Waste Management 2007 Annual Report Download - page 130

14. Capital Stock, Share Repurchases and Dividends
Capital stock
As of December 31, 2007, we have 500.1 million shares of common stock issued and outstanding. We have
1.5 billion shares of authorized common stock with a par value of $0.01 per common share. The Board of Directors
is authorized to issue preferred stock in series, and with respect to each series, to fix its designation, relative rights
(including voting, dividend, conversion, sinking fund, and redemption rights), preferences (including dividends and
liquidation) and limitations. We have ten million shares of authorized preferred stock, $0.01 par value, none of
which is currently outstanding.
Share repurchases
In 2004, our Board of Directors approved a capital allocation plan that allowed for up to $1.2 billion in annual
share repurchases, and dividend payments, for each of 2005, 2006 and 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. In March 2007, our Board of
Directors approved up to $600 million of additional share repurchases for 2007 and in November 2007 our Board of
Directors approved up to $300 million of additional share repurchases, which is not limited to any calendar year. As
a result, the maximum amount of capital to be allocated to our share repurchases and dividend payments in 2007
was $2.1 billion. All share repurchases in 2005, 2006 and 2007 have been made pursuant to these Board authorized
capital allocation plans.
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 November 2007 additional authorization of $300 million remained available
for repurchases at year-end. As a result, the maximum amount of capital to be allocated to our share repurchases and
dividend payments in 2008 is approximately $1,584 million.
The following is a summary of activity under our stock repurchase programs for each year presented:
2007 2006 2005
Years Ended December 31,
Shares repurchased (in thousands) ........... 39,946 30,965 24,727
Per share purchase price .................. $33.00-$40.13 $32.23-$38.49 $27.01-$30.67
Total repurchases (in millions) .............. $1,421 $1,072 $706
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 November 2007, we entered into a plan under SEC Rule 10b5-1 to effect market purchases of our common
stock in 2008. These common stock repurchases were made in accordance with our Board approved capital
allocation program. We repurchased $175 million of our common stock pursuant to the plan, which was completed
on February 7, 2008.
Future share repurchases will be made within the limits approved by our Board of Directors at the discretion of
management, and will depend on factors similar to those considered by the Board in making dividend declarations.
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)