50 Shades of Paraphrase

Ahhh earnings season. I've been reading a whole bunch of earnings call transcripts (and even listening live) lately, and anyone who has done this can surely commiserate already. However, for those new to the subject, the deal is this: after every fiscal quarter, a public company issues a press release regarding how it did last quarter, including earnings and operating/business issues. Soon after, the management team holds a scheduled conference call, during which they read a prepared statement--essentially the press release aloud-- and then they open it up for questions from banking analysts. On occasion, you can find some real gems in the Q&A, but for the most part, it's an exercise in patience and discipline, as you desperately try to avoid succumbing to your inexplicable desire to multitask. Below is an excerpt from such a call.

Analyst: When we think about contract renewals, is there any kind of number that we should …forecast in terms of what the overall success rate should be on either the overall utilization of that renewal or a percentage of the fee? For example, should we think about it as – do you think that it's about 90% contract renewal rate and volume? Or do you not really think about that in those terms either?

CFO: Well, I think as [the CEO] mentioned, we roughly have $XXX million a year. And right now, it's – the numbers have really have come in flat to a little better, as I mentioned. You look at the first six months, you strip out [this effect] and [this effect], we're up about $XX million on everything else, which is primarily [this segment]. So it's really been a flat effort at this point.

Analyst: You talk about rates in 2012, the renewals being similar to 2011. Are those on contracts that were one-year contracts that were signed in 2011? Or were they more longer-term contracts? If you could talk about that mix, and if they are longer-term contracts that are being renewed, can you talk about how these renewals compared to the original rates that were signed say six years ago or whenever that was?

CFO: It's really a mix, [Analyst]. …really, the best way to look at that is our contract life. If we were doing all these on a one-year contract, you'd start seeing movement in that contract life. But our contract life remains right around the six-year mark. And so we're seeing them really across the board; some are long, some are shorter. It's really a mix.

It's really a mix


Analyst: So would it be possible to provide any color on how the current renewal rates compared to the older – on the older contracts, the longer ones that are being renewed?

CFO: I mean basically overall in the system, I'll go back to what [CEO] said, it's been relatively flat. I mean some areas we've seen them lower, some actually have been higher, and you put it all together and it's basically been a flat performance.

CEO: And in some cases, we've seen the mix change where – excuse me – we may have had reduction in some contract and volumes. We've seen other customers come and pick up that volume and put those under firm contract. So it really has been a mixture. Our commercial people do a pretty good job of keeping this system contracted. And what we've seen in the last couple of years is an increase in  some [of this end market], and in some cases, that has displaced some contracts that we've had with marketers or producers that have reduced their contracts or termed back contract quantity. So it really is a mixture.

The underlined section is a solid answer. Just stop right there. Shh--

Admittedly, it's hard to be concise while answering live and it's even harder when you're responding to a rambling, confused interrogator who repeats the ramble twice ... But the googles* doesn't lie -- I just googled excerpts from the excerpt above to  ensure that you, dear reader, wouldn't be able to identify the company/analyst, and a million call transcripts from different companies came up. I guess this isn't an anomaly then, but merely the grating cry of Conference Call Speak.

*Copyright pending: TM

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