IDANOTE121311.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))
ADITC Extension Application Settlement Stipulation – Raising Estimates
and Target and Raising to BUY from NEUTRAL
Highlights
• We are raising our rating to BUY from NEUTRAL on IDA shares. Our revised price target of
$45 per share (previously $43 p/s) implies a 2012/2013 P/E of 14.5x/13.9x our revised EPS estimates of $3.10/$3.23 (previously $3.02/$3.10). Our 2011 EPS estimate is now $3.35
(previously $3.40) and reflects the expected 4Q11 charge of $15m (previously $10m) representing the additional portion of estimated customer sharing per the ADITC extension
application settlement announced last night (pending IPUC approval).
• On December 12, 2011, Idaho Power, IPUC Staff and a large industrial customer reached a settlement stipulation. Specifically, Idaho Power may use up to $45m in aggregate of deferred
investment tax credits (ADITC) over a three year-period (2012-2014) to reach a minimum 9.5% return-on-year-end equity. No more than $25m can be used in any one year. If Idaho Power
return on year-end equity for 2012-2014 exceeds 10.0% but less than 10.5% then equal sharing (50/50) between Idaho Power and customers would be triggered. If Idaho Power return on year-
end equity for 2012-2014 exceeds 10.5% then 75% customer sharing and 25% Idaho Power
sharing would be triggered. The previously outlined return on year-end equity thresholds
(9.5%,10.0%,10.5%) would be automatically adjusted in the event the IPUC approves changes
to Idaho Power’s ROE in a future general rate case proceeding (including Langley Gulch).
Specifically, the 9.5% return on year-end equity would be replaced by 95% of the new authorized
return on equity, the 10.0% return on year-end equity would be reestablished at the new return on equity amount, and the 10.5% return on year-end equity would be replaced by 105% of the
new authorized return on equity. Also, Idaho Power would allocate 75% of its share of the 2011 jurisdictional earnings above 10.5% return on year-end equity. As a result, we expect IDA to
record a pre-tax charge of approximately $15m in 4Q11 (versus previous sharing expectation of $10m).
• Staff recommends the Commission establish a comment period through December 20, 2011,
allowing written comments on the Company’s Application and the Settlement Stipulation. The matter will then be fully submitted, enabling the Commission to issue an Order by December 30,
2011.
• We note the ADITC extension settlement stipulation is for the 3-year period 2012-2014 rather
than a 2-year period previously filed for in IDA’s original ADITC extension application. In our
opinion, the settlement offers a stable earnings stream with an attractive earnings floor (9.5%
year-end equity earnings floor), thereby, providing earnings visibility through 2014. Further, the
customer benefits by an additional $5m in credits ($15m total compared with previous refund of
$10m) related to 2011 sharing and could benefit again over the next three years (2012-2014) in the event that Idaho Power returns exceed the 10% threshold of year-end equity.
• We note the improved earnings visibility through 2014 due to the likely IPUC approval (by year-
end 2011) of the ADITC extension settlement stipulation filed yesterday and general rate case settlement stipulation filed a few months ago. We also note the value of a 9.5% earnings floor on
year-end equity, especially during a period of uncertain industry-wide rate case cycles (rate shock to customers, declining allowed ROE trends, cost disallowances and regulatory lag).
Considering our improved earnings outlook, increased multi-year EPS estimates, and increased price target, we now rate IDA shares a BUY.
• In addition to our favorable view of the ADITC extension settlement stipulation (pending IPUC
approval), we expect a significant common dividend increase in 2012. We believe IDA
possesses the financial flexibility and liquidity to raise the dividend 25% to $1.50 p/s during 2012,
implying a 48% 2012E payout ratio and near the low-end of the 50-60% target payout ratio
adopted by the Board (1Q12 Board dividend decision possible). Lastly, we see additional longer-
term rate base and earnings growth supported by the Boardman-to-Hemingway transmission line
needed to maintain system reliability ($820m total cost, IDA 30-50% interest, COD 2016).
COMPANY & MARKET DATA
Price (December 12, 2011) $40.43
Price Target, Excl Dividends (YE11) $45.00
Prior Target $43.00
52 - Week Range $33.88-$41.97
Mkt. Capitalization (mill) $1,986
Enterprise Value (mill) $3,461
FD Shares Outstanding (mill) 49
Avg. Daily Trading Vol. (000) 218
Book Value per Share (3Q11A) $31.45
Dividend (FY11E) / Yield $1.20 3.0%
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 $3.40 $3.02
Consensus EPS $3.08 $3.04
P/E 13.7x 12.1x 13.0x
EV/EBITDA 11.0x 11.5x 9.1x
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

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

December 13, 2011
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
FINANCIAL SUMMARY1
EPS 2.17 2.64 2.9 3.35 3.10 3.23
P/E ratio 18.64 15.34 13.69 12.08 13.03 12.51
EBITDAPS 6.45 6.66 6.51 6.14 7.76 8.00
P/EBITDAPS 6.27 6.07 6.21 6.59 5.21 5.06Free CFPS -2.36 0.69 -0.68 -1.17 -0.09 1.55
P/Free CFPS -17.14 58.72 -59.49 -34.48 -448.29 26.00
DPS 1.20 1.20 1.20 1.20 1.50 1.73
Dividend yield 3.0% 3.0% 3.0% 3.0% 3.7% 4.3%Dividend payout ratio 55.3% 45.5% 40.6% 35.8% 48.3% 53.4%
BV PS 28.80 29.71 31.76 34.13 35.65 37.02P/BV PS 1.40 1.36 1.27 1.18 1.13 1.09
Dilluted Shares Out 45,379 47,182 48,340 48,940 48,940 48,940
Enterprise value 3,009,296 3,264,311 3,213,996 3,461,089 3,538,912 3,547,246EV/Sales 3.13 3.11 3.10 3.09 2.90 2.84
EV/EBITDA 10.28 10.39 10.22 11.53 9.32 9.07EV/EBIT 15.80 14.87 14.82 17.08 13.16 12.94
INCOME STATEMENT (USDm)Revenues 960,414 1,049,800 1,036,029 1,120,689 1,220,143 1,251,210
Gross margin 190,667 203,583 198,670 180,851 256,655 265,837
Operating EBITDA 292,753 314,209 314,591 300,250 379,635 391,277Depreciation & Amortization 102,086 110,626 115,921 119,399 122,981 125,440
EBIT 190,501 219,547 216,843 202,595 268,848 274,030
Interest expense 73,056 72,810 75,114 67,925 79,600 79,600
Net income 98,414 124,350 142,798 163,837 151,864 158,156
Net income per share 2.17 2.64 2.95 3.35 3.10 3.23
CASH FLOW (USDm)Cash flow from operations 136,513 284,425 305,400 267,623 260,586 271,088
Cash flow from investing (202,824) (242,405) (328,334) (318,357) (265,000) (195,000)
Capital expenditures 243,544 251,937 338,252 325,000 265,000 195,000
Cash flow from financing 67,173 2,139 198,624 (170,592) 26,590 (84,422)Common dividends (54,239) (56,820) (57,872) (58,728) (73,410) (84,422)
Free cash flow (107,031) 32,488 (32,852) (57,377) (4,414) 76,088
BALANCE SHEET (USDm)
Cash and marketable sec 8,828 52,987 228,677 7,351 29,527 21,193
Total assets 4,022,845 4,238,727 4,676,055 4,578,513 4,680,709 4,669,935Total debt/lease 1,183,451 1,409,730 1,488,287 1,489,795 1,589,795 1,589,795
Total liabilities 2,715,974 2,905,637 3,140,071 3,019,007 3,119,007 3,119,007Shareholders' equity 1,306,871 1,401,544 1,535,284 1,670,281 1,744,485 1,811,719
RATIO ANALYSISSales growth (%) 9.2% 9.3% -1.3% 8.2% 8.9% 2.5%
Gross margin/sales (%) 19.9% 19.4% 19.2% 16.1% 21.0% 21.2%
EBIT/Assets 4.7% 5.2% 4.6% 4.4% 5.7% 5.9%CFO/Assets 3.4% 6.7% 6.5% 5.8% 5.6% 5.8%
ROA 2.4% 2.9% 3.1% 3.6% 3.2% 3.4%
ROE 7.5% 8.9% 9.3% 9.8% 9.5% 9.5%
Total debt/total capital 47.5% 50.1% 49.2% 47.1% 47.7% 46.7%Total debt/EBITDA 4.0 4.5 4.7 5.0 4.2 4.1
EBITDA/interest expense 4.0 4.3 4.2 4.4 4.8 4.9
FFO/Debt 20.2% 20.5% 18.0% 16.4% 17.1%
RATE BASE
Im lied Rate Base2 2,700,403.03$ 2,825,324.85$
ADITC EXTENSION ANALYSIS
Idaho Power (IPC) year-end shareholder equity 1,587,481 1,648,665
Idaho Power Idaho-urisdictional Earnin s 144,778 151,141
Idaho Power Oregon-jurisdictional Earnings 5,610 5,610Total Idaho Power Earnings Per Share $3.07 $3.20
Financial, Ida-West, Holdco $0.03 $0.03
Consolidated EPS $3.10 $3.23
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 $397m Langley Gluch with COD expected mid-year 2012.
32012-2014 rate structure pending IPUC approval of ADITC extension settlement and 2011 GRC settlement stipulation
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 11/30/11)
Buy 76% (30% are banking clients)
Neutral 24% (11% 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.

GENERAL DISCLAIMERS
Information and opinions presented in this report have been obtained or derived from sources believed by Ladenburg Thalmann & Co.
Inc. to be reliable. The opinions, estimates and projections contained in this report are those of Ladenburg Thalmann as of the date of
this report and are subject to change without notice.

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