Utilities Update 10-08-12.pdf.pdf

Please refer to pages 4-5 of this report for detailed disclosure and certification information.
*D.A. Davidson & Co. makes a market in this security.
INDUSTRY UPDATE
Institutional Equity Research

October 8, 2012 Utilities Update

Prices: (10/8/12)

Industry:
Utilities

Michael Bates
503.603.3045
[e-mail]

Weekly Research Forum Recap: Utilities
Profiling IDA and POR: Steamy Opportunity or Soggy Value Trap?

In our October 8th Weekly Research Forum we highlighted the following:
 Sector dividend yields: Near parity with historical averages (3.5%), but 200bp
above historical average relative to 10-year US Treasury yields.
 Sector valuation trend: Forward year P/Es in an uptrend; 14.5x average multiple
lies ~10% above the historical average.
 Compelling themes: Regulated Electric firms trade at lower valuations and carry
most attractive risk/reward profile in the industry.
 Pacific Northwest utilities: Discounted names with unique drivers.
 IDACORP (IDA* - $43.88 - BUY). Industry-leading dividend growth, constructive
regulatory environment, hidden growth drivers. Most conservative of group.
 Portland General Electric (POR* - $27.32 - BUY). Strong rate base growth,
positive ROE trend, conservative payout ratio. Reward outweighs risk in our view.

A copy of today’s presentation can be found here:
http://www.davidsoncompanies.com/ecm/a_events/files/weeklyforum/PDF/348844.pdf

Please contact your D.A. Davidson & Co. sales representative at 1-800-755-7848 for
further information about participating in our Weekly Research Forum calls or for a
replay of previous presentations.

D.A. Davidson & Co.

2
IDACORP, Inc. - Historical and Projected Operating Results
Source: D.A. Davidson & Co. estimates and company reports
$ millions -- Fiscal year ends 12/31 1Q'11 2Q'11 3Q'11 4Q'11 2011 1Q'12 2Q'12 3Q'12e 4Q'12e 2012e 2013e 2014e
Operating Revenues $251.5 $235.0 $309.6 $230.6 $1,026.8 $241.1 $254.7 $380.8 $261.5 $1,138.2 $1,171.5 $1,196.0
Power Supply Expenses 86.3 71.6 97.1 78.3 333.4 76.0 63.3 106.7 76.8 322.7 331.7 331.7
Gross Margin $165.2 $163.4 $212.5 $152.4 $693.4 $165.1 $191.4 $274.1 $184.8 $815.5 $839.8 $864.3
Operating Expenses:
Other Operations And Maintenance 70.7 85.5 84.6 97.9 338.6 78.5 86.0 93.5 79.2 337.2 342.5 349.3
Energy Efficiency Programs 6.7 5.8 18.5 6.7 37.7 4.5 8.1 22.4 9.1 44.0 46.1 47.2
Depreciation 29.5 29.7 30.1 30.5 119.8 30.5 29.9 33.3 33.7 127.3 135.4 138.8
Taxes Other than Income Taxes 7.2 7.2 7.3 7.2 28.9 8.1 7.8 8.0 8.0 31.9 32.0 34.0
Other Operating Expenses 1.1 0.9 0.6 1.6 4.1 1.1 0.8 1.0 1.0 4.0 4.0 4.0
Total Operating Expenses $115.1 $129.1 $141.1 $143.9 $529.1 $122.8 $132.6 $158.2 $130.9 $544.5 $560.0 $573.3
EBITD $82.8 $64.6 $109.6 $49.1 $306.0 $80.9 $93.3 $150.1 $88.4 $412.7 $411.4 $427.9
Operating Income $50.1 $34.3 $71.4 $8.5 $164.2 $42.3 $58.8 $116.0 $53.8 $271.0 $279.8 $291.0
Other Income 4.5 5.0 6.0 5.6 21.2 6.6 6.6 (0.2) (0.1) 12.9 0.2 2.1
Earnings Of Investments (1.3) (4.4) 2.1 4.5 0.8 1.4 (1.9) 1.0 1.0 1.5 (4.0) (4.0)
Net Interest Expense 19.0 17.6 17.4 17.5 71.5 17.2 17.4 18.5 17.8 71.0 74.6 80.6
Income Before Income Taxes $34.4 $17.3 $62.0 $1.0 $114.7 $33.2 $46.0 $98.3 $36.9 $214.4 $201.4 $208.5
Income Taxes 4.9 (3.7) (45.4) (8.0) (52.1) 8.3 10.6 23.1 8.7 50.7 38.3 39.6
Effective Tax Rate 14.2% -21.1% -73.1% -803.7% -45.4% 25.1% 23.0% 23.5% 23.5% 23.6% 19.0% 19.0%
Net Income $29.5 $21.0 $107.4 $9.0 $166.9 $24.8 $35.4 $75.2 $28.3 $163.7 $163.2 $168.9
Noncontrolling Interest 0.3 (0.1) (0.3) 0.0 (0.2) 0.1 (0.1) 0.1 0.1 0.1 0.3 0.3
Net Income Available For Common $29.7 $20.9 $107.1 $9.0 $166.7 $24.9 $35.3 $75.3 $28.3 $163.8 $163.5 $169.2
Average Diluted Shares Outstanding 49.4 49.5 49.6 49.7 49.6 49.9 50.0 50.1 50.1 50.0 50.3 50.4
Diluted EPS $0.60 $0.42 $2.16 $0.18 $3.36 $0.50 $0.71 $1.50 $0.57 $3.27 $3.25 $3.35
Ratio Analysis:
Return on Average Assets (ttm)3.5% 3.0% 3.8% 3.5% 3.5% 3.4% 3.6% 2.9% 3.2% 3.2% 3.1% 3.1%
Return on Average Equity (ttm)10.5% 9.1% 11.4% 10.5% 10.5% 10.0% 10.7% 8.6% 9.6% 9.6% 9.1% 9.0%
Gross Margin 65.7% 69.5% 68.6% 66.1% 67.5% 68.5% 75.2% 72.0% 70.7% 71.6% 71.7% 72.3%
Operating Margin 19.9% 14.6% 23.1% 3.7% 16.0% 17.6% 23.1% 30.5% 20.6% 23.8% 23.9% 24.3%
Pre-Tax Margin 13.7% 7.4% 20.0% 0.4% 11.2% 13.7% 18.1% 25.8% 14.1% 18.8% 17.2% 17.4%
Net Margin 11.8% 8.9% 34.6% 3.9% 16.2% 10.3% 13.9% 19.8% 10.8% 14.4% 14.0% 14.1%
Dividends Per Common Share $0.30 $0.30 $0.30 $0.30 $1.20 $0.33 $0.33 $0.33 $0.38 $1.37 $1.60 $1.84
Dividend Payout Ratio (ttm) 37.2% 42.4% 33.4% 35.7% 35.7% 37.7% 35.6% 44.6% 41.8% 41.8% 49.1% 54.8%
Dividend Growth 0.0% 0.0% 0.0% 0.0% 0.0% 10.0% 10.0% 10.0% 26.7% 14.2% 16.5% 15.2%
D.A. Davidson & Co.

3
Portland General Electric. - Historical and Projected Operating Results
Source: D.A. Davidson & Co. estimates and company reports
$ in millions -- Fiscal year ends 12/31 1Q'11 2Q'11 3Q'11 4Q'11 2011 1Q'12 2Q'12 3Q'12e 4Q'12e 2012e 2013e 2014e
Operating Revenues $484 $411 $439 $479 $1,813 $479 $413 $461 $498 $1,850 $1,877 $1,896
Resource Costs 194 169 182 215 760 195 156 196 225 772 775 773
Gross Margin $290 $242 $257 $264 $1,053 $284 $257 $264 $273 $1,078 $1,103 $1,123
Operating Expenses:
Production And Distribution 42 55 50 54 201 53 51 51 52 207 213 215
Administrative And Other 52 51 55 60 218 54 56 53 54 217 217 224
Depreciation And Amortization 56 55 59 57 227 62 63 63 63 251 256 264
Taxes Other Than Income Taxes 25 24 25 24 98 27 26 26 28 107 108 110
Total Operating Expenses $175 $185 $189 $195 $744 $196 $196 $193 $197 $782 $794 $814
EBITD $174 $114 $124 $130 $542 $154 $125 $137 $141 $556 $569 $584
Income From Operations $115 $57 $68 $69 $309 $88 $61 $72 $76 $296 $309 $309
Other Income (Expenses)3 2 (3) 4 6 4 1 2 2 9 5 11
Interest Expense 27 28 27 28 110 28 27 28 29 112 101 101
Pretax Income $91 $31 $38 $45 $205 $64 $35 $46 $49 $193 $213 $219
Income Tax Expense (Benefit)22 9 11 16 58 15 9 13 14 51 62 63
Effective Tax Rate 24.2% 29.0% 28.9% 35.6% 28.3% 23.4% 25.7% 29.0% 29.0% 26.6% 29.0% 29.0%
Net Income $69 $22 $27 $29 $147 $49 $26 $32 $35 $142 $151 $155
Average Diluted Shares Outstanding 75.3 75.4 75.4 75.4 75.4 75.4 75.5 75.5 75.5 75.5 75.5 75.5
Diluted EPS $0.92 $0.29 $0.36 $0.38 $1.95 $0.65 $0.34 $0.43 $0.46 $1.88 $2.00 $2.06
Ratio Analysis:
Return on Average Equity (ttm)10.5% 10.3% 8.8% 9.0% 9.0% 7.6% 7.8% 8.1% 8.4% 8.4% 8.6% 8.5%
Return on Average Assets (ttm)3.0% 3.0% 2.6% 2.6% 2.6% 3.2% 2.3% 3.4% 3.4% 2.5% 2.5% 2.5%
EBITDA Margin 36.0% 27.7% 28.2% 27.1% 29.9% 32.2% 30.3% 29.7% 28.3% 30.1% 30.3% 30.8%
Operating Margin 23.8% 13.9% 15.5% 14.4% 17.0% 18.4% 14.8% 15.6% 15.2% 16.0% 16.4% 16.3%
Pre-Tax Margin 18.8% 7.5% 8.7% 9.4% 11.3% 13.4% 8.5% 9.9% 9.8% 10.4% 11.3% 11.5%
Net Margin 14.3% 5.4% 6.2% 6.1% 8.1% 10.2% 6.3% 7.0% 7.0% 7.7% 8.1% 8.2%
Dividends Declared Per Share $0.260 $0.265 $0.265 $0.265 $1.055 $0.265 $0.270 $0.270 $0.270 $1.075 $1.104 $1.137
Dividend Payout Ratio 46.7% 47.5% 55.1% 54.1% 54.1% 62.9% 61.3% 59.2% 57.1% 57.2% 55.2% 55.3%
Dividend Growth Rate 1.9% 1.9% 2.7% 3.0%
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Copyright D.A. Davidson & Co., 2012. All rights reserved.
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I, Michael Bates, attest that (i) all the views expressed in this research report accurately reflect my personal views about the common
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Ratings Information
D.A. Davidson & Co.’s Institutional Research Rating Scale (maintained since 7/9/02): Buy, Neutral, Underperform

D.A. Davidson & Co. Institutional Research Ratings Buy Neutral Underperform
Risk adjusted return potential azbycx
Over 15% total return
expected on a risk adjusted
basis over next 12-18 months
>0-15% return potential
on a risk adjusted basis
over next 12-18 months
Likely to remain flat or lose
value on a risk adjusted basis
over next 12-18 months
Distribution of Ratings (as of 6/30/12) Buy Hold Sell
Corresponding Institutional Research Ratings Buy Neutral Underperform
and Distribution 58% 40% 2%
Corresponding Individual Investor Group Ratings Outperform Market Perform Underperform
and Distribution 80% 20% 0%
Distribution of Combined Ratings 58% 40% 2%
Distribution of companies from whom D.A. Davidson & Co. has received compensation for investment banking services in last 12 mos.
Institutional Coverage 3% 2% 0%
Individual Investor Group Coverage 0% 0% 0%
Distribution of Combined Investment Banking 3% 2% 0%

D.A. Davidson & Co.
Two Centerpointe Drive, Suite 400  Lake Oswego, Oregon 97035  [phone]  [phone]  www.dadavidson.com
Copyright D.A. Davidson & Co., 2012. All rights reserved.
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