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Debt and Derivatives | 12 Months Ended
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Dec. 31, 2024
Debt and Derivatives |
Debt and Derivatives | 6. Debt and Derivatives The following table summarizes the major components of debt at principal amounts as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of December 31:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2024 |  | 2023
Commercial paper program (weighted average interest rate of 4.7% as of December 31, 2024 and 5.6% as of December 31, 2023) | ​ | $ | 1,250 | ​ | $ | 860
Senior notes, maturing through 2054, interest rates ranging from 0.75% to 7.75% (weighted average interest rate of 4.2% as of December 31, 2024 and 3.7% as of December 31, 2023) | ​ |  | 18,419 | ​ |  | 11,376
Canadian senior notes, C$500 million maturing September 2026, interest rate of 2.6% | ​ | ​ | 348 | ​ | ​ | 378
Tax-exempt bonds, maturing through 2053, fixed and variable interest rates ranging from 0.70% to 4.80% (weighted average interest rate of 3.7% as of December 31, 2024 and 3.3% as of December 31, 2023) | ​ |  | 2,873 | ​ |  | 2,883
Financing leases and other, maturing through 2082 (weighted average interest rate of 4.9% as of December 31, 2024 and 5.0% as of December 31, 2023) (a) | ​ |  | 1,189 | ​ |  | 855
Debt issuance costs, discounts and other | ​ |  | (179) | ​ |  | (123)
​ | ​ |  | 23,900 | ​ |  | 16,229
Current portion of long-term debt | ​ |  | 1,359 | ​ |  | 334
Long-term debt, less current portion | ​ | $ | 22,541 | ​ | $ | 15,895
(a) | Excluding our landfill financing leases, the maturities of our financing leases and other debt obligations extend through 2059.
Debt Classification As of December 31, 2024, we had approximately $4.0 billion of debt maturing within the next 12 months, including (i) $1.4 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (ii) $1.2 billion of short-term borrowings under our commercial paper program (net of related discount on issuance); (iii) $422 million of 3.125% senior notes that mature in March 2025; (iv) $500 million of 0.750% senior notes that mature in November 2025 and (v) $438 million of other debt with scheduled maturities within the next 12 months, including $298 million of tax-exempt bonds. As of December 31, 2024, we have classified $2.6 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S. and Canadian revolving credit facility (“$3.5 billion revolving credit facility”). The remaining $1.4 billion of debt maturing in the next 12 months is classified as current obligations. Access to and Utilization of Credit Facilities, Term Credit Agreement and Commercial Paper Program Term Credit Agreement up to $7.2 Billion — On August 28, 2024, the Company entered into a delayed draw Term Credit Agreement in a principal amount of up to $7.2 billion (the “Term Credit Agreement”). In October 2024, we drew $5.2 billion of borrowings under the Term Credit Agreement that were applied to funding our acquisition of Stericycle. In November 2024, we repaid all outstanding borrowings and contemporaneously terminated the Term Credit Agreement. $3.5 Billion Revolving Credit Facility — In May 2024, we amended and restated our $3.5 billion U.S. and Canadian revolving credit facility, extending the term through May 2029. The agreement includes a $1.0 billion accordion feature that may be used to increase total capacity in future periods, and we have the option to request up to two one-year extensions. Waste Management of Canada Corporation and WM Quebec Inc., each an indirect wholly-owned subsidiary of WMI, are borrowers under the $3.5 billion revolving credit facility, and the agreement permits borrowing in Canadian dollars up to the U.S. dollar equivalent of $375 million, with such borrowings to be repaid in Canadian dollars. WM Holdings, Inc. (“WM Holdings”), a wholly-owned subsidiary of WMI, guarantees all the obligations under the $3.5 billion revolving credit facility. ​ The $3.5 billion revolving credit facility provides us with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper program. The interest rates we pay on outstanding U.S. or Canadian loans are based on a secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”) or the Canadian Overnight Repo Rate Average (“CORRA”) administered by the Bank of Canada, respectively, plus a spread depending on our senior public debt rating assigned by Moody’s Investors Service, Inc. and Standard and Poor’s Global Ratings. The spread above SOFR or CORRA can range from 0.585% to 1.025% per annum, plus applicable credit adjustments. We also pay certain other fees set forth in the $3.5 billion revolving credit facility agreement, including a facility fee based on the aggregate commitment, regardless of usage. As of December 31, 2024, we had no outstanding borrowings under this facility. We had $1.2 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program and $224 million of letters of credit issued, both supported by the facility, leaving unused and available credit capacity of $2.1 billion as of December 31, 2024. Commercial Paper Program — We have a commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates. The rates we pay for outstanding borrowings are based on the term of the notes. The commercial paper program is fully supported by our $3.5 billion revolving credit facility. As of December 31, 2024, we had $1.2 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program. Other Letter of Credit Lines — As of December 31, 2024, we had utilized $862 million of other uncommitted letter of credit lines with terms extending through December 2028. Debt Borrowings and Repayments Commercial Paper Program — During the year ended December 31, 2024 we made cash repayments of $12.3 billion, which were partially offset by $12.7 billion of cash borrowings (net of related discount on issuance). A portion of these borrowings were repaid with proceeds from our senior notes issuances discussed below. Senior Notes — In July 2024, WMI issued $750 million of 4.950% senior notes due July 2027 and $750 million of 4.950% notes due July 2031, the net proceeds of which were $1.49 billion. The net proceeds were used primarily to reduce outstanding borrowings under our commercial paper program. We also repaid $156 million of WMI’s 3.500% senior notes upon maturity in May 2024. ​ In November 2024, we issued senior notes, the net proceeds of which were approximately $5.2 billion, consisting of (i) $1.0 billion of 4.500% senior notes due March 2028; (ii) $700 million of 4.650% senior notes due March 2030; (iii) $750 million of 4.800% senior notes due March 2032; (iv) $1.5 billion of 4.950% senior notes due March 2035 and (v) $1.25 billion of 5.350% senior notes due October 2054. We used the net proceeds to repay all outstanding borrowing under the Term Credit Agreement. ​ Term Credit Agreement - In October 2024, we drew $5.2 billion of borrowings under the Term Credit Agreement that were applied to funding our acquisition of Stericycle. In November 2024, we repaid all outstanding borrowings with net proceeds from our November 2024 issuance of $5.2 billion of senior notes and contemporaneously terminated the Term Credit Agreement, resulting in a $7 million loss on early extinguishment of debt. Stericycle Exchange Offer and Consent Solicitation – On November 8, 2024, we completed our private offer to eligible holders to exchange $500 million of outstanding 3.875% senior notes issued by Stericycle (the “Stericycle Notes”) for new notes issued by us (the “WM Notes”) and cash. The WM Notes have the same interest rate, interest payment dates, and maturity date as the exchanged Stericycle Notes but differ in certain respects from the Stericycle Notes, including with respect to the redemption provisions. Approximately $485 million in aggregate principal amount of the Stericycle Notes, or 97%, were tendered and accepted, and new WM Notes were issued. The portion of Stericycle Notes not exchanged, approximately $15 million, remains an outstanding obligation of Stericycle, our wholly-owned subsidiary. The debt exchange is accounted for as a modification of debt, as the financial terms of the WM Notes do not differ from the Stericycle Notes, and there is no substantial difference between the present value of cash flows under each respective set of notes. In connection with the exchange offer, we solicited and obtained sufficient consents to amend the Stericycle Notes and related indenture to eliminate substantially all the restrictive covenants, restrictive provisions and events of default, other than payment-related, guarantee-related and bankruptcy-related events of default, and such amendments took effect with respect to the remaining Stericycle Notes on November 8, 2024. Tax-Exempt Bonds — We issued $50 million of tax-exempt bonds in 2024. The proceeds from the issuance of these bonds were deposited directly into a restricted trust fund to be used for the specific purpose for which the money was raised, which is generally to finance expenditures for solid waste disposal, recycling and renewable natural gas facility construction and development. In 2024, we also repaid $60 million of our tax-exempt bonds with available cash at their scheduled maturities. Financing Leases and Other — The increase in our financing leases and other debt obligations in 2024 are primarily related to (i) a note payable associated with our low-income housing investment discussed in Note 8, which increased our debt obligations by $316 million and (ii) $153 million primarily related to non-cash financing leases. The increase in our debt obligations was partially offset by $135 million of cash repayments of debt at maturity. Scheduled Debt Payments Principal payments of our debt for the next five years and thereafter, based on scheduled maturities are as follows: $2,613 million in 2025, $747 million in 2026, $2,022 million in 2027, $1,969 million in 2028, $2,048 million in 2029 and $14,680 million thereafter. Our recorded debt and financing lease obligations include non-cash adjustments associated with debt issuance costs, discounts and fair value adjustments attributable to terminated interest rate derivatives, which have been excluded from these amounts because they will not result in cash payments. As discussed above, we have the intent and ability to refinance our commercial paper borrowings on a long-term basis. See Note 7 below for further discussion of our financing lease arrangements. Secured Debt Our debt balances are generally unsecured, except for financing lease obligations and the notes payable associated with our investments in low-income housing properties. See Notes 8 and 18 for additional information related to these investments. Debt Covenants The terms of certain of our financing arrangements require that we comply with financial and other covenants. Our most restrictive financial covenant is the one contained in our $3.5 billion revolving credit facility, which sets forth a maximum total debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization ratio (the “Leverage Ratio”). This covenant requires that the Leverage Ratio for the preceding four fiscal quarters will not be more than 3.75 to 1, provided that if an acquisition permitted under the $3.5 billion revolving credit facility involving aggregate consideration in excess of $200 million occurs during the fiscal quarter, the Company shall have the right to increase the Leverage Ratio to 4.25 to 1 during such fiscal quarter and for the following three fiscal quarters (the “Elevated Leverage Ratio Period”). Given the strength of the Company’s financial position and its expectation to maintain headroom within the Leverage Ratio, the Company has not elected to increase the Leverage Ratio for an Elevated Leverage Ratio Period in connection with the acquisition of Stericycle. There shall be no more than two Elevated Leverage Ratio Periods during the term of the $3.5 billion revolving credit facility, and the Leverage Ratio must return to 3.75 to 1 for at least one fiscal quarter between Elevated Leverage Ratio Periods. The calculation of all components used in the Leverage Ratio covenant are as defined in the $3.5 billion revolving credit facility. As of December 31, 2024 and 2023, we were in compliance with our Leverage Ratio covenant. Our $3.5 billion revolving credit facility, senior notes and other financing arrangements also contain certain restrictions on the ability of the Company’s subsidiaries to incur additional indebtedness as well as restrictions on the ability of the Company and its subsidiaries to, among other things, incur liens, engage in sale-leaseback transactions and engage in mergers and consolidations. 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, 2024 and 2023, we were in compliance with all covenants and restrictions under our financing arrangements, in addition to our Leverage Ratio covenant, that may have a material effect on our Consolidated Financial Statements. ​ Derivatives In order to secure underlying interest rates associated with senior note issuances, we entered into treasury lock transactions during 2024 to (i) fix the ten-year treasury rate on an aggregate notional amount of $900 million and (ii) to fix the thirty-year treasury rate on an aggregate notional amount of $650 million. We designated our treasury locks as cash flow hedges. These treasury rate locks were terminated contemporaneously with the related issuances of senior notes in November 2024, and we received cash of $35 million to settle the related assets. The deferred gains are being amortized from accumulated other comprehensive (loss) income to interest expense over the ten-year and thirty-year lives of the related senior notes issuances using the effective interest method. Additionally, although not material to our financial statements, we do periodically enter into natural gas hedges to mitigate against risk from fluctuation in natural gas prices. As of December 31, 2024, our outstanding natural gas hedges were immaterial.

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