NOTE

— 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

March 31, 2019,

the consolidated results of operations and comprehensive income (loss), consolidated statements of equity and consolidated statements of cash flows for the

three

-month periods ended

March 31, 2019

and

2018.

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

-K for the year ended

December

31,

2018.

The condensed consolidated balance sheet data as of

December

31,

2018

was derived from the Company’s audited consolidated financial statements for the year ended

December

31,

2018

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.

Puna

May 3, 2018,

the Kilauea volcano located in close proximity to our Puna

MW geothermal power plant in the Puna district of Hawaii's Big Island erupted following a significant increase in seismic activity in the area. Before it stopped flowing, the lava covered the wellheads of

three

geothermal wells, monitoring wells and the substation of the Puna complex and an adjacent warehouse that stored a drilling rig that was also consumed by the lava. The insurance policy coverage for property and business interruption is provided by a consortium of insurers. All the insurers accepted and started paying for the costs to rebuild the destroyed substation, and during the

first

quarter of

2019,

we received an additional

$1.5

million of such proceeds. However only some of the insurers accepted that the business interruption coverage started in

May 2018

and during the

first

quarter of

2019,

we recorded an additional

$1.3

million of such proceeds which were included under cost of revenues in the condensed consolidated statements of operations and comprehensive income for the

three

months ended

March 31, 2019.

The Company is still in discussions to reach an understanding with all insurers to start paying for the business interruption as of

May 2018.

April 2019

the Company reached an agreement with another insurance company and received an additional

$4.1

million for current and future business interruption loss. The business interruption coverage compensates the Company for the loss of profits that resulted from the inability of the on-surface property to generate electricity.

The Company is still assessing the damages in the Puna facilities and continue to coordinate with Hawaii Electric Light Company (“HELCO”) and local authorities to bring the power plant back to operation. The Company continues to assess the accounting implications of this event on the assets and liabilities on its balance sheet and whether an impairment will be required. Any significant damage to the geothermal resource or continued shut-down following the lava event at the Puna facilities could have an adverse impact on the power plant's electricity generation and availability, which in turn could have a material adverse impact on our business and results of operations.

DEG

Loan

January 4, 2019,

an indirect subsidiary of the Company (“OrPower

4”

) entered into an additional

$41.5

million subordinated loan agreement with DEG (the “DEG

Loan Agreement”) and on

February 28, 2019,

OrPower

completed a drawdown of the full loan amount, with a fixed interest rate of

6.04%

for the duration of the loan (the “DEG

Loan”). The DEG

Loan will be repaid in

equal semi-annual principal installments commencing

June 21, 2019,

with a final maturity date of

June 21, 2028.

Proceeds of the DEG

Loan were used by OrPower

to refinance upgrades to Plant

of the Olkaria III Complex, which were originally financed using equity. The DEG

Loan is subordinated to the senior loan provided by OPIC for Plants

of the Olkaria III Complex. The DEG

Loan is guaranteed by the Company.

Migdal Senior Unsecured Loan

March 25, 2019,

the Company entered into a

first

addendum (“First Addendum”) to the loan agreement (the "Migdal Loan Agreement") with Migdal Insurance Company Ltd., Migdal Makefet Pension and Provident Funds Ltd. and Yozma Pension Fund of Self-Employed Ltd., all entities within the Migdal Group, a leading insurance company and institutional investor in Israel dated

March 22, 2018.

The First Addendum provides for an additional loan by the lenders to the Company in an aggregate principal amount of

$50.0

million (the “Additional Migdal Loan”). The Additional Migdal Loan will be repaid in

semi-annual payments of

$2.1

million each, commencing on

September 15, 2021,

with a final payment of

$18.5

million on

March 15, 2029.

The Additional Migdal Loan bears interest at a fixed rate of

4.6%

per annum, payable semi-annually, subject to adjustment in certain circumstances as described below.

The Additional Migdal Loan was entered into under substantially the same terms and conditions of the Migdal Loan Agreement as disclosed in the Company’s Form

-K for the year ended

December 31, 2018.

Write-offs of unsuccessful exploration activities

There were

write-offs of unsuccessful exploration activities for the

three

months ended

March 31, 2019.

Write-offs of unsuccessful exploration activities for the

three

months ended

March 31, 2018

were

$0.1

million.

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 reported on the balance sheet that sum to the total of the same amounts shown on the statement of cash flows:

	March 31,		December 31,		March 31,
	2019		2018		2018
	(Dollars in thousands)
Cash and cash equivalents	$	79,366	$	98,802	$	54,723
Restricted cash and cash equivalents		93,098		78,693	$	50,332
Total Cash and cash equivalents and restricted cash and cash equivalents	$	172,464	$	177,495	$	105,055

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

March 31, 2019

and

December 31, 2018,

the Company had deposits totaling

$28.6

million and

$31.3

million, respectively, in

ten

U.S. financial institutions that were federally insured up to

$250,000

per account. At

March 31, 2019

and

December 31, 2018,

the Company’s deposits in foreign countries amounted to approximately

$75.9

million and

$93.9

million, respectively.

March 31, 2019

and

December 31, 2018,

accounts receivable related to operations in foreign countries amounted to approximately

$106.8

million and

$102.0

million, respectively. At

March 31, 2019

and

December 31, 2018,

accounts receivable from the Company’s primary customers amounted to approximately

55%

and

56%

of the Company’s accounts receivable, respectively.

Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy, Inc.) accounted for

18.2%

and

17.4%

of the Company’s total revenues for the

three

months ended

March 31, 2019

and

2018,

respectively.

Southern California Public Power Authority (“SCPPA”) accounted for

19.4%

and

16.3%

of the Company’s total revenues for the

three

months ended

March 31, 2019

and

2018,

respectively.

Kenya Power and Lighting Co. Ltd. accounted for

15.3%

and

15.1%

of the Company’s total revenues for the

three

months ended

March 31, 2019

and

2018,

respectively.

We have historically been able to collect on substantially all of our receivable balances. Recently, we have been receiving late payments from KPLC in Kenya related to our Olkaria Complex and from ENNE in Honduras related to our Platanares power plant. As of

March 31, 2019,

the amounts overdue are

$29.4

million and

$18.0

million related to KPLC and ENNE, respectively, of which

20.4

million and

$3.0

million, respectively, were paid during

April 2019.

As we believe we will be able to collect all past due amounts,

provision for doubtful accounts has been recorded.

Additionally, Pacific Gas and Electric Corporation (“PG&E Corporation”) and its subsidiary Pacific Gas and Electric Company (“PG&E”), which accounts for

1.2%

of our total revenues for the

three

months ended

March 31, 2019,

are facing extraordinary challenges relating to a series of catastrophic wildfires that occurred in Northern California in

2017

and

2018.

As a result, on

January

29,

2019,

PG&E Corporation and its subsidiary, PG&E, voluntarily filed for reorganization under Chapter

of the U.S. Bankruptcy Code. We are closely monitoring our PG&E account to ensure cash receipts are received timely each month. Our monthly invoice relating to

January 2019

was

not

paid as it occurred before PG&E filed for reorganization under Chapter

bankruptcy, but cash was received for the

February

and

March

invoices.

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 our Product segment reflect payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities as of

March 31, 2019

and

December 31, 2018

are as follows:

	March 31,			December 31,
	2019			2018
	(Dollars in thousands)
Contract assets (*)	$	29,762		$	42,130
Contract liabilities (*)		(15,508	)		(18,402	)
Contract assets, net	$	14,254		$	23,728

(*) 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 consolidated balance sheets.

March 31, 2019,

we had approximately

$226.1

million of remaining performance obligations

not

yet satisfied or partly satisfied related to our Product segment. We expect to recognize approximately

100%

of this amount as Product revenues during the next

months.