ITC Holdings Corp. (Form: 10-Q, Received: 11/05/2024 06:17:41)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-32576

ITC HOLDINGS CORP.

(Exact Name of Registrant as Specified in Its Charter)


Michigan						32-0058047
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

27175 Energy Way

Novi, MI 48377

(Address of Principal Executive Offices, Including Zip Code)

(248) 946-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☑

* The registrant is a voluntary filer and has not been subject to the filing requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the preceding 12 months.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

☑

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

All shares of outstanding common stock of ITC Holdings Corp. are held by its parent company, ITC Investment Holdings Inc., which is an indirect majority owned subsidiary of Fortis Inc. There were 224,203,112 shares of common stock, no par value, outstanding as of November 4, 2024.

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ITC Holdings Corp.

Form 10-Q for the Quarterly Period Ended September 30, 2024

INDEX


			Page
Part I. Financial Information			5
Item 1. Financial Statements			5
Condensed Consolidated Statements of Financial Position (Unaudited)			5
Condensed Consolidated Statements of Comprehensive Income (Unaudited)			6
Condensed Consolidated Statements of Changes in Stockholder’s Equity (Unaudited)			7
Condensed Consolidated Statements of Cash Flows (Unaudited)			8
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			32
Item 4. Controls and Procedures			32
Part II. Other Information			33
Item 1. Legal Proceedings			33
Item 1A. Risk Factors			33
Item 6. Exhibits			33
Signatures			34

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DEFINITIONS

Unless otherwise noted or the context requires, all references in this report to:

ITC Holdings Corp. and its subsidiaries

•“ITC Great Plains” are references to ITC Great Plains, LLC, a wholly-owned subsidiary of ITC Holdings;

•“ITC Holdings” are references to ITC Holdings Corp., a wholly-owned subsidiary of ITC Investment Holdings, and not any of ITC Holdings’ subsidiaries;

•“ITC Midwest” are references to ITC Midwest LLC, a wholly-owned subsidiary of ITC Holdings;

•“ITCTransmission” are references to International Transmission Company, a wholly-owned subsidiary of ITC Holdings;

•“METC” are references to Michigan Electric Transmission Company, LLC, a wholly-owned subsidiary of MTH;

•“MISO Regulated Operating Subsidiaries” are references to ITCTransmission, METC and ITC Midwest together;

•“MTH” are references to Michigan Transco Holdings, LLC, the sole member of METC and a wholly-owned subsidiary of ITC Holdings;

•“Regulated Operating Subsidiaries” are references primarily to ITCTransmission, METC, ITC Midwest, and ITC Great Plains together; and

•“Company,” “we,” “our” and “us” are references to ITC Holdings together with all of its subsidiaries.

Other definitions

•“AFUDC” are references to an allowance for funds used during construction;

•“AOCI” are references to accumulated other comprehensive income or loss;

•“Consumers Energy” are references to Consumers Energy Company, a wholly-owned subsidiary of CMS Energy Corporation;

•“D.C. Circuit Court” are references to the U.S. Court of Appeals for the District of Columbia Circuit;

•“DTE Electric” are references to DTE Electric Company, a wholly-owned subsidiary of DTE Energy Company;

•“Exchange Act” are references to the Securities Exchange Act of 1934, as amended;

•“FASB” are references to the Financial Accounting Standards Board;

•“FERC” are references to the Federal Energy Regulatory Commission;

•“Formula Rate” are references to a FERC-approved formula template used to calculate an annual revenue requirement;

•“Fortis” are references to Fortis Inc.;

•“FPA” are references to the Federal Power Act;

•“GAAP” are references to accounting principles generally accepted in the United States of America;

•“GIC” are references to GIC Private Limited;

•“Initial Complaint” are references to a November 2013 complaint to the FERC under Section 206 of the FPA regarding the base ROE;

•“IP&L” are references to Interstate Power and Light Company, an Alliant Energy Corporation subsidiary;

•“ITC Investment Holdings” are references to ITC Investment Holdings Inc., a majority owned indirect subsidiary of Fortis in which GIC has an indirect, passive, non-voting minority ownership interest;

•“kW” are references to kilowatts (one kilowatt equaling 1,000 watts);

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•“LRTP” are references to long-range transmission plan, an initiative to build transmission projects across the MISO region;

•“May 2020 Order” are references to an order issued by the FERC on May 21, 2020 regarding MISO ROE Complaints;

•“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;

•“MISO ROE Complaints” are references to the Initial Complaint and the Second Complaint;

•“NERC” are references to the North American Electric Reliability Corporation;

•“NOPR” are references to a Notice of Proposed Rulemaking issued by the FERC;

•“PBU” are references to a performance-based unit;

•“Revolving Credit Agreement” are references to the unsecured, unguaranteed revolving credit agreement entered into by ITC Holdings, ITCTransmission, METC, ITC Midwest and ITC Great Plains dated as of April 14, 2023, which replaced and refinanced in full the previous revolving credit agreements of these companies;

•“ROE” are references to return on equity;

•“ROFR” are references to right of first refusal;

•“RTO” are references to Regional Transmission Organizations;

•“SBU” are references to a service-based unit;

•“SEC” are references to the Securities and Exchange Commission;

•“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;

•“SOFR” are references to the Secured Overnight Financing Rate;

•“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;

•“TO” are references to transmission owner; and

•“USD” are references to the United States dollar.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ITC HOLDINGS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


	September 30,		December 31,
(In millions of USD, except share data)	2024		2023
ASSETS
Current assets
Cash and cash equivalents	$	130	$	328
Accounts receivable	168		137
Inventory	73		63
Regulatory assets	23		30

Prepaid and other current assets	24		21
Total current assets	418		579
Property, plant and equipment (net of accumulated depreciation and amortization of $2,687 and $2,579, respectively)	11,862		11,274
Other assets
Goodwill	950		950

Regulatory assets	179		175

Other assets	140		146
Total other assets	1,269		1,271
TOTAL ASSETS	$	13,549	$	13,124
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Accounts payable	$	122	$	117
Accrued compensation	47		59
Accrued interest	85		81
Accrued taxes	38		75
Regulatory liabilities	40		41
Refundable deposits and advances for construction	44		31
Debt maturing within one year	75		475
Other current liabilities	15		18
Total current liabilities	466		897
Accrued pension and postretirement liabilities	40		42
Deferred income taxes	1,503		1,411
Regulatory liabilities	771		721
Refundable deposits	15		33
Long-term debt	7,733		7,123
Other liabilities	47		43
Commitments and contingent liabilities (Notes 5 and 12)
TOTAL LIABILITIES	10,575		10,270
STOCKHOLDER’S EQUITY
Common stock, without par value, 235,000,000 shares authorized, 224,203,112 shares issued and outstanding at September 30, 2024 and December 31, 2023	892		892
Retained earnings	2,056		1,933
Accumulated other comprehensive income	26		29
Total stockholder’s equity	2,974		2,854
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	13,549	$	13,124

See notes to condensed consolidated interim financial statements (unaudited).

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ITC HOLDINGS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
OPERATING REVENUES
Transmission and other services	$	488	$	464	$	1,278	$	1,203
Formula Rate true-up	(80)		(76)		(57)		(45)
Total operating revenues	408		388		1,221		1,158
OPERATING EXPENSES
Operation and maintenance	30		30		84		87
General and administrative	30		26		89		86
Depreciation and amortization	80		77		242		228
Taxes other than income taxes	35		34		116		109
Other operating expenses (income), net	—		—		(1)		(1)
Total operating expenses	175		167		530		509
OPERATING INCOME	233		221		691		649
OTHER EXPENSES (INCOME)
Interest expense, net	88		82		257		234
Allowance for equity funds used during construction	(12)		(10)		(34)		(32)
Other expenses (income), net	(6)		(5)		(19)		(10)
Total other expenses (income)	70		67		204		192
INCOME BEFORE INCOME TAXES	163		154		487		457
INCOME TAX PROVISION	39		44		114		117
NET INCOME	124		110		373		340
OTHER COMPREHENSIVE (LOSS) INCOME
Derivative instruments, net of tax	—		—		(3)		2
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX	—		—		(3)		2
TOTAL COMPREHENSIVE INCOME	$	124	$	110	$	370	$	342

See notes to condensed consolidated interim financial statements (unaudited).

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ITC HOLDINGS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY (UNAUDITED)


					Accumulated
					Other		Total
			Retained		Comprehensive		Stockholder’s
(In millions of USD)	Common Stock		Earnings		Income		Equity
BALANCE, DECEMBER 31, 2022	$	892	$	1,753	$	27	$	2,672
Net income	—		112		—		112
Dividends to ITC Investment Holdings	—		(70)		—		(70)

BALANCE, MARCH 31, 2023	892		1,795		27		2,714
Net income	—		118		—		118
Dividends to ITC Investment Holdings	—		(70)		—		(70)
Other comprehensive income, net of tax	—		—		2		2
BALANCE, JUNE 30, 2023	892		1,843		29		2,764
Net income	—		110		—		110
Dividends to ITC Investment Holdings	—		(71)		—		(71)

BALANCE, SEPTEMBER 30, 2023	$	892	$	1,882	$	29	$	2,803

BALANCE, DECEMBER 31, 2023	$	892	$	1,933	$	29	$	2,854

Net income	—		123		—		123
Dividends to ITC Investment Holdings	—		(86)		—		(86)

Other comprehensive loss, net of tax	—		—		(1)		(1)
BALANCE, MARCH 31, 2024	892		1,970		28		2,890
Net income	—		126		—		126
Dividends to ITC Investment Holdings	—		(76)		—		(76)
Other comprehensive loss, net of tax	—		—		(2)		(2)
BALANCE, JUNE 30, 2024	892		2,020		26		2,938
Net income	—		124		—		124
Dividends to ITC Investment Holdings	—		(88)		—		(88)

BALANCE, SEPTEMBER 30, 2024	$	892	$	2,056	$	26	$	2,974

See notes to condensed consolidated interim financial statements (unaudited).

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ITC HOLDINGS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Nine Months Ended
	September 30,
(In millions of USD)	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	373	$	340
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	242		228
Recognition, refund and collection of revenue accruals and deferrals — including accrued interest	51		39
Deferred income tax expense	72		84
Allowance for equity funds used during construction	(34)		(32)
Share-based compensation	12		11
Other	(14)		13
Changes in assets and liabilities, exclusive of changes shown separately:
Accounts receivable	(30)		(34)




Accounts payable	5		(2)
Accrued compensation	(13)		(10)
Accrued interest	4		25
Accrued taxes	(37)		(34)

Other current and non-current assets and liabilities, net	(14)		(33)
Net cash provided by operating activities	617		595
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(751)		(622)

Other	(9)		(13)
Net cash used in investing activities	(760)		(635)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt, net	634		799
Borrowings under revolving credit agreements	841		894

Net repayment of commercial paper	—		(134)
Repayment of long-term debt	(450)		(250)
Repayments of revolving credit agreements	(814)		(745)

Dividends to ITC Investment Holdings	(250)		(211)
Refundable deposits from generators for transmission network upgrades	6		47
Repayment of refundable deposits from generators for transmission network upgrades	(17)		(21)

Other	(4)		(9)
Net cash (used in) provided by financing activities	(54)		370
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(197)		330
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period	333		6
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period	$	136	$	336

See notes to condensed consolidated interim financial statements (unaudited).

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NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

ITC Holdings and its subsidiaries are engaged in the transmission of electricity in the United States. ITC Holdings is a wholly-owned subsidiary of ITC Investment Holdings. Fortis owns a majority indirect equity interest in ITC Investment Holdings, with GIC holding an indirect, passive, non-voting equity interest of 19.9%. Through our Regulated Operating Subsidiaries, we own, operate, maintain and invest in high-voltage transmission systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas, Oklahoma and Wisconsin that transmit electricity from generating stations to local distribution facilities connected to our transmission systems.

Basis of Presentation

These condensed consolidated interim financial statements should be read in conjunction with the notes to the consolidated financial statements as of and for the year ended December 31, 2023 included in ITC Holdings’ annual report on Form 10-K for such period.

The accompanying condensed consolidated interim financial statements have been prepared using GAAP and with the instructions to Form 10-Q and Rule 10-01 of SEC Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These accounting principles require us to use estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from our estimates.

The condensed consolidated interim financial statements are unaudited but, in our opinion, include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim period. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Pronouncements

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued authoritative guidance to improve reportable segment disclosure requirements, thereby enabling investors to better understand an entity’s performance and assess potential future cash flows. The new guidance requires that public entities disclose, on an annual and interim basis, additional information related to significant segment expenses regularly provided to the chief operating decision maker and other segment items. The guidance also contains several other provisions, notably requiring disclosure in interim periods of all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 of the FASB’s Accounting Standards Codification. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the new guidance, but do not anticipate significant changes to our disclosures.

Enhancements to Income Tax Disclosures

In December 2023, the FASB issued authoritative guidance modifying the disclosure requirements for income tax. This update is intended to provide investors information to better assess how an entity’s operations and related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Notable changes in the new guidance include disaggregation of income tax information by jurisdiction and changes to the presentation of information for the reconciliation of effective tax rates. The guidance is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the new guidance, but do not anticipate significant changes to our disclosures.

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3. REVENUE

Transmission Services

Through our Regulated Operating Subsidiaries, we generate nearly all our revenue from providing electric transmission services over our transmission systems. As independent transmission companies, our transmission services are provided and revenues are received based on our tariffs, as approved by the FERC. We recognize revenue for transmission services over time as transmission services are provided to customers (generally using an output measure of progress based on transmission load delivered). Customers simultaneously receive and consume the benefits provided by the Regulated Operating Subsidiaries’ services. We recognize revenue in the amount to which we have the right to invoice because we have a right to consideration in an amount that corresponds directly with the value to the customer of performance completed to date. As billing agents, MISO and SPP independently bill our customers on a monthly basis and collect fees for the use of our transmission systems. No component of the transaction price is allocated to unsatisfied performance obligations.

Transmission service revenue includes an estimate for unbilled revenues from service that has been provided but not billed by the end of an accounting period. Unbilled revenues are dependent upon a number of factors that require management’s judgment including estimates of transmission network load (for the MISO Regulated Operating Subsidiaries) and preliminary information provided by billing agents. Due to the seasonal fluctuations of actual load, the unbilled revenue amount generally increases during the spring and summer and decreases during the fall and winter. See Note 4 for information on changes in unbilled accounts receivable.

Formula Rate True-Up

The true-up mechanism under our Formula Rates is considered an alternative revenue program of a rate-regulated utility given it permits our Regulated Operating Subsidiaries to adjust future rates in response to past activities or completed events in order to collect our actual revenue requirements under our Formula Rates. In accordance with our accounting policy, only the current year origination of the true-up is reported as a Formula Rate true-up. See Note 5 for more information on our Formula Rates.

Other Services

Other services revenue consists of ancillary services relating to customer-owned plant, easement and rental revenues. A portion of other services revenue is treated as a revenue credit and taken as a reduction to gross revenue requirement when calculating net revenue requirement under our Formula Rates. Total other services revenue included in transmission and other services in the condensed consolidated statements of comprehensive income for the three months ended September 30, 2024 and 2023 was $1 million and $2 million, respectively. Total other services revenue for the nine months ended September 30, 2024 and 2023 was $3 million and $5 million, respectively.

4. ACCOUNTS RECEIVABLE

The following table presents the components of accounts receivable on the condensed consolidated statements of financial position:


	September 30,		December 31,
(In millions of USD)	2024		2023
Trade accounts receivable	$	3	$	2
Unbilled accounts receivable	150		122

Other	15		13
Total accounts receivable	$	168	$	137

5. REGULATORY MATTERS

Cost-Based Formula Rates with True-Up Mechanism

Our Regulated Operating Subsidiaries recover expenses and earn an authorized return on and recover investments in property, plant and equipment using cost-based Formula Rates. Each of our Regulated Operating Subsidiaries separately calculates a transmission revenue requirement under their cost-based formula based on financial information specific to each company. The calculation of projected revenue

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requirement for a future period, generally a calendar year, is used to establish the transmission rate used for billing purposes. The transmission revenue requirements at our Regulated Operating Subsidiaries are set annually and remain in effect for a one-year period. By updating the inputs to the formula and resulting rates on an annual basis, the revenues at our Regulated Operating Subsidiaries reflect changing operational data and financial performance, including the amount of network load on their transmission systems (for our MISO Regulated Operating Subsidiaries), operating expenses and additions to property, plant and equipment when placed in service, among other items.

The formula used to derive the rates does not require further action or FERC filings each year, although the formula inputs remain subject to legal challenge at the FERC. Our Regulated Operating Subsidiaries will continue to use the formula to calculate their respective annual revenue requirements unless the FERC determines the resulting rates to be unjust and unreasonable and another mechanism is determined by the FERC to be just and reasonable. See Note 12 for detail on the MISO ROE Complaints.

The cost-based Formula Rates at our Regulated Operating Subsidiaries include a true-up mechanism that compares the actual revenue requirements of our Regulated Operating Subsidiaries to their billed revenues for each year to determine any over- or under-collection of revenue requirements. Revenue is recognized for services provided during each reporting period based on actual revenue requirements calculated using the formula. Our Regulated Operating Subsidiaries accrue or defer revenues to the extent that the actual revenue requirement for the reporting period is higher or lower, respectively, than the amounts billed relating to that reporting period. The amount of accrued or deferred revenues is reflected in future revenue requirements and thus flows through to customer bills within two years under the provisions of our Formula Rates. This annual true-up ensures that our Regulated Operating Subsidiaries recover their allowed costs and earn their authorized returns while also ensuring that our customers pay the actual revenue requirement.

The net changes in regulatory assets and liabilities associated with our Regulated Operating Subsidiaries’ Formula Rate revenue accruals and deferrals, including accrued interest, were as follows during the nine months ended September 30, 2024:


(In millions of USD)	Total
Net regulatory liabilities as of December 31, 2023	$	(28)
Net refund of 2022 revenue deferrals and accruals, including accrued interest	9
Net revenue deferral, including accrued interest	(57)
Net accrued interest payable	(3)
Net regulatory liabilities as of September 30, 2024	$	(79)

Regulatory assets and liabilities associated with our Regulated Operating Subsidiaries’ Formula Rate revenue accruals and deferrals, including accrued interest, are recorded on the condensed consolidated statements of financial position as follows:


	September 30,		December 31,
(In millions of USD)	2024		2023
Current regulatory assets	$	23	$	30
Non-current regulatory assets	15		20
Current regulatory liabilities	(40)		(41)
Non-current regulatory liabilities	(77)		(37)
Net regulatory liabilities	$	(79)	$	(28)

ROE and Incentive Adders for Transmission Rates

The FERC has authorized the use of ROE incentives, or adders, that can be applied to the rates of TOs when certain conditions are met. Our MISO Regulated Operating Subsidiaries and ITC Great Plains utilize ROE adders related to independent transmission ownership and RTO participation. The FERC issued a NOPR on March 20, 2020, and a supplemental NOPR on April 15, 2021, proposing to update its transmission incentives policy to remove incentives for independent transmission ownership and RTO participation and to grant incentives for certain transmission projects. As of September 30, 2024, no final determination had been made on these NOPRs and we cannot predict whether this will have a material impact on us.

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MISO Regulated Operating Subsidiaries

For the three and nine months ended September 30, 2024 and 2023, the authorized ROE used by the MISO Regulated Operating Subsidiaries was 10.77% and is composed of a base ROE of 10.02% with a 25 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation. See Note 12 for a discussion of the MISO ROE Complaints.

ITC Great Plains

For the three and nine months ended September 30, 2024 and 2023, the authorized ROE used by ITC Great Plains was 11.41% and is composed of a base ROE of 10.66% with a 25 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation.

6. DEBT

ITC Holdings

Senior Unsecured Notes

On May 9, 2024, ITC Holdings completed a debt issuance of $400 million aggregate principal amount of unsecured 5.65% Senior Notes, due May 9, 2034. The 5.65% Senior Notes are redeemable prior to February 9, 2034, in whole or in part and at the option of ITC Holdings, by paying an applicable make whole premium. The net proceeds from this offering, after discount and costs related to the issuance, were used to partially fund the repayment of the $400 million aggregate principal amount of ITC Holdings 3.65% Senior Notes due June 15, 2024 and for general corporate purposes. The Senior Notes were issued under ITC Holdings’ indenture, dated April 18, 2013, between ITC Holdings and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee, as supplemented from time to time, including by the Eighth Supplemental Indenture, dated as of May 9, 2024.

Commercial Paper Program

ITC Holdings has an ongoing commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate amount not to exceed $400 million outstanding at any one time. At September 30, 2024 and December 31, 2023, ITC Holdings did not have any commercial paper issued and outstanding under the program. The Company’s Revolving Credit Agreement may be used to repay commercial paper issued pursuant to the commercial paper program.

ITCTransmission

First Mortgage Bonds

On January 23, 2024, ITCTransmission issued an aggregate principal amount of $75 million of 5.11% First Mortgage Bonds, Series K, due January 23, 2029 and an aggregate principal amount of $75 million of 5.38% First Mortgage Bonds, Series L, due January 23, 2034. The proceeds were used to repay existing indebtedness under the Revolving Credit Agreement, to partially fund capital expenditures and for general corporate purposes. All of ITCTransmission’s First Mortgage Bonds are issued under its First Mortgage and Deed of Trust and secured by a first mortgage lien on substantially all of its real property and tangible personal property.

METC

Senior Secured Notes

On November 1, 2023, METC completed a private offering of Senior Secured Notes totaling an aggregate principal amount of $175 million. The offering consisted of an issuance of $90 million on November 1, 2023 of 5.65% Series A Senior Secured Notes due November 1, 2028 and an issuance of $85 million on January 16, 2024 of 5.98% Series B Senior Secured Notes due January 16, 2034. The proceeds from the Senior Secured Notes were used to repay indebtedness under the Revolving Credit Agreement, to partially fund capital expenditures and for general corporate purposes. All of METC’s Senior Secured Notes are issued under its first mortgage indenture and secured by a first mortgage lien on substantially all of its real property and tangible personal property.

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ITC Great Plains

First Mortgage Bonds

On June 24, 2024, ITC Great Plains completed a partial redemption of $50 million of the $150 million aggregate principal amount of 4.16% First Mortgage Bonds, Series A, due November 26, 2044. There was no make-whole premium payment associated with the redemption.

Revolving Credit Agreement

At September 30, 2024, ITC Holdings and certain of its Regulated Operating Subsidiaries had the following unguaranteed, unsecured revolving credit facility available and outstanding:


(In millions of USD)	Total Available Capacity (a)		Outstanding Balance (b)		Unused Capacity		Weighted Average Interest Rate on Outstanding Balance (c)		Commitment Fee Rate (d)
ITC Holdings	$	350	$	—	$	350	—	%	0.175	%
ITCTransmission	175		43		132		5.89	%	0.100	%
METC	175		29		146		5.89	%	0.100	%
ITC Midwest	225		200		25		5.89	%	0.100	%
ITC Great Plains	75		66		9		5.89	%	0.100	%
Total	$	1,000	$	338	$	662

____________________________

(a)Represents the current borrowing sublimit. Individual sublimits may be adjusted, subject to certain maximum individual sublimits and the aggregate limit under the Revolving Credit Agreement. In June 2024, we adjusted our current borrowing sublimits, which resulted in an increase to ITC Great Plains of $50 million and a decrease to ITC Holdings of $50 million.

(b)Included within long-term debt on the condensed consolidated statements of financial position.

(c)Interest charged on borrowings depends on the variable rate structure we elect at the time of each borrowing.

(d)Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating.

Derivative Instruments and Hedging Activities

We use derivative financial instruments to manage our exposure to fluctuations in interest rates. ITC Holdings entered into the following derivative instruments that qualified for cash flow hedge accounting treatment. The contracts are used to manage interest rate risk associated with forecasted debt issuances at ITC Holdings.


(In millions of USD)	Notional Amount		Weighted Average Fixed Rate		Loss on Derivatives (a)		Term (In years)	Effective Date
Outstanding derivative instruments
Interest rate swaps	$	105	3.17	%	$	—	5	Q2 2026
Settled derivative instruments
U.S. Treasury rate lock contracts (b)	300		4.66	%	3		5	Q2 2024

____________________________

(a)This amount, recorded net of tax in AOCI, is amortized as a component of interest expense over the term of the derivative instrument as the forecasted transactions affect earnings. See Note 9 for additional information.

(b)The settlement payment was recognized within cash flows from operating activities in the condensed consolidated statements of cash flows.

7. RETIREMENT BENEFITS AND ASSETS HELD IN TRUST

Pension Plan Benefits

We have a qualified defined benefit pension plan (the “retirement plan”) for eligible employees, comprised of a traditional final average pay plan and a cash balance plan. The traditional final average pay plan is

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noncontributory, covers select employees, and provides retirement benefits based on years of benefit service, average final compensation and age at retirement. The cash balance plan is also noncontributory, covers substantially all employees and provides retirement benefits based on eligible compensation and interest credits. Our funding practice for the retirement plan is generally to fund the annual net pension cost, though we may adjust our funding as necessary based on consideration of federal funding requirements, the funded status of the plan, and other considerations as we deem appropriate.

We also have two supplemental nonqualified, noncontributory, defined benefit pension plans for selected management employees (the “supplemental benefit plans” and, collectively with the retirement plan, the “pension plans”). The supplemental benefit plans provide for benefits that supplement those provided by the retirement plan.

Net periodic benefit cost for the pension plans, by component, was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Service cost	$	2	$	1	$	6	$	5
Interest cost	1		2		5		5
Expected return on plan assets	(2)		(2)		(6)		(5)


Net pension cost	$	1	$	1	$	5	$	5

The components of net pension cost, other than the service cost component, are included in other expenses (income), net in the condensed consolidated statements of comprehensive income.

Other Postretirement Benefits

We provide certain postretirement health care, dental and life insurance benefits for eligible employees (the “postretirement benefit plan”).

Net postretirement benefit plan (credit) cost, by component, was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Service cost	$	1	$	1	$	5	$	5
Interest cost	1		2		4		4
Expected return on plan assets	(2)		(2)		(6)		(5)
Amortization of unrecognized gain	(1)		(1)		(4)		(3)
Net postretirement (credit) cost	$	(1)	$	—	$	(1)	$	1

The components of net postretirement (credit) cost, other than the service cost component, are included in other expenses (income), net in the condensed consolidated statements of comprehensive income.

Defined Contribution Plan

We also sponsor a defined contribution retirement savings plan. Participation in this plan is available to substantially all employees. We match employee contributions up to certain predefined limits based upon eligible compensation and the employee’s contribution rate. The cost of this plan was $1 million and $2 million for the three months ended September 30, 2024 and 2023, respectively, and $6 million for each of the nine months ended September 30, 2024 and 2023.

8. FAIR VALUE MEASUREMENTS

The measurement of fair value is based on a three-tier hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In

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such instances, the transfer is reported at the beginning of the reporting period. For the nine months ended September 30, 2024 and the year ended December 31, 2023, there were no transfers between levels.

Our assets measured at fair value subject to the three-tier hierarchy at September 30, 2024, were as follows:


	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions of USD)	(Level 1)		(Level 2)		(Level 3)
Financial assets measured on a recurring basis:
Cash and cash equivalents	$	1	$	—	$	—
Mutual funds — fixed income securities	43		—		—
Mutual funds — equity securities	15		—		—



Total	$	59	$	—	$	—

Our assets measured at fair value subject to the three-tier hierarchy at December 31, 2023, were as follows:


	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions of USD)	(Level 1)		(Level 2)		(Level 3)
Financial assets measured on a recurring basis:

Mutual funds — fixed income securities	$	44	$	—	$	—
Mutual funds — equity securities	14		—		—



Total	$	58	$	—	$	—

As of September 30, 2024 and December 31, 2023, we held certain assets that are required to be measured at fair value on a recurring basis. The assets consist of investments recorded within cash and cash equivalents and other long-term assets, including investments held in a trust associated with our supplemental benefit plans described in Note 7 and certain deferred compensation plan investments. The mutual funds we own are publicly traded and are recorded at fair value based on observable trades for identical securities in an active market. Changes in the observed trading prices and liquidity of money market funds are monitored as additional support for determining fair value. Gains and losses for all mutual fund investments are recorded in other expenses (income), net in the condensed consolidated statements of comprehensive income.

As of September 30, 2024, the fair value of both assets and liabilities related to the gains and losses on the interest rate swap derivatives, discussed in Note 6, were less than $1 million. The fair value of these derivatives is determined based on a discounted cash flow method using SOFR swap rates, which are observable at commonly quoted intervals.

We also held non-financial assets that are required to be measured at fair value on a non-recurring basis. These consist of goodwill and intangible assets. We did not record any impairment charges on long-lived assets and no other significant events occurred requiring non-financial assets and liabilities to be measured at fair value (subsequent to initial recognition) during the three and nine months ended September 30, 2024 and 2023.

Fair Value of Financial Assets and Liabilities

Fixed Rate Debt

Based on the borrowing rates obtained from third party lending institutions currently available for bank loans with similar terms and average maturities from active markets, the fair value of our consolidated long-term debt and debt maturing within one year, excluding borrowings on the Revolving Credit Agreement, was $7,061 million and $6,660 million at September 30, 2024 and December 31, 2023, respectively. These fair values represent Level 2 under the three-tier hierarchy described above. The total book value of our consolidated long-term debt and debt maturing within one year, net of discount and deferred financing fees and excluding borrowings on the Revolving Credit Agreement, was $7,470 million and $7,287 million at September 30, 2024 and December 31, 2023, respectively.

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Revolving Credit Agreement

At September 30, 2024 and December 31, 2023, we had a consolidated total of $338 million and $311 million, respectively, outstanding under our Revolving Credit Agreement, which is a variable rate loan. The fair value of the loan approximates book value based on the borrowing rates currently available for a variable rate loan obtained from third party lending institutions. The fair value represents Level 2 under the three-tier hierarchy described above.

Other Financial Instruments

The carrying value of other financial instruments included in current assets, including cash and cash equivalents, approximates their fair value due to the short-term nature of these instruments.

9. STOCKHOLDER'S EQUITY

Accumulated Other Comprehensive Income

The following table provides the components of changes in AOCI:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Balance at the beginning of period	$	26	$	29	$	29	$	27
Derivative instruments
Reclassification of net gain relating to interest rate cash flow hedges from AOCI to earnings (net of tax of $—, $—, $(1) and $—, respectively) (a)	—		—		(1)		(1)

(Loss) gain on interest rate swaps relating to interest rate cash flow hedges (net of tax of $—, $—, $(1) and $1, respectively)	—		—		(2)		3
Total other comprehensive (loss) income, net of tax	—		—		(3)		2
Balance at the end of period	$	26	$	29	$	26	$	29

____________________________

(a)The reclassification of the net gain relating to interest rate cash flow hedges is reported in interest expense, net in the condensed consolidated statements of comprehensive income on a pre-tax basis.

The amount of net gain relating to interest rate cash flow hedges to be reclassified from AOCI to earnings for the 12-month period ending September 30, 2025 is expected to be approximately $3 million (net of tax of $1 million).

10. SHARE-BASED COMPENSATION

In 2024, 316,690 PBUs and 267,700 SBUs were granted pursuant to our long-term incentive plans. Beginning in 2024, each PBU and SBU granted is valued based on one share of Fortis common stock traded on the New York Stock Exchange. All PBUs and SBUs are classified as liability awards and generally vest on the third January 1st following the grant date, provided the service and performance criteria, as applicable, are satisfied, and will generally be settled during the same quarter. However, certain awards may vest over a different period or on the grant date based on retirement eligibility criteria or other award terms.

The aggregate fair value of all outstanding PBUs and SBUs as of September 30, 2024 was $36 million and $33 million, respectively. At September 30, 2024, the unrecognized compensation cost related to the PBUs and SBUs was $12 million and $13 million, respectively.

11. RELATED PARTY TRANSACTIONS

ITC Holdings may incur charges from Fortis and other affiliates of Fortis that are not subsidiaries of ITC Holdings (“Fortis and Fortis affiliates”) for general corporate expenses incurred. In addition, ITC Holdings may perform additional services for, or receive additional services from, Fortis and such subsidiaries. These transactions are in the normal course of business and payments for these services are settled through accounts receivable and accounts payable, as necessary.

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Periodically, we pay dividends to ITC Investment Holdings as shown in the condensed consolidated statements of cash flows. In October 2024, we paid dividends of $93 million.

We are organized as a corporation for tax purposes and subject to a tax sharing agreement as a wholly-owned subsidiary of ITC Investment Holdings. Additionally, we record income taxes based on our separate company tax position and make or receive tax-related payments with ITC Investment Holdings. See Note 13 for information on income tax payments made to ITC Investment Holdings.


	September 30,		December 31,
(In millions of USD)	2024		2023
Statements of financial position activity:
Accounts receivable from Fortis and Fortis affiliates	$	—	$	1

Net income tax receivable from ITC Investment Holdings (a)	2		—
Net income tax payable to ITC Investment Holdings (b)	—		6

____________________________

(a)Recorded in prepaid and other current assets on the condensed consolidated statements of financial position.

(b)Recorded in accrued taxes on the condensed consolidated statements of financial position.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Comprehensive income statements activity:
Billed from Fortis and Fortis affiliates (a)	$	2	$	2	$	10	$	9
Billed to Fortis and Fortis affiliates (b)	—		1		3		2

____________________________

(a)Recorded in general and administrative expenses in the condensed consolidated statements of comprehensive income.

(b)Recorded as an offset to general and administrative expenses for ITC Holdings.

12. COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

We are subject to federal, state and local environmental laws and regulations, which impose limitations on the discharge of pollutants into the environment, require reporting of emissions from certain equipment, establish standards for the management, treatment, storage, transportation and disposal of hazardous materials and of solid and hazardous wastes, and impose obligations to investigate and remediate contamination in certain circumstances. Liabilities relating to investigation and remediation of contamination, as well as other liabilities concerning hazardous materials or contamination, such as claims for personal injury or property damage, may arise at many locations, including formerly owned or operated properties and sites where wastes have been treated or disposed of, as well as properties currently owned or operated by us. Such liabilities may arise even where the contamination does not result from noncompliance with applicable environmental laws. Under some environmental laws, such liabilities may also be joint and several, meaning that a party can be held responsible for more than its share of the liability involved, or even the entire share. Although environmental requirements generally have become more stringent and compliance with those requirements more expensive, we are not aware of any specific developments that would increase our costs for such compliance in a manner that would be expected to have a material adverse effect on our financial condition, results of operations or liquidity.

Our assets and operations also involve the use of materials classified as hazardous, toxic or otherwise dangerous. Some of the properties that we own or operate have been used for many years and include older facilities and equipment that may be more likely than newer ones to contain or be made from such materials. Some of these properties include above ground or underground storage tanks and associated piping. Some of them also include large electrical equipment filled with mineral oil, which may contain or previously have contained polychlorinated biphenyls. Some of our facilities and electrical equipment may also contain asbestos containing materials. Our facilities and equipment are often situated close to or on property owned by others so

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that, if they are the source of contamination, the property of others may be affected. For example, above ground and underground transmission lines sometimes traverse properties that we do not own and transmission assets that we own or operate are sometimes commingled at our transmission stations with distribution assets owned or operated by our transmission customers.

Some properties in which we have an ownership interest or at which we operate are, or are suspected of being, affected by environmental contamination. We are not aware of any pending or threatened claims against us with respect to environmental contamination relating to these properties, or of any investigation or remediation of contamination at these properties, that entail costs likely to materially affect us. Some facilities and properties are located near environmentally sensitive areas, including wetlands and habitat for threatened and endangered species.

Litigation

We are involved in certain legal proceedings before various courts, governmental agencies and mediation panels concerning matters arising in the ordinary course of business. These may include proceedings such as contract disputes, eminent domain and vegetation management activities, regulatory matters and pending judicial matters. We cannot predict the final disposition of such proceedings. We regularly review legal matters and record provisions for claims that are considered probable of loss.

Rate of Return on Equity Complaints

Two complaints were filed with the FERC by combinations of consumer advocates, consumer groups, municipal parties and other parties challenging the base ROE in MISO. The complaints were filed under Section 206 of the FPA requesting that the FERC find the MISO regional base ROE rate (the “base ROE”) for all MISO TOs, including our MISO Regulated Operating Subsidiaries, to no longer be just and reasonable.

Initial Complaint

On November 12, 2013, the Association of Businesses Advocating Tariff Equity, Coalition of MISO Transmission Customers, Illinois Industrial Energy Consumers, Indiana Industrial Energy Consumers, Inc., Minnesota Large Industrial Group and Wisconsin Industrial Energy Group (collectively, the “complainants”) filed the Initial Complaint with the FERC. The complainants sought a FERC order to reduce the base ROE used in the formula transmission rates for our MISO Regulated Operating Subsidiaries to 9.15%, reducing the equity component of our capital structure and terminating the ROE adders approved for certain MISO Regulated Operating Subsidiaries. The FERC set the base ROE for hearing and settlement procedures, while denying all other aspects of the Initial Complaint. The ROE collected through the MISO Regulated Operating Subsidiaries’ rates during the period November 12, 2013 through September 27, 2016 consisted of a base ROE of 12.38% plus applicable incentive adders.

Second Complaint

On February 12, 2015, the Second Complaint was filed with the FERC by Arkansas Electric Cooperative Corporation, Mississippi Delta Energy Agency, Clarksdale Public Utilities Commission, Public Service Commission of Yazoo City and Hoosier Energy Rural Electric Cooperative, Inc., seeking a FERC order to reduce the base ROE used in the formula transmission rates of our MISO Regulated Operating Subsidiaries to 8.67%, with an effective date of February 12, 2015.

On June 30, 2016, the presiding administrative law judge issued an initial decision that recommended a base ROE of 9.70% for the refund period from February 12, 2015 through May 11, 2016, with a maximum ROE of 10.68%, which also would be applicable going forward from the date of a final FERC order. The Second Complaint was dismissed as a result of an order issued by the FERC on November 21, 2019 and the dismissal of the complaint was reaffirmed in the May 2020 Order.

Previous FERC Orders

Since the filing of the Initial Complaint, the FERC issued three separate orders in these proceedings resulting in multiple revisions to the base ROE and refund settlements. The MISO TOs, along with our MISO Regulated Operating Subsidiaries, and various other parties have challenged certain aspects of these orders through requests for rehearing. In the May 2020 Order, the FERC determined that a methodology using three financial models should be used to determine the base ROE. By applying the new methodology, the FERC determined that the base ROE for the Initial Complaint should be 10.02% and the top of the range of

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reasonableness for that period should be 12.62%. The FERC determined that this base ROE should apply during the first refund period of November 12, 2013 to February 11, 2015 and from the date of the order issued by the FERC on September 28, 2016 prospectively. The FERC ordered refunds to be made in accordance with the May 2020 Order. Refund settlements were finalized in 2022.

August 2022 D.C. Circuit Court Decision

On August 9, 2022, in response to appeals of the FERC's orders on the MISO ROE Complaints, the D.C. Circuit Court issued an opinion that rejected the FERC’s use of a risk premium model in the methodology used to determine the revised base ROE for MISO TOs. The D.C. Circuit Court decision vacated the FERC’s orders on the MISO ROE Complaints, dismissed the remaining outstanding appeals of these orders and remanded the matter to the FERC for further proceedings.

October 2024 Order

On October 17, 2024, in response to the August 2022 D.C. Circuit Court decision, the FERC issued an order on the MISO ROE Complaints that revised the methodology used to determine base ROE put forth in the May 2020 Order. In this order, the FERC removed the use of the risk premium model from the calculation, while maintaining other modifications to the methodology as described in previous orders on the MISO ROE Complaints. By applying the revised methodology, the FERC determined that the base ROE for the Initial Complaint should be 9.98% for all MISO TOs, including our MISO Regulated Operating Subsidiaries, and the top of the range of reasonableness for that period should be 12.58%. The FERC determined that this base ROE should apply during the first refund period of November 12, 2013 to February 11, 2015 and from the date of the order issued by the FERC on September 28, 2016 prospectively. The FERC ordered refunds to be made in accordance with the order by December 1, 2025. The FERC also reaffirmed its previous finding that no refunds would be ordered on the Second Complaint. We expect to record an aggregate refund liability of approximately $26 million, including interest, in the fourth quarter of 2024 in accordance with the refund provisions of the order.

See Note 5 for a summary of our authorized ROE, which is composed of our base ROE and incentive adders for transmission rates.

13. SUPPLEMENTAL FINANCIAL INFORMATION

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated statements of financial position that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:


	September 30,				December 31,
(In millions of USD)	2024		2023		2023		2022
Cash and cash equivalents	$	130	$	331	$	328	$	4
Restricted cash included in other non-current assets	6		5		5		2
Total cash, cash equivalents and restricted cash	$	136	$	336	$	333	$	6

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Supplementary Cash Flows Information


	Nine Months Ended
	September 30,
(In millions of USD)	2024		2023

Interest paid (net of interest capitalized)	$	247	$	204
Income taxes paid (a)	50		43

Non-cash investing and financing activities:
Additions to property, plant and equipment and other long-lived assets (b)	128		94

Allowance for equity funds used during construction	34		32

Other	—		1

____________________________

(a)Includes amounts paid to ITC Investment Holdings under a tax sharing agreement. Payments made directly to certain state jurisdictions were $1 million and less than $1 million for the nine months ended September 30, 2024 and 2023, respectively.

(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 September 30, 2024 or 2023, respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment or repayments of contributions in aid of construction when paid.

14. SEGMENT INFORMATION

We identify reportable segments based on the criteria set forth by the FASB regarding disclosures about segments of an enterprise, including the regulatory environment of our subsidiaries and the business activities performed to earn revenues and incur expenses. The following tables show our financial information by reportable segment:


	Three Months Ended				Nine Months Ended
OPERATING REVENUES:	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Regulated Operating Subsidiaries	$	416	$	397	$	1,249	$	1,185

Intercompany eliminations	(8)		(9)		(28)		(27)
Total operating revenues	$	408	$	388	$	1,221	$	1,158


	Three Months Ended				Nine Months Ended
INCOME (LOSS) BEFORE INCOME TAXES:	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Regulated Operating Subsidiaries	$	207	$	194	$	613	$	578
ITC Holdings and other	(44)		(40)		(126)		(121)
Total income before income taxes	$	163	$	154	$	487	$	457


	Three Months Ended				Nine Months Ended
NET INCOME:	September 30,				September 30,
(In millions of USD)	2024		2023		2024		2023
Regulated Operating Subsidiaries	$	157	$	150	$	465	$	440
ITC Holdings and other	124		110		373		340
Intercompany eliminations	(157)		(150)		(465)		(440)
Total net income	$	124	$	110	$	373	$	340

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TOTAL ASSETS:	September 30,		December 31,
(In millions of USD)	2024		2023
Regulated Operating Subsidiaries	$	13,292	$	12,664
ITC Holdings and other	7,087		6,988
Reconciliations / intercompany eliminations (a)	(6,830)		(6,528)
Total assets	$	13,549	$	13,124

____________________________

(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 on our condensed consolidated statements of financial position.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995

Our reports, filings and other public announcements contain certain statements that describe our management’s beliefs concerning future business conditions, plans and prospects, growth opportunities, the outlook for our business and the electric transmission industry, and expectations with respect to various legal and regulatory proceedings based upon information currently available. Such statements are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Wherever possible, we have identified these forward-looking statements by words such as “will,” “may,” “anticipates,” “believes,” “intends,” “estimates,” “expects,” “forecasted,” “projects,” “likely,” “could,” “might,” “target,” “would,” and the negative of these terms, and similar phrases. These forward-looking statements are based upon assumptions our management believes are reasonable. Such forward-looking statements are based on estimates and assumptions and are subject to significant risks and uncertainties which could cause our actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements, including, among others, the following risks and uncertainties listed in “Item 1A Risk Factors” of our Form 10-K for the year ended December 31, 2023:

•Certain elements of our Regulated Operating Subsidiaries’ Formula Rates have been and can be challenged, which could result in lowered rates and/or refunds of amounts previously collected and thus may have an adverse effect on our business, financial condition, results of operations and cash flows.

•Our actual capital investment may be lower than planned, which would cause a lower than anticipated rate base and would therefore result in lower revenues, earnings and associated cash flows compared to our current expectations. In addition, we may incur expenses related to the pursuit of strategic investment opportunities, which may be higher than forecasted.

•The regulations to which we are subject may limit our ability to raise capital and/or pursue acquisitions, development opportunities or other transactions or may subject us to liabilities.

•Changes in energy laws, regulations or policies could impact our business, financial condition, results of operations and cash flows.

•Each of our MISO Regulated Operating Subsidiaries depends on its primary customer for a substantial portion of its revenues, and any material failure by those primary customers to make payments for transmission services could have a material adverse effect on our business, financial condition, results of operations and cash flows.

•A significant amount of the land on which our assets are located is subject to easements, mineral rights and other similar encumbrances. As a result, we must comply with the provisions of various easements, mineral rights and other similar encumbrances, which may adversely impact our ability to complete construction projects in a timely manner.

•We contract with third parties to provide services for certain aspects of our business. If any of these agreements are terminated, we may face a shortage of labor or replacement contractors to provide the services formerly provided by these third parties.

•Hazards associated with high-voltage electricity transmission may result in suspension of our operations, costly litigation or the imposition of civil or criminal penalties.

•A cyber-attack or incident could have a material adverse effect on our business, financial condition, results of operations and cash flows.

•We are subject to environmental regulations and to laws that can give rise to substantial liabilities from environmental contamination.

•If amounts billed for transmission service for our Regulated Operating Subsidiaries’ transmission systems are lower than expected, or our actual revenue requirements are higher than expected, the timing of actual collection of our total revenues would be delayed.

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•The physical effects of climate change, including natural disasters, severe weather and other related phenomena, and the regulatory and legislative developments related to climate change, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

•We are subject to various regulatory requirements, including reliability standards; contract filing requirements; reporting, recordkeeping and accounting requirements; and transaction approval requirements. Violations of these requirements, whether intentional or unintentional, may result in penalties that, under some circumstances, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

•Changes in tax laws or regulations may negatively affect our financial condition, results of operations, net income, cash flows and credit metrics.

•The widespread outbreak of an illness or other communicable disease, or any other public health crisis, could have a material adverse impact on our business, financial condition, results of operations, cash flows and credit metrics.

•Acts of war, terrorist attacks and other catastrophic events may have a material adverse effect on our business, financial condition, results of operations and cash flows.

•Advances in technology may negatively impact our business, financial condition, results of operations and cash flows.

•ITC Holdings is a holding company with no operations, and unless we receive dividends or other payments from our subsidiaries, we may be unable to fulfill our cash obligations.

•We have a considerable amount of debt and our reliance on debt financing may limit our ability to fulfill our debt obligations and/or to obtain additional financing.

•Adverse changes in our credit ratings may negatively affect us.

•Certain provisions in our debt instruments limit our financial and operating flexibility.

Forward-looking statements speak only as of the date made and can be affected by assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in our discussion in this report will be important in determining future results. Consequently, we cannot assure you that our expectations or forecasts expressed in such forward-looking statements will be achieved. Except as required by law, we undertake no obligation to publicly update any of our forward-looking or other statements, whether as a result of new information, future events or otherwise.

Overview

ITC Holdings provides safe and reliable electric transmission service to connect consumers to more sustainable and cost-effective energy resources. ITC Holdings continues to make investments in a modernized grid to maintain reliability and accommodate future demands as lifestyles and the economy become increasingly dependent on electricity.

Our business consists primarily of the electric transmission operations of our Regulated Operating Subsidiaries. Through our Regulated Operating Subsidiaries, we own, operate, maintain and invest in high-voltage transmission systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas, Oklahoma and Wisconsin that transmit electricity from generating stations to local distribution facilities connected to our transmission systems.

Our Regulated Operating Subsidiaries’ primary operating responsibilities include maintaining, improving and expanding their transmission systems to meet their customers’ ongoing needs, scheduling outages on system elements to allow for maintenance and construction, maintaining appropriate system voltages and monitoring flows over transmission lines and other facilities to ensure physical limits are not exceeded.

Our Regulated Operating Subsidiaries earn revenues for the use of their electric transmission systems by their customers, which include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. As independent transmission companies, our Regulated Operating Subsidiaries are subject to rate regulation only by the FERC, and our cost-based rates are discussed in Note 5 to the condensed consolidated interim financial statements.

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Significant matters that influenced our financial condition, results of operations and cash flows for the nine months ended September 30, 2024 or that may affect future results include:

•Our capital expenditures of $751 million at our Regulated Operating Subsidiaries during the nine months ended September 30, 2024, as described below under “ — Capital Investment and Operating Results Trends;”

•Debt activity, including derivatives, as described in Note 6 to the condensed consolidated interim financial statements;

•Rulings from the Iowa Supreme Court and Iowa District Court for Polk County on ROFR proceedings, as described below under “ — Recent Developments;”

•The August 2022 D.C. Circuit Court decision and the order issued by the FERC in October 2024 related to the MISO ROE Complaints, as described in Note 12 to the condensed consolidated interim financial statements; and

•NOPR issued by the FERC proposing changes to transmission incentives policy, as described in Note 5 to the condensed consolidated interim financial statements.

Recent Developments

Rate of Return on Equity Complaints

In 2013 and 2015, complaints were filed with the FERC by combinations of consumer advocates, consumer groups, municipal parties and other parties challenging the base ROE for MISO TOs. In response to these complaints, the FERC has issued multiple orders to address issues raised in the complaints and subsequent proceedings. See Note 12 to the condensed consolidated interim financial statements for a summary of the MISO ROE Complaints and related proceedings.

On October 17, 2024, in response to an August 2022 D.C. Circuit Court decision to remand the matter to the FERC for further proceedings, the FERC issued an order on the MISO ROE Complaints that revised the methodology used to determine base ROE put forth in the May 2020 Order. In this order, the FERC removed the use of the risk premium model from the calculation, while maintaining other modifications to the methodology as described in previous orders on the MISO ROE Complaints. By applying the revised methodology, the FERC determined that the base ROE for the Initial Complaint should be 9.98% for all MISO TOs, including our MISO Regulated Operating Subsidiaries, and the top of the range of reasonableness for that period should be 12.58%. The FERC determined that this base ROE should apply during the first refund period of November 12, 2013 to February 11, 2015 and from the date of the order issued by the FERC on September 28, 2016 prospectively. The FERC ordered refunds to be made in accordance with the order by December 1, 2025. The FERC also reaffirmed its previous finding that no refunds would be ordered on the Second Complaint. We expect to record an aggregate refund liability of approximately $26 million, including interest, in the fourth quarter of 2024 in accordance with the refund provisions of the order.

FERC Order No. 1920

On May 13, 2024, the FERC issued a final rule (“Order 1920”) to reform electric transmission planning and cost allocation requirements for transmission providers and introduce federally mandated planning rules for all regions (including MISO and SPP) to undertake long-term regional transmission planning efforts on a regular basis. The final rule specifies various requirements for the long-term planning process, including the consideration of a broad set of benefits for new projects identified through the process and the filing of one or more cost allocation methodologies for facilities identified through long-term regional transmission planning. In addition, the final rule addresses a number of other aspects of the electric transmission planning process, which include:

•Reinstating a ROFR at the federal level for in-kind replacement of existing transmission facilities to increase their transfer capability, known as “right-sizing”;

•Mandating the consideration of advanced technologies for long-term regional transmission planning;

•Reforming transmission planning at the local level, including enhancing stakeholder engagement and participation;

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•Requiring RTOs to address certain needs related to generator interconnections in their planning and cost allocation processes; and

•Enhancing interregional transmission coordination procedures among transmission providers in neighboring regions.

Order 1920 became effective on August 12, 2024. We are still assessing the impact of the rule to our operations. A number of rehearing requests have been filed by various parties, including us, requesting the FERC to revise or clarify various aspects of the rule. Our request for rehearing is narrowly focused on certain aspects of the rule’s requirement that transmission providers reevaluate under certain circumstances the benefits of transmission facilities selected through long-term regional transmission planning. In addition to requests for rehearing, a number of parties have filed petitions for review with various circuit courts, which have been consolidated and assigned to the U.S. Court of Appeals for the Fourth Circuit. We will continue to monitor developments related to these challenges while implementing processes to address new requirements under the final rule.

Iowa Right of First Refusal and First Tranche of MISO’s LRTP

In 2020, the State of Iowa enacted a state law that granted incumbent Iowa electric transmission owners, including ITC Midwest, a ROFR to construct, own and maintain certain electric transmission assets in the state. On October 14, 2020, LS Power Midcontinent, LLC and Southwest Transmission, LLC sued the Iowa Utilities Commission (formerly known as the Iowa Utilities Board) and several individual defendants, seeking a judgment that the ROFR provisions violated the Iowa Constitution and requesting a temporary injunction of the ROFR until the case was resolved. The case was dismissed in district court based on the plaintiffs’ lack of standing in the case and the court of appeals later affirmed the district court’s ruling.

Following appeal, on March 24, 2023, the Iowa Supreme Court issued an opinion that the plaintiffs have standing to challenge the ROFR provision, thereby vacating the decision of the court of appeals, reversing the district court’s judgment and remanding the case to the Iowa District Court for Polk County to determine the merits regarding the constitutionality of the ROFR statute. As part of this opinion, the Iowa Supreme Court also issued a temporary injunction staying the enforcement of the ROFR. However, ITC Midwest had already exercised its right to construct certain electric transmission projects approved and awarded by MISO, as the decision for assignment of the first tranche of LRTP projects in Iowa was finalized by MISO on July 25, 2022. MISO is the only entity charged with determining what projects are to be competitively bid pursuant to its tariff.

On December 4, 2023, the Iowa District Court for Polk County issued a decision finding that the manner in which Iowa’s ROFR statute was passed is unconstitutional. The court did not make any determination on the merits of the ROFR itself. The district court issued a permanent injunction preventing ITC Midwest and others from taking further action to construct the first tranche of Iowa’s LRTP projects in reliance on the ROFR. However, the district court ordered that the injunction does not prohibit ITC Midwest from seeking approval from the Iowa Utilities Commission to construct projects included in the first tranche of LRTP, so long as the approval is unrelated to a claim under the ROFR statute. ITC Midwest filed for reconsideration of the district court’s decision with respect to the scope of the injunction. On March 19, 2024, the district court issued an order denying all motions for reconsideration of its decision. ITC Midwest appealed this order on April 17, 2024.

On July 5, 2024, the Iowa Supreme Court granted a motion filed by ITC Midwest requesting a stay of the injunction issued by the district court while the district court’s orders are appealed. LS Power Midcontinent, LLC and Southwest Transmission, LLC requested quorum review of the stay of the injunction. On August 7, 2024, the Iowa Supreme Court vacated the stay and reinstated the injunction.

On May 28, 2024, MISO confirmed commencement of a variance analysis process on the grounds that there was an inability to construct a portion of the first tranche of MISO’s LRTP projects in Iowa due to the injunction imposed by the district court order. On August 29, 2024, MISO publicly posted the conclusion of the variance analysis whereby its Competitive Transmission Executive Committee, which maintains authority to oversee and implement variance analyses pursuant to the MISO tariff, reaffirmed MISO’s assignment of ownership and construction responsibility for the portion of the first tranche of MISO’s LRTP projects in Iowa to ITC Midwest and MidAmerican Energy Company. The total estimated capital investment in Iowa is approximately $900 million for the first tranche of MISO’s LRTP, including approximately $800 million in our plan for forecasted capital expenditures for the period from 2025 through 2029. Approximately 70% of ITC Midwest’s first tranche of MISO’s LRTP projects are upgrades to existing ITC Midwest facilities in Iowa along existing rights of way, which

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under MISO’s tariff grants ITC Midwest the option to construct the upgrades regardless of the outcome of the ROFR proceedings. While the results of MISO’s variance analysis process allow ITC Midwest to move forward with development of its portion of the first tranche of MISO’s LRTP projects in Iowa, uncertainty remains around the ultimate resolution of these matters. See below under “ — Capital Investment and Operating Results Trends” for additional information on impacts to our future estimated capital investments from MISO’s LRTP.

Revenue Accruals and Deferrals — Effects of Monthly Network Peak Loads

For our MISO Regulated Operating Subsidiaries, monthly network peak loads are used for billing network revenues, which currently is the largest component of our operating revenues. One of the primary factors that impacts the revenue accruals and deferrals at our MISO Regulated Operating Subsidiaries is actual monthly network peak loads experienced as compared to those forecasted in establishing the annual network transmission rate. Under their cost-based Formula Rates that contain a true-up mechanism, our MISO Regulated Operating Subsidiaries accrue or defer revenues to the extent that their actual revenue requirement for the reporting period is higher or lower, respectively, than the amounts billed relating to that reporting period. These revenue accruals and deferrals are recorded to the condensed consolidated statements of financial position within regulatory assets or regulatory liabilities, respectively. Refer to Note 5 to the condensed consolidated interim financial statements for additional information. Although monthly network peak loads do not impact operating revenues recognized, network load affects the timing of our cash flows from transmission service. The monthly network peak load of our MISO Regulated Operating Subsidiaries is generally impacted by weather, economic conditions and other significant factors, and is seasonally shaped with higher load in the summer months when cooling demand is higher. We are unable to predict the possible future impacts of weather, economic conditions and other factors on monthly network peak loads at our MISO Regulated Operating Subsidiaries.

Capital Investment and Operating Results Trends

We expect a long-term upward trend in rate base resulting from our anticipated capital investment, in excess of depreciation and any acquisition premiums, from our Regulated Operating Subsidiaries’ long-term capital investment programs to improve reliability, increase system capacity and upgrade the transmission network to support new generating resources. Investments in property, plant and equipment, when placed in-service upon completion of a capital project, are added to the rate base of our Regulated Operating Subsidiaries. We expect increases in rate base to result in a corresponding long-term upward trend in revenues and earnings. Our revenues and earnings may be impacted by future increases or decreases to our rates for ROE incentive adders and base ROE. As of September 30, 2024, our Regulated Operating Subsidiaries had a total of approximately $6 billion of equity in their collective capital structures for ratemaking purposes. Based on this level of aggregate equity, we estimate that each 10 basis point change in the authorized ROE would impact annual consolidated net income by approximately $6 million. See Note 5 and Note 12 to the condensed consolidated interim financial statements for additional information related to matters that may impact future rates for incentive adders and base ROE.

Our Regulated Operating Subsidiaries incur significant costs to invest in their transmission systems and maintain the assets on their systems. While we have been impacted by increases in inflation and supply chain disruptions, these challenges have not had a material impact on our current or forecasted capital expenditures. We work closely with our suppliers to manage costs and deliveries of required materials and supplies and attempt to ensure that our asset and inventory purchases adequately support our construction and maintenance activities. In response to these challenges, we have increased levels of certain materials and supplies inventories over time to help reduce risks related to global supply chain constraints. We continue to evaluate and monitor the potential impacts of these macroeconomic trends on our forecasted capital expenditures and maintenance activities.

Our Regulated Operating Subsidiaries strive for high reliability of their systems and improvement in system accessibility for all generation resources. The FERC requires compliance with certain reliability standards and may take enforcement actions against violators, including the imposition of substantial fines. NERC is responsible for developing and enforcing these mandatory reliability standards. We continually assess our transmission systems against standards established by NERC, as well as the standards of applicable regional entities under NERC that have been delegated certain authority for the purpose of proposing and enforcing reliability standards. We believe that we meet the applicable standards in all material respects, although further

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investment in our transmission systems and an increase in maintenance activities will likely be needed to maintain compliance, improve reliability and address any new standards that may be promulgated.

We also assess our transmission systems against our own planning criteria that are filed annually with the FERC. Based on our planning studies, we see needs to make capital investments to: (1) maintain and replace our current transmission infrastructure to enhance system reliability and accommodate load growth; (2) interconnect new renewable generation resources; (3) upgrade physical and technological grid security to protect critical infrastructure; and (4) expand access to electricity markets to reduce the overall cost of delivered energy to customers.

In addition to future investments identified through our planning studies, MISO continues to identify capital investment needs through its LRTP initiative. The objective of this initiative is to ensure grid reliability while integrating the different operating characteristics of new generation resources and increase resiliency of the grid during severe weather events. The MISO LRTP will result in additional capital investments across MISO’s Midwest subregion, including investments for our MISO Regulated Operating Subsidiaries. In addition to projects that were previously identified by MISO in the first tranche of this plan, on September 24, 2024 MISO published a final portfolio of an additional tranche of 24 LRTP projects (“Tranche 2.1”) with estimated total associated transmission costs of approximately $22 billion. Tranche 2.1 requires MISO board approval, which is currently anticipated in December 2024. Based on the MISO portfolio of Tranche 2.1 projects, we expect at least $3 billion of additional capital investments for our MISO Regulated Operating Subsidiaries. At this time, these estimated future capital investments only include projects from the Tranche 2.1 portfolio that are located within our footprint in Michigan and Minnesota. We currently anticipate that the majority of these investments will occur beyond our plan for forecasted capital expenditures for the years 2025 through 2029.

The following table shows our actual and expected capital expenditures at our Regulated Operating Subsidiaries:


	Actual Capital		Forecasted
	Expenditures for the		Capital
	Nine Months Ended		Expenditures
(In millions of USD)	September 30, 2024		2025 — 2029
Expenditures for property, plant and equipment (a)	$	751	$	5,837

____________________________

(a)Amounts represent the cash payments to acquire or construct property, plant and equipment, as presented in the condensed 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.

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Results of Operations


	Three Months Ended						Percentage		Nine Months Ended						Percentage
	September 30,				Increase		Increase		September 30,				Increase		Increase
(In millions of USD)	2024		2023		(Decrease)		(Decrease)		2024		2023		(Decrease)		(Decrease)
OPERATING REVENUES
Transmission and other services	$	488	$	464	$	24	5	%	$	1,278	$	1,203	$	75	6	%
Formula Rate true-up	(80)		(76)		(4)		(5)	%	(57)		(45)		(12)		(27)	%
Total operating revenues	408		388		20		5	%	1,221		1,158		63		5	%
OPERATING EXPENSES
Operation and maintenance	30		30		—		—	%	84		87		(3)		(3)	%
General and administrative	30		26		4		15	%	89		86		3		3	%
Depreciation and amortization	80		77		3		4	%	242		228		14		6	%
Taxes other than income taxes	35		34		1		3	%	116		109		7		6	%
Other operating expenses (income), net	—		—		—		n/a		(1)		(1)		—		—	%
Total operating expenses	175		167		8		5	%	530		509		21		4	%
OPERATING INCOME	233		221		12		5	%	691		649		42		6	%
OTHER EXPENSES (INCOME)
Interest expense, net	88		82		6		7	%	257		234		23		10	%
Allowance for equity funds used during construction	(12)		(10)		(2)		(20)	%	(34)		(32)		(2)		(6)	%
Other expenses (income), net	(6)		(5)		(1)		(20)	%	(19)		(10)		(9)		(90)	%
Total other expenses (income)	70		67		3		4	%	204		192		12		6	%
INCOME BEFORE INCOME TAXES	163		154		9		6	%	487		457		30		7	%
INCOME TAX PROVISION	39		44		(5)		(11)	%	114		117		(3)		(3)	%
NET INCOME	$	124	$	110	$	14	13	%	$	373	$	340	$	33	10	%

Operating Revenues

The following table sets forth the components of and changes in operating revenues for the three months ended September 30, 2024 and 2023, which included revenue accruals and deferrals, as described in Note 5 to the condensed consolidated interim financial statements:


											Percentage
	2024				2023				Increase		Increase
(In millions of USD)	Amount		Percentage		Amount		Percentage		(Decrease)		(Decrease)
Network revenues (a)	$	295	72	%	$	276	71	%	$	19	7	%
Regional cost sharing revenues (a)	99		24	%	96		25	%	3		3	%
Point-to-point	5		1	%	5		1	%	—		—	%
Scheduling, control and dispatch (a)	4		1	%	5		1	%	(1)		(20)	%
Other	5		2	%	6		2	%	(1)		(17)	%

Total	$	408	100	%	$	388	100	%	$	20	5	%

____________________________

(a)Includes a portion of Formula Rate true-up revenue.

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The following table sets forth the components of and changes in operating revenues for the nine months ended September 30, 2024 and 2023, which included revenue accruals and deferrals, as described in Note 5 to the condensed consolidated interim financial statements:


											Percentage
	2024				2023				Increase		Increase
(In millions of USD)	Amount		Percentage		Amount		Percentage		(Decrease)		(Decrease)
Network revenues (a)	$	871	72	%	$	815	71	%	$	56	7	%
Regional cost sharing revenues (a)	296		24	%	288		25	%	8		3	%
Point-to-point	16		1	%	15		1	%	1		7	%
Scheduling, control and dispatch (a)	14		1	%	15		1	%	(1)		(7)	%
Other	24		2	%	25		2	%	(1)		(4)	%

Total	$	1,221	100	%	$	1,158	100	%	$	63	5	%

___________________________

(a)Includes a portion of Formula Rate true-up revenue.

Operating revenues for the three and nine months ended September 30, 2024 increased compared to the same periods in 2023 primarily due to higher rate base associated with higher balances of property, plant and equipment in service and resulting return. Other contributors included increased recoverable operating expenses.

Other Expenses (Income)

Interest expense, net

Interest expense, net increased for the three and nine months ended September 30, 2024 compared to the same periods in 2023 primarily due to higher overall debt balances and higher interest rates on long-term debt issuances, partially offset by a reduction of balances of commercial paper and revolving credit agreements. See Note 6 to the condensed consolidated interim financial statements for additional information.

Other expenses (income), net

Other expenses (income), net decreased for the three and nine months ended September 30, 2024 compared to the same periods in 2023 primarily due to an increase in interest income and gain on certain investments associated with our supplemental benefit plans.

Income Tax Provision

Income tax provision decreased for the three and nine months ended September 30, 2024 compared to the same periods in 2023 primarily due to the Iowa tax rate reduction announced in September 2023 that required the remeasurement of certain deferred tax balances. As a result, we recognized an increase in deferred tax expense in September 2023.

Liquidity and Capital Resources

We expect to maintain our approach of funding our future capital requirements with our cash and cash equivalents, including cash provided by operations at our Regulated Operating Subsidiaries, future issuances under our commercial paper program and amounts available under our Revolving Credit Agreement (the terms of which are described in Note 6 to the condensed consolidated interim financial statements). In addition, we may secure fixed debt funding in the capital markets, although we can provide no assurance that we will be able to obtain financing on favorable terms or at all. As market conditions warrant, we may also from time to time repurchase debt securities issued by us in the open market, in privately negotiated transactions, by tender offer or otherwise. We expect that our capital requirements will arise principally from our need to:

•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 our debt service requirements, including principal repayments and periodic interest payments.

•Fund working capital requirements.

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In addition to the expected capital requirements above, any adverse determinations or settlements relating to the regulatory matters or contingencies described in Notes 5 and 12 to the condensed consolidated interim financial statements would result in additional capital requirements. Our contractual obligations are described in our Form 10-K for the year ended December 31, 2023. There have been no material changes to that information since December 31, 2023, other than the items listed below and described in Note 6 to the condensed consolidated interim financial statements.

•The pricing of $250 million of First Mortgage Bonds at ITC Midwest with an expected funding date in December 2024. The issuance will consist of $125 million of 11-year term 4.88% First Mortgage Bonds and $125 million of 19-year term 5.25% First Mortgage Bonds. The proceeds from the bonds are expected to be used to repay $75 million aggregate principal amount of 4.60% First Mortgage Bonds, Series D due 2024, to repay ITC Midwest’s borrowings under the Revolving Credit Agreement, to partially fund capital expenditures and for general corporate purposes.

We believe that we have sufficient capital resources to meet our currently anticipated short-term (within twelve months) needs. However, we rely on both internal and external sources of liquidity to provide working capital and fund capital investments. An extended period of economic disruption could impact our ability to access the capital markets requiring us to seek alternative forms of financing which could negatively impact our liquidity and capital resources. Additionally, we will continue to monitor and assess interest rates and the lending environment to inform our funding strategy, including the utilization of various types of debt instruments.

ITC Holdings’ sources of cash are dividends and other payments received by us from our Regulated Operating Subsidiaries and any of our other subsidiaries as well as the proceeds raised from the sale of our debt securities. Each of our Regulated Operating Subsidiaries, while wholly-owned by ITC Holdings, is legally distinct from ITC Holdings and has no obligation, contingent or otherwise, to make funds available to ITC Holdings.

To address our short-term (within twelve months) cash requirements, we expect to utilize our cash and cash equivalents, including cash provided by operations at our Regulated Operating Subsidiaries, our Revolving Credit Agreement and long-term debt financing, as needed. In addition, ITC Holdings may use its commercial paper program to issue an aggregate amount not to exceed $400 million outstanding at any one time. As of September 30, 2024, we had consolidated indebtedness under our Revolving Credit Agreement of $338 million, with unused capacity under our Revolving Credit Agreement of $662 million. ITC Holdings did not have any commercial paper issued and outstanding as of September 30, 2024.

To address our future long-term capital requirements, we expect that we will need to obtain additional long-term debt financing. Certain of our capital projects could be delayed if we experience difficulties in accessing capital. We expect to be able to obtain such additional financing, as needed, in amounts and upon terms that will be acceptable to us due to our strong credit ratings and our historical ability to obtain financing.

Credit Ratings

Credit ratings by nationally recognized statistical rating agencies are an important component of our liquidity profile. Credit ratings relate to our ability to issue debt securities and the cost to borrow money, and should not be viewed as a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time and each rating should be evaluated independently of any other rating. An explanation of these ratings may be obtained from the respective rating agency. Additional information related to our credit ratings and outlook reported by rating agencies is included in “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation — Credit Rating” of our Form 10-K for the year ended December 31, 2023.

Covenants

Our debt instruments contain numerous financial and operating covenants that place significant restrictions on certain transactions, such as incurring additional indebtedness, engaging in sale and lease-back transactions, creating liens or other encumbrances, entering into mergers, consolidations, liquidations or dissolutions, creating or acquiring subsidiaries and selling or otherwise disposing of all or substantially all of our assets. In addition, the covenants require us to meet certain financial ratios, such as maintaining certain debt to capitalization ratios and certain funds from operations to debt levels. As of September 30, 2024, we were not in violation of any debt covenant. In the event of a downgrade in our credit ratings, none of the covenants would be directly impacted, although the borrowing costs under our Revolving Credit Agreement may increase.

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Cash Flows


	Nine Months Ended						Percentage
	September 30,				Increase		Increase
(In millions of USD)	2024		2023		(Decrease)		(Decrease)
Cash flows provided by (used in):
Operating activities	$	617	$	595	$	22	4	%
Investing activities	(760)		(635)		125		20	%
Financing activities	(54)		370		424		115	%
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(197)	$	330

Cash Flows From Operating Activities

Net cash provided by operating activities increased primarily due to an increase in cash received from operating revenues of $76 million and an increase in interest earned on balances of cash and cash equivalents of $4 million during the nine months ended September 30, 2024 compared to the same period in 2023. This increase was partially offset by an increase in interest paid, an increase in property taxes paid, an increase in income taxes paid and a net decrease due to the settlement of interest rate swaps of $43 million, $7 million, $7 million and $7 million, respectively, during the nine months ended September 30, 2024 compared to the same period in 2023.

Cash Flows From Investing Activities

Net cash used in investing activities increased primarily due to an increase in capital expenditures during the nine months ended September 30, 2024 compared to the same period in 2023.

Cash Flows From Financing Activities

Net cash used in financing activities increased primarily due to an increase in repayments of long-term debt of $200 million, a decrease in issuances of long-term debt of $165 million, a decrease in net borrowings under our revolving credit agreements of $122 million, an increase in dividend payments of $39 million and a decrease in net refundable deposits from generators for transmission network upgrades of $37 million during the nine months ended September 30, 2024 compared to the same period in 2023. This increase was partially offset by a decrease in net repayments of commercial paper of $134 million during the nine months ended September 30, 2024 compared to the same period in 2023.

Critical Accounting Estimates

Our condensed consolidated interim financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated interim financial statements requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates. The application of these policies requires judgments regarding future events.

These estimates and judgments, in and of themselves, could materially impact the condensed consolidated interim financial statements and disclosures based on varying assumptions, as future events rarely develop exactly as forecasted, and even the best estimates routinely require adjustment.

The accounting policies discussed in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” of our Form 10-K for the year ended December 31, 2023 are considered by management to be the most important to an understanding of the condensed consolidated interim financial statements because of their significance to the portrayal of our financial condition and results of operations or because their application places the most significant demands on management’s judgment and estimates about the effect of matters that are inherently uncertain. There have been no material changes to that information during the nine months ended September 30, 2024.

Recent Accounting Pronouncements

See Note 2 to the condensed consolidated interim financial statements for information related to recently issued FASB guidance.

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SEC Rules on Enhancement and Standardization of Climate-Related Disclosures

In March 2024, the SEC adopted rules to enhance and standardize climate-related disclosures. The final rules require disclosure of the following information in the footnotes to the financial statements, subject to certain materiality thresholds:

•Financial statement effects of severe weather events and other natural conditions;

•Impacts to estimates and assumptions used to produce financial statements associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans; and

•Financial statement effects related to carbon offsets or renewable energy credits/certificates used as part of plans to achieve climate-related goals.

In addition, registrants will be required to disclose outside of the financial statements information about: the material impact of climate-related risks on its strategy, business model and outlook; risk management processes for, and governance and oversight activities of those risks; and material climate-related targets or goals. Information related to material greenhouse gas emissions will be required for certain registrants, but will not be required for us based on our current filer status.

The final rules include a phased-in compliance period for all registrants, with the compliance date dependent on the registrant’s filer status and the content of the disclosure. Based on our current filer status, we will be required to comply with the final rules beginning with our annual report for the fiscal year beginning January 1, 2027. We are assessing the new climate-related disclosure rules, awaiting decisions on their legal status and determining an implementation plan to comply with the disclosure requirements in accordance with the prescribed timeline.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As described in our Form 10-K for the year ended December 31, 2023, we are subject to: (1) interest rate risk on our fixed rate debt, Revolving Credit Agreement, commercial paper program and derivative instruments and hedging activities; (2) commodity price risk from market price fluctuations; and (3) credit risk primarily with DTE Electric, Consumers Energy and IP&L, our primary customers. There have been no material changes in these risks during the nine months ended September 30, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be disclosed in our reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, with a company have been detected.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective, at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in certain legal proceedings before various courts, governmental agencies and mediation panels concerning matters arising in the ordinary course of business. These proceedings may include certain contract disputes, eminent domain and vegetation management activities, regulatory matters and pending judicial matters. We cannot predict the final disposition of such proceedings. We regularly review legal matters and record provisions for claims that are considered probable of loss.

See Note 12 to the condensed consolidated interim financial statements for a description of certain pending legal proceedings, which description is incorporated herein by reference.

ITEM 1A. RISK FACTORS

For information regarding risk factors affecting us, see “Item 1A Risk Factors” of our Form 10-K for the year ended December 31, 2023. There have been no material changes to the risk factors set forth therein.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this report (unless otherwise noted to be previously filed, and therefore incorporated herein by reference). Our SEC file number is 001-32576.


Exhibit No.						Description of Document


















***10.218						Letter Agreement between ITC Holdings Corp. and Linda H. Apsey, effective as of July 17, 2024

***10.219						Employment Agreement between ITC Holdings Corp. and Krista K. Tanner, effective as of July 17, 2024

***10.220						Letter Agreement, dated as of August 1, 2024, between ITC Holdings Corp. and Gretchen Holloway

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL and contained in Exhibit 101

___________________________




***						Management contract or compensatory plan or arrangement filed herewith

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SIGNATURES

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

Dated: November 4, 2024



ITC HOLDINGS CORP.


By:			/s/ Linda H. Apsey
			Linda H. Apsey
			Chief Executive Officer (duly authorized officer)


By:			/s/ Gretchen L. Holloway
			Gretchen L. Holloway
			Senior Vice President and Chief Financial Officer (principal financial and accounting officer)

EXECUTION VERSION

July 17, 2024

By Electronic Mail
lapsey@itctransco.com

Linda H. Apsey
c/o ITC Holdings Corp.
27175 Energy Way
Novi, Michigan 48377

Re: Amendment to Employment Agreement

Dear Linda:

As we discussed, based upon a change in your position, it is necessary to amend your December 21, 2012 Employment Agreement (the "Employment Agreement"), between you and ITC Holdings Corp. As reflected in an October 14, 2016 letter, effective November 1, 2016, you were appointed President and Chief Executive Officer of ITC Holdings Corp. (the "Company"), International Transmission Company and any of their subsidiaries and/or affiliates that the board of directors of the Company (the "Board") designated (collectively, the "Employer"). Effective July 16, 2024, this letter replaces and supersedes the October 14, 2016 letter, and amends and modifies your Employment Agreement with the Company as follows:

1.Effective July 17, 2024, Section 2(a) of the Employment Agreement is amended as follows: (A) your position will be Chief Executive Officer of the Employer, and (B) you will have such duties and authority as the Board (instead of the Chief Executive Officer) determines from time to time.

2.Effective July 17, 2024, Section 2(b) of the Employment Agreement is amended and consent of the Board, instead of the Chief Executive Officer, is required with respect to your engaging in activities described therein.

3.Effective July 17, 2024, your new term of employment will commence on July 16, 2024, and end on July 16, 2026, subject to the conditions set forth in the Employment Agreement; provided, however, that such period of employment will automatically be extended for successive one-year periods unless you or the Employer, at least thirty (30) days prior to the end of any such period, provides written notice to the other party of the intent not to extend such period of employment for any additional one-year period.

4.Effective July 17, 2024, your annual base salary will continue as previously determined by the Board on November 9, 2023, your target annual incentive plan bonus, as determined by the Board on November 9, 2023, is 100% of salary, and your long term incentive value will continue as previously determined by the Board on January 20, 2024

4895-5420-4877 3

This letter and the Employment Agreement (and any policies referenced therein) set forth the entire agreement and understanding of the parties with respect to the subject matter hereof and thereof and supersede any and all prior agreements, arrangements and understandings, written or oral, relating to the matters set forth in this letter and the Employment Agreement. Except as expressly modified by this letter, all terms and provisions of the Employment Agreement shall continue unchanged and in full force and effect. You acknowledge that no promises or representations, oral or written, have been made regarding your employment other than those expressly stated herein, and that you have not relied on any other promises or representations relating to your employment in signing this letter.

This letter may be executed in counterparts, each of which will be deemed an original, but all of which will be deemed one and the same instrument.

Please sign and date this letter below and return the signed and dated letter to me on or before July 19, 2024 to acknowledge this change in the terms and conditions of your employment, as previously set forth in the Employment Agreement.

We thank you for and look forward to your continued service with the Company.

Sincerely,

ITC Holdings Corp.

/s/ Christine Mason Soneral

By: Christine Mason Soneral

Title: SVP and General Counsel

ACKNOWLEDGED & ACCEPTED

/s/ Linda H. Apsey

Linda H. Apsey

Date: July 16, 2024

4895-5420-4877 3

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of July 17, 2024 (the "Effective Date"), by and between ITC Holdings Corp. (the "Company") and Krista Tanner (the "Executive").

WHEREAS, the Executive and the Company desire to enter into an agreement to embody the terms of the Executive's employment with the Company beginning on the Effective Date, replacing in its entirety Executive's Employment Agreement in effect immediately prior to the Effective Date.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, and intending to be legally bound hereby, the parties agree as follows:

1.Term. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by ITC Holdings Corp. (the "Company"), and any of their subsidiaries and/or affiliates that the Board of Directors of the Company (the "Board") shall designate (collectively, the "Employer") for an initial two-year period commencing on the Effective Date and ending on July 16, 2026 (the "Initial Period), on the terms and subject to the conditions set forth in this Agreement; provided, however, that such period of employment shall automatically be extended for successive one-year periods (a "Renewal Period") unless the Employer or Executive, at least thirty (30) calendar days prior to the end of any such period, provides written notice to the other party of the intent not to extend such period for any additional one-year period.

2.Position.

a.Executive shall serve in the capacity of President of ITC Holdings Corp. In such position, Executive shall have such duties and authority as the Chief Executive Officer of the Employer (the "Chief Executive Officer") determines from time to time. If requested, Executive shall also serve as a member of the Board without additional compensation.

b.Executive will devote Executive's full business time and best efforts to the performance of Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Chief Executive Officer; provided that nothing herein shall preclude Executive, subject to the prior approval of the Chief Executive Officer, from accepting appointment to or continue to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive's duties hereunder or conflict with Section 8 of this Agreement.

4860-8859-8221 2

3.Base Salary. Employer shall pay Executive a base salary at the annual rate of $535,000.00 payable in regular installments in accordance with the Employer's normal payroll practices. Executive's base salary shall be reviewed annually by the Chief Executive Officer and Executive shall be entitled to such increases in Executive's base salary, if any, as may be determined from time to time in the sole discretion of the Chief Executive Officer Executive's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary". The first and last payment to Executive will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period. This is a position exempt from the overtime provisions under federal and state law.

4.Annual Bonus. Executive shall be eligible to earn an annual bonus award in respect of each fiscal year of Employer (an "Annual Bonus"), payable upon the Employer's achievement of certain performance targets established by the Board and after application of any multipliers approved by the Board, pursuant to the terms of an incentive compensation plan established by the Board (the "Incentive Plan"). Executive's target Annual Bonus for each fiscal year of Employer shall be that percentage of the Executive's Base Salary as the Board may establish from time to time (the "Target Bonus"), but shall generally be one-hundred percent (100%) of Executive's Base Salary, plus any multipliers approved by the Board. The foregoing notwithstanding, any Annual Bonus to which Executive is entitled shall be paid no later than two and a half (2-1/2) months after the later of the end of the fiscal or calendar year in which such Annual Bonus is no longer subject to a substantial risk of forfeiture (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and Internal Revenue Service ("IRS") guidance issued thereunder).

5.Employee Benefits and Perquisites; Business Expenses.

a.Employee Benefits. Executive shall be entitled to participate in the Employer's employee benefit and retirement plans (the "ITC Plans") as in effect from time to time as determined by the Board, which provide certain benefits (collectively the "Employee Benefits") to Executive, including the following plans: (i) welfare benefit plans (including active medical, life, disability, flexible spending accounts and other related welfare plans); (ii) fringe benefit plans (including education assistance and adoption assistance); (iii) retiree welfare benefit plans (medical and life insurance); (iv) qualified and non-qualified defined benefit and defined contribution plans; and (v) vacation plans (except that there shall be limitations set on the amount of vacation that Executive may carry forward from any given calendar year to the next).

b.Perquisites. Executive shall also be entitled to receive such perquisites as are generally provided to executives of the Employer from time to time, as determined by the Board (or a compensation committee thereof).

c.Business Expenses. Reasonable business expenses incurred by Executive in the performance of Executive's duties hereunder shall be reimbursed by the Employer in accordance with the Employer's policies; provided that such reimbursement shall in any event occur no later than ninety (90) calendar days after the date on which an eligible business expense is incurred

4860-8859-8221 2 2

6.Equity Participation. Executive's equity participation in the Company has been or will be documented pursuant to some or all of the ITC Holdings Corp. 2017 Omnibus Plan, the ITC Holdings Corp. Executive Omnibus Plan, the Fortis, Inc. 2020 Restricted Share Unit Plan, the 2024 Fortis Inc. Omibus Equity Plan, and any amendments thereto, or in any successor plan or plans, and in one or more award agreements associated therewith, each as executed by the Executive, the Company, and its shareholders, as applicable (such documents, collectively, the "Equity Documents"). The Company and Executive each acknowledges that the terms and conditions of the aforementioned documents govern Executive's acquisition, vesting, holding, sale or other disposition of Executive's equity in the Company, and Executive's and the Company's rights with respect thereto.

7.Termination of Employment. Executive's employment hereunder may be terminated by either party at any time and for any reason, subject to the applicable provisions of this Section 7; provided that Executive will be required to give the Employer at least thirty (30) calendar days advance written notice of any resignation of Executive's employment (the "Executive Notice Period"); and provided, further, that the Employer will be required to give Executive at least fourteen (14) calendar days advance notice of a termination of Executive's employment by the Employer without Cause (other than in the event of Executive's Disability) (the "Employer Notice Period"). With respect to either the Executive Notice Period or the Employer Notice Period, the Employer may provide Executive with a payment equal to the Base Salary that would otherwise be payable with respect to any portion of the Executive or Employer Notice Period which the Employer elects to waive. Notwithstanding any other provision of this Agreement (and except as may otherwise be provided in the Equity Documents), the provisions of this Section 7 shall exclusively govern Executive's rights upon termination of employment with the Employer.

a. By the Employer For Cause or By Executive Resignation Without Good Reason.

i.Executive's employment hereunder may be terminated by the Employer for Cause (as defined below) and shall terminate automatically upon Executive's resignation without Good Reason.

ii.For purposes of this Agreement, "Cause" shall mean (A) Executive's continued failure substantially to perform Executive's duties hereunder to the satisfaction of the Company (other than as a result of total or partial incapacity due to physical or mental illness) for a period of fourteen (14) calendar days following written notice by the Employer to Executive of such failure, (B) theft, dishonesty, falsification of Company records, or conduct amounting to a conflict of interest by Executive, (C) engagement by Executive of conduct that could cause harm to the reputation or standing of Employer or which could impair Executive's ability to perform Executive's duties for Employer, (D) Executive's malfeasance or misconduct in connection with Executive's duties hereunder or any act or omission which is injurious to the financial condition or business reputation of the Employer or affiliates, (E) a violation by Executive of any material Employer rule, regulation, procedure or policy, (F) while on Company premises, or while performing Executive's job duties, possessing or using an illegal (under federal or state law) or controlled substance or being under the influence of, or having

4860-8859-8221 2 3

Executive's performance affected by, an illegal or controlled substance, or by alcohol, or (G) Executive's breach of the provisions of Sections 8 or 9 of this Agreement.

iii.If Executive's employment is terminated by the Employer for Cause or if Executive resigns without Good Reason (other than due to a Disability, as such term is defined below), Executive shall be entitled to receive:

(1)any Base Salary earned through the date of termination, payable at such time(s) as the Base Salary would otherwise be payable in accordance with the normal payroll practices of the Employer;

(2)any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year, payable in a lump sum at such time as such Annual Bonus would normally be paid under the Incentive Plan as provided in Section 4 hereof;

(3)reimbursement for any umeimbursed business expenses properly incurred by Executive through the date of termination, payable at such time(s) and in accordance with the Employer's policy prior to the date of Executive's termination; provided that such reimbursement shall in any event occur no later than ninety (90) calendar days after the date on which an eligible business expense is incurred; and

(4)such Employee Benefits, if any, as to which Executive may be entitled under the applicable ITC Plans upon termination of employment hereunder.

The payments and benefits described in clauses (1) through (4) hereof are referred to, collectively, as the "Accrued Rights".

Following such termination of Executive's employment by the Employer for Cause or resignation by Executive without Good Reason, except as set forth in this Section 7(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

b. Disability or Death

i.Executive's employment hereunder shall terminate upon Executive's death, and may be terminated by the Employer if Executive experiences a "Disability" (as such term shall be defined from time to time under Code Section 409A). Any question as to the existence of the Disability of Executive as to which Executive and the Employer cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Employer. If Executive and the Employer cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Employer and Executive shall be final and conclusive for all purposes of the Agreement.

ii.Upon termination of Executive's employment hereunder for Disability or death, Executive, Executive's then spouse, or Executive's estate (as the case may be), shall be entitled to receive•

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(1)the Accrued Rights; and

(2)a pro rata portion of the Target Bonus (calculated based on the number of days Executive was employed hereunder during the calendar year in which the date of such termination of employment occurs, relative to the applicable full calendar year), payable in a lump sum at the time that such an Annual Bonus (if any) would normally be paid as set forth in Section 4 hereof.

Following Executive's termination of employment due to death or Disability, except as set forth in this Section 7(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

c. By the Employer Without Cause, by Executive for Good Reason, or Non-Renewal by Employer.

i.Executive's employment hereunder may be terminated (A) by the Employer without Cause (which shall not include Executive's termination of employment due to death or Disability), (B) by Executive for Good Reason (as defined below), or (C) as the result of non-renewel of the Initial Period or a Renewal Period, by Employer.

ii.For purposes of this Agreement, "Good Reason" means the occurrence of any of the following without consent of Executive: (1) any material reduction in Executive's Base Salary; (2) any material breach by the Employer of this Agreement; (3) any material reduction in the status, position or responsibilities of Executive; (4) the long-term assignment of duties to Executive that are materially below the level of Executive's position and responsibilities described in this Agreement based upon the staffing level and industry of the Employer; or (5) the Employer requiring Executive to be principally based at any office or location more than fifty (50) miles from Executive's principal work location as of the Effective Date.

Notwithstanding the foregoing, Good Reason shall not exist if (A) Executive fails to give the Employer written notice of Executive's intention to terminate employment with the

Employer for Good Reason within thirty (30) calendar days following Executive's first knowledge of any such occurrence, which notice shall identify in reasonable detail the basis therefore, (B) within thirty (30) calendar days of receipt of notice (`Cure Period"), the Employer remedies the occurrence alleged to constitute Good Reason, or (C) Employer fails to timely remedy the occurrence alleged to constitute Good Reason and Executive has not separated from service within thirty (30) calendar days following expiration of the Cure Period.

iii.If Executive's employment is terminated by the Employer pursuant to this Section 7 without Cause (other than by reason of Executive's death or Disability), by Executive for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by Employer, in addition to receiving the Accrued Rights, subject to Executive's execution and non-revocation of a release of all claims against Employer as provided in Section 7(f), Executive shall be entitled to receive:

(1) a pro rata portion of the Target Bonus (calculated based on the number of days Executive was employed hereunder during the calendar year in which the

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date of such termination of employment occurs, relative to the applicable full calendar year), payable based upon the Employer's actual achievement of the performance targets for such year as determined under and at the time that such an Annual Bonus (if any) would normally be paid as set forth in Section 4 hereof;

(2) one or both of the following series of payments:

(I)continued payment in substantially equal installments and in accordance with the normal payroll practices of Employer, for a period of two (2) years following the date of termination of Executive's employment hereunder, of Executive's annual rate of Base Salary as in effect immediately prior to such termination; and

(II)in the event that Executive's employment is terminated hereunder within a period beginning six (6) months before and ending two (2) years after a Change in Control occurs, Executive shall receive an amount equal to two (2) times the average of each of the Annual Bonuses that were payable to Executive (including any portion of any such Annual Bonus the receipt of which Executive elected to defer) for the three fiscal years immediately preceding the fiscal year in which Executive's employment terminates,

payable in substantially equal installments and in accordance with the normal payroll practices of Employer, over the period during which the Executive's Base Salary will continue to be paid pursuant to the foregoing provisions of this Section 7(c)(iii)(2) (or, if applicable, over the remaining period during which such Base Salary payments will be made, in the event the Executive's termination occurs within the six (6) month period before any such Change in Control occurs, beginning with the first payment due thirty (30) calendar days after the Change in Control occurs);

(3) a stipend, to be used at Executive's discretion, to pay health insurance premiums, or for any other purpose, during that period ending on the earlier of (I) the date Executive is eligible (even if Executive does not enroll) for coverage under another employer-sponsored group health plan in connection with other employment obtained after Executive's termination hereunder; or (II) twelve (12) months after the date of termination of Executive's employment hereunder. The stipend shall be paid to Executive each payroll period (in accordance with the normal payroll practices of Employer, but subject to any applicable limitations on payments to a "specified employee" within the meaning of Code Section 409A, as set forth below) as a taxable amount equal to the sum of (III) the Employer's portion of the premium payments due with respect to other executives with the same coverage(s) for such payroll period, plus (IV) such additional amount as is required to pay any income and/or payroll taxes due on the sum of the premium payment and the additional tax gross-up payment (as determined by the Employer's independent accountants, assuming that the Executive pays income taxes at the highest applicable marginal rates for the calendar year in which such payments are to be made); and

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(4)outplacement services of a duration of up to two (2) years from the date of termination (or until such earlier date on which Executive obtains other employment), and at a level commensurate with Executive's former position with the Employer, and by a provider as determined by the Employer in good faith.

(5)The foregoing notwithstanding, in the event Executive is a "specified employee" within the meaning of Code Section 409A and in accordance with the involuntary "separation pay plan" exception under the Code Section 409A regulations, the total of all amounts paid to Executive pursuant to Sections 7(c)(iii)(2) and (3) hereof (and any other amount payable pursuant to this Section 7(c)(iii) that constitutes a payment under a "nonqualified deferred compensation plan" within the meaning of Code Section 409A) within the first six (6) months following such termination pursuant to this subsection shall not exceed two times the lesser of (I) the sum of the Executive's annualized compensation based upon the annual rate of pay for services provided to the Employer for the calendar year preceding the calendar year in which the termination occurs (adjusted for any increase during that year that was expected to continue indefinitely, if the Executive had not terminated), or (II) the Code Section 401(a)(17) limit on compensation for the calendar year in which the Executive terminates. To the extent a portion of any such amount exceeds such limitation, the payment shall not commence until the first business day following the date that is six months after the date of termination of Executive's employment hereunder (the period during which such payments may be limited under Code Section 409A, the "409A Period"), at which time Employer shall (III) pay to Executive, in one lump sum, an amount equal to all such amounts that would otherwise have been payable during the 409A Period, and (IV) thereafter continue to pay the remaining unpaid portion of any such amounts in accordance with the normal payroll practices of Employer, at the time or through the end of the period(s) otherwise provided above in this subsection.

(6)Following Executive's termination of employment by the Employer without Cause (other than by reason of Executive's death or Disability), by Executive for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by Employer, except as set forth in this Section 7(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

d.Notice of Termination. Any purported termination of employment by the Employer or by Executive (other than due to Executive's death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 14(h) hereof For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

e.Board/Committee Resignation. Upon termination of Executive's employment for any reason, Executive will be considered to have resigned, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the board of directors (and any committees thereof) of any of the Company's affiliates.

f.Execution of Release off all Claims; Non-Revocation. Upon termination of Executive's employment without Cause, for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by Employer, Executive agrees to execute a release (the

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"Release") of all claims against the Company, its subsidiaries, affiliates, shareholders, directors, officers, employees, and agents, substantially in a form to be provided to Executive by Employer at such time Notwithstanding anything set forth in this Agreement to the contrary, upon termination of Executive's employment without Cause, for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by Employer, Executive shall not receive any payments or benefits to which Executive may be entitled hereunder (other than those which by law cannot be subject to the execution of a release) if Executive does not execute or otherwise revokes such Release Subject to the foregoing, if by no later than sixty (60) calendar days after the date of termination of Executive's employment without Cause, for Good Reason, or as the result of non-renewal of the Initial Period or a Renewal Period, by Employer, Executive has (A) not executed or has otherwise revoked such Release, or (B) Executive has executed the Release but the applicable revocation period referred to in the preceding sentence has not lapsed, then Executive shall in either case totally forfeit all payments and benefits to which Executive may be entitled under this Agreement (other than those which by law cannot be subject to the execution of a release), but this Agreement shall otherwise remain in full force and effect. In the event that prior to the end of such sixty (60) day period, Executive has properly executed such Release, has not revoked the Release, and the applicable revocation period for the Release has lapsed, and Executive has complied with Section 9(d)(ii) and (iii) and Section 13, the payments and benefits due to Executive hereunder shall commence being paid or provided with the next administratively feasible scheduled payroll date following the end of such revocation period; provided all payments that would otherwise have become due prior to such date shall be accumulated and paid when the first payment is made hereunder. The foregoing notwithstanding, in the event the sixty (60) day period referred to in this subsection begins in one taxable year of the Executive and ends in a second taxable year, any payments and benefits due to Executive hereunder (to the extent required to be restricted under Code Section 409A and IRS guidance issued thereunder) shall commence being paid or provided with the first scheduled payment date on or after the beginning of such second taxable year.

8. Non-Solicitation; Non-Hire; Non-Interference; Non-Competition.

a.Acknowledgement. Executive acknowledges that: (i) Employer and its affiliates are engaged in highly competitive businesses; (ii) in the course of the Executive's employment with the Company, the Executive has and will become familiar with Confidential Information (as defined in Section 9); (iii) the restrictions in this Section 8 are necessary to protect the legitimate business interests of the Company: (iv) the covenants in this Section 8 are reasonable with respect to duration, geographical area and scope; (v) the covenants will not prevent the Executive from engaging in Executive's profession or earning a living; and (vi) accordingly Executive agrees to the following:

b.Definitions. As used in this Agreement, the terms the terms set forth below have the following meanings:

i. "Competitive Business" means (1) a business that (A) transmits electricity, or (B) develops or operates transmission facilities, and/or (C) provides technology, equipment or services related to the transmission of electricity, (2) any other business in which Employer engaged at any time during the last year of Executive's employment, and (3) any business contemplated by Employer at any time during the last year of Executive's employment.

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ii."Customer" means any individual or entity with or through whom Employer has done business at any time in the previous three (3) year period.

iii."Person" means any individual, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever, including any division or controlled or controlling affiliate of any Person.

iv."Prospective Customer" means any individual or entity, with or through whom Employer had communicated regarding doing business (however extensive or numerous the contact(s)), during the one (1) year period prior to the last day of Executive's employment with Employer.

v."Restricted Period" means the period of time during which Executive is employed by Employer and one (1) year immediately thereafter.

vi."Restricted Territory" means any geographical area that is within 100 miles of any geographical area where the Employer or its affiliates transmitted electricity, or provided related technology, equipment or services, or otherwise conducted business at any time in the previous three (3) year period.

vii."Third Party" means by way of example and not limitation, any Employer distributor, vendor, supplier, contractor, consultant, representative, or other entity or individual with whom Employer does business, excluding Customers.

c. Non-Solicitation; Non-Hire; Non-Interference. The the extent allowed by law, during the Restricted Period, Executive will not, without Employer's written consent, whether on Executive's own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

i. solicit, or assist in soliciting, in competition with the Employer, the business of any Customer or Prospective Customer; or

ii solicit or encourage any Employee to leave the employment of the

Employer, or

iii.hire any Employee who was employed by the Employer as of the last date of Executive's employment or who left the employment of the Employer coincident with, or within one (1) year prior to or after, the last date of Executive's employment; or

iv.interfere with, or attempt to interfere with, business relationships (whether formed before, during, or after the date of this Agreement) between the Employer or any of its affiliates and any Customer, Prospective Customer, and/or Person.

d. Non-Compete. To the extent allowed by law, during the Restricted Period, Executive will not, without Employer's written request, whether on Executive's own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

i. engage in a Competitive Business in the Restricted Territory;

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enter the employ of, or render any services to, any Person who or which engages in a Competitive Business in the Restricted Territory; or

iii. acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, as an individual, partner, shareholder, member, officer, director, principal, agent, trustee or consultant.

e.Exception. Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of any Person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

f.Discretionary Extension of Restricted Period. Employer may, in its sole discretion, extend the Restricted Period (and thereby the non-competition provisions of this Section 8) by one (1) additional year and, in consideration thereof, will provide Executive with continued payment in substantially equal installments and in accordance with the normal payroll practices of the Employer, for a period of one (1) year following the first anniversary of the last date of Executive's employment hereunder, of Executive's annual rate of Base Salary as in effect immediately prior to such date. In the event Employer elects to exercise its discretion to extend the Restricted Period as provided above, the Employer will notify Executive to this effect, by no later than six (6) months after the last date of Executive's employment. The foregoing notwithstanding, such extension of the Restricted Period will not result in any similar extension of any other payments or benefits due to Executive under this Agreement.

g.Automatic Extension of Restricted Period. In the event that Executive breaches a restriction set forth in Section 8, the Restricted Period shall automatically toll from the date of the first breach, and all subsequent breaches, until the resolution of the breach through private settlement, or judicial or other action, including all appeals.

h.Modification of Restrictions. It is the intent of the Parties that the restrictions in Section 8(c) and Section 8(d) be enforced to the fullest extent allwed by law. Further, it is expressly understood and agreed that although Executive and the Employer consider the restrictions contained in this Section 8 to be reasonable and enforceable, if (i) a final judicial determination is made by a court of competent jurisdiction, or (ii) a determination is made by a government agency, that the duration, geographic area, or scope contained in this Agreement is an unenforceable restriction against Executive, or that the restrictions are otherwise unenforceable, the provisions of Section 8(c) and/or Section 8(d) shall not be rendered void but shall be deemed amended to prohibit Executive from engaging in the conduct prescribed in Section 8(c) and Section 8(d) using Confidential Information . In the event any court of competent jurisdiction finds that any restriction contained in this Section 8 is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

i.Survival. The provisions in this Section 8 shall survive the termination of Executive's employment for any reason.

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9. Confidentiality.

a.Executive will not at any time (whether during or after Executive's employment with the Employer) (i) retain or use for the benefit, purposes or account of Executive or any other Person; or (ii) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Employer (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information, including without limitation, rates, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals, and attorney client communications -- concerning the past, current or future business, activities and operations of the Employer, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Employer on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

b."Confidential Information" shall not include any information that is (i) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties, (ii) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (iii) required by law to be disclosed; provided that Executive shall give prompt written notice to the Employer of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Employer to obtain a protective order or similar treatment.

c.Except as required by law, Executive will not disclose to anyone, other than Executive's immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the confidentiality of such terms.

d.Upon termination of Executive's employment with the Employer for any reason, Executive shall (i) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Employer, its subsidiaries or affiliates; (ii) immediately destroy, delete, or return to the Employer, at the Employer's option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive's possession or control (including any of the foregoing stored or located in

Executive's office, home, laptop or other computer, whether or not the Employer's property) that contain Confidential Information or otherwise relate to the business of the Employer, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (iii) notify and fully cooperate with the Employer regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

e.Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with

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the Employer any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the Employer and its officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant. Executive shall comply with all relevant policies and guidelines of the Employer, including regarding the protection of confidential information and intellectual property and potential conflicts of interest. Executive acknowledges that the Employer may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version. Notwithstanding anything set forth herein, the Company hereby represents and warrants that the Company shall not employ the provisions of this Section 9 in a manner that would interfere with Executive's ability to obtain or retain any future employment that would not or does not otherwise violate Section 8 of this Agreement.

f.Notwithstanding the foregoing, Executive acknowledges that Executive has been advised, and Executive understands that pursuant to the Defense of Trade Secrets Act (18 U.S.C. 1833), Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and is made solely for the purpose of reporting or investigating a suspected violation of law or regulation, or is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, nothing in this Agreement (i) prohibits Executive from reporting an event that Executive reasonably and in good faith believes is a violation of law to a relevant law-enforcement or government agency (with or without advance notice to the Company), (ii) obligates Executive to inform the Company before or after making such a report, (iii) prohibits Executive from cooperating in an investigation conducted by a law-enforcement or government agency, (iv) prohibits Executive from disclosing information about unlawful acts in the workplace, such as unlawful harassment or discrimination or any other conduct that Executive has reason to believe is unlawful, or (v) prohibits Executive from engaging in conduct required or allowed by law.

g.The provisions of this Section 9 shall survive the termination of Executive's employment for any reason.

10.Specific Performance. Executive acknowledges and agrees that the Employer's remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section 9 would be inadequate and the Employer would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Employer, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

11.Developments.

a. Executive will make full and prompt disclosure to the Employer of all inventions, discoveries, designs, developments, methods, processes, modifications, improvements, algorithms, databases, computer programs, formulae, techniques, trade secrets,

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graphics or images, audio or visual works, and other works of authorship (collectively "Developments"), whether or not patentable or copyrightable, created, made, conceived or reduced to practice by the Executive (alone or jointly with others) or under the Executive's direction during the Executive's employment with Employer (whether under this Agreement or any other prior or subsequent employment with Employer).

b.Executive hereby assigns and transfers to Employer, its successors and assigns, all of the Executive's right, title and interest in all Developments that (1) relate to the business of Employer or any of the products or services being researched, developed, manufactured, marketed, provided or sold by Employer or which may be used with such products or services; or (ii) result from tasks assigned or delegated to the Executive by Employer; or (iii) result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by Employer, and all related patents, patent applications, trademarks and trademark applications, copyrights and copyright applications, and other intellectual property rights in all countries and territories worldwide and under any international conventions, treaties, protocols, or agreements ("Intellectual Property Rights")

c.Executive agrees that both during and after Executive's employment with Employer that Executive will sign any documents or provide any information necessary for the Company to protect its rights in the Developments. If Executive is unavailable to sign any document that is necessary for Employer to protect its rights to such Intellectual Property, Executive hereby authorizes Employer to sign on Executive's behalf. If the Executive wishes to assert or clarify that something created by Executive prior to the Executive's employment with Employer that relates to Employer's actual or proposed business is not within the scope of the foregoing assignment, the Executive shall notify Employer thereof in writing contemporaneously with signing this Agreement. Notwithstanding the foregoing, any Developments or Intellectual Property Rights specified on Exhibit A to this Agreement shall be excluded from the requirements of this Section 11 and shall not be assigned to Employer.

12. Arbitration. Except as provided in Section 10, or prohibited by applicable law, disputes arising out of or asserting breach of this Agreement, or any statutory or common law claim by Executive relating to Executive's employment under this Agreement or the termination thereof (including any tort or discrimination claim), shall be goverened by this Section 12. The party invoking Section 12 (the "Moving Party") shall provide the other party (the "Non-Moving Party") with notice of a dispute ("Notice of Dispute"), setting forth the nature of the dispute within fifty (50) calendar days after a claim has arisen (the "Notice Period"). Any Claim not brought within the Notice Period is waived. The parties agree to make a good faith effort to resolve the dispute prior to arbitration. In the event the dispute is not resolved within fifty (50) calendar days of receipt of the Notice of Dispute by the Non-Moving Party, the parties will attempt to agree on a neutral arbitrator. In the event the parties are not able to reach agreement on a neutral arbitrator within sixty (60) calendar days of receipt of the Notice of Dispute by the Non-Moving Party, the dispute shall be resolved in accordance with the Employment Arbitration Rules of the American Arbitration Association ("AAA"), provided the Moving Party submits the dispute to the AAA within seventy (70) calendar days of receipt of the Notice of Dispute by the Non-Moving Party. Such arbitration process shall take place within 100 miles of the Detroit, Michigan metropolitan area. In the event the last day of any time period set forth above falls on a holiday or weekend, the last day will fall on the first business day thereafter.

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The decision of the arbitrator shall be final, conclusive, and binding on the parties to the arbitration. A court of competent jurisdiction may enter judgment upon the arbitrator's award. In any arbitration proceeding, the arbitrator shall have the authority to compel adequate discovery for the resolution of the dispute, hear motions, apply the same substantive law that would apply if the claims were brought in a court of law, and to award such relief as would otherwise be available under applicable law in a court proceeding. Each party shall pay for its own costs and attorneys' fees, if any. However, if either party prevails on a statutory claim that affords attorneys' fees to the prevailing party, the arbitrator may award reasonable fees to the prevailing party in accordance with applicable law. BY AGREEING TO THIS ARBITRATION PROCEDURE, EXECUTIVE AND COMPANY AGREE THAT THIS ARBITRATION PROCEDURE SHALL BE THE EXCLUSIVE MEANS OF REDRESS WITH RESPECT TO DISPUTES GOVERENED BY THIS SECTION 12, AND HEREBY WAIVE ANY RIGHTS EITHER MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.

13.Return of Company Property. Upon expiration of the Agreement, termination of Executive's employment, or at any other time requested by the Company, Executive shall return all Company property, including, without limitation, keys, key cards, access cards, identification cards, security devices, Company credit cards, network access devices, all passwords or passcodes necessary to enable the Company to access all information which Executive password or passcode protected on any of the Company's equipment, network or systems, cell phones, smart phones, PDAs, pagers, fax machines, equipment, speakers, webcams, documents, reports, memoranda, files, manuals, computer equipment, programs, software and discs, and all other items which are the property of the Company.

14.Miscellaneous.

a Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to conflicts of laws principles thereof.

b.Entire Agreement/Amendments. Except with respect to the matters contained in the Equity Documents, this Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Employer There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

c.No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party's rights, or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

d.Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable whether in whole or in part under any applicable law or rule, such invalidity, illegality, or unenforceability shall not affect any other

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provision, but this Agreement shall be reformed and construed so as to render it enforceable under applicable law insofar as possible consistent with the intent of the parties.

e.Assignment. This Agreement, and all of Executive's rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Employer to a person or entity that is an affiliate or a successor in interest to substantially all of the business operations of the Employer. Upon such assignment, the rights and obligations of the Employer hereunder shall become the rights and obligations of such affiliate or successor person or entity.

f.Set Off; No Mitigation. The Employer's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Employer or its affiliates; provided, that no such set-off in excess of $5,000 shall be made against any amount payable to Executive pursuant to Sections 7(c)(iii)(2) or (3) hereof (or any other amount that constitutes a payment under a "nonqualified deferred compensation plan" within the meaning of Code Section 409A). Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment or otherwise and the amount of any payment provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Executive's other employment or otherwise.

g.Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company, its subsidiaries and affiliates, and the Executive and any personal or legal representatives, executors, administrators, successors, assigns, heirs, distributees, devisees and legatees. Further, the Company will require any successor (whether, direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place As used in this Agreement, "Company" shall mean the Company and any successor to its business and/or assets which is required by this Section 14(g) to assume and agree to perform this Agreement or which otherwise assumes and agrees to perform this Agreement; provided, however, in the event that any successor, as described above, agrees to assume this Agreement in accordance with the preceding sentence, as of the date such successor so assumes this Agreement, the Company shall cease to be liable for any of the obligations contained in this Agreement.

h.Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three (3) business days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

If to the Employer:
ITC Holdings Corp.

4860-8859-8221 2 15

27175 Energy Way

Novi, Michigan 48377

Attention: General Counsel

With a copy to•

Dykema Gossett PLLC

Capitol View

201 Townsend Street, Suite 900

Lansing, Michigan 48933

Attention: Richard J. Aaron, Esq.

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Employer.

i.Executive Representation. Executive hereby represents to the Employer that the execution and delivery of this Agreement by Executive and the Employer and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

j.Prior Agreements. This Agreement supercedes all prior agreements and understandings (including, without limitation, any verbal agreements, offer letters or summaries of principal terms pertaining to the employment of Executive by the Employer) between Executive and the Employer and/or its affiliates regarding the terms and conditions of Executive's employment with the Employer and/or its affiliates; provided, however, that the Equity Documents shall govern the terms and conditions of Executive's equity holdings in the Company.

k.Cooperation. During and after Executive's employment, Executive shall provide Executive's reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during Executive's employment hereunder, now in existence or which may arise or be brought in the future against or on behalf of Employer. The Executive's full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery, court or administrtive hearings or procedings, or trial and to act as a witness on behalf of Employer at mutually convenient times. Executive shall also cooperate with Employer in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired during Executive's employment Employer shall reimburse the Executive at a rate of two hundred dollars and no/100 U.S. Dollars ($200.00) per hour to the extent such cooperation is needed after Executive is no longer employed and reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with Executive's performance of obligations under this Section. This provision shall survive any termination of this Agreement.

4860-8859-8221 2 16

1. Taxes.

i.Withholding Taxes. The Employer may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation, with respect to any compensation or benefits payable or provided to Executive by Employer pursuant to this Agreement or any other plan, arrangement or agreement with the Employer.

ii.409A Compliance and Penalties. All payments under this Agreement are intended to be exempt from or in compliance with Code Section 409A, and the provisions of this Agreement are to be construed and administered accordingly. Further, for all purposes under this Agreement: (A) references to "termination" of employment (or variations thereof), shall be synonymous with the meaning given to the term "separation from service" as provided under Code Section 409A, and IRS guidance issued thereunder; (B) no payment, reimbursement or benefit provided to Executive in one calendar year hereunder shall affect the provision of any such payment, reimbursement or benefit in any other calendar year; and (C) the timing of payments and the provision of benefits under this Agreement that are contingent on Executive executing and not revoking the Release as provided in Section 7(f), are intended to satisfy the requirements of IRS Notices 2010-6 and 2010-80 ; and (D) each installment payment provided hereunder is intended to be treated as a separate payment for Code Section 409A purposes.

Notwithstanding any other provision of this Agreement (other than Section 14(1)(iii) below), while Executive acknowledges that Employer may take actions hereunder as are required to comply with or to minimize any potential interest charges and/or additional taxes as may be imposed by Code Section 409A (the "409A Penalties") with respect to any payment or benefit due to Executive under this Agreement (including a delay in payment until the first business day following the end of the 409A Period, in the event Executive is a "specified employee" within the meaning of Code Section 409A, as described in and consistent with the provisions of Section 7(c)(iii)), the parties hereby confirm that all such payments and benefits due to Executive will in fact be made or provided (except as provided in Section 14(1)(iii) below) at the earliest time at which it is determined either that no 409A Penalties are applicable, or that such 409A Penalties will apply without exception. Further, if at any time it is determined that any payment or benefit due to Executive under this Agreement may be subject to any 409A Penalties, the Employer shall (D) be permitted to modify the provision of such payment or benefit if such modification would reasonably be expected to eliminate or minimize such 409A Penalties, so long as such modification does not adversely affect, in any material respect, the economic benefit to

Executive of such payment or benefit (or otherwise result in additional 409A Penalties), or (E) to the extent that the course of action proposed in clause (D) cannot be effected, within fifteen (15) calendar days after the date of such determination (but no later than the end of the calendar year following the year in which the Executive remits the 409A Penalties involved; or such other earliest date on which such amount can be paid as may be permitted under Code Section 409A) pay to Executive an additional amount equal to such 409A Penalties, along with such additional amount as is required to pay any income and/or payroll taxes due on the 409A Penalties and the additional tax gross-up payment (as determined by the Employer's independent accountants, assuming that the Executive pays income taxes at the highest applicable marginal rates for the calendar year in which the tax gross-up payment is to be made).

4860-8859-8221 2 17

iii. Parachute Taxes. hz the event that the Executive shall become entitled to payments and/or benefits provided by this Agreement or any other amounts in the "nature of compensation" (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Employer, any person whose actions result in a change of ownership or effective control covered by Code Section 280G(b)(2) or any person affiliated with any Employer or such person) as a result of such change in ownership or effective control (collectively the "Employer Payments"), and such Employer Payments would be subject to the tax (the "Excise Tax") imposed by Code Section 4999 (and any similar tax that may hereafter be imposed by any taxing authority), then notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement with the Employer, the Employer shall pay and/or provide to the Executive only that portion of the Employer Payments which are in total equal to one dollar less than the amount of the Employer Payments that would subject the Executive to the Excise Tax. If the Employer Payments must be reduced pursuant to the preceding sentence, Employer Payments shall be reduced in the following order: (A) any amounts payable to the Executive pursuant to Section 7(c)(iii)(2); (B) any other cash amounts payable to the Executive;

(C)the value as parachute payments of the acceleration of vesting of any stock options; (D) the value as parachute payments of the acceleration of vesting of any restricted stock; (E) the value as parachute payments of the acceleration of vesting of any equity interest not covered by (C) or

(D)above; and (F) the value as parachute payments of any other benefits received

The Employer's independent accountants, at the Employer's expense, shall determine whether any of the Employer Payments are "parachute payments" within the meaning of Code Section 280G(b)(2) that would be subject to the Excise Tax, the projected amount of such Excise Tax and any other determinations required in the preceding paragraph The determination of the accountants shall be final and binding upon the Employer and the Executive; provided, that in the event any initial determination under this subsection is subsequently modified by the Employer's accountants or the IRS, Executive and Employer agree to reasonably cooperate to resolve any matter related thereto.

In all cases, Executive shall be solely responsible for timely payment of any Excise Tax finally determined by the IRS to be due and payable with respect to the Employer Payments (as reduced, if applicable). Executive shall also promptly deliver to the Company copies of any written communications, and summaries of any verbal communications, with any taxing authority regarding the Excise Tax covered by this subsection.

m Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

n. Definition of "Change in Control." For purposes of this Agreement, "Change in Control" means the occurrence of any of the following events:

i. If any one person, or more than one person acting as a group (as defined in Code Section 409A and IRS guidance issued thereunder), acquires ownership of common stock of the Company that, together with stock held by such person or group,

constitutes more than fifty (50) percent of the total fair market value or total voting power of the common stock of the Company However, if any one person or more than one person acting as a group, is considered to own more than fifty (50) percent of the total fair market value or total

4860-8859-8221 2 18

voting power of the common stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control, or to cause a change in the effective control of the Company (within the meaning of Code Section 409A and IRS guidance issued thereunder). An increase in the percentage of common stock of the Company owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property shall be treated as an acquisition of stock for purposes of this subsection. This paragraph applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

ii.If any one person, or more than one person acting as a group (as determined in accordance with Code Section 409A and IRS guidance thereunder), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of common stock of the Company possessing thirty-five (35) percent or more of the total voting power of the common stock of the Company;

iii.If a majority of members on the Company's Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company's Board prior to the date of the appointment or election (provided that for purposes of this paragraph, the term Company refers solely to the "relevant corporation," as defined in Code Section 409A and IRS guidance issued thereunder, for which no other corporation is a majority shareholder); or

iv.If there is a change in the ownership of a substantial portion of the Company's assets, which shall occur on the date that any one person, or more than one person acting as a group (within the meaning of Code Section 409A and IRS guidance issued thereunder) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty (40) percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of this 17 day of July , 2024 , effective as of July 17 , 2024 .

ITC HOLDINGS CORP.: EXECUTIVE:

By: /s/ Matthew A. Dills /s/ Krista Tanner

Name: Krista Tanner

Print Name: Matthew A. Dills

Its: CHRO


4860-8859-8221.2			19

EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

I have intellectual property rights in the following inventions, original works of authorship, or other work products related to the activities of the ITC Holdings Corp. (the "Company") that were created prior to my employment by the Company that I do not assign to the Company (if none, please write "None"):

(Please note: It is in your interest to establish that any such inventions, expressions of or other work products were made before your employment by the Company. You should not disclose such rights, inventions or work products in detail, but should identify them only by the titles and dates of documents describing them.)

Identifying Number

Title Date or Brief
Description

X No inventions or improvements

Additional Sheets Attached

Date: July 17, 2024

Signature of Executive: /s/ Krista Tanner

Executive: Krista Tanner

4860-8859-8221.2

July 30, 2024

Ms. Gretchen Holloway

Senior Vice President and Chief Financial Officer

ITC Holdings Corp.

VIA ELECTRONIC DELIVERY

Dear Gretchen:

ITC Holdings Corp. (the “Company”) recognizes your dedication and hard work on behalf of the Company and your importance to ensuring the continuing success of the Company. In recognition of your many contributions, the Company is granting a special retention grant (your “Retention Grant”) to be awarded on August 1, 2024 (the “Grant Date”), subject to your execution of this retention letter.

Your Retention Grant will consist of Fortis Inc. restricted share units with an aggregate value of approximately $600,000 of which fifty percent (50%) will vest on the third anniversary of the Grant Date and fifty percent (50%) will vest on the fourth anniversary of the Grant Date, subject to your continued employment in good standing with the Company or affiliate or, to the extent allowed by the applicable award agreements or plan documents, through each applicable vesting date. Specific terms and conditions will be defined in the award agreement and subject to the Fortis Inc. Omnibus Equity Plan.

Your Retention Grant set out in this letter is discretionary in nature and does not create any contractual or other right to future payments that are equivalent or similar to such award, and it does not create any contractual or other right to future employment. Your Retention Grant and any payment thereunder will be in addition to your ordinary compensation and any other benefits for which you may be eligible in connection with your employment.

Please note that your Retention Grant remains subject to your acceptance of the award agreement. If you do not agree to sign the award agreement, this letter will automatically be null and void ab initio and be of no further force or effect.

By signing this letter, you acknowledge that: (1) you have been advised to consult with an attorney and have had adequate time to do so; (2) you are not relying on any representations,

Ms. Gretchen Holloway

July 30, 2024

Page 2

promises or agreements not contained herein; and (3) the terms of the letter may not be altered, modified, or amended except by written instrument signed by the parties.

We very much look forward to your continuing employment with the Company. Should you have any further questions or need clarification on the terms of this letter, please discuss with me directly at your earliest convenience. In order to be eligible to receive your Retention Grant, you must sign this retention letter and return it to me by July 31, 2024, by scanning your executed letter and sending it to me via electronic mail by that date and then either hand deliver or mail the original signed letter to me at the Company’s Novi, Michigan address.


			Sincerely, /s/ Christine Mason Soneral Name: Christine Mason Soneral Title: SVP, General Counsel and Chief Compliance Officer
AGREED AND ACCEPTED BY: /s/ Gretchen L. Holloway Gretchen Holloway

4881-8341-2942.3

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Linda H. Apsey, certify that:

1.I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2024 of ITC Holdings Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 4, 2024




/s/ Linda H. Apsey
Linda H. Apsey Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gretchen L. Holloway, certify that:

1.I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2024 of ITC Holdings Corp.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 4, 2024




/s/ Gretchen L. Holloway
Gretchen L. Holloway Senior Vice President and Chief Financial Officer

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ITC Holdings Corp. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Linda H. Apsey, Chief Executive Officer of the Registrant, and Gretchen L. Holloway, Senior Vice President and Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: November 4, 2024




/s/ Linda H. Apsey
Linda H. Apsey Chief Executive Officer


/s/ Gretchen L. Holloway
Gretchen L. Holloway Senior Vice President and Chief Financial Officer