Good day. And welcome to the Ormat Technologies' Third Quarter 2016 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Rob Fink with Hayden IR. Please go ahead.

Thank you, Operator, and thank you everyone for joining us today. Hosting the call are Isaac Angel, Chief Executive Officer; and Doron Blachar, Chief Financial Officer; and Smadar Lavi, Vice President, Corporate Finance and Investor Relations. Before beginning, we would like to remind you that the information provided during this call may contain forward-looking statements related to current expectations, estimates, forecasts, and projections about future events that are forward looking as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the company’s plans, objectives, and expectations for future operation and are based on management’s current estimates and projections, future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, please see Risk Factors as described in Ormat’s Annual Report on Form 10-K filed with the SEC. In addition, during the call, we will present non-GAAP financial measures such as EBITDA and adjusted EBITDA. Reconciliations to the most directly comparable GAAP measures and management’s reason for presenting such information is set forth in the press release that was issued last night, as well as in the slides posted on our website. Because these measures are not calculated in accordance with U.S. GAAP, they should not be considered in isolation from the financial statement prepared in accordance with GAAP. Before I turn the call over to management, I would like to remind everyone that a slide presentation accompanying this call may be accessed on the company’s website, at ormat.com, under the Events & Presentations link that’s found on the Investor Relations' tab. With all that said, I would now like to turn the call over to Isaac Angel. Isaac, the call is yours.

Thank you very much Rob, and good morning, everyone. Thank you for joining us today for the presentation of our third quarter 2016 results and our outlook for the remainder of the year. Starting with slide four, we had another strong quarter with record revenue, double-digit growth, as well as increasing profitability, excluding non-recurring expense. Our focus on improving our operational and manufacturing efficiency along with new high energy rate contracts continues to be main driver for margin expansion and improved results. Following the strong financial results in the first nine months of 2016, management decided to increase revenue and adjusted EBITDA guidance for 2016. I am also pleased that during the quarter we concluded two significant objectives. We prepaid $250 million high-cost corporate bonds with 7% coupon that will due on August 2017 and successfully issued over $200 million bonds with an average interest rate of 2.2%, which enable us to significantly reduce our ongoing interest expenses. We also signed a settlement agreement with respect to the previously disclosed False Claims Act litigation to avoid the burden, inconvenience and expense of continued litigation with no admission of wrongdoing by Ormat. The total $16 million one-time expense that we incurred in the third quarter will result in significant savings in the future expenses. Additionally, we continue to execute our near-term and mid-term growth objectives. I will elaborate on the progress we made in -- on our plan for the future after Doron reviews the financial results. Doron?

Thank you, Isaac, and good morning, everyone. Let me start by providing an overview of our financial results for the three months ended September 30, 2016. Starting with slide six, for the third quarter of 2016, total revenue increased 13.4% to $184.6 million, compared to $162.9 million in the third quarter of 2015. Moving to slide seven, revenues in the Electricity segment increased 12.9% to $109.8 million in third quarter of 2016, up from $97.2 million in the third quarter of last year. This increase was primarily attributable to the commencement of operation of the second phase of the Don Campbell power plant in Nevada in September 2015 and to the commencement of operation our Plant 4 at Olkaria III Complex in Kenya in January 2016. The increase was also a result of higher energy rates under the Heber 1 new fixed price PPA commencing on December 2015 and the consolidation of our Guatemala power plant Guadeloupe power plant effective July 05, 2016. In slide eight, revenues in the Product segment was $74.8 million, an increase of 14% compared to $65.6 million in the third quarter of 2015. The increase was primarily due to an increase of approximately $7 million in revenue recognition from new projects in Turkey partially offset by other projects in Turkey, several of which were completed in the year end of December 31, 2016. The increase was also due to timing of revenue recognition in a different product. Moving to slide nine, gross margin in the third quarter of 2016 increased to 40.3% from 36.4% in the third quarter of 2015. Our Electricity segment gross margin increase to 39.4% largely due to high efficiency in our operating power plant, as well as the lower cost to operate, the two new power plants mentioned above. Our Product…

Thank you, Doron. Starting with slide 17 for an update on operations. We delivered double-digits topline and bottomline excluding non-recurring and non-operational items during the third quarter, clearly demonstrating that we are making solid progress again on multi-year strategic plan. Generation increased by 10.8% from 1.1 megawatt hours in the third quarter of 2015 to 1.3 million megawatt hours in the third quarter of 2016. Mainly to the commencement of the commercial operation of the second phase of Don Campbell power plant in Nevada and our Plant 4 at Olkaria III Complex in Kenya as discussed previously. In addition, generation was impacted by the consolidation of the Bouillante power plants in Guadeloupe, which we acquired on July 5, 2016 for approximately $20.6 million. Inorganic growth remains a key part of our strategic plan, as Doron mentioned, the acquisition and consolidation of Bouillante contributed to the revenue increase in the third quarter and with few operational adjustments we were able to immediately increase the output of this power plant from 10 megawatts to 13 megawatts. Our M&A team continues to look for similar opportunities in the geothermal industry, as well as in the storage market. Turning to slide 18 for an update on projects under construction. We plan to add 150 megawatts to 180 megawatts by the end of 2018, by bring new power plants online and expanding existing plants. The expansion plan includes the Platanares geothermal project in Honduras, in which construction and drilling activities are ongoing and part of the equipment is already at site. We expect to reach commercial operation before the end of 2017. We also initiated construction of Tungsten Project in Nevada. We expect Tungsten to generate 24 megawatts when it comes online at the end of 2017. Drilling is ongoing and we expect site construction…

Thank you. [Operator Instructions] Our first question comes from Paul Coster of JPMorgan. Please go ahead.

Good morning. This is Mark Strouse on for Paul. Thanks for taking our questions. Sir, just a couple questions if we can. Can you just give us an update on the partnership with Alevo for storage? I think the last we heard we were targeting 10 megawatts of project in Texas, is there anything new there. And then, secondly, can you talk about any developments regarding the relationship with Mitsubishi? Thank you.

Okay. Good morning. First of all, the first, it’s a Rabbit Hill project. It’s a frequency regulation project in Texas. It is as you said, for 10 megawatts which will go up to 12 megawatts and the expected COD was last week of December 2016. And unfortunately it’s going to be postponed for a week, because of late delivery of batteries coming for our level and not expecting anything major at this stage. We will of course update if something will happen. So far it’s one of the projects that we are waiting keenly to deliver because it is our first initiative in storage area. The second question, the joint venture that we have is with Toshiba and not with Mitsubishi, thanks for that.

Sorry.

So, thanks giving, of course, but we only delivered few projects together with them during 2016. We are expecting additional projects in the upcoming years -- our management is very happy with the joint venture and this thing will take time until they flourish and as usual I am very optimistic about it.

Thank you.

Thank you.

Our next question comes from Dan Mannes of Avondale. Please go ahead.

Thanks. Good morning, everyone.

Both.

Hi Dan. Good morning.

Well, good morning, from me. So, if you can give me a little bit more color on the product side, can you walk through maybe some of the contracts awarded during the quarter plus after the quarter from a structure standpoint and maybe a geography standpoint? And also is China included in that number, is that incremental?

On the $204 million China is included.

Okay.

Because it is a signed contract, all $204 million contracts are from New Zealand, Turkey, China, and of course, Sarulla, Chile, so there are quite many countries in the $204 million.

Okay.

Then we have which is an abnormal situation for us. We have almost about $100 million of contracts which -- those contracts are not yet signed, but they have MoUs and down payments, and furthermore, delivery dates are set and we started to work on them even those contracts not signed. According to our revenue -- according to backlog revenue policy, they are not into $204 million. But it’s the first time in our -- in my history in the last two and half years that we had so much unsigned contracts at the end of the quarter. So we -- those obligated to put them in a different basket and report them on this call. Obviously, beyond those $100 million that I -- that I am mentioning, we have the normal course of business. We have more contracts in various different stages of negotiation. Those $100 million are mainly from U.S. and Turkey.

Got it. And further $100 million is this primarily EPC or is it equipment-only or a mix? Turkey is usually equipment-only but…

Yes. You are right.

Okay. Got it.

But in this particular case, as I mentioned in my previous answer, we also had some combined solutions with Toshiba, so it’s the business then regular.

Got it. That’s very helpful. A couple other quick questions on the product -- on the power side, in terms of development, any update on Menengai. I know last quarter, I think, you pulled it kind of out of your short-term expectations, but we are still hearing I guess GDC expect it to come on. So I don’t know if there is any discussion there?

As far as I know, and nothing that I am saying is 100% confirms, we never got steam report with confirm that there is 110 megawatts of steam in Menengai. So far without this report being submitted it is impossible for three providers to provide each 35 megawatts of a power plant. So unless this will happen and we will be sure that there enough steam we will not continue without investment. But we are doing everything in our power to remain in the game, and obviously, we are playing along under rules of the -- of our contracts and time will tell. That’s where it stands today.

Fair enough. On the incremental development, you noticed -- you noted that you picked up new leases through BLM. Can you maybe remind us how long it’s been since you’ve participated in a lease and can you remind us maybe what’s a realistic timeline for you to be able to analyze those explore and then see if there are any real projects that come out of them?

Okay. I’ll divide my answer in two parts. We all understand that in order to build the project, obviously, we need a lease but also we need a PPA. So the first thing will be to look for PPA’s and I am optimistic that contrary to last year, this year I can see that there might be some PPA opportunities in the U.S., both in California and in other places. That’s why we are increasing the availability of greenfield that we have. If we will have and then we will start exploring those greenfield, usually you know and I know that it takes more than two years to develop a greenfield from A to B. But, again, we know that out of the thesis that we have we can build a certain megawatts. The main issue still is to find those PPAs.

Understood. And then, my final question, it looks like your CapEx for the year or the CapEx for the year, it looks like it trend down a little bit from what you said last quarter. Is this just may be things differing a little bit into 2017 or any projects kind of changing schedules beyond what you have previously mentioned.

It’s mainly timing issues and delaying of few projects. There is nothing that we were planning to do when we decided not to participate.

Got it. Sorry, if you indulge me one last one, it look like there was a -- it look like you guys wrote-off an exploration expense this quarter. I know that just -- that’s part of exploring. You are occasionally going to write them off. But could you mention what project that relates to or projects?

It’s Twilight.

Okay.

I don’t -- I am not sure that you are even familiar with the project. But it’s -- we have as you know that we still have lots of leases way back from years. We have an initiative recently to go and check and simply wipe out anything that doesn’t make sense to us in the future.

That makes a lot of sense. Thanks.

Thank you very much.

Our next question comes from Noah Kaye of Oppenheimer. Please go ahead.

Thank you for taking my questions and good to be here with you for the first time. So I would like to if I could start with the operational improvements. You mentioned increasing effective capacity at Bouillante by 35% that you acquired at. I guess, just generally across the portfolio we’re continuing to see that operating leverage here on the power portfolio side. So can you maybe highlight a few key areas where you are seeing the benefit of the productivity focus now and then maybe some areas that you think have real room for improvement from here.

Okay. First thank you very much for your initiation of coverage, it’s pretty much appreciated. And again, we are expecting almost, we have started an initiative of enhancing our existing assets about two years ago, which is the process that’s going on for the last two years and we -- and significant number of power plants already went through these enhancement process, which affected our bottomline in the last two years. And we expect the same thing also happening in Bouillante for this purpose. In the last quart we were enable -- we were able to increase manufacturing by 3 megawatts from 10 megawatts to 13 megawatts. We have an intention to go and enhance this power plant also during 2017 and ’18. As a matter of fact we also have in the contrast future earnings and so on based on those enhancements. And we will continue to do the same thing also in our existing assets that will -- that didn’t went through enhancement process yet. So, overall, you can expect some kind of synergies coming out of those enhancements for the next few quarters.

Okay. Thank you. And then just sort of modeling purposes, as we look at ‘17 and think about the quarterly cadence also the projects coming online, Bouillante, Platanares and Tungsten. When you think we should see a full quarter of revenue on those projects?

Bouillante will be an ongoing enhancement during 2017 and ’18. There is a possibility even to reach, I think, the highest number we can reach using the greenfield over there as we discussed in our previous call was about 48 megawatts, 45 megawatts. And we are expecting Platanares and Tungsten to operate before the end of 2017.

Before the end of…

Second half of…

Second half, okay, okay. That’s very helpful. And then, just a last one, I guess, on the DOE RFI you mentioned, they published a pretty manageable bogey in terms of a target LCOV, you mentioned that the -- in your comments that the RFP would likely be at the end of ’17. Can you just help us understand what’s giving you visibility into that, timetable and how competitive you expect the bidding to be and where you see potentially your advantages as an incumbent operating in those areas?

It will be -- it will not be something serious from me to say today, what will be price of that in 2018 to an RFP coming out at the end of 2017. And but, we know and you know that the prices are affected from many things, mainly from slower development and it’s very difficult to anticipate what are going to be the prices. Obviously, as one of the leading providers in California and Nevada, we are going be serious player on that and we will participate in the best and we have assets -- operating assets, as well as greenfield assets that we can bid, you realize that the mix of operating and greenfield assets will enable us to compete on a different pricing.

[Operator Instructions] It seems we have no other questions at this time. So I would like to turn the conference back over to Isaac Angel for any closing remarks.

Good morning again and thank you very much for participating in this call and as usual I am very optimistic and we’ll meet you all in February. Thank you very much.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.