Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 09, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SPKE | |
Entity Registrant Name | Spark Energy, Inc. | |
Entity Central Index Key | 1,606,268 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Common Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,493,152 | |
Common Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 8,224,742 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Current assets: | |||
Cash and cash equivalents | $ 7,262 | $ 4,474 | |
Accounts receivable, net of allowance for doubtful accounts of $2.0 million and $1.9 million as of June 30, 2016 and December 31, 2015 | 42,677 | 59,936 | |
Accounts receivable—affiliates | 1,009 | 1,840 | |
Inventory | 1,827 | 3,665 | |
Fair value of derivative assets | 2,705 | 605 | |
Customer acquisition costs, net | 11,857 | 13,389 | |
Customer relationships, net | 4,964 | 6,627 | |
Prepaid assets | [1] | 1,699 | 700 |
Deposits | 3,565 | 7,421 | |
Other current assets | 4,763 | 4,023 | |
Total current assets | 82,328 | 102,680 | |
Property and equipment, net | 5,035 | 4,476 | |
Fair value of derivative assets | 439 | 0 | |
Customer acquisition costs, net | 2,436 | 3,808 | |
Customer relationships, net | 4,418 | 6,802 | |
Non-current deferred tax assets | 52,460 | 23,380 | |
Goodwill | 18,379 | 18,379 | |
Other assets | 2,567 | 2,709 | |
Total assets | 168,062 | 162,234 | |
Current liabilities: | |||
Accounts payable | 22,257 | 29,732 | |
Accounts payable—affiliates | 1,990 | 1,962 | |
Accrued liabilities | 14,368 | 12,245 | |
Fair value of derivative liabilities | 1,929 | 10,620 | |
Current portion of Senior Credit Facility | 5,306 | 27,806 | |
Current payable pursuant to tax receivable agreement—affiliates | 1,407 | 0 | |
Other current liabilities | 2,308 | 1,823 | |
Total current liabilities | 49,565 | 84,188 | |
Long-term liabilities: | |||
Fair value of derivative liabilities | 458 | 618 | |
Long-term payable pursuant to tax receivable agreement—affiliates | 46,768 | 20,713 | |
Long-term portion of Senior Credit Facility | 11,939 | 14,592 | |
Non-current deferred tax liability | 0 | 853 | |
Convertible subordinated notes to affiliate | 6,502 | 6,339 | |
Other long-term liabilities | 0 | 1,612 | |
Total liabilities | 115,232 | 128,915 | |
Commitments and contingencies (Note 10) | |||
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized, zero issued and outstanding at June 30, 2016 and December 31, 2015 | 0 | 0 | |
Additional paid-in capital | 21,997 | 12,565 | |
Accumulated other comprehensive loss | (28) | 0 | |
Retained earnings (deficit) | 1,491 | (1,366) | |
Total stockholders' equity | 23,601 | 11,338 | |
Non-controlling interest in Spark HoldCo, LLC | 29,229 | 21,981 | |
Total equity | 52,830 | 33,319 | |
Total liabilities and stockholders' equity | 168,062 | 162,234 | |
Common Class A | |||
Common stock | 65 | 31 | |
Common Class B | |||
Common stock | $ 76 | $ 108 | |
[1] | Prepaid assets includes prepaid assets—affiliates of $100 and $210 as of June 30, 2016 and December 31, 2015, respectively. See Note 11 "Transaction with Affiliates" for further discussion. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Prepaid assets - affiliates | $ 100 | $ 210 |
Allowance for doubtful accounts | $ 2,000 | $ 1,900 |
Preferred stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 20,000,000 | 20,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common Class A | ||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 120,000,000 | 120,000,000 |
Common stock shares issued | 6,470,128 | 3,118,623 |
Common stock shares outstanding | 6,470,128 | 3,118,623 |
Common Class B | ||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 60,000,000 | 60,000,000 |
Common stock shares issued | 7,525,000 | 10,750,000 |
Common stock shares outstanding | 7,525,000 | 10,750,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | [1] | Jun. 30, 2016 | Jun. 30, 2015 | [1] | ||
Revenues: | |||||||
Retail revenues | $ 76,863 | $ 70,310 | $ 186,882 | $ 170,184 | |||
Net asset optimization (expenses) revenues | [2] | (676) | (67) | (150) | 1,862 | ||
Total Revenues | 76,187 | 70,243 | 186,732 | 172,046 | |||
Operating Expenses: | |||||||
Retail cost of revenues | [3] | 37,845 | 45,948 | 106,644 | 115,033 | ||
General and administrative | [4] | 16,199 | 13,712 | 33,580 | 28,416 | ||
Depreciation and amortization | 6,244 | 6,038 | 13,033 | 10,316 | |||
Total Operating Expenses | 60,288 | 65,698 | 153,257 | 153,765 | |||
Operating income | 15,899 | 4,545 | 33,475 | 18,281 | |||
Other (expense)/income: | |||||||
Interest expense | (619) | (234) | (1,373) | (615) | |||
Interest and other income | 194 | 186 | 99 | 321 | |||
Total other expenses | (425) | (48) | (1,274) | (294) | |||
Income before income tax expense | 15,474 | 4,497 | 32,201 | 17,987 | |||
Income tax expense | 4,736 | 458 | 5,723 | 1,019 | |||
Net income | 10,738 | 4,039 | 26,478 | 16,968 | |||
Less: Net income attributable to non-controlling interests | 8,397 | 3,878 | 19,964 | 14,398 | |||
Net income attributable to Spark Energy, Inc. stockholders | 2,341 | 161 | 6,514 | 2,570 | |||
Other comprehensive loss, net of tax: | |||||||
Foreign currency translation adjustment for equity method investee | (61) | 0 | (61) | 0 | |||
Other comprehensive loss | (61) | 0 | (61) | 0 | |||
Comprehensive income | 10,677 | 4,039 | 26,417 | 16,968 | |||
Less: Comprehensive income attributable to non-controlling interests | 8,364 | 3,878 | 19,931 | 14,398 | |||
Comprehensive income attributable to Spark Energy, Inc. stockholders | $ 2,313 | $ 161 | $ 6,486 | $ 2,570 | |||
Net income attributable to Spark Energy, Inc. per share of Class A common stock | |||||||
Basic (in dollars per share) | $ 0.39 | $ 0.05 | $ 1.33 | $ 0.85 | |||
Diluted (in dollars per share) | $ 0.30 | $ 0.05 | $ 1.25 | $ 0.80 | |||
Weighted average shares of Class A common stock outstanding | |||||||
Basic (in shares) | 6,043 | 3,062 | 4,899 | 3,031 | |||
Diluted (in shares) | 6,639 | 3,062 | 14,485 | 13,781 | |||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. | ||||||
[2] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $41 and $176 for the three months ended June 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $376 and $3,114 for the three months ended June 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $665 for the six months ended June 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $6,207 for the six months ended June 30, 2016 and 2015, respectively. | ||||||
[3] | Retail cost of revenues includes retail cost of revenues—affiliates of less than $100 for each of the three and six months ended June 30, 2016 and 2015, respectively. | ||||||
[4] | General and administrative includes general and administrative expense—affiliates of $4.0 million and $0 for the three months ended June 30, 2016, and 2015, respectively, and $8.4 million and $0 for the six months ended June 30, 2016 and 2015, respectively. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||||
Optimization revenues | [1] | $ (676,000) | $ (67,000) | [2] | $ (150,000) | $ 1,862,000 | [2] |
Retail cost of revenues (less than) | [3] | 37,845,000 | 45,948,000 | [2] | 106,644,000 | 115,033,000 | [2] |
General and administrative | [4] | 16,199,000 | 13,712,000 | [2] | 33,580,000 | 28,416,000 | [2] |
Affiliates | |||||||
Optimization revenues | 41,000 | 176,000 | 154,000 | 665,000 | |||
Optimization cost of revenues - affiliates | 376,000 | 3,114,000 | 1,633,000 | 6,207,000 | |||
Retail cost of revenues (less than) | 100,000 | 100,000 | 100,000 | 100,000 | |||
General and administrative | $ 4,000,000 | $ 0 | $ 8,400,000 | $ 0 | |||
[1] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $41 and $176 for the three months ended June 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $376 and $3,114 for the three months ended June 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $665 for the six months ended June 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $6,207 for the six months ended June 30, 2016 and 2015, respectively. | ||||||
[2] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. | ||||||
[3] | Retail cost of revenues includes retail cost of revenues—affiliates of less than $100 for each of the three and six months ended June 30, 2016 and 2015, respectively. | ||||||
[4] | General and administrative includes general and administrative expense—affiliates of $4.0 million and $0 for the three months ended June 30, 2016, and 2015, respectively, and $8.4 million and $0 for the six months ended June 30, 2016 and 2015, respectively. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Total Stockholders' Equity | Common StockClass A Common Stock | Common StockClass B Common Stock | Accumulated Other Comprehensive Income (Loss) | Additional Paid-in Capital | Retained Earnings (Deficit) | Non-controlling Interest |
Balance at beginning of period (in shares) at Dec. 31, 2015 | 3,119 | 10,750 | ||||||
Balance at beginning of period at Dec. 31, 2015 | $ 33,319 | $ 11,338 | $ 31 | $ 108 | $ 0 | $ 12,565 | $ (1,366) | $ 21,981 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock based compensation | 690 | 690 | 690 | |||||
Restricted stock unit vesting (in shares) | 126 | |||||||
Restricted stock unit vesting | 1,216 | 1,216 | $ 2 | 1,214 | ||||
Excess tax benefit related to restricted stock vesting | 141 | 141 | 141 | |||||
Consolidated net income | 26,478 | 6,514 | 6,514 | 19,964 | ||||
Foreign currency translation adjustment for equity method investee | (61) | (28) | (28) | (33) | ||||
Beneficial conversion feature | 63 | 63 | 63 | |||||
Distributions paid to non-controlling unit holders | (9,967) | (9,967) | ||||||
Dividends paid to Class A common stockholders | (3,657) | (3,657) | (3,657) | |||||
Proceeds from disgorgement of stockholder short-swing profits | 580 | 580 | 580 | |||||
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock | 4,028 | 4,028 | 4,028 | |||||
Exchange of shares of Class B common stock to shares of Class A common stock (in shares) | 3,225 | (3,225) | ||||||
Exchange of shares of Class B common stock to shares of Class A common stock | 0 | 2,716 | $ 32 | $ (32) | 2,716 | (2,716) | ||
Balance at end of period (in shares) at Jun. 30, 2016 | 6,470 | 7,525 | ||||||
Balance at end of period at Jun. 30, 2016 | $ 52,830 | $ 23,601 | $ 65 | $ 76 | $ (28) | $ 21,997 | $ 1,491 | $ 29,229 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | [1] | |
Cash flows from operating activities: | |||
Net income | $ 26,478 | $ 16,968 | |
Adjustments to reconcile net income to net cash flows provided by operating activities: | |||
Depreciation and amortization expense | 13,033 | 10,316 | |
Deferred income taxes | 1,556 | 277 | |
Stock based compensation | 2,441 | 1,159 | |
Amortization of deferred financing costs | 235 | 101 | |
Change in fair value of CenStar Earnout | 1,000 | 0 | |
Bad debt expense | 462 | 4,179 | |
Loss on derivatives, net | 4,339 | 6,179 | |
Current period cash settlements on derivatives, net | (15,828) | (9,076) | |
Accretion of discount to convertible subordinated notes to affiliate | 71 | 0 | |
Interest paid in kind - subordinated convertible notes | 155 | 0 | |
Income on equity method investment in eREX Spark Marketing Joint Venture | (104) | 0 | |
Changes in assets and liabilities: | |||
Decrease in restricted cash | 0 | 707 | |
Decrease in accounts receivable | 16,797 | 19,608 | |
Decrease in accounts receivable—affiliates | 830 | 698 | |
Decrease in inventory | 1,837 | 5,087 | |
Increase in customer acquisition costs | (5,104) | (11,900) | |
Decrease in prepaid and other current assets | 1,881 | 5,610 | |
Increase in intangible assets—customer relationships | 0 | (2,720) | |
Decrease in other assets | 535 | 457 | |
Decrease in accounts payable and accrued liabilities | (5,002) | (12,087) | |
Increase (decrease) in accounts payable—affiliates | 28 | (228) | |
Decrease in other current liabilities | (414) | (1,195) | |
(Decrease) increase in other non-current liabilities | (1,612) | 1,553 | |
Net cash provided by operating activities | 43,614 | 35,693 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,449) | (892) | |
Investment in eREX Spark Marketing Joint Venture | (413) | 0 | |
Net cash used in investing activities | (1,862) | (892) | |
Cash flows from financing activities: | |||
Borrowings on the Senior Credit Facility | 0 | 6,000 | |
Payments on the Senior Credit Facility | (25,152) | (30,000) | |
Contributions from NuDevco | 0 | 129 | |
Proceeds from disgorgement of stockholders short-swing profits | 580 | 0 | |
Restricted stock vesting | (909) | (270) | |
Excess tax benefit related to restricted stock vesting | 141 | 0 | |
Payment of dividends to Class A common stockholders | (3,657) | (2,210) | |
Payment of distributions to non-controlling unitholders | (9,967) | (7,794) | |
Net cash used in financing activities | (38,964) | (34,145) | |
Increase in cash and cash equivalents | 2,788 | 656 | |
Cash and cash equivalents—beginning of period | 4,474 | 4,359 | |
Cash and cash equivalents—end of period | 7,262 | 5,015 | |
Non-cash items: | |||
Liability due to tax receivable agreement | (27,462) | 0 | |
Tax benefit from tax receivable agreement | 31,490 | 0 | |
Construction in process accrual | 22 | 179 | |
Cash paid during the period for: | |||
Interest | 944 | 598 | |
Taxes | $ 1,892 | $ 150 | |
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Formation and Organization
Formation and Organization | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Formation and Organization | 1. Formation and Organization Organization Spark Energy, Inc. ("Spark Energy," the "Company," "we" or "us") is an independent retail energy services company that provides residential and commercial customers in competitive markets across the United States with an alternative choice for natural gas and electricity. The Company is a holding company whose sole material asset consists of units in Spark HoldCo, LLC (“Spark HoldCo”). Spark HoldCo owns all of the outstanding membership interests or shares in each of Spark Energy, LLC (“SE”), Spark Energy Gas, LLC (“SEG”), Oasis Power Holdings, LLC ("Oasis") and CenStar Energy Corp. ("CenStar"), the operating subsidiaries through which the Company operates. The Company is the sole managing member of Spark HoldCo, is responsible for all operational, management and administrative decisions relating to Spark HoldCo’s business and consolidates the financial results of Spark HoldCo and its subsidiaries. SE is a licensed retail electric provider in multiple states. SE provides retail electricity services to end-use retail customers, ranging from residential and small commercial customers to large commercial and industrial users. SE was formed on February 5, 2002 under the Texas Revised Limited Partnership Act (as recodified by the TBOC) and was converted to a Texas limited liability company on May 21, 2014. SEG is a retail natural gas provider and asset optimization business competitively serving residential, commercial and industrial customers in multiple states. SEG was formed on January 17, 2001 under the Texas Revised Limited Partnership Act (as recodified by the TBOC) and was converted to a Texas limited liability company on May 21, 2014. Oasis, through its operating subsidiary, Oasis Power LLC, is a retail energy provider formed on August 28, 2009 as a limited liability company under the TBOC. We acquired Oasis on July 31, 2015 from an affiliate. CenStar is a retail energy provider incorporated on July 18, 2008 under the New York Business Corporation Law. We acquired CenStar on July 8, 2015. We are a Delaware corporation formed on April 22, 2014 for the purpose facilitating an initial public offering ("IPO") of our Class A common stock, par value $0.01 per share ("Class A common stock"), and to become the sole managing member of, and to hold an ownership interest in, Spark HoldCo. In connection with our IPO, NuDevco Retail Holdings LLC ("NuDevco Retail Holdings") formed NuDevco Retail, LLC (“NuDevco Retail”), a single member limited liability company, on May 29, 2014, to hold the remaining Spark HoldCo units and shares of our Class B common stock, par value $0.01 per share ("Class B common stock"). In January 2016, Retailco, LLC ("Retailco") succeeded to the interest of NuDevco Retail Holdings of its Class B common stock and an equal number of Spark HoldCo units it held pursuant to a series of transfers. See Note 3 “Equity” for further discussion. W. Keith Maxwell, III is the owner of a majority in voting power of our common stock through his ownership of NuDevco Retail and Retailco. Retailco is a wholly owned subsidiary of TxEx Energy Investments, LLC ("TxEx"), which is wholly owned by Mr. Maxwell. NuDevco Retail is a wholly owned subsidiary of NuDevco Retail Holdings, which is a wholly owned subsidiary of Electric HoldCo, LLC, which is also a wholly owned subsidiary of TxEx. Emerging Growth Company Status As a company with less than $1.0 billion in revenues during its last fiscal year, the Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements. The Company will remain an “emerging growth company” until as late as the last day of the Company's 2019 fiscal year, or until the earliest of (i) the last day of the fiscal year in which the Company has $1.0 billion or more in annual revenues; (ii) the date on which the Company becomes a “large accelerated filer” (the fiscal year-end on which the total market value of the Company’s common equity securities held by non-affiliates is $700 million or more as of June 30); (iii) the date on which the Company issues more than $1.0 billion of non-convertible debt over a three -year period. As a result of the Company's election to avail itself of certain provisions of the JOBS Act, the information that the Company provides may be different than what you may receive from other public companies in which you hold an equity interest. Exchange and Registration Rights The Spark HoldCo Limited Liability Company Agreement provides that anytime the Company issues a new share of Class A or Class B common stock (except for issuances of Class A common stock upon an exchange of Class B common stock), Spark HoldCo will concurrently issue a limited liability company unit either to the holder of the Class B common stock or to the Company in the case of the issuance of shares of Class A common stock. As a result, the number of Spark HoldCo units held by the Company always equals the number of shares of Class A common stock outstanding. Each share of Class B common stock, all of which are held by NuDevco Retail and Retailco, has no economic rights but entitles the holder to one vote on all matters to be voted on by stockholders generally. Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation. NuDevco Retail and Retailco have the right to exchange (the “Exchange Right”) all or a portion of their Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for Class A common stock (or cash at Spark Energy, Inc.’s or Spark HoldCo’s election (the “Cash Option”)) at an exchange ratio of one share of Class A common stock for each Spark HoldCo unit (and corresponding share of Class B common stock) exchanged. In addition, NuDevco Retail and Retailco have the right, under certain circumstances, to cause the Company to register the offer and resale of NuDevco Retail's and Retailco's shares of Class A common stock obtained pursuant to the Exchange Right. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC"), and include all wholly owned subsidiaries. This information should be read in conjunction with our consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2015 . The Company's unaudited condensed consolidated financial statements are presented on a consolidated basis and include all wholly-owned and controlled subsidiaries. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Effects on the business, financial condition and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results which may be expected for the full year or for any interim period. Transactions with Affiliates The Company also enters into transactions with and pays certain costs on behalf of affiliates that are commonly controlled by W. Keith Maxwell III, and these affiliates enter into transactions with and pay certain costs on our behalf, in order to reduce risk, reduce administrative expense, create economies of scale, create strategic alliances and supply goods and services among these related parties. These transactions include, but are not limited to, employee benefits provided through the Company’s benefit plans, insurance plans, leased office space, administrative salaries for management due diligence work, recurring management consulting, and accounting, tax, legal, or technology services based on services provided, departmental usage, or headcount, which are considered reasonable by management. As such, the accompanying condensed consolidated financial statements include costs that have been incurred by the Company and then directly billed or allocated to affiliates, and costs that have been incurred by our affiliates and then directly billed or allocated to us, and are recorded net in general and administrative expense on the condensed consolidated statements of operations with a corresponding accounts receivable—affiliates or accounts payable—affiliates, respectively, recorded in the condensed consolidated balance sheets. Additionally, the Company enters into transactions with certain affiliates for sales or purchases of natural gas and electricity, which are recorded in retail revenues, retail cost of revenues and net asset optimization revenues in the condensed consolidated statements of operations with a corresponding accounts receivable—affiliate or accounts payable—affiliate in the condensed consolidated balance sheets. The allocations and related estimates and assumptions are described more fully in Note 11 “Transactions with Affiliates.” Presentation of the Acquisition of Oasis Power Holdings, LLC On May 12, 2015, Retailco Acquisition Co, LLC ("RAC"), an affiliate of NuDevco Retail Holdings, completed the acquisition of 100% of the membership interests of Oasis. Also, on May 12, 2015, Spark HoldCo entered into a Membership Interest Purchase Agreement (the "Oasis Purchase Agreement") with RAC for the purchase of all the membership interests of Oasis. Spark HoldCo completed the acquisition of Oasis from RAC on July 31, 2015. Because the acquisition of Oasis was a transfer of equity interests of entities under common control, the Company's historical financial statements for the three and six months ended June 30, 2015 previously filed with the SEC have been recast in this Form 10-Q to include the results attributable to Oasis from May 12, 2015. The unaudited condensed consolidated financial statements for this recast period have been prepared from RAC's historical cost-basis and may not necessarily be indicative of the actual results of operations that would have occurred had the Company owned Oasis during the recast period. Subsequent Events Subsequent events have been evaluated through the date these financial statements are issued. Any material subsequent events that occurred prior to such date have been properly recognized or disclosed in the condensed consolidated financial statements. See Note 13 “Subsequent Events” for further discussion. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB") issued Accounting Standards Update (“ASU”) No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers (Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date to periods beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is selecting a transition method and determining the effect of the standard on its ongoing financial reporting. The FASB issued additional amendments to ASU 2014-09, as amended by ASU 2015-14: • March 2016 - ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to customers. • April 2016 - ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"). ASU 2016-10 covers two specific topics: performance obligations and licensing. This amendment includes guidance on immaterial promised goods or services, shipping or handling activities, separately identifiable performance obligations, functional or symbolic intellectual property licenses, sales-based and usage-based royalties, license restrictions (time, use, geographical) and licensing renewals. • May 2016 - ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). ASU 2016-12 clarifies certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 amends existing guidance to require subsequent measurement of inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption of ASU 2015-11 will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02") . ASU 2016-02 amends existing accounting standards for lease accounting by requiring entities to include substantially all leases on the balance sheet by requiring the recognition of right-of-use assets and lease liabilities for all leases. Entities may elect to not recognize leases with a maximum possible term of less than 12 months. For lessees, a lease is classified as finance or operating and the asset and liability are initially measured at the present value of the lease payments. For lessors, accounting for leases is largely unchanged from previous guidance. ASU 2016-02 also requires qualitative disclosures along with certain specific quantitative disclosures for both lessees and lessors. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and is effective for interim periods in the year of adoption. The ASU should be applied using a modified retrospective approach, which requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 includes provisions intended to simplify various aspects of accounting for shared-based payments, including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. Under current U.S. GAAP, excess tax benefits are currently recorded in equity and as presented as a financing activity on the statement of cash flows. Upon adoption, excess tax benefits for share-based payments will be recorded as a reduction of income taxes and reflected in operating cash flows. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 requires entities to use a current expected credit loss ("CECL") model, which is a new impairment model based on expected losses rather than incurred losses. The model requires financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Equity | 3. Equity Non-controlling Interest The Company holds an economic interest and is the sole managing member in Spark HoldCo, with NuDevco Retail and Retailco holding the remaining economic interest in Spark HoldCo. As a result, the Company has consolidated the financial position and results of operations of Spark HoldCo and reflected the economic interest retained by NuDevco Retail and Retailco as a non-controlling interest. From January 1, 2015 through June 30, 2016, the Company and NuDevco Retail and Retailco owned the following economic interests in Spark HoldCo: The Company NuDevco Retail and Retailco (1) From January 1, 2015 to May 3, 2015 21.82 % 78.18 % From May 4, 2015 to December 30, 2015 22.37 % 77.63 % From December 31, 2015 to February 2, 2016 22.49 % 77.51 % From February 3, 2016 to March 31, 2016 29.70 % 70.30 % From April 1, 2016 to May 3, 2016 42.14 % 57.86 % From May 4, 2016 to May 17, 2016 42.46 % 57.54 % From May 18, 2016 to May 24, 2016 42.64 % 57.36 % From May 25, 2016 to June 7, 2016 42.66 % 57.34 % From June 8, 2016 to June 30, 2016 46.23 % 53.77 % (1) In January 2016, Retailco succeeded to the interest of NuDevco Retail Holdings of its Class B common stock and an equal number of Spark HoldCo units it held pursuant to a series of transfers. The Company's economic interests in Spark HoldCo increased on May 4, 2015, December 31, 2015, May 4, 2016, May 18, 2016 and May 25, 2016 due to the vesting of restricted stock units. On May 4, 2015, 118,629 restricted stock units vested, with 97,193 shares of common stock distributed to the holders of these units and with 21,436 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On December 31, 2015, 29,500 restricted stock units vested, with 21,430 shares of common stock distributed to the holders of these units and with 8,070 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On May 4, 2016, 101,210 restricted stock units vested, with 77,814 shares of common stock distributed to the holders of these units and with 23,396 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On May 18, 2016, 53,853 restricted stock units vested, with 43,683 shares of common stock distributed to the holders of these units and with 10,170 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On May 25, 2016, 5,000 restricted stock units vested, with 5,000 shares of common stock distributed to the holders of these units. On February 3, 2016, April 1, 2016 and June 8, 2016, Retailco exchanged 1,000,000 , 1,725,000 and 500,000 , respectively, of its Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock at an exchange ratio of one share of Class A common stock for each Spark HoldCo unit (and corresponding share of Class B common stock) exchanged. Refer to Note 9 "Taxes" and Note 13 "Subsequent Events" for further discussion. The following table summarizes the portions of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income allocated to non-controlling interest $ 8,521 $ 3,500 $ 20,529 $ 14,046 Income tax expense (benefit) allocated to non-controlling interest 124 (378 ) 565 (352 ) Net income attributable to non-controlling interest $ 8,397 $ 3,878 $ 19,964 $ 14,398 Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income attributable to stockholders (the numerator) by the weighted-average number of Class A common shares outstanding for the period (the denominator). Class B common shares are not included in the calculation of basic earnings per share because they are not participating securities and have no economic interest in the Company. Diluted earnings per share is similarly calculated except that the denominator is increased (1) using the treasury stock method to determine the potential dilutive effect of the Company's outstanding unvested restricted stock units, (2) using the if-converted method to determine the potential dilutive effect of the Company's Class B common stock and (3) using the if-converted method to determine the potential dilutive effect of the outstanding convertible subordinated notes into the Company's Class B common stock. The following table presents the computation of earnings per share for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income attributable to stockholders of Class A common stock $ 2,341 $ 161 $ 6,514 $ 2,570 Basic weighted average Class A common shares outstanding 6,043 3,062 4,899 3,031 Basic EPS attributable to stockholders $ 0.39 $ 0.05 $ 1.33 $ 0.85 Net income attributable to stockholders of Class A common stock $ 2,341 $ 161 $ 6,514 $ 2,570 Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect — — 11,837 8,496 Effect of conversion of convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock, net of tax effect (332 ) — (312 ) — Diluted net income attributable to stockholders of Class A common stock 2,009 161 18,039 11,066 Basic weighted average Class A common shares outstanding 6,043 3,062 4,899 3,031 Effect of dilutive Class B common stock — — 9,006 10,750 Effect of dilutive convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock 493 — 493 — Effect of dilutive restricted stock units 103 — 87 — Diluted weighted average shares outstanding 6,639 3,062 14,485 13,781 Diluted EPS attributable to stockholders $ 0.30 $ 0.05 $ 1.25 $ 0.80 The conversion of shares of Class B common stock to shares of Class A common stock was not recognized in dilutive earnings per share for the three months ended June 30, 2016 and 2015 as the effect of the conversion was antidilutive. The Company's unvested restricted stock units were not recognized in dilutive earnings per share for the three and six months ended June 30, 2015 as the effect of the conversion was antidilutive. The Company's convertible subordinated notes were not outstanding during the three and six months ended June 30, 2015. Variable Interest Entity On January 1, 2016, we adopted ASU No. 2015-02, Consolidation (Topic 810) (“ASU 2015-02”). ASU 2015-02 changed the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Upon adoption, we continued to consolidate Spark HoldCo, but considered Spark HoldCo to be a variable interest entity requiring additional disclosures in the footnotes of our condensed consolidated financial statements. Spark HoldCo is a variable interest entity due to its lack of rights to participate in significant financial and operating decisions and inability to dissolve or otherwise remove its management. Spark HoldCo owns all of the outstanding membership interests in each of the operating subsidiaries through which the Company operates. The Company is the sole managing member of Spark HoldCo, manages Spark HoldCo's operating subsidiaries through this managing membership interest, and is considered the primary beneficiary of Spark HoldCo. The assets of Spark HoldCo cannot be used to settle the obligations of the Company except through distributions to the Company, and the liabilities of Spark HoldCo cannot be settled by the Company except through contributions to Spark HoldCo. The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in the Company's condensed consolidated balance sheet as of June 30, 2016 (in thousands): June 30, 2016 Assets Current assets: Cash and cash equivalents $ 7,252 Accounts receivable 42,677 Intercompany receivable with Spark Energy, Inc. 36,774 Other current assets 32,389 Total current assets 119,092 Non-current assets: Goodwill 18,379 Other assets 14,885 Total non-current assets 33,264 Total Assets $ 152,356 Liabilities Current liabilities: Accounts payable $ 22,257 Current portion of Senior Credit Facility 5,306 Other current liabilities 18,235 Total current liabilities 45,798 Long-term liabilities: Long-term portion of Senior Credit Facility 11,939 Convertible subordinated notes to affiliates 6,502 Other long-term liabilities 458 Total long-term liabilities 18,899 Total Liabilities $ 64,697 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consist of the following amounts: Estimated June 30, 2016 December 31, 2015 (years) (In thousands) Information technology 2 – 5 $ 28,858 $ 27,392 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,012 1,007 Total 34,438 32,967 Accumulated depreciation (29,403 ) (28,491 ) Property and equipment—net $ 5,035 $ 4,476 Information technology assets include software and consultant time used in the application, development and implementation of various systems including customer billing and resource management systems. As of June 30, 2016 and December 31, 2015 , information technology includes $0.9 million and $0.5 million , respectively, of costs associated with assets not yet placed into service. Depreciation expense recorded in the condensed consolidated statements of operations was $0.5 million and $0.4 million for the three months ended June 30, 2016 and 2015 , respectively, and $0.9 million and $0.8 million for the six months ended June 30, 2016 and 2015 , respectively. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Trademarks | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Customer Relationships and Trademarks | 5. Goodwill, Customer Relationships and Trademarks Goodwill, customer relationships and trademarks consist of the following amounts (in thousands): June 30, 2016 December 31, 2015 Goodwill $ 18,379 $ 18,379 Customer relationships - Acquired (1) Cost $ 14,883 $ 14,883 Accumulated amortization (7,832 ) (4,503 ) Customer relationships - Acquired, net $ 7,051 $ 10,380 Customer relationships - Other (2) Cost $ 4,320 $ 4,320 Accumulated amortization (1,989 ) (1,271 ) Customer relationships - Other, net $ 2,331 $ 3,049 Trademarks (3) Cost $ 1,268 $ 1,268 Accumulated amortization (137 ) (74 ) Trademarks, net $ 1,131 $ 1,194 (1) Customer relationships - Acquired represents those customer acquisitions accounted for under the acquisition method in accordance with ASC 805. (2) Customer relationships - Other represent portfolios of customer contracts not accounted for in accordance with ASC 805 as these acquisitions were not in conjunction with the acquisition of businesses. (3) Trademarks reflect values associated with the recognition and positive reputation of acquired businesses accounted for as part of the acquisition method in accordance with ASC 805 through the acquisition of CenStar and Oasis. These trademarks are recorded as other assets in the condensed consolidated balance sheets. Changes in goodwill, customer relationships and trademarks consisted of the following (in thousands): Goodwill Customer Relationships - Acquired Customer Relationships - Others Trademarks Balance at December 31, 2015 $ 18,379 $ 10,380 $ 3,049 $ 1,194 Amortization expense — (3,329 ) (718 ) (63 ) Balance at June 30, 2016 $ 18,379 $ 7,051 $ 2,331 $ 1,131 Estimated future amortization expense for customer relationships and trademarks at June 30, 2016 is as follows (in thousands): Year ending December 31, 2016 $ 2,644 2017 4,116 2018 2,204 2019 861 2020 127 > 5 years 561 Total $ 10,513 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Debt consists of the following amounts (in thousands): June 30, 2016 December 31, 2015 Current portion of Senior Credit Facility—Working Capital Line (1) (2) $ — $ 22,500 Current portion of Senior Credit Facility—Acquisition Line (1) (2) 5,306 5,306 Total current debt 5,306 27,806 Long-term portion of Senior Credit Facility—Acquisition Line (1) 11,939 14,592 Convertible subordinated notes to affiliate (3) 6,502 6,339 Total long-term debt 18,441 20,931 Total debt $ 23,747 $ 48,737 (1) As of June 30, 2016 and December 31, 2015 , the Company had $17.2 million and $21.5 million in letters of credit issued, respectively. (2) As of June 30, 2016 and December 31, 2015 , the weighted average interest rate on the current portion of our Senior Credit Facility was 4.21% and 3.90% , respectively. (3) During the six months ended June 30, 2016 , we paid in-kind $0.2 million of interest, which was added to the outstanding balance of the convertible subordinated notes. No in-kind interest was paid for the three months ended June 30, 2016, as payments in-kind may be elected only on January 1 and July 1 under the terms and conditions of the convertible subordinated notes. Unamortized discount of $0.7 million and $0.7 million at June 30, 2016 and December 31, 2015 , respectively, is related to beneficial conversion features of the convertible subordinated notes. Deferred financing costs were $0.6 million and $0.7 million as of June 30, 2016 and December 31, 2015 , respectively, representing capitalized financing costs in connection with the amendment and restatement of our Senior Credit Facility on July 8, 2015. Of these amounts, $0.6 million and $0.5 million is recorded in other current assets in the condensed consolidated balance sheets as of each of June 30, 2016 and December 31, 2015 , and zero and $0.2 million is recorded in other assets in the condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015 , respectively, based on the terms of the Senior Credit Facility. Interest expense consists of the following components for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Interest incurred on Senior Credit Facility $ 192 $ 90 $ 510 $ 319 Commitment fees 53 19 83 96 Letters of credit fees 131 75 292 99 Amortization of deferred financing costs 117 50 235 101 Interest incurred on convertible subordinated notes to affiliate (1) 126 — 253 — Interest Expense $ 619 $ 234 $ 1,373 $ 615 (1) Includes amortization of the discount on the convertible subordinated notes to affiliates of less than $0.1 million and $0.1 million , respectively for the three and six months ended June 30, 2016 Senior Credit Facility The Company, as guarantor, and Spark HoldCo (the “Borrower,” and together with SE, SEG, CenStar, CenStar Operating Company, LLC, Oasis and Oasis Power, LLC, each a subsidiary of Spark HoldCo, the “Co-Borrowers”) are party to a senior secured revolving credit facility (“Senior Credit Facility”), which includes a senior secured revolving working capital facility of $82.5 million ("Working Capital Line") and a secured revolving line of credit of $25.0 million ("Acquisition Line") to be used specifically for the financing of up to 75% of the cost of acquisitions with the remainder to be financed by the Company either through cash on hand or the issuance of subordinated debt or equity. The Senior Credit Facility will mature on July 8, 2017 and may be extended for one additional year with lender consent. Borrowings under the Acquisition Line will be repaid 25% per year with the remainder due at maturity. On June 1, 2016, the Company and the Co-Borrowers entered into Amendment No. 3 to the Senior Credit Facility to, among other things, increase the Working Capital Line (defined below) from $60.0 million to $82.5 million in accordance with the Co-Borrowers' right to increase under the existing terms of the Senior Credit Facility. Amendment No. 3 also provides for the addition of new lenders and re-allocates working capital and revolving commitments among existing and new lenders. Amendment No. 3 also provides for additional representations of the Co-Borrowers and additional protections of the lenders of the Senior Credit Facility. At our election, the interest rate under the Working Capital Line is generally determined by reference to: • the Eurodollar rate plus an applicable margin of up to 3.00% per annum (based upon the prevailing utilization); or • the alternate base rate plus an applicable margin of up to 2.00% per annum (based upon the prevailing utilization). The alternate base rate is equal to the highest of (i) Société Générale’s prime rate, (ii) the federal funds rate plus 0.50% per annum, or (iii) the reference Eurodollar rate plus 1.00% ; or • the rate quoted by Société Générale as its cost of funds for the requested credit plus up to 2.50% per annum (based upon the prevailing utilization). The interest rate is generally reduced by 25 basis points if utilization under the Working Capital Line is below fifty percent. Borrowings under the Acquisition Line are generally determined by reference to: • the Eurodollar rate plus an applicable margin of up to 3.75% per annum (based upon the prevailing utilization); or • the alternate base rate plus an applicable margin of up to 2.75% per annum (based upon the prevailing utilization). The alternate base rate is equal to the highest of (i) Société Générale's prime rate, (ii) the federal funds rate plus 0.50% per annum, or (iii) the reference Eurodollar rate plus 1.00% . The Co-Borrowers pay an annual commitment fee of 0.375% or 0.5% on the unused portion of the Working Capital Line depending upon the unused capacity and 0.5% on the unused portion of the Acquisition Line. The lending syndicate under the Senior Credit Facility is entitled to several additional fees including an upfront fee, annual agency fee, and fronting fees based on a percentage of the face amount of letters of credit payable to any syndicate member that issues a letter a credit. The Company has the ability to elect the availability under the Working Capital Line between $30.0 million to $82.5 million . Availability under the working capital line will be subject to borrowing base limitations. The borrowing base is calculated primarily based on 80% to 90% of the value of eligible accounts receivable and unbilled product sales (depending on the credit quality of the counterparties) and inventory and other working capital assets. The Co-Borrowers must generally seek approval of the agent or the lenders for permitted acquisitions to be financed under the Acquisition Line. The Senior Credit Facility is secured by pledges of the equity of the portion of Spark HoldCo owned by the Company and of the equity of Spark HoldCo’s subsidiaries and the Co-Borrowers’ present and future subsidiaries, all of the Co-Borrowers’ and their subsidiaries’ present and future property and assets, including accounts receivable, inventory and liquid investments, and control agreements relating to bank accounts. The Senior Credit Facility also contains covenants that, among other things, require the maintenance of specified ratios or conditions as follows: • Minimum Net Working Capital . The Co-Borrowers must maintain minimum consolidated net working capital through December 30, 2016 equal to the greater of $5.0 million or 10% , and from December 31, 2016 and thereafter equal to the greater of $5.0 million or 15% of the elected availability under the Working Capital Line. • Minimum Adjusted Tangible Net Worth. Spark Energy, Inc. must maintain a minimum consolidated adjusted tangible net worth at all times equal to the net proceeds from equity issuances occurring after the date of the Senior Credit Facility plus the greater of (i) 20% of aggregate commitments under the Working Capital Line plus 33% of borrowings under the Acquisition Line and (ii) $18.0 million . • Minimum Fixed Charge Coverage Ratio. Spark Energy, Inc. must maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 (with quarterly increases to the numerator of increments of 0.05 beginning in the third quarter of 2016). The Fixed Charge Coverage Ratio is defined as the ratio of (a) Adjusted EBITDA to (b) the sum of consolidated interest expense (other than interest paid-in-kind in respect of any Subordinated Debt), letter of credit fees, commitment fees, acquisition earn-out payments, distributions and scheduled amortization payments. • Maximum Total Leverage Ratio. Spark Energy, Inc. must maintain a ratio of total indebtedness (excluding the Working Capital Facility and qualifying subordinated debt) to Adjusted EBITDA of a maximum of 2.50 to 1.00. The Senior Credit Facility contains various negative covenants that limit the Company’s ability to, among other things, do any of the following: • incur certain additional indebtedness; • grant certain liens; • engage in certain asset dispositions; • merge or consolidate; • make certain payments, distributions, investments, acquisitions or loans; or • enter into transactions with affiliates. Spark Energy, Inc. is entitled to pay cash dividends to the holders of the Class A common stock and Spark HoldCo will be entitled to make cash distributions to NuDevco Retail and Retailco (or their successors in interest) so long as: (a) no default exists or would result from such a payment; (b) the Co-Borrowers are in pro forma compliance with all financial covenants before and after giving effect to such payment and (c) the outstanding amount of all loans and letters of credit does not exceed the borrowing base limits. Spark HoldCo’s inability to satisfy certain financial covenants or the existence of an event of default, if not cured or waived, under the Senior Credit Facility could prevent the Company from paying dividends to holders of the Class A common stock. The Senior Credit Facility contains certain customary representations and warranties and events of default. Events of default include, among other things, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, change in control in which affiliates of W. Keith Maxwell III own less than 40% of the outstanding voting interests in the Company, certain events of bankruptcy, certain events under ERISA, material judgments in excess of $5.0 million , certain events with respect to material contracts, actual or asserted failure of any guaranty or security document supporting the Senior Credit Facility to be in full force and effect and changes of control. If such an event of default occurs, the lenders under the Senior Credit Facility would be entitled to take various actions, including the acceleration of amounts due under the facility and all actions permitted to be taken by a secured creditor. In addition, the Senior Credit Facility contains affirmative covenants that are customary for credit facilities of this type. The covenants include delivery of financial statements (including any filings made with the SEC, maintenance of property and insurance, payment of taxes and obligations, material compliance with laws, inspection of property, books and records and audits, use of proceeds, payments to bank blocked accounts, notice of defaults and certain other customary matters. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7. Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. Fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. This includes not only the credit standing of counterparties involved and the impact of credit enhancements but also the impact of the Company’s own nonperformance risk on its liabilities. The Company applies fair value measurements to its commodity derivative instruments and a contingent payment arrangement based on the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: • Level 1—Quoted prices in active markets for identical assets and liabilities. Instruments categorized in Level 1 primarily consist of financial instruments such as exchange-traded derivative instruments. • Level 2—Inputs other than quoted prices recorded in Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 primarily include non-exchange traded derivatives such as over-the-counter commodity forwards and swaps and options. • Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if any, observable market activity for the asset or liability. A contingent payment arrangement related to the CenStar acquisition is categorized as Level 3. As the fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3), the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents assets and liabilities measured and recorded at fair value in the Company’s condensed consolidated balance sheets on a recurring basis by and their level within the fair value hierarchy as of (in thousands): Level 1 Level 2 Level 3 Total June 30, 2016 Non-trading commodity derivative assets $ 243 $ 2,890 $ — $ 3,133 Trading commodity derivative assets — 11 — 11 Total commodity derivative assets $ 243 $ 2,901 $ — $ 3,144 Non-trading commodity derivative liabilities $ — $ (2,387 ) $ — $ (2,387 ) Trading commodity derivative liabilities — — — — Total commodity derivative liabilities $ — $ (2,387 ) $ — $ (2,387 ) Contingent payment arrangement $ — $ — $ (1,500 ) $ (1,500 ) Level 1 Level 2 Level 3 Total December 31, 2015 Non-trading commodity derivative assets $ — $ 200 $ — $ 200 Trading commodity derivative assets — 405 — 405 Total commodity derivative assets $ — $ 605 $ — $ 605 Non-trading commodity derivative liabilities $ (3,324 ) $ (7,661 ) $ — $ (10,985 ) Trading commodity derivative liabilities — (253 ) — (253 ) Total commodity derivative liabilities $ (3,324 ) $ (7,914 ) $ — $ (11,238 ) Contingent payment arrangement $ — $ — $ (500 ) $ (500 ) The Company had no transfers of assets or liabilities between any of the above levels during the six months ended June 30, 2016 and the year ended December 31, 2015 . The Company’s derivative contracts include exchange-traded contracts fair valued utilizing readily available quoted market prices and non-exchange-traded contracts fair valued using market price quotations available through brokers or over-the-counter and on-line exchanges. In addition, in determining the fair value of the Company’s derivative contracts, the Company applies a credit risk valuation adjustment to reflect credit risk which is calculated based on the Company’s or the counterparty’s historical credit risks. As of June 30, 2016 and December 31, 2015 , the credit risk valuation adjustment was not material. The contingent payment arrangement referred to above reflects the CenStar Earnout incurred in connection with the acquisition of CenStar and is recorded in other current liabilities in the condensed consolidated balance sheet. The CenStar Earnout is based on a financial measurement attributable to the operations of CenStar for the year following the closing of the acquisition. In determining the fair value of the CenStar Earnout, the Company forecasted a one year performance measurement, as defined by the CenStar stock purchase agreement. As this calculation is based on management's estimates of the liability, we classified the CenStar Earnout as a Level 3 measurement as of June 30, 2016. We anticipate payment of the CenStar Earnout within one year from the close of the performance measurement period, which ended in July 2016. The $1.0 million increase in our estimate of the CenStar Earnout for the six months ended June 30, 2016 was determined based on results of operations and was recorded as general and administrative expense in our condensed consolidated statements of operations. Other Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, accounts receivable—affiliates, accounts payable, accounts payable—affiliates, and accrued liabilities recorded in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these items. The carrying amount of the Senior Credit Facility recorded in the condensed consolidated balance sheets approximates fair value because of the variable rate nature of the Company’s line of credit. The fair value of our convertible subordinated notes to affiliates is not determinable for accounting purposes due to the affiliate nature and terms of the associated debt instrument with the affiliate. The fair value of the payable pursuant to tax receivable agreement—affiliate is not determinable for accounting purposes due to the affiliate nature and terms of the associated agreement with the affiliate. |
Accounting for Derivative Instr
Accounting for Derivative Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Accounting for Derivative Instruments | 8. Accounting for Derivative Instruments The Company is exposed to the impact of market fluctuations in the price of electricity and natural gas and basis costs, storage and ancillary capacity charges from independent system operators. The Company uses derivative instruments to manage exposure to these risks. The Company holds certain derivative instruments that are not held for trading purposes and are not designated as hedges for accounting purposes. These derivative instruments represent economic hedges that mitigate the Company’s exposure to fluctuations in commodity prices. For these derivative instruments, changes in the fair value are recognized currently in earnings in retail revenues or retail cost of revenues. As part of the Company’s strategy to optimize its assets and manage related risks, it also manages a portfolio of commodity derivative instruments held for trading purposes. The Company’s commodity trading activities are subject to limits within the Company’s Risk Management Policy. For these derivative instruments, changes in the fair value are recognized currently in earnings in net asset optimization revenues. Derivative assets and liabilities are presented net in the Company’s condensed consolidated balance sheets when the derivative instruments are executed with the same counterparty under a master netting arrangement. The Company’s derivative contracts include transactions that are executed both on an exchange and centrally cleared as well as over-the-counter, bilateral contracts that are transacted directly with a third party. To the extent the Company has paid or received collateral related to the derivative assets or liabilities, such amounts would be presented net against the related derivative asset or liability’s fair value. As of June 30, 2016 and December 31, 2015 , the Company had zero and $0.1 million in collateral outstanding, respectively. The specific types of derivative instruments the Company may execute to manage the commodity price risk include the following: • Forward contracts, which commit the Company to purchase or sell energy commodities in the future; • Futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument; • Swap agreements, which require payments to or from counterparties based upon the differential between two prices for a predetermined notional quantity; and • Option contracts, which convey to the option holder the right but not the obligation to purchase or sell a commodity. The Company has entered into other energy-related contracts that do not meet the definition of a derivative instrument or qualify for the normal purchase or normal sale exception and are therefore not accounted for at fair value including the following: • Forward electricity and natural gas purchase contracts for retail customer load, and • Natural gas transportation contracts and storage agreements. Volumetric Underlying Derivative Transactions The following table summarizes the net notional volume buy/(sell) of the Company’s open derivative financial instruments accounted for at fair value, broken out by commodity, as of (in thousands): Non-trading Commodity Notional June 30, 2016 December 31, 2015 Natural Gas MMBtu 1,792 7,543 Natural Gas Basis MMBtu — 455 Electricity MWh 1,304 1,187 Trading Commodity Notional June 30, 2016 December 31, 2015 Natural Gas MMBtu (354 ) 8 Natural Gas Basis MMBtu — (455 ) Gains (Losses) on Derivative Instruments Gains (losses) on derivative instruments, net and current period settlements on derivative instruments were as follows for the periods indicated (in thousands): Three Months Ended June 30, 2016 2015 Gain (loss) on non-trading derivatives, net $ 5,487 $ (4,808 ) Loss on trading derivatives, net (77 ) (66 ) Gain (loss) on derivatives, net 5,410 (4,874 ) Current period settlements on non-trading derivatives (1) 4,394 4,493 Current period settlements on trading derivatives 71 40 Total current period settlements on derivatives $ 4,465 $ 4,533 (1) Excludes settlements of $0.9 million and $0.2 million , respectively, for the three months ended June 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. Six Months Ended June 30, 2016 2015 Loss on non-trading derivatives, net $ (4,133 ) $ (6,008 ) Loss on trading derivatives, net (206 ) (171 ) Loss on derivatives, net (4,339 ) (6,179 ) Current period settlements on non-trading derivatives (1) 15,672 8,608 Current period settlements on trading derivatives 65 116 Total current period settlements on derivatives $ 15,737 $ 8,724 (1) Excludes settlements of $0.1 million and $0.2 million , respectively, for the six months ended June 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. Gains (losses) on trading derivative instruments are recorded in net asset optimization revenues and gains (losses) on non-trading derivative instruments are recorded in retail revenues or retail cost of revenues on the condensed consolidated statements of operations. Fair Value of Derivative Instruments The following tables summarize the fair value and offsetting amounts of the Company’s derivative instruments by counterparty and collateral received or paid as of (in thousands): June 30, 2016 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 5,681 $ (2,987 ) $ 2,694 $ — $ 2,694 Trading commodity derivatives 23 (12 ) 11 — 11 Total Current Derivative Assets 5,704 (2,999 ) 2,705 — 2,705 Non-trading commodity derivatives 705 (266 ) 439 — 439 Total Non-current Derivative Assets 705 (266 ) 439 — 439 Total Derivative Assets $ 6,409 $ (3,265 ) $ 3,144 $ — $ 3,144 June 30, 2016 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (3,489 ) $ 1,560 $ (1,929 ) $ — $ (1,929 ) Trading commodity derivatives — — — — — Total Current Derivative Liabilities (3,489 ) 1,560 (1,929 ) — (1,929 ) Non-trading commodity derivatives (683 ) 225 (458 ) — (458 ) Total Non-current Derivative Liabilities (683 ) 225 (458 ) — (458 ) Total Derivative Liabilities $ (4,172 ) $ 1,785 $ (2,387 ) $ — $ (2,387 ) December 31, 2015 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 589 $ (389 ) $ 200 $ — $ 200 Trading commodity derivatives 411 (6 ) 405 — 405 Total Current Derivative Assets 1,000 (395 ) 605 — 605 Non-trading commodity derivatives — — — — — Total Non-current Derivative Assets — — — — — Total Derivative Assets $ 1,000 $ (395 ) $ 605 $ — $ 605 December 31, 2015 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (13,618 ) $ 3,151 $ (10,467 ) $ 100 $ (10,367 ) Trading commodity derivatives (320 ) 67 (253 ) — (253 ) Total Current Derivative Liabilities (13,938 ) 3,218 (10,720 ) 100 (10,620 ) Non-trading commodity derivatives (950 ) 332 (618 ) — (618 ) Total Non-current Derivative Liabilities (950 ) 332 (618 ) — (618 ) Total Derivative Liabilities $ (14,888 ) $ 3,550 $ (11,338 ) $ 100 $ (11,238 ) |
Taxes
Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Taxes | 9. Taxes Income Taxes The Company and CenStar are each subject to U.S. federal income tax as a corporation. Spark HoldCo and its subsidiaries, with the exception of CenStar, are treated as flow-through entities for U.S. federal income tax purposes, and, as such, are generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to their taxable income is passed through to their members or partners. Accordingly, the Company is subject to U.S. federal income taxation on its allocable share of Spark HoldCo’s net U.S. taxable income. The Company accounts for income taxes using the assets and liabilities method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and those assets and liabilities tax bases. The Company applies existing tax law and the tax rate that the Company expects to apply to taxable income in the years in which those differences are expected to be recovered or settled in calculating the deferred tax assets and liabilities. Effects of changes in tax rates on deferred tax assets and liabilities are recognized in income in the period of the tax rate enactment. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ("ASU 2015-17") that is intended to simplify the presentation of deferred taxes by requiring that all deferred taxes be classified as noncurrent and presented as a single noncurrent amount for each tax-payment component of an entity. The ASU 2015-17 is effective for fiscal years beginning after December 15, 2016; however, the Company elected early adoption on January 1, 2016, on a retrospective basis. The adoption of ASU 2015-17 resulted in the reclassification of previously-classified net current deferred taxes of approximately $0.9 million from other current liabilities, resulting in a $23.4 million noncurrent deferred tax asset and a $0.9 million noncurrent deferred tax liability on the Company’s condensed consolidated balance sheet at December 31, 2015. There was no impact to our condensed consolidated statements of operations for the three and six months ended June 30, 2016 or 2015 . The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. The Company believes it is more likely than not that the deferred tax assets will be utilized. On February 3, 2016, Retailco exchanged 1,000,000 of its Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock. The exchange resulted in a step up in tax basis, which gave rise to a deferred tax asset of approximately $8.0 million on the exchange date. In addition, the Company recorded an additional long-term liability as a result of the exchange of approximately $10.3 million pursuant to the Tax Receivable Agreement and a corresponding long-term deferred tax asset of approximately $3.9 million . The initial estimate for the deferred tax asset, net of the liability, under the Tax Receivable Agreement was recorded within additional paid-in capital on our condensed consolidated balance sheet at June 30, 2016 . On April 1, 2016, Retailco exchanged 1,725,000 of its Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock. The exchange resulted in a step up in tax basis, which gave rise to a deferred tax asset of approximately $7.6 million on the exchange date. In addition, the Company recorded an additional long-term liability as a result of the exchange of approximately $10.3 million pursuant to the Tax Receivable Agreement and a corresponding long-term deferred tax asset of approximately $3.9 million . The initial estimate for the deferred tax asset, net of the liability, under the Tax Receivable Agreement was recorded within additional paid-in capital on our condensed consolidated balance sheet at June 30, 2016 . On June 8, 2016, Retailco exchanged 500,000 of its Spark HoldCo units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock. The exchange resulted in a step up in tax basis, which gave rise to a deferred tax asset of approximately $5.3 million on the exchange date. In addition, the Company recorded an additional long-term liability as a result of the exchange of approximately $6.9 million pursuant to the Tax Receivable Agreement and a corresponding long-term deferred tax asset of approximately $2.6 million . The initial estimate for the deferred tax asset, net of the liability, under the Tax Receivable Agreement was recorded within additional paid-in capital on our condensed consolidated balance sheet at June 30, 2016 . As of June 30, 2016 , the Company had a net deferred tax asset of approximately $15.6 million related to the step up in tax basis resulting from the purchase by the Company of Spark HoldCo units from NuDevco Retail and NuDevco Retail Holdings (predecessor to Retailco) on the IPO date. In addition, as of June 30, 2016 , the Company had a total liability of $20.7 million for the effect of the Tax Receivable Agreement liability, with approximately $19.3 million classified as a long-term liability and $1.4 million classified as a current liability related to the IPO. The Company had a long-term deferred tax asset of approximately $7.9 million related to the Tax Receivable Agreement liability related to the IPO. See Note 11 “Transactions with Affiliates” for further discussion. The effective U.S. federal and state income tax rate for the six months ended June 30, 2016 and 2015 is 17.8% and 5.7% , respectively, with respect to pre-tax income attributable to the Company's stockholders. The higher effective tax rate for the six months ended June 30, 2016 is primarily attributable to the CenStar acquisition, discrete items and a decrease in the non-controlling interest. The CenStar acquisition resulted in an increase in the effective tax rate based on its taxable status as a corporation. The discrete items were related to revisions of prior period state income. The remaining increase is primarily attributable to units exchanged by Retailco which corresponds with an increase in taxable income allocable to the Company from Spark HoldCo that is subject to U.S. federal income taxation. Total income tax expense for the six months ended June 30, 2016 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income primarily due to state taxes and the impact of permanent differences between book and taxable income, most notably the income attributable to non-controlling interest. The effective tax rate includes a rate benefit attributable to the fact that Spark HoldCo operates as a limited liability company treated as a partnership for federal and state income tax purposes and is not subject to federal and state income taxes. Accordingly, the portion of earnings attributable to non-controlling interest is subject to tax when reported as a component of the non-controlling interest’s taxable income. The February, April and June 2016 exchanges by Retailco decreased the effective tax rate benefit attributable to non-controlling interest. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitment and Contingencies From time to time, the Company may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. Other than proceedings discussed below, management does not believe that we are a party to any litigation, claims or proceedings that will have a material impact on the Company’s condensed consolidated financial condition or results of operations. Liabilities for loss contingencies arising from claims, assessments, litigations or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Indirect Tax Audits The Company is undergoing various types of indirect tax audits spanning from years 2006 to 2016 for which the Company may have additional liabilities arise. At the time of filing these condensed consolidated financial statements, these indirect tax audits are at an early stage and subject to substantial uncertainties concerning the outcome of audit findings and corresponding responses. We accrued an additional $1.6 million during the three and six months ended June 30, 2016, which increased accrued liabilities for these indirect tax audits to reflect our best estimate of the amounts we believe we will owe to $1.9 million at June 30, 2016. The outcome of these indirect tax audits may result in additional expense. Legal Proceedings The Company is the subject of the following lawsuits: John Melville et al v. Spark Energy Inc. and Spark Energy Gas, LLC is a purported class action filed on December 17, 2015 in the United States District Court for the District of New Jersey alleging, among other things, that (i) sales representatives engaged as independent contractors for Spark Energy Gas, LLC engaged in deceptive acts in violation of the New Jersey Consumer Fraud Act and (ii) Spark Energy Gas, LLC breached its contract with plaintiff, including a breach of the covenant of good faith and fair dealing. Plaintiff seeks unspecified compensatory and punitive damages for himself and the purported class, injunctive relief and/or declaratory relief, disgorgement of revenues and/or profits and attorneys’ fees. On March 14, 2016, Spark Energy Gas, LLC and Spark Energy, Inc. filed a Motion to Dismiss this case. On April 18, 2016, Plaintiff filed his Opposition to the Motion to Dismiss. On April 25, 2016, Spark Energy, Inc. and Spark Energy Gas, LLC filed a Reply in support of their Motion to Dismiss. The Motion to Dismiss was set on the Court's submission docket for May 2, 2016. The parties are currently waiting on the Court’s ruling. Discovery has not yet commenced in this matter. We cannot predict the outcome or consequences of this case. Arturo Amaya et al v. Spark Energy Gas, LLC is a purported class action filed on May 22, 2015 in the United States District Court for the Northern District of California alleging, among other things, that certain door-to-door sales representatives engaged as independent contractors for Spark Energy Gas, LLC allegedly engaged in deceptive practices in violation of the California Civil Code, California Unfair Competition Law, California False Advertising Law and the California Consumer Legal Remedies Act while marketing Spark Energy Gas, LLC’s gas services to consumers in California. Plaintiffs are seeking unspecified compensatory and punitive damages for the purported class, injunctive relief and/or declaratory relief, disgorgement of revenues and/or profits and attorneys’ fees. On September 29, 2015, Spark Energy Gas, LLC filed a motion to dismiss the complaint in its entirety and a motion to compel arbitration in the case of one of the named plaintiffs. On April 11, 2016 the Court issued an Order denying without prejudice Spark Energy Gas, LLC’s Motion to Compel Arbitration and denying the Motion to Dismiss. The Court also reset the date to hear any Motion for Class Certification that plaintiffs may file in this matter to August 5, 2016. On April 15, 2016, the parties attended a court-ordered mediation during which a confidential resolution of this matter was reached. Subsequently, a confidential settlement agreement and release of all claims was executed by the parties. On July 5, 2016, a Joint Stipulation of Dismissal with Prejudice was filed with the Court. On July 6, 2016, the Court issued an Order Dismissing the Entire Action. We expensed and paid $0.5 million related to this litigation during the six months ended June 30, 2016 in our condensed consolidated statement of operations. |
Transactions with Affiliates
Transactions with Affiliates | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | 11. Transactions with Affiliates The Company enters into transactions with and pays certain costs on behalf of affiliates that are commonly controlled in order to reduce risk, reduce administrative expense, create economies of scale, create strategic alliances and supply goods and services to these related parties. The Company also sells and purchases natural gas and electricity with affiliates. The Company presents receivables and payables with the same affiliate on a net basis in the condensed consolidated balance sheets as all affiliate activity is with parties under common control. Master Service Agreement with Retailco Services, LLC We entered into a Master Service Agreement (the “Master Service Agreement”) effective January 1, 2016 with Retailco Services, LLC ("Retailco Services"), which is wholly owned by W. Keith Maxwell III. The Master Service Agreement is for a one -year term and renews automatically for successive one -year terms unless the Master Service Agreement is terminated by either party. Retailco Services provides us with operational support services such as: enrollment and renewal transaction services; customer billing and transaction services; electronic payment processing services; customer services and information technology infrastructure and application support services under the Master Service Agreement. See "Cost Allocations" for further discussion of the fees paid in connection with the Master Service Agreement during the three and six months ended June 30, 2016 . Accounts Receivable and Payable — Affiliates The Company recorded current accounts receivable—affiliates of $1.0 million and $1.8 million as of June 30, 2016 and December 31, 2015 , respectively, and current accounts payable—affiliates of $2.0 million and $2.0 million as of June 30, 2016 and December 31, 2015 , respectively, for certain direct billings and cost allocations for services the Company provided to affiliates, services our affiliates provided to us, and sales or purchases of natural gas and electricity with affiliates. Prepaid Assets — Affiliates The Company prepaid NuDevco Retail and Retailco for costs of certain employee benefits to be provided through the Company’s benefit plans and recorded current prepaid assets—affiliates of $0.1 million and $0.2 million as of June 30, 2016 and December 31, 2015 , respectively. Convertible Subordinated Notes to Affiliate In connection with the financing of the CenStar acquisition, the Company, together with Spark HoldCo, issued the CenStar Note to Retailco Acquisition Co, LLC ("RAC"), which is wholly owned by W. Keith Maxwell III, for $2.1 million on July 8, 2015. In connection with the financing of the Oasis acquisition, the Company, together with Spark HoldCo, issued the Oasis Note to RAC for $5.0 million on July 31, 2015. Refer to Note 6 "Debt" for further discussion. Revenues and Cost of Revenues — Affiliates The Company and an affiliate are party to an agreement whereby the Company purchases natural gas from an affiliate. Cost of revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the three months ended June 30, 2016 and 2015 related to this agreement were $0.4 million and $3.1 million , respectively. Cost of revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the six months ended June 30, 2016 and 2015 related to this agreement were $1.6 million and $6.2 million , respectively. The Company also purchases natural gas at a nearby third-party plant inlet which is then sold to an affiliate. Revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the three months ended June 30, 2016 and 2015 related to these sales were less than $0.1 million and $0.2 million , respectively. Revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the six months ended June 30, 2016 and 2015 related to these sales were $0.2 million and $0.7 million , respectively. Additionally, the Company entered into a natural gas transportation agreement with another affiliate at its pipeline, whereby the Company transports retail natural gas and pays the higher of (i) a minimum monthly payment or (ii) a transportation fee per MMBtu times actual volumes transported. The current transportation agreement renews annually on February 28 at a fixed rate per MMBtu without a minimum monthly payment. While this transportation agreement remains in effect, this entity was no longer an affiliate as Mr. Maxwell terminated his interest in the affiliate on May 16, 2016. Cost of revenues—affiliates, recorded in retail cost of revenues in the condensed consolidated statements of operations related to this activity, was less than $0.1 million for each of the periods from April 1, 2016 to May 16, 2016 and from January 1, 2016 to May 16, 2016. Cost Allocations The Company paid certain expenses on behalf of affiliates, which are reimbursed by the affiliates to the Company, and our affiliates paid certain expenses on our behalf, which are reimbursed by us. These transactions include costs that can be specifically identified and certain allocated overhead costs associated with general and administrative services, including executive management, due diligence work, recurring management consulting, facilities, banking arrangements, professional fees, insurance, information services, human resources and other support departments to or from the affiliates. Where costs incurred on behalf of the affiliate or us could not be determined by specific identification for direct billing, the costs were primarily allocated to the affiliated entities or us based on percentage of departmental usage, wages or headcount. The total net amount direct billed and allocated from affiliates was $4.6 million and $9.6 million , respectively, for the three and six months ended June 30, 2016 . Of this total net amount, the Company recorded general and administrative expense of $3.8 million and $8.0 million for the three and six months ended June 30, 2016 , respectively, in the condensed consolidated statement of operations in connection with fees paid under the Master Service Agreement with Retailco Services. Additionally under the Master Service Agreement, we capitalized $0.5 million and $1.1 million of property and equipment for the application, development and implementation of various systems during three and six months ended June 30, 2016 . The remaining amount was direct billed and allocated from other affiliates and recorded as general and administrative expense in the condensed consolidated statement of operations. The total net amount direct billed and allocated to affiliates was $0.7 million and $1.6 million , respectively, for the three and six months ended June 30, 2015 , which was recorded as a reduction in general and administrative expense in the condensed consolidated statement of operations. Distributions to and Contributions from Affiliates During the six months ended June 30, 2016 and 2015 , the Company made distributions to NuDevco Retail and Retailco of $6.4 million and $7.8 million in conjunction with the payment of its quarterly distributions attributable to its holding of Spark HoldCo units. During the six months ended June 30, 2016 , the Company made distributions to NuDevco Retail and Retailco for gross-up distributions of $3.5 million in connection with distributions made between Spark HoldCo and Spark Energy, Inc. for payment of income taxes incurred by Spark Energy, Inc. Additionally, during the six months ended June 30, 2015, the Company received a contribution from NuDevco of $0.1 million as NuDevco forgave an account payable due to NuDevco that arose from the payment of withholding taxes related to the vesting of restricted stock units of certain employees of NuDevco who perform services for the Company. Proceeds from Disgorgement of Stockholder Short-swing Profits During the six months ended June 30, 2016 , the Company received $0.6 million from Retailco for the disgorgement of stockholder short-swing profits under Section 16(b) under the Exchange Act. The amount was recorded as an increase to additional paid-in capital in our condensed consolidated balance sheet. Tax Receivable Agreement The Company is party to a Tax Receivable Agreement with Spark HoldCo, NuDevco Retail Holdings and NuDevco Retail. This agreement generally provides for the payment by the Company to Retailco, LLC (as successor to NuDevco Retail Holdings) and NuDevco Retail of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes (or is deemed to realize in certain circumstances) in future periods as a result of (i) any tax basis increases resulting from the purchase by the Company of Spark HoldCo units from NuDevco Retail Holdings, (ii) any tax basis increases resulting from the exchange of Spark HoldCo units for shares of Class A common stock pursuant to the Exchange Right (or resulting from an exchange of Spark HoldCo units for cash pursuant to the Cash Option) and (iii) any imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the Tax Receivable Agreement. The Company retains the benefit of the remaining 15% of these tax savings. See Note 9 “Taxes” for further discussion. In certain circumstances, the Company may defer or partially defer any payment due (a “TRA Payment”) to the holders of rights under the Tax Receivable Agreement, which are currently Retailco and NuDevco Retail. During the five -year period ending September 30, 2019, the Company will defer all or a portion of any TRA Payment owed pursuant to the Tax Receivable Agreement to the extent that Spark HoldCo does not generate sufficient Cash Available for Distribution (as defined below) during the four-quarter period ending September 30th of the applicable year in which the TRA Payment is to be made in an amount that equals or exceeds 130% (the “TRA Coverage Ratio”) of the Total Distributions (as defined below) paid in such four-quarter period by Spark HoldCo. For purposes of computing the TRA Coverage Ratio: • “Cash Available for Distribution” is generally defined as the Adjusted EBITDA of Spark HoldCo for the applicable period, less (i) cash interest paid by Spark HoldCo, (ii) capital expenditures of Spark HoldCo (exclusive of customer acquisition costs) and (iii) any taxes payable by Spark HoldCo; and • “Total Distributions” are defined as the aggregate distributions necessary to cause the Company to receive distributions of cash equal to (i) the targeted quarterly distribution the Company intends to pay to holders of its Class A common stock payable during the applicable four-quarter period, plus (ii) the estimated taxes payable by the Company during such four-quarter period, plus (iii) the expected TRA Payment payable during the calendar year for which the TRA Coverage Ratio is being tested. In the event that the TRA Coverage Ratio is not satisfied in any calendar year, the Company will defer all or a portion of the TRA Payment to NuDevco under the Tax Receivable Agreement to the extent necessary to permit Spark HoldCo to satisfy the TRA Coverage Ratio (and Spark HoldCo is not required to make and will not make the pro rata distributions to its members with respect to the deferred portion of the TRA Payment). If the TRA Coverage Ratio is satisfied in any calendar year, the Company will pay NuDevco the full amount of the TRA Payment. Following the five -year deferral period ending September 30, 2019, the Company will be obligated to pay any outstanding deferred TRA Payments to the extent such deferred TRA Payments do not exceed (i) the lesser of the Company's proportionate share of aggregate Cash Available for Distribution of Spark HoldCo during the five -year deferral period or the cash distributions actually received by the Company during the five -year deferral period, reduced by (ii) the sum of (a) the aggregate target quarterly dividends (which, for the purposes of the Tax Receivable Agreement, will be $0.3625 per share per quarter) during the five -year deferral period, (b) the Company's estimated taxes during the five -year deferral period, and (c) all prior TRA Payments and (y) if with respect to the quarterly period during which the deferred TRA Payment is otherwise paid or payable, Spark HoldCo has or reasonably determines it will have amounts necessary to cause the Company to receive distributions of cash equal to the target quarterly distribution payable during that quarterly period. Any portion of the deferred TRA Payments not payable due to these limitations will no longer be payable. We expect to meet the threshold coverage ratio required to fund the first payment to Retailco under the Tax Receivable Agreement during the four-quarter period ending September 30, 2016. As such, the initial payment of $1.4 million under the Tax Receivable Agreement due in late 2016 was recorded as a current liability in our condensed consolidated balance sheet at June 30, 2016 . |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. 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 $20.8 million and $23.0 million and asset optimization cost of revenues of $21.5 million and $23.1 million for the three months ended June 30, 2016 and 2015 , respectively, which are presented on a net basis in asset optimization revenues. The Company recorded asset optimization revenues of $63.1 million and $93.0 million and asset optimization cost of revenues of $63.3 million and $91.1 million for the six months ended June 30, 2016 and 2015 , 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 (expenses), (ii) net gains (losses) on derivative instruments, and (iii) net current period cash settlements on derivative instruments. The Company deducts net gains (losses) on 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 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 income before income tax expense (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Reconciliation of Retail Gross Margin to Income before taxes Income before income tax expense $ 15,474 $ 4,497 $ 32,201 $ 17,987 Interest and other income (194 ) (186 ) (99 ) (321 ) Interest expense 619 234 1,373 615 Operating Income 15,899 4,545 33,475 18,281 Depreciation and amortization 6,244 6,038 13,033 10,316 General and administrative 16,199 13,712 33,580 28,416 Less: Net asset optimization (expenses) revenues (676 ) (67 ) (150 ) 1,862 Net, Gain (losses) on non-trading derivative instruments 5,487 (4,808 ) (4,133 ) (6,008 ) Net, Cash settlements on non-trading derivative instruments 4,394 4,493 15,672 8,608 Retail Gross Margin $ 29,137 $ 24,677 $ 68,699 $ 52,551 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): Three Months Ended June 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total Revenues $ 57,556 $ 18,631 $ — $ — $ 76,187 Retail cost of revenues 33,302 4,543 — — 37,845 Less: Net asset optimization expenses — (676 ) — — (676 ) Gains on non-trading derivatives 3,599 1,888 — — 5,487 Current period settlements on non-trading derivatives 2,981 1,413 — — 4,394 Retail Gross Margin $ 17,674 $ 11,463 $ — $ — $ 29,137 Total Assets at June 30, 2016 $ 184,869 $ 123,679 $ 113,913 $ (254,399 ) $ 168,062 Goodwill at June 30, 2016 $ 16,476 $ 1,903 $ — $ — $ 18,379 Three Months Ended June 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 48,698 $ 21,545 $ — $ — $ 70,243 Retail cost of revenues 36,458 9,490 — — 45,948 Less: Net asset optimization expenses — (67 ) — — (67 ) (Losses) gains on non-trading derivatives (5,459 ) 651 — — (4,808 ) Current period settlements on non-trading derivatives 2,516 1,977 — — 4,493 Retail Gross Margin $ 15,183 $ 9,494 $ — $ — $ 24,677 Total Assets at December 31, 2015 $ 150,245 $ 113,583 $ 88,823 $ (190,417 ) $ 162,234 Goodwill at December 31, 2015 $ 16,476 $ 1,903 $ — $ — $ 18,379 Six Months Ended June 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 119,489 $ 67,243 $ — $ — $ 186,732 Retail cost of revenues 79,602 27,042 — — 106,644 Less: Net asset optimization expenses — (150 ) — — (150 ) (Losses) gains on non-trading derivatives (5,791 ) 1,658 — — (4,133 ) Current period settlements on non-trading derivatives 12,598 3,074 — — 15,672 Retail Gross Margin $ 33,080 $ 35,619 $ — $ — $ 68,699 Total Assets at June 30, 2016 $ 184,869 $ 123,679 $ 113,913 $ (254,399 ) $ 168,062 Goodwill at June 30, 2016 $ 16,476 $ 1,903 $ — $ — $ 18,379 Six Months Ended June 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 93,147 $ 78,899 $ — $ — $ 172,046 Retail cost of revenues 72,077 42,956 — — 115,033 Less: Net asset optimization revenues — 1,862 — — 1,862 (Losses) gains on non-trading derivatives (6,092 ) 84 — — (6,008 ) Current period settlements on non-trading derivatives 2,417 6,191 — — 8,608 Retail Gross Margin $ 24,745 $ 27,806 $ — $ — $ 52,551 Total Assets at December 31, 2015 $ 150,245 $ 113,583 $ 88,823 $ (190,417 ) $ 162,234 Goodwill at December 31, 2015 $ 16,476 $ 1,903 $ — $ — $ 18,379 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Declaration of Dividends On July 20, 2016 , the Company declared a quarterly dividend of $0.3625 to holders of record of our Class A common stock on August 29, 2016 and payable on September 13, 2016 . Provider Power Membership Interest Purchase Agreement and Related Transactions On August 1, 2016, the Company and Spark HoldCo closed the previously announced purchase of all of the outstanding membership interests in Electricity Maine, LLC, a Maine limited liability company; Electricity N.H., LLC, a Maine limited liability company; and Provider Power Mass, LLC, a Maine limited liability company (the “Provider Companies”). On August 1, 2016, the Company and Spark HoldCo also issued 699,742 shares of Class B common stock (and a corresponding number of Spark HoldCo units) to Retailco for aggregate proceeds of $13,994,840 in order to fund a part of the purchase price of the Provider Companies. Amendment to Senior Credit Facility The Company, Spark HoldCo and certain of their subsidiaries entered into Amendment No. 4 to the Senior Credit Facility, effective August 1, 2016, to, among other things, provide for the purchase of the Provider Companies and the Company’s previously announced purchase of all of the outstanding membership interests in Major Energy Services LLC, a New York limited liability company, Major Energy Electric Services LLC, a New York limited liability company, and Respond Power LLC, a New York limited liability company (the “Major Energy Companies”). Amendment No. 4 also raises the minimum availability under the Working Capital Line to $40.0 million . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying interim unaudited condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC"), and include all wholly owned subsidiaries. This information should be read in conjunction with our consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2015 . The Company's unaudited condensed consolidated financial statements are presented on a consolidated basis and include all wholly-owned and controlled subsidiaries. We account for investments over which we have significant influence but not a controlling financial interest using the equity method of accounting. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Effects on the business, financial condition and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial statements. |
Transactions with Affiliates | Transactions with Affiliates The Company also enters into transactions with and pays certain costs on behalf of affiliates that are commonly controlled by W. Keith Maxwell III, and these affiliates enter into transactions with and pay certain costs on our behalf, in order to reduce risk, reduce administrative expense, create economies of scale, create strategic alliances and supply goods and services among these related parties. These transactions include, but are not limited to, employee benefits provided through the Company’s benefit plans, insurance plans, leased office space, administrative salaries for management due diligence work, recurring management consulting, and accounting, tax, legal, or technology services based on services provided, departmental usage, or headcount, which are considered reasonable by management. As such, the accompanying condensed consolidated financial statements include costs that have been incurred by the Company and then directly billed or allocated to affiliates, and costs that have been incurred by our affiliates and then directly billed or allocated to us, and are recorded net in general and administrative expense on the condensed consolidated statements of operations with a corresponding accounts receivable—affiliates or accounts payable—affiliates, respectively, recorded in the condensed consolidated balance sheets. Additionally, the Company enters into transactions with certain affiliates for sales or purchases of natural gas and electricity, which are recorded in retail revenues, retail cost of revenues and net asset optimization revenues in the condensed consolidated statements of operations with a corresponding accounts receivable—affiliate or accounts payable—affiliate in the condensed consolidated balance sheets. |
Presentation of the Acquisition of Oasis Power Holdings, LLC | Presentation of the Acquisition of Oasis Power Holdings, LLC On May 12, 2015, Retailco Acquisition Co, LLC ("RAC"), an affiliate of NuDevco Retail Holdings, completed the acquisition of 100% of the membership interests of Oasis. Also, on May 12, 2015, Spark HoldCo entered into a Membership Interest Purchase Agreement (the "Oasis Purchase Agreement") with RAC for the purchase of all the membership interests of Oasis. Spark HoldCo completed the acquisition of Oasis from RAC on July 31, 2015. Because the acquisition of Oasis was a transfer of equity interests of entities under common control, the Company's historical financial statements for the three and six months ended June 30, 2015 previously filed with the SEC have been recast in this Form 10-Q to include the results attributable to Oasis from May 12, 2015. The unaudited condensed consolidated financial statements for this recast period have been prepared from RAC's historical cost-basis and may not necessarily be indicative of the actual results of operations that would have occurred had the Company owned Oasis during the recast period. |
Subsequent Events | Subsequent Events Subsequent events have been evaluated through the date these financial statements are issued. Any material subsequent events that occurred prior to such date have been properly recognized or disclosed in the condensed consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB") issued Accounting Standards Update (“ASU”) No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers (Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effective date to periods beginning after December 15, 2017. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is selecting a transition method and determining the effect of the standard on its ongoing financial reporting. The FASB issued additional amendments to ASU 2014-09, as amended by ASU 2015-14: • March 2016 - ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ("ASU 2016-08"). ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to customers. • April 2016 - ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10"). ASU 2016-10 covers two specific topics: performance obligations and licensing. This amendment includes guidance on immaterial promised goods or services, shipping or handling activities, separately identifiable performance obligations, functional or symbolic intellectual property licenses, sales-based and usage-based royalties, license restrictions (time, use, geographical) and licensing renewals. • May 2016 - ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). ASU 2016-12 clarifies certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 amends existing guidance to require subsequent measurement of inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption of ASU 2015-11 will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02") . ASU 2016-02 amends existing accounting standards for lease accounting by requiring entities to include substantially all leases on the balance sheet by requiring the recognition of right-of-use assets and lease liabilities for all leases. Entities may elect to not recognize leases with a maximum possible term of less than 12 months. For lessees, a lease is classified as finance or operating and the asset and liability are initially measured at the present value of the lease payments. For lessors, accounting for leases is largely unchanged from previous guidance. ASU 2016-02 also requires qualitative disclosures along with certain specific quantitative disclosures for both lessees and lessors. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and is effective for interim periods in the year of adoption. The ASU should be applied using a modified retrospective approach, which requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) ("ASU 2016-09"). ASU 2016-09 includes provisions intended to simplify various aspects of accounting for shared-based payments, including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. Under current U.S. GAAP, excess tax benefits are currently recorded in equity and as presented as a financing activity on the statement of cash flows. Upon adoption, excess tax benefits for share-based payments will be recorded as a reduction of income taxes and reflected in operating cash flows. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 requires entities to use a current expected credit loss ("CECL") model, which is a new impairment model based on expected losses rather than incurred losses. The model requires financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period. The measurement of expected losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Ownership Interests Percentage | From January 1, 2015 through June 30, 2016, the Company and NuDevco Retail and Retailco owned the following economic interests in Spark HoldCo: The Company NuDevco Retail and Retailco (1) From January 1, 2015 to May 3, 2015 21.82 % 78.18 % From May 4, 2015 to December 30, 2015 22.37 % 77.63 % From December 31, 2015 to February 2, 2016 22.49 % 77.51 % From February 3, 2016 to March 31, 2016 29.70 % 70.30 % From April 1, 2016 to May 3, 2016 42.14 % 57.86 % From May 4, 2016 to May 17, 2016 42.46 % 57.54 % From May 18, 2016 to May 24, 2016 42.64 % 57.36 % From May 25, 2016 to June 7, 2016 42.66 % 57.34 % From June 8, 2016 to June 30, 2016 46.23 % 53.77 % (1) In January 2016, Retailco succeeded to the interest of NuDevco Retail Holdings of its Class B common stock and an equal number of Spark HoldCo units it held pursuant to a series of transfers. |
Schedule of Noncontrolling Interest | The following table summarizes the portions of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income allocated to non-controlling interest $ 8,521 $ 3,500 $ 20,529 $ 14,046 Income tax expense (benefit) allocated to non-controlling interest 124 (378 ) 565 (352 ) Net income attributable to non-controlling interest $ 8,397 $ 3,878 $ 19,964 $ 14,398 |
Earnings Per Share | The following table presents the computation of earnings per share for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income attributable to stockholders of Class A common stock $ 2,341 $ 161 $ 6,514 $ 2,570 Basic weighted average Class A common shares outstanding 6,043 3,062 4,899 3,031 Basic EPS attributable to stockholders $ 0.39 $ 0.05 $ 1.33 $ 0.85 Net income attributable to stockholders of Class A common stock $ 2,341 $ 161 $ 6,514 $ 2,570 Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect — — 11,837 8,496 Effect of conversion of convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock, net of tax effect (332 ) — (312 ) — Diluted net income attributable to stockholders of Class A common stock 2,009 161 18,039 11,066 Basic weighted average Class A common shares outstanding 6,043 3,062 4,899 3,031 Effect of dilutive Class B common stock — — 9,006 10,750 Effect of dilutive convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock 493 — 493 — Effect of dilutive restricted stock units 103 — 87 — Diluted weighted average shares outstanding 6,639 3,062 14,485 13,781 Diluted EPS attributable to stockholders $ 0.30 $ 0.05 $ 1.25 $ 0.80 |
Carrying Amounts and Classification of Assets and Liabilities of Variable Interest Entity | The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in the Company's condensed consolidated balance sheet as of June 30, 2016 (in thousands): June 30, 2016 Assets Current assets: Cash and cash equivalents $ 7,252 Accounts receivable 42,677 Intercompany receivable with Spark Energy, Inc. 36,774 Other current assets 32,389 Total current assets 119,092 Non-current assets: Goodwill 18,379 Other assets 14,885 Total non-current assets 33,264 Total Assets $ 152,356 Liabilities Current liabilities: Accounts payable $ 22,257 Current portion of Senior Credit Facility 5,306 Other current liabilities 18,235 Total current liabilities 45,798 Long-term liabilities: Long-term portion of Senior Credit Facility 11,939 Convertible subordinated notes to affiliates 6,502 Other long-term liabilities 458 Total long-term liabilities 18,899 Total Liabilities $ 64,697 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following amounts: Estimated June 30, 2016 December 31, 2015 (years) (In thousands) Information technology 2 – 5 $ 28,858 $ 27,392 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,012 1,007 Total 34,438 32,967 Accumulated depreciation (29,403 ) (28,491 ) Property and equipment—net $ 5,035 $ 4,476 |
Goodwill, Customer Relationsh24
Goodwill, Customer Relationships and Trademarks (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | Goodwill, customer relationships and trademarks consist of the following amounts (in thousands): June 30, 2016 December 31, 2015 Goodwill $ 18,379 $ 18,379 Customer relationships - Acquired (1) Cost $ 14,883 $ 14,883 Accumulated amortization (7,832 ) (4,503 ) Customer relationships - Acquired, net $ 7,051 $ 10,380 Customer relationships - Other (2) Cost $ 4,320 $ 4,320 Accumulated amortization (1,989 ) (1,271 ) Customer relationships - Other, net $ 2,331 $ 3,049 Trademarks (3) Cost $ 1,268 $ 1,268 Accumulated amortization (137 ) (74 ) Trademarks, net $ 1,131 $ 1,194 (1) Customer relationships - Acquired represents those customer acquisitions accounted for under the acquisition method in accordance with ASC 805. (2) Customer relationships - Other represent portfolios of customer contracts not accounted for in accordance with ASC 805 as these acquisitions were not in conjunction with the acquisition of businesses. (3) Trademarks reflect values associated with the recognition and positive reputation of acquired businesses accounted for as part of the acquisition method in accordance with ASC 805 through the acquisition of CenStar and Oasis. These trademarks are recorded as other assets in the condensed consolidated balance sheets. Changes in goodwill, customer relationships and trademarks consisted of the following (in thousands): Goodwill Customer Relationships - Acquired Customer Relationships - Others Trademarks Balance at December 31, 2015 $ 18,379 $ 10,380 $ 3,049 $ 1,194 Amortization expense — (3,329 ) (718 ) (63 ) Balance at June 30, 2016 $ 18,379 $ 7,051 $ 2,331 $ 1,131 |
Estimated Future Amortization Expense of Intangible Assets | Estimated future amortization expense for customer relationships and trademarks at June 30, 2016 is as follows (in thousands): Year ending December 31, 2016 $ 2,644 2017 4,116 2018 2,204 2019 861 2020 127 > 5 years 561 Total $ 10,513 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following amounts (in thousands): June 30, 2016 December 31, 2015 Current portion of Senior Credit Facility—Working Capital Line (1) (2) $ — $ 22,500 Current portion of Senior Credit Facility—Acquisition Line (1) (2) 5,306 5,306 Total current debt 5,306 27,806 Long-term portion of Senior Credit Facility—Acquisition Line (1) 11,939 14,592 Convertible subordinated notes to affiliate (3) 6,502 6,339 Total long-term debt 18,441 20,931 Total debt $ 23,747 $ 48,737 (1) As of June 30, 2016 and December 31, 2015 , the Company had $17.2 million and $21.5 million in letters of credit issued, respectively. (2) As of June 30, 2016 and December 31, 2015 , the weighted average interest rate on the current portion of our Senior Credit Facility was 4.21% and 3.90% , respectively. (3) During the six months ended June 30, 2016 , we paid in-kind $0.2 million of interest, which was added to the outstanding balance of the convertible subordinated notes. No in-kind interest was paid for the three months ended June 30, 2016, as payments in-kind may be elected only on January 1 and July 1 under the terms and conditions of the convertible subordinated notes. Unamortized discount of $0.7 million and $0.7 million at June 30, 2016 and December 31, 2015 , respectively, is related to beneficial conversion features of the convertible subordinated notes. |
Components of Interest Expense | Interest expense consists of the following components for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Interest incurred on Senior Credit Facility $ 192 $ 90 $ 510 $ 319 Commitment fees 53 19 83 96 Letters of credit fees 131 75 292 99 Amortization of deferred financing costs 117 50 235 101 Interest incurred on convertible subordinated notes to affiliate (1) 126 — 253 — Interest Expense $ 619 $ 234 $ 1,373 $ 615 (1) Includes amortization of the discount on the convertible subordinated notes to affiliates of less than $0.1 million and $0.1 million , respectively for the three and six months ended June 30, 2016 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents assets and liabilities measured and recorded at fair value in the Company’s condensed consolidated balance sheets on a recurring basis by and their level within the fair value hierarchy as of (in thousands): Level 1 Level 2 Level 3 Total June 30, 2016 Non-trading commodity derivative assets $ 243 $ 2,890 $ — $ 3,133 Trading commodity derivative assets — 11 — 11 Total commodity derivative assets $ 243 $ 2,901 $ — $ 3,144 Non-trading commodity derivative liabilities $ — $ (2,387 ) $ — $ (2,387 ) Trading commodity derivative liabilities — — — — Total commodity derivative liabilities $ — $ (2,387 ) $ — $ (2,387 ) Contingent payment arrangement $ — $ — $ (1,500 ) $ (1,500 ) Level 1 Level 2 Level 3 Total December 31, 2015 Non-trading commodity derivative assets $ — $ 200 $ — $ 200 Trading commodity derivative assets — 405 — 405 Total commodity derivative assets $ — $ 605 $ — $ 605 Non-trading commodity derivative liabilities $ (3,324 ) $ (7,661 ) $ — $ (10,985 ) Trading commodity derivative liabilities — (253 ) — (253 ) Total commodity derivative liabilities $ (3,324 ) $ (7,914 ) $ — $ (11,238 ) Contingent payment arrangement $ — $ — $ (500 ) $ (500 ) |
Accounting for Derivative Ins27
Accounting for Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Volumetric Underlying Derivative Transactions | The following table summarizes the net notional volume buy/(sell) of the Company’s open derivative financial instruments accounted for at fair value, broken out by commodity, as of (in thousands): Non-trading Commodity Notional June 30, 2016 December 31, 2015 Natural Gas MMBtu 1,792 7,543 Natural Gas Basis MMBtu — 455 Electricity MWh 1,304 1,187 Trading Commodity Notional June 30, 2016 December 31, 2015 Natural Gas MMBtu (354 ) 8 Natural Gas Basis MMBtu — (455 ) |
Gains (Losses) on Derivative Instruments | Gains (losses) on derivative instruments, net and current period settlements on derivative instruments were as follows for the periods indicated (in thousands): Three Months Ended June 30, 2016 2015 Gain (loss) on non-trading derivatives, net $ 5,487 $ (4,808 ) Loss on trading derivatives, net (77 ) (66 ) Gain (loss) on derivatives, net 5,410 (4,874 ) Current period settlements on non-trading derivatives (1) 4,394 4,493 Current period settlements on trading derivatives 71 40 Total current period settlements on derivatives $ 4,465 $ 4,533 (1) Excludes settlements of $0.9 million and $0.2 million , respectively, for the three months ended June 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. Six Months Ended June 30, 2016 2015 Loss on non-trading derivatives, net $ (4,133 ) $ (6,008 ) Loss on trading derivatives, net (206 ) (171 ) Loss on derivatives, net (4,339 ) (6,179 ) Current period settlements on non-trading derivatives (1) 15,672 8,608 Current period settlements on trading derivatives 65 116 Total current period settlements on derivatives $ 15,737 $ 8,724 (1) Excludes settlements of $0.1 million and $0.2 million , respectively, for the six months ended June 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. |
Offsetting Assets | December 31, 2015 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 589 $ (389 ) $ 200 $ — $ 200 Trading commodity derivatives 411 (6 ) 405 — 405 Total Current Derivative Assets 1,000 (395 ) 605 — 605 Non-trading commodity derivatives — — — — — Total Non-current Derivative Assets — — — — — Total Derivative Assets $ 1,000 $ (395 ) $ 605 $ — $ 605 The following tables summarize the fair value and offsetting amounts of the Company’s derivative instruments by counterparty and collateral received or paid as of (in thousands): June 30, 2016 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 5,681 $ (2,987 ) $ 2,694 $ — $ 2,694 Trading commodity derivatives 23 (12 ) 11 — 11 Total Current Derivative Assets 5,704 (2,999 ) 2,705 — 2,705 Non-trading commodity derivatives 705 (266 ) 439 — 439 Total Non-current Derivative Assets 705 (266 ) 439 — 439 Total Derivative Assets $ 6,409 $ (3,265 ) $ 3,144 $ — $ 3,144 |
Offsetting Liabilities | December 31, 2015 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (13,618 ) $ 3,151 $ (10,467 ) $ 100 $ (10,367 ) Trading commodity derivatives (320 ) 67 (253 ) — (253 ) Total Current Derivative Liabilities (13,938 ) 3,218 (10,720 ) 100 (10,620 ) Non-trading commodity derivatives (950 ) 332 (618 ) — (618 ) Total Non-current Derivative Liabilities (950 ) 332 (618 ) — (618 ) Total Derivative Liabilities $ (14,888 ) $ 3,550 $ (11,338 ) $ 100 $ (11,238 ) June 30, 2016 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (3,489 ) $ 1,560 $ (1,929 ) $ — $ (1,929 ) Trading commodity derivatives — — — — — Total Current Derivative Liabilities (3,489 ) 1,560 (1,929 ) — (1,929 ) Non-trading commodity derivatives (683 ) 225 (458 ) — (458 ) Total Non-current Derivative Liabilities (683 ) 225 (458 ) — (458 ) Total Derivative Liabilities $ (4,172 ) $ 1,785 $ (2,387 ) $ — $ (2,387 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Below is a reconciliation of retail gross margin to income before income tax expense (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Reconciliation of Retail Gross Margin to Income before taxes Income before income tax expense $ 15,474 $ 4,497 $ 32,201 $ 17,987 Interest and other income (194 ) (186 ) (99 ) (321 ) Interest expense 619 234 1,373 615 Operating Income 15,899 4,545 33,475 18,281 Depreciation and amortization 6,244 6,038 13,033 10,316 General and administrative 16,199 13,712 33,580 28,416 Less: Net asset optimization (expenses) revenues (676 ) (67 ) (150 ) 1,862 Net, Gain (losses) on non-trading derivative instruments 5,487 (4,808 ) (4,133 ) (6,008 ) Net, Cash settlements on non-trading derivative instruments 4,394 4,493 15,672 8,608 Retail Gross Margin $ 29,137 $ 24,677 $ 68,699 $ 52,551 |
Schedule of Segment Reporting Information, by Segment | Financial data for business segments are as follows (in thousands): Three Months Ended June 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total Revenues $ 57,556 $ 18,631 $ — $ — $ 76,187 Retail cost of revenues 33,302 4,543 — — 37,845 Less: Net asset optimization expenses — (676 ) — — (676 ) Gains on non-trading derivatives 3,599 1,888 — — 5,487 Current period settlements on non-trading derivatives 2,981 1,413 — — 4,394 Retail Gross Margin $ 17,674 $ 11,463 $ — $ — $ 29,137 Total Assets at June 30, 2016 $ 184,869 $ 123,679 $ 113,913 $ (254,399 ) $ 168,062 Goodwill at June 30, 2016 $ 16,476 $ 1,903 $ — $ — $ 18,379 Three Months Ended June 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 48,698 $ 21,545 $ — $ — $ 70,243 Retail cost of revenues 36,458 9,490 — — 45,948 Less: Net asset optimization expenses — (67 ) — — (67 ) (Losses) gains on non-trading derivatives (5,459 ) 651 — — (4,808 ) Current period settlements on non-trading derivatives 2,516 1,977 — — 4,493 Retail Gross Margin $ 15,183 $ 9,494 $ — $ — $ 24,677 Total Assets at December 31, 2015 $ 150,245 $ 113,583 $ 88,823 $ (190,417 ) $ 162,234 Goodwill at December 31, 2015 $ 16,476 $ 1,903 $ — $ — $ 18,379 Six Months Ended June 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 119,489 $ 67,243 $ — $ — $ 186,732 Retail cost of revenues 79,602 27,042 — — 106,644 Less: Net asset optimization expenses — (150 ) — — (150 ) (Losses) gains on non-trading derivatives (5,791 ) 1,658 — — (4,133 ) Current period settlements on non-trading derivatives 12,598 3,074 — — 15,672 Retail Gross Margin $ 33,080 $ 35,619 $ — $ — $ 68,699 Total Assets at June 30, 2016 $ 184,869 $ 123,679 $ 113,913 $ (254,399 ) $ 168,062 Goodwill at June 30, 2016 $ 16,476 $ 1,903 $ — $ — $ 18,379 Six Months Ended June 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 93,147 $ 78,899 $ — $ — $ 172,046 Retail cost of revenues 72,077 42,956 — — 115,033 Less: Net asset optimization revenues — 1,862 — — 1,862 (Losses) gains on non-trading derivatives (6,092 ) 84 — — (6,008 ) Current period settlements on non-trading derivatives 2,417 6,191 — — 8,608 Retail Gross Margin $ 24,745 $ 27,806 $ — $ — $ 52,551 Total Assets at December 31, 2015 $ 150,245 $ 113,583 $ 88,823 $ (190,417 ) $ 162,234 Goodwill at December 31, 2015 $ 16,476 $ 1,903 $ — $ — $ 18,379 |
Formation and Organization (Det
Formation and Organization (Details) | 6 Months Ended | |||
Jun. 30, 2016$ / shares | Dec. 31, 2015$ / shares | May 29, 2014$ / shares | Apr. 22, 2014$ / shares | |
Class of Stock [Line Items] | ||||
Conversion of stock exchange ratio | 1 | |||
Common Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common Class B | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock voting rights | 1 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Jul. 31, 2015 |
Oasis | |
Business Acquisition [Line Items] | |
Percentage of membership interests acquired | 100.00% |
Equity - Non-controlling Intere
Equity - Non-controlling Interest (Details) - The Company | Jun. 07, 2016 | May 24, 2016 | May 17, 2016 | Jun. 30, 2016 | May 03, 2016 | Feb. 02, 2016 | Mar. 31, 2016 | May 03, 2015 | Dec. 30, 2015 |
Class of Stock [Line Items] | |||||||||
Economic interests percentage | 42.66% | 42.64% | 42.46% | 46.23% | 42.14% | 22.49% | 29.70% | 21.82% | 22.37% |
NuDevco Retail and Retailco | |||||||||
Class of Stock [Line Items] | |||||||||
Economic interests percentage | 57.34% | 57.36% | 57.54% | 53.77% | 57.86% | 77.51% | 70.30% | 78.18% | 77.63% |
Equity - Narrative (Details)
Equity - Narrative (Details) | Jun. 08, 2016shares | May 25, 2016shares | May 18, 2016shares | May 04, 2016shares | Apr. 01, 2016shares | Feb. 03, 2016shares | Dec. 31, 2015shares | May 04, 2015shares | Jun. 30, 2016 |
Class of Stock [Line Items] | |||||||||
Conversion of stock exchange ratio | 1 | ||||||||
Affiliated Entity | Retailco | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares of common stock exchanged | 500,000 | 1,725,000 | 1,000,000 | ||||||
Affiliated Entity | Retailco | Common Class A | |||||||||
Class of Stock [Line Items] | |||||||||
Conversion of stock exchange ratio | 1,000 | 1,000 | 1 | ||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares of common stock distributed of holders | 5,000 | 43,683 | 77,814 | 21,430 | 97,193 | ||||
Restricted Stock Units | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares vested | 5,000 | 53,853 | 101,210 | 29,500 | 118,629 | ||||
Restricted Stock Units | Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares of common stock withheld | 10,170 | 23,396 | 8,070 | 21,436 |
Equity - Net Income and Income
Equity - Net Income and Income Tax on Non-controlling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Equity [Abstract] | ||||||
Net income allocated to non-controlling interest | $ 8,521 | $ 3,500 | $ 20,529 | $ 14,046 | ||
Income tax expense (benefit) allocated to non-controlling interest | 124 | (378) | 565 | (352) | ||
Net income attributable to non-controlling interest | $ 8,397 | $ 3,878 | [1] | $ 19,964 | $ 14,398 | [1] |
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Equity - Earnings per Share (De
Equity - Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Equity [Abstract] | ||||||
Net income attributable to stockholders of Class A common stock | $ 2,341 | $ 161 | [1] | $ 6,514 | $ 2,570 | [1] |
Basic weighted average Class A common shares outstanding | 6,043 | 3,062 | [1] | 4,899 | 3,031 | [1] |
Basic EPS attributable to shareholders (in dollars per share) | $ 0.39 | $ 0.05 | [1] | $ 1.33 | $ 0.85 | [1] |
Net income attributable to stockholders of Class A common stock | $ 2,341 | $ 161 | [1] | $ 6,514 | $ 2,570 | [1] |
Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect | 0 | 0 | 11,837 | 8,496 | ||
Effect of conversion of convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock, net of tax effect | (332) | 0 | (312) | 0 | ||
Diluted net income attributable to stockholders of Class A common stock | $ 2,009 | $ 161 | $ 18,039 | $ 11,066 | ||
Basic weighted average Class A common shares outstanding | 6,043 | 3,062 | [1] | 4,899 | 3,031 | [1] |
Effect of dilutive Class B common stock (in shares) | 0 | 0 | 9,006 | 10,750 | ||
Effect of dilutive convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock | 493 | 0 | 493 | 0 | ||
Effect of dilutive restricted stock units (in shares) | 103 | 0 | 87 | 0 | ||
Diluted weighted average shares outstanding | 6,639 | 3,062 | [1] | 14,485 | 13,781 | [1] |
Diluted EPS attributable to shareholders (in dollars per share) | $ 0.30 | $ 0.05 | [1] | $ 1.25 | $ 0.80 | [1] |
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Equity - Classification of Asse
Equity - Classification of Assets and Liabilities (Details) - Variable Interest Entity, Primary Beneficiary $ in Thousands | Jun. 30, 2016USD ($) |
Variable Interest Entity [Line Items] | |
Total Assets | $ 152,356 |
Total Liabilities | 64,697 |
Total current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 119,092 |
Cash and cash equivalents | |
Variable Interest Entity [Line Items] | |
Total Assets | 7,252 |
Accounts receivable | |
Variable Interest Entity [Line Items] | |
Total Assets | 42,677 |
Intercompany receivable with Spark Energy, Inc. | |
Variable Interest Entity [Line Items] | |
Total Assets | 36,774 |
Other current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 32,389 |
Total non-current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 33,264 |
Goodwill | |
Variable Interest Entity [Line Items] | |
Total Assets | 18,379 |
Other assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 14,885 |
Total current liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 45,798 |
Accounts payable | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 22,257 |
Current portion of Senior Credit Facility | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 5,306 |
Other current liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 18,235 |
Total long-term liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 18,899 |
Long-term portion of Senior Credit Facility | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 11,939 |
Convertible subordinated notes to affiliates | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 6,502 |
Other long-term liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | $ 458 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 34,438 | $ 32,967 |
Accumulated depreciation | (29,403) | (28,491) |
Property and equipment—net | 5,035 | 4,476 |
Information technology | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 28,858 | 27,392 |
Information technology | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 2 years | |
Information technology | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,568 | 4,568 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 2 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,012 | $ 1,007 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 2 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 0.5 | $ 0.4 | $ 0.9 | $ 0.8 | |
Information technology | |||||
Property, Plant and Equipment [Line Items] | |||||
Assets not yet placed into service | $ 0.9 | $ 0.9 | $ 0.5 |
Goodwill, Customer Relationsh38
Goodwill, Customer Relationships and Trademarks - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 18,379 | $ 18,379 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | 10,513 | |
Customer Relationships - Acquired | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 14,883 | 14,883 |
Accumulated amortization | (7,832) | (4,503) |
Total | 7,051 | 10,380 |
Customer Relationships - Others | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,320 | 4,320 |
Accumulated amortization | (1,989) | (1,271) |
Total | 2,331 | 3,049 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,268 | 1,268 |
Accumulated amortization | (137) | (74) |
Total | $ 1,131 | $ 1,194 |
Goodwill, Customer Relationsh39
Goodwill, Customer Relationships and Trademarks - Roll Forward (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill balance | $ 18,379 | $ 18,379 |
Finite-lived Intangible Assets [Roll Forward] | ||
Balance at end of period | 10,513 | |
Customer Relationships - Acquired | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Balance at beginning of period | 10,380 | |
Amortization expense | (3,329) | |
Balance at end of period | 7,051 | |
Customer Relationships - Others | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Balance at beginning of period | 3,049 | |
Amortization expense | (718) | |
Balance at end of period | 2,331 | |
Trademarks | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Balance at beginning of period | 1,194 | |
Amortization expense | (63) | |
Balance at end of period | $ 1,131 |
Goodwill, Customer Relationsh40
Goodwill, Customer Relationships and Trademarks - Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Year ending December 31, | |
2,016 | $ 2,644 |
2,017 | 4,116 |
2,018 | 2,204 |
2,019 | 861 |
2,020 | 127 |
More than 5 years | 561 |
Total | $ 10,513 |
Debt - Components of Debt (Deta
Debt - Components of Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | [1] | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Total current debt | $ 5,306 | $ 27,806 | ||
Total long-term debt | 18,441 | 20,931 | ||
Total debt | 23,747 | 48,737 | ||
Paid in-kind interest | 155 | $ 0 | ||
Senior Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Letters of credit issued | $ 17,200 | $ 21,500 | ||
Weighted average interest rate on current portion of debt | 4.21% | 3.90% | ||
Senior Credit Facility | Acquisition Line | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 11,939 | $ 14,592 | ||
Convertible Subordinated Notes | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 6,502 | 6,339 | ||
Paid in-kind interest | 200 | |||
Convertible Subordinated Notes | Oasis Note | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount | 700 | 700 | ||
Senior Credit Facility | Working Capital Line | ||||
Debt Instrument [Line Items] | ||||
Total current debt | 0 | 22,500 | ||
Senior Credit Facility | Acquisition Line | ||||
Debt Instrument [Line Items] | ||||
Total current debt | $ 5,306 | $ 5,306 | ||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Debt - Debt Components Narrativ
Debt - Debt Components Narrative (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Deferred financing costs | $ 600,000 | $ 700,000 |
Other Current Assets | ||
Debt Instrument [Line Items] | ||
Deferred financing costs | 600,000 | 500,000 |
Other Noncurrent Assets | ||
Debt Instrument [Line Items] | ||
Deferred financing costs | $ 0 | $ 200,000 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Line of Credit Facility [Line Items] | ||||||
Amortization of deferred financing costs | $ 117 | $ 50 | $ 235 | $ 101 | ||
Interest Expense | 619 | 234 | [1] | 1,373 | 615 | [1] |
Convertible Subordinated Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest incurred on convertible subordinated notes to affiliate | 126 | 0 | 253 | 0 | ||
Amortization of discount | 100 | 100 | ||||
Working Capital Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fees | 53 | 19 | 83 | 96 | ||
Letters of credit fees | 131 | 75 | 292 | 99 | ||
Working Capital Facility | Senior Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest incurred on Senior Credit Facility | $ 192 | $ 90 | $ 510 | $ 319 | ||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Debt - Senior Credit Facility (
Debt - Senior Credit Facility (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 01, 2016 | May 31, 2016 | |
Senior Secured Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Past maturity, extension period | 1 year | ||
Adjusted tangible net worth threshold (greater than) | $ 18,000,000 | ||
Minimum fixed charge coverage ratio | 110.00% | ||
Minimum fixed charge coverage ratio, increase to numerator increment | 5.00% | ||
Maximum leverage ratio | 250.00% | ||
Debt default, change in control, ownership percentage (less than) | 40.00% | ||
Debt default, material judgment (in excess of) | $ 5,000,000 | ||
Revolving Credit Facility | Working Capital Line | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 82,500,000 | $ 82,500,000 | $ 60,000,000 |
Reduction to interest rate if facility utilization is less than fifty percent | 0.25% | ||
Commitment fee percentage | 0.375% | ||
Nonutilization fee | 0.50% | ||
Adjusted tangible net worth, aggregate commitments percentage | 20.00% | ||
Revolving Credit Facility | Working Capital Line | Maximum | |||
Line of Credit Facility [Line Items] | |||
Line of credit, availability | $ 82,500,000 | ||
Borrowing base calculated on value of eligible accounts receivable, unbilled product sales, inventory and other working capital assets, percentage | 90.00% | ||
Revolving Credit Facility | Working Capital Line | Minimum | |||
Line of Credit Facility [Line Items] | |||
Line of credit, availability | $ 30,000,000 | ||
Borrowing base calculated on value of eligible accounts receivable, unbilled product sales, inventory and other working capital assets, percentage | 80.00% | ||
Consolidated net working capital through December 30, 2016 | $ 5,000,000 | ||
Consolidated net working capital through December 30, 2016, percentage | 10.00% | ||
Consolidated net working capital from December 31, 2016 and thereafter | $ 5,000,000 | ||
Consolidated net working capital from December 31, 2016 and thereafter, percentage | 15.00% | ||
Revolving Credit Facility | Working Capital Line | Eurodollar | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.00% | ||
Revolving Credit Facility | Working Capital Line | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.00% | ||
Revolving Credit Facility | Working Capital Line | Federal Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Revolving Credit Facility | Working Capital Line | Reference Eurodollar Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Revolving Credit Facility | Working Capital Line | Cost of Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
Revolving Credit Facility | Acquisition Line | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | ||
Financing of cost of acquisitions, maximum percentage | 75.00% | ||
Annual payment percentage | 25.00% | ||
Nonutilization fee | 0.50% | ||
Adjusted tangible net worth, borrowings percentage | 33.00% | ||
Revolving Credit Facility | Acquisition Line | Eurodollar | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Revolving Credit Facility | Acquisition Line | Base Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.75% | ||
Revolving Credit Facility | Acquisition Line | Federal Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Revolving Credit Facility | Acquisition Line | Reference Eurodollar Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | [1] | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Increase in estimate of CenStar Earnout | $ 1,000 | $ 0 | ||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Increase in estimate of CenStar Earnout | 1,000 | |||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 3,144 | $ 605 | ||
Derivative liabilities | (2,387) | (11,238) | ||
Contingent payment arrangement | (1,500) | (500) | ||
Fair Value, Measurements, Recurring | Non-trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 3,133 | 200 | ||
Derivative liabilities | (2,387) | (10,985) | ||
Fair Value, Measurements, Recurring | Trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 11 | 405 | ||
Derivative liabilities | 0 | (253) | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 243 | 0 | ||
Derivative liabilities | 0 | (3,324) | ||
Contingent payment arrangement | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 1 | Non-trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 243 | 0 | ||
Derivative liabilities | 0 | (3,324) | ||
Fair Value, Measurements, Recurring | Level 1 | Trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | 0 | ||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 2,901 | 605 | ||
Derivative liabilities | (2,387) | (7,914) | ||
Contingent payment arrangement | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 2 | Non-trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 2,890 | 200 | ||
Derivative liabilities | (2,387) | (7,661) | ||
Fair Value, Measurements, Recurring | Level 2 | Trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 11 | 405 | ||
Derivative liabilities | 0 | (253) | ||
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | 0 | ||
Derivative liabilities | 0 | 0 | ||
Contingent payment arrangement | (1,500) | (500) | ||
Fair Value, Measurements, Recurring | Level 3 | Non-trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | 0 | ||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | Trading Commodity Contract | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | 0 | ||
Derivative liabilities | $ 0 | $ 0 | ||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. |
Accounting for Derivative Ins46
Accounting for Derivative Instruments - Narrative (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral fee | $ 0 | $ 100,000 |
Accounting for Derivative Ins47
Accounting for Derivative Instruments - Volumetric Underlying Derivative Transactions (Details) MWh in Thousands, MMBTU in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016MWhMMBTU | Dec. 31, 2015MWhMMBTU | |
Non-trading | Natural Gas | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 1,792 | 7,543 |
Non-trading | Natural Gas Basis | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 0 | 455 |
Non-trading | Electricity | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | MWh | 1,304 | 1,187 |
Trading | Natural Gas | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 8 | |
Trading | Natural Gas | Sell | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 354 | |
Trading | Natural Gas Basis | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 0 | |
Trading | Natural Gas Basis | Sell | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 455 |
Accounting for Derivative Ins48
Accounting for Derivative Instruments - Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives, net | $ 5,410 | $ (4,874) | $ (4,339) | $ (6,179) |
Total current period settlements on derivatives | 4,465 | 4,533 | 15,737 | 8,724 |
Non-trading | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives, net | 5,487 | (4,808) | (4,133) | (6,008) |
Total current period settlements on derivatives | 4,394 | 4,493 | 15,672 | 8,608 |
Non-trading | Censtar and Oasis Power Holdings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives, net | 900 | 200 | 100 | 200 |
Trading | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives, net | (77) | (66) | (206) | (171) |
Total current period settlements on derivatives | $ 71 | $ 40 | $ 65 | $ 116 |
Accounting for Derivative Ins49
Accounting for Derivative Instruments - Offsetting Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Commodity Contract | ||
Offsetting Assets [Line Items] | ||
Gross Assets | $ 6,409 | $ 1,000 |
Gross Amounts Offset | (3,265) | (395) |
Net Assets | 3,144 | 605 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 3,144 | 605 |
Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 5,704 | 1,000 |
Gross Amounts Offset | (2,999) | (395) |
Net Assets | 2,705 | 605 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 2,705 | 605 |
Non-trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 5,681 | 589 |
Gross Amounts Offset | (2,987) | (389) |
Net Assets | 2,694 | 200 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 2,694 | 200 |
Trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 23 | 411 |
Gross Amounts Offset | (12) | (6) |
Net Assets | 11 | 405 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 11 | 405 |
Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 705 | 0 |
Gross Amounts Offset | (266) | 0 |
Net Assets | 439 | 0 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 439 | 0 |
Non-trading Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 705 | 0 |
Gross Amounts Offset | (266) | 0 |
Net Assets | 439 | 0 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ 439 | $ 0 |
Accounting for Derivative Ins50
Accounting for Derivative Instruments - Offsetting Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Commodity Contract | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | $ (4,172) | $ (14,888) |
Gross Amounts Offset | 1,785 | 3,550 |
Net Liabilities | (2,387) | (11,338) |
Cash Collateral Offset | 0 | 100 |
Net Amount Presented | (2,387) | (11,238) |
Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (3,489) | (13,938) |
Gross Amounts Offset | 1,560 | 3,218 |
Net Liabilities | (1,929) | (10,720) |
Cash Collateral Offset | 0 | 100 |
Net Amount Presented | (1,929) | (10,620) |
Non-trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (3,489) | (13,618) |
Gross Amounts Offset | 1,560 | 3,151 |
Net Liabilities | (1,929) | (10,467) |
Cash Collateral Offset | 0 | 100 |
Net Amount Presented | (1,929) | (10,367) |
Trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | 0 | (320) |
Gross Amounts Offset | 0 | 67 |
Net Liabilities | 0 | (253) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 0 | (253) |
Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (683) | (950) |
Gross Amounts Offset | 225 | 332 |
Net Liabilities | (458) | (618) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | (458) | (618) |
Non-trading Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (683) | (950) |
Gross Amounts Offset | 225 | 332 |
Net Liabilities | (458) | (618) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ (458) | $ (618) |
Taxes (Details)
Taxes (Details) - USD ($) $ in Thousands | Jun. 08, 2016 | Apr. 01, 2016 | Feb. 03, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||||||
Long-term payable pursuant to the TRA | $ 46,768 | $ 20,713 | ||||
Income tax rate | 17.80% | 5.70% | ||||
Affiliated Entity | Retailco | ||||||
Related Party Transaction [Line Items] | ||||||
Long-term deferred tax asset | $ 2,600 | $ 3,900 | $ 3,900 | |||
Long-term deferred tax liability | $ 6,900 | $ 10,300 | $ 10,300 | |||
Number of shares of common stock exchanged | 500,000 | 1,725,000 | 1,000,000 | |||
Net deferred tax asset | $ 5,300 | $ 7,600 | $ 8,000 | |||
NuDevco Retail Holdings and NuDevco Retail | ||||||
Related Party Transaction [Line Items] | ||||||
Net deferred tax asset | $ 15,600 | |||||
Payable pursuant to the TRA | 20,700 | |||||
Long-term payable pursuant to the TRA | 19,300 | |||||
Payable pursuant to the TRA, current | 1,400 | |||||
Long-term deferred tax asset related to the TRA | $ 7,900 | |||||
New Accounting Pronouncement, Early Adoption, Effect | ||||||
Related Party Transaction [Line Items] | ||||||
Net current deferred tax liability | 900 | |||||
Long-term deferred tax asset | 23,400 | |||||
Long-term deferred tax liability | $ 900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Arturo Amaya et al v. Spark Energy Gas, LLC | ||
Loss Contingencies [Line Items] | ||
Loss during the period | $ 0.5 | |
Indirect Tax Audits | ||
Loss Contingencies [Line Items] | ||
Loss during the period | $ 1.6 | 1.6 |
Increase in liabilities from accrual of additional loss | $ 1.9 | $ 1.9 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - USD ($) | Jan. 01, 2016 | May 16, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | May 16, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2015 | Jul. 08, 2015 | |||
Related Party Transaction [Line Items] | |||||||||||||
Accounts payable—affiliates | $ 1,990,000 | $ 1,990,000 | $ 1,962,000 | ||||||||||
Prepaid assets - affiliates | 100,000 | 100,000 | 210,000 | ||||||||||
Net asset optimization revenues | [1] | (676,000) | $ (67,000) | [2] | (150,000) | $ 1,862,000 | [2] | ||||||
Retail cost of revenues (less than) | [3] | 37,845,000 | 45,948,000 | [2] | 106,644,000 | 115,033,000 | [2] | ||||||
General and administrative expense - affiliates | [4] | 16,199,000 | 13,712,000 | [2] | 33,580,000 | 28,416,000 | [2] | ||||||
Contributions from NuDevco | 0 | 129,000 | [2] | ||||||||||
Proceeds from disgorgement of stockholders short-swing profits | $ 580,000 | 0 | [2] | ||||||||||
Tax receivable agreement, net cash savings (as a percent) | 15.00% | ||||||||||||
Convertible Debt | CenStar | Censtar Convertible Debt | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes, issued amount | $ 2,100,000 | ||||||||||||
Convertible Debt | Oasis | Oasis Power Holdings Convertible Debt | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Notes, issued amount | $ 5,000,000 | ||||||||||||
Affiliated Entity | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Accounts receivable - affiliates | 1,000,000 | $ 1,000,000 | 1,800,000 | ||||||||||
Accounts payable—affiliates | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||
Prepaid assets - affiliates | 100,000 | 100,000 | $ 200,000 | ||||||||||
Affiliated Entity | Retailco | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Service contract term | 1 year | ||||||||||||
Service contract, renewal term | 1 year | ||||||||||||
Affiliated Entity | Purchased Natural Gas From Affiliate | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Cost of revenues | 400,000 | 3,100,000 | 1,600,000 | 6,200,000 | |||||||||
Affiliated Entity | Purchased Natural Gas Sold To Affiliate | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Net asset optimization revenues | 100,000 | 200,000 | 200,000 | 700,000 | |||||||||
Affiliated Entity | Marlin Transportation Agreement | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Retail cost of revenues (less than) | $ 100,000 | $ 100,000 | |||||||||||
Affiliated Entity | Allocated Overhead Costs | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
General and administrative expense - affiliates | 4,600,000 | $ 700,000 | 9,600,000 | 1,600,000 | |||||||||
Affiliated Entity | Allocated Overhead Costs | Retailco | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
General and administrative expense - affiliates | 3,800,000 | 8,000,000 | |||||||||||
Affiliated Entity | Property and Equipment Capitalized | Retailco | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Amount capitalized for application, development and implementation of various systems | 500,000 | 1,100,000 | |||||||||||
NuDevco Retail and Retailco | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Payments of distributions to affiliates | $ 6,400,000 | $ 7,800,000 | |||||||||||
Tax receivable agreement, net cash savings (as a percent) | 85.00% | ||||||||||||
NuDevco Retail and Retailco | Payment of Income Taxes Incurred by the Company | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Payments of distributions to affiliates | $ 3,500,000 | ||||||||||||
NuDevco Retail Holdings and NuDevco Retail | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Accounts payable—affiliates | $ 1,400,000 | $ 1,400,000 | |||||||||||
Tax receivable agreement, deferral period | 5 years | ||||||||||||
Tax receivable agreement, coverage percentage | 130.00% | ||||||||||||
Tax receivable agreement, target dividend (in dollars per share) | $ 0.3625 | ||||||||||||
[1] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $41 and $176 for the three months ended June 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $376 and $3,114 for the three months ended June 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $665 for the six months ended June 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $6,207 for the six months ended June 30, 2016 and 2015, respectively. | ||||||||||||
[2] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. | ||||||||||||
[3] | Retail cost of revenues includes retail cost of revenues—affiliates of less than $100 for each of the three and six months ended June 30, 2016 and 2015, respectively. | ||||||||||||
[4] | General and administrative includes general and administrative expense—affiliates of $4.0 million and $0 for the three months ended June 30, 2016, and 2015, respectively, and $8.4 million and $0 for the six months ended June 30, 2016 and 2015, respectively. |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Asset optimization revenue | $ 20.8 | $ 23 | $ 63.1 | $ 93 |
Asset optimization cost of revenues | $ 21.5 | $ 23.1 | $ 63.3 | $ 91.1 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||||
Segment Reporting Information [Line Items] | |||||||
Income before income tax expense | $ 15,474 | $ 4,497 | [1] | $ 32,201 | $ 17,987 | [1] | |
Interest and other income | (194) | (186) | [1] | (99) | (321) | [1] | |
Interest expense | 619 | 234 | [1] | 1,373 | 615 | [1] | |
Operating Income | 15,899 | 4,545 | [1] | 33,475 | 18,281 | [1] | |
Depreciation and amortization | 6,244 | 6,038 | [1] | 13,033 | 10,316 | [1] | |
General and administrative | [2] | 16,199 | 13,712 | [1] | 33,580 | 28,416 | [1] |
Less: | |||||||
Net asset optimization (expenses) revenues | [3] | (676) | (67) | [1] | (150) | 1,862 | [1] |
Net, Gain (losses) on non-trading derivative instruments | 5,410 | (4,874) | (4,339) | (6,179) | |||
Net, Cash settlements on non-trading derivative instruments | 15,828 | 9,076 | [1] | ||||
Retail Gross Margin | 29,137 | 24,677 | 68,699 | 52,551 | |||
Non-trading | |||||||
Less: | |||||||
Net, Gain (losses) on non-trading derivative instruments | 5,487 | (4,808) | (4,133) | (6,008) | |||
Net, Cash settlements on non-trading derivative instruments | $ 4,394 | $ 4,493 | $ 15,672 | $ 8,608 | |||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. | ||||||
[2] | General and administrative includes general and administrative expense—affiliates of $4.0 million and $0 for the three months ended June 30, 2016, and 2015, respectively, and $8.4 million and $0 for the six months ended June 30, 2016 and 2015, respectively. | ||||||
[3] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $41 and $176 for the three months ended June 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $376 and $3,114 for the three months ended June 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $665 for the six months ended June 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $6,207 for the six months ended June 30, 2016 and 2015, respectively. |
Segment Reporting - Financial D
Segment Reporting - Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | ||||
Segment Reporting Information [Line Items] | ||||||||
Total Revenues | $ 76,187 | $ 70,243 | [1] | $ 186,732 | $ 172,046 | [1] | ||
Retail cost of revenues | [2] | 37,845 | 45,948 | [1] | 106,644 | 115,033 | [1] | |
Less: | ||||||||
Net asset optimization (expenses) revenues | [3] | (676) | (67) | [1] | (150) | 1,862 | [1] | |
(Losses) gains on non-trading derivatives | 5,410 | (4,874) | (4,339) | (6,179) | ||||
Current period settlements on non-trading derivatives | 4,465 | 4,533 | 15,737 | 8,724 | ||||
Retail gross margin | 29,137 | 24,677 | 68,699 | 52,551 | ||||
Total Assets | 168,062 | 168,062 | $ 162,234 | |||||
Goodwill | 18,379 | 18,379 | 18,379 | |||||
Non-trading | ||||||||
Less: | ||||||||
(Losses) gains on non-trading derivatives | 5,487 | (4,808) | (4,133) | (6,008) | ||||
Current period settlements on non-trading derivatives | 4,394 | 4,493 | 15,672 | 8,608 | ||||
Operating Segments | Retail Electricity | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Revenues | 57,556 | 48,698 | 119,489 | 93,147 | ||||
Retail cost of revenues | 33,302 | 36,458 | 79,602 | 72,077 | ||||
Less: | ||||||||
Net asset optimization (expenses) revenues | 0 | 0 | 0 | 0 | ||||
Retail gross margin | 17,674 | 15,183 | 33,080 | 24,745 | ||||
Total Assets | 184,869 | 184,869 | 150,245 | |||||
Goodwill | 16,476 | 16,476 | 16,476 | |||||
Operating Segments | Retail Electricity | Non-trading | ||||||||
Less: | ||||||||
(Losses) gains on non-trading derivatives | 3,599 | (5,459) | (5,791) | (6,092) | ||||
Current period settlements on non-trading derivatives | 2,981 | 2,516 | 12,598 | 2,417 | ||||
Operating Segments | Retail Natural Gas | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Revenues | 18,631 | 21,545 | 67,243 | 78,899 | ||||
Retail cost of revenues | 4,543 | 9,490 | 27,042 | 42,956 | ||||
Less: | ||||||||
Net asset optimization (expenses) revenues | (676) | (67) | (150) | 1,862 | ||||
Retail gross margin | 11,463 | 9,494 | 35,619 | 27,806 | ||||
Total Assets | 123,679 | 123,679 | 113,583 | |||||
Goodwill | 1,903 | 1,903 | 1,903 | |||||
Operating Segments | Retail Natural Gas | Non-trading | ||||||||
Less: | ||||||||
(Losses) gains on non-trading derivatives | 1,888 | 651 | 1,658 | 84 | ||||
Current period settlements on non-trading derivatives | 1,413 | 1,977 | 3,074 | 6,191 | ||||
Corporate and Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Revenues | 0 | 0 | 0 | 0 | ||||
Retail cost of revenues | 0 | 0 | 0 | 0 | ||||
Less: | ||||||||
Net asset optimization (expenses) revenues | 0 | 0 | 0 | 0 | ||||
Retail gross margin | 0 | 0 | 0 | 0 | ||||
Total Assets | 113,913 | 113,913 | 88,823 | |||||
Goodwill | 0 | 0 | 0 | |||||
Corporate and Other | Non-trading | ||||||||
Less: | ||||||||
(Losses) gains on non-trading derivatives | 0 | 0 | 0 | 0 | ||||
Current period settlements on non-trading derivatives | 0 | 0 | 0 | 0 | ||||
Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Revenues | 0 | 0 | 0 | 0 | ||||
Retail cost of revenues | 0 | 0 | 0 | 0 | ||||
Less: | ||||||||
Net asset optimization (expenses) revenues | 0 | 0 | 0 | 0 | ||||
Retail gross margin | 0 | 0 | 0 | 0 | ||||
Total Assets | (254,399) | (254,399) | (190,417) | |||||
Goodwill | 0 | 0 | $ 0 | |||||
Eliminations | Non-trading | ||||||||
Less: | ||||||||
(Losses) gains on non-trading derivatives | 0 | 0 | 0 | 0 | ||||
Current period settlements on non-trading derivatives | $ 0 | $ 0 | $ 0 | $ 0 | ||||
[1] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Note 2 "Basis of Presentation" for further discussion. | |||||||
[2] | Retail cost of revenues includes retail cost of revenues—affiliates of less than $100 for each of the three and six months ended June 30, 2016 and 2015, respectively. | |||||||
[3] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $41 and $176 for the three months ended June 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $376 and $3,114 for the three months ended June 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $665 for the six months ended June 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $6,207 for the six months ended June 30, 2016 and 2015, respectively. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 01, 2016 | Jul. 20, 2016 | Jun. 30, 2016 |
Revolving Credit Facility | Working Capital Line | Minimum | |||
Subsequent Event [Line Items] | |||
Line of credit, availability | $ 30,000,000 | ||
Subsequent Event | Revolving Credit Facility | Working Capital Line | Minimum | |||
Subsequent Event [Line Items] | |||
Line of credit, availability | $ 40,000,000 | ||
Subsequent Event | Common Class A | |||
Subsequent Event [Line Items] | |||
Dividends declared (n dollars per share) | $ 0.3625 | ||
Subsequent Event | Common Class B | Provider Companies | Affiliated Entity | Retailco | |||
Subsequent Event [Line Items] | |||
Number of shares issued for acquisition | 699,742 | ||
Aggregate proceeds of shares issued to fund acquisition | $ 13,994,840 |