Q4 2024 Clean Energy Fuels Corp Earnings Call

February 24, 2025

Sure in a listen only mode.

Later, you will have the opportunity to ask questions. During the question and answer session.

Please note today's call will be recorded and I will be standing by should you need any assistance.

Speaker Change: It is now my pleasure to turn the conference over to Chief Financial Officer, Robert Freeland. Please go ahead.

Robert Freeland: Thank you operator.

Robert Freeland: Earlier this afternoon clean energy released financial results for the fourth quarter and year ending December 31.

Robert Freeland: 2024, if you did not receive the release it is available on the Investor Relations section of the company's website at Www Dot clean energy fuels Dot com, where the call is also being webcast there will be a replay available on the website for 30 days.

Robert Freeland: We begin we'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements that involve risks uncertainties and assumptions that are difficult to predict.

At this time all participants are in a listen only mode.

Robert Freeland: Such forward looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements.

Later, you will have the opportunity to questions during the question and answer session.

Robert Freeland: Several factors that could cause or contribute to such differences are described in detail in the risk factors section of the clean Energy's Form 10-K that we're filing today.

Please note today's call will be recorded and I will be standing by should you need any assistance.

Speaker Change: It is now my pleasure to turn the conference over to Chief Financial Officer, Robert Vreeland. Please go ahead.

Robert Freeland: These forward looking statements speak only as the date of this release the company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances. After the date of this release.

Robert Vreeland: Thank you operator.

Robert Vreeland: Earlier this afternoon clean energy released financial results for the fourth quarter and year ending December 31st.

Robert Freeland: The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results.

Robert Vreeland: 2024, if you did not receive the release it is available on the Investor Relations section of the company's website at Www Dot clean energy fuels Dot com for the call is also being webcast there will be a replay available on the website for 30 days.

Robert Freeland: non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information reasons why management uses non-GAAP information.

Robert Vreeland: We begin we'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements that involve risks uncertainties and assumptions that are difficult to predict.

Robert Freeland: Definition of non-GAAP, EPS, and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on form 8-K today.

Robert Vreeland: Such forward looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements.

Robert Vreeland: Several factors that could cause or contribute to such differences are described in detail in the risk factors section of the <unk>.

Speaker Change: With that I will turn the call over to our President and Chief Executive Officer, Andrew Little Fair. Thank you Bob I am pleased to report that we closed the fourth quarter and the year with strong results in the fourth quarter, we sold 62 million gallons of renewable natural gas, a 9% increase from a year ago and generated 109.

Robert Vreeland: Clean Energy's Form 10-K, but we are filing today.

Robert Vreeland: Okay.

Robert Vreeland: These forward looking statements speak only as the date of this release the company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances. After the date of this release.

Robert Freeland: And in revenue and $24 million of adjusted EBITDA.

Robert Vreeland: The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results non.

Robert Freeland: For the full year 2024, we sold 237 million gallons of RMG, an increase of almost 5% over 2023.

Robert Vreeland: non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information reasons why management uses non-GAAP information.

Robert Freeland: And we reported $77 million of adjusted EBITDA.

Robert Freeland: 2024 marked a decade since the first full year of R&D sales after clean energy first introduced RMG as a transportation fuel when we sold 20 million gallons in 2014.

Robert Vreeland: Condition of non-GAAP, EPS, and adjusted EBITDA and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on form 8-K today.

Robert Freeland: With the entire R&D industry have come a long way in the commercialization of this clean affordable and readily available fuel for the large vehicle market.

Robert Freeland: Amidst a volatile political and regulatory backdrop, our business has continued to perform well this.

Speaker Change: With that I will turn the call over to our President and Chief Executive Officer, Andrew Little Fair. Thank you Bob I'm pleased to report that we closed the fourth quarter and the year with strong results in the fourth quarter, we sold 62 million gallons of renewable natural gas, a 9% increase from a year ago and generated 109 million.

Robert Freeland: This performance is anchored by our consistent recurring revenue fuel distribution business.

Robert Freeland: Our network of over 600 stations, we supply reliable affordable clean fuel or services to our customers.

Speaker Change: Dollars in revenue and 24 million of adjusted EBITDA.

Robert Freeland: Downstream RMG fueling business performed very well in 2024 brand almost $89 million of EBITDA and this was before one truck equipped with the new X 15 hit the road.

Speaker Change: For the full year 2024, we sold 237 million gallons of RMG, an increase of almost 5% over 2023.

Speaker Change: And we reported $77 million of adjusted EBITDA.

Robert Freeland: I would note that the new administrations focus on a domestically produced and diversified energy supply R&D checks all the boxes by being a bio fuel made from capturing harmful waste emissions and converting them into a.

Speaker Change: 2024 marked a decade since the first full year of R&D sales after clean energy first introduced RMG as a transportation fuel when we sold 20 million gallons in 2014.

Speaker Change: With the entire R&D industry has come a long way in the commercialization of this clean affordable and readily available fuel for the large vehicle market.

Robert Freeland: Productive transportation fuel.

Robert Freeland: And R&D just makes common sense, which is what the administration is looking for as they move forward with all of their policy initiatives.

Speaker Change: Amidst a volatile political and regulatory backdrop, our business has continued to perform well. This performance is anchored by our consistent recurring revenue fuel distribution business.

Robert Freeland: Rural areas are benefiting from the investment of hundreds of millions of dollars of new R&D projects dairy farms and landfills across the country and all of US are benefiting from cleaner air and fewer emissions coming from buses shuttles.

Speaker Change: Through our network of over 600 stations, we supply reliable affordable clean fuel or services to our customers.

Robert Freeland: Trucks operating on R&D.

Robert Freeland: On our last call I told you about our customer large transit agency in long Island, New York Nice bus and how we converted their existing fleet of buses from traditional and compressed natural gas or CMG to R&D, allowing them to benefit from a significant reduction in the greenhouse gas emissions.

Speaker Change: Our downstream R&D appealing business performed very well in 2024, bran almost $89 million of EBITDA and this was before one truck equipped with the new X 15 hit the road.

Speaker Change: I would note that the new administrations focus on a domestically produced and diversified energy supply R&D checks all the boxes by being a bio fuel made from capturing harmful waste emissions and converting them into a productive transportation fuel.

Robert Freeland: That trend of our transit agency customers converting to a lower emissions fuel continued over the last quarter.

Robert Freeland: The city buses in Fort worth El Paso, and Laredo, Texas and.

Robert Freeland: Grand Rapids, Michigan, which previously operated on CMG are now operating on R&D.

Speaker Change: And R&D just makes common sense, which is what the administration is looking for as they move forward with all their policy initiatives.

Robert Freeland: Experience and deep customer relationships are important in this business.

Robert Freeland: Operators of large fleets that move passengers are goods must have confidence in their fueling capability for those buses and trucks.

Speaker Change: We're all areas are benefiting from the investment of hundreds of millions of dollars of new R&D projects with dairy farms and landfills across the country and all of US are benefiting from cleaner air and fewer emissions coming from buses shuttles and trucks operating and R&D.

Robert Freeland: They wanted to be able to operate with the lowest emissions fuel that makes economic sense.

Speaker Change: Clean energy prides itself on the support we provide customers, whether it's converting them to lower emission fuels or when they want to test a different field like hydrogen.

Speaker Change: On our last call I told you about our customer large transit agency in long Island, New York Nice bus and how we converted their existing fleet of buses from traditional compressed natural gas or CMG to R&D, allowing them to benefit from a significant reduction in the greenhouse gas emissions.

Speaker Change: We have now won contracts to build hydrogen stations for three different transit agencies that have decided to test.

Speaker Change: Fuel cell buses.

Speaker Change: We're seeing this type of confidence in us and the heavy duty trucking space.

Speaker Change: That trend of our transit agency customers converting to a lower emissions fuel continued over the last quarter.

Speaker Change: As you've heard me say before adoption of our R&D by heavy duty trucking sector using the Cummins <unk> engine is our most exciting growth opportunity.

Speaker Change: The city buses in Fort worth El Paso, and Laredo, Texas.

Speaker Change: In Grand Rapids, Michigan, which previously operated on CMG are now operating on R&D.

Speaker Change: Might have heard come and CEO, Jennifer Rumsey make a bullish statement about the <unk> on their recent earnings call, but I want to remind you that the early adoption of the <unk> 15, and in 2025 will be with a lot of singles versus home runs right out of the gate.

Speaker Change: Experience and deep customer relationships are important in this business.

Speaker Change: Operators of large fleets that move passengers are goods must have confidence in their fueling capability for those buses and trucks.

Speaker Change: Those coming to bat with some of the first orders of trucks equipped with the new engine or a combination of existing natural gas truck operators as well as new fleets to natural gas fueling.

Speaker Change: They wanted to be able to operate with the lowest emissions fuel that makes economic sense.

Speaker Change: Clean energy prides itself on the support we provide customers, whether it's converting them to lower emission fuels for when they want to test a different feel like hydrogen.

Speaker Change: Some of these are leading names in the business.

Speaker Change: Continue to hear positive feedback from the fleets that have been testing the <unk>.

Speaker Change: We have now won contracts to build hydrogen stations for three different transit agencies that have decided to test.

Speaker Change: And now some are beginning to purchase them for example, our longtime customer food Express, which tested trunk last year equipped with a beta engine has now begun to order trucks equipped with a full production <unk>.

Speaker Change: Fuel cell buses.

We're seeing this type of confidence in us and the heavy duty trucking space.

Speaker Change: As you've heard me say before adoption of our R&D by heavy duty trucking sector using the Cummins <unk> engine is our most exciting growth opportunity.

Speaker Change: The world's largest construction materials company <unk> has placed an order for trucks equipped with the <unk> NAND that will initially fuel in our existing southern California network.

Speaker Change: Might've heard helman CEO, Jennifer Rumsey make a bullish statement about the X 15 and on their recent earnings call, but I want to remind you that the early adoption of the <unk> 15, and in 2025 will be with a lot of singles versus home runs right out of the gate.

Speaker Change: Before their designated station is built.

Speaker Change: <unk> one of Canada's largest trucking companies has begun to deploy their first trucks with the <unk>.

Speaker Change: And.

Speaker Change: And Fedex will soon be receiving trucks with the <unk> and that will fuel at a station in Oklahoma City operated by clean energy since we build it almost 10 years ago.

Speaker Change: Many carriers have expressed a desire to move forward with ordering trucks with the <unk> 15, and once Freightliner rolls out there offering later this year.

Speaker Change: Some of these are leading names in the business.

Speaker Change: The wider the breath of the adoption of <unk> 15, and the better for the market.

Speaker Change: Can you to hear positive feedback from the fleets that have been testing the extra 15.

Speaker Change: And now some are beginning to purchase them for example, our longtime customer food Express, which tested a truck last year equipped with the beta engine has now begun to order trucks equipped with a full production <unk>.

Speaker Change: And certainly we have the fueling infrastructure to accommodate many truck operations across the U S and Canada.

Speaker Change: In recent years as trucking companies and their shipper customers have evaluated cleaner alternatives to diesel.

Speaker Change: The world's largest construction materials company C. Max has placed an order for trucks equipped with the <unk> NAND that will initially fuel in our existing southern California network.

Speaker Change: A decision, making process has been impacted by policy volatility and uncertainty.

Speaker Change: The previous administrations myopic focus on battery electric vehicles force fleets to consider a technology.

Speaker Change: Before their designated station has built Marlin, one of Canada's largest trucking companies has begun to deploy their first trucks with the <unk>.

Speaker Change: That is not ready for most heavy duty trucking applications.

In most cases fleets found insurmountable challenges with battery electric and its infrastructure and continue to operate on diesel.

Speaker Change: And.

Speaker Change: And Fedex will soon be receiving trucks with the <unk> and that will fuel at a station in Oklahoma City operated by clean energy since we built it almost 10 years ago.

Speaker Change: And to make matters worse, California pushed its advanced clean trucks and advanced clean fleet rules that mandated the manufacturing and purchasing of zero emission vehicles.

Speaker Change: Many carriers have expressed a desire to move forward with ordering trucks with the X 15, and once Freightliner rolls out there offering later this year.

Speaker Change: The result.

Speaker Change: Confusion uncertainty and inaction.

Speaker Change: As of last summer heavy duty truck sales in California were down 50% compared to 2023.

Speaker Change: The wider the breath of the adoption of <unk> 15 in the better for the market.

Speaker Change: And certainly we have the fueling infrastructure to accommodate many truck operations across the U S and Canada.

Speaker Change: This means older higher emission trucks standing on the road longer.

Speaker Change: That is not progress.

Speaker Change: And recently, California reversed its advanced clean fleet mandate.

Speaker Change: In recent years as trucking companies and their shipper customers have evaluated cleaner alternatives to diesel.

Speaker Change: But theres still needs to be some more clarifying steps to be taken.

Speaker Change: Our decision, making process has been impacted by policy volatility and uncertainty.

Speaker Change: Carriers and shippers alike have goals to continue to reduce emissions no matter. What administration is in place and that has not and will not change.

Speaker Change: The previous administrations myopic focus on battery electric vehicles force fleets to consider a technology.

The examples of fleets that are moving forward with the RMG solution. I. Just mentioned are signs that low emission objectives can be balanced with the practical realities of commerce and available technology.

Speaker Change: It is not ready for most heavy duty trucking applications in.

In most cases fleets found instrumental challenges with battery electric and its infrastructure and continue to operate on diesel.

Speaker Change: We are optimistic that the federal state policies going forward and will support more of a technology neutral path to lower transportation sector emissions R&D is very well positioned to provide this commonsense solution to fleets and with the right engine and an ultra clean fuel available at a nationwide infrastructure, we believe that.

Speaker Change: And to make matters worse, California pushed its advanced clean trucks and advanced clean fleet rules that mandated the manufacturing and purchasing of zero emission vehicles.

Speaker Change: The result.

Speaker Change: Confusion uncertainty and inaction.

Speaker Change: As of last summer heavy duty truck sales in California were down 50% compared to 2023.

Speaker Change: All the pieces are finally falling into place for significant adoption.

Speaker Change: This means older higher emission trucks standing on the road longer.

Speaker Change: The alternative fuel tax credit has been an important.

Speaker Change: That is not progress.

Speaker Change: For the natural gas transportation sector since the credit began in 2005.

Speaker Change: And recently, California reversed its advanced clean fleet mandate.

Speaker Change: But theres still needs to be some more clarifying steps to be taken.

Speaker Change: This helps support adoption of cleaner natural gas vehicles in fueling infrastructure as a replacement for diesel.

Speaker Change: Carriers and shippers alike have goals to continue to reduce emissions no matter. What administration is in place and that has not and will not change.

Speaker Change: Credit expired at the end of last year. However, it has been retroactively approved several times in the past, we along with our industry partners. We will continue to push for this important credit it offers key support to our customers and industry.

Speaker Change: The examples of fleets that are moving forward with the RMG solution. I. Just mentioned are signs that low emission objectives can be balanced with the practical realities of commerce and available technology.

Speaker Change: I will touch on this more later, but we did not include any FTC revenue in our 2025 outlook because it is currently not in effect.

Speaker Change: We are optimistic that the federal state policies going forward will support more of a technology neutral path to lower transportation sector emissions R&D is very well positioned to provide this commonsense solution to fleets and with the right engine and an ultra clean fuel available at a nationwide infrastructure, we believe that.

Speaker Change: Turning to our upstream dairy R&D production projects, we have six projects operating that are well underway in construction and for that began construction at the end of 2024 as part of our development arrangement with our partner <unk> energy.

Speaker Change: All the pieces are finally falling into place for significant adoption.

Our six operating projects are expected to produce $4 to 6 billion gallons of R&D in 2025 do projects further along in construction are expected to be in service by the end of this year and could contribute an additional additional.

Speaker Change: The alternative fuel tax credit has been an important.

For the natural gas transportation sector since the credit began in 2005.

Speaker Change: This helps support adoption of cleaner natural gas vehicles in fueling infrastructure as a replacement for diesel.

Speaker Change: Additional RMG production in 2025, depending on the timing of completion.

Speaker Change: Or projects with mass energy more likely will come online in 2026.

Speaker Change: As you know the section 45 Z clean fuel production credit established under the inflation reduction Act is still pending finalization.

Speaker Change: It is designed to Incent the production of transportation fuels with low lifecycle emissions.

Speaker Change: I will touch on this more later, but we did not include any FTC revenue in our 2025 outlook because it is currently not in effect.

Speaker Change: G as a deeply negative lifecycle emissions score because of the methane emissions that it captures and prevents from escaping to the atmosphere.

Speaker Change: This credit will play a role in supporting continued growth of low carbon fuels production.

Speaker Change: We in the R&D industry have already been active in educating the new administration about the benefits.

Speaker Change: Our six operating projects are expected to produce $4 6 million gallons of R&D in 2025 do.

Speaker Change: Really produce RMG has as they move forward to finalize and even improve this credit.

Speaker Change: Two projects further along in construction are expected to be in service by the end of this year and could contribute an additional additional RMG production in 2025, depending on the timing of completion.

Speaker Change: And like the FTC, we have not included 45 Z and our 2025 outlook because the rules have not yet been finalized.

Speaker Change: Bob will go into more detail on the financials soon but I would like to comment on our 2025 outlook first off Youll notice on our GAAP outlook are potential exit from 55 pilot flying J locations, where we lease space from pilot, which almost exclusively houses LNG fueling equipment.

Speaker Change: Our projects with mass energy more likely will come online in 2026.

Speaker Change: As you know the section 45 Z clean fuel production credit established under the inflation reduction Act is still pending finalization.

Speaker Change: We signed this deal 15 years ago LNG was the best solution for long haul natural gas trucking Vince.

Speaker Change: It is designed to Incent the production of transportation fuels with low lifecycle emissions.

Speaker Change: Since then <unk> tanks and range of improved substantially and now there really isn't a market for LNG trucks.

Speaker Change: Gary is a deeply negative lifecycle emissions score because of the methane emissions that it captures and prevents from escaping into the atmosphere.

Speaker Change: We will likely remove this equipment and save some money on leases in operations, Although we will take a noncash hit we will probably spend some money to remove the equip importantly, we have a good relationship with pilot and we plan to continue that relationship.

Speaker Change: This credit will play a role in supporting continued growth of low carbon fuels production.

Speaker Change: We in the <unk> industry have already been active in educating the new administration about the benefits mystically produce RMG has as they move forward to finalize and even improve this credit and.

Speaker Change: I also want to make note of our 2025, adjusted EBITDA outlook of $50 million to $55 million compared to our 2024, adjusted EBITDA of $77 million and remind everyone of the of why there is a decrease for 2025.

Speaker Change: And like the FTC, we have not included 45 Z and our 2025 outlook because of the rules have not yet been finalized.

Speaker Change: Our 2025 outlook does not include a FTC, which contributed nearly $24 million to our results last year.

Speaker Change: As well RIN prices are currently 30% lower than some of the higher values. We saw in 2024.

Speaker Change: We signed this deal 15 years ago LNG was the best solution for long haul natural gas trucking.

Speaker Change: Those two factors account for a reduction of approximately $34 million year over year to our adjusted EBITDA.

Speaker Change: Since then <unk> tanks and range of improved substantially and now there really isn't a market for LNG trucks.

And we will see a FTC may well be extended in one of the tax bills that will be moving through Congress later this year.

Speaker Change: We will likely remove this equipment and save some money on leases in operations, Although we will take a noncash yet and we will probably spend some money to remove the equip importantly, we have a good relationship with pilot and we plan to continue that relationship.

Speaker Change: So I hope, we are being a tad conservative not adding in a Tc and the 45 Z as well as planning for lower RIN prices and modest growth in this calendar year coming from the X 15 and adoption.

Speaker Change: I also.

Speaker Change: Want to make note of our 2025, adjusted EBITDA outlook of $50 million to $55 million compared to our 2024, adjusted EBITDA of $77 million and.

Speaker Change: But I do want is strongly remind you that as we begin 2025, we have a strong balance sheet and as I have just gave you. A few example, examples earlier in my remarks, we have a robust recurring business positioning us for growth opportunities in front of us in both fuel distribution and R&D production and with.

Speaker Change: Mind, everyone of them.

Speaker Change: Of why there is a decrease for 2025.

Our 2025 outlook does not include a FTC, which contributed nearly $24 million to our results last year.

Speaker Change: That I will turn the call over to Bob.

Bob: Thank you Andrew and good afternoon to everyone.

Speaker Change: As well RIN prices are currently 30% lower than some of the higher values. We saw in 2024.

Bob: For the fourth quarter of 2024, we reported a GAAP net loss of $29 8 million on revenues of $109 $3 million.

Those two factors account for a reduction of approximately $34 million year over year to our adjusted EBITDA.

Bob: On an adjusted non-GAAP basis, we reported net income of $3 6 million for the fourth quarter of 2024.

Speaker Change: And we will see a FTC may well be extended in one of the tax bills that will be moving through Congress later this year.

Bob: For the year 2024, we reported a GAAP net loss of $83 $1 million does that the low end of our GAAP guidance range for 2024 of $81 million and this is despite having a noncash write down of a couple of equity security investments.

Speaker Change: I hope, we are being a tad conservative not adding in a Tc and the 45 Z as well as planning for lower RIN prices.

Speaker Change: This growth in this calendar year coming from the X 15 and adoption.

Speaker Change: But I do want is strongly remind you that as we begin 2025, we have a strong balance sheet and as I. Just gave you. A few example, examples earlier in my remarks, we have a robust recurring business positioning us for growth opportunities in front of us in both fuel distribution and R&D production.

Bob: For $8 million in the fourth quarter of 2024.

Bob: Also keep.

Bob: In mind that the 2024 results are noncash stock based <unk>.

Bob: Amazon warrant charges were approximately $61 million of that $83 million loss.

Speaker Change: And with that I'll turn the call over to Bob.

Bob: Thank you Andrew and good afternoon to everyone.

Bob: Our adjusted EBITDA of $76 6 million for the year 2024 exceeded the top end of our 2024 guidance range of $72 million.

Bob: For the fourth quarter of 2024, we reported a GAAP net loss of $29 $8 million on revenues of $109 $3 million.

Bob: It was a nice upside finished the year.

Bob: And on an adjusted non-GAAP basis, we reported net income of $3 6 million for the fourth quarter of 2024.

Bob: In the fourth quarter, we continued to experience strong results from our fueling operations plus we saw an increase in fuel volumes in the fourth quarter. So we got the double effect of continued good margins on higher volume.

Bob: The results of our R&D upstream business for 2024 came in as expected right in the middle of our guidance range from a GAAP and a non-GAAP EBITDA standpoint.

Bob: From a cash standpoint, we finished 2024 with $217 million in unrestricted cash and investments.

Bob: For $8 million in the fourth quarter of 2024.

Bob: Also keep in mind that the 2024 results are noncash stock based.

Bob: With $100 million available to draw on our debt facility.

Bob: Plus there was $129 million of cash off balance sheet, and our R&D jv's with BP in mass energy.

Bob: Amazon warrant charges were approximately $61 million of that $83 million loss.

Bob: And our long term debt was $303 million at the end of 2024.

Bob: Our adjusted EBITDA of $76 6 million for the year 2024 exceeded the top end of our 2024 guidance range of $72 million.

Bob: Our capital expenditures for 2024 were $57 million that's.

Bob: That's net of grant money received and net of contributions that we received from our joint development partner Tourmaline for the build out of <unk> stations in Western Canada.

Bob: Which was a nice upside finished the year.

Bob: In 2025, we expect capex spend to be about $30 million.

Bob: Reflecting mainly the completion of Amazon dedicated stations in 2024.

Bob: The results of our R&D upstream business for 2024 came in as expected right in the middle of our guidance range from a GAAP and a non-GAAP EBITDA standpoint.

Bob: Capital expenditures for R&D upstream projects that we own plus contributions that we made into R&D joint ventures was approximately $48 million for 2024.

Bob: From a cash standpoint, we finished 2024 with $217 million in unrestricted cash and investments.

Bob: This is a little shy of previous estimates purely due to the timing of when the projects needed funding.

Bob: With $100 million available to draw on our debt facility.

Bob: Plus there was $129 million of cash off balance sheet, and our R&D jv's with BP in mass energy.

Bob: In 2025, we estimate R&D upstream capital expenditures to be $104 million.

Bob: Okay.

Bob: And our long term debt was $303 million at the end of 2024.

Bob: Our capital expenditures for 2024 were $57 million.

Bob: That's net of grant money received and net of contributions that we received from our joint development partner Tourmaline for the build out of <unk>.

We also break our guidance down further between our fuel distribution business and our R&D upstream business.

Bob: <unk> stations in Western Canada.

Bob: That R&D upstream business includes both our share of equity method investments in R&D production and clean energy owned R&D production projects.

Bob: In 2025, we expect capex spend to be about $30 million.

Bob: Reflecting mainly the completion of Amazon dedicated stations in 2024.

Bob: I'd like to make some important points.

Bob: Capital expenditures for R&D upstream projects that we own plus contributions that we made into R&D joint ventures was approximately $48 million for 2024.

Bob: For 2025 number one.

Bob: Repeat ourselves our 2025 guidance does not include the alternative fuel tax credit, which in 2024 was approximately $24 million of FTC revenue.

Bob: This is a little shy of previous estimates purely due to the timing of when the projects needed funding.

Bob: Both GAAP and non-GAAP included the $24 million of alternative fuel tax credit revenue in 2024, so it will be comparative excluding the FTC from 2024 would take the GAAP loss to $107 million and adjusted EBIT to $53 million as starting points when.

Bob: In 2025, we estimate R&D upstream capital expenditures to be $104 million.

Bob: Okay.

Bob: We present, our 2025 earnings outlook in our press release that was filed on form 8-K. Today. So you can see the GAAP guidance and the non-GAAP adjusted EBITDA guidance with a reconciliation between the two amounts. We also break our guidance down further between our fuel distribution business and our R&D upstream business.

Bob: <unk> to our outlook for 2025.

Bob: And then.

Speaker Change: Second Andrew alluded to this that we're seeing about a 20% decline in average RIN prices for 2025 that results in an approximate $10 million reduction in rent revenue for 2025 versus 2024.

Bob: Ms.

Bob: That R&D upstream business includes both our share of equity method investments and R&D production and clean energy owned R&D production projects.

Speaker Change: And RIN price volatility of course is certainly part of our environment and we do quite well on RIN revenues, but just wanted to point out. This dynamic for 2025, we are estimating rins.

Bob: I'd like to make some important points.

Bob: For 2025 number one.

Bob: Repeat ourselves our 2025 guidance does not include the alternative fuel tax credit, which in 2024 was approximately $24 million of FTC revenue.

Speaker Change: In the $2 40 range for 2025 versus the average that we saw in 2024 of around $3 10.

Bob: Both GAAP and non-GAAP included the $24 million of alternative fuel tax credit revenue in 2024, so to be comparative excluding the FTC from 2024 would take the GAAP loss to $107 million and adjusted EBIT to $53 million as starting points when.

Speaker Change: For the California L. CFS, we see a little upside we help when we look at 2025, where we are estimating California L. CFS prices in the low $70 for 2025 versus in 2024, where we saw an average of around $61. This could be.

Bob: <unk> to our outlook for 2025.

Speaker Change: $2 million upside in El CFS revenue over 2024.

Bob: And then <unk>.

Speaker Change: Second Andrew alluded to this that we're seeing about a 20% decline in average RIN prices for 2025 that results in approximately $10 million reduction in <unk> revenue for 2025 versus 2024.

Sure.

Speaker Change: And to understand that we are not anticipating significant incremental volumes from the launch of the <unk> and Cummins engine for 2025.

Speaker Change: The most important milestones to observe will be the initial adoption by a wide breadth of fleets, indicating the adoption is taking hold which should have significant implications down the road.

Speaker Change: For 2025, we are anticipating $3 million to $5 million fuel gallons being attributed to the X 15 in.

Speaker Change: In the $2 40 range for 2025 versus the average that we saw in 2024 of around $3 10.

Speaker Change: And importantly, we see this coming from over 25 fleets.

Speaker Change: For the California L. CFS, we see a little upside we hoped when we look at 2025, where we are estimating California L. CFS prices in the low $70 for 2025 versus in 2024, where we saw an average of around $61. This.

Speaker Change: This is a key indicator towards the future and we believe is very exciting and frankly something that was nonexistent up until this year.

Speaker Change: R&D volumes are projected to be around 246 million gallons versus 2024 of 237 million gallons.

Speaker Change: This could be.

Speaker Change: $2 million upside in CFS revenue over 2024.

Speaker Change: And like <unk>.

Speaker Change: Talking about last year in our estimate for the 2025 to 246.

Speaker Change: Sure.

Speaker Change: And to understand that we are not anticipating significant incremental volumes from the launch of the <unk> and Cummins engine for 2025.

Speaker Change: We do not include an estimate for R&D gallons that we will fuel too.

Speaker Change: Customers outside our network and on occasion that does happen and it in 2024. For example, we had about 9 million gallons of what I'll call kind of wholesale R&D gallons, while we're not budgeting.

Speaker Change: For 2025, we are anticipating three to 5 million fuel gallons being attributed to the X 15 in.

Speaker Change: That in 2025, so from a comparability standpoint, excluding the 9 million gallons from 2024 that would bring the growth rate.

Speaker Change: Importantly, we see this coming from over 25 fleets.

Speaker Change: This is a key indicator towards the future and we believe is very exciting and frankly something that was nonexistent up until this year.

Speaker Change: For 2025 closer to seven 5%.

Speaker Change: And we may get some of those gallons.

Speaker Change: We serve the market well that way because we're a big mover of R&D, we just.

Speaker Change: RMG volumes are projected to be around 246 million gallons versus 2024 of 237 million gallons.

Speaker Change: We don't we don't forecast that so it can look not comparable sometimes.

Speaker Change: And then as we mentioned previously on our R&D upstream expectations for 2025.

Speaker Change: And like we are.

Speaker Change: Talking about last year.

Speaker Change: Our estimate for the 2025 to 246, we.

Speaker Change: Our volume.

Speaker Change: Expectations is that we would produce four to 6 million gallons in 2025 Thats. The gross gallons being produced at principally the six operating projects and as a reminder, we take all of those gallons into our fueling network.

Speaker Change: We do not include an estimate for R&D gallons that we will fuel too.

Speaker Change: Customers outside our network and on occasion that does happen and in 2024. For example, we had about 9 million gallons of what I'll call kind of wholesale R&D gallons, while we're not budgeting.

We're not estimating any revenues from <unk> at our dairy projects for the production tax credit as Andrew indicated.

Speaker Change: That in 2025, so from a comparability standpoint, excluding the 9 million gallons from 2024 that would bring the growth rate for.

Speaker Change: And we will see how that how the guidance or the rules come down on that and as to whether we get to put in the end in 2025.

Speaker Change: For 2025 closer to seven 5%.

Speaker Change: And then lastly on the R&D upstream.

Speaker Change: And we may get some of those gallons.

Speaker Change: Approximately 50% of the of the.

Speaker Change: We serve the market well that way because we're a big mover of R&D, we just.

Speaker Change: Earnings in our guidance outlook for the upstream.

Speaker Change: We don't we don't forecast that so it can look not comparable sometimes.

Speaker Change: Is coming from our large dairy in Idaho, where we are providing operating services, while we construct so thats a little bit of a drag on the.

Speaker Change: And then as we mentioned previously on our R&D upstream expectations for 2025.

Speaker Change: GAAP and adjusted EBITDA amounts of that project is expected to come online at the end of 2025, and then we will begin the monetization process in 'twenty six and.

Speaker Change: Our volume.

Speaker Change: Expectations is that we would produce four to 6 million gallons in 2025, that's the gross gallons being produced at principally the six operating projects and as a reminder, we take all of those gallons into our fueling network.

Speaker Change: And of course expect to curtail and exceed those operating costs that we're experiencing.

Speaker Change: To date and in 'twenty five.

Speaker Change: We're not estimating any revenues from <unk> at our dairy projects for the production tax credit as Andrew indicated.

Speaker Change: Our consolidated revenues, we're looking at to be around $400 million for 2025.

Speaker Change: Which are revenues of course are also impacted by.

Speaker Change: And we will see how that how the guidance or the rules come down on that and as to whether we get to put in the yen in 2025.

Speaker Change: Not having any alternative fuel tax credit in the 2025.

Speaker Change: <unk> and also somewhat on the kind of net lower environmental credit revenue that has an impact on those on that revenue. So we're expecting around $400 million for 2025.

Speaker Change: And then lastly on the Orange upstream.

Speaker Change: Approximately 50% of the of the.

Speaker Change: Earnings in our guidance outlook for the upstream.

Speaker Change: Is coming from our large dairy in the Idaho, where we are providing operating services, while we construct so that's a little bit of a drag on the.

Speaker Change: And then lastly.

You will note a large.

Speaker Change: Larger depreciation expense that's estimated for 2025 and that is primarily associated with our possible.

Speaker Change: GAAP and adjusted EBITDA amounts of that project is expected to come online at the end of 2025, and then we will begin the monetization process in 'twenty six.

Speaker Change: From the pilot stations that Andrew mentioned and the accelerated depreciation that would occur for the sites that we exit.

Speaker Change: And with that operator, let's turn the call over to questions.

Speaker Change: Of course expect to curtail and exceed those operating costs that we're experiencing.

Speaker Change: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad you may withdraw yourself from the queue at any time by pressing star two.

Speaker Change: To date and in 'twenty five.

Speaker Change: Okay.

Speaker Change: Our consolidated revenues, we're looking at to be around $400 million for 2025.

Speaker Change: Which are revenues of course are also impacted by.

Speaker Change: And we'll move first to Tommy James with UBS. Your line is open.

Speaker Change: Not having any alternative fuel tax credit in the 2025.

Tommy James: Hey, how are you guys looking at the clarification, one more quantified how much credit.

Speaker Change: <unk> and also somewhat on the kind of net lower environmental credit revenue that has an impact on those on that revenue. So we're expecting around $400 million for 2025.

Tommy James: Totally out of our flying high considering that I'll lay out.

Tommy James: The OE lp's from.

Speaker Change: And then lastly.

Tommy James: Carb.

Speaker Change: You will note a large.

Tommy James: Yes, yes.

Speaker Change: Larger depreciation expense that's estimated for 2025 and that is primarily associated with our possible exit from the pilot stations that Andrew mentioned and the accelerated depreciation.

Speaker Change: Yes, so so for those that don't know on the call. So we just we spent the last 18 months.

Speaker Change: Everybody did of working on the new rules for Carb and then the office of I guess.

Speaker Change: Administration legal or some that are.

Speaker Change: Would occur for the sites that we exit.

Speaker Change: Legal office called into question sort of the process.

Speaker Change: And with that operator, let's turn the call over to questions.

Speaker Change: We tend to think Thats, a really technical we've been working we've been talking to.

Speaker Change: Leadership in Sacramento at Carb and other offices and we feel like this is really a technical thing that everybody seems to be <unk>.

Speaker Change: Acknowledging that they want to try to get resolved here quickly. So we tend to think that in the next few weeks or so that that will get resolved and those rules get put back into place.

James: And we'll move first to sell me James with UBS. Your line is open.

James: Hi, how are you guys looking at the clarification, one more quantified how much credit.

Speaker Change: Always moves a little slower than I think but.

Speaker Change: We are bold in.

Well the answer offline considering that I'll lay out.

To ensure that.

Speaker Change: There's nothing nefarious. This is really highly technical in nature, and so let's hope that they get that set and so therefore, we believe that the pricing will come back.

James: The OEM piece from.

James: Carb.

James: Yes, yes.

Speaker Change: Yes, so so for those that don't know on the call. So we just we spent the last 18 months.

Speaker Change: And we'll be back into the seventies lower <unk> like we've seen you know right. After the ol came out.

Speaker Change: Everybody did working on the new rules for Carb and then the office of I guess.

Speaker Change: A couple of days ago the stock.

Speaker Change: Administration legal or so.

Speaker Change: Credit touch 55, and it's come back down in the 66 or something now so I tend to think that we'll be back in the seventies and then we think that the remainder of this year, we'll work off those credits and we will see a higher price and it wouldn't surprise me that we will touch something closer to 80 towards the.

Speaker Change: Legal office called into question sort of the process.

Speaker Change: We tend to think Thats, a really technical we've been working we've been talking to.

Speaker Change: Leadership in Sacramento at Carb and other offices and we feel like this is really a technical thing that everybody seems to be.

Speaker Change: The latter part of the year.

Speaker Change: Acknowledging that they wanted to try to get resolved here quickly. So we tend to think that in the next few weeks or so that that will get resolved and those rules get put back into place.

Speaker Change: Alright got it in the first part of the question as part of the question was on the.

Speaker Change: It was on the PTC and <unk>.

Speaker Change: Kind of what value, we're well right now right now I mean, the vitamin illustration rush that out at the very end and frankly, just let's just be real candid about it they picked a new brand new greet model that didn't fully appreciate the methane capture.

Speaker Change: Always moves a little slower than I think but.

Speaker Change: We are bold in.

Speaker Change: To ensure that.

Speaker Change: There was nothing nefarious. This is really highly technical in nature, and so let's hope that they get that set and so therefore, we believe that the pricing will come back.

Like we do with the Greek mode model that uses by carb and they kind of used to.

Speaker Change: And we'll be back into the seventies lower seventies like we've seen right. After the OBL came out.

Speaker Change: Our methane.

Speaker Change: Manure more like a.

Our beef scandal, which we don't use in the <unk> business and so it really limits.

Speaker Change: A couple of days ago the stock.

Speaker Change: Credit touch 55, and it's come back down into 66 or something now so I tend to think that we'll be back in the seventies and then we think that the remainder of this year, we will work.

Speaker Change: <unk>.

Speaker Change: The value of the credit because we don't get as low carbon as we should so.

Speaker Change: Now that would range between $1 and $2 with our projects probably closer to one dollar.

Speaker Change: Off those credits and we will see a higher price and it wouldn't surprise me that will touch something closer to 80% toward the latter part of the year.

Speaker Change: We tend to believe that if that was done correctly that it should be higher than that something closer to three or $4 $5.

Speaker Change: Alright got it.

Speaker Change: As part of the question. This is part of the question was on the.

Speaker Change: Based on the carbon intensity the negative nature of our.

Speaker Change: It was on the PTC and and where we're at.

Speaker Change: Kind of what value, we're well right.

Speaker Change: Carbon intensity, so we'll see how that shakes out, but that's one of these things that the new administration is trying to get their their footing on just how do they feel about certain biofuels and certain mandates in certain credits.

Speaker Change: Right now right now I mean, the bite administration rush that out at the very end and frankly, just let's just be real candid about it.

Speaker Change: <unk> brand, new greet model that didn't fully appreciate the methane capture.

Speaker Change: We generally feel.

Speaker Change: Like we do with the Greek mode model that uses by carb and they kind of used to.

Speaker Change: Is that the administration wants to be constructive for these kind of.

Speaker Change: Our methane.

Speaker Change: Programs that encourage fuel from the foreign states and that our renewable in nature in that.

Speaker Change: Manure more like a.

Speaker Change: Our beef scandal.

Speaker Change: We don't use in the <unk> business and so it really limits.

Speaker Change: That that are from.

Speaker Change: These kinds of programs, we will see how that goes.

Speaker Change: The.

Speaker Change: The value of the credit because we don't get as low carbon as we should so right now that would range between one dollar in $2 with our projects probably closer to one dollar.

Speaker Change: And do you see any volumes in the transportation power.

Speaker Change: Power generation.

Speaker Change: Start again at the top I'm, having a hard time hearing you.

We tend to believe that if that was done correctly that it should be higher than that something closer to three or $4 $5.

Speaker Change: Okay. So do you guys see any volumes for the transportation sector mobile going towards power generation for data centers or highlights that you may begin.

Speaker Change: Understood.

Speaker Change: Based on the carbon intensity the.

Speaker Change: Youre talking about on RMG now right. So.

Speaker Change: Negative nature of our.

Speaker Change: Yeah.

Speaker Change: Carbon intensity, so we'll see how that shakes out, but that's one of these things that new administration is trying to get their their footing on just how do they feel about certain biofuels and certain mandates in certain credits.

Speaker Change: Thank you.

Speaker Change: So transportation is still accounts for somewhere between 75% to 80% of the R&D.

Speaker Change: And.

Speaker Change: I have wondered if.

Speaker Change: We generally feel.

Speaker Change: Some of these these.

Speaker Change: Is that the administration wants to be constructive for these kind of.

Big power usage.

Speaker Change: For data centers might not be really elegantly satisfied with R&D, but it's at a significantly lower price. So we will see how much of it gets siphoned off into that market.

Speaker Change: Programs that encourage fuel from the foreign states and that our renewable in nature in that.

Speaker Change: That that are from.

Speaker Change: But I'm sure some will overtime.

Speaker Change: These kinds of programs and we'll see how that goes.

Speaker Change: Because when you start talking about.

Speaker Change: Thank you and do you see any volumes in the transportation health care and I'll be back.

Speaker Change: Nuclear plants and other kinds of production facilities that are required.

Speaker Change: On slide power generation.

Speaker Change: Alright.

Speaker Change: In a low carbon fuel like R&D, just might be a really elegant answer. So we'll see how that goes but there really isn't a better use than transportation for our LNG I mean.

Speaker Change: Start again at the top I'm, having a hard time hearing you.

Speaker Change: Okay. So do you guys see any volumes for the transportation sector in mobile going towards power generation for data centers or highlight that next data center side of things.

Speaker Change: Transportation is a hard to decarbonize.

Speaker Change: Youre talking about on RMG now right. So.

Speaker Change: Our sector.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Can't use wind can't use solar we've seen the situation around batteries and so R&D into heavy duty diesel transportation is really a very good use for RMG and therefore, that's why you're rewarded handsomely for it.

Speaker Change: So transportation is still accounts for somewhere between 75% to 80% of the R&D.

Speaker Change: And.

Speaker Change: I have wondered if.

Speaker Change: Some of these these.

Speaker Change: Big power uses.

Speaker Change: Hi, <unk>.

Speaker Change: For data centers might not be really elegantly satisfied with R&D, but it's at a significantly lower price. So we will see how much of it gets siphoned off into that market.

Speaker Change: You bet.

Speaker Change: We'll move next to Eric Stine with Craig Hallum. Your line is open.

Eric Stine: Hi, Andrew Hey, Bob.

Steve: Hey, Steve.

Speaker Change: But I'm sure some will overtime.

Eric Stine: Hey, so maybe just starting with volumes.

Because when you start talking about.

Eric Stine: Wondering if for fourth quarter, if you can just.

Speaker Change: Nuclear plants and other kinds of production facilities that are required.

Eric Stine: Talk about from a high level of.

Eric Stine: Volume growth in your key sectors, and then also for 2025, where youre kind of thinking about from a volume perspective, I know that that's tempered a bit just because of the 15 liter and that coming on later in the year.

In a low carbon fuel like R&D, just might be a really elegant answer. So we'll see how that goes but there really isn't a better use than transportation for RMG.

Speaker Change: Yeah.

Eric Stine: Yes.

Speaker Change: Transportation is a hard to decarbonize.

Eric Stine: Yes, Eric for the for the fourth quarter.

Speaker Change: Sector.

Eric Stine: It was it was in our fueling area and so sector youre going to be kind of mainly in the fleet.

Speaker Change: You can't use wind can't use solar we've seen the situation around batteries, so R&D and it.

The heavy duty diesel transportation is really a very good use for R&D and.

Eric Stine: Category.

Eric Stine: As well as some of the R&D that we flow to our transfer to our.

Speaker Change: Therefore, that's why you're rewarded handsomely for it.

Eric Stine: Our transit customers.

Speaker Change: Got it all.

Eric Stine: That's what.

Eric Stine: It was driving some of that growth.

Speaker Change: You bet.

We'll move next to Eric Stine with Craig Hallum. Your line is open.

Eric Stine: And then in.

Eric Stine: 425.

Eric Stine: Yeah.

Eric Stine: Hi, Andrew Hey, Bob.

Eric Stine: For 25, we see modest growth kind of throughout I would say the as normal.

Speaker Change: Hey, Steve.

Speaker Change: Hey, so maybe just starting with volumes I'm.

I'm wondering if for fourth quarter. If you can just talk about from a high level.

Eric Stine: With then kind of the adder from the X 15 in it's not it's not a lot, but it's all incremental so.

Speaker Change: <unk> growth in your key sectors, and then also for 2025, where youre kind of thinking about from a volume perspective, I know that that's tempered a bit just because of the 15 liter and that coming on later in the year.

Eric Stine: It is it is meaningful but.

Eric Stine: We're seeing.

Eric Stine: For the most part growth.

Eric Stine: Throughout maybe the Rep uses a little bit.

Eric Stine: Little bit muted, but thats, a very mature market.

Speaker Change: Yes.

Speaker Change: Yes, Eric.

Speaker Change: For the for the fourth quarter.

Eric Stine: Okay.

Speaker Change: Yes, understood and then maybe just sticking on the volume topic. It sounds like what you are.

Speaker Change: It was it was in our fueling area and so sector youre going to be kind of mainly in that fleet.

Speaker Change: If not done very close to being done with this at least initial Amazon station Buildout.

Speaker Change: Category.

Speaker Change: As well as some of the R&D that we flow to our transfer to our.

Speaker Change: Curious what youre seeing from non Amazon fleets, that's still utilize those stations what type of growth that <unk> been able to kind of separate that out and track how that's going.

Speaker Change: Our transit customers so.

Speaker Change: That's what was.

Speaker Change: It was driving some of that growth.

Speaker Change: And then in.

Speaker Change: 425.

Speaker Change: We're seeing some again look I think it's important to note at this point of the call Eric and you know this because you follow it closely.

Speaker Change: For 25, we see modest growth kind of throughout I would say that as normal.

Speaker Change: With then kind of the adder from the X 15, and it's not it's not a lot, but it's all incremental so.

Speaker Change: Youre really coming off of 2024.

Speaker Change: Which was a difficult year in terms of sort of the chip that was that was felt.

Speaker Change: It is it is meaningful but.

Speaker Change: Maybe its the economy in general maybe use the political season that we're in it certainly in the heavy duty truck space and civil work.

Speaker Change: We're seeing.

Speaker Change: For the most part growth throughout maybe the Rep uses a little bit.

A little bit muted, but thats, a very mature market.

Speaker Change: What we see is.

Speaker Change: The policy environment got really tricky.

Speaker Change: Okay.

Speaker Change: Yes, understood and then maybe just sticking on the volume topic. It sounds like what you are.

I mean as I mentioned in my remarks, I mean can you imagine in California is one of the biggest markets for truck sales down 50%.

Speaker Change: If not done very close to being done with this at least initial Amazon station build out.

Speaker Change: Yes.

Speaker Change: The.

Speaker Change: Curious what youre seeing from non Amazon fleets, that's still utilize those stations, what what type of growth that <unk> been able to kind of separate that out and track how that's going.

Speaker Change: The policies that were being talked about the reported in the paper and all it was it was suggesting that you had to buy an electric truck and if you didn't have to buy one right. This second.

Speaker Change: Sure needed to consider it in a year or two years three years and so it really had a dampening effect.

Speaker Change: We're seeing some.

Speaker Change: Again look I think it's important to note at this point in the call Eric and you know this because you follow it closely.

Speaker Change: On.

Speaker Change: Movement toward natural gas or LNG.

Speaker Change: Well why do you want to buy a brand new tractor on R&D, if two years or three years from now you're really not in California's supposed to be able to use it.

Speaker Change: Youre really coming off of 2024.

Speaker Change: Which was a difficult year in terms of sort of the chill that was that was felt.

Speaker Change: So we're coming off and thank God, we are.

Speaker Change: Maybe its the economy in general maybe use the political season that we are in it certainly in the heavy duty truck space and civil work.

Speaker Change: I think that sort of common sense may be as prevailing at some of this some of these rules just warrant.

Speaker Change: They were well intended perhaps but theyre, just not well thought out and so we're seeing carb trying to get their arms around how do they reset these rules to achieve air quality achieve climate discipline, but yet.

Speaker Change: We see as the policy environment got really tricky.

Speaker Change: I mean as I mentioned in my remarks, I mean can you imagine in California is one of the biggest markets for truck sales down 50%.

Speaker Change: Within the realms of economics, and something that works with commercial and so I really think that as you go through this kind of difficult the last half of 'twenty four 'twenty five.

Speaker Change: The.

The policies that were being talked about that were reported in the paper and all it was it was suggesting that you had to buy an electric truck and if you didn't have to buy one right. The second.

Speaker Change: RMG natural gas heavy duty trucking, we're rising to the to the top right.

Speaker Change: Sure needed to consider it in a year or two years three years and so it really had a dampening effect.

Speaker Change: I don't have to convince anyone that the hydrogen fuel cell trucks, that's not going to happen.

Speaker Change: On.

Speaker Change: Movement toward natural gas or LNG.

Speaker Change: And the electric is is I think it's clear that it's.

Speaker Change: Well why do you want to buy a brand new tractor on R&D, if two or three years from now you're really not in California's supposed to be able to use it.

Speaker Change: If it ever happens its way out.

So we're going to be one of the last.

Speaker Change: Fuel standing here.

Speaker Change: So we're coming off and thank God, we are.

Speaker Change: Thank goodness, we've arrived with a new engine product.

Speaker Change: I think that sort of common sense, maybe as prevailing as some of this some of these rules just werent there.

Speaker Change: The <unk> now and talking with the.

Speaker Change: Gentlemen charges sales for Cummins, he really wants to see 2025, and not get ahead of ourselves, but see breath over.

Speaker Change: We're well intended perhaps but theyre, just not well thought out and so we're seeing carb trying to get their arms around how do they reset these rules to achieve air quality.

Speaker Change: 1000 truck order by a big fleet he wants to see.

Speaker Change: Achieve climate discipline, but yet.

Speaker Change: Dozens of fleets take 2010.

Speaker Change: 35, so that's how we really build two significant volume and as I mentioned in my remarks, I mean, I had to be impressed by the CEO of common stocking about.

Speaker Change: Within the realms of economics, and something that works with commercial and so I really think that as you go through this kind of difficult last half 'twenty four 'twenty five.

Speaker Change: RMG natural gas heavy duty trucking, we're rising to the to the top right.

Speaker Change: <unk>.

Speaker Change: <unk> penetration in the future.

Speaker Change: Now Youre talking so it's really a 25, we begin to build the base.

Speaker Change: I don't have to convince anyone that the hydrogen fuel cell trucks, that's not going to happen and.

Speaker Change: We'll begin to see volume towards the.

Speaker Change: Exit.

Speaker Change: And the electric is.

Speaker Change: Exit period of 2025, 25, and then I think you really start seeing significant volume in 'twenty six 'twenty seven.

Speaker Change: It's clear that it's.

Speaker Change: If it ever happens its way out.

Speaker Change: So we're going to be one of the last.

Speaker Change: So okay. Thanks, a lot in particular, we're seeing some pickups of different customers as some of the purpose built stations for Amazon.

Speaker Change: Fuel standing here.

Speaker Change: And thank goodness, we've arrived with a new engine product.

Speaker Change: The <unk> now and talking with the.

Speaker Change: I'm forgetting the name of the fleet, Eric just 12 units showed up the other day on Ohio. So that was a really nice adder for us significant volume. So we're seeing it and if you didn't have those locations in San Bernardino, We're seeing a nice mix of new volume showing up there in California. So we're beginning.

Speaker Change: Gentlemen, charged sales for Cummins, he really wants to see 2025, and not get ahead of ourselves, but see breath over.

Speaker Change: 1000 truck order by a big fleet he wants to see it.

Speaker Change: Dozens of fleets take 20 and 10.

Speaker Change: 35, so that's how we really build two significant volume.

Speaker Change: See if those are beautiful stations.

Speaker Change: I have.

Speaker Change: And as I mentioned in my remarks, I mean, I had to be impressed by the CEO of common stocking about the.

Speaker Change: And access public fleets and they are well positioned.

Speaker Change: So in the future they will they will grow continue to grow.

Speaker Change: <unk> penetration in the future.

Speaker Change: Okay. Thank you.

Speaker Change: Now youre talking so it's really a <unk>.

Speaker Change: Okay.

Speaker Change: Five we begin to build the base and we'll begin to see volume towards the.

Speaker Change: We'll take our next question from Rob Brown with Lake Street Capital markets. Your line is open.

Speaker Change: Exit.

Speaker Change: <unk> period of 2025, 25, and then I think you really start seeing significant volume in 'twenty six 'twenty seven.

Hi, good afternoon.

Speaker Change: Hey, Rob.

Rob Brown: On the 15 liter rollout how do you see that population using your existing fleet footprint or sorry station footprint.

Speaker Change: So okay. Thanks, a lot in particular, where we're seeing some pickups of different customers and some of the purpose built stations for Amazon.

Is that going to be using what you've got out there do you see.

Rob Brown: The growth of New news stations, how do you sort of see that happening I really do Rob I think it's a really good question I really do believe that certainly when you are talking about.

Forgetting the name of the fleet, Eric just 12 units showed up the other day on Ohio. So that was a really nice adder for us significant volume. So we're seeing it and if you didn't have those locations in San Bernardino.

Rob Brown: Tens and twenties, and thirties and that kind of thing it will use the existing network.

Speaker Change: We're seeing a nice mix of new volume showing up there in California. So we're beginning to.

Rob Brown: And all of these big National fleets, so thank goodness.

Rob Brown: The nice thing Rolling out Cummins Rolling this out with <unk> and soon of Freightliner. They are working with the largest fleets and they all have lanes all over where we have our existing network.

Speaker Change: See if those are beautiful stations.

Speaker Change: I have.

And access public fleets and they are well positioned.

Speaker Change: So in the future they will they will grow continue to grow.

Rob Brown: And so.

Speaker Change: Okay. Thank you.

Rob Brown: We will see a nice pick up before we have we're starting to have to be.

Speaker Change: Okay.

Speaker Change: We will take our next question from Rob Brown with Lake Street Capital markets. Your line is open.

Rob Brown: Build no don't get me wrong, I would love to have J B Hunt eventually after they do a few hundred trucks and say, okay. Now put in stations at X Y and Z terminals for us and we'd love that business when it happens, but it will start with our existing.

Rob Brown: Hi, good afternoon.

Speaker Change: Hey, Rob.

Speaker Change: On the 15 liter rollout how do you see that population using your existing fleet footprint or sorry station footprint.

Rob Brown: 100, 120, some odd truck stops.

Speaker Change: Is that going to be using what you've got out there do you see you see a big.

Speaker Change: The growth of New news stations, how do you sort of see that.

Rob Brown: Okay, great that's good.

Speaker Change: I really do Rob I think it's a really good question I really do believe that certainly when youre talking about.

Rob Brown: And then you talked a little bit about the drag from your Idaho project.

Rob Brown: When does that kind of look like in 'twenty, five and then I guess.

Speaker Change: It's kind of 10 in <unk> and <unk> that kind of thing it will use the existing network.

Rob Brown: Flip around or might be flipping around.

Rob Brown: Yeah, Rob it represents close to 50% of that of the.

Speaker Change: And all of these big National fleets, so thank goodness.

Speaker Change: The nice thing Rolling out Cummins Rolling this out with <unk> and soon Freightliner Theyre working with the largest fleets and they all have lanes all over where we have our existing network.

Rob Brown: Outlook for the adjusted EBITDA in that range.

Rob Brown: And then and that really is because we are we are performing kind of in operating.

Rob Brown:

Speaker Change: And so we.

Or whatever opera Hain activity up therefore.

Speaker Change: We will see a nice pick up before we have we are starting to ask.

Rob Brown: For the farm that was all part of the deal because.

Speaker Change: Build no don't get me wrong I loved that JV eventually after they do a few hundred trucks and say, okay. Now put in stations at X Y and Z terminals for us and we'd love that business wanted to Athens, but it will start with our existing.

Rob Brown: There is one of the largest around so.

Rob Brown: So that will continue in 'twenty five but there is no revenue on that at all because we're still constructing and so we'll finish that.

Rob Brown: By the end of 'twenty five.

Rob Brown: And then well start.

Speaker Change: 100, 120, some odd truck stops.

Rob Brown: Capturing all that manure, and and and then creating creating the gas and then we'll be on our way to widen.

Speaker Change: Okay, great that's good.

Speaker Change: And then you talked a little bit about the drag from your Idaho project.

Rob Brown: The red nail CFS monetization and so then it will be a fully functioning.

Speaker Change: When does that kind of look like in 'twenty, five and I guess, how does it flip around her time.

Rob Brown: Project.

Speaker Change: I have been floating around.

Rob Brown: And $26.

Speaker Change: Got it.

Speaker Change: Rob It represents close to 50% of that.

Rob Brown: Got it okay, great. Thank you.

Rob Brown: Turn it over.

Rob it's impressive and when we get that done we'll have people ought to look at that facility.

Speaker Change: Outlook for the adjusted EBITDA in that range.

Speaker Change: And then and that really is because we are we are performing kind of in operating.

Speaker Change: Think about it 37000 milking cows I mean, you've essentially built and this is what the cost is right now you're operating a sanitation district, if you will.

Speaker Change: Or whatever opera Hain activity up therefore for.

Speaker Change: Or if you put it on human basis, probably 100000 people.

Speaker Change: <unk> for the farm that was all part of the deal because there.

Speaker Change: And you're operating that now you haven't yet been able to we haven't finished the <unk>.

Speaker Change: <unk> is one of the largest around so.

Speaker Change: So that will continue in 'twenty five but there is no revenue on that at all because we're still constructing and so we'll finish that.

Speaker Change: Election part of the digester part that comes at the very end.

But thats what the drag is from and that was part of it that was always figured into the end of the deal because the farmer needs of that but it's very impressive project that we're going to be very proud of is going to generate a lot of RG when it's done.

Speaker Change: By the end of 'twenty five.

Speaker Change: And then well start.

Speaker Change: Capturing all that manure, and and and then creating creating the gas and then we'll be on our way too.

Okay. Thank you I'll turn it over.

Speaker Change: Rendell CFS monetization and so then it will be a fully functioning.

Speaker Change: Yes.

Speaker Change: We'll move next to Shawn <unk> with Jefferies. Your line is open.

Speaker Change: Project.

Speaker Change: In 2007.

Shawn: Hey, guys. Thanks for taking my question and also thank you for sharing your van and Lcs assumptions and you guys Thats helpful.

Speaker Change: Got it okay, great. Thank you.

Speaker Change: It over.

Rob Brown: Rob it's impressive and when we get that done we'll have people ought to look at that facility.

Shawn: Just going back to your prior question on the oil so I said that.

Rob Brown: Think about it 37000 milking cows, you've essentially built and this is what the cost is right now you're operating a sanitation district, if you will.

Shawn: And the next few weeks will be resolved.

Shawn: Then is it possible to see that.

Shawn: TL CFS and your amendments come into effect of that original timeline in April or.

Speaker Change: Or if you put it on human basis, probably 100000 people.

Shawn: How do you think about that.

Speaker Change: And you're operating that now you haven't yet been able to we haven't finished the.

Shawn: Well.

Shawn: I don't know the exact expert on this my impression was that it should get results shortly.

Speaker Change: Election part of the digestion part that comes at the very end.

Shawn: My My words were last few weeks.

Speaker Change: But thats what the drag is from and that was part of it that was always.

Shawn: Yes.

Speaker Change: Figured into the into the deal because the farmer needs of that but it's very impressive projects that we're going to be very proud of this is going to generate a lot of RG what it's done.

Shawn: I was kind of under the impression to Sean for some time in April it should we should those should get reinstated.

Shawn: I may be ahead of myself by a few weeks here or there, but I mean, it looks to me like what we're being told is technical in nature and that it will get resolved and it wasn't something that.

Speaker Change: Okay. Thank you I'll turn it over.

Speaker Change: We'll move next to Shawn <unk> with Jefferies. Your line is open.

Shawn: There wasn't some.

Shawn: The various situation going on here that it was really was something that needed to be clarified in terms of having the appropriate process, that's going to get resolved everybody sort of understands that.

Speaker Change: Hey, guys. Thanks for taking my question and also thank you for sharing your van and Lcs.

Speaker Change: And then you guys that's helpful.

Speaker Change: Just going back to a prior question on the oil. So I think you said that.

Shawn: I was under the impression that some time in April.

Speaker Change: In the next few weeks will be resolved.

Shawn: So that it will be back on track.

And is it possible to see that DLC first any amendments come into effect in that original timeline in April or.

Shawn: Got it that's helpful.

Shawn: And then the second was just wanted to think a little bit more on the 15 liter engine.

Speaker Change: Yes, how do you think about that.

Shawn: The incremental demand that we could potentially see from it I don't think you guys talked about I think some of the examples you gave was that there's a lot of incremental demand, but as well as.

Speaker Change: Well.

Speaker Change: I don't know that on the exact expert on this my impression was that it should get resolved shortly.

Speaker Change: My My words were less few weeks.

Shawn:

Speaker Change: I'm just kind of under the impression just Sean for some time in April it should we should those should get reinstated.

Shawn: The 15, you're offsetting some of the legacy engines right. So how do you think about that incremental demand from defeat from the 15 liter engine.

Speaker Change: I may be ahead of myself by a few weeks here or there, but I mean, it looks to me like what we're being told is technical in nature and that it will get resolved wasn't something that.

Shawn: Well first off remember that.

Shawn: Let's just think of the scale right. So so the.

Shawn: Class eight spaces.

Speaker Change: There wasn't some.

Shawn: Ranges, depending on the year somewhere between 220000 240000 units.

Speaker Change: The various situation going on here that it was really was something that needed to be clarified in terms of having the appropriate process, that's going to get resolved everybody sort of understands that.

Shawn: And you know.

Shawn: Without putting a lot of words in Cummins now outflows, though I'm always willing to do it a little bit but.

Speaker Change: I was under the impression that sometime in April or.

Shawn: They they and they have said to me and meetings at their headquarters before that they saw no reason why.

Speaker Change: So that it will be back on track.

Speaker Change: Got it that's helpful.

Shawn: We shouldn't that if this product was like they think it could be that.

Speaker Change: And then the second was just wanted to think a little bit more on the 15 liter engine.

Shawn: That it should be able to eventually reach 10% penetration.

Speaker Change: The incremental demand that we could potentially see from it with I mean, I know that you guys talked about I think some of the examples you gave was there's incremental demand, but as well as.

Shawn: And.

Shawn: I think what Youre remembering.

Speaker Change:

Shawn: Sean before is that we kind of talk the way this thing would phase out and I think we're about.

Speaker Change: The 15 year offsetting some of the legacy engines right. So how do you think about that incremental demand from defeat from the 15 liter engine.

Maybe a half a year behind that we're going to start out between 2500 3000 units. We thought we were told in 2024, and then kind of move once we got freightliner in and you'd add another 500 units so you'd be at sort of 5000, and you would slide over kind of a 253 year period to about eight.

Speaker Change: Well first off remember that.

Speaker Change: Let's just think of the scale right. So.

Speaker Change: Class eight spaces.

Speaker Change: <unk>, depending on the year somewhere between 220000 240000 units.

Shawn: Percent between eight and 10% penetration.

Speaker Change: Now our CEO rumsey the other day she used 8%.

Speaker Change: And you know.

Speaker Change: Without putting a lot of words in Cummins now, though I'm always willing to do it a little bit but.

Shawn: So, let's just use that I think thats a great number so thats.

Speaker Change: They they are sitting on me and meetings at their headquarters and before that they saw no reason why.

Speaker Change: 8%.

Speaker Change: 20000 units.

Speaker Change: So that's that's kind of within striking range of those numbers that I've heard over the last two to three years stuck in my manufacturing of friends at Cummins of years gone by that would be significant. So when you. When you then multiply that times 15000 gallons, that's 300 million gallons. So then or.

Speaker Change: We shouldn't that if this product was like they think it could be that.

Speaker Change: It should be able to eventually reach 10% penetration.

Speaker Change: And.

Speaker Change: I think what Youre remembering.

Speaker Change: Sean before is that we kind of talk the way this thing would phase out and I think we're about.

Speaker Change: Way off to the races, even even at 5%.

Speaker Change: For our company, it's very significant so thats why I think this building of the base is really important.

Speaker Change: Maybe a half a year behind that we're going to start out between 2500 3000 units. We thought we were told in 2024, and then kind of move once we got freightliner in and you'd add another 500 units so you'd be at sort of 5000, and you would slide over kind of a 253 year period to about eight.

Speaker Change: So that.

Speaker Change: Fleets that buy look nice with <unk> 5600 units a year just to keep pace just to replace.

Speaker Change: So what I loved to have them take a thousand units sure but is it more important just to make sure that they get comfortable.

Speaker Change: Percent between eight and 10% penetration.

Speaker Change: And take 50 in <unk>.

Speaker Change: This year, we need that breath, we need a lot of those kinds of fleets that have the buying power eventually to get into this.

Speaker Change: Now our CEO rumsey the other day she used 8%.

Speaker Change: So, let's just use that I think thats a great number so thats good.

Speaker Change: It's not crazy to shot because when you think about it it took about three or four years. The introduction of the nine liter refuse engine now im going back a ways 2008, but by the time you got to 2011, Europe, 50%, 50% of the new <unk>.

Speaker Change: 8%.

Speaker Change: 20000 units.

Speaker Change: So that's that's kind of within striking range of those numbers that I've heard over the last two to three years stuck in my manufacturing your friends at Cummins of years gone by.

Speaker Change: That would be significant so when you. When you then multiply that times 15000 gallons, that's 300 million gallons. So then or.

Speaker Change: <unk>.

Speaker Change: Where natural gas is kind of hung around that now it's a much smaller market.

Speaker Change: Way off to the races, even even at 5%.

Speaker Change: 4000 units 3500 units a year in the refuse space.

Speaker Change: For our company is very significant so that's why I think this building of the base is really important.

Speaker Change: Do you know what the refuse space they don't travel as many miles they don't.

Speaker Change: So that.

Speaker Change: Fleets that buy look nice with <unk> 5600 units a year just to keep pace just to replace.

Speaker Change: They don't use as much fuel and there's not as many trucks and there's not as many trucks purchased so.

Speaker Change: So what I love to have them take a thousand units sure but is it more important just to make sure that they get comfortable.

Speaker Change: I think for the for the same reasons, we saw the success in transit in the in the refuse space will eventually see it here, we're providing really a.

Speaker Change: Take 50 in <unk>.

Speaker Change: This year, we need that Brett we need a lot of those kinds of fleets that have the buying power eventually to get into this.

Speaker Change: Great engine product with a low carbon fuel that's cheaper than diesel fuel.

Speaker Change: And we've been working with this rollout this year.

Speaker Change: Attractive fuel pricing.

That allows our fleet customers to get about a two year payback.

Speaker Change: On the equipment.

Speaker Change: So we think it's compelling and I think some of it.

Speaker Change: Keep our fingers crossed.

Speaker Change: I think we're doing the right thing to see.

Speaker Change: <unk>.

Where natural gas is kind of hung around that now it's a much smaller market.

Speaker Change: Building a good base for 2025.

Speaker Change: Understood. Thank you.

Speaker Change: 4000 units 3500 units a year in the refuse space.

Speaker Change: Well move next to Derrick Whitfield with Texas Capital Your line is open.

Speaker Change: Do you know what the refuse space they don't travel as many miles they don't.

Speaker Change: Okay.

Speaker Change: Good afternoon, guys and thanks for taking my questions.

Speaker Change: They don't use as much fuel and there's not as many trucks and there's only so many trucks purchased so.

Eric Stine: And Eric.

Eric Stine: A bigger picture question for you given the turbulence in the regulatory markets and the lack of clarity with 45 DNA FTC. How are you thinking about project development beyond <unk> for projects that are already meaningfully under construction.

Speaker Change: I think for the for the same reasons, we saw the success in transit in the in the refuse space will eventually see it here, we're providing really a.

Great engine product with a low carbon fuel that's cheaper than diesel fuel.

Speaker Change: So it's a very good question Derek.

Speaker Change: And we've been working with this rollout this year.

Eric Stine: What I think we.

Eric Stine: We've been saying, Bob and I have one we've been talking to.

Speaker Change: Attractive fuel pricing.

Eric Stine: What about as you know we have a good set of projects announced we've got them funded.

That allows our fleet customers to get about a two year payback.

Speaker Change: On the equipment.

Eric Stine: Some of them are fairly big.

Speaker Change: So we think it's compelling and I think some of it.

A couple more one of them for our 100%.

Speaker Change: Keep our fingers crossed.

Speaker Change: We think we're doing the right thing to see.

Eric Stine: We like we like having the six projects now working to optimize those bringing these other two large projects on.

Speaker Change: Building a good base for 2025.

Speaker Change: Understood. Thank you.

Speaker Change: Well move next to Derrick Whitfield with Texas Capital Your line is open.

Eric Stine: Those two projects.

Eric Stine: Together, we will be.

Eric Stine: 50000, milking cows, so together they are pretty big and then the Mas.

Good afternoon, guys and thanks for taking my questions.

Speaker Change: I'm not sure that we are that interested as we sit here right at this moment with the lack of clarity on some of these things.

Speaker Change: Hi, Derik.

Derik: Bigger picture question for you given the turbulence in the regulatory markets and the lack of clarity with $45 DNA FTC.

Speaker Change: We would be.

Speaker Change: Doing greenfield projects.

Derik: Are you thinking about project development beyond <unk> for projects that are already meaningfully under construction.

Speaker Change: We always we get to look at a lot of different deals we.

Speaker Change: We have seen some of our friends in the business Wonder if they wanted to go forward. So if there is good opportunities that come our way we will look at it.

Derik: So it's a very good question Derek.

Derik: <unk>.

Derik: We've been saying, Bob and I have one we've been talking to.

Derik: About as you know we have a good set of projects announced we've got them funded.

Speaker Change: But we have the current projects funded.

Speaker Change: We bring in R&D from 80 different suppliers, so it's not like.

Derik: Some of them are fairly big.

Speaker Change: We have to do this we've we've long believed that it gave us.

Derik: Couple more one of them for our 100%.

Speaker Change: We have places to put this <unk> puts us in a little bit different position, because we have millions of gallons, where we can insert this low.

We like we like having the six projects now working to optimize those bringing these other two large projects on.

Speaker Change: Dairy RMG in the California and moved some of the other fuel out so it makes a lot of sense for us for all of our own destiny.

Derik: Those two projects.

Derik: Together, we will be.

Derik: <unk> 50000, milking cows, so together they are pretty big and then the Mas.

Speaker Change: But I don't know that will be.

Speaker Change: I'm not sure that we are that interested as we sit here right at this moment with the lack of clarity on some of these things that.

Speaker Change: I don't think you have to worry about structuring the rubber band to tide here and doing more greenfield projects certainly until we see how R&D shakes out relative to kind of the movement of.

Derik: That we would be.

Speaker Change: Doing greenfield projects.

Speaker Change: These advanced clean technologies.

Speaker Change: We always we get to look at a lot of different deals we have seen some of our friends in the business Wonder if they wanted to go forward. So if there is good opportunities that come our way we will look at it.

Speaker Change: Terrific and then with respect to <unk> 45, the guidance the initial guidance from Treasury understates the value of dairy R&D as you noted based on the average Ci assigned for animal manure.

Speaker Change: But we have the current projects funded.

Speaker Change: I guess based on your conversations that youre, having with industry trade organizations and the government how would you frame the likelihood of a positive revision.

Speaker Change: We bring in R&D from 80 different suppliers, so it's not like.

Speaker Change: We have to do this we've we've long believed that it gave us.

Speaker Change: We have places to put this <unk> puts us in a little bit different position, because we have millions of gallons, where we can insert this low.

Speaker Change: Well.

Speaker Change: I think.

Speaker Change: Not to.

Speaker Change: As you would expect those in the industry believe that we are not receiving what we should have got in there.

Speaker Change: Dairy RMG in the California and move some of the other fuel out so it makes a lot of sense for us.

Speaker Change: Well I think most of us that work with California, and other places just believed that they missed the mark.

All of our own destiny.

I don't know that will be.

Speaker Change: Now can you imagine they decided to use methane calculation for manure that we don't use.

Speaker Change: I don't think you have to worry about structuring the rubber band too tight here.

Speaker Change: And doing more greenfield projects, certainly until we see how R&D shakes out relative to kind of the movement of.

Speaker Change: It's sort of like the gang that couldn't shoot straight I mean, it's kind of strange. So so you have to wonder if they just wanted to limit.

These advanced clean technologies.

Speaker Change: R&D.

Speaker Change: Terrific and then with respect to 45 the guidance the initial guidance from Treasury understates the value of dairy R&D as you noted.

Speaker Change: And limit the credit that came our way because they were trying to help other advanced technologies that would be my suspicion.

Speaker Change: Just on the average CIO Si for animal manure I.

Speaker Change: So I think our case is going to be fairly easily made that.

Speaker Change: I guess based on your conversations that youre, having with industry trade organizations and the government how would you frame the likelihood of a positive revision.

Speaker Change: They.

Speaker Change: They set the wrong greet model.

Speaker Change: Now I guess the bigger question is.

Speaker Change: Well.

Speaker Change: Do they want to do they want to encourage this kind of business.

Speaker Change: I think.

Speaker Change: Not to be.

Speaker Change: As you would expect those in the industry believe that we are not receiving what we should have got in there.

Speaker Change: And what wiggle room do they have to.

Speaker Change: Two.

Speaker Change: Eliminated altogether or now this was passed.

Speaker Change: Well I think most of us that work with California, and other places just believed that they missed the mark.

Speaker Change: In la so we'll kind of see how that shakes out we do have congressional support for this you're going to launch.

Speaker Change: Now can you imagine they decided to use methane calculation for manure that we don't use.

A lot of us forget with all the activity with the New administration of 30 days and there still is a congress and they still do have a view on this and they still it is bipartisan.

Speaker Change: It's sort of like the gang that couldn't shoot straight I mean, it's kind of strange so so yeah.

I have to wonder if they just wanted to limit.

Speaker Change: Just today I would say just while we were you can get kind of down in the mouth about this just today the Trump administration.

Speaker Change: R&D.

Speaker Change: And limit the credit that came our way because they were trying to help other advanced technologies that would be my suspicion.

Speaker Change: Promulgated a rule on ethanol.

Speaker Change: Yes.

Speaker Change: So I think our case is going to be fairly easily made that they.

Speaker Change: Upholding a biden era, 15%.

Speaker Change: Ethanol.

Speaker Change: Hey.

Speaker Change: They set the wrong greet model.

Speaker Change: Increased so.

Speaker Change: Increase in ethanol so I do believe that the Trump administration supports these renewable fuels they support.

Speaker Change: Now I guess the bigger question is.

Speaker Change: Do they want to do they want to encourage this kind of business.

Speaker Change: And what wiggle room do they have to.

Speaker Change: The dairy farm farmers Red states they understand this.

Speaker Change: Two.

Speaker Change: Eliminated altogether or.

Speaker Change: We had good relations with the first Trump administration. So we will have good relationship here and I think they'll listen to us.

Speaker Change: This was passed.

Speaker Change: So we'll kind of see how that shakes out we do have congressional support for this you got a lot of us forget with all the activity with the New administration of 30 days and there still is a congress and they still do have a view on this and they still it is bipartisan.

Speaker Change: And so im somewhat up.

Speaker Change: Optimistic.

On 45 Z getting resolved now the FTC I'm actually more optimistic that that the FTC will be resolved except.

Speaker Change: Just today I would say just while we were you can get kind of down in the mouth about this just today the Trump administration.

Speaker Change: <unk>.

Speaker Change: The Big Beautiful Bill Theres, just a lot of moving parts.

Speaker Change: On how thats going to get sorted out with cuts in military spending in different energy things in and government reductions.

Speaker Change: Yes.

Speaker Change: Promulgated a rule.

Speaker Change: Ethanol.

Speaker Change: Upholding a biden era, 15%.

Speaker Change: We're in there competing for space and so.

Speaker Change: Ethanol.

Speaker Change: Increase so so increase in ethanol so.

Speaker Change: And kind of normal times I would say I think it was sort of a no brainer to get that extended.

Speaker Change: I do believe that the Trump administration supports these renewable fuels they support.

Speaker Change: So we're on it.

Speaker Change: And the industry is on it.

Speaker Change: We've sent the industry.

Speaker Change: The dairy farm farmers Red states they understand this.

Speaker Change: Letter with 450 signatories supporting.

Speaker Change: We had good relations with the first Trump administration. So we will have good relationship here and I think they'll listen to us.

Speaker Change: The FTC re adoption, so I feel kind of.

Speaker Change: Like there's a lot of support.

Speaker Change: And so im somewhat up.

And we will have this kind of see how it shakes out.

Speaker Change: Domestic.

Speaker Change: Great. Thanks, again for your update and taking my questions.

Speaker Change: On 45 Z getting resolved now.

Speaker Change: Yes, you bet.

Speaker Change: Yes.

Speaker Change: See I'm actually more optimistic that that the FTC will be resolved except.

Speaker Change: We'll move next to Matthew Blair with Tpa.

Speaker Change: Your line is open.

Speaker Change: <unk>.

Speaker Change: The Big Beautiful Bill Theres, just a lot of moving parts.

Matthew Blair: Thank you and good afternoon, hopefully you can hear me okay.

Speaker Change: I wanted to ask about the unit.

Speaker Change: On how thats going to get sorted out with cuts in military spending in different energy things in and government reductions.

Matthew Blair: Great.

Matthew Blair: I wanted to ask about the unit economics for the <unk>.

Matthew Blair: And then from your perspective, what kind of what kind of premium are you seeing out there and how many years, but it takes a user to pay back that premium on the engine.

Speaker Change: It's just we're in there competing for space and so.

Speaker Change: And kind of normal times I would say I think it was sort of a no brainer to get that extended.

Speaker Change: So we're on it.

Matthew Blair: When the engine was introduced Matt to you in 2020 for these low volumes, we saw incremental pricing from anywhere from.

And the industry is on it.

Speaker Change: We've sent the industry.

Speaker Change: Letter with 450 signatories supporting.

Matthew Blair: Well, let's put it this way often was the incremental now this would be with a lot of range a lot of tankage onboard remember it's not just the engine and it also is the fuel system that some upwards of $100000 sometimes 115000.

Speaker Change: The FTC re adoption, so I feel kind of.

Speaker Change: Like there's a lot of support.

Speaker Change: And we will have this kind of see how it shakes out.

Speaker Change: Great. Thanks, again for your update and taking my questions.

Matthew Blair: So that's a pretty stout incremental price.

Speaker Change: Yes, you bet.

Matthew Blair: And our conversations with the Oems.

Speaker Change: Okay.

Speaker Change: We'll move next to Matthew Blair with T. P. H your line is open.

Matthew Blair: And with fleets, we were clear that if we can get the pricing down to somewhere closer to 75000, which we still believe this.

Matthew Blair: Thank you and good afternoon, hopefully you can hear me okay.

Speaker Change: I wanted to ask about the unit.

Matthew Blair: It's pretty full pricing.

Matthew Blair: As compared to this incremental pricing to diesel.

Great.

Speaker Change: I wanted to ask about the unit economics for the exit.

Matthew Blair: And with our fuel pricing that we've that we've shown we can get them about a two year payback two years two years to three month payback.

Speaker Change: And then from your perspective, what kind of what kind of premium are you seeing out there and how many years would it take a user to payback that premium on the engine.

Matthew Blair: That seems to be.

Matthew Blair: The fleet's seem to want to listen to that you get much higher than that.

Speaker Change: When the engine was introduced Matt to you in 2020 for these low volumes, we saw incremental pricing from anywhere from.

Matthew Blair: It's it's more it's a more difficult to sell at $120.

Speaker Change: Well, let's put it this way often was the incremental now this would be with a lot of range a lot of tankage onboard remember it's not just the engine and it also is the fuel system has some upwards of $100000 sometimes 115000.

Speaker Change: Fleeces Scott Thanks.

Matthew Blair: Like that's just too much.

Speaker Change: All we know.

Speaker Change: Now we also know that when these when this first started in the refuse business a long time ago. So inflation is different.

Speaker Change: Economics for difference.

Speaker Change: So that's a pretty stout incremental price.

Speaker Change: We had a $55 to $60000 incremental.

Speaker Change: And our conversations with the Oems.

Speaker Change: And with fleets, we were clear that if we can get the pricing down to somewhere closer to 75000, which we still believe this.

Speaker Change: $200000 trash truck back in the day.

Speaker Change: Today of about $29000 or incremental.

Speaker Change: Nine leader with the fuel package on a modern day fueled trucks under $380000.

Speaker Change: It's pretty full pricing.

Speaker Change: As compared to this incremental pricing to diesel.

Speaker Change: Refuse truck.

Speaker Change: And with our fuel pricing that we've that we've shown we can get them about two year payback two years two years to three month payback.

Speaker Change: So it's come way in as a percent percentage so like 9%.

Speaker Change: And it gets within a one year payback.

Speaker Change: That seems to be.

Speaker Change: Six months.

Speaker Change: So I don't know that Theres any reason why we have to have a 75% I mean today, a nine liter engine for the transit buses and for the trash trucks. They have no incremental cost the engine is cheaper than diesel.

Speaker Change: Fleet seem to want to listen to that you get much higher than that.

It's it's more it's more difficult to sell at $120000 I mean, Felicia Scott.

Like that's just too much.

Speaker Change: So maybe this is why Cummins years ago in their headquarters a couple of times said that they saw no reason why you couldnt be at 25000 units.

Speaker Change: No.

Speaker Change: We also know that when these when this first started in the refuse business a long time ago. So inflation is different.

Speaker Change: They said that you really needed to get to that to get to that is probably because they understand.

Speaker Change: Economics are different.

Speaker Change: <unk>, we had a $55 to $60000 incremental.

Speaker Change: The price of what happens when they manufacture that number of events.

Speaker Change: On a $200000 trash truck back in the day.

Speaker Change: Yeah.

Speaker Change: Today of about $29000 of incremental four.

Speaker Change: So okay.

Sort of I think that you were sort of we kind of know what we know where we need to be we have some flexibility on the fuel price.

Speaker Change: <unk> nine leader with the fuel package on a modern day fueled trucks under $380000.

Speaker Change: Refuse truck.

Speaker Change: We have by and by some of the Oems. We work, we're working closely with the dealers, making sure that.

Speaker Change: So it's come way in as a percent percentage so like 9%.

Speaker Change: Nobody is trying to clip too much.

Speaker Change: And it gets within one year payback less six months.

Speaker Change: And our friends at the fuel system and I think we're all kind of trying to row, the boat or about the same right now coming seems to understand that too.

Okay. Thanks for all the color and then my follow up for the six operating dairy LNG plants.

Speaker Change: And then just in regards to the negative EBIT guide for 2025.

Speaker Change: So maybe this is why Cummins years ago in their headquarters a couple of times said that they saw no reason why you couldnt be at 25000 units.

Speaker Change: I understand theres going be some costs in Idaho, but for those six operating very LNG plants do they currently have CFS.

They said that you really needed to get to that to get to that is probably because they understand the price of what happens when they manufacture that number of events.

Speaker Change: Pathways approved or is one of the headwinds that you are still waiting for carb to grant those pathways.

Speaker Change: Stan.

Speaker Change: So okay.

Speaker Change: But.

Speaker Change: Sort of I think that you were sort of we kind of know what we know where we need to be we have some flexibility on the fuel price, we have by and by some of the Oems. We work, we're working closely with the dealers, making sure that nobody is trying to click too much.

Speaker Change: While they do just on a temporary basis.

Speaker Change: No.

Speaker Change: That.

Speaker Change: That does inform your value that youre going to get.

Speaker Change: So we are waiting for them that provisional if you will.

Speaker Change: Okay.

Speaker Change: Those might come in sometime during spring 2025.

Speaker Change: And our friends at the fuel system and I think we're all kind of trying to row. The boat about the same right now it comes seems to understand that too.

Presumably be.

Speaker Change: Okay.

Speaker Change: Yeah, Yeah, so we're still a little bit frankly in that ramp up mode.

Speaker Change: Okay. Thanks for all the color and then my follow up for the fixed operating dairy LNG plants.

Speaker Change:

Speaker Change: And I mean, which is going well I mean, we have the.

Speaker Change: One of those is.

Speaker Change: Darrin, we hadn't in del Rio Texas in that.

Speaker Change: And then just in regards to the negative EBIT guide for 2025.

Speaker Change: We're encouraged by that because the performance on that one is.

Speaker Change: I understand theres going to be some costs in Idaho, but for those six operating very LNG plants do they currently have CFS.

Speaker Change: That's positive.

Speaker Change: And we've seen it.

Speaker Change: Seen it improve if you will based on.

Speaker Change: Pathways approved or is one of the headwinds that youre still waiting for carb.

Speaker Change: Certain.

Speaker Change: Improvements that we've made as our.

Grant those pathways.

Speaker Change: Engineering and our group that we have looking at these.

Speaker Change: But.

Speaker Change: While they do just on a temporary basis.

Speaker Change: Has employed some.

Speaker Change: Some efficiencies there and it's happening so we're very encouraged with that.

Speaker Change: No.

Speaker Change: That.

Speaker Change: That does inform your value that youre going to get.

The other five projects that the same thing will happen because pretty much they.

Speaker Change: So we are waiting for them that provisional if you will.

Speaker Change: They operate the same just maybe the manures a little different but.

Okay, and then those might come in sometime during spring 2025.

Speaker Change: Operationally they are doing it so we're encouraged by that but you do have to go through it didn't happen overnight.

Speaker Change: Presumably be flip side okay.

Speaker Change: Yes, yes, yes, so we're still a little bit frankly in that ramp up mode.

Speaker Change: Great. Thank you very much.

Speaker Change: Yes.

Speaker Change: Well move next to Craig Shere with the Tuohy Brothers Your line is open.

Speaker Change: And I mean, which is going well I mean, we have the.

Speaker Change: One of those is.

Speaker Change: Yeah.

Speaker Change: Darrin, we had in del Rio Texas in that.

Speaker Change: Hi.

Speaker Change: Andrew if I can answer the American Sean you seem to suggest.

Speaker Change:

Speaker Change: We're encouraged by that because the performance on that one is.

Speaker Change: Just.

Speaker Change: There should be a good clarity around the initial uptake on the <unk> 15 liter engines.

Speaker Change: That's positive.

Speaker Change: And we've seen it we've.

Speaker Change: <unk> seen it improve if you will based on.

Speaker Change: At least in the breadth of our fleet.

Certain.

Speaker Change: <unk> that we've made as our.

Speaker Change: And then that would.

Speaker Change: Translate into a lot of.

Speaker Change: Engineering and our group that we have looking at these.

Speaker Change: Prospective hard.

Speaker Change: <unk> employed some.

Speaker Change: Fuel demand growth in the 26 27 and beyond.

Speaker Change: Some efficiencies there and it's happening so we're very encouraged with that debt.

Speaker Change: I guess my question given that color as well.

Speaker Change: The other five projects that the same thing will happen because pretty much they.

Speaker Change: Obviously that level, obviously Amazon plans years ahead, what makes truck that agreement with new some years ago.

Speaker Change: They operate the same just maybe the manures a little different but.

Speaker Change: Operationally they are doing it so we're encouraged by that but you do have to go through it didn't happen overnight.

Speaker Change: And these fleets if theyre going to do more than 10 or 20.

Speaker Change: Uh huh.

Speaker Change: Great. Thank you very much.

Speaker Change: Similarly plan ahead, even if that's the only for deliveries in 2027 and 2028 so.

Speaker Change: Yes.

We'll move next to Craig Shere with the Tuohy Brothers Your line is open.

Speaker Change: I guess I'm trying to drive that Europe us about the timeline.

Speaker Change: Hi.

Speaker Change: <unk>.

Speaker Change: Fleets are going to have to live by.

Speaker Change: Andrew if I can answer the American Sean you seem to suggest.

Speaker Change: They eventually want to how 100 or more units.

Speaker Change: There should be good clarity around the initial uptake on the Cummins 15 liter engines.

Speaker Change: No.

Speaker Change: Well.

Speaker Change: I don't know Craig here, Here's the way I'd think about it.

Speaker Change: And the breadth of.

Speaker Change: Cummins tells US there is no trick for them to satisfy the demand.

Speaker Change: Our fleet demand and then that would <unk>.

Speaker Change: Translated into a lot of.

Speaker Change: The Jamestown the.

Speaker Change: Prospective hard.

Speaker Change: Jamestown, New York plant can turn out many many thousands of units.

Speaker Change: Fueled demand growth in the 26 27 and beyond.

Speaker Change: We have two rather large up fitting friends for the fuel system business. They will require a little bit of time I mean, you can't eat them next year and say, we need 20000 units in terms of tanks at all but they will have time to ramp up.

Speaker Change: I guess my question given that color as well.

Speaker Change: Obviously, a little obviously Amazon plans years ahead, when they struck that agreement with new some years ago.

Speaker Change: And these fleets if theyre going to do more than 10 or 20.

Speaker Change: Amazon.

Speaker Change: Similarly plan ahead, even if that's the only for deliveries in 2027 and 2028 so.

Speaker Change: Board and received no. These 12 liters right.

Speaker Change: I guess I'm trying to drive at Europe.

Speaker Change: <unk> 2500 units.

Speaker Change: The timeline.

Speaker Change: And I don't know better part of a year year and a half.

Speaker Change: The fleets are going to have to live by.

Speaker Change: Now it took us a while to build the stations and for them to get them in and get them organized that that takes some time, but.

Speaker Change: They eventually want to how 100 or more units.

Speaker Change: No I really think Greg.

Speaker Change: Well.

Speaker Change: We're on that it is that I think they've got a walk before they run so.

Speaker Change: I don't know Craig Here's the way I think about it.

Cummins tells US there is no trick for them to satisfy the demand.

Speaker Change: I'm just using this as a example, I don't want them to get.

Speaker Change: Worried but J B hunt is very well likely to take 50 or 100 units before they buy 500 units.

Speaker Change: The Jamestown the.

Speaker Change: Jamestown, New York plant can turn out many many thousands of units.

Speaker Change: And J B Hunt buys I don't know three.

Speaker Change: We have two rather large up fitting friends for the fuel system business. They will require a little bit of time I mean, you can't hit next year and say, we need 20000 units in terms of tanks at all but they will have time to ramp up.

Speaker Change: Three I think.

Speaker Change: Just to replace they buy about 3000 units a year.

Speaker Change: So I kind of think thats the way its going to go that youre going to see these these fleets take a 100 or so ish 50.

Speaker Change: <unk> hundred 50, whatever it is.

Speaker Change: This this year.

Speaker Change: Amazon.

Speaker Change: Board and received no. These 12 leaders right.

Speaker Change: And hopefully the experience is good.

Speaker Change: Then we will start having some discussions about them using minimum on certain lanes, where we have stations, but then there will be more discussions about hey, we're going to want.

Speaker Change: 2500 units.

Speaker Change: And I don't know better part of a year year and a half.

Speaker Change: Now it took us a while to build the stations and for them to get them in and get them organized.

Speaker Change: Going to want stations that are five terminals in California, So that will give us some time in 2006 to build those and bring those on but I see it as sort of an orderly process to get up to kind of their buy and that's what happened in the trash business.

Speaker Change: That takes some time, but.

Speaker Change: No I really think Greg.

Speaker Change: We're on that it is that I think they've got a walk before they run so.

Speaker Change: Im just using this as an example, I don't want them to get.

Speaker Change: Worried but J B hunt is very well likely to take 50 or 100 units before they buy 500 units.

Speaker Change: I mean waste management.

<unk> escape me now, but they started out ordering 100 or 200, and then they kind of work their way to <unk>.

Speaker Change: And J B Hunt buys I don't know.

Speaker Change: <unk> I think.

Speaker Change: Buying as many as they would buy in a given year.

Speaker Change: Just replace they buy about 3000 units a year.

Speaker Change: Because they knew it was a product that they wanted to put into the fleet.

Speaker Change: So I kind of think that's the way it's going to go that youre going to see these these fleets take a 100 or so.

Speaker Change: So I don't know if im answering your question or if I'm being dense, but thats the way I see this working that's why you need the breadth.

Speaker Change: <unk>.

Speaker Change: <unk> hundred 50, whatever it is.

Speaker Change: This this year.

Speaker Change: You need you need you need 50 fleets 40 fleets.

Speaker Change: And hopefully the experience is good.

Speaker Change: Bringing this into their normal purchase cycle.

Speaker Change: They have a real robust market.

Speaker Change: It sounds like it may be a stretch to presume that we're going to get.

Speaker Change: More multi year Amazon like very chunky fuel supply agreements this year, maybe thats more sometime next year.

Speaker Change: Yeah, well I think that's what I was trying to say youre not going to see big chunky.

Speaker Change: I mean waste management.

Speaker Change: <unk> escape me now, but they started out ordering 100 or 200, and then they kind of work their way too.

Speaker Change: 2000 truck 20 million gallon a year type orders this year.

Speaker Change: Buying as many as they would buy in a given year.

Speaker Change: No I was just thinking if they are planning three years ahead.

Speaker Change: Because they knew it was a product that they wanted to put into the fleet.

Speaker Change: It could start in the Amazon agreement with you involved.

Speaker Change: So I don't know if im answering your question or if I'm being dense, but thats the way I see this working that's why you need the breadth.

Speaker Change: Years of building out space, all with well look yes, yes.

Speaker Change: Trying to.

Speaker Change: Youre exactly right look we're talking to fleets about okay, where would you do with which planes, where do you want fueling which one works okay.

Speaker Change: You need you need you need 50 fleets 40 fleets.

Speaker Change: Bringing this into their normal purchase cycle.

Speaker Change: Can use our station Thats currently in outside of Scottsdale, but you really want to out you haven't really big terminal there so that would probably be in place.

Speaker Change: They have a real robust market.

Speaker Change: It sounds like it may be a stretch to presume that we're going to get.

Speaker Change: Do you want now so we're doing all of that and yes, and we've been doing that and we have really re tooled and refocused our our salespeople. They each have a very set number of these people. These fleets that can buy in these numbers that have big fleets.

Speaker Change: More multi year Amazon like very chunky fuel supply agreements. This year, maybe that's more sometime in next year.

Speaker Change: Yes, well I think that's what I was trying to say youre not going to see big chunky.

Speaker Change: They are working and yes, they are doing to sort of multi year plan.

Speaker Change: 2000 truck 20 million gallon a year type orders this year.

Speaker Change: But we think it's going to kind of start out start out in the small we're just trying to set the expectation that.

Speaker Change: No I was just thinking if they are planning three years ahead.

Speaker Change: You don't expect big Chunky announcements.

Speaker Change: They could start in the Amazon agreement with you involved years of building out stay so well look yes, yes.

Speaker Change: This year I would love to be surprised by somebody.

Speaker Change: But I think it's going to I think it will be very important for the market and really important for our company. If we see some of these very significant fleet start you start seeing these 50 50 truck orders pop out.

Speaker Change: Not trying to.

Speaker Change: Youre exactly right look we're talking to fleets about okay, where would you do with which planes, where do you want fueling which one works. Okay. You can use our station. That's currently in outside of Scottsdale, but you really want out you haven't really big terminal there so that would probably be a place.

Speaker Change: Gotcha.

Speaker Change: We are putting we are putting volume in <unk>.

Speaker Change: We're not.

Speaker Change: Do you want now so we're doing all of that and yes that and we've been doing that and we have really re tooled and refocused our our salespeople. They each have a very set number of these people. These fleets that can buy in these numbers that have big fleets, they're working and then.

Speaker Change: We're not.

Speaker Change: Thank you you just not going to happen I mean, we've got in our goals and in our budget. We've got millions of gallons for the extra 15 and even for this year and of course, that's a run rate it will be better for next year, but we know we've got to get this breadth go on this year to then have a chance of it.

And yes, they are doing to sort of multi year plan.

Speaker Change: Doubling up tripling up for next year.

Speaker Change: Gotcha and then my last one.

Speaker Change: But we think it's going to kind of start out start out in the small we're just trying to set the expectation that you don't expect big chunky announcements.

Speaker Change: Maybe more for Bob.

Speaker Change: As to <unk>.

Speaker Change: 2025 guidance presumptions are on margin of the pump.

Speaker Change: This year I'd love to be surprised by somebody.

Speaker Change: But I think it's going to I think it will be very important for the market and really important for our company. If we see some of these very significant fleet starch you start seeing these 50 50 truck orders pop out.

Speaker Change: Our thoughts are conservative enough.

Speaker Change: Presume pricing power versus diesel and to the degree you do get some increased utilization of existing terminals will be initial dribs and drabs on these 15 liter engine orders.

Speaker Change: And we are we are putting we are putting volume in we're not.

Speaker Change: How much could that really contribute in terms of operating leverage.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: We're not.

Speaker Change: We don't we don't see significant.

Speaker Change: Thank you can you talk App and I mean, we've got in our goals and in our budget we have got.

Speaker Change: Changes in the environment that we've been kind of.

Speaker Change: The gallons for the extra 15, and even for this year and of course, that's a run rate it will be better for next year, but we know we've got to get this breadth go on this year.

Speaker Change: Running relative to kind of diesel and Nat gas and our pricing.

Speaker Change: At the pumps and the cost of natural gas I mean, it's we see it being similar to <unk>.

Speaker Change: Have a chance of that.

Speaker Change: We have doubling up tripling up for next year.

Speaker Change: What it is today low natural gas prices oil will probably stay a little bit high and so.

Speaker Change: Gotcha and then my last one.

Speaker Change: Maybe for Bob.

Speaker Change: We're in an okay range when we're in that 20 to 40.

Speaker Change: As to.

Speaker Change: Yes.

Speaker Change: 2025 guidance presumptions are on margin at the pump.

Speaker Change: <unk> <unk>.

Speaker Change: <unk> 40 point spread between oil and Nat gas.

Speaker Change: Thoughts are conservative enough.

Speaker Change: So we kind of see that.

Speaker Change: Presume pricing power versus diesel.

Speaker Change: Continuing on.

Speaker Change: And to the degree you do get some increased utilization of existing terminals would be initial dribs and drabs on these 15 liter engine orders.

Speaker Change: Not going way up going necessarily down.

Speaker Change: The.

Speaker Change: And then on the on the 15 liter.

Speaker Change: How much could that really contribute in terms of operating leverage.

Speaker Change: No I think.

Speaker Change: There'll be there'll be some contribution there because those were those gallons.

Speaker Change: Yes.

Speaker Change: We don't we don't see significant.

Speaker Change: We will be kind of our sweet spot of <unk>.

Changes in the environment that we've been kind of running relative to kind of diesel and Nat gas and our pricing.

Speaker Change: Public access fueling.

Speaker Change: We will give them, we'll have good pricing but.

Speaker Change: We are we flow R&D and so theres economics to us.

Speaker Change: At the pumps and the cost of natural gas I mean, it's we see it being similar to <unk>.

Speaker Change: Now in other ways as well so that'll be that'll be good but.

Speaker Change: What it is today low natural gas prices oil will probably.

Youre a little bit towards the back end of the year, you are kind of spread out and so.

Speaker Change: Stay a little bit high and so.

Speaker Change: We're in an okay range when we're in that 20 to 40.

I'm not going to say, it's going to move the needle hugely on the economic side, but it will I mean look that's.

Speaker Change: <unk> 40.

Speaker Change: <unk> 40 point spread between <unk>.

Speaker Change: It's good money.

Speaker Change: Boil and Nat gas.

Speaker Change: I look really more at this whole adoption thing and the breadth of adoption is.

So we kind of see that.

Speaker Change: Continuing on.

Speaker Change: I mean, you're kind of starting from.

Speaker Change: Not going way up going necessarily down.

Speaker Change: From a market that we had zero access too.

Speaker Change: The.

Speaker Change: With trucks that utilize a 15 liter diesel.

Speaker Change: And then on the on the 15 liter.

Speaker Change: Every single one of them that makes that decision to go into the <unk> is it is a huge telling sign in our view.

Speaker Change: No I think.

Speaker Change: There'll be there'll be some contribution there because those those gallons.

Speaker Change: I'm more interested in.

It will be kind of our sweet spot of.

Speaker Change: 2025 fleets taken on those engines, because it's like the money will come on that.

Speaker Change: Public access fueling.

Speaker Change: We will give them, we'll have good pricing, but yes.

Speaker Change: We are we flow R&D and so theres economics to us.

Speaker Change: Great.

Speaker Change: No.

One other thing.

Speaker Change: No in other ways as well so that'll be that'll be good but.

Speaker Change: Maybe maybe discussed to the.

Speaker Change: Matthew are.

Speaker Change: Youre a little bit towards the back end of the year, you are kind of spread out and so.

Speaker Change: Eric's question earlier.

Speaker Change: I kind of glossed over it but you know.

Speaker Change: Im not going to say, it's going to move the needle hugely on the economic side, but it will I mean look.

Speaker Change: We add pack or putting the Cummins engine and Packer. So that's.

Speaker Change: And worth and Peterbilt, Thank you Bob.

Speaker Change: It's good money.

Speaker Change: I look really more at this whole adoption thing and the breadth of adoption is.

Speaker Change: This year, we have freightliner with Freightliner.

Speaker Change: But not until about April and May.

Speaker Change: I mean, you're kind of starting from that.

Speaker Change: Does the engine get put into there and the order book opens in but what's important is freightliner is 35% of the market.

Speaker Change: From a market that we had zero access too.

Speaker Change: With trucks that utilize a 15 liter diesel and every single one of them that makes that decision to go into the <unk> as it is a huge telling sign in our view.

Speaker Change: We haven't had that and so a lot of fleets are freightliner fleets.

Speaker Change: I'm more interested in.

Speaker Change: And my friends at Freightliner May kill me, but I mean in terms of pricing is the price points are little lower like sort of describe it as those on bill compared with Cadillac a little bit so it's a little bit lower price point, so that helps on the incremental <unk>.

Speaker Change: 2025 fleets taken on those engines, because it's like the money will come on that.

Speaker Change: Great.

Speaker Change: Yes.

Speaker Change: And.

Speaker Change: No.

Speaker Change: One other thing.

Speaker Change: And some of our fleets are waiting for that Freightliner. So that's an important.

Speaker Change: Maybe maybe discussed to the.

Speaker Change: Matthew or.

Speaker Change: But we were told last year, Hey, look you can't get to these bigger numbers until you have the other OEM and your and Thats Freightliner. So.

Speaker Change: Derek's question earlier.

Speaker Change: I kind of glossed over it but.

We add pack or putting the Cummins engine and Packer. So that's.

Speaker Change: That's all I wanted to embellish, a little bit because we kind of skipped over that.

Speaker Change: And worth and Peterbilt, Thank you Bob.

Speaker Change: Thank you.

Speaker Change: This year, we get Freightliner with Freightliner.

Speaker Change: Yes.

Speaker Change: We'll move next to it.

Speaker Change: But not until about April and May.

Speaker Change: With Scotiabank your line is open.

Speaker Change: Does the engine get put into there.

Speaker Change: Yeah.

Speaker Change: Hi, Andrew and Bob Thanks for taking my questions.

Speaker Change: Your book opens but whats important is freightliner is 35% of the market.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Hello.

Speaker Change: My first question I wanted to ask in your prepared remarks, you talked about about 25 fleets that youre seeing forward so anything five.

Speaker Change: We haven't had that and so a lot of fleets are freightliner fleets.

Speaker Change: And my friends at Freightliner May kill me, but.

Speaker Change: In terms of pricing the price points are little lower sort of describe it as the ozone build compared with Cadillac a little bit so it's a little bit lower price point, so that helps on the incrementals on.

Speaker Change: <unk> with the 15 liter engine.

Speaker Change: I'm curious, if you're able to split that out by now.

Speaker Change: How much of that 25 is existing natural gas fleets versus.

Speaker Change: And in some of our fleets are waiting for that Freightliner. So that's an important.

Speaker Change: Fleets that are completely new to natural gas.

Speaker Change: Betty without doing a big analysis, which my guys can probably do is probably 50 50.

Speaker Change: We were told last year, Hey, look you can't get to these bigger numbers until you have the other OEM veneer and Thats Freightliner so.

Speaker Change: It's.

Speaker Change: It's split about half of them are fleets that we know well we've talked to you for years just haven't operated.

Speaker Change: That's all I wanted to embellish, a little bit because we kind of skipped over that.

Speaker Change: Natural gas because they didn't think that the 12 liter is big enough to snap, but we know them well.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: We talk to them.

Speaker Change: Well move next to Betty.

Speaker Change: And then the other half of our customers.

Speaker Change: Scotiabank Your line is open.

Speaker Change: That we've kind of worked with over the years.

Speaker Change: Yes.

Speaker Change: Hi, Andrew and Bob Thanks for taking my questions.

Speaker Change: Okay. That's helpful do you see it.

Speaker Change: Can you see that 50, 50 split kind of continuing or maybe will have more new new fleets adopting it.

Speaker Change: Okay.

Speaker Change: Hello, My first question I wanted to ask in your prepared remarks, you talked about about 25 fleets that youre seeing forward so anything five feeling.

Speaker Change: I hope, it's the latter right opus new fleets right I mean, we're look we're just scratching the surface. So a better be new right. There. There are thousands of fleets that avenue's natural gas right. So it ought to be.

Speaker Change: Fueling the 15 liter.

Speaker Change: Jim.

Speaker Change: I'm curious, if you're able to split that out by.

Speaker Change: How much of that 25 is existing natural gas fleets versus.

Speaker Change: Now what I am very excited about there was a time when we were just trying to break into this business. You mentioned you don't have to go back about 10 years ago, we thought that heavy duty trucking would only be for drayage.

Speaker Change: Fleets that are completely new to natural gas.

Eddie: Eddie without doing a big analysis, which my guys can probably do is probably 50 50.

Speaker Change: Yes.

Speaker Change: For trucks that operate in imports, we really didn't know if it would work across.

Speaker Change: It's split about half of them are fleets that we know well we've talked to you for years just to have an operated.

Speaker Change: Across the country.

Speaker Change: Natural gas because they didn't think that the 12 liter is big enough snap, but we know them well.

Speaker Change: Or super regional so we've come a long way though.

Speaker Change: In a while.

Speaker Change: We talk to them.

Speaker Change: And we were always sort of working with the smaller fleets to 500 truck fleets.

Speaker Change: And then the other half for customers.

Speaker Change: That we've kind of worked with over the years.

Speaker Change: Okay. That's helpful do you see it.

Speaker Change: Look at this last year I mean, it's America's largest fleets that are that have tested this and have taken extra fifteens into their fleet and tested and that we're talking to now so it's the largest fleets that by a lot of trucks.

Speaker Change: Can you see that 50, 50 split kind of continuing or maybe you will have more new new fleets adopting it.

Speaker Change: That by thousands of trucks a year just to replace.

Speaker Change: So we're we're working with those that could really.

Now what I am very excited about there was a time when we were just trying to break into this business.

Speaker Change: This market.

Speaker Change: In a bigger way.

That's very exciting for us.

Speaker Change: You don't have to go back about 10 years ago, we thought that heavy duty trucking would only be for drayage.

Speaker Change: Okay great.

Speaker Change: For my second question I wanted to ask about the quarter.

Speaker Change: For trucks that operate in imports, we really didn't know if it would work across.

Speaker Change: Looking at the income tax I think that came in a bit.

Speaker Change: Higher or a bit more of a charge than I was expecting I was curious if theres anything specific there.

Speaker Change: Across the country.

Speaker Change: Or super regional so we've come a long way though.

Speaker Change: In a while.

Speaker Change: I would say nothing specific other than.

Speaker Change: But.

Speaker Change: And we were always sort of working with the smaller fleets to 500 truck fleets.

Speaker Change: Good old fashion tax accounting.

Speaker Change: And taken care of.

Speaker Change: Various sections of the of the tax code. If you will some of I think one of the things that kind of came into play more as as we evolve this.

Speaker Change: Is the 163 J interest deduction considerations, so stuff like that as kind of.

That by thousands of trucks a year just to replace.

Speaker Change: Non cash, but in the course of that you end up.

Speaker Change: So we're we're working with those that could really.

Speaker Change: Creating some.

Speaker Change: Some deferred tax liabilities that don't depending on what the item is that do not get covered by a deferred tax asset.

Speaker Change: This market.

Speaker Change: In a bigger way.

Speaker Change: That's very exciting for us.

Speaker Change: Okay great.

You end up kind of creating.

Speaker Change: For my second question I wanted to ask about the quarter.

Speaker Change: A tax provision expense and so that said, it's not a cash payment.

Speaker Change: Looking at the income tax I think that came in a bit.

I don't know that we would be paying any taxes anytime soon.

Speaker Change: Higher or a bit more of a charge than I was expecting a curious if theres anything specific there.

Speaker Change: So off show up Bob.

Speaker Change: Great. Thanks, I want to go further on that one.

Speaker Change: I would say nothing specific other than.

Speaker Change: And as you and I've talked about a J.

Speaker Change: When I talk about so.

Speaker Change: Good old fashion tax accounting.

Speaker Change: That's what it is.

Speaker Change: And taking care of.

Speaker Change: Thank you.

Speaker Change: Thanks, Pat and good catch betting on that I appreciate someone looking at the tax provision.

Speaker Change: Various sections of the of the tax code. If you will some of I think one of the things that kind of came into play more as as we've evolved as.

Speaker Change: Yeah.

Speaker Change: We'll move next to Jason <unk> with Cowen Your line is open.

Speaker Change: Is the 163 J interest deduction considerations, so stuff like that as kind of.

Speaker Change: Yeah, Hi, thanks for taking my questions.

Speaker Change: Non cash, but in the course of that you end up.

Speaker Change: The first one I wanted to ask is on 2025 capex guidance for upstream.

Speaker Change: Creating some.

Speaker Change: Some deferred tax liabilities that don't depending on what the item is that do not get covered by a deferred tax asset.

Speaker Change: Development of $104 million is that all being funded within the <unk> or is there a capital contribution coming from clean energy itself towards that $104 million.

Speaker Change: You ended up kind of creating.

Speaker Change: A tax provision expense and so that said, it's not a cash payment.

Speaker Change: Yes.

Speaker Change: Part of that would be about 60% of that wood.

Speaker Change: I don't know that we would be paying any taxes anytime soon.

Speaker Change: So off show up.

Speaker Change: It would be a contribution into a JV.

Speaker Change: Great. Thanks, I want to go further on that.

Speaker Change: And the other piece would be.

Speaker Change: For a project that we have a 100% on our balance sheet.

Speaker Change: And as you and I've talked about a J.

Speaker Change: You're talking about so.

Speaker Change: Okay, 64, and $5 35, yes.

Speaker Change: That's what it is.

Speaker Change: Got it great and then myeloma, just going back to the <unk> 45.

Speaker Change: Thank you.

Speaker Change: Thanks, Pat and good catch betting on that I appreciate someone looking at the tax provision.

Speaker Change: It seems that most companies feel like there is enough guidance out there to give them safe Harbor to book the <unk>.

Speaker Change: Yes.

Speaker Change: We'll move next to Jason <unk> with Cowen Your line is open.

Speaker Change: Credit assets put forth in the pre draft regulation it sounds like.

Jason: Yes, thanks for taking my questions.

Jason: So first of all I wanted to ask is on 2025 capex guidance for upstream.

Speaker Change: Energy fuels is not in that camp, there's a bit more hesitant.

Speaker Change: Towards that credit. So is there some specific clarification that you want to see before you're comfortable accruing that credit on your on your income statement.

Jason: Development of $104 million is that all being funded within the Jv's or is there a capital contribution coming from clean energy itself towards that $104 million.

Speaker Change: Well, we do want to see more.

Jason: Yes.

Jason: Part of that would be about 60% of that wood.

Speaker Change: Basically more along the lines of a kind of more of a finalization. We know there is a big comment process going through so.

Jason: It would be a contribution into a JV.

Jason: And the other piece would be.

Speaker Change: We feel like there is.

Jason: For a project that we have the 100% on our balance sheet.

Speaker Change: Still uncertainty there.

Speaker Change: Okay.

Jason: Okay, 64, and $5 35.

Jason: Jason if they saw how do you look at it.

Speaker Change: Got it great and then my other one just going back to the 45 Z because it seems that most companies feel like there is enough guidance out there to give them safe Harbor to book.

Speaker Change: Yes.

Speaker Change: Look we're watching that.

Speaker Change: But just as of right now it's uncertain.

Speaker Change: It'd be nice if there is some more certainty to it.

Speaker Change: Finalize it and say this is ed thanks for the comments, while then we'll react to that.

Speaker Change: Credit assets put forth in the pre draft regulation it sounds like clean energy fuels is not in that camp, there's a bit more hesitant.

Speaker Change: Mhm.

Speaker Change: Okay, and then just on.

Speaker Change: How the company books.

Speaker Change: Towards booking that credit. So is there some specific clarification that you want to see before you're comfortable accruing that credit on your on your income statement.

Speaker Change: Sure.

Speaker Change: The 45 Z most of that will being with in the upstream portion of the business you booked anything within the downstream.

Speaker Change: Well, we do wanted to see more.

Speaker Change: No it'll be in the upstream.

Speaker Change: Basically more along the lines of a kind of more of a finalization. We know there is a big comment process going through so.

Speaker Change: Okay.

Speaker Change: Yeah, it's in the upstream.

Speaker Change: Okay, great. Thanks.

Speaker Change: The answers.

Speaker Change: We feel like there is.

Speaker Change: Okay. Thank you thanks, Jason.

Speaker Change: Still uncertainty there.

Andrew: And this does conclude the Q&A session for today's call I will now turn it back to Andrew <unk> for any additional or closing remarks.

Speaker Change: Okay.

Jason: Jason if they saw how do you look at it.

Speaker Change: If.

Speaker Change: Who knows but we're watching that.

Andrew: Thank you operator, and thank you everyone for joining us today, and we look forward to.

Speaker Change: But just as of right now it's uncertain.

Andrew: What do you know how we do in next quarter. Thank you.

Speaker Change: It'd be nice if there is some more certainty to it.

Speaker Change: Finalize it and say this is ed thanks for the comments, while then we'll react to that.

Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.

Speaker Change: Mhm.

Speaker Change: Okay, and then just on how.

Andrew: Okay.

Speaker Change: How the company books.

But 45 Z most of that will being with in the upstream portion of the business you booked anything within the downstream.

Speaker Change: So it'll be in the upstream.

Speaker Change: Yeah, it's in the upstream.

Speaker Change: Okay, great. Thanks, Thanks for the answers.

Speaker Change: Okay. Thank you thanks, Jason.

Speaker Change: Okay.

Andrew: And this does conclude the Q&A session for todays call I will now turn it back to Andrew <unk> for any additional or closing remarks.

Andrew: Thank you operator, and thank you everyone for joining us today, and we look forward to.

Speaker Change: What do you know how we do in next quarter. Thank you.

Andrew: Yeah.

Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time and have a wonderful evening.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Oh.

Speaker Change: [music].

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