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Ormat Technologies is a leading geothermal company which owns and operates geothermal and recovered energy-based power plants in various countries. The Company designs, develops, builds, sells, owns, and operates clean geothermal and recovered energy-based power plants.

The Company operates in two business segments: the Electricity segment and the Product segment. In the Electricity segment Ormat develops and operates geothermal and recovered energy-based power plants, sells the electricity generated and provides energy storage. In the Product segment the Company designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation. In March 2017 Ormat expanded the Electricity segment with the energy storage and acquired assets of Viridity Energy, Inc. in Philadelphia, to develop the energy storage and energy management services.

Ormat´s consolidated power plants generated 5,489,234 MWh during 2017 and 5,396,959 MWh during 2016, which means an increase of 1.7% over the previous year.

According to the 2017 Company´s Annual Report, total revenue of the Company increased by 4.6% from $662.6 million to a record of $692.8 million during the year. This result was driven by a growth in revenue of 7.3% from $463.6 million to $468.3 million in the Electricity segment. Product segment revenues were $224.5 million at the end of 2017, compared to $226.3 million at the end of 2016, and decreased slightly by 0.8%.

Adjusted EBITDA for the year 2017 was $343.8 million, compared to $323.8 million for the year 2016 and $291.3 million for the year 2015.

Cash and Cash Equivalents of the Company decreased to $47.8 million from $230.2 million during the year. This decrease results principally from the use of $259.2 million to fund capital expenditures and $35.3 million paid for the acquisition of the Viridity business and others.

Operating income for the year 2017 amounted for $205.0 million, compared to $201.9 million in 2016, representing a 1.6% increase during the year. The increase in operating income was a result of the increase in revenues, higher efficiency in some of the operating power plants, and a decrease in general and administrative expenses.

By segments, the Electricity segment revenues of $468.3 million (68% of the total revenues) exceeded the Product segment revenues of $224.5 (32% of the total revenue) by approximately $243.8 million for the year 2017, and the difference in segmental revenues amounted to $210.0 million for the year 2016.

Operating income attributable to the Electricity segment for the year 2017 was $154.5 million (75% of the total operating income), compared to $126.8 million (63% of the total operating income) for the year 2016 and operating income attributable to the Product segment for the year 2017 was $50.5 million (25% of the total operating income), compared to $75.1 million (37% of the total operating income) for the year 2016.

Geographically, revenues for the domestic Electricity segment were 75% and 96%, which is higher than the foreign Electricity segment revenues for the years 2017 and 2016, respectively. However, domestic operations in the Electricity segment have higher costs of revenues and expenses than the foreign operations as the foreign power plants are located in lower-cost regions such as Kenya, Guatemala, Honduras and Guadeloupe, which impact expenses favourably.

The foreign Product segment revenues were 99% and 92% of the total Product segment revenue for the years 2017 and 2016, respectively. The foreign Product segment activity also benefits from lower costs of revenues and expenses such as lower labour and transportation costs.

Revenues attributable to the Electricity segment for the year 2017, were $468.3 million, compared to $436.3 million for the year 2016, representing a 7.3% increase from the previous period. This increase was primarily attributable to the consolidation of the Bouillante power plant in Guadeloupe, the start of commercial operations at the Platanares power plant in Honduras, and the Tungsten Mountain power plant in Nevada.

Total cost of revenues for the year 2017 was $424.4 million, compared to $391.8 million for the year ending December 31, 2016, representing an 8.3% increase from the previous period. This increase was attributable to an increase in cost of revenues from both the Electricity and Product segments. As a percentage of total revenues, the total cost of revenues for the year 2017 increased to 61.3%, compared to 59.1% for the year 2016. This increase was mainly attributable to an increase in cost of revenues as a percentage of total revenues in the Product segment.

Total cost of revenues attributable to the Electricity segment for the year 2017 was $272.3 million, compared to $261.6 million for the year 2016, representing a 4.1% increase from the previous period. This increase was primarily attributable to additional cost of revenues from the consolidation of the Bouillante power plant in Guadeloupe and the start of commercial operation at the Platanares power plant in Honduras.  As a percentage of total Electricity segment revenues, the total cost of revenues attributable to the Electricity segment for the year 2017 was 58.1%, compared to 60.0% for 2016. This decrease was primarily attributable to higher efficiency in some of Ormat´s operating power plants.

Total cost of revenues attributable to the Product segment for the year 2017 was $152.1 million, compared to $130.2 million for the year 2016, representing a 16.8% increase from the prior period. This increase was primarily attributable to additional costs associated with Ormat´s project in Chile. As a percentage of total Product segment revenues, the total cost of revenues attributable to the Product segment for the year 2017 was 67.8%, compared to 57.5% for 2016.

Research and development expenses for the year 2017 were $3.2 million, compared to $2.8 million for the year 2016, representing a 14% increase from the prior period. Selling and Marketing Expenses for the year 2017 were $15.6 million, compared to $16.4 million for 2016, and constituted 2.3% of total revenues compared to 2.5% of such revenues for the year 2016. This decrease of 4.9% was primarily due to lower sales commissions related to the Product segment.