Waste Management 2014 Annual Report Download - page 176

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Debt Classification
As of December 31, 2014, our current debt balances include (i) $947 million of senior notes repaid with
available cash in January 2015 that the Company decided to redeem in advance of their scheduled maturities,
including $350 million of 6.375% senior notes that were scheduled to mature in March 2015, $147 million of
7.125% senior notes that were scheduled to mature in December 2017 and $450 million of 7.375% senior notes
that were scheduled to mature in March 2019 and (ii) $143 million of debt with scheduled maturities within the
next 12 months, including $64 million of tax-exempt bonds.
As of December 31, 2014, we also have $638 million of tax-exempt bonds with term interest rate periods
that expire within 12 months and an additional $501 million of variable-rate tax-exempt bonds that are supported
by letters of credit. The interest rates on these bonds are reset on either a daily or weekly basis through a
remarketing process. All recent remarketings have successfully placed Company bonds with investors at
reasonable, market-driven rates and we currently expect future remarketings to be a success. However, if the
remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of
a failed remarketing, we have the intent and ability to use availability under our long-term U.S. revolving credit
facility (“$2.25 billion revolving credit facility”) to fund the debt obligation until it can be remarketed
successfully. Accordingly, we classified these borrowings as long-term in our Consolidated Balance Sheet at
December 31, 2014.
Access to and Utilization of Credit Facilities
$2.25 Billion Revolving Credit Facility — In July 2013, we amended and restated our revolving credit
facility, increasing our total credit capacity to $2.25 billion and extending the term through July 2018. This
facility provides us with credit capacity to be used for either cash borrowings or to support letters of credit. The
rates we pay for outstanding loans are generally based on LIBOR plus a spread depending on the Company’s
debt rating assigned by Moody’s Investors Service and Standard and Poor’s. The spread above LIBOR ranges
from 0.90% to 1.475%. At December 31, 2014, we had no outstanding borrowings and $785 million of letters of
credit issued and supported by the facility, leaving unused and available credit capacity of $1,465 million.
Letter of Credit Facilities — As of December 31, 2014, we had an aggregate committed capacity of $400
million under letter of credit facilities with terms ending through December 2018. This letter of credit capacity
was fully utilized as of December 31, 2014. The financial assurance needs of our business are extensive so we
supplement the letter of credit capacity we have through these committed facilities with stand-alone letters of
credit with various banking partners.
Canadian Credit Facility and Term Loan — Waste Management of Canada Corporation and WM Quebec
Inc., wholly-owned subsidiaries of WM, are borrowers under a Canadian credit agreement that provides C$150
million of revolving credit capacity and initially provided C$500 million of term credit. The credit agreement
matures in November 2017. WM and WM Holdings guaranty all subsidiary obligations outstanding under the
credit agreement. The rates we pay for outstanding loans under the Canadian credit agreement are generally
based on the applicable Canadian Dealer Offered Rate (CDOR) plus a spread depending on the Company’s debt
rating assigned by Moody’s Investors Service and Standard and Poor’s. The spread above CDOR ranges from
1.125% to 2.15%.
In the fourth quarter of 2012, we established the C$150 million revolving credit capacity to refinance
borrowings outstanding under a Canadian term credit agreement that would have matured in November 2012 and
to provide additional liquidity for our Canadian operations. We have the ability to issue up to C$50 million of
letters of credit under the Canadian revolving credit facility, which if utilized, reduces the amount of credit
capacity available for borrowings. As of December 31, 2014 and 2013, we had no letters of credit outstanding
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