We aspire to consistently deliver top-quartile total shareholder returns. 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.
We aspire to break the cycle of poverty for our customers and contribute to a society that is healthy, educated and productive. The federal Low Income Home Energy Assistance Program helps needy families pay their energy bills.
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.
Delivering Superior Results to Society
As we refined our financial aspirations, we also reaffirmed our societal aspirations. We are convinced that being a leader in environmental excellence, meeting the particular needs of our low-income customers and fostering a safe, inclusive work environment are more important than ever to the long-term success of our company and our society.
We aspire to be the cleanest generator in America, to conserve natural resources and to be a strong advocate for establishing mandatory greenhouse gas levels. More than 80 percent of the power we generate comes from clean sources such as nuclear and natural gas. We continue to invest in clean technologies like combined-cycle gas turbine plants. We also have programs in each jurisdiction to inform and help our customers conserve energy in their homes and businesses.
We strongly believe that greenhouse gas emissions harm our environment. In 2001, we became the first electric utility to commit to a voluntary five-year target to stabilize our CO2 emissions. In 2006, we made a second five-year commitment to voluntarily stabilize our CO2 emissions at 20 percent below year 2000 levels over the next five years. Our actions demonstrate that it is possible to economically stabilize greenhouse gas emissions. Regardless of the outcome of any debate on the climate change issue, these are actions we should and will take now.
Our approach to climate change was recognized in 2006 by the Carbon Disclosure Project, an international secretariat for the world's largest institutional investor collaboration on the business implications of climate change. For the third year in a row, Entergy was named to the Climate Leadership Index, a prestigious index for global corporations addressing the challenges of climate change. Members of the index were judged to be distinguished by their strategic awareness of the risks and opportunities of a carbon-constrained environment as well as the quality and effectiveness of programs put in place to reduce overall greenhouse gas emissions. Entergy was judged among the best in the North American electric power sector.
In another of our societal commitments, we aspire to contribute to the eradication of extreme poverty in the region served by our utilities. We are taking steps to meet the needs of our low-income customers with programs designed to improve the flow of public funds, better manage energy usage and address the underlying causes of poverty. Of special note in 2006 were our coordinated jurisdiction efforts to secure increased funding for the federal Low Income Home Energy Assistance Program. We worked to maximize funding for Entergy states through meetings with members of Congress and an aggressive media campaign in all our jurisdictions. Entergy states received over $75 million in additional LIHEAP funding in 2006 and we made extensive outreach efforts to our LIHEAP-eligible customers to help them secure assistance with their bill payments. In 2006, Entergy advocacy efforts such as these were recognized again by the Edison Electric Institute's Advocacy Excellence Award – the second consecutive year we've been so honored.
We faced many challenges in 2006 and made great strides, including another record year in terms of safety. However, our proudest day, now clearly in sight, will be when our dedicated employees achieve no lost-time accidents. We completed 2006 with no fatalities and reached several safety milestones in our operations. For example, our transmission team of approximately 1,000 employees worked one million hours in 2006 without a lost-time accident. In addition, eight sites earned Star status under the OSHA Voluntary Protection Program in 2006 – the highest possible safety rating for an industrial work site. As of the end of 2006, 36 of our nuclear, fossil, distribution and transmission sites have achieved OSHA VPP Star status.
We also aspire to a workforce that reflects the diversity of our communities. We have a diversity strategy that positions our company as an employer of choice, a business partner of choice and a good corporate citizen. The commitment to create an environment that fosters creativity, productivity and mutual respect for all people reaches from the office of our CEO throughout our entire organization. We believe there is no substitute for the experience and insight of a diverse, focused Entergy team.
From Aspire to Achieve
Rounding out our financial and societal aspirations, we also have operational aspirations to guide our utility and nuclear businesses. Our operational aspirations are outlined in the following sections of this report along with a discussion of our 2006 operational performance.
At all levels of our organization, we continue to use our point-of-view driven business model to develop our strategies and action plans. From setting our CO2 emission stabilization targets to evaluating the purchase of a generation asset, our dynamic model enables us to form decisive points of view incorporating sophisticated analyses and extensive market knowledge. We then execute on our points of view using discipline and the experience of our talented team of employees.
By definition, our aspirations will at times seem out of reach. However, we believe our management team and employees have the expertise and the will to achieve superior financial, operational and societal results consistent with our aspirations.