Waste Management 2006 Annual Report Download - page 79

• our ability to generate strong and consistent cash flows despite the economic environment;
• our liquidity profile;
• our asset base; and
• our commitment to maintaining a moderate financial profile and disciplined capital allocation.
We continually monitor our actual and forecasted cash flows, our liquidity and our capital resources, enabling
us to plan for our present needs and fund unbudgeted business activities that may arise during the year as a result of
changing business conditions or new opportunities. In addition to our working capital needs for the general and
administrative costs of our ongoing operations, we have cash requirements for: (i) the construction and expansion of
our landfills; (ii) additions to and maintenance of our trucking fleet; (iii) refurbishments and improvements at
waste-to-energy and materials recovery facilities; (iv) the container and equipment needs of our operations;
(v) capping, closure and post-closure activities at our landfills; and (vi) repaying debt and discharging other
obligations. We also are committed to providing our shareholders with a return on their investment through our
capital allocation program that provides for dividend payments, share repurchases and investments in acquisitions
that we believe will be accretive and provide continued growth in our business.
On October 22, 2004, the American Jobs Creation Act of 2004 (the “Act”) became law. A provision of the Act
allowed U.S. companies to repatriate earnings from their foreign subsidiaries at a reduced tax rate during 2005. Our
Chief Executive Officer and Board of Directors approved a domestic reinvestment plan under which we repatriated
$496 million of our accumulated foreign earnings and capital in 2005. The repatriation was funded with cash on
hand and bank borrowings. For a discussion of the tax impact and bank borrowings see Notes 7 and 8 to the
Consolidated Financial Statements.
Summary of Cash, Short-Term Investments, Restricted Trust and Escrow Accounts and Debt Obligations
The following is a summary of our cash, short-term investments available for use, restricted trust and escrow
accounts and debt balances as of December 31, 2006 and December 31, 2005 (in millions):
2006 2005
Cash and cash equivalents.......................................... $ 614 $ 666
Short-term investments available for use ............................... 184 300
Total cash, cash equivalents and short-term investments available for use . . . $ 798 $ 966
Restricted trust and escrow accounts:
Tax-exempt bond funds .......................................... $ 94 $ 185
Closure, post-closure and environmental remediation funds ............... 219 205
Debt service funds ............................................. 45 52
Other ....................................................... 19 18
Total restricted trust and escrow accounts........................... $ 377 $ 460
Debt:
Current portion ................................................ $ 822 $ 522
Long-term portion.............................................. 7,495 8,165
Total debt .................................................. $8,317 $8,687
Increase in carrying value of debt due to hedge accounting for interest rate
swaps ....................................................... $ 19 $ 47
Cash and cash equivalents — Cash and cash equivalents consist primarily of cash on deposit, certificates of
deposit, money market accounts, and investment grade commercial paper purchased with original maturities of
three months or less.
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