IDA note 04 04 13.pdf

Sidoti & Company, LLC
Member FINRA & SIPC
Required disclosures appear in the Appendix.
Morning Meeting Note

317 Madison Ave
New York, NY 10017
[phone]
[phone]
www.sidoti.com
Sidoti & Company, LLC © Copyright 2013
IDACORP Inc. (IDA-$47.19) NEUTRAL
Company Update Target: $47
Michael Klein [phone] ([e-mail]) April 4, 2013
Market Cap (Mil) $2,365
Avg. Daily Trading Volume 181,000
Shares Out (Mil) 50.143
Float Shares (Mil) 49.473
Institutional Holdings 69%
Dividend $1.52
Dividend Yield 3.2%

Price to Book Value 1.5x
Return on Equity (2014E) 8.9%
LT Debt to Total Capital 47%
5-ear EPS Growth Rate Projection 4%
52-Week Range (NYSE) 49-38
Russell 2000 919
Short Interest (Mil) 1.055
2011 2012 2013E 2014E
OLD NEW OLD NEW
Mar. $0.60 $0.50 $0.50 $0.51
June 0.42 0.71 0.60 0.62
Sep. 1.15 1.84 1.81 1.87
Dec. 0.18 0.33 0.32 0.34

EPS $2.35 $3.37 $3.23 $3.32

P/E 14.6x 14.2x
Note: 2011 EPS exclude a $1.01 benefit from tax accounting method change and ADITC reversal. 2011-2014E EPS include $0.08 in annual stock-based
compensation expense. The Russell 2000 Index includes IDACORP. Sum of quarterly EPS may not equal full year total due to rounding and/or changes in share
count. NC = Not covered by Sidoti & Company, LLC.
Yea 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E
Rev.(Mil.) $842.9 $926.3 $879.4 $960.4 $1049.8 $1036.0 $1026.8 $1026.8 $1133.0 $1158.3
GAAP EPS $2.02 $2.33 $1.86 $2.17 $2.64 $2.95 $3.36 $3.37 $3.23 $3.32
Dividend $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.37 $1.56 $1.71
Description: IDACORP Inc. (www.idacorpinc.com) is a holding company that operates through a regulated utility segment, Idaho Power
Company, and two unregulated arms: Ida-West Energy, which focuses on independent power production, and IDACORP Financial
Services (IFS), which manages tax-advantaged real estate investments. The utility serves 496,000 customers in Idaho and Oregon.
Headquarters are in Boise, ID.
Colder Weather Should Benefit 1Q:13 Results, But Focus Remains On Economic Pick-Up In
Service Territory; Maintain NEUTRAL Rating And $47 Price Target
• A 19% increase in heating degree days should aid results in 1Q:13, as warmer weather in 1Q:12 resulted in a 10%
drop in degree days.
• That said, our focus remains on the economic pick-up in the Boise, ID service territory. Updates to the 2011
Integrated Resource Plan (IRP) project an improving economy, albeit at a slower rate than initially expected.
• We think that the pace of economic improvement will dictate whether Idaho Power needs to use tax credits to
maintain an Idaho jurisdictional ROE of 9.5%. At this time, we do not assume any tax credits will be used in 2013.
• We think valuation is fair as the stock is trading at more than 14x our 2014 EPS estimate of $3.32, which is in-line
with the 14x multiple we apply to our 2014 EPS estimate to derive our $47 price target.
• As a result, we maintain our NEUTRAL rating.

‰ We do not expect IDA to utilize any tax credits in 2013…. The Idaho Public Utility Commission (IPUC) allows Idaho
Power to accelerate the use of some $70 million in tax credits the utility has accumulated to maintain a minimum 9.5% ROE
in its jurisdiction. While this provides good earnings visibility, the need to tap into this resource would be concerning because
it means the earned ROE is sub-9.5%. A strong 2Q:12 kept Idaho Power from using these tax credits last year. We assume
slow and steady improvement in the local economy, combined with new rates and the addition of the Langley Gulch plant in
2012, will keep the earned ROE greater than the 9.5% threshold again in 2013.
Action Date Px Rating PT
Initiation 9/21/12 42.7 Neutral 45PT 11/2/12 44.8 47

IDACORP INC.
Sidoti & Company, LLC
2

‰ …but this is dependent on improvement in the local economy. Business activity is picking up in the Boise region,
highlighted by several businesses opening operations in the region and 1.1% commercial customer growth in 2012. We
remain concerned, however, about the pace of economic growth, as a slower-than-anticipated recovery is now projected
versus the 2011 IRP. Further, we see few rate base growth opportunities in the near term as the utility will not be in a peak-
hour capacity short position until 2016. While trends appear to be improving, we think this bears watching.

‰ We maintain our NEUTRAL rating and $47 price target. We think the stock is fairly valued trading at 14.2x our 2014 EPS
estimates of $3.32. We would become more optimistic if evidence emerged of a faster-than-expected improvement in the
economy or the opportunity for more rate base growth opportunities. Thus, we maintain our NEUTRAL rating on IDA. Our
price target is based on about 14x our 2014 EPS estimate of $3.32.

Key Risks Regulation Slowdown in local economy Interest rates

Exhibit 1: Unemployment Rate
6.0
6.5
7.0
7.5
8.0
8.5
Ja
n
-
1
2
Fe
b
-
1
2
Ma
r
-
1
2
Ap
r
-
1
2
Ma
y
-
1
2
Ju
n
-
1
2
Ju
l
-
1
2
Au
g
-
1
2
Se
p
-
1
2
Oc
t
-
1
2
No
v
-
1
2
De
c
-
1
2
Ja
n
-
1
3
Fe
b
-
1
3
Source: Idaho Department of Labor, Sidoti & Company, LLC
Se
a
s
o
n
a
l
l
y

A
d
j
u
s
t
e
d

Un
e
m
p
l
o
y
m
e
n
t

R
a
t
e

(
%
)
Idaho
U.S.
IDACORP INC.
Sidoti & Company, LLC
3

Table 1: IDACORP Income Statement(in thousands, except where noted)
2011 Mar Jun Sep Dec 2012 Mar E Jun E Sep E Dec E 2013E Mar E Jun E Sep E Dec E 2014E
Total operating revenue 1,026,756 241,140 254,701 334,019 250,802 1,080,662 257,135 262,481 341,075 272,275 1,132,966 260,204 268,775 351,698 277,660 1,158,337
Purchased power 163,336 34,277 45,178 71,570 45,910 196,935 32,563 46,533 64,413 49,583 193,092 32,238 44,207 65,701 50,079 192,224
Fuel expense 131,542 32,751 21,285 55,978 49,399 159,413 33,079 21,924 57,098 52,857 164,957 33,409 22,143 58,240 53,385 167,177
Power cost adjustment 38,497 9,008 (3,211) (42,871) (24,016) (61,090) 9,008 (3,211) (47,158) (24,016) (65,377) 9,008 (3,211) (49,516) (24,016) (67,735) Other O&M 338,640 78,515 86,005 89,968 94,545 349,033 79,299 90,305 91,767 103,055 364,427 82,471 92,111 93,603 105,116 373,301
Energy efficiency programs 37,663 4,477 8,084 8,410 6,329 27,300 4,522 8,327 8,662 6,645 28,156 4,703 8,410 8,749 6,712 28,573
Depreciation 119,789 30,542 29,879 31,607 31,913 123,941 32,232 32,554 32,880 33,209 130,875 33,541 33,876 34,215 34,557 136,189
Taxes other than income taxes 28,895 8,100 7,849 7,012 7,528 30,489 8,262 8,006 7,152 7,679 31,099 8,923 8,646 7,724 7,832 33,126
Other 13,042 1,127 832 1,002 9,078 12,039 800 800 800 800 3,200 800 800 800 800 3,200
Total Operating income- EBIT 155,352 42,343 58,800 111,343 30,116 242,602 57,371 57,243 125,460 42,463 282,538 55,112 61,793 132,182 43,195 292,281
EBITDA 275,141 72,885 88,679 142,950 62,029 366,543 89,603 89,798 158,340 75,672 413,413 88,653 95,669 166,397 77,752 428,470
Other income, net 30,105 6,593 6,571 2,928 10,550 26,642 2,290 2,263 1,870 2,214 8,638 2,227 2,184 1,769 2,139 8,319
Earnings (loss) of unconsolidated equity-method investments 798 1,419 (1,928) 1,304 (1,123) (328) - -
-
Total interest expense, net 71,526 17,205 17,436 19,401 19,827 73,869 21,303 19,986 19,879 19,707 80,875 19,926 20,393 20,296 20,116 80,730 Pre-tax income 114,729 33,150 46,007 96,174 19,716 195,047 38,358 39,520 107,452 24,970 210,301 37,413 43,584 113,655 25,218 219,870
Tax rate NM 25.1% 23.0% 4.1% 16.7% 13.4% 33.8% 23.8% 14.8% 35.0% 22.4% 31.0% 27.5% 15.2% 31.1% 22.2%
Income tax (benefit) expense (52,133) 8,333 10,569 3,910 3,301 26,113 12,960 9,413 15,906 8,738 47,017 11,591 11,998 17,325 7,835 48,749
Net Income 166,862 24,817 35,438 92,264 16,415 168,934 25,399 30,107 91,546 16,232 163,283 25,822 31,586 96,329 17,383 171,121
Adj. for (income) loss attributable to noncontrolling interests (169) 112 (137) (195) 47 (173) - -
Net income attributable to IDA 166,693 24,930 35,301 92,069 16,462 168,761 25,399 30,107 91,546 16,232 163,283 25,822 31,586 96,329 17,383 171,121
EPS, diluted 3.36 0.50 0.71 1.84 0.33 3.37 0.50 0.60 1.81 0.32 3.23 0.51 0.62 1.87 0.34 3.32
Dividend per share 1.20 0.33 0.33 0.33 0.38 1.37 0.38 0.38 0.38 0.42 1.56 0.42 0.42 0.42 0.46 1.71
Payout ratio 35.7% 40.6% 48.3% 51.6%
Shares outstanding, diluted 49,558 49,905 49,984 50,080 50,230 50,010 50,381 50,532 50,684 50,836 50,608 51,090 51,345 51,602 51,860 51,474
Margin Analysis
O&M as % of Sales 33.0% 32.6% 33.8% 26.9% 37.7% 32.3% 30.8% 34.4% 26.9% 37.8% 32.2% 31.7% 34.3% 26.6% 37.9% 32.2%
Operating Margin 15.1% 17.6% 23.1% 33.3% 12.0% 22.4% 22.3% 21.8% 36.8% 15.6% 24.9% 21.2% 23.0% 37.6% 15.6% 25.2%
EBITDA Margin 26.8% 30.2% 34.8% 42.8% 24.7% 33.9% 34.8% 34.2% 46.4% 27.8% 36.5% 34.1% 35.6% 47.3% 28.0% 37.0%Pretax Margin 11.2% 13.7% 18.1% 28.8% 7.9% 18.0% 14.9% 15.1% 31.5% 9.2% 18.6% 14.4% 16.2% 32.3% 9.1% 19.0%
Net Margin 16.3% 10.3% 13.9% 27.6% 6.5% 15.6% 9.9% 11.5% 26.8% 6.0% 14.4% 9.9% 11.8% 27.4% 6.3% 14.8%
YoY Change
Revenue -0.9% -4.1% 8.4% 7.9% 8.7% 5.3% 6.6% 3.1% 2.1% 8.6% 4.8% 1.2% 2.4% 3.1% 2.0% 2.2%
O&M 15.2% 11.1% 0.6% 6.4% -3.5% 3.1% 1.0% 5.0% 2.0% 9.0% 4.4% 4.0% 2.0% 2.0% 2.0% 2.4%Operating profit -21.8% -15.5% 71.4% 56.0% -7087.5% 56.2% 35.5% -2.6% 12.7% 41.0% 16.5% -3.9% 7.9% 5.4% 1.7% 3.4%
EBITDA -12.5% -8.4% 38.6% 40.8% 106.2% 33.2% 22.9% 1.3% 10.8% 22.0% 12.8% -1.1% 6.5% 5.1% 2.7% 3.6%
Pretax profit -19.1% -3.6% 165.6% 55.0% -349.3% 70.0% 15.7% -14.1% 11.7% 26.6% 7.8% -2.5% 10.3% 5.8% 1.0% 4.6%
Net income 17.1% -15.8% 68.9% -14.1% 18767.8% 1.2% 2.3% -15.0% -0.8% -1.1% -3.3% 1.7% 4.9% 5.2% 7.1% 4.8%
Pro forma EPS, diluted 13.9% -17.1% 67.3% -14.8% 18213.9% 0.3% 0.9% -15.6% -1.8% -2.6% -4.4% 0.3% 3.3% 3.4% 5.0% 3.0%
2011 EPS includes $56.9 million benefit from tax accounting method change, $6.8 million ADITC reversal and $18.1 million customer refund
Source: Company reports, Sidoti & Company, LLC estimates
Appendix
Required Disclosures

Sidoti & Company, LLC
4

IDACORP Inc. (IDA-$47.19) NEUTRAL Target: $47 April 4, 2013

Key Risks Regulation Slowdown in local economy Interest rates

Valuation:
‰ We maintain our NEUTRAL rating and $47 price target. We think the stock is fairly valued trading at 14.2x our 2014
EPS estimates of $3.32. We would become more optimistic if evidence emerged of a faster-than-expected improvement in
the economy or the opportunity for more rate base growth opportunities. Thus, we maintain our NEUTRAL rating on IDA.
Our price target is based on about 14x our 2014 EPS estimate of $3.32.

Required Disclosures
The Sidoti & Company, LLC (Sidoti) Equity Research rating system consists of BUY and NEUTRAL recommendations. BUY
suggests capital appreciation of at least 25% from initiation of coverage over the next 12 months, while NEUTRAL denotes that a
stock is not likely to provide similar gains over a 12-month period. As of 04/04/13, Sidoti provides research on 513 companies, of
which 342 (66%) are rated BUY and 171 (34%) are rated NEUTRAL. Of the BUYS, Sidoti has received investment banking
income from 3 companies (0.88%). Of the NEUTRALS, Sidoti has received investment banking income from 1 company (0.58%).
Of the NEUTRALS, 59 trade above our price targets. Of the NEUTRALS, 68 trade above our price targets. A risk to our price
target is that the analyst’s estimates or forecasts may not be met. This report contains forward-looking statements, which involve
risks and uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that may cause such
a difference include, but are not limited to, those discussed in the “Risk Factors” section in the SEC filings available in electronic
format through SEC Edgar filings at www.sec.gov. The research analyst certifies that this report accurately reflects his/her
personal views about the subject securities and issuers and that none of the research analyst's compensation was, is or will be
directly or indirectly related to the analyst's specific recommendations or views contained in this research report. Sidoti does NOT
own securities of the issues described herein. Sidoti policy does not allow an analyst or a member of their household to own
shares in any company that he/she covers. Sidoti policy does not allow employees or household members to serve as an officer
or director of a covered company. Sidoti does not make a market in any securities. Sidoti has a non-research Capital Markets
employee that will seek compensation for investment banking services from this company. Sidoti employees, including research
analysts, receive compensation that is based in part upon the overall performance of the firm, including revenues generated by
Sidoti’s investment banking activities, but compensation is not directly related to investment banking revenues.

Other Disclosures

This report is for information purposes only and is not intended as an offer to sell or a solicitation to buy securities. Sidoti does not
maintain a predetermined schedule for publication of research and will not necessarily update this report. The stock rating on this
report reflects the analyst’s recommendation based on a 12 month period. Based on published near-term earnings estimates, the
analyst’s short-term opinion may be different from what is published in this report. Information contained herein is based on
sources we believe to be reliable but we do not guarantee their accuracy. Prices and opinions concerning the composition of
market sectors included in this report reflect the judgments as of this date and are subject to change without notice. It should be
presumed that the analyst who authored this report has had discussions with the subject company to ensure factual accuracy
prior to publication. This report was prepared for market professionals and institutional investor customers. Market professionals
Action Date Px Rating PTInitiation 9/21/12 42.7 Neutral 45
PT 11/2/12 44.8 47

Appendix Continued

Sidoti & Company, LLC
5

and institutional investors should consider this report as only a single factor in making their investment decisions. This research
report is not a substitute for the exercise of your independent judgment. At times, Sidoti may be in possession of material non-
public information, none of which is used in the preparation of our research. Sidoti maintains and enforces written policies and
procedures reasonably designed to prevent any controlling persons, officers (or persons performing similar functions), or
employees of Sidoti from influencing the activities of research analysts and the content of research reports prepared by the
research analyst. Reprints of Sidoti & Company, LLC reports are prohibited without permission. Additional information is available
upon request.