Good morning, and welcome to the NextEra Energy and NextEra Energy Partners Conference call. [Operator Instructions] Please note, today's event is being recorded. I'd now like to turn the conference over to Matt Roskot, Director of Investor Relations. Please go ahead, sir.

Thank you, Rocco. Good morning, everyone, and thank you for joining our third quarter 2019 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; Rebecca Kujawa, Executive Vice President and Chief Financial Officer of NextEra Energy; John Ketchum, 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. Rebecca 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 historical non-GAAP measures to the closest GAAP financial measure. With that I will turn the call over to Rebecca.

Thank you, Matt, and good morning, everyone. NextEra Energy delivered strong third quarter results, and building upon the solid progress made in the first half of the year, remains well positioned to achieve our overall objectives for 2019. NextEra Energy's third quarter adjusted earnings per share increased by $0.22, or approximately 10% against the prior year quarter, reflecting strong execution at Florida Power & Light, Gulf Power, and Energy Resources. Year-to-date we have grown adjusted earnings per share by nearly 12% compared to the prior-year comparable period. We continue to execute well on our major initiatives, including continuing to capitalize on one of the best renewable development periods in our history. At Florida Power & Light, earnings per share increased $0.03 year-over-year. All of our major capital projects, including one of the largest solar expansions ever in the United States remains on track as we continue to advance our long-term focus on delivering outstanding customer value. FPL's typical residential bill remains nearly 30% below the national average and the lowest among all of the Florida investor-owned utilities, while FPL maintains best-in-class service reliability and an emissions profile that is among the cleanest in the nation. At Gulf Power, we continue to execute on the cost reduction initiatives and smart capital investments that we outlined at our June investor conference. We remain focused on improving the Gulf Power customer value proposition by providing lower cost, higher reliability, and outstanding customer service and clean energy solutions. Along these lines, the Blue Indigo Solar project, which is Gulf Power's first solar development project, is expected to go in service in early 2020 and generate significant customer savings over its lifetime. At Energy Resources, adjusted EPS increased by roughly 19% year-over-year as contributions from new investments continued to drive growth. Continuing the success of…

[Operator Instructions] Today's first question comes from Greg Gordon of Evercore ISI. Please go ahead.

So, a couple of questions, you did put out a press release recently talking about this potential for $25 billion to $35 billion of necessary spending to get the full undergrounding program completed. Can we talk – can you talk about when that might go from sort of theoretical to actually being laid out and executed and over what time frame you might be looking to execute that for the benefit of your customers?

Sure, Greg. Some of this stems from - well, a couple of things. One is, as you know, we've had a long program now over many years that Florida Power & Light to invest in storm hardening and resilience across the FPL grid infrastructure. This past legislative session, the Florida State Legislature passed a new law called Storm Secure, that authorizes further investments, including undergrounding our electrical infrastructure, which all of the utilities in Florida will be able to file plans with the Public Service Commission and start to make those investments and recover on those investments through a clause mechanism. What we said about it both at the Investor Conference which at that time the law had not been signed by the governor and then subsequent investor materials is that this represents a multi-decade opportunity and tens of billions of dollars of potential investment into our grid infrastructure. It's going through the process now. The next steps include the Public Service Commission finalizing a rule and having that fully discussed through that process. And then, FPL and Gulf Power would start to file their plans and make those investments and start to recover through the clause.

Two more questions. One, with regard to NEP, obviously, the prospects for that business look great. But how do you address like the perspective that even though these gas infrastructure investments you're making make a lot of economic sense, provide good value to the customers that they're serving that it made on the margin be diluting the sort of the clean energy sort of ESG-related aspects of the profile of NEP, even though they do to your point that you've made bring some benefits in terms of personification.

We try to cover some of this in the prepared remarks. We've long believed that what is really valuable from an NEP unitholders perspective is our investing in long-term contracted clean energy assets, with creditworthy counterparties. And we believe that gas infrastructure, specifically pipelines to the extent that they meet those criteria, could be a great fit for NEP. And of course, as you know, we executed on an acquisition of some pipeline several years back, and that's added tremendous value to unitholders. This was a unique opportunity. We think the returns are particularly attractive, particularly when you couple that with debt financing that we were able to execute. And as I commented on the prepared remarks, assuming that we are able to close the acquisition, the CAFD related to all of the pipelines would be roughly 30% of the overall portfolio. And as we look forward ,and particularly focusing on NextEra Energy Resources portfolio as an obvious source of potential acquisition targets for NextEra Energy Partners. We have a significant amount of long-term contracted renewables, that could and likely will be sold into NextEra Energy Partners over time. So that percentage of 30%, assuming the close of the acquisition will likely go down over time, particularly since this is a unique opportunity to acquire the Meade Pipeline.

My last question is, the delta between the GAAP earnings and the operating earnings is pretty, pretty significant this year, more significant than it has been in some prior years and I understand a lot of that is due to the transition – some transitions related to the business, but can you just take us through as we move through time, do you expect the difference between GAAP and operating results to tighten again, as we move into 2020 and beyond or are there going to be continued structural reasons why we should expect natural gas related or gas infrastructure related or interest rate related adjustments to continue.

So, Greg, of course there's a couple of things that are excluded from our adjusted earnings that flow through GAAP. As you highlighted some of the hedges that we enter in Q4 but our power portfolio as well as our gas infrastructure portfolio, the marks related to those investments work both through that. But the bigger driver this year has really been about interest rates. And interest rate cap is going down has contributed to a significant amount of mark that we exclude from adjusted earnings purposes. So, that'll fluctuate over time. We think that the hedging activities that we enter into whether it's hedging or gas and power exposure or interest exposure makes sense both for NextEra Energy and NextEra Energy Partners to ensure that we have the ability to have low cost and continued access to the capital markets over a long period of time.

And our next question comes from Steve Fleishman of Wolfe Research. Please go ahead.

Just wanted to clarify, I think Rebecca you said that the – you think that in the wind business that 2021 could be as good a year as 2020? Did you…

No, no.

Is that correct? Yeah.

That’s 2019. Comparable to 2019 - no, 2020 should be a very strong year as our customers are working to take advantage of the last year of 100% PTC. But we do think it’ll be more likely than not comparable to 2019.

And then on the - just, could you maybe talk a little bit more about what the MISO issue was that kind of affected this 1,400 megawatts of clearing projects and just maybe a little more color on the opportunities projects and just made a little more color on the opportunities that you see maybe if gaining some market share there.

Sure. Both MISO and SPP have had a significant amount of queue requests be put into their queues over the last couple of years. I think as both developers and those that might buy renewables put in requests ahead of the tax credits trying to phase down. And so, they face some tough modeling issues both for MISO and for SPP that resulted in what we think are some unusual outcomes and high costs for interconnection requests, which affected, in particular, about 1,400 megawatts of industry-wide projects as we commented in the prepared remarks. This creates opportunities for us. So, for some of those projects, there had some obvious customers that wanted to buy some wind and solar projects, which will create opportunities for energy resources to help fill that supply. It also creates the opportunity or incentive for us to optimize our existing queue positions and existing interconnection rights to maximize all the generation that could be filled for those interconnection requests. So, certainly, a speed bump with respect to some of the things in our backlog, but in context of now the substantial backlog that we have really is no more than a minor blip, but we wanted to comment on it given the movement in the backlog.

And our next question today comes from Stephen Byrd of Morgan Stanley. Please go ahead.

I wanted to focus on Mountain Valley and just first cover just the process next steps both from a legal perspective as well as with FERC, would you mind just kind of talking through what we should be thinking about from a process point of view from here.

Sure. One of the two things that are particularly notable. One is the Supreme Court has decided to take this up as you well know and we'll hear this in the first part of 2020 and ultimately render its decision by June of 2020. So then, we'll understand whether or not the Fourth Circuit's decision in ADP's case which obviously sets the press and also for Mountain Valley pipelines crossing of the Appalachian Trail. The second aspect is finishing up the permitting for Mountain Valley pipeline. The new biological opinion is expected to be issued in the early part of 2020. That obviously would address the current stop work order and set forward the process of finalizing the remaining permitting other than the Appalachian Trail Crossing. So as I've commented in the script, we continue to believe that more likely than not the pipeline will be put into service in 2020. And again, higher costs than we originally had anticipated but approximate now $5.4 billion across all of the partners.

Understood. And how much capital has NextEra invested to date? And if the project were to be canceled due to legal issues, what would the financing implications be for NextEra overall?

So we've invested a little bit over $1 billion year-to-date, and that's just our portion of it as opposed to the whole project overall. And what was the second part of the question, Steven, the financing implications?

If the project would be canceled, what would the financing implications be for NextEra?

We've got a pretty sizable balance sheet at this point Steve. So not significant implications for us. It certainly would be disappointing from a development standpoint not to be able to complete it. And I think at this point that much less likely than the alternative which is that we expect to bring it into service.

And our next question today comes from Julien Dumoulin-Smith of Bank of America. Please go ahead.

This is actually Ritchie Ciciarelli here for Julien. I was just wondering if you can comment on your regulated strategy for the rate case filing? Have you made any decisions around consolidating FPL and Gulf and could that potentially provide additional accretion if you consolidate the capital structures there?

So Ritchie, we did make comments at our June investor conference that we were at the early stages of evaluating a merger and ultimately a joint rate case filing between FPL and Gulf. And I’d argue at this point we're probably still in the early stages, as we highlighted then and continue to highlight, our best information at this stage which could change, but our best information at this stage is that we would file in 2021 for new rates in 2022. And that was both for FPL and Gulf. As we get closer to that period of time, we certainly might update that if things change or be able to give you more information, but we're still at the preliminary stages of that.

And then can you just comment on the JEA process and I guess expectations for how long that will take, I guess, complete?

So, Ritchie, as we’ve commented a couple of times, we're certainly interested in doing more regulated M&A and the processes that are very public both at Santee Cooper and JEA. We've indicated our interests, but at this point, out of respect for both processes that are entering more advanced stages, we're limited on what comments we may make on it. But I'd fall back to the fact that we've continued to be interested and of course as you well know JEA, released its list of folks that made it to the next round and of course we were on there.

And the next question today comes from Shahriar Pourreza of Guggenheim Partners. Please go ahead.

Just a quick follow-up on the 21 GRC filings. You guys sort of formulate your thoughts and get the process together. If I could - can you just highlight maybe some of the arguments you'll present as far as the benefits to FPL customers to have a merged utility? Obviously, the benefits for Gulf stated and it’s - but just sort of as you guys think about as a merged entity where you see the benefits flowing to FPL customers.

Shahriar, I think it's – I appreciate the interest in it. I think at this stage to talk specifically about any sort of rate case strategy would be a little bit premature. But you should expect that a lot of what we might talk about would be consistent with what we always talk about with you guys, which is we really do focus on capital investments that make sense for our customers that improve the reliability, remove cost from the system, improve our emissions profile over the long term to make sure that what we provide to our customers is really valuable to them. And we continue to focus on that and be very diligent in those efforts throughout a long period of time in terms of our history with FPL. And as we laid out in great detail at our investor conference, the investment program that we have at Gulf Power over the next couple of years investing roughly $3 billion of capital to have the cost of O&M, substantially improve reliability, substantially improve the emissions profile, and substantially improve the safety profile or certain things that we're proud of and we think are really the right things to focus on from a customer standpoint and ultimately from a regulatory standpoint.

And then just, Rebecca, one last topic here is just on the retail choice. I mean, obviously, the Supreme Court has started their review. Maybe just a little bit of an update of thoughts on when you expect the timing from the Supreme Court and just the arguments around single issue and items being on ambiguous. And then as far as maybe just a quick update on the votes and as we hit the February deadline?

You’re absolutely right. There are two - just like the last quarter conference call, there were two things that need to happen before the initiative could be put on the ballot. One, the Supreme Court is doing its diligence which as you rightfully highlighted. It's not an evaluation of the merits of the proposal. It is simply whether or not, in my words, not necessarily the legal words, but in my words that a single subject and it’s unambiguous and can be easily understood by the average voter. The hearings were a number of weeks ago and the Supreme Court could render its decision at any time. There's not a specific statutory time frame for them to render their decision. We think in the hearing that issues were brought up and effectively argued that both it is ambiguous and is not single subject. So, we're optimistic that the Supreme Court might render a decision that would be favorable to us but of course, that remains to be seen and we'll hopefully know soon. On the votes, there are roughly 500,000-ish. 460,000 I rounded up relative to the 760-something-thousand votes or signatures that they need to gather before February 1. The practical deadline really is the very beginning of January. There's some time frame for the state to evaluate and validate these signatures. It is not insurmountable but they would need to significantly increase their rate of signature gathering in order to get what they need in order to get on the 2020 ballot.

And then just you don't envision a scenario where the Supreme Court renders a decision post the February ballot deadline?

We certainly - it seems unlikely, but we don't know. Based on precedent, it seems that it would be more likely not in the next couple of months, but we don't know.

And our next question comes from Michael Lapides of Goldman Sachs. Please go ahead.

I'm looking back at the Investor Day deck and the capital spend trajectory for FPL was about $5.6 billion to $6.2 billion each year through 2022. That implies kind of if you continue to earn at the high end of the band that kind of the law of big numbers starts to kick in and the growth rate of that FPL would actually start to slow down. What are the things that could keep -- what are the things that are not in that $5.6 billion to $6.2 billion CapEx budget that could make that a higher rate base growth trajectory?

So we obviously laid out the plans for this period of time through 2020. So I'm assuming you're asking for kind of a post 2020 view. And some of the things that we highlighted in the Investor Conference which still remain very much true today and we even talked about one of them at the very part beginning of the Q&A, two major capital programs that will last well beyond the 2022 expectations period. First is Storm Secure continuing to harden the infrastructure. That, of course, now is even further authorized through the clause mechanism and has a path for recovery of those investments near the time of having made those investments. And then second is a continued build out of solar and FPLs in Gulf service territory. The 30-by-30 program by 2030 is about 10 gigawatts of capacity. If we execute on that exactly to that plan, it's roughly 20% of FPL’s generation will come from solar generation in 2030, which obviously leaves a lot of opportunity for further expansion of solar beyond that time frame.

Got it.

Just normal investments in the infrastructure.

But is most of that for the post-2022 time frame? So, if I think about the 2020 to 2022 time frame, there's not a lot that's going to move that $5.7 billion to $6.2 billion number around?

So, we have our expectations. They were the best information that we had at the time and continue to have. Obviously, we reserve the rights to change that investment plan over time, but we think it is a terrific plan that we're excited about, and that really focuses on developing the customer value that we think is so important.

And our next question comes from Michael Weinstein of Credit Suisse. Please go ahead.

A couple of questions - good morning. A couple of questions about renewables. Have you heard anything about a possible extension of Section 201 solar import tariffs. And then separately from that, at a recent conference, a lot of the developers there were talking about 0% returns through contracted life on wind projects. And I'm just wondering, I mean, you guys are usually in better shape than other people, and I'm wondering what kind of returns you guys are seeing for wind.

Okay. I’ll start with the second question first. Our returns are not anywhere near that stated report. We continue to be disciplined in our investment plans, in energy resources. Our returns have remained roughly consistent over a long period of time on a levered basis. And we continue to strongly believe that they're creating value for our shareholders relative to our cost of capital. We can't speak to what other people are investing in. What we do know is that we have significant competitive advantages across this business. Certainly our experience in it is extremely important. It is not only that we have a significant amount scale, we're investing a substantial amount of capital. We've got great relationships with our suppliers where we're a meaningful customer of theirs, And of course we've had continued significant investments in digital technologies to keep getting better at this business every year. So we love the business. We think it's a terrific growth opportunity for us. And as you look out over the next couple of years, you'll continue to see the returns from Energy Resources along the lines of what John highlighted at the investor conference, continue to be very attractive. On the on the tariffs, this changes minute-by-minute and day-by-day. So what our supply chain team continues to focus on is working very closely with our suppliers. Obviously, that story might be a little different between wind and solar, but they have obviously anticipated the uncertainty that could be in the market in the coming years and we've positioned ourselves appropriately so that we can continue executing our developmental program at attractive returns.

And our next question today comes from Pavel Molchanov of Raymond James. Please go ahead.

On the power storage front, you've talked about the kind of mainstreaming of storage deployments. I'm curious if in your business development efforts, you found any storage technologies other than lithium-ion that you think are worth commercializing and scaling up in a serious way.

We continue - just like we have been with the gas business before, then the wind business, gas business before, then the wind business, then the solar business, we always remain technology agnostic and whatever becomes commercialized that we can deploy at scale with high confidence in the long term total cost of ownership, we would certainly be open to it. That said what we continue to see and what we are currently signing contracts with our customers is predominantly lithium ion but there is a lot of venture capital and a lot of private equity for further stage investments being invested in this space to see if we can find something even better than lithium ion. But with the electric vehicle sector really focusing on lithium ion, those that are producing lithium ion batteries are investing in the manufacturing scale which is producing significant cost improvements and some technology improvements that’s making it very compelling. So, as you look at in our materials, you look at what we think is likely to happen in the middle part of the next decade, you’re talking about a $5 to $7 a megawatt hour adder to get to a nearly firm wind or solar resource. That's a pretty attractive price. So, in order to beat that, you'd have to see a pretty big step change in where some of these other technologies are to truly be competitive.

And then kind of a corollary to that maybe on the flip side of the value chain, EV charging, any update on the role that you guys are playing in that Florida build out? The state overall still lags behind a lot of the other coastal states in its EV infrastructure. So, curious what you guys are doing to resolve that?

It has been a focus in Tallahassee at the state government level to really think about it and think about what part of different companies and organizations might play in it. And we certainly have worked on a couple of pilot opportunities to think about how that infrastructure can be built out. There may be more to do at some point, but we're still evaluating whether or not that's an opportunity within the regulated utilities or potentially on the competitive side.

And ladies and gentlemen, this concludes today's question-and-answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.