FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2011

Fair Value Information for Financial Assets and Liabilities , as well as Cost or Amortized Cost

The following table sets forth certain fair value information at September 30, 2011 and December 31, 2010 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.


	Cost or Amortized Cost at September 30, 2011		Fair Value at September 30, 2011
	Cost or Amortized Cost at September 30, 2011		Total			Level 1		Level 2			Level 3
	(Dollars in thousands)
Assets
Current assets:
Cash equivalents (including restricted cash accounts)	$	45,274	$	45,274		$	45,274	$	—		$	—
Marketable Securities		20,867		21,190			21,190		—			—
Liabilities:
Current liabilities:
Derivatives⁽¹⁾		—		(12,227	)		—		(12,227	)		—

	$	66,141	$	54,237		$	66,464	$	(12,227	)	$	—


	Cost or Amortized Cost at December 31, 2010		Fair Value at December 31, 2010
	Cost or Amortized Cost at December 31, 2010		Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
Assets
Current assets:
Cash equivalents (including restricted cash accounts)	$	14,370	$	14,370	$	14,370	$	—	$	—
Derivatives⁽²⁾		—		1,030		—		1,030		—
Non-current assets:
Illiquid auction rate securities (including restricted cash accounts) ($4.5 million par value), see below⁽³⁾		4,011		3,027		—		—		3,027

	$	18,381	$	18,427	$	14,370	$	1,030	$	3,027

(1)

Including: (i) $11,052,000 relating to derivatives which represent interest rate lock transactions which are valued primarily based on observable inputs, including 10-year U.S. Treasury interest rates, and are included within “accounts payable and accrued expenses” in the balance sheet with the corresponding gain or loss being recognized within “interest expense, net” in the condensed consolidated statement of operations and comprehensive income (loss); and (ii) $1,175,000 relating to derivatives which represent currency forward contracts which are valued primarily based on observable inputs , including forward and spot prices for currencies, and are included within “accounts payable and accrued expenses in the balance sheet with the corresponding gain or loss being recognized within “foreign currency translation and transaction gains (losses)” in the condensed consolidated statement of operations and comprehensive income (loss).

(2)

Amounts relating to derivatives which represent currency forward contracts which are valued primarily based on observable inputs, including forward and spot prices for currencies, and are included within “receivables — others” in the balance sheet with the corresponding gain or loss being recognized within “foreign currency translation and transaction gains (losses)” in the condensed consolidated statement of operations and comprehensive income (loss).

(3)	Included in the consolidated balance sheets as follows:


	December 31, 2010
	(Dollars in thousands)
Long-term marketable securities	$	1,287
Long-term restricted cash, cash equivalents and marketable securities		1,740

	$	3,027

Summary of Changes in Fair Value of Company's Financial Assets Classified as Level 3

The table below sets forth a summary of the changes in the fair value of the Company’s financial assets as Level 3 (i.e., illiquid auction rate securities) for the nine-month periods ended September 30, 2011 and 2010:


	Nine Months Ended September 30,
	2011			2010
	(Dollars in thousands)
Balance at beginning of period	$	3,027		$	3,164
Total unrealized losses:
Included in net income		(205	)		—
Included in other comprehensive income (loss)		—			(135	)
Transferred to Level 2		(2,822	)		—

Balance at end of period	$	—		$	3,029

Fair Value of Long-term Debt Approximates Its Carrying Amount Except for the Following

The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:


	Fair Value				Carrying Amount
	September 30, 2011		December 31, 2010		September 30, 2011		December 31, 2010
	(Dollars in millions)				(Dollars in millions)
Olkaria III Loan	$	83.2	$	88.7	$	82.9	$	88.4
Amatitlan Loan		37.8		39.5		37.3		39.0
Senior Secured Notes:
Ormat Funding Corp. (“OFC”)		129.5		129.5		130.8		136.3
OrCal Geothermal Inc. (“OrCal”)		92.8		93.5		93.2		95.6
Senior Unsecured Bonds		252.8		144.8		248.3		142.0
Loans from institutional investors		34.2		37.1		34.2		37.2

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income, and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

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-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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