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IDACORP Announces Second Quarter 2008 Results
BOISE, Idaho, Aug. 7 /PRNewswire-FirstCall/ -- IDACORP, Inc. (NYSE: IDA) reported 2008 second quarter net income of $17.5 million or 39 cents per diluted share, compared to $18.5 million or 42 cents per diluted share in 2007. Idaho Power Company (IPC), IDACORP’s principal subsidiary, reported second quarter net income of $17.7 million compared to $16.2 million in 2007. "More favorable operating conditions, the sale of a portion of the Southwest Intertie Project rights-of-way and cost containment efforts improved performance at Idaho Power Company," said IDACORP President and Chief Executive Officer J. LaMont Keen. "Even with a decline in the amount of general business sales and a change in the allocation of base net power supply costs that reduced second quarter earnings, we were able to increase the contribution from utility operations. IDACORP’s net income declined as a result of lower returns from IDACORP Financial along with intra-period tax allocations at the holding company," he said. "We remain focused on reducing the gap between our allowed and actual return. To that end, we continue emphasizing timely regulatory filings, management of operating expenses in the face of significant upward pressure, and rigorous efforts to find efficiencies in all areas of our business," Keen added. Analysis of Earnings per Diluted Share The following table presents diluted earnings (losses) per share from the holding company and each IDACORP subsidiary:
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
Earnings (Losses) Per Share(1) From:
Idaho Power Company $0.39 $0.37 $0.87 $0.90
IDACORP Financial Services 0.02 0.04 0.03 0.08
Ida-West Energy 0.02 0.02 0.02 0.02
Holding Company (0.04) (0.01) (0.05) (0.02)
Earnings Per Diluted Share-GAAP $0.39 $0.42 $0.87 $0.98
(1) See "Use of Non-GAAP Financial Measures" below.
Performance Summary A summary of IDACORP’s net income and earnings per diluted share for the second quarter and year-to-date 2008 as compared to 2007 is as follows:
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
Net income ($000’s) $17,515 $18,465 $39,231 $43,113
Average outstanding
shares-diluted (000s) 45,096 43,884 45,050 43,845
Earnings per diluted share $0.39 $0.42 $0.87 $0.98
The key factors affecting the change in IDACORP’s net income for the second quarter of 2008 include (amounts shown are net of income taxes): -- IPC’s net income, the primary component of IDACORP’s net income, was $17.7 million for the quarter, an increase of $1.6 million. The key factors causing the change in IPC’s net income include: -- General business revenue increased $16.2 million, due to an increase of $19.0 million from higher retail base rates and power cost adjustment (PCA) rates partially offset by a $2.8 million decrease from reduced sales. Sales were reduced due to weather variations, primarily affecting irrigation customers, partially offset by customer growth. -- Improved hydroelectric generating conditions decreased net power supply costs (fuel and purchased power less off-system sales) by $10.7 million. -- The PCA deferral decreased $25.2 million primarily due to improved hydroelectric generating conditions, increases in PCA rates, and an increase in the monthly allocation of base net power supply costs, which decreased earnings $5.6 million. It is expected that the third quarter results will reflect a decrease in the monthly allocation of base net power supply costs which will increase earnings approximately $10 million. -- Operations and maintenance expenses decreased $2.0 million primarily due to reduced maintenance costs at thermal facilities. -- The sale of a portion of the Southwest Intertie Project rights-of-way increased net income $1.8 million. -- Bridger Coal Company reduced net income $1.0 million due to increased costs to produce coal. -- Higher interest charges, due to increases in long-term debt balances and increased rates on variable rate instruments, reduced net income $1.4 million. -- Reduced IFS earnings decreased net income $1.1 million due to lower tax benefits from aging investments. -- Net loss at the holding company decreased net income $1.5 million. This loss was primarily due to intra-period tax allocations recorded at the holding company. The key factors affecting the change in IDACORP’s net income for the six months ended June 30, 2008 include (amounts shown are net of income taxes): -- IPC’s net income, the primary component of IDACORP’s net income, was $39.0 million for year-to-date, a decrease of $0.5 million. The key factors causing the change in IPC’s net income include: -- General business revenue increased $34.5 million, due to an increase of $32.0 million from higher retail base rates and PCA rates and $2.5 million due to an increase in usage (weather-related and customer growth). -- Increased fuel expense primarily in the first quarter, due to an increase in contracted coal price and an increase in generation volume at thermal facilities, raised net power supply costs by $4.6 million. -- The PCA deferral decreased $27.5 million primarily due to the net effect of increases in PCA rates and a change to the monthly allocation of base net power supply costs, which decreased earnings $5.6 million, partially offset by increased fuel expenses in the first quarter. -- Operations and maintenance expenses decreased $1.3 million primarily due to reduced maintenance costs at thermal facilities. -- The sale of a portion of the Southwest Intertie Project rights-of-way increased net income $1.8 million. -- Bridger Coal Company reduced net income $2.4 million due to increased costs to produce coal. -- Higher interest charges, due to increases in long-term debt balances and increased rates on variable rate instruments, reduced net income $3.0 million. -- Reduced IFS earnings decreased net income $2.1 million due to lower tax benefits from aging investments. -- Net loss at the holding company decreased net income $1.2 million. These losses were primarily due to intra-period tax allocations recorded at the holding company. 2008 Outlook IPC measured 4.4 million acre-feet (maf) of inflows into Brownlee Reservoir during the April-July 2008 period. The NWRFC’s 30-year average April-July inflows into Brownlee is 6.3 maf. In 2007, April-July inflows were 2.8 maf.
The outlook for key operating and financial metrics is:
2008 Estimates
Key Operating & Financial Metrics (1) Current Previous
Idaho Power Operation &
Maintenance Expense (Millions) No change $285-$295
Idaho Power Capital
Expenditures (Millions) (2) $255-$270 $270-$290
Idaho Power Hydroelectric
Generation (Million MWh) (3) 6.5-7.5 6.0-8.0
Non-Regulated Subsidiary
Earnings Per Share (4) No change $0.05-$0.10
Effective Tax Rates (5):
Idaho Power No change 32%-36%
Consolidated -- IDACORP 22%-26% 20%-24%
(1) Key operating and financial metrics will be updated quarterly.
(2) The decrease in capital expenditures is due to the estimated decline
in new customer connections and the deferral of certain capital
expenditures.
(3) The range of estimated hydroelectric generation has been revised to
reflect refinements related to river flows.
(4) Estimates include contributions from Ida-West Energy and IDACORP
Financial netted against holding company expenses. See "Use of
Non-GAAP Financial Measures" below.
(5) Increase is a result of greater estimated income before tax at IPC
for the year as compared to previous estimates.
Use of Non-GAAP Financial Measures IDACORP’s earnings per diluted share (EPS) is prepared in accordance with generally accepted accounting principles used in the United States (GAAP). EPS by subsidiary and for IDACORP unconsolidated (holding company) is considered "a non-GAAP financial measure." The most directly comparable GAAP financial measure to EPS by subsidiary and for the holding company is IDACORP EPS. EPS by subsidiary and for the holding company, including non-regulated subsidiary EPS in the 2008 outlook, is calculated by dividing the net income or loss of each company by IDACORP’s weighted average common shares outstanding (diluted) for the period. This presentation of EPS by subsidiary and for the holding company is intended to supplement the information available to investors for evaluating the financial performance of IDACORP and its subsidiaries. This non-GAAP financial measure is not intended to replace IDACORP EPS, or any other measure calculated in accordance with GAAP, as an indicator of financial performance. IDACORP’s management uses EPS by subsidiary and for the holding company, in addition to GAAP measures, internally for financial planning and for analysis of performance. IDACORP’s management also uses EPS by subsidiary and for the holding company, including non-regulated subsidiary EPS in the 2008 outlook, as a performance measure when communicating with analysts and investors regarding earnings results and outlook. Management believes that the presentation of EPS by subsidiary and for the holding company provides additional useful information regarding each company’s relative financial performance and contribution to IDACORP EPS, which is presented in accordance with GAAP in IDACORP’s Consolidated Statements of Income. IDACORP does not provide EPS guidance for IDACORP or IPC, which comprise the greatest portion of IDACORP’s EPS. 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 12 months. 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; 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 and compliance with governmental policies, including new interpretations of existing policies, and regulatory actions and regulatory audits, including those of the Federal Energy Regulatory Commission, the North American Electric Reliability Corporation, the Western Electricity Coordinating Council, the Idaho Public Utilities Commission, and the Oregon Public Utility Commission 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, provision of transmission services, including critical infrastructure protection and system reliability, relicensing of hydroelectric projects, recovery of power supply costs, recovery of 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 Energy Policy Act of 2005; changes in tax laws or related regulations or new interpretations of applicable law by the Internal Revenue Service or other taxing jurisdiction; litigation and regulatory proceedings, including those resulting from the energy situation in the western United States, and penalties and settlements that influence business and profitability; changes in and compliance with laws, regulations, and policies including changes in law and compliance with environmental, natural resources, endangered species and safety laws, regulations and policies and the adoption of laws and regulations addressing greenhouse gas emissions or global climate change; global climate change and weather variations affecting customer demand and hydroelectric generation; over-appropriation of surface and groundwater in the Snake River Basin resulting in reduced generation at hydroelectric facilities; construction of power generation, transmission and distribution facilities, including an inability to obtain required governmental permits and approvals, rights-of-way and siting, and risks related to contracting, construction and start-up; operation of power generating facilities including performance below expected levels, breakdown or failure of equipment, availability of transmission and fuel supply; changes in operating expenses and capital expenditures, including costs and availability of materials, fuel and commodities; blackouts or other disruptions of Idaho Power Company’s transmission system or the western interconnected transmission system; impacts from the formation of a regional transmission organization or the development of another transmission group; population growth rates and other demographic patterns; market prices and demand for energy, including structural market changes; 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; changes in interest rates or rates of inflation; performance of the stock market and changes in interest rates, which affect the amount of required contributions to pension plans, and the reported costs of providing pension and other postretirement benefits; increases in health care costs and the resulting effect on medical benefits paid for employees; increasing costs of insurance, changes in coverage terms and the ability to obtain insurance; homeland security, acts of war or terrorism; natural disasters and other natural risks, such as earthquake, flood, drought, lightning, wind and fire; 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 such forward-looking statements should be considered in light of such factors and others noted in the companies’ Annual Report on Form 10-K for the year ended December 31, 2007, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, and other reports on file with the Securities and Exchange Commission. 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 June 30, 2008 and 2007
Summary Financial Information
(unaudited)
(Thousands of Dollars, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Operating Revenues:
Electric Utility:
General business $188,748 $162,212 $356,060 $299,463
Off-system sales 25,641 37,177 59,004 95,016
Other revenues 14,556 13,137 26,676 23,976
Total electric utility
revenues 228,945 212,526 441,740 418,455
Other 1,281 1,246 1,925 2,029
Total Operating Revenues 230,226 213,772 443,665 420,484
Operating Expenses:
Electric Utility:
Purchased power 50,089 80,467 95,387 131,285
Fuel expense 28,681 27,520 65,918 58,432
Power cost adjustment (829) (42,172) (18,573) (63,708)
Other operations & maintenance 75,617 78,888 144,543 146,715
Demand-side management 3,928 2,548 7,293 4,663
Gain on sale of emission
allowances (346) (882) (346) (882)
Depreciation 26,617 25,613 52,367 50,903
Taxes other than income taxes 4,800 4,636 9,603 9,554
Total electric utility
expenses 188,557 176,618 356,192 336,962
Other 1,140 582 2,187 3,170
Total Operating Expenses 189,697 177,200 358,379 340,132
Operating Income (Loss):
Electric Utility 40,388 35,908 85,548 81,493
Other 141 664 (262) (1,141)
Total Operating Income 40,529 36,572 85,286 80,352
Other Income 6,082 3,862 10,499 9,251
Losses of Unconsolidated
Equity-Method Investments (3,278) (1,551) (7,314) (2,877)
Other Expenses 1,820 1,571 2,184 4,782
Interest Expense:
Interest on long-term debt 15,744 13,896 32,621 27,444
Other interest 1,313 1,514 1,909 3,118
Total Interest expense 17,057 15,410 34,530 30,562
Income Before Income Taxes 24,456 21,902 51,757 51,382
Income Tax Expense 6,941 3,437 12,526 8,336
Income from Continuing Operations 17,515 18,465 39,231 43,046
Income from Discontinued
Operations (net of tax) - - - 67
Net Income $17,515 $18,465 $39,231 $43,113
Weighted Average Common Shares
Outstanding-Basic (000’s) 44,924 43,751 44,886 43,709
Weighted Average Common Shares
Outstanding-Diluted (000’s) 45,096 43,884 45,050 43,845
Earnings per Share of Common
Stock (diluted):
Earnings per Share from
Continuing Operations $0.39 $0.42 $0.87 $0.98
Earnings per Share from
Discontinued Operations 0.00 0.00 0.00 0.00
Diluted Earnings per Share
of Common Stock $0.39 $0.42 $0.87 $0.98
Dividends Paid per Share of
Common Stock $0.30 $0.30 $0.60 $0.60
IDACORP, Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2008 and 2007
Summary Financial Information
(unaudited)
(Thousands of Dollars)
Six Months Ended
June 30,
2008 2007
Operating Activities
Net Income $39,231 $43,113
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 63,255 60,397
Deferred income taxes and investment
tax credits 16,777 18,760
Changes in regulatory assets and liabilities (24,824) (65,257)
Undistributed losses (earnings) of subsidiaries 1,110 (2,922)
Gain on sales of assets (3,382) (2,687)
Other non-cash adjustments to net income 2,022 4,564
Change in:
Accounts receivable and prepayments 1,967 (3,001)
Accounts payable and other accrued
liabilities (13,462) (3,548)
Taxes accrued (5,255) (12,582)
Other (23,940) 4,626
Net cash provided by operating activities 53,499 41,463
Investing Activities
Additions to property, plant and equipment (125,373) (122,179)
Proceeds from the sale of IDACOMM - 7,283
Proceeds from the sale of non-utility assets 5,690 -
Proceeds from the sale of emissions allowances 833 2,685
Investments in affordable housing (8,486) 300
Investments in unconsolidated affiliates (8,725) (3,600)
Purchase of available-for-sale securities - (24,349)
Proceeds from the sale of available-for-sale
securities - 25,296
Purchase of held-to-maturity securities (965) (1,325)
Maturity of held-to-maturity securities 2,735 1,730
Tax deposit withdrawl 20,000 -
Other assets (1,524) 1,377
Net cash used in investing activities (115,815) (112,782)
Financing Activities
Increase in term loans 170,000 -
Issuance of long-term debt - 140,000
Retirement of long-term debt (6,317) (7,650)
Purchase of pollution control bonds (166,100) -
Dividends on common stock (26,985) (26,286)
Net change in short-term borrowings 89,076 (42,100)
Issuance of common stock 4,295 12,451
Acquisition of treasury stock (281) (346)
Other (414) (2,178)
Net cash provided by financing activities 63,274 73,891
Net increase in cash and cash equivalents 958 2,572
Cash and cash equivalents at beginning of period 7,966 9,892
Cash and cash equivalents at end of period $8,924 $12,464
IDACORP, Inc.
Condensed Consolidated Balance Sheets
As of June 30, 2008 and December 31, 2007
Summary Financial Information
(unaudited)
(Thousands of Dollars)
June 30, December 31,
2008 2007
Assets
Cash and cash equivalents $8,924 $7,966
Receivables, net of allowance 97,339 118,695
Other current assets 152,749 140,046
Total current assets 259,012 266,707
Investments 207,277 201,085
Property, plant and equipment-net 2,687,826 2,616,552
Regulatory assets 477,883 449,668
Employee notes - long-term 2,537 2,325
Other assets 114,041 116,971
Total other assets 594,461 568,964
Total Assets $3,748,576 $3,653,308
Liabilities and Shareholders’ Equity
Current maturities of long-term debt $8,643 $11,456
Notes payable 279,421 186,445
Accounts payable 68,652 85,116
Other current liabilities 95,244 92,298
Total current liabilities 451,960 375,315
Deferred income taxes 468,868 466,182
Regulatory liabilities 279,423 274,204
Other liabilities 170,223 173,412
Total other liabilities 918,514 913,798
Long-term debt 1,153,454 1,156,880
Shareholders’ equity 1,224,648 1,207,315
Total Liabilities &
Shareholders’ Equity $3,748,576 $3,653,308
Idaho Power Company Supplemental Operating Statistics
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Energy Use - MWh
Residential 1,097,026 1,066,889 2,685,937 2,531,165
Commercial 925,507 939,045 1,924,501 1,882,255
Industrial 826,693 835,446 1,677,532 1,706,661
Irrigation 686,344 814,609 697,405 819,835
Total General
Business 3,535,570 3,655,989 6,985,375 6,939,916
Off-System Sales 504,443 525,816 1,022,387 1,490,204
Total 4,040,013 4,181,805 8,007,762 8,430,120
Revenue ($000’s)
Residential $74,067 $62,886 $169,309 $141,468
Commercial 47,333 39,983 92,008 76,191
Industrial 29,280 23,294 55,937 45,393
Irrigation 38,068 36,049 38,806 36,411
Total General
Business 188,748 162,212 356,060 299,463
Off-System Sales 25,641 37,177 59,004 95,016
Total $214,389 $199,389 $415,064 $394,479
Weather Statistics
Heating Degree Days 821 573 3,501 2,909
Cooling Degree Days 213 288 213 288
Precipitation (inches) 1.44 2.24 4.14 4.02
Customers - Period End
Residential 402,320 397,083
Commercial 63,427 61,476
Industrial 122 127
Irrigation 18,485 18,112
Total 484,354 476,798
SOURCE IDACORP, Inc.  |
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