Entergy 2007 Annual Report Download - page 6

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Entergy Corporation and Subsidiaries 2007
4
We ranked number one in total
shareholder return over the nine-year
period from Dec. 31, 1998 to
Dec. 31, 2007.
CORPORATE
opportunity with a unique base rate path and earnings per
share growth prospect. e utilities’ investment opportunities to
reduce fuel cost and volatility are substantial relative to their own
balance sheet. In that regard, we will not take on more than we can
handle. Innovative nancing with structures allowing for third-
party investment or nancing in specic projects (e.g., nuclear)
will be extensively evaluated and implemented if it contributes
to maintaining a strong credit rating, lowering customers’ bills
or protecting shareholder value. rough this transformation,
Entergy Classic aspires to a “real” decrease in customer rates, with
a base rate path less than projected ination, while simultaneously
growing earnings per share six to eight percent through 2012,
creating value for all stakeholders.
It is rare to uncover an opportunity with the potential to deliver
substantial value to all stakeholders. Moreover, as an Entergy
shareholder, we clearly expect that you will be advantaged by both
the value of SpinCo and the enhanced value of Entergy Classic.
We will continue to take the necessary actions, including seeking
requisite regulatory approvals, in order to complete the transaction
around the end of the third quarter of 2008.
Unlocking Value Through Operations – Our 2007 Results
Even as we continue to evaluate opportunities to realize the value
inherent in our existing assets, our 14,300 employees remain focused
on creating value through industry-leading performance in our
ongoing operations. As a result of their eorts, Entergy delivered
total shareholder return of 32.5 percent in 2007, placing us once
again in the top quartile of our peer companies.
We achieved our $1 per share operational earnings growth aspiration
and did so in a challenging economic climate. Entergy’s operational
earnings were $5.76 per share, up 22 percent from $4.72 per share
in 2006. As-reported earnings were $5.60 per share, up 4.5 percent
from $5.36 per share in 2006. We initiated a new $1.5 billion stock
repurchase program in 2007, and returned nearly $1 billion of cash
to our owners through that program, doubling our repurchase
aspiration of $500 million. In addition, our Board of Directors
increased the dividend for the rst time since the last increase in
2004, consistent with our aspiration to achieve a 60 percent target
payout ratio. And our operational return on invested capital
increased, moving towards our 10 percent nancial aspiration.
ese nancial accomplishments were realized without sacricing
our solid credit metrics. We never lose sight of our point of view
that a strong balance sheet is a fundamental component of long-
term nancial success.
A more detailed description of the performance of our Corporation,
Utility and Nuclear Businesses – as well as our point of view on a
carbon policy to address the climate change issue – can be found
later in this report. Highlights include:
IN OUR UTILITY BUSINESS, we made solid progress in executing
our portfolio transformation strategy in 2007 – announcing the
acquisitions of the 789-megawatt Ouachita Power Facility in
northern Louisiana and the 322-megawatt Calcasieu Generating
Facility in southwestern Louisiana and receiving regulatory
approval to proceed with the Little Gypsy Unit 3 repowering project.
We continue to pursue buy, build and contract power purchase
options through our portfolio transformation initiative in order to
procure the right generating technologies for our customers in the
most ecient manner possible. In addition, we’re preserving our
option to invest in the next, simpler, more ecient generation of
nuclear plants, with potential new nuclear development at our Grand
Gulf Nuclear Station and River Bend Station.
We essentially reached closure on the regulatory recovery
process for the unprecedented devastation of the 2005 storm
season. In May, Entergy New Orleans emerged from bankruptcy,
We are pursuing our portfolio
transformation strategy to meet
demand, diversify our fleet and create
opportunities to lower costs for
our customers.
UTILITIES