Note 1 - General and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Disclosure Text Block [Abstract]

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 consolidated financial position as of September 30, 2014, the consolidated results of operations and comprehensive income for the three and nine-month periods ended September 30, 2014 and 2013 and the consolidated cash flows for the nine-month periods ended September 30, 2014 and 2013.

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 three and nine-month periods ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.

These condensed 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, 2013. The condensed consolidated balance sheet data as of December 31, 2013 was derived from the audited consolidated financial statements for the year ended December 31, 2013, 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.

Other comprehensive income

For the nine months ended September 30, 2014 and 2013, the Company reclassified $107,000 and $124,000, respectively, from other comprehensive income, of which $173,000 and $200,000, respectively, were recorded to reduce interest expense and $66,000 and $88,000, respectively, were recorded against the income tax provision, in the condensed consolidated statements of operations and comprehensive income. For the three months ended September 30, 2014 and 2013, the Company reclassified $35,000 and $40,000, respectively, from other comprehensive income, of which $57,000 and $76,000, respectively, were recorded to reduce interest expense and $22,000 and $25,000, respectively, were recorded against the income tax provision, in the condensed consolidated statements of operations and comprehensive income.

Termination fee

On March 15, 2013, the Company finalized the agreement with Southern California Edison Company (“Southern California Edison”), by which the G1 and G3 Standard Offer #4 power purchase agreements (“PPAs”) were terminated and a termination fee of $9.0 million was recorded in the first quarter of 2013 in selling and marketing expenses. Under the agreement, the Company will continue to sell power from G2, the third plant of the Mammoth complex, under its existing PPA with Southern California Edison, with the term of the contract extended by an additional six years until early 2027.

Solar project sale

On March 26, 2014, the Company signed an agreement with RET Holdings, LLC to sell the Heber Solar project in Imperial County, California for $35.25 million. The Company received the first payment of $15.0 million during the first quarter of 2014 and the second payment for the remaining $20.25 million was paid in the second quarter of 2014. Due to certain contingencies in the sale agreement, the Company deferred the pre-tax gain of approximately $7.6 million until the contingencies were resolved in the second quarter of 2014.

Write-off of unsuccessful exploration activities

Write-off of unsuccessful activities for the nine months ended September, 30, 2014, was $8.1 million. This represents the write-off of exploration costs related to the Company’s exploration activities in the Wister site in California, which the Company determined in the second quarter of 2014 would not support commercial operations.

Acquisition of interests in Crump Geyser and North Valley Geothermal projects

On August 5, 2014, the Company signed a definitive Purchase and Sale Agreement with Alternative Earth Resources Inc. (“AER”), pursuant to which the Company paid $1.5 million in cash and (i) purchased AER's (a) 50% interest in Crump Geyser Company (“CGC”), which holds the rights to the Crump Geyser geothermal project, and (b) rights to the North Valley geothermal project (ii) obtained an option, exercisable over a four-year period, to purchase certain of AER's New Truckhaven geothermal lease. Prior to this transaction, CGC was consolidated by the Company as variable interest entity. As a result of the acquisition of the remaining interest, the Company continues to consolidate Crump, but now as a wholly owned indirect subsidiary, and so the carrying value of the non-controlling interest of CGC of $1.0 million was reclassified to the Company's equity and the difference of $0.2 million between the fair value of the consideration paid and the related carrying value of the nonconrolling interest acquired was recorded within “additional paid-in capital” in the condensed consolidated statement of equity.

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable.

The Company places its temporary cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At September 30, 2014 and December 31, 2013, the Company had deposits totaling $23,016,000 and $13,805,000, respectively, in seven U.S. financial institutions that were federally insured up to $250,000 per account. At September 30, 2014 and December 31, 2013, the Company’s deposits in foreign countries amounted to approximately $31,279,000 and $56,133,000, respectively.

At September 30, 2014 and December 31, 2013, accounts receivable related to operations in foreign countries amounted to approximately $42,914,000 and $32,231,000, respectively. At September 30, 2014 and December 31, 2013, accounts receivable from the Company’s primary customers (as described immediately below) amounted to approximately 54.1% and 35.0% of the Company’s accounts receivable, respectively.

Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy, Inc.) accounted for 14.6% and 15.3% of the Company’s total revenues for the three months ended September 30, 2014 and 2013, respectively, and 16.6% and 17.0% for the nine months ended September 30, 2014 and 2013, respectively.

Southern California Edison accounted for 19.8% and 20.9% of the Company’s total revenues for the three months ended September 30, 2014 and 2013, respectively, and 15.2% and 14.9% for the nine months ended September 30, 2014 and 2013, respectively.

Hawaii Electric Light Company accounted for 7.3% and 8.7% of the Company’s total revenues for the three months ended September 30, 2014 and 2013, respectively, and 8.8% and 8.9% for the nine months ended September 30, 2014 and 2013, respectively.

Kenya Power and Lighting Co. Ltd. accounted for 15.7% and 13.9% of the Company’s total revenues for the three months ended September 30, 2014 and 2013, respectively, and 15.6% and 10.9% for the nine months ended September 30, 2014 and 2013, respectively.

The Company performs ongoing credit evaluations of its customers’ financial condition. The Company has historically been able to collect on all of its receivable balances, and accordingly, no provision for doubtful accounts has been made.