Segment Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company’s determination of reportable business segments considers the strategic operating units under which the Company makes financial decisions, allocates resources and assesses performance of its retail and asset optimization businesses.

The Company’s reportable business segments are retail natural gas and retail electricity. The retail natural gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. Asset optimization activities, considered an integral part of securing the lowest price natural gas to serve retail gas load, are part of the retail natural gas segment. The Company recorded asset optimization revenues of $284.6 million, $192.4 million and $248.6 million and asset optimization cost of revenues of $282.3 million, $192.1 million and $249.7 million for the years endedDecember 31,2014, 2013 and 2012, respectively, which are presented on a net basis in asset optimization revenues. The retail electricity segment consists of electricity sales and transmission to residential and commercial customers. Corporate and other consists of expenses and assets of the retail natural gas and retail electricity segments that are managed at a consolidated level such as general and administrative expenses.

To assess the performance of the Company’s operating segments, the chief operating decision maker analyzes retail gross margin. The Company defines retail gross margin as operating income plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization revenues, (ii) net gains (losses) on non-trading derivative instruments, and (iii) net current period cash settlements on non-trading derivative instruments. The Company deducts net gains (losses) on non-trading derivative instruments, excluding current period cash settlements, from the retail gross margin calculation in order to remove the non-cash impact of net gains and losses on non-trading derivative instruments.

Retail gross margin is a primary performance measure used by our management to determine the performance of our retail natural gas and electricity business by removing the impacts of our asset optimization activities and net non-cash income (loss) impact of our economic hedging activities. As an indicator of our retail energy business’ operating performance, retail gross margin should not be considered an alternative to, or more meaningful than, operating income, as determined in accordance with GAAP. Below is a reconciliation of retail gross margin to (loss) income before income tax expense.

	Years Ended December 31,
(in thousands)	2014			2013			2012
Reconciliation of Retail Gross Margin to (Loss)income before taxes
(Loss) income before income tax expense	$	(5,156	)	$	31,468		$	26,139
Interest and other income	(263		)	(353		)	(62		)
Interest expense	1,578			1,714			3,363
Operating Income	(3,841		)	32,829			29,440
Depreciation and amortization	22,221			16,215			22,795
General and administrative	45,880			35,020			47,321
Less:
Net asset optimization revenue	2,318			314			(1,136		)
Net, Gains (losses) on non-trading derivative instruments	(8,713		)	1,429			(19,016		)
Net, Cash settlements on non-trading derivative instruments	(6,289		)	653			26,489
Retail Gross Margin	$	76,944		$	81,668		$	93,219

The Company uses retail gross margin and net asset optimization revenues as the measure of profit or loss for its business segments. This measure represents the lowest level of information that is provided to the chief operating decision maker for our reportable segments.

Financial data for business segments are as follows (in thousands):

Year Ended December 31, 2014	Retail Electricity			Retail Natural Gas			Corporate and Other		Eliminations			Total Spark Retail
Total Revenues	$	176,406		$	146,470		$	—	$	—		$	322,876
Retail cost of revenues	149,452			109,164			—		—			258,616
Less:
Net asset optimization revenues	—			2,318			—		—			2,318
Net, Gains (losses) on non-trading derivative instruments	(518		)	(8,195		)	—		—			(8,713		)
Current period settlements on non-trading derivatives	(5,145		)	(1,144		)	—		—			(6,289		)
Retail gross margin	$	32,617		$	44,327		$	—	$	—		$	76,944
Total Assets	$	46,848		$	101,711		$	27,285	$	(37,447	)	$	138,397

Year Ended December 31, 2013	Retail Electricity		Retail Natural Gas			Corporate and Other		Eliminations			Total Spark Retail
Total Revenues	$	191,872	$	125,218		$	—	$	—		$	317,090
Retail cost of revenues	149,885		83,141			—		—			233,026
Less:
Net asset optimization revenues	—		314			—		—			314
Net, Gains (losses) on non-trading derivative instruments	1,336		93			—		—			1,429
Current period settlements on non-trading derivatives	1,349		(696		)	—		—			653
Retail gross margin	$	39,302	$	42,366		$	—	$	—		$	81,668
Total Assets	$	41,879	$	87,985		$	953	$	(21,744	)	$	109,073

Year Ended December 31, 2012	Retail Electricity			Retail Natural Gas			Corporate and Other		Eliminations		Spark Retail
Total Revenues	$	256,357		$	122,705		$	—	$	—	$	379,062
Retail cost of revenues	202,440			77,066			—		—		279,506
Less:
Net asset optimization revenues	—			(1,136		)	—		—		(1,136		)
Net, Gains (losses) on non-trading derivative instruments	(17,400		)	(1,616		)	—		—		$	(19,016	)
Current period settlements on non-trading derivatives	18,577			7,912			—		—		26,489
Retail gross margin	$	52,740		$	40,479		$	—	$	—	$	93,219

Significant Customers

For the years ended December 31, 2014, 2013 and 2012, we had one significant customer that individually accounted for more than 10% of the Company’s combined and consolidated net asset optimization revenues.

Significant Suppliers

For the years ended December 31, 2014, 2013 and 2012, we had one significant supplier that individually accounted for more than 10% of the Company’s combined and consolidated net asset optimization revenues cost of revenues.

For the years ended December 31, 2014, and 2013, the Company had three and one significant suppliers that individually accounted for more than 10% of the Company’s combined and consolidated retail electricity retail cost of revenues, respectively. There were no significant suppliers for retail electricity in 2012.