Although we met Wall Street’s expectations in 2006, the volatile energy commodity markets challenged our financial performance.
The year saw a sharp drop in natural gas prices and a decrease in electricity consumption by our customers, which negatively affected our performance versus plan. Still, operational earnings were 59 percent above last year’s record levels, reflecting restructuring and performance improvements and the effectiveness of our risk-management program to hedge natural gas. While performance was at the low end of our guidance and share-price performance trailed our peer group by over 50 percent, shareholder return since 2004 continues to rank in the top decile. But as we transform from a traditional utility to a high-performing industrial company, delivering a consistent pattern of execution across all our businesses will be critical. We must get to the point where we hit all our targets all the time.
