  RNG is produced from waste streams such as landfills, animal waste digesters and waste water treatment plants. RNG production plants are connected to natural gas

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pipelines, which allow RNG to be transported to vehicle fueling stations, where it can be compressed and dispensed as CNG, and to LNG liquefaction facilities, where it is converted to LNG. We sell RNG through some of our natural gas fueling infrastructure under the brand name Redeem™. We believe Redeem™ is the first commercially available RNG vehicle fuel made from organic waste
Safer.     As reported by NGV America, CNG and LNG are relatively safer than gasoline and diesel because they dissipate into the air when spilled or in the event of a vehicle accident. When released, CNG and LNG are also less combustible than gasoline or diesel because they ignite only at relatively high temperatures. The fuel tanks and systems used in natural gas vehicles are subjected to a number of federally required safety tests, such as fire, environmental hazard, burst pressures, and crash testing, according to the U.S. Department of Transportation National Highway Traffic Safety Administration. Additionally, CNG and LNG are stored in above ground tanks and therefore cannot contaminate soil or groundwater. Further, worldwide over 17 million vehicles fuel safely with natural gas.
Natural Gas Vehicles
Natural gas vehicles use internal combustion engines similar to those used in gasoline or diesel powered vehicles. A natural gas vehicle uses sealed storage cylinders to hold CNG or LNG, specially designed fuel lines to deliver natural gas to the engine, and an engine tuned to run on natural gas. Natural gas fuels have higher octane content than gasoline or diesel, and the acceleration and other performance characteristics of natural gas vehicles are similar to those of gasoline or diesel powered vehicles of the same weight and engine class. Natural gas vehicles, whether they run on CNG or LNG, are refueled using a hose and nozzle that makes an airtight seal with the vehicle's gas tank. For heavy-duty vehicles, spark ignited natural gas vehicles generally operate more quietly than diesel powered vehicles. Natural gas vehicles typically cost more than gasoline or diesel powered vehicles, primarily due to the higher cost of the storage systems that hold the CNG or LNG.
Virtually any car, truck, bus or other vehicle is capable of being manufactured or modified to run on natural gas. Approximately 50 different manufacturers in the U.S. produce 100 models of heavy-, medium- and light-duty natural gas vehicles and engines. These vehicles include long-haul tractors, refuse trucks, regional tractors, transit buses, cement trucks, delivery trucks, vocational work trucks, school buses, shuttles, passenger sedans, pickup trucks and cargo and passenger vans. We expect that additional models and types of natural gas vehicles will become available if natural gas is increasingly adopted as a vehicle fuel in the U.S.
Products and Services
CNG Sales.     We sell CNG through fueling stations and by transporting it to customers that do not have direct access to a natural gas pipeline. CNG fueling station sales are made through stations located on our customers' properties and through our network of public access fueling stations. At these CNG fueling stations, we procure natural gas from local utilities or third-party marketers under standard, floating-rate arrangements and then compress and dispense it into our customers' vehicles. Our CNG fueling station sales are made primarily through contracts with our customers. Under these contracts, pricing is principally determined on an index-plus basis, which is calculated by adding a margin to the local index or utility price for natural gas. As a result, CNG sales revenues based on an index-plus methodology increase or decrease as a result of an increase or decrease in the price of natural gas. The remainder of our CNG fueling station sales are on a per fill-up basis at prices we set at public access stations based on prevailing market conditions.
Additionally, our subsidiary, NG Advantage, uses a fleet of 54 high-capacity tube trailers to deliver CNG to large institutions and industrial energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines. Utilizing its trailer fleet, NG Advantage creates a "virtual natural gas pipeline" that allows large oil, diesel or propane users to take advantage of the cost savings and environmental benefits of natural gas. We anticipate that NG Advantage will need to purchase or lease additional trailers in the future to transport CNG in support of its operations.
LNG Production and Sales.     LNG is natural gas that is cooled at a liquefaction facility to approximately -260 degrees Fahrenheit until it condenses into a liquid. We obtain LNG from our own plants and from third party suppliers. We own and operate LNG liquefaction plants near Houston, Texas and Boron, California, which we call the "Pickens Plant" and the "Boron Plant," respectively. The Pickens Plant has the capacity to produce 35 million gallons of LNG per year and includes tanker trailer loading facilities and a 1.0 million gallon storage tank that can hold up to 840,000 usable gallons. The Boron Plant is capable of producing 60 million gallons of LNG per year and has tanker trailer loading facilities similar to the Pickens Plant and a 1.8 million gallon storage tank that can hold up to 1.5 million usable gallons. During 2015 , we purchased 43% of our LNG from third-party suppliers and we produced the remainder of our LNG at the Pickens Plant and the Boron Plant. We purchase some LNG from third parties under "take-or-pay" contracts that require us to purchase minimum volumes of LNG at index-based rates.

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We sell LNG on a bulk basis to fleet customers who often own and operate their fueling stations, and we also sell LNG to fleet and other customers at our public-access LNG stations. We also sell LNG for non-vehicle purposes, including to customers that use LNG in oil fields or for industrial or utility applications.
We deliver LNG via our fleet of 84 tanker trailers to fueling stations, where it is stored and dispensed in liquid form into vehicles. We typically own the tanker trailers and we contract with third parties to provide tractors and drivers. Each LNG tanker trailer is capable of carrying 10,000 gallons of LNG. We sell LNG through supply contracts that are priced on an index-plus basis. LNG sales revenues based on an index-plus methodology increase or decrease as a result of an increase or decrease in the price of natural gas. We also sell LNG on a per fill-up basis at prices we set at public access stations based on prevailing market conditions. LNG generally costs more than CNG, as LNG must be liquefied and transported.
O&M Services.    We perform O&M services for CNG and LNG stations that are owned by our customers. For these services, we generally charge a per-gallon fee based on the volume of fuel dispensed at the station. As of December 31, 2015 , we had an operations team of 265 employees, comprised of 169 full-time employees performing preventative maintenance and available to respond to service requests in 42 U.S states and in Canada. In addition, we have 96 full-time employees performing preventative maintenance on Clean Energy Compression's foreign installations in Bangladesh, Colombia, Peru and China.
Station Construction and Engineering.     Since 2008, we have built 387 natural gas fueling stations, either serving as general contractor or supervising qualified third-party contractors, for ourselves or our customers. We acquired the additional stations we own that we did not build through acquisitions of assets or businesses. We use a combination of custom designed and off-the-shelf equipment to build fueling stations. Equipment for a CNG station typically consists of dryers, compressors (including those manufactured by Clean Energy Compression), dispensers and storage tanks. Equipment for a LNG station typically consists of storage tanks that hold 5,000 to 25,000 gallons of LNG and related dispensing equipment. We also offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets, which can include the construction and sale of facility modifications, such as our NGV Easy Bay product, a natural gas vapor leak barrier developed specifically for natural gas vehicle facilities.
Many of our fueling stations have separate public access areas for retail customers, which generally have the look, feel and dispensing rates of traditional gasoline and diesel fueling stations. LNG dispensing requires special training because of the extreme low temperatures of LNG.
RNG Production and Sales.     Our subsidiary Clean Energy Renewables owns RNG production facilities located at Republic Services landfills in Canton, Michigan and North Shelby, Tennessee. Clean Energy Renewables has entered into long-term fixed-price sale contracts for the majority of the RNG that we expect these facilities to produce. We are seeking to expand our RNG business by pursuing additional RNG production projects, either on our own or with project partners. We sell some of the RNG we produce through our natural gas fueling infrastructure for use as a vehicle fuel. We also purchase RNG from third party producers and sell that RNG for vehicle fuel use through our fueling infrastructure. The RNG we distribute for vehicle fuel use is distributed under the name Redeem™ .
Natural Gas Fueling Compressors.     Our subsidiary Clean Energy Compression manufactures, sells and services non-lubricated natural gas fueling compressors and related equipment for the global natural gas fueling market. Clean Energy Compression is headquartered near Vancouver, British Columbia, has an additional manufacturing facility near Shanghai, China, and has sales and service offices in Bangladesh, Colombia, Peru and the United States. Clean Energy Compression enables us to satisfy our internal compressor needs, since compressors are the most important piece of equipment for a CNG station. As the adoption of natural gas vehicles has increased our CNG station construction backlog and our compressor requirements have also increased, and we believe our compressor needs will continue to increase. Clean Energy Compression also allows us to provide certain customers with a "factory direct" offering. Since some customers do not want our full suite of services and simply want a station that they can own and operate themselves, our compressor manufacturing business allows us to offer them a high quality and low cost "equipment only" solution.
Vehicle Acquisition and Finance.     We offer vehicle finance services, including loans and leases, to help our customers acquire natural gas vehicles. Where appropriate, we apply for and receive federal and state incentives associated with natural gas vehicle purchases and pass these benefits through to our customers. We may also secure vehicles to place with customers or pay deposits with respect to such vehicles prior to receiving a firm order from our customers, which we may be required to purchase if our customer fails to purchase the vehicle as anticipated.
Sales of RINs and LCFS Credits.    We generate LCFS Credits when we sell Redeem and conventional natural gas for use as a vehicle fuel in California and Oregon, and we generate RINs when we sell Redeem for use as a vehicle fuel in the U.S. We can sell these RINs and LCFS Credits to third parties who need the credits to comply with federal and state requirements. We anticipate that we will generate and sell increasing numbers of RINs and LCFS Credits as we build our business and sell increasing amounts of CNG, LNG and RNG for use as a vehicle fuel. The market for RINs and LCFS Credits is volatile, and

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the prices for such credits are subject to significant fluctuations. Further, the value of RINs and LCFS Credits will be adversely affected by any changes to the federal and state programs under which such credits are generated and sold.
Sales and Marketing
We have sales representatives covering all of our major operating territories, including Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and Washington in the U.S., in Toronto and Vancouver in Canada and in Bangladesh, Colombia, Peru and China. At December 31, 2015 , we had 92 employees in sales and marketing, including 16 employees of Clean Energy Compression. We market primarily through our direct sales force, attendance at trade shows and participation in industry conferences and events. Our sales and marketing group works closely with federal, state and local government agencies to provide education on the value of natural gas as a vehicle fuel and to keep abreast of proposed and newly adopted regulations that affect our industry.
Key Markets and Customers
We target customers in a variety of markets, such as trucking, airports, refuse, public transit, industrial and institutional energy users and government fleets. During 2013 , 2014 and 2015 , approximately 19% , 18% and 18% of our revenues, respectively, were derived from contracts with government entities such as municipal transit fleets. We do not depend on a single customer or a few customers, the loss of which would have a material adverse effect on us.
Trucking. We believe that heavy-duty trucking represents one of the greatest opportunities for natural gas to be used as a vehicle fuel in the U.S., and as of December 31, 2015 we fuel over 3,000 heavy-duty trucks. These high-mileage trucks consume significant amounts of fuel and can benefit from the lower cost of natural gas. Many well-known shippers, manufacturers, retailers and other truck fleet operators have started to adopt natural gas fueled trucks to move their freight. Such companies include Honda, Frito-Lay, Fedex, Anheuser-Busch, Verizon, Bimbo, Johnson & Johnson, The Home Depot, AT&T, Colgate-Palmolive, Costco Wholesale, Lowes, Pepsi, UPS, MillerCoors, HP, Unilever, Starbucks, Kraft, Kroger, P&G, Hertz and Owens Corning. To help facilitate the transition of trucking fleets to natural gas, we are building America's Natural Gas Highway. Many of our existing ANGH stations were initially built to provide LNG; however, because operators are adopting LNG heavy-duty trucks and CNG heavy-duty trucks, we designed these stations to be capable of dispensing both fuels. We have been investing, and expect to continue to invest, additional capital in our ANGH stations to add CNG fueling. Many existing ANGH stations are located at Pilot Flying J Travel Centers, one of the largest truck fueling operators in the U.S. To help accelerate the adoption by heavy-duty truck fleets of natural gas, we have negotiated favorable CNG and LNG tank pricing from manufacturers, which we are passing along to our customers .
Airports. 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. Many of these airports have adopted various strategies to address tailpipe emissions, including rental car and hotel shuttle consolidation. In order to reduce emissions levels further, many airports require or encourage service vehicle operators to switch their fleets to natural gas, including airport delivery fleets, door-to-door and parking shuttles and taxis. To assist in this effort, airports are contracting with service providers to design, build and operate natural gas fueling stations in strategic locations on their properties. We serve customers at 39 airports, including Albuquerque, Atlanta Hartsfield Jackson International, Austin Bergstrom International, Baltimore Washington International, Burbank, Cleveland Hopkins International, Dallas-Ft. Worth International, Denver International, Dulles International (Washington D.C.), George Bush International (Houston), Hartford, Las Vegas, Love Field (Dallas), Logan International (Boston), Long Beach, LaGuardia (New York), John F. Kennedy International (New York), Los Angeles International, New Orleans, Newark International, Oakland International, Ontario, Orlando, Palm Springs, Philadelphia International, Phoenix Sky Harbor International, Ronald Reagan Washington National, San Francisco International, Santa Ana/John Wayne, San Diego International, SeaTac International (Seattle), Tampa International, Tucson International and Will Rogers (Oklahoma City). At these airports our representative customers include buses, delivery vehicles and taxi and van fleets, as well as parking and car rental shuttles. We believe these customers are well -suited for natural gas use because they use a relatively high volume of vehicle fuel and can be served by centralized fueling infrastructure. We estimate that vehicles serving airports in the U.S. consume an aggregate of approximately two billion gallons of fuel per year .
Refuse Haulers. According to INFORM, there are nearly 200,000 refuse trucks in the United States that collect and haul refuse and recyclables from collection points to landfills, transfer stations, waste-to-energy facilities, and material recovery facilities and that consume approximately two billion gallons of fuel per year. We fuel over 10,000 refuse vehicles. Refuse haulers are increasingly adopting trucks that run on CNG to realize operating savings and to address their customers' demands for reduced emissions. We estimate that approximately 55% of new refuse trucks in 2015 operate on natural gas, up from approximately 3% of new refuse trucks in 2008. We serve Waste Management and Republic Services, as well as other private waste haulers such as Atlas Disposal (CA), Blue Diamond Disposal (NJ), Burrtec (CA), Central Jersey Waste (NJ), Choice Waste (FL), CleanScapes (WA), V. Garofalo & Sons (NY), Homewood Disposal (IL), Mission Trail (CA), Livermore

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Sanitation (CA), USA Recycling (CT), Peoria Disposal (IL), Progressive Waste (LA,TX and Canada), Recology (Formerly Norcal Waste) CA, South San Francisco Scavenger (CA), Tidewater Chesapeake (VA), Waste Connections and Waste Pro (FL), among others. We also provide vehicle fueling services to municipal refuse fleets, including fleets in Burbank (CA), Dallas (TX), Fresno (CA), Los Angeles (CA), Sacramento (CA), San Antonio (TX), El Paso (TX), Richmond (VA), Scottsdale (AZ), Mesa (AZ), Kansas City (MO), Atlantic Counties (NJ), Huntington (NY), Smithtown (NY) , Brookhaven (NY), Atlanta (GA), Lancaster (PA) and on Long Island (NY) among other locations. We believe refuse companies are ideal customers because they can be served by centralized fueling infrastructure and they use a relatively high volume of fuel.
Transit Agencies. According to the American Public Transportation Association, there are over 67,250 municipal transit buses operating in the U.S. In many areas increasingly stringent emissions standards have limited the fueling options available to public transit operators, making them well-suited for adoption of natural gas as a preferred vehicle fuel. Also, transit agencies typically fuel at a central location and use high volumes of fuel. We estimate that transit agencies in the U.S. consume approximately 1.5 billion gallons of fuel per year. Many transit agencies have been early adopters of natural gas vehicles; over 25% of existing transit buses and over 35% of new transit buses operate on natural gas. We fuel over 8,000 transit vehicles and our U.S. public transit customers include the following: in California, Los Angeles Metropolitan Transit Authority, Foothill Transit, Long Beach Transit, Orange County Transit Authority, Santa Cruz Metropolitan, Santa Monica Big Blue Bus, OmniTrans San Bernardino, Commerce, Montebello, Torrance, Elk Grove, Glendale, Santa Clarita and Santa Cruz; in the Southwest, Dallas Area Rapid Transit (TX), Sun Metro (El Paso, TX), El Metro (Laredo, TX), Phoenix Transit (AZ), Tempe Transit (AZ), Regional Transportation Commission of Southern Nevada (Las Vegas, NV) and the public agencies in Albuquerque and Santa Fe, New Mexico; in the Midwest, the public agencies in Kansas City (MO) and Akron and Canton (OH); and on the East Coast, Bucks County (PA), Hillsborough Area Regional Transit (Tampa, FL), Jacksonville Transportation Authority (FL), and NICE Bus (Long Island, NY). We also serve public transit customers in British Columbia.
Industrial and Institutional Customers. Founded in 2011 and based in Vermont, NG Advantage delivers CNG as a substitute fuel source to large institutions and industrial facilities that do not have access to a natural gas pipeline. NG Advantage acts as a "virtual natural gas pipeline," using its fleet of 54 high-capacity tube trailers to deliver CNG to these facilities for their use. NG Advantage has focused on customers in New England and Eastern New York, but plans to expand beyond these geographic markets in the future.
Government Fleets. According to the Federal Highway Administration in 2011, there were approximately 4.0 million government fleet vehicles in operation in the United States, including those operated by federal, state and municipal entities and in California and Texas, for example, there were over 667,572 and 571,688 government vehicles, respectively, as of 2012, according to the FHA. As government regulations on pollution continue to become more stringent, government agencies are evaluating ways to make their fleets cleaner and run more economically. Our representative government fleet customers include the California Department of Transportation (Los Angeles and Orange County), State of New York, State of Colorado, City of New York (NY), City of Richmond (VA), City of Hartford (CT), City of Kansas City (MO), Lee's Summit School District (MO), City of Newark (NJ), Atlantic City (NJ), City of Columbia (MO), City of Mesa (AZ), City of Scottsdale (AZ), City of Denver (CO), City and County of Los Angeles (CA), City of Chula Vista (CA), City of Newport Beach (CA), South Coast Air Quality Management District (CA), City of Long Beach (CA), County of Maricopa (AZ), City of San Antonio (TX), City of El Paso (TX), Town of Smithtown (NY), City and County of San Francisco (CA), City of Oakland (CA), City and County of Dallas (TX), City of Phoenix (AZ), The University of California, and Oklahoma State University.
Corporate Information; Acquisitions and Divestitures
We were incorporated under the laws of the State of Delaware in 2001. In August 2008, we acquired a 70% interest in a facility that collects, processes and sells RNG collected from a landfill in Dallas, Texas. In December 2014, we sold all of our interest in that facility to our project partner. In October 2009, we acquired BAF Technologies, Inc. (together with its wholly owned subsidiary ServoTech Engineering, Inc., "BAF"), a provider of natural gas vehicle conversions and design and engineering services for natural gas engine systems. In June 2013, we sold BAF to a subsidiary of Westport Innovations, Inc. In September 2010, we acquired the advanced, non-lubricated natural gas fueling compressor and related equipment manufacturing and servicing business of IMW Industries, Ltd. (which we have renamed Clean Energy Compression). We purchased Wyoming Northstar Incorporated and its affiliated entities (which we have collectively renamed Clean Energy Cryogenics), a leading provider of station design, construction, operations and maintenance services, in December 2010. In 2011, we acquired the natural gas fueling infrastructure construction business of Weaver Electric, Inc. In March 2013, we sold our interest in Clean Energy del Peru, a CNG provider located in Peru. In May 2013, we acquired Mansfield Gas Equipment Systems, a provider of CNG station design and construction and CNG equipment repair and maintenance services. In September 2014, we formed Mansfield Clean Energy Partners LLC ("MCEP"), a joint venture with Mansfield Ventures LLC. LLC that provides natural gas fueling solutions to bulk fuel haulers in the U.S. In October 2014, we acquired a majority interest in and purchased a CNG station from NG Advantage. We anticipate pursuing additional acquisitions, divestitures, partnerships

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and investments as we become aware of opportunities that we believe we can increase our competitive advantages, expand our product offerings, take advantage of industry developments, or enhance our market position.
Tax Incentives
Since October 1, 2006 we have been eligible to receive the VETC federal alternative fuel tax credit of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that we sell as vehicle fuel. We will continue to be eligible to receive VETC through 2016, although LNG sold after December 31, 2015 is eligible for the tax credit on a per DGE basis. VETC is a renewable tax incentive and therefore may not be available after 2016. In addition, other U.S. federal and state government tax incentives are available to offset the cost of acquiring natural gas vehicles, convert vehicles to use natural gas or construct natural gas fueling stations.
Grant Programs
We apply for and help our fleet customers apply for federal, state and regional grant programs in areas where we operate. These programs provide funding for natural gas vehicle conversions and purchases, natural gas fueling station construction and vehicle fuel sold.
Competition
The market for vehicle fuels is highly competitive. The biggest competition for CNG and LNG is gasoline and diesel, as the vast majority of vehicles in the U.S. and Canada are powered by gasoline and diesel. Many of the producers and sellers of gasoline and diesel fuels are large entities that have significantly greater resources than we have. We also compete with suppliers of other alternative vehicle fuels, including ethanol, biodiesel and hydrogen fuels, as well as providers of hybrid and electric vehicles. New technologies and improvements to existing technologies may make alternatives other than natural gas more attractive to the market, or may slow the development of the market for natural gas as a vehicle fuel if such advances are made with respect to oil and gas usage. Further, for certain of our key customer markets, such as airports and public transit, we indirectly compete with companies providing alternative transportation methods that may limit these markets generally, such as Uber and Lyft.
A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, natural gas utilities and their affiliates, industrial gas companies, truck stop and fuel station operators, fuel providers and other organizations have entered or are planning to enter the market for natural gas and other alternatives for use as vehicle fuels. Many of these current and potential competitors have substantially greater financial, marketing, research and other resources than we have. We believe we have approximately 100 competitors in the market for natural gas vehicle fuels, including:
Providers of CNG fuel infrastructure and fueling services, including Trillium, AmpCNG, EVO CNG, Questar Fueling, Gain Clean Fuels, Constellation and TruStar Energy;
Travel-center operators, including Love's Travel Stops and Sapp Bros., who are adding CNG refueling infrastructure to their networks;
Fuel station owners, such as Kwik Trip, a company that owns CNG fueling stations in the Midwestern U.S.;
Shell Oil Products U.S. and Blu/TransFuels, which operate LNG fueling stations; and
Applied LNG Technology, Stabilis and Prometheus Energy, each of which distributes LNG for use as a vehicle fuel.
Several natural gas utilities and their affiliates own and operate public access CNG stations that compete with our stations. In December 2012, the California Public Utilities Commission approved a compression services tariff application by the Southern California Gas Company, allowing the utility to offer natural gas fueling infrastructure construction services that compete with our offerings. In January 2014, Northwest Natural was also granted a similar service tariff by the Oregon Public Utilities Commission. In addition, utilities or their affiliates in several other states, including Michigan, Illinois, New Jersey, North Carolina, Missouri, Maryland, Washington, Kentucky, Florida and Georgia, entered or are preparing to enter the market for natural gas vehicle fuels. Utilities and their affiliates typically have unique competitive advantages, including lower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales and marketing organizations.
We manufacture and sell CNG fueling equipment through Clean Energy Compression. The market for CNG fueling equipment is highly competitive and our competitors include Aspro, GNC Galileo, GE, SAFE, ANGI Energy Systems, and Atlas Copco. Numerous other equipment or compressor manufacturing companies may also enter this market in the future. We

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also compete with many third parties for the rights to develop RNG production facilities or acquire RNG from third party producers, as well as for customers to purchase the RNG that we produce or acquire from third party producers
We sell CNG to large industrial and institutional energy users through NG Advantage and compete with other participants in this highly competitive market, including Xpress Natural Gas, OsComp Systems and Irving Ltd.
We compete for vehicle fuel users based on price of fuel, availability and price of vehicles that operate on natural gas, convenience and accessibility of our fueling stations, quality, cleanliness and safety of our fuel, and brand recognition. As of December 31, 2015 , we owned, operated or supplied over 570 CNG and LNG fueling stations. Of these, we operate 396 CNG fueling stations, which we estimate is approximately four times the number of CNG fueling stations operated by our next largest competitor. We believe we are the only company in the U. S. or Canada that provides both CNG and LNG on a significant scale, and our natural gas fueling operations cover more states and provinces than any of our competitors. However, we expect competition to increase, particularly if and to the extent the demand for natural gas vehicle fuel and related equipment increases. Increased competition would lead to amplified pricing pressure, reduced operating margins and fewer expansion opportunities.
Government Regulation and Environmental Matters
Certain aspects of our operations are subject to regulation under federal, state, local and foreign laws. If we were to violate these laws or if the laws were to change, it would have a material adverse effect on our business, financial condition and results of operations. Regulations that significantly affect our operations are described below.
CNG and LNG Stations. To construct a CNG or LNG fueling station, we must satisfy permitting and other requirements and either we or a third party contractor must be licensed as a general engineering contractor. Each CNG and LNG fueling station must be constructed in accordance with federal, state and local regulations pertaining to station design, environmental health, accidental release prevention, above-ground storage tanks, hazardous waste and hazardous materials. We are also required to register with certain state agencies as a retailer/wholesaler of CNG and LNG.
Transfer of LNG. Federal safety standards require each transfer of LNG to be conducted in accordance with specific written safety procedures. These procedures must be located at each place of transfer and must include provisions for personnel to be in constant attendance during all LNG transfer operations.
LNG Liquefaction Plants. To build and operate LNG liquefaction plants, we must apply for facility permits or licenses to address many factors, including storm water and wastewater discharges, waste handling and air emissions related to production activities or equipment operations. The construction of LNG plants must also be approved by local planning boards and fire departments.
Financing. State agencies generally require the registration of finance lenders. For example, in California, pursuant to the California Finance Lenders Law, one of our subsidiaries is a registered finance lender with the California Department of Corporations.
Natural Gas Fueling Compressors. CNG fueling equipment is manufactured to meet the electrical and mechanical design standards of the country where the equipment will be installed. Our manufacturing facility in Canada is registered with the British Columbia Safety Authority and the Society of Mechanical Engineers for manufacturing and operating pressure vessels.
RNG. Our RNG production facilities are required to comply with Title V of the Clean Air Act. In addition, our RNG projects must produce RNG that meets the gas quality specifications of the local utilities that accept the gas. These specifications are approved by the relevant state utilities commission.
Federal RFS. In February 2010, the EPA finalized the RFS (which was established by the Energy Policy Act of 1992/2005), which creates RINs that can be generated by production and use of RNG in the transportation sector and can be sold to fuel providers that are not compliant under the RFS.
GHG Emissions. California has adopted legislation, AB 32, that calls for a cap on greenhouse gas emissions throughout California and a statewide reduction to 1990 levels by 2020 and an additional 80% reduction below 1990 levels by 2050. Further, in 2015 the Governor of California issued an executive order mandating a reduction in greenhouse gas emissions by 40% compared to 1990 levels by 2030. As of January 1, 2015, AB 32 began regulating the greenhouse gas emissions from transportation fuels, including the emissions associated with LNG and CNG vehicle fuel. Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. We estimate that we will be required to pay at least $150,000 in 2016 to comply with AB 32 with respect to our LNG vehicle fuel sales in California. Our costs in future years will depend on how much LNG vehicle fuel we sell that is regulated, CARB's guidance on the regulation of LNG vehicle fuel, potential regulatory changes and the cost of carbon credits under AB 32 at the time we purchase them. We anticipate that the

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costs we incur to comply with this legislation will be passed through to our LNG vehicle fuel purchasers, which may diminish the attractiveness of LNG as a vehicle fuel for California buyers. With respect to CNG, the regulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas is sold.  SoCalGas, the Southern California gas utility, has recently announced that it intends to charge CNG fueling customers an additional $0.27 per MMBtu beginning in April 2016 to cover its AB 32 compliance costs. We anticipate that we will pass these additional utility fees on to our customers, which will diminish the economic attractiveness of CNG vehicle fuel. In addition, we anticipate that, over time, we or our CNG customers will be required to pay more for CNG vehicle fuel to cover the increased AB 32 compliance costs of the utility. These costs will be determined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 as a result of the natural gas we or our customers buy through the utility’s pipeline. Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the complexity of the requirements that biomethane must meet in order to be exempt under AB 32 and the possibility of changes to this legislation make any exemption uncertain. Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG derived from fossil fuel natural gas. To help achieve the greenhouse gas emissions reductions for mobile sources that are mandated by AB 32, CARB approved the Low Carbon Fuel Standard, which encourages low carbon "compliant" transportation fuels (including CNG, LNG and RNG) to enter the marketplace by allowing them to generate LCFS Credits that can be sold to noncompliant regulated parties.
The federal and other state governments are considering passing similar measures to regulate and reduce greenhouse gas emissions. Any of these regulations, when and if implemented, may regulate the greenhouse gas emissions produced by our LNG production plants, our CNG and LNG fueling stations or our RNG production facilities, and/or the greenhouse gas emissions associated with the CNG, LNG and RNG we sell, and could require us to obtain emissions credits or invest in costly emissions prevention technology. We cannot estimate the potential costs associated with compliance with potential federal, state or local regulation of greenhouse gas emissions and these unknown costs are not contemplated by our current customer agreements.
We believe we are in material compliance with environmental laws and regulations and other known regulatory requirements. Compliance with these regulations has not had a material effect on our capital expenditures, earnings or competitive position but new laws or regulations or amendments to existing laws or regulations to make them more stringent, such as more rigorous air emissions requirements, proposals to make waste materials subject to more stringent and costly handling, disposal and clean-up requirements or regulations of greenhouse gas emissions, could require us to undertake significant capital expenditures in the future.
Employees
As of December 31, 2015 , we employed 994 people. We have not experienced any work stoppages and none of our employees is subject to collective bargaining agreements. We believe that our employee relations are good.
Financial Information about Segments and Geographic Areas
We operate our business in one reportable segment. For information about our revenues from external customers, operating income (loss) and long-lived assets broken down by geographic area, see note  14 to our consolidated financial statements included in this report. We are subject to certain risks attendant to our foreign operations, which are described below in Item 1A. Risk Factors.
Additional Information
Our website is located at www.cleanenergyfuels.com. We make available, free of charge on our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. The reference to our website is an inactive textual reference 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 annual report on Form 10-K before you decide to purchase shares of our common stock. We believe the risks and uncertainties described below are the most significant we face. The occurrence of any of the following risks could harm our business, financial condition, results of operations, prospects and reputation and could cause the trading price of our common stock to decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business.

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We have a history of losses and may incur additional losses in the future.
In 2013, 2014 and 2015, we incurred pre-tax losses of $63.2 million, $89.9 million, and $ 133.8 million , respectively. During these periods our losses were substantially decreased by approximately $45.4 million, $28.4 million and $ 31.0 million of revenue, respectively, from the VETC alternative fuels tax credits. We may continue to incur increasing losses or never achieve or maintain profitability, which would adversely affect our business, prospects and financial condition, and may cause the price of our common stock to fall.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
At December 31, 2015, our total consolidated indebtedness was approximately $ 572.4 million which includes amounts incurred under the 7.5% Notes, SLG Notes, 5.25% Notes and Canton Bonds, each of which is defined and discussed in note 9 to our consolidated financial statements and under “Contractual Obligations” in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this report. In addition, in February 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank, pursuant to which we have obtained a loan in the principal amount of up to $50.0 million. See note 9 to our consolidated financial statements and Item 9B. Other Information of this report for further information about our loan from PlainsCapital Bank. As of December 31, 2015 approximately $ 150.1 million , $ 5.5 million , $ 305.1 million , $ 54.7 million , $ 53.1 million and $ 4.0 million of our consolidated indebtedness matures in 2016, 2017, 2018, 2019, 2020, and thereafter, respectively. We expect our total consolidated interest payment obligations relating to our indebtedness to be approximately $ 32.0 million for the year ending December 31, 2016
Although we do not have a specific plan regarding the repurchase, redemption or restructuring of our outstanding indebtedness, we generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment if and when opportunities arise. With respect to certain of our outstanding indebtedness due in 2016, we anticipate repaying, with a combination of cash and shares of our common stock, all or some portion of the outstanding principal amount of the SLG Notes, together with accrued and unpaid interest, on or prior to their August 2016 maturity date. To this end, on March 1, 2016 and pursuant to the consent of the holders of the SLG Notes, we prepaid an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. In addition, with respect to certain of our outstanding indebtedness due in 2018, in February 2016, in light of discounted trading prices of our 5.25% Notes and other factors, our board of directors authorized and approved our use of up to $25.0 million to opportunistically purchase in the open market our outstanding 5.25% Notes. Pursuant to such approval, on February 18, 2016, we paid $16.8 million in cash to repurchase $32.5 million in face amount of our 5.25% Notes due 2018, plus accrued interest. Upon our purchase, such 5.25% Notes were surrendered to the trustee for such notes and canceled.
Our ability to make payments of the principal and interest on our indebtedness, whether at or prior to their due dates, depends on our future performance, which is subject to economic, financial, competitive and other factors, including those described in these risk factors, many of which are beyond our control. Our business may not generate cash flow from operations sufficient to service our debt. If we are, or if we expect that we will be, unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring or refinancing our debt or obtaining additional equity capital or debt financing on terms that may be onerous to us or highly dilutive to our stockholders. Our ability to pursue any of these avenues, should we decide to do so, would depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms or at the desirable time, which could result in a default on our debt obligations. Additionally, certain of the agreements governing our indebtedness contain restrictive covenants and any failure by us to comply with any of these covenants could also cause us to be in default under the agreements governing the indebtedness. In the event of any such default, the holders of the indebtedness could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of our available cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation. In addition, the substantial amount of our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and government regulations, limit our flexibility to plan for, or react to, changes in our business and industry, place us at a disadvantage compared to our competitors who have less debt or limit our ability to borrow additional amounts as needed.
We are permitted to repay up to $ 295.0 million of our consolidated indebtedness outstanding at December 31, 2015 at maturity with shares of our common stock rather than cash, with the amount of shares determined by the then-current trading price of our common stock. Any such issuance would increase the number of our outstanding shares and may significantly dilute the ownership interest of our stockholders.

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We may need to raise additional capital to continue to fund the growth of our business or repay our debt.
At December 31, 2015, we had total cash and cash equivalents of $ 43.7 million and short-term investments of $ 102.9 million . Our business plan calls for approximately $ 25.5 million in capital expenditures for 2016, as well as additional capital expenditures thereafter. We may also require capital to make principal or interest payments on our indebtedness, either prior to or at their maturity dates, or for unanticipated expenses, mergers and acquisitions and strategic investments. As a result, we may find it necessary to raise additional capital through selling assets or pursuing debt or equity financing.
Asset sales and equity or debt financing options may not be available when needed on terms favorable to us, or at all. Any sale of our assets may limit our operational capacity and could limit or eliminate any business plans that are dependent on the sold assets. Additional issuances of our common stock or securities convertible into our common stock would increase the number of our outstanding shares and dilute the ownership interest of our then-existing stockholders. We may also pursue debt financing, such as our February 2016 loan from PlainsCapital Bank,since, despite our level of consolidated debt, the agreements governing much of our existing debt do not restrict our ability to incur additional indebtedness, including secured and unsecured indebtedness, or require us to maintain financial ratios or specified levels of net worth or liquidity. Debt financing options that we may pursue include, among others, equipment financing, sales of convertible notes, high-yield debt, asset-based loans, term loans, project finance debt, municipal bond financing, loans secured by receivables or inventory or commercial bank financing. Any debt financing we obtain may require us to make significant interest payments and to pledge some or all of our assets as security. In addition, higher levels of indebtedness could increase our risk of non-repayment and could adversely affect our creditworthiness, which could limit our ability to obtain further debt or equity financing as needed and restrict our flexibility in responding to changing business and economic conditions. Further, we may incur substantial costs in pursuing any future capital-raising transactions, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. On the other hand, if we are unable to obtain capital in amounts sufficient to fund our contractual obligations, business plan, unanticipated expenses, capital expenditures, mergers, acquisitions or strategic investments, we would be forced to suspend, delay or curtail these plans, expenditures or other transactions, which could negatively affect our business and prospects.
Our success is dependent upon fleets’ and other consumers’ willingness to adopt natural gas as a vehicle fuel.
Our success is highly dependent upon the adoption by fleets and other consumers of natural gas as a vehicle fuel. Factors that may influence the adoption of natural gas as a vehicle fuel include, among others, those discussed in these risk factors. If the market for natural gas as a vehicle fuel does not develop as we expect or develops more slowly than we expect, or if a market does develop but we are not able to capture a significant share of the market or the market subsequently declines, our business, prospects, financial condition and operating results would be harmed. The market for natural gas as a vehicle fuel is a relatively new and developing market characterized by intense competition, evolving government regulation and industry standards and changing consumer demands and behaviors.
Factors that may influence the adoption of natural gas as a vehicle fuel include, among others:
Increases, decreases or volatility in the price of oil, gasoline, diesel and natural gas;

The availability of natural gas and the price of natural gas compared to gasoline, diesel and other vehicle fuels;

Natural gas vehicle cost, availability, quality, safety, design and performance, all relative to other vehicles;

Improvements in the efficiency, fuel economy or greenhouse gas emissions of engines for gasoline, diesel and alternative fuel vehicles;

The entry or exit of engine manufacturers from the market;

Perceptions about greenhouse gas emissions (also known as “fugitive methane emissions”) from natural gas production and transportation methods, natural gas fueling stations and natural gas vehicles;

The availability and acceptance of other alternative fuels and alternative fuel vehicles;

The existence of government programs, policies, regulations or incentives promoting other alternative fuels and alternative fuel vehicles;

Access to natural gas fueling stations and the convenience and cost to fuel a natural gas vehicle;


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The availability of service for natural gas vehicles;

The environmental consciousness of fleets and consumers; and

The existence and success of tax credits, government incentives and grant programs that promote the use of natural gas as a vehicle fuel.

Increases, decreases and general volatility in oil, gasoline, diesel and natural gas prices could adversely impact our business.
In recent years, the prices of oil, gasoline, diesel and natural gas have been volatile, and this volatility may continue. Market adoption of CNG, LNG and RNG as vehicle fuels could be slowed or limited if there are significant decreases in the prices of, or significant increases in the supply and availability of, gasoline and diesel, today’s most prevalent and conventional vehicle fuels, which would decrease the market’s perception of a need for alternative vehicle fuels generally, or if there are decreases in the prices of gasoline and diesel without a corresponding decrease in the price of natural gas or an increase in the price of natural gas without corresponding increases in the prices of gasoline and diesel. Any of these circumstances could cause the success or perceived success of our industry and our business to materially suffer. Part of the reason that such slowed or limited adoption of natural gas as a vehicle fuel might occur under these circumstances is due to the higher cost of natural gas vehicles compared to gasoline or diesel-powered vehicles, as the components needed for a vehicle to use natural gas add to a vehicle’s base cost. If gasoline or diesel prices drop significantly, fuel economy of gasoline- or diesel-powered vehicles improves, or the prices of CNG and LNG are not sufficiently low, operators may delay or refrain from purchasing natural gas vehicles or decide not to convert their existing vehicles to run on natural gas because of a perceived inability to recover in a timely manner the additional costs of acquiring or converting to natural gas vehicles. In addition, our profit margins are directly affected by fluctuations in natural gas, gasoline and diesel prices. In order to attract fleet operators and other consumers to convert to natural gas vehicles, we must be able to offer CNG and LNG fuel at prices significantly lower than gasoline and diesel. Decreases in the price of gasoline and diesel and increases in the price of natural gas make it more difficult for us to offer our customers attractive prices for CNG and LNG as compared to gasoline and diesel prices and maintain an acceptable margin on our sales. Further, increased natural gas prices affect the cost to us of natural gas and adversely impact our operating margins in cases where we cannot pass the increased costs through to our customers, and conversely, lower natural gas prices reduce our revenues in cases where the commodity cost is passed through to our customers.
Among the factors that can cause fluctuations in gasoline, diesel and natural gas prices are changes in supply and availability of crude oil and natural gas, storage levels, level of consumer demand, price and availability of alternative fuels, weather conditions, negative publicity surrounding natural gas drilling techniques and methods or oil production and importing, economic conditions, the price of foreign imports, government regulations and political conditions. With respect to natural gas supply and use as a vehicle fuel, there have been recent efforts to place new regulatory requirements on the production of natural gas by hydraulic fracturing of shale gas reservoirs and other means and on transporting, dispensing and using natural gas. Hydraulic fracturing and horizontal drilling techniques have resulted in a substantial increase in the proven natural gas reserves in the United States and any changes in regulations that make it more expensive or unprofitable to produce natural gas through these techniques or others, as well as any changes to the regulations relating to transporting, dispensing or using natural gas, could lead to increased natural gas prices. Additionally, crude oil prices have recently been subject to extreme volatility and a significant decrease, due in part to over-production and increased supply without a corresponding increase in demand. If these conditions continue or worsen, or if all or some combination of factors causing further volatility in natural gas, oil and diesel prices were to occur, our business and our industry would be materially harmed.
If trucks using natural gas engines are not adopted by truck operators as quickly or to the extent we anticipate, our results of operations and business prospects will be adversely affected.
We believe the development and expansion of the U.S. natural gas heavy-duty truck market, and the execution of our America’s Natural Gas Highway initiative to build a nationwide network of natural gas truck friendly fueling stations, depends upon the successful adoption of natural gas engines that are well-suited for use by heavy-duty trucks. We have no control over the marketing and sales efforts for these engines or the success of these efforts, the retail price for these engines or the number of these engines that are ultimately sold. Manufacturers may not produce natural gas engines in meaningful numbers or as quickly as we anticipate, which could contribute to continued or increased delay in adoption and deployment of natural gas trucks by operators. Other factors potentially contributing to slow or limited adoption of heavy-duty trucks powered by natural gas engines are that these trucks cost more than comparable gasoline or diesel trucks and may experience, or be perceived to experience, more operational or performance issues. Our business would be harmed if meaningful numbers of natural gas heavy-duty truck engines are not deployed, if such deployment is slower than expected, or if a substantial number of the trucks that are deployed experience performance issues with their natural gas engines or are not fueled at our stations.

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The failure of our America’s Natural Gas Highway initiative and our inability to achieve our goal to fuel a substantial number of natural gas heavy-duty trucks would materially and adversely affect our financial results and business.
We are seeking to fuel a substantial number of natural gas heavy-duty trucks and in connection with that effort we are building America’s Natural Gas Highway. Our objectives to fuel a substantial number of heavy-duty trucks and build America’s Natural Gas Highway have required, and will continue to require, a significant commitment of capital and other resources, and our ability to successfully execute our plans faces substantial risks, including, among others:
Most of our ANGH stations were initially built to provide LNG, which costs more than CNG on an energy equivalent basis. We have been, and may continue to be required to, spend significant additional capital to add CNG fueling capability to many of our ANGH stations, and we may not have sufficient capital in the future for that purpose;

Our ANGH stations may experience mechanical or operational difficulties, which could require significant costs to repair and could reduce customer confidence in our stations;

Truck and vehicle operators may not fuel at our stations due to lack of access or convenience, prices or numerous other factors;

We have no influence over the development, production, cost or availability of natural gas trucks powered by engines that are well-suited for the U.S. heavy-duty truck market. At December 31, 2015, Cummins Westport was the principal natural gas engine manufacturer for the medium- and heavy-duty market, and we have no control over whether and the extent to which Cummins Westport will remain in the natural gas engine business or whether other manufacturers will enter the natural gas engine business;

Operators may not adopt heavy-duty natural gas trucks due to cost, actual or perceived performance issues, or other factors that are outside of our control. To date, adoption and deployment of natural gas trucks has been slower and more limited than we anticipated;

We may not be able to obtain acceptable margins on fuel sales at ANGH stations; and

At December 31, 2015, we had 43 completed ANGH stations that were not open for fueling operations. We expect to open such stations when we have sufficient customers to fuel at the locations, but we do not know when this will occur. If we do not open the stations, we will continue to have substantial investments in assets that do not produce revenues equal to or greater than their costs.

We must effectively manage these risks and any other risks that may arise in connection with the ANGH build-out to successfully execute our business plan. If the U.S. market for heavy-duty natural gas trucks does not develop or if we fail to successfully execute our ANGH initiative and fuel a substantial number of natural gas heavy-duty trucks, our financial results, operations and business, and our ability to repay our debt, will be materially and adversely affected.
Automobile and engine manufacturers produce very few natural gas vehicles and engines for the United States and Canadian markets, which limits our customer base and our sales of CNG, LNG and RNG.
Limited availability of natural gas vehicles and engine sizes, including heavy-duty trucks and other types of vehicles, restricts their large-scale introduction and narrows our potential customer base. Limited production could also increase the cost to purchase natural gas vehicles. Original equipment manufacturers produce a relatively small number of natural gas engines and vehicles in the U.S. and Canadian markets and they may not decide to expand, or they may decide to discontinue or curtail, their existing natural gas engine or vehicle product lines. Additionally, engines that are produced may experience performance issues and be subject to recalls. A limited supply of natural gas vehicles limits our customer base and natural gas fuel sales and encourages existing manufacturers to charge a premium for such vehicles, thereby restricting our ability to promote natural gas vehicles.
Our business is influenced by environmental, tax and other government regulations, programs and incentives that promote or encourage cleaner burning fuels and alternative vehicles and their adoption, modification or repeal could impact our business.
Our business is influenced by federal, state and local government tax credits, rebates, grants and similar programs and incentives that promote the use of CNG, LNG and RNG as a vehicle fuel, as well as by laws, rules and regulations that require reductions in carbon emissions. Parties with an interest in gasoline and diesel or alternative fuels such as hydrogen- or electric-

15


powered vehicles, many of which have substantially greater resources and influence than we have, invest significant time and money in efforts to delay, repeal or otherwise negatively influence regulations and programs that promote natural gas as a vehicle fuel. Any failure to adopt, delay in implementing, expiration, repeal or modification of federal, state or local regulations, programs or incentives that encourage the use of CNG, LNG and RNG as a vehicle fuel, or the adoption of any such regulations, programs or incentives that encourage the use of other alternative fuels or alternative vehicles instead of natural gas, would harm our operating results and financial condition. Additionally, changes to or the repeal of laws, rules and regulations that mandate reductions in carbon emissions and/or the use of renewable fuels, including the California and Oregon Low Carbon Fuel Standards and the federal Renewable Fuel Standard, under which we generate LCFS Credits and RIN Credits, respectively, by selling CNG, LNG and RNG as a vehicle fuel, would adversely affect our financial condition. For example, CARB recently adopted changes to its carbon intensity number for CNG, LNG and RNG to take into account alleged system-wide methane losses, which changes resulted in fewer carbon benefits associated with the use of natural gas as a vehicle fuel, and this may adversely affect our business. Further, our business would be adversely affected if grant funds cease to be available under government programs for the purchase and construction of natural gas vehicles and stations.
We face increasing competition from a variety of organizations, many of which have far greater resources and brand awareness than we have.
A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, natural gas utilities and their affiliates, industrial gas companies, truck stop and fuel station owners, fuel providers and other organizations have entered or are planning to enter the market for natural gas and other alternatives for use as vehicle fuels. Additionally, for certain of our key customer markets, such as airports and public transit, we indirectly compete with companies such as Uber and Lyft that provide alternative transportation methods that may limit these markets generally. Further, we compete with producers and sellers of gasoline and diesel fuels, which power the vast majority of vehicles in the U.S. and Canada, suppliers of other alternative vehicle fuels and providers of hybrid and electric vehicles. Many of these current and potential competitors have substantially greater financial, marketing, research and other resources than we have. New technologies and improvements to existing technologies may make alternatives other than natural gas more attractive to the market, or may slow the development of the market for natural gas as a vehicle fuel if such advances are made with respect to oil and gas usage. Natural gas utilities and their affiliates also own and operate natural gas fueling stations that compete with our stations. For example, the California Public Utilities Commission has approved a compression services tariff application by the Southern California Gas Company, allowing the utility to compete with us by building and owning natural gas compression equipment on customer property and by providing operation and maintenance services to customers. Additionally, Northwest National has been granted a similar service tariff by the Oregon Public Utilities Commission. Utilities or their affiliates in several other states, including Michigan, Illinois, New Jersey, North Carolina, Maryland, Washington, Kentucky, Florida and Georgia, either have entered or are preparing to enter the natural gas vehicle fuel business. Utilities and their affiliates typically have unique competitive advantages, including lower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales and marketing organizations.
We expect competition to increase in the alternative vehicle fuels market generally and, if the use of natural gas vehicles and the demand for natural gas vehicle fuel increases, the market for natural gas vehicle fuel. Any such increased competition would lead to amplified pricing pressure, reduced operating margins and fewer expansion opportunities.
If there are advances in other alternative vehicle fuels or technologies, or if there are improvements in gasoline, diesel or hybrid engines, demand for natural gas vehicles may decline.
Technological advances in the production, delivery and use of alternative fuels that are, or are perceived to be, cleaner, more cost-effective or more readily available than CNG, LNG or RNG have the potential to slow or limit adoption of natural gas vehicles. Advances in gasoline and diesel engine technology, including efficiency improvements and further development of hybrid engines, may also offer a cleaner, more cost-effective option and make fleet customers less likely to convert their vehicles to natural gas. Technological advances related to ethanol or biodiesel, which are used as an additive to, or substitute for, gasoline and diesel fuel, may slow the need to diversify fuels and affect the growth of the natural gas vehicle fuel market. Use of electric heavy-duty trucks, buses and trash trucks, or the perception that such vehicles may soon be widely available and provide satisfactory performance, may reduce demand for natural gas vehicles. In addition, hydrogen and other alternative fuels in experimental or developmental stages may prove to be cleaner, more cost-effective alternatives to gasoline and diesel than natural gas. Advances in technology that slow or curtail the growth of natural gas vehicle purchases or conversions, or that otherwise reduce demand for natural gas as a vehicle fuel will have an adverse effect on our business. Failure of natural gas vehicle technology to advance at a sufficient pace may also limit its adoption and our ability to compete with gasoline-and diesel-powered vehicles and other alternative fuels and alternative vehicles.

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We are subject to risks associated with station construction and similar activities, including difficulties identifying suitable station locations, zoning and permitting issues, local resistance, cost overruns, delays and other contingencies.
In connection with our station construction operations, we may not be able to identify, obtain and retain sufficient permits, approvals and other rights to use suitable locations for the stations we or our customers seek to build. We may also encounter land use or zoning difficulties or local resistance that prohibit us or our customers from building new stations on preferred sites or limit or restrict the use of new or existing stations. Any such difficulties, resistance or limitations could harm our business and results of operations. In addition, we act as the general contractor and construction manager for station construction and facility modification projects and typically rely on licensed subcontractors to perform the construction work. We may be liable for any damage we or our subcontractors cause, or for injuries suffered by our employees or our subcontractors’ employees, during the course of our projects. Shortages of skilled subcontractor labor for our projects could significantly delay a project or otherwise increase our costs. Our profit on our projects is based in part on assumptions about the cost of the projects and cost overruns, delays or other execution issues may, in the case of projects that we complete and sell to customers, result in our failure to achieve our expected margins or cover our costs, and in the case of projects that we build and own, result in our failure to achieve an acceptable rate of return.
Our manufacturing operations could subject us to significant costs and other risks, including product liability claims.
Clean Energy Compression designs, manufactures, sells and services non-lubricated natural gas fueling compressors and related equipment used in CNG stations. The equipment Clean Energy Compression produces and sells has not in some instances performed, and may not in the future perform, as expected, according to legal, contractual or other specifications or at all. Clean Energy Compression has in the past and may in the future incur significant and unexpected costs in the life cycle of its products, including costs incurred to fix any discovered performance errors and to repair any product malfunctions. The scope and likelihood of these risks continues to increase as Clean Energy Compression makes efforts to expand its services to new geographic and other markets. The occurrence of any of these risks has and may continue to reduce sales of Clean Energy Compression products and services, damage our customer relationships and reputation, delay the launch of new Clean Energy Compression products and services, force product recalls and/or result in product liability claims.
Our warranty reserves may not adequately cover our warranty obligations.
We provide product warranties with varying terms and durations for natural gas compressors and stations we build and sell to customers, and we establish reserves for the estimated liability associated with our product warranties. Our warranty reserves are based on historical trends as well as our understanding of specifically identified warranty issues and the amounts estimated for these reserves could differ materially from warranty costs that may ultimately be realized. We would be adversely affected by an increase in the rate of warranty claims or the average amount involved with each warranty claim or the occurrence of unexpected warranty claims.
Increased global IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions and services.
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. Depending on their nature and scope, such threats could potentially lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data and operational disruptions.
The global scope of our operations exposes us to additional risks and uncertainties.
Clean Energy Compression has operations in a number of countries, including Canada, China, Colombia, Bangladesh and Peru. Clean Energy Compression’s natural gas compression equipment is primarily manufactured in Canada and sold globally, which exposes us to a number of risks that can arise from international trade transactions, local business practices and cultural considerations. In addition to the other risks described in these risk factors, the global scope of our operations may subject us to risks and uncertainties that could limit our operations, increase our costs or otherwise negatively impact our business and financial condition, including, among others:
Failure to comply with the United States Foreign Corrupt Practices Act and other applicable anti-bribery laws;

Political unrest, terrorism, war, natural disasters and economic and financial instability;

Cheap local oil, gasoline or diesel;


17


Changes in environmental and other regulatory requirements and uncertainty related to developing legal and regulatory systems and standards for economic and business activities, real property ownership and application of contract rights;

Trade restrictions and import-export regulations;

Difficulties enforcing agreements and collecting receivables;

Difficulties complying with the laws and regulations of multiple jurisdictions;

Difficulties ensuring that health, safety, environmental and other working conditions are properly implemented and/or maintained by local offices;

Differing employment practices and/or labor issues, including wage inflation, labor unrest and unionization policies;

Limited intellectual property protection;

Longer payment cycles by international customers;

Inadequate local infrastructure and disruptions of service from utilities or telecommunications providers, including electricity shortages; and

Potentially adverse tax consequences.

In addition to the above, we also face risks associated with currency exchange and convertibility, inflation and repatriation of earnings as a result of our foreign operations. In some countries, economic, monetary and regulatory factors could affect our ability to convert funds to United States dollars or move funds from accounts in these countries. We are also vulnerable to appreciation or depreciation of foreign currencies against the United States dollar, which could negatively impact our operating results and financial performance.
We depend on key people to operate our business, and if we are unable to retain our key people or hire additional qualified people, our ability to develop and successfully market our business would be harmed.
We believe that our future success is highly dependent on the contributions of our executive officers, as well as our ability to attract and retain highly skilled managerial, sales, technical and finance personnel. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. All of our executive officers and other United States employees may terminate their employment relationships with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. If we are unable to retain our executive officers and key employees or, if such individuals leave our Company, we are unable to attract and successfully integrate quality replacements, our business, operating results and financial condition could be harmed.
We have significant contracts with government entities that are subject to unique risks.
We have, and will continue to seek, long-term CNG, LNG and RNG station construction, maintenance and fuel sales contracts with various government bodies, which accounted for approximately 19%, 18% and 18% of our annual revenues in 2013, 2014 and 2015, respectively. In addition to normal business risks, our contracts with government entities are often subject to unique risks, some of which are beyond our control. Long-term government contracts and related orders are subject to cancellation if adequate appropriations for subsequent performance periods are not made. The termination of funding for a government program supporting any of our government contracts could result in a loss of anticipated future revenues attributable to that contract, which could have a negative impact on our operations. In addition, government entities with which we contract are often able to modify, curtail or terminate contracts with us without prior notice at their convenience, and are only required to pay for work done and commitments made at the time of termination. Modification, curtailment or termination of significant government contracts could have a material adverse effect on our results of operations and financial condition. Further, 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 certain 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 such protests.

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Natural gas purchase commitments may exceed demand, causing our costs to increase.
We are a party to two long-term natural gas purchase agreements that have a take-or-pay commitment, and we may enter into additional contracts with take-or-pay commitments in the future. Take-or-pay commitments require us to pay for the natural gas that we have agreed to purchase irrespective of whether we can sell the gas. Should the market demand for natural gas as a vehicle fuel decline or fail to develop as we anticipate, if we lose significant natural gas vehicle fueling customers, or if demand under any existing or any future sales contract does not maintain its volume levels or grow, these commitments may cause our operating and supply costs to increase without a corresponding increase in revenue and our margins may be negatively impacted.
Compliance with greenhouse gas emissions regulations affecting our LNG plants, RNG production facilities, LNG and CNG fueling stations or CNG, LNG and RNG fuel sales may prove costly and negatively affect our financial performance.
California has adopted legislation, AB 32, that calls for a cap on greenhouse gas emissions throughout California and a statewide reduction to 1990 levels by 2020 and an additional 80% reduction below 1990 levels by 2050. Further, in 2015 the Governor of California issued an executive order mandating a reduction in greenhouse gas emissions by 40% compared to 1990 levels by 2030. As of January 1, 2015, AB 32 began regulating the greenhouse gas emissions from transportation fuels, including the emissions associated with LNG and CNG vehicle fuel.
Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. We estimate that we will be required to pay at least $150,000 in 2016 to comply with AB 32 with respect to our LNG vehicle fuel sales in California. Our costs in future years will depend on how much LNG vehicle fuel we sell that is regulated, CARB's guidance on the regulation of LNG vehicle fuel, potential regulatory changes and the cost of carbon credits under AB 32 at the time we purchase them. We anticipate that the costs we incur to comply with this legislation will be passed through to our LNG vehicle fuel purchasers, which may diminish the attractiveness of LNG as a vehicle fuel for California buyers. With respect to CNG, the regulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas is sold. SoCalGas, the Southern California gas utility, has recently announced that it intends to charge CNG fueling customers an additional $0.27 per MMBtu beginning in April 2016 to cover its AB 32 compliance costs on each MMBtu of CNG sold. We anticipate that we will pass these additional utility fees on to our customers, which will diminish the economic attractiveness of CNG vehicle fuel. In addition, we anticipate that, over time, as the utilities compliance costs increase, we or our CNG customers will be required to pay more for CNG vehicle fuel to cover the increased AB 32 compliance costs of the utility. These costs will be determined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 as a result of the natural gas we or our customers buy through the utility’s pipeline. Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the complexity of the requirements that biomethane must meet in order to be exempt under AB 32 and the possibility of changes to this legislation make any exemption uncertain. Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG derived from fossil fuel natural gas.
The federal government and other state governments are considering passing similar measures to regulate and reduce greenhouse gas emissions. Any of these regulations, when and if implemented, may regulate the greenhouse gas emissions produced by our LNG production plants, our CNG and LNG fueling stations or our RNG production facilities, and/or the greenhouse gas emissions associated with the CNG, LNG and RNG we sell, and could require us to obtain emissions credits or invest in costly emissions prevention technology. We cannot currently estimate the potential costs associated with compliance with potential federal, state or local regulation of greenhouse gas emissions and these unknown costs are not contemplated by our current customer agreements. If any of these regulations are implemented, our associated compliance costs may have a negative impact on our financial performance, reduce our margins and impair our ability to fulfill customer contracts. Further, these regulations may discourage consumers from adopting natural gas as a vehicle fuel.
Our operations entail inherent safety and environmental risks that may result in substantial liability to us.
Our operations entail inherent risks, including equipment defects, malfunctions, failures, and misuses, which could result in uncontrollable flows of natural gas, fires, explosions and other damage. For example, operation of LNG pumps requires special training because of the extremely low temperatures of LNG. Also, LNG tanker trailers have in the past been, and may in the future be, involved in accidents that result in explosions, fires and other damage. Further, improper refueling of natural gas vehicles can result in venting of methane gas, which is a potent greenhouse gas, and such methane emissions are currently regulated by some state regulatory agencies and may in the future be regulated by the EPA and/or by additional state regulators . Additionally, CNG fuel tanks and trailers, if damaged by accidents or improper maintenance or installation, may rupture and the contents of the tank or trailer may rapidly decompress and result in death or serious injury. These risks may expose us to liability for personal injury, wrongful death, property damage, pollution and other environmental damage. We may incur substantial liability and cost if damages are not covered by insurance or are in excess of policy limits.
We provide financing to fleet customers for natural gas vehicles, which exposes our business to credit risks.

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We lend to certain qualifying customers a portion and occasionally up to 100% of the purchase price of natural gas vehicles they agree to purchase. We may also purchase or pay deposits for vehicles and lease to or otherwise place them with customers. Risks associated with these financing activities include, among others, that: the equipment financed consists mostly of vehicles that are mobile and easily damaged, lost or stolen; and the borrower may default on payments, enter bankruptcy proceedings and/or liquidate. As of December 31, 2015, we had $12.8 million outstanding in loans provided to customers to finance natural gas vehicle purchases.
Our business is subject to a variety of government regulations that may restrict our operations and result in costs and penalties.
We are subject to a variety of federal, state and local laws and regulations relating to foreign business practices, the environment, health and safety, labor and employment, building codes and construction, zoning and land use and taxation, among others. Additionally, we are subject to changing and complex regulations related to the government procurement process and any political activities or lobbying relating to natural gas or greenhouse gas emissions regulations in which we may engage. It is difficult and costly to manage the requirements of every individual authority having jurisdiction over our various activities and to comply with these varying standards. These laws and regulations are complex, change frequently and in many cases have tended to become more stringent over time. Any changes to existing regulations or adoption of new regulations may result in significant additional expense to us and our customers. Further, from time to time, as part of the regular evaluation of our operations, including newly acquired or developing operations, we may be subject to compliance audits by regulatory authorities, which may involve significant costs and use of other resources. Also, in connection with our operations, we often need facility permits or licenses to address, among other things, storm water or wastewater discharges, waste handling and air emissions, which may subject us to onerous or costly permitting conditions.
Our failure to comply with any applicable laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties, the imposition of corrective requirements, or prohibition from providing services to government entities.
Our RNG business may not be successful.
We own RNG production facilities located in Canton, Michigan and North Shelby, Tennessee. We are also seeking to increase our RNG business by pursuing additional projects on our own and with project partners. We may not be successful in operating or developing these projects or any future projects or generating a financial return from our investments. Historically, projects that produce pipeline-quality RNG have often failed due to the volatile prices of conventional natural gas, unpredictable RNG production levels, technological difficulties and costs associated with operating the production facilities, and the lack of government programs and regulations that support these activities. The success of our RNG business depends on our ability to obtain necessary financing, to successfully manage the construction and operation of our RNG production facilities, to enter into RNG supply agreements with third parties, and to either sell RNG at substantial premiums to conventional natural gas prices or to sell, at favorable prices, credits we may generate under federal or state laws, rules and regulations, including RINs and LCFS Credits. If we are not successful at one or more of these activities, our RNG business could fail.
The market for RINs and LCFS Credits is volatile, and the prices for such credits are subject to significant fluctuations. Further, the value of RINs and LCFS Credits will be adversely affected by any changes to federal and state programs under which such credits are generated and sold. In the absence of federal and state programs that support premium prices for RNG or that allow us to generate and sell LCFS Credits and RINs or other credits, or if our customers are not otherwise willing to pay a premium for RNG, we may be unable to profitably operate our RNG business.
We have experienced, and may continue to experience, difficulties producing RNG.
We have experienced difficulties producing the expected volumes of RNG at our RNG plants due to, among other factors, problems with key equipment, severe weather, landfill conditions and construction delays. These difficulties may continue or worsen in the future. Additionally, our ability to produce RNG may be adversely affected by a number of other factors, including, among others, limited availability or unfavorable composition of collected landfill gas, failure to obtain and renew necessary permits and landfill mismanagement. In addition, we may seek to or be required to upgrade, expand or service our RNG facilities, which may result in plant shutdowns, cause delays that reduce the amount of RNG we produce or involve significant unexpected costs.
We may from time to time pursue acquisitions, investments or other strategic relationships, which could fail to meet expectations.

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We may acquire or invest in other companies or businesses or pursue other strategic transactions or relationships. Acquisitions, investments and other strategic partnerships and relationships involve numerous risks, any of which could harm our business, including, among others:
Difficulties integrating the technologies, operations, existing contracts and personnel of an acquired company or partner;

Difficulties supporting and transitioning vendors, if any, of an acquired company or partner;

Diversion of financial and management resources from existing operations or alternative acquisition or investment opportunities;

Failure to realize the anticipated benefits or synergies of a transaction or relationship;

Failure to identify all of the problems, liabilities, shortcomings or challenges of a company or technology we may partner with, invest in or acquire, including issues related to intellectual property rights, regulatory compliance practices, revenue recognition or other accounting practices or employee or customer relationships;

Risks of entering new markets in which we may have limited or no experience;

Potential loss of key employees, customers and vendors from an acquired company’s or partner’s business;

Inability to generate sufficient revenue to offset acquisition, investment or other related costs;

Additional costs or incurrence of debt or equity dilution associated with funding the acquisition, investment or other relationship; and

Possible write-offs or impairment charges relating to the businesses we partner with, invest in or acquire.

Our quarterly results of operations fluctuate significantly and are difficult to predict.
Our quarterly results of operations, which are disclosed under “Quarterly Results of Operations” in Item 8. Financial Statements and Supplementary Data of this report, have historically experienced significant fluctuations. Our quarterly results of operations may continue to fluctuate significantly as a result of a variety of factors, including those described in these risk factors. If our quarterly results of operations fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially. As a result of the significant fluctuations of our operating results in prior periods, period- to-period comparisons of our operating results may not be meaningful and investors in our common stock should not rely on the results of any one quarter as an indicator of future performance.
Risks Related to Our Common Stock
Sales of shares could cause the market price of our stock to drop significantly, even if our business is doing well.
As of December 31, 2015, there were 92,382,717 shares of our common stock outstanding, 11,487,938 shares underlying outstanding options, 3,419,776 shares underlying restricted stock units, 3,130,682 shares underlying outstanding warrants and 35,185,979 shares underlying outstanding convertible notes. All of our outstanding shares are eligible for sale in the public market, subject in certain cases to the requirements of Rule 144 of the Securities Act. Also, shares issued upon exercise or conversion of outstanding options, warrants and convertible notes are eligible for sale in the public market to the extent permitted by the provisions of the applicable option, warrant and convertible note agreements and Rule 144, or if such shares have been registered for resale under the Securities Act. If these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
As of December 31, 2015, 17,441,860 shares of our common stock held by our co-founder and board member T. Boone Pickens were pledged as security for loans made to Mr. Pickens. We are not a party to these loans. If the price of our common stock declines, Mr. Pickens may be forced to provide additional collateral for the loans or to sell shares of our common stock in order to remain within the margin limitations imposed under the terms of the loans. Any sales of our common stock following a margin call that is not satisfied or any other large sales of our common stock by our officers and directors, such as Mr. Pickens' sale of approximately 700,000 shares in September 2015, may cause the price of our common stock to decline.

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A significant portion of our stock is beneficially owned by a single stockholder whose interests may differ from yours and who is able to exert significant influence over our corporate decisions, including a change of control.
As of December 31, 2015, our co-founder and board member T. Boone Pickens beneficially owned approximately 22.9% of our common stock (including 17,441,860 outstanding shares of common stock, 725,000 shares underlying stock options exercisable within 60 days after December 31, 2015, and 4,113,923 shares underlying convertible promissory notes convertible within 60 days after December 31, 2015). As a result, Mr. Pickens is able to strongly influence or control matters requiring approval by our stockholders, including the election of directors and mergers, acquisitions or other extraordinary transactions. Mr. Pickens may have interests that differ from yours and may vote in a way with which you disagree and that may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our Company, could deprive our stockholders of an opportunity to receive a premium for their stock as part of a sale of our Company, and might ultimately affect the market price of our common stock. Conversely, this concentration may facilitate a change of control at a time when you and other investors may prefer not to sell.
The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.
The market price of our common stock has experienced, and may continue to experience, significant volatility. Such volatility may be in response to various factors, some of which are beyond our control. In addition to the other factors discussed in these risk factors, factors that may cause volatility in our stock price include, among others:
Successful implementation of our business plans;

Investor perception of our industry or our prospects;

A decline in the trading volume of our common stock; and

Changes in general economic and market conditions.

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, and in such instances, 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.
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 68,000 square feet of office space. Our lease for this facility expires on June 30, 2021.
We own and operate the Pickens Plant located in Willis, Texas, approximately 50 miles north of Houston. We own approximately 24 acres of land on which the plant is situated, along with approximately 34 acres surrounding the plant.
We own and operate the Boron Plant in Boron, California, approximately 125 miles from Los Angeles. In November 2006, we entered into a 30 -year ground lease for the 36 acres on which this plant is situated, pursuant to which we pay annual base rent payments of $230,000 per year, plus up to $130,000 per year for each 30,000,000 gallons of production capacity utilized, subject to future adjustment based on consumer price index changes.
We lease the land upon which we operate our RNG production facilities in North Shelby, Tennessee and Canton, Michigan.
We lease a manufacturing facility in Chilliwack, British Columbia where we occupy approximately 81,000 square feet of space. The lease for this facility expires in January 2018.
Item 3.    Legal Proceedings.
We are or may become party, and our property is and may become subject, to various legal actions that have arisen in the ordinary course of our business. During the course of our operations, we are also subject to audit by tax authorities for varying periods in various federal, state, local, and foreign tax jurisdictions. Disputes have arisen, and may continue to arise, during the

22


course of such audits as to facts and matters of law. It is impossible to determine the ultimate liabilities that we may incur resulting from any of these lawsuits, claims and proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably, an outcome not currently anticipated, it is possible that such an outcome could have a material adverse effect upon our consolidated financial position, results of operations or liquidity. However, we believe that the ultimate resolution of such matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.
Item 4.    Mine Safety Disclosures.
None.


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PART II
Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock trades on the The Nasdaq Global Select Market under the symbol "CLNE." Set forth below are the high and low sales prices as reported by The Nasdaq Global Select Market for our common stock for the fiscal periods indicated.
 
Sales Prices
 
 
High
 
Low
 
2014
 

 
 

 
First Quarter
$
12.78

 
$
8.37

 
Second Quarter
$
11.72

 
$
8.70

 
Third Quarter
$
11.63

 
$
7.80

 
Fourth Quarter
$
7.43

 
$
4.30

 
2015
 

 
 

 
First Quarter
$
6.01

 
$
4.17

 
Second Quarter
$
10.27

 
$
5.45

 
Third Quarter
$
6.78

 
$
4.01

 
Fourth Quarter
$
6.35

 
$
3.29

 
Holders
There were approximately 56 stockholders of record as of March 1, 2016 . We believe there are approximately 73,067 additional stockholders whose shares of our common stock are held on their behalf by brokerage firms or other agents.
Dividend Policy
We have not paid any dividends to date and do not anticipate paying any dividends on our common stock in the foreseeable future. Further, the SLG Agreements (as defined and described in note  9 to our consolidated financial statements included in this report), restrict our ability to pay cash dividends on our common stock. We anticipate that all future earnings will be retained to finance future growth.
Performance Graph
This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Clean Energy Fuels Corp. under the Securities Act or the Exchange Act, unless it is specifically incorporated by reference into any such filing.
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 Growth Index. The graph assumes that $100 was invested in our common stock on December 31, 2010 (the last trading day before the beginning of our fifth preceding fiscal year). We chose to include the Russell 2000 Growth Index as a comparable index due to the lack of a comparable industry index or peer group, as we are the only actively traded public company whose only line of business is to sell natural gas and the associated equipment and services necessary to use natural gas as a vehicle fuel.
The graph is required by applicable rules of the Securities and Exchange Commission and is not intended to forecast or be indicative of possible future performance of our common stock.

24


Item 6.    Selected Financial Data.
The following selected historical consolidated financial data should be read in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial statements and the related notes included in this annual report.
The consolidated statements of operations data for the years ended December 31, 2013 , 2014 , and 2015 and the consolidated balance sheet data at December 31, 2014 , and 2015 , are derived from our audited consolidated financial statements included in this annual report on Form 10-K. The consolidated statements of operations data for the years ended December 31, 2011 and 2012, and the consolidated balance sheet data at December 31, 2011, 2012 and 2013 are derived from our audited consolidated financial statements that are not included in this annual report on Form 10-K. Historical results are not indicative of the results to be expected in the current period or any future period.
 
Year Ended December 31,
 
 
2011
 
2012
 
2013
 
2014
 
2015
 
 
(In thousands, except share data)
 
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
Total revenues(1)
$
292,717

 
$
334,008

 
$
352,475

 
$
428,940

 
$
384,320

 
Operating loss
(38,568
)
 
(70,522
)
 
(51,691
)
 
(54,364
)
 
(41,623
)
 
Net loss
(47,455
)
 
(100,862
)
 
(66,919
)
 
(90,859
)
 
(135,458
)
 
Basic and diluted loss per share
$
(0.68
)
 
$
(1.16
)
 
$
(0.71
)
 
$
(0.96
)
 
$
(1.47
)
 
_______________________________________________________________________________
(1)
Revenues include the following amounts:
 
Year Ended December 31,
 
 
2011
 
2012
 
2013
 
2014
 
2015
 
Alternative fuel tax credits (VETC)
$
17,889

 
$
(2,057
)
(a)
$
45,439

(b)
$
28,359

 
$
30,986

 
_______________________________________________________________________________
(a)
Represents settlement with the Internal Revenue Service over certain VETC amounts.
(b)
Amount includes $20,800 related to fuel sales in 2012.

25


 
December 31,
 
 
2011
 
2012
 
2013
 
2014
 
2015
 
Balance Sheet Data:
 

 
 

 
 

 
 

 
 

 
Cash and cash equivalents and short-term investments
$
271,454

 
$
146,697

 
$
378,273

 
$
214,927

 
$
146,668

 
Restricted cash, short term
4,792

 
8,445

 
8,403

 
6,012

 
4,240

 
 
 
 
 
 
 
 
 
 
 
 
Working capital
312,372

 
170,778

 
400,990

 
293,428

 
82,773

 
Total assets
931,061

 
975,200

 
1,250,965

 
1,160,409

 
1,005,792

 
Total debt inclusive of capital lease obligations
289,422

 
331,025

 
620,418

 
570,670

 
572,414

 
Total Clean Energy Fuels Corp. Stockholders' equity
540,884

 
542,713

 
514,572

 
437,426

 
302,552

 
Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.
The discussion in this section contains forward-looking statements. These statements relate to future events or our future financial performance and are based upon 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: "anticipate," "believe," "can," "continue," "ongoing," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "forecast," "should," "would", "will" 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. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that could cause our or our industry’s actual results, levels of activity, performance or achievements to materially differ from those expressed or implied by any forward-looking statements we make. See Item 1A. Risk Factors in this annual report on Form 10-K for a discussion of some of these risks, uncertainties and other factors. This discussion should be read with our consolidated financial statements and related notes included in this report.
We are the leading provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, based on the number of stations operated and the amount of gasoline gallon equivalents ("GGEs") of compressed natural gas("CNG"), liquefied natural gas ("LNG") and renewable natural gas ("RNG") delivered. Our principal business is supplying CNG, LNG and RNG (RNG can be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehicles and providing operation, repair and maintenance ("O&M") services for vehicle fleet customer stations. As a comprehensive solution provider, we also design, build, operate, service, repair and maintain fueling stations, manufacture, sell and service non-lubricated natural gas fueling compressors and related equipment used in CNG stations and LNG stations, offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets, transport and sell CNG to large industrial and institutional energy users who do not have direct access to natural gas pipelines, process and sell RNG, sell tradable credits we generate by selling natural gas and RNG as a vehicle fuel, including credits we generate under the California and Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits") and Renewable Identification Numbers ("RIN Credits" or "RINs") we generate under the federal Renewable Fuel Standard Phase 2 (“RFS 2”), help our customers acquire and finance natural gas vehicles and obtain federal, state and local tax credits, grants and incentives.
Overview
This overview discusses matters on which our management focuses in evaluating our financial condition and operating performance and results.
Sources of Revenue.
We generate revenues by selling CNG, LNG, RNG, and providing O&M services to our customers, designing and constructing fueling stations and selling or leasing those stations to our customers, processing and selling RNG, manufacturing, selling and servicing non-lubricated natural gas fueling compressors and other equipment for CNG and LNG fueling stations, offering assessment, design and modification solutions to provide operators with code- compliant service and maintenance facilities for natural gas vehicle fleets, transporting and selling CNG to large industrial and institutional energy users who do not have direct access to natural gas pipelines, providing financing for our customers' natural gas vehicle purchases, selling tradable LCFS Credits and RIN Credits, and receiving federal fuel tax credits.
The following table represents our sources of revenue:

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Revenue (in Millions)
2013
 
2014
 
2015
Volume Related
$
195.3

 
$
247.9

 
$
260.6

Clean Energy Compression
77.5

 
84.8

 
54.5

Station Construction Project Sales
27.1

 
67.4

 
37.8

VETC
45.4

 
28.4

 
31.0

Other
7.2

 
0.4

 
0.4

Total
$
352.5

 
$
428.9

 
$
384.3

Key Operating Data.
In evaluating our operating performance, our management focuses primarily on: (1) the amount of CNG, LNG, and RNG gasoline gallon equivalents delivered (which we define as (i) the volume of gasoline gallon equivalents we sell to our customers, plus (ii) the volume of gasoline gallon equivalents dispensed at facilities we do not own but where we provide O&M services on a per-gallon fee basis, plus (iii) our proportionate share of the gasoline gallon equivalents sold as CNG by our joint venture with Mansfield Ventures, LLC called Mansfield Clean Energy Partners, LLC ("MCEP"), plus (iv) our proportionate share of the gasoline gallon equivalents sold as CNG by our joint venture in Peru (through March 2013 when we sold our interest in the joint venture in Peru), plus (v) our proportionate share (as applicable) of the gasoline gallon equivalents of RNG produced and sold as pipeline quality natural gas by the RNG production facilities we own or operate), (2) our gross margin (which we define as revenue minus cost of sales), and (3) net income (loss) attributable to us. The following tables, which should be read in conjunction with our consolidated financial statements and notes included in this annual report on Form 10-K, present our key operating data for the years ended December 31, 2013 , 2014 , and 2015 :
 
Year Ended December 31,
 
 
2013
 
2014
 
2015
 
Gasoline gallon equivalents delivered (in millions)
 
 
 
 
 
 
CNG (1)
143.9

 
182.6

 
229.2

 
RNG (5)
10.5

 
12.2

 
8.8

 
LNG
60.0

 
70.3

 
70.5

 
Total
214.4

 
265.1

 
308.5

 

 
Year Ended December 31,
 
 
2013
 
2014
 
2015
 
Gasoline gallon equivalents delivered (in millions)
 
 
 
 
 
 
O&M
108.7

 
137.3

 
159.3

 
Fuel (1)
86.4

 
108.2

 
130.1

 
Fuel and O&M (2)
19.3

 
19.6

 
19.1

 
Total
214.4

 
265.1

 
308.5

 

Other Operating data (in thousands)
 
 
 
 
 
 
Gross margin (3)
$
127,713

 
$
120,153

 
$
125,835

 
Net loss attributable to Clean Energy Fuels. Corp (3)(4)
$
(66,968
)
 
$
(89,659
)
 
$
(134,242
)
 

_______________________________________________________________________________
(1)
As noted above, this includes our proportionate share of the GGEs sold as CNG by our joint venture MCEP and our former joint venture in Peru. Such GGEs sold were 2.1 million, 0.0 million and 0.4 million for the years ended December 31, 2013, 2014 and 2015, respectively.
(2)
Represents gasoline gallon equivalents at stations where we provide both fuel and O&M services.
(3)
Revenues and gross margins of our nonconsolidated joint ventures are net within the "Loss from noncontrolling interest" line item on our consolidated statement of operations.
(4)
Includes $45.4, $28.4 and $ 31.0 million  of revenue from VETC for the years ended December 31, 2013, 2014 and 2015 respectively. See the discussion under "Operations—VETC".

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(5)
Represents RNG non-vehicle fuel. RNG sold as vehicle fuel is included in CNG and LNG.
Key Trends in 2013 , 2014 and 2015 .
CNG and LNG are generally less expensive on an energy equivalent basis and, according to studies conducted by the California Air Resources Board and Argonne National Laboratory, a research laboratory operated by the University of Chicago for the United States Department of Energy, cleaner than gasoline and diesel fuel. According to the U.S. Energy Information Administration, demand for natural gas fuels in the United States increased by approximately 45% during the period from January 1, 2012 through December 31, 2015. We believe this growth in demand was attributable primarily to the higher prices of gasoline and diesel relative to CNG and LNG during much of this period, as well as increasingly stringent environmental regulations affecting vehicle fleets and increased availability of natural gas. During 2015, lower oil prices decreased our pricing advantage when comparing natural gas prices to diesel and gasoline, which impacted our gross revenue. This impact was partially offset by corresponding decreases in the cost of natural gas.
The number of fueling stations we owned, operated, maintained and/or supplied grew from 348 at December 31, 2012 to over 570 at December 31, 2015 (a 63.8% increase). Included in this number are all of the CNG and LNG fueling stations we own, operate, maintain or with which we have a fueling supply contract. The amount of CNG, LNG and RNG gasoline gallon equivalents we delivered from 2013 to 2015 increased by 43.9% . Although this increase in gasoline gallon equivalents delivered contributed to increased revenues between 2013 and 2014, our gross revenue decreased between 2014 and 2015 in spite of increased GGEs delivered and an increase in our volume related revenue between periods. This revenue decrease in 2015 was due largely to decreased station construction revenue and decreased compressor sales by Clean Energy Compression, which we believe were largely attributable to the decreased cost savings of natural gas as a vehicle fuel during this period due to declining oil prices and the resulting slower and more limited adoption of natural gas as a vehicle fuel by new customers. Our 2013 , 2014 and 2015 revenues included VETC revenues of $45.4, $28.4 and $31.0 million , respectively, with the 2013 VETC revenues including $20.8 million related to 2012 due to the reinstatement of VETC in January 2013. Our revenue can vary between periods for various reasons, including the timing of equipment sales, station construction, recognition of VETC and other credits and natural gas sale activity.
As with our revenue, our fuel cost of sales increased between 2013 and 2014 but decreased between 2014 and 2015 . We incurred increased costs across all periods relating to our delivery of more CNG, RNG and LNG gallons to our customers in 2013 through 2015, but these increases were offset in 2015 by decreased costs associated with less station construction activity and compressor sales. Our cost of sales can vary between periods for various reasons, including commodity costs of fuel and the timing of equipment sales, fuel station construction and natural gas sale activity.
We have made a significant commitment of capital and other resources to build a nationwide network of truck friendly natural gas truck friendly fueling stations, which we refer to as "America's Natural Gas Highway" or "ANGH." At December 31, 2015, we had 43 completed ANGH stations that were not open for fueling operations. We expect to open such stations when we have sufficient customers to fuel at the locations, and we do not know when this will occur. We believe that growth of heavy-duty truck customers depends, in part, on the development and adoption of natural gas engines that are well-suited for use by heavy-duty trucks, which has been slower and more limited than anticipated. If these customers do not develop and if we do not open these stations, we will continue to have substantial investments in assets that do not produce revenues equal to or greater than their costs. Additionally, many of our existing ANGH stations were initially built to provide LNG; however, because operators are adopting both LNG heavy-duty trucks and CNG heavy-duty trucks, we designed these stations to be capable of dispensing both fuels. We have been investing, and expect to continue to invest, additional capital in our ANGH stations to add CNG fueling. To help accelerate the adoption by heavy-duty truck fleets of natural gas, we have negotiated favorable CNG and LNG tank pricing from manufacturers, which we are passing along to our customers.
Some ANGH stations are located at Pilot Flying J Travel Centers ("Pilot"), one of the largest truck fueling operators in the U.S. Under our agreement with Pilot, we own the ANGH stations we build at Pilot locations and initially pay rent to Pilot for the use of its property. In addition, we are entitled to recoup all of our capital investments in ANGH stations we build at Pilot locations plus a defined return, after which we would share a portion of the station profits with Pilot.
Recent Developments.
In December 2015, the VETC alternative fuel tax credit was extended through December 31, 2016 and made retroactive to January 1, 2015. The program providing for the VETC had previously expired as of December 31, 2014. Pursuant to the VETC, we receive a credit of $0.50 per GGE of CNG sold as a vehicle fuel in 2015 and 2016, $0.50 per liquid gallon of LNG sold in 2015 and $0.50 per diesel gallon equivalent of LNG sold in 2016. VETC revenues for 2015, totaling $31.0 million, were recognized in December 2015 and subsequently collected in cash in February 2016. Using the diesel gallon equivalent for LNG for 2016 is expected to result in less VETC revenues.

28


On December 31, 2015, we terminated our credit agreement (the “Credit Agreement”) with General Electric Capital Corporation (“GE”). The Credit Agreement provided us the eligibility to receive up to $200 million of loans from GE to finance the development, construction and operation of two new LNG plans. We had not borrowed any amounts under the Credit Agreement as of its termination. As a result of the termination of the Credit Agreement, all related unamortized deferred financing costs totaling $54.9 million, were removed from our balance sheet as an accelerated expense reported in interest expense. Included in the total was $54.3 million related to the value of the warrant to purchase up to 5.0 million shares of our common stock we issued to GE in connection with the Credit Agreement that was recorded as deferred financing costs. See notes 9 and 11 to our consolidated financial statements included in this report for further information.
On February 29, 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank, pursuant to which we have the ability to incur additional indebtedness in the principal amount of $50.0 million. All amounts owed under the loan agreement are secured by the cash and corporate and municipal bonds rated AAA, AA or A by Standard & Poor’s Rating Services that we hold in an account at PlainsCapital Bank.

On March 1, 2016 and pursuant to the consent of the holders of the SLG Notes, we prepaid an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. See note 9 to the consolidated financial statements included in this report for further information about the SLG Notes.

In February 2016, in light of discounted trading prices of our 5.25% Notes and other factors, our board of directors authorized and approved our use of up to $25.0 million to opportunistically purchase in the open market our outstanding 5.25% Notes, in accordance with the terms of the indenture governing the 5.25% Notes. Pursuant to such approval, on February 18, 2016, we purchased $32.5 million in face amount of our 5.25% Notes for an aggregate purchase price of $16.8 million. Upon our purchase, such 5.25% Notes were surrendered to the trustee for such notes and canceled. See note 9 to the consolidated financial statements included in this report for further information about the 5.25% Notes.

Anticipated Future Trends.
Although natural gas continues to be less expensive than gasoline and diesel in most markets, the price of natural gas has been significantly closer to the prices of gasoline and diesel in recent years as a result of declining oil prices, thereby reducing the price advantage of natural gas as a vehicle fuel. We anticipate that, over the long term, the prices for gasoline and diesel will continue to be higher than the price of natural gas as a vehicle fuel and will increase overall, which would improve the cost savings of natural gas as a vehicle fuel compared to diesel and gasoline. However, the amount of time needed for oil prices to recover from their recent decline is uncertain and we expect that adoption of natural gas as a vehicle fuel generally, growth in our customer base and our gross revenue will be negatively affected until oil prices recover and this price advantage increases. Our belief that natural gas will continue, over the long term, to be a cheaper vehicle fuel than gasoline or diesel is based in large part on the growth in United States natural gas production in recent years.
We believe natural gas fuels are well-suited for use by vehicle fleets that consume high volumes of fuel, refuel at centralized locations or along well-defined routes and/or are increasingly required to reduce emissions. As a result, we believe there will be growth in the consumption of natural gas as a vehicle fuel among vehicle fleets, and our goal is to capitalize on this trend if and to the extent it materializes and enhance our leadership position in these markets. Our business plan calls for expanding our sales of natural gas fuels in the markets in which we operate, including heavy-duty trucking, refuse, airports, public transit, industrial and institutional energy users and government fleets, and pursuing additional markets as opportunities arise. If our business grows as we anticipate, our operating costs and capital expenditures may increase, primarily from the anticipated expansion of our station network and RNG production capacity, as well as the logistics of delivering more natural gas fuels to our customers. We also may seek to acquire assets and/or businesses that are in the natural gas fueling infrastructure or RNG production business, which may require us to raise and spend additional capital, if available.
We expect competition to remain steady in the near-term in the market for natural gas vehicle fuel. To the extent competition increases, we would be subject to greater pricing pressure, reduced operating margins and fewer expansion opportunities.
Sources of Liquidity and Anticipated Capital Expenditures.
Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of existing assets or the acquisition of additional funds through capital management. Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by financing activities, cash provided by sales of assets, and, if available, VETC and other credits.
Our business plan calls for approximately $ 25.5  million in capital expenditures in 2016 , primarily related to the construction of natural gas fueling stations and the purchase of CNG trailers by our subsidiary, NG Advantage, LLC ("NG

29


Advantage"). Additionally, we had total consolidated indebtedness of approximately $ 572.4 million as of December 31, 2015, of which approximately $ 150.1 million , $ 5.5 million , $ 305.1 million , $ 54.7 million , $ 53.1 million and $ 4.0 million is expected to become due 2016, 2017, 2018, 2019, 2020 and thereafter, respectively. In addition, in February 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank, pursuant to which we may incur additional indebtedness in the principal amount of $50.0 million. We expect our total consolidated interest payment obligations relating to our indebtedness to be approximately $ 32.0 million for the year ending December 31, 2016. With respect to certain of our outstanding indebtedness due in 2016, we anticipate repaying, with a combination of cash and shares of our common stock, all or some portion the outstanding principal amount of the SLG Notes (as defined and discussed in note 9 to our consolidated financial statements included in this report), together with accrued and unpaid interest, on or prior to their August 2016 maturity date. To this end, on March 1, 2016 and pursuant to the consent of the holders of the SLG Notes, we prepaid an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. In addition, with respect to certain of our outstanding indebtedness due in 2018, in February 2016, our board of directors authorized and approved our use of up to $25.0 million to opportunistically purchase in the open market our outstanding 5.25% Notes (as defined and discussed in note 9 to our consolidated financial statements included in this report). Pursuant to such approval, on February 18, 2016, we purchased $32.5 million in face amount of our 5.25% Notes for an aggregate purchase price of $16.8 million. We are permitted to repay up to $295.0 million of our consolidated indebtedness outstanding at December 31, 2015 at maturity with shares of our common stock rather than cash, with the amount of shares determined by the then-current trading price of our common stock. Any such issuance would increase the number of our outstanding shares and may significantly dilute the ownership interest of our stockholders. Additionally, in February 2016, we collected VETC revenues for 2015.
We may also elect to invest additional amounts in companies, assets or joint ventures in the natural gas fueling infrastructure, vehicle or services industries, including RNG production, or use capital for other activities or pursuits. We will need to raise additional capital to fund any capital expenditures, investments or debt repayments or repurchases that we cannot fund through available cash or cash generated by operations or that we cannot fund through other sources, such as with our common stock. The timing and necessity of any future capital raised will depend on various factors, including our rate of new station construction, debt repayments or repurchases (either prior to or at maturity), any potential merger or acquisition activity and other factors described under "Liquidity and Capital Resources" below. We may seek to raise additional capital through one or more sources, including, among others, selling assets, obtaining new or restructuring existing debt, obtaining equity capital, or any combination of these or other available sources of capital. We may not be able to raise capital when needed, on terms that are favorable to us or existing stockholders or at all. Any inability to raise capital may impair our ability to build new stations, develop natural gas fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to grow our business and generate sustained or increased revenues.
Business Risks and Uncertainties.
Our business and prospects are exposed to numerous risks and uncertainties. For more information, see Item 1A. Risk Factors in this report.
Operations
We generate revenues principally by selling CNG, LNG and RNG and providing O&M services to our vehicle fleet customer stations. For the year ended December 31, 2015 , CNG and RNG (together) represented 77% and LNG represented 23% of our natural gas sales (on a gasoline gallon equivalent basis). To a lesser extent, we generate revenues by designing and constructing fueling stations and selling or leasing those stations to our customers, manufacturing, selling and servicing non-lubricated natural gas fueling compressors and related equipment, offering assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets, providing financing for our customers' natural gas vehicle purchases, selling tradable RINs and LCFS Credits and receiving federal alternative fuels tax credits.
CNG Sales
We sell CNG through fueling stations and by transporting it to customers that do not have direct access to a natural gas pipeline. CNG fueling station sales are made through stations located on our customers' properties and through our network of public access fueling stations. At these CNG fueling stations, we procure natural gas from local utilities or third-party marketers under standard, floating-rate arrangements and then compress and dispense it into our customers' vehicles. Our CNG fueling station sales are made primarily through contracts with our customers. Under these contracts, pricing is principally determined on an index-plus basis, which is calculated by adding a margin to the local index or utility price for natural gas. As a result, CNG sales revenues based on an index-plus methodology increase or decrease as a result of an increase or decrease in

30


the price of natural gas. The remainder of our CNG fueling station sales are on a per fill-up basis at prices we set at public access stations based on prevailing market conditions.
Additionally, NG Advantage uses a fleet of 54 high-capacity tube trailers to deliver CNG to large institutions and industrial energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines. Utilizing its trailer fleet, NG Advantage creates a "virtual natural gas pipeline" that allows large oil, diesel or propane users to take advantage of the cost savings and environmental benefits of natural gas. We anticipate that NG Advantage will need to purchase or lease additional trailers in the future to transport CNG in support of its operations.
LNG Production and Sales
We obtain LNG from our own plants as well as through relationships with suppliers. We own and operate LNG liquefaction plants near Houston, Texas and Boron, California.
We sell LNG on a bulk basis to fleet customers, who often own and operate their fueling stations, and we also sell LNG to fleet and other customers at our public access LNG stations. We also sell LNG for non-vehicle purposes, including to customers who use LNG in the oil fields or for industrial or utility applications. During 2014 and 2015 , we purchased 44% and 43% , respectively, of our LNG from third-party suppliers, and we produced the remainder of the LNG at our liquefaction plants in Texas and California. We purchase some LNG from third parties under "take or pay" contracts that require us to purchase minimum volumes of LNG at index-based rates.
We deliver LNG via our fleet of 84 tanker trailers to fueling stations, where it is stored and dispensed in liquid form into vehicles. As with our CNG customer contracts, we sell LNG through supply contracts that are priced on an index-plus basis, such that LNG sales revenues from these contracts increase or decrease as a result of an increase or decrease in the price of natural gas. We also sell LNG on a per fill-up basis at prices we set at public access stations based on prevailing market conditions. LNG generally costs more than CNG as LNG must be liquefied and transported.
VETC
The American Taxpayer Relief Act, signed into law on January 2, 2013, reinstated VETC for calendar year 2013 and also made it retroactive to January 1, 2012. The Tax Increase Prevention Act, signed into law in December 2014, reinstated VETC for the remainder of calendar year 2014 and made it retroactive to January 1, 2014. VETC revenues recognized during 2013 and 2014 were $45.4 and $28.4 million, respectively. The VETC revenues received during 2013 include $20.8 million related to CNG and LNG that we sold in 2012, which was recognized in January 2013, and all VETC revenues received in 2014 were recognized in December 2014.
In December 2015, the VETC was extended through December 31, 2016 and made retroactive to January 1, 2015. As a result, VETC revenues received in 2015, totaling $31.0 million, were recognized in December 2015.
O&M Services
We generate a portion of our revenue from our performance of O&M services for CNG and LNG fueling stations that we do not own. For these services we generally charge a per-gallon fee based on the volume of fuel dispensed at the station. We include the volume of fuel dispensed at the stations at which we provide O&M services in our calculation of aggregate gasoline gallon equivalents delivered.
Station Construction and Engineering
We generate a portion of our revenue from designing and constructing fueling stations and selling or leasing some of the stations to our customers. For these projects, we typically act as general contractor or supervise qualified third-party contractors. We also offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets, which can include the construction and sale of facility modifications, such as our NGV Easy Bay product, a natural gas vapor leak barrier developed specifically for natural gas vehicle facilities. We charge construction or other fees or lease rates based on the size and complexity of the project.
RNG Production and Sales
Our subsidiary Clean Energy Renewables owns RNG production facilities located at Republic Services landfills in Canton, Michigan and North Shelby, Tennessee. Clean Energy Renewables has entered into long-term fixed-price sale contracts for the majority of the RNG that we expect these facilities to produce over the next seven years. We are seeking to expand our RNG business by pursuing additional RNG production projects, either on our own or with project partners. We sell some of the RNG we produce through our natural gas fueling infrastructure for use as a vehicle fuel. In addition, we purchase RNG from

31


third-party producers, and sell that RNG for vehicle fuel use through our fueling infrastructure. The RNG we sell for vehicle fuel use is distributed under the name Redeem™ .
In December 2014, we sold our ownership interest in our former subsidiary, Dallas Clean Energy, LLC (“DCE”, together with its subsidiary Dallas Clean Energy McCommas Bluff, LLC (“DCEMB”), for approximately $40.6 million. In September 2015, we received $1.1 million in cash due to the results of certain performance tests performed at the RNG extraction and production project owned by Dallas Clean Energy McCommas Bluff, LLC ("DCEMB"). For the year ended December 31, 2014 , DCE contributed approximately $16.7 million to our revenue. We continued to perform O&M services for DCEMB subsequent to the sale and recognized $0.4 million in revenue for such services during 2015. See note 2 to our consolidated financial statements included in this report for further information on the divestiture.
Natural Gas Fueling Compressors
Our subsidiary, Clean Energy Compression, manufactures, sells and services non-lubricated natural gas fueling compressors and related equipment for the global natural gas fueling market. Clean Energy Compression is headquartered near Vancouver, British Columbia, has an additional manufacturing facility near Shanghai, China, and has sales and service offices in Bangladesh, Colombia, Peru and the U.S. For the years ended December 31, 2014 and 2015 , Clean Energy Compression contributed approximately $ 84.8 million  and $ 54.5  million, respectively, to our revenue.
Sales of RINs and LCFS Credits
We generate RIN Credits when we sell RNG for use as a vehicle fuel in the U.S. and we generate LCFS Credits when we sell RNG and conventional natural gas for use as a vehicle fuel in California and Oregon. We can sell these credits to third parties who need the RINs and LCFS Credits to comply with federal and state requirements. In 2014, we recognized $2.1 million and $3.5 million in revenue through the sale of RIN Credits and LCFS, respectively. In 2015 , we recognized $ 10.3 million  and $ 8.1 million in revenue through the sale of RIN Credits and LCFS Credits, respectively. We anticipate that we will generate and sell increasing numbers of RINs and LCFS Credits as we build our business and sell increasing amounts of CNG, LNG and RNG for use as a vehicle fuel. The market for RINs and LCFS Credits is volatile, and the prices for such credits are subject to significant fluctuations. Further, the value of RINs and LCFS Credits will be adversely affected by any changes to the federal and state programs under which such credits are generated and sold.
Vehicle Acquisition and Finance
We offer vehicle finance services, including loans and leases, to help our customers acquire natural gas vehicles. Where appropriate, we apply for and receive federal and state incentives associated with natural gas vehicle purchases and pass these benefits through to our customers. We may also secure vehicles to place with customers or pay deposits with respect to such vehicles prior to receiving a firm order from our customers, which we may be required to purchase if our customer fails to purchase the vehicle as anticipated. For the years ended 2013, 2014 and 2015, we have not generated significant revenue from vehicle financing activities.
Vehicle Conversions
Prior to June 28, 2013, we owned BAF Technologies, Inc., a provider of natural gas vehicle conversions, alternative fuel systems, application engineering, service and warranty support and research and development. BAF Technologies, Inc. owned ServoTech Engineering, Inc. (together with BAF Technologies, Inc., "BAF"), which provided, among other services, design and engineering services for natural gas engine systems. Prior to our sale of BAF, we generated revenues through BAF’s sale of natural gas vehicles that had been converted to run on natural gas and design and engineering services for natural gas engine systems. For the year ended December 31, 2013, BAF contributed approximately $7.0 million to our revenue. On June 28, 2013, we sold BAF for approximately $27.2 million.
Volatility of Earnings Related to Warrants
We are required to record the change in the fair market value of our liability-classified warrants in our consolidated financial statements. We have recognized a gain of $5.7 million and $ 1.4 million , respectively, related to recording the estimated fair value changes of our warrants in 2014 and 2015 . See note 11 and 18 to our consolidated financial statements included in this report for more information. Our earnings or loss per share may be materially affected by future gains or losses we are required to recognize as a result of valuing our warrants. As of December 31, 2015 , 2,130,682 of our Series I warrants and 127,200 of the NG Advantage warrants assumed from our NG Advantage acquisition remained outstanding.
Debt Compliance

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Certain of the agreements governing our outstanding debt, which are discussed in note  9 to our consolidated financial statements included in this report, have certain non-financial covenants with which we must comply. As of December 31, 2015 , we were in compliance with all of these covenants.
Risk Management Activities
From time to time, we enter into natural gas fuel sales contracts that require us to sell CNG or LNG to our customers at a fixed price. These contracts expose us to the risk that the price of natural gas may increase above the natural gas cost component included in the price at which we are committed to sell the natural 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 natural gas hedging policy pursuant to which we only 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 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 the natural gas hedging policy, a complete copy of which, as amended effective May 29, 2008, is filed as Exhibit 99.1 to our Form 8-K filed with the Securities and Exchange Commission on June 20, 2008. The summary of the policy described above does not purport to be complete and is qualified in its entirety by reference to the full text of the policy.
Due to the restrictions of our hedging policy, we expect to offer fewer fixed price sales contracts to our customers. If we do offer a fixed price sales contract, we anticipate including a price component that would cover our estimated cash requirements over the duration of the underlying futures contracts. The amount 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.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and revenues and expenses recorded during the reporting periods.
On a periodic basis we evaluate our estimates based on historical experience and various other assumptions we believe are reasonable under the circumstances. Actual results could differ from those estimates under different assumptions or conditions. For further information on our significant accounting policies, see note 1 to our consolidated financial statements included in this report.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
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. Goodwill is not amortized. Instead, it is tested for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that goodwill may be impaired. We perform our annual impairment test as of the first day of our fourth fiscal quarter and use qualitative factors to determine whether goodwill is more likely than not to be impaired. The qualitative assessment includes assessing the potential impact on our reporting unit's fair value of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, our market capitalization value, and other relevant entity-specific events. If we conclude from the qualitative assessment that goodwill is more likely than not to be impaired, then we perform a two-step quantitative impairment test. We are required to use judgment when applying the goodwill impairment test including the identification of reporting units among other considerations. We determined we are a single reporting unit for the purpose of our goodwill impairment test. Based upon our qualitative assessment of goodwill, we concluded it is more likely than not that the fair value of our reporting unit exceeds its carrying amount and no further quantitative analysis was warranted. During fiscal 2015, 2014, and 2013, there were no indicators of impairment to goodwill. Subsequent to December 31, 2015, our stock price has declined due to adverse macroeconomic conditions surrounding the energy industry, which are driven by depressed oil prices. As a result of the recent volatility of our market capitalization, it is possible that our goodwill could become impaired, which could result in a material charge and adversely affect our results of operations.

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We review long-lived assets, which includes property and equipment and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset or asset group. Estimated future cash flows are determined by management based on a number of estimates. The determination of fair value requires significant judgment by management. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
In the fourth quarter of 2014, we recorded an impairment to an intangible asset contract, acquired at the time of the Clean Energy Compression acquisition, in the amount of $4.8 million. There were no impairments to our long-lived assets during 2015 or 2013.
Revenue Recognition
We recognize revenue on various products and services. Our volume related revenues primarily consist of CNG and LNG fuel sales, RIN and LCFS Credits sales and O&M services. These revenues are recognized in accordance with US GAAP, which requires that the following four criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the customer or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. Applying these factors, we typically recognize revenue from the sale of natural gas fuel at the time it is dispensed or, in the case of LNG sales agreements, delivered to our customers' storage facilities. We recognize revenue from O&M service agreements as we provide the related services.
In certain transactions with our customers, we agree to provide multiple products or services, including construction of and sale of a station, providing O&M services to the station, and sale of fuel to the customer. We evaluate the separability of revenues based on current FASB authoritative guidance, which provides a framework for establishing whether or not a particular arrangement with a customer has one or more revenue elements and allows us to use a combination of internal and external objective and reliable evidence to develop management's best estimate of the fair value of the contract elements. If the arrangement contains a lease, we use the existing evidence of fair value to separate the lease from the other elements in the arrangement. The arrangement's consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the estimated relative selling price of each deliverable, which is determined based on the historical data derived from our stand -alone projects. The revenue allocated to the construction of the station is recognized using the completed-contract method. The revenue allocated to the O&M is recognized ratably over the term of the arrangement and sale of fuel is recognized as the fuel is delivered.
We typically recognize revenue on fueling station construction projects where we sell the station to the customer using the completed-contract method. The construction contract is considered to be substantially completed at the earlier of customer acceptance of the fueling station or the time when the fuel dispensing activities begin. When applicable, multi-station construction contracts are segmented into phases as negotiated with customers. Gross margin related to each phase is recognized at its substantial completion. For Clean Energy Compression and Clean Energy Cryogenics, we use the percentage-of-completion method of accounting. In these circumstances, revenue is recognized as work on a contract progresses, based on costs incurred in relation to total estimated costs to be incurred for that project.
We generate LCFS Credits when we sell RNG and conventional natural gas for use as a vehicle fuel in California and Oregon, and we generate RIN Credits when we sell RNG for use as a vehicle fuel. We can sell these credits to third parties who need the RINs and LCFS Credits to comply with federal and state emission requirements. We recognize revenue from the generation of these credits at the time we have an agreement in place to sell the credits at a fixed or determinable price.
Income Taxes
We compute income taxes under the asset and liability method. This method requires the recognition of deferred tax assets and liabilities for temporary differences between the financial carrying amounts and the tax bases of our 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. We record a valuation allowance against any deferred tax assets when management determines it is more likely than not that the 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 book income and the amounts and estimated timing of the reversal of any deferred tax assets and liabilities.
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 for resolution. Although we believe that

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adequate consideration has been given to such issues, it is possible that the ultimate resolution of such issues could be significantly different than originally estimated.
Fair Value Estimates
We have established a framework for measuring fair value in accordance with authoritative guidance. The framework includes 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 our Company. Unobservable inputs are inputs that reflect our 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.
Our significant uses of fair value measurements include:
Allocation of the purchase price paid to acquire businesses to the assets acquired and liabilities assumed in those acquisitions,
Assessments of impairment of long-lived assets
Inputs into the determination of the fair value of certain warrants to purchase our common stock include the current market price of our common stock, exercise price of the warrants, volatility of our stock price, term of the warrants, and discount rate used. Significant changes in any of those inputs in isolation can result in a significant change in the fair value measurement. Generally, a positive change in the market price of our common stock, an increase in the volatility of our common stock, or an increase in the remaining term of the warrant would result in a directionally similar change in the estimated fair value of the warrants and thus an increase in the associated liability. An increase in the assumed discount rate or a decrease in the positive differential between the warrant's exercise price and the market price of our common stock would result in a decrease in the estimated fair value measurement of the warrants and thus a decrease in the associated liability.
Recently Adopted Accounting Changes and Recently Issued and Adopted Accounting Standards
See note  1 to our consolidated financial statements included in this report.
Results of Operations
Fiscal Year Ended December 31, 2015 Compared to Fiscal Year Ended December 31, 2014
Revenue.     Revenue decreased by $ 44.6 million  to $ 384.3 million  for 2015 from $428.9 million for 2014 due to lower effective pricing and fewer station construction and compressor sales. Revenue for station construction sales decreased by $29.6 million principally from the sale of more station upgrades and fewer full station projects in 2015. Full station projects generally have substantially higher price points than station upgrades. Clean Energy Compression revenue decreased by $30.3 million due to the effects of a continued global decline in oil prices, the strength of the U.S. dollar and slower than expected sales in China. Approximately $24.3 million of the decrease in revenue was the result of lower effective prices of gallons delivered, which were caused by lower commodity costs in 2015 compared to 2014. Our effective price per gallon charged was $0.84 for 2015, a $0.10 per gallon decrease from $0.94 per gallon charged for 2014. The decrease in our effective price was due to lower fuel prices driven by lower commodity costs, partially offset by increased RINs and LCFS credits sales. The effective price per gallon is defined as revenues generated from selling CNG, LNG, RNG, any related RINs and LCFS Credits sales and providing O&M services to our vehicle fleet customers at stations that we do not own and for which we receive a per-gallon fee, all divided by the total GGEs delivered less GGEs delivered by non-consolidated entities, such as equity method investments.

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The decrease in revenue was partially offset by a 43.4 million increase in the number of gallons delivered, from 265.1 million gallons delivered in 2014 to 308.5 million gallons delivered in 2015, which provided approximately $36.6 million  in increased revenue for 2015 compared to 2014. The increase in volume was due to a 46.6 million gallon increase in CNG volume delivered, which was primarily attributable to 22 new refuse customers, six new transit customers, and seven new trucking customers partially offset by a decrease of  3.4 million  gallons in RNG volume delivered, primarily due to the sale in December 2014 of our interest in DCE and, with it, our interest in a RNG extraction and processing project at the McCommas Bluff landfill in Dallas, Texas. LNG volume delivered was relatively flat between periods.
Cost of sales.     Cost of sales decreased by $ 50.3 million to $ 258.5 million for 2015 , from $308.8 million for 2014 . The decrease was primarily due to fewer station and compressor sales, as we experienced a $24.0 million decrease in station installation costs and a $28.1 million decrease in compressor costs between periods due to decreased activity. Our effective cost per gallon decreased by $0.09 per gallon, from $0.65 per gallon for 2014 to $0.56 per gallon for 2015. Our effective cost per gallon is defined as the total costs associated with delivering natural gas, including gas 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 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 equity method investments. The decrease in our effective cost per gallon was primarily due to lower natural gas prices. The increased gas volumes delivered partially offset by decreased natural gas prices resulted in a net decrease of $1.2 million in gas commodity costs. In addition, service costs increased as a percentage of service revenues during 2015 due to lower margin services performed by Clean Energy Cryogenics and Clean Energy Compression compared to the prior year.  These decreases were partially offset by a $3.0 million increase between periods of other natural gas delivery costs.
Gain from change in fair value of derivative warrants .     Derivative gains decreased by $ 4.3 million to $ 1.4 million for 2015 , from $ 5.7 million for 2014 . These amounts represent the non-cash impact with respect to valuing our outstanding warrants based on our mark-to-market accounting for the warrants during the periods (see note  18 to our consolidated financial statements included in this report).
Selling, general and administrative.     Selling, general and administrative expenses decreased by $ 12.7 million to $ 113.7 million for 2015 , from $ 126.4 million for 2014 . The decrease is primarily attributable to a $6.7 million decrease in employee-related expenses between periods due to company-wide cost cutting measures. Reduced expenditures in travel and entertainment, stock-based compensation expense, and business insurance premiums led to a decrease of $3.0 million compared to the prior period. Further contributing to the decrease between periods was the absence in 2015 of certain events that caused increased expenses in 2014, such as $1.3 million in retirement benefits related to the retirement of our former Chief Marketing Officer in 2014 and $0.6 million in severance costs related to the departure of our former Chief Financial Officer in 2014.
Impairment of long-lived intangible definite lived assets . In the fourth quarter of 2014, we recorded an impairment to an intangible asset contract acquired in connection with the Clean Energy Compression acquisition in an amount of $4.8 million. There were no impairments in 2015.
Depreciation and amortization.     Depreciation and amortization increased by $ 6.1 million to $ 55.2 million for 2015 , from $ 49.1 million for 2014 . This increase was primarily due to additional depreciation expense in 2015 related to increased property and equipment balances between periods from our expanded station network and assets we acquired in our acquisition of NG Advantage during the fourth quarter of 2014.
Interest expense, net.     Interest expense, net, increased by $ 50.6 million to $ 95.0 million for 2015 , from $ 44.4 million for 2014 . This increase was primarily due to a non-cash charge related to the elimination of unamortized debt issuance costs of $ 54.9 million associated with our termination of our Credit Agreement with GE. This increase was partially offset when compared to interest expense 2014 by the extinguishment of the Mavrix Note and resulting discontinuation of interest accrual thereunder in December 2014. (See note 9 to our consolidated financial statements included in this report for a description of our former Credit Agreement with GE and the Mavrix Note).
Other income (expense), net.     Other income (expense), net, increased by $ 5.2 million to $ 2.6 million for 2015 , from $ (2.6) million for 2014 . This increase was primarily due to foreign currency exchange rate changes between periods on our Clean Energy Compression customer deposits held in foreign currencies and a $1.4 million gain from a litigation settlement in 2015.
Loss from equity method investment.     Losses from our equity method investments increased by $ 0.3 million to $ 0.8 million for 2015 , compared to a loss of $ 0.5 million for 2014 due to losses from our MCEP joint venture, which was formed in September 2014.

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Gain from sale of subsidiary.     In 2014, we recorded a gain of $12.0 million from the sale of DCE and in 2015 we recorded a related earn-out of $0.9 million. (See note 2 to our consolidated financial statements included in this report for additional discussion of the sale of DCE).
Income tax expense.     Income tax expense increased by $0.5 million to $1.6 million for 2015 compared to $1.1 million for 2014 . The increase is primarily attributable to an increase in our tax on foreign operations between periods.
Loss (income) of noncontrolling interest.     In 2015 , we recorded $ 1.2 million for the noncontrolling interest in the net income of NG Advantage and in 2014 we recorded a total of $1.2 million for the noncontrolling interest in the net income of DCE and NG Advantage. (See note 2 to our consolidated financial statements included in this report for additional discussion of the noncontrolling interests in DCE and NG Advantage). The noncontrolling interests represent the 46.7% noncontrolling interest in NG Advantage upon our acquisition of a 53.3% interest in NG Advantage in October 2014, and the 30% interest of our joint venture partner in DCE until September 2014 when we sold 19% of DCE to our joint venture partner, which increased its interest from 30% to 49%. In December 2014, we sold our remaining 51% ownership interest in DCE to the joint venture partner.
Fiscal Year Ended December 31, 2014 Compared to Fiscal Year Ended December 31, 2013
Revenue.     Revenue increased by $76.4 million to $428.9 million for 2014 from $352.5 million for 2013. A portion of this increase was the result of a 50.7 million increase in the number of gallons delivered between periods, from 214.4 million gasoline gallon equivalents in 2013 to 265.1 million gasoline gallon equivalents in 2014. The increase in volume was primarily from an increase in CNG sales of 38.7 million gallons. Our net increase in CNG volume was primarily from 26 new refuse customers, 16 new transit customers, five new airport customers, and four new trucking customers, which together accounted for 18.4 million gallons of the CNG volume increase, and an additional 4.6 million CNG gallons sold as a result of our acquisition and purchase of a CNG station from NG Advantage in 2014. We also experienced an increase of 20.7 million gallons in CNG volume between periods from our existing airport, refuse and trucking customers. These CNG gallon increases were offset by a decline of 2.2 million gallons associated with the sale of our 49% interest in our Peruvian joint venture in March 2013 and 2.8 million gallons related to the loss of three CNG O&M service stations for one transit customer. Further, we experienced an increase of 10.3 million gallons in LNG volume between periods, which was primarily due to 7.1 million gallons from 15 new refuse, transit, trucking and industrial customers, and 3.2 million gallons from existing trucking, refuse, transit and industrial customers. We experienced a 1.7 million gallons increase between periods in our RNG sales, primarily due to increased RNG production at our facilities in Canton, Michigan and North Shelby, Tennessee. The increase was offset by a decrease in RNG sales at our Dallas, Texas facility, which was sold in December 2014 in connection with the sale of our interest in DCE and, with it, our interest in a RNG extraction and processing project at the McCommas Bluff landfill in Dallas, Texas. Revenue attributable to the design and construction of fueling stations and code-compliant maintenance facilities sold to our customers increased by $40.3 million between periods, primarily due to completion of 16 new CNG stations for new refuse, airport, transit and industrial customers and 18 upgrades for CNG stations for existing refuse and transit customers. Revenue attributable to Clean Energy Compression increased between periods by $7.3 million. Our effective price per gallon was $0.94 for 2014, a $0.03 per gallon increase from $0.91 in 2013. The increase in the effective price per gallon was primarily due to higher natural gas prices in 2014, upon which we base a portion of our pricing to our customers.
The increases in revenues was partially offset by a $17.0 million decrease in VETC revenue primarily due to our recording of $20.8 million of 2012 VETC revenue in the first quarter of 2013 as a result of legislation passed in January 2013 that retroactively reinstated the fuel tax credit to January 1, 2012. Additionally, we experienced a decrease of $7.0 million in the sales of natural gas vehicle equipment and emission control services by BAF between periods due to the sale of BAF in June 2013.
Cost of sales.     Cost of sales increased by $84.0 million to $308.8 million for 2014, from $224.8 million for 2013. The increase was primarily due to increased costs related to delivering and servicing more volume to our customers. Our effective cost per gallon increased by $0.07 per gallon, from $0.58 per gallon in 2013 to $0.65 per gallon in 2014. This increase was primarily the result of higher natural gas and LNG delivery costs between periods. Additionally, station construction costs increased by $33.9 million between periods as station construction sales increased between periods. Also contributing to the cost of sales increase was a $10.3 million increase in costs related to Clean Energy Compression primarily due to increased compressor sales between periods and higher manufacturing costs related to equipment sold for a mining power project in Australia during 2014. These increases were partially offset by a $6.8 million decrease in costs related to BAF's vehicle equipment sales and emission control services, as we sold BAF in June 2013.
Gain from change in fair value of derivative warrants.     Derivative gains increased by $4.8 million to $5.7 million for 2014, from $0.9 million for 2013. These amounts represent the non-cash impact with respect to valuing our outstanding warrants based on our mark-to-market accounting for the warrants during the periods (see note  18 to our consolidated financial statements included in this report ).

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Selling, general and administrative.     Selling, general and administrative expenses decreased by $11.6 million to $126.4 million for 2014, from $138.0 million for 2013. The decrease is primarily attributable to a decrease in our stock based compensation expense of $11.5 million in 2014. In addition, we experienced decreases in travel and entertainment expenses of $2.1 million, decreases in natural gas policy and promotion expenses of $1.6 million, decreases in costs related to vacating in 2013 our former offices in Seal Beach, California of $1.6 million and decreases in research and development costs of $0.3 million. These decreases were partially offset by an increase in our salaries and employee benefits by $5.4 million between periods, primarily due to higher average salaries and benefits per employee in 2014 compared to 2013, as we increased our operations headcount by 44 and hired more management level positions between periods to help support America's Natural Gas Highway and our continued business expansion. A portion of the increase in our salaries and employee benefits is due to $1.3 million in retirement benefits related to the retirement of our former Chief Marketing Officer in 2014 and $0.6 million in severance costs related to the departure of our former Chief Financial Officer in 2014.
Impairment of long-lived intangible definite lived assets.     In the fourth quarter of 2014, we recorded an impairment to an intangible asset contract acquired in connection with the Clean Energy Compression acquisition in an amount of $4.8 million. There were no impairments in 2013.
Depreciation and amortization.     Depreciation and amortization increased by $6.8 million to $49.1 million for 2014, from $42.3 million for 2013. This increase was primarily due to additional depreciation expense in 2014 related to increased property and equipment balances between periods, which primarily resulted from our expanded station network, including our efforts to build-out America's Natural Gas Highway.
Interest expense, net.     Interest expense, net, increased by $15.1 million to $44.4 million for 2014, from $29.3 million for 2013. This increase was primarily the result of an increase in interest expense related to the $50.0 million of convertible notes we issued in June 2013, the $250.0 million of convertible notes we issued in September 2013, the aggregate $15.0 million advanced under the Mavrix Note during 2013, and the $12.4 million Canton Bonds issued in March 2014. An early termination fee of $0.8 million, incurred upon our repayment in full of the Mavrix Note in connection with the sale of DCE, and additional debt issuance costs of $0.9 million associated with the issuance of the Canton Bonds were also expensed and included in interest expense in 2014 (see note  9 to our consolidated financial statements included in this report for a description of our outstanding debt).
Other income (expense), net.     Other income (expense), net, increased by ($1.6) million to ($2.6) million for 2014, from ($1.0) million for 2013. This increase was primarily due to foreign currency exchange rate changes between periods on our Clean Energy Compression customer deposits held in foreign currencies.
Loss from equity method investment.     Losses from our equity method investments increased by $0.4 million to $0.5 million for 2014, from $0.1 million for 2013. This increase was primarily due to losses from our MCEP joint venture, which was formed in September 2014. During 2013, we recorded $0.1 million of equity in the loss of our 49% interest in our Peruvian joint venture. We completed the sale of our interest in our Peruvian joint venture in March 2013.
Gain from sale of equity method investment.     In 2013, we recorded a $4.7 million gain from the sale of our 49% interest in our Peruvian joint venture.
Gain from sale of subsidiary.     In 2014, we recorded a gain of $12.0 million from the sale of DCE. During 2013, we recorded a $14.1 million gain from the sale of BAF.
Income tax expense.     Income tax expense decreased by $2.6 million to $1.1 million for 2014 compared to $3.7 million for 2013. The decrease is primarily attributable to a decrease in our tax on foreign operations between periods, which in 2013 included $1.4 million of taxes that arose from the sale of our interest in our Peruvian joint venture.
Loss (income) of noncontrolling interest.     During 2014 and 2013, we recorded $1.2 million and $0 million, respectively, for the noncontrolling interest in the net income of DCE and NG Advantage. (see note 2 to our consolidated financial statements included in this report for additional discussion of the noncontrolling interests in DCE and NG Advantage).
Seasonality and Inflation
To some extent, we experience seasonality in our results of operations. Natural gas vehicle fuel amounts consumed by some of our customers tend to be higher in summer months when buses and other fleet vehicles use more fuel to power their air conditioning systems. 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.
Since our inception, 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

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stations adequately, build new stations, expand our existing facilities or pursue additional RNG production projects, or could materially increase our operating costs.
Liquidity and Capital Resources
We require cash to fund our capital expenditures, operating expenses and working capital requirements, including outlays for the design and construction of new fueling stations, debt repayments and repurchases, maintenance of LNG production facilities, the purchase of new CNG tanker trailers, investment in RNG production, manufacturing natural gas fueling compressors and related equipment, mergers and acquisitions, financing natural gas vehicles for our customers and general corporate purposes, including geographic expansion (domestically and internationally), pursuing new customer markets, supporting our sales and marketing activities, supporting legislative and regulatory initiatives and for working capital. Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by financing activities, cash provided by sales of assets, and if available, grants, VETC and other credits.
Liquidity
We expect cash from our operating activities to fluctuate as a result of a number of factors, including our operating results, the timing of our billing, collections and liability payments, completion of our station construction projects, government grants, and the timing and amount of tax and other fuel credits. Cash used in operating activities was $ 12.1 million in 2015 , a decrease of $63.9 million, compared to $76.0 million used in 2014 . The decrease between periods is primarily due to an improvement in our net loss of $ 26.4 million , net of non-cash adjustments, and increased cash from changes in operating assets and liabilities of approximately $ 37.5 million which includes the cash receipt of $28.4 million of VETC revenues attributable to natural gas vehicle fuel sales in 2014, plus $9.1 million of normal changes in working capital due to timing differences.
Cash used in investing activities was $ 33.9 million in 2015 , a decrease of $ 13.0 million , compared to $46.9 million in 2014 . Capital expenditures decreased by $ 37.2 million primarily due to our purchase in 2014 of 67 CNG-In-A-Box units (relatively small turn-key, self-contained CNG stations) for $18.4 million which were not repeated in 2015 and less construction of Company owned stations between periods. In 2014, we received $ 39.8 million in net cash proceeds for the sale of DCE and in 2015 we received an additional $ 1.1 million for certain related performance tests. Additionally, we had an increase of $ 3.9 million of cash provided from our maturities, net of purchases of short term investments, and a decrease of $ 6.6 million used for investments in other entities due to the absence of any such investments in 2015.
Cash provided by financing activities was $ 0.4 million in 2015 , an increase of $ 26.2 million , compared to $25.8 million used in 2014 . The change was primarily due to the excess of repayments of borrowings over proceeds from such borrowings in 2014 that was not repeated in 2015. The repayments in 2014 relate to the payoffs of a revolving line of credit and the Mavrix Note. Offsetting the repayments in 2014 was proceeds from the issuance of the Canton Bonds by our Canton subsidiary for $12.4 million in 2014, with no issuance in 2015. Additionally, there was an increase of $4.0 million in proceeds from issuances of common stock in 2015 which includes cash received from our ATM Program described below.
Our financial position and liquidity are, and will continue to be, influenced by a variety of factors, including our ability to generate cash flows from operations, the level of our outstanding indebtedness and the principal and interest we are obligated to pay on our indebtedness, our capital expenditure requirements (which consist primarily of station construction costs and the purchase of CNG tanker trailers and, to a lesser extent, LNG plant maintenance costs and RNG plant construction and maintenance costs) and any merger, divestiture or acquisition activity.
Sources of Cash
Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by financing activities, cash provided by sales of assets, and, if available, grants, VETC and other credits. At December 31, 2015 we had total cash and cash equivalents and short-term investments of $ 146.7 million , compared to $214.9 million at December 31, 2014 .
On June 14, 2013, T. Boone Pickens and Green Energy Investment Holdings, LLC delivered $50.0 million to us in satisfaction of a funding requirement under the 7.5% Notes.
In September 2013, we completed a private offering of the 5.25% Notes. The net proceeds from the sale of the 5.25% Notes after the payment of certain debt issuance costs of $7.8 million were approximately $242.2 million, which we have used, and intend to continue to use, to fund capital expenditures and for general corporate purposes.
On March 19, 2014, Canton completed the issuance of the Canton Bonds in the aggregate principal amount of $12.4 million. The proceeds were used primarily to (i) refinance the cost of constructing and equipping its RNG extraction and production project in Canton, Michigan and (ii) pay a portion of the cost associated with the issuance of the Canton Bonds.

39


On November 11, 2015, we entered into an equity distribution agreement with Citigroup Global Markets Inc. (“Citigroup”), as sales agent and/or principal, pursuant to which we may issue and sell, from time to time, through or to Citigroup shares of our common stock having an aggregate offering price of up to $75.0 million in an at-the-market offering program (the “ATM Program”). As of December 31, 2015, we received $6.5 million in proceeds, net of $0.5 million in fees and issuance costs, and issued 1,561,902 shares of our common stock in the ATM Program. We intend to use any net proceeds from the ATM Program for general corporate purposes, which may include repaying all or a portion of our outstanding SLG Notes. See notes 9 and 11 to our consolidated financial statements included in this report for further information. Subsequent to December 31, 2015, we have received an additional $ 12.7 million in proceeds, net of $ 0.4 million in fees and issuance costs, and we have issued an additional 4,787,342 shares of our common stock in the ATM Program.
On February 29, 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank ("Plains"), pursuant to which Plains agreed to lend us up to $50.0 million on a revolving basis for a term of one year (the "Credit Facility"). Simultaneously, we drew down $50.0 million under this Credit Facility.
See note  9 to our consolidated financial statements included in this report for a description of all of our outstanding debt.
We believe that our current cash, cash equivalents and short-term investments, cash generated from operations and financing activities will satisfy our routine business requirements for at least the next twelve months and the foreseeable future.
Capital Expenditures
Our business plan calls for approximately $ 25.5  million in capital expenditures in 2016 , primarily related to construction of CNG and LNG fueling stations and the purchase of CNG trailers by NG Advantage. Additionally, we had total consolidated indebtedness of approximately $ 572.4 million as of December 31, 2015, of which approximately $ 150.1 million , $ 5.5 million , $ 305.1 million , $ 54.7 million , $ 53.1 million , and $ 4.0 million is expected to become due in 2016, 2017, 2018, 2019, 2020, and thereafter, respectively. In addition, in February 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank, pursuant to which we may incur additional indebtedness in the principal amount up to $50.0 million. We expect our total consolidated interest payment obligations relating to our indebtedness to be approximately $32.0 million for the year ending December 31, 2016. With respect to certain of our outstanding indebtedness due in 2016, we anticipate repaying, with a combination of cash and shares of our common stock, all or some portion of the outstanding principal amount of SLG Notes (as defined and discussed in note 9 to our consolidated financial statements included in this report), together with accrued and unpaid interest, on or prior to their August 2016 maturity date. To this end, on March 1, 2016 and pursuant to the consent of the holders of the SLG Notes, we prepaid an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. In addition, with respect to certain of our outstanding indebtedness due in 2018, in February 2016, our board of directors authorized and approved our use of up to $25.0 million to opportunistically purchase in the open market our outstanding 5.25% Notes (as defined and discussed in note 9 to our consolidated financial statements included in this report). Pursuant to such approval, on February 18, 2016, we purchased $32.5 million in face amount of our 5.25% Notes for an aggregate purchase price of $16.8 million. We are permitted to repay up to $ 295.0 million of our consolidated indebtedness outstanding at December 31, 2015 at maturity with shares of our common stock rather than cash, with the amount of shares determined by the then-current trading price of our common stock. Any such issuance would increase the number of our outstanding shares and may significantly dilute the ownership interest of our stockholders.
We may also elect to invest additional amounts in companies, assets or joint ventures in the natural gas fueling infrastructure, vehicle or services industries, including RNG production or use capital for other activities or pursuits. We will need to raise additional capital to fund any capital expenditures, investments, debt repayments or repurchases that we cannot fund through available cash or cash generated by operations or that we cannot fund through other sources, such as with our common stock. The timing and necessity of any future capital raised will depend on various factors, including our rate of new station construction, debt repayments or repurchases (either prior to or at maturity), any potential merger or acquisition activity, and other factors described above under “Liquidity and Capital Resources.” We may seek to raise additional capital through one or more sources, including, among others, selling assets, obtaining new or restructuring existing debt, obtaining equity capital, or any combination of these or other available sources of capital. We may not be able to raise capital when needed on terms that are favorable to us or existing stockholders, or at all. Any inability to raise capital may impair our ability to build new stations, develop natural gas fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to grow our business and generate sustained or increased revenues.
Contractual Obligations
The following represents the scheduled maturities of our contractual obligations as of December 31, 2015 :

40


 
Payments Due by Period
 
Contractual Obligations: (in thousands)
Total
 
Less than 1 year
 
1 - 3 years
 
3 - 5 years
 
More than
5 years
 
Long-term debt and capital lease obligations(a)
$
665,472

 
$
183,985

 
$
360,528

 
$
116,709

 
$
4,250

 
Operating lease commitments(b)
54,025

 
7,998

 
13,856

 
11,297

 
20,874

 
Long-term "take or pay" natural gas purchase commitment contracts(c)
9,959

 
4,650

 
4,332

 
977

 

 
Construction contracts(d)
9,865

 
9,865

 

 

 

 
Total
$
739,321

 
$
206,498

 
$
378,716

 
$
128,983

 
$
25,124

 
_______________________________________________________________________________
(a)
Consists of long-term debt and capital lease obligations to finance acquisitions and equipment purchases, including future interest payments.
(b)
Consists of various space and ground leases for our California LNG plant, office spaces and fueling stations as well as leases for equipment.
(c)
Represents our estimates for two long-term fixed "take-or-pay" natural gas purchase commitment contracts.
(d)
Consists of our obligations to fund various fueling station construction projects, net of amounts funded through December 31, 2015 , and excluding contractual commitments related to station sales contracts.
Off-Balance Sheet Arrangements
At December 31, 2015 , we had the following off-balance sheet arrangements that had, or are reasonably likely to have, a material effect on our financial condition:
outstanding surety bonds for construction contracts and general corporate purposes totaling $ 58.8  million ;
two long-term take-or-pay contracts for the purchase of natural gas; and
operating leases where we are the lessee.
We provide surety bonds primarily for construction contracts in the ordinary course of business, as a form of guarantee. No liability has been recorded in connection with our surety bonds as we do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these arrangements for which we will not be reimbursed.
We have two long-term take-or-pay contracts that require us to purchase minimum volumes of natural gas at index based prices which expire in October 2017 and December 2020, respectively.
We have entered into operating lease arrangements for certain equipment and for our office and field operating locations in the ordinary course of business. The terms of our leases expire at various dates through 2021. Additionally, in November 2006, we entered into a ground lease for 36 acres in California on which we built our California LNG liquefaction plant. The lease is for an initial term of thirty years and requires payments of $0.2 million per year, plus up to $0.1 million per year for each 30 million gallons of production capacity utilized, subject to future adjustment based on consumer price index changes. We must also pay a royalty to the landlord for each gallon of LNG produced at the facility, as well as a fee for certain other services that the landlord provides.
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk.
In the ordinary course of business, we are exposed to various market risks, including commodity price risk and risks related to foreign currency exchange 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, weather conditions, overall economic conditions and foreign and domestic government regulations and relations.

41


Natural gas costs represented 26% (or 31% excluding Clean Energy Compression and Clean Energy Cryogenics) of our cost of sales for 2014 and 29% (or 32% excluding Clean Energy Compression and Clean Energy Cryogenics) of our cost of sales for 2015 .
To reduce price risk caused by market fluctuations in natural gas, we may enter into exchange traded natural gas futures contracts. These arrangements expose us to the risk of financial loss in situations where the other party to the contract defaults on the contract or there is a change in the expected differential between the underlying price in the contract and the actual price of natural gas we pay at the delivery point. We did not have any futures contracts outstanding at December 31, 2015 .
Foreign Currency Exchange Rate Risk.
Because we have foreign operations, we are exposed to foreign currency exchange gains and losses. Since the functional currency of our foreign subsidiaries is in their local currency, the currency effects of translating the financial statements of these foreign subsidiaries, which operate in local currency environments, are included in the accumulated other comprehensive income (loss) component of consolidated equity in our consolidated financial statements and do not impact earnings. However, foreign currency transaction gains and losses not in our subsidiaries' functional currency do impact earnings and resulted in approximately $1.0 million of gains in 2015 . During 2015 , our primary exposure to foreign currency rates related to our 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 foreign currency. If the exchange rates on these assets and liabilities were to fluctuate by 10% from rates as of December 31, 2015 , we would expect a corresponding fluctuation in the value of the assets and liabilities of approximately $1.8 million.

42


Item 8.    Financial Statements and Supplementary Data.
Quarterly Results of Operations
The following tables set forth our quarterly consolidated statements of operations data for the eight quarters ended December 31, 2015 . The information for each quarter is unaudited and we have prepared the information on the same basis as the audited consolidated financial statements included in this annual report on Form 10-K. This information includes all adjustments that management considers necessary for the fair presentation of such data. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for descriptions of the effects of any extraordinary, unusual or infrequently occurring items recognized in any of the periods covered by the below quarterly data. The quarterly data should be read together with our consolidated financial statements and related notes included in this annual report on Form 10-K. The results of operations for any one quarter are not necessarily indicative of results to be expected in the current period or any future period.
Quarterly Financial Data (Unaudited)
(In thousands, except share data)
 
For the Quarter Ended
 
 
March 31,
2014
 
June 30,
2014
 
September 30,
2014
 
December 31,
2014
 
Revenue:
 

 
 

 
 

 
 

 
Product revenues
$
85,789

 
$
86,473

 
$
90,448

 
$
117,489

 
Service revenues
9,486

 
11,660

 
12,972

 
14,623

 
Total revenues
95,275


98,133


103,420


132,112

 
Operating expenses:
 

 
 

 
 

 
 

 
Cost of sales (exclusive of depreciation and amortization shown separately below):
 

 
 

 
 

 
 

 
Product cost of sales
67,867

 
69,175

 
79,021

 
75,399

 
Service cost of sales
3,764

 
4,080

 
4,953

 
4,528

 
Derivative (gains) losses on warrant valuation
(4,455
)
 
2,286

 
(3,255
)
 
(324
)
 
Selling, general and administrative
33,490

 
34,400

 
28,240

 
30,305

 
Depreciation and amortization
11,515

 
11,608

 
12,325

 
13,610

 
Impairment of long-lived intangible definite lived assets

 

 

 
4,772

 
Total operating expenses
112,181


121,549


121,284


128,290

 
Operating income (loss)
(16,906
)
 
(23,416
)
 
(17,864
)
 
3,822

 
Interest expense, net
(9,510
)
 
(10,130
)
 
(10,676
)
 
(14,041
)
 
Other income (expense), net
(1,286
)
 
1,121

 
(880
)
 
(1,526
)
 
Loss from equity method investments

 

 

 
(490
)
 
Gain (loss) from sale of subsidiary

 

 

 
11,998

 
Loss before income taxes
(27,702
)

(32,425
)

(29,420
)

(237
)
 
Income tax (expense) benefit
(962
)
 
(147
)
 
(811
)
 
845

 
Net income (loss)
(28,664
)

(32,572
)

(30,231
)

608

 
Loss of noncontrolling interest
(71
)
 
(266
)
 
(138
)
 
(725
)
 
Net income (loss) attributable to Clean Energy Fuels Corp. 
$
(28,593
)

$
(32,306
)

$
(30,093
)

$
1,333

 
Basic income (loss) per share
$
(0.30
)
 
$
(0.34
)
 
$
(0.32
)
 
$
0.01

 
Fully diluted income (loss) per share
$
(0.30
)
 
$
(0.34
)
 
$
(0.32
)
 
$
0.01

 


43


 
For the Quarter Ended
 
 
March 31,
2015
 
June 30,
2015
 
September 30,
2015
 
December 31,
2015
 
Revenue:
 

 
 

 
 

 
 

 
Product revenues
$
69,297

 
$
75,744

 
$
77,355

 
$
106,772

 
Service revenues
16,551

 
11,124

 
14,902

 
12,575

 
Total revenues
85,848

 
86,868

 
92,257

 
119,347

 
Operating expenses:
 

 
 

 
 

 
 

 
Cost of sales (exclusive of depreciation and amortization shown separately below):
 

 
 

 
 

 
 

 
Product cost of sales
55,379

 
59,387

 
59,313

 
56,542

 
Service cost of sales
9,354

 
4,399

 
7,410

 
6,701

 
Derivative (gains) losses on warrant valuation
(883
)
 
300

 
(502
)
 
(329
)
 
Selling, general and administrative
30,233

 
28,994

 
27,800

 
26,626

 
Depreciation and amortization
12,886

 
13,402

 
14,000

 
14,931

 
Total operating expenses
106,969

 
106,482

 
108,021

 
104,471

 
Operating loss
(21,121
)
 
(19,614
)
 
(15,764
)
 
14,876

 
Interest expense, net
(9,895
)
 
(9,973
)
 
(10,152
)
 
(64,950
)
 
Other income (expense), net
547

 
317

 
2,648

 
52

 
Loss from equity method investments
(204
)
 
(345
)
 
(154
)
 
(112
)
 
Loss before income taxes
(30,673
)
 
(29,615
)
 
(23,422
)
 
(50,134
)
 
Income tax expense
(854
)
 
(740
)
 
241

 
(261
)
 
Net loss
(31,527
)
 
(30,355
)
 
(23,181
)
 
(50,395
)
 
Loss of noncontrolling interest
(380
)
 
(393
)
 
(62
)
 
(381
)
 
Net loss attributable to Clean Energy Fuels Corp. 
$
(31,147
)
 
$
(29,962
)
 
$
(23,119
)
 
$
(50,014
)
 
Basic loss per share
$
(0.34
)
 
$
(0.33
)
 
$
(0.25
)
 
$
(0.54
)
 
Fully diluted loss per share
$
(0.34
)
 
$
(0.33
)
 
$
(0.25
)
 
$
(0.54
)
 


44


INDEX TO FINANCIAL STATEMENTS


45


Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Clean Energy Fuels Corp.:
We have audited the accompanying consolidated balance sheets of Clean Energy Fuels Corp. and subsidiaries (the Company) as of December 31, 2014 and 2015 , and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2015 . In connection with our audits of the consolidated financial statements, we have also audited the related financial statement schedule. We also have audited the Company's internal control over financial reporting as of December 31, 2015 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these consolidated financial statements and financial statement schedule, 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 these consolidated financial statements and financial statement schedule and an opinion on the Company's internal control over financial reporting based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. 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.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Clean Energy Fuels Corp. and subsidiaries as of December 31, 2014 and 2015 , and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2015 , in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material aspects, the information set forth therein. Also, in our opinion, Clean Energy Fuels Corp. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
/s/ KPMG LLP
Irvine, California
March 3, 2016


46


CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
December 31, 2014
 
December 31, 2015
 
Assets
 

 
 

 
Current assets:
 

 
 

 
Cash and cash equivalents
$
92,381

 
$
43,724

 
Restricted cash
6,012

 
4,240

 
Short-term investments
122,546

 
102,944

 
Accounts receivable, net of allowance for doubtful accounts of $752 and $1,895 as of December 31, 2014 and December 31, 2015, respectively
81,970

 
73,645

 
Other receivables
56,223

 
60,667

 
Inventory
34,696

 
29,289

 
Prepaid expenses and other current assets
19,811

 
14,930

 
Total current assets
413,639

 
329,439

 
Land, property and equipment, net
514,269

 
516,324

 
Notes receivable and other long-term assets, net
71,904

 
19,723

 
Investments in other entities
6,510

 
5,695

 
Goodwill
98,726

 
91,967

 
Intangible assets, net
55,361

 
42,644

 
Total assets
$
1,160,409

 
$
1,005,792

 
Liabilities and Stockholders' Equity
 

 
 

 
Current liabilities:
 

 
 

 
Current portion of debt and capital lease obligations
$
4,846

 
$
150,129

 
Accounts payable
43,922

 
26,906

 
Accrued liabilities
56,760

 
59,082

 
Deferred revenue
14,683

 
10,549

 
Total current liabilities
120,211

 
246,666

 
Long-term portion of debt and capital lease obligations
500,824

 
357,285

 
Long-term debt, related party
65,000

 
65,000

 
Other long-term liabilities
9,339

 
7,896

 
Total liabilities
695,374

 
676,847

 
Commitments and contingencies


 


 
Stockholders' equity:
 

 
 

 
Preferred stock, $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding no shares

 

 
Common stock, $0.0001 par value. Authorized 224,000,000 shares; issued and outstanding 90,203,344 shares and outstanding 92,382,717 shares at December 31, 2014 and December 31, 2015, respectively
9

 
9

 
Additional paid-in capital
898,106

 
915,199

 
Accumulated deficit
(457,441
)
 
(591,683
)
 
Accumulated other comprehensive income (loss)
(3,248
)
 
(20,973
)
 
Total Clean Energy Fuels Corp. stockholders' equity
437,426

 
302,552

 
Noncontrolling interest in subsidiary
27,609

 
26,393

 
Total stockholders' equity
465,035

 
328,945

 
Total liabilities and stockholders' equity
$
1,160,409

 
$
1,005,792

 
   
See accompanying notes to consolidated financial statements.

47


CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
 
Years Ended December 31,
 
 
2013
 
2014
 
2015
 
Revenue:
 

 
 

 
 

 
Product revenues
$
310,813

 
$
380,199

 
$
329,168

 
Service revenues
41,662

 
48,741

 
55,152

 
Total revenue
352,475

 
428,940

 
384,320

 
Operating expenses:
 

 
 

 
 

 
Cost of sales (exclusive of depreciation and amortization shown separately below):
 

 
 

 
 

 
Product cost of sales
213,593

 
291,462

 
230,621

 
Service cost of sales
11,169

 
17,325

 
27,864

 
Gain from change in fair value of derivative warrants
(938
)
 
(5,748
)
 
(1,414
)
 
Selling, general and administrative
138,024

 
126,435

 
113,653

 
Depreciation and amortization
42,318

 
49,058

 
55,219

 
Impairment of long-lived asset

 
4,772

 

 
Total operating expenses
404,166

 
483,304

 
425,943

 
Operating loss
(51,691
)
 
(54,364
)
 
(41,623
)
 
Interest expense, net
(29,287
)
 
(44,357
)
 
(94,970
)
 
Other income (expense), net
(970
)
 
(2,571
)
 
2,627

 
Loss from equity method investments
(76
)
 
(490
)
 
(815
)
 
Gain from sale of equity method investment
4,705

 

 

 
Gain from sale of subsidiary
14,115

 
11,998

 
937

 
Loss before income taxes
(63,204
)
 
(89,784
)
 
(133,844
)
 
Income tax expense
(3,715
)
 
(1,075
)
 
(1,614
)
 
Net loss
(66,919
)
 
(90,859
)
 
(135,458
)
 
Loss (income) of noncontrolling interest
(49
)
 
1,200

 
1,216

 
Net loss attributable to Clean Energy Fuels Corp. 
$
(66,968
)
 
$
(89,659
)
 
$
(134,242
)
 
Loss per share:
 

 
 

 
 

 
Basic and diluted
$
(0.71
)
 
$
(0.96
)
 
$
(1.47
)
 
Weighted average common shares outstanding:
 

 
 

 
 

 
Basic and diluted
93,958,758

 
93,678,432

 
91,607,578

 
See accompanying notes to consolidated financial statements.


48


CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
 
Year Ended December 31, 2013
 
Year Ended December 31, 2014
 
Year Ended December 31, 2015
 
 
Clean Energy
Fuels Corp
 
Noncontrolling
Interest
 
Total
 
Clean Energy
Fuels Corp
 
Noncontrolling
Interest
 
Total
 
Clean Energy
Fuels Corp
 
Noncontrolling
Interest
 
Total
 
Net income (loss)
$
(66,968
)
 
$
49

 
$
(66,919
)
 
$
(89,659
)
 
$
(1,200
)
 
$
(90,859
)
 
$
(134,242
)
 
(1,216
)
 
$
(135,458
)
 
Other comprehensive income (loss), net of tax:
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

 
 
 
Foreign currency translation adjustments net of $0 tax in 2013, 2014 and 2015
(1,680
)
 

 
(1,680
)
 
(7,958
)
 

 
(7,958
)
 
(9,653
)
 

 
(9,653
)
 
Foreign currency adjustments on intra-entity long-term investments, net of $0 tax in 2013, 2014 and 2015
(4,834
)
 

 
(4,834
)
 
4,866

 

 
4,866

 
(8,078
)
 

 
(8,078
)
 
Unrealized gains (losses) on available-for sale securities, net of $0 tax in 2013, 2014, and 2015
(445
)
 

 
(445
)
 
544

 

 
544

 
6

 

 
6

 
Unrecognized gains on derivatives, net of $0 tax in 2013, 2014 and 2015
108

 

 
108

 

 

 

 

 

 

 
Total other comprehensive income (loss)
(6,851
)
 

 
(6,851
)
 
(2,548
)
 

 
(2,548
)
 
(17,725
)
 

 
(17,725
)
 
Comprehensive income (loss)
$
(73,819
)
 
$
49

 
$
(73,770
)
 
$
(92,207
)
 
$
(1,200
)
 
$
(93,407
)
 
$
(151,967
)
 
$
(1,216
)
 
$
(153,183
)
 
See accompanying notes to consolidated financial statements.


49


CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
 
Common stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
(Accumulated
Deficit)
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Noncontrolling
Interest in
Subsidiary
 
Total
Stockholders'
Equity
 
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
 
 
 
 
 
Balance, December 31, 2012
87,634,478