Note 5—Acquisitions and Discontinued Operations
Acquisition of Solar System Facilities
On November 3, 2023, the Company acquired ten special-purpose entities that own and operate solar system facilities in Ohio and Michigan. The Company paid a total of $7.5 million, including $1.0 million being held in escrow to be released to the sellers upon satisfaction of the conditions set forth in the related purchase agreement.
The acquisition has been accounted for as asset acquisition and the Company recorded $7.7 million in total purchase price, including $0.2 million of direct transaction cost allocated to solar arrays assets included in the property and equipment account in the consolidated balance sheet with estimated useful lives of 14 to 30 years.
On November 3, 2023, the Company also signed an agreement to purchase from the sellers another special purpose entity that owned and operated a solar system facility in Indiana, for $1.3 million, subject to the satisfaction of certain closing conditions. In February 2024, the purchase of the solar system facility in Indiana was completed after the closing conditions were met. The acquisition has been accounted for as asset acquisition and the Company recorded $1.3 million to solar arrays assets included in the property and equipment account in the consolidated balance sheet with estimated useful lives of 30 years.
The acquired assets are allocated to the Renewables segment.
Lumo Finland and Lumo Sweden Operations
As a result of the sustained volatility of the energy market in Europe, in the third quarter of 2022, the Company decided to discontinue the operations of Lumo Finland and Lumo Sweden. From July 13, 2022 to July 19, 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden. The sale price has been fixed and is expected to continue to be settled monthly based on the monthly commodity volume specified in the instruments from September 2022 to March 2025.
The Company determined that the discontinued operations of Lumo Finland and Lumo Sweden represented a strategic shift that would have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations are presented separately and reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of March 31, 2024 and December 31, 2023. Lumo Sweden is continuing to liquidate their remaining receivables and settle any remaining liabilities.
In November 2022, Lumo Finland declared bankruptcy and the administration of Lumo Finland was transferred to an administrator (the "Lumo Administrators"). All assets and liabilities of Lumo Finland remain with Lumo Finland, in which Genie retains its equity ownership interest, however, the management and control of Lumo Finland were transferred to the Lumo Administrators. Since the Company lost control of the management of Lumo Finland in favor of the Lumo Administrators, the accounts of Lumo Finland were deconsolidated effect November 9, 2022.
The following table represents summarized balance sheet information of assets and liabilities of the discontinued operations of Lumo Sweden:
| | March 31, 2024 | | | December 31, 2023 |
|
|
| (in thousands) |
|
Assets | | | | | | |
Cash | | $ | 2,886 | | | $ | 2,483 | |
Receivables from the settlement of derivative contract—current | | | 8,406 | | | | 10,699 | |
Current assets of discontinued operations | | $ | 11,292 | | | $ | 13,182 | |
|
|
|
|
|
|
|
|
|
| Receivables from the settlement of derivative contract—noncurrent |
| $ | 426 |
|
| $ | 2,362 |
|
| Other noncurrent assets |
|
| 4,107 |
|
|
| 5,078 |
|
| Noncurrent assets of discontinued operations |
| $ | 4,533 |
|
| $ | 7,440 |
|
|
|
|
|
|
|
|
|
|
Liabilities | | | | | | | | |
| Income taxes payable |
|
| 1,721 |
|
|
| 1,399 |
|
Accounts payable and other current liabilities | | | 31 |
| | | 91 | |
Current liabilities of discontinued operations | | $ | 1,752 | | | $ | 1,490 | |
|
|
|
|
|
|
|
|
|
| Deferred tax liabilities |
|
| 681 |
|
|
| 698 |
|
| Noncurrent liabilities of discontinued operations |
| $ | 681 |
|
| $ | 698 |
|
The summary of the results of operations of the discontinued operations of Lumo Finland and Lumo Sweden were as follows:
|
| Three Months Ended March 31, |
|
|
| 2024 |
|
|
| 2023 |
|
|
| (in thousands) |
|
|
|
|
|
|
|
|
Income from operations | $ | — | |
| $ | — | |
Other income, net | | 551 | |
|
| 250 | |
Income before income taxes | | 551 | |
|
| 250 | |
Provision for income taxes | | (816 | ) |
|
| (68 | ) |
Net (loss) income from discontinued operations, net of taxes | $ | (265 | ) |
| $ | 182 | |
| Income before income taxes attributable to Genie Energy Ltd. | $ | 551 | |
| $ | 250 | |
The following table presents a summary of cash flows of the discontinued operations of Lumo Finland and Lumo Sweden:
| | |
|
|
| Three Months Ended March 31,
|
|
| | | | | | |
|
|
| 2024 |
|
|
| 2023 |
|
| | |
|
| (in thousands) |
|
| | | | | | |
|
|
|
|
|
|
|
|
|
Net (loss) income | | | | | | | |
| $ | (265 | ) |
| $ | 182 |
|
Non-cash items | | | | | | |
|
|
| 541 | |
|
| 62 |
|
Changes in assets and liabilities | | | | | | | |
|
| 3,932 |
|
|
| 9,470 | |
Cash flows provided by operating activities of discontinued operations | | | | | | | |
| $ | 4,208 |
|
| $ | 9,714 |
|
Prior to being treated as discontinued operations or consolidated, the assets and liabilities of Lumo Finland and Lumo Sweden were included in GRE International segment.
On November 8, 2023, the Lumo Administrators, acting on behalf of the Bankruptcy Estate, filed a claim in the District Court of Helsinki against Genie Nordic, a wholly owned subsidiary of the Company and the parent company of Lumo Finland, its directors, officers and affiliates, in which it alleges that the gain from the sale of swap instruments owned by Lumo Sweden amounting to €35.2 million (equivalent to $38.0 million as of March 31, 2024) belongs to the Bankruptcy Estate. The Company believes that the Lumo Administrators' position is without merit, and it intends to vigorously defend its position against the Lumo Administrators' claims.
Genie was also notified that the Lumo Administrators filed a claim against one of Lumo Finland’s suppliers, seeking to recover payments made by Lumo Finland amounting to €4.2 million (equivalent to $4.5 million as of March 31, 2024) prior to the bankruptcy. Related to such payment, the Lumo Administrators have filed a recovery claim jointly against the Company and the supplier for €1.6 million (equivalent to $1.7 million as of March 31, 2024) alleging that a portion of the payment to Lumo Finland effectively reduced the Company's liability under the terms of a previously supplied parental guarantee (this €1.6 million is included within and not additive to the €4.2 million). The Lumo Administrators allege that the payments represented preferential payments and therefore belong to the bankruptcy estate which are recoverable under the laws of Finland. The Company intends to challenge the Lumo Administrators' claims. Should the Lumo Administrators succeed in clawing back the funds from the supplier, it is possible that the supplier may seek to recover its losses against the Company, under terms of the parental guarantee. At this time, there is insufficient basis to assess an amount of any probable loss.
U.K. Operations
In the third quarter of 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted the Company to start the process of orderly withdrawal from the United Kingdom. In October 2021, as part of the orderly exit process, Orbit and Shell agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.
Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transfer the administration of Orbit to Orbit Administrators effective December 1, 2021, which transfer was effective December 1, 2021. All assets and liabilities of Orbit, including cash and receivables remained with Orbit and the management and control of which was transferred to Orbit Administrators. As a result of loss of control, the Company deconsolidated Orbit effective December 1, 2021 and estimated the remaining liability related to its ownership of Orbit.
The Company determined that the discontinued operations of Orbit represented a strategic shift that would have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations effective December 1, 2021.
On November 21, 2023, the Court issued an order to cease the administration and revert the control of Orbit from the Orbit Administrators to the Company effective November 28, 2023. Following the Company regaining control of the management of Orbit, the accounts of Orbit were reconsolidated effective November 28, 2023. In 2023, the Orbit Administrators paid the Company a return of its interest in Orbit of £18.8 million (equivalent to $23.7 million on the dates of transfer).
Upon reconsolidation of the accounts of Orbit, the Company recorded cash and accrued expenses of $21.1 million and $0.8 million, respectively. At March 31, 2024 Orbit had income tax payable of $6.8 million, included in current liabilities of discontinued operations in the consolidated balance sheet. At December 31, 2023 Orbit has income tax payable and accrued expenses of $2.6 million and $0.8 million, respectively, included in current liabilities of discontinued operations in the consolidated balance sheet.
There were no income or loss from discontinued operations recognized in the three months ended March 31, 2024. In the three months ended March 31, 2023, the Company recognized income from discontinued operation, net of taxes of $2.9 million mainly from the increase in the estimated value of our investments in Orbit due to a change in estimated net assets of Orbit after the expected settlement of the liabilities by the Orbit Administrators.
Prior to being treated as discontinued operations and deconsolidation, the assets and liabilities of Orbit were included in the Company's former GRE International segment.
The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission (or SEC).
As used below, unless the context otherwise requires, the terms “the Company,” “Genie,” “we,” “us,” and “our” refer to Genie Energy Ltd., a Delaware corporation, and its subsidiaries, collectively.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed below under Part II, Item IA and under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the year ended December 31, 2023.
Overview
We are comprised of Genie Retail Energy ("GRE") and Genie Renewables.
GRE owns and operates retail energy providers ("REPs"), including IDT Energy, Residents Energy, Town Square Energy ("TSE"), Southern Federal and Mirabito Natural Gas. GRE's REPs' businesses resell electricity and natural gas primarily to residential and small business customers, with the majority of the customers in the Eastern and Midwestern United States and Texas.
Genie Renewables holds our 95.5% interest in Genie Solar, an integrated solar energy company, our 92.8% interest in CityCom Solar, a marketer of community solar and other sales solutions and our 96.0% interest in Diversegy, an energy broker.
Genie Solar holds our interest in Sunlight Energy, a solar energy developer and operator and our 60.0% interest in Prism Solar Technology ("Prism") which designs and manufactures specialized solar panels.
As part of our ongoing business development efforts, we seek out new opportunities, which may include complementary operations or businesses that reflect horizontal or vertical expansion from our current operations. Some of these potential opportunities are considered briefly and others are examined in further depth. In particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses.
Discontinued Operations in Finland and Sweden
As a result of volatility in the energy market in Europe, in the third quarter of 2022, we decided to discontinue the operations of Lumo Energia Oyj ("Lumo Finland") and Lumo Energi AB ("Lumo Sweden"). In July 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden. The sale price is to be settled monthly based on the monthly commodity volume specified in the instruments from September 2022 to March 2025. The Company also entered into a series of transactions to transfer the customers of Lumo Finland and Lumo Sweden to other suppliers.
We determined that the discontinued operations of Lumo Finland and Lumo Sweden represented a strategic shift that would have a major effect on our operations and financial statements. We account for these businesses as discontinued operations and accordingly, present the results of operations and related cash flows as discontinued operations for all periods presented. Any remaining assets and liabilities of the discontinued operations are presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of March 31, 2024 and December 31, 2023. Lumo Finland and Lumo Sweden are continuing to liquidate their remaining receivables and settle any remaining liabilities.
On November 7, 2022, Lumo Finland filed a petition for bankruptcy, which was approved by the Helsinki District Court on November 9, 2022. The administration of Lumo Finland was transferred to an administrator (the "Lumo Administrators"). All assets and liabilities of Lumo Finland remain with Lumo Finland, in which we retain our equity ownership interest, however, the management and control of Lumo Finland were transferred to the Lumo Administrators. Since the Company lost control of the management of Lumo Finland in favor of the Lumo Administrators, the accounts of Lumo Finland were deconsolidated effective November 9, 2022.
Net loss from discontinued operations of Lumo Finland and Lumo Sweden, net of taxes was $0.3 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.
Following the discontinuance of operations of Lumo Finland and Lumo Sweden, GRE International ceased to be a segment and the remaining assets and liabilities and results of continuing operations of GRE International were combined with corporate.
On November 8, 2023, the Lumo Administrators, acting on behalf of the Bankruptcy Estate, filed a claim in the District Court of Helsinki against Genie Nordic, its directors, officers and affiliates, in which it alleges that the gain from the sale of swap instruments owned by Lumo Sweden amounting to €35.2 million (equivalent to $38.0 million as of March 31, 2024) belongs to the Bankruptcy Estate. We believe that the Lumo Administrators' position is without merit, and we intend to vigorously defend our position against the Administrators' claims.
We are also notified that the Lumo Administrators filed a claim against one of Lumo Finland’s suppliers, seeking to recover payments made by Lumo Finland amounting to €4.2 million (equivalent to $4.5 million as of March 31, 2024) prior to the bankruptcy. Related to such payment, the Lumo Administrators have filed a recovery claim jointly against us and the supplier for €1.6 million (equivalent to $1.7 million as of March 31, 2024) alleging that a portion of the payment to Lumo Finland effectively reduced our liability under the terms of a previously supplied parental guarantee (this €1.6 is included within and not additive to the €4.2 million). The Lumo Administrators allege that the payments represented preferential payments and therefore belong to the bankruptcy estate which are recoverable under the laws of Finland. We intend to challenge the Lumo Administrators' claims. Nevertheless, should the Lumo Administrators succeed in clawing back the funds from the supplier, it is possible that the supplier will seek to recover its losses against us, under terms of the parental guarantee. At this time there is insufficient basis to assess an amount of any probable loss
Discontinued Operations in the United Kingdom
On November 29, 2021 Orbit Energy Limited ("Orbit"), which operated in United Kingdom was declared and its customers were transferred to a “supplier of last resort.” Effective December 1, 2021, the administration of Orbit was transferred to a third party Administrators (the "Orbit Administrators"). The accounts of Orbit were deconsolidated from those of the Company effective December 1, 2021.
We determined that the discontinued operations of Orbit represented a strategic shift that would have a major effect on our operations and the financial statements. Since the appointment of the Orbit Administrators, we accounted their businesses as discontinued operations and accordingly, have presented the results of operations and related cash flows as discontinued operations. Any remaining assets and liabilities of the discontinued operations have been presented separately, and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of December 31, 2022. Since the Company lost control of the management of Orbit in favor of the Orbit Administrators, the accounts of Orbit were deconsolidated effective December 1, 2021.
On November 28, 2023, the administration of Orbit ceased and the control of Orbit reverted back to the Company from the Orbit Administrators. The accounts of Orbit were reconsolidated with those of the Company effective November 28, 2023.
There were no income or loss from discontinued operations recognized in the three months ended March 31, 2024. In the three months ended March 31, 2023, the Company recognized income from discontinued operation, net of taxes of $2.9 million mainly from the increase in the estimated value of our investments in Orbit due to a change in estimated net assets of Orbit after the Orbit Administrators settle the liabilities.
Genie Retail Energy
GRE operates REPs that resell electricity and/or natural gas to residential and small business customers in Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Texas, Rhode Island, and Washington, D.C. GRE’s revenues represented approximately 94.0% and 96.3% of our consolidated revenues in the three months ended March 31, 2024 and March 31, 2023, respectively.
Seasonality and Weather; Climate Change and Volatility in Pricing
The weather and the seasons, among other things, affect GRE’s REPs' revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effects. Unseasonable temperatures in other periods may also impact demand levels. Potential changes in global climate may produce, among other possible conditions, unusual variations in temperature and weather patterns, resulting in unusual weather conditions, more intense, frequent and extreme weather events and other natural disasters. Some climatologists believe that these extreme weather events will become more common and more extreme, which will have a greater impact on our operations. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately 48.1% and 39.7% of GRE’s natural gas revenues for the relevant years were generated in the first quarter of 2023 and 2022 respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 32.5% and 30.5% of GRE’s electricity revenues for 2023 and 2022 respectively, were generated in the third quarters of those years. GRE's REP's revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.
In addition to the direct physical impact that climate change may have on our business, financial condition and results of operations because of the effect on pricing, demand for our offerings and/or the energy supply markets, we may also be adversely impacted by other environmental factors, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing greenhouse gas emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services.
Purchase of Receivables and Concentration of Credit Risk
Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which GRE operates. GRE’s REPs reduce their customer credit risk by participating in POR programs for a majority of their receivables. In addition to providing billing and collection services, utility companies purchase those REPs’ receivables and assume all credit risk without recourse to those REPs. GRE’s REPs’ primary credit risk is therefore nonpayment by the utility companies. In the three months ended March 31, 2024 the associated cost was approximately 1.0% of GRE revenue and approximately 0.9% for the three months ended March 31, 2023, respectively. At March 31, 2024, 86.7% of GRE’s net accounts receivable were under a POR program. Certain of the utility companies represent significant portions of our consolidated revenues and consolidated gross trade accounts receivable balance during certain periods, and such concentrations increase our risk associated with nonpayment by those utility companies.
The following table summarizes the percentage of consolidated trade receivables by customers that equal or exceed 10.0% of consolidated net trade receivables at March 31, 2024 and December 31, 2023 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as of March 31, 2024 or December 31, 2023).
|
| March 31, 2024 |
|
| December 31, 2023 |
|
Customer A | |
| 19.9 | % | |
| 21.4 | % |
na—less than10.0% of consolidated net trade receivables at the relevant date
The following table summarizes the percentage of revenues by customers that equal or exceed 10.0% of consolidated revenues for the three months ended March 31, 2024 or 2023 (no other single customer accounted for 10.0% or greater of our consolidated revenues for the three months ended March 31, 2024 or 2023):
|
|
| Three Months Ended March 31, |
|
|
| 2024
|
|
| 2023
|
|
Customer A
|
|
| 21.8 | % |
|
| na |
|
na—less than 10.0% of consolidated revenue in the period
Legal Proceedings
Although GRE endeavors to maintain best sales and marketing practices, such practices have been the subject of class action lawsuits in the past.
See Note 18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference.
From time to time, the Company responds to inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made. See Note 18, Commitments and Contingencies, in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which is incorporated by reference, for further detail on agency and regulatory proceedings.
Critical Accounting Policies
Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require the application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to revenue recognition, allowance for doubtful accounts, acquisitions, goodwill, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.
Recently Issued Accounting Standards
Information regarding new accounting pronouncements is included in Note 20—Recently Issued Accounting Standards, to the current period’s consolidated financial statements.
Results of Operations
We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023
Genie Retail Energy Segment
| | Three months ended March 31, |
| | Change | |
(amounts in thousands) | | 2024 | | | 2023 | | | $ | | | % | |
Revenues: | | | | | | | | | | | |
Electricity | | $ | 89,396 | | | $ | 74,487 | | | $ | 14,909 | | | | 20.0 | % |
Natural gas | | | 22,398 | | | | 26,925 | | | | (4,527 | ) | | | (16.8 | ) |
| Others |
|
| 671 |
|
|
| — |
|
|
| 671 |
|
|
| nm |
|
Total revenues | | | 112,465 | | | | 101,412 | | | | 11,053 | | | | 10.9 | |
Cost of revenues | | | 80,270 | | | | 68,874 | | | | 11,396 | | | | 16.5 | |
Gross profit | | | 32,195 | | | | 32,538 | | | | (343 | ) | | | (1.1 | ) |
Selling, general and administrative expenses | | | 17,947 | | | | 16,093 | | | | 1,854 | | | | 11.5 | |
Income from operations | | $ | 14,248 | | | $ | 16,445 | | | $ | (2,197 | ) | | | (13.4 | ) |
nm—not meaningful
Revenues. Electricity revenues increased by 20.0% in the three months ended March 31, 2024 compared to the same period in 2023. The increase was due to an increase in electricity consumption partially offset by a decrease in the average price per kilowatt hour charged to customers in the three months ended March 31, 2024 compared to the same period in 2023. Electricity consumption by GRE’s REPs' customers increased by 34.0% in the three months ended March 31, 2024, compared to the same period in 2023, reflecting an 18.4% increase in the average number of meters served and a 13.2% increase in average consumption per meter. The increase in meters served was driven by strong customer acquisitions during 2023 that continued into 2024 which had been curtailed during 2023 due to market conditions. The increase in per meter consumption is due to colder weather in the three months ended March 31, 2024 compared to the same period in 2022. The average rate per kilowatt hour sold decreased 10.4% in the three months ended March 31, 2024 compared to the same period in 2023 due to the shift in the mix of customers and products sold during the quarters.
GRE’s natural gas revenues decreased by 16.8% in the three months ended March 31, 2024 compared to the same period in 2023. The decrease was a result of a decrease in average revenue per therm sold partially offset by an increase in natural gas consumption. The average revenue per therm sold decreased by 22.6% in the three months ended March 31, 2024, compared to the same period in 2023. The decrease in revenue per therm was driven by an increase in the portion of the customer base consisting of commercial customers with fixed rates compared to customers with variable rates in the three months ended March 31, 2024 compared to the same period in 2023. Natural gas consumption by GRE’s REPs’ customers increased by 7.5% in the three months ended March 31, 2024 compared to the same period in 2023, reflecting a 6.0% increase in average meters served in the three months ended March 31, 2024 compared to the same period in 2023, partially offset by a 1.4% decrease in average consumption per meter.
Other revenues in the three months ended March 31, 2024 included revenues from the sale of petroleum products in Israel.
The customer base for GRE’s REPs as measured by meters served consisted of the following:
(in thousands) | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30, 2023 | | | March 31, 2023 | |
Meters at end of quarter: | | | | | | | | | | | | | | | |
Electricity customers | | 281 | | | | 279 | | | | 304 | | | | 301 | | | | 271 | |
Natural gas customers | | 83 | | | | 82 | | | | 81 | | | | 80 | | | | 78 | |
Total meters | | 364 | | | | 361 | | | | 385 | | | | 381 | | | | 349 | |
Gross meter acquisitions in the three months ended March 31, 2024, were 70,000 compared to 129,000 for the same period in 2023. In the first quarter of 2023, we resumed customer acquisition activities using a variety of new and existing channels after a "strategic pause" implemented from the fourth quarter of 2021 through 2022.
Meters served increased by 3,000 meters or 0.8% from December 31, 2023 to March 31, 2024. The increase in the number of meters served at March 31, 2024 compared to December 31, 2023 was due to continued acquisition activities in 2024 and 2023 as discussed above.
In the three months ended March 31, 2024, average monthly churn increased to 5.5% compared to 4.4% for same period in 2023.
The average rates of annualized energy consumption, as measured by RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.
(in thousands) | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30, 2023 | | | March 31, 2023 | |
RCEs at end of quarter: | | | | | | | | | | | | | | | |
Electricity customers | | 267 | | | | 272 | | | | 298 | | | | 304 | | | | 276 | |
Natural gas customers | | 81 | | | | 78 | | | | 77 | | | | 76 | | | | 77 | |
Total RCEs | | 348 | | | | 350 | | | | 375 | | | | 380 | | | | 353 | |
RCEs at March 31, 2024 decreased 0.6% compared to December 31, 2023. The increase is due to the resumption of customer acquisition activities as discussed above.
Cost of Revenues and Gross Margin Percentage. GRE’s cost of revenues and gross margin percentage were as follows:
| | | Three Months Ended March 31, | | | Change | |
| (amounts in thousands) | | 2024 | | | 2023 | | | $ | | | % | |
| Cost of revenues: | | | | | | | | | | | | |
| Electricity | | $ | 65,717 | | | $ | 45,766 | | | $ | 19,951 | | | | 43.6 | |
| Natural gas | | | 13,888 | | | | 23,108 | | | | (9,220 | ) | | | (39.9 | ) |
| Others |
|
| 665 |
|
|
| — |
|
|
| 665 |
|
|
| nm |
|
| Total cost of revenues | | $ | 80,270 | | | $ | 68,874 | | | $ | 11,396 | | | | 16.5 | |
nm—not meaningful
| | | Three months ended March 31, |
|
| (amounts in thousands) | | 2024 | | | 2023 | | | Change |
|
| Gross margin percentage: | | | | | | | | |
|
| Electricity | | 26.5 | % | | 38.6 | % | | (12.1 | ) |
| Natural gas | | 38.0 | | | 14.2 | | | 23.8 | |
| Others |
| 0.9 |
|
| — |
|
| 0.9 |
|
| Total gross margin percentage | | 28.6 | % | | 32.1 | % | | (3.5 | ) |
Cost of revenues for electricity increased in the three months ended March 31, 2024 compared to the same period in 2023 primarily because of increases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity increased 7.2% in the three months ended March 31, 2024 compared to the same period in 2023 due to an increase in the average wholesale price of electricity. The gross margin on electricity sales decreased in the three months ended March 31, 2024 compared to the same period in 2023 because the average unit cost of electricity increased while the average rate charged to customers decreased.
Cost of revenues for natural gas decreased in the three months ended March 31, 2024 compared to the same period in 2023 primarily because of a decrease in the average unit cost of natural gas partially offset by an increase in the natural gas consumption by GRE's REPs' customers. The average unit cost of natural gas decreased by 44.1% per therm in the three months ended March 31, 2024 compared to the same period in 2023 to a decrease in the wholesale price of natural gas. Gross margin on natural gas sales increased in the three months ended March 31, 2024 compared to the same period in 2023 because the average rate charged to customers decreased less than the decrease in the average unit cost of natural gas.
Selling, General and Administrative. Selling, general and administrative expenses increased by 11.5% in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to increases in marketing and customer acquisition costs, employee-related costs, POR program fees, processing fees and provision of doubtful account. Marketing and customer acquisition expenses increased by $0.6 million in the three months ended March 31, 2024 compared to the same period in 2023 as a result of an increase in the number of meters acquired during 2023 period. Employee-related expenses increased by $0.3.0 million in the three months ended March 31, 2024 compared to the same period in 2023 primarily due to an increase in the number of employees. POR program fees increased by $0.3. million in the three months ended March 31, 2024 compared to the same period in 2023 as a result of changes in rates implemented by several utilities. Processing fees increased by $0.2 million in the three months ended March 31, 2024 compared to the same period in 2023 as a result of a higher level of activities from an increase in the number of meters. Provision for doubtful accounts increased by $0.2 million in the three months ended March 31, 2024 compared to the same period in 2023 as a result of increase in revenues in non-POR territories. As a percentage of GRE’s total revenues, selling, general and administrative expense increased from 15.9% in the three months ended March 31, 2023 to 16.0% in the three months ended March 31, 2024.
Genie Renewables Segment
The Genie Renewables (formerly GES) segment is composed of Genie Solar, CityCom Solar and Diversegy. Genie Solar is an integrated solar energy company that develops, constructs and operates solar energy projects for commercial and industrial customers as well as its own portfolio. CityCom Solar is a marketer of alternative products and services complementary to our energy offerings. Diversegy provides energy brokerage and advisory services to commercial and industrial customers.
| | Three Months Ended March 31, | | | Change | |
| (amounts in thousands) | | 2024 | | | 2023 | | | $ | | | % | |
Revenues | | $ | 7,223 | | | $ | 3,864 | | | $ | 3,359 | | | | 86.9 | % |
Cost of revenue | | | 5,632 | | | | 3,116 | | | | 2,516 | | | | 80.7 | |
Gross profit | | | 1,591 | | | | 748 | | | | 843 | | | | 112.7 | |
| Selling, general and administrative expenses | | | 2,236 | | | | 1,896 | | | | 340 | | | | 17.9 | |
Loss from operations | | $ | (645 | ) | | $ | (1,148 | ) | | $ | (503 | ) | | | (43.8 | ) |
Revenue. Genie Renewables' revenues increased in the three months ended March 31, 2024 compared to the same period in 2023. The increases in revenues were the result of increases in revenues from the development of the solar projects for customers from Genie Solar, revenues from Diversegy that includes commissions, entry fees and other fees from our energy brokerage and marketing services businesses, partially offset by decreases in commissions from selling third-party products to customers by CityCom Solar and sale of solar panels by Prism. Genie Solar projects had significant progress in the in the three months ended March 31, 2024 compared to the same period in 2023.
Cost of Revenues. The variations in the cost of revenues for the three months ended March 31, 2024 compared to the same periods in 2023 are consistent with the variations in revenues of Genie Solar, Diversegy, CityCom Solar and Prism. In the first quarter of 2024, we recorded a $0.4 million charge to the cost of revenues of Genie Solar to write down the carrying value of solar panel inventories to the estimated net realizable value.
Selling, General and Administrative. Selling, general and administrative expenses increased in the three months ended March 31, 2024 compared to the same periods in 2023 primarily due to increases in headcount in Genie Solar and Diversegy, consulting fees and warehousing costs at Genie Solar and depreciation from the solar arrays acquired by Genie Solar in the last six months.
Corporate
As discussed above, the remaining accounts of GRE International were transferred to corporate starting in the third quarter of 2022. Entities under corporate do not generate any revenues, nor does it incur any cost of revenues. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expense and other corporate-related general and administrative expenses.
| | Three Months Ended March 31, | | | Change | |
| (amounts in thousands) | | 2024 | | | 2023 | | | $ | | | % | |
| General and administrative expenses |
| 2,718 |
|
| 4,022 |
|
| (1,304 | ) |
| (32.4) |
|
| Provision for captive insurance liability |
| 1,036 |
|
| — |
|
| 1,036 |
|
| nm |
|
General and administrative expenses and loss from operations | | $ | 3,754 | | | $ | 4,022 | | | $ | (268 | ) | | | (6.7 | )% |
Corporate general and administrative expenses decreased in the three months ended March 31, 2024 compared to the same period in 2023, primarily because of decreases in employee-related cost and professional and consulting fees. As a percentage of our consolidated revenues, Corporate general and administrative decreased to 2.3% in the three months ended March 31, 2024 from 3.8% in the three months ended March 31, 2023.
In December 2023, we established a wholly-owned captive insurance subsidiary (the "Captive") with the primary purpose of enhancing our risk financing strategies. In December 2023, we paid $51.2 million premiums to Captive, which amount is included in restricted cash in our consolidated balance sheet as of December 31, 2023. The Captive must maintain a sufficient level of cash to fund future reserve payment and secure the insurer's liabilities, particularly those related to the insured risks. We also recognized a $1.0 million provision for captive insurance liability for the three months ended March 31, 2024 related to Captive's exposure for the insured risks.
Consolidated
Selling, general and administrative expenses. Stock-based compensation expense included in consolidated selling, general and administrative expenses was $0.9 million in the three months ended March 31, 2024 and 2023. At March 31, 2024, the aggregate unrecognized compensation cost related to non-vested stock-based compensation was $1.7 million. The unrecognized compensation cost is recognized over the expected service period.
The following is a discussion of our consolidated income and expense line items below income from operations:
| | | Three Months Ended March 31, | | | Change | |
| (amounts in thousands) | | 2024 | | | 2023 | | | $ | | | % | |
| Income from operations | | $ | 9,849 | | | $ | 11,275 | | | $ | (1,426 | ) | | | (12.6) | % |
| Interest income | | | 1,340 | | | | 974 | | | | 366 | | | | 37.6 | |
| Interest expense | | | (32 | ) | | | (19 | ) | | | 13 | | | | 68.4 | |
| Other income, net | | | 80 | | | | 3,246 | | | | (3,166 | ) | | | (97.5) | |
| Gain (loss) on marketable equity securities and investments | | | 117 | | | | (71 | ) | | | 188 | | | | 264.8 | |
| Provision for benefit from income taxes | | | (2,920 | ) | | | (4,068 | ) | | | (1,148) | | | | (28.2) | |
| Net income from continuing operations | | | 8,434 | | | | 11,337 | | | | (2,903 | ) | | | (25.6 | ) |
| (Loss) income from discontinued operations, net of tax | | | (265 | ) | | | 3,055 | | | | (3,320 | ) | | | (108.7 | ) |
| Net income | | | 8,169 | | | | 14,392 | | | | (6,223 | ) | | | (43.2 | ) |
| Net income (loss) attributable to noncontrolling interests | | | 46 | | | | (39 | ) | | | 85 | | | | (217.9 | ) |
| Net income attributable to Genie Energy Ltd. | | $ | 8,123 | | | $ | 14,431 | | | $ | (6,308 | ) | | | (43.7) | % |
Interest income. Interest income increased in the three months ended March 31, 2024, compared to the same period in 2023 primarily due to increase in average cash and cash equivalents and restricted cash during the period.
Other Income, net. Other income, net in the three months ended March 31, 2024 and 2023 consisted primarily of foreign currency transactions and equity in net loss in equity method investees. Other income (loss) income, net, in the three months ended March 31, 2024 consisted primarily of on-time tax credit related to payroll taxes incurred in prior years.
Provision for Income Taxes. The change in the reported tax rate for the three months ended March 31, 2024 compared to the same periods in 2023, is the result of changes in the mix of jurisdictions in which taxable income was earned.
Net Loss Attributable to Noncontrolling Interests. The decreases in net loss attributable to noncontrolling interests in the three months ended March 31, 2024 compared to the same periods in 2023 was primarily due to the share of noncontrolling interest in the operations of Citizens Choice Energy.
Gain (loss) on Marketable Equity Securities and Investments. The gain on marketable equity securities and investment for the three months ended March 31, 2024 pertains to the change in fair value of the Company's investments in common stock of Rafael Holdings, Inc. ("Rafael") which the Company acquired in December 2020 and various investments in equity of several entities.
(Loss) income from Discontinued Operations, net of tax. Loss from discontinued operations, net of tax in the three months ended March 31, 2024 is mainly related to foreign exchange differences in Lumo Sweden during the period. Gain from discontinued operations, net of tax in the three months ended March 31, 2023 is mainly from an increase in the estimated value of our investments in Orbit and foreign exchange differences in Lumo Sweden.
Liquidity and Capital Resources
General
We currently expect that our cash flow from operations and the $106.6 million balance of unrestricted cash and cash equivalents that we held at March 31, 2024 will be sufficient to meet our anticipated cash requirements for at least the period to March 9, 2025.
At March 31, 2024, we had working capital (current assets less current liabilities) of $127.2 million.
| | Three Months Ended March 31, | |
| | 2024 | | | 2023 | |
| | (in thousands) | |
Cash flows provided by (used in): | | | | | | |
Operating activities | | $ | 8,718 | | | $ | 1,520 | |
Investing activities | | | (5,844 | ) | | | (4,162 | ) |
Financing activities | | | (7,730 | ) | | | (3,273 | ) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | | | 74 | | | | (10 | ) |
| Decrease in cash, cash equivalents and restricted cash of continuing operations |
|
| (4,782 | ) |
|
| (5,925) | |
| Cash flows provided by discontinued operations |
|
| 4,208 | |
|
| 9,714 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | | $ | (574 | ) | | $ | 3,789 | |
Operating Activities
Cash, cash equivalents and restricted cash provided by operating activities of continuing operations was $8.7 million in the three months ended March 31, 2024 compared to net cash used in operating activities of continuing operations of $1.5 million in the three months ended March 31, 2023. The decrease is primarily the fluctuation in the results of operations in the three months ended March 31, 2024 compared to the same period in 2023.
Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Changes in assets and liabilities decreased cash flows by $8.5 million for the three months ended March 31, 2024, compared to the same period in 2023.
Certain of GRE's REPs are party to an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or BP, which is to be in effect through November 30, 2023. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the REP’s customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At March 31, 2024, we were in compliance with such covenants. At March 31, 2024, restricted cash—short-term of $0.4 million and trade accounts receivable of $64.2 million were pledged to BP as collateral for the payment of trade accounts payable to BP of $16.0 million at March 31, 2024.
We had purchase commitments of $130.3 million at March 31, 2024, of which $116.1 million was for purchases of electricity.
As discussed above, in December 2023, we established the Captive insurance subsidiary. At March 31, 2024, the balance of short-term and long-term restricted cash and cash equivalents of the Captive are $6.3 million and $45.5 million, respectively. We also recognized $1.0 million provision for captive insurance liability for the three months ended March 31, 2024, related to Captive's exposure for the insured risks. At March 31, 2024, the current captive insurance liability of $0.6 million is included in other current liabilities in the consolidated balance sheet. The amount of the expected loss liability for each risk is based on an analysis performed by a third-party actuary which assumed historical patterns. The key assumptions used in developing these estimates are subject to variability.
We are a lessee under operating lease agreements primarily for office space in locations where we operate and for our solar development projects with lease periods expiring between 2024 and 2052. Our future lease payments under the operating leases as of March 31, 2024 were $3.9 million.
GRE has performance bonds issued through a third party for the benefit of certain utility companies and for various states in order to comply with the states’ financial requirements for retail energy providers. At December 31, 2023, we had outstanding aggregate performance bonds of $21.5 million and a minimal amount of unused letters of credit.
Investing Activities
Our capital expenditures decreased $1.2 million for the three months ended March 31, 2024 compared to the same period in 2023. The capital expenditures are mainly for the construction of solar projects at Genie Solar. In the third quarter of 2023, we transferred $4.3 million worth of solar panels that are intended to be used in Genie Solar projects from inventories to construction in progress related to solar panels expected to be used in the solar project by Genie Solar. We currently anticipate that our total capital expenditures in the twelve months ending December 31, 2024 will be between $6.0 million to $10.00 million mostly related to the solar projects of Genie Renewables.
On November 3, 2023, we acquired ten special-purpose entities that own and operate solar system facilities in Ohio and Michigan for an aggregate purchase price of $7.5 million. The acquisition has been accounted for as an asset acquisition with a total purchase price of $7.7 million, including $0.2 million of direct transaction cost allocated to solar arrays assets included in the property and equipment account in our consolidated balance sheet.
On November 3, 2023, we also signed an agreement to purchase from the sellers another special purpose entity that owned and operated a solar system facility in Indiana, for $1.3 million, subject to the satisfaction of certain closing conditions. In February 2024, the purchase of the solar system facility in Indiana was completed after the closing conditions were met. The acquisition has been accounted for as asset acquisition and we recorded $1.3 million to solar arrays assets included in the property and equipment account in the consolidated balance sheet.
In February 2024, we purchased from a certain investor 0.5% interest in GEIC by paying $1.2 million.
In the three months ended March 31, 2024 and 2023, we acquired minimal interests in various ventures for an aggregate amount of investments of $2.1 million and $0.2 million, respectively.
In 2020 and 2021, we invested an aggregate of $6.0 million for 261,984 shares of Class B common stock of Rafael Holdings, Inc. ("Rafael"). Rafael, a publicly-traded company and a related party. In the three months ended March 31, 2023, we sold 195,501 shares of our Class B common stock of Rafael for $0.3 million. In the second quarter of 2023, we acquired 150,001 shares of our Class B common stock of Rafael for $0.3 million. We do not exercise significant influence over the operating or financial policies of Rafael. At March 31, 2024, the carrying value of the remaining investments in the Class B common stock of Rafael was $0.4 million.
In the three months ended March 31, 2023, we invested $4.6 million to purchase the common stock of a publicly traded company which we sold for $3.9 million in the second quarter of 2023.
In March 2023, the Company received $0.1 million from Atid 613 Drilling Ltd. ("Atid 613") for the full settlement of its investment in Atid 613. The Company recognized a minimal gain from settlement of investment included in other income (loss), net in its consolidated statements of operations for the three months ended March 31, 2023.
On November 29, 2021, Orbit, which operated in the United Kingdon, was declared insolvent and its customers were transferred to the “supplier of last resort.” Effective December 1, 2021, the administration of Orbit was transferred to Orbit Administrators. The accounts of Orbit were deconsolidated from those of the Company effective December 1, 2021. In 2022, we transferred $49.7 million to the Orbit Administrators as part of the administration process. On November 28, 2023, the administration of Orbit ceased and the control of Orbit reverted back to the Company from the Administrators. The accounts of Orbit were reconsolidated with those of the Company effective November 28, 2023. In 2023, the Orbit Administrators paid us a return of our interest in Orbit of £18.8 million (equivalent to $23.7 million on the dates of transfer).
Financing Activities
In the three months ended March 31, 2024 and 2023, we paid dividends of $0.075 per share to stockholders of our Class A common stock and Class B common stock, or aggregate dividends of $2.1 million and $2.0 million in the three months ended March 31, 2024 and 2023, respectively. On May 2, 2024 our Board of Directors declared a quarterly dividend of $0.075 per share on our Class A common stock and Class B common stock. The dividend will be paid on or about May 31, 2024 to stockholders of record as of the close of business on May 20, 2024.
In the three months ended March 31, 2023, we paid Base Dividends of $0.1594 per share of our 2012-A Preferred Stock or Preferred Stock in an aggregate amount of $0.2 million.
On March 11, 2013, our Board of Directors approved a program for the repurchase of up to an aggregate of 7.0 million shares of our Class B common stock. In the three months ended March 31, 2024, we acquired 250,000 Class B common stock under the stock purchase program for an aggregate amount of $4.1 million. There are no repurchases under this program in the three months ended March 31, 2023. At March 31, 2024, 4.4 million shares of Class B common stock remained available for repurchase under the stock repurchase program.
On February 7, 2022, our Board of Directors authorized a program to redeem up to $1.0 million per quarter of our Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. In the three months ended March 31, 2023, the Company redeemed 117,647 shares of Preferred Stock under the stock purchase program for an aggregate amount of $1.0 million.
On May 16, 2023, our Board of Directors approved the redemption of all outstanding Preferred Stock on June 16, 2023 (the "Redemption Date") at the liquidation preference of $8.50 per share, together with an amount equal to all dividends accrued and unpaid up to, but not including, the Redemption Date. On the Redemption Date, we completed the redemption of 748,064 shares of Preferred Stock for an aggregate amount of $6.5 million and the related accrued dividends of $0.1349 per share equivalent to $0.1 million. Following the redemption, there are no shares of Preferred Stock outstanding, all rights of Preferred Stockholders have terminated, and the Preferred Stock’s ticker symbol, "GNEPRA", has been retired.
In the three months ended March 31, 2024 and 2023, we paid $2.5 million and $0.2 million, respectively, to repurchase our Class B common stock of our Class B common stock tendered by our employees (including one officer) to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock and exercise of stock options. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.
On December 13, 2018, we entered into a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”). On February 14, 2024, the Company entered into the third amendment of its existing Credit Agreement to extend the maturity date of December 31, 2024. The aggregate principal amount was reduced to $3.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on the unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. We agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $3.1 million. As of March 31, 2024, there is no issued letter of credit from the Credit Line. At March 31, 2024, the cash collateral of $3.3 million was included in restricted cash—short-term in the consolidated balance sheet.
Cash flows from discontinued operations
Cash provided by operating activities of discontinued operations was $9.7 million in the three months ended March 31, 2024 compared to $4.2 million in the same period in 2023. The cash provided by operating activities of discontinued operations in the three months ended March 31, 2024 and 2023 pertains to the proceeds from the settlement of hedges of Lumo Sweden.
