Waste Management 2006 Annual Report Download - page 132

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Share repurchases
In 2004, our Board of Directors approved a capital allocation plan that allows for up to $1.2 billion in annual
share repurchases, net of dividends, for 2005 through 2007. In June 2006, our Board of Directors approved up to
$350 million of additional share repurchases for 2006, increasing the maximum amount of capital to be allocated to
our share repurchases and dividend payments for 2006 to $1.55 billion. All share repurchases in 2005 and 2006 have
been made pursuant to these Board authorized capital allocation plans. Share repurchases during 2004 were made in
accordance with a similar capital allocation plan, which authorized up to $1.0 billion in annual share repurchases,
net of dividends.
The following is a summary of activity under our stock repurchase programs for each year presented:
2006 2005 2004
Years Ended December 31,
Shares repurchased (in thousands) ........... 30,965 24,727 16,541
Per share purchase price .................. $32.23-$38.49 $27.01-$30.67 $26.32-$30.79
Total repurchases (in millions) .............. $1,072 $706 $472
Our 2006 share repurchase activity includes $291 million paid to repurchase our common stock through an
accelerated share repurchase transaction. The number of shares we repurchased under the accelerated repurchase
transaction was determined by dividing $275 million by the fair market value of our common stock on the
repurchase date. At the end of the valuation period, which was in February 2006, we were required to make a
settlement payment for the difference between the $275 million paid at the inception of the valuation period and the
weighted average daily market price of our common stock during the valuation period times the number of shares
we repurchased, or $16 million. We elected to make the required settlement payment in cash.
In December 2006, we entered into a plan under SEC Rule 10b5-1 to effect market purchases of our common
stock. These common stock repurchases were made in accordance with our Board approved capital allocation
program, which authorizes up to $1.2 billion to be returned to shareholders in the form of share repurchases and
dividends. We repurchased $72 million of our common stock pursuant to the plan, which was completed on
February 9, 2007.
Dividends
In August 2003, our Board of Directors approved our quarterly dividend program, which began in the first
quarter of 2004. Our quarterly dividends have been declared by our Board of Directors and paid in accordance with
the capital allocation programs discussed above. The following is a summary of dividends declared and paid each
year (in millions, except per share amounts):
2006 2005 2004
Years Ended December 31,
Cash dividends per common share:
Declared(a) .............................................. $0.66 $1.02 $0.75
Paid................................................... $0.88 $0.80 $0.75
Total cash dividends:
Declared(a) .............................................. $355 $571 $432
Paid................................................... $476 $449 $432
(a) In 2005, the cash dividend declared amounts included the Board of Directors’ declaration of the first quarterly
dividend for 2006 of $0.22 per share, or $122 million.
In December 2006, our Board of Directors authorized an increase in the per share quarterly dividend, from
$0.22 to $0.24, for anticipated dividend declarations to be made in 2007. However, all future dividend declarations
98
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)