IDANOTE092112.pdf.pdf

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

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

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

IIDDAACCOORRPP ((IIDDAA))
Common Dividend Increase of +15.2% – Reiterating BUY Rating
Highlights
• We are reiterating our BUY rating on IDA shares. Our revised price target of $47
(previously $46 p/s) implies a 2012/2013/2014 P/E of 14.4x/14.5x/13.9x our EPS
estimates of $3.26/$3.23/$3.38.
• On September 20, 2012, IDA announced its second dividend increase of 2012.
Specifically, IDA increased its quarterly cash common dividend by +15.2% to $0.38 per share implying an annualized rate of $1.52. The quarterly dividend is payable November 30, 2012. Including the January 2012 quarterly dividend increase (+$0.03 p/s), 2012 dividend growth totals +26.7%. Furthermore, IDA management plans to recommend to the Board a dividend increase of “at least ten percent” in September 2013. IDA also reiterated its commitment to a long-term dividend payout ratio of 50-60%.
• We view the announced dividend increase and the expected September 2013
dividend increase favorably and ahead of our expectations of a second dividend
increase of +10% in the latter part of 2012. The annualized dividend rate of $1.52 now
implies a dividend yield of 3.56% (based on yesterday’s closing price) and also implies
a 2012 dividend payout ratio of 49%. Further, the targeted September 2013 dividend increase of “at least ten percent” further supports our view of attractive total return potential. An assumed +10% dividend increase in September 2013 implies an annualized dividend of $1.67 and an 2013 implied dividend payout ratio of 52%.
• We also highlight the following fundamentals: minimal regulatory risk due to ADITC
rate settlement agreement through 2014 and $427m 300 MW Langley Gulch
generation station added to rates in mid-2012, earnings visibility due to 9.5% ROE
floor based on year-end shareholder equity (no ADITC needed in 2012, $70m ADITC
balance), upcoming 2013 IRP to include new build scenario to meet capacity needs in
2016 following Boardman-Hemingway transmission line delay from 2016 to 2018, 1%
long-term load growth forecasts, previously mentioned attractive dividend growth, and compelling 2014 leading P/E of 12.7x (based on yesterday’s closing price).
• We continue to view IDA as an attractively-valued fundamentally-strong small-cap
regulated utility and we reiterate our BUY rating.

COMPANY & MARKET DATA
Price (September 21, 2012, intra-day) $43.15
Price Target, Excl Dividends (YE12) $47.00
Prior Target $46.00
52 - Week Range $36.57-$43.64
Mkt. Capitalization (mill) $2,119
Enterprise Value (mill) $3,783
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 226
Book Value per Share (2Q12A) $33.35
Dividend (FY12E) / Yield $1.52 3.52%
FY2011A FY2012E FY2013E
Revenue (mill) $1,121 $1,220 $1,251
1Q EPS $0.60 $0.50A
2Q EPS $0.42 $0.71A
3Q EPS $2.16
4Q EPS $0.18
EPS $3.36 $3.26 $3.23
Prior EPS
Consensus EPS $3.26 $3.23
P/E 12.8x 13.2x 13.4x
EV/EBITDA 12.6x 10.0x 9.7x
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

September 21, 2012
BUY
Brian Russo 646.432.6312 IDACORP (IDA)

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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)

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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 8/31/12)
Buy: 77% (29% are banking clients)
Neutral: 22% (8% are banking clients)
Sell: 1% (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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