OTTR - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Otter Tail Corporation's 2017 Year End Earnings Conference Call. Today's call is being recorded and we will hold a question-and-answer session after the prepared remarks. I will now turn the call over to the Company for the opening comments.

Loren Hanson

Good morning, everyone, and welcome to our call. My name is Loren Hanson, and I manage Otter Tail's Investor Relations area. our and announced XXXX we night, XXXX issued results guidance. Last

call Financial accompanying earnings Otter www.ottertail.com. Vice are the the on call release Otter me complete Moug, Chuck Corporation's today. this Officer. website A be and later our President and of today at Our Kevin on website President Senior slides call and Tail With and available Corporation's our available replay Chief MacFarlane, are will Tail on CEO;

to remind forward-looking want that we call. Before making I we you will be statements begin, this during

current Slide or holds. As these risks cause noted on X, subject to are of statements and future represent the results our that may materially. actual judgment what uncertainties to opinion differ They

on any of be please So these reliance advised about undue statements. placing

more to are Otter in our or Securities encourage statements with the which in otherwise. duty Exchange review. forward-looking you events, due to new forward-looking any filings update described and disclaims information, our Commission, future we to developments revise or statements Corporation detail Tail Our

will remarks, CEO, and to over Tail Otter opening the call now President For Chuck Corporation's MacFarlane. Mr. turn I

Chuck MacFarlane

X you, Earnings I reduction morning, Loren, night Slide Last released begin XXXX per diluted $X.XX, $X.XX Thank of tax results. continuing to refer my to everyone. our comments. operations from reform. per Please includes share we were good as this related share

from $X.XX. excluding succeeds impact the operations of share is $X.XX continuing XXXX our updated this earnings at earnings reform per $X.XX, Our guidance adjusted tax with to

also by dynamics year's We an had record impact resulted of producing believe selling estimate last pipe companies, amounts impacted historic $X.XX an and we Northern market were outstanding our They occur XX.XX% share adjusted XXXX. grew Diluted this PVC to which Pipe this when employee from don't year success with at the to hurricanes. in $X.XX Vinyltech, contributors expect We Our earnings per our Products positive associated pipe. and again from per across were per earnings diluted as operations XX% in efforts and XXXX. year. were share organization all share key appreciate to continuing positively compared

return performed Our total dividend well; was stock includes which XX.X%. the

X.X% year was XX.X%. return-on-equity Our end, at and yield dividend was overall

indicated Board dividend $X.XX we ability on Our value. conditions and segment, With to improving of for our share. per utility an the increased in execution rate our continued shareholder growth by in annual X.X% remain of projects Directors deliver markets confident manufacturing

an rates platform We have XXXX set guidance to serve year of XXX lowest XXXX the XXXX XXXX Tail of XXX uplift amount in an upto recordable and a manufacturing to additions them. ultimately the that at our $X.XX share through XXXX. wind, either our many the of estimated history. system injuries company megawatts included for cost to power includes and accomplishments smaller OSHA safety our for or share. corporate center. lower customers gas, record to to Otter tax benefit $X.XX resource in lower matching of earnings utility megawatts $X.XX A in related Any a employees natural rates investments Commission generation This of impact XXXX. had of will Minnesota XX number electric by megawatts approval of plan related

Big effect, have gone filing Award increase Dakota measured Edison JD Minnesota Ice rate Associates, based Emergency to Power satisfaction Institute's adjustment Storm. into increase our return-on-equity challenging Electric A Big here The efforts by XXX Christmas as several additions; on South is The project customer tax high of A South XXX & have brief kV on kV other XXXX in each. to Ellendale on Brookings general rates an of transmission a including project transmission requesting Merricourt previous Recovery related major revenue Stone X.X%. update an anticipate Big regeneration pact. Continued on-schedule. the case. calls. scores Interim on-budget manage the projects non-fuel the Stone outstanding the the discussed and case we a also based to South completion [ph] for and related rate in rates X.XX% to And Stone Astoria transmission and X.X% the Ellendale project an is we the continued general of authorized Company North

set improve shows with expand this sources with it's Tail project lease and the XX% to completed is on and the XXXX. grid, obtained be and remains resilience in to structures X relative on-schedule map are XXX voltage all to XX% system. recently MDU Slide has energized lead the the and completed owner We Big Combined in transmission Brookings developer. all XXX-mile Otter Power enable The line the foundations, months, of line, will location. connect reliability high it renewables generation system Stone South The and other

allowing and in Ellendale projects investment These MISO's formulae customers in from combined recovery Big approximately Our footprint. projects million. South Stone Big upper the MISO are multi-value South Stone rate Midwest Brookings $XXX all within is

addition, of to in approximately will to wind XX% into in come built Dakota As of XXXX. renewables. XXX million it largest $XXX implementing will Otter customers capital nearly North With history. Otter plan, to farm be Tail megawatt Southeastern Company part power entered resource purchase At Power supply project Tail from electricity in agreements has be our Merricourt the definitive near this

Astoria, a XXX plant gas Dakota. construct South megawatt simple will near cycle natural also We

of MISO's cost from the cap and a to generation We X. decision on in of We to projects be received base growth has a $XXX a Merricourt Astoria permit both proceeding any to permits, water North general to between the project capital shows electric are expect in Service XX to in exceeded expect list by based regulatory eligible be several interconnection Dakota Dakota cap. would recovered in which Utilities included the cost Otter power passed the we North a Minnesota grow project Both will project design approximately amount Public if Commission Advanced shown site case. and planned These XXXX. rate The require The which confirmed to be projects framework Commission. an air through of from again projects to Merricourt to received XXXX. revised changes. investments be XXXX, include Tail of milestones XXXX. for are Slide caps with related The Determination rate rider two process. service by XX. Prudence These Public the $XXX permit in annual X% to and site received make recovery million on constructive. XXXX XXXX soft Slide platforms rate its XXXX plants million Slide its our projects project rate of decision and The cost part on as our continues are October

under-construction. the As noted XX% our project rider slide, on for future eligible of recovery are while investments

experienced Northern fabricator, Liberty accomplishments performance pipe industry Award industrial our safety a Pipe Sales horticulture its companies award companies publication and several customer containers, services highlighting safety floor earned products at manufacturing life with growth. BTD OSHA PVC and packaging. achieved all BTD's for in major T.O. recordable overall was in excellent. the improvements, shop record, satisfaction, leading Products Vinyltech sales no injuries and Our end Safety of Plastics year. with XXXX. X% Mutual completed and year also for the increased industry markets; Gold The its consecutive recognized philanthropy. science new sixth products

The late expertise a southeast summer. with our hurricane was historic United earned Employee margins market cost related the as on their team. in companies progress. and commend are solid and they south pounds than central efficient low more the that States significant saw during due shutdowns want in-part segment operators executed hurricanes higher petrochemical expected to sales dynamics. I again plastic performance; evident plant hit plastics storms the the industry Our

plants and of Northern material and and producers rail inbound suppliers Our facilities, force lack transportation. Pipe resin down declared production worked the due Vinyltech major to with reallocate that were to But impacted. orders measure our not closely outbound resin raw to shortages

companies deliver spiked rates pipe be contractors United throughout western at ongoing pipe planned when construction companies the States. concerned distributors about The Our escalated. projects both able and the and of to production shipping began and for to and backlog availability were PVC

of this experience team occur often. similar the meet increased With the to We're the of their extremely and our don't through of proud well. situation, We managed previous companies to demand. our storm ability expect very impact like storms the working pipe dynamics devastating

over $X.X million capabilities new Before achieved to fabricator, want also largest southeast before in and discussion manufacturing in Kevin, capacity, and into facilities the I point provided turning opportunities. the custom created additional impact earnings has BTD, metal to of business, investment BTD's improvement the the is out Minnesota our has our that companies expansion our BTD taxes.

improve recovery. energy and rate a BTD in case. $X.XX I'll $X.XX positive and large to provide continuing us we Dakota projects in work guidance will We we this earnings the execute XXXX are will our will outcome transmission Otter led economic In we and allow good deliver begun Tail on recreational base to also We share. believe with per Power's focus on and to to will North in customer to generation to agriculture, utility continue vehicles XXXX profitability, has position show our a

Now for the I'll turn perspective. financial it over to Kevin

Kevin Moug

strength financial Thanks, topics; and XXXX our position, indicated will increase capital outlook. credit our our ratings, our updated of liquidity X-year I our XXXX sheet Chuck expenditure annual and following XXXX our balance the dividend, hello, everyone. corporate results, in and cover morning the This budget business

financial XXXX performance. are We our pleased with

showing segments which more weather now experienced Slides revenue revenues This non-cash And improved number earnings share. with with XX. We net tax XXXX on X% The The of a share share our decreased year-over-year a of a is reform, through increases which result $X.XX XXXX. the earned earnings a of XX% of earnings a represents in when reportable from increases. year-over-year. share a deferred by items. our as segment taxes. includes $XXX,XXX $X.XX a compared $X.XX Our earnings approximately in electric review a share we'll detailed revenues to of $X.XX growth year-over-year year-over-year $X.XX reduction better change We due a in XX grew all shown write-off provide

to transmission North investments. more increased riders Our Dakota due

with base transmission depreciation from net case higher from Minnesota Minnesota to related Our to lower riders incentives in to lowered the rate the and decision return-on-equity improvement accumulated unbilled program also higher accumulated declined due Dakota recovery due revenues Minnesota and our share lower a base declining customers. on South to lowered reducing and Dakota due return-on-equity change conservation million depreciation. The to environmental cost rate $X.X decrease higher revenues rate North estimate

offset, million lower impacted by products more interest flat proportion effect to approximately significant income. items cost to were of reform. expenses in basically part, costs tax tax sales and earnings between earnings the T.O. resulting At and recreational science, due Plastics, sales vehicle related was operating million to the tax impact a reform. are BTD to not and of This BTD, following of net before cost income tax an impact has increased of contributed improved increase resulted industrial for $X.X BTD with reform. operating liabilities Plastics. The T.O. at supplemental scrap net $X.X was as by and program segment property a earnings of more XXXX $X.X year-over-year at decrease tax increased increased of Our years, to results million contributed return resulted Tax well earnings and due capital before were improved in improved allowed income its these revenues not investments to that recovery. taxes. The this; approximately reform and at deferred our addition as tax life O&M improved positively increased for reform increased improved product in The in lawn and revenues equipment, in and metal in both manufacturing garden from $XXX,XXX. tax factors horticultural market; also expense

increase earnings earnings Our well the $X.X increased pipe in X.X% pounds Plastics as sales of PVC in million in $X.XX region a normal earnings. earnings of was our share or net first, The revenues the of Hurricane prices. hitting provided two XX.X% an impact per as in pipes result remaining per operations of Gulf net by of in segment's and business increase sold the Year-over-year items; approximately improvement in approximately year-over-year $X.XX increase $X.X increase an as late or driven to million in August. estimated the related share increase Harvey segments Coast

before lower in established of with related deferred tax reduced Second, $X.XX of savings to tax and corporate share the per rates $X.X decreased In $X.X our expenses, to liabilities. tax tax the reduction million lower Corporate or tax in reform. primarily reform impact costs tax related by a deferred taxes, million net operating tax the allocation a to tax million lower due assets tax and labor increased to increase did companies. for record under expense in rates $X.X income established reform

utility. support, Credit into Tail million we XX, X, X.XX% the two entered used financing review MBP had dates down at XXXX appropriate in powers. our this on two don't Between both to pay were On year XX, amend from this exploration Otter the expected limited XX-year funding did Slide and their of and credit to operating finance November equity to year by October XXXX liquidity expect credit facilities on of XXXX. help occurred cash levels transmission transaction. liquidity. issuances Last $XXX our and business to we our these we to to equity any XXXX. transaction We the activities financial private proceeds condition February a in placement The let's transaction Moving flow agreements XXXX. The projects extend XXXX generated from have agreement platforms. borrowings one and XX,

of terms to Tail year on financial from S&P Corporation's stable and last ratings, outlook revised measures. improving our Power's Otter Tail In both credit positive Otter

respectively FFO XXXX debt and ranged to Our approximately to have utility at XX% to XX% from from XX% to parent XXXX. metrics the approximately from as XX% [ph]

credit We light operations now and strong grade reflect expect impacts of reform ratings remain commitment. we are that maintaining to our metrics tax to manage committed to and in we'll these investment

our XXXX rate of and the dividend Directors share. indicated the tax increase increased that result this paid which represents As liquidity, cash shown our higher commitment XX, believes solid performance of note, from our balance have appropriate of X.X% impact our outlook a for the $X.XX quarters. earnings rate profile to historical generation XXXX Slide capital. per $X.XX annualized enhancing which our Board increase year's consecutive years share we XX shareholder an our Company's on dividend for to on reform, The is strong includes sheet, And and use from This per growth dividends to board dividend positive than XXX is stock and returns.

provide capital as me XX our overview an Let on shown of Slide expenditures.

to $XXX be We million. expect XXXX expenditures for capital

returns capital invest We to $XX manufacturing earnings also and million continue This for fire MISO natural impact plastics plan $XXX in for generation. corporation's gas in million projects The businesses. calls and to on will the utility positively as transmission approximately and designated the and includes capital. projects five-year by expenditure multi-value continue projects. renewable plan The

to year; result in base this tax Our rate updated compounded annual impact using growth X% XXXX taxes rate lower to base is as the of projected growth due the is deferred be of a as reform.

to XX Please million grow needs based dividend impact our programs. material our Slides XXXX to don't rate expected our timeframe. and $XXX would have outlook. any be through to this business meet our Our expect of to to and a is to this discussion approximately XX reinvestment an over able growth continue advance after-market We to additional and needs equity expect for

share. future current the tax mix This uplift an jobs reduction to business occurred of for strategies $X.XX per improving earnings operations, Our results the of tax reflects lower from $X.XX and cuts guidance to of XXXX range act. rates rate earnings due is in guidance that to tax and XXXX our

expect to a our and center as We rates. lower in of result increase $X.XX corporate the manufacturing share see platform a tax cost

to higher November increased medical X.X% constructive tax items planned with fund borrowings caused XXXX at The higher transmission $X.XX long-term related capital segment's rates debt due year based earnings and discount maintenance offset expense expenditures. rate Big Our filed combined A a in be workers in normal retiree the projects increased Plant, as North X.X%. investments. compared with put of and with related property net case increased Stone being XXXX These in increase share compensation weather a diluted weather. pension Higher XXXX rate outcome were into pension, transmission operating expenses full expense from year cost debt increased and by to per benefits. short-term decrease the outage in large a in carrying a Dakota in to service replacing medical last interim to normal of to a Milder higher to XXXX than interest interest normal. income than on expected increased Electric in is rate result of reduction to

the earnings We XXXX operating from by million $XXX million ago. in approximately T.O. result segment $XXX through life to of from our rates in reductions taxes segment income a BTD lower implemented industrial of margins compared manufacturing cost approximately increased and is Increased improved share driven improved tax expect earnings as tax end for and at year with due for And The markets. primarily at increased sales per productivity. sciences reform. Plastics a backlog XXXX lower this horticulture, $X.XX

We hurricanes net is to the included estimated approximately XXXX. nature hurricane. a earnings XXXX segment results impact The $X.XX on from be expect our lower the income from year's plastics non-recurring earnings Last than share. the XXXX of

expect XXXX sales resin offset of expected higher XXXX. to also year. operating our in lower to by in volumes for the prices by due are sales lower And XXXX. margins expected tax and We cost, rate are similar to driven flat prices increasing higher to be The tax in primarily net last effect lower costs corporate

to we comment like items on. there are would As several I to look XXXX

reform metrics. utility-wide on created about concern impact its a First, has tax credit

metrics favorably. at strong ratio position both Our to certainly equity and and the utility FFO debt parent us

exposed expense. of aren't the to co-interest also deductibility risk of hold We

get investment rates material financing stay tax to electric lower to we absorb the benefit per earnings our We ratings tax rate share to continued and credit without for Overall, maintain to utility customers utility. able to growth expect the implications of be and impact our our X% any plans. within expect the our reform we'll while of X% on

likely an see customers a $X.XX as of to approximately And manufacturing our reform share be of a cost share. we overtime. of expect center expect the per the also uplift and from pass-through lower taxes amortized We in earnings will corporate platform to tax result

Second, from we per continuing operations. believe achieve a earnings using us X% share annual rate to a XXXX's our share XXXX to X% guidance growth further and compounded positions $X.XX

North XXXX segment. all returns cash face and strong in the two further from Our will include constructive earnings, our case, improve on the sales BTD's improvements guidance initiatives capital platforms our and and operational the rate is Key across business the to flows this plastic outcome year. dependent occasions margins economic continued challenges on on invested return continued Dakota

lower XXXX; the accounting in of due however, we standard to nature recognition. part segment relating in We expect uplift have revenue us new of ahead as plastic a earnings than earnings the experienced And large the hurricane into be XXXX. XXXX, we head to non-recurring from to we

While I will standard if you, be comment new would technical don't during on the stuff with first adopted I don't accounting I talk usually which be remised the quarter.

and have change expect streams don't of will our revenue analyzed in various and respective have We the methods revenue businesses under the new adoption immaterial. to [ph] recognition across standard impact any be the

now the after remarks. a your questions, ready Chuck take return to Q&A and will We with closing few are

Operator

of question line Our [ph] from from first Instructions] comes Chris [Operator the William's Capital.

Your now line is open.

Unidentified Analyst

Chuck, really is you give can any us I Is backlog improving mentioned what that the of reflected in sort that? on outlook you at BTD; increase? think color

Chuck MacFarlane

in uptick clearing an portion that's at compared We're BTD, year-over-year of that difference in in large seeing backlog. backlog a activity

gas Ag. in seeing and space, So improvement and we're activity slight vehicle oil the recreational more the in in just

Kevin Moug

and had that few that as either is important products -- and so there customers is with base what's the out reductions the these want on be years capabilities expect been at they you to recognition higher or happened their as the think through Chuck we've and that to due is backlog has the happened they deliver also for the also that supplier the that and over because but be there difficulty quality prices we're the I a prices how metal customers referred customers or come price smaller and been heard us occur has have they to your the the on-time by seeing an in went a to customers we've asked at about so you've contract last strong specs now that recognized at that those -- there from capacity to factor capabilities and What financially -- base delivering had to manufacturers lower that price lot is there of of increasing agreed marketplace. that took our it's have and supplier and business talk

Unidentified Analyst

competitors Are you weren't little the seeing produce of to because can? you those the come back customers a quality that some some of able

Kevin Moug

and Yes, times. delivery

Unidentified Analyst

to about start look sort like of durable thinking about the tax that pricing? reform the is portion your tax benefits reform; described of reform reflect $X.XX what you -- see them businesses you Kevin, tax sort the as of will that sort of in to

Kevin Moug

Yes, that's our view.

terms from any particularly piece far We had on kind do we've investments terms few where things any share not of get a have in in types of intend some that side we thinking not of pushback to business to the it what we but questions expect are they they pressure customers, we're this. those had having so customers, in more of with should about don't that. that of manufacturing with the getting Basically asked in

answer expect to kind your durable So the portion short we to is yes, of have. question that's the

Unidentified Analyst

range you current are earnings guidance, the of that case and in your portion Dakota as the you the far gave goes interim North As rates? any reserving

Kevin Moug

think in the color response allowances we more in appropriate continue estimated where establish as that's at tax of into kind effect we XXXX our and for to head start went reform to commission we we're rates will impact January we once of and into we now here get be the head will included it's as on just through looking from forward-looking. get as we interim the refunds case We X,

Chuck MacFarlane

Dakota rebuttal point any this anything filed not also. testimony North has at or Commission The

Unidentified Analyst

as by the So issue you will case issue do that proceeds? on an basis

Chuck MacFarlane

Yes.

Unidentified Analyst

third or I Can remember drag in the don't me, benefit any anything was there quarter weather you quarter? third versus normal? if there remind Was

Kevin Moug

I was Third if quarter right. remember slightly positive

Unidentified Analyst

the that of those where the than sort sort maybe are other guidance maybe is normalization; your things some Is hurricane something are that And year, that your sort expectations the the change may year? of pipe throughout variable resin of business, the just that on year? as little throughout a on those negatives of far as throughout

Kevin Moug

as or that The on we we the update based is quarter we normal current as kind we we came them guidance every will see out of and do as typically here forecasting will conditions process a but as -- at there a for head we now, into $X.XX there $X.XX 'XX, in is the increase least straight that another February norm we and sometime resin is announced March-April our timeframe.

that they resin fully get or hoping not that get will time whether Now not did manufacturers sticks but 'XX. quarter tell resin back fourth the to the the were of increase in

there So we come we're with out here we is guidance. as as additional initial that impacts head that cost increases that into our here year contemplating at resin the guidance least

other right The flat prices. are is potentially seeing of declining we thing kind sales to now

if our plastics XXXX. so reform you made And kind million of guidance, $XX.X think the about in tax before

And when that's hurricane in of out to million, $X.X $XX range. look $XX so $X.XX million to guidance you $X.XX at then income gets $XX.X of million you number. it to guidance really puts back a you you that net the If million kind our

-- based update come when with our guidance quarter be the year. the them for that should as to conditions we we 'XX our current I that's kind see will where we of look as So said at up and on continue we every when for

Unidentified Analyst

some may on from any out with how he PVC come do with you plan On up come today; whatever is benefits supposed infrastructure? administration infrastructure to foresee PVC, having Trump

Kevin Moug

of advantage take it and like be certainly the be where I looks us. unfolds I is we'll positive as would that releases potential to some and think I water out, think that I guess saw to a for impact look yesterday that where wastewater think uplift. and potential or potential but is mean there at uplift so I for that blush, the for the it's potential that we business all and there impact has there infrastructure least first going watch initial able could opportunity be plastics continue projects to we

Operator

question And KeyBanc. line of Paul our next Ridzon comes the from from

Your line is now open.

Paul Ridzon

of any kind quarter? the benefit plastics Did all fourth at into impact the bleeding from of hurricane

Kevin Moug

came earnings and quarter, quarter, mean in quarter the is there When of October-November ended quarter estimated for September timeframe occurred in be there from and we in third about we came $X.XX when had hurricane from year a so the being that additional in a which $X.XX third was we and that year the I in the all occurred about in uplift then September. thought $X.XX an the -- the closer third impact out we were uplift $X.XX. the fourth kind $X.XX about had up we out would that And we said total hurricane

I think your that question. answers

Paul Ridzon

you think now? system that's by through So the washed

Kevin Moug

Yes.

Paul Ridzon

booked how basis? a reform signed much then was were percentage And of your on backlogs tax before

Kevin Moug

The tax been for would have $XXX million manufacturing all booked before the reform.

Paul Ridzon

Any contracts you're hit? signing margin now or you're any not seeing

Kevin Moug

No.

Paul Ridzon

of again? hit part resin high Could kind missed large just that that level commentary. of I on you a comments price some had increases; You at

Kevin Moug

March-April $X.XX announced there for in potential been a announced then $X.XX resin What's Sure. is in timeframe. increase another is February the that's and been

Paul Ridzon

announcements? Are do your how they those And customers respond stockpiling? to

Kevin Moug

inventories happen -- back increases typically there We but in would stockpiling yet look our where if of down that, if customers will advance is announced haven't like potential increases. are buy typically seen you any what in they

Paul Ridzon

have And a sense inventory do you where of your stand? customers

Kevin Moug

The ultimate what we in been a with expected. flavor our of the have out relatively contractors initially of real far in so our yards, we good line inventory and so terms across kind in into we is head have year, sitting volumes don't region as

Paul Ridzon

for of your that? night; last -- drove something press spending was CapEx in there of with kind clarify little XXXX could a CapEx lastly, then you release $XXX cash at kind million And XXX me that of [ph],

Kevin Moug

referring XXXX you to the are release of part the Which $XXX I in million. Paul? mean,

Paul Ridzon

we sorry. XXXX of CapEx expect misread, -- I'm I million XXXX business $XXX compared with outlook,

Operator

[Operator Instructions]

Chuck MacFarlane

utility platform disciplined electric Corporation two shareholder its and manufacturing Tail delivering core through Otter our companies. continues company value

the focus goal and long-term However, just share growth compound on operating annual per companies earnings our Kevin that described.

All of promising XXXX and them financial of them our have contributed all results excellent futures. to

for to and objectives our their we you year. appreciation share range in XXXX want diligence for operational our forward organization speaking employees next $X.XX Corporation look and this to joining of excellence a you call, our commercial and be expect across earnings extend initiative. appreciate I to Thank appreciate grow execute hard and and to our We results interest employees. our work to with We as to businesses, quarter. in our their develop Otter achieve the Tail $X.XX we your

Operator

gentlemen, a have and does you in Everyone conclude thank great and This participating the all this you day. Ladies for may conference. program disconnect.

Otter Tail (OTTR) 13 Feb 182017 Q4 Earnings call transcript