Entergy 2003 Annual Report Download - page 11

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The dividend is part of a broader set of financial aspirations that reflect Entergy’s financial
strength and business prospects, guided by a well-developed market point of view. The overarching
financial goal is to achieve and maintain returns to shareholders – a combination of earnings
growth and yield – that rank in the top quartile among peers.
Our goal is to return cash to
shareholders in the most efficient way possible, while maintaining financial flexibility and liquidity
to support continued growth in both earnings and the dividend.
We will look to increase the dividend annually consistent with progress toward achievement
of our financial aspirations. Those aspirations include maintaining near-term earnings growth
of
8-10 percent, comprised of 6 percent intrinsic growth and 2-4 percent growth from asset
acquisitions.
We also seek long-term growth of 5-6 percent, equal to top-quartile growth in our
industry over the last 20 years.
A critical element in realizing these financial aspirations is achieving improvements in
productivity. Entergy’s financial plans include incremental operation and maintenance cost
savings totaling $145 million, comprised of $10 million in the utility and $135 million in
Entergy’s competitive nuclear business, compared to 2002 baseline amounts. We expect to achieve
these productivity improvements by 2006.
In December 2003, Entergy completed a Voluntary Severance Program, designed to achieve
necessary staff reductions by offering enhanced severance benefits to eligible employees. A total
of 1,100 employees participated. Entergy recorded a one-time after-tax charge of $123 million
in 2003 for the severance costs associated with the VSP, while the staff reductions are expected
to produce annual savings of about $70 million after tax.
Environmental and Social Leadership
Entergy believes that strong financial performance goes hand in hand with serving the best
interests of all our stakeholders. That approach was reflected in Entergy’s selection for listing
on the Dow Jones Sustainability Index for 2004. This is the second consecutive year that Entergy
has been listed, one of only three U.S. electric utilities to be included. DJSI-listed companies
must not only demonstrate strong financial performance, but must also show outstanding
leadership in environmental and social commitment.
Operational
Earnings Per Share
(in dollars)
98
As-
Reported Operational
03
As-
Reported
2.222.22 3.00
4.25 4.01
Strong, Balanced Earnings Growth.
In the five years since Entergy adopted a refocused
strategy, the company has produced strong earnings
growth. Since 1998, operational earnings have
increased by a total of 91 percent. All areas of
Entergy’s business have contributed: the core utility
as well as growth initiatives in nuclear generation
and energy commodities. Entergy’s strategy is
to develop multiple sources of continued earnings
growth to help ensure consistent performance,
no matter what obstacles arise.
ENTERGY CORPORATION AND SUBSIDIARIES 2003
9
Components of
Operational EPS
(in dollars)
98 03
Parent and Other
Utility
Entergy Nuclear
Energy Commodity Services
Total
2.22
Total
4.25
0.02
2.36
(0.01)
(0.15) (0.09)
0.78
0.85
2.71