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United States securities and exchange commission logo
August 8, 2022
Robert Vreeland
Chief Financial Officer
Clean Energy Fuels Corp.
4675 MacArthur Court
Suite 800
Newport Beach, CA 92660
Re: Clean Energy Fuels
Corp.
Form 10-K for the
Fiscal Year ended December 31, 2021
Filed February 24,
2022
File No. 001-33480
Dear Mr. Vreeland:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2021
Business
Our Strategy, page 9
1. We note that you have
disclosure on page 5 indicating that during 2021 you purchased
9.2% of the LNG sold
from third-parties, while disclosure on page 10 indicates that RNG
purchased, then blended
and sold with CNG or LNG was obtained from over 60 supply
sources, although no
details of the arrangements are provided.
Please expand the
disclosure referenced above to clarify the extent to which the 90.8%
balance of LNG, which
was apparently produced at your two liquification plants during
2021, was derived from
purchased RNG and CNG; and describe the process and facilities
involved in blending
purchased RNG with CNG and LNG prior to resale.
Robert Vreeland
FirstName LastNameRobert
Clean Energy Fuels Corp. Vreeland
Comapany
August NameClean Energy Fuels Corp.
8, 2022
August
Page 2 8, 2022 Page 2
FirstName LastName
Please also revise your filing to include disclosure that is focused
on identifying
your particular sources of RNG, CNG, and LNG, purchased and sold
through your
distribution network during those periods covered by your report,
including details of the
arrangements governing these relationships, such as the volumes that
are available to you
or which you have committed to purchase, and the manner by which
pricing is
established, to comply with Item 101(c)(iii)(A) of Regulation S-K.
Given the economic distinctions made in describing the types of RNG in
your disclosures
on pages 7 and 8, also clarify the extent to which your sources of RNG
have provided you
with anaerobic digester gas (ADG) versus landfill gas (LFG).
Given the nature of the two joint ventures that you mention in
disclosures on pages 76 and
77, including the amount you have invested to develop ADG RNG
production facilities,
also provide disclosure about the scope of the projects to be
undertaken, the estimated
timeframe for development and production to commence, and estimated
volumes of RNG
that will become available to you through these arrangements.
Properties, page 31
2. We note your disclosures on pages 4, 5, 23 and 35 explaining that you
have a fleet of 74
tanker trailers that are used to deliver RNG to 548 fueling stations
in the U.S. and 25
fueling stations in Canada, which you own, operate or supply, and have
30 nearly
completed stations that are not open due to an insufficient number of
customers.
Please expand your disclosures under this heading to quantify the
number of fueling
stations that you own, describe the arrangements under which you
operate and supply the
others, and discuss the suitability, adequacy, productive capacity,
and extent of utilization
of these facilities, as well as the fleet of tanker trailers and the
LNG liquefaction plants
that you identify, to comply with Item 102 of Regulation S-K.
Please also identify the facilities involved in blending the RNG with
CNG or LNG, and
describe any arrangements to utilize facilities that you do not own,
as may be involved in
gathering, blending, processing, storage and distribution.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Performance Overview, page 36
3. Please modify your references to gasoline gallon equivalents (GGEs) on
pages 3 and 34,
and provide disclosure adjacent to your tabulation of such volumes on
page 37, to describe
the conversion formula that you have utilized to convert CNG and LNG,
and to confirm
that all associated quantifications in your filing are based on the
same formula or if this is
not the case identify the variations and explain your rationale.
Robert Vreeland
FirstName LastNameRobert
Clean Energy Fuels Corp. Vreeland
Comapany
August NameClean Energy Fuels Corp.
8, 2022
August
Page 3 8, 2022 Page 3
FirstName LastName
4. Please expand the disclosures adjacent to your tabulations of
delivered volumes on page
37 as necessary to clarify whether such volumes also correspond to
your purchases and
sales of RNG, CNG and LNG during those periods covered by your annual
report; and if
this is not the case, include such details in separate tabulations.
Please ensure that disclosures pertaining to your sales of RNG, CNG
and LNG here and
elsewhere in the filing clarify the extent to which these products are
being generated
directly from properties or projects in which you have an ownership
interest, as opposed
to being purchased from third parties.
5. We note that the measures you report as gross margin in the last table
on page 37 reflect
the product and service revenues that you report on page 60, net of
the product and service
cost of sales, without considering depreciation and amortization,
which you have indicated
is attributable to cost of sales.
If your intent was to present gross margin in accordance with GAAP,
you
should recalculate these measures to reflect all costs that would be
attributable to cost of
sales under GAAP, such as depreciation and amortization.
Alternatively, if you retain the measures, these should be identified
as non-GAAP
measures and you should provide all of the information that is
prescribed by Item 10(e) of
Regulation S-K. For example, you would need to choose a different
label for your non-
GAAP measure and provide a reconciliation from the most comparable
GAAP-based
measure, which we would view as gross margin in accordance with GAAP.
Please submit the revisions that you propose to either correct your
computations of these
measures or to follow the guidance applicable to non-GAAP measures.
Results of Operations, page 47
6. We note that you provide a tabulation of percentage changes in all of
the line items
reported in your Statements of Operations, including separate lines
for product and service
revenues, and product and service cost of sales, although none of the
percentages appear
to be referenced in your discussion and analysis.
Further, it appears that your discussion and analysis is focused on
alternate compositions
of revenues and cost of revenues which do not directly correlate with
the line items
reported in your tabulation of percentages or your Statements of
Operations; and it
appears that you have attributed some changes to multiple factors,
including offsetting
factors, without quantification of the amounts.
Given these observations along with those pertaining to your
disaggregation of revenues,
we believe that you will need to revise your disclosures to include
quantitative and
qualitative details of the various revenue components and material
changes in these and
other cost components to comply with Item 303(b) and (b)(2) of
Regulation S-K.
Robert Vreeland
FirstName LastNameRobert
Clean Energy Fuels Corp. Vreeland
Comapany
August NameClean Energy Fuels Corp.
8, 2022
August
Page 4 8, 2022 Page 4
FirstName LastName
Please address the economics associated with the mix and changes in
the mix of RNG,
CNG, and LNG purchases and sales, to include relevant volumetric
quantifications, and
explain how volumes of RNG underlying the RIN, LCFS, and AFTC credit
revenues
compare to one another and the volumes reported on page 37.
For example, this may involve quantifying the credits on a per unit
basis, identifying
material changes from period-to-period, and indicating the extent to
which you had
generated credits in one period that were not monetized until a
subsequent period.
Please also expand your disclosure on page 68 to describe the general
process and
timeframe involved in your generation and conveyance of the credits.
7. We note your disclosures of an effective price per gallon and
effective cost per gallon on
pages 48 and 49, which you indicate are based on total GGEs delivered
less GGEs
delivered by non-consolidated entities.
You also indicate that your figures include revenues and costs
associated with services
and exclude the effects of the Amazon warrant and your accounting for
other derivatives,
both of which appear to have resulted in an offset to revenues during
2021.
Please clarify whether the delivery volumes reported on page 37
include the GGEs
delivered by non-consolidated entities, as referenced in your
discussion of effective prices
and costs, and if this is the case quantify these volumes and explain
your rationale in
presenting quantities unrelated to the consolidated group. Otherwise,
please clarify your
intent in making this distinction in your description of the measures.
Please also provide disclosure under Properties on page 31 to provide
information about
capacity and utilization of your distribution network. For example,
please indicate the
extent to which your distribution network is being utilized by
non-consolidated entities
and describe the arrangements that are governing those relationships.
Given that your per gallon measures reflect economic activity that you
ascribe to services,
and exclude elements that you report as offsets to revenue to comply
with GAAP, it
appears that you should identify your per gallon measures as non-GAAP
measures and
provide the disclosures required by Item 10(e) of Regulation S-K.
Financial Statements
Note 2 - Revenue from Contracts with Customers, page 73
8. We note that you have a "Volume-related" category in your tabulation
of disaggregated
revenues, which you describe as sales of RNG, CNG, LNG, O&M services,
RIN Credits,
LCFS Credits, and activity associated with certain warrants and other
derivatives, which
collectively appear to represent about 85% of total revenues for 2021.
Given the mix of revenue sources in the measure, along with various
disclosures provided
elsewhere in your filing, it is unclear why each component would not
have been separately
Robert Vreeland
FirstName LastNameRobert
Clean Energy Fuels Corp. Vreeland
Comapany
August NameClean Energy Fuels Corp.
8, 2022
August
Page 5 8, 2022 Page 5
FirstName LastName
reported pursuant to FASB ASC 606-10-50-5, and 55-89 through 55-91, in
order to
accurately depict how the nature, amount, timing, and uncertainty of
revenue and cash
flows are affected by economic factors.
Tell us how you have considered the disclosures referenced in each of
the following
points in your application of the aforementioned guidance. It should
be clear how you
have considered the emphasis placed on the various components and
differences in the
economic and risk profiles in determining that no further
disaggregation would be
required, if this is your view. Alternatively, if you find that
further disaggregation would
be appropriate after considering these observations, please submit the
revisions that you
propose to further disaggregate the Volume-related category.
There is a distinction made between product and service
revenues in your Statements
of Operations on page 60, and your analyses of those details on
page 48.
You state that operating results and resource allocation
decisions for components of
the business "...are based on gross margins and volumes delivered
by market sector
and volume type" in your disclosure on page 106.
In your earnings release for the recently completed fiscal
quarter, you attribute the
increase in revenues to "...continued growth in Amazon and in our
airports, refuse
and public transit customer markets" as well as increased sales
of RNG.
You state that in evaluating operating performance on page 36,
"we focus primarily
on: (1) the amount of RNG, CNG and LNG GGEs delivered...." and
you report the
corresponding volumes on page 37.
You state that "markets for Environmental Credits have been
volatile and
unpredictable in recent periods" in your disclosure on page 19.
In describing risks related to supply on page 18, you state
that projects for the
production of RNG "often experience unpredictable production
levels or other
difficulties due to a variety of factors."
You have disclosure on page 21, stating that ADG projects
"typically face a long and
variable development cycle."
The disclosure on page 21 also include contrast between ADG and
LFG as sources
for RNG, stating that "Livestock waste and dairy farm projects
have different
economic models and risk profiles than landfill facilities."
Note 13 - Stockholders' Equity, page 90
9. We understand from your disclosures on pages 97 and 98 that you booked
an $83.6
million charge as a stock-based sales incentive related to the Amazon
Warrant as an offset
Robert Vreeland
Clean Energy Fuels Corp.
August 8, 2022
Page 6
to revenue during 2021, including $76.6 million for "Warrant Shares"
and "Additional
Warrant Shares that vested right away, and $ 7.0 million associated
with fuel purchases.
Given your disclosure on page 107, indicating that no customer
accounted for more than
10% of your revenues, and considering that the charge appears to have
represented about
28% of revenues before considering the offset, please clarify how the
charge compares to
the revenue recognized from Amazon during the period, and how you
determined that
the charge would appropriately correspond as an offset to that
revenue.
Tell us how you applied the guidance in FASB ASC 606-10-32-1 through
32-45, in
determining the transaction price and in allocating it to the
performance obligations.
Please also identify the relevant exhibit and the particular sections
of the sales agreement
that you believe correspond to the performance obligations and explain
how you assessed
performance relative to those obligations in accounting for the
warrants.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759
or Karl
Hiller, Branch Chief, at (202) 551-3686 if you have any questions.
FirstName LastNameRobert Vreeland Sincerely,
Comapany NameClean Energy Fuels Corp.
Division of
Corporation Finance
August 8, 2022 Page 6 Office of Energy
& Transportation
FirstName LastName