Waste Management 2014 Annual Report Download - page 177

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
under the facility. We had no outstanding borrowings as of December 31, 2014 and C$10 million of outstanding
borrowings as of December 31, 2013.
The C$500 million of term credit was established specifically to fund the acquisition of substantially all of
the assets of RCI and was fully drawn in July 2013. The term credit is non-revolving credit and principal
amounts repaid may not be re-borrowed. Through December 31, 2014, we had repaid C$230 million of the term
credit with available cash, reducing the outstanding and drawn credit to C$270 million. For additional
information related to borrowings and principal repayments under the term credit, see below.
Debt Borrowings and Repayments
Canadian Credit Facility and Term Loan — Our outstanding CDOR-based advances, which are generally
indexed to one-month CDOR, mature in November 2017, but are prepayable without penalty. Accordingly, this
debt has been classified as long-term in our Consolidated Balance Sheet. We repaid C$170 million, or $155
million, of the advances under our Canadian credit agreement during the year ended December 31, 2014 with
available cash. The remaining change in the carrying value of our Canadian credit facility and term loan is due to
changes in the Canadian currency translation rate.
Senior Notes — In March 2014, we repaid $350 million of 5.0% senior notes upon maturity with
borrowings under our $2.25 billion revolving credit facility. In May 2014, we issued $350 million of 3.5% senior
notes due May 15, 2024. The net proceeds from the debt issuance were $347 million, all of which were used to
repay borrowings under our $2.25 billion revolving credit facility. The change in the carrying value of our senior
notes from December 31, 2013 to December 31, 2014 is principally due to fair value hedge accounting for
interest rate swap contracts. Refer to Notes 8 and 14 for additional information regarding our interest rate
derivatives.
Tax-Exempt Bonds — During the year ended December 31, 2014, we repaid $123 million of our tax-exempt
bonds with available cash.
Scheduled Debt Payments — Principal payments of our debt and capital leases for the next five years, based
on scheduled maturities as adjusted for the Company’s optional early redemption of certain of its senior notes,
are as follows: $1,075 million in 2015; $717 million in 2016; $402 million in 2017; $801 million in 2018; and
$132 million in 2019. 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 agreement 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
100