Financial Data and Key Metrics Changes - Second quarter adjusted EBITDA was $16.5 million, which is $4.6 million lower compared to the same period last year, impacted by a lower RIN price environment and non-recurring expenses [7][19] - Revenue for the quarter was $80.5 million, up from $71 million in the same period last year, reflecting growth in RNG production and fuel station services [18] - Net income increased to $7.6 million from $1.9 million in Q2 2024 [18] Business Line Data and Key Metrics Changes - RNG fuel segment production reached 1,200,000 MMBtu, a 33% increase year-over-year [8][14] - Fuel Station Services segment EBITDA was approximately $11.2 million, a 30% increase compared to the previous year [8][17] - The company completed the sale of $16.7 million in investment tax credits, contributing to cash flow and earnings [8] Market Data and Key Metrics Changes - The company was added to the Russell 2000, Russell 2000 Value, and Russell 2000 Growth Indices, indicating strong market performance [8] - The policy environment has improved with bipartisan support for RNG, including the extension of the 45Z production tax credit through 2029 [10][11] Company Strategy and Development Direction - The company is focusing on expanding its RNG production assets and fueling station network, maintaining guidance for the year despite lower RIN prices [7][13] - Capital is being allocated to grow the Fuel Station Services segment, which provides predictable cash flow [13][17] - The company is exploring M&A opportunities in a fragmented industry to maximize shareholder value [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational improvements and achieving production results within the lower end of guidance [14][15] - The company is optimistic about the construction of new projects and expects to meet its target of placing 2,000,000 MMBtu into construction in 2025 [16][32] - Management noted that while there are macro headwinds, the overall outlook for RNG adoption is improving [17][27] Other Important Information - The company is investing in strengthening its operational and financial foundation, including compliance with SOX criteria by 2026 [20][21] - Total liquidity as of June 30 was $203.2 million, which includes cash and undrawn credit facilities [21] Q&A Session Summary Question: Changes in competitive landscape for downstream business - Management noted a market shift with major national fleets increasingly engaging in CNG and RNG due to recent policy changes and equipment availability [25][26] Question: Guidance maintenance despite weaker RIN prices - Management highlighted several drivers for maintaining guidance, including RIN purchases, production trends, and expected normalization of non-recurring expenses [36][38] Question: M&A landscape and acquisition opportunities - Management indicated that the industry remains fragmented, presenting opportunities for consolidation, and they are evaluating potential acquisitions to maximize shareholder value [40][41] Question: Timing of returning capital to shareholders - Management emphasized a disciplined approach to maximizing shareholder value and indicated that discussions on returning capital would occur during the upcoming Investor Day [44][45] Question: Growth outlook for Fuel Station Services - Management expressed confidence in the growth of the Fuel Station Services segment, anticipating a pickup in activity in the second half of the year [48][49] Question: Update on landfill gas project with RSG - Management confirmed that development is ongoing and they are finalizing plans for the project, which is expected to contribute to their construction targets [51][52] Question: Balancing investment between upstream and downstream - Management is evaluating opportunities in both upstream and downstream sectors based on risk-adjusted returns and their potential to enhance overall portfolio stability [59][60]

Financial Performance - Second Quarter 2025 Adjusted EBITDA was $16.5 million, a 22% decrease compared to $21.1 million in 2Q24, driven by lower RIN prices, loss of ISCC carbon credits, and non-recurring G&A expense[14, 16, 18] - RNG production for 2Q25 reached 1.2 million MMBtu, a 33% increase compared to 2Q24[14, 16] - Fuel Station Services segment experienced EBITDA growth of 30% compared to 2Q24[16] Liquidity and Capital Allocation - As of June 30, 2025, the company had approximately $203 million in liquidity, including $138 million of unused capacity under the $450 million credit facility, $36 million of unused capacity under the associated revolver, and $29 million in cash, cash equivalents, and short-term investments[21] - Net debt as of June 30, 2025, was approximately $302 million[21] - The company anticipates putting into construction approximately 2.0 million annual MMBtu of RNG annual design capacity in 2025[58] Guidance and Projections - The company maintains full-year 2025 Adjusted EBITDA guidance, projecting between $90 million and $110 million, assuming a $2.60/gallon D3 RIN price[16, 58] - The Adjusted EBITDA projection is based on an RNG production range of 5.0 to 5.4 million MMBtu[58] - Adjusted EBITDA from the Fuel Station Services segment is projected to grow by 30% - 50% compared to 2024[58] Operational Highlights - The company operates 11 RNG facilities with a total RNG annual design capacity of 8.8 million MMBtu[40] - Total volumes sold, dispensed, and serviced in the Fueling Station Services segment reached 145.0 million GGE in 2024 and are projected to reach 202.1 million GGE in 2025[35]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (Unaudited)](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $905.5 million, and the stockholders' deficit improved significantly to $(22.3) million as of June 30, 2025 | Balance Sheet Items (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $123,486 | $117,188 | | **Property, plant, and equipment, net** | $477,063 | $458,258 | | **Total assets** | **$905,537** | **$881,077** | | **Total current liabilities** | $98,233 | $103,596 | | **Total liabilities** | **$432,291** | **$416,045** | | **Redeemable non-controlling interests** | $365,548 | $482,863 | | **Total Stockholders' deficit** | **$(22,302)** | **$(147,831)** | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue increased to $80.5 million, but higher expenses resulted in an operating loss, though net income was boosted by a tax benefit | (In thousands, except per share data) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $80,456 | $70,950 | $165,863 | $135,902 | | **Operating (loss) income** | $(827) | $5,689 | $(2,769) | $9,259 | | **Income tax benefit** | $13,686 | $— | $21,723 | $— | | **Net income** | $7,559 | $1,908 | $8,843 | $2,585 | | **Net income (loss) attributable to Class A** | $800 | $(153) | $565 | $(469) | | **Diluted EPS** | $0.03 | $(0.01) | $0.02 | $(0.02) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations for H1 2025 increased to $21.8 million, while cash used in investing decreased due to lower capital expenditures | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $21,805 | $14,251 | | **Net cash used in investing activities** | $(36,026) | $(54,080) | | **Net cash provided by financing activities** | $18,498 | $15,036 | | **Net increase (decrease) in cash** | $4,277 | $(24,793) | [Notes To Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures cover operating segments, revenue disaggregation, borrowings, related party transactions, and significant legal proceedings - The company is organized into three operating segments: **RNG Fuel, Fuel Station Services, and Renewable Power**[63](index=63&type=chunk) - On May 9, 2025, the Company acquired a **70% interest in CMS RNG LLC**, a new joint venture to operate an RNG facility, which is consolidated as a VIE[59](index=59&type=chunk)[60](index=60&type=chunk) - During Q1 and Q2 2025, the company sold transferable Investment Tax Credits (ITCs) for net proceeds of **$21.7 million**, recorded as an income tax benefit[86](index=86&type=chunk)[88](index=88&type=chunk) - The company is involved in a significant legal dispute with contractor **CEI Builders** over the Central Valley RNG projects, proceeding with arbitration[183](index=183&type=chunk)[187](index=187&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=42&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes financial results, highlighting revenue growth drivers, operational metrics, liquidity, and capital expenditure plans [Overview and Key Factors](index=42&type=section&id=Overview%20and%20Key%20Factors) The company's vertically integrated business converts biogas into RNG and Renewable Power, with performance driven by regulatory incentives - The company is a vertically integrated leader in capturing and converting biogas into low-carbon **Renewable Power and RNG**, and distributing RNG to heavy-duty trucking sectors[198](index=198&type=chunk) - As of June 30, 2025, the company owned and operated **26 projects**: 11 RNG projects with a design capacity of 8.8 million MMBtus/year and 15 Renewable Power projects with a nameplate capacity of 105.8 MW/hour[201](index=201&type=chunk) - Key business drivers include demand for RNG and **Environmental Attributes (RINs, LCFS credits)**, which are heavily influenced by federal and state energy regulations[206](index=206&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Q2 2025 revenue rose 13% YoY to $80.5 million, driven by RNG Fuel and Fuel Station Services, despite a decline in Renewable Power | Revenue by Segment (In thousands) | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **RNG Fuel** | $25,130 | $19,445 | $5,685 | 29% | | **Fuel Station Services** | $47,026 | $39,257 | $7,769 | 20% | | **Renewable Power** | $8,300 | $12,248 | $(3,948) | (32)% | | **Total revenues** | **$80,456** | **$70,950** | **$9,506** | **13%** | - The increase in RNG Fuel revenue was driven by **higher brown gas sales** and contributions from the new Prince William and Polk facilities, partially offset by lower RIN prices[230](index=230&type=chunk) - The decrease in Renewable Power revenue was primarily due to a **$3.2 million loss of revenue** from the termination of an ISCC contract in late 2024[235](index=235&type=chunk) - Project development and startup costs **increased 157% in H1 2025** compared to H1 2024, mainly due to virtual pipeline costs for new facilities[245](index=245&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company reports total liquidity of $203.2 million and anticipates capital expenditures of approximately $185.0 million over the next year - Total liquidity as of June 30, 2025, was **$203.2 million**, consisting of $29.3 million in cash and cash equivalents and $173.9 million of unused capacity under its credit facilities[263](index=263&type=chunk) - The company anticipates spending approximately **$185.0 million in capital expenditures** over the next 12 months for RNG projects and fuel stations[287](index=287&type=chunk) - On March 3, 2025, the company amended its Credit and Guarantee Agreement, **extending the availability period for delayed draw term loans** to March 5, 2026[269](index=269&type=chunk)[271](index=271&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=56&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exempt from this disclosure requirement as a smaller reporting company - As a **"smaller reporting company,"** OPAL Fuels is exempt from this disclosure requirement[290](index=290&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=56&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were **effective as of June 30, 2025**[291](index=291&type=chunk) - **No changes in internal control over financial reporting** that materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter[292](index=292&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=57&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company details the ongoing arbitration with CEI Builders and related litigation concerning the Central Valley RNG projects - The company is engaged in a material legal dispute with contractor **VEC Partners, Inc. (CEI Builders)** regarding two RNG projects in California's Central Valley[295](index=295&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) - The company has also filed a lawsuit against its former development partner, **Sierra Renewable Organics Management, LLC**, for issues related to the same Central Valley projects[305](index=305&type=chunk) [ITEM 1A. RISK FACTORS](index=58&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company highlights its dependence on government incentives and risks from potential legislative changes affecting clean energy tax credits - The company's financial performance is **highly dependent on government incentives** like Investment Tax Credits (ITCs), the Renewable Fuel Standard (RFS), and Low Carbon Fuel Standard (LCFS) programs[307](index=307&type=chunk) - A new law, the **"One Big Beautiful Bill,"** signed on July 4, 2025, may accelerate the termination of certain clean energy tax credits[308](index=308&type=chunk) - There is ongoing uncertainty regarding proposed **IRS regulations for ITCs under the IRA**, which could negatively impact project profitability[309](index=309&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=59&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported during the period - **None**[314](index=314&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=59&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - **None**[315](index=315&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=59&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This disclosure is not applicable to the company's operations - **Not applicable**[316](index=316&type=chunk) [ITEM 5. OTHER INFORMATION](index=60&type=section&id=ITEM%205.%20OTHER%20INFORMATION) A subsidiary entered a new joint venture on May 9, 2025, to develop and operate an RNG facility, with the company holding a 70% stake - On May 9, 2025, the company formed a new joint venture with a leading environmental solutions company to develop and operate an RNG facility, with the company owning **70% of the venture**[317](index=317&type=chunk) [ITEM 6. EXHIBITS](index=60&type=section&id=ITEM%206.%20EXHIBITS) This section lists filed exhibits, including corporate documents, officer certifications, and the agreement for the new RNG joint venture - The list of exhibits includes corporate governance documents, certifications by the Co-CEOs and CFO, and the **Limited Liability Company Agreement for the new RNG joint venture**[323](index=323&type=chunk)

[OPAL Fuels Second Quarter 2025 Results](index=1&type=section&id=OPAL%20Fuels%20Second%20Quarter%202025%20Results) OPAL Fuels' Q2 and H1 2025 results show strong financial and operational growth, supported by strategic investments and reaffirmed guidance [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed satisfaction with Q2 2025 results, citing increased RNG production, policy support, and strategic platform investments - RNG production in Q2 2025 increased by **33%** compared to Q2 2024, with the company expecting continued improvement throughout the year in line with guidance[2](index=2&type=chunk) - Management highlighted strengthening bipartisan support for biofuels, specifically mentioning the passage of the 'One Big Beautiful Bill Act' which extends the **45Z production tax credit** through 2029[2](index=2&type=chunk) - The company is investing in its sustainable operating platform and technologies to scale with growth, capitalizing on strengthening market fundamentals for RNG as a transportation fuel[2](index=2&type=chunk) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company reported strong Q2 and H1 2025 financial and operational growth, including increased RNG production and project pipeline progress [Financial Highlights](index=1&type=section&id=Financial%20Highlights) OPAL Fuels demonstrated strong Q2 2025 financial growth, with revenue up 13% to **$80.5 million** and net income surging to **$7.6 million** Q2 & H1 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $80.5M | $71.0M (approx) | +13% | $165.9M | $135.9M | +22% | | **Net Income** | $7.6M | $1.9M | +300% | $8.8M | $2.6M | +238% | | **Adjusted EBITDA** | $16.5M | $21.1M | -22% | $36.6M | $36.3M | +0.8% | | **Basic & Diluted EPS (Class A)** | $0.03 | $(0.01) | N/A | $0.02 | $(0.02) | N/A | - The company completed the sale of **$16.7 million** of IRA Investment Tax Credits during the period[7](index=7&type=chunk) - At the end of Q2 2025, RNG Pending Monetization totaled **$12.0 million**[7](index=7&type=chunk) [Operational Highlights & Construction Update](index=2&type=section&id=Operational%20Highlights%20%26%20Construction%20Update) Q2 operational performance was strong, with RNG production up **33%** YoY to **1.2 million MMBtu**, and project pipeline advancing despite some delays Q2 & H1 2025 Key Operational Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **RNG Produced (MMBtu)** | 1.2M | 0.9M | +33% | 2.3M | 1.7M | +35% | | **Total Fuel Dispensed (GGEs)** | 40.8M | 36.6M | +11% | 81.4M | 71.6M | +14% | | **RNG Dispensed (GGEs)** | 20.6M | 18.7M | +10% | 40.1M | 35.1M | +14% | - Project Pipeline Updates: - **Atlantic RNG:** On schedule for Q3 2025 commercial operations - **Burlington & Cottonwood RNG:** Expected to commence operations in 2026 - **Kirby RNG:** Expected to commence operations in 2027 - **Hilltop & Vander Schaaf (California):** Construction completion is delayed due to a contractor dispute[7](index=7&type=chunk)[8](index=8&type=chunk) - As of June 30, 2025, the company had **46 fueling stations** under construction, with **20** being owned by OPAL[8](index=8&type=chunk) [Guidance](index=3&type=section&id=Guidance) OPAL Fuels has reaffirmed its previously issued financial and operational guidance for the full year 2025 - The company maintains its full-year 2025 guidance[8](index=8&type=chunk) [Detailed Financial Performance](index=4&type=section&id=Detailed%20Financial%20Performance) Detailed financial performance includes segment results, equity method investments, and operational metrics for the reporting period [Results of Operations](index=4&type=section&id=Results%20of%20Operations) Q2 2025 total revenue increased to **$80.5 million** YoY, driven by RNG Fuel and Fuel Station Services, with consolidated Adjusted EBITDA at **$16.5 million** Revenue by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **RNG Fuel** | $25,130 | $19,445 | $52,729 | $37,172 | | **Fuel Station Services** | $47,026 | $39,257 | $97,704 | $76,399 | | **Renewable Power** | $8,300 | $12,248 | $15,430 | $22,331 | | **Total Revenue** | **$80,456** | **$70,950** | **$165,863** | **$135,902** | Adjusted EBITDA by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **RNG Fuel** | $16,867 | $17,946 | $36,581 | $33,787 | | **Fuel Station Services** | $11,203 | $8,626 | $22,422 | $15,644 | | **Renewable Power** | $3,311 | $6,368 | $5,931 | $10,240 | | **Corporate** | $(14,872) | $(11,859) | $(28,362) | $(23,367) | | **Consolidated Adjusted EBITDA** | **$16,509** | **$21,081** | **$36,572** | **$36,304** | [Equity Method Investments](index=5&type=section&id=Equity%20Method%20Investments) OPAL's Q2 2025 share of net income from equity method investments decreased to **$2.0 million**, with a corresponding decline in Adjusted EBITDA OPAL's Share of Equity Method Investments (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $13,178 | $11,228 | $23,466 | $21,989 | | **Gross Profit** | $4,435 | $5,089 | $6,765 | $10,275 | | **Net Income** | $1,962 | $3,800 | $1,240 | $8,006 | | **Adjusted EBITDA** | $6,082 | $6,693 | $9,497 | $13,167 | [Operational Metrics](index=5&type=section&id=Operational%20Metrics) Net design capacity for landfill RNG facilities increased to **2.2 million MMBtus** in Q2 2025, with inlet design capacity utilization at **76%** Landfill RNG Facility Capacity and Utilization | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Design Capacity (Million MMBtus)** | 2.2 | 1.5 | 4.4 | 2.8 | | **Inlet Design Capacity Utilization (%)** | 76% | 74% | 73% | 77% | | **Utilization of Inlet Gas (%)** | 75% | 82% | 76% | 81% | - As of June 30, 2025, the total value of RNG Pending Monetization and environmental credits (RINs, LCFSs, RECs) was approximately **$12.0 million**[13](index=13&type=chunk) [Liquidity and Capital Expenditures](index=7&type=section&id=Liquidity%20and%20Capital%20Expenditures) As of June 30, 2025, the company maintained strong liquidity of **$203.2 million**, with capital expenditures for H1 2025 totaling **$33.4 million** - Total liquidity as of June 30, 2025, was **$203.2 million**, consisting of **$138.4 million** in unused senior secured credit facility, **$35.5 million** in unused revolver capacity, and **$29.3 million** in cash and cash equivalents[14](index=14&type=chunk) - Capital expenditures for the first six months of 2025 totaled **$33.4 million**, compared to **$49.7 million** in the prior-year period, with an additional **$12.7 million** invested in equity method investments[15](index=15&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) Unaudited condensed consolidated balance sheets, statements of operations, and cash flows for periods ended June 30, 2025, are presented [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$905.5 million**, liabilities to **$432.3 million**, and cash equivalents were **$29.3 million** Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $29,269 | $24,310 | | **Total current assets** | $123,486 | $117,188 | | **Total assets** | $905,537 | $881,077 | | **Total current liabilities** | $98,233 | $103,596 | | **Total liabilities** | $432,291 | $416,045 | | **Total Stockholders' deficit** | $(22,302) | $(147,831) | [Condensed Consolidated Statements of Operations](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues were **$80.5 million**, with net income of **$7.6 million**, significantly improved by a **$13.7 million** income tax benefit Statement of Operations Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $80,456 | $70,950 | $165,863 | $135,902 | | **Operating (loss) income** | $(827) | $5,689 | $(2,769) | $9,259 | | **Income tax benefit** | $13,686 | $— | $21,723 | $— | | **Net income** | $7,559 | $1,908 | $8,843 | $2,585 | | **Net income (loss) attributable to Class A common stockholders** | $800 | $(153) | $565 | $(469) | [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 net cash from operating activities increased to **$21.8 million**, while investing activities decreased, resulting in a net increase in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $21,805 | $14,251 | | **Net cash used in investing activities** | $(36,026) | $(54,080) | | **Net cash provided by financing activities** | $18,498 | $15,036 | | **Net increase (decrease) in cash** | $4,277 | $(24,793) | [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) This section provides a detailed reconciliation of GAAP Net Income to the non-GAAP measure of Adjusted EBITDA, highlighting key adjustments - The company uses Adjusted EBITDA as a non-GAAP measure to supplement its GAAP financial statements, believing it provides a more complete understanding of its core operating performance[35](index=35&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $7,559 | $1,908 | $8,843 | $2,585 | | **Adjustments** | $8,950 | $19,173 | $27,729 | $33,719 | | **Adjusted EBITDA** | **$16,509** | **$21,081** | **$36,572** | **$36,304** |

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) The company's Q1 2025 revenue grew 31% to $85.4 million, but an operating loss was recorded due to higher costs Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Financial Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$85,407** | **$64,952** | **+31.5%** | | RNG Fuel | $27,599 | $17,727 | +55.7% | | Fuel Station Services | $50,678 | $37,142 | +36.4% | | Renewable Power | $7,130 | $10,083 | -29.3% | | **Operating (Loss) Income** | **($1,942)** | **$3,570** | **-154.4%** | | **Net Income** | **$1,284** | **$677** | **+89.6%** | | Net Loss Attributable to Class A Stockholders | ($235) | ($316) | +25.6% | | **Basic and Diluted EPS** | **($0.01)** | **($0.01)** | **0.0%** | Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | **$116,387** | **$117,188** | | Cash and cash equivalents | $40,082 | $24,310 | | **Total Assets** | **$884,923** | **$881,077** | | **Total Current Liabilities** | **$101,602** | **$103,596** | | **Total Liabilities** | **$420,478** | **$416,045** | | **Total Stockholders' Equity (Deficit)** | **$57,726** | **($147,831)** | Condensed Consolidated Statements of Cash Flows | Cash Flow Item | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$29,679** | **$13,718** | | **Net cash used in investing activities** | **($9,277)** | **($21,626)** | | **Net cash used in financing activities** | **($4,732)** | **($6,638)** | | Net increase (decrease) in cash | $15,670 | ($14,546) | [Notes To Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the sale of tax credits, loan amendments, and significant customer concentration - The company is organized into three operating segments: RNG Fuel, Fuel Station Services, and Renewable Power[36](index=36&type=chunk) - In Q1 2025, the company sold transferable Investment Tax Credits (ITCs) for net proceeds of **$8.0 million**, recorded as a credit to income tax expense[60](index=60&type=chunk)[62](index=62&type=chunk) - On March 3, 2025, the company amended its OPAL Term Loan and Revolving Loan agreement, extending the availability period for delayed draw term loans through **March 5, 2026**[67](index=67&type=chunk)[69](index=69&type=chunk) - For Q1 2025, one customer accounted for **43% of total revenue**, and at March 31, 2025, three customers accounted for **56% of accounts receivable**[57](index=57&type=chunk)[126](index=126&type=chunk) - Subsequent to the quarter end, the company entered a joint venture for a new RNG facility, holding a **70% ownership stake**[163](index=163&type=chunk) - The company is involved in a material legal proceeding regarding the construction of two RNG facilities, with disputed change orders of approximately **$14 million per project**[151](index=151&type=chunk)[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Revenue growth was driven by new RNG facilities, while operating loss stemmed from a 675% surge in project costs Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue (in thousands) | Q1 2024 Revenue (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **RNG Fuel** | **$27,599** | **$17,727** | **+56%** | | **Fuel Station Services** | **$50,678** | **$37,142** | **+36%** | | **Renewable Power** | **$7,130** | **$10,083** | **-29%** | | **Total Revenues** | **$85,407** | **$64,952** | **+31%** | - The **56% increase in RNG Fuel revenue** was primarily driven by the new Prince William and Polk RNG facilities[210](index=210&type=chunk) - The **29% decrease in Renewable Power revenue** was mainly due to the loss of revenues from the sale of ISCC Carbon Credits[212](index=212&type=chunk) - Project development and startup costs surged by **$5.3 million (675%) YoY**, primarily due to costs for new and developing facilities[216](index=216&type=chunk) - As of March 31, 2025, the company's liquidity was **$239.9 million**, comprising credit facility capacity and cash[227](index=227&type=chunk) - The company anticipates spending approximately **$182.0 million in capital expenditures** over the next 12 months[252](index=252&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a "smaller reporting company," the company is exempt from providing market risk disclosures - As a "smaller reporting company," OPAL Fuels Inc. is not required to provide quantitative and qualitative disclosures about market risk[256](index=256&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[257](index=257&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter[258](index=258&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=51&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is in a significant legal dispute with a contractor over its Central Valley Project, now proceeding to arbitration - The company is in a legal dispute with contractor CEI Builders over the Central Valley RNG project, involving disputed change order requests of approximately **$14 million per project**[262](index=262&type=chunk)[263](index=263&type=chunk) - The company terminated its contracts for default and has initiated arbitration proceedings, with a hearing scheduled for **May 2026**[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - A separate lawsuit was filed in **March 2024** against a former development partner related to the Central Valley projects[272](index=272&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported, though macroeconomic conditions remain a key concern - The company states there have been **no material changes** from the risk factors previously disclosed in its 2024 Annual Report on Form 10-K[273](index=273&type=chunk) - A specific risk highlighted is the potential adverse impact of **macroeconomic conditions** such as inflation and rising interest rates[274](index=274&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities or use of proceeds - The company reported **no unregistered sales of equity securities** or use of proceeds during the period[278](index=278&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities during the period - The company reported **no defaults upon senior securities** during the period[279](index=279&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are **not applicable** to the company's operations[281](index=281&type=chunk) [Item 5. Other Information](index=54&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company entered a new RNG joint venture and reported no new executive trading plans - On May 9, 2025, the company formed a new joint venture to develop and operate an RNG facility, holding a **70% ownership stake**[282](index=282&type=chunk) - **No directors or executive officers** adopted or terminated Rule 10b5-1 trading plans during the quarter[282](index=282&type=chunk) [Item 6. Exhibits](index=54&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate and legal documents

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $20.1 million, over 30% higher compared to the same period last year [7] - Revenue for the quarter was $85.4 million, compared to $64.9 million in Q1 2024 [13] - Net income increased to $1.3 million from $0.7 million in Q1 2024 [13] Business Segment Data and Key Metrics Changes - Fuel Station Services segment EBITDA was approximately $12.5 million, 80% higher versus Q1 2024 [7] - RNG fuel production for the quarter was 1.1 million MMBtus, up nearly 40% compared to the same period last year [8] - The company maintains its 2025 RNG production guidance of 5 million to 5.4 million MMBtus, representing a 37% increase versus 2024 [11] Market Data and Key Metrics Changes - The company is experiencing delays in investment decisions from customers due to recent trade policy uncertainties, but does not expect a material impact on guidance [9] - The regulatory outlook is shifting positively for RNG CNG powered heavy-duty trucking, which could expand adoption [10] Company Strategy and Development Direction - The company is focused on vertical integration to maximize the value of RNG produced and enhance cash flow stability [8] - There are ongoing construction projects for four landfill RNG projects, with expectations for commercial operations to commence in 2025 [11][12] - The company is maintaining its guidance for Fuel Station Services adjusted EBITDA growth of 30% to 50% versus 2024 [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain macro and regulatory environments but remains confident in long-term growth potential [9][10] - There is strong bipartisan support for American biofuels and investment in RNG, which is expected to bolster future growth [10] - The company is monitoring regulatory developments closely, including the implementation of 45Z and EPA rulings [10] Other Important Information - Capital expenditures for the quarter totaled $17 million, including $5.4 million related to equity method investments [15] - The company expects to monetize approximately $50 million in total ITC sales in 2025, enhancing operating cash flow [16] Q&A Session Summary Question: Production trajectory for the year - Management indicated that production was affected by an unusually cold winter and availability issues but expects sequential growth through the year [22][24] Question: Impact of tariffs on construction projects - Management stated that there are currently no cost increases due to tariffs, as equipment has already been ordered under fixed-price contracts [25][26] Question: RIN pricing and future expectations - The average realized RIN price was about $271 in Q1, with expectations for a lower price in Q2 [31][32] Question: Growth in Fuel Station Services - Growth is driven by higher volumes from new stations and improved margins due to a tighter dispensing market [33][35] Question: Capital return to shareholders - Management discussed the flexibility in capital deployment, including potential dividends or share buybacks as free cash flow increases [38][40] Question: Renewable power segment performance - The decrease in revenue was attributed to the termination of contracts related to the ISCC pathway [65][66] Question: Tax benefits from ITC credits - The $8 million income tax benefit was from the sale of ITC Section 48 tax credits, which is not included in EBITDA guidance [70][71] Question: Conversion of biofuel power projects to RNG - Management expressed excitement about the potential to accelerate conversion projects based on public policy outcomes [73][74] Question: Concerns about oil prices and natural gas - Management is not overly concerned about short-term oil price fluctuations, believing natural gas will remain cheaper than oil [76][78]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $20.1 million, over 30% higher compared to the same period last year [7] - Revenue for the quarter was $85.4 million, compared to $64.9 million in Q1 2024 [14] - Net income increased to $1.3 million from $0.7 million in Q1 2024 [14] Business Segment Data and Key Metrics Changes - Fuel Station Services segment EBITDA was approximately $12.5 million, 80% higher versus Q1 2024 [7] - RNG fuel production for the quarter was 1.1 million MMBtus, up nearly 40% compared to the same period last year [8] - The company maintains its 2025 RNG production guidance of 5 million to 5.4 million MMBtus, a 37% increase versus 2024 [12] Market Data and Key Metrics Changes - The company is experiencing delays in investment decisions from customers due to recent trade policy uncertainties, but these delays are not expected to materially impact guidance [9] - The regulatory outlook is shifting positively for RNG CNG powered heavy-duty trucking, which could expand adoption [11] Company Strategy and Development Direction - The company continues to execute on strategic and operational objectives, focusing on vertical integration to maximize the value of RNG produced [8] - There are ongoing construction projects for four landfill RNG projects, with a total annual design capacity of 2.1 million MMBtus [12] - The company is maintaining guidance for Fuel Station Services adjusted EBITDA growth of 30% to 50% versus 2024 [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain macro and regulatory environments but remains confident in the long-term fundamentals supporting growth [9] - There is strong bipartisan support for American biofuels and investment in RNG, which is expected to bolster future growth [11] - The company is monitoring regulatory developments, including the implementation of 45Z and final EPA rulings [11] Other Important Information - Capital expenditures for the quarter totaled $17 million, including $5.4 million related to equity method investments [15] - The company expects to monetize approximately $50 million in total ITC sales in 2025, enhancing operating cash flow [16] Q&A Session Summary Question: Can you discuss the production trajectory for the year? - Management indicated that production was affected by cold weather and availability issues but expects sequential growth through the year as projects ramp up [22][24] Question: Are you experiencing any inflation associated with tariffs? - Management stated that there are no current cost increases due to tariffs, as equipment for construction projects has already been ordered [25][27] Question: What are the drivers behind the RIN pricing achieved in Q1? - The average realized RIN price was about $271 in Q1, with expectations for a lower price in Q2 [32] Question: How much of the expected EBITDA growth in Fuel Station Services is from higher volumes versus stronger margins? - Growth is driven by new stations coming online, higher utilization, and anticipated margins from service contracts [36] Question: What are the company's thoughts on returning capital to shareholders? - The company is focused on maximizing shareholder value through various means, including potential share buybacks and capital deployment in growth projects [40] Question: Can you provide an update on the renewable power segment? - Revenue in the renewable power segment decreased due to the termination of contracts related to the ISCC pathway [67] Question: What was the substantial income tax benefit in Q1? - The $8 million benefit was from the sale of ITC Section 48 tax credits, which is not included in EBITDA guidance but affects net income [73]

[Part I](index=5&type=section&id=PART%20I) Part I covers the company's business operations, strategic initiatives, project portfolio, competitive landscape, regulatory environment, and associated risk factors [Business](index=5&type=section&id=Item%201.%20Business) OPAL Fuels Inc. is a vertically integrated company specializing in converting biogas from landfills and dairy farms into Renewable Natural Gas (RNG) and Renewable Power, also designing, building, and operating fueling stations for heavy-duty trucks [Company Overview and Strategy](index=5&type=section&id=Company%20Overview%20and%20Strategy) OPAL Fuels is a leader in converting biogas into RNG and Renewable Power, with over 20 years of experience, focusing on methane reduction and market expansion - The company's multi-pronged strategy includes promoting methane reduction, expanding its industry position through strategic transactions, diversifying feedstock sources beyond landfills and dairies, and empowering customers to achieve their carbon reduction goals[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - OPAL Fuels has over **two decades of experience** in the biogas-to-energy industry and over a decade in the alternative vehicle fuels industry[19](index=19&type=chunk)[21](index=21&type=chunk) [Business Model and Expertise](index=6&type=section&id=Business%20Model%20and%20Expertise) The company's vertical integration across Biogas Conversion Projects and Fueling Stations is a key differentiator, enabling value capture and reducing reliance on third parties - Vertical integration across the RNG value chain allows the company to avoid value leakage and offer better terms to transportation customers[27](index=27&type=chunk)[28](index=28&type=chunk) - The management team has decades of combined experience and is technology-agnostic, selecting the most suitable technology for each specific project[30](index=30&type=chunk)[31](index=31&type=chunk) - New development opportunities are typically sourced from existing relationships with landfill owners and dairy developers, leveraging the company's long operating history and reputation[34](index=34&type=chunk) [Operations and Revenue Generation](index=7&type=section&id=Operations%20and%20Revenue%20Generation) OPAL's business operates in Capture and Conversion, and Dispensing and Monetization segments, with revenue primarily from Environmental Attributes and Renewable Power sales - Revenues are principally driven by the sale of Environmental Attributes (RINs, LCFS credits, ISCC Carbon Credits, RECs) generated from dispensing RNG as transportation fuel[46](index=46&type=chunk)[47](index=47&type=chunk) - Other revenue sources include long-term Power Purchase Agreements (PPAs) for Renewable Power, construction and maintenance services for fueling stations, and sales of RNG as a commodity[48](index=48&type=chunk)[49](index=49&type=chunk) - In 2024, the company dispensed **74 million gasoline gallon equivalents (GGEs)** of RNG to the transportation market[44](index=44&type=chunk) [Biogas Conversion Projects and Market Opportunity](index=8&type=section&id=Biogas%20Conversion%20Projects%20and%20Market%20Opportunity) Biogas conversion involves collecting and purifying gas from landfills and dairy farms into RNG or Renewable Power, supported by significant market opportunities and a robust regulatory framework - The biogas conversion process typically involves two phases: biogas collection and then processing/purifying the gas into either Renewable Power or pipeline-quality RNG[50](index=50&type=chunk)[54](index=54&type=chunk) - Landfill gas (LFG) offers a predictable, long-term production profile, with long-term gas rights agreements typically lasting at least **20 years**[59](index=59&type=chunk)[60](index=60&type=chunk) - The regulatory framework is a key market driver, with the federal RFS program creating high-value D3 RINs and state LCFS programs in California and Oregon providing additional, stackable credits[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - According to the EPA, as of July 2023, there were **470 candidate landfills** with the potential to collect a combined **343 million standard cubic feet of LFG per day**, representing a significant growth opportunity[66](index=66&type=chunk) [Project Portfolio](index=11&type=section&id=Project%20Portfolio) As of December 31, 2024, OPAL Fuels operates 26 projects, including 11 RNG projects with 8.8 million MMBtus/year capacity and 15 Renewable Power projects with 105.8 MW/hour capacity RNG Projects Portfolio (as of Dec 31, 2024) | Status | Project Count | OPAL's Share of Design Capacity (MMBtus/year) | | :--- | :--- | :--- | | **In Operation** | 11 | 8,804,931 | | **In Construction** | 6 | 2,631,139 | Renewable Power Projects Portfolio (as of Dec 31, 2024) | Status | Project Count | Nameplate Capacity (MW per hour) | | :--- | :--- | :--- | | **In Operation** | 15 | 105.8 | | **In Construction** | 1 | 2.4 | - Six of the company's operating Renewable Power projects are considered candidates for future conversion to RNG projects, based on factors like LFG quantity/quality and proximity to pipeline interconnects[74](index=74&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [Competition and Regulation](index=13&type=section&id=Competition%20and%20Regulation) OPAL Fuels competes in a fragmented biogas market, leveraging its scale and vertical integration, while navigating extensive federal, state, and local environmental and energy regulations - The biogas market is highly fragmented, creating opportunities for consolidation by experienced and well-capitalized participants like OPAL[80](index=80&type=chunk)[65](index=65&type=chunk) - The company is subject to extensive regulation, including federal RFS program rules, state LCFS programs, EPA Clean Air Act permits (NSR, Title V), and FERC regulations for wholesale electricity sales[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The Inflation Reduction Act (IRA) is seen as favorable for the renewable energy industry by extending and expanding incentives like the Investment Tax Credit (ITC) and Production Tax Credit (PTC), but uncertainty remains regarding its application and potential future changes[103](index=103&type=chunk) [Facilities and Human Capital](index=16&type=section&id=Facilities%20and%20Human%20Capital) OPAL Fuels maintains corporate headquarters in White Plains, New York, with additional facilities in Minnesota and California, employing 341 full-time staff focused on safety and excellence - The company's main facilities include its headquarters in White Plains, NY, an owned facility in Oronoco, MN, and a leased facility in Rancho Cucamonga, CA[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - As of December 31, 2024, the company had **341 full-time employees**, none of whom are subject to a collective bargaining agreement[110](index=110&type=chunk) - Core company values are Safety, Integrity, Relationships, and Excellence[114](index=114&type=chunk) - OPAL Fuels is a vertically integrated leader in converting biogas into RNG and Renewable Power, and also markets and distributes RNG to heavy-duty trucking sectors[19](index=19&type=chunk) - The company's primary sources of biogas are landfill gas (LFG) and dairy manure[20](index=20&type=chunk) - OPAL's vertical integration, from production to dispensing, allows it to capture more value and offer competitive terms to transportation customers[27](index=27&type=chunk)[28](index=28&type=chunk) Project Portfolio Overview (as of Dec 31, 2024) | Project Type | Status | Count | Capacity | | :--- | :--- | :--- | :--- | | **RNG Projects** | In Operation | 11 | 8.8 million MMBtus/year | | | In Construction | 6 | 2.6 million MMBtus/year | | **Renewable Power** | In Operation | 15 | 105.8 MW/hour | | | In Construction | 1 | 2.4 MW/hour | [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces a wide range of risks across its business, including operational, market, financial, regulatory, and ownership-related challenges [Risks Related to Business and Operations](index=20&type=section&id=Risks%20Related%20to%20Business%20and%20Operations) Operational success is highly dependent on biogas supply contracts, third-party infrastructure, and managing long, complex project development cycles with inherent construction and permitting risks - The company is dependent on contractual arrangements with biogas site owners and has no guarantee of the quantity or quality of biogas produced[139](index=139&type=chunk)[142](index=142&type=chunk) - Reliance on third-party interconnection, transmission, and pipeline facilities creates risks of inadequate capacity or unplanned disruptions that could restrict delivery of Renewable Power and RNG[153](index=153&type=chunk)[155](index=155&type=chunk) - Project development involves a long cycle (**20-48 months**) with significant resource commitment and risks such as construction delays, cost overruns, and permitting issues[181](index=181&type=chunk)[183](index=183&type=chunk)[204](index=204&type=chunk) - The business is exposed to operational hazards such as fire, explosion, and machinery failure, as well as cybersecurity threats and natural disasters[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Risks Related to Market and Commercial Success](index=24&type=section&id=Risks%20Related%20to%20Market%20and%20Commercial%20Success) Revenue is significantly exposed to volatility in Environmental Attribute and commodity prices, increasing competition for biogas rights, and the slow adoption of natural gas vehicles by commercial fleets - A reduction in the prices of Environmental Attributes (RINs, LCFS credits) could have a material adverse effect on business prospects and financial results[166](index=166&type=chunk) - Volatility in the prices of oil, gasoline, diesel, and natural gas can adversely affect the economic attractiveness of RNG as a vehicle fuel[167](index=167&type=chunk) - The company faces significant upward pricing pressure and increased competition when securing biogas rights for new projects or renewing rights for existing ones[169](index=169&type=chunk)[171](index=171&type=chunk) - Success is highly dependent on the adoption of natural gas vehicles by commercial fleets, which has been slower and more limited than anticipated[218](index=218&type=chunk) [Risks Related to Financial Performance and Corporate Structure](index=36&type=section&id=Risks%20Related%20to%20Financial%20Performance%20and%20Corporate%20Structure) The company faces risks from a history of losses, reliance on subsidiary distributions, potential cybersecurity incidents, and significant indebtedness, compounded by macroeconomic conditions - The company has a history of net losses and may incur additional losses in the future[236](index=236&type=chunk) - As a holding company, OPAL Fuels Inc.'s only material asset is its interest in OPAL Fuels LLC, making it dependent on distributions from the subsidiary to pay taxes and other expenses[245](index=245&type=chunk) - Cybersecurity incidents pose a significant risk, with potential for data theft, system disruption, and material costs for remediation[255](index=255&type=chunk)[257](index=257&type=chunk)[260](index=260&type=chunk) - Payments under the Tax Receivable Agreement could be accelerated in a change of control, potentially exceeding the actual tax benefits realized[249](index=249&type=chunk)[250](index=250&type=chunk) [Risks Related to Regulations or Governmental Actions](index=41&type=section&id=Risks%20Related%20to%20Regulations%20or%20Governmental%20Actions) The business is highly dependent on federal and state renewable fuel regulations and tax incentives, which are subject to frequent changes and uncertainties, potentially impacting financial performance - Operations are subject to numerous stringent EHS laws and regulations, which may expose the company to significant costs, liabilities, and potential sanctions for non-compliance[264](index=264&type=chunk)[265](index=265&type=chunk) - The market for RNG and Environmental Attributes is heavily influenced by government regulations like the federal RFS and state LCFS programs, which are subject to frequent modification[271](index=271&type=chunk) - Uncertainty in the EPA's administration of the RFS program, including the setting of annual Renewable Volume Obligations (RVOs), can create price volatility in the RIN market[272](index=272&type=chunk)[273](index=273&type=chunk) - Financial performance depends on government incentives like the Investment Tax Credit (ITC), which could be impacted by changes in tax laws, such as the interpretation or potential repeal of provisions in the Inflation Reduction Act (IRA)[287](index=287&type=chunk)[289](index=289&type=chunk) [Risks Related to Our Indebtedness](index=46&type=section&id=Risks%20Related%20to%20Indebtedness) The company's substantial indebtedness of $307.5 million and redeemable preferred non-controlling interests of $130.0 million as of December 31, 2024, limits financial flexibility and exposes it to interest rate risks and restrictive covenants Indebtedness Overview (as of Dec 31, 2024) | Category | Amount (in millions) | | :--- | :--- | | Total Indebtedness | $307.5 | | Redeemable preferred non-controlling interests | $130.0 | - Substantial debt obligations could limit financial flexibility, require dedication of significant cash flow to service debt, and make the company vulnerable to adverse economic conditions[303](index=303&type=chunk) - Credit facilities contain restrictive covenants that limit distributions and other activities; non-compliance could lead to default and acceleration of debt[305](index=305&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=48&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) Shareholders face risks from potential dilution, stock price volatility, concentrated voting control by the majority stockholder, and reduced corporate governance disclosures as a "controlled company" and "emerging growth company" - Future sales of Class A common stock to raise capital could result in significant dilution to existing shareholders[309](index=309&type=chunk) - The company's majority stockholder, Mr. Mark Comora, controls **93.9% of the voting power** through a dual-class stock structure, limiting the ability of other stockholders to influence corporate matters[317](index=317&type=chunk)[318](index=318&type=chunk) - As a "controlled company" under Nasdaq rules, OPAL is exempt from certain corporate governance requirements, such as having a majority of independent directors[323](index=323&type=chunk) - The company's certificate of incorporation includes anti-takeover provisions and designates the Court of Chancery of the State of Delaware as the exclusive forum for most stockholder disputes, which could limit shareholder rights[327](index=327&type=chunk)[337](index=337&type=chunk) [Unresolved Staff Comments](index=53&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[341](index=341&type=chunk) [Cybersecurity](index=53&type=section&id=Item%201C.%20Cybersecurity) OPAL Fuels has implemented information security processes to manage cybersecurity risks, involving threat monitoring, vulnerability assessments, and third-party risk management, with oversight from the Audit Committee [Risk Management and Strategy](index=53&type=section&id=Risk%20Management%20and%20Strategy) The company maintains processes to identify, assess, and manage material cybersecurity threats through monitoring, vulnerability assessments, and collaboration with third-party providers - The company has implemented an information technology security policy and risk assessment processes to identify and manage cybersecurity threats[342](index=342&type=chunk) - OPAL engages with third-party cybersecurity software and service providers to help identify risks and conduct penetration testing[344](index=344&type=chunk) [Governance](index=53&type=section&id=Governance) Cybersecurity risk management is implemented by a third-party service provider reporting to company management, with oversight from the Audit Committee of the board of directors - A third-party service provider, reporting to company management, implements and maintains cybersecurity processes[345](index=345&type=chunk) - The Audit Committee of the board of directors is responsible for overseeing cybersecurity risk management[346](index=346&type=chunk) [Properties](index=53&type=section&id=Item%202.%20Properties) The company does not own any real property, operating from leased facilities and shared office space, with its material properties consisting of interests in RNG and Renewable Power projects - The company does not own real property; its corporate headquarters are in shared office space in White Plains, NY, and it leases facilities in Minnesota and California[348](index=348&type=chunk) - The company's interests in its RNG and Renewable Power projects are its only material properties[348](index=348&type=chunk) [Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a significant arbitration dispute with contractor CEI Builders over the Central Valley RNG projects and a lawsuit against a former development partner [Central Valley Project](index=54&type=section&id=Central%20Valley%20Project) The company is in a legal dispute with VEC Partners, Inc. (CEI), the contractor for two Central Valley RNG facilities, involving disputed change order requests and a termination for default, now in arbitration - A dispute with contractor CEI over two Central Valley RNG projects involves disputed change order requests of **~$14 million per project**[350](index=350&type=chunk)[351](index=351&type=chunk) - The company terminated CEI for default, and the matter is now in arbitration, with a hearing scheduled for May 2026; the performance bond surety has denied the claims[352](index=352&type=chunk)[353](index=353&type=chunk)[354](index=354&type=chunk) [Former Development Partner/Construction Manager](index=55&type=section&id=Former%20Development%20Partner%2FConstruction%20Manager) In March 2024, the company filed a lawsuit against its former development partner and construction manager, Sierra Renewable Organics Management, LLC, alleging Breach of Contract and Misrepresentation related to the Central Valley projects - The company filed a lawsuit against a former development partner for claims including Breach of Contract and Misrepresentation related to the Central Valley projects[360](index=360&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[361](index=361&type=chunk) [Part II](index=55&type=section&id=PART%20II) Part II details the company's stock market information, management's discussion and analysis of financial performance, market risks, and internal controls [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on Nasdaq under "OPAL", with no cash dividends paid or intended in the near term, and no unregistered sales or issuer purchases reported - Class A common stock is traded on Nasdaq under the symbol "**OPAL**"[363](index=363&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the near term[366](index=366&type=chunk) [Reserved](index=55&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) OPAL Fuels reported total revenues of **$300.0 million** for FY2024, a **17% increase**, driven by RNG Fuel and Fuel Station Services growth, though net income attributable to Class A stockholders fell due to a non-recurring gain in 2023 [Overview and Recent Developments](index=56&type=section&id=Overview%20and%20Recent%20Developments) OPAL Fuels is expanding its RNG capacity, with recent developments including an option to acquire an interest in the Wasatch food waste-to-RNG facility and an amendment to its term loan to facilitate growth - The company entered into an option agreement to purchase an interest in the Wasatch Resource Recovery facility, which converts food waste to RNG, signaling a potential diversification of feedstock[375](index=375&type=chunk)[376](index=376&type=chunk)[379](index=379&type=chunk) - On March 3, 2025, the company amended its OPAL Term Loan to ease certain financial covenants, facilitate ITC sales, and extend the delayed draw term loan availability period to March 5, 2026[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) [Critical Accounting Policies and Estimates](index=57&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's financial statements rely on significant estimates for revenue recognition across diverse streams, impairment testing of goodwill and long-lived assets, fair value measurements, and income tax accounting - Revenue from Environmental Attributes (RECs, RINs, LCFS credits) is recognized at the point in time when the credits are transferred to and accepted by the buyer[389](index=389&type=chunk) - Revenue from fixed-price construction contracts is recognized over time based on the percentage of cost incurred to date relative to the estimated total cost[391](index=391&type=chunk) - Goodwill is tested for impairment annually in the fourth quarter or when triggering events occur; the 2024 quantitative assessment for the RNG Fuel segment found no impairment[395](index=395&type=chunk)[398](index=398&type=chunk) - Long-lived assets are reviewed for impairment when events indicate the carrying value may not be recoverable; an impairment loss of **$2.0 million** was recorded on Plant, Property and Equipment for the year ended December 31, 2024[399](index=399&type=chunk)[400](index=400&type=chunk) [Key Factors and Trends](index=60&type=section&id=Key%20Factors%20and%20Trends) The company's results are heavily influenced by market demand for RNG and Environmental Attributes, driven by evolving federal and state regulations, commodity price fluctuations, and seasonal factors - Demand for RNG and Environmental Attributes is heavily influenced by U.S. federal (RFS) and state (LCFS) energy regulations[410](index=410&type=chunk) - The EPA's 3-year RVO set in June 2023 is expected to reduce volatility in RIN pricing for the associated period[410](index=410&type=chunk) - The business experiences seasonality, with higher natural gas demand and prices in fall and winter months, and weather-dependent revenues from renewable electricity projects[417](index=417&type=chunk) [Results of Operations](index=63&type=section&id=Results%20of%20Operations) For FY2024, total revenues increased **17%** to **$300.0 million**, driven by RNG Fuel and Fuel Station Services, while operating income surged **201%** to **$21.2 million**, but net income fell **89%** due to a large one-time gain in 2023 Revenue by Segment (FY2024 vs. FY2023, in thousands) | Segment | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | RNG Fuel | $88,420 | $66,292 | $22,128 | 33% | | Fuel Station Services | $166,875 | $135,012 | $31,863 | 24% | | Renewable Power | $44,677 | $54,804 | ($10,127) | (18)% | | **Total Revenues** | **$299,972** | **$256,108** | **$43,864** | **17%** | - The increase in RNG Fuel revenue was primarily due to a **$21.1 million increase** in Environmental Attributes sales, driven by both higher prices (**$9.1 million**) and increased volume (**$12.0 million**) from new facilities[439](index=439&type=chunk) - Project development and start-up costs increased by **$14.2 million (293%)**, mainly due to virtual pipeline costs for the Prince William facility and ITC transaction expenses[446](index=446&type=chunk) - Income from equity method investments increased by **$7.7 million (140%)**, primarily attributable to the first full year of operations at the Emerald facility[451](index=451&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, OPAL Fuels had total liquidity of **$223.6 million**, comprising cash and unused credit facility capacity, which is expected to cover **$194 million** in anticipated capital expenditures for projects under construction Liquidity Position (as of Dec 31, 2024) | Component | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $24.3 | | Unused capacity under credit facility | $178.4 | | Unused capacity under revolver | $20.9 | | **Total Liquidity** | **$223.6** | - The company anticipates spending approximately **$194 million** in capital expenditures over the next 12 months for projects under construction[482](index=482&type=chunk) Cash Flow Summary (FY2024 vs. FY2023, in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from Operating | $33,033 | $38,269 | | Net cash used in Investing | ($134,551) | ($74,147) | | Net cash from Financing | $83,504 | $5,899 | FY2024 vs. FY2023 Financial Highlights (in thousands) | Metric | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $299,972 | $256,108 | $43,864 | 17% | | **Operating Income** | $21,222 | $7,040 | $14,182 | 201% | | **Net Income** | $14,325 | $127,024 | ($112,699) | (89)% | | **Net Income Attributable to Class A Stockholders** | $561 | $18,936 | ($18,375) | (97)% | - The **17% revenue growth** was driven by a **33% increase** in RNG Fuel revenue and a **24% increase** in Fuel Station Services revenue, partially offset by an **18% decrease** in Renewable Power revenue[437](index=437&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk) - The significant decrease in net income was primarily due to a one-time gain of **$122.9 million** on the deconsolidation of VIEs (Emerald and Sapphire) in 2023[454](index=454&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," OPAL Fuels is not required to provide detailed market risk disclosures but acknowledges exposure to Environmental Attribute and commodity pricing, interest rate, and credit risks - The company is a "smaller reporting company" and is not required to provide detailed market risk disclosures[485](index=485&type=chunk) - Key market risks include pricing for Environmental Attributes and commodities, interest rate changes, and counterparty credit risk[485](index=485&type=chunk)[486](index=486&type=chunk) [Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and related notes, which are included in Item 15(a) of the Annual Report - The required financial statements are contained in Item 15(a) of the report[488](index=488&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=74&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[489](index=489&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported in Q4 2024 [Disclosure Controls and Procedures](index=74&type=section&id=Disclosure%20Controls%20and%20Procedures) Based on an evaluation as of December 31, 2024, the company's Co-Chief Executive Officers and Chief Financial Officer concluded that the disclosure controls and procedures were effective - Management concluded that disclosure controls and procedures were effective as of December 31, 2024[491](index=491&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=74&type=section&id=Management's%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management conducted an evaluation of the effectiveness of the company's internal control over financial reporting using the COSO framework and concluded that it was effective as of December 31, 2024 - Management concluded that internal control over financial reporting was effective as of December 31, 2024[492](index=492&type=chunk) [Other Information](index=74&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2024, no directors or executive officers adopted or terminated Rule 10b5-1 trading plans, and this section reiterates previously disclosed subsequent events - No directors or executive officers adopted or terminated Rule 10b5-1 trading plans in Q4 2024[495](index=495&type=chunk) - This section repeats information on two subsequent events: the Wasatch Resource Recovery Facility option agreement and the OPAL Term Loan amendment[495](index=495&type=chunk)[499](index=499&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=75&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[502](index=502&type=chunk) [Part III](index=75&type=section&id=PART%20III) Part III provides information on directors, executive compensation, security ownership, related party transactions, and principal accountant fees, all incorporated by reference [Directors, Executive Officers and Corporate Governance](index=75&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance will be incorporated by reference from the proxy statement for the 2025 annual meeting of shareholders - Information for this item is incorporated by reference from the upcoming 2025 proxy statement[504](index=504&type=chunk) [Executive Compensation](index=76&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from the proxy statement for the 2025 annual meeting of shareholders - Information for this item is incorporated by reference from the upcoming 2025 proxy statement[505](index=505&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=76&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans will be incorporated by reference from the proxy statement for the 2025 annual meeting of shareholders - Information for this item is incorporated by reference from the upcoming 2025 proxy statement[506](index=506&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=76&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding related party transactions and director independence will be incorporated by reference from the proxy statement for the 2025 annual meeting of shareholders - Information for this item is incorporated by reference from the upcoming 2025 proxy statement[507](index=507&type=chunk) [Principal Accountant Fees and Services](index=76&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services will be incorporated by reference from the proxy statement for the 2025 annual meeting of shareholders - Information for this item is incorporated by reference from the upcoming 2025 proxy statement[508](index=508&type=chunk) [Part IV](index=76&type=section&id=PART%20IV) Part IV lists the exhibits and financial statement schedules included in the Annual Report on Form 10-K [Exhibits and Financial Statement Schedules](index=76&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements and an index of all exhibits - This item provides an index of all exhibits filed with the Form 10-K, including material contracts and governance documents[509](index=509&type=chunk) - Financial statement schedules have been omitted because they are either not applicable or the required information is already in the notes to the consolidated financial statements[510](index=510&type=chunk) [Financial Statements and Notes](index=83&type=section&id=Financial%20Statements%20and%20Notes) This section presents the audited consolidated financial statements, including the balance sheets, statements of operations, and comprehensive notes detailing accounting policies and financial disclosures [Report of Independent Registered Public Accounting Firm](index=84&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, P.C. issued an unqualified audit opinion on OPAL Fuels Inc.'s consolidated financial statements for 2024 and 2023, affirming fair presentation in conformity with U.S. GAAP - The independent auditor, BDO USA, P.C., issued an unqualified opinion on the consolidated financial statements for the years ended December 31, 2024 and 2023[526](index=526&type=chunk) - The audit was conducted in accordance with PCAOB standards; as the company is not required to have an audit of its internal control over financial reporting, no opinion was expressed on its effectiveness[529](index=529&type=chunk) [Consolidated Financial Statements](index=85&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present OPAL Fuels Inc.'s financial position and results for FY2024 and FY2023, showing total assets grew to **$881.1 million** in 2024, with net income of **$14.3 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $117,188 | $128,073 | | Property, plant, and equipment, net | $458,258 | $339,493 | | **Total Assets** | **$881,077** | **$754,609** | | Total Current Liabilities | $103,596 | $74,343 | | **Total Liabilities** | **$416,045** | **$297,124** | | Total Stockholders' (Deficit) Equity | ($147,831) | ($477,852) | Consolidated Statement of Operations Highlights (in thousands) | Account | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Total Revenues | $299,972 | $256,108 | | Operating Income | $21,222 | $7,040 | | **Net Income** | **$14,325** | **$127,024** | | Net Income Attributable to Class A Stockholders | $561 | $18,936 | | **Diluted EPS** | **$0.02** | **$0.69** | [Notes to Consolidated Financial Statements](index=95&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information supplementing the consolidated financial statements, covering significant accounting policies, investments, debt, leases, derivatives, related party transactions, segment reporting, and legal contingencies [Note 2: Summary of Significant Accounting Policies](index=95&type=section&id=Note%202:%20Summary%20of%20Significant%20Accounting%20Policies) This note details the company's significant accounting policies, including revenue recognition for various streams, annual goodwill impairment testing, long-lived asset reviews, and accounting for investment tax credits - The company recognizes revenue from Environmental Attributes (RINs, LCFS) when the credits are transferred to the buyer; revenue from construction contracts is recognized over time based on percentage of completion[595](index=595&type=chunk)[607](index=607&type=chunk) - Project development and startup costs, such as virtual pipeline and certification costs for new RNG projects, are expensed and presented as a separate line item in operating expenses[583](index=583&type=chunk) - The company accounts for investment tax credits (ITCs) using the flow-through method, recognizing them as a reduction of income tax expense in the period the credit is generated[651](index=651&type=chunk) [Note 7: Borrowings](index=115&type=section&id=Note%207:%20Borrowings) As of December 31, 2024, total borrowings were **$307.5 million**, primarily from the OPAL Term Loan, a senior secured credit facility, which was amended in March 2025 to extend availability and ease covenants Outstanding Debt (as of Dec 31, 2024, in thousands) | Facility | Outstanding Principal | | :--- | :--- | | OPAL Term Loan and Revolver | $286,617 | | Sunoma Loan | $20,846 | | **Total** | **$307,463** | - The OPAL Term Loan was restructured on September 1, 2023, into a new senior secured credit facility of up to **$500 million** (**$450 million** term loan, **$50 million** revolver)[683](index=683&type=chunk) - On March 3, 2025, the OPAL Term Loan was amended to extend the availability period for delayed draw term loans through March 5, 2026, and extend the commencement of repayment to March 31, 2026[687](index=687&type=chunk)[689](index=689&type=chunk) [Note 10: Related Parties](index=128&type=section&id=Note%2010:%20Related%20Parties) The company has significant transactions with related parties, including an Administrative Services Agreement with Fortistar and a purchase and sale agreement with NextEra for Environmental Attributes, generating **$107.3 million** in revenue in 2024 - The company has a purchase and sale agreement with NextEra for at least **90%** of its Environmental Attributes, generating **$107.3 million** in revenue in 2024 (**$68.4 million** from RNG Fuel, **$38.8 million** from Fuel Station Services)[762](index=762&type=chunk)[764](index=764&type=chunk) - NextEra and Hillman (a Fortistar affiliate) hold redeemable preferred units in OPAL Fuels LLC with an **8% annual dividend**; the redemption option for these units becomes exercisable after November 29, 2025[759](index=759&type=chunk)[761](index=761&type=chunk) - The company incurred **$5.9 million** in fees in 2024 under service agreements with Fortistar and its affiliate for management, IT, and other administrative services[772](index=772&type=chunk)[775](index=775&type=chunk) [Note 11: Reportable Segments and Geographic Information](index=131&type=section&id=Note%2011:%20Reportable%20Segments%20and%20Geographic%20Information) OPAL Fuels operates across three segments: RNG Fuel, Fuel Station Services, and Renewable Power, with Fuel Station Services being the largest by revenue in FY2024 at **$166.9 million**, and all operations are U.S.-based Segment Financial Data (FY 2024, in thousands) | Segment | External Revenue | Segment Income (Loss) | Segment Assets | | :--- | :--- | :--- | :--- | | RNG Fuel | $88,420 | $17,686 | $635,927 | | Fuel Station Services | $166,875 | $33,513 | $179,304 | | Renewable Power | $44,677 | $7,065 | $30,517 | | Corporate | $— | ($52,845) | $35,329 | - The company's Co-CEOs, Adam Comora and Jon Maurer, jointly act as the Chief Operating Decision Maker (CODM) and evaluate performance based on segment net income[779](index=779&type=chunk) [Note 15: Income Taxes](index=139&type=section&id=Note%2015:%20Income%20Taxes) For FY2024, the company recognized an income tax benefit of **$8.9 million**, primarily from the sale of Investment Tax Credits, but recorded a full valuation allowance of **$27.0 million** against net deferred tax assets - The company recorded an income tax benefit of **$8.9 million** in 2024, primarily from the sale of Investment Tax Credits (ITCs)[819](index=819&type=chunk)[651](index=651&type=chunk) - A full valuation allowance of **$27.0 million** was recorded against the company's net deferred tax assets as of December 31, 2024, as realization is not considered more likely than not[821](index=821&type=chunk) [Note 17: Commitments and Contingencies](index=144&type=section&id=Note%2017:%20Commitments%20and%20Contingencies) The company has various commitments and contingencies, including **$15.1 million** in standby letters of credit, purchase options on fueling stations, a **$16.6 million** tax credit guarantee, and ongoing legal proceedings related to the Central Valley RNG projects - As of December 31, 2024, the company had **$15.1 million** in standby letters of credit outstanding[843](index=843&type=chunk) - The company has guaranteed up to **$16.6 million** related to an **$11.1 million** sale of Investment Tax Credits, covering potential disallowance or recapture; this guaranteed amount decreases by **20% annually** over five years[846](index=846&type=chunk)[847](index=847&type=chunk) - A material legal proceeding involves a dispute with the contractor for the Central Valley RNG projects, which has been terminated for default and is now in arbitration[849](index=849&type=chunk)[852](index=852&type=chunk)[853](index=853&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2024, revenue was $80 million and adjusted EBITDA was $22.6 million, compared to $87 million and $32 million in Q4 2023, respectively, indicating a decline in both revenue and EBITDA [34] - The net loss for Q4 2024 was $5.4 million, compared to a net income of $20.1 million in 2023, primarily due to the timing and pricing of environmental credit sales [34] - For the full year 2024, revenue was $299.9 million, adjusted EBITDA was $90 million, and net income was $14.3 million, compared to $256.1 million, $151.9 million, and $127 million in 2023, respectively [34] Business Segment Data and Key Metrics Changes - The fuel station service segment's EBITDA for 2024 was $40.2 million, a 76% increase compared to 2023 [12] - RNG fuel production for 2024 was 3.8 million MMBtus, up 41% from 2023, but slightly below the guidance of 4.0 million MMBtus [12][21] - The company expects adjusted EBITDA growth of 30% to 50% in the fuel station services segment for 2025 compared to 2024 [22][30] Market Data and Key Metrics Changes - The company has increased its RNG projects from two to eleven since going public in 2022, with annual design capacity more than tripling [14][25] - The company expects RNG production in 2025 to range between 5 million to 5.4 million MMBtus, representing a 30% to 40% increase compared to 2024 [21][27] Company Strategy and Development Direction - The company aims to grow organically through new development, with nearly 2 million MMBtus of annual design capacity under construction [14] - The fuel station service segment is seen as a strategic value, providing diversification and predictable cash flows, with a significant growth opportunity in the heavy-duty fleet market [17] - The company is focused on building and operating biogas capture and conversion projects to deliver low-carbon intensity energy products [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2025, despite near-term volatility, citing strong market fundamentals [30] - The company remains bullish on RNG as an American biofuel, emphasizing its alignment with agricultural biofuels and potential public policies [23][24] - Management highlighted the importance of disciplined capital allocation and the ability to generate free cash flow, indicating flexibility in growth and capital preservation strategies [113] Other Important Information - The company has made leadership changes, including the appointment of Kazi Hassan as Chief Financial Officer [18] - The company expects approximately $50 million of cash proceeds from ITC sales in 2025, significantly higher than the $9 million in 2024 [23] Q&A Session Summary Question: Production guidance and expected contributions from projects in construction - Management expects increasing utilizations from facilities and anticipates sequential upticks throughout the year as ramp-up issues are resolved [45][46] Question: Competitive landscape and growth opportunities - Management noted that they are well-positioned to evaluate and pursue new opportunities in the market, particularly in light of recent industry changes [51][56] Question: Inclusion of PTC and 45Z credits in guidance - The company included an immaterial amount of 45Z credits in the low end of the guidance and a small expected value at the top end [62][63] Question: Tightness in the dispensing market and growth drivers - Management indicated that the market has been tightening due to increased RNG supply and slower adoption of new engine models, but they expect growth in dispensing volumes [68][70] Question: Equipment cost inflation and impact of tariffs - Management stated that they commit to equipment costs early in the construction process to mitigate inflation impacts, and overall inflation has been tamed compared to previous years [75][76] Question: Timeline for resolution of the partial waiver - Management is hopeful for a resolution in the April-May timeframe regarding the partial waiver and is actively advocating for it [80] Question: Project development and federal incentives - Management reported no slowdown in early-stage project discussions, emphasizing the urgency from feedstock hosts to move projects forward [108][110] Question: Balance between growth and capital preservation - Management discussed the flexibility to toggle between growth and generating free cash flow, highlighting the low maintenance CapEx of their facilities [113][114] Question: Mix between upstream and downstream segments - Management clarified that while the fuel station services segment is growing, it has not yet reached 50% of the overall EBITDA [120][123]

Financial Performance - OPAL Fuels grew Full Year 2024 Adjusted EBITDA by 73% compared to 2023[14] - 2024 RNG production increased by 41% compared to 2023[14] - Adjusted EBITDA for the full year 2025 is projected to range between $90 million and $110 million, assuming a $2.60/gallon D3 RIN price[22] - Fuel Station Services segment is expected to grow by 30% - 50% in Adjusted EBITDA compared to 2024[22] Operational Growth - Commissioned three landfill RNG facilities in 2024, totaling 3.8 million MMBtu[14] - Put into construction 1.8 million MMBtu of annual RNG design capacity in 2024[14] - Anticipate putting into construction approximately 2.0 million annual MMBtu of RNG annual design capacity in 2025[22] - Total Volumes Sold, Dispensed, and Serviced reached 150.2 Million GGE in 2024[39] Market and Regulatory Factors - D3 RIN Prices increased approximately 55% after the June 2023 Set Rule[68] - RNG production of approximately 800 million GGE per year represents about 2% of the U.S heavy duty fuel market[74]