Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
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 | Accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | true | ||
Class of Stock [Line Items] | |||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 111 | ||
Common Class A | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 14,141,872 | ||
Common Class B | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 20,800,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 41,002,000 | $ 29,419,000 |
Restricted cash | 8,636,000 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $3,353 and $4,023 as of December 31, 2018 and 2017, respectively | 150,866,000 | 158,814,000 |
Accounts receivable—affiliates | 2,558,000 | 3,661,000 |
Inventory | 3,878,000 | 4,470,000 |
Fair value of derivative assets | 7,289,000 | 31,191,000 |
Customer acquisition costs, net | 14,431,000 | 22,123,000 |
Customer relationships, net | 16,630,000 | 18,653,000 |
Deposits | 9,226,000 | 7,701,000 |
Renewable energy credit asset | 25,717,000 | 12,839,000 |
Other current assets | 11,747,000 | 7,867,000 |
Total current assets | 291,980,000 | 296,738,000 |
Property and equipment, net | 4,366,000 | 8,275,000 |
Fair value of derivative assets | 3,276,000 | 3,309,000 |
Customer acquisition costs, net | 3,893,000 | 6,949,000 |
Customer relationships, net | 26,429,000 | 34,839,000 |
Deferred tax assets | 27,321,000 | 21,977,000 |
Goodwill | 120,343,000 | 120,154,000 |
Other assets | 11,130,000 | 11,500,000 |
Total Assets | 488,738,000 | 503,741,000 |
Current liabilities: | ||
Accounts payable | 69,631,000 | 77,510,000 |
Accounts payable—affiliates | 2,464,000 | 4,622,000 |
Accrued liabilities | 10,004,000 | 10,202,000 |
Renewable energy credit liability | 42,805,000 | 23,477,000 |
Fair value of derivative liabilities | 6,478,000 | 1,637,000 |
Current portion of Senior Credit Facility | 0 | 7,500,000 |
Current payable pursuant to tax receivable agreement—affiliates | 1,658,000 | 5,937,000 |
Current contingent consideration for acquisitions | 1,328,000 | 4,024,000 |
Current portion of note payable | 6,936,000 | 13,443,000 |
Other current liabilities | 647,000 | 2,675,000 |
Total current liabilities | 141,951,000 | 151,027,000 |
Long-term liabilities: | ||
Fair value of derivative liabilities | 106,000 | 492,000 |
Payable pursuant to tax receivable agreement—affiliates | 25,917,000 | 26,355,000 |
Long-term portion of Senior Credit Facility | 129,500,000 | 117,750,000 |
Subordinated debt—affiliate | 10,000,000 | 0 |
Note payable | 0 | 7,051,000 |
Contingent consideration for acquisitions | 0 | 626,000 |
Other long-term liabilities | 212,000 | 172,000 |
Total liabilities | 307,686,000 | 303,473,000 |
Commitments and contingencies (Note 14) | ||
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and outstanding at December 31, 2018 and 1,704,339 shares issued and outstanding at December 31, 2017 | 90,758,000 | 41,173,000 |
Additional paid-in capital | 46,157,000 | 47,811,000 |
Accumulated other comprehensive (loss)/income | 2,000 | (11,000) |
Retained (deficit) earnings | 1,307,000 | 11,399,000 |
Treasury stock, at cost, 99,446 shares at December 31, 2018 and December 31, 2017 | (2,011,000) | (2,011,000) |
Total stockholders' equity | 45,806,000 | 57,536,000 |
Non-controlling interest in Spark HoldCo, LLC | 44,488,000 | 101,559,000 |
Total equity | 90,294,000 | 159,095,000 |
Total Liabilities, Series A Preferred Stock and stockholders' equity | 488,738,000 | 503,741,000 |
Common Class A | ||
Common stock | 142,000 | 132,000 |
Common Class B | ||
Common stock | $ 209,000 | $ 216,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 3,353 | $ 4,023 |
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 3,707,256 | 1,704,339 |
Preferred stock, shares outstanding (in shares) | 3,707,256 | 1,704,339 |
Treasury stock, shares (in shares) | 99,446 | 99,446 |
Common Class A | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 14,178,284 | 13,235,082 |
Common stock, shares outstanding (in shares) | 14,078,838 | 13,135,636 |
Common Class B | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 20,800,000 | 21,485,126 |
Common stock, shares outstanding (in shares) | 20,800,000 | 21,485,126 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenues: | ||||
Retail revenues | $ 1,001,417 | $ 798,772 | $ 547,283 | |
Net asset optimization revenues (expense) | [1] | 4,511 | (717) | (586) |
Total revenues | 1,005,928 | 798,055 | 546,697 | |
Operating expenses: | ||||
Retail cost of revenues | [2] | 845,493 | 552,167 | 344,944 |
General and administrative | [3] | 111,431 | 101,127 | 84,964 |
Depreciation and amortization | 52,658 | 42,341 | 32,788 | |
Total operating expenses | 1,009,582 | 695,635 | 462,696 | |
Operating (loss) income | (3,654) | 102,420 | 84,001 | |
Other (expense)/income: | ||||
Interest expense | (9,410) | (11,134) | (8,859) | |
Change in tax receivable agreement liability | 0 | 22,267 | 0 | |
Interest and other income | 749 | 256 | 957 | |
Total other expenses | (8,661) | 11,389 | (7,902) | |
(Loss) income before income tax expense | (12,315) | 113,809 | 76,099 | |
Income tax expense | 2,077 | 38,765 | 10,426 | |
Net (loss) income | (14,392) | 75,044 | 65,673 | |
Less: Net (loss) income attributable to non-controlling interest | (13,206) | 55,799 | 51,229 | |
Net (loss) income attributable to Spark Energy, Inc. stockholders | (1,186) | 19,245 | 14,444 | |
Less: Dividend on Series A preferred stock | 8,109 | 3,038 | 0 | |
Net (loss) income attributable to stockholders of Class A common stock | (9,295) | 16,207 | 14,444 | |
Other comprehensive (loss) income, net of tax: | ||||
Currency translation (loss) gain | 31 | (59) | 41 | |
Other comprehensive (loss) income | 31 | (59) | 41 | |
Comprehensive (loss) income | (14,361) | 74,985 | 65,714 | |
Less: Comprehensive (loss) income attributable to non-controlling interest | (13,188) | 55,762 | 51,259 | |
Comprehensive (loss) income attributable to Spark Energy, Inc. stockholders | $ (1,173) | $ 19,223 | $ 14,455 | |
Net (loss) income attributable to Spark Energy, Inc. per share of Class A common stock | ||||
Basic (in dollars per share) | $ (0.69) | $ 1.23 | $ 1.27 | |
Diluted (in dollars per share) | $ (0.69) | $ 1.21 | $ 1.11 | |
Weighted average shares of Class A common stock outstanding | ||||
Basic (in shares) | 13,390 | 13,143 | 11,402 | |
Diluted (in shares) | 13,390 | 13,346 | 12,690 | |
[1] | Net asset optimization revenues includes net asset optimization revenues/(expense) —affiliates of $2,328, $1,281 and $(1,479) for the years ended December 31, 2018, 2017 and 2016, respectively. | |||
[2] | Retail cost of revenues includes retail cost of revenues—affiliates of $0, $0 and $9 for the years December 31, 2018, 2017 and 2016, respectively. | |||
[3] | General and administrative includes general and administrative expense—affiliates of $9,849, $24,700 and $15,700 for the years ended December 31, 2018, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - Footnotes - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net asset optimization revenues (expense) | [1] | $ 4,511 | $ (717) | $ (586) |
Retail cost of revenues - affiliates | [2] | 845,493 | 552,167 | 344,944 |
General and administrative expense - affiliates | [3] | 111,431 | 101,127 | 84,964 |
Affiliated Entity | ||||
Net asset optimization revenues (expense) | 2,328 | 1,281 | (1,479) | |
Retail cost of revenues - affiliates | 0 | 0 | 9 | |
General and administrative expense - affiliates | $ 9,849 | $ 24,700 | $ 15,700 | |
[1] | Net asset optimization revenues includes net asset optimization revenues/(expense) —affiliates of $2,328, $1,281 and $(1,479) for the years ended December 31, 2018, 2017 and 2016, respectively. | |||
[2] | Retail cost of revenues includes retail cost of revenues—affiliates of $0, $0 and $9 for the years December 31, 2018, 2017 and 2016, respectively. | |||
[3] | General and administrative includes general and administrative expense—affiliates of $9,849, $24,700 and $15,700 for the years ended December 31, 2018, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common StockClass A Common Stock | Common StockClass B Common Stock | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Additional Paid-In Capital | Retained Earnings (Deficit) | Total Stockholders' Equity | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2015 | $ 31,390 | $ 62 | $ 216 | $ 0 | $ 0 | $ 7,770 | $ (1,366) | $ 6,682 | $ 24,708 |
Balance at beginning of period (in shares) at Dec. 31, 2015 | 6,238 | 21,500 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock based compensation | 2,270 | 2,270 | 2,270 | ||||||
Restricted stock unit vesting | 1,062 | $ 4 | 1,058 | 1,062 | |||||
Restricted stock unit vesting (in shares) | 305 | ||||||||
Excess tax benefit related to restricted stock vesting | 186 | 186 | 186 | ||||||
Consolidated net income | 65,673 | 14,444 | 14,444 | 51,229 | |||||
Foreign currency translation adjustment for equity method investee | 41 | 11 | 11 | 30 | |||||
Beneficial conversion feature | 243 | 243 | 243 | ||||||
Distributions paid to non-controlling unit holders | (34,931) | (34,931) | |||||||
Net contribution of the Major Energy Companies | 3,873 | 3,873 | |||||||
Net contribution by NG&E | 0 | ||||||||
Dividends paid to Class A common stockholders | (8,367) | (8,367) | (8,367) | ||||||
Proceeds from disgorgement of stockholder short-swing profits | 1,605 | 1,605 | 1,605 | ||||||
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock | 4,768 | 4,768 | 4,768 | ||||||
Conversion/Exchange of convertible securities to common stock | 0 | $ 64 | $ (64) | 2,716 | 2,716 | (2,716) | |||
Conversion/Exchange of convertible securities to common stock (in shares) | 6,450 | (6,450) | |||||||
Issuance of Class B Common Stock | 53,994 | $ 54 | 54 | 53,940 | |||||
Issuance of Class B Common Stock (in shares) | 5,400 | ||||||||
Remeasurement of deferred tax assets | (5,552) | (5,552) | (5,552) | ||||||
Changes in ownership interest | 0 | 24,123 | 24,123 | (24,123) | |||||
Balance at end of period at Dec. 31, 2016 | 116,255 | $ 130 | $ 206 | $ 0 | 11 | 39,187 | 4,711 | 44,245 | 72,010 |
Balance at end of period (in shares) at Dec. 31, 2016 | 12,993 | 20,450 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock based compensation | 2,754 | 2,754 | 2,754 | ||||||
Restricted stock unit vesting | 1,054 | $ 2 | 1,052 | 1,054 | |||||
Restricted stock unit vesting (in shares) | 242 | ||||||||
Consolidated net income | 75,044 | 19,245 | 19,245 | 55,799 | |||||
Foreign currency translation adjustment for equity method investee | (59) | (22) | (22) | (37) | |||||
Beneficial conversion feature | 176 | 176 | |||||||
Distributions paid to non-controlling unit holders | (33,800) | (33,800) | |||||||
Net contribution of the Major Energy Companies | 0 | ||||||||
Net contribution by NG&E | 274 | 274 | |||||||
Dividends paid to Class A common stockholders | (9,519) | (9,519) | (9,519) | ||||||
Proceeds from disgorgement of stockholder short-swing profits | 708 | 708 | 708 | ||||||
Conversion/Exchange of convertible securities to common stock | 7,618 | $ 10 | 10 | 7,608 | |||||
Conversion/Exchange of convertible securities to common stock (in shares) | 1,035 | ||||||||
Dividends to Preferred Stock | (3,038) | (3,038) | (3,038) | ||||||
Tax receivable agreement liability true-up | (2,872) | (2,872) | (2,872) | ||||||
Treasury Stock | (2,011) | $ (2,011) | (2,011) | ||||||
Treasury Stock (in shares) | (99) | ||||||||
Remeasurement of deferred tax assets | 6,511 | 6,511 | 6,511 | ||||||
Changes in ownership interest | 0 | 471 | 471 | (471) | |||||
Balance at end of period at Dec. 31, 2017 | 159,095 | $ 132 | $ 216 | $ (2,011) | (11) | 47,811 | 11,399 | 57,536 | 101,559 |
Balance at end of period (in shares) at Dec. 31, 2017 | 13,235 | 21,485 | 99 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock based compensation | 5,703 | 5,703 | 5,703 | ||||||
Restricted stock unit vesting | (1,015) | $ 3 | (1,018) | (1,015) | |||||
Restricted stock unit vesting (in shares) | 258 | ||||||||
Consolidated net income | (14,392) | (1,186) | (1,186) | (13,206) | |||||
Foreign currency translation adjustment for equity method investee | 31 | 13 | 13 | 18 | |||||
Distributions paid to non-controlling unit holders | (35,478) | (35,478) | |||||||
Net contribution of the Major Energy Companies | 0 | ||||||||
Net contribution by NG&E | 0 | ||||||||
Dividends paid to Class A common stockholders | (9,783) | (4,932) | (4,851) | (9,783) | |||||
Proceeds from disgorgement of stockholder short-swing profits | 0 | ||||||||
Conversion/Exchange of convertible securities to common stock | 0 | $ 7 | $ (7) | ||||||
Conversion/Exchange of convertible securities to common stock (in shares) | 685 | (685) | |||||||
Dividends to Preferred Stock | (8,110) | (4,055) | (4,055) | (8,110) | |||||
Acquisition of Customers from Affiliate | (7,129) | (7,129) | |||||||
Remeasurement of deferred tax assets | 1,372 | 1,372 | 1,372 | ||||||
Changes in ownership interest | 0 | 1,276 | 1,276 | (1,276) | |||||
Balance at end of period at Dec. 31, 2018 | $ 90,294 | $ 142 | $ 209 | $ (2,011) | $ 2 | $ 46,157 | $ 1,307 | $ 45,806 | $ 44,488 |
Balance at end of period (in shares) at Dec. 31, 2018 | 14,178 | 20,800 | 99 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (14,392) | $ 75,044 | $ 65,673 |
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities: | |||
Depreciation and amortization expense | 51,436 | 42,666 | 48,526 |
Deferred income taxes | (2,328) | 29,821 | 3,382 |
Change in TRA liability | 0 | (22,267) | 0 |
Stock based compensation | 5,879 | 5,058 | 5,242 |
Amortization of deferred financing costs | 1,291 | 1,035 | 668 |
Change in fair value of Earnout liabilities | (1,715) | (7,898) | (140) |
Accretion on fair value of Earnout liabilities | 0 | 4,108 | 5,060 |
Excess tax benefit related to restricted stock vesting | (101) | 179 | 0 |
Bad debt expense | 10,135 | 6,550 | 1,261 |
Loss (gain) on derivatives, net | 18,170 | (5,008) | (22,407) |
Current period cash settlements on derivatives, net | 11,038 | (19,598) | (24,427) |
Accretion of discount to convertible subordinated notes to affiliate | 0 | 1,004 | 150 |
Earnout Payments | 0 | (1,781) | (843) |
Other | (882) | (5) | (715) |
Changes in assets and liabilities: | |||
Decrease (increase) in accounts receivable | 2,692 | (32,361) | (12,088) |
Decrease (increase) in accounts receivable—affiliates | 859 | (1,459) | (118) |
Decrease (increase) in inventory | 674 | (718) | 542 |
Increase in customer acquisition costs | (13,673) | (25,874) | (21,907) |
(Increase) decrease in prepaid and other current assets | (14,033) | 1,915 | 71 |
(Increase) decrease in other assets | (335) | (465) | 1,321 |
Increase in accounts payable and accrued liabilities | 10,301 | 14,831 | 14,831 |
(Decrease) increase in accounts payable—affiliates | (2,158) | 51 | 458 |
(Decrease) increase in other current liabilities | (3,050) | (1,210) | 2,364 |
Increase (decrease) in other non-current liabilities | 41 | (1,487) | 46 |
Decrease in intangible assets—customer acquisitions | (86) | 0 | 0 |
Net cash provided by operating activities | 59,763 | 62,131 | 66,950 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,429) | (1,704) | (2,258) |
Cash paid for acquisitions | (17,552) | (75,854) | (30,129) |
Contribution to equity method investment | 0 | 0 | (1,102) |
Net cash used in investing activities | (18,981) | (77,558) | (33,489) |
Cash flows from financing activities: | |||
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid | 48,490 | 40,241 | 0 |
Payment to affiliates for acquisition of customer book | (7,129) | 0 | 0 |
Borrowings on notes payable | 417,300 | 206,400 | 79,048 |
Payments on notes payable | (403,050) | (152,939) | (66,652) |
Earnout Payments | (1,607) | (18,418) | (2,012) |
Payments on the Verde promissory note | (13,422) | 0 | 0 |
Restricted stock vesting | (2,895) | (3,091) | (1,183) |
Proceeds from issuance of Class B common stock | 0 | 0 | 13,995 |
Proceeds from disgorgement of stockholders short-swing profits | 244 | 1,129 | 941 |
Excess tax benefit related to restricted stock vesting | 185 | ||
Payment of Tax Receivable Agreement Liability | (6,219) | 0 | 0 |
Payment of dividends to Class A common shareholders | (9,783) | (9,519) | (8,367) |
Payment of distributions to non-controlling unitholders | (35,478) | (33,800) | (34,930) |
Payment of dividends to Preferred Stock | (7,014) | (2,106) | 0 |
Purchase of Treasury Stock | 0 | (2,011) | 0 |
Net cash (used in) provided by financing activities | (20,563) | 25,886 | (18,975) |
Increase in Cash and cash equivalents and Restricted Cash | 20,219 | 10,459 | 14,486 |
Cash and cash equivalents and Restricted cash—beginning of period | 29,419 | 18,960 | 4,474 |
Cash and cash equivalents and Restricted cash—end of period | 49,638 | 29,419 | 18,960 |
Non-cash items: | |||
Issuance of Class B common stock to affiliates for Major Energy Companies acquisition | 0 | 0 | 40,000 |
Contingent consideration—earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions | 0 | 0 | 18,936 |
Assumption of legal liability in connection with the Major Energy Companies acquisition | 0 | 0 | 5,000 |
Net contribution of the Major Energy Companies | 0 | 0 | 3,873 |
Net contribution by NG&E in excess of cash | 0 | 274 | 0 |
Tax benefit from tax receivable agreement | (1,508) | (1,802) | 31,490 |
Liability due to tax receivable agreement | 1,642 | 4,674 | (26,722) |
Property and equipment purchase accrual | (123) | 91 | (32) |
Cash paid during the period for: | |||
Interest | 7,883 | 5,715 | 2,280 |
Taxes | 8,561 | 11,205 | 7,326 |
Provider Companies | |||
Non-cash items: | |||
Installment consideration incurred in connection with the acquisition | 0 | 0 | 1,890 |
Verde Companies | |||
Non-cash items: | |||
Installment consideration incurred in connection with the acquisition | $ 0 | $ 19,994 | $ 0 |
Formation and Organization
Formation and Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Formation and Organization | 1. Formation and Organization Organization We are 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”). 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. Spark HoldCo is the direct and indirect owner of the subsidiaries through which we operate. We conduct our business through several brands across our service areas, including CenStar Energy, Electricity Maine, Electricity N.H., HIKO Energy, Major Energy, Oasis Energy, Perigee Energy, Provider Power Massachusetts, Respond Power, Spark Energy, and Verde Energy. Emerging Growth Company Status 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 the earliest of (i) the date on which the Company issues more than $1.0 billion of non-convertible debt over a three-year period; or (ii) the last day of 2019. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial 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”). Our 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. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. Immaterial Corrections to Prior Year Financial Information The consolidated balance sheet, income statements, statement of changes in stockholders' equity and our cash flow statements reflect immaterial adjustments to the historical balances in additional paid in capital, non-controlling interest, deferred tax assets, retained earnings, income tax expense, net (loss) income attributable to non-controlling interest, and earnings per share for the years ended December 31, 2017 and 2016. We made these adjustments in accordance with GAAP, to reflect the amounts the owners of our Class A and Class B common stock would receive, respectively, if the assets of our subsidiary, Spark HoldCo, were sold, and its liabilities were settled at their recorded book values as of each balance sheet date. In addition, we adjusted income for the year ended December 31, 2017 to reflect the impact on income of the changes in deferred tax balances referenced above and to make certain immaterial corrections to the allocation of income between non-controlling interests and income available for common shareholders. Our adjustments had no impact on the manner in which distributions were paid in any current or prior period. The Company evaluated the materiality of the errors from quantitative and qualitative perspectives, and concluded that the errors were immaterial to the Company’s prior period interim and annual consolidated financial statements. Since the revision was not material to any prior period interim or annual consolidated financial statements, no amendments to previously filed interim or annual periodic reports was required. Consequently, the Company revised the historical consolidated financial information presented herein. Below are amounts as reported and as adjusted for each year presented (in thousands): December 31, 2016 December 31, 2017 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted Deferred tax assets $ 54,109 $ (7,481 ) $ 46,628 $ 24,185 $ (2,208 ) $ 21,977 Total Assets 375,230 (7,481 ) 367,749 505,949 (2,208 ) 503,741 Additional paid-in capital 25,272 13,915 39,187 26,914 20,897 47,811 Retained earnings 4,711 — 4,711 11,008 391 11,399 Total stockholders' equity 30,330 13,915 44,245 36,248 21,288 57,536 Non-controlling interest in Spark HoldCo, LLC 93,406 (21,396 ) 72,010 125,055 (23,496 ) 101,559 Total equity 123,736 (7,481 ) 116,255 161,303 (2,208 ) 159,095 Total liabilities, Series A Preferred Stock and stockholders' equity 375,230 (7,481 ) 367,749 505,949 (2,208 ) 503,741 Income tax expense 37,528 1,237 38,765 Net Income 76,281 (1,237 ) 75,044 Net Income Available to Common Shareholders 15,816 391 16,207 Net income attributable to non-controlling interests 57,427 (1,628 ) 55,799 Net income attributable to Spark Energy, Inc. per share of Class A common stock Basic 1.20 0.03 1.23 Diluted 1.19 0.02 1.21 Cash flows from operating activities: Net income 76,281 (1,237 ) 75,044 Adjustments to reconcile net income to net cash flows from operating activities Deferred income taxes 28,584 1,237 29,821 Net cash provided by operating activities (1) 63,912 (1,781 ) 62,131 (1) Net cash provided by operating activities for the year ended December 31, 2017 changed from amounts previously reported due to the adoption of ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. See further discussion in the Recent Accounting Pronouncements section, below. In addition, immaterial adjustments have been made to certain December 31, 2015 equity balances, as noted in the table below. December 31, 2015 As Reported Adjustments As Adjusted Additional paid-in capital 12,426 (4,656 ) 7,770 Retained earnings (1,366 ) — (1,366 ) Total stockholders' equity 11,338 (4,656 ) 6,682 Non-controlling interest in Spark HoldCo, LLC 21,981 2,727 24,708 Total equity $ 33,319 $ (1,929 ) $ 31,390 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 consolidated financial statements. Reclassifications Prior to December 31, 2018, renewable energy credit asset and renewable energy credit liability balances were included in other current assets and accrued liabilities, respectively. In 2018, these amounts were separately presented and prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported earnings. Use of Estimates and Assumptions The preparation of the Company’s consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could materially differ from those estimates. Relationship with our Founder and Majority Shareholder W. Keith Maxwell, III (our "Founder") is the owner of a majority of the voting power of our common stock through his ownership of NuDevco Retail, LLC ("NuDevco Retail") and Retailco, LLC ("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 LLC ("NuDevco Retail Holdings"), which is a wholly owned subsidiary of Electric HoldCo, LLC, which is also a wholly owned subsidiary of TxEx. We enter into transactions with and pay certain costs on behalf of affiliates that are commonly controlled by Mr. Maxwell, and these affiliates enter into transactions with and pay certain costs on our behalf. We undertake these transactions 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, certain administrative salaries, management due diligence, recurring management consulting, and accounting, tax, legal, or technology services. Amounts billed under these arrangements are based on services provided, departmental usage, or headcount, which are considered reasonable by management. As such, the accompanying 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 consolidated statements of operations with a corresponding accounts receivable—affiliates or accounts payable—affiliates, respectively, recorded in the 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 consolidated statements of operations with a corresponding accounts receivable—affiliate or accounts payable—affiliate in the consolidated balance sheets. The allocations and related estimates and assumptions are described more fully in Note 15 "Transactions with Affiliates." Cash and Cash Equivalents Cash and cash equivalents consist of all unrestricted demand deposits and funds invested in highly liquid instruments with original maturities of three months or less. The Company periodically assesses the financial condition of the institutions where these funds are held and believes that its credit risk is minimal with respect to these institutions. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company accrues an allowance for doubtful accounts based upon estimated uncollectible accounts receivable considering historical collections, accounts receivable aging analysis, credit risk and other factors. The Company writes off accounts receivable balances against the allowance for doubtful accounts when the accounts receivable is deemed to be uncollectible. Bad debt expense of $10.1 million , $6.6 million and $1.3 million was recorded in general and administrative expense in the consolidated statements of operations for the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company conducts business in many utility service markets where the local regulated utility purchases our receivables, and then becomes responsible for billing the customer and collecting payment from the customer (“POR programs”). This POR service results in substantially all of the Company’s credit risk being linked to the applicable utility, which generally has an investment-grade rating, and not to the end-use customer. The Company monitors the financial condition of each utility and currently believes such amounts are collectible. Trade accounts receivable that are part of a local regulated utility’s POR program are recorded on a gross basis in accounts receivable in the consolidated balance sheets. The discount paid to the local regulated utilities is recorded in general and administrative expense in the consolidated statements of operations. In markets that do not offer POR services or when the Company chooses to directly bill its customers, certain receivables are billed and collected by the Company. The Company bears the credit risk on these accounts and records an appropriate allowance for doubtful accounts to reflect any losses due to non-payment by customers. The Company’s customers are individually insignificant and geographically dispersed in these markets. The Company writes off customer balances when it believes that amounts are no longer collectible and when it has exhausted all means to collect these receivables. Inventory Inventory consists of natural gas used to fulfill and manage seasonality for fixed and variable-price retail customer load requirements and is valued at the lower of weighted average cost or market. Purchased natural gas costs are recognized in the consolidated statements of operations, within retail cost of revenues, when the natural gas is sold and delivered out of the storage facility using the weighted average cost of the gas sold. Customer Acquisition Costs The Company capitalizes direct response advertising costs that consist primarily of hourly and commission-based telemarketing costs, door-to-door agent commissions and other direct advertising costs associated with proven customer generation in its balance sheet. These costs are amortized over the estimated life of a customer. As of December 31, 2018 and 2017 , the net customer acquisition costs were $18.3 million and $29.0 million , of which $14.4 million and $22.1 million were recorded in current assets, and $3.9 million and $6.9 million were recorded in non-current assets. Amortization of customer acquisition costs were $24.4 million , $21.4 million , and $17.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Customer acquisition costs do not include customer acquisitions through merger and acquisition activities, which are recorded as customer relationships. Recoverability of customer acquisition costs is evaluated based on a comparison of the carrying amount of such costs to the future net cash flows expected to be generated by the customers acquired, considering specific assumptions for customer attrition, per unit gross profit, and operating costs. These assumptions are based on forecasts and historical experience. Customer Relationships Customer contracts recorded as part of mergers or acquisitions are reflected as customer relationships in our balance sheet. The Company had capitalized customer relationship of $16.6 million and $18.7 million , net of amortization, as current assets as of December 31, 2018 and 2017 , respectively, and $26.4 million and $34.8 million , net of amortization, as non-current assets as of December 31, 2018 and 2017 , respectively, related to these intangible assets. These intangibles are amortized on a straight-line basis over the estimated average life of the related customer contracts acquired, which ranges from three to six years . The acquired customer relationships intangibles related to Oasis, CenStar, Provider Companies, Major Energy Companies, Perigee Energy LLC, Verde Companies, and HIKO are reflective of the acquired companies’ customer base, and were valued at the respective dates of acquisition 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, fixed assets, and assembled workforce. These future cash flows were then discounted using an appropriate risk-adjusted rate of return by retail unit to arrive at the present value of the expected future cash flows. CenStar, Oasis, Perigee, and HIKO customer relationships are amortized to depreciation and amortization based on the expected future net cash flows by year. The acquired customer relationship intangibles related to the Major Energy Companies, the Provider Companies and the Verde Companies were bifurcated between hedged and unhedged and amortized to depreciation and amortization based on the expected future cash flows by year and expensed to retail cost of revenue based on the expected term of the underlying fixed price contract in each reporting period, respectively. Customer relationship amortization expense was $20.3 million , $17.8 million , and $28.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, of which approximately $(1.2) million , $0.3 million , and $15.8 million was included in retail cost of revenue for those years. We review customer relationships for impairment whenever events or changes in business circumstances indicate the carrying value of the intangible assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by the intangible assets are less than their respective carrying value. If an impairment exists, a loss is recognized for the difference between the fair value and carrying value of the intangible assets. No impairments of customer relationships were recorded for the years ended December 31, 2018 , 2017 and 2016 . Non-compete agreements We capitalize intangible costs associated with non-compete agreements in certain of our acquisitions. Non-compete agreements provide the Company with a certain level of assurance that acquired companies' expected earnings streams will not be disrupted by competition from the companies’ previous owners or members. These non-compete agreements are amortized over their estimated useful life of three years on a straight-line basis. As of December 31, 2018 , the Company had $0.3 million of capitalized costs related to these non-compete agreements, of which $0.3 million was current, and of which zero was non-current. As of December 31, 2017 , the Company had $1.4 million of capitalized costs related to non-compete agreements, of which $1.1 million was current, and of which $0.3 million was non-current. Amortization expense was $1.1 million , $1.2 million and $0.9 million for the years ended December 31, 2018 , 2017 and 2016 . Trademarks We record trademarks as part of our acquisitions which represent the value associated with the recognition and positive reputation of an acquired company to its target markets. This value would otherwise have to be internally developed through significant time and expense or by paying a third party for its use. These intangibles are amortized over the estimated five -year to ten -year life of the trademark on a straight-line basis. The fair values of trademark assets were determined at the date of acquisition using a royalty savings method under the income approach. Under this approach, the Company estimates the present value of expected cash flows resulting from avoiding royalty payments to use a third party trademark. The Company analyzes market royalty rates charged for licensing trademarks and applied an expected royalty rate to a forecast of estimated revenue, which was then discounted using an appropriate risk adjusted rate of return. As of December 31, 2018 and 2017 , we had recorded $7.3 million and $8.6 million related to these trademarks in other assets. Amortization expense was $1.3 million , $0.8 million and $0.4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. We review trademarks for impairment whenever events or changes in business circumstances indicate the carrying value of the intangible assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by the intangible assets are less than their respective carrying value. If an impairment exists, a loss is recognized for the difference between the fair value and carrying value of the intangible assets. No impairments of trademarks were recorded for the years ended December 31, 2018 , 2017 and 2016 . Deferred Financing Costs Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense using the straight-line method over the life of the related long-term debt. These costs are included in other assets in our consolidated balance sheets. Property and Equipment The Company records property and equipment at historical cost. Depreciation expense is recorded on a straight-line method based on estimated useful lives, which range from 2 to 5 years, along with estimates of the salvage values of the assets. When items of property and equipment are sold or otherwise disposed of, any gain or loss is recorded in the consolidated statements of operations. The Company capitalizes costs associated with certain of its internal-use software projects. Costs capitalized are those incurred during the application development stage of projects such as software configuration, coding, installation of hardware and testing. Costs incurred during the preliminary or post-implementation stage of the project are expensed in the period incurred, including costs associated with formulation of ideas and alternatives, training and application maintenance. After internal-use software projects are completed, the associated capitalized costs are depreciated over the estimated useful life of the related asset. Interest costs incurred while developing internal-use software projects are also capitalized. Capitalized interest costs for the years ended December 31, 2018 , 2017 and 2016 were not material. Goodwill Goodwill represents the excess of cost over fair value of the assets of businesses acquired in accordance with FASB ASC Topic 350 Intangibles-Goodwill and Other ("ASC 350"). The goodwill on our consolidated balance sheet as of December 31, 2018 is associated with both our Retail Natural Gas and Retail Electricity segments. We determine our segments, which are also considered our reporting unit, by identifying each unit that engaged in business activities from which it may earn revenues and incur expenses, had operating results regularly reviewed by the segment manager for purposes of resource allocation and performance assessment, and had discrete financial information. Goodwill is not amortized, but rather is assessed for impairment whenever events or circumstances indicate that impairment of the carrying value of goodwill is likely, but no less often than annually as of October 31. We compare our estimate of the fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, we compare the implied fair value of the reporting unit’s goodwill to the carrying value, if any, of that goodwill, the difference of which is recorded as an impairment in the financial statements. In accordance with our accounting policy, we completed our annual assessment of goodwill impairment as of October 31, 2018 during the fourth quarter of 2018, using a qualitative assessment approach, and the test indicated no impairment. Treasury Stock Treasury stock consists of Company's own stock that has been issued, but subsequently reacquired by the Company. Treasury stock does not reduce the number of shares issued but does reduce the number of shares outstanding. These shares are not eligible to receive cash dividends. We use the cost method to account for treasury shares. Equity Method Investments We use the equity method of accounting to account for investments where we have the ability to exercise significant influence over, but not control, the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our share of earnings or losses and distributions. Equity investments are presented on the consolidated balance sheet under "Other assets" and our share of their income is reflected as "Interest and other income" on the consolidated statements of operations. We determine our equity investment earnings using the Hypothetical Liquidation at Book Value (HLBV) method. Under the HLBV method, a calculation is prepared at each balance sheet date to determine the amount the Company would receive if the investee were to liquidate all of its assets, as valued in accordance with U.S. GAAP, and distribute that cash to the investors. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is the Company's share of the earnings or losses from the equity investment for the period. See Note 17 "Equity Method Investment" for further discussion. Revenues and Cost of Revenues Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenues are recognized by the Company when: (1) persuasive evidence of an exchange arrangement exists, (2) delivery has occurred or services have been rendered, (3) the buyer’s price is fixed or determinable and (4) collection is reasonably assured. Utilizing these criteria, revenue is recognized when the natural gas or electricity is delivered to the customer. Similarly, cost of revenues is recognized when the commodity is delivered. Revenues for natural gas and electricity sales are recognized under the accrual method. Natural gas and electricity sales that have been delivered but not billed by period end are estimated. Accrued unbilled revenues are based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated customer usage by class. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class. Estimated amounts are adjusted when actual usage is known and billed. Costs for natural gas and electricity sales are similarly recognized under the accrual method. Natural gas and electricity costs that have not been billed to the Company by suppliers but have been incurred by period end are estimated. The Company estimates volumes for natural gas and electricity delivered based on the forecasted revenue volumes, estimated transportation cost volumes and estimation of other costs associated with retail load that varies by commodity utility territory. These costs include items like ISO fees, ancillary services and renewable energy credits. Estimated amounts are adjusted when actual usage is known and billed. Our asset optimization activities, which primarily include natural gas physical arbitrage and other short term storage and transportation transactions, meet the definition of trading activities and are recorded on a net basis in the consolidated statements of operations in net asset optimization revenues. The Company recorded asset optimization revenues, primarily related to physical sales or purchases of commodities, of $113.7 million , $178.3 million and $133.0 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, and recorded asset optimization costs of revenues of $109.2 million , $179.0 million and $133.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, which are presented on a net basis in asset optimization revenues. Natural Gas Imbalances The consolidated balance sheets include natural gas imbalance receivables and payables, which primarily result when customers consume more or less gas than has been delivered by the Company to local distribution companies (“LDCs”). The settlement of natural gas imbalances varies by LDC, but typically the natural gas imbalances are settled in cash or in kind on a monthly, quarterly, semi-annual or annual basis. The imbalances are valued at their estimated net realizable value. The Company recorded an imbalance receivable of $0.8 million and $0.7 million in other current assets on the consolidated balance sheets as of December 31, 2018 and 2017 , respectively. The Company recorded an imbalance payable of $0.3 million and $1.0 million in other current liabilities on the consolidated balance sheets as of December 31, 2018 and 2017 , respectively. Derivative Instruments The Company uses derivative instruments such as futures, swaps, forwards and options to manage the commodity price risks of its business operations. All derivatives are recorded in the consolidated balance sheets at fair value. Derivative instruments representing unrealized gains are reported as derivative assets while derivative instruments representing unrealized losses are reported as derivative liabilities. We offset amounts in the consolidated balance sheets for derivative instruments executed with the same counterparty where we have a master netting arrangement. As part of our asset optimization activities, we manage a portfolio of commodity derivative instruments held for trading purposes. Changes in fair value of and amounts realized upon settlements of derivatives instruments held for trading purposes are recognized in earnings in net asset optimization revenues. To manage the retail business, the Company holds derivative instruments that are not for trading purposes and are not designated as hedges for accounting purposes. Changes in the fair value of and amounts realized upon settlement of derivative instruments not held for trading purposes are recognized in retail costs of revenues. Income Taxes The Company follows the asset and liability method of accounting for income taxes where deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in those years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized. Amounts owed or refundable on current year returns is included as a current payable or receivable in the consolidated balance sheet. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes on continuing operations in our consolidated statements of operations. Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income attributable to shareholders (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 us. Diluted earnings per share is similarly calculated except that the denominator is increased for potentially dilutive securities. We use the treasury stock method to determine the potential dilutive effect of our outstanding unvested restricted stock units and use the if-converted method to determine the potential dilutive effect of our Class B common stock. Non-controlling Interest Net income attributable to non-controlling interest represents the Class B Common stockholders' interest in income and expenses of the Company. The weighted average ownership percentages for the applicable reporting period are used to allocate the income (loss) before income taxes to each economic interest owner. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Recent Accounting Pronouncements On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers , 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. We adopted the standard utilizing the full retrospective approach, and the adoption had no impact on our total revenues and operating income for the years ended December 31, 2018, 2017 and 2016. The standard requires expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 3 "Revenues" for further disclosure. On January 1, 2018, we adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We utilized ASU 2017-01 in evaluating all acquisitions occurring after the date of adoption. On January 1, 2018, we adopted 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 specific cash flow issues in the statement of cash flows, including contingent consideration payments made after a business combination. We applied this guidance using a retrospective transition method for each period presented. Because of the change in accounting guidance, we reclassified acquisition related payments of approximately $1.8 million and $0.8 million from cash flows from investing activities to cash flows from operating activities for the years ended December 31, 2017 and December 31, 2016, respectively. We reclassified acquisition related payments of approximately $18.4 million and $2.0 million from cash flows from investing activities to cash flows from financing activities for the years ended December 31, 201 |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | 3. Revenues Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenue is measured based upon the quantity of gas or power delivered at prices contained or referenced in the customer's contract, and excludes any sales incentives (e.g. rebates) and amounts collected on behalf of third parties (e.g. sales tax). We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the year ended December 31, 2018 , 2017 and 2016 our retail revenues included gross receipts taxes of $6.9 million , $6.4 million and $3.9 million respectively. During the year ended December 31, 2018 , 2017 and 2016 , our retail cost of revenues included gross receipts taxes of $9.9 million , $9.0 million and $5.3 million , respectively. Our revenues also include asset optimization activities. Asset optimization activities consist primarily of purchases and sales of gas that meet the definition of trading activities per FASB ASC Topic 815, Derivatives and Hedging . They are therefore excluded from the scope of Revenue from Contracts with Customers (Topic 606) . The following is a description of our principal revenue generating activities. Retail Electricity Revenues for electricity sales are recognized under the accrual method when our performance obligation to a customer is satisfied, which is the point in time when the product is delivered and control of the product passes to the customer. Electricity products may be sold as fixed or variable rate products. The typical length of a contract to provide electricity is 12 months. Customers are billed and typically pay at least monthly, based on usage. Electricity sales that have been delivered but not billed by period end are estimated. Accrued unbilled revenues are based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated residential and commercial customer usage. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class (residential or commercial). Estimated amounts are adjusted when actual usage is known and billed. Retail Natural Gas Revenues for natural gas sales are recognized under the accrual method when our performance obligation to a customer is satisfied, which is the point in time when the product is delivered and control of the product passes to the customer. Natural gas products may be sold as fixed-price or variable-price products. The typical length of a contract to provide natural gas is 12 months. Customers are billed and typically pay at least monthly, based on usage. Natural gas sales that have been delivered but not billed by period end are estimated and recorded as accrued unbilled revenues based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated residential and commercial customer usage. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class (residential or commercial). Estimated amounts are adjusted when actual usage is known and billed. The following table discloses revenue by primary geographical market, customer type, and customer credit risk profile (in thousands). The table also includes a reconciliation of the disaggregated revenue to revenue by reportable segment (in thousands). Reportable Segments Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 Retail Electricity Retail Natural Gas Total Reportable Segments Retail Electricity Retail Natural Gas Total Reportable Segments Retail Electricity Retail Natural Gas Total Reportable Segments Primary markets (a) New England $ 395,682 $ 21,221 $ 416,903 $ 229,546 $ 21,196 $ 250,742 $ 115,360 $ 21,758 $ 137,118 Mid-Atlantic 291,046 54,815 345,861 272,127 52,737 324,864 197,511 38,387 235,898 Midwest 73,167 39,894 113,061 59,506 37,792 97,298 45,881 37,318 83,199 Southwest 103,556 22,036 125,592 96,387 29,481 125,868 58,477 32,591 91,068 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 Customer type Commercial $ 355,607 $ 50,156 $ 405,763 $ 195,356 $ 50,424 $ 245,780 $ 119,543 $ 55,347 $ 174,890 Residential 518,261 93,186 611,447 441,580 89,889 531,469 281,537 70,082 351,619 Unbilled revenue (b) (10,417 ) (5,376 ) (15,793 ) 20,630 893 21,523 16,149 4,625 20,774 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 Customer credit risk POR $ 586,901 $ 71,565 $ 658,466 $ 447,581 $ 76,002 $ 523,583 $ 307,836 $ 57,198 $ 365,034 Non-POR 276,550 66,401 342,951 209,985 65,204 275,189 109,393 72,856 182,249 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 (a) The primary markets noted above include the following states: • New England - Connecticut, Maine, Massachusetts, New Hampshire; • Mid-Atlantic - Delaware, Maryland (including the District of Colombia), New Jersey, New York and Pennsylvania; • Midwest - Illinois, Indiana, Michigan and Ohio; and • Southwest - Arizona, California, Colorado, Florida, Nevada, and Texas. (b) Unbilled revenue is recorded in total until it is actualized, at which time it is categorized between commercial and residential customers. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions Acquisition of the Provider Companies In August 2016, we completed the purchase of all of the outstanding membership interests of the Provider Companies for approximately $34.1 million , which included $1.3 million in working capital, subject to adjustments. The acquisition also included an earnout provision of up to $9.0 million , which was initially valued at $4.8 million as of the purchase date, and which was to be paid by June 30, 2017, subject to the achievement of certain performance targets (the "Provider Earnout"). See Note 11 "Fair Value Measurements" for further information on the Provider Earnout. The Provider Companies serve electrical customers in Maine, New Hampshire and Massachusetts. The acquisition of the Provider Companies was accounted for under the acquisition method of accounting. 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, and 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 purchase price allocation for the acquisition of the Provider Companies was finalized as of December 31, 2016 as follows: Final Purchase Price Allocation Cash $ 431 Net working capital, net of cash acquired 812 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 $ 34,066 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 fair value measurement. 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 fair value measurement. See Note 11 "Fair Value Measurements" for further discussion on the fair values hierarchy. The valuation of intangible assets and goodwill are discussed later in this note. The Provider Earnout was settled at $5.5 million in 2017, including interest. The Company’s consolidated statements of operations for the year ended December 31, 2016 included $46.8 million of revenue and $12.8 million of losses from operations related to the operations of the Provider Companies. Acquisition of the Major Energy Companies In August 2016, we completed the purchase 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. The total purchase price was $64.1 million , which included $5.2 million in working capital; 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 NG&E's April 15, 2016 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”). Additionally, the Company was potentially obligated to issue up to 400,000 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, which were valued at $0.8 million as of the purchase date (the "Stock Earnout"). No shares were subsequently issued under the Stock Earnout provisions. See Note 11 "Fair Value Measurements" for further information on the Major Earnout and Stock Earnout. The acquisition of the Major Energy Companies from NG&E was treated as a transfer of interests in entities under common control. Accordingly, the impact from the assets acquired and liabilities assumed were based on those values and results from the date NG&E acquired the Major Energy Companies, which was April 15, 2016. The fair value allocation of the net assets acquired was as follows (in thousands): Final Purchase Price Allocation 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 34,988 Net working capital, net of cash acquired (6,746 ) Fair value of derivative liabilities (7,260 ) Total $ 68,650 In December 2016, certain executives of the Major Energy Companies exercised a change of control provision under employment agreements with the Major Energy Companies. As a result, the Company recorded employment contract termination costs of $4.1 million as of December 31, 2016. The Company paid employment contract termination costs totaling approximately $1.4 million and $2.5 million during the years ended December 31, 2018 and 2017 , respectively, with the remaining costs of $0.2 million recorded as a liability as of December 31, 2018 . The Major Energy Companies contributed revenues of $125.6 million and earnings of $1.3 million to the Company for the year ended December 31, 2016. The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company for 2016 as if the acquisition had occurred on January 1, 2015 (in thousands): Year Ended December 31, 2016 2015 Revenue $603,673 $547,381 Earnings $15,776 $15,460 The pro forma results are not necessarily indicative of our consolidated results of operations that actually would have been realized had the companies operated on a combined basis during the period presented. The revenue and earnings for the twelve months ended December 31, 2016 reflects actual results of operations for the period from April 15, 2016 (the date of NG&E's acquisition) through December 31, 2016, the period the financial results were fully combined. The pro forma results include adjustments 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 purchase price allocation was used to prepare the pro forma adjustments. Acquisition of Perigee In April 2017, we acquired all of the outstanding membership interests of Perigee Energy, LLC, a Texas limited liability company ("Perigee"), with operations across 14 utilities in Connecticut, Delaware, Massachusetts, New York and Ohio from our affiliate, NG&E. The purchase price for Perigee from NG&E was approximately $4.1 million , which consisted of a base price of $2.0 million , $0.2 million additional customer option payment, and $1.9 million in working capital, subject to adjustments. The acquisition was treated as a transfer of equity interests between entities under common control, and accordingly, the assets acquired and liabilities assumed were based on their historical value as of the date. NG&E acquired Perigee, which was on February 3, 2017, and the fair value of the net assets acquired was as follows (in thousands): Final Purchase Price Allocation Cash $ 23 Intangible assets—customer relationships 1,100 Goodwill 1,540 Net working capital, net of cash acquired 2,085 Fair value of derivative liabilities (443 ) Total $ 4,305 The Perigee acquisition did not have a material impact on our financial position or results of operations. Acquisition of Verde In July 2017, we acquired, through our subsidiary CenStar Energy Corp. ("CenStar"), all of the outstanding membership interests and stock in a group of companies (the "Verde Companies") from Verde Energy USA Holdings, LLC (the “Seller”). Total consideration was approximately $90.7 million , of which $20.1 million represented positive net working capital, as adjusted. We also entered into an agreement to pay an additional amount based on achievement by the Verde Companies of certain performance targets over the 18 month period following closing of the acquisition (the "Verde Earnout"). The Verde Earnout was initially valued at $5.4 million . The acquisition of the Verde Companies was accounted for under the acquisition method. 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 based on management's best estimates, and was 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 was as follows (in thousands): December 31, 2017 Adjustments (1) As of December 31, 2018 Cash and restricted cash $ 1,653 $ — $ 1,653 Property and equipment 4,560 — 4,560 Intangible assets—customer relationships 28,700 — 28,700 Intangible assets—trademarks 3,000 — 3,000 Goodwill 39,207 189 39,396 Net working capital, net of cash acquired 19,132 (659 ) 18,473 Deferred tax liability (3,126 ) — (3,126 ) Fair value of derivative liabilities (1,942 ) — (1,942 ) Total $ 91,184 $ (470 ) $ 90,714 (1) Changes to the purchase price allocation in 2018 were due to an agreement to settle the working capital balances with Verde Companies' sellers per the purchase agreement. The Verde Earnout was based on achievement by the Verde Companies of certain performance targets over the 18 month period following the closing of the Verde acquisition. In January 2018, we settled the Verde Earnout by issuing a $5.9 million note payable to the Seller. The Verde Companies contributed revenues of $76.0 million and earnings of $1.2 million to the Company for the year ended December 31, 2017. The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company as if the acquisition had occurred on January 1, 2016 (in thousands): Year Ended December 31, 2017 2016 Revenues $ 868,415 $ 716,696 Earnings $ 18,047 $ 17,860 The pro forma results are not necessarily indicative of our consolidated results of operations that actually would have been realized had the companies operated on a combined basis during the periods presented. The pro forma results above include actual results and costs as well as 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. Our initial purchase price allocation was used to prepare the pro forma adjustments. Acquisition of HIKO In March 2018, we entered into a Membership Interest Purchase Agreement under which we acquired all of the membership interests of HIKO Energy, LLC ("HIKO"), a New York limited liability company, for a total purchase price of $6.0 million in cash, plus working capital. At the time of acquisition, HIKO had a total of approximately 29,000 RCEs located in 42 markets in seven states. The acquisition was accounted for under the acquisition method. Our preliminary allocation of the purchase price was based upon the estimated fair value of the tangible and identified intangible assets acquired and liabilities assumed in the acquisition. The preliminary allocation was made based on management’s best estimates, and supported by independent third-party analyses. The allocation of the purchase consideration is as follows (in thousands): Preliminary Purchase Price Allocation 2018 Adjustments (1) Purchase Price Allocation as of December 31, 2018 Cash and restricted cash $ 309 $ 66 $ 375 Intangible assets—customer relationships 6,205 (174 ) 6,031 Net working capital, net of cash acquired 9,041 (576 ) 8,465 Fair value of derivative liabilities (205 ) — (205 ) Total $ 15,350 $ (684 ) $ 14,666 (1) Changes to the purchase price allocation were due to an agreement to settle the working capital balances with HIKO sellers per the purchase agreement. Our condensed consolidated statements of operations for the twelve months ended December 31, 2018 included $15.3 million of revenue and $3.8 million of net income related to the operations of HIKO. In each of our acquisitions, we evaluate and allocate purchase price based on the following general assumptions. Customer relationships. Acquired customer relationships were reflective of the acquired companies' customer bases, and were valued using an excess earnings method under the income approach. Using this method, we estimated the future cash flows resulting from the existing customer relationships, considering estimated attrition as well as charges for contributory assets, such as net working capital, intangible assets, fixed assets, and any 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. In acquisitions where we acquired commodity contracts that we could match to fixed-price contracts, customer relationships were bifurcated between unhedged and hedged and are being amortized based on the expected term of the underlying fixed-price contract acquired in each reporting period, respectively. Non-compete Agreements. The fair value of non-compete agreements were determined using the differential value approach. Under this approach, we estimated the present value of expected future cash flows of the business with and without the non-compete agreement. The difference in discounted cash flows was then adjusted by probability factors related to the likelihood that those with the non-compete agreements would be successful competitors. Trademarks. The fair value of acquired trademarks is reflective of the value associated with the recognition and reputation of the acquired company to target markets. The fair value of trademarks was valued using a royalty savings method under the income approach. The value was based on the savings we would realize from owning the trademark rather than paying a royalty for the use of that trademark. Under this approach, we estimate the present value of the expected cash flows resulting from avoiding royalty payments to use a third party trademark. In the Verde acquisition, we analyzed market royalty rates charged for licensing trademarks and applied an expected royalty rate to a forecast of estimated revenue, which was then discounted using an appropriate risk adjusted rate of return. 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 acquisitions of the Provider Companies, Verde Companies and Perigee primarily due to the value of their assembled workforce, proprietary sales channels, and/or access to new utility service territories. Goodwill arose on the acquisition of the Major Energy Companies primarily due to the value of the Major Energy Companies brand strength, established vendor relationships and access to new utility service territories. Goodwill recorded in connection with these acquisitions is deductible for income tax purposes because these were acquisitions of all of the assets of the companies. Customer Acquisitions. We also, from time to time, acquire books of customers from affiliated and non-affiliated parties. These acquisitions do not involve an allocation of the purchase price but rather are recorded as customer relationships. Acquisition of customers from Perigee In April 2017, we acquired approximately 44,000 RCEs from the original owner of Perigee. During 2017, we paid $7.5 million for customers transferred. Acquisition from Related Parties In March 2018, we entered into an asset purchase agreement with our affiliate, NG&E, pursuant to which we agreed to acquire up to 50,000 RCEs for a cash purchase price of $250 for each RCE, or up to $12.5 million in the aggregate. These customers began transferring after April 1, 2018 and are located in 24 markets in 8 states. For the year ended December 31, 2018 , we paid NG&E $8.8 million under the terms of the purchase agreement for approximately 35,000 RCEs. We do not anticipate any additional customer transfers or consideration will be paid on this transaction. The acquisition was treated as a transfer of assets between entities under common control, and accordingly, the assets were recorded at NG&E's historical value at the date of transfer, which was $1.7 million . The transaction resulted in $7.1 million recorded in equity as a net distribution to affiliate as of December 31, 2018 . Of the $8.8 million paid to NG&E, $1.7 million was an investing cash outflow and remaining $7.1 million was deemed a distribution to our non-controlling interest and classified as financing activity. Acquisitions of Customer Books In October 2018, we entered into an asset purchase agreement pursuant to which we would acquire up to 60,000 RCEs from Starion Energy Inc., Starion Energy NY Inc. and Starion Energy PA Inc. for a cash purchase price of up to a maximum of $10.7 million . These customers began transferring in December 2018, and are located in our existing markets. As part of the acquisition, we funded an escrow account, the balance of which is reflected as restricted cash in our consolidated balance sheet. As of December 31, 2018 , the balance in the account was $8.6 million , and these funds will be released to the seller as acquired customers transfer from the seller to the Company in accordance with the asset purchase agreement, and any unallocated balance will be returned to the Company once the acquisition is complete. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | 5. Equity Non-controlling Interest We hold an economic interest and are the sole managing member in Spark HoldCo, with affiliates of our Founder and majority shareholder holding the remaining economic interests in Spark HoldCo. As a result, we consolidate the financial position and results of operations of Spark HoldCo and reflect the economic interests owned by these affiliates as a non-controlling interest. The Company and affiliates owned the following economic interests in Spark HoldCo at December 31, 2017 and December 31, 2018 , respectively. The Company Affiliated Owners December 31, 2017 38.12 % 61.88 % December 31, 2018 40.53 % 59.47 % The Spark HoldCo Third Amended and Restated Limited Liability Company Agreement provides that if the Company issues a new share of Class A common stock, par value $0.01 per share (the "Class A common stock"), Series A Preferred Stock (as defined below), or other equity security of the Company (other than shares of Class B common stock, par value $0.01 per share ("Class B common stock"), and excluding issuances of Class A common stock upon an exchange of Class B common stock or Series A Preferred Stock), Spark HoldCo will concurrently issue a corresponding 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, Series A Preferred Stock or such other equity security. As a result, the number of Spark HoldCo units held by the Company always equals the number of shares of Class A common stock, Series A Preferred Stock or such other equity securities of the Company outstanding. Each share of Class B common stock 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. We adjust the balances in additional paid in capital and non-controlling interest in our consolidated statements of stockholders’ equity and our balance sheet at the end of each balance sheet period to reflect the amounts the respective owners of our Class A and Class B common stock would receive if the assets of our subsidiary, Spark HoldCo were sold, and the liabilities were settled at their recorded book values as of each respective balance sheet date. These adjustments for changes in ownership interests do not impact the manner in which income is allocated or the manner in which distributions are paid to Class A or Class B shareholders. The Class B holders 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, Class B holders have the right, under certain circumstances, to cause the Company to register the offer and resale of such owners' shares of Class A common stock obtained pursuant to the Exchange Right. The following table summarizes the portion of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands): 2018 2017 2016 Net (loss) income allocated to non-controlling interest $ (12,140 ) $ 55,068 $ 52,300 Income tax expense (benefit) allocated to non-controlling interest 1,066 (731 ) 1,071 Net (loss) income attributable to non-controlling interest $ (13,206 ) $ 55,799 $ 51,229 Stock Split In May 2017, the Company authorized and approved a two -for-one stock split of the Company's issued Class A common stock and Class B common stock, which was effected through a stock dividend (the "Stock Split"). Shareholders of record at the close of business on June 5, 2017 were issued one additional share of Class A common stock or Class B common stock of the Company for each share of Class A common stock or Class B common stock, respectively, held by such shareholder on that date. Such additional shares of Class A common stock or Class B common stock were distributed on June 16, 2017. All shares and per share amounts in this report have been retrospectively restated to reflect the Stock Split. Issuance of Class A Common Stock Upon Vesting of Restricted Stock Units For the years ended December 31, 2018 , 2017 , and 2016 , 394,243 , 356,014 , and 395,056 , respectively of restricted stock units vested, with 258,076 , 241,965 , and 305,872 , respectively of shares of common stock distributed to the holders of these units. Differences between shares vested and issued were a result of 136,167 , 114,049 , and 89,184 shares of common stock withheld by the Company to cover taxes owed on the vesting of such units. Conversion of Class B Common Stock to Class A Common Stock In 2018 and 2016, holders of Class B common stock exchanged 685,126 and 6,450,000 respectively, of their 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. Dividends on Class A Common Stock During the years ended December 31, 2018 , 2017 , and 2016 , we paid dividends on our Class A Common Stock of $9.8 million , $9.5 million , and $8.4 million . This dividend represented an annual rate of $0.725 per share on each share of Class A common stock. On January 17, 2019, the Company declared a dividend of $0.18125 per share to holders of record of our Class A common stock on March 1, 2019 and payable on March 15, 2019. Issuance of Class B Common Stock In August 2016, the Company issued 1,399,484 shares of Class B common stock to an affiliate in connection with the acquisition of the Provider Companies and also issued 4,000,000 shares of Class B common stock to the affiliate in connection with the acquisition of Major Energy Companies. Preferred Stock The Company has 20,000,000 shares of authorized preferred stock for which there are 3,707,256 and 1,704,339 issued and outstanding shares at December 31, 2018 and 2017 . See Note 6 "Preferred Stock" for a further discussion of preferred stock. Conversion of CenStar and Oasis Notes In January 2017, several notes issued in connection with our acquisitions of CenStar and Oasis in 2016 were converted into 1,035,642 shares of Class B common stock (and related Spark HoldCo units). Refer to Note 10 "Debt" 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 interests. Diluted earnings per share is similarly calculated except that the denominator is increased by potentially dilutive securities. The following table presents the computation of basic and diluted (loss) earnings per share for the years ended December 31, 2018 , 2017 , and 2016 (in thousands, except per share data): Year Ended December 31, 2018 2017 2016 Net income attributable to Spark Energy, Inc. stockholders $ (1,186 ) $ 19,245 $ 14,444 Less: Dividend on Series A preferred stock 8,109 3,038 — Net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,444 Basic weighted average Class A common shares outstanding 13,390 13,143 11,402 Basic (loss) earnings per share attributable to stockholders $ (0.69 ) $ 1.23 $ 1.27 Net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,444 Effect of conversion of Class B common stock to shares of Class A common stock — — — 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 (1) — — (310 ) Diluted net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,134 Basic weighted average Class A common shares outstanding 13,390 13,143 11,402 Effect of dilutive Class B common stock — — — 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 — — 1,010 Effect of dilutive restricted stock units — 203 278 Diluted weighted average shares outstanding 13,390 13,346 12,690 Diluted (loss) earnings per share attributable to stockholders $ (0.69 ) $ 1.21 $ 1.11 (1) The CenStar Note and Oasis Note converted into 269,462 and 766,180 shares of Class B common stock on January 8, 2017, and January 31, 2017, respectively. The computation of diluted earnings per share for the year ended December 31, 2018 excludes 20.8 million shares of Class B common stock and 0.9 million restricted stock units because the effect of their conversion was antidilutive. The Company's outstanding shares of Series A Preferred Stock were not included in the calculation of diluted earnings per share because they contain only contingent redemption provisions which have not occurred. Variable Interest Entity Spark HoldCo is a variable interest entity due to its lack of rights to participate in significant financial and operating decisions and its inability to dissolve or otherwise remove its management. Spark HoldCo owns all of the outstanding membership interests in each of our operating subsidiaries. We are the sole managing member of Spark HoldCo, manage Spark HoldCo's operating subsidiaries through this managing membership interest, and are considered the primary beneficiary of Spark HoldCo. The assets of Spark HoldCo cannot be used to settle our obligations except through distributions to us, and the liabilities of Spark HoldCo cannot be settled by us 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 our consolidated balance sheet as of December 31, 2018 (in thousands): December 31, 2018 December 31, 2017 Assets Current assets: Cash and cash equivalents $ 36,724 $ 29,385 Accounts receivable 150,866 158,814 Other current assets 92,963 105,165 Total current assets 280,553 293,364 Non-current assets: Goodwill 120,343 120,154 Other assets 47,159 62,552 Total non-current assets 167,502 182,706 Total Assets $ 448,055 $ 476,070 Liabilities Current liabilities: Accounts Payable and Accrued Liabilities $ 122,497 $ 110,152 Current portion of Senior Credit Facility — 7,500 Contingent consideration 1,328 4,024 Other current liabilities 16,525 8,933 Total current liabilities 140,350 130,609 Long-term liabilities: Long-term portion of Senior Credit Facility 129,500 117,750 Subordinated debt—affiliate 10,000 — Contingent consideration — 626 Other long-term liabilities 319 663 Total long-term liabilities 139,819 119,039 Total Liabilities $ 280,169 $ 249,648 |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Preferred Stock | 6. Preferred Stock In March 2017, we issued 1,610,000 shares of 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock ("Series A Preferred Stock"), par value $0.01 per share and having a liquidation preference $25.00 per share, plus accumulated and unpaid dividends, at a price to the public of $25.00 per share ( $24.21 per share to us, net of underwriting discounts and commissions). We received approximately $39.0 million in net proceeds from the offering, after deducting underwriting discounts and commissions and a structuring fee. Offering expenses of $1.0 million were recorded as a reduction to the carrying value of the Series A Preferred Stock. In July 2017, we entered into an At-the-Market Issuance Sales Agreement ("the ATM Agreement") with FBR Capital Markets & Co. as sales agent (the "Agent"). Pursuant to the terms of the ATM Agreement, we may sell, from time to time through the Agent, our Series A Preferred Stock, having an aggregate offering price of up to $50.0 million . During the year ended December 31, 2017, we issued an aggregate of 94,339 shares of Series A Preferred Stock under the ATM Agreement. We received net proceeds of $2.4 million and paid compensation to the sales agent of less than $0.1 million with respect to these sales. During the year ended December 31, 2018 , we issued an aggregate of 2,917 shares of Series A Preferred Stock under the ATM Agreement. We received net proceeds of $0.1 million and paid compensation to the sales agent of less than $0.1 million with respect to these sales. In January 2018, we issued 2,000,000 shares of Series A Preferred Stock, plus accumulated and unpaid dividends, at a price to the public of $25.25 per share ( $24.45 per share, net of underwriting discounts and commissions). The Company received approximately $48.9 million in net proceeds from the offering, after deducting underwriting discounts and commissions and a structuring fee. Offering expenses of $0.5 million were recorded as a reduction to the carrying value of the Series A Preferred Stock. Holders of the Series A Preferred Stock have no voting rights, except in specific circumstances of delisting or in the case the dividends are in arrears as specified in the Series A Preferred Stock Certificate of Designations. The Series A Preferred Stock accrue dividends at an annual percentage rate of 8.75% , and the liquidation preference provisions of the Series A Preferred Stock are considered contingent redemption provisions because there are rights granted to the holders of the Series A Preferred Stock that are not solely within our control upon a change in control of the Company. Accordingly, the Series A Preferred Stock is presented between liabilities and the equity sections in the accompanying consolidated balance sheet. During the year ended December 31, 2018 , the Company paid $7.0 million in dividends to holders of the Series A Preferred Stock and had accrued $2.0 million related to dividends to holders of the Series A Preferred Stock at December 31, 2018 , which were paid on January 15, 2019 . During the year ended December 31, 2017 , the Company paid $2.1 million in dividends to holders of the Series A Preferred Stock and had accrued $0.9 million as of December 31, 2017 . On January 17, 2019, the Company declared a quarterly cash dividend in the amount of $0.546875 per share of Series A Preferred Stock. This amount represents an annualized dividend of $2.1875 per share. The dividend will be paid on April 15, 2019 to holders of record on April 1, 2019 of the Series A Preferred Stock. A summary of our preferred equity balance for the years ended December 31, 2018 and 2017 is as follows: (in thousands) Balance at December 31, 2016 $ — Issuance of Series A Preferred Stock, net of issuance cost 40,241 Accumulated dividends on Series A Preferred Stock 932 Balance at December 31, 2017 $ 41,173 Issuance of Series A Preferred Stock, net of issuance cost 48,490 Accumulated dividends on Series A Preferred Stock 1,095 Balance at December 31, 2018 $ 90,758 In connection with the issuance of the Series A Preferred Stock, the Company and Spark HoldCo entered into the Third Amended and Restated Spark HoldCo Limited Liability Company Agreement to amend the prior agreement to provide for, among other things, the designation and issuance of Spark HoldCo Series A preferred units, as another equity security of Spark HoldCo to be issued concurrently with the issuance of Series A Preferred Stock by us, including specific terms relating to distributions by Spark HoldCo in connection with the payment by us of dividends on the Series A Preferred Stock, the priority of liquidating distributions by Spark HoldCo, the allocation of income and loss to us in connection with distributions by Spark HoldCo on Series A preferred units, and other terms relating to the redemption and conversion by us of the Series A Preferred Stock. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 7. Derivative Instruments We are exposed to the impact of market fluctuations in the price of electricity and natural gas, basis differences in the price of natural gas, storage charges, RECs, capacity charges from independent system operators, and other ancillary costs. We use derivative instruments in an effort to manage our cash flow exposure to these risks. These instruments are not designated as hedges for accounting purposes, and accordingly, changes in the market value of these derivative instruments are recorded in the cost of revenues. As part of our strategy to optimize pricing in our natural gas related activities, we also manage a portfolio of commodity derivative instruments held for trading purposes. Our commodity trading activities are subject to limits within our 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 our consolidated balance sheets when the derivative instruments are executed with the same counterparty under a master netting arrangement. Our 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 third parties. To the extent we have 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 December 31, 2018 and 2017 , we had paid zero and $0.1 million in collateral, respectively. The specific types of derivative instruments we may execute to manage the commodity price risk include the following: • Forward contracts, which commit us 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 for which we made a normal purchase, normal sale election 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. Volumes Underlying Derivative Transactions The following table summarizes the net notional volumes of our open derivative financial instruments accounted for at fair value, broken out by commodity. Positive amounts represent net buys while bracketed amounts are net sell transactions (in thousands): Non-trading Commodity Notional December 31, 2018 December 31, 2017 Natural Gas MMBtu 8,176 9,191 Natural Gas Basis MMBtu 115 — Electricity MWh 6,781 8,091 Trading Commodity Notional December 31, 2018 December 31, 2017 Natural Gas MMBtu 188 26 Natural Gas Basis MMBtu (380 ) (225 ) 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): Year Ended December 31, 2018 2017 2016 (Loss) gain on non-trading derivatives, net (19,571 ) 5,588 22,254 Gain (loss) on trading derivatives, net 1,401 (580 ) 153 (Loss) gain on derivatives, net $ (18,170 ) $ 5,008 $ 22,407 Current period settlements on non-trading derivatives (1) (9,614 ) 16,508 (2,284 ) Current period settlements on trading derivatives (973 ) (199 ) 138 Total current period settlements on derivatives (1) $ (10,587 ) $ 16,309 $ (2,146 ) (1) Excludes settlements of $(0.3) million , $3.4 million and $26.6 million , respectively, for the years ended December 31, 2018 , 2017 , and 2016 related to non-trading derivative liabilities assumed in various acquisitions. 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 cost of revenues on the consolidated statements of operations. Fair Value of Derivative Instruments The following tables summarize the fair value and offsetting amounts of our derivative instruments by counterparty and collateral received or paid (in thousands): December 31, 2018 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 18,649 $ (12,000 ) $ 6,649 $ — $ 6,649 Trading commodity derivatives 734 (94 ) 640 — 640 Total Current Derivative Assets 19,383 (12,094 ) 7,289 — 7,289 Non-trading commodity derivatives 9,657 (6,381 ) 3,276 — 3,276 Trading commodity derivatives — — — — — Total Non-current Derivative Assets 9,657 (6,381 ) 3,276 — 3,276 Total Derivative Assets $ 29,040 $ (18,475 ) $ 10,565 $ — $ 10,565 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (21,391 ) $ 15,385 $ (6,006 ) $ — $ (6,006 ) Trading commodity derivatives (491 ) 19 (472 ) — (472 ) Total Current Derivative Liabilities (21,882 ) 15,404 (6,478 ) — (6,478 ) Non-trading commodity derivatives (71 ) 40 (31 ) (31 ) Trading commodity derivatives (135 ) 60 (75 ) — (75 ) Total Non-current Derivative Liabilities (206 ) 100 (106 ) — (106 ) Total Derivative Liabilities $ (22,088 ) $ 15,504 $ (6,584 ) $ — $ (6,584 ) December 31, 2017 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 60,167 $ (29,432 ) $ 30,735 $ — $ 30,735 Trading commodity derivatives 918 (462 ) 456 — 456 Total Current Derivative Assets 61,085 (29,894 ) 31,191 — 31,191 Non-trading commodity derivatives 16,055 (12,746 ) 3,309 — 3,309 Trading commodity derivatives — — — — — Total Non-current Derivative Assets 16,055 (12,746 ) 3,309 — 3,309 Total Derivative Assets $ 77,140 $ (42,640 ) $ 34,500 $ — $ 34,500 Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (4,517 ) $ 3,059 $ (1,458 ) $ 65 $ (1,393 ) Trading commodity derivatives (517 ) 273 (244 ) — (244 ) Total Current Derivative Liabilities (5,034 ) 3,332 (1,702 ) 65 (1,637 ) Non-trading commodity derivatives (676 ) 732 56 — 56 Trading commodity derivatives (566 ) 18 (548 ) — (548 ) Total Non-current Derivative Liabilities (1,242 ) 750 (492 ) — (492 ) Total Derivative Liabilities $ (6,276 ) $ 4,082 $ (2,194 ) $ 65 $ (2,129 ) Interest Rate Swaps During the year ended December 31, 2018 , we entered into two interest rate swap agreements to manage interest rate risk. The interest rate swap agreements were not designated as hedges for accounting purposes. As such, all changes in fair value were recognized in earnings, within interest and other income. As of December 31, 2018 , the notional amount of the interest swap was $10.0 million . A fair value liability of less than $0.1 million was recorded in other current liabilities on the condensed consolidated balance sheet as of December 31, 2018 . |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 8. Property and Equipment Property and equipment consist of the following amounts (in thousands): Estimated December 31, 2018 December 31, 2017 Information technology 2 – 5 $ 34,611 $ 34,103 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,964 1,964 Building improvements 2 – 5 268 809 Total 41,411 41,444 Accumulated depreciation (37,045 ) (33,169 ) Property and equipment—net $ 4,366 $ 8,275 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 December 31, 2018 and 2017 , information technology includes $0.3 million and $1.2 million , respectively, of costs associated with assets not yet placed into service. Depreciation expense recorded in the consolidated statements of operations was $3.9 million , $2.6 million and $2.1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 9. Intangible Assets Goodwill, customer relationships and trademarks consist of the following amounts (in thousands): December 31, 2018 December 31, 2017 Goodwill $ 120,343 $ 120,154 Customer Relationships — Acquired Cost $ 99,402 $ 93,371 Accumulated amortization (63,208 ) (46,681 ) Customer Relationships —Acquired & Non-Compete Agreements, net $ 36,194 $ 46,690 Customer Relationships —Other Cost $ 16,155 $ 12,336 Accumulated amortization (9,290 ) (5,534 ) Customer Relationships —Other, net $ 6,865 $ 6,802 Trademarks Cost $ 9,770 $ 9,770 Accumulated amortization (2,483 ) (1,212 ) Trademarks, net $ 7,287 $ 8,558 Changes in goodwill, customer relationships (including non-compete agreements) and trademarks consisted of the following (in thousands): Goodwill Customer Relationships— Acquired & Non-Compete Agreements Customer Relationships — Other Trademarks Balance at December 31, 2015 $ 18,379 $ 10,380 $ 3,049 $ 1,194 Acquisition of Provider Companies 26,040 24,417 — 529 Acquisition of Major Energy Companies 34,728 24,271 — 4,973 Amortization expense — (27,157 ) (1,437 ) (357 ) Balance at December 31, 2016 $ 79,147 $ 31,911 $ 1,612 $ 6,339 Adjustments (1) $ 260 $ — $ — $ — Acquisition of Perigee 1,540 1,100 — — Acquisition of Verde 39,207 28,700 — 3,000 Additions (Other) — — 8,016 — Amortization expense — (15,021 ) (2,826 ) (781 ) Balance at December 31, 2017 $ 120,154 $ 46,690 $ 6,802 $ 8,558 Additions — 6,205 3,818 — Adjustments (1) 189 (174 ) — — Amortization — (16,527 ) (3,755 ) (1,271 ) Balance at December 31, 2018 $ 120,343 $ 36,194 $ 6,865 $ 7,287 (1) Related to working capital adjustments on various acquisitions. The acquired customer relationship intangibles related to Major Energy Companies, the Provider Companies, and the Verde Companies were bifurcated between hedged and unhedged customer contracts. The unhedged customer contracts are amortized to depreciation and amortization based on the expected future cash flows by year. The hedged customer contracts were evaluated for favorable or unfavorable positions at the time of acquisition and amortized to retail cost of revenue based on the expected term and position of the underlying fixed price contract in each reporting period. For the years ended December 31, 2018 , 2017 , and 2016 , respectively, approximately $(1.2) million , $0.3 million , and $15.8 million of the $16.5 million , $15.0 million , and $27.2 million acquired customer relationship amortization expense is included in the cost of revenues. Estimated future amortization expense for customer relationships and trademarks at December 31, 2018 is as follows (in thousands): Year Ending December 31, 2019 $ 18,133 2020 12,257 2021 10,682 2022 5,780 2023 450 > 5 years 3,044 Total $ 50,346 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt Debt consists of the following amounts as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Current: Senior Credit Facility—Bridge Loan (1) $ — $ 7,500 Note Payable—Verde 6,936 13,443 Total current portion of debt 6,936 20,943 Long-term debt: Senior Credit Facility (1) (2) 129,500 117,750 Subordinated Debt 10,000 — Note Payable—Verde — 7,051 Total long-term debt 139,500 124,801 Total debt $ 146,436 $ 145,744 (1) As of December 31, 2018 and 2017 , the weighted average interest rate on the Senior Credit Facility was 5.48% and 4.61% , respectively. (2) As of December 31, 2018 and 2017 , we had $49.4 million and $47.2 million in letters of credit issued, respectively. Capitalized financing costs associated with our Senior Credit Facility were $1.4 million and $1.6 million as of December 31, 2018 and 2017 , respectively. Of these amounts, $1.0 million and $1.2 million are recorded in other current assets, and $0.4 million and $0.4 million are recorded in other non-current assets in the consolidated balance sheets as of December 31, 2018 and 2017 , respectively. Interest expense consists of the following components for the periods indicated (in thousands): Years Ended December 31, 2018 2017 2016 Senior Credit Facility $ 5,300 $ 3,275 $ 1,730 Accretion related to Earnouts — 4,108 5,060 Letters of credit fees and commitment fees 1,604 1,125 883 Amortization of deferred financing costs 1,291 1,035 668 Convertible subordinated notes to affiliate — 1,052 518 Subordinated debt 26 167 — Verde promissory note 1,189 372 — Interest expense $ 9,410 $ 11,134 $ 8,859 Senior Credit Facility The Company, as guarantor, and Spark HoldCo (the “Borrower” and, together with each subsidiary of Spark HoldCo (“Co-Borrowers”) maintains a senior secured borrowing base credit facility (as amended, “Senior Credit Facility”) that allowed us to borrow up to $192.5 million as of December 31, 2018 . Subject to applicable sublimits and terms of the Senior Credit Facility, as amended, borrowings are available for the issuance of letters of credit (“Letters of Credit”), working capital and general purpose revolving credit loans (“Working Capital Loans”), and bridge loans (“Bridge Loans”) for the purpose of partial funding for acquisitions. Borrowings under the Senior Credit Facility may be used to pay fees and expenses in connection with the Senior Credit Facility, finance ongoing working capital requirements and general corporate purpose requirements of the Co-Borrowers, to provide partial funding for acquisitions, as allowed under terms of the Senior Credit Facility, and to make open market purchases of our Class A common stock and Series A Preferred Stock. As of December 31, 2018 , we had $129.5 million outstanding under the Senior Credit Facility, as well as $49.4 million of outstanding letters of credit. The Senior Credit Facility will mature on May 19, 2020, and all amounts outstanding thereunder will be payable on the maturity date. Borrowings under the Bridge Loan sublimit, if any, will be repaid 25% per year on a quarterly basis (or 6.25% per quarter), with the remainder due at maturity. As of December 31, 2018 , there was zero in Bridge Loans outstanding. At our election, the interest rate for Working Capital Loans and Letters of Credit under the Senior Credit Facility is generally determined by reference to the Eurodollar rate plus an applicable margin of up to 3.00% per annum (based on the prevailing utilization) or an alternate base rate plus an applicable margin of up to 2.00% per annum (based on the prevailing utilization). The alternate base rate is equal to the highest of (i) the prime rate (as published in the Wall Street Journal), (ii) the federal funds rate plus 0.50% per annum, or (iii) the reference Eurodollar rate plus 1.00% . Bridge Loan borrowings, if any, under the Senior Credit Facility are generally determined by reference to the Eurodollar rate plus an applicable margin of 3.75% per annum or an alternate base rate plus an applicable margin of 2.75% per annum. The alternate base rate is equal to the highest of (i) the prime rate (as published in the Wall Street Journal), (ii) the federal funds rate plus 0.50% per annum, or (iii) the reference Eurodollar rate plus 1.00% . The Co-Borrowers pay a commitment fee of 0.50% quarterly in arrears on the unused portion of the Senior Credit Facility. In addition, the Co-Borrowers are subject to additional fees including an upfront fee, an annual agency fee, and letter of credit fees based on a percentage of the face amount of letters of credit payable to any syndicate member that issues a letter of credit. The Senior Credit Facility contains covenants that, among other things, require the maintenance of specified ratios or conditions including: • Minimum Fixed Charge Coverage Ratio . We must maintain a minimum fixed charge coverage ratio of not less than 1.25 to 1.00. The Fixed Charge Coverage Ratio is defined as the ratio of (a) Adjusted EBITDA to (b) the sum of consolidated (with respect to the Company and the Co-Borrowers) interest expense (other than interest paid-in-kind in respect of certain subordinated debt but including interest in respect of that certain promissory note made by CenStar in connection with the permitted acquisition from Verde Energy USA Holdings, LLC, letter of credit fees, commitment fees, acquisition earn-out payments (excluding earnout payments funded with proceeds from newly issued preferred or common equity), distributions, the aggregate amount of repurchases of our Class A common stock, Series A Preferred Stock, or commitments for such purchases, taxes and scheduled amortization payments. • Maximum Total Leverage Ratio . We must maintain a ratio of total indebtedness (excluding eligible subordinated debt and letter of credit obligations) to Adjusted EBITDA of no more than 2.50 to 1.00. • Maximum Senior Secured Leverage Ratio . We must maintain a Senior Secured Leverage Ratio of no more than 1.85 to 1.00. The Senior Secured Leverage Ratio is defined as the ratio of (a) all indebtedness of the loan parties on a consolidated basis that is secured by a lien on any property of any loan party (including the effective amount of all loans then outstanding (but, in any case, limited to 50% of the effective amount of letter of credit obligations attributable to performance standby letters of credit) but excluding subordinated debt permitted by the Credit Agreement as amended) to (b) Adjusted EBITDA. The Senior Credit Facility contains various negative covenants that limit our ability to, among other things, incur certain additional indebtedness, grant certain liens, engage in certain asset dispositions, merge or consolidate, make certain payments, distributions, investments, acquisitions or loans, materially modify certain agreements, or enter into transactions with affiliates. The Senior Credit Facility also contains affirmative covenants that are customary for credit facilities of this type. As of December 31, 2018 , we are in compliance with our various covenants under the Senior Credit Facility. The Senior Credit Facility is secured by pledges of the equity of the portion of Spark HoldCo owned by us, the equity of Spark HoldCo’s subsidiaries, the Co-Borrowers’ present and future subsidiaries, and substantially 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. We are entitled to pay cash dividends to the holders of the Series A Preferred Stock and Class A common stock and will be entitled to repurchase up to an aggregate amount of 10,000,000 shares of our Class A common stock, and up to $92.7 million of Series A Preferred Stock through one or more normal course open market purchases through NASDAQ so long as: (a) no default exists or would result therefrom; (b) the Co-Borrowers are in pro forma compliance with all financial covenants before and after giving effect thereto; and (c) the outstanding amount of all loans and letters of credit does not exceed the borrowing base limits. 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, 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, failure of Nathan Kroeker to retain his position as President and Chief Executive Officer of the Company, and failure of W. Keith Maxwell III to retain his position as chairman of the board of directors. A default will also occur if at any time W. Keith Maxwell III ceases to, directly or indirectly, own at least 13,600,000 Class A and Class B shares on a combined basis (to be adjusted for any stock split, subdivisions or other stock reclassification or recapitalization), and a controlling percentage of the voting equity interest of the Company, and certain other changes in 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. On January 28, 2019, the Company and Co-Borrowers exercised the accordion feature in the Senior Credit Facility, bringing total commitments under the Senior Credit Facility to $217.5 million . Prior to May of 2017, the Company and its then subsidiaries were party to a senior secured revolving credit facility (“Prior Senior Credit Facility”), which included 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. The outstanding balances under the Working Capital Line and the Acquisition Line were paid in full upon execution of the Company's new Senior Credit Facility in May 2017. Convertible Subordinated Notes to Affiliate In connection with the financing of the CenStar and Oasis acquisitions, the Company issued Notes totaling $7.1 million , at an annual interest rate of 5% , payable semiannually. In October 2016, these Notes were converted into 1,035,642 shares of Class B common stock. Subordinated Debt Facility The Company maintains a subordinated note in the principal amount of up to $25.0 million with a company owned by our Founder. The subordinated note allows us to draw advances in increments of no less than $1.0 million per advance up to the maximum principal amount of the subordinated note. The subordinated note matures in July 2020, and advances thereunder accrue interest at 5% per annum from the date of the advance. We have the right to capitalize interest payments under the subordinated note. The subordinated note is subordinated in certain respects to our Senior Credit Facility pursuant to a subordination agreement. We may pay interest and prepay principal on the subordinated note so long as we are in compliance with the covenants under our Senior Credit Facility, are not in default under the Senior Credit Facility and have minimum availability of $5.0 million under the borrowing base under the Senior Credit Facility. Payment of principal and interest under the subordinated note is accelerated upon the occurrence of certain change of control or sale transactions. As of December 31, 2018 , there was $10.0 million outstanding under the subordinated note, which was repaid in January 2019. No amounts were outstanding at December 31, 2017 . Verde Promissory Notes In connection with the acquisition of the Verde Companies, in July 2017, we entered into a promissory note in the aggregate principal amount of $20.0 million (the "Verde Promissory Note"). The Verde Promissory Note required repayment in 18 monthly installments beginning in August 2017, and accrued interest at 5% per annum from the date of issuance. The Verde Promissory Note, including principal and interest, was unsecured, but is guaranteed by us. In January 2018, in connection with the Earnout Termination Agreement (defined below), we issued to the seller of the Verde Companies an amended and restated promissory note (the “Amended and Restated Verde Promissory Note”), which amended and restated the Verde Promissory Note. The Amended and Restated Verde Promissory Note matures in January 2019, and bears interest at a rate of 9% per annum. Principal and interest are payable monthly on the first day of each month, with a portion of each payment going into an escrow account, which serves as security for certain indemnification claims and obligations under the Verde purchase agreement. As of December 31, 2018 and 2017 , there was $1.0 million and $14.6 million outstanding, respectively, under the Amended and Restated Verde Promissory notes. In January 2018, we issued a promissory note in the principal amount of $5.9 million in connection with an agreement to terminate the earnout obligations arising in connection with our acquisition of the Verde Companies (the “Verde Earnout Termination Note”). The Verde Earnout Termination Note matures on June 30, 2019 (subject to early maturity upon certain events) and bears interest at a rate of 9% per annum. We are permitted to withhold amounts otherwise due at maturity related to certain indemnifiable matters. Interest is payable monthly on the first day of each month. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements 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 the credit standing of counterparties involved and the impact of credit enhancements. We apply fair value measurements to our commodity derivative instruments and contingent payment arrangements based on the following fair value hierarchy, which prioritizes the inputs to the 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 our 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. These levels can change over time. 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. Other Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities recorded in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these items. The carrying amounts of the Senior Credit Facility recorded in the condensed consolidated balance sheets approximates fair value because of the variable rate nature of interest on the borrowings thereunder, and are considered Level 2 measurements because interest rates charged are similar to other financial instruments with similar terms and maturities. The fair value of our convertible subordinated notes to affiliates and the payable pursuant to tax receivable agreement—affiliate is not determinable for accounting purposes due to the affiliated nature and terms of the associated agreements with the affiliate. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present assets and liabilities measured and recorded at fair value in our consolidated balance sheets on a recurring basis by and their level within the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total December 31, 2018 Non-trading commodity derivative assets $ 104 $ 9,821 $ — $ 9,925 Trading commodity derivative assets 44 596 — 640 Total commodity derivative assets $ 148 $ 10,417 $ — $ 10,565 Non-trading commodity derivative liabilities $ (352 ) $ (5,685 ) $ — $ (6,037 ) Trading commodity derivative liabilities (75 ) (472 ) — (547 ) Total commodity derivative liabilities $ (427 ) $ (6,157 ) $ — $ (6,584 ) Contingent payment arrangement $ — $ — $ 1,328 $ 1,328 Level 1 Level 2 Level 3 Total December 31, 2017 Non-trading commodity derivative assets $ 158 $ 33,886 $ — $ 34,044 Trading commodity derivative assets — 456 — 456 Total commodity derivative assets $ 158 $ 34,342 $ — $ 34,500 Non-trading commodity derivative liabilities $ (387 ) $ (950 ) $ — $ (1,337 ) Trading commodity derivative liabilities (555 ) (237 ) — (792 ) Total commodity derivative liabilities $ (942 ) $ (1,187 ) $ — $ (2,129 ) Contingent payment arrangement $ — $ — $ (4,650 ) $ (4,650 ) We had no transfers of assets or liabilities between any of the above levels during the years ended December 31, 2018 , 2017 and 2016 . Our derivative contracts include exchange-traded contracts valued utilizing readily available quoted market prices and non-exch ange-traded contra cts valued using market price quotations available through brokers or over-the-counter and on-line exchanges. In addition, in determining the fair value of our derivative contracts, we apply a credit risk valuation adjustment to reflect credit risk, which is calculated based on our or the counterparty’s historical credit risks. As of December 31, 2018 and 2017 , the credit risk valuation adjustment was not material. The contingent payment arrangements referred to above reflect estimated earnout obligations incurred in relation to our acquisition of the Major Energy Companies in 2016. Contingent Payment Arrangements The following tables present a roll forward of our contingent payment arrangements, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Major Earnout and Stock Earnout Provider Earnout Verde Earnout Total Fair Value at December 31, 2016 $ 17,760 $ 4,893 $ — $ 22,653 Purchase price consideration $ — $ — $ 5,400 $ 5,400 Change in fair value of contingent consideration, net (9,555 ) 500 347 (8,708 ) Accretion of contingent earnout consideration (included within interest expense) 3,848 107 153 4,108 Payments and settlements (1) (7,403 ) (5,500 ) (5,900 ) (18,803 ) Fair Value at December 31, 2017 $ 4,650 $ — $ — $ 4,650 Change in fair value of contingent consideration, net $ (1,715 ) $ — $ — $ (1,715 ) Payments and settlements (1,607 ) — — (1,607 ) Fair Value at December 31, 2018 $ 1,328 $ — $ — $ 1,328 (1) Payments and settlements include pay downs at maturity and the termination of the Verde Earnout liability, which was replaced with the Verde Earnout Termination Note. See discussion above and in Note 10 "Debt." The Major Earnout is based on the achievement by the Major Energy Companies of certain performance targets over a 33 month period following the date our affiliate acquired the Major Energy Companies and ended on December 31, 2018 . Under the Earnout provisions, the previous members of Major Energy Companies were 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 was 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 earned such maximum Major Earnout payments, NG&E would be entitled to additional consideration up to a maximum of 400,000 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, we forecasted certain expected performance targets and calculated the probability of such forecast being attained. The impact of the fair value decreases for the years ended December 31, 2018, 2017 and 2016 were recorded in general and administrative expenses. The Provider Earnout was based on achievement by the Provider Companies of a certain customer count criteria over a nine month period following the closing of the Provider Companies acquisition. The sellers of the Provider Companies were 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. The Verde Earnout was based on achievement by the Verde Companies of certain performance targets over an 18 month period following the closing of the acquisition of the Verde Companies. In determining the fair value of the Verde Earnout, the Company forecasted certain expected performance targets and calculated the probability of such forecast being attained. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 12. Stock-Based Compensation Restricted Stock Units We maintain a Long-Term Incentive Plan ("LTIP") for employees, consultants and directors of the Company and its affiliates who perform services for the Company. The purpose of the LTIP is to provide a means to attract and retain individuals to serve as directors, employees and consultants who provide services to the Company by affording such individuals a means to acquire and maintain ownership of awards, the value of which is tied to the performance of the Company’s Class A common stock. The LTIP provides for grants of cash payments, stock options, stock appreciation rights, restricted stock or units, bonus stock, dividend equivalents, and other stock-based awards with the total number of shares of stock available for issuance under the LTIP not to exceed 2,750,000 shares. Restricted stock units granted to our officers, employees, non-employee directors and certain employees of our affiliates who perform services for the Company vest over approximately one year for non-employee directors and ratably over approximately one to four years for officers, employees, and employees of affiliates, with the initial vesting date occurring in May of the subsequent year. Each restricted stock unit is entitled to receive a dividend equivalent when dividends are declared and distributed to shareholders of Class A common stock. These dividend equivalents are retained by the Company, reinvested in additional restricted stock units effective as of the record date of such dividends and vested upon the same schedule as the underlying restricted stock unit. The Company measures the cost of awards classified as equity awards based on the grant date fair value of the award, and the Company measures the cost of awards classified as liability awards at the fair value of the award at each reporting period. The Company has utilized an estimated 6% annual forfeiture rate of restricted stock units in determining the fair value for all awards excluding those issued to executive level recipients and non-employee directors, for which no forfeitures are estimated to occur. The Company has elected to recognize related compensation expense on a straight-line basis over the associated vesting periods. Although the restricted stock units allow for cash settlement of the awards at the sole discretion of management of the Company, management intends to settle the awards by issuing shares of the Company’s Class A common stock. Total stock-based compensation expense for the years ended December 31, 2018 , 2017 and 2016 was $5.9 million , $5.1 million and $5.2 million . Total income tax benefit related to stock-based compensation recognized in net (loss) income was $0.6 million , $0.8 million and $0.8 million for the years ended December 31, 2018 , 2017 and 2016 . Equity Classified Restricted Stock Units Restricted stock units issued to employees and officers of the Company are classified as equity awards. The fair value of the equity classified restricted stock units is based on the Company’s Class A common stock price as of the grant date. The Company recognized stock based compensation expense of $5.3 million , $2.8 million and $2.3 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, in general and administrative expense with a corresponding increase to additional paid in capital. The following table summarizes equity classified restricted stock unit activity and unvested restricted stock units for the year ended December 31, 2018 : Number of Shares (in thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2017 640 $ 11.56 Granted 567 9.34 Dividend reinvestment issuances 53 9.11 Vested (324 ) 10.61 Forfeited (109 ) 12.75 Unvested at December 31, 2018 827 $ 10.09 For the year ended December 31, 2018 , 323,894 restricted stock units vested, with 213,076 shares of Class A common stock distributed to the holders of these units and 110,818 shares of Class A common stock withheld by the Company to cover taxes owed on the vesting of such units. As of December 31, 2018 , there was $6.2 million of total unrecognized compensation cost related to the Company’s equity classified restricted stock units, which is expected to be recognized over a weighted average period of approximately 2.2 years. Change in Control Restricted Stock Units In 2018, the Company granted Change in Control Restricted Stock Units ("CIC RSUs") to certain officers that vest upon a "Change in Control", if certain conditions are met. The terms of the CIC RSUs define a "Change in Control" to generally mean: – the consummation of an agreement to acquire or tender offer for beneficial ownership by any person, of 50% or more of the combined voting power of our outstanding voting securities entitled to vote generally in the election of directors, or by any person of 90% or more of the then total outstanding shares of Class A common stock; – individuals who constitute the incumbent board cease for any reason to constitute at least a majority of the board; – consummation of certain reorganizations, mergers or consolidations or a sale or other disposition of all or substantially all of our assets; – approval by our stockholders of a complete liquidation or dissolution; – a public offering or series of public offerings by Retailco and its affiliates, as a selling shareholder group, in which their total interest drops below 10 million of our total outstanding voting securities; – a disposition by Retailco and its affiliates in which their total interest drops below 10 million of our total outstanding voting securities; or – any other business combination, liquidation event of Retailco and its affiliates or restructuring of us which the Compensation Committee deems in its discretion to achieve the principles of a Change in Control. The equity classified restricted stock unit table above excludes unvested CIC RSUs as the conditions for Change in Control have not been met. The Company has not recognized stock compensation expense related to the CIC RSUs as the Change in Control conditions have not been met. Liability Classified Restricted Stock Units Restricted stock units issued to non-employee directors of the Company and employees of certain of our affiliates are classified as liability awards as the awards are either to a) non-employee directors that allow for the recipient to choose net settlement for the amount of withholding taxes dues upon vesting or b) to employees of certain affiliates of the Company and are therefore not deemed to be employees of the Company. The fair value of the liability classified restricted stock units is based on the Company’s Class A common stock price as of the reported period ending date. The Company recognized stock based compensation expense of $0.6 million , $2.3 million and $3.0 million for years ended December 31, 2018 , 2017 and 2016 , respectively, in general and administrative expense with a corresponding increase to liabilities. As of December 31, 2018 , the Company’s liabilities related to these restricted stock units recorded in current liabilities was $0.2 million . As of December 31, 2017 , the Company's liabilities related to these restricted stock units recorded in current liabilities was $0.7 million . The following table summarizes liability classified restricted stock unit activity and unvested restricted stock units for the year ended December 31, 2018 : Number of Shares (in thousands) Weighted Average Reporting Date Fair Value Unvested at December 31, 2017 224 $ 12.40 Granted 28 7.43 Dividend reinvestment issuances 8 7.43 Vested (70 ) 10.19 Forfeited (122 ) 11.17 Unvested at December 31, 2018 68 $ 7.43 For the year ended December 31, 2018 , 70,349 restricted stock units vested, with 45,000 shares of Class A common stock distributed to the holders of these units and 25,349 shares of Class A common stock withheld by the Company to cover taxes owed on the vesting of such units. As of December 31, 2018 , there was $0.3 million of total unrecognized compensation cost related to the Company’s liability classified restricted stock units, which is expected to be recognized over a weighted average period of approximately 1.6 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes We and our subsidiaries, CenStar and Verde Energy USA, Inc. ("Verde Corp") are each subject to U.S. federal income tax as corporations. CenStar and Verde Corp file consolidated tax returns in jurisdictions that allow combined reporting. Spark HoldCo and its subsidiaries, with the exception of CenStar and Verde Corp, 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, we are subject to U.S. federal income taxation on our allocable share of Spark HoldCo's net U.S. taxable income. In our financial statements, we report federal and state income taxes for our share of the partnership income attributable to our ownership in Spark HoldCo and for the income taxes attributable to CenStar and Verde Corp. Net income attributable to non-controlling interest includes the provision for income taxes related to CenStar and Verde Corp. We account for income taxes using the asset and liability 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 the tax bases of the assets and liabilities. We apply existing tax law and the tax rate that we expect 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. A valuation allowance is recorded when it is not more likely than not that some or all of the benefit from the deferred tax asset will be realized. In December 2017, the President signed the U.S. Tax Reform legislation, which enacted a wide range of changes to the U.S. Corporate income tax system. Accordingly, we adjusted the value of our U.S. deferred tax assets and liabilities based on the rates at which they are expected to be recognized in the future. For U.S. federal purposes the corporate statutory income tax rate was reduced from 35% to 21% , effective for the 2018 tax year. During 2018, we completed our analysis of the impact of U.S. Tax Reform based on further guidance provided on the new tax law by the U.S. Treasury Department and Internal Revenue Service, with no material changes from our assessment performed as of December 31, 2017. The provision for income taxes included the following components: (in thousands) 2018 2017 2016 Current: Federal $ 3,862 $ 6,992 $ 5,361 State 1,099 1,952 1,683 Total Current 4,961 8,944 7,044 Deferred: Federal (2,792 ) 27,820 2,944 State (92 ) 2,001 438 Total Deferred (2,884 ) 29,821 3,382 Provision for income taxes $ 2,077 $ 38,765 $ 10,426 The effective income tax rate was (17)% and 34% for the years ended December 31, 2018 and 2017 , respectively. The following table reconciles the income tax benefit that would result from application of the statutory federal tax rate, 21% and 35% for the years ended December 31, 2018 and 2017 , respectively, to the amount included in the consolidated statement of operations: (in thousands) 2018 2017 Expected provision at federal statutory rate $ (2,586 ) $ 39,833 Increase (decrease) resulting from: Non-controlling interest 1,738 (19,810 ) Class A Preferred Stock dividends 1,579 1,758 Impact of U.S. Tax Reform — 14,454 Intra-entity transfer of customer contracts 473 — State income taxes, net of federal income tax effect 428 2,569 Non-deductible expenses 256 234 Other 189 (273 ) Provision for income taxes $ 2,077 $ 38,765 Total income tax expense for the years ended December 31, 2018 and 2017 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income primarily due to state income taxes and the impact of permanent differences between book and taxable income, most notably the income attributable to non-controlling interest, which gets taxed at the non-controlling interest partner level. The effective rate in 2017 was also impacted by the enactment of U.S. Tax Reform. Since we were in a net deferred tax asset position, the rate reduced our overall asset having an unfavorable effect on tax expense. The components of our deferred tax assets as of December 31, 2018 and 2017 are as follows: (in thousands) 2018 2017 Deferred Tax Assets: Investment in Spark HoldCo $ 22,251 $ 16,132 Benefit of TRA Liability 7,016 8,175 Federal net operating loss carryforward — 660 State net operating loss carryforward — 166 Other 78 — Total deferred tax assets 29,345 25,133 Deferred Tax Liabilities: Derivative liabilities (715 ) (811 ) Intangibles (849 ) (2,287 ) Property and equipment (460 ) — Other — (58 ) Total deferred tax liabilities (2,024 ) (3,156 ) Total deferred tax assets/liabilities $ 27,321 $ 21,977 The benefit of the TRA Liability relates to the step up in tax basis resulting from the purchase by the Company of Spark HoldCo units from our Founder at the time of our IPO. Subsequent issuances of Series A common stock, exchanges of Series A Common Stock for Series B Shares and vesting of incentive stock compensation since our IPO has also resulted in step ups in the basis of our stock similarly resulting in a liability under our Tax Receivable Agreement. As of December 31, 2018 and 2017 , we have a current liability of $1.7 million and $5.9 million and a long-term liability of $25.9 million and $26.4 million to record the overall effect of the Tax Receivable Agreement. See Note 15 "Transactions with Affiliates" for further discussion. We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets. In making this determination, we consider all available positive and negative evidence and makes certain assumptions. We consider, among other things, our deferred tax liabilities, the overall business environment, our historical earnings and losses, current industry trends, and our outlook for future years. We believe it is more likely than not that our deferred tax assets will be utilized, and accordingly have not recorded a valuation allowance on these assets. The tax years 2013 through 2017 remain open to examination by the major taxing jurisdictions to which the Company is subject to income tax. An affiliate owned by our Founder would be responsible for any audit adjustments incurred in connection with transactions occurring prior to July 2014 for Spark Energy, Inc. and Spark HoldCo. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2018 and 2017 there was no liability, and for the years ended December 31, 2018 , 2017 and 2016 , there was no expense recorded for interest and penalties associated with uncertain tax positions or unrecognized tax positions. Additionally, the Company does no t have unrecognized tax benefits as of December 31, 2018 and 2017 . |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | 14. Commitment and Contingencies From time to time, we may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal Proceedings We are subject to lawsuits and claims arising in the ordinary course of our business. This litigation is in various stages, and the matters discussed below are subject to substantial uncertainties concerning the outcome of material factual and legal issues. Accordingly, we cannot currently predict the manner and timing of the resolution of this litigation or estimate a range of possible losses or a minimum loss that could result from an adverse verdict in a potential lawsuit. While the lawsuits and claims are asserted for amounts that may be material should an unfavorable outcome occur, management does not currently expect that any currently pending matters will have a material adverse effect on our financial position or results of operations. Katherine Veilleux, et. al. v. Electricity Maine LLC, Provider Power, LLC, Spark HoldCo, LLC, Kevin Dean, and Emile Clavet is a purported class action lawsuit filed on November 18, 2016 in the United States District Court of Maine, alleging that Electricity Maine, LLC (Electricity Maine), an entity acquired by Spark Holdco, LLC (Spark Holdco) in mid-2016, enrolled and re-enrolled customers through fraudulent and misleading advertising, promotions, and other communications prior to and following the acquisition. Plaintiffs allege claims under RICO, the Maine Unfair Trade Practice Act, civil conspiracy, fraudulent misrepresentation, unjust enrichment and breach of contract. Plaintiffs seek damages for themselves and the purported class, rescission of contracts with Electricity Maine, injunctive relief, restitution, and attorney’s fees. Discovery is ongoing in this matter. Spark HoldCo and Electricity Maine intend to vigorously defend this matter and the allegations asserted therein, including the request to certify a class. Electricity Maine and Spark HoldCo intend to file a motion to compel arbitration of certain Plaintiffs’ claims as the applicable Terms of Service in this case contain an arbitration provision and class action waiver. The Company believes it has full indemnity coverage for any actual exposure in this case at this time. Gillis et al. v. Respond Power, LLC is a purported class action lawsuit that was originally filed on May 21, 2014 in the Philadelphia Court of Common Pleas but was later removed to the United States District Court for the Eastern District of Pennsylvania. On September 15, 2014, the plaintiffs filed an amended class action complaint seeking a declaratory judgment that the disclosure statement contained in Respond Power, LLC’s variable rate contracts with Pennsylvania consumers limited the variable rate that could be charged to no more than the monthly rate charged by the consumers’ local utility company and alleged claims of deceptive conduct in violation of Pennsylvania Unfair Trade Practices and Consumer Protection Act, negligent misrepresentation, fraudulent concealment, and breach of contract and of the covenant of good faith and fair dealing by charging rates above the utility. The amount of damages sought is not specified. By order dated August 31, 2015, the district court denied class certification. The plaintiffs appealed the district court’s denial of class certification to the United States Court of Appeals for the Third Circuit and that court vacated the district court’s denial of class certification and remanded the matter to the district court for further proceedings. On July 16, 2018, the district court granted Respond Power LLC's motion to dismiss the Plaintiff’s class action claims. Plaintiffs filed their notice of appeal to the Third Circuit Court on August 7, 2018. The Third Circuit has not yet ruled or set any hearings on this appeal. The Company believes it has full indemnity coverage for any actual exposure in this case at this time. Jurich v. Verde Energy USA, Inc. , is a class action originally filed on March 3, 2015 in the United States District Court for the District of Connecticut and subsequently re-filed on October 8, 2015 in the Superior Court of Judicial District of Hartford, State of Connecticut. The Amended Complaint asserts that the Verde Companies charged rates in violation of its contracts with Connecticut customers and alleges (i) violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. §§ 42-110a et seq., and (ii) breach of the covenant of good faith and fair dealing. Plaintiffs are seeking unspecified actual and punitive damages for the class and injunctive relief. The parties have exchanged initial discovery. On December 6, 2017, the Court granted the plaintiffs’ class certification motion. As part of an agreement in connection with the acquisition of the Verde Companies, the original owners of the Verde Companies are handling this matter. The Company believes it has full indemnity coverage for any actual exposure in this case at this time. Richardson et. al. v. Verde Energy USA, Inc . is a purported class action filed on November 25, 2015 in the United States District Court for the Eastern District of Pennsylvania alleging that the Verde Companies violated the Telephone Consumer Protection Act (TCPA) by placing marketing calls using an automatic telephone dialing system (ATDS) or a prerecorded voice to the purported class members’ cellular phones without prior express consent and by continuing to make such calls after receiving requests for the calls to cease. Plaintiffs are seeking statutory damages for the purported class and injunctive relief prohibiting Verde Companies' alleged conduct. Discovery closed and dispositive motions on the named plaintiffs’ claims were filed on November 24, 2017. The Verde Companies received a favorable ruling on summary judgment with the court agreeing with the Verde Companies that the call system used in this case was not an ATDS as defined by the TCPA. As part of an agreement in connection with the acquisition of the Verde Companies, the original owners of the Verde Companies are handling this matter. The Company believes it has full indemnity coverage for any actual exposure in this case at this time. Saul Horowitz, as Sellers’ Representative for the former owners of the Major Energy Companies v. National Gas & Electric, LLC (NG&E) and Spark Energy, Inc. , filed a lawsuit on October 17, 2017 in the United States District Court for the Southern District of New York asserting claims of fraudulent inducement against NG&E, breach of contract against NG&E and us, and tortious interference with contract against us related to the membership interest purchase, subsequent transfer, and associated earnout agreements with the Major Energy Companies' former owners. The relief sought includes unspecified compensatory and punitive damages, prejudgment and post judgment interest, and attorneys’ fees. On September 24, 2018, the court granted our motion to dismiss in part and dismissed the plaintiffs’ fraudulent inducement claims but allowed the tortious interference claims to remain as well as the claims for consequential damages and punitive damages. NG&E and the Company filed their affirmative defenses and answer to the remaining claims on October 15, 2018. Discovery has commenced and written discovery requests have been exchanged between the parties. This case is currently set for trial on September 9, 2019. The Company and NG&E deny the allegations asserted and intend to vigorously defend this matter. Given the early stages of this matter, we cannot predict the outcome or consequences of this case at this time. Regulatory Matters On April 9, 2018 the Attorney General for the State of Illinois filed a complaint against Major Energy Electric Services, LLC (Major) asserting claims that Major engaged in a pattern and practice of deceptive conduct intended to defraud Illinois consumers through door-to-door and telephone solicitations, in-person solicitations at retail establishments, advertisements on its website and direct mail advertisements to sign up for electricity services. The complaint seeks injunctive relief and monetary damages representing the amounts Illinois consumers have allegedly lost due to fraudulent marketing activities. The Attorney General also requests civil penalties under the Consumer Fraud Act and to revoke Major’s authority to operate in the state. The complaint was filed in the Circuit Court of Cook County, Illinois, County Department, Chancery Division. Major filed its motion to dismiss on August 1, 2018. On October 10, 2018, the court denied Major’s Motion to Dismiss and subsequently its motion for reconsideration. Major is appealing the lower court’s ruling with a Motion for Entry of a Certified Question. Appellate briefs are due in February 2019 and discovery has begun. Major denies the allegations asserted and intends to vigorously defend this matter, however, we cannot predict the outcome or consequences of this case at this time. Spark Energy, LLC (Spark) is the subject of two current investigations by the Connecticut Public Utilities Regulatory Authority (PURA). The first investigation constitutes a notice of violation (NOV) and assessment of a proposed civil penalty in the amount of $0.9 million primarily for Spark's alleged failure to comply with requirements implemented in 2016 that customer bills include any changes to existing rates effective for the next billing cycle. After a hearing process was concluded and Spark Energy, LLC filed a brief challenging the legal authority of PURA to enforce the NOV and impose civil penalties for the alleged violations, PURA suspended the proceeding and opened a proceeding offering amnesty to ESCOs that self-report violations and offer to voluntarily remit refunds to customers. Spark has announced its intention to participate in the amnesty proceeding. The second investigation involves a NOV alleging improper marketing practices of one of Spark Energy, LLC's former outbound telemarketing vendors and assessment of a proposed civil penalty of $0.8 million . Certain agents managed by this vendor were allegedly using an unauthorized script in outbound marketing calls. We are unable to predict the outcome of these proceedings but have accrued $0.2 million as of December 31, 2018 , which represents our current estimate for penalty exposure for these two matters. While investigations of this nature have become common and are often resolved in a manner that allows the retailer to continue operating in Connecticut, there can be no assurance that PURA will not take more severe action. Indirect Tax Audits We are undergoing various types of indirect tax audits spanning from years 2013 to 2018 for which we may have additional liabilities arise. At the time of filing these 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. As of December 31, 2018 , we have accrued $0.9 million related to litigation and regulatory matters and $0.6 million related to indirect tax audits. The outcome of each of these may result in additional expense. |
Transactions with Affiliates
Transactions with Affiliates | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | 15. Transactions with Affiliates Transactions with Affiliates We enter into transactions with and pay 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. We also sell and purchase natural gas and electricity with affiliates. We present 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. Affiliated transactions include certain services to the affiliated companies associated with employee benefits provided through our benefit plans, insurance plans, leased office space, administrative salaries, due diligence work, recurring management consulting, and accounting, tax, legal, or technology services. Amounts billed are based on the 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 us and then directly billed or allocated to affiliates, as well as 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. Transactions with 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. Master Service Agreement with Retailco Services, LLC Prior to April 1, 2018, we were a party to a Master Service Agreement with an affiliated company owned by our Founder. The Master Service Agreement provided us with operational support services such as: enrollment and renewal transaction services; customer billing and transaction services; electronic payment processing services; customer service and information technology infrastructure and application support services under the Master Service Agreement. Effective April 1, 2018, we terminated the agreement, and these operational support services were transferred back to us. See "Cost Allocations" below for further discussion of the fees paid to affiliates during the years ended December 31, 2018 , 2017 , and 2016 respectively. Cost Allocations Where costs incurred on behalf of the affiliate or us cannot be determined by specific identification for direct billing, the costs are allocated to the affiliated entities or us based on estimates of percentage of departmental usage, wages or headcount. The total net amount direct billed and allocated from affiliates w as $10.3 million , $25.4 million and $17.0 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Of the amounts directly billed and allocated from affiliates, we recorded general and administrative expense of $5.9 million , $22.0 million , and $14.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, in the consolidated statement of operations in connection with fees paid under the Master Service Agreement. Additionally under the Master Service Agreement, we capitalized $0.5 million , 0.7 million , and $1.3 million of property and equipment for the application, development and implementation of various systems during the years ended December 31, 2018 , 2017 and 2016 , respectively. Accounts Receivable and Payable — Affiliates As of December 31, 2018 and 2017 , we had current accounts receivable—affiliates of $2.6 million and $3.7 million , respectively, and current accounts payable—affiliates of $2.5 million and $4.6 million , respectively. Revenues and Cost of Revenues — Affiliates Revenues recorded in net asset optimization revenues in the consolidated statements of operations for the years ended December 31, 2018 , 2017 and 2016 related to affiliated sales were $2.4 million , $1.3 million , and $0.2 million , respectively, and cost of revenues recorded in net asset optimization revenues in the consolidated statements of operations for the years ended December 31, 2018 , 2017 and 2016 related to this agreement were $0.1 million , $0.1 million and $1.6 million , respectively. These amounts are presented as net on the Consolidated Statements of Operations. Acquisitions from Affiliates In 2017, we acquired Perigee from our affiliate, NG&E, for total consideration of approximately $4.1 million . In connection with the Major Energy Companies acquisition, we issued 4,000,000 shares of Class B common stock (and a corresponding number of Spark HoldCo units) to NG&E, valued at $40.0 million . In connection with the financing of the Provider Companies acquisition, we issued 1,399,484 shares of Class B common stock (and a corresponding number of Spark HoldCo units) to RetailCo, valued at $14.0 million . In March 2018, we entered into an asset purchase agreement with NG&E to acquire up to 50,000 RCEs from NG&E for a cash purchase price of $250 for each RCE, or up to $12.5 million in the aggregate. A total of $8.8 million was paid in 2018 under the terms of the purchase agreement for approximately 35,000 RCEs, and no further material payments are anticipated. The acquisition was treated as a transfer of assets between entities under common control, and accordingly, the assets were recorded at their historical value at the date of transfer. The transaction resulted in $7.1 million recorded in equity as a net distribution to affiliate as of December 31, 2018 . Distributions to and Contributions from Affiliates During the years ended December 31, 2018 , 2017 and 2016 , we made distributions to affiliates of our Founder of $15.5 million , $15.6 million and $23.7 million , respectively, for payments of quarterly distributions on their respective Spark HoldCo units. During the years ended December 31, 2018 , 2017 and 2016 , we also made distributions to these affiliates for gross-up distributions of $16.5 million , $18.2 million , and $11.3 million , respectively, in connection with distributions made between Spark HoldCo and Spark Energy, Inc. for payment of income taxes incurred by us. Proceeds from Disgorgement of Stockholder Short-swing Profits During the years ended December 31, 2018 , 2017 and 2016 , we recorded zero , $0.7 million , and $1.6 million , respectively, 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 consolidated balance sheet as of December 31, 2018 , 2017 and 2016 . We received $0.5 million cash during the year ended December 31, 2017 and received $0.2 million cash in February 2018. In addition, the Company received $0.7 million cash during the year ended December 31, 2017 related to the disgorgement of stockholder short-swing profit recorded in our consolidated balance sheet as of December 31, 2016. Subordinated Debt Facility On December 27, 2016, we and Spark HoldCo jointly issued to an affiliate owned by our Founder, a 5% subordinated note in the principal amount of up to $25.0 million . The subordinated note allows us to draw advances in increments of no less than $1.0 million per advance up to the maximum principal amount of the subordinated note. Advances thereunder accrue interest at 5% per annum from the date of the advance. As of December 31, 2018 and 2017 , there was $10.0 million and zero , respectively, outstanding under the subordinated note. See Note 10 "Debt" for a further description of terms and conditions of the facility. Tax Receivable Agreement We maintain a Tax Receivable Agreement with affiliates that generally provides for the payment by us to affiliates of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we realize or will realize (or are deemed to realize in certain circumstances) in future periods as a result of (i) any tax basis increases resulting from the initial purchase by us of Spark HoldCo units from entities owned by our Founder, (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 us as a result of, and additional tax basis arising from, any payments we make under the Tax Receivable Agreement. We retain the benefit of the remaining 15% of these tax savings. See Note 13 "Income Taxes" for further discussion. In certain circumstances, we may defer or partially defer any payment due (a “TRA Payment”) to the holders of rights under the Tax Receivable Agreement for a five -year period that ends September 30, 2019. Deferral of payment is required 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 us to receive distributions of cash equal to (i) the targeted quarterly distribution we intend to pay to holders of our Class A common and Series A Preferred Stock payable during the applicable four-quarter period, plus (ii) the estimated taxes payable by us 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. At the end of the deferral period, we are obligated to pay any outstanding deferred TRA Payments to the extent such deferred TRA Payments do not exceed (i) the lesser of our proportionate share of aggregate Cash Available for Distribution of Spark HoldCo during the five -year deferral period or the cash distributions actually received by us 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 $0.18125 per Class A common stock share and $0.546875 per Series A Preferred Stock share per quarter) during the five -year deferral period, (b) our estimated taxes during the five -year deferral period, (c) all prior TRA Payments and (d) 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 us 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. For the four-quarter periods ending September 30, 2016, 2017, and 2018, we met the threshold coverage ratio required to fund the payments required under the Tax Receivable Agreement. Our affiliates, however, granted us the right to defer the TRA payment related to the four-quarter period ending September 30, 2016 until May 2018. In April, May, and December of 2018, we paid a total of $6.2 million related to our obligations under the TRA for the 2015, 2016, and 2017 tax years. As of December 31, 2018 and 2017 , we had a total liability related to the TRA of $27.6 million and $32.3 million , of which $1.7 million and $5.9 million , respectively, were classified as current liabilities. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 16. Segment Reporting Our determination of reportable business segments considers the strategic operating units under which we make financial decisions, allocate resources and assess performance of our business. Our reportable business segments are retail electricity and retail natural gas. The retail electricity segment consists of electricity sales and transmission to residential and commercial customers. The retail natural gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. Corporate and other consists of expenses and assets of the retail natural gas and retail electricity segments that are managed at a consolidated level such as general and administrative expenses. Asset optimization activities are also included in Corporate and other. For the years ended December 31, 2018 , 2017 and 2016 , we recorded asset optimization revenues of $113.7 million , $178.3 million and $133.0 million and asset optimization cost of revenues of $109.2 million , $179.0 million and $133.6 million , respectively, which are presented on a net basis in asset optimization revenues. We use retail gross margin to assess the performance of our operating segments. Retail gross margin is defined as operating income (loss) plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization revenues (expenses), (ii) net gains (losses) on non-trading derivative instruments, and (iii) net current period cash settlements on non-trading derivative instruments. We deduct net gains (losses) on non-trading derivative instruments, excluding current period cash settlements, from the retail gross margin calculation in order to remove the non-cash impact of net gains and losses on these derivative instruments. Retail gross margin should not be considered an alternative to, or more meaningful than, operating income, as determined in accordance with GAAP. Below is a reconciliation of retail gross margin to (loss) income before income tax expense (in thousands): Years Ended December 31, (in thousands) 2018 2017 2016 Reconciliation of Retail Gross Margin to Income before taxes (Loss) income before income tax expense $ (12,315 ) $ 113,809 $ 76,099 Change in Tax Receivable Agreement Liability — (22,267 ) — Interest and other income (749 ) (256 ) (957 ) Interest expense 9,410 11,134 8,859 Operating (loss) income (3,654 ) 102,420 84,001 Depreciation and amortization 52,658 42,341 32,788 General and administrative 111,431 101,127 84,964 Less: Net asset optimization revenue (expenses) 4,511 (717 ) (586 ) Net, (losses) gain on non-trading derivative instruments (19,571 ) 5,588 22,254 Net, Cash settlements on non-trading derivative instruments (9,614 ) 16,508 (2,284 ) Retail Gross Margin $ 185,109 $ 224,509 $ 182,369 Financial data for business segments are as follows (in thousands): Year Ended December 31, 2018 Retail Retail Corporate Eliminations Consolidated Total Revenues $ 863,451 $ 137,966 $ 4,511 $ — $ 1,005,928 Retail cost of revenues 762,771 82,722 — — 845,493 Less: Net asset optimization revenue — — 4,511 — 4,511 Net, Losses on non-trading derivative instruments (15,200 ) (4,371 ) — — (19,571 ) Current period settlements on non-trading derivatives (8,788 ) (826 ) — — (9,614 ) Retail gross margin $ 124,668 $ 60,441 $ — $ — $ 185,109 Total Assets $ 1,857,790 $ 649,969 $ 361,697 $ (2,380,718 ) $ 488,738 Goodwill $ 117,813 $ 2,530 $ 120,343 Year Ended December 31, 2017 Retail Retail Corporate Eliminations Consolidated Total Revenues (1) $ 657,566 $ 141,206 $ (717 ) $ — $ 798,055 Retail cost of revenues 477,012 75,155 — — 552,167 Less: Net asset optimization expense (1) — — (717 ) — (717 ) Net, Gains (losses) on non-trading derivative instruments 5,784 (196 ) — — 5,588 Current period settlements on non-trading derivatives 16,302 206 — — 16,508 Retail gross margin $ 158,468 $ 66,041 $ — $ — $ 224,509 Total Assets (2) $ 1,218,243 $ 421,896 $ 281,176 $ (1,417,574 ) $ 503,741 Goodwill $ 117,624 $ 2,530 $ — $ — $ 120,154 Year Ended December 31, 2016 Retail Retail Corporate Eliminations Consolidated Total Revenues (1) $ 417,229 $ 130,054 $ (586 ) $ — $ 546,697 Retail cost of revenues 286,795 58,149 — — 344,944 Less: Net asset optimization expense (1) — — (586 ) — (586 ) Net, Gains on non-trading derivative instruments 17,187 5,067 — — 22,254 Current period settlements on non-trading derivatives (4,889 ) 2,605 — — (2,284 ) Retail gross margin $ 118,136 $ 64,233 $ — $ — $ 182,369 Total Assets (2) $ 551,338 $ 242,739 $ 192,101 $ (618,429 ) $ 367,749 Goodwill $ 76,617 $ 2,530 $ — $ — $ 79,147 (1) Previously reported amounts have been adjusted to reclassify net asset optimization actives from the Retail Natural Gas segment to Corporate and Other. (2) Previously reported amounts have been adjusted for immaterial corrections. See Footnote 2 "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion. Significant Customers For each of the years ended December 31, 2018 , 2017 and 2016 , we did not have any significant customers that individually accounted for more than 10% of our consolidated retail revenue. Significant Suppliers For each of the years ended December 31, 2018 , 2017 and 2016 , we had two significant suppliers that individually accounted for more than 10% of our consolidated retail cost of revenues and net asset optimization revenues. For each of the years ended December 31, 2018 , 2017 and 2016 , these suppliers accounted for 28% , 20% and 27% of our consolidated cost of revenue and net asset optimization revenue. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | 17. Equity Method Investment Investment in eREX Spark Marketing Co., Ltd In September 2015, we, together with eREX Co., Ltd., a Japanese company, entered into an agreement ("eREX JV Agreement") to form a new joint venture, eREX Spark Marketing Co., Ltd ("eREX Spark"). As part of this agreement, we made contributions of 156.4 million Japanese Yen, or $1.4 million , for a 20% ownership interest in eREX Spark. We are entitled to share in 30% of the dividends distributed by eREX Spark for the first year a qualifying dividend is paid and for the subsequent four years thereafter. After this period, dividends will be distributed proportionately with the equity ownership of eREX Spark. eREX Spark's board of directors consists of four directors, one of whom is appointed by us. Based on our significant influence, as reflected by the 20% equity ownership and 25% control of the eREX Spark board of directors, we recorded the investment in eREX Spark as an equity method investment. Our investment in eREX Spark was $3.1 million as of December 31, 2018 , reflecting contributions made by us through December 31, 2018 and our proportionate share of earnings as determined under the HLBV method as of December 31, 2018 , and recorded in other assets in the consolidated balance sheet. There were no basis differences between our initial contribution and the underlying net assets of eREX Spark. We recorded our proportionate share of eREX Spark's earnings of $0.5 million in our consolidated statement of operations for the year ended December 31, 2018 . |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial 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”). Our 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. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. |
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 consolidated financial statements. |
Reclassifications | Reclassifications Prior to December 31, 2018, renewable energy credit asset and renewable energy credit liability balances were included in other current assets and accrued liabilities, respectively. In 2018, these amounts were separately presented and prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported earnings. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the Company’s consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could materially differ from those estimates. |
Relationship with our Founder and Majority Shareholder | Relationship with our Founder and Majority Shareholder W. Keith Maxwell, III (our "Founder") is the owner of a majority of the voting power of our common stock through his ownership of NuDevco Retail, LLC ("NuDevco Retail") and Retailco, LLC ("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 LLC ("NuDevco Retail Holdings"), which is a wholly owned subsidiary of Electric HoldCo, LLC, which is also a wholly owned subsidiary of TxEx. We enter into transactions with and pay certain costs on behalf of affiliates that are commonly controlled by Mr. Maxwell, and these affiliates enter into transactions with and pay certain costs on our behalf. We undertake these transactions 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, certain administrative salaries, management due diligence, recurring management consulting, and accounting, tax, legal, or technology services. Amounts billed under these arrangements are based on services provided, departmental usage, or headcount, which are considered reasonable by management. As such, the accompanying 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 consolidated statements of operations with a corresponding accounts receivable—affiliates or accounts payable—affiliates, respectively, recorded in the 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 consolidated statements of operations with a corresponding accounts receivable—affiliate or accounts payable—affiliate in the consolidated balance sheets. The allocations and related estimates and assumptions are described more fully in Note 15 "Transactions with Affiliates." |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all unrestricted demand deposits and funds invested in highly liquid instruments with original maturities of three months or less. The Company periodically assesses the financial condition of the institutions where these funds are held and believes that its credit risk is minimal with respect to these institutions. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company accrues an allowance for doubtful accounts based upon estimated uncollectible accounts receivable considering historical collections, accounts receivable aging analysis, credit risk and other factors. The Company writes off accounts receivable balances against the allowance for doubtful accounts when the accounts receivable is deemed to be uncollectible. Bad debt expense of $10.1 million , $6.6 million and $1.3 million was recorded in general and administrative expense in the consolidated statements of operations for the years ended December 31, 2018 , 2017 and 2016 , respectively. The Company conducts business in many utility service markets where the local regulated utility purchases our receivables, and then becomes responsible for billing the customer and collecting payment from the customer (“POR programs”). This POR service results in substantially all of the Company’s credit risk being linked to the applicable utility, which generally has an investment-grade rating, and not to the end-use customer. The Company monitors the financial condition of each utility and currently believes such amounts are collectible. Trade accounts receivable that are part of a local regulated utility’s POR program are recorded on a gross basis in accounts receivable in the consolidated balance sheets. The discount paid to the local regulated utilities is recorded in general and administrative expense in the consolidated statements of operations. In markets that do not offer POR services or when the Company chooses to directly bill its customers, certain receivables are billed and collected by the Company. The Company bears the credit risk on these accounts and records an appropriate allowance for doubtful accounts to reflect any losses due to non-payment by customers. The Company’s customers are individually insignificant and geographically dispersed in these markets. The Company writes off customer balances when it believes that amounts are no longer collectible and when it has exhausted all means to collect these receivables. |
Inventory | Inventory Inventory consists of natural gas used to fulfill and manage seasonality for fixed and variable-price retail customer load requirements and is valued at the lower of weighted average cost or market. Purchased natural gas costs are recognized in the consolidated statements of operations, within retail cost of revenues, when the natural gas is sold and delivered out of the storage facility using the weighted average cost of the gas sold. |
Customer Acquisition Costs | Customer Acquisition Costs The Company capitalizes direct response advertising costs that consist primarily of hourly and commission-based telemarketing costs, door-to-door agent commissions and other direct advertising costs associated with proven customer generation in its balance sheet. These costs are amortized over the estimated life of a customer. As of December 31, 2018 and 2017 , the net customer acquisition costs were $18.3 million and $29.0 million , of which $14.4 million and $22.1 million were recorded in current assets, and $3.9 million and $6.9 million were recorded in non-current assets. Amortization of customer acquisition costs were $24.4 million , $21.4 million , and $17.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Customer acquisition costs do not include customer acquisitions through merger and acquisition activities, which are recorded as customer relationships. Recoverability of customer acquisition costs is evaluated based on a comparison of the carrying amount of such costs to the future net cash flows expected to be generated by the customers acquired, considering specific assumptions for customer attrition, per unit gross profit, and operating costs. These assumptions are based on forecasts and historical experience. |
Customer Relationships, Non-compete Agreements, and Trademarks | Non-compete agreements We capitalize intangible costs associated with non-compete agreements in certain of our acquisitions. Non-compete agreements provide the Company with a certain level of assurance that acquired companies' expected earnings streams will not be disrupted by competition from the companies’ previous owners or members. These non-compete agreements are amortized over their estimated useful life of three years on a straight-line basis. As of December 31, 2018 , the Company had $0.3 million of capitalized costs related to these non-compete agreements, of which $0.3 million was current, and of which zero was non-current. Trademarks We record trademarks as part of our acquisitions which represent the value associated with the recognition and positive reputation of an acquired company to its target markets. This value would otherwise have to be internally developed through significant time and expense or by paying a third party for its use. These intangibles are amortized over the estimated five -year to ten -year life of the trademark on a straight-line basis. The fair values of trademark assets were determined at the date of acquisition using a royalty savings method under the income approach. Under this approach, the Company estimates the present value of expected cash flows resulting from avoiding royalty payments to use a third party trademark. The Company analyzes market royalty rates charged for licensing trademarks and applied an expected royalty rate to a forecast of estimated revenue, which was then discounted using an appropriate risk adjusted rate of return. As of December 31, 2018 and 2017 , we had recorded $7.3 million and $8.6 million related to these trademarks in other assets. Amortization expense was $1.3 million , $0.8 million and $0.4 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. We review trademarks for impairment whenever events or changes in business circumstances indicate the carrying value of the intangible assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by the intangible assets are less than their respective carrying value. If an impairment exists, a loss is recognized for the difference between the fair value and carrying value of the intangible assets. Customer Relationships Customer contracts recorded as part of mergers or acquisitions are reflected as customer relationships in our balance sheet. The Company had capitalized customer relationship of $16.6 million and $18.7 million , net of amortization, as current assets as of December 31, 2018 and 2017 , respectively, and $26.4 million and $34.8 million , net of amortization, as non-current assets as of December 31, 2018 and 2017 , respectively, related to these intangible assets. These intangibles are amortized on a straight-line basis over the estimated average life of the related customer contracts acquired, which ranges from three to six years . The acquired customer relationships intangibles related to Oasis, CenStar, Provider Companies, Major Energy Companies, Perigee Energy LLC, Verde Companies, and HIKO are reflective of the acquired companies’ customer base, and were valued at the respective dates of acquisition 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, fixed assets, and assembled workforce. These future cash flows were then discounted using an appropriate risk-adjusted rate of return by retail unit to arrive at the present value of the expected future cash flows. CenStar, Oasis, Perigee, and HIKO customer relationships are amortized to depreciation and amortization based on the expected future net cash flows by year. The acquired customer relationship intangibles related to the Major Energy Companies, the Provider Companies and the Verde Companies were bifurcated between hedged and unhedged and amortized to depreciation and amortization based on the expected future cash flows by year and expensed to retail cost of revenue based on the expected term of the underlying fixed price contract in each reporting period, respectively. Customer relationship amortization expense was $20.3 million , $17.8 million , and $28.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, of which approximately $(1.2) million , $0.3 million , and $15.8 million was included in retail cost of revenue for those years. We review customer relationships for impairment whenever events or changes in business circumstances indicate the carrying value of the intangible assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by the intangible assets are less than their respective carrying value. If an impairment exists, a loss is recognized for the difference between the fair value and carrying value of the intangible assets. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense using the straight-line method over the life of the related long-term debt. These costs are included in other assets in our consolidated balance sheets. |
Property and Equipment | Property and Equipment The Company records property and equipment at historical cost. Depreciation expense is recorded on a straight-line method based on estimated useful lives, which range from 2 to 5 years, along with estimates of the salvage values of the assets. When items of property and equipment are sold or otherwise disposed of, any gain or loss is recorded in the consolidated statements of operations. |
Internal-Use Software | The Company capitalizes costs associated with certain of its internal-use software projects. Costs capitalized are those incurred during the application development stage of projects such as software configuration, coding, installation of hardware and testing. Costs incurred during the preliminary or post-implementation stage of the project are expensed in the period incurred, including costs associated with formulation of ideas and alternatives, training and application maintenance. After internal-use software projects are completed, the associated capitalized costs are depreciated over the estimated useful life of the related asset. Interest costs incurred while developing internal-use software projects are also capitalized. |
Goodwill | Goodwill Goodwill represents the excess of cost over fair value of the assets of businesses acquired in accordance with FASB ASC Topic 350 Intangibles-Goodwill and Other ("ASC 350"). The goodwill on our consolidated balance sheet as of December 31, 2018 is associated with both our Retail Natural Gas and Retail Electricity segments. We determine our segments, which are also considered our reporting unit, by identifying each unit that engaged in business activities from which it may earn revenues and incur expenses, had operating results regularly reviewed by the segment manager for purposes of resource allocation and performance assessment, and had discrete financial information. Goodwill is not amortized, but rather is assessed for impairment whenever events or circumstances indicate that impairment of the carrying value of goodwill is likely, but no less often than annually as of October 31. We compare our estimate of the fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, we compare the implied fair value of the reporting unit’s goodwill to the carrying value, if any, of that goodwill, the difference of which is recorded as an impairment in the financial statements. |
Treasury Stock | Treasury Stock Treasury stock consists of Company's own stock that has been issued, but subsequently reacquired by the Company. Treasury stock does not reduce the number of shares issued but does reduce the number of shares outstanding. These shares are not eligible to receive cash dividends. We use the cost method to account for treasury shares. |
Equity Method Investments | Equity Method Investments We use the equity method of accounting to account for investments where we have the ability to exercise significant influence over, but not control, the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our share of earnings or losses and distributions. Equity investments are presented on the consolidated balance sheet under "Other assets" and our share of their income is reflected as "Interest and other income" on the consolidated statements of operations. We determine our equity investment earnings using the Hypothetical Liquidation at Book Value (HLBV) method. Under the HLBV method, a calculation is prepared at each balance sheet date to determine the amount the Company would receive if the investee were to liquidate all of its assets, as valued in accordance with U.S. GAAP, and distribute that cash to the investors. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is the Company's share of the earnings or losses from the equity investment for the period. |
Revenues and Cost of Revenues | Revenues and Cost of Revenues Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenues are recognized by the Company when: (1) persuasive evidence of an exchange arrangement exists, (2) delivery has occurred or services have been rendered, (3) the buyer’s price is fixed or determinable and (4) collection is reasonably assured. Utilizing these criteria, revenue is recognized when the natural gas or electricity is delivered to the customer. Similarly, cost of revenues is recognized when the commodity is delivered. Revenues for natural gas and electricity sales are recognized under the accrual method. Natural gas and electricity sales that have been delivered but not billed by period end are estimated. Accrued unbilled revenues are based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated customer usage by class. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class. Estimated amounts are adjusted when actual usage is known and billed. Costs for natural gas and electricity sales are similarly recognized under the accrual method. Natural gas and electricity costs that have not been billed to the Company by suppliers but have been incurred by period end are estimated. The Company estimates volumes for natural gas and electricity delivered based on the forecasted revenue volumes, estimated transportation cost volumes and estimation of other costs associated with retail load that varies by commodity utility territory. These costs include items like ISO fees, ancillary services and renewable energy credits. Estimated amounts are adjusted when actual usage is known and billed. Our asset optimization activities, which primarily include natural gas physical arbitrage and other short term storage and transportation transactions, meet the definition of trading activities and are recorded on a net basis in the consolidated statements of operations in net asset optimization revenues. |
Natural Gas Imbalances | Natural Gas Imbalances The consolidated balance sheets include natural gas imbalance receivables and payables, which primarily result when customers consume more or less gas than has been delivered by the Company to local distribution companies (“LDCs”). The settlement of natural gas imbalances varies by LDC, but typically the natural gas imbalances are settled in cash or in kind on a monthly, quarterly, semi-annual or annual basis. The imbalances are valued at their estimated net realizable value. |
Derivative Instruments | Derivative Instruments The Company uses derivative instruments such as futures, swaps, forwards and options to manage the commodity price risks of its business operations. All derivatives are recorded in the consolidated balance sheets at fair value. Derivative instruments representing unrealized gains are reported as derivative assets while derivative instruments representing unrealized losses are reported as derivative liabilities. We offset amounts in the consolidated balance sheets for derivative instruments executed with the same counterparty where we have a master netting arrangement. As part of our asset optimization activities, we manage a portfolio of commodity derivative instruments held for trading purposes. Changes in fair value of and amounts realized upon settlements of derivatives instruments held for trading purposes are recognized in earnings in net asset optimization revenues. To manage the retail business, the Company holds derivative instruments that are not for trading purposes and are not designated as hedges for accounting purposes. Changes in the fair value of and amounts realized upon settlement of derivative instruments not held for trading purposes are recognized in retail costs of revenues. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes where deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in those years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will not be realized. Amounts owed or refundable on current year returns is included as a current payable or receivable in the consolidated balance sheet. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes on continuing operations in our consolidated statements of operations. |
Earnings per Share | Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income attributable to shareholders (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 us. Diluted earnings per share is similarly calculated except that the denominator is increased for potentially dilutive securities. We use the treasury stock method to determine the potential dilutive effect of our outstanding unvested restricted stock units and use the if-converted method to determine the potential dilutive effect of our Class B common stock. |
Non-controlling Interest | Non-controlling Interest Net income attributable to non-controlling interest represents the Class B Common stockholders' interest in income and expenses of the Company. The weighted average ownership percentages for the applicable reporting period are used to allocate the income (loss) before income taxes to each economic interest owner. |
Commitments and Contingencies | Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers , 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. We adopted the standard utilizing the full retrospective approach, and the adoption had no impact on our total revenues and operating income for the years ended December 31, 2018, 2017 and 2016. The standard requires expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 3 "Revenues" for further disclosure. On January 1, 2018, we adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We utilized ASU 2017-01 in evaluating all acquisitions occurring after the date of adoption. On January 1, 2018, we adopted 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 specific cash flow issues in the statement of cash flows, including contingent consideration payments made after a business combination. We applied this guidance using a retrospective transition method for each period presented. Because of the change in accounting guidance, we reclassified acquisition related payments of approximately $1.8 million and $0.8 million from cash flows from investing activities to cash flows from operating activities for the years ended December 31, 2017 and December 31, 2016, respectively. We reclassified acquisition related payments of approximately $18.4 million and $2.0 million from cash flows from investing activities to cash flows from financing activities for the years ended December 31, 2017 and December 31, 2016, respectively. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which states an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and not when the asset has been sold to an outside party. The amendments in this guidance eliminate exceptions for intra-entity transfer of an asset, such as intellectual property and property, plant, and equipment. ASU 2016-16 is effective on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings for annual reporting periods beginning after December 15, 2017. We adopted ASU 2016-16 effective January 1, 2018, with no cumulative-effect adjustment. New Accounting Standards Being Evaluated But Not Yet Adopted Below are accounting standards that have been issued, but not yet been adopted by the Company at December 31, 2018 . In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under this new guidance, lessees will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of greater than twelve months. The guidance requires qualitative disclosures along with certain specific quantitative disclosures for both lessees and lessors. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842 , Leases (“ASU 2018-10”), and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), to provide additional guidance for the adoption of Topic 842. The ASU and its related amendments 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 with an option to use certain practical expedients, which we expect to use. We have evaluated the impact of this new guidance and reviewed lease or possible lease contracts and evaluated contract related processes. We believe the primary impact will be related to the recognition of right-of-use assets and liabilities for our real estate operating leases in the range of approximately $1.0 million to $1.5 million . In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this update, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 should be applied on a prospective basis and is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We adopted ASU 2017-04 effective January 1, 2019, and the adoption of this standard did not have a material impact on the Company's consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting ("ASU 2018-07"). ASU 2018-07 primarily expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. We adopted ASU 2018-07 effective January 1, 2019, and the adoption of this standard did not have a material impact on the Company's consolidated financial statements. |
Fair Value Measurements | 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 the credit standing of counterparties involved and the impact of credit enhancements. We apply fair value measurements to our commodity derivative instruments and contingent payment arrangements based on the following fair value hierarchy, which prioritizes the inputs to the 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 our 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. These levels can change over time. 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. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Immaterial Corrections to Prior Year Financial Information | Below are amounts as reported and as adjusted for each year presented (in thousands): December 31, 2016 December 31, 2017 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted Deferred tax assets $ 54,109 $ (7,481 ) $ 46,628 $ 24,185 $ (2,208 ) $ 21,977 Total Assets 375,230 (7,481 ) 367,749 505,949 (2,208 ) 503,741 Additional paid-in capital 25,272 13,915 39,187 26,914 20,897 47,811 Retained earnings 4,711 — 4,711 11,008 391 11,399 Total stockholders' equity 30,330 13,915 44,245 36,248 21,288 57,536 Non-controlling interest in Spark HoldCo, LLC 93,406 (21,396 ) 72,010 125,055 (23,496 ) 101,559 Total equity 123,736 (7,481 ) 116,255 161,303 (2,208 ) 159,095 Total liabilities, Series A Preferred Stock and stockholders' equity 375,230 (7,481 ) 367,749 505,949 (2,208 ) 503,741 Income tax expense 37,528 1,237 38,765 Net Income 76,281 (1,237 ) 75,044 Net Income Available to Common Shareholders 15,816 391 16,207 Net income attributable to non-controlling interests 57,427 (1,628 ) 55,799 Net income attributable to Spark Energy, Inc. per share of Class A common stock Basic 1.20 0.03 1.23 Diluted 1.19 0.02 1.21 Cash flows from operating activities: Net income 76,281 (1,237 ) 75,044 Adjustments to reconcile net income to net cash flows from operating activities Deferred income taxes 28,584 1,237 29,821 Net cash provided by operating activities (1) 63,912 (1,781 ) 62,131 (1) Net cash provided by operating activities for the year ended December 31, 2017 changed from amounts previously reported due to the adoption of ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. See further discussion in the Recent Accounting Pronouncements section, below. In addition, immaterial adjustments have been made to certain December 31, 2015 equity balances, as noted in the table below. December 31, 2015 As Reported Adjustments As Adjusted Additional paid-in capital 12,426 (4,656 ) 7,770 Retained earnings (1,366 ) — (1,366 ) Total stockholders' equity 11,338 (4,656 ) 6,682 Non-controlling interest in Spark HoldCo, LLC 21,981 2,727 24,708 Total equity $ 33,319 $ (1,929 ) $ 31,390 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated Revenue | The table also includes a reconciliation of the disaggregated revenue to revenue by reportable segment (in thousands). Reportable Segments Year Ended December 31, 2018 Year Ended December 31, 2017 Year Ended December 31, 2016 Retail Electricity Retail Natural Gas Total Reportable Segments Retail Electricity Retail Natural Gas Total Reportable Segments Retail Electricity Retail Natural Gas Total Reportable Segments Primary markets (a) New England $ 395,682 $ 21,221 $ 416,903 $ 229,546 $ 21,196 $ 250,742 $ 115,360 $ 21,758 $ 137,118 Mid-Atlantic 291,046 54,815 345,861 272,127 52,737 324,864 197,511 38,387 235,898 Midwest 73,167 39,894 113,061 59,506 37,792 97,298 45,881 37,318 83,199 Southwest 103,556 22,036 125,592 96,387 29,481 125,868 58,477 32,591 91,068 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 Customer type Commercial $ 355,607 $ 50,156 $ 405,763 $ 195,356 $ 50,424 $ 245,780 $ 119,543 $ 55,347 $ 174,890 Residential 518,261 93,186 611,447 441,580 89,889 531,469 281,537 70,082 351,619 Unbilled revenue (b) (10,417 ) (5,376 ) (15,793 ) 20,630 893 21,523 16,149 4,625 20,774 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 Customer credit risk POR $ 586,901 $ 71,565 $ 658,466 $ 447,581 $ 76,002 $ 523,583 $ 307,836 $ 57,198 $ 365,034 Non-POR 276,550 66,401 342,951 209,985 65,204 275,189 109,393 72,856 182,249 $ 863,451 $ 137,966 $ 1,001,417 $ 657,566 $ 141,206 $ 798,772 $ 417,229 $ 130,054 $ 547,283 (a) The primary markets noted above include the following states: • New England - Connecticut, Maine, Massachusetts, New Hampshire; • Mid-Atlantic - Delaware, Maryland (including the District of Colombia), New Jersey, New York and Pennsylvania; • Midwest - Illinois, Indiana, Michigan and Ohio; and • Southwest - Arizona, California, Colorado, Florida, Nevada, and Texas. (b) Unbilled revenue is recorded in total until it is actualized, at which time it is categorized between commercial and residential customers. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Allocation of the Purchase Consideration | The purchase price allocation for the acquisition of the Provider Companies was finalized as of December 31, 2016 as follows: Final Purchase Price Allocation Cash $ 431 Net working capital, net of cash acquired 812 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 $ 34,066 The allocation of the purchase consideration is as follows (in thousands): Preliminary Purchase Price Allocation 2018 Adjustments (1) Purchase Price Allocation as of December 31, 2018 Cash and restricted cash $ 309 $ 66 $ 375 Intangible assets—customer relationships 6,205 (174 ) 6,031 Net working capital, net of cash acquired 9,041 (576 ) 8,465 Fair value of derivative liabilities (205 ) — (205 ) Total $ 15,350 $ (684 ) $ 14,666 (1) Changes to the purchase price allocation were due to an agreement to settle the working capital balances with HIKO sellers per the purchase agreement. NG&E acquired Perigee, which was on February 3, 2017, and the fair value of the net assets acquired was as follows (in thousands): Final Purchase Price Allocation Cash $ 23 Intangible assets—customer relationships 1,100 Goodwill 1,540 Net working capital, net of cash acquired 2,085 Fair value of derivative liabilities (443 ) Total $ 4,305 Accordingly, the impact from the assets acquired and liabilities assumed were based on those values and results from the date NG&E acquired the Major Energy Companies, which was April 15, 2016. The fair value allocation of the net assets acquired was as follows (in thousands): Final Purchase Price Allocation 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 34,988 Net working capital, net of cash acquired (6,746 ) Fair value of derivative liabilities (7,260 ) Total $ 68,650 The allocation of the purchase consideration was as follows (in thousands): December 31, 2017 Adjustments (1) As of December 31, 2018 Cash and restricted cash $ 1,653 $ — $ 1,653 Property and equipment 4,560 — 4,560 Intangible assets—customer relationships 28,700 — 28,700 Intangible assets—trademarks 3,000 — 3,000 Goodwill 39,207 189 39,396 Net working capital, net of cash acquired 19,132 (659 ) 18,473 Deferred tax liability (3,126 ) — (3,126 ) Fair value of derivative liabilities (1,942 ) — (1,942 ) Total $ 91,184 $ (470 ) $ 90,714 (1) Changes to the purchase price allocation in 2018 were due to an agreement to settle the working capital balances with Verde Companies' sellers per the purchase agreement. |
Unaudited Pro Forma Revenue and Earnings Summary | The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company as if the acquisition had occurred on January 1, 2016 (in thousands): Year Ended December 31, 2017 2016 Revenues $ 868,415 $ 716,696 Earnings $ 18,047 $ 17,860 The following unaudited pro forma revenue and earnings summary presents consolidated information of the Company for 2016 as if the acquisition had occurred on January 1, 2015 (in thousands): Year Ended December 31, 2016 2015 Revenue $603,673 $547,381 Earnings $15,776 $15,460 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Economic Interests | The Company and affiliates owned the following economic interests in Spark HoldCo at December 31, 2017 and December 31, 2018 , respectively. The Company Affiliated Owners December 31, 2017 38.12 % 61.88 % December 31, 2018 40.53 % 59.47 % |
Schedule of Net Income and Income Tax Expense (Benefit) Attributable to Non-Controlling Interest | The following table summarizes the portion of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands): 2018 2017 2016 Net (loss) income allocated to non-controlling interest $ (12,140 ) $ 55,068 $ 52,300 Income tax expense (benefit) allocated to non-controlling interest 1,066 (731 ) 1,071 Net (loss) income attributable to non-controlling interest $ (13,206 ) $ 55,799 $ 51,229 |
Computation of Earnings (Loss) Per Share | The following table presents the computation of basic and diluted (loss) earnings per share for the years ended December 31, 2018 , 2017 , and 2016 (in thousands, except per share data): Year Ended December 31, 2018 2017 2016 Net income attributable to Spark Energy, Inc. stockholders $ (1,186 ) $ 19,245 $ 14,444 Less: Dividend on Series A preferred stock 8,109 3,038 — Net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,444 Basic weighted average Class A common shares outstanding 13,390 13,143 11,402 Basic (loss) earnings per share attributable to stockholders $ (0.69 ) $ 1.23 $ 1.27 Net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,444 Effect of conversion of Class B common stock to shares of Class A common stock — — — 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 (1) — — (310 ) Diluted net (loss) income attributable to stockholders of Class A common stock $ (9,295 ) $ 16,207 $ 14,134 Basic weighted average Class A common shares outstanding 13,390 13,143 11,402 Effect of dilutive Class B common stock — — — 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 — — 1,010 Effect of dilutive restricted stock units — 203 278 Diluted weighted average shares outstanding 13,390 13,346 12,690 Diluted (loss) earnings per share attributable to stockholders $ (0.69 ) $ 1.21 $ 1.11 (1) The CenStar Note and Oasis Note converted into 269,462 and 766,180 shares of Class B common stock on January 8, 2017, and January 31, 2017, respectively. |
Carrying Amounts and Classification of Variable Interest Entities | The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in our consolidated balance sheet as of December 31, 2018 (in thousands): December 31, 2018 December 31, 2017 Assets Current assets: Cash and cash equivalents $ 36,724 $ 29,385 Accounts receivable 150,866 158,814 Other current assets 92,963 105,165 Total current assets 280,553 293,364 Non-current assets: Goodwill 120,343 120,154 Other assets 47,159 62,552 Total non-current assets 167,502 182,706 Total Assets $ 448,055 $ 476,070 Liabilities Current liabilities: Accounts Payable and Accrued Liabilities $ 122,497 $ 110,152 Current portion of Senior Credit Facility — 7,500 Contingent consideration 1,328 4,024 Other current liabilities 16,525 8,933 Total current liabilities 140,350 130,609 Long-term liabilities: Long-term portion of Senior Credit Facility 129,500 117,750 Subordinated debt—affiliate 10,000 — Contingent consideration — 626 Other long-term liabilities 319 663 Total long-term liabilities 139,819 119,039 Total Liabilities $ 280,169 $ 249,648 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Preferred Equity Balance | A summary of our preferred equity balance for the years ended December 31, 2018 and 2017 is as follows: (in thousands) Balance at December 31, 2016 $ — Issuance of Series A Preferred Stock, net of issuance cost 40,241 Accumulated dividends on Series A Preferred Stock 932 Balance at December 31, 2017 $ 41,173 Issuance of Series A Preferred Stock, net of issuance cost 48,490 Accumulated dividends on Series A Preferred Stock 1,095 Balance at December 31, 2018 $ 90,758 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Volumetric Underlying Derivative Transactions | The following table summarizes the net notional volumes of our open derivative financial instruments accounted for at fair value, broken out by commodity. Positive amounts represent net buys while bracketed amounts are net sell transactions (in thousands): Non-trading Commodity Notional December 31, 2018 December 31, 2017 Natural Gas MMBtu 8,176 9,191 Natural Gas Basis MMBtu 115 — Electricity MWh 6,781 8,091 Trading Commodity Notional December 31, 2018 December 31, 2017 Natural Gas MMBtu 188 26 Natural Gas Basis MMBtu (380 ) (225 ) |
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): Year Ended December 31, 2018 2017 2016 (Loss) gain on non-trading derivatives, net (19,571 ) 5,588 22,254 Gain (loss) on trading derivatives, net 1,401 (580 ) 153 (Loss) gain on derivatives, net $ (18,170 ) $ 5,008 $ 22,407 Current period settlements on non-trading derivatives (1) (9,614 ) 16,508 (2,284 ) Current period settlements on trading derivatives (973 ) (199 ) 138 Total current period settlements on derivatives (1) $ (10,587 ) $ 16,309 $ (2,146 ) (1) Excludes settlements of $(0.3) million , $3.4 million and $26.6 million , respectively, for the years ended December 31, 2018 , 2017 , and 2016 related to non-trading derivative liabilities assumed in various acquisitions. |
Offsetting Assets | The following tables summarize the fair value and offsetting amounts of our derivative instruments by counterparty and collateral received or paid (in thousands): December 31, 2018 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 18,649 $ (12,000 ) $ 6,649 $ — $ 6,649 Trading commodity derivatives 734 (94 ) 640 — 640 Total Current Derivative Assets 19,383 (12,094 ) 7,289 — 7,289 Non-trading commodity derivatives 9,657 (6,381 ) 3,276 — 3,276 Trading commodity derivatives — — — — — Total Non-current Derivative Assets 9,657 (6,381 ) 3,276 — 3,276 Total Derivative Assets $ 29,040 $ (18,475 ) $ 10,565 $ — $ 10,565 December 31, 2017 Description Gross Assets Gross Net Assets Cash Net Amount Non-trading commodity derivatives $ 60,167 $ (29,432 ) $ 30,735 $ — $ 30,735 Trading commodity derivatives 918 (462 ) 456 — 456 Total Current Derivative Assets 61,085 (29,894 ) 31,191 — 31,191 Non-trading commodity derivatives 16,055 (12,746 ) 3,309 — 3,309 Trading commodity derivatives — — — — — Total Non-current Derivative Assets 16,055 (12,746 ) 3,309 — 3,309 Total Derivative Assets $ 77,140 $ (42,640 ) $ 34,500 $ — $ 34,500 |
Offsetting Liabilities | Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (4,517 ) $ 3,059 $ (1,458 ) $ 65 $ (1,393 ) Trading commodity derivatives (517 ) 273 (244 ) — (244 ) Total Current Derivative Liabilities (5,034 ) 3,332 (1,702 ) 65 (1,637 ) Non-trading commodity derivatives (676 ) 732 56 — 56 Trading commodity derivatives (566 ) 18 (548 ) — (548 ) Total Non-current Derivative Liabilities (1,242 ) 750 (492 ) — (492 ) Total Derivative Liabilities $ (6,276 ) $ 4,082 $ (2,194 ) $ 65 $ (2,129 ) Description Gross Gross Net Cash Net Amount Non-trading commodity derivatives $ (21,391 ) $ 15,385 $ (6,006 ) $ — $ (6,006 ) Trading commodity derivatives (491 ) 19 (472 ) — (472 ) Total Current Derivative Liabilities (21,882 ) 15,404 (6,478 ) — (6,478 ) Non-trading commodity derivatives (71 ) 40 (31 ) (31 ) Trading commodity derivatives (135 ) 60 (75 ) — (75 ) Total Non-current Derivative Liabilities (206 ) 100 (106 ) — (106 ) Total Derivative Liabilities $ (22,088 ) $ 15,504 $ (6,584 ) $ — $ (6,584 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following amounts (in thousands): Estimated December 31, 2018 December 31, 2017 Information technology 2 – 5 $ 34,611 $ 34,103 Leasehold improvements 2 – 5 4,568 4,568 Furniture and fixtures 2 – 5 1,964 1,964 Building improvements 2 – 5 268 809 Total 41,411 41,444 Accumulated depreciation (37,045 ) (33,169 ) Property and equipment—net $ 4,366 $ 8,275 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill, Customer Relationships and Trademarks | Goodwill, customer relationships and trademarks consist of the following amounts (in thousands): December 31, 2018 December 31, 2017 Goodwill $ 120,343 $ 120,154 Customer Relationships — Acquired Cost $ 99,402 $ 93,371 Accumulated amortization (63,208 ) (46,681 ) Customer Relationships —Acquired & Non-Compete Agreements, net $ 36,194 $ 46,690 Customer Relationships —Other Cost $ 16,155 $ 12,336 Accumulated amortization (9,290 ) (5,534 ) Customer Relationships —Other, net $ 6,865 $ 6,802 Trademarks Cost $ 9,770 $ 9,770 Accumulated amortization (2,483 ) (1,212 ) Trademarks, net $ 7,287 $ 8,558 Changes in goodwill, customer relationships (including non-compete agreements) and trademarks consisted of the following (in thousands): Goodwill Customer Relationships— Acquired & Non-Compete Agreements Customer Relationships — Other Trademarks Balance at December 31, 2015 $ 18,379 $ 10,380 $ 3,049 $ 1,194 Acquisition of Provider Companies 26,040 24,417 — 529 Acquisition of Major Energy Companies 34,728 24,271 — 4,973 Amortization expense — (27,157 ) (1,437 ) (357 ) Balance at December 31, 2016 $ 79,147 $ 31,911 $ 1,612 $ 6,339 Adjustments (1) $ 260 $ — $ — $ — Acquisition of Perigee 1,540 1,100 — — Acquisition of Verde 39,207 28,700 — 3,000 Additions (Other) — — 8,016 — Amortization expense — (15,021 ) (2,826 ) (781 ) Balance at December 31, 2017 $ 120,154 $ 46,690 $ 6,802 $ 8,558 Additions — 6,205 3,818 — Adjustments (1) 189 (174 ) — — Amortization — (16,527 ) (3,755 ) (1,271 ) Balance at December 31, 2018 $ 120,343 $ 36,194 $ 6,865 $ 7,287 (1) Related to working capital adjustments on various acquisitions. |
Estimated Future Amortization Expense | Estimated future amortization expense for customer relationships and trademarks at December 31, 2018 is as follows (in thousands): Year Ending December 31, 2019 $ 18,133 2020 12,257 2021 10,682 2022 5,780 2023 450 > 5 years 3,044 Total $ 50,346 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following amounts as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Current: Senior Credit Facility—Bridge Loan (1) $ — $ 7,500 Note Payable—Verde 6,936 13,443 Total current portion of debt 6,936 20,943 Long-term debt: Senior Credit Facility (1) (2) 129,500 117,750 Subordinated Debt 10,000 — Note Payable—Verde — 7,051 Total long-term debt 139,500 124,801 Total debt $ 146,436 $ 145,744 (1) As of December 31, 2018 and 2017 , the weighted average interest rate on the Senior Credit Facility was 5.48% and 4.61% , respectively. (2) As of December 31, 2018 and 2017 , we had $49.4 million and $47.2 million in letters of credit issued, respectively. |
Components of Interest Expense | Interest expense consists of the following components for the periods indicated (in thousands): Years Ended December 31, 2018 2017 2016 Senior Credit Facility $ 5,300 $ 3,275 $ 1,730 Accretion related to Earnouts — 4,108 5,060 Letters of credit fees and commitment fees 1,604 1,125 883 Amortization of deferred financing costs 1,291 1,035 668 Convertible subordinated notes to affiliate — 1,052 518 Subordinated debt 26 167 — Verde promissory note 1,189 372 — Interest expense $ 9,410 $ 11,134 $ 8,859 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present assets and liabilities measured and recorded at fair value in our consolidated balance sheets on a recurring basis by and their level within the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Total December 31, 2018 Non-trading commodity derivative assets $ 104 $ 9,821 $ — $ 9,925 Trading commodity derivative assets 44 596 — 640 Total commodity derivative assets $ 148 $ 10,417 $ — $ 10,565 Non-trading commodity derivative liabilities $ (352 ) $ (5,685 ) $ — $ (6,037 ) Trading commodity derivative liabilities (75 ) (472 ) — (547 ) Total commodity derivative liabilities $ (427 ) $ (6,157 ) $ — $ (6,584 ) Contingent payment arrangement $ — $ — $ 1,328 $ 1,328 Level 1 Level 2 Level 3 Total December 31, 2017 Non-trading commodity derivative assets $ 158 $ 33,886 $ — $ 34,044 Trading commodity derivative assets — 456 — 456 Total commodity derivative assets $ 158 $ 34,342 $ — $ 34,500 Non-trading commodity derivative liabilities $ (387 ) $ (950 ) $ — $ (1,337 ) Trading commodity derivative liabilities (555 ) (237 ) — (792 ) Total commodity derivative liabilities $ (942 ) $ (1,187 ) $ — $ (2,129 ) Contingent payment arrangement $ — $ — $ (4,650 ) $ (4,650 ) |
Reconciliations of Liabilities Measured at Fair Value on a Recurring Basis | The following tables present a roll forward of our contingent payment arrangements, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Major Earnout and Stock Earnout Provider Earnout Verde Earnout Total Fair Value at December 31, 2016 $ 17,760 $ 4,893 $ — $ 22,653 Purchase price consideration $ — $ — $ 5,400 $ 5,400 Change in fair value of contingent consideration, net (9,555 ) 500 347 (8,708 ) Accretion of contingent earnout consideration (included within interest expense) 3,848 107 153 4,108 Payments and settlements (1) (7,403 ) (5,500 ) (5,900 ) (18,803 ) Fair Value at December 31, 2017 $ 4,650 $ — $ — $ 4,650 Change in fair value of contingent consideration, net $ (1,715 ) $ — $ — $ (1,715 ) Payments and settlements (1,607 ) — — (1,607 ) Fair Value at December 31, 2018 $ 1,328 $ — $ — $ 1,328 (1) Payments and settlements include pay downs at maturity and the termination of the Verde Earnout liability, which was replaced with the Verde Earnout Termination Note. See discussion above and in Note 10 "Debt." |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Equity Classified Restricted Stock Unit Activity and Unvested Restricted Stock Units | The following table summarizes equity classified restricted stock unit activity and unvested restricted stock units for the year ended December 31, 2018 : Number of Shares (in thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2017 640 $ 11.56 Granted 567 9.34 Dividend reinvestment issuances 53 9.11 Vested (324 ) 10.61 Forfeited (109 ) 12.75 Unvested at December 31, 2018 827 $ 10.09 The following table summarizes liability classified restricted stock unit activity and unvested restricted stock units for the year ended December 31, 2018 : Number of Shares (in thousands) Weighted Average Reporting Date Fair Value Unvested at December 31, 2017 224 $ 12.40 Granted 28 7.43 Dividend reinvestment issuances 8 7.43 Vested (70 ) 10.19 Forfeited (122 ) 11.17 Unvested at December 31, 2018 68 $ 7.43 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision (Benefit) for Income Taxes | The provision for income taxes included the following components: (in thousands) 2018 2017 2016 Current: Federal $ 3,862 $ 6,992 $ 5,361 State 1,099 1,952 1,683 Total Current 4,961 8,944 7,044 Deferred: Federal (2,792 ) 27,820 2,944 State (92 ) 2,001 438 Total Deferred (2,884 ) 29,821 3,382 Provision for income taxes $ 2,077 $ 38,765 $ 10,426 |
Schedule of Reconciliation of Income Tax Benefit | The following table reconciles the income tax benefit that would result from application of the statutory federal tax rate, 21% and 35% for the years ended December 31, 2018 and 2017 , respectively, to the amount included in the consolidated statement of operations: (in thousands) 2018 2017 Expected provision at federal statutory rate $ (2,586 ) $ 39,833 Increase (decrease) resulting from: Non-controlling interest 1,738 (19,810 ) Class A Preferred Stock dividends 1,579 1,758 Impact of U.S. Tax Reform — 14,454 Intra-entity transfer of customer contracts 473 — State income taxes, net of federal income tax effect 428 2,569 Non-deductible expenses 256 234 Other 189 (273 ) Provision for income taxes $ 2,077 $ 38,765 |
Schedule of Deferred Tax Assets | The components of our deferred tax assets as of December 31, 2018 and 2017 are as follows: (in thousands) 2018 2017 Deferred Tax Assets: Investment in Spark HoldCo $ 22,251 $ 16,132 Benefit of TRA Liability 7,016 8,175 Federal net operating loss carryforward — 660 State net operating loss carryforward — 166 Other 78 — Total deferred tax assets 29,345 25,133 Deferred Tax Liabilities: Derivative liabilities (715 ) (811 ) Intangibles (849 ) (2,287 ) Property and equipment (460 ) — Other — (58 ) Total deferred tax liabilities (2,024 ) (3,156 ) Total deferred tax assets/liabilities $ 27,321 $ 21,977 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Retail Gross Margin to Income Before Income Tax Expense | Below is a reconciliation of retail gross margin to (loss) income before income tax expense (in thousands): Years Ended December 31, (in thousands) 2018 2017 2016 Reconciliation of Retail Gross Margin to Income before taxes (Loss) income before income tax expense $ (12,315 ) $ 113,809 $ 76,099 Change in Tax Receivable Agreement Liability — (22,267 ) — Interest and other income (749 ) (256 ) (957 ) Interest expense 9,410 11,134 8,859 Operating (loss) income (3,654 ) 102,420 84,001 Depreciation and amortization 52,658 42,341 32,788 General and administrative 111,431 101,127 84,964 Less: Net asset optimization revenue (expenses) 4,511 (717 ) (586 ) Net, (losses) gain on non-trading derivative instruments (19,571 ) 5,588 22,254 Net, Cash settlements on non-trading derivative instruments (9,614 ) 16,508 (2,284 ) Retail Gross Margin $ 185,109 $ 224,509 $ 182,369 |
Financial Data for Business Segments | Financial data for business segments are as follows (in thousands): Year Ended December 31, 2018 Retail Retail Corporate Eliminations Consolidated Total Revenues $ 863,451 $ 137,966 $ 4,511 $ — $ 1,005,928 Retail cost of revenues 762,771 82,722 — — 845,493 Less: Net asset optimization revenue — — 4,511 — 4,511 Net, Losses on non-trading derivative instruments (15,200 ) (4,371 ) — — (19,571 ) Current period settlements on non-trading derivatives (8,788 ) (826 ) — — (9,614 ) Retail gross margin $ 124,668 $ 60,441 $ — $ — $ 185,109 Total Assets $ 1,857,790 $ 649,969 $ 361,697 $ (2,380,718 ) $ 488,738 Goodwill $ 117,813 $ 2,530 $ 120,343 Year Ended December 31, 2017 Retail Retail Corporate Eliminations Consolidated Total Revenues (1) $ 657,566 $ 141,206 $ (717 ) $ — $ 798,055 Retail cost of revenues 477,012 75,155 — — 552,167 Less: Net asset optimization expense (1) — — (717 ) — (717 ) Net, Gains (losses) on non-trading derivative instruments 5,784 (196 ) — — 5,588 Current period settlements on non-trading derivatives 16,302 206 — — 16,508 Retail gross margin $ 158,468 $ 66,041 $ — $ — $ 224,509 Total Assets (2) $ 1,218,243 $ 421,896 $ 281,176 $ (1,417,574 ) $ 503,741 Goodwill $ 117,624 $ 2,530 $ — $ — $ 120,154 Year Ended December 31, 2016 Retail Retail Corporate Eliminations Consolidated Total Revenues (1) $ 417,229 $ 130,054 $ (586 ) $ — $ 546,697 Retail cost of revenues 286,795 58,149 — — 344,944 Less: Net asset optimization expense (1) — — (586 ) — (586 ) Net, Gains on non-trading derivative instruments 17,187 5,067 — — 22,254 Current period settlements on non-trading derivatives (4,889 ) 2,605 — — (2,284 ) Retail gross margin $ 118,136 $ 64,233 $ — $ — $ 182,369 Total Assets (2) $ 551,338 $ 242,739 $ 192,101 $ (618,429 ) $ 367,749 Goodwill $ 76,617 $ 2,530 $ — $ — $ 79,147 (1) Previously reported amounts have been adjusted to reclassify net asset optimization actives from the Retail Natural Gas segment to Corporate and Other. (2) Previously reported amounts have been adjusted for immaterial corrections. See Footnote 2 "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion. |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Immaterial Corrections to Prior Year Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Deferred tax assets | $ 27,321 | $ 21,977 | $ 46,628 | |
Total Assets | 488,738 | 503,741 | 367,749 | |
Additional paid-in capital | 46,157 | 47,811 | 39,187 | $ 7,770 |
Retained earnings | 1,307 | 11,399 | 4,711 | (1,366) |
Total stockholders' equity | 45,806 | 57,536 | 44,245 | 6,682 |
Non-controlling interests | 44,488 | 101,559 | 72,010 | 24,708 |
Total equity | 90,294 | 159,095 | 116,255 | 31,390 |
Total liabilities, Series A Preferred Stock and stockholders' equity | 488,738 | 503,741 | 367,749 | |
Income tax expense | 2,077 | 38,765 | 10,426 | |
Net (loss) income | (14,392) | 75,044 | 65,673 | |
Net Income Available to Common Shareholders | (9,295) | 16,207 | 14,444 | |
Net income attributable to non-controlling interests | $ (13,206) | $ 55,799 | $ 51,229 | |
Net income attributable to Spark Energy, Inc. per share of Class A common stock | ||||
Basic (in dollars per share) | $ (0.69) | $ 1.23 | $ 1.27 | |
Diluted (in dollars per share) | $ (0.69) | $ 1.21 | $ 1.11 | |
Adjustments to reconcile net income to net cash flows from operating activities | ||||
Deferred income taxes | $ (2,328) | $ 29,821 | $ 3,382 | |
Net cash provided by operating activities | $ 59,763 | 62,131 | 66,950 | |
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Deferred tax assets | 24,185 | 54,109 | ||
Total Assets | 505,949 | 375,230 | ||
Additional paid-in capital | 26,914 | 25,272 | 12,426 | |
Retained earnings | 11,008 | 4,711 | (1,366) | |
Total stockholders' equity | 36,248 | 30,330 | 11,338 | |
Non-controlling interests | 125,055 | 93,406 | 21,981 | |
Total equity | 161,303 | 123,736 | 33,319 | |
Total liabilities, Series A Preferred Stock and stockholders' equity | 505,949 | 375,230 | ||
Income tax expense | 37,528 | |||
Net (loss) income | 76,281 | |||
Net Income Available to Common Shareholders | 15,816 | |||
Net income attributable to non-controlling interests | $ 57,427 | |||
Net income attributable to Spark Energy, Inc. per share of Class A common stock | ||||
Basic (in dollars per share) | $ 1.20 | |||
Diluted (in dollars per share) | $ 1.19 | |||
Adjustments to reconcile net income to net cash flows from operating activities | ||||
Deferred income taxes | $ 28,584 | |||
Net cash provided by operating activities | 63,912 | |||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Deferred tax assets | (2,208) | (7,481) | ||
Total Assets | (2,208) | (7,481) | ||
Additional paid-in capital | 20,897 | 13,915 | (4,656) | |
Retained earnings | 391 | 0 | 0 | |
Total stockholders' equity | 21,288 | 13,915 | (4,656) | |
Non-controlling interests | (23,496) | (21,396) | 2,727 | |
Total equity | (2,208) | (7,481) | $ (1,929) | |
Total liabilities, Series A Preferred Stock and stockholders' equity | (2,208) | $ (7,481) | ||
Income tax expense | 1,237 | |||
Net (loss) income | (1,237) | |||
Net Income Available to Common Shareholders | 391 | |||
Net income attributable to non-controlling interests | $ (1,628) | |||
Net income attributable to Spark Energy, Inc. per share of Class A common stock | ||||
Basic (in dollars per share) | $ 0.03 | |||
Diluted (in dollars per share) | $ 0.02 | |||
Adjustments to reconcile net income to net cash flows from operating activities | ||||
Deferred income taxes | $ 1,237 | |||
Net cash provided by operating activities | $ (1,781) |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Accounting Policies Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Bad debt expense | $ 10,135,000 | $ 6,550,000 | $ 1,261,000 | |
Inventory impairments | 0 | 0 | ||
Customer acquisition costs | $ 18,300,000 | 18,300,000 | 29,000,000 | |
Customer acquisition costs, current | 14,431,000 | 14,431,000 | 22,123,000 | |
Customer acquisition costs, noncurrent | 3,900,000 | 3,900,000 | 6,900,000 | |
Amortization of acquisition costs | 24,400,000 | 21,400,000 | 17,500,000 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | 26,400,000 | 26,400,000 | 34,800,000 | |
Intangible assets, current | 16,630,000 | 16,630,000 | 18,653,000 | |
Intangible assets, non-current | 26,429,000 | 26,429,000 | 34,839,000 | |
Goodwill impairment | 0 | |||
Asset optimization revenue | 113,700,000 | 178,300,000 | 133,000,000 | |
Asset optimization cost of revenues | 109,200,000 | 179,000,000 | 133,600,000 | |
Other current assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gas balancing receivable (payable) | 800,000 | 800,000 | 700,000 | |
Other current liabilities | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gas balancing receivable (payable) | (300,000) | $ (300,000) | (1,000,000) | |
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Property and equipment estimated useful lives | 2 years | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Property and equipment estimated useful lives | 5 years | |||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 20,300,000 | 17,800,000 | 28,600,000 | |
Impairment charges | 0 | 0 | 0 | |
Customer relationships | Major Energy Companies, Provider Companies, And Verde Companies | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 16,500,000 | (15,000,000) | 27,200,000 | |
Customer relationships | Retail cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | 15,800,000 | |||
Customer relationships | Retail cost of revenue | Major Energy Companies, Provider Companies, And Verde Companies | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ (1,200,000) | 300,000 | 15,800,000 | |
Customer relationships | Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 3 years | |||
Customer relationships | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 6 years | |||
Non-compete agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 3 years | |||
Intangible assets | 300,000 | $ 300,000 | 1,400,000 | |
Intangible assets, current | 300,000 | 300,000 | 1,100,000 | |
Intangible assets, non-current | 0 | 0 | 300,000 | |
Amortization expense | 1,100,000 | 1,200,000 | 900,000 | |
Trademarks | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 7,300,000 | 7,300,000 | 8,600,000 | |
Amortization expense | 1,271,000 | 781,000 | 357,000 | |
Impairment charges | $ 0 | $ 0 | $ 0 | |
Trademarks | Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 5 years | |||
Trademarks | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 10 years |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Standards Being Evaluated But Not Yet Adopted (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash from from investing activities | $ 18,981 | $ 77,558 | $ 33,489 | |
Accounting Standards Update 2016-02 | Scenario, Forecast | Subsequent Event | Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | $ 1,000 | |||
Lease liabilities | 1,000 | |||
Accounting Standards Update 2016-02 | Scenario, Forecast | Subsequent Event | Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | 1,500 | |||
Lease liabilities | $ 1,500 | |||
Investing Activities to Operating Activities | Accounting Standards Update 2016-15 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash from from investing activities | (1,800) | (800) | ||
Investing Activities to Financing Activities | Accounting Standards Update 2016-15 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash from from investing activities | $ (18,400) | $ (2,000) |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retail Electricity | |||
Disaggregation of Revenue [Line Items] | |||
Typical length of contract | The typical length of a contract to provide electricity is 12 months. | ||
Retail Natural Gas | |||
Disaggregation of Revenue [Line Items] | |||
Typical length of contract | The typical length of a contract to provide natural gas is 12 months. | ||
Retail Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Gross receipts taxes | $ 6.9 | $ 6.4 | $ 3.9 |
Retail Cost of Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Gross receipts taxes | $ 9.9 | $ 9 | $ 5.3 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,001,417 | $ 798,772 | $ 547,283 |
POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 658,466 | 523,583 | 365,034 |
Non-POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 342,951 | 275,189 | 182,249 |
Unbilled revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | (15,793) | 21,523 | 20,774 |
Commercial | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 405,763 | 245,780 | 174,890 |
Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 611,447 | 531,469 | 351,619 |
New England | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 416,903 | 250,742 | 137,118 |
Mid-Atlantic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 345,861 | 324,864 | 235,898 |
Midwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 113,061 | 97,298 | 83,199 |
Southwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 125,592 | 125,868 | 91,068 |
Retail Electricity | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 863,451 | 657,566 | 417,229 |
Retail Electricity | POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 586,901 | 447,581 | 307,836 |
Retail Electricity | Non-POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 276,550 | 209,985 | 109,393 |
Retail Electricity | Unbilled revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | (10,417) | 20,630 | 16,149 |
Retail Electricity | Commercial | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 355,607 | 195,356 | 119,543 |
Retail Electricity | Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 518,261 | 441,580 | 281,537 |
Retail Electricity | New England | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 395,682 | 229,546 | 115,360 |
Retail Electricity | Mid-Atlantic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 291,046 | 272,127 | 197,511 |
Retail Electricity | Midwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 73,167 | 59,506 | 45,881 |
Retail Electricity | Southwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 103,556 | 96,387 | 58,477 |
Retail Natural Gas | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 137,966 | 141,206 | 130,054 |
Retail Natural Gas | POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 71,565 | 76,002 | 57,198 |
Retail Natural Gas | Non-POR | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 66,401 | 65,204 | 72,856 |
Retail Natural Gas | Unbilled revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | (5,376) | 893 | 4,625 |
Retail Natural Gas | Commercial | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 50,156 | 50,424 | 55,347 |
Retail Natural Gas | Residential | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 93,186 | 89,889 | 70,082 |
Retail Natural Gas | New England | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 21,221 | 21,196 | 21,758 |
Retail Natural Gas | Mid-Atlantic | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 54,815 | 52,737 | 38,387 |
Retail Natural Gas | Midwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 39,894 | 37,792 | 37,318 |
Retail Natural Gas | Southwest | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 22,036 | $ 29,481 | $ 32,591 |
Acquisitions - Acquisition of P
Acquisitions - Acquisition of Provider Companies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Contingent consideration—earnout obligations incurred in connection with the acquisitions | $ 0 | $ 0 | $ 18,936,000 | |
Provider Companies | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 34,100,000 | |||
Initial working capital estimate | 1,300,000 | |||
Earnout amount | 9,000,000 | |||
Payment of earnout | $ 5,500,000 | |||
Revenue | 46,800,000 | |||
Operating loss | $ 12,800,000 | |||
Provider Companies | Recurring | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration—earnout obligations incurred in connection with the acquisitions | $ 4,800,000 |
Acquisitions - Allocation of th
Acquisitions - Allocation of the Purchase Consideration (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2018 | Mar. 01, 2018 | Dec. 31, 2017 | Feb. 03, 2017 | Dec. 31, 2016 | Apr. 16, 2016 | Dec. 31, 2015 | |
Final Purchase Price Allocation | ||||||||
Goodwill | $ 120,343 | $ 120,343 | $ 120,154 | $ 79,147 | $ 18,379 | |||
Provider Companies | ||||||||
Final Purchase Price Allocation | ||||||||
Cash and restricted cash | 431 | |||||||
Goodwill | 26,040 | |||||||
Net working capital, net of cash acquired | 812 | |||||||
Fair value of derivative liabilities | (18,163) | |||||||
Total | 34,066 | |||||||
Provider Companies | Customer relationships and non-compete agreements | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | 24,417 | |||||||
Provider Companies | Trademarks | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | $ 529 | |||||||
Verde Companies | ||||||||
Final Purchase Price Allocation | ||||||||
Cash and restricted cash | 1,653 | 1,653 | 1,653 | |||||
Property and equipment | 4,560 | 4,560 | 4,560 | |||||
Goodwill | 39,396 | 39,396 | 39,207 | |||||
Net working capital, net of cash acquired | 18,473 | 18,473 | 19,132 | |||||
Deferred tax liability | (3,126) | (3,126) | (3,126) | |||||
Fair value of derivative liabilities | (1,942) | (1,942) | (1,942) | |||||
Total | 90,714 | 90,714 | 91,184 | |||||
Adjustments | ||||||||
Goodwill | 189 | |||||||
Net working capital, net of cash acquired | (659) | |||||||
Total | (470) | |||||||
Verde Companies | Trademarks | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | 3,000 | 3,000 | 3,000 | |||||
Verde Companies | Customer relationships | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | 28,700 | 28,700 | $ 28,700 | |||||
HIKO | ||||||||
Final Purchase Price Allocation | ||||||||
Cash and restricted cash | 375 | 375 | $ 309 | |||||
Intangible assets | 6,031 | 6,031 | 6,205 | |||||
Net working capital, net of cash acquired | 8,465 | 8,465 | 9,041 | |||||
Fair value of derivative liabilities | (205) | (205) | (205) | |||||
Total | 14,666 | $ 14,666 | $ 15,350 | |||||
Adjustments | ||||||||
Cash and restricted cash | 66 | |||||||
Intangible assets—customer relationships | (174) | |||||||
Net working capital, net of cash acquired | (576) | |||||||
Total | $ (684) | |||||||
National Gas & Electric, LLC | Major Energy Companies | ||||||||
Final Purchase Price Allocation | ||||||||
Cash and restricted cash | $ 17,368 | |||||||
Property and equipment | 14 | |||||||
Non-current deferred tax assets | 1,042 | |||||||
Goodwill | 34,988 | |||||||
Net working capital, net of cash acquired | (6,746) | |||||||
Fair value of derivative liabilities | (7,260) | |||||||
Total | 68,650 | |||||||
National Gas & Electric, LLC | Major Energy Companies | Customer relationships and non-compete agreements | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | 24,271 | |||||||
National Gas & Electric, LLC | Major Energy Companies | Trademarks | ||||||||
Final Purchase Price Allocation | ||||||||
Other assets—trademarks | $ 4,973 | |||||||
National Gas & Electric, LLC | Perigee | ||||||||
Final Purchase Price Allocation | ||||||||
Cash and restricted cash | $ 23 | |||||||
Goodwill | 1,540 | |||||||
Net working capital, net of cash acquired | 2,085 | |||||||
Fair value of derivative liabilities | (443) | |||||||
Total | 4,305 | |||||||
National Gas & Electric, LLC | Perigee | Customer relationships | ||||||||
Final Purchase Price Allocation | ||||||||
Intangible assets | $ 1,100 |
Acquisitions - Acquisition of M
Acquisitions - Acquisition of Major Energy Companies (Details) - Major Energy Companies $ in Millions | Apr. 15, 2016USD ($)shares | Aug. 31, 2016USD ($)utility | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Number of utilities | utility | 43 | ||||
Consideration amount | $ 64.1 | ||||
Working capital | 5.2 | ||||
Litigation reserve | 5 | ||||
Installment and earnout payments (up to) | $ 35 | ||||
Installment and earnout payments purchase date value | $ 13.1 | ||||
Employment contract termination costs | $ 4.1 | ||||
Paid employment contract termination costs | $ 1.4 | $ 2.5 | |||
Liability related to contract termination costs | $ 0.2 | ||||
Contributed revenues | 125.6 | ||||
Contributed earnings | $ 1.3 | ||||
Maximum | Common Class B | |||||
Business Acquisition [Line Items] | |||||
Share amount maximum (in shares) | shares | 400,000 | ||||
Share value | $ 0.8 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Verde Companies | |||
Business Acquisition [Line Items] | |||
Revenue | $ 868,415 | $ 716,696 | |
Earnings | $ 18,047 | 17,860 | |
National Gas & Electric, LLC | Major Energy Companies | |||
Business Acquisition [Line Items] | |||
Revenue | 603,673 | $ 547,381 | |
Earnings | $ 15,776 | $ 15,460 |
Acquisitions - Acquisition of_2
Acquisitions - Acquisition of Perigree (Details) - Perigee $ in Millions | 1 Months Ended | 12 Months Ended |
Apr. 30, 2017USD ($)utility | Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Purchase price | $ 4.1 | |
National Gas & Electric, LLC | ||
Business Acquisition [Line Items] | ||
Number of utilities | utility | 14 | |
Purchase price | $ 4.1 | |
Purchase price, base price | 2 | |
Purchase price, additional customer option payment | 0.2 | |
Initial working capital estimate | $ 1.9 |
Acquisitions - Acquisition of V
Acquisitions - Acquisition of Verde (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Contingent consideration—earnout obligations incurred in connection with the acquisitions | $ 0 | $ 0 | $ 18,936 | ||
Verde Companies | |||||
Business Acquisition [Line Items] | |||||
Contributed revenues | 76,000 | ||||
Contributed earnings | $ 1,200 | ||||
Verde Companies | |||||
Business Acquisition [Line Items] | |||||
Total consideration | $ 90,700 | ||||
Net working capital | $ 20,100 | ||||
Adjusted EBITDA obligation term | 18 months | ||||
Contingent consideration—earnout obligations incurred in connection with the acquisitions | $ 5,400 | ||||
Contingent consideration—earnout obligations incurred in connection with the acquisitions | $ 5,900 |
Acquisitions - Acquisition of H
Acquisitions - Acquisition of HIKO (Details) - HIKO kWh in Millions, $ in Millions | 1 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)kWhmarketstate | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | ||
Purchase price | $ 6 | |
Residential customer equivalent (in kwh) | kWh | 290 | |
Number of markets | market | 42 | |
Number of states | state | 7 | |
Revenue | $ 15.3 | |
Net income | $ 3.8 |
Acquisitions - Acquisition of C
Acquisitions - Acquisition of Customers from Perigee (Details) - Perigee - Customer Relationships kWh in Millions, $ in Millions | 1 Months Ended |
Apr. 30, 2017USD ($)kWh | |
Business Acquisition [Line Items] | |
Residential customer equivalent (in kwh) | kWh | 440 |
Contract purchase price | $ | $ 7.5 |
Acquisitions - Acquisition from
Acquisitions - Acquisition from Related Parties (Details) - Affiliated Entity - National Gas & Electric, LLC - Asset Purchase Agreement kWh in Millions, $ in Millions | 1 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($)usd_per_rcekWhmarketstate | Dec. 31, 2018USD ($)kWh | |
Business Acquisition [Line Items] | ||
Residential customer equivalent (in kwh) | kWh | 500 | 350 |
Purchase price per RCE (in dollars per RCE) | usd_per_rce | 250 | |
Purchase price | $ 12.5 | |
Number of markets | market | 24 | |
Number of states | state | 8 | |
Due to related parties | $ 8.8 | |
Assets at date of transfer | $ 1.7 | |
Net distribution to NG&E recorded in equity | $ 7.1 |
Acquisitions - Acquisitions of
Acquisitions - Acquisitions of Customer Books (Details) $ in Thousands, kWh in Millions | 1 Months Ended | ||
Oct. 31, 2018USD ($)kWh | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |||
Restricted cash | $ 8,636 | $ 0 | |
Starion Energy Inc. | |||
Business Acquisition [Line Items] | |||
Residential customer equivalent (in kwh) | kWh | 600 | ||
Purchase price | $ 10,700 | ||
Restricted cash | $ 8,600 |
Equity - Schedule of Economic I
Equity - Schedule of Economic Interests (Details) - Spark HoldCo | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||
Economic interests percentage | 40.53% | 38.12% |
Affiliated Owners | ||
Class of Stock [Line Items] | ||
Economic interests percentage | 59.47% | 61.88% |
Preferred Stock - Narrative (De
Preferred Stock - Narrative (Details) - USD ($) | Jan. 17, 2019 | Jan. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2017 |
Class of Stock [Line Items] | |||||||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Net proceeds from offering | $ 39,000,000 | $ 48,490,000 | $ 40,241,000 | $ 0 | |||
Offering expenses (less than for the years ended December 31, 2018 and 2017) | $ 1,000,000 | ||||||
Aggregate offering price | $ 50,000,000 | ||||||
Dividends paid | 8,110,000 | 3,038,000 | |||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Quarterly cash dividend (in dollars per share) | $ 0.546875 | ||||||
Annualized dividend (in dollars per share) | $ 2.1875 | ||||||
Series A Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Shares issued (in shares) | 2,000,000 | 1,610,000 | |||||
Preferred stock, dividend accrual rate | 8.75% | 8.75% | |||||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | ||||||
Preferred stock, liquidation preference (in dollars per share) | 25 | ||||||
Preferred stock, price to the public (in dollars per share) | $ 25.25 | 25 | |||||
Preferred stock, price to the public, net of issuance costs (in dollars per share) | $ 24.45 | ||||||
Net proceeds from offering | $ 48,900,000 | ||||||
Preferred stock, price, net of underwriting discounts and commissions (in dollars per share) | $ 24.21 | ||||||
Offering expenses (less than for the years ended December 31, 2018 and 2017) | $ 500,000 | ||||||
Dividends paid | 7,000,000 | 2,100,000 | |||||
Dividend accrual | $ 2,000,000 | $ 900,000 | |||||
Series A Preferred Stock | ATM Agreement | |||||||
Class of Stock [Line Items] | |||||||
Shares issued (in shares) | 2,917 | 94,339 | |||||
Net proceeds from offering | $ 100,000 | $ 2,400,000 | |||||
Offering expenses (less than for the years ended December 31, 2018 and 2017) | $ 100,000 | $ 100,000 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 17, 2019$ / shares | Jan. 31, 2017shares | Jan. 08, 2017shares | May 31, 2017 | Aug. 31, 2016shares | Dec. 31, 2018USD ($)vote$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares |
Class of Stock [Line Items] | ||||||||
Stock split conversion ratio | 2 | |||||||
Number of shares of common stock exchanged (in shares) | 685,126 | 6,450,000 | ||||||
Dividends paid | $ | $ 9,783 | $ 9,519 | $ 8,367 | |||||
Annual dividend rate (in dollars per share) | $ / shares | $ 0.725 | |||||||
Preferred stock, shares authorized (in shares) | 20,000,000 | |||||||
Preferred stock, shares issued (in shares) | 3,707,256 | 1,704,339 | ||||||
Preferred stock, shares outstanding (in shares) | 3,707,256 | 1,704,339 | ||||||
Restricted Units and Liability Awards | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares vested (in shares) | 394,243 | 356,014 | 395,056 | |||||
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 258,076 | |||||||
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 136,167 | |||||||
Restricted Stock Units | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares vested (in shares) | 323,894 | 356,014 | 395,056 | |||||
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 258,076 | 241,965 | 305,872 | |||||
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 136,167 | 114,049 | 89,184 | |||||
Class A Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Common stock, exchange ratio | 1 | |||||||
Class A Common Stock | Restricted Stock Units | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 213,076 | |||||||
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 110,818 | |||||||
Class A Common Stock | Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.18125 | |||||||
Class B Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Common stock voting rights ratio | vote | 1 | |||||||
Class B Common Stock | Provider Companies | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for acquisition (in shares) | 1,399,484 | |||||||
Class B Common Stock | Major Energy Companies | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued for acquisition (in shares) | 4,000,000 | |||||||
Class B Common Stock | CenStar Note | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares, irrevocable commitment to convert (in shares) | 1,035,642 | 269,462 | ||||||
Class B Common Stock | Oasis Note | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares, irrevocable commitment to convert (in shares) | 766,180 | |||||||
Class B Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 20,800,000 | |||||||
Restricted Stock Units | ||||||||
Class of Stock [Line Items] | ||||||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 900,000 |
Preferred Stock - Summary of Pr
Preferred Stock - Summary of Preferred Equity Balance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 41,173 | |
Issuance of Series A Preferred Stock, net of issuance cost | 48,490 | $ 40,241 |
Accumulated dividends on Series A Preferred Stock | 1,095 | 932 |
Ending balance | $ 90,758 | $ 0 |
Equity - Schedule of Net Income
Equity - Schedule of Net Income and Income Tax Expense (Benefit) Attributable to Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Net (loss) income allocated to non-controlling interest | $ (12,140) | $ 55,068 | $ 52,300 |
Income tax expense (benefit) allocated to non-controlling interest | 1,066 | (731) | 1,071 |
Net (loss) income attributable to non-controlling interest | $ (13,206) | $ 55,799 | $ 51,229 |
Equity - Non-controlling Intere
Equity - Non-controlling Interest Narrative (Details) | 12 Months Ended | |
Dec. 31, 2018vote$ / shares | Dec. 31, 2017$ / shares | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock voting rights ratio | vote | 1 | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, exchange ratio | 1 |
Equity - Computation of Earning
Equity - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2017 | Jan. 08, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income attributable to Spark Energy, Inc. stockholders | $ (1,186) | $ 19,245 | $ 14,444 | ||
Less: Dividend on Series A preferred stock | 8,109 | 3,038 | 0 | ||
Net (loss) income attributable to stockholders of Class A common stock | $ (9,295) | $ 16,207 | $ 14,444 | ||
Basic weighted average Class A common shares outstanding (in shares) | 13,390,000 | 13,143,000 | 11,402,000 | ||
Basic (loss) earnings per share attributable to stockholders (in dollars per share) | $ (0.69) | $ 1.23 | $ 1.27 | ||
Effect of conversion of Class B common stock to shares of Class A common stock | $ 0 | $ 0 | $ 0 | ||
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 | 0 | 0 | (310) | ||
Diluted net (loss) income attributable to stockholders of Class A common stock | $ (9,295) | $ 16,207 | $ 14,134 | ||
Basic weighted average Class A common shares outstanding | 13,390,000 | 13,143,000 | 11,402,000 | ||
Effect of dilutive Class B common stock (in shares) | 0 | 0 | 0 | ||
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 | 0 | 0 | 1,010,000 | ||
Effect of dilutive restricted stock units (in shares) | 0 | 203,000 | 278,000 | ||
Diluted weighted average shares outstanding | 13,390,000 | 13,346,000 | 12,690,000 | ||
Diluted (loss) earnings per share attributable to stockholders (in dollars per share) | $ (0.69) | $ 1.21 | $ 1.11 | ||
Class B Common Stock | CenStar Note | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Number of shares converted (in shares) | 1,035,642 | 269,462 | |||
Class B Common Stock | Oasis Note | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Number of shares converted (in shares) | 766,180 |
Equity - Carrying Amounts and C
Equity - Carrying Amounts and Classification of Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Total Assets | $ 448,055 | $ 476,070 |
Total Liabilities | 280,169 | 249,648 |
Total current assets | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 280,553 | 293,364 |
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 36,724 | 29,385 |
Accounts receivable | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 150,866 | 158,814 |
Other current assets | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 92,963 | 105,165 |
Total non-current assets | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 167,502 | 182,706 |
Goodwill | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 120,343 | 120,154 |
Other assets | ||
Variable Interest Entity [Line Items] | ||
Total Assets | 47,159 | 62,552 |
Total current liabilities | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 140,350 | 130,609 |
Accounts Payable and Accrued Liabilities | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 122,497 | 110,152 |
Current portion of Senior Credit Facility | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 0 | 7,500 |
Contingent consideration | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 1,328 | 4,024 |
Other current liabilities | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 16,525 | 8,933 |
Total long-term liabilities | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 139,819 | 119,039 |
Long-term portion of Senior Credit Facility | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 129,500 | 117,750 |
Subordinated debt—affiliate | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 10,000 | 0 |
Contingent consideration | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | 0 | 626 |
Other long-term liabilities | ||
Variable Interest Entity [Line Items] | ||
Total Liabilities | $ 319 | $ 663 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) | Dec. 31, 2018USD ($)derivative_instrument | Dec. 31, 2017USD ($) |
Derivative [Line Items] | ||
Collateral paid | $ 0 | $ 100,000 |
Not Designated as Hedging Instrument | Interest Rate Swap | ||
Derivative [Line Items] | ||
Number of derivative instruments | derivative_instrument | 2 | |
Notional amount | $ 10,000,000 | |
Fair value liability (less than) | $ 100,000 |
Derivative Instruments - Volume
Derivative Instruments - Volumetric Underlying Derivative Transactions (Details) MWh in Thousands, MMBTU in Thousands | 12 Months Ended | |
Dec. 31, 2018MWhMMBTU | Dec. 31, 2017MWhMMBTU | |
Non-trading | Buy | Natural Gas | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 8,176 | 9,191 |
Non-trading | Buy | Natural Gas Basis | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 115 | 0 |
Non-trading | Buy | Electricity | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | MWh | 6,781 | 8,091 |
Trading | Buy | Natural Gas | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 188 | 26 |
Trading | Sell | Natural Gas Basis | ||
Derivatives, Fair Value [Line Items] | ||
Net notional volume | 380 | 225 |
Derivative Instruments - Gains
Derivative Instruments - Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain on derivatives, net | $ (18,170) | $ 5,008 | $ 22,407 |
Total current period settlements on derivatives | (10,587) | 16,309 | (2,146) |
Non-trading | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain on derivatives, net | (19,571) | 5,588 | 22,254 |
Total current period settlements on derivatives | (9,614) | 16,508 | (2,284) |
Non-trading | Censtar and Oasis | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain on derivatives, net | (300) | 3,400 | 26,600 |
Non-cash Flow Hedging | Non-trading | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain on derivatives, net | (19,571) | 5,588 | 22,254 |
Total current period settlements on derivatives | (9,614) | 16,508 | (2,284) |
Non-cash Flow Hedging | Trading | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain on derivatives, net | 1,401 | (580) | 153 |
Total current period settlements on derivatives | $ (973) | $ (199) | $ 138 |
Derivative Instruments - Offset
Derivative Instruments - Offsetting Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commodity Contract | ||
Offsetting Assets [Line Items] | ||
Gross Assets | $ 29,040 | $ 77,140 |
Gross Amounts Offset | (18,475) | (42,640) |
Net Assets | 10,565 | 34,500 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 10,565 | 34,500 |
Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 19,383 | 61,085 |
Gross Amounts Offset | (12,094) | (29,894) |
Net Assets | 7,289 | 31,191 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 7,289 | 31,191 |
Non-trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 18,649 | 60,167 |
Gross Amounts Offset | (12,000) | (29,432) |
Net Assets | 6,649 | 30,735 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 6,649 | 30,735 |
Trading Commodity Contract, Current | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 734 | 918 |
Gross Amounts Offset | (94) | (462) |
Net Assets | 640 | 456 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 640 | 456 |
Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 9,657 | 16,055 |
Gross Amounts Offset | (6,381) | (12,746) |
Net Assets | 3,276 | 3,309 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 3,276 | 3,309 |
Non-trading Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 9,657 | 16,055 |
Gross Amounts Offset | (6,381) | (12,746) |
Net Assets | 3,276 | 3,309 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | 3,276 | 3,309 |
Trading Commodity Contract, Noncurrent | ||
Offsetting Assets [Line Items] | ||
Gross Assets | 0 | 0 |
Gross Amounts Offset | 0 | 0 |
Net Assets | 0 | 0 |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ 0 | $ 0 |
Derivative Instruments - Offs_2
Derivative Instruments - Offsetting Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commodity Contract | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | $ (22,088) | $ (6,276) |
Gross Amounts Offset | 15,504 | 4,082 |
Net Liabilities | (6,584) | (2,194) |
Cash Collateral Offset | 0 | 65 |
Net Amount Presented | (6,584) | (2,129) |
Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (21,882) | (5,034) |
Gross Amounts Offset | 15,404 | 3,332 |
Net Liabilities | (6,478) | (1,702) |
Cash Collateral Offset | 0 | 65 |
Net Amount Presented | (6,478) | (1,637) |
Non-trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (21,391) | (4,517) |
Gross Amounts Offset | 15,385 | 3,059 |
Net Liabilities | (6,006) | (1,458) |
Cash Collateral Offset | 0 | 65 |
Net Amount Presented | (6,006) | (1,393) |
Trading Commodity Contract, Current | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (491) | (517) |
Gross Amounts Offset | 19 | 273 |
Net Liabilities | (472) | (244) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | (472) | (244) |
Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (206) | (1,242) |
Gross Amounts Offset | 100 | 750 |
Net Liabilities | (106) | (492) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | (106) | (492) |
Non-trading Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (71) | (676) |
Gross Amounts Offset | 40 | 732 |
Net Liabilities | (31) | 56 |
Cash Collateral Offset | 0 | |
Net Amount Presented | (31) | 56 |
Trading Commodity Contract, Noncurrent | ||
Offsetting Liabilities [Line Items] | ||
Gross Liabilities | (135) | (566) |
Gross Amounts Offset | 60 | 18 |
Net Liabilities | (75) | (548) |
Cash Collateral Offset | 0 | 0 |
Net Amount Presented | $ (75) | $ (548) |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 41,411 | $ 41,444 |
Accumulated depreciation | (37,045) | (33,169) |
Property and equipment—net | $ 4,366 | 8,275 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 2 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 5 years | |
Information technology | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 34,611 | 34,103 |
Information technology | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 2 years | |
Information technology | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 4,568 | 4,568 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 2 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,964 | 1,964 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 2 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 5 years | |
Building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 268 | $ 809 |
Building improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 2 years | |
Building improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (years) | 5 years |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 3.9 | $ 2.6 | $ 2.1 |
Information technology | |||
Property, Plant and Equipment [Line Items] | |||
Assets not yet placed into service | $ 0.3 | $ 1.2 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Goodwill, Customer Relationships and Trademarks (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 120,343 | $ 120,154 | $ 79,147 | $ 18,379 |
Finite-Lived Intangible Assets [Line Items] | ||||
Total | 50,346 | |||
Customer Relationships— Acquired & Non-Compete Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 99,402 | 93,371 | ||
Accumulated amortization | (63,208) | (46,681) | ||
Total | 36,194 | 46,690 | 31,911 | 10,380 |
Customer Relationships— Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 16,155 | 12,336 | ||
Accumulated amortization | (9,290) | (5,534) | ||
Total | 6,865 | 6,802 | 1,612 | 3,049 |
Trademarks | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 9,770 | 9,770 | ||
Accumulated amortization | (2,483) | (1,212) | ||
Total | $ 7,287 | $ 8,558 | $ 6,339 | $ 1,194 |
Intangible Assets - Changes in
Intangible Assets - Changes in Goodwill, Customer Relationships and Trademarks (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period | $ 120,154 | $ 79,147 | $ 18,379 |
Adjustments | 189 | 260 | |
Balance at end of period | 120,343 | 120,154 | 79,147 |
Finite-lived Intangible Assets [Roll Forward] | |||
Balance at end of period | 50,346 | ||
Customer Relationships— Acquired & Non-Compete Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Balance at beginning of period | 46,690 | 31,911 | 10,380 |
Acquisitions | 6,205 | ||
Adjustments | (174) | ||
Amortization expense | (16,527) | (15,021) | (27,157) |
Balance at end of period | 36,194 | 46,690 | 31,911 |
Customer Relationships— Other | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Balance at beginning of period | 6,802 | 1,612 | 3,049 |
Acquisitions | 3,818 | ||
Amortization expense | (3,755) | (2,826) | (1,437) |
Balance at end of period | 6,865 | 6,802 | 1,612 |
Trademarks | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Balance at beginning of period | 8,558 | 6,339 | 1,194 |
Amortization expense | (1,271) | (781) | (357) |
Balance at end of period | 7,287 | 8,558 | 6,339 |
Provider Companies | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 26,040 | ||
Acquisition | 26,040 | ||
Balance at end of period | 26,040 | ||
Provider Companies | Customer Relationships— Acquired & Non-Compete Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 24,417 | ||
Provider Companies | Trademarks | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 529 | ||
Major Energy Companies | |||
Goodwill [Roll Forward] | |||
Acquisition | 34,728 | ||
Major Energy Companies | Customer Relationships— Acquired & Non-Compete Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 24,271 | ||
Major Energy Companies | Trademarks | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | $ 4,973 | ||
Perigee | |||
Goodwill [Roll Forward] | |||
Acquisition | 1,540 | ||
Perigee | Customer Relationships— Acquired & Non-Compete Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 1,100 | ||
Verde | |||
Goodwill [Roll Forward] | |||
Balance at beginning of period | 39,207 | ||
Acquisition | 39,207 | ||
Balance at end of period | $ 39,396 | 39,207 | |
Verde | Customer Relationships— Acquired & Non-Compete Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 28,700 | ||
Verde | Trademarks | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | 3,000 | ||
GAP | Customer Relationships— Other | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Acquisitions | $ 8,016 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - Customer relationships - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 20.3 | $ 17.8 | $ 28.6 |
Major Energy Companies, Provider Companies, And Verde Companies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 16.5 | (15) | 27.2 |
Cost of revenues | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 15.8 | ||
Cost of revenues | Major Energy Companies, Provider Companies, And Verde Companies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ (1.2) | $ 0.3 | $ 15.8 |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Year Ending December 31, | |
2,019 | $ 18,133 |
2,020 | 12,257 |
2,021 | 10,682 |
2,022 | 5,780 |
2,023 | 450 |
More than 5 years | 3,044 |
Total | $ 50,346 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total current portion of debt | $ 6,936 | $ 20,943 |
Total long-term debt | 139,500 | 124,801 |
Total debt | 146,436 | 145,744 |
Letters of credit issued | 49,400 | 47,200 |
Senior Credit Facility | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 129,500 | $ 117,750 |
Weighted average interest rate on current portion of debt | 5.48% | 4.61% |
Senior Credit Facility | Bridge Loan | ||
Debt Instrument [Line Items] | ||
Total current portion of debt | $ 0 | $ 7,500 |
Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 10,000 | 0 |
Note Payable—Verde | Verde | ||
Debt Instrument [Line Items] | ||
Total current portion of debt | 6,936 | 13,443 |
Total long-term debt | $ 0 | $ 7,051 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Capitalized financing costs | $ 1.4 | $ 1.6 |
Capitalized financing costs, current | 1 | 1.2 |
Capitalized financing costs, noncurrent | $ 0.4 | $ 0.4 |
Debt - Components of Interest E
Debt - Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |||
Accretion related to Earnouts | $ 0 | $ 4,108 | $ 5,060 |
Letters of credit fees and commitment fees | 1,604 | 1,125 | 883 |
Amortization of deferred financing costs | 1,291 | 1,035 | 668 |
Interest expense | 9,410 | 11,134 | 8,859 |
Senior Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Interest incurred on long-term debt | 5,300 | 3,275 | 1,730 |
Convertible Subordinated Notes | |||
Line of Credit Facility [Line Items] | |||
Convertible subordinated notes to affiliate | 0 | 1,052 | 518 |
Subordinated Debt | |||
Line of Credit Facility [Line Items] | |||
Interest incurred on long-term debt | 26 | 167 | 0 |
Promissory Note | |||
Line of Credit Facility [Line Items] | |||
Interest incurred on long-term debt | $ 1,189 | $ 372 | $ 0 |
Debt - Senior Credit Facility (
Debt - Senior Credit Facility (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2016 | Jan. 28, 2019 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Letters of credit issued | $ 49,400,000 | $ 47,200,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Remaining borrowing capacity | 192,500,000 | |||
Line of credit outstanding | $ 129,500,000 | |||
Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum leverage ratio | 250.00% | |||
Senior secured leverage ratio | 185.00% | |||
Percentage of obligations, limit | 50.00% | |||
Debt default, material judgment (in excess of) | $ 5,000,000 | |||
Working Capital Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit outstanding | $ 0 | |||
Repayment percent | 25.00% | |||
Quarterly repayment percent | 6.25% | |||
Nonutilization fee | 0.50% | |||
Line of credit facility, maximum borrowing capacity | $ 82,500,000 | |||
Acquisition Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Financing of cost of acquisitions, maximum percentage | 75.00% | |||
Eurodollar | Working Capital Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.00% | |||
Base Rate | Working Capital Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.00% | |||
Federal Funds Rate | Working Capital Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Federal Funds Rate | Acquisition Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Reference Eurodollar Rate | Working Capital Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Reference Eurodollar Rate | Acquisition Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Common Class A | Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Number of shares entitled to repurchase (in shares) | 10,000,000 | |||
Series A Preferred Stock | Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Stock repurchase program, authorized amount | $ 92,700,000 | |||
Common Class A and Common Class B | Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Default share limit, minimum amount (in shares) | 13,600,000 | |||
Maximum | Eurodollar | Acquisition Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Maximum | Base Rate | Acquisition Line | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Minimum | Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Fixed charge coverage ratio (not less than) | 125.00% | |||
Subsequent Event | Senior Secured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 217,500,000 |
Debt - Convertible Subordinated
Debt - Convertible Subordinated Notes to Affiliate (Details) - Censtar Convertible Debt - USD ($) $ in Millions | Oct. 05, 2016 | Jul. 08, 2015 |
Class B Common Stock | ||
Debt Instrument [Line Items] | ||
Number of shares converted (in shares) | 1,035,642 | |
Convertible Subordinated Notes | ||
Debt Instrument [Line Items] | ||
Stated percentage interest rate | 5.00% | |
Convertible Subordinated Notes | CenStar | ||
Debt Instrument [Line Items] | ||
Convertible subordinated notes to affiliates | $ 7.1 |
Debt - Subordinated Debt Facili
Debt - Subordinated Debt Facility (Details) - USD ($) | Dec. 27, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Subordinated debt, noncurrent | $ 10,000,000 | $ 0 | |
Subordinated Debt | Retailco | |||
Debt Instrument [Line Items] | |||
Subordinated debt | $ 25,000,000 | ||
Subordinated debt, advances | $ 1,000,000 | ||
Subordinated debt, interest rate on advances | 5.00% | ||
Minimum availability under the borrowing base | $ 5,000,000 |
Debt - Verde Promissory Notes (
Debt - Verde Promissory Notes (Details) | 1 Months Ended | |||
Jul. 31, 2017USD ($)payment | Dec. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||||
Promissory note payable | $ 146,436,000 | $ 145,744,000 | ||
Notes Payable | Verde Promissory Note | ||||
Debt Instrument [Line Items] | ||||
Debt issued | $ 20,000,000 | |||
Number of payments | payment | 18 | |||
Stated percentage interest rate | 5.00% | 9.00% | ||
Promissory note payable | $ 14,600,000 | |||
Notes Payable | Verde Earnout Termination Note | ||||
Debt Instrument [Line Items] | ||||
Promissory note payable | $ 1,000,000 | $ 5,900,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | $ 10,565 | $ 34,500 | |
Total commodity derivative liabilities | (6,584) | (2,129) | |
Contingent payment arrangement | 1,328 | 4,650 | |
Non-trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 9,925 | 34,044 | |
Total commodity derivative liabilities | (6,037) | (1,337) | |
Trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 640 | 456 | |
Total commodity derivative liabilities | (547) | (792) | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 148 | 158 | |
Total commodity derivative liabilities | (427) | (942) | |
Contingent payment arrangement | 0 | 0 | |
Level 1 | Non-trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 104 | 158 | |
Total commodity derivative liabilities | (352) | (387) | |
Level 1 | Trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 44 | 0 | |
Total commodity derivative liabilities | (75) | (555) | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 10,417 | 34,342 | |
Total commodity derivative liabilities | (6,157) | (1,187) | |
Contingent payment arrangement | 0 | 0 | |
Level 2 | Non-trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 9,821 | 33,886 | |
Total commodity derivative liabilities | (5,685) | (950) | |
Level 2 | Trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 596 | 456 | |
Total commodity derivative liabilities | (472) | (237) | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 0 | 0 | |
Total commodity derivative liabilities | 0 | 0 | |
Contingent payment arrangement | 1,328 | 4,650 | $ 22,653 |
Level 3 | Non-trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 0 | 0 | |
Total commodity derivative liabilities | 0 | 0 | |
Level 3 | Trading Commodity Contract | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total commodity derivative assets | 0 | 0 | |
Total commodity derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Apr. 15, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Accretion on fair value of Earnout liabilities | $ 0 | $ 4,108,000 | $ 5,060,000 | ||
Provider Companies | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Earnout period | 9 months | ||||
Earnout amount | $ 9,000,000 | ||||
Verde Companies | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Earnout period | 18 months | ||||
Minimum | Provider Companies | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Earnout amount | $ 5,000,000 | ||||
Class B Common Stock | Maximum | Major Energy Companies | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Share amount maximum (in shares) | 400,000 | ||||
Major Energy Companies | Class B Common Stock | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Share amount maximum (in shares) | 400,000 | ||||
National Gas & Electric, LLC | Major Energy Companies | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Earnout period | 33 months | ||||
Earnout amount | $ 20,000,000 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value of contingent consideration, net | $ (1,715) | $ (7,898) | $ (140) |
Accretion of contingent earnout consideration (included within interest expense) | 0 | 4,108 | 5,060 |
Recurring | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning balance | 4,650 | ||
Fair Value, ending balance | 1,328 | 4,650 | |
Recurring | Level 3 | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning balance | 4,650 | 22,653 | |
Purchase price consideration | 5,400 | ||
Change in fair value of contingent consideration, net | (1,715) | (8,708) | |
Accretion of contingent earnout consideration (included within interest expense) | 4,108 | ||
Payments and settlements | (1,607) | (18,803) | |
Fair Value, ending balance | 1,328 | 4,650 | 22,653 |
Recurring | Level 3 | Major Earnout and Stock Earnout | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning balance | 4,650 | 17,760 | |
Purchase price consideration | 0 | ||
Change in fair value of contingent consideration, net | (1,715) | (9,555) | |
Accretion of contingent earnout consideration (included within interest expense) | 3,848 | ||
Payments and settlements | (1,607) | (7,403) | |
Fair Value, ending balance | 1,328 | 4,650 | 17,760 |
Recurring | Level 3 | Provider Earnout | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning balance | 0 | 4,893 | |
Purchase price consideration | 0 | ||
Change in fair value of contingent consideration, net | 0 | 500 | |
Accretion of contingent earnout consideration (included within interest expense) | 107 | ||
Payments and settlements | 0 | (5,500) | |
Fair Value, ending balance | 0 | 0 | 4,893 |
Recurring | Level 3 | Verde Earnout | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, beginning balance | 0 | 0 | |
Purchase price consideration | 5,400 | ||
Change in fair value of contingent consideration, net | 0 | 347 | |
Accretion of contingent earnout consideration (included within interest expense) | 153 | ||
Payments and settlements | 0 | (5,900) | |
Fair Value, ending balance | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of maximum shares available for issuance (in shares) | 2,750,000 | ||
Stock-based compensation expense | $ 5.9 | $ 5.1 | $ 5.2 |
Income tax benefit related to stock-based compensation | $ 0.6 | $ 0.8 | $ 0.8 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Forfeiture rate of restricted stock units | 6.00% | ||
Number of shares vested (in shares) | 323,894 | 356,014 | 395,056 |
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 258,076 | 241,965 | 305,872 |
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 136,167 | 114,049 | 89,184 |
Unrecognized compensation expense | $ 6.2 | ||
Weighted average period | 2 years 2 months 15 days | ||
Restricted Stock Units | General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5.3 | $ 2.8 | $ 2.3 |
Restricted Stock Units | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 213,076 | ||
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 110,818 | ||
CIC RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Voting power threshold | 50.00% | ||
Class A ownership threshold | 90.00% | ||
Threshold out of total outstanding voting securities after sale of stock (in shares) | 10,000,000 | ||
Threshold out of total outstanding voting securities after disposition (in shares) | 10,000,000 | ||
Restricted Stock Units, Liability Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares vested (in shares) | 70,349 | ||
Unrecognized compensation expense | $ 0.3 | ||
Weighted average period | 1 year 7 months | ||
Other current liabilities related to restricted stock | $ 0.2 | ||
Restricted Stock Units, Liability Awards | Other current liabilities | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Other current liabilities related to restricted stock | 0.7 | ||
Restricted Stock Units, Liability Awards | General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 0.6 | $ 2.3 | $ 3 |
Restricted Stock Units, Liability Awards | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares of common stock distributed to the holder of restricted stock units (in shares) | 45,000 | ||
Number of shares of common stock withheld to cover taxes owed on vested units (in shares) | 25,349 | ||
Non-Employee Director | Restricted Stock Units, Liability Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Officer, Employee, and Employee of Affiliates | Restricted Stock Units | Service Years, Group One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Officer, Employee, and Employee of Affiliates | Restricted Stock Units | Service Years, Group Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Equity Classified Restricted Stock Unit Activity and Unvested Restricted Stock Units (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock Units | |||
Number of Shares (in thousands) | |||
Unvested at beginning of period (in shares) | 640,000 | ||
Granted (in shares) | 567,000 | ||
Dividend reinvestment issuances (in shares) | 53,000 | ||
Vested (in shares) | (323,894) | (356,014) | (395,056) |
Forfeited (in shares) | (109,000) | ||
Unvested at end of period (in shares) | 827,000 | 640,000 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $ 11.56 | ||
Granted (in dollars per share) | 9.34 | ||
Dividend reinvestment issuances (in dollars per share) | 9.11 | ||
Vested (in dollars per share) | 10.61 | ||
Forfeited (in dollars per share) | 12.75 | ||
Unvested at end of period (in dollars per share) | $ 10.09 | $ 11.56 | |
Restricted Stock Units, Liability Awards | |||
Number of Shares (in thousands) | |||
Unvested at beginning of period (in shares) | 224,000 | ||
Granted (in shares) | 28,000 | ||
Dividend reinvestment issuances (in shares) | 8,000 | ||
Vested (in shares) | (70,349) | ||
Forfeited (in shares) | (122,000) | ||
Unvested at end of period (in shares) | 68,000 | 224,000 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of period (in dollars per share) | $ 12.40 | ||
Granted (in dollars per share) | 7.43 | ||
Dividend reinvestment issuances (in dollars per share) | 7.43 | ||
Vested (in dollars per share) | 10.19 | ||
Forfeited (in dollars per share) | 11.17 | ||
Unvested at end of period (in dollars per share) | $ 7.43 | $ 12.40 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 3,862 | $ 6,992 | $ 5,361 |
State | 1,099 | 1,952 | 1,683 |
Total Current | 4,961 | 8,944 | 7,044 |
Deferred: | |||
Federal | (2,792) | 27,820 | 2,944 |
State | (92) | 2,001 | 438 |
Total Deferred | (2,884) | 29,821 | 3,382 |
Provision for income taxes | $ 2,077 | $ 38,765 | $ 10,426 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | (17.00%) | 34.00% | |
Tax receivable agreement payment, current | $ 1,658,000 | $ 5,937,000 | |
Income tax penalties and interest liability | 0 | 0 | |
Income tax penalties and interest expense | 0 | 0 | $ 0 |
Unrecognized tax benefits | 0 | 0 | |
Tax Receivable Agreement | Retailco and NuDevco Retail | |||
Operating Loss Carryforwards [Line Items] | |||
Tax receivable agreement payment, current | 1,700,000 | 5,900,000 | |
NuDevco | Tax Receivable Agreement | |||
Operating Loss Carryforwards [Line Items] | |||
Tax receivable agreement payment, noncurrent | $ 25,900,000 | $ 26,400,000 |
Income Taxes - Income Tax Benef
Income Taxes - Income Tax Benefit Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Expected provision at federal statutory rate | $ (2,586) | $ 39,833 | |
Increase (decrease) resulting from: | |||
Non-controlling interest | 1,738 | (19,810) | |
Class A Preferred Stock dividends | 1,579 | 1,758 | |
Impact of U.S. Tax Reform | 0 | 14,454 | |
Intra-entity transfer of customer contracts | 473 | 0 | |
State income taxes, net of federal income tax effect | 428 | 2,569 | |
Non-deductible expenses | 256 | 234 | |
Other | 189 | (273) | |
Provision for income taxes | $ 2,077 | $ 38,765 | $ 10,426 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
Investment in Spark HoldCo | $ 22,251 | $ 16,132 |
Benefit of TRA Liability | 7,016 | 8,175 |
Federal net operating loss carryforward | 0 | 660 |
State net operating loss carryforward | 0 | 166 |
Other | 78 | 0 |
Total deferred tax assets | 29,345 | 25,133 |
Deferred Tax Liabilities: | ||
Derivative liabilities | (715) | (811) |
Intangibles | (849) | (2,287) |
Property and equipment | (460) | 0 |
Other | 0 | (58) |
Total deferred tax liabilities | (2,024) | (3,156) |
Total deferred tax assets/liabilities | $ 27,321 | $ 21,977 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)investigation | Dec. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | ||
Number of current investigations | investigation | 2 | |
Failure to Comply With Regulations, Notice of Violation and Assessment of Civil Penalty | ||
Loss Contingencies [Line Items] | ||
Penalty | $ 0.9 | |
Loss contingency accrual related to indirect tax audits | $ 0.2 | |
Failure To Comply With Regulations, Notice Of Violation Of Marketing Practices And Assessment Of Civil Penalty | ||
Loss Contingencies [Line Items] | ||
Penalty | $ 0.8 | |
Litigation And Regulatory Matters | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual related to indirect tax audits | 0.9 | |
Indirect Tax Audits | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual related to indirect tax audits | $ 0.6 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) $ / shares in Units, kWh in Millions | Dec. 27, 2016USD ($) | Mar. 31, 2018USD ($)usd_per_rcekWh | Feb. 28, 2018USD ($) | Aug. 31, 2016USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($)kWh$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||||||||
General and administrative | [1] | $ 111,431,000 | $ 101,127,000 | $ 84,964,000 | |||||
Accounts receivable - affiliates | $ 2,558,000 | 2,558,000 | 3,661,000 | ||||||
Accounts payable—affiliates | 2,464,000 | 2,464,000 | 4,622,000 | ||||||
Asset optimization revenue | 113,700,000 | 178,300,000 | 133,000,000 | ||||||
Issuance of Class B common stock to affiliates for Major Energy Companies acquisition | 0 | 0 | 0 | 40,000,000 | |||||
Adjustments to additional paid-in-capital for the disgorgement of short-swing profits (less than for December 31, 2018) | 708,000 | 1,605,000 | |||||||
Proceeds from disgorgement of stockholders short-swing profits | 244,000 | 1,129,000 | 941,000 | ||||||
Subordinated debt—affiliate | 10,000,000 | $ 10,000,000 | 0 | ||||||
Tax receivable agreement, net cash savings, percentage | 15.00% | ||||||||
Tax receivable agreement payment | $ 6,219,000 | 0 | 0 | ||||||
Tax receivable agreement payment, current | 1,658,000 | 1,658,000 | 5,937,000 | ||||||
Perigee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Total consideration | 4,100,000 | ||||||||
Subordinated Debt | Retailco | |||||||||
Related Party Transaction [Line Items] | |||||||||
Subordinated debt, interest rate | 5.00% | ||||||||
Subordinated debt—affiliate | $ 25,000,000 | ||||||||
Subordinated debt, advances | $ 1,000,000 | ||||||||
Subordinated debt, interest rate on advances | 5.00% | ||||||||
Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
General and administrative | 9,849,000 | 24,700,000 | 15,700,000 | ||||||
Asset optimization revenue | 2,400,000 | 1,300,000 | 200,000 | ||||||
Cost of revenue - affiliates | 100,000 | 100,000 | 1,600,000 | ||||||
Affiliated Entity | Allocated Overhead Costs | |||||||||
Related Party Transaction [Line Items] | |||||||||
General and administrative | 10,300,000 | 25,400,000 | 17,000,000 | ||||||
NuDevco Retail and Retailco LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Net capital distributions | 15,500,000 | 15,600,000 | 23,700,000 | ||||||
NuDevco Retail and Retailco LLC | Payment of Income Taxes Incurred by the Company | |||||||||
Related Party Transaction [Line Items] | |||||||||
Payments of distributions to affiliates | $ 16,500,000 | 18,200,000 | 11,300,000 | ||||||
Retailco and NuDevco Retail | |||||||||
Related Party Transaction [Line Items] | |||||||||
Tax receivable agreement, net cash savings, percentage | 85.00% | ||||||||
Tax receivable agreement, deferral period (in years) | 5 years | ||||||||
Tax receivable agreement, coverage percentage | 130.00% | ||||||||
NG&E | Affiliated Entity | Asset Purchase Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Residential customer equivalent (in kwh) | kWh | 500 | 350 | |||||||
Purchase price per RCE (in dollars per RCE) | usd_per_rce | 250 | ||||||||
Purchase price | $ 12,500,000 | ||||||||
Due to related parties | 8,800,000 | $ 8,800,000 | |||||||
Net distribution to NG&E recorded in equity | 7,100,000 | ||||||||
Retailco | Affiliated Entity | Allocated Overhead Costs | |||||||||
Related Party Transaction [Line Items] | |||||||||
General and administrative | 5,900,000 | 22,000,000 | 14,700,000 | ||||||
Retailco | Affiliated Entity | Property and Equipment Capitalized | |||||||||
Related Party Transaction [Line Items] | |||||||||
Capitalized property and equipment | 500,000 | 700,000 | 1,300,000 | ||||||
Retailco and NuDevco Retail | Tax Receivable Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Tax receivable agreement payment | 6,200,000 | ||||||||
Liability related to the TRA | 27,600,000 | 27,600,000 | 32,300,000 | ||||||
Tax receivable agreement payment, current | $ 1,700,000 | $ 1,700,000 | 5,900,000 | ||||||
Class B Common Stock | Major Energy Companies | |||||||||
Related Party Transaction [Line Items] | |||||||||
Shares issued (shares) | shares | 4,000,000 | ||||||||
Stock issued | $ 40,000,000 | ||||||||
Shares issued for acquisition (shares) | shares | 1,399,484 | ||||||||
Issuance of Class B common stock to affiliates for Major Energy Companies acquisition | $ 14,000,000 | ||||||||
Class A Common Stock | Retailco and NuDevco Retail | |||||||||
Related Party Transaction [Line Items] | |||||||||
Tax receivable agreement, target dividend (in dollars per share) | $ / shares | $ 0.18125 | ||||||||
Series A Preferred Stock | Retailco and NuDevco Retail | |||||||||
Related Party Transaction [Line Items] | |||||||||
Tax receivable agreement, target dividend (in dollars per share) | $ / shares | $ 0.546875 | ||||||||
Additional Paid-In Capital | |||||||||
Related Party Transaction [Line Items] | |||||||||
Adjustments to additional paid-in-capital for the disgorgement of short-swing profits (less than for December 31, 2018) | $ 0 | 708,000 | $ 1,605,000 | ||||||
2018 | Retailco | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from disgorgement of stockholders short-swing profits | $ 200,000 | 500,000 | |||||||
2016 | Retailco | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from disgorgement of stockholders short-swing profits | $ 700,000 | ||||||||
[1] | General and administrative includes general and administrative expense—affiliates of $9,849, $24,700 and $15,700 for the years ended December 31, 2018, 2017 and 2016, respectively. |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | |||
Asset optimization revenue | $ 113.7 | $ 178.3 | $ 133 |
Asset optimization cost of revenues | $ 109.2 | $ 179 | $ 133.6 |
Cost of Revenue | Supplier Concentration Risk | Two Largest Suppliers | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 28.00% | 20.00% | 27.00% |
Net Asset Optimization Revenue | Supplier Concentration Risk | Two Largest Suppliers | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 28.00% | 20.00% | 27.00% |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Retail Gross Margin to Income Before Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Reconciliation of Retail Gross Margin to Income before taxes | ||||
(Loss) income before income tax expense | $ (12,315) | $ 113,809 | $ 76,099 | |
Change in Tax Receivable Agreement Liability | 0 | 22,267 | 0 | |
Interest and other income | (749) | (256) | (957) | |
Interest expense | 9,410 | 11,134 | 8,859 | |
Operating (loss) income | (3,654) | 102,420 | 84,001 | |
Depreciation and amortization | 52,658 | 42,341 | 32,788 | |
General and administrative | [1] | 111,431 | 101,127 | 84,964 |
Less: | ||||
Net asset optimization revenue (expenses) | [2] | 4,511 | (717) | (586) |
Net, (losses) gain on non-trading derivative instruments | (18,170) | 5,008 | 22,407 | |
Net, Cash settlements on non-trading derivative instruments | (10,587) | 16,309 | (2,146) | |
Retail Gross Margin | 185,109 | 224,509 | 182,369 | |
Non-trading | ||||
Less: | ||||
Net, (losses) gain on non-trading derivative instruments | (19,571) | 5,588 | 22,254 | |
Net, Cash settlements on non-trading derivative instruments | $ (9,614) | $ 16,508 | $ (2,284) | |
[1] | General and administrative includes general and administrative expense—affiliates of $9,849, $24,700 and $15,700 for the years ended December 31, 2018, 2017 and 2016, respectively. | |||
[2] | Net asset optimization revenues includes net asset optimization revenues/(expense) —affiliates of $2,328, $1,281 and $(1,479) for the years ended December 31, 2018, 2017 and 2016, respectively. |
Segment Reporting - Financial D
Segment Reporting - Financial Data for Business Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | |||||
Total Revenues | $ 1,005,928 | $ 798,055 | $ 546,697 | ||
Retail cost of revenues | [1] | 845,493 | 552,167 | 344,944 | |
Less: | |||||
Net asset optimization revenue | [2] | 4,511 | (717) | (586) | |
Net, Losses on non-trading derivative instruments | (18,170) | 5,008 | 22,407 | ||
Current period settlements on non-trading derivatives | (10,587) | 16,309 | (2,146) | ||
Retail gross margin | 185,109 | 224,509 | 182,369 | ||
Total Assets | 488,738 | 503,741 | 367,749 | ||
Goodwill | 120,343 | 120,154 | 79,147 | $ 18,379 | |
Non-trading | |||||
Less: | |||||
Net, Losses on non-trading derivative instruments | (19,571) | 5,588 | 22,254 | ||
Current period settlements on non-trading derivatives | (9,614) | 16,508 | (2,284) | ||
Operating Segments | Retail Electricity | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenues | 863,451 | 657,566 | 417,229 | ||
Retail cost of revenues | 762,771 | 477,012 | 286,795 | ||
Less: | |||||
Net asset optimization revenue | 0 | 0 | 0 | ||
Retail gross margin | 124,668 | 158,468 | 118,136 | ||
Total Assets | 1,857,790 | 1,218,243 | 551,338 | ||
Goodwill | 117,813 | 117,624 | 76,617 | ||
Operating Segments | Retail Electricity | Non-trading | |||||
Less: | |||||
Net, Losses on non-trading derivative instruments | (15,200) | 5,784 | 17,187 | ||
Current period settlements on non-trading derivatives | (8,788) | 16,302 | (4,889) | ||
Operating Segments | Retail Natural Gas | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenues | 137,966 | 141,206 | 130,054 | ||
Retail cost of revenues | 82,722 | 75,155 | 58,149 | ||
Less: | |||||
Net asset optimization revenue | 0 | 0 | 0 | ||
Retail gross margin | 60,441 | 66,041 | 64,233 | ||
Total Assets | 649,969 | 421,896 | 242,739 | ||
Goodwill | 2,530 | 2,530 | 2,530 | ||
Operating Segments | Retail Natural Gas | Non-trading | |||||
Less: | |||||
Net, Losses on non-trading derivative instruments | (4,371) | (196) | 5,067 | ||
Current period settlements on non-trading derivatives | (826) | 206 | 2,605 | ||
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenues | 4,511 | (717) | (586) | ||
Retail cost of revenues | 0 | 0 | 0 | ||
Less: | |||||
Net asset optimization revenue | 4,511 | (717) | (586) | ||
Retail gross margin | 0 | 0 | 0 | ||
Total Assets | 361,697 | 281,176 | 192,101 | ||
Goodwill | 0 | 0 | |||
Corporate and Other | Non-trading | |||||
Less: | |||||
Net, Losses on non-trading derivative instruments | 0 | 0 | 0 | ||
Current period settlements on non-trading derivatives | 0 | 0 | 0 | ||
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenues | 0 | 0 | 0 | ||
Retail cost of revenues | 0 | 0 | 0 | ||
Less: | |||||
Net asset optimization revenue | 0 | 0 | 0 | ||
Retail gross margin | 0 | 0 | 0 | ||
Total Assets | (2,380,718) | (1,417,574) | (618,429) | ||
Goodwill | 0 | 0 | |||
Eliminations | Non-trading | |||||
Less: | |||||
Net, Losses on non-trading derivative instruments | 0 | 0 | 0 | ||
Current period settlements on non-trading derivatives | $ 0 | $ 0 | $ 0 | ||
[1] | Retail cost of revenues includes retail cost of revenues—affiliates of $0, $0 and $9 for the years December 31, 2018, 2017 and 2016, respectively. | ||||
[2] | Net asset optimization revenues includes net asset optimization revenues/(expense) —affiliates of $2,328, $1,281 and $(1,479) for the years ended December 31, 2018, 2017 and 2016, respectively. |
Equity Method Investment (Detai
Equity Method Investment (Details) $ in Thousands, ¥ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2015JPY (¥) | Dec. 31, 2018USD ($)director | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investment | $ 0 | $ 0 | $ 1,102 | ||
eREX Spark | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investment | $ 1,400 | ¥ 156.4 | |||
Ownership percentage | 20.00% | 20.00% | 20.00% | ||
Dividends distributed percentage | 30.00% | ||||
Number of years dividend is paid thereafter | 4 years | ||||
Number of directors | director | 4 | ||||
Number of directors appointed by the company | director | 1 | ||||
Board of director members' percentage | 25.00% | ||||
Equity method investment | $ 3,100 | ||||
Share in equity method investment earnings | $ 500 |