Waste Management 2006 Annual Report Download - page 123

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4.65% at December 31, 2006. The changes to our net insurance liabilities for the periods presented are summarized
below (in millions):
Gross Claims
Liability
Estimated Insurance
Recoveries(a)
Net Claims
Liability
Balance, December 31, 2003 . . . ............... $644 $(297) $ 347
Self-insurance expense (benefit) .............. 268 (84) 184
Cash (paid) received ....................... (231) 60 (171)
Balance, December 31, 2004 . . . ............... 681 (321) 360
Self-insurance expense (benefit) .............. 227 (57) 170
Cash (paid) received ....................... (248) 67 (181)
Balance, December 31, 2005 . . . ............... 660 (311) 349
Self-insurance expense (benefit) .............. 233 (31) 202
Cash (paid) received ....................... (241) 75 (166)
Balance, December 31, 2006 . . . ............... $652 $(267) $ 385
Current portion at December 31, 2006 ........... $211 $(126) $ 85
Long-term portion at December 31, 2006 ......... $441 $(141) $ 300
(a) Amounts reported as estimated insurance recoveries are related to both paid and unpaid claims liabilities.
For the 14 months ended January 1, 2000, we insured certain risks, including auto, general liability and
workers’ compensation, with Reliance National Insurance Company, whose parent filed for bankruptcy in June
2001. In October 2001, the parent and certain of its subsidiaries, including Reliance National Insurance Company,
were placed in liquidation. We believe that because of various state insurance guarantee funds and probable
recoveries from the liquidation, currently estimated to be $19 million, it is unlikely that events relating to Reliance
will have a material adverse impact on our financial statements.
We do not expect the impact of any known casualty, property, environmental or other contingency to have a
material impact on our financial condition, results of operations or cash flows.
Operating leases — Rental expense for leased properties was $122 million, $129 million and $127 million
during 2006, 2005 and 2004, respectively. These amounts primarily include rents under operating leases. Minimum
contractual payments due during each of the next five years for our operating lease obligations are noted below
(in millions):
2007 2008 2009 2010 2011
$89 $71 $59 $51 $34
Our minimum contractual payments for lease agreements during future periods is significantly less than
current year rent expense because our significant lease agreements at landfills have variable terms based either on a
percentage of revenue or a rate per ton of waste received.
Other commitments — We have the following unconditional obligations:
•Share Repurchases — In December 2006, we entered into a plan under SEC Rule 10b5-1 to effect market
purchases of our common stock during the first quarter of 2007. See Note 14 for additional information
related to this agreement.
•Fuel Supply — We have purchase agreements expiring at various dates through 2010 that require us to
purchase minimum amounts of waste and conventional fuels at our independent power production plants.
These fuel supplies are used to produce electricity for sale to electric utilities, which is generally subject to
89
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)