Tuscarora, Geothermal Power Plant, Nevada
F64OTec
Q1 2012
070412
Disclaimer
Statements in this presentation as well as oral statements made by the officers or directors of Ormat
Technologies, Inc., its advisors, affiliates or subsidiaries often will contain “forward-looking statements.”
Whenever you read or hear a statement that is not simply a statement of historical fact (such as when we
describe what we “believe”, “expect” or “anticipate” will occur, and other similar statements), you must
remember that our expectations may not be correct, even though we believe they are reasonable. You
should read and listen to these statements completely and with the understanding that actual future results
may be materially different from what we expect, as a result of certain risks and uncertainties. For a
complete discussion of the risks and uncertainties relating to the forward-looking statements in this
presentation, please see “Risk Factors” as described in the Annual Report on Form 10-K report filed with
the Securities and Exchange Commission on February 29, 2012.
We will not update these forward-looking statements, even though our situation will change in the future.
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1
Introduction to Ormat
Market leader in geothermal and recovered energy generation
 Over four decades of experience
 Established renewable pure-play
 Owns 586 MW of installed capacity in 18
complexes and power plants
NYSE
ORA
Share Price:
$21.5
52wk Range:
$14.10 - $23.32
Avg Vol (3m):
166,815 shares
Market Cap:
$966 M
 Fully contracted, base load generation with strong
free cash flow
 Vertically integrated
 Global operation with a strong presence in the U.S.
Share data as of June 15 2012
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2
Global Geothermal Potential (MW)
Worldwide installed capacity - approx. 10,700 MW
680
400
12,560
5,580
2,327
2,935
47,450
37,680
772
670
32,100
4,187
Areas with Potential Geothermal Resources
Forecast of Incremental Capacity till 2015 (Approx. 7,800 MW to 18,500 MW)
Hydrothermal Geothermal Resources Potential (139,555 MW)
Source: Hydrothermal Geothermal Resources Potential, EMERGING ENERGY RESEARCH, LLC. Global “Geothermal Markets and Strategies: 2009–2020”, May 2009
"Geothermal Power Generation in the World 2005–2010 Update Report" Ruggero Bertani Enel Green Power, via Dalmazia 15 – 00198 Roma (Italy) April 2010.
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3
Supportive Legislation
Supports Demand
RPS- State Requirements for
Renewable Energy as a % of Total
U.S.- Renewable Portfolio Standard
 Adopted by 37 U.S. States and DC as a mandatory law or as
a goal
40%
33%
Supports Economics
 PTC or 30% ITC or ITC cash grant (available through 2013)
20%
 10% ITC
 Accelerated depreciation
25%
25%
21%
21%
15%
Source: www.pewclimate.org ,www.cpuc.ca.gov , www.dsireusa.org , www.ferc.gov
Nevada
Hawaii
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California
4
Business Overview
Power Generation
70% of Revenue1
Operation: 586 MW2
.1 Last twelve months average
2
As of June 2012
3
As of May 8 2012
3
Including Solar PV in Israel
Products
Portfolio Growth
30% of Revenue1
Backlog of $207 million3
Construction: 114-119 MW2
Development: 189 MW4
Exploration: 40 prospects3
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5
Products - Successful Track Record
Revenue
$165-$175
$159
$113
$93
$81
$80
$100 million Average
Geothermal Power plants
Recovered Energy Generation (REG)
2007
Remote Power Units
2008
2009
2010
2011
2012
Expected
 Supplied over 1,500 MW to 24 countries
 Approximately $207 million backlog
 Technology leader in medium and low enthalpy
resources; 92% market share
 Continue to strengthen the backlog
 Over 25 years of experience in developing
unique engineering solutions for a wide range
of geothermal resource conditions
•
Awarded $61.2 million EPC contract for a
geothermal project in the U.S.
Market share is based on EER Global Geothermal Markets and Strategies report (2009); Revenues in million of US$; Backlog is as of May 8, 2012
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6
Power Generation - Diversified Portfolio
Own and operate 586 MW of generating capacity
through 18 complexes and power plants worldwide
Geographically Balanced Portfolio
Domestic operation 470 MW


United States 470 MW
417 MW Geothermal
Central America 64 MW
•
Base load generation
•
Average availability of approximately 90%
•
2nd largest owner of geothermal assets in the U.S.
53 MW REG
Africa 52 MW
Portfolio Production (GWh)
ROW operation - 116 MW
•
Operation in Guatemala, Nicaragua and Kenya
•
Maintain political risk insurance
2,500
2007
2,930
2008
3,300
2009
3,760
3,918
2010
2011
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7
Power Generation - Operating Portfolio
MW Breakdown
Revenue Breakdown
2012E
15%
27.5%
24%
12%
2011
6.5%
63%
13%
66%
73%
No exposure to commodities
Exposure to oil
Exposure to natural gas
Fixed
Puna
SO#4 Contracts
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8
Well Positioned for Continued Growth
 Approximately 300 MW under construction & development
 Strong land position
 Strong balance sheet
Net Capacity Growth (MW)
 Established player
• An experienced management team
650
586
64
2012
2013
553* 556
• A strong technical team
 Responsible growth strategy
386
302
505
515
2008
2009
400
323
242
Existing ownership capacity
Under construction & development
2003
2004
2005
2006
2007
2010
2011
*2010 includes 50 MW of North Brawley in California and 15 MW of Jersey Valley in Nevada, which are currently below design capacity. In 2011 we reduced their capacity to 33 MW and 12 MW, respectively to
reflect their short term generating capacity; 30 MW of McGinness Hills from June 2012
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9
Geothermal Green Field Development Process
Exploration
Project Development
Engineering and
Procurement
Manufacturing
Field Construction
Operation
Multi-Discipline Expertise
3 years
2 years
• Location of site
• PPA
• Testing and start up
• Lease agreement
• Plant design
• Acceptance test
• Permitting
• Completion field development and equipment
manufacturing
• Commercial operation
• Exploration
• Initial field development & well testing
• Plant permits
• Gathering system and plant construction
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10
Projects under Construction
#
Projected Generating
Capacity (MW)
Projected
Completion
Power
Purchase
Agreement
May Qualify
for ITC Cash
Grant
36
Mid 2013

NA
10 (24,500 MWh per year)
2013


15-20
2013
-

California
3
TBD
-
-
Carson Lake
Nevada
20
TBD
-
-
CD4 (Mammoth Complex)
California
30
TBD
-
-
Project
Location
1
Olkaria III - Phase 3
Kenya
2
Heber Solar
California
3
Wild Rose
Nevada
4
Mammoth Complex
5
6
Total
114-119 MW
2 projects
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11
Projects under Development
Geothermal Development
Projected
Generating Capacity (MW)
Power Purchase
Agreement
Oregon
101
-
Wister - Phase I
California
30
Sarulla 2
Indonesia
42
#
Project
Location
1
Crump Geyser
2
3
Total
1
2


82 MW
Ormat has signed a 50:50 Joint Venture with Nevada Geothermal Power to develop a binary geothermal power plant, approx., 20 MW, at Crump Geyser in Oregon.
Ormat owns 12.75% interest in the Sarulla consortium that plan to develop the 330 MW net project to be constructed in three phases over five years.
Solar PV Projects (Israel)
Ownership
Total Projected Generating
Capacity (MW)
70%
38
Eight rooftop projects1
51%
13
3
Utility scale ground-mounted project 2
51%
84
4
Utility scale ground-mounted project
100%
30
5
Ormat's rooftop
100%
1
#
Project
1
Six ground-mounted projects
2
1
Total
1
166 MW (107 MW our share)
under three joint venture agreements with Summit Holdings Real Estate Ltd.
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12
Long Term Growth - Exploration Activity

Ormat's growth beyond 2013 will depend on the success in exploration efforts

Strong land position to support future growth: 40 prospects under exploration
• Various leases and concessions in 30 prospects located in the U.S., Guatemala and New Zealand
• Exploration concessions for five prospects in Chile
• Option agreements in the U.S.; currently active in five prospects
U.S., 32 prospects
Status Q1 2012 vs. YE 2011
ROW, 8 prospects
YE 2011
Q1 2012
24
OR, 8
ID, 1
17
16
NV, 15
CA, 2
UT, 2
Guatemala, 2
8
4
4
5
4
AK, 1
Lease
acquired
Exploration
studies
Expected to
Exploration
start exploratory drilling
drilling
Chile,5
HI, 3
NZ, 1
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13
Competitive Landscape
Development
Product Sale
High Enthalpy
Competitors
Worldwide competition
Low Enthalpy
Competitors
Mainly U.S. competition
Geothermal IPPs
Solar & Wind
IPPs
Competition on land
and PPAs
Competition on PPAs
Ormat’s Strengths

Proven Track Record
 Vertically Integrated
 Base Load Energy
 Financial Support from
Existing Portfolio
 No Grid
Interference
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14
Financial Highlights
 Financial Capabilities to Execute Growth Plans
 Solid Revenue Visibility
 Solid Liquidity Position
 Profitable Operations
 Growth
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15
Revenue
Annual
Quarterly
$480-$505
$437
$412
165175
$373
$344
113
$296
159
81
93
80
$132
253
251
216
2007
2008
Electricity
2009
292
2010
Product
324
315330
$97
50
19
2011
2012
Expected
78
82
Q1 2011
Q1 2012
Record
Quarterly
Revenue
(in millions of USD)
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16
EBITDA
Annual
$167
$164*
Quarterly
$167
$122
CAGR 2008-2011 11%
$51
$27
2008
2009
2010
2011
Q1 2011
Q1 2012
* 2010 EBITDA includes a $36.9 million gain from the acquisition of the controlling interest of the Mammoth complex in California
For reconciliation of EBITDA and additional Cash Flows Information see Appendix
(in millions of USD)
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17
EPS
Annual
Quarterly
$1.51
$0.98
$0.82
$0.17
2008
2009
2010
2011*
Q1 2011
Q1 2012
($0.20)
($0.95)
*2011 Net income included $61.5 million non-cash-related valuation allowance; Net income excluding valuation allowance was $18.8 million
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18
Strong Balance Sheet
As of March 31, 2012 (in million of USD)
Total Cash (Incl. restricted cash of $75 million and marketable securities of $16 million)
$175
Property, plant and equipment, net and construction in process
1,919
Total assets
2,328
Total liabilities
1,412
Total equity
916
Sufficient Capital Resources to Execute Growth Plans
Net Debt
Debt to Capital (%)
$859
53%
Unused corporate lines of credit- $53 million
Significant excess cash flow - approximate $80 million in 2011
Expect over $100 million of ITC Cash Grant
Up to $310 million expected under commitment letter with OPIC
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19
Summary


Why Ormat?
•
Pure-play; vertically-integrated; strong track record
•
Financial stability with track record for profitability
•
Well positioned for continued growth
•
Multidisciplinary technological leadership
•
Upside from Solar PV development
•
Strong product segment revenue provides additional capital for
continued growth and compliments earnings from our electricity segment
Why Now?
•
Undervalued - share price discount the existing asset-base and does not
give any value to growth
•
Low correlation to the global economy slowdown
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20
Thank you
For further information:
www.ormat.com/ [email protected]
Jersey Valley
Geothermal
Power
Nevada
Tuscarora,
Geothermal
Power
Plant,Plant,
Nevada
21
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22
Back
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23
Reconciliation of EBITDA
and Additional Cash Flows Information
We calculate EBITDA as net income before interest, taxes, depreciation and amortization. EBITDA is not a measurement of
financial performance or liquidity under accounting principles generally accepted in the United States of America and should
not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net
earnings as indicators of our operating performance or any other measures of performance derived in accordance with
accounting principles generally accepted in the United States of America. EBITDA is presented because we believe it is
frequently used by securities analysts, investors and other interested parties in the evaluation of a company’s ability to
service and/or incur debt. However, other companies in our industry may calculate EBITDA differently than we do. The
following table reconciles net cash provided by operating activities to EBITDA for the three-month periods ended March 31,
2012 and 2011:
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24