2011 IDANOTE082511.pdf

Disclosures and Analyst Certifications can be found in Appendix A.
NEW YORK, NY MELVILLE, NY PRINCETON, NJ MIAMI, FL BOCA RATON, FL

520 Madison Avenue y New York, New York 10022 y Telephone: [phone] 800-LAD-THAL

Member: NYSE, NYSE Amex, FINRA, all other principal exchanges and SIPC

IIDDAACCOORRPP ((IIDDAA))
Company Update – Reiterating BUY due to Attractive Valuation and
Fundamentals
Highlights
• We are reiterating our BUY rating on IDA shares. Our price target of $42 per share
implies a 2012/2013 P/E of 13.9x/13.3x our EPS estimates of $3.02/$3.15. Our 2011
EPS estimate is $2.92.
• IDA shares currently trade at 11.8x our 2013 EPS estimate, a 10% discount relative to a
regulated utility peer group average of 13.1x (regulated peer group defined as electric utilities with majority of operations regulated by the state/federal). Despite a below-average dividend yield and pending rate case risks we believe the discount is unwarranted. We expect a dividend increase in mid-2012 and we expect a balanced/constructive rate case outcome (settlement possible). Therefore, we reiterate our BUY rating and believe risk/reward is favorable.
• We note the following: expectations for a dividend increase in mid-2012 (dividend payout
ratio only 41%), potential settlement in pending general rate case (history of settlements
in Idaho), pre-approved $397m Langley Gulch Power Plant supports near-term earnings
growth (COD mid-2012), “reliability-driven” Boardman-Hemmingway transmission line
supports longer-term earnings growth (COD 2016, $820m, IDA partial ownership
expected), solid liquidity and disciplined balance sheet management (no meaningful external equity needed to finance Langley Gulch), positive load growth, rate mechanisms help mitigate IDA’s cash/earnings volatility (PCA, LGAR, FCA), unicap tax study pending approval ($65m benefit, 59.7m currently reserved). Lastly, the recently concluded/pending tax studies enhance the company’s liquidity position, reverse the need to utilize tax credits (ADITC), help support higher equity ratios, mitigate external equity needs, and help offset recovery of cost pressures in the current general rate case.
• Our 2011 estimates exclude the impact uniform capitalization method change (“unicap”)
announced during 3Q10 that would provide a +$65m income tax benefit (currently $59.7m
reserved pending US Congress Joint Committee on Taxation approval likely in 2011, $5-
$6m ongoing benefits). For modeling purposes, our 2012/2013 EPS estimates assume traditional cost-of-service rate making, although, we acknowledge that an extension of the current rate structure is possible. See Financial Summary on page 2.
• Recall, on June 1, 2011, IDA filed for an $82.6m (+9.9%) increase in base rates (effective
January 1, 2012) and supported by $2.4b of 13-month average rate base (2011 test year),
ROE of 10.5%, and equity ratio of 51.2%. Average rate base excludes the $397m
Langley Gulch Power plant currently under construction to be added to rate base in mid-
2012. Key dates include: settlement conference begins (August 31, 2011), Staff and
Intervenor testimony (October 7, 2011).
• Recall, per the January 2010 IPUC order, IDA can earn a minimum ROE of 9.5% (up to
10.5% with 50/50 sharing above 10.5%) and can utilize a specified amount of ADITC per
year through 2011 to enhance its ROE based on year-end equity balance. New rates
were effective June 1, 2010. The new rate structure allows IDA the opportunity to utilize
Accumulated Deferred Investment Tax Credits (ADITC) to help achieve a minimum ROE
of 9.5% on year-end equity balance in Idaho jurisdiction and is limited to $25m each year
for 2010 and 2011, thereby, supporting earnings growth through 2011. IDA expects to
utilize $13.5m in ADITC (previously $15m) during 2011.
COMPANY & MARKET DATA
Price (August 24, 2011) $37.11
Price Target, Excl Dividends (YE11) $42.00
52 - Week Range $33.88-$40.71
Mkt. Capitalization (mill) $1,822
Enterprise Value (mill) $2,445
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 218
Book Value per Share (2Q11A) $33.24
Dividend (FY11E) / Yield $1.20 3.2%
FY2010A FY2011E FY2012E
Revenue (mill) $1,036 $1,121 $1,223
1Q EPS $0.34 $0.60A
2Q EPS $0.82 $0.42A
3Q EPS $1.39
4Q EPS $0.41
EPS $2.95 $2.92 $3.02
Prior EPS
Consensus EPS $2.92 $3.02
P/E 12.6x 12.7x 12.3x
EV/EBITDA 8.4x 8.5x 8.3x
P/FCF nm nm nm
ESTIMATES
Volum e in Millions
0.0
1.0
2.0
3.0
C los e
$20
$25
$30
$35
$40
$45
Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11

Chart data: Bloomberg
Brian J. Russo, CFA
646-432-6312 [e-mail]
Ira Reibeisen 212-409-2051
[e-mail]
Power and Utilities Sector
Company Update

August 25, 2011
BUY
Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 2 -

Table 1: IDA – Financial Summary
Year Ending 31 December 2008 2009 2010 2011E 2012E 2013E
FINANCIAL SUMMARYEPS 2.1 2.64 2.95 2.9 3.02 3.15
P/E ratio 17.11 14.08 12.56 12.71 12.30 11.78EBITDAPS 6.45 6.66 6.51 6.14 7.71 8.04
P/EBITDAPS 5.75 5.57 5.70 6.05 4.81 4.62
Free CFPS -2.36 0.69 -0.68 -1.45 -1.22 2.62P/Free CFPS -15.73 53.89 -54.61 -25.68 -30.36 14.18
DPS 1.20 1.20 1.20 1.20 1.32 1.45
Dividend yield 3.2% 3.2% 3.2% 3.2% 3.6% 3.9%BV PS 28.80 29.71 31.77 33.24 35.03 36.73
P/BV PS 1.29 1.25 1.17 1.12 1.06 1.01
Dilluted Shares Out 45,379 47,182 48,340 48,940 49,540 49,540
Enterprise value 2,858,638 3,107,667 3,053,507 3,253,196 3,376,814 3,319,070
EV/Sales 2.98 2.96 2.95 2.90 2.76 2.63EV/EBITDA 9.76 9.89 9.71 10.83 8.84 8.34
EV/EBIT 15.01 14.15 14.08 16.06 12.45 11.87
INCOME STATEMENT (USDm)Revenues 960,414 1,049,800 1,036,029 1,120,689 1,222,574 1,259,641
Gross margin 190,667 203,583 198,670 180,851 259,086 271,479Operating EBITDA 292,753 314,209 314,591 300,250 382,066 398,149
Depreciation & Amortization 102,086 110,626 115,921 119,399 122,981 126,670
EBIT 190,501 219,547 216,843 202,595 271,279 279,672Interest expense 73,056 72,810 75,114 67,978 79,653 79,653
Net income 98,414 124,350 142,798 142,886 149,468 156,015
Net income per share 2.17 2.64 2.95 2.92 3.02 3.15CASH FLOW (USDm)
Cash flow from operations 136,513 284,425 305,400 259,277 269,441 279,677
Cash flow from investing (202,824) (242,405) (328,334) (330,000) (330,000) (150,000)Capital expenditures 243,544 251,937 338,252 330,000 330,000 150,000
Cash flow from financing 67,173 2,139 198,624 (104,128) 59,207 (71,932)
Common dividends (54,239) (56,820) (57,872) (58,728) (65,393) (71,932)
Free cash flow (107,031) 32,488 (32,852) (70,723) (60,559) 129,677
BALANCE SHEET (USDm)Cash and marketable sec 8,828 52,987 228,677 53,826 52,474 110,219
Total assets 4,022,845 4,238,727 4,676,055 4,634,988 4,838,656 4,737,731
Total debt/lease 1,183,451 1,409,730 1,488,287 1,490,859 1,590,859 1,590,859
Total liabilities 2,715,974 2,905,637 3,140,071 3,020,071 3,120,071 3,120,071
Shareholders' equity 1,306,871 1,401,544 1,535,984 1,626,850 1,735,526 1,819,609
RATIO ANALYSIS
Sales growth (%) 9.2% 9.3% -1.3% 8.2% 9.1% 3.0%
Gross margin/sales (%) 19.9% 19.4% 19.2% 16.1% 21.2% 21.6%EBIT/Assets 4.7% 5.2% 4.6% 4.4% 5.6% 5.9%
CFO/Assets 3.4% 6.7% 6.5% 5.6% 5.6% 5.9%
ROA 2.4% 2.9% 3.1% 3.1% 3.1% 3.3%
ROE 7.5% 8.9% 9.3% 8.8% 8.6% 8.6%
Total debt/total capital 47.5% 50.1% 49.2% 47.8% 47.8% 46.6%
Total debt/EBITDA 4.0 4.5 4.7 5.0 4.2 4.0
EBITDA/interest expense 4.0 4.3 4.2 4.4 4.8 5.0
FFO/Debt 20.2% 20.5% 17.4% 16.9% 17.6%
RATE BASE AND SEGMENT ANALYSIS1
Implied Rate Base2 2,685,653.03$ 2,892,672.44$
Implied Regulatory Equity Ratio2 51.2% 51.2%
Implied Earned ROE2, 3 10.3% 10.3%Implied Utility EPS $2.85 $3.07
Financial, Ida-West, Holdco $0.03 $0.03AFUDC$0.12 $0.05
Consolidated IDA EPS4 $3.00 $3.15
12010 and 2011 earnings based on previous settlement that enables Idapower to earn an ROE of at last 9.5% on year-end shareholder equity
12012 rate structure pending outcome of mid-2011 general rate case filing22012/2013 ROE and Equity ratio calculation based on ID and OR jurisdictional weighted average using previous rate case settlements/agreements
3 2012 average rate based includes partial-year of $397m Langley Gluch with COD expected mid-year 2012.
4Rate base analysis and segment EPS for presentation only and may differ from actual EPS forecasts
Post 2011 earnings estimate exclude the uniform capitalization method agreement pending Joint Committee review ($60m 2011 impact, $5-6m annual ongoing impact)

Source: Ladenburg Thalmann & Co, Inc., Company Reports

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 3 -

APPENDIX A: IMPORTANT RESEARCH DISCLOSURES

ANALYST CERTIFICATION
I, Brian Russo, attest that the views expressed in this research report accurately reflect my personal views about the subject security
and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or
views expressed in this research report.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon
various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.
COMPANY BACKGROUND
Headquartered in Boise, Idaho, IDACORP, Inc., (IDA) is a holding company formed in 1998 that is primarily engaged in the
generation, transmission, distribution, sale and purchase of energy. IDA serves over 466,000 retail customers across its 24,000sq
mile service territory in both Idaho and Oregon, and owns approximately 3,267MW of generating capacity. IDA’s principal operating
subsidiary is Idaho Power Company (IPC). The company’s unregulated utilities include IDACORP Financial (IFS) that invests in
affordable housing and real estate and Ida-West Energy Company (Ida-West) that operates small hydroelectric generation projects.

VALUATION METHODOLOGY
We value equities utilizing a multi-faceted approach which includes; sum-of-the-parts, net asset value, discounted cash flow, leading
P/E, and EV/EBITDA.
RISKS
On top of normal economic and market risk factors that impact most all equities, Idacorp (IDA) is uniquely at risk to:
Because of IPC’s predominantly hydroelectric generating base and heavy reliance on hydroelectric generation, which can be
adversely affected by weather, reduced hydroelectric generation can reduce revenues and increase costs.
Continuing declines in stream flows and over-appropriation of water in Idaho may reduce hydroelectric generation and revenues and
increase costs.
Load growth in IPC’s service territory due to customer growth and demand for energy exposes it to greater market and operational risk
as increased reliance on purchased power to meet load requirements could increase costs and reduce earnings and cash flows.
IPC’s reliance on coal and natural gas to fuel its generating facilities exposes it to risk of increased market prices, which could
increase costs and reduced earnings.
Changes in temperature and precipitation can reduce power sales and revenues.
Climate change could affect customer demand and hydroelectric generation and lead to restrictions on generation resources.
If Idaho Public Utility Commission (IPUC), the Oregon Public Utility Commission (OPUC) or the Federal Energy Regulatory
Commission (FERC) grant less rate recovery in rate case filings than IPC needs to cover the costs of providing services, financial
results could be adversely impacted and economic expansion may be limited.
Conditions that may be imposed in connection with hydroelectric license renewals may require large capital expenditures and reduce
earnings and cash flows.
The cost of complying with environmental regulations related to air quality, water quality, natural resources and health and safety can
increase capital expenditures and operating costs and reduce earnings and cash flows.
IDACORP and its subsidiaries are subject to costs and other effects of legal and regulatory proceedings, settlements, investigations
and claims, including those that have arisen out of the western energy situation.
IPC’s business is subject to substantial governmental regulation and may be adversely affected by increased costs resulting from, or
liability under, existing or future regulations or requirements.
Increased capital expenditures can significantly affect liquidity.
As a holding company, IDACORP does not have its own operating income and must rely on the upstream cash flows from its
subsidiaries to pay dividends and make debt payments.
A downgrade in IDA’s credit ratings could negatively affect the company’s ability to access capital and increase their cost of
borrowing.
Adverse results of income tax audits could reduce earnings and cash flows.
Employee workforce factors, including the loss or retirement of key personnel, availability of qualified personnel and an aging
workforce, could increase costs and reduce earnings.
Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 3 -

STOCK RATING DEFINITIONS
Buy: The stock’s return is expected to exceed 15% over the next twelve months.
Neutral: The stock’s return is expected to be plus or minus 15% over the next twelve months.
Sell: The stock’s return is expected to be negative 15% or more over the next twelve months.

Investment Ratings are determined by the ranges described above at the time of initiation of coverage, a change in risk, or a change
in target price. At other times, the expected returns may fall outside of these ranges because of price movement and/or volatility. Such
interim deviations from specified ranges will be permitted but will become subject to review.

RATINGS DISPERSION AND BANKING RELATIONSHIPS (as of 7/31/11)
Buy 76% (35% are banking clients)
Neutral 24% (15% are banking clients)
Sell 0% (0% are banking clients)

INVESTMENT RATING AND PRICE TARGET HISTORY

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 4 -

COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. does not make a market in subject company. Ladenburg Thalmann & Co. Inc. has neither had an
investment banking relationship with, nor received investment banking fees from the subject company in the past 12 months. Neither
the Analyst, nor members of the Analyst’s household own any securities issued by the subject Company.

GENERAL DISCLAIMERS
Information and opinions presented in this report have been obtained or derived from sources believed by Ladenburg Thalmann & Co.
Inc. to be reliable. The opinions, estimates and projections contained in this report are those of Ladenburg Thalmann as of the date of
this report and are subject to change without notice.

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