COC IDANote022411.pdf

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

4400 Biscayne Boulevard, 12th Floor y Miami, FL 33137 y Telephone: [phone] 800-LAD-THAL

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

IIDDAACCOORRPP ((IIDDAA))
4Q10 Results and 2011 Outlook – Raising to BUY from NEUTRAL
Highlights
• We are raising our rating to BUY from NEUTRAL on IDA shares. Our revised price
target of $41.50 (previously $40 p/s) implies a 2012/2013 P/E of 13.4x/12.8x our EPS estimates of $3.09/$3.25 (previously $3.14/NA). Our 2011 EPS estimate is $2.92
(previously $3.02).
• Our revised 2011 EPS estimate of $2.92 is in line with 2011 guidance of $2.80-$2.95 which includes the use of approximately $15m of investment tax credits per the 2010 Idaho rate
case settlement to support an Idaho-jurisdictional 9.5% ROE. Importantly, an additional $10m of credits are available for use if needed per the settlement. Importantly, our 2011
estimates exclude the 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). Assuming committee approval, we would expect IDA to reverse the use of the estimated $15m of tax credits and
also likely earn an ROE above the 10.5% ROE threshold that would trigger 50/50 customer sharing.
• On February 23, 2011, IDA reported 2010 net income of $142.8m or $2.95 per diluted share
compared to net income of $124.4m or $2.64 per diluted share in 2009 and our estimate of
$2.86 per diluted share. During 4Q10, IDA reported net income of $20.4m or $0.41 per diluted share compared to $23.5m or $0.49 per diluted share in 3Q09 and our estimate of
$0.31 per diluted share. Main drivers behind the y-o-y changes include: Idaho rate settlement benefits and the impacts of the Power Cost Adjustment and Fixed Cost
Adjustment (FCA) mechanisms (increased operating income by $23.9m). This benefit was partially offset by reductions in sales volumes ($18.4m), which decreased by 4% for the
year, mainly due to mild weather, increased focus on energy conservation and continued weak economic conditions, and Oregon excess power costs recovery recorded in 2009 that
did not recur in 2010 ($6.4m).
• IDA initiated its 2011 earnings guidance to a range of $2.80-$2.95 per diluted share, which does not include any potential benefits that could result from the settlement of the uniform
capitalization tax method change. The 2011 guidance incorporates: Idaho Power Operation and Maintenance Expense $300-$310m, Idaho Power Capital Expenditures $320-$330m,
Idaho Power Hydroelectric Generation of $7.5-$9.5m MWh, Non-Regulated Subsidiary
Earnings and Holding Company Expenses $0-$3m.
• We utilize our 2012/2013 estimates as a “benchmark” for the earnings power of IDA which reflect a more traditional rate structure to be decided on at the next general rate case filed
in mid-2011 (IDA still evaluating a GRC filing no earlier than June 1, 2011 with rates effective January 2012, notice of intent would be filed by April 1, 2011) Updated rate base
and capitalization assumptions, as well as, anticipated rate relief support our “normalized” 2012/2013 estimates (full recovery of Langley Gulch in 2013 rates) and price target
objective.
• We also acknowledge that the existing rate settlement could be extended post 2011 and in the event that the unicap study is approved, we would expect IDA to not need any tax
credits in 2011, thereby, preserving the credits for possible future use. Further, we reiterate our view that the concluded/pending tax studies enhance the company’s liquidity position,
help support higher equity ratios, mitigate any significant near-term equity needs (1.2m shares remaining on sales agency agreement) to fund the $397m Langley Gulch power
plant to be operational in mid-2012. Also, the tax savings will ultimately help partially offset
the base rate increase expected to be filed in mid-2011 for new rates effective 2012.

COMPANY & MARKET DATA
Price $37.28
Price Target, Excl Dividends (YE11) $41.50
Prior Target $40.00
52 - Week Range $31.22-$38.72
Mkt. Capitalization (mill) $1,831
Enterprise Value (mill) $2,445
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 218
Book Value per Share (3Q10A) $30.89
Dividend (FY11E) / Yield $1.20 3.2%
FY2009A FY2010A FY2011E
Revenue (mill) $1,050 $1,036 $1,121
1Q EPS $0.40 $0.34
2Q EPS $0.58 $0.82
3Q EPS $1.16 $1.39
4Q EPS $0.49 $0.41
EPS $2.64 $2.95 $2.92
Prior EPS $3.02
Consensus EPS $3.02
P/E 14.1x 12.6x 12.8x
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
Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10

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

February 24, 2011
BUY
Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 2 -

Investment Conclusion
Table 2: IDA – Financial Summar
Year Ending 31 December 2008 2009 2010 2011E 2012E 2013E
FINANCIAL SUMMARYEPS 2.1 2.64 2.95 2.9 3.09 3.25
P/E ratio 17.19 14.15 12.62 12.77 12.05 11.47EBITDAPS 6.45 6.66 6.51 6.14 7.81 8.17
P/EBITDAPS 5.78 5.60 5.73 6.08 4.77 4.56
Free CFPS -2.36 0.69 -0.68 -1.45 -1.15 2.72P/Free CFPS -15.81 54.14 -54.86 -25.80 -32.53 13.71
DPS 1.20 1.20 1.20 1.32 1.45 1.60
Dividend yield 3.2% 3.2% 3.2% 3.5% 3.9% 4.3%BV PS 28.80 29.71 31.77 33.12 34.86 36.51
P/BV PS 1.29 1.26 1.17 1.13 1.07 1.02Dilluted Shares Out 45,379 47,182 48,340 48,940 49,540 49,540
Enterprise value 2,866,352 3,115,688 3,061,725 3,267,389 3,393,856 3,338,276
EV/Sales 2.98 2.97 2.96 2.92 2.76 2.64
EV/EBITDA 9.79 9.92 9.73 10.88 8.77 8.25
EV/EBIT 15.05 14.19 14.12 16.13 12.29 11.67
INCOME STATEMENT (USDm)Revenues 960,414 1,049,800 1,036,029 1,120,689 1,227,436 1,266,088
Gross margin 190,667 203,583 198,670 180,851 263,948 277,926Operating EBITDA 292,753 314,209 314,591 300,250 386,928 404,596
Depreciation & Amortization 102,086 110,626 115,921 119,399 122,981 126,670
EBIT 190,501 219,547 216,843 202,595 276,141 286,119Interest expense 73,056 72,810 75,114 67,978 79,653 79,653
Net income 98,414 124,350 142,798 142,886 153,261 161,043
Net income per share 2.17 2.64 2.95 2.92 3.09 3.25CASH FLOW (USDm)
Cash flow from operations 136,513 284,425 305,400 259,277 273,233 284,705
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 (110,001) 52,668 (79,125)
Common dividends (54,239) (56,820) (57,872) (64,601) (71,932) (79,125)
Free cash flow (107,031) 32,488 (32,852) (70,723) (56,767) 134,705
BALANCE SHEET (USDm)Cash and marketable sec 8,828 52,987 228,677 47,953 43,854 99,434
Total assets 4,022,845 4,238,727 4,676,055 4,629,116 4,830,036 4,726,946
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 1,620,978 1,726,906 1,808,824
RATIO ANALYSIS
Sales growth (%) 9.2% 9.3% -1.3% 8.2% 9.5% 3.1%
Gross margin/sales (%) 19.9% 19.4% 19.2% 16.1% 21.5% 22.0%EBIT/Assets 4.7% 5.2% 4.6% 4.4% 5.7% 6.1%
CFO/Assets 3.4% 6.7% 6.5% 5.6% 5.7% 6.0%
ROA 2.4% 2.9% 3.1% 3.1% 3.2% 3.4%
ROE 7.5% 8.9% 9.3% 8.8% 8.9% 8.9%Total debt/total capital 47.5% 50.1% 49.2% 47.9% 47.9% 46.8%
Total debt/EBITDA 4.0 4.5 4.7 5.0 4.1 3.9
EBITDA/interest expense 4.0 4.3 4.2 4.4 4.9 5.1
FFO/Debt 20.2% 20.5% 17.4% 17.2% 17.9%
RATE BASE AND SEGMENT ANALYSIS1
Implied Rate Base2 2,779,397.23$ 3,001,227.22$
Implied Regulatory Equity Ratio2 50.0% 50.0%
Implied Earned ROE2, 3 10.4% 10.4%Implied Utility EPS $2.91 $3.14
Financial, Ida-West, Holdco $0.03 $0.03
AFUDC $0.12 $0.06
Consolidated IDA EPS4 $3.06 $3.23
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. End of year rate base estimated at $3.0b
4Rate base analysis and segment EPS for presentation only and may differ from actual EPS forecasts
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 - 4 -

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 1/31/11)
Buy 73% (30% are banking clients)
Neutral 26% (19% are banking clients)
Sell 1% (0% are banking clients)

INVESTMENT RATING AND PRICE TARGET HISTORY

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 5 -

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, or other companies
mentioned in this report.

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.

Ladenburg Thalmann & Co. Inc. accepts no liability for loss arising from the use of the material presented in this report, except that
this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to
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Ladenburg Thalmann & Co. Inc. may have issued, and may in the future issue, other reports that are inconsistent with, and reach
different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and
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