IDA022312 1.pdf

Please refer to pages 5-6 of this report for detailed disclosure and certification information.
* D. A. Davidson & Co. makes a market in this security.
Institutional Equity Research

IDACORP, INC.
February 23, 2012 IDA* – NYSE

Rating: Buy
Price: (2/23/12) $41.39
Price Targets: 12-18 month: $48.50
5-year: $56.00

Industry:
Utilities

James L. Bellessa, Jr., CFA
406.791.7230
[e-mail]

Michael Bates
Research Associate
406.791.7216
[e-mail]

Lowering Estimates but Reiterating Targets and BUY Rating
 IDACORP reported 4Q'11 EPS of $0.18, compared to $0.41 in 4Q'10. We were
forecasting $0.21, which matched the consensus estimate of three analysts.
Results were cut by more than half due largely to Idaho-jurisdictional customer
sharing mechanisms (-$0.38), partially offset by increased AFUDC and a tax
benefit. Full-year 2011 EPS was $3.36 versus $2.95 in 2010, with the major
drivers being a switch to the uniform capitalization method of taxation (+$1.15)
and customer sharing mechanisms that were triggered when the tax benefit
pushed the utility’s ROE above 10.5% in its Idaho service territory (-$0.62).
 Utility EPS of $0.19 for the quarter compared unfavorably with $0.39 in the
year-ago period due to the aforementioned combination of factors. (One of these
factors included the recording of an additional pension expense stipulated by
Idaho regulators as part of a year-end 2011 settlement agreement (-$0.26 of the
previously cited -$0.38)). Operationally, utility results declined modestly. Gross
margin (electric utility revenues before sharing mechanisms less power supply
expenses) declined 1% to $160 million, as lower electric revenues per average
customer were only partially offset by modestly higher customer counts and
electric usage. Non-regulated businesses and holding company activities
produced a 4Q’11 loss of $0.01 per share, compared to earnings of $0.03 per
share in 4Q’10, largely because IDACORP Financial Services slipped into the red.
 Lowering estimates. Management introduced a 2012 EPS guidance range of
$3.00-$3.15. Key to this forecast is the assumption the Langley Gulch power
plant will be commercially operating at mid-year 2012, with the utility allowed a
return concurrently with the plant’s start-up. To better align our model for the new
plant and a higher assumed tax rate, we are reducing our 2012 EPS from $3.25 to
$3.08. For 2013, we are reducing our EPS estimate from $3.45 to $3.20.
 BUY maintained. Our target price of $48.50 equates to ~15.4x the average of
our revised 2012 and 2013 EPS estimates. Over the past ten years, the shares of
IDA have been accorded an average 14.9x multiple of forward year earnings.
With the regulatory mechanism in Idaho assuring a minimum 9.5% ROE on
ending equity through 2014 and increasing earnings visibility, we believe the total
return potential for investors (including significant increases in the dividend over
the next three years) is very attractive and repeat our BUY rating.

Valuation Data
Long-term growth rate (E) 5%
Total Debt/Cap (12/31/11) 48.2% Cash per share (12/31/11) $0.56 Book value per share (12/31/11) $33.26 Dividend (yield) $1.32 (3.2%) Return on Equity (T-T-M) 10.5%

Trading Data
Shares outstanding (M) 49.8
Market Capitalization ($M) $2,063
52-week range $33.88 - $42.89
Average daily volume (3 mos.) (K) 246
Float 99%
Index Membership S&P 400

FY (Dec) 2011A 2012E Previous 2013E Previous
Revenue ($M) Q1 (Mar) $251 $259 E $263 n.a.n.a.
Q2 (Jun) $235 $242 E $246 n.a.n.a. Q3 (Sep) $310 $341 E $338 n.a.n.a.
Q4 (Dec) $231 $244 E $253 n.a.n.a.
$1,027 $1,086 E $1,100 $1,130 $1,148
Price/Revenue 2.0x 1.9x 1.9x
EPS Q1 (Mar) $0.60 $0.65 E $0.70 n.a.n.a.
Q2 (Jun) $0.42 $0.50 E $0.52 n.a.n.a.
Q3 (Sep) $2.16 $1.41 E NC n.a.n.a.
Q4 (Dec) $0.18 $0.51 E $0.62 n.a.n.a.
$3.36 $3.08 E $3.25 $3.20 $3.45
Price/EPS 12.3x 13.5x 12.9x
EBITDA ($M) Q1 (Mar) $86 $95 E NC n.a.n.a.
Q2 (Jun) $69 $85 E NC n.a.n.a.
Q3 (Sep) $109 $147 E $143 n.a.n.a.
Q4 (Dec) $46 $89 E $94 n.a.n.a.
$310 $415 E $417 $450 $451
EV/EBITDA 11.5x 8.6x 7.9x

D.A. Davidson & Co.
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Price Chart
Source: FactSet

Company Description:
Boise, ID -- IDACORP, Inc. is the holding company for the Idaho Power Company, an electric public utility that serves an approximate
24,000 square mile area in Southern Idaho and Eastern Oregon. Non-regulated subsidiaries include an affordable housing project
finance company and an operator of small hydroelectric generation projects.

Potential Risks:
 Regulatory/Legislative. Changes in the regulatory and/or legislative environment could influence the utility’s business practices,
credit ratings/access to capital markets, rate structure, cost recovery, and ability to achieve adequate returns on its investments.
 Economic and weather conditions. The firm’s financial results and operating strategy are sensitive to the economic climate
(including fluctuations in commodity prices) and regional weather conditions (including streamflows).
 Project delays or cancellations. Development of the utility’s projects could be delayed or cancelled for numerous reasons.
 Interest rates. Access to capital under competitive terms is critical to the company’s capital expenditure programs. Interest rate
increases may also lead to compression in utility stock prices.
 Litigation. Electric utilities commonly face legal challenges regarding their electric generating facilities, particularly coal-fired units.
These matters often stretch out over long time periods and can have unpredictable outcomes. In the event an adverse outcome
were handed down, the impact could be significant, despite the firm’s mitigation efforts.

34.00
36.00
38.00
40.00
42.00
IDACORP Inc. (IDA-US)
22-Feb-2011 to 23-Feb-2012 (Daily) High:42.89 Low: 33.88 Last: 41.39
03/01/11 04/01/11 05/02/11 06/01/11 07/01/11 08/01/11 09/01/11 10/03/11 11/01/11 12/01/11 01/02/12 02/01/12
0.4M
0.8M
1.2M
©FactSet Research Systems
Volume in millions
D.A. Davidson & Co.
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IDACORP, Inc. - Quarterly Financial Position

Source: Company reports

$ millions -- Fiscal year ends 12/31 2006 2007 2008 2009 2010 2011
Current Assets:
Cash And Cash Equivalents 9.9 8.0 8.8 53.0 228.7 27.8
Receivables from Customers 62.1 69.2 64.7 76.8 62.1 66.3
Other Receivables 11.9 11.0 10.3 13.0 10.2 8.2
Accrued Unbilled Revenues 31.4 36.3 43.9 51.3 48.0 46.4
Materials And Supplies 39.1 43.3 50.1 48.1 45.6 46.5
Fuel Stock 15.2 17.3 16.9 25.6 27.5 47.9
Prepayments 9.3 9.4 10.1 11.1 11.1 12.4
Deferred Income Taxes 28.0 25.7 37.6 31.8 10.7 16.2
Other Current Assets 59.7 ##46.7 ##23.9 ##(0.2)##16.8 ##39.3
Total Current Assets 266.5 266.7 266.3 310.4 460.6 311.0
Electric Plant:
In Service (At Original Cost) 3,583.7 3,796.3 4,030.1 4,160.2 4,332.1 4,466.9
Accumulated Provision For Depreciation (1,406.2) (1,468.8) (1,505.1) (1,558.5) (1,614.0) (1,677.6)
In Service - Net 2,177.5 2,327.5 2,525.0 2,601.6 2,718.0 2,789.3
Construction Work In Progress 210.1 257.6 207.7 289.2 417.0 591.5
Held For Future Use 2.8 3.4 6.3 7.2 7.1 7.0
Other Property, Net Of Accum. Depreciation 28.7 28.1 19.2 19.0 19.3 18.9
Property, Plant And Equipment - Net 2,419.1 2,616.6 2,758.2 2,917.0 3,161.4 3,406.6
Investments And Other Property 202.8 201.1 198.6 195.3 202.9 199.9
Regulatory Assets Associated With Taxes 423.5 449.7 696.3 720.4 756.6 953.1
Other Assets 133.1 ##119.3 ##103.5 ##95.6 ##94.5 ##90.0
Total Assets 3,445.1 3,653.3 4,022.8 4,238.7 4,676.1 4,960.6
Current Liabilities:0.0 0.0 0.0 0.0 0.0
Long-Term Debt Due Within One Year 95.1 11.5 86.5 9.3 122.6 101.1
Notes Payable 129.0 186.4 151.3 53.8 66.9 54.2
Accounts Payable 86.4 85.1 96.8 83.8 103.1 100.4
Taxes Accured 47.4 8.5 0.0 10.2 0.0 0.5
Interest Accrued 12.7 18.9 16.7 20.1 23.9 21.8
Uncertain Tax Positions 0.0 26.8 4.1 0.0 74.4 0.0
Other Current Liabilities 39.7 ##38.1 ##40.3 ##41.1 ##58.1 ##91.2
Total Current Liabilities 410.3 375.3 395.7 218.2 449.1 369.2
Long-Term Debt 928.6 1,156.9 1,183.5 1,409.7 1,488.3 1,387.6
Deferred Income Taxes 498.5 466.2 515.7 574.5 566.5 772.0
Regulatory Liabilities - Other 294.8 274.2 276.3 287.8 298.1 332.1
Other 188.6 ##168.9 ##344.9 ##347.0 ##338.2 ##438.0
Common Equity 1,124.2 1,207.3 1,302.4 1,397.3 1,532.1 1,657.7
Noncontrolling Interest 0.0 4.5 4.4 4.2 3.9 4.0
Total Capitalization And Liabilities 3,445.1 ##3,653.3 ##4,022.8 ##4,238.7 ##4,676.1 ##4,960.6
Common Shares Outstanding - End 43.8 45.1 46.9 47.9 49.3 49.8
Total Debt - End 1,152.8 1,354.8 1,421.2 1,472.8 1,677.8 1,543.3
Total Debt - Average 1,126.4 1,245.3 1,422.5 1,451.1 1,530.8 1,576.0
Book Value Per Share $25.65 $26.79 $27.76 $29.17 $31.09 $33.26
Current Ratio 0.6 0.7 0.7 1.4 1.0 0.8
Capital Structure:
Common Equity 49.4% 47.2% 47.9% 48.8% 47.8% 51.8%
Preferred Equity 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Debt (Short-Term & Long-Term)50.6% 52.8% 52.1% 51.2% 52.2% 48.2%
Capitalization 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
D.A. Davidson & Co.
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IDACORP, Inc. - Historical and Projected Operating Results

Source: Company reports and D.A. Davidson & Co. estimates
$ millions -- Fiscal year ends 12/31 1Q'10 2Q'10 3Q'10 4Q'10 2010 1Q'11 2Q'11 3Q'11 4Q'11 2011 1Q'12E 2Q'12E 3Q'12E 4Q'12E 2012E 2013E
Operating Revenues:
Electric Utility $252.5 $240.8 $308.5 $231.3 $1,033.1 $251.1 $233.9 $308.0 $229.7 $1,022.7 $257.6 $241.2 $340.3 $243.3 $1,082.5 $1,125.9
Diversified Operations 0.5 1.0 0.9 0.6 3.0 0.4 1.1 1.6 1.0 4.0 1.0 1.0 1.0 1.0 4.0 4.0
Total Revenues $253.0 $241.8 $309.4 $232.0 $1,036.0 $251.5 $235.0 $309.6 $230.6 $1,026.8 $258.6 $242.2 $341.3 $244.3 $1,086.5 $1,129.9
Operating Expenses:
Power Supply Expenses $106.7 $86.0 $92.6 $69.4 $354.7 $86.3 $71.6 $97.1 $78.3 $333.4 $86.1 $67.2 $83.7 $71.4 $308.4 $323.0
Utility Gross Margin before Provision for Sharing $145.8 $154.8 $215.8 $162.0 $678.4 $164.8 $162.3 $229.0 $160.4 $716.5 $171.5 $174.0 $256.6 $171.9 $774.1 $802.9
Other Operations And Maintenance 72.1 75.1 71.9 74.8 293.9 70.7 85.5 84.6 97.9 338.6 70.8 85.6 93.6 79.1 329.1 332.1
Energy Efficiency Programs 5.0 8.8 19.5 10.8 44.2 6.7 5.8 18.5 6.7 37.7 6.0 5.0 18.0 6.0 35.0 36.0
Depreciation 28.6 28.7 29.1 29.5 115.9 29.5 29.7 30.1 30.5 119.8 30.7 30.9 33.0 33.3 127.9 135.0
Taxes Other Than Income Taxes 5.7 5.8 5.6 6.9 24.0 7.2 7.2 7.3 7.2 28.9 7.2 5.3 5.8 5.4 23.7 24.8
Total Electric Utility Expenses $218.1 $204.4 $218.9 $191.4 $832.7 $200.3 $199.8 $237.6 $220.6 $858.4 $200.8 $194.1 $234.1 $195.1 $824.1 $850.9
Diversified Operations 0.8 0.7 1.5 1.6 4.6 1.1 0.9 0.6 1.6 4.1 1.2 1.2 1.2 1.2 4.8 4.8
Total Operating Expenses $218.9 $205.1 $220.4 $192.9 $837.4 $201.4 $200.7 $238.2 $222.2 $862.5 $202.0 $195.3 $235.3 $196.3 $828.9 $855.7
EBITD $69.0 $70.2 $122.8 $73.7 $335.7 $86.2 $69.1 $108.7 $46.1 $310.1 $94.7 $85.4 $146.6 $88.8 $415.5 $450.2
Operating Income $34.0 $36.6 $89.0 $39.0 $198.7 $50.1 $34.3 $71.4 $8.5 $164.2 $56.5 $47.0 $106.1 $48.0 $257.6 $274.2
Other Income 4.5 3.0 3.6 4.1 15.2 4.5 5.0 6.0 5.6 21.2 5.0 5.0 5.0 5.0 20.0 21.0
Earnings Of Uncons. Eq-Method Inv. (2.4) 0.4 3.4 1.6 3.0 (1.3) (4.4) 2.1 4.5 0.8 (1.0) (1.0) (1.0) (1.0) (4.0) (3.0)
Interest On Long-Term Debt 19.4 19.4 20.1 21.5 80.5 20.8 19.5 19.5 19.5 79.3 20.7 20.9 21.1 21.3 84.0 85.0
Other Interest (0.5) (2.0) (1.4) (1.5) (5.4) (1.9) (1.9) (2.1) (2.0) (7.8) (2.1) (2.1) (2.1) (2.1) (8.4) (8.0)
Income Before Income Taxes: $17.2 $22.6 $77.2 $24.7 $141.7 $34.4 $17.3 $62.0 $1.0 $114.7 $41.9 $32.2 $91.1 $32.8 $198.0 $215.2
Income Taxes: 1.3 (16.6) 10.1 4.5 (0.7) 4.9 (3.7) (45.4) (8.0) (52.1) 9.4 7.2 20.5 7.4 44.5 53.8
Effective Tax Rate 7.6% -73.6% 13.1% 18.1% -0.5% 14.2% -21.1% -73.1% -803.7% -45.4% 22.5% 22.5% 22.5% 22.5% 22.5% 25.0%
Income From Continuing Operations $15.9 $39.2 $67.1 $20.2 $142.5 $29.5 $21.0 $107.4 $9.0 $166.9 $32.5 $24.9 $70.6 $25.4 $153.4 $161.4
Noncontrolling Interest 0.2 (0.0) 0.0 0.2 0.3 0.3 (0.1) (0.3) 0.0 (0.2) 0.1 0.1 0.1 0.1 0.3 0.3
Net Income Available For Common $16.1 $39.2 $67.1 $20.4 $142.8 $29.7 $20.9 $107.1 $9.0 $166.7 $32.6 $25.0 $70.6 $25.5 $153.7 $161.7
Average Diluted Shares Outstanding 47.9 48.0 48.3 49.2 48.3 49.4 49.5 49.6 49.7 49.6 49.8 49.9 50.0 50.1 50.0 50.5
Diluted EPS $0.34 $0.82 $1.39 $0.41 $2.95 $0.60 $0.42 $2.16 $0.18 $3.36 $0.65 $0.50 $1.41 $0.51 $3.08 $3.20
Dividends Per Common Share $0.30 $0.30 $0.30 $0.30 $1.20 $0.30 $0.30 $0.30 $0.30 $1.20 $0.33 $0.33 $0.33 $0.33 $1.32 $1.50
Dividend Payout Ratio (ttm) 46.7% 42.9% 39.5% 40.6% 40.6% 37.2% 42.4% 33.4% 35.7% 35.7% 36.0% 36.1% 47.0% 42.9% 42.9% 46.9%
Dividend Growth 0.0% 0.0% 10.0% 13.6%
Ratio Analysis:
Gross Margin 57.8% 64.4% 70.1% 70.1% 65.8% 65.7% 69.5% 68.6% 66.1% 67.5% 66.7% 72.2% 75.5% 70.8% 71.6% 71.4%
Operating Margin 13.5% 15.1% 28.8% 16.8% 19.2% 19.9% 14.6% 23.1% 3.7% 16.0% 21.9% 19.4% 31.1% 19.6% 23.7% 24.3%
Pre-Tax Margin 6.8% 9.4% 25.0% 10.7% 13.7% 13.7% 7.4% 20.0% 0.4% 11.2% 16.2% 13.3% 26.7% 13.4% 18.2% 19.0%
Net Margin 6.3% 16.2% 21.7% 8.8% 13.8% 11.8% 8.9% 34.6% 3.9% 16.2% 12.6% 10.3% 20.7% 10.4% 14.1% 14.3%
D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400  Lake Oswego, Oregon 97035  [phone]  [phone]  www.dadavidson.com
Copyright D.A. Davidson & Co., 2012. All rights reserved.
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Required Disclosures
D.A. Davidson & Co. expects to receive, or intends to seek, compensation for investment banking services from this company in the
next three months.
D.A. Davidson & Co. is a full service investment firm that provides both brokerage and investment banking services. James L.
Bellessa, Jr., CFA and Michael Bates, the research analysts principally responsible for the preparation of this report, will receive
compensation that is based upon (among other factors) D.A. Davidson & Co.’s investment banking revenue. However, D.A. Davidson
& Co.’s analysts are not directly compensated for involvement in specific investment banking transactions.
We, James L. Bellessa, Jr., CFA and Michael Bates, attest that (i) all the views expressed in this research report accurately reflect our
personal views about the common stock of the subject company, and (ii) no part of our compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed in this report.

Ratings Information

D.A. Davidson & Co. Institutional Research Ratings Buy Neutral Underperform
Risk adjusted return potential azbycx
Over 15% total return
expected on a risk adjusted
basis over next 12-18 months
>0-15% return potential
on a risk adjusted basis over next 12-18 months
Likely to remain flat or lose
value on a risk adjusted basis over next 12-18 months
Distribution of Ratings (as of 12/31/11) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 59% 38% 3%
Corresponding Individual Investor Group Ratings Outperform Market Perform Underperform
and Distribution 73% 27% 0%
Distribution of Combined Ratings 60% 37% 3%
Distribution of companies from whom D.A. Davidson & Co. has received compensation for investment banking services in last 12 mos.
Institutional Coverage 3% 2% 0%
Individual Investor Group Coverage 0% 14% 0%
Distribution of Combined Investment Banking 3% 3% 0%

D.A. Davidson & Co.’s Institutional Research Rating Scale (maintained since 7/9/02): Buy, Neutral, Underperform

D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400  Lake Oswego, Oregon 97035  [phone]  [phone]  www.dadavidson.com
Copyright D.A. Davidson & Co., 2012. All rights reserved.
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Target prices are our Institutional Research Department’s evaluation of price potential over the next 12-18 months and 5 years, based
upon our assessment of future earnings and cash flow, comparable company valuations, growth prospects and other financial criteria.
Certain risks may impede achievement of these price targets including, but not limited to, broader market and macroeconomic
fluctuations and unforeseen changes in the subject company’s fundamentals or business trends.

Other Disclosures

Information contained herein has been obtained by sources we consider reliable, but is not guaranteed and we are not soliciting any
action based upon it. Any opinions expressed are based on our interpretation of data available to us at the time of the original
publication of the report. These opinions are subject to change at any time without notice. Investors must bear in mind that inherent in
investments are the risks of fluctuating prices and the uncertainties of dividends, rates of return and yield. Investors should also
remember that past performance is not necessarily an indicator of future performance and D.A. Davidson & Co. makes no guarantee,
express or implied, as to future performance. Investors should note this report was prepared by D.A. Davidson & Co.’s Institutional
Research Department for distribution to D.A. Davidson & Co.’s institutional investor clients and assumes a certain level of investment
sophistication on the part of the recipient. Readers, who are not institutional investors or other market professionals, should seek the
advice of their individual investment advisor for an explanation of this report’s contents, and should always seek such advisor’s advice
before making any investment decisions. Further information and elaboration will be furnished upon request.