Good day, everyone, and welcome to the NextEra Energy Third Quarter 2013 Earnings Conference Call. Today's conference is being recorded. And at this time, for opening remarks and introductions, I would like to turn the call over to Julie Holmes, Director of Investor Relations.

Thank you, Lisa. Good morning, everyone, and thank you for joining our third quarter 2013 earnings conference call. Joining us this morning are Jim Robo, NextEra Energy President and Chief Executive Officer; Moray Dewhurst, Vice Chairman and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Eric Silangy, President of Florida Power & Light. Moray will provide an overview of our results during the quarter and our executive team will then be available to answer your questions. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that 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 in the Investor Relations section of our website, nexteraenergy.com. We do not undertake any duty to update any forward-looking statements. Please also note that today's presentation includes references to adjusted earnings, which are non-GAAP financial measures. You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the non-GAAP measure to the closest GAAP financial measure. With that, I will turn the call over to Moray.

Thank you, Julie, good morning, everyone. NextEra Energy delivered a strong third quarter results and continued to make progress on the initiatives laid out in the March investor conference. Our earnings growth in the quarter was driven primarily by continued investment at FPL and the addition of new contracted renewables projects at Energy Resources. With 3 quarters of good performance behind us, we are well-positioned to close up a year above the midpoint of the range of adjusted EPS expectations that we shared with you in January subject to our usual caveats. At the same time, we continued to execute on our existing backlog of development and construction projects and we have made further progress in firming up some of our incremental investment opportunities. At FPL, net income growth was driven by investment in projects that are designed to further improve an already strong customer value proposition. We remain very focused on execution and all of our major capital projects are on track with the Riviera Beach and Port Everglades modernizations, both running on time and on budget. We have filed for the necessary regulatory approvals for the new gas pipeline and the peaker upgrade project and we have made good progress in defining apart towards our goal of keeping nonfuel O&M to roughly flat in nominal terms through the period of the current rate agreement. At Energy Resources, adjusted earnings growth was driven primarily by new investment in our contracted renewables project. In the third quarter, we brought into service roughly 125 megawatts of wind in Canada but is contracted under the Ontario feed-in tariff program. We continue to execute on our backlog of approximately 800 megawatts of contracted U.S. solar projects, of which about 300 megawatts are expected into come into service in 2013, with the balance expected…

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

So first, just to elaborate a little bit further on yield co. and I'm sure further questions will go. Could you talk a little bit more specifically, of those operating assets, how you're thinking about the 1.5 to 2 gigs? What are those assets, if you could at least talk broadly? And then secondly, with respect to the development pipeline, are those assets that have tax attributes today or are you thinking about when you say development, those that are rolling off tax attributes?

Let me take the development side first. As you would expect, that is all renewable, because that's where our development efforts have been concentrated for some time. And a mixture of wind and solar, but excluding wind projects that would be PTC projects for reasons that we discussed before. Of the base, existing operating projects, it would be a mix of projects, heavily renewable, potentially some of our contracted fossil assets as well and the renewables being a mix of wind and solar, wind that has either completed its PTC period or on which we didn't take PTCs.

And then maybe just more broadly here, if you will. What's the timing on making a decision. I don't want to put you in a back in a lock or anything, but just broadly speaking, what are you waiting for, perhaps the better way to ask it?

I guess the first 1 I can respond to that is we're waiting for our own analyses to be -- to reach a crystallization point. I would say at this stage, each round of review that the senior team has done has enlightened us further, but it also raises more question. So there'll be a series of rounds of those and until we're comfortable with what they've got all issues addressed, we don't feel any compulsion to take pressure to make a decision one way or the other. I think we talked that on the last call, we certainly talk to the conferences about some of the issues that we have. So I'm not going to reiterate those things. But until we're really comfortable that we've got all the pieces buttoned down, as I've said, we don't feel any compulsion to make a decision one way or the other.

And then lastly if you will; obviously got some IRS guidance in the quarter, can you speak to how much wind you expect to have in the pipeline or qualifying for the PTC by year-end and how this sort of evolved -- how are the IRS guidance and pushing it into '15 has evolved taking it into the pipeline opportunity of the wind?

It's a good question. I think the short answer is no, I can't. Because it's still fairly recent and it has had impact already on the market. So as we discussed before, customers react to their expectations about the PTC program just as we do. So I think we're now going through sort of another round of jointly with customers and potential customers are trying to figure out how much more that may add. So the plus side is, the fundamentally good aspect is that I think it provides more opportunities. There is a little bit of a short-term negative because it takes some of the pressure off individual situations. So I think -- we should be in a better position to give you some thinking about that, probably at the next call. But right now, we're just not far off alone.

Our next question comes from Paul Ridzon from KeyBanc.

Are you looking specifically at yield co., are you looking at the general idea of an alternative structure?

We are looking at the general idea of an alternative structure, but with a definite focus on trying to create a structure that's appealing to yield oriented investors with a strong interest in renewables, is probably the best way to put it. So as we discussed on the last call, we're looking at both, what I'll call the public yield co. vehicle, which there are some examples out there, as well as potential into private alternatives, private analogues, if you like.

I guess yield co. is kind of a vague term. Okay. And then why are you not carving out Project Momentum implementation costs from your adjusted earnings?

I guess we could have, I mean our feeling is they are part of our operating results, but we wanted to call them out so you can make whatever adjustments for your modeling purposes that you should choose.

And when do you expect that $200 million to $250 million to start hitting impact statement -- hitting the income statement?

We're already seeing some benefits this year. We'll see a lot more next year. I think the best way to think about that is an annualized run rate by 2016. So by the time we get to 2016, we should have a full value of that flowing through.

And could you just describe, is this headcount, is this process, is it all of the above?

It is all of the above. We undertook a process that generated something like 9,000 individual ideas that various teams worked through and analyzed. And in the end, we have about 1,000 individual ideas that we're now pursuing, so they range over the map in every department or every part of the company was involved. So it's just a little bit of everything. Certainly, there are some headcount implications and the transition cost largely driven by those headcount implications, but there's a lot of changes to the way we conduct work that will allow us to see benefits over time.

In your resources waterfall chart, you usually have existing assets kind of broken out, I guess that didn't change. But you had a pretty [indiscernible] tough wind headwind. What does that do to earnings?

Yes. I mean, there were lots -- as you might expect, within that broad category, there were lots of ups and downs. The wind for the existing assets was actually a bit better than last year, the wind resource is about the same. We've got a little more output out of the projects. So it's just a whole series of pluses and minuses, but net the existing assets to be about the same.

Our next question comes from Paul Patterson with Glenrock Associates.

Just a sort of follow-up on the equity needs and the potential for yield co., could one assume that the equity needs would be somewhat satisfied by yield co.?

In theory, I think that's possible. In practice, I don't think it's that likely. I think the yield co. alternative needs to be thought of as sort of a restructuring of where we -- the basic financial structure. So it could be but I think, it's better to think of the equity as just separate from.

Okay. I got you. Then in terms of the equity, should we think of this as basically common or should we think of it as potentially hybrid or something else?

You should think of it as primarily, it's not 100% common. We've continued to manage with a slice of hybrids and a slice of -- let me be explicit. Hybrids for us means the deeply subordinated junior debentures. And then equity units, maybe what you're referring to when you say hybrids. But both of those have a place in the capital structure. But I think we have about the right amount of each of those right now.

Okay, great. And then back to Project Momentum, it does appear that you guys are using a more conservative approach in terms of accounting for the cost to achieve. And I was just wondering, how long would those costs to achieve, should we think is a sort of flow in terms of how they'll progress and you mentioned that the full benefit will sort of show up in 2016, but how do we think about the cost to achieve. I mean will they be sort of steadily run rate here for the next couple of years or how should we think about the cost to achieve and how they might affect your earnings going forward?

At this stage, I would expect that we will see the bulk of them this year. As we indicated in the prepared remarks, we've got maybe $0.10 for this year. There probably will be some in 2014, don't know how much at this stage, but not likely as much as $0.10. And then '15 and beyond, I would be surprised if we have more than a few pennies.

Okay great. And then just finally on the sales growth, you did mention that there was a little anomalies here with in terms of usage, at least of change. And we are seeing, as you know, around the country, sort of more significant pullbacks in usage -- weather normalized usage. Any sense -- I mean you did mention in the prepared remarks and everything, but any sense as to -- anything or any more color that you can give with respect to what you're seeing so far?

Well, if it's anything, I think it's most likely to have to do with general economic conditions. We don't see any signs that this is driven by what I'll call incremental efficiencies. So we bake into our expectations about a percentage point decline every year as new efficiency standards kind of roll through the capital stock. So it's hard to see that this recent phenomenon would represent any sharp change in and efficiency. So I think it's much more likely -- if it is real, to be just due to economics. So I think, the main thing there is -- that we know that several of the indicators at the general economic level seem to be kind of taking a pause and then we also see that same phenomenon in our usage. So we're just a little more cautious that we may be not slowing down, but the rate of growth may be coming down a bit.

Our next question comes from Greg Gordon with ISI Group.

Thanks for the incremental disclosure, very helpful. When we think about how you've contextualized the percent or the portion of your nonutility business that could potentially be eligible for the yield co. structure, how we translate that into the percentage over the $1.2 billion to $1.4 billion of distributable cash you're showing on line 13 comes from those eligible projects?

I think the short answer is, you can't right now because we haven't made the connection between those 2 because frankly, they've been independent streams of activities. So stay tuned on that.

Okay. And then obviously, we also have to figure out or you have to figure out how much debt goes with that to get to a bottom line yield, distributable cash number, how much is amortizing? Those are all the sort of pieces that we have to figure out, right?

Absolutely. The modeling of what it would look like has to take into account all of those things. The other thing to be noted there is just to reiterate our commitment to the strong credit position. We would have to make sure that were we to move forward with a yield co. structure, that we adjust back-up at the corporate level to make sure that we retain the appropriate financial mix and credit metrics that we're targeting there. So that's an extra layer of complexity. It's not just which assets would move down and what's the debt associated with them. But it's also the ripple effect back to the parent company to make sure that you've got everything balanced back there.

Otherwise, said in plain English, you just can't push a lot of assets down without also pushing the right amount of debt down so that the current credit remains strong?

Fair enough.

Is that right?

Yes, fair enough.

To circle back to Paul's question, I do think it's -- can you comment a little more on what type of metrics you use to measure customer -- underlying customer demand, as it pertains to the weather versus energy efficiency and things because in other regions like, for instance, Arizona, which is also a state recovering from a housing bust, they also saw a big pullback in what they consider to be normalized -- weather normalized demand, very similar to what you're talking about. Can talk about the type of metrics you use to try to get at that and how confident you are that they sort of capture that or what they might be missing?

Well, I'll do my best. I think the real challenge here is that we don't have any metrics that we can really look at on a short-term basis that drill in on this problem. And that's one of the reasons why we many times said in the past that any one quarter, we should expect to see weather adjusted usage per customer move around quite a bit. So even in a period, now going back several years, when on average, underlying usage was growing at about 1 percentage point per year. We would still see individual quarters where it didn't grow at all and other quarters where it grew at 1.5% or 2%. So those sort of quarter-to-quarter things, very hard for us to sort out. So to the core of the question, longer-term, you can look at -- the basic thing you have is the uses usage pattern by segments of customers. And so part of what's going on here is the customer mix is changing and the usage patterns of the customers within the different segments in that mix, also appear to be changing a little bit. In short, we have seen over the last few years much stronger recovery in residential piece and in the small end of the commercial segment and much weaker recovery, if any, in the large commercial piece. So we're really, in terms of metrics, we actually look more to the trends at the segment level.

Our next question comes from Stephen Byrd with Morgan Stanley.

As you look out in the last quarter in terms of developments on yield co., I wonder if you could just talk at a high level as you think about the cost to capital of these approaches to investors that are seeking cash flow. Not in detail, but just holistically as you think about cost to capital, right investor base, et cetera, just how you think about that relative to within NextEra?

Sure. I'll take a crack at that. I think I'm going end-up repeating things that we probably said on the last call, I said at one of the conferences. To me, this is a question about whether there is a segment of investors who simply value a cash flow stream with particular characteristics differently from the way that the rest of the investor base does. And here, in particular, we're talking about a cash flow stream that has high current income, relatively stable, but also with strong and visible growth. I think if you look at the yield co. structures that have been introduced so far, that element of significant predictable growth has been an important distinguisher of how they trade. So to me, that indicates that to the extent there is a discrete investor segment here it's 1 that both likes the solidity of current income, but also is willing to pay for visibility into a meaningful growth pattern. So that, I think, what you're trying to do is structure a vehicle that appeals to that particular segment and then the real core question is how big is that segment, how much more is it willing to pay for the cash flow stream than other investors and is that a transient phenomenon, or one that is going to be around for a while? So that's kind of the framework that we think about, I'm sure Jim and others have slightly different versions, but that's how I think about it.

That's helpful. And within the approach to yield co., one thing that investors sometimes think about is the economic participation of the parent, that is incentive payments back to the parent as return levels are reached. I know it's a little bit more specific, but I know that goal is obviously always to maximize the value of NextEra to shareholders. As you all think about potential participation of the parents in returns at whatever yield co. could be contemplated, is that something that you are generally or positively disposed towards because you want that -- the parent growth and parent participation?

Byrd, it's certainly yet another of the things which we have to consider. I guess the main point I will make there is it does seem to be important that you -- to the extent you can, you create alignment of interests between the 2 sets of investors and one of our concerns is not getting a situation where the interests are divergent. And in that sense, the kind of incentive structures that you're talking about, I think, can play an important role if they are designed correctly. But if it's an important aspect, the specifics of how they're designed are important. But I see them as mostly about aligning interest.

Our next question comes from Michael Lapides with Goldman Sachs.

A couple of items. One on the O&M cost reduction, the $200 million to $250 million. Is that incremental -- I assume that's the main driver for keeping nominal O&M flat and that there couldn't be kind of a potential down -- actual downward trajectory in O&M being driven off of that?

A couple of comments on that. On a number of occasions, I think at one of the conferences in September, I kind of tried to frame it on the FPL side by saying that last year, we had about $1.5 billion of non-fuel O&M. If you just extrapolated at a traditional 2.5% a year growth rate, what we have been running in the last few years, out to 2016, you would've found that to attain the goal of keeping nominal O&M flat, that would've translated to about $150 million a year run rate reduction. And so that's kind of the scope of the challenge. Now the $200 million to $250 million obviously includes Energy Resources and other parts of the business. But it's why we feel pretty comfortable that we have line of sight on the actions that will be necessary to give us a decent shot at that goal of keeping that O&M flat in nominal terms. Now indirect answer to your question, we certainly haven't -- we're not saying this is all that there is going to be. In fact, one of the important things coming out of Project Momentum is a commitment on going further searches for improvement. So this is where we are today. We've got a lot of work to do to make sure we deliver on that. But we're certainly not going to treat that as that's the only thing that it could possibly be.

Got it. And 1 or 2 other questions unrelated on the O&M side. When you commented on the 5% to 7% long-term EPS growth, are you now including items like the pipeline in that number or is that still outside of that number?

No. The 5% to 7% is adjusted EPS growth at the enterprise level. So it's inclusive of everything. And certainly when we share that range in the March investor conference, we discussed the pipeline as a potential project in the incremental investment category. So clearly, it was included in that and it certainly remains so.

And finally, the earnings power...

Michael, this is Jim. I just wanted to add to that. Given the combination of the progress we've made on Project Momentum along with the progress we've made in our development efforts on both sides of the business, I said this in September, I'll say it again now. I will be very disappointed if -- we have a lot of executions still left to do over the next 3 years, but I'll be very disappointed if we don't earn at the top end to that range through 2016, i.e. what I have the teams focused on is earning $6 in 2016.

Got it. And on the pipeline, just I want to think about the earnings power. Do you actually accrue AFUDC during the construction of the pipeline and then that kind of converts to cash once it comes online in late 2017?

Yes. And Michael, it's possible, in response to your first question, what you may have been thinking about is where the pipeline shows up in the segment discussion in our forward-looking statements. This does get a little bit more complicated, but everything that we discussed to date has had the potential contribution from the pipeline clustered in the FPL segment. Although we have also indicated that those are not strictly FPL assets. So that may be part of the confusion.

Our next question comes from Brian Chin with Merrill Lynch.

Are there any commitments that you can make with regards to the dividend as it relates to your decision about whether to do a yield co. or not?

Well, first of all, the answer is no. Dividend obviously is a board decision. But I'm not quite sure I'm following the interrelationship between the dividend and the yield co. in your mind.

Well, when we think about yield co. mechanism, there's significant amount of cash that does come from NextEra Energy Resources that currently helps go towards the parent that helps go towards funding a variety of different activities within the NextEra structure. In the event that you were to drop down any of those assets into a separate yield co. Mechanism, I'm just wondering whether that might have an effect on, whether you might want to think about your dividend for NextEra shares. Is there a separation of that dividend? Or is there a commitment that you can that the yield co. would not have any impact on the dividend? Just trying to get a sense of how you think about that.

Okay. I think I would have to think a little further about the question. I guess my initial reaction is at least at this stage, I don't see the yield co. necessarily leading to any fundamental change in the dividend policy, again, the dividend policy is a matter for the board to decide and any specific implementation within that policy is also a matter for the board to decide.

Our next question comes from Hugh Wynne with Sanford Bernstein. Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division: I just wanted to ask. You mentioned -- if I heard correctly, that the ability of Florida Power & Light to rely [indiscernible] ROEs through 2016 was predicated on certain assumptions regarding load growth and you gave those numbers but I'm not sure I heard them correctly, I wonder if I can ask you to repeat them and perhaps break them down into their various components.

Yes. In terms of volume growth out through the 2016 period, the average is about -- the expectations average is about 1.5% to 2%. The vast majority of which is coming from customer growth. Essentially what we do for the forecast there is take the -- I believe it's the University of Florida population projections and then factor them down to implications for customer growth. So probably 3 quarters of the growth in the base expectations is coming from customer growth, but the total volume growth expectation is about 1.5% to 2% per year. So call it 1% to 1.5% customers and maybe another 0.5% per year. And the usage side -- the usage piece, just to remind folks, is really still sort of cyclical economic recovery, i.e. getting back towards the average usage per customer level that we saw in 2007, 2008. Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division: So do you happen to have symptom to have the underlying population growth assumption and the usage assumption that go into the 1.5% to 2%?

Take the population growth of, call it 1.3%, 1.4% and maybe 1.5%, so the rest is the usage piece. Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division: Okay. So you see usage rising sort of marginally maybe a 0.25% or 0.5% per year as it reverts in your view to the 2007 levels and then the ongoing population growth. And have you told that there were reason to modify that assumption? That just strikes to me as optimistic given trends around the country and recent experience in the service territory.

A couple of comments here. First of all, baked into that usage value is, as I think I'd indicated earlier, an assumption of about a negative 1% a year impact, the ongoing effect of efficiency standards as capital stock rolls through. In terms of the other part of your question, obviously people can judge for themselves whether it's optimistic or pessimistic. It's actually pretty consistent with what we have been running for the last year and a half or so. Actually usage growth has been little stronger than that over that period. So this quarter is a little bit of a pullback from what we have seen. And that's why I was indicating earlier that we just need to have a little more time to see whether that's the start of a new trend or whether it's just a short-term blip. Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division: Great. Quickly on the yield co. NRG Energy appears to have acquired some wind and gas assets from the Edison Mission Energy portfolio to contribute to its yield co. Are those assets that you looked at, and if so, can you tell us why you decided not to pursue?

I can't comment on specific assets. All I can say is as I've said in the past that we look at a lot of different things, particularly in the renewable space.

Our next question comes from Angie Storozynski with Macquarie.

I actually hate asking questions about yield co. again, but putting it into more of a context, so you're saying that you see about 2,000 or up to 2,000 of existing assets that will qualify for a yield co. structure and about 1,200 of assets currently under development. I mean this is such a small portion of your total portfolio. I mean if this really worth pursuing a public yield co. structure given the cost associated with such a process?

Well, I think the only answer I can give you to that is we don't know. That's why we are continuing to study it. But obviously, the fact that we are continuing to study it suggests that we think it could potentially be significant. I think if you look at the potential multiple expansion on certain types of assets, depending on what you believe about how they're implicitly valued today, you can still scale that up and have a meaningful amount in terms of shareholder value creation. So certainly we're going to try and find opportunities like that but we just don't know at the moment. Jim is going to comment as well.

And Angie, I think the thing to think about is that's over a period of years that we've laid out somewhere in the order through the next 3 to 4 years. Effectively, all of our renewable assets -- contractor renewable assets, ultimately would -- you could conceptually think about being able to be in the yield co. once the project financing, the tax equity and the PTC lives rolled off. So I think it's not right to think about this being all of it, it's all of it that we can think about in the period of the next 3 to 4 years.

How about adding the gas pipeline assets to that structure, the future gas pipelines?

I don't think we really thought about that at this stage.

And that concludes the question-and-answer session. I would like to turn the conference back over to Julie Holmes for any additional or closing remarks.

Thank you for joining us and if anyone wasn't able to get through on the call, we could follow-up with you separately. Thank you.

And that concludes today's teleconference. Thank you for your participation.