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Segment Reporting
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Reporting
14. 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, and related services. 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 electricity and natural gas 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 three months ended March 31, 2022 and 2021, we recorded asset optimization revenues of $27.3 million and $25.7 million and asset optimization cost of revenues of $28.2 million and $25.8 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. We have historically defined retail gross margin as operating (loss) income plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization (expenses) revenues, (ii) net (losses) gains on non-trading derivative instruments, and (iii) net current period cash settlements on non-trading derivative instruments.
Based on the events described below related to the February 2021 North American winter storm referred to as Winter Storm Uri ("Winter Storm Uri"), and to ensure Retail Gross Margin reflects repeatable operating performance that is not distorted by non-recurring events or extreme market volatility, we have revised the definition of Retail Gross Margin in this Report to include gains (losses) from non-recurring events (including non-recurring market volatility).
We deduct net (losses) gains 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 income before income tax expense (in thousands):
  
Three Months Ended March 31,
  20222021
Reconciliation of Retail Gross Margin to income before taxes
Income (loss) before income tax expense $37,069 $(29,095)
Interest and other income(48)(86)
Interest expense1,307 1,311 
Operating income 38,328 (27,870)
Depreciation and amortization5,184 6,036 
General and administrative14,935 12,671 
Less:
Net asset optimization expense(904)(140)
Net, gain on non-trading derivative instruments43,916 7,054 
Net, Cash settlements on non-trading derivative instruments(13,320)(1,189)
Non-recurring event - Winter Storm Uri— (64,900)
Retail Gross Margin$28,755 $50,012 
Financial data for business segments are as follows (in thousands):
Three Months Ended March 31, 2022
Retail
Electricity (a)		Retail
Natural Gas		Corporate
and Other		EliminationsConsolidated
Total Revenues$88,041 $40,017 $(904)$— $127,154 
Retail cost of revenues46,160 22,547 — — 68,707 
Less:
Net asset optimization expense— (904)— (904)
Net, gain on non-trading derivative instruments36,239 7,677 — — 43,916 
Current period settlements on non-trading derivatives(11,544)(1,776)— — (13,320)
Retail Gross Margin$17,186 $11,569 $— $— $28,755 
Total Assets at March 31, 2022$1,613,559 $33,773 $317,615 $(1,612,199)$352,748 
Goodwill at March 31, 2022$117,813 $2,530 $— $— $120,343 
(a) Retail Electricity includes related services.

Three Months Ended March 31, 2021
Retail
Electricity		Retail
Natural Gas		Corporate
and Other		EliminationsConsolidated
Total revenues$78,755 $34,390 $(140)$— $113,005 
Retail cost of revenues107,524 14,644 — — 122,168 
Less:
Net asset optimization expense— — (140)— (140)
Net, gain on non-trading derivative instruments6,705 349 — — 7,054 
Current period settlements on non-trading derivatives(1,188)(1)— — (1,189)
Non-recurring event - Winter Storm Uri(64,900)— — — (64,900)
Retail Gross Margin$30,614 $19,398 $— $— $50,012 
Total Assets at December 31, 2021$1,527,456 $7,320 $311,556 $(1,491,056)$355,276 
Goodwill at December 31, 2021$117,813 $2,530 $— $— $120,343