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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Itc Holdings Corp. | NYSE:ITC | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 45.50 | 0.00 | 01:00:00 |
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☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
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December 31, 2019
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Michigan
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32-0058047
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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None
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None
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None
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller Reporting Company
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Emerging growth company
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o
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o
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☑
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☐
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☐
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Page
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•
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“ITC Great Plains” are references to ITC Great Plains, LLC, a wholly-owned subsidiary of ITC Holdings;
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•
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“ITC Holdings” are references to ITC Holdings Corp. and not any of its subsidiaries;
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“ITC Interconnection” are references to ITC Interconnection LLC, a wholly-owned subsidiary of ITC Holdings;
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“ITC Midwest” are references to ITC Midwest LLC, a wholly-owned subsidiary of ITC Holdings;
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“ITCTransmission” are references to International Transmission Company, a wholly-owned subsidiary of ITC Holdings;
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•
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“METC” are references to Michigan Electric Transmission Company, LLC, a wholly-owned subsidiary of MTH;
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“MISO Regulated Operating Subsidiaries” are references to ITCTransmission, METC and ITC Midwest together;
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“MTH” are references to Michigan Transco Holdings, LLC, the sole member of METC and a wholly-owned subsidiary of ITC Holdings;
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“Regulated Operating Subsidiaries” are references to ITCTransmission, METC, ITC Midwest, ITC Great Plains and ITC Interconnection together; and
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“Company”, “we,” “our” and “us” are references to ITC Holdings together with all of its subsidiaries.
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“2017 Omnibus Plan” are references to the Company’s February 27, 2017 long-term equity incentive plan as amended July 10, 2017 and February 4, 2020;
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“Executive Omnibus Plan” are references to the Company’s February 4, 2020 long-term equity incentive plan;
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“ACPB” are references to an award under the annual corporate performance bonus plan;
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“ADIT” are references to accumulated deferred income tax;
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“AFUDC” are references to an allowance for funds used during construction;
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“ALJ” are references to an administrative law judge;
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“Ancillary Services Agreement” are references to the Amended and Restated Purchase and Sale Agreement for Ancillary Services entered into by METC and Consumers Energy dated as of April 29, 2002;
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“AOCI” are references to accumulated other comprehensive income or (loss);
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“ARAM” are references to the average rate assumption method of amortization;
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“CIA” are references to the Coordination and Interconnection Agreement entered into by ITCTransmission and DTE Electric dated as of February 28, 2003;
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•
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“Consumers Energy” are references to Consumers Energy Company, a wholly-owned subsidiary of CMS Energy Corporation;
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“D.C. Circuit Court” are references to the U.S. Court of Appeals for the District of Columbia Circuit;
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“DCF” are references to discounted cash flow;
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“DOE” are references to the Department of Energy;
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“DTE Electric” are references to DTE Electric Company, a wholly-owned subsidiary of DTE Energy;
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“DTE Energy” are references to DTE Energy Company;
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“DTIA” are references to the Distribution-Transmission Interconnection Agreement entered into by ITC Midwest and IP&L dated as of December 17, 2007 and amended and restated effective as of December 1, 2016;
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“DT Interconnection Agreement” are references to the Amended and Restated Distribution-Transmission Interconnection Agreement entered into by METC and Consumers Energy dated April 1, 2001 and most recently amended and restated effective as of January 1, 2015;
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“Easement Agreement” are references to the Amended and Restated Easement Agreement entered into by METC and Consumers Energy dated April 29, 2002 and as further supplemented;
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“Eiffel” are references to Eiffel Investment Pte Ltd, a private limited company duly organized and validly existing under the laws of Singapore that is the GIC subsidiary that is a minority investor in ITC Investment Holdings and successor to Finn Investment Pte Ltd;
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•
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“ESPP” are references to the Fortis Amended and Restated 2012 Employee Share Purchase Plan;
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“Exchange Act” are references to the Securities Exchange Act of 1934, as amended;
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“FASB” are references to the Financial Accounting Standards Board;
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“FERC” are references to the Federal Energy Regulatory Commission;
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“Fortis” are references to Fortis Inc.;
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“FortisUS” are references to FortisUS Inc., an indirect subsidiary of Fortis;
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“Formula Rate” are references to a FERC-approved formula template used to calculate an annual revenue requirement;
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“FPA” are references to the Federal Power Act;
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“GAAP” are references to accounting principles generally accepted in the United States of America;
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“Generator Interconnection Agreement” are references to the Amended and Restated Generator Interconnection Agreement entered into by Consumers Energy and METC dated as of April 29, 2002 and most recently amended effective as of November 1, 2018;
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“GIC” are references to GIC Private Limited;
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•
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“GIAs” are references to generator interconnection agreements;
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“GIOA” are references to the Generator Interconnection and Operation Agreement entered into by DTE Electric and ITCTransmission dated as of February 28, 2003;
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“Initial Complaint” are references to a November 2013 complaint to the FERC under Section 206 of the FPA regarding the base ROE;
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“ITC Investment Holdings” are references to ITC Investment Holdings Inc., a majority owned indirect subsidiary of Fortis in which GIC has an indirect minority ownership interest;
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“IP&L” are references to Interstate Power and Light Company, an Alliant Energy Corporation subsidiary;
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“IRS” are references to the Internal Revenue Service;
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“ISO” are references to Independent System Operators;
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“KCC” are references to the Kansas Corporation Commission;
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“kV” are references to kilovolts (one kilovolt equaling 1,000 volts);
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“kW” are references to kilowatts (one kilowatt equaling 1,000 watts);
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“LBA” are references to a Local Balancing Authority;
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“LGIA” are references to the Large Generator Interconnection Agreement entered into by ITC Midwest, IP&L, and MISO dated as of December 20, 2007 and amended as of August 2, 2017;
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“LIBOR” are references to the London Interbank Offered Rate;
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“MECS” are references to the Michigan Electric Coordinated Systems;
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“Merger Agreement” are references to the agreement and plan of merger between Fortis, FortisUS, Element Acquisition Sub, Inc. and ITC Holdings for the merger;
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“Mid-Kansas” are references to Mid-Kansas Electric Company LLC;
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“Mid-Kansas Agreement” are references to an Amended and Restated Maintenance Agreement entered into by Mid-Kansas and ITC Great Plains dated as of August 24, 2010, and most recently amended effective as of March 6, 2017;
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“MISO” are references to the Midcontinent Independent System Operator, Inc., a FERC-approved RTO which oversees the operation of the bulk power transmission system for a substantial portion of the Midwestern United States and Manitoba, Canada, and of which ITCTransmission, METC and ITC Midwest are members;
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“MISO ROE Complaints” are references to the Initial Complaint and the Second Complaint;
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“MOA” are references to the Master Operating Agreement entered into by ITCTransmission and DTE Electric dated as of February 28, 2003;
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“Moody’s” are references Moody’s Investor Service, Inc.;
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“MVPs” are references to multi-value projects, which have been determined by MISO to have regional value while meeting near-term system needs;
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“MW” are references to megawatts (one megawatt equaling 1,000,000 watts);
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“NERC” are references to the North American Electric Reliability Corporation;
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“NOLs” are references to net operating loss carryforwards for income taxes;
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“November 2018 Order” are references to an order issued by the FERC on November 15, 2018 regarding MISO ROE Complaints;
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“November 2019 Order” are references to an order issued by the FERC on November 21, 2019 regarding MISO ROE Complaints;
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“NYSE” are references to the New York Stock Exchange;
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“Operating Agreement” are references to the Amended and Restated Operating Agreement entered into by Consumers Energy and METC dated as of April 29, 2002;
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“OSA” are references to the Operations Services Agreement for 34.5 kV Transmission Facilities entered into by ITC Midwest and IP&L effective as of January 1, 2011;
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“PBU” are references to a performance-based unit;
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“PCBs” are references to polychlorinated biphenyls;
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“PJM” are references to PJM Interconnection LLC, a FERC-approved RTO which oversees the operation of the bulk power transmission system for a substantial portion of the Eastern United States, and of which ITC Interconnection is a member;
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“ROE” are references to return on equity;
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“RSGM” are references to the Reverse South Georgia Method of amortization;
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“RTO” are references to Regional Transmission Organizations;
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“SBU” are references to a service-based unit;
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“SEC” are references to the Securities and Exchange Commission;
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“Second Complaint” are references to an additional complaint filed on February 12, 2015 with the FERC under Section 206 of the FPA regarding the base ROE;
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“September 2016 Order” are references to an order issued by the FERC on September 28, 2016 regarding the Initial Complaint;
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“Shareholders Agreement” are references to the Shareholders’ Agreement, dated as of October 14, 2016 by and among the Company, ITC Investment Holdings, FortisUS, Eiffel (as successor to Finn Investment
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“SPP” are references to Southwest Power Pool, Inc., a FERC-approved RTO which oversees the operation of the bulk power transmission system for a substantial portion of the South Central United States, and of which ITC Great Plains is a member;
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“S&P” are references to S&P Global Ratings;
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“TCJA” are references to the Tax Cuts and Jobs Act of 2017, a comprehensive tax reform bill enacted on December 22, 2017;
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“TO” are references to transmission owner; and
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“ULCS” are references to Utility Lines Construction Services, LLC
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asset planning;
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engineering, design and construction;
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asset protection and performance;
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cyber security operations and engineering;
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maintenance; and
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real time operations.
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actual or forecasted loads;
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regional economic conditions;
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weather conditions;
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union strikes or labor shortages;
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material and equipment prices and availability;
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variances between estimated and actual costs of construction contracts awarded;
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our ability to obtain financing for such expenditures, if necessary;
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limitations on the amount of construction that can be undertaken on our system or transmission systems owned by others at any one time;
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regulatory requirements relating to our rate construct, including our ability to recover costs;
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the potential for greater competition;
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environmental, siting or regional planning issues; and
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legal proceedings.
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If future cash flows are insufficient, we may not be able to make principal or interest payments on our debt obligations, which could result in the occurrence of an event of default under one or more of those debt instruments.
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We may need to increase our indebtedness in order to make the capital expenditures and other expenses or investments planned by us.
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Our indebtedness has the general effect of reducing our flexibility to react to changing business and economic conditions insofar as they affect our financial condition. A substantial portion of the dividends and payments in lieu of taxes we receive from our subsidiaries will be dedicated to the payment of interest on our indebtedness, thereby, reducing our available cash.
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In the event that we are liquidated, the creditors of our subsidiaries will be entitled to payment in full of the subsidiaries’ indebtedness prior to making any payments to ITC Holdings for the payment of its indebtedness.
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We currently have debt instruments outstanding with short-term maturities or relatively short remaining maturities. Our ability to secure additional financing prior to or after these facilities mature, if needed, may be substantially restricted by the existing level of our indebtedness and the restrictions contained in our debt instruments. Additionally, the interest rates at which we might secure additional financings may be higher than our currently outstanding debt instruments or higher than forecasted at any point in time, which could adversely affect our business, financial condition, results of operations and cash flows.
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Market conditions could affect our access to capital markets, restrict our ability to secure financing to make the capital expenditures and investments and pay other expenses planned by us which could adversely affect our business, financial condition, cash flows and results of operations.
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incur additional indebtedness;
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engage in sale and lease-back transactions;
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create liens or other encumbrances;
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enter into mergers, consolidations, liquidations or dissolutions, or sell or otherwise dispose of all or substantially all of our assets;
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create and acquire subsidiaries; and
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pay dividends or make distributions on our stock or on the stock or member capital of our subsidiaries.
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approximately 15,900 circuit miles of overhead and underground transmission lines rated at voltages of 34.5 kV to 345 kV, along with related transmission towers and poles;
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station assets, such as transformers and circuit breakers, at approximately 660 stations and substations which either interconnect our Regulated Operating Subsidiaries’ transmission facilities or connect our Regulated Operating Subsidiaries’ facilities with generation or distribution facilities owned by others;
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other transmission equipment necessary to safely operate the system (e.g., monitoring and metering equipment);
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warehouses and related equipment; and
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associated land held in fee, rights-of-way and easements.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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ITC Holdings and Subsidiaries
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||||||||||||||||||
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Year Ended December 31,
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||||||||||||||||||
(In millions)
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2019
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2018
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2017
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2016
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2015
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||||||||||
OPERATING REVENUES (a) (b)
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Transmission and other services
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$
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1,286
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$
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1,192
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$
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1,226
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$
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1,142
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$
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1,025
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Formula Rate true-up
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41
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(36
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)
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(15
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)
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(17
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)
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20
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|||||
Total operating revenues
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1,327
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|
|
1,156
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|
|
1,211
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|
|
1,125
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1,045
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OPERATING EXPENSES
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Operation and maintenance
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113
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|
109
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|
|
110
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|
|
114
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|
|
113
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|||||
General and administrative (c) (d)
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138
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|
|
127
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|
|
121
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|
|
234
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|
|
140
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|||||
Depreciation and amortization
|
203
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|
|
180
|
|
|
169
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|
|
158
|
|
|
145
|
|
|||||
Taxes other than income taxes
|
118
|
|
|
109
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|
|
103
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|
|
93
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|
|
82
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|||||
Other operating (income) and expense, net
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—
|
|
|
(4
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Total operating expenses (d)
|
572
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|
|
521
|
|
|
501
|
|
|
598
|
|
|
479
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|
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OPERATING INCOME (d)
|
755
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|
|
635
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|
|
710
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|
|
527
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|
|
566
|
|
|||||
OTHER EXPENSES (INCOME)
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|
|
|
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Interest expense, net
|
224
|
|
|
224
|
|
|
224
|
|
|
211
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|
|
204
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Allowance for equity funds used during construction
|
(29
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)
|
|
(33
|
)
|
|
(33
|
)
|
|
(35
|
)
|
|
(28
|
)
|
|||||
Other (income) and expenses, net (d)
|
—
|
|
|
3
|
|
|
4
|
|
|
8
|
|
|
6
|
|
|||||
Total other expenses (income) (d)
|
195
|
|
|
194
|
|
|
195
|
|
|
184
|
|
|
182
|
|
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INCOME BEFORE INCOME TAXES
|
560
|
|
|
441
|
|
|
515
|
|
|
343
|
|
|
384
|
|
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INCOME TAX PROVISION (e)
|
132
|
|
|
111
|
|
|
196
|
|
|
97
|
|
|
142
|
|
|||||
NET INCOME
|
$
|
428
|
|
|
$
|
330
|
|
|
$
|
319
|
|
|
$
|
246
|
|
|
$
|
242
|
|
(a)
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The decrease in operating revenues in 2018 was due to a reduction in taxes collected through our Regulated Operating Subsidiaries’ Formula Rates as a result of the reduction in the U.S. federal corporate income tax rate from 35% to 21% effective for tax years beginning after 2017.
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(b)
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We recognized an increase in operating revenues of $69 million in 2019 and a reduction in operating revenues of $80 million and $115 million in 2016 and 2015, respectively, relating to the refund obligations for the MISO ROE Complaints as described in Note 19 to the consolidated financial statements.
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(c)
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During 2016, we expensed external legal, advisory and financial services fees of $55 million related to the Merger Agreement and approximately $41 million due to the accelerated vesting of the share-based awards that occurred as a result of the Merger Agreement. The external and internal costs related to the Merger Agreement were recorded at ITC Holdings and have not been included as components of revenue requirement at our Regulated Operating Subsidiaries.
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(d)
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All amounts presented reflect the change in the authoritative guidance issued by the FASB regarding net periodic pension and postretirement benefit non-service costs which are now included in the line “Other (income) and expenses, net”. This change was adopted retrospectively by us in 2018.
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(e)
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The decrease in income tax provision in 2018 was due to the reduction in the U.S. federal corporate income tax rate from 35% to 21% effective for tax years beginning after 2017. During 2016, we recognized an income tax benefit of $27 million for excess tax deductions as a result of adopting the accounting guidance associated with share-based payments.
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ITC Holdings and Subsidiaries
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||||||||||||||||||
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December 31,
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||||||||||||||||||
(In millions)
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2019
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|
2018
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2017
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2016
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2015
|
||||||||||
BALANCE SHEET DATA:
|
|
|
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|
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Cash and cash equivalents
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
66
|
|
|
$
|
8
|
|
|
$
|
14
|
|
Working capital (deficit)
|
(471
|
)
|
|
(308
|
)
|
|
(302
|
)
|
|
(400
|
)
|
|
(550
|
)
|
|||||
Property, plant and equipment, net
|
8,582
|
|
|
7,910
|
|
|
7,309
|
|
|
6,698
|
|
|
6,110
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|
|||||
Goodwill
|
950
|
|
|
950
|
|
|
950
|
|
|
950
|
|
|
950
|
|
|||||
Total assets
|
10,058
|
|
|
9,329
|
|
|
8,823
|
|
|
8,223
|
|
|
7,555
|
|
|||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
ITC Holdings
|
2,968
|
|
|
2,767
|
|
|
2,728
|
|
|
2,387
|
|
|
2,304
|
|
|||||
Regulated Operating Subsidiaries
|
2,839
|
|
|
2,571
|
|
|
2,373
|
|
|
2,203
|
|
|
2,125
|
|
|||||
Total debt
|
5,807
|
|
|
5,338
|
|
|
5,101
|
|
|
4,590
|
|
|
4,429
|
|
|||||
Total stockholder’s equity
|
$
|
2,232
|
|
|
$
|
2,051
|
|
|
$
|
1,920
|
|
|
$
|
1,901
|
|
|
$
|
1,709
|
|
|
ITC Holdings and Subsidiaries
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
CASH FLOWS DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
$
|
865
|
|
|
$
|
769
|
|
|
$
|
755
|
|
|
$
|
750
|
|
|
$
|
701
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
Our capital expenditures of $865 million at our Regulated Operating Subsidiaries during the year ended December 31, 2019, as described below under “— Capital Investment and Operating Results Trends,” resulting primarily from our focus on improving system reliability, increasing system capacity and upgrading the transmission network to support new generating resources, which includes electric transmission asset acquisitions from Consumers Energy of $77 million, of which $34 million is an acquisition premium that is excluded from rate base;
|
•
|
Debt issuances and repayments as described in Note 11 to the consolidated financial statements, including the issuance of Senior Secured Notes by METC, First Mortgage Bonds by ITCTransmission and borrowings under our revolving and term loan credit agreements and commercial paper program to fund capital investment at our Regulated Operating Subsidiaries as well as for general corporate purposes;
|
•
|
Issuance of the November 2019 Order related to the MISO ROE Complaints, as described in Note 19 to the consolidated financial statements, which resulted in a reduction to the base ROE to 9.88% for our MISO Regulated Operating Subsidiaries, reversal of the amount previously recorded as an estimated current regulatory liability for refunds relating to the Second Complaint and recording of a current regulatory liability for our MISO Regulated Operating Subsidiaries of $70 million as of December 31, 2019 for refunds relating to the Initial Complaint and the period from the date of the September 2016 Order to December 31, 2019;
|
•
|
The adoption of tax accounting method changes related to bonus depreciation and repairs and maintenance deductions during the fourth quarter of 2019, which did not have a significant impact on the consolidated financial statements as of and for the year ended December 31, 2019 but may impact future results; and
|
•
|
Two notices of inquiry issued by the FERC on March 21, 2019 seeking comments on (1) whether and how policies concerning the determination of the base ROE for electric utilities should be modified, and (2) its electric transmission incentives policy.
|
Line
|
Item
|
Instructions
|
Amount
|
||
1
|
Rate base (a)
|
|
$
|
1,000,000
|
|
2
|
Multiply by 13-month weighted average cost of capital (b)
|
|
8.38
|
%
|
|
3
|
Allowed return on rate base
|
(Line 1 x Line 2)
|
$
|
83,800
|
|
4
|
Recoverable operating expenses (including depreciation and amortization)
|
|
$
|
150,000
|
|
5
|
Income taxes (c)
|
|
37,500
|
|
|
6
|
Gross revenue requirement
|
(Line 3 + Line 4 + Line 5)
|
$
|
271,300
|
|
(a)
|
Consists primarily of in-service property, plant and equipment, net of accumulated depreciation.
|
(b)
|
The weighted average cost of capital for purposes of this illustration is calculated below. The cost of capital for debt is included at a flat interest rate for purposes of this illustration and is not based on our actual cost of capital. The cost of capital rate for equity represents the current maximum allowed MISO ROE per the November 2019 Order on the Initial Complaint. See Note 19 to the consolidated financial statements for detail on ROE matters.
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
Percentage of
|
|
|
|
Cost of
|
|
|
Total Capitalization
|
|
Cost of Capital
|
|
Capital
|
|
Debt
|
40.00%
|
|
5.00% =
|
|
2.00
|
%
|
Equity
|
60.00%
|
|
10.63% =
|
|
6.38
|
%
|
|
100.00%
|
|
|
|
8.38
|
%
|
(c)
|
Represents an approximation of the federal and state income tax expense for purposes of this illustration and is not based on our actual tax expense.
|
|
|
Actual Capital
|
|
Forecasted
|
||||
|
|
Expenditures for the
|
|
Capital
|
||||
|
|
year ended
|
|
Expenditures
|
||||
(In millions)
|
|
December 31, 2019
|
|
2020 — 2024
|
||||
Expenditures for property, plant and equipment (a)
|
|
$
|
865
|
|
|
$
|
3,746
|
|
(a)
|
Amounts represent the cash payments to acquire or construct property, plant and equipment, as presented in the consolidated statements of cash flows. These amounts exclude non-cash additions to property, plant and equipment for the AFUDC equity as well as accrued liabilities for construction, labor and materials that have not yet been paid.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue increase (decrease)
|
$
|
69
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest expense increase (decrease)
|
(12
|
)
|
|
7
|
|
|
6
|
|
|||
Estimated net income increase (decrease)
|
61
|
|
|
(4
|
)
|
|
(3
|
)
|
|
Year Ended
|
|
|
|
Percentage
|
|
Year Ended
|
|
|
|
Percentage
|
||||||||||||||
|
December 31,
|
|
Increase
|
|
Increase
|
|
December 31,
|
|
Increase
|
|
Increase
|
||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
(Decrease)
|
|
(Decrease)
|
|
2017
|
|
(Decrease)
|
|
(Decrease)
|
||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transmission and other services
|
$
|
1,286
|
|
|
$
|
1,192
|
|
|
$
|
94
|
|
|
8
|
%
|
|
$
|
1,226
|
|
|
$
|
(34
|
)
|
|
(3
|
)%
|
Formula Rate true-up
|
41
|
|
|
(36
|
)
|
|
77
|
|
|
(214
|
)%
|
|
(15
|
)
|
|
(21
|
)
|
|
140
|
%
|
|||||
Total operating revenue
|
1,327
|
|
|
1,156
|
|
|
171
|
|
|
15
|
%
|
|
1,211
|
|
|
(55
|
)
|
|
(5
|
)%
|
|||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operation and maintenance
|
113
|
|
|
109
|
|
|
4
|
|
|
4
|
%
|
|
110
|
|
|
(1
|
)
|
|
(1
|
)%
|
|||||
General and administrative
|
138
|
|
|
127
|
|
|
11
|
|
|
9
|
%
|
|
121
|
|
|
6
|
|
|
5
|
%
|
|||||
Depreciation and amortization
|
203
|
|
|
180
|
|
|
23
|
|
|
13
|
%
|
|
169
|
|
|
11
|
|
|
7
|
%
|
|||||
Taxes other than income taxes
|
118
|
|
|
109
|
|
|
9
|
|
|
8
|
%
|
|
103
|
|
|
6
|
|
|
6
|
%
|
|||||
Other operating (income) and expenses, net
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
(100
|
)%
|
|
(2
|
)
|
|
(2
|
)
|
|
100
|
%
|
|||||
Total operating expenses
|
572
|
|
|
521
|
|
|
51
|
|
|
10
|
%
|
|
501
|
|
|
20
|
|
|
4
|
%
|
|||||
OPERATING INCOME
|
755
|
|
|
635
|
|
|
120
|
|
|
19
|
%
|
|
710
|
|
|
(75
|
)
|
|
(11
|
)%
|
|||||
OTHER EXPENSES (INCOME)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
224
|
|
|
224
|
|
|
—
|
|
|
—
|
%
|
|
224
|
|
|
—
|
|
|
—
|
%
|
|||||
Allowance for equity funds used during construction
|
(29
|
)
|
|
(33
|
)
|
|
4
|
|
|
(12
|
)%
|
|
(33
|
)
|
|
—
|
|
|
—
|
%
|
|||||
Other (income) and expenses, net
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100
|
)%
|
|
4
|
|
|
(1
|
)
|
|
(25
|
)%
|
|||||
Total other expenses (income)
|
195
|
|
|
194
|
|
|
1
|
|
|
1
|
%
|
|
195
|
|
|
(1
|
)
|
|
(1
|
)%
|
|||||
INCOME BEFORE INCOME TAXES
|
560
|
|
|
441
|
|
|
119
|
|
|
27
|
%
|
|
515
|
|
|
(74
|
)
|
|
(14
|
)%
|
|||||
INCOME TAX PROVISION
|
132
|
|
|
111
|
|
|
21
|
|
|
19
|
%
|
|
196
|
|
|
(85
|
)
|
|
(43
|
)%
|
|||||
NET INCOME
|
$
|
428
|
|
|
$
|
330
|
|
|
$
|
98
|
|
|
30
|
%
|
|
$
|
319
|
|
|
$
|
11
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|||||||||
|
2019
|
|
2018
|
|
Increase
|
|
Increase
|
|||||||||||||
(In millions)
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
(Decrease)
|
|
(Decrease)
|
|||||||||
Network revenues (a)
|
$
|
836
|
|
|
63
|
%
|
|
$
|
771
|
|
|
67
|
%
|
|
$
|
65
|
|
|
8
|
%
|
Regional cost sharing revenues (a)
|
371
|
|
|
28
|
%
|
|
334
|
|
|
29
|
%
|
|
37
|
|
|
11
|
%
|
|||
Point-to-point
|
13
|
|
|
1
|
%
|
|
14
|
|
|
1
|
%
|
|
(1
|
)
|
|
(7
|
)%
|
|||
Scheduling, control and dispatch (a)
|
17
|
|
|
1
|
%
|
|
15
|
|
|
1
|
%
|
|
2
|
|
|
13
|
%
|
|||
Other
|
21
|
|
|
2
|
%
|
|
21
|
|
|
2
|
%
|
|
—
|
|
|
—
|
%
|
|||
Recognition of liabilities for MISO ROE Complaints
|
69
|
|
|
5
|
%
|
|
1
|
|
|
—
|
%
|
|
68
|
|
|
6,800
|
%
|
|||
Total
|
$
|
1,327
|
|
|
100
|
%
|
|
$
|
1,156
|
|
|
100
|
%
|
|
$
|
171
|
|
|
15
|
%
|
(a)
|
Includes a portion of the Formula Rate true-up of $41 million and $(36) million for the year ended December 31, 2019 and 2018, respectively.
|
•
|
Fund capital expenditures at our Regulated Operating Subsidiaries. Our plans with regard to property, plant and equipment investments are described in detail above under “— Capital Investment and Operating Results Trends.”
|
•
|
Fund business development expenses and related capital expenditures. We are pursuing development activities for projects that could result in significant development expenses and capital expenditures incremental to our current plan. Refer to Note 19 to the consolidated financial statements for a discussion of contingent payments related to development projects.
|
•
|
Fund working capital requirements.
|
•
|
Fund our debt service requirements, including principal repayments and periodic interest payments, which are further described in detail below under “— Contractual Obligations.”
|
•
|
Fund any refund obligation in connection with the pending ROE matters.
|
|
|
S&P (a)
|
|
Moody’s
|
||||
|
|
Rating
|
|
Outlook
|
|
Rating
|
|
Outlook
|
ITC Holdings
|
|
|
|
|
|
|
|
|
Senior Unsecured Notes
|
|
BBB+
|
|
Negative
|
|
Baa2
|
|
Stable
|
Commercial Paper
|
|
A-2
|
|
Negative
|
|
Prime-2
|
|
Stable
|
ITCTransmission
|
|
|
|
|
|
|
|
|
First Mortgage Bonds
|
|
A
|
|
Negative
|
|
A1
|
|
Stable
|
METC
|
|
|
|
|
|
|
|
|
Senior Secured Notes
|
|
A
|
|
Negative
|
|
A1
|
|
Stable
|
ITC Midwest
|
|
|
|
|
|
|
|
|
First Mortgage Bonds
|
|
A
|
|
Negative
|
|
A1
|
|
Stable
|
ITC Great Plains
|
|
|
|
|
|
|
|
|
First Mortgage Bonds
|
|
A
|
|
Negative
|
|
A1
|
|
Stable
|
(a)
|
On September 26, 2019, S&P revised the ratings of senior unsecured notes at ITC Holdings from A- to BBB+, reflecting expected increases in the ratio of debt at our Regulated Operating Subsidiaries relative to amounts at ITC Holdings. All other ratings were reaffirmed and the outlook remains unchanged.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
428
|
|
|
$
|
330
|
|
|
$
|
319
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
203
|
|
|
180
|
|
|
169
|
|
|||
Recognition, refund and collection of revenue accruals and deferrals — including accrued interest
|
(55
|
)
|
|
17
|
|
|
34
|
|
|||
Deferred income tax expense
|
135
|
|
|
107
|
|
|
195
|
|
|||
Other
|
(82
|
)
|
|
19
|
|
|
(110
|
)
|
|||
Net cash provided by operating activities
|
629
|
|
|
653
|
|
|
607
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(865
|
)
|
|
(769
|
)
|
|
(755
|
)
|
|||
Contributions in aid of construction
|
10
|
|
|
21
|
|
|
21
|
|
|||
Other
|
1
|
|
|
1
|
|
|
(10
|
)
|
|||
Net cash used in investing activities
|
(854
|
)
|
|
(747
|
)
|
|
(744
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net issuance/repayment of debt (including commercial paper and revolving and term loan credit agreements)
|
463
|
|
|
238
|
|
|
511
|
|
|||
Dividends to ITC Investment Holdings
|
(250
|
)
|
|
(200
|
)
|
|
(300
|
)
|
|||
Refundable deposits from and repayments to generators for transmission network upgrades, net
|
11
|
|
|
3
|
|
|
(12
|
)
|
|||
Other
|
(3
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Net cash provided by financing activities
|
221
|
|
|
36
|
|
|
194
|
|
|||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(4
|
)
|
|
(58
|
)
|
|
57
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
10
|
|
|
68
|
|
|
11
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period
|
$
|
6
|
|
|
$
|
10
|
|
|
$
|
68
|
|
|
|
|
Due within
|
|
Due in
|
|
Due in
|
|
Due after
|
||||||||||
(In millions)
|
Total
|
|
1 Year
|
|
Years 2-3
|
|
Years 4-5
|
|
5 years
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
ITC Holdings Senior Notes
|
$
|
2,550
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
650
|
|
|
$
|
1,400
|
|
ITC Holdings revolving credit agreement (a)
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|||||
ITC Holdings commercial paper program
|
200
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
ITC Holdings term loan credit agreement
|
200
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|||||
ITCTransmission First Mortgage Bonds
|
785
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
785
|
|
|||||
ITCTransmission revolving credit agreement (a)
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|||||
METC Senior Secured Notes
|
575
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575
|
|
|||||
METC revolving credit agreement (a)
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|||||
ITC Midwest First Mortgage Bonds
|
1,085
|
|
|
35
|
|
|
—
|
|
|
75
|
|
|
975
|
|
|||||
ITC Midwest revolving credit agreement (a)
|
130
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|||||
ITC Great Plains First Mortgage Bonds
|
150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|||||
ITC Great Plains revolving credit agreement (a)
|
32
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments:
|
|
|
|
|
|
|
|
|
|
||||||||||
ITC Holdings Senior Notes
|
944
|
|
|
97
|
|
|
192
|
|
|
143
|
|
|
512
|
|
|||||
ITCTransmission First Mortgage Bonds
|
888
|
|
|
35
|
|
|
70
|
|
|
70
|
|
|
713
|
|
|||||
METC Senior Secured Notes
|
622
|
|
|
24
|
|
|
49
|
|
|
49
|
|
|
500
|
|
|||||
ITC Midwest First Mortgage Bonds
|
1,106
|
|
|
49
|
|
|
93
|
|
|
92
|
|
|
872
|
|
|||||
ITC Great Plains First Mortgage Bonds
|
155
|
|
|
6
|
|
|
12
|
|
|
12
|
|
|
125
|
|
|||||
Operating leases
|
4
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|||||
Purchase obligations
|
77
|
|
|
74
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|||||
Regulatory liabilities — revenue deferrals, including accrued interest
|
52
|
|
|
51
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Regulatory liabilities — refund related to the MISO ROE Complaints, including accrued interest (b)
|
70
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
METC Easement Agreement
|
309
|
|
|
10
|
|
|
20
|
|
|
20
|
|
|
259
|
|
|||||
Total obligations
|
$
|
10,071
|
|
|
$
|
652
|
|
|
$
|
1,439
|
|
|
$
|
1,113
|
|
|
$
|
6,867
|
|
(a)
|
On January 10, 2020 we extended the maturity date of our revolving credit agreements from October 21, 2022 to October 20, 2023. Refer to Note 11 to the consolidated financial statements for further details on the extension.
|
(b)
|
Amount reflects terms outlined in the November 2019 Order related to the MISO ROE Complaints, as described in Note 19 to the consolidated financial statements.
|
•
|
long-term incentive awards;
|
•
|
pension and other postretirement obligations;
|
•
|
regulatory liabilities related to asset removal costs and income taxes refundable related to implementation of the TCJA; and
|
•
|
liabilities to refund deposits from generators for transmission network upgrades.
|
•
|
Changes in existing state or federal regulation by governmental authorities having jurisdiction over air quality, water quality, control of toxic substances, hazardous and solid wastes and other environmental matters.
|
•
|
Changes in existing federal income tax laws or IRS regulations.
|
•
|
Identification and evaluation of lawsuits or complaints in which we may be or have been named as a defendant.
|
•
|
Resolution or progression of existing matters through the legislative process, the courts, the FERC, the NERC, the IRS or the Environmental Protection Agency.
|
•
|
Completion of certain milestones relating to development initiatives.
|
|
|
Page
|
Management’s Report on Internal Control over Financial Reporting
|
|
43
|
Report of Independent Registered Public Accounting Firm
|
|
44
|
Consolidated Statements of Financial Position as of December 31, 2019 and 2018
|
|
45
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017
|
|
46
|
Consolidated Statements of Changes in Stockholder’s Equity for the Years Ended December 31, 2019, 2018 and 2017
|
|
47
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017
|
|
48
|
Notes to Consolidated Financial Statements
|
|
49
|
Schedule I — Condensed Financial Information of Registrant
|
|
129
|
|
December 31,
|
||||||
(In millions, except share data)
|
2019
|
|
2018
|
||||
ASSETS
|
|||||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4
|
|
|
$
|
6
|
|
Accounts receivable
|
117
|
|
|
102
|
|
||
Inventory
|
39
|
|
|
32
|
|
||
Regulatory assets
|
12
|
|
|
12
|
|
||
Income tax receivable
|
—
|
|
|
1
|
|
||
Prepaid and other current assets
|
15
|
|
|
11
|
|
||
Total current assets
|
187
|
|
|
164
|
|
||
Property, plant and equipment (net of accumulated depreciation and amortization of $1,930 and $1,779, respectively)
|
8,582
|
|
|
7,910
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
950
|
|
|
950
|
|
||
Intangible assets (net of accumulated amortization of $42 and $39, respectively)
|
33
|
|
|
38
|
|
||
Regulatory assets
|
229
|
|
|
200
|
|
||
Other assets
|
77
|
|
|
67
|
|
||
Total other assets
|
1,289
|
|
|
1,255
|
|
||
TOTAL ASSETS
|
$
|
10,058
|
|
|
$
|
9,329
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|||||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
82
|
|
|
$
|
106
|
|
Accrued compensation
|
61
|
|
|
30
|
|
||
Accrued interest
|
48
|
|
|
50
|
|
||
Accrued taxes
|
66
|
|
|
64
|
|
||
Regulatory liabilities
|
123
|
|
|
178
|
|
||
Refundable deposits and advances for construction
|
27
|
|
|
33
|
|
||
Debt maturing within one year
|
235
|
|
|
—
|
|
||
Other current liabilities
|
16
|
|
|
11
|
|
||
Total current liabilities
|
658
|
|
|
472
|
|
||
Accrued pension and postretirement liabilities
|
73
|
|
|
68
|
|
||
Deferred income taxes
|
873
|
|
|
721
|
|
||
Regulatory liabilities
|
584
|
|
|
640
|
|
||
Refundable deposits
|
19
|
|
|
13
|
|
||
Other liabilities
|
47
|
|
|
26
|
|
||
Long-term debt
|
5,572
|
|
|
5,338
|
|
||
Commitments and contingent liabilities (Notes 6 and 19)
|
|
|
|
|
|
||
STOCKHOLDER’S EQUITY
|
|
|
|
||||
Common stock, without par value, 235,000,000 shares authorized, 224,203,112 shares issued and outstanding at December 31, 2019 and 2018
|
892
|
|
|
892
|
|
||
Retained earnings
|
1,333
|
|
|
1,155
|
|
||
Accumulated other comprehensive income
|
7
|
|
|
4
|
|
||
Total stockholder’s equity
|
2,232
|
|
|
2,051
|
|
||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
|
$
|
10,058
|
|
|
$
|
9,329
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
OPERATING REVENUES
|
|
|
|
|
|
||||||
Transmission and other services
|
$
|
1,286
|
|
|
$
|
1,192
|
|
|
$
|
1,226
|
|
Formula Rate true-up
|
41
|
|
|
(36
|
)
|
|
(15
|
)
|
|||
Total operating revenue
|
1,327
|
|
|
1,156
|
|
|
1,211
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Operation and maintenance
|
113
|
|
|
109
|
|
|
110
|
|
|||
General and administrative
|
138
|
|
|
127
|
|
|
121
|
|
|||
Depreciation and amortization
|
203
|
|
|
180
|
|
|
169
|
|
|||
Taxes other than income taxes
|
118
|
|
|
109
|
|
|
103
|
|
|||
Other operating (income) and expense, net
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
|||
Total operating expenses
|
572
|
|
|
521
|
|
|
501
|
|
|||
OPERATING INCOME
|
755
|
|
|
635
|
|
|
710
|
|
|||
OTHER EXPENSES (INCOME)
|
|
|
|
|
|
||||||
Interest expense, net
|
224
|
|
|
224
|
|
|
224
|
|
|||
Allowance for equity funds used during construction
|
(29
|
)
|
|
(33
|
)
|
|
(33
|
)
|
|||
Other (income) and expenses, net
|
—
|
|
|
3
|
|
|
4
|
|
|||
Total other expenses (income)
|
195
|
|
|
194
|
|
|
195
|
|
|||
INCOME BEFORE INCOME TAXES
|
560
|
|
|
441
|
|
|
515
|
|
|||
INCOME TAX PROVISION
|
132
|
|
|
111
|
|
|
196
|
|
|||
NET INCOME
|
428
|
|
|
330
|
|
|
319
|
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Derivative instruments, net of tax (Note 15)
|
3
|
|
|
1
|
|
|
—
|
|
|||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
3
|
|
|
1
|
|
|
—
|
|
|||
TOTAL COMPREHENSIVE INCOME
|
$
|
431
|
|
|
$
|
331
|
|
|
$
|
319
|
|
|
|
|
|
|
Accumulated
|
|
|
||||||||
|
|
|
|
|
Other
|
|
Total
|
||||||||
|
|
|
Retained
|
|
Comprehensive
|
|
Stockholder’s
|
||||||||
|
Common Stock
|
|
Earnings
|
|
Income (Loss)
|
|
Equity
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
BALANCE, DECEMBER 31, 2016
|
$
|
892
|
|
|
$
|
1,007
|
|
|
$
|
2
|
|
|
$
|
1,901
|
|
Net income
|
—
|
|
|
319
|
|
|
—
|
|
|
319
|
|
||||
Dividends to ITC Investment Holdings
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
(300
|
)
|
||||
BALANCE, DECEMBER 31, 2017
|
$
|
892
|
|
|
$
|
1,026
|
|
|
$
|
2
|
|
|
$
|
1,920
|
|
Opening balance reclassification
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
||||
Net income
|
—
|
|
|
330
|
|
|
—
|
|
|
330
|
|
||||
Dividends to ITC Investment Holdings
|
—
|
|
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
||||
Other comprehensive income, net of tax (Note 15)
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
BALANCE, DECEMBER 31, 2018
|
$
|
892
|
|
|
$
|
1,155
|
|
|
$
|
4
|
|
|
$
|
2,051
|
|
Net income
|
—
|
|
|
428
|
|
|
—
|
|
|
428
|
|
||||
Dividends to ITC Investment Holdings
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
(250
|
)
|
||||
Other comprehensive income, net of tax (Note 15)
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
BALANCE, DECEMBER 31, 2019
|
$
|
892
|
|
|
$
|
1,333
|
|
|
$
|
7
|
|
|
$
|
2,232
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
428
|
|
|
$
|
330
|
|
|
$
|
319
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
203
|
|
|
180
|
|
|
169
|
|
|||
Recognition, refund and collection of revenue accruals and deferrals — including accrued interest
|
(55
|
)
|
|
17
|
|
|
34
|
|
|||
Deferred income tax expense
|
135
|
|
|
107
|
|
|
195
|
|
|||
Allowance for equity funds used during construction
|
(29
|
)
|
|
(33
|
)
|
|
(33
|
)
|
|||
Share-based compensation
|
32
|
|
|
6
|
|
|
2
|
|
|||
Other
|
10
|
|
|
4
|
|
|
9
|
|
|||
Changes in assets and liabilities, exclusive of changes shown separately:
|
|
|
|
|
|
||||||
Accounts receivable
|
(10
|
)
|
|
17
|
|
|
(17
|
)
|
|||
Income tax receivable
|
1
|
|
|
14
|
|
|
—
|
|
|||
Accounts payable
|
(11
|
)
|
|
6
|
|
|
(3
|
)
|
|||
Accrued interest
|
(2
|
)
|
|
(10
|
)
|
|
7
|
|
|||
Accrued taxes
|
3
|
|
|
7
|
|
|
5
|
|
|||
Net refund related to return on equity complaints
|
(82
|
)
|
|
6
|
|
|
(113
|
)
|
|||
Other current and non-current assets and liabilities, net
|
6
|
|
|
2
|
|
|
33
|
|
|||
Net cash provided by operating activities
|
629
|
|
|
653
|
|
|
607
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(865
|
)
|
|
(769
|
)
|
|
(755
|
)
|
|||
Contributions in aid of construction
|
10
|
|
|
21
|
|
|
21
|
|
|||
Other
|
1
|
|
|
1
|
|
|
(10
|
)
|
|||
Net cash used in investing activities
|
(854
|
)
|
|
(747
|
)
|
|
(744
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Issuance of long-term debt, net of discount
|
175
|
|
|
400
|
|
|
1,199
|
|
|||
Borrowings under revolving credit agreements
|
1,090
|
|
|
832
|
|
|
1,065
|
|
|||
Borrowings under term loan credit agreements
|
200
|
|
|
—
|
|
|
250
|
|
|||
Net (repayment) issuance of commercial paper, net of discount
|
200
|
|
|
—
|
|
|
(148
|
)
|
|||
Retirement of long-term debt — including extinguishment of debt costs
|
(203
|
)
|
|
(100
|
)
|
|
(477
|
)
|
|||
Repayments of revolving credit agreements
|
(999
|
)
|
|
(844
|
)
|
|
(1,178
|
)
|
|||
Repayments of term loan credit agreements
|
—
|
|
|
(50
|
)
|
|
(200
|
)
|
|||
Dividends to ITC Investment Holdings
|
(250
|
)
|
|
(200
|
)
|
|
(300
|
)
|
|||
Refundable deposits from generators for transmission network upgrades
|
19
|
|
|
6
|
|
|
16
|
|
|||
Repayment of refundable deposits from generators for transmission network upgrades
|
(8
|
)
|
|
(3
|
)
|
|
(28
|
)
|
|||
Other
|
(3
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Net cash provided by financing activities
|
221
|
|
|
36
|
|
|
194
|
|
|||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(4
|
)
|
|
(58
|
)
|
|
57
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
10
|
|
|
68
|
|
|
11
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period
|
$
|
6
|
|
|
$
|
10
|
|
|
$
|
68
|
|
•
|
a “package of three” practical expedients that must be taken together and allowed us to not reassess:
|
◦
|
whether any expired or existing contract is a lease or contains a lease,
|
◦
|
the lease classification of any expired or existing leases, and
|
◦
|
the initial direct costs for any existing leases;
|
•
|
a practical expedient that permits entities to not evaluate existing land easements at adoption that were not previously accounted for as leases; and
|
•
|
an accounting policy election to not apply the recognition requirements to short-term leases (i.e., leases with terms of 12 months or less).
|
|
December 31,
|
||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Trade accounts receivable
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Unbilled accounts receivable
|
102
|
|
|
92
|
|
|
108
|
|
|
92
|
|
||||
Due from affiliates
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Other
|
12
|
|
|
7
|
|
|
9
|
|
|
13
|
|
||||
Total accounts receivable
|
$
|
117
|
|
|
$
|
102
|
|
|
$
|
119
|
|
|
$
|
108
|
|
(In millions)
|
Total
|
||
Net regulatory liabilities as of December 31, 2018
|
$
|
(52
|
)
|
Net refund of 2017 revenue deferrals and accruals, including accrued interest
|
16
|
|
|
Net revenue accrual for the year ended December 31, 2019
|
41
|
|
|
Net accrued interest payable for the year ended December 31, 2019
|
(2
|
)
|
|
Net regulatory assets as of December 31, 2019
|
$
|
3
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Current regulatory assets
|
$
|
12
|
|
|
$
|
12
|
|
Non-current regulatory assets
|
43
|
|
|
12
|
|
||
Current regulatory liabilities
|
(51
|
)
|
|
(27
|
)
|
||
Non-current regulatory liabilities
|
(1
|
)
|
|
(49
|
)
|
||
Net regulatory assets (liabilities)
|
$
|
3
|
|
|
$
|
(52
|
)
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Regulatory Assets:
|
|
|
|
||||
Current:
|
|
|
|
||||
Revenue accruals (including accrued interest of $1 and less than $1 as of December 31, 2019 and 2018, respectively) (a)
|
$
|
12
|
|
|
$
|
12
|
|
Total current
|
12
|
|
|
12
|
|
||
Non-current:
|
|
|
|
||||
Revenue accruals (including accrued interest of $1 and less than $1 as of December 31, 2019 and 2018, respectively) (a)
|
43
|
|
|
12
|
|
||
ITCTransmission ADIT deferral (net of accumulated amortization of $51 and $48 as of December 31, 2019 and 2018, respectively)
|
10
|
|
|
13
|
|
||
METC ADIT deferral (net of accumulated amortization of $31 and $29 as of December 31, 2019 and 2018, respectively)
|
12
|
|
|
14
|
|
||
METC regulatory deferrals (net of accumulated amortization of $10 and $9 as of December 31, 2019 and 2018, respectively)
|
5
|
|
|
6
|
|
||
Income taxes recoverable related to AFUDC equity
|
99
|
|
|
91
|
|
||
ITC Great Plains start-up, development and pre-construction (net of accumulated amortization of $6 and $5 as of December 31, 2019 and 2018, respectively)
|
7
|
|
|
8
|
|
||
Pensions and postretirement
|
25
|
|
|
25
|
|
||
Income taxes recoverable related to implementation of the Michigan Corporate Income Tax and other state excess deficient taxes
|
7
|
|
|
7
|
|
||
Accrued asset removal costs
|
21
|
|
|
24
|
|
||
Total non-current
|
229
|
|
|
200
|
|
||
|
|
|
|
||||
Total
|
$
|
241
|
|
|
$
|
212
|
|
(a)
|
Refer to discussion of revenue accruals in Note 6 under “Cost-Based Formula Rates with True-Up Mechanism.” Our Regulated Operating Subsidiaries do not earn a return on the balance of these regulatory assets, but do accrue interest carrying costs, which are subject to rate recovery along with the principal amount of the revenue accrual.
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Regulatory Liabilities:
|
|
|
|
||||
Current:
|
|
|
|
||||
Revenue deferrals (including accrued interest of $4 and $2 as of December 31, 2019 and 2018, respectively) (a)
|
$
|
51
|
|
|
$
|
27
|
|
Refund liability related to return on equity complaints (including accrued interest of $6 and $18 as of December 31, 2019 and 2018, respectively) (b)
|
70
|
|
|
151
|
|
||
Estimated refund related to ITC Great Plains incentive adder complaint (c)
|
2
|
|
|
—
|
|
||
Total current
|
123
|
|
|
178
|
|
||
Non-current:
|
|
|
|
||||
Revenue deferrals (including accrued interest of less than $1 and $1 as of December 31, 2019 and 2018, respectively) (a)
|
1
|
|
|
49
|
|
||
Accrued asset removal costs
|
72
|
|
|
71
|
|
||
Excess state income tax deductions
|
2
|
|
|
9
|
|
||
Income taxes refundable related to implementation of the TCJA
|
509
|
|
|
511
|
|
||
Total non-current
|
584
|
|
|
640
|
|
||
|
|
|
|
||||
Total
|
$
|
707
|
|
|
$
|
818
|
|
(a)
|
Refer to discussion of revenue deferrals in Note 6 under “Cost-Based Formula Rates with True-Up Mechanism.” Our Regulated Operating Subsidiaries accrue interest on the true-up amounts which will be refunded through rates along with the principal amount of revenue deferrals in future periods.
|
(b)
|
Refer to discussion of the refund liability in Note 19 under “Rate of Return on Equity Complaints.”
|
(c)
|
Refer to discussion of the ITC Great Plains incentive adder in Note 6 under “Incentive Adders for Transmission Rates.”
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Property, plant and equipment
|
|
|
|
||||
Regulated Operating Subsidiaries:
|
|
|
|
||||
Property, plant and equipment in service
|
$
|
9,973
|
|
|
$
|
9,113
|
|
Construction work in progress
|
375
|
|
|
465
|
|
||
Capital equipment inventory
|
99
|
|
|
79
|
|
||
Other
|
51
|
|
|
18
|
|
||
ITC Holdings and other
|
14
|
|
|
14
|
|
||
Total
|
10,512
|
|
|
9,689
|
|
||
Less: Accumulated depreciation and amortization
|
(1,930
|
)
|
|
(1,779
|
)
|
||
Property, plant and equipment, net
|
$
|
8,582
|
|
|
$
|
7,910
|
|
Future Minimum Lease Payments
|
|
(in millions)
|
||
2020
|
|
$
|
1
|
|
2021
|
|
1
|
|
|
2022
|
|
1
|
|
|
2023
|
|
—
|
|
|
2024
|
|
1
|
|
|
2025 and beyond
|
|
—
|
|
|
Total lease payments
|
|
4
|
|
|
Difference between undiscounted cash flows and discounted cash flows
|
|
—
|
|
|
Present value of lease liabilities
|
|
4
|
|
|
Less: Current operating lease liabilities
|
|
(1
|
)
|
|
Noncurrent operating lease liabilities
|
|
$
|
3
|
|
(in millions)
|
|
Classification
|
|
December 31, 2019
|
||
Operating Lease Assets
|
|
Other assets
|
|
$
|
4
|
|
Current Operating Lease Liabilities
|
|
Other current liabilities
|
|
1
|
|
|
Noncurrent Operating Lease Liabilities
|
|
Other liabilities
|
|
3
|
|
Future Minimum Lease Payments
|
|
(in millions)
|
||
2019
|
|
$
|
1
|
|
2020
|
|
1
|
|
|
2021
|
|
1
|
|
|
2022
|
|
—
|
|
|
2023 and thereafter
|
|
1
|
|
|
Total minimum lease payments
|
|
$
|
4
|
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term (years)
|
|
4.9
|
|
Weighted-average discount rate
|
|
4.0
|
%
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
ITC Holdings 6.375% Senior Notes, due September 30, 2036
|
$
|
200
|
|
|
$
|
200
|
|
ITC Holdings 5.50% Senior Notes, due January 15, 2020
|
—
|
|
|
200
|
|
||
ITC Holdings 4.05% Senior Notes, due July 1, 2023
|
250
|
|
|
250
|
|
||
ITC Holdings 3.65% Senior Notes, due June 15, 2024
|
400
|
|
|
400
|
|
||
ITC Holdings 5.30% Senior Notes, due July 1, 2043
|
300
|
|
|
300
|
|
||
ITC Holdings 3.25% Notes, due June 30, 2026
|
400
|
|
|
400
|
|
||
ITC Holdings 2.70% Senior Notes, due November 15, 2022
|
500
|
|
|
500
|
|
||
ITC Holdings 3.35% Senior Notes, due November 15, 2027
|
500
|
|
|
500
|
|
||
ITC Holdings Term Loan Credit Agreement, due June 11, 2021
|
200
|
|
|
—
|
|
||
ITC Holdings Revolving Credit Agreement, due October 21, 2022 (b)
|
34
|
|
|
37
|
|
||
ITC Holdings Commercial Paper Program (a)
|
200
|
|
|
—
|
|
||
ITCTransmission 6.125% First Mortgage Bonds, Series C, due March 31, 2036
|
100
|
|
|
100
|
|
||
ITCTransmission 4.625% First Mortgage Bonds, Series E, due August 15, 2043
|
285
|
|
|
285
|
|
||
ITCTransmission 4.27% First Mortgage Bonds, Series F, due June 10, 2044
|
100
|
|
|
100
|
|
||
ITCTransmission 4.00% First Mortgage Bonds, Series G, due March 30, 2053
|
225
|
|
|
225
|
|
||
ITCTransmission 3.30% First Mortgage Bonds, Series H, due August 28, 2049
|
75
|
|
|
—
|
|
||
ITCTransmission Revolving Credit Agreement, due October 21, 2022 (b)
|
24
|
|
|
27
|
|
||
METC 5.64% Senior Secured Notes, due May 6, 2040
|
50
|
|
|
50
|
|
||
METC 3.98% Senior Secured Notes, due October 26, 2042
|
75
|
|
|
75
|
|
||
METC 4.19% Senior Secured Notes, due December 15, 2044
|
150
|
|
|
150
|
|
||
METC 3.90% Senior Secured Notes, due April 26, 2046
|
200
|
|
|
200
|
|
||
METC 4.55% Senior Secured Notes, due January 15, 2049
|
50
|
|
|
—
|
|
||
METC 4.65% Senior Secured Notes, due July 10, 2049
|
50
|
|
|
—
|
|
||
METC Revolving Credit Agreement, due October 21, 2022 (b)
|
79
|
|
|
70
|
|
||
ITC Midwest 6.15% First Mortgage Bonds, Series A, due January 31, 2038
|
175
|
|
|
175
|
|
||
ITC Midwest 7.27% First Mortgage Bonds, Series C, due December 22, 2020 (a)
|
35
|
|
|
35
|
|
||
ITC Midwest 4.60% First Mortgage Bonds, Series D, due December 17, 2024
|
75
|
|
|
75
|
|
||
ITC Midwest 3.50% First Mortgage Bonds, Series E, due January 19, 2027
|
100
|
|
|
100
|
|
||
ITC Midwest 4.09% First Mortgage Bonds, Series F, due April 30, 2043
|
100
|
|
|
100
|
|
||
ITC Midwest 3.83% First Mortgage Bonds, Series G, due April 7, 2055
|
225
|
|
|
225
|
|
||
ITC Midwest 4.16% First Mortgage Bonds, Series H, due April 18, 2047
|
200
|
|
|
200
|
|
||
ITC Midwest 4.32% First Mortgage Bonds, Series I, due November 1, 2051
|
175
|
|
|
175
|
|
||
ITC Midwest Revolving Credit Agreement, due October 21, 2022 (b)
|
130
|
|
|
34
|
|
||
ITC Great Plains 4.16% First Mortgage Bonds, Series A, due November 26, 2044
|
150
|
|
|
150
|
|
||
ITC Great Plains Revolving Credit Agreement, due October 21, 2022 (b)
|
32
|
|
|
40
|
|
||
Total principal
|
5,844
|
|
|
5,378
|
|
||
Unamortized deferred financing fees and discount
|
(37
|
)
|
|
(40
|
)
|
||
Total debt
|
$
|
5,807
|
|
|
$
|
5,338
|
|
(a)
|
As of December 31, 2019 there was $235 million of debt included within debt maturing within one year and classified as a current liability in the consolidated statements of financial position. As of December 31, 2018 we had no debt maturing within one year.
|
(b)
|
On January 10, 2020 we extended the maturity date of our revolving credit agreements to October 20, 2023. See below in “Revolving Credit Agreement Amendments” for more details.
|
(In millions)
|
|
||
2020
|
$
|
235
|
|
2021
|
200
|
|
|
2022
|
799
|
|
|
2023
|
250
|
|
|
2024
|
475
|
|
|
2025 and thereafter
|
3,885
|
|
|
Total
|
$
|
5,844
|
|
Interest Rate Swaps
(in millions, except percentages) |
|
Notional Amount
|
|
Weighted Average Fixed Rate
|
|
Original Term
|
|
Effective Date
|
|||
July 2019 swap
|
|
$
|
50
|
|
|
1.816
|
%
|
|
5 years
|
|
November 2020
|
August 2019 swap
|
|
50
|
|
|
1.488
|
%
|
|
5 years
|
|
November 2020
|
|
October 2019 swaps
|
|
100
|
|
|
1.288
|
%
|
|
5 years
|
|
November 2020
|
|
Total
|
|
$
|
200
|
|
|
|
|
|
|
|
(In millions, except percentages)
|
Total
Available Capacity |
|
Outstanding
Balance (a) |
|
Unused
Capacity |
|
Weighted Average
Interest Rate on Outstanding Balance (b) |
|
Commitment
Fee Rate (c) |
||||||||
ITC Holdings
|
$
|
400
|
|
|
$
|
34
|
|
|
$
|
366
|
|
(d)
|
|
2.9%
|
|
0.175
|
%
|
ITCTransmission
|
100
|
|
|
24
|
|
|
76
|
|
|
|
2.6%
|
|
0.10
|
%
|
|||
METC
|
100
|
|
|
79
|
|
|
21
|
|
|
|
2.6%
|
|
0.10
|
%
|
|||
ITC Midwest
|
225
|
|
|
130
|
|
|
95
|
|
|
|
2.6%
|
|
0.10
|
%
|
|||
ITC Great Plains
|
75
|
|
|
32
|
|
|
43
|
|
|
|
2.6%
|
|
0.10
|
%
|
|||
Total
|
$
|
900
|
|
|
$
|
299
|
|
|
$
|
601
|
|
|
|
|
|
|
(a)
|
Included within long-term debt in the consolidated statements of financial position.
|
(b)
|
Interest charged on borrowings depends on the variable rate structure we elected at the time of each borrowing.
|
(c)
|
Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating.
|
(d)
|
ITC Holdings’ revolving credit agreement may be used for general corporate purposes, including to repay commercial paper issued pursuant to the commercial paper program described above, if necessary. While outstanding commercial paper does not reduce available capacity under ITC Holdings’ revolving credit agreement, the unused capacity under this agreement adjusted for the commercial paper outstanding was $166 million as of December 31, 2019.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Income tax expense at federal statutory rate (a)
|
$
|
118
|
|
|
$
|
93
|
|
|
$
|
180
|
|
State income taxes (net of federal benefit) (b)
|
22
|
|
|
31
|
|
|
16
|
|
|||
AFUDC equity
|
(5
|
)
|
|
(6
|
)
|
|
(10
|
)
|
|||
Revaluation of deferred federal income taxes (c)
|
—
|
|
|
(2
|
)
|
|
8
|
|
|||
Other, net (d)
|
(3
|
)
|
|
(5
|
)
|
|
2
|
|
|||
Total income tax provision
|
$
|
132
|
|
|
$
|
111
|
|
|
$
|
196
|
|
(a)
|
The federal statutory rate is 21% for 2019 and 2018, and 35% for 2017.
|
(b)
|
Amounts for the years ended December 31, 2019 and 2018 includes $1 million and $6 million, respectively, related to the remeasurement of Iowa NOLs due to the rate change from 12.0% to 9.8% effective January 1, 2021. Amount for the year ended December 31, 2017 includes income tax benefits of $3 million related to the revaluation of state deferred tax assets and liabilities for the net of federal benefit impact of the TCJA.
|
(c)
|
Amount for the year ended December 31, 2018 represents the change in estimate related to the TCJA remeasurement recorded in 2017 based on the ITC Holdings’ 2017 Federal Tax return filed. Amount for the year ended December 31, 2017 represents income tax expense related to the revaluation of federal deferred tax assets and liabilities as a result of the TCJA.
|
(d)
|
Amount for the year ended December 31, 2017 includes income tax expense of $1 million related to the establishment of a valuation allowance for the portion of a capital loss expected to not be utilized before expiration.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Current income tax (benefit) expense
|
$
|
(3
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
Deferred income tax expense (a)
|
135
|
|
|
107
|
|
|
195
|
|
|||
Total income tax provision
|
$
|
132
|
|
|
$
|
111
|
|
|
$
|
196
|
|
(a)
|
Amount for the year ended December 31, 2017 includes income tax expense of $5 million related to the net revaluation of federal and state deferred tax assets and liabilities at ITC Holdings as a result of the TCJA.
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Property, plant and equipment
|
$
|
(1,071
|
)
|
|
$
|
(884
|
)
|
Federal income tax NOLs and other credits
|
117
|
|
|
47
|
|
||
METC regulatory deferral (a)
|
(5
|
)
|
|
(6
|
)
|
||
Acquisition adjustments — ADIT deferrals (a)
|
(7
|
)
|
|
(8
|
)
|
||
Goodwill
|
(133
|
)
|
|
(128
|
)
|
||
Refund liabilities (a)
|
19
|
|
|
40
|
|
||
Regulatory liability gross up — TCJA
|
134
|
|
|
138
|
|
||
Pension and postretirement liabilities
|
18
|
|
|
18
|
|
||
State income tax NOLs (net of federal benefit)
|
52
|
|
|
43
|
|
||
True-up adjustment principal & interest
|
(1
|
)
|
|
14
|
|
||
Other, net
|
4
|
|
|
5
|
|
||
Net deferred tax liabilities
|
$
|
(873
|
)
|
|
$
|
(721
|
)
|
Gross deferred income tax liabilities
|
$
|
(1,233
|
)
|
|
$
|
(1,040
|
)
|
Gross deferred income tax assets
|
360
|
|
|
319
|
|
||
Net deferred tax liabilities
|
$
|
(873
|
)
|
|
$
|
(721
|
)
|
(a)
|
Described in Note 7.
|
|
Pension Plans
|
|
Postretirement Benefit Plan
|
||||||||||||||||||||
|
Years Ended December 31,
|
|
Years Ended December 31,
|
||||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
8
|
|
Interest cost
|
5
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
3
|
|
|
3
|
|
||||||
Expected return on plan assets
|
(5
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Amortization of unrecognized loss
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net benefit cost
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
Pension Plans
|
|
Postretirement Benefit Plan
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Beginning projected benefit obligation
|
$
|
(123
|
)
|
|
$
|
(127
|
)
|
|
$
|
(90
|
)
|
|
$
|
(86
|
)
|
Service cost
|
(7
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||
Interest cost
|
(5
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Actuarial net gain (loss)
|
(12
|
)
|
|
9
|
|
|
(11
|
)
|
|
8
|
|
||||
Benefits paid
|
6
|
|
|
6
|
|
|
1
|
|
|
1
|
|
||||
Ending projected benefit obligation
|
(141
|
)
|
|
(123
|
)
|
|
(113
|
)
|
|
(90
|
)
|
||||
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Beginning plan assets at fair value
|
73
|
|
|
75
|
|
|
72
|
|
|
66
|
|
||||
Actual return on plan assets
|
16
|
|
|
(3
|
)
|
|
15
|
|
|
(2
|
)
|
||||
Employer contributions
|
4
|
|
|
4
|
|
|
9
|
|
|
9
|
|
||||
Benefits paid
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Ending plan assets at fair value
|
91
|
|
|
73
|
|
|
95
|
|
|
72
|
|
||||
Funded status, underfunded
|
$
|
(50
|
)
|
|
$
|
(50
|
)
|
|
$
|
(18
|
)
|
|
$
|
(18
|
)
|
Accumulated benefit obligation:
|
|
|
|
|
|
|
|
|
|
||||||
Retirement plan
|
$
|
(78
|
)
|
|
$
|
(67
|
)
|
|
N/A
|
|
|
N/A
|
|
||
Supplemental benefit plans
|
(57
|
)
|
|
(52
|
)
|
|
N/A
|
|
|
N/A
|
|
||||
Total accumulated benefit obligation
|
$
|
(135
|
)
|
|
$
|
(119
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Amounts recorded as:
|
|
|
|
|
|
|
|
|
|||||||
Funded Status:
|
|
|
|
|
|
|
|
||||||||
Accrued pension and postretirement liabilities
|
$
|
(55
|
)
|
|
$
|
(50
|
)
|
|
$
|
(18
|
)
|
|
$
|
(18
|
)
|
Other non-current assets
|
9
|
|
|
4
|
|
|
N/A
|
|
|
N/A
|
|
||||
Other current liabilities
|
(4
|
)
|
|
(4
|
)
|
|
N/A
|
|
|
N/A
|
|
||||
Total
|
$
|
(50
|
)
|
|
$
|
(50
|
)
|
|
$
|
(18
|
)
|
|
$
|
(18
|
)
|
Unrecognized Amounts in Non-current Regulatory Assets:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Total
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Pension Plans
|
||||||
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
(59
|
)
|
|
$
|
(54
|
)
|
Fair value of plan assets (a)
|
—
|
|
|
—
|
|
(a)
|
The investments held in trust for our supplemental benefit plans are not included in the plan asset amounts presented herein, but are included in Other Assets on our consolidated statements of financial position.
|
|
Pension Plans
|
||||||
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Accumulated benefit obligation
|
$
|
(57
|
)
|
|
$
|
(52
|
)
|
Fair value of plan assets (a)
|
—
|
|
|
—
|
|
(a)
|
The investments held in trust for our supplemental benefit plans are not included in the plan asset amounts presented herein, but are included in Other Assets on our consolidated statements of financial position.
|
|
Pension Plans
|
|
Postretirement Benefit Plan
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
Weighted average discount rate
|
3.27%
|
|
4.28%
|
|
3.57%
|
|
3.61%
|
|
4.47%
|
|
3.75%
|
Weighted average interest crediting rate
|
4.00%
|
|
4.50%
|
|
4.50%
|
|
N/A
|
|
N/A
|
|
N/A
|
Annual rate of salary increases
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
Health care cost trend rate
|
N/A
|
|
N/A
|
|
N/A
|
|
6.25%
|
|
6.50%
|
|
6.75%
|
Ultimate health care cost trend rate
|
N/A
|
|
N/A
|
|
N/A
|
|
5.00%
|
|
5.00%
|
|
5.00%
|
Year that the ultimate trend rate is reached
|
N/A
|
|
N/A
|
|
N/A
|
|
2025
|
|
2025
|
|
2025
|
Annual rate of increase in dental benefit costs
|
N/A
|
|
N/A
|
|
N/A
|
|
4.50%
|
|
4.50%
|
|
4.50%
|
|
Pension Plans
|
|
Postretirement Benefit Plan
|
||||||||
|
Years Ended December 31,
|
|
Years Ended December 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
Weighted average discount rate — service cost
|
4.42%
|
|
3.70%
|
|
4.20%
|
|
4.58%
|
|
3.80%
|
|
4.35%
|
Weighted average discount rate — interest cost
|
3.99%
|
|
3.26%
|
|
3.45%
|
|
4.28%
|
|
3.58%
|
|
3.98%
|
Weighted average interest crediting rate
|
4.50%
|
|
4.50%
|
|
4.50%
|
|
N/A
|
|
N/A
|
|
N/A
|
Annual rate of salary increases
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
Health care cost trend rate
|
N/A
|
|
N/A
|
|
N/A
|
|
6.50%
|
|
6.75%
|
|
7.00%
|
Ultimate health care cost trend rate
|
N/A
|
|
N/A
|
|
N/A
|
|
5.00%
|
|
5.00%
|
|
5.00%
|
Year that the ultimate trend rate is reached
|
N/A
|
|
N/A
|
|
N/A
|
|
2025
|
|
2025
|
|
2022
|
Expected long-term rate of return on plan assets
|
6.60%
|
|
6.40%
|
|
6.20%
|
|
5.00%
|
|
4.90%
|
|
4.70%
|
(In millions)
|
Pension Plans
|
|
Postretirement Benefit Plan
|
||||
2020
|
$
|
8
|
|
|
$
|
1
|
|
2021
|
8
|
|
|
2
|
|
||
2022
|
8
|
|
|
2
|
|
||
2023
|
8
|
|
|
2
|
|
||
2024
|
9
|
|
|
3
|
|
||
2025 through 2029
|
56
|
|
|
21
|
|
|
Target Allocation
|
|
Pension Plans
|
|
Postretirement Benefit Plan
|
|||||||||
Asset Category
|
2019
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||
Fixed income securities
|
50.0
|
%
|
|
50.0
|
%
|
|
48.6
|
%
|
|
50.0
|
%
|
|
48.4
|
%
|
Equity securities
|
50.0
|
%
|
|
50.0
|
%
|
|
51.4
|
%
|
|
50.0
|
%
|
|
51.6
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Financial assets measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mutual funds — U.S. equity securities
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds — international equity securities
|
9
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Mutual funds — fixed income securities
|
46
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Financial assets measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mutual funds — U.S. equity securities
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds — international equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Mutual funds — fixed income securities
|
48
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant
Other Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||
(in millions)
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Financial assets measured on a recurring basis:
|
|
|
|
|
|
||||||
Mutual funds — fixed income securities
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds — equity securities
|
8
|
|
|
—
|
|
|
—
|
|
|||
Interest rate swap derivatives
|
—
|
|
|
3
|
|
|
—
|
|
|||
Total
|
$
|
58
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant
Other Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||
(in millions)
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
Financial assets measured on a recurring basis:
|
|
|
|
|
|
||||||
Cash equivalents
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds — fixed income securities
|
49
|
|
|
—
|
|
|
—
|
|
|||
Mutual funds — equity securities
|
5
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at the beginning of period
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Reclassification of deferred tax effects on interest rate cash flow hedges stranded in AOCI, subject to the TCJA, into retained earnings
|
—
|
|
|
1
|
|
|
—
|
|
|||
Other Comprehensive Income
|
|
|
|
|
|
||||||
Derivative Instruments
|
|
|
|
|
|
||||||
Reclassification of net loss relating to interest rate cash flow hedges from AOCI to earnings (net of tax of less than $1 for each of the years ended December 31, 2019 and 2018 and $1 for the year ended December 31, 2017) (a)
|
1
|
|
|
1
|
|
|
1
|
|
|||
Gain (loss) on interest rate swaps relating to interest rate cash flow hedges (net of tax of $1 for each of the years ended December 31, 2019 and 2017)
|
2
|
|
|
—
|
|
|
(1
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
3
|
|
|
1
|
|
|
—
|
|
|||
Balance at the end of period
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
2
|
|
(a)
|
The reclassification of the net loss relating to interest rate cash flow hedges is reported in interest expense on a pre-tax basis.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Operation and maintenance expenses
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
General and administrative expenses
|
30
|
|
|
7
|
|
|
3
|
|
|||
Amounts capitalized to property, plant and equipment
|
8
|
|
|
3
|
|
|
1
|
|
|||
Total share-based compensation costs
|
$
|
40
|
|
|
$
|
11
|
|
|
$
|
5
|
|
Total tax benefit recognized in the consolidated statements of comprehensive income
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
Number of
|
|
|
Performance
|
|
|
Based Units
|
|
PBUs at December 31, 2018
|
637,551
|
|
Granted
|
380,305
|
|
Forfeited
|
(41,628
|
)
|
PBUs at December 31, 2019
|
976,228
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Accrued compensation
|
$
|
17
|
|
|
$
|
—
|
|
Other long-term liabilities
|
19
|
|
|
7
|
|
||
Total
|
$
|
36
|
|
|
$
|
7
|
|
|
Number of
|
|
|
Service
|
|
|
Based Units
|
|
SBUs at December 31, 2018
|
488,903
|
|
Granted
|
294,539
|
|
Vested and paid out
|
(2,479
|
)
|
Forfeited
|
(35,713
|
)
|
SBUs at December 31, 2019
|
745,250
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Accrued compensation
|
$
|
10
|
|
|
$
|
—
|
|
Other long-term liabilities
|
10
|
|
|
8
|
|
||
Total
|
$
|
20
|
|
|
$
|
8
|
|
|
Net Investments (a)
|
||||||||||
(In millions)
|
Substations
|
|
Lines
|
|
Other
|
||||||
ITCTransmission (b)
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
METC (c)
|
16
|
|
|
41
|
|
|
—
|
|
|||
ITC Midwest (d)
|
43
|
|
|
37
|
|
|
—
|
|
|||
ITC Great Plains (e)
|
10
|
|
|
23
|
|
|
—
|
|
|||
Total
|
$
|
69
|
|
|
$
|
130
|
|
|
$
|
—
|
|
(a)
|
Amount represents our investment in jointly held plant, which has been reduced by the ownership interest amounts of other parties.
|
(b)
|
ITCTransmission has joint ownership in two 345 kV transmission lines with a municipal power agency that has a 50.4% ownership interest in the transmission lines. An Ownership and Operating Agreement with the municipal power agency provides ITCTransmission with authority for construction of capital improvements and for the operation and management of the transmission lines. The municipal power agency is responsible for the capital and operation and maintenance costs allocable to their ownership interest.
|
(c)
|
METC has joint sharing of several assets within various substations with Consumers Energy, other municipal distribution systems and other generators. The rights, responsibilities and obligations for these jointly owned assets are documented in the Amended and Restated Distribution — Transmission Interconnection Agreement with Consumers Energy and in numerous interconnection facilities agreements with various municipalities and other generators. In addition, other municipal power agencies and cooperatives have an ownership interest in several METC 345 kV transmission lines. This ownership entitles these municipal power agencies and cooperatives to approximately 608 MW of network transmission service from the METC transmission system. As of December 31, 2019, METC’s ownership percentages for jointly owned substation facilities and lines ranged from less than 1.0% to 92.0% and 1.0% to 41.9%, respectively.
|
(d)
|
ITC Midwest has joint sharing of several substations and transmission lines with various parties. ITC Midwest’s ownership percentages for jointly owned substation facilities and lines ranged from 28.0% to 80.0% and 11.0% to 80.0%, respectively, as of December 31, 2019.
|
(e)
|
In 2014, ITC Great Plains entered into a joint ownership agreement with an electric cooperative that has a 49.0% ownership interest in a transmission project. ITC Great Plains will construct and operate the project and the electric cooperative will be responsible for their ownership percentage of capital and operation and maintenance costs. As of December 31, 2019, ITC Great Plains’ ownership percentage in the project was 51.0%.
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue increase (decrease)
|
$
|
69
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest expense increase (decrease)
|
(12
|
)
|
|
7
|
|
|
6
|
|
|||
Estimated net income increase (reduction)
|
61
|
|
|
(4
|
)
|
|
(3
|
)
|
|
December 31,
|
||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Cash and cash equivalents
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
66
|
|
|
$
|
8
|
|
Restricted cash included in:
|
|
|
|
|
|
|
|
||||||||
Other non-current assets
|
2
|
|
|
4
|
|
|
2
|
|
|
3
|
|
||||
Total cash, cash equivalents and restricted cash
|
$
|
6
|
|
|
$
|
10
|
|
|
$
|
68
|
|
|
$
|
11
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Supplementary cash flows information:
|
|
|
|
|
|
||||||
Interest paid (net of interest capitalized) (a)
|
$
|
228
|
|
|
$
|
223
|
|
|
$
|
213
|
|
Income tax refunds received
|
3
|
|
|
13
|
|
|
1
|
|
|||
Supplementary non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment and other long-lived assets (b)
|
92
|
|
|
94
|
|
|
87
|
|
|||
Allowance for equity funds used during construction
|
29
|
|
|
33
|
|
|
33
|
|
|||
Right-of-use assets obtained in exchange for new operating lease liabilities (c)
|
5
|
|
|
—
|
|
|
—
|
|
(a)
|
Amount for the year ended December 31, 2017 includes $9 million of interest paid associated with the Initial Complaint. See Note 19 for information on the Initial Complaint.
|
(b)
|
Amounts consist of current and accrued liabilities for construction, labor, materials and other costs that have not been included in investing activities. These amounts have not been paid for as of December 31, 2019, 2018 or 2017, respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment when paid.
|
(c)
|
See Note 2 for information regarding the adoption of lease guidance in 2019.
|
|
Regulated
|
|
|
|
|
|
|
||||||||
|
Operating
|
|
ITC Holdings
|
|
Reconciliations/
|
|
|
||||||||
2019
|
Subsidiaries
|
|
and Other
|
|
Eliminations
|
|
Total
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,358
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
1,327
|
|
Depreciation and amortization
|
201
|
|
|
2
|
|
|
—
|
|
|
203
|
|
||||
Interest expense, net
|
105
|
|
|
119
|
|
|
—
|
|
|
224
|
|
||||
Income (loss) before income taxes
|
710
|
|
|
(150
|
)
|
|
—
|
|
|
560
|
|
||||
Income tax provision (benefit)
|
179
|
|
|
(47
|
)
|
|
—
|
|
|
132
|
|
||||
Net income
|
531
|
|
|
428
|
|
|
(531
|
)
|
|
428
|
|
||||
Property, plant and equipment, net
|
8,573
|
|
|
9
|
|
|
—
|
|
|
8,582
|
|
||||
Goodwill
|
950
|
|
|
—
|
|
|
—
|
|
|
950
|
|
||||
Total assets (a)
|
9,946
|
|
|
5,402
|
|
|
(5,290
|
)
|
|
10,058
|
|
||||
Capital expenditures
|
874
|
|
|
—
|
|
|
(9
|
)
|
|
865
|
|
|
Regulated
|
|
|
|
|
|
|
||||||||
|
Operating
|
|
ITC Holdings
|
|
Reconciliations/
|
|
|
||||||||
2018
|
Subsidiaries
|
|
and Other
|
|
Eliminations
|
|
Total
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,185
|
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
1,156
|
|
Depreciation and amortization
|
179
|
|
|
1
|
|
|
—
|
|
|
180
|
|
||||
Interest expense, net
|
110
|
|
|
114
|
|
|
—
|
|
|
224
|
|
||||
Income (loss) before income taxes
|
585
|
|
|
(144
|
)
|
|
—
|
|
|
441
|
|
||||
Income tax provision (benefit)
|
148
|
|
|
(37
|
)
|
|
—
|
|
|
111
|
|
||||
Net income
|
437
|
|
|
330
|
|
|
(437
|
)
|
|
330
|
|
||||
Property, plant and equipment, net
|
7,901
|
|
|
9
|
|
|
—
|
|
|
7,910
|
|
||||
Goodwill
|
950
|
|
|
—
|
|
|
—
|
|
|
950
|
|
||||
Total assets (a)
|
9,224
|
|
|
4,977
|
|
|
(4,872
|
)
|
|
9,329
|
|
||||
Capital expenditures
|
773
|
|
|
—
|
|
|
(4
|
)
|
|
769
|
|
|
Regulated
|
|
|
|
|
|
|
||||||||
|
Operating
|
|
ITC Holdings
|
|
Reconciliations/
|
|
|
||||||||
2017
|
Subsidiaries
|
|
and Other
|
|
Eliminations
|
|
Total
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,241
|
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
1,211
|
|
Depreciation and amortization
|
168
|
|
|
1
|
|
|
—
|
|
|
169
|
|
||||
Interest expense, net
|
104
|
|
|
120
|
|
|
—
|
|
|
224
|
|
||||
Income (loss) before income taxes
|
664
|
|
|
(149
|
)
|
|
—
|
|
|
515
|
|
||||
Income tax provision (benefit)
|
207
|
|
|
(11
|
)
|
|
—
|
|
|
196
|
|
||||
Net income
|
457
|
|
|
319
|
|
|
(457
|
)
|
|
319
|
|
||||
Property, plant and equipment, net
|
7,299
|
|
|
10
|
|
|
—
|
|
|
7,309
|
|
||||
Goodwill
|
950
|
|
|
—
|
|
|
—
|
|
|
950
|
|
||||
Total assets (a)
|
8,688
|
|
|
4,799
|
|
|
(4,664
|
)
|
|
8,823
|
|
||||
Capital expenditures
|
761
|
|
|
—
|
|
|
(6
|
)
|
|
755
|
|
(a)
|
Reconciliation of total assets results primarily from differences in the netting of deferred tax assets and liabilities in our segments as compared to the classification in our consolidated statements of financial position.
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|
||||||||||
(In millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Year
|
||||||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
307
|
|
|
$
|
320
|
|
|
$
|
321
|
|
|
$
|
379
|
|
(a)
|
$
|
1,327
|
|
Operating income
|
166
|
|
|
171
|
|
|
174
|
|
|
244
|
|
(a)
|
755
|
|
|||||
Net income
|
84
|
|
|
87
|
|
|
98
|
|
|
159
|
|
(a)
|
428
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
279
|
|
|
$
|
290
|
|
|
$
|
295
|
|
|
$
|
292
|
|
|
$
|
1,156
|
|
Operating income
|
154
|
|
|
163
|
|
|
163
|
|
|
155
|
|
|
635
|
|
|||||
Net income
|
82
|
|
|
79
|
|
|
89
|
|
|
80
|
|
|
330
|
|
(a)
|
On November 21, 2019, the FERC issued an order on the MISO ROE Complaints which impacted financial results for the fourth quarter of 2019. See Note 19 for information regarding the MISO ROE Complaints.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
Name
|
Position
|
Linda H. Apsey
|
President and Chief Executive Officer
|
Gretchen L. Holloway
|
Senior Vice President and Chief Financial Officer
|
Jon E. Jipping
|
Executive Vice President and Chief Operating Officer
|
Daniel J. Oginsky
|
Executive Vice President and Chief Administrative Officer
|
Christine Mason Soneral
|
Senior Vice President and General Counsel
|
•
|
Base salary increases. Base salary increases were provided to each of our NEOs in 2019 to reward individual performance and to remain competitive and aligned with market.
|
•
|
Annual cash incentive bonuses. The NEOs earned cash incentive bonuses for 2019 performance of approximately 169% of target. This was based on achieving 100% of the performance targets established under the annual corporate performance bonus plan in early 2019 and achievement of certain performance factors which resulted in a bonus multiplier of 1.69. See “Compensation Discussion and Analysis - Key Components of Our NEO Compensation Program - Annual Corporate Performance Bonus.”
|
•
|
Long-term equity incentives. We granted long-term equity incentive awards to our NEOs in March 2019. Total award opportunities were set as a percentage of base salary and delivered one-third in the form of SBUs and two-thirds in the form of PBUs.
|
•
|
Performing best-in-class utility operations;
|
•
|
Improving reliability, reducing congestion, and facilitating access to generation resources; and
|
•
|
Utilizing our experience and skills to seek and identify opportunities to invest in needed transmission and to optimize the value of those investments.
|
•
|
Provide for flexibility in pay practices to recognize our unique position and growth proposition;
|
•
|
Use a market-based pay program aligned with pay-for-performance objectives;
|
•
|
Leverage incentives, where possible, and align long-term incentive awards with improvements in our financial performance and shareholder value;
|
•
|
Provide benefits through flexible, cost-effective plans while taking into account business needs and affordability; and
|
•
|
Provide other non-monetary awards to recognize and incentivize performance.
|
•
|
Base Salary — provides sufficient competitive pay to attract and retain experienced and successful executives.
|
•
|
Cash Bonus Incentive — encourages and rewards contributions to our annual corporate performance goals.
|
•
|
Long Term Equity Incentives — encourages a multi-year focus on performance, rewards building long-term shareholder value and helps retain NEOs.
|
NEO
|
|
2018 Base Salary
|
|
2019 Base Salary
|
|
Percent Increase
|
|||||
Linda H. Apsey
|
|
$
|
755,000
|
|
|
$
|
800,000
|
|
|
6.0
|
%
|
Gretchen L. Holloway
|
|
370,000
|
|
|
390,000
|
|
|
5.4
|
%
|
||
Jon E. Jipping
|
|
555,000
|
|
|
580,000
|
|
|
4.5
|
%
|
||
Daniel J. Oginsky
|
|
468,000
|
|
|
485,000
|
|
|
3.6
|
%
|
||
Christine Mason Soneral
|
|
378,000
|
|
|
390,000
|
|
|
3.2
|
%
|
Category
|
|
Goal
|
|
Rationale for Goal
|
|
Rationale for Target Goal
|
|
Potential Payout
|
|
2019 Results
|
|
Actual Payout
|
|
Financial
20% Maximum Potential Payout |
|
Non-field Operation and Maintenance Expense and General and Administrative Expenses
|
|
Controlling general and administrative expenses is an important part of controlling rates charged to transmission customers.
|
|
Target is consistent with the approach used in 2018 and based on the 2019 Board-approved budget.
Non-Field O&M and G&A expense at or under budget of $164M. |
|
10
|
%
|
|
$160M
|
|
10%
|
|
Adjusted Net Income (1)
|
|
Represents the Company’s financial performance as it reflects a true measure of earnings contributions from the operating companies.
|
|
Target based on the 2019 Board-approved budget.
Net Income from our Regulated Operating Subsidiaries at or above $468M to achieve 10%; Net Income at or above $445M to achieve 5%. |
|
5% - 10%
|
|
|
$484M
|
|
10%
|
|
Total
|
|
20
|
%
|
|
|
|
20%
|
Category
|
|
Goal
|
|
Rationale for Goal
|
|
Rationale for Target
|
|
Potential Payout
|
|
2019 Results
|
|
Actual Payout
|
|
Safety & Compliance
20% Maximum Potential Payout |
|
Safety as measured by lost time
|
|
Maintaining the safety of our employees and contractors is a core value and is at the foundation of our success.
|
|
Target number of incidents remained the same as prior years and was based on industry top decile performance, which reflects an aggressive view and philosophy on the importance of safety.
2 or fewer lost work day cases for injuries to Company employees and specified contract employees. |
|
5
|
%
|
|
1
|
|
5%
|
|
Safety as measured by recordable incidents
|
|
Maintaining the safety of our employees and contractors is a core value and is at the foundation of our success.
|
|
Target number of incidents remained the same as prior year and was based on industry top decile performance, which reflects an aggressive view and philosophy on the importance of safety.
9 or fewer recordable incidents for injuries to Company employees and specified contract employees. |
|
5
|
%
|
|
4
|
|
5%
|
|
|
Infrastructure Protection
|
|
Maintaining cyber and physical security is critical to ensuring system reliability and ongoing operations.
|
|
Goal focused on implementing updated security objectives. Emphasized securing our information systems and physical space, helping protect our most important assets.
Implementation of the 2019 Cyber Plan and Physical Security Plan, as presented to and approved by the Board of Directors, implementation of each Plan worth 5%. |
|
10
|
%
|
|
Completed
|
|
10%
|
|
Total
|
|
20
|
%
|
|
|
|
20%
|
(1)
|
We utilize adjusted net income as a criterion in measuring achievement of financial goals for our annual corporate performance bonus. This non-GAAP financial measure reconciles to net income of our Regulated Operating Subsidiaries as follows:
|
(in millions)
|
2019
|
||
Net Income of Regulated Operating Subsidiaries
|
$
|
531
|
|
Adjustments Related to ROE Matters
|
(49
|
)
|
|
Other Adjustments
|
2
|
|
|
Adjusted Net Income
|
$
|
484
|
|
Measure
|
Threshold
|
Achievement (1)
|
Multiplier
|
Weight
|
Result
|
Capital Investment Plan
|
$701M
|
$820M
|
2.00x
|
25%
|
0.50x
|
Cash from Operations Pre-Working Capital
|
$627M
|
$654M
|
1.75x
|
25%
|
0.44x
|
Adjusted Consolidated Net Income (2)
|
$367M
|
$379M
|
2.00x
|
25%
|
0.50x
|
Development Goals
|
1 Goal
|
Not Met
|
1.00x
|
25%
|
0.25x
|
Bonus Multiplier
|
|
|
|
|
1.69x
|
(1)
|
Amounts presented are rounded to the nearest million.
|
(2)
|
We utilize adjusted consolidated net income as a criterion in measuring achievement of financial goals for the executive bonus multiplier. This non-GAAP financial measure reconciles to consolidated net income of ITC Holdings as follows:
|
(in millions)
|
2019
|
||
Net Income
|
$
|
428
|
|
Adjustments Related to ROE Matters
|
(49
|
)
|
|
Adjusted Consolidated Net Income
|
$
|
379
|
|
NEO
|
Grant Value Percent of Salary
|
|
Ms. Apsey
|
250
|
%
|
Ms. Holloway
|
175
|
%
|
Mr. Jipping
|
175
|
%
|
Mr. Oginsky
|
175
|
%
|
Ms. Mason Soneral
|
175
|
%
|
Position
|
Ownership Level
|
Chief Executive Officer
|
2x annual base salary
|
Executive and Senior Vice Presidents
|
1.5x annual base salary
|
Vice Presidents
|
1x annual base salary
|
•
|
Any bonus or other incentive-based or equity-based compensation received, earned or recognized by the NEO during the 12-month period following the first public issuance or filing with the SEC of the financial document embodying such financial reporting requirement in excess of the amount that would have been received, earned or recognized if the restated financial results had been released instead; and
|
•
|
Any profits realized by the NEO from the sale of securities of the Company during that 12-month period.
|
Name
|
|
Year
|
|
Salary ($)
|
|
Bonus
($) (1) |
|
Stock Awards ($) (2)
|
|
Non-Equity Incentive Plan Compensation ($) (3)
|
|
Change in Pension Value & Non-qualified Deferred Compensation Earnings ($)(4)
|
|
All Other Compensation ($) (5)
|
|
Total ($)
|
||||||||||||||
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
||||||||||||||
Linda H. Apsey,
President & CEO |
|
2019
|
|
$
|
794,692
|
|
|
$
|
—
|
|
|
$
|
2,061,860
|
|
|
$
|
1,352,000
|
|
|
$
|
322,636
|
|
|
$
|
55,516
|
|
|
$
|
4,586,704
|
|
|
2018
|
|
752,712
|
|
|
—
|
|
|
1,747,386
|
|
|
1,169,118
|
|
|
123,927
|
|
|
66,909
|
|
|
3,860,052
|
|
||||||||
|
2017
|
|
725,000
|
|
|
644,700
|
|
|
1,760,834
|
|
|
1,205,313
|
|
|
232,747
|
|
|
57,751
|
|
|
4,626,345
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gretchen L. Holloway
SVP & CFO |
|
2019
|
|
388,115
|
|
|
—
|
|
|
703,598
|
|
|
659,100
|
|
|
147,032
|
|
|
36,362
|
|
|
1,934,207
|
|
|||||||
|
2018
|
|
367,962
|
|
|
—
|
|
|
599,433
|
|
|
572,945
|
|
|
81,152
|
|
|
34,351
|
|
|
1,655,843
|
|
||||||||
|
2017
|
|
317,981
|
|
|
265,000
|
|
|
552,539
|
|
|
581,875
|
|
|
80,454
|
|
|
33,126
|
|
|
1,830,975
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Jon E. Jipping,
EVP & COO |
|
2019
|
|
578,000
|
|
|
—
|
|
|
1,046,405
|
|
|
980,200
|
|
|
568,493
|
|
|
38,169
|
|
|
3,211,267
|
|
|||||||
|
2018
|
|
553,674
|
|
|
—
|
|
|
899,149
|
|
|
859,418
|
|
|
63,980
|
|
|
37,869
|
|
|
2,414,090
|
|
||||||||
|
2017
|
|
529,289
|
|
|
538,100
|
|
|
909,553
|
|
|
889,438
|
|
|
345,722
|
|
|
37,694
|
|
|
3,249,796
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Daniel J. Oginsky,
EVP & CAO |
|
2019
|
|
483,988
|
|
|
—
|
|
|
875,001
|
|
|
819,650
|
|
|
236,208
|
|
|
36,742
|
|
|
2,451,589
|
|
|||||||
|
2018
|
|
466,685
|
|
|
—
|
|
|
758,200
|
|
|
724,698
|
|
|
51,865
|
|
|
36,556
|
|
|
2,038,004
|
|
||||||||
|
2017
|
|
445,327
|
|
|
444,150
|
|
|
765,053
|
|
|
748,125
|
|
|
177,356
|
|
|
35,972
|
|
|
2,615,983
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Christine Mason Soneral, SVP & General Counsel
|
|
2019
|
|
389,469
|
|
|
—
|
|
|
703,598
|
|
|
659,100
|
|
|
170,742
|
|
|
36,500
|
|
|
1,959,409
|
|
|||||||
|
2018
|
|
377,204
|
|
|
—
|
|
|
612,373
|
|
|
585,333
|
|
|
66,424
|
|
|
35,250
|
|
|
1,676,584
|
|
||||||||
|
2017
|
|
362,404
|
|
|
529,899
|
|
|
620,551
|
|
|
606,813
|
|
|
146,625
|
|
|
36,378
|
|
|
2,302,670
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The compensation amounts reported in this column include retention bonuses and bonuses paid in connection with expanding responsibilities. Bonuses paid in connection with our annual corporate performance bonus plan are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. In 2017, Ms. Mason Soneral earned $162,399 in accordance with the retention payments related to her employment agreement amendment. In 2017, Ms. Holloway received a lump sum payment of $125,000 and Mr. Jipping received a lump sum payment of $11,000 due to their expanding responsibilities. These bonuses are set forth in the following table:
|
Name
|
|
Year
|
|
Retention Bonus ($)
|
|
Other Bonuses ($)
|
|
Total Bonus ($)
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Linda H. Apsey
|
|
2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2017
|
|
644,700
|
|
|
—
|
|
|
644,700
|
|
||||
Gretchen L. Holloway
|
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2017
|
|
140,000
|
|
|
125,000
|
|
|
265,000
|
|
||||
Jon E. Jipping
|
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2017
|
|
527,100
|
|
|
11,000
|
|
|
538,100
|
|
||||
Daniel J. Oginsky
|
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2017
|
|
444,150
|
|
|
—
|
|
|
444,150
|
|
||||
Christine Mason Soneral
|
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
2017
|
|
529,899
|
|
|
—
|
|
|
529,899
|
|
(2)
|
The amounts reported in this column represent the fair value of PBU awards and SBU awards granted to the NEOs under the 2017 Omnibus Plan in accordance with FASB Accounting Standards Codification Topic 718, or ASC 718.
|
(3)
|
The amounts reported in this column include cash awards tied to the achievement of annual Company performance goals under our annual corporate performance bonus plan in effect for each of 2019, 2018 and 2017. For information regarding the corporate goals for 2019, see “Compensation Discussion and Analysis - Key Components of Our NEO Compensation Program - Annual Corporate Performance Bonus."
|
(4)
|
All amounts reported in this column pertain to the tax-qualified defined benefit pension plan and the supplemental nonqualified, noncontributory retirement plan maintained by the Company. None of the income on nonqualified deferred compensation was above-market or preferential. Variations in the amounts from year to year reflect an additional year of service and pay changes used in the accrued benefit, as well as changes in assumptions on which the benefits are calculated, for which the formula has not been materially revised. The discount rate used for the present value of accumulated benefits was 3.67% in 2017, 4.39% in 2018 and 3.44% in 2019. The long-term interest crediting rate for the cash balance component of the Retirement Plan and ESRP changed from 4.50% to 4.00% at year-end 2019.
|
(5)
|
All Other Compensation includes amounts for auto allowance, financial, estate and legal planning, income tax return preparation, annual physical, club memberships, event tickets, personal liability insurance, personal use of company aircraft and for other benefits such as Company contributions on behalf of the NEOs pursuant to the matching component of the Savings and Investment Plan. Perquisites have been valued for purposes of these tables on the basis of the aggregate incremental cost to the Company. The incremental cost of the personal use of the Company aircraft was determined based upon the Company’s expenses incurred in connection with the actual costs of maintenance, landing, parking, crew and catering and estimated fuel costs relating to Ms. Apsey’s hours of use of the aircraft. Fuel expense was determined by calculating the average fuel cost for the month and the average amount of fuel used per hour. These benefits and perquisites for 2019, 2018 and 2017 are itemized in the table below as required by applicable SEC rules.
|
Name
|
|
Year
|
|
401(k) Match
|
|
Personal Use of Company Aircraft
|
|
Other Benefits
|
|
Total
|
||||||||
Linda H. Apsey
|
|
2019
|
|
$
|
16,800
|
|
|
$
|
19,777
|
|
|
$
|
18,939
|
|
|
$
|
55,516
|
|
|
2018
|
|
14,750
|
|
|
25,074
|
|
|
27,085
|
|
|
66,909
|
|
|||||
|
2017
|
|
14,400
|
|
|
12,752
|
|
|
30,599
|
|
|
57,751
|
|
|||||
Gretchen L. Holloway
|
|
2019
|
|
15,100
|
|
|
—
|
|
|
21,262
|
|
|
36,362
|
|
||||
|
2018
|
|
14,750
|
|
|
—
|
|
|
19,601
|
|
|
34,351
|
|
|||||
|
2017
|
|
14,400
|
|
|
—
|
|
|
18,726
|
|
|
33,126
|
|
|||||
Jon E. Jipping
|
|
2019
|
|
16,800
|
|
|
—
|
|
|
21,369
|
|
|
38,169
|
|
||||
|
2018
|
|
16,500
|
|
|
—
|
|
|
21,369
|
|
|
37,869
|
|
|||||
|
2017
|
|
16,200
|
|
|
—
|
|
|
21,494
|
|
|
37,694
|
|
|||||
Daniel J. Oginsky
|
|
2019
|
|
15,100
|
|
|
—
|
|
|
21,642
|
|
|
36,742
|
|
||||
|
2018
|
|
14,750
|
|
|
—
|
|
|
21,806
|
|
|
36,556
|
|
|||||
|
2017
|
|
14,400
|
|
|
—
|
|
|
21,572
|
|
|
35,972
|
|
|||||
Christine Mason Soneral
|
|
2019
|
|
15,100
|
|
|
—
|
|
|
21,400
|
|
|
36,500
|
|
||||
|
2018
|
|
14,750
|
|
|
—
|
|
|
20,500
|
|
|
35,250
|
|
|||||
|
2017
|
|
14,400
|
|
|
—
|
|
|
21,978
|
|
|
36,378
|
|
Name
|
|
Grant Date
|
|
Award Type
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units (#)
|
|
Grant Date Fair Value of Stock and Option Awards ($)(3)
|
||||||||||||||||||||
|
|
|
Threshold ($)
|
|
Target ($)(1)
|
|
Maximum ($)(1)
|
|
Threshold (#)
|
|
Target (#)(2)
|
|
Maximum (#)(2)
|
|
|
|||||||||||||||||
(a)
|
|
(b)
|
|
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
||||||||||||
Linda H. Apsey
|
|
3/6/2019
|
|
SBU
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,141
|
|
|
$
|
666,667
|
|
|
3/6/2019
|
|
PBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,141
|
|
|
40,282
|
|
|
80,564
|
|
|
—
|
|
|
1,333,334
|
|
|||||
|
|
|
ACPB
|
|
—
|
|
|
800,000
|
|
|
1,600,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gretchen L. Holloway
|
|
3/6/2019
|
|
SBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,873
|
|
|
227,496
|
|
||||
|
3/6/2019
|
|
PBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,873
|
|
|
13,746
|
|
|
27,492
|
|
|
—
|
|
|
454,993
|
|
|||||
|
|
|
ACPB
|
|
—
|
|
|
390,000
|
|
|
780,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Jon E. Jipping
|
|
3/6/2019
|
|
SBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,222
|
|
|
338,348
|
|
||||
|
3/6/2019
|
|
PBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,222
|
|
|
20,443
|
|
|
40,886
|
|
|
—
|
|
|
676,663
|
|
|||||
|
|
|
ACPB
|
|
—
|
|
|
580,000
|
|
|
1,160,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Daniel J. Oginsky
|
|
3/6/2019
|
|
SBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,547
|
|
|
282,906
|
|
||||
|
3/6/2019
|
|
PBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,548
|
|
|
17,095
|
|
|
34,190
|
|
|
—
|
|
|
565,845
|
|
|||||
|
|
|
ACPB
|
|
—
|
|
|
485,000
|
|
|
970,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Christine Mason Soneral
|
|
3/6/2019
|
|
SBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,873
|
|
|
227,496
|
|
||||
|
3/6/2019
|
|
PBU
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,874
|
|
|
13,746
|
|
|
27,496
|
|
|
—
|
|
|
454,993
|
|
|||||
|
|
|
ACPB
|
|
—
|
|
|
390,000
|
|
|
780,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
The amount shown in Column (d) represents the potential payout for the ACPB based on “target bonus levels.” The amount payable assuming maximum achievement of all bonus goals is set forth in column (e). Actual dollar amounts paid are disclosed and reported in the “Summary Compensation Table” as Non-Equity Incentive Plan Compensation. For more information regarding the ACPBs, see “Compensation Discussion and Analysis — Key Components of Our NEO Compensation Program — Annual Corporate Performance Bonus.”
|
(2)
|
Payment of each PBU award is contingent on meeting performance targets based on (1) Fortis Total Shareholder Return in comparison to the Total Shareholder Return during the performance period for each of the companies that comprise the 2019 Fortis peer group and (2) cumulative consolidated net income for each fiscal year during the performance period. The performance measures are independent of each other. If threshold, target or maximum performance goals are attained in the performance period, 50%, 100% or 200% of the target amount, respectively, may be earned. If actual performance falls between threshold, target and maximum, the awards would be prorated between levels based on performance outcome. For more information regarding performance share awards, see “Grant of Plan-Based Awards - Performance-Based Unit Award Agreements.”
|
(3)
|
Grant Date Fair Value consists of SBUs and PBUs awarded under the 2017 Omnibus Plan with a grant date of March 6, 2019. The PBUs reflected here are recorded at fair value at the date of grant, which was $33.10 per share. The SBUs reflected here are recorded at fair value at the date of grant, which was $33.10 per share. Share fair values were converted from Canadian Dollars to US Dollars using the “Award Conversion Rate” defined in the 2017 Omnibus Plan.
|
Measurement Category
|
Goal at Threshold
|
Shares at Threshold
|
Goal at Target
|
Shares at Target
|
Goal at Maximum
|
Shares at Maximum
|
Fortis Total Shareholder Return
|
30th percentile
|
50% of TSR Target Units
|
50th percentile
|
100% of TSR Target Units
|
85th percentile
|
200% of TSR Target Units
|
Cumulative Consolidated Net Income
|
99% of Target
|
50% of CCNI Target Units
|
100% of Target
|
100% of CCNI Target Units
|
102% of Target
|
200% of CCNI Target Units
|
Alliant Energy Corporation
|
Emera Incorporated
|
PG&E Corporation
|
Ameren Corporation
|
Entergy Corporation
|
Pinnacle West Capital Corporation
|
Atmos Energy Corporation
|
Evergy, Inc.
|
PPL Corporation
|
Canadian Utilities Limited
|
Eversource Energy
|
Public Service Enterprise Group Inc.
|
CenterPoint Energy Inc.
|
FirstEnergy Corp.
|
Sempra Energy
|
CMS Energy Corporation
|
Hydro One Limited
|
UGI Corporation
|
Consolidated Edison Inc.
|
NiSource Inc.
|
WEC Energy Group, Inc.
|
DTE Energy Company
|
OGE Energy Corp.
|
Xcel Energy Inc.
|
Edison International
|
|
|
Name
|
Number of Shares or Units of Stock That Have Not Vested (#) (SBUs)
|
Market Value of Shares or Units of Stock That Have Not Vested ($) (SBUs) (1)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (PBUs)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (PBUs) (1)
|
|||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|||
Linda H. Apsey
|
18,358 (2)
|
$
|
762,220
|
|
36,716 (3)
|
1,524,448
|
|
20,673 (4)
|
858,351
|
|
41,346 (5)
|
1,716,686
|
|
||
Gretchen L. Holloway
|
6,298 (2)
|
261,491
|
|
12,595 (3)
|
522,944
|
|
|
7,055 (4)
|
292,907
|
|
14,109 (5)
|
585,806
|
|
||
Jon E. Jipping
|
9,446 (2)
|
392,215
|
|
18,893 (3)
|
784,437
|
|
|
10,492 (4)
|
435,632
|
|
20,983 (5)
|
871,214
|
|
||
Daniel J. Oginsky
|
7,966 (2)
|
330,732
|
|
15,931 (3)
|
661,455
|
|
|
8,773 (4)
|
364,249
|
|
17,547 (5)
|
728,551
|
|
||
Christine Mason Soneral
|
6,434 (2)
|
267,120
|
|
12,867 (3)
|
534,238
|
|
|
7,055 (4)
|
292,907
|
|
14,109 (5)
|
585,806
|
|
(1)
|
Value was determined by multiplying the number of units that have not vested by the closing price of Fortis common stock on the NYSE as of December 31, 2019 ($41.52).
|
(2)
|
These unvested SBUs were granted in 2018 and generally vest on December 31, 2020. These SBU numbers include the original SBU grant plus dividend equivalent units earned.
|
(3)
|
These unvested PBUs were granted in 2018 and generally vest on December 31, 2020. These PBU numbers include the original PBU grant plus dividend equivalent units earned. The award contains performance conditions established by the Committee. In order for PBUs to vest such performance conditions must be achieved. Amounts reported reflect PBU payouts as if the target performance goals have been achieved.
|
(4)
|
These unvested SBUs were granted in 2019 and generally vest on December 31, 2021. These SBU numbers include the original SBU grant plus dividend equivalent units earned.
|
(5)
|
These unvested PBUs were granted in 2019 and generally vest on December 31, 2021. These PBU numbers include the original PBU grant plus dividend equivalent units earned.The award contains performance conditions established by the Committee. In order for PBUs to vest such performance conditions must be achieved. Amounts reported reflect PBU payouts as if the target performance goals have been achieved.
|
|
Stock Awards
|
|
||
Name
|
Number of Shares or Units of Stock Acquired on Vesting (#)
|
Value of Shares or Units of Stock Realized on Vesting ($) (1)
|
||
(a)
|
(b)
|
(c)
|
||
Linda H. Apsey
|
21,699 (2)
|
$
|
875,052
|
|
53,807 (3)
|
$
|
2,170,185
|
|
|
Gretchen L. Holloway
|
6,808 (2)
|
$
|
274,575
|
|
16,885 (3)
|
$
|
681,005
|
|
|
Jon E. Jipping
|
11,207 (2)
|
$
|
451,999
|
|
27,794 (3)
|
$
|
1,121,012
|
|
|
Daniel J. Oginsky
|
9,427 (3)
|
$
|
380,217
|
|
23,378 (2)
|
$
|
764,807
|
|
|
Christine Mason Soneral
|
7,646 (2)
|
$
|
308,389
|
|
18,962 (3)
|
$
|
764,807
|
|
(1)
|
Value is based on the 5-day VWAP price of common stock on the TSX on the vesting date, converted from Canadian Dollars to US Dollars using the “Award Conversion Rate” defined in the 2017 Omnibus Plan, which is $40.3327
|
(2)
|
Amounts reported reflect the vesting of SBUs granted March 8, 2017 and associated dividend equivalent units.
|
(3)
|
Amounts reported reflect the vesting of PBUs granted March 8, 2017 and associated dividend equivalent units. The award contains performance conditions established by the Committee. The performance period ended on December 31, 2019. The Committee certified the achievement of 124% of the applicable performance goals on February 4, 2020.
|
Name
|
|
Plan Name
|
|
Number of Years Credited Service (#)(1)
|
|
Present Value of Accumulated Benefit ($)(2)
|
|
Payments During Last Fiscal Year ($)
|
|||
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|||
Linda H. Apsey
|
|
Cash Balance Component
|
|
25.58
|
|
|
$
|
421,996
|
|
|
N/A
|
|
ESRP Shift
|
|
N/A
|
|
|
37,221
|
|
|
N/A
|
||
|
Total Qualified Plan
|
|
|
|
459,217
|
|
|
N/A
|
|||
|
ESRP
|
|
16.83
|
|
|
1,820,188
|
|
|
N/A
|
||
Gretchen Holloway
|
|
Cash Balance Component
|
|
15.95
|
|
|
279,327
|
|
|
N/A
|
|
|
Total Qualified Plan
|
|
|
|
279,327
|
|
|
N/A
|
|||
|
ESRP
|
|
4.91
|
|
|
285,187
|
|
|
N/A
|
||
Jon E. Jipping
|
|
Traditional Component
|
|
29.03
|
|
|
1,741,308
|
|
|
N/A
|
|
|
Total Qualified Plan
|
|
|
|
1,741,308
|
|
|
N/A
|
|||
|
ESRP
|
|
14.92
|
|
|
1,505,330
|
|
|
N/A
|
||
Daniel J. Oginsky
|
|
Cash Balance Component
|
|
15.20
|
|
|
343,226
|
|
|
N/A
|
|
|
Total Qualified Plan
|
|
|
|
343,226
|
|
|
N/A
|
|||
|
ESRP
|
|
15.20
|
|
|
1,200,313
|
|
|
N/A
|
||
Christine Mason Soneral
|
|
Cash Balance Component
|
|
12.29
|
|
|
275,932
|
|
|
N/A
|
|
|
Total Qualified Plan
|
|
|
|
275,932
|
|
|
N/A
|
|||
|
ESRP
|
|
12.28
|
|
|
668,476
|
|
|
N/A
|
(1)
|
Credited service is estimated as of December 31, 2019 and represents the service reflected in the determination of benefits. For determining vesting, service with DTE Energy is counted for the Qualified Plan only.
|
(2)
|
The “Present Value of Accumulated Benefit” is the estimated lump-sum equivalent value measured as of December 31, 2019 (the “measurement date” used for financial accounting purposes) of the benefit that was earned as of that date. Certain benefits are payable as an annuity only, not as a lump sum, and/or may not be payable for several years in the future. The values reflected are based on several assumptions. The date at which the present values were estimated was December 31, 2019. The rate at which future expected benefit payments were discounted in calculating present values was 3.44%, the same rate used for fiscal year-end 2019 financial accounting disclosure of the Qualified Plan. The future annual earnings rate on account balances under the cash balance and ESRP shift components of the Qualified Plan, and for ESRP benefits, was assumed to be 2.16% for 2020 and 4.00% thereafter.
|
Ms. Apsey
|
|
$
|
1,773,953
|
|
Ms. Holloway
|
|
270,720
|
|
|
Mr. Jipping
|
|
1,498,051
|
|
|
Mr. Oginsky
|
|
1,148,252
|
|
|
Ms. Mason Soneral
|
|
640,935
|
|
•
|
Cause means: a NEO’s continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 days following written notice by the Company to the NEO of such failure; dishonesty in the performance of the NEO’s duties; a NEO’s conviction of, or plea of nolo contender to, a crime constituting a felony or misdemeanor involving moral turpitude; willful malfeasance or willful misconduct in connection with a NEO’s duties; any act or omission which is injurious to the financial condition or business reputation of the Company; or violation of the non-compete or confidentiality provisions of the employment agreement.
|
•
|
Good reason means: a greater than 10% reduction in the total value of the NEO’s base salary, target bonus, and employee benefits; or if the NEO’s responsibilities and authority are substantially diminished.
|
•
|
any accrued but unpaid compensation and benefits including:
|
◦
|
Ms. Apsey: cash balance and ESRP shift under the Qualified Plan and vested portion of ESRP balance;
|
◦
|
Mr. Jipping: annual benefit under the traditional component of the Qualified Plan and vested portion of ESRP balance; and
|
◦
|
Mr. Oginsky, Ms. Mason Soneral and Ms. Holloway: cash balance under the Qualified Plan and vested portion of ESRP balance
|
•
|
continued payment of the NEO’s then-current base salary for two years;
|
•
|
if the termination is within six months before or two years after a “Change of Control” (as defined in the employment agreements), payment of an amount equal to two times the average of the ACPBs, that were payable to the NEO for the three fiscal years immediately preceding the fiscal year in which his or her employment terminates, payable in equal installments over the period in which continued base salary payments are made;
|
•
|
a pro rata portion of the ACPB for the year of termination, based upon the Company’s actual achievement of the performance targets for such year as determined under the annual corporate performance bonus plan and paid at the time that such bonus would normally be paid;
|
•
|
eligibility to continue coverage under our active medical, dental and vision plans subject to applicable COBRA rules; if such coverage is elected, we will reimburse the NEO for the shorter of 18 months, or until the NEO becomes eligible for coverage under another employer-sponsored group plan, in an amount equal to our periodic cost of such coverage for other executives, plus a tax gross-up amount;
|
•
|
outplacement services for up to two years; and
|
•
|
for Ms. Apsey, deemed satisfaction of the eligibility requirements of our Postretirement Welfare Plan for purposes of participation therein; and for Messrs. Jipping and Oginsky, participation in our Postretirement Welfare Plan only if, by the end of their specified severance period, they have achieved the necessary age and service credit otherwise necessary to meet the eligibility requirements. In addition, if we terminate our Postretirement Welfare Plan and, by application of the provisions described in the prior sentence, any of these NEOs would otherwise be entitled to retiree welfare benefits, we will establish other coverage for the NEO or the NEO will receive a cash payment equal to our cost of providing such benefits, in order to assist the NEO in obtaining other retiree welfare benefits.
|
Linda H. Apsey - Termination Scenarios: Value of Potential Payments
|
||||||||||||||||||||||||
Total Value of Severance, Benefits and Unvested Equity Awards(1)(2)
|
||||||||||||||||||||||||
|
|
Voluntary Resignation
|
|
Involuntary For Cause
|
|
Involuntary Not-for-Cause or Voluntary Good Reason
|
|
Change In Control (pre-tax)(3)
|
|
Disability
|
|
Death (pre-retirement)(4)
|
||||||||||||
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Severance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,600,000
|
|
|
$
|
4,012,555
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Target Short-term Bonus
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
800,000
|
|
|
800,000
|
|
||||||
Pro Rata Short-term (Annual) Incentive Comp
|
|
—
|
|
|
—
|
|
|
1,352,000
|
|
|
1,352,000
|
|
|
—
|
|
|
—
|
|
||||||
Retention Awards
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Service-Based Unit Awards (7)
|
|
—
|
|
|
—
|
|
|
254,075
|
|
|
1,620,567
|
|
|
1,620,567
|
|
|
1,620,567
|
|
||||||
Performance-Based Unit Awards
|
|
—
|
|
|
—
|
|
|
508,149
|
|
|
1,585,573
|
|
|
3,241,151
|
|
|
3,241,151
|
|
||||||
Benefits and Perquisites
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|||||||||||
Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESRP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Perquisites
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||||
Health & Welfare Benefits
|
|
—
|
|
|
—
|
|
|
29,255
|
|
|
29,255
|
|
|
—
|
|
|
—
|
|
||||||
Postretirement Welfare Plan (5)
|
|
—
|
|
|
—
|
|
|
693,833
|
|
|
693,833
|
|
|
—
|
|
|
—
|
|
||||||
Total Payout:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,462,312
|
|
|
$
|
9,318,783
|
|
|
$
|
5,661,718
|
|
|
$
|
5,661,718
|
|
Gretchen L. Holloway - Termination Scenarios: Value of Potential Payments
|
||||||||||||||||||||||||
Total Value of Severance, Benefits and Unvested Equity Awards(1)(2)
|
||||||||||||||||||||||||
|
|
Voluntary Resignation
|
|
Involuntary For Cause
|
|
Involuntary Not-for-Cause or Voluntary Good Reason
|
|
Change In Control (pre-tax)(3)
|
|
Disability
|
|
Death (pre-retirement)(4)
|
||||||||||||
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Severance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
780,000
|
|
|
$
|
1,662,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Target Short-term Bonus
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
390,000
|
|
|
390,000
|
|
||||||
Pro Rata Short-term (Annual) Incentive Comp
|
|
—
|
|
|
—
|
|
|
659,100
|
|
|
659,100
|
|
|
—
|
|
|
—
|
|
||||||
Service-Based Unit Awards (7)
|
|
—
|
|
|
—
|
|
|
87,164
|
|
|
554,417
|
|
|
554,417
|
|
|
554,417
|
|
||||||
Performance-Based Unit Awards (8)
|
|
—
|
|
|
—
|
|
|
174,315
|
|
|
542,889
|
|
|
1,108,760
|
|
|
1,108,760
|
|
||||||
280G Cutback
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(981,273
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESRP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Perquisites
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||||
Health & Welfare Benefits
|
|
—
|
|
|
—
|
|
|
29,462
|
|
|
29,462
|
|
|
—
|
|
|
—
|
|
||||||
Total Payout:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,755,041
|
|
|
$
|
2,491,699
|
|
|
$
|
2,053,177
|
|
|
$
|
2,053,177
|
|
Jon E. Jipping - Termination Scenarios: Value of Potential Payments
|
||||||||||||||||||||||||
Total Value of Severance, Benefits and Unvested Equity Awards(1)(2)
|
||||||||||||||||||||||||
|
|
Voluntary Resignation or Voluntary Good Reason
|
|
Involuntary For Cause
|
|
Involuntary Not-for-Cause
|
|
Change In Control (pre-tax)(3)
|
|
Disability
|
|
Death (pre-retirement)(4)
|
||||||||||||
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Severance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,160,000
|
|
|
$
|
2,980,981
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Target Short-term Bonus
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
580,000
|
|
|
580,000
|
|
||||||
Pro Rata Short-term (Annual) Incentive Comp
|
|
—
|
|
|
—
|
|
|
980,200
|
|
|
980,200
|
|
|
—
|
|
|
—
|
|
||||||
Service-Based Unit Awards (7)
|
|
827,826
|
|
|
—
|
|
|
130,733
|
|
|
827,826
|
|
|
827,826
|
|
|
827,826
|
|
||||||
Performance-Based Unit Awards (8)
|
|
—
|
|
|
—
|
|
|
261,479
|
|
|
811,854
|
|
|
1,655,659
|
|
|
1,655,659
|
|
||||||
Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Plan (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESRP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Perquisites
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||||
Health & Welfare Benefits
|
|
—
|
|
|
—
|
|
|
29,176
|
|
|
29,176
|
|
|
—
|
|
|
—
|
|
||||||
Postretirement Welfare Plan (5)
|
|
—
|
|
|
—
|
|
|
723,287
|
|
|
723,287
|
|
|
|
|
|
||||||||
Total Payout:
|
|
$
|
827,826
|
|
|
$
|
—
|
|
|
$
|
3,309,875
|
|
|
$
|
6,378,324
|
|
|
$
|
3,063,485
|
|
|
$
|
3,063,485
|
|
Daniel J. Oginsky - Termination Scenarios: Value of Potential Payments
|
||||||||||||||||||||||||
Total Value of Severance, Benefits and Unvested Equity Awards(1)(2)
|
||||||||||||||||||||||||
|
|
Voluntary Resignation
|
|
Involuntary For Cause
|
|
Involuntary Not-for-Cause or Voluntary Good Reason
|
|
Change In Control (pre-tax)(3)
|
|
Disability
|
|
Death (pre-retirement)(4)
|
||||||||||||
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Severance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
970,000
|
|
|
$
|
2,503,869
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Target Short-term Bonus
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
485,000
|
|
|
485,000
|
|
||||||
Pro Rata Short-term (Annual) Incentive Comp
|
|
—
|
|
|
—
|
|
|
819,650
|
|
|
819,650
|
|
|
—
|
|
|
—
|
|
||||||
Service-Based Unit Awards (7)
|
|
—
|
|
|
—
|
|
|
110,249
|
|
|
695,003
|
|
|
695,003
|
|
|
695,003
|
|
||||||
Performance-Based Unit Awards (8)
|
|
—
|
|
|
—
|
|
|
220,485
|
|
|
682,547
|
|
|
1,389,995
|
|
|
1,389,995
|
|
||||||
Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESRP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Perquisites
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||||
Health & Welfare Benefits
|
|
—
|
|
|
—
|
|
|
30,401
|
|
|
30,401
|
|
|
—
|
|
|
—
|
|
||||||
Total Payout:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,175,785
|
|
|
$
|
4,756,470
|
|
|
$
|
2,569,998
|
|
|
$
|
2,569,998
|
|
Christine Mason Soneral - Termination Scenarios: Value of Potential Payments
|
||||||||||||||||||||||||
Total Value of Severance, Benefits and Unvested Equity Awards(1)(2)
|
||||||||||||||||||||||||
|
|
Voluntary Resignation
|
|
Involuntary For Cause
|
|
Involuntary Not-for-Cause or Voluntary Good Reason
|
|
Change In Control (pre-tax)(3)
|
|
Disability
|
|
Death (pre-retirement)(4)
|
||||||||||||
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash Severance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
780,000
|
|
|
$
|
2,038,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Target Short-term Bonus
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
390,000
|
|
|
390,000
|
|
||||||
Pro Rata Short-term (Annual) Incentive Comp
|
|
—
|
|
|
—
|
|
|
659,100
|
|
|
659,100
|
|
|
—
|
|
|
—
|
|
||||||
Service-Based Unit Awards (7)
|
|
—
|
|
|
—
|
|
|
89,047
|
|
|
560,063
|
|
|
560,063
|
|
|
560,063
|
|
||||||
Performance-Based Unit Awards (8)
|
|
—
|
|
|
—
|
|
|
178,079
|
|
|
550,407
|
|
|
1,120,053
|
|
|
1,120,053
|
|
||||||
Benefits and Perquisites
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Retirement Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESRP
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Perquisites
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||||
Health & Welfare Benefits
|
|
—
|
|
|
—
|
|
|
30,665
|
|
|
30,665
|
|
|
—
|
|
|
—
|
|
||||||
Total Payout:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,761,891
|
|
|
$
|
3,863,726
|
|
|
$
|
2,070,116
|
|
|
$
|
2,070,116
|
|
(1)
|
All scenarios include the value of severance. For Ms. Apsey and Mr. Jipping, the value of the Postretirement Welfare Plan is additionally included where applicable. The Pension Benefits Table assumes that none of the NEOs are terminated prior to retirement age and that benefits are paid once retirement commences (age 58 is assumed). All other accrued pension benefits, outside of present value reductions outlined in footnote (5), and additional pension benefits upon death, have not been included in these termination scenarios but can be found in the “Pension Benefits Table”.
|
(2)
|
Upon any termination of employment, benefits that are accrued but unpaid prior to that event are paid. These benefits are assumed to be $0 in the above tables.
|
(3)
|
Change in control values include severance amounts reflecting cutbacks to the extent employer payments exceed the executive respective limits. Ms. Holloway would be subject to an excise tax on the employer payments as of the assumed change in control date; therefore, a cutback in the amount of $981,273 has been reflected.
|
(4)
|
In the event of Mr. Jipping’s termination for death (pre-retirement), his spouse would receive half the 50% joint and survivor annuity under the traditional component of the Qualified Plan, also reduced to reflect a 90% early retirement factor that would apply at age 58 since Mr. Jipping does not have 30 years of service as of December 31, 2019. Under termination for death (pre-retirement), Ms. Apsey’s, Ms. Mason Soneral’s, Ms. Holloway’s, and Mr. Oginsky’s Qualified Plan benefits are payable immediately to the surviving spouse (if any) and ESRP benefits are payable to a designated beneficiary. The above termination scenarios do not reflect the reduction in present value of death benefits ($57,899 for Ms. Apsey, $28,636 for Ms. Holloway,$970,244 for Mr. Jipping, $66,948 for Mr. Oginsky, and $38,909 for Ms. Mason Soneral) compared to present value in the Pension Benefits Table.
|
(5)
|
The value of the Postretirement Welfare Plan benefit is included in involuntary termination not for cause and change in control scenarios for Ms. Apsey and Mr. Jipping since their employment agreement includes a provision for deemed satisfaction of the eligibility requirements when terminated under these scenarios. It is assumed each would commence their Postretirement Welfare Benefits at age 58. The rate at which future expected benefit payments were discounted in calculating the Postretirement Welfare Plan present values was 3.61%, the same rate used for fiscal year-end 2019 accounting disclosure of the Postretirement Welfare Plan.
|
(6)
|
The Pension Benefits Table assumes that Mr. Jipping would not be terminated before retirement age and no early retirement reduction was applied. In all termination scenarios, however, a 90% early retirement factor would apply at age 58 because Mr. Jipping has less than 30 years of service as of December 31, 2019. The above table does not reflect the reduction in the present value ($174,131 except for death) due to applying the 90% early retirement factor.
|
(7)
|
Under the 2017 Omnibus Plan, outstanding and unvested SBUs and respective dividend equivalents shall be deemed to be vested SBUs and redeemable on the Change of Control Redemption Date (as defined in the 2017 Omnibus Plan). In the case of Death or Disability (each as defined in the 2017 Omnibus Plan) termination, outstanding and unvested SBUs and respective dividend equivalents shall be deemed to be vested SBUs and redeemable on the date of the death or on the date on which the grantee’s service is terminated due to Disability. In the case of Retirement or Involuntary Termination Without Cause (each as defined in the 2017 Omnibus Plan) within one year of the grant date, outstanding and unvested SBUs and respective dividend equivalents shall be deemed to be forfeited. If Retirement or Involuntary Termination Without Cause occurs one year or more after the grant date, SBUs and respective dividend equivalents shall be deemed to have vested pro-rata based on the period served from the grant date to termination. For Mr. Jipping, pursuant to the Jipping Letter Agreement, upon a voluntary termination of employment, his SBUs, which would otherwise be forfeited, will continue to vest on their normal schedule.
|
(8)
|
Under the 2017 Omnibus Plan, outstanding and unvested PBU awards and respective dividend equivalents accelerate on a prorated basis under a Change in Control (as defined in the 2017 Omnibus Plan), based on the higher of (A) 100% of the target number of PBUs in the award or (B) the actual payout percentage based on the Committee’s assessment of performance of the payment criteria from the beginning of the Payment Criteria Period for the award through the date of the Change of Control (as defined in the 2017 Omnibus Plan). In the case of Death or Disability termination, the outstanding and unvested PBU awards and respective dividend equivalents will remain outstanding and be payable on the payout date of such awards subject to the achievement of the applicable payment criteria. Values shown in the tables above are based on target performance as an estimate of potential payments. In the case of Retirement or Involuntary Termination Without Cause within one year of the award grant date, outstanding and unvested PBU awards and respective dividend equivalents shall be deemed to be forfeited. If Retirement or Involuntary Termination Without Cause occurs one year or more after the grant date, PBU awards and respective dividend equivalents shall be deemed to have vested pro-rata based on the period served from grant date to termination. For Mr. Jipping, pursuant to the Jipping Letter Agreement, upon a voluntary termination of employment, his PBUs, which would otherwise be forfeited, will continue to vest on their normal schedule. The table does not reflect any value for Mr. Jipping’s outstanding and unvested PBUs as the payout is subject to achievement of the performance measures.
|
Name
|
|
Fees Earned or Paid in Cash ($) (1)
|
|
Total ($)
|
||||
(a)
|
|
(b)
|
|
(h)
|
||||
Robert A. Elliott
|
|
$
|
132,500
|
|
|
$
|
132,500
|
|
Albert Ernst
|
|
132,500
|
|
|
132,500
|
|
||
Rhys D. Evenden (2)
|
|
66,250
|
|
|
66,250
|
|
||
Alexander I. Greenbaum (3)
|
|
—
|
|
|
—
|
|
||
James P. Laurito
|
|
132,500
|
|
|
132,500
|
|
||
Barry V. Perry
|
|
132,500
|
|
|
132,500
|
|
||
Sandra E. Pierce
|
|
143,750
|
|
|
143,750
|
|
||
Kevin L. Prust
|
|
143,750
|
|
|
143,750
|
|
||
A. Douglas Rothwell
|
|
132,500
|
|
|
132,500
|
|
||
Thomas G. Stephens
|
|
143,750
|
|
|
143,750
|
|
||
Joseph L. Welch
|
|
170,000
|
|
|
170,000
|
|
(1)
|
Includes annual Board retainer and committee chairmanship retainer, as well as a chairman fee (for Mr. Welch only).
|
(2)
|
The fees payable to Mr. Evenden are made directly to Betchworth Investment Pte. Ltd. Mr. Evenden left the Board in July 2019.
|
(3)
|
Mr. Greenbaum joined the Board in July 2019. Mr.Greenbaum waived all compensation due to him for his service on the Board.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
•
|
each of our current directors;
|
•
|
each of the persons named in the “Summary Compensation Table” under Item 11; and
|
•
|
all current directors and executive officers as a group.
|
Name of Beneficial Owner
|
Number of Company Shares
Beneficially Owned (#)
|
Percent of Class (%)
|
Number of Fortis shares Beneficially Owned (#)
|
|
Percent of Class (%)
|
||||
Linda H. Apsey
|
—
|
|
—
|
|
53,889
|
|
|
*
|
|
Gretchen L. Holloway
|
—
|
|
—
|
|
12,929
|
|
|
*
|
|
Jon E. Jipping
|
—
|
|
—
|
|
120,000
|
|
|
*
|
|
Daniel J. Oginsky
|
—
|
|
—
|
|
72,621
|
|
|
*
|
|
Christine Mason Soneral
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Robert A. Elliott
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Albert Ernst
|
—
|
|
—
|
|
13,597
|
|
(1)
|
*
|
|
Alexander I. Greenbaum
|
—
|
|
—
|
|
—
|
|
|
—
|
|
James P. Laurito
|
—
|
|
—
|
|
19,408
|
|
|
*
|
|
Barry V. Perry
|
—
|
|
—
|
|
840,134
|
|
(2)
|
*
|
|
Sandra E. Pierce
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Kevin L. Prust
|
—
|
|
—
|
|
—
|
|
|
—
|
|
A. Douglas Rothwell
|
—
|
|
—
|
|
—
|
|
|
—
|
|
Thomas G. Stephens
|
—
|
|
—
|
|
2,098
|
|
|
*
|
|
Joseph L. Welch
|
—
|
|
—
|
|
1,178,328
|
|
(3)
|
*
|
|
All current directors and executive officers as a group (16 persons)
|
—
|
|
—
|
%
|
2,313,004
|
|
|
*
|
|
(1)
|
Includes 4,234 shares owned by the spouse of Mr. Ernst.
|
(2)
|
Includes 31,258 shares owned by the spouse of Mr. Perry as well as 519,462 shares that may be acquired upon exercise of options that are currently exercisable or become exercisable prior to April 2, 2020.
|
(3)
|
The amount shown in the table does not include 534,064 shares beneficially owned by the spouse of Mr. Welch. Mr. Welch has no voting or dispositive power with respect to such shares and he disclaims ownership of such shares.
|
|
2019
|
2018
|
||||
Audit fees (1)
|
$
|
1,901,000
|
|
$
|
1,813,000
|
|
Audit-related fees (2)
|
54,000
|
|
97,000
|
|
||
Tax fees (3)
|
208,000
|
|
386,000
|
|
||
All other fees (4)
|
9,000
|
|
139,000
|
|
||
Total fees
|
$
|
2,172,000
|
|
$
|
2,435,000
|
|
(1)
|
Audit fees were for professional services rendered for the audit of our consolidated financial statements and internal controls and reviews of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Deloitte in connection with statutory and regulatory filing engagements.
|
(2)
|
Audit-related fees were for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include audit of our employee benefit plans and services provided in connection with securities offerings.
|
(3)
|
Tax fees were professional services for federal and state tax compliance, tax advice and tax planning.
|
(4)
|
All other fees were for services other than the services reported above. These services included subscriptions to the Deloitte Accounting Research Tool, attendance at Deloitte sponsored conferences and labs, and due diligence work in 2018.
|
(a)
|
(1)
|
Financial Statements:
|
|
|
Management’s Report on Internal Control over Financial Reporting
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Statements of Financial Position as of December 31, 2019 and 2018
|
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Changes in Stockholder's Equity for the Years Ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017
|
|
|
Notes to Consolidated Financial Statements
|
|
(2)
|
Financial Statement Schedules
|
|
|
Schedule I — Condensed Financial Information of Registrant
|
|
|
All other schedules for which provision is made in Regulation S-X either (i) are not required under the related instructions or are inapplicable and, therefore, have been omitted, or (ii) the information required is included in the consolidated financial statements or the notes thereto that are a part hereof.
|
(b)
|
|
Exhibit Listing
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
|
|
2.1
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
4.3
|
|
|
|
|
|
|
|
4.5
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
4.8
|
|
|
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
4.10
|
|
|
|
|
|
|
4.12
|
|
|
|
|
|
|
|
4.14
|
|
|
|
|
|
|
|
4.17
|
|
|
|
|
|
|
|
4.18
|
|
|
|
|
|
|
|
4.19
|
|
|
|
|
|
|
|
4.20
|
|
|
|
|
|
|
|
4.23
|
|
|
|
|
|
|
|
4.24
|
|
|
|
|
|
|
|
4.25
|
|
|
|
|
|
|
|
4.26
|
|
|
|
|
|
|
|
4.27
|
|
|
|
|
|
|
|
4.28
|
|
|
|
|
|
|
|
4.29
|
|
|
|
|
|
|
|
4.30
|
|
|
|
|
|
|
|
4.31
|
|
|
|
|
|
|
|
4.32
|
|
|
|
|
|
|
|
4.33
|
|
|
|
|
|
|
|
4.34
|
|
|
|
|
|
|
4.35
|
|
|
|
|
|
|
|
4.36
|
|
|
|
|
|
|
|
4.38
|
|
|
|
|
|
|
|
4.39
|
|
|
|
|
|
|
|
4.40
|
|
|
|
|
|
|
|
4.41
|
|
|
|
|
|
|
|
4.42
|
|
|
|
|
|
|
|
4.43
|
|
|
|
|
|
|
|
4.44
|
|
|
|
|
|
|
|
4.45
|
|
|
|
|
|
|
|
4.46
|
|
|
|
|
|
|
|
4.47
|
|
|
|
|
|
|
|
4.48
|
|
|
|
|
|
|
|
4.49
|
|
|
|
|
|
|
|
4.50
|
|
|
|
|
|
|
|
4.51
|
|
|
|
|
|
|
|
*10.27
|
|
|
|
|
|
|
|
10.51
|
|
|
|
|
|
|
|
*10.81
|
|
|
|
|
|
|
*10.109
|
|
|
|
|
|
|
|
*10.110
|
|
|
|
|
|
|
|
*10.111
|
|
|
|
|
|
|
|
*10.120
|
|
|
|
|
|
|
|
*10.122
|
|
|
|
|
|
|
|
*10.150
|
|
|
|
|
|
|
|
*10.168
|
|
|
|
|
|
|
|
*10.172
|
|
|
|
|
|
|
|
*10.173
|
|
|
|
|
|
|
|
*10.176
|
|
|
|
|
|
|
|
*10.177
|
|
|
|
|
|
|
|
*10.178
|
|
|
|
|
|
|
|
*10.179
|
|
|
|
|
|
|
|
10.182
|
|
|
|
|
|
|
|
10.183
|
|
|
|
|
|
|
|
10.184
|
|
|
|
|
|
|
|
10.185
|
|
|
|
|
|
|
|
10.186
|
|
|
|
|
|
|
10.187
|
|
|
|
|
|
|
|
10.188
|
|
|
|
|
|
|
|
*10.190
|
|
|
|
|
|
|
|
*10.191
|
|
|
|
|
|
|
|
*10.192
|
|
|
|
|
|
|
|
10.193
|
|
|
|
|
|
|
|
10.194
|
|
|
|
|
|
|
|
10.195
|
|
|
|
|
|
|
|
10.196
|
|
|
|
|
|
|
10.197
|
|
|
|
|
|
|
|
10.198
|
|
|
|
|
|
|
|
10.199
|
|
|
|
|
|
|
|
*10.200
|
|
|
|
|
|
|
|
*10.201
|
|
|
|
|
|
|
|
*10.202
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
101.SCH
|
|
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
|
101.CAL
|
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
101.DEF
|
|
|
Inline XBRL Taxonomy Extension Definition Database
|
|
|
|
|
101.LAB
|
|
|
Inline XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
101.PRE
|
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
104
|
|
|
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL
|
*
|
|
Management contract or compensatory plan or arrangement.
|
|
December 31,
|
||||||
(In millions, except share data)
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2
|
|
|
$
|
3
|
|
Accounts receivable from subsidiaries
|
17
|
|
|
26
|
|
||
Intercompany tax receivable from subsidiaries
|
3
|
|
|
15
|
|
||
Income tax receivable
|
—
|
|
|
1
|
|
||
Prepaid and other current assets
|
5
|
|
|
1
|
|
||
Total current assets
|
27
|
|
|
46
|
|
||
Other assets
|
|
|
|
||||
Investment in subsidiaries
|
5,136
|
|
|
4,733
|
|
||
Deferred income taxes
|
140
|
|
|
104
|
|
||
Other assets
|
99
|
|
|
90
|
|
||
Total other assets
|
5,375
|
|
|
4,927
|
|
||
TOTAL ASSETS
|
$
|
5,402
|
|
|
$
|
4,973
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accrued compensation
|
$
|
61
|
|
|
$
|
30
|
|
Accrued interest
|
21
|
|
|
26
|
|
||
Debt maturing within one year
|
200
|
|
|
—
|
|
||
Other current liabilities
|
11
|
|
|
12
|
|
||
Total current liabilities
|
293
|
|
|
68
|
|
||
Accrued pension and postretirement liabilities
|
73
|
|
|
68
|
|
||
Other liabilities
|
37
|
|
|
19
|
|
||
Long-term debt (net of deferred financing fees and discount of $17 and $20, respectively)
|
2,767
|
|
|
2,767
|
|
||
STOCKHOLDER’S EQUITY
|
|
|
|
||||
Common stock, without par value, 235,000,000 shares authorized, 224,203,112 shares issued and outstanding at December 31, 2019 and 2018
|
892
|
|
|
892
|
|
||
Retained earnings
|
1,333
|
|
|
1,155
|
|
||
Accumulated other comprehensive income
|
7
|
|
|
4
|
|
||
Total stockholder’s equity
|
2,232
|
|
|
2,051
|
|
||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
|
$
|
5,402
|
|
|
$
|
4,973
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Other income (expense), net
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
2
|
|
General and administrative expense
|
(25
|
)
|
|
(7
|
)
|
|
(11
|
)
|
|||
Taxes other than income taxes
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Interest expense
|
(119
|
)
|
|
(114
|
)
|
|
(120
|
)
|
|||
LOSS BEFORE INCOME TAXES
|
(141
|
)
|
|
(120
|
)
|
|
(131
|
)
|
|||
INCOME TAX BENEFIT
|
(44
|
)
|
|
(30
|
)
|
|
(6
|
)
|
|||
LOSS AFTER TAXES
|
(97
|
)
|
|
(90
|
)
|
|
(125
|
)
|
|||
EQUITY IN SUBSIDIARIES’ NET EARNINGS
|
525
|
|
|
420
|
|
|
444
|
|
|||
NET INCOME
|
428
|
|
|
330
|
|
|
319
|
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Derivative instruments (net of tax of $1 for the year ended December 31, 2019 and less than $1 for the year ended December 31, 2018)
|
3
|
|
|
1
|
|
|
—
|
|
|||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
3
|
|
|
1
|
|
|
—
|
|
|||
TOTAL COMPREHENSIVE INCOME
|
$
|
431
|
|
|
$
|
331
|
|
|
$
|
319
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
428
|
|
|
$
|
330
|
|
|
$
|
319
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
||||||
Equity in subsidiaries' earnings
|
(525
|
)
|
|
(420
|
)
|
|
(444
|
)
|
|||
Dividends from subsidiaries
|
3
|
|
|
26
|
|
|
3
|
|
|||
Deferred and other income taxes
|
(51
|
)
|
|
(23
|
)
|
|
67
|
|
|||
Net intercompany tax payments from (to) subsidiaries
|
14
|
|
|
59
|
|
|
(13
|
)
|
|||
Other
|
6
|
|
|
2
|
|
|
5
|
|
|||
Changes in assets and liabilities, exclusive of changes shown separately:
|
|
|
|
|
|
||||||
Accounts receivable from subsidiaries
|
9
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Intercompany tax receivable from subsidiaries
|
11
|
|
|
(13
|
)
|
|
2
|
|
|||
Income tax receivable
|
1
|
|
|
14
|
|
|
2
|
|
|||
Intercompany tax payable to subsidiaries
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||
Accrued compensation
|
31
|
|
|
2
|
|
|
14
|
|
|||
Other current and non-current assets and liabilities, net
|
9
|
|
|
13
|
|
|
—
|
|
|||
Net cash used in operating activities
|
(64
|
)
|
|
(14
|
)
|
|
(121
|
)
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Equity contributions to subsidiaries
|
(120
|
)
|
|
(202
|
)
|
|
(148
|
)
|
|||
Return of capital from subsidiaries
|
239
|
|
|
324
|
|
|
296
|
|
|||
Other
|
(1
|
)
|
|
(1
|
)
|
|
(9
|
)
|
|||
Net cash provided by investing activities
|
118
|
|
|
121
|
|
|
139
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Issuance of long-term debt, net of discount
|
—
|
|
|
—
|
|
|
999
|
|
|||
Borrowings under revolving credit agreement
|
72
|
|
|
37
|
|
|
97
|
|
|||
Borrowings under term loan credit agreements
|
200
|
|
|
—
|
|
|
200
|
|
|||
Net issuance of commercial paper, net of discount
|
200
|
|
|
—
|
|
|
(148
|
)
|
|||
Retirement of long-term debt — including extinguishment of debt costs
|
(203
|
)
|
|
—
|
|
|
(437
|
)
|
|||
Repayments of revolving credit agreement
|
(75
|
)
|
|
—
|
|
|
(170
|
)
|
|||
Repayments of term loan credit agreement
|
—
|
|
|
—
|
|
|
(200
|
)
|
|||
Dividends to ITC Investment Holdings
|
(250
|
)
|
|
(200
|
)
|
|
(300
|
)
|
|||
Other
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
Net cash (used in) provided by financing activities
|
(56
|
)
|
|
(164
|
)
|
|
39
|
|
|||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(2
|
)
|
|
(57
|
)
|
|
57
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
4
|
|
|
61
|
|
|
4
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
61
|
|
(In millions)
|
|
||
2020
|
$
|
200
|
|
2021
|
200
|
|
|
2022
|
534
|
|
|
2023
|
250
|
|
|
2024
|
400
|
|
|
2025 and thereafter
|
1,400
|
|
|
Total
|
$
|
2,984
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Equity contributions to subsidiaries
|
$
|
120
|
|
|
$
|
202
|
|
|
$
|
148
|
|
Dividends from subsidiaries (a)
|
3
|
|
|
26
|
|
|
3
|
|
|||
Return of capital from subsidiaries (a)
|
239
|
|
|
324
|
|
|
296
|
|
|||
|
|
|
|
|
|
||||||
Net income tax payments (to) from: (b)
|
|
|
|
|
|
||||||
ITCTransmission
|
$
|
7
|
|
|
$
|
39
|
|
|
$
|
4
|
|
METC
|
4
|
|
|
7
|
|
|
1
|
|
|||
ITC Midwest
|
3
|
|
|
3
|
|
|
5
|
|
|||
ITC Great Plains
|
(1
|
)
|
|
9
|
|
|
11
|
|
|||
ITC Interconnection
|
1
|
|
|
1
|
|
|
1
|
|
|||
Other (c)
|
—
|
|
|
—
|
|
|
(35
|
)
|
(a)
|
Includes ITCTransmission, MTH, ITC Midwest and other subsidiaries.
|
(b)
|
The net income tax payments were pursuant to intercompany tax sharing arrangements, and the total of these tax payments is presented as a net cash outflow or inflow from operating activities in the condensed parent company statements of cash flows. Other reconciling items between the parent company and the consolidated tax liabilities are presented as deferred and other income taxes in the adjustments to reconcile net income to net cash provided by operating activities. Additionally, ITC Holdings paid its subsidiaries for NOLs utilized by the consolidated group.
|
(c)
|
Includes all of our non-regulated subsidiaries.
|
|
December 31,
|
||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Cash and cash equivalents
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
60
|
|
|
$
|
4
|
|
Restricted cash included in:
|
|
|
|
|
|
|
|
||||||||
Other non-current assets
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
Total cash, cash equivalents and restricted cash
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
61
|
|
|
$
|
4
|
|
|
Year Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Supplementary cash flows information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
117
|
|
|
$
|
117
|
|
|
$
|
115
|
|
Income tax refunds received
|
3
|
|
|
13
|
|
|
1
|
|
|||
Supplementary non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Equity transfers from subsidiaries
|
—
|
|
|
—
|
|
|
(2
|
)
|
ITC HOLDINGS CORP.
|
|
||
By:
|
/s/ LINDA H. APSEY
|
|
|
|
Linda H. Apsey
|
|
|
|
President and Chief Executive Officer
|
|
Signature
|
Title
|
Date
|
/s/ LINDA H. APSEY
|
President and Chief Executive
|
February 12, 2020
|
Linda H. Apsey
|
Officer (principal executive officer)
|
|
|
|
|
/s/ GRETCHEN L. HOLLOWAY
|
Senior Vice President and Chief Financial Officer
|
February 12, 2020
|
Gretchen L. Holloway
|
(principal financial and accounting officer)
|
|
|
|
|
/s/ JOSEPH L. WELCH
|
Director and Chairman
|
February 12, 2020
|
Joseph L. Welch
|
|
|
|
|
|
/s/ ROBERT A. ELLIOTT
|
Director
|
February 12, 2020
|
Robert A. Elliott
|
|
|
|
|
|
/s/ ALBERT ERNST
|
Director
|
February 12, 2020
|
Albert Ernst
|
|
|
|
|
|
/s/ ALEXANDER I. GREENBAUM
|
Director
|
February 12, 2020
|
Alexander I. Greenbaum
|
|
|
|
|
|
/s/ JAMES P. LAURITO
|
Director
|
February 12, 2020
|
James P. Laurito
|
|
|
|
|
|
/s/ BARRY V. PERRY
|
Director
|
February 12, 2020
|
Barry V. Perry
|
|
|
|
|
|
/s/ SANDRA E. PIERCE
|
Director
|
February 12, 2020
|
Sandra E. Pierce
|
|
|
|
|
|
/s/ KEVIN L. PRUST
|
Director
|
February 12, 2020
|
Kevin L. Prust
|
|
|
|
|
|
/s/ A. DOUGLAS ROTHWELL
|
Director
|
February 12, 2020
|
A. Douglas Rothwell
|
|
|
|
|
|
/s/ THOMAS G. STEPHENS
|
Director
|
February 12, 2020
|
Thomas G. Stephens
|
|
|
1 Year Itc Chart |
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