IdaCorp, Inc. (NYSE:IDA) Q4 2015 Earnings Conference Call - Final Transcript

Feb 18, 2016 • 04:30 pm ET


IdaCorp, Inc. (NYSE:IDA) Q4 2015 Earnings Conference Call - Final Transcript


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Welcome to IDACORP's Fourth Quarter 2015 Conference Call. Today's call is being recorded and webcast live. A complete replay will be available from the end of the day for a period of 12 months on the company's website at [Operator Instructions]

At this time, I would like to turn the call over to Mr. Lawrence Spencer, Director of Investor Relations. Please go ahead, sir.

Lawrence F. Spencer

Thanks, Karen.

We issued our earnings release and Form 10-K before the markets opened today. They are both posted to the IDACORP website. The slides we will be using to supplement today's call can be found on our website as well. We will refer to these slides, as we work our way through today's presentation.

On today's call, we have Darrel Anderson, IDACORP's President and Chief Executive Officer, and Steve Keen, Senior Vice President, Chief Financial Officer, and Treasurer, along with other individuals to help answer your questions during the Q&A period.

As noted on Slide 3, our presentation today will include forward-looking statements. While these forward-looking statements represent our current judgment or opinion of what the future holds, these statements are subject to risks and uncertainties that may cause actual results to differ materially from forward-looking statements made today. So, we caution you against placing undue reliance on forward-looking statements. Some of the factors and events that could cause future results to differ materially from those included in forward-looking statements are listed on Slide 3 and are included in our filings with the Securities and Exchange Commission, which we encourage you to review.

On Slide 4, we present our quarterly and year-to-date financial results. IDACORP's fourth quarter 2015 earnings per diluted share were $0.63, a decrease of $0.06 per share from last year's fourth quarter. For 2015, earnings per diluted share were $3.87, $0.02 greater than 2014.

I will turn the presentation over to Steve to discuss the results in greater detail and to review our 2016 key operating metrics.

Steve R. Keen

Thanks, Larry.

On Slide 5, we present a reconciliation of earnings from 2014 to 2015. Overall, net income increased by $1.2 million over the period. The combined positive effect of customer growth, the fixed cost adjustment mechanism, and other revenue in 2015 increased operating income by $26 million compared with 2014. Lower usage per customer and higher operating and maintenance expense, combined with higher depreciation expense and property taxes to partially offset the increase in operating income by $17.1 million.

When combining the above changes with a $21.5 million increase in earnings resulting from reduced Idaho sharing, Idaho Power's operating income was $30.4 million greater in 2015 than in 2014. An additional $7.2 million increase to earnings in 2015 reflects a flow-through benefit from a tax-deductible make-whole premium from an early redemption of long-term debt. These amounts are reduced by higher income tax expense of $11.1 million, primarily due to greater Idaho Power pre-tax earnings, and the $24.5 million tax benefit from a 2014 method change that did not recur in 2015.

Moving now to