Waste Management 2015 Annual Report Download - page 124

Cash and cash equivalents — Cash and cash equivalents at December 31, 2014, included a portion of the
$1.95 billion of proceeds from the divestiture of our Wheelabrator business in December 2014. In 2015, we have
primarily allocated available cash to the acquisition of Deffenbaugh, repurchasing shares and paying premiums
on the early extinguishment of debt. Discussion of these activities is included in Notes 19, 15 and 7, respectively,
to the Consolidated Financial Statements.
Restricted trust and escrow accounts — The decrease in final capping, closure, post-closure and
environmental remediation funds from December 31, 2014 to December 31, 2015 is primarily due to the closure
of certain trust and escrow accounts which were converted to other forms of financial assurance. Other restricted
trust and escrow accounts at December 31, 2014 included the funding of a legal settlement which was paid in full
in the second quarter of 2015.
Debt — We use long-term borrowings in addition to the cash we generate from operations as part of our
overall financial strategy to support and grow our business. We primarily use senior notes and tax-exempt bonds
to borrow on a long-term basis, but we also use other instruments and facilities when appropriate. The
components of our long-term borrowings as of December 31, 2015 are described in Note 7 to the Consolidated
Financial Statements.
Changes in our outstanding debt balances from December 31, 2014 to December 31, 2015 were primarily
attributable to (i) net debt repayments of $427 million and (ii) the impacts of other non-cash changes in our debt
balances due to hedge accounting for interest rate swaps, foreign currency translation, and discounts.
As of December 31, 2015, we had $732 million of debt maturing within the next 12 months, including
(i) $500 million of 2.6% senior notes that mature in September 2016; (ii) $146 million of tax-exempt bonds and
(iii) $20 million of borrowings outstanding under our $2.25 billion revolving credit facility. In addition, $316
million of tax-exempt bonds have term interest rate periods subject to repricing within the next 12 months, which
is prior to their scheduled maturities. We have classified the $20 million of borrowings outstanding under our
$2.25 billion revolving credit facility as long-term because we intend and have the ability to refinance or
maintain these borrowings on a long-term basis. Based on our intent and ability to refinance other portions of our
current obligations on a long-term basis as of December 31, 2015, including through use of forecasted available
capacity under our $2.25 billion revolving credit facility, we have classified an additional $775 million of debt as
long-term. The remaining $253 million is classified as current obligations.
During 2015, we refinanced a significant portion of our high-coupon senior notes in order to reduce the
weighted average interest rate and extend the weighted average duration of our debt balances. We achieved this
through a combination of a make-whole redemption of certain senior notes, cash tender offers to purchase certain
senior notes and the issuance of $1.8 billion of new senior notes consisting of:
• $600 million of 3.125% senior notes due March 1, 2025;
• $450 million of 3.90% senior notes due March 1, 2035; and
• $750 million of 4.10% senior notes due March 1, 2045.
The net proceeds from these debt issuances were $1.78 billion. The Company used the proceeds from the
2025 notes for general corporate purposes. The proceeds from the 2035 notes and the 2045 notes were used to
pay the purchase price and accrued interest for the notes redeemed through the tender offers discussed above and
for general corporate purposes. See Note 7 to the Consolidated Financial Statements for more information related
to the debt transactions.
61