Waste Management 2011 Annual Report Download - page 172

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Debt Classification
As of December 31, 2011, we had (i) $925 million of debt maturing within twelve months, including
$150 million of borrowings outstanding under the revolving credit facility, U.S.$137 million of advances
outstanding under our Canadian credit facility, $400 million of 6.375% senior notes that mature in
November 2012 and $168 million of tax-exempt bonds and (ii) $305 million of fixed-rate tax-exempt borrowings
subject to re-pricing within the next twelve months. Under accounting principles generally accepted in the United
States, this debt must be classified as current unless we have the intent and ability to refinance it on a long-term
basis. We have the intent and ability to refinance $599 million of this debt on a long-term basis and have
classified the remaining $631 million as current obligations as of December 31, 2011.
As of December 31, 2011, we also have $565 million of variable-rate tax-exempt bonds and $46 million of
variable-rate tax-exempt project bonds. The interest rates on these bonds are reset on either a daily or weekly
basis through a remarketing process. If the remarketing agent is unable to remarket the bonds, the remarketing
agent can put the bonds to us. These bonds are supported by letters of credit guaranteeing repayment of the bonds
in this event. We classified these borrowings as long-term in our Consolidated Balance Sheet at December 31,
2011 because the borrowings are supported by letters of credit issued under our five-year, $2.0 billion revolving
credit facility, which is long-term.
Access to and Utilization of Credit Facilities
Revolving Credit Facility — In May 2011, we amended and restated our $2.0 billion revolving credit
facility as a result of changes in market conditions, which significantly reduced the cost of the facility. We also
extended the term through May 2016. This facility provides us with credit capacity to be used for either cash
borrowings or to support letters of credit. At December 31, 2011, we had $150 million of outstanding borrowings
and $1,012 million of letters of credit issued and supported by the facility. The unused and available credit
capacity of the facility was $838 million as of December 31, 2011.
Letter of Credit Facilities — As of December 31, 2011, we had an aggregate committed capacity of
$505 million under letter of credit facilities with terms ending from June 2013 to June 2015. These facilities are
currently being used to back letters of credit issued to support our bonding and financial assurance needs. Our
letters of credit generally have terms providing for automatic renewal after one year. 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 of the respective facility. Through December 31, 2011, we had
not experienced any unreimbursed draws on letters of credit under these facilities. As of December 31, 2011, no
borrowings were outstanding under these letter of credit facilities and we had $3 million of unused and available
credit capacity.
Canadian Credit Facility — In November 2005, Waste Management of Canada Corporation, one of our
wholly-owned subsidiaries, entered into a credit facility agreement to facilitate WM’s repatriation of
accumulated earnings and capital from its Canadian subsidiaries. The agreement provided for an initial credit
capacity of C$340 million and matures in November 2012. At December 31, 2011, we had U.S.$137 million of
borrowings outstanding under this credit facility.
Debt Borrowings and Repayments
The significant changes in our debt balances from December 31, 2010 to December 31, 2011 are related to
the following:
Revolving Credit Facility — During the third quarter of 2011, we borrowed $100 million under our
revolving credit facility in connection with our acquisition of Oakleaf, which is discussed further in Note 19.
These borrowings were repaid with proceeds from our August 2011 issuance of senior notes. The $150 million of
93