Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Transition Report | false | |
Entity File Number | 001-32576 | |
Entity Registrant Name | ITC HOLDINGS CORP. | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 32-0058047 | |
Entity Address, Address Line One | 27175 Energy Way | |
Entity Address, City or Town | Novi | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48377 | |
City Area Code | 248 | |
Local Phone Number | 946-3000 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Central Index Key | 0001317630 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Common Stock, Shares Outstanding | true | |
Amendment Flag | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 224,203,112 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 3 | $ 6 |
Accounts receivable | 133 | 102 |
Inventory | 32 | 32 |
Regulatory assets | 12 | 12 |
Income tax receivable | 0 | 1 |
Prepaid and other current assets | 12 | 11 |
Total current assets | 192 | 164 |
Property, plant and equipment (net of accumulated depreciation and amortization of $1,850 and $1,779, respectively) | 8,232 | 7,910 |
Other assets | ||
Goodwill | 950 | 950 |
Intangible assets (net of accumulated amortization of $40 and $39, respectively) | 35 | 38 |
Regulatory assets | 247 | 200 |
Other assets | 74 | 67 |
Total other assets | 1,306 | 1,255 |
TOTAL ASSETS | 9,730 | 9,329 |
Current liabilities | ||
Accounts payable | 121 | 106 |
Accrued compensation | 37 | 30 |
Accrued interest | 59 | 50 |
Accrued taxes | 67 | 64 |
Regulatory liabilities | 193 | 178 |
Refundable deposits and advances for construction | 18 | 33 |
Debt maturing within one year | 184 | 0 |
Other current liabilities | 9 | 11 |
Total current liabilities | 688 | 472 |
Accrued pension and postretirement liabilities | 68 | 68 |
Deferred income taxes | 784 | 721 |
Regulatory liabilities | 621 | 640 |
Refundable deposits | 18 | 13 |
Other liabilities | 32 | 26 |
Long-term debt | 5,441 | 5,338 |
Commitments and contingent liabilities (Notes 5 and 14) | ||
STOCKHOLDER’S EQUITY | ||
Common stock, without par value, 235,000,000 shares authorized, 224,203,112 shares issued and outstanding at June 30, 2019 and December 31, 2018 | 892 | 892 |
Retained earnings | 1,181 | 1,155 |
Accumulated other comprehensive income | 5 | 4 |
Total stockholder’s equity | 2,078 | 2,051 |
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ 9,730 | $ 9,329 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Property, plant and equipment, accumulated depreciation and amortization | $ 1,850 | $ 1,779 |
Intangible assets, accumulated amortization | $ 40 | $ 39 |
Common stock, without par value | $ 0 | $ 0 |
Common stock, shares authorized | 235,000,000 | 235,000,000 |
Common stock, shares issued | 224,203,112 | 224,203,112 |
Common stock, shares outstanding | 224,203,112 | 224,203,112 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2019 | |||
OPERATING REVENUES | ||||
Transmission and other services | $ 288 | $ 311 | $ 577 | $ 582 |
Formula rate true-up | 32 | (21) | 50 | (13) |
Total operating revenues | 320 | 290 | 627 | 569 |
OPERATING EXPENSES | ||||
Operation and maintenance | 32 | 28 | 57 | 51 |
General and administrative | 38 | 28 | 76 | 59 |
Depreciation and amortization | 51 | 44 | 98 | 88 |
Taxes other than income taxes | 28 | 28 | 59 | 55 |
Other operating (income) and expenses, net | 0 | 1 | 0 | 1 |
Total operating expenses | 149 | 127 | 290 | 252 |
OPERATING INCOME | 171 | 163 | 337 | 317 |
OTHER EXPENSES (INCOME) | ||||
Interest expense, net | 64 | 56 | 123 | 111 |
Allowance for equity funds used during construction | (8) | (9) | (16) | (18) |
Other (income) and expenses, net | 1 | (2) | 1 | (2) |
Total other expenses (income) | 55 | 49 | 106 | 95 |
INCOME BEFORE INCOME TAXES | 116 | 114 | 231 | 222 |
INCOME TAX PROVISION | 29 | 35 | 60 | 61 |
NET INCOME | 87 | 79 | 171 | 161 |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (1) | (1) | (1) | 2 |
Total other comprehensive income, net of tax | 1 | 1 | 1 | 2 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 88 | $ 80 | $ 172 | $ 163 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total other expenses (income) | $ (55) | $ (49) | $ (106) | $ (95) | ||
Total operating expenses | 149 | 127 | 290 | 252 | ||
NET INCOME | 87 | $ 84 | 79 | $ 82 | 171 | 161 |
OTHER COMPREHENSIVE INCOME | ||||||
Derivative instruments, net of tax (Note 11) | 1 | 1 | 1 | 2 | ||
TOTAL COMPREHENSIVE INCOME | $ 88 | $ 80 | $ 172 | $ 163 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | Common Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Stockholders' Equity Attributable to Parent | $ 1,920 | $ 892 | $ 1,026 | $ 2 |
Opening balance adjustment | Accounting Standards Update 2018-02 [Member] | (1) | 1 | ||
NET INCOME | 82 | 82 | ||
Dividends to ITC Investment Holdings Inc. | (50) | (50) | ||
Opening balance adjustment | Accounting Standards Update 2018-02 [Member] | (1) | |||
NET INCOME | 161 | |||
Dividends to ITC Investment Holdings Inc. | (100) | |||
Total other comprehensive income, net of tax | 2 | |||
Stockholders' Equity Attributable to Parent | 1,952 | 892 | 1,057 | 3 |
Opening balance adjustment | Accounting Standards Update 2018-02 [Member] | 0 | |||
NET INCOME | 79 | 79 | ||
Dividends to ITC Investment Holdings Inc. | (50) | (50) | ||
Total other comprehensive income, net of tax | 1 | 1 | ||
Stockholders' Equity Attributable to Parent | 1,982 | 892 | 1,086 | 4 |
Stockholders' Equity Attributable to Parent | 2,051 | 892 | 1,155 | 4 |
NET INCOME | 84 | 84 | ||
Dividends to ITC Investment Holdings Inc. | (72) | 72 | ||
NET INCOME | 171 | |||
Dividends to ITC Investment Holdings Inc. | (145) | |||
Total other comprehensive income, net of tax | 1 | |||
Stockholders' Equity Attributable to Parent | 2,063 | 892 | 1,167 | 4 |
NET INCOME | 87 | 87 | ||
Dividends to ITC Investment Holdings Inc. | (73) | (73) | ||
Total other comprehensive income, net of tax | 1 | 1 | ||
Stockholders' Equity Attributable to Parent | $ 2,078 | $ 892 | $ 1,181 | $ 5 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
NET INCOME | $ 171 | $ 161 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 98 | 88 |
Recognition, refund and collection of revenue accruals and deferrals — including accrued interest | (56) | 3 |
Deferred income tax expense | 59 | 61 |
Allowance for equity funds used during construction | (16) | (18) |
Other | 19 | 4 |
Changes in assets and liabilities, exclusive of changes shown separately: | ||
Accounts receivable | (28) | (19) |
Income tax receivable | 1 | 13 |
Accounts payable | 1 | 1 |
Accrued compensation | 0 | (7) |
Accrued interest | 9 | (25) |
Accrued taxes | 3 | 3 |
Other current and non-current assets and liabilities, net | 0 | 9 |
Net cash provided by operating activities | 261 | 274 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Expenditures for property, plant and equipment | (403) | (365) |
Contributions in aid of construction | 1 | 17 |
Other | 1 | (1) |
Net cash used in investing activities | (401) | (349) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of long-term debt | 50 | 225 |
Borrowings under revolving credit agreements | 501 | 368 |
Borrowings under term loan credit agreements | 200 | 0 |
Net issuance of commercial paper, net of discount | 184 | 13 |
Retirement of long-term debt — including extinguishment of debt costs | (203) | (100) |
Repayments of revolving credit agreements | (451) | (333) |
Repayment of term loan credit agreement | 0 | 50 |
Dividends to ITC Investment Holdings Inc. | (145) | (100) |
Other | (1) | (2) |
Net cash provided by financing activities | 135 | 21 |
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (5) | (54) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 10 | 68 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | $ 5 | $ 14 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | GENERAL ITC Holdings and its subsidiaries are engaged in the transmission of electricity in the United States. Through our Regulated Operating Subsidiaries, we own and operate high-voltage systems in Michigan’s Lower Peninsula and portions of Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma that transmit electricity from generating stations to local distribution facilities connected to our systems. ITC Holdings is a wholly-owned subsidiary of Investment Holdings. 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, 2018 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. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Pronouncements Accounting for Leases Effective January 1, 2019, we adopted accounting guidance that requires lessees to recognize a right-of-use asset and lease liability for most leases, along with additional quantitative and qualitative disclosures. We elected to apply transition relief which permitted us to adopt the new guidance on a modified retrospective basis at the adoption date (i.e., January 1, 2019) as opposed to at the beginning of the earliest period presented in the financial statements (i.e., January 1, 2017). Therefore, while we began applying the new guidance as of January 1, 2019, prior period comparative financial statements and disclosures will continue to be presented under previous lease accounting guidance. In connection with our adoption of the new guidance, we elected various practical expedients and made certain accounting policy elections, including: • a “package of three” practical expedients that must be taken together and allows us to not reassess: • whether any expired or existing contract is a lease or contains a lease, • the lease classification of any expired or existing leases, and • the initial direct costs for any existing leases; • a practical expedient that permits entities to not evaluate existing land easements at adoption that were not previously accounted for as leases; and • an accounting policy election to not apply the recognition requirements to short-term leases (i.e., leases with terms of 12 months or less). Our leasing activities primarily relate to office facilities, but we also have limited leasing activity relating to equipment and storage facilities. As of January 1, 2019, adoption of the guidance resulted in recognition of right-of-use lease assets of $3 million , current lease liabilities of $1 million , and non-current lease liabilities of $2 million . The adoption of this guidance did not have any impact on retained earnings or net income. We also added disclosures as a result of our adoption of the guidance; refer to Note 7 for more information on our leasing activities. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued authoritative guidance to make targeted improvements to hedge accounting to better align with an entity’s risk management objectives and to reduce the complexity of hedge accounting. Among other changes, the new guidance simplifies hedge accounting by (a) allowing more time for entities to complete initial quantitative hedge effectiveness assessments, (b) enabling entities to elect to perform subsequent effectiveness assessments qualitatively, (c) eliminating the concept of recognizing periodic hedge ineffectiveness for cash flow hedges, (d) requiring the change in fair value of a derivative to be recorded in the same consolidated statements of comprehensive income line item as the earnings effect of the hedged item, and (e) permitting additional hedge strategies to qualify for hedge accounting. In addition, the guidance modifies existing disclosure requirements and adds new disclosure requirements. We adopted the guidance as of January 1, 2019; however adoption of the accounting standard did not have a material impact on our financial statements or disclosures. Recently Issued Pronouncements We have considered all new accounting pronouncements issued by the FASB and concluded the following accounting guidance, which has not yet been adopted by us, may, subject to further evaluation, have a material impact on our consolidated financial statements. Pension and Other Postretirement Plan Disclosures In August 2018, the FASB issued authoritative guidance modifying the disclosure requirements for defined benefit pension and other postretirement plans. The new guidance requires disclosures including (a) the weighted average interest credit rates used for cash balance pension plans, (b) a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period, and (c) an explanation of other significant changes in the benefit obligation or plan assets. In addition, the guidance removes currently required disclosures including, among others, the requirement for public entities to disclose the effects of a one-percentage-point change on the assumed health care costs and the effect of the change in rates on service cost, interest cost, and the benefit obligation for postretirement health care benefits. The new guidance, which is effective for fiscal years ending after December 15, 2020 with early adoption permitted, is required to be adopted on a retrospective basis. We plan to early adopt this guidance in the 2019 annual consolidated financial statements. Accounting for Cloud Computing Arrangements In August 2018, the FASB issued authoritative guidance to address the accounting for implementation costs incurred in a cloud computing agreement that is a service contract. The new standard aligns the accounting for implementation costs incurred in a cloud computing arrangement as a service contract with existing guidance on capitalizing costs associated with developing or obtaining internal-use software. In addition, the new guidance requires entities to expense capitalized implementation costs of a cloud computing arrangement that is a service contract over the term of the agreement and to present the expense in the same income statement line item as the hosting fees. The guidance is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We are still evaluating the impact of the new guidance on our financial statements, including disclosures, as well as whether to early adopt this guidance. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Our total revenues are comprised of revenues which arise from three classifications including transmission services, other services, and Formula Rate true-up. As other services revenue is immaterial, it is presented in combination with transmission services on the condensed consolidated statements of comprehensive income. 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. The transmission revenue requirements at our Regulated Operating Subsidiaries are set annually using Formula Rates 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 operating 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. 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. Other Services Other services revenue consists of rental revenues, easement revenues, and amounts from providing ancillary services. A portion of other services revenue is treated as a revenue credit and reduces gross revenue requirement when calculating net revenue requirement under our Formula Rates. Total other services revenue for the three months ended June 30, 2019 and 2018 were $1 million and $2 million , respectively. Total other services revenue for the six months ended June 30, 2019 and 2018 were $4 million and $3 million , respectively. 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 “Cost-based Formula Rates with True-Up Mechanism” in Note 5 for more information on our Formula Rates. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table presents the components of accounts receivable on the balance sheet: June 30, December 31, (in millions) 2019 2018 Trade accounts receivable $ 2 $ 2 Unbilled accounts receivable 120 92 Due from affiliates 1 1 Other 10 7 Total accounts receivable $ 133 $ 102 |
LEASES (Notes)
LEASES (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | LEASES We enter into operating leases where we are the lessee, primarily for office facilities, equipment, and storage facilities. When a contract contains a lease such that it conveys the right to control the use of an identified asset for a period of time in exchange for consideration, we measure the right-of-use assets and lease liabilities at the present value of future lease payments. We calculate the present value using our incremental borrowing rate, which is a secured interest rate based on the remaining lease term. Our lease payments are substantially all fixed and in some cases escalate according to schedule. Our office facility leases may have lease components and non-lease components which are accounted for as a single lease component. Leases with an initial term of twelve months or less are not recorded on the balance sheet. We recognize expenses related to our operating lease obligations on a straight-line basis over the term of the lease. Operating lease costs for the three and six months ended June 30, 2019 were less than $1 million . The following table shows the undiscounted future minimum lease payments under our operating leases at June 30, 2019 reconciled to the corresponding discounted lease liabilities presented in our condensed consolidated interim financial statements: Future Minimum Lease Payments (in millions) 2019 (excluding six months ended 6/30/2019) $ — 2020 1 2021 1 2022 — 2023 1 2024 and beyond — Total lease payments 3 Difference between undiscounted cash flows and discounted cash flows — Present value of lease liabilities 3 Less: Current operating lease liabilities (1 ) Noncurrent operating lease liabilities $ 2 Leases are presented in the condensed consolidated statements of financial position as follows: (in millions) Classification June 30, 2019 Operating Lease Assets Other assets $ 3 Current Operating Lease Liabilities Other current liabilities 1 Noncurrent Operating Lease Liabilities Other liabilities 2 Disclosures Related to Periods Prior to Adoption of the New Lease Guidance Operating lease costs for the three and six months ended June 30, 2018 were less than $1 million and $1 million , respectively. Undiscounted future minimum lease payments under the operating leases at December 31, 2018 were as follows: (in millions) 2019 $ 1 2020 1 2021 1 2022 — 2023 and thereafter 1 Total minimum lease payments $ 4 Supplementary Lease Information June 30, 2019 Weighted-average remaining lease term (years) 4.6 Weighted-average discount rate 4.6 % |
REGULATORY MATTERS
REGULATORY MATTERS | 6 Months Ended |
Jun. 30, 2019 | |
Regulated Operations [Abstract] | |
REGULATORY MATTERS | REGULATORY MATTERS Cost-Based Formula Rates with True-Up Mechanism The transmission revenue requirements at our Regulated Operating Subsidiaries are set annually using Formula Rates 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 “Rate of Return on Equity Complaints” in Note 14 for detail on ROE matters for our MISO Regulated Operating Subsidiaries and “Incentive Adders for Transmission Rates” discussed in Note 5 herein. 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. 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 six months ended June 30, 2019 : (in millions) Total Net regulatory liabilities as of December 31, 2018 $ (52 ) Net refund of 2017 revenue deferrals and accruals, including accrued interest 8 Net revenue accrual for the six months ended June 30, 2019 50 Net accrued interest payable for the six months ended June 30, 2019 (2 ) Net regulatory assets as of June 30, 2019 $ 4 Regulatory assets and liabilities associated with our Regulated Operating Subsidiaries’ Formula Rate revenue accruals and deferrals, including accrued interest, are recorded in the condensed consolidated statements of financial position at June 30, 2019 and December 31, 2018 as follows: June 30, December 31, (in millions) 2019 2018 Current regulatory assets $ 11 $ 12 Non-current regulatory assets 60 12 Current regulatory liabilities (38 ) (27 ) Non-current regulatory liabilities (29 ) (49 ) Net regulatory assets (liabilities) $ 4 $ (52 ) 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. MISO Regulated Operating Subsidiaries Effective for the period following the September 2016 Order, the authorized ROE used by ITCTransmission, METC and ITC Midwest were 11.35% , 11.35% , and 11.32% , respectively. These were inclusive of adders at ITCTransmission, METC and ITC Midwest of 150 basis points, 150 basis points and 100 basis points, respectively, subject to the maximum ROE limitation in the September 2016 Order of 11.35% . The adders at each of ITCTransmission and METC included a 100 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation. The adders at ITC Midwest included a 50 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation. On April 20, 2018, Consumers Energy, IP&L, Midwest Municipal Transmission Group, Missouri River Energy Services, Southern Minnesota Municipal Power Agency and WPPI Energy filed a complaint with the FERC under section 206 of the FPA, challenging the adders for independent transmission ownership that are included in transmission rates charged by the MISO Regulated Operating Subsidiaries. The adders for independent transmission ownership allowed up to 50 basis points or 100 basis points to be added to the MISO Regulated Operating Subsidiaries’ authorized ROE, subject to any ROE cap established by the FERC. On October 18, 2018, the FERC issued an order granting the complaint in part, setting revised adders for independent transmission ownership for each of the MISO Regulated Operating Subsidiaries to 25 basis points, and requiring the MISO Regulated Operating Subsidiaries to include the revised adders, effective April 20, 2018, in their Formula Rates. In addition, the order directed the MISO Regulated Operating Subsidiaries to provide refunds, with interest, for the period from April 20, 2018 through October 18, 2018. The MISO Regulated Operating Subsidiaries sought rehearing of the FERC’s October 18, 2018 order, and on July 18, 2019, FERC denied the rehearing request. The MISO Regulated Operating Subsidiaries began reflecting the 25 basis point adder for independent transmission ownership in transmission rates in November 2018. Refunds of $7 million were primarily made in the fourth quarter of 2018 and were completed in the first quarter of 2019. We do not expect the final resolution of this proceeding to have a material adverse impact on our consolidated results of operations, cash flows or financial condition. Based on the October 18, 2018 FERC order, the authorized ROE for the MISO Regulated Operating Subsidiaries has been revised to 11.07% ( 10.32% base ROE with a 25 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation). See Note 14 for information regarding the ROE complaints. ITC Great Plains On June 11, 2019, KCC filed a complaint with the FERC under section 206 of the FPA, challenging the ROE adder for independent transmission ownership that is included in the transmission rate charged by ITC Great Plains. The complaint argues that because ITC Great Plains is similarly situated to our MISO Regulated Operating Subsidiaries with respect to ownership by Fortis and GIC, the same rationale by which the FERC lowered the MISO Regulated Operating Subsidiaries adders for independent transmission ownership, as discussed above, also applies to ITC Great Plains. The adder for independent transmission ownership allows up to 100 basis points to be added to the ITC Great Plains authorized ROE, subject to any ROE cap established by the FERC. ITC Great Plains filed an answer to the complaint on July 1, 2019 asking FERC to deny the complaint since KCC showed no evidence that ITC Great Plains’ independence or the benefits it provides as an independent TO has been compromised or reduced as a result of the Fortis and GIC acquisition. We do not expect the resolution of this proceeding to have a material adverse impact on our consolidated results of operations, cash flows or financial position. The authorized ROE used by ITC Great Plains is 12.16% and is composed of a base ROE of 10.66% with a 100 basis point adder for independent transmission ownership and a 50 basis point adder for RTO participation. Calculation of Accumulated Deferred Income Tax Balances in Projected Formula Rates On June 21, 2018, the FERC issued an order initiating a proceeding and paper hearings, pursuant to Section 206 of the FPA, to examine the methodology used by a group of TOs, including ITCTransmission and ITC Midwest, for calculating balances of ADIT in forward-looking Formula Rates. The order is based on a previous FERC decision for another group of TOs in which the FERC concluded that the two-step averaging methodology for ADIT is no longer necessary to comply with IRS normalization rules in light of IRS guidance issued in 2017. On August 27, 2018, ITCTransmission and ITC Midwest, along with other MISO TOs, filed an initial brief in the paper hearing proceeding. In addition, on August 27, 2018, our MISO Regulated Operating Subsidiaries submitted a filing with the FERC under Section 205 of the FPA to eliminate the use of the two-step averaging methodology in the calculation of ADIT balances for the projected test year and also to modify the manner by which they calculate average ADIT balances in their annual transmission Formula Rate true-up calculation, subject to receiving guidance from the IRS to respond to the FERC order. On December 20, 2018, the FERC issued an order that (1) indicated that it did not believe it was necessary for the MISO Regulated Operating Subsidiaries to delay implementation of the template changes pending IRS approval, (2) ordered ITCTransmission and ITC Midwest to make a compliance filing to implement the changes and (3) formally instituted a proceeding against METC pursuant to Section 206 of the FPA to implement the changes. On May 16, 2019, the FERC issued an order accepting in part and rejecting in part ITCTransmission’s and ITC Midwest’s January 22, 2019 compliance filing and ordered us to make another compliance filing within 30 days of the date of the order. Specifically, the FERC accepted the portion of our compliance filing that removed the two-step averaging methodology, but rejected our compliance filing insofar as it carried proration to our true up because the FERC found that was beyond the scope of its previous orders in the docket. Additionally, on May 16, 2019, the FERC issued an order rejecting the January 22, 2019 METC 205 filing and ordered us to make a compliance filing in the 206 proceeding within 30 days of the date of the order. The FERC rejected the 205 filing because the FERC found that we had impermissibly requested a retroactive effective date of January 1, 2019. The FERC noted in the order that our compliance filing should only remove the two-step averaging methodology and should not carry proration to our true up. On June 17, 2019, our MISO Regulated Operating Subsidiaries made compliance filings consistent with the FERC orders. Additionally, on April 10, 2019, our MISO Regulated Operating Subsidiaries received formal guidance from the IRS, which we believe is consistent with the filings that we have made to date in these proceedings. We do not expect the resolution of these proceedings to have a material adverse impact on our consolidated results of operations, cash flows or financial condition. Rate of Return on Equity Complaints See “Rate of Return on Equity Complaints” in Note 14 for a discussion of the ROE complaints. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill At June 30, 2019 and December 31, 2018 , we had goodwill balances recorded at ITCTransmission, METC and ITC Midwest of $173 million , $454 million and $323 million , respectively, which resulted from the ITCTransmission and METC acquisitions and ITC Midwest’s acquisition of the IP&L transmission assets, respectively. Intangible Assets We have recorded intangible assets as a result of the METC acquisition in 2006. The carrying value of these assets was $21 million and $22 million (net of accumulated amortization of $38 million and $37 million ) as of June 30, 2019 and December 31, 2018 , respectively. We have also recorded intangible assets for payments made by and obligations of ITC Great Plains to certain TOs to acquire rights, which are required under the SPP tariff to designate ITC Great Plains to build, own and operate projects within the SPP region, including regional cost sharing projects in Kansas. The carrying amount of these intangible assets was $14 million (net of accumulated amortization of $2 million ) at both June 30, 2019 and December 31, 2018 . We recognized less than $1 million and $1 million of amortization expense of our intangible assets during the three months ended June 30, 2019 and 2018 , respectively, and recognized $1 million and $2 million of amortization expense of our intangible assets during the six months ended June 30, 2019 and 2018 , respectively. For the balance of intangible assets recorded as of June 30, 2019 , we expect the annual amortization of these assets to be $3 million per year for each of the next five years. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT ITC Holdings Term Loan Credit Agreement On June 12, 2019, ITC Holdings entered into an unsecured, unguaranteed $400 million term loan credit agreement with a maturity date of June 11, 2021, under which ITC Holdings borrowed $200 million . The proceeds were used for the early redemption of the $200 million 5.50% Senior Notes due January 15, 2020. ITC Holdings has the ability to draw upon the remaining $200 million under the term loan credit agreement by March 12, 2020. The weighted-average interest rate on the borrowing outstanding under this agreement was 3.1% at June 30, 2019 . 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. As of June 30, 2019 , ITC Holdings had $184 million of commercial paper issued and outstanding under the program, with a weighted-average interest rate of 2.7% and weighted average remaining days to maturity of 9 days . The amount outstanding as of June 30, 2019 was classified as debt maturing within one year in the condensed consolidated statements of financial position. As of December 31, 2018 , ITC Holdings did not have any commercial paper outstanding. METC Senior Secured Notes On January 15, 2019, METC issued $50 million of 4.55% Senior Secured Notes, due January 15, 2049. On July 10, 2019, METC issued an additional $50 million of Senior Secured Notes at 4.65% with terms and conditions identical to those of the 4.55% Senior Secured Notes, except the interest rate which includes a 10 basis point premium and the due date which is 30 years from the date of the issuance. The proceeds from both issuances will be used to repay borrowings under the METC 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. Derivative Instruments and Hedging Activities We may use derivative financial instruments, including interest rate swap contracts, to manage our exposure to fluctuations in interest rates. The use of these financial instruments mitigates exposure to these risks and the variability of our operating results. We are not a party to leveraged derivatives and do not enter into derivative financial instruments for trading or speculative purposes. At June 30, 2019 , ITC Holdings did not have any interest rate swaps outstanding. On July 25, 2019, ITC Holdings entered into a 5-year forward starting interest rate swap agreement with a notional amount of $50 million . The interest rate swap manages interest rate risk associated with the refinancing of the $400 million term loan at ITC Holdings with a maturity date of June 11, 2021. As of June 30, 2019 , ITC Holdings had $200 million outstanding under the term loan described above. The 5-year term interest rate swap calls for ITC Holdings to receive interest quarterly at a variable rate equal to LIBOR and to pay interest semi-annually at a fixed rate of 1.816% effective for the 5-year period beginning November 15, 2020. The agreement includes a mandatory early termination provision and will be terminated no later than the effective date of the interest rate swap of November 15, 2020. The interest rate swap is expected to be highly effective at offsetting changes in the fair value of the forecasted interest cash flows associated with the debt issuance, resulting from changes in benchmark interest rates from the trade date of the interest rate swaps to the issuance date of the debt obligation. The interest rate swap is expected to qualify for cash flow hedge accounting treatment, whereby any gain or loss recognized from the trade date to the effective date is recorded net of tax in AOCI. This amount will be accumulated and amortized as a component of interest expense over the life of the forecasted debt. The interest rate swap does not contain credit-risk-related contingent features. Revolving Credit Agreements At June 30, 2019 , ITC Holdings and certain of its Regulated Operating Subsidiaries had the following unsecured revolving credit facilities available: (in millions) Total Capacity Outstanding Balance (a) Unused Capacity Weighted Average Interest Rate on Outstanding Balance (b) Commitment Fee Rate (c) ITC Holdings $ 400 $ — $ 400 (d) 0.175 % ITCTransmission 100 76 24 3.4% 0.10 % METC 100 58 42 3.4% 0.10 % ITC Midwest 225 88 137 3.4% 0.10 % ITC Great Plains 75 37 38 3.4% 0.10 % Total $ 900 $ 259 $ 641 ____________________________ (a) Included within long-term debt. (b) Interest charged on borrowings depends on the variable rate structure we elected at the time of each borrowing. (c) Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating. (d) ITC Holdings’ revolving credit agreement may be used for general corporate purposes, including to repay commercial paper issued pursuant to the commercial paper program described above, if necessary. While outstanding commercial paper does not reduce available capacity under ITC Holdings’ revolving credit agreement, the unused capacity under this agreement adjusted for the commercial paper outstanding was $216 million as of June 30, 2019 . 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 June 30, 2019 , we were not in violation of any debt covenant. |
RETIREMENT BENEFITS AND ASSETS
RETIREMENT BENEFITS AND ASSETS HELD IN TRUST | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS AND ASSETS HELD IN TRUST | RETIREMENT BENEFITS AND ASSETS HELD IN TRUST Pension Plan Benefits We have a qualified defined benefit pension plan (“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 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 contribute additional amounts or use our available funding balance as necessary to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974 or as we deem appropriate. During the second quarter of 2019 , we contributed $4 million to the retirement plan. We do not expect to make any additional contributions to this plan in 2019 . 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. During the second quarter of 2019 , we contributed $1 million to the supplemental benefit plans. We do not expect to make any additional contributions to these plans in 2019 . Net periodic benefit cost for the pension plans, by component, was as follows: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Service cost $ 2 $ 2 $ 4 $ 4 Interest cost 1 1 2 2 Expected return on plan assets (1 ) (1 ) (2 ) (2 ) Net pension cost $ 2 $ 2 $ 4 $ 4 The components of net pension cost other than the service cost component are included in Other (income) and expenses, 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. During the second quarter of 2019 we contributed $4 million to the postretirement benefit plan. We expect to make additional contributions of $5 million to the postretirement benefit plan during the second half of 2019 . Net postretirement benefit plan cost, by component, was as follows: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Service cost $ 3 $ 3 $ 5 $ 5 Interest cost 1 1 2 2 Expected return on plan assets (1 ) (1 ) (2 ) (2 ) Net postretirement cost $ 3 $ 3 $ 5 $ 5 The components of net postretirement cost other than the service cost component are included in Other (income) and expenses, 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 for each of the three months ended June 30, 2019 and 2018 and $3 million for each of the six months ended June 30, 2019 and 2018 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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 such instances, the transfer is reported at the beginning of the reporting period. For the six months ended June 30, 2019 and the year ended December 31, 2018 , there were no transfers between levels. Our assets measured at fair value subject to the three-tier hierarchy at June 30, 2019 , 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) (Level 1) (Level 2) (Level 3) Financial assets measured on a recurring basis: Cash equivalents $ 1 $ — $ — Mutual funds — fixed income securities 50 — — Mutual funds — equity securities 7 — — Total $ 58 $ — $ — Our assets measured at fair value subject to the three-tier hierarchy at December 31, 2018 , 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) (Level 1) (Level 2) (Level 3) Financial assets measured on a recurring basis: Cash equivalents $ 1 $ — $ — Mutual funds — fixed income securities 49 — — Mutual funds — equity securities 5 — — Total $ 55 $ — $ — As of June 30, 2019 and December 31, 2018 , we held certain assets that are required to be measured at fair value on a recurring basis. The assets included in the table 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 9 . 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 earnings. 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 six months ended June 30, 2019 and 2018 . See Note 6 for additional information on our goodwill and intangible assets. 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 revolving and term loan credit agreements and commercial paper, was $5,418 million and $5,186 million at June 30, 2019 and December 31, 2018 , 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 revolving and term loan credit agreements and commercial paper, was $4,982 million and $5,130 million at June 30, 2019 and December 31, 2018 , respectively. Revolving and Term Loan Credit Agreements At June 30, 2019 and December 31, 2018 , we had a consolidated total of $459 million and $208 million , respectively, outstanding under our revolving and term loan credit agreements, which are variable rate loans. The fair value of these loans approximates book value based on the borrowing rates currently available for variable rate loans obtained from third party lending institutions. These fair values represent Level 2 under the three-tier hierarchy described above. Other Financial Instruments The carrying value of other financial instruments included in current assets and current liabilities, including cash and cash equivalents, special deposits and commercial paper, approximates their fair value due to the short-term nature of these instruments. |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDER'S EQUITY | STOCKHOLDER'S EQUITY Accumulated Other Comprehensive Income The following table provides the components of changes in AOCI: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Balance at the beginning of period $ 4 $ 3 $ 4 $ 2 Derivative instruments Reclassification of net loss relating to interest rate cash flow hedges from AOCI to earnings (net of tax, of less than $1 for the three and six months ended June 30, 2019 and 2018) (a) 1 1 1 1 Reclassification of deferred tax effects on interest rate cash flow hedges stranded in AOCI, subject to the TCJA, into retained earnings — — — 1 Total other comprehensive income, net of tax 1 1 1 2 Balance at the end of period $ 5 $ 4 $ 5 $ 4 ____________________________ (a) The reclassification of the net loss relating to interest rate cash flow hedges is reported in interest expense on a pre-tax basis. The amount of net loss relating to interest rate cash flow hedges to be reclassified from AOCI to earnings for the 12-month period ending June 30, 2020 is expected to be approximately $1 million (net of tax of less than $1 million ). The reclassification is reported in Interest expense, net in the condensed consolidated statements of comprehensive income on a pre-tax basis. |
SHARE-BASED COMPENSATION AND EM
SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN | SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN 2017 Omnibus Plan On March 6, 2019, pursuant to the 2017 Omnibus Plan, we granted 348,904 PBUs and 270,505 SBUs. Each PBU and SBU granted will be valued based on one share of Fortis common stock traded on the Toronto Stock Exchange, converted to U.S. dollars and settled only in cash. The awards vest on the date specified in a particular grant agreement, provided the service and performance criteria, as applicable, are satisfied. The PBUs and SBUs earn dividend equivalents which are also re-measured consistent with the target award and settled in cash at the end of the vesting period. The granted awards and related dividend equivalents have no shareholder rights. The aggregate fair value of all tranches of PBUs and SBUs as of June 30, 2019 was $44 million and $29 million , respectively. At June 30, 2019 , the total unrecognized compensation cost related to the PBUs and SBUs was $24 million and $15 million , respectively. Employee Share Purchase Plan We have an ESPP plan which enables ITC employees to purchase shares of Fortis common stock. Our cost of the plan is based on the value of our contribution, as additional compensation to a participating employee, equal to 10% of an employee’s contribution up to a maximum annual contribution of 1% of an employee’s base pay and an amount equal to 10% of all dividends paid on the Fortis shares allocated to an employee’s ESPP account. The cost of ITC Holdings’ contribution for each of the three and six months ended June 30, 2019 and 2018 was less than $1 million . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Intercompany Receivables and Payables ITC Holdings may incur charges from Fortis and other subsidiaries of Fortis that are not subsidiaries of ITC Holdings 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. We had intercompany receivables from Fortis and such subsidiaries of $1 million and less than $1 million at June 30, 2019 and December 31, 2018 , respectively, and intercompany payables to Fortis and such subsidiaries of less than $1 million at June 30, 2019 and December 31, 2018 . Related party charges for corporate expenses from Fortis and such subsidiaries are recorded in general and administrative expenses in the condensed consolidated statements of comprehensive income. Such expense for each of the three months ended June 30, 2019 and 2018 for ITC Holdings was $3 million and $2 million , respectively, and for each of the six months ended June 30, 2019 and 2018 was $6 million and $4 million , respectively. Related party billings for services to Fortis and other subsidiaries, recorded as an offset to general and administrative expenses for ITC Holdings, were less than $1 million for each of the three and six months ended June 30, 2019 and 2018 . Dividends During the six months ended June 30, 2019 and 2018 , we paid dividends of $145 million and $100 million , respectively, to Investment Holdings. We also paid dividends of $53 million to Investment Holdings in July 2019. Intercompany Tax Sharing Agreement We are organized as a corporation for tax purposes and subject to a tax sharing agreement as a wholly owned subsidiary of Investment Holdings. Additionally, we record income taxes based on our separate company tax position and make or receive tax-related payments with Investment Holdings. We did not make or receive any tax-related payments during the six months ended June 30, 2019 . |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 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, establish standards for the management, treatment, storage, transportation and disposal of solid and hazardous wastes and hazardous materials, 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 results of operations, financial position or liquidity. Our assets and operations also involve the use of materials classified as hazardous, toxic or otherwise dangerous. Many 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 aboveground 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 PCBs. Our facilities and equipment are often situated on or near property owned by others so that, if they are the source of contamination, others’ property may be affected. For example, aboveground 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 such as wetlands. 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 proceedings 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. Rate of Return on Equity Complaints Two complaints have been 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 with the FERC under Section 206 of the FPA requesting that the FERC find the MISO regional base ROE rate (the “base ROE”) for all MISO TO’s, including our MISO Regulated Operating Subsidiaries, to no longer be just and reasonable. A summary of the two complaints is as follows: Complaint 15-Month Refund Period of Complaint (Beginning as of Complaint Filing Date) Original Base ROE Authorized by the FERC at Time of Complaint Filing Date (a) Base ROE Subsequently Authorized by the FERC for the Initial Complaint Period and also effective for the period from September 28, 2016 to current (a) Reserve (Pre-Tax and Including Interest) as of June 30, 2019 (in millions) Initial 11/12/2013 - 2/11/2015 12.38% 10.32% $ — (b) Second 2/12/2015 - 5/11/2016 12.38% N/A 155 ____________________________ (a) The ROE collected through the MISO Regulated Operating Subsidiaries’ rates during the period November 12, 2013 through September 27, 2016, a portion of which was later refunded to customers for the period of the Initial Complaint, consisted of a base ROE of 12.38% plus applicable incentive adders. (b) In 2017, $118 million , including interest, was refunded to customers of our MISO Regulated Operating Subsidiaries for the Initial Complaint based on the refund liability associated with the September 2016 Order. 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 Regulated Operating Subsidiaries. The FERC set the base ROE for hearing and settlement procedures, while denying all other aspects of the Initial Complaint. On September 28, 2016, the FERC issued the September 2016 Order that set the base ROE at 10.32% , with a maximum ROE of 11.35% , effective for the period from November 12, 2013 through February 11, 2015. Additionally, the base ROE established by the September 2016 Order was to be used prospectively from the date of that order until a new approved base ROE was established by the FERC. The September 2016 Order required all MISO TOs, including our MISO Regulated Operating Subsidiaries, to provide refunds, which were completed in 2017. On October 28, 2016, the MISO TOs, including our MISO Regulated Operating Subsidiaries, filed a request with the FERC for rehearing of the September 2016 Order regarding the short-term growth projections in the two-step DCF analysis. 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 ALJ 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. On September 29, 2017, certain MISO TO’s, including our MISO Regulated Operating Subsidiaries, filed a motion for the FERC to dismiss the Second Complaint. We had recorded an aggregate estimated current regulatory liability in the condensed consolidated statements of financial position of $155 million and $151 million as of June 30, 2019 and December 31, 2018 , respectively, for the Second Complaint. The recognition of the obligations associated with the complaints resulted in the following impacts: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Revenue increase $ — $ (1 ) $ — $ (1 ) Interest expense increase 2 1 4 3 Estimated net income reduction 2 1 3 2 Prior to the filing of the MISO ROE complaints, complaints were filed with the FERC regarding the regional base ROE rate for ISO New England TOs. In resolving these complaints, the FERC adopted a methodology for establishing base ROE rates based on a two-step DCF analysis. This methodology provided the precedent for the FERC ruling on the Initial Complaint and the ALJ initial decision on the Second Complaint for our MISO Regulated Operating Subsidiaries. In April 2017, the D.C. Circuit Court vacated the precedent-setting FERC orders that established and applied the two-step DCF methodology for the determination of base ROE. The court remanded the orders to the FERC for further justification of its establishment of the new base ROE for the ISO New England TOs. On October 16, 2018, in the New England matters, the FERC issued an order on remand which proposes a new methodology for 1) determining when an existing ROE is no longer just and reasonable; and 2) setting a new just and reasonable ROE if an existing ROE has been found not to be just and reasonable. The FERC established a paper hearing on how the proposed new methodology should apply to the ISO New England TOs ROE complaint proceedings. The FERC issued a similar order, the November 2018 Order, in the MISO TO base ROE complaint proceedings establishing a paper hearing on the application of the proposed new methodology to the proceedings pending before the FERC involving the MISO TOs’ ROE, including our MISO Regulated Operating Subsidiaries. Briefs and reply briefs in the New England proceedings were filed on January 11, 2019 and March 8, 2019, respectively. Briefs and reply briefs in the MISO proceedings were filed on February 13, 2019 and April 10, 2019, respectively. The November 2018 Order included illustrative calculations for the ROE that may be established for the Initial Complaint, using the FERC's proposed methodology with financial data from the proceedings related to that complaint. If the results of these illustrative calculations are confirmed in a final FERC order, then the application of the base ROE and the maximum ROE would not have a significant adverse impact on our financial condition, results of operations and cash flows. Although the November 2018 Order provided illustrative calculations, the FERC stated that these calculations are merely preliminary. The FERC’s preliminary calculations are not binding and could change, as significant changes to the methodology by the FERC are possible, as a result of the paper hearing process. Until there is more certainty around the ultimate resolution of these matters, we cannot reasonably update an estimated range of gain or loss for any of the complaint proceedings or estimate a range of gain or loss for the period subsequent to the end of the Second Complaint refund period. The November 2018 Order and our response to the order through briefs and reply briefs filed on February 13, 2019 and April 10, 2019, respectively, do not provide a reasonable basis for a change to the reserve or recognized ROEs for any of the complaint refund periods nor all subsequent periods, and we believe that the risk of additional material loss beyond amounts already accrued is remote. Our MISO Regulated Operating Subsidiaries currently record revenues at the base ROE of 10.32% established in the September 2016 Order on the Initial Complaint plus applicable incentive adders. See Note 5 for a summary of incentive adders for transmission rates. As of June 30, 2019 , our MISO Regulated Operating Subsidiaries had a total of approximately $5 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 $5 million . Development Projects We are pursuing strategic development projects that may result in payments to developers that are contingent on the projects reaching certain milestones indicating that the projects are financially viable. We believe it is reasonably possible that we will be required to make these contingent development payments up to a maximum amount of $120 million for the period from 2019 through 2023. In the event it becomes probable that we will make these payments, we would recognize the liability and the corresponding intangible asset or expense as appropriate. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | 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: June 30, December 31, (in millions) 2019 2018 2018 2017 Cash and cash equivalents $ 3 $ 12 $ 6 $ 66 Restricted cash included in: Other non-current assets 2 2 4 2 Total cash, cash equivalents and restricted cash $ 5 $ 14 $ 10 $ 68 Restricted cash included in other non-current assets primarily represents cash on deposit to pay for vegetation management, land easements and land purchases for the purpose of transmission line construction. Supplementary Cash Flows Information Six months ended June 30, (in millions) 2019 2018 Supplementary cash flows information: Interest paid (net of interest capitalized) $ 103 $ 130 Income tax refunds received 1 13 Supplementary non-cash investing and financing activities: Additions to property, plant and equipment and other long-lived assets (a) 107 101 Allowance for equity funds used during construction 16 18 Right-of-use assets obtained in exchange for new operating lease liabilities 3 — ____________________________ (a) 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 June 30, 2019 or 2018 , respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment when paid. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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 Six months ended OPERATING REVENUES: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 324 $ 297 $ 641 $ 584 Intercompany eliminations (4 ) (7 ) (14 ) (15 ) Total Operating Revenues $ 320 $ 290 $ 627 $ 569 Three months ended Six months ended INCOME (LOSS) BEFORE INCOME TAXES: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 155 $ 147 $ 306 $ 290 ITC Holdings and other (39 ) (33 ) (75 ) (68 ) Total Income Before Income Taxes $ 116 $ 114 $ 231 $ 222 Three months ended Six months ended NET INCOME: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 115 $ 109 $ 226 $ 215 ITC Holdings and other 87 79 171 161 Intercompany eliminations (115 ) (109 ) (226 ) (215 ) Total Net Income $ 87 $ 79 $ 171 $ 161 TOTAL ASSETS: June 30, December 31, (in millions) 2019 2018 Regulated Operating Subsidiaries $ 9,625 $ 9,224 ITC Holdings and other 5,164 4,977 Reconciliations / Intercompany eliminations (a) (5,059 ) (4,872 ) Total Assets $ 9,730 $ 9,329 ____________________________ (a) Reconciliation of total assets results primarily from differences in the netting of deferred tax assets and liabilities in our segments as compared to the classification in our condensed consolidated statements of financial position. |
GENERAL (Policies)
GENERAL (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2018 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. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Lessee, Leases | Accounting for Leases Effective January 1, 2019, we adopted accounting guidance that requires lessees to recognize a right-of-use asset and lease liability for most leases, along with additional quantitative and qualitative disclosures. We elected to apply transition relief which permitted us to adopt the new guidance on a modified retrospective basis at the adoption date (i.e., January 1, 2019) as opposed to at the beginning of the earliest period presented in the financial statements (i.e., January 1, 2017). Therefore, while we began applying the new guidance as of January 1, 2019, prior period comparative financial statements and disclosures will continue to be presented under previous lease accounting guidance. In connection with our adoption of the new guidance, we elected various practical expedients and made certain accounting policy elections, including: • a “package of three” practical expedients that must be taken together and allows us to not reassess: • whether any expired or existing contract is a lease or contains a lease, • the lease classification of any expired or existing leases, and • the initial direct costs for any existing leases; • a practical expedient that permits entities to not evaluate existing land easements at adoption that were not previously accounted for as leases; and • an accounting policy election to not apply the recognition requirements to short-term leases (i.e., leases with terms of 12 months or less). Our leasing activities primarily relate to office facilities, but we also have limited leasing activity relating to equipment and storage facilities. As of January 1, 2019, adoption of the guidance resulted in recognition of right-of-use lease assets of $3 million , current lease liabilities of $1 million , and non-current lease liabilities of $2 million . The adoption of this guidance did not have any impact on retained earnings or net income. We also added disclosures as a result of our adoption of the guidance; refer to Note 7 for more information on our leasing activities. |
REVENUE (Policies)
REVENUE (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition, Policy | 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. The transmission revenue requirements at our Regulated Operating Subsidiaries are set annually using Formula Rates 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 operating 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. 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. Other Services Other services revenue consists of rental revenues, easement revenues, and amounts from providing ancillary services. A portion of other services revenue is treated as a revenue credit and reduces gross revenue requirement when calculating net revenue requirement under our Formula Rates. Total other services revenue for the three months ended June 30, 2019 and 2018 were $1 million and $2 million , respectively. Total other services revenue for the six months ended June 30, 2019 and 2018 were $4 million and $3 million , respectively. 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 “Cost-based Formula Rates with True-Up Mechanism” in Note 5 for more information on our Formula Rates. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Components of accounts receivable | The following table presents the components of accounts receivable on the balance sheet: June 30, December 31, (in millions) 2019 2018 Trade accounts receivable $ 2 $ 2 Unbilled accounts receivable 120 92 Due from affiliates 1 1 Other 10 7 Total accounts receivable $ 133 $ 102 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | ||
Operating Lease Weighted Average [Table Text Block] | Supplementary Lease Information June 30, 2019 Weighted-average remaining lease term (years) 4.6 Weighted-average discount rate 4.6 % | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following table shows the undiscounted future minimum lease payments under our operating leases at June 30, 2019 reconciled to the corresponding discounted lease liabilities presented in our condensed consolidated interim financial statements: Future Minimum Lease Payments (in millions) 2019 (excluding six months ended 6/30/2019) $ — 2020 1 2021 1 2022 — 2023 1 2024 and beyond — Total lease payments 3 Difference between undiscounted cash flows and discounted cash flows — Present value of lease liabilities 3 Less: Current operating lease liabilities (1 ) Noncurrent operating lease liabilities $ 2 | Disclosures Related to Periods Prior to Adoption of the New Lease Guidance Operating lease costs for the three and six months ended June 30, 2018 were less than $1 million and $1 million , respectively. Undiscounted future minimum lease payments under the operating leases at December 31, 2018 were as follows: (in millions) 2019 $ 1 2020 1 2021 1 2022 — 2023 and thereafter 1 Total minimum lease payments $ 4 |
lease classification [Table Text Block] | Leases are presented in the condensed consolidated statements of financial position as follows: (in millions) Classification June 30, 2019 Operating Lease Assets Other assets $ 3 Current Operating Lease Liabilities Other current liabilities 1 Noncurrent Operating Lease Liabilities Other liabilities 2 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Regulated Operations [Abstract] | |
Net Changes in Regulatory Assets and Liabilities | 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 six months ended June 30, 2019 : (in millions) Total Net regulatory liabilities as of December 31, 2018 $ (52 ) Net refund of 2017 revenue deferrals and accruals, including accrued interest 8 Net revenue accrual for the six months ended June 30, 2019 50 Net accrued interest payable for the six months ended June 30, 2019 (2 ) Net regulatory assets as of June 30, 2019 $ 4 |
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities associated with our Regulated Operating Subsidiaries’ Formula Rate revenue accruals and deferrals, including accrued interest, are recorded in the condensed consolidated statements of financial position at June 30, 2019 and December 31, 2018 as follows: June 30, December 31, (in millions) 2019 2018 Current regulatory assets $ 11 $ 12 Non-current regulatory assets 60 12 Current regulatory liabilities (38 ) (27 ) Non-current regulatory liabilities (29 ) (49 ) Net regulatory assets (liabilities) $ 4 $ (52 ) |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended | |
Jun. 30, 2019 | ||
Debt Disclosure [Abstract] | ||
Schedule of Revolving Credit Agreements | At June 30, 2019 , ITC Holdings and certain of its Regulated Operating Subsidiaries had the following unsecured revolving credit facilities available: (in millions) Total Capacity Outstanding Balance (a) Unused Capacity Weighted Average Interest Rate on Outstanding Balance (b) Commitment Fee Rate (c) ITC Holdings $ 400 $ — $ 400 (d) 0.175 % ITCTransmission 100 76 24 3.4% 0.10 % METC 100 58 42 3.4% 0.10 % ITC Midwest 225 88 137 3.4% 0.10 % ITC Great Plains 75 37 38 3.4% 0.10 % Total $ 900 $ 259 $ 641 ____________________________ (a) Included within long-term debt. (b) Interest charged on borrowings depends on the variable rate structure we elected at the time of each borrowing. (c) Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating. (d) ITC Holdings’ revolving credit agreement may be used for general corporate purposes, including to repay commercial paper issued pursuant to the commercial paper program described above, if necessary. While outstanding commercial paper does not reduce available capacity under ITC Holdings’ revolving credit agreement, the unused capacity under this agreement adjusted for the commercial paper outstanding was $216 million as of June 30, 2019 . | [1],[2],[3],[4] |
[1] | Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating. | |
[2] | ITC Holdings’ revolving credit agreement may be used for general corporate purposes, including to repay commercial paper issued pursuant to the commercial paper program described above, if necessary. While outstanding commercial paper does not reduce available capacity under ITC Holdings’ revolving credit agreement, the unused capacity under this agreement adjusted for the commercial paper outstanding was $216 million as of June 30, 2019 . | |
[3] | Included within long-term debt. | |
[4] | Interest charged on borrowings depends on the variable rate structure we elected at the time of each borrowing. |
RETIREMENT BENEFITS AND ASSET_2
RETIREMENT BENEFITS AND ASSETS HELD IN TRUST (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Pension plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net Defined Benefit Cost Components | Net periodic benefit cost for the pension plans, by component, was as follows: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Service cost $ 2 $ 2 $ 4 $ 4 Interest cost 1 1 2 2 Expected return on plan assets (1 ) (1 ) (2 ) (2 ) Net pension cost $ 2 $ 2 $ 4 $ 4 |
Other Postretirement Benefits Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Net Defined Benefit Cost Components | Net postretirement benefit plan cost, by component, was as follows: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Service cost $ 3 $ 3 $ 5 $ 5 Interest cost 1 1 2 2 Expected return on plan assets (1 ) (1 ) (2 ) (2 ) Net postretirement cost $ 3 $ 3 $ 5 $ 5 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities at Fair Value Subject to Three-Tier Hierarchy | Our assets measured at fair value subject to the three-tier hierarchy at June 30, 2019 , 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) (Level 1) (Level 2) (Level 3) Financial assets measured on a recurring basis: Cash equivalents $ 1 $ — $ — Mutual funds — fixed income securities 50 — — Mutual funds — equity securities 7 — — Total $ 58 $ — $ — Our assets measured at fair value subject to the three-tier hierarchy at December 31, 2018 , 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) (Level 1) (Level 2) (Level 3) Financial assets measured on a recurring basis: Cash equivalents $ 1 $ — $ — Mutual funds — fixed income securities 49 — — Mutual funds — equity securities 5 — — Total $ 55 $ — $ — |
STOCKHOLDER'S EQUITY (Tables)
STOCKHOLDER'S EQUITY (Tables) | 6 Months Ended | |
Jun. 30, 2019 | ||
Equity [Abstract] | ||
Changes in Accumulated Other Comprehensive Income | The following table provides the components of changes in AOCI: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Balance at the beginning of period $ 4 $ 3 $ 4 $ 2 Derivative instruments Reclassification of net loss relating to interest rate cash flow hedges from AOCI to earnings (net of tax, of less than $1 for the three and six months ended June 30, 2019 and 2018) (a) 1 1 1 1 Reclassification of deferred tax effects on interest rate cash flow hedges stranded in AOCI, subject to the TCJA, into retained earnings — — — 1 Total other comprehensive income, net of tax 1 1 1 2 Balance at the end of period $ 5 $ 4 $ 5 $ 4 ____________________________ (a) The reclassification of the net loss relating to interest rate cash flow hedges is reported in interest expense on a pre-tax basis. | [1] |
[1] | The reclassification of the net loss relating to interest rate cash flow hedges is reported in interest expense on a pre-tax basis. |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 6 Months Ended | |
Jun. 30, 2019 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of Impacts from the Initial and Second ROE Complaints | The recognition of the obligations associated with the complaints resulted in the following impacts: Three months ended Six months ended June 30, June 30, (in millions) 2019 2018 2019 2018 Revenue increase $ — $ (1 ) $ — $ (1 ) Interest expense increase 2 1 4 3 Estimated net income reduction 2 1 3 2 | |
Schedule of Loss Contingencies by Contingency [Table Text Block] | A summary of the two complaints is as follows: Complaint 15-Month Refund Period of Complaint (Beginning as of Complaint Filing Date) Original Base ROE Authorized by the FERC at Time of Complaint Filing Date (a) Base ROE Subsequently Authorized by the FERC for the Initial Complaint Period and also effective for the period from September 28, 2016 to current (a) Reserve (Pre-Tax and Including Interest) as of June 30, 2019 (in millions) Initial 11/12/2013 - 2/11/2015 12.38% 10.32% $ — (b) Second 2/12/2015 - 5/11/2016 12.38% N/A 155 ____________________________ (a) The ROE collected through the MISO Regulated Operating Subsidiaries’ rates during the period November 12, 2013 through September 27, 2016, a portion of which was later refunded to customers for the period of the Initial Complaint, consisted of a base ROE of 12.38% plus applicable incentive adders. (b) In 2017, $118 million , including interest, was refunded to customers of our MISO Regulated Operating Subsidiaries for the Initial Complaint based on the refund liability associated with the September 2016 Order. | [1],[2] |
[1] | (a) The ROE collected through the MISO Regulated Operating Subsidiaries’ rates during the period November 12, 2013 through September 27, 2016, a portion of which was later refunded to customers for the period of the Initial Complaint, consisted of a base ROE of 12.38% plus applicable incentive adders. | |
[2] | (b) In 2017, $118 million , including interest, was refunded to customers of our MISO Regulated Operating Subsidiaries for the Initial Complaint based on the refund liability associated with the September 2016 Order. |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 6 Months Ended | |
Jun. 30, 2019 | ||
Supplemental Cash Flow Elements [Abstract] | ||
Restrictions on Cash and Cash Equivalents | 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: June 30, December 31, (in millions) 2019 2018 2018 2017 Cash and cash equivalents $ 3 $ 12 $ 6 $ 66 Restricted cash included in: Other non-current assets 2 2 4 2 Total cash, cash equivalents and restricted cash $ 5 $ 14 $ 10 $ 68 | |
Supplementary Cash Flow Information | Supplementary Cash Flows Information Six months ended June 30, (in millions) 2019 2018 Supplementary cash flows information: Interest paid (net of interest capitalized) $ 103 $ 130 Income tax refunds received 1 13 Supplementary non-cash investing and financing activities: Additions to property, plant and equipment and other long-lived assets (a) 107 101 Allowance for equity funds used during construction 16 18 Right-of-use assets obtained in exchange for new operating lease liabilities 3 — ____________________________ (a) 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 June 30, 2019 or 2018 , respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment when paid. | [1] |
[1] | 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 June 30, 2019 or 2018 , respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment when paid. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | The following tables show our financial information by reportable segment: Three months ended Six months ended OPERATING REVENUES: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 324 $ 297 $ 641 $ 584 Intercompany eliminations (4 ) (7 ) (14 ) (15 ) Total Operating Revenues $ 320 $ 290 $ 627 $ 569 Three months ended Six months ended INCOME (LOSS) BEFORE INCOME TAXES: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 155 $ 147 $ 306 $ 290 ITC Holdings and other (39 ) (33 ) (75 ) (68 ) Total Income Before Income Taxes $ 116 $ 114 $ 231 $ 222 Three months ended Six months ended NET INCOME: June 30, June 30, (in millions) 2019 2018 2019 2018 Regulated Operating Subsidiaries $ 115 $ 109 $ 226 $ 215 ITC Holdings and other 87 79 171 161 Intercompany eliminations (115 ) (109 ) (226 ) (215 ) Total Net Income $ 87 $ 79 $ 171 $ 161 TOTAL ASSETS: June 30, December 31, (in millions) 2019 2018 Regulated Operating Subsidiaries $ 9,625 $ 9,224 ITC Holdings and other 5,164 4,977 Reconciliations / Intercompany eliminations (a) (5,059 ) (4,872 ) Total Assets $ 9,730 $ 9,329 ____________________________ (a) Reconciliation of total assets results primarily from differences in the netting of deferred tax assets and liabilities in our segments as compared to the classification in our condensed consolidated statements of financial position. |
RECENT ACCOUNTING PRONOUNCEME_3
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle | ||
Operating Lease, Right-of-Use Asset | $ 3 | |
Operating Lease, Liability, Current | $ 1 | 1 |
Operating Lease, Liability, Noncurrent | $ 2 | $ 2 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Transmission and other services | $ 288 | $ 311 | $ 577 | $ 582 |
Other services | ||||
Disaggregation of Revenue [Line Items] | ||||
Transmission and other services | $ 1 | $ 2 | $ 4 | $ 3 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 133 | $ 102 |
Unbilled accounts receivable | 120 | 92 |
Due from Affiliate, Current | 1 | 1 |
Other | 10 | 7 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 2 | $ 2 |
LEASES LEASES (Details)
LEASES LEASES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||||||||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 7 months 6 days | 4 years 7 months 6 days | |||||||
Operating Leases, Future Minimum Payments Due | $ 3 | $ 3 | |||||||
Operating Lease, Liability | 3 | 3 | |||||||
Operating Lease, Cost | 1 | 1 | $ 1 | ||||||
Operating Lease, Liability, Current | (1) | (1) | $ (1) | ||||||
Operating Lease, Liability, Noncurrent | $ 2 | $ 2 | $ 2 | ||||||
Operating Lease, Weighted Average Discount Rate, Percent | 4.60% | 4.60% | |||||||
ITC Holdings Corp. [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating Leases, Future Minimum Payments Due | $ 1 | $ 1 | $ 4 | ||||||
Forecast [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating Leases, Future Minimum Payments Due | $ 1 | $ 0 | $ 1 | $ 1 | |||||
Forecast [Member] | ITC Holdings Corp. [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating Leases, Future Minimum Payments Due | $ 1 | $ 0 | $ 1 | $ 1 |
REGULATORY MATTERS Net Changes
REGULATORY MATTERS Net Changes in Regulatory Assets and Liabilities (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Revenue Accruals and Deferrals | |
Net regulatory liabilities as of December 31, 2018 | $ (52) |
Net refund of 2017 revenue deferrals and accruals, including accrued interest | 8 |
Net revenue accrual for the six months ended June 30, 2019 | 50 |
Net accrued interest payable for the six months ended June 30, 2019 | (2) |
Net regulatory assets (liabilities) | $ 4 |
REGULATORY MATTERS Schedule of
REGULATORY MATTERS Schedule of Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Current regulatory assets | $ 12 | $ 12 |
Non-current regulatory assets | 247 | 200 |
Current regulatory liabilities | (193) | (178) |
Non-current regulatory liabilities | (621) | (640) |
Net regulatory assets (liabilities) | 4 | (52) |
Revenue Deferrals, Including Accrued Interest | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Current regulatory liabilities | (38) | (27) |
Non-current regulatory liabilities | (29) | (49) |
Revenue Accruals, Including Accrued Interest | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Current regulatory assets | 11 | 12 |
Non-current regulatory assets | $ 60 | $ 12 |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 11, 2019 | Oct. 18, 2018 | Apr. 20, 2018 | Sep. 30, 2016 | Sep. 28, 2016 | Feb. 12, 2015 | Nov. 12, 2013 | |
Regulatory Liabilities [Line Items] | |||||||||||||
Transmission rate, applicable period | 1 year | ||||||||||||
Revenue true-up amount reflected in customer bill, period of recognition | 2 years | ||||||||||||
Revenue (increase) decrease | $ (320) | $ (290) | $ (627) | $ (569) | |||||||||
Current regulatory liability | $ 193 | $ 193 | $ 178 | ||||||||||
ITCTransmission [Member] | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Rate Of Return On Equity | 11.35% | 12.38% | 12.38% | ||||||||||
Combined Incentive Adders | 150 | ||||||||||||
Incentive Adder for Independent Transmission Ownership | 100 | ||||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | ||||||||||||
METC LLC [Member] | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Rate Of Return On Equity | 11.35% | 12.38% | |||||||||||
Combined Incentive Adders | 150 | ||||||||||||
Revised Rate Of Return On Equity | 11.07% | ||||||||||||
ITC Midwest LLC [Member] | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Rate Of Return On Equity | 11.32% | 12.38% | |||||||||||
Combined Incentive Adders | 100 | ||||||||||||
Incentive Adder for Independent Transmission Ownership | 50 | ||||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | ||||||||||||
Revised Rate Of Return On Equity | 11.07% | ||||||||||||
MISO Operating Subsidiaries | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Incentive Adder for Independent Transmission Ownership | 10 | 10 | 25 | ||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | ||||||||||||
Revised Rate Of Return On Equity | 11.07% | ||||||||||||
ITC Great Plains | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Incentive Adder for Independent Transmission Ownership | 100 | 100 | 100 | ||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | 50 | |||||||||||
Revised Rate Of Return On Equity | 12.16% | 12.16% | |||||||||||
Minimum | MISO Operating Subsidiaries | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Incentive Adder for Independent Transmission Ownership | 50 | ||||||||||||
Revised Rate Of Return On Equity | 10.32% | ||||||||||||
Minimum | ITC Great Plains | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Revised Rate Of Return On Equity | 10.66% | 10.66% | |||||||||||
Maximum | MISO Operating Subsidiaries | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Incentive Adder for Independent Transmission Ownership | 100 | ||||||||||||
Rate of Return on Equity and Capital Structure Initial Complaint [Member] | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Required customer refund paid | $ 7 | $ 118 | |||||||||||
FERC Order [Member] | Rate of Return on Equity and Capital Structure Initial Complaint [Member] | Minimum | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Revised Rate Of Return On Equity | 10.32% | ||||||||||||
FERC Order [Member] | Rate of Return on Equity and Capital Structure Initial Complaint [Member] | Maximum | |||||||||||||
Regulatory Liabilities [Line Items] | |||||||||||||
Revised Rate Of Return On Equity | 11.35% |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | $ 950 | $ 950 | $ 950 | ||
Intangible assets | 0 | ||||
Accumulated amortization | 40 | 40 | 39 | ||
Other intangible assets | 1 | ||||
Amortization expense | 1 | $ 1 | 1 | $ 2 | |
Expected amortization expense, year one | 3 | 3 | |||
Expected amortization expense, year two | 3 | 3 | |||
Expected amortization expense, year three | 3 | 3 | |||
Expected amortization expense, year four | 3 | 3 | |||
Expected amortization expense, year five | 3 | 3 | |||
ITCTransmission [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | 173 | 173 | 173 | ||
METC LLC [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | 454 | 454 | 454 | ||
Intangible assets | 21 | 21 | 22 | ||
Accumulated amortization | 38 | 38 | 37 | ||
ITC Midwest LLC [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Goodwill | 323 | 323 | 323 | ||
ITC Great Plains | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Intangible assets | 14 | 14 | 14 | ||
Accumulated amortization | $ 2 | $ 2 | $ 2 |
DEBT Schedule of Revolving Cred
DEBT Schedule of Revolving Credit Agreements (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | $ 900 | |
Outstanding Balance | 259 | [1] |
Unused Capacity | 641 | |
ITC Holdings Corp. [Member] | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | 400 | |
Outstanding Balance | 0 | [1] |
Unused Capacity | $ 400 | |
Debt, Weighted Average Interest Rate | [2] | |
Commitment Fee Rate | 0.175% | [3] |
ITCTransmission [Member] | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | $ 100 | |
Outstanding Balance | 76 | [1] |
Unused Capacity | $ 24 | |
Debt, Weighted Average Interest Rate | 3.40% | [2] |
Commitment Fee Rate | 0.10% | [3] |
METC LLC [Member] | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | $ 100 | |
Outstanding Balance | 58 | [1] |
Unused Capacity | $ 42 | |
Debt, Weighted Average Interest Rate | 3.40% | [2] |
Commitment Fee Rate | 0.10% | [3] |
ITC Midwest LLC [Member] | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | $ 225 | |
Outstanding Balance | 88 | [1] |
Unused Capacity | $ 137 | |
Debt, Weighted Average Interest Rate | 3.40% | [2] |
Commitment Fee Rate | 0.10% | [3] |
ITC Great Plains | ||
Line of Credit Facility [Line Items] | ||
Total available capacity | $ 75 | |
Outstanding Balance | 37 | [1] |
Unused Capacity | $ 38 | |
Debt, Weighted Average Interest Rate | 3.40% | [2] |
Commitment Fee Rate | 0.10% | [3] |
[1] | Included within long-term debt. | |
[2] | Interest charged on borrowings depends on the variable rate structure we elected at the time of each borrowing. | |
[3] | Calculation based on the average daily unused commitments, subject to adjustment based on the borrower’s credit rating. |
DEBT (Details)
DEBT (Details) - USD ($) $ in Millions | 6 Months Ended | |||||
Jun. 30, 2019 | Jul. 25, 2019 | Jul. 10, 2019 | Jun. 12, 2019 | Jan. 15, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
Debt maturing within one year | $ 184 | $ 0 | ||||
Commercial Paper Program, Maximum Authorized Amount Outstanding | $ 400 | |||||
Debt, Weighted Average Interest Rate | 3.10% | |||||
Commercial Paper | $ 184 | |||||
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.70% | |||||
Short-Term Debt, Weighted Average Days to Maturity | 9 days | |||||
ITC Holdings Corp. [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Remaining Borrowing Capacity Adjusted for Commercial Paper Outstanding | $ 216 | |||||
ITC Holdings Corp. [Member] | Unsecured Debt [Member] | Term Loan Credit Agreement, Due June 11, 2021 [Domain] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 400 | |||||
Other Long-term Debt | 200 | |||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 200 | |||||
ITC Holdings Corp. [Member] | Unsecured Debt [Member] | Senior Notes due January 15, 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 200 | |||||
Interest Rate | 5.50% | |||||
METC LLC [Member] | Secured Debt | Senior Secured Notes, due January 15, 2049 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 50 | |||||
Interest Rate | 4.55% | |||||
Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, Notional Amount | $ 50 | |||||
Derivative, Fixed Interest Rate | 1.816% | |||||
Subsequent Event | METC LLC [Member] | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 50 | |||||
Interest Rate | 4.65% |
RETIREMENT BENEFITS AND ASSET_3
RETIREMENT BENEFITS AND ASSETS HELD IN TRUST Schedule of Net Defined Benefit Cost Components (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Document Fiscal Year Focus | 2019 | |||
Pension plans - retirement plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 4 | |||
Pension plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | $ 2 | $ 4 | $ 4 |
Interest cost | 1 | 1 | 2 | 2 |
Expected return on plan assets | (1) | (1) | (2) | (2) |
Net cost | 2 | 2 | 4 | 4 |
Other Postretirement Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 4 | |||
Service cost | 3 | 3 | 5 | 5 |
Interest cost | 1 | 1 | 2 | 2 |
Expected return on plan assets | (1) | (1) | (2) | (2) |
Net cost | $ 3 | $ 3 | $ 5 | $ 5 |
RETIREMENT BENEFITS AND ASSET_4
RETIREMENT BENEFITS AND ASSETS HELD IN TRUST (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Document Fiscal Year Focus | 2019 | |||
Defined Contribution Plan, Cost | $ 1 | $ 1 | $ 3 | $ 3 |
Pension plans - retirement plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 4 | |||
Pension plans - supplemental benefit plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 1 | |||
Other Postretirement Benefits Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 4 | |||
Expected Future Employer Contributions, Remainder of Fiscal Year | $ 5 | $ 5 |
FAIR VALUE MEASUREMENTS Assets
FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value Subject to Three-Tier Hierarchy (Details) - Fair Value, Inputs, Level 1 - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Cash equivalents | $ 1 | |
Total - assets | $ 58 | 55 |
Mutual fund - fixed income securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Mutual funds | 50 | 49 |
Mutual fund - equity securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Mutual funds | 7 | $ 5 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Cash equivalents | $ 1 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair value of long-term debt and debt maturing within one year, excluding revolving and term loan credit agreements and commercial paper | 5,418 | 5,186 |
Book value of long-term debt and debt maturing within one year, net of discount and deferred financing fees and excluding revolving and term loan credit agreements and commercial paper | 4,982 | 5,130 |
Book value of revolving credit and term loan credit agreements | $ 459 | $ 208 |
STOCKHOLDER'S EQUITY (Details)
STOCKHOLDER'S EQUITY (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2020 | ||
Document Fiscal Year Focus | 2019 | ||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | [1] | $ 1 | $ 1 | ||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | $ (1) | (1) | $ (1) | 2 | |||
Balance at the beginning of period | 4 | 3 | $ 2 | 4 | 2 | $ 5 | |
Reclassification Aof net loss relating to interest rate cash flow hedges from AOCI to earnings, Tax of less than $1 million | 1 | 1 | 1 | 1 | |||
Total other comprehensive income, net of tax | 1 | 1 | 1 | 2 | |||
Balance at the end of period | $ 5 | 4 | $ 3 | $ 5 | 4 | ||
Forecast [Member] | |||||||
Other Comprehensive Loss, reclassification adjustment from AOCI to earnings, pretax | 1 | ||||||
Other Comprehensive Loss, reclassification adjustment from AOCI to earnings, Tax of less than $1 million | $ 1 | ||||||
Accounting Standards Update 2018-02 [Member] | |||||||
Reclassification of deferred tax effects on interest rate cash flow hedges stranded in AOCI, subject to the TCJA, into retained earnings | $ 0 | $ 1 | |||||
[1] | The reclassification of the net loss relating to interest rate cash flow hedges is reported in interest expense on a pre-tax basis. |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND EMPLOYEE SHARE PURCHASE PLAN (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employer Match Contribution | 10.00% | |||
Maximum Annual Contribution Percentage of Pay | 1.00% | |||
Percent of Dividends Payable | 10.00% | |||
2017 Omnibus Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted Award Vesting Rights | The granted awards and related dividend equivalents have no shareholder rights. | |||
2017 Omnibus Plan | Performance Share Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 348,904 | |||
Aggregate fair value of PBUs or SBUs | $ 44 | $ 44 | ||
Total unrecognized compensation cost | 24 | $ 24 | ||
2017 Omnibus Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 270,505 | |||
Aggregate fair value of PBUs or SBUs | 29 | $ 29 | ||
Total unrecognized compensation cost | 15 | 15 | ||
Employee Share Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation Expense (less than $1 million) | $ 1 | $ 1 | $ 1 | $ 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jul. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Intercompany receivables (less than $1 million) | $ 1 | $ 1 | $ 1 | |||||
Intercompany payables (less than $1 million) | 1 | 1 | $ 1 | |||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | 3 | $ 2 | 6 | $ 4 | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party (less than $1 million) | 1 | 1 | 1 | 1 | ||||
Payments of Dividends | $ 73 | $ 72 | $ 50 | $ 50 | $ 145 | $ 100 | ||
Subsequent Event | ||||||||
Payments of Dividends | $ 53 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | 51 Months Ended | ||||||||||||
Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2022USD ($) | Oct. 18, 2018 | Apr. 20, 2018 | Sep. 30, 2016 | Sep. 28, 2016 | Jun. 30, 2016 | Feb. 12, 2015 | Nov. 12, 2013 | |
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Current regulatory liability | $ 193 | $ 193 | $ 178 | |||||||||||||
Revenue (increase) decrease | (320) | $ (290) | (627) | $ (569) | ||||||||||||
Interest expense increase | 64 | 56 | 123 | 111 | ||||||||||||
Estimated net income reduction | (87) | $ (84) | (79) | $ (82) | (171) | (161) | ||||||||||
Estimated Potential Refund Related to Return on Equity Complaints | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Current regulatory liability | 155 | 155 | 151 | |||||||||||||
Rate of Return on Equity and Capital Structure Initial Complaint [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Required customer refund paid | 7 | $ 118 | ||||||||||||||
Estimated potential refund | 0 | |||||||||||||||
Rate of Return on Equity and Capital Structure Initial Complaint [Member] | FERC Order [Member] | Minimum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Revised Rate Of Return On Equity | 10.32% | |||||||||||||||
Rate of Return on Equity and Capital Structure Initial Complaint [Member] | FERC Order [Member] | Maximum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Revised Rate Of Return On Equity | 11.35% | |||||||||||||||
Rate of Return on Equity and Capital Structure Second Complaint | Estimated Potential Refund Related to Return on Equity Complaints | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Current regulatory liability | $ 155 | |||||||||||||||
Rate of Return on Equity and Capital Structure Second Complaint | Presiding Administrative Law Judge Initial Decision | Minimum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Recommended rate of return on equity | 9.70% | |||||||||||||||
Rate of Return on Equity and Capital Structure Second Complaint | Presiding Administrative Law Judge Initial Decision | Maximum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Recommended rate of return on equity | 10.68% | |||||||||||||||
Rate of Return on Equity and Capital Structure Complaints | Impact from Recognition of Liability | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Revenue (increase) decrease | 0 | (1) | 0 | (1) | ||||||||||||
Interest expense increase | 2 | 1 | 4 | 3 | ||||||||||||
Estimated net income reduction | 2 | $ 1 | 3 | $ 2 | ||||||||||||
ITCTransmission [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Rate Of Return On Equity | 11.35% | 12.38% | 12.38% | |||||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | |||||||||||||||
Incentive Adder for Independent Transmission Ownership | 100 | |||||||||||||||
ITCTransmission [Member] | Rate of Return on Equity and Capital Structure Initial Complaint [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 9.15% | |||||||||||||||
ITCTransmission [Member] | Rate of Return on Equity and Capital Structure Second Complaint | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 8.67% | |||||||||||||||
METC LLC [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Rate Of Return On Equity | 11.35% | 12.38% | ||||||||||||||
Revised Rate Of Return On Equity | 11.07% | |||||||||||||||
METC LLC [Member] | Rate of Return on Equity and Capital Structure Initial Complaint [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 9.15% | |||||||||||||||
METC LLC [Member] | Rate of Return on Equity and Capital Structure Second Complaint | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 8.67% | |||||||||||||||
ITC Midwest LLC [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Rate Of Return On Equity | 11.32% | 12.38% | ||||||||||||||
Revised Rate Of Return On Equity | 11.07% | |||||||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | |||||||||||||||
Incentive Adder for Independent Transmission Ownership | 50 | |||||||||||||||
ITC Midwest LLC [Member] | Rate of Return on Equity and Capital Structure Initial Complaint [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 9.15% | |||||||||||||||
ITC Midwest LLC [Member] | Rate of Return on Equity and Capital Structure Second Complaint | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Reduced rate of return on equity | 8.67% | |||||||||||||||
MISO Operating Subsidiaries | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Revised Rate Of Return On Equity | 11.07% | |||||||||||||||
Equity in capital structure for ratemaking purposes | 5,000 | 5,000 | ||||||||||||||
Effect on net income from 10 basis point reduction in the authorized base return on equity | $ 5 | $ 5 | ||||||||||||||
Basis Point Incentive Adder for RTO Participation | 50 | |||||||||||||||
Incentive Adder for Independent Transmission Ownership | 10 | 10 | 25 | |||||||||||||
MISO Operating Subsidiaries | Minimum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Revised Rate Of Return On Equity | 10.32% | |||||||||||||||
Incentive Adder for Independent Transmission Ownership | 50 | |||||||||||||||
MISO Operating Subsidiaries | Maximum | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Incentive Adder for Independent Transmission Ownership | 100 | |||||||||||||||
Forecast [Member] | ||||||||||||||||
Commitments and Contingent Liabilities [Line Items] | ||||||||||||||||
Future Development Payments, Reasonably Possible Estimate | $ 120 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION Restricted cash reconciliation (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 3 | $ 6 | $ 12 | $ 66 |
Restricted Cash, included in other non-current assets | 2 | 4 | 2 | 2 |
Cash, Cash Equivalents and Restricted Cash | $ 5 | $ 10 | $ 14 | $ 68 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION Supplemental Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Supplemental Cash Flow Elements [Abstract] | |||||
Interest paid (net of interest capitalized) | $ 103 | $ 130 | |||
Income tax refunds received | 1 | 13 | |||
Additions to property, plant and equipment and other long-lived assets | [1] | 107 | 101 | ||
Allowance for equity funds used during construction | $ 8 | $ 9 | 16 | 18 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 3 | $ 0 | |||
[1] | 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 June 30, 2019 or 2018 , respectively, but will be or have been included as a cash outflow from investing activities for expenditures for property, plant and equipment when paid. |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
OPERATING REVENUES: | ||||||||
Operating revenues | $ 320 | $ 290 | $ 627 | $ 569 | ||||
INCOME (LOSS) BEFORE INCOME TAXES: | ||||||||
Income before income taxes | 116 | 114 | 231 | 222 | ||||
NET INCOME: | ||||||||
NET INCOME | 87 | $ 84 | 79 | $ 82 | 171 | 161 | ||
TOTAL ASSETS: | ||||||||
Assets | 9,730 | 9,730 | $ 9,329 | |||||
Regulated Operating Subsidiaries | ||||||||
OPERATING REVENUES: | ||||||||
Operating revenues | 324 | 297 | 641 | 584 | ||||
INCOME (LOSS) BEFORE INCOME TAXES: | ||||||||
Income before income taxes | 155 | 147 | 306 | 290 | ||||
NET INCOME: | ||||||||
NET INCOME | 115 | 109 | 226 | 215 | ||||
TOTAL ASSETS: | ||||||||
Assets | 9,625 | 9,625 | 9,224 | |||||
ITC Holdings and other | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES: | ||||||||
Income before income taxes | (39) | (33) | (75) | (68) | ||||
NET INCOME: | ||||||||
NET INCOME | 87 | 79 | 171 | 161 | ||||
TOTAL ASSETS: | ||||||||
Assets | 5,164 | 5,164 | 4,977 | |||||
Intercompany eliminations | ||||||||
OPERATING REVENUES: | ||||||||
Operating revenues | (4) | (7) | (14) | (15) | ||||
NET INCOME: | ||||||||
NET INCOME | (115) | $ (109) | (226) | $ (215) | ||||
TOTAL ASSETS: | ||||||||
Assets | [1] | $ (5,059) | $ (5,059) | $ (4,872) | ||||
[1] | Reconciliation of total assets results primarily from differences in the netting of deferred tax assets and liabilities in our segments as compared to the classification in our condensed consolidated statements of financial position |