Waste Management 2011 Annual Report Download - page 173

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
borrowings outstanding as of December 31, 2011 were incurred for general corporate purposes, including
additions to working capital, capital expenditures and the funding of acquisitions and investments. We borrowed
another $50 million under our revolving credit agreement in January, bringing the total outstanding as of the date
of this filing to $200 million. We currently expect to repay these borrowings during 2012 with cash flow
generated by our operations. Due to the short-term maturities of these borrowings, we have reported these cash
flows on a net basis in the Consolidated Statement of Cash Flows in accordance with accounting principles
generally accepted in the U.S.
Canadian Credit Facility — A total of U.S.$77 million of net advances under the facility matured during
2011 and were repaid with available cash.
Senior Notes — In February 2011, we issued $400 million of 4.60% senior notes due March 2021. The net
proceeds from the debt issuance were $396 million. We used a portion of the proceeds to repay $147 million of
7.65% senior notes that matured in March 2011. In August 2011, we issued $500 million of 2.60% senior notes
due September 2016. The net proceeds from the debt issuance were $497 million. A portion of the proceeds was
used to repay the $100 million borrowing under our $2.0 billion revolving credit facility, which is discussed
above, and the remainder was incurred for general corporate purposes, including additions to working capital,
capital expenditures and the funding of acquisitions and investments.
The remaining change in the carrying value of our senior notes from December 31, 2010 to December 31,
2011 is principally due to accounting for our fixed-to-floating interest rate swap agreements, which are accounted
for as fair value hedges resulting in all fair value adjustments being reflected as a component of the carrying
value of the underlying debt. Refer to Note 8 for additional information regarding our interest rate derivatives.
Tax-Exempt Bonds — During the year ended December 31, 2011, we issued $100 million of tax-exempt
bonds, which are used as a means of accessing low-cost financing for capital expenditures. The proceeds from
these debt issuances may only be used for the specific purpose for which the money was raised, which is
generally to finance expenditures for landfill construction and development. We repaid $25 million of our
tax-exempt bonds with available cash during the year ended December 31, 2011. Additional information related
to the presentation of these borrowings in the Consolidated Statement of Cash Flows is discussed in Note 3.
Tax-Exempt Project Bonds — In the past, our Wheelabrator Group used tax-exempt project bonds to finance
the development of waste-to-energy facilities. During the year ended December 31, 2011, we repaid $30 million
of our tax-exempt project bonds with available cash.
Capital Leases and Other — The decrease in our capital leases and other debt obligations is primarily due to
the repayment of $87 million of various borrowings upon their scheduled maturities, net of new leases and
borrowings of $48 million.
Scheduled Debt Payments — Scheduled principal payments of our debt and capital leases for the next five
years are as follows: $918 million in 2012; $210 million in 2013; $460 million in 2014; $455 million in 2015;
and $696 million in 2016. Our recorded debt and capital lease obligations include non-cash adjustments
associated with discounts, premiums and fair value adjustments for interest rate hedging activities, which have
been excluded from these amounts because they will not result in cash payments.
Secured Debt
Our debt balances are generally unsecured, except for capital leases and the note payable associated with our
investment in federal low-income housing tax credits. During 2011, we repaid $30 million of tax-exempt project
bonds that had been secured by certain of our Wheelabrator Group’s assets.
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