February 27, 2014
ITC Holdings Corp. (NYSE: ITC) announced its results for the fourth quarter and year-ended December 31, 2013, all of which are reported on a pre-stock split basis. Reported net income for the quarter, measured in accordance with Generally Accepted Accounting Principles (GAAP), was $76.9 million, or $1.45 per diluted common share, compared to $48.3 million or $0.92 per diluted common share for the fourth quarter of 2012. For the year ended December 31, 2013, reported net income was $233.5 million, or $4.42 per diluted common share, compared to $187.9 million, or $3.60 per diluted common share for the same period last year.
Operating earnings for the fourth quarter were $70.0 million, or $1.32 per diluted common share, compared to operating earnings of $57.0 million, or $1.09 per diluted common share for the fourth quarter of 2012. For the year-ended December 31, 2013, operating earnings were $258.6 million, or $4.90 per diluted common share, compared to operating earnings of $216.5 million, or $4.15 per diluted common share for the same period last year. Operating earnings are non-GAAP measures that exclude the following items:
'After-tax impacts associated with the Entergy Corporation (Entergy) transaction consisting of a gain of approximately $7.1 million or $0.13 per diluted common share for the fourth quarter 2013 and after-tax expenses of $8.7 million or $0.17 per diluted common share for the fourth quarter 2012. The gain for the fourth quarter of 2013 reflects a reduction in the income tax provision and a corresponding increase in net income related to the tax effects of Entergy transaction expenses that were previously considered non-deductible for tax purposes, but, due to the termination of the transaction in December 2013, will now be deductible. This amount includes $5.6 million associated with expenses that were incurred in 2012 and 2011. For the year-end periods of December 31, 2013 and December 31, 2012, the impacts consisted of after-tax expenses of approximately $24.8 million or $0.47 per diluted common share and $20.3 million or $0.39 per diluted common share, respectively.
'After-tax expenses associated with certain acquisition accounting adjustments for ITC Midwest, ITCTransmission, and METC resulting from the FERC audit order on ITC Midwest issued in May 2012 of less than $0.1 million for both the fourth quarter 2013 and 2012 and $0.3 million or $0.01 per diluted common share and $8.3 million or $0.16 per diluted common share for the year-ended December 31, 2013 and 2012, respectively.
Operating earnings for the fourth quarter increased by $13.0 million, or $0.23 per diluted common share, compared with the same period last year. For the year-ended December 31, 2013, operating earnings increased $42.1 million, or $0.75 per diluted common share compared to full year 2012 results. The increase in the fourth quarter 2013 was largely attributable to higher income associated with increased rate base at our operating companies. The increase for the year-ended December 31, 2013 was largely attributable to higher income associated with increased rate base and AFUDC at our operating companies.
ITC invested $844.5 million in capital projects at its operating companies during the year-ended December 31, 2012, including $220.0 million at ITCTransmission, $176.9 million at METC, $301.9 million at ITC Midwest and $145.7 million at ITC Great Plains.
"Despite the challenges that ITC faced during 2013, we delivered on all of our key operational and financial objectives for the year, which is a testament to the strength of our organization," said Joseph L. Welch, chairman, president and CEO of ITC. "Although the outcome of the Entergy transaction was not what we hoped for when we chose to pursue it, we have emerged from this endeavor a stronger company. We are entering 2014 with clarity and an enhanced focus on our strategy to invest in transmission infrastructure for the benefit of customers while delivering growth and returns to our shareholders and providing strong leadership in an evolving industry."
EPS and Capital Expenditure Guidance
For 2014, ITC is reaffirming its full year operating earnings per share guidance of $5.50 to $5.70 per share on a pre-stock split basis ($1.83 to $1.90 on a split adjusted basis). ITC is also reaffirming its 2014 capital guidance of $730 to $840 million, which includes $250 to $285 million for ITCTransmission, $130 to $150 million for METC, $255 to $290 million for ITC Midwest and $95 to $115 million for ITC Great Plains.
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ITC Holdings Corp.
27175 Energy Way
United States, 48377