UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~FORM 10-Q~~☒

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2019

or☐

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-35327

GENIE ENERGY LTD.

(Exact Name of Registrant as Specified in its Charter)

Delaware

~~Delaware~~		45-2069276
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

520 Broad Street, Newark, New Jersey		07102
(Address of principal executive offices)		(Zip Code)

(973) 438-3500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐ ☒

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

Securities registered pursuant to Section 12(b)-2 of the Exchange Act:

Title of each Class	Trading Symbol	Name of exchange of which registered
Class B common stock, par value $0.1 per share	GNE	New York Stock Exchange
Series 2012-A Preferred stock, par value $0.1 per share	GNE-PA	New York Stock Exchange

As of ~~November 7, 2017,~~May 9, 2019, the registrant had the following shares outstanding:

Class A common stock, $.01 par value:		1,574,326 shares ~~outstanding~~
Class B common stock, $.01 par value:		~~23,270,088~~ 25,517,003 shares ~~outstanding~~ (excluding ~~330,915~~249,558 treasury shares)

GENIE ENERGY LTD.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited)	1

	Consolidated Balance Sheets	1

	Consolidated Statements of Operations	2

	Consolidated Statements of Comprehensive Income ~~(Loss)~~	3

	Consolidated Statements of Stockholders' Equity	4

	Consolidated Statements of Cash Flows	4 6

	Notes to Consolidated Financial Statements	5 7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19 32

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	33 45

Item 4.	Controls and Procedures	34 45

PART II. OTHER INFORMATION		35 46

Item 1.	Legal Proceedings	35 46

Item 1A.	Risk Factors	35 46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35 46

Item 3.	Defaults upon Senior Securities	35 46

Item 4.	Mine Safety Disclosures	35 46

Item 5.	Other Information	35 46

Item 6.	Exhibits	36 47

SIGNATURES		37 48

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2017			December 31, 2016
	(Unaudited)			(Note 1)			March 31, 2019			December 31, 2018
	(in thousands)						(Unaudited)			(Note 1)
Assets
Current assets:
Cash and cash equivalents	$	29,390		$	35,192		$	37,540		$	41,601
Restricted cash—short-term		206			10,813
Trade accounts receivable, net of allowance for doubtful accounts of $730 and $171 at September 30, 2017 and December 31, 2016, respectively		34,699			36,858
Restricted cash—short-term								6,058			1,653
Trade accounts receivable, net of allowance for doubtful accounts of $2,139 and $2,003 at March 31, 2019 and December 31, 2018, respectively								41,921			35,920
Inventory		4,861			5,989			9,685			9,893
Prepaid expenses		7,249			4,026			4,874			6,167
Other current assets		3,790			4,932			2,126			2,670
Total current assets		80,195			97,810			102,204			97,904
Property and equipment, net		4,194			1,617			4,371			4,301
Capitalized exploration costs—unproved oil and gas property		5,741			—
Goodwill		9,998			8,728			13,023			11,082
Other intangibles, net		5,202			4,277			8,509			6,321
Investment in joint venture		1,116			—
Investment in equity method investees								1,470			2,208
Restricted cash—long-term		1,491			1,047			865			943
Deferred income tax assets, net		2,324			1,781			13,184			15,625
Other assets		9,949			6,553			10,610			8,480
Total assets	$	120,210		$	121,813		$	154,236		$	146,864
Liabilities and equity
Current liabilities:
Revolving line of credit	$	—		$	711
Notes payable							$	918		$	923
Trade accounts payable		15,341			17,274			20,044			18,508
Accrued expenses		27,322			16,301			24,402			25,242
Income taxes payable		1,105			2,426			1,923			1,463
Due to IDT Corporation		193			141			138			234
Other current liabilities		3,256			4,292			3,082			4,416
Total current liabilities		47,217			41,145			50,507			50,786
Revolving line of credit		2,512			—			2,516			2,516
Other liabilities		1,218			803			2,842			900
Total liabilities		50,947			41,948			55,865			54,202
Commitments and contingencies
Equity:
Genie Energy Ltd. stockholders’ equity:
Preferred stock, $.01 par value; authorized shares—10,000:
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,322 shares issued and outstanding at September 30, 2017 and December 31, 2016		19,743			19,743
Class A common stock, $.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at September 30, 2017 and December 31, 2016		16			16
Class B common stock, $.01 par value; authorized shares—200,000; 23,601 and 23,274 shares issued and 23,270 and 23,073 shares outstanding at September 30, 2017 and December 31, 2016, respectively		236			233
Preferred stock, $0.01 par value; authorized shares—10,000:
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,322 shares issued and outstanding at March 31, 2019 and December 31, 2018								19,743			19,743
Class A common stock, $0.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at March 31, 2019 and December 31, 2018								16			16
Class B common stock, $0.01 par value; authorized shares—200,000; 25,767 and 25,544 shares issued and 25,517 and 25,294 shares outstanding at March 31, 2019 and December 31, 2018, respectively								257			255
Additional paid-in capital		131,778			128,243			137,884			136,629
Treasury stock, at cost, consisting of 331 shares and 201 shares of Class B common stock at September 30, 2017 and December 31, 2016, respectively		(2,428	)		(1,599	)
Treasury stock, at cost, consisting of 250 shares of Class B common stock at March 31, 2019 and December 31, 2018								(1,624	)		(1,624	)
Accumulated other comprehensive income		2,813			1,465			2,881			2,591
Accumulated deficit		(65,449	)		(51,567	)		(50,558	)		(53,939	)
Total Genie Energy Ltd. stockholders’ equity		86,709			96,534			108,599			103,671
Noncontrolling interests:
Noncontrolling interests		(15,779	)		(15,002	)		(10,228	)		(11,009	)
Receivable for issuance of equity		(1,667	)		(1,667	)
Total noncontrolling interests		(17,446	)		(16,669	)
Total equity		69,263			79,865			98,371			92,662
Total liabilities and equity	$	120,210		$	121,813		$	154,236		$	146,864

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended March 31,
	2019			2018
	(in thousands, except per share data)
Revenues:
Electricity	$	62,614		$	65,335
Natural gas		18,706			23,428
Other		5,297			505
Total revenues		86,617			89,268
Cost of revenues		61,026			64,810
Gross profit		25,591			24,458
Operating expenses and losses:
Selling, general and administrative (i)		15,708			17,098
Research and development		49			—
Exploration		—			227
Income from operations		9,834			7,133
Interest income		93			81
Interest expense		(140	)		(92	)
Equity in the net loss in equity method investees, net		(797	)		(506	)
Other income, net		73			42
Income before income taxes		9,063			6,658
Provision for income taxes		(2,903	)		(799	)
Net income		6,160			5,859
(Net income) loss attributable to noncontrolling interests		(91	)		295
Net income attributable to Genie Energy Ltd.		6,069			6,154
Dividends on preferred stock		(370	)		(370	)
Net income attributable to Genie Energy Ltd. common stockholders	$	5,699		$	5,784

Earnings per share attributable to Genie Energy Ltd. common stockholders:
Basic	$	0.21		$	0.24
Diluted	$	0.21		$	0.24
Weighted-average number of shares used in calculation of earnings per share:
Basic		26,532			24,239
Diluted		27,240			24,295

Dividends declared per common share	$	0.075		$	0.075
(i) Stock-based compensation included in selling, general and administrative expenses	$	448		$	1,347

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~
COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(in thousands, except per share data)
Revenues:
Electricity $ 66,189 $ 55,057 $ 163,636 $ 138,494
Natural gas 2,787 1,766 26,045 20,913
Other 497 330 1,445 1,186
Total revenues 69,473 57,153 191,126 160,593
Cost of revenues (47,694 ) (36,946 ) (132,371 ) (98,223 )
Gross profit 21,779 20,207 58,755 62,370
Operating expenses, (gains) and losses:
Selling, general and administrative (i) 19,464 14,945 63,008 46,888
Research and development — — — 210
Exploration 753 1,323 2,556 4,439
Gain on consolidation of AMSO, LLC — — — (1,262 )
Equity in the net loss of joint ventures 159 — 159 222
Write-off of capitalized exploration costs — 41,041 — 41,041
Income (loss) from operations 1,403 (37,102 ) (6,968 ) (29,168 )
Interest income 51 70 207 257
Other (expense) income, net (58 ) 333 (620 ) 171
Income (loss) before income taxes 1,396 (36,699 ) (7,381 ) (28,740 )
Provision for income taxes (421 ) (475 ) (453 ) (2,165 )
Net income (loss) 975 (37,174 ) (7,834 ) (30,905 )
Net (income) loss attributable to noncontrolling interests (197 ) 5,035 626 7,198
Net income (loss) attributable to Genie Energy Ltd. 778 (32,139 ) (7,208 ) (23,707 )
Dividends on preferred stock (370 ) (370 ) (1,111 ) (1,111 )
Net income (loss) attributable to Genie Energy Ltd. common stockholders. $ 408 $ (32,509 ) $ (8,319 ) $ (24,818 )

Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders:
Basic $ 0.02 $ (1.43 ) $ (0.35 ) $ (1.09 )
Diluted $ 0.02 $ (1.43 ) $ (0.35 ) $ (1.09 )
Weighted-average number of shares used in calculation of earnings (loss) per share:
Basic 23,567 22,813 23,495 22,800
Diluted 24,158 22,813 23,495 22,800

Dividends declared per common share $ 0.075 $ 0.06 $ 0.225 $ 0.18
(i) Stock-based compensation included in selling, general and administrative expenses $ 1,411 $ 1,161 $ 3,796 $ 3,497

	Three Months Ended March 31,
	2019		2018
	(in thousands)
Net income	$	6,160	$	5,859
Other comprehensive income:
Foreign currency translation adjustments		96		59
Comprehensive income		6,256		5,918
Comprehensive income attributable to noncontrolling interests		103		251
Comprehensive income attributable to Genie Energy Ltd.	$	6,359	$	6,169

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME (LOSS)~~EQUITY

(in thousands, except dividend per share)

	Genie Energy Ltd. Stockholders
	Preferred				Class A				Class B				Additional					Accumulated Other
	Stock				Common Stock				Common Stock				Paid-In		Treasury			Comprehensive		Accumulated			Noncontrolling			Total
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Stock			Income		Deficit			Interests			Equity
BALANCE AT JANUARY 1, 2019		2,322		19,743		1,574		16		25,544		255		136,629		(1,624	)		2,591		(53,939	)		(11,009	)		92,662
Adoption of ASU 2018-07 ($0.1594 per share)		—		—		—		—		—		—		312		—			—		(312	)		—			—
Dividends on preferred stock		—		—		—		—		—		—		—		—			—		(370	)		—			(370	)
Dividends on common stock ($0.075 per share)		—		—		—		—		—		—		—		—			—		(2,006	)		—			(2,006	)
Stock-based compensation		—		—		—		—		198		2		446		—			—		—			—			448
Exercise of stock options		—		—		—		—		25		—		172		—			—		—			—			172
Options issued to Howard S. Jonas		—		—		—		—		—		—		325		—			—		—			—			325
Noncontrolling interest from acquisition of Lumo		—		—		—		—		—		—		—		—			—		—			884			884
Other comprehensive income		—		—		—		—		—		—		—		—			290		—			(194	)		96
Net income for the three months ended March 31, 2019		—		—		—		—		—		—		—		—			—		6,069			91			6,160
BALANCE AT MARCH 31, 2019		2,322		19,743		1,574		16		25,767		257		137,884		(1,624	)		2,881		(50,558	)		(10,228	)		98,371

~~(Unaudited)~~GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF EQUITY (in thousands) — (Continued)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(in thousands)
Net income (loss) $ 975 $ (37,174 ) $ (7,834 ) $ (30,905 )
Other comprehensive (loss) income:
Foreign currency translation adjustments (119 ) 982 763 1,389
Comprehensive income (loss) 856 (36,192 ) (7,071 ) (29,516 )
Comprehensive (income) loss attributable to noncontrolling interests (50 ) 5,035 1,211 7,193
Comprehensive income (loss) attributable to Genie Energy Ltd. $ 806 $ (31,157 ) $ (5,860 ) $ (22,323 )

	Genie Energy Ltd. Stockholders
	Preferred				Class A				Class B				Additional					Accumulated Other
	Stock				Common Stock				Common Stock				Paid-In		Treasury			Comprehensive		Accumulated			Noncontrolling			Total
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Stock			Income		Deficit			Interests			Equity
BALANCE AT JANUARY 1, 2018		2,322		19,743		1,574		16		23,601		236		130,870		(2,428	)		3,045		(67,469	)		(16,885	)		67,128
Dividends on preferred stock ($0.01594 per share)		—		—		—		—		—		—		—		—			—		(370	)		—			(370	)
Dividends on common stock ($0.075 per share)		—		—		—		—		—		—		—		—			—		(1,865	)		—			(1,865	)
Stock-based compensation		—		—		—		—		25		—		889		—			—		—			—			889
Other comprehensive income		—		—		—		—		—		—		—		—			15		—			44			59
Net income for three months ended March 31, 2018		—		—		—		—		—		—		—		—			—		6,154			(295	)		5,859
BALANCE AT MARCH 31, 2018		2,322	$	19,743		1,574	$	16		23,626	$	236	$	131,759	$	(2,428	)	$	3,060	$	(63,550	)	$	(17,136	)	$	71,700

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended
September 30,
2017 2016
(in thousands)
Operating activities
Net loss $ (7,834 ) $ (30,905 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 1,528 294
Provision for doubtful accounts receivable 392 5
Deferred income taxes (543 ) —
Stock-based compensation 3,796 3,497
Write-off of capitalized exploration costs — 41,041
Gain from repayment of revolving credit loan payable — (200 )
Loss on disposal of property — 25
Gain on consolidation of AMSO, LLC — (1,262 )
Equity in the net loss of joint ventures 159 222
Change in assets and liabilities, net of effect of acquisition:
Restricted cash 181 1,295
Trade accounts receivable 2,275 (5,904 )
Inventory 1,128 4,599
Prepaid expenses (3,150 ) 3,996
Other current assets and other assets (2,127 ) 2,941
Trade accounts payable, accrued expenses and other current liabilities 8,840 (9,105 )
Due to IDT Corporation 52 (378 )
Income taxes payable (1,320 ) 1,445
Net cash provided by operating activities 3,377 11,606
Investing activities
Capital expenditures (3,248 ) (449 )
Investments in capitalized exploration costs—unproved oil and gas property (5,531 ) (12,884 )
Acquisition, net of cash acquired (3,717 ) —
Investment in joint venture (1,275 ) —
Repayment of notes receivable 446 50
Proceeds from disposal of property — 27
Purchase of certificates of deposit — (2,974 )
Proceeds from maturities of certificates of deposit — 11,900
Cash acquired from consolidation of AMSO, LLC — 702
Capital contribution to AMSO, LLC received from Total — 3,000
Capital contributions to AMSO, LLC — (63 )
Net cash used in investing activities (13,325 ) (691 )
Financing activities
Dividends paid (6,674 ) (5,547 )
Purchases of equity of subsidiary (312 ) —
Proceeds from revolving line of credit 14,450 —
Repayment of revolving line of credit (12,655 ) (1,800 )
Decrease in restricted cash 10,000 —
Exercise of stock options 109 —
Repurchases of Class B common stock from employees (829 ) (29 )
Payment for acquisitions — (227 )
Net cash provided by (used in) financing activities 4,089 (7,603 )
Effect of exchange rate changes on cash and cash equivalents 57 203
Net (decrease) increase in cash and cash equivalents (5,802 ) 3,515
Cash and cash equivalents at beginning of period 35,192 38,786
Cash and cash equivalents at end of period $ 29,390 $ 42,301
Supplemental Schedule of Non-Cash Investing and Financing Activities
Liability incurred for acquisition $ 151 $ —
Class B common stock issued for GRE deferred stock units $ 1,845 $ —
Subsidiary equity grant reclassified to liability $ — $ 1,689
Net assets excluding cash and cash equivalents of AMSO, LLC acquired $ — $ 560

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Operating activities
Net income	$	6,160		$	5,859
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		921			594
Deferred income taxes		2,442			113
Provision for doubtful accounts receivable		72			295
Gain on sale of property and equipment		—			(18	)
Stock-based compensation		448			1,347
Equity in the net loss in equity method investees		797			506
Change in assets and liabilities:
Trade accounts receivable		(3,554	)		3,886
Inventory		208			(1,690	)
Prepaid expenses		1,320			511
Other current assets and other assets		(1,041	)		2,903
Trade accounts payable, accrued expenses and other current liabilities		(1,115	)		(6,328	)
Due to IDT Corporation		(100	)		(94	)
Income taxes payable		460			754
Net cash provided by operating activities		7,018			8,638
Investing activities
Capital expenditures		(325	)		(344	)
Proceeds from sale of property and equipment		—			62
Payments for business acquisition, net of cash acquired		(1,852	)		—
Investments in notes receivables		(177	)		—
Repayment of notes receivable		122			54
Net cash used in investing activities		(2,232	)		(228	)
Financing activities
Dividends paid		(2,377	)		(2,235	)
Repayment of short-term debt—Lumo Energia		(2,260	)		—
Exercise of stock options		172			—
Repayment of notes payable		(20	)		—
Net cash used in financing activities		(4,485	)		(2,235	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(35	)		(19	)
Net increase in cash, cash equivalents, and restricted cash		266			6,156
Cash, cash equivalents, and restricted cash at beginning of period		44,197			31,927
Cash, cash equivalents, and restricted cash at end of period	$	44,463		$	38,083
Supplemental Schedule of Non-Cash Financing Activities
Liability incurred for acquisitions	$	2,260		$	—

See accompanying notes to consolidated financial statements.

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited consolidated financial statements of Genie Energy Ltd. and its subsidiaries (the “Company” or “Genie”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2019. The balance sheet at December 31, ~~2016~~2018 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, as filed with the U.S. Securities and Exchange Commission (the “SEC”).

The Company owns 99.3% of its subsidiary, Genie Energy International Corporation (“GEIC”), which owns 100% of Genie Retail Energy (“GRE”), 100% of Genie Energy Services ("GES"), 60% of Prism Solar Technology, Inc. ("Prism") and ~~92%~~97% of Genie Oil and Gas, Inc. (“GOGAS”). ~~The Company’s principal businesses consist of the following:~~

●

Genie Retail Energy operates retail energy providers (“REPs”), including IDT Energy, Inc. (“IDT Energy”), Residents Energy, Inc. (“Residents Energy”), Town Square Energy, and Mirabito Natural Gas (“Mirabito”) (see Note 2), and energy brokerage and marketing services. Its REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern United States; and

●

Genie Oil and Gas is an oil and gas exploration company that consists of an 85.9% interest in Afek Oil and Gas, Ltd. (“Afek”), which operates an exploration project in the Golan Heights in Northern Israel, and certain inactive projects.

GRE ~~has~~owns and operates retail energy providers (“REPs”), including IDT Energy, Inc. (“IDT Energy”), Residents Energy, Inc. (“Residents Energy”), Town Square Energy, and Mirabito Natural Gas (“Mirabito”). GRE's REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern and Midwestern United States.

Genie Retail Energy International, LLC ("GREI") holds the Company's interest in its joint venture that serves retail customers in the United Kingdom ("U.K.") and its venture in Japan, which recently launched commercial operations. In January 2019, the Company acquired an 80% controlling interest in Lumo Energia Oyj ("Lumo"), a REP serving residential customers in Finland (see Note 5).

GES oversees Diversegy LLC ("Diversegy"), a retail energy advisory and brokerage company that serves commercial and industrial customers throughout the United States ("U.S.") and manages GRE's 60% interest in Prism (see Note 5), a solar solutions company that is engaged in U.S. based manufacturing of solar panels, solar installation design and project management.

GOGAS is an oil and gas exploration company and owns an interest in a contracted drilling services operation. GOGAS holds an 86.1% interest in Afek Oil and Gas, Ltd. (“Afek”), an oil and gas exploration project in the Golan Heights in Northern Israel. GOGAS also holds controlling interests in inactive oil and gas projects. GOGAS also holds a 37.5% interest in a newly formed contracting drilling services company in Israel ("Atid 613").

GREI and GES have outstanding deferred stock units granted to officers, employees and ~~employees~~a contractor that represent an aggregate interest of ~~1.25%~~4.0% and 4.5% of the equity of ~~GRE.~~GEIC and GRES, respectively. The deferred stock units are subject to vesting up to 2020.

Seasonality and Weather

The weather and the seasons, among other things, affect GRE’s and GRE International's REPs revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effect. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately ~~43%~~50% and ~~64%~~45% of GRE’s natural gas revenues for the relevant years were generated in the first ~~quarter~~quarters of ~~2016~~2018 and ~~2015,~~2017, respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately ~~31% and 29%~~30% of GRE’s electricity revenues for the relevant years were generated in the third ~~quarter~~quarters of ~~2016~~2018 and ~~2015,~~2017, respectively. GRE’s REPs’ revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.

Reclassifications

Certain amounts from the prior year's financial statements have been reclassified in order to conform to the current year's presentation.

Note 2—~~Acquisition of Mirabito Natural Gas~~Cash, Cash Equivalents, and Restricted Cash

~~On August 10, 2017, GRE acquired Mirabito Natural Gas,~~The following table provides a ~~Ft. Lauderdale, Florida-based~~reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that equals the total of the same amounts reported in the consolidated statement of cash flows:

	March 31, 2019		December 31, 2018
	(in thousands)
Cash and cash equivalents	$	37,540	$	41,601
Restricted cash—short-term		6,058		1,653
Restricted cash—long-term		865		943
Total cash, cash equivalents, and restricted cash	$	44,463	$	44,197

Restricted cash—short-term includes amounts set aside in accordance with the Amended and Restated Preferred Supplier Agreement with BP Energy Company (“BP”) (see Note 17) and Credit Agreement with JPMorgan Chase (see Note 19). Restricted cash—long-term includes Afek’s security deposits for its exploration license from the Government of Israel, and its customs and other import duties for the import of exploration equipment.

Note 3—Inventories

Inventories consisted of the following:

	March 31, 2019		December 31, 2018
	(in thousands)
Natural gas	$	203	$	1,116
Renewable credits		8,863		8,654
Solar Panels:
Finished goods		564		40
Raw materials		55		83
Total solar panels inventory		619		123
Totals	$	9,685	$	9,893

Note 4—Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), and has since issued amendments thereto (collectively referred to as “ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five-step process to achieve this core principle. ASC 606 also mandates additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.

The Company adopted ASC 606 as of January 1, 2018, using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period results are not adjusted and continue to be reported in accordance with its historic accounting under ASC Topic 605. The Company determined that the new standard did not have any impact on revenue recognition and measurement in its consolidated financial statements. Variable quantities in requirements contracts are considered to be options for additional goods and services because the customer has a current contractual right to choose the amount of additional distinct goods. Revenue from the single performance obligation to deliver a unit of electricity and/or natural gas ~~supplier,~~is recognized as the customer simultaneously receives and consumes the benefit. Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which the Company operates, and GRE’s REPs participate in POR programs for a majority of their receivables. The Company estimates variable consideration related to its rebate programs using the expected value method and a portfolio approach. The Company’s estimates related to rebate programs are based on the terms of the rebate program, the customer’s historical electricity and natural gas consumption, the customer’s rate plan, and a churn factor. Taxes that are imposed on the Company’s sales and collected from ~~Angus Partners, LLC (“Angus”) for an aggregate cash payment of $3.9 million. Mirabito serves commercial and government~~ customers ~~throughout Florida. Mirabito’s operating results~~are excluded from the transaction price.

Practical Expedients

The Company’s performance obligations are generally pursuant to contracts for which the estimated customer relationship periods are currently less than one year. Therefore, in accordance with ASC 606, the Company generally expenses sales commissions to acquire customers when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. The Company continuously monitors its customer relationship periods to ensure compliance with the application of the practical expedient.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by pricing plans offered to customers:

(in thousands)	Electricity		Natural Gas		Other		Total
Three Months Ended March 31, 2019
Fixed rate	$	23,317	$	1,062	$	—	$	24,379
Variable rate		39,297		17,644		—		56,941
Other		—		—		5,297		5,297
Total	$	62,614	$	18,706	$	5,297	$	86,617

Three Months Ended March 31, 2018
Fixed rate	$	21,333	$	1,800	$	—	$	23,133
Variable rate		44,002		21,628		—		65,630
Other		—		—		505		505
Total	$	65,335	$	23,428	$	505	$	89,268

The following table shows the Company’s revenues disaggregated by non-commercial and commercial channels:

(in thousands)	Electricity		Natural Gas		Other		Total
Three Months Ended March 31, 2019
Non-Commercial Channel	$	60,341	$	16,527	$	—	$	76,868
Commercial Channel		2,273		2,179		—		4,452
Other		—		—		5,297		5,297
Total	$	62,614	$	18,706	$	5,297	$	86,617

Three Months Ended March 31, 2018
Non-Commercial Channel	$	62,844	$	21,381	$	—	$	84,225
Commercial Channel		2,491		2,047		—		4,538
Other		—		—		505		505
Total	$	65,335	$	23,428	$	505	$	89,268

Note 5—Acquisitions and Divestiture

Acquisition of Lumo Energia, Oyj

On January 2, 2019 (“Closing Date”), pursuant to a Stock Purchase Agreement date December 17, 2018, the Company completed the purchase of ~~acquisition,~~an 80% controlling interest in Lumo Energia Oyj ("Lumo"), a Finnish public limited company. The Company paid the sellers a total of €1.6 million (equivalent to $1.9 million). The Company contributed €1.3 million (equivalent to $1.5 million) as a capital loan to fund Lumo's working capital requirements. The Company also provided Lumo with a secured loan for €2.0 million (equivalent to $2.3 million) to pay off and replace its remaining debt. The secured loan is payable in 4 years and bears interest at annual rate of 4.0%, payable monthly. The Company also issued 176,104 shares of its Class B common stock to certain of the sellers which ~~were not significant,~~ are ~~included~~subject to restrictions as described in the ~~Company’s~~agreement (the “Lumo Restricted Shares”). The Lumo Restricted Shares are subject to vesting conditions related to employment and services to be provided by the recipients of up to three years. The Lumo Restricted Shares are accounted for as a share-based compensation and is amortized to the consolidated ~~financial statements.~~statement of income over the vesting period of three years

~~Also~~Of the remaining 20.0% noncontrolling interest retained by the sellers, 12.5% is subject to restrictions, which will lapse in three annual installments, subject to employment and service conditions.

The Company has a conditional continuing call option to purchase a portion or the entire noncontrolling interest from the sellers during the period beginning at the third anniversary of the Closing Date and ending three years later.

The sellers, as a group, have a one-time option to sell a portion or all if their noncontrolling interest to the Company, which subject to certain conditions, may be exercised on ~~August 10, 2017, GRE~~one occasion only, at any time during the two-year period beginning at the fourth anniversary of the Closing Date.

The Company recorded revenue for Lumo of approximately $4.8 million in its consolidated statements of operations and ~~Angus entered into~~comprehensive income for three months ended March 31, 2019. The net income or loss attributable to this acquisition cannot be identified on a Management Agreement pursuant to which Angus will provide any and all functions required to run and operate Mirabito. The Management Agreement terminates in August 2021, unless otherwise terminated by GRE for failure to achieve the business profit thresholds containedstand-alone basis because it is in the ~~Management Agreement. Angus will receive an annual management fee from GRE equal to~~process of being integrated into the ~~greater of 30% of the business profits of Mirabito, as defined, or $250,000.~~Company's operations.

The impact of the acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred were as ~~follows (in thousands):~~follows:

(in thousands)
Cash	$	1,539
Trade accounts receivable		2,520
Other current assets		411
Intangible assets:
Trademark (5-year useful life)		294
Non-compete agreements (3-year useful life)		34
Customer relationship (2-year useful life)		2,150
Goodwill		2,090
Other assets		95
Accounts and other current liabilities		(2,403	)
Short-term debts		(2,260	)
Other liabilities		(195	)
Noncontrolling interest		(884	)
Net assets	$	3,391

Trade accounts receivable $ 509
Prepaid expenses 60
Non-compete agreement 5
Customer relationships 1,100
Patents and trademarks 760
Goodwill 1,270
Other assets 465
Trade accounts payable (299 )
Accrued expenses (2 )
Net assets excluding cash acquired $ 3,868
Supplemental information:
Cash paid $ 3,804
Cash acquired (87 )
Cash paid, net of cash acquired 3,717
Liability for working capital payment 151

Total consideration, net of cash acquired $ 3,868

(in thousands)
Supplemental information
Cash paid to Sellers	$	1,869
Cash contributed to Lumo		1,522
Total consideration	$	3,391

The ~~goodwill resulting~~short-term debt, which was repaid in January 2019, pertained to loans incurred by Lumo from a financial institution and its equityholders in an aggregate amount of $2.3 million and bore weighted average interest rate of 3.75%.

Goodwill was allocated to the GREInternational segment. Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce. Goodwill recognized as a result of the acquisition is ~~primarily~~not deductible for income tax purposes.

The preliminary allocations of the purchase prices for acquisitions are based upon initial valuations. The Company's estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete its valuations within the measurement periods, which are up to one year from the respective acquisition dates. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, assets and liabilities, noncontrolling interest and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition dates that, if known, would have resulted in the recognition of those assets and liabilities as of those dates. These adjustments will be made in the periods in which the amounts are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. All changes that do not qualify as adjustments made during the measurement periods are also included in current period earnings.

Acquisition of Prism

Prism is a solar solutions company that is engaged in US based panel manufacturing, installation design and project management. Prism’s solar panels feature high efficiency N-type silicon solar cells designed into bifacial solar modules which result in systems with a reduction in the average cost per kilowatt hour, while their glass-on-glass design increases the durability and lifetime value of Prism’s panels.

Between August and October 2018, the Company extended an aggregate of $1.3 million in bridge loans to Prism. The bridge loans, which were secured by a subordinated security interest in Prism’s assets as well as a second mortgage and assignment of rents on Prism’s plant and facility, bore fixed annual interest rate of 12%.

On October 25, 2018, the Company acquired a 60.0% controlling interest in Prism in exchange for a total consideration of $4.0 million, which includes (i) the conversion of $1.4 million of principal amount and accrued interest on the bridge loans into equity of Prism, (ii) a $1.1 million cash contribution to Prism, and (iii) an obligation to fund Prism with an additional $1.5 million within 60 days.

The Company recorded revenue for Prism of approximately $3.3 million in its consolidated statements of operations and comprehensive income for three months March 31, 2019. The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the ~~existing workforce~~process of being integrated into the Company's operations.

The impact of the ~~acquired entities~~acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred were as follows:

(in thousands)
Cash	$	931
Trade accounts receivable		11
Inventories		1,142
Other current assets		260
Property plant and equipment (19-year weighted average useful life)		3,564
Intangible assets:
Trademark (10-year useful life)		320
Patent (10-year useful life)		370
Customer contract (3-year useful life)		1,600
Goodwill		804
Accounts payable accrued expenses		(1,723	)
Notes payable — current portion		(63	)
Notes payable — net of current portion		(885	)
Other current liabilities		(1,164	)
Noncontrolling interest		(2,667	)
Net assets	$	2,500

(in thousands)
Supplemental information
Cash contributed to Prism	$	899
Notes receivable from Prism, including accrued interest, converted to Prism's equity		1,351
Cash payment to previous equity holders of Prism		250
		2,500
Notes payable issued to Prism		1,500
Total considerations	$	4,000

Goodwill was allocated to the GES segment. Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies ~~expected from~~of the ~~combination~~combined company and assembled workforce. Goodwill recognized as a result of ~~GRE and Mirabito’s REP businesses. This goodwill~~the acquisition is not deductible for income tax purposes.

During the first quarter of 2019, the Company obtained information relevant to determining the fair values of certain intangible assets acquired related to acquisition of Prism and adjusted its purchase price allocation. Based on this information, the Company recognized increased allocation of the purchase price:in a minimal amount in trademark, of $0.1 million to patent and $0.2 million to customer contract and a decrease in goodwill of $0.3 million.

Prism's notes payable consisted of the following:

	March 31, 2019		December 31, 2018		October 25, 2018
	(in thousands)
5.95% note payable, due in monthly payments of $7,184 including interest, through November 2019 when the balloon payment is due, collateralized by Prism's assets	$	888	$	893	$	918
20.00% demand note payable, uncollaterlized		30		30		30
Total notes payable		918		923		948
Less: Current maturities		918		923		63
Noncurrent portion	$	—	$	—	$	885

On April 12, 2019, Prism’s restructured its ownership. The Company now holds a 60% interest Plus EnerG, Inc. ("Plus EnerG") which owns 100% of Prism.

Divestiture of Majority Interest in Atid Drilling Ltd.

Following the Company’s decision to suspend its oil and gas exploration drilling activities, in June 2018, the Company initiated a plan to sell primarily all of Atid Drilling Ltd.'s ("Atid") assets and liabilities. In 2018, the Company recorded a write-down to fair value of Atid’s net assets in the amount of $2.7 million. On September 1, 2018, Genie Israel Holdings Ltd., a wholly-owned subsidiary of GOGAS (“Genie Israel”) contributed to Atid 613, the equity of Atid with net book value of $1.0 million in exchange for 37.5% interest in Atid 613. The remaining interest in Atid 613 are held by Howard Jonas, the Company’s Chairman (37.5%) and by Geoffrey Rochwarger, the Company’s former Vice Chairman (25.0%) and the Chief Executive Officer of Atid 613.

Genie Israel also entered into a Shareholder Agreement with Atid 613's other shareholders to govern certain issues regarding management of the new company. Under the Shareholder Agreement, among other things, Genie Israel has agreed to make available to Atid 613 a working capital financing up to $0.4 million (“Credit Facility”). The Credit Facility bears a variable interest rate as defined in the Shareholder Agreement. As of March 31, 2019, the outstanding balance of Credit Facility was $0.2 million, included in other assets account in the consolidated balance sheet.

Genie Israel accounts for its investments Atid 613 using the equity method of accounting.

Pro Forma Results (unaudited)

The following ~~table presents~~ unaudited pro forma financial information summarizes the results of operations for the ~~Company~~three months ended March 31, 2018 as if the ~~acquisition~~acquisitions of Lumo and Prism and divestiture of majority interest in Atid 613, had been completed as of the beginning 2018. The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect (i) the change in depreciation expense and intangible asset amortization, (ii) timing of recognition for certain expenses that will not be recurring in the post-acquisition period, (iii) impairment of assets related to Atid, and (iv) income taxes at a rate consistent with the Company’s statutory rate at the date of the acquisitions. No effect has been given to other cost reductions or operating synergies. As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on ~~January 1, 2016:~~the basis assumed above, nor are they indicative of the results of future combined operations.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
(in thousands)
Revenues $ 70,038 $ 58,204 $ 194,932 $ 164,308
Net income (loss) $ 957 $ (37,206 ) $ (7,734 ) $ (30,822 )

	Three Months Ended March 31, 2018
(in thousands, except earnings per share)
Total revenues	$	93,112
Net income		3,162
Net income attributable to Genie Energy Ltd. common stockholders		3,562
Earnings per share attributable to Genie energy Ltd. common stockholders
Basic		0.15
Diluted		0.15

Note 3—6—Fair Value Measurements

The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:

Level 1 (1)

Level 2 (2)

Level 3 (3)

Total

(in thousands)
September 30, 2017
Assets:
Derivative contracts $ 167 $ 2,525 $ — $ 2,692
Liabilities:
Derivative contracts $ 6 $ 1,539 $ — $ 1,545
December 31, 2016
Assets:
Derivative contracts $ 256 $ 2,395 $ — $ 2,651
Liabilities:
Derivative contracts $ 60 $ 1,667 $ — $ 1,727

	Level 1 (1)		Level 2 (2)		Level 3 (3)		Total
	(in thousands)
March 31, 2019
Assets:
Derivative contracts	$	370	$	111	$	—	$	481
Liabilities:
Derivative contracts	$	892	$	219	$	—	$	1,111
December 31, 2018
Assets:
Derivative contracts	$	1,107	$	467	$	—	$	1,574
Liabilities:
Derivative contracts	$	2,100	$	248	$	—	$	2,348

(1) – quoted prices in active markets for identical assets or liabilities

(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities

(3) – no observable pricing inputs in the market

The Company’s derivative contracts consist of natural gas and electricity put and call options and swaps. The underlying asset in the Company’s put and call options is a forward contract. The Company’s swaps are agreements whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period.

The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three months ended March 31, 2019 and 2018.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting this data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Restricted cash—short-term and long-term, ~~prepaid expenses, other current assets, revolving line of credit—current,~~trade receivables, due to IDT Corporation, and other current liabilities. At ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, the carrying amounts of these assets and liabilities approximated fair ~~value because of the short period to maturity.~~value. The fair value estimate for restricted cash—short-term and long-term was classified as Level 1 and ~~prepaid expenses,~~ other current assets, ~~revolving line of credit~~—~~current~~, due to IDT Corporation, and other current liabilities were classified as Level 2 of the fair value hierarchy.

Other assets, revolving line of ~~credit—long-term~~credit, notes payable and other liabilities.At ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, other assets included an aggregate of ~~$0.7~~$0.5 million ~~and $1.5 million, respectively,~~ in notes receivable. The carrying amounts of the notes receivable, revolving line of credit,—~~long-term~~ notes payable and other liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, and were classified as Level 3 of the fair value hierarchy.

The ~~carrying amount~~Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the ~~revolving line of credit~~—~~long-term approximated~~ fair value ~~because~~measurement hierarchy during the three months ended March 31, 2019 and 2018.

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, derivatives and accounts receivable. The Company believes it ~~bears interest at a variable market rate.~~had no significant concentrations of credit risk as of March 31, 2019.

Note 4—7—Derivative Instruments

The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with Accounting Standards Codification ~~815—~~815 — Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps, therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At ~~September 30, 2017 and December~~March 31, ~~2016,~~2019, GRE’s swaps and options were traded on the ~~New York Mercantile~~Intercontinental Exchange. GRE International's swaps and options were traded through a counterparty.

The summarized volume of GRE’s outstanding contracts and options at ~~September 30, 2017~~March 31, 2019 was as follows (MWh – Megawatt hour and Dth – Decatherm):

~~Commodity~~	~~Settlement Dates~~	~~Volume~~
~~Electricity~~	~~October 2017~~	~~31,680 MWh~~
~~Electricity~~	~~November 2017~~	~~223,440 MWh~~
~~Electricity~~	~~December 2017~~	~~283,200 MWh~~
~~Electricity~~	~~January 2018~~	~~397,760 MWh~~
~~Electricity~~	~~February 2018~~	~~361,600 MWh~~
~~Electricity~~	~~March 2018~~	~~214,720 MWh~~
~~Electricity~~	~~July 2018~~	~~159,600 MWh~~
~~Electricity~~	~~August 2018~~	~~174,800 MWh~~
~~Electricity~~	~~October 2018~~	~~73,600 MWh~~
~~Electricity~~	~~November 2018~~	~~67,200 MWh~~
~~Electricity~~	~~December 2018~~	~~64,000 MWh~~
~~Natural gas~~	~~November 2017~~	~~1,230,000 Dth~~
~~Natural gas~~	~~December 2017~~	~~793,000 Dth~~
~~Natural gas~~	~~January 2018~~	~~155,000 Dth~~
~~Natural gas~~	~~February 2018~~	~~580,000 Dth~~

Settlement Dates	Volume
	Electricity (in MWH)		Gas (in Dth)
Second quarter 2019		28,864		80,125
Third quarter 2019		44,608		86,300
Fourth quarter 2019		35,344		1,163,050
First quarter 2020		186,560		1,101,477
Second quarter 2020		5,120		67,550
Third quarter 2020		22,800		34,850
Fourth quarter 2020		5,120		38,800
First quarter 2021		—		40,300
Second quarter 2021		—		29,650
Third quarter 2021		—		21,500
Fourth quarter 2021		—		15,750
First quarter 2022		—		9,750

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:

Asset Derivatives	Balance Sheet Location	September 30, 2017		December 31, 2016		Balance Sheet Location	March 31, 2019		December 31, 2018
		(in thousands)					(in thousands)
Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options¹						Other current assets	$	282	$	1,116
Energy contracts and options	Other current assets	$	2,692	$	2,651	Other assets		199		458
Total derivatives not designated or not qualifying as a hedging instruments — Assets							$	481	$	1,574

Liability Derivatives

Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options¹						Other current liabilities	$	856		2,028
Energy contracts and options						Other liabilities		255		320
Total derivatives not designated or not qualifying as a hedging instruments — Liabilities							$	1,111	$	2,348

Liability Derivatives

Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options Other current liabilities $ 1,545 $ 1,727

(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

The effects of derivative instruments on the consolidated statements of operations ~~were~~was as follows:

Amount of Loss Recognized on Derivatives

Three Months Ended
September 30,

Nine Months Ended
September 30,

Derivatives not designated
or not qualifying as
hedging instruments Location of Gain (Loss) Recognized on Derivatives 2017 2016 2017 2016
(in thousands)
Energy contracts and options Cost of revenues $ (763 ) $ (1,183 ) $ (3,482 ) $ (381 )

~~Note 5—Afek Oil and Gas Exploration Activities~~

The Company accounts for Afek’s oil and gas activities under the successful efforts method of accounting. Under this method, the costs of drilling exploratory wells and exploratory-type stratigraphic test wells are capitalized, pending determination of whether the well has found proved reserves. Other exploration costs are charged to expense as incurred. Unproved properties are assessed for impairment, and if considered impaired, are charged to expense when such impairment is deemed to have occurred.

In April 2013, the Government of Israel finalized the award to Afek of an exclusive three-year petroleum exploration license covering 396.5 square kilometers in the southern portion of the Golan Heights in Northern Israel. The license has been extended to April 2018. Israel’s Northern District Planning and Building Committee granted Afek a one-year permit that commenced in February 2015, which has been subsequently extended to April 18, 2018, to conduct an up to ten-well oil and gas exploration program. This permit as extended is expected to cover the remainder of Afek’s ongoing exploration program in the area covered by its exploration license.

In February 2015, Afek began drilling its first exploratory well. To date, Afek has completed drilling five wells in the Southern region of its license area. Based on the analysis of the first five wells and market conditions at the time, in the third quarter of 2016, Afek determined that it did not have a clear path to demonstrate probable or possible reserves in the Southern region of its license area over the next 12 to 18 months. Since there was substantial doubt regarding the economic viability of these wells, in the third quarter of 2016, Afek wrote off the $41.0 million of capitalized exploration costs incurred in the Southern region.

			Amount of Gain (Loss) Recognized on Derivatives
Derivatives not designated or not qualifying as	Location of Gain (Loss) Recognized		Three Months Ended March 31,
hedging instruments	on Derivatives		2019			2018
		(in thousands)
Energy contracts and options	Cost of revenues		$	(2,909	)	$	(83	)

Afek has turned its operational focus to the Northern region of its license area. Afek views the Northern and Southern regions separately when evaluating its unproved properties. In 2017, Afek commenced drilling its sixth exploratory well – the first well in the Northern region of its license area. Afek expects to complete drilling of the well during the fourth quarter of 2017. At September 30, 2017 and December 31, 2016, the Company had capitalized exploration costs of $5.7 million and nil, respectively, related to activities at Afek. In the three months ended September 30, 2017 and 2016, the Company recognized exploration expense of $0.8 million and $1.3 million, respectively, and in the nine months ended September 30, 2017 and 2016, the Company recognized exploration expense of $2.6 million and $4.4 million, respectively.

Afek assesses the economic and operational viability of its project on an ongoing basis, and to date believes that sufficient progress is being made in regards to its current project. The assessment requires significant estimates and assumptions by management. Should Afek’s estimates or assumptions regarding the recoverability of its capitalized exploration costs prove to be incorrect, Afek may be required to record impairments of such costs in future periods and such impairments could be material.

Note 6—8—Investment in ~~Joint Venture~~Equity Method Investees

Investment in Shoreditch

On July 17, 2017, the Company’s subsidiary, Genie Energy UK Ltd. (“GEUK”), entered into a definitive agreement with Energy Global Investments Pty Ltd (“EGC”) to launch Shoreditch Energy Limited (“Shoreditch”), a joint venture ~~that intends~~ to offer electricity and natural gas service to residential and small business customers in the United ~~Kingdom. At September 30, 2017, GEUK had~~Kingdom, using the trade name Orbit Energy (the “JV Agreement”). Through March 31, 2019, the Company contributed ~~$1.3~~a total of $5.3 million to Shoreditch and ~~GEUK will contribute an additional aggregate~~owns 67% of up to £4.2 million ($5.7 million at September 30, 2017) by August 1, 2018, contingent on Shoreditch’s achievement of performance based milestones. EGC will contribute an aggregate of up to £1.7 million ($2.2 million at September 30, 2017) to Shoreditch by August 1, 2018, contingent on Shoreditch’s achievement of performance based milestones.the equity.

~~GEUK owns 65% of~~EGC has several significant participation rights in the ~~equity~~management of Shoreditch ~~and EGC owns 35% of~~that limits GEUK’s ability to direct the ~~equity. Shoreditch is a separate legal entity under the joint control of GEUK and EGC. GEUK and EGC each appoint two members of~~activities that most significantly impact Shoreditch’s ~~Board of Directors, and jointly control Shoreditch through their participation on the Board, which makes all operating decisions.~~economic performance. GEUK, therefore, accounts for its ownership interest in Shoreditch using the equity method since GEUK has the ability to exercise significant influence over its operating and financial matters, although it does not control Shoreditch.

~~GEUK accounts for~~

In 2018, the ~~difference between the purchase price of Shoreditch’s equity and its share of the underlying equity~~Company extended $0.2 million loan to EGC (“EGC Loan”), in ~~the net assets of Shoreditch as if Shoreditch were a consolidated subsidiary. The difference of $0.5 million was allocated to goodwill. The goodwill relates to~~connection with EGC’s contribution to Shoreditch. The EGC Loan, which is secured by EGC’s interest in Shoreditch, bears a fixed annual interest rate of ~~their knowledge, experience~~2% and ~~detailed business plan for operating a REP in~~is due, together with the ~~United Kingdom.~~principal amount on September 17, 2023. As of March 31, 2019, the outstanding balance, including accrued interest, of the EGC Loan was $0.2 million.

~~The following table summarizes~~At March 31, 2019, the ~~change in~~Company’s maximum exposure to loss as a result of its involvement with Shoreditch was its net book value of investments of $0.6 million, excluding the balance of ~~GEUK’s investment in Shoreditch in~~EGC Loan, since there were no other arrangements, events or circumstances that could expose the ~~nine months ended September 30, 2017 (in thousands):~~Company to additional loss.

Balance, beginning of period $ —
Capital contributions 1,275
Equity in the net loss of joint venture (159 )
Balance, end of period $ 1,116

Summarized unaudited statements of operations of Shoreditch are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016		2017			2016			2019			2018
	(in thousands)										(in thousands)
Revenues												$	3,911		$	114
Operating expenses:
Cost of revenues													3,700			133
Selling, general and administrative	$	244		$	—	$	244		$	—			1,807			760
Loss from operations		(244	)		—		(244	)		—			(1,596	)		(779	)
Other income		—			—		—			—
Other													—			—
Net loss	$	(244	)	$	—	$	(244	)	$	—		$	(1,596	)	$	(779	)
Genie’s equity in net loss												$	(1,070	)	$	(506	)

Investment in Atid 613

As discussed in Note 5, Acquisitions and Divestitures, in September 2018, the Company divested a majority interest in Atid in exchange for 37.5% interest in Atid 613 which the Company accounts for using equity method of accounting.

Summarized unaudited statements of operations of Atid 613 are as follows for the three months ended March 31, 2019 (in thousands):

Revenues	$	2,055
Operating expenses:
Cost of revenues		1,340
Selling, general and administrative		—
Loss from operations		715
Other		(8	)
Net income	$	707
Genie’s equity in net income	$	274

At March 31, 2019, the Company’s maximum exposure to loss as a result of its involvement with Atid 613 was its net book value of investment of $0.8 million and notes receivable of $0.1 million, excluding the undrawn balance of the Credit Facility, since there were no other arrangements, events or circumstances that could expose the Company to additional loss.

Note 9—Goodwill and Other Intangible Assets

The table below reconciles the change in the carrying amount of goodwill for the period from January 1, 2018 to March 31, 2018:

(in thousands)	GRE		GRE International			GES		Total
Balance at January 1, 2019	$	9,998	$	—	$	1,084		$	11,082
Prisim acquisition purchase price allocation adjustment (see Note 5)		—		—		(280	)		(280	)
Acquisition of Lumo (see Note 5)		—		2,090		—			2,090
Translation adjustment		—		131		—			131
Balance at March 31, 2019	$	9,998	$	2,221	$	804		$	13,023

The table below presents information on the Company’s other intangible assets:

(in thousands)	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Balance
March 31, 2019
Patents and trademarks		17.1 years	$	3,838	$	357	$	3,481
Non-compete agreements		1.6 years		148		117		31
Customer relationships		3.9 years		6,945		2,783		4,162
Licenses		10.0 years		895		60		835
TOTAL			$	11,826	$	3,317	$	8,509
December 31, 2018
Trademark		17.3 years	$	3,470	$	288	$	3,182
Non-compete agreement		2.0 years		115		112		3
Customer relationships		4.0 years		4,612		2,334		2,278
Licenses		10.0 years		895		37		858
TOTAL			$	9,092	$	2,771	$	6,321

Amortization expense of intangible assets (including minimal amount reported in cost of revenues) was $0.7 million and $0.3 million in three months ended March 31, 2019 and 2018, respectively. The Company estimates that amortization expense of intangible assets will be $1.5 million, $2.1 million, $1.0 million, $0.5 million, $0.5 million and $2.9 million for the remaining of 2019, 2020, 2021, 2022, 2023 and 2024 and thereafter, respectively.

Note 7—10—Leases

The Company entered into operating lease agreements primarily for offices throughout the world with lease periods expiring between 2019 and 2030. The Company has no finance leases.

The Company determine if a contract is a lease at inception. Operating lease assets and liabilities are included on our consolidated balance sheet beginning January 1, 2019. Righ-of-Use- ("ROU") assets were included under other assets in the consolidated balance sheet. The current portion of the operating lease liabilities were included in other current liabilities and the noncurrent portion is included in other liabilities in the consolidated balance sheet.

ROU assets and operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized borrowing rate based on information available at the lease commencement date. ROU assets also include any prepaid lease payments and lease incentives. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The Company use the base, non-cancelable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term.

(in thousands)	March 31, 2019

ROU Assets	$	2,293

Current portion of operating lease liabilities		370
Noncurrent portion of operating lease liabilities		1,941
Total	$	2,311

At March 31, 2019 the weighted average remaining lease term is 8.9 years and the weighted average discounts rate is 7.2%.

Supplemental cash flow information to leases was a follows for the three months ended March 31, 2019:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating activities	$	136

ROU assets obtained in the exchange for lease liabilities
Operating leases	$	80

Future lease payments under operating leases as of March 31, 2019 were as follows:

(in thousands)
Remainder of 2019	$	406
2020		426
2021		376
2022		217
2023		221
Thereafter		1,530
Total future lease payments		3,176
Less imputed interest		865
Total operating lease liabilities	$	2,311

Rental expense under operating leases was $0.2 million and $0.1 million in the three months period March 31, 2019 and 2018, respectively.

Note 11—Equity

~~Changes in the components of equity were as follows:~~Dividend Payments

The following table summarizes the quarterly dividends paid by the Company during the three months ended March 31, 2019:

Nine Months Ended
September 30, 2017

Attributable to Genie
Noncontrolling Interests

Total

(in thousands)
Balance, December 31, 2016 $ 96,534 $ (16,669 ) $ 79,865
Dividends on preferred stock (1,111 ) — (1,111 )
Dividends on common stock ($0.225 per share) (5,563 ) — (5,563 )
Exercise of stock options 109 — 109
Restricted Class B common stock purchased from employees (829 ) — (829 )
Purchases of equity of subsidiary (746 ) 434 (312 )
Class B common stock issued for GRE deferred stock units 1,845 — 1,845
Stock-based compensation 2,330 — 2,330
Comprehensive loss:
Net loss (7,208 ) (626 ) (7,834 )
Foreign currency translation adjustments 1,348 (585 ) 763
Comprehensive loss (5,860 ) (1,211 ) (7,071 )
Balance, September 30, 2017 $ 86,709 $ (17,446 ) $ 69,263

Declaration Date

Dividend Per Share

Aggregate Dividend Amount

Record Date

Payment Date

Series 2012-A Preferred Stock (“Preferred Stock”)

January 16, 2018

0.1594

370

February 6, 2018

February 15, 2018

Class A Common Stock and Class B Common Stock

March 7, 2018

0.0750

2,006

March 19, 2018

March 23, 2018

~~Dividend Payments~~

In the nine months ended September 30, 2017 and 2016, the Company paid aggregate quarterly Base Dividends of $0.4782 per share on its Series 2012-A Preferred Stock (“Preferred Stock”), or $1.1 million in total. On ~~October 19, 2017,~~April 10, 2019, the Company’s Board of Directors declared a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for the ~~third~~first quarter of ~~2017.~~2019. The dividend will be paid on or about ~~November~~May 15, ~~2017~~2019 to stockholders of record as of the close of business ~~on November 1, 2017.~~May 6, 2019.

In the nine months ended September 30, 2017, the Company paid aggregate quarterly dividends of $0.225 per share on its Class A common stock and Class B common stock, or $5.6 million in total. In the nine months ended September 30, 2016, the Company paid aggregate quarterly dividends of $0.18 per share on its Class A common stock and Class B common stock, or $4.4 million in total. On ~~November 1, 2017,~~May 2, 2019, the Company’s Board of Directors declared a quarterly dividend of $0.075 per share on its Class A common stock and Class B common stock for the ~~third~~first quarter of ~~2017.~~2019. The dividend will be paid on or about ~~November 17, 2017~~May 31, 2019 to stockholders of record as of the close of business on ~~November 13, 2017.~~May 20, 2019.

~~Exercise~~The Delaware General Corporation Law, allows companies to declare dividends out of ~~Stock Options~~“Surplus,” which is calculated by deducting the par value of the company’s stock from the difference between total assets less total liabilities. The Company elected to record dividends declared against accumulated deficit.

In the nine months ended September 30, 2017, the Company received proceeds of $0.1 million from the exercise of stock options for which the Company issued 15,855 shares of its Class B common stock. There were no stock option exercises in the nine months ended September 30, 2016.

Stock ~~Repurchases~~Repurchase Program

On March 11, 2013, the Board of Directors of the Company approved a ~~stock repurchase~~ program for the repurchase of up to an aggregate of 7.0 million shares of the Company’s Class B common stock. There were no repurchases under this program in the ~~nine~~three months ended ~~September 30, 2017 or 2016.~~March 31, 2019 and 2018. At ~~September 30, 2017,~~March 31, 2019, 6.9 million shares remained available for repurchase under the stock repurchase program.

~~In the nine months ended September 30, 2017,~~Sales of Shares and Warrants

On June 8, 2018, the Company ~~paid $0.8 million~~sold to ~~repurchase 129,898 shares~~Howard S. Jonas, the Chairman of ~~its Class B common stock. In the nine months ended September 30, 2016, the Company paid $29,000 to repurchase 3,096 shares of its Class B common stock. These shares were tendered by~~ the Company’s ~~employees to satisfy tax withholding obligations in connection with the lapsing~~Board of ~~restrictions on awards of restricted stock. Such shares were repurchased by the Company based on their fair market value on the trading day immediately prior to the vesting date.~~

~~Purchases of Equity of Subsidiary~~

~~In the nine months ended September 30, 2017, GOGAS purchased from employees of Afek~~Directors and a ~~1.15% fully vested interest in Afek for $0.3 million in cash.~~

~~Issuance of Class B Common Stock~~

GRE has the right, at its option, to satisfy its obligations to issue common stock of GRE upon the vesting of the deferred stock units it granted in July 2015 to officers and employees of the Company inprincipal owner, (1) 1,152,074 shares of the Company’s Class B common stock, ~~or cash. In August 2017, the Company issued 287,233~~at a price of $4.34 per share for an aggregate sales price of $5.0 million, and (2) warrants to purchase an additional 1,048,218 shares of the Company’s Class B common stock at an exercise price of $4.77 per share for an aggregate exercise price of $5.0 million. The warrants will expire in ~~exchange for 26.1 vested deferred stock units of GRE. The aggregate fair value of~~June 2023. In addition, on June 12, 2018, the Company sold to a third-party investor (1) 230,415 treasury shares of the Company’s Class B common stock, ~~issued was $1.8~~at a price of $4.34 per share for an aggregate sales price of $1.0 million, and (2) warrants to purchase an additional 209,644 shares of the Company’s Class B common stock at an exercise price of $4.77 per share for an aggregate exercise price of $1.0 million. As of March 31, 2019, there were outstanding 1,257,862 warrants to purchase the Company’s Class B common stock at $4.77 per share which will expire on in June 2023.

Purchase of Equity of Subsidiary

In June 2018, an entity affiliated with Lord (Jacob) Rothschild exercised its option to exchange its 5% equity interest in GOGAS for 41,667 shares of the Company’s Class B common stock. The fair value of the shares of Class B common stock at the time of the exchange was $0.22 million. The Company’s ownership of GOGAS increased from 92% to 97% upon the completion of the exchange.

Issuance of Class B Common Stock

In January 2, 2019, as part of the acquisition of Lumo, the Company issued 176,104 shares of it's Class B common stock to the sellers which are subject to restrictions that lapse over time (see Note 5 —Acquisition and Divestitures).

Stock-Based Compensation

On May 7, 2018, the Company’s stockholders approved an amendment to the Company’s 2011 Stock Option and Incentive Plan to reserve an additional 974,199 shares of the Company’s Class B common stock for issuance thereunder.

On February 11, 2019, the Company issued options to Howard S. Jonas to purchase 126,176 shares of the Company’s Class B common stock at an exercise price of $8.05 per share in lieu of a cash bonus of $0.3 million. These options vest in three equal annual installments beginning on February 11, 2020.

As of March 31, 2019, there was approximately $2.6 million of total unrecognized compensation costs related to the unvested restricted stock awards. These costs are expected to be recognized over a weighted-average period of approximately 2.3 years.

GRES and GREI Equity Grants

In August 2017, Genie Retail Energy International, LLC ("GREI"), a subsidiary of GRE, which holds the Company's interests in ventures in the U. K., Japan and Finland, granted deferred stock units in GREI representing an aggregate of 4.0% of the outstanding equity in GREI to certain of the Company’s officers and a consultant. The deferred stock units vest in equal amounts on the first, second and third anniversaries of the date of grant. The fair value of the GREI deferred stock units on the date of grant was minimal, which is being recognized on a straight-line basis over the requisite service period, which approximates the vesting period. GREI recognized minimal amount of compensation costs related to the vesting of the GREI deferred stock for the three months ended March 31, 2019 and 2018. At March 31, 2019, the unrecognized compensation cost relating to these grants was $0.1 million, which is expected to be recognized over a period of 1.7 years.

In August 2017, Genie Retail Energy Services, LLC ("GRES"), a subsidiary of GRE, granted deferred stock units in GES representing an aggregate of 4.5% of the outstanding equity in GRES to certain of the Company’s officers and a consultant. The deferred stock units vest in equal amounts on the first, second and third anniversaries of the date of grant. The fair value of the GRES deferred stock units on the date of grant was minimal, which is being recognized on a straight-line basis over the requisite service period, which approximates the vesting period. GRES recognized minimal compensation costs related to the vesting of the GRES deferred stock units the three months ended March 31, 2019 and 2018. At March 31, 2019, the unrecognized compensation cost relating to these grants was minimal, which is expected to be recognized over a period of 1.6 years.

Note 12—Variable Interest ~~Entities~~Entity

Citizens Choice Energy, LLC (“CCE”), is a REP that resells electricity and natural gas to residential and small business customers in the State of New York. The Company does not own any interest in CCE. Since 2011, the Company has provided CCE with substantially all of the cash required to fund its operations. The Company determined that it has the power to direct the activities of CCE that most significantly impact its economic performance and it has the obligation to absorb losses of CCE that could potentially be significant to CCE on a stand-alone basis. The Company therefore determined that it is the primary beneficiary of CCE, and as a result, the Company consolidates CCE within its GRE segment. The net income or loss incurred by CCE was attributed to noncontrolling interests in the accompanying consolidated statements of operations.

The Company has an option to purchase 100% of the issued and outstanding limited liability company interests of CCE for one dollar plus the forgiveness of $0.5 million that the Company loaned to CCE in October 2015. The option expires on October 22, 2023.

Net ~~income (loss)~~loss related to CCE and aggregate net funding repaid to (provided by) the Company ~~in order to finance CCE’s operations~~ were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,							Three Months Ended March 31,
	2017		2016		2017			2016				2019		2018
	(in thousands)										(in thousands)
Net income (loss)	$	312	$	841	$	(21	)	$	(885	)		$	149	$	(268	)
Aggregate funding repaid to (provided by) the Company, net	$	173	$	617	$	202		$	(381	)		$	176	$	(95	)

Summarized combined balance sheet amounts related to CCE was as follows:

	September 30, 2017		December 31, 2016		March 31, 2019			December 31, 2018
	(in thousands)				(in thousands)
Assets
Cash and cash equivalents	$	55	$	150	$	29		$	70
Restricted cash		17		17
Trade accounts receivable		831		1,008		667			623
Prepaid expenses		442		450
Other current assets		28		26
Prepaid expenses and other current assets						356			411
Other assets		440		439		359			359
Total assets	$	1,813	$	2,090	$	1,411		$	1,463
Liabilities and noncontrolling interests
Current liabilities	$	653	$	707	$	489		$	513
Due to IDT Energy		1,096		1,298		1,773			1,949
Noncontrolling interests		64		85		(851	)		(999	)
Total liabilities and noncontrolling interests	$	1,813	$	2,090	$	1,411		$	1,463

The assets of CCE may only be used to settle obligations of CCE, and may not be used for other consolidated entities. The liabilities of CCE are non-recourse to the general credit of the Company’s other consolidated entities.

Note 13—Income Taxes

The consolidated effective tax rate for three months ended March 31, 2019 and 2018 was 32.0% and 12.0%, respectively. The increase in effective tax rate results from the release of the valuation allowance on the deferred tax assets in fourth quarter of 2018. For the three months ended March 31, 2018, the provision for income tax relates to recorded state income taxes on its GRE segment while the federal tax was offset by the existing valuation allowance. For the three months ended March 31, 2019, provision for income taxes relates to both federal as well as state income taxes. Federal tax expense reduces the deferred tax assets that are fully recognized in the balance sheet.

Note 8— 14—Earnings ~~(Loss)~~ Per Share

Basic earnings per share is computed by dividing net income or loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.

The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
	2017		2016		2017		2016			2019		2018
	(in thousands)								(in thousands)
Basic weighted-average number of shares		23,567		22,813		23,495		22,800			26,532		24,239
Effect of dilutive securities:
Stock options		—		—		—		—
Stock options and warrants											540		—
Non-vested restricted Class B common stock		591		—		—		—			168		56
Diluted weighted-average number of shares		24,158		22,813		23,495		22,800			27,240		24,295

The following shares were excluded from the diluted earnings per share computation:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
(in thousands)
Stock options 383 414 383 414
Non-vested restricted Class B common stock — 1,829 1,205 1,829
Shares excluded from the calculation of diluted earnings per share 383 2,243 1,588 2,243

		Three Months Ended March 31,
		2019		2018
	(in thousands)
Stock options and warrants			—		381

In the three months ended ~~September 30, 2017,~~March 31, 2018, stock options with an exercise price that was greater than the average market price of the Company’s stock during the period were excluded from the diluted ~~earnings~~loss per share computation. ~~In the nine months ended September 30, 2017, and the three and nine months ended September 30, 2016, the diluted loss per share computation equals basic loss per share because~~

Note 15—Related Party Transactions

On June 8, 2018, the Company ~~had a net loss and the impact of the assumed exercise of stock options and the vesting of restricted stock would have been anti-dilutive.~~

~~An entity affiliated with Lord (Jacob) Rothschild has a one-time option, subject to certain conditions and exercisable between November 2017 and February 2018, to exchange its GOGAS shares for~~sold shares of the Company with equal fair value as determined by the parties. The number of shares issuable in such an exchange is not currently determinable. If this option is exercised, the shares issued by the Company may dilute the earnings per share in future periods.

An employee of the Company, pursuant to the terms of his employment agreement, has the option to exchange his equity interests in Afek, Genie Mongolia, Inc. (“Genie Mongolia”), Israel Energy Initiatives, Ltd. (“IEI”), and any equity interest that he may acquire in other entities that the Company may create, for shares of the Company. In addition, employees and directors of the Company that were previously granted restricted stock of Afek and Genie Mongolia have the right to exchange the restricted stock, upon vesting of such shares, into shares of the Company’s Class B common stock. GRE has the right, at its option, to satisfy its obligations to issue common stock of GRE upon the vesting of the deferred stock units it granted in July 2015 to officers and employees of the Company in shares of the Company’s Class B common stock ~~or cash. These exchanges~~ and ~~issuances, if elected, would be based on the relative fair value of the shares exchanged or~~warrants to ~~be issued. The number of~~purchase shares of ~~the Company’s~~its Class B common stock ~~issuable in an exchange is not currently determinable. If shares of the Company’s stock are issued upon such exchange, the Company’s earnings per share may be diluted in future periods.~~

to Howard S. Jonas (see Note ~~9—Related Party Transactions~~11).

The Company was formerly a subsidiary of IDT Corporation (“IDT”). On October 28, 2011, the Company was spun-off by ~~IDT (the “Spin-Off”).~~IDT. The Company entered into various agreements with IDT prior to the ~~Spin-Off~~spin-off including an agreement for certain services to be performed by the Company and IDT. ~~Following~~Also, the ~~Spin-Off,~~Company provides specified administrative services to certain of IDT’s foreign subsidiaries.

On March 26, 2018, IDT completed a pro rata distribution of the common stock that IDT held in IDT’s subsidiary, Rafael Holdings, Inc. (“Rafael”) to IDT’s stockholders. Howard S. Jonas is the Chairman of the Board of Directors and the Chief Executive Officer of Rafael. The Company leases office space and parking in Rafael’s building and parking garage located at 520 Broad St, Newark, NJ. The Company also leases office space in Israel from Rafael. The leases expire in April 2025.

The charges for services provided by IDT to the Company, and rent charged by Rafael, net of the charges for the services provided by the Company to IDT, are included in “Selling, general and administrative” expense in the consolidated statements of operations. Also, the Company provides specified administrative services to certain of IDT’s foreign subsidiaries. The charges for these services reduce the Company’s “Selling, general and administrative” expense.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2017 2016 2017 2016
(in thousands)
Amount IDT charged the Company $ 313 $ 406 $ 1,203 $ 1,342
Amount the Company charged IDT $ 116 $ 151 $ 346 $ 425

		Three Months Ended March 31,
		2019		2018
	(in thousands)
Amount IDT charged the Company		$	182	$	316
Amount the Company charged IDT		$	37	$	121
Amount Rafael charged the Company		$	54	$	—

~~Note 10—Business Segment Information~~The following table presents the balance of receivables and payables to IDT and Rafael:

	March 31, 2019		December 31, 2018
	(in thousands)
Due to IDT	$	174	$	267
Due from IDT		37		33
Due to Rafael		—		—

The Company ~~owns 99.3%~~had minimal transactions with Zedge, Inc. (“Zedge”) related to certain employees of the Company providing services to Zedge. Zedge was a subsidiary of IDT and was spun-off in June 2016 and Howard Jonas is a current director. There is minimal amount due from Zedge at March 31, 2019 and December 31, 2018

From 2012 to 2015, the Company extended a series of loans to an employee with an aggregate principal amount of $0.5 million (“Promissory Notes”). The Promissory Notes bore interest equivalent to a minimum rate, in effect from time to time required by local regulations. The Notes and the related unpaid accrued interest were due on May 1, 2019. On August 31, 2018, the Company entered into a Loan Modification Agreement with the employee to restructure the Promissory Notes with outstanding balance of $0.5 million including $0.1 million of accrued interest. Pursuant to the Loan Modification Agreement, the employee paid the Company $0.4 million and the remaining outstanding balance of $0.1 million of the Promissory Notes and the related accrued interest is to be repaid between December 2020 and December 2052. The Company recorded minimal amounts of interest income for the three months ended March 31, 2019 and 2018 related to this debt. The outstanding balance, including accrued interest was $0.1 million as of March 31, 2019.

The Company obtains insurance policies from several insurance brokers, one of which is IGM Brokerage Corp. (“IGM”). IGM is owned by the mother of Howard S. Jonas and Joyce Mason, the Company’s Corporate Secretary. Jonathan Mason, husband of Joyce Mason and brother-in-law of Howard S. Jonas, provides insurance brokerage services via IGM. Based on information the Company received from IGM, the Company believes that IGM received commissions and fees from payments made by the Company (including payments from third party brokers). The Company paid IGM a total of $0.3 million in fourth quarter of 2018 related to premium of various insurance policies that were brokered by IGM. There was no outstanding payable to IGM was as of March 31, 2019. Neither Howard S. Jonas nor Joyce Mason has any ownership or other interest in IGM other than via the familial relationships with their mother and Jonathan Mason.

Note 16—Business Segment Information

In the first quarter of 2019 the Company revised its ~~subsidiary, GEIC,~~reportable segments in connection with the acquisition of Lumo and continuous expansion of activities in Japan and the U.K. Specifically, the Company now treats GRE International as a separate reportable segment which ~~owns 100%~~includes overseas retail energy supply businesses, currently consisting of ~~GRE~~interests in Lumo, Genie Japan and ~~92%~~the Company's share of ~~GOGAS.~~ operations of Shoreditch. There are no other changes in other reportable segments.

The change in reportable segments did not resulted in the reallocation of the Company's existing goodwill. Segment information from the prior year's financial statements have been reclassified in order to conform to the current year's presentation.

The Company has ~~three~~four reportable business segments: GRE, ~~Afek~~GRE International, GES and GOGAS. GRE owns and operates REPs, including IDT Energy, Residents Energy, Town Square Energy, and ~~Mirabito, and energy brokerage and marketing services.~~ Mirabito. Its REP businesses resell electricity and natural gas to residential and small business customers ~~primarily~~ in the Eastern and Midwestern United States. GRE ~~has outstanding deferred stock units granted to officers~~International, operates REPs in Japan and ~~employees that represent an aggregate interest~~Finland and manages the Company's share in operations of ~~1.25% of~~Shoreditch in the ~~equity of GRE.~~U.K. GES designs, manufactures and distributes solar panels and also offers energy brokerage and advisory services. The ~~Afek~~GOGAS segment is comprised of the Company’s ~~85.9%~~86.1% interest in Afek, ~~which operates~~ an oil and gas exploration project in the Golan Heights in Northern Israel, whose operations have been suspended, while waiting for an additional license from the government of Israel. ~~The~~ GOGAS segment ~~is comprised of~~also owns inactive oil shale projects ~~including AMSO, LLC, Genie Mongolia,~~ and ~~IEI.~~Atid 613. Corporate costs include unallocated compensation, consulting fees, legal fees, business development ~~expense~~expenses and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any cost of revenues.

The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.

The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. There are no significant asymmetrical allocations to segments.

Operating results for the business segments of the Company were as follows:

(in thousands)
GRE Afek GOGAS Corporate Total
Three Months Ended September 30, 2017
Revenues $ 69,473 $ — $ — $ — $ 69,473
Income (loss) from operations 4,773 (1,011 ) (158 ) (2,201 ) 1,403
Exploration — 753 — — 753
Equity in the net loss of Shoreditch 159 — — — 159

Three Months Ended September 30, 2016
Revenues $ 57,153 $ — $ — $ — $ 57,153
Income (loss) from operations 7,893 (42,666 ) (148 ) (2,181 ) (37,102 )
Exploration — 1,323 — — 1,323
Write-off of capitalized exploration costs — 41,041 — — 41,041

Nine Months Ended September 30, 2017
Revenues $ 191,126 $ — $ — $ — $ 191,126
Income (loss) from operations 4,352 (3,611 ) (350 ) (7,359 ) (6,968 )
Exploration — 2,556 — — 2,556
Equity in the net loss of Shoreditch 159 — — — 159

Nine Months Ended September 30, 2016
Revenues $ 160,593 $ — $ — $ — $ 160,593
Income (loss) from operations 23,760 (46,281 ) 221 (6,868 ) (29,168 )
Research and development — — 210 — 210
Exploration — 4,439 — — 4,439
Write-off of capitalized exploration costs — 41,041 — — 41,041
Gain on consolidation of AMSO, LLC — — 1,262 — 1,262
Equity in the net loss of AMSO, LLC — — 222 — 222

(in thousands)	GRE		GRE International		GES		GOGAS		Corporate		Total
Three Months Ended March 31, 2019
Revenues	$	76,517		4,843	$	5,257	$	—	$	—	$	86,617
Income (loss) from operations		13,503		(1,744)		(231)		(163)		(1,531)		9,834
Equity in the net income (loss) of equity method investees		—		(1,070)		—		273		—		(797)

Three Months Ended March 31, 2018
Revenues	$	88,766		—	$	502	$	—	$	—	$	89,268
Income (loss) from operations		11,016		(69)		(92)		(1,361)		(2,361)		7,133
Exploration		—		—		—		227		—		227	��
Equity in net loss of Shoreditch		—		506		—		—		—		506

Total assets for the business segments of the Company were as follows:

(in thousands)
GRE Afek GOGAS Corporate Total
Total assets:
September 30, 2017 $ 98,181 $ 13,491 $ 5,913 $ 2,625 $ 120,210

December 31, 2016 87,539 6,685 $ 12,224 15,365 121,813

(in thousands)	GRE		GRE International		GES		GOGAS		Corporate		Total
Total assets:
March 31, 2019	$	112,401	$	11,760	$	9,801	$	13,346	$	6,928	$	154,236
December 31, 2018	$	113,918	$	3,654	$	11,519	$	15,375	$	2,398	$	146,864

Note ~~11—~~17—Commitments and Contingencies

~~Legal Proceedings~~

On March 13, 2014, named plaintiff, Anthony Ferrare, commenced a putative class-action lawsuit against IDT Energy, Inc. in the Court of Common Pleas of Philadelphia County, Pennsylvania. The complaint was served on IDT Energy on July 16, 2014. The named plaintiff filed the suit on behalf of himself and other former and current electric customers of IDT Energy in Pennsylvania with variable rate plans, whom he contends were injured as a result of IDT Energy’s allegedly unlawful sales and marketing practices. On August 7, 2014, IDT Energy removed the case to the United States District Court for the Eastern District of Pennsylvania. On October 20, 2014, IDT Energy moved to stay or, alternatively, dismiss the complaint, as amended, by the named plaintiff. On November 10, 2014, the named plaintiff opposed IDT Energy’s motion to dismiss and IDT Energy filed a reply memorandum of law in further support of its motion to dismiss. On June 10, 2015, the Court granted IDT Energy’s motion to stay and denied its motion to dismiss without prejudice. The parties participated in mediation, and subsequently entered into a Settlement Agreement (see below), which received preliminary approval from the Court on October 16, 2017. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement.Legal Proceedings

On ~~July 2, 2014,~~October 5, 2018, named ~~plaintiff, Louis McLaughlin,~~plaintiffs Scott Mackey and Daniel Hernandez filed a putative ~~class-action lawsuit~~class action complaint against IDT Energy ~~Inc.~~ in the United States District Court for the ~~Eastern~~Northern District of Illinois alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. The named plaintiffs filed the suit on behalf of: (1) a putative Cell Phone class consisting of all persons in the U.S. to whom IDT Energy and/or a third party acting on IDT Energy’s behalf allegedly made one or more telemarketing calls promoting IDT Energy’s goods or services to their cellular telephone number through the use of an automatic telephone dialing system or an artificial or prerecorded voice within the four year period preceding the filing of the complaint and (2) a putative Do-Not-Call class consisting of all persons in the U.S. who allegedly received more than one call from IDT Energy and/or some party acting on IDT Energy’s behalf promoting IDT Energy’s goods or services in a 12-month period on their cellular phone or residential telephone line and whose number appears on the National Do-Not-Call registry within the four year period preceding the filing of the complaint. On November 30, 2018, IDT Energy filed its Answer and Defenses to the complaint and the parties are now engaged in discovery. IDT Energy denies the allegations in the complaint, which it believes to be completely, meritless and plans to vigorously defend this action. Based upon the Company’s preliminary assessment of this matter, a loss based on the merits is not considered probable, nor is the amount of loss, if any, estimable as of March 31, 2019.

On March 13, 2014, July 2, 2014 and July 15, 2014, named plaintiffs in Pennsylvania, New York and New Jersey commenced three separate putative class-action lawsuits against IDT Energy, GRE, GEIC, and Genie (collectively, “IDTE”) contending, among other things, that hethey and other ~~class members~~former and current customers of IDTE were injured as a result of ~~IDT Energy’s~~IDTE’s allegedly unlawful sales and marketing practices. The ~~named plaintiff filed the suit on behalf of himself and two subclasses: all IDT Energy customers who were charged a variable rate~~Company denied any basis for their energy from July 2, 2008, and all IDT Energy customers who participated in IDT Energy’s rebate program from July 2, 2008. On January 22, 2016, the named plaintiff filed an amended complaint on behalf of himself and all IDT Energy customers in New York State against IDT Energy, Inc., Genie Retail Energy, Genie Energy International Corporation, and Genie Energy Ltd. (collectively, “IDT Energy”). On February 22, 2016, IDT Energy moved to dismiss the amended complaint, and the named plaintiff opposed that motion. The parties participated in mediation, and subsequently entered into a Settlement Agreement (see below), which received preliminary approval from the Court on October 16, 2017. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement.

On July 15, 2014, named plaintiff, Kimberly Aks, commenced a putative class-action lawsuit against IDT Energy, Inc. in New Jersey Superior Court, Essex County, contending that she and other class members were injured as a result of IDT Energy’s alleged unlawful sales and marketing practices. The named plaintiff filed the suit on behalf of herself and all other New Jersey residents who were IDT Energy customers at any time between July 11, 2008 and the present. The parties were engaged in discovery prior to the mediation described below. On April 20, 2016, the named plaintiff filed an amended complaint on behalf of herself and all IDT Energy customers in New Jersey against IDT Energy, Inc., Genie Retail Energy, Genie Energy International Corporation and Genie Energy Ltd. On June 27, 2016, defendants Genie Retail Energy, Genie Energy International Corporation and Genie Energy Ltd. filed a motion to dismiss the amended complaint. On August 26, 2016, the named plaintiff opposed that motion and IDT Energy filed a reply memorandum of law in further support of its motion to dismiss. The Court granted the motion to dismiss, but the parties agreed to set aside that decision to give the plaintiff an opportunity to submit opposition papers that had not been considered by the Court in rendering its decision. The parties participated in mediation, and subsequently entered into a Settlement Agreement (see below), which received preliminary approval from the Court on October 16, 2017. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement.

those allegations and/or wrongdoing. On July 5, 2017, the Company entered into a ~~class action Settlement Agreement with the class action plaintiffs acting individually and on behalf~~settlement of the entire class, in the lawsuits currently pending in Pennsylvania, New York, and New Jersey described above. The Company does not believe that there was any wrongdoing on its part, and is entering into this settlementall three actions to further its efforts to address its customers’ concerns. On July 31, 2018, the Magistrate Court issued a report and recommendation recommending approval of the settlement and reduction of the attorneys’ fees. On October 18, 2018, the Court entered a final order approving the Settlement Agreement.

Under the Settlement Agreement, the Company ~~has~~ agreed to pay certain amounts to resolve the lawsuits and obtain a release of claims that were, ~~asserted~~ or could behave been, asserted in the lawsuits or that are related to, or arise out of the conduct alleged in the lawsuits or similar conduct, wherever it may have occurred. The settlement payment includes payments to customers who timely ~~make~~made a claim, class counsel, and the named plaintiffs, as well as the cost of a claims administrator for administrating the claims process. The period for class members to make claims has expired, and in first quarter of 2018, based on the claims received and related administrative costs, the Company estimated ~~based in part on historical participation rates~~ that ~~its~~the total settlement payment will be approximately $9$7.6 million.

At March 31, 2019, the remaining balance of the liability related to the class-action lawsuit was $0.4 million although it is reasonably possible that the total payments could reach $10.1 million. In the nine months ended September 30, 2017, in the consolidated statement of operations, the Company recorded a revenue reduction of $3.6 million and an expense of $5.4 million that is included in ~~“Selling, general and administrative expense”, and a liability of $9.0 million that is included in “Accrued expenses”~~other current liabilities in the consolidated balance sheet. The actual amount to be paid out will depend on several factors, including the number of customers who claim settlement payments to which they are entitled. The Settlement Agreement was preliminarily approved by the Court on October 16, 2017. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement.

On June 20, 2014, the Pennsylvania Attorney General’s Office (“AG”) and the Acting Consumer Advocate (“OCA”) filed a Joint Complaint against IDT Energy, Inc. with the Pennsylvania Public Utility Commission (“PUC”). In the Joint Complaint, the AG and the OCA alleged, among other things, various violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the Telemarketing Registration Act and the PUC’s regulations. IDT Energy reached an agreement in principle on a settlement with the AG and the OCA to terminate the litigation with no admission of liability or finding of wrongdoing by IDT Energy. On August 4, 2015, IDT Energy, the AG, and the OCA filed a Joint Petition to the Pennsylvania PUC seeking approval of the settlement terms. Under the settlement, IDT Energy will issue additional refunds to its Pennsylvania customers who had variable rates for electricity supply in January, February and March of 2014. IDT Energy will also implement certain modifications to its sales, marketing and customer service processes, along with additional compliance and reporting requirements. The settlement was approved by the Pennsylvania PUC on July 8, 2016. In July 2016, IDT Energy paid the agreed-upon $2.4 million for additional customer refunds to a refund administrator.

In the fourth quarter of 2015, the Company received a request for information from the New Jersey Office of the Attorney General. The Company responded to the inquiry. The Company has recently been engaged in discussions with the New Jersey Office of the Attorney General regarding concerns raised by the New Jersey Board of Public Utilities and Division of Consumer Affairs related to energy supply charges issued to the Company’s retail customers during the first quarter of 2014 and have reached a tentative agreement in principle. In the three months ended September 30, 2017, the Company accrued $1.5 million of estimated loss related to this matter. The Company recorded a revenue reduction in the consolidated statement of operations of $1.3 million relating to refunds to customers and an expense of $0.2 million for related fees that is included in “Selling, general and administrative expense,” and a liability of $1.5 million that is included in “Accrued expenses” in the consolidated balance sheet.

From time to time, the Company receives inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and the Company responds to those inquiries or requests. The Company cannot predict whether any of those matters will lead to claims or enforcement actions.

In addition to the matters disclosed above, the Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

Agency and Regulatory Proceedings

From time to time, the Company responds to inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made.

New Jersey Attorney General and New Jersey Board of Public Utilities

On May 22, 2018, IDT Energy entered into a Consent Order with the New Jersey Attorney General and the New Jersey Board of Public Utilities to resolve an investigation related to IDT Energy’s pricing and business practices during the winter of 2014.Under the terms of the Consent Order, IDT Energy agreed to make payments totaling $1.4 million, including $1.2 million in restitution to consumers who received electricity and/or natural gas supply from IDT Energy in January, February and/or March of 2014.IDT Energy will also implement certain modifications to its sales, marketing and customer service processes, along with additional compliance and reporting requirements. In the third quarter of 2017, the Company accrued $1.5 million for this matter. IDT Energy has made full payment of the amount agreed upon in the Consent Order to a settlement administrator, who will process the restitution payments.

New York Public Service Commission ~~Orders~~Proceedings

~~On February 23, 2016,~~In December 2017, the New York Public Service Commission (“PSC”) issued an order that sought to impose significant new restrictions on REPs operating in New York, including those owned by GRE. The restrictions described in the PSC’s order, which were to become effective March 4, 2016, would have required that all REPs’ electricity and natural gas offerings to residential and small business customers include an annual guarantee of savings compared to the price charged by the relevant incumbent utility or, for electricity offerings, provide at least 30% of the supply from renewable sources. Customers not enrolled in a compliant program would be relinquished back to the local utility at the end of their contract period or, for variable price customers operating on month to month agreements, at the end of the current monthly billing cycle.

On March 4, 2016, a group of parties from the REP industry sought and won a temporary restraining order to stay implementation of the most restrictive portions of the PSC’s order pending a court hearing on those parties’ motion for a preliminary injunction. On July 25, 2016, the New York State Supreme Court, County of Albany, entered a decision and order granting the Petitioners’ petition, vacated provisions 1 through 3 of the Order, and remitted the matter to the PSC for further proceedings consistent with the Court’s order.

~~On December 2, 2016, the PSC noticed~~held an evidentiary hearing ~~scheduled to take place in November-December 2017~~ to assess the retail energy market in New York. ~~That process is underway and is expected to last for at least several more months.~~The parties recently completed post-hearing briefing in the proceedings. The Company is evaluating the potential impact of any new order from the PSC that ~~would~~may follow from the evidentiary process, while preparing ~~to operate~~various contingencies for operation in compliance with any new requirements that may be imposed. Depending on the final language of any new order, as well as the Company’s ability to modify its relationships with its New York customers, an order could have a substantial impact upon the operations of ~~GRE-owned~~GRE’s REPs in New York. As of March 31, 2019, New York represented 28.5% of GRE’s total meters served and 20.8% of the total residential customer equivalents (“RCEs”) of GRE’s customer base. For the three months ended March 31, 2019, New York gross revenues were $21.5 million.

An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.

On July 14, 2016, and September 19, 2016, the PSC issued orders restricting REPs, including those owned by GRE, from serving customers enrolled in New York’s utility low-income assistance programs. Representatives of the REP industry challenged the ruling in New York State Supreme Court, Albany County, and, on September 27, 2016, the Court issued an order temporarily restraining the PSC from implementing the July and September orders. On December 16, 2016, the PSC issued an order (the ~~“2016~~“2016 Order”) prohibiting ~~REP~~REPs to service to customers enrolled in New York’s utility low-income assistance programs. After an agreed-upon delay, on July 5, 2017, the New York State Supreme Court, Albany County, denied interested parties’ efforts to invalidate the 2016 Order, and the 2016 Order began to be implemented on July 26, 2017. Several REPs have appealed the Supreme Court’s Order to the Appellate Division, Third Department. Pending the outcomeTemporary stays of the ~~appeal, low-income customers in New York are forbidden to select a REP for either their electricity or natural gas supply.~~

A putative class action on behalf of the affected low-income assistance program participants was filed in the United States District Court for the Northern District of New York. On October 20, 2017, the plaintiffs secured a temporary stay of the 2016 ~~Order~~from the Second Circuit Court of Appeals, pending appeal of the district court’s order denying their request to enjoin the PSC from implementing its order. The motion for stay pending appeal is expected to be decided in short order by a three-judge panel.

~~Unless that temporary stay of the 2016~~ Order ~~is extended by the United States District Court,~~expired, and REPs ~~will be~~were required to return service of their ~~current~~ low-income customers to the relevant local incumbent utility on the modified schedule set forth in the ~~next several weeks.~~PSC’s 2016 Order. The ~~Company estimates that if the order is implemented~~2016 Order required GRE’s REPs to transfer customer accounts comprising approximately 18,700 meters, representing approximately 10,600 RCEs, to their respective incumbent utilities in the ~~current form, it~~three months ended March 31, 2018.

On March 27, 2018, the New York Court of Appeals granted Motions for Leave to Appeal the question of whether the New York Legislature ever imparted to the PSC the authority to regulate the rates that private, non-monopoly REPs charge their customers. On March 19, 2019, the Court of Appeals heard oral arguments regarding the decision entered by the Appellate Division, Third Department, concerning the issue of the scope of the PSC’s authority over REPs under the Public Service Law, and to pronounce New York law on that issue. On May 9, 2019, the Court of Appeals ruled that although PSC has no authority over private non-monopoly REPs, their authority to regulate and control access to public utility infrastructure allows them to impose price caps on the prices that non-monopoly REPs charge customers for natural gas and electricity.

Ohio Public Utilities Commission

In August and November of 2017, the Public Utilities Commission of Ohio (“PUCO”) commenced investigations into the marketing and enrollment practices of the Company’s subsidiary Town Square Energy. The PUCO’s investigations arose from customer complaints that representatives of Town Square allegedly engaged in misleading and deceptive sales practices in connection with Town Square’s table top marketing campaign. Town Square has and continues to cooperate fully with the PUCO’s investigation. Pending the outcome of the investigations, and in response to the PUCO’s recommendation, Town Square temporarily ceased further marketing activity in Ohio. Town Square also undertook various remedial measures which included retraining its vendors. Subsequently, on January 16, 2018, the PUCO issued its findings that Town Square was in probable non-compliance with various sections of the Ohio Administrative Code and proposed various corrective actions which included agent retraining, development of an effective quality assurance program and advising customers that they have the option to enroll with Town Square or switch their service to the regular utilities. Following the settlement discussions, Town Square and the PUCO entered into a settlement agreement which was approved by the PUCO on February 27, 2019. Under the terms of the agreement, Town Square will ~~impact~~pay a forfeiture of $0.2 million to the State of Ohio. In addition, Town Square will work with the PUCO and take steps to ensure full compliance with PUCO rules and orders, including updating customers, ~~representing approximately 4-6%~~providing the PUCO with updated information, and submitting quarterly reports for a one-year period. In connection with the foregoing, the Company has accrued $0.2 million in third quarter of 2018. If the parties are successful in reaching settlement, Town Square intends to resume marketing activity. As of March 31, 2019, Town Square in Ohio represented 0.3% of GRE’s total meters served and 0.3% of the total ~~volume~~residential customer equivalents of GRE’s customer base. For the three months ended March 31, 2019, Town Square in Ohio gross revenues was $3.4 million.

State of Connecticut Public Utilities Regulatory Authority

On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Office of Consumer Counsel has joined in the investigation. Although Town Square denies any basis for those complaints and any wrongdoing on its part, it is cooperating with the investigation and responding to subpoenas for discovery. As of March 31, 2019, Town Square’s Connecticut customer base represented 10.9% of GRE’s total meters served and 12.4% of the total residential customer equivalents of GRE’s customer base. For the three months ended March 31, 2019, Town Square’s gross revenues from sales in Connecticut was $6.4 million.As of March 31, 2019 no claims or demands have been made against Town Square by either agency, and there is insufficient basis to deem the loss probable or to the assess the amount of any possible loss.

State of Illinois Office of the Attorney General

In response to complaints that IDT Energy enrolled consumers without their express consent and misrepresented the amount of savings those consumers would receive, the Office of the Attorney General of the State of Illinois (“IL AG”) has been investigating the marketing practices of IDT Energy and has alleged violations of the Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. and the Illinois Telephone Solicitations Act, 815 ILCS 413/1 et seg.. Although IDT Energy denies any wrongdoing in connection with those allegations, the parties had previously engaged in discussions aimed at settling the matter pursuant to a proposed consent decree that would have included restitution payments in the amount of $3.0 million, temporary suspension of all marking activities directed at new customers, and implementation of various compliance and reporting procedures. Following discussions, IDT Energy signed a proposed consent decree which it rescinded very shortly thereafter when the IL AG unilaterally issued a press release which IDT Energy believes violated the spirit and substance of the consent order and discussions. At this juncture, however, the parties have been unable to resolve their dispute and on November 19, 2018, the IL AG filed a Complaint for Injunctive and Other Relief (“Complaint”) against IDT Energy in the Chancery Division of the Circuit Court of Cook County. On March 13, 2019, the IL AG filed a motion to enforce the settlement rescinded by IDT Energy. On April 5, 2019, IDT filed its objection to the IL AG’s motion, and oral argument on the IL AG's motion was heard on April 29, 2019. The Court asked for supplemental affidavits in support of the arguments.

In third quarter of 2018, the Company recorded a liability of $3.0 million recorded as a reduction of electricity revenues in the consolidated statement of operations. As of March 31, 2019, Illinois represented 16.1% of GRE’s total meters served and ~~natural gas sold by~~15.6% of the ~~REPs operated by~~total residential customer equivalents of GRE’s customer base. For the ~~Company. Additionally, this ruling will impact the Company’s ability to sign new customers~~three months ended March 31, 2019, IDT Energy’s gross revenues from sales in New York as the potential customer pool will be smaller. If challenges to the 2016 Order as currently structured are not successful, the combination of customers who have returned to the utility and the potential customer pool market in New York could have a material adverse impact on the Company’s future results.

~~Purchase Commitments~~Illinois was $0.2 million.

Other Commitments

Purchase Commitments

The Company had future purchase commitments of ~~$23.9~~$108.9 million at ~~September 30, 2017,~~March 31, 2019, of which ~~$22.2~~$91.2 million was for future ~~purchases~~purchase of electricity. The purchase commitments outstanding ~~at September 30, 2017~~as of March 31, 2019 are expected to be paid as follows: ~~$19.0 million in the twelve months ending September 30, 2018, $4.6 million in the twelve months ending September 30, 2019, and $0.3 million in the twelve months ending September 30, 2020.~~

(in thousands)
Remainder of 2019	$	60,488
2020		45,131
2021		2,708
2022		548
Thereafter		—
Total payments	$	108,875

Renewable Energy Credits

~~Renewable Energy Credits~~

GRE must obtain a certain percentage or amount of its power supply from renewable energy sources in order to meet the requirements of renewable portfolio standards in the states in which it operates. This requirement may be met by obtaining renewable energy credits that provide evidence that electricity has been generated by a qualifying renewable facility or resource. At ~~September 30, 2017,~~March 31, 2019, GRE had commitments to purchase renewable energy credits of ~~$27.1~~$17.7 million.

~~Tax Audits~~Performance Bonds

The Company is subject to audits in various jurisdictions for various taxes. The U.S. Internal Revenue Service has commenced an audit of the Afek Oil & Gas Ltd. tax return for 2014. Amounts asserted by taxing authorities or the amount ultimately assessed against the Company could be greater than accrued amounts. Accordingly, additional provisions may be recorded in the future as revised estimates are made or underlying matters are settled or resolved. Imposition of assessments as a result of tax audits could have an adverse effect on the Company’s results of operations, cash flows and financial condition.

~~Performance Bonds~~

GRE has performance bonds issued through a third party for the benefit of various states in order to comply with the states’ financial requirements for ~~REPs and for certain utility companies.~~REPs. At ~~September 30, 2017,~~March 31, 2019, GRE had aggregate performance bonds of ~~$11.6~~$13.0 million outstanding.

BP Energy Company Preferred Supplier Agreement

As of November 19, 2015, ~~IDT Energy and~~ certain of ~~its affiliates~~GRE’s REPs entered into an Amended and Restated Preferred Supplier Agreement with BP, ~~Energy Company (“BP”).~~which was amended as of June 7, 2018. The agreement’s termination date is November 30, ~~2019,~~2021, except ~~either~~any party may terminate the agreement on November 30, ~~2018~~2020 by giving the other ~~party~~parties notice by May 31, ~~2018.~~2019. Under the agreement, ~~IDT Energy purchases~~the REPs purchase electricity and natural gas at market rate plus a fee. ~~IDT Energy’s~~The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of ~~IDT Energy’s~~the REPs’ customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. In addition, ~~IDT Energy~~the REPs must pay an advance payment of ~~$2.5~~$2.0 million to BP each month that BP will apply to the next invoiced amount due to BP. ~~IDT Energy’s~~The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At ~~September 30, 2017,~~March 31, 2019, the Company was in compliance with such covenants. At ~~September 30, 2017,~~March 31, 2019, restricted cash—short-term of ~~$0.2~~$0.9 million and trade accounts receivable of ~~$26.5~~$41.4 million were pledged to BP as collateral for the payment of ~~IDT Energy’s~~ trade accounts payable to BP of ~~$8.8~~$13.6 million at ~~September 30, 2017.~~March 31, 2019.

Note ~~12—Revolving~~ 18—Lines of Credit

On April 4, 2017, GRE, IDT Energy, and other GRE subsidiaries entered into a Credit Agreement with Vantage Commodities Financial Services II, LLC ~~(“Vantage”)~~ for a $20 million revolving ~~line of credit.~~loan facility. The borrowers consist of the Company’s subsidiaries that operate REP businesses, and those subsidiaries’ obligations are guaranteed by GRE. On April 4, 2017, the borrowers borrowed $4.3 million under this facility, which included $1.7 million that was previously outstanding under a credit facility between Retail Energy Holdings, LLC (“REH”), a subsidiary of the Company that operates as Town Square Energy, and Vantage. The REH Credit Agreement with Vantage was terminated in connection with the entry into this credit agreement. The borrowers have provided as collateral a security interest in their receivables, bank accounts, customer agreements, certain other material agreements and related commercial and intangible rights. ~~Outstanding~~The outstanding principal amount incurs interest at LIBOR plus ~~4.5%~~4.5% per ~~annum.~~annum. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on the maturity date of April 3, 2020. At ~~September 30, 2017,~~March 31, 2019 and December 31, 2018, $2.5 million was outstanding under the revolving line of ~~credit~~credit. At March 31, 2019 and December 31, 2018, the effective interest rate was ~~5.82%~~7.13% and 7.24% per ~~annum.~~annum, respectively. The borrowers are required to comply with various affirmative and negative covenants, including maintaining a target tangible net worth during the term of the credit agreement. To date, the Company is in compliance with such covenants.

~~REH had~~On December 18, 2018, the Company entered into a Credit Agreement with Vantage for a revolving line of credit for up to a maximum principal amount of $7.5 million (see above). The principal outstanding incurred interest at one-month LIBOR plus 5.25% per annum, payable monthly. The outstanding principal and any accrued and unpaid interest was due on the maturity date of October 31, 2017. At December 31, 2016, $0.7 million was outstanding under the line of credit.

~~The Company and IDT Energy had a Loan~~ Agreement with JPMorgan Chase Bank (“Credit Agreement”) for a ~~revolving~~$5.0 million credit line facility (“Credit Line”) which expires on December 31, 2019. The Company will pay a commitment fee of 0.10% per annum on unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for upeach letter of credit that is issued equal to athe greater of $500 or 1.00% of the original maximum ~~principal~~available amount of ~~$25.0 million. The principal outstanding incurred interest at~~ the ~~lesser~~letter of (a) the LIBOR rate multiplied by the statutory reserve rate established by the Board of Governors of the Federal Reserve System plus 1.0% per annum, or (b) the maximum rate per annum permitted by whichever of applicable federal or Texas laws permit the higher interest rate. Interest was payable at least every three months and any outstanding principal and accrued and unpaid interest was due on the maturity date of May 31, 2017.credit. The Company agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to ~~the greater~~$5.1 million. As of ~~(a) $10.0 million or (b) the sum of the amount of letters of credit outstanding plus the outstanding principal under the revolving note. At December~~March 31, ~~2016,~~2019, there were no amounts borrowed under the line of ~~credit, and~~credit. At March 31, 2019, the cash collateral of ~~$10.0~~$5.2 million was included in ~~“Restricted~~restricted cash—~~short-term”~~short-term in the consolidated balance sheet. ~~In addition, at December 31, 2016, letters of credit of $8.1 million were outstanding. On May 31, 2017, the $10.0 million cash collateral was released upon expiration of the Loan Agreement.~~

Note ~~13—~~19—Recently Issued Accounting Standards ~~Not Yet Adopted~~

In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board jointly issued a comprehensive new revenue recognition standard that will supersede most of the current revenue recognition guidance under U.S. GAAP and International Financial Reporting Standards (“IFRS”). The goals of the revenue recognition project were to clarify and converge the revenue recognition principles under U.S. GAAP and IFRS and to develop guidance that would streamline and enhance revenue recognition requirements. The Company expects to adopt this standard on January 1, 2018. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company plans to use the modified retrospective approach for the adoption of the standard. The Company is in the process of evaluating the impact that the standard will have on its consolidated financial statements. Based on the Company’s assessment to date, the main areas of potential impact of the new standard relate to accounting for customer acquisition costs and rebate programs. At this stage of the implementation process, the Company cannot reasonably estimate the impact that the adoption of the standard will have on its consolidated financial statements.

In January 2016, the FASB issued an Accounting Standards Update (“ASU”) to provide more information about recognition, measurement, presentation and disclosure of financial instruments. The amendments in the ASU include, among other changes, the following: (1) equity investments (except those accounted for under the equity method or that result in consolidation) will be measured at fair value with changes in fair value recognized in net income, (2) a qualitative assessment each reporting period to identify impairment of equity investments without readily determinable fair values, (3) financial assets and financial liabilities will be presented separately by measurement category and form of financial asset on the balance sheet or the notes to the financial statements, and (4) an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available-for-sale in other comprehensive income. In addition, a practicability exception will be available for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. These investments may be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Entities will have to reassess at each reporting period whether an investment qualifies for this practicability exception. The Company will adopt the amendments in this ASU on January 1, 2018. The Company does not expect this ASU will have a significant impact on its consolidated financial statements.

In February 2016, the FASB issued an ASU No. 2016-02, Leases (Topic 842), related to the accounting for leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Subsequent to the issuance of ASU 2016-02, in July 2018, the FASB issued Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases ("ASU 2018-10") and Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements ("ASU 2018-11"). The ~~Company will~~amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to sixteen specific issues identified. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under the new transition method, an entity initially applies the new leases standard ~~on January 1, 2019. A modified retrospective transition approach is required~~at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for ~~lessees for capital and operating leases existing at, or entered into after,~~ the ~~beginning of the earliest~~ comparative ~~period~~periods presented in the financial statements in the period of adoption will continue to be in accordance with ASC 840, Leases ("ASC 840"). An entity that elects this additional (and optional) transition method must provide the required disclosures under ASC 840 for all periods that continue to be in accordance with ASC 840. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if certain criteria are met. The effective date and transition requirements for these two standards are the same as the effective date and transition requirements of ASU 2016-02. The standards were effective for the Company beginning after December 15, 2018.

The Company adopted Topic 842 as of January 1, 2019 using a modified retrospective transition method. The financial results reported in periods prior to January 1, 2019 are not adjusted. The Company also elected the package of practical expedients, ~~available.~~which among other things, does not require reassessment of lease classification. As most of the Company's leases do not provide an implicit rate, we used our collateralized incremental borrowing rate based on the information available at the lease implementation date in determining the present value of the lease payments. At January 1, 2019, the Company recognized $2.4 million of ROU assets related to the Company's operating leases. The ROU was included in other assets in the consolidated balance sheet. The Company ~~is evaluating~~also recognized $0.4 million and $2.0 million of current and noncurrent lease liabilities, included in other current liabilities and other liabilities in the ~~impact that the new standard will have on its~~ consolidated ~~financial statements.~~balance sheets.

In June 2016, the FASB issued an ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on January 1, 2020. The Company is evaluating the impact that the new standard will have on its consolidated financial statements.

In ~~November 2016,~~June 2018, the FASB issued an ASU ~~that includes~~No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, to simplify several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the ~~classification~~attribution of cost (that is, the period of time over which share-based payment awards vest and ~~presentation~~the pattern of ~~changes in restricted cash and cash equivalents in the statement of cash flows.~~cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in ~~this ASU require~~which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents will be includedcontract accounted for under Topic 606, Revenue from Contracts with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the statement of cash flows. The ASU will be applied using a retrospective transition method to each period presented.Customers. The Company ~~will adopt the amendments in~~adopted this ASU on January 1, 2018. The adoption will impact the Company’s beginning of the period and end of the period cash and cash equivalents balance in its statement of cash flows, as well as its net cash provided by operating activities.

In January 2017, the FASB issued an ASU to clarify 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. Under the current guidance, there are three elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments in this ASU provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. Lastly, the ASU narrows the definition of the term output.2019. The Company ~~will adopt the amendments in this ASU~~recorded additional $0.3 million to accumulated deficit on January 1, ~~2018. The adoption will impact the Company’s accounting for acquisitions and disposals of assets or businesses on a prospective basis, however there will be~~2019. There is no impact on the ~~Company’s historical~~ consolidated ~~financial statements.~~

~~In January 2017, the FASB issued an ASU that simplifies the subsequent measurement~~statements of ~~goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value~~operations and consolidated statements of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. 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. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Early adoption of this standard is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to adopt this standard for its goodwill impairment test to be performed in 2017.

In August 2017, the FASB issued an ASU intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the ASU includes certain targeted improvements to simplify the application of hedge accounting guidance in U.S. GAAP. The amendments in this ASU are effective for the Company on January 1, 2019. Early application is permitted. Entities will apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company is evaluating the impact that this ASU will have on its consolidated financial statements.flows.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, as filed with the U.S. Securities and Exchange Commission (or SEC).

As used below, unless the context otherwise requires, the terms “the Company,” “Genie,” “we,” “us,” and “our” refer to Genie Energy Ltd., a Delaware corporation, and its subsidiaries, collectively.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Overview

We ~~own 99.3% of our subsidiary, Genie Energy International Corporation, or GEIC, which owns 100%~~are comprised of Genie Retail Energy ("GRE"), Genie Retail Energy International ("GRE International"), Genie Energy Services ("GES") and Genie Oil & Gas ("GOGAS").

GRE owns and operates retail energy providers ("REPs"), including IDT Energy, Residents Energy, Town Square Energy ("TSE"), and Mirabito Natural Gas, or Mirabito. GRE's REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern United States.

Through a joint venture, GRE International has been serving customers in Great Britain and ~~92%~~acquired a license to service customers in Japan through a wholly owned subsidiary. In January 2019, the Company acquired an 80% interest in Lumo Energia Ojy ("Lumo"), a REP with approximately 32,000 residential customers in Finland.

In the first quarter of 2019, we revised our reportable segments in connection with the acquisition of an 80% interest in Lumo Energia Ojy ("Lumo"). We bifurcated GRE, creating GRE International into a separate reportable segment which will include REPs outside North America, currently includes Lumo, Genie Japan and our share of operations of Shoreditch Energy Limited ("Shoreditch").

GES oversees Diversegy, a retail energy advisory and brokerage company that serves commercial and industrial customers throughout U.S. and manages our 60% controlling interest in Prism. Prism is a solar solutions company that is engaged in U.S. based manufacturing of solar panels, solar installation design and project management.

The Company also operates (and owns 97% of the equity of) GOGAS, an oil and gas exploration company and owns a minority interest in a contracted drilling services company ("Atid 613"). GOGAS’ four exploration projects are inactive. GOGAS holds 86.1% interest in Afek Oil and Gas ~~Inc.~~("Afek"), ~~or GOGAS. Our principal businesses consist of~~an oil and gas exploration project in the ~~following:~~

GRE, which owns and operates retail energy providers, or REPs, including IDT Energy, Inc., or IDT Energy, Residents Energy, Inc., or Residents Energy, Town Square Energy, or TSE, and Mirabito Natural Gas, or Mirabito, and energy brokerage and marketing services. Its REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern United States; and

GOGAS, which is an oil and gas exploration company that consists of an 85.9% interest in Afek Oil and Gas, Ltd., or Afek, which operates an exploration project in the Golan Heights in Northern Israel, and certain inactive projects.

~~GRE has outstanding deferred stock units granted to officers and employees that represent an aggregate interest of 1.25% of the equity of GRE.~~Golan Heights in Northern Israel. Until September 2018, GOGAS also owned Atid, a drilling services company operating in Israel.

As part of our ongoing business development efforts, we continuously seek out new opportunities, which may include complementary operations or businesses that reflect horizontal or vertical expansion from our current operations. Some of these potential opportunities are considered briefly and others are examined in further depth. In particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses.

Genie Retail Energy

Seasonality and Weather

The weather and the seasons, among other things, affect GRE’s and GRE International's REPs revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effects. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately ~~43%~~50% and ~~64%~~45% of GRE’s natural gas revenues for the relevant years were generated in the first quarter of ~~2016~~2018 and ~~2015,~~2017, respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately ~~31% and 29%~~30% of GRE’s REPs’ electricity revenues for the relevant years were generated in the third quarter of ~~2016~~2018 and ~~2015,~~2017, respectively. Our revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.

~~Concentration~~Purchase of ~~Customers and Associated Credit Risk~~Receivables

~~The GRE-owned~~Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which we operate. GRE’s REPs reduce their customer credit risk by participating in ~~purchase of receivable, or~~ POR programs for a majority of their receivables. In addition to providing billing and collection services, utility companies purchase those REPs’ receivables and assume all credit risk without recourse to those REPs. ~~The GRE-owned~~GRE’s REPs’ primary credit risk is therefore nonpayment by the utility companies. ~~Certain~~

Class Action Lawsuit

On March 13, 2014, July 2, 2014 and July 15, 2014, named plaintiffs in Pennsylvania, New York and New Jersey commenced three separate putative class-action lawsuits against IDT Energy, GRE, Genie International Corporation ("GEIC"), and Genie (collectively, “IDTE”) contending, among other things, that they and other former and current customers of IDTE were injured as a result of IDTE’s allegedly unlawful sales and marketing practices. We denied any basis for those allegations and/or wrongdoing. On July 5, 2017, we entered into a settlement of all three actions to further its efforts to address its customers’ concerns. On July 31, 2018, the Magistrate Court issued a report and recommendation recommending approval of the ~~utility companies represent significant portions~~settlement and reduction of ~~our consolidated revenues and consolidated gross trade accounts receivable balance and such concentrations increase our risk associated with nonpayment by those utility companies.~~the attorneys’ fees. On October 18, 2018, the Court entered a final order approving the Settlement Agreement.

~~The following table summarizes~~Under the ~~percentage~~Settlement Agreement, we agreed to pay certain amounts to resolve the lawsuits and obtain a release of ~~consolidated revenues from customers by utility company~~claims that ~~equal~~were, or ~~exceed 10% of our consolidated revenues~~could have been, asserted in the lawsuits or that are related to, or arise out of the conduct alleged in the lawsuits or similar conduct, wherever it may have occurred. The settlement payment includes payments to customers who timely made a claim, class counsel, and the named plaintiffs, as well as the cost of a claims administrator for administrating the claims process. The period ~~(no other single utility company accounted~~ for ~~more than 10%~~class members to make claims has expired, and in first quarter of ~~consolidated revenues in these periods):~~

Nine Months Ended
September 30,
2017 2016
Con Edison 16 % 21 %
ComEd 11 % 13 %

~~The following table summarizes~~2018, based on the ~~percentage of consolidated gross trade accounts receivable by utility company~~claims received and related administrative costs, we estimated that equal or exceed 10% of consolidated gross trade accounts receivable at September 30, 2017 and December 31, 2016 (no other single utility company accounted for 10% or greater of our consolidated gross trade accounts receivable at September 30, 2017 or December 31, 2016):

September 30, 2017 December 31, 2016
Con Edison 16 % 15 %
ComEd na 10 %

~~na - less than 10% of consolidated gross trade accounts receivable~~the total settlement payment will be approximately $7.6 million.

At March 31, 2019, the remaining balance of the liability related to the class-action lawsuit was $0.4 million included in other current liabilities in the consolidated balance sheet.

New York Public Service Commission ~~Orders~~Proceedings

~~On February 23, 2016,~~In December 2017, the New York Public Service Commission ~~or PSC, issued an order that sought to impose significant new restrictions on REPs operating in New York, including those owned by GRE. Therestrictions described in the~~ PSC’s order, which were to become effective March 4, 2016, would have required that all REPs’ electricity and natural gas offerings to residential and small business customers include an annual guarantee of savings compared to the price charged by the relevant incumbent utility or, for electricity offerings, provide at least 30% of the supply from renewable sources. Customers not enrolled in a compliant program would be relinquished back to the local utility at the end of their contract period or, for variable price customers operating on month to month agreements, at the end of the current monthly billing cycle.

~~On December 2, 2016, the PSC noticed~~(“PSC”) held an evidentiary hearing ~~scheduled to take place in November-December 2017~~ to assess the retail energy market in New York. ~~That process~~The parties recently completed post-hearing briefing in the proceedings. The Company is ~~underway and is expected to last for at least several more months. We are~~ evaluating the potential impact of any new order from the PSC that ~~would~~may follow from the evidentiary process, while preparing ~~to operate~~various contingencies for operation in compliance with any new requirements that may be imposed. Depending on the final language of any new order, as well as ~~our~~the Company’s ability to modify ~~our~~its relationships with ~~our~~its New York customers, an order could have a substantial impact upon the operations of ~~GRE-owned~~GRE’s REPs in New York. As of March 31, 2019, New York represented 28.5% of GRE’s total meters served and 20.8% of the total residential customer equivalents (“RCEs”) of GRE’s customer base. For the three months ended March 31, 2019, New York gross revenues were $21.5 million.

~~On July 14, 2016, and September 19, 2016,~~An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the ~~PSC issued orders restricting REPs, including those owned by GRE, from serving customers enrolled in New York’s utility low-income assistance programs. Representatives~~consumption profile of the REP industry challenged the ruling in New York State Supreme Court, Albany County, and, on September 27, 2016, the Court issued an order temporarily restraining the PSC from implementing the July and September orders. a given retail customer base.

On December 16, 2016, the PSC issued an order ~~the 2016 Order,~~(the “2016 Order”) prohibiting ~~REP~~REPs to service to customers enrolled in New York’s utility low-income assistance programs. After an agreed-upon delay, on July 5, 2017, the New York State Supreme Court, Albany County, denied interested parties’ efforts to invalidate the 2016 Order, and the 2016 Order began to be implemented on July 26, 2017. Several REPs have appealed the Supreme Court’s Order to the Appellate Division, Third Department. Pending the outcome of the appeal, low-income customers in New York are forbidden to select a REP for either their electricity or natural gas supply.

A putative class action on behalf of the affected low-income assistance program participants was filed in the United States District Court for the Northern District of New York. On October 20, 2017, the plaintiffs secured a temporary stay of the 2016 Orderfrom the Second Circuit Court of Appeals, pending appeal of the district court’s order denying their request to enjoin the PSC from implementing its order. The motion for stay pending appeal is expected to be decided in short order by a three-judge panel.

~~Unless that temporary stay~~Temporary stays of the 2016 Order ~~is extended by the United States District Court,~~expired, and REPs ~~will be~~were required to return service of their ~~current~~ low-income customers to the relevant local incumbent utility on the modified schedule set forth in the ~~next several weeks. We estimate that if the order is implemented~~PSC’s 2016 Order. The 2016 Order required GRE’s REPs to transfer customer accounts comprising approximately 18,700 meters, representing approximately 10,600 RCEs, to their respective incumbent utilities in the ~~current form, it will impact~~three months ended March 31, 2018.

On March 27, 2018, the New York Court of Appeals granted Motions for Leave to Appeal the question of whether the New York Legislature ever imparted to the PSC the authority to regulate the rates that private, non-monopoly REPs charge their customers. On March 19, 2019, the Court of Appeals heard oral arguments regarding the decision entered by the Appellate Division, Third Department, concerning the issue of the scope of the PSC’s authority over REPs under the Public Service Law, and to pronounce New York law on that issue. On May 9, 2019, the Court of Appeals ruled that although the PSC has no direct rate making authority over private non-monopoly REPs, their authority to regulate and control access to public utility infrastructure allows them to impose price caps on the prices that non-monopoly REPs charge its customers ~~representing approximately 4-6%~~for natural gas and electricity.

Ohio Public Utilities Commission

In August and November of 2017, the Public Utilities Commission of Ohio (“PUCO”) commenced investigations into the marketing and enrollment practices of our subsidiary Town Square Energy. The PUCO’s investigations arose from customer complaints that representatives of Town Square allegedly engaged in misleading and deceptive sales practices in connection with Town Square’s table top marketing campaign. Town Square has and continues to cooperate fully with the PUCO’s investigation. Pending the outcome of the investigations, and in response to the PUCO’s recommendation, Town Square temporarily ceased further marketing activity in Ohio. Town Square also undertook various remedial measures which included retraining its vendors. Subsequently, on January 16, 2018, the PUCO issued its findings that Town Square was in probable non-compliance with various sections of the Ohio Administrative Code and proposed various corrective actions which included agent retraining, development of an effective quality assurance program and advising customers that they have the option to enroll with Town Square or switch their service to the regular utilities. Town Square has entered into settlement negotiations with the PUCO. If the parties are successful in reaching settlement, Town Square intends to resume marketing activity. In connection with the foregoing, we accrued $0.2 million. As of March 31, 2019, Town Square in Ohio represented 0.3% of GRE’s total meters served and 0.3% of the total ~~volume~~residential customer equivalents of ~~electricity~~GRE’s customer base. For the three months ended March 31, 2019, Town Square in Ohio gross revenues were $3.4 million.

State of Connecticut Public Utilities Regulatory Authority

On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and ~~natural gas sold~~deceptive sales practices on the part of Town Square. The Office of Consumer Counsel has joined in the investigation. Although Town Square denies any basis for those complaints and any wrongdoing on its part, it is cooperating with the investigation and responding to subpoenas for discovery. As of March 31, 2019, Town Square’s Connecticut customer base represented 10.9% of GRE’s total meters served and 12.4% of the total residential customer equivalents of GRE’s customer base. For the three months ended March 31, 2019, Town Square’s gross revenues from sales in Connecticut were $6.4 million. As of March 31, 2019 no claims or demands have been made against Town Square by either agency, and there is insufficient basis to deem the ~~REPs operated by us. Additionally, this ruling will impact our ability~~loss probable or to ~~sign~~the assess the amount of any possible loss.

State of Illinois Office of the Attorney General

In response to complaints that IDT Energy enrolled consumers without their express consent and misrepresented the amount of savings those consumers would receive, the Office of the Attorney General of the State of Illinois (“IL AG”) has been investigating the marketing practices of IDT Energy and has alleged violations of the Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. and the Illinois Telephone Solicitations Act, 815 ILCS 413/1 et seg.. Although IDT Energy denies any wrongdoing in connection with those allegations, the parties had previously engaged in discussions aimed at settling the matter pursuant to a proposed consent decree that would have included restitution payments in the amount of $3.0 million, temporary suspension of all marking activities directed at new customers, and implementation of various compliance and reporting procedures. Following discussions, IDT Energy signed a proposed consent decree which it rescinded very shortly thereafter when the IL AG unilaterally issued a press release which IDT Energy believes violated the spirit and substance of the consent order and discussions. At this juncture, however, the parties have been unable to resolve their dispute and on November 19, 2018, the IL AG filed a Complaint for Injunctive and Other Relief (“Complaint”) against IDT Energy in ~~New York as~~ the ~~potential customer pool will be smaller. If challenges~~Chancery Division of the Circuit Court of Cook County. On March 13, 2019, the IL AG filed a motion to enforce the settlement rescinded by IDT Energy. On April 5, 2019, IDT filed its objection to the ~~2016 Order as currently structured are not successful,~~IL AG’s motion, and oral argument was heard on April 29, 2019. The court has asked for supplemental affidavits in support of the ~~combination of customers who have returned to the utility and the potential customer pool market in New York could have a material adverse impact on our future results.~~arguments.

~~Afek Oil and Gas, Ltd.~~

In February 2015, Afek began drilling its first exploratory well. To date, Afek has completed drilling five wells in the Southern region of its license area. Based on the analysis of the first five wells and market conditions at that time, in the third quarter of ~~2016, Afek determined that it did not have~~2018, the Company recorded a ~~clear path to demonstrate probable or possible reserves~~liability of $3.0 million recorded as a reduction of electricity revenues in the ~~Southern region~~consolidated statement of ~~its license area over the next 12 to 18 months. Since there was substantial doubt regarding the economic viability~~operations. As of ~~these wells, in the third quarter~~March 31, 2019, Illinois represented 16.1% of ~~2016, Afek wrote off the $41.0 million of capitalized exploration costs incurred in the Southern region.~~

Afek has turned its operational focus to the Northern region of its license area. The data analyzed to date suggests that the Southern block resources may extend Northward at depths potentially sufficient to have induced a greater level of maturationGRE’s total meters served and 15.6% of the ~~resource. To validate this hypothesis,~~total residential customer equivalents of GRE’s customer base. For the three months ended March 31, 2019 and 2018, IDT Energy’s gross revenues from sales in 2017, Afek commenced drilling its sixth exploratory well – the first well in the Northern region of its license area. Afek expects to complete drilling of this well during the fourth quarter of 2017.Illinois was $0.2 million.

~~Afek may seek financing for the next phase of activity from a variety of sources, some of which could result in a process by which Afek would become an independent entity.~~

Afek assesses the economic and operational viability of its project on an ongoing basis. The assessment requires significant estimates and assumptions by management. Should our estimates or assumptions regarding the recoverability of its capitalized exploration costs prove to be incorrect, we may be required to record impairments of such costs in future periods and such impairments could be material.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to ~~the~~revenue recognition, allowance for doubtful accounts, goodwill, ~~oil and gas accounting~~ and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Recently Issued Accounting Standards ~~Not Yet Adopted~~

~~In May 2014, the Financial~~Information regarding new accounting pronouncements is included in Note 19—Recently Issued Accounting Standards, ~~Board, or FASB, and the International Accounting Standards Board jointly issued a comprehensive new revenue recognition standard that will supersede most of~~to the current revenue recognition guidance under U.S. GAAP and International Financial Reporting Standards, or IFRS. The goals of the revenue recognition project were to clarify and converge the revenue recognition principles under U.S. GAAP and IFRS and to develop guidance that would streamline and enhance revenue recognition requirements. We expect to adopt this standard on January 1, 2018. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. We plan to use the modified retrospective approach for the adoption of the standard. We are in the process of evaluating the impact that the standard will have on ourperiod’s consolidated financial statements. Based on our assessment to date, the main areas of potential impact of the new standard relate to accounting for customer acquisition costs and rebate programs. At this stage of the implementation process, we cannot reasonably estimate the impact that the adoption of the standard will have on our consolidated financial statements.

In January 2016, the FASB issued an Accounting Standards Update, or ASU, to provide more information about recognition, measurement, presentation and disclosure of financial instruments. The amendments in the ASU include, among other changes, the following: (1) equity investments (except those accounted for under the equity method or that result in consolidation) will be measured at fair value with changes in fair value recognized in net income, (2) a qualitative assessment each reporting period to identify impairment of equity investments without readily determinable fair values, (3) financial assets and financial liabilities will be presented separately by measurement category and form of financial asset on the balance sheet or the notes to the financial statements, and (4) an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified as available-for-sale in other comprehensive income. In addition, a practicability exception will be available for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. These investments may be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Entities will have to reassess at each reporting period whether an investment qualifies for this practicability exception. We will adopt the amendments in this ASU on January 1, 2018. We do not expect this ASU will have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued an ASU related to the accounting for leases. The new standard establishes a right-of-use, or ROU, model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. We will adopt the new standard on January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are evaluating the impact that the new standard will have on our consolidated financial statements.

In June 2016, the FASB issued an ASU that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. We will adopt the new standard on January 1, 2020. We are evaluating the impact that the new standard will have on our consolidated financial statements.

In November 2016, the FASB issued an ASU that includes specific guidance on the classification and presentation of changes in restricted cash and cash equivalents in the statement of cash flows. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the statement of cash flows. The ASU will be applied using a retrospective transition method to each period presented. We will adopt the amendments in this ASU on January 1, 2018. The adoption will impact our beginning of the period and end of the period cash and cash equivalents balance in our statement of cash flows, as well as our net cash provided by operating activities.

In January 2017, the FASB issued an ASU to clarify 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. Under the current guidance, there are three elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments in this ASU provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this ASU (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. Lastly, the ASU narrows the definition of the term output. We will adopt the amendments in this ASU on January 1, 2018. The adoption will impact our accounting for acquisitions and disposals of assets or businesses on a prospective basis, however there will be no impact on our historical consolidated financial statements.

In January 2017, the FASB issued an ASU that simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. 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. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Early adoption of this standard is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We intend to adopt this standard for the goodwill impairment test to be performed in 2017.

In August 2017, the FASB issued an ASU intended to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the ASU includes certain targeted improvements to simplify the application of hedge accounting guidance in U.S. GAAP. The amendments in this ASU are effective for us on January 1, 2019. Early application is permitted. Entities will apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. We are evaluating the impact that this ASU will have on our consolidated financial statements.

Results of Operations

We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2019 Compared to Three ~~and Nine~~ Months Ended ~~September 30, 2016~~March 31, 2018

Genie Retail Energy Segment

	Three months ended September 30,				Change						Nine months ended September 30,				Change							Three Months Ended March 31,				Change
	2017		2016		$			%			2017		2016		$			%				2019		2018		$			%
	(in millions)																				(in thousands)
Revenues:
Electricity	$	66.2	$	55.0	$	11.2			20.2	%	$	163.6	$	138.5	$	25.1			18.2	%		$	57,811	$	65,338	$	(7,527	)		(11.5	)%
Natural gas		2.8		1.8		1.0			57.8			26.0		20.9		5.1			24.5				18,706		23,428		(4,722	)		(20.2	)
Other		0.5		0.3		0.2			50.8			1.5		1.2		0.3			21.9
Total revenues		69.5		57.1		12.4			21.6			191.1		160.6		30.5			19.0				76,517		88,766		(12,249	)		(13.7	)
Cost of revenues		47.7		36.9		10.8			29.1			132.3		98.2		34.1			34.8				51,839		64,589		(12,750	)		(19.7	)
Gross profit		21.8		20.2		1.6			7.8			58.8		62.4		(3.6	)		(5.8	)			24,678		24,177		501			3.1
Selling, general and administrative expenses		16.8		12.3		4.5			36.8			54.2		38.6		15.6			40.5
Equity in net loss of joint venture		0.2		—		0.2			nm			0.2		—		0.2			nm
Operating expenses																							11,175		13,138		(1,963	)		(15.0	)
Income from operations	$	4.8	$	7.9	$	(3.1	)		(39.5	)%	$	4.4	$	23.8	$	(19.4	)		(81.7	)%		$	13,503	$	11,039	$	2,464			92.9	%

~~nm—not meaningful~~

On August 10, 2017, GRE acquired Mirabito Natural Gas, a Ft. Lauderdale, Florida-based natural gas supplier that serves commercial and government customers throughout Florida. Mirabito’s operating results from the date of acquisition, which were not significant, are included in our results of operations.

~~On November 2, 2016, GRE acquired Retail Energy Holdings, LLC, or REH, a privately held owner of REPs that operates as Town Square Energy in eight states. REH’s licenses and customer base expanded~~Revenues. GRE’s geographic footprint to four new states — New Hampshire, Rhode Island, Massachusetts and Connecticut — and provided additional electricity customers in New Jersey, Maryland, Ohio and Pennsylvania.

On July 5, 2017, we entered into a class action Settlement Agreement with the class action plaintiffs acting individually and on behalf of the entire class, in the lawsuits currently pending in New York, Pennsylvania and New Jersey (see “~~Legal Proceedings~~” in Note 11 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q). We estimated, based in part on historical participation rates that our total settlement payment will be approximately $9 million, although it is reasonably possible that the total payments could reach $10.1 million. The actual amount to be paid out will depend on several factors, including the number of customers who claim settlement payments to which they are entitled. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement. In the nine months ended September 30, 2017, we recorded a revenue reduction of $3.6 million for estimated payments to customers, of which $3.1 million reduced electricity revenues ~~and $0.5 million reduced natural gas revenues, and an expense of $5.4 million that is included~~decreased in ~~“Selling, general and administrative expense.”~~

We have recently been engaged in discussions with the New Jersey Office of the Attorney General regarding concerns raised by the New Jersey Board of Public Utilities and Division of Consumer Affairs related to energy supply charges issued to our retail customers during the first quarter of 2014 (see “~~Legal Proceedings~~~~” in Note 11 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q) and have reached a tentative agreement in principle. In~~ the three months ended September 30, 2017, we accrued $1.5 million of estimated loss related to this matter. We recorded a revenue reduction of $1.3 million relating to refunds to customers, of which half reduced electricity revenues and half reduced natural gas revenues, and an expense of $0.2 million for related fees that is included in “Selling, general and administrative expense.”

~~Revenues~~~~. GRE’s electricity revenues increased in the three and nine months ended September 30, 2017~~March 31, 2019 compared to the same ~~periods~~period in 2016 because of the acquisition of REH in November 2016, which added an average of approximately 75,300 and 61,500 electricity-only customers in the three and nine months ended September 30, 2017, respectively, and $14.1 million and $35.3 million in electricity revenues in the three and nine months ended September 30, 2017, respectively. Electricity consumption by GRE’s REP customers, including by TSE’s electricity customers, increased 13.4% and 20.9% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016.2018. The increase in electricity consumption reflected the increases in average meters served, which increased 28.3% and 23.6% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016, although average consumption per meter decreased 11.6% and 2.1% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016. The increasedecrease in electricity revenues in the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016~~2018 was ~~also due to an increase~~the result of decrease in ~~the~~meters served and decrease in average ~~rate charged to customers, which increased 6.0%~~consumption per meter. Average meters served by GRE REPs decreased by 11.7% in ~~the~~ three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016.~~2018. The ~~increase in electricity revenues~~average consumption per meter by GRE's REPs decrease by 3.2% in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016~~2018. The decrease was partially offset by ~~a reduction of $3.1 million for estimated payments to customers as a result of~~ the ~~settlement of the class action lawsuits described above. The~~increase in average rate ~~charged to customers decreased 2.3%~~per kilowatt hour sold by 3.6% in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in ~~2016, mostly due to the this revenue reduction.~~2018.

~~GRE's~~GRE’s natural gas revenues ~~increased~~decreased in the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 compared to the same ~~periods~~period in ~~2016 because of an increase in the average rate charged to customers. In addition, the Mirabito acquisition in August 2017 added $0.7 million~~2018. The decrease in natural gas revenues in the three and nine months ended September 30, 2017, which was offset by the reduction of $0.7 million in the three and nine months ended September 30, 2017 for the pending regulatory matter in New Jersey described above. The average rate charged to customers increased 35.6% and 32.6% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016 reflecting an increase in the underlying commodity cost. In addition, in the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016, natural gas consumption~~2018 was the result of decrease in meters served partially offset by ~~customers of GRE’s REPs, including by Mirabito’s natural gas customers, increased 16.4% and~~increase in average consumption per meter ~~increased 16.8%, although~~and average rate per therm sold. Average meters served by GRE REPs decreased ~~0.4%. In the nine~~by 29.6% in three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in 2016, the increase in GRE's natural gas revenues was partially offset by a reduction of $0.5 million for estimated payments to customers as a result of the settlement of the class action lawsuits described above, and by a 6.1% decrease in natural gas consumption, including by Mirabito’s natural gas customers. 2018. The ~~decrease in natural gas consumption reflected the 2.2% decrease in natural gas meters served~~average rate per therm sold increased 4.2% in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in ~~2016, and lower average~~2018 Natural gas consumption per meter ~~which decreased 4.0%~~by GRE’s REPs' customers increased by 8.9% in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in ~~2016.~~2018. Average meters served decreased 24.7% in the three months ended March 31, 2019 compared to the same period in 2018.

The customer base for ~~the GRE-owned~~GRE’s REPs as measured by meters served consisted of the following:

September 30,
2017

June 30,
2017

March 31,
2017

December 31,
2016

September 30,
2016

(in thousands)
Meters at end of quarter:
Electricity customers 330 317 307 296 263
Natural gas customers 116 113 111 116 120
Total meters 446 430 418 412 383

	March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018
	(in thousands)
Meters at end of quarter:
Electricity customers		277		245		269		282		284
Natural gas customers		67		70		73		81		89
Total meters		344		315		342		363		373

The total meters at September 30, 2017 and December 31, 2016 included TSE’s respective approximate 78,500 and 44,500 electric-only meters, and Mirabito’s approximately 900 natural gas-only meters at September 30, 2017. Gross meter acquisitions in three months ended March 31, 2019, were 85,000 compared to 55,000 in 2018. Gross meter acquisitions for the three months ended ~~September 30, 2017 and 2016 were 111,300 (including TSE’s and Mirabito’s gross meter acquisitions) and 58,000, respectively. Gross meter acquisitions~~March 31, 2019 includes the impact of a municipal aggregation deal in New Jersey which added approximately 35,000 meters. After the nine months ended September 30, 2017 and 2016 were 293,100 (including TSE’s and Mirabito’s gross meter acquisitions) and 181,000, respectively. In response to the New York PSC developments discussed above,first quarter of 2018, we focused our meter acquisition efforts outside of New York State while simultaneously taking steps to reduce the prospective and contingent ~~impact~~impacts of the ~~New York~~ PSC’s orders on our New York operations. Meters served increased by ~~16,000~~29,000 or ~~3.7% at September 30, 2017 from June 30, 2017 compared to a decrease of 7,000 or 1.6% at September 30, 2016 from June 30, 2016, and increased by 34,000 or 8.1% at September 30, 2017~~9.2% from December 31, ~~2016 compared~~2018 to March 31, 2019, primarily as a ~~decrease~~result of ~~9,000 or 2.3% at September 30, 2016 from December 31, 2015. Average monthly churn increased to 6.9%~~aggregation agreements signed in ~~the~~first quarter of 2019. In three months ended ~~September 30, 2017 from 6.0%~~March 31, 2019, average monthly churn decreased to 5.3% compared to 7.6% for same period in the three months ended September 30, 2016, and increased to 6.4% in the nine months ended September 30, 2017 from 5.9% in the nine months ended September 30, 2016. Note that in 2017, GRE modified its method of calculating churn and the figures for all periods presented reflect the revised methodology.2018.

GRE-owned REPs began operations in Ohio in the second quarter of 2016, and we have applications pending to enter into additional utility service areas, primarily electric and dual meter territories in the states where we currently operate. We continue to evaluate additional, deregulation-driven opportunities in order to expand our business geographically.

The average rates of annualized energy consumption, as measured by ~~residential customer equivalents, or~~ RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.

	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018		March 31, 2018
	(in thousands)										(in thousands)
RCEs at end of quarter:
Electricity customers		243		219		220		218		174		243		195		216		219		218
Natural gas customers		82		70		67		65		67		57		58		59		64		67
Total RCEs		325		289		287		283		241		300		253		275		283		285

Total RCEs at September 30, 2017 and December 31, 2016 included TSE’s approximately 69,200 and 50,600 electric-only RCEs, respectively, and Mirabito’s approximately 12,800 natural gas-only RCEs at September 30, 2017. Exclusive of the impact of the TSE and Mirabito acquisitions on RCEs and meters, RCEs increased 5.3% at ~~September 30, 2017~~March 31, 2019 compared to ~~September 30, 2016~~March 31, 2018 primarily due to ~~an increase~~the acquisition of higher consumption meters in ~~natural gas RCEs.~~recent quarters.

~~Other revenue in the three and nine months ended September 30, 2017 and 2016 included commissions, entry fees and other fees from our energy brokerage and marketing services businesses.~~

Cost of Revenues and Gross Margin Percentage. GRE’s cost of revenues and gross margin percentage were as follows:

Three months ended
September 30,
Change
Nine months ended
September 30,
Change
2017 2016 $ % 2017 2016 $ %
(in millions)
Cost of revenues:
Electricity $ 45.2 $ 35.0 $ 10.2 29.2 % $ 112.7 $ 83.1 $ 29.6 35.7 %
Natural gas 2.3 1.8 0.5 24.7 19.0 14.7 4.3 29.4
Other 0.2 0.1 0.1 79.1 0.6 0.4 0.2 41.8
Total cost of revenues $ 47.7 $ 36.9 $ 10.8 29.1 % $ 132.3 $ 98.2 $ 34.1 34.8 %

Three months ended
September 30,

Nine months ended
September 30,

2017 2016 Change 2017 2016 Change
Gross margin percentage:
Electricity 31.6 % 36.4 % (4.8 )% 31.1 % 40.0 % (8.9 )%
Natural gas 18.8 (2.7 ) 21.5 27.1 29.8 (2.7 )
Other 62.9 68.7 (5.8 ) 57.1 63.1 (6.0 )
Total gross margin percentage 31.3 % 35.4 % (4.1 )% 30.7 % 38.8 % (8.1 )%

	Three Months Ended March 31,				Change
	2019		2018		$			%
	(in thousands)
Cost of revenues:
Electricity	$	40,600	$	46,975	$	(6,375	)		(13.6	)%
Natural gas		11,239		17,614		(6,375	)		(36.2	)
Total cost of revenues	$	51,839	$	64,589	$	(12,750	)		(19.7	)%

	Three Months Ended March 31,
	2019			2018			Change
Gross margin percentage:
Electricity		29.8	%		28.1	%		1.7	%
Natural gas		39.9			24.8			15.1
Total gross margin percentage		32.3	%		27.2	%		5.1

Cost of revenues for electricity ~~increased~~decreased in the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 compared to the same ~~periods~~period in ~~2016~~2018 primarily because of decrease in the ~~acquisition of REH~~average meters served and decrease in ~~November 2016, which added $12.4 million~~the electricity consumption by GRE’s REPs’ customers. Average meters served and ~~$30.3 million in cost of revenues for~~ electricity consumption by GRE’s REPs’ customers decreased by 11.7% and 14.5%, respectively, in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. Electricity consumption by GRE’s REP customers in the three and nine months ended September 30, 2017~~March 31, 2019, compared to the same ~~periods~~period in ~~2016 increased 13.4% and 20.9%, respectively, including consumption from TSE’s electricity customers.~~2018. The average unit cost of electricity ~~increased 13.9% and 12.2% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016. Gross margin on electricity sales decreased~~was relatively flat in the three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in ~~2016 because the average unit cost of electricity increased more than the average rate charged to customers.~~2018. Gross margin on electricity sales decreased in the nine months ended September 30, 2017 compared to the same period in 2016 because the average rate charged to customers decreased and the average unit cost of electricity increased.

Cost of revenues for natural gas increased in the three and nine months ended September 30, 2017 compared to the same periods in 2016 primarily because the average unit cost of natural gas increased, and because the Mirabito acquisition in August 2017 added $0.3 million in cost of revenues for natural gas in the three and nine months ended September 30, 2017. The average unit cost of natural gas increased 7.1% and 37.8% in the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016. Natural gas consumption by GRE’s REP customers increased 16.4% in the three months ended September 30, 2017 compared to the same period in 2016, and decreased 6.1% in the nine months ended September 30, 2017 compared to the same period in 2016. Gross margin on natural gas sales increased in the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016~~2018 because the average rate charged to customers increased more than the average unit cost of electricity.

Cost of revenues for natural gas decreased in the three months ended March 31, 2019 compared to the same period in 2018 primarily because of decrease in the average meters served, decrease in the natural gas consumption GRE's REPs' customers and decrease in average unit cost of natural gas. Average meters served and natural gas consumption by GRE’s REPs’ customers decreased by 29.6% and 23.4%, respectively, in the three months ended March 31, 2019 compared to the same period in 2018. The average unit cost of natural gas decreased by 18.9% in the three months ended March 31, 2019, compared to the same period in 2018. Gross margin on natural gas sales ~~decreased~~increased 15.1% in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in ~~2016~~2018 because the increase in the average rate charged to customers offset the decrease in the average unit cost of natural ~~gas increased more than the average rate charged to customers.~~gas.

~~Other cost of revenues primarily includes commission expense incurred by our energy brokerage and marketing services businesses.~~

Selling, General and Administrative. The ~~increase~~decrease in selling, general and administrative expense in the three ~~and nine~~ months ended September 30, 2017 compared to the same periods in 2016 was due to an increase in customer acquisition costs, which was reflected in the increase in gross meter acquisitions, and an increase in amortization expense from the amortization of the intangible assets acquired in the REH acquisition, as well as increases in payroll expense and consulting and professional fees. In addition, the increase in selling, general and administrative expense in the nine months ended September 30, 2017March 31, 2019 compared to the same period in ~~2016~~2018 was primarily due to a decrease in customer acquisition costs as a result of favorable change in mix of customer acquisition channels to lower cost sales channels. Commission expenses decreased $1.1 million in the ~~accrual of $5.4 million for~~three months ended March 31, 2019,compared to the ~~settlement of various class action lawsuits described above.~~same period in 2018. As a percentage of GRE’s total revenues, selling, general and administrative expense ~~increased~~slightly decreased from ~~21.5%~~14.8% in the three months ended ~~September 30, 2016~~March 31, 2018 to ~~24.3%~~14.6% in the three months ended ~~September 30, 2017, and increased from 24.0%~~March 31, 2019.

GRE International Segment

	Three Months Ended March 31,						Change
	2019			2018			$			%
	(in thousands)
Revenue	$	4,843		$	—		$	4,843			nm	%
Cost of revenue		4,861			—			4,861			nm
Gross loss		(18	)		—			(18	)		nm
Selling, general and administrative expenses		1,726			91			1,635			nm
Loss from operations	$	(1,744	)	$	(91	)	$	(1,653	)		nm
Equity in net loss of joint venture	$	(1,070	)	$	(506	)	$	(564	)		111.5

nm—not meaningful

GRE International, hold our stakes in REPs outside North America These businesses currently include our stake in Shoreditch, which operates Orbit Energy in the ~~nine~~U.K., Genie Japan, and Lumo, which operates in Finland. We account for our investments in Shoreditch under the equity method of accounting. Under this method we record our share in the net income or loss of Shoreditch. Therefore, revenue generated, and expenses incurred are not reflected in our consolidated revenue and expenses.

Meters served by GRE International's REPs increased to 55,000 at March 31, 2019 from 8,000 at December 2018 primarily as a result of acquisition of Lumo in January 2019.

RCEs at March 31, 2019 increased to 33,000 primarily from the acquisition of Lumo.

Revenue and Cost of Revenue. GRE International revenues and cost of revenue in the three months ended ~~September 30, 2016~~March 31, 2019 pertains to ~~28.4% in the nine months ended September 30, 2017.~~operations of Lumo.

Equity in net loss of joint venture.On July 17, 2017, our subsidiary, Genie Energy UK Ltd., or GEUK, entered into a definitive agreement with Energy Global Investments Pty Ltd, or EGC, to launch Shoreditch Energy Limited, or Shoreditch, a joint venture that intends to offer electricity and natural gas service to residential and small business customers in the United Kingdom. GEUK accounts for its ownership interest in Shoreditch using the equity method since GEUK has the ability to exercise significant influence over its operating and financial matters, although it does not control Shoreditch. In December 2017, Shoreditch commenced initial customer acquisition in the United Kingdom under the mandated three-month Controlled Market Entry framework in which new entrants can acquire a limited number of customers in a test environment. The controlled market entry was successfully completed and Shoreditch’s customer acquisition program has commenced. The Company's share in Shoreditch’s net loss ~~from its inception~~for the three months ended March 31, 2019 was $1.1 million compared to ~~September 30, 2017 was $0.2 million.~~$0.5 million for the same period in 2018. The increase is mainly a result of increase in level of activity of Shoreditch.

GES Segment

~~Afek Segment~~

	Three Months Ended March 31,						Change
	2018			2017			$			%
	(in thousands)
Revenue	$	5,257		$	502		$	4,755			947.2	%
Cost of revenue		4,326			221			4,105			1,857.5
Gross profit		931			281			650			231.3
Selling, general and administrative expenses		1,162			373			789			211.4
Loss from operations	$	(231	)	$	(92	)	$	(139	)		92.9

~~Afek does not currently generate any~~Revenue. GES' revenues ~~nor does it incur any cost~~increased in the three months ended March 31, 2019 compared to the same period in 2018. The increase in revenue was the result of ~~revenues.~~our acquisition of a controlling interest in Prism in October 2018. Revenue from Prism in the three months ended March 31, 2019 was $4.7 million. Revenue from Diversegy includes commissions, entry fees and other fees from our energy brokerage and marketing services businesses.

Three months ended
September 30,
Change
Nine months ended
September 30,
Change
2017 2016 $ % 2017 2016 $ %
(in millions)
General and administrative $ 0.2 $ 0.3 $ (0.1 ) (14.4 )% $ 1.0 $ 0.8 $ 0.2 32.1 %
Exploration 0.8 1.3 (0.5 ) (43.0 ) 2.6 4.4 (1.8 ) (42.4 )
Write-off of capitalized exploration costs — 41.0 (41.0 ) (100.0 ) — 41.0 (41.0 ) (100.0 )
Loss from operations $ 1.0 $ 42.6 $ (41.6 ) (97.6 )% $ 3.6 $ 46.2 $ (42.6 ) (92.2 )%

Cost of Revenue. Cost of revenues increased in the three months ended March 31, 2019 compared to the same period in 2018 primarily as a result of our acquisition of a controlling interest in Prism in October 2018. Cost of Revenue from Prism in the three months ended March 31, 2019 was $3.9 million. Cost of revenue related to Diversegy commission expense incurred by our energy brokerage and marketing services businesses.

General and Administrative. General and administrative expenses increased the three months ended March 31, 2019 compared to the same period in 2018 primarily because of acquisition of Prism offset by decrease in operating expenses of Diversegy.

Genie Oil and Gas Segment

	Three Months Ended March 31,				Change
	2019		2018		$			%
	(in thousands)
Revenue	$	—	$	—	$	—			nm

General and administrative		163		1,134	$	(971	)		(85.6)
Exploration		—		227		(227	)		(100.0)
Loss from operations	$	163	$	1,361	$	(1,198	)		(88.0)	%
Equity in net income of Atid 613	$	273		—		273			nm

nm—not meaningful

General and Administrative. General and administrative expense decreased in the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016 primarily due to a~~2018 because of decrease in payroll ~~expense. General~~ and ~~administrative~~related expenses and depreciation expense, ~~increased~~primarily due divestiture of Atid in third quarter of 2018.

Exploration. Exploration expense in the ~~nine months ended September 30, 2017 compared to the same period in 2016~~three March 31, 2019 was primarily ~~because of a reduction~~incurred in the ~~amount~~wrap-up of ~~costs classified as exploration expense~~the suspended drilling operations. Subsequent analysis indicates that a zone within the well contains evidence of hydrocarbons at levels sufficient to warrant additional testing. Accordingly, Afek requested and ~~capitalized exploration costs.~~

~~Exploration.~~ ~~In February 2015, Afek began drilling~~received a renewal of its ~~first~~ exploratory ~~well in~~license from the Ministry of Energy for the Northern ~~Israel’s Golan Heights. To date, Afek has completed drilling five wells in the Southern region~~portion of its former license area. Afek ~~has turned its operational focus to the Northern region of its license area. In 2017, Afek commenced drilling its sixth exploratory well – the first well~~is in the ~~Northern region~~process of ~~its license area. In late May 2017, drilling operations at the sixth well were suspended following an accident at the site. Following investigations, equipment repairs and testing of~~securing the equipment onneeded to perform the ~~site, Afek was authorized to resume operations and drilling. Afek has resumed drilling and expects to complete drilling of the well during the fourth quarter of 2017.~~testing.

~~Write-Off of Capitalized Exploration Costs.~~ Afek assesses the economic and operational viability of its project on an ongoing basis. The assessment requires significant estimates and assumptions by management. Based on the analysis of the first five wells and market conditions at that time, in the third quarter of 2016, Afek determined that it did not have a clear path to demonstrate probable or possible reserves in the Southern region of its license area over the next 12 to 18 months. Since there was substantial doubt regarding the economic viability of these wells, in the third quarter of 2016, Afek wrote off the $41.0 million of capitalized exploration costs incurred in the Southern region.

~~Genie Oil and Gas Segment~~

Genie Oil and Gas does not currently generate any revenues, nor does it incur any cost of revenues. As a result of Total S.A.’s withdrawal from AMSO, LLC, beginning on April 30, 2016, AMSO, LLC’s assets, liabilities, results of operations and cash flows are included in our consolidated financial statements.

Three months ended
September 30,
Change
Nine months ended
September 30,
Change
2017 2016 $ % 2017 2016 $ %
(in millions)
General and administrative $ (0.2 ) $ (0.1 ) $ (0.1 ) (7.3 )% $ (0.3 ) $ (0.7 ) $ 0.4 42.5 %
Research and development — — — — — (0.2 ) 0.2 100.0
Gain on consolidation of AMSO, LLC — — — — — 1.3 (1.3 ) (100.0 )
Equity in net loss of AMSO, LLC — — — — — (0.2 ) 0.2 100.0
(Loss) income from operations $ (0.2 ) $ (0.1 ) $ (0.1 ) (7.3 )% $ (0.3 ) $ 0.2 $ (0.5 ) (258.5 )%

~~General and Administrative~~. General and administrative expense increased in the three months ended September 30, 2017 compared to the same period in 2016 primarily due to an increase in stock-based compensation. General and administrative expense decreased in the nine months ended September 30, 2017 compared to the same period in 2016 primarily because of decreases in payroll and severance expense.

~~Research and Development.~~ Research and development expense in the nine months ended September 30, 2016 related to American Shale Oil, LLC, or AMSO, LLC, and Genie Mongolia. AMSO, LLC was our oil shale development project in Colorado. At December 31, 2016, the AMSO, LLC project was substantially decommissioned. Genie Mongolia had a joint geological survey agreement with the Republic of Mongolia to explore certain of that country’s oil shale deposits. In 2016, we suspended our operations in Mongolia.

~~Gain on Consolidation of AMSO, LLC.~~On March 23, 2016, TOTAL S.A., or Total, gave our subsidiary, American Shale Oil Corporation, or AMSO, its notice of withdrawal from AMSO, LLC, which was effective on April 30, 2016. We accounted for our acquisition on April 30, 2016 of Total’s ownership interest in AMSO, LLC as a business combination. We recognized a gain from the acquisition of Total’s interest in AMSO, LLC because we acquired the net assets of AMSO, LLC while no consideration was transferred by us, due to our assumption of the risk associated with the shutdown obligations. The gain also included our gain on the remeasurement of AMSO’s investment in AMSO, LLC at its acquisition date fair value. The aggregate gain recognized was $1.3 million.

~~Equity in the Net Loss of AMSO, LLC~~. In part because of AMSO’s decisions not to fund all of its share of AMSO, LLC’s expenditures in 2014 and 2015, AMSO, LLC allocated its net loss mostly to Total in 2015 and from January 1, 2016 until April 30, 2016, the effective date of Total’s withdrawal from AMSO, LLC. Beginning on April 30, 2016, AMSO, LLC’s results of operations were included in our consolidated financial statements.

Corporate

Corporate does not generate any revenues, nor does it incur any cost of revenues. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expense and other corporate-related general and administrative expense.

Three months ended
September 30,
Change
Nine months ended
September 30,
Change
2017 2016 $ % 2017 2016 $ %
(in millions)
General and administrative expenses and loss from operations $ 2.2 $ 2.2 $ — (0.9 )% $ 7.4 $ 6.9 $ 0.5 7.2 %

	Three Months Ended March 31,				Change
	2019		2018		$			%
	(in thousands)
General and administrative and loss from operations	$	1,531	$	2,361	$	(830	)		(1.4	)%

Corporate general and administrative ~~expense was substantially unchanged~~decreased in the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period in ~~2016~~2018 primarily because ~~an increase~~of decreases in stock-based compensation ~~was offset by a decrease in payroll~~ expense. Corporate general and administrative expense increased in the nine months ended September 30, 2017 compared to the same period in 2016 primarily due to severance expense that we accrued in 2017 for our former President. As a percentage of our consolidated revenues, Corporate general and administrative expense decreased from ~~3.8%~~2.6% in the three months ended March 31, 2018 to 1.8% in the three months ended ~~September 30, 2016 to 3.1% in the three months ended September 30, 2017, and decreased from 4.3% in the nine months ended September 30, 2016 to 3.8% in the nine months ended September 30, 2017.~~March 31, 2019.

Consolidated

Selling, General and Administrative. Pursuant to an agreement between us and IDT Corporation, or IDT, our former parent company, IDT charges us for services it provides, and we charge IDT for services that we provide to certain of IDT’s subsidiaries. The amounts that IDT charged us, net of the amounts that we charged IDT, was $0.2 million and $0.3 million in the three months ended September 30, 2017 and 2016, respectively, and $0.9 million in both the nine months ended September 30, 2017 and 2016, which were included in consolidated selling, general and administrative expense.

Stock-based compensation expense included in consolidated selling, general and administrative expense was ~~$1.4~~$0.4 million and ~~$1.2~~$1.3 million in the three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016, respectively, and $3.8 million and $3.5 million in the nine months ended September 30, 2017 and 2016,~~2018, respectively. At ~~September 30, 2017,~~March 31, 2019, aggregate unrecognized compensation cost related to non-vested stock-based compensation was ~~$5.1~~$2.8 million. The unrecognized compensation cost is recognized over the expected service period.

The following is a discussion of our consolidated income and expense line items below income from operations:

Three months ended
September 30,
Change
Nine months ended
September 30,
Change
2017 2016 $ % 2017 2016 $ %
(in millions)
Income (loss) from operations $ 1.4 $ (37.1 ) $ 38.5 103.8 % $ (7.0 ) $ (29.2 ) $ 22.2 76.1 %
Interest income 0.1 0.1 — (27.1 ) 0.2 0.3 (0.1 ) (19.5 )
Other (expense) income, net (0.1 ) 0.3 (0.4 ) (117.4 ) (0.6 ) 0.2 (0.8 ) (462.6 )
Provision for income taxes (0.4 ) (0.5 ) 0.1 (11.4 ) (0.4 ) (2.2 ) 1.8 79.1
Net income (loss) 1.0 (37.2 ) 38.2 102.6 (7.8 ) (30.9 ) 23.1 74.7
Net (income) loss attributable to noncontrolling interests (0.2 ) 5.1 (5.3 ) (103.9 ) 0.6 7.2 (6.6 ) (91.3 )
Net income (loss) attributable to Genie $ 0.8 $ (32.1 ) $ 32.9 102.4 % $ (7.2 ) $ (23.7 ) $ 16.5 69.6 %

	Three Months Ended March 31,						Change
	2019			2018			$			%
	(in thousands)
Income from operations	$	9,834		$	7,133		$	2,701			37.9	%
Interest income		93			81			12			14.8
Interest expense		(140	)		(92	)		(48	)		52.2
Equity in net loss in equity method investees, net		(797	)		(506	)		(291	)		57.5
Other income, net		73			42			31			73.8
Provision for income taxes		(2,903	)		(799	)		(2,104	)		263.3
Net income		6,160			5,859			301			481.1
(Net income) loss attributable to noncontrolling interests		(91	)		295			(386	)		(130.8	)
Net income attributable to Genie	$	6,069		$	6,154		$	(85	)		(1.4	)%

nm—not meaningful

Other ~~(Expense) Income,~~income, net. Other ~~(expense) income,~~expense, net ~~included foreign currency translation gains of $47,000 and $0.1 million~~ in the three months ended ~~September 30, 2017 and 2016, respectively, and~~March 31, 2019 consisted primarily foreign currency transaction gains.

Equity in Net loss ~~of $0.4 million and a gain of $25,000~~in Equity Method Investees, Net. Equity in net loss in equity method investees relates to our share in the ~~nine~~operations of Shoreditch, as discussed above, and Atid 613.

(Provision for) Benefit from Income Taxes.The consolidated effective tax rate for three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018 was 32.0% and 12.0%, respectively. ~~In addition, other (expense) income, net~~The increase in effective tax rate results from the release of the valuation allowance on the deferred tax assets in fourth quarter of 2018. For the three ~~and nine~~ months ended September 30, 2017 included interest expense of $0.1 million and $0.2 million, respectively, from borrowings under the Vantage Commodities Financial Services II, LLC, or Vantage, revolving line of credit. Other (expense) income, net in the three and nine months ended September 30, 2016 also included a gain of $0.2 million from the repayment of the Maple Bank GmbH revolving credit loan payable.

~~Provision for Income Taxes~~~~. The change in~~March 31, 2018, the provision for income tax relates to recorded state income taxes on its GRE segment while the federal tax was offset by the existing valuation allowance. For the three months ended March 31, 2019, provision for income taxes relates to both federal as well as state income taxes. Federal tax expense reduces the deferred tax assets that are fully recognized in the three and nine months ended September 30, 2017 compared to the same periods in 2016 was primarily due to the change in income tax expense in GRE. GRE includes IDT Energy, certain limited liability companies and our consolidated variable interest entity. For purposes of computing Federal income taxes, we consolidate the GOGAS and Afek entities so that the losses from those businesses offset the taxable income from GRE and reduce the consolidated tax provision to zero. The additional net operating losses are fully offset by a valuation allowance so no additional benefit for Federal income taxes was recorded. State and local taxes, which have no offset, decreased in the three and nine months ended September 30, 2017 compared to the same periods in 2016. IDT Energy and the limited liability companies are included in our consolidated return. Citizen’s Choice Energy, LLC, or CCE, a consolidated variable interest entity, files a separate tax return since we do not have any ownership interest in CCE.balance sheet.

Net (Income) Loss Attributable to Noncontrolling Interests.The change in the net loss attributable to noncontrolling interests in the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 compared to the similar ~~periods~~period in ~~2016~~2018 was primarily due to the acquisition of 60% majority interest in Prism in October 2018 and acquisition of 80% interest in Lumo in January 2019. Net income attributable to noncontrolling ~~interest’s share of Afek’s write-off of capitalized exploration costs in the~~interests for three ~~and nine~~ months ended ~~September 30, 2016. In~~March 31, 2019 was a resutlt of income from operations from Prism offset by the ~~three~~operating losses from Lumo, Afek and ~~nine~~CCE. Net loss to noncontrolling interests for three months ended ~~September 30, 2016, the noncontrolling interest in~~March 31, 2018 was a result of loss from operations of Afek ~~was 13.8%~~ and ~~the write-off of capitalized exploration costs was $41.0 million.~~CCE.

Liquidity and Capital Resources

General

We currently expect that our cash ~~flows~~flow from operations ~~in the next twelve months~~ and the ~~$29.4~~$37.5 million balance of unrestricted cash and cash equivalents that we held at ~~September 30, 2017~~March 31, 2019 will be sufficient to meet our currently anticipated cash requirements for at least the ~~twelve months ending September 30, 2018.~~

~~Afek may seek financing for the next phase of activity~~period from ~~a variety of sources, some of which could result in a process by which Afek would become an independent entity.~~April 1, 2019 to May 10, 2020.

At ~~September 30, 2017,~~March 31, 2019, we had working capital (current assets less current liabilities) of ~~$33.0~~$51.7 million.

	Nine months ended September 30,						Three Months Ended March 31,
	2017			2016			2019			2018
	(in millions)						(in thousands)
Cash flows provided by (used in):
Operating activities	$	3.4		$	11.6		$	7.0		$	8.6
Investing activities		(13.3	)		(0.7	)		(2.2	)		(0.2	)
Financing activities		4.1			(7.6	)		(4.5	)		(2.2	)
Effect of exchange rate changes on cash and cash equivalents		—			0.2
(Decrease) increase in cash and cash equivalents	$	(5.8	)	$	3.5
Effect of exchange rate changes on cash, cash equivalents and restricted cash								—			—
Increase in cash, cash equivalents, and restricted cash							$	0.3		$	6.2

Operating Activities

Cash provided by operating activities was ~~$3.4~~$7.0 million and ~~$11.6~~$8.6 million in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, respectively. Net income after non-cash adjustments increased cash flows by $2.1 for the three months ended March 31, 2019, compared to the same period in 2018. The increase mainly resulted from reductions in customer acquisition costs and the absence of legal accruals in 2019.

Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts ~~payable, including payments relating to our exploration activities.~~

~~Gross trade accounts receivable~~payable. Changes in working capital decreased ~~to $35.4~~cash flows by $2.7 million ~~at September 30, 2017 from $37.0 million at December 31, 2016 reflecting the seasonal decrease in GRE’s estimated receivable~~ for ~~delivered but not billed natural gas and electricity at September 30, 2017 compared to December 31, 2016, partially offset by the seasonal increase in GRE’s billed receivables in~~ the three months ended ~~September 30, 2017~~March 31, 2019, compared to the same period in 2018. Changes in other assets decreased cash flows by $1.0 million for the three months ended ~~December~~March 31, ~~2016.~~2019, compared to the same period in 2018.

Inventory of natural gas increased to $1.1 million at September 30, 2017 from $0.6 million at December 31, 2016 due to a 58% increase in the average unit cost and a 12% increase in quantity at September 30, 2017 compared to December 31, 2016. Inventory at September 30, 2017 and December 31, 2016 also included $3.8 million and $5.4 million, respectively, in renewable energy credits.

On July 5, 2017, we entered into a class action Settlement Agreement with the class action plaintiffs acting individually and on behalf of the entire class, in the lawsuits currently pending in New York, Pennsylvania and New Jersey (see “~~Legal Proceedings~~” in Note 11 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q). We estimated, based in part on historical participation rates that our total settlement payment will be approximately $9 million, although it is reasonably possible that the total payments could reach $10.1 million. The payments pursuant to the Settlement Agreement are expected to be disbursed during the first half of 2018. The actual amount to be paid out will depend on several factors, including the number of customers who claim settlement payments to which they are entitled. The Settlement Agreement is subject to entry of a final order by the Court approving the Settlement Agreement.

~~In the three months ended September 30, 2017, we accrued $1.5 million of estimated loss related to a pending regulatory matter in New Jersey, (see “~~~~Legal Proceedings~~~~” in Note 11 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q).~~

CCE is a consolidated variable interest entity. We determined that, since the acquisition of the interest in CCE, we had the power to direct the activities of CCE that most significantly impact its economic performance, and we have the obligation to absorb losses of CCE that could potentially be significant to CCE on a stand-alone basis. We therefore determined that we are the primary beneficiary of CCE, and as a result, we consolidate CCE within our GRE segment. We provided CCE with all of the cash required to fund its operations. In the nine months ended September 30, 2017, CCE repaid $0.2 million to us. In the nine months ended September 30, 2016, we provided CCE with net funding of $0.4 million to finance its operations.

As of November 19, 2015, ~~IDT Energy and~~ certain of ~~its affiliates~~GRE’s REPs entered into an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or ~~BP.~~BP, which was amended as of June 7, 2018. The agreement’s termination date is November 30, ~~2019,~~2021, except ~~either~~any party may terminate the agreement on November 30, ~~2018~~2020 by giving the other ~~party~~parties notice by May 31, ~~2018. IDT Energy’s~~2019. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of ~~IDT Energy’s~~the REPs’ customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. In addition, ~~IDT Energy~~the REPs must pay an advance payment of ~~$2.5~~$2.0 million to BP each month that BP will apply to the next invoiced amount due to BP. ~~IDT Energy’s~~The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At ~~September 30, 2017,~~March 31, 2019, we were in compliance with such covenants. At ~~September 30, 2017,~~March 31, 2019, restricted cash—short-term of ~~$0.2~~$0.9 million and trade accounts receivable of ~~$26.5~~$41.4 million were pledged to BP as collateral for the payment of ~~IDT Energy’s~~ trade accounts payable to BP of ~~$8.8~~$13.6 million at ~~September 30, 2017.~~

We are subject to audits in various jurisdictions for various taxes. The U.S. Internal Revenue Service has commenced an audit of the Afek Oil & Gas Ltd. tax return for 2014. Amounts asserted by taxing authorities or the amount ultimately assessed against us could be greater than accrued amounts. Accordingly, additional provisions may be recorded in the future as revised estimates are made or underlying matters are settled or resolved. Imposition of assessments as a result of tax audits could have an adverse effect on our results of operations, cash flows and financial condition.

On December 2, 2016, the PSC noticed an evidentiary hearing scheduled to take place in November-December 2017 to assess the retail energy market in New York. That process is underway and is expected to last for at least several more months. We are evaluating the potential impact of any new order from the PSC that would follow from the evidentiary process, while preparing to operate in compliance with any new requirements that may be imposed. Depending on the final language of any new order, as well as our ability to modify our relationships with our New York customers, an order could have a substantial impact upon the operations of GRE-owned REPs in New York.

~~On December 16, 2016, the PSC issued the 2016 Order prohibiting REP service to customers enrolled in New York’s utility low-income assistance programs (see “~~~~New York Public Service Commission Orders~~” in Note 11 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q). The 2016 Order began to be implemented on July 26, 2017. Unless a temporary stay of the 2016 Order is extended by the United States District Court, REPs will be required to return service of their current low-income customers to the relevant local incumbent utility in the next several weeks. We estimate that if the order is implemented in the current form, it will impact customers representing approximately 4-6% of the total volume of electricity and natural gas sold by the REPs operated by us. Additionally, this ruling will impact our ability to sign new customers in New York as the potential customer pool will be smaller. If challenges to the 2016 Order as currently structured are not successful, the combination of customers who have returned to the utility and the potential customer pool market in New York could have a material adverse impact on our future results.March 31, 2019.

From time to time, we receive inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and we respond to those inquiries or requests. We cannot predict whether any of those matters will lead to claims or enforcement actions.

Investing Activities

Our capital expenditures were ~~$3.2~~$0.3 million in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 compared to ~~$0.4~~$0.3 million in the ~~nine~~three months ended September 30, 2016. In the nine months ended September 30, 2017, our subsidiary Atid Drilling Ltd., or Atid, an on-shore drilling services venture based in Israel, purchased a drilling rig and associated drilling equipment for $2 million. Atid is providing drilling services to Afek for its sixth exploratory well.

In the nine months ended September 30, 2017 and 2016, we used cash of $5.5 million and $12.9 million, respectively, for investments in Afek’s unproved oil and gas property in the Golan Heights in Northern Israel.March 31, 2018. We had purchase commitments of ~~$23.9~~$108.9 million at ~~September 30, 2017,~~March 31, 2019, of which ~~$22.2~~$91.2 million was for ~~future~~ purchases of ~~electricity, and the remainder included commitments for capital expenditures and exploration costs.~~electricty. We currently anticipate that our total ~~expenditures for Afek’s exploration costs and other~~ capital expenditures in the twelve months ending ~~September 30, 2018~~ March 31, 2019 will be between $4$0.5 million and $6$1.0 million.

~~On August 10, 2017, GRE acquired Mirabito for cash of $3.7 million, net of $0.1 million cash acquired. At September 30, 2017, GRE owed the sellers $0.2 million, which was paid in October 2017.~~

On July 17, 2017, GEUK entered into a definitive agreement with EGC to launch Shoreditch in the United Kingdom. At September 30, 2017, GEUK had contributed $1.3 million to Shoreditch, and GEUK will contribute an additional aggregate of up to £4.2 million ($5.7 million at September 30, 2017) by August 1, 2018, contingent on Shoreditch’s achievement of performance based milestones. EGC will contribute an aggregate of up to £1.7 million ($2.2 million at September 30, 2017) to Shoreditch by August 1, 2018, contingent on Shoreditch’s achievement of performance based milestones.

We received ~~$0.4~~$0.1 million from an employee for the ~~partial~~ repayment of notes receivable in the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2019.

InOn January 2, 2019, the ~~nine months ended September 30, 2017~~Company completed the purchase of an 80% controlling interest in Lumo. The Company paid the sellers a total of €1.6 million (equivalent to $1.9 million). The Company contributed €1.3 million (equivalent to $1.5 million) as a capital loan to fund Lumo's working capital requirements. We also provided Lumo with a secured loan for €2.0 million (equivalent to $2.3 million) to pay off and 2016, we used cash of nil and $3.0 million, respectively, to purchase certificates of deposit. In the nine months ended September 30, 2017 and 2016, proceeds from maturities of certificates of deposit were nil and $11.9 million, respectively.replace its remaining debt.

On March 23, 2016, Total gave AMSO its notice of withdrawal from AMSO, LLC, which was effective on April 30, 2016. As of April 1, 2016, AMSO and Total agreed that Total would pay AMSO, LLC $3.0 million as full payment of its share of all costs associated with the decommissioning, winding up and dissolution of AMSO, LLC. Total will not be refunded any amount if the decommissioning costs are less than $3.0 million. Effective April 30, 2016, AMSO, LLC’s assets, liabilities, results of operations and cash flows are included in our consolidated financial statements. We accounted for our acquisition on April 30, 2016 of Total’s ownership interest in AMSO, LLC as a business combination. We recognized a gain from the acquisition of Total’s interest in AMSO, LLC because we acquired the net assets of AMSO, LLC while no consideration was transferred by us, due to our assumption of the risk associated with the shutdown obligations. The gain also included our gain on the remeasurement of AMSO’s investment in AMSO, LLC at its acquisition date fair value. The aggregate gain recognized was $1.3 million, which was included in 2016 in “Gain on consolidation of AMSO, LLC” in the consolidated statements of operations.

~~In the nine months ended September 30, 2017 and 2016, cash used for capital contributions to AMSO, LLC was nil and $0.1 million, respectively.~~

Financing Activities

In each of the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, we paid aggregate quarterly Base Dividends of ~~$0.4782~~$0.1594 per share, $0.4 million in the aggregate, on our Series 2012-A Preferred Stock, or Preferred Stock. ~~The aggregate amount paid in each of the nine months ended September 30, 2017 and 2016 was $1.1 million.~~ On ~~October 19, 2017,~~April 10, 2019, our Board of Directors declared a quarterly Base Dividend of $0.1594 per share on our Preferred Stock. The dividend will be paid on or about ~~November~~May 15, ~~2017~~2019 to stockholders of record as of the close of business on ~~November 1, 2017.~~May 6, 2019.

In the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, we paid aggregate quarterly dividends of ~~$0.225 and $0.18~~$0.075 per share ~~respectively, on~~to stockholders of our Class A common stock and Class B common stock. The ~~aggregate amount~~Company paid in$2.0 million and $1.9 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016 was $5.6 million and $4.4 million, respectively.~~2018. On ~~November 1, 2017,~~May 2, 2019, our Board of Directors declared a quarterly dividend of $0.075 per share on our Class A common stock and Class B common stock. The dividend will be paid on or about ~~November 17, 2017~~May 31, 2019 to stockholders of record as of the close of business on ~~November 13, 2017.~~

~~In the nine months ended September 30, 2017, GOGAS purchased from employees of Afek a 1.15% fully vested interest in Afek for $0.3 million in cash.~~

REH had a Credit Agreement with Vantage for a revolving line of credit for up to a maximum principal amount of $7.5 million. The principal outstanding incurred interest at one-month LIBOR plus 5.25% per annum, payable monthly. The outstanding principal and any accrued and unpaid interest was due on the maturity date of October 31, 2017.May 20, 2018.

On April 4, 2017, GRE, IDT Energy, and other GRE subsidiaries entered into a Credit Agreement with Vantage Commodities Financial Services II, LLC, or Vantage, for a $20 million revolving ~~line of credit.~~loan facility. The borrowers consist of our subsidiaries that operate REP businesses, and those subsidiaries’ obligations are guaranteed by GRE. On April 4, 2017, the borrowers borrowed $4.3 million under this facility, which included ~~$1.7~~$1.8 million that was previously outstanding under the credit facility between REH and Vantage. The REH Credit Agreement with Vantage was terminated in connection with the entry into this credit agreement. The borrowers have provided as collateral a security interest in their receivables, bank accounts, customer agreements, certain other material agreements and related commercial and intangible rights. Outstanding principal amount incurs interest at LIBOR plus 4.5% per annum. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest is due on the maturity date of April 3, 2020. The borrowers are required to comply with various affirmative and negative covenants, including maintaining a target tangible net worth during the term of the credit agreement. To date, we are in compliance with such covenants. In the ~~nine~~three months ended ~~September 30, 2017, including the prior REH Credit Agreement, GRE~~March 31, 2019, there were no amounts borrowed ~~$14.5 million~~or repaid under the ~~revolving~~ line of ~~credit and repaid $12.7 million.~~credit. At ~~September 30, 2017,~~March 31, 2019, $2.5 million was outstanding under the ~~revolving~~ line of credit and the effective interest rate was ~~5.82%~~7.13% per annum.

On December ~~17, 2015, GRE, IDT Energy and certain affiliates~~18, 2018, we entered into a Credit Agreement with Maple Bank GmbH for a revolving loan facility. On December 17, 2015, GRE borrowed $2.0 million under the facility. In February 2016, the German banking regulator, Bafin, closed Maple Bank GmbH due to impending financial over-indebtedness related to tax-evasion investigations. In September 2016, GRE, and its affiliates entered into a settlement agreement with the court appointed liquidator of Maple Bank. Under this agreement, GRE paid $1.8 million as a full settlement of all of its obligations, and the revolving loan facility was terminated. Accordingly, GRE recorded a gain from this settlement of $0.2 million.

~~On May 31, 2017, our Loan Agreement with~~ JPMorgan Chase Bank (“Credit Agreement”) for a ~~revolving~~$5.0 million credit line facility (“Credit Line”) which expires on December 31, 2019. The Company will pay a commitment fee of 0.10% per annum on unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.00% of the original maximum available amount of the letter of credit. We agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit ~~expired. There~~equal to $5.1 million. As of March 31, 2019, there were no amounts ~~outstanding~~borrowed under the line of credit. ~~Cash~~At March 31, 2019, the cash collateral of ~~$10.0~~$5.2 million ~~that~~ was included in ~~“Restricted~~restricted cash—~~short-term”~~short-term in the consolidated balance ~~sheet was released.~~sheet.

In the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, we received proceeds of $0.1 million from the exercise of stock options for which we issued ~~15,855~~23,150 shares of our Class B common stock. There were no stock option exercises in the ~~nine months ended September 30, 2016.~~

In the nine months ended September 30, 2017, we paid $0.8 million to repurchase 129,898 shares of our Class B common stock. In the nine months ended September 30, 2016, we paid $29,000 to repurchase 3,096 shares of our Class B common stock. These shares were tendered by our employees to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.

In December 2013, IDT Energy acquired 100% of the outstanding membership interests of Diversegy and IDT Energy Network. In the nine months ended September 30, 2017 and 2016, we paid nil and $0.2 million, respectively, related to these acquisitions. At September 30, 2017, the remaining estimated contingent payments were $0.2 million.

GRE has the right, at its option, to satisfy its obligations to issue common stock of GRE upon the vesting of the deferred stock units it granted in July 2015 to officers and employees in shares of our Class B common stock or cash. In August 2017, we issued 287,233 shares of our Class B common stock in exchange for 26.1 vested deferred stock units of GRE. The aggregate fair value of the shares of our Class B common stock issued was $1.8 million.Three Months Ended March 31, 2018.

On March 11, 2013, our Board of Directors approved a ~~stock repurchase~~ program for the repurchase of up to an aggregate of 7.0 million shares of our Class B common stock. There were no repurchases under the program in the ~~nine~~three months ended ~~September 30, 2017 or 2016.~~March 31, 2019 and 2018. At ~~September 30, 2017,~~March 31, 2019, 6.9 million shares remained available for repurchase under the stock repurchase program.

~~Contractual Obligations and Other Commercial Commitments~~

~~The following tables quantify our future contractual obligations and other commercial commitments at September 30, 2017:~~

~~Payments Due by Period~~

(in millions) Total
Less than
1 year
1—3 years 4—5 years
After
5 years

Purchase obligations $ 23.9 $ 19.0 $ 4.9 $ — $ —
Renewable energy credit purchase obligations 27.1 1.0 18.5 7.6 —
Revolving line of credit (1) 3.4 0.4 3.0 — —
Operating leases 0.4 0.2 0.2 — —
Other obligations (2)(3) 0.3 0.3 — — —
TOTAL CONTRACTUAL OBLIGATIONS (4)(5) $ 55.1 $ 20.9 $ 26.6 $ 7.6 $ —

~~(1)~~

~~The above table includes principal outstanding at September 30, 2017 plus estimated interest and fees.~~

~~(2)~~

The above table does not include estimated contingent payments of $0.2 million in connection with the acquisition of Diversegy and IDT Energy Network due to the uncertainty of the amount and/or timing of any such payments.

~~(3)~~

The above table does not include an aggregate of up to £4.2 million ($5.7 million at September 30, 2017) to be contributed by GEUK to Shoreditch by August 1, 2018, contingent on Shoreditch’s achievement of performance based milestones, due to the uncertainty of the amount and/or timing of any payments.

~~(4)~~

~~The above table does not include an aggregate of $11.6 million in performance bonds at September 30, 2017 due to the uncertainty of the amount and/or timing of any payments.~~

~~(5)~~

The above table does not include our unrecognized income tax benefits for uncertain tax positions at September 30, 2017 of $0.7 million due to the uncertainty of the amount and/or timing of any such payments. Uncertain tax positions taken or expected to be taken on an income tax return may result in additional payments to tax authorities. We are not currently able to reasonably estimate the timing of any potential future payments. If a tax authority agrees with the tax position taken or expected to be taken or the applicable statute of limitations expires, then additional payments will not be necessary.

Off-Balance Sheet Arrangements

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following.

GRE has performance bonds issued through a third party for the benefit of certain utility companies and for various states in order to comply with the states’ financial requirements for retail energy ~~providers and for certain utility companies.~~providers. At ~~September 30, 2017,~~March 31, 2019, GRE had aggregate performance bonds of ~~$11.6~~$12.9 million outstanding.

On October 28, 2011, we were spun-off by IDT (the “Spin-Off”). In connection with our Spin-Off, we and IDT entered into various agreements prior to the Spin-Off including a Separation and Distribution Agreement to effect the separation and provide a framework for our relationship with IDT after the Spin-Off, and a Tax Separation Agreement, which sets forth the responsibilities of us and IDT with respect to, among other things, liabilities for federal, state, local and foreign taxes for periods before and including the Spin-Off, the preparation and filing of tax returns for such periods and disputes with taxing authorities regarding taxes for such periods. Pursuant to Separation and Distribution Agreement, among other things, we indemnify IDT and IDT indemnifies us for losses related to the failure of the other to pay, perform or otherwise discharge, any of the liabilities and obligations set forth in the agreement. Pursuant to the Tax Separation Agreement, among other things, IDT indemnifies us from all liability for taxes of IDT with respect to any taxable period, and we indemnify IDT from all liability for taxes of ours with respect to any taxable period, including, without limitation, the ongoing tax audits related to our business.

Item 3.

Quantitative and Qualitative Disclosures About Market Risks

Our primary market risk exposure is the price applicable to our natural gas and electricity purchases and sales. The sales price of our natural gas and electricity is primarily driven by the prevailing market price. Hypothetically, if our gross profit per unit in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 had remained the same as in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2018, due to changes in the price of natural gas and electricity, our gross profit from electricity sales would have ~~increased~~decreased by ~~$16.1~~$1.9 million in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and our gross profit from natural gas sales would have decreased by ~~$1.2~~$3.3 million in ~~that same period.~~the three months ended March 31, 2019.

The energy markets have historically been very volatile, and we can reasonably expect that electricity and natural gas prices will be subject to fluctuations in the future. In an effort to reduce the effects of the volatility of the price of electricity and natural gas on our operations, we have adopted a policy of hedging electricity and natural gas prices from time to time, at relatively lower volumes, primarily through the use of put and call options and swaps. While the use of these hedging arrangements limits the downside risk of adverse price movements, it also limits future gains from favorable movements. We do not apply hedge accounting to these options or swaps, therefore the mark-to-market change in fair value is recognized in cost of revenue in our consolidated statements of operations. Refer to Note 6 – Derivative Instruments, for details of the hedging activities.

~~The summarized volume of GRE’s outstanding contracts and options at September 30, 2017 was as follows (MWh – Megawatt hour and Dth – Decatherm):~~

~~Commodity~~	~~Settlement Dates~~	~~Volume~~
~~Electricity~~	~~October 2017~~	~~31,680 MWh~~
~~Electricity~~	~~November 2017~~	~~223,440 MWh~~
~~Electricity~~	~~December 2017~~	~~283,200 MWh~~
~~Electricity~~	~~January 2018~~	~~397,760 MWh~~
~~Electricity~~	~~February 2018~~	~~361,600 MWh~~
~~Electricity~~	~~March 2018~~	~~214,720 MWh~~
~~Electricity~~	~~July 2018~~	~~159,600 MWh~~
~~Electricity~~	~~August 2018~~	~~174,800 MWh~~
~~Electricity~~	~~October 2018~~	~~73,600 MWh~~
~~Electricity~~	~~November 2018~~	~~67,200 MWh~~
~~Electricity~~	~~December 2018~~	~~64,000 MWh~~
~~Natural gas~~	~~November 2017~~	~~1,230,000 Dth~~
~~Natural gas~~	~~December 2017~~	~~793,000 Dth~~
~~Natural gas~~	~~January 2018~~	~~155,000 Dth~~
~~Natural gas~~	~~February 2018~~	~~580,000 Dth~~

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures.Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2017 because of material weaknesses in our internal control over financial reporting relating to (1) the estimation of weather impact on our estimated unbilled revenue, and (2) management review controls associated with the completeness and accuracy of computations relating to domestic and foreign income tax accounts and disclosures.

~~Estimation of Weather Impact on Estimated Unbilled Revenue.~~~~On November 1, 2017, the management and Audit Committee of our Board of Directors concluded that our previously issued financial statements for the quarters ended~~ March 31, ~~2017 and June 30, 2017 should no longer be relied upon because of errors related~~2019, due to ~~the timing of revenues and cost of revenues recorded in these quarters that resulted in~~a material misstatements of income from operations, net income and earnings per share. Additionally, our earnings and press releases and similar communications should no longer be relied upon to the extent that they relate to our financial statements for those periods. The errors impacted revenue by $2.0 million, gross profit and income (loss) from operations by $1.2 million, and net income by $1.1 million. The errors caused an understatement by those amounts in the quarter ended March 31, 2017, and an overstatement by the same amounts in the quarter ended June 30, 2017, resulting in no impact for the six-month period ended June 30, 2017.

~~Management has concluded that there are material weaknesses~~weakness in internal control over financial reporting ~~as we did not maintain effective controls over the application of U.S. GAAP related to the estimation of weather impact~~that was disclosed in our Annual Report on our estimated unbilled revenue. This estimation process is performed in an effort to allocate billings to a calendar period using historical consumption data of the customer base of the retail energy providers operated by us and applying a weather factor to estimated unbilled amounts. The weather adjustment was erroneous, causing understated amounts of estimated unbilled commodity consumption, resulting in under estimates of revenues and cost of revenues to be included in the quarter ended March 31, 2017. The nature of the estimation processes is reversing, as actual billings representing the unbilled estimates manifest in the following period, in this case, in April 2017. The reversal of this estimate resulted in commodity consumption and the associated revenues and cost of revenues to be overstated in the quarter ended June 30, 2017. The cumulative operating resultsForm 10-K for the ~~six months~~year ended ~~June 30, 2017 were unaffected.~~December 31, 2018.

~~We have begun~~Remediation. As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2018, we began implementing ~~the following measures~~a remediation plan to ~~remediate~~address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and ~~improve our internal control over financial reporting:~~

	●	~~Enhanced the review process of the inputs into the schedules for the weather adjustment to estimated unbilled revenue;~~

	●	~~Enhanced the schedules used for the weather adjustments to improve the review of the inputs; and~~

	●	~~Key members of management will meet each month to review the estimated consumption amounts to assess whether results are in-line with expectations.~~

~~Management Review Controls Associated with~~management has concluded, through testing, that these controls are operating effectively. We expect that the ~~Completeness and Accuracy~~remediation of ~~Computations Relating to Domestic and Foreign Income Tax Accounts and Disclosures.~~ ~~This~~this material weakness ~~was initially identified as~~will be completed in the third quarter of ~~December 31, 2016.~~2019.

~~We have begun implementing the following measures to remediate the~~The compensating controls implemented and applied during fourth quarter of 2018 are continually being refined for efficiency and effectiveness and were applied in first quarter of 2019, without material ~~weakness and improve our internal control over financial reporting:~~exception.

	●	~~Engaged an independent third party to assist in preparation of and perform a comprehensive review of tax calculations and related disclosures;~~

	●	~~Enhance the review of calculations and disclosure of deferred income tax balances;~~

	●	~~Implement additional internal analytical procedures to validate tax accounting tax-related balances; and~~

	●	~~Enhance internal documentation support related to the Company’s tax position.~~

~~Management and our Audit Committee will monitor these remedial measures and the effectiveness of our internal controls and procedures.~~

Notwithstanding these material weaknesses, we have performed additional analyses and other procedures to enable management to conclude that our financial statements included in this Form 10-Q fairly present, in all material respects, our financial condition and results of operations as of and for the three months ended September 30, 2017.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Legal proceedings in which we are involved are more fully described in Note 1117 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

Item 1A.

Risk Factors

~~There are no material changes from the risk factors previously disclosed~~The Risk Factors included in ~~Item 1A to Part I of~~ our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2018 have not materially changed except the following:

Current strategy in the REP business is based on current regulatory conditions and assumption, which could change or prove to be incorrect.

Several items of legislation which could impact our ability, in certain markets, to market services to certain segments of the residential market or to renew certain customers have recently been proposed. A proposed bill in the Connecticut House of Representatives would require affirmative consent for any renewals of customers. It has been our experience that it can be difficult to obtain such affirmative consents. If the bill were passed in its current form, it could adversely impact our ability to renew customer contracts in the market. Rhode Island has a similar bill currently under review by its State Senate. On May 1, 2019, the Illinois’ State Senate approved a bill that would (i) prohibit REPs from marketing to low income customers on government assistance, (ii) require affirmative consent on any renewals of fixed rate contracts at increased prices, and (iii) require additional disclosures to customers. The Illinois legislation has not yet been approved by the house and/or written into law. The REP industry is working with government representatives, legislators, and advocacy interest groups to lobby for alternative legislation that would more effectively protect customer interests while preserving the competitive structure of deregulated markets. We also seek to expand and diversify into new markets with regulatory structures that are more favorable to the competitive retail supply of energy.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases by us of our shares during the ~~third~~first quarter of ~~2017:~~2019:

Total
Number of
Shares
Purchased

Average
Price
per Share

Total Number
of Shares
Purchased as
part of
Publicly
Announced
Plans or
Programs

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs (1)

July 1–31, 2017 — $ — — 6,896,669
August 1–31, 2017 (2) 125,995 $ 6.43 — 6,896,669
September 1–30, 2017 — $ — — 6,896,669

Total 125,995 $ 6.43 —

	Total Number of Shares Purchased			Average Price per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1–31, 2019		—		$	—		—		6,896,669
February 1-28, 2019		—	(2)	$	—		—		6,896,669
March 1-31, 2019		—		$	—		—		6,896,669
Total		—		$	—		—

(1)

~~(1)~~

Under our existing stock repurchase program, approved by our Board of Directors on March 11, 2013, we were authorized to repurchase up to an aggregate of 77.0 million shares of our Class B common stock.

(2)

~~(2)~~

Consists of shares of Class B common stock that were tendered by employees of ours to satisfy the tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.

Item 3.

Defaults upon Senior Securities

None

Item 4.

Mine Safety Disclosures

Not applicable

Item 5.

Other Information

None

Item 6.

Exhibits

Exhibit Number		Description

10.1* 31.1*		~~Restricted Stock Agreement between the Registrant and Howard Jonas, dated August 7, 2017.~~

31.1*		Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

Filed or furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Genie Energy Ltd.

~~November 9, 2017~~ May 10, 2019	By:	/s/ Michael M. Stein
			Michael M. Stein Chief Executive Officer

~~November 9, 2017~~ May 10, 2019	By:	/s/ Avi Goldin
			Avi Goldin Chief Financial Officer