WM 10-K & 10-Q changes, risk factors and insider trading

Our business, financial condition and results of operations are subject to numerous risks and uncertainties.uncertainties, some of which are not presently known or not currently believed to be material. You should carefully consider the following risk factors in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” inand Item 78. and our “Financial Statements and Supplementary Data” in Item 8. In addition to the following risks, there may be additional risks and uncertainties that adversely affect our business, performance, or financial condition in the future that are not presently known or are not currently believed to be material.Data.

In addition to the risks set forth above, implementation of our business strategy could be affected by other factors beyond our control, such as increased competition, legal developments, government regulation, global geopolitical instability, general economic conditions, including slower growth or recession, increased operating costs or expenses, inflation, subcontractor costs and availability and changes in industry trends. We may decide to alter or discontinue certain aspectsImplementation of our business strategy atmay anynot time. Even if we are able to implement some or all of the initiatives of our business strategy successfully,improve our operating results may not improve to the extent we anticipate, or at all.

We may not realize the strategic benefitsbenefits, revenue and earnings growth, or cost synergies anticipated from the Stericycle acquisition.

The benefits we expect to receive from the acquisition of Stericycle depend on the performance of the Stericycle business and its ability to achieve financial and operational targets and strategic goals. The acquired Stericycle business, which is now presented as our new WM Healthcare Solutions segment, is subject to numerous risks and uncertainties that could cause performance to be materially different than we anticipate; such factors include, but are not limited to,as decreases in the volume of medical waste and controlled substances wastes or personal and confidential information collected from customers; disruptions resulting from deployment of operational or technological systems, including with respect to theHealthcare implementation of Stericycle’sSolution’s enterprise resource planning (“ERP”) system and related billing and collection issues and delays; thatcustomer Stericycleloss hasresulting experiencedfrom followingfrustration thedue launchto billing or service issues; delayed revenue growth from planned pricing increases due to factors including customer retention, stabilization of suchcustomer systemdata upgradeengagement systems and processes, and more prolonged development of market and customer-specific insights than initially planned; changing market conditions in the healthcare industry; competition and demand for services for the medical waste, controlled substances waste and secure information destruction industries; commodity price volatility; changes in regulation of the collection, transportation, treatment and disposal or destruction of medical waste and controlled substances waste or the proper handling and protection of personal and confidential information; the level of government enforcement of regulations governing medical waste and controlled substances waste collection and treatment or the proper handling and protection of personal and confidential information; and the outcome of pending, future or settled litigation or investigations. ShouldIf thewe Stericycle business beare unsuccessful in achieving financial and operational targets and implementing the WM Healthcare Solutions business strategy, it could negatively impact our realization of benefits from the acquisition, as well as our stock price and our future business and financial results.

The benefits that are expected to result from our acquisition of Stericycle also depend, in part, on our ability to realize anticipated cost synergies. Our success in realizing these benefits and cost synergies, and the timing of this realization, depends on the successful integration of the Stericycle business. There is a significant degree of difficulty and management attention inherent in the process of integrating an acquisition of this size. The process of integrating operations could cause business interruption and distraction. Some members of our management may be required to devote considerable time to this integration process, which will decrease the time they will have to manage our Company, service existing customers, attract new customers and develop new products or strategies. If management is not able to effectively manage the integration process, including retention of key Stericycle personnel, or if any significant business activities are interrupted as a result of the integration process, our business, financial condition and results of operations could suffer. The acquisition of Stericycle may not result in realization of the benefits and cost synergies that we currently expect, and we cannot guarantee that these benefits and cost synergies will be achieved within anticipated time frames or at all.frames. Additionally, we have, and may continue to, incur substantial expenses in connection with the integration of the Stericycle business, which may exceed expectations and offset certain benefits.

Stringent government regulations at the federal, state, provincial and local level in the U.S. and Canada, as well as other international jurisdictions where we operate, have a substantial impact on our operations, and compliance with such regulations is costly. See Item 1. Business – Regulation for additional information. Many complex laws, rules, orders and interpretations govern environmental protection, health, safety, land use, zoning, transportation, ethical business conduct, data privacy and security, and other related and similar subjects. Among other things, governmental regulations and enforcement actions restrict our operations at times and may adversely affect our financial condition, results of operations and cash flows by imposing limitations or other conditions suchon as:constructing or expanding facilities; collection and disposal pricing and volume; transportation of out-of-state waste and management and processing of certain waste streams.

Regulations affecting the siting, design and closure of landfills require us, at times, to undertake investigatory or remedial activities, curtail operations or close landfills temporarily or permanently. We have significant financial obligations relating to final capping, closure, post-closure and environmental remediation at our existing landfills and we establish accruals for these estimated costs. Expenditures could be accelerated or materially exceed our accruals due to earlier than expected closure of landfills; the types of waste collected and manner in which it is transported and disposed of, including actions taken in the past by companies we have acquired or third-party landfill operators; environmental regulatory changes; new information about waste types previously collected, or other emerging contaminants. Similar issues can also result in a significant increase in operating costs; for example, developments in recent years related to management of per-andper- and polyfluoroalkyl substances (“PFAS”) have increased our landfill operating costs. Federal and state governments have increased their focus on efforts to safeguard communities from the potentially harmful effects associated with PFAS. See Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – PFAS for additional information. We may face increased exposure to testing, remediation and litigation costs as a result of new and emerging PFAS regulations and requirements.

Regulations establishing extended producer responsibility (“EPR”) are being considered or implemented in many places around the world, including in certain states in the U.S. and provinces and territories in Canada. EPR regulations are designed to place either partial or total responsibility on producers of consumer-packaged goods and other products to fund the post-use life cycle of the products and packaging they create. At the same time, concerns over price and affordability have led some jurisdictions to scale back previously enacted EPR requirements, and certain programs have faced lawsuits and potential constitutional review, creating uncertainty for long-term planning. For additional information, See Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – Extended Producer Responsibility. A significant reduction in the waste, recycling and other streams we manage, including with respect to quality and volume, could have a material adverse effect on our financial condition, results of operations and cash flows. Conversely, changes in program requirements or deregulatory rulings in jurisdictions where we have adapted to meet customer demand could affect our operations, financial condition or results of operations.

Following our acquisition of Stericycle, weWe are also subject to additional laws and regulations in the U.S. and internationally concerning transportation, management and disposal or destruction of medical waste streams, including regulations that govern the definition, generation, segregation, handling, packaging, transportation, treatment, storage and disposal or destruction of medical waste and controlled substances waste, along with extensive recordkeeping and documentation requirements. Additionally, Stericycle’sOur secure information destruction services are subject to additional laws and regulations regarding proper handling and protection of personal and confidential information. Relaxation of enforcement, government shutdowns, or other changes in governmental regulation of medical waste and controlled substances waste and personal and confidential information could increase the number of competitors we face or reduce or delay the need for these services.

The newcurrent U.S. presidential administration has called forimplemented substantial changes to areas of foreign trade policy and hasis generally appeared to be in favor of reducing regulation, including environmental regulation. We do not know whatThe impact theand changetiming of these shifts in U.S. presidential administration will have on specific regulatory policiespolicy impacting our industry and our Company,Company especiallyremain givenuncertain, as many are subject to ongoing litigation and agency review. Reduction of regulation may have a favorable impact on our operating costs, but the numberextensive ofenvironmental rulesregulation currentlyapplicable into litigation,our norindustry canis wealso predicta thebarrier timingto ofrapid anyentry suchthat changes.benefits our Company. It is likely that some policies adopted by this administration will benefit us and others will negatively affect us.

Providing environmental and waste management services, including constructing and operating landfills, transfer stations, processing facilities, recycling facilities and other disposal or destruction facilities, and landfill gas-to-energy facilities, involves risks such as truck accidents, equipment defects, malfunctions and failures, and improper use of dangerous equipment. Additionally, we closely monitor and manage landfills to minimize the risk of waste mass instability, releases of hazardous materials, and odors that are sometimes triggered by weather or natural disasters. There are also risks presented by the potential for subsurface heat reactions causing elevated landfill temperatures and increased production of leachate, landfill gas and odors, and we have proactively incurred increased costs to manage leachate in response to this risk. We build and operate natural gas fueling stations, some of which also serve the public or third parties. Operation of fueling stations and landfill gas collection and control systems, as well as operation of heavy machinery and management of flammable materials at our recycling facilities and transfer stations, involves additional risks of fire and explosion. The StericycleHealthcare Solutions business requires handling of medical waste and controlled substances waste.waste and operates incineration facilities. Incidents such as truck accidents, damaged or leaking containers, improper storage of medical waste and controlled substances waste, placement of prohibited materials into the waste stream, or malfunctioning plant or incineration equipment could result in exposure to contaminated or infectious waste or other hazardous materials.

Any of these risks could potentially result in injury, illness or death of employees and others. These risks could also result in a need to shut down or reduce operation of facilities, increased operating costs and exposure to liability for pollution, public nuisance, and other environmental damage, and property damage or destruction. While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs, ifIf we were to incur substantial liabilities in excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected. Any such incidents could also tarnish our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.

Our ability to meet our financial and operating objectives depends in part on our ability to obtain and maintain the permits, authorizations, approvals, certificates, and other governmental permissions necessary to operate landfill sites, recycling facilities, compost facilities, processing facilities, landfill gas-to-energy facilities, incineration facilities and transfer stations in the various jurisdictions in which we operate. Changes in applicable laws and regulations could require us to obtain new permits or to change the way in which we operate our business. Even where permits are obtained, they may contain conditions or restrictions that limit our ability to operate efficiently. Permits to build, operate and expand solid waste management facilities, including landfills and transfer stations, have become more difficult and expensive to obtain and maintain. Permits often take years to obtain as a result of numerous hearings and compliance requirements with regard to zoning, environmental and other regulations. These permits are also often subject to resistance from citizen or other groups and other political pressures. Local communities and citizen groups, adjacent landowners or governmental agencies may oppose the issuance of a permit or approval we may need, allege violations of the permits under which we currently operate or laws or regulations to which we are subjected, or seek to impose liability on us for alleged environmental damage. Such actions could also impact our ability to do business by causing reputational harm. Our ability to receive permits is also impacted by land scarcity, particularly in densely populated areas. Diminishing disposal capacity, typically in proximity to major metropolitan areas, sometimes requires us to transport waste by rail or find alternative disposal solutions in affected areas, increasing our operating costs. GovernmentsCertain governmental bodies are increasinglyin various stages of adopting or considering the adoption of requirements for environmental justice reviews as part of certain permitting decisions. These policies generally require permitting agencies to give heightened attention to thea project’s potential for projects to disproportionately impact low-income and minority communities.communities and to proactively plan for community engagement. Responding to permit challenges has, at times, increased our costs and extended the time associated with establishing new facilities and expanding existing facilities. Our failure to obtain the required permits and necessary capacity expansion to operate our business, including our landfills, could have a material adverse impact on our financial condition, results of operations and cash flows.

If we are unable to attract, hirehire, ordevelop and retain key team members and a high-quality workforce, orand ifcomply ourwith successionapplicable planningemployment does not develop an adequate pipeline of future leaders,regulations, it could disruptresult ourin business,business jeopardize ourand strategic prioritiesdisruption and result in increased costs, negatively impacting our results of operations.

Our operations require us to attract, hire, develop and retain a high-quality workforce; to provide a superior customer experience. Thisthis includes key individuals in leadership and specialty roles, as well as a very large number of skilled drivers, technicians and other front-line and back-office team members necessary to provide our environmental services. We experience significant competition to hire and retain individuals for certain front-line positions, such as commercial truck drivers, from within and outside our industry. (Also see Item 1A. Risk Factors — Market disruption, including labor shortages, external strikes, and supply chain constraints, and macroeconomic pressures, including inflation, have recently had, and may in the future have, an adverse impact on our business and results of operations.)drivers. Additionally, the market for employees that serve on our digital team isand highly competitive. As we have acceleratedsupport our investments in our technology-led automation and optimization strategy, itstrategy is increasinglyhighly important that we are able to attract and retain employees with the skills and expertise necessary to implement and manage these projects.competitive. We also compete to attract skilled business leaders, and our own key team members are sought after by our competitors and other companies. WeLabor makeshortages, significantas investments,we have experienced in the past, could result in increased costs due to wage adjustments, overtime hours, training costs and engage in internal succession planning,inability to provideservice uscustomers. withAs aan robust pipelineemployer of futureover leaders.60,000 individuals throughout the U.S. and Canada, as well as Western Europe and India, we are subject to numerous employment related regulations, including federal and state wage and hour laws and rapidly changing laws related to employment eligibility. If we are not able to attract, hire, develop and retain a high-quality workforce with the necessary skills and expertise, as well as key leaders, or if we experience significant employee turnover, or if we fail to comply with applicable employment regulations, it can result in business and strategic disruption, increased costs, and loss of institutional knowledge, which could negatively impact our results of operations.

Increases in our labor costs as a result of labor unions organizing, Multiemployer Pension Plan withdrawals, changes in regulations related to labor unions or increases in employee minimum wages, could adversely affect our future results.

Labor unions continually attempt to organize our employees, and these efforts will likely continue in the future. Certain groups of our employees are currently represented by unions, and we have negotiated collective bargaining agreements with these unions. Additional groups of employees may seek union representation in the future, and, if successful, would enhance organized labor’s leverage to obtain higher than expected wage and benefits costs and resist the introduction of new technology and other initiatives, which can result in increased operating expenses and lower net income. If we are unable to negotiate acceptable collective bargaining agreements, our operating expenses could increase significantly as a result of work stoppages, including strikes. Additionally,We are a largeparticipating portionemployer in a number of trustee-managed multiemployer defined benefit pension plans (“Multiemployer Pension Plans”) for employees who are covered by collective bargaining agreements. In the event of our workforcewithdrawal arefrom hourlya personnel,Multiemployer andPension manyPlan, we may incur significant expenses associated with our obligations for unfunded vested benefits at the time of these individuals, particularly in our recycling business, are paid at rates related to federal and state minimum wages. Increases in minimum wage rates, or the enactmentwithdrawal of new wage-related legislation, may significantly increase our labor costs. Any of these mattersthat could adverselyhave affecta ourmaterial financialadverse condition,effect on results of operations andor cash flows.

Our financial and operating results may fluctuate for many reasons. Our operating revenues and volumes typically experience seasonal increases in the summer months, that are reflected in second and third quarter revenues and results of operations. Service or operational disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the geographic areas affected. Extreme weather events may also lead to supply chain disruption and delayed project development, or disruption of our customers’ businesses, reducing the amount of waste generated by their operations. Conversely, certain destructive weather and climate conditions, such as wildfires in the Western U.S. and hurricanes that most often impact our operations in the Southern and Eastern U.S. during the second half of the year, can increase our revenues in the geographic areas affected as a result of the waste volumes generated by these events. WhileMargins on weather-related and other event-driven projects canmay boostnot revenuesbe throughconsistent additionalwith workour forordinary acourse limited time, due to significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.business. For these and other reasons, operating results in any period may not be indicative of operating results for any other period. Our stock price may be negatively impacted by interim variations in our results.

There is increasing pressure to reduce the use of fossil fuel in the heavy-duty truck industry, and some regulatory bodies are pursuing requirements for using alternative engine technology, such as electric powered vehicles, rather than natural gas or diesel vehicles. This is resulting in regulatory actions to advance the adoption of zero-emission vehicles and a shift away from tax incentives and grants for natural gas trucks and RNG infrastructure. See Item 1. Business – Regulation – Investment in Natural Gas Vehicles and Infrastructure for additional information. Regulation mandating an accelerated transition away from natural gas trucks and our remaining diesel vehicles, including the recently acquired Stericycle fleet, to electric powered vehicles would increase our cost to acquire vehicles needed to service our customers, and capital investment required to establish sufficient charging infrastructure could be significant. Additionally, the investments we have made in an industry-leading natural gas fleet and infrastructure could be impaired. Tax incentives and grants that advance the adoption of zero-emissions vehicles and lead to a shift away from natural gas trucks and RNG infrastructure would likely also negatively impact our investments in landfill gas-to-energy facilities.

We may not be able to achieve our sustainability-related goals, including reduction of our greenhouse gas ("GHG") emissions, or executeachieve onthe results and benefits anticipated from our sustainability-related growth strategyinvestments and initiatives,initiatives within planned timelines or anticipated budget, which could damage our reputation and negatively impact the benefits anticipated from our investments.budget.

Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, weWe have set goals to reduce our GHG emissions and announced other sustainability-related goals and initiatives. We may not be able to meet such goals or implement such initiatives in the manner or on timelines contemplated due to challenges including, but not limited to, unforeseen costs or delays, changes in how GHG emissions are calculated or otherwise reported, supply chain disruptions, regulatory impacts, integration of acquired assets or businesses, technology limitations or technical difficulties associated with achieving such goals. Changes to our business or asset base that were not contemplated when we set our sustainability-related goals, including the acquisition and integration of Stericycle’s business, assets and operations,goals could adversely impact our progress towards these goals and require us to adjust them. These changes could negatively impact public perception of our Company and stakeholders may view these changes unfavorably. Also, despite voluntarily announcing such sustainability goals, we may receive pressure from investors or other groups to adopt more aggressive sustainability-related goals that may not be technically, operationally, or financially feasible.

In addition, ourwe sustainability-relatedhave growth strategy includesmade significant planned and ongoing investments in our Recycling Processing and Sales and WM Renewable Energy segments. OurTiming abilityand toachievement successfullyof executethe thisresults strategyand benefits anticipated from these investments may be impacted by the numerous risks and uncertainties associated with our business and the environmental services industry, including financial and operating performance,performance; availability of technology and financing,financing; changescompliance inwith regulation,regulations; inability to develop, obtain or scale necessary equipment; technology and innovations; challenges arising from the availability or cost of materials and infrastructure; difficulty obtaining regulatory approvals or permits; commodity price fluctuation and general economic conditions. (Also see Item 1A. Risk Factors — Our revenues, earnings and cash flows fluctuate based on changes in commodity prices and demand and may fluctuate substantially without notice in the future and — Our sustainability growth strategy includes significant planned and ongoing investments in our WM Renewable Energy segment; changesChanges to federal and state renewable fuel policies could affect ourthe financial performance,performance andof suchour investmentsRenewable mayEnergy not yield the results anticipated.segment). Favorable expectations regarding potential investment tax credits or other benefits stemming from the InflationIRA Reductionand Actthe of 2022 (“IRA”)OBBBA may not materialize or could fail to meet expectations. See Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – Tax Legislation for additional information.

We have also forecasted or projected certain operational and financial information with respect to our sustainability investments and initiatives, and many of these statements are based on expectations and assumptions that are necessarily uncertain and are subject to risks and uncertainties that could cause actual results to be materially different from our forecasts and projections.initiatives. For example, the amount of gas produced over time at landfills can vary depending on many factors, including weather and the composition of the inbound waste stream. WhileGas we have sophisticated systems to predict gas curves, theycurves are inherently uncertain, and if we have less gas than predicted at a site where we have invested in RNG infrastructure, it may take longer to achieve our return on investment. Relatedly, the quality of the gathered gas is subject to the composition of the waste deposited at our landfills, and the prevalence of certain chemical compounds may adversely affect the usability of such gas and require further investment in the treatment and management of such compounds. Regulations requiring diversion of organic wasteswaste away from landfills could have the effect of decreasing the amount of landfill gas produced over time in our landfills.

The nature, scope, and complexity of matters that our Company must assess, quantify and disclose are expanding due to current, proposed, and recently enacted governmental reporting requirements pertaining to sustainability and climate-related risks and other topics, such as water usage, waste production, labor, human capital, environmental justice, cybersecurity, privacy, and risk oversight. For example, seeSee Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – Climate and Sustainability for informationmore about California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, the SEC’s climate-related disclosure rule, which is currently stayed pending judicial review, as well as potential international reporting obligations, including the Corporate Sustainability Reporting Directive.information. Methodology and timelines for mandatory reporting requirements may be inconsistent with requirements enacted by other governmental entities, including with respect to measuring emissions and requiring a determination of “materiality” that may differ from traditional disclosure requirements under U.S. federal securities laws. Such inconsistency could further increase costs and divert management time and attention.

Our industry faces challenges to implement these rapidly developing disclosure requirements, as well as the risk of enforcement actions by governmental and regulatory agencies for noncompliance. Significant expenditures and commitment of time by management, employees and consultants is involved in developing, implementing and overseeing policies, practices, additional disclosures and internal controls related to environmental and sustainability risk and performance. Public statements with respect to sustainability matters are becoming increasingly subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,” i.e., allegations of misleading information or false claims overstating potential sustainability benefits.benefits Wemade areby awaregovernmental thatauthorities, non-governmental organizations and other private actors have filed lawsuits against companies under various securities and consumer protection laws alleging that certain sustainability-related statements, goals or standards were misleading, false or otherwise deceptive.actors. An inability to implement such policies, practices, and internal controls and maintain compliance with laws and regulations, or a perception among stakeholders that our sustainability disclosures and goals are insufficient or our goals are unattainable, could harm our reputation and competitive position and negatively impact our stock price and business performance.

External Economic and Industry Risks

Market disruption, including labor shortages, external strikes, and supply chain constraints,constraints and major external events, and macroeconomic pressures, including inflation, have recently had, and may in the future have, an adverse impact on our business and results of operations.

Market disruption resulting from labor shortages, external labor disputes and strikes (such as the recent port strike) andstrikes, supply chain and transportation constraints, major external events, including pandemic conditions, and macroeconomic pressures, including inflation and rising interest rates,pressures have recently had, and may in the future have, an adverse impact on our results and can create risk and uncertainty in financial outlook. Inflation can and has increased costs for the goods and services we purchase, particularly for labor, repair and maintenance, and subcontractor costs. Supply chain activity has largely normalized, but disruption can reduce availability of certain assets used in our business. Aspects of our business rely on third-party transportation providers, and such services have become more limited and expensive. We may also experience margin pressures from commodity-driven business impacts. The October 2024 port strike negatively impacted recycling commodity prices, and the risk of another port strike, or global economic slowdown, could impact future prices. The constrained labor market has resulted in increased costs for wage adjustments, overtime hours and training new hires. If we are not able to overcome limitations on labor availability, it could materially impact our ability to service our customers and our financial results. Significant new restrictions and tariffs on foreign trade could have a negative impact on our recycling export business and our cross-border commerce, particularly with Canada, decrease paper mills’ demand for recycled corrugated cardboard used in packaging and could increase the cost of certain equipment and other materials used in our operations that we procure from outside the U.S., including our trucks and certain equipment used to implement our sustainability growth strategy. Geopolitical conflicts and the resulting international responses may also exacerbate market disruption, leading to volatility in commodity prices, impacts on the availability and cost of energy, increased cyberattacks, and vendor and supplier disruptions across the global supply chain. Major external events, like pandemics or widespread social restrictions, could also have an adverse impact on our volumes, costs and operations. The extent and duration of the impact of these labor market, supply chain, transportation and commodity-price challenges are subject to numerous external factors beyond our control. If such impacts are prolonged and substantial, they could have a material negative effect on our results of operations.

Accelerated and pronounced economic pressures, such as rising interest rates and inflationary cost pressures, have impactedin the past and continuemay toin the future impact our cost structure and capital expenditures. Significant components of our operating expenses vary directly as we experience changes in revenue due to volume and inflation, and we may not be able to dynamically manage our cost structure in response to such changes. A significant portion of our revenue is tied to a price escalation index with a lookback provision, resulting in a timing lag in our ability to recover increased costs under those contracts during periods of rapid inflation. Separately, for many of our customers we provide services under multi-year contracts that can restrict our ability to increase prices and the timing of such increases. Our overall strategic pricing efforts are focused on recovering as much of the inflationary cost increases we experience in our business as possible by increasing our average unit rate, but such efforts may not be successful for various reasons including the pace of inflation, operating cost inefficiencies, contractual limitations, and market responses. The inability to adequately increase prices to offset increased costs and inflationary pressures, or otherwise mitigate the impact of these conditions on our business, will increase our costs of doing business and reduce our margins.

Prices and demand for recyclables fluctuate and are particularly susceptible to volatility based on macroeconomic conditions and regulations. The fluctuations in the market prices or demand for these commodities can affect our operating income and cash flows negatively, as we experienced in 2025, or positively, as we experienced in 2024,2024. orThe negatively, as we experienceddecline in 2023.market Theprices in 2025 for recyclable commodities resulted in a year-over-year decrease in revenue of $166 million, and the increase in market prices in 2024 for recyclable commodities resulted in a year-over-year increase in revenue of $245 million, and the decline in market prices in 2023 for recyclable commodities resulted in a year-over-year decrease in revenue of $308 million.

Regulations affecting, and in some cases restricting, the international flow of certain recyclables have ledled, and could in the future lead, to a reduction in export activity for such recyclables, as well as higher quality requirements and higher processing costs. Additionally, the new U.S. presidential administration has called for substantial changes to foreign trade policy. Significant new restrictions and tariffs on foreign trade could negatively impact commodity prices and our recycling export business. We arehave makingmade significant planned and ongoing investments in our recycling business to increase automation and reduce labor dependency and address increases in regulatory- and customer-driven quality requirements for commodities. These investments increase our exposure to commodity price fluctuations. Future regulation, tariffs, international trade policies or other initiatives, including regulations addressing climate change or GHG emissions, may impact supply and demand of material,material and availability of counterparties, or increase operating costs, which could impact the profitability of our recycling operations. If we do not effectively manage changes in demand and commodity prices for recyclable materials, or if we do not successfully execute our sustainability growth strategy, our investments in recycling infrastructure and technology may not yield the results anticipated.

Fluctuation in energy-related prices also affects our business, including recycling of plastics manufactured from petroleum products. Our sustainability growth strategy includes increased investment in landfill gas-to-energy facilities and expansion of our WM Renewable Energy segment, whichsegment generates and sells credits referred to as Renewable Identification Numbers (“RINs”).RINs. RINs prices generally respond to regulations enacted by the EPA, as well as fluctuations in supply and demand, and have historically been very volatile. Additionally, significant variations in the price of biogas, electricity and other energy-related products that are marketed and sold by our landfill gas recovery operations can result in a corresponding impact to our revenue from yield from such operations. ExpansionRecent expansion of our WM Renewable Energy segment may introduce additional risks and volatility to our financial performance.

Our customers are increasingly diverting waste to alternatives to landfill disposal, such as recycling and composting, while also working to reduce the amount of waste they generate. In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of materials at landfills, such as recyclables (cardboard, bottles and cans), yard waste, food waste and electronics. Where organic waste is not banned from disposal in landfills, some large customers such as grocery stores and restaurants are choosing to divert their organic waste from landfills. Zero-waste goals (sending no waste to the landfill) have been set by many large North American and global companies and government agencies. This increased focus on minimizing climate impacts may require the Company to invest in higher-cost technologiestechnologies. for more efficient waste collection and processing. Although such mandates and initiatives help to protect our environment, theseThese developments reduce the volume of waste going to our landfills, which may affect the prices that we can charge for landfill disposal. Our landfills currently provide our highest income from operations margins. Reducing landfilled organic waste also reduces the amount of landfill gas produced from our landfills, adversely impacting our landfill gas-to-energy facilities. If we are not successful in expanding our service offerings, growing lines of businesses to service waste streams that do not go to landfills, and providing alternative services for customers that wish to reduce waste entirely, then our revenues and operating results may decline. Additionally, despite the development of new service offerings and lines of business, it is possible that our revenues and our income from operations margins could be negatively affected due to disposal alternatives.

General economic conditions and consumer trends can directly and adversely affect revenues for our services andservices, our income from operations margins.margins and our overall financial results.

Our business is directly affected by changes in nationalconsumer trends and general economic factors that are outside of our control, including consumer preferences and priorities, consumer confidence, inflation, interest rates and access to capital markets. A weak economy generally results in decreased consumer spending and decreases in volumes of waste generated, which negatively impacts the ability to grow through new business or service upgrades, and may result in customer turnover and reduction in customers’ waste service needs. Consumer uncertainty and the loss of consumer confidence may also reduce the number and variety of services requested by customers. Additionally, a weak market for consumer goodsgoods, or reduction in international trade due to tariffs or other factors, can significantly decrease demand by paper mills for recycled corrugated cardboard used in packaging, which couldcan constrict availability of counterparties and negatively impact commodity prices and our operating income and cash flows. While sustainability remains a priority for many customers, we have observed a shift in prioritization by some companies with respect to sustainability objectives, including a decreased willingness to pay premium prices for recycled materials or enhanced sustainability solutions, which impacts demand for, and viability of, some of our offerings.

Reduction in volumes of medical waste, controlled substances wastes, and personal and confidential information, and changing conditions in the healthcare industry,industry could adversely affect our financial results.

FollowingThrough our acquisitionHealthcare ofSolutions Stericycle,segment, we provide compliance-based services that rely on the generation of medical waste, controlled substances waste and personal and confidential information by our customers. The volume of such material may be impacted by macroeconomic trends associated with manufacturing and industrial markets, healthcare market dynamics, and trends associated with an increase in work-from-home arrangements and electronic and digital record keeping. Long-term trends resulting from these factors could reduce the demand for these services.

The price and supply of diesel fuel can fluctuate significantly based on international, political and economic circumstances, as well as other factors outside our control, such as actions by oil and gas producers, regional production patterns, weather conditions and environmental concerns. We need diesel fuel to run a notable portion of our collection and transfer trucks and our equipment used in our landfill operations. We also recently acquired Stericycle’s fleet, including a substantial number of diesel vehicles. Fuel supply shortages and price increases could substantially increase our operating expenses. Regardless of any offsetting surcharge programs, increased operating costs due to higher diesel fuel prices will decrease our income from operations margins.

TechnologyTechnology, Intellectual Property and Information Security Risks

If we are not able to develop new service offerings and protect intellectual propertyproperty, or if a competitor develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer.

Our existing and proposed service offerings to customers require that we invest in, develop, license, and protect new technologies. Our Company is increasinglycontinuing focusingour onmulti-year newcommitment technologiesto strategic investments in technology that automate and innovate our operations, improve the customer experience, provide alternatives to traditional disposal and maximize the resource value of waste. We are continuing our multi-year commitment to strategic investments in technology that prioritize the reduction of labor dependency for certain high-turnover jobs, further digitalize our customer self-service and implement technologies to further enhance the safety, reliability and efficiency of our operations. Research, development and implementation of enhanced technology often requires significant spending that may divert capital investment away from our traditional business operations. We may experience difficulties or delays in the research, development, production and/or marketing of new products and services or implementation of technologies in which we have invested or acquired, which may negatively impact our operating results and prevent us from recouping or realizing a return on these investments and acquisitions. Further, protecting our intellectual property rights and combating unlicensed copying and use of intellectual property is difficult,difficult and expensive, and an inability to obtain or protect new technologies could impact our services to customers and the development of new revenue sources. We rely on a combination of patents and trade secrets to protect our intellectual property, as well as confidentiality and non-disclosure agreements with employees, contractors, and other third parties. We cannot guarantee that these measures will fully prevent unauthorized access or use. Furthermore, there is no assurance that current or future applications will result in issued patents or, if issued, will provide adequate protection against competitors.competitors or other third parties. If a competitor or other third party develops or obtains exclusive rights to a “breakthrough technology” that provides a revolutionary change in our industry, or if we have inferior intellectual property to our competitors, our financial results may suffer.

We are increasingly dependent on technology, and if our technology fails, our business would be adversely affected.

Our Company, our customers, and the economy in general are increasingly dependent on continuous information technology systems and digital tools to conduct operations. This dependence spans nearly all areas of our business, from overseeing and controlling critical infrastructure to processing and securing proprietary and sensitive information. The information technology systems and networks that we, our customers, suppliers, and other third parties rely on can be vulnerable to disruptions from cyberattacks, power failures, telecommunications outages, major events like natural disasters, acts of war or terrorism, employee errors, and other unexpected or uncontrollable occurrences. Systems that increase our utilization of, and dependency on, third-party cloud computing services and digital platforms also increase various technology risks, including potential exposure to cyber incidents, loss of data, fraud, internal control challenges and other disruptions. Challenges in implementing new systems can affect our ability to comply with laws and regulations and realize projected cost savings or other benefits. Should theseour systems be compromised or cease to function effectively, we may face substantial costs to repair or replace them, as well as potential liability, loss of crucial data, reputational harm,harm and interruptions to our services or operations.

This section includes a discussion of our results of operations for the three yearsyear ended December 31, 2024.2025. This discussion may contain forward-looking statements. See “Cautionary Statement about Forward-Looking Statements” in Part I of this Annual Report on Form 10-K for more information. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to, those described in Part I, “Item 1A. Risk Factors” and elsewhere in this report and may also be described from time to time in our future reports filed with the U.S. Securities and Exchange Commission (“SEC”). The following discussion should be read considering those disclosures and together with the Consolidated Financial Statements and the notes thereto.

We are North America’s leading provider of comprehensive environmental solutions, primarily providing services throughout the United States (“U.S.”) and Canada. We partner with our customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. We own or operate the largest network of landfills throughout the U.S. and Canada. In order to make disposal more practical for larger urban markets, where the distance to landfills is typically farther, we manage transfer stations that consolidate, compact and transport waste efficiently and economically. Our solid waste business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provide collection, transfer, disposal, recycling and resource recovery services. Through our subsidiaries, including our Waste Management Renewable Energy (“WM Renewable Energy”) segment, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the U.S. and Canada that produce renewable electricity and renewable natural gas,gas (“RNG”), which is a significant source of fuel that we allocate to our natural gas fleet. Following our 2024 acquisition of Stericycle, Inc. (“Stericycle”), our Healthcare Solutions segment provides regulated waste and compliance services (“RWCS”) and secure information destruction (“SID”) services in the U.S., Canada and Western Europe that protect people and brands, promote health and well-being and safeguard the environment. Additionally, through our Recycling Processing and Sales segment, we are a leading recycler in the U.S. and Canada, handling materials that include paper, cardboard, glass, plastic and metal.

On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle for $62.00 per share in cash, pursuant to an Agreement and Plan of Merger dated June 3, 2024. Total enterprise value of the acquisition was $7.2 billion (net of cash acquired) when including the assumption of $0.5 billion of debt and the repayment of approximately $0.8 billion of net debt. The acquisition expandsexpanded our offerings in the U.S., Canada and parts of Western Europe. The post-closing operating results of Stericycle have been included in our Consolidated Financial Statements,Statements aswithin a new reportable segment referred to as WMour Healthcare Solutions.Solutions segment.

For the year ended December 31, 2025, we incurred acquisition and integration related costs of $120 million, comprised of $89 million of selling, general and administrative costs and $31 million of restructuring costs. For the year ended December 31, 2024, we incurred approximately $160 million of acquisition and integration related costs,costs of $160 million, which arewere primarily classified as “Selling,selling, general and administrative expenses.” Referexpenses.Refer to Note 19 for more information on the performance of our WM Healthcare Solutions segment.

Our Collection and Disposal businesses provide integrated environmental services, including collection, transfer, disposaltransfer and resource recovery services.disposal. We evaluate our Collection and Disposal businesses primarily through two geographic segments, East Tier and West Tier. Our East Tier primarily consists of geographic areas located in the Eastern U.S., the Great Lakes region and substantially all of Canada. Our West Tier primarily includes geographic areas located in the WesternWestern, Southern and Central U.S., including the upper Midwest region, and British Columbia, Canada. Additionally, we provide Other Ancillary services that are not managed through the Tier segments but that support our collection and disposal operations. Other Ancillary includes specialized services performed for customers that have differentiated needs. These specialized services are targeted at large industrial customers managed through our Sustainability and Environmental Solutions (“SES”) business or geographically dispersed customers managed through our Strategic Business Solutions (“WMSBS”) business. Also included within Other Ancillary are the results of non-operating entities that provide financial assurance and self-insurance support for our business, net of intercompany activity.

Our Collection and Disposal businesses’ operating revenues are primarily generated from fees charged for our collection, transfer, disposaltransfer and resource recovery services.disposal. Revenues from our collection operations are influenced by factors such as collection frequency, type of collection equipment furnished, type and volume or weight of the waste collected, distance to the disposal facility or recycling facility and our disposal costs. Revenues from our landfill operations consist of tipping fees, which are generally based on the type and weight or volume of waste beingdeposited, disposedconsidering our cost of loading, transporting and disposing of the solid waste at oura disposal facilities.site. Fees charged at transfer stations are generally based on the weight or volume of waste deposited, considering our cost of loading, transporting and disposing of the solid waste at a disposal site. The fees we charge for our services generally include applicable fees, such as our energy surcharge, which are intended to pass through to customers for direct and indirect costs incurred.

Included within our Collection and Disposal businesses are landfills having (i) 2019 third-party power generating facilities converting our landfill gas to fuel electricity generators; (ii) 1617 third-party renewable natural gas (“RNG”) facilities processing landfill gas to be sold to natural gas suppliers and (iii) sixnine third-party projects delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes. In return for providing our landfill gas, we receive royalties from each facility, including the benefit of a 15% royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale of RNG, renewable identification numbers (“RINs”), electricity and capacity, Renewable Energy Credits (“RECs”) and related environmental attributes from the 8486 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active landfills, which is eliminated in consolidation.

Our WM Renewable Energy segment develops, operates and promotes projects for the beneficial use of landfill gas. Landfill gas is produced naturally as waste decomposes in a landfill. The methane component of the landfill gas is a readily available, renewable energy source that can be gathered and used beneficially as an alternative to fossil fuel. WM Renewable Energy converts landfill gas into several sources of renewable energy to be sold which include RNG, electricity and capacity, heat and/or steam. WM Renewable Energy also generates and sells (i) RINs under the Renewable Fuel Standard (“RFS”) program; (ii) other credits under a variety of state programs associated with the use of RNG in our compressed natural gas fleet and (iii) RECs associated with the production of electricity. The RINs, RECs, and other credits are sold to counterparties who are obligated under the regulatory programs and have a responsibility to procure RINs, RECs, and other credits proportionate to their fossil fuel production and imports. RINs and RECs prices generally fluctuate in response to regulations enacted by the Environmental Protection Agency (“EPA”) or other regulatory bodies, as well as changes in supply and demand.

As of December 31, 2024,2025, we had 102103 landfill gas beneficial use projects producing commercial quantities of methane gas at owned or operated landfills. For 6562 of these projects, the processed gas is used to fuel electricity generators. The electricity is then sold to public utilities, municipal utilities or power cooperatives. For 2324 of these projects, the gas is used at the landfill or delivered by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes. For 1117 of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas suppliers. Additionally, three of these projects are on third-party landfills. The revenues from these facilities are primarily generated through (i) the sale of RNG,captured RINs,and converted landfill methane gas; (ii) the sale of RINs under the RFS program implemented by the EPA; (iii) sale of Low Carbon Fuel credits designed to stimulate the use of low-carbon fuels and (iv) the sale of energy (electricity and capacity, heat and/or steam, RECscapacity) and relatedassociated environmental attributes. WMRECs. Renewable Energy is charged a 15% royalty on net operating revenue from these facilities residing on our active and closed landfills from our Collection and Disposal and Corporate and Other businesses, which is eliminated in consolidation. Additionally, WM Renewable Energy operates and maintains sevensix third-party landfill beneficial gas use projects in return for service revenue. Our Collection and Disposal and Corporate and Other businesses benefit from these projects as well as 5254 additional third-party landfill beneficial gas use projects in the form of royalties.

Our WM Healthcare Solutions segment includes (i) Regulated Waste and Compliance Services (“RWCS”) which provide compliance programs and collection, processing, and disposal of regulated and specialized waste, including medical, pharmaceutical and hazardous waste and (ii) Secure Information Destruction (“SID”) services, which provide for the collection of personal and confidential information for secure destruction and recycling of sorted office paper. RWCS are provided to customers inWhile the U.S.,Healthcare Canada,Solutions Irelandbusinesses manage large volumes of waste and theother United Kingdom (“U.K.”). SID services are provided to customers inmaterials, the U.S.,average Belgium,volume Canada,per France,customer Germany,site Ireland,is Luxembourg,relatively the Netherlands and the U.K.small.

Our customers typically enter into a contract for the provision of services on a scheduled basis, including weekly, monthly or on an as-needed basis over the contract term. Under the contract terms, the WM Healthcare Solutions businesses receive fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending upon measures including the volume, weight,type and typevolume or weight of waste. Operating revenues are invoiced based on the terms of the underlying contract either on a regular basis, or as services are performed and are generally due within a short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed.

As of December 31, 2024,2025, our WM Healthcare Solutions businesses include a global fleet of approximately 6,100 routed trucks, tractors, collection vans and small duty vehicles. Our WM Healthcare Solutions segment operates out of approximately 361307 leased and owned facilities worldwide with 6951 autoclaves or other alternative medical waste treatment facilities, 1817 medical waste incinerator facilities, 10799 SID processing facilities and 167140 transfer stations. Included within our WM Healthcare Solutions segment are 35 locations that are classified as held for sale as of December 31, 2024.

We also provide additional services that are not managed through our operating segments, which are presented in this report as Corporate and Other. This includes the activities of our corporate office, including costs associated with our long-term incentive program, expanded service offerings and solutions (such as our investments in businesses and technologies that are designed to offer services and solutions ancillary or supplementary to our current operations) as well as our closed sites. Also included within our Corporate and Other businesses closed sites are (i) sixfive third-party power generating facilities converting our landfill gas to fuel electricity generators; (ii) two third-party projects delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes and (iii) two third-party RNG facilities processing landfill gas to be sold to natural gas suppliers in return for a royalty. Additionally, Corporate and Other benefits from a 15% royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the 1517 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in consolidation.

The waste industry is a comparatively mature and stable industry. However, customers increasingly expect more of their waste materials to be recovered and those waste streams are becoming more complex. In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of waste at landfills. We monitor these developments to adapt our service offerings. As companies, individuals and communities look for ways to be more sustainable, we promote our comprehensive services that go beyond our core business of collecting and disposing of waste in order to meet their needs. This includes expanding traditional recycling services, increasing organics collection and processing, providing medical waste services and expanding our renewable energy projects to meet the evolving needs of our diverse customer base. As North America’s leading provider of comprehensive environmental solutions, we are taking big, bold steps to catalyze positive change – change that will impact our Company as well as the communities we serve. Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 20242025 Sustainability Report, providing details on our sustainability-related performance and outlining progress towards our 2030 sustainability goals. The Sustainability Report conveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company’s Recycling Processing and Sales and WM Renewable Energy segments. The information in this report can be found at sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Annual Report on Form 10-K. For further discussion see Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation.

We believe the Company’s industry-leading asset network and strategic focus on investing in our people and our digital platform will give the Company the necessary tools to address the evolving challenges impacting the Company and our industry. In line with our commitment to continuous improvement and a differentiated customer experience, we remain focused on our automation and optimization investments to enhance our operational efficiency and change the way we interact with our customers. Advancements made through these initiatives are intended to seamlessly and digitally connect all enterprise functions required to service customers and provide the best experience. We have made significant progress in executing this technology enablement strategy to automate and optimize certain elements of our service delivery model. The key benefits are reduced labor dependency on certain high-turnover jobs, particularly in customer experience, recycling and residential collection, while further elevating our customer self-service through digitalization and implementation of technologies to enhance the safety, reliability and efficiency within our collection operations. Additionally, in 2022, we implemented a new general ledger accounting system, complementary finance enterprise resource planning system and a human capital management system, which will continue to drive operational and service excellence by empowering our people through a modern, simplified and connected employee experience.

We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments. WhileDuring recycling2025, commoditywe experienced decreases in market prices havefor recoveredrecycled commodities when compared to prior year caused by a number of factors, including the closure of domestic paper mills, a decrease in 2024demand fromfor recycled content by certain consumer goods producers, focused reduction in cardboard packaging and overall market conditions. While the low levels experienced in 2023, commodity prices are still below levels seen at the beginning of 2022. Thecombined impacts of commodity price fluctuations arefrom notthe currentlyprior materialyear tohad oura WMmodestly favorable impact on the Renewable Energy segment; however, as we continue to make investments to grow that segment, we may experience more significant impacts from fluctuations in the prices of electricity, natural gas, RINs and RECs.natural gas in the future. We continue to take proactive steps to adjust our business models to protect against the down-side risk of changes in commodity prices.

Variability in economic conditions, including inflation, interest rates, employment trends and supply chain reliability, can create risk and uncertainty in financial outlook. We take proactive steps to recover and mitigate inflationary cost pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity,productivity and investments in technology to automate certain aspects of our business. We remain committed to putting our people first to ensure that they are well positioned to execute our daily operations diligently and safely. We remain focused on delivering outstanding customer service, managing our variable costs with changing volumes and investing in technology that will enhance our customers’ experience and provide operating efficiencies intended to reduce our cost to serve.

Current Year Financial Results

Collection and Disposal Average Yield — This measure reflects the effect on our revenuerevenues from the pricing activities of our collection, transfer and landfill operations, exclusive of volume changes. Revenue growth from Collection and Disposal average yield includes not only base rate changes and environmental and service fee fluctuations, but also (i) certain average price changes related to the overall mix of services, which are due to the types of services provided; (ii) changes in average price from new and lost business and (iii) price decreases to retain customers.

Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business. We are continuingcontinue to seefocus on yield growth in our landfill businessbusiness. withThis ourgrowth was primarily driven by municipal solid wastewaste, experiencingwhich averageachieved yield of 3.1%6.5% in 2024.2025.

Recycling Processing and Sales and WM Renewable Energy — Recycling Processing and Sales revenues attributable to yield increaseddecreased $245$166 million in 2024 and decreased $308 million in 2023, respectively,2025 as compared with theto prior year periods.year. Average market prices for single-stream recycled commodities increaseddeclined approximately 50%20% in 2024 and decreased 40% in 20232025 as compared withto the prior yearyear. period.Revenues Duringattributable 2023,to the revenue decline from lower commodity pricing that started in 2022 was partially offset by higher pricingyield in our recycling brokerage business as well as our continued focus on a fee-based pricing model. Additionally, revenue in our WM Renewable Energy segment increased $26$11 million in 2024 and decreased $73 million in 20232025 as compared with theto prior year periods, primarily driven by fluctuationsincreases in energynatural pricesgas and theelectricity valuepricing andpartially quantityoffset ofby RINs.declines in RINs pricing. While there may be short-term fluctuations in our commodity-driven businesses as prices change, we believe that our business models and processes appropriately mitigate the downside risk of changes in commodity prices.

Energy Surcharge and Mandated Fees — These fees decreasedincreased $97$44 million and $104 million in 2024 and 2023, respectively, as compared to the prior yearyear. periods.Mandated Beginningfees inincreased the$33 secondmillion quarterwhile of 2023, our energy surcharge was revised to incorporate market prices for both diesel and CNG. The decreasefluctuations in energy surchargesurcharges revenuesdrove isan primarily due to a decline in market prices for diesel fuelincrease of approximately$11 10% in 2024 and 15% in 2023million as compared to the prior year periods.year. The mandated fees are primarily related to fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations.stations, These amounts have not significantly impacted the changeparticularly in revenueour forWest theTier periodsas presented.a result of wildfire activity.

Acquisitions and divestitures resulted in a net increase in revenues of $576$2,334 million, or 2.9%, and $181 million, or 0.9%,10.6%, in 2024 and 2023, respectively,2025 as compared to the prior year periods.year. The 2024 increase was primarily due to our acquisition of Stericycle in November 2024. The remaining increasesincrease werewas primarily related to our ongoing investment in tuck-in acquisitions of solidcollection wasteand disposal businesses.

Our operating expenses are comprised of (i) labor and related benefits costs (excluding labor costs associated with maintenance and repairs discussed below), which include salaries and wages, bonuses, related payroll taxes, insurance and benefits costs and the costs associated with contract labor; (ii) transfer and disposal costs, which include tipping fees paid to third-party disposal facilities and transfer stations; (iii) maintenance and repairs costs relating to equipment, vehicles and facilities and related labor costs; (iv) subcontractor costs, which include the costs of independent haulers who transport waste collected by us to disposal facilities and are affected by variables such as volumes, distance and fuel prices; (v) costscost of goods sold, which includes the cost to purchase recycling materials for our Recycling Processing and Sales segment, including certain rebates paid to suppliers; (vi) fuel costs, net of tax credits for alternative fuel, which represent the costs of fuel to operate our truck fleet and landfill operating equipment; (vii) disposal and franchise fees and taxes, which include landfill taxes, municipal franchise fees, host community fees, contingent landfill lease payments and royalties; (viii) landfill operating costs, which include interest accretion on landfill liabilities, interest accretion on and discount rate adjustments to environmental remediation liabilities, leachate and methane collection and treatment, landfill remediation costs and other landfill site costs; (ix) risk management costs, which include general liability, automobile liability and workers’ compensation claims programs costs and (x) other operating costs, which include gains and losses on sale of assets, telecommunications, equipment and facility lease expenses, property taxes, utilities and supplies. Variations in volumes year-over-year, as discussed above in Operating Revenues, in addition to cost inflation, affect the comparability of the components of our operating expenses.

Transfer and Disposal Costs — The increase in transfer and disposal costs in 2024, as compared with 2023, was primarily due to (i)our recent acquisitions and inflationary cost increases,pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers and (ii) incremental third-party transfer and disposal costs as a result of our recent acquisitions.haulers. These cost increases were offset, in part, by decreases in industrial andlower residential collectionvolumes volumes. The increase in transfer and disposal costs in 2023, as compared with 2022, was primarily dueattributable to inflationaryintentional costshedding increases,of whichlower includesmargin increased disposal fees at third-party sites and higher rates from our third-party haulers, offset, in part, by a decrease in collection volumes.contracts.

Fuel — The decreaseincrease in fuel costs was primarily due to our recent acquisitions and the expiration of the federal alternative fuel tax credit on December 31, 2024. This increase was partially offset by a decrease of approximately 10%3% in average market prices for diesel fuel in 2024 and 15%reduced diesel consumption due to declines in 2023.residential collection volumes.

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes in 2024, as compared with 2023, was primarily drivendue byto an increase in landfill volumes and an overall rate increase in fees and taxes paid to municipalities on our disposal volumes. The increase in disposal and franchise fees and taxes in 2023, as compared with 2022, was primarily driven by an overall rate increase in fees and taxes paid to municipalities on our disposal volumes.

Labor and Related Benefits — The increase in labor and related benefits costs in 2024, as compared with 2023, was primarily relateddue to (i) costs incurred in connection with our acquisitionrecent of Stericycle, including severance costs and additional headcountacquisitions; (ii) higher annual and long-term incentive compensation costs and (iii) annual employee wage increases. The increase in labor and related benefits costs in 2023, as compared with 2022, was primarily related to (i) annual wageThese increases for our employees; (ii) market adjustments for deferred compensation plans related to investment performance and (iii) higher long-term incentive compensation costs,were partially offset by lower annual incentive compensation costs and loweremployee contractbenefit labor expenses.expense.

Our fundamental strategy has not changed; we remain dedicated to providing long-term value to our stockholders by successfully executing our core strategy of focused differentiation and continuous improvement. We have enabled a people-first, technology-led focus to drive our mission to maximize resource value, while minimizing environmental impact, and sustainability and environmental stewardship are embedded in all that we do. Our strategy leverages and sustains the strongest asset network in the industry to drive best-in-class customer experience and growth. Our strategic planning processes appropriately consider that the future of our business and the industry can be influenced by changes in economic conditions, the competitive landscape, the regulatory environment, asset and resource availability and technology. We believe that focused differentiation, which is driven by capitalizing on our unique and extensive network of assets, will deliver profitable growth and position us to leverage competitive advantages. Simultaneously, we believe that investing in automation to improve processes and drive operational efficiency combined with a focus on the cost to serve our customers will yield an attractive profit margin and enhanced service quality. We have furthered our strategy of focused differentiation and continuous improvement beyond our traditional waste operations through our sustainability growth strategy, which has positioned us to capitalize on the significant investments made in our Renewable Energy and Recycling Processing and Sales segments, while increasing automation and reducing labor dependency. In addition, our Healthcare Solutions segment provides a complementary business platform in medical waste, a sector with attractive near- and long-term growth dynamicsdynamics, and in secure information destruction services to further our leading suite of comprehensive waste and environmental solutions. Furthermore, we continue to evaluate and plan to pursue emerging diversion technologies that may generate additional value.

We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and Renewable Energy segments. During the quarterfirst endedhalf March 31,of 2026, we continued to experience decreases in market prices for recycled commodities when compared to the prior year quarter.period. Additionally, we experienced declines in commodity price fluctuationsprices from the prior year quarterperiod that had an unfavorable impact on the Renewable Energy segment. We continue to take proactive steps to adjust our business models to protect against the down side risk of changes in commodity prices.

During the firstsecond quarter of 2026, we continued to focus on our priorities to advance our strategy – growing the core business by focusing on customer lifetime value; delivering operational excellence and capitalizing on network advantages; capturing and enhancing returns from our investments in our Recycling Processing and Sales and Renewable Energy segments and driving accretive growth as we take our Healthcare Solutions segment from integration to scalable growth. We continue to invest in our people through paying a competitive market wage, investing in our digital platform and providing training for our team members. During the period,second quarter of 2026, we also allocated $729$1,038 million of available cash to our shareholders through dividends and common stock repurchases.

Key elements of our financial results for the firstsecond quarter of 2026 include:

The mix of operating revenues for the three and six months ended MarchJune 3130 are as follows (in millions):

The significant items affecting revenues during the firstthree quarterand ofsix months ended June 30, 2026, as compared to the prior year period,periods, are summarized below:

Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business. We continue to see yield growth in our landfill business primarily driven by municipal solid waste, which achieved average yield of 6.9%5.2% and 5.9% for the firstthree quarterand ofsix 2026.months ended June 30, 2026, respectively.

Recycling Processing and Sales and Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $28$2 million and $30 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year period.periods. Average market prices for single-stream recycled commodities declined approximatelyby 27%about in10% and 20% for the firstthree quarterand ofsix 2026months ended June 30, 2026, respectively, as compared to the prior year period.periods. Revenues attributable to yield in our Renewable Energy segment decreased $7$4 million and $13 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year periodperiods primarily due to lower RNG pricing, partially offset by higher electricity and natural gas prices. While there may be short-term fluctuations in our commodity-driven businesses as prices change, we believe that our business models and processes appropriately mitigate the downside risk of changes in commodity prices.

Energy Surcharge and Mandated Fees — These fees increased $20$102 million and $122 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year period.periods. The increase in energy surcharge revenues iswas primarily due to an increase of approximately 12%50% and 30% in market prices for diesel fuel for three and six months ended June 30, 2026, respectively, as compared to the prior year period.periods.

Our revenues from volume (excluding volumes from acquisitions and divestitures, as well as Healthcare Solutions) increaseddecreased $22 million, or 0.3%, and $10 million, or 0.2%0.1%, for the three and six months ended June 30, 2026, respectively, as compared to the prior year period.periods. Volume increased in both our Recycling Processing Sales and our Renewable Energy segments primarily due to contributions from recycling automation and growth projects.projects and new renewable natural gas plants. These volume increases were largely offset by special waste volume declines compared to the prior year periods, which benefited from wildfire cleanup activities in the West Tier, and volume declines in our collection business primarily due to harsh winter weather in the current period as well as our intentional shedding of lower-margin residential business. Additionally, special waste landfill volumes were down compared to the priorsix yearmonths period,ended whichJune benefited30, from2026 wildfirewas cleanupnegatively activitiesimpacted by harsh winter weather conditions in the Westfirst Tier.quarter of 2026.

Revenues from our Healthcare Solutions businesssegment for three and six months ended June 30, 2026, decreased $13$30 million, or 0.2%0.5%, and $42 million, or 0.3%, respectively, as compared to the prior year periodperiods as contributions from pricing activities were more than offset by declines in volumes.

Acquisitions and divestitures resulted in a net increase in revenues of $31$28 million, or 0.6%,0.5%, and $59 million, or 0.5%, for the three and six months ended June 30, 2026, respectively, as compared to the prior year periodperiods primarily due to 2025our investments in tuck-in collection and disposal businesses.

The following table summarizes the major components of our operating expenses for the three and six months ended MarchJune 3130 (in millions of dollars and as a percentage of revenues):

Our operating expenses for the three and six months ended June 30, 2026 increased as compared to the prior year period,periods, primarily due to (i) higher fuel prices; (ii) annual employee wage increases and higher employee medical costs; (ii) higher fuel prices and (iii) growth in our Renewable Energy business.segment. These increases were partially offset by (i) lowerthe costsCompany’s drivenability byto flex spending with lower collection volumes,and asspecial discussedwaste abovevolumes and (ii) continued operating efficiency and cost control initiatives in our Collection and Disposal business. Although total operating expenses increased, costs as a percent of revenue improved due to continued cost discipline.initiatives.

The significant items affecting operating expenses during the firstthree quarterand ofsix months ended June 30, 2026, as compared to the prior year period,periods, are summarized below:

Labor and Related Benefits — The increase in labor and related benefits costs iswas primarily due to annual employee wage increases and an increase in employee medical costs as compared with the prior year period.periods. These increases were partially offset by (i) lowerthe costsCompany’s drivenability byto flex spending with lower collection and special waste volumes as discussed above; (ii) collection efficiency improvements and (iii) improved driver retention.

Maintenance and Repairs — The slight decreaseincrease in maintenance and repairs costs iswas primarily due to annual wage increases and increased maintenance technician headcount. The increase was partially offset by reduced demand for third-party services driven by fleet and operational optimization. The decrease was partially offset by annual wage increases and increased headcount of our maintenance technicians.

Subcontractor Costs — The increase in subcontractor costs iswas primarily due to an increase of approximately 12%increases in market prices for diesel fuel as comparedpreviously to the prior year period.mentioned.

Cost of Goods Sold — The decrease in cost of goods sold iswas primarily due to 27% decreasefluctuations in average market prices for single-stream recycling commodities.commodities discussed above. This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought on lineonline during 2025.2025 and 2026.

Fuel — The increase in fuel costs iswas primarily due to anthe increase of approximately 12% and 6%increases in average market prices for diesel andfuel CNGpreviously fuel, respectively.mentioned. This increase was partially offset by reduced fuel consumption due to declines in collection volumes.

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes iswas primarily due to an increase in landfill host fees and other fees and taxes paid to municipalities on our disposal volumes.

Landfill Operating Costs — The increase in landfill operating costs iswas primarily due to higher leachate treatment costs in our West Tier.

Risk Management — The slight decreaseincrease in risk management costs iswas primarily due toincreased lower auto and property premiumclaims costs as compared to the prior year period.periods.

Other — The increase in other operating costs iswas primarily due to (i) increased utility costs largely attributable to higher electricity prices and new RNG plants brought on lineonline during 2025 and (ii) gains on the sale of real estate in the prior year period that did not recur in the current year.2026.

The following table summarizes the major components of our selling, general and administrative expenses for the three and six months ended MarchJune 3130 (in millions of dollars and as a percentage of revenues):

The significant items affecting selling, general and administrative expenses during the firstthree quarterand ofsix months ended June 30, 2026, as compared to the prior year period,periods, are summarized below:

Labor and Related Benefits — The decrease in labor and related benefits costs for the three months ended June 30, 2026, as compared to the prior year period, was primarily due to a reduction in workforce as we achieved synergies from our acquisitions, particularly Stericycle, and lower annual incentive compensation costs. These decreases were partially offset by annual employee wage increases. The increase in labor and related benefits costs isfor the six months ended June 30, 2026, as compared to the prior year period, was primarily due to annual employee wage increases and higher annuallong-term incentive compensation costs. These increases were partially offset by a reduction in workforce as we achieved synergies from our acquisitions, particularly Stericycle.

Professional Fees — The decrease in professional fees iswas primarily due to non-recurringhigher consulting costs incurred in the prior year periodperiods to support Stericycle’sthe integration.integration of Stericycle.

The following table summarizes the components of our depreciation, depletion, amortization and accretion expenses for the three and six months ended MarchJune 3130 (in millions of dollars and as a percentage of revenues):

The increase in depreciation of tangible property and equipment isfor the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to investments in capital assets placed in service during 2025,2025 and 2026, particularly within our sustainability businesses. The increase in depletion of landfill airspace isfor the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to changes in rates from revisions in landfill estimates within our East Tier. The decrease in amortization of intangible assets isfor the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to the conclusion of amortization related to customer relationships and other intangibles acquired as a result of acquisitions during prior years within our East Tier. The increase in interest accretion on landfill and environmental remediation liabilities isfor the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to revisions in landfill estimates.

The following table summarizes income from operations for our reportable segments for the three and six months ended MarchJune 3130 (dollars in millions):

* Percentage change does not provide a meaningful comparison.

The significant items affecting income from operations for our segments during the firstthree quarterand ofsix months ended June 30, 2026, as compared to the prior year period,periods, are summarized below:

Collection and Disposal — Income from operations in our Collection and Disposal business increased primarily due to (i) revenue growth from price increases, which translates into increased yield or average unit price; (ii) actions to improve efficiency and the operating costs incurred to serve our customers and (iii) a gain from a business divestiture in our West Tier.Tier recognized in the first quarter of 2026. These increases were partially offset by declines in special waste volume in our West Tier, which was favorably impacted by wildfire clean-up activities in the prior year periods, and lower volumes primarilycaused due toby harsh winter weather.weather in early 2026.

Recycling Processing and Sales — IncomeThe increase in income from operations in our Recycling Processing and Sales segment remainedwas steadyprimarily due to lower expenses from the suspension of a business engaged in accelerating plastic film and wrap recycling capabilities during 2025, and increased volumes and reduced costs from the automation of our recycling facilities as well as investments in new facilities,facilities. mostlyThese increases were partially offset by declines in commodity prices.prices compared to the prior year periods.

Renewable Energy — IncomeThe increase in income from operations in our Renewable Energy segment increasedwas primarily due to higher volumes driven by the completion of projects that increase the beneficial use of landfill gas sold to third parties. This increase was partially offset by a decline in RINs pricing.

Healthcare Solutions — TheOur Healthcare Solutions segment generated income from operations in the three months ended June 30, 2026 and a loss from operations in ourthe Healthcaresix Solutionsmonths segmentended improvedJune 30, 2026. The improvement across both time periods is primarily due to non-recurring integration costs incurred during the prior year periodperiods along with lower costs in the current year from the realization of synergies.synergies, offset by lower volumes.

Our income tax expense and effective income tax ratesrate werewas $168$238 million, or 18.9%,23.2%, and $151$406 million, or 19.2%,21.2%, for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to $201 million, or 21.7%, and $352 million, or 20.5%, for the three and six months ended June 30, 2025, respectively. See Note 4 to the Condensed Consolidated Financial Statements for more information related to income taxes.

Tax Legislation — The Inflation Reduction Act of 2022 (“IRA”) contains several tax-related provisions, including with respect to (i) alternative fuel tax credits; (ii) tax incentives for investments in renewable energy production, carbon capture and other climate actions and (iii) the overall measurement of corporate income taxes. Given the complexity and uncertainty around the applicability of the legislation to our specific facts and circumstances, we continue to analyze the IRA provisions to identify and quantify potential opportunities and applicable benefits included in the legislation. We secured approximately $60 million of annual pre-tax benefit through the provisions of the IRA related to alternative fuel tax credits (recorded as a reduction in our operating expense) from tax credits in 2024. The alternative fuel credit expired at the end of 2024 and will not provide any future benefit to the Company without further legislative action. With respect to the Section 48 investment tax credit, we expect our cumulative benefit to be between $400 million and $425 million, $309 million of which was recognized between 2023 and 2025 with the remainder anticipated to be realized in 2026 and 2027. Finally, in February 2026 the Internal Revenue Service issued proposed regulatory guidance clarifying qualification for the Section 45Z clean fuel production tax credit. We expect our cumulative benefit from this clean fuel production tax credit to be as much as $150 million through 2029. This expected benefit is dependent on a number of estimates and assumptions, which we continue to monitor and factor into our credit realization expectations.

Debt — As of MarchJune 31,30, 2026, we had approximately $3.7$3.8 billion of debt maturing within the next 12 months, including (i) $1.8$2.0 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) $1.1 billion of short-term borrowings under our commercial paper program (net of related discount on issuance); (iii) $223 million of 7.1%7.10% senior notes that mature in August 2026; (iv) $359$352 million of 2.6%2.60% Canadian senior notes that maturethe Company elected to redeem in SeptemberJuly 2026 and (v) $201$206 million of other debt with scheduled maturities within the next 12 months. As of MarchJune 31,30, 2026, we have classified $3.1$2.7 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. The remaining $641$1.1 millionbillion of debt maturing in the next 12 months is classified as current obligations.

The following is a summary of our cash flows for the threesix months ended MarchJune 3130 (in millions):

Net Cash Provided by Operating Activities — Our operating cash flows increased by $293$474 million for the threesix months ended MarchJune 31,30, 2026, as compared to the prior year period, primarily due to (i) higher earnings, particularly driven by our Collection and Disposal business; (ii) favorable changes in working capital, net of effects from acquisitions and divestitures and; (iii) lower annual incentive compensation payments.payments and (iv) lower cash taxes.

Net Cash Used in Investing Activities — The most significant items included in our investing cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025 are summarized below: