AES 2Q15 Earnings Call Notes

Our countries have cyclical patterns. Things will probably improve in Brazil in 2017

“I think a lot of our countries have cyclical patterns. Right now Brazil in on the – certainly not at the peak of one of these patterns. I will remind people I think of two, three years ago. Lot of questions I would get on these calls is why wasn’t I investing more in Brazil and that we were slow. What we did at the time and continue to do today is we only invest when we see long term value. And we really see the value not quite frankly get caught in the trends. I think, you know Brazil is having a recession this year. It will probably have a flat 2017 and is expected, 2016, sorry and expected to pick up in 2017. Brazil is a big market, it is a country which has great potential and I think that us as a company of the Americas we should have a presence in Brazil.”

Elections in Argentina should be favorable either way

“looking forward what do we see? I think the elections in October, the two leading candidates either one would be favorable. I think you’ll have a gradual return to market-based pricing and a lifting of the exchange controls. So, we have a tremendous asset base in Argentina. Of course, we’re not putting any new money in at this stage, but I think we’ve handled it well and I firmly believe that within a year or two we’ll be paying dividends out of Argentina. It is basically considerably developed country and quite wealthy. So, it’s again, I think it’s probably on the rebound at this stage.”

The Brazilian government is doing the right things and making tough decisions

“I believe that the Brazilian government is doing the right things at this time and taking some very brave decisions, including cutting spending, raising interest rates and that these will have good long-term effects, but certainly they’re very tough in the short-run, but I really commend their bravery.”

We will never grow for growth’s sake

“When you mentioned asset sales, perhaps I think you’re talking about Petrobras and hydro who may be selling some assets. We certainly look at them. What I want to say is that, we will never grow for growth sake and these really have to makes sense, and they have to make sense which should they in terms of a portfolio, there have to be things which would decrease its hydro risk.”

Southern Company 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

460 MW of solar

“Southern Power also had a 131 megawatt solar plant under development in Georgia that is expected to begin operation in late 2016. With completion of this facility, Southern Power is expected to own more than 460 megawatts of solar capacity, and is clearly becoming an industry leader in the advancement and operation of this important technology.’

$700 per car oil dividend

“Both residential and commercial sales should benefit from lower oil prices, which some have characterized as a $700 per car oil dividend”

A lot of strong employment growth

“We are looking at a lot of strong employment growth. I think we’ve seen that across the board, especially in the Southeast we’ve actually outstrip the U.S. growth rate and employment. And our manufacturing employment is also stronger than the U.S. As the economy continues to improve, as consumers consume the benefit of this oil dividend that we mentioned in our script, we think household income is also going to be helped by the portion of that household income that’s disposable.

That will translate, we think, into more commercial sales and hopefully will translate into more household formations, which I believe jumped pretty strongly in the fourth quarter nationally. We saw a pretty strong customer growth in our fourth quarter period as well, about 10,000 new customers on the residential side. So there is a number of elements there that we’re looking at.”

Natural gas prices are very volatile, switching to gas is not a panacea

“If you dial back to 2014, remember we have switched a lot away from coal to natural gas. And one of the things that we always warn people was that gas was more volatile and there were certain risks around it. It was not a panacea.

What we saw in the year 2014 was that we generated about the same amount of energy with coal as we did gas, about 40% each. Why was that? Because we had the fuel flexibility during polar vortex one and two to switch off spiking gas and be able to run our much cheaper coal fleet. In fact, over the year we saved about $125 million of fuel savings, because we had that flexibility. So let’s keep in mind what’s trying to happen in regulatory space in terms of shutting down coal in America.”

Looking to invest in gas pipelines

“Now, how does that impact kind of our appetite for gas infrastructure? I had mentioned to you all before that we could see ourselves getting involved in gas pipelines now, because gas is much more kind of synergistic with the rest of our business, as opposed to say where we were five, six, seven years ago.

One of the things we find is that there are lots of price disparities of gas transportation, say, from the east to west side of our system. We’ve been able to evaluate a lot of opportunities. We’re seeking those out aggressively.”

In the long run for finance there are tricks but no magic

“So you guys have heard the old saying that — I believe in the long run view of finance, there’s lots of tricks, but there is no magic.”

Our plan was for 0.7% sales growth

“Let me just kind of pick at that a little. Our plan was set last year at 0.7% sales growth and we actually had 0.9%. The difference was the fact that industrial was a blockbuster year at 3.3%, relative to weather normal flat elsewhere.”

Edison International 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Need to be able to spend on infrastructure

“Beyond 2017, we see the need for annual capital expenditures in electric infrastructure to support reliability at level similar to those we are proposing in our 2015 GRC. A central tenet of our strategy is that we should lead in modernizing the distribution system. Building this next generation grid require significant technical know-how and capital investment.”

Rate case based on growth prospects for So Cal Ed

“This is something Edison is particularly well positioned to do. The foundation of our investment case is the strong growth prospects for SCE. We also recognized the need to have a strategic eye on the transformative changes occurring in our industry that extend even beyond California. With this in mind, we are selectively pursuing other growth initiatives both with SCE and in competitive businesses.”

Investing where public policy provides incentives to invest

“nside the utility, the pieces that we’ve mostly focused on are really things that further public policy initiatives within the State.

So for instance, that California ISO along with some other State agencies have clearly identified a set of ‘Preferred resources’ that would be used for dealing with some of dislocations with San Onofre going out. So these are things like distributed generation, storage, energy efficiency, demand response.

So we are looking at some pilot projects that would provide referred resources particularly in the areas most affected by San Onofre going out. And that would be additional growth opportunity within the utility. The State has a mandate on energy storage 1,300 megawatts across the State. Our share of that is a little less than 600 megawatts within SCE and half of that can be actually owned and put in rate based by the utility.

So we are looking at those opportunities that would really ducktail with our modernizing the distribution system efforts. Community solars and other areas where that actually might be a combination of growth opportunities both within the utility and outside of the utility. So those are some of the high level areas.”

Focused on growth opportunities

“I think very long-term, if in fact we have good growth opportunities that’s really what will provide sustained earnings growth and sustained earnings growth ultimately circles back to providing sustained dividend growth. So it’s the usual balancing acted every company has to go through.”

A lot of energy in the state but not necessarily in the right places

” we’ve got a lot of energy in this state of times, but may not be in the right place and we need to have voltage in the right places too and to in order need combination a lot of things.’

Residential rooftop solar requires subsidies to work

“our sense is been the residential rooftop solar business models really largely requires subsidies and kind of cost shifting mechanisms to really be viable that is not been as appealing to us. As a result, we’ve really focused more on the commercials and industrial distributed generation activities.”

Not interested in putting residential solar into rate base

“for the foreseeable future. We would not really look to try to put residential rooftop solar into owned that, put it into our rate base.”

Provide the infrastructure to facilitate a distributed network

“our primary strategy is provide the network, provide the backbone through a modern distribution system that really facilitates any and all of these distributed resources. Whether that’s rooftop solar or whether its storage and anything else. That’s the part that we are uniquely positioned to do well and that’s really where our investment dollars are focused in the utility.”

Duke Energy 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

$9 Billion investment in 2013

“during 2013 we completed our $9 billion fleet modernization program. This program added approximately 5600 megawatts of new combined-cycle natural gas and state of the art coal capacity in the Carolinas and Indiana replacing a similar amount of capacity for older plants we have or are retiring by 2015.”

Exiting Mid-west generation business

“we are beginning a process to exit our Midwest generation business. After an 18-month regulatory process, we were disappointed the Ohio Commission denied our application for our cost-based capacity charge late last week. I want to thank the entire Ohio regulatory team that worked so diligently on its filing. However, this decision gives us clarity. The volatility inherent in emerging generation portfolio has challenged our ability to earn the level of consistent and fair return to our investors. This business is not a strategic fit for Duke Energy.”

Opportunities in renewables, greater mix of solar

“We see opportunities to continue to grow our renewables platform over the two years and expect a greater mix of solar in our capital deployment. We are targeting 400 million of renewables capital annually and we have the potential to deploy more if opportunities arise.”

Capex grows beyond 2016

“I think our CapEx profile does grow beyond 2016. I think back in our appendices we show that our rate base growth moves in the range of 6% beyond 2016 as we ramp up the lead combined cycle plants essential for the Florida combined cycle. And also we will see a change in 2016 and beyond as we become a significant taxpayer in a decrease and deferred taxes now put on to push on our rate base as well, Shar. So I think we do have growth in the earnings base.”

Sempra 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Since many of you have asked me what happens in a rising interest rate environment, I wanted to remind you that both our utilities have a trigger mechanism, which allows our CPUC-authorized ROEs to be reset if the annual average Moody’s A utility bond index rate move 100 basis points above or below the benchmark level, which is currently 4.24%.”

“If an upward trigger did occur, it would increase our equity return by 1/2 of the difference between the new monthly average rate and the benchmark rate. Additionally, the authorized cost of debt would be adjusted to reflect the actual cost of debt at that time.”

Jinko Solar 4Q12 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$JKS Earnings Call Notes

“I think it’s a good question because today in China the solar industry I think is only in the consolidation but also is a faced challenge and the over capacity as faced challenged by the market demand and also inside China you can see one of the competitive and Suntech I think you can see that is going out restructuring, so all these I think definitely were effect to the whole industry. I think the government were now in the much, the new government has said I think they are aware of the situation right now. I think the government were to take I think two steps, I think one step is to increase the domestic demand to streamline the policy, I think also to possible to increase the potential demand especially like two steps I think subsidized in the eastern area of China as all these policy I think it will increase the demand. Second also I think the government has put more attention to is to restructuring consolidation in these industry the own capacity issue. So as you can see that of course today every solar company has faced banking in think the lower facility typing but we do think you know Jinko is one of them the banking I think if you like to priority to support as you can see we just got 60 megawatts of solar projects (inaudible) 360 million from China Development Bank.”

“Let me add that in the short time obviously all the industry is impacted by these bad news for the industry. Whoever we were expecting these consolidation and in the long term it’s a good news for the survival we strongly believe that Jinko solar is one of the company’s who will survive”

AZZ FY4Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$AZZ Earnings Call Notes

“we continue to experience a slowdown in the domestic fossil fuel power generation opportunities. And internationally, especially in the Middle East, the construction of power plants remain robust and we see strong demand for the products — for our products.

We expect the domestic fossil fuel generation market to be skewed further in the direction of natural gas for the construction and expect quotation activity to remain slow domestically in the near term.

NLI continues to see strong demand for their products and services in the nuclear power generation market. Demand for our domestic substation market is stable. Utility spending has not picked up significantly, and we expect that market to be at the current levels going forward in the year in the near term. Over the long term, we continue to be optimistic regarding the opportunities associated with the upgrade of the domestic distribution substation networks.

High voltage transmission market is seeing activity pickup internationally, particularly in Asia. Competition is intense from European and Asian vendors, and we hope to close projects despite pricing pressure in these markets.”