ITC Holdings (ITC Holdings) Interest Coverage : 3.08 (As of Jun. 2016)

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What is ITC Holdings Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. ITC Holdings's Operating Income for the three months ended in Jun. 2016 was $160 Mil. ITC Holdings's Interest Expense for the three months ended in Jun. 2016 was $-52 Mil. ITC Holdings's interest coverage for the quarter that ended in Jun. 2016 was 3.08. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for ITC Holdings's Interest Coverage or its related term are showing as below:

ITC's Interest Coverage is not ranked ^*
in the Utilities - Regulated industry.
Industry Median: 3.76
* Ranked among companies with meaningful Interest Coverage only.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

ITC Holdings Interest Coverage Historical Data

The historical data trend for ITC Holdings's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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ITC Holdings Interest Coverage Chart

ITC Holdings Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Interest Coverage

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2.71

2.77

2.95

3.18

2.75

ITC Holdings Quarterly Data
	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16
Interest Coverage	Get a 7-Day Free Trial															3.16	2.91	1.92	2.93	3.08

Competitive Comparison of ITC Holdings's Interest Coverage

For the Utilities - Regulated Electric subindustry, ITC Holdings's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

ITC Holdings's Interest Coverage Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, ITC Holdings's Interest Coverage distribution charts can be found below:

* The bar in red indicates where ITC Holdings's Interest Coverage falls into.

ITC Holdings Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

ITC Holdings's Interest Coverage for the fiscal year that ended in Dec. 2015 is calculated as

Here, for the fiscal year that ended in Dec. 2015, ITC Holdings's Interest Expense was $-204 Mil. Its Operating Income was $561 Mil. And its Long-Term Debt & Capital Lease Obligation was $4,061 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2015 )	/	Interest Expense (A: Dec. 2015 )
	=	-1	*	560.717	/	-203.779
	=	2.75

ITC Holdings's Interest Coverage for the quarter that ended in Jun. 2016 is calculated as

Here, for the three months ended in Jun. 2016, ITC Holdings's Interest Expense was $-52 Mil. Its Operating Income was $160 Mil. And its Long-Term Debt & Capital Lease Obligation was $4,147 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2016 )	/	Interest Expense (Q: Jun. 2016 )
	=	-1	*	159.534	/	-51.804
	=	3.08

The higher the ratio, the stronger the company's Financial Strength is.

ITC Holdings (NYSE:ITC) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

ITC Holdings Interest Coverage Related Terms

Thank you for viewing the detailed overview of ITC Holdings's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

ITC Holdings (ITC Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » ITC Holdings Corp (NYSE:ITC) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.itc-holdings.com

ITC Holdings Corp was incorporated in 2002 in the State of Michigan for the purpose of acquiring ITC Transmission. The Company, along with its subsidiaries, is engaged in transmission of electricity in the United States. Through its operating subsidiaries, ITCTransmission, METC, ITC Midwest and ITC Great Plains, it operates 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 its systems. The Company operates, maintains and invests in transmission infrastructure in order to enhance system integrity and reliability, reduces transmission constraints and allows new generating resources to interconnect to its transmission systems. Its Regulated Operating Subsidiaries are independent electric transmission utilities, with rates regulated by the FERC and established on a cost-of-service model. The Company's Regulated Operating Subsidiaries earns revenues through tariff rates charged for the use of their electric transmission systems by its customers, which include investor-owned utilities, municipalities, cooperatives, power marketers and alternative energy suppliers. The Company's operations 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 hazardous materials and of solid and hazardous wastes, and impose obligations to investigate and remediate contamination in certain circumstances.

Executives

Edward G Jepsen	director	C/O AMPHENOL CORPORATION, 358 HALL AVENUE, WALLINGFORD CT 06492
Rejji P Hayes	officer: EVP & CFO	ONE ENERGY PLAZA, JACKSON MI 49201
Thomas G Stephens	director	777 JOSLYN ROAD, MC 483 720 540, PONTIAC MI 48340-2925
Dave R Lopez	director	100 N BROADWAY, OKLAHOMA CITY OK 73102
Lee C Stewart	director	PO BOX 816, SHARON CT 06069
Chris Franklin	director	762 W.LANCASTER AVE, BRYN MAWR PA 19010
Cameron M Bready	officer: EVP & Chief Financial Officer	3550 LENOX RD, ATLANTA GA 30326
Watts J C Jr	director