SEC Filing | Just Energy Group Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2021

Commission File Number: 001-35400

JUST ENERGY GROUP INC.

(Translation of registrant’s name into English)

100 King Street West, Suite 2630

Toronto, Ontario M5X 1E1

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

DOCUMENTS INCLUDED AS PART OF THIS REPORT

Exhibit

99.1		Interim Condensed Consolidated Financial Statements (Unaudited) for the three months ended September 30, 2021 and 2020.

99.2		Management’s Discussion and Analysis for the three months ended September 30, 2021.

SIGNATURES

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

		JUST ENERGY GROUP INC.
		(Registrant)

Dated: November 10, 2021	By:	/s/ Michael Carter
	Name:	Michael Carter
	Title:	Chief Financial Officer

JUST ENERGY GROUP INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited in thousands of Canadian dollars)


		As at		As at
		September 30, 2021		March 31, 2021
	Notes	(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents		$	199,952	$	215,989
Restricted cash			3,265		1,139
Trade and other receivables, net	4(a)		401,633		340,201
Gas in storage			26,005		2,993
Fair value of derivative financial assets	6		461,899		25,026
Income taxes recoverable			10,626		8,238
Other current assets	5(a)		155,855		163,405
			1,259,235		756,991
Non-current assets
Investments	16(a)		61,889		32,889
Property and equipment, net			15,732		17,827
Intangible assets, net			68,026		70,723
Goodwill			163,945		163,770
Fair value of derivative financial assets	6		115,606		10,600
Deferred income tax assets			7,599		3,744
Other non-current assets	5(b)		41,506		35,262
			474,303		334,815
TOTAL ASSETS		$	1,733,538	$	1,091,806

LIABILITIES
Current liabilities
Trade and other payables	7	$	1,024,383	$	921,595
Deferred revenue			9,373		1,408
Income taxes payable			3,637		4,126
Fair value of derivative financial liabilities	6		17,695		13,977
Provisions			835		6,786
Current portion of long-term debt	8		630,491		654,180
			1,686,414		1,602,072
Non-current liabilities
Long-term debt	8		358		1,560
Fair value of derivative financial liabilities	6		13,262		61,169
Deferred income tax liabilities			6,773		2,749
Other non-current liabilities			14,155		19,078
			34,548		84,556
TOTAL LIABILITIES		$	1,720,962	$	1,686,628
SHAREHOLDERS’ EQUITY (DEFICIT)
Shareholders’ capital	11	$	1,537,863	$	1,537,863
Contributed deficit			(10,607)		(11,634)
Accumulated deficit			(1,610,320)		(2,211,728)
Accumulated other comprehensive income			96,030		91,069
Non-controlling interest			(390)		(392)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)			12,576		(594,822)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)		$	1,733,538	$	1,091,806

Basis of presentation (Note 3)

Commitments and contingencies (Note 15)

See accompanying notes to the Interim Condensed Consolidated Financial Statements


Scott Gahn		Stephen Schaefer
Chief Executive Officer and President		Corporate Director

JUST ENERGY GROUP INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)


		Three months ended September 30,				Six months ended September 30,
	Notes	2021		2020		2021		2020
CONTINUING OPERATIONS
Sales	9	$	704,769	$	737,994	$	1,313,441	$	1,423,958
Cost of goods sold			623,298		517,283		1,151,660		934,110
GROSS MARGIN			81,471		220,711		161,781		489,848
INCOMES (EXPENSES)
Administrative			(37,181)		(43,957)		(66,951)		(82,099)
Selling and marketing			(44,787)		(47,912)		(84,459)		(94,871)
Other operating expenses	12(a)		(8,819)		(20,765)		(21,293)		(40,676)
Finance costs	8		(11,895)		(29,744)		(24,808)		(51,597)
Reorganization costs	13		(18,577)		–		(38,586)		–
Restructuring costs			–		(7,118)		–		(7,118)
Gain on September 2020 Recapitalization transaction, net			–		52,152		–		50,341
Unrealized gain (loss) of derivative instruments and other	6		287,515		(84,968)		579,652		(7,619)
Realized gain (loss) of derivative instruments			49,134		(85,457)		66,346		(219,903)
Unrealized gain on investment	16(a)		29,000		–		29,000		–
Other expenses, net			(57)		(2,425)		(546)		(3,057)
Profit (loss) from continuing operations before income taxes			325,804		(49,483)		600,136		33,249
Provision (recovery) for income taxes	10		(245)		673		(1,212)		1,307
PROFIT (LOSS) FROM CONTINUING OPERATIONS		$	326,049	$	(50,156)	$	601,348	$	31,942
DISCONTINUED OPERATIONS
Loss after tax from discontinued operations			–		(1,210)		–		(4,158)
PROFIT (LOSS) FOR THE PERIOD		$	326,049	$	(51,366)	$	601,348	$	27,784
Attributable to:
Shareholders of Just Energy		$	326,046	$	(51,250)	$	601,408	$	27,897
Non-controlling interest			3		(116)		(60)		(113)
PROFIT (LOSS) FOR THE PERIOD		$	326,049	$	(51,366)	$	601,348	$	27,784

Earnings per share from continuing operations	14
Basic		$	6.78	$	(4.37)	$	12.51	$	2.99
Diluted		$	6.66	$	(4.37)	$	12.29	$	2.97
Loss per share from discontinued operations
Basic		$	–	$	(0.10)	$	–	$	(0.39)
Diluted		$	–	$	(0.10)	$	–	$	(0.39)
Earnings per share available to shareholders	14
Basic		$	6.78	$	(4.47)	$	12.51	$	2.60
Diluted		$	6.66	$	(4.47)	$	12.29	$	2.58

See accompanying notes to the Interim Condensed Consolidated Financial Statements

JUST ENERGY GROUP INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited in thousands of Canadian dollars)


	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020

PROFIT (LOSS) FOR THE PERIOD	$	326,049	$	(51,366)	$	601,348	$	27,784
Other comprehensive profit (loss) to be reclassified to profit or loss in subsequent periods:
Unrealized gain (loss) on translation of foreign operations		(2,351)		(349)		4,961		794
Unrealized gain on translation of foreign operations from discontinued operations		–		363		–		789
Gain on translation of foreign operations disposed and reclassified to Interim Condensed Consolidated Statements of Income (Loss)		–		–		–		833
		(2,351)		14		4,961		2,416
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD, NET OF TAX	$	323,698	$	(51,352)	$	606,309	$	30,200

Total comprehensive income (loss) attributable to:
Shareholders of Just Energy	$	323,695	$	(51,236)	$	606,369	$	30,313
Non-controlling interest		3		(116)		(60)		(113)
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD, NET OF TAX	$	323,698	$	(51,352)	$	606,309	$	30,200

See accompanying notes to the Interim Condensed Consolidated Financial Statements

JUST ENERGY GROUP INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS’ DEFICIT

(unaudited in thousands of Canadian dollars)


		Six months ended September 30,
		2021		2020
ATTRIBUTABLE TO THE SHAREHOLDERS
Accumulated earnings
Accumulated earnings (loss), beginning of period		$	(261,702)	$	140,446
Profit for the period as reported, attributable to shareholders			601,408		27,897
Accumulated earnings, end of period		$	339,706	$	168,343

DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions, beginning of period			(1,950,026)		(1,950,003)
Dividends and distributions declared and paid			–		(23)
Dividends and distributions, end of period		$	(1,950,026)	$	(1,950,026)
ACCUMULATED DEFICIT		$	(1,610,320)	$	(1,781,683)

ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income, beginning of period		$	91,069	$	84,651
Other comprehensive income			4,961		2,416
Accumulated other comprehensive income, end of period		$	96,030	$	87,067

SHAREHOLDERS’ CAPITAL
Common shares
Common shares, beginning of period	11	$	1,537,863	$	1,099,864
Issuance of shares-September 2020 Recapitalization			–		438,642
Issuance cost associated with September 2020 Recapitalization			–		(1,572)
Share-based units exercised			–		176
Common shares, end of period		$	1,537,863	$	1,537,110

Preferred shares
Preferred shares, beginning of period	11	$	–	$	146,965
Settled with common shares			–		(146,965)
Preferred shares, end of period		$	–	$	–
SHAREHOLDERS’ CAPITAL		$	1,537,863	$	1,537,110

EQUITY COMPONENT OF CONVERTIBLE DEBENTURES
Balance, beginning of period		$	–	$	13,029
Settled with common share			–		(13,029)
Balance, end of period		$	–	$	–

CONTRIBUTED DEFICIT
Balance, beginning of period		$	(11,634)	$	(29,826)
Add: Share-based compensation expense	12(a)		1,027		4,122
Transferred from equity component			–		13,029
Less: Share-based units exercised			–		(176)
Non-cash deferred share grants			–		23
Balance, end of period		$	(10,607)	$	(12,828)

NON-CONTROLLING INTEREST
Balance, beginning of period		$	(392)	$	(414)
Foreign exchange impact on non-controlling interest			62		112
Loss attributable to non-controlling interest			(60)		(113)
Balance, end of period		$	(390)	$	(415)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)		$	12,576	$	(170,749)

See accompanying notes to the Interim Condensed Consolidated Financial Statements

JUST ENERGY GROUP INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited in thousands of Canadian dollars)


		Six months ended September 30,
	Notes	2021		2020
Net inflow (outflow) of cash related to the following activities
OPERATING
Profit from continuing operations before income taxes		$	600,136	$	33,249
Loss from discontinued operations before income taxes			–		(4,158)
Profit before income taxes			600,136		29,091

Items not affecting cash
Amortization and depreciation	12(a)		9,239		13,071
Share-based compensation expense	12(a)		1,027		4,122
Financing charges, non-cash portion			4,316		16,576
Unrealized (gain) loss in fair value of derivative instruments and other	6		(579,652)		7,619
Gain from September 2020 Recapitalization transaction			–		(76,972)
Unrealized gain on investment	16(a)		(29,000)		–
Net change in working capital balances			9,466		36,123
Liabilities subject to compromise			9,020		–
Adjustment for discontinued operations, net			–		931
Income taxes paid			(2,176)		(7,763)
Cash inflow from operating activities			22,376		22,798

INVESTING
Purchase of property and equipment			(383)		(44)
Purchase of intangible assets			(4,454)		(4,629)
Cash outflow from investing activities			(4,837)		(4,673)

FINANCING
Proceeds from DIP Facility	8		31,425		–
Repayment of long-term debt	8		(1,585)		(3,252)
Leased asset payments			(1,361)		(2,085)
Debt issuance costs			–		(6,625)
Share swap payout			–		(21,488)
Credit facilities payments	8		(63,261)		(30,093)
Proceeds from issuance of common stock, net			–		100,969
Cash inflow (outflow) from financing activities			(34,782)		37,426

Effect of foreign currency translation on cash balances			1,206		(3,679)

Net cash inflow (outflow)			(16,037)		51,872
Cash and cash equivalents, beginning of period			215,989		26,093
Cash and cash equivalents, end of period		$	199,952	$	77,965

Supplemental cash flow information:
Interest paid		$	20,492	$	43,880

See accompanying notes to the Interim Condensed Consolidated Financial Statements

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

1. ORGANIZATION

Just Energy Group Inc. (“Just Energy” or the “Company”) is a corporation established under the laws of Canada to hold securities of its directly or indirectly owned operating subsidiaries and affiliates. The registered office of Just Energy is First Canadian Place, 100 King Street West, Toronto, Ontario, Canada. The Interim Condensed Consolidated Financial Statements consist of Just Energy and its subsidiaries and affiliates. The Interim Condensed Consolidated Financial Statements were approved by the Board of Directors on November 9, 2021.

In February 2021, the State of Texas experienced extremely cold weather (the “Weather Event”). The Weather Event led to increased electricity demand and sustained high prices from February 13, 2021 through February 20, 2021. As a result of the losses sustained and without sufficient liquidity to pay the corresponding invoices from the Electric Reliability Council of Texas, Inc. (“ERCOT”) when due, and accordingly, on March 9, 2021, Just Energy applied for and received creditor protection under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) from the Ontario Superior Court of Justice (Commercial List) (the “Ontario Court”) and under Chapter 15 (“Chapter 15”) of the Bankruptcy Code in the United States from the Bankruptcy Court of the Southern District of Texas, Houston Division (the “Court Orders” or “CCAA Proceedings”). Protection under the Court Orders allows Just Energy to operate while it restructures its capital structure.

As part of the CCAA filing, the Company entered into a USD $125 million Debtor-In-Possession (“DIP Facility”) financing with certain affiliates of Pacific Investment Management Company (“PIMCO”). The Company entered into Qualifying Support Agreements with its largest commodity supplier and ISO services provider. The Company entered a Lender Support Agreement with the lenders under its Credit Facility (refer to Note 8(c)). The filings and associated USD $125 million DIP Facility arranged by the Company, enabled Just Energy to continue all operations without interruption throughout the United States(“U.S.”) and Canada and to continue making payments required by ERCOT and satisfy other regulatory obligations.

On September 15, 2021, the stay period under the CCAA Proceedings was extended by the Ontario Court to December 17, 2021.

In connection with the CCAA Proceedings, the Company identified the following obligations that are subject to compromise:


	Amounts in 000's

Trade and other payables	$	551,076
Other non-current liabilities		9,815
Current portion of long-term debt		471,542
Total liabilities subject to compromise	$	1,032,433

On September 15, 2021, the Ontario Court approved the Company’s request to establish a claims process to identify and determine claims against the Company and its subsidiaries that are subject to the ongoing CCAA Proceedings. As a result of the establishment of the claims process, additional claims may be made against the Company and ultimately determined that are not currently reflected in the Interim Condensed Financial Statements.

The common shares of the Company are listed on the TSX Venture Exchange, under the symbol “JE” and on the OTC Pink Market under the symbol “JENGQ”.

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

On June 16, 2021, Texas House Bill 4492 (“HB 4492”) became law in Texas. HB 4492 provides a mechanism for recovery of (i) ancillary service charges above USD $9,000/MWh during the Weather Event; (ii) reliability deployment price adders charged by the ERCOT during the Weather Event; and (iii) amounts owed to ERCOT due to defaults of competitive market participants, which were subsequently “short–paid” to market participants, including Just Energy, (collectively, the “Costs”), incurred by various parties, including the Company, during the Weather Event, through certain securitization structures.

On July 16, 2021, ERCOT filed the request with the Public Utility Commission of Texas (the “Commission”) and on October 13, 2021, the Commission issued its final order (the “PUCT Order”). The ultimate amount of proceeds that Just Energy will receive has not been fully determined, as entities eligible to opt-out have until November 29, 2021 to decide pursuant to the PUCT Order. However, Just Energy anticipates that it will recover at least USD $100 million of Costs with such proceeds expected to be received in the fourth quarter of fiscal year 2022. The total amount that the Company may recover through the PUCT Order may change materially based on a number of factors, including the entities that decide to opt-out, the outcome of the dispute resolution process initiated by the Company with ERCOT, and any potential challenges to the PUCT Order. There is no assurance that the Company will be able to recover all of the Costs.

2. OPERATIONS

Just Energy is a retail energy provider specializing in electricity and natural gas commodities and bringing energy efficient solutions, carbon offsets and renewable energy options to customers. Operating in the U.S. and Canada, Just Energy serves both residential and commercial customers, providing homes and businesses with a broad range of energy solutions that deliver comfort, convenience and control. Just Energy is the parent company of Amigo Energy, Filter Group Inc. (“Filter Group”), Hudson Energy, Interactive Energy Group, Tara Energy and Terrapass.

Just Energy’s current commodity product offerings include fixed, variable, index and flat rate options. By fixing the price of electricity or natural gas under its fixed-price or price-protected program contracts for a period of up to five years, Just Energy’s customers offset their exposure to changes in the price of these essential commodities. Variable rate products allow customers to maintain flexibility while retaining the ability to lock into a fixed price at their discretion. Flat-bill products allow customers to pay a flat rate each month regardless of usage. Just Energy derives its gross margin from the difference between the price at which it is able to sell the commodities to its customers and the related price at which it purchases the associated volumes from its suppliers.

Just Energy offers green products through Terrapass and its JustGreen program. Green products offered through Terrapass allow customers to offset their carbon footprint without buying energy commodity products and can be offered in all states and provinces without being dependent on energy deregulation. The JustGreen electricity product offers customers the option of having all or a portion of their electricity sourced from renewable green sources such as wind, solar, hydropower or biomass, via power purchase agreements and renewable energy certificates. The JustGreen gas product offers carbon offset credits that allow customers to reduce or eliminate the carbon footprint of their homes or businesses. Through the Filter Group, Just Energy provides subscription-based home water filtration systems to residential customers, including under-counter and whole-home water filtration solutions. Just Energy markets its product offerings through multiple sales channels including digital, retail, door-to-door, brokers and affinity relationships.

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

3. FINANCIAL STATEMENT PRESENTATION

(a) Compliance with IFRS

These Interim Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”), utilizing the accounting policies Just Energy outlined in its March 31, 2021 annual audited consolidated financial statements, except the adoption of new International Financial Reporting Standards (“IFRS”). Accordingly, certain information and footnote disclosures normally included in the March 31, 2021 annual audited consolidated financial statements prepared in accordance with IFRS, as issued by the IASB, have been omitted or condensed.

(b) Basis of presentation and interim reporting

These Interim Condensed Consolidated Financial Statements should be read in conjunction with and follow the same accounting policies and methods of application as those used in the March 31, 2021 annual audited consolidated financial statements.

The comparative Interim Condensed Consolidated Financial Statements have been corrected from the interim statements previously presented to conform to the presentation of the current Interim Condensed Consolidated Financial Statements.

The Interim Condensed Consolidated Financial Statements are presented in Canadian dollars, the functional currency of Just Energy, and all values are rounded to the nearest thousands, except where otherwise indicated. The Interim Condensed Consolidated Financial Statements are prepared on a going concern basis under the historical cost convention, except for certain financial assets and liabilities that are stated at fair value.

The interim operating results are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2022, due to seasonal variations resulting in fluctuations in quarterly results. Gas consumption by customers is typically highest in October through March and lowest in April through September. Electricity consumption is typically highest in January through March and July through September and lowest in October through December and April through June.

Principles of consolidation

The Interim Condensed Consolidated Financial Statements include the accounts of Just Energy and its directly or indirectly owned subsidiaries and affiliates as at September 30, 2021. Subsidiaries and affiliates are consolidated from the date of acquisition and control and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries and affiliates are prepared for the same reporting period as Just Energy using consistent accounting policies. All intercompany balances, sales, expenses and unrealized gains and losses resulting from intercompany transactions are eliminated on consolidation.

Going Concern

Due to the Weather Event and associated CCAA filing, the Company’s ability to continue as a going concern for the next 12 months is dependent on the Company emerging from CCAA protection, maintain liquidity, complying with DIP Facility covenants and extending the DIP Facility maturity. The material uncertainties arising from the CCAA filings cast substantial doubt upon the Company's ability to continue as a going concern and, accordingly the ultimate appropriateness of the use of accounting principles applicable to a going concern. These Interim Condensed Consolidated Financial Statements do not reflect the adjustments

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

to carrying values of assets and liabilities and the reported expenses and Interim Condensed Consolidated Statements of Financial Position classifications that would be necessary if the going concern assumption was deemed inappropriate. These adjustments could be material. There can be no assurance that the Company will be successful in emerging from CCAA as a going concern.

(c) Significant accounting judgments, estimates, and assumptions

The preparation of the Interim Condensed Consolidated Financial Statements requires the use of estimates and assumptions to be made in applying the accounting policies that affect the reported amount of assets, liabilities, income and expenses. The estimates and related assumptions based on previous experience and other factors are considered reasonable under the circumstances, the results of which form the basis for making the assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. There have been no material changes from the disclosures from the March 31, 2021 annual audited consolidated financial statements and notes to the March 31, 2021 annual audited consolidated financial statements with respect to significant accounting judgments, estimates and assumptions.

4. TRADE AND OTHER RECEIVABLES, NET

(a) Trade and other receivables, net


	As at		As at
	September 30, 2021		March 31, 2021
Trade account receivables, net	$	192,502	$	189,250
Unbilled revenue, net		108,499		103,986
Accrued gas receivable		–		833
Other		100,632		46,132
	$	401,633	$	340,201

(b) Aging of accounts receivable

Customer credit risk

The lifetime expected credit loss (“ECL”) reflects Just Energy’s best estimate of losses on the accounts receivable and unbilled revenue balances. Just Energy determines the ECL by using historical loss rates and forward-looking factors, if applicable. Just Energy is exposed to customer credit risk on its continuing operations in Alberta, Texas, Illinois (gas), California (gas) and Ohio (electricity) and for certain Commercial customers in dual-billing markets including Illinois (power), Pennsylvania (power), Massachusetts (power), New York and New Jersey. Credit review processes have been implemented to perform credit evaluations of customers and manage customer default. If a significant number of customers were to default on their payments, it could have a material adverse effect on the operations and cash flows of Just Energy. Management factors default from credit risk in its margin expectations for all of the above markets.

In the remaining markets, the LDCs provide collection services and assume the risk of any bad debts owing from Just Energy’s customers for a fee that is recorded in cost of goods sold. Although there is no assurance that the LDCs providing these services will continue to do so in the future, management believes that the risk of the LDCs failing to deliver payment to Just Energy is minimal.

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

The aging of the trade accounts receivable from the markets where the Company bears customer credit risk was as follows:


	As at		As at
	September 30, 2021		March 31, 2021

Current	$	95,831	$	58,737
1–30 days		16,023		19,415
31–60 days		5,218		3,794
61–90 days		3,539		2,144
Over 90 days		9,300		10,446
	$	129,911	$	94,536

The unbilled revenue subject to customer credit risk is $96.6 million as at September 30, 2021 (March 31, 2021-$87.1 million).

(c) Allowance for doubtful accounts

Changes in the allowance for doubtful accounts related to the balances in the table above were as follows:


	As at		As at
	September 30, 2021		March 31, 2021

Balance, beginning of period	$	23,363	$	45,832
Provision for doubtful accounts		11,110		34,260
Bad debts written off		(19,110)		(62,529)
Foreign exchange		5,007		5,800
Balance, end of period	$	20,370	$	23,363

5. OTHER CURRENT AND NON-CURRENT ASSETS


		As at		As at
(a)	Other current assets	September 30, 2021		March 31, 2021
	Prepaid expenses and deposits	$	55,905	$	52,216
	Customer acquisition costs		42,120		45,681
	Green certificates assets		48,126		61,467
	Gas delivered in excess of consumption		8,001		650
	Inventory		1,703		3,391
		$	155,855	$	163,405


		As at		As at
(b)	Other non-current assets	September 30, 2021		March 31, 2021
	Customer acquisition costs	$	31,283	$	27,318
	Other long-term assets		10,223		7,944
		$	41,506	$	35,262

JUST ENERGY GROUP INC.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited in thousands of Canadian dollars, except where indicated and per share amounts)

6. FINANCIAL INSTRUMENTS

(a) Fair value of derivative financial instruments and other

The fair value of financial instruments 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 (i.e., an exit price). Management has estimated the value of financial swaps, physical forwards and option contracts for electricity, natural gas, carbon offsets and renewable energy certificates ("RECs"), and generation and transmission capacity contracts using a discounted cash flow method, which employs market forward curves that are either directly sourced from third parties or developed internally based on third-party market data. These curves can be volatile, thus leading to volatility in the mark to market with no immediate impact to cash flows. Gas options and green power options have been valued using the Black option pricing model using the applicable market forward curves and the implied volatility from other market traded options. Management periodically uses non-exchange-traded swap agreements based on cooling degree days (“CDDs”) and heating degree days (“HDDs”) measured in its utility service territories to reduce the impact of weather volatility on Just Energy’s electricity and natural gas volumes, commonly referred to as “weather derivatives”. The fair value of these swaps on a given measurement station indicated in the derivative contract is determined by calculating the difference between the agreed strike and expected variable observed at the same station.

The following table illustrates unrealized gains (losses) related to Just Energy’s derivative financial instruments classified as fair value through profit or loss and recorded on the Interim Condensed Consolidated Statements of Financial Position as fair value of derivative financial assets and fair value of derivative financial liabilities, with their offsetting values recorded in unrealized gain (loss) in fair value of derivative instruments and other on the Interim Condensed Consolidated Statements of Income.

Three months ended September 30,

Six months ended September 30,

2021

2020

2021

2020

Physical forward contracts and options (i)

133,822

(115,147)

359,128

(66,767)

Financial swap contracts and options (ii)

155,093

42,544

221,487

70,665

Foreign exchange forward contracts

597

(3,028)

1,702

(9,079)

Unrealized foreign exchange on Term Loan

(6,393)

–

(2,245)

–

Unrealized foreign exchange on the 6.5% convertible bond and 8.75% loan transferred to realized foreign exchange resulting from the September 2020 Recapitalization

–

(12,218)

–

Weather derivatives (iii)

(192)

1,769

(1,896)

(612)

Other derivative options