Good day, ladies and gentlemen and welcome to the ITC Holdings Corp. Fourth Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host Ms. Gretchen Holloway. Please go ahead. Gretchen Holloway – Investor Relations: Good morning, everyone and thank you for joining us for ITC's 2011 fourth quarter and year end 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 fourth quarter and for the year ended December 31, 2011. 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…

(Operator Instructions) Our first question comes from Jonathan Arnold of Deutsche Bank. Please go ahead. Jonathan Arnold – Deutsche Bank: Good morning.

Good morning Jonathan. Jonathan Arnold – Deutsche Bank: I have a question on just the rate base forecast, if I look at where it is now for 2015, seems to be like roughly $400 million higher than the forecast was for 2015. I think you're now, excluding the CWIP fees, because you didn't use to show that. Could you give me some sense of what's driving rate base kind of higher, quicker than the prior plan?

Jonathan, this is Cameron. I think when I look at the numbers the 2015 rate base excluding what is in the category of CWIP now is roughly equivalent to what we had in the 2010 plan for the '11 to '15 timeframe. So, I don't think there is a material difference in what's actually in rate base in 2015 relative to what we showed last year. I think the difference is what's in CWIP which we have now included in that table as opposed to last year where it was just a pure rate base calculation. Jonathan Arnold – Deutsche Bank: It was 4.9 before and it looks like its sort of 4.5 now, but I can – sorry, 4.9 before, I'll call up offline, Cameron.

Yeah. I think it's still 4.9 now, but we are happy to follow-up with you to reconcile that. Jonathan Arnold – Deutsche Bank: The second thing just on dividends, if you could clarify what you are saying, I mean, before these slides had talked about targeting a 40% to 50% payout and now you are saying maintaining in the high 30s. I know you had been sort of talking about a historical growth of 5ish percent. So, depending on how we want to define high 30s that could be slightly slower or significantly higher growth than you've had over the past few years. And you said you want to be cautious. So, I am really not sure I fully get what the message is on dividend versus what it was before?

Sure. I'm happy to clarify. I think as we've looked at it historically, we've obviously grown the dividend at a pace of about 5% annually, and as I have noted in my prepared comments, we see flexibility to increase that above our historical 5% level going forward. The growth and earnings we've been able to achieve obviously has been quite strong, and maintaining something in that 40% to 50% payout ratio going forward in time it's going to require fairly healthy increases in dividend policy over the next few years to do that. So as we sit here today with the pending Entergy transaction as well as what we see as being likely to occur in the development pipeline, we expect to increase the dividend at a level that's above what we've been able to do historically, but I think we'll be cautious in how we do that in a way that best provides sufficient flexibility as we continue to advance both the Entergy transaction and the development portfolio. We don't want to get ahead of ourselves. We don't want to find ourselves in a position where we increase the dividend at a level that if incremental opportunities present themselves that we are finding ourselves in a position to having to go out to fund through new equity issuances. So, we're being, I think, cautious in how we do it but we do see flexibility obviously to increase the dividend at a pace that's higher than what we have done historically. Does that help? Jonathan Arnold – Deutsche Bank: That's very helpful. Thank you, Cameron. And then if I could, just one other sort of more financial question. It looks like you had a slight reversal in the deferred tax number in the fourth quarter whereas normally we see that as a growing positive through the year. Any insights into what was going on that?

Off the top of my head, no. But I'm happy to follow-up with you on it. Jonathan Arnold – Deutsche Bank: Okay, thank you.

Our next question comes from Neil Kalton of Wells Fargo Securities. Neil Kalton – Wells Fargo Securities: Good morning everyone.

Good morning, Neil. Neil Kalton – Wells Fargo Securities: Just a question on advanced development. So, my understanding to clarify, does that includes both projects in Kansas and the MVP projects in Iowa as well? And the total is about $518 million and we know that in Iowa the CapEx that you think you could do with MVPs could be $600 million over some period of time, likely within the next five year. So, I guess what I'm getting at is what's the waiting that you have described to those projects? I mean how much more incremental could we see if those actually move to 100%?

Yeah, good question Neil. Let me just clarify one thing you said. The $600 million or in excess of $600 million, which is our expectation for the MVP projects, includes investments that are likely to incur outside of the five-year planning horizon. So, of the – balance of the advanced stage projects, which again includes $861 million of projects, which was $343 million for the Great Plains projects and the balance being for new development projects we've promoted into the advanced stage category. The only a portion of the MVP projects is included in that balance, because some of it's going to fall outside this five-year planning horizon. So, to answer the second part of your question, I would say on the MVP projects in particular, we have a very high probability weighting just given that those projects have received regulatory approval. However, there is still work to do in promoting them through the routing and siting processes. So they are not, I would say, weighted at 100% at this stage. If you look at some of the materials we've provided, the advanced stage category contains a little bit more on an unprobability weighted than what we have in our actual capital plan, but I wouldn't characterize it as significant at this point. Neil Kalton – Wells Fargo Securities: Okay. And I'll try this one, but how much of the MVPs do you expect to fall outside of the five-year time horizon?

As we sit here today, there is probably in the North Central region in the neighborhood of $400 million associated with those MVP projects in the five years with the balance falling outside of the five years. And I would tell you that the $600 million or in excess of $600 million really needs to be refined as we work through routing studies for these projects. I mean these are high level assessments and assumptions that MISO has devised in approving these MVP projects, but there still remains a fair amount of work to refine these estimates, but as we sit here today it's generally split that way. Neil Kalton – Wells Fargo Securities: Okay, thanks.

Our next question comes from the line of Jay Dobson from Wunderlich Securities. Please go ahead. Jay Dobson – Wunderlich Securities: Good morning.

Good morning, Jay. How are you? Jay Dobson – Wunderlich Securities: Great, Joe, how are you? Since we're on the development backlog, maybe just talk a little bit about the expenses you incurred in 2011 that would be those hold-co development, I think, what you've let us, Cameron, to believe it would be 15 to 20 a year what that was in 2011. And then just with the development backlog growing, is that an amount of money we have to assume or grow a little faster going forward?

I'll address the first question before. I think the 2011 total non-recoverable expenses were in that sort of they were certainly in the $15 million to $17 million range consistent with our prior guidance around our level of expectation for those expenses. As we look forward in time, obviously, I think as we continue to promote and look at an environment that allows for promotion of more regional transmission expansion projects. We are pursuing new opportunities that will continue to fill the pipeline. I think our goal clearly is to ensure that we have a robust backlog of projects that we're trying to advance and we're continuing to develop new projects while at the same time advancing items that are already in the pipeline into the advanced stage category and ultimately in the construction where they can create value. So the overall size of the pipeline it's important, but obviously less important to some degree than our ability to continue to promote projects through the pipeline and actually have them move into the construction phase. Jay Dobson – Wunderlich Securities: Okay, got you. And then specific to those non-recoverable costs, would that be an amount that would trend higher as well as you have higher amount of development activity?

No, I think that in general the guidance we have provided historically and I apologize, I think I misspoke earlier. It's $20 million to $25 million of total non-recoverable expenses annually. We still feel like that's a reasonable estimate as it relates to our standalone plan and provides us sufficient flexibility to allocate the financial resources we need to pursue these development initiatives. I think as and when we ultimately close on the Entergy transaction assuming we're successful in doing that, we'll obviously have to reassess what the needs will be from a development perspective given the platform that we will then have to pursue those opportunities and it could likely change. But as we sit here today on a standalone basis, we're not updating and not changing that historical guidance we've provided of $20 million to $25 million of total non-recoverable expenses annually which includes our development expenses. Jay Dobson – Wunderlich Securities: Okay, that’s helpful. And then Joe, at the end of your prepared comments you were talking about a bit more granular schedule for filing, some of these regulatory filings involved with the Entergy transaction maybe having that on the first quarter call in April and appreciate that's probably moving around. But I guess as I have thought about it assuming these would take about a year and your desire to close this in the first half of '13, it probably requires filing in the second quarter, if not before. Any of the discussions you've had suggest the schedule broadly that would be outside of that?

Candidly, the discussions that we've had to date, we have not been able to really, what I would say, pin down a true filing schedule which is what I commented to. The fact is, is that we are really more so in this transaction before listing to the inputs from the multi-stakeholders and trying to get all of their questions answered in advance. The goal of this is historically, I think what's happened is, we, in an effort to get things really moving quickly, have made our filings and then that really locks us out of being able to talk to people on a robust basis. So what we're trying to do is define what we want to get in those filings, answer the questions that we can and hear the questions from people so we can answer them directly in the filings with their overall objective after bringing the closure date or the order date which is the objective in quicker. So, we're trying to spend more front-end time now with the hopes of, not with the hopes, with the objective of knocking off some on the backend. So, we can get those orders out. Not only that but there is – at the regulatory level for Entergy Corporation, and I addressed this in my prepared comments that they are going through the MISO approvals and some of the regulators want to take this really one by at a time, they'd like to get through the MISO process first so they can understand RTO memberships and then deal with the independent transmission companies. So, we're trying to stay respectful of that requirement also, but I think that we'll still get ourselves as we said in our announcement of the transaction, we felt that we would get this done in about 18 months and I think that we still have the schedule that will keep us doing that. Jay Dobson – Wunderlich Securities: That's great, Joe. Thanks for the clarity. I think Cameron I'll throw this to you but maybe Joe had some comments noted with interest your comments on potential reliability or investment opportunity around some of the environmental stricter environmental standards that are coming for many of the coal plants, particularly in the Midwest. And I was wondered if you could flush that out a little bit. It's certainly something many of us have thought about, but also are you seeing any early signs of that in and around coal to gas switching that would give you an implication or indication of sort of how much spending it might be and maybe what areas are more prone to with and others?

Jay, I'll maybe provide just a couple of comments as to what we're seeing in the marketplace and maybe I'll turn it back to Joe to give you his views as well. I think what we've seen is a very – an environment where SPP or MISO's ability to plan for the implication of EPA. They've had a little trouble getting off the ground quite frankly. Some of that stems from the fact that there are still uncertainty as to the specific timing of these new regulations and some of it stems from the fact that as you can imagine if you're a generator owner, not everyone's been terribly forthcoming with all of their plans as to how they would intend to comply with new regulations, which is obviously a critical input towards planning for the system. SPP is just kicking off now a supplemental study process that is really designed to begin to assess these EPA rules and the implications within their region, which will look at obviously anticipated capital upgrades to particular generating stations, particular retirements, coal to gas switching, as you've highlighted earlier, new generation that maybe needed as well as what transmission constraints or reliability issues may be created from these efforts to comply. That's the process that we would expect to continue over the next year or so, and hopeful we'll see some clarity as we work through that into what some of the long-term ramifications may be from a transmission perspective, but there recently announced ITP10 plan didn't really assess these impacts. So they are now having or now being forced to some degree to pursue a supplemental planning process that will look at those on top of their other planning criteria. In MISO, probably a little less progress specifically than what we've seen in SPP, although we are at least starting to see MISO move forward and beginning to assess some of the planning criteria around the EPA requirements as well. Their process, again, has been a little slow in getting off the ground for all the reasons I've previously described, but we do remain optimistic that over the course of the next year or so we're going to start to see more specific planning around the ultimate promulgation of these rules and what it will mean for the region from a reliability and transmission expansion perspective. But we continue to believe that these will result in, I think, fairly significant investment needs around the transmission system. We certainly don't see an environment where environmental standards are going to become less strict and certainly feel that obviously transmission can play an important role and will play an important role in ensuring that we sustain reliability through this evolution of new environmental standards, but ultimately will change the makeup of the generating fleet, particularly in Midwest and Southwest where we are focused.

I would just add to that that – this is Joe Welch that, the fact is that I think as the RTOs start to work through this process, first of all, I think as Cameron said, not all of the information has been forthcoming on a really quick basis from the utilities. But in fact I think the RTOs are going to be in a position for reliability purposes to have to look at the region on a reliability planning basis. So a lot more strictly than they have in the past, because it is going to cause some generators to be shutdown and as that happens, there could be the fear that you are not going to meet your reliability standards by having adequate generation available. The only way to really do it is to look to the region and make sure that you have free flowing transmission so that you can import and export to any region on a real time basis without constraint. I believe that that's going to be with the place where they get to the optimum environmental footprint. And so I think it's going to call for more transmission but that will be as the RTOs go through this planning process. But I think that there is a lot of work to be done in this area. And candidly, there is a lot of apprehension from a lot of different people over this, but we are going to move there – as Cameron said, the standards aren't getting less, they are getting more. Jay Dobson – Wunderlich Securities: That's great. I appreciate the clarity.

Thanks Jay.

Our next question comes from Kevin Cole of Credit Suisse. Please go ahead.

Hey, guys. This is actually Dan. Cameron, just following up on that last question about the EPA CapEx, if you guys were to find the ability over the next five years to put more capital to work on that side, does that potentially crowd at other CapEx you guys have earmarked in from a spending perspective or does that raise the overall base? Then how do you think about funding that base here with new equity given kind of some of the dilutive attributes of raising equity to fund it?

Good question, Dan. I think as we look out at the plan and particularly in the, let's call it, the '14 to '16 timeframe we do have flexibility in the plan to assume incremental investment opportunities without being in a position to need new equity and raise new equity. So, I think as we look at the standalone plan, there is clearly some flexibility in there and we are generating some cash that would allow us to do more without stressing, I think the balance sheet. And I think our ability to probably provide ourselves with a little bit more balance sheet flexibility here over the last couple of years could prove to be very beneficial as we move forward in time in the sense that we can take on more without stressing the balance sheet or needing to raise new equity. There is obviously going to be a limit to that. The other lever that we would have to be able to manage to that is to push out some of the other base capital investment needs, a little further in time, because we still have some degree of flexibility in the particular timing around the base capital investments when we make those and some of those could be pushed out if there were more compelling needs around reliability projects associated with these EPA standards. So, I think we've worked very hard over the last couple of years and we'll continue to work hard to ensure we have flexibility. There will ultimately be a limit to that and some of that's going to depend on obviously where things end up with the Entergy transaction, but I wouldn't suggest that we view ourselves today as being inflexible in terms of being able to accommodate incremental requirements over the course of this five-year plan.

Okay, that was helpful. Thank you. And then I guess kind of on the dividend conversation earlier, when you look at, you're kind of bringing the payout ratio down, but then raising the growth rate. Is that a function of basically you are finding a better sweet spot on retained equity with a lower payout ratio or as you've gone through with the agencies, are you seeing more ability to put all extra leverage at the holding company to the support a higher dividend growth rate?

I think it's just more of a function of when we look at the opportunities that are near-term as well as the cash we are going to continue to generate in the business as we make the capital investments and grow the earnings in the company. We have some flexibility to again increase the dividend at a rate that's higher than what we have been able to do historically while ensuring we maintain the flexibility as I just described to continue to pursue more projects to the extent we are successful beyond what's currently in our plan. And I think our dividend policy has always been geared towards trying to find that sweet spot. How do we continue to grow the dividend at a pace, so it appropriately rewards shareholders currently, while at the same time, maintaining flexibility to efficiently fund what can be a somewhat more uncertain development portfolio and that's probably even compounded now given the pending Entergy transaction as we don't want to (put us in a) position where we've overextended ourselves from a dividend perspective and find ourselves stressed in terms of trying to make the capital investments that ultimately we have the opportunity to make in the business.

Okay. And I guess one last question, what are expectations for kind of the costs around executing on the Entergy transaction that we should be kind of modeling and are assuming, and I know it’s not recurring guidance, but how should we think about the cost after kind of the reasonably big number in the fourth quarter?

Yeah. I mean, I think its bit of a barbell, as you can imagine. There were some relatively bigger numbers that were required to get the transaction to announcement and there will be relatively big numbers when we ultimately closed the transaction. In between, I am not really in a position to put a definitive number on the table for you today as it relates to what's going to be kind of the ongoing internal cost and support cost associated with both furthering the implementation of the transaction, integrating the business into ours, or beginning the integration process, even pre-close and then obviously what costs will incur in pursuing the regulatory filings. We'll endeavor to provide a little more clarity on that when we get to our first quarter call and have a more definitive timeframe to share as well, but I wouldn't characterize them as being overly meaningful at least in the intervening period. Obviously, when we get to close there will be more meaningful dollars that are more contingent-based success fees that are outstanding.

Okay, thank you guys.

Thanks, Dan.

(Operator Instructions) Our next question comes from Greg Reiss of Catapult. Please go ahead. David Frank – Catapult: HI, good morning. This is actually David Frank. Question for Joe, Cameron. Have you guys examined the ability of ITC to form an MLP or REIT structures? And might you give these types of valuation creation initiatives consideration if ITC would continue to trade at a discount to a low growth utility sector?

David, good morning, maybe I'll jump in on that. This is Cameron and I'll ask Joe if he has any other additional comments. First of all, let me make a very simple statement. We are always interested in assessing opportunities that have the potential to create incremental value for shareholders, and hopefully that goes without saying, but I'll say it nonetheless. And I think we would view ourselves as fairly creative and have demonstrated we are going to fairly creative to try to execute things that are value enhancing to shareholders. As it specifically relates to the MLP or REIT discussion there has been a lot of chatter around that in this space over the course of the last few years. It is something that we have historically looked at and we do continue to think about as it relates to an option that we could ultimately pursue in the future. I would tell you as we sit here today; I don't think we have any sort of plans in the near term to try to execute something like that for a couple of reasons. One is, I am not sure that ultimately given the regulatory construct that we have been able to achieve as well as some of the focus around particular aspects of that that Joe highlighted in his comments, it's necessarily the best time to try to pursue something like that, nor is it necessarily clear to me it's the most efficient way for us to capitalize the business going forward given the specific needs that we have and the pending transaction with Entergy. However, it's something that we will continue to keep on our radar screen as we will hopefully other opportunities that may present themselves that can enhance shareholder value while also providing us the ability to execute our strategic plans. But it's not something today that I would want to suggest we have firm plans to go out and pursue in the near-term. David Frank – Catapult: Great. I am just looking at a comparable company like a Starbucks that has the same projected growth rate and similar payout ratios, and you traded a 25% discount to them on a peg ratio, that you guys are much, much safer investment. Maybe you are just being comped to the wrong group companies, maybe you should be comped to growth sector companies, you are kind of an anomaly though, you are like a safe yield deregulated growth sector company. Just trying to think out loud of ways maybe you close that gap?

I think we clearly agree with your comments in the sense we are a bit of an anomaly and it is a little more difficult I think at times for people to understand a growth utility and how to think about a growth utility when you tend to get comped in period against utilities that are obviously much slower growth. It does create a bit of an odd dynamic for us. So, I think our perspective has been and continues to be, we believe strongly in the value creation potential of the business, we're working very hard to execute on and deliver on that for the benefit of our shareholders and we try to as best we can give clarity around what drives the growth prospects for the business and how certain those are, recognizing that it is becoming a more competitive landscape and were limited on how much we want to say about some of our growth initiatives that may otherwise compromise our ability to be competitive, so we are trying to balance all those factors and make sure it's clear that the growth potential and how certain the growth potential is from our perspective is committed to the investors, but we share a bit of a concern I would say that it is difficult to times for people I think the understand from a value proposition what ITC can deliver given it's a unique utility from that perspective. David Frank – Catapult: Okay. Well, thanks. Good luck, guys.

Thank you.

I am showing no further questions. I would now like to turn the conference back over to Ms. Gretchen Holloway for any closing remarks. Gretchen Holloway – Investor Relations: This concludes the question-and-answer portion of our call. Anyone wishing to hear the conference call replay available through Wednesday, March 7th, should dial toll-free 855-859-2056 or 404-537-3406. The pass code is 46891456. The webcast of this event will also be archived on our website at itc-holdings.com. Thanks everyone. Have a great day.

Ladies and gentlemen this does conclude today's conference. You may all disconnect and have a wonderful day.