COC IDA_RBC_Note_2009_02_19_4Q08.pdf

PRICE TARGET REVISION | COMMENT
FEBRUARY 19, 2009
IDACORP, Inc.(NYSE: IDA)
Regulatory improvements in 2008, more work remains
Sector Perform
Above Average Risk
Price:24.39
Shares O/S (MM):45.2
Dividend:1.20
NAVPS:31.00
Debt to Cap:49%
Price Target:31.00 ¯33.00
Implied All-In Return:32%
Market Cap (MM):1,102
Yield:4.9%
P/NAVPS:0.8x
IDA reported 4Q08 adjusted EPS of $0.19 vs. our estimate
of $0.20 and consensus of $0.24
Lowering CNAV and target price to $31, from $38 and $33, respectively.
Maintaining SP rating.
Rate case signals progress, but also continued regulatory disconnect
Improvements to the PCA mechanism, inclusion of certain AFUDC, and use of a
forecasted test year are key improvements to the ID regulatory framework. These
gains, however, are offset by the fact that regulators do not acknowledge that
shareholder interests are aligned with customer interests. A healthy stock price
keeps costs lower for customers. We believe it is that simple.
Cost controls must improve, with or without appropriate regulatory action
During difficult economic environments, companies must tighten their belts to
weather the storm. Based on 4Q08 results, it does not appear that IDA is
successful in controlling costs, although year-end labor reductions may be sadly a
step in the right direction. It is clear that regulators are not willing to give IDA
the benefit of the doubt in this area, so we believe that management must lead by
example and prove that it manages costs prudently.
4Q08 results in line with expectations, excluding one-time effects
Base rate and power cost adjustment and hydroelectric generation increases had a
positive impact on results. Offsetting factors included lower demand, higher
O&M expenses, and an unfavorable FERC rate adjustment.
Liquidity not a concern at present; sufficient levers to pull
Although IDA has $80MM in debt due in 2009, the company has a $599MM debt
shelf and 2.6MM shares in its equity shelf that can be tapped to address this debt
maturity. Looking to 2009, the company currently does not expect to issue as
much equity as it did in 2008 ($50MM). The target debt/equity ratio remains the
same at 50/50. The company has also reduced capital expenditures in the near
term.
Conclusion
We expect IDA to perform on par with its peers in 2009. Although we expect
hydrology to fall below normal, shareholder exposure to this has been reduced.
Furthermore, new rates effective as of February 1, 2009 and updated purchased
power forecasting should help to improve cash flows.
Adjusting estimates to reflect rate case, 2008 results
2009E to $2.22 from $1.94, 2010E to $2.33 from $2.01, 2011E to $2.38 from
$1.99.
Priced as of prior trading day's market close, EST (unless otherwise noted).
RBC Capital Markets Corp.
Lasan Johong (Analyst)
[phone]; [e-mail]
Emily Christy (Associate)
[phone]; [e-mail]
Ella Vuernick (Associate)
[phone]; [e-mail]
FY Dec 2007A 2008A 2009E 2010E
Adj EPS - FD 1.86 2.16 2.22 2.33
Prev.2.18 1.94 2.01
P/AEPS 13.1x 11.3x 11.0x 10.5x
Adj CFPS - FD 1.77 3.59 4.47 4.64
Prev.4.11 4.27 4.40
P/ACFPS 13.8x 6.8x 5.5x 5.3x
EBITDA (MM) 262.0 292.0 359.0 380.0
Prev.311.0 349.0 370.0
FCFPS - FD (2.63) (2.59) 0.79 (0.08)
Prev.(0.57) (1.43) (0.64)
P/FCF NM NM 30.9x NM
Adj EPS - FD Q1 Q2 Q3 Q4
2007 0.56A 0.42A 0.65A 0.23A
2008 0.48A 0.35A 1.14A 0.19A
Prev.0.20E
2009 0.48E 0.38E 1.11E 0.25E
Prev.0.32E 0.58E 0.74E 0.31E
Adj CFPS - FD
2007 0.98A 0.30A 0.50A 0.00A
2008 1.02A 1.08A 1.19A 0.33A
Prev.0.83E
2009 1.03E 0.96E 1.67E 0.81E
Prev.0.88E 1.16E 1.30E 0.92E
EBITDA (MM)
2007 70.0A 62.0A 76.0A 54.0A
2008 71.0A 66.0A 112.0A 42.0A
Prev.63.0E
2009 83.0E 78.0E 129.0E 69.0E
Prev.73.0E 93.0E 105.0E 77.0E
All values in USD unless otherwise noted.
For Required Disclosures, please see Page 7.
2
Details
2008 results reflect economic conditions
IDA had flat load growth that trended down in 4Q08 by 1.5%. Additionally, customer growth was 1.6% for the year, compared to
typical growth of ~3%. Unemployment in ID hit a 20-year high in December at 6.6% compared to 2.7% in December 2007. While ID
remains below the average national unemployment rate of 7.2%, the gap is closing. These trends were somewhat mitigated by the rate
increase approved last year and by better hydrologic conditions in 2008. Results for 4Q08 were also negatively impacted by an
unfavorable FERC decision concerning over-collected revenues, but this matter has been appealed and should not be impactful going
forward.
For 2009 we expect much of the same
Hydrology fro 2009 is forecasted to be below average as of this week's data with snowpack at 77% of normal and reservoir levels at
10% above normal. Forecasted hydrogenation is 6.5-8.5 MM MWh, compared to 2008 results of 6.9 MM MWh and normal average of
8.5 MM MWh. Load and customer growth are projected to be flat to modest. Capital spending is expected to be $220-$230MM for
2009 and $780-$800MM for 2009-2011, excluding a potential base load plant. IDA expects to submit plans for a CCGT plant in 1Q09
that would come online in 2013. While this plant would serve to close IDA's power gap and further reduce shareholder risk, we await
more cost information before including the plant in our model.
2008 Rate Case reflects some structural improvements...
On January 30 the IPUC issued its final order in IDA's rate case. The key elements are listed below with the relevant figures following
in the table. On February 19 IDA filed a request for reconsideration of roughly $8MM in annual revenue requirements, primarily
related to O&M. This request may take up to six months to conclude.
+ Approval of the forecasted test year reduces regulatory lag
IDA submitted its rate case in June 2008 and used a forecasted test year to arrive at its requested rates. The Commission generally
approved the use of this test year and referred to full-year 2008 results to arrive at its approved rates. Previously, there would have
been an 18-month regulatory lag as costs would have been based on the prior year's results. This more up-to-date time frame impacts
the power cost adjustments, LGAR, revenue requirements and O&M expenses. Although there was disagreement on various escalation
rates for certain items, looking forward rather than backward improves the regulatory framework as a whole and revenues and
expenses should be more reflective of actual conditions in 2009. The regulatory lag had been cited by S&P as a reason for last year's
downgrade to BBB from BBB+.
+ Power Cost Adjustment (PCA) ratio change reduces risk
To mitigate the volatility of hydrology, Idaho uses a power purchase factor to adjust rates annually based on actual power costs. The
cost or benefit from the differences in forecasted expenses versus actual expenses is split between customers and shareholders. The
split was changed in this order to 95/5 from 90/10. While the benefit in above-average water years provides a shareholder boost, recent
water years have fallen short and therefore burdened shareholders. We do not believe that it is in the best interests of utility
shareholders to bear this unpredictable risk and would prefer that 100% of the cost/benefit be directed towards customers. That being
said, 95/5 is certainly an improvement over 90/10.
+ AFUDC included in rates for the first time
Typically in ID the costs for capital projects are added to rate base once the project has been put in service. Power plants and T&D
projects usually have predictable schedules and the AFUDC is incorporated into financial planning accordingly. During this rate case,
however, the IPUC determined that the AFUDC for the Hell's Canyon relicensing does not fit within these normal circumstances and
that it should be recovered as forecasted until the process has been completed. The Commission agreed with IDA's request and cited
the long duration of the process and the inability of IDA to control the time line. For 2009, projected AFUDC increased the annual
revenue requirement by $6.8MM.
+ LGAR rates reduced to $26.52/MWh from $31.40/MWh
...but still highlights the lingering disconnect among IDA, regulators and the financial markets
- O&M expense increases slashed by IPUC
IDA requested an increase in O&M expenses of $15.2MM, but the Commission approved an increase of only $1.8MM. The largest
point of contention was the 9.41% escalator that IDA used in forecasting its G&A expenses. In reviewing the relevant testimony, it is
not always clear that the parties are even working from the same data set. IDA must find a way to get on the same page as regulators
and to work together constructively to establish the proper rates. A forecasted test year is only useful if the forecast is accurate.
- Employee Incentives reduced by IPUC
IDA uses four elements in its employee incentive program: 1) 1.5% customer satisfaction; 2) 1.0% network reliability; 3) 1.5% O&M
controls; and 4) 2% IPC income. According to the ID framework, IDA can include these incentives in rates to the extent that they
IDACORP, Inc.February 19, 2009
3
benefit customers (as opposed to shareholders or a combination thereof). The company submitted items 1-3 for recovery. The IPUC
disallowed the O&M incentive and further reduced the remaining incentives by 0.5% because of a link between the incentives and
IDA's ability to pay a dividend. Essentially, employees do not receive incentives if IDA does not pay a dividend. If O&M expenses are
reduced, customers benefit. There is no reasonable position that can assert otherwise, in our opinion. Regulators should acknowledge
this and support IDA's efforts towards reducing O&M.
While this issue represented 10% of IDA's requested increase, the ideological repercussions are more significant. In our view,
regulators still seem to miss the forest for the trees with respect to the link between shareholder benefits and customer benefits. If the
stock price suffers, credit ratings fall, debt levels increase and interest expense rises. The cost of debt is included in rates and thereby
affects customers. Shareholder and customer interests are clearly tied together and in our view the IPUC's continued efforts to drive a
wedge between them are not in the best interests of either.
Liquidity not a concern; sufficient levers to pull for now
At year-end 2008, IDA had $8.8MM in cash. Revolver limits are $100MM at IDA, with an option to increase to $150MM, and
$300MM at IPC with an option to increase to $450MM. Both facilities are due in April 2012. Current available combined capacity at
these facilities was $233MM at year-end. Additionally, the company has a debt shelf of $599MM in securities and an equity shelf of
2.6MM shares. Upcoming debt maturities for the company include $80MM in 2009 and $120MM in 2011. We believe that IDA, as an
investment grade company, should be able to tap its debt shelf to refinance the upcoming debt maturities. In the interim, we believe
that revolver capacity or an equity shelf issuance should be sufficient to cover any gaps. The company expects to maintain its ~50/50
debt/equity ratio as it evaluates financing options for 2009. IDA currently expects to issue less equity than the $50MM it issued in
2008. As a longer-term concern, however, IDA must ensure that it achieves its ROE by controlling costs and working with regulators
to continue to improve the regulatory framework so that debt levels remain well below the 65% dividend threshold.
Valuation
Our target price and our calculated net-asset-value (CNAV) is $31. We determine our CNAV based on a full discounted cash flow
model using an average of Free Cash Flow to the Firm and Free Cash Flow to Equity. We apply a multistage growth rate with a terminal
multiple of 11.2x based on a dynamic WACC with an initial rate of 7.81%. The terminal value is calculated approximately 25 years
forward.
As a pure-play electric utility with a significant hydroelectric generation fleet, IDA operates in a heavily regulated environment.
Considering the risk management policies of IDA, the Idaho regulatory structure, solid operations and the above-average population
growth for the service territory, the company continues to perform as expected.
Price Target Impediment
Volatile hydrology, unfavorable regulatory decisions, poor growth project selections, operational setbacks, changes in credit ratings,
environmental regulations, cost overruns with the capex projects, access to capital markets, and weather.
Company Description
IDACORP is a holding company for the following subsidiaries: Idaho Power Company, IDACORP Financial, and Ida-West Energy.
Idaho Power Company (IPC) is a regulated utility serving approximately 472,000 customers in Idaho and western Oregon. Through its
regulated operations, IPC generates, purchases, transmits, distributes, and sells electric power. Through its 17 hydroelectric power plants,
IPC is one of few utilities with a predominant hydro generating base. The company also owns and operates coal and natural gas-fired
plants to round out its approximately 3,300MW power portfolio. Additionally, IPC has 4,600 miles of transmission lines and 26,000
IDACORP, Inc.February 19, 2009
4
miles of distribution lines. IDACORP Financial is an investment company with a focus on affordable housing and historic preservation
projects. Ida-West Energy is an independent power project development company with 44.6MW of combined interest in nine
hydroelectric power plants in California and Idaho.
IDACORP, Inc.February 19, 2009
5
Ticker Symbol IDA
Year Quarter EPS Oper. CF EBITDA FCF EFCF Capital Type Amount %Type % of Total
Assumptions Rate 12/2008 ($MM)
2007 1 $0.56 $0.98 $70 ($0.08)$0.14 Equity Capital $1,302.4 51%Equity 5.72%
DCF Start Year 2009 2007 2 $0.42 $0.30 $62 ($0.80)$3.48 Preferred Stock $0.0 0%Preferred 0.00%
DCF Start Month 1 2007 3 $0.65 $0.50 $76 ($0.95)($3.22)Total Debt $1,270.0 49%Debt 2.09%
Current Beta of Company 0.90 2007 4 $0.23 $0.00 $54 ($0.80)$0.06 Total $2,572.4 100% WACC 7.81%
Static or Variable Beta (S/V)V Total 5 $1.86 $1.77 $262 ($2.63)$0.41
Normalized Long-Term Risk-free Rate 5.00%
Market Return 12.00%2008 1 $0.48 $1.02 $71 ($0.63)$0.24 Terminal Value Multiple Terminal Value Multiple
Current Equity Discount Rate 11.30%2008 2 $0.35 $1.08 $66 ($0.02)$0.36 Multiple of FCF 11.8 x Multiple of EFCF 10.6 x
Current Cost of Preferred Stock 0.00%2008 3 $1.14 $1.19 $112 $0.64 $3.85
Current Cost of Debt Capital 6.52%2008 4 $0.19 $0.33 $42 ($2.54)($4.20)Term. Val. in Months 288 Term. Val. in Months 288
Current WACC 7.81% Total 5 $2.16 $3.59 $292 ($2.59)$0.17
Basic Shares Outstanding (MM) 45.8 Category Valuation Category Valuation
Diluted Shares Outstanding (MM)46.0 2009E 1 $0.48 $1.03 $83 $0.11 $0.65 12/2008
Assumed Tax Rate 35%2009E 2 $0.38 $0.96 $78 $0.04 $0.30 Calc. Ent. Value $2,609.8 Equity FCF Value $1,423.2
Assumed Inflation Rate 3.50%2009E 3 $1.11 $1.67 $129 $0.75 $0.30 Preferred Stock $0.0 Cash Balance @ Start
Minimum Cash Balance Required $25 2009E 4 $0.25 $0.81 $69 ($0.11)$0.30 Total Debt ($1,261.2) of Valuation $8.8
Revolver Overflow Alert Total 5 $2.22 $4.47 $359 $0.79 $1.55 Equity Value $1,348.6 Equity Value $1,432.0
Current Stock Price of IDA ($/Sh.)$24.39 Shares NAV Average Shares NAV
Current Book Value per Share $28.30 Basic $29.44 $30.35 Basic $31.26
Current Price-to-Book Ratio 0.9 x Diluted $29.30 $30.21 Diluted $31.11
Current Market Cap ($MM)$1,117.4 2010E
Current Market Ent. Value ($MM)$2,387.3 Total 5 $2.33 $4.64 $380 ($0.08)$1.19 Ratios P/NAV P/NAV Ratios P/NAV
Per Share Estimates Capital Structure Cost of Capital
Net Asset Value Cash Flow Valuation
Current Market Ent. Value Per Sh. $52.11 Basic 0.8 x 0.8 x Basic 0.8 x
Current Book Ent. Value ($MM)$2,572.4 Diluted 0.8 x 0.8 x Diluted 0.8 x
Current Book Ent. Value Per Sh.$56.15
Ratios P/Book
Names of Regions Name 2011E Basic 0.9 x
Region 1 Idaho Power Company (IPC) Total 5 $2.38 $4.77 $400 $0.23 $1.19
Region 2 Idacorp Financial Services (IFS)Criteria Multiple 2009ERow #Multiple Analysis
Region 3 Idacorp Energy (IE)Ratios
Region 4 Other Year P/EP/Oper. CFEV/EBITDA EV/FCF P/EFCF Net Debt per Share N/A $39.73 497 N/A
Basic Shares Out N/A 45.8 166 N/A
2008 13.1 x 13.8 x 9.1 x N/M 59.4 x P/E 14.0 x $2.22 174 $31.00
2009E 11.3 x 6.8 x 8.2 x N/M 144.6 x P/CF 6.9 x $4.47 363 $31.00
2010E 11.0 x 5.5 x 6.6 x 66.2 x 15.8 x EV/EBITDA 9.0 x $7.84 190 $31.00
2011E 10.5 x 5.3 x 6.3 x N/M 20.4 x Average $31.00
Sources: Company reports; RBC Capital Markets estimates; Lasan Johong [phone] [e-mail]; Emily Christy [phone], [e-mail]; Ella Vuernick [phone], [e-mail]
IDACORP, Inc.February 19, 2009
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IDA 2007 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2010 2011
SUMMARY FINANCIALS ($ Millions)2007 Q1A Q2A Q3A Q4A 2008 Q1E Q2E Q3E Q4E 2009E 2010E 2011E
GENERATION (MWh)13,548.0 3,642.0 3,493.3 3,513.1 3,311.7 13,960.0 3,502.5 3,697.9 3,440.6 3,140.4 13,781.4 13,781.4 13,866.6
INCOME STATEMENT
TOTAL NET REVENUE $879.4 $213.4 $230.2 $299.7 $217.0 $960.4 $216.0 $215.1 $310.3 $224.8 $966.2 $1,006.1 $1,079.2
DOC (Incl. Cost of Fuel and Plant O&M)$312.2 $95.9 $103.8 $109.3 $106.9 $415.8 $118.2 $123.4 $126.8 $126.4 $494.8 $494.5 $516.4
Other Direct Operating Costs $307.1 $50.1 $54.9 $84.3 $60.9 $250.2 $20.5 $16.8 $51.6 $26.7 $115.6 $133.7 $164.6
General & Administrative Expenses $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
DIRECT OPERATING COSTS $619.3 $146.0 $158.7 $193.6 $167.8 $666.0 $138.7 $140.1 $178.4 $153.2 $610.4 $628.1 $681.0
GROSS PROFIT $260.1 $67.5 $71.5 $106.1 $49.3 $294.4 $77.3 $74.9 $131.9 $71.6 $355.8 $378.0 $398.3
Depreciation, Amortization and Expl. Exp.$103.1 $25.8 $26.6 $25.7 $24.0 $102.1 $26.6 $27.5 $26.6 $26.8 $107.5 $111.1 $115.7
Other Operating Costs $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
TOTAL OPERATING COSTS $722.4 $171.7 $185.3 $219.3 $191.8 $768.1 $165.3 $167.6 $205.0 $180.0 $717.9 $739.2 $796.7
OPERATING INCOME $157.0 $41.7 $44.9 $80.4 $25.3 $192.3 $50.7 $47.4 $105.3 $44.8 $248.3 $266.9 $282.6
Non-Operating Expenses ($7.3)($0.0)($1.0)($4.5)$5.5 ($0.0)($5.8)($3.3)$2.6 $3.0 ($3.5)($2.0)($2.2)
EARNINGS BEFORE INTEREST & TAXES $164.3 $41.7 $45.9 $84.9 $19.8 $192.3 $56.5 $50.8 $102.7 $41.8 $251.7 $268.9 $284.8
Net Interest Expense, Incl. TCP Dividend $63.3 $17.5 $17.1 $18.5 $20.0 $73.1 $22.8 $23.6 $23.9 $24.2 $94.5 $104.0 $116.4
PRE-TAX INCOME $100.9 $24.3 $28.9 $66.4 ($0.2)$119.2 $33.7 $27.2 $78.8 $17.6 $157.2 $164.9 $168.4
Income Tax Expense $13.7 $5.6 $6.9 $15.8 ($9.1)$19.2 $11.8 $9.5 $27.6 $6.1 $55.0 $57.7 $58.9
Minority Interest, Pref. Dividend & Other $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
NET INCOME PRE-X-ITEMS $82.3 $21.7 $15.7 $51.7 $8.9 $98.0 $21.9 $17.7 $51.2 $11.4 $102.2 $107.2 $109.4
Extraordinary Items & Other $0.0 $0.0 ($1.8)$0.0 $1.4 ($0.4)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
NET INCOME $82.3 $21.7 $17.5 $51.7 $7.4 $98.4 $21.9 $17.7 $51.2 $11.4 $102.2 $107.2 $109.4
NET INCOME PRE-X-ITEMS PER SHARE $1.86 $0.48 $0.35 $1.14 $0.19 $2.16 $0.48 $0.38 $1.11 $0.25 $2.22 $2.33 $2.38
Extraordinary Items & Other $0.00 $0.00 ($0.04)$0.00 $0.03 ($0.01)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
NET INCOME PER SHARE $1.86 $0.48 $0.39 $1.14 $0.16 $2.17 $0.48 $0.38 $1.11 $0.25 $2.22 $2.33 $2.38
CASH FLOW STATEMENT
Adjustments to Revenue and Income ($6.3)$0.0 $0.0 ($3.8)($3.7)($7.4)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Depreciation, Amortization and Expl. Exp.$120.4 $30.8 $32.5 $29.9 $29.2 $122.4 $26.6 $27.5 $26.6 $26.8 $107.5 $111.1 $115.7
Deferred Income Taxes $11.0 $12.6 $4.2 ($0.7)($11.4)$4.7 $6.0 $6.0 $6.0 $6.0 $24.0 $24.0 $24.0
Other Operating Cash Flow Items ($129.0)($19.4)($5.7)($23.6)($6.5)($55.1)($7.0)($7.0)($7.0)($7.0)($28.0)($28.7)($29.4)
Changes in Working Capital $2.1 ($24.8)($15.9)$8.3 $6.0 ($26.4)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
OPERATING CASH FLOW $80.6 $20.9 $32.6 $61.9 $21.1 $136.5 $47.5 $44.2 $76.8 $37.2 $205.7 $213.6 $219.7
Cap. Ex., Acquisitions, Investments ($294.2)($65.1)($57.2)($51.9)($37.4)($211.6)($56.1)($56.4)($56.4)($56.4)($225.4)($279.0)($282.7)
Proceeds from Sales $27.1 $0.0 $6.5 $2.2 $0.1 $8.8 $0.1 $0.0 $0.0 $0.0 $0.1 $0.0 $0.0
Other Investing Cash Flow Items $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 ($1.4)($1.4)($1.4)($1.4)($5.6)($6.0)($2.3)
INVESTING CASH FLOW ($267.1)($65.1)($50.7)($49.7)($37.3)($202.8)($57.4)($57.8)($57.8)($57.8)($230.9)($285.0)($285.0)
Net Equity Financing $37.2 $2.2 $1.8 $8.2 $38.3 $50.6 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Net Debt Capital & Other Financing $202.4 $55.3 $31.4 $163.2 ($176.4)$73.5 $39.8 $27.4 ($5.2)$34.3 $96.3 $126.4 $120.3
Financing Costs $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Common and Preferred Dividends ($53.0)($13.5)($13.5)($13.5)($13.7)($54.2)($13.7)($13.7)($13.7)($13.7)($55.0)($55.0)($55.0)
Other Financing Cash Flow Items ($2.0)($0.4)($0.0)($1.3)($0.9)($2.6)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
FINANCING CASH FLOW $184.6 $43.6 $19.7 $156.6 ($152.7)$67.2 $26.1 $13.6 ($19.0)$20.6 $41.3 $71.4 $65.3
CHANGE IN CASH ($1.9)($0.6)$1.5 $168.8 ($168.9)$0.9 $16.2 ($0.0)$0.0 $0.0 $16.2 $0.0 $0.0
OP. CF BEFORE W/C PER SHARE $1.77 $1.02 $1.08 $1.19 $0.33 $3.59 $1.03 $0.96 $1.67 $0.81 $4.47 $4.64 $4.77
BALANCE SHEET
Cash and Equivalents $8.0 $7.4 $8.9 $57.7 $8.8 $8.8 $25.0 $25.0 $25.0 $25.0 $25.0 $25.0 $25.0
Accounts Receivables $74.7 $74.4 $74.7 $83.7 $91.4 $91.4 $91.4 $91.4 $91.4 $91.4 $91.4 $91.4 $91.4
Inventory, Fuels and Materials $60.5 $64.4 $74.0 $75.7 $75.7 $75.7 $75.7 $75.7 $75.7 $75.7 $75.7 $75.7 $75.7
Other Current Assets $324.5 $323.1 $308.7 $299.4 $288.9 $288.9 $288.9 $288.9 $288.9 $288.9 $288.9 $288.9 $288.9
TOTAL CURRENT ASSETS $467.8 $469.4 $466.3 $516.5 $464.8 $464.8 $481.0 $481.0 $481.0 $481.0 $481.0 $481.0 $481.0
TOTAL PP&E $2,616.6 $2,649.0 $2,687.8 $2,717.2 $2,758.2 $2,758.2 $2,786.4 $2,813.7 $2,842.1 $2,870.2 $2,870.2 $3,044.0 $3,213.4
Other Long-term Assets $569.0 $591.1 $594.5 $617.7 $799.8 $799.8 $809.5 $819.4 $829.3 $839.2 $839.2 $867.9 $897.3
TOTAL ASSETS $3,653.3 $3,709.5 $3,748.6 $3,851.3 $4,022.8 $4,022.8 $4,076.8 $4,114.1 $4,152.4 $4,190.4 $4,190.4 $4,393.0 $4,591.7
Accounts Payables $271.6 $302.0 $348.1 $270.1 $248.0 $248.0 $248.0 $248.0 $248.0 $248.0 $248.0 $248.0 $248.0
Short-term Debt & Current Portions $11.5 $11.3 $8.6 $7.8 $86.5 $86.5 $173.4 $153.4 $133.4 $113.4 $113.4 $233.4 $255.2
Other Current Liabilities $92.3 $100.5 $95.2 $108.5 $61.1 $61.1 $61.1 $61.1 $61.1 $61.1 $61.1 $61.1 $61.1
TOTAL CURRENT LIABILITIES $375.3 $413.9 $452.0 $386.5 $395.7 $395.7 $482.6 $462.6 $442.6 $422.6 $422.6 $542.6 $564.4
Long-term Debt and Other Obligations $1,156.9 $1,155.3 $1,153.5 $1,273.0 $1,183.5 $1,183.5 $1,244.7 $1,292.1 $1,306.9 $1,361.2 $1,361.2 $1,367.6 $1,466.1
Deferred Income Taxes $466.2 $479.6 $468.9 $473.8 $515.7 $515.7 $521.7 $527.7 $533.7 $539.7 $539.7 $563.7 $587.7
Other Long-term Liabilities $447.6 $443.2 $449.6 $447.3 $625.6 $625.6 $517.2 $517.2 $517.2 $517.2 $517.2 $517.2 $517.2
TOTAL LONG-TERM LIABILITIES $2,070.7 $2,078.1 $2,072.0 $2,194.1 $2,324.7 $2,324.7 $2,283.6 $2,337.0 $2,357.8 $2,418.1 $2,418.1 $2,448.5 $2,571.0
Long-term Financings $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
TOTAL LIABILITIES $2,446.0 $2,492.0 $2,523.9 $2,580.6 $2,720.4 $2,720.4 $2,766.2 $2,799.6 $2,800.4 $2,840.7 $2,840.7 $2,991.1 $3,135.4
Equity and Additional Paid-in Capital $675.8 $678.7 $682.1 $691.2 $729.5 $729.5 $729.5 $729.5 $729.5 $729.5 $729.5 $729.5 $729.5
Retained Earnings $537.7 $545.9 $549.8 $588.0 $581.7 $581.7 $589.9 $593.8 $631.3 $628.9 $628.9 $681.1 $735.6
Other Stockholders' Equity ($6.2)($7.2)($7.3)($8.5)($8.7)($8.7)($8.7)($8.7)($8.7)($8.7)($8.7)($8.7)($8.7)
TOTAL STOCKHOLDERS' EQUITY $1,207.3 $1,217.5 $1,224.6 $1,270.7 $1,302.4 $1,302.4 $1,310.6 $1,314.5 $1,352.0 $1,349.7 $1,349.7 $1,401.9 $1,456.3
TOTAL LIABILITIES & EQUITY $3,653.3 $3,709.5 $3,748.6 $3,851.3 $4,022.8 $4,022.8 $4,076.8 $4,114.1 $4,152.4 $4,190.4 $4,190.4 $4,393.0 $4,591.7
Sources: Company reports; RBC Capital Markets estimates. Lasan Johong - [phone]; [e-mail]
IDACORP, Inc.February 19, 2009
7
Required Disclosures
Explanation of RBC Capital Markets Rating System
An analyst's 'sector' is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to
a particular stock represents solely the analyst's view of how that stock will perform over the next 12 months relative to the analyst's
sector average.
Ratings
Top Pick (TP):Represents best in Outperform category; analyst's best ideas; expected to significantly outperform the sector over 12
months; provides best risk-reward ratio; approximately 10% of analyst's recommendations.
Outperform (O):Expected to materially outperform sector average over 12 months.
Sector Perform (SP):Returns expected to be in line with sector average over 12 months.
Underperform (U):Returns expected to be materially below sector average over 12 months.
Risk Qualifiers (any of the following criteria may be present):
Average Risk (Avg):Volatility and risk expected to be comparable to sector; average revenue and earnings predictability; no
significant cash flow/financing concerns over coming 12-24 months; fairly liquid.
Above Average Risk (AA):Volatility and risk expected to be above sector; below average revenue and earnings predictability; may
not be suitable for a significant class of individual equity investors; may have negative cash flow; low market cap or float.
Speculative (Spec):Risk consistent with venture capital; low public float; potential balance sheet concerns; risk of being delisted.
Distribution of Ratings
For the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories - Buy,
Hold/Neutral, or Sell - regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick/Outperform,
Sector Perform and Underperform most closely correspond to Buy, Hold/Neutral and Sell, respectively, the meanings are not the same
because our ratings are determined on a relative basis (as described above).
Distribution of Ratings
RBC Capital Markets, Equity Research
Investment Banking
Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY[TP/O] 492 44.40 111 22.56
HOLD[SP] 511 46.10 84 16.44
SELL[U] 105 9.50 12 11.43
References to a Recommended List in the recommendation history chart may include one or more recommended lists or model
portfolios maintained by a business unit of the Wealth Management Division of RBC Capital Markets Corporation. These
Recommended Lists include the Prime Opportunity List (RL 3), the Private Client Prime Portfolio (RL 4), the Prime Income List (RL
IDACORP, Inc.February 19, 2009
8
6), the Guided Portfolio: Large Cap (RL 7), and the Guided Portfolio: Dividend Growth (RL 8). The abbreviation 'RL On' means the
date a security was placed on a Recommended List. The abbreviation 'RL Off' means the date a security was removed from a
Recommended List.
Analyst Certification
All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the
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indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.
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database does not constitute a research report. These Short-Term trading calls are not formal ratings and reflect the research analyst's
views with respect to market and trading events in the coming days or weeks and, as such, may differ from the price targets and
recommendations in our published research reports reflecting the research analyst's views of the longer-term (one year) prospects of
the subject company. Thus, it is possible that a subject company's common equity that is considered a long-term 'sector perform' or
even an 'underperform' might be a Short-Term buying opportunity as a result of temporary selling pressure in the market; conversely, a
subject company's common equity rated a long-term 'outperform' could be considered susceptible to a Short-Term downward price
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Conflicts Disclosures
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http://www.rbccm.com/cm/file/0,,63022,00.pdf
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Important Disclosures
The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including total
revenues of the member companies of RBC Capital Markets and its affiliates, a portion of which are or have been generated by
investment banking activities of the member companies of RBC Capital Markets and its affiliates.
A member company of RBC Capital Markets or one of its affiliates received compensation for products or services other than
investment banking services from IDACORP, Inc. during the past 12 months. During this time, a member company of RBC Capital
Markets or one of its affiliates provided non-securities services to IDACORP, Inc.
RBC Capital Markets is currently providing IDACORP, Inc. with non-securities services.
RBC Capital Markets has provided IDACORP, Inc. with non-securities services in the past 12 months.
For the calendar quarter ended September 30, 2008, the author of this report did not attest in the time frame required under Regulation
AC that (i) the views expressed by the author in all public appearances during such calendar quarter actually reflected the author's own
personal views at that time about any and all of the subject securities or issuers discussed, and (ii) no part of the author's compensation
was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the author in such public
appearances; provided, however, that the author has, as of the date of this report, affirmatively made the foregoing attestations for such
calendar quarter.
Additional Disclosures
RBC Capital Markets is the business name used by certain subsidiaries of Royal Bank of Canada, including RBC Dominion Securities Inc., RBC Capital Markets
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judgement as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Nothing in this report
IDACORP, Inc.February 19, 2009
9
constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and has been prepared
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IDACORP, Inc.February 19, 2009