ORMAT TECHNOLOGIES INC

For the period ended Sep 30, 2024. Filed Nov 7, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Sep 30, 2024 · Filed Nov 7, 2024

ORA$91.90-1.2%Stored close · as of Nov 6, 2026

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Contents

Item 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2024	December 31, 2023
(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$88,129	$195,808
Restricted cash and cash equivalents (primarily related to VIEs)	88,646	91,962
Receivables:
Trade less allowance for credit losses of $210 and $90 respectively (primarily related to VIEs)	153,074	208,704
Other	47,265	44,530
Inventories	47,408	45,037
Costs and estimated earnings in excess of billings on uncompleted contracts	31,345	18,367
Prepaid expenses and other	81,624	41,595
Total current assets	537,491	646,003
Investment in unconsolidated companies	126,767	125,439
Deposits and other	59,592	44,631
Deferred income taxes	199,010	152,570
Property, plant and equipment, net ($3,107,654 and $2,802,920 related to VIEs, respectively)	3,326,187	2,998,949
Construction-in-process ($390,703 and $376,602 related to VIEs, respectively)	847,048	814,967
Operating leases right of use ($12,823 and $9,326 related to VIEs, respectively)	30,205	24,057
Finance leases right of use (none related to VIEs)	2,843	3,510
Intangible assets, net	309,853	307,609
Goodwill	151,345	90,544
Total assets	$5,590,341	$5,208,279
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$217,927	$214,518
Short term revolving credit lines with banks (full recourse)	—	20,000
Commercial paper (less deferred financing costs of $25 and $29, respectively)	99,975	99,971
Billings in excess of costs and estimated earnings on uncompleted contracts	10,005	18,669
Current portion of long-term debt:
Limited and non-recourse (primarily related to VIEs)	67,979	57,207
Full recourse	160,847	116,864
Financing liability	4,093	5,141
Operating lease liabilities	4,178	3,329
Finance lease liabilities	1,330	1,313
Total current liabilities	566,334	537,012
Long-term debt, net of current portion:
Limited and non-recourse (primarily related to VIEs and less deferred financing costs of $8,375 and $7,889, respectively)	527,518	447,389
Full recourse (less deferred financing costs of $4,860 and $3,056, respectively)	846,183	698,187
Convertible senior notes (less deferred financing costs of $7,329 and $8,146, respectively)	469,108	423,104
Financing liability	216,476	220,619
Operating lease liabilities	22,348	19,790
Finance lease liabilities	1,589	2,238
Liability associated with sale of tax benefits	150,542	184,612
Deferred income taxes	77,487	66,748
Liability for unrecognized tax benefits	7,860	8,673
Liabilities for severance pay	10,234	11,844
Asset retirement obligation	126,980	114,370
Other long-term liabilities	42,843	22,107
Total liabilities	3,065,502	2,756,693
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest	10,856	10,599
Equity:
The Company's stockholders' equity:
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 60,476,526 and 60,358,887 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	61	60
Additional paid-in capital	1,630,335	1,614,769
Treasury stock, at cost (258,667 shares held as of September 30, 2024 and December 31, 2023, respectively)	(17,964)	(17,964)
Retained earnings	780,959	719,894
Accumulated other comprehensive income (loss)	(4,594)	(1,332)
Total stockholders' equity attributable to Company's stockholders	2,388,797	2,315,427
Noncontrolling interest	125,186	125,560
Total equity	2,513,983	2,440,987
Total liabilities, redeemable noncontrolling interest and equity	$5,590,341	$5,208,279

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands, except per share data) · (Dollars in thousands, except per share data)
Revenues:
Electricity	$164,638	$157,212	$522,117	$482,846
Product	37,357	39,831	100,018	83,331
Energy storage	9,789	11,013	26,778	21,907
Total revenues	211,784	208,056	648,913	588,084
Cost of revenues:
Electricity	114,941	107,166	342,186	311,348
Product	30,166	32,393	83,982	71,729
Energy storage	7,815	8,494	23,687	19,445
Total cost of revenues	152,922	148,053	449,855	402,522
Gross profit	58,862	60,003	199,058	185,562
Operating expenses:
Research and development expenses	1,816	1,392	5,110	4,763
Selling and marketing expenses	4,248	4,682	13,541	13,999
General and administrative expenses	22,973	14,044	60,536	49,525
Other operating income	(6,250)	—	(6,250)	—
Write-off of long-lived assets	323	—	1,280	—
Write-off of unsuccessful exploration activities	77	2,318	1,456	2,318
Operating income	35,675	37,567	123,385	114,957
Other income (expense):
Interest income	2,051	2,827	6,494	9,620
Interest expense, net	(34,822)	(25,054)	(99,506)	(73,078)
Derivatives and foreign currency transaction gains (losses)	2,046	(781)	132	(3,990)
Income attributable to sale of tax benefits	19,760	14,936	53,034	42,481
Other non-operating income, net	22	108	122	247
Income from operations before income tax and equity in earnings of investees	24,732	29,603	83,661	90,237
Income tax (provision) benefit	1,193	7,134	4,518	2,205
Equity in earnings (losses) of investees	(1,624)	(405)	437	1,862
Net income	24,301	36,332	88,616	94,304
Net income attributable to noncontrolling interest	(2,219)	(879)	(5,704)	(5,631)
Net income attributable to the Company's stockholders	$22,082	$35,453	$82,912	$88,673
Comprehensive income:
Net income	24,301	36,332	88,616	94,304
Other comprehensive income (loss), net of related taxes:
Change in foreign currency translation adjustments	4,914	(1,220)	2,485	(1,523)
Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of an unconsolidated investment that qualifies as a cash flow hedge	(1,863)	673	(924)	1,063
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	(2,649)	(4,749)	(3,277)	(7,675)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	(2,401)	—	(1,294)	—
Other changes in comprehensive income	11	12	36	40
Total other comprehensive income (loss), net of related taxes:	(1,988)	(5,284)	(2,974)	(8,095)
Comprehensive income	22,313	31,048	85,642	86,209
Comprehensive income attributable to noncontrolling interest	(3,071)	(655)	(5,992)	(5,266)
Comprehensive income attributable to the Company's stockholders	$19,242	$30,393	$79,650	$80,943
Earnings per share attributable to the Company's stockholders:
Basic:	$0.37	$0.59	$1.37	$1.50
Diluted:	$0.36	$0.59	$1.37	$1.49
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:
Basic	60,480	60,299	60,439	59,105
Diluted	60,770	60,570	60,726	59,494

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

	The Company's Stockholders' Equity
Accumulated
Additional · Other
Common Stock · Paid-in · Treasury · Retained · Comprehensive · Noncontrolling · Total
Shares · Amount · Capital · Stock · Earnings · Income (Loss) · Total · Interest · Equity
(Dollars in thousands, except per share data)
Balance at December 31, 2022	56,096	$56	$1,259,072	$(17,964)		$623,907		$2,500		$1,867,571		$153,404		$2,020,975
Stock-based compensation	—	—	2,990	—		—		—		2,990		—		2,990
Exercise of stock-based awards by employees and directors (*)	—	—	27	—		—		—		27		—		27
Issuance of common stock	3,600	4	297,117	—		—		—		297,121		—		297,121
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(2,360)		(2,360)
Cash dividend declared, $0.12 per share	—	—	—	—		(6,732)		—		(6,732)		—		(6,732)
Change in noncontrolling interest	—	—	1,239		—		—		1,239		(2,396)		(1,157)
Net income	—	—	—	—		29,029		—		29,029		4,235		33,264
Other comprehensive income (loss), net of related taxes:
Currency translation adjustments	—	—	—	—		—		(306)		(306)		(390)		(696)
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of an unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		(1,014)		(1,014)		—		(1,014)
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		(5,403)		(5,403)		—		(5,403)
Other	—	—	—	—		—		14		14		—		14
Balance at March 31, 2023	59,696	$60	$1,560,445	$(17,964)		$646,204		$(4,209)		$2,184,536		$152,493		$2,337,029
Balance as of the beginning of the period	59,696	$60	$1,560,445	$(17,964)		$646,204		$(4,209)		$2,184,536		$152,493		$2,337,029
Stock-based compensation	—	—	4,311	—		—		—		4,311		—		4,311
Issuance of common stock	540	—	44,542	—		—		—		44,542		—		44,542
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(135)		(135)
Cash dividend declared, $0.12 per share	—	—	—	—		(7,229)		—		(7,229)		—		(7,229)
Net income	—	—	—	—		24,191		—		24,191		45		24,236
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment	—	—	—	—		—		144		144		249		393
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		1,404		1,404		—		1,404
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as acash flow hedge	—	—	—	—		—		2,477		2,477		—		2,477
Other	—	—	—	—		—		14		14		—		14
Balance at June 30, 2023	60,236	$60	$1,609,298	$(17,964)		$663,166		$(170)		$2,254,390		$152,652		$2,407,042
Balance as of the beginning of the period	60,236	$60	$1,609,298	$(17,964)		$663,166		$(170)		$2,254,390		$152,652		$2,407,042
Stock-based compensation	—	—	3,934	—		—		—		3,934		—		3,934
Exercise of stock-based awards by employees and directors (*)	118	—	—	—		—		—		—		—		—
Stock issuance costs reimbursement	—	—	8	—		—		—		8		—		8
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(348)		(348)
Cash dividend declared, $0.12 per share	—	—	—	—		(7,228)		—		(7,228)		—		(7,228)
Transaction with noncontrolling interest	—	—	(2,663)		—		—		(2,663)		(26,392)		(29,055)
Net income	—	—	—	—		35,453		—		35,453		506		35,959
Currency translation adjustment	—	—	—	—		—		(996)		(996)		(224)		(1,220)
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		673		673		—		673
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		(4,749)		(4,749)		—		(4,749)
Other	—	—	—	—		—		12		12		—		12
Balance at September 30, 2023	60,354	$60	$1,610,577	$(17,964)		$691,391		$(5,230)		$2,278,834		$126,194		$2,405,028
Balance at December 31, 2023	60,359	$60	$1,614,769	$(17,964)		$719,894		$(1,332)		$2,315,427		$125,560		$2,440,987
Stock-based compensation	—	—	4,769	—		—		—		4,769		—		4,769
Exercise of stock-based awards by employees and directors (*)	63	—	55	—		—		—		55		—		55
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(2,587)		(2,587)
Cash dividend declared, $0.12 per share	—	—	—	—		(7,243)		—		(7,243)		—		(7,243)
Net income	—	—	—	—		38,587		—		38,587		1,924		40,511
Other comprehensive income (loss), net of related taxes:
Currency translation adjustments	—	—	—	—		—		(1,701)		(1,701)		(462)		(2,163)
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of an unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		510		510		—		510
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		561		561		—		561
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		1,066		1,066		—		1,066
Other	—	—	—	—		—		53		53		—		53
Balance at March 31, 2024	60,422	$60	$1,619,593	$(17,964)		$751,238		$(843)		$2,352,084		$124,435		$2,476,519
Balance as of the beginning of the period	60,422	$60	$1,619,593	$(17,964)		$751,238		$(843)		$2,352,084		$124,435		$2,476,519
Stock-based compensation	—	—	5,077	—		—		—		5,077		—		5,077
Exercise of stock-based awards by employees and directors (*)	31	1	93	—		—		—		94		—		94
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(90)		(90)
Cash dividend declared, $0.12 per share	—	—	—	—		(7,344)		—		(7,344)		—		(7,344)
Net income	—	—	—	—		22,243		—		22,243		1,777		24,020
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment	—	—	—	—		—		(164)		(164)		(102)		(266)
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		429		429		—		429
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		(1,189)		(1,189)		—		(1,189)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—	—		—		41		41		—		41
Other	—	—	—	—		—		(28)		(28)		—		(28)
Balance at June 30, 2024	60,453	$61	$1,624,763	$(17,964)		$766,137		$(1,754)		$2,371,243		$126,020		$2,497,263
Balance as of the beginning of the period	60,453	$61	$1,624,763	$(17,964)		$766,137		$(1,754)		$2,371,243		$126,020		$2,497,263
Stock-based compensation	—	—	5,042	—		—		—		5,042		—		5,042
Exercise of stock-based awards by employees and directors (*)	24	—	—	—		—		—		—		—		—
Cash paid to noncontrolling interest	—	—	—	—		—		—		—		(1,948)		(1,948)
Cash dividend declared, $0.12 per share	—	—	—	—		(7,260)		—		(7,260)		—		(7,260)
Buyout of Class B membership in OPAL	—	—	530		—		—		530		(1,697)		(1,167)
Net income	—	—	—	—		22,082		—		22,082		1,959		24,041
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment	—	—	—	—		—		4,062		4,062		852		4,914
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—	—	—		—		(1,863)		(1,863)		—		(1,863)
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		(2,649)		(2,649)		—		(2,649)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—	—	—		—		(2,401)		(2,401)		—		(2,401)
Other comprehensive income (loss)	—	—	—	—		—		11		11		—		11
Balance at September 30, 2024	60,477	$61	$1,630,335	$(17,964)		$780,959		$(4,594)		$2,388,797		$125,186		$2,513,983

(*) Resulted in an amount lower than $1,000.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

	Nine Months Ended September 30,
	2024	2023
(Dollars in thousands)
Cash flows from operating activities:
Net income	$88,616	$94,304
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	192,813	164,905
Accretion of asset retirement obligation	5,839	4,644
Stock-based compensation	14,887	11,235
Income attributable to sale of tax benefits, net of interest expense	(24,365)	(23,896)
Equity in earnings of investees	(437)	(1,862)
Mark-to-market of derivative instruments	870	284
Disposal of property, plant and equipment	63	35
Write-off of unsuccessful exploration activities	1,456	2,318
Write-off of long-lived assets	1,280	—
Loss (gain) on severance pay fund asset	(43)	525
Loss (gain) on foreign currency exchange rates	(218)	—
Deferred income tax provision	(30,601)	(26,426)
Liability for unrecognized tax benefits	(813)	79
Changes in operating assets and liabilities, net of businesses acquired:
Receivables	42,527	(48,805)
Costs and estimated earnings in excess of billings on uncompleted contracts	(12,978)	(9,361)
Long-term costs and estimated earnings in excess of billings on uncompleted contracts	(12,252)	—
Inventories	(2,371)	(22,012)
Prepaid expenses and other	(10,713)	(11,702)
Change in operating lease right of use asset	2,950	2,874
Deposits and other	(3,518)	(8,028)
Accounts payable and accrued expenses	7,022	32,774
Billings in excess of costs and estimated earnings on uncompleted contracts	(8,664)	1,834
Liabilities for severance pay	(1,610)	(1,742)
Change in operating lease liabilities	(5,730)	(2,497)
Other long-term liabilities	8,290	10,776
Net cash provided by operating activities	252,300	170,256
Cash flows from investing activities:
Capital expenditures	(359,941)	(448,791)
Investment in unconsolidated companies	(1,815)	(9,600)
Buyout of Class B membership in Opal Geo	(9,800)	—
Cash paid for business acquisition, net of cash acquired	(274,632)	—
Decrease (increase) in severance pay fund asset, net of payments to retired employees	1,073	225
Net cash used in investing activities	(645,115)	(458,166)
Cash flows from financing activities:
Proceeds from long-term loans, net of transaction costs	442,639	99,850
Proceeds from exercise of options by employees	150	27
Proceeds from issuance of convertible notes, net of transaction costs	44,203	—
Proceeds from revolving credit lines with banks	134,500	35,000
Repayment of revolving credit lines with banks	(154,500)	—
Cash received from noncontrolling interest	12,251	7,341
Repayments of long-term debt	(164,616)	(175,860)
Proceeds from issuance of common stock, net of related costs	—	341,671
Cash paid to noncontrolling interest	(6,075)	(34,523)
Payments under finance lease obligations	(1,023)	(1,590)
Deferred debt issuance costs	(3,652)	(3,159)
Cash dividends paid	(21,847)	(21,189)
Net cash provided by financing activities	282,030	247,568
Effect of exchange rate changes	(210)	(67)
Net change in cash and cash equivalents and restricted cash and cash equivalents	(110,995)	(40,409)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	287,770	226,676
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$176,775	$186,267
Supplemental non-cash investing and financing activities:
Change in accounts payable related to purchases of property, plant and equipment	$(36,245)	$27,581
Right of use assets obtained in exchange for new lease liabilities	$9,045	$5,319

The accompanying notes are an integral part of thecondensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 —GENERAL AND BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position, the condensed consolidated statements of operations and comprehensive income, the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for periods presented.

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

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 (“PPA”) with Salt River Project, and the Salt Wells power plant located in Churchill County, Nevada, which sells electricity under a long-term 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 PPA. The solar assets of Stillwater Solar PV II in Churchill County, Nevada, and Woods Hill in Windham County, Connecticut, sell their electricity under PPAs, 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 ASC 810, Consolidation.

In the first quarter of 2024, and during annual 2023, 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. There wereno such costs in the second and third quarters of 2024. Accounting guidance provides that the allocation of the purchase price may be adjusted for up to one 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 is not yet finalized is related to intangible assets, property, plant and equipment and certain tax matters and the related impact on goodwill.

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

Trade receivables and others (1)	$4.4
Deferred income taxes	3.1
Property, plant and equipment and construction-in-process (2)	197.7
Operating lease right of use	1.2
Other long-term assets	0.2
Intangible assets (3)	23.6
Total assets acquired	$230.2
Accounts payable, accrued expenses and others	$1.5
Other current liabilities	1.8
Operating lease liabilities	1.2
Other long-term liabilities	5.0
Asset retirement obligation	6.8
Total liabilities assumed	$16.3
Total assets acquired, and liabilities assumed, net	$213.9
Goodwill (4)	$60.7

(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 three months ended September 30, 2024, the acquired portfolio of assets contributed $7.5 million to the Company's Electricity revenues, and $0.5 million to the Company's earnings which were included in the Company’s condensed consolidated statements of operations and comprehensive income for that period. For the period from acquisition date to September 30, 2024, the acquired portfolio of assets contributed $25.5 million to the Company's Electricity revenues, and $6.4 million to the Company's earnings which were included in the Company’s condensed consolidated statements of operations and comprehensive income for that period.

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 does not include any impact from transaction synergies or any other material, nonrecurring adjustments directly attributable to the business combination.

	Pro forma for the Three Months Ended September 30,		Pro forma for the Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in millions) · (Dollars in millions)
Electricity revenues	$164.6	$165.3	$522.1	$508.9
Total revenues	$211.8	$216.1	$648.9	$614.1
Net income attributable to the Company's stockholders	$22.1	$32.8	$84.3	$80.1

Hapoalim 2024 Loan

Concurrently with the purchase transaction with EGPNA, on January 2, 2024, the Company entered into a definitive loan agreement (the "BHI Loan Agreement 2024") with Hapoalim Bank. The BHI Loan Agreement 2024 provides for a loan by Hapoalim Bank to the Company in an aggregate principal amount of $75 million (the “Hapoalim 2024 Loan”). The outstanding principal amount of the Hapoalim 2024 Loan will be repaid in 32 quarterly payments of $2.3 million each, commencing on April 1, 2024. The duration of the Hapoalim 2024 Loan is 8 years and it bears interest of 6.6%, payable every three months. The BHI Loan Agreement 2024 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The BHI Loan Agreement includes other customary affirmative and negative covenants, including nonpayment and noncompliance events of default.

HSBC Bank 2024 Loan

Concurrently with the purchase transaction with EGPNA, on January 2, 2024, the Company entered into a definitive loan agreement (the "HSBC Loan Agreement 2024") with HSBC Bank. The HSBC Loan Agreement 2024 provides for a loan by HSBC Bank to the Company in an aggregate principal amount of $125 million (the “HSBC Bank 2024 Loan”). The outstanding principal amount of the HSBC Bank 2024 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, 2028 of $37.5 million. The duration of the HSBC Bank 2024 Loan is 4 years and it bears interest of 3-month Secured Overnight Financing Rate ("SOFR") plus 2.25%, payable quarterly. The HSBC Loan Agreement 2024 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The HSBC Loan Agreement 2024 includes other customary affirmative and negative covenants, including nonpayment and noncompliance events of default.

Interest Rate Swap

Concurrently with the issuance of the HSBC Bank 2024 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 Bank 2024 Loan at a fixed 3-month SOFR of 3.9%. The terms of the IR Swap match those of the HSBC Bank 2024 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 ASC 815, 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 including four geothermal power plants known as the Mammoth G1, G2, G3 and Casa Diablo 4 (“CD4”) projects. The remaining classes of ownership interests in CD4 are owned by an unrelated third party and are not 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 of CD4.

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.

DEG 4 Loan

On April 4, 2024, the Company, through one of 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 “DEG 4 Loan”). The DEG 4 Loan bears a fixed interest rate of 7.9% 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.

Discount 2024 Loan

On May 22, 2024, the Company entered into a definitive loan agreement (the "Discount 2024 Loan Agreement") with Israel Discount Bank Ltd. (“Discount Bank”). The Discount 2024 Loan Agreement provides for a loan by Discount Bank to the Company in an aggregate principal amount of $31.8 million (the “Discount 2024 Loan”). The outstanding principal amount of the Discount 2024 Loan will be repaid in 32 quarterly payments of $1 million each, commencing on August 22, 2024. The duration of the Discount 2024 Loan is 8 years and it bears an annual interest of 6.75%. The Discount 2024 Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Discount 2024 Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default.

The Dominica Project

In December 2023, the Company entered into agreements with the Commonwealth of Dominica to build and operate a 10 MW binary geothermal power plant in the Caribbean country of Dominica. Under these agreements, the Company will construct the power plant, operate, and sell its generated energy to Dominica Electricity Services Limited (presently the only electricity utility in the Commonwealth of Dominica) over a period of 25 years at the end of which ownership of the power plant will be transferred to the Government of the Commonwealth of Dominica. The Company accounted for this transaction under the guidance of ASC 853, Service Concession Arrangements (“ASC 853”), which directs a reporting entity to apply ASC 606, Revenue from Contracts with Customers (“ASC 606”).

Under the aforementioned accounting guidance, the Company identified the construction and the operation of the power plant astwo distinct performance obligations, and accordingly allocated the total transaction price to these separate performance obligations in the arrangement, based on their estimated stand-alone selling price. The Company concluded that the performance obligations are satisfied over time. Additionally, starting the second quarter of 2024, in conjunction with the power plant start of construction, the Company started recognizing revenues relating to the construction performance obligation based on an input method using costs incurred to total costs expected in the project.

Tax Investigation 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 to 2022. The Letter sets forth a demand for approximately $79.0 million before any potential interest and penalties. On July 8, 2024, the KRA informed the Company that its investigation was concluded and closed and that the initial demand for $79.0 million would be reduced tozero, and as a result, no additional taxes, interest or penalties would be due.

Additional 2.50% Senior Convertible Notes due 2027

On July 15, 2024, the Company issued an additional $45.2 million aggregate principal amount of its 2.50% Convertible Senior Notes due 2027 (the “Additional Notes”). The Additional Notes were issued as additional notes pursuant to the indenture, dated June 27, 2022, as supplemented by the first supplemental indenture, dated July 15, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”). The Additional Notes constitute a further issuance of, and form a single series with, the $431.3 million aggregate principal amount of the Company’s outstanding 2.5% Convertible Senior Notes due 2027 originally issued in June 2022 (the “Original Convertible Notes” and together with the Additional Notes, the “Notes”). The Additional Notes will have substantially identical terms to the Existing Convertible Notes, except that the Additional Notes have a different issuance date and will initially trade under a different restricted CUSIP number than the Existing Convertible Notes until such time as the Additional Notes are no longer required to bear restrictive legends under the Indenture and have an unrestricted CUSIP. The aggregated proceeds received from the issuance of the Additional Notes were $44.2 million, net of discount and fees.

Opal Geo tax monetization buyout

On July 31, 2024, the Company entered into an agreement with the third-party investor in Opal Geo, a wholly-owned limited liability company formed solely for purpose of monetization of federal production tax credits and certain other tax benefits, to purchase 100% of the Class B membership interests in Opal Geo for a total of $9.8 million. As a result, the Company became the sole owner and beneficiary of all the economic benefits in Opal Geo, and continued to consolidate Opal Geo in its condensed consolidated financial statements. The purchase of the Class B membership interest in Opal Geo was recorded as an equity transaction resulting in a reduction to the remaining balance of the related liability associated with sale of tax benefits, and the related noncontrolling interest of $1.7 million. The surplus of $0.5 million was charged to additional paid-in capital.

Discount 2024 II Loan

On September 26, 2024, the Company entered into a definitive loan agreement (the "Discount 2024 II Loan Agreement") with Discount Bank of New York (“Discount NY Bank”). The Discount 2024 II Loan Agreement provides for a loan by Discount NY Bank to the Company in an aggregate principal amount of $50.0 million (the “Discount 2024 II Loan”). The outstanding principal amount of the Discount 2024 II Loan will be repaid in 15 quarterly payments of $1.56 million each, commencing on December 31, 2024, with a final 16th payment equal to the remaining unpaid principal amount of the loan of $26.6 million. The duration of the Discount 2024 II Loan is 4 years, unless extended by the Company under certain conditions for an additional period of up to 4 years. The Discount 2024 II Loan bears an annual interest of 3-month Term SOFR plus 2.35%, with a SOFR floor of 2.5%. The Discount 2024 II Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a financial debt to adjusted EBITDA ratio not to exceed 6, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Discount 2024 II Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default.

Settlement Agreement

On August 1, 2024, the Company entered into a settlement agreement, effective April 2024, (the “Agreement”) with a third-party battery systems supplier (the “Supplier”). Under the Agreement, the Supplier paid to the Company $35.0 million as a recovery of damages, such as significant loss of potential profit due to project delays, as well as additional cost related to locating and purchasing substitute battery solutions from alternative vendors, incurred by the Company (the “Recovery of Damages”) to settle the dispute. On August 16, 2024, the Company received the Recovery of Damages payment contingent upon certain conditions which the Company expects to be met, on a pro-rata basis, during the period until March 31, 2026. The Company accounted for the Recovery of Damages amount under the guidance of ASC 450, Contingencies, and ASC 705, Cost of Sales and Services, and as a result, deemed $25.0 million as a recovery of damages, which will be recognized as income once contingency conditions are met, and $10.0 million as a reduction to the cost of battery systems to be purchased under the Agreement. During the three and nine months ended September 30, 2024, the Company recognized income of $6.3 million under “Other operating income” in the condensed consolidated statements of operations and comprehensive income. This amount represents the non-refundable portion of the recovery of damages for which contingency conditions have been met.

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 approximately 26 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. Additionally, since the beginning of the war, Israel has faced hostilities with militant terrorist groups in the West Bank, Hezbollah and other Iranian proxy forces have exchanged fire with Israel around Israel’s borders, and Iran and Israel have been engaged in a conflict involving direct attacks on each other’s soil for the first time in history, including two widescale Iranian missile attacks on military and civilian infrastructure in Israel’s largest cities. In the second half of 2024, after almost a year of missile attacks by Hezbollah on northern Israel and widespread resulting displacement of Israel’s northern residents, Israel began airstrikes and other military operations on Hezbollah targets in Lebanon, culminating in ground operations in southern Lebanon aimed at removing Hezbollah’s weapons infrastructure. Iran, Hezbollah, and other proxy forces and terrorist organizations have threatened to escalate the fighting throughout Israel, including targeting major infrastructure facilities. These disruptions so far have had minimal impact on the Company’s operations, but may 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. In addition, they may slow the Company’s ability to execute its Electricity segment growth plans. This has also resulted in an increase in insurance premium costs for shipments into and out of the seaport.

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 a 30-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.

The write-off of long-lived assets for the three and nine months ended September 30, 2024 of $0.3 million, and $1.3 million, respectively, is related to the termination of the waste heat agreement between the Company's wholly-owned subsidiary, OREG 4, and Highline Electric Association, Inc., effective May 2024.

Write-offs of unsuccessful exploration activities

The write-off of unsuccessful exploration activities for the three and nine months ended September 30, 2024 of $0.1 million, and $1.5 million, respectively, is related to exploration activities that the Company decided to no longer pursue.

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:

	September 30,	December 31,
	2024	2023
(Dollars in thousands)
Cash and cash equivalents	$88,129	$195,808
Restricted cash and cash equivalents	88,646	91,962
Total Cash and cash equivalents and Restricted cash and cash equivalents	$176,775	$287,770

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.

Cash investments:

The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At September 30, 2024 and December 31, 2023, the Company had deposits totaling $24.5 million and $43.2 million, respectively, inten U.S. financial institutions that were federally insured up to $250,000 per account. At September 30, 2024 and December 31, 2023, the Company’s deposits in foreign countries amounted to approximately $51.9 million and $57.5 million, respectively.

Account receivables:

At September 30, 2024 and December 31, 2023, accounts receivable related to operations in foreign countries amounted to approximately $102.3 million, and $152.2 million, respectively. At September 30, 2024 and December 31, 2023, accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of 10% of total consolidated revenues for the related period, amounted to approximately 54% and 57% of the Company’s trade receivables, respectively. The aggregate amount of notes receivable exceeding 10% of total receivables as of September 30, 2024 and December 31, 2023 is $102.0 million, and $161.0 million, respectively.

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Southern California Public Power Authority (“SCPPA”)	17.9%	18.7%	20.9%	22.0%
Sierra Pacific Power Company and Nevada Power Company	13.5	14.0	15.0	16.5
Kenya Power and Lighting Co. Ltd. ("KPLC")	13.5	13.1	12.9	14.0

The Company has historically been able to collect on substantially all of its receivable balances. As of September 30, 2024, the amount overdue from KPLC in Kenya was $29.8 million of which $7.8 million was paid in October 2024. The Company believes it will be able to collect all past due amounts from KPLC. 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 September 30, 2024, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $24.2 million of which $1.1 million was paid in October 2024. 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 from ENEE.

Allowance for credit losses

The Company performs an analysis of potential credit losses related to its financial instruments that are within the scope of ASU 2018-19, Codification Improvements to Topic 325, 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 the three and nine months ended September 30, 2024 and 2023 (all related to trade receivables):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands) · (Dollars in thousands)
Beginning balance of the allowance for expected credit losses	$200	$90	$90	$90
Change in the provision for expected credit losses for the period	10	—	120	—
Ending balance of the allowance for expected credit losses	$210	$90	$210	$90

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 September 30, 2024 and December 31, 2023 are as follows:

	September 30,	December 31,
	2024	2023
(Dollars in thousands)
Contract assets (*)	$31,345	$18,367
Contract liabilities (*)	$(10,005)	$(18,669)

(*) 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 was not yet fully recognized as product revenues during the nine months ended September 30, 2024 as a result of performance obligations having not been fully satisfied yet as of September 30, 2024. Additionally, as of September 30, 2024, long-term costs and estimated earnings in excess of billings on uncompleted contracts related to the Dominica project in the amount of $12.3 million is included under “Deposits and other” in the condensed consolidated financial statements due its long-term nature.

On September 30, 2024, the Company had approximately $162.6 million of remaining performance obligations not 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 the three and nine months ended September 30, 2024, and 2023 are disclosed under Note 8 - 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:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands) · (Dollars in thousands)
Lease income relating to lease payments from operating leases	$131,441	$129,903	$407,962	$392,665

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 normal purchase and sale transactions. Changes in the fair value of derivatives not 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 2022 and 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 a third party. The option for transferability of credits applies to taxable years beginning after December 31, 2022. Several of the Company’s projects, which are not 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 a third-party under the provisions of the IRA. The Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the condensed consolidated statement of operations and comprehensive income. PTCs 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 condensed consolidated statement of operations and comprehensive income. Income recognized related to the expected sale of such transferable PTCs during the three and nine months ended September 30, 2024, was $7.1 million and $15.1 million, net of discount, respectively, and $2.4 million and $6.9 million, net of discount, for the three and nine months ended September 30, 2023, respectively. Tax benefits recognized under Income tax (provision) benefit related to transferable ITCs during the three and nine months ended September 30, 2024, was $9.6 million and $27.3 million, net of discount, respectively, and $6.6 million and $17.2 million, net of discount, for the three and nine months ended September 30, 2023, respectively.

In September 2024, the Company entered into a tax credit purchase agreement with a third-party under which it sold PTCs in the amount of $14.2 million in cash to the third party. These PTCs were generated by the Company’s eligible geothermal power plants.

NOTE 2 —NEW ACCOUNTING PRONOUNCEMENTS

New accounting pronouncements effective in future periods

Improvements to Reportable Segments Disclosures

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting–Improvements to Reportable Segments Disclosures (Topic 280)” 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 Topic 280 in interim periods; (4) clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one 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 in the process of 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 ASU 2023-09 “Income Taxes (Topic 740)–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 than five 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 have not 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.

NOTE 3 —INVENTORIES

Inventories consist of the following:

	September 30,	December 31,
	2024	2023
(Dollars in thousands)
Raw materials and purchased parts for assembly	$22,607	$20,588
Self-manufactured assembly parts and finished products	24,801	24,449
Total inventories	$47,408	$45,037

NOTE 4—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 (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:

Level 1 — unadjusted observable inputs that reflect quoted prices for identical assets or liabilities in active markets;

Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly;

Level 3 — unobservable inputs.

The following table sets forth certain fair value information at September 30, 2024 and 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.

	Fair Value
	Carrying Value at September 30, 2024	Total	Level 1	Level 2	Level 3
(Dollars in thousands)
Assets:
Current assets:
Cash equivalents (primarily restricted cash accounts)	$50,686	$50,686	$50,686	$—	$—
Interest rate swap (3)	371	371	—	371	—
Currency forward contracts (2)	536	536	—	536	—
Liabilities:
Current liabilities:
Cross-currency swap (1)	(3,808)	(3,808)	—	(3,808)	—
Long term liabilities:
Interest rate swap (3)	(1,254)	(1,254)	—	(1,254)	—
Cross-currency swap (1)	(14,194)	(14,194)	—	(14,194)	—
	$32,338	$32,338	$50,686	$(18,348)	$—

	Fair Value
	Carrying Value at December 31, 2023	Total	Level 1	Level 2	Level 3
(Dollars in thousands)
Assets:
Current assets:
Cash equivalents (primarily restricted cash accounts)	$53,877	$53,877	$53,877	$—	$—
Currency forward contracts (2)	1,406	1,406	—	1,406	—
Liabilities:
Current liabilities:
Cross- currency swap (1)	(3,686)	(3,686)	—	(3,686)	—
Long-term liabilities:
Cross-currency swap (1)	(8,137)	(8,137)	—	(8,137)	—
	$43,461	$43,461	$53,877	$(10,416)	$—

These amounts relate to cross-currency swap contracts valued primarily based on the present value of the cross-currency swap future settlement prices for U.S. Dollar (“USD”) and New Israeli Shekel (“NIS”) zero yield curves and the applicable exchange rate as of September 30, 2024 and December 31, 2023, as applicable. These amounts are included within “Accounts payable and accrued expenses” or “Other long-term liabilities”, as applicable, in the condensed consolidated balance sheets on September 30, 2024 and December 31, 2023. Cash collateral deposits in the amount of $23.0 million and $10.6 million as of September 30, 2024, and December 31, 2023, respectively, are presented under “Other receivables” in the condensed consolidated balance sheets.
These amounts relate to currency forward contracts valued primarily based on observable inputs, including forward and spot prices for currencies, net of contracted rates and then multiplied by notional amounts, and are included within “Receivables, other” or “Accounts payable and accrued expenses”, as applicable, in the condensed consolidated balance sheets on September 30, 2024 and December 31, 2023, with the corresponding gain or loss being recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.
This amount relates to interest rate swap contracts valued primarily based on the present value of the interest rate swap settlement prices and the future 3-month SOFR prices based on USD zero yield curve as of September 30, 2024. This amount is included within “Receivables, other” or “Other long-term liabilities”, as applicable, in the condensed consolidated balance sheets on September 30, 2024.

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

Amount of recognized gain (loss) · Amount of recognized gain (loss)
Derivative instruments · Location of recognized gain (loss) · Three Months Ended September 30, · Nine Months Ended September 30,
2024 · 2023 · 2024 · 2023
(Dollars in thousands) · (Dollars in thousands)
Derivatives not designated as hedging instruments
Currency forward contracts (1)	Derivative and foreign currency transaction gains (losses)	$735	$(1,090)	$222	$(3,817)
Derivatives designated as cash flow hedging instruments
Cross currency swap (2)	Derivative and foreign currency transaction gains (losses)	$2,460	$(7,011)	$(2,903)	$(17,564)
Interest rate swap (2)	Interest expense, net	$412	$—	$1,302	$—

The foregoing currency forward transactions were not designated as hedge transactions and were marked to market with the corresponding gains or losses recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.
The foregoing cross-currency and interest rate swap transactions were designated as a cash flow hedging instruments. The changes in the cross currency swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of “Accumulated other comprehensive income (loss)” to “Derivatives and foreign currency transaction gains (losses)” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income. The changes in the interest rate swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of “Accumulated other comprehensive income (loss)” to “Interest expenses, net” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income.

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the three and nine months ended September 30, 2024 and 2023.

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 the three and nine months ended September 30, 2024, and 2023:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands) · (Dollars in thousands)
Cash flow hedges:
Balance in Accumulated other comprehensive income (loss) beginning of period	$162	$994	$(318)	$3,920
Gain or (loss) recognized in Other comprehensive income (loss):
Cross currency swap	(189)	2,262	(6,179)	9,888
Interest rate swap	(1,989)	—	8	—
Amount reclassified from Other comprehensive income (loss) into earnings
Cross currency swap	(2,460)	(7,011)	2,903	(17,564)
Interest rate swap	(412)	—	(1,302)	—
Balance in Accumulated other comprehensive income (loss) end of period	$(4,889)	$(3,756)	$(4,889)	$(3,756)

The estimated net amount of existing gain (loss) that is reported in "Accumulated other comprehensive income (loss)" as of September 30, 2024 that is expected to be reclassified into earnings within the next 12 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.

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

	Fair Value		Carrying Amount (*)
	September 30, 2024	December 31, 2023	September 30, 2024	December 31, 2023
(Dollars in millions) · (Dollars in millions)
Hapoalim 2024 Loan	$72.1	$—	$70.3	$—
HSBC Bank 2024 Loan	118.5	—	112.5	—
Mammoth Senior Secured Notes	158.2	—	135.1	—
Discount 2024 Loan	31.5	—	30.8	—
Discount 2024 II Loan	50.0	—	50.0	—
Mizrahi Loan	58.1	61.4	56.3	60.9
Mizrahi Loan 2023	49.5	52.0	46.9	50.0
Convertible Senior Notes	497.8	444.6	476.4	431.3
HSBC Loan	27.3	33.8	28.6	35.7
Hapoalim Loan	69.1	75.0	71.4	80.4
Hapoalim Loan 2023	88.1	99.7	85.0	95.0
Discount Loan	59.0	69.9	62.5	75.0
Finance liability - Dixie Valley	220.7	207.2	220.6	225.8
Olkaria III Loan - DFC	105.0	116.4	107.2	120.7
Olkaria III plant 4 Loan - DEG 2	19.9	21.6	20.0	22.5
Olkaria III plant 1 Loan - DEG 3	17.5	19.0	17.5	19.7
DEG 4 Loan	31.9	—	30.0	—
Platanares Loan - DFC	64.7	71.3	65.5	71.7
OFC 2 LLC ("OFC 2")	122.5	134.2	131.1	142.5
Don A. Campbell 1 ("DAC 1")	49.5	52.3	53.6	57.4
USG Prudential - NV	22.1	22.3	23.4	23.9
USG Prudential - ID Refinancing	49.8	54.1	55.9	58.9
USG DOE	27.4	30.0	27.4	30.2
Senior Unsecured Bonds	177.2	202.8	188.7	220.6
Senior Unsecured Loan	136.0	150.4	141.2	158.0
Other long-term debt	4.8	6.8	5.0	7.7

(*) The carrying amount value of the loans excludes the related deferred financing costs.

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 continue.

The following table presents the fair value of financial instruments as of September 30, 2024:

	Level 1	Level 2	Level 3	Total
(Dollars in millions)
Hapoalim 2024 Loan	$—	$—	$72.1	$72.1
HSBC Bank 2024 Loan	—	—	118.5	118.5
Mammoth Senior Secured Notes	—	—	158.2	158.2
Discount 2024 Loan	—	—	31.5	31.5
Discount 2024 II Loan	—	—	50.0	50.0
Mizrahi Loan	—	—	58.1	58.1
Mizrahi Loan 2023	—	—	49.5	49.5
Convertible Senior Notes	—	497.8	—	497.8
HSBC Loan	—	—	27.3	27.3
Hapoalim Loan	—	—	69.1	69.1
Hapoalim Loan 2023	—	—	88.1	88.1
Discount Loan	—	—	59.0	59.0
Finance liability - Dixie Valley	—	—	220.7	220.7
Olkaria III Loan - DFC	—	—	105.0	105.0
Olkaria III plant 4 Loan - DEG 2	—	—	19.9	19.9
Olkaria III plant 1 Loan - DEG 3	—	—	17.5	17.5
DEG 4 Loan	—	—	31.9	31.9
Platanares Loan - DFC	—	—	64.7	64.7
OFC 2 Senior Secured Notes	—	—	122.5	122.5
DAC 1 Senior Secured Notes	—	—	49.5	49.5
USG Prudential - NV	—	—	22.1	22.1
USG Prudential - ID	—	—	49.8	49.8
USG DOE	—	—	27.4	27.4
Senior Unsecured Bonds	—	—	177.2	177.2
Senior Unsecured Loan	—	—	136.0	136.0
Other long-term debt	—	—	4.8	4.8
Deposits	19.9	—	—	19.9

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

	Level 1	Level 2	Level 3	Total
(Dollars in millions)
Mizrahi Loan	$—	$—	$61.4	$61.4
Mizrahi Loan 2023	—	—	52.0	52.0
Convertible Senior Notes	—	444.6	—	444.6
HSBC Loan	—	—	33.8	33.8
Hapoalim Loan	—	—	75.0	75.0
Hapoalim Loan 2023	—	—	99.7	99.7
Discount Loan	—	—	69.9	69.9
Financing Liability - Dixie Valley	—	—	207.2	207.2
Olkaria III Loan - DFC	—	—	116.4	116.4
Olkaria IV - DEG 2	—	—	21.6	21.6
Olkaria IV - DEG 3	—	—	19.0	19.0
Platanares Loan - DFC	—	—	71.3	71.3
OFC 2 Senior Secured Notes	—	—	134.2	134.2
DAC 1 Senior Secured Notes	—	—	52.3	52.3
USG Prudential - NV	—	—	22.3	22.3
USG Prudential - ID	—	—	54.1	54.1
USG DOE	—	—	30.0	30.0
Senior Unsecured Bonds	—	—	202.8	202.8
Senior Unsecured Loan	—	—	150.4	150.4
Other long-term debt	—	—	6.8	6.8
Deposits	20.9	—	—	20.9

NOTE 5 —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’s 2018 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:

Risk-free interest rates	4.27%	—	4.94%
Expected life (in years)	1	—	3
Dividend yield	0.73%
Expected volatility (weighted average)	28.0%	—	34.0%

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’s 2018 Incentive Compensation Plan. The RSUs and PSUs have vesting periods of between 1 to 4 years from the grant date.

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:

Risk-free interest rates	3.86%	—	4.68%
Expected life (in years)	2	—	5.75
Dividend yield	0.59%
Expected volatility (weighted average)	36%	—	42.20%

In May 2023, the Company granted its directors and employees an aggregate of 11,852 RSUs under the Company’s 2018 Incentive Compensation Plan. The RSUs have vesting periods 1 year from the grant date.

The fair value of each RSU on the grant date was $82.9. 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:

Risk-free interest rates	4.70%
Expected life (in years)	1
Dividend yield	0.56%
Expected volatility (weighted average)	34.8%

There were no other significant grants that were made by the Company during the nine months ended September 30, 2024 and 2023.

NOTE 6 —INTEREST EXPENSE, NET

The components of interest expense are as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands) · (Dollars in thousands)
Interest related to sale of tax benefits	$5,119	$5,304	$14,358	$12,255
Interest expense	33,461	24,362	96,206	74,144
Less — amount capitalized	(3,758)	(4,612)	(11,058)	(13,321)
Total interest expense, net	$34,822	$25,054	$99,506	$73,078

NOTE 7 —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 does not 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):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Weighted average number of shares used in computation of basic earnings per share:	60,480	60,299	60,439	59,105
Additional shares from the assumed exercise of employee stock awards	290	271	287	389
Weighted average number of shares used in computation of diluted earnings per share	60,770	60,570	60,726	59,494

The number of stock-based awards that could potentially dilute future earnings per share and that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive was 29.5 thousand, and 85.4 thousand for the three months ended September 30, 2024 and 2023, respectively, and 42.3 thousand, and 21.4 thousand for the nine months ended September 30, 2024 and 2023, respectively.

As per ASU 2020-06, the if-converted method is required for calculating any potential dilutive effect from convertible instruments. For the three and nine months ended September 30, 2024, the average price of the Company's common stock did not exceed the per share conversion price of the Notes of $90.27, and other requirements for the Notes to be convertible were not met and as such, there was no dilutive effect from the Notes in respect with the aforementioned periods.

NOTE 8 —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.

Under the Electricity segment, the Company builds, owns and operates geothermal, solar PV and recovered energy-based power plants ("REG") in the United States and geothermal power plants in foreign countries, and sells the electricity generated by those power plants.

Under the Product segment, the Company designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and provide services relating to the engineering, procurement and construction ("EPC") of geothermal and recovered energy-based power plants.

Under the Energy Storage segment, the Company provides battery energy storage systems ("BESS") as a service as well as other related services.

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:

	Electricity	Product	Energy Storage	Consolidated
(Dollars in thousands)
Three Months Ended September 30, 2024:
Revenues from external customers:
United States (1)	$116,914	$3,202	$9,789	$129,905
Foreign (2)	47,724	34,155	—	81,879
Net revenue from external customers	164,638	37,357	9,789	211,784
Intersegment revenues (4)	—	26,273	—	—
Operating income (loss)	30,977	3,034	1,664	35,675
Segment assets at period end (3) (*)	5,001,907	189,824	398,610	5,590,341
* Including unconsolidated investments	126,767	—	—	126,767

Three Months Ended September 30, 2023:
Revenues from external customers:
United States (1)	$108,762	$2,099	$11,013	$121,874
Foreign (2)	48,450	37,732	—	86,182
Net revenue from external customers	157,212	39,831	11,013	208,056
Intersegment revenues (4)	—	6,747	—	—
Operating income (loss)	34,787	2,374	406	37,567
Segment assets at period end (3) (*)	4,481,600	190,157	339,055	5,010,812
* Including unconsolidated investments	128,218	—	—	128,218
Nine Months Ended September 30, 2024:
Revenues from external customers:
United States (1)	$380,424	$5,693	$26,778	$412,895
Foreign (2)	141,693	94,325	—	236,018
Net revenue from external customers	522,117	100,018	26,778	648,913
Intersegment revenues (4)	—	73,777	—	—
Operating income (loss)	119,072	4,902	(589)	123,385
Segment assets at period end (3) (*)	5,001,907	189,824	398,610	5,590,341
* Including unconsolidated investments	126,767	—	—	126,767
Nine Months Ended September 30, 2023:
Revenues from external customers:
United States (1)	$337,382	$5,793	$21,907	$365,082
Foreign (2)	145,464	77,538	—	223,002
Net revenue from external customers	482,846	83,331	21,907	588,084
Intersegment revenues (4)	—	27,437	—	—
Operating income (loss)	120,457	(1,429)	(4,071)	114,957
Segment assets at period end (3) (*)	4,481,600	190,157	339,055	5,010,812
* Including unconsolidated investments	128,218	—	—	128,218

(1)Electricity segment revenues in the United States are all accounted for under lease accounting except for $33.9 million, and $116.2 million in the three and nine months ended September 30, 2024, respectively, and $27.3 million, and $90.2 million in the three and nine months ended September 30, 2023, respectively, that are accounted for under ASC 606. Product and Energy Storage segment revenues in the United States are accounted for under ASC 606, Revenue from Contracts with Customers ("ASC 606"), except for Energy Storage revenues of $0.7 million, and $2.1 million for the three and nine months ended September 30, 2024, respectively, andnone for the three and nine months ended September 30, 2023, that are accounted for under lease accounting.

(2)Electricity segment revenues in foreign countries are all accounted for under lease accounting. Product segment revenues in foreign countries are all accounted for under ASC 606.

(3)Electricity segment assets include goodwill in the amount of $146.7 million, and $85.6 million as of September 30, 2024 and 2023, respectively. Energy Storage segment assets include goodwill in the amount of $4.6 million and $4.6 million as of September 30, 2024 and 2023, respectively. No goodwill is included in the Product segment assets as of September 30, 2024 and 2023.

(4)Intersegment revenues are fully eliminated in consolidation.

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Dollars in thousands) · (Dollars in thousands)
Revenues:
Total segment revenues	$211,784	$208,056	$648,913	$588,084
Intersegment revenues	26,273	6,747	73,777	27,437
Elimination of intersegment revenues	(26,273)	(6,747)	(73,777)	(27,437)
Total consolidated revenues	$211,784	$208,056	$648,913	$588,084
Operating income:
Operating income	$35,675	$37,567	$123,385	$114,957
Interest income	2,051	2,827	6,494	9,620
Interest expense, net	(34,822)	(25,054)	(99,506)	(73,078)
Derivatives and foreign currency transaction gains (losses)	2,046	(781)	132	(3,990)
Income attributable to sale of tax benefits	19,760	14,936	53,034	42,481
Other non-operating income, net	22	108	122	247
Total consolidated income before income taxes and equity in income of investees	$24,732	$29,603	$83,661	$90,237

NOTE 9 —COMMITMENTS AND CONTINGENCIES

On July 29, 2024, a former employee filed a class action in Imperial County, California against the Company alleging violations of the California Labor Code, to act in a representative capacity for other Ormat employees in California alleging violations of California wage and hour regulations. The complaint was amended on September 12, 2024 to add companion Private Attorneys General Act claims. The complaint seeks recovery of various damages as well as equitable relief. The Company has filed an answer denying the material allegations of the complaint, and has removed the matter from state to federal court. The parties have filed a joint motion to stay pending mediation. No amounts have been accrued for potential losses under this matter, as the Company cannot reasonably predict the outcome of the proceedings, which is inherently uncertain, or any potential losses

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, labor or employment actions or 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, will not be material to the Company’s consolidated financial statements as a whole.

Other matters

As previously disclosed, 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 Company provided information as requested by the SEC and the Department of Justice related to the claims. On October 22, 2024, the Company was notified by the staff of the SEC that the SEC has concluded its investigation as to the Company and does not intend to recommend an enforcement action against the Company. The notice was provided under the guidelines set out in the final paragraph of Securities Act Release No. 5310.

NOTE 10 —INCOME TAXES

The Company’s effective tax rate benefit for the three months ended September 30, 2024 and 2023 was 4.8% and 24.1%, respectively. The Company’s effective tax rate benefit for the nine months ended September 30, 2024 and 2023 was 5.4% and 2.4%, 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 IRA was signed into law in the United States. The Company believes that the construction and operation 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. PTCs can be generated from 2.75 cents per kWh, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 3.30 cents per kWh. ITCs can be earned on investments from 30.0%, once the Wages & Apprenticeship rules are met, and if bonus credit requirements are met the credit could rise up to 50.0%. Battery Energy Storage Systems are eligible for ITC for projects placed-in-service after December 31, 2022. In addition, the Company can now monetize PTCs and ITCs earned by transferring the credits to a third 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 of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 becoming effective January 1, 2024, and other aspects becoming effective January 1, 2025. Currently, the Company does not meet the revenue threshold requirements. The Company does anticipate being subject to Pillar 2 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 Note 1 to the condensed consolidated financial statements for tax investigation in Kenya.

NOTE 11 —SUBSEQUENT EVENTS

Cash Dividend

On November 6, 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 November 20, 2024, payable on December 4, 2024.

SEC Investigation

As further described under Note 9 to the condensed consolidated financial statements, and in respect with certain claims made in a report published by a short seller regarding the Company’s compliance with anti-corruption laws, on October 22, 2024, the Company was notified by the staff of the SEC that the SEC has concluded its investigation as to the Company and does not intend to recommend an enforcement action against the Company. The notice was provided under the guidelines set out in the final paragraph of Securities Act Release No. 5310.

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