Comerica 3Q17

Ralph Babb – Chairman and CEO

Pete Guilfoile – Chief Credit Officer

David Duprey

Clients subdued but optimistic

Our loan pipeline remained solid in the third quarter and our commitments to commit are up significantly. We believe this reflects improving sentiment over the past month of so; however, overall customers remain subdued, yet optimistic given slow progress in DC and geopolitical tensions.

More fluidity in deposits

There has been a bit of a shift that as you saw the shifting out of some of the money market into the noninterest bearing which actually is beneficial for us. So I think we are starting to see a little more fluidity with deposit

Curtis Farmer

VCs investing more money in fewer deals

On the technology and life sciences, as was mentioned earlier, where we are seeing growth in 2017 has been more in the equity fund services component of that. That’s why we’re providing capital call and subscription lines to venture capital firms and that has been a nice growth part of the business for us overall. We really like the technology and life sciences space. We feel like we’ve got a lot of great relationships there and great expertise. But what we’re seeing is that the venture capital firms have become a little bit more selective. They’re investing more money in fewer deals. So a lot of competition – one, there’s more competition out there, but a lot of competition is chasing a lot of the same transactions

Comerica 2Q17 Earnings Call Notes

Ralph Babb

I think our customers are cautious given Washington

“I think what happens is our customers continue to be very cautious and especially in the way they invest and for the time that they invest in other words they may invest what they need per year to meet demand, but they are not going out as far as they used to go.”

Curtis Farmer

We are expecting growth

“But the rest of the portfolio, we are expecting growth. And so core middle market our technology and life sciences business, private banking, we’re seeing some growth in environmental services some of our larger businesses, our corporate banking U.S. banking for example. So really across the majority of our business lines, we are expecting growth toward the balance of the year. And I think you saw that reflected in the second quarter results. We had growth across all three of our middle markets led by California.”

Pete Guilfoile

CRE credit quality has been pristine

“As far as the credit quality within commercial real estate has been pristine. And so we have one relatively large credit that we did downgrade and this past quarter we have absolutely no concerns about the ability to repay. But there is certain things that have happened on it that require us to downgrade it, but we feel very good about the asset, we feel very good about the sponsorship and we do not feel there is any risk or loss there. And as far as the strength of our commercial real estate portfolios, it’s performing extremely well.”

Comerica 1Q17 Earnings Call Notes

Ralph Babb – Chairman and Chief Executive Officer

Curtis Farmer

A lot of optimism even though that may have waned a bit

Steve, I think that, really, when you think about the loan portfolio, you’ve got to think about it more broadly, so across really all of our business lines, as Ralph and Dave alluded to, with the exception of mortgage banker and Energy. And when you think about sort of the path we’ve been on, there is definitely a lot more optimism than we saw in the third quarter or fourth quarter of last year, even though some of that may have waned a little bit. And really, across all of our geographies, across all of our business lines, we are seeing increased activity and increased optimism with our customers. Now some of that still is cautious on the part of many of those clients, but I think it’s a lot higher than we have seen in the last 6 or 12 months, and again, broad spread across all of our businesses and across all of our geographies, with the exception of mortgage banker and Energy.

Auto sales gliding down

“Yes. The SAR rate glides down slightly from its peak of over $18 million. We’re still expecting annual SAR rate somewhere in the $16.6 million range, which, by historical standards, it’s still very high. When you think about the floor plan business, actually, a little bit of slowing helps us because vehicles stay on the lots longer.”

Pete Guilfoile

releasing reserves in energy portfolio

“Scott, as you know, we’ve been releasing reserves on energy now for a few quarters and a lot of that has really been as a result of payoffs and pay-downs. Now we’re starting to see the risk rating upgrade. And I think you’re going to see that happen in an even bigger way this quarter. We have the redetermination process occurring this quarter. And of course, a lot of these credits are Shared National Credits, so they’re a little bit sticky to upgrades. So that whole process will probably take us through the end of the year. So I think throughout the end of the year, we’ll be – as long as energy prices remain relatively stable, we’ll be seeing upgrades and pay-downs approved as credits. And therefore, there will be an opportunity for us to release more reserves on Energy.

CRE performing extremely well

“No, actually, our Commercial Real Estate portfolio is performing extremely well. And it’s heavily weighing toward Class A multifamily construction, and we like that a lot because particularly how it performs not only in the good times, but in the downturns as well. We do have a small amount of retail, but the vast majority of that retail is in what we call neighborhood shopping centers, so vis-à-vis the construction of small shopping centers, the patrons of which are within 5 miles of the center. It’s the grocery stores, restaurants, hair salons, that type of tenants. And that portion of retail actually has been holding up pretty well and that would be a very large majority of that retail segment.”

Comerica 4Q16 Earnings Call Notes

Comerica’s (CMA) CEO Ralph Babb on Q4 2016 Results

Expect loans to increase in line with GDP

” We expect average loans to increase in line with GDP growth. We expect loan growth in most businesses led by middle market, commercial real estate, national auto dealer services and technology and life sciences. If oil and gas prices remain stable at current levels, we believe energy loans should continue to climb, but at a much slower pace. Also, we fully intend to maintain our relationship focus as well as loan pricing and credit discipline.”

Worst of the energy cycle is behind us

We expect our provision to be lower in 2017 as we believe the worst of the energy cycle is behind us. Assuming energy prices continue to be stable, we expect non-accruals and charge-offs to remain manageable.”

Inflation pressures expected to impact comp and marketing

“Inflationary pressures are expected to have an impact on annual merit, staff insurance, occupancy and marketing. In addition, technology project expenses will continue to rise as we invest to meet customer demands as well as continuous enhancements in our cyber security.”

If you’re growing loans faster than GDP generally there’s going to be an issue/strong>

“Well, to the extent we are using the current line to be looking back over history, that’s a good way to look at growth in loans versus GDP. And our experience has been if you are outgrowing that substantially, then that in general causes an issue, whether it’s from a credit standpoint or a business standpoint and – but there will be variances from GDP at any given year as things begin to pick up. If the things that we were talking about and Curt was talking about moving quicker and things accelerate, then we would expect it to outpace GDP, I think that’s fair. Dave, is it not?”

Dave Duprey

Growth in CRE slowed

“Finally, the strong growth in commercial real estate earlier this year has slowed as we remained focused on well-structured, attractive opportunities with existing customers as well as maintaining the diversity of our total portfolio. ”

Would have to write down deferred tax assets if there’s a tax cut

“this would be a one-time adjustment, but remember, we now have a net deferred tax asset and that net deferred tax asset is recorded at 35%. So to the extent corporate tax rates decline, you have to write-down that deferred tax asset to remember the new corporate tax rate would be. That’s a one-time item, but there is significant moving pieces. ”

Curt Farmer

Customers more optimistic, California leading the charge

“Well, I just would echo what you just said that we are starting to have conversations with clients that are indicating they are more optimistic business owners around possibilities of increased economic growth and maybe some tax relief or other things that might come with the new administration yet to be determined. And we saw that some activity in November and December kind of heading into the end of the year. As Ralph said, all three of our markets, I think, remain fairly robust. California would lead that charge and the high-tech sector, I think after maybe pausing a little bit in 2016, it seems to be coming back at the year activity, etcetera, the California market, real state values remained strong in California both in Northern and Southern California.”

Comerica 3Q16 Earnings Call Notes

Comerica’s (CMA) CEO Ralph Babb on Q3 2016 Results

We are not relying on better economic environment to execute our plan

“We are not relying on a significantly better economic environment or a substantial increase in interest rates. We have already begun to execute our plan and many of our larger initiatives have been completed or are well underway.”

There are a lot of good things happening in energy right now

“Well we look at every quarter from the ground up credit-by-credit and energy has been playing a big factor in the level of our reserves and so why that we have to do is what happens with energy. There is a lot of positive things happening in energy right now. Prices have been stable. Capital markets are improving. Asset sales remain very robust. We’re getting a lot of pay downs on our criticized credits and of course this quarter our charge-offs where down as well. But on the other hand there is still a number of these E&P credits that are in bankruptcy and we want to see what happens there. Drilling activity has been coming back, but it’s as robust as we would like to see it.”

Seeing people be a lot more conservative than they have been in the past

” I think what we’ve seen to date is people are being a lot more conservative than they have been in the past. They’re sitting on a lot of cash. They’re in a good financial position and as things begin to pick up, which we’re hopeful they will and that’s the reason we focus on GDP and where GDP is going, that our customers will begin to invest more in the future as well as some of the new products and services that Curt was talking about that we have or we’ve upgraded that gives us opportunity as well not only with our current customer base, but also in looking for new customers and growing with the markets where we are.”

Peter Guilfoile

No deterioration in Texas at all

David, we really haven’t seen any deterioration in Texas at all. The portfolio in Houston continues to perform well there are market, small business, commercial real estate down there. That portfolio is holding up really well. So we are very encouraged by that.

Credit problems in energy should be stable at $40 oil

“Yeah, I think we’re getting to a point where the inflows are stabilizing with prices in this general range and we don’t expect necessarily prices are going to stay at $50 or above, they’ll fluctuate between probably $40 in the mid $50. As long as it’s in that trading range that’s been in the last three months, I think you’re going to see some stabilization of inflows to criticize. Borrowers are doing a great job of reducing the breakevens and those that can’t get their cost structure in line are selling assets to others that have lower cost structures or and/or lower leverage. So we’re seeing a lot of that.”

Comerica 2Q16 Earnings Call Notes

Comerica (CMA) Ralph W. Babb on Q2 2016 Results

We must earn our right to remain independent

” As I have indicated previously, our board and management team are committed to evaluating all opportunities to enhance shareholder value, and doing what is in the best long-term interest of our shareholders. If there are strategic alternatives that are realistic, achievable and will maximize shareholder value, they will be fully considered. We know we must earn our right to remain independent.”

Performance of oil and gas portfolio has improved

“Overall, credit quality was solid and reflects declines in criticized and non-accrual loans as well as net charge-offs. This was a result of the improved credit performance of our Energy portfolio. Energy loans have declined $356 million or 11%, and commitments have declined over $600 million or nearly 11% since the end of the first quarter as our customers continue to take the necessary actions to reduce their bank debt. We have completed 88% of the spring redeterminations of our E&P customers, and borrowing bases have come down about 22% on average. Criticized Energy loans have declined $281 million as of the end of second quarter. Energy charge-offs remain manageable and declined from the first quarter”

David E. Duprey – Chief Financial Officer & Executive Vice President

June was a record month for mortgage banking business

“summer home sales combined with the decline in mortgage rates made June a record month in our 50-year history in the Mortgage Banking business. Likewise, quarter-end loans were up $1 billion over the first quarter, with all the same drivers.”

100% of non accrual energy loans are fully current

“Total criticized Energy loans decreased $281 million due to decline in outstandings and a small number of risk rating upgrades as our customers have reduced expenses, sold assets, and tap the capital markets. Also noteworthy is that, 100% of these non-accrual loans are fully current on interest payments, including the nine loans we have in bankruptcy. The reserve for Energy loans is over 8%. And remember, those reserves may not turn into ultimate losses. ”

Curtis Chatman Farmer – President

Outside of energy the Texas economy is doing well

“Yeah. I would say that, overall from a Texas perspective, as we’ve said in the prior calls, it really is a scenario where you sort of draw a line down the middle of the state. There are really two economic factors at play or two economies at play. The Northern Texas market continues to be more diverse, more robust from a growth perspective with still net new jobs being added, much more diverse economy overall, less Energy dependency. And we are seeing still good opportunities really across all of our lines of business, Middle Market, Small Business, Commercial Real Estate, et cetera. When you look at the Houston market, certainly more impact from Energy overall, and Energy-related exposure. We continue to be a little bit more cautious there in terms of new originations, but really have not seen a lot of deterioration outside of Energy in that portfolio. We continue to watch CRE, but have not seen a lot of deterioration there either, and so, in balance, the Texas economy, much more diverse than it was during the last Energy cycle”

Peter W. Guilfoile – Chief Credit Officer & Executive Vice President

A little bit of migration in CRE in Houston

“Yeah. As Curt mentioned, we’ve seen just a little bit of migration in the Commercial Real Estate portfolio, but nothing significant. Rents are down about between 10% and 15%. We’ve stressed that portfolio up to 40% decline in rents average. Stress has been about 27%, and we don’t see any losses there.”

Comerica 1Q16 Earnings Call Notes

Comerica’s (CMA) CEO Ralph Babb on Q1 2016 Results

Clearly must have heard some contentious things from shareholders

“Before getting into our quarterly results, I’d like to directly address the recent discussions of our fundamental performance. I’ve talked to many of our shareholders over the past several months and have listened closely their feedback and suggestions. I want to make sure everyone recognizes that, I, along with the rest of the Comerica board, hear and understand the desire for improved returns. Rest assured, we share the same goals as all of our shareholders for enhancing value. I know that we must earn our right to remain independent every day, and our management team and board are committed to doing what is in the best interest of our shareholders. We are a business bank at our core, dedicated to providing high quality financial services and building lasting client relationships.”

Have not seen deterioration in Texas outside of energy

“While the current oil and gas cycle presents a challenge, we believe we are adequately reserved. Keep in mind, those reserves may not turn into ultimate losses. We also look beyond direct energy risk and we remain comfortable with our Texas commercial real estate exposure. We have not seen any noteworthy deterioration in our Texas portfolio outside of our energy book.”

Peter Guilfoile

The sharpness of oil’s drop in the first quarter caused a little more damage than people expected

Yes, I think, given the fact that we have a heavily weighted portfolio toward E&P credits and the guidance was around the E&P portion of energy, combined with the fact that that does drops, the drop in energy prices in the first quarter was pretty severe, and it wasn’t just the levels that went to, it was the speed at which prices dropped. I think that caused a little more damage than most people would have thought was going to.”

Customers are selling assets at a significant premium to where they’re valued in the borrowing base

“Since really last summer, our borrowers have sold about $1.7 billion of assets. And actually it goes back a little further than that. But on average the premium has been 93% above what we have those assets valued at in the borrowing base and in 2016 that premium is even higher. It’s about a 120%. So not only is there a lot of opportunity for our borrowers to sell assets to raise liquidity, but it’s a very accretive process when they’re doing it.”

Losses in energy services should be much higher than in E&P

“I think disproportionately we’re going to see more charge-offs in energy services. But energy services are very small portfolio for us, so I can’t say that we’re going to have the majority of our charge-offs in energy services, but the vast majority of our E&P book are well secured credits. Some of them are having financial difficulty and some of them are going to go through bankruptcy, but we feel that given how well secured so many of them are, we don’t expect to take charge-offs on a lot of those credits. The energy services side, as you know, is different. The loss given the default, if you will, is higher. Those assets are less reliable in a liquidation scenario.”

Patrick Faubion

Didn’t see as many “defensive draws” on lines of credit from energy companies as we were concerned about

“Yes. About two months ago, we had a list of credits that we thought we would be concerned about, defensive draws, if you will. And I can tell you that list today is much smaller than it was a month or two ago. First, a lot of those credits, their borrowing bases had been reduced as a result of redeterminations. Others have agreed not to draw, which is a good thing. And the vast majority of our borrowers are doing the opposite. They’re selling assets. They’re raising capital to make sure that they are staying within the confines of what they expect the new borrowing base to be. So we’re really pleased to see that. ”

Focused more on credit quality in technology and life sciences book

“This has been a very strong growth business for us. Today, we’re probably focusing more on credit quality, more on granularity. You can see that our charge-offs declined this quarter in TLS. The key to this business is our long-term team, as well the solid long-term relationships with key venture capital providers. We’re in 14 cities”

Comerica 4Q15 Earnings Call Notes

Ralph W. Babb Jr.

Negative credit migration continued in energy but rest of portfolio performed well

“Negative credit migration in our energy exposure continued as expected, while overall our customers have been acting prudently as evidenced by declining loan balances. The remainder of the loan book continues to perform well. Finally, we benefited from lower taxes as a result of the early termination of certain leverage lease transactions.”

Texas facing headwinds, but California and Michigan provide an important counterbalance

“While Texas is facing headwinds from the energy cycle, California and Michigan provide an important counterbalance.”

Virtually no second lien exposure and energy services portfolio relatively small

“we have virtually no second lien exposure and our energy services portfolio is a relatively small amount of our total loans. However, given persistently low oil and gas prices, we continue to see negative migration in the energy book, which has resulted in an increase in criticized loans, non-accrual loans and charge-offs.”

Expect to see typical inflationary pressures on several items

“we expect to see typical inflationary pressures on several line items, including annual merit, staff insurance and occupancy.”

Peter W. Guilfoile

Every energy portfolio is unique, every bank will have different reserves allocated

“every energy portfolio is unique and I think it would be inaccurate to say that every bank has allocated the same amount of reserves to the energy portfolio. So for instance, Scott, when you take a look at our portfolio, as Karen mentioned, we don’t have any second lien debt in our portfolio. For the most part it’s well secured E&P credits.”

Borrowers have been really good about working with the banks

“I think what’s been really remarkable throughout this downturn is just how well the borrowers are working with the banks as well. And if you take a look at it, Geoffrey, last spring when prices were dropping the access to capital markets proactively to make sure they were not in violation of borrowing bases. In the fall when the capital markets were largely close, they sold assets to reduce their loans outstanding to make sure they’re in compliance with the borrowing bases.”

Borrowers have continued to hedge

“Right now we’ve 59% of our borrowers that have 50% or more of the revenue hedged out one year and then drops off to 30% after that. And so those percentages really haven’t changed a lot over the last several quarters. Now the value of those hedges has dropped as borrowers rework their hedges to get extend the runway, but the — I think the good thing here is that borrowers are actively working to extend the runway and as they extend the runway they’re making good progress on reducing their cost structure.”

Karen L. Parkhill

85% of loans are floating rate. There’s been minimal deposit impact with the rate rise

“And keep in mind that that’s based on the fact that 85% of our loans are floating rate. And we’re assuming deposit assumptions fairly similar to history, because we’ve seen minimal deposit impact both on the amount and on pricing with the initial part of the rate rise, there could be upside to that number.”

We’re pricing in the $30s, assume slightly worse if oil is in the $20s

“Yes, our reserves and our pricing analysis take into account the forward curve which typically upward sloping. So the number that we gave you on the $30 for 12 months have a flat curve, not upward sloping. So keep that in mind. These are rough numbers, so I’m not going to give you one that’s in the 20s, but you can assume slightly worse than the one we gave you if it’s in the 20.”

J. Patrick Faubion

Seen some softness in the VC market but still expect a good year

“Steve, this is Pat. We’ve seen a bit of a softness in the VC market, that’s because firms are exercising more cautious following several years of really strong investment and high valuations. There had been some challenging verticals like cyber security ad-tech, but — so we’re watching that carefully but we do expect a good year in 2016 in our technology vertical”

Thoroughly reviewed our other portfolios and we feel good about credit

“We are always on the look out for hot pockets or deterioration. I can tell you that we have thoroughly reviewed our commercial real estate portfolio, particularly with multifamily. We feel very, very good about that. We reviewed our technology sector. We feel good about that despite a bit of increased credit costs. Middle market is really, really performing quite well, dealer superlative.”

Houston will be the most impacted city in Texas

“Regarding the specific geographies, Houston will be the most impacted. Dallas has a very robust economy as does Fort Worth. Austin is a technology oriented city and government being the capital city. They’re not immune, but other than Houston we’re seeing really relatively less impact compared to Houston.”

Should see good growth in Commercial Real Estate portfolios as projects draw on debt commitments

“On commercial real estate, we’re finally seeing some good growth in the portfolio as the projects burn through the front-end equity and get into the drop period and we hope to benefit from that in 2016. What we experienced is a tremendous amount of churn in the portfolio. Our approvals and fundings have remained at a very high level, but previously projects have been paid off just assume as they reach to stabilization point. So our visibility into the CRE line is pretty good and we do expect good fundings for the year.”

Curtis C. Farmer

California is still doing well overall

“Just maybe to reinforce what you’re saying there Ralph, the California market is continuing to do well overall. Real estate value is firming in both the north and the south, a diverse economy. Technology is still doing well despite a little bit of softness and so some of our resource reallocation is to California right now.”

Miscellaneous Earnings Call Notes 12.11.15

Universal Health Services (UHS) Presents at Bank of America Merrill Lynch 2015 Leveraged Finance Brokers Conference

Steve Filton

Behavioral health business is more recession resistant

“if you’re seeking — and you’re seeking acute care treatment, you need a hip implant or you need some sort of ENT surgery et cetera, you may think about the economics of that; you may choose to postpone that because you don’t want to come out of pocket for a co-pay or deductable or because you don’t want to be out of work frankly during a tough economic climate. But if you try to commit suicide or you overdose on drugs and alcohol, you are not going to be in a position to decide whether you should or shouldn’t be admitted to the hospital. That decision is really being made generally by somebody else who is effectively economically insensitive to what your economics of the situation or concerns might be. So, I think that’s another reason why the behavioral business has generally proved to be more, I’ll call it, recession resistant.”

Optimum occupancy in behavioral care is in the low to mid 70s

“occupancy rates and our behavioral facility peaks in the mid 80s, right around 84% in about 2005-2006. What we started to do at that point because we have a view probably the ideal occupancy rate in this business is somewhere in the low to mid 70s. And so, when we were at 85% in about 10 years ago, we’re turning away a lot of patients at that point because obviously if we’re averaging 85%, it means that there’s a lot of days when we’re at 90 and 95 and even a 100% occupancy. It also means that because of some of the constraints that we have, we have put male and female patients; we don’t put adults and children together, we don’t certain diagnoses together. So, as a consequence, it’s difficult for facilities to really run at something close to full occupancy.”

Silicon Laboratories Presents at Credit Suisse Technology, Media & Telecom Conference

Tyson Tuttle

Low power for IoT requires innovation

“if you look at the energy efficiency that’s required. If you’re handset only has 10% battery life left, and I know that when mind says 10% battery life, I’m like looking for a charger. But if you imagine that amount of power needs to power an IoT device for five years. So that’s essentially the amount of energy that’s in the little coin cell and they want that device to sense the environment. Let’s say every few minutes it needs to communicate that when something happens. This type of energy consumption requires a lot of innovation. And if so this is what we are focused on doing.”

From a macro perspective, wireless markets suffering but infrastructure business doing well

“I think a lot of people that we are selling into wireless were suffering, especially in China, we were not exposed to that at least on our infrastructure business, we had a little bit of exposure on the microcontroller side and some of the optical modules that did hold back our growth in IoT in the second half. But on infrastructure we see that it’s pretty solid globally. And this is more of a reflection of core network in data center roll outs.”

Barnes & Noble’s (BKS) CEO Ronald Boire on Q2 2016 Results

Have seen increased traffic so far in Q3

“the challenges were greater than anticipated and reduced traffic as well as conversion. During the second quarter, we implemented a significant number of website fixes to increase traffic, improve the overall user experience and stabilize the site. So far during Q3, we have seen increased traffic and have stabilized the site for the holiday season. We plan to implement additional improvements after the holiday season to further upgrade the overall user experience.”

The Cooper Companies’ (COO) CEO Bob Weiss on Q4 2015 Results

Had a bumpy ride from mid September through the end of November

“August was a good month and things dropped off in October a lot, particularly in the U.S. and some of the problems we ran into in Europe exacerbated the most. We thought we’re in pretty good shape in early September, found out we weren’t in as good shape as we thought by mid-September and had a bumpy ride with our integration if you will in Europe, from mid September until pretty much the end of November. Having said that, we had what we call a very respectable November”

Toronto-Dominion Bank’s (TD) CEO Bharat Masrani On Q4 2015 Results

Mark Chauvin

Are starting to see stress in consumer credit portfolios in energy-impacted provinces, but within expectations

“Next, with respect to our oil and gas exposure, we were not surprised by the level of impaired loan formations this quarter. Ongoing analysis indicates that the oil and gas nonretail credit portfolio continues to perform within expectations, given the current level in near-term outlook for commodity prices in this sector. We are beginning to see signs of deterioration in the oil impacted provinces consumer credit portfolios, which again are well within our earlier expectations. Based on ongoing stress tests conducted against the credit portfolios, I remain comfortable that the potential impact of low energy prices on the bank’s credit losses remains well within the range of a 5% to 10% increase over 2015 levels.”

Seeing a gradual increase in delinquency rates over last 4-5 months in oil impacted provinces

“we have been watching it very closely, especially the impacted provinces, which would be Alberta, Saskatchewan and Newfoundland. And what we are seeing in two categories, being the indirect auto but the non-prime segment primarily and then in the card segment, we have seen a gradual increase in delinquency rates over the last four or five months.”

Customers affected are early indicator, the type of customer that would be more challenged than the typical customer

“So in many respects we look at that as an early indicator because that would be the customer that maybe would be more challenged than the typical customer. Now, I would stress that these two categories are less than 1% of our total book and that we expected to see losses of this level.”

Sprint’s (S) Management Presents at Bank of America Merrill Lynch Leveraged Finance Brokers Conference

Tarek Robbiati — CFO

Wireless data is much cheaper in some other markets than the US

” I think the – look at the U.S. wireless market, it’s the biggest one in the world by value. And the reason why it is the biggest one in the world by value is because we have 300 million people and you have a very, very high ARPU…when you really look at some of their – the size of their bills, it’s quite extraordinary. I mean you compare this with Hong Kong which is a market that I am very familiar with. In Hong Kong you can get very, very decent data packages on 4G networks for less than $5 postpaid, which is quite extraordinary.”

Comcast’s (CMCSA) Management Presents at UBS Global Media and Communications Conference

Mike Cavanagh–CFO

No new comments on wireless plans. We believe the cheapest way to transmit data is to get it to the hardwire as soon as possible

“we have no news on this topic today. What we have decided is that it’s certainly worth at this point triggering the MVNOs that we can work on exploring what kind of offering we could bring and go deeper to learn and experiment. That’s the state of play on the MVNO. And that sits in the context of having been big believers in WiFi. So, you have seen us invest in and continue to invest in the WiFi as an extension of the value of the broadband pipe, which is still the kind of best and cheapest way to transmit data we believe is to get it to the hardwire as soon as possible. So, with the progress we have made on our WiFi product and broadband, we think it makes complete sense to be exploring on – what possibilities the MVNO offering has to add value to our customer relationships. That’s as much as we know. There is no – it will take time to draw any conclusions from what we are now going through.”

Vail Resorts’ (MTN) CEO Robert Katz on Q1 2016 Results

Our labor markets are tight

“think ensuring that we have enough, ensuring that we are providing the right employee experience, attracting enough of the right labor, retaining labor and then a part of that is obviously being able to have housing for everyone that works here, I think it is probably our number one concern right now in terms of ensuring that we can continue to drive success. And so, I mean that’s led us over the last couple of years to continue to invest to make sure that we can do that. I’d say where we feel right now is that our markets are tight. We think it is a challenge.’

Upper income US remained strong

“Colorado in particular is the strong market, continues to be a strong market given the economy here, Utah, the Bay Area and California so that obviously is the big help right there but then I would say we are seeing pretty broad based strength from all of our major destinations across the United States, I would say even places like Los Angeles, like Seattle which are not typically our strongest markets in terms of size, we’re seeing real strength there too”…

“I would say right now I think the domestic, the U.S. economy on the domestic side is very strong, the upper income portion of that remained strong ‘

AutoZone’s (AZO) CEO Bill Rhodes on Q1 2016 Results

DIY auto spending has benefitted from lower gas prices

“I think clearly we are seeing some industry strength currently. I think a part of that has to do with what’s going on with gas prices. And while gas prices initially went down, you didn’t see the initial correlation with miles driven increasing. But in more recent months, starting really strong in this summer, and continuing through September, the latest date that we have available, it’s showing nice strength. Over long periods of time we’ve seen that has a nice correlation with our DIY industry growth.”

Cisco Systems (CSCO) Presents at Barclays Global Technology Brokers Conference

Hilton Romanski

Customers are looking for a hybrid cloud

“what we’re hearing from customers fundamentally is that they want to see the benefits and the economics of public cloud in their private cloud environment. So that would suggest to us that ultimately there is a hybrid cloud solution out there for enterprises where some of those benefits across multiple types of workloads across their own environments that are private as well as those that are being hosted in a public cloud is going to co-exist.”

Dave & Buster’s (PLAY) CEO Steve King on Q3 2015 Results

Couldn’t be happier with how 2015 is shaping up

“we couldn’t be happier in terms of how 2015 is shaping up, while we’ve achieved so far as we look forward to a strong finish in the fourth quarter.”

Halliburton’s (HAL) Management Presents at Wells Fargo 2015 Energy Symposium Brokers Conference

Christian Garcia — Interim CFO

North America looks like it could be marginally better than expected, but international looks marginally worse

“North America does look like it’s going to be marginally better than what we said in the third quarter call and international looks like it’s marginally worse and in total, we’re in line with our expectations as we left the third quarter.”

2016 is clearly going to be another down year but we don’t know the magnitude yet

“2016 is still opaque. E&P the E&Ps have not announced their budgets, but clearly it’s going to be another down year. The question is the magnitude of the decline.”

Argentina had elections that could lead to positive economic reforms

“Argentina just had elections and we think that new president elect will usher in a new era of economic reforms achieved among that would be probably a potential depreciation of their over valid currency which will in the short term provide some little need to some dislocations but I think in the long term would be actually help that economy boot that economy and would invite for investors.'”

HCA’s Management Presents at Opperheimer 26th Annual Healthcare Broker Conference

Bill Rutherford, Chief Financial Officer

Seeing higher turnover of nurses as demand for nurses strong

“We think you know we are seeing higher turnover of recently than we’ve historically had. And we think there is a lot of other supply in the marketplace and demand for nurses. We’ve got a host of efforts around recruiting. We talked about on our call our efforts to hire nurse graduates and putting them in orientation and onboarding them a little bit differently so that they have — the retention is longer for those new nurses.”

See continued strong economies in the majority of our markets

“We see continued strong economies in the majority of our markets and I think that provides really fundamental momentum for the company and those trends don’t appear quickly, nor do they disappear quickly. So, we are optimistic that our market trends, we are seeing has some durability to it in the future.”

Comerica’s (CMA) CEO Ralph Babb on Goldman Sachs U.S. Financial Services Brokers Conference

Energy reserves at 3% of total energy related loans

“if prices remain low for longer, we expect to see continued negative credit migration and losses to emerge yet we believe they will be manageable. We have increased our reserves for energy loans in each of the past four quarters, as a result of an increase in criticized loans and sustained low energy prices. Because investors have been particularly interested in the size of our energy reserve allocation note that at the end of the third quarter, we had reserves amounting to more than 3% of our total energy and energy related loans.”

U.S. Bancorp (USB) Presents at Goldman Sachs US Financial Services Brokers Conference

CFO, Kathy Rogers

Planning for three interest rate increases in the next 12 months including next week

“as we look out into 2016, I do think that we are seeing an economic environment that is somewhat similar to what we saw this year, may be slightly improved. As we think about the interest environment, we are projecting in our plan, a potential for two interest rate hikes next year, and then December 1 of this year; so a total of three if you look out over the course of the next 12 months.”

Not seeing any deterioration of credit outside of energy

“the simple answer is no. We’re really not. Outside of energy, it’s really relatively benign, no significant change.”

We’ve probably gotten to a point where reserves will start building again (but not necessarily because of credit deterioration)

“I think one of the things that you’re going to see is that we are getting to that point in the cycle where many banks, including ourselves, have enjoyed a nice outcome of reserve releases. And I do think we’re coming to the end of the cycle. And I think that you’ll start to see reserves starting to build as we move out into later quarters.”

Lululemon Athletica’s (LULU) Laurent Potdevin on Q3 2015 Results

Start of Q4 has been mixed

“In line with macroeconomic trends, the start of Q4 has been mixed. We saw lower traffic in the final weeks of Q3 and into the first couple of weeks of Q4, with steady improvement in Thanksgiving. Given the current environment, we’re taking a conservative stance with revenue in Q4, while taking the necessary actions to manage inventory and control expenses.”

Moody (MCO) Barclays Global Technology, Media and Telecommunications Conference

Mark Almeida, who is the Head of the Moody’s Analytics Business

November was a good month from an issuance standpoint and December has gotten off to a strong start as well

“November was a good month from an issuance standpoint, and December has gotten off to a pretty good start as well. So I think things have firmed up a bit, since some of the weakness that we saw in the summer time.”

Korn-Ferry’s (KFY) CEO Gary Burnison on Q2 2016 Results

Even in a digital world, it still pays to have people housed in the same location

“I think that creating connectivity of people and clients in an environment of collaboration is incredibly important and although we live in a virtual world, I fundamentally believe that the people need, to the extent possible, need to be housed in the same location.”

Gregg Kvochak

“global demand for our Executive Recruitment services remained strong in the second quarter.”

McGraw-Hill Companies’ (MHFI) CEO Doug Peterson Presents at Goldman Sachs U.S. Financial Services Conference

Issuance is down 30% year to date

“we’ve seen a choppier market, issuance is down during the quarter and year to date overall issuance is down globally about 28% and in the quarter its down again over 30%, 35%, 37%, depending on which element of the markets that you look at. So we’ve seen some volatility in the ratings business.”

Avnet (AVT) Presents at Raymond James Technology & Communications Investors Brokers Conference

Kevin Moriarty, CFO

Our product is service

“Avnet’s product is, our product is service, has been and always will be. Models change the way we get compensated for that service. We need to continue to be nimble and agile to be able to move with that”

We feel pretty good about the environment

“I would characterize the current lead times as stable, short. We haven’t really seen any significant changes in push outs, cancelation rates. So we feel pretty good. EM, we continue to experience growth within our European business. I would characterize the Americas as sluggish overall on the component side.”

ConocoPhillips’s (COP) CEO Ryan Lance on 2016 Capital Budget and Operating Plan

We see dividend as highest priority

“Despite the tough market, our dividend remains the highest priority use of our cash. We view the dividend level as a long-term decision. And we’ve been in the current low price cycle for relatively short period of time”

Capital budget down ~25% from last year, -54% from 2014

“We’re announcing a 2016 capital budget of $7.7 billion that’s $2.5 billion lower than 2015 capital guidance and more than $9 billion lower versus 2014. In setting our budget, we’re flexing capital down appropriately for the price environment without losing opportunities or sacrificing the safety or integrity of our operations.”

Comerica 3Q15 Earnings Call Notes

Comerica’s (CMA) CEO Ralph Babb on Q3 2015 Results

Continue to feel comfortable about credit portfolio

“Net charge-offs tied to our energy related exposure continue to be low and we had no charge-offs in the energy business line. While negative credit migration is anticipated any losses are expected to be manageable. We continue to feel comfortable with our energy portfolio.”

27% of energy portfolio is criticized, but only 3% is non-accrual

“As of quarter end, approximately 27% or $1.1 billion of the loans related to energy were considered criticized. However, this includes only $126 million of non-accruals equivalent to 3% of energy loan and is up only $7 million from the second quarter.”

Seeing most credits get resolved before hitting non-accrual status

“we’re not seeing a lot of migration to non-accrual and we haven’t seen a lot of charge-offs. That’s been consistent with what our expectation has been right from the beginning and it’s exactly what we’re seeing. We’re seeing a lot of these credits get resolved before they go to non-accrual. In fact, we continue to get large pay-offs of substandard credits and we just got one I think a week or two ago. So we’re encouraged by that. We think that’s going to continue”

Energy services business has been more impacted than E&Ps

“I think the energy services segment of the business has been the most impacted. But bear in mind the energy services segment is much smaller than the E&P.”

Texas is feeling energy more broadly, but California and Michigan doing well

“while we’re seeing some impact from energy more broadly in Texas that Pat can speak to. We continue to benefit from a diverse geographic footprint and as Ralph mentioned in his opening comments, the California market continues to perform well for us really across a variety of our core businesses as well as our specialized businesses on both the loan and deposit side of the equation and we’re starting to see some nice improvement in the overall Michigan economy tied to the auto industry, the lower gas prices.”

The hangover in Texas is affecting more than just oil and gas

“The Texas economy has a direct impact of about 15% from oil and gas but the hangover so to speak is affecting quite a bit of our businesses.”

Migration into criticized loans doesn’t necessarily mean more reserves needed

” our E&P credits are much better secured than some of our other C&I loans, and so we might not have the same amount of reserves assigned to those E&P credits, as we would say our energy services credits that are migrating. So it’s difficult to exactly equate migration to the amount of reserves that we have.”

Provide capital call and subscription lines to VC and PE

“The majority of the growth that we saw in our technology and life sciences business was in our equity fund services group where we provide capital call and subscription lines to venture capital and private equity and typically those are the less risky part of the technology and life science portfolio.”

Charge-offs have been up in Technology and life sciences. We don’t think theres a systemic issue, but increasing reserves

” its unusual for us to see all bigger charge-offs in TLS, they have been up for the last couple of quarters, they’re above where we’d like to see them frankly. But we’re not seeing any systemic issues there, we’re not seeing any patterns to the charge-offs. I really don’t think we’re going to see further deterioration in the portfolio. But we felt it made sense to increase our reserves and we’re watching it carefully. But we don’t expect that deterioration to continue in subsequent quarters.”

We understand how VCs react in downturns

“We’ve been in the business a long time, so experience is probably the most important thing. We have relationships with a number of venture capital firms that we’ve been through ups and downs in the cycles many times before, so we understand how they react in downturns.”

Within Texas different geographies reacting differently

“while there is a general impact from the energy slowdown state wide. It definitely is being felt more in the Houston market sort of primary probably San Antonio is secondary, but if you look at the North Texas market, Dallas/Fort Worth it is a more diverse economy less energy dependant. We are not seeing what I’d call sort of broad impact as of yet in that part of the sector.”