Note 19 - Business Segments

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 19 — BUSINESS SEGMENTS

In 2018, the Company started disclosing its energy storage and power load management business activity under the Energy Storage and Management Services segment as such operations met the reportable segment criteria of ASC 280, Segment Reporting. In 2019, under this business activity, the Company completed two BESS projects in New Jersey, which started generating revenues during that year, and is focused on increasing activity under this reporting segment. As such, the Company renamed its Other reportable segment to "Energy Storage and Management Services" ("ESMS"). This segment only included the Company's storage related activity starting in 2018 as disclosed above. As such, starting in 2018 the Company has three reporting segments: the Electricity segment, the Product segment and the Energy Storage and Management Services segment. These segments are managed and reported separately as each offers different products and serves different markets. The Electricity segment is engaged in the sale of electricity from the Company’s power plants pursuant to PPAs. The Product segment is engaged in the manufacture, including design and development, of turbines and power units for the supply of electrical energy and in the associated construction of power plants utilizing the power units manufactured by the Company to supply energy from geothermal fields and other alternative energy sources. The Energy Storage and Management Services segment is engaged in battery energy storage systems as a service and management of curtailable customer loads under contracts with U.S. retail energy providers and directly with large commercial and industrial customers.

Transfer prices between the operating segments were determined 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, as further described under Note 1 to the consolidated financial statements, the Company's disaggregated revenues from contracts with customers as required by ASC 606:

	Electricity		Product		ESMS			Consolidated
	(Dollars in thousands)
Year Ended December 31, 2019:
Revenues from external customers:
United States (1)	$	333,797	$	30,562	$	13,597		$	377,956
Foreign (2)		206,536		160,447		1,105			368,088
Net revenues from external customers		540,333		191,009		14,702			746,044
Intersegment revenues		—		84,614		—			84,614
Depreciation and amortization expense		138,426		5,308		5,027			148,761
Operating income (loss)		177,192		23,180		(6,576	)		193,796
Segment assets at period end (3) (*)		3,044,909		126,018		79,567			3,250,494
Expenditures for long-lived assets		259,898		9,156		10,932			279,986
* Including unconsolidated investments		81,140		—		—			81,140
Year Ended December 31, 2018:
Revenues from external customers:
United States (1)		305,962		14,999		7,645			328,606
Foreign (2)		203,917		186,744		—			390,661
Net revenues from external customers	$	509,879	$	201,743	$	7,645		$	719,267
Intersegment revenues		—		48,817		—			48,817
Depreciation and amortization expense		126,181		4,311		1,741			132,233
Operating income (loss)		155,546		38,083		(8,519	)		185,110
Segment assets at period end (3) (*)		2,896,938		156,942		67,470			3,121,350
Expenditures for long-lived assets		219,803		9,993		28,725			258,521
* Including unconsolidated investments		71,983		—		—			71,983
Year Ended December 31, 2017:
Revenues from external customers	$	465,593	$	224,483	$	2,736		$	692,812
Intersegment revenues		—		109,040		—			109,040
Depreciation and amortization expense		109,928		3,470		1,748			115,146
Operating income (loss)		157,613		50,543		(3,138	)		205,018
Segment assets at period end (3) (*)		2,457,514		115,713		50,637			2,623,864
Expenditures for long-lived assets		252,581		6,653		—			259,234
* Including unconsolidated investments		34,084		—		—			34,084

⁽¹⁾ Electricity segment revenues in the United States are all accounted under lease accounting, except for $61.3 million and $26.9 million for the years December 31, 2019 and 2018 that are accounted under ASC 606 starting in 2018. Product and Energy Storage and Management Services segment revenues in the United States are accounted under ASC 606, as further described under Note 1 to the consolidated financial statements.

⁽²⁾ Electricity segment revenues in foreign countries are all accounted under lease accounting. Product and Energy Storage and Management Services segment revenues in foreign countries are accounted under ASC 606 as further described under Note 1 to the consolidated financial statements.

⁽³⁾ Electricity segment assets include goodwill in the amount of $20.1 million, $20.0 million and $7.6 as of December 31, 2019, 2018 and 2017, respectively. No goodwill is included in the Product and Energy Storage and Management Services segment assets as of December 31, 2019 and 2018. Energy Storage and Management Services segment assets as December 31, 2017 include goodwill in the amount of $13.5 million. For further information on goodwill, see Note 9 – Intangible assets and goodwill to the consolidated financial statements.

Reconciling information between reportable segments and the Company’s consolidated totals is shown in the following table:

	Year Ended December 31,
	2019			2018			2017
	(Dollars in thousands)
Revenues:
Total segment revenues	$	746,044		$	719,267		$	692,812
Intersegment revenues		84,614			48,817			109,040
Elimination of intersegment revenues		(84,614	)		(48,817	)		(109,040	)
Total consolidated revenues	$	746,044		$	719,267		$	692,812
Operating income:
Operating income	$	193,796		$	185,110		$	205,018
Interest income		1,515			974			988
Interest expense, net		(80,384	)		(70,924	)		(54,142	)
Derivatives and foreign currency transaction gains (losses)		624			(4,761	)		2,654
Income attributable to sale of tax benefits		20,872			19,003			17,878
Other non-operating income (expense), net		880			7,779			(1,666	)
Total consolidated income before income taxes and equity in earnings of investees	$	137,303		$	137,181		$	170,730

The Company sells electricity, products and energy storage and other related services mainly to the geographical areas set forth below based on the location of the customer. The following tables present certain data by geographic area:

	Year Ended December 31,
	2019		2018		2017
	(Dollars in thousands)
Revenues from external customers attributable to: (1)
United States	$	377,956	$	328,606	$	301,132
Indonesia		—		4,379		28,968
Kenya		121,661		119,094		110,243
Turkey		88,938		168,699		125,166
Chile		25,540		980		8,895
Guatemala		28,624		27,975		27,991
New Zealand		31,222		10,451		33,395
Honduras		34,446		34,355		10,151
Other foreign countries		37,657		24,728		46,871
Consolidated total	$	746,044	$	719,267	$	692,812

⁽¹⁾ Revenues as reported in the geographic area in which they originate.

	Year Ended December 31,
	2019		2018		2017
	(Dollars in thousands)
Long-lived assets (primarily power plants and related assets) located in:
United States	$	1,870,335	$	1,696,439	$	1,510,986
Kenya		284,526		301,956		340,970
Other foreign countries		224,676		222,872		281,333
Consolidated total	$	2,379,537	$	2,221,267	$	2,133,289

The following table presents revenues from major customers:

	Year Ended December 31,
	2019				2018				2017
	Revenues		%		Revenues		%		Revenues		%
	(Dollars in thousands)				(Dollars in thousands)				(Dollars in thousands)
Southern California Public Power (1)	$	133,725		17.9	$	109,208		15.2	$	70,100		10.1
Sierra Pacific Power Company and Nevada Power Company (1)(2)		125,486		16.8		116,149		16.1		125,424		18.1
KPLC (1)		121,661		16.3		119,094		16.6		110,243		15.9

⁽¹⁾Revenues reported in Electricity segment.

⁽²⁾Subsidiaries of NV Energy, Inc.