Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
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 | 6,496,559 | |
Common Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,224,742 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Current assets: | |||
Cash and cash equivalents | [1] | $ 16,907 | $ 4,474 |
Accounts receivable, net of allowance for doubtful accounts of $1.9 million as of September 30, 2016 and December 31, 2015, respectively | 79,744 | 59,936 | |
Accounts receivable—affiliates | 2,836 | 1,840 | |
Inventory | 3,725 | 3,665 | |
Fair value of derivative assets | 1,536 | 605 | |
Customer acquisition costs, net | 15,565 | 13,389 | |
Customer relationships, net | 19,042 | 6,627 | |
Prepaid assets | [2] | 1,515 | 700 |
Deposits | 8,158 | 7,421 | |
Other current assets | 10,717 | 4,023 | |
Total current assets | 159,745 | 102,680 | |
Property and equipment, net | 4,866 | 4,476 | |
Fair value of derivative assets | 318 | 0 | |
Customer acquisition costs, net | 4,531 | 3,808 | |
Customer relationships, net | 24,478 | 6,802 | |
Non-current deferred tax assets | 56,101 | 23,380 | |
Goodwill | 79,556 | 18,379 | |
Other assets | 8,136 | 2,709 | |
Total assets | 337,731 | 162,234 | |
Current liabilities: | |||
Accounts payable | 34,964 | 29,732 | |
Accounts payable—affiliates | 2,598 | 1,962 | |
Accrued liabilities | 31,744 | 12,245 | |
Fair value of derivative liabilities | 13,762 | 10,620 | |
Current portion of Senior Credit Facility | 49,269 | 27,806 | |
Contingent consideration for acquisitions - current | 11,325 | 500 | |
Current portion of note payable | 13,445 | 0 | |
Other current liabilities | 3,662 | 1,323 | |
Total current liabilities | 160,769 | 84,188 | |
Long-term liabilities: | |||
Fair value of derivative liabilities | 1,467 | 618 | |
Long-term payable pursuant to tax receivable agreement—affiliates | 50,625 | 20,713 | |
Long-term portion of Senior Credit Facility | 0 | 14,592 | |
Non-current deferred tax liability | 0 | 853 | |
Convertible subordinated notes to affiliate | 6,542 | 6,339 | |
Contingent consideration for acquisitions | 7,611 | 0 | |
Other long-term liabilities | 0 | 1,612 | |
Total liabilities | 227,014 | 128,915 | |
Commitments and contingencies (Note 11) | |||
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized, zero issued and outstanding at September 30, 2016 and December 31, 2015 | 0 | 0 | |
Additional paid-in capital | 23,476 | 12,565 | |
Accumulated other comprehensive loss | (33) | 0 | |
Retained deficit | (681) | (1,366) | |
Total stockholders' equity | 22,930 | 11,338 | |
Non-controlling interest in Spark HoldCo, LLC | 87,787 | 21,981 | |
Total equity | 110,717 | 33,319 | |
Total liabilities and stockholders' equity | 337,731 | 162,234 | |
Common Class A | |||
Common stock | 65 | 31 | |
Common Class B | |||
Common stock | $ 103 | $ 108 | |
[1] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||
[2] | Prepaid assets includes prepaid assets—affiliates of less than $1 and $210 as of September 30, 2016 and December 31, 2015, respectively. See Note 12 "Transaction with Affiliates" for further discussion. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Prepaid assets - affiliates (less than) | $ 1 | $ 210 |
Allowance for doubtful accounts | $ 1,900 | $ 1,900 |
Preferred stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock shares issued (shares) | 0 | 0 |
Preferred stock shares outstanding (shares) | 0 | 0 |
Common Class A | ||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (shares) | 120,000,000 | 120,000,000 |
Common stock shares issued (shares) | 6,496,559 | 3,118,623 |
Common stock shares outstanding (shares) | 6,496,559 | 3,118,623 |
Common Class B | ||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (shares) | 60,000,000 | 60,000,000 |
Common stock shares issued (shares) | 10,224,742 | 10,750,000 |
Common stock shares outstanding (shares) | 10,224,742 | 10,750,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2016 | [1] | Sep. 30, 2015 | [2] | Sep. 30, 2016 | [1] | Sep. 30, 2015 | [2] | ||
Revenues: | |||||||||
Retail revenues | $ 157,986 | $ 91,812 | $ 378,063 | $ 261,996 | |||||
Net asset optimization (expenses) revenues | [3] | 108 | (545) | (42) | 1,317 | ||||
Total Revenues | 158,094 | 91,267 | 378,021 | 263,313 | |||||
Operating Expenses: | |||||||||
Retail cost of revenues | [4] | 122,830 | 60,967 | 248,593 | 176,000 | ||||
General and administrative | [5] | 18,009 | 15,493 | 55,188 | 43,909 | ||||
Depreciation and amortization | 8,295 | 7,557 | 23,337 | [6] | 17,873 | [7] | |||
Total Operating Expenses | 149,134 | 84,017 | 327,118 | 237,782 | |||||
Operating income | 8,960 | 7,250 | 50,903 | 25,531 | |||||
Other (expense)/income: | |||||||||
Interest expense | (1,270) | (800) | (2,855) | (1,415) | |||||
Interest and other income | 240 | 5 | 340 | 326 | |||||
Total other expenses | (1,030) | (795) | (2,515) | (1,089) | |||||
Income before income tax expense | 7,930 | 6,455 | 48,388 | 24,442 | |||||
Income tax expense | 1,129 | 580 | 6,852 | 1,599 | |||||
Net income | 6,801 | 5,875 | 41,536 | [6],[8] | 22,843 | [7] | |||
Less: Net income attributable to non-controlling interests | 6,618 | 4,561 | 34,839 | 18,959 | |||||
Net income attributable to Spark Energy, Inc. stockholders | 183 | 1,314 | 6,697 | 3,884 | |||||
Other comprehensive loss, net of tax: | |||||||||
Foreign currency translation adjustment for equity method investee | (12) | 0 | (73) | 0 | |||||
Other comprehensive loss | (12) | 0 | (73) | 0 | |||||
Comprehensive income | 6,789 | 5,875 | 41,463 | 22,843 | |||||
Less: Comprehensive income attributable to non-controlling interests | 6,611 | 4,561 | 34,799 | 18,959 | |||||
Comprehensive income attributable to Spark Energy, Inc. stockholders | $ 178 | $ 1,314 | $ 6,664 | $ 3,884 | |||||
Net income (loss) attributable to Spark Energy, Inc. per share of Class A common stock | |||||||||
Basic (in dollars per share) | $ 0.03 | $ 0.42 | $ 1.23 | $ 1.27 | |||||
Diluted (in dollars per share) | $ (0.04) | $ 0.31 | $ 1.05 | $ 1.09 | |||||
Weighted average shares of Class A common stock outstanding | |||||||||
Basic (in shares) | 6,491 | 3,097 | 5,434 | 3,053 | |||||
Diluted (in shares) | 7,055 | 14,232 | 6,050 | 13,948 | |||||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||
[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 Notes 2 "Basis of Presentation" for further discussion. | ||||||||
[3] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $0 and $3,382 for the three months ended September 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $928 for the nine months ended September 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $9,589 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||
[4] | Retail cost of revenues includes retail cost of revenues—affiliates of $0 for the three months ended September 30, 2016 and 2015, respectively, and less than $100 for the nine months ended September 30, 2016 and 2015 respectively. | ||||||||
[5] | General and administrative includes general and administrative expense—affiliates of $3,078 and $0 for the three months ended September 30, 2016, and 2015, respectively, and $11,521 and $100 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||
[6] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||
[7] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. | ||||||||
[8] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||||||
Optimization revenues | [2] | $ 108 | [1] | $ (545) | [3] | $ (42) | [1] | $ 1,317 | [3] |
Retail cost of revenues (less than) | [4] | 122,830 | [1] | 60,967 | [3] | 248,593 | [1] | 176,000 | [3] |
General and administrative | [5] | 18,009 | [1] | 15,493 | [3] | 55,188 | [1] | 43,909 | [3] |
Affiliates | |||||||||
Optimization revenues | 0 | 263 | 154 | 928 | |||||
Optimization cost of revenues - affiliates | 0 | 3,382 | 1,633 | 9,589 | |||||
Retail cost of revenues (less than) | 0 | 0 | 100 | 100 | |||||
General and administrative | $ 3,078 | $ 0 | $ 11,521 | $ 100 | |||||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||
[2] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $0 and $3,382 for the three months ended September 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $928 for the nine months ended September 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $9,589 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||
[3] | 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 Notes 2 "Basis of Presentation" for further discussion. | ||||||||
[4] | Retail cost of revenues includes retail cost of revenues—affiliates of $0 for the three months ended September 30, 2016 and 2015, respectively, and less than $100 for the nine months ended September 30, 2016 and 2015 respectively. | ||||||||
[5] | General and administrative includes general and administrative expense—affiliates of $3,078 and $0 for the three months ended September 30, 2016, and 2015, respectively, and $11,521 and $100 for the nine months ended September 30, 2016 and 2015, respectively. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 9 months ended Sep. 30, 2016 - USD ($) 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 | 1,737 | 1,737 | 1,737 | |||||||
Restricted stock unit vesting (in shares) | 153 | |||||||||
Restricted stock unit vesting | 1,062 | 1,062 | $ 2 | 1,060 | ||||||
Excess tax benefit related to restricted stock vesting | 186 | 186 | 186 | |||||||
Consolidated net income (1) | [3] | 41,536 | [1],[2] | 6,697 | 6,697 | 34,839 | ||||
Foreign currency translation adjustment for equity method investee | (73) | [1] | (33) | (33) | (40) | |||||
Beneficial conversion feature | 243 | 243 | 243 | |||||||
Distributions paid to non-controlling unit holders | (26,284) | (26,284) | ||||||||
Contribution of the Major Energy Companies in excess of cash | [2] | 6,040 | 6,040 | |||||||
Dividends paid to Class A common stockholders | (6,012) | (6,012) | (6,012) | |||||||
Proceeds from disgorgement of stockholder short-swing profits | 941 | 941 | 941 | |||||||
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) | ||||
Issuance of Class B Common Stock | 53,994 | 27 | $ 27 | 53,967 | ||||||
Issuance of Class B Common Stock (shares) | 2,700 | |||||||||
Balance at end of period (in shares) at Sep. 30, 2016 | 6,497 | 10,225 | ||||||||
Balance at end of period at Sep. 30, 2016 | $ 110,717 | $ 22,930 | $ 65 | $ 103 | $ (33) | $ 23,476 | $ (681) | $ 87,787 | ||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||||
[2] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||||
[3] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2016 | [2] | Sep. 30, 2015 | ||
Cash flows from operating activities: | ||||
Net income | $ 41,536 | [1],[3] | $ 22,843 | [4],[5] |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||
Depreciation and amortization expense | 32,743 | 17,873 | ||
Deferred income taxes | 1,408 | 872 | [4] | |
Stock based compensation | 4,027 | 1,992 | [4] | |
Amortization of deferred financing costs | 465 | 295 | [4] | |
Change in fair value of CenStar Earnout | 843 | 0 | [4] | |
Bad debt expense | 842 | 6,082 | [4] | |
Loss on derivatives, net | (2,887) | 6,118 | [4] | |
Current period cash settlements on derivatives, net | (18,693) | (15,120) | [4] | |
Other | 314 | 21 | [4] | |
Changes in assets and liabilities: | ||||
Decrease in restricted cash | 0 | 707 | [4] | |
Decrease in accounts receivable | 21,147 | 18,566 | [4] | |
(Increase) decrease in accounts receivable—affiliates | (997) | (216) | [4] | |
Decrease in inventory | 568 | 2,978 | [4] | |
Increase in customer acquisition costs | (10,234) | (17,725) | [4] | |
(Increase) decrease in prepaid and other current assets | (923) | 11,110 | [4] | |
Increase in intangible assets—customer relationships | 0 | (2,776) | [4] | |
Decrease (increase) in other assets | 733 | (256) | [4] | |
Decrease in accounts payable and accrued liabilities | (6,490) | (14,610) | [4] | |
Increase in accounts payable—affiliates | 636 | 849 | [4] | |
Decrease in other current liabilities | (1,783) | (1,534) | [4] | |
(Decrease) increase in other non-current liabilities | (1,612) | 1,606 | [4] | |
Net cash provided by operating activities | 61,643 | 39,675 | [4] | |
Cash flows from investing activities: | ||||
Purchases of property and equipment | (1,763) | (1,255) | [4] | |
Acquisition of CenStar and Oasis net assets | 0 | (41,234) | [4] | |
Acquisition of Major Energy Companies and Provider Companies net assets | (30,507) | 0 | [4] | |
Payment of CenStar Earnout | (1,343) | 0 | [4] | |
Investment in eREX Spark Marketing Joint Venture | (562) | (330) | [4] | |
Net cash used in investing activities | (34,175) | (42,819) | [4] | |
Cash flows from financing activities: | ||||
Borrowings on the Senior Credit Facility | 47,923 | 52,225 | [4] | |
Payments on the Senior Credit Facility | (44,601) | (38,000) | [4] | |
Contributions from NuDevco | 0 | 129 | [4] | |
Proceeds from issuance of Class B common stock | 13,995 | 0 | [4] | |
Proceeds from disgorgement of stockholders short-swing profits | 941 | 0 | [4] | |
Issuance of convertible subordinated notes to affiliate | 0 | 7,075 | [4] | |
Restricted stock vesting | (1,183) | (265) | [4] | |
Excess tax benefit related to restricted stock vesting | 185 | 0 | [4] | |
Payment of dividends to Class A common stockholders | (6,012) | (3,333) | [4] | |
Payment of distributions to non-controlling unitholders | (26,283) | (11,691) | [4] | |
Net cash (used in) provided by financing activities | (15,035) | 6,140 | [4] | |
Increase in cash and cash equivalents | 12,433 | 2,996 | [4] | |
Cash and cash equivalents—beginning of period | 4,474 | 4,359 | [4] | |
Cash and cash equivalents—end of period | 16,907 | 7,355 | [4] | |
Non-cash items: | ||||
Contingent consideration - earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions | 18,936 | 0 | [4] | |
Assumption of legal liability in connection with the Major Energy Companies acquisition | 5,000 | 0 | ||
Contribution of the Major Energy Companies in excess of cash | 6,040 | 0 | ||
Installment consideration incurred in connection with the Provider Companies acquisition | 3,023 | 0 | [4] | |
Property and equipment purchase accrual | 64 | 11 | [4] | |
Liability due to tax receivable agreement | (29,912) | 0 | [4] | |
Tax benefit from tax receivable agreement | 33,124 | 0 | [4] | |
Cash paid during the period for: | ||||
Interest | 1,450 | 1,061 | [4] | |
Taxes | 3,783 | 157 | [4] | |
Common Class B | ||||
Non-cash items: | ||||
Value of shares issued | $ 40,000 | $ 0 | [4] | |
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||
[2] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||
[3] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||
[4] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. | |||
[5] | 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 Notes 2 "Basis of Presentation" for further discussion. |
Formation and Organization
Formation and Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Formation and Organization | 1. Formation and Organization Organization Spark Energy, Inc. ("Spark Energy," "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"), CenStar Energy Corp. ("CenStar"), Electricity Maine, LLC, Electricity N.H., LLC and Provider Power Mass, LLC (collectively, the "Provider Companies"); and Major Energy Services, LLC, Major Energy Electric Services, LLC, and Respond Power, LLC (collectively, the "Major Energy Companies"), 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. The Provider Companies operate as retail energy providers. Electricity Maine, LLC, Electricity N.H., LLC, and Provider Power Mass, LLC were formed on June 17, 2010, January 20, 2012 and August 22, 2012, respectively, as limited liability companies under the Maine Limited Liability Company Act. We acquired the Provider Companies on August 1, 2016. The Major Energy Companies operate as retail energy providers. Major Energy Services, LLC, Major Energy Electric Services, LLC and Respond Power, LLC were formed on October 11, 2005, September 12, 2007 and July 11, 2008, respectively, as limited liability companies under the New York Limited Liability Company Law. We completed the purchase of all the outstanding membership interests of the Major Energy Companies on August 23, 2016 from an affiliate, as described in Note 2. 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 4 “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. Retail Acquisition Co., LLC ("RAC") is entitled to similar registration rights under the CenStar Note and Oasis Note. Refer to Note 7 "Debt" for further discussion. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 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 that are, in the opinion of management, necessary for a fair presentation of the condensed consolidated financial statements. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that 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 12 “Transactions with Affiliates.” Presentation of the Acquisition of Oasis Power Holdings, LLC On May 12, 2015, RAC, an affiliate of the Company, 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 reflect operations of Oasis from May 12, 2015 to July 31, 2015. The unaudited condensed consolidated financial statements for this recast period had 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. Presentation of the Acquisition of Major Energy Companies On April 15, 2016, National Gas & Electric, LLC (“NG&E”), an affiliate of the Company , completed the acquisition of 100% of the membership interests of Major Energy Companies. On May 3, 2016, Spark HoldCo and Retailco entered into a Membership Interest Purchase Agreement (the "Major Purchase Agreement") with NG&E for the purchase of all of the membership interests of the Major Energy Companies. Spark HoldCo and Retailco completed the acquisition of the Major Energy Companies from NG&E on August 23, 2016. Because the acquisition of the Major Energy Companies was a transfer of equity interests of entities under common control, the Company's historical financial statements have been recast in this Form 10-Q to include the results attributable to Major Energy Companies from April 15, 2016. The unaudited condensed consolidated financial statements for this recast period have been prepared from Major Energy Companies' historical cost-basis and may not necessarily be indicative of the actual results of operations that would have occurred had the Company owned the Major Energy Companies 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 14 “Subsequent Events” for further discussion. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported earnings. 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 are 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 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. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 provides guidance on the presentation and classification of eight specific cash flow issues in the statement of cash flows. Those issues are cash payment for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instrument or other debt instrument with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; cash proceeds from the settlement of insurance claims, cash received from settlement of corporate-owned life insurance policies; distribution received from equity method investees; beneficial interest in securitization transactions; and classification of cash receipts and payments that have aspects of more than one class of cash flows. The guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. This ASU should be applied using a retrospective transition method for each period presented. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 requires immediate recognition of the current and deferred income tax consequences of intercompany asset transfers other than inventory. Current U.S. GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2017, with early adoption permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. This ASU should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions Acquisition of the Provider Companies On August 1, 2016, the Company and Spark HoldCo completed the purchase of all of the outstanding membership interests of the Provider Companies. The Provider Companies serve electrical customers in Maine, New Hampshire and Massachusetts. The purchase price for the Provider Companies was approximately $34.1 million , which included $1.3 million in working capital, subject to adjustments, and up to $9.0 million in earnout payments, valued at $4.8 million as of the purchase date, to be paid by June 30, 2017, subject to the achievement of certain performance targets (the "Provider Earnout"). See Note 8 "Fair Value Measurements" for further discussion on the Provider Earnout. The purchase price was funded by the issuance of 699,742 shares of Class B common stock (and a corresponding number of Spark HoldCo units) sold to Retailco, valued at $14.0 million based on a value of $20 per share; borrowings under the Senior Credit Facility of $10.6 million ; and $3.8 million in net installment consideration to be paid in ten monthly payments that commenced in August 2016. The first payment of $0.4 million was made with the initial consideration paid. See Note 7 "Debt" for further discussion of the Senior Credit Facility. The acquisition of the Provider Companies has been accounted for under the acquisition method in accordance with ASC 805, Business Combinations (“ASC 805”) . The allocation of purchase consideration was based upon the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition. The allocation was made to major categories of assets and liabilities based on management’s best estimates, supported by independent third-party analyses. The excess of the purchase price over the estimated fair value of tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. The allocation of the purchase consideration is as follows (in thousands): Cash $ 51 Net working capital, net of cash acquired 1,229 Intangible assets - customer relationships and non-compete agreements 24,417 Intangible assets - trademark 529 Goodwill 26,040 Fair value of derivative liabilities (18,163 ) Total $ 34,103 The fair values of intangible assets were measured primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement as defined by ASC 820, "Fair Value Measurement" ("ASC 820"). The fair value of derivative liabilities were measured by 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 and represent a Level 2 measurement as defined by ASC 820. Refer to Note 8 "Fair Value Measurements" for further discussion on the fair values hierarchy. Significant inputs for Level 3 measurements were as follows: Customer relationships. The customer relationships, reflective of the Provider Companies' customer base, were valued using an excess earnings method under the income approach. Using this method, the Company estimated the future cash flows resulting from the existing customer relationships, considering attrition as well as charges for contributory assets, such as net working capital, intangible assets, and assembled workforce. These future cash flows were then discounted using an appropriate risk-adjusted rate of return to arrive at the present value of the expected future cash flows. These customer relationships were bifurcated between unhedged and hedged and will be amortized to depreciation and amortization based on the expected future net cash flows by year and expensed to Retail cost of revenues based on the expected term of the underlying fixed price contract acquired in each reporting period, respectively. Trademark. The fair value of the Provider Companies' trademark is reflective of the value associated with the recognition and reputation of the Provider Companies to its target markets. The fair value of the trademark was estimated using the income approach. Under this approach, the Company estimated the expected trademark royalty revenue by analyzing market royalty rates of comparative trademark agreements and applying an expected royalty rate to estimate royalty revenue. Such estimated royalty revenue was then added to the forecast of the Provider Companies' revenue, which was then discounted using an appropriate risk adjusted rate of return. The trademark is being amortized over the estimated five -year life of the asset on a straight-line basis. Non-compete agreements. The non-compete agreements provide the Company with a certain level of assurance that the Provider Companies' expected earnings stream will not be disrupted by competition from Provider Companies' previous members. The fair value of the non-compete agreements was determined using the differential valuation approach. Under this approach, the Company estimated the present value of expected future cash flows under two scenarios; one scenario assumes the non-compete agreements are in place and the other scenario assumes the absence of non-compete agreements. The resulting difference between the two scenarios is the implied value of the non-compete agreements, which was further adjusted by an estimated probability factor representing the likelihood that previous members of the Provider Companies would be successful competitors. Goodwill. The excess of the purchase consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed was recorded as goodwill. Goodwill arose on the acquisition of the Provider Companies primarily due the value of its assembled workforce, along with access to new utility service territories. Goodwill recorded in connection with the acquisition of the Provider Companies is deductible for income tax purposes because the Provider Companies was an acquisition of all of the assets of the Provider Companies. The valuation and purchase price allocation of the Provider Companies was based on a preliminary fair value analysis. The Company anticipates adjustments to the working capital amounts that are expected to be finalized prior to the measurement period's expiration. The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2016, respectively, included $19.6 million of revenue and $6.9 million of losses from operations related to the operations of the Provider Companies. We have not included pro forma information for the Provider Companies acquisition because it did not have a material impact on our financial position or results of operations. Acquisition of the Major Energy Companies On August 23, 2016, the Company and Spark HoldCo completed the transfer of all of the outstanding membership interests of the Major Energy Companies, which are retail energy companies operating in Connecticut, Illinois, Maryland (including the District of Columbia), Massachusetts, New Jersey, New York, Ohio, and Pennsylvania across 43 utilities, from NG&E in exchange for consideration of $63.2 million , which included $4.3 million in working capital, subject to adjustments; an assumed litigation reserve of $5.0 million , and up to $35.0 million in installment and earnout payments, valued at $13.1 million as of the purchase date, to be paid to the previous members of the Major Energy Companies, in annual installments on March 31, 2017, 2018 and 2019, subject to the achievement of certain performance targets (the “Major Earnout”). In addition, the Company is obligated to issue up to 200,000 shares of Class B common stock (and a corresponding number of Spark HoldCo units) to NG&E, subject to the achievement of certain performance targets, valued at $0.8 million ( 40,718 shares valued at $20 per share) as of the purchase date (the "Stock Earnout"). See Note 8 “Fair Value Measurements” for further discussion on the Major Earnout and Stock Earnout. The purchase price was funded by the issuance of 2,000,000 shares of Class B common stock (and a corresponding number of Spark HoldCo units) valued at $40.0 million based on a value of $20 per share, to NG&E. NG&E is owned by W. Keith Maxwell, III, our Chairman of the Board, founder and majority shareholder. The acquisition of the Major Energy Companies by the Company and Spark HoldCo from NG&E was a transfer of equity interests of entities under common control on August 23, 2016. Accordingly, the assets acquired and liabilities assumed were based on their historical values as of August 23, 2016. NG&E acquired the Major Energy Companies on April 15, 2016 and the fair value of the net assets acquired were as follows (in thousands): Cash $ 17,368 Property and equipment 14 Intangible assets - customer relationships & non-compete agreements 24,271 Other assets - trademarks 4,973 Non-current deferred tax assets 1,042 Goodwill 35,137 Net working capital, net of cash acquired (6,345 ) Fair value of derivative liabilities (7,260 ) Total $ 69,200 The initial working capital estimate paid to the Major Energy Companies by NG&E was $10.3 million . The Company subsequently paid $4.3 million in working capital to NG&E. Approximately $6.0 million was recorded as an equity transaction and treated as a contribution. Goodwill was transferred based on the acquisition of the Major Energy Companies by NG&E on April 15, 2016 and was primarily due to the Major Energy Companies brand strength, established vendor relationships and access to new utility service territories. Goodwill recorded in connection with the transfer of the Major Energy Companies is deductible for income tax purposes. The Major Energy Companies contributed revenues of $47.6 million and earnings of $5.2 million to the Company for the three month period ending September 30, 2016; and contributed revenues of $80.8 million and earnings of $5.6 million to the Company for the nine month period ending September 30, 2016. The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company as if the acquisition had occurred on January 1, 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue $158,094 $136,590 $434,997 $411,357 Earnings $2,878 $2,567 $17,071 $6,503 The pro forma results are not necessarily indicative of our consolidated results of operations in future periods or the results that actually would have been realized had the companies operated on a combined basis during the periods presented. The revenue and earnings for the three months ended September 30, 2016 reflects actual results of operations since the financial results were fully combined during that period. The pro forma results include adjustments primarily related to amortization of acquired intangibles, and certain accounting policy alignments as well as direct and incremental acquisition related costs reflected in the historical financial statements. The preliminary purchase price allocation was used to prepare the pro forma adjustments. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Equity | 4. 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 September 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 % From July 1, 2016 to July 14, 2016 46.23 % 53.77 % From July 15, 2016 to July 31, 2016 46.32 % 53.68 % From August 1, 2016 to August 17, 2016 44.12 % 55.88 % From August 18, 2016 to August 22, 2016 44.13 % 55.87 % From August 23, 2016 to September 22, 2016 38.85 % 61.15 % From September 23, 2016 to September 30, 2016 38.85 % 61.15 % (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 following table summarizes the portions of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income allocated to non-controlling interest $ 6,569 $ 5,011 $ 35,356 $ 19,058 Income tax expense (benefit) allocated to non-controlling interest (49 ) 450 517 99 Net income attributable to non-controlling interest $ 6,618 $ 4,561 $ 34,839 $ 18,959 Issuance of Class A Common Stock Upon Vesting of Restricted Stock Units The Company's economic interests in Spark HoldCo increased on May 4, 2015, December 31, 2015, May 4, 2016, May 18, 2016, May 25, 2016, July 15, 2016, August 18, 2016 and September 23, 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 July 15, 2016, 32,704 restricted stock units vested, with 23,030 shares of common stock distributed to the holders of these units and 9,674 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On August 18, 2016, 4,166 restricted stock units vested, with 3,019 shares of common stock distributed to the holders of these units and 1,147 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. On September 23, 2016, 580 restricted stock units vested, with 383 shares of common stock distributed to the holders of these units and 197 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. Issuance of Class B Common Stock On August 1, 2016, the Company issued 699,742 shares of Class B common stock to Retailco in connection with the acquisition of the Provider Companies. On August 23, 2016, the Company issued 2,000,000 shares of Class B common stock to Retailco in connection with the acquisition of Major Energy Companies. Conversion of Class B Common Stock to Class A Common Stock 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 10 "Taxes" for further discussion. 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 nine months ended September 30, 2016 and 2015 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income attributable to stockholders of Class A common stock $ 183 $ 1,314 $ 6,697 $ 3,884 Basic weighted average Class A common shares outstanding 6,491 3,097 5,434 3,053 Basic EPS attributable to stockholders $ 0.03 $ 0.42 $ 1.23 $ 1.27 Net income attributable to stockholders of Class A common stock $ 183 $ 1,314 $ 6,697 $ 3,884 Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect — 3,605 — 11,734 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 (467 ) (520 ) (358 ) (436 ) Diluted net income (loss) attributable to stockholders of Class A common stock (284 ) 4,399 6,339 15,182 Basic weighted average Class A common shares outstanding 6,491 3,097 5,434 3,053 Effect of dilutive Class B common stock — 10,750 — 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 505 351 505 118 Effect of dilutive restricted stock units 59 34 111 27 Diluted weighted average shares outstanding 7,055 14,232 6,050 13,948 Diluted EPS attributable to stockholders $ (0.04 ) $ 0.31 $ 1.05 $ 1.09 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 and nine months ended September 30, 2016 as the effect of the conversion was antidilutive. 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 September 30, 2016 (in thousands): September 30, 2016 Assets Current assets: Cash and cash equivalents $ 16,850 Accounts receivable 79,744 Other current assets 63,094 Total current assets 159,688 Non-current assets: Goodwill 79,556 Other assets 42,485 Total non-current assets 122,041 Total Assets $ 281,729 Liabilities Current liabilities: Accounts payable and accrued liabilities $ 78,511 Intercompany payable with Spark Energy, Inc. 5,555 Current portion of Senior Credit Facility 49,269 Contingent consideration 11,464 Other current liabilities 20,021 Total current liabilities 164,820 Long-term liabilities: Convertible subordinated notes to affiliates 6,542 Contingent consideration 7,472 Other long-term liabilities 1,467 Total long-term liabilities 15,481 Total Liabilities $ 180,301 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following amounts: Estimated September 30, 2016 December 31, 2015 (years) (In thousands) Information technology 2 – 5 $ 29,228 $ 27,392 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,012 1,007 Total 34,808 32,967 Accumulated depreciation (29,942 ) (28,491 ) Property and equipment—net $ 4,866 $ 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 September 30, 2016 and December 31, 2015 , information technology includes $0.8 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 $0.3 million for the three months ended September 30, 2016 and 2015 , respectively, and $1.4 million and $1.2 million for the nine months ended September 30, 2016 and 2015 , respectively. |
Goodwill, Customer Relationship
Goodwill, Customer Relationships and Trademarks | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Customer Relationships and Trademarks | 6. Goodwill, Customer Relationships and Trademarks Goodwill, customer relationships and trademarks consist of the following amounts (in thousands): September 30, 2016 December 31, 2015 Goodwill $ 79,556 $ 18,379 Customer relationships - Acquired (1) Cost $ 63,571 $ 14,883 Accumulated amortization (22,022 ) (4,503 ) Customer relationships - Acquired, net $ 41,549 $ 10,380 Customer relationships - Other (2) Cost $ 4,320 $ 4,320 Accumulated amortization (2,349 ) (1,271 ) Customer relationships - Other, net $ 1,971 $ 3,049 Trademarks (3) Cost $ 6,770 $ 1,268 Accumulated amortization (311 ) (74 ) Trademarks, net $ 6,459 $ 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, Oasis, the Major Energy Companies and the Provider Companies. 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 Additions 61,177 48,688 — 5,502 Amortization expense — (17,519 ) (1,078 ) (237 ) Balance at September 30, 2016 $ 79,556 $ 41,549 $ 1,971 $ 6,459 Approximately $9.4 million of the $17.5 million customer relationships amortization expense for the nine months ending September 30, 2016 is included in cost of revenues. Estimated future amortization expense for customer relationships and trademarks at September 30, 2016 is as follows (in thousands): Year ending December 31, 2016 $ 10,117 2017 12,913 2018 10,337 2019 5,892 2020 2,895 > 5 years 7,825 Total $ 49,979 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt consists of the following amounts (in thousands): September 30, 2016 December 31, 2015 Current portion of Senior Credit Facility—Working Capital Line (1) (2) $ 26,000 $ 22,500 Current portion of Senior Credit Facility—Acquisition Line (1) (2) 23,269 5,306 Current portion of Note Payable—Pacific Summit Energy 13,445 — Total current debt 62,714 27,806 Long-term portion of Senior Credit Facility—Acquisition Line (1) — 14,592 Convertible subordinated notes to affiliate (3) 6,542 6,339 Total long-term debt 6,542 20,931 Total debt $ 69,256 $ 48,737 (1) As of September 30, 2016 and December 31, 2015 , the Company had $33.0 million and $21.5 million in letters of credit issued, respectively. (2) As of September 30, 2016 and December 31, 2015 , the weighted average interest rate on the current portion of our Senior Credit Facility was 4.38% and 3.90% , respectively. (3) During the three and nine months ended September 30, 2016 , respectively, we paid in-kind $0.2 million and $ 0.4 million of interest, which was added to the outstanding balance of the convertible subordinated notes. Unamortized discount of $0.9 million and $0.7 million at September 30, 2016 and December 31, 2015 , respectively, is related to beneficial conversion features of the convertible subordinated notes. On October 5, 2016, RAC issued to the Company an irrevocable commitment to convert the CenStar Note and the Oasis Note into shares of Class B common stock on January 8, 2017 and January 31, 2017, respectively. See Note 14 "Subsequent Events." Deferred financing costs were $0.6 million and $0.7 million as of September 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 September 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 September 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Interest incurred on Senior Credit Facility $ 712 $ 351 $ 1,435 $ 670 Commitment fees 30 44 113 141 Letters of credit fees 165 124 457 223 Amortization of deferred financing costs 231 195 465 295 Interest incurred on convertible subordinated notes to affiliate (1) 132 86 385 86 Interest Expense $ 1,270 $ 800 $ 2,855 $ 1,415 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 nine months ended September 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, Oasis Power, LLC, Electricity Maine, LLC, Electricity N.H., LLC, and Provider Power Mass, 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 up to $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. On September 30, 2016, the Company and the Co-Borrowers elected to reduce the capacity of the Working Capital Line from $82.5 million to $60.0 million . 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 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. On August 1, 2016, the Company and the Co-Borrowers entered into Amendment No. 4 to the Senior Credit Facility to, among other things, amend the provisions under the Acquisition Line to allow for the Provider Companies acquisition. Amendment No. 4 also raises the minimum availability under the Working Capital Line to $40.0 million . In addition, Amendment No. 4 designates Major Energy Companies as "unrestricted subsidiaries" upon the closing of such acquisition on August 23, 2016. Refer to Note 3 "Acquisitions" for further discussion. 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 $40.0 million to $82.5 million . On September 30, 2016, the Company and the Co-Borrowers elected to reduce the capacity of the Working Capital Line from $82.5 million to $60.0 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 cash 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 up to a maximum of 1.25 ). 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. 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 RAC for $2.1 million on July 8, 2015. The CenStar Note matures on July 8, 2020, and bears interest at an annual rate of 5% , payable semiannually. The Company has the right to pay interest in kind at its option. The CenStar Note is convertible into shares of the Company’s Class B common stock, par value $0.01 per share (and a related unit of Spark HoldCo) at a conversion price of $16.57 per share. RAC may not exercise conversion rights for the first eighteen months after the CenStar Note is issued. The CenStar Note is subject to automatic conversion upon a sale of the Company. The CenStar Note is subordinated in certain respects to the Senior Credit Facility pursuant to a subordination agreement. The Company may pay interest and prepay principal so long as the Company is in compliance with its covenants; is not in default under the Senior Credit Facility and has minimum availability of $5.0 million under its borrowing base under the Senior Credit Facility. Shares of Class A common stock resulting from the conversion of the shares of Class B common stock issued as a result of the conversion right under the CenStar Note will be entitled to registration rights identical to the registration rights currently held by NuDevco Retail and Retailco on shares of Class A common stock it receives upon conversion of its existing shares of Class B common stock. On October 5, 2016, RAC issued to the Company an irrevocable commitment to convert the CenStar Note into 134,731 shares of Class B common stock (and related Spark HoldCo units) on January 8, 2017. Please see Note 14 "Subsequent Events." 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. The Oasis Note matures on July 31, 2020, and bears interest at an annual rate of 5% , payable semiannually. The Company has the right to pay-in-kind any interest at its option. The Oasis Note is convertible into shares of the Company's Class B common stock, par value $0.01 per share (and a related unit of Spark HoldCo) at a conversion price of $14.00 per share. RAC may not exercise conversion rights for the first eighteen months after the Oasis Note is issued. The Oasis Note is subject to automatic conversion upon a sale of the Company. The Oasis Note is subordinated in certain respects to the Senior Credit Facility pursuant to a subordination agreement. The Company may pay interest and prepay principal so long as the Company is in compliance with its covenants; is not in default under the Senior Credit Facility and has minimum availability of $5.0 million under its borrowing base under the Senior Credit Facility. Shares of Class A common stock resulting from the conversion of the shares of Class B common stock issued as a result of the conversion right under the Oasis Note will be entitled to registration rights identical to the registration rights currently held by NuDevco Retail and Retailco on shares of Class A common stock it receives upon conversion of its existing shares of Class B common stock. On October 5, 2016, RAC issued to the Company an irrevocable commitment to convert the Oasis Note into 383,090 shares of Class B common stock (and related Spark HoldCo units) on January 31, 2017. Please see Note 14 "Subsequent Events." The conversion rate of $14.00 per share for the Oasis Note was fixed as of the date of the execution of the Oasis acquisition agreement on May 12, 2015. Due to a rise in the price of our common stock from May 12, 2015 to the closing of Oasis acquisition on July 31, 2015, the conversion rate of $14.00 per share was below the market price per share of Class A common stock of $16.21 on the issuance date of the Oasis Note on July 31, 2015. As a result, the Company assessed the Oasis Note for a beneficial conversion feature. Due to this conversion feature being "in-the-money" upon issuance, we recognized a beneficial conversion feature based on its intrinsic value of $0.8 million as a discount to the Oasis Note and as additional paid-in capital. This discount will be amortized as interest expense under the effective interest method over the life of the Oasis Note. Pacific Summit Energy LLC The Major Energy Companies acquired by the Company are party to three trade credit arrangements with Pacific Summit Energy LLC (“Pacific Summit”), which consist of purchase agreements, operating agreements relating to purchasing terms, security agreements, lockbox agreements and guarantees, providing for the exclusive supply of gas and electricity on credit by Pacific Summit to the Major Energy Companies for resale to end users. Under these arrangements, when the costs that Pacific Summit has paid to procure and deliver the gas and electricity exceed the payments that the Major Energy Companies have made attributable to the gas and electricity purchased, the Major Energy Companies incur interest on the difference. The operating agreements also allow Pacific Summit to provide credit support. Each form of borrowing incurs interest at the floating 90-day LIBOR rate plus 300 basis points (except for certain credit support guaranties that do not bear interest). In connection with these arrangements, the Major Companies have granted first liens to Pacific Summit on a substantial portion of the Major Companies’ assets, including present and future accounts receivable, inventory, liquid assets, and control agreements relating to bank accounts. As of September 30, 2016, the Company had aggregate outstanding amounts payable under these arrangements of approximately $13.4 million , bearing an interest rate of approximately 3.9% . The Company was also the beneficiary under various credit support guarantees issued by Pacific Summit under these arrangements as of such date. On September 27, 2016, we notified Pacific Summit of our election to trigger the expiration of these arrangements as of March 31, 2017, at the end of the primary term. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. 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. The Level 3 category includes estimated earnout obligations related to the Company's acquisitions. 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 September 30, 2016 Non-trading commodity derivative assets $ — $ 915 $ — $ 915 Trading commodity derivative assets — 939 — 939 Total commodity derivative assets $ — $ 1,854 $ — $ 1,854 Non-trading commodity derivative liabilities $ (448 ) $ (14,448 ) $ — $ (14,896 ) Trading commodity derivative liabilities (58 ) (275 ) — (333 ) Total commodity derivative liabilities $ (506 ) $ (14,723 ) $ — $ (15,229 ) Contingent payment arrangement $ — $ — $ (18,935 ) $ (18,935 ) 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 nine months ended September 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 that is calculated based on the Company’s or the counterparty’s historical credit risks. As of September 30, 2016 and December 31, 2015 , the credit risk valuation adjustment was not material. The contingent payment arrangements referred to above reflect estimated earnout obligations incurred in relation to the Company's acquisitions. As of September 30, 2016 , the estimated earnout obligations were $18.9 million , which was comprised of the Provider Earnout, the Major Earnout and the Stock Earnout in the amount of $4.8 million , $13.3 million , and $0.8 million , respectively. As of December 31, 2015 , the estimated earnout obligations were attributed to the CenStar acquisition (the "CenStar Earnout") in the amount of $0.5 million , which was settled by September 30, 2016. As of September 30, 2016 , the estimated earnouts reside on our condensed consolidated balance sheets in current liabilities - contingent consideration and long-term liabilities - contingent consideration in the amount of $11.3 million and $7.6 million , respectively; and as of December 31, 2015 , in current liabilities - contingent consideration in the amount of $0.5 million . The CenStar Earnout was 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 was based on management's estimates of the liability, we classified the CenStar Earnout as a Level 3 measurement. During the first quarter of 2016, our estimate of the CenStar Earnout was increased to $1.5 million which was based on the results of operations during such period. In August 2016, we entered into a settlement and release agreement with the seller of CenStar in which the Company paid $1.3 million to such seller and released an additional $0.6 million from escrow in full satisfaction of the earnout obligation under the CenStar stock purchase agreement. During the three and nine months ended September 30, 2016 , the residual earnout amount of $0.2 million was written off via a reduction to general and administrative expense in our condensed consolidated statements of operations. The Provider Earnout is based on achievement by the Provider Companies of a certain customer count criteria over the nine month period following the closing of the Provider Companies acquisition. The sellers of the Provider Companies are entitled to a maximum of $9.0 million and a minimum of $5.0 million in earnout payments based on the level of customer count attained, as defined by the Provider Companies membership interest purchase agreement. In determining the fair value of the Provider Earnout, the Company forecasted an expected customer count and certain other related criteria and calculated the probability of such forecast being attained. As this calculation is based on management's estimates of the liability, we classified the Provider Earnout as a Level 3 measurement. The Major Earnout is based on the achievement by the Major Energy Companies of certain performance targets over the 33 month period following NG&E's closing of the Major Energy Companies acquisition (i.e., April 15, 2016). The previous members of Major Energy Companies are entitled to a maximum of $20.0 million in earnout payments based on the level of performance targets attained, as defined by the Major Purchase Agreement. The Stock Earnout obligation is contingent upon the Major Energy Companies achieving the Major Earnout's performance target ceiling, thereby earning the maximum Major Earnout payments. If the Major Energy Companies earn such maximum Major Earnout payments, NG&E would be entitled to a maximum of 200,000 shares of Class B common stock (and a corresponding number of Spark HoldCo units). In determining the fair value of the Major Earnout and the Stock Earnout, the Company forecasted certain expected performance targets and calculated the probability of such forecast being attained. As this calculation is based on management's estimates of the liability, we classified the Major Earnout as a Level 3 measurement. 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 | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Accounting for Derivative Instruments | 9. 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 September 30, 2016 and December 31, 2015 , the Company had $1.2 million 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 September 30, 2016 December 31, 2015 Natural Gas MMBtu 6,760 7,543 Natural Gas Basis MMBtu — 455 Electricity MWh 3,278 1,187 Trading Commodity Notional September 30, 2016 December 31, 2015 Natural Gas MMBtu (2,366 ) 8 Natural Gas Basis MMBtu 242 (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 September 30, 2016 2015 (Loss) gain on non-trading derivatives, net $ (1,183 ) $ 132 Gain (loss) on trading derivatives, net 574 (71 ) (Loss) gain on derivatives, net (609 ) 61 Current period settlements on non-trading derivatives (1) (2) (8,889 ) 4,035 Current period settlements on trading derivatives 20 128 Total current period settlements on derivatives $ (8,869 ) $ 4,163 (1) Excludes settlements of $0.5 million and $2.0 million , respectively, for the three months ended September 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. (2) Excludes settlements of $11.2 million for the three months ended September 30, 2016 related to non-trading derivative liabilities assumed in the acquisitions of the Provider Companies and Major Energy Companies. Nine Months Ended September 30, 2016 2015 Gain (loss) on non-trading derivatives, net $ 2,519 $ (5,876 ) Gain (loss) on trading derivatives, net 368 (242 ) Loss on derivatives, net 2,887 (6,118 ) Current period settlements on non-trading derivatives (1) (2) 3,341 12,643 Current period settlements on trading derivatives 86 244 Total current period settlements on derivatives $ 3,427 $ 12,887 (1) Excludes settlements of $0.6 million and $2.2 million , respectively, for the nine months ended September 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. (2) Excludes settlements of $14.7 million for the nine months ended September 30, 2016 related to non-trading derivative liabilities assumed in the acquisitions of the Provider Companies and Major Energy Companies. 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): September 30, 2016 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 1,909 $ (1,312 ) $ 597 $ — $ 597 Trading commodity derivatives 952 (13 ) 939 — 939 Total Current Derivative Assets 2,861 (1,325 ) 1,536 — 1,536 Non-trading commodity derivatives 411 (93 ) 318 — 318 Total Non-current Derivative Assets 411 (93 ) 318 — 318 Total Derivative Assets $ 3,272 $ (1,418 ) $ 1,854 $ — $ 1,854 September 30, 2016 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (24,955 ) $ 10,326 $ (14,629 ) $ 1,200 $ (13,429 ) Trading commodity derivatives (356 ) 23 (333 ) — (333 ) Total Current Derivative Liabilities (25,311 ) 10,349 (14,962 ) 1,200 (13,762 ) Non-trading commodity derivatives (4,532 ) 3,065 (1,467 ) — (1,467 ) Total Non-current Derivative Liabilities (4,532 ) 3,065 (1,467 ) — (1,467 ) Total Derivative Liabilities $ (29,843 ) $ 13,414 $ (16,429 ) $ 1,200 $ (15,229 ) 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 | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Taxes | 10. 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 nine months ended September 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 September 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 September 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 September 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 September 30, 2016 , the Company had a total liability of $50.6 million for the effect of the Tax Receivable Agreement liability classified as a long-term liability. The Company had a long-term deferred tax asset of approximately $20.0 million related to the Tax Receivable Agreement liability. See Note 12 “Transactions with Affiliates” for further discussion. The effective U.S. federal and state income tax rate for the nine months ended September 30, 2016 and 2015 is 14.2% and 6.5% , respectively, with respect to pre-tax income attributable to the Company's stockholders. The higher effective tax rate for the nine months ended September 30, 2016 is primarily attributable to the CenStar acquisition, discrete items and a decrease in the non-controlling interest. The discrete items were related to federal tax rate increase that is driven by the additional taxable income from the two acquistions, Provider Companies and Major Energy Companies. 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 nine months ended September 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 | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. 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 $1.6 million during the nine months ended September 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 September 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. Halifax-American Energy Company, LLC et al v. Provider Power, LLC, Electricity N.H., LLC, Electricity Maine, LLC, Emile Clavet and Kevin Dean is a lawsuit initially filed on June 12, 2014 in the Rockingham County Superior Court, State of New Hampshire, alleging various claims related to the Provider Companies’ employment of a sales contractor formerly employed with one or more of the plaintiffs, including misappropriation of trade secrets and tortious interference with a contractual relationship. The dispute occurred prior to the Company's acquisition of the Provider Companies. Portions of the original claim proceeded to trial and on January 19, 2016, a jury found in favor of the plaintiff. Damages totaling approximately $0.6 million and attorney’s fees totaling approximately $0.3 million were awarded to the plaintiff. On May 4, 2016, following post-verdict motions, the defendants filed an appeal in the State of New Hampshire Supreme Court, appealing, among other things the failure of the trial court to direct a verdict for the defendants, to set aside the verdict, or grant judgment for the defendants, and the trial court's award of certain attorneys' fees. On August 1, 2016, in connection with the Company’s closing of the acquisition of the Provider Companies, the Provider Companies entered into a joint defense agreement with the remaining defendants. The Provider Companies have posted an appeal bond of $1.0 million in connection with the appeal. On November 2, 2016, a briefing order was distributed by the court. The Provider Companies must have their appellate brief on file with the court no later than December 16, 2016. As of September 30, 2016, the Company has accrued approximately $1.0 million in contingent liabilities related to this litigation. The Company cannot predict the outcome of this case, however initial damages and attorney's fees have been factored into the purchase price for the Provider Companies and the Company has full indemnity coverage and set-off rights against future price installments for any actual exposure in the appeal. In May 2015, the Major Energy Companies settled with the Illinois Commerce Commission with respect to allegations of misleading marketing practices, for $0.3 million . The amount was formerly accounted for in the condensed combined balance sheet of the Major Energy Companies at December 31, 2015. In February 2016, the Major Energy Companies settled several claims with respect to allegations of misleading marketing practices with the Maryland Public Service Commission for $0.3 million . The $0.3 million is included in accrued expenses in the condensed combined balance sheet of the Major Energy Companies at December 31, 2015 and was paid in April 2016. Prospectively, the Commission requires the Major Energy Companies to report monthly to the Maryland Public Service Commission on number of customer complaints. The settlement of $0.3 million was paid from a reserve for litigation claims established in connection with the Company’s acquisition of the Major Energy Companies, which operates as a reduction to the total purchase price. In August 2016, the Major Energy Companies settled with the Pennsylvania Public Utility Commission/Bureau of Investigation and Enforcement with respect to allegations of misleading marketing practices, for $4.1 million . The settlement includes quarterly reporting on number of complaints, as well as allowing for only fixed-rate products to be sold. The settlement was paid in August 2016 after the acquisition of the Major Energy Companies. The amount of the settlement was paid from a reserve for litigation claims established in connection with the Company’s acquisition of the Major Energy Companies, which operates as a reduction to the total purchase price. |
Transactions with Affiliates
Transactions with Affiliates | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | 12. 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 nine months ended September 30, 2016 . Accounts Receivable and Payable — Affiliates The Company recorded current accounts receivable—affiliates of $2.8 million and $1.8 million as of September 30, 2016 and December 31, 2015 , respectively, and current accounts payable—affiliates of $2.6 million and $2.0 million as of September 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 less than $0.1 million and $0.2 million as of September 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. On October 5, 2016, RAC became irrevocably bound to convert the CenStar Note and the Oasis Note into shares of Class B common stock on January 8, 2017 and January 31, 2017, respectively. Refer to Note 7 "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 September 30, 2016 and 2015 related to this agreement were zero and $3.4 million , respectively. Cost of revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the nine months ended September 30, 2016 and 2015 related to this agreement were $1.6 million and $9.6 million , respectively. The Company also purchases natural gas at a nearby third-party plant inlet that 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 September 30, 2016 and 2015 related to these sales were zero and $0.3 million , respectively. Revenues—affiliates, recorded in net asset optimization revenues in the condensed consolidated statements of operations for the nine months ended September 30, 2016 and 2015 related to these sales were $0.2 million and $0.9 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 $3.2 million and $12.8 million , respectively, for the three and nine months ended September 30, 2016 . Of this total net amount, the Company recorded general and administrative expense of $2.9 million and $11.0 million for the three and nine months ended September 30, 2016 , respectively, in the condensed consolidated statement of operations in connection with fees paid, net of damages charged, under the Master Service Agreement with Retailco Services. Additionally under the Master Service Agreement, we capitalized $0.2 million and $1.3 million of property and equipment for the application, development and implementation of various systems during three and nine months ended September 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 $0.6 million and $2.3 million , respectively, for the three and nine months ended September 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 nine months ended September 30, 2016 and 2015 , the Company made distributions to NuDevco Retail and Retailco of $19.9 million (includes $10.1 million to Retailco and $9.8 million to NG&E) and $11.7 million in conjunction with the payment of its quarterly distributions attributable to its holding of Spark HoldCo units. During the nine months ended September 30, 2016 , the Company made distributions to NuDevco Retail and Retailco for gross-up distributions of $6.3 million in connection with distributions made between Spark HoldCo and Spark Energy, Inc. for payment of income taxes incurred by Spark Energy, Inc. Proceeds from Disgorgement of Stockholder Short-swing Profits During the three and nine months ended September 30, 2016 , the Company received $0.3 million and $0.9 million , respectively, 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. Class B Common Stock In connection with the Major Energy Companies acquisition, the Company issued Retailco 2,000,000 shares of Class B common stock (and a corresponding number of Spark HoldCo units) to NG&E. In connection with the financing of the Provider Companies acquisition, the Company sold 699,742 shares of Class B common stock (and a corresponding number of Spark HoldCo units) sold to RetailCo, valued at $14.0 million based on a value of $20 per share. See further discussion in Note 3. 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 10 “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 Retail or Retailco 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 is obligated to pay NuDevco Retail or Retailco 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 met the threshold coverage ratio required to fund the first TRA Payment to Retailco and NuDevco Retail under the Tax Receivable Agreement during the four-quarter period ending September 30, 2016, resulting in an initial TRA Payment of $1.4 million becoming due in December 2016. On November 6, 2016, Retailco and NuDevco Retail granted the Company the right to defer the TRA Payment until May 2018. During the period of time when the Company has elected to defer the TRA Payment, the outstanding payment amount will accrue interest at a rate calculated in the manner provided for under the Tax Receivable Agreement. The liability has been classified as non-current in our condensed consolidated balance sheet at September 30, 2016 . See also Note 14 "Subsequent Events." |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. 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 $26.0 million and $27.7 million and asset optimization cost of revenues of $25.9 million and $28.2 million for the three months ended September 30, 2016 and 2015 , respectively, which are presented on a net basis in asset optimization revenues. The Company recorded asset optimization revenues of $89.1 million and $120.7 million and asset optimization cost of revenues of $89.1 million and $119.4 million for the nine months ended September 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Reconciliation of Retail Gross Margin to Income before taxes Income before income tax expense $ 7,930 $ 6,455 $ 48,388 $ 24,442 Interest and other income (240 ) (5 ) (340 ) (326 ) Interest expense 1,270 800 2,855 1,415 Operating Income 8,960 7,250 50,903 25,531 Depreciation and amortization 8,295 7,557 23,337 17,873 General and administrative 18,009 15,493 55,188 43,909 Less: Net asset optimization (expenses) revenues 108 (545 ) (42 ) 1,317 Net, Gain (losses) on non-trading derivative instruments (1,183 ) 132 2,519 (5,876 ) Net, Cash settlements on non-trading derivative instruments (8,889 ) 4,035 3,341 12,643 Retail Gross Margin $ 45,228 $ 26,678 $ 123,610 $ 79,229 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 September 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total Revenues $ 144,243 $ 13,851 $ — $ — $ 158,094 Retail cost of revenues 113,600 9,230 — — 122,830 Less: Net asset optimization expenses — 108 — — 108 Gains on non-trading derivatives 68 (1,251 ) — — (1,183 ) Current period settlements on non-trading derivatives (8,614 ) (275 ) — — (8,889 ) Retail Gross Margin $ 39,189 $ 6,039 $ — $ — $ 45,228 Three Months Ended September 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 76,913 $ 14,354 $ — $ — $ 91,267 Retail cost of revenues 50,787 10,180 — — 60,967 Less: Net asset optimization expenses — (545 ) — — (545 ) Gains (losses) gains on non-trading derivatives 3,891 (3,759 ) — — 132 Current period settlements on non-trading derivatives 3,310 725 — — 4,035 Retail Gross Margin $ 18,925 $ 7,753 $ — $ — $ 26,678 Nine Months Ended September 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 293,571 $ 84,450 $ — $ — $ 378,021 Retail cost of revenues 209,617 38,976 — — 248,593 Less: Net asset optimization expenses — (42 ) — — (42 ) (Losses) gains on non-trading derivatives 997 1,522 — — 2,519 Current period settlements on non-trading derivatives 731 2,610 — — 3,341 Retail Gross Margin $ 82,226 $ 41,384 $ — $ — $ 123,610 Total Assets at September 30, 2016 $ 474,575 $ 185,145 $ 170,074 $ (492,063 ) $ 337,731 Goodwill at September 30, 2016 $ 77,271 $ 2,285 $ — $ — $ 79,556 Nine Months Ended September 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 170,060 $ 93,253 $ — $ — $ 263,313 Retail cost of revenues 122,864 53,136 — — 176,000 Less: Net asset optimization revenues — 1,317 — — 1,317 (Losses) gains on non-trading derivatives (2,201 ) (3,675 ) — — (5,876 ) Current period settlements on non-trading derivatives 5,727 6,916 — — 12,643 Retail Gross Margin $ 43,670 $ 35,559 $ — $ — $ 79,229 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 | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Conversion of CenStar and Oasis Notes On October 5, 2016, RAC issued to the Company an irrevocable commitment to convert the CenStar Note and the Oasis Note into 134,731 and 383,090 shares of Class B common stock (and related Spark HoldCo units), respectively, on January 8, 2017 and January 31, 2017, respectively. Declaration of Dividends On October 27, 2016 , the Company declared a quarterly dividend of $0.3625 to holders of record of our Class A common stock on December 1, 2016 and payable on December 14, 2016 . TRA Payment Deferral On November 6, 2016, Retailco and NuDevco Retail waived their right to receive an approximate $1.4 million payment for the Tax Receivable Agreement that was due from the Company on December 15, 2016. The Company has been given the right to defer this payment for up to eighteen months, subject to interest at the rate agreed to in the Tax Receivable Agreement. The liability has been classified as non-current as of September 30, 2016. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 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 that 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 | Presentation of the Acquisition of Oasis Power Holdings, LLC On May 12, 2015, RAC, an affiliate of the Company, 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 reflect operations of Oasis from May 12, 2015 to July 31, 2015. The unaudited condensed consolidated financial statements for this recast period had 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. Presentation of the Acquisition of Major Energy Companies On April 15, 2016, National Gas & Electric, LLC (“NG&E”), an affiliate of the Company , completed the acquisition of 100% of the membership interests of Major Energy Companies. On May 3, 2016, Spark HoldCo and Retailco entered into a Membership Interest Purchase Agreement (the "Major Purchase Agreement") with NG&E for the purchase of all of the membership interests of the Major Energy Companies. Spark HoldCo and Retailco completed the acquisition of the Major Energy Companies from NG&E on August 23, 2016. Because the acquisition of the Major Energy Companies was a transfer of equity interests of entities under common control, the Company's historical financial statements have been recast in this Form 10-Q to include the results attributable to Major Energy Companies from April 15, 2016. The unaudited condensed consolidated financial statements for this recast period have been prepared from Major Energy Companies' historical cost-basis and may not necessarily be indicative of the actual results of operations that would have occurred had the Company owned the Major Energy Companies 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. |
Reclassification | Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported earnings. |
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 are 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 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. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 provides guidance on the presentation and classification of eight specific cash flow issues in the statement of cash flows. Those issues are cash payment for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instrument or other debt instrument with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; cash proceeds from the settlement of insurance claims, cash received from settlement of corporate-owned life insurance policies; distribution received from equity method investees; beneficial interest in securitization transactions; and classification of cash receipts and payments that have aspects of more than one class of cash flows. The guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. This ASU should be applied using a retrospective transition method for each period presented. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 requires immediate recognition of the current and deferred income tax consequences of intercompany asset transfers other than inventory. Current U.S. GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2017, with early adoption permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. This ASU should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Accordingly, the assets acquired and liabilities assumed were based on their historical values as of August 23, 2016. NG&E acquired the Major Energy Companies on April 15, 2016 and the fair value of the net assets acquired were as follows (in thousands): Cash $ 17,368 Property and equipment 14 Intangible assets - customer relationships & non-compete agreements 24,271 Other assets - trademarks 4,973 Non-current deferred tax assets 1,042 Goodwill 35,137 Net working capital, net of cash acquired (6,345 ) Fair value of derivative liabilities (7,260 ) Total $ 69,200 The allocation of the purchase consideration is as follows (in thousands): Cash $ 51 Net working capital, net of cash acquired 1,229 Intangible assets - customer relationships and non-compete agreements 24,417 Intangible assets - trademark 529 Goodwill 26,040 Fair value of derivative liabilities (18,163 ) Total $ 34,103 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company as if the acquisition had occurred on January 1, 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenue $158,094 $136,590 $434,997 $411,357 Earnings $2,878 $2,567 $17,071 $6,503 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Ownership Interests Percentage | From January 1, 2015 through September 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 % From July 1, 2016 to July 14, 2016 46.23 % 53.77 % From July 15, 2016 to July 31, 2016 46.32 % 53.68 % From August 1, 2016 to August 17, 2016 44.12 % 55.88 % From August 18, 2016 to August 22, 2016 44.13 % 55.87 % From August 23, 2016 to September 22, 2016 38.85 % 61.15 % From September 23, 2016 to September 30, 2016 38.85 % 61.15 % (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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income allocated to non-controlling interest $ 6,569 $ 5,011 $ 35,356 $ 19,058 Income tax expense (benefit) allocated to non-controlling interest (49 ) 450 517 99 Net income attributable to non-controlling interest $ 6,618 $ 4,561 $ 34,839 $ 18,959 |
Earnings Per Share | The following table presents the computation of earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income attributable to stockholders of Class A common stock $ 183 $ 1,314 $ 6,697 $ 3,884 Basic weighted average Class A common shares outstanding 6,491 3,097 5,434 3,053 Basic EPS attributable to stockholders $ 0.03 $ 0.42 $ 1.23 $ 1.27 Net income attributable to stockholders of Class A common stock $ 183 $ 1,314 $ 6,697 $ 3,884 Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect — 3,605 — 11,734 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 (467 ) (520 ) (358 ) (436 ) Diluted net income (loss) attributable to stockholders of Class A common stock (284 ) 4,399 6,339 15,182 Basic weighted average Class A common shares outstanding 6,491 3,097 5,434 3,053 Effect of dilutive Class B common stock — 10,750 — 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 505 351 505 118 Effect of dilutive restricted stock units 59 34 111 27 Diluted weighted average shares outstanding 7,055 14,232 6,050 13,948 Diluted EPS attributable to stockholders $ (0.04 ) $ 0.31 $ 1.05 $ 1.09 |
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 September 30, 2016 (in thousands): September 30, 2016 Assets Current assets: Cash and cash equivalents $ 16,850 Accounts receivable 79,744 Other current assets 63,094 Total current assets 159,688 Non-current assets: Goodwill 79,556 Other assets 42,485 Total non-current assets 122,041 Total Assets $ 281,729 Liabilities Current liabilities: Accounts payable and accrued liabilities $ 78,511 Intercompany payable with Spark Energy, Inc. 5,555 Current portion of Senior Credit Facility 49,269 Contingent consideration 11,464 Other current liabilities 20,021 Total current liabilities 164,820 Long-term liabilities: Convertible subordinated notes to affiliates 6,542 Contingent consideration 7,472 Other long-term liabilities 1,467 Total long-term liabilities 15,481 Total Liabilities $ 180,301 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following amounts: Estimated September 30, 2016 December 31, 2015 (years) (In thousands) Information technology 2 – 5 $ 29,228 $ 27,392 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,012 1,007 Total 34,808 32,967 Accumulated depreciation (29,942 ) (28,491 ) Property and equipment—net $ 4,866 $ 4,476 |
Goodwill, Customer Relationsh26
Goodwill, Customer Relationships and Trademarks (Tables) | 9 Months Ended |
Sep. 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): September 30, 2016 December 31, 2015 Goodwill $ 79,556 $ 18,379 Customer relationships - Acquired (1) Cost $ 63,571 $ 14,883 Accumulated amortization (22,022 ) (4,503 ) Customer relationships - Acquired, net $ 41,549 $ 10,380 Customer relationships - Other (2) Cost $ 4,320 $ 4,320 Accumulated amortization (2,349 ) (1,271 ) Customer relationships - Other, net $ 1,971 $ 3,049 Trademarks (3) Cost $ 6,770 $ 1,268 Accumulated amortization (311 ) (74 ) Trademarks, net $ 6,459 $ 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, Oasis, the Major Energy Companies and the Provider Companies. 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 Additions 61,177 48,688 — 5,502 Amortization expense — (17,519 ) (1,078 ) (237 ) Balance at September 30, 2016 $ 79,556 $ 41,549 $ 1,971 $ 6,459 |
Estimated Future Amortization Expense of Intangible Assets | Estimated future amortization expense for customer relationships and trademarks at September 30, 2016 is as follows (in thousands): Year ending December 31, 2016 $ 10,117 2017 12,913 2018 10,337 2019 5,892 2020 2,895 > 5 years 7,825 Total $ 49,979 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following amounts (in thousands): September 30, 2016 December 31, 2015 Current portion of Senior Credit Facility—Working Capital Line (1) (2) $ 26,000 $ 22,500 Current portion of Senior Credit Facility—Acquisition Line (1) (2) 23,269 5,306 Current portion of Note Payable—Pacific Summit Energy 13,445 — Total current debt 62,714 27,806 Long-term portion of Senior Credit Facility—Acquisition Line (1) — 14,592 Convertible subordinated notes to affiliate (3) 6,542 6,339 Total long-term debt 6,542 20,931 Total debt $ 69,256 $ 48,737 (1) As of September 30, 2016 and December 31, 2015 , the Company had $33.0 million and $21.5 million in letters of credit issued, respectively. (2) As of September 30, 2016 and December 31, 2015 , the weighted average interest rate on the current portion of our Senior Credit Facility was 4.38% and 3.90% , respectively. (3) During the three and nine months ended September 30, 2016 , respectively, we paid in-kind $0.2 million and $ 0.4 million of interest, which was added to the outstanding balance of the convertible subordinated notes. Unamortized discount of $0.9 million and $0.7 million at September 30, 2016 and December 31, 2015 , respectively, is related to beneficial conversion features of the convertible subordinated notes. On October 5, 2016, RAC issued to the Company an irrevocable commitment to convert the CenStar Note and the Oasis Note into shares of Class B common stock on January 8, 2017 and January 31, 2017, respectively. See Note 14 "Subsequent Events." |
Components of Interest Expense | Interest expense consists of the following components for the periods indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Interest incurred on Senior Credit Facility $ 712 $ 351 $ 1,435 $ 670 Commitment fees 30 44 113 141 Letters of credit fees 165 124 457 223 Amortization of deferred financing costs 231 195 465 295 Interest incurred on convertible subordinated notes to affiliate (1) 132 86 385 86 Interest Expense $ 1,270 $ 800 $ 2,855 $ 1,415 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 nine months ended September 30, 2016 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 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 September 30, 2016 Non-trading commodity derivative assets $ — $ 915 $ — $ 915 Trading commodity derivative assets — 939 — 939 Total commodity derivative assets $ — $ 1,854 $ — $ 1,854 Non-trading commodity derivative liabilities $ (448 ) $ (14,448 ) $ — $ (14,896 ) Trading commodity derivative liabilities (58 ) (275 ) — (333 ) Total commodity derivative liabilities $ (506 ) $ (14,723 ) $ — $ (15,229 ) Contingent payment arrangement $ — $ — $ (18,935 ) $ (18,935 ) 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 Ins29
Accounting for Derivative Instruments (Tables) | 9 Months Ended |
Sep. 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 September 30, 2016 December 31, 2015 Natural Gas MMBtu 6,760 7,543 Natural Gas Basis MMBtu — 455 Electricity MWh 3,278 1,187 Trading Commodity Notional September 30, 2016 December 31, 2015 Natural Gas MMBtu (2,366 ) 8 Natural Gas Basis MMBtu 242 (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 September 30, 2016 2015 (Loss) gain on non-trading derivatives, net $ (1,183 ) $ 132 Gain (loss) on trading derivatives, net 574 (71 ) (Loss) gain on derivatives, net (609 ) 61 Current period settlements on non-trading derivatives (1) (2) (8,889 ) 4,035 Current period settlements on trading derivatives 20 128 Total current period settlements on derivatives $ (8,869 ) $ 4,163 (1) Excludes settlements of $0.5 million and $2.0 million , respectively, for the three months ended September 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. (2) Excludes settlements of $11.2 million for the three months ended September 30, 2016 related to non-trading derivative liabilities assumed in the acquisitions of the Provider Companies and Major Energy Companies. Nine Months Ended September 30, 2016 2015 Gain (loss) on non-trading derivatives, net $ 2,519 $ (5,876 ) Gain (loss) on trading derivatives, net 368 (242 ) Loss on derivatives, net 2,887 (6,118 ) Current period settlements on non-trading derivatives (1) (2) 3,341 12,643 Current period settlements on trading derivatives 86 244 Total current period settlements on derivatives $ 3,427 $ 12,887 (1) Excludes settlements of $0.6 million and $2.2 million , respectively, for the nine months ended September 30, 2016 and 2015 related to non-trading derivative liabilities assumed in the acquisitions of CenStar and Oasis. (2) Excludes settlements of $14.7 million for the nine months ended September 30, 2016 related to non-trading derivative liabilities assumed in the acquisitions of the Provider Companies and Major Energy Companies. |
Offsetting Assets | 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): September 30, 2016 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 1,909 $ (1,312 ) $ 597 $ — $ 597 Trading commodity derivatives 952 (13 ) 939 — 939 Total Current Derivative Assets 2,861 (1,325 ) 1,536 — 1,536 Non-trading commodity derivatives 411 (93 ) 318 — 318 Total Non-current Derivative Assets 411 (93 ) 318 — 318 Total Derivative Assets $ 3,272 $ (1,418 ) $ 1,854 $ — $ 1,854 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 |
Offsetting Liabilities | September 30, 2016 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (24,955 ) $ 10,326 $ (14,629 ) $ 1,200 $ (13,429 ) Trading commodity derivatives (356 ) 23 (333 ) — (333 ) Total Current Derivative Liabilities (25,311 ) 10,349 (14,962 ) 1,200 (13,762 ) Non-trading commodity derivatives (4,532 ) 3,065 (1,467 ) — (1,467 ) Total Non-current Derivative Liabilities (4,532 ) 3,065 (1,467 ) — (1,467 ) Total Derivative Liabilities $ (29,843 ) $ 13,414 $ (16,429 ) $ 1,200 $ (15,229 ) 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 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Reconciliation of Retail Gross Margin to Income before taxes Income before income tax expense $ 7,930 $ 6,455 $ 48,388 $ 24,442 Interest and other income (240 ) (5 ) (340 ) (326 ) Interest expense 1,270 800 2,855 1,415 Operating Income 8,960 7,250 50,903 25,531 Depreciation and amortization 8,295 7,557 23,337 17,873 General and administrative 18,009 15,493 55,188 43,909 Less: Net asset optimization (expenses) revenues 108 (545 ) (42 ) 1,317 Net, Gain (losses) on non-trading derivative instruments (1,183 ) 132 2,519 (5,876 ) Net, Cash settlements on non-trading derivative instruments (8,889 ) 4,035 3,341 12,643 Retail Gross Margin $ 45,228 $ 26,678 $ 123,610 $ 79,229 |
Schedule of Segment Reporting Information, by Segment | Financial data for business segments are as follows (in thousands): Three Months Ended September 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total Revenues $ 144,243 $ 13,851 $ — $ — $ 158,094 Retail cost of revenues 113,600 9,230 — — 122,830 Less: Net asset optimization expenses — 108 — — 108 Gains on non-trading derivatives 68 (1,251 ) — — (1,183 ) Current period settlements on non-trading derivatives (8,614 ) (275 ) — — (8,889 ) Retail Gross Margin $ 39,189 $ 6,039 $ — $ — $ 45,228 Three Months Ended September 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 76,913 $ 14,354 $ — $ — $ 91,267 Retail cost of revenues 50,787 10,180 — — 60,967 Less: Net asset optimization expenses — (545 ) — — (545 ) Gains (losses) gains on non-trading derivatives 3,891 (3,759 ) — — 132 Current period settlements on non-trading derivatives 3,310 725 — — 4,035 Retail Gross Margin $ 18,925 $ 7,753 $ — $ — $ 26,678 Nine Months Ended September 30, 2016 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 293,571 $ 84,450 $ — $ — $ 378,021 Retail cost of revenues 209,617 38,976 — — 248,593 Less: Net asset optimization expenses — (42 ) — — (42 ) (Losses) gains on non-trading derivatives 997 1,522 — — 2,519 Current period settlements on non-trading derivatives 731 2,610 — — 3,341 Retail Gross Margin $ 82,226 $ 41,384 $ — $ — $ 123,610 Total Assets at September 30, 2016 $ 474,575 $ 185,145 $ 170,074 $ (492,063 ) $ 337,731 Goodwill at September 30, 2016 $ 77,271 $ 2,285 $ — $ — $ 79,556 Nine Months Ended September 30, 2015 Retail Retail Corporate Eliminations Spark Retail Total revenues $ 170,060 $ 93,253 $ — $ — $ 263,313 Retail cost of revenues 122,864 53,136 — — 176,000 Less: Net asset optimization revenues — 1,317 — — 1,317 (Losses) gains on non-trading derivatives (2,201 ) (3,675 ) — — (5,876 ) Current period settlements on non-trading derivatives 5,727 6,916 — — 12,643 Retail Gross Margin $ 43,670 $ 35,559 $ — $ — $ 79,229 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) | Jun. 08, 2016 | Apr. 01, 2016 | Feb. 03, 2016 | Sep. 30, 2016vote_per_share$ / shares | Dec. 31, 2015$ / shares | Jul. 31, 2015$ / shares | Jul. 08, 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 | ||||||
Conversion of stock exchange ratio | 1,000 | 1,000 | 1 | ||||||
Common Class B | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common stock voting rights | vote_per_share | 1 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Apr. 15, 2016 | May 12, 2015 |
Oasis | ||
Business Acquisition [Line Items] | ||
Percentage of membership interests acquired | 100.00% | |
Major Energy Companies | ||
Business Acquisition [Line Items] | ||
Percentage of membership interests acquired | 100.00% |
Acquisitions (Details)
Acquisitions (Details) $ / shares in Units, $ in Thousands | Aug. 01, 2016USD ($)payment$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | [2] | Aug. 23, 2016$ / shares | ||
Business Acquisition [Line Items] | ||||||||
Contingent consideration - earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions | $ 18,936 | [1] | $ 0 | |||||
Installment consideration payment | 3,023 | [1] | 0 | |||||
Common Class B | ||||||||
Business Acquisition [Line Items] | ||||||||
Value of shares issued | $ 40,000 | [1] | 40,000 | [1] | $ 0 | |||
Share price (in dollars per share) | $ / shares | $ 20 | $ 20 | ||||||
Provider Companies | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 34,100 | |||||||
Initial working capital estimate | 1,300 | |||||||
Earnout maximum | 9,000 | 9,000 | $ 9,000 | |||||
Contingent consideration - earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions | 4,800 | |||||||
Installment consideration payment | $ 3,800 | |||||||
Number of monthly payments | payment | 10 | |||||||
Installment payment | $ 400 | |||||||
Revenue | 19,600 | |||||||
Earnings (loss) from operations | $ (6,900) | |||||||
Provider Companies | Common Class B | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued (shares) | shares | 699,742 | |||||||
Value of shares issued | $ 14,000 | |||||||
Revolving Credit Facility | Acquisition Line | Provider Companies | ||||||||
Business Acquisition [Line Items] | ||||||||
Borrowing from credit facility | $ 10,600 | |||||||
Trademarks | Provider Companies | ||||||||
Business Acquisition [Line Items] | ||||||||
Estimated useful life (in years) | 5 years | |||||||
[1] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||
[2] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. |
Acquisitions Purchase Price All
Acquisitions Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Aug. 01, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 79,556 | $ 18,379 | |
Provider Companies | |||
Business Acquisition [Line Items] | |||
Cash | $ 51 | ||
Net working capital, net of cash acquired | 1,229 | ||
Goodwill | 26,040 | ||
Fair value of derivative liabilities | (18,163) | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 34,103 | ||
Customer Relationships and Non-compete Agreements | Provider Companies | |||
Business Acquisition [Line Items] | |||
Other assets - trademarks | 24,417 | ||
Trademarks | Provider Companies | |||
Business Acquisition [Line Items] | |||
Other assets - trademarks | $ 529 |
Acquisitions - Acquisition of M
Acquisitions - Acquisition of Major Energy Companies - Narrative (Details) $ / shares in Units, $ in Thousands | Aug. 23, 2016USD ($)utility$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Aug. 01, 2016$ / shares | |
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Amount recorded as equity transaction | $ (6,040) | [1] | $ 0 | |||
Major Energy Companies | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Number of utilities | utility | 43 | |||||
Consideration amount | $ 63,200 | |||||
Working capital | 4,300 | |||||
Litigation reserve | 5,000 | |||||
Installment and earnout payments (up to) | 35,000 | |||||
Installment and earnout payments purchase date value | 13,100 | |||||
Amount recorded as equity transaction | (6,000) | |||||
Contributed revenues | $ 47,600 | 80,800 | ||||
Contributed earnings | $ 5,200 | $ 5,600 | ||||
Major Energy Companies | Major Energy Companies | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Working capital | $ 4,300 | |||||
Common Class B | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Share price (in dollars per share) | $ / shares | $ 20 | $ 20 | ||||
Common Class B | Major Energy Companies | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Share earnout maximum (in shares) | shares | 40,718 | |||||
Value of shares for earnout | $ 800 | |||||
Number of shares issued for acquisition (shares) | shares | 2,000,000 | |||||
Value of shares issued for acquisition | $ 40,000 | |||||
Maximum | Common Class B | Major Energy Companies | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Share earnout maximum (in shares) | shares | 200,000 | |||||
National Gas & Electric, LLC | Major Energy Companies | ||||||
Combination of Entities under Common Control, by Combination [Line Items] | ||||||
Initial working capital estimate | $ 10,300 | |||||
[1] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. |
Acquisitions - Acquisition of36
Acquisitions - Acquisition of Major Energy Companies (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Apr. 15, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 79,556 | $ 18,379 | |
National Gas & Electric, LLC | Major Energy Companies | |||
Business Acquisition [Line Items] | |||
Cash | $ 17,368 | ||
Property and equipment | 14 | ||
Intangible assets - customer relationships & non-compete agreements | 24,271 | ||
Other assets - trademarks | 4,973 | ||
Non-current deferred tax assets | 1,042 | ||
Goodwill | 35,137 | ||
Net working capital, net of cash acquired | (6,345) | ||
Fair value of derivative liabilities | 7,260 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 69,200 |
Acquisitions Pro Forma Informat
Acquisitions Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combinations [Abstract] | ||||
Revenue | $ 158,094 | $ 136,590 | $ 434,997 | $ 411,357 |
Earnings | $ 2,878 | $ 2,567 | $ 17,071 | $ 6,503 |
Equity - Non-controlling Intere
Equity - Non-controlling Interest (Details) - The Company | Sep. 30, 2016 | Aug. 22, 2016 | Jul. 14, 2016 | Jun. 07, 2016 | May 24, 2016 | May 17, 2016 | Sep. 22, 2016 | Aug. 17, 2016 | Jul. 31, 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 | 38.85% | 44.13% | 46.23% | 42.66% | 42.64% | 42.46% | 38.85% | 44.12% | 46.32% | 46.23% | 42.14% | 22.49% | 29.70% | 21.82% | 22.37% |
NuDevco Retail and Retailco | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Economic interests percentage | 61.15% | 55.87% | 53.77% | 57.34% | 57.36% | 57.54% | 61.15% | 55.88% | 53.68% | 53.77% | 57.86% | 77.51% | 70.30% | 78.18% | 77.63% |
Equity - Narrative (Details)
Equity - Narrative (Details) | Sep. 23, 2016shares | Aug. 23, 2016shares | Aug. 18, 2016shares | Aug. 01, 2016shares | Jul. 15, 2016shares | Jun. 08, 2016shares | May 25, 2016shares | May 18, 2016shares | May 04, 2016shares | Apr. 01, 2016shares | Feb. 03, 2016shares | Dec. 31, 2015shares | May 04, 2015shares | Sep. 30, 2016 |
Class of Stock [Line Items] | ||||||||||||||
Number of shares of common stock exchanged | 500,000 | 1,725,000 | 1,000,000 | |||||||||||
Conversion of stock exchange ratio | 1 | |||||||||||||
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 | 383 | 3,019 | 23,030 | 5,000 | 43,683 | 77,814 | 21,430 | 97,193 | ||||||
Restricted Stock Units | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares vested | 580 | 4,166 | 32,704 | 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 | 197 | 1,147 | 9,674 | 10,170 | 23,396 | 8,070 | 21,436 | |||||||
Provider Companies | Common Class B | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares issued for acquisition (shares) | 699,742 | |||||||||||||
Major Energy Purchase Agreement | Common Class B | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares issued for acquisition (shares) | 2,000,000 |
Equity - Net Income and Income
Equity - Net Income and Income Tax on Non-controlling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |||||
Equity [Abstract] | ||||||||
Net income allocated to non-controlling interest | $ 6,569 | $ 5,011 | $ 35,356 | $ 19,058 | ||||
Income tax expense (benefit) allocated to non-controlling interest | (49) | 450 | 517 | 99 | ||||
Net income attributable to non-controlling interest | $ 6,618 | [1] | $ 4,561 | [2] | $ 34,839 | [1] | $ 18,959 | [2] |
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||
[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 Notes 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 | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |||||
Equity [Abstract] | ||||||||
Net income attributable to stockholders of Class A common stock | $ 183 | [1] | $ 1,314 | [2] | $ 6,697 | [1] | $ 3,884 | [2] |
Basic weighted average Class A common shares outstanding | 6,491 | [1] | 3,097 | [2] | 5,434 | [1] | 3,053 | [2] |
Basic EPS attributable to shareholders (in dollars per share) | $ 0.03 | [1] | $ 0.42 | [2] | $ 1.23 | [1] | $ 1.27 | [2] |
Net income attributable to stockholders of Class A common stock | $ 183 | [1] | $ 1,314 | [2] | $ 6,697 | [1] | $ 3,884 | [2] |
Effect of conversion of Class B common stock to shares of Class A common stock, net of tax effect | 0 | 3,605 | 0 | 11,734 | ||||
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 | (467) | (520) | (358) | (436) | ||||
Diluted net income (loss) attributable to stockholders of Class A common stock | $ (284) | $ 4,399 | $ 6,339 | $ 15,182 | ||||
Basic weighted average Class A common shares outstanding | 6,491 | [1] | 3,097 | [2] | 5,434 | [1] | 3,053 | [2] |
Effect of dilutive Class B common stock (in shares) | 0 | 10,750 | 0 | 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 | 505 | 351 | 505 | 118 | ||||
Effect of dilutive restricted stock units (in shares) | 59 | 34 | 111 | 27 | ||||
Diluted weighted average shares outstanding | 7,055 | [1] | 14,232 | [2] | 6,050 | [1] | 13,948 | [2] |
Diluted EPS attributable to shareholders (in dollars per share) | $ (0.04) | [1] | $ 0.31 | [2] | $ 1.05 | [1] | $ 1.09 | [2] |
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||
[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 Notes 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 | Sep. 30, 2016USD ($) |
Variable Interest Entity [Line Items] | |
Total Assets | $ 281,729 |
Total Liabilities | 180,301 |
Total current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 159,688 |
Cash and cash equivalents | |
Variable Interest Entity [Line Items] | |
Total Assets | 16,850 |
Accounts receivable | |
Variable Interest Entity [Line Items] | |
Total Assets | 79,744 |
Other current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 63,094 |
Total non-current assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 122,041 |
Goodwill | |
Variable Interest Entity [Line Items] | |
Total Assets | 79,556 |
Other assets | |
Variable Interest Entity [Line Items] | |
Total Assets | 42,485 |
Total current liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 164,820 |
Accounts payable and accrued liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 78,511 |
Intercompany payable with Spark Energy, Inc. | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 5,555 |
Current portion of Senior Credit Facility | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 49,269 |
Contingent consideration | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 11,464 |
Other current liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 20,021 |
Total long-term liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 15,481 |
Convertible subordinated notes to affiliates | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 6,542 |
Contingent consideration | |
Variable Interest Entity [Line Items] | |
Total Liabilities | 7,472 |
Other long-term liabilities | |
Variable Interest Entity [Line Items] | |
Total Liabilities | $ 1,467 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 34,808 | $ 32,967 |
Accumulated depreciation | (29,942) | (28,491) |
Property and equipment—net | 4,866 | 4,476 |
Information technology | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 29,228 | 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 | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 0.5 | $ 0.3 | $ 1.4 | $ 1.2 | |
Information technology | |||||
Property, Plant and Equipment [Line Items] | |||||
Assets not yet placed into service | $ 0.8 | $ 0.8 | $ 0.5 |
Goodwill, Customer Relationsh45
Goodwill, Customer Relationships and Trademarks - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 79,556 | $ 18,379 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | 49,979 | |
Customer Relationships - Acquired | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 63,571 | 14,883 |
Accumulated amortization | (22,022) | (4,503) |
Total | 41,549 | 10,380 |
Customer Relationships - Others | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,320 | 4,320 |
Accumulated amortization | (2,349) | (1,271) |
Total | 1,971 | 3,049 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 6,770 | 1,268 |
Accumulated amortization | (311) | (74) |
Total | $ 6,459 | $ 1,194 |
Goodwill, Customer Relationsh46
Goodwill, Customer Relationships and Trademarks - Roll Forward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 18,379 |
Additions | 61,177 |
Balance at end of period | 79,556 |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at end of period | 49,979 |
Customer Relationships - Acquired | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at beginning of period | 10,380 |
Additions | 48,688 |
Amortization expense | (17,519) |
Balance at end of period | 41,549 |
Customer Relationships - Others | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at beginning of period | 3,049 |
Amortization expense | (1,078) |
Balance at end of period | 1,971 |
Trademarks | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at beginning of period | 1,194 |
Additions | 5,502 |
Amortization expense | (237) |
Balance at end of period | 6,459 |
Cost of Revenue | Customer Relationships - Acquired | |
Finite-lived Intangible Assets [Roll Forward] | |
Amortization expense | $ (9,400) |
Goodwill, Customer Relationsh47
Goodwill, Customer Relationships and Trademarks - Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Year ending December 31, | |
2,016 | $ 10,117 |
2,017 | 12,913 |
2,018 | 10,337 |
2,019 | 5,892 |
2,020 | 2,895 |
More than 5 years | 7,825 |
Total | $ 49,979 |
Debt - Components of Debt (Deta
Debt - Components of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Total current debt | $ 62,714 | $ 62,714 | $ 27,806 |
Total long-term debt | 6,542 | 6,542 | 20,931 |
Total debt | 69,256 | 69,256 | 48,737 |
Trade Credit Arrangements With Pacific Summit Energy LLC | |||
Debt Instrument [Line Items] | |||
Total current debt | 13,445 | 13,445 | 0 |
Senior Credit Facility | |||
Debt Instrument [Line Items] | |||
Letters of credit issued | 33,000 | $ 33,000 | $ 21,500 |
Weighted average interest rate on current portion of debt | 4.38% | 3.90% | |
Senior Credit Facility | Acquisition Line | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 0 | $ 0 | $ 14,592 |
Convertible Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 6,542 | 6,542 | 6,339 |
Paid in-kind interest | 200 | 400 | |
Convertible Subordinated Notes | Oasis Note | |||
Debt Instrument [Line Items] | |||
Unamortized discount | 900 | 900 | 700 |
Senior Credit Facility | Working Capital Line | |||
Debt Instrument [Line Items] | |||
Total current debt | 26,000 | 26,000 | 22,500 |
Senior Credit Facility | Acquisition Line | |||
Debt Instrument [Line Items] | |||
Total current debt | $ 23,269 | $ 23,269 | $ 5,306 |
Debt - Debt Components Narrativ
Debt - Debt Components Narrative (Details) - USD ($) | Sep. 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 | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |||||
Line of Credit Facility [Line Items] | ||||||||
Amortization of deferred financing costs | $ 231 | $ 195 | $ 465 | $ 295 | ||||
Interest Expense | 1,270 | [1] | 800 | [2] | 2,855 | [1] | 1,415 | [2] |
Convertible Subordinated Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest incurred on convertible subordinated notes to affiliate | 132 | 86 | 385 | 86 | ||||
Amortization of discount | 100 | 100 | ||||||
Working Capital Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fees | 30 | 44 | 113 | 141 | ||||
Letters of credit fees | 165 | 124 | 457 | 223 | ||||
Working Capital Facility | Senior Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest incurred on Senior Credit Facility | $ 712 | $ 351 | $ 1,435 | $ 670 | ||||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||
[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 Notes 2 "Basis of Presentation" for further discussion. |
Debt - Senior Credit Facility (
Debt - Senior Credit Facility (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 29, 2016 | Aug. 01, 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 | ||||
Quarterly increases to the numerator | 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 | ||||
Senior Secured Revolving Credit Facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Fixed charge coverage ratio | 125.00% | ||||
Senior Secured Revolving Credit Facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Fixed charge coverage ratio | 110.00% | ||||
Revolving Credit Facility | Working Capital Line | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 60,000,000 | $ 82,500,000 | $ 82,500,000 | $ 60,000,000 | |
Required minimum availability | $ 40,000,000 | ||||
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 | $ 40,000,000 | ||||
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% |
Debt - Convertible Subordinated
Debt - Convertible Subordinated Notes to Affiliate (Details) - USD ($) | Jan. 31, 2017 | Jan. 08, 2017 | Jul. 31, 2015 | Jul. 08, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | May 12, 2015 | May 29, 2014 | Apr. 22, 2014 |
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 14 | ||||||||
Convertible Debt | Censtar Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.00% | ||||||||
Period in which conversion rights may not be exercised (in months) | 18 months | ||||||||
Convertible Debt | Senior Secured Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Required minimum availability | $ 5,000,000 | $ 5,000,000 | |||||||
Convertible Debt | Oasis Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 5.00% | ||||||||
Conversion price (in dollars per share) | $ 14 | ||||||||
Period in which conversion rights may not be exercised (in months) | 18 months | ||||||||
Intrinsic value | $ 800,000 | ||||||||
CenStar | Convertible Debt | Censtar Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | $ 2,100,000 | ||||||||
Oasis | Convertible Debt | Oasis Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | $ 5,000,000 | ||||||||
Common Class B | |||||||||
Debt Instrument [Line Items] | |||||||||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Common Class B | Convertible Debt | Censtar Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 16.57 | ||||||||
Common Class B | Convertible Debt | Oasis Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | 14 | ||||||||
Common Class A | |||||||||
Debt Instrument [Line Items] | |||||||||
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Market price (in dollars per share) | $ 16.21 | ||||||||
Scenario, Forecast | Common Class B | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares from conversion (shares) | 383,090 | 134,731 | |||||||
Scenario, Forecast | Common Class B | Censtar Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares from conversion (shares) | 134,731 | ||||||||
Scenario, Forecast | Common Class B | Oasis Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares from conversion (shares) | 383,090 |
Debt - Pacific Summit Energy LL
Debt - Pacific Summit Energy LLC (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)trade_credit_arrangement | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||
Amount outstanding | $ 69,256 | $ 48,737 |
Major Energy Companies | Trade Credit Arrangements With Pacific Summit Energy LLC | ||
Debt Instrument [Line Items] | ||
Number of trade credit arrangements | trade_credit_arrangement | 3 | |
Amount outstanding | $ 13,400 | |
Interest rate | 3.90% | |
LIBOR | Major Energy Companies | Trade Credit Arrangements With Pacific Summit Energy LLC | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Aug. 23, 2016 | Apr. 15, 2016 | Aug. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | [2] | Aug. 01, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Contingent consideration for acquisitions - current | $ 11,325,000 | $ 11,325,000 | $ 500,000 | |||||||||
Contingent consideration for acquisitions - noncurrent | 7,611,000 | 7,611,000 | 0 | |||||||||
Earnout payments | 1,343,000 | [1] | $ 0 | |||||||||
Increase in estimate of CenStar Earnout | 843,000 | [1] | $ 0 | |||||||||
Fair Value, Measurements, Recurring | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 1,854,000 | 1,854,000 | 605,000 | |||||||||
Derivative liabilities | (15,229,000) | (15,229,000) | (11,238,000) | |||||||||
Contingent payment arrangement | 18,935,000 | 18,935,000 | 500,000 | |||||||||
Fair Value, Measurements, Recurring | Non-trading Commodity Contract | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 915,000 | 915,000 | 200,000 | |||||||||
Derivative liabilities | (14,896,000) | (14,896,000) | (10,985,000) | |||||||||
Fair Value, Measurements, Recurring | Trading Commodity Contract | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 939,000 | 939,000 | 405,000 | |||||||||
Derivative liabilities | (333,000) | (333,000) | (253,000) | |||||||||
Fair Value, Measurements, Recurring | Level 1 | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 0 | 0 | 0 | |||||||||
Derivative liabilities | (506,000) | (506,000) | (3,324,000) | |||||||||
Contingent payment arrangement | 0 | 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 | 0 | 0 | 0 | |||||||||
Derivative liabilities | (448,000) | (448,000) | (3,324,000) | |||||||||
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 | 0 | |||||||||
Derivative liabilities | (58,000) | (58,000) | 0 | |||||||||
Fair Value, Measurements, Recurring | Level 2 | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 1,854,000 | 1,854,000 | 605,000 | |||||||||
Derivative liabilities | (14,723,000) | (14,723,000) | (7,914,000) | |||||||||
Contingent payment arrangement | 0 | 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 | 915,000 | 915,000 | 200,000 | |||||||||
Derivative liabilities | (14,448,000) | (14,448,000) | (7,661,000) | |||||||||
Fair Value, Measurements, Recurring | Level 2 | Trading Commodity Contract | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 939,000 | 939,000 | 405,000 | |||||||||
Derivative liabilities | (275,000) | (275,000) | (253,000) | |||||||||
Fair Value, Measurements, Recurring | Level 3 | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Derivative assets | 0 | 0 | 0 | |||||||||
Derivative liabilities | 0 | 0 | 0 | |||||||||
Contingent payment arrangement | 18,935,000 | 18,935,000 | 500,000 | |||||||||
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 | 0 | |||||||||
Derivative liabilities | 0 | 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 | 0 | |||||||||
Derivative liabilities | 0 | $ 0 | 0 | |||||||||
Provider Earnout | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Performance period (in years) | 9 months | |||||||||||
Earnout maximum | 9,000,000 | $ 9,000,000 | $ 9,000,000 | |||||||||
Earnout minimum | 5,000,000 | 5,000,000 | ||||||||||
Provider Earnout | Fair Value, Measurements, Recurring | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Contingent payment arrangement | 4,800,000 | 4,800,000 | ||||||||||
Major Earnout | Fair Value, Measurements, Recurring | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Contingent payment arrangement | 13,300,000 | $ 13,300,000 | ||||||||||
CenStar Earnout | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Contingent payment arrangement | $ 1,500,000 | $ 500,000 | ||||||||||
Performance period (in years) | 1 year | |||||||||||
Earnout payments | [1] | $ (1,300,000) | ||||||||||
Release from escrow | $ 600,000 | |||||||||||
CenStar Earnout | Fair Value, Measurements, Recurring | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Contingent payment arrangement | 800,000 | $ 800,000 | ||||||||||
General and Administrative Expense | CenStar Earnout | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Increase in estimate of CenStar Earnout | [1] | $ (200,000) | $ (200,000) | |||||||||
National Gas & Electric, LLC | Major Energy Companies | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Performance period (in years) | 33 months | |||||||||||
Earnout maximum | $ 20,000,000 | |||||||||||
Major Energy Companies | Common Class B | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Share earnout maximum (in shares) | 40,718 | |||||||||||
Major Energy Companies | Common Class B | Maximum | ||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||
Share earnout maximum (in shares) | 200,000 | |||||||||||
[1] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||||||
[2] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. |
Accounting for Derivative Ins55
Accounting for Derivative Instruments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral fee | $ 1.2 | $ 0.1 |
Accounting for Derivative Ins56
Accounting for Derivative Instruments - Volumetric Underlying Derivative Transactions (Details) MWh in Thousands, MMBTU in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016MWhMMBTU | Dec. 31, 2015MWhMMBTU | |
Non-trading | Natural Gas | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 6,760 | 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 | 3,278 | 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 | 2,366 | |
Trading | Natural Gas Basis | Buy | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 242 | |
Trading | Natural Gas Basis | Sell | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 455 |
Accounting for Derivative Ins57
Accounting for Derivative Instruments - Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain on derivatives, net | $ (609) | $ 61 | $ 2,887 | $ (6,118) |
Total current period settlements on derivatives | (8,869) | 4,163 | 3,427 | 12,887 |
Non-trading | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain on derivatives, net | (1,183) | 132 | 2,519 | (5,876) |
Total current period settlements on derivatives | (8,889) | 4,035 | 3,341 | 12,643 |
Non-trading | Censtar and Oasis Power Holdings | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain on derivatives, net | 500 | 2,000 | 600 | 2,200 |
Non-trading | Provider Companies and Major Energy Companies | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain on derivatives, net | 11,200 | 14,700 | ||
Trading | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain on derivatives, net | 574 | (71) | 368 | (242) |
Total current period settlements on derivatives | $ 20 | $ 128 | $ 86 | $ 244 |
Accounting for Derivative Ins58
Accounting for Derivative Instruments - Offsetting Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Commodity Contract | ||
Offsetting Assets [Line Items] | ||
Gross Assets | $ 3,272 | $ 1,000 |
Gross Amounts Offset | (1,418) | (395) |
Net Assets | 1,854 | 605 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 1,854 | 605 |
Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 2,861 | 1,000 |
Gross Amounts Offset | (1,325) | (395) |
Net Assets | 1,536 | 605 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 1,536 | 605 |
Trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 952 | 411 |
Gross Amounts Offset | (13) | (6) |
Net Assets | 939 | 405 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 939 | 405 |
Not Designated as Hedging Instrument [Member] | Non-trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 1,909 | 589 |
Gross Amounts Offset | (1,312) | (389) |
Net Assets | 597 | 200 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 597 | 200 |
Not Designated as Hedging Instrument [Member] | Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 411 | 0 |
Gross Amounts Offset | (93) | 0 |
Net Assets | 318 | 0 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 318 | 0 |
Not Designated as Hedging Instrument [Member] | Non-trading Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 411 | 0 |
Gross Amounts Offset | (93) | 0 |
Net Assets | 318 | 0 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ 318 | $ 0 |
Accounting for Derivative Ins59
Accounting for Derivative Instruments - Offsetting Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Commodity Contract | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | $ (29,843) | $ (14,888) |
Gross Amounts Offset | 13,414 | 3,550 |
Net Liabilities | (16,429) | (11,338) |
Cash Collateral Offset | 1,200 | 100 |
Net Amount Presented | (15,229) | (11,238) |
Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (25,311) | (13,938) |
Gross Amounts Offset | 10,349 | 3,218 |
Net Liabilities | (14,962) | (10,720) |
Cash Collateral Offset | 1,200 | 100 |
Net Amount Presented | (13,762) | (10,620) |
Trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (356) | (320) |
Gross Amounts Offset | 23 | 67 |
Net Liabilities | (333) | (253) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | (333) | (253) |
Not Designated as Hedging Instrument [Member] | Non-trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (24,955) | (13,618) |
Gross Amounts Offset | 10,326 | 3,151 |
Net Liabilities | (14,629) | (10,467) |
Cash Collateral Offset | 1,200 | 100 |
Net Amount Presented | (13,429) | (10,367) |
Not Designated as Hedging Instrument [Member] | Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (4,532) | (950) |
Gross Amounts Offset | 3,065 | 332 |
Net Liabilities | (1,467) | (618) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | (1,467) | (618) |
Not Designated as Hedging Instrument [Member] | Non-trading Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (4,532) | (950) |
Gross Amounts Offset | 3,065 | 332 |
Net Liabilities | (1,467) | (618) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ (1,467) | $ (618) |
Taxes (Details)
Taxes (Details) - USD ($) $ in Thousands | Jun. 08, 2016 | Apr. 01, 2016 | Feb. 03, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||||||
Net current deferred tax liability | $ (900) | |||||
Non-current deferred tax assets | $ 56,101 | 23,380 | ||||
Non-current deferred tax liability | 0 | 853 | ||||
Number of shares of common stock exchanged | 500,000 | 1,725,000 | 1,000,000 | |||
Long-term payable pursuant to the TRA | $ 50,625 | 20,713 | ||||
Income tax rate | 14.20% | 6.50% | ||||
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 | 50,600 | |||||
Long-term deferred tax asset related to the TRA | $ 20,000 | |||||
Accounting Standards Update 2015-17 | New Accounting Pronouncement, Early Adoption, Effect | ||||||
Related Party Transaction [Line Items] | ||||||
Non-current deferred tax assets | 23,400 | |||||
Non-current deferred tax liability | $ 900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Aug. 01, 2016 | Jan. 19, 2016 | Aug. 31, 2016 | Feb. 29, 2016 | May 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Indirect Tax Audits | |||||||
Loss Contingencies [Line Items] | |||||||
Loss during the period | $ 1.6 | ||||||
Increase in liabilities from accrual of additional loss | 1.9 | ||||||
Provider Companies | Pending Litigation | Halifax-American Energy Company, LLC et al v. Provider Power, LLC, Electricity N.H., LLC, Electricity Maine, LLC, Emile Clavet and Kevin Dean | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement amount | $ (0.6) | ||||||
Attorney fees | $ 0.3 | ||||||
Appeal bond | $ 1 | ||||||
Contingent liabilities | $ 1 | ||||||
Major Energy Companies | Settled Litigation | Misleading Marketing Practices- Illinois Commerce Commission | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement amount | $ (0.3) | ||||||
Major Energy Companies | Settled Litigation | Misleading Marketing Practices- Maryland Public Service Commission | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement amount | $ (0.3) | $ (0.3) | |||||
Major Energy Companies | Settled Litigation | Misleading Marketing Practices- Pennsylvania Public Utility Commission/Bureau of Investigation and Enforcement | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement amount | $ (4.1) |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - USD ($) | Aug. 23, 2016 | Aug. 01, 2016 | Jan. 01, 2016 | May 16, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | May 16, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2015 | Jul. 08, 2015 | |||||
Related Party Transaction [Line Items] | |||||||||||||||||
Accounts payable—affiliates | $ 2,598,000 | $ 2,598,000 | $ 1,962,000 | ||||||||||||||
Prepaid assets - affiliates (less than) | 1,000 | 1,000 | 210,000 | ||||||||||||||
Net asset optimization revenues | [2] | 108,000 | [1] | $ (545,000) | [3] | (42,000) | [1] | $ 1,317,000 | [3] | ||||||||
Retail cost of revenues (less than) | [4] | 122,830,000 | [1] | 60,967,000 | [3] | 248,593,000 | [1] | 176,000,000 | [3] | ||||||||
General and administrative expense - affiliates | [5] | 18,009,000 | [1] | 15,493,000 | [3] | 55,188,000 | [1] | 43,909,000 | [3] | ||||||||
Proceeds from disgorgement of stockholders short-swing profits | 300,000 | [6] | $ 941,000 | [6] | 0 | [7] | |||||||||||
Tax receivable agreement, net cash savings (as a percent) | 15.00% | ||||||||||||||||
Tax Receivable Agreement | NuDevco Retail Holdings and NuDevco Retail | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Initial TRA payment | 1,400,000 | $ 1,400,000 | |||||||||||||||
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 | 2,800,000 | 2,800,000 | 1,800,000 | ||||||||||||||
Accounts payable—affiliates | 2,600,000 | 2,600,000 | 2,000,000 | ||||||||||||||
Prepaid assets - affiliates (less than) | 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 | 0 | 3,400,000 | 1,600,000 | 9,600,000 | |||||||||||||
Affiliated Entity | Purchased Natural Gas Sold To Affiliate | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Net asset optimization revenues | 0 | 300,000 | 200,000 | 900,000 | |||||||||||||
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 | 3,200,000 | $ 600,000 | 12,800,000 | 2,300,000 | |||||||||||||
Affiliated Entity | Allocated Overhead Costs | Retailco | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
General and administrative expense - affiliates | 2,900,000 | 11,000,000 | |||||||||||||||
Affiliated Entity | Property and Equipment Capitalized | Retailco | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Amount capitalized for application, development and implementation of various systems | $ 200,000 | 1,300,000 | |||||||||||||||
NuDevco Retail and Retailco | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Payments of distributions to affiliates | $ 19,900,000 | $ 11,700,000 | |||||||||||||||
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 | $ 6,300,000 | ||||||||||||||||
Retailco | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Payments of distributions to affiliates | 10,100,000 | ||||||||||||||||
NG&E | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Payments of distributions to affiliates | $ 9,800,000 | ||||||||||||||||
NuDevco Retail Holdings and NuDevco Retail | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
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 | ||||||||||||||||
Common Class B | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Share price (in dollars per share) | $ 20 | $ 20 | |||||||||||||||
Common Class B | Subsidiary of Common Parent | National Gas & Electric, LLC | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Number of shares issued for acquisition (shares) | 2,000,000 | ||||||||||||||||
Common Class B | Subsidiary of Common Parent | Retailco | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Number of shares issued for acquisition (shares) | 699,742 | ||||||||||||||||
Value of shares issued for acquisition | $ 14,000,000 | ||||||||||||||||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||||||||||
[2] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $0 and $3,382 for the three months ended September 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $928 for the nine months ended September 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $9,589 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||||||||||
[3] | 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 Notes 2 "Basis of Presentation" for further discussion. | ||||||||||||||||
[4] | Retail cost of revenues includes retail cost of revenues—affiliates of $0 for the three months ended September 30, 2016 and 2015, respectively, and less than $100 for the nine months ended September 30, 2016 and 2015 respectively. | ||||||||||||||||
[5] | General and administrative includes general and administrative expense—affiliates of $3,078 and $0 for the three months ended September 30, 2016, and 2015, respectively, and $11,521 and $100 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||||||||||
[6] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||||||||||
[7] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Asset optimization revenue | $ 26 | $ 27.7 | $ 89.1 | $ 120.7 |
Asset optimization cost of revenues | $ 25.9 | $ 28.2 | $ 89.1 | $ 119.4 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||||||
Segment Reporting Information [Line Items] | |||||||||
Income before income tax expense | $ 7,930 | [1] | $ 6,455 | [2] | $ 48,388 | [1] | $ 24,442 | [2] | |
Interest and other income | (240) | [1] | (5) | [2] | (340) | [1] | (326) | [2] | |
Interest expense | 1,270 | [1] | 800 | [2] | 2,855 | [1] | 1,415 | [2] | |
Operating Income | 8,960 | [1] | 7,250 | [2] | 50,903 | [1] | 25,531 | [2] | |
Depreciation and amortization | 8,295 | [1] | 7,557 | [2] | 23,337 | [1],[3] | 17,873 | [2],[4] | |
General and administrative | [5] | 18,009 | [1] | 15,493 | [2] | 55,188 | [1] | 43,909 | [2] |
Less: | |||||||||
Net asset optimization (expenses) revenues | [6] | 108 | [1] | (545) | [2] | (42) | [1] | 1,317 | [2] |
Net, Gain (losses) on non-trading derivative instruments | (609) | 61 | 2,887 | (6,118) | |||||
Net, Cash settlements on non-trading derivative instruments | 18,693 | [3] | 15,120 | [4] | |||||
Retail Gross Margin | 45,228 | 26,678 | 123,610 | 79,229 | |||||
Non-trading | |||||||||
Less: | |||||||||
Net, Gain (losses) on non-trading derivative instruments | (1,183) | 132 | 2,519 | (5,876) | |||||
Net, Cash settlements on non-trading derivative instruments | $ (8,889) | $ 4,035 | $ 3,341 | $ 12,643 | |||||
[1] | Financial information has been recast to include results attributable to the acquisition of Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||
[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 Notes 2 "Basis of Presentation" for further discussion. | ||||||||
[3] | Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on August 23, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | ||||||||
[4] | Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Notes 2 "Basis of Presentation" for further discussion. | ||||||||
[5] | General and administrative includes general and administrative expense—affiliates of $3,078 and $0 for the three months ended September 30, 2016, and 2015, respectively, and $11,521 and $100 for the nine months ended September 30, 2016 and 2015, respectively. | ||||||||
[6] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $0 and $3,382 for the three months ended September 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $928 for the nine months ended September 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $9,589 for the nine months ended September 30, 2016 and 2015, respectively. |
Segment Reporting - Financial D
Segment Reporting - Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||||||
Segment Reporting Information [Line Items] | ||||||||||
Total Revenues | $ 158,094 | [1] | $ 91,267 | [2] | $ 378,021 | [1] | $ 263,313 | [2] | ||
Retail cost of revenues | [3] | 122,830 | [1] | 60,967 | [2] | 248,593 | [1] | 176,000 | [2] | |
Less: | ||||||||||
Net asset optimization (expenses) revenues | [4] | 108 | [1] | (545) | [2] | (42) | [1] | 1,317 | [2] | |
(Losses) gains on non-trading derivatives | (609) | 61 | 2,887 | (6,118) | ||||||
Current period settlements on non-trading derivatives | (8,869) | 4,163 | 3,427 | 12,887 | ||||||
Retail Gross Margin | 45,228 | 26,678 | 123,610 | 79,229 | ||||||
Total Assets | 337,731 | 337,731 | $ 162,234 | |||||||
Goodwill | 79,556 | 79,556 | 18,379 | |||||||
Non-trading | ||||||||||
Less: | ||||||||||
(Losses) gains on non-trading derivatives | (1,183) | 132 | 2,519 | (5,876) | ||||||
Current period settlements on non-trading derivatives | (8,889) | 4,035 | 3,341 | 12,643 | ||||||
Operating Segments | Retail Electricity | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Total Revenues | 144,243 | 76,913 | 293,571 | 170,060 | ||||||
Retail cost of revenues | 113,600 | 50,787 | 209,617 | 122,864 | ||||||
Less: | ||||||||||
Net asset optimization (expenses) revenues | 0 | 0 | 0 | 0 | ||||||
Retail Gross Margin | 39,189 | 18,925 | 82,226 | 43,670 | ||||||
Total Assets | 474,575 | 474,575 | 150,245 | |||||||
Goodwill | 77,271 | 77,271 | 16,476 | |||||||
Operating Segments | Retail Electricity | Non-trading | ||||||||||
Less: | ||||||||||
(Losses) gains on non-trading derivatives | 68 | 3,891 | 997 | (2,201) | ||||||
Current period settlements on non-trading derivatives | (8,614) | 3,310 | 731 | 5,727 | ||||||
Operating Segments | Retail Natural Gas | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Total Revenues | 13,851 | 14,354 | 84,450 | 93,253 | ||||||
Retail cost of revenues | 9,230 | 10,180 | 38,976 | 53,136 | ||||||
Less: | ||||||||||
Net asset optimization (expenses) revenues | 108 | (545) | (42) | 1,317 | ||||||
Retail Gross Margin | 6,039 | 7,753 | 41,384 | 35,559 | ||||||
Total Assets | 185,145 | 185,145 | 113,583 | |||||||
Goodwill | 2,285 | 2,285 | 1,903 | |||||||
Operating Segments | Retail Natural Gas | Non-trading | ||||||||||
Less: | ||||||||||
(Losses) gains on non-trading derivatives | (1,251) | (3,759) | 1,522 | (3,675) | ||||||
Current period settlements on non-trading derivatives | (275) | 725 | 2,610 | 6,916 | ||||||
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 | 170,074 | 170,074 | 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 | (492,063) | (492,063) | (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 Major Energy Companies by an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation" and "Acquisitions," respectively, for further discussion. | |||||||||
[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 Notes 2 "Basis of Presentation" for further discussion. | |||||||||
[3] | Retail cost of revenues includes retail cost of revenues—affiliates of $0 for the three months ended September 30, 2016 and 2015, respectively, and less than $100 for the nine months ended September 30, 2016 and 2015 respectively. | |||||||||
[4] | Net asset optimization (expenses) revenues includes asset optimization revenues—affiliates of $0 and $263 for the three months ended September 30, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $0 and $3,382 for the three months ended September 30, 2016 and 2015, respectively and asset optimization revenues—affiliates of $154 and $928 for the nine months ended September 30, 2016 and 2015, respectively, and asset optimization revenue—affiliates cost of revenues of $1,633 and $9,589 for the nine months ended September 30, 2016 and 2015, respectively. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 31, 2017 | Jan. 08, 2017 | Oct. 27, 2016 | Sep. 30, 2016 | Nov. 05, 2016 |
Subsequent Event | Common Class A | |||||
Subsequent Event [Line Items] | |||||
Dividends declared (n dollars per share) | $ 0.3625 | ||||
Scenario, Forecast | Common Class B | |||||
Subsequent Event [Line Items] | |||||
Number of shares from conversion (shares) | 383,090 | 134,731 | |||
Tax Receivable Agreement | NuDevco Retail Holdings and NuDevco Retail | |||||
Subsequent Event [Line Items] | |||||
Accounts payable—affiliates | $ 1.4 | ||||
Tax receivable agreement, deferral period | 18 months | ||||
Tax Receivable Agreement | NuDevco Retail Holdings and NuDevco Retail | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Accounts payable—affiliates | $ 1.4 |