IDANOTE110212.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))
3Q12 Results and Increased 2012 Guidance – Raising P-T and Reiterating
BUY Rating
Highlights
• We are reiterating our BUY rating on IDA shares. Our revised price target of $49 p/s
(previously $47 p/s) implies a 2012/2013/2014 P/E of 14.7x/15.0x/14.4x our revised
EPS estimates of $3.34/$3.26/$3.41 (previously $3.26/$3.23/$3.38).
• On November 1, 2012, IDA reported 3Q12 net income of $92.1m or $1.84 p/s
compared to net income of $107.1m or $2.16 p/s in 3Q11 and our estimate of $1.61 p/s. The main drivers behind the y-o-y changes include: rate and regulatory changes +$32.1m, increase in sales volumes +$3.0m, Change in Payroll-Related Expenses +$2.3m, Additional Pension Expense Funder Through Sharing -$5.8m, change in Depreciation, Property Tax and Other-Net -$2.7m, Greater Revenue Sharing in 2011 than in 2012 +$11.8m, Change in AFUDC -$4.2m, Change in Additional Amortization of ADITC +$6.8m, Other Net Change -$1.9m and Income Tax Expense and Other Net
Changes (net of tax) -$56.4m.
• IDA increased their previous 2012 earnings guidance to $3.30-$3.40 p/s from $3.20-
$3.35 and assumes the following: Idaho Power O&M expense of $335m-$345m
(previously $325m-$335m) driven by additional pension expense offset by Idaho
sharing agreement, 2012 capital expenditures total $230m-$240m (no change), Idaho Power Hydroelectric Generation increased to 7.8-8.2m MWh from 7.5-8.5m MWh and Non-Regulated Subsidiary Earnings and Holdco of $0m-$3m (no change).
• Other highlights include:$7.8m tax benefit recorded in 3Q12 due to repairs deduction,
$12.9m customer sharing benefit realized in 3Q12 (includes $6.3m for customer
sharing and $5.8m to lower pension obligation per GRC settlement agreement of
return-on-year-end-equity exceeding 10.0-10.5%), $890-$940m Boardman-
Hemingway (B-H) transmission line under development (IDA interest at 21%, COD
2018, BPA recognized line B-H as “top priority”, draft EIS expected in 1H13), June
2013 IRP filing to include options for 2016 capacity needs to offset B-H delays, no
amortization of ADITC needed in 2012 ($45m can be allocated to 2013-2014 return on equity floor of 9.5% of year-end shareholder equity calculation), following two common dividend increases in 2012 representing annualized +27% increase over 2011 dividend management to recommend to Board at least a 10% increase in dividend in September 2013, receipt of 30-year federal license for continued operation of the Swan Falls hydroelectric facility, regional economy improving (service territory unemployment rate at 6.9% currently vs 10% in 2011, new business activity), modest
load growth expected in 2013 and 1.0-1.3% load growth expected post-2013.

COMPANY & MARKET DATA
Price (November 1, 2012) $44.80
Price Target, Excl Dividends (YE12) $49.00
Prior Target $47.00
52 - Week Range $38.17-$45.67
Mkt. Capitalization (mill) $2,200
Enterprise Value (mill) $3,675
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 207
Book Value per Share (2Q12A) $33.74
Dividend (FY12E) / Yield $1.52 3.39%
FY2011A FY2012E FY2013E
Revenue (mill) $1,121 $1,235 $1,251
1Q EPS $0.60 $0.50A
2Q EPS $0.42 $0.71A
3Q EPS $2.16 $1.84A
4Q EPS $0.18 .$0.29E
EPS $3.36 $3.34 $3.26
Prior EPS $3.26 $3.23
Consensus EPS $3.27 $3.23
P/E 13.3x 13.4x 13.7x
EV/EBITDA 12.2x 9.3x 9.4x
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
$50
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

November 2, 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)

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 10/31/12)
Buy: 75% (32% are banking clients)
Neutral: 24% (5% 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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this report and are subject to change without notice.

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