ITC Holdings Corp. (ITC)
Q1 2012 Earnings Call
April 25, 2012, 11:00 a.m. ET
Gretchen Holloway – Director of Investor Relations
Joseph Welch – President, Chief Executive Officer
Cameron Bready – Chief Financial Officer, Executive Vice President
Jonathan Arnold – Deutsche Bank
James Dobson – Wunderlich Securities
Neil Kalton – Wells Fargo
Kevin Cole – Credit Sussie
Previous Statements by ITC
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Good day ladies and gentlemen and welcome to ITC Holdings Corporation First Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder this conference call maybe recorded.
I would now like to turn the conference over to Ms. Gretchen Holloway. Ma’am you may begin.
Good morning everyone, and thank you for joining us for ITC’s 2012 first quarter earnings conference call. Joining me on today’s call are Joseph Welch, Chairman, President and CEO of ITC, and Cameron Bready, our Executive Vice President and CFO.
Last night, we issued a press release summarizing our results for the quarter ended March 31, 2012. We expect to file our Form 10-Q with the Securities and Exchange Commission today.
Before we begin, I would like to remind everyone of the cautionary language contained in the Safe Harbor statement. Certain statements made during today’s call that are not historical facts, such as those regarding our future plans, objectives and expected performance are considered forward-looking statements under Federal Securities Laws. While we believe these statements are reasonable, they are subject to various risks and uncertainties and actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC, such as our periodic reports on Forms 10-Q and 10-K and our other SEC filings. You should consider these risk factors when evaluating our forward-looking statements. Our forward-looking statements represent our outlook only as of today and we disclaim any obligation to update these statements, except as maybe required by law. A reconciliation of the non-GAAP financial measures discussed on today’s call is available on the Investor Relations page of our website.
In addition, on December 5, 2011, ITC and Entergy Corporation made an announcement regarding an intended transaction. Investors are encouraged to read the proxy statement and perspectives in its entirety regarding the proposed transaction as well as any other relevant documents when they become publicly available. These documents will contain important information about the proposed transaction. A free copy of the proxy statement and perspectives as well as other filings containing relevant information will be available without charge on the SEC website.
Copies of the proxy statement and perspectives and the filings with the SEC that will be incorporated by reference in the proxy statement and perspectives can also be obtained when available and without charge from ITC or Entergy.
Information regarding participants or persons who maybe to be deemed to be participants in the solicitation of proxies with respect to the proposed transaction is contained in ITC’s proxy statement for its most recent Annual Meeting and Entergy’s proxy statement for its most recent Annual Meeting, both of which are filed with the SEC.
I will now turn the call over to Joe Welch.
Thanks Gretchen and good morning everyone. Given our rather comprehensive update on our fourth quarter 2011 call just a couple of months ago, our prepared remarks for today will be brief and will be focused on the strategic and financial highlights for the quarter.
I’m once again pleased to share with your today solid operational and financial results for the first quarter of 2012, which positions us well to deliver on our full-year commitment and our long-term strategic plans.
These plans are largely focused on successful execution of our standalone five-year capital investment plan coupled with continuing to advance our previously announced transaction with Entergy through the approval process in a manner that maximizes the probability of a successful close of the transaction.
On the operational front, system performance for the first quarter of 2012 remained quite strong particularly attributable to the relatively mild winter, winter weather experienced across the Midwest.
While the weather implications were generally minimal for the quarter with actual load coming in close to our forecasted amount, the Midwest region did experience more frequent severe weather events including some destructive tornados within the region.
Fortunately, our systems sustain no direct hits and continued to perform well during these severe conditions. As we highlighted on our last call, our new standalone five-year plan for the 2012 to 2016 period is largely in line with our previous plan with identified investment requirements in our base operating system, network upgrades to support generator interconnections and for new transmission infrastructure through our development portfolio. The plan calls for a further significant ramp up in our annual capital investment levels in 2012, once again requiring the company to effectively adapt and execute on an expanding and more diversified capital investment plan while also furthering our goal of overall best-in-class performance of our systems.
Our investment plan within our base operating remains on track with and are progressing on schedule. In fact, in March, we announced that we have selected a Michigan company M.J. Electric of Iron Mountain to build the Thumb Loop Phase 1 line segment, which is 62 mile stretch or just under half of the total project mileage.
M.J. Electric’s selection was based on competitive biding process as well as their history of safety and successful project completion for ITC in this very specialized field. Awarding this contract was an important milestone in inventing the Thumb Loop project which is the largest single project we have undertaken and it’s a critical to supporting transmission upgrades in this region of Michigan.