Good day ladies and gentlemen and welcome to the ITC Holdings Corp. Third 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, this conference call is being recorded. I would now like to turn the conference to our host, Ms. Gretchen Holloway. Ma’am you may begin.

Good morning. And thank you for joining us for ITC’s 2010 third quarter earnings conference call. Joining me on today’s call are Joseph Welch, Chairman, President and CEO of ITC and Cameron Bready, our Senior Vice President, Treasurer and CFO. Last night, we issued a press release summarizing our results for the third quarter and for the nine months ended September 30, 2010. 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 expectation. These risks and uncertainties are discussed in our reports filed with the SEC such as our periodic reports on Form 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 may be required by law. At this time, I’d like to turn the call over to Joe Welch.

Thanks, Gretchen, and good morning everyone. I would first like to set the stage for what we expect be a rather brief call today given our reason comprehensive, strategic update at our Investor’s Day in late September. Since only a month has passed, our review today will be concise and focus on the highlight for the quarter, as well some of the key takeaways from our five-year plan. Once again our results for the quarter continue to demonstrate our strong operational and fiscal performance for further bolstering our confidence, and our ability to successfully execute our 2010 goals. Perhaps more importantly these results are also reflective of the progress we have made in, continuing to solidify a foundation for ITC to leverage as we move forward on executing our five-year capital investment plan. This plan provides for approximately $3.9 billion of capital investment in transmission the infrastructure from 2011 to 2015. And this framed us around improving reliability, facilitating access to all generation, reducing congestion, improving efficiency, lowering cost of delivered energy. Our capital plan reflects our ongoing strategy of achieving best-in-class operations at our existing operating companies are also playing a meaningful role in the build out of the 21st-century transmission system in the U.S. through our development efforts. While investments in our base to operating companies to support improved reliability and replace ageing infrastructure have driven our growth over the past several years. These investment opportunities are beginning to slow as our existing systems mature, and we are able to achieve our target in best-in-class performance level. However, much work remains to be completed in these systems and they remain critical to our investment plan, as well as our overall strategy as they provide a key competitive advantage in our development initiatives, which are becoming increasingly important to…

Thanks everyone and good morning. I will begin by providing a brief summary of our financial results for the third quarter and year-to-date periods. For the third quarter 2010, ITC reported net income of $38.4 million or $0.75 per diluted share. This compares with net income of $37.8 million or $0.74 per diluted share for the third quarter of 2009. Net income for nine months ended September 30, 2010 was $108.9 million or $2.13 per diluted share, compared to $97.3 million or $1.92 per diluted share for the same period last day. As the reminder, 2009 third quarter and year-to-date results reflects impacts of recognition of $9.3 million or $0.11 per diluted share of regulatory assets at ITC great claims. Results for the 2010, do not include recognition of any such regulatory assets. In addition to these items, other key drivers that contributed to year-over-year (Inaudible) and increase net income for the quarter and year-to-date period did a higher rate base and allowance for funds used during construction at all operating companies. Higher net income for the quarter in year-to-date period delivered non-recoverable expenses and a lower consolidated effective income tax rate. These increases in net income for the quarter and year-to-date periods were partially offset by higher interest expense, resulting from our financing activities for ITC Holdings, which were completed in late 2009. Financial results for the third quarter and year-to-date period also reflect the first July approval of ITC Midwest appreciation study, which revises estimated appreciation range utilized for ITC Midwest. The new depreciation rates are effective January 1, 2010 and result in an annual reduction of depreciation expense of approximately $5 million, as compared to the estimated depreciation expense that was previously reflect in rates for 2010. ITC Midwest posted revenue requirements in transmission rates for 2010,…

(Operator Instructions) We have a question from Daniel Eggers with Credit Suisse. You may begin.

With looking at the strong third quarter results that look like there is always been a response to you just increased reliance coverage of the nickel. Can you may be think about the fall of roughly $0.08 to $0.13 into the fourth quarter as the sort of one-time items that we should be thinking about, obviously don’t know a seasonality? And then also why the nickel been rolling to ‘11?

Okay. I will start at the beginning. First of all, as it relates to Q4, as we talked about previously, the development express is that we have in the business due tend to have in flow from period of period. and I think given some of the progress that we’ve made on a verity of funds with development initiatives, we in due expect in the fourth quarter have some drag adjusted with activities is in advancing those initiatives that we didn’t see in the third quarter. So as we think about the impact in Q3 certainly not of all that is due to the higher realized coverage than what we had forecasted, some other are due to one lower non-recoverable expenses than we had forecasted in that particular quarter, as well as containing to see an overall effect of income-tax rate lower than what we had forecasted. So we don’t expect either the latter few items to contribute to ‘11 results as well as we expect to return more normalized levels in 2011. As for the revenue up with we’re seeing in 2010, some of that will carry forward into 2011 in terms of our cash needs. It certainly at this point, though wasn’t enough for us to justify or suggests that we should change our 2011 earnings guidance.

Okay, that’s helpful. And then looking at SPP, I see I think that on the 25th, I see the priory property projects re filled for higher capital spending. Wasn’t the plan involved with this or as we expect to higher than, I think it started with 310 million of spending.

Our current forecast has about 300 million outstanding associated with the B plan project. And as you recall, I think it was in Q1 of this year that we released that cost estimation for the double circuit 345 kV configuration for the V-plan. That remains the estimate for the project. We obviously provided that publicly in first part of the year and have been working with SPP with that cost estimate since then. So if that’s not an estimate that just came out in the last couple of the weeks, that’s been out for several months now.

Thank you. Our next question comes from Michael Bates with Davidson & Company. You may begin. Michael Bates - Davidson & Company : Hey, guys. Just a quick question for you. Earlier of this year, I remember reading about a potential rule change of the FERC that would remove and then come in, utilities right of first refusal with regards to transmission development. Do you guys have any commentary that you can offer on that or how you expect it to impact your competitive landscape?

Well, first of all, the proposed rulemaking and FERC is seeking comment on it. There is two outcomes obviously that they’ll make no change, make some change or change it totally. I don’t think that with a planning process that we have today, where in the RTOs, you have a pretty much centralized planning for transmission expansion that removing the right of first refusal totally makes much sense. And so I don’t think that they’ll go that way. There does draw the question in those areas where they do not have centralized planning through an RTO. And at which time there’s no way to get a project approved that I think that FERC will take a long hard look at that. Form us personally, we’re in the development business, and so, on the one hand, we’re working real hard to make sure that our development efforts are always competitive. So if they remove it, we’ll continue to compete the best we can. However, on the other side of the coin, we also have bought in a lot of transmission space. And I don’t vision anyone coming in and planning transmission in our space to too aggressively since we’ve been pretty active in getting it done. So I don’t look forward to have much impact on us one way or the other.

I think the one thing I would add to that is that in the RTO markets that we operate in, we don’t necessarily think that the road for us has really been the impediment to building transmission. What’s been the bigger impediment to building transmission are frankly the sort of antiquated rules and the cost allocation methodologies that have existed historically. I think by addressing those, you’re really moving to the larger impediments to building transmission and it’s not really an existing road further. It’s standing in the way of getting transmission build. So we don’t think it needs to be changed, but it’s just that will adapt depending on what direction they go. Michael Bates - Davidson & Company: Sure, I appreciate it. And just the follow-up on the last question that was asked. Your updated guidance so looked a little bit low in light of the earnings growth that we’ve see in the first three quarters of the year. And Cameron, you said that, at least I think, you said that there were development expenses that didn’t really come through in the third quarter that might show up in the fourth quarter. Can you give us an idea of what the impact was in the third quarter, pushing those developments and expenses out?

Well, year-to-date we’ve incurred the development expenses of about $5.6 million and we had about 3.1 in the third quarter. I think as I mentioned before, we have a lot of initiatives on going right now from a development perspective that are moving to the point in the development cycle where we’re going to need to start deploying more dollars for external resources for either economic studies, planning studies and what not, that tend to be bigger drains on the development expenses than we incur in the early stage of developing projects. So I think was obviously cautious as we roll into the balance of the year in terms of advancing these development projects wanting to make sure there were properly supporting those with the right financial resources and obviously, offset them, ensuring that we set expectations that we have a high confidence on our ability to meet. So once that we are sure, we do expect to have increased expenses in the fourth quarter of the year. So sharing with those activities as we continue to move through the pipeline. And I think our guidance reflects our best estimate where we see the full year shaking out all those factors considered.

Thank you. Our next question comes from Jay Dobson with Wunderlich Securities. You may begin.

Just to follow-up on this development expense. You said, it was 5.6 million year-to-date. Is it still short of your expectation, I guess more on an annual basis not specific to tend but we would be spending 10 to 15 a year on recoverable development expenses?

I think that, what we were shared at the Investor Day, Jay was an estimate that would range sort of 15 to 20 million year in total for all non-recurrable activities, which would include our development activities. So we still feel like that’s the right number you know in certain years, the development expenses are going to be greater as we’re advancing projects. But as we said here today, that still feels like a right around on non-recurrable expense, we are in business year-over-year and again it includes things beyond just development activity, there are certain aspects of the business lobbying and charitable donation and other community activity that we do that are not recoverable, so that it’s an aggregate pool of dollars that are set aside for non-recoverable activities of which development typically is the lions share.

Okay. Fair enough. So much to do in the math here and looking like even at the high-end 280 you would be flattish in the fourth quarter. We really have to take that 15 to 20 back out to 5.6 tax effect and see that’d be sort of tend to may be $0.15 drag in the fourth quarter such that it would get you to a flattish sort of number, am I reasoning that right?

Yeah generally, I mean, as I said not all of the balance of the non-recoverable is development. So there are things that we are spending money on and have spent money on through the course of the year that are non-recoverable and will continue in the fourth quarter. But as I said, we do expect some bit of a ramp up in Q4 on some of the development activity, which could cause quarter over quarter be closer to flat, because we didn’t see those same activities in Q3.

Got you. And then SG&A, I know those increase would appear to be largely recoverable since the development of non-recoverable were down at the quarter, but what accounted for that big increase in the SG&A in the quarter?

Yeah, again. If you go back it to ‘09, we made considerable efforts to mitigate expenses and keep expenses down at normally so as a result of the macroeconomic environment that we were experiencing in Michigan. I mean, I think, as you fast forward to 2010, we have returned to more normalized levels of spending from both M&A and SG&A perspective mainly in the recoverable areas as again the economic environment has stabilized we reached that rate for 2010 and we had returned to more normalize business operations as opposed to last year which was very focused on mitigating expenses as a result of the macro issues we were facing.

And then last question, I’m not sure if this is for you or for Joe, I guess the only thing that strikes me and not want to shake my finger at a great quarter, you guys have a lot credit for that, but was there things that changed between the 27, September and now that sort of give you an upside because you did sort of confirmed your guidance on the 27th and I’m just wondering what’s different today, if anything certainly again it’s a very high-class problem to have sitting here with better-than-expected earnings?

Yeah. It’s a fair question and then we’re not oblivious to that. I think, the biggest thing that changed as we got Q3 behind us, we saw roads for September, August, July in the increasing cash flow that resulted from that and that the impacted of that has on our business in terms of (Inaudible) borrowings that we need, holding company level to fund our operations. And that really, probably sitting here between September 28 and today that’s the biggest item that I think impacted our thinking around our full-year guidance as well as the quarter. At the time we had the Investor Day, we didn’t have the quarter closed out, and we just want to prepare to get in front of our skies so to speak in terms of increasing guidance, before we know exactly how the quarter was going to shape out.

And I think the other thing to bolster what Cameron said is that the macroeconomic conditions that existed a year ago, and (Inaudible) the year prior really undermined all of the statistical collection of book data that we have. And we’re really experiencing, if you will, a totally different economy here in southeast Michigan. So we haven’t really got our arms around what those low profiles are going to look like going forward, how roads going to return. We are just now seeing some, what I call coming back to normal activities, especially in the automobile and manufacturing area. And we had extremely warm summer in relation to what had happened in the year prior. So, our ability to forecast those and feel comfortable wasn’t quite what it was a couple of years ago. So, we’ve stayed cautious and conservative all the way.

Thank you (Operator Instructions). Our next question comes from Neil Kalton with Wells Fargo. You may begin.

Just a question, Westar in the last day or two announced an intention to do about a $1 billion worth of lines in Kansas. And I imagine some of these, when you look at the map, some of these might cross over, maybe projects that you have idea that you would like to do longer term as well? And I wondered, your comments on Westar announcements to reactions, is it positive, negative or sort of neutral to your strategy in Kansas?

I would say it’s more neutral to our strategy in Kansas. Our strategy has been to always partner with people to go to transmission. And as a result of that I mean, Westar or anyone else is not the first person to announce that they’re going to build all the transmission to serve everybody in the United States. So these are pretty common events for everybody, but we’re here for the longhaul and we’ll stay there for the longhaul?

I think, as we think about our strategic positioning in that market, given the assets we’ve acquired, the assets we have in construction and development that are going to be in service over the next two to three years, I think we still feel very good about kind of how we are positioned to be successful in the market in the longer-term. We’ve said before the fact that other participants in the market are desirous of building transmission. It’s somewhat of a double edged sword. I mean on the one side, it’s great that other people are recognizing the need and beginning to advocate for the things that we’re advocating for, have been advocating for, for some time now. So the more support there is for the advancement of these types of projects, the more likely it is they are actually going to move forward. And the flip side is, obviously that there is more people instead in participating in it. And I don’t think we certainly have an issue with that. And I think at the end of the day, as we think about how we’re competitively positioned, we very much light our model and we like the attributes we bring to the table. I don’t think it really changes long-term our ability to be successful in that market.

Thank you. I’m showing no further questions at this time. I would now like to turn the conference back over to Gretchen Holloway.

This concludes the question-and-answer portion of our call. Before I end the call today, I’d like to thank everyone who participated. Anyone wishing to hear the conference call replay available through November 2, 2010, should dial toll-free 800-642-1687 for domestic or 706-645-9291 for international. The pass code is 17923639. The webcast of this event will also be archived on the ITC website at https://investor.itc-holdings.com/events.cfm. Goodbye, everyone and have a great day.

Ladies and gentlemen that concludes today’s conference. Thanks for your participation and have a wonderful day.