Genie Energy Ltd. Annual Report 2015

FY2015 Annual Report · Genie Energy Ltd.
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GENIE ENERGY LTD.

2015 ANNUAL REPORT

Fellow Stockholders, 

I write this at a time of great challenge, but also one of great opportunity for our company.  We have made 
extraordinary progress over the past year, but must meet the current challenges head on in order to realize Genie 
Energy’s tremendous potential.   

Just one year ago, our Afek subsidiary embarked on an ambitious exploratory drilling program in Northern Israel’s 
Golan Heights.  Since then, we have come a long way toward our goal of evaluating the resource to support the 
declaration of an oil and gas discovery under Israel’s Petroleum law.  Afek has completed five exploratory wells and 
commenced a well flow test program that will tell us a great deal about the commercial potential of the resource.  I 
am extremely proud of the enormous effort put forth by everyone involved.   

Genie Retail Energy, or GRE, which owns our REP businesses, successfully emerged from the devastating impact of 
the Polar Vortex that hit much of our service area during early 2014. GRE has expanded into the Midwest with the 
opening of operations in Illinois, navigated the changed marketplace and returned to net meter growth.  Today, GRE 
is executing on its plans for further geographic expansion as well as initiatives to diversify its sources of revenue and 
growth and improve its competitive position.  

But GRE now faces a new challenge.  New York’s Public Service Commission has proposed a regulatory initiative 
which would significantly curtail consumer choice throughout New York and restrict the scope of offerings 
available from retail energy providers which could have an impact on our customer base.  We continue to hope and 
advocate for common sense to prevail, so that the proposal as finally implemented will serve to weed out the few 
bad actors in the industry while preserving consumers’ ability to choose from a wide variety of retail energy options 
and providers. 

As you can see, each of our key business units has tremendous potential that needs focus and effort to realize.  We 
continue to look for ways to turn the potential into reality and maximize stockholder value, balancing short, medium 
and long term needs and prospects on both sides of our business.  These include investing in organic growth, finding 
new opportunities that can be accretive or strategic to current operations and constantly re-thinking our strategic 
focus and how our different operations may complement or impact one another.  We do not shy away from bold 
moves when they are in the best interests of our stockholders.    

I am energized by the exciting prospects for both of our core businesses, and can’t wait to get to work every day.  
It’s always a pleasure to work with Genie’s extraordinary and committed management team and stockholders.  
Thank you for your continued investment.   

Howard Jonas 
Chairman and CEO 

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(cid:54) Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the ﬁ scal year ended December 31, 2015, 
or

(cid:133) 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 speciﬁ ed in its charter)

Delaware
(State or other jurisdiction of 
incorporation or organization)

45-2069276
(I.R.S. Employer 
Identiﬁcation No.)

520 Broad Street, Newark, New Jersey 07102
(Address of principal executive offi  ces, zip code)

(973) 438-3500
(Registrant’s telephone number, including area code)

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

Title of each class
Class B common stock, par value $.01 per share
Series 2012-A Preferred stock, par value $.01 per share

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as deﬁ ned in Rule 405 of the Securities Act. Yes (cid:133) No (cid:54)

Indicate by check mark if the registrant is not required to ﬁ le reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:133) No (cid:54)

Indicate by check mark whether the registrant (1) has ﬁ led all reports required to be ﬁ led 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 ﬁ le such 
reports), and (2) has been subject to such ﬁ ling requirements for the past 90 days. Yes (cid:54) No (cid:133)

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 ﬁ les). Yes (cid:54) No (cid:133)

Indicate by check mark if disclosure of delinquent ﬁ lers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not 
contained herein, and will not be contained, to the best of registrant’s knowledge, in deﬁ nitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:133)

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

Large accelerated ﬁler (cid:133)
Non-accelerated ﬁler (cid:133)

Accelerated ﬁler (cid:54)
Smaller reporting company (cid:133)

Indicate by check mark whether the registrant is a shell company (as deﬁ ned in Rule 12b-2 of the Act). Yes (cid:133) No (cid:54)

The aggregate market value of the voting and non-voting stock held by non-affi  liates of the registrant, based on the closing price 
on June 30, 2015 (the last business day of the registrant’s most recently completed second ﬁ scal quarter) of the Class B common 
stock of $10.47 per share, as reported on the New York Stock Exchange, was approximately $163 million.

As of March 8, 2016, the registrant had outstanding 23, 058,559 shares of Class B common stock and 1,574,326 shares of Class A 
common stock. Excluded from these numbers are 201,017 shares of Class B common stock held in treasury by Genie Energy Ltd.

DOCUMENTS INCORPORATED BY REFERENCE

The deﬁ nitive proxy statement relating to the registrant’s Annual Meeting of Stockholders, to be held May 5, 2015, is 
incorporated by reference into Part III of this Form 10-K to the extent described therein.

[THIS PAGE INTENTIONALLY LEFT BLANK.]

Index

Genie Energy Ltd. 

Annual Report on Form 10-K

Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases 
of Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.  . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risks. . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. . .
Item 9A. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 10. Directors, Executive Officers and Corporate Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneﬁcial Owners and Management and Related 

Stockholder Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence.  . . . . . . . . . . . .
Item 14. Principal Accounting Fees and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 15. Exhibits, Financial Statement Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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i

Part I

As used in this Annual Report, 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.

Item 1. Business.

BUSINESS OVERVIEW

Genie Energy Ltd. is comprised of the following two businesses :

Genie Retail Energy, (GRE),  which acts through various subsidiaries, resells electricity and natural gas to residential 
and small business customers operating primarily in the Mid-Atlantic and Midwestern United States. It also provides 
brokerage and advisory services to large commercial customers in deregulated markets. Since its inception in 2004, 
GRE has grown to become one of the nation’s largest independent retail energy providers, which are commonly 
referred to as “REPs”.

Genie Oil and Gas, Inc., (GOGAS), is an oil and gas exploration company. GOGAS projects include an oil and gas 
exploration project in Israel operated by its subsidiary, Afek Oil and Gas, Ltd. In 2013, the Government of Israel 
awarded Afek an exclusive three year petroleum exploration license covering 396.5 square kilometers in the southern 
portion of the Golan Heights. We are in the process of submitting our work plan for the subsequent exploration 
phases and once submitted, Israel’s National Infrastructure, Energy and Water Ministry is expected to extend our 
license. Pursuant to that license, Afek is conducting an exploratory drilling program of up to ten wells throughout 
its license area, as well as a well ﬂ ow test program. The results of the exploration program to date are consistent 
with our original theory and demonstrate the existence of signiﬁ cant hydrocarbon resources, although there are still 
unknowns that will impact the commercial viability of the resource.

CORPORATE STRUCTURE

Genie Energy Ltd., a Delaware corporation, owns 99.3% of its subsidiary, Genie Energy International Corporation, 
or GEIC, which owns 100% of GRE, and 92% of GOGAS. GOGAS holds an 86.5% interest in Afek Oil & Gas 
Ltd., or Afek. In addition, GOGAS has a  98.3% interest in American Shale Oil Corporation, or AMSO, which holds 
and manages a 41.3% interest in American Shale Oil, L.L.C., or AMSO, LLC, an oil shale development project 
in Colorado. GOGAS also holds majority interests in two inactive oil and gas projects: an 86.1% interest in Israel 
Energy Initiatives, Ltd., or IEI, an oil shale development project in Israel, and an 88.4% interest in Genie Mongolia, 
Inc., an oil shale exploration project in Central Mongolia.

GRE has outstanding deferred stock units granted to directors and employees that represent an interest of 3.9% of 
the equity of GRE.

REPORTABLE SEGMENTS

We have  three reportable business segments: Genie Retail Energy, Afek Oil and Gas, Ltd., and Genie Oil and Gas. 
Our reportable segments are distinguished by types of service, customers and methods used to provide their services. 
Financial information by segment and geographic areas is presented in “Note 16— Business Segment Information” 
in the Notes to our Consolidated Financial Statements in this Annual Report.

GENERAL BUSINESS INFORMATION

Our main offi  ces are located at 520 Broad Street, Newark, New Jersey 07102. Our  telephone number  is 
(973) 438-3500 and our web site is www.genie.com.

We make available free of charge through the investor relations page of our web site (http://genie.com/investors/
sec-ﬁ lings/) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all 
amendments to these reports, and all beneﬁ cial ownership reports on Forms 3, 4 and 5 ﬁ led by directors, offi  cers 
and beneﬁ cial owners of more than 10% of our equity as soon as reasonably practicable after such material is 
electronically ﬁ led with the Securities and Exchange Commission. We have adopted a Code of Business Conduct 
and Ethics for all of our employees, including our principal executive offi  cer and principal ﬁ nancial offi  cer. Copies of 
our Code of Business Conduct and Ethics are available on our web site.

1

Our web site (www.genie.com) and the information contained therein or incorporated therein are not incorporated 
into this Annual Report on Form 10-K or our other ﬁ lings with the Securities and Exchange Commission.

KEY EVENTS IN OUR HISTORY

Genie was incorporated in January 2011. References to us in the following discussion are made on a consolidated 
basis as if we existed and owned Genie Retail Energy and Genie Oil and Gas in all periods discussed.

In November 2004, IDT Corporation, or IDT, our former corporate parent, launched a retail energy provider 
business in New York State under the brand name IDT Energy.

In March 2008, we formed Israel Energy Initiatives, Ltd., which was awarded an exclusive Shale Oil Exploration and 
Production License in July 2008 by the Government of Israel.

In April 2008, IDT acquired E.G.L. Oil Shale, L.L.C., which was subsequently renamed American Shale Oil, LLC.

In March 2009, a subsidiary of TOTAL S.A., or Total, the world’s ﬁ fth largest integrated oil and gas company, 
acquired a 50% interest in AMSO, LLC in exchange for cash paid to us of $3.2 million and Total’s commitment to 
fund the majority of AMSO, LLC’s research, development and demonstration expenditures as well as certain other 
funding commitments.

In April 2013, the Government of Israel ﬁ nalized the award to our subsidiary, 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 initial term of the license  expires in April 2016.  Afek is taking the required steps to obtain an 
extension.

In December 2013, GRE acquired Dallas-based Diversegy, LLC, a retail energy advisory and brokerage company 
that serves commercial and industrial customers throughout the United States, and Epiq Energy, LLC (now IDT 
Energy Network, LLC), its network marketing channel.

In April 2014, Israel’s Northern District Planning and Building Committee issued a one year exploratory drilling 
permit to Afek. The permit authorized the company to drill up to ten exploratory wells within its exploratory license 
area.

In February 2015, Afek began drilling its ﬁ rst exploratory well in Northern Israel’s Golan Heights pursuant to its 
petroleum exploration license.

In October 2015, Afek conﬁ rmed the presence of hydrocarbons in its license area based on the data gathered from its 
exploratory drilling program.

Spin-Off  from IDT Corporation

We were formerly a subsidiary of IDT. On October 28, 2011, we were spun-off  by IDT and became an independent 
public company through a pro rata distribution of our common stock to IDT’s stockholders, which we refer to as 
the Spin-Off . As a result of the Spin-Off , each of IDT’s stockholders received: (i) one share of our Class A common 
stock for every share of IDT’s Class A common stock held of record on October 21, 2011, or the Record Date, and 
(ii) one share of our Class B common stock for every share of IDT’s Class B common stock held of record on the 
Record Date.

Exchange Off er and Issuance of Preferred Stock

On August 2, 2012, we initiated an off er to exchange up to 8.75 million outstanding shares of our Class B 
common stock for the same number of shares of a new series of preferred stock. On October 17, 2012, we issued 
1,604,591 shares of our newly designated Series 2012-A Preferred Stock, par value $0.01 per share, in exchange for 
an equal number of shares of Class B common stock tendered in the exchange off er.

In subsequent exchange off ers concluded in March 2013 and June 2014, we issued an aggregate of 718,108 shares of 
Series 2012-A Preferred Stock in exchange for an equal number of shares of Class B common stock tendered in the 
exchange off er.

2

RECENT DEVELOPMENTS

Afek

In February 2016, Israel’s Northern District Planning and Building Committee approved a two-year permit extension 
for Afek to continue its oil and gas exploratory drilling program. The original one-year permit would have expired in 
February 2016. Also, in February 2016, Afek initiated a well ﬂ ow test program within the previously drilled Nes 3 well.

Mongolia

In 2015, GOGAS halted exploration activities in Mongolia and sharpened its strategic focus on the opportunity at 
Afek. The regulatory environment in Mongolia remains diffi  cult, and the decline in the price of oil has reduced the 
attractiveness of the opportunity.

IEI

On September 2, 2014, the Jerusalem District Committee for Planning and Building declined to issue IEI a permit to 
build and operate a pilot drilling project. IEI had an exclusive Shale Oil Exploration and Production License awarded 
in 2008 by the Israeli Ministry of National Infrastructure that expired in July 2015. IEI continues to evaluate its 
options to determine the best course of action to move forward to exploit the abundant oil shale resource in Israel. 
Operations at IEI are currently on hold.

AMSO

On February 23, 2016, Total notiﬁ ed AMSO of its decision not to continue to fund AMSO, LLC. We are currently 
considering our options with respect to the future of this project. AMSO and Total are obligated to fund certain 
remediation and reclamation costs.

Dividends

We pay a quarterly dividend on both of our common and preferred stock. The aggregate dividends paid in the year 
ended December 31, 2015 on our Class A and Class B common stock (the “Common Stock”) was $3 million, as 
follows:

• 

• 

On March 31, 2015, we paid a quarterly Base Dividend of $0.06 per share on our Common Stock for the 
fourth quarter of 2014 to stockholders of record at the close of business on March 23, 2015.

On May 22, 2015, we paid a quarterly Base Dividend of $0.06 per share on our Common Stock for the 
ﬁ rst quarter of 2015 to stockholders of record at the close of business on May 15, 2015.

On August 6, 2015, the Company announced that its Board of Directors had suspended dividends on the Company’s 
common stock for the current time. However, on January 22, 2016, the Company announced that its Board of 
Directors approved resuming the quarterly dividend on our Common Stock, and on February 12, 2016, we paid a 
quarterly Dividend of $0.06 per share to stockholders of record as of the close of business on February 5, 2016.

The aggregate dividends paid in the year ended December 31, 2015 on our Preferred Stock was $1.5 million, as 
follows:

• 

• 

• 

On February 15, 2015, we paid a quarterly Base Dividend of $0.1594 per share on our Preferred Stock 
for the fourth quarter of 2014 to stockholders of record at the close of business on February 5, 2015 of 
our Preferred Stock.

On May 15, 2015, we paid a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for the 
ﬁ rst a quarter of 2015 to stockholders of record at the close of business on May 6, 2015 of our Preferred 
Stock.

On August 14, 2015, we paid a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for 
the second quarter of 2015 to stockholders of record at the close of business on August 6, 2015 of our 
Preferred Stock.

3

• 

On November 16, 2015, we paid a quarterly Base Dividend of $0.1594 per share on the Preferred Stock 
for the third quarter of 2015 to stockholders of record as of the close of business on November 4, 2015.

On February 16, 2016, we paid a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for the fourth 
quarter of 2015 to stockholders of record at the close of business on February 5, 2016 , in the aggregate amount of 
$0.4 million.

Genie Retail Energy

In November 2004, IDT launched a retail energy provider  business in New York State , which has grown its 
geographic footprint and customer base signiﬁ cantly while diversifying its service off erings. Today, GRE operates 
two active REP businesses which resell natural gas and electricity to residential and small business customers. IDT 
Energy operates in eight utility markets in New York, six utility territories in New Jersey, eight utility territories in 
Pennsylvania, four utility territories in Maryland and one utility territory in each of Washington, D.C. and Illinois. 
Residents Energy operates  in eight utility markets in New York, seven utility markets in Pennsylvania and ﬁ ve utility 
markets in New Jersey.

As discussed more fully below, on February 23, 2016, the New York Public Service Commission (PSC) issued an 
order  that sought to impose signiﬁ cant new restrictions on  REPs  operating in New York, including GRE. Depending 
on the ﬁ nal language of the order and the outcome of legal appeals, as well as our ﬁ nal response to the order with 
respect to our relationships with our New York customers, the order will likely have a substantial impact upon GRE’s 
operations in New York. As of December 31, 2015, New York represented 53% of GRE’s total meters served and 
44% of the total residential customer equivalents, or RCEs, of GRE’s customer base.

GRE REPs have applications pending to enter into additional utility service areas, primarily natural gas and dual 
meter territories, in Pennsylvania, Maryland, Washington, D.C. and Illinois. We  continue  to evaluate additional, 
deregulation-driven opportunities in other states.

GRE’s REP businesses, particularly sales of natural gas, are seasonal businesses. Approximately 64% and 59% of 
our natural gas revenues in the years ended December 31, 2015 and December 31, 2014, respectively were generated 
during the ﬁ rst quarter, when the demand for heating was highest. Although the demand for electricity is not as 
seasonal as natural gas, approximately 30% and 20% of total revenues from electricity sales were generated in the 
third quarter of 2015 and 2014, respectively.

GRE’s revenues represent 100% of our total consolidated revenues since our inception. In the year ended 
December 31, 2015, GRE generated revenues of $210 million comprised of $167 million from sales of electricity, 
$41 million from sales of natural gas, and other revenue of $2 million, as compared with revenues of $275 million 
in the year ended December 31, 2014 comprised of $214 million from the sales of electricity, $58 million from the 
sales of natural gas and other revenue of $3 million. Electricity sales have become a more signiﬁ cant portion of 
GRE’s business in recent years.  In addition, in the year ended December 31, 2015, GRE had income from operations 
of $13 million, as compared to income from operations of $4 million in the year ended December 31, 2014.

The weather has a signiﬁ cant impact on GRE’s operations. For example, unusually sustained cold weather in the ﬁ rst 
quarter of 2014 drove increased demand. Coupled with short reserves of natural gas in the wholesale markets and 
delivery constrictions beyond our control, this caused a signiﬁ cant increase in revenues and direct cost of revenues 
in the ﬁ rst quarter of 2014. In addition, many electricity generation plants are in fact natural gas ﬁ red. The winter’s 
“polar vortex” resulted in extraordinarily large spikes in the prices of wholesale electricity and natural gas in markets 
where GRE’s REPs and other retail providers purchase their supply.

Because of the resulting dramatic increases in wholesale electricity costs, the retail electricity prices that GRE’s 
REPs and many other variable rate electricity suppliers charged to their customers also increased sharply. These 
retail electricity price increases resulted in large numbers of complaints, regulatory actions, and calls  for legislation, 
regulation and litigation. GRE’s subsidiary, IDT Energy, also paid approximately $5 million in rebates to aff ected 
customers in the year ended December 31, 2014. These events adversely aff ected GRE’s REPs customer churn, gross 
margins and results of operations.

As discussed more fully below in Item 3 “Legal Proceedings” in this Annual Report, IDT Energy reached an 
agreement in principle on a settlement with the Pennsylvania Attorney General’s Offi  ce and the Acting Consumer 
Advocate terminating  litigation with no admission of liability or ﬁ nding of wrongdoing by IDT Energy. 

4

The settlement must be approved by the Pennsylvania Public Utility Commission , which is expected in the second  
quarter  of 2016.

In December 2013, GRE acquired Dallas-based Diversegy, LLC, or Diversegy, a retail energy advisory and 
brokerage company that serves commercial and industrial customers, and its network marketing channel, Epiq 
Energy, LLC, or Epiq, since renamed IDT Energy Network, or  IDTEN . Diversegy connects large commercial and 
industrial customers with its portfolio of competitive energy products provided by some of the industry’s leading 
energy suppliers. Diversegy evaluates alternative supply sources based on its customers’ usage patterns and risk 
proﬁ les in order to provide options that beneﬁ t their bottom lines. IDTEN provides independent representatives with 
the opportunity to build sales organizations and to proﬁ t from both residential and commercial energy. IDTEN off ers 
its direct marketing representatives the opportunity to earn commissions on energy supply based on the consumption 
of the customers they bring into the program.

During 2015, we worked to integrate Diversegy and IDTEN into our existing operations and platform. We 
restructured both organizations so that they are both based in our Newark headquarters. Neither company 
contributed materially to revenues in 2015, but we expect that Diversegy will contribute positive net income and that 
IDTEN will contribute to meter growth in 2016.

Industry Overview

GRE operates retail energy providers that  operate in states with deregulated retail energy markets. Like other 
REPs, GRE’s REPs purchase electricity and natural gas on the wholesale markets and resell the commodities to its 
customers, primarily homeowners, renters and small businesses. The incumbent local utilities continue to handle 
electricity and natural gas distribution, billing, and collections. A portion of the proceeds billed to GRE’s REPs 
customers for the commodity supply is remitted to the REPs.

GRE has no signiﬁ cant ﬁ xed assets and low levels of capital expenditure. Its direct cost  of revenues  is incurred 
to purchase electricity and natural gas in their respective wholesale markets. Selling, general and administrative 
expenses  are primarily related to customer acquisition, customer  retention, billing and purchase of receivables fees 
paid to the utilities, and program management.

Customers; Marketing

The services of GRE’s REPs,  IDT Energy and Residents Energy , are made available to customers under several 
categories of terms and conditions. The large majority of our current customer base is enrolled in variable rate 
programs, the only programs GRE’s REPs off ered until 2014, via automatically renewing or month-to-month 
agreements, which enable us to recover our wholesale costs for electricity and natural gas through adjustments to the 
rates charged to our customers. The frequency and degree of these rate adjustments are determined by GRE, and are 
not restricted by regulation.

Variable rate energy supply programs are available to all customers in all states served by GRE’s REPs. Likewise, 
Renewable (Green) energy supply options exist in all markets served by GRE’s REPs. Renewable (Green) Electricity 
supply is 100% matched with renewable energy certiﬁ cates that reﬂ ect the generation of electricity from sources like 
running water, wind, solar and biomass .

For our variable rate product, the amount we charge to our customers changes with our costs for the underlying 
commodity. During times of rising costs, the number of complaints made to our call center or to the state regulators 
may increase. We proactively seek to address customer concerns through rebates and incentives, as well as by 
providing accurate information and through communications with regulators.

In 2014,  we began off ering ﬁ xed electric rates  in select utility territories with rates guaranteed for up to one year. 
These off erings represent a small but growing portion  of  our business. GRE’s REPs ﬁ xed-rate off erings are currently 
available in seven utility service areas in Pennsylvania, three in New York, three in New Jersey, one in Maryland and 
one in Illinois. 

While GRE’s REPs variable rates are not regulated, they, like all GRE’s REP programs, are governed by their terms 
and conditions, which are accepted by all customers. GRE’s REPS are required to comply with various reporting 
requirements in order to maintain eligibility to operate as a REP. Certain jurisdictions require GRE’s REPs to 

5

publish its customer off ers with the applicable regulatory commission, or in the public domain, generally a website 
established for such purpose. 

The electricity and natural gas we sell are metered and delivered to customers by the local utilities. Consequently, 
we do not have a maintenance or service staff  for customer locations. The utilities also provide billing and collection 
services for the majority of our customers. For a small number of direct bill customers, we perform our own billing 
and collection. Additionally, GRE’s REPs’ receivables are generally purchased by the utilities in whose areas we 
operate for a percentage of their face value (as of December 31, 2015, approximately  2.0%) in exchange for the 
utility receiving a ﬁ rst priority lien in the customer receivable without recourse against the REP.

 GRE’s REP businesses market their energy services primarily through direct marketing methods, including 
door-to-door sales, outbound telemarketing, network marketing through IDTEN, direct mail and internet signup. 
As of December 31, 2015, GRE’s REPs serviced  392,000 meters (264,000  electric and 128,000  natural gas), as 
compared to 363,000 meters (234,000 electric and 129,000 natural gas) as of December 31, 2014.

GRE’s strategy is to acquire proﬁ table customers in low-risk markets, speciﬁ cally where the utilities have adopted 
a portfolio of REP-friendly, regulatory-driven programs. Key among these programs is purchase of receivables, or 
POR, programs, where utilities are contractually obligated to purchase customer receivables at a pre-determined 
ﬁ xed discount. Under POR programs, utilities off er consolidated billing, where the utilities have the responsibility 
for  billing the individual customer and the subsequent collection  of the remittances. Additionally, we target markets 
in which we can procure energy in an effi  cient and transparent manner. We seek to purchase wholesale energy where 
there is a real time market that reﬂ ects a fair price for the commodity for all participants. This  allows GRE to reﬂ ect 
a true market cost base and adjust  its rates to its variable rate customers taking into account its competitors who 
change their commodity prices at longer intervals.

Utilities in New York, Pennsylvania, Illinois, Washington, D.C. and Maryland off er POR programs, without recourse, 
that permit customers with past-due balances to remain in the POR and consolidated bill programs. However, 
utilities in New Jersey generally do not permit customers with past-due balances beyond 120 days to enroll or 
remain in their POR programs, which means that after a certain amount of time (determined based on the speciﬁ c 
commodity), the REP becomes responsible for the billing and collection of the commodity portion of the future 
invoices for its delinquent customers.

We also regularly monitor other deregulated or deregulating markets to determine if they are appropriate for 
entry, and may initiate the licensing process in a selected region to facilitate entry into the region contingent upon 
favorable deregulatory developments.

Acquisition and Management of Gas and Electric Supply

Since 2009, IDT Energy has been party to a Preferred Supplier Agreement with BP Energy Company, or BP . The 
agreement allows for purchases of electricity and natural gas for customers focused in areas where the utilities 
have POR programs. Under the arrangement, IDT Energy purchases electricity and natural gas at market rate plus 
a fee. IDT Energy’s obligations to BP are secured by a ﬁ rst security interest in deposits or receivables from utilities 
in connection with their purchase of IDT Energy’s customer’s receivables under the applicable POR program, and 
in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The agreement 
with BP has been amended to cover the territories in which we operate. The agreement was modiﬁ ed and extended 
on November 19, 2015, and is scheduled to terminate on November 30, 2019. IDT Energy’s ability to purchase 
electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the 
maintenance of certain covenants.

GRE is required to meet certain minimum green energy supply criteria in some of the markets in which it operates. 
We meet those thresholds by acquiring renewable energy certiﬁ cates, or  REC’s . In addition, GRE off ers green 
or other renewable energy products to its customers in several territories. GRE acquires green renewable energy 
conversion rights or attributes and REC’s to satisfy the load requirements for these customers.

As an owner of REPs, GRE does not own electrical power generation, transmission, or distribution facilities, 
or natural gas production, pipeline or distribution facilities. GRE’s REPs currently contract with Dominion 
Transmission, Inc., National Fuel Supply, Williams Gas Pipeline and Texas Eastern Transmission and others for 

6

natural gas pipeline, storage and transportation services, and utilizes the New York Independent System Operator, 
Inc., or NYISO, and PJM Interconnection, LLC, or PJM, for electric transmission and distribution. NYISO 
operates the high-voltage electric transmission network in New York State, and administers and monitors New 
York’s wholesale electricity markets. PJM is a regional transmission organization that coordinates the movement of 
wholesale electricity in all or parts of thirteen states (including New Jersey, Pennsylvania, Maryland and Illinois) and 
the District of Columbia.

For risk management purposes, GRE REPs utilize forward physical delivery contracts for a portion of their  purchases 
of electricity and natural gas, which are deﬁ ned as commodity derivative contracts. In addition, GRE’s REPs enter into 
put and call options as hedges against unfavorable ﬂ uctuations in market prices of electricity and natural gas.

The NYISO and PJM perform real-time load balancing for each of the electrical power grids in which GRE REPs 
operate. Similarly, load balancing is performed by the utilities or local distribution company, or LDC, for each of 
the natural gas markets in which GRE operates. Load balancing ensures that the amount of electricity and natural 
gas that GRE purchases is equal to the amount necessary to service its customers’ demands at any speciﬁ c point in 
time. GRE is charged or credited for balancing the electricity and natural gas purchased and sold for its account by 
its suppliers and the LDCs. GRE manages the diff erences between the actual electricity and natural gas demands of 
its customers and its bulk or block purchases by buying and selling in the spot market, and through monthly cash 
settlements and/or adjustments to future deliveries in accordance with the load balancing performed by utilities, 
LDCs, NYISO and PJM.

Diversegy and IDT Energy Network (IDTEN)

Diversegy, which we acquired in December 2013, operates as an energy broker and advisor to industrial, commercial 
and municipal customers across deregulated energy markets in the United States. Customers of all types and size 
have the ability to leverage Diversegy’s expertise and purchasing power as they evaluate their electricity and natural 
gas procurement plans. Diversegy allows us to enter more markets around the country as we are not limited to only 
the markets we operate as a REP, and we are not responsible for assuming the risk associated with procuring and 
managing the commodity.

IDTEN (formerly Epiq Energy, LLC), which we also acquired in December 2013, has built and operates a network 
marketing platform that sells GRE’s REPs’ and Diversegy’s services. IDTEN off ers an innovative direct sales 
opportunity to individuals who are seeking to proﬁ t from the deregulation of energy in the United States, focusing 
on residential and small to medium-sized businesses. IDTEN’s sales channel has the potential to reach customers 
our traditional sales channels of door-door marketing and outbound telemarketing has diffi  culty in reaching. During  
2015, IDTEN recruited active independent representatives in states where GRE operates REPs.

Competition

As an operator of REPs, GRE competes with the local utility companies in each of the markets where it provides 
services and with many other licensed REPs. In some markets, competitor REPs are affi  liated with local utilities. 
GRE also competes with several large vertically integrated energy companies. Some of these competitors are larger 
and better capitalized than GRE. Competition with the utilities and REPs exposes GRE to customer churn, especially 
since GRE’s residential customers generally do not sign long-term contracts.

REPs and utilities off ering ﬁ xed rate products or guaranteed pricing often are unable to change their sell rates off ered 
to customers  in response to volatility in the prices of the underlying commodities. In times of high commodity 
prices, REPs like GRE’s REPs that off er variable rate products, and reﬂ ect real-time commodity costs, may off er 
variable rates prices which are not competitive with ﬁ xed rate providers. Conversely, in a downward moving 
commodity cost environment, variable rate REPs like GRE’s REPs may beneﬁ t from the lag that utilities experience 
in reducing their sell rate to reﬂ ect the lower cost base in the commodity markets, and may reﬂ ect commodity costs 
decreases in their off erings and rates.

In the latter part of 2014, GRE began off ering a  ﬁ xed  rate plan for up to one year to electric customers in 
Pennsylvania, New Jersey and Illinois. This was expanded into New York and Maryland in 2015 and represents 
approximately 16% of the electric customer base.

7

Increasing our market share depends in part on our ability to persuade more customers to switch to GRE’s services 
than those that churn from us to other providers. Moreover, local utilities and some REPs may have certain 
advantages such as name recognition, ﬁ nancial strength and long-standing relationships with customers. Persuading 
potential customers to switch to GRE requires signiﬁ cant marketing and sales operations. If GRE is not successful 
in convincing customers to switch, our REP businesses, results of operations and ﬁ nancial condition will all be 
adversely aff ected.

Regulation

As of December 31, 2015, GRE’s REPs operate in eight utility territories in New York, six utility territories in New 
Jersey, eight utility territories in Pennsylvania, four utility territories in Maryland, one in Washington D.C. and one in 
Illinois. IDT Energy recently received regulatory approvals to enter nine new utility territories in Pennsylvania and 
one new territory covering Maryland and Washington D.C. Residents Energy recently received regulatory approval 
from the Public Utility Commission of Ohio to sell electricity and gas in the state of Ohio and from the Illinois 
Commerce Commission to sell electricity in the State of Illinois. The State of New York, the Commonwealth of 
Pennsylvania, the State of New Jersey, the State of Maryland, the State of Illinois, the District of Columbia, the State 
of Ohio, the federal government, and related public service/utility commissions, among others, establish the rules 
and regulations for our REP operations.

Like all operators of REPs, GRE is aff ected by the actions of governmental agencies, mostly on the state level, 
by the respective state Public Service/Utility Commissions, and other organizations (such as NYISO and PJM) 
and indirectly the Federal Energy Regulatory Commission, or FERC. Regulations applicable to electricity and 
natural gas have undergone substantial change over the past several years as a result of restructuring initiatives at 
both the state and federal levels. GRE’s REPs may be subject to new laws, orders or regulations or the revision or 
interpretation of existing laws, orders or regulations.

If GRE’s REPs enter territories outside of the utility regions within which they currently operate in New York, New 
Jersey, Pennsylvania, Maryland, Illinois and Washington D.C., or territories outside of these states, they would 
need to be licensed and would be subject to the rules and regulations of such states or municipalities and respective 
utilities.

As of December 31, 2015, Diversegy was licensed to serve as a broker of electricity in New Jersey, Pennsylvania, 
Maryland, the District of Columbia, Illinois, Ohio, Rhode Island, New Hampshire, Massachusetts and Delaware, 
and as a gas broker in New Jersey, Maryland, Ohio, Rhode Island and New Hampshire. IDTEN was licensed as an 
electricity broker in New Jersey, Illinois, Ohio, the District of Columbia, Maryland and Pennsylvania, and as a gas 
broker in New Jersey, Ohio, Maryland, Pennsylvania, New Hampshire and the District of Columbia. Both Diversegy 
and IDTEN serve as brokers in other states that do not require licenses.

Employees

As of March 1, 2016, GRE employed 145 full time employees, 68 of whom are located in the Jamestown, New 
York offi  ce, of which approximately 85% are affi  liated with our customer care center, 46 of whom are located in  our 
New Jersey offi  ce  and 31 of whom are located in the Florida and New York offi  ces performing customer acquisition 
and support.

Genie Oil and Gas, Inc.

Genie Oil and Gas (GOGAS) is an oil and gas exploration company. GOGAS currently holds our  interests in four 
development projects, two of which are currently inactive and another of which does not currently have a funding 
source for continued operations: (1) an 86.5% interest in Afek, which operates an exploration project in the southern 
portion of the Golan Heights in Northern Israel (2) an  88.4% interest in Genie Mongolia, Inc., an inactive oil 
shale exploration project in Central Mongolia, (3) a 98.3% interest in AMSO, which holds and manages a 41.3% 
interest in AMSO, LLC, an oil shale development project in Colorado, that is a joint venture with Total, S.A., and 
(4) an 86.1% interest in IEI, an inactive oil shale development project in Israel’s Shfela Basin.

The Genie Mongolia, AMSO, LLC and IEI projects are early stage oil shale projects. Oil shale is an organic-rich, 
ﬁ ne-grained sedimentary rock that contains signiﬁ cant amounts of kerogen (a solid mixture of organic chemical 

8

compounds) from which liquid hydrocarbons can be extracted. However, extracting oil and gas from oil shale is more 
complex than conventional oil and gas recovery and is more expensive. Rather than pumping it directly out of the 
ground in the form of liquid oil, the oil shale can be mined and then heated to a high temperature through a process 
called surface retorting, with the resultant liquid separated and collected. An alternative which we and others are 
researching and developing is in-situ retorting, which involves heating the oil shale to a temperature of approximately 
660°F while it is still underground, and then pumping the resulting liquid and/or gases to the surface. In-situ 
retorting is considered to be less environmentally invasive than surface retorting and may off er signiﬁ cant economic 
advantages.

Afek Oil and Gas Ltd.

In April 2013, the Government of Israel ﬁ nalized 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. Afek is in the process of 
submitting its work plan for the subsequent exploration phases and is taking the required steps to seek extension 
of the license, which is currently scheduled to expire in April 2016.  Afek has retained  oil and gas exploration 
professionals and has contracted with internationally recognized vendors to provide the services required for its 
exploration program . In 2013, Afek completed preliminary geophysical work including electromagnetic  surveys 
and the reprocessing of the 2D seismic data to characterize the subsurface prior to drilling exploration wells. Afek 
subsequently conducted initial  analysis of the acquired data internally and with outside  exploration experts. 

In early 2014, Afek submitted a permit application to the Northern District Planning and Building  Committee  to 
conduct an exploration drilling program to further characterize the resource in its license area. In July, the Northern 
District Planning and Building  Committee  voted to approve an up to  ten -well exploratory drilling program, and 
subsequently issued the requisite permits.

In October, 2014, the High Court of Justice in Israel issued an interim order to halt Afek’s drilling program until it 
could rule on a petition ﬁ led by the Israel Union for Environmental Defense and some local residents challenging the 
issuance of the drilling permit. In December 2014, the Court ruled against the petitioners, and lifted its interim order.

In February 2015, Afek began drilling its ﬁ rst exploratory well in Northern Israel’s Golan Heights. To date, Afek 
has completed drilling ﬁ ve wells. In addition, the initial phase of the ﬂ ow test program is underway which will test 
multiple target zones within one, or more, of the completed wells. The results of the exploration program to date are 
consistent with our original theory and demonstrate the existence of signiﬁ cant hydrocarbons in the basin, although 
there are still unknowns that will impact the commercial viability of the resource. The next step is to execute 
and analyze the results of ﬂ ow tests and other data to determine the nature of the hydrocarbons and the potential 
production methodology and associated costs of potential commercial development. We remain excited about the 
potential for this project and look forward to gathering more information to determine next steps and the future path. 
The volume of the resources and to what extent they may be extractable cannot yet be determined. The resources do 
not constitute proved, probable or possible reserves.

On February 1, 2016, Israel’s Northern District Planning and Building Committee approved a two-year permit 
extension for Afek to continue to conduct its up to ten-well oil and gas exploration program. The original permit 
was for a one-year period, which commenced in February 2015. This extension is expected to cover the remainder 
of Afek’s ongoing exploratory program in the area covered by its exploratory license issued by Israel’s National 
Infrastructure, Energy and Water Ministry.

Afek incurred exploration expenses of $6.6 million, $7.0 million and $4.0 million in the years ended December 31, 
2015, 2014 and 2013, respectively.

Genie Mongolia

In April 2013, Genie Mongolia and the Petroleum Authority of Mongolia entered into an exclusive oil shale 
development agreement to explore and evaluate the commercial potential of oil shale resources in a 34,470 square 
kilometer area in Central Mongolia. The ﬁ ve year agreement allows Genie Mongolia to explore, identify and 
characterize the oil shale resource in the exclusive survey area and to conduct a pilot test using in-situ technology 
on appropriate oil shale deposits. In September 2014, Genie Mongolia signed a prospecting agreement with the 
Petroleum Authority of Mongolia covering an additional 25,000 square kilometers in Central Mongolia. In light of 
the progress achieved by Afek in Northern Israel , we  suspended our operations in Mongolia.

9

Genie Mongolia maintains the rights to the acreage it has acquired, however, it has reduced its operating expenses 
and is looking to divest its assets in Mongolia.

Genie Mongolia incurred research and development expenses of $1.7 million, $2.7 million and $3.4 million in the 
years ended December 31, 2015, 2014 and 2013, respectively.

American Shale Oil Corporation

The U.S. Bureau of Land Management, or BLM, eff ective January 1, 2007, issued to EGL Resources a lease for 
research, development and demonstration, or RD&D Lease, in western Colorado, which it assigned to its affi  liate, 
E.G.L. Oil Shale, L.L.C. (or EGL). In April 2008, EGL was acquired by AMSO and IDT (and subsequently 
renamed AMSO, LLC)  in exchange for cash of $5.5 million, certain commitments for future funding of AMSO, 
LLC’s operations and a 1% override on AMSO, LLC’s future revenue. In March 2009, a subsidiary of TOTAL 
S.A.,  the world’s ﬁ fth largest integrated oil and gas company, acquired a 50% interest in AMSO, LLC in exchange 
for cash paid to us of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, 
development and demonstration  expenditures as well as certain other funding commitments. As a result of 
dilution resulting from Total  funding certain capital calls for AMSO, AMSO  currently holds a 41.3% interest in 
AMSO, LLC.

 According to reports from the United States Geological Service, or USGS, oil shale resources in the United 
States are estimated at over 4 trillion barrels; and based on management estimates, could potentially supply the 
U.S.’s demand for liquid fuel over the next 100 years. The majority of those deposits are found in the Green River 
Formation, which spans parts of Colorado, Utah and Wyoming, the Piceance Basin of Colorado, and the Uinta Basin 
of Utah and Colorado. Colorado’s Piceance Basin, where AMSO, LLC’s RD&D Lease is located , contains some of 
the richest oil shale resources in the world (as reported by the Department of Energy  and USGS sources).

 AMSO, LLC’s  RD&D Lease  covers an area of 160 acres. The RD&D Lease  had an initial  ten-year term  beginning 
on January 1, 2007 and provides for a ﬁ ve-year extension if AMSO, LLC can demonstrate that a process leading to 
the production of commercial quantities of shale oil is diligently being pursued. In November 2015, AMSO, LLC 
satisﬁ ed the extension criteria, and the RD&D Lease was extended eff ective on January 1, 2017. If AMSO, LLC 
can demonstrate the economic and environmental viability of its technology, it will have the opportunity to submit 
a one-time payment pursuant to the applicable regulations and convert its RD&D Lease to a commercial lease on 
5,120 acres, which overlap and are contiguous with the 160 acres covered by its RD&D Lease. AMSO, LLC’s plan is 
to target the  mining interval where the  illite -rich oil shale is located.

AMSO, LLC is utilizing a team of experienced experts in various ﬁ elds to conduct research, development and 
demonstration activities. AMSO, LLC constructed  surface oil and gas processing facilities and drilled pilot wells 
for its pilot test in Colorado. The pilot test is intended to conﬁ rm the accuracy of several of the key underlying 
assumptions of AMSO, LLC’s proposed in-situ heating and retorting process. In January 2012, AMSO, LLC 
conducted a fully integrated commissioning test of the above and below ground facilities to determine their readiness 
for pilot test operations. The underground electric heater did not perform to speciﬁ cations during the commissioning 
test. After modiﬁ cations were made, in March 2013 AMSO, LLC initiated start-up of the oil shale pilot test. After 
approximately two weeks of operation, the down-hole electric heater failed. Pilot operations were too short to allow 
conclusions to be drawn about the ultimate viability of AMSO, LLC’s technical approach. AMSO, LLC subsequently 
decided not to attempt to re-engineer the current downhole electrical heating system. Instead, it initiated a 
comprehensive review of alternative heating system solutions. From 2013 through 2015, AMSO, LLC continued its 
review of alternative heating system solutions. 

AMSO, LLC incurred $4.8 million, $7.8 million and $8.6 million for research and development in the years ended 
December 31, 2015, 2014 and 2013, respectively.

On February 23, 2016, Total notiﬁ ed AMSO of its decision not to continue to fund AMSO, LLC. We are currently 
considering our options with respect to the future of this project. AMSO and Total are obligated to fund certain 
remediation and reclamation costs. 

10

 Israel Energy Initiatives, Ltd.

IEI had an exclusive Shale Oil Exploration and Production License awarded in July 2008 by the Government of 
Israel. The license covered approximately 238 square kilometers in the south of the Shfela region in central Israel. 
Under the terms of the license, IEI was to conduct a geological appraisal study across the license area, characterize 
the resource and select a location for a pilot plant. The initial term of the license was for three years until July 2011. 
The license was extended until July 2015 when it expired.

IEI began its resource appraisal study in 2009, and completed the ﬁ eld work included in its study in 2011. The 
resource appraisal was comprised primarily of a drilling operation conducted in the license area. The resource 
appraisal plan included drilling and coring several wells to depths of approximately 600 meters, as well as well 
logging, analysis of core materials and other geochemical tests, water monitoring and hydrology tests, laboratory 
analyses of samples and other laboratory experiments. The results from the appraisal process, both from ﬁ eld tests 
and laboratory experiments, conﬁ rmed IEI’s expectations as to the attractiveness of the oil shale resource in the 
license area from the standpoint of richness, thickness and hydrology.

In June 2013, IEI submitted its application for the construction and operation of its oil shale pilot test facility to the 
Jerusalem District Building and Planning Committee. IEI was asked to provide supplements to the environmental 
impact assessment and a revised application was submitted in November, 2013. In September 2014, the Jerusalem 
District Building and Planning Committee voted against issuing the pilot plant building and construction permits.

IEI is evaluating whether and how to exploit the abundant oil shale resource in Israel in light of the Committee’s 
decision. Operations at IEI are currently suspended.

IEI incurred $0.2 million, $2.6 million and $3.7 million for research and development in the years ended 
December 31, 2015, 2014 and 2013, respectively.

Financing

We are  considering sales of equity interests in Afek  or  GOGAS to provide the necessary ﬁ nancing for their  
activities.

Competition

If GOGAS is successful in developing and producing commercial quantities of oil and gas from oil shale and other 
conventional and unconventional resources in an environmentally acceptable manner and receives all the necessary 
regulatory approvals, then, in the commercial production phases of operations, it will likely face competition from 
conventional and unconventional oil producers, other fossil fuels and other alternative energy providers in marketing 
and selling reﬁ ned products and natural gas. Many of the potential competitors, including national oil companies, 
are larger and have substantially greater resources to be able to withstand the volatility of the oil and gas market 
(including as to price, availability, reﬁ ning capacity and other factors).

Regulation

The RD&D Lease held  by AMSO, LLC covers an area of 160 acres. The RD&D Lease had an initial  ten-year 
term  beginning on January 1, 2007 and provides for a ﬁ ve-year extension if AMSO, LLC can demonstrate that a 
process leading to the production of commercial quantities of shale oil is diligently being pursued. In November 
2015, AMSO, LLC satisﬁ ed the extension criteria, and the RD&D Lease was extended eff ective on January 1, 
2017. If AMSO, LLC can demonstrate the economic and environmental viability of its technology, it will have the 
opportunity to submit a one-time payment pursuant to the applicable regulations and convert its RD&D Lease to a 
commercial lease on 5,120 acres, which overlap and are contiguous with the 160 acres covered by its RD&D Lease.

In order to execute these activities and milestones, AMSO, LLC must obtain the necessary permitting and comply 
with the various rules, regulations, and policies spanning multiple regulatory bodies and governmental agencies 
at various levels. In connection with the site characterization phase (which AMSO, LLC completed) and the pilot 
phase (which is ongoing), AMSO, LLC has been working to ensure compliance with rules, regulations, and policies 
of the BLM and the Department of Environmental Protection at the federal level, with the Colorado Division of 
Reclamation and Mining Service and the Air Pollution Control Division and the Water Control Division of the 

11

Colorado Department of Public Health and Environment at the state level, and with Rio Blanco County at the county 
level. In accordance with the technical and regulatory requirements of the RD&D Lease, in May 2009, AMSO, LLC 
submitted its in-situ Plan of Development to the BLM. In September 2009, the BLM approved AMSO, LLC’s Plan 
of Development, allowing AMSO, LLC to proceed with implementation, subject to compliance with Colorado’s 
permitting requirements (which AMSO, LLC has satisﬁ ed). AMSO, LLC continues to reﬁ ne its Plan of Development 
in conjunction with its ongoing operations, and the BLM has approved such modiﬁ cations.

Although AMSO, LLC has diligently worked to satisfy the regulatory requirements and challenges necessary for 
implementing the site characterization and initial pilot phase of the project, it is diffi  cult at this time to predict all of 
the compliance requirements that may be necessary throughout the life of the project.

 Afek holds an exclusive exploration license in Northern Israel’s Golan Heights, granted by Israel’s National 
Infrastructure, Energy and Water Ministry. Its up to ten -well exploratory drilling program was approved by the 
Northern District Planning and Building  Committee . The original oil and gas exploration license term expires in 
April 2016, and Afek is required to ﬁ le an application to extend the term with the Ministry of Infrastructure, Energy 
and Water. We believe the extension will be granted. In February 2015, Afek began drilling its ﬁ rst exploratory 
well. Contingent upon the results of its exploration program, Afek may seek to declare a commercial discovery and 
apply for a commercial production lease pursuant to Israeli law. The international community considers the Golan 
Heights an internationally disputed territory, and therefore political risk may aff ect our ability to execute our plan of 
operations. This may inﬂ uence local decision makers, as well as service providers necessary to our operations. On 
February 1, 2016, Israel’s Northern District Planning and Building  Committee approved a two-year permit extension 
for Afek to continue to conduct its up to ten-well oil and gas exploration program. The original permit was for a 
one-year period, which commenced in February 2015. This extension is expected to cover the remainder of Afek’s 
ongoing exploratory program in the  area covered by it exploratory license issued by Israel’s National Infrastructure, 
Energy and Water Ministry.

IEI had an exclusive Shale Oil Exploration and Production License that was extended until July 2015 when it 
expired. Operations at IEI are currently on hold as IEI evaluates whether and how to exploit the abundant oil shale 
resource in Israel.

Intellectual Property

We rely on a combination of patents, copyrights, trademarks, domain name registrations and trade secret laws 
in the United States and other jurisdictions and contractual restrictions to protect our intellectual property rights 
and our brand names. All of our employees sign conﬁ dentiality agreements. These agreements provide that the 
employee may not use or disclose our conﬁ dential information except as expressly permitted in connection with the 
performance of his or her duties for us, or in other limited circumstances. These agreements also state that, to the 
extent rights in any invention conceived of by the employee while employed by us do not vest in  us automatically by 
operation of law, the employee is required to assign his or her rights to us.

In connection with its RD&D process and related technologies, some patents are registered in the name of AMSO, 
LLC and some patents are registered in the name of Genie IP BV., a Dutch subsidiary of  our. AMSO, LLC owns ﬁ ve 
patents issued in the United States, eighteen patents issued abroad, four of which are jointly owned with Lawrence 
Livermore National Security, LLC (“LLNS”), as well as several pending applications, both in the United States and 
abroad. The issued or allowed patents include: patent No. 7,743,826 (US), which expires April 16, 2028; patent No. 
7,921,907 (US), which expires January 19, 2027; patent No. 8,162,043 (US), which expires January 19, 2027; patent 
No. 8,464,792 (US), which expires July 27, 2031; patent No. 8,899,331 (US), granted jointly to AMSO, LLC and 
LLNS, which expires December 29, 2030; patent registration No. 3668 (Mongolia) which expires December 25, 
2032; patent registration No. 32691 (Morocco), granted jointly to AMSO, LLC and LLNS on October 1, 2011, 
which expires September 30, 2029; patent registration No. 3565 (Mongolia), granted jointly to AMSO, LLC and 
LLNS on April 13, 2012, which expires March 29, 2031; patent No. 508 (Madagascar), granted on December 2, 
2011, which expires November 2, 2029; patent No. 606 (Madagascar), granted on April 18, 2014, which expires 
April 27, 2031; patent registration No. 3590 (Mongolia), granted on April 13, 2012, which expires April 22, 2031; 
patent No. 32765 (Morocco), granted on November 1, 2011, which expires November 2, 2029; patent registration 

12

No. 2,741,861 (Canada), granted on August 27, 2013, which expires November 2, 2029; patent registration No. 
2,738,920 (Canada), granted jointly to AMSO, LLC and LLNS, which expires September 30, 2029; and patent 
registration No. CN 102209835 (China), granted on April 16, 2014, which expires November 1, 2029; patent No. 
3895 (Mongolia), granted January 28, 2015, which expires March 29, 2031; patent No. 222732 (Israel), granted 
December 25, 2015, which expires March 29, 2031; Patent No. ZL201180031952.4 (China), granted on January 6, 
2016, which expires March 30, 2031; Patent No. 212486 (Israel), granted March 1, 2015, which expires Nov. 2, 
2029; Patent No. 216332 (Israel), granted April 1, 2015, which expires May 13, 2030; Patent No. 4102/EXT/2012 
(DR Congo), granted June 17, 2014, which expires April 26, 2032; Patent No. 34256 (Morocco), granted May 2, 
2013, which expires March 30, 2031; Patent No. 34231 (Morocco), granted May 2, 2013, which expires April 27, 
2031; and patent No. 9,127,541 (US), which expires November 2, 2029.

Genie IP B.V. owns Mongolian utility models 2050, 2052, 2053, 2054, 2055, and 2067 which all expire on 
January 23, 2019. The patents and utility models are directed to in-situ methods and systems for the extraction of 
oil from shale, integral to our technical and operational plans, as well as carbon sequestration in depleted oil shale 
deposits and down-hole heater technologies. AMSO has also been granted three trademarks in the United States in 
connection with its operations.

Genie IP B.V. has seven published international Patent Cooperation Treaty (PCT) applications, three published 
Israeli patent applications and additional unpublished patent applications. Some of these patent applications relate 
to methods and apparatus for oil extraction from shale, some of these patent applications relate to downstream 
processing of oil extracted from shale, and some of these patent applications relate to techniques for locating and 
extracting unconventional naturally-occurring oil from a tight formation.

Employees

GOGAS, excluding AMSO, employs 53 employees, while AMSO (including AMSO, LLC) employs 18 full-time 
employees, including a secondee assigned by Total. AMSO, IEI and Afek also retain the services of a number of 
professional consultants, including geologists, hydrologists, drilling and completions engineers, process engineers, 
environmental experts, permitting consultants, energy experts, legal, and land designation and acquisition 
consultants.

 Item 1A. Risk Factors.

RISK FACTORS

Our business, operating results or ﬁ nancial condition could be materially adversely aff ected by any of the following 
risks as well as the other risks highlighted elsewhere in this document, particularly the discussions about regulation, 
competition and intellectual property. The trading price of our Class B common stock and Series 2012-A Preferred 
Stock could decline due to any of these risks.

Risks Related to Genie Retail Energy

The REP business is highly competitive, and we may be forced to cut prices or incur additional costs.

GRE’s REP businesses face substantial competition both from the traditional incumbent utilities as well as from 
other REPs, including REP affi  liates of the incumbent utilities in speciﬁ c territories. As a result, we may be forced 
to reduce prices, incur increased costs or lose market share and cannot always pass along increases in commodity 
costs to customers. We compete on the basis of provision of services, customer service and price. Present or 
future competitors may have greater ﬁ nancial, technical or other resources which could put us at a disadvantage. 
Additionally, our experience has shown that utilities don’t change their sell rates off ered to customers immediately 
in response to increased prices for the underlying commodities. There is a time lag before utilities increase prices to 
reﬂ ect their increased costs and market prices for commodities.

REPs like IDT Energy that off er variable rate products, and reﬂ ect real-time commodity costs, may off er variable 
rates prices which are not competitive with other ﬁ xed rate providers.

13

Conversely, in a downward moving commodity cost environment, variable rate REPs like IDT Energy may beneﬁ t 
from the lag that utilities experience in reducing their sell rate to reﬂ ect the lower cost base in the commodity 
markets, and may reﬂ ect commodity costs decreases in their off erings and rates.

Increasing our market share depends in part on our ability to persuade more customers to switch to GRE’s services 
than those that churn from us to other providers or back to the local utility. Moreover, local utilities and some 
REPs may have certain advantages such as name recognition, ﬁ nancial strength and long-standing relationships 
with customers. Persuading potential customers to switch to GRE’s REPs requires signiﬁ cant marketing and sales 
operations. If GRE is not successful in convincing customers to switch, our REP businesses, results of operations 
and ﬁ nancial condition will all be adversely aff ected.

Our current strategy is based on current regulatory conditions and assumptions, which could change or prove to be 
incorrect.

Regulation over the electricity and natural gas markets has been in ﬂ ux at the state and federal levels. In particular, 
any changes adopted by the FERC, or changes in state or federal laws or regulations (including greenhouse gas laws) 
may aff ect the prices at which GRE purchases electricity or natural gas for its customers. While we endeavor to pass 
along increases in energy costs to our customers pursuant to our variable rate customer off erings, we may not always 
be able to do so due to competitive market forces and the risk of losing our customer base.

On February 23, 2016, the New York  PSC  issued an order  that sought to impose signiﬁ cant new restrictions 
on  REPs  operating in New York, including GRE. The restrictions described in the PSC’s order, which were  to 
become eff ective March 4, 2016, would require that all REPs’ electricity and natural gas off erings 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 off erings, 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 until a court hearing on April 14, 2016. GRE 
expects that the REP industry will take additional legal action in response to the order seeking a deﬁ nitive judicial 
review of the industry’s challenges to the PSC’s order.

 We are evaluating the potential impact of the PSC’s order on  our New York operations, while preparing to 
operate in compliance with any new requirements. Depending on the ﬁ nal language of the order and the 
outcome of legal appeals, as well as our ﬁ nal response to the order with respect to our relationships with our 
New York customers, the order will likely have a substantial impact upon GRE’s operations in New York. As 
of December 31, 2015, New York represented 53% of GRE’s total meters served and 44% of the total RCEs of 
GRE’s customer base.

In connection with the events described in the Risk Factor below  entitled “Unusual weather conditions may have 
signiﬁ cant direct and indirect impacts on GRE’s business and results of operations”, IDT Energy responded to 
formal and informal information requests from state utility commissions, state attorneys general, and state legislators 
related to the wholesale and retail electricity price increases in the winter of 2014. In addition, the Pennsylvania 
Attorney General’s Offi  ce and the Acting Consumer Advocate ﬁ led a Joint Complaint against IDT Energy with 
the Pennsylvania Public Utility Commission in connection with such events. Legislators and regulators may enact 
or modify laws or regulation to prevent the repetition of the price spikes discussed below  or address customer 
complaints that have come to light in connection with those events. Potential regulatory and/or legislative changes 
may impact our ability to use our established sales and marketing channels. Any changes in these factors, or any 
signiﬁ cant changes in industry development, could have an adverse eff ect on our revenues, proﬁ tability and growth 
or threaten the viability of our current business model.

14

Fixed Rate Products or Guaranteed Pricing Programs  could result in losses or decreased proﬁ ts if GRE fails to 
estimate commodity prices accurately.

REPs and utilities off ering ﬁ xed rate products or guaranteed pricing often are unable to change their sell rates off ered 
to customers in response to volatility in the prices of the underlying commodities. In times of high commodity 
prices, these ﬁ xed rate programs expose us to the risk that we will incur signiﬁ cant unforeseen costs in performing 
the contracts.

However, it is diffi  cult to predict future commodity costs. Any shortfalls resulting from the risks associated with 
ﬁ xed-price programs will reduce our working capital and proﬁ tability. Our inability to accurately estimate the cost of 
providing services under these programs could have an adverse eff ect on our proﬁ tability and cash ﬂ ows.

GRE’s growth depends on its ability to enter new markets.

New markets for our business are determined based on many factors, which include the regulatory environment, as 
well as GRE’s REP businesses ability to procure energy in an effi  cient and transparent manner. We seek to purchase 
wholesale energy where there is a real time market that reﬂ ects a fair price for the commodity for all participants. 
Once new markets are determined to be suitable for GRE’s REP businesses, we will expend substantial eff orts to 
obtain necessary licenses and will incur signiﬁ cant customer acquisition costs and there can be no assurance that 
we will be successful in new markets. Furthermore, there are regulatory diff erences between the markets that we 
currently operate in and new markets, including, but not limited to, exposure to credit risk, additional churn caused 
by tariff  requirements, rate-setting requirements and incremental billing costs. A failure to identify, become licensed 
in, and enter new territories may have a material negative impact on our growth, ﬁ nancial condition and results of 
operations.

Unfair business practices or other activities of REPs may adversely aff ect us.

Competitors in the highly competitive REP market have engaged in unfair business practices to sign up new 
customers. Competitors engaging in unfair business practices create an unfavorable impression about our industry on 
consumers,  regulators or political bodies. Such unfair practices by other companies can adversely aff ect our ability 
to grow or maintain our customer base. The successes, failures or other activities of various REPs within the markets 
that we serve may impact how we are perceived in the market. Further, such practices can lead to regulatory action, 
such as the recent New York PSC Order, that can negatively impact us and the industry.

Demand for REP services and consumption by customers are signiﬁ cantly related to weather conditions.

Typically, colder winters and hotter summers create higher demand and consumption for natural gas and electricity, 
respectively. Milder than normal winters and/or summers may reduce the demand for our energy services, thus 
negatively impacting our ﬁ nancial results.

Unusual weather conditions may have signiﬁ cant direct and indirect impacts on GRE’s business and results of 
operations.

A conﬂ uence of issues in January and February 2014 associated with the 2013-2014 winter season’s polar vortex 
resulted in extraordinarily large spikes in the prices of wholesale electricity and natural gas in markets where GRE 
and other retail providers purchase their supply. In some regions, wholesale prices increased brieﬂ y by factors of 
more than eight times. Because of dramatic increases in wholesale electricity costs, the retail electricity prices 
that GRE’s REPs and many other variable rate electricity suppliers charged to their customers increased sharply 
in January and February 2014. The unusually cold weather and resultant high energy costs also adversely aff ected 
GRE’s customer churn and customer acquisition eff orts. GRE responded by reducing its target margins in order to 
mitigate the severity of the commodity price increases on its customers and issued rebates to hard hit customers.

Repeats of the circumstances described above or similar circumstances could similarly harm margins and 
proﬁ tability in the future, and we could ﬁ nd it necessary to take similar or other actions that would have a negative 
impact on our ﬁ nancial condition and results of operations.

15

Because our variable pricing plan resulted in increased prices charged to customers, we experienced an increase in 
customer churn as utilities and ﬁ xed price REPs appeared to have more attractive pricing, although those increased 
churn levels  have peaked. A failure to mitigate  an increase in churn  could result in  decreases in meters served and 
revenues.

GRE has  a twelve-month guaranteed rate residential off ering in some utility territories, and  a new brand, Residents 
Energy, to focus on marketing and sales of guaranteed rate off erings. We will face greater commodity risk from 
guaranteed rate off erings, some of which we may not be able to eff ectively hedge.

The retail electricity price increases discussed above resulted in large numbers of customers ﬁ ling informal and 
formal complaints to state utility commissions, state attorneys general and state legislators. IDT Energy was served 
with several thousand formal and informal customer complaints to state utility commission and state attorneys 
general related to the winter retail price increases. IDT Energy has responded to each customer complaint it has 
received and attempted to resolve each complaining customer’s concerns. GRE’s REPs also paid approximately 
$5 million in rebates to aff ected customers in the year ended December 31, 2014. IDT Energy was not under any 
obligation to provide such rebates and did so in order to mitigate the impact of the price increases on its customers 
notwithstanding that the underlying cause of the price increase was beyond GRE’s control.

If certain REPs, however, are determined to have acted in a manner that was harmful to customers, the entire 
industry can suff er due to the reputational harm.

GRE is subject to litigation that may limit its operations.

In connection with the events described in the Risk Factor above entitled “Unusual weather conditions may have 
signiﬁ cant direct and indirect impacts on GRE’s business and results of operations”, IDT Energy has also been 
sued in separate putative class action suits in New York, New Jersey and Pennsylvania, partially related to the price 
increases during the winter of 2014. These matters are more fully discussed below in Item 3 “Legal Proceedings” in 
this Annual Report.

IDT Energy does not believe that it was at fault or acted in any way improperly with respect to the events of winter 
2014. However, we cannot predict the outcome of putative class action litigation or the impact on us of these or other 
actions, or whether there will be other impacts from the conditions that existed in winter 2014. Further, although we 
have taken action to insulate us and our customers from future similar events, we cannot assure that those actions 
will be eff ective and we will not be subject to class actions in the future.

Such class action lawsuits or other claims against us could have a material adverse impact on our ﬁ nancial condition, 
competitive position or results of operations.

Regulatory conditions can aff ect the amount of taxes and fees we need to pay and our pricing advantages.

We are subject to audits in various jurisdictions for various taxes, including income tax, utility excise tax and sales 
and use tax. Aggressive stances taken recently by regulators increase the likelihood of our having to pay additional 
taxes and fees in connection with these audits. In the future, we may seek to pass such charges along to our 
customers, which could have an adverse impact on our pricing advantages.

Commodity price volatility could have an adverse eff ect on our direct cost of revenues and our results of operations.

Volatility in the markets for certain commodities can have an adverse impact on our costs for the purchase of the 
electricity and natural gas that GRE sells to its customers. In our ﬁ xed or guaranteed price products, we cannot, 
and in our variable price products, due to customer or competitive factors, we may not always be able or choose 
to, pass along increases in costs to our customers. This would have an adverse impact on our margins and results 
of operations. Alternatively, volatility in pricing for GRE’s electricity and natural gas related to the cost of the 
underlying commodities can lead to increased customer churn. In times of high commodity costs, our variable 
pricing model and commodity purchasing approach can lead to competitive disadvantages as we must pass along all 
or some portion of our increased costs to our customers.

16

We face risks that are beyond our control due to our reliance on third parties and our general reliance on the 
electrical power and transmission infrastructure within the United States.

Our ability to provide energy delivery and commodity services depends on the operations and facilities of third 
parties, including, among others, BP, NYISO and PJM. Our reliance on the electrical power generation and 
transmission infrastructure within the United States makes us vulnerable to large-scale power blackouts. The loss 
of use or destruction of third party facilities that are used to generate or transmit electricity due to extreme weather 
conditions, breakdowns, war, acts of terrorism or other occurrences could greatly reduce our potential earnings and 
cash ﬂ ows.

The REP business, including our relationship with our suppliers, is dependent on access to capital and liquidity.

Our business involves entering into contracts to purchase large quantities of electricity and natural gas. Because of 
seasonal ﬂ uctuations, we are generally required to purchase electricity or natural gas in advance and ﬁ nance that 
purchase until we can recover such amounts from revenues. GRE has a Preferred Supplier Agreement with BP 
pursuant to which we purchase  electricity and natural gas at market rate plus a fee. The agreement was modiﬁ ed 
and extended on November 19, 2015, and is scheduled to terminate on November 30, 2019. In addition to other 
advantages of this agreement, we are only  required to post security with  BP. There can be no assurance that we will 
be able to maintain the required covenants, that BP will be able to maintain their required credit rating, or that the 
agreement will be renewed upon its expiration . In addition, the security requirements outside of the BP agreement 
may increase as we enter other markets. Diffi  culty in obtaining adequate credit and liquidity on commercially 
reasonable terms may adversely aff ect our business, prospects and ﬁ nancial conditions.

A revision to certain utility best practices and programs in which we participate and with which we comply could 
disrupt our operations and adversely aff ect our results and operations.

Certain retail access “best practices” and programs proposed and/or required by state regulators have been 
implemented by utilities in most of the service territories in which we operate. One such practice is participation 
in purchase of receivables, or POR, programs under which certain utilities purchase customer receivables for 
approximately 98 % of their face value in exchange for a ﬁ rst priority lien in the customer receivables without 
recourse against a REP. This program is a key to our control of bad debt risk in our REP business in New York and a 
similar program is important to us in Pennsylvania.

In New Jersey, customers who are delinquent in paying their invoices are no longer eligible to receive a consolidated 
utility invoice. A consolidated utility invoice is similar to a purchase of receivables program since the utility has 
the responsibility to bill the customer and collect the receivable. Instead, those customers are switched to a dual 
bill arrangement, whereby GRE’s REP businesses are responsible to bill and collect the commodity portion of 
the customers’ invoices. Once we invoice these customers under a dual bill arrangement, we have bad debt risk 
associated with that portion of our revenues. Economic conditions, the creditworthiness of our customers in New 
Jersey and our ability to collect from these customers, among other things, may impact our proﬁ tability.

The REP business depends on maintaining the licenses in the states we operate and any loss of those licenses would 
adversely aff ect our business, prospects and ﬁ nancial conditions.

GRE’s REP businesses require licenses from public utility commissions and other regulatory organizations to 
operate its business. Those agencies may impose various requirements to obtain or maintain licenses. Further, 
certain non-governmental organizations have been focusing on the REP industry and the treatment of customers by 
certain REPs. Any negative publicity regarding the REP industry in general and GRE in particular or any increase 
in customer complaints regarding GRE’s REP businesses could negatively aff ect our relationship with the various 
commissions and regulatory agencies and could negatively impact our ability to obtain new licenses to expand 
operations or maintain the licenses currently held. In the aftermath of the polar vortex, several regulatory bodies 
adopted more aggressive policies toward REPs, including the action against IDT Energy in Pennsylvania described 
elsewhere in this Annual Report. Any loss of our REP licenses would cause a negative impact on our results of 
operations, ﬁ nancial condition and cash ﬂ ow.

17

The REP business depends on the continuing eff orts of our management team and our personnel with strong industry 
or operational knowledge and our eff orts may be severely disrupted if we lose their services.

Our success depends on key members of our management team, the loss of whom could disrupt our business 
operation. Our business also requires a capable, well-trained workforce to operate eff ectively. There can be no 
assurance that we will be able to retain our qualiﬁ ed personnel, the loss of whom may adversely aff ect our business, 
prospects and ﬁ nancial conditions.

We could be harmed by network disruptions, security breaches, or other signiﬁ cant disruptions or failures of our IT 
infrastructure and related systems.

To be successful, we need to continue to have available a high capacity, reliable and secure network. We face the 
risk, as does any company, of a security breach, whether through cyber-attack, malware, computer viruses, sabotage, 
or other signiﬁ cant disruption of our IT infrastructure and related systems. We face a risk of a security breach or 
disruption from unauthorized access to our proprietary or classiﬁ ed information on our systems. Certain of our 
personnel operate in jurisdictions that could be a target for cyber-attacks. The secure maintenance and transmission 
of our information is a critical element of our operations. Our information technology and other systems that 
maintain and transmit our information, or those of service providers or business partners, may be compromised 
by a malicious third party penetration of our network security, or that of a third party service provider or business 
partner, or impacted by advertent or inadvertent actions or inactions by our employees, or those of a third party 
service provider or business partner. As a result, our information may be lost, disclosed, accessed or taken without 
our consent.

Although we make signiﬁ cant eff orts to maintain the security and integrity of these types of information and 
systems, there can be no assurance that our security eff orts and measures will be eff ective or that attempted security 
breaches or disruptions would not be successful or damaging, especially in light of the growing sophistication 
of cyber-attacks and intrusions. We may be unable to anticipate all potential types of attacks or intrusions or to 
implement adequate security barriers or other preventative measures.

Network disruptions, security breaches and other signiﬁ cant failures of the above-described systems could (i) disrupt 
the proper functioning of these networks and systems, and therefore, our operations; (ii) result in the unauthorized 
access to, and destruction, loss, theft, misappropriation or release of our proprietary, conﬁ dential, sensitive or 
otherwise valuable information, including trade secrets, which others could use to compete against us or for 
disruptive, destructive or otherwise harmful purposes and outcomes; (iii) require signiﬁ cant management attention 
or ﬁ nancial resources to remedy the damages that result or to change our systems; or (iv) result in a loss of business, 
damage our reputation or expose us to litigation. Any or all of which could have a negative impact on our results of 
operations, ﬁ nancial condition and cash ﬂ ows.

Our growth strategy depends, in part, on our acquiring complementary businesses and assets and expanding our 
existing operations, which we may be unable to do.

Our growth strategy is based, in part, on our ability to acquire businesses and assets that are complementary to 
our existing operations. We may also seek to acquire other businesses. The success of this acquisition strategy will 
depend, in part, on our ability to accomplish the following:

• 

• 

• 

• 

• 

identify suitable businesses or assets to buy;

complete the purchase of those businesses on terms acceptable to us;

complete the acquisition in the time frame we expect;

improve the results of operations of the businesses that we buy and successfully integrate their 
operations into our own; and

avoid or overcome any concerns expressed by regulators, including antitrust concerns.

There can be no assurance that we will be successful in pursuing any or all of these steps. Our failure to implement 
our acquisition strategy could have an adverse eff ect on other aspects of our business strategy and our business in 
general. We may not be able to ﬁ nd appropriate acquisition candidates, acquire those candidates that we ﬁ nd or 
integrate acquired businesses eff ectively or proﬁ tably.

18

Risks Related to Genie Oil and Gas

We have no current production of oil and gas and we may never have any.

We do not have any current production of oil and gas. We cannot assure you that we will produce or market shale oil 
or gas at all or in commercially proﬁ table quantities. Our ability to produce and market oil and gas may depend upon 
our ability to develop and operate our planned projects and facilities, which may be aff ected by events or conditions 
that impact the advancement, operation, cost or results of such projects or facilities, including:

• 

• 

• 

• 

• 

• 

• 

Energy commodity prices relative to production costs;

The occurrence of unforeseen technical diffi  culties;

The outcome of negotiations with potential partners, governmental agencies, regulatory bodies, 
suppliers, customers or others;

Changes to existing legislation or regulation governing our current or planned operations;

Our ability to obtain all the necessary permits to operate our facilities;

Changes in operating conditions and costs, including costs of third-party equipment or services such as 
drilling and processing and access to power sources; and

Security concerns or acts of terrorism that threaten or disrupt the safe operation of our  facilities.

In-situ technology for the extraction of oil and gas from oil shale is in its early stages of development and has 
not been deployed commercially at large scale. AMSO, LLC, Genie Mongolia and IEI may not be able to develop 
environmentally acceptable and economically viable technology in connection therewith.

Certain of our projects are predicated on the production and extraction of oil and gas from unconventional resources, 
deﬁ ned as any resource other than the traditional oil well. Our initial activity is in the in-situ production of oil and 
gas from oil shale, which is typically more costly and is less established technically than traditional oil and gas 
production and therefore, incurs a higher degree of technology risk. The greater cost increases the risk that we will 
not be proﬁ table given commodity price ﬂ uctuations, assuming we enter into commercial production.

Operating hazards and uninsured risks with respect to the oil and gas operations may have material adverse eff ects 
on our operations.

Our research, exploration and, if successful, development and production operations are subject to risks similar 
to those normally incident to the exploration for and the development and production of oil and gas, including 
blowouts, subsidence, uncontrollable ﬂ ows of oil, gas or well ﬂ uids, ﬁ res, pollution and other environmental and 
operating risks. These hazards could result in substantial losses due to injury or loss of life, severe damage to or 
destruction of property and equipment, pollution and other environmental damage and suspension of operations. 
While as a matter of practice we have insurance against some or all of these risks, such insurance may not cover 
the particular hazard and may not be suffi  cient to cover all losses. The occurrence of a signiﬁ cant event adversely 
aff ecting any of our operations could have a material adverse eff ect on us, could materially aff ect our continued 
operations and could expose us to material liability.

Genie Oil and Gas’ dependence on contractors, equipment and professional services that have limited availability 
could result in increased costs and possibly material delays in their respective work schedules.

Due to the lack of available technical resources with in-situ hydrocarbon production experience, the costs for our 
operations may be more expensive than planned or there could be delays in our operating plans. We are also more 
likely to incur delays in our drilling and operating schedule and we may not be able to meet our required work 
schedule. Similarly, some of the professional personnel we need for our planned operations are not available in 
the locations in which we operate or are not available on short notice for work in such location, and, therefore, we 
may need to use non-local  contractors for various projects. Any or all of the factors speciﬁ ed above may result in 
increased costs and delays in our work schedule.

19

Genie Oil and Gas will require substantial funds and will need to raise additional capital in the future.

We will need substantial funds to fully execute our research and development activities, and, if those activities are 
successful, we will need additional substantial funds to commence our anticipated commercial operations, if any. 
Failure to secure adequate funding could adversely aff ect our ability to advance our strategic plans as currently 
contemplated and require us to delay, scale back, or shut down our operations.

 On February 25, 2016, Total informed AMSO of its decision not to continue funding AMSO, LLC . As a result, we 
will need to ﬁ nd other sources of funding or otherwise risk shutting down AMSO, LLC’s operations.

Genie Oil and Gas’ success depends on the continuing eff orts of key personnel and certain strategic partners, and 
our eff orts may be severely disrupted if we lose their services.

Our future success depends, to a signiﬁ cant extent, on our ability to attract and retain qualiﬁ ed technical personnel, 
particularly those with expertise in the oil and gas industry and with in-situ hydrocarbon projects. There is 
substantial competition for qualiﬁ ed technical personnel, and there can be no assurance that we will be able to 
attract or retain our qualiﬁ ed technical personnel. Speciﬁ cally, we heavily rely on the services of  Harold Vinegar, 
Ph.D. at GOGAS, for his technical expertise, assistance in the development of our intellectual property and 
guidance on building out a pilot/commercial facility for potential commercial production. Speciﬁ cally, Dr. Vinegar 
has a long-term employment agreement with us through 2017. In addition, AMSO, LLC  was dependent on Total 
(as discussed more fully in Item 1 to Part I of this Annual Report) for technical expertise, ﬁ nancial support and 
guidance.

The unexpected loss of the services of one or more of these people and/or the technical expertise and support of 
certain partners, and the ability to ﬁ nd suitable replacements within a reasonable period of time thereafter, could 
have a material adverse eff ect on our operations.

There are uncertainties associated with AMSO, LLC’s lease, Afek licenses and Genie Mongolia’s agreements.

The RD&D Lease awarded by the BLM to EGL Resources and acquired by AMSO, LLC covers an area of 
160 acres. The lease had an initial ten-year term beginning on January 1, 2007 and provides for a ﬁ ve-year 
extension if AMSO can demonstrate that a process leading to the production of commercial quantities of shale 
oil is diligently being pursued. In November 2015, AMSO satisﬁ ed the extension criteria, and the RD&D Lease 
was extended eff ective on January 1, 2017.  The terms of the RD&D Lease do not guarantee that the BLM will 
grant a commercial lease. Further, there is signiﬁ cant environmental opposition to the commercial production 
of shale oil. Under current regulation, there are numerous conditions and requirements, the evaluation of which 
is subject to considerable discretion by the BLM, that AMSO, LLC will have to satisfy in order to convert its 
RD&D Lease into a commercial lease prior to the expiration of the RD&D Lease term. These conditions, which 
are more fully discussed in Item 1to Part I of this Annual Report, require AMSO, LLC to demonstrate, among 
other things, an economically viable commercial production process which will likely depend upon the prices 
of competing products, including conventional oil. There can be no assurance that AMSO, LLC will satisfy 
all of these conditions and requirements. Additionally, there have been proposed changes to the regulations 
governing commercial leases such as the lease into which AMSO, LLC intends to convert its RD&D Lease. The 
BLM indicated that it intends to issue new commercial oil shale regulations, which could aff ect the commercial 
royalty rates and the conversion criteria. Although the conversion terms of AMSO, LLC’s RD&D Lease provide 
for applicability of the existing regulatory scheme, we cannot assure you that we will not be subjected to more 
restrictive or less favorable regulations.

IEI had an exclusive Shale Oil Exploration and Production License that covers approximately 238 square kilometers 
in the south of the Shfela region in Israel. The license expired in July 2015. Although IEI may apply for a new 
license, there is no guarantee that a new license would be granted or that the license will not be successfully 
challenged by environmental or other opposition groups.

 In April 2013, the Government of Israel ﬁ nalized 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. Because of the dispute as 
to the status of the Golan Heights, operations under the license may initiate international criticism, sanctions and 

20

boycotts. The political uncertainties surrounding the Golan Heights may result in (i) questions regarding the validity 
of the license granted to Afek by the State of Israel,; (ii) disputed titles to any resources extracted; (iii) possible 
sanctions on Afek or  us or restrictions on sale of any extracted resources; and (iv) possible negative publicity or other 
adverse public activities or perceptions of Afek and  us. In addition, if the Golan Heights are returned to Syria by 
Israel, the continuation of Afek’s license would be in doubt.

In February 2016, Israel’s Northern District Planning and Building Committee approved a two-year permit extension 
for Afek to continue to conduct its up to ten-well oil and gas exploration program. The original permit was for a 
one-year period, which commenced in February 2015. This extension is expected to cover the remainder of Afek’s 
ongoing exploratory program in the southern portion of the area covered by it exploratory license issued by Israel’s 
National Infrastructure, Energy and Water Ministry. The original oil and gas exploration license term expires in 
April 2016, and Afek is required to ﬁ le an application to extend the term with the Ministry of National Infrastructure 
Energy and Water. We believe the extension will be granted.

In April 2013, Genie Mongolia and the Petroleum Authority of Mongolia entered into an exclusive oil shale 
development agreement to explore and evaluate the commercial potential of oil shale resources in a 34,470 square 
kilometer area in Central Mongolia. 

In September 2014, Genie Mongolia signed a prospecting agreement with the Petroleum Authority of Mongolia 
covering an additional 25,000 square kilometers in Central Mongolia. In light of the progress achieved by Afek in 
Northern Israel, we suspended our operations in Mongolia. 

Genie Oil and Gas is subject to regulatory, legal  and political risks that may limit its operations.

Our operations and potential earnings may be aff ected from time to time in varying degree by regulatory, legal and 
political factors, including laws and regulations related to environmental or energy security matters, including those 
addressing alternative and renewable energy sources and the risks of global climate change and legal challenges. 
Such laws and regulations continue to increase in both number and complexity and aff ect our operations with respect 
to, among other things:

• 

• 

• 

• 

• 

• 

• 

• 

The discharge of pollutants into the environment;

The handling, use, storage, transportation, disposal and cleanup of hazardous materials and hazardous 
and nonhazardous wastes;

The dismantlement, abandonment and restoration of our properties and facilities at the end of their 
useful lives;

Restrictions on exploration and production;

Loss of petroleum rights, including key leases, licenses or permits;

Tax or royalty increases, including retroactive claims;

Intellectual property challenges that would limit our ability to use our planned in-situ production 
technologies; and

Political instability, war or other conﬂ icts in areas where we operate.

For example, in March 2011, the Israeli Parliament passed a bill materially increasing the overall taxes, royalties and 
other fees due to the Israeli government from revenues derived by oil and natural gas producers. The Israeli Income 
Tax Ordinance was revised accordingly and the amount payable to the government from revenues derived by oil and 
natural gas producers increased from a maximum of 32% to 52%. This tax will only be imposed once a project has 
passed certain milestones set forth in the ordinance (when the proﬁ ts derived from a certain ﬁ eld have reached 150% 
of the original investment in that ﬁ eld).

21

Emerging markets are subject to greater risks than more developed markets, including signiﬁ cant legal, economic 
and political risks.

Mongolia does not possess as sophisticated and effi  cient business, regulatory, power and transportation 
infrastructures as generally exist in more developed market economies. Particularly, the legal system of Mongolia 
is less developed than those of more established jurisdictions, which may result in risks such as: the lack of 
eff ective legal redress in the courts; a higher degree of discretion on the part of governmental authorities; delays 
caused by the extensive bureaucracy; the lack of judicial or administrative guidance on interpreting applicable 
laws and regulations; inconsistencies or conﬂ icts between and within various laws, regulations, decrees, orders 
and resolutions; and relative inexperience of the judiciary and courts in such matters. As a result, there may be 
ambiguities, inconsistencies and anomalies in the agreements, licenses and title documents through which Genie 
Mongolia holds its interests in Mongolia, or the underlying legislation upon which those interests are based. Many 
laws have been enacted, but in many instances they are neither understood nor enforced and may be applied in an 
inconsistent, arbitrary or unfair manner.

AMSO, LLC’s RD&D Lease is subject to other third party lease interests.

There are other mineral leases which are collocated with AMSO, LLC’s lease interests, including the territory 
designated for AMSO, LLC’s commercial lease conversion. While some of these other leases are subject to special 
oil shale stipulations requiring the leaseholders to minimize potential impacts and prevent interference with oil 
shale development, others are not. Although AMSO, LLC works to coordinate drilling plans and operations with 
these collocated leaseholders to preserve the integrity of its resource and operations, we cannot guaranty that these 
collocated leases will not interfere with AMSO, LLC’s operations.

Regulation of greenhouse gas emissions could increase Genie Oil and Gas’ operational costs, cause delays and/or 
restrict our operations.

The production and processing of oil shale will result in some emission of greenhouse gases. International 
agreements and national or regional legislation and regulatory measures to limit greenhouse emissions are currently 
in various phases of discussion or implementation. The Kyoto Protocol and other actual or pending federal, state 
and local regulations envision a reduction of greenhouse gas emissions through market-based trading schemes. 
As a result of these and other potential environmental regulations, if our research and development activities are 
successful and we eventually begin commercial production, we can expect to incur additional capital, compliance, 
operating, maintenance and remediation costs. To the extent these costs are not ultimately reﬂ ected in the price of the 
products we sell, our operating results will be adversely aff ected.

The oil and gas industry is subject to the general inherent industry and economic risks.

The oil and gas business is fundamentally a commodity business. This means that potential future commercial 
operations and earnings may be signiﬁ cantly aff ected by changes in oil and gas prices and by changes in margins on 
gasoline, natural gas and other reﬁ ned products. For example, the recent worldwide decrease in oil prices would have 
a signiﬁ cant negative impact on potential future commercial operations.

We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to 
us, could cause us to lose signiﬁ cant rights and pay signiﬁ cant damage awards.

Our success  depends, among other things,  on our ability to use and develop our technology and know-how without 
infringing on the intellectual property rights of third parties. The validity and scope of claims relating to our 
technology involve complex scientiﬁ c, legal and factual questions and analysis. It is therefore diffi  cult to accurately 
predict whether or not a third party will assert that we are infringing on its intellectual property or whether it would 
prevail. Although we are not currently aware of any infringement or of any parties pursuing or intending to pursue 
infringement claims against us, we cannot assure you that we will not be subject to such claims in the future. Also, in 
many jurisdictions, patent applications remain conﬁ dential and are not published for some period after ﬁ ling. Thus, 
we may be unaware of other parties’ pending patent applications that relate to our processes. While at present we are 
unaware of competing patent applications, such applications could potentially surface.

22

The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal 
and administrative proceedings can be both costly and time consuming and may signiﬁ cantly divert the eff orts 
and resources of our technical and management personnel. An adverse determination in any such litigation or 
proceedings to which we may become a party could subject us to signiﬁ cant liability to third parties, require us 
to seek licenses from third parties, to pay ongoing royalties, to redesign our products, or subject us to injunctions 
prohibiting the manufacture and sale of our products or the use of our technologies.

Risk Related to Our Financial Condition and Reporting

We hold signiﬁ cant cash and cash equivalents, restricted cash — short-term, and certiﬁ cates of deposit that are 
subject to various market risks.

As of December 31, 2015, we had cash and cash equivalents, restricted cash — short-term, and certiﬁ cates of 
deposit of $58.5 million. As a result of various market risks, the value of these holdings could be materially and 
adversely aff ected.

In the past, we identiﬁ ed material weaknesses in our internal control over ﬁ nancial reporting  that could have 
impaired our ability to produce accurate and timely ﬁ nancial statements and potentially cause  investors and other 
users to lose conﬁ dence in our published ﬁ nancial data.

Maintaining eff ective internal control over ﬁ nancial reporting is necessary for us to produce reliable ﬁ nancial 
statements. In evaluating the eff ectiveness of our internal control over ﬁ nancial reporting as of December 31, 2013, 
management identiﬁ ed material weaknesses in  our internal control over ﬁ nancial reporting.

These material weaknesses were  successfully remediated in 2014. We  continue to work to improve our internal 
control process and diligently review our ﬁ nancial reporting controls and procedures. However, if our remedial 
measures prove to be insuffi  cient to address the material weaknesses, or if additional material weaknesses or 
signiﬁ cant deﬁ ciencies in our internal control over ﬁ nancial reporting are discovered or occur in the future, our 
consolidated ﬁ nancial statements may contain material misstatements and we could be required to restate our 
ﬁ nancial results.

Risks Related to Our Capital Structure

Holders of our Class B common stock and Series 2012-A Preferred Stock have signiﬁ cantly less voting power than 
holders of our Class A common stock.

Holders of our Class B common stock and Series 2012-A Preferred Stock are entitled to one-tenth of a vote per 
share on all matters on which our stockholders are entitled to vote, while holders of our Class A common stock are 
entitled to three votes per share. As a result, the ability of holders of our Class B common stock and Series 2012-A 
Preferred Stock to inﬂ uence our management is limited.

Holders of our Series 2012-A Preferred Stock are entitled to an annual dividend and such payments may have a 
negative impact on our  cash ﬂ ow.

Holders of our Series 2012-A Preferred Stock are entitled to receive an annual dividend, payable quarterly in cash. 
The payment of such dividend could have a negative impact on  our cash ﬂ ow and cash balances. If dividends on 
any shares of the Series 2012-A Preferred Stock are in arrears for six or more quarters, whether or not consecutive, 
holders of the Series 2012-A Preferred Stock shall have the right to elect two (2) additional directors to serve on our 
Board, and this could have a negative impact on the market price of our equity securities.

We are controlled by our principal stockholder, which limits the ability of other stockholders to aff ect our 
management.

Howard S. Jonas, our Chairman of the Board, has voting power over 6,915,034 shares of our common stock (which 
includes 1,574,326 shares of our Class A common stock, which are convertible into shares of our Class B common 
stock on a 1-for-1 basis, and 5,340,708 shares of our Class B common stock), representing approximately 73% of the 

23

combined voting power of our outstanding capital stock, as of March 10, 2016. Mr. Jonas is able to control matters 
requiring approval by our stockholders, including the election of all of the directors and the approval of signiﬁ cant 
corporate matters, including any merger, consolidation or sale of all or substantially all of our assets. As a result, the 
ability of any of our other stockholders to inﬂ uence our management is limited.

Item 1B. Unresolved Staff  Comments.

None.

Item 2. Properties.

Our headquarters are located at 520 Broad St., Newark, New Jersey.

IDT Energy’s Jamestown, New York offi  ces are located at 20 West Third Street where we lease approximately 10,000 
square feet of space. IDT Energy’s Florida offi  ce is located in Holiday, Florida where we lease approximately 4,350 
square feet.

AMSO, LLC’s operating offi  ce is in Riﬂ e, Colorado. AMSO, LLC is supported by AMSO and other  professionals 
based in our Newark, New Jersey offi  ce. AMSO, LLC rents approximately 2,450 square feet of offi  ce space and 
2,000 square feet of warehouse space in Riﬂ e under operating leases with ﬂ exible terms and conditions.

IEI and Afek operate out of IDT Corporation’s offi  ces in Jerusalem. In addition, Afek maintains a research laboratory 
located on the campus of Ben Gurion University in Be’er Sheva and Afek rents a warehouses in Bnei Yehuda, in the 
south part of the Golan.

Item 3. 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  ﬁ led 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 ﬁ led 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. IDT Energy believes that the claims in this lawsuit are without merit and 
intends to vigorously defend the action.

On June 20, 2014, the Pennsylvania Attorney General’s Offi  ce (“AG”) and the Acting Consumer Advocate (“OCA”) 
ﬁ led a Joint Complaint against IDT Energy, Inc. with the Pennsylvania Public Utility Commission (“PUC”). In the 
Joint Complaint, the AG and the OCA allege, among other things, various violations of Pennsylvania’s Unfair Trade 
Practices and Consumer Protection Law, the Telemarketing Registration Act and the Pennsylvania PUC’s regulations. 
IDT Energy has reached an agreement in principle on a settlement with the AG and the OCA to terminate the 
litigation with no admission of liability or ﬁ nding of wrongdoing by IDT Energy. On August 4, 2015, IDT Energy, 
the AG, and the OCA ﬁ led a Joint Petition to the Pennsylvania PUC seeking approval of the settlement terms. 
Under the settlement, if approved by the PUC, IDT Energy will agree to 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 agree to implement certain modiﬁ cations to its sales, marketing and customer service processes, along with 
additional compliance and reporting requirements. The settlement must be approved by the Pennsylvania PUC, 
which is expected in the second  quarter  of 2016.

On July 2, 2014, named plaintiff , Louis McLaughlin, ﬁ led a putative class-action lawsuit against IDT Energy, Inc. 
in the United States District Court for the Eastern District of New York, contending that he and other class members 
were injured as a result of IDT Energy’s allegedly unlawful sales and marketing practices. The named plaintiff  ﬁ led 
the suit on behalf of himself and two subclasses: all IDT Energy customers who were charged a variable rate for 
their energy from July 2, 2008, and all IDT Energy customers who participated in IDT Energy’s rebate program from 

24

July 2, 2008. On December 19, 2014, IDT Energy ﬁ led a motion to dismiss the complaint. On December 9, 2015, 
the Court denied IDT Energy’s motion to dismiss without prejudice so as to allow McLaughlin to ﬁ le an amended 
complaint. On January 22, 2016, the named plaintiff  ﬁ led 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. Subsequently, on February 22, 2016, IDT Energy moved to dismiss the 
amended complaint. The named plaintiff ’s opposition papers to the motion to dismiss are due on March 18, 2016 
and IDT Energy’s reply is due on April 11, 2016. In the meantime, the parties are engaged in limited discovery. IDT 
Energy believes that the claims in the amended complaint are without merit and intends to vigorously defend the 
action.

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  ﬁ led 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. On November 6, 2014, the Court denied IDT Energy’s motion to dismiss the complaint. The parties are 
currently engaged in discovery. IDT Energy believes that the claims in this lawsuit are without merit and intends to 
vigorously defend the action.

In addition to the above,  we 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,  we do not expect any of those legal proceedings to 
have a material adverse eff ect on  our results of operations, cash ﬂ ows or ﬁ nancial condition.

Item 4. Mine Safety Disclosures.

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 
Equity Securities.

PRICE RANGE OF COMMON STOCK

Our Class B common stock trades on the New York Stock Exchange under the symbol “GNE”.

The table below sets forth the high and low sales prices for our Class B Common Stock as reported by the NYSE for 
the ﬁ scal periods indicated which represents the only ﬁ scal periods our Class B Common Stock has been trading on 
the NYSE.

High

Low

Fiscal year ended December 31, 2014

First Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  11.74 $ 
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  10.28 $ 
8.75 $ 
Third Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
7.33 $ 
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

Fiscal year ended December 31, 2015

8.06 $ 
First Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  14.25 $ 
Third Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  11.40 $ 
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  14.97 $ 

9.20
6.76
6.60
6.01

5.33
7.85
8.06
8.00

On March 10, 2016, there were 174  holders of record of our Class B common stock and  one holder  of record of 
our Class A common stock. All shares of Class A common stock are beneﬁ cially owned by Howard Jonas. These 
numbers do not include the number of persons whose shares are in nominee or in “street name” accounts through 
brokers. On March 14, 2016, the last sales price reported on the New York Stock Exchange for the Class B common 
stock was $ 7.86 per share.

25

PRICE RANGE OF PREFERRED STOCK

The Series 2012-A Preferred Stock is listed and traded on the NYSE under the symbol “GNEPRA”. Trading began 
on the NYSE on October 24, 2012.

The table below sets forth the high and low sales prices for our Series 2012-A Preferred Stock as reported by the 
NYSE for the ﬁ scal periods indicated which represents the only ﬁ scal periods our Series 2012-A Preferred Stock has 
been trading on the NYSE.

Fiscal year ended December 31, 2014

First Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Third Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

Fiscal year ended December 31, 2015

First Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Third Quarter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

High

Low

8.43 $ 
8.37
7.87
7.43

7.25 $ 
7.50
7.12
7.92

7.90
7.25
7.09
5.63

6.27
6.80
6.35
6.10

On March 10, 2016, there were 4 holders of record of our Series 2012-A Preferred Stock. These numbers do not 
include the number of persons whose shares are in nominee or in “street name” accounts through brokers. On 
March 14, 2016, the last sales price reported on the New York Stock Exchange for the Series 2012-A Preferred Stock 
was $7.34  per share.

Additional information regarding dividends required by this item is incorporated by reference from the 
Management’s Discussion and Analysis section in Item 7 to Part II and Note 9 to the Consolidated Financial 
Statements in Item 8 to Part II of this Annual Report.

The information required by Item 201(d) of Regulation S-K will be contained in our Proxy Statement for our Annual 
Stockholders Meeting, which we will ﬁ le with the Securities and Exchange Commission within 120 days after 
December 31, 2015, and which is incorporated by reference herein.

Performance Graph of Stock

The line graph below compares the cumulative total stockholder return on our Class B common stock and our 
Series 2012-A Preferred Stock with the cumulative total return of the New York Stock Exchange Composite Index 
and the Standard & Poor’s Integrated Oil & Gas Index for the period beginning October 26, 2011 and ending 
December 31, 2015. The graph and table assume that $100 was invested on October 26, 2011 (the ﬁ rst day of trading 
for the Class B common stock) and on October 24, 2012 with respect to the Series 2012-A Preferred Stock (the 
ﬁ rst day of trading for the Series 2012-A Preferred stock) with the cumulative total return of the NYSE Composite 
Index and the S&P Integrated Oil & Gas Index, and that all dividends were reinvested. Cumulative total stockholder 
returns for our Class B common stock, Series 2012-A Preferred Stock, NYSE Composite Index and the S&P 
Integrated Oil & Gas Index are based on our ﬁ scal year.

26

COMPARISON OF 50 MONTH CUMULATIVE TOTAL RETURN*
Among Genie Energy Ltd., the NYSE Composite Index 
and the S&P Integrated Oil & Gas Index

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0

1 0/2 6/1 1

1 2/1 1

3/1 2

6/1 2

1 0/1 2

1 2/1 2

3/1 3

6/1 3

9/1 3

1 2/1 3

3/1 4

6/1 4

9/1 4

1 2/1 4

3/1 5

6/1 5

9/1 5

1 2/1 5

Genie Energy Ltd.

NYSE Composite

Genie Energy Ltd.Series 2012 - A Preferred

S&P Integrated Oil & Gas

*$100 invested on 10/26/11 in stock or 9/30/11 in index, including reinvestment of dividends.
Fiscal year ending December 31.

Copyright© 2016 S&P, a division of McGraw Hill Financial. All rights reserved.

10/26/11

12/11

3/12

6/12

10/12

12/12

3/13

6/13

9/13

12/13

3/14

6/14

9/14

12/14

3/15

6/15

9/15

12/15

Genie Energy Ltd. . . . 

100.00

92.79 113.52

91.86

81.55

84.52 110.24

108.93

116.66

121.55 118.69

93.69

83.69

74.23

96.27 127.44 100.18

135.72

Genie Energy Ltd.
Series 2012 – 
A Preferred . . . . . 

100.00

93.75 107.61

110.44

113.18

116.96 115.52 114.78

110.38

98.97 111.83 117.44 112.48

131.60

NYSE Composite . . . . 

100.00

110.77 122.34 117.23

124.50

128.48 139.46

141.31

149.27

162.24 165.23 173.46

170.05

173.20 175.18 174.83 159.55

166.11

S&P Integrated 

Oil & Gas. . . . . . . 

100.00

117.94 121.17 117.65

124.26

120.54 129.19

131.33

131.37

146.49 142.55 152.30

142.48

136.63 127.19 124.16 108.64

117.69

Issuer Purchases of Equity Securities

The following table provides information with respect to purchases by us of our shares during the fourth quarter of 
the year ended December 31, 2015.

Total Number 
of Shares 
Purchased

Average 
Price 
per Share

October 1 – 31, 2015 . . . . . . . . . . . . . . . . . . 
November 1 – 30, 2015 . . . . . . . . . . . . . . . . 
December 1 – 31, 2015(2)  . . . . . . . . . . . . . . 
Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

— $ 
— $ 
480 $ 
480 $ 

—
—
11.07
11.07

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)
6,896,669
6,896,669
6,896,669

(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 7 million shares of our Class B common stock.

27

(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 6. Selected Financial Data.

The selected consolidated ﬁ nancial data presented below as of December 31, 2015, 2014 and 2013, and for each 
of the three years then ended, has been derived from our Consolidated Financial Statements included elsewhere 
in this Form 10-K, which have been audited by BDO USA, LLP, independent registered public accounting ﬁ rm. 
The selected consolidated ﬁ nancial data presented below as of December 31, 2012 and 2011, and for the year 
ended December 31, 2012 and the ﬁ ve months ended December 31, 2011 has been derived from our Consolidated 
Financial Statements, which have been audited by Grant Thornton LLP, independent registered public accounting 
ﬁ rm. The selected consolidated ﬁ nancial data presented below for the ﬁ scal year ended July 31, 2011 has been 
derived from our Consolidated Financial Statements, which have been audited by Zwick and Banyai, PLLC, 
independent registered public accounting ﬁ rm. The selected consolidated ﬁ nancial data presented below for the 
ﬁ ve months ended December 31, 2010 is unaudited. The selected consolidated ﬁ nancial data should be read in 
conjunction with the Consolidated Financial Statements and the Notes thereto and other ﬁ nancial information 
appearing elsewhere in this Annual Report.

Year ended 
December 31, 
2014

Year ended 
December 31, 
2013

Year ended 
December 31, 
2012

Five Months 
ended 
December 31, 
2011

Fiscal year 
ended 
July 31, 
2011

Five Months 
ended 
December 31, 
2010 
(Unaudited)

Year ended 
December 31, 
2015

(in thousands, except 
per share data)
STATEMENT OF 
OPERATIONS 
DATA: 
Revenues . . . . . . . . . $ 
Net (loss) income  . .
(Loss) earnings per 
common share – 
basic . . . . . . . . . .
(Loss) earnings per 
common share – 
diluted . . . . . . . . .

210,109
(8,636)

$ 

275,031
(27,407)

$ 

279,174
(5,341)

$ 

229,459
(2,535)

$ 

76,783
(268)

$  196,018
(2,555)

$ 

74,877
916

(0.40)

(1.31)

(0.36)

(0.17)

0.04

0.08

0.09

(0.40)

(1.31)

(0.36)

(0.17)

0.04

0.07

0.08

Cash dividend 
declared per 
common share . . .

0.12

0.06

—

0.133

0.05

—

—

(in thousands)
BALANCE SHEET DATA:
Total assets  . . . . . . . . . . . . .  $ 
Long-term obligations . . . . . 

December 31, 
2015

December 31, 
2014

December 31, 
2013

December 31, 
2012

December 31, 
2011

155,815
2,000

$ 

152,928
—

$ 

158,843
—

$ 

150,306
—

$ 

150,194
—

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Annual Report 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 diff er materially from the results 
projected in any forward-looking statement. In addition to the factors speciﬁ cally noted in the forward-looking 
statements, other important factors, risks and uncertainties that could result in those diff erences include, but are 
not limited to, those discussed under Item 1A to Part I “Risk Factors” in this Annual Report. The forward-looking 
statements are made as of the date of this Annual Report, and we assume no obligation to update the forward-looking 
statements, or to update the reasons why actual results could diff er 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 

28

from time to time in our reports ﬁ led with the Securities and Exchange Commission pursuant to the Securities Act of 
1933 and the Securities Exchange Act of 1934, including our reports on Forms 10-Q and 8-K.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes 
thereto included in Item 8 of this Annual Report.

OVERVIEW

We own 99.3% of our subsidiary, GEIC, which owns 100% of GRE and 92% of GOGAS. Our principal businesses 
consist of:

• 

GRE operates REPs, including IDT Energy and Residents Energy, 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 is an oil and gas exploration company that consists of:

• 

• 

an 86.5% interest in Afek, which operates an exploration project in the Golan Heights in Northern 
Israel, and

early stage projects including (1) an 88.4% interest in Genie Mongolia, an oil shale exploration 
project in Central Mongolia, which is inactive (2) a 98.3% interest in AMSO, which holds and 
manages a 41.3% interest in AMSO, LLC, an oil shale development project in Colorado, and 
(3) an 86.1% interest in IEI, an oil shale development project in Israel, which is inactive.

GRE has outstanding deferred stock units granted to offi  cers and employees that represent an interest of 3.9% of the 
equity of GRE.

As part of our ongoing business development eff orts, we continuously seek out new opportunities, which may 
include complementary operations or businesses that reﬂ ect horizontal or vertical expansion from our current 
operations. Some of these potential opportunities are considered brieﬂ y and others are examined in further depth. In 
particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses, and additional 
energy exploration projects to diversify our GOGAS unit’s operations, among geographies, technologies and 
resources.

Genie Retail Energy

GRE operates REPs that resell electricity and natural gas to residential and small business customers in New York, 
New Jersey, Pennsylvania, Maryland, Washington, D.C. and  Illinois. GRE’s revenues represented 100% of our 
consolidated revenues in the years ended December 31, 2015, 2014 and 2013.

The positive diff erence between the net sales price of electricity and natural gas sold to its customers and the sum of 
the cost of its electricity and natural gas supplies, transmission and ancillary services is GRE’s gross proﬁ t margin.

GRE’s direct cost of revenues consists primarily of natural gas and electricity purchased for resale. As of 
November 19, 2015, IDT Energy and certain of its affi  liates entered into an Amended and Restated Preferred 
Supplier Agreement with BP pursuant to which  IDT Energy purchases electricity and natural gas at a market 
rate plus a fee. IDT Energy remits a monthly payment for its purchases and related fees. Any outstanding, unpaid 
balances accrue interest until paid. IDT Energy’s obligations to BP are secured by a ﬁ rst security interest in deposits 
or receivables from utilities in connection with their purchase of IDT Energy’s customers’ receivables, and in 
any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The agreement’s 
termination date is November 30, 2019, except either party may terminate the agreement on November 30, 2018 by 
giving the other party notice by May 31, 2018. IDT Energy’s ability to purchase electricity and natural gas under this 
agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants.

As an operator of REPs, GRE does not own electrical power generation, transmission, or distribution facilities, 
or natural gas production, pipeline or distribution facilities. Instead, GRE’s REPs contract with various pipeline 
and distribution companies for natural gas pipeline, storage and transportation services, and utilizes NYISO and 
PJM for electric transmission and distribution. GRE’s direct cost of revenues include scheduling costs, ISO fees, 

29

pipeline costs and utility service charges for the purchase of these services. At December 31, 2015, GRE REPs were 
members of ISO New England, although GRE has not commenced operations in this territory yet. GRE expects to 
commence operations in this territory in 2016.

For risk management purposes, GRE utilizes put and call options and swaps as hedges against unfavorable 
ﬂ uctuations in market prices of electricity and natural gas and to reduce exposure from price ﬂ uctuations. The put 
and call options and swaps are recorded at fair value as a current asset or liability and any changes in fair value are 
recorded in direct cost of revenues. The impact of these options and swaps on direct cost of revenues is relatively 
small in comparison to GRE’s purchases of gas and electricity for resale.

The NYISO and PJM perform real-time load balancing for each of the electrical power grids in which GRE REPs 
operate. Similarly, the utility or the LDC performs load balancing for each of the natural gas markets in which GRE 
REPs operate. Load balancing ensures that the amount of electricity and natural gas that GRE REPs purchase is 
equal to the amount necessary to service its REP customers’ demands at any speciﬁ c point in time. GRE manages 
the diff erences between the actual electricity and natural gas demands of its customers and its bulk or block 
purchases by buying and selling in the spot market, and through monthly cash settlements and/or adjustments to 
futures deliveries in accordance with the load balancing performed by utilities, LDCs, NYISO and PJM. Suppliers 
and the LDC’s charge or credit GRE for balancing the electricity and natural gas purchased and sold for its account.

The local utilities generally meter and deliver electricity and natural gas to GRE’s REP customers. The local utilities 
provide billing and collection services on GRE’s behalf for most of GRE’s customers. GRE receives the proceeds 
less the utility’s POR fees and in some cases less fees for billing and other ancillary services.

Volatility in the electricity and natural gas markets aff ects the wholesale cost of the electricity and natural gas that 
GRE REPs sell to customers. GRE may not always choose to pass along increases in costs to its customers for 
various reasons including competitive pressures and to protect overall customer satisfaction. This can adversely 
aff ect GRE’s gross margins and results of operations. Alternatively, increases in GRE’s rates charged to REP 
customers may lead to increased customer churn.

GRE’s selling expense consists primarily of sales commissions paid to independent agents and marketing 
costs, which are the primary costs associated with the acquisition of customers. General and administrative 
expense includes compensation, beneﬁ ts, utility fees for billing and collection, professional fees, rent and other 
administrative costs.

Seasonality and Weather

The weather and the seasons, among other things, aff ect GRE’s revenues. Weather conditions have a signiﬁ cant 
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 eff ect. Natural gas revenues typically increase in the ﬁ rst quarter due 
to increased heating demands and electricity revenues typically increase in the third quarter due to increased air 
conditioning use. Approximately 64% and 59% of GRE’s natural gas revenues for the relevant years were generated 
in the ﬁ rst quarter of 2015 and 2014, 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 30% and 20% of GRE’s electricity revenues for the relevant years were generated in the third quarter 
of 2015 and 2014, respectively. As described below, because of dramatic increases in wholesale electricity prices in 
January and February 2014, the retail electricity prices that GRE and many other variable rate electricity suppliers 
charged to their customers also increased sharply. As a result, approximately 45% of GRE’s electricity revenues in 
2014 were generated in the ﬁ rst quarter of 2014.

Concentration of Customers and Associated Credit Risk

GRE reduces its REP customer credit risk by participating in purchase of receivable programs for a majority of its 
receivables. In addition to providing billing and collection services, utility companies purchase GRE’s receivables 
and assume all credit risk without recourse to GRE. GRE’s primary credit risk is therefore nonpayment by the 
utility companies. Certain of the utility companies represent signiﬁ cant portions of our consolidated revenues and 
consolidated gross trade accounts receivable balance and such concentrations increase our risk associated with 
nonpayment by those utility companies.

30

The following table summarizes the percentage of consolidated revenues from customers by utility company that 
equal or exceed 10% of consolidated revenues in the period (no other single utility company accounted for more 
than 10% of consolidated revenues in these periods):

Con Edison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Grid USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Penn Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Penelec  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

na – less than 10% of consolidated revenue in the period

Year ended December 31,
2014

2015 

2013

23%
12%
na
na

23%
na
10%
na

25%
10%
11%
10%

The following table summarizes the percentage of consolidated gross trade accounts receivable by utility company 
that equal or exceed 10% of consolidated gross trade accounts receivable at December 31, 2015 and 2014 (no 
other single utility company accounted for 10% or greater of our consolidated gross trade accounts receivable at 
December 31, 2015 or 2014):

December 31
Con Edison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2015

2014

22%

25%

Winter 2014 Price Volatility and Customer Complaints

A conﬂ uence of issues in January and February 2014 associated with that winter’s polar vortex that were outside 
the ability of REPs to control, resulted in extraordinarily large spikes in the prices of wholesale electricity and 
natural gas in markets where GRE and other retail providers purchase their supply. These issues included sustained, 
extremely cold weather in much of GRE’s service area, short reserves of natural gas in the wholesale markets, 
delivery constrictions and unusually volatile commodity trading in the ﬁ nancial markets. Because of dramatic 
increases in wholesale electricity prices, the retail electricity prices that GRE and many other variable rate electricity 
suppliers charged to their customers also increased sharply in January and February 2014. These retail electricity 
price increases resulted in large numbers of customers ﬁ ling informal and formal complaints to state utility 
commissions, state attorneys general, and state legislators. IDT Energy was served with several thousand formal 
and informal customer complaints to state utility commissions and state attorneys general related to the retail price 
increases. IDT Energy has responded to each customer complaint it has received and attempted to resolve each 
complaining customer’s concerns. GRE also paid approximately $5 million in rebates to aff ected customers in the 
year ended December 31, 2014. GRE was under no obligation to provide such rebates, but did so in order to mitigate 
the impact of the price increases on its customers notwithstanding that the underlying cause of the price increase was 
beyond GRE’s control.

IDT Energy also received, and in most instances, responded to, formal and informal information requests from 
state utility commissions, state attorneys general, and state legislators related to the wholesale and retail electricity 
price increases in the winter of 2014. In addition, the Pennsylvania Attorney General’s Offi  ce and the Acting 
Consumer Advocate ﬁ led a Joint Complaint against IDT Energy with the Pennsylvania Public Utility Commission 
in connection with such events. On August 4, 2015, IDT Energy, the Attorney General’s Offi  ce, and the Acting 
Consumer Advocate ﬁ led a Joint Petition to the Pennsylvania Public Utility Commission seeking approval of their 
proposed settlement terms. IDT Energy has also been sued in separate putative class action suits in New York, New 
Jersey and Pennsylvania, partially related to the price increases during the winter of 2014. These matters are more 
fully discussed in Item 3 to Part I “Legal Proceedings” in this Annual Report.

IDT Energy does not believe that it was at fault or acted in any way improperly with respect to the events of winter 
2014. However, we cannot predict the outcome of the regulatory or putative class action litigation or the impact on 
us of these or other actions, or whether there will be other impacts from the conditions that existed in winter 2014. 
As noted above, IDT Energy is a party to a Joint Petition to the Pennsylvania Public Utility Commission seeking 
approval of proposed terms to settle the Pennsylvania regulatory matter.

31

New York Public Service Commission’s Order 

On February 23, 2016, the New York  PSC  issued an order  that sought to impose signiﬁ cant new restrictions on  REPs  
operating in New York, including GRE. The restrictions described in the PSC’s order, which  were to become eff ective 
March 4, 2016, would require that all REPs’ electricity and natural gas off erings 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 off erings, 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 until a court hearing on April 14, 2016. GRE 
expects that the REP industry will take additional legal action in response to the order seeking a deﬁ nitive judicial 
review of the industry’s challenges to the PSC’s order.

We are evaluating the potential impact of the PSC’s order on our New York operations while preparing to operate 
in compliance with any new requirements. Depending on the ﬁ nal language of the order and the outcome of legal 
appeals, as well as our ﬁ nal response to the order with respect to our relationships with our New York customers, the 
order will likely have a substantial impact upon GRE’s operations in New York. As of December 31, 2015, New York 
represented 53% of GRE’s total meters served and 44% of the total RCEs of GRE’s customer base.

Afek Oil and Gas, Ltd.

In April 2013, the Government of Israel ﬁ nalized 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. Afek is in the process of 
submitting its work plan for the subsequent exploration phases and is taking the required steps to seek  extension 
of the license, which is currently scheduled to  expire  in April 2016. Afek has retained oil and gas exploration 
professionals and has contracted with internationally recognized vendors to provide the services required for its 
exploration program. In 2013, Afek completed preliminary geophysical work including electromagnetic survey 
and the reprocessing of 2D seismic data to characterize the subsurface prior to drilling exploration wells. Afek 
subsequently conducted initial analysis of the acquired data internally and with outside exploration experts. 

In early 2014, Afek submitted a permit application to the Northern District Planning and Building Committee to 
conduct an exploration drilling program to further characterize the resource in its license area. In July, the Northern 
District Planning and Building Committee voted to approve an up to ten-well exploratory drilling program, and 
subsequently issued the requisite permits.

In October, 2014, the High Court of Justice in Israel issued an interim order to halt Afek’s drilling program until it 
could rule on a petition ﬁ led by the Israel Union for Environmental Defense and some local residents challenging the 
issuance of the drilling permit. In December 2014, the Court ruled against the petitioners, and lifted its interim order.

 In February 2015, Afek began drilling its ﬁ rst exploratory well in Northern Israel’s Golan Heights. To date, Afek 
has completed drilling ﬁ ve wells. In addition, the initial phase of the ﬂ ow test program is underway which will test 
multiple target zones within one, or more, of the completed wells. The next step is to execute and analyze the results 
of ﬂ ow tests and other data to determine the nature of the hydrocarbons and the potential production methodology 
and associated costs of potential commercial development. The volume of the resources and to what extent they may 
be extractable cannot yet be determined. The resources do not constitute proved, probable or possible reserves.

On February 1, 2016, Israel’s Northern District Planning and Building Committee approved a two-year permit 
extension for Afek to continue to conduct its up to ten-well oil and gas exploration program. The original permit 
was for a one-year period, which commenced in February 2015. This extension is expected to cover the remainder 
of Afek’s ongoing exploratory program in the area covered by its exploratory license issued by Israel’s National 
Infrastructure, Energy and Water Ministry. 

Genie Mongolia

In April 2013, Genie Mongolia and the Petroleum Authority of Mongolia entered into an exclusive oil shale 
development agreement to explore and evaluate the commercial potential of oil shale resources in a 34,470 square 
kilometer area in Central Mongolia. The ﬁ ve year agreement allows Genie Mongolia to explore, identify and 

32

characterize the oil shale resource in the exclusive survey area and to conduct a pilot test using in-situ technology 
on appropriate oil shale deposits. In September 2014, Genie Mongolia signed a prospecting agreement with the 
Petroleum Authority of Mongolia covering an additional 25,000 square kilometers in Central Mongolia. In light of 
the progress achieved by Afek in Northern Israel , we  suspended our operations in Mongolia.

Investment in American Shale Oil, LLC

AMSO, LLC holds an RD&D Lease awarded by the BLM that covers an area of 160 acres in western Colorado. The 
RD&D Lease had an initial  ten-year  term that began on January 1, 2007 and provides for a ﬁ ve-year extension if 
AMSO can demonstrate that a process leading to the production of commercial quantities of shale oil is diligently 
being pursued. In November 2015, AMSO satisﬁ ed the extension criteria, and the RD&D Lease was extended 
eff ective on January 1, 2017. If AMSO, LLC can demonstrate the economic and environmental viability of its 
technology, it will have the opportunity to submit a one-time payment pursuant to the applicable regulations and 
convert its RD&D Lease to a commercial lease on 5,120 acres, which overlap and are contiguous with the 160 acres 
covered by its RD&D Lease.

Except as set forth below, AMSO was responsible for funding 20% of the initial $50 million of AMSO, LLC’s 
approved expenditures, and is responsible for funding 35% of the approved expenditures between $50 million and 
$100 million, and 40% of the costs of the one-time payment for conversion of AMSO, LLC’s RD&D Lease to a 
commercial lease, in the event AMSO, LLC’s application for conversion is approved, with the remaining amounts of 
such expenditures to be funded by Total. All other expenditures are to be borne in proportion to equity ownership. 
The percentages for expenditures are subject to adjustment in connection with certain changes in the equity 
ownership of AMSO LLC. As of December 31, 2015, the cumulative contributions of AMSO and Total to AMSO, 
LLC were $82.9 million.

AMSO has the right to decide at each capital call whether or not to fund AMSO, LLC, and will make a 
determination at each such time. AMSO did not fund the capital calls for any quarter from the fourth quarter of 
2013 through the second quarter of 2015. AMSO funded an aggregate of $0.3 million from the third quarter of 2015 
through the ﬁ rst quarter of 2016, which was 28% of its share of the capital calls. In the period from January 2014 
through January 2016, Total funded an aggregate of $4.6 million for AMSO’s share of the capital calls that AMSO 
did not fund. Because of AMSO’s decisions not to fund all of its share of AMSO, LLC’s expenditures, AMSO’s 
ownership interest in AMSO, LLC was reduced to 41.3% and Total’s ownership interest increased to 58.7%. In 
addition, AMSO’s share of future funding of AMSO, LLC up to a cumulative $100 million was reduced to 28.9% 
and Total’s share increased to 71.1%.

The agreements with Total provide for varying consequences for AMSO’s failure to fund its share at diff erent stages 
of the project, including dilution of AMSO’s interest in AMSO, LLC or paying interest to Total for expenditures they 
fund on behalf of AMSO. Either Total or AMSO may terminate its obligations to make capital contributions and 
withdraw as a member of AMSO, LLC. Even if AMSO were to withdraw its interest in AMSO, LLC, it will remain 
liable for its share of expenditures for safety and environmental reclamation related to events occurring prior to its 
withdrawal.

On February 23, 2016, Total notiﬁ ed AMSO of its decision not to continue to fund AMSO, LLC. We are currently 
considering our options with respect to the future of this project. AMSO and Total are obligated to fund certain 
remediation and reclamation costs. We estimate that our share of such costs would be in the range of nil to 
$2.0 million.

We account for our ownership interest in AMSO, LLC using the equity method since we have the ability to exercise 
signiﬁ cant inﬂ uence over its operating and ﬁ nancial matters, although we do not control AMSO, LLC. AMSO, LLC 
is a variable interest entity, however, we have determined that we are not the primary beneﬁ ciary. AMSO’s allocated 
share of the net loss of AMSO, LLC is included in “Equity in the net loss of AMSO, LLC” in the accompanying 
consolidated statements of operations. In part because of AMSO’s decision not to fund all of its share of AMSO, 
LLC’s expenditures, AMSO, LLC allocates its net loss beginning January 2014 as follows: $12.1 million of losses 
were allocated to Total, then it allocates any remaining losses proportionately such that over time AMSO and Total’s 
capital accounts as a percentage of AMSO, LLC’s total capital will equal their ownership interests.

33

Israel Energy Initiatives, Ltd.

IEI had an exclusive Shale Oil Exploration and Production License awarded in July 2008 by the Government of 
Israel. The license covered approximately 238 square kilometers in the south of the Shfela region in Central Israel. 
Under the terms of the license, IEI was to conduct a geological appraisal study across the license area, characterize 
the resource and select a location for a pilot plant. The initial term of the license was for three years until July 2011. 
The license was extended until July 2015 when it expired. IEI submitted its application for the construction and 
operation of its oil shale pilot test facility to the Jerusalem District Committee for Planning and Building, and on 
September 2, 2014, the Committee declined to issue IEI a permit to build and operate a pilot drilling project. IEI is 
evaluating whether and how to exploit the abundant oil shale resource in Israel in light of the Committee’s decision. 
Operations at IEI are currently suspended.

CRITICAL ACCOUNTING POLICIES

Our ﬁ nancial statements and accompanying notes are prepared in accordance with accounting principles generally 
accepted in the United States of America, or U.S. GAAP. The preparation of ﬁ nancial statements requires management 
to make estimates and assumptions that aff ect the reported amounts of assets, liabilities, revenue 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 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 diff er from these estimates under diff erent assumptions or conditions. See Note 1 to the Consolidated Financial 
Statements in this Annual Report for a complete discussion of our signiﬁ cant accounting policies.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses that result from the inability or unwillingness 
of our customers to make required payments. The allowance for doubtful accounts was $0.2 million at December 31, 
2015 and 2014. Our allowance is determined based on known troubled accounts, historical experience and 
other currently available evidence. Our estimates of recoverability of customer accounts may change due to new 
developments, changes in assumptions or changes in our strategy, which may impact our allowance for doubtful 
accounts balance. We continually assess the likelihood of potential amounts or ranges of recoverability and adjust 
our allowance accordingly, however, actual collections and write-off s of trade accounts receivable may materially 
diff er from our estimates.

Goodwill

Our goodwill balance of $3.7 million at December 31, 2015 and 2014 was allocated to our GRE segment. IDT 
Energy is the reporting unit for our goodwill impairment tests. Goodwill is not amortized since it is deemed to have 
an indeﬁ nite life. It is reviewed annually (or more frequently under various conditions) for impairment using a fair 
value approach. The goodwill impairment assessment involves estimating the fair value of the reporting unit and 
comparing it to its carrying amount, which is known as Step 1. If the carrying value of the reporting unit exceeds 
its estimated fair value, Step 2 is performed to determine if an impairment of goodwill is required. We estimate the 
fair value of our reporting units using discounted cash ﬂ ow methodologies, as well as considering third party market 
value indicators. Goodwill impairment is measured by the excess of the carrying amount of the reporting unit’s 
goodwill over its implied fair value. We have the option to perform a qualitative assessment to determine whether it 
is necessary to perform the two-step quantitative goodwill impairment test. However, we may elect to perform the 
two-step quantitative goodwill impairment test even if no indications of a potential impairment exist.

IDT Energy’s estimated fair value substantially exceeded its carrying value in Step 1 of our annual impairment tests 
for the years ended December 31, 2015, 2014 and 2013, therefore it was not necessary to perform Step 2 for these 
tests. In addition, we do not believe IDT Energy is currently at risk of failing Step 1. In the year ended December 31, 
2014, we determined that an impairment of the goodwill from the acquisitions of Diversegy and  IDTEN  was 
required. We recorded goodwill impairment of $3.6 million, which reduced the carrying amount of the goodwill 
related to Diversegy and IDTEN to zero. Calculating the fair value of the reporting unit, and allocating the estimated 
fair value to all of the tangible assets, intangible assets and liabilities, requires signiﬁ cant estimates and assumptions 

34

by management. Should our estimates or assumptions regarding the fair value of IDT Energy prove to be incorrect, 
we may be required to record impairments to our goodwill in future periods and such impairments could be material.

Oil and Gas Accounting

We account for our oil and gas activities under the successful eff orts 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. At 
December 31, 2015, our capitalized exploration costs — unproved oil and gas property were $26.9 million. 
Unproved properties are assessed for impairment, and if considered impaired, are charged to expense when such 
impairment is deemed to have occurred. The assessment of unproved properties for impairment requires signiﬁ cant 
estimates and assumptions by management. Should our estimates or assumptions regarding the recoverability of the 
unproved properties prove to be incorrect, we may be required to record impairments to our unproved properties in 
future periods and such impairments could be material.

Income Taxes

Our current and deferred income taxes and associated valuation allowance are impacted by events and transactions 
arising in the normal course of business as well as in connection with special and non-routine items. Assessment of 
the appropriate amount and classiﬁ cation of income taxes is dependent on several factors, including estimates of the 
timing and realization of deferred income tax assets, the results of Internal Revenue Service audits of our federal 
income tax returns, and changes in tax laws or regulations.

The valuation allowance on our deferred income tax assets was $38.4 million and $27.7 million at December 31, 
2015 and 2014, respectively. Subsequent to the Spin-Off , we initiated a tax strategy that enables us to currently 
deduct losses from our foreign subsidiaries against our proﬁ table U.S. operations. Because of this strategy, the 
decrease in pre-tax earnings of GRE in 2012, and our current projections, we concluded that we no longer met the 
criteria of more likely than not in order to utilize our deferred federal income tax assets in the foreseeable future.

We use a two-step approach for recognizing and measuring tax beneﬁ ts taken or expected to be taken in a tax return. 
We determine whether it is more-likely-than-not that, a tax position will be sustained upon examination, including 
resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating 
whether a tax position has met the more-likely-than-not recognition threshold, we presume that the appropriate 
taxing authority that has full knowledge of all relevant information will examine the position. Tax positions that meet 
the more-likely-than-not recognition threshold are measured to determine the amount of tax beneﬁ t to recognize 
in the ﬁ nancial statements. The tax position is measured at the largest amount of beneﬁ t that is greater than 
50 percent likely of being realized upon ultimate settlement. Diff erences between tax positions taken in a tax return 
and amounts recognized in the ﬁ nancial statements will generally result in one or more of the following: an increase 
in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax 
asset, or an increase in a deferred tax liability. We review and adjust our liability for unrecognized tax beneﬁ ts based 
on our best estimate and judgment given the facts, circumstances and information available at each reporting date. To 
the extent that the outcome of these tax positions is diff erent from the amounts recorded, such diff erences may aff ect 
income tax expense and actual tax payments.

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED

In May 2014, the Financial Accounting Standards Board, or 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, 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 
will adopt this standard on January 1, 2018. Entities have the option of using either a full retrospective or modiﬁ ed 
retrospective approach for the adoption of the standard. We are evaluating the impact that the standard will have on 
our consolidated ﬁ nancial statements.

In July 2015, the FASB issued an Accounting Standards Update, or ASU, that simpliﬁ es the subsequent measurement 
of inventory. The amendments in this ASU do not apply to inventory that is measured using last-in, ﬁ rst-out or the 

35

retail inventory method. The ASU changes the measurement of inventory to the lower of cost and net realizable 
value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably 
predictable costs of completion, disposal and transportation. We measure GRE’s natural gas inventory at weighted 
average cost. We will adopt the amendments in this ASU on January 1, 2017. We are evaluating the impact that the 
ASU will have on our consolidated ﬁ nancial statements.

In January 2016, the FASB issued an ASU to provide more information about recognition, measurement, 
presentation and disclosure of ﬁ nancial 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) ﬁ nancial assets and 
ﬁ nancial liabilities will be presented separately by measurement category and form of ﬁ nancial asset on the balance sheet 
or the notes to the ﬁ nancial 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 classiﬁ ed 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 qualiﬁ es for this practicability exception. We will adopt the amendments in this ASU on 
January 1, 2018. We are evaluating the impact that the ASU will have on our consolidated ﬁ nancial 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 classiﬁ ed as either ﬁ nance or operating, with 
classiﬁ cation aff ecting the pattern of expense recognition in the income statement. We will adopt the new standard 
on January 1, 2019. A modiﬁ ed 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 ﬁ nancial 
statements, with certain practical expedients available. We are evaluating the impact that the new standard will have 
on our consolidated ﬁ nancial 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.

Year Ended December 31, 2015 compared to Year Ended December 31, 2014

Genie Retail Energy Segment

(in millions)
Year ended December 31,
Revenues:

Electricity . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total revenues . . . . . . . . . . . . . . . . . . . . . . . 
Direct cost of revenues . . . . . . . . . . . . . . . . 
Gross proﬁt . . . . . . . . . . . . . . . . . . . . . . . 
Selling, general and administrative . . . . . . . 
Bad debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Goodwill impairment . . . . . . . . . . . . . . . . . 
Adjustment to estimated contingent 

payments . . . . . . . . . . . . . . . . . . . . . . . . . 
Income from operations  . . . . . . . . . . . . . . .  $ 

2015

2014

$

%

Change

214.5 $ 
57.9
2.6
275.0
223.1
51.9
44.7
0.3
3.6

(0.2)
3.5 $ 

(47.2)
(17.1)
(0.6)
(64.9)
(82.1)
17.2
10.9
(0.3)
(3.6)

0.2
10.0

(22.0)%
(29.8)
(24.0)
(23.6)
(36.8)
33.0
24.2
(109.3)
(100.0)

100.0
285.1%

167.3 $ 
40.8
2.0
210.1
141.0
69.1
55.6
—
—

—
13.5 $ 

36

Revenues.  GRE’s electricity revenues decreased in 2015 compared to 2014 because of both a 13.7% decrease in 
the average rate charged to customers and a 9.6% decrease in electricity consumption. The decrease in the average 
rate charged to customers was mostly due to a 27.8% decrease in the underlying commodity cost in 2015 compared 
to 2014. In the ﬁ rst quarter of 2014, there were extraordinarily large spikes in the prices of wholesale electricity and 
natural gas in markets where GRE and other REPs purchased their supply because of the polar vortex in January 
and February 2014. The decrease in electricity consumption was the result of a decrease in average meters served, 
which decreased 3.9% in 2015 compared to 2014, and a 5.9% decrease in average consumption per meter in 2015 
compared to 2014. The decrease in average consumption per meter was the result of higher usage in 2014 due to the 
prolonged cold temperatures as well as the higher levels of churn that followed the polar vortex being concentrated 
in relatively higher consuming meters.

GRE’s natural gas revenues decreased in 2015 compared to 2014 because of a 21.1% decrease in the average rate 
charged to customers, and a 10.7% decrease in natural gas consumption. The decrease in the average rate charged to 
customers for natural gas was due to a 37.1% decrease in the underlying commodity cost in 2015 compared to 2014. 
The decrease in natural gas consumption was the result of a 8.1% decrease in average meters served, as well as a 
2.8% decrease in average consumption per meter, in 2015 compared to 2014. Natural gas consumption in 2014 was 
upwardly aff ected by the prolonged cold temperatures during the polar vortex in January and February 2014 and the 
subsequent churn was concentrated in higher consuming meters.

GRE’s customer base as measured by meters served consisted of the following:

(in thousands)
Meters at end of quarter:

Electricity customers . . . . . . . . . . 
Natural gas customers . . . . . . . . . 
Total meters . . . . . . . . . . . . . . . . . . . 

December 31, 
2015

September 30, 
2015

June 30, 
2015

March 31, 
2015

December 31, 
2014

264
128
392

261
127
388

250
127
377

232
126
358

234
129
363

Gross meter acquisitions in 2015 were 275,000 compared to 213,000 in 2014. GRE had success in selling “IDT 
Energy® SmartBudget” and other off erings with ﬁ xed rate characteristics. The increase was also partially due to 
an intentional slowing of customer acquisitions in 2014 in the territories most impacted by the rising wholesale 
commodity costs during the eff ects of the polar vortex. During the second and third quarters of 2014, GRE 
accelerated acquisitions of new customers in Illinois, and reengaged its marketing eff orts in certain Pennsylvania 
utility territories where it had suspended those activities. Net meters served increased by 29,000  or 8.4% in 2015 
compared to a decrease of 64,000 or 15.0% in 2014 due to the increases in gross meter acquisitions and a reduction 
in customer churn. Average monthly churn decreased from 6.8% in 2014 to 6.3% in 2015, reﬂ ecting a return to more 
normalized churn rates following the unusually high rates recorded in the ﬁ rst and second quarters of 2014 following 
that winter’s polar vortex. Churn rates were also favorably impacted by the successful introduction of the pricing 
plans with ﬁ xed rate characteristics.

GRE has applications pending to enter into additional utility service areas, primarily natural gas and dual meter 
territories, in various locations in the states where we currently operate and in other jurisdictions. 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 diff erent customers have diff erent rates of 
energy consumption, RCEs are an industry standard metric for evaluating the consumption proﬁ le of a given retail 
customer base.

(in thousands)
RCEs at end of quarter:

Electricity customers . . . . . . . . . . 
Natural gas customers . . . . . . . . . 
Total RCEs  . . . . . . . . . . . . . . . . . . . 

December 31, 
2015

September 30, 
2015

June 30, 
2015

March 31, 
2015

December 31, 
2014

178
81
259

178
82
260

168
83
251

158
83
241

160
83
243

37

The RCE increase at December 31, 2015 compared to December 31, 2014 primarily reﬂ ects the increase in 
electricity customers in New Jersey and Illinois utility territories that have relatively high per meter consumption 
rates compared to our total customer base.

Other revenue in 2015 and 2014 includes revenue earned by Diversegy, and IDTEN, both of which were acquired 
in December 2013. Diversegy and IDTEN earn commissions, entry fees and other fees from their retail energy 
advisory and brokerage business and network marketing business, respectively.

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

(in millions)

Year ended December 31,
Direct cost of revenues:

2015

2014

$

%

Change

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total direct cost of revenues . . . . . . . . . . . . . . . . . . . . . .  $ 

107.9 $ 
30.9
2.2
141.0 $ 

165.6 $ 
55.0
2.5
223.1 $ 

(57.7)
(24.1)
(0.3)
(82.1)

(34.8)%
(43.9)
(12.9)
(36.8)%

Year ended December 31,
Gross margin percentage:

2015

2014

Change

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total gross margin percentage  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

35.5%
24.3
(9.5)
32.9%

22.8%
4.9
4.5
18.9%

12.7%
19.4
(14.0)
14.0%

Direct cost of revenues for electricity decreased in 2015 compared to 2014 primarily because of the 27.8% 
decrease in the average unit cost of electricity in 2015 compared to 2014, as well as the 9.6% decrease in electricity 
consumption in 2015 compared to 2014. Gross margin on electricity sales increased in 2015 compared to 2014 
because the average rate charged to customers decreased less than the average unit cost of electricity.

Direct cost of revenues for natural gas decreased in 2015 compared to 2014 primarily because the average unit cost 
of natural gas decreased 37.1% in 2015 compared to 2014 and natural gas consumption decreased 10.7% in 2015 
compared to 2014. Gross margin on natural gas sales increased in 2015 compared to 2014 because the average rate 
charged to customers decreased less than the average unit cost of natural gas.

Other direct cost of revenues primarily includes commission expense incurred by Diversegy and IDTEN.

Selling, General and Administrative.  The increase in selling, general and administrative expense in 2015 compared 
to 2014 was due to increases in customer acquisition costs and payroll and related expenses. In addition, in 2015, the 
increase included an accrual of $2.7 million for regulatory and legal matters including outside counsel fees. These 
increases were partially off set by a decrease in billing costs in 2015 compared to 2014. As a percentage of GRE’s 
total revenues, selling, general and administrative expense increased from 16.3% in 2014 to 26.5% in 2015.

Bad Debt.  GRE’s bad debt expense in 2014 was $0.3 million compared to expense reversal of $29,000 in 2015. 
Bad debt expense in 2014 was mostly related to amounts due from a utility company that was under dispute.

Goodwill Impairment. 
In 2014, our annual goodwill impairment test resulted in the impairment of the goodwill 
of the Diversegy and IDTEN reporting unit primarily because of continuing losses since the acquisitions of those 
companies. We recorded goodwill impairment of $3.6 million in 2014, which reduced the carrying amount of the 
goodwill related to Diversegy and IDTEN to zero. We estimated the fair value of the reporting unit and compared 
the estimated fair value to the reporting unit’s carrying amount. We measured the fair value of the reporting unit 
by discounting its estimated future cash ﬂ ows using an appropriate discount rate. Since the carrying value of the 
reporting unit including goodwill exceeded the estimated fair value, we performed the required additional steps 
and determined that the goodwill was fully impaired. Goodwill impairment is not a cash expenditure, therefore the 
impairment did not impact our liquidity at December 31, 2014, nor will goodwill impairment impact our future 
liquidity. No impairment was recorded as a result of our 2015 annual impairment test.

38

In 2014, we reduced our estimate of our contingent payment 

Adjustment to Estimated Contingent Payments. 
liability related to our acquisition of Diversegy and IDTEN and recorded a gain of $0.2 million. The contingent 
payments include 100% of the gross proﬁ t from each closing customer contract during the remainder of the initial 
term of such contract and 100% of the gross proﬁ t from each post-closing customer contract during the initial term 
of such contract, plus 25% of the gross proﬁ t from the ﬁ rst renewal term of such contracts. A closing customer 
contract is generally a contract in eff ect at closing, and a post-closing customer contract is generally a contract 
that became eff ective within 60 days following the acquisition. We estimated the acquisition date fair value of the 
contingent payments based on historical gross proﬁ ts, customer attrition and contract renewals.

Afek Segment

We have an 86.5% interest in Afek, which operates an exploration project in the Golan Heights in Northern Israel. 
Afek was included in the Genie Oil and Gas segment from its inception until December 31, 2014. Beginning in the 
ﬁ rst quarter of 2015, Afek is a separate reportable segment. Comparative results have been reclassiﬁ ed and restated 
as if Afek was a separate segment in all periods presented. Afek does not currently generate any revenues, nor does it 
incur any direct cost of revenues.

(in millions)
Year ended December 31,
General and administrative expense . . . . . . . . . . . . . . . .  $ 
Research and development . . . . . . . . . . . . . . . . . . . . . . . 
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

Change

2015

2014

$

0.8 $ 
0.1
6.6
7.5 $ 

0.2 $ 
0.1
7.0
7.3 $ 

0.6
—
(0.4)
0.2

%
351.9%
(56.0)
(5.6)
2.2%

General and Administrative.  General and administrative expense increased in 2015 compared to 2014 primarily 
because of increases in payroll expense and consulting and professional fees.

Exploration. 
In 2014, Afek was issued a permit by Israel’s Northern District Planning and Building Committee 
to conduct an up to ten-well exploratory drilling program. In connection with a petition from the Israel Union for 
Environmental Defense and certain local residents, Israel’s High Court of Justice issued an interim injunction against 
Afek, restricting Afek from building installations or changing the surface of the ground until the Court ruled on the 
petition. In December 2014, the High Court rejected the petition challenging the permits, and lifted its injunction on 
Afek’s exploratory program in Northern Israel. In February 2015, Afek initiated drilling on its ﬁ rst exploratory well 
pursuant to its up to ten-well exploratory program. To date, Afek has completed drilling ﬁ ve wells and has initiated a 
well ﬂ ow test program on one or more of those wells.

Genie Oil and Gas Segment

Genie Oil and Gas does not currently generate any revenues, nor does it incur any direct cost of revenues.

(in millions)
Year ended December 31,
General and administrative expense . . . . . . . . . . . . . . . .  $ 
Research and development . . . . . . . . . . . . . . . . . . . . . . . 
Equity in net loss of AMSO, LLC . . . . . . . . . . . . . . . . . . 
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

Change

2015

2014

$

0.7 $ 
1.9
0.4
3.0 $ 

1.1 $ 
5.4
—
6.5 $ 

(0.4)
(3.5)
0.4
(3.5)

%
(31.9)%
(64.4)
nm
(52.8)%

nm – not meaningful

General and Administrative.  General and administrative expense decreased in 2015 compared to 2014 primarily 
due to decreases in payroll, travel, rent, consulting and professional expenses.

39

Research and Development.  Research and development expense consists of the following:

(in millions) 
Year ended December 31,
Genie Mongolia  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
IEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total research and development expense  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2015

2014

1.7 $ 
0.2
—
1.9 $ 

2.7
2.6
0.1
5.4

Genie Mongolia’s research and development expense in 2015 and 2014 related to the joint geological survey 
agreement with the Republic of Mongolia, which was executed in April 2013, to explore certain of that country’s 
oil shale deposits. In 2014, Genie Mongolia acquired approximately 40 kilometers of 2D seismic results and 
drilled in three diff erent basins within the license areas. Genie Mongolia also continued surface mapping and other 
geophysical evaluation work within the areas. In light of the progress achieved by Afek , we have suspended our 
operations in Mongolia.

During 2014, the environmental documents portion of IEI’s permit application for the construction and operation 
of its oil shale pilot test facility was under review by the Ministry of Environment. In addition, as per the required 
permitting process, IEI continued laboratory work, engineering work and associated preparation of environmental 
permit applications related to the planned pilot. IEI submitted its application for the construction and operation of its 
oil shale pilot test facility to the Jerusalem District Committee for Planning and Building, and on September 2, 2014, 
the Committee declined to issue IEI a permit to build and operate a pilot drilling project. IEI is evaluating whether 
and how to exploit the abundant oil shale resource in Israel in light of the Committee’s decision. Operations at IEI 
are currently on hold.

Equity in the Net Loss of AMSO, LLC.  Equity in the net loss of AMSO, LLC was $0.4 million in 2015 and nil 
in 2014. AMSO has the right to decide at each capital call whether or not to fund AMSO, LLC, and will make a 
determination at each such time. AMSO did not fund the capital calls for any quarter from the fourth quarter of 
2013 through the second quarter of 2015. AMSO funded an aggregate of $0.3 million from the third quarter of 
2015 through the ﬁ rst quarter of 2016, which was 28% of its share of the capital calls. In the period from January 
2014 through January 2016, Total funded an aggregate of $4.6 million for AMSO’s share of the capital calls that 
AMSO did not fund. In part because of AMSO’s decisions not to fund all of its share of AMSO, LLC’s expenditures, 
AMSO, LLC allocates its net loss beginning January 2014 as follows: $12.1 million of losses were allocated to 
Total, then it allocates any remaining losses proportionately such that over time AMSO and Total’s capital accounts 
as a percentage of AMSO, LLC’s total capital will equal their ownership interests. AMSO, LLC’s net loss was 
$5.2 million and $8.2 million in 2015 and 2014, respectively.

On February 23, 2016, Total notiﬁ ed AMSO of its decision not to continue to fund AMSO, LLC. We are currently 
considering our options with respect to the future of this project. AMSO and Total are obligated to fund certain 
remediation and reclamation costs. We estimate that our share of such costs would be in the range of nil to 
$2.0 million.

Corporate

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

(in millions)
Year ended December 31,
General and administrative expense and loss from 

2015

2014

$

%

Change

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

8.9 $ 

15.4 $ 

(6.5)

(42.0)%

The decrease in Corporate general and administrative expense in 2015 compared to 2014 was mostly due to a decrease 
in stock-based compensation expense, which decreased to $4.5 million in 2015 from $9.7 million in 2014. Stock-based 
compensation in 2014 related primarily to the December 2013 grant of options to purchase 3.0 million shares of our 
Class B common stock at an exercise price of $10.30 per share to Howard Jonas, our Chairman of the Board and Chief 
Executive Offi  cer, and the subsequent amendment of that compensation arrangement. The options were initially vesting 

40

in ﬁ ve equal annual installments commencing on December 31, 2014. The estimated total value of the options on 
the grant date was $19.3 million. In July and August 2014, in connection with our entry into a Second Amended and 
Restated Employment Agreement with Mr. Jonas, the options were cancelled and Mr. Jonas purchased an aggregate 
of 3.6 million shares of our Class B common stock. The decrease in Corporate general and administrative expense in 
2015 compared to 2014 was also due to a decrease in payroll expense. As a percentage of our consolidated revenues, 
Corporate general and administrative expense decreased from 5.6% in 2014 to 4.2% in 2015.

Consolidated

Selling, General and Administrative.  Pursuant to an agreement between us and IDT, IDT charges us for services 
it provides, and we charge IDT for  services that we provide to certain of IDT’s  subsidiaries. In 2015 and 2014, 
the amounts that IDT charged us, net of the amounts that we charged IDT, were $1.8 million and $2.9 million, 
respectively, which were included in consolidated selling, general and administrative expense.

Stock-based compensation expense included in consolidated selling, general and administrative expense was 
$5.2 million and $10.8 million in 2015 and 2014, respectively. The decrease in stock-based compensation expense 
was primarily due to unrecognized compensation cost that was fully recognized in 2014. At December 31, 2015, 
aggregate unrecognized compensation cost related to non-vested stock-based compensation was $12.4 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.

(in millions)
Year ended December 31,
(Loss) income from operations . . . . . . . . . . . . . . . . . . . .  $ 
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Financing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . 
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . 
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net loss attributable to noncontrolling interests . . . . . 
Net loss attributable to Genie . . . . . . . . . . . . . . . . . . . . .  $ 

2015

2014

$

%

Change

(5.9) $ 
0.4
(2.4)
(0.2)
(0.5)
(8.6)
1.1
(7.5) $ 

(25.6) $ 
0.5
(2.6)
0.4
(0.1)
(27.4)
0.9
(26.5) $ 

19.7
(0.1)
0.2
(0.6)
(0.4)
18.8
0.2
19.0

77.0%
(12.4)
4.4
(149.6)
(452.6)
68.5
28.0
71.8%

Financing Fees.  Financing fees are the volumetric fees charged by BP under the Preferred Supplier Agreement 
between IDT Energy and BP. Financing fees decreased in 2015 compared to 2014 primarily because of the lower 
consumption by GRE’s customers.

Other (Expense) Income, net.  The change in other (expense) income, net in 2015 compared to 2014 was mainly 
due to the change in foreign currency translation gains (losses), from gains of $0.4 million in 2014 to losses of 
$0.1 million in 2015.

Provision for Income Taxes.  The increase in the provision for income taxes in 2015 compared to 2014 was 
primarily due to the change in state income tax expense in GRE. GRE’s income before income taxes and provision 
for income taxes increased in 2015 compared to 2014. GRE includes IDT Energy, certain limited liability companies 
and our consolidated variable interest entities. IDT Energy and the limited liability companies are included in our 
consolidated return. Citizen’s Choice Energy, LLC, or CCE, and DAD Sales, LLC, or DAD are our consolidated 
variable interest entities, which ﬁ le separate tax returns since we do not have any ownership interest in these variable 
interest entities. The following table summarizes GRE’s aggregate income before income taxes and provision for 
income taxes:

(in millions) Year ended December 31,
Genie Retail Energy: 
Aggregate income before income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Aggregate provision for income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2015

2014

11.2 $ 
(2.1) $ 

1.2
(0.4)

41

Net Loss Attributable to Noncontrolling Interests.  The change in the net loss attributable to noncontrolling interests 
in 2015 compared to 2014 was due to a decrease in the net income of CCE, partially off set by the change in the 
net loss attributable to noncontrolling interests in GOGAS. CCE is a variable interest entity that is consolidated 
within our GRE segment. We do not have any ownership interest in CCE, therefore, 100% of the net income or 
loss incurred by CCE has been attributed to noncontrolling interests. CCE’s net income in 2015 was $0.2 million 
compared to $0.8 million in 2014. CCE’s net income decreased primarily due to a decrease in gross proﬁ t and a 
reduction in beneﬁ t from income taxes.

Year Ended December 31, 2014 compared to Year Ended December 31, 2013

Genie Retail Energy Segment

(in millions)

Year ended December 31,
Revenues:

2014

2013

$

%

Change

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross proﬁt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . .
Bad debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to estimated contingent payments . . . . . . . .
Income from operations  . . . . . . . . . . . . . . . . . . . . . . . . . $ 

214.5 $ 
57.9
2.6
275.0
223.1
51.9
44.7
0.3
3.6
(0.2)
3.5 $ 

216.7 $ 
62.5
—
279.2
213.4
65.8
39.2
0.8
—
—
25.8 $ 

(2.2)
(4.6)
2.6
(4.2)
9.7
(13.9)
5.5
(0.5)
3.6
(0.2)
(22.3)

(1.0)%
(7.4)
nm
(1.5)
4.5
(21.0)
14.0
(61.2)
nm
nm
(86.3)%

nm – not meaningful

Revenues.  GRE’s electricity revenues decreased in 2014 compared to 2013 because of a 27.0% decrease in 
electricity consumption, partially off set by a 35.6% increase in the average rate charged to customers. The decrease 
in electricity consumption was primarily the result of a decrease in meters served, which decreased 15.0% in 2014 
compared to 2013, coupled with a 14.1% decrease in average consumption per meter in 2014 compared to 2013. The 
increase in the average rate charged to customers was mostly due to a 34.2% increase in the underlying commodity 
cost in 2014 compared to 2013.

GRE’s natural gas revenues decreased in 2014 compared to 2013 because of a 10.5% decrease in natural gas 
consumption, partially off set by a 3.5% increase in the average rate charged to customers. The decrease in natural gas 
consumption was primarily the result of a 14.0% decrease in meters served, although average consumption per meter 
increased 4.0% in 2014 compared to 2013. The increase in the average rate charged to customers for natural gas was 
due to a 38.0% increase in the underlying commodity cost in 2014 compared to 2013.

The decreases in GRE’s meters served in 2014 compared to 2013, and the associated decreases in electricity and 
natural gas consumption, were signiﬁ cantly impacted by a conﬂ uence of issues in January and February 2014 
associated with that winter’s polar vortex. Sustained, extremely cold weather in much of GRE’s service area, short 
reserves of natural gas in the wholesale markets, delivery constrictions and unusually volatile commodity trading 
in the ﬁ nancial markets caused extraordinarily large spikes in the prices of wholesale electricity and natural gas in 
markets where GRE and other REPs purchase their supply. GRE responded by reducing its target margins in order 
to mitigate the severity of the commodity price increases on its customers and subsequently issued an aggregate of 
approximately $5 million in rebates to customers in 2014. The colder weather adversely aff ected GRE’s customer 
churn, gross margins and results of operations in 2014 compared to 2013.

42

GRE’s customer base as measured by meters served consisted of the following:

(in thousands)
Meters at end of quarter:

Electricity customers . . . . . . . . . .
Natural gas customers . . . . . . . . .
Total meters . . . . . . . . . . . . . . . . . . .

December 31, 
2014

September 30, 
2014

June 30, 
2014

March 31, 
2014

December 31, 
2013

234
129
363

235
127
362

238
126
364

256
135
391

282
145
427

Gross meter acquisitions in 2014 were 213,000 compared to 245,000 in 2013. The decrease was partially due 
to an intentional slowing of customer acquisition eff orts in the territories most impacted by the rising wholesale 
commodity costs during the eff ects of the polar vortex. During the second and third quarters of 2014, GRE 
accelerated acquisitions of new customers in Illinois, and reengaged its marketing eff orts in certain Pennsylvania 
utility territories where it had suspended those activities. In addition, GRE developed and began to trial a 
twelve-month locked rate residential off ering in some utility territories.

Net meters served decreased by 64,000 or 15.0% in 2014 compared to a decrease of 75,000 or 14.9% in 2013 due to 
the higher levels of customer churn and lower levels of gross meter acquisitions. Average monthly churn increased 
from 6.3% in 2013 to 6.8% in 2014, as some customers migrated back to the incumbent utility because of the large 
increase in the rates charged to customers due to the extreme increase in our costs to procure the commodities.

The average rates of annualized energy consumption as measured by RCEs are presented in the chart below.

(in thousands)
RCEs at end of quarter:

Electricity customers . . . . . . . . . . 
Natural gas customers . . . . . . . . . 
Total RCEs  . . . . . . . . . . . . . . . . . . . 

December 31, 
2014

September 30, 
2014

June 30, 
2014

March 31, 
2014

December 31, 
2013

160
83
243

165
83
248

174
86
260

198
90
288

228
87
315

The RCE decrease at December 31, 2014 compared to December 31, 2013 primarily reﬂ ected the decline in meters 
served. In addition, the Pennsylvania utility territories hardest hit by the polar vortex had relatively high per meter 
consumption rates compared to our full customer base, including the new territories we serve in Illinois. They 
experienced higher than average levels of churn and customer acquisition programs in some of these territories were 
brieﬂ y suspended.

Other revenue in 2014 included revenue earned by Diversegy and IDTEN, both of which were acquired in December 
2013. Diversegy and IDTEN earn commissions, entry fees and other fees from their retail energy advisory and 
brokerage business and network marketing, respectively.

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

(in millions)
Year ended December 31,
Direct cost of revenues:

2014

2013

$

%

Change

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total direct cost of revenues . . . . . . . . . . . . . . . . . . . . . .  $ 

165.6 $ 
55.0
2.5
223.1 $ 

168.9 $ 
44.5
—
213.4 $ 

(3.3)
10.5
2.5
9.7

(2.0)%
23.5
nm
4.5%

nm – not meaningful

Year ended December 31,
Gross margin percentage:

2014

2013

Change

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total gross margin percentage  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

22.8%
4.9
4.5
18.9%

22.1%
28.7
—
23.6%

0.7%

(23.8)
4.5
(4.7)%

43

Direct cost of revenues for electricity decreased in 2014 compared to 2013 primarily because of the 27.0% decrease 
in electricity consumption in 2014 compared to 2013. The decrease in electricity consumption was partially off set 
by a 34.2% increase in the average unit cost of electricity in 2014 compared to 2013. Gross margin on electricity 
sales slightly increased in 2014 compared to 2013 because the average rate charged to customers increased more 
than the average unit cost of electricity. Additionally, 2013 was impacted by the eff ects of an internal pricing system 
issue that constrained our ability to make timely adjustments to electric rates in some newer territories, which did 
not repeat in 2014.

Direct cost of revenues for natural gas increased in 2014 compared to 2013 primarily because the average unit cost 
of natural gas increased 38.0% in 2014 compared to 2013. The increase in the average unit cost of natural gas was 
partially off set by a 10.5% decrease in natural gas consumption in 2014 compared to 2013. Gross margin on natural 
gas sales decreased in 2014 compared to 2013 because the average unit cost of natural gas increased substantially 
more than the average rate charged to customers.

Other direct cost of revenues primarily includes commission expense incurred by Diversegy and IDTEN.

Selling, General and Administrative.  The increase in selling, general and administrative expense in 2014 compared 
to 2013 was due to increases in payroll, consulting and professional fees and computer software licenses expense, 
primarily all of which related to the acquisitions of Diversegy and IDTEN. The increase in selling, general and 
administrative expense in 2014 compared to 2013 was also due to increases in customer acquisition costs and 
purchase of receivable fees. As a percentage of GRE’s total revenues, selling, general and administrative expense 
increased from 14.1% in 2013 to 16.3% in 2014.

Bad Debt.  GRE’s bad debt expense in 2014 was $0.3 million compared to $0.8 million in 2013. Bad debt expense 
in 2014 and 2013 was mostly related to amounts due from a utility company that were under dispute.

Goodwill Impairment. 
In 2014, our annual goodwill impairment test resulted in the impairment of the goodwill 
of the Diversegy and IDTEN reporting unit primarily because of continuing losses since the acquisitions of those 
companies. We recorded goodwill impairment of $3.6 million in 2014, which reduced the carrying amount of the 
goodwill related to Diversegy and IDTEN to zero. We estimated the fair value of the reporting unit and compared 
the estimated fair value to the reporting unit’s carrying amount. We measured the fair value of the reporting unit 
by discounting its estimated future cash ﬂ ows using an appropriate discount rate. Since the carrying value of the 
reporting unit including goodwill exceeded the estimated fair value, we performed the required additional steps 
and determined that the goodwill was fully impaired. Goodwill impairment is not a cash expenditure, therefore the 
impairment did not impact our liquidity at December 31, 2014, nor will goodwill impairment impact our future 
liquidity.

Adjustment to Estimated Contingent Payments. 
In 2014, we reduced our estimate of our contingent payment 
liability related to our acquisition of Diversegy and IDTEN and recorded a gain of $0.2 million. We estimated 
the acquisition date fair value of the contingent payments based on historical gross proﬁ ts, customer attrition and 
contract renewals.

Afek Segment

Afek was included in the Genie Oil and Gas segment from its inception until December 31, 2014. Beginning in the 
ﬁ rst quarter of 2015, Afek is a separate reportable segment. Comparative results have been reclassiﬁ ed and restated 
as if Afek was a separate segment in all periods presented. Afek does not currently generate any revenues, nor does it 
incur any direct cost of revenues.

(in millions)

Change

Year ended December 31,
General and administrative expense . . . . . . . . . . . . . . . .  $ 
Research and development . . . . . . . . . . . . . . . . . . . . . . . 
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2014

2013

$

%

0.2 $ 
0.1
7.0
7.3 $ 

0.1 $ 
0.2
4.0
4.3 $ 

0.1
(0.1)
3.0
3.0

385.3%
(22.7)
72.9
71.4%

General and Administrative.  General and administrative expense increased in 2014 compared to 2013 primarily 
because of increases in payroll expense and consulting and professional fees.

44

Exploration. 
In 2014, Afek was issued a permit by Israel’s Northern District Planning and Building Committee 
to conduct an up to ten-well exploratory drilling program. In connection with a petition from the Israel Union for 
Environmental Defense and certain local residents, Israel’s High Court of Justice issued an interim injunction against 
Afek, restricting Afek from building installations or changing the surface of the ground until the Court ruled on the 
petition. In December 2014, the High Court rejected the petition challenging the permits, and lifted its injunction on 
Afek’s exploratory program in Northern Israel.

Genie Oil and Gas Segment

Genie Oil and Gas does not currently generate any revenues, nor does it incur any direct cost of revenues.

(in millions)
Year ended December 31,
General and administrative expense . . . . . . . . . . . . . . . .  $ 
Research and development . . . . . . . . . . . . . . . . . . . . . . . 
Equity in net loss of AMSO, LLC . . . . . . . . . . . . . . . . . . 
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2014

2013

$ 
1.3 $ 
7.2
3.2
11.7 $ 

1.1 $ 
5.4
—
6.5 $ 

Change

(0.2)
(1.8)
(3.2)
(5.2)

%
(18.7)%
(24.8)
(100.0)
(44.6)%

General and Administrative.  General and administrative expense decreased in 2014 compared to 2013 primarily 
due to decreases in stock-based compensation expense and consulting and professional fees.

Research and Development.  Research and development expense consists of the following:

(in millions) Year ended December 31,
Genie Mongolia  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
IEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total research and development expense  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2014

2013

2.7 $ 
2.6
0.1
5.4 $ 

3.4
3.7
0.1
7.2

Genie Mongolia’s research and development expense in 2014 and 2013 related to the joint geological survey 
agreement with the Republic of Mongolia, which was executed in April 2013, to explore certain of that country’s 
oil shale deposits. In 2014, Genie Mongolia acquired approximately 40 kilometers of 2D seismic results and 
drilled in three diff erent basins within the license areas. Genie Mongolia also continued surface mapping and other 
geophysical evaluation work within the areas.

During 2014, the environmental documents portion of IEI’s permit application for the construction and operation 
of its oil shale pilot test facility was under review by the Ministry of Environment. In addition, as per the required 
permitting process, IEI continued laboratory work, engineering work and associated preparation of environmental 
permit applications related to the planned pilot.

Equity in the Net Loss of AMSO, LLC.  AMSO has the right to decide at each capital call whether or not to fund 
AMSO, LLC, and will make a determination at each such time. AMSO did not fund the capital calls for any quarter 
from the fourth quarter of 2013 through the second quarter of 2015. Total funded AMSO’s share of the capital calls 
that AMSO did not fund in an aggregate amount of $3.6 million through the ﬁ rst quarter of 2015. In part because 
of AMSO’s decisions not to fund all of its share of AMSO, LLC’s expenditures, AMSO, LLC allocated its net loss 
beginning January 2014 as follows: the ﬁ rst $11.0 million of losses were allocated to Total, then it allocated any 
remaining losses proportionately such that over time AMSO and Total’s capital accounts as a percentage of AMSO, 
LLC’s total capital will equal their ownership interests. As a result, equity in the net loss of AMSO, LLC was nil in 
2014, and $3.2 million in 2013, which was 35% of AMSO, LLC’s net loss of $9.1 million in 2013.

Corporate

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

45

(in millions)
Year ended December 31,
General and administrative expense and loss from 

2014

2013

$

%

Change

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

15.4 $ 

9.1 $ 

6.3

68.4%

The increase in Corporate general and administrative expense in 2014 compared to 2013 was due to an increase 
in stock-based compensation. The increase in stock-based compensation was primarily the result of the December 
2013 grant of options to purchase 3.0 million shares of our Class B common stock at an exercise price of $10.30 
per share to Howard Jonas and the subsequent amendment of that compensation arrangement. The options were 
initially vesting in ﬁ ve equal annual installments commencing on December 31, 2014. The estimated total value of 
the options on the grant date was $19.3 million. In July and August 2014, in connection with our entry into a Second 
Amended and Restated Employment Agreement with Mr. Jonas, the options were cancelled and Mr. Jonas purchased 
an aggregate of 3.6 million shares of our Class B common stock. Because of the equity arrangement with Mr. Jonas, 
we recorded Corporate stock-based compensation of $7.9 million and nil in 2014 and 2013, respectively. As a 
percentage of our consolidated revenues, Corporate general and administrative expense increased from 3.3% in 2013 
to 5.6% in 2014.

Consolidated

Selling, General and Administrative. 
IDT charges us for services it provides pursuant to an agreement, and we 
charge IDT for  services that we provide to certain of IDT’s  subsidiaries. In 2014 and 2013, the amounts that IDT 
charged us, net of the amounts that we charged IDT, were $2.9 million and $3.1 million, respectively, which were 
included in consolidated selling, general and administrative expense.

Stock-based compensation expense included in consolidated selling, general and administrative expense was 
$10.8 million and $4.2 million in 2014 and 2013, respectively. The increase in 2014 compared to 2013 was primarily 
due to expense from the equity arrangement with Mr. Jonas. At December 31, 2014, aggregate unrecognized 
compensation cost related to non-vested stock-based compensation was $13.3 million. The expense from these 
grants is recognized over the expected service period.

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

(in millions)
Year ended December 31,
(Loss) income from operations . . . . . . . . . . . . . . . . . . . .  $ 
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Financing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other income (expense), net . . . . . . . . . . . . . . . . . . . . 
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . 
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Net loss (income) attributable to noncontrolling 

interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net loss attributable to Genie . . . . . . . . . . . . . . . . . . . . .  $ 

2014

2013

$

Change

(25.6) $ 
0.5
(2.6)
0.4
(0.1)
(27.4)

0.9
(26.5) $ 

0.6 $ 
0.4
(3.2)
(0.3)
(2.8)
(5.3)

(0.6)
(5.9) $ 

(26.2)
0.1
0.6
0.7
2.7
(22.1)

1.5
(20.6)

%

nm
4.5%
20.4
187.6
96.6
(413.1)

263.9
(348.7)%

nm – not meaningful

Financing Fees.  Financing fees are the volumetric fees charged by BP under the Preferred Supplier Agreement 
between IDT Energy and BP. Financing fees decreased in 2014 compared to 2013 primarily because of the reduction 
in consumption by GRE’s customers.

Other Income (Expense), net.  The change in other income (expense), net in 2014 compared to 2013 was mainly 
due to the change in foreign currency translation gains (losses), from losses of $0.4 million in 2013 to gains of 
$0.4 million in 2014. In addition, in 2013, we recorded a loss on disposal of property of $37,000.

Provision for Income Taxes.  The decrease in the provision for income taxes in 2014 compared to 2013 was 
primarily due to the changes in federal and state income tax expense in GRE. GRE had signiﬁ cant reductions in its 
income before income taxes and provision for income taxes in 2014 compared to 2013. GRE includes IDT Energy, 
certain limited liability companies and our consolidated variable interest entities. IDT Energy and the limited 

46

liability companies are included in our consolidated return. CCE and DAD are our consolidated variable interest 
entities, which ﬁ le separate tax returns since we do not have any ownership interest in these variable interest entities. 
The following table summarizes GRE’s aggregate income before income taxes and provision for income taxes:

(in millions) 
Year ended December 31,
Genie Retail Energy:
Aggregate income before income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2014

2013

1.2 $ 

22.7

Aggregate provision for income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

(0.4) $ 

(9.4)

Net Loss (Income) Attributable to Noncontrolling Interests.  The change in the net loss (income) attributable to 
noncontrolling interests in 2014 compared to 2013 primarily relates to 100% of the net income incurred by CCE, 
which is a variable interest entity that is consolidated within our GRE segment. We do not have any ownership 
interest in CCE, therefore, all net income or loss incurred by CCE has been attributed to noncontrolling interests. 
CCE’s net income in 2014 was $0.8 million compared to $2.1 million in 2013. CCE’s net income decreased 
primarily due to a decrease in gross proﬁ t, partially off set by reduction in income tax expense.

LIQUIDITY AND CAPITAL RESOURCES

General

Historically, we have satisﬁ ed our cash requirements primarily through a combination of our existing cash and cash 
equivalents, GRE’s cash ﬂ ow from operating activities, and sales of equity interests in GOGAS and certain of its 
subsidiaries. We currently expect that our operations in the next twelve months and the $47.6 million balance of 
cash, cash equivalents, and certiﬁ cates of deposit that we held as of December 31, 2015 will be suffi  cient to meet our 
currently anticipated cash requirements for at least the year ending December 31, 2016, including Afek’s anticipated 
substantial expenditures in the year ending December 31, 2016.

We are considering sales of equity interests in Afek or GOGAS to provide the necessary ﬁ nancing for such activities.

At December 31, 2015, we had working capital (current assets less current liabilities) of $77.1 million.

(in millions)
Cash ﬂows (used in) provided by:
Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Effect of exchange rate changes on cash and cash 

equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
(Decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . .  $ 

Year ended December 31,

2015

2014

2013

(3.1) $ 
(31.6)
1.6

—
(33.1) $ 

(19.1) $ 
(1.8)
19.5

(0.6)
(2.0) $ 

1.2
3.8
(0.9)

0.4
4.5

Operating Activities

Cash used in operating activities was $3.1 million and $19.1 million in 2015 and 2014, respectively. Cash provided 
by operating activities was $1.2 million in 2013. Our cash ﬂ ow from operations varies signiﬁ cantly from quarter 
to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and 
payments, speciﬁ cally trade accounts receivable and trade accounts payable, including payments relating to our 
exploration and research and development activities.

CCE and DAD are consolidated variable interest entities. We determined that since the acquisition of the interest 
in CCE and DAD, we had the power to direct the activities of these entities that most signiﬁ cantly impact their 
economic performance, and we have the obligation to absorb losses of CCE and DAD that could potentially be 
signiﬁ cant to CCE and DAD on a stand-alone basis. We therefore determined that we are the primary beneﬁ ciary 
of CCE and DAD, and as a result, we consolidate CCE and DAD within our GRE segment. We provided CCE 
and DAD with all of the cash required to fund their operations. In 2015 and 2013, CCE and DAD repaid to us 

47

$1.0 million and $4.1 million, respectively. In 2014, we provided CCE and DAD with net funding of $0.3 million to 
ﬁ nance their operations.

As of November 19, 2015, IDT Energy and certain of its affi  liates entered into an Amended and Restated Preferred 
Supplier Agreement with BP. The agreement’s termination date is November 30, 2019, except either party may 
terminate the agreement on November 30, 2018 by giving the other party notice by May 31, 2018. IDT Energy’s 
obligations to BP are secured by a ﬁ rst security interest in deposits or receivables from utilities in connection 
with their purchase of IDT Energy’s customer’s receivables, and in any cash deposits or letters of credit posted in 
connection with any collateral accounts with BP. IDT Energy’s ability to purchase electricity and natural gas under 
this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. 
At December 31, 2015, we were in compliance with such covenants. As of December 31, 2015, restricted 
cash — short-term of $0.8 million and trade accounts receivable of $27.0 million were pledged to BP as collateral 
for the payment of IDT Energy’s trade accounts payable to BP of $8.3 million as of December 31, 2015.

At December 31, 2015, we had an aggregate of $2.5 million accrued for certain complaints and lawsuits described 
in Item 3 to Part I of this Annual Report on Form 10-K. In one matter, which is included in this accrual, subject to 
the approval of the Pennsylvania Public Utility Commission, IDT Energy has agreed to issue additional refunds to its 
Pennsylvania customers who had variable rates for electricity supply in January, February and March of 2014.

In July 2013, GRE negotiated a settlement of an audit of its New York State sales and use tax for the period from 
June 2003 through August 2009. As a result, GRE paid $0.9 million in July 2013. We are subject to audits in various 
jurisdictions for various taxes. 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 estimates 
are revised or underlying matters are settled or resolved. Imposition of assessments as a result of tax audits could 
have an adverse eff ect on our results of operations, cash ﬂ ows and ﬁ nancial condition.

On February 23, 2016, the New York  PSC  issued an order  that sought to impose signiﬁ cant new restrictions on  REPs  
operating in New York, including GRE. The restrictions described in the PSC’s order, which  were to become eff ective 
March 4, 2016, would require that all REPs’ electricity and natural gas off erings 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 off erings, 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 until a court hearing on April 14, 2016. GRE 
expects that the REP industry will take additional legal action in response to the order seeking a deﬁ nitive judicial 
review of the industry’s challenges to the PSC’s order. 

We are evaluating the potential impact of the PSC’s order on our New York operations while preparing to operate 
in compliance with any new requirements. Depending on the ﬁ nal language of the order and the outcome of legal 
appeals, as well as our ﬁ nal response to the order with respect to our relationships with our New York customers, the 
order will likely have a substantial impact upon GRE’s operations in New York. As of December 31, 2015, New York 
represented 53% of GRE’s total meters served and 44% of the total RCEs of GRE’s customer base.

Investing Activities

Our capital expenditures were $0.3 million, $1.4 million and $0.3 million in 2015, 2014 and 2013, respectively. 
Costs for research and development activities are charged to expense when incurred.

In 2015, 2014 and 2013, we used cash of $27.0 million, nil and nil, respectively, for investments in Afek’s unproved 
oil and gas property in the Golan Heights in Northern Israel. We had purchase commitments of $22.4 million 
at December 31, 2015 that included commitments for capital expenditures and exploration costs. We currently 
anticipate that our total expenditures for Afek’s exploration costs and other capital expenditures in the year ending 
December 31, 2016 will be between $15 million and $20 million.

In 2015 and 2013, cash used for capital contributions to AMSO, LLC was $0.3 million and $2.7 million, 
respectively. No contributions were made in 2014. AMSO has the right to decide at each capital call whether or 
not to fund AMSO, LLC, and will make a determination at each such time. AMSO did not fund the capital calls 

48

for any quarter from the fourth quarter of 2013 through the second quarter of 2015. AMSO funded an aggregate 
of $0.3 million from the third quarter of 2015 through the ﬁ rst quarter of 2016, which was 28% of its share of the 
capital calls. In the period from January 2014 through January 2016, Total funded an aggregate of $4.6 million 
for AMSO’s share of the capital calls that AMSO did not fund. Because of AMSO’s decision not to fund all of 
its share of AMSO, LLC’s expenditures, AMSO’s ownership interest in AMSO, LLC was reduced to 41.3% and 
Total’s ownership interest increased to 58.7%. In addition, AMSO’s share of future funding of AMSO, LLC up to a 
cumulative $100 million was reduced to 28.9% and Total’s share increased to 71.1%.

On February 23, 2016, Total notiﬁ ed AMSO of its decision not to continue to fund AMSO, LLC. We are currently 
considering our options with respect to the future of this project. AMSO and Total are obligated to fund certain 
remediation and reclamation costs. We estimate that our share of such costs would be in the range of nil to 
$2.0 million. 

In December 2013, IDT Energy acquired 100% of the outstanding membership interests of Diversegy and IDTEN. 
Cash paid for the acquisitions, net of cash acquired, was $0.8 million. In addition, IDT Energy agreed to additional 
cash payments of $1.2 million and contingent payments that were estimated to be $1.3 million. In 2015 and 2014, 
we paid an aggregate of $0.4 million and $1.1 million, respectively, in scheduled and contingent payments, which 
is included in ﬁ nancing activities. In addition, in 2014, we reduced our estimate of our contingent payment liability 
related to our acquisition of Diversegy and IDTEN and recorded a gain of $0.2 million. At December 31, 2015, there 
were estimated contingent payments of $0.4 million remaining to be paid. The contingent payments include 100% 
of the gross proﬁ t from each closing customer contract during the remainder of the initial term of such contract and 
100% of the gross proﬁ t from each post-closing customer contract during the initial term of such contract, plus 25% 
of the gross proﬁ t from the ﬁ rst renewal term of such contracts. A closing customer contract is generally a contract 
in eff ect at closing, and a post-closing customer contract is generally a contract that became eff ective within 60 
days following the acquisition. The acquisition date fair value of the contingent payments was estimated based on 
historical gross proﬁ ts, customer attrition and contract renewals.

In 2015, 2014 and 2013, we received $0.1 million, nil and nil, respectively, for the repayment of notes receivable. 
In 2015, 2014 and 2013, we entered into notes receivable for an aggregate of nil, $0.1 million and $0.8 million, 
respectively.

In 2015, 2014 and 2013, we used cash of $8.8 million, $4.7 million and $4.3 million, respectively, to purchase 
certiﬁ cates of deposits, and nil, nil and $3,000, respectively, to purchase marketable securities. In 2015, 2014 
and 2013, proceeds from maturities of certiﬁ cates of deposit were $4.7 million, $4.3 million and $2.2 million, 
respectively, and proceeds from maturities of marketable securities were nil, nil and $10.4 million, respectively.

Financing Activities

In 2015, 2014 and 2013, we paid aggregate Base Dividends per share of $0.6376, $0.6376, and $0.6099, 
respectively, on our Series 2012-A Preferred Stock. The aggregate Preferred Stock dividends paid in 2015, 2014 and 
2013 were $1.5 million, $1.4 million, and $1.1 million, respectively. On February 16, 2016, we paid a quarterly Base 
Dividend of $0.1594 per share on our Series 2012-A Preferred Stock for the fourth quarter of 2015 to stockholders 
of record as of the close of business on February 5, 2016.

In 2015 and 2014, we paid aggregate dividends per share of $0.12 and $0.06, respectively, to stockholders of our 
Class A common stock and Class B common stock. The aggregate dividends paid in 2015 and 2014 were $3.0 million 
and $1.5 million, respectively. No dividend was declared or paid on our Class A common stock or Class B common 
stock in 2013. On February 12, 2016, we paid a quarterly dividend of $0.06 per share on our Class A common stock 
and Class B common stock for the fourth quarter of 2015 to stockholders of record as of the close of business on 
February 5, 2016, as we have resumed  quarterly dividend payments on our common stock.

On December 17, 2015, GRE, IDT Energy and certain affi  liates 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, Baﬁ n, closed Maple Bank GmbH due to impending ﬁ nancial 
over-indebtedness related to tax-evasion investigations. Therefore, the revolving line of credit is not available for 
future borrowings. The collateral for the revolving loan consists of the borrowers’ receivables, the balances in certain 
bank accounts and certain commercial and intangible rights. Outstanding principal amount incurs interest at LIBOR 
plus 3.5% per annum. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest 

49

is due on the maturity date of December 17, 2018. The borrowers are required to comply with various affi  rmative 
and negative covenants, including maintaining a target tangible net worth during the term of the Credit Agreement. 
At December 31, 2015, the borrowers were in compliance with all of the covenants.

As of April 23, 2012, we and IDT Energy entered into a Loan Agreement with JPMorgan Chase Bank for a revolving 
line of credit for up to a maximum principal amount of $25.0 million. The proceeds from the line of credit may be 
used to provide working capital and for the issuance of letters of credit. We agreed to deposit cash in a money market 
account at JPMorgan Chase Bank as collateral for the line of credit equal to the greater 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. We are 
not permitted to withdraw funds or exercise any authority over the required balance in the collateral account. The 
principal outstanding will bear interest at the lesser 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 is 
payable at least every three months and all outstanding principal and any accrued and unpaid interest is due on the 
maturity date of April 30, 2016. We pay a quarterly unused commitment fee of 0.08% per annum on the diff erence 
between $25.0 million and the average daily outstanding principal balance of the note. In addition, as of April 23, 
2012, GEIC issued a Corporate Guaranty to JPMorgan Chase Bank whereby GEIC unconditionally guarantees the 
full payment of all indebtedness of ours and IDT Energy under the Loan Agreement. At December 31, 2015, there 
were no amounts borrowed under the line of credit, and cash collateral of $10.0 million was included in “Restricted 
cash — short-term” in the consolidated balance sheet. In addition, at December 31, 2015, letters of credit of 
$7.7 million were outstanding.

On July 30, 2014, we entered into a Second Amended and Restated Employment Agreement and a Restricted Stock 
Sale Agreement with Howard Jonas. Pursuant to these agreements, in July and August 2014, we sold an aggregate 
of 3.6 million shares of our Class B common stock to Mr. Jonas for an aggregate purchase price of $24.6 million. 
The 3.6 million shares of our Class B common stock are subject to repurchase by us at $6.82 per share upon 
certain terminations of Mr. Jonas’ employment by us, and such repurchase right lapses as to 0.6 million shares on 
December 31, 2016, 2017 and 2018.

In 2013, a consolidated variable interest entity distributed $42,000 to its shareholder, which was classiﬁ ed as a 
distribution to noncontrolling interests.

In June 2011, GOGAS issued a stock option to Michael Steinhardt at an exercise price of $5.0 million. The 
expiration date was April 9, 2015. The expiration date was extended for one month, and on May 9, 2015, the 
option was exercised. Mr. Steinhardt and an affi  liate received interests of approximately 1.5% in each of Afek, 
Genie Mongolia and IEI. In addition, Mr. Steinhardt and the affi  liate received an approximately 1.7% interest in 
AMSO. The exercise price of $5.0 million was paid $2.5 million in cash and $2.5 million in promissory notes due 
in November 2015. The notes bear interest at 0.43% per annum, and are secured by 50% of the shares received 
in the exercise. In November 2015, we received cash of $0.8 million to repay one-third of the principal amount 
of the promissory notes. The remaining notes, an aggregate of $1.7 million, are expected to be repaid in 2016. At 
December 31, 2015, the notes receivable were included in “Receivables for issuance of equity” in the consolidated 
balance sheet. In 2013, certain GOGAS subsidiaries sold noncontrolling equity interests for an aggregate of 
$0.4 million in cash.

We received proceeds from the exercise of our stock options of $0.2 million, $28,000 and $0.1 million in 2015, 2014 
and 2013, respectively.

In November 2010, GOGAS sold a 0.5% equity interest to Rupert Murdoch for $1.0 million paid with a promissory 
note. The note was secured by a pledge of the shares issued in exchange for the note. The note accrued interest at 
1.58% per annum. We received an aggregate of $1.1 million for the payment of the principal and accrued interest on 
the maturity date of November 15, 2015.

In October 2015, GRE paid $0.2 million to the owner of the limited liability company interests in CCE, and loaned 
CCE $0.5 million in exchange for an option to purchase 100% of the issued and outstanding limited liability 
company interests of CCE for one dollar plus the forgiveness of the $0.5 million loan. The option expires on 
October 22, 2023.

50

In 2015, we paid $27,000 to repurchase 4,220 shares of our Class B common stock. In 2014, we paid $0.2 million to 
repurchase 31,392 shares of our Class B common stock. In 2013, we paid $0.3 million to repurchase 31,776 shares 
of our Class B common stock. These shares were tendered by employees of ours 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.

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. In 2014, we repurchased 103,331 shares of Class B 
common stock under this program for an aggregate purchase price of $0.8 million. There were no repurchases under 
the program in 2015 and 2013. At December 31, 2015, 6.9 million shares remained available for repurchase under 
the stock repurchase program.

Exchange Off ers and Issuances of Preferred Stock

On November 26, 2012, we initiated an off er to exchange up to 7.15 million outstanding shares of our Class B 
common stock for the same number of shares of our Series 2012-A Preferred Stock. The off er expired on March 5, 
2013. On March 11, 2013, we issued 313,376 shares of our Series 2012-A Preferred Stock in exchange for an equal 
number of shares of Class B common stock tendered in the exchange off er.

On May 22, 2014, we initiated an off er to exchange up to 5.0 million outstanding shares of our Class B common 
stock for the same number of shares of our Series 2012-A Preferred Stock. The off er expired on June 23, 2014. On 
June 27, 2014, we issued 404,732 shares of our Series 2012-A Preferred Stock in exchange for an equal number of 
shares of Class B common stock tendered in the exchange off er. As a result of the issuance of additional shares of 
Series 2012-A Preferred Stock, the aggregate quarterly Base Dividend increased to $0.4 million from $0.3 million.

Each share of our Series 2012-A Preferred Stock has a liquidation preference of $8.50 (the “Liquidation 
Preference”), and is entitled to receive an annual dividend per share equal to the sum of (i) $0.6375 (the “Base 
Dividend”) plus (ii) seven and one-half percent (7.5%) of the quotient obtained by dividing (A) the amount by 
which the EBITDA for a ﬁ scal year of our retail energy provider business exceeds $32 million by (B) 8,750,000 
(the “Additional Dividend”), payable in cash. EBITDA consists of income (loss) from operations exclusive of 
depreciation and amortization and other operating gains (losses).

The Series 2012-A Preferred Stock is redeemable, in whole or in part, at our option following October 11, 2017 at 
101% of the Liquidation Preference plus accrued and unpaid dividends, and 100% of the Liquidation Preference 
plus accrued and unpaid dividends following October 11, 2018.

During any period when we have failed to pay a dividend on the Series 2012-A Preferred Stock and until all unpaid 
dividends have been paid in full, we are prohibited from paying dividends or distributions on our Class B or Class A 
common stock.

The Base Dividend is payable (if declared by our Board of Directors, and accrued, if not declared) quarterly on each 
February 15, May 15, August 15 and November 15, and to the extent that there is any Additional Dividend payable 
with respect to a ﬁ scal year, it will be paid to holders of Series 2012-A Preferred Stock with the May dividend. With 
respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series 2012-A 
Preferred Stock is equal in rank to all other equity securities we issue, the terms of which speciﬁ cally provide that 
such equity securities rank on a parity with the Series 2012-A Preferred Stock with respect to dividend rights or 
rights upon our liquidation, dissolution or winding up; senior to our common stock; and junior to all of our existing 
and future indebtedness.

Each share of Series 2012-A Preferred Stock has the same voting rights as a share of Class B common stock, except 
on certain matters that only impact our common stock, as well as additional voting rights on speciﬁ c matters or upon 
the occurrence of certain events.

Changes in Trade Accounts Receivable and Inventory

Gross trade accounts receivable decreased to $27.4 million at December 31, 2015 from $31.7 million at 
December 31, 2014 reﬂ ecting mainly the decrease in our revenues in the three months ended December 31, 2015 
compared to the three months ended December 31, 2014.

51

Inventory of natural gas decreased to $1.6 million at December 31, 2015 from $2.5 million at December 31, 2014 
due to a 45% decrease in the average unit cost, partially off set by and a 14% increase in quantity at December 31, 
2015 compared to December 31, 2014. Inventory at December 31, 2015 and 2014 also included $9.9 million and 
$8.7 million, respectively, in renewable energy credits.

CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

The following tables quantify our future contractual obligations and commercial commitments at December 31, 2015:

Contractual Obligations

Payments Due by Period

(in millions)
Commitment to invest in 

AMSO, LLC(1) . . . . . . . . . . . . . . . . . . .  $ 

Purchase obligations . . . . . . . . . . . . . . . . 
Renewable energy credits purchase 

obligations . . . . . . . . . . . . . . . . . . . . . . 
Revolving credit loan payable(2)  . . . . . . . 
Operating leases  . . . . . . . . . . . . . . . . . . . 
Other liabilities( 3) . . . . . . . . . . . . . . . . . . . 
TOTAL CONTRACTUAL 

Total

Less than 
1 year

1 – 3 
years

4 – 5 
years

After 5 
years

1.1 $ 
22.4

1.1 $ 
14.7

— $ 
7.7

— $ 
—

41.8
2.0
0.5
0.3

13.6
—
0.3
0.3

18.1
2.0
0.2
—

10.1
—
—
—

—
—

—
—
—
—

—

OBLIGATIONS( 4) . . . . . . . . . . . . . . .  $ 

68.1 $ 

30.0 $ 

28.0 $ 

10.1 $ 

(1) 

(2) 

( 3) 

( 4) 

The amount and timing of AMSO’s payments to AMSO, LLC is based on the proposed 2016 budget and is subject 
to change. AMSO has the right to decide at each capital call whether or not to fund AMSO, LLC, and will make a 
determination at each such time.
The revolving credit loan payable may need to be repaid prior to its scheduled due date as a result of the closure of the 
lending bank.
The above table does not include estimated contingent payments of $0.4 million in connection with the acquisition of 
Diversegy and IDTEN due to the uncertainty of the amount and/or timing of any such payments.
The above table does not include our unrecognized income tax beneﬁ ts for uncertain tax positions at December 31, 2015 
of $0.6 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.

Other Commercial Commitments

Payments Due by Period

(in millions)
Standby letter of credit(1) . . . . . . . . . . . . . $ 

Total

Less than 
1 year

1 – 3 
years

4 – 5 
years

After 5 
years

7.7 $ 

4.2 $ 

3.5 $ 

— $ 

—

(1) 

The above table does not include an aggregate of $11.9 million in performance bonds at December 31, 2015 due to the 
uncertainty of the amount and/or timing of any payments.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any “off -balance sheet arrangements,” as deﬁ ned in relevant SEC regulations that are reasonably 
likely to have a current or future eff ect on our ﬁ nancial 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 beneﬁ t of various states in order to comply with the 
states’ ﬁ nancial requirements for retail energy providers. At December 31, 2015, GRE had aggregate performance 
bonds of $11.9 million outstanding.

52

In connection with our Spin-Off  in October 2011, we and IDT entered into various agreements prior to the Spin-Off  
including a Separation and Distribution Agreement to eff ect 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 ﬁ ling of tax returns for such periods and disputes with taxing 
authorities regarding taxes for such periods. Pursuant to the Separation and Distribution Agreement, among other 
things, we indemnify IDT and IDT indemniﬁ es 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 indemniﬁ es 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 7A. 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 proﬁ t per unit in 2015 had remained the same as in 2014, our gross proﬁ t from electricity sales would have 
decreased by $15.2 million in 2015 and our gross proﬁ t from natural gas sales would have decreased by $7.3 million 
in 2015.

The energy markets have historically been very volatile, and we can reasonably expect that electricity and natural 
gas prices will be subject to ﬂ uctuations in the future. In an eff ort to reduce the eff ects of the volatility of the cost 
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 swaps or options, therefore 
the mark-to-market change in fair value is recognized in direct cost of revenue in our consolidated statements of 
operations.

The summarized volume of GRE’s outstanding contracts and options at December 31, 2015 was as follows 
(MWh — Megawatt hour and Dth — Decatherm):

Commodity
Electricity
Electricity
Electricity
Electricity
Electricity
Electricity
Electricity
Natural gas
Natural gas
Natural gas
Natural gas

Settlement Dates
January 2016
February 2016
March 2016
April 2016
July 2016
August 2016
September 2016
February 2016
April 2016
July 2016
August 2016

Volume
248,000 MWh
772,800 MWh
82,800 MWh
16,800 MWh
160,000 MWh
184,000 MWh
33,600 MWh
852,500 Dth
200,000 Dth
1,110,000 Dth
800,000 Dth

Item 8. Financial Statements and Supplementary Data.

Our Consolidated Financial Statements and supplementary data and the reports of the independent registered public 
accounting ﬁ rms thereon set forth starting on page F-1 herein are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

53

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Offi  cer and Chief Financial Offi  cer have evaluated the eff ectiveness of our disclosure controls 
and procedures (as deﬁ ned 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 Annual Report on Form 10-K. Based on this evaluation, our Chief 
Executive Offi  cer and Chief Financial Offi  cer have concluded that our disclosure controls and procedures were 
eff ective as of December 31, 2015.

Report of Management on Internal Control over Financial Reporting

We, the management of Genie Energy Ltd. and subsidiaries (the “Company”), are responsible for establishing and 
maintaining adequate internal control over ﬁ nancial reporting of the Company.

The Company’s internal control over ﬁ nancial reporting is deﬁ ned in Rule 13a-15(f) and 15d-15(f) promulgated 
under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s 
principal executive and principal ﬁ nancial offi  cers and eff ected by the Company’s board of directors, management 
and other personnel, to provide reasonable assurance regarding the reliability of ﬁ nancial reporting and the 
preparation of the Company’s ﬁ nancial statements for external purposes in accordance with generally accepted 
accounting principles in the United States and includes those policies and procedures that:

1. 

2. 

Pertain to the maintenance of records that in reasonable detail accurately and fairly reﬂ ect the 
transactions and dispositions of assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of 
ﬁ nancial statements in accordance with generally accepted accounting principles, and that receipts and 
expenditures of the Company are being made only in accordance with authorizations of management and 
directors of the Company; and

3. 

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use 
or disposition of the Company’s assets that could have a material eff ect on the ﬁ nancial statements.

Management has assessed the eff ectiveness of the Company’s internal control over ﬁ nancial reporting as of 
December 31, 2015. In making this assessment, the Company’s management used the criteria established in Internal 
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway 
Commission.

Under the supervision and with the participation of our management, including our principal executive offi  cer and 
principal ﬁ nancial offi  cer, we conducted an evaluation of our internal control over ﬁ nancial reporting, as prescribed 
above, as of December 31, 2015. Based on our evaluation, our principal executive offi  cer and principal ﬁ nancial 
offi  cer concluded that the Company’s internal control over ﬁ nancial reporting as of December 31, 2015 was eff ective 
in all material respects.

Because of its inherent limitations, internal control over ﬁ nancial reporting may not prevent or detect misstatements. 
Projections of any evaluation of eff ectiveness to future periods are subject to the risk that controls may become 
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may 
deteriorate.

BDO USA, LLP has provided an attestation report on the Company’s internal control over ﬁ nancial reporting as of 
December 31, 2015.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over ﬁ nancial reporting during the fourth quarter of 2015 that have 
materially aff ected, or are reasonably likely to materially aff ect, our internal control over ﬁ nancial reporting.

Item 9B. Other Information.

None.

54

Part III

Item 10. Directors, Executive Offi  cers and Corporate Governance.

The following is a list of our directors and executive offi  cers along with the speciﬁ c information required by 
Rule 14a-3 of the Securities Exchange Act of 1934:

Executive Offi  cers

Howard S. Jonas — Chairman of the Board and Chief Executive Offi  cer

Avi Goldin — Chief Financial Offi  cer

Geoff rey Rochwarger — Vice Chairman

Ira Greenstein — President

Michael Jonas — Executive Vice President

Michael Stein — Executive Vice President

Directors

Howard S. Jonas — Chairman of the Board and Chief Executive Offi  cer of the Company

James A. Courter — Vice Chairman of the Board of the Company

W. Wesley Perry — Owner and operator of S.E.S. Investments, Ltd., an oil and gas investment company

Alan B. Rosenthal — Founder and managing partner of ABR Capital Financial Group LLC, an investment fund

Allan Sass — Former President and Chief Executive Offi  cer of Occidental Oil Shale Corporation, a subsidiary of 
Occidental Petroleum

The remaining information required by this Item will be contained in our Proxy Statement for our Annual 
Stockholders Meeting, which will be ﬁ led with the Securities and Exchange Commission within 120 days after 
December 31, 2015, and which is incorporated by reference herein.

Corporate Governance

We have included as exhibits to this Annual Report on Form 10-K certiﬁ cates of our Chief Executive Offi  cer and 
Chief Financial Offi  cer certifying the quality of our public disclosure.

We make available free of charge through the investor relations page of our web site (www.idt.net/ir) our Annual 
Reports on Form 10–K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to 
those reports, and all beneﬁ cial ownership reports on Forms 3, 4 and 5 ﬁ led by directors, offi  cers and beneﬁ cial 
owners of more than 10% of our equity, as soon as reasonably practicable after such reports are electronically ﬁ led 
with the Securities and Exchange Commission. We have adopted codes of business conduct and ethics for all of 
our employees, including our principal executive offi  cer, principal ﬁ nancial offi  cer and principal accounting offi  cer. 
Copies of the codes of business conduct and ethics are available on our web site.

Our web site and the information contained therein or incorporated therein are not intended to be incorporated into 
this Annual Report on Form 10-K or our other ﬁ lings with the SEC.

Item 11. Executive Compensation.

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders 
Meeting, which will be ﬁ led with the Securities and Exchange Commission within 120 days after December 31, 
2015, and which is incorporated by reference herein.

55

Item 12. Security Ownership of Certain Beneﬁ cial Owners and Management and Related Stockholder 
Matters.

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders 
Meeting, which will be ﬁ led with the Securities and Exchange Commission within 120 days after December 31, 
2015, and which is incorporated by reference herein.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders 
Meeting, which will be ﬁ led with the Securities and Exchange Commission within 120 days after December 31, 
2015, and which is incorporated by reference herein.

Item 14. Principal Accounting Fees and Services.

The information required by this Item will be contained in our Proxy Statement for our Annual Stockholders 
Meeting, which will be ﬁ led with the Securities and Exchange Commission within 120 days after December 31, 
2015, and which is incorporated by reference herein.

56

Part IV

Item 15. Exhibits, Financial Statement Schedules.

(a)  The following documents are ﬁ led as part of this Report:

1. 

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firms on Consolidated Financial Statements

Consolidated Financial Statements covered by Report of Independent Registered Public Accounting 
Firms

2. 

Financial Statement Schedules.

All schedules have been omitted since they are either included in the Notes to Consolidated Financial 
Statements or not required or not applicable.

3. 

The exhibits listed in paragraph (b) of this item. Exhibit Numbers 10.01, 10.03 and 10.04 are 
management contracts or compensatory plans or arrangements.

(b)  Exhibits.

Exhibit 
Number
3.01(1)

3.02(2)

Amended and Restated Certiﬁcate of Incorporation of the Registrant.

Description of Exhibits

Amended and Restated Certiﬁcate of Designation of Series 2012-A Preferred Stock of the 
Registrant.

3.03(3)

Amended and Restated By-Laws of the Registrant.

10.01(4)

10.03(5)

10.04(6) 

10.05(7)

Second Amended and Restated Employment Agreement, effective as of July 30, 2014, between the 
Registrant and Howard S. Jonas.

Amended and Restated Employment Agreement, effective as of August 19, 2014, between the 
Registrant and Avi Goldin.

Addendum to Amended and Restated Employment Agreement, effective as of April 20, 2015, 
between the Registrant and Avi Golden.

Employment Agreement, dated June 17, 2015, between the Registrant, Genie Energy E&P Ltd. and 
Geoffrey Rochwarger.

10.06(8)

2011 Stock Option and Incentive Plan of Genie Energy Ltd.

 10.07(1)

Preferred Supplier Agreement between IDT Energy, Inc. and BP Energy Company, dated June 29, 
2009, as amended.

21.01*

Subsidiaries of the Registrant.

23.01*

Consent of BDO USA, LLP

31.01*

Certiﬁcation of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02*

Certiﬁcation of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

57

Exhibit 
Number
32.01*

Description of Exhibits
Certiﬁcation of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02*

Certiﬁcation of Chief Financial Officer pursuant to Section 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.DEF*

XBRL Taxonomy Extension Deﬁnition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

* 
(1) 
(2) 
(3) 
(4) 
(5) 
(6) 
(7) 
(8) 

ﬁ led herewith.
Incorporated by reference to Form 10-12G/A, ﬁ led October 7, 2011.
Incorporated by reference to Exhibit 99(A)(1)(A) to Schedule TO, ﬁ led May 22, 2014.
Incorporated by reference to Form 8-K ﬁ led August 9, 2012.
Incorporated by reference to Form 8-K, ﬁ led August 1, 2014.
Incorporated by reference to Form 8-K, ﬁ led August 25, 2014.
Incorporated by reference to Form 8-K/A, ﬁ led May 14, 2015.
Incorporated by reference to Form 8-K/A, ﬁ led June 23, 2015.
Incorporated by reference to Form 10-12G/A, ﬁ led October 27, 2011.

58

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 
caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

Signatures

GENIE ENERGY LTD.

By:

/s/ Howard S. Jonas
Chairman of the Board and 
Chief Executive Officer

Date: March 15, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been 
signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

/s/ Howard S. Jonas
Howard S. Jonas

/s/ Avi Goldin
Avi Goldin

/s/ James A. Courter
James A. Courter

/s/ W. Wesley Perry
W. Wesley Perry

/s/ Alan B. Rosenthal
Alan B. Rosenthal

/s/ Allan Sass
Allan Sass

Titles

Date

Chairman of the Board and Director and Chief
Executive Officer (Principal Executive Officer)

March 15, 2016

Chief Financial Officer (Principal Financial Officer)

March 15, 2016

Vice Chairman of the Board and Director

March 15, 2016

Director

Director

Director

March 15, 2016

March 15, 2016

March 15, 2016

59

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Genie Energy Ltd.
Newark, New Jersey

We have audited the internal control over ﬁ nancial reporting of Genie Energy Ltd. (a Delaware corporation) and 
subsidiaries’ (the “Company”) as of December 31, 2015, based on criteria established in Internal Control–Integrated 
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 
The Company’s management is responsible for maintaining eff ective internal control over ﬁ nancial reporting and for 
its assessment of the eff ectiveness of internal control over ﬁ nancial reporting, included in the accompanying Report 
of Management on Internal Control Over Financial Reporting under Item 9A. Our responsibility is to express an 
opinion on the Company’s internal control over ﬁ nancial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board 
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about 
whether eff ective internal control over ﬁ nancial reporting was maintained in all material respects. Our audit included 
obtaining an understanding of internal control over ﬁ nancial reporting, assessing the risk that a material weakness 
exists, and testing and evaluating the design and operating eff ectiveness of internal control based on the assessed 
risk . Our audit also included performing such other procedures as we considered necessary in the circumstances. We 
believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over ﬁ nancial reporting is a process designed to provide reasonable assurance 
regarding the reliability of ﬁ nancial reporting and the preparation of ﬁ nancial statements for external purposes in 
accordance with generally accepted accounting principles. A company’s internal control over ﬁ nancial reporting 
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, 
accurately and fairly reﬂ ect the transactions and dispositions of the assets of the company; (2) provide reasonable 
assurance that transactions are recorded as necessary to permit preparation of ﬁ nancial statements in accordance 
with generally accepted accounting principles, and that receipts and expenditures of the company are being made 
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable 
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s 
assets that could have a material eff ect on the ﬁ nancial statements.

Because of its inherent limitations, internal control over ﬁ nancial reporting may not prevent or detect misstatements. 
Also, projections of any evaluation of eff ectiveness to future periods are subject to the risk that controls may become 
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may 
deteriorate.

In our opinion, the Company maintained, in all material respects, eff ective internal control over ﬁ nancial reporting as 
of December 31, 2015, based on COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board 
(United States), the consolidated balance sheets  of the Company as of December 31, 2015 and 2014, and the related 
consolidated statements of operations, comprehensive loss, equity, and cash ﬂ ows for each of the three years in the 
period ended December 31, 2015  and our report dated March 15, 2016 expressed an unqualiﬁ ed opinion thereon .

/s/ BDO USA, LLP

Woodbridge, New Jersey
March 15, 2016

60

GENIE ENERGY LTD.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Consolidated Balance Sheets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-2

F-3

Consolidated Statements of Operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-4

Consolidated Statements of Comprehensive Loss  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-5

Consolidated Statements of Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-6

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-8

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Genie Energy Ltd.
Newark, New Jersey

We have audited the accompanying consolidated balance sheets of Genie Energy Ltd. (a Delaware corporation) 
and subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of 
operations, comprehensive loss, equity, and cash ﬂ ows for each of the three years in the period ended December 31, 
2015. These ﬁ nancial statements are the responsibility of the Company’s management. Our responsibility is to 
express an opinion on these ﬁ nancial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board 
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about 
whether the ﬁ nancial statements are free of material misstatement. An audit also includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the ﬁ nancial statements , assessing the accounting 
principles used and signiﬁ cant estimates made by management, as well as evaluating the overall ﬁ nancial statement 
presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated ﬁ nancial statements referred to above present fairly, in all material respects, the 
ﬁ nancial position of Genie Energy Ltd. and subsidiaries as of December 31, 2015 and 2014, and the results of their 
operations and their cash ﬂ ows for each of the three years in the period ended December 31, 2015, in conformity 
with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board 
(United States), the Company’s internal control over ﬁ nancial reporting as of December 31, 2015, based on criteria 
established in Internal Control–Integrated Framework (2013), and our report dated March 15, 2016 expressed an 
unqualiﬁ ed opinion thereon.

/s/ BDO USA, LLP

Woodbridge, New Jersey
March 15, 2016

F-2

GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS

December 31 (in thousands)
ASSETS
CURRENT ASSETS:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Restricted cash—short-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certiﬁcates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts receivable, net of allowance for doubtful accounts of $182 and 

$227 at December 31, 2015 and 2014, respectively . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized exploration costs—unproved oil and gas property  . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Restricted cash—long-term  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets, net  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:

Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advances from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to IDT Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Energy hedging contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Revolving credit loan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
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 December 31, 
2015 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Class A common stock, $.01 par value; authorized shares—35,000; 1,574 

shares issued and outstanding at December 31, 2015 and 2014  . . . . . . . . . . .

Class B common stock, $.01 par value; authorized shares—200,000; 23,239 
and 23,178 shares issued and 23,041 and 22,984 shares outstanding at 
December 31, 2015 and 2014, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost, consisting of 198 and 194 shares of Class B common 

at December 31, 2015 and 2014, respectively . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deﬁcit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Genie Energy Ltd. stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Noncontrolling interests:

Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Receivable for issuance of equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL EQUITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL LIABILITIES AND EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

See accompanying notes to consolidated ﬁ nancial statements.

F-3

2015

2014

38,786 $ 
10,894
8,850

27,222
11,440
11,328
6,104
114,624
1,347
26,878
3,663
1,802
1,642
5,859
155,815 $ 

12,642 $ 
19,424
1,055
923
438
2,192
878
37,552
2,000
1,566
41,118

71,895
10,609
4,669

31,427
11,166
5,713
5,430
140,909
1,902
—
3,663
1,023
1,463
3,968
152,928

14,881
10,913
403
543
542
4,003
797
32,082
—
1,503
33,585

19,743

19,743

16

16

232
124,449

(1,570)
154
(19,647)
123,377

(7,013)
(1,667)
(8,680)
114,697
155,815 $ 

232
114,322

(1,543)
10
(7,759)
125,021

(4,678)
(1,000)
(5,678)
119,343
152,928

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)
REVENUES:

Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Natural gas  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPERATING EXPENSES, (GAINS) AND LOSSES:

Selling, general and administrative(i) . . . . . . . . . . . . . . . . . . .
Bad debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . .
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to estimated contingent payments . . . . . . . . . . .
Equity in the net loss of AMSO, LLC . . . . . . . . . . . . . . . . . .
(Loss) income from operations . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . .
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests  . .
NET LOSS ATTRIBUTABLE TO GENIE ENERGY LTD. 
Dividends on preferred stock  . . . . . . . . . . . . . . . . . . . . . . . .
NET LOSS ATTRIBUTABLE TO GENIE ENERGY LTD. 

Year ended December 31,
2014

2013

2015

167,336 $ 
40,757
2,016
210,109
141,015
69,094

214,511 $ 
57,868
2,652
275,031
223,094
51,937

216,668
62,506
—
279,174
213,416
65,758

66,040
(29)
1,985
6,583
—
—
397
(5,882)
411
(2,447)
(193)
(8,111)
(525)
(8,636)
1,179
(7,457)
(1,481)

61,372
310
5,538
6,971
3,562
(206)
—
(25,610)
469
(2,560)
389
(27,312)
(95)
(27,407)
921
(26,486)
(1,416)

49,749
800
7,357
4,032
—
—
3,194
626
449
(3,217)
(444)
(2,586)
(2,755)
(5,341)
(562)
(5,903)
(1,223)

COMMON STOCKHOLDERS  . . . . . . . . . . . . . . . . . . . . $ 

(8,938) $ 

(27,902) $ 

(7,126)

Basic and diluted loss per share attributable to Genie Energy 

Ltd. common stockholders: . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

(0.40) $ 

(1.31) $ 

(0.36)

Weighted-average number of shares used in calculation of 

basic and diluted loss per share . . . . . . . . . . . . . . . . . . . . . . .

22,135

21,256

19,668

(i) Stock-based compensation included in selling, general and 

administrative expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

5,229 $ 

10,758 $ 

4,180

See accompanying notes to consolidated ﬁ nancial statements.

F-4

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Other comprehensive income (loss):

Change in unrealized loss on available-for-sale securities, 

net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . .
COMPREHENSIVE LOSS . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive loss (income) attributable to noncontrolling 
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENIE 

Year ended December 31,
2014

2013

2015

(8,636) $ 

(27,407) $ 

(5,341)

—
142
142
(8,494)

1,181

—
(700)
(700)
(28,107)

886

15
441
456
(4,885)

(543)

ENERGY LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

(7,313) $ 

(27,221) $ 

(5,428)

See accompanying notes to consolidated ﬁ nancial statements.

F-5

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF EQUITY (in thousands)

Genie Energy Ltd. Stockholders

Class B
Class A
Common Stock
Common Stock
Preferred Stock
Shares Amount Shares Amount Shares Amount

Additional 
Paid-In
Capital

Accumulated 
Other 

Treasury
Stock

Comprehensive Retained
earnings
Income (Loss)

Noncontrolling 
Interests

Non 
controlling
Interests

Receivable 
for 
issuance
of equity

Total
Equity

BALANCE AT 

DECEMBER 31, 2012 . .  1,605 $ 13,639

1,574 $ 

16 19,827 $ 

198 $  80,196 $ 

(204) $ 

270 $ 28,375 $ 

(3,393) $ 

(1,000) $  118,097

Dividends on preferred 

stock  . . . . . . . . . . . . . . 

—

—

—

—

—

—

—

—

—

(920)

—

—

(920)

Restricted Class B 
common stock 
purchased from 
employees . . . . . . . . . . 

Stock-based 

compensation  . . . . . . . 

Restricted stock issued 
to employees and 
directors . . . . . . . . . . . . 

Exercise of stock 

options . . . . . . . . . . . . . 

Grants of equity of 

subsidiaries . . . . . . . . . 

Sales of equity of 

subsidiaries . . . . . . . . . 

Issuance of preferred 

stock of subsidiary  . . . 

Issuance of Class B 
common stock to 
holders of deferred 
stock units of 
subsidiary  . . . . . . . . . . 

Distributions to 

noncontrolling 
interests . . . . . . . . . . . . 

Exchange of Class B 
common stock for 
Preferred stock  . . . . . . 

Other comprehensive 

—

—

—

—

—

—

—

—

—

—

(269)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

227

13

—

—

—

—

—

3

—

—

—

—

3,841

—

93

357

1,129

(2,000)

—

—

—

—

—

1,836

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

475

—

—

—

—

—

—

—

—

—

—

—

(357)

(707)

2,000

—

(1,836)

—

—

—

(42)

—

(19)

—

—

—

—

—

—

—

—

—

—

—

(269)

3,841

3

93

—

422

—

—

(42)

—

456

— (5,903)

562

—

(5,341)

—

—

—

—

—

—

—

—

—

—

—

312

2,664

— (312)

(3)

(2,661)

—

—

income . . . . . . . . . . . . . 

—

—

—

—

Net (loss) income for 
the year ended 
December 31, 2013 . . . 

BALANCE AT 

—

—

—

—

—

—

—

—

—

DECEMBER 31, 2013 . .  1,917

16,303

1,574

16 19,755

198

82,791

(473)

745

21,552

(3,792)

(1,000)

116,340

F-6

GENIE ENERGY LTD.

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

Genie Energy Ltd. Stockholders

Noncontrolling 
Interests

Class B 
Class A 
Common Stock
Common Stock
Preferred Stock
Shares Amount Shares Amount Shares Amount

Additional 
Paid-In
Capital

Treasury
Stock

Accumulated 
Other 
Comprehensive 
Income
(Loss)

Retained 
Earnings 
(Accumulated
Deﬁcit)

Non 
controlling
Interests

Receivable 
for 
issuance of
equity

Total
Equity

16,303

1,574

16 19,755

198

82,791

(473)

745

21,552

(3,792)

(1,000)

116,340

BALANCE AT 

DECEMBER 31, 2013 .  1,917
Dividends on preferred 
stock  . . . . . . . . . . . . . 

—

Dividends declared on 

common stock ($0.06 
per share) . . . . . . . . . . 

Restricted Class B 
common stock 
purchased from 
employees . . . . . . . . . 

Stock-based 

compensation  . . . . . . 

—

—

Restricted stock issued 
to employees and 
directors . . . . . . . . . . . 

—
Exercise of stock options  —
Repurchases of Class 
B common stock 
through repurchase 
program . . . . . . . . . . . 

—

Sales of Class B 

common stock to 
Howard S. Jonas . . . . 

Exchange of Class B 
common stock for 
Preferred stock  . . . . . 

Other comprehensive 

405

3,440

—

—

loss  . . . . . . . . . . . . . . 

—

—

Net loss for the year 

ended December 31, 
2014. . . . . . . . . . . . . . 

BALANCE AT 

—

—

—

DECEMBER 31, 2014 .  2,322
Dividends on preferred 
stock  . . . . . . . . . . . . . 

—

—

—

—

—

—

Dividends declared on 

common stock ($0.12 
per share) . . . . . . . . . . 

Restricted Class B 
common stock 
purchased from 
employees . . . . . . . . . 

Stock-based 

compensation  . . . . . . 

—

—

Restricted stock issued 
to employees and 
directors . . . . . . . . . . . 

—
Exercise of stock options  —
Exercise of GOGAS 

stock option . . . . . . . . 
Collection of receivables 
for issuance of equity 
Subsidiary equity grant 

—

—

reclassiﬁed to liability  —

Payment for option 

to purchase 
noncontrolling 
interests . . . . . . . . . . . 

Other comprehensive 

income . . . . . . . . . . . . 

Net loss for the year 

ended December 31, 
2015. . . . . . . . . . . . . . 

BALANCE AT 

—

—

—

—

—

—
—

—

—

—

—

—

—

—

—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—
—

—

—

—
—

—

—

—

—

—
—

—

—

—

—

224
4

—

—

—

—

2
—

—

—

—

—

—

(224)

10,423

—
28

—

—
—

—

—

—

—

—

—

(846)

—

—

—

— 3,600

36

24,516

19,743

1,574

16 23,178

232

114,322

(1,543)

— (405)

(4)

(3,436)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—
—

—

—

—

—

—

—

—

—

—

—

36
25

—

—

—

—

—

—

—

—

—

—

—
—

—

—

—

—

—

—

—

—

—

—

—

(27)

5,095

—
174

5,979

79

(1,200)

—

—

—

—

—
—

—

—

—

—

—

—

—

—

—

—

—
—

—

—

—

(735)

—

10

—

—

—

—

—
—

—

—

—

—

144

(1,352)

(1,473)

—

—

—
—

—

—

—

—

—

—

—

—

—
—

—

—

—

35

—

(1,352)

—

(1,473)

—

—

—
—

(224)

10,423

2
28

—

(846)

—

24,552

—

—

—

(700)

(26,486)

(921)

— (27,407)

(7,759)

(4,678)

(1,000)

119,343

(1,481)

(2,950)

—

—

—
—

—

—

—

—

—

—

—

—

—

—
—

—

(1,481)

—

(2,950)

—

—

—
—

(27)

5,095

—
174

(979)

(2,500)

2,500

—

—

(175)

(2)

1,833

1,912

—

(1,200)

—

—

(175)

142

—

(7,457)

(1,179)

—

(8,636)

DECEMBER 31, 
2015. . . . . . . . . . . . . .  2,322 $ 19,743

1,574 $ 

16 23,239 $ 

232 $  124,449 $  (1,570) $ 

154 $ 

(19,647) $ 

(7,013) $ 

(1,667) $  114,697

See accompanying notes to consolidated ﬁ nancial statements.

F-7

GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
OPERATING ACTIVITIES
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Gain on adjustment to estimated contingent payments  . . . . . . . . . . . . . . . . . . . . . . 
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Provision for doubtful accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Loss on disposal of property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Equity in the net loss of AMSO, LLC  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Change in assets and liabilities, net of effect of acquisitions:

Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other current assets and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Trade accounts payable, accrued expenses and other current liabilities  . . . . . . . . . 
Advances from customers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Due to IDT Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net cash (used in) provided by operating activities  . . . . . . . . . . . . . . . . . . . . . . . . . . . 
INVESTING ACTIVITIES
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Investments in capitalized exploration costs – unproved oil and gas property . . . . . . . 
Capital contributions to AMSO, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Payment for acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Repayment of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Issuance of notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Purchases of certiﬁcates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from maturities of certiﬁcates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from maturities of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net cash (used in) provided by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
FINANCING ACTIVITIES
Dividends paid  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Payment for acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from revolving credit loan payable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from sales of Class B common stock to Howard S. Jonas . . . . . . . . . . . . . . . 
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from sales of equity of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Collection of receivables for issuance of equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Payment for option to purchase noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . 
Repurchases of Class B common stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net cash provided by (used in) ﬁnancing activities  . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . 
Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 
Cash and cash equivalents at beginning of period  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Year ended December 31,
2014

2015

2013

(8,636) $ 

(27,407) $ 

(5,341)

428
—
—
(180)
(29)
5,229
156
397

(1,062)
4,234
(274)
(5,615)
(2,346)
3,689
652
(104)
380
(3,081)

(324)
(26,969)
(250)
—
50
—
(8,820)
4,688
—
—
(31,625)

(4,431)
(358)
2,000
—
—
2,500
174
1,912
(175)
(27)
1,595
2
(33,109)
71,895
38,786

132
3,562
(206)
(622)
310
10,758
—
—

3,923
11,189
(7,822)
(2,306)
(2,664)
(5,718)
(700)
1
(1,532)
(19,102)

(1,437)
—
—
—
—
(82)
(4,655)
4,334
—
—
(1,840)

(2,825)
(1,138)
—
24,552
—
—
28
—
—
(1,070)
19,547
(595)
(1,990)
73,885
71,895

3
2,647

$ 

$ 
$ 

$ 

$ 
$ 

110
—
—
(241)
800
4,180
37
3,194

(4,713)
(2,679)
(700)
(93)
(243)
6,883
(746)
(59)
831
1,220

(313)
—
(2,700)
(772)
—
(750)
(4,329)
2,205
(3)
10,433
3,771

(1,131)
—
—
—
(42)
422
93
—
—
(269)
(927)
412
4,476
69,409
73,885

12
2,069

—
—
2,475

Cash payments made for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Cash payments made for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

10
49

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND 

INVESTING ACTIVITIES
Subsidiary equity grant reclassiﬁed to liability  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Receivables for issuance of equity of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Liabilities incurred for acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

1,200
2,500

$ 
$ 
— $ 

— $ 
— $ 
— $ 

See accompanying notes to consolidated ﬁ nancial statements.

F-8

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁ cant Accounting Policies

Description of Business

Genie Energy Ltd. (“Genie”), a Delaware corporation, was incorporated in January 2011. Genie owns 99.3% of its 
subsidiary, Genie Energy International Corporation (“GEIC”), which owns 100% of Genie Retail Energy (“GRE”) 
and 92% of Genie Oil and Gas, Inc. (“GOGAS”). The “Company” in these ﬁ nancial statements refers to Genie, 
Genie Retail Energy and Genie Oil and Gas, and their respective subsidiaries, on a consolidated basis.

Genie’s principal businesses consist of the following:

• 

Genie Retail Energy operates retail energy providers (“REPs”), including IDT Energy, Inc. (“IDT 
Energy”) and Residents Energy, Inc. (“Residents Energy”), 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 86.5% interest in Afek Oil and Gas, Ltd. (“Afek”), which operates an exploration project in the 
Golan Heights in Northern Israel, and

early stage projects including (1) an 88.4% interest in Genie Mongolia, Inc. (“Genie Mongolia”), 
an oil shale exploration project in Central Mongolia, which is inactive (2) a 98.3% interest in 
American Shale Oil Corporation (“AMSO”), which holds and manages a 41.3% interest in 
American Shale Oil, L.L.C. (“AMSO, LLC”), an oil shale development project in Colorado, and 
(3) an 86.1% interest in Israel Energy Initiatives, Ltd. (“IEI”), an oil shale development project in 
Israel, which is inactive.

GRE has outstanding deferred stock units granted to directors and employees that represent an interest of 3.9% of 
the equity of GRE.

On February 1, 2016, Israel’s Northern District Planning and Building Committee approved a two-year permit 
extension for Afek to continue to conduct its up to ten-well oil and gas exploration program. The original permit 
was for a one-year period, which commenced in February 2015. This extension is expected to cover the remainder 
of Afek’s ongoing exploratory program in the area covered by it exploratory license issued by Israel’s National 
Infrastructure, Energy and Water Ministry. The exploratory license is set to expire in April 2016, the Company is 
taking the required steps to seek  an extension of this license.

The Company was formerly a subsidiary of IDT Corporation (“IDT”). On October 28, 2011, the Company was 
spun-off  by IDT and became an independent public company through a pro rata distribution of the Company’s 
common stock to IDT’s stockholders (the “Spin-Off ”).

Basis of Consolidation

The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an 
evaluation of the signiﬁ cant terms of each investment that explicitly grant or suggest evidence of control or inﬂ uence 
over the operations of the investee and also includes the identiﬁ cation of any variable interests in which the Company 
is the primary beneﬁ ciary. The consolidated ﬁ nancial statements include the Company’s controlled subsidiaries and 
variable interest entities where the Company is the primary beneﬁ ciary (see Note 11). All signiﬁ cant intercompany 
accounts and transactions between the consolidated entities are eliminated.

Accounting for Investments

Investments in businesses that the Company does not control, but in which the Company has the ability to exercise 
signiﬁ cant inﬂ uence over operating and ﬁ nancial matters, are accounted for using the equity method. The Company’s 

F-9

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

investment in AMSO, LLC is accounted for using the equity method. The Company periodically evaluates its 
equity method investment for impairment due to declines considered to be other than temporary. If the Company 
determines that a decline in fair value is other than temporary, then a charge to earnings would be recorded, and a 
new basis in the investment is established.

Use of Estimates

The preparation of ﬁ nancial statements in conformity with accounting principles generally accepted in the United 
States of America (“U.S. GAAP”) requires management to make estimates and assumptions that aff ect the amounts 
reported in the ﬁ nancial statements and accompanying notes. Actual results may diff er from those estimates.

Revenue Recognition

Revenues from GRE’s sale of electricity and natural gas are recognized under the accrual method based on deliveries 
of electricity and natural gas to customers. Revenues from electricity and natural gas delivered but not yet billed are 
estimated and recorded as accounts receivable. Cash received in advance from customers under billing arrangement 
is reported as deferred revenue and is included in “Advances from customers” in the accompanying consolidated 
balance sheets. GOGAS does not yet generate revenues.

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 will adopt this standard on January 1, 2018. Entities have the option of using either a full retrospective 
or modiﬁ ed retrospective approach for the adoption of the standard. The Company is evaluating the impact that the 
standard will have on its consolidated ﬁ nancial statements.

Direct Cost of Revenues

Direct cost of revenues for GRE consists primarily of the cost of natural gas and electricity sold, and also includes 
scheduling costs, Independent System Operator (“ISO”) fees, pipeline costs and utility service charges. In addition, 
the changes in the fair value of GRE’s futures contracts, swaps and put and call options are recorded in direct cost of 
revenues. GOGAS does not yet incur direct cost of revenues as primarily all of its expenses are classiﬁ ed as either 
research and development or exploration costs.

Research and Development Costs

Research and development costs are incurred primarily by IEI, Afek and Genie Mongolia. Costs for research and 
development are charged to expense as incurred.

Oil and Gas Exploration Costs

The Company accounts for its oil and gas activities under the successful eff orts 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. At December 31, 2015 and 2014, the Company had capitalized 
exploration costs of $26.9 million and nil, respectively. The Company is in the process of determining if proved 
reserves have been found. If no proved reserves are found, the related capitalized exploration costs will be expensed.

F-10

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

In the consolidated statements of operations, expense relating to Afek’s oil and gas exploration activities of 
$7.0 million and $4.0 million in 2014 and 2013, respectively, previously included in “Research and development 
expense”, were reclassiﬁ ed to “Exploration expense” to conform to the current year’s presentation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when 
purchased to be cash equivalents.

Marketable Securities

The Company classiﬁ ed its investments in marketable securities as “available-for-sale.” Available-for-sale securities 
are required to be carried at their fair value, with unrealized gains and losses (net of income taxes) that are 
considered temporary in nature recorded in “Accumulated other comprehensive income” in the accompanying 
consolidated balance sheets. The Company uses the speciﬁ c identiﬁ cation method in computing the gross realized 
gains and gross realized losses on the maturities and sales of marketable securities. The Company periodically 
evaluated its investments in marketable securities for impairment due to declines in market value considered 
to be other than temporary. Such impairment evaluations included, in addition to persistent, declining market 
prices, general economic and Company-speciﬁ c evaluations. If the Company determined that a decline in market 
value was other than temporary, then a charge to operations was recorded in “Other (expense) income, net” in the 
accompanying consolidated statements of operations and a new cost basis in the investment was established.

Inventory

Inventory consists of natural gas, which is stored at various third parties’ underground storage facilities, of 
$1.6 million and $2.5 million at December 31, 2015 and 2014, respectively. Inventory also includes renewable 
energy credits of $9.8 million and $8.7 million at December 31, 2015 and 2014, respectively. Natural gas inventory 
is valued at a weighted average cost, which is based on the purchase price of the natural gas and the cost to transport, 
plus or minus injections or withdrawals.

In July 2015, the FASB issued an Accounting Standards Update (“ASU”) that simpliﬁ es the subsequent 
measurement of inventory. The amendments in this ASU do not apply to inventory that is measured using last-in, 
ﬁ rst-out or the retail inventory method. The ASU changes the measurement of inventory to the lower of cost and net 
realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably 
predictable costs of completion, disposal and transportation. The Company will adopt the amendments in this ASU 
on January 1, 2017. The Company is evaluating the impact that the ASU will have on its consolidated ﬁ nancial 
statements.

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. GRE holds renewable energy credits for both sale and use, and treats the credits as a 
government incentive to encourage the construction of renewable power plants. Renewable energy credits are valued 
at cost, which is the purchase price. Gains and losses from the sale of renewable energy credits are recognized in 
direct cost of revenues when the credits are transferred to the buyer.

Property and Equipment

Computer software and development, computers and computer hardware, laboratory and drilling equipment and 
offi  ce equipment and other are recorded at cost and are depreciated on a straight-line basis over their estimated 

F-11

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

useful lives, which range as follows: computer software and development—2, 3 or 5 years; computers and computer 
hardware—5 years, laboratory and drilling equipment—7 years, and offi  ce equipment and other —5 or 7 years. 
Leasehold improvements included in offi  ce equipment and other are recorded at cost and are depreciated on a 
straight-line basis over the term of their lease or their estimated useful lives, whichever is shorter.

Long-Lived Assets

The Company tests the recoverability of its long-lived assets with ﬁ nite useful lives whenever events or changes 
in circumstances indicate that the carrying value of the asset may not be recoverable. The Company tests the 
recoverability based on the projected undiscounted cash ﬂ ows to be derived from such asset. If the projected 
undiscounted future cash ﬂ ows are less than the carrying value of the asset, the Company will record an impairment 
loss based on the diff erence between the estimated fair value and the carrying value of the asset. The Company 
generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash 
ﬂ ows from such asset using an appropriate discount rate. Cash ﬂ ow projections and fair value estimates require 
signiﬁ cant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, 
the Company may be required to record impairments in future periods and such impairments could be material.

Goodwill and Indeﬁ nite Lived Intangible Assets

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identiﬁ able net assets acquired. 
Goodwill and other indeﬁ nite lived intangible assets are not amortized. These assets are reviewed annually (or 
more frequently under various conditions) for impairment using a fair value approach. The goodwill impairment 
assessment involves estimating the fair value of the reporting unit and comparing it to its carrying amount, which is 
known as Step 1. If the carrying value of the reporting unit exceeds its estimated fair value, Step 2 is performed to 
determine if an impairment of goodwill is required. The fair value of the reporting unit is estimated using discounted 
cash ﬂ ow methodologies, as well as considering third party market value indicators. Goodwill impairment 
is measured by the excess of the carrying amount of the reporting unit’s goodwill over its implied fair value. 
Calculating the fair value of the reporting units, and allocating the estimated fair value to all of the tangible assets, 
intangible assets and liabilities, requires signiﬁ cant estimates and assumptions by management. Should the estimates 
and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company may be required 
to record impairments to its goodwill in future periods and such impairments could be material.

The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform 
the two-step quantitative goodwill impairment test. However, the Company may elect to perform the two-step 
quantitative goodwill impairment test even if no indications of a potential impairment exist.

For the impairment test of the Company’s indeﬁ nite-lived intangible assets, a quantitative impairment test is only 
necessary if the Company determines that it is more likely than not that an indeﬁ nite-lived intangible asset is 
impaired based on an assessment of certain qualitative factors.

Derivative Instruments and Hedging Activities

The Company records its derivatives instruments at their respective fair values. The accounting for changes in the 
fair value (that is, gains or losses) of a derivative instrument is dependent upon whether the derivative has been 
designated and qualiﬁ es as part of a hedging relationship and further, on the type of hedging relationship.

Due to the volatility of electricity and natural gas prices, GRE enters into futures contracts, swaps and put and 
call options as hedges against unfavorable ﬂ uctuations in market prices of electricity and natural gas and to 
reduce exposure from price ﬂ uctuations. The Company does not designate its derivative instruments to qualify for 
hedge accounting, accordingly the futures contracts, swaps and put and call options are recorded at fair value as a 
current asset or liability and any changes in fair value are recorded in “Direct cost of revenues” in the consolidated 
statements of operations.

F-12

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

In addition to the above, GRE utilizes forward physical delivery contracts for a portion of its purchases of electricity and 
natural gas, which are deﬁ ned as commodity derivative contracts. Using the exemption available for qualifying contracts, 
GRE applies the normal purchase and normal sale accounting treatment to its forward physical delivery contracts, 
thereby these contracts are not adjusted to fair value. Accordingly, GRE recognizes revenue from customer sales, and the 
related direct cost of revenues at the contracted price, as electricity and natural gas is delivered to retail customers.

In August 2015, the FASB issued an ASU specifying that entities would not be precluded from applying the normal 
purchases and normal sales exception to derivative accounting to forward contracts for the physical delivery of 
electricity in nodal energy markets that result in parties incurring locational marginal pricing charges or credits. The 
ASU states that the use of locational marginal pricing by an ISO to determine a transmission charge or credit in a 
nodal energy market would not constitute a net settlement of a forward contract for the purchase or sale of electricity, 
even when legal title to the electricity is conveyed to the ISO during transmission. As a result, these contracts could 
meet the physical delivery criterion in U.S. GAAP and qualify for the normal purchases and normal sales exception 
to derivative accounting if they meet all of the other criteria. This ASU was eff ective in August 2015. The adoption of 
this ASU did not aff ect the Company’s ﬁ nancial position, results of operations or cash ﬂ ows.

Repairs and Maintenance

The Company charges the cost of repairs and maintenance, including the cost of replacing minor items not 
constituting substantial betterment, to selling, general and administrative expense as these costs are incurred.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated to U.S. Dollars at 
end-of-period rates of exchange, and their monthly results of operations are translated to U.S. Dollars at the average 
rates of exchange for that month. Gains or losses resulting from such foreign currency translations are recorded in 
“Accumulated other comprehensive income” in the accompanying consolidated balance sheets. Foreign currency 
transaction gains and losses are reported in “Other (expense) income, net” in the accompanying consolidated 
statements of operations.

Advertising Expense

Cost of advertising for customer acquisitions are charged to selling, general and administrative expense in the period 
in which it is incurred. Most of the advertisements are in print, over the radio, or direct mail. In the years ended 
December 31, 2015, 2014 and 2013, advertising expense included in selling, general and administrative expense was 
$0.9 million, $0.3 million and $0.2 million, respectively.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary 
diff erences between the ﬁ nancial statements carrying amounts of existing assets and liabilities and their respective 
tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred 
tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future 
taxable income during the period in which related temporary diff erences become deductible. The Company considers 
the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its 
assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates 
expected to apply to taxable income in the years in which those temporary diff erences are expected to be recovered 
or settled. The eff ect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the 
period that includes the enactment date of such change.

In November 2015, the FASB issued an ASU to simplify the presentation of deferred income taxes. The amendments 
in the ASU require that deferred tax liabilities and assets be classiﬁ ed as noncurrent in a classiﬁ ed statement of 
ﬁ nancial position instead of separated into current and noncurrent amounts. The Company adopted the amendments 

F-13

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

in this ASU on October 1, 2015. As a result, the Company reclassiﬁ ed deferred income tax assets, net of $1.5 million 
at December 31, 2014 from current to noncurrent.

The Company uses a two-step approach for recognizing and measuring tax beneﬁ ts taken or expected to be taken 
in a tax return. The Company determines whether it is more-likely-than-not that a tax position will be sustained 
upon examination, including resolution of any related appeals or litigation processes, based on the technical merits 
of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the 
Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge 
of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured 
to determine the amount of tax beneﬁ t to recognize in the ﬁ nancial statements. The tax position is measured at the 
largest amount of beneﬁ t that is greater than 50 percent likely of being realized upon ultimate settlement. Diff erences 
between tax positions taken in a tax return and amounts recognized in the ﬁ nancial statements will generally result in 
one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund 
receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.

The Company classiﬁ es interest and penalties on income taxes as a component of income tax expense.

Contingencies

The Company accrues for loss contingencies when both (a) information available prior to issuance of the ﬁ nancial 
statements indicates that it is probable that a liability had been incurred at the date of the ﬁ nancial statements and 
(b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the 
reasonable estimate of the loss is within a range, the Company records its best estimate within the range. When no 
amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in 
the range. The Company discloses an estimated possible loss or a range of loss when it is at least reasonably possible 
that a loss may have been incurred.

Earnings 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 determined 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 eff ect of such 
increase is anti-dilutive.

The following shares were excluded from the diluted earnings per share computations because their inclusion would 
have been anti-dilutive:

(in thousands)
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-vested restricted Class B common stock  . . . . . . . . . . . . .
Shares excluded from the calculation of diluted earnings per 
share  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year ended December 31,
2014

2013

2015

414
1,852

2,266

438
2,473

2,911

3,443
265

3,708

The diluted loss per share equals basic loss per share in the years ended December 31, 2015, 2014 and 2013 because 
the Company had a net loss and the impact of the assumed exercise of stock options and vesting of restricted stock 
would have been anti-dilutive.

An entity affi  liated 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 shares of the Company with equal 
fair value as determined by the parties (see Note 9). The number of shares issuable in such an exchange is not 

F-14

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

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 IEI, Afek, Genie Mongolia 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 offi  cers 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 to be issued. 
The number of shares of the Company’s 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.

Stock-Based Compensation

The Company recognizes compensation expense for grants of stock-based awards to its employees based on the 
estimated fair value on the grant date. Stock based awards granted to nonemployees are marked-to-market until the 
vesting of the award. Compensation cost for awards is recognized using the straight-line method over the vesting 
period. Stock-based compensation is included in selling, general and administrative expense.

Vulnerability Due to Certain Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, 
cash equivalents, restricted cash, certiﬁ cates of deposit and trade accounts receivable. The Company holds cash, 
cash equivalents, restricted cash and certiﬁ cates of deposit at several major ﬁ nancial institutions, which may exceed 
FDIC insured limits. Historically, the Company has not experienced any losses due to such concentration of credit 
risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one 
ﬁ nancial institution and monitor the credit ratings of those institutions. While the Company may be exposed to credit 
losses due to the nonperformance of the holders of its deposits, the Company does not expect the settlement of these 
transactions to have a material eff ect on its results of operations, cash ﬂ ows or ﬁ nancial condition.

GRE reduces its REP customer credit risk by participating in purchase of receivable programs for a majority of its 
receivables. In addition to providing billing and collection services, utility companies purchase GRE’s receivables 
and assume all credit risk without recourse to GRE. GRE’s primary credit risk is therefore nonpayment by the utility 
companies. Certain of the utility companies represent signiﬁ cant portions of the Company’s consolidated revenues 
and consolidated gross trade accounts receivable balance and such concentrations increase the Company’s risk 
associated with nonpayment by those utility companies.

The following table summarizes the percentage of consolidated revenues from customers by utility company that 
equal or exceed 10% of consolidated revenues in the period (no other single utility company accounted for more 
than 10% of consolidated revenues in these periods):

Con Edison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
National Grid USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
West Penn Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Penelec  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

na-less than 10% of consolidated revenue in the period

F-15

Year ended December 31,

2015

2014

2013

23%
12%
na
na

23%
na
10%
na

25%
10%
11%
10%

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

The following table summarizes the percentage of consolidated gross trade accounts receivable by utility company 
that equal or exceed 10% of consolidated gross trade accounts receivable at December 31, 2015 and 2014 (no 
other single utility company accounted for 10% or greater of our consolidated gross trade accounts receivable at 
December 31, 2015 or 2014):

December 31
Con Edison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2015

2014

22%

25%

Allowance for Doubtful Accounts

The allowance for doubtful accounts reﬂ ects the Company’s best estimate of probable losses inherent in the accounts 
receivable balance. The allowance is determined based on known troubled accounts, historical experience and other 
currently available evidence. Doubtful accounts are written-off  upon ﬁ nal determination that the trade accounts will 
not be collected. The change in the allowance for doubtful accounts was as follows:

Balance at 
beginning of 
period

Additions 
charged 
(reversals 
credited) to 
expense

Deductions(1)

Balance at end 
of period

227 $ 

(29) $ 

(16) $ 

182

930 $ 

310 $ 

(1,013) $ 

227

(in thousands)
Year ended December 31, 2015
Reserves deducted from accounts 

receivable:

Allowance for doubtful accounts  . . . . . . . .  $ 
Year ended December 31, 2014
Reserves deducted from accounts 

receivable:

Allowance for doubtful accounts  . . . . . . . .  $ 
Year ended December 31, 2013
Reserves deducted from accounts 

receivable:

Allowance for doubtful accounts  . . . . . . . .  $ 

130 $ 

800 $ 

— $ 

930

(1)  Uncollectible accounts written off .

Fair Value Measurements

Fair value of ﬁ nancial and non-ﬁ nancial assets and liabilities is deﬁ ned as an exit price, which is the price that would 
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at 
the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to 
valuation techniques used to measure fair value, is as follows:

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

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset 

or liability, either directly or indirectly through market corroboration, for substantially the full term of the 
ﬁ nancial instrument.

Level 3 – unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair 

value.

A ﬁ nancial asset or liability’s classiﬁ cation within the hierarchy is determined based on the lowest level input that 
is signiﬁ cant to the fair value measurement. The assessment of the signiﬁ cance of a particular input to the fair value 

F-16

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Description of Business and Summary of Signiﬁcant Accounting Policies – (Continued)

measurement requires judgment, and may aff ect the valuation of the assets and liabilities being measured and their 
placement within the fair value hierarchy.

Accounting Standards Updates

In January 2016, the FASB issued an ASU to provide more information about recognition, measurement, 
presentation and disclosure of ﬁ nancial 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) ﬁ nancial 
assets and ﬁ nancial liabilities will be presented separately by measurement category and form of ﬁ nancial asset on 
the balance sheet or the notes to the ﬁ nancial 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 classiﬁ ed 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 qualiﬁ es for this 
practicability exception. The Company will adopt the amendments in this ASU on January 1, 2018. The Company is 
evaluating the impact that the ASU will have on its consolidated ﬁ nancial statements.

In February 2016, the FASB issued an ASU 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 classiﬁ ed as either ﬁ nance or operating, with 
classiﬁ cation aff ecting the pattern of expense recognition in the income statement. The Company will adopt the new 
standard on January 1, 2019. A modiﬁ ed 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 
ﬁ nancial statements, with certain practical expedients available. The Company is evaluating the impact that the new 
standard will have on its consolidated ﬁ nancial statements.

Note 2—Acquisitions

In December 2013, IDT Energy acquired 100% of the outstanding membership interests of Diversegy, LLC 
(“Diversegy”), a retail energy advisory and brokerage company that serves commercial and industrial customers, 
and Epiq Energy, LLC, which was subsequently renamed IDT Energy Network (“IDTEN”), a network marketing 
company that provides independent representatives with the opportunity to build sales organizations and to proﬁ t 
from both residential and commercial energy. Operating results of the acquired entities from the date of acquisition, 
which were not signiﬁ cant, are included in the Company’s consolidated ﬁ nancial statements.

All of the Company’s goodwill at December 31, 2015 and 2014 was attributable to the GRE segment. The table below 
reconciles the change in the carrying amount of goodwill for the period from December 31, 2012 to December 31, 2015:

(in thousands)
Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Acquisitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

3,663
3,686
7,349
(124)
(3,562)
3,663
—
3,663

F-17

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2—Acquisitions – (Continued)

In the year ended December 31, 2014, the annual goodwill impairment test resulted in the impairment of the 
goodwill of the Diversegy and IDTEN reporting unit primarily because of continuing losses since the acquisitions. 
The goodwill impairment of $3.6 million recorded in the year ended December 31, 2014 reduced the carrying 
amount of the goodwill of the Diversegy and IDTEN reporting unit to zero. The Company estimated the fair value 
of the reporting unit and compared the estimated fair value to the reporting unit’s carrying amount. The Company 
measured the fair value of the reporting unit by discounting its estimated future cash ﬂ ows using an appropriate 
discount rate. Since the carrying value of the reporting unit including goodwill exceeded the estimated fair value, the 
Company performed the required additional steps and determined that the goodwill was fully impaired.

The following table presents unaudited pro forma information of the Company as if the acquisition occurred as of 
the beginning of the period:

(in thousands)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

Year ended 
December 31,
2013

280,307
(6,408)

Note 3—Fair Value Measurements

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

(in thousands)
December 31, 2015

Assets:

Derivative contracts 

Liabilities:

Derivative contracts 

December 31, 2014

Assets:

Derivative contracts 

Liabilities:

Derivative contracts 

Level 1(1)

Level 2(2)

Level 3(3)

Total

$ 

$ 

$ 

$ 

373 $ 

1,308 $ 

— $ 

1,681

609 $ 

1,583 $ 

— $ 

2,192

1,001 $ 

1,376 $ 

— $ 

2,377

440 $ 

3,563 $ 

— $ 

4,003

(1) 
(2) 
(3) 

quoted prices in active markets for identical assets or liabilities
observable inputs other than quoted prices in active markets for identical assets and liabilities
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 ﬂ oating (or market or spot) price is exchanged for a ﬁ xed price over a speciﬁ ed period. The Company’s 
derivatives were classiﬁ ed as Level 1, Level 2 or Level 3. The Level 1 derivatives were valued using quoted prices in 
active markets for identical contracts. The Level 2 derivatives were valued using observable inputs based on quoted 
market prices in active markets for similar contracts. The fair value of the Level 3 derivatives was based on the value 
of the underlying contracts, estimated in conjunction with the counterparty and could not be corroborated by the 
market.

The Company’s subsidiary, GOGAS, issued a stock option in June 2011 to Michael Steinhardt, the Chairman of the 
Board of IEI, at an exercise price of $5.0 million. The expiration date was April 9, 2015. The expiration date was 
extended for one month, and on May 9, 2015, the option was exercised (see Note 9). At December 31, 2014 the fair 
value of the GOGAS stock option was nil.

F-18

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3—Fair Value Measurements – (Continued)

The following tables summarize the change in the balance of the Company’s assets measured at fair value on a 
recurring basis using signiﬁ cant unobservable inputs (Level 3). There were no liabilities measured at fair value on a 
recurring basis using signiﬁ cant unobservable inputs (Level 3) in the years ended December 31, 2015, 2014 or 2013.

(in thousands)
Balance, beginning of period  . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Total gains (losses) (realized or unrealized) included in 

earnings in “Direct cost of revenues” . . . . . . . . . . . . . . . . . .
Purchases, sales, issuances and settlements: . . . . . . . . . . . . . . .
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, end of period  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

The amount of total gains for the period included in earnings 
in “Direct cost of revenues” attributable to the change in 
unrealized gains or losses relating to assets held at the end 
of the period  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

Fair Value of Other Financial Instruments

2015

Year ended December 31,
2014

— $ 

62 $ 

2013

—

—
—
— $ 

(62)

—
—
— $ 

—

(142)

359
(155)
62

— $ 

— $ 

62

The estimated fair value of the Company’s other ﬁ nancial 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, certiﬁ cates of deposit, prepaid expenses, other current assets, advances 
from customers, due to IDT Corporation and other current liabilities. At December 31, 2015 and 2014, the carrying 
amount of these assets and liabilities approximated fair value because of the short period to maturity. The fair value 
estimate for restricted cash—short-term and long-term were classiﬁ ed as Level 1 and certiﬁ cates of deposit, prepaid 
expenses, other current assets, advances from customers, due to IDT Corporation and other current liabilities were 
classiﬁ ed as Level 2 of the fair value hierarchy.

Other assets, revolving credit loan payable and other liabilities. At December 31, 2015 and 2014, other assets 
included an aggregate of $1.4 million and $1.5 million, respectively, in notes receivable. The carrying amounts of 
the notes receivable, revolving credit loan payable and other liabilities approximated fair value. The fair values were 
estimated based on the Company’s assumptions, and were classiﬁ ed as Level 3 of the fair value hierarchy.

Note 4—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 Codiﬁ cation 815—Derivatives and Hedging. Natural gas 
and electricity put and call options and swaps are entered into as hedges against unfavorable ﬂ uctuations 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 
December 31, 2015 and 2014, GRE’s swaps and options were traded on the New York Mercantile Exchange.

F-19

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4—Derivative Instruments – (Continued)

The summarized volume of GRE’s outstanding contracts and options as of December 31, 2015 was as follows 
(MWh – Megawatt hour and Dth – Decatherm):

Commodity
Electricity
Electricity
Electricity
Electricity
Electricity
Electricity
Electricity
Natural gas
Natural gas
Natural gas
Natural gas

Settlement Dates

Volume

January 2016
February 2016
March 2016
April 2016
July 2016
August 2016
September 2016
February 2016
April 2016
July 2016
August 2016

248,000 MWh
772,800 MWh
82,800 MWh
16,800 MWh
160,000 MWh
184,000 MWh
33,600 MWh
852,500 Dth
200,000 Dth
1,110,000 Dth
800,000 Dth

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

December 31 (in thousands)

2015

2014

Asset Derivatives
Derivatives not designated or not qualifying as hedging 

Balance Sheet Location

instruments:
Energy contracts and options  . . . . . . . . . . . . . . . . . . . . . Other current assets

$ 

1,681 $ 

2,377

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

December 31 (in thousands)

2015

2014

Liability Derivatives
Derivatives not designated or not qualifying as hedging 

Balance Sheet Location

instruments:
Energy contracts and options  . . . . . . . . . . . . . . . . . . . . . Energy hedging contracts

$ 

2,192 $ 

4,003

The eff ects of derivative instruments on the consolidated statements of operations were as follows:

(in thousands)
Derivatives not designated or not qualifying 

as hedging instruments

Location of Gain (Loss) 

Recognized on Derivatives

Amount of Gain (Loss) 
Recognized on Derivatives
Year ended December 31,
2014

2015

2013

Energy contracts and options  . . . . . . . . . . .  Direct cost of revenues

$  (1,772) $  (1,674) $  1,177

Note 5—Investment in American Shale Oil, LLC

AMSO, LLC holds a research, development and demonstration lease awarded by the U.S. Bureau of Land 
Management that covers an area of 160 acres in western Colorado (the “RD&D Lease”). The RD&D Lease 
 had an initial ten-year  term that began on January 1, 2007 and provides for a ﬁ ve-year extension if AMSO can 
demonstrate that a process leading to the production of commercial quantities of shale oil is diligently being 

F-20

 
 
 
 
 
 
 
GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5—Investment in American Shale Oil, LLC – (Continued)

pursued. In November 2015, AMSO satisﬁ ed the extension criteria, and the RD&D Lease was extended eff ective 
on January 1, 2017. If AMSO, LLC can demonstrate the economic and environmental viability of its technology, it 
will have the opportunity to submit a one-time payment pursuant to the applicable regulations and convert its RD&D 
Lease to a commercial lease on 5,120 acres, which overlap and are contiguous with the 160 acres in its RD&D 
Lease. (The acreage numbers that appear in this paragraph are unaudited).

In March 2009, a subsidiary of TOTAL S.A. (“Total”) acquired a 50% interest in AMSO, LLC in exchange for 
cash paid to the Company of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, 
development and demonstration expenditures as well as certain other funding commitments. Immediately prior to 
this transaction, all owners of equity interests in AMSO, LLC other than AMSO exchanged their ownership interest 
for a proportionate share of a 1% override on AMSO, LLC’s future revenue. Following the transaction with Total, 
AMSO and Total each owned a 50% interest in AMSO, LLC. 

 On February 23, 2016, Total notiﬁ ed the Company of its decision not to continue to fund AMSO, LLC. The 
Company is currently considering its options with respect to the future of this project. AMSO and Total are obligated 
to fund certain remediation and reclamation costs. The Company estimates that its share of such costs would be in 
the range of nil to $2.0 million.

Except as set forth below, AMSO was responsible for funding 20% of the initial $50 million of AMSO, LLC’s 
approved expenditures, and is responsible for funding 35% of the approved expenditures between $50 million and 
$100 million, and 40% of the costs of the one-time payment for conversion of AMSO, LLC’s RD&D Lease to a 
commercial lease, in the event AMSO, LLC’s application for conversion is approved, with the remaining amounts of 
such expenditures to be funded by Total. All other expenditures are to be borne in proportion to equity ownership. 
The percentages for expenditures are subject to proportional adjustment in connection with certain changes in 
the equity ownership of AMSO LLC. At December 31, 2015, the cumulative contributions of AMSO and Total to 
AMSO, LLC were $82.9 million. AMSO’s allocated share of the net loss of AMSO, LLC is included in “Equity in 
the net loss of AMSO, LLC” in the accompanying consolidated statements of operations.

AMSO has the right to decide at each capital call whether or not to fund AMSO, LLC, and will make a 
determination at each such time. AMSO did not fund the capital calls for any quarter from the fourth quarter of 
2013 through the second quarter of 2015. AMSO funded an aggregate of $0.3 million from the third quarter of 2015 
through the ﬁ rst quarter of 2016, which was 28% of its share of the capital calls. In the period from January 2014 
through January 2016, Total funded an aggregate of $4.6 million for AMSO’s share of the capital calls that AMSO 
did not fund. Because of AMSO’s decisions not to fund all of its share of AMSO, LLC’s expenditures, AMSO’s 
ownership interest in AMSO, LLC was reduced to 41.3% and Total’s ownership interest increased to 58.7%. In 
addition, AMSO’s share of future funding of AMSO, LLC up to a cumulative $100 million was reduced to 28.9% 
and Total’s share increased to 71.1%.

The agreements with Total provide for varying consequences for AMSO’s failure to fund its share at diff erent stages 
of the project, including dilution of AMSO’s interest in AMSO, LLC or paying interest to Total for expenditures they 
fund on behalf of AMSO. Either Total or AMSO may terminate its obligations to make capital contributions and 
withdraw as a member of AMSO, LLC. Even if AMSO were to withdraw its interest in AMSO, LLC, it will remain 
liable for its share of expenditures for safety and environmental reclamation related to events occurring prior to its 
withdrawal.

 The Company accounts for its ownership interest in AMSO, LLC using the equity method since the Company has 
the ability to exercise signiﬁ cant inﬂ uence over its operating and ﬁ nancial matters, although it does not control 
AMSO, LLC. AMSO, LLC is a variable interest entity, however, the Company has determined that it is not the 

F-21

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5—Investment in American Shale Oil, LLC – (Continued)

primary beneﬁ ciary, as the Company does not have the power to direct the activities of AMSO, LLC that most 
signiﬁ cantly impact AMSO, LLC’s economic performance.

The following table summarizes the change in the balance of the Company’s investment in AMSO, LLC:

(in thousands)
Balance, beginning of period  . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in net loss of AMSO, LLC . . . . . . . . . . . . . . . . . . . . . . .
Balance, end of period  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

Year ended December 31,
2014

2013

2015

(252) $ 
250
(397)
(399) $ 

(252) $ 
—
—
(252) $ 

242
2,700
(3,194)
(252)

At December 31, 2015 and 2014, the liability for equity loss in AMSO, LLC was included in “Accrued expenses” in 
the consolidated balance sheet.

In part because of AMSO’s decision not to fund all of its share of AMSO, LLC’s expenditures, AMSO, LLC allocates 
its net loss beginning January 2014 as follows: $12.1 million of losses were allocated to Total, then it allocates any 
remaining losses proportionately such that over time AMSO and Total’s capital accounts as a percentage of AMSO, 
LLC’s total capital will equal their ownership interests.

Summarized balance sheets of AMSO, LLC are as follows:

December 31 
(in thousands)
ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Restricted cash and cash equivalents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Equipment, net  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
LIABILITIES AND MEMBERS’ INTERESTS

Current liabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Members’ interests  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL LIABILITIES AND MEMBERS’ INTERESTS  . . . . . . . . . . . . . . . .  $ 

Summarized statements of operations of AMSO, LLC are as follows:

2015

2014

204 $ 
47
85
181
861
1,378 $ 

654 $ 
861
(137)
1,378 $ 

1,052
47
119
242
861
2,321

1,324
861
136
2,321

(in thousands)
REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
OPERATING EXPENSES:

General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . .
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

Year ended December 31,
2014

2013

2015

— $ 

— $ 

—

403
4,782
5,185
(5,185)
—
(5,185) $ 

456
7,755
8,211
(8,211)
—
(8,211) $ 

566
8,601
9,167
(9,167)
41
(9,126)

F-22

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6—Property and Equipment

December 31 (in thousands)
Computer software and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Computers and computer hardware  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Laboratory and drilling equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Office equipment and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Less: accumulated depreciation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

2015

2014

1,287 $ 
221
528
349
2,385
(1,038)
1,347 $ 

1,038
259
1,195
365
2,857
(955)
1,902

Note 7—Revolving Lines of Credit

On December 17, 2015, GRE, IDT Energy and certain affi  liates 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, Baﬁ n, closed Maple Bank GmbH due to impending ﬁ nancial 
over-indebtedness related to tax-evasion investigations. Therefore, the revolving line of credit is not available for 
future borrowings. The collateral for the revolving loan consists of the borrowers’ receivables, the balances in certain 
bank accounts and certain commercial and intangible rights. Outstanding principal amount incurs interest at LIBOR 
plus 3.5% per annum. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest 
is due on the maturity date of December 17, 2018. The borrowers are required to comply with various affi  rmative 
and negative covenants, including maintaining a target tangible net worth during the term of the Credit Agreement. 
At December 31, 2015, the borrowers were in compliance with all of the covenants.

As of April 23, 2012, the Company and IDT Energy entered into a Loan Agreement with JPMorgan Chase Bank 
for a revolving line of credit for up to a maximum principal amount of $25.0 million. The proceeds from the line 
of credit may be used to provide working capital and for the issuance of letters of 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 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. The Company is not permitted to withdraw funds or exercise any authority over 
the required balance in the collateral account. The principal outstanding will bear interest at the lesser 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 is payable at least every three months and all outstanding 
principal and any accrued and unpaid interest is due on the maturity date of April 30, 2016. The Company pays a 
quarterly unused commitment fee of 0.08% per annum on the diff erence between $25.0 million and the average 
daily outstanding principal balance of the note. In addition, as of April 23, 2012, GEIC issued a Corporate Guaranty 
to JPMorgan Chase Bank whereby GEIC unconditionally guarantees the full payment of all indebtedness of the 
Company and IDT Energy under the Loan Agreement. At December 31, 2015 and 2014, there were no amounts 
borrowed under the line of credit, and cash collateral of $10.0 million was included in “Restricted cash—short-term” 
in the consolidated balance sheet. In addition, at December 31, 2015 and 2014, letters of credit of $7.7 million and 
$7.6 million, respectively, were outstanding.

Note 8—Income Taxes

The components of (loss) income before income taxes are as follows:

(in thousands)
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . $ 

Year ended December 31,
2014

2013

2015

1,517 $ 
(9,628)
(8,111) $ 

(14,900) $ 
(12,412)
(27,312) $ 

9,467
(12,053)
(2,586)

F-23

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8—Income Taxes – (Continued)

Signiﬁ cant components of the Company’s deferred income tax assets consist of the following:

December 31 (in thousands)
Deferred income tax assets:

2015

2014

Bad debt reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
State taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Charitable contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Stock options and restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Valuation allowance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
DEFERRED INCOME TAX ASSETS, NET  . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

75 $ 

3,865
91
402
26,186
7,752
1,661
40,032
(38,390)

1,642 $ 

93
2,940
78
330
17,473
6,163
2,089
29,166
(27,703)
1,463

The Company has initiated a tax strategy that enables the Company to deduct losses from its foreign subsidiaries 
against its proﬁ table U.S. operations. Because of this strategy, the decrease in pre-tax earnings of GRE in 2012, and 
the Company’s current projections, the Company concluded that it no longer met the criteria of more likely than not 
in order to utilize its deferred federal income tax assets in the foreseeable future. Accordingly, at December 31, 2015 
and 2014, only the state portion of GRE deferred tax assets are reﬂ ected.

The provision for (beneﬁ t from) income taxes consists of the following:

(in thousands)
Current:

Year ended December 31,
2014

2013

2015

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROVISION FOR INCOME TAXES . . . . . . . . . . . . . . . . . . $ 

— $ 
704
—
704

19
(198)
—
(179)
525 $ 

— $ 
730
(12)
718

68
(691)
—
(623)

95 $ 

1,112
1,891
(7)
2,996

—
(241)
—
(241)
2,755

The diff erences between income taxes expected at the U.S. federal statutory income tax rate and income taxes 
provided are as follows:

(in thousands)
U.S. federal income tax at statutory rate . . . . . . . . . . . . . . . . . . $ 
Valuation allowance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax rate differential . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local income tax, net of federal beneﬁt . . . . . . . . . . .
PROVISION FOR INCOME TAXES . . . . . . . . . . . . . . . . . . $ 

Year ended December 31,
2014

2013

2015

(2,840) $ 
2,982
31
20
332
525 $ 

(9,559) $ 
9,564
22
115
(47)
95 $ 

(904)
2,447
48
66
1,098
2,755

F-24

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8—Income Taxes – (Continued)

At December 31, 2015, the Company had U.S. federal and state net operating loss carry-forwards of approximately 
$26.1 million and $67.2 million, respectively. These carry-forward losses are available to off set future U.S. federal 
and state taxable income. The federal net operating loss carry-forwards will start to expire in 2032, with the year 
ended December 31, 2015’s loss expiring in 2036. The state net operating loss carry-forwards will start to expire in 
2028, with the year ended December 31, 2015’s loss expiring in 2036.

At December 31, 2015, the Company had foreign net operating loss carry-forwards of approximately $52.0 million, 
of which $47.4 million will not expire. This carry-forward loss is available to off set future foreign taxable income.

The change in the valuation allowance for deferred income taxes was as follows:

(in thousands)
Year ended December 31, 2015

Reserves for valuation allowances deducted 

Balance at 
beginning of 
period

Additions 
charged to costs 
and expenses

Deductions

Balance at end 
of period

from deferred income taxes, net . . . . . . . .  $ 

27,703 $ 

10,687 $ 

— $ 

38,390

Year ended December 31, 2014

Reserves for valuation allowances deducted 

from deferred income taxes, net . . . . . . . .  $ 

16,653 $ 

11,050 $ 

— $ 

27,703

Year ended December 31, 2013

Reserves for valuation allowances deducted 

from deferred income taxes, net . . . . . . . .  $ 

11,861 $ 

4,792 $ 

— $ 

16,653

(in thousands)
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Additions based on tax positions related to the current period .
Additions for tax positions of prior periods . . . . . . . . . . . . . . .
Lapses of statutes of limitations . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 

Year ended December 31,
2014

2013

2015

543 $ 
97
10
(14)
636 $ 

542 $ 
209
9
(217)
543 $ 

223
—
319
—
542

All of the unrecognized income tax beneﬁ ts at December 31, 2015 and 2014 would have aff ected the Company’s 
eff ective income tax rate if recognized. The Company does not expect the total amount of unrecognized tax beneﬁ ts 
to signiﬁ cantly increase or decrease within the next twelve months.

In the years ended December 31, 2015, 2014 and 2013, the Company recorded interest on income taxes of $10,000, 
$9,000 and $9,000, respectively. As of December 31, 2015 and 2014, there was no accrued interest included in 
current income taxes payable.

The Company currently remains subject to examinations of its tax returns as follows: U.S. federal tax returns for 
2012 to 2015, state and local tax returns generally for 2011 to 2015 and foreign tax returns generally for 2011 to 
2015.

Note 9—Equity

Class A Common Stock and Class B Common Stock

The rights of holders of Class A common stock and Class B common stock are identical except for certain voting 
and conversion rights and restrictions on transferability. The holders of Class A common stock and Class B common 
stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, 
the holders of Class A common stock and Class B common stock have identical and equal priority rights per share in 

F-25

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9—Equity – (Continued)

liquidation. The Class A common stock and Class B common stock do not have any other contractual participation 
rights. The holders of Class A common stock are entitled to three votes per share and the holders of Class B common 
stock are entitled to one-tenth of a vote per share. Except as required by law or under the terms of the Series 2012-A 
Preferred Stock (the “Preferred Stock”), the holders of Class A and Class B common stock and the Preferred Stock 
vote together as a single class on all matters submitted to a vote of the Company’s stockholders. Each share of Class 
A common stock may be converted into one share of Class B common stock, at any time, at the option of the holder. 
Shares of Class A common stock are subject to certain limitations on transferability that do not apply to shares of 
Class B common stock.

Series 2012-A Preferred Stock

Each share of Preferred Stock has a liquidation preference of $8.50 (the “Liquidation Preference”), and is entitled 
to receive an annual dividend per share equal to the sum of (i) $0.6375 (the “Base Dividend”) plus (ii) seven and 
one-half percent (7.5%) of the quotient obtained by dividing (A) the amount by which the EBITDA for a ﬁ scal year 
of the Company’s retail energy provider business exceeds $32 million by (B) 8,750,000 (the “Additional Dividend”), 
payable in cash. EBITDA consists of income (loss) from operations exclusive of depreciation and amortization and 
other operating gains (losses). During any period when the Company has failed to pay a dividend on the Preferred 
Stock and until all unpaid dividends have been paid in full, the Company is prohibited from paying dividends or 
distributions on the Company’s Class B or Class A common stock.

The Preferred Stock is redeemable, in whole or in part, at the option of the Company following October 11, 2017 
at 101% of the Liquidation Preference plus accrued and unpaid dividends, and 100% of the Liquidation Preference 
plus accrued and unpaid dividends following October 11, 2018.

The Base Dividend is payable (if declared by the Company’s Board of Directors, and accrued, if not declared) 
quarterly on each February 15, May 15, August 15 and November 15, and to the extent that there is any Additional 
Dividend payable with respect to a ﬁ scal year, it will be paid to holders of Preferred Stock with the May dividend. 
With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Preferred 
Stock is equal in rank to all other equity securities the Company issues, the terms of which speciﬁ cally provide that 
such equity securities rank on a parity with the Preferred Stock with respect to dividend rights or rights upon the 
Company’s liquidation, dissolution or winding up; senior to the Company’s common stock; and junior to all of the 
Company’s existing and future indebtedness.

Each share of Preferred Stock has the same voting rights as a share of Class B common stock, except on certain 
matters that only impact the Company’s common stock, as well as additional voting rights on speciﬁ c matters or 
upon the occurrence of certain events.

Dividend Payments

In the year ended December 31, 2015, the Company paid aggregate cash dividends of $0.12 per share on its Class 
A common stock and Class B common stock, equal to $3.0 million in total dividends paid. In the year ended 
December 31, 2014, the Company paid aggregate cash dividends of $0.06 per share on its Class A common stock 
and Class B common stock, equal to $1.5 million in total dividends paid. No dividends were declared or paid 
on the Company’s Class A common stock and Class B common stock in the year ended December 31, 2013. On 
February 12, 2016, the Company paid a quarterly dividend of $0.06 per share on its Class A common stock and 
Class B common stock for the fourth quarter of 2015 to stockholders of record as of the close of business on 
February 5, 2016, as the Company  has resumed quarterly dividend payments on its common stock.

In the year ended December 31, 2015, the Company paid aggregate cash dividends of $0.6376 per share on its 
Preferred Stock, equal to $1.5 million in total dividends paid. In the year ended December 31, 2014, the Company 
paid aggregate cash dividends of $0.6376 per share on its Preferred Stock, equal to $1.4 million in total Preferred 
Stock dividends paid. In the year ended December 31, 2013, the Company paid aggregate cash dividends of $0.6099 

F-26

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9—Equity – (Continued)

per share on its Preferred Stock, equal to $1.1 million in total Preferred Stock dividends paid. On February 16, 2016, 
the Company paid a quarterly Base Dividend of $0.1594 per share on its Preferred Stock for the fourth quarter of 
2015 to stockholders of record as of the close of business on February 5, 2016.

Stock Repurchases

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. In the year ended 
December 31, 2014, the Company repurchased 103,331 shares of Class B common stock under this program for 
an aggregate purchase price of $0.8 million. There were no repurchases under the program in the years ended 
December 31, 2015 and 2013. At December 31, 2015, 6.9 million shares remained available for repurchase under the 
stock repurchase program.

Exchange Off ers and Issuances of Preferred Stock

On November 26, 2012, the Company initiated an off er to exchange up to 7.15 million outstanding shares of its 
Class B common stock for the same number of shares of its Preferred Stock. The off er expired on March 5, 2013. 
On March 11, 2013, the Company issued 313,376 shares of its Preferred Stock in exchange for an equal number of 
shares of Class B common stock tendered in the exchange off er.

On May 22, 2014, the Company initiated an off er to exchange up to 5.0 million shares of its outstanding Class B 
common stock for the same number of shares of its Preferred Stock. The off er expired on June 23, 2014. On June 27, 
2014, the Company issued 404,732 shares of its Preferred Stock in exchange for an equal number of shares of Class 
B common stock tendered in the exchange off er. As a result of the issuance of additional shares of Preferred Stock, 
the aggregate quarterly Base Dividend increased to $0.4 million from $0.3 million.

Sale of Shares to Howard S. Jonas

On July 30, 2014, the Company entered into a Second Amended and Restated Employment Agreement and a 
Restricted Stock Sale Agreement with Howard S. Jonas, the Company’s Chairman of the Board and Chief Executive 
Offi  cer. Pursuant to these agreements, (a) options to purchase 3.0 million shares of the Company’s Class B common 
stock previously granted to Mr. Jonas, with an exercise price of $10.30 per share were cancelled, (b) the term of 
the existing employment agreement between the Company and Mr. Jonas was extended for an additional one year 
period, expiring on December 31, 2019, and (c) Mr. Jonas committed to purchase an aggregate of 3.6 million shares 
of the Company’s Class B common stock from the Company at a price of $6.82 per share (the closing price per share 
of the Class B common stock on the day that the arrangement was approved by the Company’s Board of Directors 
and Compensation Committee). The 3.6 million Class B shares are subject to repurchase by the Company at $6.82 
per share upon certain terminations of Mr. Jonas’ employment by the Company, and such repurchase right lapses as 
to 0.6 million shares on December 31, 2016, 2017 and 2018. On July 30, 2014 and August 4, 2014, the Company 
sold an aggregate of 3.6 million shares of the Company’s Class B common stock to Mr. Jonas for an aggregate 
purchase price of $24.6 million. The Company accounted for the change in the equity arrangements with Mr. Jonas 
as a modiﬁ cation, with an incremental value of nil. Accordingly, the unrecognized compensation cost as of July 30, 
2014 of $17.0 million is being recognized on a straight-line basis over the modiﬁ ed vesting period. The estimated 
total value of the options on the date of the grant was $19.3 million.

Sales of Equity of Subsidiaries

Per the terms of his employment agreement, Dr. Harold Vinegar, Chief Scientist of the Company (“Vinegar”), has an 
option to purchase, at fair value, up to 10% of the GOGAS ventures in which he is a key contributor:

• 

In November 2008, Vinegar purchased a 10% interest in IEI.

F-27

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9—Equity – (Continued)

• 

• 

In October 2013, Vinegar purchased a 9.5% interest in Afek.

In November 2013, Vinegar purchased a 9.8% interest in Genie Mongolia.

In connection with Vinegar’s November 2008 purchase of a 10% interest in IEI, the purchase agreement included 
certain no cost anti-dilution protection as follows. If IEI issues certain of its shares in order to raise capital until the 
capitalization of IEI equals $20 million, IEI shall issue to Vinegar additional shares to maintain his 10% interest 
in IEI. In December 2013, IEI converted its intercompany payable to GOGAS into preferred stock. Pursuant to 
the anti-dilution protection, IEI issued shares of its preferred stock to Vinegar equal to 10% of $20 million or 
$2.0 million, which the Company recorded as an increase in “Noncontrolling interests” and a corresponding decrease 
in “Additional paid-in capital”.

In November 2010, GOGAS sold a 0.5% equity interest to Rupert Murdoch for $1.0 million paid with a promissory 
note. The note was secured by a pledge of the shares issued in exchange for the note. The note accrued interest at 
1.58% per annum. The Company received an aggregate of $1.1 million for the payment of the principal and accrued 
interest on the maturity date of November 15, 2015.

In connection with the sale by GOGAS in November 2010 of a 5.0% equity interest to an entity affi  liated with 
Lord (Jacob) Rothschild for $10.0 million, the entity affi  liated with Lord Rothschild has a one-time option through 
November 12, 2017 to exchange its GOGAS shares for 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.

Exercise of GOGAS stock option

GOGAS issued a stock option in June 2011 to Michael Steinhardt at an exercise price of $5.0 million. The expiration 
date was April 9, 2015. The expiration date was extended for one month, and on May 9, 2015, the option was 
exercised. Mr. Steinhardt and an affi  liate received interests of approximately 1.5% in each of Afek, Genie Mongolia 
and IEI. In addition, Mr. Steinhardt and the affi  liate received an approximately 1.7% interest in AMSO. The exercise 
price of $5.0 million was paid $2.5 million in cash and $2.5 million in promissory notes due in November 2015. The 
notes bear interest at 0.43% per annum, and are secured by 50% of the shares received in the exercise. In November 
2015, the Company received cash of $0.8 million to repay one-third of the principal amount of the promissory notes, 
and released one-third of the shares securing the remaining notes. The remaining notes, an aggregate of $1.7 million, 
are expected to be repaid in 2016. At December 31, 2015, the notes receivable were included in “Receivables for 
issuance of equity” in the consolidated balance sheet.

Note 10—Stock-Based Compensation

Stock-Based Compensation Plan

The Company’s 2011 Stock Option and Incentive Plan is intended to provide incentives to executives, employees, 
directors and consultants of the Company. Incentives available under the 2011 Stock Option and Incentive Plan 
may include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. The 
plan is administered by the Compensation Committee of the Company’s Board of Directors. On May 5, 2015, 
the Company’s stockholders approved an amendment and restatement to the Company’s 2011 Stock Option and 
Incentive Plan that increased the number of shares of the Company’s Class B common stock available for the grant 
of awards thereunder by an additional 180,000 shares. At December 31, 2015, the Company had 1.3 million shares 
of Class B common stock reserved for award under its 2011 Stock Option and Incentive Plan and 0.2 million shares 
were available for future grants.

F-28

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10—Stock-Based Compensation – (Continued)

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price 
of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three 
years of service following the grant.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

Non-vested shares at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Forfeited  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
NON-VESTED SHARES AT DECEMBER 31, 2015  . . . . . . . . . . . . . . . . . . . 

Number of Non- 
vested Shares 
(in thousands)

Weighted- 
Average Grant 
Date Fair Value
9.83
9.95
8.18
10.01
11.72

73 $ 
38
(57)
(2)
52 $ 

At December 31, 2015, there was $9.0 million of total unrecognized compensation cost related to non-vested 
stock-based compensation arrangements, including $8.5 million relating to the shares purchased by Howard S. Jonas 
(see Note 9). The total unrecognized compensation cost is expected to be recognized over a weighted-average period 
of 1.6 years. The total grant date fair value of shares vested in the years ended December 31, 2015, 2014 and 2013 
was $0.5 million, $2.5 million and $3.3 million, respectively. The Company recognized compensation cost related 
to the vesting of the restricted stock of $3.6 million, $6.6 million, and $2.0 million in the years ended December 31, 
2015, 2014, and 2013, respectively. The compensation cost related to the vesting of the restricted stock included 
$2.8 million and $5.7 million relating to the shares purchased by Howard S. Jonas in the years ended December 31, 
2015 and 2014, respectively.

Eff ective December 12, 2013, the Company issued 63,917 restricted shares of its Class B common stock to the 
President of the Company. The restricted shares vest in three years that began in January 2014. The fair value of the 
restricted shares on the date of the grant was $0.7 million, which is being recognized on a straight-line basis over the 
vesting period.

Eff ective January 6, 2014, the Company issued 29,126 restricted shares of its Class B common stock to Michael 
Stein, Executive Vice President of the Company, and son-in-law of Howard S. Jonas. The restricted shares vest in 
three equal annual installments commencing on January 5, 2015. The fair value of the restricted shares on the date of 
the grant was $0.3 million, which is being recognized on a straight-line basis over the vesting period.

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock on 
the date of grant. Option awards generally vest on a graded basis over three years of service and have ten-year 
contractual terms. Expected volatility is based on historical volatility of the Company’s Class B common stock 
and other factors. The Company uses historical data on exercise of stock options, post vesting forfeitures and other 
factors to estimate the expected term of the stock-based payments granted. The risk free rate is based on the U.S. 
Treasury yield curve in eff ect at the time of grant.

The fair value of stock options was estimated on the date of the grant using a Black-Scholes valuation model and the 
assumptions in the following table. No option awards were granted in the year ended December 31, 2014.

F-29

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10—Stock-Based Compensation – (Continued)

ASSUMPTIONS
Average risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Expected volatility  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Expected term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A summary of stock option activity for the Company is as follows:

Year ended December 31,
2013
2015

0.93%
—
61.0%

2.07%
—
65.6%

5.5 years

6.5 years

Number of 
Options (in 
thousands)

Weighted- 
Average 
Exercise 
Price

Weighted- 
Average 
Remaining 
Contractual 
Term (in years)

Aggregate 
Intrinsic Value 
(in thousands)
—

6.3 $ 

Outstanding at December 31, 2014 . . . . . . . . . . . . 
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Cancelled / Forfeited . . . . . . . . . . . . . . . . . . . . . . . 
OUTSTANDING AT DECEMBER 31, 2015  . . 
EXERCISABLE AT DECEMBER 31, 2015 . . . 

438 $ 
6
(25)
(5)
414 $ 
268 $ 

6.85
0.01
6.85
6.85
6.74
6.80

5.6 $ 
5.4 $ 

1,825
1,167

The weighted-average grant date fair value of options granted by the Company during the years ended December 31, 
2015 and 2013 was $9.67 and $6.42, respectively. The total intrinsic value of options exercised during the years 
ended December 31, 2015, 2014 and 2013 was $12,000, $12,000 and $29,000, respectively. At December 31, 
2015, there was $0.8 million of total unrecognized compensation cost related to non-vested stock options, which is 
expected to be recognized over a weighted-average period of 1.9 years. The Company recognized compensation cost 
related to the vesting of the options of $0.3 million, $2.5 million and $0.4 million in the years ended December 31, 
2015, 2014 and 2013, respectively.

Grants of Equity of Subsidiaries

On May 5, 2015, the Compensation Committee of the Company’s Board of Directors approved the grant of deferred 
stock units in GRE to certain of the Company’s offi  cers and employees. Howard S. Jonas was granted deferred stock 
units representing 2.8% of the outstanding equity in GRE, Avi Goldin, the Company’s Chief Financial Offi  cer and 
Executive Vice President - Finance was granted deferred stock units representing 0.2% of the outstanding equity 
in GRE, Michael Stein, the Company’s Executive Vice President and the Chief Executive Offi  cer and a Director of 
GRE was granted deferred stock units representing 0.3% of the outstanding equity in GRE, and other employees 
were granted deferred stock units representing an aggregate of 0.6% of the outstanding equity in GRE. The deferred 
stock units vest in equal amounts on the ﬁ rst, second and third anniversaries of the date of grant. The fair value of 
the GRE deferred stock units on the date of grant was $3.3 million, which is being recognized on a straight-line 
basis over the vesting period. At December 31, 2015, the unrecognized compensation cost relating to these grants 
was $2.7 million, which is expected to be recognized over a weighted-average period of 1.4 years. The Company 
recognized aggregate compensation cost related to the vesting of the GRE deferred stock units and other subsidiary 
equity interests that were granted in prior years of $1.4 million, $1.6 million and $1.8 million in the years ended 
December 31, 2015, 2014 and 2013, respectively.

In 2014 and 2013, the Company elected to exchange vested deferred stock units of IDT Energy previously granted to 
employees and directors of the Company for shares of the Company’s Class B common stock upon the vesting of the 
deferred stock units based on the relative fair value of the shares exchanged. Accordingly, in August 2014 and 2013, 
the Company issued 137,738 and 133,758 shares of the Company’s Class B common stock in exchange for 23.6 and 
23.6 vested deferred stock units of IDT Energy, respectively. In August 2015, the Company elected to pay cash of 

F-30

 
 
GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10—Stock-Based Compensation – (Continued)

$1.2 million for the remaining 23.6 deferred stock units of IDT Energy that vested in June and July 2015 based on 
the estimated fair value of the deferred stock units of IDT Energy.

Note 11—Variable Interest Entities

In 2011, an employee of IDT incorporated Citizens Choice Energy, LLC (“CCE”), which is a REP that resells 
electricity and natural gas to residential and small business customers in the State of New York. In addition, DAD 
Sales, LLC (“DAD”) used its network of door-to-door sales agents to obtain customers for CCE. In December 2012, 
DAD ceased to acquire customers for CCE. The Company provided CCE and DAD with substantially all of the 
cash required to fund their operations. The Company determined that since the acquisition of the interest in CCE 
and DAD, it had the power to direct the activities of these entities that most signiﬁ cantly impact their economic 
performance and it has the obligation to absorb losses of CCE and DAD that could potentially be signiﬁ cant to 
CCE and DAD on a stand-alone basis. The Company therefore determined that it is the primary beneﬁ ciary of CCE 
and DAD, and as a result, the Company consolidates CCE and DAD within its GRE segment. The Company does 
not own any interest in CCE or DAD and thus the net income or loss incurred by CCE and DAD was attributed to 
noncontrolling interests in the accompanying consolidated statements of operations.

In October 2015, GRE paid $0.2 million to the owner of the limited liability company interests in CCE, and loaned 
CCE $0.5 million in exchange for an option to purchase 100% of the issued and outstanding limited liability 
company interests of CCE for one dollar plus the forgiveness of the $0.5 million loan. The option expires on 
October 22, 2023.

Net income (loss) amounts related to CCE and DAD and aggregate net funding repaid to (provided by) the Company 
to CCE and DAD in order to ﬁ nance their operations were as follows:

(in thousands)
Net income (loss):

Year ended December 31,
2014

2013

2015

CCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
DAD  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aggregate funding repaid to (provided by) the Company, net . . .

201 $ 
(167)
950

763 $ 
(104)
(266)

2,080
(67)
4,126

Summarized consolidated balance sheet amounts related to CCE and DAD are as follows:

December 31 (in thousands)
ASSETS

2015

2014

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Restricted cash  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
LIABILITIES AND NONCONTROLLING INTERESTS

Current liabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
Due to IDT Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
TOTAL LIABILITIES AND NONCONTROLLING INTERESTS  . . . . . . .  $ 

48 $ 
25
844
479
51
468
1,915 $ 

267 $ 
427
1,221
1,915 $ 

33
20
1,873
480
178
459
3,043

479
1,377
1,187
3,043

F-31

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11—Variable Interest Entities – (Continued)

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

Note 12—Accumulated Other Comprehensive Income

The accumulated balances for each classiﬁ cation of other comprehensive income (loss) were as follows:

(in thousands)
Balance at December 31, 2012 . . . . . . . . . .  $ 
Other comprehensive (loss) income before 
reclassiﬁcations . . . . . . . . . . . . . . . . . . . . 

Amounts reclassiﬁed from accumulated 

other comprehensive income  . . . . . . . . . 
Net other comprehensive income . . . . . . . . 
Balance at December 31, 2013 . . . . . . . . . . 
Other comprehensive loss attributable to 

Genie . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Balance at December 31, 2014 . . . . . . . . . . 
Other comprehensive income attributable to 
Genie . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
BALANCE AT DECEMBER 31, 2015  . .  $ 

Note 13—Legal and Regulatory Proceedings

Unrealized loss 
on available- 
for-sale 
securities

Foreign 
currency 
translation

Accumulated 
other 
comprehensive 
income (loss)

Location of 
(Gain) Loss 
Recognized

(15) $ 

285 $ 

(55)

70
15
—

—
—

460

—
460
745

(735)
10

—
— $ 

144
154 $ 

270

405

70
475
745

(735)
10

144
154

Interest income

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  ﬁ led 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 ﬁ led 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. IDT Energy believes that the claims in this lawsuit are without merit and 
intends to vigorously defend the action.

On June 20, 2014, the Pennsylvania Attorney General’s Offi  ce (“AG”) and the Acting Consumer Advocate (“OCA”) 
ﬁ led a Joint Complaint against IDT Energy, Inc. with the Pennsylvania Public Utility Commission (“PUC”). In the 
Joint Complaint, the AG and the OCA allege, among other things, various violations of Pennsylvania’s Unfair Trade 
Practices and Consumer Protection Law, the Telemarketing Registration Act and the Pennsylvania PUC’s regulations. 
IDT Energy has reached an agreement in principle on a settlement with the AG and the OCA to terminate the 
litigation with no admission of liability or ﬁ nding of wrongdoing by IDT Energy. On August 4, 2015, IDT Energy, 
the AG, and the OCA ﬁ led a Joint Petition to the Pennsylvania PUC seeking approval of the settlement terms. 
Under the settlement, if approved by the PUC, IDT Energy will agree to 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 agree to implement certain modiﬁ cations to its sales, marketing and customer service processes, along with 
additional compliance and reporting requirements. The settlement must be approved by the Pennsylvania PUC, 
which is expected in the  second  quarter of 2016.

F-32

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13—Legal and Regulatory Proceedings – (Continued)

On July 2, 2014, named plaintiff , Louis McLaughlin, ﬁ led a putative class-action lawsuit against IDT Energy, Inc. 
in the United States District Court for the Eastern District of New York, contending that he and other class members 
were injured as a result of IDT Energy’s allegedly unlawful sales and marketing practices. The named plaintiff  ﬁ led 
the suit on behalf of himself and two subclasses: all IDT Energy customers who were charged a variable rate 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 December 19, 2014, IDT Energy ﬁ led a motion to dismiss the complaint. On December 9, 2015, 
the Court denied IDT Energy’s motion to dismiss without prejudice so as to allow McLaughlin to ﬁ le an amended 
complaint. On January 22, 2016, the named plaintiff  ﬁ led 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. Subsequently, on  February 22, 2016 , IDT Energy moved to dismiss the 
amended complaint.  The named plaintiff ’s opposition papers to the motion to dismiss are due on March 18, 2016 
and IDT Energy’s reply is due on April 11, 2016.  In the meantime, the parties are engaged in limited discovery. IDT 
Energy believes that the claims in the amended complaint are without merit and intends to vigorously defend the 
action.

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  ﬁ led 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. On November 6, 2014, the Court denied IDT Energy’s motion to dismiss the complaint. The parties are 
currently engaged in discovery. IDT Energy believes that the claims in this lawsuit are without merit and intends to 
vigorously defend the action.

At December 31, 2015, the Company had an aggregate of $2.5 million accrued for the complaints and lawsuits 
described above.

On February 23, 2016, the New York Public Service Commission (“PSC”) issued an order  that sought to impose 
signiﬁ cant new restrictions on  REPs  operating in New York, including GRE. The restrictions described in the 
PSC’s order, which  were to become eff ective March 4, 2016, would require that all REPs’ electricity and natural 
gas off erings 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 off erings, 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 until a court hearing on April 14, 2016. GRE 
expects that the REP industry will take additional legal action in response to the order seeking a deﬁ nitive judicial 
review of the industry’s challenges to the PSC’s order.

The Company is evaluating the potential impact of the PSC’s order on its New York operations, while preparing to 
operate in compliance with any new requirements. Depending on the ﬁ nal language of the order and the outcome 
of legal appeals, as well as our ﬁ nal response to the order with respect to our relationships with our New York 
customers, the order will likely have a substantial impact upon GRE’s operations in New York. As of December 31, 
2015, New York represented 53% of GRE’s total meters served and 44% of the total  residential customer equivalents 
of GRE’s customer base.

In addition to the 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 eff ect on the Company’s results of operations, cash ﬂ ows or 
ﬁ nancial condition.

F-33

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14—Commitments and Contingencies

Purchase Commitments

The Company had purchase commitments of $22.4 million at December 31, 2015. The purchase commitments 
outstanding at December 31, 2015 are expected to be paid as follows: $14.7 million in the year ending December 31, 
2016, $6.6 million in the year ending December 31, 2017 and $1.1 million in the year ending December 31, 2018.

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 December 31, 2015, GRE had commitments to purchase renewable energy credits 
of $41.8 million.

Environmental Remediation Liability

At December 31, 2015, Afek’s estimated liability for environmental remediation in the Golan Heights in Northern 
Israel was $0.2 million, which is included in “Exploration expense” in 2015 in the accompanying consolidated 
statement of operations. The estimated liability is expected to increase as Afek continues its up to ten-well 
exploratory program.

Tax Audits

The Company is subject to audits in various jurisdictions for various taxes. Amounts asserted by taxing authorities 
or the amount ultimately assessed against the Company could be greater than the accrued amount. Accordingly, 
provisions may be recorded in the future as estimates are revised or underlying matters are settled or resolved. 
Imposition of assessments as a result of tax audits could have an adverse eff ect on the Company’s results of 
operations, cash ﬂ ows and ﬁ nancial condition.

Letters of Credit

At December 31, 2015, the Company had letters of credit outstanding totaling $7.7 million primarily for the beneﬁ t 
of regional transmission organizations that coordinate the movement of wholesale electricity and for certain utility 
companies. The letters of credit outstanding at December 31, 2015 expire as follows: $4.2 million in the year ending 
December 31, 2016 and $3.5 million in the year ending December 31, 2017.

Performance Bonds

GRE has performance bonds issued through a third party for the beneﬁ t of various states in order to comply with the 
states’ ﬁ nancial requirements for retail energy providers. At December 31, 2015, GRE had aggregate performance 
bonds of $11.9 million outstanding.

F-34

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14—Commitments and Contingencies – (Continued)

Lease Commitments

The future minimum payments for operating leases at December 31, 2015 are as follows:

(in thousands)
Year ending December 31:

2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Total payments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 

306
165
14
—
—
—
485

Rental expense under operating leases was $1.2 million, $0.8 million and $0.6 million in the years ended 
December 31, 2015, 2014 and 2013, respectively.

Other Contingencies

As of November 19, 2015, IDT Energy and certain of its affi  liates entered into an Amended and Restated Preferred 
Supplier Agreement with BP Energy Company (“BP”). The agreement’s termination date is November 30, 2019, 
except either party may terminate the agreement on November 30, 2018 by giving the other party notice by May 31, 
2018. Under the agreement, IDT Energy purchases electricity and natural gas at market rate plus a fee. IDT Energy’s 
obligations to BP are secured by a ﬁ rst security interest in deposits or receivables from utilities in connection 
with their purchase of IDT Energy’s customer’s receivables, and in any cash deposits or letters of credit posted in 
connection with any collateral accounts with BP. IDT Energy’s ability to purchase electricity and natural gas under 
this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At 
December 31, 2015, the Company was in compliance with such covenants. At December 31, 2015, restricted cash—
short-term of $0.8 million and trade accounts receivable of $27.0 million were pledged to BP as collateral for the 
payment of IDT Energy’s trade accounts payable to BP of $8.3 million at December 31, 2015.

Note 15—Related Party Transactions

The Company entered into various agreements with IDT prior to the Spin-Off  including a Separation and 
Distribution Agreement to eff ect the separation and provide a framework for the Company’s relationship with IDT 
after the Spin-Off , and a Transition Services Agreement, which provides for certain services to be performed by the 
Company and IDT. These agreements provide for, among other things, (1) the allocation between the Company and 
IDT of employee beneﬁ ts, taxes and other liabilities and obligations attributable to periods prior to the Spin-Off , 
(2) transitional services to be provided by IDT relating to human resources and employee beneﬁ ts administration, 
(3) the allocation of responsibilities relating to employee compensation and beneﬁ t plans and programs and other 
related matters, (4) ﬁ nance, accounting, tax, internal audit, facilities, investor relations and legal services to be 
provided by IDT to the Company following the Spin-Off  and (5) speciﬁ ed administrative services to be provided by 
the Company to certain of IDT’s foreign subsidiaries.

IDT charges the Company for services it provides pursuant to the Transition Services Agreement. The charges 
for these services are included in “Selling, general and administrative” expense. In addition, the Company 
provides  services to certain of IDT’s  subsidiaries. The charges for these services reduce the Company’s 

F-35

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15—Related Party Transactions – (Continued)

“Selling, general and administrative” expense. The amounts IDT charged the Company, and the amounts the 
Company charged IDT, were as follows:

(in thousands)
Amount IDT charged the Company . . . . . . . . . . . . . . . . . . . . . $ 
Amount the Company charged IDT . . . . . . . . . . . . . . . . . . . . .

Year ended December 31,
2014

2013

2015

2,340 $ 
546

3,447 $ 
530

3,348
285

In addition, the Company entered into a Tax Separation Agreement with IDT, which sets forth the responsibilities 
of the Company 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 ﬁ ling of tax returns for such periods and disputes 
with taxing authorities regarding taxes for such periods. Pursuant to the Tax Separation Agreement, among other 
things, IDT indemniﬁ es the Company from all liability for taxes of IDT with respect to any taxable period, and the 
Company indemniﬁ es IDT from all liability for taxes of the Company with respect to any taxable period, including, 
without limitation, the ongoing tax audits related to the Company’s business.

The Company had notes receivable outstanding from employees aggregating $1.0 million at December 31, 2015 and 
2014, which are included in “Other assets” in the accompanying consolidated balance sheet.

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 (1) IGM 
received commissions and fees from payments made by the Company (including payments from third party brokers) 
in the aggregate amounts of $14,236, $13,912 and $11,074 in the years ended December 31, 2015, 2014 and 2013, 
respectively, which fees and commissions inured to the beneﬁ t of Mr. Mason, and (2) the total payments made by 
the Company to IGM for various insurance policies were $143,367, $140,374 and $124,149 in the years ended 
December 31, 2015, 2014 and 2013, respectively. 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

The Company owns 99.3% of its subsidiary, GEIC, which owns 100% of GRE and 92% of GOGAS. The Company 
has three reportable business segments: GRE, GOGAS and Afek. GRE operates REPs, including IDT Energy and 
Residents Energy, 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. GOGAS is an oil and gas 
exploration company. The GOGAS segment is comprised of early stage oil shale projects including (1) an 88.4% 
interest in Genie Mongolia, an oil shale exploration project in Central Mongolia, (2) a 98.3% interest in AMSO, 
which holds and manages a 41.3% interest in AMSO, LLC, an oil shale development project in Colorado, and (3) an 
86.1% interest in IEI, an oil shale development project in Israel. The Company has an 86.5% interest in Afek, which 
operates an oil and gas exploration project in the Golan Heights in Northern Israel. GRE has outstanding deferred 
stock units granted to offi  cers and employees that represent an interest of 3.9% of the equity of GRE. Corporate 
costs include unallocated compensation, consulting fees, legal fees, business development expenses and other 
corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur 
any direct cost of revenues.

Afek was included in the GOGAS segment from its inception until December 31, 2014. Beginning in the ﬁ rst 
quarter of 2015, Afek is a separate reportable segment. Comparative results have been reclassiﬁ ed and restated as if 
Afek was a separate segment in all periods presented.

F-36

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16—Business Segment Information – (Continued)

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 signiﬁ cant asymmetrical allocations to segments.

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

GRE

13,542
245
—
—
—

(in thousands) 
Year ended December 31, 2015
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  210,109 $ 
Income (loss) from operations  . . . . . . . . . . . 
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 
Research and development . . . . . . . . . . . . . . 
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . 
Equity in the net loss of AMSO, LLC . . . . . . 
Year ended December 31, 2014
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  275,031 $ 
Income (loss) from operations  . . . . . . . . . . . 
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 
Research and development . . . . . . . . . . . . . . 
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . 
Goodwill impairment . . . . . . . . . . . . . . . . . . 
Equity in the net loss of AMSO, LLC . . . . . . 
Year ended December 31, 2013
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  279,174 $ 
Income (loss) from operations  . . . . . . . . . . . 
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 
Research and development . . . . . . . . . . . . . . 
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . 
Equity in the net loss of AMSO, LLC . . . . . . 

25,696
15
—
—
—

3,516
24
—
—
3,562
—

Afek

GOGAS

Corporate

Total

— $ 

— $ 

(7,458)
104
63
6,583
—

(3,058)
78
1,922
—
397

— $  210,109
(5,882)
428
1,985
6,583
397

(8,908)
1
—
—
—

— $ 

— $ 

(7,294)
8
144
6,971
—
—

(6,479)
99
5,394
—
—
—

— $  275,031
(25,610)
132
5,538
6,971
3,562
—

(15,353)
1
—
—
—
—

— $ 

— $ 

(4,255)
2
186
4,032
—

(11,700)
92
7,171
—
3,194

— $  279,174
626
110
7,357
4,032
3,194

(9,115)
1
—
—
—

There were no revenues from customers located outside of the United States in all periods presented.

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

(in thousands) 
Total assets: 
December 31, 2015 . . . . . . . . . . . . . . . . . . . $ 
December 31, 2014 . . . . . . . . . . . . . . . . . . .
December 31, 2013 . . . . . . . . . . . . . . . . . . .

GRE

Afek

GOGAS

Corporate

Total

80,177 $ 
78,254
76,691

38,665 $ 
6,243
5,597

17,770 $ 
48,899
36,596

19,203 $ 
19,532
39,959

155,815
152,928
158,843

F-37

GENIE ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16—Business Segment Information – (Continued)

Net long-lived assets and total assets held outside of the United States, which are located primarily in Israel, were as 
follows:

(in thousands) 
December 31, 2015
Long-lived assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2014
Long-lived assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2013
Long-lived assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 
Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

United States

Foreign 
Countries

Total

763 $ 

646 $ 

114,880

40,935

834 $ 

143,897

352 $ 

150,315

1,230 $ 
9,031

377 $ 

8,528

1,409
155,815

2,064
152,928

729
158,843

Note 17—Selected Quarterly Financial Data (Unaudited)

The table below presents selected quarterly ﬁ nancial data of the Company for its ﬁ scal quarters in 2015 and 2014:

Quarter Ended (in 
thousands, except per
share data)
2015: 

Direct 
cost of
revenues

(Loss) 
income 
from
operations

Net (loss)
income

Revenues

Net (loss) 
income 
attributable 
to Genie
Energy Ltd.

(Loss) earnings per 
common share

Basic

Diluted

December 31 . . . . . .  $  43,915 $  27,815 $ 
September 30  . . . . . 
June 30  . . . . . . . . . . 
March 31 . . . . . . . . . 

52,238
39,527
74,429

30,420
25,551
57,229

TOTAL . . . . . . . .  $  210,109 $  141,015 $ 

2014: 

(3,674) $ 
3,839
(4,332)
(1,715)
(5.882) $ 

(4,106) $ 
2,626
(4,726)
(2,430)
(8,636) $ 

(3,794) $ 
2,845
(4,498)
(2,010)
(7,457) $ 

December 31(1)  . . . .  $  49,687 $  36,924 $  (10,666) $  (10,428) $ 
September 30  . . . . . 
June 30  . . . . . . . . . . 
March 31(2)  . . . . . . . 

46,186
48,810
130,348

28,359
37,359
120,452

(4,825)
(5,007)
(7,147)

(4,107)
(4,344)
(6,493)

TOTAL . . . . . . . .  $  275,031 $  223,094 $  (25,610) $  (27,407) $ 

(10,436) $ 
(4,395)
(4,871)
(6,784)
(26,486) $ 

(0.19) $ 
0.11
(0.22)
(0.11)
(0.40) $ 

(0.50) $ 
(0.22)
(0.24)
(0.33)
(1.31) $ 

(0.19)
0.10
(0.22)
(0.11)
(0.40)

(0.50)
(0.22)
(0.24)
(0.33)
(1.31)

(1) 

In the fourth quarter of 2014, loss from operations includes goodwill impairment of $3.6 million and gain on adjustment to 
estimated contingent payments of $0.2 million.

(2)  Unusually cold weather in the ﬁ rst quarter of 2014 that aff ected the overall demand for electricity and natural gas for heat 

caused a signiﬁ cant increase in revenues and direct cost of revenues in the ﬁ rst quarter of 2014 compared to the same 
period in 2015. The winter’s polar vortex resulted in extraordinarily large spikes in the prices of wholesale electricity and 
natural gas in markets where GRE and other REPs purchased their supply.

F-38

DOMESTIC SUBSIDIARIES

Exhibit 21.01

Name
American Shale Oil Corporation (DE)
American Shale Oil, LLC (DE), Assumed Name in TX: AMSO, LLC
AMSO Holdings I, Inc. (DE)
AMSO Holdings, LLC (DE)
DMS Promotions, LLC (DE)
Diversegy Consultant Program, LLC (TX)
Diversegy, LLC (TX)
Evergreen Gas & Electric, LLC (DE)
Genie Energy International Corporation (DE)
Genie Energy Services, LLC (DE)
Genie Mongolia, Inc. (DE) 
Genie Oil and Gas, Inc. (DE)
Genie Retail Energy, Inc. (DE)
Genie Solar Energy LLC (DE)
IDT Energy, Inc. (DE)
IDT Energy Network, LLC (DE)
IntelliMark Services, LLC (DE)
LED USA, LLC (DE) 
North American Energy, Inc. (DE)
Residents Energy, LLC (NY)
Trupro Energy, LLC (CT)
Virtual Power Hedging, LLC (DE)

FOREIGN SUBSIDIARIES

Name
Genie Dutch Holdings B.V.
Genie Energie B.V.
Genie Energy International (Genie Energy International is a registered trade name)
Genie Energy Israel Ltd.
Genie IP B.V.
Genie Israel Holdings Ltd.
Genie Mongolia Holdings B.V.
Genie Oil Shale Mongolia LLC
Afek Oil & Gas Ltd.
Genie Mongolia B.V.
Israel Energy Initiatives Ltd.

Country of Formation
Netherlands
Netherlands
Netherlands
Israel
Netherlands
Israel
Netherlands
Mongolia
Israel
Netherlands
Israel

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Exhibit 23.01

Genie Energy Ltd.
Newark, New Jersey

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 ( No. 333-177565) 
of Genie Energy Ltd. of our reports dated March 15, 2016, relating to the consolidated ﬁ nancial statements, and the 
eff ectiveness of Genie Energy Ltd.’s  internal control over ﬁ nancial reporting, which appear in the Annual Report to 
Shareholders, which is incorporated by reference in this Annual Report on Form 10-K .

/s/ BDO USA, LLP

Woodbridge, NJ
March 15, 2016

Certiﬁ cation of Chief Executive Offi  cer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Howard S. Jonas, certify that:

Exhibit 31.01

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of Genie Energy Ltd.;

Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to 
state a material fact necessary to make the statements made, in light of the circumstances under which 
such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the ﬁ nancial statements, and other ﬁ nancial information included in this 
Report, fairly present in all material respects the ﬁ nancial condition, results of operations and cash ﬂ ows 
of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying offi  cer(s) and I are responsible for establishing and maintaining 
disclosure controls and procedures (as deﬁ ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and 
internal control over ﬁ nancial reporting (as deﬁ ned in Exchange Act Rules 13a-15(f) and 15d-15(f)) for 
the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and 

procedures to be designed under our supervision, to ensure that material information relating to 
the registrant, including its consolidated subsidiaries, is made known to us by others within those 
entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over ﬁ nancial reporting, or caused such internal control over 

ﬁ nancial reporting to be designed under our supervision, to provide reasonable assurance 
regarding the reliability of ﬁ nancial reporting and the preparation of ﬁ nancial statements for 
external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the eff ectiveness of the registrant’s disclosure controls and procedures and presented in 
this report our conclusions about the eff ectiveness of the disclosure controls and procedures, as of 
the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over ﬁ nancial reporting that 

occurred during the registrant’s most recent ﬁ scal quarter (the registrant’s fourth ﬁ scal quarter in 
the case of an annual report) that has materially aff ected, or is reasonably likely to materially aff ect, 
the registrant’s internal control over ﬁ nancial reporting; and

5. 

The registrant’s other certifying offi  cer(s) and I have disclosed, based on our most recent evaluation 
of internal control over ﬁ nancial reporting, to the registrant’s auditors and the audit committee of the 
registrant’s board of directors (or persons performing the equivalent functions):

(a)  All signiﬁ cant deﬁ ciencies and material weaknesses in the design or operation of internal control 

over ﬁ nancial reporting which are reasonably likely to adversely aff ect the registrant’s ability to 
record, process, summarize and report ﬁ nancial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a 

signiﬁ cant role in the registrant’s internal control over ﬁ nancial reporting.

Date: March 15, 2016

/s/ Howard S. Jonas
Howard S. Jonas
Chief Executive Officer

Certiﬁ cation of Principal Financial Offi  cer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Avi Goldin, certify that:

Exhibit 31.02

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of Genie Energy Ltd.;

Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to 
state a material fact necessary to make the statements made, in light of the circumstances under which 
such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the ﬁ nancial statements, and other ﬁ nancial information included in this 
Report, fairly present in all material respects the ﬁ nancial condition, results of operations and cash ﬂ ows 
of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying offi  cer(s) and I are responsible for establishing and maintaining 
disclosure controls and procedures (as deﬁ ned in Exchange Act Rules 13a-15(e) and 15d-15(e)) and 
internal control over ﬁ nancial reporting (as deﬁ ned in Exchange Act Rules 13a-15(f) and 15d-15(f)) for 
the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and 

procedures to be designed under our supervision, to ensure that material information relating to 
the registrant, including its consolidated subsidiaries, is made known to us by others within those 
entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over ﬁ nancial reporting, or caused such internal control over 

ﬁ nancial reporting to be designed under our supervision, to provide reasonable assurance 
regarding the reliability of ﬁ nancial reporting and the preparation of ﬁ nancial statements for 
external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the eff ectiveness of the registrant’s disclosure controls and procedures and presented in 
this report our conclusions about the eff ectiveness of the disclosure controls and procedures, as of 
the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over ﬁ nancial reporting that 

occurred during the registrant’s most recent ﬁ scal quarter (the registrant’s fourth ﬁ scal quarter in 
the case of an annual report) that has materially aff ected, or is reasonably likely to materially aff ect, 
the registrant’s internal control over ﬁ nancial reporting; and

5. 

The registrant’s other certifying offi  cer(s) and I have disclosed, based on our most recent evaluation 
of internal control over ﬁ nancial reporting, to the registrant’s auditors and the audit committee of the 
registrant’s board of directors (or persons performing the equivalent functions):

(a)  All signiﬁ cant deﬁ ciencies and material weaknesses in the design or operation of internal control 

over ﬁ nancial reporting which are reasonably likely to adversely aff ect the registrant’s ability to 
record, process, summarize and report ﬁ nancial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a 

signiﬁ cant role in the registrant’s internal control over ﬁ nancial reporting.

Date: March 15, 2016

/s/ Avi Goldin
Avi Goldin
Chief Financial Officer

Exhibit 32.01

GENIE ENERGY LTD.

Certiﬁ cation Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

In connection with the Annual Report of Genie Energy Ltd. (the “Company”) on Form 10-K for the annual period 
ended December 31, 2015 as ﬁ led with the Securities and Exchange Commission (the “Report”), I, Howard S. Jonas, 
Chief Executive Offi  cer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of 
the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. 

2. 

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange 
Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the ﬁ nancial condition 
and results of operations of the Company.

Date: March 15, 2016

/s/ Howard S. Jonas
Howard S. Jonas
Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, 
acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this 
written statement required by Section 906, has been provided to Genie Energy Ltd. and will be retained by Genie 
Energy Ltd. and furnished to the Securities and Exchange Commission or its staff  upon request.

Exhibit 32.02

GENIE ENERGY LTD.

Certiﬁ cation Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

In connection with the Annual Report of Genie Energy Ltd. (the “Company”) on Form 10-K for the annual period 
ended December 31, 2015 as ﬁ led with the Securities and Exchange Commission (the “Report”), I, Avi Goldin, 
Chief Financial Offi  cer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of 
the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. 

2. 

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange 
Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the ﬁ nancial condition 
and results of operations of the Company.

Date: March 15, 2016

/s/ Avi Goldin
Avi Goldin
Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, 
acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this 
written statement required by Section 906, has been provided to Genie Energy Ltd. and will be retained by Genie 
Energy Ltd. and furnished to the Securities and Exchange Commission or its staff  upon request.