idanote022312.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))
4Q11 Results and 2012 Outlook – Reiterating BUY Rating
Highlights
• We are reiterating our BUY rating on IDA shares. Our price target of $46 per share implies a
2012/2013/2014 P/E of 14.8x/14.2x/13.6x our EPS estimates of $3.10/$3.23/$3.38.
• On February 22, 2012, IDA reported 4Q11 net income of $9.0m or $0.18 per diluted share compared to net income of $20.4m or $0.41 per diluted share in 4Q10 and our estimate of $0.17
per diluted share. 2011 net income was $166.7m or $3.36 per diluted share compared to $142.8m or $2.95 per diluted share in 2010 and our estimate of $3.35 per diluted share. The
main drivers behind the y-o-y changes include: rate and regulatory changes +$26.3m, changes in sales volumes +$9.8m, increased transmission service revenues +$7.4m, increase in pension
and payroll related expense -$17.2m, thermal plant expenses -$5.0m, other operating and maintenance expense -$2.2m, increased depreciation expense -$3.9m, increased property taxes
-$4.8m, other changes in operating income, net +1.1m, increase in AFUDC +11.6m, other net decreases -$3.7m, increases due to tax method changes and related examination settlements
+$27.8m and changes in other income tax benefit +$24.3m.
• IDA initiated 2012 earnings guidance of $3.00-$3.15 p/s and assumes the following: Langley
Gulch power plant is commercially available as of July 1, 2012, assumes an estimated use of
additional ADITC of less than $5m in 2012, Idaho Power O&M expense of $325m-$335m, 2012
capital expenditures total $230m-$240m, 2013-2014 capital expenditures total $490m-$500m (excludes potential transmission construction spend), Idaho Power Hydroelectric Generation 7.5-
9.5m MWh and Non-Regulated Subsidiary Earnings and Holdco of $0m-$3m.
• We note the following: earnings visibility through 2014 due to recently approved ADITC extension for 2012-2014 (less than $5m to be used in 2012 due to more favorable operating
income outlook), 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 for COD July 2012), “reliability-driven” $820m Boardman-to-Hemingway transmission project (IDA to own 22%, COD 2016) progressing through development (RRTT designation, Joint
Permit Funding Agreement signed January 2012), recently announced 10% common dividend increase with additional dividend upside (2012 payout of 43% vs target of 50-60%). Given the
previously mentioned positive fundamentals, we reiterate our BUY rating.
• Other highlights include: 300 MW Langley Gulch on schedule to be operational July 1, 2012 (cost
recovery filing pending), Hoku (HOKU-$0.77-NR) contract agreement reached, Board reviews
dividend quarterly but uncertain timing of next dividend increase, near-normal hydro conditions
(reservoir carryover benefit from last year offsetting below-normal precipitation/snowpack year-to-date).

COMPANY & MARKET DATA
Price (February 22, 2012) $41.40
Price Target, Excl Dividends (YE12) $46.00
52 - Week Range $33.88-$42.89
Mkt. Capitalization (mill) $2,033
Enterprise Value (mill) $3,734
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 218
Book Value per Share (4Q11A) $33.30
Dividend (FY12E) / Yield $1.32 3.2%
FY2010A FY2011A FY2012E
Revenue (mill) $1,036 $1,121 $1,220
1Q EPS $0.34 $0.60
2Q EPS $0.82 $0.42
3Q EPS $1.39 $2.16
4Q EPS $0.41 $0.18
EPS $2.95 $3.36 $3.10
Prior EPS
Consensus EPS $3.13
P/E 14.0x 12.3x 13.4x
EV/EBITDA 11.9x 12.4x 9.8x
P/FCF nm nm nm
ESTIMATES
Volum e in Millions
0.0
1.02.0
3.0
4.0
$20
$25
$30
$35
$40
$45
Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11

Chart data: Bloomberg
Brian J. Russo, CFA646-432-6312
[e-mail]
Ira Reibeisen
212-409-2051
[e-mail]
Power and Utilities Sector
Company Update

February 23, 2012
BUY
Brian Russo 646.432.6312 IDACORP (IDA)

Ladenburg Thalmann & Co. Inc. PAGE - 2 -

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 - 3 -

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 1/31/12)
Buy: 76% (31% are banking clients)
Neutral: 24% (10% 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 - 4 -

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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