Waste Management 2006 Annual Report Download - page 80

Short-term investments available for use — These investments include auction rate securities and variable rate
demand notes, which are debt instruments with long-term scheduled maturities and periodic interest rate reset dates.
The interest rate reset mechanism for these instruments results in a periodic marketing of the underlying securities
through an auction process. Due to the liquidity provided by the interest rate reset mechanism and the short-term
nature of our investment in these securities, they have been classified as current assets in our Consolidated Balance
Sheets.
Restricted trust and escrow accounts — Restricted trust and escrow accounts consist primarily of funds held in
trust for the construction of various facilities or repayment of debt obligations, funds deposited in connection with
landfill closure, post-closure and remediation obligations and insurance escrow deposits. These balances are
primarily included within long-term “Other assets” in our Consolidated Balance Sheets. See Note 3 to the
Consolidated Financial Statements for additional discussion.
Debt
Revolving credit and letter of credit facilities — The table below summarizes the credit capacity, maturity and
outstanding letters of credit under our revolving credit facility, principal letter of credit facilities and other credit
arrangements as of December 31, 2006 (in millions):
Facility
Total Credit
Capacity Maturity
Outstanding
Letters
of Credit
Five-year revolving credit facility(a) ..................... $2,400 August 2011 $1,301
Five-year letter of credit and term loan agreement(b) ......... 15 June 2008 15
Five-year letter of credit facility(b) ...................... 350 December 2008 346
Seven-year letter of credit and term loan agreement(b) ........ 175 June 2010 175
Ten-year letter of credit and term loan agreement(b) .......... 105 June 2013 105
Other(c) .......................................... — Various 75
Total ............................................. $3,045 $2,017
(a) On August 17, 2006, WMI entered into a five-year, $2.4 billion revolving credit facility, replacing the
$2.4 billion syndicated revolving credit facility that would have expired in October 2009. This facility provides
us with credit capacity that could be used for either cash borrowings or letters of credit. At December 31, 2006,
no borrowings were outstanding under the facility, and we had unused and available credit capacity of
$1,099 million.
(b) These facilities have been established to provide us with letter of credit capacity. In the event of an
unreimbursed draw on a letter of credit, the amount of the draw paid by the letter of credit provider generally
converts into a term loan for the remaining term under the respective agreement or facility. Through
December 31, 2006 we had not experienced any unreimbursed draws on our letters of credit.
(c) We have letters of credit outstanding under various arrangements that do not provide for a committed capacity.
Accordingly, the total credit capacity of these arrangements has been noted as zero.
We have used each of these facilities to support letters of credit that we issue to support our insurance
programs, certain tax-exempt bond issuances, municipal and governmental waste management contracts, closure
and post-closure obligations and disposal site or transfer station operating permits. These facilities require us to pay
fees to the financial institutions and our obligation is generally to repay any draws that may occur on the letters of
credit. We expect that similar facilities may continue to serve as a cost efficient source of letter of credit capacity in
the future, and we continue to assess our financial assurance requirements to ensure that we have adequate letter of
credit and surety bond capacity in advance of our business needs.
Canadian Credit Facility — In November 2005, Waste Management of Canada Corporation, one of our
wholly-owned subsidiaries, entered into a three-year credit facility agreement under which we could borrow up to
Canadian $410 million. The agreement was entered into to facilitate WMI’s repatriation of accumulated earnings
and capital from its Canadian subsidiaries as discussed above.
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