Good day, ladies and gentlemen, and welcome to ITC Holdings Corp. Second Quarter 2012 Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today’s conference, Gretchen Holloway. Ma’am, you may begin.

Good morning, everyone, and thank you for joining us for ITC’s 2012 Second 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 second quarter and for the six months ended June 30, 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 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 may be 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 prospectus 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 prospectus, as well as other filings containing relevant information will be available without charge on the SEC website. Copies of the proxy statement and prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement and prospectus can also be obtained when available and without charge from ITC or Entergy. Information regarding participants or persons who may 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. This material contains forward-looking statements which involve a number of significant risks and uncertainties. I will now turn the call over to Joe Welch.

Thank you, Gretchen, and good morning, everyone. The second quarter of 2012 proved to be yet another successful quarter for ITC on all fronts; strategic, operational and financial. As I have stressed over the past several months, we have worked very hard as an organization to position ourselves well to both, continue to deliver our stand-alone commitments, while also advancing the Entergy transaction towards closing, with a near-term focus on efficiently and successfully navigating the regulatory approval process. I believe that the results of the first half 2012 should demonstrate that we are capable of doing just that. We are very pleased with our overall performance this year as we continue to invest significant amounts of capital in our system and execute our maintenance programs, all while maintaining top-tier system performance. In addition, as we continue to deliver the high level with system performance that our customers have come to expect, we have consistently produced financial results and further strengthened the overall financial position of the company. This is quite a testament to the capabilities of the team that we have developed at ITC. As Cameron will touch on further, we continue to effectively execute our stand-alone strategic plan. This plan provides for approximately $4.2 billion of transmission infrastructure investment over the next five years to improve reliability, reduce congestion, interconnect new generating resources and develop regional infrastructure to support a robust twenty-first century grid. As we have highlighted previously, the level of planned capital investment in 2012 reflects a significant ramp up relative to prior years and proposes a challenge for our organization, particularly in light of the fact that we are simultaneously pursuing the Entergy transaction. We believe that our performance in the first six months continues to support our ability to deliver on the commitments to our…

Thanks, Joe, and good morning, everyone. For the second quarter of 2012 reported net income for ITC was $42.4 million or $0.81 per diluted share as compared to reported net income of $43 million or $0.83 per diluted share for the second quarter of 2011. Reported net income for the six months ended June 30, 2012, was $88.4 million or $1.70 per diluted share compared to $85 million or $1.64 per diluted share for the same period last year. Operating earnings for the second quarter were $54.8 million or $1.05 per diluted share compared to $43 million or $0.83 per diluted share for the second quarter of 2011. Operating earnings for the six months ended June 30, 2012, were $103.4 million or $1.98 per diluted share compared to $85 million or $1.64 per diluted share for the same period last year. Our operating earnings for the quarter and year-to-date period exclude the following items. One, after-tax expenses associated with the Entergy transaction of approximately $4 million or $0.08 per diluted share for the quarter and $6.6 million or $0.12 per diluted share for the six months ended June 30, 2012. And two, after-tax expenses of approximately $8.4 million or $0.16 per diluted share for both, the quarter and six months ended June 30, 2012, associated with an estimate of the refund liability for certain acquisition accounting adjustments resulting from the FERC audit order on ITC Midwest, issued in May of 2012. While the ITC Midwest audit order was limited to the acquisition accounting treatment of certain tax items for ITC Midwest, ITCTransmission and METC have applied a similar accounting treatment for their respective acquisitions and we expect to file compliance plans for them with FERC, subsequent to FERC accepting the refund methodology in the ITC Midwest compliance plan, which we…

Thank you. (Operator Instructions) Our first question comes from Kevin Cole of Credit Suisse. Your line is now open. Kevin Cole – Credit Suisse: Good morning, guys.

Good morning, Kevin. Kevin Cole – Credit Suisse: I guess last year we saw MISO do the big MVP approval and then now with EPA I guess approved for the mass policy and the plant closures coming quickly, how big and how significant do you think that the MVP project could grow in like a MVP 2.0 type of approval? And how quick do you think we’ll see kind of more backbone projects coming up through this process?

Well, I think that they’re still in the evaluation stage on the impact, so it’s really premature to start to give out any information or speculate as to where it’s going to be. I think it’s clear that it’s truly going to change flows on the system and at that time, once we get a good read on that, then I think we’ll be more involved. But as to date, that read isn’t all that clear yet.

The only thing I would add to that, Kevin, is if you recall the original project approved as MVP projects were also characterized as these RGOS starter projects. So they were deemed to be the first phase of the Regional Generator Outlet Study projects that MISO wanted to advance through this new MVP process. You know, certainly our expectation has always been if they will continue to advance other projects that are part of the overall Regional Generator Outlet Study. However, to Joe’s point, some of those may need to evolve or be modified to the extent that we do experience and as we anticipate a fairly significant or healthy shutdown in some generating stations here in the Midwest region. So we do expect it to continue forward. How it will evolve and ultimately the timing for that, it’s a little premature I think to speculate on that today. Kevin Cole – Credit Suisse: Okay. And then, I guess on the $600 million you have as of today, how big do you see that number getting through future JVs and partnerships?

I think at this point we’re standing behind our $4.2 billion aggregate plan. Kevin Cole – Credit Suisse: Okay.

Obviously included in that plan is our development pipeline and the $600 million-ish is reflected in that number as well. I think to the extent we’re successful in pursuing and advancing other joint ventures or partnerships with other utilities in the region, obviously that will work towards filling out the balance of the development pipeline. It could in the end of day result in some incremental opportunity, but again I think it’s a little premature to speculate as to how that might play out here at this stage. Kevin Cole – Credit Suisse: Okay. Then, as for SPP, is there anything significant or any new initiatives that is going to coming down the pipe that we should be aware of?

Well, SPP has an annual planning process and then they have their sort of rotating longer term planning process as well. And we continue to be actively involved in both of those processes. I think at this stage we have a variety of projects that we think are certainly recognized as being important long-term solutions within the SPP footprint and we continue to work hard to find ways to advance those through the process to begin to move them forward more expeditiously here in the near-term. There are a variety of other things that we continue to explore in that region as it continues to be one of our focal points from a development perspective, but I wouldn’t want to get too far in front of some of the specific things that we’re working on now and trying to determine the best way to advance. Kevin Cole – Credit Suisse: Okay. And then on the FERC goodwill amortization, is this a change in policy that will impact the – I guess the future ability for shareholders to realize the cash savings of the shareholder-funded goodwill?

No. It has nothing to do with ultimately the tax benefits associated or “tax benefits” associated with the amortization of goodwill. It’s simply a function of how that is reflected or how it is removed from the operating company financial statements. So it has no impact at the consolidated level as to how shareholders will ultimately receive some of the benefit of the fact that goodwill is deductible for tax purposes, to the extent you have tax-deductible goodwill in a transaction. For the Entergy transaction, since it is a non-taxable transaction, we don’t anticipate obviously having tax-deductible goodwill. So it has no impact on that either. Kevin Cole – Credit Suisse: Okay, great. And then – if I could just ask one last question, just on the Arkansas approval. Is it correct that, I guess, staff came out with a series of conditions that if MISO could reasonably meet them, that they would fully approve the entry into MISO? And then kind of – can you touch briefly on what those conditions would be?

We have heard, I would say at this stage, that staff has recommended certain conditions associated with Arkansas approval of Entergy joining MISO. But honestly, I don’t – until the commission rules and actually determine what conditions, if any, they want to put on that particular aspect of the transaction, I don’t think it’s appropriate for us to be commenting. Kevin Cole – Credit Suisse: Okay. And then just for the timing of the state separation filings, would we – should we assume that the rest will kind of follow? So we saw Louisiana approve entrance of MISO and then you have the separation filing coming after that. And then it sounds like if Arkansas happens soon then the separation filings should come after that. Any kind of comment on that series of orders?

Well, I don’t want to suggest that our filing of our applications is directly linked to when each jurisdiction will approve the MISO, or hopefully approve Entergy’s MISO applications because they’re not. Certainly the timing around starting and initiating our application process in the state has been influenced by the fact that the state commissions are actively involved with the MISO proceedings currently, but I don’t want to suggest that we’re waiting or will wait for each individual state approval on the MISO proceeding before making our application in each state. Once we make the first state application, it will really serve as the foundation for each of the other retail jurisdictional filings. There are obviously modifications, specific requirements that need to be demonstrated in each jurisdiction, and the story might slightly be modified to address particulars in each jurisdiction but the base foundation will be built-off of the initial application that we expect to file in Louisiana. And then the other one should be sequenced shortly thereafter once we obviously modify them and make whatever updates and changes are necessary to reflect each retail jurisdiction specific attributes. Kevin Cole – Credit Suisse: Great. Thank you very much.

Thanks, Kevin.

Thank you. Our next question comes from Caroline Bone of Deutsche Bank. Your line is now open. Caroline Bone – Deutsche Bank: Hi, guys. Good morning.

Morning.

Morning. Caroline Bone – Deutsche Bank: Just a few random questions actually. Any view on the chances of the 25% renewables by 20-25 ballot passing in Michigan?

Just – this is an opinion but I don’t view that it’ll pass. I think that there is a lot of momentum in the state, especially from the business community to make everyone aware of the extreme price that’s going to be associated with that 25% renewable standard. When you look on a broad regional basis, Michigan is really well positioned as a place to produce wind energy and we see that in our operational control centers. So the expansion of that would – I don’t believe be in the best interest of our customers. Caroline Bone – Deutsche Bank: Okay, great. Thanks. And then sorry if I missed this Cameron, but why was the tax rate so low during the quarter?

A couple reasons. One is we had a little bit of cleanup at the state level on some deferred taxes for ITC Midwest. And as I mentioned before, that impacted earnings – operating earnings per share by about $0.02 or $0.03 for the quarter. And it really deals with some state tax planning we’ve been doing in Iowa, as well as forecasting longer term how we expect our deferred taxes to reverse and at what rate they will reverse given that we do and are able at the state level to take a benefit for federal taxes paid in Iowa. So some of it is really just longer term tax planning and also some refinement of some longer term forecasting of reversal deferreds for Iowa. So that’s really what drove it. As I said, it was about $0.02 to $0.03 of impact for the quarter and for the year-to-date period. Caroline Bone – Deutsche Bank: Okay, thanks. And what kind of tax rate should we be assuming going forward?

I think what we’ve said historically is something in the mid-36% range as somewhat of a normalized rate. In periods where we have more significant capital investment, the AFUDC is going to drive the effective tax rate down a little bit, but we think something in the 36.5% range is more of a normalized rate annually. We may get a little deviation quarter-to-quarter but we continue to think that that rate in the near-term is a reasonable rate to be using. Caroline Bone – Deutsche Bank: Okay, great. That’s it for me.

Thanks, Caroline.

Thank you. (Operator Instructions) Our next question comes from Neil Kalton of Wells Fargo Securities. Your line is now open. Neil Kalton – Wells Fargo Securities: Hi, good morning, everyone.

Good morning, Neil. Neil Kalton – Wells Fargo Securities: Just a question on the MVP. So, is the investment allocation, that $600 million pretty well set at this point in time? Or is there some legwork to do with the parties still?

I think that’s pretty well set, Neil. I think from our perspective, there is obviously potential movement in that number. The original MVP projects were fairly – they weren’t at the stage when they were approved, I think – or didn’t have the benefit of more detailed routing studies or more detailed engineering analysis to produce more refined capital investments. But I think the overall magnitude of the opportunity, as we think about it with respect to this first wave of MVP is in that $600 million range, just above $600 million. Neil Kalton – Wells Fargo Securities: Okay. And I realize it’s early in the process, but in terms of siting, is there anything that we should be aware of in Iowa? Any habitats that you’re going through or any issues that you see arising that could push this back or cause some issues for you, I guess?

No. I mean, I think what I would say at this stage is, we are in the process of doing our routing studies and I think we are good at trying to identify and find work around for situations that we think might otherwise slowdown or create concerns within the routing process, or excuse me, the siting process itself. I will remind you that in Iowa there is no statutory period by which the commission has to rule on siting requests. So our goal is to obviously do as much work upfront to position the siting process for – as an expeditious process as possible. But end of day, ultimately it is left to the authority of the commission in Iowa to ultimately take whatever time they feel necessary to advance the siting process. So those are the only two things I would highlight at this point. There is nothing specific that I would call out as being a huge concern but we are early in the process. Neil Kalton – Wells Fargo Securities: Thank you.

Thanks, Neil.

Thank you. And at this time I’m not showing further questions. So I’d like to turn the call back to management for further remarks.

This concludes the question-and-answer portion of our call. Anyone wishing to hear the conference call replay available through Monday, August 6, should dial 855-859-2056 toll-free or 404-537-3406. The passcode is 96932924. The webcast of this event will also be archived on the ITC website at itc-holdings.com. Thanks, everyone, and have a great day.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone, have a great day.