FORM 8-K

ITC HOLDINGS CORP.

(Current report filing)

Filed 11/6/2006 For Period Ending 11/6/2006

Address 39500 ORCHARD HILL PLACE SUITE 200

NOVI, Michigan 48375

Telephone 248- 374-7100

CIK 0001317630

Industry Electric Utilities

Sector Utilities

Fiscal Year 12/31

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

FORM 8-K

CURRENT REPORT Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2006

ITC HOLDINGS CORP. (Exact Name of Registrant as Specified in its Charter)

Commission File Number: 001-32576

39500 Orchard Hill Place, Suite 200, Novi, Michigan 48375 (Address of principal executive offices) (zip code)

(Registrant’s telephone number, including area code): (248) 374-7100

Not Applicable (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

� Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

� Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

� Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

� Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Michigan

(State of Incorporation) 32-0058047

(IRS Employer Identification No.)

TABLE OF CONTENTS

Item 7.01 Regulation FD Disclosure Item 9.01. Financial Statements and Exhibits SIGNATURES EXHIBIT INDEX Presentation, dated November 6, 2006

Table of Contents

Item 7.01 Regulation FD Disclosure

On November 6, 2006, ITC Holdings Corp. will make a presentation to the Edison Electric Institute Financial Conference that includes the slides filed as Exhibit 99.1 to this Current Report on Form 8-K, which are incorporated by reference herein.

The information contained in this Item 7.01 is not filed for purposes of the Securities Exchange Act of 1934 and is not deemed incorporated by reference by any general statements incorporating by reference this report or future filings into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates the information by reference. By including this Item 7.01 disclosure in the filing of this Current Report on Form 8-K and furnishing this information, we make no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

November 6, 2006

99.1 Presentation, dated November 6, 2006

ITC HOLDINGS CORP. By: /s/ Daniel J. Oginsky

Daniel J. Oginsky Its: Vice President, General Counsel and Secretary

Table of Contents

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION 99.1 Presentation, dated November 6, 2006

Exhibit 99.1

ITC Holdings Corp. EEI Financial Conference November 2006

Cautionary Statement This presentation may contain statements about fu ture events and ITC Holdings Corp.'s (the "Company") out look and expectat ions, which are forward-looking statements. Any statement in this presentat ion that is not a historical fact may be deemed to be a forward-looking statement. These forward -looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the Company's control, and which could cause the Company's actual resu lts , performance or achievements to be materially different. Wh ile the Company believes that the assumptions concern ing future events are reasonable, it cautions that there are inherent d ifficu lties in predicting certain important factors that could impact the futu re performance o r resul ts of i ts business. These risks and uncertainties are discussed in more detai l in the Company's Form 10-K fi led on March 16 th, 2006; firs t quarter Form 10-Q fi led on May 4th, 2006; second quarter Form 10-Q fi led on August 10, 2006, prospectus filed on October 4, 2006 and third quarter Form 10-Q fi led on November 2, 2006, copies of wh ich are available to the pub lic. The Company express ly disclaims any inten tion or obligat ion to revise or update any forward -looking statements whether as a result of new information, futu re events , or otherwise.

In this presentat ion we have presented Adjusted E BITDA(1), which is a non-GAAP financial measure. A non-GAAP financial measure is general ly defined as one that purports to measure h isto rical o r future financial performance, financial position or cash flows but excludes or includes amounts that would not be so ad justed in the most comparab le GAAP measure. We define Adjusted EBITDA as net income plus income taxes, depreciation and amortization expense and interest expense, excluding allow ance for equity funds used during construction and certain other items not related to operating performance. We use Adjusted EBIT DA on a consol idated basis to assess our overall financial and operat ing performance. We bel ieve this non-GAAP measure, as we have defined it , is helpful in identi fying trends in our day -to-day performance because the items excluded have lit tle or no s igni ficance on our day -to-day operations. Adjusted EBITDA provides us with a measure o f financial performance independent of items that are beyond the con trol of management in the short-term, such as depreciation , taxation and interest expense associated with our capi tal structure. T his metric measures our financial performance based on operat ional factors that management can impact in the short-term, namely the cost structure o r expenses of the organization. Adjusted EBITDA is one of the metrics used by senior management and the board of directors to review the financial perfo rmance of the business on a monthly basis and to determine the level of bonuses for management and employees. Adjusted EBITDA is also used by research analysts and investo rs to evaluate the performance and value of companies in ou r industry. An investor or po tential investor may find this item important in evaluating our performance, resu lts o f operations and financial posi tion . We use non-GAAP financial measures as a supplement to our GAAP resu lts in order to p rov ide a more complete understanding of the factors and trends affecting our business. However, Adjusted EBITD A has limitat ions as an analy tical too l. Adjusted EBITDA is not an alternative to net income, operating income or cash flow s from operating activities as calculated and presen ted in accordance with GAAP. You should not rely on Adjusted EBITDA as a substitute for any such GAAP financial measure. In addition , because Adjusted E BITDA is not a measure of financial performance under GAAP and is suscep tible to varying calculat ions, Adjusted EBITDA, as presented in this presentat ion, may differ from and may no t be comparable to s imi larly ti tled measures used by other compan ies. Use Of Non-GAAP Financial Measures (1 ) Please refer to the append ix for a reconcil iation of ad justed EBITDA to net income.

ITC Overview

Who Is ITC? ITC Holdings Corp. ("ITC"), through i ts two operat ing subsidiaries, ITCT ransmiss ion and Michigan Electric Transmission Company ("METC"), operates fu lly -regulated , high-voltage transmiss ion systems covering most of Michigan's lower peninsula Largest independent t ransmiss ion company and 10th largest t ransmission company overall in the U.S. in terms of t ransmission load served (1) Only publicly traded company engaged exclus ively in the transmiss ion o f electricity in the U.S. Rate regulation only at the Federal level by the Federal Energy Regulato ry Commission ("FERC") His toric underinvestment in t ransmiss ion systems provides opportunity to build rate base and earn ings while improving grid reliabi lity and lowering delivered energy costs ITC combines significant growth from investing in our transmission systems with the predictab ili ty and dividend payout of a regulated ut ili ty Serv ice Territory Map Based on transmission load served (annual electric retai l sales in the service territory) as found in "Edison Electric Inst itute Profile: Rankings of Shareho lder-Owned Electric Companies", April 2005.

Our Bus iness ITCTransmission and MET C operate contiguous, fu lly -regulated , high -voltage systems that transmit electricity from generat ing s tations throughout Michigan and surround ing areas to local electricity distribut ion faci lit ies These local d istribution facil ities , connected to ou r systems, serve an area comprising substantial ly all of the lower peninsula of Michigan, wh ich had a popu lation of approximately 9.8 mill ion peop le as of December 31, 2005 Transmission is general ly considered the lowest risk component of the electric pow er sector We provide an integral service with minimal commodity or energy demand risk Transmission rates are FERC regulated th rough the Midwest ISO ("MISO") Attachment O template Formu laic rate design adjusts annual ly for cap ital investments, recoverable expenses and load to al low ITCTransmission and METC to earn their allowed returns Attractive al lowed ROE designed to encourage investment (13.88% at ITCTransmiss ion; 13.38% at METC) We Serve as the Conduit Between Generation and End-Use Consumers

Stable Revenues and Investment Recovery Transmission rate ad justed annually using FERC approved formula rate template Rates applied to monthly peak network demand which removes dai ly variabil ity Low Variabili ty in Annual Revenues Rates adjust annual ly to allow recovery of costs and earn the al lowed ROE Annual adjustment based on operating expenses, capex and load (volumes) (1) Codified in MISO "Attachment O" Efficient Rate Sett ing Mechanism Prudent capital investment added to rate base on an annual basis Challenge to rates: third-party must file comp laint and then prove " imprudence" Timely Return on and Recovery of Investment ITCTransmission's uses fo recasted data; METC currently uses historical data subject to pending FERC app lication.

Attachment O Tariff Calcu lation Allowed Return Operating Expenses Taxes and Depreciation & Amortization Revenue Requirement + + Establish Rate Base Weighted Average Cost of Cap ital Al lowed Return + Step 2 Step 3 Step 1 Revenue Requirement Network Load Attachment O Calculated Rate Revenue Credits - Attachment O is a FERC-approved cost-of-service rate setting mechanism that is appl ied annually to determine the rate charged for transmission service. Formula Inputs: Expenses, including depreciation and amortization, and network load Rate base including recent capital investment, accumulated deferred income tax adjustments and certain regulatory assets Capital structure

Mechanics of Historical Attachment O Under Historical Attachment O, there is an inherent gap of five to 17 months from when a project goes into service or from when expenses are incurred to when these costs are reflected in rates Mechanics of Forward Looking Attachment O Under Forward Look ing Attachment O, the five to 17 month recovery gap will be el iminated , matching cost incurrence with cost recovery ITCTransmission Forward Looking Attachment O

Lack of Industry Investment Costs from August 2003 blackou t: $4 - $10Bn Annual lost production costs to U.S. businesses: $46Bn in power outages $6.7Bn in power qual ity issues (3 ) (1) According to the E dison Electric Insti tute ("EEI"). Figures are quo ted in 2003 do llars. (2) According to Department of Energy ("DOE"), annual electricity consumption more than doubled from 1975 to 2001. (3) According to Electric Pow er Research Insti tute ("EPRI"). (4) According to a September 2004 DOE study regard ing cost of power interrupt ions to U.S. electricity customers. Estimated investment required to modernize the grid : $50 - $100Bn (4) Outage Costs Transmission investment in the last 30 years has lagged while the transmission system continues to be put under increasing stress Demand Growth Growth in electricity consumption Annual demand has doubled From 1975 to 2001(2) Underinvestment Decline in transmiss ion investment $12.8 Bn decl ine from the 10-year period 1975-1984 to the 10-year period 1992-2001 (1)

Transmiss ion A ssets History of Under-Investment Breakers coated in rust Rusted cathodic protection device insecurely mounted on a jack s tand Cotter pin hold ing up a shield wire that is ready to give way Vegetation growing into the l ines

Significant Cap ital Investment Opportuni ties Needed investment to rebuild and upgrade the exis ting electric t ransmiss ion system Key to meeting end use consumer, customer, regu latory and investors' goals ITC has incremental opportunities for capital investments outs ide our exis ting serv ice territories ITCTransmiss ion has experience and a proven track record of deploying capital and upgrading the transmiss ion system METC provides capital investment opportun ities similar to ITCTransmission's Pro forma comb ined rate base of ITCTransmission and METC as o f D ecember 31, 2005 is approximately $1 b illion Opportunity to sign ifican tly g row rate base by invest ing $1 .6 bil lion between 2005 and 2011 in ITCTransmiss ion's and METC's systems Capital Investment Pro fi le Refer to appendix fo r more information regarding projected cap ital investment.

ITCTransmission Capital Program ITCTransmiss ion invested $82 mil lion in 2004 and $118 million in 2005 to upgrade southeast Michigan's transmission grid Caniff- Stephens 345kV Underground Cable Replacement Project 345kV Breakers - Before New Milan 345-120 kV Station 345kV Breakers - After Replacement

Addit ional Avenues For Growth ITC Grid Development LLC was fo rmed to b ring improvements to the U.S. electricity system by partnering with en tit ies in regions where transmission investment is needed to improve reliabil ity and address local energy needs Expect to only pursue development opportuni ties that dupl icate ITCTransmission's business model Looks and operates like ITCTransmission FERC-regulated Formulaic rate setting mechan ism provides certainty of recovery We currently anticipate incurring approximately $3 .8 mi llion in 2007 for development expenses There are no commitments that would resul t in additional expenses i f we elect to discon tinue these activities As an extension of our existing strategy, ITC formed two new subs idiaries th rough which to pu rsue incremental opportunit ies for capi tal investment outs ide our exis ting serv ice territories ITC Great Plains L LC, a subsid iary of IT C Grid Development, was fo rmed to focus speci fically on regulated transmission investment opportun ities in Kansas and the Great Plains region Office opened in Topeka, Kansas in July 2006

Financial Overview

Assumes $10 mill ion o f capex is placed in service in Year 0, a 40% debt/capi tal ratio at OpCo with a 13 .88% ROE and 70% debt/cap ital ratio for Holdco on a consolidated basis. The Impact of Capital on Earnings (1) $10mm o f capital investments placed in service will generate approximately $0 .7mm of earnings per year (1) Under historical Attachment O, the fu ll impact on earnings is realized in year 3 based on the his torical rate construct With forward looking Attachment O, the fu ll impact of cap ital investments immediately impacts ITCTransmission's earnings in that year Impact Under Forward Looking Attachment O Impact Under Historical Attachment O $1.75 MM Adjusted EBITDA E ach Year $1.75 MM Ad justed EBITDA $1 .55 MM Adjusted EBITDA $.64 MM Adjusted EBITD A

Dividends and Investment Grade Ratings ITC is committed to both earnings and div idend growth Annual ized d ividend of $1.10 /share payab le quarterly (approximately a 5% increase from IPO) ITC intends to grow i ts dividend approximately 2-4% per year (1) Commitment to investment grade ratings S&P affi rmed ITC and ITCTransmission's ratings on September 22, 2006 The out look is pos itive All other ratings are on stable outlook Subject to the discretion of our board o f d irecto rs and dependent on various factors including , among other things, net income, financial condition, cash requirements and future prospects.

Summary

ITC Management Team's Success in Delivering Shareho lder Value Cont inued Operational Excellence Improved Financial Pro fi le Capital Program Increased 5 - 7 year capex plan to $1.6 bill ion Accelerated revenue growth by surpass ing ITCTransmission 's capital investment targets Invested $118 mi llion in 2005 (IPO fo recast was $100 mi llion) and 2006 guidance is approximately $145 mil lion Ach ieved top -quart ile perfo rmance in key rel iabili ty measures such as average circu it momentary ou tages and average circu it sustained outages among part icipants in an independen t industry benchmarking study Successfully operated ITCTransmission's system with no system outages at all -time record peak load in August 2006 Received approval for forward looking Attachment O for ITCTransmission, which resu lted in a 25% increase in 2007 pro forma earnings gu idance Obtained FERC approval for forward look ing Attachment O (forward test year) for ITCTransmission FE RC order affirms 13.88% ROE and confirmed no expiration of Attachment O Remain closely al igned with FERC pol icy objectives of encourag ing investment in the transmission grid, as demonstrated by recent N otice of Proposed Rulemaking (NOPR) on transmiss ion incent ives Regulatory Leadership Announced METC acquis ition: t ransaction is consis tent with IPO objective to acqu ire transmission systems in MISO in need of cap ital improvement Accretive to earnings and long-term growth Created an integrated platform that is posi tioned fo r fu rther consolidat ion Acquisit ions

Appendix

ITC Holdings 2006 (1) Ad justed EBITDA Reconci liation of Non-GAAP Measures Pro forma for the METC acquisition.

ITC Holdings Pro Forma 2007(1) Adjusted EBIT DA Reconciliation o f Non-GAAP Measures Pro forma for the METC acquisition.

Capital Expenditures Based on IT CTransmission's studies, ITCTransmission sees the need to spend approximately $600 million over five to seven years beginning in 2005 to rebui ld exis ting transmission property, p lant and equipment. We expect addit ional investment of up to approximately $400 million over the same period to upgrade the system to take into account demographic changes in Sou theastern Michigan that have impacted transmission load and the changing ro le that t ransmiss ion p lays in meet ing the needs of the who lesale market. This additional investment amount also may be needed to accommodate either the siting of new generat ion or to increase import capacity in response to expected growth in peak electrical demand. Approx imately $100 mill ion may be invested over this period for the primary benefit of rel ieving congestion in the transmission system in Sou theastern Michigan, but the total of all these investments is expected not to exceed $1 bil lion. However, ITCTransmission's and METC's capital expenditures may be lower than ant icipated for any reason, including , among other things, the impact of weather condit ions, union strikes, labor shortages, material and equipment p rices and availab ility, ou r abi lity to ob tain financing for such expend itures, i f necessary, limitat ions on the amount o f construction that can be undertaken on our system at any one t ime or regulato ry approvals for reasons relating to environmental, s iting or regional planning issues or as a result o f legal proceedings and variances between estimated and actual costs of construction contracts awarded. The al locat ion of our budgeted investments among ITCT ransmiss ion's and METC's transmission systems remains cont ingent on our assessment o f market conditions and opportunities and other factors. Therefore, future investments in ITCTransmission's or METC's transmission systems may be higher or lower than cu rrently planned, o r may be al located different ly between ITCTransmission and METC.