Market Overview

Clean Energy Reports 89.4 Million Gallons Delivered and Revenue of $70.5 Million for Second Quarter of 2018

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Clean Energy Fuels Corp. (NASDAQ:CLNE) ("Clean Energy" or the
"Company") today announced its operating results for the quarter and six
months ended June 30, 2018.

The Company delivered 89.4 million gallons in the second quarter of
2018, a 1.1% increase from 88.4 million for the second quarter of 2017.
For the six months ended June 30, 2018, the Company delivered 174.5
million gallons, a 0.6% increase from 173.5 million delivered in the
same period in 2017. Growth in CNG volumes was offset principally by a
reduction in LNG volumes due to the non-renewal of two contracts and a
decrease in RNG volumes for non-vehicle fuel that were included in
contracts sold to BP, as noted below.

Revenue for the second quarter of 2018 was $70.5 million, a 13.0%
decrease from $81.0 million of revenue for the second quarter of 2017.
The decrease was primarily attributable to anticipated lower station
construction revenue and the absence of revenue in the 2018 period from
the Company's former compressor business ("CEC") which was combined with
Landi Renzo's compressor business, SAFE, in the fourth quarter of 2017.
Such business is no longer consolidated in the Company's financial
results but rather is reported as an equity method investment.

Revenue for the six months ended June 30, 2018 was $172.9 million, a
1.4% increase from $170.5 million of revenue for the same period in
2017. This increase was primarily due to a $26.9 million increase in
revenue from the U.S. federal excise tax credits for alternative fuels
("AFTC"), partially offset by decreases in revenue due to the factors
described above and a lower effective price per gallon, which was
largely attributable to the effects of the Company's sale of certain
assets related to the upstream production portion of its RNG business to
BP Products North America Inc. ("BP") at the end of the first quarter of
2017 (the "BP Transaction"). The BP Transaction has resulted in
decreased revenue from the sale of tradable credits the Company
generates by selling CNG, LNG and its Redeem™ RNG vehicle fuel. The
AFTC, which had previously expired on December 31, 2016, was reinstated
on February 9, 2018 to apply to vehicle fuel sales made from January 1,
2017 through December 31, 2017.

Andrew J. Littlefair, Clean Energy's President and Chief Executive
Officer, stated: "In the second quarter, we completed a transaction we
believe could be pivotal and transformative for our Company, and we also
achieved continued operating improvement. First and foremost, our
shareholders overwhelmingly approved the investment by an affiliate of
Total S.A., the French energy giant, to acquire 25% of Clean Energy.
Total is already proving to be a tremendous strategic partner for us and
we are looking forward to working with Total to accelerate use of
natural gas by heavy-duty trucks in the United States. Additionally, we
saw a 40% improvement in operating results, improved cash flows and cash
and investment levels that exceed our debt balances. We believe we are
at an optimal time for the Company and the natural gas vehicle fuel
industry, particularly with the increasing focus on the environmental
and economic benefits of renewable natural gas and conventional natural
gas, with the force of one of the world's largest energy companies."

On a GAAP basis, net loss for the second quarter of 2018 was $(12.0)
million, or $(0.07) per share, compared to net loss of $(17.8) million,
or $(0.12) per share, for the second quarter of 2017. The second quarter
of 2017 included a $0.8 million reduction to the gain from the BP
Transaction.

On a GAAP basis, net income for the six months ended June 30, 2018 was
$0.2 million, or $0.00 per share, compared to net income of $43.3
million, or $0.28 per share, for the same period in 2017. The six months
ended June 30, 2018 was positively impacted by AFTC revenue of $26.9
million. The six months ended June 30, 2017 was positively affected by
gains of $3.2 million and $69.9 million, respectively, from the
Company's repurchase of a portion of its outstanding debt at a discount
to the face amount and from the BP Transaction. The six months ended
June 30, 2017 was also positively impacted by higher tradable credits of
$6.6 million generated in the period prior to the BP Transaction.

Non-GAAP loss per share and Adjusted EBITDA for the second quarter of
2018 was $(0.06) and $7.4 million, respectively. Non-GAAP loss per share
and Adjusted EBITDA for the second quarter of 2017 was $(0.10) and $3.3
million, respectively, which included a $0.8 million reduction to the
gain from the BP Transaction.

Non-GAAP income per share and Adjusted EBITDA for the six months ended
June 30, 2018 was $0.03 and $39.8 million, respectively, which included
the AFTC revenue recognized in the period. Non-GAAP income per share and
Adjusted EBITDA for the six months ended June 30, 2017 was $0.31 and
$84.0 million, respectively, which included the gains from the debt
repurchase and the BP Transaction, and the higher tradable credits
generated prior to the BP Transaction.

Non-GAAP income (loss) per share and Adjusted EBITDA are described below
and reconciled to GAAP net income (loss) and income (loss) per share
attributable to Clean Energy Fuels Corp.

Non-GAAP Financial Measures

To supplement the Company's unaudited condensed consolidated financial
statements presented in accordance with accounting principles generally
accepted in the United States of America ("GAAP"), the Company uses
non-GAAP financial measures that it calls non-GAAP income (loss) per
share ("non-GAAP EPS" or "non-GAAP income (loss) per share") and
adjusted EBITDA ("Adjusted EBITDA"). Management presents non-GAAP EPS
and Adjusted EBITDA because it believes these measures provide
meaningful supplemental information regarding the Company's performance,
for the following reasons: (1) these measures allow for greater
transparency with respect to key metrics used by management, as
management uses these measures to assess the Company's operating
performance and for financial and operational decision-making; (2) these
measures exclude the impact of items that management believes are not
directly attributable to the Company's core operating performance and
may obscure trends in the business; and (3) these measures are used by
institutional investors and the analyst community to help analyze the
Company's business. In future quarters, the Company may make adjustments
for other expenditures, charges or gains in order to present non-GAAP
financial measures that the Company's management believes are indicative
of the Company's core operating performance.

Non-GAAP financial measures have limitations as an analytical tool and
should not be considered in isolation from, or as a substitute for, the
Company's GAAP results. The Company expects to continue reporting
non-GAAP financial measures, adjusting for the items described below
(and/or other items that may arise in the future as the Company's
management deems appropriate), and the Company expects to continue to
incur expenses, charges or gains similar to the non-GAAP adjustments
described below. Accordingly, unless expressly stated otherwise, the
exclusion of these and other similar items in the presentation of
non-GAAP financial measures should not be construed as an inference that
these costs are unusual, infrequent or non-recurring. Non-GAAP EPS and
Adjusted EBITDA are not recognized terms under GAAP and do not purport
to be an alternative to GAAP income (loss), GAAP income (loss) per share
or any other GAAP measure as an indicator of operating performance.
Moreover, because not all companies use identical measures and
calculations, the Company's presentation of non-GAAP EPS and Adjusted
EBITDA may not be comparable to other similarly titled measures used by
other companies.

Non-GAAP EPS

Non-GAAP EPS, which the Company presents as a non-GAAP measure of its
performance, is defined as net income (loss) attributable to Clean
Energy Fuels Corp., plus stock-based compensation expense, and plus
(minus) loss (income) from equity method investments, the total of which
is divided by the Company's weighted-average shares outstanding on a
diluted basis. The Company's management believes excluding non-cash
expenses related to stock-based compensation provides useful information
to investors regarding the Company's performance because of the varying
available valuation methodologies, the volatility of the expense (which
depends on market forces outside of management's control), the
subjectivity of the assumptions and the variety of award types that a
company can use, which may obscure trends in a company's core operating
performance. Similarly, as a result of combining CEC with SAFE in the
fourth quarter of 2017, the Company's management believes that excluding
the non-cash results from equity method investments is useful to
investors because the charges are not part of or representative of the
core operations of the Company.

The table below shows GAAP and non-GAAP EPS and also reconciles GAAP net
income (loss) attributable to Clean Energy Fuels Corp. to an adjusted
net income (loss) figure used in the calculation of non-GAAP EPS:

         
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except share and per-share amounts) 2017       2018 2017       2018
Net Income (Loss) Attributable to Clean Energy Fuels Corp. $ (17,808 ) $ (11,975 ) $ 43,251 $ 247
Stock-Based Compensation 2,778 1,208 4,688 3,106
Loss from Equity Method Investments   34     729     70   2,197
Adjusted (Non-GAAP) Net Income (Loss) $ (14,996 ) $ (10,038 ) $ 48,009 $ 5,550
Diluted Weighted-Average Common Shares Outstanding 150,586,423 162,613,316 152,415,149 161,682,245
GAAP Income (Loss) Per Share $ (0.12 ) $ (0.07 ) $ 0.28 $ 0.00
Non-GAAP Income (Loss) Per Share $ (0.10 ) $ (0.06 ) $ 0.31 $ 0.03
 

Adjusted EBITDA

Adjusted EBITDA, which the Company presents as a non-GAAP measure of its
performance, is defined as net income (loss) attributable to Clean
Energy Fuels Corp., plus (minus) income tax expense (benefit), plus
interest expense, minus interest income, plus depreciation and
amortization expense, plus stock-based compensation expense, and plus
(minus) loss (income) from equity method investments. The Company's
management believes Adjusted EBITDA provides useful information to
investors regarding the Company's performance for the same reasons
discussed above with respect to non-GAAP EPS. In addition, management
internally uses Adjusted EBITDA to determine elements of executive and
employee compensation.

The table below shows Adjusted EBITDA and also reconciles this figure to
GAAP net income (loss) attributable to Clean Energy Fuels Corp.:

           
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2017       2018 2017       2018
Net Income (Loss) Attributable to Clean Energy Fuels Corp. $ (17,808 ) $ (11,975 ) $ 43,251 $ 247
Income Tax Expense (Benefit) 124 89 (2,139 ) 177
Interest Expense 4,285 4,527 9,196 9,030
Interest Income (499 ) (489 ) (691 ) (1,064 )
Depreciation and Amortization 14,336 13,332 29,653 26,133
Stock-Based Compensation 2,778 1,208 4,688 3,106
Loss from Equity Method Investments   34     729     70     2,197  
Adjusted EBITDA $ 3,250 $ 7,421 $ 84,028 $ 39,826
 

Definition of "Gallons Delivered"

The Company defines "gallons delivered" as its gallons of renewable
natural gas ("RNG"), compressed natural gas ("CNG") and liquefied
natural gas ("LNG"), along with its gallons associated with providing
operations and maintenance services, in each case delivered to its
customers in the applicable period, plus the Company's proportionate
share of gallons delivered by joint ventures in the applicable period.

The table below shows gallons delivered for the three and six months
ended June 30, 2017 and 2018:

           
Three Months Ended Six Months Ended
June 30, June 30,
Gallons Delivered (in millions) 2017       2018 2017       2018
CNG 71.1 73.8 139.6 144.6
LNG 16.7 15.6 32.7 29.9
RNG (1) 0.6 1.2
Total 88.4 89.4 173.5 174.5
 

(1) Represents RNG sold as non-vehicle fuel. RNG sold as
vehicle fuel is sold under the brand name Redeem™, and is included in
this table in the CNG or LNG amounts as applicable based on the form in
which it was sold.

Sources of Revenue

The following table represents our sources of revenue for the three and
six months ended June 30, 2017 and 2018:

           
Three Months Ended Six Months Ended
June 30, June 30,
Revenue (in Millions) 2017       2018 2017       2018

Volume -Related (1)

$ 63.3 $ 62.6 $ 136.9 $ 130.0
Compressor Sales 5.2 11.7
Station Construction Sales 12.3 5.8 21.6 11.6
AFTC 1.4 26.9
Other   0.2   0.7   0.3   4.4
Total $ 81.0 $ 70.5 $ 170.5 $ 172.9
 

(1) Volume -related revenue primarily consists of sales of
RNG, CNG and LNG fuel, performance of operations and maintenance
services, and sales of certain tradable credits the Company generates by
selling RNG, CNG and LNG as vehicle fuel.

Today's Conference Call

The Company will host an investor conference call today at 4:30
p.m. Eastern time (1:30 p.m. Pacific). Investors interested in
participating in the live call can dial 1.877.407.4018 from the U.S. and
international callers can dial 1.201.689.8471. A telephone replay will
be available approximately two hours after the call concludes
through Friday, September 7, 2018, by dialing 1.844.512.2921 from the
U.S., or 1.412.317.6671 from international locations, and entering
Replay Pin Number 13681728. There also will be a simultaneous live
webcast available on the Investor Relations section of the Company's web
site at www.cleanenergyfuels.com,
which will be available for replay for 30 days.

About Clean Energy Fuels

Clean Energy Fuels Corp. is the leading provider of natural gas fuel for
transportation in North America. We build and operate CNG and LNG
vehicle fueling stations; manufacture CNG and LNG equipment and
technologies; and deliver more CNG and LNG vehicle fuel than any other
company in the United States. Clean Energy also sells Redeem™ RNG fuel
and believes it is the cleanest transportation fuel commercially
available, reducing greenhouse gas emissions by up to 70%. For more
information, visit www.cleanenergyfuels.com.

Safe Harbor Statement

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, including statements about, among
other things, the Company's expectations regarding its performance,
including continued improvement in its operating results; the state of
the natural gas vehicle fuel industry, including the level of focus on
the environmental and economic impact of natural gas as a vehicle fuel,
and the impact such focus could have on the Company and its performance;
the success of the Company's transactions and relationships with Total
S.A., including their impact on the Company's performance, financial
condition and ability to execute its strategic initiatives, and the
market's perception of these transactions and relationships; and the
Company's overall financial and strategic position.

Forward-looking statements are statements other than historical facts
and relate to future events or circumstances or the Company's future
performance, and they are based on the Company's current assumptions,
expectations and beliefs concerning future developments and their
potential effect on the Company and its business. As a result, actual
results, performance or achievements and the timing of events could
differ materially from those anticipated in or implied by these
forward-looking statements as a result of many factors including, among
others: future supply, demand, use and prices of crude oil, gasoline,
diesel, natural gas, other vehicle fuels, and heavy-duty trucks and
other vehicles and engines powered by these fuels, including overall
levels of and volatility in these factors; the willingness of fleets and
other consumers to adopt natural gas as a vehicle fuel, and the rate of
any such adoption; the Company's ability to execute its strategic
initiatives related to the market for natural gas heavy-duty trucks, one
of the Company's target customer markets, and the impact of these
initiatives on Company and its industry; the Company's ability to
capture a substantial share of the market for alternative vehicle fuels
and vehicle fuels generally and otherwise compete successfully in these
markets, including in the event of advances or improvements in or
perceived advantages of non-natural gas vehicle fuels or engines powered
by these fuels or other competitive developments and particularly in
light of increasing competition from new entrants in these markets,
expanded programs by existing competitors, or other factors; the
Company's ability to execute and realize the intended benefits of any
mergers, acquisitions, divestitures, investments or other strategic
measures, transactions or relationships, including, for example, the
investment by an affiliate of Total S.A. in the Company and the
Company's other proposed relationships with this entity; the Company's
ability to accurately predict natural gas vehicle fuel demand in the
geographic and customer markets in which it operates and effectively
calibrate its strategies, timing and levels of investments to be
consistent with this demand; the Company's ability to recognize the
anticipated benefits of its CNG and LNG station network; future
availability of capital, which may include equity or debt financing, as
needed to fund the growth of the Company's business, repayment of its
debt obligations (whether at or before their due dates) or other
expenditures; the availability of environmental, tax and other
government regulations, programs and incentives, such as AFTC, that
promote natural gas or other alternatives as a vehicle fuel, including
long-standing support for gasoline- and diesel-powered vehicles and
growing support for electric and hydrogen-powered vehicles that could
result in programs or incentives that favor of these vehicles or vehicle
fuels over natural gas; changes to federal, state or local greenhouse
gas emissions regulations or other environmental regulations applicable
to natural gas production, transportation or use; compliance with other
applicable government regulations; the Company's ability to manage and
grow its RNG business, in particular after the BP Transaction, including
its ability to continue to receive revenue from sales of certain
tradable credits the Company generates by selling conventional and
renewable natural gas as vehicle fuel; construction, permitting and
other factors that could cause delays or other problems at station
construction projects; and general political, regulatory, economic and
market conditions.

The forward-looking statements made in this press release speak only as
of the date of this press release and the Company undertakes no
obligation to update publicly such forward-looking statements to reflect
subsequent events or circumstances, except as otherwise required by law.
The Company's Quarterly Report on Form 10-Q, filed on August 7, 2018
with the Securities and Exchange Commission (www.sec.gov),
contains additional information on these and other risk factors that may
cause actual results to differ materially from the forward-looking
statements contained in this press release.

 
Clean Energy Fuels Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data, Unaudited)
 
      December 31,       June 30,
2017 2018
Assets
Current assets:
Cash, cash equivalents and restricted cash $ 37,208 $ 43,407
Short-term investments 141,462 211,216
Accounts receivable, net of allowance for doubtful accounts of
$1,276 and $1,391 as of December 31, 2017 and June 30, 2018,
respectively
63,961 67,824
Other receivables 19,235 16,827
Inventory 35,238 37,127
Prepaid expenses and other current assets   7,793     9,547  
Total current assets 304,897 385,948
Land, property and equipment, net 367,305 352,617
Notes receivable and other long-term assets, net 21,397 16,454
Investments in other entities 30,395 28,218
Goodwill 64,328 64,328
Intangible assets, net   3,590     2,844  
Total assets $ 791,912   $ 850,409  
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt and capital lease obligations $ 139,699 $ 115,780
Accounts payable 17,901 11,585
Accrued liabilities 42,268 43,602
Deferred revenue   3,432     10,044  
Total current liabilities 203,300 181,011
Long-term portion of debt and capital lease obligations 120,388 124,072
Other long-term liabilities   18,566     15,176  
Total liabilities 342,254 320,259
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 and
304,000,000 shares as of December 31, 2017 and June 30, 2018,
respectively; issued and outstanding 151,650,969 shares and
203,430,778 shares as of December 31, 2017 and June 30, 2018,
respectively
15 20
Additional paid-in capital 1,111,432 1,195,401
Accumulated deficit (683,570 ) (684,616 )
Accumulated other comprehensive loss   (887 )   (388 )
Total Clean Energy Fuels Corp. stockholders' equity 426,990 510,417
Noncontrolling interest in subsidiary   22,668     19,733  
Total stockholders' equity   449,658     530,150  
Total liabilities and stockholders' equity $ 791,912   $ 850,409  
 
 
Clean Energy Fuels Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data, Unaudited)
 
      Three Months Ended       Six Months Ended
June 30, June 30,
2017       2018 2017       2018
Revenue:
Product revenue $ 67,849 $ 61,120 $ 144,078 $ 153,371
Service revenue   13,167     9,347     26,429     19,499  
Total revenue 81,016 70,467 170,507 172,870
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown
separately below):
Product cost of sales 50,825 41,396 105,422 91,595
Service cost of sales 6,519 4,255 12,783 8,852
Selling, general and administrative 23,304 19,868 47,077 38,705
Depreciation and amortization 14,336 13,332 29,653 26,133
Total operating expenses   94,984     78,851     194,935     165,285  
Operating income (loss) (13,968 ) (8,384 ) (24,428 ) 7,585
Interest expense (4,285 ) (4,527 ) (9,196 ) (9,030 )
Interest income 499 489 691 1,064
Other income (expense), net 135 79 (32 ) 67
Loss from equity method investments (34 ) (729 ) (70 ) (2,197 )
Gain from extinguishment of debt 3,195
Gain (loss) from sale of certain assets of subsidiary   (762 )       69,886      
Income (loss) before income taxes (18,415 ) (13,072 ) 40,046 (2,511 )
Income tax benefit (expense)   (124 )   (89 )   2,139     (177 )
Net income (loss) (18,539 ) (13,161 ) 42,185 (2,688 )
Loss attributable to noncontrolling interest   731     1,186     1,066     2,935  
Net income (loss) attributable to Clean Energy Fuels Corp. $ (17,808 ) $ (11,975 ) $ 43,251   $ 247  
Income (loss) per share:
Basic $ (0.12 ) $ (0.07 ) $ 0.29   $ 0.00  
Diluted $ (0.12 ) $ (0.07 ) $ 0.28   $ 0.00  
Weighted-average common shares outstanding:
Basic   150,586,423     162,613,316     149,721,767     157,432,786  
Diluted   150,586,423     162,613,316     152,415,149     161,682,245  
 

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