Edgar Filing: ENTERGY CORP /DE/

425

Update on

the Entergy Transmission

Spin-Merge Transaction into ITC

Meeting with Louisiana Chemical Association

November 13, 2012

Presented by Entergy Louisiana

Transmission Business

Filed by Entergy Corporation Pursuant to Rule 425

Under the Securities Act of 1933

Subject Company: Entergy Corporation

Commission File No. 001-11299

Entergy Forward-Looking Information

this

communication,

and

from

time

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, its Quarterly

Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012, and

other filings made by Entergy with the Securities and Exchange Commission (the “SEC”); (ii) the following

transactional factors (in addition to others described elsewhere

in this communication, in the preliminary

proxy statement/prospectus included in the registration statement on Form S-4 that ITC filed with the SEC

on September 25, 2012 in connection with the proposed transactions, and in subsequent securities filings)

involving risks inherent in the contemplated transaction, including: (1) failure to obtain ITC shareholder

approval, (2) failure of 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, Mid South TransCo LLC (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 an IRS ruling

approving

the

tax-free

status

the

transaction;

(iii)

legislative

and

regulatory

actions;

and

(iv)

conditions

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

On September 25, 2012, ITC filed a registration statement on Form S-4 with the SEC registering shares of ITC

common stock to be issued to Entergy shareholders in connection with the proposed transactions, but this

registration statement has not become effective. This registration statement includes a proxy statement of

ITC that also constitutes a prospectus of ITC, and will be sent to ITC shareholders. In addition, TransCo will

file a registration statement with the SEC registering TransCo common units to be issued to Entergy

shareholders in connection with the proposed transactions. Entergy shareholders are urged to read the

proxy statement/prospectus included in the ITC registration statement and the proxy statement/prospectus to

be included in the TransCo registration statement (when available) 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/prospectus and any other relevant documents because

they contain important information about TransCo and the proposed transactions. The proxy

statement/prospectus and other documents relating to the proposed transactions (when they are available)

can be obtained free of 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 to Entergy Corporation, Investor Relations,

P.O. Box 61000 New Orleans, LA 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.

Agenda

ITC Spin-Merge Transaction Overview

Benefits

ETR

–

ITC

Spin-Merge

Transaction

Approvals Required

Storm Response

The Transaction Parties –

ITC and Entergy

Entergy Transmission Operations

•

Over 15,800 transmission line

miles in Arkansas, Louisiana,

Mississippi, Missouri, New Orleans

and Texas

•

Pursuing proposal to join MISO

ITC

•

~15,100 transmission line miles

•

Serves Michigan, Iowa, Minnesota,

Illinois, and Missouri

•

Member of MISO and SPP

Pre/Post Merger –

Industrial Customer Effect

Targeted closing in 2013

SERVICES / BILLINGS

Utility

OpCos

Industrial

Customer

Account

Managers

Generation

Transmission

Distribution

Cust Srvs

Utility

OpCos

Industrial

Customer

Industrial

Customer

Account

Managers

Generation

Transmission

Distribution

Cust. Srvs

TransCo LLC

(New Holdco)

Transco Subs

Industrial

Customer

Industrial Customers will maintain same business relationship with Entergy

Benefits of ETR –

ITC Spin-Merge Transaction

ITC Spin-Merge Transaction Overview

Agenda

Approvals Required

Storm Response

U.S.

Transmission

Grid

–

Historically

Fragmented

and

Inefficient

Historically, transmission

infrastructure development in

the U.S. primarily

focused on connecting load

and resources within

balancing authority 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 ~130 balancing authority

areas (ownership is even more

fragmented)

Source: FEMA, NERC

115

138

161

230

345

500

The Transaction –

Benefits Customers and Other Stakeholders

•

Financial

Flexibility

and Growth

Operational

Excellence

Independence

Fosters

Regional

Planning

Provides proven business model for owning and operating transmission

systems

Aligns with national policy objectives to facilitate investment in local,

regional and inter-regional transmission, advance open access initiatives

and promote access to competitive energy markets

•

Ensures safe and reliable operations and continued strengthening of

overall grid performance through ITC’s singular focus on transmission

system performance, planning and operations

•

Leverages Entergy employees’ knowledge and experience and fully

utilizes Entergy’s world-class storm restoration process

•

Improves access to capital for transmission business and focuses

financial resources solely on transmission system performance

•

Strengthens ability of Entergy Operating Companies to make needed

investment in other areas of utility business

•

Instills confidence in wholesale markets by encouraging greater

participation and disclosure by third parties

•

Leads to a more comprehensive planning process and a broader

regional view than would otherwise be possible

ITC Spin-Merge Transaction Overview

Agenda

Storm Response

Approvals Required

Benefits of ETR – ITC Spin-Merge Transaction

ETR System Incident

Commander (SIC)

ITC System Incident

Commander (SIC)

System Section

Chiefs

System Planning

Section Chief

System Resource

Section

System Logistics

Section

Restoration

Prioritization Branch

Director

ITC Section

Chiefs

Entergy

Liaison

Coord.

(New

position)

ITC Technical/Management

employee assigned to

ETR System Command

Center in Jackson

ITC employee

ETR employee

Functional Incident

Commanders

(ex. Fossil, OPCO, Nuclear,

Gas)

Storm response organization will be modified to ensure

close coordination and interaction between Entergy and ITC

ETI

Customer

ITC Planning

Section

ITC Logistics

Section

ITC Resource

Section

Transmission Prioritization

Resource Coordination

Logistics Coordination

Storm

Response

–

Utilizing

Best

Practices

Storm Response

ITC Spin-Merge Transaction Overview

Agenda

Approvals Required

Benefits of ETR – ITC Spin-Merge Transaction

Pathway to Completion –

Required Approvals

Authority

Requirements

Entergy retail

regulators

•

Change of control of transmission assets

•

Affiliate transaction approvals related to steps in the spin / merge

FERC

•

Change of control of transmission assets (203 filing)

•

Acceptance of jurisdictional agreements (205 filing)

•

Acceptance

Ancillary

Services

Tariff

provide

services

until

MISO

full

integration (205 filing)

•

Authorization to assume debt / issue securities (204 filings)

•

Changes to System Agreement to remove provisions related to transmission

planning and equalization

•

ITC filing to establish new rate tariffs for the ITC operating companies

Nuclear Regulatory

Commission

•

Required for internal corporate reorganization in connection with spin-merge,

and to satisfy license conditions

Hart-Scott-Rodino Act

•

Pre-merger notification to review potential antitrust/competition issues

IRS

•

Private letter ruling substantially to the effect that certain requirements for the

tax-free treatment of the distribution of Transco are met

Securities and

Exchange Commission

•

ITC Form S-4 and Proxy Statement (including audited Transco financial

statements and disclosures), and

•

Transco Registration Statement

ITC shareholders

Approvals required for:

•

Merger,

Issuance

ETR

shareholders,

and

Amendment

ITC

charter

increase

authorized

number