Miscellaneous Earnings Call Notes 2.18.16

Hormel Foods’ (HRL) CEO Jeff Ettinger on Q1 2016 Results

Jeff Ettinger

One of our secrets is being located in a small town in Minnesota

“One last aspect of the secret behind Hormel Foods that I’d like to share with you really relates to our team, where we are — I mentioned to you we’re in a small town in Minnesota; we’re little bit of a throwback in that regard. When someone joins our organization, they tend to join it for a life and indeed our average tenure of our officer team at Hormel Foods is 26 years, that’s not 26 years of industry experience, that’s 26 years of experience at Hormel, which I think does make it somewhat unique in the industry.”


Southern Copper’s (SCCO) Q4 2015 Results

Raul Jacob — CFO

China consumers 46% of the world’s copper

“As you know, China is the world’s major copper consumer with about 46% of world consumption. We believe China’s demand for copper will increase about 3.5% in 2016 driven by the partial recovery of the Chinese housing market and the national grid investment program.”

Current prices not high enough to support supply growth

” current copper prices are not sufficient to promote the necessary supply growth to meet future market needs. Thus, we believe current market circumstances are improving the strong long-term fundamentals of our industry.”


Community Health Systems (CYH) Wayne T. Smith

Volumes lower because of lower flu

“Our volumes, including emergency room visits, were lower than expected in the quarter as compared to a year ago, mainly attributable to the lack of flu and respiratory illness which we historically see during this period. On a same-store basis, if you factor out the flu-related volume decline, we would have had reported slightly positive growth in adjusted admissions.”

Unable to complete proposed spinoff because of debt markets

“The decision to delay the spin, as we have previously stated, is the sudden disruption in the debt markets. This is a market-driven decision. We understand that the debt markets have not been like this since 2008. We expect to complete the spin once market conditions are favorable.”


Potbelly (PBPB) Q4 2015 Results Michael W. Coyne – Chief Financial Officer & Senior Vice President

Wages generate inflationary headwinds

“Similar to last year, we are expecting inflationary headwinds in 2016, primarily as it relates to our labor costs, which we expect to be more impactful this year due to the continuing impact of minimum wage increases that were taken in 2015, as well as expected wage increases this year.”


Freddie Mac’s (FMCC) CEO Don Layton on Q4 2015 Results

The concept of capital in our conservatorship is very unusual

“I’d also wish to remind everyone that the concept of capital, equity primarily, in our conservatorship is very unusual. The many firms and industries which deal with us, look not to our small permitted capital buffer but to the unused portion of the purchase agreement as the source of the capital stream behind our liabilities and thus us appropriately as a very strong credit. That unused PSPA amount has been a very large number for some time specifically $140.5 billion.””


The Priceline Group (PCLN) Daniel J. Finnegan – Chief Financial Officer

Global airfares were down by 15% over the last several months

“In addition, global airfares were down by about 15% over the last several months, according to KAYAK flight search data, which significantly impacts Priceline.com’s gross bookings growth but has no impact on gross profit growth.”


Jack in the Box (JACK) Leonard A. Comma on Q1 2016 Results

Hurt by stressing quality over value and also felt competitive effects from MCD

“the major takeaway is that we chose to focus on this effort and not to promote value deals to the same degree as quarter one last year. Although we stand behind our decision to invest in long-term quality improvements, we paid the price in the quarter as we struggled to roll over last year’s two for $3.50 breakfast croissant promotion. Additionally, we experienced the effects of both the heightened competitive focus on value and the impact of McDonald’s all-day breakfast, primarily between the hours of 10:30 a.m. to noon.”


PG&E (PCG) Anthony F. Earley Jr. on Q4 2015 Results

60% of energy was carbon free

” In 2015, nearly 30% of PG&E’s electric deliveries came from qualifying renewable resources, and even more meaningfully nearly 60% of the energy that we delivered was carbon free.”

CPUC authorizing ROE of 10%

“you’ll see that we continue to assume a CPUC authorized equity ratio of 52%, and a return on equity of 10.4%, which we now have certainty on through 2017.”

Freddie Mac 2Q15 Earnings Call Notes

Reducing our risk

“I’ll switch gears now and update you on our progress to build the better Freddie Mac. In particular, our progress in reducing risk in our ongoing business activities is one of the most important things that we’re doing in conservatorship. And we’re doing it in a way that is good for tax payers, good for the financial system as a whol”

By creating new asset classes to transfer risk

“We’re doing this of course by creating new asset classes to transfer large amounts of mortgage credit risk to the private market and doing so, in a taxpayer friendly manner.”

ACIS

“I’m proud to say that we were the first to market the most successful structures that do this. They are the key deals from multifamily, stacker bonds for single family and also our ACIS reinsurance transactions for single family.”

Also sold 4.3B of investment portfolio assets during the quarter

“Innovation is also visible in a way we are responsibly winding down the retained investment portfolio. As you know, our focus is on reducing less liquid assets, which are mainly impaired mortgage asset. We sold another $4.3 billion of such assets in the second quarter, which included $900 million of non-performing that is NPL sales. ”

97% LTV product for underserved borrowers

“We’ve increased our focus on underserved, home buyers and communities. We have a new executive heading up single-family’s effort to strengthen affordable lending opportunities. This includes as, but one example, new initiatives to help keep housing finance agencies, fund mortgages for underserved borrowers with our 3% down Home Possible Advantage mortgage.”