# EDGAR Filing Document

**Accession Number:** 0001296445
**File Stem:** 0001437749-23-004344
**Filing Date:** 2023-2
**Character Count:** 33779
**Document Hash:** 9970339b836983934c3a5bae0c4ba9a8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-004344.hdr.sgml**: 20230223

**ACCESSION NUMBER**: 0001437749-23-004344

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230222

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230223

**DATE AS OF CHANGE**: 20230223

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ORMAT TECHNOLOGIES, INC.
- **CENTRAL INDEX KEY:** 0001296445
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC SERVICES [4911]
- **IRS NUMBER:** 880326081
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32347
- **FILM NUMBER:** 23658913

**BUSINESS ADDRESS:**
- **STREET 1:** 6140 PLUMAS STREET
- **CITY:** RENO
- **STATE:** NV
- **ZIP:** 89519-6075
- **BUSINESS PHONE:** 775-356-9029

**MAIL ADDRESS:**
- **STREET 1:** 6140 PLUMAS STREET
- **CITY:** RENO
- **STATE:** NV
- **ZIP:** 89519-6075

ora20230223_8k.htm

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

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**FORM **8-K**

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**CURRENT REPORT**

**Pursuant to Section 13 OR 15(d)**

**of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **February 23, 2023 (**February 22, 2023**)**

**Ormat Technologies, Inc.**

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(Exact Name of Registrant as Specified in Its Charter)

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| | | |
|:---|:---|:---|
| **Delaware** | **001-32347** | **No. **88-0326081** |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| **6140 Plumas Street, **Reno**, **Nevada** |  | **89519-6075** |
| (Address of Principal Executive Offices) |  | (Zip Code) |

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**(**775**) **356-9029**

(Registrant's Telephone Number, Including Area Code)

**Not Applicable**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Shares | ORA | NYSE |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

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**Item 2.02. Results of Operations and Financial Condition.**

On February 22, 2023 Ormat Technologies, Inc. (the "Registrant") reported its earnings for its fourth fiscal quarter and year ended December 31, 2022. A copy of the Registrant's press release containing this information is furnished as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference.

Starting in the fourth quarter of 2022, we include accretion expenses related to asset retirement obligation in the adjustments to net income when calculating EBITDA and Adjusted EBITDA. The presentation of EBITDA and Adjusted EBITDA includes accretion expenses for fourth quarter and fiscal year 2022, however, the prior year and quarter periods have not been recast to include accretion expenses as the amounts were immaterial.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The Registrant is making reference to non-GAAP financial measures in the press release. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

**Item 9.01. Financial Statements and Exhibits.** 

*(d) Exhibits*

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| | |
|:---|:---|
| **<u>Exhibit</u>** | **<u>Description of Document</u>** |

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| | |
|:---|:---|
| 99.1 | [Press release of the Registrant dated February 22 February, 2023, containing financial information for its fourth fiscal quarter and year ended December 31, 2022.](ex_479770.htm) |

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| | |
|:---|:---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | |
|:---|:---|
| ORMAT TECHNOLOGIES, INC. | ORMAT TECHNOLOGIES, INC. |
| By: | /s /Doron Blachar |
| Name: Doron Blachar | Name: Doron Blachar |
| Title: Chief Executive Officer | Title: Chief Executive Officer |

---

Date: February 23, 2023

## Exhibit 99.1

**Exhibit 99.1**

![ormat01.jpg](ormat01.jpg)

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| | |
|:---|:---|
| Ormat Technologies Contact:<br> Smadar Lavi<br> VP Head of IR and ESG Planning & Reporting<br> 775-356-9029 (ext. 65726)<br> slavi@ormat.com | Investor Relations Agency Contact:<br> Sam Cohen or Joseph Caminiti<br> Alpha IR Group<br> 312-445-2870<br> ORA@alpha-ir.com |

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ORMAT TECHNOLOGIES REPORTS FOURTH QUARTER AND YEAR-END 2022 FINANCIAL RESULTS

2023 OUTLOOK REFLECTS HIGHEST TOTAL REVENUE EVER AND RECORD ADJUSTED EBITDA GROWTH

**HIGHLIGHTS**

● TOTAL REVENUES OF $734.1 MILLION FOR FULL YEAR 2022 INCREASED BY 10.7% YEAR-OVER-YEAR, DRIVEN BY GROWTH IN ALL THREE OPERATING SEGMENTS

● OPERATING INCOME INCREASED BY 10.7% FOR THE FOURTH QUARTER AND 8.3% FOR THE FULL YEAR COMPARED TO 2021, EXCLUDING A ONE-TIME NON-CASH IMPAIRMENT CHARGE OF $30.5 MILLION RELATED TO BRAWLEY

● ORMAT ANNOUNCES FULL YEAR 2023 ADJUSTED EBITDA OUTLOOK OF $480 TO $510 MILLION, AN INCREASE OF UP TO 17% OVER 2022

● ORMAT EXPECTS TO RECEIVE APPROXIMATELY $150 MILLION IN CASH BENEFIT UNDER THE INFLATION REDUCTION ACT DURING 2023

RENO, Nev. February 22, 2023, Ormat Technologies, Inc. (NYSE: ORA), a leading geothermal, energy storage, solar PV and recovered energy power company, today announced financial results for the fourth quarter and full year ended December 31, 2022.

**KEY FINANCIAL RESULTS**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(Dollars in millions, except per share)** | Q4 2022 | Q4 2021 | Change (%) | FY 2022 | FY 2021 | Change (%) |
| GAAP Measures |  |  |  |  |  |  |
| Revenues |  |  |  |  |  |  |
| Electricity | 165.2 | 164.3 | 0.6% | 631.7 | 585.8 | 7.8% |
| Product | 32.2 | 20.3 | 58.2% | 71.4 | 46.9 | 52.2% |
| Energy Storage & Management Services | 8.1 | 6.4 | 27.3% | 31.0 | 30.4 | 2.1% |
| Total Revenues | 205.5 | 191.0 | 7.6% | 734.1 | 663.1 | 10.7% |
| Gross margin (%) |  |  |  |  |  |  |
| Electricity | 43.5% | 44.1% |  | 39.8% | 42.5% |  |
| Product | 22.8% | 10.6% |  | 15.3% | 11.8% |  |
| Energy Storage & Management Services | 11.7% | 16.4% |  | 21.0% | 33.0% |  |
| Gross margin (%) | 39.0% | 39.6% |  | 36.6% | 39.9% |  |
| Operating income | 30.2 | 54.9 | (44.9)% | 152.8 | 169.4 | (9.8)% |
| Net income attributable to the Company's stockholders | 18.0 | 18.9 | (4.6)% | 65.8 | 62.1 | 6.0% |
| Diluted EPS ($) | 0.32 | 0.34 | (5.9)% | 1.17 | 1.10 | 6.4% |
| Non-GAAP Measures |  |  |  |  |  |  |
| Adjusted Net income attributable to the Company's stockholders | 41.2 | 22.8 | 80.3% | 92.2 | 78.6 | 17.3% |
| Adjusted Diluted EPS ($) | 0.73 | 0.41 | 78.1% | 1.63 | 1.39 | 17.1% |
| Adjusted EBITDA<sup>1</sup>  | 124.7 | 116.0 | 7.5% | 435.5 | 401.4 | 8.5% |

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"The fourth quarter marked a strong finish to an excellent 2022, with 10.7% top-line growth across all three segments of our business. We continue to make progress toward our long-term goals, and during 2022 we added 78MW of new generating capacity to our operating portfolio. We also signed up to 365MW of Power Purchase Agreements (PPAs) and a tolling agreement with improved economics in the Electricity and Storage segments," said Doron Blachar, Ormat's Chief Executive Officer. "In addition, we see a notable recovery in the Product segment with considerably higher revenues, improved margins and new product contracts that increased our backlog to pre-Covid-19 levels demonstrating the growing global demand for geothermal energy."

Blachar added, "As we look toward 2023, we expect to benefit from the contributions of new geothermal and solar power plants in our Electricity segment that started operation in the second half of 2022 and the addition of 170MW of new capacity that we expect to bring online during the year, of which 66 MW is in the Electricity segment and 104 MW is in the Storage segment. We also expect improved performance in our Product segment which is supported by a $148 million backlog."

"We expect to deliver a 10% to 17% increase in 2023 Adjusted EBITDA, reaching between $480 to $510 million, supported by 170 MW of operating assets to be added during the year. On an annualized basis in the following years, these assets are expected to add between $25 to $30 million of additional adjusted EBITDA versus partial operation in 2023.

"We continue to see strong tailwinds globally for renewable energy supported by both the Inflation Reduction Act (IRA) benefits, which we expect will reduce our capital needs and boost our EPS in the coming years, as well the significant demand for geothermal energy and storage driven by surging fossil fuel prices and global decarbonization. We are on track with our capacity expansions in both the Electricity and the Storage segments, with the potential to add approximately 700 MW by the end of 2025. We expect this will have a positive impact on future top and bottom line as well as EBITDA growth. We firmly believe that our strategy, high-quality assets, and advantageous cost structure position Ormat to succeed in the current and future macro environment."

**FINANCIAL AND RECENT BUSINESS HIGHLIGHTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income attributable to the Company's stockholders for the fourth quarter and for the year 2022 was $18.0 million and $65.8 million, respectively, a decrease of 4.6% and an increase of 6.0%, respectively, compared to last year. Diluted EPS for the fourth quarter and for the year 2022 was $0.32 and $1.17 per share, respectively, a decrease of 5.9% and an increase of 6.4%, respectively, compared to last year.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted net income attributable to the Company's stockholders and diluted adjusted EPS for the fourth quarter increased 80.3% and 78.1% compared to last year. Adjusted net income attributable to the Company's stockholders and diluted adjusted EPS for the full year 2022 increased 17.3% and 17.1% compared to last year. Adjusted net income attributable to the Company's stockholders and diluted adjusted EPS mainly excluded the $30.5 million pre-tax non-cash impairment charge from Brawley ($24.1 million or $0.43 per share after tax).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA for the fourth quarter and for the year 2022 was $124.7 million and $435.5 million, respectively, an increase of 7.5% and 8.5%, respectively, compared to last year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Electricity segment revenues increased 0.6% for the fourth quarter and 7.8% for the year compared to last year, supported by contributions from the new projects added, as well as higher capacity and rates observed at Puna. This increase was impacted by the shutdown of Heber 1 following the fire in early 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We recorded in the fourth quarter of 2022 a non-cash impairment pre-tax loss of $30.5 million related to our Brawley power plant in California. We believe that we can operate the plant economically at 7 MW, or 6 MW lower than the current capacity. In addition, we are planning to add 35 MW solar plus storage facility adjacent to the geothermal projects and utilizing existing interconnection at the Brawley complex.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Heber 1 is experiencing a partial outage due to a fire in early 2022. We have decided not to rebuild the Heber 1 power plant and we settled the insurance claim related to the fire event including all business interruption and property damage claims. We are currently optimizing the Heber complex through a repowering, which is expected to be completed in the second quarter of 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product segment revenues increased 58.2% for the fourth quarter and 52.2% for the year compared to 2021, supported by contributions from newly signed contracts in Indonesia, Nicaragua, and New Zealand. Margins improved 1,220 basis points quarter over quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product segment backlog as of February 22, 2023, grew by approximately 8.0% compared to last quarter driven by a contract signed to supply equipment to the Ijen project in Indonesia. Backlog stands at $148.1 million as of February 22, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Energy Storage segment revenues increased 27.3% for the fourth quarter and 2.1% for the year compared to 2021, supported by higher rates at PJM. Revenue growth for the year comparatively offset by higher revenues from Rabbit Hill in February of 2021 as a result of elevated energy prices during the power crisis in Texas.

**IN ADDITION, THE COMPANY:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Signed a Financing Agreement with PT Sarana Multi Infrastruktur (Persero) ("SMI") for the development of the Ijen Geothermal Power Plant in Indonesia. The Ijen power plant, which is controlled by our local partner, is expected to generate 31 MW by the end of 2024.

**2023 GUIDANCE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total revenues of between $823 million and $858 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Electricity segment revenues between $670 million and $685 million.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Product segment revenues of between $120 million and $135 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Energy Storage revenues of between $33 million and $38 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted EBITDA to be between $480 million and $510 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Adjusted EBITDA attributable to minority interest of approximately $36 million.

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three months and year ended December 31, 2022. However, the Company does not provide guidance on net income and is unable to provide a reconciliation for its Adjusted EBITDA guidance range to net income without unreasonable efforts due to high variability and complexity with respect to estimating certain forward-looking amounts. These include impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.

**DIVIDEND** 

On February 22, 2023, the Company's Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company's dividend policy. The dividend will be paid on March 22, 2023, to stockholders of record as of the close of business on March 8, 2023. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.

**CONFERENCE CALL DETAILS**

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, February 23, 2023, at 10:00 a.m. ET.

Participants within the United States and Canada, please dial 1-888-770-2286, approximately 15 minutes prior to the scheduled start of the call. If you are calling outside of the United States and Canada, please dial +1-646-960-0440. Access code for the call is 9122486. Please request the "Ormat Technologies, Inc. call" when prompted by the conference call operator. The conference call will also be accompanied by a webcast live on the Investor Relations section of the Company's website.

A replay will be available one hour after the end of the conference call. To access the replay within the United States and Canada, please dial 1-800-770-2030. From outside of the United States and Canada, please dial +1-647-362-9199. Please use the replay access code 9122486. The webcast will also be archived on the Investor Relations section of the Company's website.

**ABOUT ORMAT TECHNOLOGIES**

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation ("REG"), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company's activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat's current total generating portfolio is 1,158 MW with a 1,070 MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and an 88 MW energy storage portfolio that is located in the U.S.

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**ORMAT**'**S SAFE HARBOR STATEMENT**

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words "may", "will", "could", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "projects", "potential", "target", "goal" or "contemplate" or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Ormat's Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2022, and from time to time, in Ormat's quarterly reports on Form 10-Q that are filed with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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**ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES**

**Condensed Consolidated Statement of Operations**

For the Three-and Twelve-Month periods Ended December 31, 2022, and 2021

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | **(Dollars in thousands, except per share data)** | **(Dollars in thousands, except per share data)** | **(Dollars in thousands, except per share data)** | **(Dollars in thousands, except per share data)** |
| Revenues: |  |  |  |  |
| Electricity | 165187 | 164268 | 631727 | 585771 |
| Product | 32177 | 20340 | 71414 | 46920 |
| Energy storage | 8122 | 6381 | 31018 | 30393 |
| Total revenues | 205486 | 190989 | 734159 | 663084 |
| Cost of revenues: |  |  |  |  |
| Electricity | 93270 | 91883 | 380361 | 337019 |
| Product | 24835 | 18194 | 60479 | 41374 |
| Energy storage | 7171 | 5336 | 24495 | 20353 |
| Total cost of revenues | 125276 | 115413 | 465335 | 398746 |
| Gross profit | 80210 | 75576 | 268824 | 264338 |
| Operating expenses: |  |  |  |  |
| Research and development expenses | 1388 | 950 | 5078 | 4129 |
| Selling and marketing expenses | 3783 | 4264 | 16193 | 15199 |
| General and administrative expenses | 14119 | 15501 | 61274 | 75901 |
| Business interruption insurance income |  |  |  | (248) |
| Impairment charge | 30695 |  | 32648 |  |
| Write-off of unsuccessful exploration activities | 1 |  | 828 |  |
| Operating income | 30224 | 54861 | 152803 | 169357 |
| Other income (expense): |  |  |  |  |
| Interest income | 1237 | 534 | 3417 | 2124 |
| Interest expense, net | (23841) | (22786) | (87743) | (82658) |
| Derivatives and foreign currency transaction gains (losses) | (2013) | 1509 | (6044) | (14720) |
| Income attributable to sale of tax benefits | 7540 | 7928 | 33885 | 29582 |
| Other non-operating income (expense), net | (197) | 174 | (709) | (134) |
| Income from operations before income tax and equity in earnings (losses) of investees | 12950 | 42220 | 95609 | 103551 |
| Income tax (provision) benefit | 8778 | (15527) | (14742) | (24850) |
| Equity in earnings (losses) of investees, net | (1498) | (4420) | (3072) | (2624) |
| Net income | 20230 | 22273 | 77795 | 76077 |
| Net income attributable to noncontrolling interest | (2190) | (3368) | (11954) | (13985) |
| Net income attributable to the Company's stockholders | 18040 | 18905 | 65841 | 62092 |
| Earnings per share attributable to the Company's stockholders: |  |  |  |  |
| Basic: | 0.32 | 0.34 | 1.17 | 1.11 |
| Diluted: | 0.32 | 0.34 | 1.17 | 1.10 |
| Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: |  |  |  |  |
| Basic | 56077 | 56033 | 56063 | 56004 |
| Diluted | 56501 | 56386 | 56503 | 56402 |

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**ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES**

**Condensed Consolidated Balance Sheet**

For the Periods Ended December 31, 2022 and 2021

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| | | |
|:---|:---|:---|
|  | **December 31,** <br> **2022** | **December 31,** <br> **2021** |
| **ASSETS** | **ASSETS** | **ASSETS** |
| Current assets: |  |  |
| Cash and cash equivalents | 95872 | 239278 |
| Marketable securities at fair value |  | 43343 |
| Restricted cash and cash equivalents | 130804 | 104166 |
| Receivables: |  |  |
| Trade | 128818 | 122944 |
| Other | 32415 | 18144 |
| Inventories | 22832 | 28445 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 16405 | 9692 |
| Prepaid expenses and other | 29571 | 35920 |
| Total current assets | 456717 | 601932 |
| Investment in unconsolidated companies | 115693 | 105886 |
| Deposits and other | 39762 | 78915 |
| Deferred income taxes | 161365 | 143450 |
| Property, plant and equipment, net | 2493457 | 2294973 |
| Construction-in-process | 893198 | 721483 |
| Operating leases right of use | 23411 | 19357 |
| Finance leases right of use | 3806 | 6414 |
| Intangible assets, net | 333845 | 363314 |
| Goodwill | 90325 | 89954 |
| Total assets | 4611579 | 4425678 |
| **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** |
| Current liabilities: |  |  |
| Accounts payable and accrued expenses | 149423 | 143186 |
| Billings in excess of costs and estimated earnings on uncompleted contracts | 8785 | 9248 |
| Current portion of long-term debt: |  |  |
| Limited and non-recourse (primarily related to VIEs): | 64044 | 61695 |
| Full recourse | 101460 | 313846 |
| Financing Liability | 16270 | 10835 |
| Operating lease liabilities | 2347 | 2564 |
| Finance lease liabilities | 1581 | 2782 |
| Total current liabilities | 343910 | 544156 |
| Long-term debt, net of current portion: |  |  |
| Limited and non-recourse: | 521885 | 539664 |
| Full recourse: | 676512 | 740335 |
| Convertible senior notes | 420805 |  |
| Financing liability | 225759 | 242029 |
| Operating lease liabilities | 19788 | 16462 |
| Finance lease liabilities | 2262 | 4361 |
| Liability associated with sale of tax benefits | 166259 | 134953 |
| Deferred income taxes | 83465 | 84662 |
| Liability for unrecognized tax benefits | 6559 | 5730 |
| Liabilities for severance pay | 12833 | 15694 |
| Asset retirement obligation | 97660 | 84891 |
| Other long-term liabilities | 3317 | 4951 |
| Total liabilities | 2581014 | 2417888 |
| Commitments and contingencies |  |  |
| Redeemable noncontrolling interest | 9590 | 9329 |
| Equity: |  |  |
| The Company's stockholders' equity: |  |  |
| Common stock | 56 | 56 |
| Additional paid-in capital | 1259072 | 1271925 |
| Treasury stock, at cost | (17964) |  |
| Retained earnings | 623907 | 585209 |
| Accumulated other comprehensive income (loss) | 2500 | (2191) |
| Total stockholders' equity attributable to Company's stockholders | 1867571 | 1854999 |
| Noncontrolling interest | 153404 | 143462 |
| Total equity | 2020975 | 1998461 |
| Total liabilities, redeemable noncontrolling interest and equity | 4611579 | 4425678 |

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**ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES**

**Reconciliation of EBITDA and Adjusted EBITDA** 

**For the three and twelve-month periods ended December 31, 2022, and 2021**

We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives, (ii) stock-based compensation, (iii) merger and acquisition transaction costs, (iv) gain or loss from extinguishment of liabilities, (v) cost related to a settlement agreement, (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor's ability to evaluate its financial and operating performance. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

Starting in the fourth quarter of 2022, we include accretion expenses related to asset retirement obligation in the adjustments to net income when calculating EBITDA and adjusted EBITDA. The presentation of EBITDA and adjusted EBITDA includes accretion expenses for the fiscal year ended December 31, 2022, however the prior years have not been recast to include accretion expenses as the amounts were immaterial.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three and twelve-month periods ended December 31, 2022, and 2021:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> December 31, | Three Months Ended<br> December 31, | Year ended<br> December 31, | Year ended<br> December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
|  | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) | (Dollars in thousands) |
| Net income | 20230 | 22273 | 77795 | 76077 |
| Adjusted for: |  |  |  |  |
| Interest expense, net (including amortization of deferred financing costs) | 22604 | 22252 | 84326 | 80534 |
| Income tax provision (benefit) | (8778) | 15527 | 14742 | 24850 |
| Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla | 3758 | 6427 | 13199 | 14680 |
| Depreciation, amortization and accretion | 55637 | 47427 | 198603 | 177930 |
| EBITDA | 93451 | 113906 | 388665 | 374071 |
| Mark-to-market on derivative instruments | (1064) | (355) | 1613 | 741 |
| Stock-based compensation | 3017 | 2328 | 11646 | 9168 |
| Make-whole premium related to long-term debt prepayment |  |  | 1102 |  |
| Reversal of a contingent liability related to a business combination transaction | (1829) |  | (1829) | (418) |
| Impairment of long-lived assets | 30693 |  | 32648 |  |
| Allowance for bad debt related to February power crisis in Texas |  |  | 115 | 2980 |
| Merger and acquisition transaction costs | 427 | 138 | 675 | 5635 |
| Hedge losses resulting from February power crisis in Texas |  |  |  | 9133 |
| Tender-related deposits write-off |  |  |  | 134 |
| Write-off of unsuccessful exploration activities |  |  | 828 |  |
| Adjusted EBITDA | 124695 | 116017 | 435463 | 401444 |

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ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES

Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS

For the Three and twelve-month periods ended December 31, 2022, and 2021

Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS are adjusted for one-time expense items that are not representative of our ongoing business and operations. The use of Adjusted Net income attributable to the Company's stockholders and Adjusted EPS is intended to enhance the usefulness of our financial information by providing measures to assess the overall performance of our ongoing business.

The following tables reconciles Net income attributable to the Company's stockholders and Adjusted EPS for the three and twelve-month periods ended December 31, 2022, and 2021.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> December 31, | Three Months Ended<br> December 31, | Year Ended<br> December 31, | Year Ended<br> December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
| GAAP Net income attributable to the Company's stockholders | 18.0 | 18.9 | 65.8 | 62.1 |
| Hedge losses resulting from February power crisis in Texas |  |  |  | 8.8 |
| Impairment of long-lived assets | 24.3 |  | 25.8 |  |
| Write-off of unsuccessful exploration activities |  |  | 0.7 |  |
| Sarulla tax asset write-off |  | 3.9 |  | 3.9 |
| Merger and acquisition transaction costs | 0.3 |  | 0.5 | 3.7 |
| Reversal of a contingent liability related to a business combination transaction | (1.4) |  | (1.4) |  |
| Make-whole premium related to repayment of long-term debt |  |  | 0.8 |  |
| Adjusted Net income attributable to the Company's stockholders | 41.2 | 22.8 | 92.2 | 78.6 |
| GAAP diluted EPS | 0.32 | 0.34 | 1.17 | 1.10 |
| Hedge losses resulting from February power crisis in Texas |  |  |  | 0.16 |
| Impairment of long-lived assets | 0.43 |  | 0.46 |  |
| Write-off of unsuccessful exploration activities |  |  | 0.01 |  |
| Sarulla tax asset write-off |  | 0.07 |  | 0.07 |
| Merger and acquisition transaction costs | 0.01 |  | 0.01 | 0.07 |
| Reversal of a contingent liability related to a business combination transaction | (0.03) |  | (0.03) |  |
| Make-whole premium related to repayment of long-term debt |  |  | 0.01 |  |
| Diluted Adjusted EPS ($) | 0.73 | 0.41 | 1.63 | 1.39 |

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