Edgar Filing: ITC Holdings Corp.

425

IBEW/Entergy/ITC Meeting

Jackson Office

March 13, 2012

Filed by ITC Holdings Corp.

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

Subject Company: ITC Holdings Corp.

Commission File No. 001-32576

Entergy Forward-Looking Information

In this communication, and from time to time, Entergy makes certain “forward-looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995. Except to the extent required by the

federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements,

whether as a result of new information, future events, or otherwise.

Forward-looking statements involve a number of risks and uncertainties. There are factors that could

cause actual results to differ materially from those expressed or implied in the forward-looking statements, including

(i) those factors discussed in Entergy’s Annual Report on Form 10-K for the year ended December 31, 2011 and

other filings made by Entergy with the Securities and Exchange Commission; (ii) the following transactional factors

(in addition to others described elsewhere in this presentation and in subsequent securities filings) involving risks

inherent

the

contemplated

transaction,

including:

(1)

failure

obtain

ITC

shareholder

approval,

(2)

failure

Entergy and its shareholders to recognize the expected benefits of the transaction, (3) failure to obtain regulatory

approvals necessary to consummate the transaction or to obtain regulatory approvals on favorable terms, (4) the

ability of Entergy, Transco and ITC to obtain the required financings, (5) delays in consummating the transaction or

the failure to consummate the transaction, (6) exceeding the expected costs of the transaction, and (7) the failure to

receive

IRS

ruling

approving

the

tax-free

status

the

transaction;

(iii)

legislative

and

regulatory

actions;

and

(iv)

conditions of the capital markets during the periods covered by the forward-looking statements. The transaction is

subject to certain conditions precedent, including regulatory approvals, approval of ITC’s shareholders and the

availability of financing. Entergy cannot provide any assurance that the transaction or any of the proposed

transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions

will be consummated.

Additional Information and Where to Find It

ITC and Transco will file registration statements with the Securities and Exchange Commission (“SEC”)

registering shares of ITC common stock and Transco common units to be issued to Entergy shareholders in

connection

with

the

proposed

transactions.

ITC

will

also

file

proxy

statement

with

the

SEC

that

will

sent

the

shareholders

ITC.

Entergy

shareholders

are

urged

read

the

prospectus

and/or

information

statement

that will be included in the registration statements and any other relevant documents, because they contain

important information about ITC, Transco and the proposed transactions. ITC shareholders are urged to read

the proxy statement and any other relevant documents because they contain important information about

Transco and the proposed transactions. The proxy statement, prospectus and/or information statement, and

other

documents

relating

the

proposed

transactions

(when

they

are

available)

can

obtained

free

charge

from the SEC’s website at www.sec.gov. The documents, when available, can also be obtained free of charge

from

Entergy

upon

written

request

Entergy

Corporation,

Investor

Relations,

P.O.

Box

61000

New

Orleans,

70161

or by calling Entergy’s Investor Relations information line at 1-888-ENTERGY (368-3749), or from ITC

upon written request to ITC Holdings Corp., Investor Relations, 27175 Energy Way, Novi, MI 48377 or by calling

248-946-3000.

This communication is not a solicitation of a proxy from any security holder of ITC. However,

Entergy, ITC and certain of their respective directors and executive officers and certain other members of

management

and

employees

may

deemed

participants

the

solicitation

proxies

from

shareholders

of ITC in connection with the proposed transaction under the rules of the SEC. Information about the directors

and executive officers of Entergy, may be found in its 2011 Annual Report on Form 10-K filed with the SEC on

February 28, 2012, and its definitive proxy statement relating to its 2011 Annual Meeting of Shareholders filed

with the SEC on March 24, 2011. Information about the directors and executive officers of ITC may be found in

its 2011 Annual Report on Form 10-K filed with the SEC on February 22, 2012, and its definitive proxy statement

relating to its 2011 Annual Meeting of Shareholders filed with the SEC on April 21, 2011.

•

Welcome, introductions

•

Safety moment

•

Why are we here?

•

Background on ITC

•

What’s going to happen next and when?

•

What should employees know and do?

•

Questions and answers

Our Agenda

Safety

What is happening and why

•

Entergy to spin-off and merge its electric transmission business into ITC

•

Leadership will include:

—

Rick Riley, appointed to a senior executive position with responsibility for

transmission business system operations (equivalent of chief operations officer for

transmission

business),

reporting

the

chairman,

president

and

CEO

ITC.

—

Mike Vaughn, vice president, asset management, reporting to Riley.

—

Mark McCulla, vice president, reporting to executive vice president and chief business

officer, ITC.

•

ITC will integrate approximately 750 positions from Entergy, assume operations of Entergy

transmission and transmission-related facilities

•

Targeting completion of the transaction in 2013, subject to customary closing conditions

and necessary approvals

ITC to become one of the largest electric transmission companies in the U.S., with

subsidiaries from the Great Lakes to the Gulf Coast

ITC regional headquarters to be in Jackson, Miss.; ITC corporate headquarters to remain in

Novi, Mich.

Entergy has been pursuing this course of

action for over a decade

Increases flexibility of Entergy’s investment alternatives

Protects credit quality of Entergy and its OpCos

Supports efficient infrastructure investment

Improves access to capital for Entergy’s transmission business

Entergy Customers and Other Stakeholders

to Benefit From Independent Transco

Combines best operating practices of both Entergy and ITC

Brings ITC’s experience and track record of safe and reliable

operations to ensure continued strengthening of overall grid

performance

Leverages Entergy employees’

knowledge and experience and

fully utilizes Entergy’s world-class storm restoration process

Provides singular focus on transmission system performance,

planning and operations

Aligns with national policy objectives to facilitate investment in

regional and inter-regional transmission, advance open access

initiatives and promote access to competitive energy markets

Financial

Flexibility

and Growth

Operational

Excellence

Independent

and

Transparent

ITC Model

Complete independence (divestiture)

Today’s Announcement Builds on Key

Strategic Objectives

Why a Transco?

--As presented 11/8/2011

Singular focus in one critical area

–

Substantial investment

–

Technological change

–

Investment needs > depreciation level

Consistent

with

Congress

and

FERC

direction

Protects

improves

credit

quality

Operating

Companies

Why This Transaction?

Addresses Inefficient Transmission Framework

Transmission infrastructure

development in the U.S.

historically has been focused

primarily on connecting

load and resources

within control areas,

with little interregional or

national perspective

In contrast,…

U.S. Electric Power Transmission Grid

•

More than 211,000 high voltage

transmission line miles

•

Operated by 140 control areas

(ownership is even more fragmented)

Source: FEMA

115

138

161

230

345

500

December 2011

Introduction to ITC Holdings Corp.

Presentation to Entergy Employees

Jon Jipping, Executive Vice President

& Chief Operating Officer

Safe Harbor Language & Legal Disclosure

This

presentation

contain

certain

statements

that

describe

ITC

Holdings

Corp.

(“ITC”)

management’s

beliefs

concerning

future

business

conditions and prospects, growth opportunities and the outlook for ITC’s business, including ITC’s business and the electric transmission

industry

based

upon

information

currently

available.

Such

statements

are

“forward-looking”

statements

within

the

meaning

the

Private

Securities

Litigation

Reform

Act

1995.

Wherever

possible,

ITC

has

identified

these

forward-looking

statements

words

such

“anticipates”,

“believes”,

“intends”,

“estimates”,

“expects”,

“projects”

and

similar

phrases.

These

forward-looking

statements

are

based

upon

assumptions ITC management believes are reasonable. Such forward-looking statements are subject to risks and uncertainties which could

cause ITC’s actual results, performance and achievements to differ materially from those expressed in, or implied by, these statements,

including, among other things, (a) the risks and uncertainties disclosed in ITC’s annual report on Form 10-K and ITC’s quarterly reports on

Form

10-Q

filed

with

the

Securities

and

Exchange

Commission

(the

“SEC”)

from

time

and

(b)

the

following

transactional

factors

(in

addition to others described elsewhere in this document and in subsequent filings with the SEC): (i) risks inherent in the contemplated

transaction, including: (A) failure to obtain approval by the Company’s shareholders; (B) failure to obtain regulatory approvals necessary to

consummate the transaction or to obtain regulatory approvals on favorable terms; (C) the ability to obtain the required financings; (D) delays in

consummating the transaction or the failure to consummate the transactions; and (E) exceeding the expected costs of the transactions; (ii)

legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements.

Because ITC’s forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and

competitive uncertainties, many of which are beyond ITC’s control or are subject to change, actual results could be materially different and any

or all of ITC’s forward-looking statements may turn out to be wrong. They speak only as of the date made and can be affected by assumptions

ITC might make or by known or unknown risks and uncertainties. Many factors mentioned in this document and the exhibits hereto and in

ITC’s annual and quarterly reports will be important in determining future results. Consequently, ITC cannot assure you that ITC’s expectations

or forecasts expressed in such forward-looking statements will be achieved. Actual future results may vary materially. Except as required by

law, ITC undertakes no obligation to publicly update any of ITC’s forward-looking or other statements, whether as a result of new information,

future events, or otherwise.

The transaction is subject to certain conditions precedent, including regulatory approvals, approval of ITC’s shareholders and the availability of

financing. ITC cannot provide any assurance that the proposed transactions related thereto will be completed, nor can it give assurances as to

the terms on which such transactions will be consummated.

Safe Harbor Language & Legal Disclosure

ITC

and

Mid

South

TransCo

LLC

(“TransCo”)

will

file

registration

statements

with

the

SEC

registering

ITC

common

stock

and

TransCo

common

units

issued

Entergy

Corporation

(“Entergy”)

shareholders

connection

with

the

proposed

transactions.

ITC

will

also file a proxy statement with the SEC that will be sent to the shareholders of ITC. Entergy shareholders are urged to read the prospectus

and/or

information

statement

that

will

included

the

registration

statements

and

any

other

relevant

documents,

because

they

contain

important

information

about

ITC,

TransCo

and

the

proposed

transactions.

ITC’s

shareholders

are

urged

read

the

proxy

statement

and

any

other

relevant

documents

because

they

contain

important

information

about

ITC,

TransCo

and

the

proposed

transactions.

The

proxy

statement,

prospectus

and/or

information

statement,

and

other

documents

relating

the

proposed

transactions

(when

they

are

available)

can

obtained

free

charge

from

the

SEC’s

website

www.sec.gov.

The

documents,

when

available,

can

also

obtained

free

charge

from

Entergy

upon

written

request

Entergy

Corporation,

Investor

Relations,

P.O.

Box

61000

New

Orleans,

70161

calling

Entergy’s

Investor

Relations

information line at 1-888-ENTERGY (368-3749), or from ITC upon written request to ITC Holdings Corp., Investor Relations, 27175 Energy

Way, Novi, MI 48377 or by calling 248-946-3000

This presentation is not a solicitation of a proxy from any security holder of ITC. However, Entergy, ITC and certain of their respective

directors and executive officers and certain other members of management and employees may be deemed to be participants in the solicitation

of proxies from shareholders of ITC in connection with the proposed transaction under the rules of the SEC. Information about the directors and

executive officers of Entergy may be found in its 2010 Annual Report on Form 10-K filed with the SEC on February 28, 2011, and its definitive

proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on March 24, 2011. Information about the directors and

executive

officers

ITC

may

found

its

2010

Annual

Report

Form

10-K

filed

with

the

SEC

February

23,

2011,

and

its

definitive

proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on April 21, 2011.

Overview of ITC

ITC is an independent transmission-only

company headquartered in Novi,

Michigan

Originally formed when Detroit Edison

divested its transmission assets in 2003

Became publicly traded in 2005

Rapid growth through acquisition of the

Michigan Electric Transmission

Company in 2006 and ITC Midwest in

2007

Business model is singularly focused on

owning, operating and maintaining

transmission

Actively developing transmission

infrastructure required for reliability

needs and emerging long-term energy

policy

Leading Transmission Platform

Further establishes ITC as the leading transmission platform in the U.S.

Largest electric utility based on total transmission net PP&E & peak load served

Transmission Business

Net transmission PP&E ($bn)**

Network System Peak Load

26,100 MW

28,000 MW

Service Area

Seven states –

including

footprint in Michigan, Iowa,

Minnesota, Illinois,

Missouri, Kansas &

Oklahoma

Four states –

including

footprint in Arkansas, Texas,

Louisiana and Mississippi

Total Transmission Miles

Approximately 15,100

miles

Approximately 15,700 miles

9/30/2011 Net PP&E

$3.2 billion

$3.1 billion

RTO Membership

MISO & SPP

Currently Independent

Coordinator of Transmission

with anticipated full transition

to MISO by December 2013

Full Time Equivalent

Employees

Approximately 450*

Approximately 750*

* Excludes contract work force

** ITC, ETR & Pro forma ITC net PP&E as of 9/30/2011 based on GAAP, all other amounts per June 30, 2011 FERC Form 1

Why ITC?

Experienced transmission leadership team

Track record of regulatory success

Delivery on prior acquisitions and successful integration of

new systems into ITC business model

Demonstrated ability to build and manage infrastructure –

invested $2.3 billion of capital in our systems since 2004

Well established and experienced in MISO and SPP RTOs

Benefits

independence

–

financial,

operational,

regulatory

Commitment to excellence and “doing the right thing”

Operational Excellence

Culture at ITC supports our vision to be the best

transmission company in the country

Fundamental focus on:

Safety

Reliability

Compliance

Project Execution

People

Results affirm our

direction

Employee Impacts:

You will not be moving to Michigan; ITC committed to maintaining

local

presence

By and large, do not anticipate significant changes to existing organizational

structure

Need to maintain focus on quality operations

As the holding companies integrate, there may be changes in some

operational functions

After closing, efforts will be focused on transitioning operations from Entergy

and integrating other functions as necessary

Former Entergy businesses will be separate business entities, although the

focus will be to combine operations, processes and procedures, to capture

the best practices of each company

What’s going to happen next, and when?

What’s next?

•

Transaction subject to several approvals, including: Entergy’s retail

regulators, FERC, ITC shareholders .

•

Entergy and ITC will form a team to address business and

organizational issues, as well as employee matters.

—

Next steps for that team will be communicated to you in the near

future.

•

More information will be provided for employees on a Web page on

the

intranet.

Pathway to Completion –

Required Approvals

Jurisdiction / Authority

Approval(s)

Entergy retail

regulators

(APSC, LPSC, MPSC,

PUCT, CCNO)

•

Change of control of transmission assets

•

Authorization to incur debt in some jurisdictions

FERC

•

Change of control of transmission assets

•

Establishment of new regulatory construct for new

ITC subsidiaries

•

Authorization for operating company financings

Hart-Scott-Rodino Act

(DOJ / FTC)

•

Pre-merger notification to review potential antitrust

and competition issues

IRS Private Letter

Ruling

•

Ruling regarding tax-free treatment of the distribution

of Mid South TransCo LLC (new Holdco)

ITC shareholders

•

Merger

•

Amendment to ITC Articles of Incorporation to

increase the number of authorized shares

•

Authorization for issuance of greater than 20% of

outstanding shares

Approvals Required*

*Approvals may be required in Missouri and Tennessee due to limited assets in those territories. Approval may be required in Oklahoma for ITC.

What should employees know and do

as a result of this announcement?

What to know, what to do

•

From today to transaction close, Entergy will run its business separate

and apart from ITC, focused on achieving existing business outcomes

and objectives.

•

You continue to report to your current supervisor, who will be

responsible for priorities and work plans for your group, and for

working with you on performance and career development.

•

Employees should focus on the business at hand:

Providing safe and reliable service.

•

Do not have detailed breakdown on employees moving to ITC.

•

Groups with some workforce movements to ITC: Energy Delivery,

Information Technology, some grid support employees in Utility

Operations, some employees in Supply Chain.

•

ITC does not now operate in Louisiana, Arkansas, Mississippi, Texas.

•

We anticipate the vast majority of employees moving to ITC will

remain at current work sites.

—

As with any merger, it is inevitable that there will be some

movement.

•

ITC will assume and honor collective bargaining agreements for all

bargaining employees who move to the new company.

•

Outsourcing of any support functions has not been evaluated.

Employee Matters

•

Entergy and ITC have formed a joint implementation team to address

business and organizational issues, as well as employee matters.

—

•

Very strict legal requirements governing how and when we

communicate information, so we ask for your patience.

•

Entergy will continue efforts to move to MISO.

Transmission Spin-off/Merger Update

Joe

Domino

the

PMO

Lead

for

ETR,

Jon

Jipping

for

ITC

Currently

the

Analysis

Phase

Then

will

transition

the

Design

Phase,

followed

the

Implementation Phase

Questions and answers