新世紀能源 (NEE) 2010 Q1 法說會逐字稿

Good day everyone and welcome to the FPL Group first quarter 2010 earnings release conference call.

Group first quarter 2010 earnings release conference call.

Today's conference is being recorded.

At this time for opening remarks I would like to turn the conference over to Ms.

Rebecca Kujawa.

Ms.

Kujawa, please go ahead.

Good morning, everyone, and welcome to our first quarter 2010 earnings conference call.

Armando Pimentel, FPL Group's Chief Financial Officer, will provide an overview of our performance for the quarter.

Also joining us this morning are Lew Hay, FPL Group's Chairman and Chief Executive Officer, Jim Robo, President and COO of FPL Group, and Armando Olivera, President and Chief Executive Officer of Florida Power & Light Company.

Following our prepared remarks our senior management team will be available to take 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 release in the comments made during this conference call and 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 the investor seconds of our web site, at www.fplgroup.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 is a nonGAAP financial measure.

You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the nonGAAP measure to the closest GAAP financial measure.

With that I will turn the call over to Armando Pimentel.

Thank you are, Rebecca, and good morning everyone.

As many of you know, next week we are planning to host our investor conference next week which will be webcast.

At that time we plan to provide a strategy review of both of our main businesses as well as our long-term growth prospects.

Today we will review our results for the first quarter of 2010.

FPL Group's adjusted EPS results grew approximately 4% over the comparable period a year ago.

Our quarterly results were driven by favorable weather and new asset additions at Florida Power & Light Company, primarily offset by lower than normal wind resource at NextEra Energy Resources.

At FPL we continue to make capital investments and we expect will improve our already clean emission profile and provide long-term customer benefits.

On January 11, 2010, FPL's electrical system experienced not only a new winter record peak demand, but also an all time record peak demands of 24,346 megawatt hours.

We are proud that our system performed well, and FPL continued to provide safe and reliable service with minimal disruptions to its customers.

Shortly after the quarter ended, FPL commissioned a Space Coast Next Generation Solar Energy Center.

It is located on NASA property at the Kennedy Space Center, and is producing an estimated 10 megawatts of clean emissions-free power.

With the completion of this facility, we have commissioned 35 megawatts of the total 110 megawatts of solar capacity that we indicated we would add at FPL.

The 75 megawatt Martin solar thermal facility is expected to be placed in service by the end of this year.

The three facilities in total will add roughly $700 million to our rate base, and be recovered through the environmental clause.

Also in April, FPL announced that we signed a definitive agreement with the US.

Department of Energy to receive $200 million in Recovery Act funding, which FPL will use to further our Energy Smart Florida initiative.

Energy Smart Florida represents an expected overall investment of about $800 million.

We are investing in small grid technologies as part of our commitment to building a stronger, smarter, cleaner and more efficient electrical infrastructure.

Energy Smart Florida is designed to help keep service reliability high over the long-term, and give customers more information to manage their energy usage.

The deployment of state-of-the-art smart grid technologies, including smart meters, should improve the service we provide our 4.5 million customers and provide them with tangible benefits today, while laying out the foundation for a host of future benefits.

Although the weak wind resource negatively affected first quarter results at NextEra Energy Resources, the operational performance of our fleet was strong.

The forced outage rate for our fossil fleet was best in class for the industry, based on available data.

And, in addition, the forced outage rate for our wind fleet was one of our best ever and continues to lead the industry.

Finally, during the quarter, our Point Beach nuclear facility completed a refueling outage.

In addition, we continue to pursue development opportunities in Canada.

A couple of weeks ago we were awarded approximately 148 megawatts of wind projects in Ontario, Canada, as part of the province's Feed-in Tariff program.

We are excited that one of the projects we were awarded was the largest project selected, and that, in total, we were awarded approximately 12% of the total land-based wind projects.

Separately, in the last couple of weeks we commissioned 99 megawatts of new wind in the US, and we have approximately 140 megawatts either under construction or approved for construction.

During the first quarter FPL Group adopted a new method for allocating non-utility interest expense and shared service costs between our NextEra Energy Resources and corporate and other reporting segments.

This change results in a more meaningful current presentation of segment financial results.

Previously, as our segment disclosures have shown, we have allocated interest expense to NextEra Energy Resources based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.

The allocation was based on our experience in financing our growth during the early part of the last decade.

In practice, we have been successful in financing NextEra Energy Resources' growth, particularly through the use of projects at our wind projects, with somewhat higher debt, without adversely affecting our overall credit position.

Consequently, we recently decided to do review our methodology for allocating debt for segment reporting purposes.

Under the new methodology, interest is allocated between NextEra Energy Resources, and the corporate and other reporting segments, based on a method that more closely aligns with actual leverage being employed at NextEra Energy Resources.

The change impacts both GAAP segment disclosure and adjusted earnings results for the NextEra Energy Resources, and corporate and other reporting segments.

The main effects of this new allocation methodology will be, first, NextEra Energy Resources' income will be lower than under the prior methodology, while the corporate and other segment will be higher.

Second, NextEra Energy Resources return on equity will be higher than under the prior methodology.

It is important to recognize that we are not making any change in our overall financial policy with this change.

We will continue to employ an overall financing strategy designed to achieve a target level of financial strength as reflected in our consolidated adjusted credit metric.

On a quarterly basis, we have always provided to you the GAAP debt equity ratios and the adjusted ratios in our earnings release, and we will continue to do so.

In addition to the change in interest allocation, certain shared service costs that were previously captured at corporate and other are now allocated directly to NextEra Energy Resources.

We have summarized the impact of the change in the allocation of interest and shared services costs on this slide.

Again, to be clear, there is no impact to the consolidated financial statements of FPL Group or its credit metrics.

There is also no change to the Florida Power & Light financial statements or credit metrics.

Additionally, you will note that the reallocation of these expenses does not significantly change any of the metrics that we have previously reported to you, including earnings growth at NextEra Energy Resources.

Now, let's look at the results for the first quarter.

In the first quarter of 2010, FPL Group's GAAP net income results were $556 million, or $1.36 per share, compared to $364 million, or $0.90 per share, during the 2009 first quarter.

FPL Group's adjusted 2010 first quarter net income and EPS were $386 million, and $0.94 respectively, compared with $364 million, or $0.90 per share in 2009.

The difference between the GAAP results and the adjusted results is the exclusion of the mark in our nonqualifying hedge category, and the exclusion of net other than temporary impairments on certain investments, or OTTI.

As we discussed during the fourth quarter 2009 earnings call, sometimes weather has offsetting effects across our portfolio due to the diversity of our Company's operations in terms of geography, fuel and other factors.

Although that may not always be the case, in the first quarter we again realized some offsetting impacts from weather at our two main businesses.

This slide shows the impact of weather during the first quarter, both against the prior year as well as against normal.

Weather had a positive impact on Florida Power & Light's results, while having an overall negative impact on NextEra Energy Resources, resulting in a net negative $0.05 impact to adjusted EPS at FPL Group.

The wind resource in the quarter was the worst it has been in 31 years of history.

So far in April, the wind resource has improved, but does remain below norm.

As we discussed in detail during the third and fourth quarter 2009 conference calls, the wind resource is primarily affected by local weather patterns.

However, we also noted that we believe there is some correlation between the El Nino weather pattern and a poor wind resource in the Texas and Midwest regions, where many of our wind investments are located.

There continued to be strong evidence of the El Nino weather pattern during the first quarter.

The US Climate Prediction Center currently predicts that the El Nino weather pattern will weaken during the second quarter.

We spend a significant amount of time and resources evaluating historic, current, and forecasted wind results, and we continue to be comfortable with the manner in which we estimate wind resource for both investment and forecasting purposes.

We will have additional detail on our work in this area at next week's investor conference.

For the first quarter, Florida Power & Light reported net income of $191 million compared with $127 million in last year's first quarter.

The corresponding contributions to EPS were $0.47 this year compared to $0.31 last year.

Florida Power & Light's first quarter results were higher primarily due to weather, and an increase in base revenues for the placement and service of West County Energy Center units one and two.

As graphs on the accompany slide illustrate, we are starting to see some signs of improvement in our customer metrics.

The table in the upper left shows the change in retail kilowatt hour sales versus last year's comparable period.

Overall, retail kilowatt hour sales grew by 6.6%, an improvement due primarily to higher weather related usage.

Usage growth due to weather helped the quarterly earnings comparisons by approximately $0.08 per share.

Not weather related, our underlying usage growth remains under pressure due to a decline in economic conditions on a year over year basis.

Despite some positive signs in certain customer metrics, the general economic environment in Florida still remains challenging, as evidenced by Florida's unemployment rate which rose to 12.3% in March of this year.

The graph in the upper right-hand corner indicates a sequential increase in customer accounts.

As we have said before, during the downturn, the change in our customer accounts did not follow normal seasonal patterns, which historically had generally meant higher increases in customer accounts during the fourth and first quarters of the year, and lower increases during the second and third quarters of the year.

Although we expect seasonality had something to do with the sequential improvement in the first quarter, we believe it is still a positive sign ,since it is the highest quarterly increase in customers on a sequential basis since 2007.

As of March 31, 2010, we had approximately 14,000 more customers than we did at the end of March 2009.

The graph on the bottom left of the page shows inactive and low usage customers, which we believe depicts a level of empty homes in our service territory.

Since year end 2007, the number of inactive accounts has increased by 53,000 to about 298,000.

However, both the number of inactive and the number of low usage customers have been declining since the fourth quarter of 2009.

The chart on the bottom right depicts the level of new housing starts for single-family homes in FPL service territory.

Housing starts are a fairly good leading indicator of additions to our customer base, roughly a year out.

As we have discussed, much of Florida's economic woes have been directly tied to the housing industry.

After a prolonged period of decline, we may be starting to see a bit of a bottoming here, but it is clearly too early to say that housing starts in our service territory are improving.

The tables shown here summarize the earnings drivers for Florida Power & Light for the just completed quarter.

In total, earnings increased by $0.16 per share, driven primarily by weather and the increase in base revenues related to West County Energy Center's units one and two, as well as an increase in clause revenues from our solar investments in nuclear up rates.

These results were partially offset by slightly higher O&M costs and lower AFUDC, which are due primarily to the commissioning of West County Energy Center units one and two.

Earlier this month, Florida Power & Light filed a motion with the Florida Public Service Commission for reconsideration and clarification of its final order in our rate proceeding.

The motion requests correction to specific computational errors on certain issues.

In addition, the motion requests clarification of an inconsistency in the computation of the test year depreciation expense used in setting FPL's base rates.

Regardless of whether the commission ultimately concludes that revenue requirements should be higher or lower, FPL's motion requested its commission resolve this through an adjustment to depreciation which would keep rates and revenues the same as approved in January and implemented in March.

Approval of this approach will ensure that FPL's reconsideration and clarification request are addressed with no change in rates charged to customers, and no change in revenues to FPL.

At this point, the commission and its staff have not indicated when our motion for reconsideration will be addressed.

Let me now turn to NextEra Energy Resources.

Since the first quarter of 2009 we have added 1,360 megawatts of new wind, and continue to be the nation's leading producer of wind power.

We are proud of this achievement considering the difficult market conditions for power purchase agreements.

We will have more to say about this in a couple of minutes.

During the first quarter of 2010 we received $314 million of the approximate $470 million we expect to receive in cash from the convertible investment tax credits related to our 2009 wind development efforts.

Recall that we already received $100 million in 2009.

Regarding our 2010 convertible ITC elections, we concluded during the first quarter that it was probable that we would elect to take convertible ITCs on 600 megawatts of specific new winds projects we expect to be completed during 2010.

As a reminder, production tax credits recorded in earnings as we produce power during the first ten years of commercial operations.

The earnings recognition of convertible investment tax credits is a bit more complicated.

Roughly 25% of the earnings from convertible ITCs is relate to a deferred tax benefit and is recorded up front in the year a project is placed in service.

The remaining 75% is recorded over the life of the project to reduce depreciation expense.

GAAP accounting requires us to estimate this up front deferred tax benefit and record the benefit throughout the year to levelize our effective income tax rate.

As conditions warrant during the year, we may elect to take more ITCs in 2010 than the current 600 megawatts we have estimated and recorded.

On the financing front we are pleased that we were able to issue approximately $560 million of project finance debt on roughly 458 megawatts of wind energy projects since the beginning of the year.

These transactions were well-received by the investment community, and are a sign that the project finance market continues to improve, and generally remains accessible to NextEra Energy Resources' projects.

There were no significant changes to our hedge gross margin during the quarter, and we continue to be well hedged in 2010 and 2011 against the impacts of natural gas price movements.

We will provide the gross margin hedging detail and additional information on our NextEra Energy Resources assets next week at the investor conference.

NextEra Energy Resources reported first quarter 2010 GAAP earnings of $367 million, or $0.89 per share, compared with $228 million or $0.56 per share in the prior period results.

Adjusted earnings for the same period, which exclude the effect of nonqualifying hedges and net OTTI, were $196 million compared to $228 million.

The equivalent per share contributions were $0.47 and $0.56 respectively.

These amounts have been adjusted to reflect a retrospective application of a change in methodology for allocating interest and shared costs to affiliates.

NextEra Energy Resources' first quarter adjusted EPS declined $0.09 from last year's comparable quarter.

New wind investments contributed $0.03 per share.

Because our estimate for CITC elections in 2010 is similar to what it was at this time last year, there is little variance in our adjusted earnings this quarter due to our CITC elections.

The existing asset portfolio declined $0.08 relative to the prior year.

Our existing winds assets declined $0.12, $0.09 of which can be attributed to the poor wind resource we already discussed.

In the first quarter of 2009, we had realized a state investment tax credit on some of our wind projects that contributed $0.04 to last year's results without a corresponding benefit this year.

Our NEPOOL merchant assets were up $0.03, owing primarily to higher price hedges at Seabrook--at the Seabrook nuclear facility, but that was largely offset by the results of our Texas merchant gas assets.

Wholesale marketing and trading activities increased by $0.03 per share.

Substantially, all of this increase can be attributed to the sale of a power supply contract that we had entered into in 2009.

As a result of the sale, we realized nearly all of the value of the contract in the first quarter instead of ratably during the course of 2010.

Although the first quarter results were higher than we had previously expected due to the sale, full year 2010 results are largely unaffected.

We entered into the restructuring agreement as we felt it allowed us to maximize the value of the opportunity for shareholders, while reducing future load volatility risk.

Asset sales contributed $0.02, $0.03 of which is due to the sale of our 40% limited partnership interest and a 27 megawatt waste energy facility located in Pennsylvania.

This was partially offset by the $0.01 gain in last year's first quarter, from the sale of wind development rights.

Also during the first quarter of 2009, we made an investment in our Canadian wind operations that allowed to us reduce previously deferred income taxes.

The absence of this benefit in 2010 reduced earnings by $0.04.

All other factors were a negative $0.05.

The other category includes interest expense, corporate G&A, shared dilution, and rounding differences.

No one item is particularly notable.

I would like to provide a brief update on our wind development plans for 2010.

Since the fall of 2008, our new construction plans had been concentrating on developing wind plants where we believe there is a high likelihood that we would sell the plants power under long term power purchase agreements.

Most recently, during the fourth quarter earnings conference call, I stated that the goal of adding 1,000 megawatts of new wind in 2010 with power purchase agreements was not a slam dunk.

The combination of lower power prices, the economic downturn, and continued uncertainty regarding Federal climate legislation, or a renewable portfolio standard, is clearly adding to the industry's development challenges.

In the last couple of weeks, we have reevaluated our development pipeline for 2010, and at this point, believe that our wind build additions will be between 600 and 850 megawatts in 2010.

This obviously does not include any wind assets that we could add through purchase transactions.

Although we continue to look at a number of asset purchase transactions, there is obviously no assurance that we will be able to transact the prices that we would consider to be reasonable.

Longer term, we continue to be optimistic about developing and owning wind and solar energy plants, and we do not believe that the current development climate is indicative of longer term trends.

We will discuss more details of our longer term development goals at our upcoming investor conference.

To summarize the 2010 first quarter, on an adjusted basis, FPL contributed $0.47, NextEra Energy Resources also contributed $0.47.

That is a total of $0.94 compared to $0.90 in the 2009 first quarter, or about a 4% increase year over year.

For 2010, we continue to believe that adjusted EPS expectations within a range of $425 million and $465 million are reasonable.

Currently, we are planning on providing longer term earnings expectations at our investor meeting next week.

With that, I'll turn the call over to the conference moderator for any questions.

[Operator Instructions] We will take our first question from Daniel Eggers, with Credit Suisse.

Good morning.

Good morning.

Armando, can you remind us how much solar is embedded in NextEra's CapEx plan and earnings contribution for this year?

Yes, I could remind you although I've never actually given that number, Dan, and we will have an update, Dan, on solar next week.

What we have said, though, last time we talked about it, which I believe was the third quarter of 2009, is that our solar development pipeline for 2009 and 2010 was a range -- for 2010 and 2011 was a range of between 50 and 100 megawatts.

And then we also gave a 12 and 13 pipeline.

I don't have the numbers in front of me right now, but I think the bottom end of that number was around 200 megawatts and maybe upwards of about 500 megawatts.

Then on the pipeline for this year, the 600 megawatts ,you guys are confident on the convertible ITCs, do you have PPAs for those projects at this point in time?

We don't, Dan.

As I've discussed before, most of the -- most of the wind projects that we begin construction on, and it's not just the ones over the last couple of years, but if you go back through our history we do not have power purchase agreements when we actually begin construction.

We evaluate the market.

We start out with somewhere between ten, 15, 20 projects in the market.

We slot those in, depending on where we believe it's the most likely that we can get longer term customers, we slot those projects in.

And then we work towards getting a long-term power agreement.

Many of our projects, after they complete construction, do not have power purchase agreement.

But our team has done an excellent job of being able evaluate the market and get us comfortable that a short period of time after construction we will have a power purchase agreement and that clearly has been our history during 2008 and 2009, which are two of the worst in the industry.

Okay, I'm sure we're going to talk about this a lot more next week.

One other question, can you just --

Dan, just to add, we have roughly half of that 600 megawatts already under contract or with a contract that will be signed in the next 90 days or so.

And so, I think the real question is, the real point is, as Armando said, we have historically not always had contracts on the projects that we started, oftentimes we do and oftentimes we don't and I think if you go back and you look at the projects that we did last year that we were at about the same position in terms of the percent that had contracts signed as a percent of the total megawatts we ended up building at this point last year as we are this year.

It's just a lower number last year given some of the market challenges that Armando laid out.

One more, on the regulatory environment right now with the legislature and the commissioners, can you just walk us through the time line for a potential decision on these commissioners or another set of commissioners and how we should watch that play out this year?

Dan, there's not much that I'm going to be able to say.

The legislature is going to hopefully wrap up at the end of the week.

So we're all going to know.

As I tell my kids, a date is coming whether you want it or not.

Clearly, there's a lot of important things that the legislatures are having to deal with this year.

Including some of the PSC appointments.

Including the budget.

Including what's going on with renewable energy or potential renewable energy legislation here in the state.

We will have an update on all of those items next week and really to speculate on what could happen and how it could happen before Friday at midnight of this week is not helpful.

So, next week we plan on providing a full legislative update and also an update as to what's going on with our public service commission.

Great.

Thank you, guys.

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

Good morning, guys.

Good morning.

With the (inaudible) 2011 hedging, has it changed all that much from the Q4?

I didn't see the slide.

No, we didn't--Paul, we didn't provide the slide this time only because we wanted to do a slimmed down version what have we generally do, because we are working on also on the presentations that we will give to you and others next week.

So I did say in my remarks that there is no real significant changes in our existing assets hedging from last quarter to this quarter.

So we'll provide it next week with some additional information that you and others have requested in the past on our assets.

Okay.

Then the long-term growth rate on the wind side, it sounds like you guys still pretty much expect that?

It's just going to be lower this year because of the market conditions and what have you that we see.

You guys pretty much have a similar outlook that you had previously, or have things changed with the commodities cycle and other things?

Actually I didn't update that today, and I wasn't planning on it.

if you'll recall, the last update that we gave, and it wasn't necessarily long-term but it was midterm, during the fourth quarter earnings call I said that adding 1,000 megawatts this year and over the next couple of years was not a slam dunk.

That's the last update that we've given.

We are planning to give longer term wind development and solar development guidance next week.

I did say today that we remain optimistic about long-term development of wind and solar energy plants and that what we are currently seeing in the market we believe is not indicative of longer term trends.

Really the reduction today for 2010, we take the first couple of months of the year to review our projects so we can slot them in for construction.

And as we are doing that this year, with no what I'll call PTC or CITC cliff at the end of the year, we have an extra, pick a number, 250 megawatts of projects that we could build this year, or that maybe we could build those same projects next year and feel more comfortable about waiting a little bit, we'll do that.

I mean, there's nothing that is pushing us to get every single project done by 12/31 of this year.

Okay.

Great, guys.

I will try to control myself from asking about the--what's going to happen next week, but on the motion for reconsideration, my recollection was that there were some accounting changes.

I think, on depreciation, what have you, that might benefit net income.

Could you just review that a little bit and how that figures into 2010 guidance?

Yeah, actually, the motion for reconsideration that we filed as we have proposed would have no changes in the revenue requirements that the commission approved in January and would also not affect our earnings and net income at Florida Power & Light Company.

Now, the commission may choose to--certainly to do something else including increasing our revenue requirements for some of the errors that we talked about.

But our proposal was to leave the rates the same and for the earnings of Florida Power & Light Company to remain as we had previously calculated them.

So if they don't accept the motion, the technical changes, it doesn't have an impact on earnings one way or the other?

Yes, I can't speculate, Paul, on exactly what all of the alternatives are, and I'm not sure that it's helpful to speculate on all the alternatives.

What I can say is that we feel comfortable that what we have proposed to the commission, which, again, are errors that go in our favor and then an inconsistency with the amount of depreciation expense that might have to be recorded, but what we have proposed would actually be net no difference to the rates that customers are paying and no difference to the net income or the earnings that we would have.

Okay.

Great.

Thanks so much.

Our next question comes from Jonathan Arnold with Deutsche Bank.

Good morning, guys.

Good morning, Jonathan.

Could I ask a question in terms of the--both the 2010 wind billed and also your--how you see the business evolving?

Is there any shift in terms of your geographic focus given some of the comments you made about your plans are going to have near term issues in the market, et cetera?

Jonathan, let me address that.

I think there's been a lot of discussion around the geographic diversity of our wind development over the last several years.

For the last ten years, we have developed projects where we felt like you had a good market and good risk adjusted returns.

And, that is our approach this year, and, going forward, is no different than what it's been for the last decade.

I think you will see some--we are going to lay out next week more detail on the geographic diversity of what we're developing for 2010 and 2011.

All you have to do is go back and look at the projects that we built in '09, to look at the number of states we developed in '09, and the fact that we were just awarded megawatts in Canada to know that we're--we are building projects where the market is.

And, I think you will see more on that next week, but I'm very comfortable with the geographic diversity of our portfolio.

We have a really--we go where it makes sense to build wind for both our customers and risk adjusted returns and I think--I will leave it at that because we are going to talk more about it next week, but I think that you'll see more next week.

If I may on the--you talked about the timing of getting PPAs.

Could you just remind--I don't know, I'm sure you've disclosed this before, but where you got to in terms of PPAs on the 2009 projects.

Jonathan, we actually haven't disclosed before and I certainly don't want to--that's a positive, very positive point that we wanted to talk about next week.

So, let me just say that I think that the investors would be comfortable knowing that a significant majority of the projects that we have put in place in 2008 and 2009, starting with the financial crisis which really was our third quarter conference call of 2008, that a significant majority of those projects are under power purchase agreement at this time.

We'll have the numbers for you next week.

I knew that was an important question that might come up today and I have the numbers but I -- let me just wait until next week.

All right.

Thank you.

(Operator Instructions) We will take our next question from Paul Ridzon with KeyBanc.

Good morning.

On slide 12, where you talk about taking the benefits of the ITCs for 600 megawatts.

What was the financial impact of that in the quarter?

Roughly $14 million, which is roughly the same as what it was in the first quarter of 2009.

That's why in my remarks today I said that our election of taking convertible ITC this quarter for about 600 megawatts really had no significant effect on a comparable basis.

And you indicated that your expectations for growth at NewEra were--had not changed because of the accounting change.

Is that imply that the overall growth of the company is unchanged?

Yeah, that's right, and just to clear it up, there is no accounting change.

Up to this period at NextEra Energy Resources we had provided disclosure based on a deemed capital structure for NextEra Energy Resources which was 100% debt for projects under development, 50% debt for projects that were completed.

And that's the segment disclosure for GAAP purposes that we had provided.

And as I said today, really our success in the project finance market over the last decade or so have shown that we can successfully leverage NextEra Energy Resources more than--on a net basis, more than the numbers that I gave you.

At the same time, not affecting our consolidated credit metrics which is something that is very, very important to us and how we look at the businesses--the business as a whole.

So, during the quarter--actually we started looking at it late last year, we decided that it would make more sense to shift the methodology a little bit from that 50/50 and 100 to what we talked about before to our current methodology.

And again, we give you the details in the quarterly earnings statement.

I can't remember which page it is.

Right now that means it's roughly a 70% leveraged capital structure for NextEra Energy Resources.

So the fact that the earnings are going down, but ROE is going up, is all just about capital structure.

That's correct.

That means proportionately less equity for the lower earnings.

That's right.

And again we do that, NextEra Energy Resources doesn't provide separate financial statements, but we do provide segment financial statements in the--in our SEC filings.

And that's where you'll see the change there, and you'll see the change on a go forward basis in our investor presentations.

And the same--the same growth on a lower earnings point isn't implicitly implying lower overall earnings growth or is it just --

No, no, actually, if you look at--I knew that would be a question so we provided that slide, and I'm trying to remember what slide it is -- it's slide number five.

And you can see that the earnings growth both under the old method and under the new method is virtually the same.

Thank you very much.

Okay.

We will take our next question from Brian Chin with Citi.

Hi, just a quick one and I apologize if I missed it somewhere in the disclosures.

Is the shares outstanding assumption in the cost guidance also remaining constant?

Brian, can you just repeat the question?

Has the shares outstanding assumption in your guidance changed or does that remain the same as well?

Has--the shares outstanding guidance in our assumptions from the fourth quarter of '09 to the first quarter of 2010 has not changed.

Does that answer your question?

That's it.

Okay.

We will take our next question from Reza Hatefi with Decade Capital.

Thank you very much.

Are you--you mentioned providing some sort of forward financial projections.

Are you going to give 2011 earnings guidance during the analyst day?

Are we going to give what earnings guidance, I'm sorry.

2011 earnings guidance.

We are going to provide longer term earnings guidance.

We may or may not provide 2010 guidance -- I'm sorry -- 2011 guidance at this point.

When you say longer term, is that a refreshed earnings (inaudible), or is that something else that you--.

Yes.

Earnings (inaudible).

Okay.

Yes.

Just lastly, could you tell us what the earnings contributions was in the previous quarters from trading and marketing?

On a comparable basis it was a $0.03 increase which is roughly $12 million to $13 million.

How about just a total number for the quarter, the contribution on the quarter?

I'm sorry.

We do not provide that separately.

Okay.

Thank you very much.

We will take our final question from Phyllis Gray with Dwight Asset Management.

Good morning.

Good morning.

Would you please go over the decrease in cash from operations, quarter over quarter?

The most significant piece of that decrease actually has to do with Florida Power & Lights fuel clause.

So, during 2009, we recovered more under the fuel clause than our actual expenses.

That clause gets chewed up every year, and so therefore during 2010, we are giving back some of that cash that we recovered in 2009.

I don't remember the exact number.

It's $300 and some odd million, though, and that's the significant decrease in cash flows.

And it will be--again, it will be updated at the end of this year on a go forward basis.

And it's a one time decrease.

So is that--is your expected refund all recorded in the first quarter.

It was this year because the Florida Public Service Commission asked us to give back--instead of giving the fuel clause money overall all of 2010, it asked us to give that back in January of this year.

Thank you.

And that does conclude today's question and answer session.

I would like, now--let's turn the conference back to Rebecca Kujawa for additional and closing comments.

Thank you, Mike, and that you all for joining us today.

We look forward to speaking with you next week at our investor conference.

As a reminder the event will be web cast.

Thank you.

That does conclude today's conference.

We thank you for your participation.