What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-29 · 176 added, 143 removed, 304 unchanged (51% of the section changed)

11 unchanged sentences

failure to identify acquisition targets, consummate and integrate acquisitions, including our ability to integrate the acquisition of Stericycle and achieve the anticipated benefits therefrom, including synergies;

legal, regulatory and other matters that may affect the costs and timing of our ability to integrate and deliver all of the expected benefits of the Stericycle acquisition;

legal, regulatory, operational, technological and other matters that may affect the costs and timing of our ability to integrate and deliver all of the expected benefits of the Stericycle acquisition;

failure to maintain an effective system of internal control over financial reporting;

existing or new environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, extended producer responsibility and our natural gas fleet;

existing or new environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, recyclables, extended producer responsibility and our natural gas fleet;

significant environmental, safety or other incidents resulting in liabilities or brand damage;

13 unchanged sentences

changing conditions in the healthcare industry;

changing conditions in the recycling industry, including impacts on demand, pricing and availability of counterparties;

weakness in general economic conditions and capital markets;

10 unchanged sentences

We are North America’s leading provider of comprehensive environmental solutions, 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

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.

14 unchanged sentences

The post-closing operating results of Stericycle have been included in our Condensed Consolidated Financial Statements as a new reportable segment referred to as WM Healthcare Solutions.

During the first half of 2025, we continued to prioritize service delivery for our customers and the integration of operations into WM’s organizational structure, ensuring business alignment with WM’s core values and capturing synergies through reduction of duplicative processes and costs.

Additional efforts focused on business integration and process optimization through technological enhancements, establishing a performance management approach aimed at accountability and improving utilization of the asset portfolio.

Since closing the acquisition we have prioritized service delivery for our customers and the integration of operations into WM’s organizational structure, ensuring business alignment with WM’s core values and capturing synergies through reduction of duplicative processes and costs.

We have also focused on business integration and process optimization through technological enhancements, establishing a performance management approach aimed at accountability, improving customer engagement, billing and collection processes to deliver cash flow, enhancing customer lifetime value and optimizing disposal costs by internalizing waste within our integrated asset portfolio.

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 is 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.

4 unchanged sentences

In addition, with our acquisition of Stericycle, we have advanced our growth strategy and built upon our sustainability initiatives.

The acquisition provides a complementary business platform in regulated waste and compliance services involving medical waste, a sector with attractive near- and long-term growth dynamics and in secure information destruction services to further our leading suite of comprehensive waste and environmental solutions.

waste and environmental solutions.

Furthermore, we are also evaluating and pursuing emerging diversion technologies that may generate additional value.

26 unchanged sentences

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.

During the first half of 2025, we experienced decreases in market prices for recycled commodities when compared to the prior year period, particularly in our recycling brokerage business.

While the combined impacts of commodity price fluctuations from the prior year had a modestly favorable impact on the WM Renewable Energy segment in the first half of 2025, we may experience more significant impacts from fluctuations in the prices of renewable identification numbers (“RINs”) and natural gas as we continue to make investments to grow that segment in the future.

During the nine months ended September 30, 2025, we experienced decreases in market prices for recycled commodities when compared to the prior year period caused by a number of factors, including the closure of domestic paper mills, a decrease in demand for recycled content by certain consumer goods producers, focused reduction in cardboard packaging and overall market conditions.

While the combined impacts of commodity price fluctuations from the prior year had a modestly favorable

impact on the WM Renewable Energy segment in the first nine months of 2025, we may experience more significant impacts from fluctuations in the prices of renewable identification numbers (“RINs”) and natural gas in the future.

Variability i n 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 and investments in technology to automate certain aspects of our business.

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 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.

1 unchanged sentence

Current Quarter Financial Results

During the second quarter of 2025, we continued to focus on our priorities to advance our strategy – enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, investing in growth through our Recycling Processing and Sales and WM Renewable Energy segments and integrating the Stericycle business.

During the third quarter of 2025, we continued to focus on our priorities to advance our strategy – enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, investing in growth through our Recycling Processing and Sales and WM Renewable Energy segments and integrating the Stericycle business.

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.

We also continue to make investments in automation and optimization to enhance our operational efficiency and improve labor productivity for all lines of business.

As part of the integration of Stericycle, which constitutes our new WM Healthcare Solutions segment, we achieved synergies by reducing costs of duplicative business processes, focused on service delivery for our customers and aligned team members and business processes with WM’s core values.

Key elements of our financial results for the second quarter include:

● Revenues of $6,430 million, compared with $5,402 million in the prior year period, an increase of $1,028 million, or 19.0%.

We remain committed to our investment in recycling automation, which reduces costs and increases throughput, positioning us to overcome commodity price headwinds and deliver a differentiated service.

As part of the integration of Stericycle, which constitutes our new WM Healthcare Solutions segment, we achieved synergies by reducing costs of duplicative business processes, established a performance management approach aimed at accountability and continued to improve customer engagement, billing and collection processes to deliver cash flow.

Key elements of our financial results for the third quarter include:

● Revenues of $6,443 million, compared to $5,609 million in the prior year period, an increase of $834 million, or 14.9%.

The increase is primarily attributable to (i) our recent acquisitions, particularly Stericycle;

(ii) higher yield in our Collection and Disposal businesses and (iii) higher volumes primarily in our landfill, recycling and WM Renewable Energy businesses.

These increases were partially offset by (i) lower residential and temporary industrial collection volumes and (ii) a reduction in single-stream and brokerage recycled commodity prices;

● Operating expenses of $3,839 million, or 59.7% of revenues, compared with $3,291 million, or 60.9% of revenues, in the prior year period.

The $548 million increase in operating expenses is primarily attributable to (i) our recent acquisitions;

(ii) increased post-collection volumes and (iii) moderate inflationary pressures.

These increases were partially offset by (i) lower residential and temporary industrial business volumes and (ii) operating efficiency and cost control initiatives which positioned us to reduce our operating expenses as a percentage of revenue when compared with the prior year period;

● Selling, general and administrative expenses were $696 million, or 10.8% of revenues, compared with $501 million, or 9.3% of revenues, in the prior year period.

The $195 million increase is primarily attributable to (i) higher labor costs from acquisitions and (ii) consulting costs incurred to support the integration of Stericycle;

● Income from operations was $1,151 million, or 17.9% of revenues, compared with $1,009 million, or 18.7% of revenues, in the prior year period.

The $142 million increase in the current year earnings was primarily driven by (i) growth in our Collection and Disposal business;

(ii) a $54 million charge recognized in the prior year to increase the estimated fair value of a liability associated with the expected disposition of an investment we hold in a waste diversion technology business and (iii) higher volumes in our WM Renewable Energy business due to the completion of projects that increase the beneficial use of landfill gas sold to third parties.

This growth was partially offset by (i) higher depreciation and amortization costs and integration related expenses arising from our Stericycle acquisition and (ii) lower recycled commodity prices;

(ii) higher yield in our Collection and Disposal businesses and (iii) higher volumes primarily in our landfill, renewable energy, industrial collection and recycling businesses.

The increase was partially offset by lower residential collection volumes and a reduction in single-stream and brokerage recycled commodity prices;

● Operating expenses of $3,833 million, or 59.5% of revenues, compared to $3,399 million, or 60.6% of revenues, in the prior year period.

Despite the increase in operating expenses, efficiency gains, improved turnover and momentum in truck deliveries, combined with the benefit of price increases and high margin special waste volumes, positioned us to reduce our operating expenses as a percentage of revenue when compared to the prior year period;

● Selling, general and administrative expenses were $665 million, or 10.3% of revenues, compared to $525 million, or 9.4% of revenues, in the prior year period.

The $140 million increase is primarily attributable to our recent acquisitions, particularly Stericycle, including consulting and technology costs incurred to support Stericycle’s integration;

● Income from operations was $989 million, or 15.3% of revenues, compared to $1,119 million, or 20.0% of revenues, in the prior year period.

The $130 million decrease is primarily attributable to (i) a $152 million charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities resulting from significant deterioration of market pricing and demand for post-consumer plastics;

(ii) higher depreciation and amortization costs and integration-related expenses arising from our Stericycle acquisition;

(iii) a $45 million impairment charge related to the decision to accelerate the closure of a landfill within our East Tier and (iv) an $11 million negotiated payment for early termination of a contract in our WM Renewable Energy segment.

These reductions were partially offset by growth in our Collection and Disposal businesses and declines in annual incentive compensation and employee benefit expenses;

● Net income attributable to Waste Management, Inc.

was $726 million, or $1.80 per diluted share, compared with $680 million, or $1.69 per diluted share, in the prior year period.

The $46 million increase was primarily driven by an increase in income from operations, discussed above, and to a lesser extent a reduction in income tax expense.

These increases were partially offset by increased interest expense related to the additional debt incurred to finance our Stericycle acquisition;

● Net cash provided by operating activities was $1,545 million compared with $1,154 million in the prior year period, with the increase driven by (i) higher earnings in the majority of our segments, including the contributions from our recent acquisitions and (ii) favorable changes in working capital, net of effects of acquisitions and

divestitures.

This increase was partially offset by higher cash interest primarily due to additional debt incurred to fund our acquisition of Stericycle.

● Free cash flow was $818 million compared with $530 million in the prior year period.

The increase in free cash flow is attributable to the increase in net cash provided by operating activities discussed above.

These increases were partially offset by (i) increased capital spending, which was driven by investments in capital assets such as trucks, landfills and equipment and capital expenditures within our WM Healthcare Solutions segment to support the business and (ii) lower proceeds from divestitures of non-strategic assets and businesses.

was $603 million, or $1.49 per diluted share, compared to $760 million, or $1.88 per diluted share, in the prior year period.

The $157 million decrease was primarily driven

by a decrease in income from operations, discussed above, and increased interest expense related to the additional debt incurred to finance our Stericycle acquisition.

These decreases were partially offset by lower income tax expense;

● Net cash provided by operating activities was $1,592 million compared to $1,358 million in the prior year period, with the increase driven by (i) higher earnings in our Collection and Disposal businesses;

(ii) contributions from our recent acquisitions and (iii) lower cash tax payments.

These increases were partially offset by higher cash interest payments primarily due to additional debt incurred to fund our acquisition of Stericycle;

● Free cash flow was $821 million compared to $618 million in the prior year period.

The increase in free cash flow is attributable to the increase in net cash provided by operating activities discussed above, partially offset by a planned reduction in capital investment in our sustainability growth projects as we move from peak construction of this portfolio into a period where we will harvest strong returns on these businesses.

Free cash flow is a non-GAAP measure of liquidity.

2 unchanged sentences

Operating Revenues

The mix of operating revenues from our major lines of business for the three and six months ended June 30 are as follows (in millions):

The mix of operating revenues from our major lines of business for the three and nine months ended September 30 are as follows (in millions):

Revenues (a)(b)

Three Months Ended June 30:

Three Months Ended September 30:

Other collection

12 unchanged sentences

Revenues (a)(b)

Six Months Ended June 30:

Nine Months Ended September 30:

Other collection

11 unchanged sentences

Corporate and Other

(a) Intercompany operating revenues reflect each segment’s total intercompany sales, including intercompany sales within a segment and between segments.

(a) Includes each segment’s intercompany activity, including transactions within a segment and between segments.

Transactions within and between segments are generally made on a basis intended to reflect the market value of the service.

5 unchanged sentences

Three Months Ended

June 30, 2025 vs.

September 30, 2025 vs.

Period-to-Period Change for the

Six Months Ended

June 30, 2025 vs.

Nine Months Ended

September 30, 2025 vs.

Collection and Disposal

18 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2025 vs.

Nine Months Ended

September 30, 2025 vs.

Total collection

1 unchanged sentence

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 landfills, which achieved average yield of 7.0% and 5.6% for the three and six months ended June 30, 2025, respectively, led by strong performance in our West Tier.

Recycling Processing and Sales and WM Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $33 million and $41 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

Average market prices for single-stream recycled commodities declined nearly 15% and 5% for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

Revenues attributable to yield in our WM Renewable Energy segment increased $8 million and $16 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods, primarily driven by an increase in natural gas and electricity pricing.

We continue to see yield growth in our landfill business primarily driven by municipal solid waste, which achieved average yield of 6.7% and 6.0% for the three and nine months ended September 30, 2025, respectively.

Recycling Processing and Sales and WM Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $72 million and $113 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

Average market prices for single-stream recycled commodities declined nearly 35% and 15% for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

Revenues attributable to yield in our WM Renewable Energy segment decreased $2 million and increased $14 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

Year-to-date increases in natural gas and electricity pricing were partially offset by declines in RINs pricing.

While there may be short-term fluctuations in our commodity-driven businesses as prices change, we continue to take proactive steps to adjust our business models to protect against the downside risk of changes in commodity prices.

Energy Surcharge and Mandated Fees — These fees increased $9 million and $7 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

The increase was primarily due to higher mandated fees of $18 million and $25 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

Energy Surcharge and Mandated Fees — These fees increased $12 million and $19 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

During the three and nine months ended September 30, 2025, as compared to the prior year periods, mandated fees increased $4 million and $29 million, respectively.

Fluctuations in energy surcharges drove an increase of $8 million for the quarter to date period and a decrease of $10 million for the year to date period.

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, particularly in our West Tier.

Partially offsetting the increase was a decline in our energy surcharge revenues of $9 million and $18 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods, primarily due to a decline in the market prices for diesel fuel of approximately 8% for the three and six months ended June 30, 2025.

Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $115 million and $119 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

Special waste volume in our West Tier was favorably impacted by the wildfire clean-up activities that began in the first quarter of 2025.

Additionally, volumes increased in both our WM Renewable Energy and Recycling Processing and Sales segments primarily due to contributions from growth projects.

Furthermore, volumes increased in our Strategic Business Solutions business due to our focus on a differentiated service model for national account customers.

These volume increases were partially offset by declines in industrial and residential collection volume primarily due to lower contributions from temporary industrial business and intentional shedding of lower-margin residential business.

Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $43 million and $166 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

For the three months ended September 30, 2025, volume growth was led by our landfill business, with increases in municipal solid waste and special waste.

Industrial collection volumes rose for the first time since 2022, and growth projects drove gains in our WM Renewable Energy and Recycling Processing and Sales segments.

These gains were partially offset by a decline in residential collection volumes, reflecting our strategic exit from lower-margin contracts.

In addition to the growth in the quarter, the year-to-date period benefited from elevated special waste volumes in the West Tier driven by wildfire clean-up efforts that were completed by August 2025, and an increase in Strategic Business Solutions volumes due to our differentiated service model.

These gains were also partially offset by a decline in residential collection volumes, reflecting our strategic exit from lower-margin contracts.

Acquisitions and Divestitures

Acquisitions and divestitures resulted in a net increase in revenues of $740 million, or 13.6%, and $1,430 million, or 13.5%, respectively, for the three and six months ended June 30, 2025, as compared with the prior year periods.

This increase was primarily due to our acquisition of Stericycle in November 2024.

Acquisitions and divestitures resulted in a net increase in revenues of $671 million, or 11.9%, and $2,101 million, or 13.0%, respectively, for the three and nine months ended September 30, 2025, as compared to the prior year periods.

increase was primarily due to our acquisition of Stericycle in November 2024.

The remaining increase was related to our ongoing investment in tuck-in collection and disposal businesses.

Operating Expenses

The following table summarizes the major components of our operating expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

The following table summarizes the major components of our operating expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Labor and related benefits

6 unchanged sentences

Risk management

Our operating expenses for the three and six months ended June 30, 2025 increased as compared with the three and six months ended June 30, 2024, primarily due to (i) our recent acquisitions;

(ii) increased post-collection volumes and (iii) moderate inflationary pressures.

These increases were offset, in part, by (i) lower residential and temporary industrial business volumes and (ii) continued operating efficiency and cost control initiatives in our Collection and Disposal businesses.

Despite the overall increase in operating expenses, efficiency gains, improved turnover and momentum in truck deliveries, combined with the benefit of price increases and high margin special waste volumes, positioned us to reduce our operating expenses as a percentage of revenue when compared with the prior year period.

Significant items affecting the comparison of operating expenses for the reported periods include:

Labor and Related Benefits — The increase in labor and related benefits costs was largely driven by (i) the addition of employees as a result of our recent acquisitions and (ii) annual employee wage increases.

The increase was offset, in part, by (i) residential collection efficiency improvements;

(ii) lower residential volumes attributable to intentional shedding of lower margin contracts and (iii) improved driver retention.

Our operating expenses for the three and nine months ended September 30, 2025 increased as compared to the three and nine months ended September 30, 2024, primarily due to (i) our recent acquisitions, particularly Stericycle;

(ii) increased landfill volumes and (iii) moderate inflationary pressures.

These increases were offset, in part, by (i) lower residential volumes;

(ii) decreased cost of goods sold attributable to lower recycling commodity prices;

(iii) continued operating efficiency and cost control initiatives in our Collection and Disposal businesses and (iv) lower annual incentive compensation and employee benefit expenses.

Significant items affecting operating expenses during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:

Labor and Related Benefits —The increase in labor and related benefits costs was driven by the addition of employees as a result of our recent acquisitions, particularly Stericycle, and annual employee wage increases.

The increase was offset, in part, by (i) lower annual incentive compensation and employee benefit expenses;

(ii) residential collection efficiency improvements;

(iii) lower residential volumes attributable to intentional shedding of lower margin contracts and (iv) improved driver retention.

Transfer and Disposal Costs — The increase in transfer and disposal costs was primarily due to our recent acquisitions and inflationary cost pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers.

This increase was partially offset by lower residential volumes attributable to intentional shedding of lower margin contracts.

Maintenance and Repairs — The increase in maintenance and repairs costs was largely driven by (i) additional costs incurred as a part of our recent acquisitions;

(ii) inflation in parts, supplies and third-party services and (iii) annual employee wage increases.

These increases were offset, in part, by new truck deliveries, which lowered average fleet age and reduced demand for parts, supplies and third-party services.

Subcontractor Costs — The increase in subcontractor costs was primarily due to (i) additional costs incurred as a part of our recent acquisitions and (ii) continued inflationary cost pressures, particularly labor costs from third-party haulers.

These increases were offset, in part, by the impact of lower fuel prices on third-party subcontracted hauling and services as compared with the three and six months ended June 30, 2024.

Cost of Goods Sold — The decrease in cost of goods sold was primarily driven by a 15% and 5% decrease in average market prices for single-stream recycled commodities for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods.

Maintenance and Repairs — The increase in maintenance and repairs costs was driven by (i) additional costs incurred as a part of our recent acquisitions;

(ii) inflation in parts, supplies and third-party services and (iii) annual employee wage increases and higher technician headcount.

These increases were offset, in part, by an increase in new truck deliveries, which lowered the average fleet age and reduced demand for parts, supplies and third-party services.

Subcontractor Costs — The increase in subcontractor costs was primarily due to additional costs incurred as a part of our recent acquisitions and continued inflationary cost pressures, particularly labor costs from third-party haulers.

Cost of Goods Sold — The decrease in cost of goods sold was primarily driven by a 35% and 15% decrease in average market prices for single-stream recycled commodities for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods.

This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought on-line since the prior year periods.

Fuel — The increase in fuel costs was primarily due to (i) our recent acquisitions and (ii) the expiration of the federal alternative fuel tax credit on December 31, 2024.

These increases were offset, in part, by a decline in the market prices for diesel fuel of approximately 8% as compared to the prior year periods.

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes was primarily driven by increased landfill volumes in our West Tier.

Landfill Operating Costs — The increase in landfill operating costs for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, was primarily due to an increase in volumes and higher leachate treatment costs in our West Tier.

Partially offsetting the increase for the six months ended June 30, 2025 were certain adjustments to increase our environmental remediation reserve during the first quarter of 2024.

Risk Management — Risk management costs decreased for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to improved claims experience offset, in part, by (i) additional claims and premiums attributable to our recent acquisitions and (ii) prior year quarter insurance recoveries for property claims associated with a hurricane in 2023.

The increase for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was due to (i) additional claims and premiums attributable to our recent acquisitions and (ii) increases in claims costs due to negative claim development on a limited population of severe cases during the first quarter of 2025.

Other — Other operating cost increases were primarily due to (i) additional expenses attributable to our recent acquisitions;

(ii) gains on the sale of real estate in 2024 and, to a much lesser extent, (iii) increased utility costs largely attributable to new RNG plants brought on-line since the prior year periods and increased power prices.

Fuel — The increase in fuel costs was primarily due to our recent acquisitions and the expiration of the federal alternative fuel tax credit on December 31, 2024.

For the nine months ended September 30, 2025, the increase was partially offset by declines in diesel prices.

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes was primarily driven by increased landfill volumes and an overall rate increase in fees and taxes paid to municipalities on our disposal volumes.

Landfill Operating Costs — The increase in landfill operating costs for the three and nine months ended September 30, 2025, as compared to the prior year periods, was primarily due to an increase in volumes and higher leachate treatment costs in our West Tier.

Partially offsetting the increase for the nine months ended September 30, 2025 were certain adjustments to increase our environmental remediation reserve during the first quarter of 2024.

Risk Management — Risk management costs decreased for the three months ended September 30, 2025, as compared to the prior year period, primarily due to an insurance recovery associated with a 2022 transfer station fire and improved claims experience.

These reductions were offset, in part, by additional claims and premiums attributable to our recent acquisitions, particularly Stericycle.

The increase for the nine months ended September 30, 2025, as compared to the prior year period, was due to additional claims and premiums attributable to our recent acquisitions, particularly, Stericycle, and increases in claims costs due to negative claim development on a limited population of severe cases during the first quarter of 2025.

These increases were offset, in part, by increased insurance recoveries and improved claims experience.

Other — Other operating cost increases were primarily due to (i) additional expenses attributable to our recent acquisitions, particularly Stericycle;

(ii) gains on the sale of real estate in 2024 and, to a much lesser extent, (iii) increased utility costs and property taxes largely attributable to new RNG plants brought on-line since the prior year periods.

Selling, General and Administrative Expenses

The following table summarizes the major components of our selling, general and administrative expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

The following table summarizes the major components of our selling, general and administrative expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Labor and related benefits

1 unchanged sentence

Provision for bad debts

Selling, general and administrative expenses increased for the three and six months ended June 30, 2025 primarily due to higher labor costs from acquisitions as well as consulting costs incurred to support the integration of Stericycle.

Significant items affecting the comparison of our selling, general and administrative expenses for the reported periods include:

Selling, general and administrative expenses increased for the three and nine months ended September 30, 2025, as compared to the prior year periods, primarily due to our recent acquisitions, particularly Stericycle, including consulting and technology costs incurred to support Stericycle’s integration.

Significant items affecting selling, general and administrative expenses during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:

Labor and Related Benefits — The increase in labor and related benefits costs was primarily related to (i) our recent acquisitions, particularly Stericycle;

(ii) higher long-term incentive compensation costs and (iii) annual employee wage increases.

These increases were partially offset by lower annual incentive compensation and employee benefit costs.

Professional Fees —The increase in professional fees was primarily attributable to our acquisition of Stericycle, including integration, business optimization and system development costs.

Provision for Bad Debts — The increase in provision for bad debts was primarily attributable to our WM Healthcare Solutions segment.

Other — The increase in other expenses was primarily related to increased spend across multiple cost categories, including technology, risk management and travel, largely driven by the acquisition of Stericycle.

Provision for Bad Debts — The increase in provision for bad debts during the three months ended September 30, 2025, as compared to the prior year period, was primarily due to variability in the adjustments to our allowance for doubtful accounts driven by changes in the balance and slight changes in mix of accounts receivable.

Additionally, there was an increase for the nine months ended September 30, 2025, as compared to the prior year period, primarily attributable to our WM Healthcare Solutions segment driven by legacy Stericycle data and system challenges.

Depreciation, Depletion and Amortization Expenses

The following table summarizes the components of our depreciation, depletion and amortization expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

The following table summarizes the components of our depreciation, depletion and amortization expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Depreciation of tangible property and equipment

1 unchanged sentence

Amortization of intangible assets

The increase in depreciation of tangible property and equipment for the three and six months ended June 30, 2025, as compared to the prior year periods, was driven by (i) our recent acquisitions and (ii) investments in capital assets such as trucks, landfills and equipment.

The increase in depletion of landfill airspace for the three and six months ended June 30, 2025, as compared to the prior year periods, was primarily driven by volume increases, particularly at sites within our West Tier.

The increase in amortization of intangible assets for the three and sixth months ended June 30, 2025 was primarily driven by the amortization of customer relationships and other intangibles acquired as part of the Stericycle acquisition.

The increase in depreciation of tangible property and equipment for the three and nine months ended September 30, 2025, as compared to the prior year periods, was driven by our recent acquisitions and increased investments in capital assets such as trucks, equipment and landfills.

The increase in depletion of landfill airspace for the three months ended September 30, 2025, as compared to the prior year period, was primarily driven by volume increases.

The increase in depletion of landfill airspace for the nine months ended September 30, 2025, as compared to the prior year period, was primarily driven by volume increases, including increases driven by wildfire volumes.

The increase in amortization of intangible assets for the three and nine months ended September 30, 2025 was primarily driven by the amortization of customer relationships and other intangibles acquired as part of the Stericycle acquisition.

Restructuring

The increase in restructuring charges during the three and six months ended June 30, 2025 was primarily driven by employee costs related to our acquisition of Stericycle.

Restructuring charges for the three and nine months ended September 30, 2025 were primarily driven by employee costs related to integration of our acquisition of Stericycle as well as employee retention and severance costs incurred to support automation at our recycling facilities and in certain back-office functions.

(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net

(Gain) loss from divestitures, asset impairments and unusual items, net for the three and six months ended June 30, 2025, primarily relates to a $16 million goodwill impairment charge to a business engaged in oil recovery and sludge processing services.

(Gain) loss from divestitures, asset impairments and unusual items, net for the three months ended September 30, 2025 includes (i) a $152 million impairment charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities within our Recycling Processing and Sales segment resulting from significant deterioration of market pricing and demand for post-consumer plastics;

(ii) a $45 million impairment charge related to the decision to accelerate the closure of a landfill within our East Tier and (iii) an $11 million negotiated payment for early termination of a contract in our WM Renewable Energy segment.

The nine months ended September 30, 2025 also includes a $16 million goodwill impairment charge related to a business engaged

in oil recovery and sludge processing services.

This charge is reflected in Other Ancillary within our Collection and Disposal businesses.

(Gain) loss from divestitures, asset impairments and unusual items, net for the three and six months ended June 30, 2024 primarily relates to a $54 million charge required to increase the estimated fair value of a liability associated with the expected disposition of an investment the Company holds in a waste diversion technology business.

(Gain) loss from divestitures, asset impairments and unusual items, net for the three months ended September 30, 2024 primarily relates to a $14 million loss associated with the divestiture of a minority investment in a medical waste company within Corporate and Other, in connection with our November 2024 acquisition of Stericycle.

The nine months ended September 30, 2024 included a $54 million charge required to increase the estimated fair value of a liability associated with the expected disposition of an investment the Company holds in a waste diversion technology business.

This charge is reflected in our Corporate and Other measures within our segment reporting.

Income from Operations

The following table summarizes income from operations for our reportable segments for the three and six months ended June 30 (dollars in millions):

The following table summarizes income from operations for our reportable segments for the three and nine months ended September 30 (dollars in millions):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Period-to-Period

September 30,

Period-to-Period

8 unchanged sentences

*Percentage change does not provide a meaningful comparison.

The significant items affecting income from operations for our segments during the three and six months ended June 30, 2025, as compared with the prior year periods, are summarized below:

The significant items affecting income from operations for our segments during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:

● Collection and Disposal — Income from operations in our Collection and Disposal businesses increased primarily due to (i) revenue growth from price increases, which translate into increased yield or average unit price;

(ii) special waste volume in our West Tier, which was favorably impacted by the wildfire clean-up activities and (iii) actions to improve the efficiency and operating costs incurred to serve our customers.

These increases were partially offset by higher depreciation and depletion costs as discussed in Depreciation, Depletion and Amortization Expenses above.

● Recycling Processing and Sales — The decline in income from operations in Recycling Processing and Sales was primarily due to (i) a gain on sale of a non-strategic asset in 2024;

(ii) declining commodity prices compared to the prior year periods and (iii) lease termination costs.

(ii) elevated special waste volume in our West Tier, which was favorably impacted by the wildfire clean-up activities that were completed by August 2025;

(iii) contributions from our strategic acquisitions;

(iv) actions to improve the efficiency and operating costs incurred to serve our customers and (v) a decline in employee benefit expenses.

These increases were partially offset by (i) higher depreciation and depletion costs as discussed in Depreciation, Depletion and Amortization Expenses above;

(ii) prior year gains on the sale of non-strategic assets and (iii) a $45 million impairment charge in the current year related to the decision to accelerate the closure of a landfill within our East Tier .

● Recycling Processing and Sales — The decline in income from operations in Recycling Processing and Sales was primarily due to a $152 million impairment charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities resulting from significant deterioration of market pricing and demand for post-consumer plastics and declining commodity prices compared to the prior year periods.

These decreases were partially offset by increased volumes, which can be attributed to the improved throughput of our facilities and the addition of new market facilities, and improved operating costs from the automation of our recycling facilities.

● WM Renewable Energy — The increase in income from operations in WM Renewable Energy was primarily due to higher volumes resulting from the completion of projects that increase the beneficial use of landfill gas sold to third parties.

● WM Healthcare Solutions — The loss generated during the three months and six months ended June 30, 2025, respectively, was largely attributable to (i) depreciation and amortization expenses and (ii) integration related expenses.

There was no activity for this segment during the first half of 2024, as Stericycle was acquired in November 2024.

● Corporate and Other — The increase in income from operations was primarily driven by (i) a $54 million charge in the prior year to increase the estimated fair value of a liability associated with the expected disposition of an investment we hold in a waste diversion technology business and (ii) an improvement in risk management expenses.

These increases were partially offset by (i) integration-related consulting fees in connection with our Stericycle acquisition;

(ii) higher labor costs resulting from long-term incentive compensation costs and annual employee wage increases and (iii) professional services supporting business optimization.

● WM Renewable Energy — The decline in income from operations in WM Renewable Energy for the three months ended September 30, 2025, as compared to the prior year period, was primarily due to declines in RINs pricing and a negotiated payment for early termination of a contract.

This decline was partially offset by higher volumes resulting from the completion of projects that increase the beneficial use of landfill gas sold to third parties and an increase in electricity pricing.

The increase in income from operations for the nine months ended September 30, 2025, as compared to the prior year period, was due to higher electricity pricing and higher volumes resulting from the completion of projects that increase the beneficial use of landfill gas sold to third parties.

● WM Healthcare Solutions — The positive earnings contributions from the WM Healthcare Solutions business during the three and nine months ended September 30, 2025, were more than offset by depreciation and amortization expenses and integration related expenses, driving a loss in both periods.

● Corporate and Other — The increase in income from operations for the three and nine months ended September 30, 2025, as compared to the prior year periods, was due to (i) lower annual incentive compensation;

(ii) transaction costs incurred in the prior year in connection with our Stericycle acquisition and (iii) a prior year charge associated with the divestiture of a minority investment in a medical waste company.

The increase was partially offset by (i) higher long term incentive compensation;

(ii) annual employee wage increases and (iii) increases in consulting fees driven by integration and business optimization activities related to the acquisition of Stericycle.

Additionally, for the nine months ended September 30, 2025, the increase was further offset by a $54 million charge in the prior year period to increase the estimated fair value of a liability associated with the expected disposition of an investment we hold in a waste diversion technology business.

Interest Expense , Net

Our interest expense, net was $232 million and $464 million for the three and six months ended June 30, 2025, respectively, compared to $136 million and $266 million for the three and six months ended June 30, 2024, respectively.

Our interest expense, net was $225 million and $689 million for the three and nine months ended September 30, 2025, respectively, compared to $131 million and $397 million for the three and nine months ended September 30, 2024, respectively.

The increase is primarily related to an increase in our average debt balances to fund our November 2024 acquisition of Stericycle.

Income Tax Expense

Our income tax expense and effective income tax rate was $201 million, or 21.7%, and $352 million, or 20.5%, for the three and six months ended June 30, 2025, respectively, compared to $214 million, or 23.9%, and $376 million, or 21.3%, for the three and six months ended June 30, 2024, respectively.

Our income tax expense and effective income tax rate was $172 million, or 22.2%, and $524 million, or 21.0%, for the three and nine months ended September 30, 2025, respectively, compared to $235 million, or 23.6%, and $611 million, or 22.2%, for the three and nine months ended September 30, 2024, respectively.

See Note 4 to the Condensed Consolidated Financial Statements for more information related to income taxes.

15 unchanged sentences

The following is a summary of our cash and cash equivalents, restricted funds and debt balances (in millions):

September 30,

Cash and cash equivalents

5 unchanged sentences

Long-term portion

(a) As of June 30, 2025 and December 31, 2024, $104 million and $100 million, respectively, of these account balances were included in other current assets in our Condensed Consolidated Balance Sheets.

Debt — As of June 30, 2025, we had approximately $4.0 billion of debt maturing within the next 12 months, including (i) $1.5 billion of short-term borrowings under our commercial paper program (net of related discount on issuance);

(ii) $1.5 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities;

(iii) $500 million of 0.75% senior notes that mature in November 2025 and (iv) $464 million of other debt with scheduled maturities within the next 12 months, including $298 million of tax-exempt bonds.

As of June 30, 2025, we have classified $3.0 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.

(a) As of September 30, 2025 and December 31, 2024, $130 million and $100 million, respectively, of these account balances were included in other current assets in our Condensed Consolidated Balance Sheets.

Debt — As of September 30, 2025, we had approximately $3.9 billion of debt maturing within the next 12 months, including (i) $1.5 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) $861 million of short-term borrowings under our commercial paper program (net of related discount on issuance);

(iii) $500 million of 0.75% senior notes that mature in November 2025;

(iv) $223 million of 7.1% senior notes that mature in August 2026;

(v) $359 million of 2.6% Canadian senior notes that mature in September 2026 and (vi) $380 million of other debt with scheduled maturities within the next 12 months, including $188 million of tax-exempt bonds.

As of September 30, 2025, we have classified $3.0 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.

5 unchanged sentences

In lieu of providing separate financial statements for the subsidiary issuer and guarantor (WMI and WM Holdings), we have presented the accompanying supplemental summarized combined balance sheet and income statement information for WMI and WM Holdings on a combined basis after elimination of intercompany transactions between WMI and WM Holdings and amounts related to investments in any subsidiary that is a non-guarantor (in millions):

September 30,

Balance Sheet Information:

5 unchanged sentences

Other noncurrent liabilities

Six Months Ended

June 30, 2025

Nine Months Ended

September 30, 2025

Income Statement Information:

1 unchanged sentence

Summary of Cash Flow Activity

The following is a summary of our cash flows for the six months ended June 30 (in millions):

The following is a summary of our cash flows for the nine months ended September 30 (in millions):

Net cash provided by operating activities

1 unchanged sentence

Net cash used in financing activities

Net Cash Provided by Operating Activities — Our operating cash flows increased by $232 million for the six months ended June 30, 2025, as compared with the prior year period, driven by higher earnings in the majority of our segments, including the contributions from our recent acquisitions.

These increases were partially offset by (i) higher cash interest primarily due to additional debt incurred to fund our acquisition of Stericycle;

(ii) unfavorable changes in working capital, net of effects of acquisitions and divestitures, primarily driven by timing of cash collections and (iii) higher annual incentive compensation payments.

Net Cash Used in Investing Activities — The most significant items included in our investing cash flows for the six months ended June 30, 2025 and 2024 are summarized below:

● Capital Expenditures — We used $1,563 million and $1,335 million for capital expenditures during the six months ended June 30, 2025 and 2024, respectively.

The increase in capital spending is primarily driven by (i) investments in capital assets such as trucks, landfills and equipment and (ii) capital expenditures within our WM Healthcare Solutions segment to support the business.

● Acquisitions — Our spending on acquisitions was $374 million and $250 million during the six months ended June 30, 2025 and 2024, respectively, of which $366 million and $243 million, respectively, are considered cash used in investing activities.

Net Cash Provided by Operating Activities — Our operating cash flows increased by $466 million for the nine months ended September 30, 2025, as compared to the prior year period, driven by higher earnings in the majority of our segments, including the contributions from our recent acquisitions, and lower cash tax payments.

These increases were partially offset by higher cash interest primarily due to additional debt incurred to fund our acquisition of Stericycle and higher annual incentive compensation payments.

We continue to execute well in optimizing working capital, particularly in reducing days sales outstanding and aligning our days-to-pay measure with contract terms, though overall working capital changes have been pressured by the Stericycle acquisition.

Net Cash Used in Investing Activities — The most significant items included in our investing cash flows for the nine months ended September 30, 2025 and 2024 are summarized below:

● Capital Expenditures — We used $2,339 million and $2,116 million for capital expenditures during the nine months ended September 30, 2025 and 2024, respectively.

The increase in capital spending is primarily driven by (i) increased investments in capital assets such as trucks, equipment and landfills and (ii) capital expenditures within our WM Healthcare Solutions segment to support the business.

The increase in capital spending was partially offset by a planned reduction in capital investment in our sustainability growth projects as we move from peak construction of this portfolio into a period where we will harvest strong returns on these businesses.

● Acquisitions — Our spending on acquisitions was $403 million and $790 million during the nine months ended September 30, 2025 and 2024, respectively, of which $395 million and $782 million, respectively, are considered cash used in investing activities.

The remaining spend is cash used in financing activities related to the timing of contingent consideration paid.

Substantially all of these acquisitions are related to our solid waste and recycling businesses.

● Divestitures — Proceeds from divestitures of businesses and other assets, net of cash divested were $103 million and $58 million for the six months ended June 30, 2025 and 2024, respectively.

● Divestitures — Proceeds from divestitures of businesses and other assets, net of cash divested were $108 million and $99 million for the nine months ended September 30, 2025 and 2024, respectively.

Proceeds in 2025 primarily related to the sale of our WM Healthcare Solutions’ Spain and Portugal subsidiaries.

The remaining 2025 and 2024 proceeds were from the sale of certain non-strategic assets.

● Other, Net — The year-over-year changes in other investing activities were primarily driven by our 2024 repurchase of $778 million in certain WM tax-exempt bonds.

The remaining year-over-year changes in other investing activities are primarily driven by changes in our investment portfolio associated with a wholly-owned insurance captive.

During the six months ended June 30, 2025 and 2024, we used $87 million and $61 million, respectively, of cash from restricted cash and cash equivalents to invest in available-for-sale securities.

Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash flows for the six months ended June 30, 2025 and 2024 are summarized below:

● Debt Borrowings and Repayments — The following summarizes our cash borrowings and repayments of debt for the six months ended June 30 (in millions):

● Other, Net — The year-over-year changes in other investing activities are primarily driven by changes in our investment portfolio associated with a wholly-owned insurance captive.

During the nine months ended September 30, 2025 and 2024, we used $75 million and $38 million, respectively, of cash from restricted cash and cash equivalents to invest in available-for-sale securities.

Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash flows for the nine months ended September 30, 2025 and 2024 are summarized below:

● Debt Borrowings and Repayments — The following summarizes our cash borrowings and repayments of debt for the nine months ended September 30 (in millions):

Commercial paper

4 unchanged sentences

Refer to Note 3 to the Condensed Consolidated Financial Statements for additional information related to our debt borrowings and repayments.

● Common Stock Repurchase Program — During the six months ended June 30, 2024, we used $262 million to repurchase shares of our common stock under accelerated share repurchase agreements.

● Common Stock Repurchase Program — During the nine months ended September 30, 2024, we used $262 million to repurchase shares of our common stock under accelerated share repurchase agreements.

In the fourth quarter of 2024, we announced our temporary suspension of share repurchase activity as a result of the acquisition of Stericycle.

1 unchanged sentence

● Cash Dividends — For the periods presented, all dividends have been declared by our Board of Directors.

We paid cash dividends of $669 million and $608 million during the six months ended June 30, 2025 and 2024, respectively.

We paid cash dividends of $1,001 million and $909 million during the nine months ended September 30, 2025 and 2024, respectively.

The increase in dividend payments is primarily due to our quarterly per share dividend increasing from $0.75 in 2024 to $0.825 in 2025.

5 unchanged sentences

We believe free cash flow gives investors useful insight into how we view our liquidity, but the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that we have committed to, such as declared dividend payments and debt service requirements.

Our calculation of free cash flow and reconciliation to net cash provided by operating activities for the three and six months ended June 30, 2025 and 2024 is shown in the table below (in millions) and may not be calculated the same as similarly-titled measures presented by other companies:

Our calculation of free cash flow and reconciliation to net cash provided by operating activities for the three and nine months ended September 30, 2025 and 2024 is shown in the table below (in millions) and may not be calculated the same as similarly-titled measures presented by other companies:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by operating activities

16 unchanged sentences

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.

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.

1 unchanged sentence

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.

While weather-related and other event-driven special projects can boost revenues through additional work for a limited time, due to significant start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.

Variability in economic conditions, including inflation, interest rates, employment trends, and supply chain reliability, can create risk and uncertainty in financial outlook.

2 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk.

Information about market risks as of June 30, 2025 does not materially differ from that discussed under Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2024.

Information about market risks as of September 30, 2025 does not materially differ from that discussed under Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis