Good day, everyone and welcome to the NextEra Energy and NextEra Energy Partners Conference Call. Today's conference is being recorded. At this time, for opening remarks, I would like to turn the call over to Mr. [Indiscernible]. Please go ahead, sir.

Thank you, Jane. Good morning, everyone and thank you for joining our first quarter 2017 combined earnings conference call for NextEra Energy and NextEra Energy Partners. With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy; John Ketchum, Executive Vice President and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Eric Silagy, President and Chief Executive Officer of Florida Power & Light Company. John will provide an overview of our results and 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, in 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 on our websites, nexteraenergy.com and nexteraenergypartners.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of certain non-GAAP measures to the closest GAAP financial measure. With that, I will turn the call over to John.

Thank you, Matt, and good morning, everyone. NextEra Energy and NextEra Energy Partners delivered solid first quarter results and are off to a strong start towards meeting their respective objectives for the year. NextEra Energy’s first-quarter adjusted earnings per share increased 10.1% against the prior year comparable quarter, reflecting strong performance at both Florida Power & Light and Energy Resources. Over the same period, NextEra Energy Partners grew per unit distributions by roughly 15% versus the prior year comparable period. Adding to the solid run rate with which NEP entered the year, we are pleased to announce the acquisition of an additional asset from Energy Resources, which I will discuss in more detail later in the call. At FPL, earnings per share increased $0.10 from the prior year comparable quarter. Continued investment in the business was the primary driver of growth as regulatory capital employed grew 9.7% year-over-year. With residential build significantly lower than the national and Florida averages, FPL’s focus continues to be on finding smart investments to lower costs, improve reliability and provide clean energy solutions for the benefit of our customers. In addition to the approximately 1750 MW Okeechobee Clean Energy Center, which remains on track and under budget FPL continues to make excellent progress towards its recently announced solar development initiatives. Earlier this month, we filed FPL’s ten-year with the Public Service Commission and announced that we expect to add a total of nearly 2100 MW for solar across Florida over the next several years. We have already secured sites that will potentially support more than 3 GW of FPL’s continued solar growth. We also remain excited about our 50 MW battery storage pilot program that was approved as part of the 2016 base rate settlement agreement, which is expected to complement our solar development efforts.…

[Operator Instructions] And we'll go first to Stephen Byrd with Morgan Stanley.

Hi, good morning and congratulations on good results.

Thank you, Stephen.

I wanted to explore the notion for rehearing in Texas and I wondered if you could just speak to what the process might look like and then I guess at the core of it, what I'm thinking about are the conditions that were set out it seem very challenging and probably really don’t set a good press in for our industry. How could those potentially be addressed through this process?

Steve, I might differ that question to Jim.

So, Steve, just from a process standpoints and I'll get the days pretty close, I think we have 25 days from when the final order went out to file through rehearing the commission then have 30 days to roll on that. They can extend it for a bit should they choose to. And so, that's the kind of process that you're looking at in terms of timing. I think in terms of, obviously we were disappointed in the decision we think we would be a terrific owner of Oncor for the state and for its customers. I think we would add enormous value to customers in Texas from how we would operate the utility. So, in terms of anything else, I think I guess the other two things I would say is obviously we can't pay $18.7 billion for utility that we can't run. And we can't control the board and we can't have access to dividends. And it's just bad business to do anything other than that. And so, you can expect that we will not be accepting any conditions that would not allow us to point the majority of the board or have access to the dividends. I mean, that's just we've been very clear about that from the beginning on this transaction and we continue to be very clear on it. And so, we remain very committed to trying to get it done and as I said we'll be filing for a rehearing here shortly.

Understood. And then if I could shift gears over to wind, we're certainly really encouraged by wind economic improvements. Just looking out a bit further than maybe we typically do. When you think about the changes to wind turbine technology the next generation of blades and turbines, what's the approximate timing for the next generation and how should we think about potential step changes and improvements even further in terms of wind economics and what does to your addressable market?

Yes. I think from a wind step change standpoint, we had commented on the last call that we expect wind to be about a $0.02 to a $0.03 product without tax credits, early in the next decade. And we get comfortable with that largely because of the step change and the improved economics that we see with wind turbines. First of all, we're expecting even a taller tower design, wider rotor diameters, towers getting to about 90 meters, rotors up close to a 130 meters which could drive the NCF to right around 60%. You combine now with what we expect to be continued progressive reductions and turbine equipment pricing, which we think we'll get even more aggressive as the PTC phase is down. That's how we really get comfortable with that market. And then when you think about the production tax credit, actually facing down right around 2023, we continue to be optimistic about what we see on batteries. We have 20 people dedicated to our battery development effort, we're investing upwards of a $100 million a year in batteries, we're excited about the 50MV battery storage pilot program that FPL has. But imagine the game changer that that would be for renewables, not only wind, that blows predominantly during the in the peak shaving economic opportunities around solar. That could really also help to substantially drive renewable economics. Granted battery still have a long way to go, they're still expensive, still inefficient, but with all the investment from the automotive industry, the focus that you're seeing from our sector, we obviously want to be a leader. The Chinese have announced that they plan to take a major role in battery manufacturing which is one of the factors that really help to drive down the cost curve on PV panels. Those are all things that really make us very optimistic about the prospects for renewables development as we head into the next decade.

That's great color. Thank you, very much.

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

Yes, hi. Two questions. First, I guess this was for Jim. Obviously you are pursuing we're hearing on Oncor, but assuming that that doesn't work out and you're kind of in the standalone case which it sounds like you're thinking you could hit the upper end of your growth rate. Kind of how important is looking at other M&A in the future. I have some investors who say you strategically you guys need to do a deal, could you just kind of give your view on that?

Sure, Steve. So, I think John said on the call, excluding Oncor, we'd be disappointed if we didn’t earn at the top end of the 6% to 8% range through 2020 from an EPS standpoint. And we're very comfortable with that, we're very comfortable with our organic growth prospects. We do not have to do anything. I love our standalone prospects, I love our two businesses, they have tremendous opportunity to deliver growth for shareholders and also tremendous opportunity to do good things for customers. And so, I love our two businesses on a standalone basis. M&A is hard. I think we've seen in the last month in our industry how hard it is and any -- our perspective of M&A really hasn’t changed for a very long time, which is it's that anything that we would do if we were to do something would have to be really compelling for shareholders. As I said, it's very hard to do. And we're all as always we're going to stay disciplined and let me just reinforce again, we don’t have to do anything on the M&A front because we really do love our standalone organic growth prospects.

Okay, good. And then on the just a question on renewables. So, if you look at the your '17 to '18 development targets, you still have a decent amount to fill in to get to your kind of current expectations. Could you just give color how you're feeling about getting to that?

Hi Steve, I'm Armando. We feel good or we would have obviously changed the numbers. There is I think we said at the last call that there was a lot of activity really through the four years for wind from '17 through '20 and honestly there is a lot of activity in the market right now for solar from '18 to '21. So, we continue to see folks that are interested and bring in renewables and in '18, even if the price maybe a little bit higher for them, they understand that but for their own reasons, whether its commercial and industrial folks that have something internally to get done or whether its folks on the utility broadly define the utility space that have made commitments to regulate us or others, they're interested in '18. So, I don’t know ultimately how it will work out, but we looked at it again this quarter based on the activity that we have in-house and what we know is coming down the pipe. We continue to feel comfortable with the range.

Great, thank you.

Thank you.

And we'll take our next question from Greg Gordon with Evercore ISI.

Thank you, good morning.

Good morning, Greg.

Turning to the utility business. When you talk about the 8% growth rate and using this as sort of the settlement agreement as a benchmark, what's in the capital plan today and what's not. Refresh my memory but I believe and that was approved by the commission allowed up to 300MV a year of solar. But it sounds like you're opportunity set it a lot higher than that. So, what is what are you planning on doing and then some of the new initiatives you've announced like the proposal to knock down and rebuild that gas plants. Can you just give us what's in the baseline and what the opportunity set is?

Yes, I mean, sure. One is the transmission and distribution, continued storm hardening, the automation effort that we have there. We have the Oak Ridge OB clean energy center opportunity as well. We have the 1200MV of solar or the extra 900MV in a minute that are part of the SoBRA adjustment. We have the 50MV in our battery storage. Opportunity although would have to recover in rates during the next rate case on that. We still have combustion parts improvements that we continue to make to the existing facilities, continue to complete the peak or upgrades that we have talked about previously. And then we have all the opportunities that we laid out in the 10 year side plan which are incremental. First of all, the additional 900MV of solar which we have secured better than 3 gigawatts of sides in Florida for that we like to be able to execute on over the next several years. Obviously, we are in a good position with our surplus amortization balance, and then the Lauderdale opportunity that we announced as well, which would be more of a 20, 22, I think COD that we would pursue there. And then obviously the St. Johns opportunity that I mentioned earlier, we continue to find smart investment opportunities to clean up the emissions profile in Florida and continue to make NextEra Energy and FPL one of the cleanest emission generators of all top 50 power producers in the country. And we'll continue to try to identify further opportunities going forward. But those are the things that really drive that 8% regulatory capital employed growth.

Forgive me for following-on up on the solar. If you chose to go ahead and because you have the opportunity and the sites to go build more than what is in the current segment plan. What's the recovery mechanism for that?

So, Greg, this is Eric Silagy. So, outside of the rate agreement, if we went ahead and did solar, then we would seek to recover that during the next grade preceding. That would be the mechanism that we would do that. So, we are looking at opportunities and identifying sites. And we'll determine whether or not we want to do that before we go to the next rate preceding or afterwards.

Okay.

And hey Greg, this is Jim. Just one last thing on that. We are going to, you could expect that in the June Investor Conference that we will lay that out with some details, yes.

Okay, thanks a lot. Two more quick ones. Just to be clear on when you say you're going to settle the forward sale, I mean you're not issuing the equity?

That is correct.

Okay. And then the numbers were great in the quarter, but you had that $0.11 headwind from upstream gas and you described very clearly why. When I look in the appendix of your release and I looked at the expected EBITDA PTC contribution from upstream and midstream which is 190, the 290 and 95 to 195. Those that guidance is a function of your expectation that you were going to behave this way with regard to those investments, or should we expect that low end or below the low end?

Yes. Remember Greg, we didn’t add any new projects that really impacted Q1 performance because of economics but we continue to through our development efforts look for further upstream opportunities that would satisfy that forecast that we have outlined in our materials.

Okay, great. Thanks, guys.

And we'll take our next question from Paul Ridzon with KeyBanc.

Good morning. Congratulations on the quarter.

Thanks, Paul. Good morning.

As you look at investment opportunity, you really keeping your own roots across the energy platform. Would you ever look at an LDC?

Well, a couple of things I'll say about LDC is 1) Is they tend to go up at very high premiums, just hard to make the economics fork on an LDC and then you got to get comfortable with the liability profile associate with an LDC as well.

Thank you. And --.

They tend to be expensive and we're only interested in doing transactions that create a long term shareholder value.

But on your repowering, is the entire capital program capture 100% of the PTC or I think those pace down to 80?

I'm sorry, could you repeat the question?

Your capital program fully powering the winter then? Where all those projects did a 100% of the PTC or is the timing?

Yes. They all get a 100% of the production tax, right, that's correct. The test of the 80, it's an 80-20 test in terms of determining whether or not it's a new turbine to get a 100% of the PTC.

Is that M&A, private rating agencies comfortable enough with the contractiveness of energy resources that it's utility like enough that you don’t need to do any entry down to portfolio?

Yes. We just to be clear, we do not need to do an acquisition to meet the growth prospects and maintain the credit ratings that awe have through our guidance period. Yes.

Just to be very clear, we will have very strong credit matrix in 2020 even with the growth that we expect out of both FPL and energy resources through 2020.

Great, thank you.

No need to do M&A to rebalance the balance sheet. And I know there's been a lot of investor questions about that. Just to put that to bed, hopefully once and for all.

Very helpful, thank you.

And we'll take our next question from Jerimiah Booream with UBS.

Hi, good morning. I just wanted to touch on the economics of build on transfer and development rights on the wind side. Obviously you've had a couple of big announcements recently. How does that flow through the income statement and really what's the kind of near term earnings incremental opportunity that we should think about there?

Yes. I mean, there is two impacts, there is book and cash. We talked a little bit about cash impacts on the call. We said out of these opportunities, they think about them in two ways, one are development right sales which we put the NPV on a kilowatt basis when you compare to a long term contracted new build at about 20% to 25% and then a build on transfer, you get data and an after-tax NPV kilowatt basis, it's probably about 40% to 50% of the NPV of a long term contracted basis. So, that's cash. On the book side, obviously you're going to generate again off those sales in those gains with we don’t think the material and would be reflected in our income statement.

Okay. And then also just more specifically on the commercial industrial opportunity. I mean, how many of the PPAs that you're signing are really more focused on the CNI sphere going forward versus traditional PPAs?

It's Armando. Just let me go back to the previous question just a second and I'll get to that one too. So, I just want to put it in context. We haven’t updated numbers on our pipeline for wind and solar in a while. And I just want everybody to understand we got a lot of development out there. And when we talked a couple of years ago about how we would potentially doubling the amount of G&A that we put into both the wind and the solar business through 2018 and we're doing that. So, today just in terms of what I call inventory, we've got 10 gigawatts to 12 gigawatts of inventory on its way to 20 gigawatts here in the near future on wind. And we've got about 10 gigawatts of solar that's on its way to 20 here in the near future. So, we got a lot of opportunities out there for projects. So, if once in a while someone's interested in doing some development and it makes sense for us then we've got the inventory to be able to do that. On the CNI side. CNI gets a lot of press and so on. It's still not a giant portion of the market. It's a market that we've looked at, it's a market we played in, it's a market that we've originated. It is a market that we will probably do more of than we've done in the past in certain regions. But it's also a market that doesn't make sense for us in certain regions where folks are looking for very short term contracts in places where we've got to take a significant amount of merchant risk in the term year. So, my expectation is it could be 20% of what we do on a go-forward basis but I think the traditional stuff that we've been doing with the IOU, the muni, the COOPs and so on will continue to be the bulk of that business for us.

Okay that's great. And then just one last one from me. On the legislation in Florida right now on gas reserves, can you just talk about any kind of stumbling blocks there and what -- any kind of material changes would be versus the previous program?

Yes, this is Eric. So, it's we're right now in the midst of the legislative session. And so, there are a number of hurdles for that legislation to clear. And so, it's by no means certain that gas reserves legislation would actually clear both houses. So, at this point I think it's just speculative to try to predict what's going to happen because there's a lot of areas that we need to cover lot of water and is be covered within legislative process at this point.

Okay, fair enough. Thanks, guys.

We'll take our next question from Jonathan Arnold with Deutsche Bank.

Hi, good morning guys.

Hi, Jonathan.

This one is to make we together a couple of the names you've already talked about. So, the Xcel model of BOT and some development sales is, do you see the utility market shifting in that direction and this might well was that kind of a one off as you're looking at go forward?

No, we do not see the market shifting in that direction. And I think that's the point Armando was making just a minute ago. I mean, we continue to see a very strong long term contracted market made up of our typical customers whether its muni's and COOP, CNI. Most investor owned utilities, it is with the build on transfer like we're able to do with Xcel or you could see an opportunity to generate an attractive NPV off of a sale and yet get contracts back from customer who's been a one year largest customers. Those can be attractive situations. But our core business is going to continue to be the long term contracted business. So, when we look out and we'll lay this out at the June Investor Conference. We really see the market continuing the stay at the levels that's been in the past on the long terms contracted opportunity set aside.

So, your preference is more to stay in that space. I was just curious whether there was sort of a balance sheet angle that with these changing NPV but you have less on sheet tied up, so maybe that would reduce some of the rationale around the Oncor transaction where you certainly portrayed it at the time, is something that will give you the ability that will max your development activities.

Jonathan. That market and I know it's got a lot of play here recently. But that rate based market, if you go back historically, year-in year-out, I mean, people have been building rate base on the wind side for the last decade. And it's averaged about 15% of the market. Could it go up a little bit, yes, maybe it'll go up a little bit. But it's a small portion of the overall market. And so, we don’t although there were some transactions here recently, at least our view right now is then even if it goes up a little bit, it's just not a significant part of the market and if there are people that are interested and we can help them help us with our inventory, then we might look at the transaction. Why not. John mentioned some economics that are attractive. But I wouldn’t spend honestly that much time thinking about whether would happen during the last three months is turn the market around. The rate base market is just not that large.

Okay. Then I just want to clarify one thing, you talked about a 1000MV transaction at the beginning. I wasn’t sure that was something a new one that hasn’t yet been announced or why you're referring to the Xcel deal?

Yes. No, the 1000MV is with is the large customer transaction. We just had not previously announced it, the customer had made announcements about the deal.

Okay. But we're talking about the one deal, basically this one.

One deal, that's correct. One deal.

Alright, thank you.

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

Yes guys, just curious, Project Accelerate. Is there any way to quantify what whether the EBITDA or EPS benefits from it would be and which of the businesses kind of more or less impacted by it?

Yes. I mean, first of all Project Accelerate is an initiative that we've seen on last call, in this will generate several $100 million in run rate savings going forward. We will give more details on it at the June Investor Conference, but it effects all of our businesses. I mean, we are reimagining and all the business at NextEra Energy resources at FPL finding smarter ways to leverage technology and other way other approaches to each of our individual lines. And we will lay that out including EPS impacts from that at the Investor Conference.

But when you say several $100 million, meaning on a pretax income run rate eventually or on a discounted cash flow type of view?

Yes, on a pretax run rate basis going forward.

Got it. I mean, that's pretty material on an after-tax basis that would be a pretty material driver of an EPS uptick over time.

Yes. But remember that Project Accelerate is included in the expectations that we provided.

Got it, okay.

And the other thing Michael, to remember is FPLs roughly 2/3rds of the company and you cannot take the several 100 million -- that 2/3rds of that run rate creates surplus, it doesn't create earnings, okay.

Understood.

And there's got to be very careful about how you think about it from an earning standpoint.

Understood. That benefit over time would actually accrue to the customer once you hit the 11/5/11/6 range. Unrelated question. Just curious Jim or Armando for your thoughts on the prospects in the economics of offshore wind in the US?

So, Michael we have looked at offshore winds, we spent -- I personally spent an enormous amount of time looking at it for a very good customer of ours back when I was running energy resources. And we came away from that effort not being a big fan of offshore wind for several reasons. One is it effectively from a construction standpoint, very hard to get comfortable that you can ever. It strikes me more is a new nuclear than it does of onshore wind in terms of the construction risk you take. It's marine construction, the ONM associated with it is challenged if the seas are high, you can't you have to fly out to fix the turbines as opposed to get in the boat and go up there to do it. There is an enormous number of hurdles that you need to get to. And then you get to the biggest hurdle which is just its bad economics for customers. I mean, we've been very proud that we've done good economic renewables for customers and we think onshore wind and onshore solar and frankly solar in New England will be probably a third of the cost of offshore wind. It is really not good for customers to be doing offshore winds relative to onshore solar or onshore wind. So, to say that we're not fans would be an understatement and I don’t think it's good for customers and frankly I think it's I think it's we certainly wouldn’t do it, we think it's too risky.

Got it. Thank you, Jim. Much appreciate it, guys.

And ladies and gentlemen, that will conclude today's conference. We thank you for your participation. You may now disconnect.