IDANOTE011312.pdf

Disclosures and Analyst Certifications can be found in Appendix A.
NEW YORK, NY MELVILLE, NY PRINCETON, NJ MIAMI, FL BOCA RATON, FL

520 Madison Avenue y New York, New York 10022 y Telephone: [phone] 800-LAD-THAL

Member: NYSE, NYSE Amex, FINRA, all other principal exchanges and SIPC

IIDDAACCOORRPP ((IIDDAA))
Company Update – Reiterating BUY Rating
Highlights
• We are reiterating our BUY rating on IDA shares. Our revised price target of $46 per share
(previously $45 p/s) implies a 2013/2014 P/E of 14.2x/13.6x our EPS estimates of $3.23/$3.38. Our 2011/2012 EPS estimates are $3.35/$3.10. Our 2011 EPS estimate includes the unicap
study gain and customer credit.
• In terms of valuation, IDA trades at 13.0x our 2013 estimated EPS, a 9% discount to a regulated utility peer average of 14.3x (regulated utility peer group defined as electric utilities with a
majority of operations regulated by the state/federal). In terms of fundamentals, we note earnings visibility through 2014 due to recently approved ADITC extension for 2012-2014,
attractive earnings floor of 9.5% ROE based on year-end shareholder equity, limited regulatory risk (ADITC extension for period of 2012-2014, pre-approved Langley Gulch CCGT), $427m 300
MW Langley Gulch CCGT drives near-term growth, “reliability-driven” $820m Boardman-to-Hemingway transmission project (IDA to own 30-50%, COD 2016) drives long-term growth,
common dividend Board declaration this month. We view IDA as an attractively-valued, fundamentally-strong small-cap regulated utility and we reiterate our BUY rating.
• The IDA Board recently endorsed a long-term target dividend payout ratio of 50-60%. Based on
our 2012 estimated EPS, achieving the low-end of the target would represent a +25% increase in
the dividend to $1.50 p/s from $1.20. In our opinion, it is likely that IDA will reach the 50% payout target in at least two steps. We expect a double digit increase (+12.5%) this month to an
annualized dividend of $1.35 p/s implying a 3.2% yield.
• We expect IDA to file for recovery of the 300 MW Langley Gulch CCGT in 1Q12 (modified procedure) with new rates effective in mid-2012. Importantly, Langley Gulch has been pre-
approved by the IPUC and is on-schedule (June 2012) and on budget ($427m). Recovery of Langley Gulch is the primary driver of our 2012-2013 EPS estimates.
• Development of the 299-mile, 500 kV Boardman-to-Hemingway transmission line is ongoing.
Importantly, the proposed project is needed for reliability and to meet customer supply needs by 2016. The project was also included as one of the federal fast-track designated projects. We
expect IDA to own 30-50% of the $820m project and regional partners are expected. The IPUC
recently accepted IDA’s IRP documenting the utility’s supply needs through 2030. Development
of the transmission line is the primary driver of post 2013 earnings. IDA is also involved in the
Gateway West transmission line project which is in the early stages of development (COD post
2016).
• The IPUC set an expedited schedule (IPC-E-11-28) for review of IDA’s request to terminate
electric service to a solar manufacturing facility owned by Hoku Materials (HOKU-$0.69-NR). Following a Wednesday meeting, the IPUC decided to deliberate on IDA’s request to terminate
service to Hoku and will render a decision in a timely fashion. Hoku is currently delinquent on its contracted $1.9m November 2011 and $1.9m December 2011 payment. A $4m deposit is
currently held by IDA. While Hoku represents one of IDA’s largest industrial customers we believe the potential lost margins are manageable. Importantly, IDA can use up to $25m of
ADITC credits to support a 9.5% floor on year-end equity, further mitigating any impact and highlighting the value of the ADITC extension. We also note a new IDA industrial customer,
Chobani (a yogurt manufacturer), broke ground at its Twin Falls. Idaho production facility in late December 2011. The $100m 940,000 square feet facility is anticipated to ramp-up production in
2H12.
• We note the following topics/updates expected to be addressed on the upcoming 4Q11 financial
results conference call (date TBD): initiation of 2012 earnings guidance, additional insight of the
benefits of the ADITC extension, industrial customer outlook, common dividend policy, hydro
conditions.
•See Table 1 on a e 2 for Financial Summar .
COMPANY & MARKET DATA
Price (January 12, 2012) $41.99
Price Target, Excl Dividends (YE12) $46.00
Prior Target $45.00
52 - Week Range $33.88-$42.89
Mkt. Capitalization (mill) $2,062
Enterprise Value (mill) $3,537
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 218
Book Value per Share (3Q11A) $31.45
Dividend (FY12E) / Yield $1.35 3.2%
FY2010A FY2011E FY2012E
Revenue (mill) $1,036 $1,121 $1,220
1Q EPS $0.34 $0.60A
2Q EPS $0.82 $0.42A
3Q EPS $1.39 $2.16A
4Q EPS $0.41
EPS $2.95 $3.35 $3.10
Prior EPS
Consensus EPS $3.20 $3.06
P/E 14.2x 12.5x 13.5x
EV/EBITDA 11.2x 11.8x 9.3x
P/FCF nm nm nm
ESTIMATES
Volum e in Millions
0.0
1.0
2.03.0
4.0
$20
$25
$30
$35
$40
$45
Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11

Brian J. Russo, CFA 646-432-6312
[e-mail]
Ira Reibeisen
212-409-2051
[e-mail]
Power and Utilities Sector
Company Update

January 13, 2012
BUY
Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 2 -

Table 1: IDA – Financial Summar $000, exce t /s amount
Year Ending 31 December 2008 2009 2010 2011E 2012E 2013E 2014E
FINANCIAL SUMMARY1
EP 2.17 2.64 2.95 3.35 3.10 3.23 3.3
P/E ratio 19.36 15.93 14.21 12.54 13.53 12.99 12.44
EBITDAPS 6.45 6.66 6.51 6.14 7.76 8.00 8.02
P/EBITDAPS 6.51 6.31 6.45 6.84 5.41 5.25 5.23Free CFPS -2.36 0.69 -0.68 -1.17 0.00 1.69 -0.27
P/Free CFPS -17.80 60.98 -61.79 -35.82 -12547.58 24.88 -155.12
DPS 1.20 1.20 1.20 1.20 1.35 1.52 1.71
Dividend yield 2.9% 2.9% 2.9% 2.9% 3.2% 3.6% 4.1%
Dividend payout ratio 55.3% 45.5% 40.6% 35.8% 43.5% 47.0% 50.6%
BV PS 28.80 29.71 31.76 34.13 35.88 37.60 39.26P/BV PS 1.46 1.41 1.32 1.23 1.17 1.12 1.07Dilluted Shares Out 45,379 47,182 48,340 48,940 48,940 48,940 48,940Enterprise value 3,080,087 3,337,915 3,289,407 3,537,435 3,603,668 3,595,407 3,607,274EV/Sales 3.21 3.18 3.18 3.16 2.95 2.87 2.83EV/EBITDA 10.52 10.62 10.46 11.78 9.49 9.19 9.18
EV/EBIT 16.17 15.20 15.17 17.46 13.40 13.12 13.10
INCOME STATEMENT (USDm)
Revenues 960,414 1,049,800 1,036,029 1,120,689 1,220,143 1,251,210 1,272,981
Gross margin 190,667 203,583 198,670 180,851 256,655 265,837 264,794
Operating EBITDA 292,753 314,209 314,591 300,250 379,635 391,277 392,743Depreciation & Amortization 102,086 110,626 115,921 119,399 122,981 125,440 127,949EBIT 190,501 219,547 216,843 202,595 268,848 274,030 275,399Interest expense 73,056 72,810 75,114 67,925 79,600 79,600 79,601Net income 98,414 124,350 142,798 163,837 151,864 158,156 165,223
Net income per share 2.17 2.64 2.95 3.35 3.10 3.23 3.38
CASH FLOW (USDm)
Cash flow from operations 136,513 284,425 305,400 267,623 264,836 277,588 284,752
Cash flow from investing (202,824) (242,405) (328,334) (318,357) (265,000) (195,000) (298,000)
Capital expenditures 243,544 251,937 338,252 325,000 265,000 195,000 298,000
Cash flow from financing 67,173 2,139 198,624 (170,592) 33,931 (74,328) 1,381Common dividends (54,239) (56,820) (57,872) (58,728) (66,069) (74,328) 0
Free cash flow (107,031) 32,488 (32,852) (57,377) (164) 82,588 (13,248)
BALANCE SHEET (USDm)
Cash and marketable sec 8,828 52,987 228,677 7,351 41,118 49,378 37,512
Total assets 4,022,845 4,238,727 4,676,055 4,578,513 4,692,300 4,698,120 4,959,304
Total debt/lease 1,183,451 1,409,730 1,488,287 1,489,795 1,589,795 1,589,795 1,589,795Total liabilities 2,715,974 2,905,637 3,140,071 3,019,007 3,119,007 3,119,007 3,119,007Shareholders' equity 1,306,871 1,401,544 1,535,284 1,670,281 1,756,076 1,839,904 1,921,510RATIO ANALYSISSales growth (%) 9.2% 9.3% -1.3% 8.2% 8.9% 2.5% 1.7%
Gross margin/sales (%) 19.9% 19.4% 19.2% 16.1% 21.0% 21.2% 20.8%
EBIT/Assets 4.7% 5.2% 4.6% 4.4% 5.7% 5.8% 5.6%
CFO/Assets 3.4% 6.7% 6.5% 5.8% 5.6% 5.9% 5.7%
ROA 2.4% 2.9% 3.1% 3.6% 3.2% 3.4% 3.3%
ROE 7.5% 8.9% 9.3% 9.8% 9.5% 9.5% 109.5%
Total debt/total capital 47.5% 50.1% 49.2% 47.1% 47.5% 46.4% 45.3%Total debt/EBITDA 4.0 4.5 4.7 5.0 4.2 4.1 4.0EBITDA/interest expense 4.0 4.3 4.2 4.4 4.8 4.9 4.9FFO/Debt 20.2% 20.5% 18.0% 16.7% 17.5% 17.9%
RATE BASE ANALYSIS
Implied Rate Base2 2,700,403.03$ 2,825,324.85$ 2,894,884.65$
ADITC EXTENSION ANALYSIS AND EARNINGS SUMMARY
Idaho Power (IPC) year-end shareholder equity 1,598,029 1,674,313 1,748,574
Idaho Power Idaho-jurisdictional Earnings 145,740 153,493 160,301Idaho Power Oregon-jurisdictional Earnings 5,610 5,610 5,610Total Idaho Power Earnings Per Share $3.09 $3.25 $3.39Financial, Ida-West, Holdco $0.03 $0.03 $0.03Consolidated EPS $3.12 $3.28 $3.42
12010 and 2011 earnings based on previous settlement that enables Idapower to earn an ROE of at last 9.5% on year-end shareholder equity
2 2012 average rate based includes partial-year of $427m Langley Gluch with COD expected mid-year 2012.32012-2014 rate structure based IPUC approved ADITC extension settlement and 2011 GRC settlement 4Idaho Power Idaho-jurisdictional earnings based on 9.5% return-on year-end shareholder equity (96% of total Idaho Power year-end shareholder equity)
Source: Ladenburg Thalmann & Co, Inc., Company Reports

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 3 -

APPENDIX A: IMPORTANT RESEARCH DISCLOSURES

ANALYST CERTIFICATION
I, Brian Russo, attest that the views expressed in this research report accurately reflect my personal views about the subject security
and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or
views expressed in this research report.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon
various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.
COMPANY BACKGROUND
Headquartered in Boise, Idaho, IDACORP, Inc., (IDA) is a holding company formed in 1998 that is primarily engaged in the
generation, transmission, distribution, sale and purchase of energy. IDA serves over 466,000 retail customers across its 24,000sq
mile service territory in both Idaho and Oregon, and owns approximately 3,267MW of generating capacity. IDA’s principal operating
subsidiary is Idaho Power Company (IPC). The company’s unregulated utilities include IDACORP Financial (IFS) that invests in
affordable housing and real estate and Ida-West Energy Company (Ida-West) that operates small hydroelectric generation projects.

VALUATION METHODOLOGY
We value equities utilizing a multi-faceted approach which includes; sum-of-the-parts, net asset value, discounted cash flow, leading
P/E, and EV/EBITDA.
RISKS
On top of normal economic and market risk factors that impact most all equities, Idacorp (IDA) is uniquely at risk to:
Because of IPC’s predominantly hydroelectric generating base and heavy reliance on hydroelectric generation, which can be
adversely affected by weather, reduced hydroelectric generation can reduce revenues and increase costs.
Continuing declines in stream flows and over-appropriation of water in Idaho may reduce hydroelectric generation and revenues and
increase costs.
Load growth in IPC’s service territory due to customer growth and demand for energy exposes it to greater market and operational risk
as increased reliance on purchased power to meet load requirements could increase costs and reduce earnings and cash flows.
IPC’s reliance on coal and natural gas to fuel its generating facilities exposes it to risk of increased market prices, which could
increase costs and reduced earnings.
Changes in temperature and precipitation can reduce power sales and revenues.
Climate change could affect customer demand and hydroelectric generation and lead to restrictions on generation resources.
If Idaho Public Utility Commission (IPUC), the Oregon Public Utility Commission (OPUC) or the Federal Energy Regulatory
Commission (FERC) grant less rate recovery in rate case filings than IPC needs to cover the costs of providing services, financial
results could be adversely impacted and economic expansion may be limited.
Conditions that may be imposed in connection with hydroelectric license renewals may require large capital expenditures and reduce
earnings and cash flows.
The cost of complying with environmental regulations related to air quality, water quality, natural resources and health and safety can
increase capital expenditures and operating costs and reduce earnings and cash flows.
IDACORP and its subsidiaries are subject to costs and other effects of legal and regulatory proceedings, settlements, investigations
and claims, including those that have arisen out of the western energy situation.
IPC’s business is subject to substantial governmental regulation and may be adversely affected by increased costs resulting from, or
liability under, existing or future regulations or requirements.
Increased capital expenditures can significantly affect liquidity.
As a holding company, IDACORP does not have its own operating income and must rely on the upstream cash flows from its
subsidiaries to pay dividends and make debt payments.
A downgrade in IDA’s credit ratings could negatively affect the company’s ability to access capital and increase their cost of
borrowing.
Adverse results of income tax audits could reduce earnings and cash flows.
Employee workforce factors, including the loss or retirement of key personnel, availability of qualified personnel and an aging
workforce, could increase costs and reduce earnings.

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 4 -

STOCK RATING DEFINITIONS
Buy: The stock’s return is expected to exceed 12.5% over the next twelve months.
Neutral: The stock’s return is expected to be plus or minus 12.5% over the next twelve months.
Sell: The stock’s return is expected to be negative 12.5% or more over the next twelve months.

Investment Ratings are determined by the ranges described above at the time of initiation of coverage, a change in risk, or a change
in target price. At other times, the expected returns may fall outside of these ranges because of price movement and/or volatility. Such
interim deviations from specified ranges will be permitted but will become subject to review.

RATINGS DISPERSION AND BANKING RELATIONSHIPS (AS OF 12/31/11)
Buy: 77% (31% are banking clients)
Neutral: 23% (13% are banking clients)
Sell: 0% (0% are banking clients)
INVESTMENT RATING AND PRICE TARGET HISTORY

Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 5 -

COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. does not make a market in subject company. Ladenburg Thalmann & Co. Inc. has neither had an
investment banking relationship with, nor received investment banking fees from the subject company in the past 12 months. Neither
the Analyst, nor members of the Analyst’s household own any securities issued by the subject Company.

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this report and are subject to change without notice.

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