Good day, ladies and gentlemen, and welcome to the ITC Holdings Corporation third quarter 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 given at that time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Stephanie Amaimo. Please go ahead, ma'am.

Good morning, everyone, and thank you for joining us for ITC's 2015 third quarter conference call. Joining me on today's call are Joseph Welch, Chairman, President, and CEO of ITC; and Rejji Hayes, our Senior Vice President, CFO, and Treasurer. This morning, we issued a press release summarizing our results for the third quarter. We expect to file our Form 10-Q with the Securities and Exchange Commission today. Before we begin, I would like to make everyone aware 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 reflect 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-K and 10-Q 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 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. I will now turn the call over to Joe Welch. Joseph L. Welch - Chairman, President & Chief Executive Officer: Thank you, Stephanie, and good morning, everyone. I'm pleased to report that the company achieved solid results in the third quarter. This should set the stage for another strong year of overall performance in delivering on expectations. On the operational front, as a testament to our model of operational excellence, our…

Our first question comes from the line of Jonathan Arnold with Deutsche Bank. Your line is now open. Please go ahead.

Good morning, guys. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Morning. Joseph L. Welch - Chairman, President & Chief Executive Officer: Morning, Jonathan.

A quick one on the – Rejji, could you – the slight change to the 2015 CapEx guidance, can you give us a little insight into what moved I guess the higher end down a bit? And is this just spend that's going to drift into 2016? Or is it things that you thought would happen that may not happen? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. Happy to answer that, Jonathan. I think the quick answer is we have fallen slightly behind on a couple of projects at ITCTransmission and ITC Midwest. And so, what we still think will be well within the initial range of $710 million to $810 million, based on the visibility we had at the end of Q3, we thought it made sense to revise downward the upward end of the range. And the projects that were a little behind on at those two entities, as we see it, will likely be spent in 2016. So well within our initial estimates, but we wanted to offer a little more prescription at this time of year.

So the projects are still happening, they're just taking a little longer. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. As we see it at this point, yes.

Okay. And then which ones in particular? Can you share? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Really immaterial projects. Not, I would say, any of the major projects and again it's not the most material amount, particularly if you compare the midpoints of the initial guidance versus the midpoint of where we are today or implied midpoint.

Okay. And then, if I may, on second one, do you have any updated thoughts as to when you might consider updating your five-year plan? Whether you might consider presenting your base business and the contracted opportunities kind of in a dual track or something like that. Is that something we should look for early next year? Or is it something that you'll wait till the FERC's resolved? I'm just curious what your current thinking is on that. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. Jonathan, at this point, clearly we have not announced the release of a new plan, but we're clearly contemplating providing a new vintage given that we're almost halfway done with the current plan and a number of the underlying assumptions have changed. But clearly that's something we'll have to talk about internally, noodle on, and as we get more visibility both on capital projects as well as clearly where the FERC is thinking at that point, we will decide when it makes sense to offer new vintage.

So when you say you're contemplating it, does that mean it's sort of a live discussion in this planning cycle or still not something as much? Should we be holding our breath at all, I guess is... Joseph L. Welch - Chairman, President & Chief Executive Officer: I don't think you should hold your breath, but I would anticipate that given where we're at, we'll clearly do something in the first half of next year with our new forecast.

Okay. I'll leave it at that. Thank you very much, Joe. Joseph L. Welch - Chairman, President & Chief Executive Officer: Thank you.

And our next question comes from the line of Jay Dobson with Wunderlich Securities. Your line is now open.

Hey, good morning. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Morning, Jay.

Rejji, as far as the ROE reserve, it looks pretty similar to second quarter. Any change in the methodology? I know you had done a change in the second quarter from the first quarter, so just want to sort of make sure we're still on the same track there. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. I guess not to get too cute with the response with respect to methodology, we're still clearly evaluating what our third-party expert witnesses are providing as part of testimony and our assumptions essentially align with those estimates and we're clearly mindful of what other data points have been offered up at this point over the course of this year. And we continue on a quarterly basis to look at how the ROE and DCF tests are trending and we have revised estimates from time to time. And so, we're going to try to make sure that our latest reserve reflects where we think the market will go and where we think rather the FERC will go. And so there have been modest revisions to the math to-date, but not material changes.

Great. That's really helpful. And, Joe, talking about Lake Erie, just what do you see as sort of the gating items? Understanding you're sort of in negotiations so you probably can't sit here and tell us chapter and verse of where exactly things are, but how would you envision this playing out? Would we hear something sort of early next year as far as, yeah, we're thumbs up and green-lighted? Or is this something that will be somewhat more iterative as we sort of move through a time continuum? Joseph L. Welch - Chairman, President & Chief Executive Officer: Well, as I said in my opening comments, we're now at that stage where we're starting to start to negotiate with the parties on this line. And as a result of that negotiation, of course that's really the critical link. I mean, first was did the line make sense? Did we see the financial economics there? Was there enough interest? We have done all of the work to see how we would construct a line, meaning the path we would take through the lake, getting it out of the lake into the two major stations where it's going to interconnect. We had the preliminary solicitation, or the non-binding solicitation, where we generated the interest and now we're at the point where we need to see if that interest is real. And we filed for all of our permits, and with that, if the interest is real and the financials are there, then we'll proceed with the permits. And so, I don't want to call it iterative, but it's definitely linear. And there's many gating items, but this one is a pretty critical one. So there'll be a lot of clarity by mid-year on this.

Got you. Nope, that's great. And then I guess, Joe and Rejji, how is the board thinking about share repurchases? Obviously, you've got the one in the marketplace, so technically you're not complete with the current authorization. But as we look out into 2016 and, Rejji, sort of playing off your comment that some of your projects have gotten pushed off further into the decade, is it likely the board will re-up a share repurchase program? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Well, it's always dangerous to front-run the board, Jay. But I think at this point, given the one that we're currently executing, the $115 million, obviously our leverage ratios have come up a little bit above our targeted threshold, and so we'll need to restore leverage capacity before we offer up another batch of repurchases. But I think as part of the continuing dialogue we have with the board and internally with the management team around capital allocation strategy and value return, we still view repurchases as really effective and tax-effective vehicle of providing value back to shareholders, and so we'll continue to look at that as a vehicle going forward, but I clearly don't want to front-run the board on that.

Great. And then last question, just – and I apologize for not being familiar – what is this contributions in aid of construction charge? I don't think I'm familiar with it. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. I'll shed some light on that, Jay. So we have for the past several months been evaluating potential modifications to our formula rate template, and as part of that assessment, we identified an issue that led to excess cost recovery attributable to deferred tax assets, how they're imputed into the formula rate template and they're associated with contributions in aid of construction, or CIACs. Upon identifying this, we quantified the refund to customers. It equated to about – just under $9.5 million pre-tax, $5.5 million after-tax and made it part of our 205 filing with the FERC in addition to other flaws that we found in the template. We have had a discussion with the FERC on this matter, brought its attention to their staff before we made the filing and we think it's clearly the right thing to do in the case of excess recovery to the benefit of customers. So we have done so, and we obviously carved it out because we view it as a non-recurring charge. So that's really the gist of it.

Got you. No, that's real helpful. And the $5.5 million obviously relates to prior periods. How should we think of that in the current period? Or if FERC approves the change, how would that impact the current formula rates? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. So what it would essentially do is correct for the way in which the deferred tax asset is running through the formula rate template. Based on our proposal, clearly it's subject to FERC's reaction and approval of our requested modification, but this would not be a prospective or recurring issue as we see it. So once we have made this refund to the tune of $9.5 million pre-tax, $5.5 million after tax, that should be the end of it. And we've obviously imputed interest expense associated with those charges over time. So we tried to retroactively look at how much we owed customers over that period since we've been using the formula rate template at that time and we think once we paid a refund, that should call it a day. It would be effective as of January 1, 2016, per our request but obviously subject to FERC's approval.

Great. Thank you very much. Really appreciate the clarity.

Our next question comes from the line of Dan Eggers of Credit Suisse. Your line is now open. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): Hey. Good morning, guys. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Morning. Joseph L. Welch - Chairman, President & Chief Executive Officer: Hey. Good morning, Dan. Daniel L. Eggers - Credit Suisse Securities (USA) LLC (Broker): Hey. Just want to follow up on the Lake Erie conversation. Now that you guys have made some progress as far as getting the intent from some potential partners. Can you talk a little bit about the nature of the people who are looking to be involved and maybe more important from kind of a credit perspective or from a durability to be either over the life of the asset to make sure you're able to get your economic return on the project? Joseph L. Welch - Chairman, President & Chief Executive Officer: Well, I think that it's a tough thing when you say talk about the character of the people there. But, look, I mean, let me start at a very high level, and then if you want to ask more, I'll go to that. But the people that have approached us have been showing interest, you would recognize them all. They are all pretty solid corporations. A lot of them absolutely deal in that area. They are on one side or the other of that line and they have seen the value of this line for some time, they – but now that we are out there. And so, they are all credit quality people and, of course, what we'd like to have is those contracts that are as rock solid as possible that we go back into the corporate…

Our next question comes from the line of Charles Fishman with Morningstar. Your line is now open.

Thank you. The only question I had left was on Puerto Rico. Remind me, your – the team's proposal was a preemptive thing. It wasn't in response to a RFP, correct? Joseph L. Welch - Chairman, President & Chief Executive Officer: Correct. That is correct.

And then subsequent to that, has there been any competition that's surfaced or competing proposals? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: There was prior to us submitting our proposal and you're correct, it was done before any formal process was put in place. There was a – I think the initial proposal was offered up by a select group of creditors which, as we see it, was inferior to what we initially proposed. And so, there have been I think one or two other alternative or competing proposals offered up but again, as we see it and it's obviously a bias view, we think ours is superior to anything we've heard publicly to-date. Joseph L. Welch - Chairman, President & Chief Executive Officer: Let me add to what Rejji said that in conversations with the officials in Puerto Rico, ours is the only one that started to add for infrastructure investment in Puerto Rico, which if you again read the legislation and the statements by the governor, it's the infrastructure that is really weak and they need reliability improvement well beyond just getting generation that's environmentally suited. So echoing off what Rejji said earlier, ours is a superior and I'm no bias, but ours is a superior solution and viewed by them as a superior solution.

Okay. That's the only question I had. Thank you. Joseph L. Welch - Chairman, President & Chief Executive Officer: Sure.

Our next question comes from the line of Steve Fleishman with Wolfe Research. Your line is now open.

Yeah. Hi. Good morning. Joseph L. Welch - Chairman, President & Chief Executive Officer: Hi, Steve.

Hi. I just wanted to check – I know on the last call, you kind of talked about some of the way to look at the capital plan, particularly the development being more Lake Erie and Puerto Rico than necessarily traditional regulated projects, so I assume that's still the case. But just maybe the base part of the capital plan, is that still kind of roughly the right ballpark of CapEx on the base part of the plan? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Steve, yeah. This is Rejji. We feel very good about the operating capital investment guidance we offered up as part of the five-year plan. So just for reference, we said an aggregate from 2014 to 2018, it would be $3.4 billion; $2.2 of which should be attributable to base capital spend. The balance of $1.2 for regional projects. We are right on trend as we see it and on course and we feel very good about the operating capital-related investments in this plan.

Great. And then one other question on Lake Erie. Just in terms of the logistics on terms of sighting and construction and just, once you have a commitment, just getting it done on time. Could you maybe just talk about how hard or easy that process might be relative to, let's say, other new lines? Joseph L. Welch - Chairman, President & Chief Executive Officer: Well, sighting is always somewhat difficult. But having said that, we have obtained options on the property on the route that we've taken. We've been in negotiations concurrently with other parties on the route. So right now today, we feel like we're in a good spot, especially on the sighting proposals. We know where the terminals are, we've gained the easements and right of ways, or the options on the property along that route. We have a couple more small things that we have to do in Canada. And on that piece of the front, I think we've got it all – pretty much all buttoned up. I think that once you get your permits, and of course, if you have the executable contracts, the easiest part for us is the construction because that's what we do and that's what we do really well. But there's always a timeline on – between point A and point B, but I think this one here we got on top of the easement and right-of-way issue early on, and I think we're in really good position right now.

Great. Thank you. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Thank you.

Our next questions comes from the line of Julien Dumoulin-Smith with UBS. Your line is now open.

Hey. Good morning, everyone. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Hey. Good morning, Julien.

Hey. So just coming back to the balance sheet question just real quickly, I want to be very clear about it. What are your leverage metrics when you're thinking about it? So as we're trying to calibrate ourselves here, how much deleveraging are we talking about before we get to a place or concurrent with a place in which we can see further buybacks? Just trying to get a sense of the magnitude there. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Sure. Fair enough. So when we executed on the repurchase at the end of the quarter, the way these accelerated share repurchases work is that you pay the agent the full amount up-front. So that was the $115 million, and then clearly, they executed on a portion of that or $92 million at jump, and they're going to do another $23 million or so. And we did actually repurchase or we got credit for about $92 million in reduction of equity when that happened. And so, that obviously has a significant impact on your debt-to-capitalization metrics, as you know, because the numerator – the debt balance goes up but the denominator essentially stays flat because the increase in debt is offset by the reduction in equity. And so, we're north of our targeted levels of 70%, and so we're just around 72%. We were right at that level in June of last year when we did the first slug of repurchases. And so, given the cash flow generative nature of the business, we expect to delever soon. But clearly, we'd like to get closer to our target levels before moving forward on any subsequent repurchases. And we've obviously exhausted the existing authority, so we would need to get more authorization from the board to move forward on any of the repos. But needless to say, I mean, we don't want to say, oh, we have to be at exactly this percentage, because if the stock continues to be at attractive levels and we think that our credit metrics and our credit risk profile can be preserved, we'll look to be opportunistic where we can. But-the first step is obviously to get additional authorization and then, obviously, we'd like to restore some leverage capacity from where we are today. Is that helpful?

Absolutely. And then perhaps a bigger picture question, if you will. As you look out – and obviously, you haven't rolled forward your CapEx budget, et cetera – but as you think about the transmission spend trajectory, I'd be curious, how are you seeing them shape up in, call it, like the 2018 through 2020 period, as best you can tell right now? And I'm thinking specifically here towards finally seeing some of the FERC 1000 processes play out and, well – and CPP as well. So I'd be curious, if you see an inflection in the transmission spending cycle and why or what would be driving that. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. So, clearly, we don't want to offer up any information around capital prospects or capital investment prospects beyond our public plan, but I think you've highlighted a lot of the key catalysts that would lead to additional transmission capital investments. So, while we don't have specificity around the impact of the Clean Power Plan, we know that when you have those types of ambitions, it's going to lead to a rebalancing of the generation fleet. And if you have significant coal plant retirements and the introduction of renewable sources, which are intermittent, you're going to need a lot of transmission investment to proceed those activities or those events and so, clearly, that's going to be a catalyst for growth. You've got NERC – or likely or looming NERC standards around physical and cyber-security, and on a daily basis, there seems to be increasing reliability standards that'll be a catalyst for growth, and we're seeing addition distribution activity, not just current but forecasted, in our service territories and, again, those are catalysts for transmission investments. So we can't give any prescription beyond the planned period, but we think there's a lot of tailwinds in place for incremental transmission investment in the current period and also beyond. So we're very bullish on transmission investing, as we always have been, and we think in addition to the restoration or modernization of the systems we own, we think there's a lot of catalyst for growth around whether it's Order 1000, whether it's a lot of the looming policies, as well as just power market dynamics. Again, we think the future looks quite good for incremental transmission investment, not just in this period but beyond.

Got it. And just to be clear about that, when you're thinking about the opportunities here for generator interconnection ties, et cetera, is that within your core organic footprint or are you thinking that still to follow the mantra of looking via competitor processes and sort of outside the service territory to continue that growth? I mean, how is the organic footprint looking in sort of the longer term look, initially? Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Yeah. So, we... Joseph L. Welch - Chairman, President & Chief Executive Officer: I'll go ahead. I would say that the organic footprint is actually looking very good. I think Rejji said that pretty clearly that he said a lot of the utilities that are serviced by our transmission system are now in a phase where they're making significant investments in their distribution systems to upgrade their service quality and reliability. And so, based on that, they are looking to us to, of course, to upgrade our services to them because they're upgrading their services and actually asking for additional transmission service. So I think that we, in the organic side, though, that's probably the cheeriest or the most optimistic thing that we have going on right now. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: And Julien, at the end of the day, this is Rejji, we're still in seven states and own three very large systems. So, clearly, as you see changes in the generation fleet and other policy-related initiatives that are going to impact transmission spend, we're going to clearly have exposure to those types of initiatives to the upside. So I think both organically as well as Order 1000 opportunities, we're well positioned to do well in either front.

Great. Thanks for the time, guys. Joseph L. Welch - Chairman, President & Chief Executive Officer: Thank you. Rejji P. Hayes - Chief Financial Officer, Treasurer & Senior VP: Thank you.

Thank you. And I'm showing a follow-up question from the line of Jay Dobson with Wunderlich. Your line is now open.

Hey, Joe. Not the perfect forum for this, but just was wondering on succession planning, how are you thinking about this? Sort of fully understanding you haven't announced anything, so you don't have anything specific to say. But how are you thinking about succession planning, particularly given the 10-year anniversary of ITC as a public company? You're ready for another 10 years? Joseph L. Welch - Chairman, President & Chief Executive Officer: Well, that might be a stretch. No, I'm not ready for another 10 years. Look, I mean I've talked about this. I'll try to be as candid as I can be that our board has been engaged in a active succession plan and development plan for the senior management of the company for some time now, in fact, in excess of two years. And so, we continue to work forward as – to make sure that we not only have succession planning for me, which is always a question about me, but we are looking multiple layers down in the corporation to make sure that we have the depth of bench that we absolutely need to have that good succession plan, not only for my retirement, but for unforeseen events that happen from time to time. So just to be pointed, I mean, we had – you all knew Cameron when he was here as our CFO and Cameron decided that he would take an opportunity somewhere else. But when that came, we already started to make those plans and not that we try to usher Cameron out, but knew that that could be a possibility. And so we had Rejji ready, willing, and able to go and further down in the bench, we had Gretchen Holloway in a position where we could move Gretchen up. And so, we have been actively doing this. I started off with a really young management team and we still have a young management team and so I'm happy about that. For myself, the board, is – we've been working together as to what makes sense and when's the right time. And when we do it, I'll announce it. But the fact of the matter is I'm still pretty passionate about the business. I hope I'm not disappointing you guys.

Nope. Not at all. Thanks for the candor. I really appreciate it. Joseph L. Welch - Chairman, President & Chief Executive Officer: Oh, you're more than welcome. Don't you guys want to ask 10 more questions?

Thank you. At this time, I'm showing no further questions. I'd like to turn the call back to Stephanie Amaimo for any further remarks.

This concludes our call. Anyone wishing to hear the conference call replay available through November 10 can access it by dialing 855-859-2056 toll-free or 404-537-3406, pass code 51993117. The webcast of this event will also be archived on the ITC website at itc-holdings.com. Thank you, everyone, and have a great day.