Unconditional purchase commitments consist primarily of long-term disposal agreements that require us
to dispose of a minimum number of tons at third party facilities.
We do not have or engage in any oÅ-balance sheet arrangements.
Quantitative and Qualitative Disclosures About Market Risk
The table below provides information about our market sensitive Ñnancial instruments and constitutes a
""forward-looking statement.'' Our major market risk exposure is changing interest rates in the United States
and Öuctuations in LIBOR. We intend to manage interest rate risk through the use of a combination of Ñxed
and Öoating rate debt. All items described below are non-trading.
Expected Maturity Date
Fair Value
(Asset)/Liability
December 31,
2005 2006 2007 2008 2009 Thereafter Total 2004
VARIABLE RATE DEBT:
Amount outstanding (in
millions) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ .6 $ .3 $ Ì $ Ì $ Ì $228.2 $229.1 $229.1
Average interest rates ÏÏÏÏÏÏÏ 2.2% 2.2% Ì Ì Ì 2.2% 2.2%
INTEREST RATE SWAPS:
Amount outstanding (in
millions) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ Ì $ Ì $ Ì $210.0 $210.0 $ (.5)
Average interest rates ÏÏÏÏÏÏÏ Ì% ÌÌÌÌ 2.3% 2.3%
The fair value of variable rate debt approximates the carrying value since interest rates are variable and,
thus, approximate current market rates.
Free Cash Flow
We deÑne free cash Öow, which is not a measure determined in accordance with Generally Accepted
Accounting Standards (GAAP), as cash provided by operating activities less purchases of property and
equipment plus proceeds from the sale of property and equipment as presented in our consolidated statement
of cash Öows. Our free cash Öow for the years ended December 31, 2004, 2003 and 2002 is calculated as
follows (in millions):
2004 2003 2002
Cash provided by operating activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 666.3 $ 600.5 $ 569.7
Purchases of property and equipmentÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (283.8) (273.2) (258.6)
Proceeds from the sale of property and equipmentÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.7 9.1 14.6
Free cash Öow ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 388.2 $ 336.4 $ 325.7
We expect our free cash Öow during 2005 to be lower than 2004 and 2003 because of higher tax payments
due to the reversal of bonus depreciation, higher purchases of property and equipment and several one-time
items that beneÑted previous periods, including utilization of a tax receivable and the collection of a note
receivable during 2004, and an increase in self-insurance reserves during 2003.
We believe that the presentation of free cash Öow provides useful information regarding our recurring
cash provided by operating activities after expenditures for property and equipment, net of proceeds from the
sale of property and equipment. It also demonstrates our ability to execute our Ñnancial strategy which
includes reinvesting in existing capital assets to ensure a high level of customer service, investing in capital
assets to facilitate growth in our customer base and services provided, pursuing strategic acquisitions that
augment our existing business platform, repurchasing shares of common stock at prices that provide value to
our shareholders, paying cash dividends, maintaining our investment grade rating and minimizing debt. In
addition, free cash Öow is a key metric used to determine compensation. Free cash Öow does not represent our
cash Öow available for discretionary expenditures because it excludes certain expenditures that are required or
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