Waste Management 2007 Annual Report Download - page 79

•Purchases and sales of short-term investments — Net sales of short-term investments provided $184 million
of cash in 2007, compared with $122 million during 2006 and net purchases of $295 million during 2005. In
both 2006 and 2007, we decreased our short-term investments to provide cash that we used to fund our
common stock repurchases, dividend payments and debt repayments, which are discussed below.
•Proceeds from divestitures — Proceeds from divestitures (net of cash divested) and other sales of assets were
$278 million in 2007, $240 million in 2006 and $194 million in 2005. In 2006 and 2007, our proceeds from
divestitures have been driven by the divestiture of under-performing and non-strategic operations. Approx-
imately $89 million of our 2005 proceeds were related to the sale of one of our landfills in Ontario, Canada as
required by a Divestiture Order from the Canadian Competition Tribunal.
•Cash paid for acquisitions — Our spending on acquisitions increased from $32 million during 2006 to
$90 million in 2007 due to an increased focus on accretive acquisitions and other investments that will
contribute to improved future results of operations and enhance and expand our existing service offerings.
Cash paid for acquisitions in 2005 was $142 million, and was related principally to tuck-in acquisitions of
relatively small operations that could be easily integrated with our core operations.
•Net receipts from restricted funds — Net funds received from our restricted trust and escrow accounts, which
are largely generated from the issuance of tax-exempt bonds for our capital needs, contributed $120 million
to our investing activities in 2007 compared with $253 million in 2006 and $395 million in 2005. The
decrease is generally due to a decline in new tax-exempt borrowings.
Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing
cash flows for the periods presented are summarized below:
•Share repurchases and dividend payments — Our 2007, 2006 and 2005 share repurchases and dividend
payments have been made in accordance with a three-year capital allocation program that was approved by
our Board of Directors. This capital allocation program authorized up to $1.2 billion of combined share
repurchases and dividend payments each year during 2005, 2006 and 2007. In June 2006, the Board of
Directors authorized up to $350 million of additional share repurchases in 2006, increasing the total of
capital authorized for share repurchases and dividends in 2006 to $1.55 billion. In March 2007, our Board of
Directors approved up to $600 million of additional share repurchases for 2007, and in November 2007
approved up to $300 million of additional share repurchases. As a result, the maximum amount of capital to
be allocated to our share repurchases and dividend payments in 2007 was $2.1 billion. Any remaining
portion of the $300 million of additional share repurchases approved by the Board of Directors in November
2007 that was not utilized in 2007 may be utilized in future years.
In December 2007, our Board of Directors approved a new capital allocation program that includes the
authorization for up to $1.4 billion in combined cash dividends and common stock repurchases in 2008.
Approximately $184 million of the additional authorization of $300 million in November 2007 was not used
in 2007. As a result, the maximum amount of capital to be allocated to our share repurchases and dividend
payments in 2008 is $1,584 million. We currently intend to allocate up to $1.4 billion of capital to dividends
and share repurchases in 2008.
We paid $1,421 million for share repurchases in 2007, as compared with $1,072 million in 2006 and
$706 million in 2005. We repurchased approximately 40 million, 31 million and 25 million shares of our
common stock in 2007, 2006 and 2005, respectively. We currently expect to continue repurchasing common
stock under the capital allocation program discussed above.
We paid an aggregate of $495 million in cash dividends during 2007 compared with $476 million in 2006
and $449 million in 2005. The increase in dividend payments is due to our quarterly per share dividend
increasing from $0.20 in 2005, to $0.22 in 2006 and to $0.24 in 2007. The impact of the year-over-year
increases in the per share dividend has been partially offset by a reduction in the number of our outstanding
shares as a result of our share repurchase program. In December 2007, the Board of Directors announced
that it expects future quarterly dividend payments will be $0.27 per share. All future dividend declarations
are at the discretion of the Board of Directors, and depend on various factors, including our net earnings,
financial condition, cash required for future prospects and other factors the Board may deem relevant.
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