KeyBanc-Jan-22-2013.pdf

1
January 22, 2013
ENERGY: Multi-Utilities / Electric Utilities
Industry Update / Estimates Change
KeyBanc
Capital￿Markets

Electric Utilities Industry: 4Q12 Earnings Preview
KeyBanc Capital Markets Inc.
Member NYSE/FINRA/SIPC
Paul T. Ridzon: [phone] Ð [e-mail]
Timothy Yee: [phone] Ð [e-mail]
ACTION STATEMENT
On average, we expect that the companies in our coverage universe will report generally higher 4Q12 quarterly earnings, up 4.0%
compared to 4Q11. Our EPS growth expectations for our coverage universe represent average annual earnings growth of 1.0% for
2012 followed by 2.0% earnings growth in 2013. Our coverage universe currently trades at an average peer group 2013 P/E multiple
of 14.9x compared to the broader market S&P 500 index P/E multiple of 13.7x.
This quarter, we anticipate one potential earnings upside [TECO Energy, Inc. (TE-NYSE)] and one downside [NextEra Energy, Inc.
(NEE-NYSE)] surprise relative to current consensus expectations. We also highlight ALLETE, Inc. (ALE-NYSE), Exelon Corporation
(EXC-NYSE), Great Plains Energy Incorporated (GXP-NYSE), NV Energy, Inc. (NVE-NYSE), Pepco Holdings, Inc. (POM-NYSE), andTECO Energy, Inc. (TE-NYSE) as names to focus on around the earnings release or conference call due to company-specific issues
that we feel bear watching.
KEY INVESTMENT POINTS
Preview Focus Names ± We anticipate one potential earnings upside [TECO Energy, Inc. (TE-NYSE)] and downside [NextEra Energy,
Inc. (NEE-NYSE)] surprise relative to current consensus expectations this quarter. We also highlight ALLETE, Inc. (ALE-NYSE),
Exelon Corporation (EXC-NYSE), Great Plains Energy Incorporated (GXP-NYSE), NV Energy, Inc. (NVE-NYSE), Pepco Holdings,
Inc. (POM-NYSE), and TECO Energy, Inc. (TE-NYSE) as names that may trade around specific issues likely to be discussed during
their company©s earnings conference calls. We discuss our focus names in the detailed sections that follow.
Earnings Expectations ± We expect that companies in our coverage universe will generally report higher 4Q12 quarterly earnings,
up 4.0% over 4Q11. Our EPS growth expectations for our coverage universe represent average annual earnings growth of 1.0% for
2012, followed by 2.0% earnings growth in 2013. This quarter, we believe that earnings will primarily be driven by cooler winter weather
compared to a mild 4Q11, riders and rate impacts, year-end cost controls, and slow local economies partially offset by merchant
weakness from low power prices and soft demand, higher non-fuel operating and maintenance expenses, customer conservation
efforts, and retail competition.
We expect that earnings conference calls this quarter may focus on the following themes: retail weather normalized sales volumes
following unexpected negative demand trends in the 3Q12 period, impacts from Hurricane Sandy, commentary on industrial demand
given that the fiscal cliff has been averted, sentiment around the outlook for merchant power (and any changes in hedging strategy at
unregulated generators), and any plans to delay filing rate cases given a trend of declining authorized returns in the current interest
rate environment.
Sector Thoughts ± Full year 2012 performance of the utility sector was somewhat disappointing as the UTY index lost 4.7% of its value
as the S&P 500 gained 13.4%. The group experienced burst of outperformance during periods of investor concern around Europe,
but quickly gave back gains as situations stabilized. Investors got more aggressive throughout the year and early gains in the utility
sector attributable to using the group as a relative "safe haven" were more than lost. We believe 2013 utility performance is likely to
mirror 2012, as weak power pricing, concerning demand trends, and a slow erosion of authorized ROE©s may dampen appetite for the
sector in all but a rather bleak economic environment.
FOR IMPORTANT DISCLOSURES AND CERTIFICATIONS, PLEASE REFER TO PAGE 9 OF THIS NOTE.
2
Recent Trading Trends ± Out of the gate in 2013, utilities displayed strength as fiscal cliff legislation around reasonable treatment of
dividend taxes and extension of the wind tax credit eased some concerns; however, the modest (up 2.7%) year-to-date performance
of the UTY relative the 4.7% gain in the S&P suggests that investors are once again in a more "risk on" mode, similar to 2012. We
believe that the next event likely to drive the performance of utility stocks is how contentious discussions in Washington D.C. become
around addressing the debt ceiling.
Among our BUY-rated names that we believe are well positioned in the current market are ALLETE, Inc. (ALE-NYSE) with attractive
load growth and capital opportunities in a stable regulatory environment, Cleco Corporation (CNL-NYSE) with ability to grow its
dividend and IDACORP, Inc. (IDA-NYSE), which trades at a meaningful discount to the group despite what we consider attractive
investment opportunities and ability to grow the dividend.
4Q12 EARNINGS PREVIEW
For 4Q12, we anticipate one potential upside surprise and one potential downside surprise, relative to current consensus expectations:
Potential Upside Surprise
TECO Energy (TE-NYSE; HOLD; 4Q estimate of $0.24 vs. $0.25 in 4Q11; consensus is $0.20) ± We look for TE to post results
better than consensus expectations as better weather and lower carrying costs partly offset the earnings reduction of nearly $0.03 per
share due to classifying the Guatemalan assets as discontinued operations.
Potential Downside Surprise
NextEra Energy (NEE-NYSE; HOLD; 4Q estimate of $0.90 vs. $0.93 in 4Q11; consensus is $0.97) ± We believe the consensus
estimate for NEE does not fully contemplate the roll-off of a favorable tax item at the corporate segment or the fact that the November
wind resource was well below normal. While the December wind resource has not been recorded, if we assume it was normal, we
estimate that lighter winds will have a $0.03-$0.04 negative incremental impact vs. 4Q11.
ISSUES TO WATCH
Company-specific issues that bear further watching include:
ALLETE, Inc. (ALE-NYSE; BUY, $45.50 price target) ± With a one-year extension of the federal wind production tax credit, we
expect ALE is likely to act quickly to add an incremental wind farm. We believe shares would react positively to a formal announcement
to pursue this capital opportunity.
Exelon Corporation (EXC-NYSE; HOLD) ± On its 3Q12 call, EXC indicated it would take the next six months to consider the
appropriate dividend level, given the impact of weakened power prices in cash flow. Any update as to the level and timing of a change
in the dividend could potentially move the share price. In our view, the market currently forecasts a 40-50% reduction.
Great Plains Energy Incorporated (GXP-NYSE; HOLD) ± Management has indicated that it seeks to reduce historic regulatory
lag of 100-200 basis points to a target level of 50 basis points. Relative to recent rate case test years, load growth has slowed and
nuclear costs are expected to rise. We expect investors will be interested in whether GXP bases 2013 guidance on achieving its 50
basis points lag target or takes a more conservative view.
NV Energy, Inc. (NVE-NYSE; HOLD) ± At recent meetings, NVE management has indicated that it saw signals that the Las Vegas
economy was showing positive signs; however, to be conservative, management maintained its forecast of modest customer growth
until a sustained trend is observed. We look forward to an update on the trend to see if management adopts a more positive stance.
Pepco Holdings, Inc. (POM-NYSE; HOLD) ± We look for a management update on the Company©s assessment of its cross-border
energy lease investments, where a recent federal appeals court opinion in another case disallowed tax benefits for certain lease-in,
lease-out transactions and could potentially lead to POM recording material non-cash charges to earnings in 1Q13.
TECO Energy, Inc. (TE-NYSE; HOLD) ± TE is expected to give 2013 guidance when it releases 2012 earnings. A large driver of TE's
earnings is driven by its coal mining segment and volatility around the pricing of metallurgical coal. TE had a cautious tone around the
coal markets in its preliminary discussion of 2013 drivers at the EEI conference. We expect since that time TE has contracted more
tonnage and can give a more detailed update.
Company NoteJanuary 22, 2013
3
ANNUAL ESTIMATE CHANGES
Decreases
Avista Corporation (AVA-NYSE; HOLD) ± We are lowering our 2012 EPS estimate to $1.50 from $1.55 given year-to-date results
and mild 4Q weather.
NextEra Energy, Inc. (NEE-NYSE; HOLD) ± We are lowering our 2012 EPS estimate to $4.45 from $4.50 due to 4Q roll-off of a
favorable tax item, weaker merchant results, and an expected weaker wind resource partly offset by Florida riders.
Pinnacle West Capital Corporation (PNW-NYSE; HOLD) ± We are lowering our 2013 EPS estimate to $3.50 from $3.55 due to
the delay in completing the Four Corners power plant transaction, which will delay the Company earning a return on the plant.
Valuation Table for Companies in This Report with Changed Annual Estimates
Company TKR Rating
2012E
EPS
2013E
EPS
2013
P/E
Price Tgt
P/E
Price
Target
Avista Corp.AVA Hold $1.50 $1.75 14.1x N/A N/A
NextEra Energy, Inc.NEE Hold $4.45 $4.95 14.5x N/A N/A
Pinnacle West Capital Corp.PNW Hold $3.45 $3.50 15.0x N/A N/A
14.9xKBCM Utility Peer Group Average Multiple =
Source: KeyBanc Capital Markets Inc. estimates
INVESTMENT OPINION
The following tables outline our 4Q12 operating earnings estimates and 4Q12 weather data with estimated EPS impacts for electric
utility companies under coverage.
Company NoteJanuary 22, 2013
4
4Q12 EPS Estimates
Company Ticker 4Q12E 4Q11A 2012E 2013E
Ameren Corp.ALE $0.74 $0.53 2.55 2.70
Allete Inc.AEE $0.13 $0.14 2.40 1.95
American Electric Power Co.AEP $0.46 $0.40 3.05 3.10
Avista Corp.AVA $0.45 $0.42 1.50 1.75
CMS Energy, Inc.CMS $0.24 $0.15 1.55 1.65
Cleco Corp.CNL $0.31 $0.45 2.40 2.55
Consolidated Edison, Inc ED $0.71 $0.74 3.75 3.85
DTE Energy Co.DTE $0.85 $0.89 3.95 4.00
Dominion Resources, Inc.D $0.67 $0.58 3.05 3.35
Duke Energy Corp.DUK $0.64 $0.72 4.25 4.35
Entergy Corp.ETR $1.03 $0.94 5.55 5.20
Exelon Corp.EXC $0.65 $0.82 2.85 2.60
FirstEnergy Corp.FE $0.80 $0.77 3.35 3.00
Great Plains Energy, Inc.GXP $0.00 $0.01 1.30 1.60
IDACORP, Inc.IDA $0.30 $0.18 3.35 3.25
MDU Resources Group, Inc.MDU $0.37 $0.39 1.15 1.35
NV Energy, Inc.NVE $0.08 ($0.11)1.35 1.25
NextEra Energy, Inc.NEE $0.90 $0.93 4.45 4.95
NiSource, Inc.NI $0.40 $0.28 1.45 1.55
Northwestern Corp.NWE $0.74 $0.93 2.35 2.45
Otter Tail Corp.OTTR $0.32 ($0.02)1.20 1.35
PPL Corp.PPL $0.41 $0.71 2.35 2.40
Pepco Holdings, Inc.POM $0.19 $0.15 1.15 1.25
Pinnacle West Capital Corp.PNW $0.20 $0.11 3.45 3.50
Portland General Electric Co.POR $0.41 $0.38 1.90 1.95
Southern Company SO $0.39 $0.30 2.65 2.80
TECO Energy, Inc.TE $0.24 $0.25 1.15 1.10
Wisconsin Energy Corp.WEC $0.43 $0.49 2.35 2.40
Xcel Energy Inc.XEL $0.27 $0.29 1.80 1.90
Source: KeyBanc Capital Markets Inc. estimates
Company NoteJanuary 22, 2013
5
4Q12 Heating Degree Days Deviation and Estimated EPS Impact
Company Ticker
4Q12 vs
Normal
4Q12 vs
4Q11
Estimated
Same Qtr YOY
EPS Impact
Allete Inc.ALE (7.0)%13.4%$0.01
Ameren Corp.AEE (11.5)%13.8%$0.03
American Electric Power, Inc.AEP (15.5)%(1.9)%$0.00
Avista Corp.AVA (12.3)%(9.1)%($0.02)
CMS Energy Corp.CMS (10.9)%7.8%$0.03
DTE Energy Co.DTE (11.1)%12.6%$0.03
Dominion Resources, Inc.D (7.0)%15.8%$0.06
(7.2)%29.4%
(34.0)%*(2.2)%*
Entergy Corp.ETR (13.8)%(2.8)%($0.01)
Exelon Corp.EXC (11.1)%13.0%$0.03
Great Plains Energy, Inc.GXP (10.0)%4.1%$0.01
NV Energy, Inc.NVE (27.2%)(21.6%)($0.01)
NiSource, Inc.NI (7.1)%12.6%$0.02
Pepco Holdings, Inc.POM (6.9)%10.2%$0.01
(39.7)%(36.0)%
58.0%*22.4%*
Portland General Electric Co.POR (12.6)%(13.3)%($0.04)
(17.9)%3.3%
(17.4)%*7.2%*
(26.4)%196.8%
(3.1)%*(7.4)%*
Wisconsin Energy Corp.WEC (10.9)%9.5%$0.03
Xcel Energy, Inc.XEL (11.5)%1.7%$0.00
Pinnacle West Capital Corp.PNW $0.02
Duke Energy, Inc.DUK $0.08
$0.01
$0.01Southern Company SO
TECO Energy, Inc.TE
*Data represents cooling degree days.
Note: CMS and DTE - Michigan electric decoupling ended in April 2012.
Source: National Oceanic and Atmospheric Administration (NOAA), KeyBanc Capital Markets Inc. estimates
ABOUT WEATHER DATA
Most companies give their earnings guidance using the assumption of normal weather in their territories. Temperature is an
uncontrollable variable for utility companies and can have a material impact on earnings when the deviation from normal is significant.
Our intention in developing this research product is to give investors a look at potential earnings variability so that they can adjust
their expectations. We believe that this incremental information will allow investors to capture value by responding to potential market
overreaction to earnings surprises induced by a factor beyond management control. Favorable weather in a peak month can materially
raise a company©s earnings for a quarter, inflating the company©s perceived performance and presenting a sell opportunity. The reverse
is true for poor weather, which can make an otherwise successful quarter end with lower earnings than expected. Year-over-year
weather comparisons are also useful for noting where an earnings shortfall or uptick may take place for a utility.
Our data is presented as a percentage differential between normal and the previous year©s heating or cooling degree-days. The
magnitude of the numbers can be misleading, in our opinion, depending on the normal temperature of the territory. A 10% increase
in cooling degree-days in a historically warm climate may be significant, while a 100% increase in heating degree-days in the same
climate can, in fact, be very small.
The data included in this report is an approximation, based on heating and cooling degree-day totals taken from cities within each
company©s service territory. The weighting of the territories is based upon our assumptions of customer distribution within each
company©s service territory and may differ from actual company data. The per share impact of weather is an estimate based on previous
year impacts given by the company and our estimates on weather deviation from normal and prior-year periods. We continuously fine-
tune and calibrate our models in an effort to maintain and improve the accuracy of our forecasts.
Company NoteJanuary 22, 2013
6
BACKGROUND ON DEGREE DAYS
A degree day is the variation of the daily average temperature from 65 degrees Fahrenheit. Heating degree days relate to temperatures
below 65 degrees, while cooling degree days are for average temperatures above this temperature. As an example, if the average
temperature over the course of a 24-hour day were 70 degrees, this would equate to five cooling degree days. Conversely, an average
60-degree temperature day would be five heating degree days.
Company NoteJanuary 22, 2013
7
Cur Prv Cur Prv FC FC Current EPS Previous EPS
Sym Rtg Rtg Target Target 2012 2013 2012 2013 2014 2012 2013 2014
AEE HOLD HOLD NA NA $2.44 $2.05 $2.40 $1.95 --$2.40 $1.95 --
AEP BUY BUY $45.50 $45.50 $3.04 $3.13 $3.05 $3.10 --$3.05 $3.10 --
ALE BUY BUY $45.50 $45.50 $2.57 $2.74 $2.55 $2.70 --$2.55 $2.70 --
AVA HOLD HOLD NA NA $1.53 $1.76 $1.50 $1.75 --$1.55 $1.75 --
CMS BUY BUY $25.50 $25.50 $1.54 $1.63 $1.55 $1.65 --$1.55 $1.65 --
CNL BUY BUY $44.00 $44.00 $2.43 $2.53 $2.40 $2.55 --$2.40 $2.55 --
D HOLD HOLD NA NA $3.06 $3.37 $3.05 $3.35 --$3.05 $3.35 --
DTE HOLD HOLD NA NA $3.91 $4.03 $3.95 $4.00 --$3.95 $4.00 --
DUK HOLD HOLD NA NA $4.27 $4.38 $4.25 $4.35 --$4.25 $4.35 --
ED HOLD HOLD NA NA $3.77 $3.83 $3.75 $3.85 --$3.75 $3.85 --
ETR HOLD HOLD NA NA $5.51 $5.06 $5.55 $5.20 --$5.55 $5.20 --
EXC HOLD HOLD NA NA $2.85 $2.55 $2.85 $2.60 --$2.85 $2.60 --
FE HOLD HOLD NA NA $3.34 $2.98 $3.35 $3.00 --$3.35 $3.00 --
GXP HOLD HOLD NA NA $1.31 $1.58 $1.30 $1.60 --$1.30 $1.60 --
IDA BUY BUY $46.00 $46.00 $3.35 $3.26 $3.35 $3.25 --$3.35 $3.25 --
MDU BUY BUY $24.00 $24.00 $1.14 $1.35 $1.15 $1.35 --$1.15 $1.35 --
NEE HOLD HOLD NA NA $4.51 $4.95 $4.45 $4.95 --$4.55 $4.95 --
NI BUY BUY $27.50 $27.50 $1.45 $1.56 $1.45 $1.55 --$1.45 $1.55 --
NVE HOLD HOLD NA NA $1.34 $1.28 $1.35 $1.25 --$1.35 $1.25 --
NWE HOLD HOLD NA NA $2.35 $2.47 $2.35 $2.45 --$2.35 $2.45 --
OTTR HOLD HOLD NA NA $1.19 $1.34 $1.20 $1.35 --$1.20 $1.35 --
PNW HOLD HOLD NA NA $3.42 $3.55 $3.45 $3.50 --$3.45 $3.55 --
POM HOLD HOLD NA NA $1.20 $1.24 $1.15 $1.25 --$1.15 $1.25 --
POR HOLD HOLD NA NA $1.91 $1.92 $1.90 $1.95 --$1.90 $1.95 --
PPL HOLD HOLD NA NA $2.35 $2.42 $2.35 $2.40 --$2.35 $2.40 --
SO HOLD HOLD NA NA $2.62 $2.78 $2.65 $2.80 --$2.65 $2.80 --
TE HOLD HOLD NA NA $1.18 $1.14 $1.15 $1.10 --$1.15 $1.10 --
WEC HOLD HOLD NA NA $2.33 $2.41 $2.35 $2.40 --$2.35 $2.40 --
XEL HOLD HOLD NA NA $1.80 $1.90 $1.80 $1.90 --$1.80 $1.90 --
Company NoteJanuary 22, 2013
8
KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC Paul T. Ridzon
Electric Utility Research [phone]
4th Quarter 2012 Earnings Estimates Timothy Yee
[phone]
Exp.Cons.
Report Est.(b,c)2012E 2013E
Company TKR Rtg P/T Date 12E 11A 12E 11A 4Q12E Old New Old New KBCM 4Q12 Expected Drivers
Allete ALE Buy $45.50 15-Feb $0.74 $0.53 $0.74 $0.53 0.75 (6)2.55 2.70 Higher earnings from new projects, colder weather
Ameren AEE Hold 20-Feb ($4.55)$0.10 $0.13 $0.14 0.22 (5)2.40 1.95 Lower merchant results offset roll-off of nuclear outage. GAAP includes merchant impairment charge
American Electric Pwr.AEP Buy $45.50 28-Jan $0.46 $0.64 $0.46 $0.40 0.45 (10)3.05 3.10 Rate increases partly offset by customer switching and early debt retirement cost
Avista Corp.AVA Hold 20-Feb $0.37 $0.42 $0.45 $0.42 0.44 (5)1.55 1.50 1.75 Higher rates party offset by milder weather. GAAP includes early retirement charge
CMS Energy CMS Buy $25.50 21-Feb $0.24 $0.15 $0.24 $0.15 0.24 (7)1.55 1.65 New rates, more normal weather and lower uncollectibles drive higher earnings
Cleco Corp.CNL Buy $44.00 20-Feb $0.31 $0.51 $0.31 $0.45 0.33 (3)2.40 2.55 Roll-off of favorable tax item and higher depreciation expense
Consolidated Edison ED Hold 24-Jan $0.71 $0.65 $0.71 $0.74 0.73 (9)3.75 3.85 Higher costs offset rates
DTE Energy DTE Hold 15-Feb $0.85 $0.88 $0.85 $0.89 0.87 (8)3.95 4.00 Higher spending at Detroit Edison partly offset by new gas rates
Dominion Resources D Hold 31-Jan $0.67 $0.35 $0.67 $0.58 0.69 (12)3.05 3.35 Colder weather, new rates partly offset by pressure on merchant results
Duke Energy DUK Hold 13-Feb $0.64 $0.66 $0.64 $0.72 0.66 (11)4.25 4.35 Higher expenses partly offset by new rates
Entergy ETR Hold 8-Feb $1.03 $0.87 $1.03 $0.94 0.96 (11)5.55 5.20 Utility net revenues partially offset by higher expenses and lower merchant nuclear pricing
Exelon EXC Hold 7-Feb $0.65 $0.91 $0.65 $0.82 0.65 (12)2.85 2.60 Commodity and capacity markets drive lower earnings
First Energy FE Hold 26-Feb $0.80 $0.23 $0.80 $0.77 0.84 (10)3.35 3.00 Lower capacity pricing offset by colder weather and higher retail sales
Great Plains Energy GXP Hold 28-Feb $0.00 $0.01 $0.00 $0.01 0.03 (4)1.30 1.60 More normal weather offset by industrial load pressures
IDACORP IDA Buy $46.00 21-Feb $0.30 $0.18 $0.30 $0.18 0.30 (3)3.35 3.25 New rates and Langley Gulch plant in rate base
MDU Resources MDU Buy $24.00 5-Feb $0.37 $0.32 $0.37 $0.39 0.39 (7)1.15 1.35 Lower E&P and pipeline results partly offset by improved construction markets
NV Energy NVE Hold 11-Feb*$0.08 ($0.11)$0.08 ($0.11)0.07 (11)1.35 1.25 New rates recover costs of Harry Allen plant, usage growth and O&M savings
NextEra Energy NEE Hold 29-Jan $0.90 $1.59 $0.90 $0.93 0.97 (13)4.55 4.45 4.95 Riders in Florida offset by roll-off of favorable tax item, lower merchant and weaker wind resource
NiSource NI Buy $27.50 19-Feb $0.40 $0.05 $0.40 $0.28 0.42 (7)1.45 1.55 New investment and new electric rates lead to higher earnings
Northwestern Corp.NWE Hold 14-Feb $0.74 $0.93 $0.74 $0.93 0.76 (3)2.35 2.45 Roll-off of favorable tax item and loss of FERC return on Dave Gates plant
Otter Tail Corp.OTTR Hold 11-Feb $0.22 ($1.23)$0.32 ($0.02)0.30 (3)1.20 1.35 Electric, Plastics, and Manufacturing segment growth offset by Construction cost overruns. GAAP has discontinued operations
PPL Corp.PPL Hold 14-Feb $0.41 $0.78 $0.41 $0.71 0.46 (9)2.35 2.40 Merchant earnings decline and unplanned December nuclear outage, partly offset by more normal weather
Pepco Holdings POM Hold 1-Mar $0.19 $0.08 $0.19 $0.15 0.19 (5)1.15 1.25 New rates and colder weather partly offset by lower Energy Services results and Hurricane Sandy impacts
Pinnacle West Capital Corp.PNW Hold 22-Feb $0.20 $0.11 $0.20 $0.11 0.16 (10)3.45 3.55 3.50 New electric rates and better weather partly offset by higher O&M and property taxes
Portland General Electric POR Hold 22-Feb $0.41 $0.38 $0.41 $0.38 0.43 (6)1.90 1.95 Modest load growth and lower interest expense partly offset by milder weather
Southern Company SO Hold 30-Jan $0.39 $0.30 $0.39 $0.30 0.40 (14)2.65 2.80 New Georgia rates offset higher share count
TECO Energy TE Hold 5-Feb $0.26 $0.25 $0.24 $0.25 0.20 (7)1.15 1.10 Slight improvement in weather, Guatemala assets in discontinued operations
Wisconsin Energy WEC Hold 30-Jan $0.43 $0.50 $0.43 $0.49 0.42 (8)2.35 2.40 More normal tax rate and O&M timing reduce results, partly offset by improved weather
Xcel Energy XEL Hold 31-Jan $0.27 $0.29 $0.27 $0.29 0.28 (10)1.80 1.90 Hot summer prompts higher plant maintenance during cooler 4Q
n/e = not estimated
(a) Excludes one-time nonrecurring extraordinary items
(b) FirstCall consensus
(c) Number of analyst estimates
* Earnings expected during Week indicated
Table Sources: Company reports, FirstCall, KBCM estimates
Annual EPS
4Q EPS 4Q EPS (a)
Operating Reported
Company NoteJanuary 22, 2013
9
KeyBanc Capital Markets Inc. Disclosures and Certifications
Important disclosures for the companies mentioned in this report can be found at https://key2.bluematrix.com/sellside/
Disclosures.action.
Please refer to the analysts© recently published reports for company-specific valuation and risks.
Reg A/C Certification
The research analyst(s) responsible for the preparation of this research report certifies that:(1) all the views expressed in
this research report accurately reflect the research analyst©s personal views about any and all of the subject securities or
issuers; and (2) no part of the research analyst©s compensation was, is, or will be directly or indirectly related to the specific
recommendations or views expressed by the research analyst(s) in this research report.
Rating Disclosures
Distribution of Ratings/IB Services Firmwide and by Sector
KeyBanc Capital Markets
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]221 43.68 46 20.81
HOLD [HOLD]275 54.35 58 21.09
SELL [UND]10 1.98 2 20.00

ENERGY
IB Serv/Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY]30 47.62 15 50.00
HOLD [HOLD]33 52.38 18 54.55
SELL [UND]0 0.00 0 0.00

Rating System
BUY - The security is expected to outperform the market over the next six to 12 months; investors should consider adding the
security to their holdings opportunistically, subject to their overall diversification requirements.
HOLD - The security is expected to perform in line with general market indices over the next six to 12 months; no buy or sell
action is recommended at this time.
UNDERWEIGHT - The security is expected to underperform the market over the next six to 12 months; investors should
reduce their holdings opportunistically.
The information contained in this report is based on sources considered to be reliable but is not represented to be
complete and its accuracy is not guaranteed. The opinions expressed reflect the judgment of the author as of the
date of publication and are subject to change without notice. This report does not constitute an offer to sell or a
solicitation of an offer to buy any securities. Our company policy prohibits research analysts and members of their
families from owning securities of any company followed by that analyst, unless otherwise disclosed. Our officers,
directors, shareholders and other employees, and members of their families may have positions in these securities and
may, as principal or agent, buy and sell such securities before, after or concurrently with the publication of this report.
In some instances, such investments may be inconsistent with the opinions expressed herein. One or more of our
employees, other than the research analyst responsible for the preparation of this report, may be a member of the Board
of Directors of any company referred to in this report. The research analyst responsible for the preparation of this report is
compensated based on various factors, including the analyst©s productivity, the quality of the analyst©s research and stock
recommendations, ratings from investor clients, competitive factors and overall Firm revenues, which include revenues
derived from, among other business activities, the Firm©s performance of investment banking services. In accordance with
industry practices, our analysts are prohibited from soliciting investment banking business for our Firm.
Investors should assume that we are seeking or will seek investment banking or other business relationships with the
company described in this report.
Company NoteJanuary 22, 2013