ITC Holdings Reports Increased First Quarter 2011 Results

NOVI, Mich., April 27, 2011 /PRNewswire/ --

Highlights

• Net income for the first quarter of $42.0 million, or $0.81 per diluted common share
• Capital investments of $128.9 million for the three months ended March 31, 2011
• Reaffirmed 2011 earnings per share guidance of $3.20 to $3.30 per share and capital expenditure guidance of $560 to $640 million

ITC Holdings Corp. (NYSE: ITC) today announced its first quarter results for the period ended March 31, 2011.  Net income for the quarter was $42.0 million, or $0.81 per diluted common share, compared to $34.2 million, or $0.67 per diluted common share for the first quarter of 2010.  

For the three months ended March 31, 2011, ITC invested $128.9 million in capital projects at its operating companies, including $14.6 million, $33.7 million, $67.7 million and $12.9 million at ITCTransmission, METC, ITC Midwest and ITC Great Plains, respectively.

"We remain very pleased with our overall performance and execution," said Joseph L. Welch, chairman, president and CEO of ITC. "During the first quarter of 2011, we made solid progress in advancing our capital investment program that is expected to deliver value to both our customers and shareholders.  In addition, we remain encouraged by the continued positive momentum around the regulatory and policy reforms critical to supporting regional transmission expansion, which further underscores our confidence in our long-term capital investment plans."  

Reported net income for the first quarter of 2011 increased $7.8 million, or $0.14 per diluted common share, compared to the same period in 2010.  Key drivers that contributed to year-over-year variances for the quarter include:

• Higher net income due to higher rate base at all operating companies.
• An increase in net income of $1.3 million due to the recognition of a regulatory asset associated with the Kansas V-Plan project.
• These increases in net income for the quarter were partially offset by higher interest expense resulting from higher borrowing levels to finance capital expenditures.  

EPS and Capital Expenditure Guidance

For 2011, ITC is reaffirming its full year earnings per share guidance of $3.20 to $3.30.  Capital investment guidance for 2011 is also being maintained at $560 to $640 million, which includes $60 to $75 million, $155 to $170 million, $225 to $250 million and $120 to $145 million for ITCTransmission, METC, ITC Midwest and ITC Great Plains, respectively.

First Quarter 2011 Financial Results Detail

ITC's operating revenues for the first quarter increased to $179.4 million from $161.3 million for the same period last year.  This increase was primarily due to higher network revenues attributable to higher rate base at our regulated operating subsidiaries and higher recoverable expenses associated with operation and maintenance expenses.  In addition, the increase resulted from higher regional cost sharing revenues due primarily to additional capital projects that have been identified by the Midwest ISO and the Southwest Power Pool as eligible for regional cost sharing.  These increases in revenues were partially offset by lower point-to-point revenues resulting from a decrease in scheduled transmission flow over our transmission systems.  

Operation and maintenance expenses of $26.3 million were $2.6 million higher during the first quarter of 2011 compared to the same period in 2010.  This increase was primarily due to higher vehicle and equipment expenses, due in part to higher fuel costs, as well as higher field operations expense and additional field relay maintenance activity.

General and administrative (G&A) expenses of $16.6 million were $1.2 million lower compared to the same period in 2010.  This decrease was primarily due to the recognition of a regulatory asset associated with development and pre-construction costs for the Kansas V-Plan project which reduced G&A expenses by $1.9 million.  This decrease was partially offset by higher development expenses in first quarter of 2011, largely associated with the Kansas V-Plan project, prior to the recognition of the regulatory asset.

Depreciation and amortization expenses of $23.1 million increased by $1.0 million during the first quarter of 2011 compared to the same period in 2010.  This increase was primarily due to a higher depreciable asset base resulting from property, plant and equipment additions.  

Taxes other than income taxes of $13.6 million were $1.3 million higher for the first quarter of 2011 compared to the same period in 2010.  This increase was due to 2010 capital additions at our regulated operating subsidiaries, which are included in the tax base for 2011 personal property taxes.

Interest expense of $36.3 million for the first quarter of 2011 increased $1.2 million compared to the same period in 2010 due primarily to higher borrowing levels to finance capital expenditures.  

The effective income tax rate for the first quarter of 2011 was 37.1 percent compared to 36.3 percent for the same period last year.

First Quarter Conference Call

ITC will conduct a conference call to discuss the first quarter results on Thursday, April 28, 2011 at 11 a.m. Eastern time.  Joseph L. Welch, chairman, president and CEO, will provide a business overview, and Cameron M. Bready, executive vice president, treasurer and CFO, will discuss the financial results.  Individuals wishing to participate in the conference call can dial toll-free 877-644-1296 (domestic) or 914-495-8555 (international); there is no passcode.  A listen-only live webcast of the conference call, including accompanying slides and the earnings release, will be available on the company's investor information page at http://investor.itc-holdings.com/events.cfm.  The conference call replay, available through Tuesday, May 3, 2011, can be accessed by dialing toll-free 800-642-1687 (domestic) or 706-645-9291 (international), passcode 58450121. The webcast will also be archived on the ITC website at http://investor.itc-holdings.com/events.cfm.

Other Available Information

More detail about the 2011 first quarter results may be found in ITC's Form 10-Q filing. Once filed with the Securities and Exchange Commission, an electronic copy of our 10-Q can be found at our website, http://investor.itc-holdings.com. Written copies can also be made available by contacting us either through our website or the phone numbers below.

About ITC Holdings Corp.

ITC Holdings Corp. (NYSE: ITC) invests in the electricity transmission grid to improve electric reliability, expand access to markets, lower the overall cost of delivered energy and allow new generating resources to interconnect to its transmission systems. The largest independent electricity transmission company in the country, ITC currently operates high-voltage transmission systems and assets in Michigan's Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri and Kansas, serving a combined peak load in excess of 25,000 megawatts through its regulated operating subsidiaries, ITCTransmission, Michigan Electric Transmission Company (METC), ITC Midwest and ITC Great Plains. ITC also focuses on further expansion in areas where significant transmission system improvements are needed through ITC Grid Development and its subsidiaries.  For more information, please visit: http://www.itc-holdings.com. (itc-ITC)

Safe Harbor Statement

This press release contains certain statements that describe our management's beliefs concerning future business conditions, plans and prospects, growth opportunities and the outlook for our business and the electricity transmission industry based upon information currently available. Such statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Wherever possible, we have identified these forward-looking statements by words such as "will," "may," "anticipates," "believes," "intends," "estimates," "expects," "projects" and similar phrases. These forward-looking statements are based upon assumptions our management believes are reasonable.  Such forward looking statements are subject to risks and uncertainties which could cause our actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements, including, among others, the risks and uncertainties disclosed in our annual report on Form 10-K and our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time.

Because our forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different and any or all of our forward-looking statements may turn out to be wrong.  Forward-looking statements speak only as of the date made and can be affected by assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in our discussion in this release and in our annual and quarterly reports will be important in determining future results. Consequently, we cannot assure you that our expectations or forecasts expressed in such forward-looking statements will be achieved. Actual future results may vary materially. Except as required by law, we undertake no obligation to publicly update any of our forward-looking or other statements, whether as a result of new information, future events, or otherwise.

SOURCE ITC Holdings Corp.