Good day, everyone, and welcome to the NextEra Energy 2014 First Quarter Earnings Call. Today's conference is being recorded. At this time, for opening remarks, I would like to turn the call over to Amanda Finnis. Please go ahead.

Thank you, Lisa. Good morning, everyone, and welcome to our first quarter 2014 earnings conference call. With me, this morning, are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; Moray Dewhurst, Vice Chairman and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Eric Silagy, President of Florida Power & Light Company. Jim will get us started today with opening remarks, and then Moray will provide an overview of our results. Our executive team will then be available to answer your questions. We will be making forward-looking statements during this call based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release and the comments made during this conference call in the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found in the Investor Relations section of our website, www.nexteraenergy.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to adjusted earnings, which is a non-GAAP financial measure. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliation of non-GAAP measure to the closest GAAP financial measure. With that, I will turn the call over to Jim.

Thanks, Amanda, and good morning, everyone. Before I turn the call over to Moray to discuss our first quarter results, I'd like to take a moment to update you on an important topic. As you all know, for some months now we've been assessing the possibility of forming a so-called yieldco. After extensive analysis and careful thought, we've made the judgment that it is in the best interest of our shareholders for us to take the next step in this process. And on April 4, we've filed confidentially with the SEC a draft S-1 registration statement, which would allow us to move forward with a yieldco structure following the SEC review process and subject to market conditions. Unfortunately, having given you this information, we're now very restricted from offering you the additional information that I know you will all be looking for. As you may know, there is a concern that conveying the information about the yieldco at this time might be construed by the SEC as a prohibited offer of securities under the SEC rules, which in turn could lead to delays in our ability to move forward with the transaction. Accordingly, we've concluded that it would be best to wait until after the S-1 is public before providing more detail. Thus, we'll not be able to discuss with you today such matters as the exact projects or megawatts involved over time or the financial performance of the assets that we expect to make available for purchase by the yieldco, or many other things that I know you will have questions about. Further, while it is our present intention to move forward with this transaction, there can be no guarantee that we will be able to execute successfully on terms that we believe will create long-term value for our…

Thanks, Jim. Good morning, everyone. As Jim said, we had an excellent first quarter overall. Our financial and operating performance was very strong, and we continued to make good progress on our capital projects and other strategic initiatives consistent with the strategies we discussed in our investor conference over a year ago. We continue to believe we are well positioned to deliver against the financial expectations we shared with you out through the 2016 time frame. At Florida Power & Light, we continue to drive value for our customers through low bills, high reliability and excellent customer service, and for our shareholders through strong earnings growth. For the fifth year in a row, our typical residential customer bills are the lowest in the state, and are currently about 25% below the national average. Our major capital projects remain on track, and I'm pleased to note that the second of our 3 generation modernization projects at Riviera Beach entered service just after the end of the first quarter, about 2 months earlier than originally anticipated, and slightly below the cost estimates submitted to the PSC in 2008. Construction has begun on the Port Everglades modernization, which we expect to come on line in mid-2016. During the quarter, we invested another $1 billion of capital in FPL, consistent with our strategy of steadily improving the long-term value we offer our customers. At Energy Resources, our development and construction programs remain on track, and our backlog of contracted renewables projects continues to develop with the PPA for roughly 250 megawatts of U.S. wind signed since the last call. Increased contributions from our contracted renewables portfolio continue to drive earnings growth. The extreme market conditions in the Northeast and mid-Atlantic, particularly during January, caused parts of our customer supply business to underperform, but this…

[Operator Instructions] And we'll take our first question from Julien Dumoulin-Smith from UBS.

I wanted to ask just quickly if you could -- I know you can't comment specifically on the yieldco, but as you think about your broader renewables commitment, how does this change your view on what is possible from a development perspective? And I suppose could you address that both from the utility scale and from a smaller scale perspective on solar and wind?

Well, as Jim said in the prepared remarks, we are limited in what we can say. All I can really say is that we continue to believe that we will see long-term growth in demand for renewables in this country. We continue to believe that we will be well positioned to compete to gain a share of that demand, and that demand will be seen both on the wind and the solar side varied by geography, but beyond that I really can't go.

Excellent. And I suppose just in thinking about what is within the context of eligible, is it fair to say that your prior comments still apply?

Again, I can't really say anything more than we've said to date.

Okay. Fair enough, just trying to get that out there. And then just secondly, as you look at the expectation for double tier, we've heard -- I suppose a little bit on the PTC expansion. What are your thoughts? What are you seeing out there in the market as a result of that? Does that mean that clients potentially are pushing out their desire to lock up contracts given the potential for the extension? How has that changed the dynamics as best you see it?

Well, I'll ask Armando to offer some more details. But just generally, I would say there continues to be good interest. We're in active dialogue with a number of customers. But as always, the uncertainty about the extension of the PTC does play in. So at this point, I think there is very good odds that we will see another extension in the PTC. But obviously, the uncertainty does affect how that plays out in the marketplace. Armando?

I don't have anything to add to that one.

And we'll go next to Stephen Byrd with Morgan Stanley.

I wanted to just talk about the growth in solar and from a strategic point of view how you think about the approach. We're seeing more distributed solar done both residential and commercial. And there the economics you really under net metering rules, there is potentially very good margin in the sense of -- as solar installation costs drop you're able to arbitrage most of the utility bill, whereas in large solar projects its often still done under RFP and somewhat competitive in that regard. How do you think about the growth in solar in terms of, take for example in commercial solar? Do you see potentially going down market in a sense of smaller projects over time? Or do you think you'll likely remain fairly a large-scale in terms of as you think about solar?

Well, Steven, we're certainly going to continue to have a concentration on large-scale solar projects. As I think you know we have had now for some time a relatively small development effort in the distributed C&I space. So we do think that there will be some opportunities there. But I guess the main comment that I would make on this subject is that in sort of broad strategy terms, we want to try and be aligned with what we perceive to be the long-term fundamentals of economics, and even with -- regardless of how prices are coming down, we continue to see the fundamental economics of larger-scale solar projects dominating those of small-scale solar projects, particularly the very small-scale solar projects such as residential rooftop. So we recognize that there is a market opportunity for some folks, driven by, I would say, specific market rules, but we are a little leery when those market rules really don't match up with the underlying economics. So for the long-term, we want our development activity to be aligned with the fundamentals of the economics.

I would just add, Steven, this is Jim, that I think it's really dangerous to assume that from a rate design standpoint across utilities across the country that they're not going to very aggressively address the fact that there is a effectively a net metering subsidy in non-solar rooftop. Residential solar rooftop users are effectively paying the grid costs of the solar rooftop users through -- as a result of the net metering subsidy. I think it's very dangerous to assume that utilities aren't going to aggressively address that through rate design over the next several years.

Excellent color and very fair point. Understood. And just in Florida, as we look, we've seen a lot of potential legislative activity on solar. Are there any things in particular we should be most focused on as we watch? It's honestly hard to tell the noise from the substance in terms of just the variety of potential legislative activity. Any further color you can add on solar legislative activity in Florida?

Well, I'll ask Eric to comment specifically, but what's going on in Florida here, at least from our perspective, is that we believe there are some opportunities to introduce more solar into the system, and we want to come forward with proposals that are the most economic for our customers. But on the political, Eric, do you have any thoughts?

What I would add is that the -- this week is the last week of the legislative session for 2014. So it's going to end on Friday. There's no pending legislation with regards to any type of solar or renewables at this point. And as Moray said, we're exploring opportunities where it makes economic sense. But there has being a real focus by the legislative body to make sure that primarily power prices stay affordable and customers have the lowest bills possible.

And we'll go next to Paul Patterson with Glenrock Associates.

Just -- I'm sorry, if I missed this. Did you guys -- or can you guys say when the S-1 the public one will be filed?

Well, the timing obviously depends upon the SEC review process. I would hope that we would be talking a matter of several weeks rather than several months.

Okay, great. And then just to make sure the -- just wanted to follow-up on the merchant -- the main merchant stuff and the change reversal. Are you guys -- has there been any strategic change with respect to merchant exposure strategically because of changes in the market or anything? Or is this just simply because of this 1 asset that you're being offered and what have you?

It's really specific to the asset. And also, to be fair, how the asset fits into our portfolio. It has a distribution of outcomes that is not at all symmetrical, but it -- when it does well it offsets other parts of the portfolio that may not be doing so well. But it was fundamentally a question of the value that we were receiving in the bids wasn't consistent with our view in the fundamentals. And obviously the fundamentals of that market has strengthened a little bit relative to this time last year when we originally made the decision to put it up for sale.

Okay. But there's been no change in your move to more contracted and what-have-you assets, is that correct?

That's correct. In terms of new development activities, you're going to see pretty much everything we do will continue to be in contracted space.

Okay. And then just finally on the weather impact, I just wasn't clear on a normalized earnings basis. What the -- I saw the $0.11 that was negative and I saw the 2.9% sales growth. I just wasn't clear about what -- and I'm sorry if I missed it -- what the net-net sort of weather impact was for the quarter on a U.S. basis?

You really can't look at the net weather impact for us as an enterprise. You have to look at the 2 businesses separately. Because they're accounting for the rate agreement, the weather impact at FPL is absorbed into the overall calculation and effectively is adjusted out by the use of surplus depreciation, because we are effectively managing to the predetermined ROE. So it has a longer-term impact, but it doesn't have a direct impact in the short-term. On the Energy Resources side, wind -- on a year-over-year basis, wind resource contributed about $0.09, so $0.09 up versus the year. So the pure resource component was about $0.09.

Versus the $0.11 negative, right?

Yes. Okay. To be fair, I mean, not all of the $0.09 can directly be attributed to the weather, but associated with $0.11, if you understand what I mean.

And we'll take our next question from Steven Fleishman from Wolfe Research.

First, just wanted to ask on the utility. The -- so just wanted to understand, the 11.5% ROE is what you expect to earn within the guidance for this year, and it's just a matter of how much is kind of -- the amortization was around to kind of get you to that and the more you can do, yes.

Yes, that's a fair characterization. So for this year, we will be at 11.5%. And as I've said in the prepared remarks, looking forward, based on where we are at the moment, we think, we can continue to be in the upper half of the 9.5% to 11.5% allowed range.

Okay. And on the SEC process, maybe you could just make sure we understand the way the private filings work. So you file it, we don't know when you filed it, we don't know when it will come out. But once it comes out publicly, that's a fully amended ready to go S-1? So we could see kind of the end game?

No, we've said that we filed on -- the confidential version on April 4. So now we're in the review process. Obviously, it depends upon the degree of the SEC's review and the comments that come from that and our responses to that, so it's a variable time. But at some point, we will be -- we hope through with that process and then the filing will become public.

But it is the only public once we're at a final version that will actually be used on the transaction or --

Steve, this is Jim. If it does become public ultimately and market conditions are there and we move forward, all versions of -- the first S-1 that we filed and then the final S-1 that gets filed will all be available and public, so everything will be available.

And we'll take our next question from Michael Lapides from Goldman Sachs.

First on FPL, just want to make sure I understand on the regulatory ROE. You're basically assuming that you're not going to take any during the course of 2014 because what you took in the first quarter you'll just reverse out gradually during the rest of the year?

That's correct, broadly speaking. Depends what the summer weather is.

Totally understood. Second, what's your latest thought about timing of next rate case?

Well, first of all, just to remind everybody, the current rate agreement goes through the end of 2016. Clearly, we are aiming strategically to put ourselves in a position for whatever comes beyond that, whether it's a formal rate case or whether it's another rate agreement to continue to track record of delivering value to the customers. In that vein, I would simply blend out that project momentum is a very important part of our ability to be in a good position come the end of '16 to continue to offer both customers and shareholders a very attractive value proposition. Beyond that, it's still only the early part of 2014.

Understood. I was just trying to think of the longer-term scenario of -- do you have to file or can you, if you manage your costs really well and you get a little bit of demand recovery, can you stay out of potential rate proceeding for beyond 2016 or so?

Yes, I think it's premature to speculate on the specifics of that, but certainly we are doing everything we can to put ourselves in a position to go for as long as we can without filing a rate case.

Got it, understood. And finally on the near side, again, I want to make sure, can you walk through just the amount of the megawatts of U.S. wind and U.S. solar, you expect to come online? Meaning not the stuff that's already online or COD, but that you expect to come online in both 2014 and '15. You made some comments in the prepared remarks about specific amounts in 2014. I just want to make sure we're understanding what's coming when.

Okay. At the risk of -- well, in order not to confuse you, I'm going to point you to Slide 11. I think that has the basic information, as well as Slide 25 has the details of individual projects that go into each of the buckets in Slide 11, so I think the information is there.

And we'll go now to Angie Storozynski from Macquarie.

So I wanted to actually follow-up on the regulatory plans for FPL and from 2 aspects. One is recent polls in Florida are suggesting that the former Governor, John Kristoff, is -- could be coming back, and how should we think about it of its potential impact on your regulatory affairs in Florida? Secondly on FPL, could you give us an update on the upgrades to your gas peakers? And thirdly, are you seeing any increased interest in potentially contracting new renewable projects from regulated utilities as they anticipate the new carbon emission rule from the EPA?

Angie, on the first, I would just say that we have operated very effectively through many different political and regulatory environments, and we are simply focused on doing the best job we can to deliver value for our customers. We think that's the best strategy for putting ourselves in the best position in the regulatory environment. On the peakers, we're in the midst of an in the field testing program where we are monitoring the actual emissions. We don't know exactly how that -- how long that will take, but should certainly be completed by the end of the summer. Based on that, we will then have a better sense of how we move forward. I think it's likely to be something along the same lines as we had outlined before, although it may not require as much capital as we had originally anticipated. And I would think that we would still be looking at the bulk of that activity being in the 2016 time frame. On the -- you're going to have to remind me what your third question was.

Yes, I was asking about utilities being more receptible to or willing to sign PPAs for renewable project in anticipation of the carbon rule from the EPA, basically attempting to offset the carbon emissions with some more renewables and the -- either in their portfolio or under PPAs?

Okay. I understand. Yes, I haven't heard of that being a motivator. I think the motivations are otherwise. But, Armando, you want to comment?

Yes, let me give just a brief update of wind development. Moray mentioned this before. Clearly with the PTC extension out there and discussion on the PTC, there's a bit of uncertainty with customers, whether they're going to sign PPA contracts in 2015 or try to push it out. But I think that uncertainty will be cleared up really by the end of the year when we understand what's going on, on that front. We have a very large and active pipeline, potential opportunities at this point. We've talked about that pipeline before over the last year, both in the U.S. and Canada. And a fair number of the PPAs that we've actually signed in the last 18 to 24 months have actually not been driven by renewable portfolio standards in the states, have not been driven by EPA concerns, have actually been driven just by the pure economics of the long-term wind contracts. I think it's still a bit early to understand what some of the EPA rules might mean for us and beyond 2015, but it certainly can't be a negative, and I would expect it to be a positive. And, I guess, the last comment I would make is because we are getting towards the end of the PTC extension, which because of IRS guidelines essentially expires at the end of 2015, there are several acquisition opportunities in the market that we and others are looking at.

And we will take our last question today from Jonathan Arnold from Deutsche Bank.

You sent an update on your latest thoughts on the plans around potential utility investment in the upstream nat gas business, anything you can share on that?

Not a lot new that we can share at the moment. Just to remind folks, we continue to pursue the potential opportunity to help the FPL customer by reducing the potential volatility of the fuel component of the bill and possibly lower its average cost over time by investing directly in gas reserves. We need to find the right set of deals that will make that a reality. We are in the midst of pursuing that, and I would certainly hope we will be in a position to come forward with something specific within the next 12 months. But that's -- I've said that before, there's really nothing new there.

So we shouldn't be necessarily expecting sort of first, sort of trial in this calendar year, it's more of 12 month?

Yes, not necessarily.

It could be as soon as this year, Moray?

It could be as soon as this year, but we'll have to see. The only other thing to say is that anything we do to start with will be fairly small, it won't have a huge impact. Obviously, we want to establish a framework and show that these kinds of things can be a good deal before we start to scale up.

Ladies and gentlemen, this does conclude today's conference, and we thank you for your participation.