Good day, everyone, and welcome to the NextEra Energy and NextEra Energy Partners' 2014 Second Quarter Earnings Conference 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, ma'am.

Thank you, Chanel. Good morning, everyone, and welcome to the second quarter 2014 combined earnings conference call for NextEra Energy and for NextEra Energy Partners. 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, 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. Moray 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 Factor 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, www.nexteraenergy.com and www.nexteraenergypartners.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 reconciliations of the non-GAAP measure to the closest GAAP financial measure. With that, I will turn the call over to Moray.

Thank you, Amanda. Good morning, everyone. NextEra Energy had an excellent quarter, capped off by the successful launch of NextEra Energy Partners. All parts of the NextEra portfolio performed well, and both NEE and NEP remain on track to deliver the financial expectations, including cash flow and credit metrics, that we have previously disclosed. I will provide more detail on expectations later in the call. At Florida Power & Light, we have invested roughly $1.6 billion of capital year-to-date, consistent with our strategy of improving the long-term value we offer our customers. Our major capital projects remain on track, and we continue to expect the last of our 3 generation modernization projects at Port Everglades to come online in mid-2016. Our reliability and storm hardening initiatives are also progressing well. In addition to these efforts to improve our electric delivery system, we are now exploring opportunities to help us deliver lower and more stable natural gas costs for our customers. Last month, FPL announced an innovative plan to invest in long-term natural gas supplies, which I will talk about more in a moment. And we were particularly pleased to learn that FPL was named the most trusted utility in the nation based on a large nationwide sample of utility customers. At Energy Resources, our development and construction programs remain on track, and our backlog of contracted renewables projects continues to development, with a PPA for another roughly 100 megawatts of U.S. wind signed since the last call. Earnings growth was driven by new contracted renewals projects, as well as strong results in our customer supply and trading business. At NextEra Energy Partners, the assets operated well and delivered financial results in line with expectations. In addition, just after the close of the quarter, the last of the projects in the…

[Operator Instructions] And we'll take our first question from Stephen Byrd with Morgan Stanley.

I wanted to touch on Mountain Valley. And just to understand -- I understand the feedback you gave on the expressions of interest, could you speak a bit to the timing that we might expect as you assess what you received? And just better help us understand what sort of milestones we should be looking for.

Sure, let me ask Armando to address that.

Stephen, we're in the middle of going back and looking at all the expressions of interest that we received and having individual discussions to make sure that we can enter into agreements with all of the interested parties. My expectation is that by the end of this year, we will be in a position to understand whether to -- whether we're going to move forward or not with the project.

Okay. So we should -- we -- you'd be communicating that back by the end of the year, it sounds like is the general time frame you're thinking? Okay.

Yes. I'd expect it to be no later than then. We might have updates before then, but I think for investors and analysts, they should expect that by the end of the year, we should know whether we're moving forward.

Okay, great. And just over for NextEra, not NEP, but just thinking about equity needs in the future and what's -- as you think about further drop-downs into NEP. Can you talk, at least, broadly about how having NEP impacts your need for equity funding? How you think about that? Does it largely eliminate external equity requirements or -- just a little bit more color on equity needs?

Sure. The way to think about the contributions coming up from NEP from a financing perspective is to expect that they will get rolled into our overall financing plan at Capital Holdings. So obviously, that implies that at the margin, there's some implicit reduction in what are the other -- the equity -- otherwise would be. Having said that, I would just remind you what we've said previously, which is with the equity issuance last year and the forward that comes in this year, unless we see significant additional incremental CapEx, we would not expect to be coming back to the market for incremental equity.

And we'll take our next question from Dan Eggers with Crédit Suisse. Daniel L. Eggers - Crédit Suisse AG, Research Division: Can you just give -- maybe a little more commentary on adding the natural gas reserves into rate base, kind of how the process will work with Phase 1 and then how you're thinking about layering in additional reserve additions over time? And what the commission is going to view as a successful implementation in this program?

Sure. It's pretty straightforward. We have a tangible proposition on the table right now, which we are asking the commission to approve. It has good economics for our customers. We think it makes a lot of sense from fundamentals and fundamental policy reasons. But it's just one transaction, and it's obviously very small in the context of FPL's overall gas needs. So what we are also asking for is approval of a set of guidelines, which would allow us to move forward with the potential to execute additional deals on a time frame that's consistent with the commercial realities of doing business in that upstream space. Obviously, the decision-making time frame commercially for the plans in that sector is fairly rapid and we would want to have agreement and essentially the blessing of the PSC that within certain parameters, we would be okay to go ahead with additional deals. Having said that, all deals, even if they're executed, are going to be subject to annual review through the fuel clause filings, so the commission would still maintain oversight over the specifics of each transaction. Daniel L. Eggers - Crédit Suisse AG, Research Division: And how comfortable do you guys feel about the scaling of those projects? And how much fuel would you like to ultimately have from controlled reserves versus buying in the market?

Well, we haven't set an ultimate target yet. Obviously, it could be very significant over time. Our main focus is on establishing the framework and getting started on the program, but clearly, we think there are plenty of other potential opportunities over time. They may not come in a smooth, steady stream. Obviously, that's going to depend upon the commercial realities in the upstream space. But it's very clear that from a customer perspective, if we can convert what is today a variable and uncontrolled cost into something that's much more predictable, there's real value to customers in doing that.

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

Can you kind of just think about your rationale of not stripping out that $0.15 and kind of given that we are incurring that now and guidance is unchanged, where the upside came from to maintain guidance?

Well, there's a number of areas. As we said, the wind resource was strong, so that was our expectations are always around this average wind resource. We had that. The Seabrook outage was shorter than we'd expected. Some of the customer supply transactions that we closed this quarter pushed us a little bit above where we had otherwise expected to be. We were a little bit better on our interest rates. There was a whole variety of areas, but when you put them all together -- there was also a little bit on the FPL side. The wholesale results were a little bit stronger there, so there was a number of areas that have pushed us up.

Okay. And then in a couple of places in your slide deck, on the one hand, we had 109% of normal wind. But then when you're talking about NEP, you said the wind and solar resources was very slightly above normal. Is this just the different geographies of the assets?

It's probably the different geographies and probably, the solar was actually below expectations.

And then -- I'm sorry, just got -- do you have a pro forma of what NextEra Energy Resources would have looked like under the new NEP accounting?

No, we don't.

We will take our next question from Julien Dumoulin-Smith with UBS.

So kind of a twin question relating to the parent company. Can you talk a little bit about how to minimize dilution from the sell-downs to NEP and the roll-down of the ROFOs. And perhaps, coupled with that, discuss the 2016 outlook. You mentioned that you're looking for clarity on a few caveats later this year to perhaps provide an update. What are those key moving variables that limit you from providing that update today as you think about it?

Okay. On the first -- again, maybe I'm just repeating what I said earlier, but the way to think about the proceeds coming up as they get rolled into the overall financing program. So in the short term, if you have a particular transaction, an acquisition by NEP of Energy Resources' assets, there will be some temporary accounting dilutive aspect until you have moved forward and adjusted your financing structure, so that your credit metrics are back where they would be, but that's going to be a relatively small amount. So it shouldn't meaningfully move the numbers. It will make this year, for example, very -- well, maybe there's $0.01 of effective dilution from that affect, so -- but then going forward, we just integrate it into the overall financing plan. On the 2016 outlook, obviously, by the end of the year, we will know where we are on the election here in Florida. We'll have a much better insight into where we are on completing the portfolio, the backlog portfolio of renewables and projects, we're working on a number of things there that we are pretty optimistic will come to pass, but we'll know a lot more by the end of the year on that front. Of course, the other thing is we'll know a lot more where we are on the PTC.

Right, absolutely, and to that point, can you discuss real quickly, what is your -- you didn't change your outlook per se, but I'm curious, is the potential for PTC extension delaying PPA sign-ups? And then coupled with that also, are you -- what is the outlook for third-party acquisitions? And has your view on third-party acquisitions down at the NEP level changed in light of the relative currency that you have in hand?

Julien, it's Armando. I think the uncertainty about the PTC and when it would be extended this year certainly caused a lull, in our view, in [Audio Gap] towards the very end of the session this year. I'll let Moray answer the NEP question.

So in terms of outlook for third-party acquisitions, I don't think the existence of NEP has fundamentally changed our view. We've always been very active in the market for third-party acquisitions. We'll continue to be, but we've also historically been disciplined in our pricing there, and we expect to continue to be disciplined. I do think it gives us a different vehicle. So depending upon the nature of the potential acquisition, it might fit better in NEP, or it might fit better in Energy Resources. In general, I think that if we see something that requires what I'll call a fair degree of cleanup, for example, perhaps a project that hypothetically we see having some operational improvement potential or requiring a contract restructuring, something of that nature. Other things equal, it would seem logical that we would start with that at the Energy Resources level, work on making those improvements and then make it available to Energy Partners because the key part of the strategy at NEP is to have clean and derisked projects because those are clearly what the investors in NEP value very highly. So to the extent to which the potential asset was already very clean in that sense, it might be a suitable candidate for direct acquisition by Energy Partners. But those are just kind of a conceptual guidelines obviously that we'd have to see in any practical situation. But I think we'll continue to be very competitive.

We will take our next question with Paul Patterson with Glenrock Associates.

Sort of quickly on Slide 7, the load growth -- I'm sorry if I missed -- what caused the 1.3% nonweather-related decrease?

Well, I guess the bottom line is we're not sure. That's the underlying usage growth and other is essentially a residual from our calculations. So we apply our regular forecasting model which says, okay, given what happened with temperature, given what happened with the economy, given what happened with relative pricing, here is what we should have expect and so this is really measured relative to that, which is one of the reasons that it is often volatile from quarter-to-quarter. Having said that, I think what we're seeing in here, although I can't be sure of the exact reasons, is some reduction in usage or lower-than-expected usage among the higher volume customers because the lower volume customers, the metrics associated with them, all look pretty good. So I think what we're seeing is some -- among higher-volume customers, whether that is deliberate conservation efforts, whether it's the effect of more energy efficiency than we have anticipated, we're not sure. So we're going to be digging into those numbers to figure out what we can about what's going on there. But do recognize that from quarter-to-quarter, just mix impacts within the customer base can have quite an impact, an indirect impact on that residual usage.

Okay. And then on Oncor, looking at the legislation that was 13-64 [ph] last year regarding the sort of standalone tax concept and what-have-you, how should one think about -- or what can you share with us the potential use of leverage in an acquisition such as Oncor? I mean, one might think that it could be substantial. I'm just wondering if...

Yes. I really can't say anything more than we shared in the prepared remarks.

Okay. Fair enough, but I tried though. Okay, so then -- and then finally, on the structured transactions in the trading and marketing of $0.07, could you give us a little bit of flavor for what happened there? What the nature of that is, I guess?

Sure. We've, for a long time, been in the business of tailoring power and gas products to meet particular customers' needs. Commonly, these customers are munis and co-ops in different parts of the country, who don't necessarily have the capability to manage all their varying energy needs directly. And typically, these will be for kind of nonstandard amounts of power varying over the course of the year or varying over years. So they're sort of customized products in that way, but they're still relatively straightforward in that they're power and gas delivered to particular locations. And so we will customize the product to meet that need and then essentially back-to-back it, hedge out the components in the regular market. And there's obviously a spread to be made on that. I would say that with the pullback of some of the major financial services firms from the physical commodity world, we've been seeing perhaps a few more of those kinds of opportunities more recently. So it's good business, it maintains relationships with the folks who are often customers of ours on the wind side. So it provides a nice extra portion of the mix.

Okay. Is it sort of like a gain-on-sale, though, when you do these transactions? Or is this sort of an accrual kind of -- how should we think about sort of the ongoing nature of something like this sort of structured transaction, in other words, do you take a gain as you do these transactions or is there more like an annuity stream? How should we think about that?

It's a little bit of both, and it depends on the nature of the transaction. Mostly, they are an accrual transaction; occasionally, they may have an element of mark-to-market upfront. We try and minimize that portion for obvious reasons. It's better to spread them out over time. But depending upon the specific nature of the deal, the accounting may require you to take a day 1 gain, so to speak.

So that $0. 07 just sort of -- the flavor of that would you say is mostly accrual or mostly sort of mark-to-market? Onetime-ish? How should we sort of think about that?

I would say it's mostly stuff that continues on.

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

Just a couple of things. First, do you an official schedule for the EMP [ph] approval?

I'm going to turn to Eric. I'm not sure that the PSC has formally scheduled it. We're certainly hoping to have a decision by at least the early part of next year.

Steve, this is Eric. So we're right now working with the staff of the PSC and other interested parties on schedule. We're hoping for hearings in October, and then we're still hoping for a decision by the PSC sometime by the end of the year, beginning of next year at the latest.

Okay. And then just a question on NEP. We never really, because of the filing and your kind of inability to comment once you file the S-1. We never really got the kind of story on why this is good for NextEra and how you made the decision and the like. And I don't know, if you could just spend a short bit of time on how this is -- how you see the value of this to NextEra?

Sure. Obviously, there's different ways of looking at it -- and I think different individuals look at it somewhat differently -- for myself, I view it very much as a way to highlight the value of a very attractive portion of the portfolio that arguably wasn't receiving full value in the existing structure. As I had sort of hinted at in the response to an earlier question, a lot of what we are really doing in separating out the assets that are part of NEP is segregating 2 distinct aspects of the business in Energy Resources. There is the development construction early stage operations, getting a project to the point where it is, as I referred to it earlier, clean and derisked. And then there's the long-term ownership of the financial interest in those assets. Those 2 aspects of the business are really quite different. They have different risk profiles, and they can certainly appeal in differing degrees to different sets of investors. And what we've done through creating NEP is we've really created a vehicle that allows us to segregate those activities. And in so doing, I think we've highlighted, begun to highlight the real value of those -- of that long-term financial interest in those projects. So to me, it's mostly about highlighting of the value, but we've done so in a fashion that I believe promotes alignment of interests, and that speaks to obviously the structural characteristics of NEP. Other people are going to see it somewhat differently. So a common way, but certainly a number of investors have expressed it and folks internally just see it as accessing a lower-cost source of capital. So I think there's a number of ways, in a sense, different sides of the same coin, but I see it as really highlighting the value.

We will take our next question from Michael Lapides with Goldman Sachs.

One or 2 nuts-or-bolts questions. Florida Power & Light O&M for the quarter and year-to-date, basically flat year-over-year. Just curious, is there anything unusual in kind of the quarters for 2014? Do you still expect kind of flattish O&M in '14? Anything that could make second half of 2014 higher or lower than second half of 2013?

Well, recall that we undertook this initiative that we call Project Momentum last year. And that produced a great many ideas that, in FPL's case, will deliver O&M savings over time. Not surprisingly, those savings tend to build over time. So we would expect the full year for 2014 O&M at FPL actually to be down relative to 2013. So you should definitely expect the second half to be down. But there's nothing particular that I can point to there because the gains from Project Momentum were very widely shared across different parts of the organization. So it's really progress in all areas. We're very pleased with the way the implementation of those initiatives have been going. We're actually a little bit ahead of where we had expected to be. Recall, of course, that those don't directly affect FPL earnings because of the nature of the settlement agreement. So if we do better than we expect on O&M, that simply gets reflected in the amount of [indiscernible] depreciation that we adjust. But that's really what's going on there.

Okay. And then when thinking about NEP's portfolio over time, and when I say over time, I mean multiple, multiple years, and the risk profile of NEP. Just curious for your thoughts, it's one thing we've got renewable assets in there that honestly have very, very, very low maintenance CapEx or even kind of onetime CapEx requirements and have 25- or 30-year contracts. How do you think about what adding other types of assets whether it's gas fire, power play [ph] typically have shorter-term contracts or whether it's nuclear, where they may have longer-term arrangement, but there's also, I don't know, kind of binary capital spending risks? Meaning, Crystal River 3 or Songs [ph] or Davis Besse-related risks that just kind of don't exist with a lot of other type of power plants. How do you think about the pros and cons of adding to the EBITDA and the cafte [ph] for NextEra Energy Partners by putting nonrenewable assets? Even something like a T&D utility in there versus the potential impact on maybe valuation or multiples or CapEx, given kind of what the CapEx risk looks likes for those other types of assets versus the CapEx risk of a renewable plant?

Okay. Let me try and address that in a number of pieces because I think there's a lot of things in there. I think the short answer is, we are going to evaluate all those issues that you've just talked about over time, and we're going to receive, I suspect, a lot of investor feedback, and that will help us in our evaluation. One of the great things you pointed out, but you're talking many years down the road -- one of the great things about the NEP position is it can look to long-term sustained growth simply through adding contracted renewable projects, which it may hope to acquire from the sponsor, so long before you have to even consider some of the things that you've just raised in your question. Having said that, let me take the [indiscernible] assets, clearly, there are examples in the market where those assets have been added to a yieldco-type portfolio, so it clearly can be done. I think there are a couple of issues that go different ways. On the one hand, you get an extra dimension of diversity, so that should be attractive to an NEP investor. But as you pointed out, they do have different characteristics. So I think we're just going to have to evaluate the relative weight of those -- broadly speaking, those 2 factors and see what investor reactions are. And the same general criteria apply as you start thinking about extending the universe of assets more broadly, although introducing even more complexities. So for example in the nuclear assets, obviously, the binary nature of an event risk that you're implicitly referring to would need to be taken into account. I don't know, but I suspect that, that's not a kind of risk profile that most of the NEP investors would be particularly -- would be pricing into their valuation today. So we need to see what the reaction is. So there might be structures that you would need to put in place to isolate that portion of the risk. In a sense, it goes back to the response of a couple of earlier questions, which is one of the nice things about the NEP platform, is that it enables us to segregate out different types of activities and focus them in the 2 different companies. And in particular, I suspect that means there will be -- we will take on specific types of risks within Energy Resources and NextEra Energy that we would not take on within NextEra Energy Partners.

Got it. Last question, any update on transmission investment opportunities -- electric transmission investment opportunities outside of Florida?

Not a lot new to report. As I've said on a number of occasions to many folks, the transmission development business is long-term in nature. The decision-making time frame for a lot of these projects, particularly the ones that go through the regional, the ISOs, the ITOs, tends to be fairly long. And so nothing in particular, the project, the development project in Canada is moving along as we would expect. We continue to have a very healthy portfolio of initiatives that we're working on. But as I've also said many times before, all of these things are long-term in nature. So things that would not begin to contribute before 2018 or 2019 in most cases.

We will take our next question from Greg Gordon with ISI Group.

So 2 questions. First on the TXU transaction. I know you can't comment specifically on it, but can I ask a broader question with regard to your philosophy on acquiring regulated assets? So when you talk -- when you think about what acceptable financial and risk parameters are, in any, like, acquisitions with any, regulated utility, what are the cornerstones sort of financial pillars of your decision-making? For instance, with the Wisconsin acquisition of TEG, they had never commented explicitly on any transaction but always had said had to be accretive in the first full year, not too dilutive to growth rate, not too dilutive to credit. So can you sort of give a comparable set of characteristics that you look for when you think about the price you're willing to pay and the risk you're willing to take in acquiring an additional regulated asset?

I'm not sure I can give a comprehensive list, but let me just try and provide some color at least around that. Recognize that your ability to add value in these situations depends upon your ability to develop synergies across 2 platforms, to improve operations in a platform that you may acquire or to find other ways of delivering incremental value on which the shareholder may hope to earn a regulated rate of return. So you have to look at what is the realistic potential to create value. And while that can be quite meaningful in this industry, it is typically not as large when expressed as a percentage of the existing market value as you will see in many other industries. So you've got to make sure that you can retain significant portion of the value that you create for your investors; otherwise, there's no point in doing the transaction. And that obviously, in turn, depends upon the terms on which you can expect to get regulatory approval. We would certainly want to make sure that anything that we do is supportive of our existing credit position. As we said on many occasions, we're very comfortable with our credit position, it's an important, competitive weapon to us. So we certainly would not want it to be dilutive to credit. We have traditionally said that with respect to accretion, dilution, while we don't have any absolute hard-and-fast rules, if a transaction is significantly dilutive in the first couple of years, that's usually a warning sign about its fundamental economics. So there can be some particular accounting reasons why an individual transaction might be dilutive in the first year, but normally, that should be a red flag.

The final question is circling back to the opportunity to create value by hedging out your risk through reverse integrating into natural gas. Someone asked you that question earlier. You indicated that the request that you're making is only to sort of hedge out about 2.9% of your expected 2015 gas burn, and your gas burn is likely to rise in the future by a fair amount. If we want to sort of size up the potential expenditures, if you were to fully hedge, and I understand you'd never do that, is it fair to just take the $70 million to $190 million range and sort of gross that up, so that hypothetically, if the regulator were to say, look, we'd like you to hedge it all, that the range of the potential spending would be sort of $2.4 billion to $6.5 billion? Or is that way over simplifying the math?

Yes. I'm not sure that it's going to scale linearly, certainly as you get up higher and higher, but for the first few percent, it probably is not far off.

That does conclude today's conference. Thank you for your participation.