BOISE, Idaho, Feb. 22, 2012 /PRNewswire/ -- IDACORP, Inc.
(NYSE: IDA) reported 2011 net income attributable to IDACORP of
$166.7 million, or $3.36 per diluted share, compared to $142.8 million, or $2.95 per diluted share in 2010. IDACORP
reported fourth quarter 2011 net income attributable to IDACORP of
$9.0 million, or $0.18 per diluted share, compared to $20.4 million, or $0.41 per diluted share in the fourth quarter of
2010. IDACORP's 2012 full year earnings guidance is in the
range of $3.00 to $3.15 per diluted
share.
Idaho Power Company, IDACORP's principal subsidiary, reported
2011 net income of $164.8 million
compared to $140.6 million in 2010,
and net income of $9.3 million in the
fourth quarter of 2011 compared to $18.9
million for the same period in 2010.
"We are pleased to report improved earnings in 2011," said
IDACORP, Inc. President and Chief Executive Officer LaMont Keen. "The strong earnings
performance can be attributed to effective regulatory initiatives,
fiscal prudence in managing costs, and benefits from the uniform
capitalization tax method change at Idaho Power Company," Keen
said.
"Through our innovative regulatory initiatives, both customers
and owners benefited from the improved performance in 2011.
With the renewal of the earnings sharing arrangement in
Idaho for the three-year period
2012 through 2014, customers and owners stand to receive additional
future benefits if specified earnings thresholds are achieved.
We believe this agreement, along with continued fiscal
stewardship and the impact of base rate adjustments, positions us
well for 2012," Keen added.
Performance Summary
A summary of financial highlights for the years ended
December 31, 2011 and 2010, is as
follows (in thousands except per share amounts):
|
|
|
Year
ended
|
|
|
December
31,
|
|
|
2011
|
2010
|
|
General business
revenues
|
$
|
834,545
|
$
|
870,371
|
|
Total operating
revenue
|
|
1,026,756
|
|
1,036,029
|
|
Total operating
expenses
|
|
862,508
|
|
837,359
|
|
Income from
operations
|
|
164,248
|
|
198,670
|
|
Net income attributable to
IDACORP
|
|
166,693
|
|
142,798
|
|
Average outstanding shares –
diluted
|
|
49,558
|
|
48,340
|
|
Earnings per diluted
share
|
$
|
3.36
|
$
|
2.95
|
|
|
|
|
|
|
|
|
|
The following table presents a reconciliation of net income
attributable to IDACORP, Inc. for the year ended December 31, 2010 to December 31, 2011 (items are in millions and are
before tax unless otherwise noted):
|
|
|
Net income attributable to
IDACORP, Inc. - December 31, 2010
|
$
|
142.8
|
|
Change in Idaho Power net income
before taxes:
|
|
|
|
|
|
|
Rate and
other regulatory changes, including power cost, pension
|
|
|
|
|
|
|
|
expense, and fixed
cost adjustment mechanisms
|
|
$
|
26.3
|
|
|
|
Changes in
sales volumes
|
|
|
9.8
|
|
|
|
Increased
transmission service revenues
|
|
|
7.4
|
|
|
|
Increase in
other operating and maintenance expenses:
|
|
|
|
|
|
|
|
Pension and
payroll related expenses (excluding pension impact
|
|
|
|
|
|
|
|
of
settlement stipulation below)
|
|
|
(17.2)
|
|
|
|
|
Thermal plant
expenses
|
|
|
(5.0)
|
|
|
|
|
Other
|
|
|
(2.2)
|
|
|
|
Increased
depreciation expense
|
|
|
(3.9)
|
|
|
|
Increased
property taxes
|
|
|
(4.8)
|
|
|
|
Other
changes in operating income, net
|
|
|
1.1
|
|
|
|
Increase in
Idaho Power operating income prior to sharing mechanisms
|
|
|
11.5
|
|
|
|
|
Additional pension
expense as a result of settlement stipulation
|
(20.3)
|
|
|
|
|
|
|
Decrease in
revenues as a result of sharing mechanism
|
(27.1)
|
|
|
|
|
|
Decrease in
operating income as a result of sharing mechanisms
|
|
|
(47.4)
|
|
|
|
|
Change in Idaho Power operating
income
|
|
|
(35.9)
|
|
|
|
|
Increase in AFUDC
|
|
|
11.6
|
|
|
|
|
Other net decreases
|
|
|
(3.7)
|
|
|
|
Increases due to tax method
changes and related examination settlements
|
|
|
27.8
|
|
|
|
Changes in other income tax
benefit
|
|
|
24.3
|
|
|
|
Total increase in Idaho Power
net income
|
|
|
|
|
24.1
|
|
Other net decreases, net of
tax
|
|
|
|
|
(0.2)
|
|
|
Net income attributable to
IDACORP, Inc. - December 31, 2011
|
$
|
166.7
|
|
|
|
|
|
|
|
|
|
|
Idaho Power net income increased by $24.1
million in 2011 compared to 2010, largely as a result of
approval by the U.S. Congress Joint Committee on Taxation of the
uniform capitalization method agreement with the IRS, which allowed
for recognition in 2011 of $56.9
million of previously unrecognized tax benefits for tax
years 2009 and prior. This benefit was partially offset by
$47.4 million due to Idaho-jurisdictional sharing mechanisms.
The uniform capitalization method approval contributed to
triggering of the sharing mechanism under Idaho Power's
January 2010 settlement agreement
with the Idaho Public Utilities Commission (IPUC) and other
parties. Under this sharing mechanism, Idaho Power recorded a
$27.1 million reduction in revenues
to be refunded to or to otherwise benefit customers, reflecting the
equal sharing of Idaho-jurisdiction earnings in excess of a
10.5 percent annual return on year-end equity in the Idaho jurisdiction (Idaho ROE).
Additionally, Idaho Power recorded $20.3
million of additional pension expense as a result of an IPUC
order approving a 2011 settlement stipulation that had been
executed by Idaho Power, the IPUC Staff, and one large industrial
customer of Idaho Power. The settlement stipulation provided
that Idaho Power would allocate to customers 75 percent of Idaho
Power's share of 2011 Idaho-jurisdictional earnings over a 10.5
percent Idaho ROE. As agreed to with the IPUC, this
allocation was used to reduce Idaho Power's pension regulatory
asset (reducing a portion of Idaho
customers' future obligation), resulting in the corresponding
recognition of additional pension expense.
Other items influencing the change in Idaho Power's operating
income and annual earnings as compared to 2010 include:
- Several rate orders went into effect in 2010 and 2011 that
impacted current year revenues and had a net positive impact on
operating income. A June 1,
2010 base rate increase benefited 2011 with an additional
five months of increased base rate revenue. A pension expense
recovery rate increase occurred on June 1,
2010 and was further increased on June 1, 2011. Also included in the rate
orders were power cost adjustment (PCA)-related customer rate
decreases on June 1 of both years.
However, concurrent with each PCA rate decrease was a
corresponding reduction in PCA expense. These rate changes,
combined with lower power supply costs net of PCA mechanisms,
improved operating income by approximately $26.3 million for the year.
- Increased sales volumes improved operating income by
$9.8 million. Cooler
temperatures early in the year contributed to an $8.0 million increase in electricity demand from
residential customers, many of whom rely on electric power for
heating systems during the winter months. This increase was
partially offset by a $3.3 million
decrease in irrigation revenues due to a wetter, cooler spring
reducing the need to use irrigation pumps. A 17.7 percent
increase in cooling degree days when compared with the prior year,
particularly an increase in temperature in the late summer months,
drove the remaining increase.
- Transmission system revenues, a component of other revenues,
increased $7.4 million, principally
resulting from increases in wheeling services attributable to
increases in Federal Energy Regulatory Commission transmission
rates that took effect on October 1,
2010 and 2011, and from other facility rental
increases.
- O&M expenses increased, primarily due to an $11.5 million increase in pension expense
associated with the pension recovery rate orders, an increase in
payroll-related costs of $5.7
million, and increased maintenance expense of $5.0 million at the thermal plants. These
increases were partially offset by lower legal expenses of
$2.3 million.
- Depreciation expense increased $3.9
million for the year due to increased plant in service.
- Property tax increased $4.8
million in 2011, primarily due to lower residential and
commercial values in other property classes shifting tax costs to
centrally assessed property.
Prior to the effects of the sharing mechanisms described above,
Idaho Power operating income increased $11.5
million compared to 2010. After the effects of the
sharing mechanism, operating income decreased $35.9 million compared to 2010. Also
contributing to increased earnings at Idaho Power were increases of
$11.6 million in allowance for funds
used during construction (AFUDC), which represents the cost of
financing construction projects with borrowed funds and equity
funds.
2012 Annual Earnings Guidance and Key Operating and Financial
Metrics
IDACORP is initiating its earnings guidance estimate for 2012 in
a range of $3.00 to $3.15 per diluted
share. The 2012 guidance incorporates all of the key
operating and financial assumptions listed below and assumes that
the Langley Gulch power plant is commercially available as of
July 1, 2012 with Idaho Power earning
a return on the plant commencing on that date. This also
includes an estimated use of additional accumulated deferred
investment tax credits of less than $5
million in 2012.
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|
|
2012
Estimate (3)
|
2011
Actual
|
|
Idaho Power Operation &
Maintenance
|
|
|
|
|
Expense (millions)
|
$325-$335
|
$339
|
|
Idaho Power Capital
|
|
|
|
|
Expenditures (millions)
(1)
|
$230-$240
|
$338
|
|
Idaho Power
Hydroelectric
|
|
|
|
|
Generation (million MWh's)
(2)
|
7.5-9.5
|
10.9
|
|
Non-Regulated Subsidiary
Earnings
|
|
|
|
|
and Holding Company Expenses
(millions)
|
$0-$3
|
$1.9
|
|
|
|
(1) The 2012 range for
capital expenditures includes the completion of the Langley Gulch
power plant, and expenditures for the siting and permitting of
major transmission expansions for the Boardman to Hemingway and
Gateway West transmission projects, net of ongoing payments from
third parties participating as joint funders in the permitting
project for future expenditures.
|
|
(2) The estimated
hydroelectric generation range is based on reservoir storage levels
and forecasted weather conditions as of February 12,
2012.
|
|
(3) As of February 22,
2012.
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|
More detailed financial information will be provided in
IDACORP's Annual Report on Form 10-K to be filed today with the
U.S. Securities and Exchange Commission and posted to the IDACORP
Web site at www.idacorpinc.com.
Web Cast / Conference Call
IDACORP will hold an analyst conference call today at
2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). All parties
interested in listening may do so through a live Web cast, or by
calling (617) 847-8705 for listen-only mode. The passcode is
80378291. Slides will be included during the conference call.
To access the slide deck, register for the event just prior
to the call at www.idacorpinc.com/financials/confcalls.cfm. A
replay of the conference call will be available on the IDACORP Web
site for a period of 12 months.
Background Information
IDACORP, Inc. (NYSE: IDA) is based in Boise, Idaho and was formed in 1998 as a
holding company. IDACORP subsidiaries include: Idaho Power, a
regulated electric utility; IDACORP Financial, an investor in
affordable housing projects and real estate; and Ida-West Energy,
an operator of small hydroelectric projects. IDACORP's origins lie
with Idaho Power and operations beginning in 1916. Today, Idaho
Power employs approximately 2,000 people who serve nearly 500,000
customers throughout a 24,000-square-mile area in southern
Idaho and eastern Oregon. To learn more, visit
www.idahopower.com or www.idacorpinc.com.
Forward-Looking Statements
In addition to the historical information contained in this
press release, this press release contains (and oral communications
made by IDACORP, Inc. and Idaho Power Company may contain)
statements that relate to future events and expectations and, as
such, constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include 2012 earnings guidance and
estimates of key operating and financial metrics. In
addition, any other statements that express or involve discussions
as to expectations, beliefs, plans, objectives, assumptions, or
future events or performance, often, but not always, through the
use of words or phrases such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "predicts," "projects,"
"may result," "may continue," or similar expressions, are not
statements of historical facts and may be forward-looking.
Forward-looking statements are not guarantees of future
performance and involve estimates, assumptions, risks, and
uncertainties. Actual results, performance, or outcomes may
differ materially from the results discussed in the
statements. In addition to any assumptions and other factors
and matters referred to specifically in connection with such
forward-looking statements, factors that could cause actual results
or outcomes to differ materially from those contained in such
statements include the following: (a) the effect of decisions
by regulatory authorities affecting Idaho Power's ability to
recover costs and/or earn a reasonable rate of return, or otherwise
impacting Idaho Power's operations; (b) the availability of water
for hydroelectric generation; (c) changes in costs and availability
of materials and fuel, and their impact on the cost of
infrastructure maintenance and development, the ability to meet
required loads, and on the wholesale energy market in the western
United States; (d) availability of required permits and approvals,
rights-of-way, and siting, and impediments to contracting,
construction, and start-up, for infrastructure development
projects; (e) increases in capital expenditures and potential
reductions in generation capacity as a result of regulatory
conditions that may be imposed on power plant license renewals, or
the non-renewal of such licenses; (f) operation of power generation
facilities at below expected levels of performance, availability of
electrical transmission capacity, and the availability of fuels for
power generation at thermal plants and wind for wind power
generation, and the ability to integrate wind resources into Idaho
Power's power portfolio; (g) disruptions of Idaho Power's
transmission system or interconnected transmission systems; (h)
costs associated with compliance with current and future laws,
regulations, and policies relating to the environment, natural
resources, and endangered species; (i) the customer growth rate
within Idaho Power's service area; (j) the continuing effects of
the weak economy, including on demand for electricity and wholesale
market prices; (k) changes in and compliance with laws, policies,
and regulations, including new interpretations and enforcement
initiatives by regulatory authorities; (l) global climate change
and regional weather variations affecting customer demand; (m)
weather and other natural phenomena such as earthquakes, floods,
droughts, lightning, wind, and fire and their impact on power
demand and infrastructure; (n) increases in the costs associated
with energy commodity and other derivative instruments; (o) market
prices and demand for energy; (p) the ability to obtain debt and
equity financing or refinance existing debt when necessary or on
favorable terms; (q) general capital market conditions and
government regulation that affect the cost of capital, the ability
to access the capital markets, financing terms, and postretirement
benefit funding obligations; (r) the outcome of litigation and
regulatory proceedings, and penalties, settlements, or awards that
influence business and profitability; (s) reductions in credit
ratings and the resulting impact on access to capital markets; (t)
restrictions on the payment of dividends under certain
circumstances; (u) changes in tax laws or new interpretations of
tax laws, and the availability, use, and regulatory treatment of
tax credits; (v) employee workforce factors; and (w) new accounting
or Securities and Exchange Commission or New York Stock Exchange
requirements, or new interpretations or application of existing
requirements. Any forward-looking statement speaks only as of
the date on which such statement is made. New factors emerge
from time to time and it is not possible for management to predict
all such factors, nor can it assess the impact of any such factor
on the business or the extent to which any factor, or combination
of factors, may cause results to differ materially from those
contained in any forward-looking statement. Readers should
also review the risks and uncertainties listed in IDACORP's and
Idaho Power's most recent Annual Report on Form 10-K and reports on
Forms 8-K and 10-Q filed with the U.S. Securities and Exchange
Commission, including Management's Discussion and Analysis of
Financial Condition and Results of Operations and the risks
described therein from time to time. IDACORP and Idaho Power
disclaim any obligation to update publicly any forward-looking
information, whether in response to new information, future events,
or otherwise, except as required by applicable law.
SOURCE IDACORP, Inc.