IDACORP
1221 W. Idaho Street
Boise, ID 83702
February 9, 2006
FOR IMMEDIATE RELEASE
Lawrence F. Spencer, Director of Investor Relations
Phone: (208) 388-2664
lspencer@idacorpinc.com
IDACORP Announces Fourth Quarter and 2005 Results
2005 Year-End Highlights
2005 net income of $63.7 million or $1.50 per diluted share versus $73.0 million or $1.90 per share in 2004
Utility operating income increases from $109.0 million in 2004 to $151.7 million in 2005
Record growth in customers of approximately 17,000
4th Quarter Highlights
2005 earnings per diluted share of $0.18 versus $0.37 in 2004
Utility operating income increases 8.2 percent over 2004 levels to $31.8 million
General rate case filed in October
Goodwill write-off at IDACOMM of $10 million or $0.24 per share
Progress made in settling California refund proceeding
BOISE--IDACORP, Inc. (NYSE:IDA) today reported 2005 net income of $63.7
million ($1.50 per diluted share) as compared with $73.0 million ($1.90 per share) in 2004. Idaho Power Company, IDACORP's principal operating subsidiary, reported earnings per diluted share of $1.70 in 2005 as compared with $1.71 in 2004. Operating income at Idaho Power Company increased 39.1 percent over 2004 levels to $151.7 million.
"The increase in our operating income at Idaho Power Company over 2004 is indicative of our success in executing our strategy within the core business. Continued strong customer growth combined with timely recovery of our investments in utility infrastructure lifted operating income over 2004 levels," said IDACORP President and Chief Executive Officer Jan B. Packwood. "The current stream flow forecast indicates better operating conditions in 2006 that should provide the opportunity for further improvement if we are successful in obtaining a favorable resolution to our current Idaho rate case."
2005 Full Year Performance Summary
The key components of the change in annual IDACORP net income are:
Idaho Power's earnings increased to $72 million, a $6 million increase over last year. This increase resulted primarily from improved operating margins resulting from the implementation of general rate increases in June of both years. Idaho Power set another record for annual general business customer growth with a gain of 16,737 customers to 457,146. This represents a 3.8 percent increase year-over-year.
IDACOMM lost $13 million in 2005 compared to $2 million in 2004. In the fourth quarter of 2005, IDACOMM recorded a $10 million goodwill impairment, which resulted principally from a revision to the company's business strategy and decision to phase out the broadband-over-powerline portion of its business.
Net loss at IdaTech increased $3 million, as that subsidiary continues in its product development phase. The increase results from a $3 million reduction in sales of products in development, and a $2 million increase in product development costs.
Earnings at IDACORP Energy increased from $2 million to $5 million, due primarily to a reduction in the allowance for uncollectible accounts due from California parties in the California refund proceeding. IDACORP Energy is in settlement negotiations with several parties related to legal actions surrounding transactions in the California markets in 2000 and 2001. If the settlement agreement is finalized as currently contemplated and is subsequently approved by the Federal Regulatory Energy Commission, IDACORP Energy's required reserve would be reduced. Based upon management's assessment, the allowance account was reduced by $9.5 million in the fourth quarter of 2005. In 2004, IDACORP Energy recorded $4 million of gains on settlements of legal disputes.
In 2005, IDACORP Financial contributed $2 million less to earnings than in the prior year. In 2004, IDACORP Financial recorded a $2 million gain on the sale of its investment in the El Cortez Hotel in San Diego, California.
Per share amounts in 2005 were also affected by the issuance of approximately four million shares of common stock in December 2004.
Fourth Quarter Performance Summary
The key components of the change in fourth quarter IDACORP net income are:
Idaho Power's fourth quarter earnings increased from $14.6 million in 2004 to $16.5 million in 2005 reflecting the June 2005 rate increase along with customer growth. The fourth quarter 2004 results of $0.37 per share included the benefits received from the irrigation load reduction program resolution of $13.6 million or $0.21 per share.
Earnings in the fourth quarter were lower primarily due to recording $10 million ($0.24 per diluted share) of goodwill impairment at IDACOMM, partially offset by a reduction in IDACORP Energy's allowance for bad debts of $9.5 million ($0.13 per diluted share after tax).
Holding company results in the fourth quarter 2005 reflect the reversal of intraperiod tax allocations from the first nine months of the year, in accordance with interim reporting requirements.
Fourth quarter earnings per share amounts in 2005 were also affected by the issuance of approximately four million shares of common stock in December 2004.
Analysis of Earnings Per Share
The following table summarizes earnings (loss) per diluted share from each
business:
| Three Months Ended | Year-To-Date | ||
Subsidiary | 12/31/05 | 12/31/04 | 12/31/05 | 12/31/04 |
|
|
|
|
|
Idaho Power Company | $ 0.39 | $ 0.37 | $ 1.70 | $ 1.71 |
IDACORP Energy | 0.13 | - | 0.12 | 0.06 |
IDACORP Financial Services | 0.07 | 0.09 | 0.26 | 0.35 |
Ida-West Energy | 0.02 | - | 0.06 | 0.08 |
IdaTech | (0.05) | (0.04) | (0.21) | (0.15) |
IDACOMM | (0.28) | (0.03) | (0.31) | (0.05) |
Holding Company | (0.10) | (0.02) | (0.12) | (0.10) |
| $ 0.18 | $ 0.37 | $ 1.50 | $ 1.90 |
The following table summarizes the effect of certain items on earnings per diluted share:
| Three Months Ended | Year-To-Date | ||
| 12/31/05 | 12/31/04 | 12/31/05 | 12/31/04 |
Idaho Power Company |
|
|
|
|
Irrigation Load Reduction |
| $ 0.21 |
| $ 0.21 |
Reverse regulatory tax liability |
|
|
| 0.43 |
General rate case settlement |
|
|
| (0.31) |
Financing costs - preferred stock |
|
|
| (0.05) |
Disallowed Rate Case Costs |
|
|
| (0.14) |
IDACORP Financial Services |
|
|
|
|
Sale of El Cortez |
|
|
| 0.05 |
IDACORP Energy |
|
|
|
|
Settlement of legal matters |
|
|
| 0.08 |
Reduction in Allowance for Bad Debt | $0.13 |
| $0.13 |
|
Ida-West Energy |
|
|
|
|
Debt Restructure |
|
|
| 0.06 |
IDACOMM |
|
|
|
|
Goodwill Impairment Charge | (0.24) |
| (0.24) |
|
2006 Outlook
The February 7, 2006 hydrological survey shows Snake River Basin snow pack levels at 135 percent of average. The Northwest River Forecast Center (NWRFC) currently projects 8.0 million acre-feet (maf) of water will flow into Brownlee Reservoir during the April-through-July 2006 period. The NWRFC's 30-year average measured inflow into Brownlee is 6.3 maf during the period. In 2005, April-July inflows were 3.6 maf.
Through January 2006, heating degree days were nearly 20 percent less than normal and more than 11 percent less than last January.
Projected Key Operating & Financial Metrics - 2006
The projected key operating and financial metrics for 2006 are:
Metric | Current Estimate (*) |
Idaho Power Company Operation & Maintenance Expense (Millions) | $250-$260 |
Idaho Power Company Capital Expenditures (Millions) | $190-$200 |
Idaho Power Company Hydroelectric Generation (Million MWh) | 8.5-10.5 |
Non-regulated Subsidiary Earnings Per Share from Continuing Operations | $(0.05)-$0.00 |
Effective Tax Rates: Idaho Power Company Consolidated - IDACORP |
38%-42% 20%-25% |
(*) Key operating and financial metrics will be updated quarterly.
Recent Events
In October 2005, Idaho Power filed with the Idaho Commission for an additional $44.0 million in annual revenue or an overall average increase of 7.8 percent to base rates. Key dates in the general rate case over the next few months are:
DATE | ACTION |
February 7, 14 and 16 | Settlement Conferences for the parties |
March 3 | Staff and Intervenor prefile testimony |
April 10 - 13 | Technical Hearing in Boise |
May 24 | Commission Order anticipated |
During the fourth quarter of 2005, Idaho Power sold 69,500 excess sulfur dioxide (SO2) emission allowances (out of a total of approximately 107,000 excess allowances) on the open market for approximately $71 million. Subsequently, Idaho Power sold an additional 5,000 emission allowances for approximately $7.5 million. Idaho Power now is seeking an order from the Idaho Public Utilities Commission to determine the accounting treatment for these transactions and the allocation of proceeds between retail customers and shareholders.
Direct LINK Launch
IDACORP news and information can now be sent directly to your e-mail inbox. To register for this service, go to the "Newsroom" area of the company's Web site (http:www.idacorpinc.com) and select "Direct LINK Sign Up" from the menu at the far left of the page.
Web Cast / Conference Call
The company 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. Details of the conference call logistics are posted on the company's Web site (http:www.idacorpinc.com). A replay of the conference call will be available on the company's Web site for a period of twelve months. IDACORP and Idaho Power expect to file their combined Annual Report on Form 10-K with the Securities and Exchange Commission on March 7.
Background Information / Safe Harbor Statement
Boise, Idaho-based IDACORP, formed in 1998, is a holding company comprised of Idaho Power
Company, a regulated electric utility; IDACORP Financial, a holder of affordable housing projects and other real estate investments; IdaTech, a developer of integrated fuel cell systems; IDACOMM, a provider of telecommunication services and commercial Internet services; and Ida-West Energy, an operator of small hydroelectric generation projects that satisfy the requirements of the Public Utility Regulatory Policies Act of 1978.
Certain statements contained in this news release, including statements with respect to future
earnings, ongoing operations, and financial conditions, are "forward-looking statements" within the meaning of federal securities laws. Although IDACORP and Idaho Power believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Factors that could cause actual results to differ materially from the forward-looking statements include: changes in governmental policies, including new interpretations of existing policies, and regulatory actions, and regulatory audits, including those of the Federal Energy Regulatory Commission, the Idaho Public Utilities Commission, the Oregon Public Utility Commission and the Internal Revenue Service with respect to allowed rates of return, industry and rate structure, day-to-day business operations, acquisition and disposal of assets and facilities, operation and construction of plant facilities, relicensing of hydroelectric projects, recovery of purchased power expenses, recovery of other capital investments, present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs) and other refund proceedings; changes arising from the recently enacted Energy Policy Act of 2005; litigation and regulatory proceedings, including those resulting from the energy situation in the western United States, and settlements that influence business and profitability; changes in and compliance with environmental, endangered species and safety laws and policies; weather variations affecting hydroelectric generating conditions and customer energy usage; over-appropriation of surface and groundwater in the Snake River Basin resulting in reduced generation at hydroelectric facilities; construction of power generating facilities including inability to obtain required governmental permits and approvals, and risks related to contracting, construction and start-up; operation of power generating facilities including breakdown or failure of equipment, performance below expected levels, competition, fuel supply, including availability, transportation and prices, and transmission; impacts from the potential formation of a regional transmission organization; population growth rates and demographic patterns; market demand and prices for energy, including structural market changes; changes in operating expenses and capital expenditures and fluctuations in sources and uses of cash; results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by factors such as credit ratings and general economic conditions; actions by credit rating agencies, including changes in rating criteria and new interpretations of existing criteria; homeland security, natural disasters, acts of war or terrorism; market conditions and technological developments that could affect the operations and prospects of IDACORP's subsidiaries or their competitors; increasing health care costs and the resulting effect on health insurance premiums paid for employees; performance of the stock market and the changing interest rate environment, which affect the amount of required contributions to pension plans, as well as the reported costs of providing pension and other postretirement benefits; increasing costs of insurance, changes in coverage terms and the ability to obtain insurance; changes in tax rates or policies, interest rates or rates of inflation; adoption of or changes in critical accounting policies or estimates; and new accounting or Securities and Exchange Commission requirements, or new interpretation 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.
IDACORP, Inc.
Condensed Consolidated Statements of Income
For Periods Ended December 31, 2005 and 2004
(unaudited)
(Thousands of Dollars, except per share amounts)
Three Months Ended Year-To-Date
12/31/05 12/31/04 12/31/05 12/31/04
Operating Revenues:
Electric Utility:
General business............................. $ 163,081 $ 144,686 $ 667,270 $ 635,835 Off-system sales 37,605.......................................... 21,249 142,794 121,148
Other revenues................................. 4,146 24,334 27,619 62,526
Total electric utility revenues........... 204,832 190,269 837,683 819,509
Other.................................................. 5,817 6,516 21,805 21,554
Total Operating Revenues............... 210,649 196,785 859,488 841,063
Operating Expenses:
Electric Utility:
Purchased power.............................. 59,907 32,765 222,310 195,642
Fuel expense................................... 25,680 25,898 103,164 103,261
Power cost adjustment..................... (1,322) 8,746 (2,995) 39,184
Other operations & maintenance........ 58,353 64,575 241,209 252,318
Depreciation..................................... 25,252 25,395 101,485 101,015
Taxes other than income taxes.......... 5,212 3,554 20,856 19,090
Total electric utility expenses......... 173,082 160,933 686,029 710,510
Other:
Expense.......................................... 1,703 13,081 35,440 37,341
Goodwill Impairment......................... 9,969 - 10,270 -
Total Operating Expenses.............. 184,754 174,014 731,739 747,851
Operating Income (Loss):
Electric Utility..................................... 31,750 29,336 151,654 108,999
Other.................................................. (5,855) (6,565) (23,905) (15,787)
Total Operating Income.................. 25,895 22,771 127,749 93,212
Other Income...................................... 4,376 5,736 17,722 29,205
Earnings (Loss) of Unconsolidated
Equity-Method Investments............... (1,297) (1,869) (713) 1,050
Other Expense.................................... 2,095 2,515 8,006 12,115
Interest Expense and Preferred Dividends:
Interest on long-term debt..................... 14,246 14,309 56,930 54,937
Other interest...................................... 1,362 739 3,241 3,379
Preferred dividends of Idaho Power ....... - - - 4,823
Total Interest and
Preferred Dividends........................ 15,608 15,048 60,171 63,139
Income Before Income Taxes................. 11,271 9,075 76,581 48,213
Income Tax Expense (Benefit)................ 3,744 (5,191) 12,920 (24,770)
Net Income .......................................... $ 7,527 $ 14,266 $ 63,661 $ 72,983
Weighted Average Common Shares
Outstanding (000's)............................ 42,374 38,863 42,279 38,361
Earnings per Share of Common Stock
Basic................................................. $ 0.18 $ 0.37 $ 1.51 $ 1.90
Diluted................................................ $ 0.18 $ 0.37 $ 1.50 $ 1.90
Dividends Paid per Share of Common
Stock................................................. $ 0.30 $ 0.30 $ 1.20 $ 1.20
IDACORP, Inc.
Condensed Consolidated Statements of Cash Flows
For Twelve Months Ended December 31, 2005 and 2004
Summary Financial Information
(unaudited)
(Thousands of Dollars)
Twelve Months Ended
12/31/2005 12/31/2004
Operating Activities
Net Income................................................................. $ 63,661 $ 72,983
Adjustments to reconcile net income to
net cash provided by operating activities:
Impairment of assets............................................. - 9,075
Unrealized losses from energy marketing activities... 17 131
Depreciation and amortization................................. 124,124 124,192
Deferred taxes and investment tax credits................ (31,769) (33,912)
Changes in regulatory assets................................. 7,275 16,788
Gain on sale of assets........................................... (2,128) (4,475)
Gain on extinguishment of debt............................... - (7,188)
Undistributed (earnings) losses of subsidiaries......... (16,762) 2,495
Goodwill impairment.............................................. 10,270 -
Change in:
Receivables and prepayments............................. (17,165) (1,442)
Accounts payable and other accrued liabilities...... 883 15,806
Taxes receivable/accrued.................................... 26,412 717
Other................................................................. (4,260) (474)
Net cash provided by operating activities.................. 160,558 194,696
Investing Activities
Additions to property, plant and equipment.................... (195,537) (199,770)
Sale of emission allowances......................................... 70,757 -
Other.......................................................................... 36,768 (29,870)
Net cash used in investing activities........................ (88,012) (229,640)
Financing Activities
Issuance of long-term debt........................................... 64,992 106,442
Issuance of common stock........................................... 6,296 115,690
Retirement of long-term debt......................................... (83,067) (79,890)
Retirement of preferred stock of IPC.............................. - (52,351)
Dividends on common stock......................................... (50,690) (45,838)
Increase (decrease) in short-term borrowings................. 23,830 (58,250)
Other.......................................................................... (4,954) (2,615)
Net cash used in financing activities........................ (43,593) (16,812)
Net increase (decrease) in cash and cash equivalents.... 28,953 (51,756)
Cash and cash equivalents - beginning of period............. 23,403 75,159
Cash and cash equivalents - end of period..................... $ 52,356 $ 23,403
IDACORP, Inc.
Condensed Consolidated Balance Sheets
As of December 31, 2005 and 2004
Summary Financial Information
(unaudited)
(Thousands of Dollars)
12/31/05 12/31/04
Assets
Cash and cash equivalents.................................. $ 52,356 $ 23,403
Receivables, net of allowance.............................. 87,030 57,956
Employee notes................................................. 2,951 3,523
Energy marketing assets.................................... 23,859 9,203
Other current assets........................................... 131,324 127,331
Total current assets......................................... 297,520 221,416
Investments....................................................... 191,623 223,061
Property, plant and equipment-net........................ 2,314,259 2,209,462
Energy marketing assets - long-term.................... 22,189 16,635
Regulatory assets.............................................. 415,177 433,271
Employee notes - long-term................................ 2,862 3,746
Other assets...................................................... 120,496 126,581
Total other assets............................................ 560,724 580,233
Total Assets................................................ $ 3,364,126 $ 3,234,172
Liabilities and Shareholders' Equity
Current maturities of long-term debt...................... $ 16,307 $ 78,603
Notes payable.................................................... 60,100 36,270
Accounts payable............................................... 83,744 79,156
Energy marketing liabilities.................................. 24,093 9,420
Other current liabilities........................................ 109,341 82,009
Total current liabilities...................................... 293,585 285,458
Deferred income taxes........................................ 521,855 555,774
Energy marketing liabilities - long-term................. 22,189 16,635
Regulatory liabilities............................................ 345,109 275,854
Other liabilities................................................... 132,557 112,616
Total other liabilities......................................... 1,021,710 960,879
Long-term debt................................................... 1,023,580 979,549
Shareholders' equity........................................... 1,025,251 1,008,286
Total Liabilities & Shareholders' Equity........... $ 3,364,126 $ 3,234,172
Idaho Power Company Supplemental Operating Statistics
Three Months Ended Year-To-Date
12/31/05 12/31/04 12/31/05 12/31/04
Energy Use - MWh
Residential.................................. 1,336,060 1,255,532 4,760,275 4,580,337
Commercial................................. 919,701 905,964 3,638,694 3,560,911
Industrial..................................... 874,799 859,407 3,422,616 3,334,955
Irrigation...................................... 81,710 81,433 1,467,227 1,763,387
Total General Business................ 3,212,270 3,102,336 13,288,812 13,239,590
Off-System Sales......................... 504,803 446,024 2,773,852 2,885,350
Total........................................ 3,717,073 3,548,360 16,062,664 16,124,940
Revenue ($000's)
Residential.................................. $ 83,981 $ 74,436 $ 299,488 $ 274,313
Commercial................................. 43,722 39,924 173,268 164,053
Industrial..................................... 31,366 27,522 118,259 111,797
Irrigation...................................... 4,012 2,804 76,255 85,672
Total General Business................ 163,081 144,686 667,270 635,835
Off-System Sales......................... 37,605 21,249 142,794 121,148
Total........................................ $ 200,686 $ 165,935 $ 810,064 $ 756,983
Customers - - Period End
Residential.................................. 380,952 366,218
Commercial................................. 58,087 56,274
Industrial..................................... 132 126
Irrigation...................................... 17,975 17,791
Total........................................ 457,146 440,409
