Entergy 2012 Annual Report Download - page 8

The next step in the transformation is the proposed spin-off and subsequent merger of our transmission
business with ITC Holdings Corp. The ITC transaction addresses the challenges the power industry
faces, including growing demand, aging infrastructure, expanding environmental regulations requiring
new capital investment, and changing demands of the transmission grid. Customers will benefit from
ITC’s proven independent business model for owning and operating transmission systems. As an
independent operator, ITC has a singular focus on transmission, which is expected to result in greater
safety, reliability and efficiency; facilitate investment; and over the long term, reduce production costs.
The transaction provides greater development opportunities for Entergy transmission employees, and it
increases the financial strength and flexibility of both the Entergy utility operating companies and ITC.
In 2012, Entergy and ITC began the regulatory approval process for the transaction. ITC has scheduled a
special meeting of shareholders on April 16 to vote on the transaction. We continue to plan for closing in
2013, pending regulatory approval and satisfaction of other closing conditions. As part of the successful
completion of the ITC transaction, the Entergy board of directors will consider the current dividend
policy. Entergy shareholders at the time of the ITC transaction close will become ITC shareholders.
While the Entergy dividend may change at that time, we expect dividend growth to our shareholders
from the combination of the Entergy and ITC dividends versus the current Entergy dividend. Also in
conjunction with the move of our transmission organization to ITC, we will review strategies to improve
efficiency within our organization. It’s an opportunity to rethink processes and structure, and further the
transformation of our business through the development of a high-performance culture.
Even as we pursue the transition to MISO and ITC transaction this year, we are evaluating other
opportunities to create sustainable value to all stakeholders across our portfolio. Near-term power
prices remain challenging for some nuclear generating units in certain competitive power markets. Some
of our EWC plants face potentially negative cash flows at today’s forward price curve. Just as we have
always done, we will assess our businesses to ensure our plans are flexible and able to adapt to high-
and low-price markets. In the near term, we will be diligent and operate as efficiently and productively
as possible while maintaining the safety and integrity of our plants. We will do everything we can to
operate cash-flow positive plants. We also advocate for efficient markets and the many benefits of nuclear
power including clean energy with virtually zero emissions, grid reliability and jobs and other economic
contributions to local communities.
In addition, one of our long-term objectives is to find ways to make our two businesses strategically
and financially independent of each other. There are many ways to achieve greater independence and our
focus is on identifying options that provide greater flexibility while decreasing risks for the benefit of
our stakeholders.
100 Years of Service
In 2013 we celebrate Entergy’s 100th anniversary and commemorate the founding of the Arkansas
Power Company in 1913 by Harvey Couch. He envisioned an integrated electric system that
included numerous sources of power at a reasonable price. While our yearlong celebration will
mark past successes, we will also be laying the groundwork throughout 2013 with Entergy’s
owners, customers, employees and communities for our next century of service.
Transitions | Entergy Corporation and Subsidiaries 2012
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