Entergy 2006 Annual Report Download - page 13

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t Entergy, we are committed to the pursuit
of sustainable growth. We aspire to deliver
superior returns to our owners while
simultaneously making progress toward specific
societal goals. In 2006, we delivered returns to our
shareholders that ranked in the top quartile of
our peer group. In 2006, we were also gratified to
be named to the Dow Jones Sustainability Index –
World for the fifth consecutive year. We are proud
to be a leader in sustainable development, the only
company in the U.S. electricity sector to be
included in the 2006 DJSI – World.
Delivering Top-Quartile Financial Returns
We aspire to consistently deliver top-quartile total
shareholder returns. In the past five years, we have
twice been honored with EEI’s award in recognition
of the highest total shareholder return for a large-cap
electric utility over a five-year period.
We restored market confidence by demonstrating
that Entergy’s long-term value proposition remained
intact. As a result, we saw Entergy stock rebound
from post-hurricane weaknesses and deliver top-
quartile returns to our owners.
While delivering top-quartile returns over
the past five years, we continually focused on
constraining risks – financial, regulatory,
operational, commodity – in our day-to-day
operations. Our risk profile has changed
substantially in recent years as our business has
evolved. That change, combined with other factors,
led us to take a hard look at our aspirations.
We assessed our current position, evaluated
multiple scenarios using our dynamic points of
view on market conditions and our stated
strategies, and refined our aspirations for 2006
through 2010. Our overarching financial aspiration
is to achieve top-quartile total shareholder returns.
We will do so by growing earnings per share by
$1.00 each year, earning returns at or above our
risk-adjusted cost of capital, all the while
maintaining solid investment grade credit with
flexibility to manage risk and act on opportunities.
We also aspire to return cash to our owners
through common stock repurchases of up to $500
million each year and/or dividends targeting a 60
percent target payout ratio over time. In January
2007, we announced a new $1.5 billion common
stock repurchase program to be implemented over
the next two years. Regarding the dividend, we are
well aware that the current level is considerably
below our 60 percent target and also well below the
average of our peers. Considering our last dividend
increase was in 2004, we continue to be disappointed
that we believe it is still premature to consider
dividend action at this time. It is at the top of our list
when more certainty and clarity is achieved on
other initiatives.
While there is stretch, we believe our refined
financial aspirations are realistic and achievable.
We also believe they are aligned with our societal
aspirations. Our commitments to strengthen our
environment and our communities are embodied
in our societal aspirations.
by delivering top-quartile
shareholder returns through the generation
of safe, clean, affordable power to a healthy, educated,
productive society where none of our customers live in poverty.
ENTERGY CORPORATION AND SUBSIDIARIES 2
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