ORMAT TECHNOLOGIES INC

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(*) Resulted in an amount lower than $1 thousand.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE1 —** 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 donot 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 condensed consolidated financial position as of* March 31, 2024,the condensed consolidated statements of operations and comprehensive income for thethree* months ended* March 31, 2024and2023* and the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for thethree months ended* March 31, 2024and2023.*

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 arenot 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 Form10-K for the year ended* December 31, 2023.The condensed consolidated balance sheet data as of December 31, 2023was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2023but doesnot* 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.*

Business combination - Enel purchase transaction

On* January 4, 2024,the Company closed a purchase transaction with Enel Green Power North America ("EGPNA"), a subsidiary of Enel SpA (ENEL.MI) to acquire a portfolio of assets which includestwo* contracted geothermal power plants,one triple hybrid power plant which consists of geothermal, solar PV and solar thermal units,two stand alone solar power plants, andtwo greenfield development assets, for a total cash consideration of $274.6 million (including customary post-closing working capital adjustment to the purchase price, based on the levels of net working capital of the acquired companies) for 100% of the equity interests in the entities holding those assets.

The geothermal power plants include the Cove Fort power plant located in Beaver County, Utah, which sells electricity under a long-term power purchase agreement with Salt River Project and the Salt Wells power plant located in Churchill County, Nevada, which sells electricity under a long-term power purchase agreement ("PPA") with NV Energy. The Stillwater triple hybrid geothermal, solar PV and solar thermal power plant is located in Churchill County, Nevada, and sells electricity to NV Energy under a power purchase agreement. The Solar assets of Stillwater Solar PV II in Churchill County, Nevada, and Woods Hill in Windham County, Connecticut, sell their electricity under power purchase agreements, respectively.

As a result of the acquisition, the Company expanded its overall generation capacity and expects to improve the profitability of the purchased assets through cost reduction, synergies and development of the greenfield assets. The Company accounted for the transaction in accordance with Accounting Standard Codification ("ASC")805, Business Combinations, and following the transaction, the Company consolidates the power plants and all other assets included in the transaction in accordance with ASC810, Consolidation.

In thefirst quarter of2024, and during annual2023, the Company incurred $1.3 million and $1.1 million of acquisition-related costs, respectively. Such costs are included under "General and administrative expenses" in the consolidated statements of operations and comprehensive income for the respective periods. Accounting guidance provides that the allocation of the purchase price* maybe adjusted for up toone* year from the date of the acquisition to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of the purchase price allocation that isnot yet finalized is related to intangible assets, property, plant and equipment, and certain tax matters and the related impact on goodwill.

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The following table summarizes the purchase price allocation to the fair value of the assets acquired and liabilities assumed (in millions):

(1)** **The gross amount of trade receivables was fully collected subsequent to acquisition date.

(2) The fair value of Property, Plant and equipment was estimated by applying the income approach and utilizing the discounted cash flow method. This methodology assesses the value of tangible assets by computing the anticipated cash flows expected to be generated by the respective assets.

(3) Intangible assets are related to the long-term electricity PPAs described above and are amortized over the term of those PPAs. The fair value of the intangible assets was estimated by applying the income approach and utilizing the With and Without method.

(4) Goodwill is primarily related to the expected synergies, potential cost savings in operations as a result of the purchase transaction as well as potential future development of the greenfield assets. The goodwill is allocated to the Electricity segment and is deductible for tax purposes.

For the period from acquisition date to* March 31, 2024,the acquired portfolio of assets contributed $9.4 million to the Company's Electricity revenues, and $3.3 million to the Company's earnings, which were included in the Company’s condensed consolidated statements of operations and comprehensive income for thethree* months ended* March 31, 2024.*

The following unaudited pro forma summary presents condensed consolidated information of the Company as if the business combination had occurred on* January 1, 2023.The pro forma results below include the impact of certain adjustments related to the depreciation of property plant and equipment, amortization of intangible assets, transaction-related costs, and the related income tax effects. This pro forma presentation doesnot* include any impact from transaction synergies or any other material, nonrecurring adjustments directly attributable to the business combination.

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Hapoalim2024 Loan

Concurrently with the purchase transaction with EGPNA, on* January 2, 2024,the Company entered into a definitive loan agreement (the "BHI Loan Agreement2024") with Hapoalim Bank. The BHI Loan Agreement2024* provides for a loan by Hapoalim Bank to the Company in an aggregate principal amount of $75 million (the “Hapoalim2024 Loan”). The outstanding principal amount of the Hapoalim2024 Loan will be repaid in 32 quarterly payments of $2.3 million each, commencing on* April 1, 2024.The duration of the Hapoalim2024* Loan is 8 years and it bears interest of 6.6%, payable everythree months. The BHI Loan Agreement2024 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA rationot to exceed 6.0, (ii) a minimum equity capital amount ofnot less than $750 million, and (iii) an equity capital to total assets ratio ofnot less than 25%. The BHI Loan Agreement includes other customary affirmative and negative covenants, including nonpayment and noncompliance events of default.

HSBC Bank2024 Loan

Concurrently with the purchase transaction with EGPNA, on* January 2, 2024,the Company entered into a definitive loan agreement (the "HSBC Loan Agreement2024") with HSBC Bank. The HSBC Loan Agreement2024* provides for a loan by HSBC Bank to the Company in an aggregate principal amount of $125 million (the “HSBC Bank2024 Loan”). The outstanding principal amount of the HSBC Bank2024 Loan will be repaid in 7 semi-annual payments of $12.5 million each, commencing on* July 1, 2024,and an additional final principal payment on January 1, 2028of $37.5 million. The duration of the HSBC Bank2024* Loan is 4 years and it bears interest of3-month Secured Overnight Financing Rate ("SOFR") plus 2.25%, payable quarterly. The HSBC Loan Agreement2024 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA rationot to exceed 6.0, (ii) a minimum equity capital amount ofnot less than $750 million, and (iii) an equity capital to total assets ratio ofnot less than 25%. The HSBC Loan Agreement2024 includes other customary affirmative and negative covenants, including nonpayment and noncompliance events of default.

Interest Rate Swap

Concurrently with the issuance of the HSBC Bank2024 Loan, the Company entered into a long-term interest rate swap ("IR Swap") transaction with the objective of hedging the variable interest rate fluctuations related to the HSBC Bank2024 Loan at a fixed3-month SOFR of 3.9%. The terms of the IR Swap match those of the HSBC Bank2024 Loan, including the notional amount of the principal and interest payment dates. The Company designated the IR Swap as a cash flow hedge as per ASC815, Derivatives and Hedging, and accordingly measures the IR Swap instrument at fair value. The changes in the IR Swap fair value are initially recorded in Other Comprehensive Income (Loss) and reclassified to Interest expense, net in the same period or periods during which the hedged transaction affects earnings. The hedged transaction and the IR Swap effect in earnings are presented in the same line item in the consolidated statements of operations and comprehensive income.

Mammoth Senior Secured Notes

On* March 28, 2024,Mammoth Pacific, LLC (the “Issuer”), a wholly owned indirect subsidiary of the Company, entered into a note purchase agreement with the Prudential Insurance Company of America, pursuant to which the Issuer issued approximately $135.1 million principal amount of senior secured notes (the “Mammoth Senior Secured Notes”). The note purchase agreement also includes an approximately $9 million tranche of floating rate notes to be issued in the event of a shortfall in debt service with respect to the Mammoth Senior Secured Notes. The Issuer shall pay a commitment fee on the revolving note tranche at a rate of 0.5% per annum. If drawn, the revolving notes shall bear interest at a rate equal to Term SOFR plus 1.25%. The Mammoth Senior Secured Notes are secured by the equity interests in the Issuer, and by the Issuer’s 100% ownership interests in its project subsidiaries includingfour* geothermal power plants known as theG1, G2, G3 andCD4 projects. The remaining classes of ownership interests inCD4 are owned by an unrelatedthird party and arenot part of the collateral security package for the Mammoth Senior Secured Notes. The Mammoth Senior Secured Notes will be repaid in 46 semi-annual payments, commencing on* November 30, 2024.The Mammoth Senior Secured Notes bear interest at a fixed rate of 6.73% per annum and have a final maturity date of July 14, 2047.The Company has provided a limited guarantee with respect to certain obligations of the Issuer as a member ofCD4.*

There are various restrictive covenants under the Mammoth Senior Secured Notes, including limitations on additional indebtedness of the Issuer and its subsidiaries. Failure to comply with these and other covenants will, subject to customary cure rights, constitute an event of default by the Issuer. In addition, there are restrictions on the ability of the Issuer to make distributions to its shareholders. Among other things, the distribution restrictions include both a historical and projected minimum debt service coverage ratio requirement. As part of the security package, the note purchase agreement states the Issuer shall establish and maintain customary reserve accounts which include a debt service reserve account, a make-up well reserve account and a maintenance reserve account.

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War in Israel

On* October 7, 2023,Hamas terrorists and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, including widespread killings and kidnappings. They also launched extensive rocket attacks on the Israeli civilian population. Shortly following the attack, Israel declared war against Hamas. The majority of the Company's senior management and its main Product segment production and manufacturing facilities are located in Israel approximately26* miles from the border with the Gaza Strip. More recently, the Houthi movement, which controls parts of Yemen, launched a number of attacks on marine vessels in the Red Sea. The Red Sea is an important maritime route for international trade. These disruptions have resulted, and* may*continue to result in, delayed deliveries of several key components used in the manufacturing of the Company's products and could impact its ability to timely deliver products to its customers under the Product Segment. This has also resulted in an increase in insurance premium costs for shipments into and out of the sea port.

As of the date of these condensed consolidated financial statements,none of the Company's facilities or infrastructure have been damaged nor have its supply chains been significantly impacted since the war broke out. However, a prolonged war could result in further military reserve duty call-ups as well as irregularities to the Company's supply chain and to its ability to ship its products from Israel, which could disrupt the operations of the Company's Product segment and potentially delay some of its growth plans in the Electricity segment. Management continuously monitors the effect of the war on the Company's financial position and results of operations.

Equity Offering

On* March 14, 2023,the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC, as the sole underwriter (the “Underwriter”), in connection with a public offering, pursuant to which the Company agreed to issue and sell 3,600,000 shares of common stock, par value $0.001 per share, and the Underwriter agreed to purchase these shares at a price of $82.60 per share. In addition, the Company granted the Underwriter a30*-day option to purchase up to an additional 540,000 shares of common stock at the same price per share, which was fully exercised by the Underwriter on* April 3, 2023.*The total net proceeds from the offering, including the option, were approximately $341.7 million, after deducting offering expenses.

Write-offs of unsuccessful exploration activities

There wereno write-offs of unsuccessful exploration activities during thethree months ended* March 31, 2024and2023.*

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

Concentration of credit risk

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

The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At* March 31, 2024and December 31, 2023,the Company had deposits totaling $68.2 million and $43.2 million, respectively, inten* U.S. financial institutions that were federally insured up to*$250,000* per account. At* March 31, 2024and December 31, 2023,*the Company’s deposits in foreign countries amounted to approximately $55.9 million and $57.5 million, respectively.

At* March 31, 2024and December 31, 2023,accounts receivable related to operations in foreign countries amounted to approximately $98.1 million and $152.2 million, respectively. At March 31, 2024and December 31, 2023,accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of10%* of total consolidated revenues for the related period, amounted to approximately 61% and 57% of the Company’s trade receivables, respectively. The aggregate amount of notes receivable exceeding10% of total receivables as of* March 31, 2024and December 31, 2023*is $85.3 million and $161.0 million, respectively.

The Company's revenues from its primary customers as a percentage of total revenues are as follows:

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The Company has historically been able to collect on substantially all of its receivable balances. As of* March 31, 2024,the amount overdue from KPLC in Kenya was $40.0 million of which$12.4 million was paid in April 2024.*The Company believes it will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as non-payments that are caused by government actions and/or political events).

In Honduras, as of* March 31, 2024,the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $16.9 million of which none was paid to date. In addition, due to the financial situation in Honduras, the Company may*experience further delays in collection. The Company believes it will be able to collect all past due amounts in Honduras.

Allowance for credit losses

The Company performs an analysis of potential credit losses related to its financial instruments that are within the scope of ASU2018-19, Codification Improvements to Topic325, Financial Instruments – Credit Losses, primarily cash and cash equivalents, restricted cash and cash equivalents, investment in marketable securities, receivables (excluding those accounted for under lease accounting) and costs and estimated earnings in excess of billings on uncompleted contracts, based on classes of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. The Company estimates the expected credit losses for each class of financing receivables by applying the related corporate default rate which corresponds to the credit rating of the specific customer or class of financing receivables. For trade receivables, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding. The Company has also considered the existence of credit enhancement arrangements that* may*mitigate the credit risk of its financial receivables in estimating the applicable corporate default rate.

The following table describes the changes in the allowance for expected credit losses for thethree months ended* March 31, 2024and2023* (all related to trade receivables):

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 the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of* March 31, 2024and December 31, 2023*are as follows:

() 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 condensed consolidated balance sheets. The contract liabilities balance at the beginning of the year wasnot* yet fully recognized as product revenues during thethree months ended* March 31, 2024as a result of performance obligations havingnot* been fully satisfied yet.

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On* March 31, 2024,the Company had approximately $128.7 million of remaining performance obligationsnot* yet satisfied or partly satisfied related to our Product segment. The Company expects to recognize approximately 100% of this amount as Product revenues during the next 24 months.

Disaggregated revenues from contracts with customers for thethree months ended* March 31, 2024and2023* are disclosed under Note8 - Business Segments, to the condensed consolidated financial statements.

Leases in which the Company is a lessor

The table below presents lease income recognized as a lessor:

Derivative instruments

Derivative instruments (including certain derivative instruments embedded in other contracts) are measured at their fair value and recorded as either assets or liabilities unless exempted from derivative treatment as a normal purchase and sale. Changes in the fair value of derivativesnot designated as hedging instruments are recognized in earnings. Changes in the fair value of derivatives designated as cash flow hedging instruments are initially recorded in "Other comprehensive income (loss)" and a corresponding amount is reclassified out of "Accumulated other comprehensive income (loss)" to earnings to offset the remeasurement of the underlying hedge transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income.

The Company maintains a risk management strategy that* may*incorporate the use of swap contracts, put options, forward exchange contracts, interest rate swaps, and cross-currency swaps to minimize significant fluctuation in cash flows and/or earnings that are caused by oil and natural gas prices, exchange rate or interest rate volatility.

Transferable production and investment tax credits

The Inflation Reduction Act (“IRA”) was signed into law in* August 2022and introduces a transferability provision for certain tax credits related to the clean production of energy. Under this provision, a reporting entity can monetize such credits through sale to athird* party. The option for transferability of credits applies to taxable years beginning after* December 31, 2022.Several of the Company’s projects, that arenot* currently part of a tax monetization transaction, generate eligible tax credits, such as investment tax credits (“ITCs”) and production tax credits (“PTCs”), that are eligible to be transferred to athird-party under the provisions of the IRA. The Company accounts for ITCs under ASC740 through the “Income tax (provision) benefit” line in the condensed consolidated statement of operations and comprehensive income. PTC’s are accounted similarly to refundable or direct-pay credits outside of the “Income tax (provision) benefit” line with income recognized in the “Income attributable to sale of tax benefits” line in the consolidated statement of operations and comprehensive income. Income recognized related to the expected sale of such transferable PTC’s during thethree months ended* March 31, 2024,and2023* was $4.4 million and $1.8 million, net of discount, respectively. Tax benefits recognized related to such transferable ITC’s during thethree months ended* March 31, 2024,and2023* was $11.5 million and $1.6 million, net of discount, respectively.

NOTE2 — NEW ACCOUNTING PRONOUNCEMENTS

New accounting pronouncements effective in thethree months ended March 31, 2024**

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

In* March 2023,the FASB issued ASU2023*-02 “Investments - Equity Method and Joint Ventures (Topic323),” which permits reporting entities to elect to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The amendments in ASU2023-02 are effective for fiscal years beginning after* December 15, 2023,including interim periods within those fiscal years. The amendments in this update should be applied on either a modified retrospective or a retrospective basis. The adoption of ASU2023*-02 didnot have an impact on the Company's condensed consolidated financial statements.

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New accounting pronouncements effective in future periods

Improvements to Reportable Segments Disclosures

In* November 2023,the FASB issued ASU2023*-07 “Segment Reporting–Improvements to Reportable Segments Disclosures (Topic280)” to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU (1) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss; (2) require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition; (3) require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic280 in interim periods; (4) clarify that if the CODM uses more thanone measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity* mayreportone* or more of those additional measures; and (5) require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure or measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The amendments in this ASU are effective for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024,*and should be applied retrospectively to all periods presented. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of these amendments on its consolidated financial statements.

Improvements to Income Tax Disclosures

In* December 2023,the FASB issued ASU2023*-09 “Income Taxes (Topic740)–Improvements to Income Tax Disclosures” to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU require that public entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This ASU also requires that all entities disclose, on an annual basis, (1) the amount of income taxes paid disaggregated by federal, state, and foreign taxes, (2) the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater thanfive percent of total income taxes paid, (3) income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign, and (4) income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. The amendments in this ASU are effective for annual periods beginning after* December 15, 2024,and should be applied on a prospective basis with the option to apply retrospectively. Early adoption is permitted for annual financial statements that havenot* yet been issued or made available for issuance. The Company is currently evaluating the impact of the adoption of these amendments on its consolidated financial statements.

NOTE3 — INVENTORIES

Inventories consist of the following:

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NOTE4—** FAIR VALUE OF FINANCIAL INSTRUMENTS**

The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received upon selling an asset or paid upon transferring a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level1 measurements) and the lowest priority to unobservable inputs (Level3 measurements). Thethree levels of the fair value hierarchy under the fair value measurement guidance are described below:

Level1 — unadjusted observable inputs that reflect quoted prices for identical assets or liabilities in active markets;

Level2 — inputs other than quoted prices included in Level1 that are observable for the asset or liability either directly or indirectly;

Level3 — unobservable inputs.

The following table sets forth certain fair value information at* March 31, 2024and December 31, 2023*for financial assets and liabilities measured at fair value by level within the fair value hierarchy, as well as cost or amortized cost. As required by the fair value measurement guidance, assets and liabilities are classified in their entirety based on the lowest level of inputs that is significant to the fair value measurement.

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The following table presents the amounts of gain (loss) recognized in the consolidated statements of operations and comprehensive income on derivative instruments (in thousands):

There wereno transfers of assets or liabilities between Level1, Level2 and Level3 during thethree months ended* March 31, 2024and2023.*

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The following table presents the effect of derivative instruments designated as cash flow hedges on the condensed consolidated statements of operations and comprehensive income (loss) for thethree months ended* March 31, 2024and2023:*

The estimated net amount of existing gain (loss) that is reported in "Accumulated other comprehensive income (loss)" as of* March 31, 2024that is expected to be reclassified into earnings within the next12* months is immaterial. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flow is from the transaction commencement date through* June 2031.*

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The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:

(*) Carrying amount value excludes the related deferred financing costs.

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The fair value of the long-term debt is determined by a valuation model, which is based on a conventional discounted cash flow methodology and utilizes assumptions of current borrowing rates, except for the fair value of the Convertible Senior Notes for which the fair value was estimated based on a quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period. A hypothetical change in the quoted bid price will result in a corresponding change in the estimated fair value of the Notes. The carrying value of the deposits, the short term revolving credit lines with banks and the commercial paper approximate their fair value.

Recently, interest rates for both short-term and long-term debt have increased sharply which* may*have a direct impact on the fair value of the Company's long-term debt presented above, should this trend continues.

The following table presents the fair value of financial instruments as of* March 31, 2024:*

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The following table presents the fair value of financial instruments as of* December 31, 2023:*

NOTE5 — STOCK-BASED COMPENSATION

In* March 2024,the Company granted certain members of its management and employees an aggregate of 209,563 restricted stock units ("RSUs") and 61,197 performance stock units ("PSUs") under the Company’s2018* Incentive Compensation Plan. The RSUs and PSUs have vesting periods of between 1 to 3 years from the grant date.

The fair value of each RSU and PSU on the grant date was $64.9 and $64.0, respectively. The Company calculated the fair value of each RSU and PSU on the grant date using the complex lattice, tree-based option-pricing model, and the Monte Carlo simulation, based on the following assumptions:

In* March 2023,the Company granted certain members of its management and employees an aggregate of 174,422 RSUs and 35,081 PSUs under the Company’s2018* Incentive Compensation Plan. The RSUs and PSUs have vesting periods of between 1 to 4 years from the grant date.

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The fair value of each RSU and PSU on the grant date was $79.9 and $79.6, respectively. The Company calculated the fair value of each RSU and PSU on the grant date using the complex lattice, tree-based option-pricing model based on the following assumptions:

There wereno other significant grants that were made by the Company during thethree months ended* March 31, 2024and2023.*

NOTE 6 —** INTEREST EXPENSE, NET**

The components of interest expense are as follows:

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NOTE7 — EARNINGS PER SHARE

Basic earnings per share attributable to the Company’s stockholders is computed by dividing net income or loss attributable to the Company’s stockholders by the weighted average number of shares of common stock outstanding for the period. The Company doesnot have any equity instruments that are dilutive, except for employee stock-based awards and convertible senior notes ("Notes").

The table below shows the reconciliation of the number of shares used in the computation of basic and diluted earnings per share (in thousands):

The number of stock-based awards that could potentially dilute future earnings per share and that werenot included in the computation of diluted earnings per share because to do so would have been anti-dilutive was 196.7 thousand and 106.3 thousand for thethree months ended* March 31, 2024and2023,* respectively.

As per ASU2020-06, the if-converted method is required for calculating any potential dilutive effect from convertible instruments. For thethree months ended* March 31, 2024,the average price of the Company's common stock didnot* exceed the per share conversion price of the Notes of $90.27, and other requirements for the Notes to be convertible werenot met and as such, there wasno dilutive effect from the Notes in respect with the aforementioned periods.

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NOTE8 — BUSINESS SEGMENTS

The Company hasthree reporting segments: the Electricity segment, the Product segment and the Energy Storage segment. These segments are managed and reported separately as each offers different products and serves different markets.

Transfer prices between the operating segments are determined based 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 the Company's disaggregated revenues from contracts with customers:

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

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NOTE9 — COMMITMENTS AND CONTINGENCIES

From time to time, the Company is named as a party to various lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company's business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, willnot be material to the Company’s consolidated financial statements as a whole.

Other matters

On* March 2, 2021,*the Company's Board of Directors established a Special Committee of independent directors to investigate, among other things, certain claims made in a report published by a short seller regarding the Company’s compliance with anti-corruption laws. The Special Committee is working with outside legal counsel to investigate the claims made. All members of the Special Committee are “independent” in accordance with the Company's Corporate Governance Guidelines, the NYSE listing standards and SEC rules applicable to board of directors in general. The Company is also providing information as requested by the SEC and Department of Justice ("DOJ") related to the claims.

Additionally, see Note11 – Subsequent Events, to the condensed consolidated financial statements for additional information.

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NOTE10 — INCOME TAXES

The Company’s effective tax rate provision for thethree months ended* March 31, 2024and2023* was (0.4)% and 21.1%, respectively. The effective rate differs from the federal statutory rate of 21% primarily due to the generation of investment tax credits, and the jurisdictional mix of earnings at differing tax rates.

On* August 16, 2022,the Inflation Reduction Act ("IRA") was signed into law in the United States. The Company believes that the construction and operations of its geothermal power plants, recovered energy-based power plants, battery energy storage systems and solar PV will benefit in the future from the IRA and enhance the economic feasibility of projects in the United States. PTC’s can be generated from2.75* cents per kWh, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to3.30 cents per kWh. ITC’s can be earned on investments from30.0%, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to50.0%. Battery Energy Storage Systems are eligible for ITC for projects placed-in-service after* December 31, 2022.In addition, the Company can now monetize PTC’s and ITC’s earned by transferring the credits to athird* party without having to enter into a tax equity transaction. The Company views the enactment of the IRA as favorable for the overall business climate for its sector.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of15% for companies with global revenues and profits above certain thresholds (referred to as Pillar2), with certain aspects of Pillar2 becoming effective* January 1, 2024,and other aspects becoming effective January 1, 2025.Currently, the Company doesnot* meet the revenue threshold requirements. The Company does anticipate being subject to Pillar2 in the near future years based on its anticipated growth projections. We will continue to evaluate the impact of proposed and enacted legislative changes to our effective tax rate and cash flows as new guidance becomes available.

Additionally, see Note11 – Subsequent Events, to the condensed consolidated financial statements for tax investigation in Kenya.

NOTE11 — SUBSEQUENT EVENTS

Cash Dividend

On* May 8, 2024,the Board of Directors of the Company declared, approved and authorized payment of a quarterly dividend of $7.2 million ($0.12 per share) to all holders of the Company’s issued and outstanding shares of common stock on May 22, 2024,payable on June 5, 2024.*

DEG4 Loan

On* April 4, 2024,the Company, throughone* of the its wholly owned subsidiaries, entered into a new $30 million subordinated loan agreement with Deutsche Investitions-und Entwicklungsgesellschaft mbH ("DEG") and on* April 18, 2024,it completed a drawdown of the full loan amount of $30 million (the “DEG4* Loan”). The DEG4 Loan bears a fixed interest rate of 7.79% and will be repaid in 6 equal semi-annual principal installments commencing on* December 21, 2028,with a final maturity date of June 21, 2031.*

TaxInvestigation in Kenya

On* April 23, 2024,the Company's branch in Kenya received a Letter of Preliminary Investigation Findings ("Letter") from the Kenya Revenue Authority (“KRA”) relating to tax years 2017-2022. The Letter sets forth a demand for approximately $79.0 million before any potential interest and penalties. Based on a preliminary review of the Letter, the Company and its advisors believe that these preliminary findings haveno* merit and that the Company has strong arguments against these preliminary findings raised in the KRA Letter.