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Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentatio Forward-Looking Statements This presentation, and information provided during any discussion accompanying this presentation, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements in
Slide 3: Non-GAAP Metrics
NON-GAAP METRICS Reconciliation to US GAAP Financial Information This presentation includes certain “non-GAAP financial measures’ within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended, including EBITDA and Adjusted EBITDA. The presentation of these non-GAAP financi
Slide 4: Second Quarter 2019 - Prepared Remarks
FIRST QUARTER 2019 - PREPARED REMARKS * Q2 2019 highlights: Isaac Angel, CEO ° Financial overview: Doron Blachar, CFO ° Operations & business updates: Isaac Angel, CEO "Q&A Copyright © 2019 Ormat Technologies ne
Slide 5: Q2 2019 Highlights
Q2 2019 HIGHLIGHTS ($ millions, except per share amounts) Q2 2019 Q@2 2018 % Change Revenues Electricity 129.1 122.2 5.6% Product 52.0 54.9 (8.3%) Other 3.0 12 145.3% Total Revenues 184.1 178.3 3.2% Gross profit 65.1 57.5 13.4% Gross margin (%) Electricity 42.8% 33.5% Product 20.6% 31.6% Other (29.5
Slide 6: Financial Results
FINANCIAL RESULTS DORON BLACHAR, CFO Copyright © 2019 Ormat Technologies, Inc.
Slide 7: Total Revenues
TOTAL REVENUES Total revenues Total cost of revenues +$5.8M (3.2%) -1.9M (-1.6%) $178.3 $184.1 $120.8 $118.9 Q2 2018 Q2 2019 Q2 2018 Q2 2019 Segment contribution 1.6% 28.3% Q2 2019 70.1% 0.7% 30.8% Q2 2018 68.5% mElectricity © Product = Other mat Technologies, ne
Slide 8: Electricity Segment
ELECTRICITY SEGMENT Revenues Cost of revenues +$6.9M (5.6%) -$7.5M (-9.2%) $129.1 $122.2 $81.2 $73.8 Q2 2018 Q2 2019 Q2 2018 Q2 2019 The increase in revenues was primarily attributable to: The decrease in cost of revenues was primarily attributable to * $7.0M - Increase in MGH Complex mainly due to
Slide 9: Product Segment
PRODUCT SEGMENT Revenues Cost of revenues -$2.9M (-5.3%) $3.7M (10.0%) $54.9 $52.0 41.3 $37.6 $ Q2 2018 Q2 2019 Q2 2018 Q2 2019 Copyright © 2019 Ormat Technologies ne
Slide 10: Other Segment
OTHER SEGMENT Revenues Cost of revenues +$1.8M (145.3%) +$1.8M (88.7%) $3.8 $3.0 $2.0 $1.2 Q2 2018 a2 2019 Q2 2018 Q2 2019 The Other segment includes revenues from the provision of energy storage demand response and energy management services mat Technologies, ne
Slide 11: Total Gross Profit and Margin
TOTAL GROSS PROFIT AND MARGIN Gross profit Gross margin +$7.7M (13.4%) $65.1 35.4% $57.5 32.2% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Copyright © 2019 Ormat Technologies ne
Slide 12: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Electricity gross margin Product gross margin Other gross margin 42.8% 41.7% 33.5% 31.6% [ 20.6% Q2 2018 Q22019 Q22019 Q2 2018 Q2 2019 8 canes W/O Puna (29.5)% (68.3)% Copyright © 2019 Ormat Technologies ne
Slide 13: Selling and Marketing & General and Administrative Expenses
SELLING AND MARKETING & GENERAL AND ADMINISTRATIVE EXPENSES Selling and marketing expenses General and administrative expenses -$0.4M (-11.7%) -$1.7M (-10.6%) $15.9 $14.2 Q2 2018 Q2 2019 Q2 2018 Q2 2019 * Constituted 1.8% of total revenues for Q2 2019, » The decrease was mainly attributable to costs
Slide 14: Operating Income
OPERATING INCOME Total operating income $10.2M (28.0%) $46.9 $36.6 Q2 2018 Q2 2019 The increase was primarily attributable to higher revenues and improved gross margin » increase in the Electricity segment revenue and gross profit, offset by a decrease in the Product segment revenue and gross profit
Slide 15: Operating Income (Loss) by Segment
OPERATING INCOME (LOSS) BY SEGMENT Electricity segment Product segment Other segment $16.0M (58.3%) -$5.5M (-50.7%) -$0.3M (-19.6%) $43.5 $27.5 $10.8 $5.3 ne ———— i Q22018 2.2019 Q22018 = @2.2019 Q22018 a2 2019 (suey iS) Copyright © 2019 Ormat Technologies ne
Slide 16: Interest Expense, Net
INTEREST EXPENSE, NET Interest expense, net +$5,7(35.8%) $21.5 $15.8 Q2 2018 Q2 2019 This increase was primarily attributable to interest expense related to: » The $50M senior unsecured loan from Migdal * The $96M loans inherited from the USG acquisition * The sale of tax benefits - $1.4M increase *
Slide 17: Income Tax (Provision)/Benefit
INCOME TAX (PROVISION)/BENEFIT $3.5 | 8 Q2 2019 ($29.1) * Q2 2019 income tax benefit included non-recurring tax benefit of $13.3 million from our tax strategy plan to refile tax returns net of change in accrued withholding taxes given our decision to no longer reinvestment its earnings in foreign lo
Slide 18: Net Income Attributable to the Company's Stockholders & EPS
NET INCOME ATTRIBUTABLE TO THE COMPANY'S STOCKHOLDERS & EPS Net Income attributable to the Diluted EPS2 Company's Stockholders ($M) $33.9 $20.6 $0.66 $16.6 | a a | 22018 @22019 22018 @2 2019 22018 @2 2019 22018 22019 ($0.3) Adjusted! $0.0 Adjusted! (1) Adjusted net income attributable to the company
Slide 19: Adjusted EBITDA ($M)
ADJUSTED EBITDA! ($M) Total adjusted EBITDA Electricity segment Product segment Other segment $14.1M (17.4%) +$17.1M (24.5%) -$3.7M (-30.3%) $0.7M (51.6%) $94.9 $90.8 i 9 $80.8 $69.8 92% a total adjusted EBITDA 86% of total OE EBITDA $12.3 $8.6 ($1.3) ($0.6) Q2 2018 Q2 2019 a2 2019 a 2018 2 2019 Q22
Slide 20: Cash and Cash Equivalents & Restricted Cash ($M)
CASH AND CASH EQUIVALENTS & RESTRICTED CASH ($M) 156.1 114.9 105.9 41.5 | 42.9 | na 78g, a 181.6 December —_Bouillante Storage DEG Proceeds Cash Capex Revolving Debt Dividend non-controlling Other dune 30, 31, 2018 loan loan loan from from lines of interest 2019 Migdal operating credit loan activity
Slide 21: Payment of Principal Due by Period ($M)
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 5.1% Q3-2019 Q4-2019 Year 2019 Long-term non-recourse debt & limited recourse debt 8.0 9.0 74 Senior Secured Notes (non-recourse) 85 n3 198 Long-term loans (full recourse) 0.0 47 47 Revolving bank credit 381 0.0 381 Total 54.6 25.0 79.6
Slide 22: Financing Activity
FINANCING ACTIVITY ° Successfully raised year-to-date $133M ° $42M unsecured notes with DEG for the Olkaria III recent enhancement « Fixed interest rate of 6.04% e Maturity - June 2028 « Additional $50M under the senior unsecured notes from Migdal (institutional investor) « Fixed interest rate of 4.
Slide 23: Operations & Business Updates
OPERATIONS & BUSINESS UPDATES ISAAC ANGEL, CEO
Slide 24: Generation - Increase Year over Year
GENERATION - INCREASE YEAR OVER YEAR 5.7% increase year over year * generation was positively affected by McGinness Hills phase 3, Olkaria III plant 1 expansion, and USG power plants; e Partially offset by a decrease in generation due to the outage related to Puna shut down Generation (GWh)® 15 14 Q
Slide 25: Operation Update on Puna Plant in Hawaii
OPERATION UPDATE ON PUNA PLANT IN HAWAII Working rapidly to resume operation of our Puna power plant following the Kilauea volcano erupted ° Building the electrical substation ¢ Construction in progress - expect completion in Q4 2019 ° Permits are delayed ° Drilling of new fresh water well - complet
Slide 26: Operation Update on Puna Plant in Hawaii
OPERATION UPDATE ON PUNA PLANT IN HAWAII ° Power plant refurbishment activities will be completed by the end of 2019 and the power plant will resume operations when e Local permitting and transmission network upgrades being undertaken by our local utility partner are completed - in early 2020 * When
Slide 27: Insurance Update on Puna Plant in Hawaii
INSURANCE UPDATE ON PUNA PLANT IN HAWAII ° Property Insurance e All insurers accepted our claim and started to pay the costs to rebuild the destroyed items including the substation ° Business Interruption * Still in discussions to reach an understanding with few of our insurers to start paying for t
Slide 28: Growth Plan
GROWTH PLAN ° Expect adding between 120 MW and 135 MW by the end of 2021 * Continue to look for M&A opportunities Projected U.S - Steamboat Hills Enhancement Tungsten 2 15 MW Wister Solar 20 MW Guadeloupe- Bouillante 10 MW Heber Complex T1MW CcD4 30 MW North Valley 30-40 MW Steamboat Solar SAC MW Ex
Slide 29: Product Segment
PRODUCT SEGMENT ° Backlog of $201M as of August 7, 2019 ° The backlog includes revenues for the period between July 1, 2019 and August 7, 2019 ° 99.4% Geothermal contracts e New contracts in Turkey - $26 million Geothermal contracts geographic breakdown Y 1% 1% 2% 26% - 45% BY = Turk 3% “New Zealand
Slide 30: Energy Storage
ENERGY STORAGE ° 40MW/40MWh operating assets e Plumsted and Stryker - connected to PJM ° 22MW/57.5MWh under construction and development © 1]OMW/12.5MWh Rabbit Hill project under construction - will be connected to ERCOT ° 2MW/5MWh Hinesburg project under commissioning in Vermont - will be connected
Slide 31: Expected Capital Needs for the Remainder of 2019
EXPECTED CAPITAL NEEDS FOR THE REMAINDER OF 2019 Construction & enhancements Maintenance CapEx (Excluding Puna) Storage activity Exploration Manufacturing facility Total CapEx Puna repairs and drillings Long- and short-term debt repayment $105 $25 $10 $10 $6 $156.0 $30-$50 $79.6 Copyright © 2019 Orm
Slide 32: 2019 Guidance
2019 GUIDANCE 2019 Revenue Guidance ($M) Electricity revenues 530-540 Products revenues 180 - 190 Other revenues 10-12 Total expected revenues 720-742 2019 Adjusted EBITDA ($M) Adjusted EBITDA 375-385 2019 guidance exeludes any impact from Puna operation or expected business interruption insurance p
Slide 33: Thank You!
THANK YOU! ©
Slide 34: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FOR THE THREE- AND SIX-MONTHS PERIODS ENDED JUNE 30, 2019 AND 2018 (UNAUDITED) We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amo
Slide 35: Reconciliation of Adjusted Net Income
RECONCILIATION OF ADJUSTED NET INCOME FOR THE THREE- AND SIX-MONTHS PERIODS ENDED JUNE 30, 2019 AND 2018 (UNAUDITED) Adjusted net income attributable to the Company's stockholders and Adjusted EPS are adjusted for one-time expense items that are not representative of our ongoing business and operati