COC RBC-May-6-2010.pdf

PRICE TARGET REVISION | COMMENT
MAY 6, 2010
IDACORP, Inc.(NYSE: IDA)
IDA caught by the safety net in 1Q10
Sector Perform
Above Average Risk
Price:33.86
Shares O/S (MM):47.8
Dividend:1.20
NAVPS:37.00
Debt to Cap:50%
Price Target:37.00 ­36.00
Implied All-In Return:13%
Market Cap (MM):1,619
Yield:3.5%
P/NAVPS:0.9x
Priced at market close on May 6, 2010 ET.
IDA reported 1Q10 adjusted EPS of $0.34 vs. consensus of
$0.41 and our estimate of $0.42
Maintaining Sector Perform rating, increasing target price to $37 from $36
IDA's rate case settlement support mechanism kicked into gear to ensure a 9.5%
ROE for the year despite otherwise poor quarter results. However, having to use
this catch-all support reflects the underlying problems with the base rates. In the
near-term earnings stability should keep IDA performing in line with its peers,
but our concerns in the longer term from a regulatory perspective remain. The
infrastructure growth initiatives of the company are only beneficial to
shareholders with a proper rate structure in place.
Weak quarter on mild weather, timing.Although other utilities have reported
weather-normalized increases in sales volumes, conditions in ID have yet to
improve. Sales declined ~5%, with most of the decrease coming from residential
customers. Usage per customer dropped 9% for the same segment, reflecting
milder weather and energy efficiency. Hydrology for the quarter was favorable
compared to 1Q09, but expected to be weaker for the full year. O&M increased
due to the timing of Bridger Coal expense and higher DD&A from the smart
metering initiative.
Rate Case floor ROE mechanism enacted.IDA recorded $4.5MM in
amortization of deferred investment tax credits. Per the settlement agreement, in
2010 and 2011 the company may amortize up to $25MM per year up to $45MM
in total in order to meet a minimum ROE of 9.5% for the year. While we remain
uneasy with this quick-fix short term regulatory structure, the degree to which
IDA uses the amortization mechanism does provide an easy ROE metric for the
commission to examine when the next rate case is under review.
ID economy remains challenged, but sentiment is bullish.Unemployment in
ID was 9.4% in March as compared to the national average of 9.7% and
represented the first decrease since December 2006. In the Boise area, rates have
declined from January's peak of 10.8% to 9.9%. With expected growth in the
technology sector, ID remains well-positioned for economic recovery.
Adjusting estimates based on quarter.IDA maintained its 2010 guidance of
$2.65-$2.80. We are updating our estimates to $2.67 from $2.72 for 2010, $2.73
from $2.75 for 2011, and introducing 2012E of $2.63.
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 2009A 2010E 2011E 2012E
Adj EPS - FD 2.64 2.67 2.73 2.63
Prev.2.72 2.75
P/AEPS 12.8x 12.7x 12.4x 12.9x
Adj CFPS - FD 7.21 5.87 5.36 5.39
Prev.5.48 5.47
P/ACFPS 4.7x 5.8x 6.3x 6.3x
EBITDA (MM) 330.0 396.0 430.0 450.0
Prev.413.0 437.0
FCFPS - FD 2.58 (0.19) (1.57) 4.46
Prev.(1.90) (1.39)
P/FCF 13.1x NM NM 7.6x
Adj EPS - FD Q1 Q2 Q3 Q4
2009 0.40A 0.58A 1.16A 0.49A
2010 0.35A 0.61E 1.20E 0.48E
Prev.0.42E 0.63E 1.21E 0.44E
Adj CFPS - FD
2009 1.74A 1.65A 1.94A 1.87A
2010 1.58A 1.28E 1.87E 1.15E
Prev.0.92E 1.15E 1.86E 1.52E
EBITDA (MM)
2009 69.0A 78.0A 116.0A 68.0A
2010 66.0A 95.0E 146.0E 89.0E
Prev.81.0E 98.0E 147.0E 87.0E
All values in USD unless otherwise noted.
For Required Conflicts Disclosures, see Page 6.
2
Details
Decoupling pilot extended, not affirmed
ID regulators decided to continue IDA's fixed-cost adjustment mechanism for two more years before determining its permanency.
While it was agreed that IDA's spending on efficiency programs increased since the pilot was enacted, commissioners had difficulty in
correlating reduced usage to this mechanism. While we believe that decoupling is an appropriate methodology for insulating utilities
from events, such as weather, that are beyond their control, the level of the fixed cost charge must be realistic and IDA has struggled
with regulators on this issue. The company expects the program to become a permanent part of the regulatory structure, but the
commission has once again opted for a short-term extension rather than creating a permanent regulatory mechanism. With an expected
rate case filing already on the horizon, 2012 looks to be a busy regulatory year in ID.
Rate Case Settlement recap:
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 31st, 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 of a rate case.
Valuation
Our target price and our calculated net-asset-value (CNAV) is $37. 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 12.3x based on a dynamic WACC with an initial rate of 7.28%. 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.May 6, 2010
3

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[phone]

For more information or to register for this conference

Please contact your RBC Capital Markets Representative.

This conference is by invitation only.

IDACORP, Inc.May 6, 2010
4
Ticker Symbol IDA
Year Quarter EPS Oper. CF EBITDA FCF EFCF Capital Type Amount %Type % of Total
Assumptions Rate 03/2010 ($MM)
2009 Q1A $0.40 $1.74 $69 $0.43 $2.00 Equity Capital $1,402.9 50%Equity 5.26%
DCF Start Year 2010 2009 Q2A $0.58 $1.65 $78 $0.64 ($1.31)Preferred Stock $0.0 0%Preferred 0.00%
DCF Start Month 4 2009 Q3A $1.16 $1.94 $116 $1.67 $0.32 Total Debt $1,422.2 50%Debt 2.01%
Current Beta of Company 0.80 2009 Q4A $0.49 $1.87 $68 ($0.15)$0.65 Total $2,825.1 100% WACC 7.28%
Static or Variable Beta (S/V)V Total 5 $2.64 $7.21 $330 $2.58 $1.66
Normalized Long-Term Risk-free Rate 5.00%
Market Return 12.00%2010 Q1E $0.35 $1.58 $66 $1.05 $0.02 Terminal Value Multiple Terminal Value Multiple
Current Equity Discount Rate 10.60%2010 Q2E $0.61 $1.27 $95 ($0.64)($0.04)Multiple of FCF 12.3 x Multiple of EFCF 11.4 x
Current Cost of Preferred Stock 0.00%2010 Q3E $1.20 $1.87 $146 $0.07 $0.50
Current Cost of Debt Capital 6.15%2010 Q4E $0.48 $1.15 $89 ($0.65)($0.95)Term. Val. in Months 285 Term. Val. in Months 285
Current WACC 7.28% Total 5 $2.67 $5.87 $396 ($0.19)($0.49)
Basic Shares Outstanding (MM) 47.8 Category Valuation Category Valuation
Diluted Shares Outstanding (MM)47.9 03/2010
Assumed Tax Rate 35%Calc. Ent. Value $3,051.1 Equity FCF Value $1,798.2
Assumed Inflation Rate 3.50%Preferred Stock $0.0 Cash Balance @ Start
Minimum Cash Balance Required $25 2011E Total Debt ($1,380.8) of Valuation $41.4
Revolver Overflow Alert Total 5 $2.73 $5.36 $430 ($1.57)($0.84) Equity Value $1,670.4 Equity Value $1,839.6
Current Stock Price of IDA ($/Sh.)$33.86 Shares NAV Average Shares NAV
Current Book Value per Share $29.30 Basic $34.96 $36.74 Basic $38.51
Current Price-to-Book Ratio 1.2 x Diluted $34.88 $36.65 Diluted $38.42
Current Market Cap ($MM)$1,617.6 2012E
Current Market Ent. Value ($MM)$3,039.8 Total 5 $2.63 $5.39 $450 $4.46 $1.21 Ratios P/NAV P/NAV Ratios P/NAV
Current Market Ent. Value Per Sh. $63.63 Basic 1.0 x 0.9 x Basic 0.9 x
Current Book Ent. Value ($MM)$2,825.1 Diluted 1.0 x 0.9 x Diluted 0.9 x
Current Book Ent. Value Per Sh.$59.14
Ratios P/Book
Names of Regions Name Basic 1.2 x
Region 1 Idaho Power Company (IPC)
Region 2 Idacorp Financial Services (IFS)Criteria Multiple 2011ERow #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 $38.07 497 N/A
Basic Shares Out N/A 51.7 166 N/A
2009 12.8 x 4.7 x 9.2 x 24.7 x 20.4 x P/E 13.6 x $2.73 174 $37.00
2010E 12.7 x 5.8 x 7.7 x N/M N/M P/CF 6.9 x $5.36 363 $37.00
2011E 12.4 x 6.3 x 7.1 x N/M N/M EV/EBITDA 8.3 x $8.99 190 $37.00
2012E 12.9 x 6.3 x 6.8 x 14.3 x 28.0 x Average $37.00
Sources: Company reports; RBC Capital Markets estimates; Lasan Johong [phone] [e-mail]; Emily Christy [phone], [e-mail]; Ella Vuernick [phone], [e-mail]
IDACORP, Inc.May 6, 2010
5
IDA 2008 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2011 2012
SUMMARY FINANCIALS ($ Millions)2008 Q1A Q2A Q3A Q4A 2009 Q1A Q2E Q3E Q4E 2010E 2011E 2012E
GENERATION (MWh)14,371.3 3,549.6 4,119.8 4,144.5 3,140.4 14,954.3 3,480.0 3,697.9 3,440.6 3,140.4 13,758.9 13,866.6 15,101.5
INCOME STATEMENT
TOTAL NET REVENUE $960.4 $229.1 $243.6 $324.5 $252.6 $1,049.8 $253.0 $236.9 $315.6 $240.5 $1,046.0 $1,170.5 $1,237.8
DOC (Incl. Cost of Fuel and Plant O&M)$416.9 $129.4 $137.4 $137.1 $149.1 $553.1 $163.5 $121.9 $118.7 $122.7 $526.8 $537.4 $594.2
Other Direct Operating Costs $250.2 $37.9 $30.2 $79.1 $34.5 $181.6 $26.9 $23.2 $54.0 $26.7 $130.8 $216.9 $207.7
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 $667.1 $167.3 $167.6 $216.2 $183.6 $734.7 $190.3 $145.1 $172.7 $149.5 $657.6 $754.2 $801.9
GROSS PROFIT $293.3 $61.8 $76.0 $108.3 $69.0 $315.1 $62.6 $91.8 $142.9 $91.0 $388.4 $416.2 $436.0
Depreciation, Amortization and Expl. Exp.$102.1 $26.0 $26.8 $28.8 $29.0 $110.6 $28.6 $27.7 $29.8 $30.0 $116.1 $120.9 $131.3
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 $769.2 $193.2 $194.4 $245.1 $212.6 $845.3 $218.9 $172.8 $202.5 $179.5 $773.7 $875.1 $933.1
OPERATING INCOME $191.2 $35.8 $49.2 $79.4 $40.0 $204.5 $34.0 $64.1 $113.1 $61.1 $272.3 $295.4 $304.7
Non-Operating Expenses ($0.0)($6.6)($0.6)($5.6)$3.2 ($9.6)($2.1)($3.3)($2.8)$2.2 ($6.0)($13.3)($13.8)
EARNINGS BEFORE INTEREST & TAXES $191.2 $42.4 $49.8 $85.0 $36.8 $214.0 $36.2 $67.4 $115.9 $58.9 $278.3 $308.7 $318.5
Net Interest Expense, Incl. TCP Dividend $73.1 $17.5 $18.2 $18.6 $18.6 $72.8 $19.0 $22.5 $22.5 $22.0 $86.0 $92.4 $104.7
PRE-TAX INCOME $118.1 $25.0 $31.6 $66.4 $18.3 $141.2 $17.2 $44.9 $93.4 $36.9 $192.3 $216.2 $213.7
Income Tax Expense $19.2 $6.8 $5.2 $13.7 ($3.3)$22.4 $1.3 $15.7 $32.7 $12.9 $62.6 $75.7 $74.8
Minority Interest, Pref. Dividend & Other $0.0 ($0.2)$0.1 $0.2 ($0.1)$0.0 ($0.2)($0.2)($0.2)($0.2)($0.8)($0.8)($0.8)
NET INCOME PRE-X-ITEMS $98.0 $18.9 $27.5 $54.5 $23.5 $124.4 $17.0 $29.4 $60.9 $24.2 $131.4 $141.4 $139.7
Extraordinary Items & Other ($0.4)$0.0 $0.0 $0.0 $0.0 $0.0 $0.9 $0.0 $0.0 $0.0 $0.9 $0.0 $0.0
NET INCOME $98.4 $18.9 $27.5 $54.5 $23.5 $124.4 $16.1 $29.4 $60.9 $24.2 $130.5 $141.4 $139.7
NET INCOME PRE-X-ITEMS PER SHARE $2.16 $0.40 $0.58 $1.16 $0.49 $2.64 $0.35 $0.61 $1.20 $0.48 $2.67 $2.73 $2.63
Extraordinary Items & Other ($0.01)$0.00 $0.00 $0.00 $0.00 $0.00 $0.02 $0.00 $0.00 $0.00 $0.02 $0.00 $0.00
NET INCOME PER SHARE $2.17 $0.40 $0.58 $1.16 $0.49 $2.64 $0.34 $0.61 $1.20 $0.48 $2.65 $2.73 $2.63
CASH FLOW STATEMENT
Adjustments to Revenue and Income ($7.4)$0.0 $9.9 ($1.2)$4.7 $13.5 $2.4 $0.0 $0.0 $0.0 $2.4 $0.0 $0.0
Depreciation, Amortization and Expl. Exp.$122.4 $31.2 $24.3 $31.1 $32.1 $118.6 $30.4 $27.7 $29.8 $30.0 $117.9 $120.9 $131.3
Deferred Income Taxes $4.7 $14.7 ($7.1)$7.2 $4.2 $19.0 ($23.1)$4.0 $4.0 $4.0 ($11.1)$16.0 $16.0
Other Operating Cash Flow Items ($55.1)$16.8 $23.0 ($0.2)$24.9 $64.5 $49.9 ($0.2)($0.2)($0.2)$49.3 ($0.8)($0.8)
Changes in Working Capital ($26.4)($37.0)($11.3)$20.2 ($27.5)($55.6)$24.8 $0.0 $0.0 $0.0 $24.8 $0.0 $0.0
OPERATING CASH FLOW $136.5 $44.6 $66.2 $111.7 $62.0 $284.4 $100.5 $60.9 $94.5 $57.9 $313.8 $277.4 $286.2
Cap. Ex., Acquisitions, Investments ($211.6)($50.4)($59.3)($52.0)($96.0)($257.7)($73.7)($63.5)($63.4)($63.5)($264.1)($257.7)($77.0)
Proceeds from Sales $8.8 $9.8 $3.7 $0.7 $1.1 $15.3 $2.9 $0.0 $0.0 $0.0 $2.9 $0.0 $0.0
Other Investing Cash Flow Items $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 ($42.8)($42.9)($42.9)($128.6)($167.7)($41.3)
INVESTING CASH FLOW ($202.8)($40.6)($55.6)($51.3)($94.9)($242.4)($70.8)($106.3)($106.3)($106.3)($389.8)($425.3)($118.3)
Net Equity Financing $50.6 $1.1 $2.5 $11.8 $7.6 $22.9 $2.3 $0.0 $80.0 $0.0 $82.3 $80.0 $0.0
Net Debt Capital & Other Financing $73.5 $90.7 ($71.6)($42.8)$67.0 $43.3 ($28.7)$43.3 $36.7 $0.0 $51.3 $103.7 ($104.3)
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 ($54.2)($14.4)($13.9)($14.2)($14.4)($56.8)($14.5)($14.3)($15.1)($15.1)($59.1)($62.0)($63.5)
Other Financing Cash Flow Items ($2.6)($0.9)($0.8)($2.6)($3.0)($7.3)($0.3)$0.0 $0.0 $0.0 ($0.3)$0.0 $0.0
FINANCING CASH FLOW $67.2 $76.6 ($83.8)($47.7)$57.1 $2.1 ($41.2)$29.0 $101.6 ($15.1)$74.2 $121.7 ($167.9)
CHANGE IN CASH $0.9 $80.3 ($73.1)$12.9 $24.1 $44.2 ($11.6)($16.4)$89.7 ($63.5)($1.8)($26.2)$0.0
OP. CF BEFORE W/C PER SHARE $3.59 $1.74 $1.65 $1.94 $1.87 $7.21 $1.58 $1.27 $1.87 $1.15 $5.87 $5.36 $5.39
BALANCE SHEET
Cash and Equivalents $8.8 $89.1 $16.0 $28.9 $53.0 $53.0 $41.4 $25.0 $114.7 $51.2 $51.2 $25.0 $25.0
Accounts Receivables $91.6 $84.5 $83.9 $94.7 $86.9 $86.9 $82.4 $82.4 $82.4 $82.4 $82.4 $82.4 $82.4
Inventory, Fuels and Materials $67.0 $66.7 $74.6 $72.9 $73.7 $73.7 $72.5 $72.5 $72.5 $72.5 $72.5 $72.5 $72.5
Other Current Assets $297.5 $264.6 $274.6 $277.1 $292.1 $292.1 $285.5 $285.5 $285.5 $285.5 $285.5 $285.5 $285.5
TOTAL CURRENT ASSETS $464.8 $505.0 $449.1 $473.7 $505.7 $505.7 $481.9 $465.4 $555.2 $491.7 $491.7 $465.4 $465.4
TOTAL PP&E $2,758.2 $2,768.8 $2,794.5 $2,847.1 $2,917.0 $2,917.0 $2,961.0 $3,039.6 $3,116.2 $3,192.5 $3,192.5 $3,497.0 $3,484.1
Other Long-term Assets $799.8 $795.9 $799.1 $796.5 $816.0 $816.0 $779.5 $779.5 $779.5 $779.5 $779.5 $779.5 $779.5
TOTAL ASSETS $4,022.8 $4,069.7 $4,042.7 $4,117.3 $4,238.7 $4,238.7 $4,222.4 $4,284.6 $4,450.9 $4,463.7 $4,463.7 $4,742.0 $4,729.0
Accounts Payables $248.0 $203.7 $145.1 $124.9 $137.6 $137.6 $79.1 $79.1 $79.1 $79.1 $79.1 $79.1 $79.1
Short-term Debt & Current Portions $86.5 $81.5 $83.5 $84.1 $9.3 $9.3 $132.0 $129.4 $222.6 $252.6 $252.6 $173.2 $174.6
Other Current Liabilities $61.1 $75.6 $62.0 $86.0 $71.3 $71.3 $117.1 $117.1 $117.1 $117.1 $117.1 $117.1 $117.1
TOTAL CURRENT LIABILITIES $395.7 $360.8 $290.6 $295.0 $218.2 $218.2 $328.2 $325.7 $418.8 $448.8 $448.8 $369.5 $370.9
Long-term Debt and Other Obligations $1,183.5 $1,279.5 $1,283.6 $1,282.9 $1,409.7 $1,409.7 $1,290.2 $1,349.7 $1,293.3 $1,263.3 $1,263.3 $1,446.3 $1,340.6
Deferred Income Taxes $515.7 $511.3 $513.0 $529.0 $574.5 $574.5 $566.0 $570.0 $574.0 $578.0 $578.0 $594.0 $610.0
Other Long-term Liabilities $625.6 $605.4 $625.0 $625.7 $634.8 $634.8 $631.0 $617.4 $617.4 $617.4 $617.4 $617.4 $617.4
TOTAL LONG-TERM LIABILITIES $2,324.7 $2,396.2 $2,421.6 $2,437.6 $2,619.0 $2,619.0 $2,487.3 $2,537.1 $2,484.7 $2,458.7 $2,458.7 $2,657.7 $2,568.0
Long-term Financings $0.0 $4.0 $4.1 $4.3 $4.2 $4.2 $4.0 $3.8 $3.6 $3.4 $3.4 $2.6 $1.7
TOTAL LIABILITIES $2,720.4 $2,761.0 $2,716.3 $2,736.8 $2,841.4 $2,841.4 $2,819.5 $2,866.6 $2,907.1 $2,910.9 $2,910.9 $3,029.8 $2,940.6
Equity and Additional Paid-in Capital $729.6 $731.8 $734.9 $747.4 $756.5 $756.5 $759.8 $759.8 $839.8 $839.8 $839.8 $919.8 $919.8
Retained Earnings $581.6 $586.4 $599.7 $640.0 $649.2 $649.2 $650.8 $665.9 $711.7 $720.7 $720.7 $800.1 $876.3
Other Stockholders' Equity ($8.7)($9.5)($8.2)($7.0)($8.3)($8.3)($7.7)($7.7)($7.7)($7.7)($7.7)($7.7)($7.7)
TOTAL STOCKHOLDERS' EQUITY $1,302.4 $1,308.7 $1,326.4 $1,380.5 $1,397.3 $1,397.3 $1,402.9 $1,418.0 $1,543.8 $1,552.8 $1,552.8 $1,712.2 $1,788.4
TOTAL LIABILITIES & EQUITY $4,022.8 $4,069.7 $4,042.7 $4,117.3 $4,238.7 $4,238.7 $4,222.4 $4,284.6 $4,450.9 $4,463.7 $4,463.7 $4,742.0 $4,729.0
Sources: Company reports; RBC Capital Markets estimates. Lasan Johong - [phone]; [e-mail]
IDACORP, Inc.May 6, 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] 609 49.40 186 30.54
HOLD[SP] 557 45.20 133 23.88
SELL[U] 66 5.40 9 13.64
IDACORP, Inc.May 6, 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 endeavors 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' equity research is posted to our proprietary websites to ensure
eligible clients receive coverage initiations and changes in ratings, 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 SPARC on the Firm's proprietary INSIGHT website. SPARC contains
market color and commentary, and may also contain Short-Term Trade Ideas regarding the publicly-traded common equity of subject
companies on which the Firm currently provides equity research coverage. SPARC may be accessed via the following hyperlink:
www.rbcinsight.com. A Short-Term Trade Idea reflects the research analyst's directional view regarding the price of the subject
company's publicly-traded common equity in the coming days or weeks, based on market and trading events. A Short-Term Trade
Idea 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, as a result of the differing time horizons, methodologies and/or other
factors. 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.
Short-Term Trade Ideas are not ratings, nor are they part of any ratings system, and the Firm generally does not intend, nor undertakes
any obligation, to maintain or update Short-Term Trade Ideas. Securities and Short-Term Trade Ideas discussed in SPARC may not be
suitable for all investors and have not been tailored to individual investor circumstances and objectives, and investors should make
their own independent decisions regarding any securities or strategies discussed herein.
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.
IDACORP, Inc.May 6, 2010
8
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
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
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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
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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
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Securities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.
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wishing to obtain further information on any of the securities mentioned in this publication should contact RBC Investment Services (Asia) Limited, RBC Investment
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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.May 6, 2010