Segment Reporting

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

16. Segment Reporting

Our determination of reportable business segments considers the strategic operating units under which we make financial decisions, allocate resources and assess performance of our business. Our reportable business segments are retail electricity and retail natural gas. The retail electricity segment consists of electricity sales and transmission to residential and commercial customers. The retail natural gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. Corporate and other consists of expenses and assets of the retail electricity and natural gas segments that are managed at a consolidated level such as general and administrative expenses. Asset optimization activities are also included in Corporate and other.

For the years ended December 31, 2020, 2019 and 2018, we recorded asset optimization revenues of $24.8 million, $62.8 million and $113.7 million and asset optimization cost of revenues of $25.5 million, $60.0 million and $109.2 million, respectively, which are presented on a net basis in asset optimization revenues.

We use retail gross margin to assess the performance of our operating segments. Retail gross margin is defined as operating income (loss) plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization revenues (expenses), (ii) net gains (losses) on non-trading derivative

instruments, and (iii) net current period cash settlements on non-trading derivative instruments. We deduct 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 these derivative instruments. Retail gross margin should not be considered an alternative to, or more meaningful than, operating income (loss), as determined in accordance with GAAP.

Below is a reconciliation of retail gross margin to income (loss) before income tax expense (in thousands):

	Years Ended December 31,
(in thousands)	2020		2019		2018
Reconciliation of Retail Gross Margin to Income (loss) before taxes
Income (loss) before income tax expense	$	83,954	$	21,470	$	(12,315)
Gain on disposal of eRex	—		(4,862)		—
Total other income/(expense)	(423)		(1,250)		(749)
Interest expense	5,266		8,621		9,410
Operating income (loss)	88,797		23,979		(3,654)
Depreciation and amortization	30,767		40,987		52,658
General and administrative	90,734		133,534		111,431
Less:
Net asset optimization (expense) revenue	(657)		2,771		4,511
Net, losses on non-trading derivative instruments	(23,439)		(67,955)		(19,571)
Net, cash settlements on non-trading derivative instruments	37,921		42,944		(9,614)
Retail Gross Margin	$	196,473	$	220,740	$	185,109

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

Year Ended December 31, 2020
	Retail Electricity		Retail Natural Gas		Corporate and Other		Eliminations		Consolidated
Total Revenues	$	461,393	$	94,154	$	(657)	$	—	$	554,890
Retail cost of revenues	306,012		38,580		—		—		344,592
Less:
Net asset optimization revenue	—		—		(657)		—		(657)
Net, losses on non-trading derivative instruments	(23,242)		(197)		—		—		(23,439)
Current period settlements on non-trading derivatives	35,390		2,531		—		—		37,921
Retail gross margin	$	143,233	$	53,240	$	—	$	—	$	196,473
Total Assets	$	2,906,139	$	941,569	$	318,865	$	(3,799,906)	$	366,667
Goodwill	$	117,813	$	2,530	$	—	$	—	$	120,343

Year Ended December 31, 2019
	Retail Electricity		Retail Natural Gas		Corporate and Other		Eliminations		Consolidated
Total Revenues	$	688,451	$	122,503	$	2,771	$	—	$	813,725
Retail cost of revenues	552,250		62,975		—		—		615,225
Less:
Net asset optimization expense	—		—		2,771		—		2,771
Net, losses on non-trading derivative instruments	(66,180)		(1,775)		—		—		(67,955)
Current period settlements on non-trading derivatives	41,841		1,103		—		—		42,944
Retail gross margin	$	160,540	$	60,200	$	—	$	—	$	220,740
Total Assets	$	2,524,884	$	820,601	$	341,411	$	(3,263,928)	$	422,968
Goodwill	$	117,813	$	2,530	$	—	$	—	$	120,343

Year Ended December 31, 2018
	Retail Electricity		Retail Natural Gas		Corporate and Other		Eliminations		Consolidated
Total Revenues	$	863,451	$	137,966	$	4,511	$	—	$	1,005,928
Retail cost of revenues	762,771		82,722		—		—		845,493
Less:
Net asset optimization expense	—		—		4,511		—		4,511
Net, Losses on non-trading derivative instruments	(15,200)		(4,371)		—		—		(19,571)
Current period settlements on non-trading derivatives	(8,788)		(826)		—		—		(9,614)
Retail gross margin	$	124,668	$	60,441	$	—	$	—	$	185,109
Total Assets	$	1,857,790	$	649,969	$	361,697	$	(2,380,718)	$	488,738
Goodwill	$	117,813	$	2,530	$	—	$	—	$	120,343

Significant Customers

For each of the years ended December 31, 2020, 2019 and 2018, we did not have any significant customers that individually accounted for more than 10% of our consolidated retail revenue.

Significant Suppliers

For each of the years ended December 31, 2020, 2019 and 2018, we had one, one, and two significant suppliers that individually accounted for more than 10% of our consolidated retail cost of revenues. For each of the years ended December 31, 2020, 2019 and 2018, these suppliers accounted for 11%, 10% and 28% of our consolidated cost of revenue.