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Segment Reporting
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
The Company’s determination of reportable business segments considers the strategic operating units under which the Company makes financial decisions, allocates resources and assesses performance of its retail and asset optimization businesses.
The Company’s reportable business segments are retail natural gas and retail electricity. The retail natural gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. Asset optimization activities, considered an integral part of securing the lowest price natural gas to serve retail gas load, are part of the retail natural gas segment. The Company recorded asset optimization revenues of $27.7 million and $45.9 million and asset optimization cost of revenues of $28.2 million and $46.0 million for the three months ended September 30, 2015 and 2014, respectively, which are presented on a net basis in asset optimization revenues. The Company recorded asset optimization revenues of $120.7 million and $225.4 million and asset optimization cost of revenues of $119.4 million and $223.7 million for the nine months ended September 30, 2015 and 2014, respectively, which are presented on a net basis in asset optimization revenues.The retail electricity segment consists of electricity sales and transmission to residential and commercial customers. Corporate and other consists of expenses and assets of the retail natural gas and retail electricity segments that are managed at a consolidated level such as general and administrative expenses.
To assess the performance of the Company’s operating segments, the Chief Operating Decision Maker analyzes retail gross margin. The Company defines retail gross margin as operating income plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization revenues, (ii) net gains (losses) on derivative instruments, and (iii) net current period cash settlements on derivative instruments. The Company deducts net gains (losses) on derivative instruments, excluding current period cash settlements, from the retail gross margin calculation in order to remove the non-cash impact of net gains and losses on derivative instruments.
Retail gross margin is a primary performance measure used by our management to determine the performance of our retail natural gas and electricity business by removing the impacts of our asset optimization activities and net non-cash income (loss) impact of our economic hedging activities. As an indicator of our retail energy business’ operating performance, retail gross margin should not be considered an alternative to, or more meaningful than, operating income, as determined in accordance with GAAP.



Below is a reconciliation of retail gross margin to income before income tax expense (in thousands):
  
Three Months Ended September 30,
Nine Months Ended September 30,
  
2015

2014
2015

2014
Reconciliation of Retail Gross Margin to Income before taxes






Income before income tax expense
$
6,455


$
1,032

$
24,442


$
7,906

Interest and other income
(5
)

(40
)
(326
)

(111
)
Interest expense
800


615

1,415


1,150

Operating Income
7,250


1,607

25,531


8,945

Depreciation and amortization
7,557


4,113

17,873


10,324

General and administrative
15,493


10,634

43,909


28,494

Less:






Net asset optimization revenue
(545
)

(141
)
1,317


1,681

Net, Gains (losses) on non-trading derivative instruments
132


(1,163
)
(5,876
)

5,847

Net, Cash settlements on non-trading derivative instruments
4,035


3,039

12,643


(9,959
)
Retail Gross Margin
$
26,678


$
14,619

$
79,229


$
50,194



The Company uses retail gross margin and net asset optimization revenues as the measure of profit or loss for its business segments. This measure represents the lowest level of information that is provided to the chief operating decision maker for our reportable segments.

Financial data for business segments are as follows (in thousands): 
Three Months Ended September 30, 2015
Retail
Electricity

Retail
Natural Gas

Corporate
and Other

Eliminations

Spark Retail
Total Revenues
$
76,913

 
$
14,354

 
$
—

 
$
—

 
$
91,267

Retail cost of revenues
50,787

 
10,180

 
—

 
—

 
60,967

Less:
 
 
 
 
 
 
 
 
 
Net asset optimization revenues
—

 
(545
)
 
—

 
—

 
(545
)
Gains (losses) on non-trading derivatives
3,891

 
(3,759
)
 
—

 
—

 
132

Current period settlements on non-trading derivatives
3,310

 
725

 
—

 
—

 
4,035

Retail Gross Margin
$
18,925

 
$
7,753

 
$
—

 
$
—

 
$
26,678

Total Assets
$
147,037

 
$
101,844

 
$
96,319

 
$
(184,747
)
 
$
160,453


Three Months Ended September 30, 2014
Retail
Electricity

Retail
Natural Gas

Corporate
and Other

Eliminations

Spark Retail
Total revenues
$
51,748


$
16,469


$
—


$
—


$
68,217

Retail cost of revenues
41,628


10,235


—


—


51,863

Less:









Net asset optimization revenues
—


(141
)

—


—


(141
)
Gains (losses) on non-trading derivatives
445


(1,608
)

—


—


(1,163
)
Current period settlements on non-trading derivatives
2,906


133


—


—


3,039

Retail Gross Margin
$
6,769


$
7,850


$
—


$
—


$
14,619

Total Assets
$
47,677


$
92,974


$
20,309


$
(38,886
)

$
122,074

Nine Months Ended September 30, 2015
Retail
Electricity

Retail
Natural Gas

Corporate
and Other

Eliminations

Spark Retail
Total revenues
$
170,060


$
93,253


$
—


$
—


$
263,313

Retail cost of revenues
122,864


53,136


—


—


176,000

Less:









Net asset optimization revenues
—


1,317


—


—


1,317

Gains (losses) on non-trading derivatives
(2,201
)

(3,675
)

—


—


(5,876
)
Current period settlements on non-trading derivatives
5,727


6,916


—


—


12,643

Retail Gross Margin
$
43,670


$
35,559


$
—


$
—


$
79,229

Total Assets
$
147,037


$
101,844


$
96,319


$
(184,747
)

$
160,453

Nine Months Ended September 30, 2014
Retail
Electricity

Retail
Natural Gas

Corporate
and Other

Eliminations

Spark Retail
Total revenues
$
137,968


$
102,166


$
—


$
—


$
240,134

Retail cost of revenues
114,997


77,374


—


—


192,371

Less:









Net asset optimization revenues
—


1,681


—


—


1,681

Gains (losses) on non-trading derivatives
6,037


(190
)

—


—


5,847

Current period settlements on non-trading derivatives
(7,585
)

(2,374
)

—


—


(9,959
)
Retail Gross Margin
$
24,519


$
25,675


$
—


$
—


$
50,194

Total Assets
$
47,677


$
92,974


$
20,309


$
(38,886
)

$
122,074


Significant Customers
For the three and nine months ended September 30, 2015, we had one significant customer that individually accounted for more than 10% of the Company’s consolidated net asset optimization revenues. For the three and nine months ended September 30, 2014, we had four and one significant customers, respectively, that individually accounted for more than 10% of the Company’s combined net asset optimization revenues.
For the three and nine months ended September 30, 2015 and 2014, no individual customer accounted for more than 10% of the Company's combined and consolidated retail electricity or retail natural gas total revenues.
Significant Suppliers
For the three and nine months ended September 30, 2015, we had one individual supplier that individually accounted for more than 10% of the Company’s consolidated net asset optimization revenues cost of revenues. For the three and nine months ended September 30, 2014, we had two and one significant suppliers, respectively, that individually accounted for more than 10% of the Company’s combined net asset optimization revenues cost of revenues.

For the three and nine months ended September 30, 2015, the Company had five and four significant suppliers, respectively, that individually accounted for more than 10% of the Company’s consolidated retail electricity retail cost of revenues. For the three and nine months ended September 30, 2014, the Company had one significant supplier that individually accounted for more than 10% of the Company's combined retail electricity retail cost of revenues.
For the three and nine months ended September 30, 2015 and 2014, no individual supplier accounted for more than 10% of the Company's combined and consolidated retail natural gas retail cost of revenues.