Good morning and welcome to the Ormat Technologies, Inc. Third Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask question. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Brad Nelson of KCSA. Please go ahead.

Thank you. Hosting the call today are Isaac Angel, Chief Executive Officer; Doron Blachar, Chief Financial Officer; and Smadar Lavi, Vice President of 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 relating 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 operations 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 Technologies' annual report on Form 10-K filed with the SEC on February 28, 2014. 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 reasons for presenting such information is set forth in the press release that was issued last night, as well as in the slide deck posted on Ormat's Web-site. Because these measures are not calculated in accordance with U.S. GAAP, they should not be considered in isolation from our financial statements 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 Web-site at ormat.com, under the Investor Relations tab or by downloading Ormat's Investor Relations App at Apple's App Store or Google Play. With all that said, I would now like to turn the call over to Isaac. Isaac, the call is yours.

Good morning everyone and thank you for joining us today for the presentation of our third quarter 2014 results and outlook for the near future. I'd like to start the call with an overview of the quarter and then I will turn the call over to Doron to review our financial results and finish with the business updates before opening the call for Q&A. Starting with Slide 5, I'm extremely pleased with the third quarter results. Ormat's strong execution during third quarter enabled the Company to deliver exceptional results and underscore its reputation as a leader in the geothermal industry. Our focus on expanding and optimizing our power plants combined with the new capacity that came on line in 2013 drove increased generation and revenues and improved our margins and EBITDA. The ongoing enhancements to our power plants will enable us to continue these positive trends going forward. We also continue to explore different ways to unlock shareholders' value. On October 29, we announced that Ormat is considering a corporate reorganization, whereby Ormat Technologies would acquire the shares of its parent entity Ormat Industries. This transaction would eliminate Ormat Industries' majority stake in Ormat Technologies, significantly increase liquidity and simplify the corporate structure. A special committee of independent directors along with the legal and financial advisors is working diligently to assess the feasibility of such transaction. We will be sure to update you as appropriate. Moving to Slide 6, the continued success of our business contributed to strong operational results in the third quarter. Total generation for the third quarter of 2014 was over 1 million megawatt hours, which reflects a 5.3% increase from last year. The increase in generation is mainly due to commencement of commercial operations of Plant 3 in Olkaria, Kenya and Don Campbell, Nevada. The enhancements…

Thank you, Isaac, and good morning everyone. Let me provide an overview of our financial results for the third quarter of 2014. Starting on Slide 11, total revenue for the third quarter of 2014 were $140 million, a 7.3% increase over revenues of $130 million in the third quarter of 2013. In our Electricity Segment, as you can see on Slide 12, revenues grew 15.2% to $102 million in the third quarter of 2014, over $89 million in the third quarter of 2013. The increase was mainly due to new capacity coming online from Olkaria complex in Kenya and Don Campbell plant in Nevada. Based on our policy, we continued to manage our economic exposure to natural gas and oil prices in our Electricity Segment through hedging activity. As a result of our hedging activity, we recorded in the Electricity revenue a net gain on derivative contracts on oil and natural gas prices of $4 million in the third quarter of 2014, compared to a net loss of $0.3 million in the corresponding period in 2013. In the Product Segment on Slide 13, revenues for the third quarter 2014 were $37.7 million. The decrease this quarter was mainly due to the timing of revenue [inaudible]. That said, with the addition of the Sarulla Project, we expect revenues to grow again in the fourth quarter. Moving to slides 14 and 15, the Company's combined gross margin increased from 30.4% to 39.6% in the third quarter of 2014. In the Electricity Segment, gross margin for the third quarter of 2014 increased to $40.8 million or 39.8%, from $27.6 million or 31.1% in the third quarter of 2013. The increase was mainly from new power plants that came online with higher efficiency and higher average rate for the power flow. Gross margin in…

Thank you very much, Doron. Turning to Slide 24, we outline our revenue outlook for 2014. For the full year of 2014, we are raising the low end of our guidance and narrowing the range. We now expect total revenues to be between $550 million and $560 billion, with Electricity revenues ranging from $375 million to $380 million, and our Product Segment revenues to be between $175 million and $180 million. Moving to Slide 25, in addition to our internal plans, there are several domestic legislative developments that will further support renewable energy development. In California, Governor Brown signed into a law Assembly Bill 2363 on September 26, 2014. The law requires the CPUC to adopt a methodology by December 31, 2015 to determine the cost of integrating an eligible renewable energy resource when evaluating a renewable energy tender. Solar and wind energy are classified an intermittent renewables and require additional generation to be available as a backup. The costs of a backup generation are referred to as integration costs and are necessary element of integrating intermittent renewable resources into the grid. When taking into consideration the higher integration costs of intermittent renewables like wind and solar, geothermal is in many cases more attractive. This new law is expected to increase the competitiveness of geothermal power in California IOU's procurement process. In Hawaii, the Hawaii Electric Light Company submitted a long-term energy plan to the HPUC that includes a target goal of generating 92% of its electricity from renewables by the year 2030. About 40% of Hawaii's electricity was generated by renewable resources in 2013, with more than half of that coming from our Puna complex. Geothermal can certainly play a significant role in meeting HELCO's vision to deliver cost-effective, clean, reliable energy to its customers. The regulatory environment continues to be supportive for geothermal initiatives which will benefit Ormat's prospects going forward. We continue to implement new initiatives that will enhance efficiency and position the Company for accelerated growth. During the quarter, we made a number of organizational structure changes to streamline the decision-making process and reduce overhead. We are moving toward more structured management team that is focused on driving efficiencies, optimizing EBITDA, and expanding the Company's global footprint over the near-term, while we continue to reassess and develop the Company's medium and long-term strategy. With that said, I would like to thank you for your support, and at this time the call is open for questions. Operator?

(Operator Instructions) Our first question comes from Dan Mannes from Avondale Partners.

So first question is on your recent commentary about potential corporate restructuring. Just wanted to understand first of all, have you guys already ironed out any concerns about tax treatment? And secondly, have you – and I know it's up to the special committee, but is there any reason to believe that the consideration from Ormat Technologies to Ormat Industries would be materially different than the value of the underlying shares, i.e., is there anything at Ormat Industries that would be purchased other than kind of the ownership stake?

To answer your last question, it's going to be the holding company which has only few assets such as the 60% of the Ormat Technologies and few land positions where the factory is located. On your first question, the whole thing is basically managed by the special committee of the Board with the management not being involved in the negotiations on the numbers, and frankly speaking I don't even know the ratio as we speak now.

And in terms of the tax considerations, have those already been worked out or is that still up in the air?

This is part of the general discussions between the special committees and trying to get all the relevant approvals needed for this transaction, potential transaction.

Okay, that's fair. Second, I wanted to ask real quick about the recent order for REG units in Utah. This is a nice sized win. First, can you comment on how many megawatts this relates to, and secondly, can you discuss other opportunities for new REG units particularly given a lot of new natural gas pipelines are at least proposed for construction in the U.S. over the next couple of years?

The megawatt numbers is a number, it's a 9 megawatt power plant, and we are very encouraged on the new upcoming pipelines and we are building actually more today than a few months ago on this particular product.

So you are ramping up for potential demand, or you already manufactured more product?

We are not manufacturing yet more product but our REG units are doing better, and on the other hand, we know that there is an upcoming demand, there will be an upcoming demand on the new pipeline.

Great. Two more quick ones and then I'll leave off for someone else.

You can take your time.

I know but there may be other callers. On Puna, you mentioned the well decline due to the weather event. Can you remind us when that occurred, first of all? And then secondly, can you also give us an update on hedging activity at Puna for '15?

Okay. As you'll probably remember, few months ago the hurricane hit the Big Island in Hawaii. During the disaster over there, we had to shut down the – emergency shut down the power plant for a few days. During the shutdown, one of our wells – after the shutdown, one of our wells didn't revive, and since then we are trying to revive the well. We have plans that this will be done at most by the second half of 2015. And the other thing that we made sure that this thing will not happen if the plant will be hit the second time by the hurricane and we will shut it down, we changed the mode of our operation in Hawaii to make sure that we will not have to shut down the wells. On the hedging question, Doron?

Regarding the hedging, as of today on the oil pricing we are hedged till the end of this year. We don't have currently any forward contracts or any other hedge positions on oil prices for next year.

Thank you. The question was on Mammoth. I think you mentioned you're planning a refurbishment of the entire plant. I was wondering if you could give us a little more color, because I believe you already refurbished the first unit, and then secondly, if this refurbishment has any implications on the CD4 expansion, which I'm pretty sure is on hold.

Dan, the first plant as you know is already refurbished and operating. We plan to refurbish Plant 3 and we are in middle of a reassessment. We might very well refurbish first Plant 2 before we do Plant 3, and that's the delay. And I believe by the end of this year, we will decide either to go ahead with G3 or start G2. Most probably we will refurbish G2 before G3.

Great. And then just finally, you mentioned streamlining decisions, efficiency, maybe can you give us any concrete examples of things you are doing internally to improve things and/or give us any guidepost on what this could mean financially, whether from a cost savings perspective or anything like that, or just any more help there in terms of your vision on how things are going to change in the near intermediate term would be helpful?

Dan, what we are doing is that we are assessing each and every asset that we have by means of power plants and trying to understand what's the actual generation and income and what is the potential generation and income and trying to mitigate the gap between the two by means of efficiency, operation, enhancements and also adding sometimes other means of green energy to mitigate the gap.

Okay. Great. Thank you very much. Appreciate all the color.

Our next question comes from JinMing Liu with Ardour Capital.

I just have one question. You mentioned the legislation in California which could be very positive for geothermal, but my understanding is, most of your current capacity is under long-term fixed-price PPA. So can you educate us what kind of potential financial benefit you may have from this legislation in California?

We were referring mainly for the future plants and not necessarily on our existing assets. You realize that on our future RFPs, there is a high value on the fact that California actually signed – the Governor signed on the bill.

Okay, so basically in the future, when you renew your PPA or expand your capacity, you will have much better price than your current $80-ish per megawatt hour going rate?

Yes, you are right, Jin.

Okay, got that. Okay, thanks.

(Operator Instructions) There are no further questions.

Thank you very much.

The Q&A session has now concluded. This conference has completed. Thank you for attending today's presentation. You may now disconnect.