Waste Management 2013 Annual Report Download - page 194

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Capital Leases and Other — The increase in our capital leases and other debt obligations is primarily
related to the deferred purchase price of (i) land needed to support a landfill expansion and (ii) Greenstar LLC,
which is discussed further in Note 19. This increase was partially offset by net repayments of various borrowings
at their scheduled maturities.
Scheduled Debt Payments — Principal payments of our debt and capital leases for the next five years, based
on their contractual terms, are as follows: $916 million in 2014; $491 million in 2015; $704 million in 2016;
$731 million in 2017; and $793 million in 2018. 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 low-income housing properties.
Debt Covenants
Our $2.25 billion revolving credit facility, our Canadian credit facility and term loan and certain other
financing agreements contain financial covenants. The following table summarizes the most restrictive
requirements of these financial covenants (all terms used to measure these ratios are defined by the facilities):
Interest coverage ratio ..................................................... >2.75 to 1
Total debt to EBITDA(a) ................................................... <3.75 to 1
(a) In conjunction with the amendment and restatement of our $2.25 billion revolving credit facility in July
2013, the maximum ratio was increased from 3.50:1 to 3.75:1 for quarters ending before September 30,
2015. After such time, the covenant ratio will revert back to 3.50:1 for each fiscal quarter through maturity
of the facility in July 2018.
Our credit facilities and senior notes also contain certain restrictions intended to monitor our level of
subsidiary 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, 2013 and 2012, 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 2013 2012
Electricity commodity derivatives ..... Current other assets $— $ 1
Foreign currency derivatives ......... Long-term other assets 2 —
Total derivative assets ............. $ 2 $ 1
Electricity commodity derivatives ..... Current accrued liabilities $ 3 $ 5
Interest rate derivatives .............. Current accrued liabilities 28 —
Foreign currency derivatives ......... Current accrued liabilities — 11
Interest rate derivatives .............. Long-term accrued liabilities — 42
Total derivative liabilities .......... $31 $58
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