Good day everyone, welcome to the ITC Holdings Corp fourth quarter and year-end 2007 financial results conference call. Today's call is being recorded. At this time for opening remarks and introductions I'd like to turn the call over to Miss Pat Wenzel. Please go ahead ma'am.

Good morning and thank you for joining us for ITC Holdings 2007 fourth quarter earnings conference call. Today we will be discussing our fourth quarter and year-end results. Joining me on today's call are Joseph Welch, President and CEO of ITC Holdings and Edward Rahill, our Senior Vice President and CFO. This morning we issued a press release summarizing our fourth quarter and full year results. We expect to file our form 10-K with the Securities and Exchange Commission tomorrow. Before we begin, I would like to remind everyone of the cautionary language contained in the following 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 forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of today. While we believe that these statements and their underlying assumptions are reasonable, investors should know that actual results may differ from our projections and expectations, because they are based on current facts and are subject to risks and uncertainties. A discussion of the risks inherent in our business that could cause these differences may be found in certain documents filed with the SEC such as our form 10-K, expected to be filed tomorrow, our other periodic reports filed on form 10-Q and 10-K, as well as our other SEC filings. You should consider these risk factors when considering our forward-looking statements. We disclaim any obligations to update or alter our forward-looking statements except as required by law. I will now turn the call over to Joe.

Thanks Pat. And thanks to everyone who's joined us on the call today. Tomorrow, ITC celebrates five years since we began operations. Since then we've experienced tremendous growth based on any metric you consider whether it's megawatts delivered, miles of transmission lines, number of communities served, number of substations, interconnections, poles and towers. For example, including the impact of the acquisition of the transmission assets from Interstate Power and Light Company, or IP&L, in December, our miles of transmission have increased by 252%, our peak load has increased by 99%, the number of communities served increased from 430 to 2,164, an increase of 430% and the number of square miles in our footprint has increased by 958%. We were operating in one state and now we operate in five separate state jurisdictions. We went public in 2005 and became Sarbanes and Oxley compliant, well ahead of required timing by the SEC. We went from 38 employees to over 300. Our targeted acquisitions have resulted in efficiencies. While this growth has resulted in increased absolute costs, these costs are spread over a much larger base yielding lower unit costs for customers. Additionally, our growth has resulted in significant progress toward our mission of investing in the transmission grid to improve electric power quality, reliability, to enable the entrance of renewable resources and providing customers equal access to wholesale power markets. 2007 was another successful year in furthering our vision. Our growth provides benefits now and in the future for customers and our shareholders. Closing on the acquisition of transmission assets from IP&L in portions of Iowa, Minnesota, Illinois and Missouri was a significant event in 2007. Our diligent efforts to work through the regulatory process which required the approval of four state utility commissions, the FERC and Department of Justice, we…

Thanks Joe. For the fourth quarter in 2007 ITC reported a net income of $15.6 million or $0.36 per diluted share. This compares with net income of $3.6 million of $0.08 per diluted share for the fourth quarter of 2006. As Joe mentioned, ITC's reported full year net income of $73.3 million or $1.68 per diluted share compared to a net income of $33.2 million or $0.92 per diluted share in 2006. Diluted earnings per share in the fourth quarter and for the full year were higher than previously expected due to the timing of expenses related to the permitted financing to fund the acquisition of IPL's transmission assets, also due to lower transaction related expenses, and the elimination of uncertainty regarding the impact of ITC's Midwest operations in 2007 and lower than previously anticipated development related expenses in the fourth quarter. Additionally, when we confirmed our guidance in January, we were preparing to complete a secondary equity offering to refinance the bridge loan used to purchase IPL's assets in 2006. We had not yet closed our books or completed our audit, so we remained conservative in our earnings guidance based on the advice of our underwriters. Operating revenues of $109.4 million and $426.2 million for the fourth quarter and full year 2007 respectively increased $36.3 million and $202.6 million over the comparable period for 2006. These increases for both the fourth quarter and full year were driven by several factors such as the METC acquisition in October 2006 and the ITC Midwest acquisition which was completed on December 20, 2007, increased network rates in 2007 at ITC's transmission, increased network loads at both ITCTransmission and METC, and the Attachment O revenue accrual. Increases in operations and maintenance expenses, or O&M, in the fourth quarter and in the full year…

Thanks Ed. The results of our investments in the transmission infrastructure provide benefits to both customers and businesses. We are building the infrastructure and promoting policies focused on increasing reliability, facilitating access to renewable resources and providing equal access to the most efficient and cleanest power. 2007 was certainly a successful year in this regard. In between announcing the acquisition of IP&L's transmission assets in January and closing the acquisition in late December, we accomplished many other milestones during 2007. We fully integrated METC into ITC and on May 1, 2007, we successfully assumed independent operational control of the METC transmission system, establishing METC as a fully independent transmission company. This was an important step for ITC and is representative of the type of commitment, drive and focus that ITC and its employees and contractors have. Owning both transmission grids in Michigan's Lower Peninsula was a strategic move that creates efficiencies for joint planning and operations. The acquisition of METC will enable ITC to fix the cross state problems that precipitated the blackout in August 2003. In September, ITC in collaboration with American Electric Power, or AEP, released the findings of a joint study evaluating the feasibility and benefits of building a new 765 kilovolt transmission network across Michigan's Southern Lower Peninsula into Ohio. The proposed 700 megawatt network would connect to existing AEP high-voltage systems in the southwest corner of Michigan and in Ohio, and establish a regional transmission corridor capable of improving electric reliability, relieving power congestion, enhancing market access to the grid and aiding in more efficient distribution of current generation. The network would be the ultimate in green energy through the significant reduction in line losses and by facilitating the development of renewable resources. The study concludes that the construction of the 765-kV transmission network would…

(Operator instructions) We'll go first to Samantha Dennison, with Credit Suisse. Samantha Dennison – Credit Suisse: Good morning. Could you give a little bit of color around the MPSC's recent denial of 150 million projects in Michigan? Is this included in your 5-year CapEx plan or the larger 510 billion pipeline that you've spoken about, and what are your options for recourse?

No, it's not in that plan. The guidance in the capital programs that we've laid out for you does not include that. Further, as far as for the recourse: We don't talk publicly to people about what we're going to do and what our options are. I've learned very early, on in doing these calls, when I start to do that then I don't know who's on the other side of this phone and I've caused myself more problems for the company than I cared to be. Normally we like to give full disclosure on everything but we don't even know who's on the other end of the phone line out here. So we're going to pursue all of the options that we have available to us. Samantha Dennison – Credit Suisse: Fair enough. And I'm looking at your 2007 CapEx. It looked like you trended about $15 million above your guidance. Was that increase really related to accelerating CapEx or should we think about it more as incremental spend toward 5-year plans you've already laid out?

Actually what that was is that, like we've had in years past, when we start to work in one region and do some work we come on some items that probably are not in good condition. And so we look out and see if there's another project in the future which was going to upgrade or fix that. And if that's the case, we pull those projects forward and take them out of future years and do it, because we can more efficiently do it now than come back again later and go through the process again. Samantha Dennison – Credit Suisse: Okay great. And then related to your X-Plan and V-Plan, have you guys given and CapEx guidance on what you might see those projects costing?

No again, that's one of those things where I've precluded all of our guys from giving any guidance numbers on these, because the thing I can tell you is that anytime we have a conversation with people they always want to know "well give me a typical, how much does it cost to build transmission per mile?" or "what's the price of the wire, or towers or anything?" I've learned that until the detailed engineering study on it is done, which then locks the price down, we don't like to give the numbers out, because, again, people listening on this phone use that later to come back and give us a lot of grief. Telling us how the costs have escalated or we're not controlling it. And the matter of fact is that we never did an engineering study on it in the first place, so there's no reason for us to do it. Samantha Dennison – Credit Suisse: Okay. Thanks very much guys.

We'll go next with Neal Kalton with Wachovia. Neil Kalton – Wachovia Capital Markets : Good morning. A question first on the sunflower coal plant in Kansas, that's just been going back and forth. What kind of impact does that have on, in terms of the project being completed, does it have an impact on your transmission plans in the state?

Well, I think originally that the coal plant was one of the drivers for looking at the line to start off with. However, since that time there's been a lot of development of wind in the same region for the same reasons. Transmission exists to connect generation to load, and while the coal plant I think was the original cause, now with the imposition of wind it looks like some of the causes are starting to shift. Neil Kalton – Wachovia Capital Markets : Do you think if that coal plant doesn't get done, does that push back the need for the V-Plan a couple of years, or will the timing not change?

The fact is that that's all part of the SPP process on how they do the planning and so they found the justification and need for the project, and so it's our commitment to build it. Neil Kalton – Wachovia Capital Markets : Okay, and then a follow-up question on the SPP regional tariffs on cost sharing, can you explain exactly how that works?

Well, I apologize for some of the jargon that we sometimes use. The two typical things that people talk about pricing is, one's called "license plate pricing", and the other one's "postage stamp". The license plate, just like when you buy a license plate in New York, it has one price and if you come to Michigan with the same car, and you try to buy a license plate for it in Michigan, you're going to get a different price. So when we talk about license plates that means whatever zone or region that is, it has a specific price, and customers there pay for all the transmission in that zone through that charging mechanism. When we talk about "postage stamp", just like a postage stamp, we pay a postage stamp and we can send the letter across town, across the state or across the country all for the same price. And what we talk about when we talk about transmission pricing or regional transmission pricing or postage stamp pricing is that everybody in the region pays for that transmission line that's being built by the same price. Neil Kalton – Wachovia Capital Markets : Okay.

And the best analogy as to why we have supported that and believe it is the right thing is that all the transmission that we're looking at today is being designed to facilitate regional markets, and is being designed to facilitate regional transactions. Very little local transmission is being built today. Especially once you get to 345,000 volts and above, you just cannot design it without know the interplay in multiple areas of the region. And we're very heartened that SPP has finally put their pricing together and really studied looking at the regional pricing model, because that's exactly the way that the interstate highway system was built and paid for. It was through one federal gas tax, the same regardless of where you're at. Neil Kalton – Wachovia Capital Markets : Right. And one last question, if I may. Do we know yet how the cost allocation is going to work for the Michigan 765 project?

We have been very blunt about this, regardless of how other people talk about it. We will not build the line unless there is a fair allocation from Michigan. That allocation that we are talking about is, again, a regional cost-sharing, just like SPP has done, with everybody in the region paying the same price for the transmission. That transmission line has huge regional value, not withstanding the fact that it brings a lot of value to the state of Michigan. To put the emphasis on the regional value, that that line does, is the one thing we know for sure. And had we had that line in place in August 14, 2003, there would have not been a blackout. The reason that that line is so critical is that there are huge power flows taking place every day and they are preventing power from flowing to the east, from the coal field, and it has huge regional value and so we are steadfast that we wont build the line until we get the cost allocations that are fair for everyone. Neil Kalton – Wachovia Capital Markets : Okay. Thank you.

We will take our next questions from Yiktat Fung with Zimmer Lucas Partners.

Good morning. First of all, I would just like to get more clarification on the $150 million project that the MPSC recently denied. It's not part of the five year CapEx plan and I'm wondering, does is fit into any of the other buckets that the company has talked about, either the $10 billion regional vision CapEx plan or any of those?

No. When we forecast out - when we give you our forecast for next year, we have the projects identified, and they are in the bucket. This project was going to be out in the years to come between 2011 and 2013. And what we have, when we get out to that forecasted years is that we know that we have things on the system to fix. This was one potential fix and there is money there to fix those projects, those specific things. But we have not done the detailed engineering or analysis as to, you know, that’s it. We clearly felt that this was the best project. We clearly have a reliability problem that needs to be fixed and addressed and, just like anything else there is a multitude of ways to do it. We felt that this was the best. I actually believe that when the price tag for all of the fixes it's going to come to take to fix that, people are going to want us to resurrect this project, but we will have to work through that process first.

I understand this is kind of sensitive issue but I was wondering if you could offer your interpretation of why the Michigan PSC denied the project at this point in time.

I'm just not going to do it.

Okay, that’s fine. Can you point us to the next milestone in getting the 765-kV line?

Well, I think that we have been clear. We thought that some time in the second quarter of this year we would be in a position to have the joint venture with AEP solidified, and we are still working towards that goal. And from there we start to have to go through the full vetted planning process. And based on everything that we are seeing today, that vetted planning process is going to be what it is. It’s a process!

Okay. And finally, I would just like to clarify the '08 guidance. You said it excludes future and one-time expenses. Does this include the transaction (dollars) and financing expenses that…

This is Ed. The $1.90-2.00 includes everything we are aware of. That was a phrase we put in there just to say that we are a dynamic company and that we reserve the right to take on projects or situations so the company might have the opportunity to grow. And so that could impact the $1.90-2.00. It was just a reference that from time to time, as the type of company we are, we may be taking on something that would result in an impact on earnings – it would be one time. A case in point, what if an acquisition came up? It was just a reference point to keep people aware of what - the $1.90-2.00 represents the core business.

So, it already includes the financing expenses related to the acquisition.

Yes it does.

Okay. Thank you very much

(Operator instructions) We will go next to Richard Leader with First Houston Capital

Good morning. Would you elaborate a little on your comment on acquisitions, just in terms, maybe somewhat theoretically, but are they available, is this part of your continuous management process of you company? Do they need to be contiguous to your present operations? And finally, just your thoughts, and again, this is probably very theoretical, but what are the financing arrangements the company has, given some of the uncertainty on Wall Street and the banking industry these days? Are acquisitions really a strategy in the current environment?

I'll see if I can remember all of them. First of all, acquisitions are a viable item in the current environment and in fact we look forward to doing them under the right set of circumstances. However, to be blunt, we are not actively pursuing or engaged in anything. If you ask me the question and I am involved, I can't tell you that I am, but I can tell you that I am not. And the fact is that we have has two acquisitions, back to back, and we have a lot of integration work that we are doing today and will continue to do throughout the year 2008. So from a management standpoint I'd just as soon have 2008 be the year we get the integration process of IP&L really on a good foundation and not try to jump into something. But having said that, if someone came in and wanted to talk to us tomorrow, I'd be the first person to stand in line and do that. As for the financing, and stuff like that, I'll give it to Ed.

Thank you, Joe. We were able to do a debt and equity offering last month that was very successful vis-a-vis the market. I define the success as that our interest rates were at or below our peer groups at the time and we have been over subscribed by multiples on both the debt and equity offerings. So that is evidence that Wall Street still is very much interested in financing any transactions that we can bring to the table.

Thanks a lot.

It appears that we have no further questions at this time. I would like to turn the call back over to Pat Wenzel for any additional or closing remarks.

This concludes the question-and-answer portion of our call. Before I end the call I would like to thank everyone who participated today. Anyone wishing to hear the conference call replay, available through March 6, should dial toll free 888-203-1112 domestic or 719-457-0820 international. The passcode is 2420038. The webcast of this event will also be archived on the ITC holdings website at https://investor.itc-holdings.com. Goodbye and have a great day.

Thank you. That does conclude today's call. We do appreciate your participation. You may disconnect at this time.