IDA050412.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.
May 4, 2012 IDA* – NYSE

Rating: Buy
Price: (5/3/12) $39.35
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
503.603.3045
[e-mail]

Maintaining Estimates and Reiterating Targets Despite 1Q EPS Shortfall.
 IDACORP reported 1Q'12 EPS of $0.50, compared to $0.60 in 1Q'11 and our
forecast of $0.65. While our forecast was too ambitious, management indicated
results were in line with its internal forecast and reiterated a 2012 EPS guidance
range of $3.00-$3.15.
 Net income decreased $4.8 million for the quarter, largely as a result of a more
than $3 million decrease in the use of accumulated deferred investment tax credit
(ADITC). Under a settlement agreement approved by Idaho regulators, the utility
may conditionally use ADITC to prevent ROE from falling below the threshold of
9.5%. The amount of ADITC accrued in the recent quarter was $0.8 million,
whereas the year-prior amount was $3.9 million. (Recall that this full amount was
reversed in 2Q’11, and no ADITC was used in 2011 and 2012.) Also contributing
to the quarter’s earnings decline were reduced sales volumes due to warmer-
than-normal temperatures and increased O&M expenses. Management did call
out a material improvement at the Bridger Coal Company.
 Key to the utility’s earnings in 2012 and beyond is the Langley Gulch power
plant, which is scheduled to be commercially operating by mid-year 2012.
Management reported that the new plant successfully conducted its ‘first fire’
operating test on April 11th. Idaho Power filed an application with Idaho regulators
to increase annual rates by $59.9 million, effective July 1, 2012, for recovery of
Idaho Power's jurisdictional investment in the Langley Gulch power plant of
$337 million. The utility has also applied for Oregon’s jurisdictional share of the
plant.
 Maintaining estimates. To better align our model to management’s vow that
much of the 1Q’12 shortfall will be made up in later quarters, we are maintaining
our 2012 EPS estimate of $3.08. For 2013, we are leaving unchanged our EPS
estimate of $3.20.
 BUY reiterated. Our 12-18 month target price of $48.50 equates to ~15.4x the
average of our 2012 and 2013 EPS estimates. Over the past ten years, the
shares of IDA have been accorded an average ~15x 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 alluring and reaffirm our BUY rating.

Valuation Data
Long-term growth rate (E) 5%
Total Debt/Cap (3/31/12) 48.1% Cash per share (3/31/12) $0.18 Book value per share (3/31/12) $33.35 Dividend (yield) $1.32 (3.4%) Return on Equity (T-T-M) 10.1%

Trading Data
Shares outstanding (M) 50.1
Market Capitalization ($M) $1,971
52-week range $33.88 - $42.89
Average daily volume (3 mos.) (K) 238
Float 99%
Index Membership S&P 400

FY (Dec) 2011A 2012E Previous 2013E Previous
Revenue ($M) Q1 (Mar) $251 $241 A $259 n.a.n.a.
Q2 (Jun) $235 $241 E $242 n.a.n.a. Q3 (Sep) $310 $342 E $341 n.a.n.a.
Q4 (Dec) $231 $245 E $244 n.a.n.a.
$1,027 $1,068 E $1,086 $1,130 NC
Price/Revenue 1.9x 1.8x 1.8x
EPS Q1 (Mar) $0.60 $0.50 A $0.65 n.a.n.a.
Q2 (Jun) $0.42 $0.51 E $0.50 n.a.n.a.
Q3 (Sep) $2.16 $1.50 E $1.41 n.a.n.a.
Q4 (Dec) $0.18 $0.57 E $0.51 n.a.n.a.
$3.36 $3.08 E NC $3.20 NC
Price/EPS 11.7x 12.8x 12.3x
EBITDA ($M) Q1 (Mar) $86 $81 A $95 n.a.n.a.
Q2 (Jun) $69 $84 E $85 n.a.n.a.
Q3 (Sep) $109 $152 E $147 n.a.n.a.
Q4 (Dec) $46 $91 E $89 n.a.n.a.
$310 $408 E $415 $450 NC
EV/EBITDA 11.3x 8.6x 7.8x

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.

D.A. Davidson & Co.
3
IDACORP, Inc. - Quarterly Financial Position

Source: Company reports

$ millions -- Fiscal year ends 12/31 2006 2007 2008 2009 2010 2011 1Q'12
Current Assets:
Cash And Cash Equivalents $9.9 $8.0 $8.8 $53.0 $228.7 $27.8 $8.9
Receivables from Customers 62.1 69.2 64.7 76.8 62.1 66.3 68.2
Other Receivables 11.9 11.0 10.3 13.0 10.2 8.2 14.1
Accrued Unbilled Revenues 31.4 36.3 43.9 51.3 48.0 46.4 37.1
Materials And Supplies 39.1 43.3 50.1 48.1 45.6 46.5 48.4
Fuel Stock 15.2 17.3 16.9 25.6 27.5 47.9 56.5
Prepayments 9.3 9.4 10.1 11.1 11.1 12.4 11.3
Deferred Income Taxes 28.0 25.7 37.6 31.8 10.7 16.2 37.4
Other Current Assets 59.7 ##46.7 ##23.9 ##(0.2)##16.8 ##39.3 41.4
Total Current Assets $266.5 $266.7 $266.3 $310.4 $460.6 $311.0 $323.3
Electric Plant In Service - Net 2,177.5 2,327.5 2,525.0 2,601.6 2,718.0 2,789.3 2,779.8
Construction Work In Progress 210.1 257.6 207.7 289.2 417.0 591.5 614.9
Held For Future Use 2.8 3.4 6.3 7.2 7.1 7.0 7.1
Other Property, Net Of Accum. Depreciation 28.7 28.1 19.2 19.0 19.3 18.9 18.8
Property, Plant And Equipment - Net $2,419.1 $2,616.6 $2,758.2 $2,917.0 $3,161.4 $3,406.6 $3,420.6
Investments And Other Property 202.8 201.1 198.6 195.3 202.9 199.9 196.0
Regulatory Assets Associated With Taxes 423.5 449.7 696.3 720.4 756.6 953.1 963.1
Other Assets 133.1 ##119.3 ##103.5 ##95.6 ##94.5 ##90.0 87.7
Total Assets $3,445.1 $3,653.3 $4,022.8 $4,238.7 $4,676.1 $4,960.6 $4,990.6
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 $1.1
Notes Payable 129.0 186.4 151.3 53.8 66.9 54.2 63.0
Accounts Payable 86.4 85.1 96.8 83.8 103.1 100.4 71.3
Taxes Accured 47.4 8.5 0.0 10.2 0.0 0.5 2.8
Interest Accrued 12.7 18.9 16.7 20.1 23.9 21.8 23.4
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 ##91.2 122.3
Total Current Liabilities $410.3 $375.3 $395.7 $218.2 $449.1 $369.2 $283.9
Long-Term Debt 928.6 1,156.9 1,183.5 1,409.7 1,488.3 1,387.6 1,486.6
Deferred Income Taxes 498.5 466.2 515.7 574.5 566.5 772.0 806.5
Regulatory Liabilities - Other 294.8 274.2 276.3 287.8 298.1 332.1 332.2
Other 188.6 ##168.9 ##344.9 ##347.0 ##338.2 ##438.0 407.0
Common Equity 1,124.2 1,207.3 1,302.4 1,397.3 1,532.1 1,657.7 1,670.6
Noncontrolling Interest 0.0 4.5 4.4 4.2 3.9 4.0 3.9
Total Capitalization And Liabilities $3,445.1 ##$3,653.3 ##$4,022.8 ##$4,238.7 ##$4,676.1 ##$4,960.6 ##$4,990.6
Common Shares Outstanding - End 43.8 45.1 46.9 47.9 49.3 49.8 50.1
Total Debt - End $1,152.8 $1,354.8 $1,421.2 $1,472.8 $1,677.8 $1,543.3 $1,550.6
Total Debt - Average 1,126.4 1,245.3 1,422.5 1,451.1 1,530.8 1,576.0 1,546.9
Book Value Per Share $25.65 $26.79 $27.76 $29.17 $31.09 $33.26 $33.35
Capital Structure:
Common Equit 49.4% 47.2% 47.9% 48.8% 47.8% 51.8% 51.9%
Debt (Short-Term & Long-Term)50.6% 52.8% 52.1% 51.2% 52.2% 48.2% 48.1%
Capitalization 100.0% 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 2010 1Q'11 2Q'11 3Q'11 4Q'11 2011 1Q'12 2Q'12E 3Q'12E 4Q'12E 2012E 2013E
Operating Revenues:
Electric Utility $1,033.1 $251.1 $233.9 $308.0 $229.7 $1,022.7 $240.5 $239.6 $340.7 $243.7 $1,064.5 $1,125.8
Diversified Operations 3.0 0.4 1.1 1.6 1.0 4.0 0.7 1.0 1.0 1.0 3.7 4.0
Total Revenues $1,036.0 $251.5 $235.0 $309.6 $230.6 $1,026.8 $241.1 $240.6 $341.7 $244.7 $1,068.2 $1,129.8
Operating Expenses:
Power Supply Expenses $354.7 $86.3 $71.6 $97.1 $78.3 $333.4 $76.0 $67.1 $78.7 $69.5 $291.3 $323.0
Other Operations And Maintenance 293.9 70.7 85.5 84.6 97.9 338.6 78.5 85.0 93.7 79.2 336.5 332.1
Energy Efficiency Programs 44.2 6.7 5.8 18.5 6.7 37.7 4.5 5.0 18.0 6.0 33.5 36.0
Depreciation 115.9 29.5 29.7 30.1 30.5 119.8 30.5 30.9 33.0 33.3 127.7 135.0
Taxes Other Than Income Taxes 24.0 7.2 7.2 7.3 7.2 28.9 8.1 5.3 5.8 5.4 24.5 24.8
Diversified Operations 4.6 1.1 0.9 0.6 1.6 4.1 1.1 1.2 1.2 1.2 4.7 4.8
Total Operating Expenses $837.4 $201.4 $200.7 $238.2 $222.2 $862.5 $198.8 $194.5 $230.4 $194.5 $818.3 $855.6
EBITD $335.7 $86.2 $69.1 $108.7 $46.1 $310.1 $80.8 $84.5 $151.8 $91.0 $408.1 $450.2
Operating Income $198.7 $50.1 $34.3 $71.4 $8.5 $164.2 $42.3 $46.1 $111.3 $50.2 $249.9 $274.2
Other Income 15.2 4.5 5.0 6.0 5.6 21.2 6.6 5.0 5.0 5.0 21.6 21.0
Earnings Of Uncons. Eq-Method Inv. 3.0 (1.3) (4.4) 2.1 4.5 0.8 1.4 1.0 1.0 1.0 4.4 (3.0)
Interest On Long-Term Debt 80.5 20.8 19.5 19.5 19.5 79.3 19.5 20.9 21.1 21.3 82.8 85.0
Other Interest (5.4) (1.9) (1.9) (2.1) (2.0) (7.8) (2.3) (2.1) (2.1) (2.1) (8.6) (8.0)
Income Before Income Taxes: $141.7 $34.4 $17.3 $62.0 $1.0 $114.7 $33.2 $33.3 $98.3 $37.0 $201.7 $215.2
Income Taxes: (0.7) 4.9 (3.7) (45.4) (8.0) (52.1) 8.3 7.8 23.1 8.7 47.9 53.8
Effective Tax Rate -0.5% 14.2% -21.1% -73.1% -803.7% -45.4% 25.1% 23.5% 23.5% 23.5% 23.8% 25.0%
Income From Continuing Operations $142.5 $29.5 $21.0 $107.4 $9.0 $166.9 $24.8 $25.4 $75.2 $28.3 $153.8 $161.4
Noncontrolling Interest 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 $142.8 $29.7 $20.9 $107.1 $9.0 $166.7 $24.9 $25.5 $75.3 $28.4 $154.1 $161.7
Average Diluted Shares Outstanding 48.3 49.4 49.5 49.6 49.7 49.6 49.9 50.0 50.1 50.2 50.1 50.6
Diluted EPS $2.95 $0.60 $0.42 $2.16 $0.18 $3.36 $0.50 $0.51 $1.50 $0.57 $3.08 $3.20
Ratio Analysis:
Gross Margin 65.8% 65.7% 69.5% 68.6% 66.1% 67.5% 68.5% 72.1% 77.0% 71.6% 72.7% 71.4%
Operating Margin 19.2% 19.9% 14.6% 23.1% 3.7% 16.0% 17.6% 19.1% 32.6% 20.5% 23.4% 24.3%
Pre-Tax Margin 13.7% 13.7% 7.4% 20.0% 0.4% 11.2% 13.7% 13.8% 28.8% 15.1% 18.9% 19.0%
Net Margin 13.8% 11.8% 8.9% 34.6% 3.9% 16.2% 10.3% 10.6% 22.0% 11.6% 14.4% 14.3%
Dividends Per Common Share $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) 40.6% 37.2% 42.4% 33.4% 35.7% 35.7% 37.7% 37.6% 47.9% 42.9% 42.9% 46.9%
Dividend Growth 0.0% 0.0% 10.0% 13.6%
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 3/31/12) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 58% 38% 4%
Corresponding Individual Investor Group Ratings Outperform Market Perform Underperform
and Distribution 42% 58% 0%
Distribution of Combined Ratings 56% 40% 4%
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% 7% 0%
Distribution of Combined Investment Banking 2% 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
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before making any investment decisions. Further information and elaboration will be furnished upon request.