ITC Holdings Corp. ( ITC)

Annual EEI Financial Conference Call

November 8, 2011 10:30 am ET

Executives

Cameron Bready - EVP and CFO

Analysts

Presentation

Cameron Bready

Good morning, everyone, and welcome to ITC Holdings presentation for today. My name is Cameron Bready, Executive Vice President and Chief Financial Officer for ITC Holdings Corporation.

Today, I'd like to make a little less formal perhaps than usual. The timing for this is a little awkward in the sense that we have scheduled our Investor Day for December 5. So I don't have a tremendous amount of new information to tell you on today.

I will go through my prepared remarks relatively quickly and then leave ample time hopefully at the end for whatever questions the audience may have as relates to our business strategy, performance and outlook, be happy to cover whatever might be on your mind as relates to company.

So let me first say thank you for your interest in our company. We do very much appreciate it. I trust that everyone is having a good conference so far and is enjoying all the festivities to the extent you can. But I would like to say thank you for coming as I am the conference chair this year. We do appreciate everyone's participation and look forward to seeing you next year and many years to come.

As a reminder, when we do get to the Q&A part of the discussion, if you could please just wait for the microphone to be provided to you as we are webcasting this and I do want to ensure that the questions can be heard by the audience participating by webcast.

As I mentioned before, my comments today will be fairly brief, but I will just quickly run through the materials we have put together and just make sure everybody has a good understanding of who ITC is and how we think about our business, our strategy and our outlook.

So first of all, we are the only pure play, fully regulated, independent transmission publicly-traded entity in the country. And we think our transmission-only business model provides us a number of advantages.

First and foremost, we have a single regulator as it relates to the economics of the business, and we believe that's attractive from an investor perspective, because you don't have to keep track of what state regulator acts are in a particular state day-in and day-out. You have one regulator. That's FERC as it relates to the economics of the business.

FERC policy doesn't tend to shift dramatically day-in and day-out. So in terms of understanding our business and understanding the regulatory climate for our business from an investor perspective, we think it's a pretty attractive opportunity to have a single regulated entity like ourselves that has the diversity of asset based opportunity that we do.

We do have and do benefit from a FERC policy environment that continues to incentivize transmission investment in U.S. I'll talk a little bit more about why that is in a few moments. But certainly as it relates to the returns we're able to achieve out of this business, the regulatory construct that we have as being a transmission-only utility, we believe provides a very attractive platform to create value for shareholders. Well investing in transmission infrastructure that provides tremendous benefits to customers.

Our business model is really relatively straightforward. We have existing utility operating companies that we manage. And we have a development platform that we have established over the course of the last, call it, five years that looks to find opportunities for us to extend our infrastructure, our capabilities into new markets and through new opportunities to invest in transmission infrastructure.

And this might be large regional transmission projects that span multiple states or numbers of miles within a state. And in other markets, this may be participating in the build-out of new reliability projects, smaller activities where there is a need or where there hasn't been that by the other transmission owners within a particular market.

As we think about our strategy, it's relatively straightforward. First of all, we are first and foremost an operator of transmission systems. We own about 15,000 miles of transmission assets today. We operate in five different states, and we serve about 25,000 megawatts of peak loads. We have a relatively large transmission system depending on how you measure us, whether it's miles or load served or net transmission PP&E. We're somewhere between the seventh and ninth largest transmission owning company in the U.S.

As it relates to our operating business, our goal is to be a best-in-class transmission provider. And those of you that have heard me present or heard me speak before, you will probably remember that I like to sort of characterize this as we only do transmission so we better be good at it. And from an operations perspective, our goal is to be a best-in-class transmission provider.

We think by disaggregating transmission our of vertically-integrated utility, you get more focus on transmission investment, you get better operating protocols, you get better maintenance for the calls; and overall, you get better performance out of the transmission system.

So as we think about our operating companies, our goal is to be best-in-class. And that's across our maintenance practices, reliability, performance or able to garner from the system, safety for our employees as well as ultimately the financial rewards that our shareholders are able to achieve from those investments.

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