GENERAL

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, 2016 included in ITC Holdings’ annual report on Form 10-K for such period.

The accompanying condensed consolidated interim financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission (“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.

Supplementary Cash Flows Information



	Six months ended
	June 30,
(in millions)	2017		2016
Supplementary cash flows information:
Interest paid (net of interest capitalized) (a)	$	110	$	95
Income taxes paid	—		21
Supplementary non-cash investing and financing activities:
Additions to property, plant and equipment and other long-lived assets (b)	$	93	$	100
Allowance for equity funds used during construction	16		16

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(a)	Amount for the six months ended June 30, 2017 includes $9 million of interest paid associated with the return on equity (“ROE”) complaints. See Note 12 to the condensed consolidated interim financial statements for information on the ROE complaints.


(b)	Amounts consist of 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, 2017 or 2016, respectively, but will be or have been included as a cash outflow from investing activities when paid.