Waste Management 2015 Annual Report Download - page 159

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Debt Classification
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 long-term U.S. revolving credit facility (“$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.
As of December 31, 2015, we also had $491 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 successful. 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 $2.25 billion revolving credit
facility to fund the debt obligations until they can be remarketed successfully. Accordingly, we classified these
borrowings as long-term in our Consolidated Balance Sheet at December 31, 2015.
Access to and Utilization of Credit Facilities
$2.25 Billion Revolving Credit Facility — In July 2015, we amended and restated our $2.25 billion
revolving credit facility, extending the term through July 2020. 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 0.805% to 1.30%. At December 31,
2015, we had $20 million of outstanding borrowings and $831 million of letters of credit issued and supported by
the facility, leaving unused and available credit capacity of $1,399 million.
Letter of Credit Facilities — As of December 31, 2015, we had an aggregate committed capacity of $150
million under letter of credit facilities with terms extending through December 2018. This letter of credit capacity
was fully utilized as of December 31, 2015. 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 guarantee 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%.
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,
2015 and 2014, we had no borrowings and no letters of credit outstanding under the facility.
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