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Debt | 12 Months Ended
--- | ---
Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | 7. Debt The following table summarizes the major components of debt at each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of December 31, 2016:
|  | 2016 |  |  | 2015 |
$2.25 billion revolving credit facility, maturing July 2020 (weighted average interest rate of 1.9% at December 31, 2016) |  | $ | 426 |  |  | $ | 20 |
Commercial paper program |  |  | — |  |  |  | — |
Other letter of credit facilities, maturing through December 2018 |  |  | — |  |  |  | — |
Canadian term loan and revolving credit facility, maturing March 2019 (weighted average effective interest rate of 2.1% at December 31, 2016 and 2.2% at December 31, 2015) |  |  | 239 |  |  |  | 84 |
Senior notes maturing through 2045, interest rates ranging from 2.40% to 7.75% (weighted average interest rate of 4.6% at December 31, 2016 and 4.7% at December 31, 2015) |  |  | 6,033 |  |  |  | 6,050 |
Tax-exempt bonds maturing through 2045, fixed and variable interest rates ranging from 0.7% to 5.7% (weighted average interest rate of 1.8% at December 31, 2016 and 1.9% at December 31, 2015) |  |  | 2,304 |  |  |  | 2,447 |
Capital leases and other, maturing through 2055, interest rates up to 12% |  |  | 308 |  |  |  | 328 |
|  | $ | 9,310 |  |  | $ | 8,929 |
Current portion of long-term debt |  |  | 417 |  |  |  | 253 |
|  | $ | 8,893 |  |  | $ | 8,676 |
Debt Classification As of December 31, 2016, the current portion of our long-term debt balance of $417 million includes (i) $230 million of short-term borrowings under our long-term U.S. revolving credit facility (“$2.25 billion revolving credit facility”) and (ii) $187 million of other debt with scheduled maturities within the next 12 months, including $126 million of tax-exempt bonds. As of December 31, 2016, we have classified $196 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. We generally use available cash to repay borrowings outstanding under our $2.25 billion revolving credit facility and any remaining balances are maintained by extending the maturities of the borrowings. Our current projections indicate that we will maintain $196 million of the $426 million of borrowings outstanding for the next 12 months. The remaining $230 million of borrowings outstanding under our $2.25 billion revolving credit facility is classified as current in our Consolidated Balance Sheet at December 31, 2016. As of December 31, 2016, we also have $473 million of tax-exempt bonds with term interest rate periods that expire within the next 12 months and an additional $491 million of variable-rate tax-exempt bonds that are supported by letters of credit. The interest rates on our variable-rate tax-exempt bonds are generally reset on either a daily or weekly basis through a remarketing process. All recent tax-exempt bond remarketings have successfully placed Company bonds with investors at 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, 2016. Access to and Utilization of Credit Facilities $2.25 Billion Revolving Credit Facility — Our $2.25 billion revolving credit facility maturing in July 2020 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 1.3%. At December 31, 2016, we had $426 million of outstanding borrowings and $789 million of letters of credit issued and supported by this facility, leaving unused and available credit capacity of $1,035 million. Commercial Paper Program — In August 2016, we entered into a $1.5 billion commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates. The commercial paper program is fully supported by our $2.25 billion revolving credit facility. In order to borrow in the commercial paper market, the Company must obtain short-term credit ratings. We are in the process of working with the credit rating agencies to obtain these ratings and, as a result, we did not have any commercial paper borrowings as of or during the year ended December 31, 2016. Canadian Term Loan and Revolving Credit Facility — In March 2016, we amended and restated our Canadian credit agreement (which includes a term loan and revolving credit facility), to decrease the revolving credit capacity, increase the amount of term credit, and extend the term through March 2019. Waste Management of Canada Corporation and WM Quebec Inc., wholly-owned subsidiaries of WM, are borrowers under this agreement. The amended and restated credit agreement provides the Company (i) C$50 million of revolving credit capacity, which can be used for borrowings or letters of credit, and (ii) C$460 million of non-revolving term credit that is prepayable without penalty. Prior to closing, there was a balance of C$90 million remaining on the prior C$500 million term loan. Upon closing, the term loan was fully drawn to repay the indebtedness owed under the prior Canadian credit agreement and to repay C$370 million of intercompany debt. WM and WM Holdings guarantee all subsidiary obligations outstanding under this credit agreement. The rates we pay for outstanding loans under the Canadian credit agreement are generally based on the applicable 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 0.875% to 1.5%. At December 31, 2016 and 2015, we had no borrowings or letters of credit outstanding under the Canadian revolving credit agreement. Other Letter of Credit Facilities — As of December 31, 2016, we had utilized $492 million of other letter of credit facilities, which are both committed and uncommitted, with terms extending through December 2018. Debt Borrowings and Repayments $2.25 Billion Revolving Credit Facility — During the year ended December 31, 2016, we had net borrowings of $406 million under our $2.25 billion revolving credit facility. These net borrowings included funds to support our acquisition of certain operations and business assets of SWS. Refer to Note 19 for additional information related to this acquisition. Canadian Term Loan — During the three months ended March 31, 2016, we repaid C$27 million, or $20 million, of advances under our prior Canadian term loan reducing the balance to C$90 million at the time of the amendment and restatement of the credit agreement. Upon closing of the new Canadian credit agreement, we borrowed C$460 million, or $347 million, to repay the prior term loan and to allow our Canadian subsidiaries to repay C$370 million, or $280 million, of intercompany debt. From April 1, 2016 through December 31, 2016, we repaid C$139 million, or $105 million, of advances under our Canadian term loan. Senior Notes — In May 2016, we issued $500 million of 2.4% senior notes that mature in May 2023. We utilized the net proceeds of $496 million to repay $500 million of 2.6% senior notes that matured in September 2016. Tax-Exempt Bonds — During the year ended December 31, 2016, we repaid $146 million of our tax-exempt bonds with available cash. In May 2016, we elected to refund and reissue $143 million of tax-exempt bonds in order to reduce the interest costs associated with this debt. The “Loss on early extinguishment of debt” reflected in our Consolidated Statement of Operations for the year ended December 31, 2016 includes $3 million of charges related to these refundings. Scheduled Debt Payments — Principal payments of our debt and capital leases for the next five years, based on scheduled maturities are as follows: $610 million in 2017, $783 million in 2018, $432 million in 2019, $746 million in 2020, and $540 million in 2021. Our recorded debt and capital lease obligations include non-cash adjustments associated with discounts, premiums, deferred loan costs and fair value adjustments for interest rate hedging activities, which have been excluded from these amounts because they will not result in cash payments. Senior Notes Refinancing During 2015, we recognized a pre-tax loss of $552 million associated with the early extinguishment of almost $2 billion of our high-coupon senior notes through make-whole redemption and cash tender offers. We replaced substantially all of the debt extinguished with new senior notes at significantly lower coupon interest rates and extended the weighted average duration of these debt obligations. 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, 2016 and 2015, 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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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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