COC IDA research note 07-28-10.pdf

Please refer to pages 2-3 of this report for detailed disclosure and certification information.
* D. A. Davidson & Co. makes a market in this security.
RESEARCH NOTE
Institutional Equity Research

IDACORP, INC.
July 29, 2010 IDA * – NYSE

Rating: Buy
Price: (7/28/10) $36.25
Price Targets: 12-18 month: $39.50
5-year: $44.00

Industry:
Utilities

James L. Bellessa, Jr., CFA
406.791.7230
[e-mail]

Michael Bates
Research Associate
406.791.7216
[e-mail]

2Q’10 Preview: EPS Likely Held Back by Cool and Wet Spring.

• IDACORP, Inc. is scheduled to report 2Q’10 earnings on Thursday, August 5th,
before the market opens. A conference call with management will be held on the
same day at 4:30 PM ET/1:30 PM PT.
• We are looking for EPS of $0.53, down from $0.58 a year ago. The consensus
estimate of six analysts is $0.58 per share. Our full-year estimate for 2010
earnings is $2.70 per share, versus the $2.71 consensus of six analysts and
$2.64 last year.
• Utility results likely hurt by weather. We expect 2Q’10 utility segment EPS of
$0.52, down from $0.56 a year ago, with the decline driven primarily by cool and
wet conditions in May and June and low prices for off-system sales. We believe
these negative pressures were at least partially mitigated by a number of
ratemaking items, including the sharing between customers and shareholders of
any reduction in the Power Cost Adjustment and an adjustment in the fixed cost
adjustment mechanism (the benefits of these two programs began on June 1st).
• What we expect during the call. Now that two tax treatment studies have come
to an end (see our Research Bulletin of July 8, 2010), we believe management
will provide more clarity on its tax picture and resume providing guidance on the
tax rate of the utility and the parent company. Perhaps management will also be
able to provide guidance on how much of the 1Q’10 EPS benefit of $0.16 may be
reversed in 2H’10. That tax benefit resulted from the amortization of accumulated
deferred investment tax credits (ADITC). Due to a settlement agreement, the
utility has been authorized to amortize up to $45 million of ADITC in 2010 and
2011 in order to maintain a 9.5% ROE in its dominant Idaho jurisdiction, with the
utility recording an amortization of $4.5 million in 1Q’10.
• We are forecasting a $0.01 EPS contribution from nonregulated operations,
compared to a $0.02 per share benefit in the year ago quarter.
• We are maintaining our 12-18 month target price of $39.50, which equates to
~14.1x the average of our 2010 and 2011 EPS estimates of $2.70 and $2.90,
respectively. At the current share price, we are maintaining our BUY rating.

D.A. Davidson & Co.
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Copyright D.A. Davidson & Co., 2010. All rights reserved.
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Required Disclosures
D.A. Davidson & Co. expects to receive, or intends to seek, compensation for investment banking services from this company in the
next three months.
D.A. Davidson & Co. is a full service investment firm that provides both brokerage and investment banking services. James L.
Bellessa, Jr., CFA and Michael Bates, the research analysts principally responsible for the preparation of this report, will receive
compensation that is based upon (among other factors) D.A. Davidson & Co.’s investment banking revenue. However, D.A. Davidson
& Co.’s analysts are not directly compensated for involvement in specific investment banking transactions.
We, James L. Bellessa, Jr., CFA and Michael Bates, attest that (i) all the views expressed in this research report accurately reflect our
personal views about the common stock of the subject company, and (ii) no part of our compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed in this report.

Ratings Information

D.A. Davidson & Co. Ratings Buy Neutral Underperform
Risk adjusted return potential azbycx Over 15% total return
expected on a risk adjusted
basis over next 12-18 months
>0-15% return potential
on a risk adjusted basis
over next 12-18 months
Likely to remain flat or lose
value on a risk adjusted basis
over next 12-18 months
Distribution of Ratings (as of 6/30/10) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 59% 36% 5%
Corresponding Individual Investor Group Ratings Outperform Market Perform Underperform
and Distribution 88% 8% 4%
Distribution of Combined Ratings 62% 33% 5%
Distribution of companies from whom D.A. Davidson & Co. has received compensation for investment banking services in last 12 mos.
Institutional Coverage 8% 6% 18%
Individual Investor Group Coverage 0% 0% 0%
Distribution of Combined Investment Banking 7% 6% 17%

D.A. Davidson & Co.’s Institutional Research Rating Scale (maintained since 7/9/02): Buy, Neutral, Underperform
D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400 • Lake Oswego, Oregon 97035 • [phone] • [phone] • www.dadavidson.com
Copyright D.A. Davidson & Co., 2010. All rights reserved.
3
Target prices are our Institutional Research Department’s evaluation of price potential over the next 12-18 months and 5 years, based
upon our assessment of future earnings and cash flow, comparable company valuations, growth prospects and other financial criteria.
Certain risks may impede achievement of these price targets including, but not limited to, broader market and macroeconomic
fluctuations and unforeseen changes in the subject company’s fundamentals or business trends.

Other Disclosures

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