Waste Management 2015 Annual Report Download - page 161

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Also affecting the change in the carrying value of our senior notes from December 31, 2014 to
December 31, 2015 were decreases due to the amortization and write-off associated with fair value hedge
accounting for previously terminated interest rate swap contracts, as discussed in Note 8, offset primarily by
underwriting discounts related to the issuance of new senior notes in February 2015.
Tax-Exempt Bonds — During the year ended December 31, 2015, we repaid $79 million of our tax-exempt
bonds with available cash. Additionally, we elected to refund and reissue $262 million of tax-exempt bonds and
finance the related debt issuance costs and premiums totaling $5 million. The “Loss on early extinguishment of
debt” reflected in our Consolidated Statement of Operations for the year ended December 31, 2015 includes $3
million of charges related to these refundings.
Capital Leases and Other — The decrease in our capital leases and other debt obligations is primarily
related to the net repayment of various borrowings at their scheduled maturities, including a $20 million
guaranteed payment related to the acquisition of Greenstar, LLC (“Greenstar”), which is discussed further in
Note 19.
Scheduled Debt Payments — Principal payments of our debt and capital leases for the next five years, based
on scheduled maturities are as follows: $730 million in 2016, $221 million in 2017, $792 million in 2018, $175
million in 2019, and $740 million in 2020. 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 ............................. <3.50 to 1
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, 2015 and 2014, we were in compliance with the covenants and
restrictions under all of our debt agreements that may have a material effect on our Consolidated Financial
Statements.
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