Waste Management 2011 Annual Report Download - page 174

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Debt Covenants
Our revolving credit facility and certain other financing agreements contain financial covenants. The most
restrictive of these financial covenants are contained in our revolving credit facility. The following table
summarizes the requirements of these financial covenants, as defined by the revolving credit facility:
Interest coverage ratio ...................................................... >2.75 to 1
Total debt to EBITDA ...................................................... <3.5to1
Our revolving credit facility and senior notes also contain certain restrictions intended to monitor our level
of indebtedness, types of investments and net worth. We monitor our compliance with these restrictions, but do
not believe that they significantly impact our ability to enter into investing or financing arrangements typical for
our business. As of December 31, 2011 and December 31, 2010, we were in compliance with the covenants and
restrictions under all of our debt agreements.
8. Derivative Instruments and Hedging Activities
The following table summarizes the fair values of derivative instruments recorded in our Consolidated
Balance Sheet (in millions):
December 31,
Derivatives Designated as Hedging Instruments Balance Sheet Location 2011 2010
Interest rate contracts ......................... Current other assets $— $ 1
Electricity commodity contracts ................ Current other assets 5 —
Interest rate contracts ......................... Long-term other assets 73 37
Total derivative assets ...................... $78 $38
Interest rate contracts ......................... Current accrued liabilities $42 $11
Electricity commodity contracts ................ Current accrued liabilities — 1
Interest rate contracts ......................... Long-term accrued liabilities 32 13
Foreign exchange contracts .................... Long-term accrued liabilities 2 3
Total derivative liabilities ................... $76 $28
We have not offset fair value amounts recognized for our derivative instruments. For information related to
the methods used to measure our derivative assets and liabilities at fair value, refer to Note 18.
95