Investments in Other Entities and Noncontrolling Interest in a Subsidiary

12 Months Ended

Dec. 31, 2021

Investments, All Other Investments [Abstract]

Investments in Other Entities and Noncontrolling Interest in a Subsidiary

Note 4 —Investments in Other Entities and Noncontrolling Interest in a Subsidiary

TotalEnergies Joint Venture

On March 3, 2021, the Company entered an agreement (“TotalEnergies JV Agreement”) with TotalEnergies S.E. (“TotalEnergies”) that created a 50/50 joint venture (“TotalEnergies JV”) to develop ADG RNG production facilities in the United States. Each ADG RNG production facility project under the TotalEnergies JV will be formed as a separate limited liability company (“LLC”) that is owned 50/50 by the Company and TotalEnergies, and contributions to such LLCs count toward the TotalEnergies JV Equity Obligations (as defined below). The TotalEnergies JV Agreement contemplates that the TotalEnergies JV will invest up to $400.0 million of equity in production projects, and TotalEnergies and the Company each committed to initially provide $50.0 million for the TotalEnergies JV (the “TotalEnergies JV Equity Obligations”). To fund the Company’s TotalEnergies JV Equity Obligations, the Company had the option to borrow $20.0 million from Société Générale, a company incorporated as a société anonyme under the laws of France (“SG”), pursuant to the Credit Agreement (defined in Note 12). On October 12, 2021, TotalEnergies and the Company executed a LLC agreement (the “DR Development Agreement”) for an ADG RNG production facility project (the “DR JV”). Under the DR Development Agreement, TotalEnergies and the Company have each committed to contribute $7.0 million to the DR JV. On November 1, 2021, TotalEnergies and the Company have each contributed an initial $4.8 million to the DR JV. Assets related to the DR JV were deconsolidated from the Company as of October 12, 2021. No gain or loss was recognized from the transaction. The Company accounts for its interest in the LLCs using the equity method of accounting because the Company does not control but has the ability to exercise significant influence over the LLCs’ operations. The Company recorded a loss of $0.1 million from the TotalEnergies JV for the year ended December 31, 2021, related to formation expenses. As of December 31, 2021, the Company had an investment balance in the TotalEnergies JV of $4.7 million.

The following table presents combined summarized financial information for the TotalEnergies JV (in thousands):

	Year Ended
	December 31,
	2021
Revenue	$	—
Gross profit	$	—
Operating loss	$	(119)
Net loss	$	(119)

	As of December 31,
	2021
Current assets	$	3,086
Non-current assets		13,103
Total assets	$	16,189
Current liabilities	$	6,770
Non-current liabilities		—
Total liabilities	$	6,770

bp Joint Venture

On April 13, 2021, the Company entered an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture (“bpJV”) to develop, own and operate new ADG RNG production facilities in the United States. Pursuant to the bp JV Agreement, bp and the Company committed to provide $50.0 million and $30.0 million, respectively, with bp and the Company each receiving 30.0 million of Class A Units in the bpJV and bp also receiving 20.0 million of Class B Units in the bpJV. bp’s initial $50.0 million contribution was made on April 13, 2021 and consisted of all unpaid principal outstanding under the loan agreement dated December 18, 2020, pursuant to which bp advanced $50.0 million to the Company to fund capital costs and expenses incurred prior to formation of the bpJV, including capital costs and expenses for permitting, engineering, equipment, leases and feed stock rights. 100% of the RNG produced from the projects developed and owned by the bpJV will be provided to the vehicle fuels market pursuant to the Company’s marketing agreement with bp.

Pursuant to the bp JV Agreement, the Company had the option, exercisable prior to August 31, 2021 (the “bp Option”), to commit an additional $20.0 million to the bpJV upon which bp’s Class B Units would convert into Class A Units. On June 21, 2021, the Company contributed $50.2 million to the bpJV, which consisted of (i) its initial contribution commitment of $30.0 million, (ii) the $20.0 million additional contribution to effect the conversion of bp’s Class B Units into Class A Units pursuant to the Company’s exercise of the bp Option, and (iii) $0.2 million for interest on bp’s Class B Units to acquire additional Class A Units. In December 2021, the bpJV authorized a capital call (the “bpJV Capital Call”) for additional funding of $143.2 million, requiring bp and the Company each to contribute $71.6 million. As of December 31, 2021, bp and the Company have contributed $71.6 million and $20.0 million, respectively, to the bpJV in connection with the bpJV Capital Call. The remaining contribution balance of $51.6 million due from the Company will be paid on or prior to June 30, 2022. As of December 31, 2021, the Company and bp each own 50% of the bp JV.

The Company accounts for its interest in the bpJV using the equity method of accounting because the Company does not control but has the ability to exercise significant influence over the bpJV’s operations. The Company recorded a loss of $0.4 million from this investment for the year ended December 31, 2021, related to formation expenses. The Company had an investment balance in the bpJV of $69.8 million as of December 31, 2021.

Combined summarized financial information for the bpJV is as follows (in thousands):

	Year Ended
	December 31,
	2021
Revenue	$	—
Gross profit	$	—
Operating loss	$	(678)
Net loss	$	(603)
Net loss attributable to bpJV	$	(599)
	As of December 31,
	2021
Current assets	$	152,072
Non-current assets		70,433
Total assets	$	222,505
Current liabilities	$	24,932
Non-current liabilities		1,000
Total liabilities	$	25,932
Equity attributable to shareowners of bpJV	$	191,170
Equity attributable to noncontrolling interest		5,403
Total equity	$	196,573

SAFE&CEC S.r.l.

On December 29, 2017, the Company obtained a 49% ownership interest in SAFE&CEC S.r.l. See Note 3 for more information.

Summarized financial information for SAFE&CEC S.r.l. is as follows (in thousands):

	Year Ended December 31,
	2019		2020		2021
Revenue	$	80,886	$	89,535	$	109,119
Gross profit	$	20,525	$	19,008	$	25,784
Operating income	$	1,207	$	609	$	4,728
Net income (loss)	$	93	$	(306)	$	2,392
			As of December 31,
			2020		2021
Current assets			$	60,406	$	75,137
Non-current assets				58,140		56,052
Total assets			$	118,546	$	131,189
Current liabilities			$	55,780	$	58,910
Non-current liabilities				11,808		21,730
Total liabilities			$	67,588	$	80,640

Other Equity Method Investments

The Company had an investment balance in other equity method investments of $2.3 million and $3.5 million as of December 31, 2020 and 2021, respectively. The Company recorded income (loss) from other equity method investments of $(0.1) million, $0.1 million, and $(0.6) million for the years ended December 31, 2019, 2020 and 2021, respectively. The Company accounts for its interest using the equity method of accounting because the Company does not control but has the ability to exercise significant influence over the investees’ operations.

Combined summarized financial information for the Company’s other equity method investments is as follows (in thousands):

	Year Ended December 31,
	2019		2020		2021
Revenue	$	546	$	463	$	704
Gross profit	$	178	$	155	$	216
Operating loss	$	(214)	$	(90)	$	(1,757)
Net loss	$	(250)	$	(126)	$	(1,793)

	As of December 31,
	2020		2021
Current assets	$	1,233	$	1,349
Non-current assets		5,553		7,047
Total assets	$	6,786	$	8,396
Current liabilities	$	1,421	$	1,012
Non-current liabilities		66		192
Total liabilities	$	1,487	$	1,204

NG Advantage

On October 14, 2014, the Company entered into a Common Unit Purchase Agreement (“UPA”) with NG Advantage for a 53.3% controlling interest in NG Advantage. NG Advantage is engaged in the business of transporting CNG in high-capacity trailers to industrial and institutional energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines.

In connection with the arrangement between NG Advantage and bp for the supply, sale and reservation of a specified volume of CNG transportation capacity until February 2022, on February 28, 2018, the Company entered into a guaranty agreement with NG Advantage and bp pursuant to which the Company guarantees NG Advantage’s payment obligations to bp in the event of default by NG Advantage under the supply arrangement, in an amount up to an aggregate of $30.0 million plus related fees which was reduced to $15.0 million effective June 24, 2020. As initial consideration for the guaranty agreement, NG Advantage issued to the Company 19,660 common units, which increased the Company’s controlling interest in NG Advantage from 53.3% to 53.5%.

On October 1, 2018, the Company purchased 1,000,001 common units from NG Advantage for an aggregate cash purchase price of $5.0 million. This purchase increased Clean Energy’s controlling interest in NG Advantage from 53.5% to 61.7%.

In each month from November 2018 through February 2019, the Company was issued 100,000 additional common units of NG Advantage, for a total of 400,000 common units, pursuant to the guaranty agreement entered in February 2018. The issuance of 400,000 additional common units increased the Company’s controlling interest in NG Advantage to 64.6%.

During the year ended December 31, 2019, the Company agreed to lend NG Advantage up to $26.7 million under a series of promissory notes that were incorporated into a delayed draw convertible promissory note (the “November 2019 Convertible Note”). In connection with the promissory notes between NG Advantage and the Company, NG Advantage issued to the Company warrants to purchase 2,086,879 common units. On February 6, 2020, the Company converted the outstanding principal and accrued interest under the November 2019 Convertible Note into common units of NG Advantage, resulting in an increase in the Company’s controlling interest in NG Advantage from 64.6% to 93.2%.

On February 29, 2020, NG Advantage issued to the Company 283,019 common units of NG Advantage pursuant to the guaranty agreement entered in February 2018, which increased the Company’s controlling interest in NG Advantage to 93.3% as of December 31, 2020.

During the year ended December 31, 2021, NG Advantage borrowed $5.0 million from the Company under a series of advance agreements. As of December 31, 2021, NG advantage had an outstanding balance of $18.4 million, plus accrued and unpaid interest under the advance agreements. This intercompany transaction has been eliminated in consolidation.

The Company recorded a loss attributable to the noncontrolling interest in NG Advantage of $7.2 million, $1.7 million, and $1.0 million for the years ended December 31, 2019, 2020 and 2021, respectively. The noncontrolling interest was $9.3 million and $8.3 million as of December 31, 2020 and 2021, respectively.

Investments in Equity Securities

For investments in equity securities of privately held entities without readily determinable fair values, the Company measures such investments at cost, adjusted for impairment, if any, and observable price changes in orderly transactions for the identical or similar investment of the same issuer. As of December 31, 2021, the Company had investment balance recorded at cost of $8.0 million. The Company did not recognize any adjustments to the recorded cost basis during the year ended December 31, 2021.