UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| Form |
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended |
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission file number:
ORMAT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
| | |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of November 1, 2023, the number of outstanding shares of common stock, par value $0.001 per share, was
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | |
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2023
| ITEM 1. |
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| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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| ITEM 3. |
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| ITEM 4. |
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| ITEM 1. |
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| ITEM 1A. |
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| ITEM 2. |
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| ITEM 3. |
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| ITEM 4. |
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| ITEM 6. |
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Certain Definitions
Unless the context otherwise requires, all references in this quarterly report to “Ormat”, “the Company”, “we”, “us”, “our company”, “Ormat Technologies” or “our” refer to Ormat Technologies, Inc. and its consolidated subsidiaries.
PART I - FINANCIAL INFORMATION
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, 2023 | December 31, 2022 | |||||||
| (Dollars in thousands) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash and cash equivalents (primarily related to VIEs) | ||||||||
| Receivables: | ||||||||
| Trade less allowance for credit losses of $ and $, respectively (primarily related to VIEs) | ||||||||
| Other | ||||||||
| Inventories | ||||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | ||||||||
| Prepaid expenses and other | ||||||||
| Total current assets | ||||||||
| Investment in unconsolidated companies | ||||||||
| Deposits and other | ||||||||
| Deferred income taxes | ||||||||
| Property, plant and equipment, net ($ and $ related to VIEs, respectively) | ||||||||
| Construction-in-process ($ and $ related to VIEs, respectively) | ||||||||
| Operating leases right of use ($ and $ related to VIEs, respectively) | ||||||||
| Finance leases right of use ($ and $ related to VIEs, respectively) | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Short term revolving credit lines with banks (full recourse) | ||||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | ||||||||
| Current portion of long-term debt: | ||||||||
| Limited and non-recourse (primarily related to VIEs) | ||||||||
| Full recourse | ||||||||
| Financing liability | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net of current portion: | ||||||||
| Limited and non-recourse (primarily related to VIEs and less deferred financing costs of $and $, respectively) | ||||||||
| Full recourse (less deferred financing costs of $ and $, respectively) | ||||||||
| Convertible senior notes (less deferred financing costs of $ and $, respectively) | ||||||||
| Financing liability | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | ||||||||
| Liability associated with sale of tax benefits | ||||||||
| Deferred income taxes | ||||||||
| Liability for unrecognized tax benefits | ||||||||
| Liabilities for severance pay | ||||||||
| Asset retirement obligation | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Redeemable noncontrolling interest | ||||||||
| Equity: | ||||||||
| The Company's stockholders' equity: | ||||||||
| Common stock, par value $ per share; shares authorized; and issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost ( shares held as of September 30, 2023 and December 31, 2022, respectively) | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Total stockholders' equity attributable to Company's stockholders | ||||||||
| Noncontrolling interest | ||||||||
| Total equity | ||||||||
| Total liabilities, redeemable noncontrolling interest and equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| (Dollars in thousands, except per share data) |
(Dollars in thousands, except per share data) |
|||||||||||||||
| Revenues: |
||||||||||||||||
| Electricity |
$ | $ | $ | $ | ||||||||||||
| Product |
||||||||||||||||
| Energy storage |
||||||||||||||||
| Total revenues |
||||||||||||||||
| Cost of revenues: |
||||||||||||||||
| Electricity |
||||||||||||||||
| Product |
||||||||||||||||
| Energy storage |
||||||||||||||||
| Total cost of revenues |
||||||||||||||||
| Gross profit |
||||||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development expenses |
||||||||||||||||
| Selling and marketing expenses |
||||||||||||||||
| General and administrative expenses |
||||||||||||||||
| Write-off of Energy Storage project assets and unsuccessful exploration activities |
||||||||||||||||
| Operating income |
||||||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
||||||||||||||||
| Interest expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Derivatives and foreign currency transaction gains (losses) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Income attributable to sale of tax benefits |
||||||||||||||||
| Other non-operating income (expense), net |
( |
) | ||||||||||||||
| Income from operations before income tax and equity in earnings of investees |
||||||||||||||||
| Income tax (provision) benefit |
( |
) | ( |
) | ||||||||||||
| Equity in losses (earnings) of investees |
( |
) | ( |
) | ( |
) | ||||||||||
| Net income |
||||||||||||||||
| Net income attributable to noncontrolling interest |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Net income attributable to the Company's stockholders |
$ | $ | $ | $ | ||||||||||||
| Comprehensive income: |
||||||||||||||||
| Net income |
||||||||||||||||
| Other comprehensive income (loss), net of related taxes: |
||||||||||||||||
| Change in foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge |
||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale |
( |
) | ||||||||||||||
| Other changes in comprehensive income |
||||||||||||||||
| Total other comprehensive income (loss), net of related taxes: |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Comprehensive income |
||||||||||||||||
| Comprehensive income attributable to noncontrolling interest |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Comprehensive income attributable to the Company's stockholders |
$ | $ | $ | $ | ||||||||||||
| Earnings per share attributable to the Company's stockholders: |
||||||||||||||||
| Basic: |
$ | $ | $ | $ | ||||||||||||
| Diluted: |
$ | $ | $ | $ | ||||||||||||
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: |
||||||||||||||||
| Basic |
||||||||||||||||
| Diluted |
||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
| The Company's Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||||||||||
| Common Stock | Paid-in | Treasury | Retained | Comprehensive | Noncontrolling | Total | ||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Stock | Earnings | Income (Loss) | Total | Interest | Equity | ||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | ||||||||||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | ||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation adjustments | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Other | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains (losses) in respect of investment in marketable securities | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||
| Balance as of the beginning of the period | $ | $ | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Purchase of capped call instruments | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | ||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Other | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Balance as of the beginning of the period | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | ||||||||||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | ||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at September 30, 2022 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Change in noncontrolling interest rights | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | ||||||||||||||||||||||||||||||||||||
| Change in foreign currency translation adjustments | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Other | — | |||||||||||||||||||||||||||||||||||
| Balance at March 31, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Balance as of the beginning of the period | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | ||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | |||||||||||||||||||||||||||||||||||
| Other | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Balance as of the beginning of the period | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | ||||||||||||||||||||||||||||||||||||
| Stock issuance costs reimbursement | — | |||||||||||||||||||||||||||||||||||
| Cash paid to noncontrolling interest | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Cash dividend declared, $ per share | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Transaction with noncontrolling interest | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of related taxes: | — | |||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge (net of related tax of ) | — | |||||||||||||||||||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
(*) Resulted in an amount lower than $1 thousand.
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2023 |
2022 |
|||||||
| (Dollars in thousands) |
||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
||||||||
| Accretion of asset retirement obligation |
||||||||
| Stock-based compensation |
||||||||
| Income attributable to sale of tax benefits, net of interest expense |
( |
) | ( |
) | ||||
| Equity in losses (earnings) of investees |
( |
) | ||||||
| Mark-to-market of derivative instruments |
||||||||
| Disposal of property, plant and equipment |
( |
) | ||||||
| Write-off of Energy Storage project assets and unsuccessful exploration activities |
||||||||
| Loss on severance pay fund asset |
||||||||
| Loss from prepayment of a long-term loan |
||||||||
| Deferred income tax provision |
( |
) | ||||||
| Liability for unrecognized tax benefits |
||||||||
| Other |
||||||||
| Changes in operating assets and liabilities, net of businesses acquired: |
||||||||
| Receivables |
( |
) | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
( |
) | ( |
) | ||||
| Inventories |
( |
) | ( |
) | ||||
| Prepaid expenses and other |
( |
) | ( |
) | ||||
| Change in operating lease right of use asset |
||||||||
| Deposits and other |
( |
) | ||||||
| Accounts payable and accrued expenses |
( |
) | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
||||||||
| Liabilities for severance pay |
( |
) | ( |
) | ||||
| Change in operating lease liabilities |
( |
) | ( |
) | ||||
| Other long-term liabilities |
( |
) | ||||||
| Net cash provided by operating activities |
||||||||
| Cash flows from investing activities: |
||||||||
| Purchase of marketable securities |
( |
) | ||||||
| Maturities of marketable securities |
||||||||
| Sale of marketable securities |
||||||||
| Capital expenditures |
( |
) | ( |
) | ||||
| Investment in unconsolidated companies |
( |
) | ( |
) | ||||
| Decrease (increase) in severance pay fund asset, net of payments made to retired employees |
||||||||
| Net cash used in investing activities |
( |
) | ( |
) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from long-term loans, net of transaction costs |
||||||||
| Proceeds from exercise of options by employees |
||||||||
| Proceeds from issuance of convertible notes, net of transaction costs |
||||||||
| Purchase of capped call instruments |
( |
) | ||||||
| Purchase of treasury stock |
( |
) | ||||||
| Prepayments of a long-term loan |
( |
) | ||||||
| Proceeds from revolving credit lines with banks |
||||||||
| Cash received from noncontrolling interest |
||||||||
| Repayments of long-term debt |
( |
) | ( |
) | ||||
| Proceeds from issuance of common stock, net of related costs |
||||||||
| Cash paid to noncontrolling interest |
( |
) | ( |
) | ||||
| Payments under finance lease obligations |
( |
) | ( |
) | ||||
| Deferred debt issuance costs |
( |
) | ( |
) | ||||
| Cash dividends paid |
( |
) | ( |
) | ||||
| Net cash provided by financing activities |
||||||||
| Effect of exchange rate changes |
( |
) | ( |
) | ||||
| Net change in cash and cash equivalents and restricted cash and cash equivalents |
( |
) | ( |
) | ||||
| Cash and cash equivalents and restricted cash and cash equivalents at beginning of period |
||||||||
| Cash and cash equivalents and restricted cash and cash equivalents at end of period |
$ | $ | ||||||
| Supplemental non-cash investing and financing activities: |
||||||||
| Change in accounts payable related to purchases of property, plant and equipment |
$ | $ | ||||||
| Right of use assets obtained in exchange for new lease liabilities |
$ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 — GENERAL AND BASIS OF PRESENTATION
These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position as of September 30, 2023, the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 and the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for the nine months ended September 30, 2023 and 2022.
The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results for the periods presented are not necessarily indicative of the results to be expected for the year.
These condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2022 but does not include all disclosures required by U.S. GAAP.
Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000.
Hapoalim Bank Loan
On February 27, 2023, the Company entered into a definitive loan agreement (the "BHI Loan Agreement") with Bank Hapoalim B.M. (“Hapoalim Bank”). The BHI Loan Agreement provides for a loan by Hapoalim Bank to the Company in an aggregate principal amount of $
Equity Offering
On March 14, 2023, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC, as the sole underwriter (the “Underwriter”), in connection with a public offering, pursuant to which the Company agreed to issue and sell
Loans Repayments
On April 4, 2023, the Company voluntarily fully prepaid the Plumstriker Loan in the amount of $
ORPD Transaction
On July 11, 2023, ORPD LLC ("ORPD"), a subsidiary of the Company in which Northleaf Geothermal Holdings, LLC ("Northleaf") and the Company hold
Kenya Finance Act 2023
As described under Note 10 to the condensed consolidated financial statements, on June 26, 2023, the President of Kenya signed into law the 2023 Finance Act ("Finance Act"). On June 30, 2023, the Kenyan High Court issued a Temporary Conservatory Order against the Finance Act which barred the implementation of the Finance Act until a decision was made by the High Court. On July 28, 2023, the Kenya appeals court lifted the Temporary Conservatory Order on the Finance Act which resulted in the Finance Act being implemented as signed. The Company applied the applicable changes in the Finance Act in its third quarter condensed consolidated financial statements. The impact resulting from the reduction of the statutory corporate income tax rate for Branches from
Write-offs of Energy Storage project assets and unsuccessful exploration activities
During the three and nine months ended September 30, 2023, the Company wrote off accumulated costs of million, and million, respectively. During the three and nine months ended September 30, 2022, the Company wrote off accumulated costs of million, and million, respectively. These costs are related to energy storage projects and unsuccessful exploration activities that the Company decided to no longer pursue.
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents
The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as reported on the balance sheet to the total of the same amounts shown on the statement of cash flows:
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Dollars in thousands) | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash and cash equivalents | ||||||||
| Total Cash and cash equivalents and restricted cash and cash equivalents | $ | $ | ||||||
Concentration of credit risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash investments and accounts receivable.
The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At September 30, 2023 and December 31, 2022, the Company had deposits totaling $
At September 30, 2023 and December 31, 2022, accounts receivable related to operations in foreign countries amounted to approximately $
The Company's revenues from its primary customers as a percentage of total revenues are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Southern California Public Power Authority (“SCPPA”) | % | % | % | % | ||||||||||||
| Sierra Pacific Power Company and Nevada Power Company | ||||||||||||||||
| Kenya Power and Lighting Co. Ltd. ("KPLC") | ||||||||||||||||
The Company has historically been able to collect on substantially all of its receivable balances. As of September 30, 2023, the amount overdue from KPLC in Kenya was $
In Honduras, as of September 30, 2023, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $
Allowance for credit losses
The Company performs an analysis of potential credit losses related to its financial instruments that are within the scope of ASU 2018-19, Codification Improvements to Topic 325, Financial Instruments – Credit Losses, primarily cash and cash equivalents, restricted cash and cash equivalents, investment in marketable securities, receivables (excluding those accounted under lease accounting) and costs and estimated earnings in excess of billings on uncompleted contracts, based on classes of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. The Company estimates the expected credit losses for each class of financing receivables by applying the related corporate default rate which corresponds to the credit rating of the specific customer or class of financing receivables. For trade receivables, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding. The Company has also considered the existence of credit enhancement arrangements that may mitigate the credit risk of its financial receivables in estimating the applicable corporate default rate.
The following table describes the changes in the allowance for expected credit losses for the three and nine months ended September 30, 2023 and 2022 (all related to trade receivables):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| Beginning balance of the allowance for expected credit losses | $ | $ | $ | $ | ||||||||||||
| Change in the provision for expected credit losses for the period | ||||||||||||||||
| Ending balance of the allowance for expected credit losses | $ | $ | $ | $ | ||||||||||||
Revenues from contracts with customers
Contract assets related to our Product segment reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities related to the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of September 30, 2023 and December 31, 2022 are as follows:
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Dollars in thousands) | ||||||||
| Contract assets (*) | $ | $ | ||||||
| Contract liabilities (*) | $ | ( | ) | $ | ( | ) | ||
(*) Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the condensed consolidated balance sheets. The contract liabilities balance at the beginning of the year was not yet fully recognized as product revenues during the nine months ended September 30, 2023 as a result of performance obligations having not been fully satisfied yet.
On September 30, 2023, the Company had approximately $
Disaggregated revenues from contracts with customers for the three and nine months ended September 30, 2023 and 2022 are disclosed under Note 8 - Business Segments, to the condensed consolidated financial statements.
Leases in which the Company is a lessor
The table below presents lease income recognized as a lessor:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| Lease income relating to lease payments from operating leases | $ | $ | $ | $ | ||||||||||||
Marketable securities
The Company’s investments in marketable securities consisted of debt securities with maturity of up to one year and a high credit rating. The investments in marketable securities were classified as available-for-sale ("AFS") and thus measured at fair value based on quoted market prices. Unrealized gains and losses from AFS debt securities were excluded from earnings and reported net of the related tax effect in "Accumulated other comprehensive income (loss)". Realized gains and losses from sale of marketable securities, as determined on a specific identification basis, as well as interest income earned, were included in earnings. The Company considers available evidence in evaluating potential impairments of its investments, including credit market conditions, credit ratings of the security as well as the extent to which fair value is less than amortized cost. The Company estimates the lifetime expected credit losses for all AFS debt securities in an unrealized loss position under its allowance for credit losses model. The Company assesses the security’s credit indicators, including credit ratings when estimating a security’s probability of default. If the assessment indicates that an expected credit loss exists, the Company determines the portion of the unrealized loss attributable to credit deterioration and records an allowance for the expected credit loss in earnings. Unrealized gains and losses attributable to non-credit factors were recorded in "Accumulated other comprehensive income (loss)", net of tax. Marketable debt securities with original maturities of three months or less that are readily convertible into a known amount of cash are presented under "Cash and cash equivalents" in the condensed consolidated balance sheets.
Derivative instruments
Derivative instruments (including certain derivative instruments embedded in other contracts) are measured at their fair value and recorded as either assets or liabilities unless exempted from derivative treatment as a normal purchase and sale. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings. Changes in the fair value of derivatives designated as cash flow hedging instruments are initially recorded in "Other comprehensive income (loss)" and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to earnings to offset the remeasurement of the underlying hedge transaction which also impacts the same line item in the consolidated statements of operations and comprehensive income.
The Company maintains a risk management strategy that may incorporate the use of swap contracts, put options, forward exchange contracts, interest rate swaps, and cross-currency swaps to minimize significant fluctuation in cash flows and/or earnings that are caused by oil and natural gas prices, exchange rate or interest rate volatility.
Transferable production and investment tax credits
The Inflation Reduction Act (“IRA”) was signed into law in August 2022 and introduces a transferability provision for certain tax credits related to the clean production of energy. Under this provision, a reporting entity can monetize such credits through sale to a third party. The option for transferability of credits applies to taxable years beginning after December 31, 2022. Several of the Company’s projects that are not currently part of a tax monetization transaction generate eligible tax credits, such as investment tax credits (“ITCs”) and production tax credits (“PTCs”), that are eligible to be transferred to a third-party under the provisions of the IRA. The Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the consolidated statement of operations and comprehensive income. PTC’s are accounted similarly to refundable or direct-pay credits outside of the tax line with income recognized in the “Income attributable to sale of tax benefits” line in the consolidated statement of operations and comprehensive income. Income recognized related to such transferable PTC’s during the three and nine months ended September 30, 2023 was $
NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS
New accounting pronouncements effective in the nine months ended September 30, 2023
Revenue Contracts Acquired in a Business Combination
In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"). ASU 2021-08 is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing the following topics: (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in ASU 2021-08 require that an entity that is the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 at the acquisition date as if it had originated the contracts. The amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted this guidance as prescribed, and the adoption of this update did not have a material impact on its condensed consolidated financial statements.
New accounting pronouncements effective in future periods
Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
In March 2023, the FASB issued ASU 2023-02 “Investments - Equity Method and Joint Ventures (Topic 323),” which permits reporting entities to elect to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The amendments in ASU 2023-02 are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments in this update should be applied on either a modified retrospective or a retrospective basis. The Company is still evaluating the potential impact of this guidance on its consolidated financial statements, however, it anticipates that the adoption of ASU 2023-02 will not have an impact on its condensed consolidated financial statements.
Accounting Standards Codification Amendments
In October 2023, the FASB issued ASU 2023-06 “Disclosure Improvements” to incorporate several SEC disclosure requirements into US GAAP. This ASU adds interim and annual disclosure requirements to a variety of topics in the Accounting Standards Codification, including accounting changes and error corrections, earnings per share, and debt. The amendments in this ASU should be applied prospectively and are effective when the removal of the related SEC rule from Regulation S-X or Regulation S-K is effective. Early adoption is not permitted. The Company is still evaluating the potential impact of this guidance on its consolidated financial statements, however, it anticipates that the adoption of ASU 2023-06 will not have an impact on its condensed consolidated financial statements.
NOTE 3 — INVENTORIES
Inventories consist of the following:
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Dollars in thousands) | ||||||||
| Raw materials and purchased parts for assembly | $ | $ | ||||||
| Self-manufactured assembly parts and finished products | ||||||||
| Total inventories | $ | $ | ||||||
NOTE 4— FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received upon selling an asset or paid upon transferring a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The following table sets forth certain fair value information at September 30, 2023 and December 31, 2022 for financial assets and liabilities measured at fair value by level within the fair value hierarchy, as well as cost or amortized cost. As required by the fair value measurement guidance, assets and liabilities are classified in their entirety based on the lowest level of inputs that is significant to the fair value measurement.
| September 30, 2023 | ||||||||||||||||||||
| Fair Value | ||||||||||||||||||||
| Carrying Value at September 30, 2023 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash equivalents (including restricted cash accounts) | $ | $ | $ | $ | $ | |||||||||||||||
| Marketable securities (1) | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Derivatives: | ||||||||||||||||||||
| Cross currency swap (2) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Currency forward contracts (3) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Long term liabilities: | ||||||||||||||||||||
| Cross currency swap (2) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| $ | $ | $ | $ | ( | ) | $ | ||||||||||||||
| December 31, 2022 | ||||||||||||||||||||
| Fair Value | ||||||||||||||||||||
| Carrying Value at December 31, 2022 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash equivalents (including restricted cash accounts) | $ | $ | $ | $ | $ | |||||||||||||||
| Marketable securities (1) | ||||||||||||||||||||
| Derivatives: | ||||||||||||||||||||
| Long-term assets: | ||||||||||||||||||||
| Cross currency swap (2) | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Derivatives: | ||||||||||||||||||||
| Currency forward contracts (3) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Cross currency swap (2) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| $ | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 1. | Presented under “Cash and cash equivalents” in the condensed consolidated balance sheets. |
| 2. | These amounts relate to cross currency swap contracts valued primarily based on the present value of the cross currency swap future settlement prices for U.S. Dollar (“USD”) and New Israeli Shekel (“NIS”) zero yield curves and the applicable exchange rate as of September 30, 2023 and December 31, 2022, as applicable. These amounts are included within “Prepaid expenses and other”, “Deposits and other”, "Accounts payable and accrued expenses", or “Other long-term liabilities”, as applicable, in the condensed consolidated balance sheets on September 30, 2023 and December 31, 2022. There are |
| 3. | These amounts relate to currency forward contracts valued primarily based on observable inputs, including forward and spot prices for currencies, net of contracted rates and then multiplied by notional amounts, and are included within “Receivables, other” or “Accounts payable and accrued expenses”, as applicable, in the condensed consolidated balance sheets on September 30, 2023 and December 31, 2022, with the corresponding gain or loss being recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income. |
The following table presents the amounts of gain (loss) recognized in the consolidated statements of operations and comprehensive income on derivative instruments (in thousands):
| Amount of recognized gain (loss) | Amount of recognized gain (loss) | |||||||||||||||||
| Derivatives not designated as hedging instruments | Location of recognized gain (loss) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||
| Currency forward contracts (1) | Derivative and foreign currency transaction gains (losses) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Derivatives designated as cash flow hedging instruments | ||||||||||||||||||
| Cross currency swap (2) | Derivative and foreign currency transaction gains (losses) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
(1) The foregoing currency forward transactions were not designated as hedge transactions and were marked to market with the corresponding gains or losses recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.
(2) The foregoing cross currency swap transactions were designated as a cash flow hedge as further described above and under Note 1 to the condensed consolidated financial statements. The changes in the cross currency swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to “Derivatives and foreign currency transaction gains (losses)” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income.
There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the nine months ended September 30, 2023 and 2022.
The following table presents the effect of derivative instruments designated as cash flow hedges on the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| Cross currency swap cash flow hedge: | ||||||||||||||||
| Balance in Accumulated other comprehensive income (loss) beginning of period | $ | $ | $ | $ | ||||||||||||
| Gain or (loss) recognized in Other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
| Amount reclassified from Other comprehensive income (loss) into earnings | ( | ) | ( | ) | ||||||||||||
| Balance in Accumulated other comprehensive income (loss) end of period | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
The estimated net amount of existing gain (loss) that is reported in "Accumulated other comprehensive income (loss)" as of September 30, 2023 that is expected to be reclassified into earnings within the next 12 months is immaterial. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flow is from the transaction commencement date through June 2031.
The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:
| Fair Value | Carrying Amount (*) | |||||||||||||||
| September 30, 2023 | December 31, 2022 | September 30, 2023 | December 31, 2022 | |||||||||||||
| (Dollars in millions) | (Dollars in millions) | |||||||||||||||
| Mizrahi Loan | $ | $ | $ | $ | ||||||||||||
| Convertible Senior Notes | ||||||||||||||||
| HSBC Loan | ||||||||||||||||
| Hapoalim Loan | ||||||||||||||||
| Hapoalim Loan 2023 | ||||||||||||||||
| Discount Loan | ||||||||||||||||
| Finance liability - Dixie Valley | ||||||||||||||||
| Olkaria III Loan - DFC | ||||||||||||||||
| Olkaria III plant 4 Loan - DEG 2 | ||||||||||||||||
| Olkaria III plant 1 Loan - DEG 3 | ||||||||||||||||
| Platanares Loan - DFC | ||||||||||||||||
| Amatitlan Loan | ||||||||||||||||
| OFC 2 LLC ("OFC 2") | ||||||||||||||||
| Don A. Campbell 1 ("DAC 1") | ||||||||||||||||
| USG Prudential - NV | ||||||||||||||||
| USG Prudential - ID | ||||||||||||||||
| USG DOE | ||||||||||||||||
| Senior Unsecured Bonds | ||||||||||||||||
| Senior Unsecured Loan | ||||||||||||||||
| Plumstriker | ||||||||||||||||
| Other long-term debt | ||||||||||||||||
(*) Carrying amount value excludes the related deferred financing costs.
The fair value of the long-term debt is determined by a valuation model, which is based on a conventional discounted cash flow methodology and utilizes assumptions of current borrowing rates, except for the fair value of the Convertible Senior Notes for which the fair value was estimated based on a quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period. A hypothetical change in the quoted bid price will result in a corresponding change in the estimated fair value of the Notes.
The carrying value of cash and cash equivalents, receivables, deposits and accounts payable (included in the condensed consolidated balance sheets) approximates their fair value.
The following table presents the fair value of financial instruments as of September 30, 2023:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| (Dollars in millions) | ||||||||||||||||
| Mizrahi Loan | $ | $ | $ | $ | ||||||||||||
| Convertible Senior Notes | ||||||||||||||||
| HSBC Loan | ||||||||||||||||
| Hapoalim Loan | ||||||||||||||||
| Hapoalim Loan 2023 | ||||||||||||||||
| Discount Loan | ||||||||||||||||
| Finance liability - Dixie Valley | ||||||||||||||||
| Olkaria III Loan - DFC | ||||||||||||||||
| Olkaria III plant 4 Loan - DEG 2 | ||||||||||||||||
| Olkaria III plant 1 Loan - DEG 3 | ||||||||||||||||
| Platanares Loan - DFC | ||||||||||||||||
| OFC 2 Senior Secured Notes | ||||||||||||||||
| DAC 1 Senior Secured Notes | ||||||||||||||||
| USG Prudential - NV | ||||||||||||||||
| USG Prudential - ID | ||||||||||||||||
| USG DOE | ||||||||||||||||
| Senior Unsecured Bonds | ||||||||||||||||
| Senior Unsecured Loan | ||||||||||||||||
| Other long-term debt | ||||||||||||||||
| Deposits | | |||||||||||||||
The following table presents the fair value of financial instruments as of December 31, 2022:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| (Dollars in millions) | ||||||||||||||||
| Mizrahi Loan | $ | $ | $ | $ | ||||||||||||
| Convertible Senior Notes | ||||||||||||||||
| HSBC Loan | ||||||||||||||||
| Hapoalim Loan | ||||||||||||||||
| Discount Loan | ||||||||||||||||
| Financing Liability - Dixie Valley | ||||||||||||||||
| Olkaria III Loan - DFC | ||||||||||||||||
| Olkaria IV - DEG 2 | ||||||||||||||||
| Olkaria IV - DEG 3 | ||||||||||||||||
| Platanares Loan - DFC | ||||||||||||||||
| Amatitlan Loan | ||||||||||||||||
| OFC 2 Senior Secured Notes | ||||||||||||||||
| DAC 1 Senior Secured Notes | ||||||||||||||||
| USG Prudential - NV | ||||||||||||||||
| USG Prudential - ID | ||||||||||||||||
| USG DOE | ||||||||||||||||
| Senior Unsecured Bonds | ||||||||||||||||
| Senior Unsecured Loan | ||||||||||||||||
| Plumstriker | ||||||||||||||||
| Other long-term debt | ||||||||||||||||
| Deposits | ||||||||||||||||
NOTE 5 — STOCK-BASED COMPENSATION
In March 2023, the Company granted certain members of its management and employees an aggregate of
The fair value of each RSU and PSU on the grant date was $
| Risk-free interest rates | - | |||||
| Expected life (in years) | - | |||||
| Dividend yield | ||||||
| Expected volatility (weighted average) | - |
In May 2023, the Company granted its directors and employees an aggregate of
The fair value of each RSU on the grant date was $
| Risk-free interest rates | % | |||
| Expected life (in years) | ||||
| Dividend yield | % | |||
| Expected volatility (weighted average) | % |
There were no other significant grants that were made by the Company during the nine months ended September 30, 2023.
NOTE 6 — INTEREST EXPENSE, NET
The components of interest expense are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| Interest related to sale of tax benefits | $ | $ | $ | $ | ||||||||||||
| Interest expense | ||||||||||||||||
| Less — amount capitalized | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total interest expense, net | $ | $ | $ | $ | ||||||||||||
NOTE 7 — EARNINGS PER SHARE
Basic earnings per share attributable to the Company’s stockholders is computed by dividing net income or loss attributable to the Company’s stockholders by the weighted average number of shares of common stock outstanding for the period. The Company does not have any equity instruments that are dilutive, except for employee stock-based awards and convertible senior notes ("Notes").
The table below shows the reconciliation of the number of shares used in the computation of basic and diluted earnings per share (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Weighted average number of shares used in computation of basic earnings per share: | ||||||||||||||||
| Additional shares from the assumed exercise of employee stock awards | ||||||||||||||||
| Weighted average number of shares used in computation of diluted earnings per share | ||||||||||||||||
The number of stock-based awards that could potentially dilute future earnings per share and that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive was
As per ASU 2020-06, the if-converted method is required for calculating any potential dilutive effect from convertible instruments. For the three and nine months ended September 30, 2023, the average price of the Company's common stock did not exceed the per share conversion price of the Notes of $
NOTE 8 — BUSINESS SEGMENTS
The Company has reporting segments: the Electricity segment, the Product segment and the Energy Storage segment. These segments are managed and reported separately as each offers different products and serves different markets.
| • | Under the Electricity segment, the Company builds, owns and operates geothermal, solar PV and recovered energy-based power plants ("REG") in the United States and geothermal power plants in foreign countries, and sell the electricity generated by those power plants. |
| • | Under the Product segment, the Company designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and provide services relating to the engineering, procurement and construction ("EPC") of geothermal and recovered energy-based power plants. |
| • | Under the Energy Storage segment, the Company provides energy storage and related services. |
Transfer prices between the operating segments are determined based on current market values or cost-plus markup of the seller’s business segment.
Summarized financial information concerning the Company’s reportable segments is shown in the following tables, including the Company's disaggregated revenues from contracts with customers:
| Electricity | Product | Energy Storage | Consolidated | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Three Months Ended September 30, 2023: | ||||||||||||||||
| Revenues from external customers: | ||||||||||||||||
| United States (1) | $ | $ | $ | $ | ||||||||||||
| Foreign (2) | ||||||||||||||||
| Net revenue from external customers | ||||||||||||||||
| Intersegment revenues (4) | ||||||||||||||||
| Operating income (loss) | ||||||||||||||||
| Segment assets at period end (3) (*) | ||||||||||||||||
| * Including unconsolidated investments | ||||||||||||||||
| Three Months Ended September 30, 2022: | ||||||||||||||||
| Revenues from external customers: | ||||||||||||||||
| United States (1) | $ | $ | $ | $ | ||||||||||||
| Foreign (2) | ||||||||||||||||
| Net revenue from external customers | ||||||||||||||||
| Intersegment revenues (4) | ||||||||||||||||
| Operating income (loss) | ( | ) | ||||||||||||||
| Segment assets at period end (3) (*) | ||||||||||||||||
| * Including unconsolidated investments | ||||||||||||||||
| Nine Months Ended September 30, 2023: | ||||||||||||||||
| Revenues from external customers: | ||||||||||||||||
| United States (1) | $ | $ | $ | $ | ||||||||||||
| Foreign (2) | ||||||||||||||||
| Net revenue from external customers | ||||||||||||||||
| Intersegment revenues (4) | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Segment assets at period end (3) (*) | ||||||||||||||||
| * Including unconsolidated investments | ||||||||||||||||
| Nine Months Ended September 30, 2022: | ||||||||||||||||
| Revenues from external customers: | ||||||||||||||||
| United States (1) | $ | $ | $ | $ | ||||||||||||
| Foreign (2) | ||||||||||||||||
| Net revenue from external customers | ||||||||||||||||
| Intersegment revenues (4) | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Segment assets at period end (3) (*) | ||||||||||||||||
| * Including unconsolidated investments | ||||||||||||||||
| (1) | Electricity segment revenues in the United States are all accounted under lease accounting except for $ |
| (2) | Electricity segment revenues in foreign countries are all accounted under lease accounting. Product segment revenues in foreign countries are accounted under ASC 606. |
| (3) | Electricity segment assets include goodwill in the amount of $ |
| (4) | Intersegment revenues are fully eliminated in consolidation. |
Reconciling information between reportable segments and the Company’s consolidated totals is shown in the following table:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
| Revenues: | ||||||||||||||||
| Total segment revenues | $ | $ | $ | $ | ||||||||||||
| Intersegment revenues | ||||||||||||||||
| Elimination of intersegment revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total consolidated revenues | $ | $ | $ | $ | ||||||||||||
| Operating income: | ||||||||||||||||
| Operating income | $ | $ | $ | $ | ||||||||||||
| Interest income | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Derivatives and foreign currency transaction gains (losses) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income attributable to sale of tax benefits | ||||||||||||||||
| Other non-operating income (expense), net | ( | ) | ||||||||||||||
| Total consolidated income before income taxes and equity in income of investees | $ | $ | $ | $ | ||||||||||||
NOTE 9 — COMMITMENTS AND CONTINGENCIES
| • | On December 15, 2021, the Center for Biological Diversity and the Fallon Paiute-Shoshone Tribe (the “Plaintiffs”) filed a lawsuit in the U.S. District Court for the State of Nevada against the U.S. Department of the Interior, the Bureau of Land Management (“the BLM”) and Jake Vialpando, in his official capacity as a field manager of the BLM, alleging that the defendants violated the National Environmental Protection Act and other federal laws by approving the Company’s Dixie Meadows project and the associated environmental assessment and Finding of No Significant Impact (“FONSI”). Plaintiffs additionally alleged that the project threatens the Dixie Valley Toad and infringes on the tribe’s enjoyment of a religious sacred site. Plaintiffs sought for the court to vacate and set aside the environmental assessment, FONSI and the BLM’s authorizations for the project and to enjoin project construction. The Company intervened in the action on January 4, 2022. On January 14, 2022, the court granted a temporary, 90-day injunction pausing construction of the project while it ruled on the merits of the case. The Ninth Circuit subsequently set aside the temporary injunction, pending a hearing on June 15, 2022, and construction began in February 2022. On August 1, 2022 the Ninth Circuit issued an order in the Company’s favor, affirming the District Court’s ruling that an injunction after 90-days was not warranted. On April 4, 2022, the U.S. Fish and Wildlife Services (“FWS”) emergency listed the Dixie Valley Toad under the Endangered Species Act of 1973 (the “ESA”). On July 6, 2022, Plaintiffs amended their complaint to add causes of action related to the ESA listing against the Company. The Company is currently working with the BLM and FWS in the Section 7 Consultation process including discussion and identification of potential additional mitigation measures, and has agreed to temporarily pause construction of the facility. The Company requested that the BLM amend the Decision Record to limit the scope of the project to the first planned phase of development, a single power plant of approximately 12 MW and the BLM granted that request. The Company further requested that the court stay the litigation until the Section 7 Consultation process was complete, and the court granted the motion to stay on February 14, 2023. In July 2023, the Company determined that it would conduct a supplemental NEPA review with BLM, which will run simultaneously with Section 7 Consultation, during which time the litigation remains stayed. On September 18, 2023, the court issued an Order administratively closing the case without prejudice to reopening upon a motion by either party. The Company believes it has strong legal defenses against the present claims; however, there can be no assurances regarding the resolution of these proceedings. Any additional construction delays imposed by the court, any mitigation or other measures arising from the Dixie Valley Toad’s emergency listing or any combination thereof could cause the Company to incur additional project costs, delay or impede the completion of the project and thus the eventual generation of revenues from the project and/or result in the renegotiation of the PPA for the project on less favorable terms. As a result, at this time, the Company cannot reasonably predict the ultimate outcome of this litigation or regulatory process or estimate the possible loss or range of loss it may bear, if any. As of September 30, 2023, the aggregated net book value of the Dixie Meadows project was approximately $ |
In addition, from time to time, the Company is named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company's business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will not be material to the Company’s consolidated financial statements as a whole.
Other matters
On March 2, 2021, the Company's Board of Directors established a special committee of independent directors (the "Special Committee") to investigate, among other things, certain claims made in a report published by a short seller regarding the Company’s compliance with anti-corruption laws. The Special Committee is working with outside legal counsel to investigate the claims made. All members of the Special Committee are “independent” in accordance with the Company's Corporate Governance Guidelines, the NYSE listing standards and SEC rules applicable to boards of directors in general. The Company is also providing information as requested by the SEC and Department of Justice ("DOJ") related to the claims.
In Kenya, since 2021, various task forces have been appointed by the President and/or the Senate to review and analyze PPAs entered into between KPLC and various independent power producers (including our long-term PPA for the Olkaria complex), with the recommendation that KPLC review its contracts and attempt renegotiation with these independent power producers to reduce PPA tariffs within existing contractual arrangements. The Company has been approached by certain of these task forces and has participated in requested discussions with them, which remain ongoing.
NOTE 10 — INCOME TAXES
The Company’s effective tax rate provision for the three months ended September 30, 2023 and 2022 was
On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law in the United States. The Company believes that the construction and operations of its geothermal power plants, recovered energy-based power plants, battery energy storage systems and solar PV will benefit in the future from the IRA and enhance the economic feasibility of projects in the United States. PTC’s can be generated from 2.75 cents per kWh, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 3.30 cents per kWh. ITC’s can be earned on investments from 30.0%, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 50.0%. Battery Energy Storage Systems are eligible for ITC for projects placed-in-service after December 31, 2022. In addition, the Company can now monetize PTC’s and ITC’s earned by transferring the credits to a third party without having to enter into a tax equity transaction. The Company views the enactment of the IRA as favorable for the overall business climate for its sector.
On June 26, 2023, the President of Kenya signed into law the 2023 Finance Act ("Finance Act"). On June 30, 2023, the Kenyan High Court issued a Temporary Conservatory Order against the Finance Act which barred the implementation of the Finance Act until a decision was made by the High Court. The Finance Act, among several other changes, reduces the statutory corporate income tax rate for Branches from
NOTE 11 — SUBSEQUENT EVENTS
Cash Dividend
On November 8, 2023, the Board of Directors of the Company declared, approved and authorized payment of a quarterly dividend of $
North Valley Tax Equity Transaction
On October 27, 2023, one of the Company’s wholly-owned subsidiaries that indirectly owns the North Valley Geothermal power plant entered into a partnership agreement with a private investor. Under the transaction documents, the private investor acquired membership interests in the North Valley Geothermal power plant project for an initial purchase price of approximately $
Under the transaction documents, prior to December 31, 2032 (“Target Flip Date”), the Company’s wholly-owned subsidiary, Ormat Nevada Inc. ("Ormat Nevada"), receives substantially all of the distributable cash flow generated by the project, while the private investor receives substantially all of the tax attributes of the project. Following the later of the Target Flip Date and the date on which the private investor reaches its target return, Ormat Nevada will receive
On the Target Flip Date, Ormat Nevada has the option to purchase the private investor’s interests at the then-current fair market value, plus an amount that causes the private investor to reach its target return, if needed. If Ormat Nevada exercises this purchase option, it will become the sole owner of the project again.
Geothermal and Solar Assets Purchase Transaction
On October 23, 2023, the Company entered into a purchase agreement with Enel Green Power North America ("EGPNA"), a subsidiary of Enel SpA (ENEL.MI) to acquire a portfolio of assets which includes two contracted geothermal power plants, one triple hybrid power plant which consists of geothermal, solar PV and solar thermal units, two stand alone solar power plants, and two greenfield development assets, for total proceeds of $
The geothermal power plants include the Cove Fort power plant located in Beaver County, Utah, which sells electricity under a long-term power purchase agreement with Salt River Project and the Salt Wells power plant located in Churchill County, Nevada, which sells electricity under a long-term power purchase agreement with NV Energy. The Stillwater triple hybrid geothermal, solar PV and solar thermal power plant is located in Churchill County, Nevada, and sells electricity to NV Energy under a power purchase agreement. The Solar assets of Stillwater Solar PV II in Churchill County, Nevada, and Woods Hill in Windham County, Connecticut, sell their electricity under power purchase agreements, respectively.
The Company will account for the transaction under ASC 805, Business Combinations and is currently evaluating the accounting related to the transaction. The Company expects to consolidate the acquired assets in its consolidated financial statements starting at the acquisition date.
Short-term Commercial Paper
On October 19, 2023, the Company entered into a framework agreement for participation in the issuance of commercial paper (the "Agreement") with Barak Capital Underwriting Ltd. under which the Company allowed the participants to submit proposals for purchasing and to purchase the Company's commercial paper ("Commercial Paper") in accordance with the provisions of the Agreement. On October 23, 2023, the Company completed the issuance of the Commercial Paper in the aggregate amount of $
War in Israel
On October 7, 2023, Hamas terrorists and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, including widespread killings and kidnappings. They also launched extensive rocket attacks on the Israeli civilian population. Shortly following the attack, Israel declared war against Hamas. The Israeli military called up reservists for active duty, including approximately
As of the approval date of these condensed consolidated financial statements, none of the Company's facilities or infrastructure have been damaged nor have its supply chains been significantly impacted since the war broke out. However, a prolonged war could result in further military reserve duty call-ups as well as irregularities to the Company's supply chain and to its ability to ship its products from Israel, which could disrupt the operations of the Company's Product segment and potentially delay some of its growth plans in the Electricity segment. Management will continue to monitor the effect of the war on the Company's financial position and results of operations.
Mizrahi 2023 Loan
On November 1, 2023, the Company entered into a definitive loan agreement (the "Mizrahi 2023 Loan Agreement") with Mizrahi Tefahot Bank Ltd. (“Mizrahi Bank”). The Mizrahi 2023 Loan Agreement provides for a loan by Mizrahi Bank to the Company in an aggregate principal amount of $
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this quarterly report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this quarterly report on Form 10-Q, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this quarterly report are primarily located in the material set forth under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors”, and “Notes to Condensed Consolidated Financial Statements”, but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this quarterly report on Form 10-Q completely and with the understanding that actual future results and developments may be materially different from what we expect attributable to a number of risks and uncertainties, many of which are beyond our control.
These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
A summary of the risks that may cause actual results to differ from our expectations include, but are not limited to the following:
Risks Related to the Company’s Business and Operation
| • | Our financial performance depends on the successful operation of our geothermal, REG, Solar PV power plants under the Electricity segment as well as our energy storage facilities, which are subject to various operational risks. |
| • | Our exploration, development, and operation of geothermal energy resources are subject to geological risks and uncertainties, which may result in decreased performance or increased costs for our power plants. |
| • | We may decide not to implement, or may not be successful in implementing, one or more elements of our multi-year strategic plan, and the plan may not achieve its goal of enhancing shareholder value. |
| • | Our investments in battery energy storage system (BESS) technology involves new technologies with relatively limited history with respect to reliability and performance and may not perform as expected. In addition, our investments may be negatively affected by a number of factors, including increases in storage costs, risk of fire and volatility in electricity pricing. |
| • | Concentration of customers, specific projects and regions may expose us to heightened financial exposure. |
| • | Our international operations expose us to risks related to the application of foreign laws and regulations. |
| • | Political, economic and other conditions in the emerging economies where we operate, including Israel, may subject us to greater risk than in the developed U.S. economy. |
| • | Conditions in and around Israel, where the majority of our senior management and our main production and manufacturing facilities are located, including the ongoing war with Hamas, may adversely affect our operations and may limit our ability to produce and sell our products. |
| • |
Responses in various countries where we have business operations to Israel’s ongoing war with Hamas or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products. |
| • | Reduction in our Products segment backlog may affect our ability to fully utilize our main production and manufacturing facilities. |
| • | Some of our leases will terminate if we do not extract geothermal resources in “commercial quantities” or if we fail to comply with the terms or stipulations of such leases or any of the provisions of the Geothermal Steam Act or if the lessor under any such lease defaults on any debt secured by the relevant property, thus requiring us to enter into new leases or secure rights to alternate geothermal resources, none of which may be available on terms as favorable to us as any such terminated lease, if at all. |
| • | Reduced levels of recovered energy required for the operation of our REG power plants may result in decreased performance of such power plants. |
| • | Our business development activities may not be successful and our projects under construction or facilities undergoing enhancement and repowering may encounter delays. |
| • | Our future growth depends, in part, on the successful enhancement of a number of our existing facilities. |
| • | We rely on power transmission facilities that we do not own or control. |
| • | Our use of joint ventures may limit our flexibility with jointly owned investments. |
| • | Our operations could be adversely impacted by climate change. |
| • | We could be negatively impacted by regulatory and other responses to climate change. |
| • | Geothermal projects that we plan to develop in the future may operate as "merchant" facilities without long-term PPAs and therefore such projects will be exposed to market fluctuations. |
| • | We may not be able to successfully complete acquisitions, and we may not be able to successfully integrate, or realize anticipated synergies from, companies that we have acquired and may acquire in the future. |
| • | We may not be able to successfully conclude transactions and integrate companies, which we acquired and may acquire in the future. |
| • | We encounter intense competition from electric utilities, other power producers, power marketers, developers and third-party investors. |
| • | Changes in costs and technology may significantly impact our business by making our power plants and products less competitive, resulting in our inability to sign new or recontracted PPAs for our Electricity segment and new supply and EPC contracts for our Products segment. |
| • | Our intellectual property rights may not be adequate to protect our business. |
| • | We may experience difficulties implementing and maintaining our new enterprise resource planning system. |
| • | We may experience a cyber-incident, cyber security breach, severe natural event or physical attack on our operational networks and information technology systems. |
Risks Related to Governmental Regulations, Laws and Taxation
| • | Our financial performance could be adversely affected by changes in the legal and regulatory environment affecting our operations. |
| • | Pursuant to the terms of some of our PPAs with investor-owned electric utilities and publicly-owned electric utilities in states that have renewable portfolio standards, the failure to supply the contracted capacity and energy thereunder may result in the imposition of penalties. |
| • | If any of our domestic power plants loses its current Qualifying Facility status under PURPA, or if amendments to PURPA are enacted that substantially reduce the benefits currently afforded to Qualifying Facilities, our domestic operations could be adversely affected. |
| • | We may experience a reduction or elimination of government incentives. |
| • | We are a holding company and our cash depends substantially on the performance of our subsidiaries and the power plants they operate, most of which are subject to restrictions and taxation on dividends and distributions. |
| • | The costs of compliance with federal, state, local and foreign environmental laws and our ability to obtain and maintain environmental permits and governmental approvals required for development, construction and/or operation may result in liabilities, costs and delays in construction (as well as any fines or penalties that may be imposed upon us in the event of any non-compliance or delays with such laws or regulations). |
| • | We could be exposed to significant liability for violations of hazardous substances laws because of the use or presence of such substances at our power plants. |
| • | U.S. federal, state and foreign country income tax reform could adversely affect us. |
Risks Related to Economic and Financial Conditions
| • | We may be unable to obtain the financing we need on favorable terms to pursue our growth strategy and any future financing we receive may be less favorable to us than our current financing arrangements. |
| • | We have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur substantially more debt, which may adversely affect our operations and financial results. |
| • | Our debt obligations may adversely affect our ability to raise additional capital and will be a burden on our future cash resources, particularly if we elect to settle these obligations in cash upon conversion or upon maturity or required repurchase. |
| • | The capped call transactions, into which we entered in connection with the issuance of June 2022 convertible notes, may affect the value of the Notes and our common stock and we are subject to counterparty risk with respect to the capped call transactions. |
| • | Our foreign power plants and foreign manufacturing operations expose us to risks related to fluctuations in currency rates, which may reduce our profits from such power plants and operations. |
| • | Our power plants have generally been financed through a combination of our corporate funds and limited or non-recourse project finance debt and lease financing. If our project subsidiaries default on their obligations under such limited or non-recourse debt or lease financing, we may be required to make certain payments to the relevant debt holders, and if the collateral supporting such leveraged financing structures is foreclosed upon, we may lose certain of our power plants. |
| • | We may experience fluctuations in the cost of construction, raw materials, commodities and drilling. |
| • | Our commodity derivative activity may limit potential gains, increase potential losses, result in earnings volatility and involve other risks. |
| • | We are exposed to swap counterparty credit risk. |
| • | We may not be able to obtain sufficient insurance coverage to cover damages resulting from any damages to our assets and profitability including, but not limited to, natural disasters such as volcanic eruptions, lava flows, wind and earthquakes. |
Risks Related to Force Majeure
| • | The global spread of a public health crisis may have an adverse impact on our business. |
| • | The existence of a prolonged force majeure event or a forced outage affecting a power plant, or the transmission systems could reduce our net income. |
| • | Threats of terrorism may impact our operations in unpredictable ways and could adversely affect our business, financial condition, future results and cash flow. |
Risks Related to Our Stock
| • | Future equity issuances, including through our current or any future equity compensation plans, could result in dilution, which could cause the price of our shares of common stock to decline. |
| • | A substantial percentage of our common stock is held by stockholders whose interests may conflict with the interests of our other stockholders. |
| • | The price of our common stock may fluctuate substantially, and your investment may decline in value. |
| • | We may issue additional shares of our common stock in connection with conversions of the Notes, and thereby dilute our existing stockholders and potentially adversely affect the market price of our common stock. |
| • | The fundamental change provisions of the Notes may delay or prevent an otherwise beneficial takeover attempt of us. |
Investors are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. Other than as required by law, we undertake no obligation to update forward-looking statements even though our situation may change in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) and any updates contained herein as well as those set forth in our reports and other filings made with the Securities and Exchange Commission (the “SEC”).
Company Contact and Sources of Information
Our website is www.ormat.com. Information contained on our website is not part of this quarterly report. Information that we furnish to or file with the U.S. Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are made available for download, free of charge, through our website as soon as reasonably practicable. Our SEC filings, including exhibits filed therewith, are also available directly on the SEC’s website at www.sec.gov.
We may use our website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through our website at www.ormat.com. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls and webcasts.
General
Overview
We are a leading vertically integrated company that is primarily engaged in the geothermal energy power business. We leverage our core capabilities and global presence to expand our activity in recovered energy generation and into different energy storage services and solar PV (including hybrid geothermal and solar PV as well as Solar plus Energy Storage). Our objective is to become a leading global provider of renewable energy and help to mitigate climate change by providing a replacement to carbon-intensive energy sources. We have adopted a strategic plan to focus on several key initiatives to expand our business.
We currently conduct our business activities in three business segments:
| • | Electricity Segment. In the Electricity segment, we develop, build, own and operate geothermal, solar PV and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world and sell the electricity they generate. In the three months ended September 30, 2023, we derived 69.2% of our Electricity segment revenues from our operations in the United States and 30.8% from the rest of the world. |
| • | Product Segment. In the Product segment, we design, manufacture and sell equipment for geothermal and recovered energy-based electricity generation and provide services relating to the engineering, procurement and construction of geothermal and recovered energy-based power plants. In the three months ended September 30, 2023, we derived 5.3% of our Product segment revenues from our operations in the United States and 94.7% from the rest of the world. |
| • | Energy Storage Segment. In the Energy Storage segment, we own and operate grid connected In Front of the Meter Battery Energy Storage Systems ("BESS"), which provide capacity, energy and/or ancillary services directly to the electric grid. In the three months ended September 30, 2023, we derived all of our Energy Storage segment revenues from our operations in the United States. |
Our current generating portfolio of approximately 1.3 GW includes geothermal power plants in the United States, Kenya, Guatemala, Honduras, Guadeloupe and Indonesia, as well as energy storage facilities, recovered energy generation and Solar PV power plants in the United States.
Recent Developments
The most significant developments in our Company and business since January 1, 2023 are described below.
| • | In October 2023, we entered into a partnership agreement with a private investor, under which the private investor acquired membership interests in the North Valley Geothermal power plant for an initial purchase price of approximately $43.1 million and for which it will pay additional installments that are expected to amount to approximately $6.1 million. The Company will continue to operate and maintain the power plant and will receive substantially all the attributable cash flow generated by the power plant, and the private investor will receive substantially all of the tax attributes of the project. |
| • | In October 2023, we entered into a purchase agreement with Enel Green Power North America (EGPNA), a subsidiary of Enel SpA (ENEL.MI), to acquire a portfolio, which includes two contracted operating geothermal power plants and one triple hybrid geothermal, solar PV (20MW nameplate) and solar thermal power plant with a total aggregate generation of approximately 43 MW, two Solar assets with a total nameplate capacity of 40 MW, and two greenfield development assets, for a total of $271 million(subject to a customary post-closing working capital adjustment to the purchase price, based on the levels of net working capital of the acquired companies). The acquisition is expected to close by the first quarter of 2024, subject to regulatory approvals and customary closing conditions. |
| • | In September 2023, we have signed new contracts with Mercury NZ Limited for the supply and Engineering, Procurement and Construction (EPC) of a new 56 MW (gross) geothermal power plant at Ngatamariki, New Zealand. Under the agreement with Mercury, the project will be an expansion of the existing 96 MW Ngatamariki geothermal power plant currently in operation, which was also built by the Company in 2012. The new power plant will be built on the same platform as the existing power plant and once in operation with the new Ormat Energy Converter (OEC), it will have a total output of over 150 MW (gross). |
| • | In September 2023, we secured a new multi-year contract in partnership with Gotion High-Tech to supply batteries in support of our upcoming Energy Storage projects. Under this supply contract, Gotion will provide us with batteries at a capacity of up to 750MWh, with a variable pricing structure, partly linked to Lithium Carbonate prices. In addition to the signed agreement, we are discussing additional supply contracts and expansions to the existing signed agreement to provide the Company with U.S. domestic manufactured batteries from Gotion’s planned battery plant in Manteno, Illinois, which will allow us to benefit from higher Investment Tax Credits. |
| • |
In July 2023, we successfully commenced commercial operations of the Pomona project, a 20MW/40MWh Battery Energy Storage System (BESS) located in California, which provides capacity to Southern California Edison and ancillary services to the California Independent System Operator (CAISO) to support the electric grid in times of scarcity. |
| • |
In July 2023, we requested the Bureau of Land Management (BLM) to begin a supplemental National Environmental Policy Act (NEPA) review for the Company’s Dixie Meadows Geothermal Project. The Company has determined that its resources are more efficiently dedicated to Endangered Species Act (ESA) consultation within the context of additional review under NEPA. |
| • |
In July 2023, we signed a power purchase agreement with San Diego Community Power (SDCP) for the Arrowleaf Solar and Storage Facility. The Arrowleaf Solar and Storage Facility is located in Imperial County, California, adjacent to the Company’s operational Brawley geothermal facility and within the Imperial Irrigation District service territory. The project’s storage component will provide 35 MW/140 MWh of capacity and the solar component of the project will contribute 42 MW of clean energy to the grid. Under the terms of the 20-year power purchase agreement, the Company will provide SDCP with sustainable electricity generated by the Arrowleaf Solar and Storage Facility at predictable rates for customers. |
| • |
In June 2023, we successfully commenced commercial operations for two new battery storage facilities, adding a cumulative capacity of 43MW/43MWh. The projects include the Upton project, a 23MW/23MWh Battery Energy Storage System (BESS) located in Texas, which provides energy and ancillary services to the Electricity Reliability Council of Texas (ERCOT) and support the electric grid in times of scarcity, and the Andover BESS project, a 20MW/20MWh located in New Jersey, which provides ancillary services to PJM |
| • |
In June 2023, we signed agreements with Eastland Generation Limited (EGL) to build a 50MW power plant in New Zealand. EGL is a subsidiary of Eastland Group Limited and a regional infrastructure company. Under the terms of the agreement, the Company will design, build, commission and own the power plant. EGL will operate and maintain the power plant under a separate services arrangement. As part of the development agreement with EGL, the Company has granted EGL a contractual option to purchase the power plant at an agreed purchase price, subject to certain conditions. |
| • |
In May 2023, we successfully resumed operations at the Heber 1 power plant in California. This achievement comes after the plant temporarily shut down due to a fire incident that occurred in February 2022. The Heber complex, which includes Heber 1 and the repowered Heber 2, is expected to ramp up generation to approximately 87MW by the end of the third quarter 2023. |
| • |
In May 2023, we completed a 6MW upgrade to the Dixie Valley power plant in Nevada, which allows the Company to maximize its favorable long-term power purchase agreement. The upgrade involved the replacement of pre-acquisition equipment with the Company’s state-of-the-art energy converters. In addition, we completed the 6 MW Brady solar facility that supply the auxiliary needs of the Brady geothermal power plant and thereby increasing the net geothermal power sold to the grid. |
| • |
In April and May of 2023, we commenced the commercial operation of two energy storage facilities, Howell and Bowling Green. The Howell BESS project, located in New Jersey, and the Bowling Green BESS project, located in Ohio, will add 7MW and 12MW of capacity respectively, and will be providing ancillary services to PJM. |
| • |
In April 2023, we commenced commercial operation of the North Valley geothermal power plant. The North Valley power plant provides 25 MW of geothermal power to NV Energy under a 25-year power purchase agreement to help meet NV Energy’s renewable targets and support increased customer demand for around-the-clock clean energy. |
| • |
In March 2023, we announced that we closed a public offering of 3,600,000 shares of our common stock at a price of $82.60 per share. In addition, the underwriters' exercised their option to purchase an additional 540,000 shares of common stock at the same price. We intend to use the $341.7 million net proceeds from the offering for general corporate purposes, including working capital and capital expenditures, and for potential acquisitions, including complementary businesses, technologies or assets. |
| • |
In January 2023, we, together with PT Medco Power Indonesia (“Medco Power”), signed a Financing Agreement with PT Sarana Multi Infrastruktur (Persero) (“SMI”) for the development of the Ijen Geothermal Power Plant. The Ijen power plant will be developed in stages and the first phase of development is expected to generate 34 MW in 2025. MCG, a jointly owned company between Medco Power (51% equity share) and us (49% equity share), will develop and operate the first geothermal power plant in East Java. We also signed a contract as a key contractor for the Ormat Energy Converter (“OEC") supply for this project and secured $32.1 million of our backlog. |
Trends and Uncertainties
Different trends, factors and uncertainties may impact our operations and financial condition, including many that we do not or cannot foresee. However, we believe that our results of operations and financial condition for the foreseeable future will be primarily affected by trends, factors and uncertainties discussed in our 2022 Annual Report under “Part II - Item 7 – Management Discussion and Analysis of Financial Condition and Results of Operation”, in addition to the information set forth in this quarterly report. These trends, factors and uncertainties are, from time to time, also subject to market cycles.
| • |
In the Product segment, we see new opportunities for business in the U.S., Asia Pacific and Central and South America. In addition, a new tariff structure was recently introduced in Turkey, which we expect should increase demand for new development. The new tariff includes incentives for local manufacturing and we are currently evaluating the tariff and implication on us. We have experienced increased competition from binary power plant equipment suppliers including the major steam turbine manufacturers. While we believe that we have a distinct competitive advantage based on our technology, accumulated experience and current worldwide share of installed binary generation capacity, an increase in competition may impact our ability to secure new purchase orders from potential customers. The increased competition may also lead to further reductions in the prices that we are able to charge for our binary equipment. |
Revenues
For the nine months ended September 30, 2023, 94.7% of our Electricity segment revenues were from PPAs with fixed energy rates, which are not affected by fluctuations in energy commodity prices. We have a variable price PPA in Hawaii, which provides for payments based on the local utilities’ avoided cost, which is the incremental cost that the power purchaser avoids by not having to generate such electrical energy itself or purchase it from others. In Hawaii, the prices paid for electricity pursuant to the 25 MW PPA for the Puna Complex in Hawaii change primarily as a result of variations in the price of oil as well as other commodities. In 2019, we signed a new PPA related to Puna with fixed prices, increased capacity and extended the term until 2052. We are negotiating economic amendments including minimum capacity payments for commercial operations to the PPA and it is currently subject to PUC approval.
To comply with obligations under their respective PPAs, certain of our project subsidiaries are structured as special purpose, bankruptcy remote entities and their assets and liabilities are ring-fenced. Such assets are not generally available to pay our debt, other than debt at the respective project subsidiary level. However, these project subsidiaries are allowed to pay dividends and make distributions of cash flows generated by their assets to us, subject in some cases to restrictions in debt instruments, as described below.
Electricity segment revenues are also subject to seasonal variations and are affected by higher-than-average ambient temperatures, as described below under “Seasonality”.
Revenues attributable to our Product segment are based on the sale of equipment, engineering, procurement and construction contracts and the provision of various services to our customers. Product segment revenues vary from period to period because of the timing of our receipt of purchase orders and the progress of our equipment manufacturing and execution of the relevant project.
Revenues attributable to our Energy Storage segment are generated by several grid-connected BESS facilities that we own and operate that sell energy, capacity and/or ancillary services in merchant markets like PJM Interconnect, ISO New England, ERCOT and CAISO. The revenues fluctuate over time since a large portion of such revenues are generated in the merchant markets, where price volatility is inherent.
The following table sets forth a breakdown of our revenues for the periods indicated:
| Revenue |
Increase (decrease) |
|||||||||||||||||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
2023 |
2023 |
|||||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Electricity |
$ | 157,212 | $ | 152,820 | $ | 482,846 | $ | 466,540 | $ | 4,392 | 2.9 | % | $ | 16,306 | 3.5 | % | ||||||||||||||||
| Product |
39,831 | 14,217 | 83,331 | 39,237 | 25,614 | 180.2 | % | 44,094 | 112.4 | % | ||||||||||||||||||||||
| Energy storage |
11,013 | 8,848 | 21,907 | 22,896 | 2,165 | 24.5 | % | (989 | ) | (4.3 | )% | |||||||||||||||||||||
| Total |
$ | 208,056 | $ | 175,885 | $ | 588,084 | $ | 528,673 | $ | 32,171 | 18.3 | % | $ | 59,411 | 11.2 | % | ||||||||||||||||
| % of Revenues for Period Indicated |
||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Electricity |
75.6 | % | 86.9 | % | 82.1 | % | 88.2 | % | ||||||||
| Product |
19.1 |
8.1 | 14.2 | 7.4 | ||||||||||||
| Energy storage |
5.3 | 5.0 | 3.7 | 4.3 | ||||||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
The following table sets forth the geographic breakdown of the revenues attributable to our Electricity, Product and Energy Storage segments for the periods indicated:
| Revenue |
Increase (decrease) |
|||||||||||||||||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
2023 |
2023 |
|||||||||||||||||||||||||||
| (Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||||||||||||||
| Electricity Segment: |
||||||||||||||||||||||||||||||||
| United States |
$ | 108,762 | $ | 106,490 | $ | 337,382 | $ | 327,792 | $ | 2,272 | 2.1 | % | $ | 9,590 | 2.9 | % | ||||||||||||||||
| Foreign |
48,450 | 46,330 | 145,464 | 138,748 | 2,120 | 4.6 | 6,716 | 4.8 | ||||||||||||||||||||||||
| Total |
$ | 157,212 | $ | 152,820 | $ | 482,846 | $ | 466,540 | $ | 4,392 | 2.9 | % | $ | 16,306 | 3.5 | % | ||||||||||||||||
| Product Segment: |
||||||||||||||||||||||||||||||||
| United States |
$ | 2,099 | $ | 1,267 | $ | 5,793 | $ | 2,936 | $ | 832 | 65.7 | % | $ | 2,857 | 97.3 | % | ||||||||||||||||
| Foreign |
37,732 | 12,950 | 77,538 | 36,301 | 24,782 | 191.4 | 41,237 | 113.6 | ||||||||||||||||||||||||
| Total |
$ | 39,831 | $ | 14,217 | $ | 83,331 | $ | 39,237 | $ | 25,614 | 180.2 | % | $ | 44,094 | 112.4 | % | ||||||||||||||||
| Energy Storage Segment: |
||||||||||||||||||||||||||||||||
| United States |
$ | 11,013 | $ | 8,848 | $ | 21,907 | $ | 22,896 | $ | 2,165 | 24.5 | % | $ | (989 | ) | (4.3 | )% | |||||||||||||||
| Total |
$ | 11,013 | $ | 8,848 | $ | 21,907 | $ | 22,896 | $ | 2,165 | 24.5 | % | $ | (989 | ) | (4.3 | )% | |||||||||||||||
| % of Revenues for Period Indicated |
||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Electricity Segment: |
||||||||||||||||
| United States |
69.2 | % | 69.7 | % | 69.9 | % | 70.3 | % | ||||||||
| Foreign |
30.8 | 30.3 | 30.1 | 29.7 | ||||||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Product Segment: |
||||||||||||||||
| United States |
5.3 | % | 8.9 | % | 7.0 | % | 7.5 | % | ||||||||
| Foreign |
94.7 | 91.1 | 93.0 | 92.5 | ||||||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Energy Storage: |
||||||||||||||||
| United States |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
In the nine months ended September 30, 2023 and 2022, 38% and 33% of our total revenues, respectively, were derived from foreign locations. Our foreign operations had higher Electricity gross margins than our U.S. operations in each of those periods. A substantial portion of Electricity international revenues came from Kenya and to a lesser extent, from Honduras, Guadeloupe and Guatemala. Our operations in Kenya contributed disproportionately to gross profit and net income. The contribution to combined pre-tax income of our domestic and foreign operations within our Electricity segment and Product segment differ in a number of ways.
Electricity Segment. Our Electricity segment domestic revenues were approximately 70% and 70% of our total Electricity segment for the nine months ended September 30, 2023 and 2022, respectively. However, domestic operations have higher costs of revenues and expenses than our foreign operations. Our foreign power plants are located in lower-cost regions, like Kenya, Guatemala, Honduras and Guadeloupe, which favorably impact payroll, and maintenance expenses among other items. Our power plants in foreign locations are also newer than most of our domestic power plants and therefore tend to have lower maintenance costs and higher availability factors than our domestic power plants. Consequently, in the nine months ended September 30, 2023 and 2022, the international operations of the segment accounted for 49% and 46% of our total gross profits, 76% and 74% of our net income (assuming the majority of corporate operating expenses and financing are recorded under our domestic jurisdiction) and 39% and 39% of our EBITDA, respectively.
Product Segment. Our Product segment foreign revenues were approximately 93% and 93% of our total Product segment revenues for the nine months ended September 30, 2023 and 2022, respectively.
Energy Storage Segment. Our Energy Storage segment domestic revenues were 100% of our total Energy storage segment revenues for each of the three and nine months ended September 30, 2023 and 2022.
Seasonality
Electricity generation from some of our geothermal power plants is subject to seasonal variations. In the winter, our power plants produce more energy primarily attributable to the lower ambient temperature, which has a favorable impact on the energy component of our Electricity segment revenues as the prices under many of our contracts are fixed throughout the year with no time-of-use impact. The prices paid for electricity under the PPAs for the Mammoth Complex and the North Brawley power plant in California, the Raft River power plant in Idaho, the Neal Hot Springs power plant in Oregon and the Dixie Valley power plant in Nevada are higher in the months of June through September. The higher payments payable under these PPAs in the summer months partially offset the negative impact on our revenues from lower generation in the summer attributable to a higher ambient temperature. As a result, we expect the revenues and gross profit in the winter months to be higher than the revenues and gross profit in the summer months and in general we expect the first and fourth quarters to generate higher revenues than the second and third quarters.
Breakdown of Cost of Revenues
The principal cost of revenues attributable to our three segments are discussed in our 2022 Annual Report under “Part II - Item 7 – Management Discussion and Analysis of Financial Condition and Results of Operation”.
Critical Accounting Estimates and Assumptions
A comprehensive discussion of our critical accounting estimates and assumptions is included in our 2022 Annual Report under “Part II — Item 7 — Management Discussion and Analysis of Financial Condition and Results of Operation.”
New Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements set forth in Item 1 of this quarterly report for information regarding new accounting pronouncements.
Results of Operations
Our historical operating results in U.S. dollars and as a percentage of total revenues are presented below. A comparison of the different years described below may be of limited utility due to (i) our recent construction of power plants or enhancement of power plants; and (ii) fluctuation in revenues related to our Product segment.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| (Dollars in thousands, except per share data) |
(Dollars in thousands, except per share data) |
|||||||||||||||
| Statements of Operations Historical Data: |
||||||||||||||||
| Revenues: |
||||||||||||||||
| Electricity |
$ | 157,212 | $ | 152,820 | $ | 482,846 | $ | 466,540 | ||||||||
| Product |
39,831 | 14,217 | 83,331 | 39,237 | ||||||||||||
| Energy storage |
11,013 | 8,848 | 21,907 | 22,896 | ||||||||||||
| Total Revenues |
208,056 | 175,885 | 588,084 | 528,673 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| Electricity |
107,166 | 97,053 | 311,348 | 287,091 | ||||||||||||
| Product |
32,393 | 11,664 | 71,729 | 35,644 | ||||||||||||
| Energy storage |
8,494 | 6,060 | 19,445 | 17,324 | ||||||||||||
| Total cost of revenues |
148,053 | 114,777 | 402,522 | 340,059 | ||||||||||||
| Gross profit |
||||||||||||||||
| Electricity |
50,046 | 55,767 | 171,498 | 179,449 | ||||||||||||
| Product |
7,438 | 2,553 | 11,602 | 3,593 | ||||||||||||
| Energy storage |
2,519 | 2,788 | 2,462 | 5,572 | ||||||||||||
| Total gross profit |
60,003 | 61,108 | 185,562 | 188,614 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development expenses |
1,392 | 1,238 | 4,763 | 3,690 | ||||||||||||
| Selling and marketing expenses |
4,682 | 4,093 | 13,999 | 12,410 | ||||||||||||
| General and administrative expenses |
14,044 | 16,057 | 49,525 | 47,155 | ||||||||||||
| Write-off of Energy Storage project assets and unsuccessful exploration activities |
2,318 | 827 | 2,318 | 2,781 | ||||||||||||
| Operating income |
37,567 | 38,893 | 114,957 | 122,578 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
2,827 | 1,659 | 9,620 | 2,180 | ||||||||||||
| Interest expense, net |
(25,054 | ) | (22,403 | ) | (73,078 | ) | (63,902 | ) | ||||||||
| Derivatives and foreign currency transaction gains (losses) |
(781 | ) | (293 | ) | (3,990 | ) | (4,031 | ) | ||||||||
| Income attributable to sale of tax benefits |
14,936 | 9,113 | 42,481 | 26,345 | ||||||||||||
| Other non-operating income (expense), net |
108 | 673 | 247 | (512 | ) | |||||||||||
| Income from operations before income tax and equity in earnings (losses) of investees |
29,603 | 27,642 | 90,237 | 82,658 | ||||||||||||
| Income tax (provision) benefit |
7,134 | (7,227 | ) | 2,205 | (23,520 | ) | ||||||||||
| Equity in losses (earnings) of investees |
(405 | ) | (589 | ) | 1,862 | (1,574 | ) | |||||||||
| Net income |
36,332 | 19,826 | 94,304 | 57,564 | ||||||||||||
| Net income attributable to noncontrolling interest |
(879 | ) | (1,716 | ) | (5,631 | ) | (9,764 | ) | ||||||||
| Net income attributable to the Company's stockholders |
$ | 35,453 | $ | 18,110 | $ | 88,673 | $ | 47,800 | ||||||||
| Earnings per share attributable to the Company's stockholders: |
||||||||||||||||
| Basic: |
$ | 0.59 | $ | 0.32 | $ | 1.50 | $ | 0.85 | ||||||||
| Diluted: |
$ | 0.59 | $ | 0.32 | $ | 1.49 | $ | 0.85 | ||||||||
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: |
||||||||||||||||
| Basic |
60,299 | 55,999 | 59,105 | 56,058 | ||||||||||||
| Diluted |
60,570 | 56,457 | 59,494 | 56,479 | ||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Statements of Operations Data: |
||||||||||||||||
| Revenues: |
||||||||||||||||
| Electricity |
75.6 | % | 86.9 | % | 82.1 | % | 88.2 | % | ||||||||
| Product |
19.1 |
8.1 | 14.2 | 7.4 | ||||||||||||
| Energy storage |
5.3 | 5.0 | 3.7 | 4.3 | ||||||||||||
| Total Revenues |
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| Electricity |
68.2 | 63.5 | 64.5 | 61.5 | ||||||||||||
| Product |
81.3 | 82.0 | 86.1 | 90.8 | ||||||||||||
| Energy storage |
77.1 | 68.5 | 88.8 | 75.7 | ||||||||||||
| Total cost of revenues |
71.2 | 65.3 | 68.4 | 64.3 | ||||||||||||
| Gross profit |
||||||||||||||||
| Electricity |
31.8 | 36.5 | 35.5 | 38.5 | ||||||||||||
| Product |
18.7 | 18.0 | 13.9 | 9.2 | ||||||||||||
| Energy storage |
22.9 | 31.5 | 11.2 | 24.3 | ||||||||||||
| Total gross profit |
28.8 | 34.7 | 31.6 | 35.7 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development expenses |
0.7 | 0.7 | 0.8 | 0.7 | ||||||||||||
| Selling and marketing expenses |
2.3 | 2.3 | 2.4 | 2.3 | ||||||||||||
| General and administrative expenses |
6.8 | 9.1 | 8.4 | 8.9 | ||||||||||||
| Write-off of Energy Storage project assets and unsuccessful exploration activities |
1.1 | 0.5 | 0.4 | 0.5 | ||||||||||||
| Operating income |
18.1 | 22.1 | 19.5 | 23.2 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
1.4 | 0.9 | 1.6 | 0.4 | ||||||||||||
| Interest expense, net |
(12.0 | ) | (12.7 | ) | (12.4 | ) | (12.1 | ) | ||||||||
| Derivatives and foreign currency transaction gains (losses) |
(0.4 | ) | (0.2 | ) | (0.7 | ) | (0.8 | ) | ||||||||
| Income attributable to sale of tax benefits |
7.2 | 5.2 | 7.2 | 5.0 | ||||||||||||
| Other non-operating income (expense), net |
0.1 | 0.4 | — | (0.1 | ) | |||||||||||
| Income from operations before income tax and equity in earnings (losses) of investees |
14.2 | 15.7 | 15.3 | 15.6 | ||||||||||||
| Income tax (provision) benefit |
3.4 | (4.1 | ) | 0.4 | (4.4 | ) | ||||||||||
| Equity in losses (earnings) of investees |
(0.2 | ) | (0.3 | ) | 0.3 | (0.3 | ) | |||||||||
| Net income |
17.5 | 11.3 | 16.0 | 10.9 | ||||||||||||
| Net income attributable to noncontrolling interest |
(0.4 | ) | (1.0 | ) | (1.0 | ) | (1.8 | ) | ||||||||
| Net income attributable to the Company's stockholders |
17.0 | % | 10.3 | % | 15.1 | % | 9.0 | % | ||||||||
Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022
Total Revenues
The table below compares revenues for the three months ended September 30, 2023 to the three months ended September 30, 2022.
| Three Months Ended September 30, |
||||||||||||
| 2023 |
2022 |
Change |
||||||||||
| (Dollars in millions) |
||||||||||||
| Electricity segment |
$ | 157.2 | $ | 152.8 | 2.9 | % | ||||||
| Product segment |
39.8 | 14.2 | 180.2 | |||||||||
| Energy Storage segment |
11.0 | 8.8 | 24.5 | |||||||||
| Total revenues |
$ | 208.1 | $ | 175.9 | 18.3 | % | ||||||
Electricity Segment
Revenues attributable to our Electricity segment for the three months ended September 30, 2023 were $157.2 million, compared to $152.8 million for the three months ended September 30, 2022. This increase of $4.4 million was mainly due to: (i) $2.4 million related to the Heber 1 power plant which resumed operations in May 2023 after a temporary shutdown due to a fire incident that occurred in February 2022; (ii) $2.7 million related to the North Valley power plant which started commercial operations in April 2023; and (iii) $2.4 million related to the higher generation at the Guadeloupe power plant. This increase was partially offset by $5.6 million of lower revenues at the Puna power plant due to lower electricity prices and generation.
Power generation in our power plants increased by 7.6% from 1,535,051 MWh in the three months ended September 30, 2022 to 1,651,880 MWh in the three months ended September 30, 2023.
Product Segment
Revenues attributable to our Product segment for the three months ended September 30, 2023 were $39.8 million, compared to $14.2 million for the three months ended September 30, 2022. This increase of $25.6 million, or 180.2%, is primarily related to the progress in our projects and timing of when revenues are recognized during the period. During the three months ended September 30, 2023, Product revenues included projects primarily in New Zealand and Indonesia, compared to projects in New Zealand, Nicaragua and Indonesia for which revenues were recognized during the three months ended September 30, 2022.
Energy Storage Segment
Revenues attributable to our Energy Storage segment for the three months ended September 30, 2023 were $11.0 million compared to $8.8 million for the three months ended September 30, 2022. This increase is related to the new energy storage facilities which commenced commercial operation during 2023 and higher prices in Texas due to the warm weather conditions, partially offset by lower energy rates at PJM Interconnection, LLC (“PJM”) and California Independent System Operator “(CAISO”) facilities in the three months ended September 30, 2023 compared to the same period in the previous year.
Total Cost of Revenues
The table below compares cost of revenues for the three months ended September 30, 2023 to the three months ended September 30, 2022.
| Three Months Ended September 30, |
||||||||||||
| 2023 |
2022 |
Change |
||||||||||
| (Dollars in millions) |
||||||||||||
| Electricity segment |
$ | 107.2 | $ | 97.1 | 10.4 | % | ||||||
| Product segment |
32.4 | 11.7 | 177.7 | |||||||||
| Energy Storage segment |
8.5 | 6.1 | 40.2 | |||||||||
| Total cost of revenues |
$ | 148.1 | $ | 114.8 | 29.0 | % | ||||||
Electricity Segment
Total cost of revenues attributable to our Electricity segment for the three months ended September 30, 2023 was $107.2 million, compared to $97.1 million for the three months ended September 30, 2022. This increase was primarily attributable to: (i) the CD4 power plant which started commercial operation in July 2022; (ii) the Heber 1 power plant which resumed operations in May 2023 as described above; (iii) the Dixie Valley upgrade which was completed in May 2023; and (iv) $4.0 million income from business interruption insurance proceeds related to the fire at the Heber 1 power plant that occurred in February 2022 and which were recorded in the prior year period.
Our total Electricity segment cost of revenues for the three months ended September 30, 2023 was 68.2% of Electricity revenues, compared to 63.5% for the three months ended September 30, 2022, including the impact from business interruption insurance proceeds as described above. The cost of revenues attributable to our international power plants for the three months ended September 30, 2023 was 16.6% of our total Electricity segment cost of revenues for this period compared to 16.9% for the same period in the prior year.
Product Segment
Total cost of revenues attributable to our Product segment for the three months ended September 30, 2023 was $32.4 million, compared to $11.7 million for the three months ended September 30, 2022, which represented a 177.7% increase. This increase is primarily attributable to the increase in Product segment revenues, as discussed above. As a percentage of total Product segment revenues, our total cost of revenues attributable to our Product segment for the three months ended September 30, 2023 and 2022, was 81.3% and 82.0%, respectively, which results from different profitability of the different projects.
Energy Storage Segment
Cost of revenues attributable to our Energy Storage segment for the three months ended September 30, 2023 were $8.5 million compared to $6.1 million for the three months ended September 30, 2022. This increase is related to the corresponding increase in Energy Storage revenues as described above.
Research and Development Expenses, Net
Research and development expenses for the three months ended September 30, 2023 were $1.4 million, compared to $1.2 million for the three months ended September 30, 2022. The increase in research and development expenses, net is primarily related to the timing of inputs invested in such related projects.
Selling and Marketing Expenses
Selling and marketing expenses for the three months ended September 30, 2023 were $4.7 million compared to $4.1 million for the three months ended September 30, 2022. Selling and marketing expenses for the three months ended September 30, 2023 and 2022 constituted 2.3% and 2.3% of total revenues, respectively.
General and Administrative Expenses
General and administrative expenses for the three months ended September 30, 2023 were $14.0 million compared to $16.1 million for the three months ended September 30, 2022. General and administrative expenses for the three months ended September 30, 2023 and 2022 constituted 6.8% and 9.1% of total revenues, respectively. The decrease in general and administrative expenses is primarily attributable to timing of incurring legal services in connection with the ongoing legal proceeding as described under Note 9 to the condensed consolidated financial statements.
Write-off of Energy Storage Project Assets and Unsuccessful Exploration Activities
Write-off of Energy Storage project assets and unsuccessful exploration activities for the three months ended September 30, 2023 and 2022 was $2.3 million and $0.8 million, respectively. These write-offs are related to accumulated costs of energy storage and geothermal exploration projects that the Company is no longer pursuing.
Interest Income
Interest Income for the three months ended September 30, 2023 was $2.8 million, compared to $1.7 million for the three months ended September 30, 2022. This increase is primarily related to higher interest rates on cash and cash equivalents, period over period.
Interest Expense, Net
Interest expense, net for the three months ended September 30, 2023 was $25.1 million, compared to $22.4 million for the three months ended September 30, 2022. This increase of $2.7 million was primarily attributable to the $1.6 million from the BHI Loan entered into in February 2023. This increase was partially offset by lower interest expenses on other long-term loans as a result of regular principal payments.
Derivatives and Foreign Currency Transaction Gains (Losses)
Derivatives and foreign currency transaction gains and losses for the three months ended September 30, 2023 was a loss of $0.8 million, compared to $0.3 million for the three months ended September 30, 2022. Derivatives and foreign currency transaction gains (losses) primarily includes losses from foreign currency forward contracts which were not accounted for as hedge transactions.
Income Attributable to Sale of Tax Benefits
Income attributable to the sale of tax benefits for the three months ended September 30, 2023 was $14.9 million, compared to $9.1 million for the three months ended September 30, 2022. This income primarily represents the value of production tax credits (“PTCs”) and taxable income or loss generated by certain of our power plants allocated to investors under tax equity transactions. This increase of $5.8 million is primarily related to the CD 4 tax equity transaction entered into in December 2022 and income related to the expected sale of transferable production tax credits of $2.4 million, which was recorded in the third quarter of 2023 under the new IRA regulations.
Other Non-Operating Income (Expense), Net
Other non-operating income (expense), net for the three months ended September 30, 2023 was income of $0.1 million, compared to $0.7 million for the three months ended September 30, 2022. Other non-operating income (expense), net for the three months ended September 30, 2022, primarily consists of a gain from sale of equipment to a third party.
Income Taxes
Income tax benefit for the three months ended September 30, 2023 was $7.1 million compared to income tax provision of $7.2 million for the three months ended September 30, 2022. Our effective tax rate for the three months ended September 30, 2023 and 2022, was (24.1)% and 26.1%, respectively. The effective rate differs from the federal statutory rate of 21% primarily due to the generation of investment tax credits of $6.6 million, a benefit associated with the statutory tax rate change in Kenya resulting from the Finance Act of $9.4 million, and jurisdictional mix of earnings at differing tax rates.
Equity in Earnings (losses) of Investees, Net
Equity in earnings of investees, net for the three months ended September 30, 2023 was earnings of $0.4 million, compared to $0.6 million for the three months ended September 30, 2022. Equity in earnings (losses) of investees, net is derived from our 12.75% share in the earnings or losses in the Sarulla Consortium ("Sarulla") and our 49% share in the earnings or losses in the Ijen geothermal project. The decrease in equity in earnings of investees is primarily related to increase in net income generated by the Ijen project starting in 2023. In the second quarter of 2022, Sarulla agreed with its banks on a framework that will enable it to perform remediation works that are aimed to restore the power plants' performance. The outcome of the first phase of the recovery plan is under evaluation towards the decision regarding the implementation of the second phase. As we determined that the current situation and circumstances related to our equity method investment in Sarulla are temporary, no impairment testing was required for the period.
Net Income Attributable to the Company’s Stockholders
Net income attributable to the Company’s stockholders for the three months ended September 30, 2023 was $35.5 million, compared to $18.1 million for the three months ended September 30, 2022, which represents an increase of $17.3 million. This increase was attributable to an increase of $16.5 million in net income which was affected by the explanations described above, and an decrease of $0.8 million in net income attributable to noncontrolling interest in the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily as a result of lower performance by our Puna power plant, period over period.
Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022
Total Revenues
The table below compares revenues for the nine months ended September 30, 2023 to the nine months ended September 30, 2022.
| Nine Months Ended September 30, |
||||||||||||
| 2023 |
2022 |
Change |
||||||||||
| (Dollars in millions) |
||||||||||||
| Electricity segment |
$ | 482.8 | $ | 466.5 | 3.5 | % | ||||||
| Product segment |
83.3 | 39.2 | 112.4 | |||||||||
| Energy Storage segment |
21.9 | 22.9 | (4.3 | ) | ||||||||
| Total revenues |
$ | 588.1 | $ | 528.7 | 11.2 | % | ||||||
Electricity Segment
Revenues attributable to our Electricity segment for the nine months ended September 30, 2023, were $482.8 million, compared to $466.5 million for the nine months ended September 30, 2022. The increase of $16.3 million in our Electricity segment revenues was mainly attributable to: (i) $9.2 million related to the CD4 power plant which started commercial operation in July 2022; (ii) $5.2 million related to the North Valley power plant which started commercial operations in April 2023; (iii) $2.1 million related to the Dixie Valley upgrade which was completed in May 2023; (iv) $7.1 million related to higher generation in Kenya and Guadeloupe; and (v) $3.9 million related to the Tungsten 2 power plant which started commercial operation in April 2022. This increase was partially offset by $12.3 million of lower revenues at the Puna power plant due to lower electricity prices and slightly lower generation.
Power generation in our power plants increased by 6.3% from 4,945,315 MWh in the nine months ended September 30, 2022 to 5,258,274 MWh in the nine months ended September 30, 2023.
Product Segment
Revenues attributable to our Product segment for the nine months ended September 30, 2023 were $83.3 million, compared to $39.2 million for the nine months ended September 30, 2022. This increase of $44.1 million, or 112.4% is primarily related to the progress in our projects which results in the timing of when revenues are recognized. During the nine months ended September 30, 2023, we recognized revenues from projects in New Zealand, Indonesia and the Philippines, which were higher than revenues during the same period of the previous year, from projects primarily in Indonesia, New Zealand, and Nicaragua.
Energy Storage Segment
Revenues attributable to our Energy Storage segment for the nine months ended September 30, 2023 were $21.9 million compared to $22.9 million for the nine months ended September 30, 2022. The decrease is mainly related to lower revenues at PJM and CAISO facilities due to lower energy rates in 2023, offset by the new energy storage facilities which commenced commercial operation during 2023.
Total Cost of Revenues
The table below compares cost of revenues for the nine months ended September 30, 2023 to the nine months ended September 30, 2022.
| Nine Months Ended September 30, |
||||||||||||
| 2023 |
2022 |
Change |
||||||||||
| (Dollars in millions) |
||||||||||||
| Electricity segment |
$ | 311.3 | $ | 287.1 | 8.4 | % | ||||||
| Product segment |
71.7 | 35.6 | 101.2 | |||||||||
| Energy Storage segment |
19.4 |
17.3 | 12.2 | |||||||||
| Total cost of revenues |
$ | 402.5 | $ | 340.1 | 18.4 | % | ||||||
Electricity Segment
Total cost of revenues attributable to our Electricity segment for the nine months ended September 30, 2023 was $311.3 million, compared to $287.1 million for the nine months ended September 30, 2022. This increase of $24.3 million is primarily attributable to: (i) the start of commercial operation of CD4 in July 2022, North Valley in April 2023, Dixie Valley upgrade in May 2023 and Tungsten 2 in April 2022; and (ii) business interruption insurance income of $9.2 million recorded in the nine months ended September 30, 2022, compared to only $6.3 million recorded in the nine months ended September 30, 2023.
Our total Electricity segment cost of revenues for the nine months ended September 30, 2023 was 64.5% of Electricity revenues, compared to 61.5% for the nine months ended September 30, 2022, including the impact from business interruption insurance proceeds described above. The cost of revenues attributable to our international power plants for the nine months ended September 30, 2023 was 17.5% of our total Electricity segment cost of revenues for this period compared to 18.0% for the same period in the prior year.
Product Segment
Total cost of revenues attributable to our Product segment for the nine months ended September 30, 2023 was $71.7 million, compared to $35.6 million for the nine months ended September 30, 2022, which represented a 101.2% increase. This increase was primarily attributable to the increase in Product segment revenues as discussed above. As a percentage of total Product segment revenues, our total cost of revenues attributable to our Product segment for the nine months ended September 30, 2023 and 2022, was 86.1% and 90.8%, respectively, which results from different profitability of the different projects.
Energy Storage Segment
Cost of revenues attributable to our Energy Storage segment for the nine months ended September 30, 2023 were $19.4 million compared to $17.3 million for the nine months ended September 30, 2022. The Energy Storage segment includes cost of revenues related to the delivery of energy storage and energy management services.
Research and Development Expenses, Net
Research and development expenses for the nine months ended September 30, 2023 were $4.8 million, compared to $3.7 million for the nine months ended September 30, 2022. The increase is mainly attributable to the timing of research and development projects that took place during the nine months ended September 30, 2023 compared to the corresponding period in 2022.
Selling and Marketing Expenses
Selling and marketing expenses for the nine months ended September 30, 2023 were $14.0 million compared to $12.4 million for the nine months ended September 30, 2022. Selling and marketing expenses for the nine months ended September 30, 2023, constituted 2.4% of total revenues for such period, compared to 2.3% for the nine months ended September 30, 2022, and the increase period over period is associated with the corresponding increase in total revenues.
General and Administrative Expenses
General and administrative expenses for the nine months ended September 30, 2023 were $49.5 million compared to $47.2 million for the nine months ended September 30, 2022. The increase of $2.4 million is primarily attributable to services related to the implementation of our new enterprise resource planning system and timing of incurring legal services in connection with the ongoing legal proceeding as described under Note 9 to the condensed consolidated financial statements.
General and administrative expenses for the nine months ended September 30, 2023 constituted 8.4% of total revenues for such period, compared to 8.9% for the nine months ended September 30, 2022.
Write-off of Energy Storage Project Assets and Unsuccessful Exploration Activities
Write-off of Energy Storage project assets and unsuccessful exploration activities for the nine months ended September 30, 2023 was $2.3 million, compared to $2.8 million for the nine months ended September 30, 2022. The write-off in both periods is primarily related to accumulated costs of energy storage and geothermal exploration projects that the Company is no longer pursuing.
Interest Income
Interest Income for the nine months ended September 30, 2023 was $9.6 million, compared to $2.2 million for the nine months ended September 30, 2022. This increase is primarily related to higher interest rates on cash and cash equivalents, period over period.
Interest Expense, Net
Interest expense, net for the nine months ended September 30, 2023 was $73.1 million, compared to $63.9 million for the nine months ended September 30, 2022. This increase of $9.2 million was primarily due to: (i) $3.8 million related to the BHI Loan closed in February 2023; (ii) $5.1 million related to the convertible senior note issued in June 2022; and (iii) $1.4 million related to the higher amount of interest expenses that were capitalized to projects under construction in the nine months ended September 30, 2022 compared to the same period in 2023. This increase was partially offset by lower interest expenses on other long-term loans as a result of regular principal payments.
Derivatives and Foreign Currency Transaction Gains (Losses)
Derivatives and foreign currency transaction losses for the nine months ended September 30, 2023 were $4.0 million, compared to $4.0 million for the nine months ended September 30, 2022. Derivatives and foreign currency transaction losses primarily includes losses from foreign currency forward contracts which were not accounted for as hedge transactions.
Income Attributable to Sale of Tax Benefits
Income attributable to the sale of tax benefits for the nine months ended September 30, 2023 was $42.5 million, compared to $26.3 million for the nine months ended September 30, 2022. This income primarily represents the value of PTCs and taxable income or loss generated by certain of our power plants allocated to investors under tax equity transactions. This increase of $16.1 million is attributable to the CD 4 tax equity transaction entered into in December 2022 and income related to the expected sale of transferable production tax credits of $6.9 million, which was recorded in the nine months ended September 30, 2023 under the new IRA regulations.
Other Non-Operating Income (Expense), Net
Other non-operating income (expense), net for the nine months ended September 30, 2023 was income of $0.2 million, compared to an expense of $0.5 million for the nine months ended September 30, 2022. Other non-operating income (expense), net for the nine months ended September 30, 2022, primarily includes a make-whole premium of $1.1 million from the prepayment of Series 3 Bonds during the second quarter of 2022.
Income Taxes
Income tax benefit for the nine months ended September 30, 2023 was $2.2 million compared to income tax provision of $23.5 million for the nine months ended September 30, 2022. Our effective tax rate for the nine months ended September 30, 2023 and 2022, was 2.4% and 28.5%, respectively. The effective rate differs from the federal statutory rate of 21% for the nine months ended September 30, 2023 primarily due to the generation of investment tax credits of $17.2 million, a benefit associated with the statutory tax rate change in Kenya resulting from the Finance Act of $9.4 million, and the jurisdictional mix of earnings at differing tax rates.
Equity in Earnings (losses) of Investees, Net
Equity in earnings (losses) of investees, net for the nine months ended September 30, 2023 was losses of $1.9 million, compared to earnings of $1.6 million for the nine months ended September 30, 2022. Equity in earnings (losses) of investees, net is mainly derived from our 12.75% share in the earnings or losses in the Sarulla consortium and our 49% share in the earnings or losses in the Ijen geothermal project. The increase in equity in earnings of investees is primarily related to increase in net income generated by the Ijen project starting in 2023. In the second quarter of 2022, Sarulla agreed with its banks on a framework that will enable it to perform remediation works that are aimed to restore the power plants' performance. The outcome of the first phase of the recovery plan is under evaluation towards the decision regarding the implementation of the second phase. As we determined that the current situation and circumstances related to our equity method investment in Sarulla are temporary, no impairment testing was required for the period.
Net Income Attributable to the Company’s Stockholders
Net income attributable to the Company’s stockholders for the nine months ended September 30, 2023 was $88.7 million, compared to $47.8 million for the nine months ended September 30, 2022, which represents an increase of $40.9 million. This increase was attributable to the increase of $36.7 million in net income which was affected by the explanations described above, as well as a decrease in net income attributable to noncontrolling interest primarily due to the lower performance by our Puna power plant, period over period.
Liquidity and Capital Resources
Our principal sources of liquidity have been derived from cash flows from operations, proceeds from third party debt such as borrowings under our credit facilities, private or public offerings and issuances of debt or equity securities, project financing and tax monetization transactions, short term borrowing under our lines of credit, and proceeds from the sale of equity interests in one or more of our projects. We have utilized this cash to develop and construct power plants, fund our acquisitions, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs.
As of September 30, 2023, we had access to (i) $78.1 million in cash and cash equivalents, of which $46.2 million is held by our foreign subsidiaries; and (ii) $390.5 million of unused corporate borrowing capacity under existing committed lines for credit and letters of credit with different commercial banks.
Our estimated capital needs for the remainder of 2023 include $110.0 million for capital expenditures on new projects under development or construction including energy storage projects, exploration activity and maintenance capital expenditures for our existing projects. In addition, $31.7 million will be needed for long-term debt repayment.
We expect to finance these requirements with: (i) the sources of liquidity described above; (ii) positive cash flows from our operations; and (iii) future project financings and re-financings (including construction loans and tax equity). Management believes that, based on the current stage of implementation of our strategic plan, the sources of liquidity and capital resources described above will address our anticipated liquidity, capital expenditures, and other investment requirements.
As of September 30, 2023, we continue to maintain our assertion to no longer indefinitely reinvest foreign funds held by our foreign subsidiaries, and have accrued the incremental foreign withholding taxes. Accordingly, during the nine months ended September 30, 2023, we included a foreign income tax expense of $1.5 million related to foreign withholding taxes on accumulated earnings of all of our foreign subsidiaries.
As described under Note 1 to the condensed consolidated financial statements, on February 27, 2023, the Company entered into a definitive loan agreement with Hapoalim Bank under which it provided for a loan in an aggregate principal amount of $100 million.
Letters of Credits Under Credit Agreements
Some of our customers require our project subsidiaries to post letters of credit in order to guarantee their respective performance under relevant contracts. We are also required to post letters of credit to secure our obligations under various leases and licenses and may, from time to time, decide to post letters of credit in lieu of cash deposits in reserve accounts under certain financing arrangements. In addition, our subsidiary, Ormat Systems, is required from time to time to post performance letters of credit in favor of our customers with respect to orders of products.
| Credit Agreements |
Amount Issued |
Issued and Outstanding as of September 30, 2023 |
Termination Date |
||||||
| (Dollars in millions) |
|||||||||
| Committed lines for credit and letters of credit |
$ | 468.0 | $ | 77.5 | November 2023-August 2025 |
||||
| Committed lines for letters of credit |
155.0 | 89.4 | October 2023-August 2025 |
||||||
| Non-committed lines |
— | 76.0 | October 2023 |
||||||
| Total |
$ | 623.0 | $ | 242.9 | |||||
Restrictive Covenants
Our obligations under the credit agreements, the loan agreements, and the trust instrument governing the bonds described above, are unsecured, but we are subject to a negative pledge in favor of the banks and the other lenders and certain other restrictive covenants. These include, among other things, restraints on: (i) creating any floating charge or any permanent pledge, charge or lien over our assets without obtaining the prior written approval of the lender; (ii) guaranteeing the liabilities of any third party without obtaining the prior written approval of the lender; and (iii) selling, assigning, transferring, conveying or disposing of all or substantially all of our assets, or a change of control in our ownership structure. Some of the credit agreements, the term loan agreements, and the trust instrument contain cross-default provisions with respect to other material indebtedness owed by us to any third party. In some cases, we have agreed to maintain certain financial ratios, which are measured quarterly, such as: (i) equity of at least $750 million and in no event less than 25% of total assets; and (ii) 12-month debt, net of cash, cash equivalents, and short-term bank deposits to Adjusted EBITDA ratio not to exceed 6.0. As of September 30, 2023: (i) total equity was $2,405.0 million and the actual equity to total assets ratio was 48.0% and (ii) the 12-month debt, net of cash, cash equivalents, to Adjusted EBITDA ratio was 3.82. During the nine months ended September 30, 2023, we distributed interim dividends in an aggregate amount of $21.2 million. The failure to perform or observe any of the covenants set forth in such agreements, subject to various cure periods, would result in the occurrence of an event of default and would enable the lenders to accelerate all amounts due under each such agreement.
As described above, we are currently in compliance with our covenants with respect to the credit agreements, the loan agreements and the trust instrument (except as described below), and believe that the restrictive covenants, financial ratios and other terms of any of our full-recourse bank credit agreements will not materially impact our business plan or operations.
As of September 30, 2023, we did not meet the dividend distribution criteria related to the DAC 1 Senior Secured Notes, which resulted in certain equity distribution restrictions from this related subsidiary.
Future minimum payments
Future minimum cash payments under long-term obligations (including long-term debt, lease obligations and financing liability), as of September 30, 2023, are as follows:
| (Dollars in thousands) |
||||
| Year ending December 31: |
||||
| 2023 |
$ | 33,410 | ||
| 2024 |
273,192 | |||
| 2025 |
184,686 | |||
| 2026 |
186,688 | |||
| 2027 |
615,693 | |||
| Thereafter |
725,805 | |||
| Total |
$ | 2,019,474 | ||
Third-Party Debt
Our third-party debt consists of (i) non-recourse and limited-recourse project finance debt or acquisition financing debt that we or our subsidiaries have obtained for the purpose of developing and constructing, refinancing or acquiring our various projects; (ii) full-recourse debt incurred by us or our subsidiaries for general corporate purposes; (iii) financing liability related to the business combination purchase transaction of the Terra-Gen geothermal assets; (iv) convertible senior notes issued in the second quarter of 2022; and (v) short term revolving credit lines with banks.
Non-Recourse and Limited-Recourse Third-Party Debt
| Loan |
Amount Issued |
Amount Outstanding as of September 30, 2023 |
Interest Rate |
Maturity Date |
Related Project |
Location |
||||||||||||
| (Dollars in millions) |
||||||||||||||||||
| OFC 2 Senior Secured Notes – Series A |
$ | 151.7 | $ | 66.1 | 4.67 | % | 2032 | McGinness Hills phase 1 and Tuscarora |
U.S. |
|||||||||
| OFC 2 Senior Secured Notes – Series B |
140.0 | 80.7 | 4.61 | % | 2032 | McGinness Hills phase 2 |
U.S. |
|||||||||||
| Olkaria III Financing Agreement with DFC – Tranche 1 |
85.0 | 34.2 | 6.34 | % | 2030 | Olkaria III Complex |
Kenya |
|||||||||||
| Olkaria III Financing Agreement with DFC – Tranche 2 |
180.0 | 71.5 | 6.29 | % | 2030 | Olkaria III Complex |
Kenya |
|||||||||||
| Olkaria III Financing Agreement with DFC – Tranche 3 |
45.0 | 19.5 | 6.12 | % | 2030 | Olkaria III Complex |
Kenya |
|||||||||||
| Don A. Campbell Senior Secured Notes |
92.5 | 58.8 | 4.03 | % | 2033 | Don A. Campbell Complex |
U.S. |
|||||||||||
| Idaho Refinancing Note (1) |
61.6 | 58.9 | 6.26 | % | 2038 | Neal Hot Springs and Raft River |
U.S. |
|||||||||||
| U.S. Department of Energy Loan (2) |
96.8 | 33.1 | 2.60 | % | 2035 | Neal Hot Springs |
U.S. |
|||||||||||
| Prudential Capital Group Nevada Loan |
30.7 | 23.3 | 6.75 | % | 2037 | San Emidio |
U.S. |
|||||||||||
| Platanares Loan with DFC |
114.7 | 73.7 | 7.02 | % | 2032 | Platanares |
Honduras |
|||||||||||
| Géothermie Bouillante(3) |
8.9 | 3.6 | 1.52 | % | 2026 | Géothermie Bouillante |
Guadeloupe |
|||||||||||
| Géothermie Bouillante(3) |
8.9 | 4.4 | 1.93 | % | 2026 | Géothermie Bouillante |
Guadeloupe |
|||||||||||
| Total |
$ | 1,015.8 | $ | 527.8 | ||||||||||||||
| 1. |
Secured by equity interest. |
| 2. |
Secured by the assets. |
| 3. |
Loan issued in total aggregate amount of EUR 8.0 million. |
Full-Recourse Third-Party Debt
| Loan |
Amount Issued |
Amount Outstanding as of September 30, 2023 |
Interest Rate |
Maturity Date |
|||||||||
| (Dollars in millions) |
|||||||||||||
| Mizrahi Loan |
$ | 75.0 | $ | 65.6 | 4.10 | % | April 2030 |
||||||
| Hapoalim Loan |
125.0 | 89.3 | 3.45 | % | June 2028 |
||||||||
| Hapoalim Loan 2023 |
100.0 | 95.0 | 6.45 | % | February 2033 |
||||||||
| HSBC Loan |
50.0 | 35.7 | 3.45 | % | July 2028 |
||||||||
| Discount Loan |
100.0 | 75.0 | 2.90 | % | September 2029 |
||||||||
| Senior Unsecured Bonds Series 4 (1) |
289.8 | 209.2 | 3.35 | % | June 2031 |
||||||||
| Senior unsecured Loan 1 |
100.0 | 79.0 | 4.80 | % | March 2029 |
||||||||
| Senior unsecured Loan 2 |
50.0 | 39.5 | 4.60 | % | March 2029 |
||||||||
| Senior unsecured Loan 3 |
50.0 | 39.5 | 5.44 | % | March 2029 |
||||||||
| DEG Loan 2 |
50.0 | 25.0 | 6.28 | % | June 2028 |
||||||||
| DEG Loan 3 |
41.5 | 21.8 | 6.04 | % | June 2028 |
||||||||
| Total |
$ | 1,031.3 | $ | 774.6 | |||||||||
(1 ) Bonds issued in total aggregate principal amount of NIS 1.0 billion.
Financing Liability - Dixie Valley
The financing liability is related to the business combination purchase transaction of the Terra-Gen geothermal assets. The financing liability outstanding amount as of September 30, 2023 is $225.8 million, it bears a fixed interest rate of 2.5% per annum, principal and interest are payable semi-annually, and matures in March 2033.
Convertible Senior Notes
The convertible senior notes ("Notes") were issued in June 2022. The Notes bear annual interest of 2.5%, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2023. The Notes mature on July 15, 2027, unless earlier converted, redeemed or repurchased and the outstanding aggregate amount of the Notes as of September 30, 2023 is $431.3 million.
Liquidity Impact of Uncertain Tax Positions
The Company has a liability associated with unrecognized tax benefits and related interest and penalties in the amount of approximately $6.6 million as of September 30, 2023. This liability is included in long-term liabilities in our condensed consolidated balance sheet because we generally do not anticipate that settlement of the liability will require payment of cash within the next twelve months. We are not able to reasonably estimate when we will make any cash payments required to settle this liability.
Dividends
The following are the dividends declared by us since September 30, 2021:
| Date Declared |
Dividend Amount per Share |
Record Date |
Payment Date |
|||
| November 3, 2021 |
$ | 0.12 | November 17, 2021 |
December 3, 2021 |
||
| February 23, 2022 |
$ | 0.12 | March 9, 2022 |
March 23, 2022 |
||
| May 2, 2022 |
$ | 0.12 | May 16, 2022 |
May 31, 2022 |
||
| August 3, 2022 |
$ | 0.12 | August 17, 2022 |
August 31, 2022 |
||
| November 2, 2022 |
$ | 0.12 | November 16, 2022 |
November 30, 2022 |
||
| February 22, 2023 |
$ | 0.12 | March 8, 2023 |
March 22, 2023 |
||
| May 9, 2023 |
$ | 0.12 | May 23, 2023 |
June 6, 2023 |
||
| August 2, 2023 |
$ | 0.12 | August 16, 2023 |
August 30, 2023 |
||
| November 8, 2023 |
$ | 0.12 | November 22, 2023 |
December 6, 2023 |
||
Historical Cash Flows
The following table sets forth the components of our cash flows for the periods indicated:
| Nine Months Ended September 30, |
||||||||
| 2023 |
2022 |
|||||||
| (Dollars in thousands) |
||||||||
| Net cash provided by operating activities |
$ | 170,256 | $ | 206,247 | ||||
| Net cash used in investing activities |
(458,166 | ) | (369,577 | ) | ||||
| Net cash provided by financing activities |
247,568 | 73,600 | ||||||
| Translation adjustments on cash and cash equivalents |
(67 | ) | (679 | ) | ||||
| Net change in cash and cash equivalents and restricted cash and cash equivalents |
$ | (40,409 | ) | $ | (90,409 | ) | ||
For the Nine Months Ended September 30, 2023
Net cash provided by operating activities for the nine months ended September 30, 2023 was $170.3 million, compared to $206.2 million for the nine months ended September 30, 2022. The net decrease of $36.0 million was primarily attributable to higher net income, adjusted for certain non-cash items, and: (i) a net decrease of $4.7 million in costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts, period over period, as a result of timing of billing to our customers; (ii) an increase in receivables of $52.4 million primarily related to the timing of payments by our customers; (iii) a net increase in change in inventories of $20.7 million related to timing of allocating costs to projects under construction and; (iv) an increase in deposits and other of $9.4 million, related to deposit payments made in connection with our operations. This net decrease was offset by: (i) an increase in other long-term liabilities of $13.3 million primarily related to a prepayment made by one of our customers and; (ii) an increase in the change in accounts payable and accrued expenses of $33.9 million, mainly due to timing of payments to our supplier and construction of power plants.
Net cash used in investing activities for the nine months ended September 30, 2023 was $458.2 million, compared to $369.6 million for the nine months ended September 30, 2022. The principal factors that affected our net cash used in investing activities during the nine months ended September 30, 2023 and 2022 were: capital expenditures of $448.8 million, and $408.4 million, respectively, primarily for our facilities under construction that support our growth plan. Net cash used in investing activities for the nine months ended September 30, 2022 was partially offset by cash inflow from transactions in marketable securities in the amount of $42.8 million.
Net cash provided by financing activities for the nine months ended September 30, 2023 was $247.6 million, compared to net cash provided by financing activities of $73.6 million for the nine months ended September 30, 2022. The principal factors that affected the net cash provided by financing activities during the nine months ended September 30, 2023 were: (i) net proceeds of $341.7 million, $35.0 million, and $99.9 million from issuance of common stock, proceeds from revolving lines of credit, and proceeds from the Hapoalim Loan 2023, respectively; and (ii) cash received from noncontrolling interest in the amount of $7.3 million. These cash inflows were primarily offset by: (i) repayment of long-term debt in the amount of $175.9 million, including the prepayments of the Plumstriker and Amatitlan loans; (ii) cash dividend payment of $21.2 million, and (iii) $34.5 million cash paid to noncontrolling interest. The principal factors that affected our net cash provided by financing activities during the nine months ended September 30, 2022 were: (i) net proceeds of $419.7 million and $75.0 million from issuance of convertible notes and proceeds from the Mizrahi Loan, respectively, primarily offset by: (i) prepayment of the Series 3 Bonds in the amount of $219.1 million; (ii) repayments of long-term debt in the amount of $135.7 million; (iii) cash paid to noncontrolling interest of $5.9 million; (iv) cash dividend payment of $20.2 million; (v) purchase of capped call instruments in the amount of $24.5 million, and (vi) purchase of treasury stock in the amount of $18.0 million.
Non-GAAP Measures: EBITDA and Adjusted EBITDA
We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives, (ii) stock-based compensation, (iii) merger and acquisition transaction costs, (iv) gain or loss from extinguishment of liabilities, (v) cost related to a settlement agreement, (vi) non-cash impairment charges; (vii) write-off of energy storage projects and unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor’s ability to evaluate our financial and operating performance. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
Starting in the fourth quarter of 2022, we include accretion expenses related to asset retirement obligation in the adjustments to net income when calculating EBITDA and adjusted EBITDA. The presentation of EBITDA and adjusted EBITDA includes accretion expenses for the three and nine months ended September 30, 2023, however, the prior year has not been recast to include accretion expenses as the amounts were immaterial.
Net income for the three and nine months ended September 30, 2023 was $36.3 million and $94.3 million, respectively, compared to $19.8 million and $57.6 million for the three and nine months ended September 30, 2022, respectively.
Adjusted EBITDA for the three and nine months ended September 30, 2023 was $118.3 million and $342.7 million, respectively, compared to $102.2 million and $310.8 million for the three and nine months ended September 30, 2022, respectively.
The following table reconciles net income to EBITDA and Adjusted EBITDA for the three and nine months period ended September 30, 2023 and 2022:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| (Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||
| Net income |
$ | 36,332 | $ | 19,826 | $ | 94,304 | $ | 57,564 | ||||||||
| Adjusted for: |
||||||||||||||||
| Interest expense, net (including amortization of deferred financing costs) |
22,227 | 20,744 | 63,458 | 61,722 | ||||||||||||
| Income tax provision (benefit) |
(7,134 | ) | 7,227 | (2,205 | ) | 23,520 | ||||||||||
| Adjustment to investment in an unconsolidated companies: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla and Ijen |
3,794 | 3,150 | 10,826 | 9,441 | ||||||||||||
| Depreciation, amortization and accretion |
56,749 | 48,863 | 162,084 | 142,966 | ||||||||||||
| EBITDA |
$ | 111,968 | $ | 99,810 | $ | 328,467 | $ | 295,213 | ||||||||
| Mark-to-market (gains) or losses from accounting for derivative |
(307 | ) | (1,234 | ) | 284 | 2,677 | ||||||||||
| Stock-based compensation |
3,934 | 2,816 | 11,235 | 8,629 | ||||||||||||
| Make-whole premium related to long-term debt prepayment |
— | — | — | 1,102 | ||||||||||||
| Allowance for bad debts |
— | — | — | 115 | ||||||||||||
| Merger and acquisition transaction costs |
418 | — | 418 | 249 | ||||||||||||
| Write-off of Energy Storage project assets and unsuccessful exploration activities |
2,318 | 827 | 2,318 | 2,781 | ||||||||||||
| Adjusted EBITDA |
$ | 118,331 | $ | 102,219 | $ | 342,722 | $ | 310,766 | ||||||||
In May 2014, the Sarulla consortium ("SOL") closed $1,170 million in financing through SOL. As of September 30, 2023, the SOL credit facility had an outstanding balance of $796.5 million. Our proportionate share in the SOL credit facility is $101.6 million. In the second quarter of 2022, Sarulla agreed with its banks on a framework that will enable it to perform remediation works that are aimed to restore the power plants' performance. The outcome of the first phase of the recovery plan is under evaluation towards the decision regarding the implementation of the second phase. As we determined that the current situation and circumstances related to our equity method investment in Sarulla are temporary, no impairment testing was required for the period.
Capital Expenditures
Our capital expenditures primarily relate to: (i) the development and construction of new power plants, (ii) the enhancement of our existing power plants; and (iii) investment in activities under our strategic plan.
The following is an overview of projects that are fully released for construction.
Steamboat Solar (Nevada). We are currently developing a Solar PV power plant adjacent to our Steamboat 2/3 geothermal power plant at the Steamboat complex in Nevada. The project is expected to generate approximately 7 MW that will be used for the ancillary needs of the geothermal power plant and will free a similar amount of MW to be sold from the geothermal resource to SCPPA under the SCPPA portfolio PPA. Construction of the Steamboat 2/3 Solar PV is progressing and commercial operation is expected in the fourth quarter of 2023.
Zunil Upgrade (Guatemala). We are expanding the Zunil geothermal power plant in Guatemala to add 5 MW of additional capacity. We are planning to sell the electricity generated under the existing PPA with the local utility, Institute Nacional de Electrification or “INDE”. Construction has been completed and drilling is still ongoing. Commercial operation is expected in 2024.
North Valley Solar (Nevada). We are currently developing a Solar PV power plant adjacent to our North Valley geothermal power plant in Nevada. The project is expected to generate approximately 6 MW that will be used for the ancillary needs of the geothermal power plant and will free a similar amount to be sold from the geothermal resource to SCPPA under the SCPPA portfolio PPA. Permitting is ongoing. Commercial operation is expected in the first half of 2024.
Beowawe Upgrade (Nevada). We are currently in the process of upgrading the Beowawe project that we recently acquired. We are planning to replace the old equipment with new advanced technology equipment that will add a net capacity of 9 MW. Construction is progressing, equipment deliveries are ongoing and we expect commercial operation in the second quarter of 2024.
Steamboat Hills Solar (Nevada). We are currently developing a Solar PV power plant adjacent to our geothermal Steamboat complex in Nevada. The project is expected to generate approximately 3.5 MW that will be used for the ancillary needs of the geothermal power plant and will free a similar amount of MW to be sold from the geothermal resource to SCPPA under the SCPPA portfolio PPA. Construction commenced and expect commercial operation in the fourth quarter of 2023.
Beowawe Solar (Nevada). We are currently developing a Solar PV power plant adjacent to our geothermal Beowawe power plant in Nevada. The project is expected to generate approximately 6 MW that will be used for the ancillary needs of the geothermal power plant and will free a similar amount of MW to be sold from the geothermal resource under its PPA. Construction commenced and we expect commercial operation in the second quarter of 2024.
Bouillante repowering (Guadeloupe). We are currently in the process of upgrading the Bouillante project and planning to install a new Ormat energy converter that will add net capacity of 10 MW. Engineering and procurement in ongoing. We expect commercial operation in the first half of 2025.
Topp 2 (New Zealand). We are developing the 50 MW Topp 2 geothermal power plant in New Zealand which was recently released for construction. We signed an agreement with Eastland Generation Limited (EGL), under which the Company will design, build, commission and own the power plant. EGL will operate and maintain the power plant under a separate services arrangement. As part of the development agreement with EGL, the Company has granted EGL a contractual option to purchase the power plant at an agreed purchase price, subject to certain conditions. We expect commercial operation by the end of 2025.
In addition, we are in the process of repowering the Ormesa, Neal Hot Springs, Puna and Desert Peak power plants. In the Energy Storage segment, we commenced operation of five assets since the beginning of the year and we are in the process of constructing several facilities as detailed below, two of which recently were released:
| Project Name |
Size |
Location |
Customer |
Expected COD |
| East Flemington |
20MW/20MWh |
NJ |
PJM |
Q1 2024 |
| Bottleneck |
80MW/320MWh |
CA |
CAISO |
Q2 2024 |
| Montague |
20MW/20MWh |
NJ |
PJM |
Q4 2024 |
| Lower Rio |
60MW/120MWh |
TX |
ERCOT |
H1 2025 |
| Arrowleaf |
35MW/140MWh |
CA |
SDCP |
H1 2025 |
| Bird Dog |
60MW/120MWh |
CA |
SDCP |
H2 2025 |
The following is an overview of projects that are in the initial stages of construction:
Carson Lake Project. We plan to develop between 10 MW to 15 MW at the Carson Lake project on BLM leases located in Churchill County, Nevada. We signed a Small Generator Interconnection Agreement with NV Energy in December 2017. As of September 30, 2023, we are planning to begin the drilling activity next year.
We have budgeted approximately $537.0 million in capital expenditures for construction of new projects and enhancements to our existing power plants, of which we had invested $265.0 million as of September 30, 2023. We expect to invest approximately $35.0 million in the rest of 2023 and the remaining approximately $237.0 million thereafter.
In addition, we estimate approximately $75.0 million in additional capital expenditures in 2023 to be allocated as follows: (i) approximately $20.0 million for the exploration, drilling and development of new projects and enhancements of existing power plants that are not yet released for full construction; (ii) approximately $15.0 million for maintenance capital expenditures for our operating power plants; (iii) approximately $35.0 million for the construction and development of energy storage projects; and (iv) approximately $5.0 million for enhancements to our production facilities.
In the aggregate, we estimate our total capital expenditures for the last quarter of 2023 to be approximately $110.0 million.
Exposure to Market Risks
Based on current conditions, we believe that we have sufficient financial resources to fund our activities and execute our business plans. However, the cost of obtaining financing for our project needs may increase significantly or such financing may be difficult to obtain.
We, like other power plant operators, are exposed to electricity price volatility risk. Our exposure to such market risk is currently limited because the majority of our long-term PPAs have fixed or escalating rate provisions that limit our exposure to changes in electricity prices. Our energy storage projects sell primarily on a "merchant" basis and are exposed to changes in the electricity market prices.
The energy payments under the PPAs of the Heber 2 power plant in the Heber Complex were determined by reference to the relevant power purchaser’s short run avoided cost until the end of 2022. A decline in the price of natural gas would have resulted in a decrease in the incremental cost that the power purchaser avoided by not generating its electrical energy needs from natural gas, or by reducing the price of purchasing its electrical energy needs from a natural gas power plant, which in turn, would have reduced the energy payments that we may have charged under the relevant PPA for this power plant. The Puna Complex is currently benefiting from energy prices which are higher than the floor under the 25 MW PPA for the Puna Complex. For the Heber 2 power plant, we signed a new PPA and for Puna, we are waiting for PUC approval for a new PPA with a fixed energy rate, as discussed above.
As of September 30, 2023, following the full prepayment of the Plumstriker and Amatitlan loans in April and September of 2023, respectively, 100.0% of our consolidated long-term debt was at a fixed rate, and therefore was not subject to interest rate volatility risk.
Our cash equivalents are subject to interest rate risk. We currently maintain our surplus cash in short-term, interest-bearing bank deposits, money market funds, corporate bonds and debt securities available for sale (with a minimum investment grade rating of A+ by Standard & Poor’s Ratings Services).
We are also exposed to foreign currency exchange risk, in particular the fluctuation of the U.S. dollar versus the New Israeli Shekels ("NIS") in Israel and the Euro. Risks attributable to fluctuations in currency exchange rates can arise when we or any of our foreign subsidiaries borrow funds or incur operating or other expenses in one type of currency but receive revenues in another. In such cases, an adverse change in exchange rates can reduce such subsidiary’s ability to meet its debt service obligations, reduce the amount of cash and income we receive from such foreign subsidiary, or increase such subsidiary’s overall expenses. In Kenya, the tax asset is recorded in Kenyan Shillings ("KES") similar to the tax liability, however any change in the exchange rate in the KES versus the U.S. dollar has an impact on our financial results. Risks attributable to fluctuations in foreign currency exchange rates can also arise when the currency denomination of a particular contract is not the U.S. dollar. Substantially all of our PPAs in the international markets are either U.S. dollar-denominated or linked to the U.S. dollar except for our operations on Guadeloupe, where we own and operate the Boulliante power plant which sells its power under a Euro-denominated PPA with Électricité de France S.A. Our construction contracts from time to time contemplate costs which are incurred in local currencies. The way we often mitigate such risk is to receive part of the proceeds from the contract in the currency in which the expenses are incurred. Currently, we have forward and cross-currency swap contracts in place to reduce our NIS/U.S. dollar currency exposure and expect to continue to use currency exchange and other derivative instruments to the extent we deem such instruments to be the appropriate tool for managing such exposure.
On July 1, 2020, we concluded an auction tender and accepted subscriptions for senior unsecured bonds comprised of NIS 1.0 billion aggregate principal amount (the “Senior Unsecured Bonds - Series 4”). The Senior Unsecured Bonds - Series 4 were issued in New Israeli Shekels and converted to approximately $290 million using a cross-currency swap transaction shortly after the completion of such issuance.
In June 2022, we issued $431.3 million aggregate principal amount of our 2.5% convertible senior notes due in 2027. The Notes bear annual interest of 2.5%, payable semiannually in arrears, and mature on July 15, 2027, unless earlier converted, redeemed or repurchased.
We performed a sensitivity analysis on the fair values of our long-term debt obligations, and foreign currency exchange forward contracts. The foreign currency exchange forward contracts listed below principally relate to trading activities. The sensitivity analysis involved increasing and decreasing forward rates at September 30, 2023 and December 31, 2022 by a hypothetical 10% and calculating the resulting change in the fair values.
At this time, the development of our strategic plan has not exposed us to any additional market risk. However, as the implementation of the plan progresses, we may be exposed to additional or different market risks.
The results of the sensitivity analysis calculations as of September 30, 2023 and December 31, 2022 are presented below:
| Assuming a 10% Increase in Rates |
Assuming a 10% Decrease in Rates |
||||||||||||||||
| Risk |
September 30, 2023 |
December 31, 2022 |
September 30, 2023 |
December 31, 2022 |
Change in the Fair Value of |
||||||||||||
| (Dollars in thousands) |
|||||||||||||||||
| Foreign Currency |
$ | (3,947 | ) | $ | (5,093 | ) | $ | 4,824 | $ | 6,220 | Foreign Currency Forward Contracts |
||||||
| Interest Rate |
(938 | ) | (946 | ) | 959 | 965 | Mizrahi Loan |
||||||||||
| Interest Rate |
(1,261 | ) | (1,493 | ) | 1,293 | 1,531 | Hapoalim Loan |
||||||||||
| Interest Rate |
(2,306 | ) | — | 2,393 | — | Hapoalim Loan 2023 |
|||||||||||
| Interest Rate |
(634 | ) | (631 | ) | 652 | 648 | HSBC Loan |
||||||||||
| Interest Rate |
(1,219 | ) | (1,378 | ) | 1,253 | 1,416 | Discount Loan |
||||||||||
| Interest Rate |
(3,708 | ) | (4,096 | ) | 3,841 | 4,232 | Financing Liability |
||||||||||
| Interest Rate |
(3,465 | ) | (3,693 | ) | 3,601 | 3,832 | OFC 2 Senior Secured Notes |
||||||||||
| Interest Rate |
(2,811 | ) | (3,178 | ) | 2,915 | 3,295 | DFC Loan |
||||||||||
| Interest Rate |
— | (259 | ) | — | 268 | Amatitlan Loan |
|||||||||||
| Interest Rate |
(4,792 | ) | (5,701 | ) | 4,984 | 5,925 | Senior Unsecured Bonds |
||||||||||
| Interest Rate |
(436 | ) | (527 | ) | 450 | 544 | DEG 2 Loan |
||||||||||
| Interest Rate |
(1,447 | ) | (1,528 | ) | 1,515 | 1,597 | DAC 1 Senior Secured Notes |
||||||||||
| Interest Rate |
(3,574 | ) | (3,902 | ) | 3,706 | 4,045 | Migdal Loan and the Additional Migdal Loan and the Second Addendum Migdal Loan |
||||||||||
| Interest Rate |
(952 | ) | (986 | ) | 1,016 | 1,051 | San Emidio Loan |
||||||||||
| Interest Rate |
(732 | ) | (748 | ) | 762 | 775 | DOE Loan |
||||||||||
| Interest Rate |
(2,319 | ) | (2,430 | ) | 2,492 | 2,606 | Idaho Holdings Loan |
||||||||||
| Interest Rate | (2,015 | ) | (2,198 | ) | 2,104 | 2,293 | Platanares DFC Loan |
||||||||||
| Interest Rate | (362 | ) | (435 | ) | 372 | 448 | DEG 3 Loan |
||||||||||
| Interest Rate |
— | (155 | ) | — | 158 | Plumstriker Loan |
|||||||||||
| Interest Rate | (69 | ) | (96 | ) | 70 | 97 | Other long-term loans |
||||||||||
Effect of Inflation
We have experienced an increase in overall operating and other costs since early 2022 as the result of higher inflation rates, in particular in the United States. In addition, we are experiencing increases in raw material cost and supply chain delays, which may put pressure on our operating margins in the Product segment and increase our cost to build our own power plants and energy storage assets. To address the possibility of rising inflation, some of our contracts include certain provisions that mitigate inflation risk.
In connection with the Electricity segment, none of our U.S. PPAs, including the SCPPA Portfolio PPA, are directly linked to the Consumer Price Index ("CPI"). Inflation may directly impact an expense we incur for the operation of our projects, thereby increasing our overall operating costs and reducing our profit and gross margin. The negative impact of inflation would be partially offset by price adjustments built into some of our PPAs that could be triggered upon such occurrences. In addition to part of the Puna rates that are impacted by higher commodity prices, the energy payments pursuant to our PPAs for some of our power plants such as the Brady power plant, the Steamboat 2 and 3 power plants and the McGinness Complex increase every year through the end of the relevant terms of such agreements, although such increases are not directly linked to the CPI or any other inflationary index. Lease payments are generally fixed, while royalty payments are generally calculated as a percentage of revenues and therefore are not significantly impacted by inflation. In our Product segment, inflation may directly impact fixed and variable costs incurred in the construction of third party power plants, thereby lowering our profit margins at the Product segment. We are more likely to be able to offset long term, all or part of this inflationary impact through our project pricing. With respect to power plants that we build for our own electricity production, inflationary pricing may impact our operating costs which may be partially offset in the pricing of the new long-term PPAs that we negotiate.
Interest rate increases for both short-term and long-term debt have increased sharply. Although our outstanding debt mostly bears fixed interest rates, as we refinance it, or borrow additional amounts, we may incur additional interest expense versus expiring loans.
Contractual Obligations and Commercial Commitments
We have various contractual obligations, which are recorded as liabilities in our consolidated condensed financial statements. Other items are not recognized as liabilities in our consolidated condensed financial statements but are required to be disclosed. There have been no material changes, outside of the ordinary course of business, to our contractual obligations as previously disclosed in our 2022 Annual Report.
Concentration of Credit Risk
Our credit risk is currently concentrated with the following major customers: Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy), SCPPA and KPLC. If any of these electric utilities fail to make payments under its PPAs with us, such failure would have a material adverse impact on our financial condition. Also, as we implement our multi-year strategic plan we may be exposed, by expanding our customer base, to different credit profile customers than our current customers.
The Company's revenues from its primary customers as a percentage of total revenues are as follows:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Sierra Pacific Power Company and Nevada Power Company |
14.0 | % | 14.0 | % | 16.5 | % | 17.1 | % | ||||||||
| Southern California Public Power Authority (“SCPPA”) |
18.7 | % | 18.7 | % | 22.0 | % | 21.4 | % | ||||||||
| Kenya Power and Lighting Co. Ltd. ("KPLC") |
13.1 | % | 15.2 | % | 14.0 | % | 14.9 | % | ||||||||
We have historically been able to collect on substantially all of our receivable balances. As of September 30, 2023, the amount overdue from KPLC in Kenya was $50.6 million of which $0.5 million was paid in October 2023. In Honduras, as of September 30, 2023, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $10.0 million of which $0.7 million was paid in October 2023. In addition, due to the financial situation in Honduras, the Company may experience further delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.
Government Grants and Tax Benefits
A comprehensive discussion on government grants and tax benefits is included in our 2022 Annual Report. There has been some change to the comprehensive discussion as noted below.
On August 16, 2022, the President of the United States signed into law the Inflation Reduction Act of 2022, which is effective for taxable years beginning after December 31, 2022. Additional information in respect of the Inflation Reduction Act is detailed under Note 1 and 10 to the condensed consolidated financial statements in this report.
Ormat Systems received “Benefited Enterprise” status under Israel’s Law for Encouragement of Capital Investments, 1959 (the Investment Law), with respect to two of its investment programs through 2011. In January 2011, new legislation amending the Investment Law was enacted. Under the new legislation, a uniform rate of corporate tax will apply to all qualified income of certain industrial companies, as opposed to the previous law’s incentives that are limited to income from a “Benefited Enterprise” during their benefits period. As a result, we now pay a uniform corporate tax rate of 16% with respect to that qualified income. In March 2023, Ormat Systems received an approval from the Israeli Innovation Authority that it owns an "Innovation Promoting Enterprise" and therefore is eligible for a reduced corporate tax rate of 12% on its "Preferred Technological Income" for the tax years 2021 through 2023 (effective tax rate of approximately 13% for 2021 through 2023). The tax benefit of lower effective tax rate is reflected in the 2023 net income.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information appearing under the headings “Exposure to Market Risks” and “Concentration of Credit Risk” in Part I, Item 2 of this quarterly report on Form 10-Q is incorporated by reference herein.
ITEM 4. CONTROLS AND PROCEDURES
a. Evaluation of disclosure controls and procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO (principal executive officer) and CFO (principal financial officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(e) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of our disclosure controls and procedures as of September 30, 2023. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2023 to provide the reasonable assurance described above.
b. Changes in internal control over financial reporting
There were no changes in our internal controls over financial reporting in the third quarter of 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
The information required with respect to this item can be found under “Commitments and Contingencies” in Note 9 of notes to the unaudited condensed consolidated financial statements contained in this quarterly report and is incorporated by reference into this Item 1.
A comprehensive discussion of our other risk factors is included in the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2022 which was filed with the SEC on February 24, 2023. The risks described in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. During the period covered by this quarterly report on Form 10-Q, there have been no material changes in our risk factors as previously disclosed except the following:
Conditions in Israel, where the majority of our senior management and our main production and manufacturing facilities are located, including the ongoing war with Hamas, may adversely affect our operations and may limit our ability to produce and sell our products.
We are a multinational company and do not derive the majority of our revenues from Israel, however, the majority of our senior management and our main production and manufacturing facilities are located in Israel, approximately 26 miles from the border with the Gaza Strip. As such, political, economic and security conditions in Israel and the Middle East region directly affect our operations.
On October 7, 2023, Hamas terrorists and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, including widespread killings and kidnappings. They also launched extensive rocket attacks on the Israeli civilian population. Shortly following the attack, Israel declared war against Hamas, and several hundred thousand Israeli reservists were drafted to perform immediate military service.
The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are its economic implications on the Company’s business and operations in Israel and on Israel’s economy in general. As of the date of this report, approximately ten percent of our workforce in Israel (approximately four percent of our total global workforce), the vast majority of whom work in our Product segment, have been called up for military service, and may be absent for an extended period. Operations in our Product segment (which accounted for approximately 9.6% of our total revenues and $83.4 million in intersegment revenues for first 9 months of 2023), may be disrupted by such absences, thus materially and adversely affecting our business and operating results. Clashes between Israel and Hezbollah around the Lebanon-Israel border are also ongoing and may escalate in the future into a greater regional conflict.
Our facilities in Israel, as well as the Port of Ashdod via which we receive supplies for and ship products for our Product segment, are within the range of rockets fired from the Gaza Strip in the war and are close to Gaza’s coastline, and some rockets have landed near our facilities in the ongoing war. The war has also increased the cost of insurance premiums for shipments into and out of the port. In anticipation of possible operational delays in our Product segment, we have issued force majeure notices preemptively to several customers. If, due to the current war or future similar hostilities, our facilities in Israel are damaged or their operations disrupted, or our access to the Port of Ashdod (or alternative ports at Hifa or Eilat) is impaired, our ability to perform on our contractual obligations to our Product segment customers or to continue growing that business could be impacted. The conflict could additionally result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. Limitations on travel to Israel from abroad could make it harder for us to secure contracts in the Product segment with new business partners. We have shelter-in-place and work-from-home measures, government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict and which may temporarily disrupt our management and employees’ ability to effectively perform their daily tasks. All of the foregoing factors could negatively affect operations within our Product segment or delay growth in our Electricity segment.
Finally, political conditions within Israel affect our operations. Israel has held five general elections in the last four years (twice in 2019, once in 2020, once in 2021 and once in 2022), and in late July 2023, after months of public protest, Israel’s governing coalition voted in favor of the adoption of one of its proposed reforms to the judicial system, and the Supreme Court announced that it would hear challenges against the proposed law. Individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that Israeli’s political instability may negatively impact the business environment there, including due to reluctance of foreign investors to invest or conduct business in Israel, increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, adverse impacts on the labor market, and other related changes in macroeconomic conditions. We cannot be certain whether this will adversely impact perception of our business and our share price, or impact our business operations in Israel.
Responses in various countries where we have business operations to Israel’s ongoing war with Hamas or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products.
Although we are a multinational company and we do not derive a majority of our revenues from Israel, we have known ties to Israel through the presence of our senior management and a significant portion of our Product segment there. The perception that we are an Israeli company could impair our business and results of operations due to the international response to Israel’s ongoing war with Hamas or future similar conflicts. Our business could be substantially harmed by the interruption or curtailment of trade between Israel and its trading partners or the use of restrictive laws, policies or practices directed toward Israel or companies having operations in Israel. These restrictions may limit materially our ability to obtain raw materials from these countries or to sell our products to companies and customers in these countries. Deterioration in political relations between Israel and other countries, and/or violence from popular movements or terrorist activities in countries where we do business motivated by anti-Israel sentiment, such as Turkey or Indonesia, could impact our ability to secure new contracts, renew existing contracts and/or carry on business in those countries. Moreover, there have been increased efforts by activists to cause companies and consumers to boycott Israeli companies. Such efforts, particularly if they become more widespread, may materially and adversely impact our ability to sell our products outside of Israel.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
(a) None.
(b) None
(c) During the fiscal quarter ended September 30, 2023, of our directors or officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
We hereby file, as exhibits to this quarterly report, those exhibits listed on the Exhibit Index below.
EXHIBIT INDEX
| Exhibit No. |
Document |
| 31.1* |
|
| 31.2* |
|
| 32.1# |
|
| 32.2# |
|
| 101.SC* |
Inline XBRL Taxonomy Extension Schema Document. |
| 101.CA* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DE* |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LA* |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PR* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 |
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101) |
| * |
Filed herewith |
| # |
Furnished herewith. |
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.
| ORMAT TECHNOLOGIES, INC. |
|||
| By: |
/s/ ASSAF GINZBURG |
||
| Name: |
Assaf Ginzburg |
||
| Title: |
Chief Financial Officer and Authorized Signatory |
||
Date: November 9, 2023
Exhibit 31.1
Ormat Technologies, Inc.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Doron Blachar, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2023 of Ormat Technologies, Inc.;
2. 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;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined 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 financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness 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 financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial 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 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: |
/s/ DORON BLACHAR |
|
|
Doron Blachar |
||
| Chief Executive Officer |
Date: November 9, 2023
Exhibit 31.2
Ormat Technologies, Inc.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Assaf Ginzburg, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2023 of Ormat Technologies, Inc.;
2. 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;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined 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 financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness 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 financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial 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 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: |
/s/ ASSAF GINZBURG |
|
|
Assaf Ginzburg |
||
| Chief Financial Officer |
Date: November 9, 2023
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Doron Blachar, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Ormat Technologies, Inc. on Form 10-Q for the quarter ended September 30, 2023 (i) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and (ii) that information contained in such quarterly report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ormat Technologies, Inc. This written statement is being furnished to the Securities and Exchange Commission as an exhibit accompanying such quarterly report and shall not be deemed filed pursuant to the Exchange Act.
|
By: |
/s/ DORON BLACHAR |
||
|
Name: Doron Blachar |
|||
|
Title: Chief Executive Officer |
Date: November 9, 2023
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Assaf Ginzburg, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Ormat Technologies, Inc. on Form 10-Q for the quarter ended September 30, 2023 (i) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and (ii) that information contained in such quarterly report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ormat Technologies, Inc. This written statement is being furnished to the Securities and Exchange Commission as an exhibit accompanying such quarterly report and shall not be deemed filed pursuant to the Exchange Act.
|
By: |
/s/ ASSAF GINZBURG |
||
|
Name: Assaf Ginzburg |
|||
| Title: Chief Financial Officer |
Date: November 9, 2023
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Trade, allowance for credit losses | $ 90 | $ 90 |
| Property, plant and equipment, net | 2,883,130 | 2,493,457 |
| Construction-in-process | 841,536 | 893,198 |
| Operating leases right of use | 23,895 | 23,411 |
| Finance leases right of use | $ 3,901 | $ 3,806 |
| Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
| Common stock, shares issued (in shares) | 60,354,082 | 56,095,918 |
| Common stock, shares outstanding (in shares) | 60,354,082 | 56,095,918 |
| Treasury stock, shares (in shares) | 258,667 | 258,667 |
| Senior Secured Notes [Member] | ||
| Deferred financing costs | $ 8,045 | $ 10,272 |
| Senior Unsecured Bonds [Member] | ||
| Deferred financing costs | 3,177 | 2,995 |
| Convertible Senior Notes [Member] | ||
| Deferred financing costs | 8,728 | 10,445 |
| Variable Interest Entity, Primary Beneficiary [Member] | ||
| Property, plant and equipment, net | 2,688,443 | 2,326,491 |
| Construction-in-process | 407,600 | 360,508 |
| Operating leases right of use | 9,512 | 9,662 |
| Finance leases right of use | $ 10 | $ 75 |
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Revenues: | ||||
| Revenue | $ 208,056 | $ 175,885 | $ 588,084 | $ 528,673 |
| Cost of revenues: | ||||
| Cost of revenues | 148,053 | 114,777 | 402,522 | 340,059 |
| Gross profit | 60,003 | 61,108 | 185,562 | 188,614 |
| Operating expenses: | ||||
| Research and development expenses | 1,392 | 1,238 | 4,763 | 3,690 |
| Selling and marketing expenses | 4,682 | 4,093 | 13,999 | 12,410 |
| General and administrative expenses | 14,044 | 16,057 | 49,525 | 47,155 |
| Write-off of Energy Storage project assets and unsuccessful exploration activities | 2,318 | 827 | 2,318 | 2,781 |
| Operating income | 37,567 | 38,893 | 114,957 | 122,578 |
| Other income (expense): | ||||
| Interest income | 2,827 | 1,659 | 9,620 | 2,180 |
| Interest expense, net | (25,054) | (22,403) | (73,078) | (63,902) |
| Derivatives and foreign currency transaction gains (losses) | (781) | (293) | (3,990) | (4,031) |
| Income attributable to sale of tax benefits | 14,936 | 9,113 | 42,481 | 26,345 |
| Other non-operating income (expense), net | 108 | 673 | 247 | (512) |
| Income from operations before income tax and equity in earnings of investees | 29,603 | 27,642 | 90,237 | 82,658 |
| Income tax (provision) benefit | 7,134 | (7,227) | 2,205 | (23,520) |
| Equity in losses (earnings) of investees | (405) | (589) | 1,862 | (1,574) |
| Net income | 36,332 | 19,826 | 94,304 | 57,564 |
| Net income attributable to noncontrolling interest | (879) | (1,716) | (5,631) | (9,764) |
| Net income attributable to the Company's stockholders | 35,453 | 18,110 | 88,673 | 47,800 |
| Comprehensive income: | ||||
| Net income | 36,332 | 19,826 | 94,304 | 57,564 |
| Other comprehensive income (loss), net of related taxes: | ||||
| Change in foreign currency translation adjustments | (1,220) | (3,824) | (1,523) | (8,439) |
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 673 | 2,916 | 1,063 | 8,361 |
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | (4,749) | (217) | (7,675) | (4,217) |
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | (1) | 0 | 40 |
| Other changes in comprehensive income | 12 | 15 | 40 | 45 |
| Total other comprehensive income (loss), net of related taxes: | (5,284) | (1,111) | (8,095) | (4,210) |
| Comprehensive income | 31,048 | 18,715 | 86,209 | 53,354 |
| Comprehensive income attributable to noncontrolling interest | (655) | (934) | (5,266) | (7,840) |
| Comprehensive income attributable to the Company's stockholders | $ 30,393 | $ 17,781 | $ 80,943 | $ 45,514 |
| Earnings per share attributable to the Company's stockholders: | ||||
| Basic: (in dollars per share) | $ 0.59 | $ 0.32 | $ 1.5 | $ 0.85 |
| Diluted: (in dollars per share) | $ 0.59 | $ 0.32 | $ 1.49 | $ 0.85 |
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: | ||||
| Basic (in shares) | 60,299 | 55,999 | 59,105 | 56,058 |
| Diluted (in shares) | 60,570 | 56,457 | 59,494 | 56,479 |
| Electricity [Member] | ||||
| Revenues: | ||||
| Revenue | $ 157,212 | $ 152,820 | $ 482,846 | $ 466,540 |
| Cost of revenues: | ||||
| Cost of revenues | 107,166 | 97,053 | 311,348 | 287,091 |
| Product [Member] | ||||
| Revenues: | ||||
| Revenue | 39,831 | 14,217 | 83,331 | 39,237 |
| Cost of revenues: | ||||
| Cost of revenues | 32,393 | 11,664 | 71,729 | 35,644 |
| Energy Storage and Management Services [Member] | ||||
| Revenues: | ||||
| Revenue | 11,013 | 8,848 | 21,907 | 22,896 |
| Cost of revenues: | ||||
| Cost of revenues | $ 8,494 | $ 6,060 | $ 19,445 | $ 17,324 |
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
Cross Currency Interest Rate Contract [Member]
Common Stock [Member]
|
Cross Currency Interest Rate Contract [Member]
Additional Paid-in Capital [Member]
|
Cross Currency Interest Rate Contract [Member]
Treasury Stock, Common [Member]
|
Cross Currency Interest Rate Contract [Member]
Retained Earnings [Member]
|
Cross Currency Interest Rate Contract [Member]
AOCI Attributable to Parent [Member]
|
Cross Currency Interest Rate Contract [Member]
Parent [Member]
|
Cross Currency Interest Rate Contract [Member]
Noncontrolling Interest [Member]
|
Cross Currency Interest Rate Contract [Member] |
Common Stock Outstanding [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Treasury Stock, Common [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Parent [Member] |
Noncontrolling Interest [Member] |
Total |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance (in shares) at Dec. 31, 2021 | 56,056 | ||||||||||||||||||
| Balance at Dec. 31, 2021 | $ 56 | $ 1,271,925 | $ 0 | $ 585,209 | $ (2,191) | $ 1,854,999 | $ 143,462 | $ 1,998,461 | |||||||||||
| Stock-based compensation | 0 | 2,814 | 0 | 0 | 0 | 2,814 | 0 | 2,814 | |||||||||||
| Exercise of stock-based awards by employees and directors (*) (in shares) | [1] | 16 | |||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | [1] | 0 | 99 | 0 | 0 | 0 | 99 | 0 | 99 | ||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (3,088) | (3,088) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (6,727) | 0 | (6,727) | 0 | (6,727) | |||||||||||
| Net income | 0 | 0 | 0 | 18,430 | 0 | 18,430 | 4,105 | 22,535 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | (857) | (857) | (299) | (1,156) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 3,902 | 3,902 | 0 | 3,902 | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | $ 0 | $ 0 | $ 0 | $ 0 | $ (1,905) | $ (1,905) | $ 0 | $ (1,905) | |||||||||||
| Other | 0 | 0 | 0 | 0 | 15 | 15 | 0 | 15 | |||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | 0 | 0 | 0 | (101) | (101) | 0 | (101) | |||||||||||
| Net income | 0 | 0 | 0 | 18,430 | 0 | 18,430 | 4,105 | 22,535 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | (857) | (857) | (299) | (1,156) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 3,902 | 3,902 | 0 | 3,902 | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (1,905) | (1,905) | 0 | (1,905) | |||||||||||
| Balance (in shares) at Mar. 31, 2022 | 56,072 | ||||||||||||||||||
| Balance at Mar. 31, 2022 | 56 | 1,274,838 | 0 | 596,912 | (1,137) | 1,870,669 | 144,180 | 2,014,849 | |||||||||||
| Balance (in shares) at Dec. 31, 2021 | 56,056 | ||||||||||||||||||
| Balance at Dec. 31, 2021 | 56 | 1,271,925 | 0 | 585,209 | (2,191) | 1,854,999 | 143,462 | 1,998,461 | |||||||||||
| Change in foreign currency translation adjustments | (8,439) | ||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 8,361 | ||||||||||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | (4,217) | ||||||||||||||||||
| Other | 45 | ||||||||||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 40 | ||||||||||||||||||
| Currency translation adjustment | (8,439) | ||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 8,361 | ||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | (4,217) | ||||||||||||||||||
| Balance (in shares) at Sep. 30, 2022 | 56,048 | ||||||||||||||||||
| Balance at Sep. 30, 2022 | 56 | 1,256,058 | (17,964) | 612,832 | (4,477) | 1,846,505 | 145,771 | 1,992,276 | |||||||||||
| Balance (in shares) at Mar. 31, 2022 | 56,072 | ||||||||||||||||||
| Balance at Mar. 31, 2022 | 56 | 1,274,838 | 0 | 596,912 | (1,137) | 1,870,669 | 144,180 | 2,014,849 | |||||||||||
| Stock-based compensation | 0 | 2,999 | 0 | 0 | 0 | 2,999 | 0 | 2,999 | |||||||||||
| Exercise of stock-based awards by employees and directors (*) (in shares) | 121 | ||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | 0 | (57) | 0 | 0 | 0 | (57) | 0 | (57) | |||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (140) | (140) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (6,731) | 0 | (6,731) | 0 | (6,731) | |||||||||||
| Net income | 0 | 0 | 0 | 11,260 | 0 | 11,260 | 3,470 | 14,730 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | (2,616) | (2,616) | (843) | (3,459) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 1,543 | 1,543 | 0 | 1,543 | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | 0 | 0 | 0 | 0 | (2,095) | (2,095) | 0 | (2,095) | |||||||||||
| Other | 0 | 0 | 0 | 0 | 15 | 15 | 0 | 15 | |||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | 0 | 0 | 0 | 142 | 142 | 0 | 142 | |||||||||||
| Purchase of treasury stock (in shares) | (259) | ||||||||||||||||||
| Purchase of treasury stock | 0 | 0 | (17,964) | 0 | 0 | (17,964) | 0 | (17,964) | |||||||||||
| Purchase of capped call instruments | 0 | (24,538) | 0 | 0 | 0 | (24,538) | 0 | (24,538) | |||||||||||
| Net income | 0 | 0 | 0 | 11,260 | 0 | 11,260 | 3,470 | 14,730 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | (2,616) | (2,616) | (843) | (3,459) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 1,543 | 1,543 | 0 | 1,543 | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | $ 0 | $ 0 | $ 0 | $ 0 | $ (2,095) | $ (2,095) | $ 0 | $ (2,095) | |||||||||||
| Balance (in shares) at Jun. 30, 2022 | 55,934 | ||||||||||||||||||
| Balance at Jun. 30, 2022 | 56 | 1,253,242 | (17,964) | 601,441 | (4,148) | 1,832,627 | 146,667 | 1,979,294 | |||||||||||
| Stock-based compensation | 0 | 2,816 | 0 | 0 | 0 | 2,816 | 0 | 2,816 | |||||||||||
| Exercise of stock-based awards by employees and directors (*) (in shares) | 114 | ||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (1,645) | (1,645) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (6,719) | 0 | (6,719) | 0 | (6,719) | |||||||||||
| Net income | 0 | 0 | 0 | 18,110 | 0 | 18,110 | 1,531 | 19,641 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | (3,042) | (3,042) | (782) | (3,824) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 2,916 | 2,916 | 0 | 2,916 | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | 0 | 0 | 0 | 0 | (217) | (217) | 0 | (217) | |||||||||||
| Other | 0 | 0 | 0 | 0 | 15 | 15 | 0 | 15 | |||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | 0 | 0 | (1) | (1) | 0 | (1) | ||||||||||||
| Net income | 0 | 0 | 0 | 18,110 | 0 | 18,110 | 1,531 | 19,641 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | (3,042) | (3,042) | (782) | (3,824) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 2,916 | 2,916 | 0 | 2,916 | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (217) | (217) | 0 | (217) | |||||||||||
| Balance (in shares) at Sep. 30, 2022 | 56,048 | ||||||||||||||||||
| Balance at Sep. 30, 2022 | 56 | 1,256,058 | (17,964) | 612,832 | (4,477) | 1,846,505 | 145,771 | 1,992,276 | |||||||||||
| Balance (in shares) at Dec. 31, 2022 | 56,096 | ||||||||||||||||||
| Balance at Dec. 31, 2022 | 56 | 1,259,072 | (17,964) | 623,907 | 2,500 | 1,867,571 | 153,404 | 2,020,975 | |||||||||||
| Stock-based compensation | 0 | 2,990 | 0 | 0 | 0 | 2,990 | 0 | 2,990 | |||||||||||
| Exercise of stock-based awards by employees and directors (*) | 0 | 27 | 0 | 0 | 0 | 27 | 0 | 27 | |||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (2,360) | (2,360) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (6,732) | 0 | (6,732) | 0 | (6,732) | |||||||||||
| Net income | 0 | 0 | 0 | 29,029 | 0 | 29,029 | 4,235 | 33,264 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | (306) | (306) | (390) | (696) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (1,014) | (1,014) | 0 | (1,014) | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | 0 | 0 | 0 | 0 | (5,403) | (5,403) | 0 | (5,403) | |||||||||||
| Other | 0 | 0 | 0 | 0 | 14 | 14 | 0 | 14 | |||||||||||
| Net income | 0 | 0 | 0 | 29,029 | 0 | 29,029 | 4,235 | 33,264 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | (306) | (306) | (390) | (696) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (1,014) | (1,014) | 0 | (1,014) | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (5,403) | (5,403) | 0 | (5,403) | |||||||||||
| Issuance of common stock (in shares) | 3,600 | ||||||||||||||||||
| Issuance of common stock | 4 | 297,117 | 0 | 0 | 0 | 297,121 | 0 | 297,121 | |||||||||||
| Change in noncontrolling interest rights | 0 | 1,239 | 0 | 0 | 0 | 1,239 | (2,396) | (1,157) | |||||||||||
| Stock issuance costs reimbursement | 4 | 297,117 | 0 | 0 | 0 | 297,121 | 0 | 297,121 | |||||||||||
| Balance (in shares) at Mar. 31, 2023 | 59,696 | ||||||||||||||||||
| Balance at Mar. 31, 2023 | 60 | 1,560,445 | (17,964) | 646,204 | (4,209) | 2,184,536 | 152,493 | 2,337,029 | |||||||||||
| Balance (in shares) at Dec. 31, 2022 | 56,096 | ||||||||||||||||||
| Balance at Dec. 31, 2022 | 56 | 1,259,072 | (17,964) | 623,907 | 2,500 | 1,867,571 | 153,404 | 2,020,975 | |||||||||||
| Change in foreign currency translation adjustments | (1,523) | ||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 1,063 | ||||||||||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | (7,675) | ||||||||||||||||||
| Other | 40 | ||||||||||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | ||||||||||||||||||
| Currency translation adjustment | (1,523) | ||||||||||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 1,063 | ||||||||||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | (7,675) | ||||||||||||||||||
| Balance (in shares) at Sep. 30, 2023 | 60,354 | ||||||||||||||||||
| Balance at Sep. 30, 2023 | 60 | 1,610,577 | (17,964) | 691,391 | (5,230) | 2,278,834 | 126,194 | 2,405,028 | |||||||||||
| Balance (in shares) at Mar. 31, 2023 | 59,696 | ||||||||||||||||||
| Balance at Mar. 31, 2023 | 60 | 1,560,445 | (17,964) | 646,204 | (4,209) | 2,184,536 | 152,493 | 2,337,029 | |||||||||||
| Stock-based compensation | 0 | 4,311 | 0 | 0 | 0 | 4,311 | 0 | 4,311 | |||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (135) | (135) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (7,229) | 0 | (7,229) | 0 | (7,229) | |||||||||||
| Net income | 0 | 0 | 0 | 24,191 | 0 | 24,191 | 45 | 24,236 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | 144 | 144 | 249 | 393 | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 1,404 | 1,404 | 0 | 1,404 | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | 0 | 0 | 0 | 0 | 2,477 | 2,477 | 0 | 2,477 | |||||||||||
| Other | 0 | 0 | 0 | 0 | 14 | 14 | 0 | 14 | |||||||||||
| Net income | 0 | 0 | 0 | 24,191 | 0 | 24,191 | 45 | 24,236 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | 144 | 144 | 249 | 393 | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 1,404 | 1,404 | 0 | 1,404 | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 2,477 | 2,477 | 0 | 2,477 | |||||||||||
| Issuance of common stock (in shares) | 540 | ||||||||||||||||||
| Issuance of common stock | 0 | 44,542 | 0 | 0 | 0 | 44,542 | 0 | 44,542 | |||||||||||
| Stock issuance costs reimbursement | 0 | 44,542 | 0 | 0 | 0 | 44,542 | 0 | 44,542 | |||||||||||
| Balance (in shares) at Jun. 30, 2023 | 60,236 | ||||||||||||||||||
| Balance at Jun. 30, 2023 | 60 | 1,609,298 | (17,964) | 663,166 | (170) | 2,254,390 | 152,652 | 2,407,042 | |||||||||||
| Stock-based compensation | 0 | 3,934 | 0 | 0 | 0 | 3,934 | 0 | 3,934 | |||||||||||
| Exercise of stock-based awards by employees and directors (*) (in shares) | 118 | ||||||||||||||||||
| Exercise of stock-based awards by employees and directors (*) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||
| Cash paid to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 0 | (348) | (348) | |||||||||||
| Cash dividend declared | 0 | 0 | 0 | (7,228) | 0 | (7,228) | 0 | (7,228) | |||||||||||
| Net income | 0 | 0 | 0 | 35,453 | 0 | 35,453 | 506 | 35,959 | |||||||||||
| Change in foreign currency translation adjustments | 0 | 0 | 0 | 0 | (996) | (996) | (224) | (1,220) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 673 | 673 | 0 | 673 | |||||||||||
| Change in respect of derivative instruments designated for cash flow hedge | 0 | 0 | 0 | 0 | (4,749) | (4,749) | 0 | (4,749) | |||||||||||
| Other | 0 | 0 | 0 | 0 | 12 | 12 | 0 | 12 | |||||||||||
| Change in unrealized gains or losses on marketable securities available-for-sale (net of related tax) | 0 | ||||||||||||||||||
| Net income | 0 | 0 | 0 | 35,453 | 0 | 35,453 | 506 | 35,959 | |||||||||||
| Currency translation adjustment | 0 | 0 | 0 | 0 | (996) | (996) | (224) | (1,220) | |||||||||||
| Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | 673 | 673 | 0 | 673 | |||||||||||
| Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge | 0 | 0 | 0 | 0 | (4,749) | (4,749) | 0 | (4,749) | |||||||||||
| Issuance of common stock | 0 | 8 | 0 | 0 | 0 | 8 | 0 | 8 | |||||||||||
| Stock issuance costs reimbursement | 0 | 8 | 0 | 0 | 0 | 8 | 0 | 8 | |||||||||||
| Transaction with noncontrolling interest | 0 | (2,663) | 0 | 0 | (2,663) | (26,392) | (29,055) | ||||||||||||
| Balance (in shares) at Sep. 30, 2023 | 60,354 | ||||||||||||||||||
| Balance at Sep. 30, 2023 | $ 60 | $ 1,610,577 | $ (17,964) | $ 691,391 | $ (5,230) | $ 2,278,834 | $ 126,194 | $ 2,405,028 | |||||||||||
| |||||||||||||||||||
Condensed Consolidated Statements of Equity (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | ||
|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
| Retained Earnings [Member] | |||
| Cash dividend declared, per share (in dollars per share) | $ 0.12 | $ 0.12 | |
| Cash dividend declared, per share (in dollars per share) | $ 0.12 | ||
| Change in respect of derivative instruments designated for cash flow hedge, tax | $ 0 | ||
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Cash flows from operating activities: | ||
| Net income | $ 94,304 | $ 57,564 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 164,905 | 147,458 |
| Accretion of asset retirement obligation | 4,644 | 3,920 |
| Stock-based compensation | 11,235 | 8,629 |
| Income attributable to sale of tax benefits, net of interest expense | (23,896) | (16,679) |
| Equity in losses (earnings) of investees | (1,862) | 1,574 |
| Mark-to-market of derivative instruments | 284 | 2,677 |
| Disposal of property, plant and equipment | 35 | (84) |
| Write-off of Energy Storage project assets and unsuccessful exploration activities | 2,318 | 2,781 |
| Loss on severance pay fund asset | 525 | 951 |
| Loss from prepayment of a long-term loan | 0 | 1,102 |
| Deferred income tax provision | (26,426) | 2,269 |
| Liability for unrecognized tax benefits | 79 | 842 |
| Other | 0 | 575 |
| Changes in operating assets and liabilities, net of businesses acquired: | ||
| Receivables | (48,805) | 3,617 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | (9,361) | (7,662) |
| Inventories | (22,012) | (1,360) |
| Prepaid expenses and other | (11,702) | (2,399) |
| Change in operating lease right of use asset | 2,874 | 2,119 |
| Deposits and other | (8,028) | 1,362 |
| Accounts payable and accrued expenses | 32,774 | (1,089) |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 1,834 | 4,786 |
| Liabilities for severance pay | (1,742) | (2,093) |
| Change in operating lease liabilities | (2,497) | (2,072) |
| Other long-term liabilities | 10,776 | (2,541) |
| Net cash provided by operating activities | 170,256 | 206,247 |
| Cash flows from investing activities: | ||
| Purchase of marketable securities | 0 | (19,192) |
| Maturities of marketable securities | 0 | 32,645 |
| Sale of marketable securities | 0 | 29,355 |
| Capital expenditures | (448,791) | (408,378) |
| Investment in unconsolidated companies | (9,600) | (4,509) |
| Decrease (increase) in severance pay fund asset, net of payments made to retired employees | 225 | 502 |
| Net cash used in investing activities | (458,166) | (369,577) |
| Cash flows from financing activities: | ||
| Proceeds from long-term loans, net of transaction costs | 99,850 | 75,000 |
| Proceeds from exercise of options by employees | 27 | 42 |
| Proceeds from issuance of convertible notes, net of transaction costs | 0 | 419,698 |
| Purchase of capped call instruments | 0 | (24,538) |
| Purchase of treasury stock | 0 | (17,964) |
| Prepayments of a long-term loan | 0 | (219,126) |
| Proceeds from revolving credit lines with banks | 35,000 | 0 |
| Cash received from noncontrolling interest | 7,341 | 5,443 |
| Repayments of long-term debt | (175,860) | (135,656) |
| Proceeds from issuance of common stock, net of related costs | 341,671 | 0 |
| Cash paid to noncontrolling interest | (34,523) | (5,942) |
| Payments under finance lease obligations | (1,590) | (2,347) |
| Deferred debt issuance costs | (3,159) | (833) |
| Cash dividends paid | (21,189) | (20,177) |
| Net cash provided by financing activities | 247,568 | 73,600 |
| Effect of exchange rate changes | (67) | (679) |
| Net change in cash and cash equivalents and restricted cash and cash equivalents | (40,409) | (90,409) |
| Cash and cash equivalents and restricted cash and cash equivalents at beginning of period | 226,676 | 343,444 |
| Cash and cash equivalents and restricted cash and cash equivalents at end of period | 186,267 | 253,035 |
| Supplemental non-cash investing and financing activities: | ||
| Change in accounts payable related to purchases of property, plant and equipment | 27,581 | 13,972 |
| Right of use assets obtained in exchange for new lease liabilities | $ 5,319 | $ 5,249 |
Note 1 - General and Basis of Presentation |
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| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
NOTE 1 — GENERAL AND BASIS OF PRESENTATION
These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position as of September 30, 2023, the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 and the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for the nine months ended September 30, 2023 and 2022.
The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results for the periods presented are not necessarily indicative of the results to be expected for the year.
These condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2022 but does not include all disclosures required by U.S. GAAP.
Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000.
Hapoalim Bank Loan
On February 27, 2023, the Company entered into a definitive loan agreement (the "BHI Loan Agreement") with Bank Hapoalim B.M. (“Hapoalim Bank”). The BHI Loan Agreement provides for a loan by Hapoalim Bank to the Company in an aggregate principal amount of $100 million (the “BHI Loan” or “Hapoalim Loan 2023”). The outstanding principal amount of the BHI Loan will be repaid in 20 semi-annual payments of $5.0 million each, commencing on August 27, 2023. The duration of the BHI Loan is 10 years. The BHI Loan bears interest at a fixed rate of 6.45% per annum, payable semi-annually. The BHI Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The BHI Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default. As of September 30, 2023, the covenants have been met.
Equity Offering
On March 14, 2023, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC, as the sole underwriter (the “Underwriter”), in connection with a public offering, pursuant to which the Company agreed to issue and sell 3,600,000 shares of common stock, par value $0.001 per share, and the Underwriter agreed to purchase these shares at a price of $82.60 per share. In addition, the Company granted the Underwriter a 30-day option to purchase up to an additional 540,000 shares of common stock at the same price per share, which was fully exercised by the Underwriters on April 3, 2023. The total net proceeds from the offering, including the option, were approximately $341.7 million, after deducting offering expenses.
Loans Repayments
On April 4, 2023, the Company voluntarily fully prepaid the Plumstriker Loan in the amount of $11.1 million. On September 29, 2023, the Company voluntarily fully prepaid the Amatitlan Loan in the amount of $14.0 million.
ORPD Transaction
On July 11, 2023, ORPD LLC ("ORPD"), a subsidiary of the Company in which Northleaf Geothermal Holdings, LLC ("Northleaf") and the Company hold 36.75% and 63.25% equity interest, respectively, sold OREG 1, OREG 2, OREG 3 ("OREGs") and the Don A. Campbell complex to Ormat Nevada Inc. ("ONI"), a fully owned subsidiary of the Company. The proceeds from the sale were partially used by ORPD to make a distribution to its shareholders in which Northleaf's share was $30.0 million. Following this purchase transaction with the noncontrolling interest, the Company fully owns the OREGs and the Don A. Campbell power plant complex and ORPD remains the holder of the Puna geothermal power plant. The Company accounted for this transaction as an equity transaction.
Kenya Finance Act 2023
As described under Note 10 to the condensed consolidated financial statements, on June 26, 2023, the President of Kenya signed into law the 2023 Finance Act ("Finance Act"). On June 30, 2023, the Kenyan High Court issued a Temporary Conservatory Order against the Finance Act which barred the implementation of the Finance Act until a decision was made by the High Court. On July 28, 2023, the Kenya appeals court lifted the Temporary Conservatory Order on the Finance Act which resulted in the Finance Act being implemented as signed. The Company applied the applicable changes in the Finance Act in its third quarter condensed consolidated financial statements. The impact resulting from the reduction of the statutory corporate income tax rate for Branches from 37.5% to 30% was recorded under Income tax (provision) benefit in the amount of approximately $9.4 million.
Write-offs of Energy Storage project assets and unsuccessful exploration activities
During the three and nine months ended September 30, 2023, the Company wrote off accumulated costs of million, and million, respectively. During the three and nine months ended September 30, 2022, the Company wrote off accumulated costs of million, and million, respectively. These costs are related to energy storage projects and unsuccessful exploration activities that the Company decided to no longer pursue.
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents
The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as reported on the balance sheet to the total of the same amounts shown on the statement of cash flows:
Concentration of credit risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash investments and accounts receivable.
The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At September 30, 2023 and December 31, 2022, the Company had deposits totaling $20.4 million and $10.0 million, respectively, in ten U.S. financial institutions that were federally insured up to $250,000 per account. At September 30, 2023 and December 31, 2022, the Company’s deposits in foreign countries amounted to approximately $82.5 million and $64.3 million, respectively.
At September 30, 2023 and December 31, 2022, accounts receivable related to operations in foreign countries amounted to approximately $118.0 million and $78.9 million, respectively. At September 30, 2023 and December 31, 2022, accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of 10% of total consolidated revenues for the related period, amounted to approximately 60% and 60% of the Company’s trade receivables, respectively. The aggregate amount of notes receivable exceeding 10% of total receivables as of September 30, 2023 and December 31, 2022 is $106.5 million and $89.8 million, respectively.
The Company's revenues from its primary customers as a percentage of total revenues are as follows:
The Company has historically been able to collect on substantially all of its receivable balances. As of September 30, 2023, the amount overdue from KPLC in Kenya was $50.6 million of which $0.5 million was paid in October 2023. The Company believes it will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as were caused by government actions and/or political events).
In Honduras, as of September 30, 2023, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $10.0 million of which $0.7 million was paid in October 2023. In addition, due to the financial situation in Honduras, the Company may experience further delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.
Allowance for credit losses
The Company performs an analysis of potential credit losses related to its financial instruments that are within the scope of ASU 2018-19, Codification Improvements to Topic 325, Financial Instruments – Credit Losses, primarily cash and cash equivalents, restricted cash and cash equivalents, investment in marketable securities, receivables (excluding those accounted under lease accounting) and costs and estimated earnings in excess of billings on uncompleted contracts, based on classes of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. The Company estimates the expected credit losses for each class of financing receivables by applying the related corporate default rate which corresponds to the credit rating of the specific customer or class of financing receivables. For trade receivables, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding. The Company has also considered the existence of credit enhancement arrangements that may mitigate the credit risk of its financial receivables in estimating the applicable corporate default rate.
The following table describes the changes in the allowance for expected credit losses for the three and nine months ended September 30, 2023 and 2022 (all related to trade receivables):
Revenues from contracts with customers
Contract assets related to our Product segment reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities related to the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of September 30, 2023 and December 31, 2022 are as follows:
(*) Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the condensed consolidated balance sheets. The contract liabilities balance at the beginning of the year was not yet fully recognized as product revenues during the nine months ended September 30, 2023 as a result of performance obligations having not been fully satisfied yet.
On September 30, 2023, the Company had approximately $192.1 million of remaining performance obligations not yet satisfied or partly satisfied related to our Product segment. The Company expects to recognize approximately 100% of this amount as Product revenues during the next 24 months.
Disaggregated revenues from contracts with customers for the three and nine months ended September 30, 2023 and 2022 are disclosed under Note 8 - Business Segments, to the condensed consolidated financial statements.
Leases in which the Company is a lessor
The table below presents lease income recognized as a lessor:
Marketable securities
The Company’s investments in marketable securities consisted of debt securities with maturity of up to one year and a high credit rating. The investments in marketable securities were classified as available-for-sale ("AFS") and thus measured at fair value based on quoted market prices. Unrealized gains and losses from AFS debt securities were excluded from earnings and reported net of the related tax effect in "Accumulated other comprehensive income (loss)". Realized gains and losses from sale of marketable securities, as determined on a specific identification basis, as well as interest income earned, were included in earnings. The Company considers available evidence in evaluating potential impairments of its investments, including credit market conditions, credit ratings of the security as well as the extent to which fair value is less than amortized cost. The Company estimates the lifetime expected credit losses for all AFS debt securities in an unrealized loss position under its allowance for credit losses model. The Company assesses the security’s credit indicators, including credit ratings when estimating a security’s probability of default. If the assessment indicates that an expected credit loss exists, the Company determines the portion of the unrealized loss attributable to credit deterioration and records an allowance for the expected credit loss in earnings. Unrealized gains and losses attributable to non-credit factors were recorded in "Accumulated other comprehensive income (loss)", net of tax. Marketable debt securities with original maturities of three months or less that are readily convertible into a known amount of cash are presented under "Cash and cash equivalents" in the condensed consolidated balance sheets.
Derivative instruments
Derivative instruments (including certain derivative instruments embedded in other contracts) are measured at their fair value and recorded as either assets or liabilities unless exempted from derivative treatment as a normal purchase and sale. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings. Changes in the fair value of derivatives designated as cash flow hedging instruments are initially recorded in "Other comprehensive income (loss)" and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to earnings to offset the remeasurement of the underlying hedge transaction which also impacts the same line item in the consolidated statements of operations and comprehensive income.
The Company maintains a risk management strategy that may incorporate the use of swap contracts, put options, forward exchange contracts, interest rate swaps, and cross-currency swaps to minimize significant fluctuation in cash flows and/or earnings that are caused by oil and natural gas prices, exchange rate or interest rate volatility.
Transferable production and investment tax credits
The Inflation Reduction Act (“IRA”) was signed into law in August 2022 and introduces a transferability provision for certain tax credits related to the clean production of energy. Under this provision, a reporting entity can monetize such credits through sale to a third party. The option for transferability of credits applies to taxable years beginning after December 31, 2022. Several of the Company’s projects that are not currently part of a tax monetization transaction generate eligible tax credits, such as investment tax credits (“ITCs”) and production tax credits (“PTCs”), that are eligible to be transferred to a third-party under the provisions of the IRA. The Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the consolidated statement of operations and comprehensive income. PTC’s are accounted similarly to refundable or direct-pay credits outside of the tax line with income recognized in the “Income attributable to sale of tax benefits” line in the consolidated statement of operations and comprehensive income. Income recognized related to such transferable PTC’s during the three and nine months ended September 30, 2023 was $2.4 million and $6.9 million, net of discount, respectively. Tax benefits recognized related to such transferable ITC’s during the three and nine months ended September 30, 2023 was $6.6 million and $17.2 million, net of discount, respectively.
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Note 2 - New Accounting Pronouncements |
9 Months Ended |
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NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS
New accounting pronouncements effective in the nine months ended September 30, 2023
Revenue Contracts Acquired in a Business Combination
In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"). ASU 2021-08 is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing the following topics: (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in ASU 2021-08 require that an entity that is the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 at the acquisition date as if it had originated the contracts. The amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted this guidance as prescribed, and the adoption of this update did not have a material impact on its condensed consolidated financial statements.
New accounting pronouncements effective in future periods
Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
In March 2023, the FASB issued ASU 2023-02 “Investments - Equity Method and Joint Ventures (Topic 323),” which permits reporting entities to elect to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The amendments in ASU 2023-02 are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments in this update should be applied on either a modified retrospective or a retrospective basis. The Company is still evaluating the potential impact of this guidance on its consolidated financial statements, however, it anticipates that the adoption of ASU 2023-02 will not have an impact on its condensed consolidated financial statements.
Accounting Standards Codification Amendments
In October 2023, the FASB issued ASU 2023-06 “Disclosure Improvements” to incorporate several SEC disclosure requirements into US GAAP. This ASU adds interim and annual disclosure requirements to a variety of topics in the Accounting Standards Codification, including accounting changes and error corrections, earnings per share, and debt. The amendments in this ASU should be applied prospectively and are effective when the removal of the related SEC rule from Regulation S-X or Regulation S-K is effective. Early adoption is not permitted. The Company is still evaluating the potential impact of this guidance on its consolidated financial statements, however, it anticipates that the adoption of ASU 2023-06 will not have an impact on its condensed consolidated financial statements.
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NOTE 3 — INVENTORIES
Inventories consist of the following:
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Note 4 - Fair Value of Financial Instruments |
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| Fair Value Disclosures [Text Block] |
NOTE 4— FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received upon selling an asset or paid upon transferring a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The following table sets forth certain fair value information at September 30, 2023 and December 31, 2022 for financial assets and liabilities measured at fair value by level within the fair value hierarchy, as well as cost or amortized cost. As required by the fair value measurement guidance, assets and liabilities are classified in their entirety based on the lowest level of inputs that is significant to the fair value measurement.
The following table presents the amounts of gain (loss) recognized in the consolidated statements of operations and comprehensive income on derivative instruments (in thousands):
(1) The foregoing currency forward transactions were not designated as hedge transactions and were marked to market with the corresponding gains or losses recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.
(2) The foregoing cross currency swap transactions were designated as a cash flow hedge as further described above and under Note 1 to the condensed consolidated financial statements. The changes in the cross currency swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to “Derivatives and foreign currency transaction gains (losses)” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income.
There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the nine months ended September 30, 2023 and 2022.
The following table presents the effect of derivative instruments designated as cash flow hedges on the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022:
The estimated net amount of existing gain (loss) that is reported in "Accumulated other comprehensive income (loss)" as of September 30, 2023 that is expected to be reclassified into earnings within the next 12 months is immaterial. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flow is from the transaction commencement date through June 2031.
The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:
(*) Carrying amount value excludes the related deferred financing costs.
The fair value of the long-term debt is determined by a valuation model, which is based on a conventional discounted cash flow methodology and utilizes assumptions of current borrowing rates, except for the fair value of the Convertible Senior Notes for which the fair value was estimated based on a quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period. A hypothetical change in the quoted bid price will result in a corresponding change in the estimated fair value of the Notes.
The carrying value of cash and cash equivalents, receivables, deposits and accounts payable (included in the condensed consolidated balance sheets) approximates their fair value.
The following table presents the fair value of financial instruments as of September 30, 2023:
The following table presents the fair value of financial instruments as of December 31, 2022:
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Note 5 - Stock-based Compensation |
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NOTE 5 — STOCK-BASED COMPENSATION
In March 2023, the Company granted certain members of its management and employees an aggregate of 174,422 restricted stock units ("RSUs") and 35,081 performance stock units ("PSUs") under the Company’s 2018 Incentive Compensation Plan. The RSUs and PSUs have vesting periods of between 1 to 4 years from the grant date.
The fair value of each RSU and PSU on the grant date was $79.9 and $79.6, respectively. The Company calculated the fair value of each RSU and PSU on the grant date using the complex lattice, tree-based option-pricing model based on the following assumptions:
In May 2023, the Company granted its directors and employees an aggregate of 11,852 RSUs under the Company’s 2018 Incentive Compensation Plan. The RSUs have vesting periods year from the grant date.
The fair value of each RSU on the grant date was $82.9. The Company calculated the fair value of each RSU and PSU on the grant date using the complex lattice, tree-based option-pricing model based on the following assumptions:
There were no other significant grants that were made by the Company during the nine months ended September 30, 2023.
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Note 6 - Interest Expense, Net |
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NOTE 6 — INTEREST EXPENSE, NET
The components of interest expense are as follows:
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Note 7 - Earnings Per Share |
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| Earnings Per Share [Text Block] |
NOTE 7 — EARNINGS PER SHARE
Basic earnings per share attributable to the Company’s stockholders is computed by dividing net income or loss attributable to the Company’s stockholders by the weighted average number of shares of common stock outstanding for the period. The Company does not have any equity instruments that are dilutive, except for employee stock-based awards and convertible senior notes ("Notes").
The table below shows the reconciliation of the number of shares used in the computation of basic and diluted earnings per share (in thousands):
The number of stock-based awards that could potentially dilute future earnings per share and that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive was 85.4 thousand and 27.4 thousand for the three months ended September 30, 2023 and 2022, respectively, and 21.4 thousand and 58.0 thousand for the nine months ended September 30, 2023 and 2022, respectively.
As per ASU 2020-06, the if-converted method is required for calculating any potential dilutive effect from convertible instruments. For the three and nine months ended September 30, 2023, the average price of the Company's common stock did not exceed the per share conversion price of the Notes of $90.27, and other requirements for the Notes to be convertible were not met and as such, there was no dilutive effect from the Notes in respect with the aforementioned periods.
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Note 8 - Business Segments |
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| Segment Reporting Disclosure [Text Block] |
NOTE 8 — BUSINESS SEGMENTS
The Company has reporting segments: the Electricity segment, the Product segment and the Energy Storage segment. These segments are managed and reported separately as each offers different products and serves different markets.
Transfer prices between the operating segments are determined based on current market values or cost-plus markup of the seller’s business segment.
Summarized financial information concerning the Company’s reportable segments is shown in the following tables, including the Company's disaggregated revenues from contracts with customers:
Reconciling information between reportable segments and the Company’s consolidated totals is shown in the following table:
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Note 9 - Commitments and Contingencies |
9 Months Ended | |||
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Sep. 30, 2023 | ||||
| Notes to Financial Statements | ||||
| Commitments and Contingencies Disclosure [Text Block] |
NOTE 9 — COMMITMENTS AND CONTINGENCIES
In addition, from time to time, the Company is named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company's business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will not be material to the Company’s consolidated financial statements as a whole.
Other matters
On March 2, 2021, the Company's Board of Directors established a special committee of independent directors (the "Special Committee") to investigate, among other things, certain claims made in a report published by a short seller regarding the Company’s compliance with anti-corruption laws. The Special Committee is working with outside legal counsel to investigate the claims made. All members of the Special Committee are “independent” in accordance with the Company's Corporate Governance Guidelines, the NYSE listing standards and SEC rules applicable to boards of directors in general. The Company is also providing information as requested by the SEC and Department of Justice ("DOJ") related to the claims.
In Kenya, since 2021, various task forces have been appointed by the President and/or the Senate to review and analyze PPAs entered into between KPLC and various independent power producers (including our long-term PPA for the Olkaria complex), with the recommendation that KPLC review its contracts and attempt renegotiation with these independent power producers to reduce PPA tariffs within existing contractual arrangements. The Company has been approached by certain of these task forces and has participated in requested discussions with them, which remain ongoing.
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Note 10 - Income Taxes |
9 Months Ended |
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Sep. 30, 2023 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
NOTE 10 — INCOME TAXES
The Company’s effective tax rate provision for the three months ended September 30, 2023 and 2022 was 24.1% and 26.1%, respectively. The Company's effective tax rate provision for the nine months ended September 30, 2023 and 2022 was 2.4% and 28.5%, respectively. The effective rate differs from the federal statutory rate of 21% primarily due to the generation of investment tax credits, a net benefit associated with the statutory tax rate change in Kenya resulting from the Finance Act, and the jurisdictional mix of earnings at differing tax rates.
On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law in the United States. The Company believes that the construction and operations of its geothermal power plants, recovered energy-based power plants, battery energy storage systems and solar PV will benefit in the future from the IRA and enhance the economic feasibility of projects in the United States. PTC’s can be generated from 2.75 cents per kWh, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 3.30 cents per kWh. ITC’s can be earned on investments from 30.0%, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 50.0%. Battery Energy Storage Systems are eligible for ITC for projects placed-in-service after December 31, 2022. In addition, the Company can now monetize PTC’s and ITC’s earned by transferring the credits to a third party without having to enter into a tax equity transaction. The Company views the enactment of the IRA as favorable for the overall business climate for its sector.
On June 26, 2023, the President of Kenya signed into law the 2023 Finance Act ("Finance Act"). On June 30, 2023, the Kenyan High Court issued a Temporary Conservatory Order against the Finance Act which barred the implementation of the Finance Act until a decision was made by the High Court. The Finance Act, among several other changes, reduces the statutory corporate income tax rate for Branches from 37.5% to 30%, introduces a Branch Profits tax based on the change in Net Assets and limits interest deductions to 30% of EBITDA. On July 28, 2023, the Kenya appeals court lifted the Temporary Conservatory Order on the Finance Act which results in the Finance Act being implemented as signed. As a result, the Company recorded a tax benefit associated with the corporate tax rate change for Branches from 37.5% to 30.0% in the quarter ending September 30, 2023, in the amount of approximately $9.4 million. This benefit is recorded as a reduction to income tax expense in the condensed consolidated statements of comprehensive operations and income.
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Note 11 - Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
| Notes to Financial Statements | |
| Subsequent Events [Text Block] |
NOTE 11 — SUBSEQUENT EVENTS
Cash Dividend
On November 8, 2023, the Board of Directors of the Company declared, approved and authorized payment of a quarterly dividend of $7.2 million ($0.12 per share) to all holders of the Company’s issued and outstanding shares of common stock on , payable on .
North Valley Tax Equity Transaction
On October 27, 2023, one of the Company’s wholly-owned subsidiaries that indirectly owns the North Valley Geothermal power plant entered into a partnership agreement with a private investor. Under the transaction documents, the private investor acquired membership interests in the North Valley Geothermal power plant project for an initial purchase price of approximately $43.1 million and for which it will pay additional installments that are expected to amount to approximately $6.1 million. The Company will continue to operate and maintain the power plant and will receive substantially all the distributable cash flow generated by the power plant, as described below.
Under the transaction documents, prior to December 31, 2032 (“Target Flip Date”), the Company’s wholly-owned subsidiary, Ormat Nevada Inc. ("Ormat Nevada"), receives substantially all of the distributable cash flow generated by the project, while the private investor receives substantially all of the tax attributes of the project. Following the later of the Target Flip Date and the date on which the private investor reaches its target return, Ormat Nevada will receive 97.5% of the distributable cash and taxable income, on a go-forward basis. In the event that the private investor will not reach its target return by the Target Flip Date, then for the period between the Target Flip Date and the date on which the private investor reaches its target return, the private investor will receive 100% of the distributable cash generated by the power plant and 99% of the tax attributes as long as the project is generating Production Tax Credits ("PTCs") (and 5% of the tax attributes afterwards).
On the Target Flip Date, Ormat Nevada has the option to purchase the private investor’s interests at the then-current fair market value, plus an amount that causes the private investor to reach its target return, if needed. If Ormat Nevada exercises this purchase option, it will become the sole owner of the project again.
Geothermal and Solar Assets Purchase Transaction
On October 23, 2023, the Company entered into a purchase agreement with Enel Green Power North America ("EGPNA"), a subsidiary of Enel SpA (ENEL.MI) to acquire a portfolio of assets which includes two contracted geothermal power plants, one triple hybrid power plant which consists of geothermal, solar PV and solar thermal units, two stand alone solar power plants, and two greenfield development assets, for total proceeds of $271 million (subject to a customary post-closing working capital adjustment to the purchase price, based on the levels of net working capital of the acquired companies). The acquisition is expected to close by the first quarter of 2024, subject to regulatory approvals and customary closing conditions.
The geothermal power plants include the Cove Fort power plant located in Beaver County, Utah, which sells electricity under a long-term power purchase agreement with Salt River Project and the Salt Wells power plant located in Churchill County, Nevada, which sells electricity under a long-term power purchase agreement with NV Energy. The Stillwater triple hybrid geothermal, solar PV and solar thermal power plant is located in Churchill County, Nevada, and sells electricity to NV Energy under a power purchase agreement. The Solar assets of Stillwater Solar PV II in Churchill County, Nevada, and Woods Hill in Windham County, Connecticut, sell their electricity under power purchase agreements, respectively.
The Company will account for the transaction under ASC 805, Business Combinations and is currently evaluating the accounting related to the transaction. The Company expects to consolidate the acquired assets in its consolidated financial statements starting at the acquisition date.
Short-term Commercial Paper
On October 19, 2023, the Company entered into a framework agreement for participation in the issuance of commercial paper (the "Agreement") with Barak Capital Underwriting Ltd. under which the Company allowed the participants to submit proposals for purchasing and to purchase the Company's commercial paper ("Commercial Paper") in accordance with the provisions of the Agreement. On October 23, 2023, the Company completed the issuance of the Commercial Paper in the aggregate amount of $73.5 million. The Commercial Paper was issued for a period of 90 days and extends automatically for additional 90 day periods for up to five years, unless the Company notifies the participants otherwise or a notice of termination is provided by the participants in accordance with the provisions of the Agreement. The Commercial Paper bears an annual interest of three months SOFR +1.1% which will be paid at the end of each 90 day period.
War in Israel
On October 7, 2023, Hamas terrorists and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, including widespread killings and kidnappings. They also launched extensive rocket attacks on the Israeli civilian population. Shortly following the attack, Israel declared war against Hamas. The Israeli military called up reservists for active duty, including approximately 10% of the Company's Israeli workforce (approximately 4% of our total global workforce), in anticipation of an active military campaign. The majority of the Company's senior management and its main Product segment production and manufacturing facilities are located in Israel approximately 26 miles from the border with the Gaza Strip.
As of the approval date of these condensed consolidated financial statements, none of the Company's facilities or infrastructure have been damaged nor have its supply chains been significantly impacted since the war broke out. However, a prolonged war could result in further military reserve duty call-ups as well as irregularities to the Company's supply chain and to its ability to ship its products from Israel, which could disrupt the operations of the Company's Product segment and potentially delay some of its growth plans in the Electricity segment. Management will continue to monitor the effect of the war on the Company's financial position and results of operations.
Mizrahi 2023 Loan
On November 1, 2023, the Company entered into a definitive loan agreement (the "Mizrahi 2023 Loan Agreement") with Mizrahi Tefahot Bank Ltd. (“Mizrahi Bank”). The Mizrahi 2023 Loan Agreement provides for a loan by Mizrahi Bank to the Company in an aggregate principal amount of $50.0 million (the “Mizrahi 2023 Loan”). The outstanding principal amount of the Mizrahi 2023 Loan will be repaid in 16 semi-annual payments of $3.1 million each, commencing on April 12, 2024. The duration of the Mizrahi 2023 Loan is 8 years. The Mizrahi 2023 Loan bears interest at a fixed rate of 7.15% per annum, payable semi-annually. The Mizrahi 2023 Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Mizrahi 2023 Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default.
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Insider Trading Arrangements |
3 Months Ended | 9 Months Ended |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
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| Insider Trading Arr Line Items | ||
| Material Terms of Trading Arrangement [Text Block] |
(a) None.
(b) None
(c) During the fiscal quarter ended September 30, 2023, of our directors or officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. |
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| Rule 10b5-1 Arrangement Adopted [Flag] | false | |
| Non-Rule 10b5-1 Arrangement Adopted [Flag] | false | |
| Rule 10b5-1 Arrangement Terminated [Flag] | false | |
| Non-Rule 10b5-1 Arrangement Terminated [Flag] | false |
Significant Accounting Policies (Policies) |
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| Basis of Accounting, Policy [Policy Text Block] | These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position as of September 30, 2023, the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 and the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for the nine months ended September 30, 2023 and 2022.
The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results for the periods presented are not necessarily indicative of the results to be expected for the year.
These condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2022 but does not include all disclosures required by U.S. GAAP.
Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000.
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| Bank Loan [Policy Text Block] | Hapoalim Bank Loan
On February 27, 2023, the Company entered into a definitive loan agreement (the "BHI Loan Agreement") with Bank Hapoalim B.M. (“Hapoalim Bank”). The BHI Loan Agreement provides for a loan by Hapoalim Bank to the Company in an aggregate principal amount of $100 million (the “BHI Loan” or “Hapoalim Loan 2023”). The outstanding principal amount of the BHI Loan will be repaid in 20 semi-annual payments of $5.0 million each, commencing on August 27, 2023. The duration of the BHI Loan is 10 years. The BHI Loan bears interest at a fixed rate of 6.45% per annum, payable semi-annually. The BHI Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The BHI Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default. As of September 30, 2023, the covenants have been met.
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| Stockholders' Equity, Policy [Policy Text Block] | Equity Offering
On March 14, 2023, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC, as the sole underwriter (the “Underwriter”), in connection with a public offering, pursuant to which the Company agreed to issue and sell 3,600,000 shares of common stock, par value $0.001 per share, and the Underwriter agreed to purchase these shares at a price of $82.60 per share. In addition, the Company granted the Underwriter a 30-day option to purchase up to an additional 540,000 shares of common stock at the same price per share, which was fully exercised by the Underwriters on April 3, 2023. The total net proceeds from the offering, including the option, were approximately $341.7 million, after deducting offering expenses.
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| Debt, Policy [Policy Text Block] | Loans Repayments
On April 4, 2023, the Company voluntarily fully prepaid the Plumstriker Loan in the amount of $11.1 million. On September 29, 2023, the Company voluntarily fully prepaid the Amatitlan Loan in the amount of $14.0 million.
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| Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block] | ORPD Transaction
On July 11, 2023, ORPD LLC ("ORPD"), a subsidiary of the Company in which Northleaf Geothermal Holdings, LLC ("Northleaf") and the Company hold 36.75% and 63.25% equity interest, respectively, sold OREG 1, OREG 2, OREG 3 ("OREGs") and the Don A. Campbell complex to Ormat Nevada Inc. ("ONI"), a fully owned subsidiary of the Company. The proceeds from the sale were partially used by ORPD to make a distribution to its shareholders in which Northleaf's share was $30.0 million. Following this purchase transaction with the noncontrolling interest, the Company fully owns the OREGs and the Don A. Campbell power plant complex and ORPD remains the holder of the Puna geothermal power plant. The Company accounted for this transaction as an equity transaction.
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| Kenya Finance Act [Policy Text Block] | Kenya Finance Act 2023
As described under Note 10 to the condensed consolidated financial statements, on June 26, 2023, the President of Kenya signed into law the 2023 Finance Act ("Finance Act"). On June 30, 2023, the Kenyan High Court issued a Temporary Conservatory Order against the Finance Act which barred the implementation of the Finance Act until a decision was made by the High Court. On July 28, 2023, the Kenya appeals court lifted the Temporary Conservatory Order on the Finance Act which resulted in the Finance Act being implemented as signed. The Company applied the applicable changes in the Finance Act in its third quarter condensed consolidated financial statements. The impact resulting from the reduction of the statutory corporate income tax rate for Branches from 37.5% to 30% was recorded under Income tax (provision) benefit in the amount of approximately $9.4 million.
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| Exploratory Drilling Costs Capitalization and Impairment, Policy [Policy Text Block] | Write-offs of Energy Storage project assets and unsuccessful exploration activities
During the three and nine months ended September 30, 2023, the Company wrote off accumulated costs of million, and million, respectively. During the three and nine months ended September 30, 2022, the Company wrote off accumulated costs of million, and million, respectively. These costs are related to energy storage projects and unsuccessful exploration activities that the Company decided to no longer pursue.
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| Cash and Cash Equivalents, Policy [Policy Text Block] | Reconciliation of cash and cash equivalents and restricted cash and cash equivalents
The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as reported on the balance sheet to the total of the same amounts shown on the statement of cash flows:
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| Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of credit risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash investments and accounts receivable.
The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At September 30, 2023 and December 31, 2022, the Company had deposits totaling $20.4 million and $10.0 million, respectively, in ten U.S. financial institutions that were federally insured up to $250,000 per account. At September 30, 2023 and December 31, 2022, the Company’s deposits in foreign countries amounted to approximately $82.5 million and $64.3 million, respectively.
At September 30, 2023 and December 31, 2022, accounts receivable related to operations in foreign countries amounted to approximately $118.0 million and $78.9 million, respectively. At September 30, 2023 and December 31, 2022, accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of 10% of total consolidated revenues for the related period, amounted to approximately 60% and 60% of the Company’s trade receivables, respectively. The aggregate amount of notes receivable exceeding 10% of total receivables as of September 30, 2023 and December 31, 2022 is $106.5 million and $89.8 million, respectively.
The Company's revenues from its primary customers as a percentage of total revenues are as follows:
The Company has historically been able to collect on substantially all of its receivable balances. As of September 30, 2023, the amount overdue from KPLC in Kenya was $50.6 million of which $0.5 million was paid in October 2023. The Company believes it will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as were caused by government actions and/or political events).
In Honduras, as of September 30, 2023, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $10.0 million of which $0.7 million was paid in October 2023. In addition, due to the financial situation in Honduras, the Company may experience further delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.
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| Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Allowance for credit losses
The Company performs an analysis of potential credit losses related to its financial instruments that are within the scope of ASU 2018-19, Codification Improvements to Topic 325, Financial Instruments – Credit Losses, primarily cash and cash equivalents, restricted cash and cash equivalents, investment in marketable securities, receivables (excluding those accounted under lease accounting) and costs and estimated earnings in excess of billings on uncompleted contracts, based on classes of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. The Company estimates the expected credit losses for each class of financing receivables by applying the related corporate default rate which corresponds to the credit rating of the specific customer or class of financing receivables. For trade receivables, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding. The Company has also considered the existence of credit enhancement arrangements that may mitigate the credit risk of its financial receivables in estimating the applicable corporate default rate.
The following table describes the changes in the allowance for expected credit losses for the three and nine months ended September 30, 2023 and 2022 (all related to trade receivables):
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| Revenue [Policy Text Block] | Revenues from contracts with customers
Contract assets related to our Product segment reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities related to the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of September 30, 2023 and December 31, 2022 are as follows:
(*) Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the condensed consolidated balance sheets. The contract liabilities balance at the beginning of the year was not yet fully recognized as product revenues during the nine months ended September 30, 2023 as a result of performance obligations having not been fully satisfied yet.
On September 30, 2023, the Company had approximately $192.1 million of remaining performance obligations not yet satisfied or partly satisfied related to our Product segment. The Company expects to recognize approximately 100% of this amount as Product revenues during the next 24 months.
Disaggregated revenues from contracts with customers for the three and nine months ended September 30, 2023 and 2022 are disclosed under Note 8 - Business Segments, to the condensed consolidated financial statements.
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| Lessor, Leases [Policy Text Block] | Leases in which the Company is a lessor
The table below presents lease income recognized as a lessor:
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| Marketable Securities, Policy [Policy Text Block] | Marketable securities
The Company’s investments in marketable securities consisted of debt securities with maturity of up to one year and a high credit rating. The investments in marketable securities were classified as available-for-sale ("AFS") and thus measured at fair value based on quoted market prices. Unrealized gains and losses from AFS debt securities were excluded from earnings and reported net of the related tax effect in "Accumulated other comprehensive income (loss)". Realized gains and losses from sale of marketable securities, as determined on a specific identification basis, as well as interest income earned, were included in earnings. The Company considers available evidence in evaluating potential impairments of its investments, including credit market conditions, credit ratings of the security as well as the extent to which fair value is less than amortized cost. The Company estimates the lifetime expected credit losses for all AFS debt securities in an unrealized loss position under its allowance for credit losses model. The Company assesses the security’s credit indicators, including credit ratings when estimating a security’s probability of default. If the assessment indicates that an expected credit loss exists, the Company determines the portion of the unrealized loss attributable to credit deterioration and records an allowance for the expected credit loss in earnings. Unrealized gains and losses attributable to non-credit factors were recorded in "Accumulated other comprehensive income (loss)", net of tax. Marketable debt securities with original maturities of three months or less that are readily convertible into a known amount of cash are presented under "Cash and cash equivalents" in the condensed consolidated balance sheets.
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| Derivatives, Policy [Policy Text Block] | Derivative instruments
Derivative instruments (including certain derivative instruments embedded in other contracts) are measured at their fair value and recorded as either assets or liabilities unless exempted from derivative treatment as a normal purchase and sale. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings. Changes in the fair value of derivatives designated as cash flow hedging instruments are initially recorded in "Other comprehensive income (loss)" and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to earnings to offset the remeasurement of the underlying hedge transaction which also impacts the same line item in the consolidated statements of operations and comprehensive income.
The Company maintains a risk management strategy that may incorporate the use of swap contracts, put options, forward exchange contracts, interest rate swaps, and cross-currency swaps to minimize significant fluctuation in cash flows and/or earnings that are caused by oil and natural gas prices, exchange rate or interest rate volatility.
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| Transferable Production and Investment Tax Credits [Policy Text Block] | Transferable production and investment tax credits
The Inflation Reduction Act (“IRA”) was signed into law in August 2022 and introduces a transferability provision for certain tax credits related to the clean production of energy. Under this provision, a reporting entity can monetize such credits through sale to a third party. The option for transferability of credits applies to taxable years beginning after December 31, 2022. Several of the Company’s projects that are not currently part of a tax monetization transaction generate eligible tax credits, such as investment tax credits (“ITCs”) and production tax credits (“PTCs”), that are eligible to be transferred to a third-party under the provisions of the IRA. The Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the consolidated statement of operations and comprehensive income. PTC’s are accounted similarly to refundable or direct-pay credits outside of the tax line with income recognized in the “Income attributable to sale of tax benefits” line in the consolidated statement of operations and comprehensive income. Income recognized related to such transferable PTC’s during the three and nine months ended September 30, 2023 was $2.4 million and $6.9 million, net of discount, respectively. Tax benefits recognized related to such transferable ITC’s during the three and nine months ended September 30, 2023 was $6.6 million and $17.2 million, net of discount, respectively.
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Note 5 - Stock-based Compensation (Tables) |
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Note 6 - Interest Expense, Net (Tables) |
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Note 7 - Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of Weighted Average Number of Shares [Table Text Block] |
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Note 8 - Business Segments (Tables) |
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| Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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| Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] |
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Note 1 - General and Basis of Presentation 1 (Details Textual) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 29, 2023
USD ($)
|
Jul. 28, 2023 |
Jul. 11, 2023
USD ($)
|
Jun. 27, 2023 |
Jun. 26, 2023 |
Apr. 23, 2023
USD ($)
|
Mar. 14, 2023
USD ($)
$ / shares
shares
|
Feb. 27, 2023
USD ($)
|
Oct. 30, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
$ / shares
|
Mar. 31, 2023 |
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
$ / shares
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
$ / shares
|
|
| Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
| Proceeds from Issuance of Common Stock | $ 341,671 | $ 0 | |||||||||||||
| Repayments of Long-Term Debt | 175,860 | 135,656 | |||||||||||||
| Payments to Noncontrolling Interests | 34,523 | 5,942 | |||||||||||||
| Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||||||||||||||
| Income Tax Expense (Benefit) | $ (7,134) | $ 7,227 | (2,205) | 23,520 | |||||||||||
| Energy Storage Projects and Assets, Write-off, Including Unsuccessful Exploration Activities and Storage Assets | 2,300 | $ 800 | 2,300 | $ 2,800 | |||||||||||
| Cash, FDIC Insured Amount | 20,400 | 20,400 | $ 10,000 | ||||||||||||
| Cash, Uninsured Amount | 82,500 | 82,500 | 64,300 | ||||||||||||
| Accounts Receivable, after Allowance for Credit Loss, Current | 164,746 | 164,746 | $ 128,818 | ||||||||||||
| Income Related to Transferable Production Tax Credits | 2,400 | 6,900 | |||||||||||||
| Income Related to Transferable Investment Tax Credits | 6,600 | 17,200 | |||||||||||||
| Kenya Power and Lighting Co LTD [Member] | |||||||||||||||
| Accounts Receivable, Past Due | 50,600 | 50,600 | |||||||||||||
| Kenya Power and Lighting Co LTD [Member] | Subsequent Event [Member] | |||||||||||||||
| Proceeds, Overdue Accounts Receivable | $ 500 | ||||||||||||||
| ENEE [Member] | |||||||||||||||
| Accounts Receivable, Past Due | 10,000 | $ 10,000 | |||||||||||||
| ENEE [Member] | Subsequent Event [Member] | |||||||||||||||
| Proceeds, Overdue Accounts Receivable | $ 700 | ||||||||||||||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Primary Customers [Member] | |||||||||||||||
| Concentration Risk, Percentage | 60.00% | 60.00% | |||||||||||||
| Total Receivables [Member] | Customer Concentration Risk [Member] | |||||||||||||||
| Financing Receivable, after Allowance for Credit Loss | 106,500 | $ 106,500 | $ 89,800 | ||||||||||||
| Non-US [Member] | |||||||||||||||
| Accounts Receivable, after Allowance for Credit Loss, Current | $ 118,000 | $ 118,000 | $ 78,900 | ||||||||||||
| Kenya [Member] | |||||||||||||||
| Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 30.00% | 30.00% | 37.50% | 30.00% | |||||||||||
| Income Tax Expense (Benefit) | $ (9,400) | ||||||||||||||
| ORPD LLC [Member] | |||||||||||||||
| Subsidiary, Ownership Percentage, Parent | 63.25% | ||||||||||||||
| ORPD LLC [Member] | Northleaf Geothermal Holdings, Northleaf [Member] | |||||||||||||||
| Subsidiary, Ownership Percentage, Noncontrolling Owner | 36.75% | ||||||||||||||
| Goldman Sachs & Co. LLC [Member] | |||||||||||||||
| Proceeds from Issuance of Common Stock | $ 341,700 | ||||||||||||||
| Northleaf Geothermal Holdings, Northleaf [Member] | ORPD LLC [Member] | |||||||||||||||
| Payments to Noncontrolling Interests | $ 30,000 | ||||||||||||||
| Public Offering [Member] | Goldman Sachs & Co. LLC [Member] | |||||||||||||||
| Stock Issued During Period, Shares, New Issues (in shares) | shares | 3,600,000 | ||||||||||||||
| Shares Issued, Price Per Share (in dollars per share) | $ / shares | $ 82.6 | ||||||||||||||
| Over-Allotment Option [Member] | Goldman Sachs & Co. LLC [Member] | |||||||||||||||
| Stock Issued During Period, Shares, New Issues (in shares) | shares | 540,000 | ||||||||||||||
| BHI Loan Agreement [Member] | |||||||||||||||
| Debt Instrument, Face Amount | $ 100,000 | ||||||||||||||
| Debt Instrument, Number of Repayment Installment | 20 | ||||||||||||||
| Debt Instrument, Periodic Payment | $ 5,000 | ||||||||||||||
| Debt Instrument, Term (Year) | 10 years | ||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 6.45% | ||||||||||||||
| Debt Instrument, Covenant, Minimum Equity Capital | $ 750,000 | ||||||||||||||
| BHI Loan Agreement [Member] | Maximum [Member] | |||||||||||||||
| Debt Instrument, Covenant, Debt to Adjusted EBITDA Ratio | 6.00% | ||||||||||||||
| BHI Loan Agreement [Member] | Minimum [Member] | |||||||||||||||
| Debt Instrument, Covenant, Equity Capital to Total Assets Ratio | 25.00% | ||||||||||||||
| Plumstriker Loan Agreement [Member] | |||||||||||||||
| Repayments of Long-Term Debt | $ 11,100 | ||||||||||||||
| Amatitlan Loan [Member] | |||||||||||||||
| Repayments of Long-Term Debt | $ 14,000 | ||||||||||||||
Note 1 - General and Basis of Presentation 2 (Details Textual) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 $ in Millions |
Sep. 30, 2023
USD ($)
|
|---|---|
| Revenue, Remaining Performance Obligation, Amount | $ 192.1 |
| Product [Member] | |
| Revenue, Remaining Performance Obligation, Percentage | 100.00% |
| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Month) | 24 months |
Note 1 - General and Basis of Presentation - Cash and Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|---|
| Cash and cash equivalents | $ 78,079 | $ 95,872 | ||
| Restricted cash and cash equivalents | 108,188 | 130,804 | ||
| Total Cash and cash equivalents and restricted cash and cash equivalents | $ 186,267 | $ 226,676 | $ 253,035 | $ 343,444 |
Note 1 - General and Basis of Presentation - Customers as a Percentage of Total Revenues (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Southern California Public Power Authority [Member] | ||||
| Percent of revenues | 18.70% | 18.70% | 22.00% | 21.40% |
| Sierra Pacific Power Company And Nevada Power Company [Member] | ||||
| Percent of revenues | 14.00% | 14.00% | 16.50% | 17.10% |
| Kenya Power and Lighting Co LTD [Member] | ||||
| Percent of revenues | 13.10% | 15.20% | 14.00% | 14.90% |
Note 1 - General and Basis of Presentation - Changes in the Allowance for Expected Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Beginning balance of the allowance for expected credit losses | $ 90 | |||
| Ending balance of the allowance for expected credit losses | $ 90 | 90 | ||
| Accounting Standards Update 2016-13 [Member] | ||||
| Beginning balance of the allowance for expected credit losses | 90 | $ 90 | 90 | $ 90 |
| Change in the provision for expected credit losses for the period | 0 | 0 | 0 | 0 |
| Ending balance of the allowance for expected credit losses | $ 90 | $ 90 | $ 90 | $ 90 |
Note 1 - General and Basis of Presentation - Contract Assets (Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
||
|---|---|---|---|---|
| Contract assets (*) | [1] | $ 25,766 | $ 16,405 | |
| Contract liabilities (*) | [1] | $ (10,619) | $ (8,785) | |
| ||||
Note 1 - General and Basis of Presentation - Lease Income as Lessor (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Lease income relating to lease payments from operating leases | $ 129,903 | $ 127,748 | $ 392,665 | $ 394,901 |
Note 3 - Inventories - Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Raw materials and purchased parts for assembly | $ 21,784 | $ 10,629 |
| Self-manufactured assembly parts and finished products | 23,060 | 12,203 |
| Total inventories | $ 44,844 | $ 22,832 |
Note 4 - Fair Value of Financial Instruments (Details Textual) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Cross Currency Interest Rate Contract [Member] | Prepaid Expenses and Other and Deposits and Other [Member] | ||
| Derivatives, Cash Collateral Deposits | $ 0 | $ 0 |
Note 4 - Fair Value of Financial Instruments - Financial Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Reported Value Measurement [Member] | ||||||||||
| Cash equivalents (including restricted cash accounts) | $ 30,483 | $ 34,832 | ||||||||
| Marketable securities (1) | 141 | [1] | 136 | |||||||
| Fair Value, Net Asset (Liability) | 4,449 | 34,420 | ||||||||
| Reported Value Measurement [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||
| Derivative Asset, noncurrent | (5,463) | [2] | (2,777) | [1] | ||||||
| Derivative Liability, Current | [2] | (19,628) | ||||||||
| Derivative Assets, current | [1] | 3,029 | ||||||||
| Reported Value Measurement [Member] | Currency Forward Contracts [Member] | ||||||||||
| Derivative Liability, Current | [3] | (1,084) | ||||||||
| Derivative Assets, current | [2] | (800) | ||||||||
| Estimate of Fair Value Measurement [Member] | ||||||||||
| Cash equivalents (including restricted cash accounts) | 30,483 | 34,832 | ||||||||
| Marketable securities (1) | 141 | [1] | 136 | |||||||
| Fair Value, Net Asset (Liability) | 4,449 | 34,420 | ||||||||
| Estimate of Fair Value Measurement [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||
| Derivative Asset, noncurrent | (5,463) | [2] | (2,777) | [1] | ||||||
| Derivative Liability, Current | [2] | (19,628) | ||||||||
| Derivative Assets, current | [1] | 3,029 | ||||||||
| Estimate of Fair Value Measurement [Member] | Currency Forward Contracts [Member] | ||||||||||
| Derivative Liability, Current | [3] | (1,084) | ||||||||
| Derivative Assets, current | [2] | (800) | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||||||||||
| Cash equivalents (including restricted cash accounts) | 30,483 | 34,832 | ||||||||
| Marketable securities (1) | 141 | [1] | 136 | |||||||
| Fair Value, Net Asset (Liability) | 30,624 | 34,968 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||
| Derivative Asset, noncurrent | 0 | [2] | 0 | [1] | ||||||
| Derivative Liability, Current | [2] | 0 | ||||||||
| Derivative Assets, current | [1] | 0 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Currency Forward Contracts [Member] | ||||||||||
| Derivative Liability, Current | [3] | 0 | ||||||||
| Derivative Assets, current | [2] | 0 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
| Cash equivalents (including restricted cash accounts) | 0 | 0 | ||||||||
| Marketable securities (1) | 0 | [1] | 0 | |||||||
| Fair Value, Net Asset (Liability) | (26,175) | (548) | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||
| Derivative Asset, noncurrent | (5,463) | [2] | (2,777) | [1] | ||||||
| Derivative Liability, Current | [2] | (19,628) | ||||||||
| Derivative Assets, current | [1] | 3,029 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Currency Forward Contracts [Member] | ||||||||||
| Derivative Liability, Current | [3] | (1,084) | ||||||||
| Derivative Assets, current | [2] | (800) | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||||||
| Cash equivalents (including restricted cash accounts) | 0 | 0 | ||||||||
| Marketable securities (1) | 0 | [1] | 0 | |||||||
| Fair Value, Net Asset (Liability) | 0 | 0 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Cross Currency Interest Rate Contract [Member] | ||||||||||
| Derivative Asset, noncurrent | 0 | [2] | 0 | [1] | ||||||
| Derivative Liability, Current | [2] | 0 | ||||||||
| Derivative Assets, current | [1] | 0 | ||||||||
| Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Currency Forward Contracts [Member] | ||||||||||
| Derivative Liability, Current | [3] | $ 0 | ||||||||
| Derivative Assets, current | [2] | $ 0 | ||||||||
| ||||||||||
Note 4 - Fair Value of Financial Instruments - Amounts of Gain (Loss) Recognized in Condensed Consolidated Statements on Derivative Instruments Not Designated as Hedges (Details) - Derivatives and Foreign Currency Transaction Gains (Losses) [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|||||
| Currency Forward Contracts [Member] | ||||||||
| Amount of gain (loss) recognized | [1] | $ (1,090) | $ (678) | $ (3,817) | $ (5,384) | |||
| Cross Currency Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||||||||
| Amount of gain (loss) recognized | [2] | $ (7,011) | $ (3,121) | $ (17,564) | $ (38,536) | |||
| ||||||||
Note 4 - Fair Value of Financial Instruments - Effect of Cash Flow Hedge on Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|||
| Balance | $ 2,407,042 | $ 1,979,294 | $ 2,020,975 | $ 1,998,461 | ||
| Balance | 2,405,028 | 1,992,276 | 2,405,028 | 1,992,276 | ||
| Cross Currency Swap [Member] | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest [Member] | Designated as Hedging Instrument [Member] | ||||||
| Balance | 993 | 1,745 | 3,920 | 5,745 | ||
| Gain or (loss) recognized in Other comprehensive income (loss) | [1] | 2,262 | (3,338) | 9,888 | (42,753) | |
| Amount reclassified from Other comprehensive income (loss) into earnings | (7,011) | 3,121 | (17,564) | 38,536 | ||
| Balance | $ (3,756) | $ 1,528 | $ (3,756) | $ 1,528 | ||
| ||||||
Note 4 - Fair Value of Financial Instruments - Fair Value of Long-term Debt Approximates Its Carrying Amount, Exceptions (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
||
|---|---|---|---|---|
| Finance liability - Dixie Valley | $ 201.4 | $ 219.8 | ||
| Mizrahi Loan Agreement [Member] | ||||
| Loans | 65.2 | 71.4 | ||
| Convertible Senior Notes [Member] | ||||
| Notes | 419.8 | 505.3 | ||
| HSBC Loan Agreement [Member] | ||||
| Loans | 35.9 | 40.3 | ||
| Hapoalim Loan Agreement [Member] | ||||
| Loans | 83.2 | 91.1 | ||
| Hapoalim Loan Agreement 2023 [Member] | ||||
| Loans | 97.1 | |||
| Discount Loan Agreement [Member] | ||||
| Loans | 67.9 | 81.1 | ||
| Olkaria III Plant 4 Loan - DEG 2 [Member] | ||||
| Loans | 24.2 | 26.5 | ||
| Olkaria III plant 1 Loan - DEG 3 [Member] | ||||
| Loans | 21.3 | 23.3 | ||
| Platanares Loan - OPIC [Member] | ||||
| Loans | 72.1 | 80.2 | ||
| Amatitlan Loan [Member] | ||||
| Loans | 14.7 | |||
| Don A. Campbell 1 ("DAC1") [Member] | ||||
| Notes | 52.5 | 57.4 | ||
| USG Prudential - NV [Member] | ||||
| Notes | 22.2 | 23.7 | ||
| USG Prudential - ID [Member] | ||||
| Notes | 52.0 | 56.8 | ||
| USG DOE [Member] | ||||
| Notes | 29.0 | 32.8 | ||
| Senior Unsecured Bonds [Member] | ||||
| Senior Unsecured debt | 190.4 | 235.1 | ||
| Senior Unsecured Loan [Member] | ||||
| Senior Unsecured debt | 145.3 | 166.4 | ||
| Plumstriker Loan Agreement [Member] | ||||
| Loans | 11.2 | |||
| Estimate of Fair Value Measurement [Member] | ||||
| Finance liability - Dixie Valley | 201.4 | 219.8 | ||
| Other long-term debt | 7.5 | 9.2 | ||
| Estimate of Fair Value Measurement [Member] | Mizrahi Loan Agreement [Member] | ||||
| Loans | 65.2 | 71.4 | ||
| Estimate of Fair Value Measurement [Member] | Convertible Senior Notes [Member] | ||||
| Notes | 419.8 | 505.3 | ||
| Estimate of Fair Value Measurement [Member] | HSBC Loan Agreement [Member] | ||||
| Loans | 35.9 | 40.3 | ||
| Estimate of Fair Value Measurement [Member] | Hapoalim Loan Agreement [Member] | ||||
| Loans | 83.2 | 91.1 | ||
| Estimate of Fair Value Measurement [Member] | Hapoalim Loan Agreement 2023 [Member] | ||||
| Loans | 97.1 | 0.0 | ||
| Estimate of Fair Value Measurement [Member] | Discount Loan Agreement [Member] | ||||
| Loans | 67.9 | 81.1 | ||
| Estimate of Fair Value Measurement [Member] | Olkaria III OPIC [Member] | ||||
| Loans | 118.9 | 134.2 | ||
| Estimate of Fair Value Measurement [Member] | Olkaria III Plant 4 Loan - DEG 2 [Member] | ||||
| Loans | 24.2 | 26.5 | ||
| Estimate of Fair Value Measurement [Member] | Olkaria III plant 1 Loan - DEG 3 [Member] | ||||
| Loans | 21.3 | 23.3 | ||
| Estimate of Fair Value Measurement [Member] | Platanares Loan - OPIC [Member] | ||||
| Loans | 72.1 | 80.2 | ||
| Estimate of Fair Value Measurement [Member] | Amatitlan Loan [Member] | ||||
| Loans | 0.0 | 14.7 | ||
| Estimate of Fair Value Measurement [Member] | OFC Two Senior Secured Notes [Member] | ||||
| Notes | 135.6 | 149.8 | ||
| Estimate of Fair Value Measurement [Member] | Don A. Campbell 1 ("DAC1") [Member] | ||||
| Notes | 52.5 | 57.4 | ||
| Estimate of Fair Value Measurement [Member] | USG Prudential - NV [Member] | ||||
| Notes | 22.2 | 23.7 | ||
| Estimate of Fair Value Measurement [Member] | USG Prudential - ID [Member] | ||||
| Notes | 52.0 | 56.8 | ||
| Estimate of Fair Value Measurement [Member] | USG DOE [Member] | ||||
| Notes | 29.0 | 32.8 | ||
| Estimate of Fair Value Measurement [Member] | Senior Unsecured Bonds [Member] | ||||
| Senior Unsecured debt | 190.4 | 235.1 | ||
| Estimate of Fair Value Measurement [Member] | Senior Unsecured Loan [Member] | ||||
| Senior Unsecured debt | 145.3 | 166.4 | ||
| Estimate of Fair Value Measurement [Member] | Plumstriker Loan Agreement [Member] | ||||
| Loans | 0.0 | 11.2 | ||
| Reported Value Measurement [Member] | ||||
| Finance liability - Dixie Valley | [1] | 225.8 | 242.0 | |
| Other long-term debt | [1] | 8.1 | 10.4 | |
| Reported Value Measurement [Member] | Mizrahi Loan Agreement [Member] | ||||
| Loans | [1] | 65.6 | 70.3 | |
| Reported Value Measurement [Member] | Convertible Senior Notes [Member] | ||||
| Notes | [1] | 431.3 | 431.3 | |
| Reported Value Measurement [Member] | HSBC Loan Agreement [Member] | ||||
| Loans | [1] | 35.7 | 42.9 | |
| Reported Value Measurement [Member] | Hapoalim Loan Agreement [Member] | ||||
| Loans | [1] | 89.3 | 98.2 | |
| Reported Value Measurement [Member] | Hapoalim Loan Agreement 2023 [Member] | ||||
| Loans | 95.0 | 0.0 | ||
| Reported Value Measurement [Member] | Discount Loan Agreement [Member] | ||||
| Loans | [1] | 75.0 | 87.5 | |
| Reported Value Measurement [Member] | Olkaria III OPIC [Member] | ||||
| Loans | [1] | 125.2 | 138.7 | |
| Reported Value Measurement [Member] | Olkaria III Plant 4 Loan - DEG 2 [Member] | ||||
| Loans | [1] | 25.0 | 27.5 | |
| Reported Value Measurement [Member] | Olkaria III plant 1 Loan - DEG 3 [Member] | ||||
| Loans | [1] | 21.8 | 24.0 | |
| Reported Value Measurement [Member] | Platanares Loan - OPIC [Member] | ||||
| Loans | [1] | 73.7 | 79.9 | |
| Reported Value Measurement [Member] | Amatitlan Loan [Member] | ||||
| Loans | [1] | 0.0 | 15.8 | |
| Reported Value Measurement [Member] | OFC Two Senior Secured Notes [Member] | ||||
| Notes | [1] | 146.7 | 158.0 | |
| Reported Value Measurement [Member] | Don A. Campbell 1 ("DAC1") [Member] | ||||
| Notes | [1] | 58.8 | 62.7 | |
| Reported Value Measurement [Member] | USG Prudential - NV [Member] | ||||
| Notes | [1] | 24.3 | 25.0 | |
| Reported Value Measurement [Member] | USG Prudential - ID [Member] | ||||
| Notes | [1] | 58.9 | 61.6 | |
| Reported Value Measurement [Member] | USG DOE [Member] | ||||
| Notes | [1] | 30.1 | 32.8 | |
| Reported Value Measurement [Member] | Senior Unsecured Bonds [Member] | ||||
| Senior Unsecured debt | [1] | 209.2 | 255.8 | |
| Reported Value Measurement [Member] | Senior Unsecured Loan [Member] | ||||
| Senior Unsecured debt | [1] | 158.0 | 174.8 | |
| Reported Value Measurement [Member] | Plumstriker Loan Agreement [Member] | ||||
| Loans | [1] | $ 0.0 | $ 11.4 | |
| ||||
Note 4 - Fair Value of Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Finance liability - Dixie Valley | $ 201.4 | $ 219.8 |
| Deposits | 21.2 | 13.9 |
| Mizrahi Loan Agreement [Member] | ||
| Loans | 65.2 | 71.4 |
| Convertible Senior Notes [Member] | ||
| Notes | 419.8 | 505.3 |
| HSBC Loan Agreement [Member] | ||
| Loans | 35.9 | 40.3 |
| Hapoalim Loan Agreement [Member] | ||
| Loans | 83.2 | 91.1 |
| Hapoalim Loan Agreement 2023 [Member] | ||
| Loans | 97.1 | |
| Discount Loan Agreement [Member] | ||
| Loans | 67.9 | 81.1 |
| Olkaria III Loan DFC [Member] | ||
| Loans | 118.9 | 134.2 |
| Olkaria III Plant 4 Loan - DEG 2 [Member] | ||
| Loans | 24.2 | 26.5 |
| Olkaria III plant 1 Loan - DEG 3 [Member] | ||
| Loans | 21.3 | 23.3 |
| Platanares Loan - OPIC [Member] | ||
| Loans | 72.1 | 80.2 |
| Amatitlan Loan [Member] | ||
| Loans | 14.7 | |
| OFC Senior Secured Notes [Member] | ||
| Notes | 135.6 | 149.8 |
| Don A. Campbell 1 ("DAC1") [Member] | ||
| Notes | 52.5 | 57.4 |
| USG Prudential - NV [Member] | ||
| Notes | 22.2 | 23.7 |
| USG Prudential - ID [Member] | ||
| Notes | 52.0 | 56.8 |
| USG DOE [Member] | ||
| Notes | 29.0 | 32.8 |
| Senior Unsecured Bonds [Member] | ||
| Senior Unsecured debt | 190.4 | 235.1 |
| Senior Unsecured Loan [Member] | ||
| Senior Unsecured debt | 145.3 | 166.4 |
| Other Long-term Debt [Member] | ||
| Senior Unsecured debt | 7.5 | 9.2 |
| Plumstriker Loan Agreement [Member] | ||
| Loans | 11.2 | |
| Fair Value, Inputs, Level 1 [Member] | ||
| Finance liability - Dixie Valley | 0.0 | 0.0 |
| Deposits | 21.2 | 13.9 |
| Fair Value, Inputs, Level 1 [Member] | Mizrahi Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Convertible Senior Notes [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | HSBC Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Hapoalim Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Hapoalim Loan Agreement 2023 [Member] | ||
| Loans | 0.0 | |
| Fair Value, Inputs, Level 1 [Member] | Discount Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Olkaria III Loan DFC [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Olkaria III Plant 4 Loan - DEG 2 [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Olkaria III plant 1 Loan - DEG 3 [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Platanares Loan - OPIC [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Amatitlan Loan [Member] | ||
| Loans | 0.0 | |
| Fair Value, Inputs, Level 1 [Member] | OFC Senior Secured Notes [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Don A. Campbell 1 ("DAC1") [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | USG Prudential - NV [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | USG Prudential - ID [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | USG DOE [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Senior Unsecured Bonds [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Senior Unsecured Loan [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Other Long-term Debt [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 1 [Member] | Plumstriker Loan Agreement [Member] | ||
| Loans | 0.0 | |
| Fair Value, Inputs, Level 2 [Member] | ||
| Finance liability - Dixie Valley | 0.0 | 0.0 |
| Deposits | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Mizrahi Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Convertible Senior Notes [Member] | ||
| Notes | 419.8 | 505.3 |
| Fair Value, Inputs, Level 2 [Member] | HSBC Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Hapoalim Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Hapoalim Loan Agreement 2023 [Member] | ||
| Loans | 0.0 | |
| Fair Value, Inputs, Level 2 [Member] | Discount Loan Agreement [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Olkaria III Loan DFC [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Olkaria III Plant 4 Loan - DEG 2 [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Olkaria III plant 1 Loan - DEG 3 [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Platanares Loan - OPIC [Member] | ||
| Loans | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Amatitlan Loan [Member] | ||
| Loans | 14.7 | |
| Fair Value, Inputs, Level 2 [Member] | OFC Senior Secured Notes [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Don A. Campbell 1 ("DAC1") [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | USG Prudential - NV [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | USG Prudential - ID [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | USG DOE [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Senior Unsecured Bonds [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Senior Unsecured Loan [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Other Long-term Debt [Member] | ||
| Senior Unsecured debt | 0.0 | 0.0 |
| Fair Value, Inputs, Level 2 [Member] | Plumstriker Loan Agreement [Member] | ||
| Loans | 11.2 | |
| Fair Value, Inputs, Level 3 [Member] | ||
| Finance liability - Dixie Valley | 201.4 | 219.8 |
| Deposits | 0.0 | 0.0 |
| Fair Value, Inputs, Level 3 [Member] | Mizrahi Loan Agreement [Member] | ||
| Loans | 65.2 | 71.4 |
| Fair Value, Inputs, Level 3 [Member] | Convertible Senior Notes [Member] | ||
| Notes | 0.0 | 0.0 |
| Fair Value, Inputs, Level 3 [Member] | HSBC Loan Agreement [Member] | ||
| Loans | 35.9 | 40.3 |
| Fair Value, Inputs, Level 3 [Member] | Hapoalim Loan Agreement [Member] | ||
| Loans | 83.2 | 91.1 |
| Fair Value, Inputs, Level 3 [Member] | Hapoalim Loan Agreement 2023 [Member] | ||
| Loans | 97.1 | |
| Fair Value, Inputs, Level 3 [Member] | Discount Loan Agreement [Member] | ||
| Loans | 67.9 | 81.1 |
| Fair Value, Inputs, Level 3 [Member] | Olkaria III Loan DFC [Member] | ||
| Loans | 118.9 | 134.2 |
| Fair Value, Inputs, Level 3 [Member] | Olkaria III Plant 4 Loan - DEG 2 [Member] | ||
| Loans | 24.2 | 26.5 |
| Fair Value, Inputs, Level 3 [Member] | Olkaria III plant 1 Loan - DEG 3 [Member] | ||
| Loans | 21.3 | 23.3 |
| Fair Value, Inputs, Level 3 [Member] | Platanares Loan - OPIC [Member] | ||
| Loans | 72.1 | 80.2 |
| Fair Value, Inputs, Level 3 [Member] | Amatitlan Loan [Member] | ||
| Loans | 0.0 | |
| Fair Value, Inputs, Level 3 [Member] | OFC Senior Secured Notes [Member] | ||
| Notes | 135.6 | 149.8 |
| Fair Value, Inputs, Level 3 [Member] | Don A. Campbell 1 ("DAC1") [Member] | ||
| Notes | 52.5 | 57.4 |
| Fair Value, Inputs, Level 3 [Member] | USG Prudential - NV [Member] | ||
| Notes | 22.2 | 23.7 |
| Fair Value, Inputs, Level 3 [Member] | USG Prudential - ID [Member] | ||
| Notes | 52.0 | 56.8 |
| Fair Value, Inputs, Level 3 [Member] | USG DOE [Member] | ||
| Notes | 29.0 | 32.8 |
| Fair Value, Inputs, Level 3 [Member] | Senior Unsecured Bonds [Member] | ||
| Senior Unsecured debt | 190.4 | 235.1 |
| Fair Value, Inputs, Level 3 [Member] | Senior Unsecured Loan [Member] | ||
| Senior Unsecured debt | 145.3 | 166.4 |
| Fair Value, Inputs, Level 3 [Member] | Other Long-term Debt [Member] | ||
| Senior Unsecured debt | $ 7.5 | 9.2 |
| Fair Value, Inputs, Level 3 [Member] | Plumstriker Loan Agreement [Member] | ||
| Loans | $ 0.0 |
Note 5 - Stock-based Compensation (Details Textual) - The 2018 Incentive Compensation Plan [Member] - $ / shares |
1 Months Ended | 9 Months Ended | |
|---|---|---|---|
May 01, 2023 |
Mar. 31, 2023 |
Sep. 30, 2023 |
|
| Restricted Stock Units (RSUs) [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 11,852 | 174,422 | |
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 79.9 | $ 82.9 | |
| Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 1 year | ||
| Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 4 years | ||
| Performance Stock Units (PSU) [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 35,081 | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 79.6 | ||
| Performance Stock Units (PSU) [Member] | Minimum [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year) | 1 year |
Note 5 - Stock-based Compensation - Fair Value of Stock-based Award on the Date of Grant (Details) |
1 Months Ended | 9 Months Ended |
|---|---|---|
May 31, 2023 |
Sep. 30, 2023 |
|
| Restricted Stock Units (RSUs), and Performance Stock Units (PSU) [Member] | ||
| Dividend yield | 0.59% | |
| Restricted Stock Units (RSUs), and Performance Stock Units (PSU) [Member] | Minimum [Member] | ||
| Risk-free interest rates | 3.86% | |
| Expected life (in years) (Year) | 2 years | |
| Expected volatility (weighted average) | 36.00% | |
| Restricted Stock Units (RSUs), and Performance Stock Units (PSU) [Member] | Maximum [Member] | ||
| Risk-free interest rates | 4.68% | |
| Expected life (in years) (Year) | 5 years 9 months | |
| Expected volatility (weighted average) | 42.20% | |
| Restricted Stock Units (RSUs) [Member] | ||
| Risk-free interest rates | 4.70% | |
| Expected life (in years) (Year) | 1 year | |
| Dividend yield | 0.56% | |
| Expected volatility (weighted average) | 34.80% |
Note 6 - Interest Expense, Net - Components of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Interest related to sale of tax benefits | $ 5,304 | $ 3,734 | $ 12,255 | $ 10,628 |
| Interest expense | 24,362 | 23,023 | 74,144 | 68,001 |
| Less — amount capitalized | (4,612) | (4,354) | (13,321) | (14,727) |
| Total interest expense, net | $ 25,054 | $ 22,403 | $ 73,078 | $ 63,902 |
Note 7 - Earnings Per Share (Details Textual) - $ / shares |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2023 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 85,400 | 27,400 | 21,400 | 58,000 | |
| Convertible Senior Notes [Member] | |||||
| Debt Instrument, Convertible, Conversion Price (in dollars per share) | $ 90.27 | ||||
Note 7 - Earnings Per Share - Shares Used to Calculate Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Weighted average number of shares used in computation of basic earnings per share: (in shares) | 60,299 | 55,999 | 59,105 | 56,058 |
| Additional shares from the assumed exercise of employee stock awards (in shares) | 271 | 458 | 389 | 421 |
| Weighted average number of shares used in computation of diluted earnings per share (in shares) | 60,570 | 56,457 | 59,494 | 56,479 |
Note 8 - Business Segments (Details Textual) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
| Number of Reportable Segments | 3 | ||||
| Revenue from Contract with Customer, Including Assessed Tax | $ 208,056 | $ 175,885 | $ 588,084 | $ 528,673 | |
| Goodwill | 90,269 | 90,269 | $ 90,325 | ||
| Electricity Segment [Member] | |||||
| Goodwill | 85,600 | 85,100 | 85,600 | 85,100 | |
| Electricity Segment [Member] | Accounted for Under ASC 606 [Member] | |||||
| Revenue from Contract with Customer, Including Assessed Tax | 27,300 | 25,600 | 90,200 | 71,600 | |
| Energy Storage and Management Services [Member] | |||||
| Goodwill | 4,600 | 4,600 | 4,600 | 4,600 | |
| Product Segment [Member] | |||||
| Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | |
Note 8 - Business Segments - Summarized Financial Information Concerning Reportable Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|||||||||||||||
| Revenue | $ 208,056 | $ 175,885 | $ 588,084 | $ 528,673 | |||||||||||||||
| Operating income (loss) | 37,567 | 38,893 | 114,957 | 122,578 | |||||||||||||||
| Segment assets at period end | 5,010,812 | [1],[2] | 4,524,531 | [1],[2] | 5,010,812 | [1],[2] | 4,524,531 | [1],[2] | $ 4,611,579 | ||||||||||
| UNITED STATES | |||||||||||||||||||
| Revenue | 121,874 | [3] | 116,605 | [3] | 365,082 | 353,624 | |||||||||||||
| Non-US [Member] | |||||||||||||||||||
| Revenue | 86,182 | [4] | 59,280 | [4] | 223,002 | 175,049 | |||||||||||||
| Segment Reconciling Items [Member] | |||||||||||||||||||
| Revenue | 0 | [5] | 0 | [5] | 0 | 0 | |||||||||||||
| Segment assets at period end | 128,218 | 117,182 | 128,218 | 117,182 | |||||||||||||||
| Electricity Segment [Member] | Operating Segments [Member] | |||||||||||||||||||
| Revenue | 157,212 | 152,820 | 482,846 | 466,540 | |||||||||||||||
| Operating income (loss) | 34,787 | 38,054 | 120,457 | 128,049 | |||||||||||||||
| Segment assets at period end | [1],[2] | 4,481,600 | 4,153,330 | 4,481,600 | 4,153,330 | ||||||||||||||
| Electricity Segment [Member] | Operating Segments [Member] | UNITED STATES | |||||||||||||||||||
| Revenue | 108,762 | [3] | 106,490 | [3] | 337,382 | 327,792 | |||||||||||||
| Electricity Segment [Member] | Operating Segments [Member] | Non-US [Member] | |||||||||||||||||||
| Revenue | 48,450 | [4] | 46,330 | [4] | 145,464 | 138,748 | |||||||||||||
| Electricity Segment [Member] | Segment Reconciling Items [Member] | |||||||||||||||||||
| Revenue | 0 | [5] | 0 | [5] | 0 | 0 | |||||||||||||
| Segment assets at period end | 128,218 | 117,182 | 128,218 | 117,182 | |||||||||||||||
| Product Segment [Member] | Operating Segments [Member] | |||||||||||||||||||
| Revenue | 39,831 | 14,217 | 83,331 | 39,237 | |||||||||||||||
| Operating income (loss) | (158) | (1,429) | (4,009) | ||||||||||||||||
| Segment assets at period end | [1],[2] | 190,157 | 128,790 | 190,157 | 128,790 | ||||||||||||||
| Product Segment [Member] | Operating Segments [Member] | UNITED STATES | |||||||||||||||||||
| Revenue | 2,099 | [3] | 1,267 | [3] | 5,793 | 2,936 | |||||||||||||
| Operating income (loss) | 2,374 | ||||||||||||||||||
| Product Segment [Member] | Operating Segments [Member] | Non-US [Member] | |||||||||||||||||||
| Revenue | 37,732 | [4] | 12,950 | [4] | 77,538 | 36,301 | |||||||||||||
| Product Segment [Member] | Segment Reconciling Items [Member] | |||||||||||||||||||
| Revenue | 6,747 | [5] | 14,959 | [5] | 27,437 | 57,959 | |||||||||||||
| Segment assets at period end | 0 | 0 | 0 | 0 | |||||||||||||||
| Other Segments [Member] | Operating Segments [Member] | |||||||||||||||||||
| Revenue | 11,013 | 8,848 | 21,907 | 22,896 | |||||||||||||||
| Operating income (loss) | 406 | 997 | (4,071) | (1,462) | |||||||||||||||
| Segment assets at period end | [1],[2] | 339,055 | 242,411 | 339,055 | 242,411 | ||||||||||||||
| Other Segments [Member] | Operating Segments [Member] | UNITED STATES | |||||||||||||||||||
| Revenue | 11,013 | [3] | 8,848 | [3] | 21,907 | 22,896 | |||||||||||||
| Other Segments [Member] | Operating Segments [Member] | Non-US [Member] | |||||||||||||||||||
| Revenue | 0 | [4] | 0 | [4] | 0 | 0 | |||||||||||||
| Other Segments [Member] | Segment Reconciling Items [Member] | |||||||||||||||||||
| Revenue | 0 | [5] | 0 | [5] | 0 | 0 | |||||||||||||
| Segment assets at period end | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||
| |||||||||||||||||||
Note 8 - Business Segments - Reconciling Information Between Reportable Segments and Consolidated Totals (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Revenue | $ 208,056 | $ 175,885 | $ 588,084 | $ 528,673 |
| Operating income (loss) | 37,567 | 38,893 | 114,957 | 122,578 |
| Interest income | 2,827 | 1,659 | 9,620 | 2,180 |
| Interest expense, net | (25,054) | (22,403) | (73,078) | (63,902) |
| Derivatives and foreign currency transaction gains (losses) | (781) | (293) | (3,990) | (4,031) |
| Income attributable to sale of tax benefits | 14,936 | 9,113 | 42,481 | 26,345 |
| Other non-operating income (expense), net | 108 | 673 | 247 | (512) |
| Total consolidated income before income taxes and equity in income of investees | 29,603 | 27,642 | 90,237 | 82,658 |
| Intersegment Eliminations [Member] | ||||
| Revenue | 6,747 | 14,959 | 27,437 | 57,959 |
| Consolidation, Eliminations [Member] | ||||
| Revenue | $ (6,747) | $ (14,959) | $ (27,437) | $ (57,959) |
Note 9 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Construction in Progress, Gross | $ 841,536 | $ 893,198 |
| Dixie Meadows PPA [Member] | ||
| Construction in Progress, Gross | $ 84,900 |
Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jul. 28, 2023 |
Jun. 27, 2023 |
Jun. 26, 2023 |
Sep. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Effective Income Tax Rate Reconciliation, Percent | 24.10% | 26.10% | 2.40% | 28.50% | ||||
| Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||||||
| Income Tax Expense (Benefit) | $ (7,134) | $ 7,227 | $ (2,205) | $ 23,520 | ||||
| Kenya [Member] | ||||||||
| Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 30.00% | 30.00% | 37.50% | 30.00% | ||||
| Income Tax Expense (Benefit) | $ (9,400) | |||||||
Note 11 - Subsequent Events (Details Textual) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Nov. 08, 2023
USD ($)
$ / shares
|
Nov. 01, 2023
USD ($)
|
Oct. 27, 2023
USD ($)
|
Oct. 23, 2023
USD ($)
|
Oct. 19, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
$ / shares
|
Jun. 30, 2023
USD ($)
$ / shares
|
Mar. 31, 2023
USD ($)
$ / shares
|
Sep. 30, 2022
USD ($)
$ / shares
|
Jun. 30, 2022
USD ($)
|
Mar. 31, 2022
USD ($)
|
Oct. 07, 2023 |
|
| Dividends, Common Stock | $ 7,228 | $ 7,229 | $ 6,732 | $ 6,719 | $ 6,731 | $ 6,727 | ||||||
| Common Stock, Dividends, Per Share, Declared (in dollars per share) | $ / shares | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | ||||||||
| Agreement With Barak Capital Underwriting [Member] | ||||||||||||
| Proceeds from Issuance of Commercial Paper | $ 73,500 | |||||||||||
| Agreement With Barak Capital Underwriting [Member] | Secured Overnight Financing Rate (SOFR) [Member] | ||||||||||||
| Debt Instrument, Basis Spread on Variable Rate | 1.10% | |||||||||||
| Subsequent Event [Member] | ||||||||||||
| Dividends, Common Stock | $ 7,200 | |||||||||||
| Common Stock, Dividends, Per Share, Declared (in dollars per share) | $ / shares | $ 0.12 | |||||||||||
| Percentage of Workforce | 4.00% | |||||||||||
| Dividends Payable, Date of Record | Nov. 22, 2023 | |||||||||||
| Dividends Payable, Date to be Paid | Dec. 06, 2023 | |||||||||||
| Subsequent Event [Member] | ISRAEL | ||||||||||||
| Percentage of Workforce | 10.00% | |||||||||||
| Subsequent Event [Member] | Mizrahi 2023 Loan Agreement [Member] | ||||||||||||
| Debt Instrument, Face Amount | $ 50,000 | |||||||||||
| Debt Instrument, Number of Semi-annual Installment | 16 | |||||||||||
| Debt Instrument, Periodic Payment | $ 3,100 | |||||||||||
| Debt Instrument, Term (Year) | 8 years | |||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 7.15% | |||||||||||
| Debt Instrument, Covenant, Maximum Debt to EBITDA Ratio | 6 | |||||||||||
| Subsequent Event [Member] | Mizrahi 2023 Loan Agreement [Member] | Maximum [Member] | ||||||||||||
| Debt Instrument, Covenant, Minimum Equity Capital, Amount | $ 750,000 | |||||||||||
| Subsequent Event [Member] | Mizrahi 2023 Loan Agreement [Member] | Minimum [Member] | ||||||||||||
| Debt Instrument, Covenant, Equity Capital to Total Assets, Percent | 25.00% | |||||||||||
| Subsequent Event [Member] | Geothermal and Solar Assets [Member] | ||||||||||||
| Payments to Acquire Productive Assets | $ 271,000 | |||||||||||
| Subsequent Event [Member] | North Valley Geothermal Power Plant Project [Member] | ||||||||||||
| Proceeds from Partnership Contribution | $ 43,100 | |||||||||||
| Equity Transaction, Additional Capital Installment Expected | $ 6,100 | |||||||||||
| Equity Transaction, Percentage of Distributable Cash, Investor Not Reaches Target Return | 100.00% | |||||||||||
| Equity Transaction, Percentage of Taxes, Investor Not Reaches Target Return | 99.00% | |||||||||||
| Equity Transaction, Percentage of Taxes, Afterwards | 5.00% | |||||||||||
| Subsequent Event [Member] | North Valley Geothermal Power Plant Project [Member] | Ormat Nevada Inc. [Member] | ||||||||||||
| Equity Transaction, Percentage of Distributable Cash and Taxable Income, Investor Reaches Target Return | 97.50% | |||||||||||
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