Tyler Bisset

Tyler Bisset (Goldman Sachs) inquired about the specifics of Mueller Water Products' recent price increases, their magnitude compared to previous years, and whether the updated revenue guidance for the year is primarily driven by these price adjustments or by improved demand in key business segments. He also asked for a detailed breakdown of the factors contributing to the margin improvement in the Water Flow segment, specifically the impact of manufacturing efficiencies and favorable pricing, and sought insight into the expected margin trend for the remainder of the fiscal year.

Answer

Paul McAndrew (President and COO) clarified that the new guidance incorporates the recently announced annual price increase, primarily benefiting fiscal Q3, and confirmed that the majority of the increased growth in guidance is price-related. Melissa Rasmussen (CFO) explained that the largest impact on Water Flow margins came from manufacturing efficiencies due to the legacy brass foundry closure, which will continue through Q2, also noting the impact of tariffs from Q3 of the prior fiscal year.

Tyler Bisset asked about the drivers behind the raised revenue guidance for the year, specifically inquiring if it's primarily due to recent price increases and how these compare to prior years, or if improved demand in key business areas also contributes.

Answer

Paul McAndrew, President and COO, confirmed that the majority of the increased growth in guidance is predominantly price-related, stemming from the recently announced annual price increase (benefiting Q3) and prior tariff-related price increases. Melissa Rasmussen, CFO, added that the significant margin pickup in Water Flow was largely due to manufacturing efficiencies from the legacy brass foundry closure, a benefit expected to continue through Q2.

Tyler Bisset asked for JinkoSolar's Q4 margin outlook, including solar and module ASPs, and the trajectory for module ASPs in Q1 and Q2 2026, considering the increasing blend of battery business. He also sought more details on rumors regarding polysilicon policies.

Answer

CFO Charlie Cao indicated a relatively stable Q4 margin outlook compared to Q3, with the ESS business expected to achieve positive profitability in Q4. CMO Gener Miao stated it was too early to provide module ASP estimations for Q1 and Q2 2026 due to potential significant impacts from upcoming U.S. policies (FEOC, material assistance, 232) and China's anti-evolution policies and related rumors. He declined to provide further color on polysilicon rumors.

Tyler Bisset of Goldman Sachs inquired about the impact of recent U.S. AD/CVD tariffs on JinkoSolar's guidance, margins, and pricing strategy, and also asked for the company's U.S. shipment expectations for 2025.

Answer

Gener Miao, CMO, stated that JinkoSolar has prepared solutions and does not expect a significant negative margin impact from the AD/CVD tariffs, as its U.S. factory is at full utilization and it can leverage alternative supply chains. However, he noted that overall weak U.S. demand could be a headwind. Mr. Miao added that it is too early to provide specific U.S. shipment volumes for 2025 due to ongoing policy uncertainty.

Tyler Bisset with Goldman Sachs sought confirmation on the target commercial operation date for the INL plant (late 2027/early 2028) and whether the DOE pathway accelerates this. He also asked about key milestones beyond January. Additionally, he inquired about the conversion math for 20 tons of plutonium reserves into 180 tons of Aurora fuel, its implications for the fuel recycling facility, and potential acceleration of deployment.

Answer

CEO Jacob DeWitte affirmed the 2027-2028 timeline for Aurora INL operation, noting the DOE pathway enables faster construction. He highlighted other pilot programs: Atomic Alchemy's plant targeting mid-2026 operation and the Pluto test reactor. Mr. DeWitte detailed that 11% plutonium is equivalent to roughly 19-20% enriched uranium in their fast reactors, explaining the high conversion ratio. He emphasized that government plutonium availability, supported by the fuel pilot program, is a 'game changer' for accelerating reactor deployment and scaling.

Tyler Bisset, on behalf of Brian Lee from Goldman Sachs, asked if the DOE pathway accelerates the target for commercial operations at INL (late 2027/early 2028) and what key milestones to expect after January. He also sought clarification on the conversion math for 20 tons of plutonium into 180 tons of Aurora fuel, whether it requires a separate NRC license, and its impact on deployment acceleration.

Answer

Jacob DeWitte, CEO of Oklo, confirmed the 2027-2028 timeline for Aurora INL operations, noting the DOE pathway allows faster construction. He highlighted the Atomic Alchemy pilot plant targeting mid-2026 operation and the Pluto test reactor's milestones for plutonium-fueled systems. DeWitte explained that 11% plutonium is equivalent to about 19-20% enriched uranium in their fast reactors, making it a potent bridge fuel that avoids enrichment needs and accelerates time to market. He added that the DOE Fuel Pilot Program supports initial processing, potentially converting to a larger commercial facility later.

Tyler Bisset from Goldman Sachs asked about the expected trend for adjusted ROE given the capital efficiency of the CCH1 structure and how the CCH1 debt will be treated on the income statement and by credit rating agencies.

Answer

President and CEO Jeffrey Lipson clarified that the ROE figures for CCH1 are illustrative for incremental investments and not directly comparable to the full company ROE. CFO Chuck Melko projected a gradual, steady increase in overall ROE rather than a large jump. Melko also explained that the CCH1 debt is held at the unconsolidated joint venture level, so it does not appear on HASI's balance sheet, and rating agencies do not factor it into HASI's leverage as long as the JV's leverage remains below 0.5x.

Tyler Bisset, on for Brian Lee, asked about near-term opportunities from safe-harboring activities and if they contributed to Q4's transaction volume. He also questioned if transaction volume could increase in 2025 given the higher ROE.

Answer

Chief Client Officer Susan Nickey confirmed that clients took advantage of safe-harboring, which protects HASI's future pipeline, but these activities are not new safe-harboring facilities for HASI itself. President and CEO Jeffrey Lipson added that no Q4 transactions were direct safe-harboring deals and that 2025 volume guidance is based on flat to slightly increased levels, though exceeding that is possible.

Tyler Bisset, on behalf of Brian Lee from Goldman Sachs, asked why the full-year adjusted EBITDA margin guidance was maintained despite a revenue guidance increase, questioning if it was due to conservatism or specific headwinds. He also inquired about the reason for the increased corporate expense guidance.

Answer

CFO William Grogan explained that the maintained margin guidance accounts for the slightly dilutive impact of tariffs, which are expected to create 10-25 basis points of pressure on year-over-year margin expansion. He stated the company is being cautious amid market volatility. The increase in corporate expense guidance was attributed to a combination of foreign exchange effects and higher variable compensation related to the company's stronger-than-expected performance.

Tyler Bisset of Goldman Sachs inquired about the implications of LG Display's blue phosphorescent announcement, asking for a timeline to commercialization, milestones for pricing, and whether it would accelerate development among other customers.

Answer

CFO Brian Millard expressed pleasure with LG Display's announcement, stating it was a positive step. He noted that specific product timelines are up to customers and OEMs to disclose. Millard confirmed UDC is in constant dialogue regarding pricing and that other customers have their own ongoing development programs for blue.

Tyler Bisset, on for Brian Lee, asked about the specific drivers for the revised cash generation guidance assumptions and whether to expect further cash outlays for safe harboring equipment.

Answer

CFO Danny Abajian detailed that guidance revisions were due to a delayed ITC ramp in the affiliate channel, more conservative cost of capital assumptions, and updated volume outlooks. He clarified that future safe harbor activity would be a run-rate item, and the current guidance does not assume additional large, one-time purchases.