Note 1 - General and Basis of Presentation

6 Months Ended

Jun. 30, 2016

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 consolidated financial position as of June 30, 2016, the consolidated results of operations and comprehensive income (loss) for the six-month periods ended June 30, 2016 and 2015 and the consolidated cash flows for the six-month periods ended June 30, 2016 and 2015.

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 six-month period ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016.

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, 2015. The condensed consolidated balance sheet data as of December 31, 2015 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2015, 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.

Alevo transaction

On March 30, 2016, the Company signed an agreement with a subsidiary of Alevo Group SA (“Alevo”), a leading provider of energy storage systems, to jointly build, own and operate the Rabbit Hill Energy Storage Project (“Rabbit Hill”) located in Georgetown, Texas. The Company will own and fund the majority of the costs associated with Rabbit Hill and, under the terms of the agreement, will provide engineering and construction services and balance of plant equipment. Alevo will provide its innovative GridBank™ inorganic lithium ion energy storage system in conjunction with the power conversion systems. In addition, Alevo will provide ongoing management and operations and maintenance services for the life of the project. The Company will hold an 85% interest in the Rabbit Hill project entity which will decrease to 50.1% after reaching certain Internal Rate of Return (“IRR”) targets. The Company will consolidate Rabbit Hill as a majority owned indirect subsidiary.

Northleaf Transaction

On April 30, 2015, Ormat Nevada Inc. (“Ormat Nevada”), a wholly-owned subsidiary of the Company, closed the sale of approximately 36.75% of the aggregate membership interests in ORPD LLC (“ORPD”), a holding company and subsidiary of Ormat Nevada that indirectly owns the Puna geothermal power plant in Hawaii, the Don A. Campbell geothermal power plant in Nevada, and nine power plant units across three recovered energy generation assets known as OREG 1, OREG 2 and OREG 3, to Northleaf Geothermal Holdings, LLC (“Northleaf”).

We are currently conducting the required power generation tests to determine the final capacity attributable to the second phase of the Don A. Campbell power plant and upon Ormat Nevada's contribution of the project to ORPD, Northleaf will pay to Ormat Nevada an amount equal to Northleaf's proportionate interest in ORPD multiplied by the value of the project to be contributed. We estimate that Ormat Nevada will receive approximately $43 million cash in connection with the contribution which is expected in the third quarter of 2016.

OFC Senior Secured Notes prepayment

In June 2015, the Company repurchased $30.6 million aggregate principal amount of its OFC Senior Secured Notes from the OFC noteholders. As a result of the repurchase, the Company recognized a loss of $1.7 million, including amortization of deferred financing costs of $0.5 million, which was included in other non-operating income (expense), net in the consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2015.

Other comprehensive income

For the six months ended June 30, 2016 and 2015, the Company classified $5,000 and $15,000, respectively, from accumulated other comprehensive income, of which $10,000 and $25,000, respectively, were recorded to reduce interest expense and $5,000 and $10,000, respectively, were recorded against the income tax provision, in the condensed consolidated statements of operations and comprehensive income. For the three months ended June 30, 2016 and 2015, the Company classified $2,000 and $8,000, respectively, related to derivative instruments designated as cash flow hedges, from accumulated other comprehensive income, of which $6,000 and $14,000, respectively, were recorded to reduce interest expense and $4,000 and $5,000, respectively, were recorded against the income tax provision, in the condensed consolidated statements of operations and comprehensive income. The accumulated net loss included in Other comprehensive income as of June 30, 2016, is $582,000

Write-offs of unsuccessful exploration activities

Write-offs of unsuccessful exploration activities for the three and six months ended June 30, 2016 were $0.9 million and $1.4 million, respectively, and $0 and $0.2 million for the three and six months ended June 30, 2015, respectively. These write-offs of exploration costs are related to the Company’s exploration activities in Nevada and Chile, which the Company determined would not support commercial operations.

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 June 30, 2016 and December 31, 2015, the Company had deposits totaling $18.6 million and $19.0 million, respectively, in seven U.S. financial institutions that were federally insured up to $250,000 per account. At June 30, 2016 and December 31, 2015, the Company’s deposits in foreign countries amounted to approximately $186.6 million and $181.0 million, respectively.

At June 30, 2016 and December 31, 2015, accounts receivable related to operations in foreign countries amounted to approximately $34.7 million and $27.8 million, respectively. At June 30, 2016 and December 31, 2015, accounts receivable from the Company’s primary customers amounted to approximately 59% and 66%, respectively, of the Company’s accounts receivable.

Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy, Inc.) accounted for 19.1% and 20.1% of the Company’s total revenues for the three months ended June 30, 2016 and 2015, respectively, and 21.1% and 21.9% for the six months ended June 30, 2016 and 2015, respectively.

Kenya Power and Lighting Co. Ltd. accounted for 17.1% and 15.4% of the Company’s total revenues for the three months ended June 30, 2016 and 2015, respectively, and 17.2% and 16.5% for the six months ended June 30, 2016 and 2015, respectively.

Southern California Public Power Authority accounted for 10.4% and 4.1% of the Company’s total revenues for the three months ended June 30, 2016 and 2015, respectively, and 11.2% and 4.9% for the six months ended June 30, 2016 and 2015, 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.