Genie Energy Ltd. Reports Fourth Quarter and Year End 2012 Results

  Genie Energy Ltd. Reports Fourth Quarter and Year End 2012 Results

Business Wire

NEWARK, N.J. -- March 13, 2013

Genie Energy Ltd. (NYSE: GNE, GNEPRA) reported EBITDA and income from
operations of $1.9 million and net income attributable to common stockholders
of $1.8 million for the fourth quarter, the three months ended December 31,
2012. For the full year 2012, Genie Energy reported EBITDA of $3.2 million and
income from operations of $3.0 million. The full year net loss attributable to
common stockholders was $3.5 million.

Genie Energy’s Board of Directors has declared a quarterly dividend of $0.1594
per share of Series 2012-A Preferred Stock (NYSE: GNEPRA) for the first
quarter of its 2013 fiscal year, the three months ending March 31, 2013. The
quarterly dividend will be paid on May 15, 2013 to shareholders of record as
of the close of business on May 8, 2013. The ex-dividend date is May 6, 2013.
The tax treatment of the dividend will be announced on the investor relations
page of the Genie Energy website prior to the payment date. On February 15,
2013 Genie distributed $0.1317 per preferred share which will be treated as a
return of capital and not as a dividend for tax purposes.

RECENT AND 4Q12 HIGHLIGHTS

  *Consolidated revenues (+$21.8 million), gross profit (+$7.7 million) and
    EBITDA (+$4.8 million) increased strongly year over year on higher gas and
    electric consumption
  *IDT Energy increased EBITDA by $6.4 million compared to 4Q11, to $7.9
    million
  *In early March, 2013, AMSO, LLC initiated start up of its oil shale pilot
    test in Colorado.
  *On February 20, 2013, the government of Israel awarded a Genie Energy
    subsidiary an exclusive petroleum exploration license covering 396.5
    square kilometers in the Southern portion of the Golan Heights. The
    Company believes that the license area may contain significant quantities
    of conventional oil and gas in relatively tight formations
  *Also in Israel, the Supreme Court rejected both pending legal challenges
    to IEI’s oil shale exploration license during 4Q12
  *Fully diluted net income per share attributable to Genie Energy’s common
    stockholders of $0.08 compared to a diluted loss per share of $(0.06) in
    4Q11
  *Net cash used in operating activities of $2.2 million compared to net cash
    provided by operating activities of $0.8 million in 4Q11

MANAGEMENT COMMENTS

Claude Pupkin, Genie Energy’s CEO, said, “This was a significant and positive
quarter both for our retail energy business and for Genie Oil and Gas. IDT
Energy again performed very well with a significant increase in profitability.
On the GOGAS side of the business, the Supreme Court of Israel cleared away
two legal challenges to IEI’s oil shale development license and our Genie
Israel Oil and Gas subsidiary was recently awarded an exclusive exploration
license covering what we believe may be a significant quantity of conventional
oil in relatively tight formations. In Colorado, we are excited that after
addressing our equipment issues, during the first quarter of 2013 we have
begun operations of AMSO’s in-situ pilot test.”

Geoff Rochwarger, Genie Energy’s Vice Chairman and IDT Energy’s CEO, said,
“IDT Energy had another strong quarter despite the disruptive impact of
Hurricane Sandy. Revenue, gross profit and EBITDA all increased substantially
compared to the year ago quarter on the strength of a 74.6% increase in
electric revenue. The hurricane and its aftermath reduced new customer
acquisitions and acquisition expense below normalized levels, but we expect
that the long term impact on our business will not be significant.”

GENIE ENERGY CONSOLIDATED RESULTS FOR 4Q12 AND FULL YEAR 2012

$ in millions,                         YoY                          2012/2011
except EPS         4Q12    4Q11     Change   2012     2011    Change
                                       (%/$)                        (%/$)
Revenues            $65.4    $43.6     +49.9%    $229.5    $197.9   +15.9%
Gross profit        $18.5    $10.7     +72.2%    $69.6     $56.7    +22.7%
Gross margin                           +360                         +160 basis
percentage          28.2%    24.6%     basis     30.3%     28.7%    points
                                       points
SG&A expense        $13.4    $10.8     +24.5%    $54.0     $40.4    +33.6%
Research and
development         $2.2     $1.6      +39.5%    $9.4      $7.4     +25.8%
expense
Equity in the net   $0.9     $1.2      $(0.3)    $3.2      $5.7     $(2.5)
loss of AMSO, LLC
EBITDA*             $1.9     $(2.9)    $4.8      $3.2      $3.2     $—
Income (loss)       $1.9     $(2.9)    $4.8      $3.0      $3.1     $(0.1)
from operations
Net income (loss)
attributable to
Genie Energy’s      $1.8     $(1.2)    $3.0      $(3.5)    $0.7     $(4.2)
common
stockholders
Diluted income
(loss) per share                                                    
attributable to     $0.08    $(0.06)   $0.14     $(0.17)   $0.03
Genie Energy’s                                                      $(0.20)
common
stockholders
Net cash (used
in) provided by     $(2.2)   $0.8      $(3.0)    $(1.0)    $1.9     $(2.9)
operating
activities

*EBITDA for all periods presented is a non-GAAP measure intended to provide
useful information that may be more indicative of Genie Energy’s or the
relevant segment’s core operating results than the nearest GAAP measures.
Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of
this release for an explanation of EBITDA and reconciliation to the most
directly comparable GAAP measure.

Genie Energy’s revenues, direct costs of revenues, and gross profit are
generated entirely by its retail energy provider business. For the discussion
of those metrics, please see the results of the retail energy provider
segment, IDT Energy, below.

SG&A expense in 4Q12 increased 24.5% year over year to $13.4 million. SG&A
expense for the full year 2012 was $54.0 million compared to $40.4 million in
2011. Please see the segment discussions below for additional details. The
increase in both periods primarily reflects the increase in IDT Energy’s SG&A
expense, business development activity within Genie Oil and Gas (GOGAS) as
well as incremental expenses associated with operating as a separate public
company following Genie Energy’s spin-off from IDT Corporation (NYSE: IDT) in
October 2011. Corporate G&A, inclusive of non-cash compensation expense, was
$2.1 million in 4Q12 compared to $1.2 million in 4Q11, and $7.9 million in
2012 compared to $2.1 million in 2011.

Research and development expense during 4Q12, all of which was incurred by the
GOGAS segment, was $2.2 million, compared to $1.6 million in the year ago
quarter. For all of 2012, research and development expense was $9.4 million
compared to $7.4 million in 2011.

Equity in the loss of AMSO, LLC was $0.9 million in 4Q12, compared $1.2
million in 4Q11. For all of 2012, equity in the net loss of AMSO, LLC was $3.2
million compared to $5.7 million in 2011. The GOGAS segment description below
provides additional details.

EBITDA was $1.9 million in 4Q12, compared to an EBITDA loss of $(2.9) million
in 4Q11. The increase was substantially the result of the increased gross
profit generated by growth in IDT Energy’s customer base, partially offset by
higher levels of SG&A throughout the Company. For the full years, EBITDA was
$3.2 million in both 2012 and 2011 as the strong increase in IDT Energy’s
EBITDA was offset by increasing G&A and R&D expense at Genie Oil and Gas, and
increased corporate G&A.

Net income attributable to Genie Energy’s common stockholders was $1.8 million
($0.08 per diluted share) in 4Q12 compared to net loss attributable to Genie
Energy’s common stockholders of $(1.2) million ($(0.06) per diluted share) in
the year ago period. For all of 2012, net loss attributable to Genie Energy’s
common stockholders was $3.5 million ($0.17 per diluted share) compared to net
income attributable to Genie Energy’s common stockholders of $0.7 million
($0.03 per diluted share) in 2011.

During 4Q12, the Company settled a pending New York City gross receipts tax
audit with a payment of $5.5 million. The liability from the audit, which
covered all of the periods since the inception of IDT Energy, was previously
fully accrued and, as a result, the settlement did not materially impact net
income in 4Q12.

On March 5, 2013, Genie’s offer to exchange shares of Class B Common Stock for
shares of Series 2012-A Preferred Stock on a one-for-one basis expired.
Approximately 0.3 million shares were tendered and exchanged during the
renewed exchange period. Approximately 1.6 million shares were tendered and
exchanged in the initial exchange offer which concluded in October 2012.

The base annual dividend of $0.6375 on the approximately 1.9 million shares
issued of Genie Energy’s Series 2012-A Preferred Stock is expected to reduce
net income available to common stockholders by approximately $1.2 million each
year. In 4Q12, the dividend reduced net income available to common
stockholders by $0.2 million.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

As of December 31, 2012, Genie Energy had $150.3 million in total assets
including $92.9 million in cash, cash equivalents, restricted cash,
certificates of deposit and marketable securities. Genie Energy’s liabilities
totaled $32.2 million, with no long term debt outstanding.

Net cash used in operating activities was $(2.2) million during 4Q12, compared
to  net cash provided by operating activities of $0.8 million during 4Q11. In
2012, net cash used in operating activities was $(1.0) million compared to net
cash provided by operating activities of $1.9 million in 2011. Operating cash
flow in both periods was impacted by the $5.5 million tax settlement
referenced above.

RESULTS BY SEGMENT

IDT Energy

$ in millions     4Q12   4Q11   YoY Change  2012    2011    2012/2011
                                   (%/$)                          Change (%/$)
Total revenues     $65.4   $43.6   +49.9%       $229.5   $197.9   +15.9%
Electric           $48.2   $27.6   +74.6%       $174.3   $134.4   +29.7%
revenues
Natural gas        $17.2   $16.0   +7.4%        $55.2    $63.6    (13.2)%
revenues
Gross profit       $18.5   $10.7   +72.2%       $69.6    $56.7    +22.7%
Gross margin       28.2%   24.6%   +360 basis   30.3%    28.7%    +160 basis
percentage                         points                         points
SG&A expense       $10.6   $9.3    +14.3%       $44.6    $37.0    +20.4%
EBITDA             $7.9    $1.5    +$6.4        $25.0    $19.7    +27.3%
Income from        $7.9    $1.4    +$6.4        $25.0    $19.6    +27.2%
operations

During 4Q12, IDT Energy entered its fourth electric utility territory in
Maryland, with an addressable market of 240,000 meters. During all of 2012,
IDT Energy entered six new electric territories in Pennsylvania and Maryland
and a dual meter territory in Maryland - with an aggregate addressable market
of approximately 2.8 million electric meters and 0.7 million gas meters.

At December 31, 2012, IDT Energy had approximately 502,000 meters enrolled, an
increase of 15% year over year and a 4% decrease sequentially. The aggregate
meter increase reflects a 30% increase year over year in electric meters
enrolled to 331,000 partially offset by a 7% decline year over year in gas
meters enrolled to 171,000. These changes reflect the concentration of
customer acquisition activities in newly entered utility territories, which
were predominantly electric-only utilities. Gross meter acquisitions were
79,000 in 4Q12 compared to 89,000 in 4Q11. The year over year decline in gross
meter additions reflected the impact of Hurricane Sandy and the lower rate of
customer acquisitions in newly entered Maryland utility territories compared
to the Pennsylvania territories the Company had entered recently in the year
ago quarter.

Meters at end of                                     June    March
Quarter                  December 31,  September  30,    31,    December
                          2012           30, 2012    2012    2012    31, 2011
(in thousands)
Electricity meters        331            343         313     289     254
Natural gas meters        171            180         182     186     184
Total                     502            523         495     475     438

Average monthly churn was 6.8% in 4Q12, unchanged from 4Q11 and an increase
from 6.6% in 3Q12. The sequential increase in the churn rate was primarily due
to the significant gross meter acquisitions during the first nine months of
2012, as churn rates tend to be highest for newly enrolled customers.

IDT Energy increased residential customer equivalents (RCEs) 26% year over
year and decreased 3% sequentially to 312,000 at December 31, 2012.

RCEs at end of Quarter   December    September 30,   June    March   December
                        31, 2012   2012           30,    31,    31, 2011
(in thousands)                                       2012    2012
Electricity RCEs         238         235             204     176     153
Natural gas RCEs         74          87              88      82      95
Total                    312         322             292     258     248

Electricity RCEs increased 56% to 238,000 at December 31, 2012 compared to the
year ago level reflecting net meter acquisitions predominantly in
Pennsylvania, and an increase in the average consumption per meter as a result
of meter acquisition programs focused on areas with larger homes.

Natural gas RCEs decreased 22% year over year to 74,000. The decline in
natural gas RCEs reflects the impact of the unseasonably mild winter of
2011-2012 on the 12-month natural gas consumption histories that are the basis
for calculating RCEs served (while the RCE benchmark amount remains
unchanged), as well as the decline in natural gas meters enrolled.

IDT Energy’s revenues during 4Q12 increased 49.9% to $65.4 million from $43.6
million in the year ago quarter.

Electric revenues increased 74.6% year over year to $48.2 million, reflecting
a 77.1% year over year increase in kWh sold. The increase in kWh sold more
than offset a 1.4% decline in average revenue per kWh of electricity sold.

Natural gas revenues were $17.2 million during 4Q12, a 7.4% increase compared
to 4Q11. Therms sold increased by 8.4% year over year, which more than offset
a 0.9% decrease in average revenue per therm sold.

Gross profit increased to $18.5 million in 4Q12, compared to $10.7 million in
4Q11, driven primarily by the increase in kWh sold.

Gross margin during 4Q12 was 28.2%, a 360 basis point increase year over year,
primarily due to a significant increase in natural gas gross margin. The
average cost per therm sold decreased 13% year over year, which had a
favorable impact on natural gas gross margin.

IDT Energy’s SG&A expense during 4Q12 was $10.6 million compared to $9.3
million in the year ago period. The increase was due predominantly to
increases in payroll expense, customer acquisition costs, consolidated billing
service fees and consulting and professional fees. SG&A expense in 4Q11
included a $0.9 million charge for sales and use tax pertaining to liabilities
incurred in prior periods, which reduced the increase in SG&A expense in 4Q12
compared to 4Q11.

IDT Energy generated $7.9 million in EBITDA and income from operations during
4Q12, compared to $1.5 million in EBITDA and $1.4 million in income from
operations in 4Q11. The increase was substantially the result of the increase
in gross profit compared to the year ago quarter, partially offset by higher
SG&A expense.

Financing fees charged by BP Energy, IDT Energy’s preferred supplier, were
$0.8 million in 4Q12 compared to $0.6 million in 4Q11 as a result of higher
consumption by IDT Energy’s customer base. For 2012 and 2011, the comparable
totals were $2.9 million and $2.2 million, respectively.

Genie Oil and Gas (GOGAS)

GOGAS’ projects include in-situ oil shale projects in Colorado and Israel and
a new conventional oil exploration project in Israel.

GOGAS currently generates no revenue. GOGAS’ operating expense consists
primarily of research and development expense incurred by Israel Energy
Initiatives, Ltd. (IEI), and by its global resource exploration, intellectual
property development and other business development efforts. GOGAS accounts
for its investment in AMSO, LLC using the equity method. GOGAS expects that
its Genie Israel Oil and Gas subsidiary will begin to incur significant
expenses related to its exploration program in 2Q13 under the exploration
license granted to it in February 2013.

GOGAS reported $2.9 million of combined R&D and G&A expense in 4Q12, compared
to $1.9 million in the year ago quarter. For the full 2012 year, combined R&D
and G&A expense was $10.8 million compared to $8.7 million in 2011. The
increases reflect an increase in R&D expense at IEI and in GOGAS’ global
exploration and business development efforts. Equity in the net loss of AMSO,
LLC decreased to $0.9 million in 4Q12 from $1.2 million in the year ago
quarter reflecting the lower levels of spending associated with the
substantial completion of pilot plant construction. GOGAS’ loss from
operations was $3.9 million for 4Q12, compared to $3.2 million in 4Q11.

AMSO, LLC is a joint venture oil shale exploration and production initiative
with Total, S.A. operating pursuant to a federal Research, Development and
Demonstration lease on federal lands in Colorado.

AMSO, LLC has constructed a pilot facility designed to validate key
assumptions of its in-situ oil shale recovery process and has received all
permits required for pilot test operations. After addressing equipment related
issues that delayed the start of pilot test operations in 2012, AMSO recently
initiated pilot test start-up. In early March, 2013, AMSO, LLC initiated start
up of its oil shale pilot test in Colorado. Once thepilot attains
steady-state operations, AMSO will analyze the pilot operation’s data and
adjust processes as necessary.

IEI holds an exclusive Oil Shale Exploration and Production license covering
238 square kilometers in the Shfela basin region in Israel.

During 4Q12, the Supreme Court of Israel rejected the two lawsuits pending
before it that sought to cancel the regulations governing the permitting
process of oil and gas exploration, and cancel the exploration license granted
to IEI. IEI continues to await the final regulations required for preparation
and submission of an environmental impact statement, which is a necessary
prerequisite for the submission of a permit application to construct and
operate an oil shale pilot test facility.

On February 20, 2013, the government of Israel awarded a Genie Energy
subsidiary, Genie Israel Oil and Gas, Ltd., an exclusive petroleum exploration
license covering 396.5 square kilometers in the Southern portion of the Golan
Heights. The Company believes, based on its preliminary analysis and
interpretation of existing seismic and other geological data, that the newly
issued license area may contain significant quantities of conventional oil and
gas in relatively tight formations. The Company expects to conduct an initial
exploration program of up to 36 months including geophysical testing, drilling
and analysis to evaluate its preliminary hypothesis.

GENIE ENERGY EARNINGS CONFERENCE CALL

Genie Energy’s management will host a conference call at 8:30 AM Eastern
today, March 13^th, to discuss financial and operational results, business
outlook and strategy. The call will begin with management’s remarks followed
by Q&A with analysts and investors.

To listen to the call and/or to participate in the Q&A, dial toll-free
1-877-317-6789 or 1-412-317-6789 (international) and request the Genie Energy
call.

Approximately one hour after the call concludes, an audio file of the call in
MP3 format replay will be available on the “Investors” section of the Genie
Energy website www.genie.com/investors. In addition, a teleconference replay
will be available through March 27, 2012 at 1-877-344-7529 (US toll free) or
at 1-412-317-0088 (international). Callers should ask for conference call
#10025499.

ABOUT GENIE ENERGY LTD.

Genie Energy Ltd. (NYSE: GNE, GNEPRA) is comprised of IDT Energy and Genie Oil
and Gas (GOGAS). IDT Energy is a retail energy provider supplying electricity
and natural gas to residential and small business customers in the
Northeastern United States. GOGAS is pioneering technologies to produce clean
and affordable transportation fuels from the world's abundant oil shales and
other fuel resources. GOGAS resource development projects include in-situ oil
shale projects in Colorado and Israel and a conventional oil exploration
program in Israel. For more information, visit www.genie.com.

In this press release, all statements that are not purely about historical
facts, including, but not limited to, those in which we use the words
“believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate, “target” and
similar expressions, are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. While these forward-looking
statements represent our current judgment of what may happen in the future,
actual results may differ materially from the results expressed or implied by
these statements due to numerous important factors, including, but not limited
to, those described in our most recent report on SEC Form 10 (under the
headings “Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”), which may be revised or supplemented in
subsequent reports on SEC Forms 10-K, 10-Q and 8-K. These factors include, but
are not limited to, the following: potential declines in prices for our
products and services; our ability to return to profitability and improve our
cash flow; impact of government regulation; effectiveness of our marketing and
distribution efforts; and general economic conditions. We are under no
obligation, and expressly disclaim any obligation, to update the
forward-looking statements in this press release, whether as a result of new
information, future events or otherwise.



GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS
(Unaudited)

December 31                                                   
(in thousands)                                    2012        2011    
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                          $ 69,409        $ 102,220
Restricted cash                                      10,841          591
Certificates of deposit                              2,205           —
Marketable securities                                10,485          —
Trade accounts receivable, net of allowance
for doubtful accounts of $130 at December 31,        40,932          26,212
2012 and 2011
Inventory                                            2,644           4,067
Prepaid expenses                                     3,315           3,953
Deferred income tax assets, net—current              599             3,081
portion
Other current assets                              771         1,626   
TOTAL CURRENT ASSETS                                 141,201         141,750
Property and equipment, net                          409             446
Goodwill                                             3,663           3,663
Deferred income tax assets, net—long-term            —               2,026
portion
Other assets                                      5,033       2,309   
TOTAL ASSETS                                     $ 150,306    $ 150,194 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade accounts payable                             $ 20,641        $ 12,929
Accrued expenses                                     7,832           9,152
Advances from customers                              1,472           2,253
Income taxes payable                                 1,244           2,624
Dividend payable                                     211             1,148
Due to IDT Corporation                               600             757
Other current liabilities                         209         1,032   
TOTAL CURRENT LIABILITIES                            32,209          29,895
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 1,605          13,639          —
and nil shares issued and outstanding at
December 31, 2012 and 2011, respectively
Class A common stock, $.01 par value;
authorized shares—35,000; 1,574 shares issued        16              16
and outstanding at December 31, 2012 and 2011
Class B common stock, $.01 par value;
authorized shares—200,000; 19,827 and 21,382
shares issued and 19,800 and 21,382 shares           198             214
outstanding at December 31, 2012 and 2011,
respectively
Additional paid-in capital                           80,196          92,321
Treasury stock, at cost, consisting of 27 and
nil shares of Class B common at December 31,         (204    )       —
2012 and 2011, respectively
Accumulated other comprehensive income (loss)        270             (137    )
Retained earnings                                 28,375      34,924  
Total Genie Energy Ltd. stockholders’ equity         122,490         127,338
Noncontrolling interests:
Noncontrolling interests                             (3,393  )       (6,039  )
Receivable for issuance of equity                 (1,000  )    (1,000  )
Total noncontrolling interests                    (4,393  )    (7,039  )
TOTAL EQUITY                                      118,097     120,299 
TOTAL LIABILITIES AND EQUITY                     $ 150,306    $ 150,194 



GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                  Year ended December 31,                   
(in thousands,
except per share   2012          2011          4Q12         4Q11
data)
REVENUES           $ 229,459     $ 197,921     $ 65,403     $ 43,620
Direct cost of      159,872     141,223     46,936     32,896 
revenues
GROSS PROFIT           69,587          56,698          18,467         10,724
OPERATING
EXPENSES AND
LOSSES:
Selling, general
and                    54,000          40,432          13,429         10,783
administrative
(i)
Research and           9,365           7,445           2,224          1,594
development
Equity in the
net loss of         3,175       5,675       922        1,208  
AMSO, LLC
Income (loss)          3,047           3,146           1,892          (2,861 )
from operations
Interest income        404             82              127            29
Financing fees         (2,913  )       (2,178  )       (816   )       (593   )
Other expense,      (143    )    (1,409  )    (47    )    (718   )
net
Income (loss)
before income          395             (359    )       1,156          (4,143 )
taxes
(Provision for)
benefit from        (2,930  )    (3,380  )    (97    )    2,058  
income taxes
NET (LOSS)             (2,535  )       (3,739  )       1,059          (2,085 )
INCOME
Net (income)
loss
attributable to     (746    )    4,484       949        924    
noncontrolling
interests
NET (LOSS)
INCOME
ATTRIBUTABLE TO        (3,281  )       745             2,008          (1,161 )
GENIE ENERGY
LTD.
Dividends on        (211    )    —           (211   )    —      
preferred stock
NET (LOSS)
INCOME
ATTRIBUTABLE TO    $ (3,492  )   $ 745        $ 1,797     $ (1,161 )
GENIE ENERGY
LTD. COMMON
STOCKHOLDERS
(Loss) earnings
per share
attributable to
Genie Energy
Ltd. common
stockholders:
Basic              $ (0.17   )   $ 0.04       $ 0.09      $ (0.06  )
Diluted            $ (0.17   )   $ 0.03       $ 0.08      $ (0.06  )
                                                        
Weighted-average
number of shares
used in
calculation of
(loss) earnings
per share
Basic               20,687      20,365      19,674     20,365 
Diluted             20,687      22,493      21,297     20,365 
                                                        
(i) Stock-based
compensation
included in
selling, general   $ 3,429      $ 581        $ 815       $ 483    
and
administrative
expense



GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                Year ended December 31,
(in thousands)                                    2012        2011    
OPERATING ACTIVITIES                                          
Net loss                                           $ (2,535  )     $ (3,739  )
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation                                         124             27
Deferred income taxes                                4,508           (2,793  )
Stock-based compensation                             3,429           581
Equity in the net loss of AMSO, LLC                  3,175           5,675
Change in assets and liabilities:
Restricted cash                                      (233    )       —
Trade accounts receivable                            (14,711 )       971
Inventory                                            1,423           (556    )
Prepaid expenses                                     638             (1,977  )
Other current assets and other assets                (783    )       (2,207  )
Trade accounts payable, accrued expenses and         6,275           5,271
other current liabilities
Advances from customers                              (781    )       (123    )
Due to IDT Corporation                               (157    )       —
Income taxes payable                              (1,380  )    813     
Net cash (used in) provided by operating             (1,008  )       1,943
activities
INVESTING ACTIVITIES
Capital expenditures                                 (91     )       (241    )
Capital contributions to AMSO, LLC                   (4,102  )       (3,468  )
Increase in restricted cash                          —               (81     )
Issuance of notes receivable                         (650    )       —
Purchase of licenses and security deposits           (175    )       —
Purchases of certificates of deposit                 (2,205  )       —
Purchases of marketable securities                   (11,484 )       —
Proceeds from maturities of marketable            966         —       
securities
Net cash used in investing activities                (17,741 )       (3,790  )
FINANCING ACTIVITIES
Capital contribution from IDT Corporation in         —               82,183
connection with the spin-off
Dividends paid                                       (4,205  )       —
Funding provided by (repaid to) IDT                  —               (7,368  )
Corporation
Repurchase of noncontrolling interests               —               (1,528  )
Proceeds from exercise of stock options              5               —
Increase in restricted cash                          (10,017 )       —
Repurchases of common stock and Class B common    (204    )    —       
stock
Net cash (used in) provided by financing             (14,421 )       73,287
activities
Effect of exchange rate changes on cash and       359         —       
cash equivalents
Net (decrease) increase in cash and cash             (32,811 )       71,440
equivalents
Cash and cash equivalents at beginning of         102,220     30,780  
period
Cash and cash equivalents at end of period       $ 69,409     $ 102,220 
                                                                             
                                                                             

Reconciliation of Non-GAAP Financial Measure for the Fourth Quarter of 2012
and the Year Ended December 31, 2012

In addition to disclosing financial results that are determined in accordance
with generally accepted accounting principles in the United States of America
(GAAP), Genie Energy also disclosed for the fourth quarter of 2012 EBITDA,
which is a non-GAAP measure. Generally, a non-GAAP financial measure is a
numerical measure of a company’s performance, financial position, or cash
flows that either excludes or includes amounts that are not normally excluded
or included in the most directly comparable measure calculated and presented
in accordance with GAAP.

Genie Energy’s measure of EBITDA consists of gross profit less selling,
general and administrative expense, research and development expense, and
equity in net loss of AMSO, LLC, plus depreciation (which is included in
selling, general and administrative expense). Another way of calculating
EBITDA is to start with income (loss) from operations and add depreciation.

Management believes that Genie Energy’s EBITDA provides useful information to
both management and investors by excluding certain expenses that may not be
indicative of Genie Energy’s or the relevant segment’s core operating results.
Management uses EBITDA, among other measures, as a relevant indicator of core
operational strengths in its financial and operational decision making. In
addition, management uses EBITDA to evaluate operating performance in relation
to Genie Energy’s competitors. Disclosure of this financial measure may be
useful to investors in evaluating performance and allows for greater
transparency to the underlying supplemental information used by management in
its financial and operational decision-making. EBITDA may also be an indicator
of the strength and performance of Genie Energy’s and the segment’s ongoing
business operations, including the ability to fund capital expenditures, and
meet working capital needs from current operations (as opposed to cash
resources), and to incur debt. In addition, Genie Energy has historically
reported EBITDA and believes it is commonly used by readers of financial
information in assessing performance, therefore the inclusion of comparative
numbers provides consistency in financial reporting at this time.

Management refers to EBITDA, as well as the GAAP measures gross profit, income
(loss) from operations and net income (loss), on a segment and/or consolidated
level to facilitate internal and external comparisons to the segments’ and
Genie Energy's historical operating results, in making operating decisions,
for budget and planning purposes, and to form the basis upon which management
is compensated.

While depreciation is considered an operating cost under GAAP, it primarily
represents the non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods. While Genie
Energy’s business may be capital intensive in the future, Genie Energy expects
to incur nominal capital expenditures for the foreseeable future. Genie
Energy’s operating results exclusive of depreciation is therefore a useful
indicator of its current performance.

EBITDA should be considered in addition to, not as a substitute for, or
superior to, gross profit, income (loss) from operations, cash flow from
operating activities, net income (loss), basic and diluted earnings (loss) per
share or other measures of liquidity and financial performance prepared in
accordance with GAAP. In addition, Genie Energy’s measurements of EBITDA may
not be comparable to similarly titled measures reported by other companies.

Following is the reconciliation of EBITDA to the most directly comparable GAAP
measure, which is income (loss) from operations for Genie Energy’s reportable
segments and for Genie Energy on a consolidated basis.



Genie Energy Ltd.
Reconciliation of EBITDA to Income (Loss) from Operations
(unaudited)
$ in thousands

                     Total        IDT Energy   GOGAS        Corporate
Three Months Ended                                             
December 31, 2012
(4Q12)
Revenues               $ 65,403       $  65,403      $ -            $ -
Direct cost of          46,936        46,936     -          -      
revenues
Gross profit             18,467          18,467        -              -
Selling, general
and administrative       13,397          10,593        701            2,103
excluding
depreciation
Research and             2,224           -             2,224          -
development
Equity in net loss      922           -          922        -      
of AMSO, LLC
EBITDA                   1,924           7,874         (3,847 )       (2,103 )
Subtract:
Depreciation            32            9          23         -      
Income (loss) from     $ 1,892       $  7,865     $ (3,870 )   $ (2,103 )
operations
                                                             
                       Total          IDT Energy   GOGAS        Corporate
Three Months Ended
December 31, 2011
(4Q11)
Revenues               $ 43,620       $  43,620      $ -            $ -
Direct cost of          32,896        32,896     -          -      
revenues
Gross profit             10,724          10,724        -              -
Selling, general
and administrative       10,774          9,272         350            1,152
excluding
depreciation
Research and             1,594           -             1,594          -
development
Equity in net loss      1,208         -          1,208      -      
of AMSO, LLC
EBITDA                   (2,852 )        1,452         (3,152 )       (1,152 )
Subtract:
Depreciation            9             7          2          -      
(Loss) income from     $ (2,861 )    $  1,445     $ (3,154 )   $ (1,152 )
operations



Genie Energy Ltd.
Reconciliation of EBITDA to Income (Loss) from Operations
(unaudited)
$ in thousands

                     Total       IDT Energy   GOGAS         Corporate
Year Ended                                                     
December 31, 2012
Revenues               $ 229,459     $  229,459     $ -             $ -
Direct cost of          159,872       159,872    -           -      
revenues
Gross profit             69,587         69,587        -               -
Selling, general
and administrative       53,877         44,575        1,416           7,886
excluding
depreciation
Research and             9,365          -             9,365           -
development
Equity in net loss      3,175         -          3,175       -      
of AMSO, LLC
EBITDA                   3,170          25,012        (13,956 )       (7,886 )
Subtract:
Depreciation            123           40         82          1      
Income (loss) from     $ 3,047       $  24,972    $ (14,038 )   $ (7,887 )
operations
                                                             
                       Total         IDT Energy   GOGAS         Corporate
Year Ended
December 31, 2011
Revenues               $ 197,921     $  197,921     $ -             $ -
Direct cost of          141,223       141,223    -           -      
revenues
Gross profit             56,698         56,698        -               -
Selling, general
and administrative       40,405         37,047        1,223           2,135
excluding
depreciation
Research and             7,445          -             7,445           -
development
Equity in net loss      5,675         -          5,675       -      
of AMSO, LLC
EBITDA                   3,173          19,651        (14,343 )       (2,135 )
Subtract:
Depreciation            27            25         2           -      
Income (loss) from     $ 3,146       $  19,626    $ (14,345 )   $ (2,135 )
operations

Contact:

Genie Energy Investor Relations
Bill Ulrey,973-438-3848
invest@genie.com
 
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