COC keybank-10-28-2010.pdf

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October 27, 2010 Close:$36.71
3Q10 KBCM EPS Estimate:$1.20 (Consensus: $1.23)
2010 KBCM EPS Estimate:$2.85 (Consensus: $2.78)
2011 KBCM EPS Estimate:$3.05 (Consensus: $2.92)
3Q10 Actual Results (vs. 3Q09):
•3Q10 operating EPS $1.39 vs. $1.16; GAAP EPS $1.39 vs. $1.16
•Results were above our estimate of $1.20 and consensus of $1.23 per share despite mild weather and what looks like continued
economic weakness.
•Guidance:Raised 2010 earnings guidance in the range of $2.65-$2.80 per share to $2.75-$2.90, citing the benefit of the 2Q
repairs deduction.
Highlights:
•Quarter driven by new rates under IDA's settlement, partly offset by mild weather.
•IDA now exceeds the 9.5% floor ROE outlined in its ID settlement, without the need to utilize additional ADITCs.
•Importantly, IDA booked $65 million of deductions related to the uniform capitalization (UCAP) accounting change. IDA also
reserved fully against this, as it awaits congressional approval of this accounting change. The result was no impact to 3Q
earnings.
•We view the UCAP news favorably, owing to its magnitude and potential to recognize earnings impact in 2011, which could lower
sharing requirements under the existing settlement. However, uncertainty around timing and ultimate congressional approval
could dampen enthusiasm.
Initial Take:We expect a positive response to the beat and guidance range. Additionally, the potential of the UCAP deduction to
lower equity needs is a positive in our view.
4:30PM ET Conference Call #: 617-213-8860
Passcode: IdaCorp
We will be focused on:
•Economic outlook and 2010 sales trends
•Regulatory update
•More detail around tax method change and shareholder portion of benefit
•Detail on how UCAP benefits should flow through financial statements
October 28, 2010 KeyBanc
Quick Alert Capital Markets
IDACORP, Inc. (BUY)
IDA - Quick Alert: 3Q10; Solid Quarter, Additional Tax Deductions Announced
KeyBanc Capital Markets Inc.,
Member NYSE/FINRA/SIPC
Paul T. Ridzon:[phone] —[e-mail]
Timothy Yee:[phone] —[e-mail]
FOR IMPORTANT DISCLOSURES AND CERTIFICATIONS, PLEASE REFER TO PAGES 2 - 3 OF THIS NOTE.
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KeyBanc Capital Markets Inc.Disclosures and Certifications
IDACORP, Inc. - IDA
IDACORP, Inc. is an investment banking client of ours.
We have received compensation for investment banking services from IDACORP, Inc. during the past 12 months
We expect to receive or intend to seek compensation for investment banking services from IDACORP, Inc. within the next
three months.
During the past 12 months, IDACORP, Inc. has been a client of the firm or its affiliates for non-securities related services.
Reg A/C Certification
The research analyst(s) responsible for the preparation of this research report certifies that:(1) all the views expressed in this
research report accurately reflect the research analyst's personal views about any and all of the subject securities or issuers; and (2)
no part of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or
views expressed by the research analyst(s) in this research report.
Three-Year Rating and Price Target History
Rating Disclosures
Distribution of Ratings/IB Services Firmwide and by Sector
KeyBanc Capital Markets
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]199 47.80 45 22.61
HOLD [HOLD]211 50.70 52 24.64
SELL [UND]6 1.40 1 16.67
ENERGY
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]27 44.30 13 48.15
HOLD [HOLD]34 55.70 21 61.76
SELL [UND]0 0.00 0 0.00
Quick AlertOctober 28, 2010
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Rating System
BUY - The security is expected to outperform the market over the next six to 12 months; investors should consider adding the security
to their holdings opportunistically, subject to their overall diversification requirements.
HOLD - The security is expected to perform in line with general market indices over the next six to 12 months; no buy or sell action is
recommended at this time.
UNDERWEIGHT - The security is expected to underperform the market over the next six to 12 months; investors should reduce their
holdings opportunistically.
The information contained in this report is based on sources considered to be reliable but is not represented to be
complete and its accuracy is not guaranteed. The opinions expressed reflect the judgment of the author as of the date of
publication and are subject to change without notice. This report does not constitute an offer to sell or a solicitation of an
offer to buy any securities. Our company policy prohibits research analysts and members of their families from owning
securities of any company followed by that analyst, unless otherwise disclosed. Our officers, directors, shareholders and
other employees, and members of their families may have positions in these securities and may, as principal or agent,
buy and sell such securities before, after or concurrently with the publication of this report. In some instances, such
investments may be inconsistent with the opinions expressed herein. One or more of our employees, other than the
research analyst responsible for the preparation of this report, may be a member of the Board of Directors of any
company referred to in this report. The research analyst responsible for the preparation of this report is compensated
based on various factors, including the analyst's productivity, the quality of the analyst's research and stock
recommendations, ratings from investor clients, competitive factors and overall Firm revenues, which include revenues
derived from, among other business activities, the Firm's performance of investment banking services. In accordance with
industry practices, our analysts are prohibited from soliciting investment banking business for our Firm.
Investors should assume that we are seeking or will seek investment banking or other business relationships with the
company described in this report.
Quick AlertOctober 28, 2010