COC RBC-Feb-23-2010.pdf

PRICE TARGET REVISION | COMMENT
FEBRUARY 23, 2010
IDACORP, Inc.(NYSE: IDA)
Strong Quarter for IDA; Regulatory Structure in Flux
Sector Perform
Above Average Risk
Price:33.61
Shares O/S (MM):45.2
Dividend:1.20
NAVPS:36.00
Debt to Cap:50%
Price Target:36.00 ­33.00
Implied All-In Return:11%
Market Cap (MM):1,519
Yield:3.6%
P/NAVPS:0.9x
Priced at market close on February 23, 2010 ET.
IDA reported 4Q09 adjusted EPS of $0.49 vs. consensus of
$0.29 and our estimate of $0.21
Maintaining Sector Perform rating; raising target price to $36 from $33
IDA continues to navigate the difficult economic environment with success. The
recent regulatory settlement further ensures earnings stability over the next two
years. Additionally, the company has generation and transmission growth
projects on the horizon. These factors should enable IDA to perform in line with
its peers in the near term. In the longer term, however, we remain concerned
about the regulatory hurdles in 2012 and beyond.
Q4 Results
4Q09 results were driven by lower power prices, changes to the regulatory
structure, and favorable tax benefits, although somewhat offset by continued
weak electricity demand. Hydrology remained favorable, but precipitation
reduced irrigation sales.
Rate Case Settlement: Short-term fix, longer-term risk
IDA's recent settlement with regulators essentially collared earnings for the next
two years between 9.5% and 10.5% ROE. To reach the 9.5% floor, IDA can
amortize up to $25MM per year of deferred investment tax credits. Anything
above 10.5% will be split between the company and customers. The company is
also forbidden to file a general rate case for rate changes prior to 1/1/12. While
this settlement provides earnings stability for the next two years, it only delays
the inevitable rate case proceeding. With current low commodity prices, we
believe that the climate for a general rate case is relatively favorable and would
have resulted in a lower net impact to customers at implementation. By 2011,
legislative actions and tightening power markets could have a substantial impact
on power prices and result in a net "double whammy" for customers. In this
scenario, approval of a rate increase is risky, in our view.
Adjusting estimates based on quarter, rate case settlement
IDA issued 2010 guidance of $2.65-$2.80. We are updating our estimates to
$2.72 for 2010 and $2.75 for 2011, up from $2.40 and $2.43, respectively.
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 2008A 2009A 2010E 2011E
Adj EPS - FD 2.16 2.64 2.72 2.75
Prev.2.35 2.40 2.43
P/AEPS 15.6x 12.7x 12.4x 12.2x
Adj CFPS - FD 3.59 7.21 5.48 5.47
Prev.6.05 4.60 4.60
P/ACFPS 9.4x 4.7x 6.1x 6.1x
EBITDA (MM) 292.0 330.0 413.0 437.0
Prev.325.0 396.0 422.0
FCFPS - FD (2.51) 2.58 (1.90) (1.39)
Prev.1.46 (2.77) (2.18)
P/FCF NM 13.0x NM NM
Adj EPS - FD Q1 Q2 Q3 Q4
2008 0.48A 0.35A 1.14A 0.19A
2009 0.40A 0.58A 1.16A 0.49A
Prev.0.21E
2010 0.42E 0.63E 1.21E 0.44E
Adj CFPS - FD
2008 1.02A 1.08A 1.19A 0.33A
2009 1.74A 1.65A 1.94A 1.87A
Prev.0.72E
2010 0.92E 1.15E 1.86E 1.52E
EBITDA (MM)
2008 71.0A 66.0A 112.0A 42.0A
2009 69.0A 78.0A 116.0A 68.0A
Prev.63.0E
2010 81.0E 98.0E 147.0E 87.0E
All values in USD unless otherwise noted.
For Required Conflicts Disclosures, see Page 6.
2
Details
Rate Case Settlement: Short-term benefit, risky precedents for the longer term
Settlement Details
•A moratorium on base rate increases until January 2012.
•Revised sharing of the expected PCA reduction to take effect June 1, 2010 through May 31, 2011. Current expected reduction of
$160MM split as follows: $75MM to cover power supply expense increases, $25MM to IDA, $60MM to customers.
•IDA allowed to amortize deferred investment tax credits of $45MM over 2009-2011 if required to meet a minimum ROE of 9.5%.
$15MM max for 2009, $25MM max in 2010 and 2011.
•ROE of 10.5% with amounts in excess split evenly between IDA and customers.
•All new CWIP was postponed to 2012.
•Pension expenses will be treated by a separate tracking mechanism.
•Advanced Meter Initiative (AMI) to be considered separately outside a rate case.
PCA: If it ain't broke...
PCA mechanism had been improved to allocate appropriate costs to the appropriate parties with a 95/5 sharing between customers and
shareholders. While we would prefer a complete pass-through, this sharing was close enough for investor comfort with an appropriate
commodity risk level. The mechanism was established to create stability for company earnings despite the volatility of hydrology and
power supply expenses. Accordingly, as commodity prices rose in 2008, IDA was largely insulated from any negative impact and
costs were born by the end-use customers. As commodity prices dropped in 2009, however, the PCA mechanism is being altered in
order to avoid a proper rate case. Instead of the expected reduction in PCA rates being returned to customers, IDA is taking more than
its share to offset deficiencies in its base rates. While the short-term benefits to IDA are obvious, we remain concerned that this quick
fix may jeopardize proceedings down the road, especially if power supply costs rise. IDA worked hard to achieve its 95/5 sharing
mechanism and we fear that it may be at risk once again.
Minimum ROE is beneficial now, but what happens next?
The gap between an approved ROE and the actual earned ROE is a challenge that faces most utilities on a constant basis.
Theoretically, base rates should be designed so that the utility can achieve the target ROE. However, in reality, regulatory lag,
customer usage patterns and other unexpected deviations to the business model between rate cases routinely thwart this theoretical
picture. For IDA, the regulatory structure actually provides for many of the major issues. ID has used a forward test year to minimize
regulatory lag and has a decoupling pilot program that uses a fixed-cost adjustment mechanism. These mechanisms, however, are only
useful if they are utilized appropriately. We would prefer IDA to make the appropriate changes in these levers rather than abandon the
process for a temporary fix. We agree that the general rate case process can be a challenge in itself, but for the longer term financial
health of the utility it is a more prudent approach, in our view.
Other components put aside for ascetics, but the need for funding remains
Other elements that IDA would have requested in a general rate case include CWIP, funds for the AMI program, and higher pension
expenses. CWIP was simply removed from consideration and all new CWIP was postponed until the rate moratorium expires in 2012.
While the amounts during this time period are not significant, once again we are concerned about the precedent being set. CWIP is an
important component of utility financial health, especially during periods of increased capital spending. After 2012 we expect the
company's capital expenditures to increase due to its transmission projects. If IDA can live without CWIP until 2012, the commission
may believe that it is not necessary after 2012 either.
The AMI program will now be considered under a separate regulatory filing. This may change the ascetics of an all-encompassing
one-time rate increase, but the funding needs remain unchanged and the ultimate impact on customers won't change in the long run.
Due to the recent and expected continued volatility in pension expenses, this item will also be considered under a separate regulatory
proceeding. The company is proposing a pension expense tracking mechanism for better matching of expenses and rates. While we
believe that the mechanism is the correct approach for this expense item, the ultimate impact on customers is, again, unchanged.
We appreciate the value of ascetics, and smaller increases are usually tolerated better than one-time impacts by both regulators and
customers. Other than the CWIP ongoing concerns, separating these expense items from base rates seems perfectly sensible. However,
once again, these regulatory mechanisms are only useful if they are used appropriately. Given recent history, we are skeptical that will
be the case.
Valuation
Our target price and our calculated net-asset-value (CNAV) is $36. 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
IDACORP, Inc.February 23, 2010
3
terminal multiple of 12.3x based on a dynamic WACC with an initial rate of 7.29%. The terminal value is calculated approximately 23
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 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 23, 2010
4
Ticker Symbol IDA
Year Quarter EPS Oper. CF EBITDA FCF EFCF Capital Type Amount %Type % of Total
Assumptions Rate 12/2009 ($MM)
2008 1 $0.48 $1.02 $71 ($0.63)$0.24 Equity Capital $1,397.3 50%Equity 5.26%
DCF Start Year 2010 2008 2 $0.35 $1.08 $66 ($0.02)$0.36 Preferred Stock $0.0 0%Preferred 0.00%
DCF Start Month 1 2008 3 $1.14 $1.19 $112 $0.64 $3.85 Total Debt $1,419.1 50%Debt 2.03%
Current Beta of Company 0.80 2008 4 $0.19 $0.33 $42 ($2.47)($4.20) Total $2,816.4 100% WACC 7.29%
Static or Variable Beta (S/V)V Total 5 $2.16 $3.59 $292 ($2.51)$0.17
Normalized Long-Term Risk-free Rate 5.00%
Market Return 12.00%2009 1 $0.40 $1.74 $69 $0.43 $2.00 Terminal Value Multiple Terminal Value Multiple
Current Equity Discount Rate 10.60%2009 2 $0.58 $1.65 $78 $0.64 ($1.31)Multiple of FCF 12.3 x Multiple of EFCF 11.4 x
Current Cost of Preferred Stock 0.00%2009 3 $1.16 $1.94 $116 $1.67 $0.32
Current Cost of Debt Capital 6.20%2009 4 $0.49 $1.87 $68 ($0.15)$0.65 Term. Val. in Months 288 Term. Val. in Months 288
Current WACC 7.29% Total 5 $2.64 $7.21 $330 $2.58 $1.66
Basic Shares Outstanding (MM) 47.4 Category Valuation Category Valuation
Diluted Shares Outstanding (MM)47.7 2010E 1 $0.42 $0.92 $81 ($1.00)($0.29)12/2009
Assumed Tax Rate 35%2010E 2 $0.63 $1.15 $98 ($0.75)$0.30 Calc. Ent. Value $2,994.4 Equity FCF Value $1,724.7
Assumed Inflation Rate 3.50%2010E 3 $1.21 $1.86 $147 $0.07 ($0.94)Preferred Stock $0.0 Cash Balance @ Start
Minimum Cash Balance Required $25 2010E 4 $0.44 $1.52 $87 ($0.27)($0.05)Total Debt ($1,366.1) of Valuation $53.0
Revolver Overflow Alert Total 5 $2.72 $5.48 $413 ($1.90)($1.00) Equity Value $1,628.4 Equity Value $1,777.7
Current Stock Price of IDA ($/Sh.)$33.61 Shares NAV Average Shares NAV
Current Book Value per Share $29.29 Basic $34.39 $35.97 Basic $37.54
Current Price-to-Book Ratio 1.1 x Diluted $34.14 $35.70 Diluted $37.27
Current Market Cap ($MM)$1,591.4 2011E
Current Market Ent. Value ($MM)$3,010.5 Total 5 $2.75 $5.47 $437 ($1.39)($0.35)Ratios P/NAV P/NAV Ratios P/NAV
Current Market Ent. Value Per Sh. $63.58 Basic 1.0 x 0.9 x Basic 0.9 x
Current Book Ent. Value ($MM)$2,816.4 Diluted 1.0 x 0.9 x Diluted 0.9 x
Current Book Ent. Value Per Sh.$59.48
Ratios P/Book
Names of Regions Name Basic 1.1 x
Region 1 Idaho Power Company (IPC)
Region 2 Idacorp Financial Services (IFS)Criteria Multiple 2010ERow #Multiple Analysis
Region 3 Idacorp Energy (IE) Ratios
Per Share Estimates Capital Structure Cost of Capital
Net Asset Value Cash Flow Valuation
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 $38.86 497 N/A
Basic Shares Out N/A 48.7 166 N/A
2008 15.5 x 9.3 x 10.3 x N/M 199.3 x P/E 13.2 x $2.72 174 $36.00
2009 12.8 x 4.7 x 9.1 x 24.7 x 20.2 x P/CF 6.6 x $5.48 363 $36.00
2010E 12.4 x 6.1 x 7.3 x N/M N/M EV/EBITDA 8.6 x $8.72 190 $36.00
2011E 12.2 x 6.1 x 6.9 x N/M N/M Average $36.00
Sources: Company reports; RBC Capital Markets estimates; Lasan Johong [phone] [e-mail]; Emily Christy [phone], [e-mail]; Ella Vuernick [phone], [e-mail]
IDACORP, Inc.February 23, 2010
5
IDA 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2011
SUMMARY FINANCIALS ($ Millions)Q1A Q2A Q3A Q4A 2008 Q1A Q2A Q3A Q4A 2009 Q1E Q2E Q3E Q4E 2010 2011E
GENERATION (MWh)3,642.0 3,493.3 4,035.0 3,201.1 14,371.3 3,549.6 4,119.8 4,144.5 3,140.4 14,954.3 3,502.5 3,697.9 3,440.6 3,140.4 13,781.4 13,866.6
INCOME STATEMENT
TOTAL NET REVENUE $213.4 $230.2 $299.7 $217.0 $960.4 $229.1 $243.6 $324.5 $252.6 $1,049.8 $196.4 $238.8 $316.9 $241.4 $993.6 $1,168.4
DOC (Incl. Cost of Fuel and Plant O&M)$95.9 $103.8 $109.9 $107.4 $416.9 $129.4 $137.4 $137.1 $149.1 $553.1 $103.0 $120.4 $118.7 $125.7 $467.8 $530.2
Other Direct Operating Costs $50.1 $54.9 $84.3 $60.9 $250.2 $37.9 $30.2 $79.1 $34.5 $181.6 $19.1 $23.3 $54.0 $26.8 $123.1 $216.9
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 $0.0 $0.0 $0.0
DIRECT OPERATING COSTS $146.0 $158.6 $194.3 $168.3 $667.1 $167.3 $167.6 $216.2 $183.6 $734.7 $122.1 $143.7 $172.7 $152.5 $590.9 $747.0
GROSS PROFIT $67.5 $71.6 $105.4 $48.8 $293.3 $61.8 $76.0 $108.3 $69.0 $315.1 $74.3 $95.2 $144.2 $88.9 $402.7 $421.3
Depreciation, Amortization and Expl. Exp.$25.8 $26.6 $25.7 $24.0 $102.1 $26.0 $26.8 $28.8 $29.0 $110.6 $26.8 $27.7 $29.8 $30.0 $114.3 $119.0
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 $0.0 $0.0 $0.0
TOTAL OPERATING COSTS $171.7 $185.3 $220.0 $192.3 $769.2 $193.2 $194.4 $245.1 $212.6 $845.3 $148.9 $171.4 $202.5 $182.5 $705.3 $866.1
OPERATING INCOME $41.7 $45.0 $79.7 $24.8 $191.2 $35.8 $49.2 $79.4 $40.0 $204.5 $47.5 $67.4 $114.4 $58.9 $288.3 $302.3
Non-Operating Expenses ($0.0)($1.0)($4.5)$5.5 ($0.0)($6.6)($0.6)($5.6)$3.2 ($9.6)($6.4)($3.3)($2.8)$2.2 ($10.3)($15.3)
EARNINGS BEFORE INTEREST & TAXES $41.8 $45.9 $84.2 $19.3 $191.2 $42.4 $49.8 $85.0 $36.8 $214.0 $53.9 $70.7 $117.2 $56.8 $298.6 $317.6
Net Interest Expense, Incl. TCP Dividend $17.5 $17.1 $18.5 $20.0 $73.1 $17.5 $18.2 $18.6 $18.6 $72.8 $23.1 $24.3 $23.8 $22.9 $94.2 $99.5
PRE-TAX INCOME $24.3 $28.9 $65.7 ($0.7)$118.1 $25.0 $31.6 $66.4 $18.3 $141.2 $30.8 $46.4 $93.4 $33.9 $204.5 $218.1
Income Tax Expense $5.6 $6.9 $15.8 ($9.1)$19.2 $6.8 $5.2 $13.7 ($3.3)$22.4 $10.8 $16.2 $32.7 $11.9 $71.6 $76.3
Minority Interest, Pref. Dividend & Other $0.0 $0.0 $0.0 $0.0 $0.0 ($0.2)$0.1 $0.2 ($0.1)$0.0 ($0.1)($0.1)($0.1)($0.1)($0.4)($0.4)
NET INCOME PRE-X-ITEMS $21.7 $15.7 $51.7 $8.9 $98.0 $18.9 $27.5 $54.5 $23.5 $124.4 $20.1 $30.3 $60.8 $22.1 $133.3 $142.1
Extraordinary Items & Other $0.0 ($1.8)$0.0 $1.4 ($0.4)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
NET INCOME $21.7 $17.5 $51.7 $7.4 $98.4 $18.9 $27.5 $54.5 $23.5 $124.4 $20.1 $30.3 $60.8 $22.1 $133.3 $142.1
NET INCOME PRE-X-ITEMS PER SHARE $0.48 $0.35 $1.14 $0.19 $2.16 $0.40 $0.58 $1.16 $0.49 $2.64 $0.42 $0.63 $1.21 $0.44 $2.72 $2.75
Extraordinary Items & Other $0.00 ($0.04)$0.00 $0.03 ($0.01)$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
NET INCOME PER SHARE $0.48 $0.39 $1.14 $0.16 $2.17 $0.40 $0.58 $1.16 $0.49 $2.64 $0.42 $0.63 $1.21 $0.44 $2.72 $2.75
CASH FLOW STATEMENT
Adjustments to Revenue and Income $0.0 $0.0 ($3.8)($3.7)($7.4)$0.0 $9.9 ($1.2)$4.7 $13.5 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Depreciation, Amortization and Expl. Exp.$30.8 $32.5 $29.9 $29.2 $122.4 $31.2 $24.3 $31.1 $32.1 $118.6 $26.8 $27.7 $29.8 $30.0 $114.3 $119.0
Deferred Income Taxes $12.6 $4.2 ($0.7)($11.4)$4.7 $14.7 ($7.1)$7.2 $4.2 $19.0 $4.0 $4.0 $4.0 $4.0 $16.0 $16.0
Other Operating Cash Flow Items ($19.4)($5.7)($23.6)($6.5)($55.1)$16.8 $23.0 ($0.2)$24.9 $64.5 ($7.3)($7.3)($0.8)$20.5 $5.2 $5.3
Changes in Working Capital ($24.8)($15.9)$8.3 $6.0 ($26.4)($37.0)($11.3)$20.2 ($27.5)($55.6)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0
OPERATING CASH FLOW $20.9 $32.6 $61.9 $21.1 $136.5 $44.6 $66.2 $111.7 $62.0 $284.4 $43.6 $54.7 $93.9 $76.6 $268.8 $282.5
Cap. Ex., Acquisitions, Investments ($65.1)($57.2)($51.9)($37.4)($211.6)($50.4)($59.3)($52.0)($96.0)($257.7)($63.6)($63.5)($63.4)($63.5)($254.0)($257.7)
Proceeds from Sales $0.0 $6.5 $2.2 $0.1 $8.8 $9.8 $3.7 $0.7 $1.1 $15.3 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Other Investing Cash Flow Items $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 ($42.7)($42.8)($42.9)($42.9)($171.3)($167.7)
INVESTING CASH FLOW ($65.1)($50.7)($49.7)($37.3)($202.8)($40.6)($55.6)($51.3)($94.9)($242.4)($106.3)($106.3)($106.3)($106.3)($425.3)($425.3)
Net Equity Financing $2.2 $1.8 $8.2 $38.3 $50.6 $1.1 $2.5 $11.8 $7.6 $22.9 $0.0 $0.0 $80.0 $0.0 $80.0 $80.0
Net Debt Capital & Other Financing $55.3 $31.4 $163.2 ($176.4)$73.5 $90.7 ($71.6)($42.8)$67.0 $43.3 $48.9 $65.8 ($34.8)$27.0 $107.0 $124.4
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 $0.0 $0.0 $0.0
Common and Preferred Dividends ($13.5)($13.5)($13.5)($13.7)($54.2)($14.4)($13.9)($14.2)($14.4)($56.8)($14.2)($14.2)($15.0)($15.0)($58.4)($61.5)
Other Financing Cash Flow Items ($0.4)($0.0)($1.3)($0.9)($2.6)($0.9)($0.8)($2.6)($3.0)($7.3)$0.0 $0.0 $0.0 $0.0 $0.0 $0.0
FINANCING CASH FLOW $43.6 $19.7 $156.6 ($152.7)$67.2 $76.6 ($83.8)($47.7)$57.1 $2.1 $34.7 $51.6 $30.2 $12.0 $128.5 $142.8
CHANGE IN CASH ($0.6)$1.5 $168.8 ($168.9)$0.9 $80.3 ($73.1)$12.9 $24.1 $44.2 ($28.0)$0.0 $17.8 ($17.8)($28.0)$0.0
OP. CF BEFORE W/C PER SHARE $1.02 $1.08 $1.19 $0.33 $3.59 $1.74 $1.65 $1.94 $1.87 $7.21 $0.92 $1.15 $1.86 $1.52 $5.48 $5.47
BALANCE SHEET
Cash and Equivalents $7.4 $8.9 $57.7 $8.8 $8.8 $89.1 $16.0 $28.9 $53.0 $53.0 $25.0 $25.0 $42.8 $25.0 $25.0 $25.0
Accounts Receivables $74.4 $74.7 $83.7 $91.6 $91.6 $84.5 $83.9 $94.7 $86.9 $86.9 $86.9 $86.9 $86.9 $86.9 $86.9 $86.9
Inventory, Fuels and Materials $64.4 $74.0 $75.7 $67.0 $67.0 $66.7 $74.6 $72.9 $73.7 $73.7 $73.7 $73.7 $73.7 $73.7 $73.7 $73.7
Other Current Assets $323.1 $308.7 $299.4 $297.5 $297.5 $264.6 $274.6 $277.1 $292.1 $292.1 $292.1 $292.1 $292.1 $292.1 $292.1 $292.1
TOTAL CURRENT ASSETS $469.4 $466.3 $516.5 $464.8 $464.8 $505.0 $449.1 $473.7 $505.7 $505.7 $477.7 $477.7 $495.5 $477.7 $477.7 $477.7
TOTAL PP&E $2,649.0 $2,687.8 $2,717.2 $2,758.2 $2,758.2 $2,768.8 $2,794.5 $2,847.1 $2,917.0 $2,917.0 $2,996.5 $3,075.1 $3,151.6 $3,228.0 $3,228.0 $3,534.3
Other Long-term Assets $591.1 $594.5 $617.7 $799.8 $799.8 $795.9 $799.1 $796.5 $816.0 $816.0 $823.2 $830.4 $831.1 $810.5 $810.5 $804.7
TOTAL ASSETS $3,709.5 $3,748.6 $3,851.3 $4,022.8 $4,022.8 $4,069.7 $4,042.7 $4,117.3 $4,238.7 $4,238.7 $4,297.4 $4,383.2 $4,478.2 $4,516.2 $4,516.2 $4,816.8
Accounts Payables $302.0 $348.1 $270.1 $248.0 $248.0 $203.7 $145.1 $124.9 $137.6 $137.6 $137.6 $137.6 $137.6 $137.6 $137.6 $137.6
Short-term Debt & Current Portions $11.3 $8.6 $7.8 $86.5 $86.5 $81.5 $83.5 $84.1 $9.3 $9.3 $198.5 $228.5 $249.0 $279.0 $279.0 $206.9
Other Current Liabilities $100.5 $95.2 $108.5 $61.1 $61.1 $75.6 $62.0 $86.0 $71.3 $71.3 $71.3 $71.3 $71.3 $71.3 $71.3 $71.3
TOTAL CURRENT LIABILITIES $413.9 $452.0 $386.5 $395.7 $395.7 $360.8 $290.6 $295.0 $218.2 $218.2 $407.4 $437.4 $457.9 $487.9 $487.9 $415.8
Long-term Debt and Other Obligations $1,155.3 $1,153.5 $1,273.0 $1,183.5 $1,183.5 $1,279.5 $1,283.6 $1,282.9 $1,409.7 $1,409.7 $1,313.9 $1,349.7 $1,294.5 $1,291.4 $1,291.4 $1,487.9
Deferred Income Taxes $479.6 $468.9 $473.8 $515.7 $515.7 $511.3 $513.0 $529.0 $574.5 $574.5 $578.5 $582.5 $586.5 $590.5 $590.5 $606.5
Other Long-term Liabilities $443.2 $449.6 $447.3 $625.6 $625.6 $605.4 $625.0 $625.7 $634.8 $634.8 $590.4 $590.4 $590.4 $590.4 $590.4 $590.4
TOTAL LONG-TERM LIABILITIES $2,078.1 $2,072.0 $2,194.1 $2,324.7 $2,324.7 $2,396.2 $2,421.6 $2,437.6 $2,619.0 $2,619.0 $2,482.7 $2,522.5 $2,471.3 $2,472.2 $2,472.2 $2,684.7
Long-term Financings $0.0 $0.0 $0.0 $0.0 $0.0 $4.0 $4.1 $4.3 $4.2 $4.2 $4.1 $4.0 $3.9 $3.8 $3.8 $3.4
TOTAL LIABILITIES $2,492.0 $2,523.9 $2,580.6 $2,720.4 $2,720.4 $2,761.0 $2,716.3 $2,736.8 $2,841.4 $2,841.4 $2,894.2 $2,963.9 $2,933.1 $2,963.9 $2,963.9 $3,103.9
Equity and Additional Paid-in Capital $678.7 $682.1 $691.2 $729.6 $729.6 $731.8 $734.9 $747.4 $756.5 $756.5 $756.5 $756.5 $836.5 $836.5 $836.5 $916.5
Retained Earnings $545.9 $549.8 $588.0 $581.6 $581.6 $586.4 $599.7 $640.0 $649.2 $649.2 $655.1 $671.1 $716.9 $724.1 $724.1 $804.7
Other Stockholders' Equity ($7.2)($7.3)($8.5)($8.7)($8.7)($9.5)($8.2)($7.0)($8.3)($8.3)($8.3)($8.3)($8.3)($8.3)($8.3)($8.3)
TOTAL STOCKHOLDERS' EQUITY $1,217.5 $1,224.6 $1,270.7 $1,302.4 $1,302.4 $1,308.7 $1,326.4 $1,380.5 $1,397.3 $1,397.3 $1,403.2 $1,419.3 $1,545.1 $1,552.2 $1,552.2 $1,712.8
TOTAL LIABILITIES & EQUITY $3,709.5 $3,748.6 $3,851.3 $4,022.8 $4,022.8 $4,069.7 $4,042.7 $4,117.3 $4,238.7 $4,238.7 $4,297.4 $4,383.2 $4,478.2 $4,516.2 $4,516.2 $4,816.8
Sources: Company reports; RBC Capital Markets estimates. Lasan Johong - [phone]; [e-mail]
IDACORP, Inc.February 23, 2010
6
Required Disclosures
Conflicts 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.
The author is employed by RBC Capital Markets Corp., a securities broker-dealer with principal offices located in New York, USA.
Explanation of RBC Capital Markets Equity 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] 591 49.60 180 30.46
HOLD[SP] 536 45.00 123 22.95
SELL[U] 65 5.50 8 12.31
IDACORP, Inc.February 23, 2010
7
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), a former list called the Private Client Prime Portfolio (RL 4), the
Prime Income List (RL 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.
Conflicts Policy
RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request. To
access our current policy, clients should refer to
https://www.rbccm.com/global/file-414164.pdf
or send a request to RBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower,
Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.
Dissemination of Research and Short-Term Trading Calls
RBC Capital Markets endeavours to make all reasonable efforts to provide research simultaneously to all eligible clients, having
regard to local time zones in overseas jurisdictions. RBC Capital Markets' research is posted to our proprietary websites to ensure
eligible clients receive coverage initiations and changes in rating, targets and opinions in a timely manner. Additional distribution may
be done by the sales personnel via email, fax or regular mail. Clients may also receive our research via third party vendors. Please
contact your investment advisor or institutional salesperson for more information regarding RBC Capital Markets research.
RBC Capital Markets also provides eligible clients with access to a database which may contain Short-Term trading calls on certain of
the subject companies for which it currently provides equity research coverage. The database may be accessed via the following
hyperlink https://www2.rbccm.com/cmonline/index.html. The information regarding Short-Term trading calls accessible through the
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
correction.
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
subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or
indirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.
Disclaimer
RBC Capital Markets is the business name used by certain subsidiaries of Royal Bank of Canada, including RBC Dominion Securities Inc., RBC Capital Markets
Corporation, Royal Bank of Canada Europe Limited and Royal Bank of Canada - Sydney Branch. The information contained in this report has been compiled by RBC
IDACORP, Inc.February 23, 2010
8
Capital Markets from sources believed to be reliable, but no representation or warranty, express or implied, is made by Royal Bank of Canada, RBC Capital Markets, its
affiliates or any other person as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute RBC Capital Markets'
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
constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and has been prepared
without regard to the individual financial circumstances and objectives of persons who receive it. The investments or services contained in this report may not be
suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. This
report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed,
and a loss of original capital may occur. RBC Capital Markets research analyst compensation is based in part on the overall profitability of RBC Capital Markets, which
includes profits attributable to investment banking revenues. Every province in Canada, state in the U.S., and most countries throughout the world have their own laws
regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, the securities
discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as
securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that
jurisdiction. To the full extent permitted by law neither RBC Capital Markets nor any of its affiliates, nor any other person, accepts any liability whatsoever for any
direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied
by any means without the prior consent of RBC Capital Markets.
Additional information is available on request.
To U.S. Residents:
This publication has been approved by RBC Capital Markets Corporation (member FINRA, NYSE), which is a U.S. registered broker-dealer and which accepts
responsibility for this report and its dissemination in the United States. Any U.S. recipient of this report that is not a registered broker-dealer or a bank acting in a broker
or dealer capacity and that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report, should contact and place
orders with RBC Capital Markets Corporation.
To Canadian Residents:
This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution in
Ontario, an Accredited Investor in British Columbia or Alberta or a Sophisticated Purchaser in Quebec (or similar permitted purchaser in any other province) and that
wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report should contact and place orders with RBC Dominion
Securities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.
To U.K. Residents:
This publication has been approved by Royal Bank of Canada Europe Limited ('RBCEL') which is authorized and regulated by Financial ServicesAuthority ('FSA'), in
connection with its distribution in the United Kingdom. This material is not for general distribution in the United Kingdom to retail clients, as defined under the rules of
the FSA. However, targeted distribution may be made to selected retail clients of RBC and its affiliates. RBCEL accepts responsibility for this report and its
dissemination in the United Kingdom.
To Persons Receiving This Advice in Australia:
This material has been distributed in Australia by Royal Bank of Canada - Sydney Branch (ABN 86 076 940 880, AFSL No. 246521). This material has been prepared
for general circulation and does not take into account the objectives, financial situation or needs of any recipient. Accordingly, any recipient should, before acting on
this material, consider the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisition or
possible acquisition of a particular financial product, a recipient in Australia should obtain any relevant disclosure document prepared in respect of that product and
consider that document before making any decision about whether to acquire the product.
To Hong Kong Residents:
This publication is distributed in Hong Kong by RBC Investment Services (Asia) Limited and RBC Investment Management (Asia) Limited, licensed corporations
under the Securities and Futures Ordinance or, by Royal Bank of Canada, Hong Kong Branch, a registered institution under the Securities and Futures Ordinance. This
material has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of any recipient. Hong Kong persons
wishing to obtain further information on any of the securities mentioned in this publication should contact RBC Investment Services (Asia) Limited, RBC Investment
Management (Asia) Limited or Royal Bank of Canada, Hong Kong Branch at 17/Floor, Cheung Kong Center, 2 Queen's Road Central, Hong Kong (telephone number
is 2848-1388).
To Singapore Residents:
This publication is distributed in Singapore by RBC (Singapore Branch) and RBC (Asia) Limited, registered entities granted offshore bank status by the Monetary
Authority of Singapore. This material has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of any
recipient. You are advised to seek independent advice from a financial adviser before purchasing any product. If you do not obtain independent advice, you should
consider whether the product is suitable for you. Past performance is not indicative of future performance.
®Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license.
Copyright © RBC Capital Markets Corporation 2010 - Member SIPC
Copyright © RBC Dominion Securities Inc. 2010 - Member CIPF
Copyright © Royal Bank of Canada Europe Limited 2010
Copyright © Royal Bank of Canada 2010
All rights reserved
IDACORP, Inc.February 23, 2010