Update on

Update on

Entergy Transmission

Entergy Transmission

Spin/Merger with ITC

Spin/Merger with ITC

Meeting with TIEC

July 18, 2012

Presented by Entergy Texas

Filed

by

Entergy

Corporation

Pursuant

to

Rule

425

Under

the

Securities

Act

of

1933

Subject

Company:

Entergy

Corporation

Commission

File

No.

001-11299

1

1

Entergy Forward-Looking Information

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, its

Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, 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 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, 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 of 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.

2

2

Additional Information and Where to Find It

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 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 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 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.

2

3

3

Agenda

Agenda

ITC Spin-Merge Transaction Overview

Rate Effects of Spin-Merge Transaction

Benefits

of

ETR

–

ITC

Spin-Merge

Transaction

Approvals Required

Storm Response

2014 Billing Process Post Spin/Merge

4

4

The Merger Transaction –

The Merger Transaction –

End State

End State

•

Entergy Utility Operating Companies comprised of:

–

Generation

–

Distribution

•

~$1.775B of debt will be issued by Entergy in

connection with the internal separation of the

transmission business, the proceeds from which

will be used for debt reduction

•

Each Entergy Utility Operating Company's capital

structure after the spin-off and merger anticipated

to be consistent with capitalization prior to the

transaction

Entergy

Shareholders

Parent

Creditors

Utility

OpCos

Entergy

Wholesale

Commodities

OpCo

Creditors

Entergy

Shareholders

Mid South

TransCo LLC

(New Holdco)

ITC

Shareholders

ITC Merger

Sub

Transco Subs

Illustrative

•

Prior to the merger, ITC

expects to effectuate a $700M

recapitalization currently

anticipated to be a special

dividend

•

Entergy shareholders to merge

spun transmission business with

ITC merger subsidiary

•

New Holdco to survive

•

Entergy

shareholders

to

receive

50.1%

of

ITC

stock

5

5

Benefits of ETR –

ITC Spin-Merge Transaction

ITC Spin-Merge Transaction Overview

Agenda

Agenda

Rate Effects of Spin-Merge Transaction

Approvals Required

Storm Response

2014 Billing Process Post Spin/Merge

6

6

Financial

Flexibility

and Growth

Operational

Excellence

Independent

and

Transparent

ITC Model

Overview

Overview

of

of

Benefits

Benefits

to

to

Customers

Customers

Through

Through

Spin-Merge

Spin-Merge

•

Increases flexibility of Entergy’s investment alternatives

•

Protects credit quality of Entergy’s Operating Companies

•

Supports efficient infrastructure investment

•

Improves access to capital for transmission business

•

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 local, regional and inter-regional transmission, advance  

open access initiatives and promote access to competitive

energy markets

7

7

ITC Spin-Merge Transaction Overview

Agenda

Agenda

Benefits

of

ETR

–

ITC

Spin-Merge

Transaction

Storm Response

Rate Effects of Spin-Merge Transaction

Approvals Required

2014 Billing Process Post Spin/Merge

8

8

Supply Chain

Operations

Resource

Logistics

Administration

Preliminary pre-design phase vision

Final design scheduled 9/2012

ITC employee

ETR employee

ETR System Incident

Commander (SIC)

John Mullins

ITC System Incident

Commander (SIC)

Greg Grillo

System Section

Chiefs

System Planning

Chief

Planning Support

Branch Director

Restoration

Prioritization

Risk Analysis

Situation Branch

ITC Storm

Response

Organization

ITC-ETR

liaison

(New

position)

Functional Incident

Commanders

(ex. Fossil, Distribution,

Nuclear, Gas)

Supply Chain

Operations

Resource

Logistics

Administration

ITC Technical/Mgmt

employee assigned to

ETR storm response

center in Jackson

Storm

Storm

Response

Response

Organization

Organization

Will

Will

Be

Be

Modified

Modified

to

to

Ensure

Ensure

Close

Close

Coordination

Coordination

and

and

Interaction

Interaction

Between

Between

Entergy

Entergy

and

and

ITC

ITC

9

9

Storm Response

ITC Spin-Merge Transaction Overview

Agenda

Agenda

Benefits

of

ETR

–

ITC

Spin-Merge

Transaction

Rate Effects of Spin-Merge Transaction

Approvals Required

2014 Billing Process Post Spin/Merge

10

10

10

Transition from current retail rate construct to FERC-regulated rate construct

expected for ITC

Analysis assumes MISO base ROE for Entergy transmission business

(12.38%) and capital structure currently utilized by ITC Operating Companies

(60% equity/40% debt)

Benefits of credit quality improvement resulting from transition to FERC-

regulated rate construct partially offset ROE and capital structure impacts

Forward Test Year: Eliminates regulatory lag in recovery of capital

investments

One-time impact of conversion to forward test year

Reflects amounts that would have been collected in future years

MSS-2 construct eliminated post-transaction

Current

estimation

reflects

effect

of

paying

load

ratio

share

of

Transmission

cost factoring in zonal investment and retail share of Transmission

investments

Rate Impacts Split into WACC, Rate Timing, and

Rate Impacts Split into WACC, Rate Timing, and

Net Other Effects for Retail Customers

Net Other Effects for Retail Customers

WACC

Effects

Rate

Timing

Effects

Net Other

Effects

11

11

11

Illustrative

Note:

Contents exclude estimated

one-time rate timing effect of

$228.18 in 2014 due to

conversion to forward test

year –

reflects amounts that

would have been collected in

future years

ETI

LIPS

Bill

–

5,000

kW,

80%

Load

Factor;

$

170,000

168,000

166,000

164,000

162,000

4,000

2,000

0

Illustrative Bill

if ITC owns

T assets –

post-transaction

~166,959.02

2014

Net Other Effects

~(451.91)

2014

WACC Effects

~448.58

Illustrative Bill

if ETR owns

T assets –

status quo

166,962.35

Note: Illustrative bill is the average of the 2011 Typical Monthly Bills for a Large Industrial Power Service (LIPS) customer using 5,000 kW at an

80% Load Factor, excluding taxes. Calculation indicative and illustrative of the rate effects of the spin-merge transaction and is not meant to project

an

actual

future

customer

bill.

Illustration

does

not

include

effects

of

any

future

potential

changes

in

fuel

prices,

rate

cases

between

now

and

transaction close date, or rate timing effects such as adoption of Forward Test Year or modified depreciation schedules.

ETI Typical LIPS Customer Bill Not Expected to

ETI Typical LIPS Customer Bill Not Expected to

Increase Post Spin-Merge Due to Transaction Effects

Increase Post Spin-Merge Due to Transaction Effects

~(3.33)

0.0%

Over the long term, customer

bill effects expected to be

mitigated by...

Enhanced Financial

Flexibility

Operational Excellence

Reliability, System

Performance, Scale

Efficiencies, etc.

Independent and

transparent ITC model,

which supports robust

markets and competition

12

12

Storm Response

ITC Spin-Merge Transaction Overview

Agenda

Agenda

Benefits

of

ETR

–

ITC

Spin-Merge

Transaction

Approvals Required

Rate Effects of Spin-Merge Transaction

2014 Billing Process Post Spin/Merge

13

13

Proposed

MISO

Attachment O *

for ITC

Reviews

Attachments

*Attachment O:

FERC approved formula rate template

establishing formula to calculate  revenue requirements;

does

not

require

FERC

approval

for

annual

updates

One-Time

Request/Approval

ITC Wholesale Rate Calculation Process

ITC Wholesale Rate Calculation Process

Updates

Attachment O Rate

Templates

(includes forward test

year estimate and prior

year true-up)

Reviews

Attachment

O Rate

Templates

Annual

Post Final

Attachment

O Rate

Templates

Mods

Req’d?

Y

N

Add’l

Data

Req’d?

Y

N

Prepare

Data

Requested

~ Dec 1

Reviews

Proposal

Apprvd

?

N

Y

Post

Attachment

O Rate

Templates

~ Sept 1

14

14

Projected Rate

Base

PAR

PGRRBGG

PGRRWGG

PNRR

PAOCNRWTU

Projected Weighted

Average Cost of

Capital

(WACC)

x

Projected Expenses

(O&M, Depreciation,

Taxes)

Projected Attachment

GG (sch 26) Rev

Requirement

Revenue Credits

(rent of property, short

term point-to-point

revenue, etc.)

Projected Network

Load

12CP Load

(ITCM Annual Sys Avg

Peak in kW month)

True Up Adjustment –

Over (Under)

Recovery from Prior

Year + Interest

Projected Allowed Return

(PAR)

Projected Gross Revenue

Requirement before Attachment

GG (Schedule 26) offset

(PGRRBGG)

Projected Attachment O

Calculated Network Rate ($/kW

month) For Next Calendar Year

without True Up

(PAOCNRWTU)

Projected Attachment O

Calculated Network Rate for Next

Calendar Year with True Up

=

=

=

=

=

=

Projected Gross Revenue

Requirement with Attachment GG

(Schedule 26) offset

(PGRRWGG)

Projected Net Revenue

Requirement

(PNRR)

+

–

–

+

÷

ITC Attachment O –

ITC Attachment O –

Wholesale Rate Calculation

Wholesale Rate Calculation

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

15

15

2014 Billing Process Post Spin/Merge

2014 Billing Process Post Spin/Merge

Billing Calc for

ITC and MISO Srvs

per applicable rate

schedules

Wholesale

Transmission

Customers

including

Submit

Reservation

Request

OASIS

(point-to-point

usage)

Receive

Revenue for

Usage of ITC

Transmission

Receive

Cash

Retain

Revenue for

MISO Srvs

Generate Retail

Customer

Bill by Class

Receive Bill

($ owed,

usage, etc.)

Wire

Payment

Retail

Cust.

Bill

Req’d?

Y

N

End

Network

Load

(usage)

16

16

Storm Response

ITC Spin-Merge Transaction Overview

Agenda

Agenda

Benefits

of

ETR

–

ITC

Spin-Merge

Transaction

Approvals Required

Rate Effects of Spin-Merge Transaction

2014 Billing Process Post Spin/Merge

17

17

Pathway to Completion –

Pathway to Completion –

Required Approvals

Required Approvals

Authority

Requirements

Entergy retail

regulators

•

Change of control of transmission assets

•

Affiliate transaction approvals related to steps in the spin / merge

•

Authorization to incur debt in some jurisdictions

FERC

•

Change of control of transmission assets (203 filing)

•

Acceptance of jurisdictional agreements (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

Hart-Scott-

Rodino Act

•

Pre-merger notification to review potential antitrust and 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 of shares to ETR shareholders, and

Amendment to ITC charter to increase authorized number of shares