IDACORP Earnings Dip; Utility’s Performance Improves

The company reported a fourth quarter loss of eight cents per share compared to last year's earnings of 55 cents per share.  Net losses for the fourth quarter were $3.0 million, compared to net income of $20.4 million for the same period a year earlier.  IDACORP's annual net income was $61.7 million for 2002 and $125.2 million in 2001.

"Our fourth quarter results demonstrate the continuing effects of exiting the wholesale energy marketing and trading business.  They also reflect an $8.1 million partial write-down of Ida-West Energy's investment in equipment for the proposed Garnet Energy Project," said IDACORP President and Chief Executive Officer Jan B. Packwood.  "Our regulated utility, Idaho Power, while continuing to show improvement, has not fully returned to an earnings level closer to historic norms."

Packwood noted IDACORP's annual results fall in line with the past guidance and reflect the major influences of the wind down of its energy trading and marketing business at IDACORP Energy; continued drought-related pressures on the utility's operation; the write-off of disallowed program costs; and the benefit of a tax method change at Idaho Power.

"Despite the challenges of 2002, the company maintained a solid investment grade rating and strong liquidity position," he said.  "Our focus in the coming year will continue to be on our regulated utility's operations and further strengthening of IDACORP's balance sheet, liquidity, and credit rating.  This will help us rebuild earnings growth in 2004 and beyond."

Idaho Power Company
Idaho Power Company contributed 31 cents per share to the fourth quarter results and $2.24 per share for the year. This compares to seven cents per share during the fourth quarter last year and 60 cents per share during the prior year at the regulated operations.  A change in tax treatment for capitalized overhead costs, announced with our third quarter results, provided a benefit for the year by decreasing income tax expense by $34.7 million or 92 cents per share. Idaho Power's results also reflect the ongoing impact of the drought in the service territory along with the third quarter 20-cents-per-share write-off of the irrigation load reduction program disallowance.

General business revenues increased $6.4 million during the fourth quarter and $121.4 million for the year due primarily to the implementation of increased Power Cost Adjustment rates in May.  Annual off-system sales revenues declined $164.9 million, a reflection of both reduced volumes and lower wholesale electricity prices.

The company's hydroelectric production continues to be negatively impacted by drought.  2002's precipitation levels were 19 percent less than a year earlier and nearly 43 percent below historic norms.  Additionally, the weighted average snowpack above Brownlee Reservoir ­ the company's primary storage facility ­ at Feb. 3 is 81 percent of average.  Despite these stream flow-related impacts, the regulated utility's financial performance has been bolstered by lower power supply costs in the region.   The average price for purchased power fell 32 percent when compared with last year's fourth quarter.  For the year, this average price dropped 71 percent.

Other operating and maintenance expenses decreased for the quarter and year-to-date due to reductions in salary-related expenses and operating expenses at our thermal facilities.

IDACORP Energy
IDACORP Energy recorded a loss of 20 cents per share for the quarter compared to a gain of 49 cents per share for the fourth quarter 2001. 

IDACORP Energy recorded an annual loss of 39 cents per share compared to a contribution of $2.87 per share for last year.

In 2002, the company announced that IDACORP Energy would exit power and natural gas trading and marketing.  As a result, the company recorded a restructuring charge in the fourth quarter of $6.8 million and additional charges related to exiting the business of $1.1 million for a total of $7.9 million or 13 cents per share.  For the year, the charges were $8.9 million or 14 cents per share and relate to, among other matters, severance expenses, non-cancelable lease liabilities, and asset impairment.

The wind down of IDACORP Energy remains on schedule.  Working capital and liquidity requirements, average value-at-risk, and staffing levels are significantly lower since the wind down strategy was announced.

Other Subsidiaries
IDACORP Financial contributed six cents per share for the fourth quarter, three cents per share more than last year's fourth quarter.  For the year, the earnings-per-share contribution was 23 cents, nine cents per share greater than the same period last year.

Ida-West Energy recorded a 14 cents-per-share loss for the fourth quarter as compared to a seven cents-per-share contribution in last year's fourth quarter.  The loss is the result of the partial write-down of Ida-West's investment in the Garnet Energy plant taken in the fourth quarter of $8.1 million or 13 cents per share.  In 2002, Ida-West recorded a 14 cents-per-share loss, compared to earnings per share of 13 cents in 2001 when Ida-West recognized a gain of five cents per share related to the early redemption of outstanding bonds by the Friant Power Authority.

IDACOMM recorded a one-cent-per-share net loss for the quarter, compared to a one-cent-per-share gain during the corresponding period last year. The annual results are also a loss of one cent per share, a three-cents-per-share improvement over the same period last year.

IdaTech recorded a five-cents-per-share loss in the fourth quarter, three cents per share better than last year's fourth quarter results.  For the year, IdaTech matched the 2001 results by recording a 22-cents-per-share loss.

Earnings Guidance
The company reaffirms its 2003 annual earnings per share guidance in the range of between $1.50 and $1.70 per share.