Good day, ladies and gentlemen, thank you for standing by, and welcome to the ITC Holdings Corp First Quarter 2014 Investor Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be followed at that time. (Operator Instructions) As a reminder, this conference maybe recorded. I would now like to turn the conference to our host Ms. Gretchen Holloway. Ma'am, you may begin.

Good morning, everyone, and thank you for joining us for ITC's 2014 first quarter investor conference call. Joining me on today's call is Joseph Welch, Chairman, President and CEO of ITC and Cameron Bready, our Executive Vice President and CFO. This morning, we issued a press release summarizing our results for the first quarter. We expect to file our Form 10-K with the Securities and Exchange Commission today. Before we begin, I would like to make 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 reflects 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 measures discussed on today's call are available on the Investors Relation page of our website. I will now turn the call over to Joe Welch.

Thank you, Gretchen, and good morning everyone. Before starting this morning, I wanted to note that we are pleased to have the opportunity to provide the investment community with a comprehensive strategic update little over two weeks ago. We appreciate everyone's participation in our investor day event and hope that you found it to be useful and informative. Given that very little time has passed since then there are no significant operational or regulatory updates to report. My prepared remarks for today will be brief. I will start by addressing our performance for the first three months of 2014 which ended up being another strong quarter for ITC. From an operational perspective, our systems performed very well during the bulk of weather conditions that we have experienced this year. This has included a very long and extremely cold winter as well as recent severe spring storms and high winds. The operational performance that we have achieved throughout these conditions continues to demonstrate the benefits of a robust and redundant transmission grid. While the severe winter weather conditions extended well into April, we have made progress on our capital investments setting the stage for us to successfully execute on our overall plan for the year. 2014 marks the first year of our new five year plan which we expect to deliver the benefits to all of our constituents. As we discussed a couple of weeks ago, this plan is premised on investing approximately $4.5 billion from 2014 through to 2018 in critical transmission infrastructure. From a customer perspective, these investments will provide access to lower cost power and ensure a flexible and redundant grid necessary to meet changing demands in public policy. From a shareholder perspective, this plan provides for compelling total shareholder return position including expected comp and annual growth rate in earnings per share in the range of 11% to 13% and annual dividend growth in the range of 10% to 15%. In addition, the plan results in approximately $1 billion of excess funding capacity and the strategic balance sheet with improving credit metrics over the plan period which can be used to enhance overall value through our balanced capital allocation strategy. As previously noted, our board authorized the share repurchase program of up to $250 million through December, 2015 representing the first step of our plan to utilize this funding capacity. We are very excited about the prospects that this plan has to offer and how it positions ITC for continued growth and success for the later part of this decade. With this brief recap, I will turn the call over to Cameron for a financial update.

Thank you, Joe, and good morning. Before I begin, I want to remind everyone that our results for both the first quarter 2014 and 2013 now reflect the three-for-one stock split that was effectuated on February 28. Going forward, all of our results will be reported on a post slip adjusted basis. For the first quarter of 2014, ITC reported net income of $69.1 million or $0.43 per diluted share as compared to reported net income of $50.2 million or $0.32 per diluted share for the first quarter of 2013. Operating earnings for the first quarter of 2014 were $69.8 million or $0.44 per diluted share compared to $58.8 million or $0.37 per diluted share for the first quarter of 2013. Operating earnings are reported on a basis consistent with how we have provided our guidance for the year and exclude the following items. First, after tax expenses associated with the Entergy transaction of approximately $0.6 million or $0.01 per diluted share for the first quarter of 2014 and $8.5 million or $0.05 per diluted share for the first quarter of 2013. While we terminated the transaction in late 2013, we did expect to have some smaller charges lingering into 2014. We believe that most of these expenses have now been incurred and do not expect any further incremental impacts going forward. Operating earnings also excluded after tax expenses associated with certain acquisition accounting adjustments for ITC Midwest, ITC transmission and METC that resulted from the FERC audit order on ITC Midwest in May, 2012. The impact of this item for both the first quarter 2014 and 2013 was approximately $0.1 million. The primary driver contributing to the increase on our operating earnings for the first quarter was higher income associated with increased rate base at our operating companies resulting…

(Operator Instructions). And our first question comes from Julien Dumoulin-Smith from UBS. Please go ahead.

So first quick question on the financials quickly. As you have talked about expanding the different markets et cetera, how would you think about SG&A and the paced inflation on that side, just to expand your -- the scope of your business?

It's a good question, Julien. It's Cameron. Generally speaking, I think we still feel that the $25-ish million a year non-recoverable expense estimate, excluding holding interest expense of course is a reasonable estimate. Our five-year plan has that escalating to a number that is probably closer to 30 in the outer years. But we still feel like that level of non-recoverable expense provides us sufficient dollars or resources so to speak to explore our development initiatives and don't expect a material increase in that as -- even as we continue to look at new markets.

Great. Excellent. Secondly, I'm curious here. You kind of start to get a glimmer that each of these different markets in the composition of FERC 1000 criteria, etc cetera, is there a relative market that you see is more or less advantageous where perhaps you might have a specific edge or not? And I'd be curious, in long term, how do you think about the differing markets in terms of their relative trends towards competing on a cost of capital basis, if that's the case at all?

Sure. I'll provide a little bit of commentary. We talked a bit about this at our investor day, a couple weeks ago. I will see if Joe has anything to add. I would say generally when we think about expansion obviously our priority would be looking at markets where we have the ability to leverage our existing scale and resources. So that naturally brings PJM into the mix. The other aspect of PJM that I think we find attractive is that, planning creativity for lack of better term, the capability is rewarded given how they have structured their Order 1000 implementation plan. So we view that as playing very well to our strengths. If you look at the western side of these and it's arguably closer to our Michigan footprint then, our ITC Midwest subsidiary. So we do feel like we can leverage our existing capabilities and resources into the Western PJM market without too much difficulty. And it's the market where again, we think that the capabilities we have from a planning perspective will be rewarded without again having to bid down cost of capital to a level that we would find unattractive or unwilling to do.

And other quick -- oh, sorry.

No, no, no, go ahead.

And a quick clarification, if you do not mind. As you think towards the specialist next RPM option etc cetera, are you seeing more interest to pursue these cross border MISO, PJM type projects? And what size if you think about that even thus far is that of your total time? I mean, I imagine it is relatively modest but if you could give us a sense?

Yes. We have not really broken down the pie to give specific dollar expectations or specific strategy per se. I think your observation is fairly accurate. I do not think we view that as being a material or significant looking through a component of our development plan. But as we talked about before, we do see obviously Midwest resources, MISO resources that have been -- that have bid into our BN, have been picked up and need to be deliverable. And that is driving some opportunities for us to invest in new transmission infrastructure. We are working with one counterparty right now to build infrastructure for them that will allow them to be deliverable into PJM because they work it up in the last RPM option. It's a relatively small dollar amount. But again, I think it's the beginning of what has the potential to be a fairly meaningful amount of capital investment opportunity, but by no means would it be a majority of what is in the development capital plan by any stretch.

And do the new import requirements drive some incremental spend and do you see more coming, may be to get us a better sense here or is the gate down as well?

I think eventually, yes. But as we saw on the interregional planning process, it's going to take some time for that to evolve between MISO and PJM. So nothing has really advanced out of that interregional, the first round of the interregional, what they call the exact planning process between MISO and FB -- excuse me, MISO and PJM. And I do expect that over time there will be projects that materialize, that look to create more throughout capacity from MISO to PJM. But I think it's going to take a little bit of time for that to materialize.

Great. Thank you very much.

Thanks Julien.

Our next question comes from Charles Fishman of Morningstar. Please go ahead.

Back in the investor day, you had a slide and talked about the fact that you saw some RFPs potentially in PJM as early as the second quarter this year. Has anything happened in the last couple weeks since you spoke about that or is there anything queued up that you are aware of?

As to an update, we don't have certainty at least as far as I know as of this morning as to whether or not one will be issued. If one is issued, we will assess it and we may or may not obviously, submit something as a part of that.

No. Honestly, Charles, it's been very quite on that front. I think we were hopeful coming into the year certainly acting chair before had expressed an interest in trying to bring resolution to the ROE issues and a fairly expeditious timeframe from that point and clearly has not been expeditious in terms of the overall issue. But I think given some of the activities at FERC particularly with the administration nominating day and obviously passing over before again it appears for the chairmanship role, I think that has slowed down the pace of advancing that issue. So we've heard very little over the last several weeks on that front. And frankly, are not all that bullish the prospects of getting resolution any time in the near future. We still remain I think hopeful. You will see something in the back half of the year with respect to ISO New England. But at this point, it is really difficult to say with certainty that that is going to happen.

There are no further questions. I would like to turn it back to Gretchen Holloway for closing remarks.

This concludes the question answer portion of our call. Anyone wishing to hear the conference call replay available to your May 6, 2014 can be accessed by dialing 855-859-2056 toll free or 404-537-3406 with passcode 307-86-383. The webcast of this event will also be archived on the ITC Web site at ITC-holdings.com Thanks everybody and have a good day.

Ladies and gentlemen, that concludes the conference. Thank you for your attendance. You may now disconnect.