ITC HOLDINGS CORP. / 2012 ANNuAL RePORT

2012

Independence. Leadership. Performance.

Solid PerformanceOperating results

Operating Revenues $ 831 $ 757 $ 697

Net Income 188 172 146

Operating Earnings* 216 174 146

Cash Flows from Operations 328 381 423

Investments in Property, Plant & Equipment 820 633 455

Dividends Paid Per Share 1.460 1.375 1.310

earnings per share

Basic Earnings Per Share $ 3.65 $ 3.36 $ 2.89

Diluted Earnings Per Share 3.60 3.31 2.84

Operating Diluted Earnings Per Share* 4.14 3.35 2.84

Balance sheet

Property, Plant & Equipment (Net of Depreciation) $ 4,135 $ 3,416 $ 2,872

Total Assets 5,565 4,823 4,308

Total Debt 3,147 2,645 2,497

Total Equity 1,415 1,259 1,117

2012 Financial Highlights (in millions, except dividends and earnings per share data)

2012 2011 2010

2010

2011

Three-Year Results

net prOperty, plant & equipment (in millions)

Operating diluted earnings per share

dividends per share

$3,416$2,872

$4,1352012

2010

2011 $3.35

$2.84

$4.142012

2010

2011 $1.375

$1.310

$1.4602012

*Based on Non-GAAP financial measures. See page 12 for GAAP reconciliations.

ITC at-a-glance:

5

43

7

13

A

B

C Our service area

Owns approximately

of transmission lines

megawatts

Serves a combined peak load of

circuitmiles

total shareholder

returnsince IPO, July 26, 2005

invested in capital improvements

The Nation’s

ST fully

transmission company

ITCTransmissionMETC

ITC Midwest

ITC Great Plains*

*ITC Great Plains development area:A. KETAB. V-PlanC. Hugo-Valliant

MISO-designated MVP Projects:3, 4, 5, 7, 13

above data as of year-end 2012

Independence. Leadership. Performance.These three words sum up our first decade. Validating the independent model established at the company’s

founding in 2003, ITC has become a pure-play leader in the electric transmission space. Together with

strong operational and financial performance, we are well-positioned to thrive over the long term.

ITC HOLDINGS CORP. / 2012 ANNuAL RePORT

2012

To Our Shareholders:

When we formed this company 10 years ago, we made a commitment

to our customers, stakeholders, communities and those who would become

our shareholders. Ours was a pledge of independence, industry leadership

and performance. ITC’s promise was to deliver the tangible value and

benefits inherent in our unique independent transmission business model.

A decade later, on behalf of the employees of ITC, I am proud to report that

we have delivered on these commitments and are well positioned to

continue to do so going forward. To date, we have successfully executed our

strategy targeted at remediating the industry-wide effects of decades of

underinvestment in transmission systems by improving reliability,

providing non-discriminatory access to transmission service, promoting

competition in electric energy markets and facilitating interconnection of

new generation and load. This strategy has delivered benefits to all of our

stakeholders that continue to this day.

ITC HOLDINGS CORP. 1

Joseph L. Welch – Chairman, President and Chief Executive Officer

We reached our 10-year milestone by successfully acquiring and integrating

three transmission businesses, pioneering a transmission-only utility from the

ground up, identifying and facilitating critical regional transmission

infrastructure, establishing a portfolio of actionable transmission

development projects and partnering with local utilities on transmission

projects. The timeline within this letter outlines these significant events in our

history and demonstrates the numerous accomplishments we were able to

achieve in our first 10 years. From commitment to completion, our experiences

and successes thus far provide a solid foundation as we move forward into

the next decade and beyond.

As we accomplished these many things over the past decade, we quickly

emerged as an industry leader. ITC has been instrumental in advancing policy

and regulatory reforms designed to facilitate the transmission investment

necessary to provide a viable solution for many of the energy challenges we

face and to deliver a broad range of benefits, including enhanced reliability

and improved economic efficiency of the grid. Although 2012 proved to be a

year of ongoing evolution for transmission policy, many of the key principles

supporting transmission investments were reinforced, and ITC was once again

able to demonstrate the benefits of the independent model, building on our

history of facilitating virtually all of the Federal Energy Regulatory

Commission’s (FERC) policy objectives.

With the submission of the first phase of compliance plans for FERC Order

1000 in fall 2012, we are now on a transformative path for regional

transmission development for all regions across the country. Both of the

progressive regional transmission organizations that ITC currently operates

within, Midwest Independent Transmission System Operator, Inc. (MISO) and

Southwest Power Pool (SPP), have made large strides in meeting Order 1000

principles and have already demonstrated the numerous benefits brought

through the regional planning and regional cost allocation principles

prescribed in the order.

We also saw FERC codify its policies for applying incentives to transmission

projects through its Policy Statement on Promoting Transmission Investment

Through Pricing Reform issued in late 2012. This policy statement provides

clarity and guidance on how FERC will continue to incentivize certain

transmission projects going forward and is consistent with the application of

these incentives in recent FERC orders. As a result of this Policy Statement,

the Commission has now provided constructive closure to the Notice of Inquiry

issued on this matter in 2011. In doing so, FERC has demonstrated its

commitment to continue providing incentives to transmission infrastructure

investments going forward.

2003 2005JULY: Initial public offering of the company’s

shares on the New York Stock Exchange

MARCH: ITC becomes the first stand-alone

transmission company in the U.S. and begins

operations with 38 full-time employees

Celebrating 10 Years ofIndependence

2

The supportive and consistent regulatory policies stemming from the last two

decades, combined with numerous drivers for critical transmission

infrastructure investment, have propelled our strategy over the past 10 years

and will continue to support it going forward. We are in the infancy of a

longer-term period of significant and sustained transmission investment

necessary to address historical underinvestment as well as transform the

transmission grid to meet the needs of today and the future.

This past year also proved to be another strong year for ITC, effectively

marking our first decade of consistently delivering strong operational,

financial and strategic performance. Our overarching strategy continues to

produce these results and is premised on investing in our core systems in

order to achieve operational excellence while also building our leadership

position in developing a 21st-century grid. Since service reliability is critical to

all that we do, operational excellence has been a natural focus and hallmark

of our first decade, including 2012. Achieving these standards is only

meaningful if our employees are provided with every opportunity to work in a safe

environment. I am pleased to report that we incurred zero safety incidents within

the year at our Michigan operating companies, ITCTransmission and METC.

Overall, ITC currently ranks in the top 10% in industry safety performance.

Keeping our employees safe is a number-one priority for ITC and is ingrained

within our culture as we proactively bring employee safety to the forefront

every day.

Our focus on operational excellence also translated into our system

performance. We continued to achieve excellent reliability at ITCTransmission

and METC and experienced a significant improvement in reliability at ITC

Midwest. This is especially noteworthy since both METC and ITC Midwest

reached new peak record loads during the summer of last year. The reliability

of our Michigan systems now rank in the top 10% of companies nationally,

based on the number of sustained outages per circuit and outage duration.

The system performance of ITC Midwest has demonstrated steady

improvement over the past few years. In addition, our investments in this

system have reduced curtailments, resulting in increased capacity and a more

robust market.

This past year also proved to be another strong year for ITC, effectively marking our first decade of consistently delivering strong operational, financial and strategic performance.

2006AUGUST: ITC Grid Development and ITC Great

Plains were formed to pursue new development

opportunities in the Southwest Power Pool region

2007OCTOBER: ITC acquired Michigan Electric

Transmission Company, LLC (METC), expanding

coverage to most of Michigan’s Lower Peninsula

DECEMBER: ITC Midwest acquired the

transmission assets of Interstate Power & Light

(Iowa, Illinois, Minnesota, Missouri)

ITC HOLDINGS CORP. 3

Our system performance is a direct result of our execution of our capital

investment programs, which remained strong in 2012 as we embarked on

and completed numerous transmission infrastructure projects. In particular,

we energized our first two large regional infrastructure development projects,

the Hugo-Valliant project and the KETA project, on or ahead of schedule. Both

projects will improve the reliability and efficiency of the regional grid and

result in more affordable energy being available to customers. In addition, it

is worth noting that the KETA project was completed not only ahead of

schedule but also significantly under budget. The successful construction of

these projects in a cost-effective manner demonstrates our strategic

strengths within the transmission development space. We were very pleased

with the completion of these new greenfield transmission development

projects that were made possible through our collaborative partnerships

within the SPP region.

We also worked to keep other key, large transmission infrastructure projects solidly

on track, including the Salem-Hazleton project, the Thumb Loop project and the

Kansas V-Plan project. All of these projects will reduce system congestion, provide

more efficient and cost-effective transmission of energy and increase access to a

broader range of generation resources. These projects contributed to our total

capital investment in 2012 of approximately $820 million, marking another

important milestone for ITC as we significantly surpassed capital investment

levels achieved in prior years, even as the composition of our plans move more

toward larger, regional infrastructure projects.

Our independence and leadership within the industry continued to support our

strategic initiatives last year. These initiatives are largely focused on

developing regional transmission infrastructure to realize the numerous

benefits this infrastructure brings, including more effective competitive

wholesale power markets. Within MISO, we continued to advance our portions of

the four multi-value projects (MVPs) approved by the regional transmission

organization in December 2011. Upon completion, these projects are expected

to provide broad regional benefits commensurate with costs and also support

approved state and federal energy policy mandates in the MISO region.

According to MISO, the total MVP portfolio of projects will deliver benefits in

excess of 1.8 to 3.0 times its costs. We also announced the ITC Great Plains

Expansion Project, which was submitted to the SPP in October. This project is

composed of a portfolio of high-voltage electric transmission projects in the

SPP region and was the culmination of an extensive study process to identify a

solution to integrate a variety of energy sources, enhance grid reliability and

provide flexibility and optionality throughout the SPP footprint. The proposed

project draws upon ITC’s track record as a best-in-class independent

transmission developer and operator and is supported by the success of our

existing projects and partnerships with local utilities in the Great Plains region.

2010NOVEMBER: ITC Great Plains celebrates

groundbreaking for the KETA transmission

line project

2011OCTOBER: Thumb Loop 140-mile

transmission project in Michigan

begins construction

FEBRUARY: ITC announces the Green Power

Express Project in the upper Midwest

Our 2012 results once again demonstrate that we are committed as a company and a management team to setting achievable goals that benefit all of our constituents, including our shareholders.

20094

While we made impressive progress on our stand-alone strategic initiatives, we

also forged ahead with multiple regulatory filings and advancing other approvals

required in order to successfully close the transaction we announced with Entergy

Corporation at the end of 2011, under which Entergy will separate its transmission

business and merge it into ITC. This transaction builds on ITC’s independent

model, leveraging the benefits this model brings in improving reliability, increasing

the economic efficiency of wholesale competitive markets and positioning ITC as a

strong leader in the development of a more regional grid. As a result, the

transaction will serve to strengthen ITC’s overall business model and build on our

strategic goals of investing in transmission infrastructure for the benefit of

customers. Upon completion of the proposed merger, ITC will become one of the

nation’s largest transmission-owning utilities, with a network spanning from the

Great Lakes to the Gulf Coast. The advancements made in 2012 around securing

the necessary approvals put the transaction on track to close in 2013.

Our ability to deliver consistent growth and results is largely driven by our

independent transmission-only model and has a direct correlation with our

operations. As a result of our strong operational performance in 2012, we once

again reported solid financial performance, with operating net income of

approximately $216 million and operating diluted EPS of $4.14, an increase of

approximately 24% over 2011 operating results. Our 2012 results demonstrate

that we are committed as a company and a management team to setting

achievable goals that benefit all of our constituents, including our shareholders.

Since our initial public offering, we have produced a total shareholder return of

approximately 305%.

COmPaRISON Of fIve-yeaR CUmULaTIve TOTaL ReTURN(Assumes initial investment of $100 and reinvestment of dividends)

‘07 ‘08 ‘09 ‘10 ‘11

ITC HOLDINGS CORP.

Dow Jones US Utilities Index

S&P 500 Index - Total Returns

$50

$100

$150

$200

‘12

‘07 ‘08 ‘09 ‘10 ‘11

ITC HOLDINGS CORP.

Dow Jones US Utilities Index

S&P 500 Index - Total Returns

$50

$100

$150

$200

‘12

‘‘

‘‘

DECEMBER: ITC Holdings Corp. and Entergy

Corporation announced agreement under which

Entergy will separate and then merge its electric

transmission business into ITC

2012JUNE: ITC Great Plains energized phase I of

the KETA transmission line in Kansas

ITC HOLDINGS CORP. 5

DECEMBER: ITC announced it was undertaking

portions of four newly-announced multi-value

projects in the MISO region

ITC Holdings Corp. Return % – -20.74 22.79 21.77 24.77 3.38 Cum $ 100.00 79.26 97.32 118.51 147.87 152.87

S&P 500 Index - Return % – -36.99 26.45 15.07 2.12 15.98Total Returns Cum $ 100.00 63.01 79.68 91.68 93.62 108.59

Dow Jones Return % – -30.25 12.61 7.80 19.15 1.76US Utilities Index Cum $ 100.00 69.75 78.54 84.67 100.88 102.65

2007 2008 2009 2010 2011 2012

Our financial performance

is a direct reflection of

ITC’s investments in

transmission infrastructure

to achieve excellent service

reliability, increase access

to competitive power

markets, interconnect new

generation resources and

advance a 21st-century grid.Cameron M. Bready

Executive Vice President and Chief Financial Officer

In addition to our success in continuing to grow our business in 2012, we also increased our dividend by approximately

7% in August 2012. This increase represented our seventh consecutive year of increasing our dividend rate. With this

increase, our dividend has now grown from $1.05 to $1.51 since our initial public offering in 2005, resulting in a total

increase of 43.8% and a compound annual growth rate of approximately 5.3%.

While the stock market proved challenging for utility stocks in 2012, ITC’s shares outperformed the Dow Jones Utility Index

for the fifth straight year with a total return for 2012 of 3.4% compared to a total return for the Dow Jones Utility Index of

approximately 1.8%. Over the past five years, ITC’s total shareholder return has been approximately 53%. We believe that

our business model, robust growth prospects and entrepreneurial culture provide the ability to deliver on our plan and

continue to create value for our shareholders.

We have reached many milestones over a 10-year period, all of which highlight our dedication to delivering on our

ambitious goals and the commitments we have made to our customers and shareholders. It is this same philosophy that

serves our plans and commitments. Our 2012 results provided a solid start to our long-term stand-alone plan, which

includes capital investments of $4.2 billion over the 2012 through 2016 time period. The investments within this plan are

expected to result in a compound annual growth rate in operating earnings per share of approximately 15-17% over this

period. Our current stand-alone plan does not reflect the closing and integration of the Entergy transmission business.

We remain confident in our ability to successfully complete the transaction and anticipate that the pro forma business will

produce incremental value relative to what we can achieve on a stand-alone basis.

Today ITC is a leader in the development of a 21st-century power grid, and we are well positioned to thrive over the long

term in an evolving electric industry. Our independence, leadership and performance brought us here, and they point the

way forward. We will sustain the business we have built over the last decade while continuing to grow in order to deliver

on the essential benefits that our business model brings to customers and all stakeholders. We thank you, our

shareholders, for your continued support and interest in ITC.

6

2012OCTOBER: ITC submits ITC Great Plains

Expansion Project to SPP; five electric

transmission projects; 2,700 miles

NOVEMBER: ITC Great Plains breaks ground

on 122-mile Kansas V-Plan transmission

line project

Joseph L. Welch – Chairman, President and Chief Executive Officer

DECEMBER: ITC Great Plains energized

phase II of the KETA transmission line in

Kansas, completing the 174-mile ITC segment

JULY: ITC Great Plains energized 18-mile

Hugo-Valliant transmission line and

substation in southeastern Oklahoma

ITC HOLDINGS CORP. 7

‘‘

‘‘Much of ITC’s success to

date and our ability to grow

is based upon our reputation

in the industry as the leading

independent transmission

company. Our strong business

processes, rooted in a robust

compliance program, are critical

to building and maintaining this

strong reputation.

Daniel J. Oginsky Senior Vice President and General Counsel

3

2

1*development area

1. Kansas anD OKLahOMaITC Great Plains placed its portion of the KETA (Spearville-Axtell) high-voltage electric transmission project into service in 2012. The 345 kV line totaling 227 miles from Spearville, Kan., to Axtell, Neb., will improve the reliability and efficiency of the regional grid and make more affordable energy available to customers. Our development partnerships with Sunflower Electric Power Corp. and Midwest Energy were crucial to the completion of the project.

Also in 2012, ITC Great Plains placed its Hugo-Valliant high-voltage electric transmission line and substation project into service in southeastern Oklahoma. The 18-mile, 345 kV line and substation were implemented to reduce system congestion, provide more efficient and cost-effective transmission of energy and increase access to a broader range of generation resources. The project was built in conjunction with Western Farmers Electric Cooperative.

2. IOWaITC Midwest is on track to complete the Salem-Hazleton project in 2013. This 81-mile, 345 kV line connecting Dubuque and Buchanan Counties in eastern Iowa was long identified by regional planners as needed to resolve system constraints and reduce energy costs. In a continuing effort to improve electric reliability, ITC Midwest has completed dozens of projects in its first five years to upgrade lines and substations.

After receiving approval from MISO in late 2011 to construct portions of four multi-value projects (MVPs) in the Midwest, in 2012 we began routing work and preparations for siting applications at the necessary state public service commissions for these projects.

3. MIChIGanConstruction continues on the Thumb Loop project, a 140-mile, 345 kV line and four new substations tracing the state’s Thumb region. This ITCTransmission project will provide a modern transmission backbone for the Thumb region as part of a system designed to meet the identified maximum wind energy potential of that region. Approximately 60 miles of this 345 kV project will be placed into service in 2013, with the remaining 80 miles expected to go into service in 2015.

ITCTransmission completed a project in 2012 that dated to the company’s origins in 2003. We placed two phase-angle regulators (PARs) into service. These large transformers are linked to three other PARs in the Lake Erie region designed to improve service reliability for electricity customers by mitigating unscheduled flows of electric power.

Independencedrives Transmission Infrastructure Investment

ChaRITaBLE GIVInGThe ITC Charitable Giving Program brings together under one umbrella the various philanthropic efforts the

company has supported over the years. Under the program this past year, we awarded grants to deserving

organizations across our footprint. Our grants support four areas that reflect the values of ITC: education,

environmental stewardship, social services, health and wellness. This program is in keeping with ITC’s

reputation as a good neighbor and strong supporter of the many communities we serve.

EnVIROnMEnTaL sTEWaRDshIPITC has long been committed to making environmental concerns an integral part of its planning and decision-making process. We take great pride in the environmental planning that takes place with our facilities and our capital projects.

ITC received its fourth series of Wildlife at Work certifications in 2012, which recognize conservation efforts by corporations that collaborate with management, employees and the community to conserve and restore wildlife habitats on corporate lands. ITC also was recognized this past year with the U.S. Environmental Protection Agency’s SF6 Team Leadership Award, the Michigan Department of Environmental Quality’s Clean Corporate Citizen award, and the Detroit Free Press Green Leaders honor.

Leadership in Corporate Responsibility

‘‘‘‘While ITC’s footprint spans numerous states, we appreciate that transmission is a local issue to the communities we serve. So we work hard to be a good neighbor with area leaders and residents to improve communities, and we work closely with transmission customers to ensure they receive excellent service from us.

Linda h. Blair Executive Vice President and Chief Business Officer

8

ITC HOLDINGS CORP. 9

saFETY anD RELIaBILTYBecause service reliability is critical to everything that we do, operational excellence is a constant focus and calling card for ITC. As a direct result of our maintenance and capital investment programs, we have improved the performance of every system we have acquired.

However, service excellence is meaningless without equal vigilance toward safety. Our employees and contractors are provided every opportunity to work in a safe environment.So in the course of providing the most reliable electric transmission service, we will under no circumstances compromise the safety of our employees, contractors or the public.

ITC’s Michigan subsidiaries rank in the

nationally in

for sustained outages per circuit and outage duration.

ITC ranks in the

performance in the EEI Safety Survey, the largest source of data on safety in the electric industry.

Our two Michigan operating companies reached a safety milestone in 2012 with

Performancethrough Operational Excellence

‘‘

‘‘Central to our operational

excellence is a culture of

continuous improvement,

whether in regard to safety,

system performance, system

outages, preparation for

and execution of emergency

response, compliance with

NERC Reliability Standards,

proactive preventive

maintenance on the system,

control room operations, or any

other function ITC performs.

Jon E. Jipping Executive Vice President and

Chief Operating Officer

Board of Directors

1 2 4

5

9 10

COMMITTEEss Audit & Financeu Compensationl Nominating/Corporate Governancen Security, Safety, Environmental, Health and Reliability

1. Christopher h. Franklin s n President and Chief Operating Officer Regulated Operations of Aqua America, Inc.

2. Edward G. Jepsen s l Chairman and CEO Coburn Technologies, Inc.

3. William J. Museler u n Independent Energy Consultant

4. hazel R. O’Leary u l Former President Fisk University

5. M. Michael Rounds l President and Chief Executive Officer Fischer, Rounds & Associates

6. Tom stephens u n Retired Vice Chairman and Chief Technology Officer General Motors Company

7. G. Bennett stewart III s Chief Executive Officer EVA Dimensions

8. Lee C. stewart s n Independent Financial Consultant

9. J.C. Watts, Jr. u l Chairman and Founder J.C. Watts Companies

10. Joseph L. Welch Chairman, President and CEO ITC Holdings Corp.

3

876

10

Richard D. McLellan retired as of November 7, 2012

1. Joseph L. Welch Chairman, President and Chief Executive Officer

2. Linda h. Blair Executive Vice President and Chief Business Officer

3. Cameron M. Bready Executive Vice President and Chief Financial Officer

4. Jon E. Jipping Executive Vice President and Chief Operating Officer

5. Daniel J. Oginsky Senior Vice President and General Counsel

6. Douglas C. Collins Vice President, ITC Holdings Corp. and President, ITC Midwest

7. Terry s. harvill, Ph.D. Vice President, Grid Development

8. Rejji P. hayes Vice President, Finance and Treasurer

9. Ronald J. hinsley Vice President, Information Technology and Chief Information Officer

10. Elizabeth a. howell Vice President, Operations

11. Gregory Ioanidis Vice President, ITC Holdings Corp. and President, ITC Michigan

12. Christine L. Kujawa Vice President, Human Resources

13. Wendy a. McIntyre Vice President and General Counsel, Enterprise Operations and Secretary

14. nina Plaushin Vice President, Federal Affairs

15. Kristine M. schmidt Vice President, ITC Holdings Corp. and President, ITC Great Plains

16. Brian a. slocum Vice President, Engineering

17. Christine Mason soneral Vice President and General Counsel, Utility Operations

18. Fred G. stibor Vice President and Controller

19. Thomas W. Vitez Vice President, Planning

20. simon s. Whitelocke Vice President, Regulatory and External Affairs

Management Team

1 2 3 4 5

8 9 10 11 12

6 7

13 14

16 17 18 19 20

ITC HOLDINGS CORP. 11

15

RECOnCILIaTIOn OF REPORTED nET InCOME (GaaP) TO OPERaTInG EaRnInGs (nOn-GaaP MEasURE) - UnaUDITED

Reported Net Income $ 188 $ 172 $ 146

Pre-tax Entergy Transaction Expenses 27 9 N/A

Pre-tax Liability for Audit Related Refund 13 N/A N/A

One-Time Michigan Corporate Income Tax Adjustment N/A (5) N/A

Income Taxes on Adjustments (11) (2) N/A

Operating Earnings $ 216 $ 174 $ 146

RECOnCILIaTIOn OF REPORTED DILUTED EPs (GaaP) TO OPERaTInG DILUTED EPs (nOn-GaaP MEasURE) - UnaUDITED

Reported Diluted EPS $ 3.60 $ 3.31 $ 2.84

Pre-tax Entergy Transaction Expenses 0.51 0.16 N/A

Pre-tax Liability for Audit Related Refund 0.25 N/A N/A

One-Time Michigan Corporate Income Tax Adjustment N/A (0.09) N/A

Income Taxes on Adjustments (0.22) (0.03) N/A

Operating Diluted EPS $ 4.14 $ 3.35 $ 2.84

2012 2011 2010

(in millions, except dividends per share data)

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Corporate Information

cOrpOrate headquarters 27175 Energy Way Novi, Michigan 48377 Phone: (248) 946-3000

internet www.itc-holdings.com www.itctransco.com

cOmmOn stOcK listing New York Stock Exchange Symbol: ITC

cOmpany cOntacts For additional information about the company, please contact:

INVESTOR RELATIONS Gretchen L. Holloway Director, Finance Special Projects & Investor Relations Phone: (248) 946-3595

LEGAL COUNSEL Daniel J. Oginsky Senior Vice President and General Counsel Phone: (248) 946-3563

TRANSFER AGENT Computershare Trust Company, N.A.

P.O. Box 43078 Providence, Rhode Island 02940-3078 Phone: (781) 575-3100

The transfer agent is responsible for handling shareholder questions regarding lost certificates, address changes, changes of ownership or name in which shares are held.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 200 Renaissance Center, Suite 3900 Detroit, Michigan 48243-1895 Phone: (313) 396-3000

annual meeting The annual meeting of shareholders will be held at 9:00 a.m. EDT on Wednesday, May 15, 2013, at the ITC corporate headquarters, 27175 Energy Way, Novi, Michigan 48377.

Safe Harbor Statement (see reverse)

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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains certain statements that describe ITC’s 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 of the Private Securities Litigation Reform Act of 1995. Wherever possible, ITC has identified these forward-looking statements by words such as “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 most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) from time to time and (b) the following transactional factors (in addition to others described elsewhere in this document, in the proxy statement/prospectus included in the registration statement on Form S-4 that was filed by ITC with the SEC in connection with the proposed transactions): (i) risks inherent in the contemplated transaction, including: (A) failure to obtain approval by ITC’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 report 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 with Entergy Corporation (“Entergy”) 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.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

ITC filed a registration statement on Form S-4 (Registration No. 333-184073) with the SEC registering the offer and sale of shares of ITC common stock to be issued to Entergy shareholders in connection with the proposed transactions. This registration statement includes a proxy statement of ITC that also constitutes a prospectus of ITC. This registration statement was declared effective by the SEC on February 25, 2013. ITC mailed the proxy statement/prospectus to its shareholders on or about February 28, 2013. ITC shareholders are urged to read the proxy statement/prospectus included in the ITC registration statement and any other relevant documents because they contain important information about Mid South TransCo LLC (“TransCo”) and the proposed transactions. In addition, TransCo will file a registration statement with the SEC registering the offer and sale of 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 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. The proxy statement/prospectus, 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.

This report 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 2012 Annual Report on Form 10-K filed with the SEC on February 27, 2013, and its definitive proxy statement relating to its 2013 Annual Meeting of Shareholders. Information about the directors and executive officers of ITC may be found in its 2012 Annual Report on Form 10-K filed with the SEC on March 1, 2013, and its definitive proxy statement relating to its 2013 Annual Meeting of Shareholders.

ITC HOLDINGS CORP.27175 energy Way

Novi, michigan 48377

www.itctransco.com