| REPORTABLE BUSINESS SEGMENTS |
10.REPORTABLE BUSINESS SEGMENTS Just Energy has two business segments: the mass market segment and the commercial segment. The mass market segment includes customers acquired and served under the Just Energy, Tara Energy, Amigo Energy and Terrapass brands. Marketing of the energy products of this segment is primarily done through digital and retail sales channels. The commercial segment includes customers acquired and served under Hudson Energy, as well as brokerage services managed by Interactive Energy Group. Hudson Energy sales are made through three main channels: brokers, in-person commercial independent contractors and inside commercial sales representatives. The chief operating decision-maker monitors the operational results of the mass market and commercial segments for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on certain non-U.S. GAAP measures such as base EBITDA, base gross margin and embedded gross margin. Transactions between segments are in the normal course of operations and are recorded at the exchange amount. Corporate and shared services report the costs related to management oversight of the business units, public reporting and filings, corporate governance and other shared services functions such as Human Resources, Finance and Information Technology. The chief operating decision maker does not review the assets and liabilities for the reporting units for decision making purposes. For the three months ended September 30, 2022: | | | | | | | | | | | | | | | | | | | | | Corporate and | | | | | | Mass market | | Commercial | | shared services | | Consolidated | | | | | | | | | | | | | | Revenue | | $ | 418,031 | | $ | 266,937 | | $ | – | | $ | 684,968 | Cost of goods sold | | | 612,385 | | | 344,485 | | | – | | | 956,870 | Gross margin | | | (194,354) | | | (77,548) | | | – | | | (271,902) | Administrative expenses | | | 9,271 | | | 2,750 | | | 17,913 | | | 29,934 | Selling and marketing expenses | | | 24,526 | | | 10,717 | | | – | | | 35,243 | Provision for expected credit loss | | | 15,277 | | | 1,479 | | | – | | | 16,756 | Depreciation and amortization | | | 2,593 | | | 501 | | | – | | | 3,094 | Segment loss | | $ | (246,021) | | $ | (92,995) | | $ | (17,913) | | $ | (356,929) | Interest expense | | | | | | | | | | | | (8,921) | Reorganization costs | | | | | | | | | | | | (26,951) | Unrealized loss on derivative instruments | | | | | | | | | | | | (289,774) | Realized gain on derivative instruments | | | | | | | | | | | | 395,631 | Other expense, net | | | | | | | | | | | | 163 | Income tax benefit | | | | | | | | | | | | 81,164 | Net loss | | | | | | | | | | | $ | (205,617) | | | | | | | | | | | | | |
For the three months ended September 30, 2021: | | | | | | | | | | | | | | | | | | | | | Corporate and | | | | | | Mass market | | Commercial | | shared services | | Consolidated | | | | | | | | | | | | | | Revenue | | $ | 318,667 | | $ | 240,715 | | $ | – | | $ | 559,382 | Cost of goods sold | | | 269,266 | | | 225,346 | | | – | | | 494,612 | Gross margin | | | 49,401 | | | 15,369 | | | – | | | 64,770 | Administrative expenses | | | 8,206 | | | 2,983 | | | 18,627 | | | 29,816 | Selling and marketing expenses | | | 23,144 | | | 12,394 | | | – | | | 35,538 | Provision for expected credit loss | | | 2,843 | | | 102 | | | – | | | 2,945 | Depreciation and amortization | | | 3,079 | | | 657 | | | – | | | 3,736 | Segment income (loss) | | $ | 12,129 | | $ | (767) | | $ | (18,627) | | $ | (7,265) | Interest expense | | | | | | | | | | | | (7,754) | Reorganization costs | | | | | | | | | | | | (14,746) | Unrealized gain on derivative instruments | | | | | | | | | | | | 233,036 | Realized gain on derivative instruments | | | | | | | | | | | | 38,777 | Realized gain on investment | | | | | | | | | | | | 22,887 | Other expense, net | | | | | | | | | | | | (45) | Income tax benefit | | | | | | | | | | | | 191 | Net income | | | | | | | | | | | $ | 265,081 | | | | | | | | | | | | | |
For the six months ended September 30, 2022: | | | | | | | | | | | | | | | | | | | | | Corporate and | | | | | | Mass Market | | Commercial | | shared services | | Consolidated | | | | | | | | | | | | | | Revenue | | $ | 758,608 | | $ | 496,946 | | $ | – | | $ | 1,255,554 | Cost of goods sold | | | 1,021,587 | | | 598,496 | | | – | | | 1,620,083 | Gross margin | | | (262,979) | | | (101,550) | | | – | | | (364,529) | Administrative expenses | | | 17,041 | | | 5,469 | | | 34,911 | | | 57,421 | Selling and marketing expenses | | | 46,115 | | | 21,600 | | | – | | | 67,715 | Provision for expected credit loss | | | 25,601 | | | 1,605 | | | – | | | 27,206 | Depreciation and amortization | | | 5,011 | | | 1,000 | | | – | | | 6,011 | Segment loss for the period | | $ | (356,747) | | $ | (131,224) | | $ | (34,911) | | $ | (522,882) | Interest expense | | | | | | | | | | | | (17,409) | Unrealized loss on derivative instruments | | | | | | | | | | | | (67,335) | Realized gain on derivative instruments | | | | | | | | | | | | 592,710 | Other income, net | | | | | | | | | | | | 395 | Reorganization costs | | | | | | | | | | | | (46,082) | Income tax benefit | | | | | | | | | | | | 15,600 | Net loss | | | | | | | | | | | $ | (45,003) | | | | | | | | | | | | | | As at September 30, 2022 | | | | | | | | | | | | | Total goodwill | | $ | 120,951 | | $ | – | | $ | – | | $ | 120,951 |
For the six months ended September 30, 2021: | | | | | | | | | | | | | | | | | | | | | Corporate and | | | | | | Mass Market | | Commercial | | shared services | | Consolidated | | | | | | | | | | | | | | Revenue | | $ | 575,904 | | $ | 479,839 | | $ | – | | $ | 1,055,743 | Cost of goods sold | | | 478,074 | | | 447,548 | | | – | | | 925,622 | Gross margin | | | 97,830 | | | 32,291 | | | – | | | 130,121 | Administrative expenses | | | 15,623 | | | 5,688 | | | 33,149 | | | 54,460 | Selling and marketing expenses | | | 43,636 | | | 24,238 | | | – | | | 67,874 | Provision for expected credit loss | | | 8,007 | | | 1,011 | | | – | | | 9,018 | Depreciation and amortization | | | 6,063 | | | 1,318 | | | – | | | 7,381 | Segment income (loss) | | $ | 24,501 | | $ | 36 | | $ | (33,149) | | $ | (8,612) | Interest expense | | | | | | | | | | | | (16,584) | Reorganization costs | | | | | | | | | | | | (31,232) | Unrealized gain on derivative instruments | | | | | | | | | | | | 469,091 | Realized gain on derivative instruments | | | | | | | | | | | | 52,793 | Realized gain on investment | | | | | | | | | | | | 22,887 | Other expenses, net | | | | | | | | | | | | (412) | Income tax benefit | | | | | | | | | | | | 984 | Net income | | | | | | | | | | | $ | 488,915 | | | | | | | | | | | | | | As at September 30, 2021 | | | | | | | | | | | | | Total goodwill | | $ | 129,365 | | $ | – | | $ | – | | $ | 129,365 |
Revenue from external customers The revenue is based on the location of the customer. | | | | | | | | | | | | | | | | Three months ended September 30, | | Six months ended September 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | Canada | | $ | 120,603 | | $ | 101,511 | | $ | 228,626 | | $ | 215,983 | | United States | | | 564,365 | | | 457,871 | | | 1,026,928 | | | 839,760 | | Total | | $ | 684,968 | | $ | 559,382 | | $ | 1,255,554 | | $ | 1,055,743 | |
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