IDA050313.pdf

Please refer to pages 6-7 of this report for detailed disclosure and certification information.
* D. A. Davidson & Co. makes a market in this security.
Institutional Equity Research

IDACORP, Inc.
May 3, 2013 IDA* – NYSE

Rating: Buy
Price: (5/2/13) $47.73
Price Targets: 12-18 month: ↑$55.00
5-year: ↑$65.00

Industry:
Utilities

Michael Bates
503.603.3045
[e-mail]

Maintaining BUY Following Solid 1Q Report
Hot, Dry Summer Weather Forecast Bodes Well

 IDACORP reported 1Q EPS of $0.67 versus $0.50 a year ago. Results were
ahead of our estimate of $0.62 and the $0.55 consensus, driven primarily by
increased retail margins. 2013 EPS guidance was maintained at $3.20-$3.35.
 Gross margin grew 13.6% to $188 million, driven by higher retail rates (net of
resource costs) and the commercial operation of the Langley Gulch plant, but
partially offset by lower wholesale revenues. Results were also boosted by cold
winter weather (14% colder than normal and 26% colder than 1Q’12), which drove
an estimated $9.4 million of incremental revenue.
 Local economy strengthening. Economic activity within IDA’s service territory
continues to trend positively, with unemployment recently dropping to 6.0% and
customer growth increasing to 1.2%, versus 0.9% a year ago.
 Demand outlook. In addition to improving customer growth trends, earnings for
the summer may be poised to benefit from stronger than normal irrigation demand
(which comprised 22% of IDA’s general business volumes in 2012). NOAA’s
June-August 2013 projections currently place a relatively high probability of
below-normal precipitation and above-normal temperatures.
 2013 IRP. This June Idaho Power will file its 2013 Integrated Resource Plan,
which is expected to include an assumption of 1.1% average annual load growth--
significantly below the 2.6% average over the past 20 years. IDA remains tight-
lipped around the plan’s details, but we believe it is unlikely to develop an
additional source of power generation in the next five years.
 BUY rated. We are increasing our estimates for the positive 1Q variance and
improved load growth trend, which we expect to support strong cash flows and
subsequent dividend increases. Our price target is raised to $55 (previously $53),
which equates to 16.2x our 2014 EPS forecast of $3.40.

Valuation Data
Long-term growth rate (E) 4%
Total Debt/Cap (3/31/13) 47.7% Cash per share (3/31/13) $0.49 Book value per share (3/31/13) $35.34 Dividend (yield) $1.52 (3.2%) Return on Equity (T-T-M) 9.8%

Trading Data
Shares outstanding (M) 50.2
Market Capitalization ($M) $2,398
52-week range $38.17 - $49.21
Average daily volume (3 mos.) (K) 183
Float 99%
Index Membership S&P 400

FY (Dec) 2012A 2013E Previous 2014E Previous
Revenue ($M) Q1 (Mar) $241 $265 A $253 n.a.n.a.
Q2 (Jun) $255 $256 E $255 n.a.n.a.
Q3 (Sep) $334 $358 E NC n.a.n.a.
Q4 (Dec) $251 $251 E $253 n.a.n.a.
$1,081 $1,129 E $1,119 $1,139 $1,148
Price/Revenue 2.2x 2.1x 2.1x
EPS Q1 (Mar) $0.50 $0.67 A $0.62 n.a.n.a.
Q2 (Jun) $0.71 $0.66 E $0.68 n.a.n.a.
Q3 (Sep) $1.84 $1.64 E NC n.a.n.a.
Q4 (Dec) $0.33 $0.35 E $0.36 n.a.n.a.
$3.37 $3.33 E $3.30 $3.40 $3.38
Price/EPS 14.1x 14.4x 14.0x
EBITDA ($M) Q1 (Mar) $81 $96 A $91 n.a.n.a.
Q2 (Jun) $93 $93 E $95 n.a.n.a.
Q3 (Sep) $147 $159 E $158 n.a.n.a.
Q4 (Dec) $71 $75 E $76 n.a.n.a.
$393 $423 E $420 $432 $435
EV/EBITDA 10.2x 9.4x 9.2x

D.A. Davidson & Co.
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Price Chart

Source: Capital IQ

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.

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Historical Financial Position
Source: Company reports
$ millions -- Fiscal year ends 12/31 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13
Current Assets:
Cash And Cash Equivalents $229 $94 $58 $31 $28 $9 $14 $20 $27 $24
Receivables from Customers 62 67 62 76 66 68 63 80 66 79
Other Receivables 10 13 8 11 8 14 16 21 25 24
Deferred Income Taxes 11 10 7 4 16 37 47 46 57 32
Other 149 153 191 188 193 195 219 199 193 225
Total Current Assets $461 $337 $327 $309 $311 $323 $358 $366 $367 $384
Property, Plant And Equipment - Net 3,161 3,233 3,307 3,356 3,407 3,421 3,473 3,507 3,536 3,555
Investments 203 203 198 192 200 196 198 191 189 181
Regulatory Assets 757 724 717 880 953 963 979 1,049 1,133 1,103
Other 95 94 93 89 90 88 95 95 94 93
Total Assets $4,676 $4,590 $4,642 $4,827 $4,961 $4,991 $5,103 $5,208 $5,320 $5,316
Current Liabilities:0 0
Long-Term Debt Due Within One Year 123 2 2 2 101 1 1 1 71 1
Notes Payable 67 74 66 52 54 63 65 51 70 84
Accounts Payable 103 65 87 90 100 71 92 93 90 65
Other 156 191 185 111 113 149 139 122 120 105
Total Current Liabilities $449 $331 $340 $254 $368 $284 $297 $268 $351 $255
Long-Term Debt 1,488 1,487 1,487 1,487 1,388 1,487 1,537 1,537 1,467 1,536
Deferred Income Taxes 566 578 587 750 772 806 833 877 895 892
Regulatory Liabilities 298 297 308 333 332 332 334 348 355 363
Pension & Postretirement Benefits 363 335 342 339 423 431
Other 338 #344 354 341 76 #72 65 64 65 59
Common Equity 1,532 1,550 1,563 1,657 1,658 1,671 1,692 1,770 1,759 1,775
Noncontrolling Interest 4 4 4 4 4 4 4 4 4 4
Total Capitalization And Liabilities $4,676 $4,590 $4,642 $4,827 $4,961 $4,991 $5,103 $5,208 $5,320 $5,316
Common Shares Outstanding - End 49.3 49.6 49.7 49.8 49.8 50.1 50.2 48.6 48.3 50.2
Book Value Per Share $31.09 $31.28 $31.44 $33.29 $33.26 $33.35 $33.74 $36.39 $36.38 $35.34
Capital Structure:
Common Equit 47.8% 49.8% 50.2% 51.9% 51.9% 51.9% 51.4% 52.8% 52.3% 52.3%
Long-Term Debt 50.1% 47.8% 47.7% 46.5% 46.5% 46.1% 46.6% 45.7% 45.6% 45.2%
Short-Term Debt 2.1% 2.4% 2.1% 1.6% 1.7% 2.0% 2.0% 1.5% 2.1% 2.5%
Capitalization 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
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Historical and Forecasted Cash Flow
Source: Company reports and D.A. Davidson & Co. estimates
$ millions -- Fiscal year ends 12/31 2009 2010 2011 2012 2013e 2014e
Cash Flow from Operating Activities:
Net Income $124 $142 $167 $169 $167 $171
Depreciation & Amortization 119 122 125 129 134 138
Deferred Taxes And Invest. Tax Credits 19 42 (53) 26 10 0
Change In Regulatory Assets & Liabilities 58 47 68 (53) (14)0
Pension and Postretirement Plan Expense 12 15 45 45 8 0
Pension and Postretirement Plan Contributions (8) (66) (22) (48) (1)
AFUDC - Equity (8) (17) (25) (22) (14) (16)
Distributions from Equity Method Investments 12 7 3 19 8 0
Net Other Items (8) (8) 3 (8) (6)0
Operating Cash Flows before WC $321 $284 $309 $256 $291 $293
Net Change in Working Capital (37) 22 1 (7) (13)0
Net Operating Cash Flow $284 $305 $310 $249 $278 $293
Cash Flow from Investing Activities:
Additions To Utility Plant (252) (338) (338) (240) (250) (285)
Sale Of Emission Allowances 2 6 6 3 0
Investments In Affordable Housing (6) (13) (2) (0)0
Investments In Unconsolidated Affiliates 0 (7) 3 0 0
Net Other 13 24 (2) (7) 3
Net Investing Cash Flow ($242) ($328) ($332) ($244) ($247) ($285)
Cash Flow Before Financing $42 ($23) ($22) $5 $31 $8
Cash Flow from Financing Activities:
Dividends (57) (58) (60) (69) (82) (104)
Net Borrowing 43 212 (134) 64 56 96
Net Equity 23 48 16 3 (2) 0
Net Other (7) (3) (1) (5) 1 0
Net Financing Cash Flow $2 $199 ($179) ($7) ($27) ($8)
Net Change in Cash 44 176 (201) (1) 3 0
Cash & Equivalents - End $53 $229 $28 $27 $30 $30
Cash Flow Metrics:
Operating Cash Flows $284 $305 $310 $249 $278 $293
Dividends (57) (58) (60) (69) (82) (104)
Retained Cash Flow (RCF) 228 248 251 180 195 189
Capex (252) (338) (338) (240) (250) (285)
Free Cash Flow ($24) ($91) ($87) ($59) ($55) ($96)
RCF/Capex -10% -27% -26% -25% -22% -34%
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Historical and Projected Operating Results
*Certain items previously reported as Other Income were reclassified as Other Operating Expense with the release of 2012 results to correct an accounting error (the error did not impact reported net
income). The reclassified amounts were not detailed by quarter.
Source: Company reports and D.A. Davidson & Co. estimates
$ millions -- Fiscal year ends 12/31 1Q'12R 2Q'12 3Q'12 4Q'12 2012 1Q'13 2Q'13e 3Q'13e 4Q'13e 2013e 2014e
Operating Revenues $241 $255 $334 $251 $1,081 $265 $256 $358 $251 $1,129 $1,139
Power Supply Expenses 76 63 85 71 295 77 64 96 74 312 311
Gross Margin $165 $191 $249 $180 $785 $188 $191 $262 $176 $818 $829
Operating Expenses:
Other Operations And Maintenance 79 86 90 95 349 80 87 91 91 349 352
Energy Efficiency Programs 4 8 8 6 27 4 5 7 5 22 23
Depreciation 31 30 32 32 124 32 33 34 34 133 138
Taxes Other than Income Taxes 8 8 7 8 30 8 8 7 8 31 31
Other Operating Expenses* 4 1 1 1 12 4 3 3 3 13 12
Total Operating Expenses $125 $133 $138 $141 $543 $128 $136 $142 $141 $547 $556
EBITDA $81 $93 $147 $71 $393 $96 $93 $159 $75 $423 $432
Operating Income $40 $59 $111 $30 $243 $59 $56 $120 $35 $270 $272
AFUDC - Equity 8 8 4 3 22 4 3 4 4 14 16
Earnings Of Unconsolidated Equity Investments 1 (2) 1 (1) (0) 0 0 0 0 1 1
Other Income* 1 7 3 7 4 1 1 1 1 4 4
Net Interest Expense 17 17 19 20 74 19 18 18 18 73 76
Income Before Income Taxes $33 $46 $96 $20 $195 $44 $43 $107 $23 $217 $219
Income Taxes 8 11 4 3 26 11 10 25 5 51 48
Effective Tax Rate 25.1% 23.0% 4.1% 16.7% 13.4% 25.0%23.0% 23.0% 23.0%23.4% 22.0%
Net Income $25 $35 $92 $16 $169 $33 $33 $82 $18 $167 $171
Noncontrolling Interest 0 (0) (0) 0 (0) 0 0 0 0 0 0
Net Income Available For Common $25 $35 $92 $16 $169 $34 $33 $83 $18 $167 $171
Average Diluted Shares 49.9 50.0 50.1 50.1 50.0 50.1 50.2 50.2 50.2 50.2 50.2
Diluted EPS - GAAP $0.50 $0.71 $1.84 $0.33 $3.37 $0.67 $0.66 $1.64 $0.35 $3.33 $3.40
Diluted EPS-Adjusted $0.50 $0.71 $1.68 $0.33 $3.22 $0.67 $0.66 $1.64 $0.35 $3.33 $3.40
Ratio Analysis:
Return on Average Equity (ttm)10.0% 10.7% 9.5% 9.9% 9.9% 10.2% 10.0% 9.3% 9.3% 9.3% 9.1%
Return on Average Assets (ttm)3.4% 3.6% 3.2% 3.3% 3.3% 3.4% 3.3% 3.1% 3.1% 3.1% 3.1%
EBITDA Margin 33.5% 36.6% 44.1% 28.5% 36.4% 36.2% 36.5% 44.4% 29.8% 37.5% 37.9%
Operating Margin 16.5% 23.1% 33.3% 12.0% 22.4% 22.4% 21.8% 33.5% 14.1% 23.9% 23.9%
Pre-Tax Margin 13.7% 18.1% 28.8% 7.9% 18.0% 16.8% 16.7% 29.9% 9.2% 19.3% 19.2%
Net Margin 10.3% 13.9% 27.6% 6.6% 15.6% 12.7% 12.9% 23.1% 7.1% 14.8% 15.0%
Dividends Per Common Share $0.33 $0.33 $0.33 $0.38 $1.37 $0.38 $0.38 $0.44 $0.44 $1.63 $2.07
Dividend Payout Ratio (ttm) 37.7% 35.6% 40.0% 40.6% 40.6% 40.1% 42.1% 47.8% 49.1% 49.1% 60.8%
Dividend Growth 10.0% 10.0% 10.0% 26.7% 14.2% 15.2% 15.2% 32.4% 15.0% 19.3% 26.5%
D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400  Lake Oswego, Oregon 97035  [phone]  [phone]  www.dadavidson.com
Copyright D.A. Davidson & Co., 2013. All rights reserved.
6
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. Michael Bates, the
research analyst 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.
I, Michael Bates, attest that (i) all the views expressed in this research report accurately reflect my personal views about the common
stock of the subject company, and (ii) no part of my 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 3/31/2013) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 52% 44% 4%
Distribution of companies from whom D.A. Davidson & Co. has received compensation for investment banking services in last 12 mos.
Institutional Coverage 9% 5% 18%

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., 2013. All rights reserved.
7
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.