What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-09 compared with 2025-02-19 · 354 added, 435 removed, 1416 unchanged (36% of the section changed)

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Stericycle, Inc., which is included in the 2024 consolidated financial statements of the Company and constituted approximately 13.0% of total assets, excluding goodwill, as of December 31, 2024 and approximately 1.8% of consolidated operating revenues, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Stericycle, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2025 consolidated financial statements of the Company, and our report dated February 9, 2026 expressed an unqualified opinion thereon.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Landfill Depletion

Landfill Depletion Expense

Description of the Matter

At December 31, 2025, the Company’s landfill assets, net of accumulated depletion, totaled $8.2 billion and the associated depletion expense for 2025 was $898 million.

As discussed in Note 2 of the financial statements, the Company updates the estimates used to calculate individual landfill depletion rates at least annually, or more often if significant facts change.

As discussed in Note 2 of the consolidated financial statements, the Company updates the estimates used to calculate individual landfill depletion rates at least annually, or more often if significant facts change.

Landfill depletion rates are used in the computation of landfill depletion expense.

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the Company’s process for evaluating and updating the significant assumptions used in the development of the landfill depletion rates, management’s review of those significant assumptions, and the mathematical accuracy of the calculation and recording of depletion expense.

To test the landfill asset depletion rates, our audit procedures included, among others, assessing methodologies used by the Company and testing the significant assumptions discussed above, inclusive of the underlying data used by the Company in its development of these assumptions.

We compared the significant assumptions used by management to historical trends and, when available, to comparable size landfills accepting a similar type of waste.

Regarding expansion airspace, we evaluated the Company’s criteria for inclusion in remaining airspace.

To test the landfill depletion rates, our audit procedures included, among others, assessing methodologies used by the Company and testing the significant assumptions discussed above, inclusive of the underlying data used by the Company in its development of these assumptions.

We compared the significant assumptions used by management to historical trends and, when available, to comparably sized landfills accepting a similar type of waste.

Regarding expansion airspace, we evaluated the Company’s criteria for inclusion of unpermitted expansions in remaining airspace and the application of that criteria to relevant facts.

In addition, we considered the professional qualifications and objectivity of management’s internal engineers responsible for developing the assumptions.

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Description of the Matter

At December 31, 2024, the carrying value of the Company’s landfill asset retirement obligations related to final capping, closure and post-closure costs totaled $3.1 billion.

As discussed in Note 2 of the financial statements, the Company updates the estimates used to measure the asset retirement obligations annually, or more often if significant facts change.

At December 31, 2025, the Company’s landfill asset retirement obligations related to final capping, closure and post-closure costs totaled $3.3 billion.

As discussed in Note 2 of the consolidated financial statements, the Company updates the estimates used to measure the asset retirement obligations annually, or more often if significant facts change.

Auditing the landfill asset retirement obligation is complex due to the highly judgmental nature of the assumptions used in the measurement process.

Significant assumptions include:

estimated future costs associated with the capping, closure and post closure activities at each specific landfill, airspace consumed to date in relation to total estimated permitted and expansion airspace and the projected remaining landfill life.

estimated future costs associated with the capping, closure and post-closure activities at each landfill, airspace consumed to date in relation to total estimated permitted and expansion airspace and the projected remaining landfill life.

How We Addressed the Matter in Our Audit

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Our audit procedures included, among others, testing the Company’s controls over the landfill asset retirement obligation estimation process and management’s review of the significant assumptions used in the estimation of the liability, including the amount and timing of retirement costs.

To test the landfill asset retirement obligation valuation, we performed audit procedures that included, among others, assessing methodologies used by the Company, testing the completeness of activities included in the estimate (e.g., gas monitoring and extraction), and testing the significant assumptions discussed above, inclusive of the underlying data used by the Company in its development of these assumptions.

We compared the significant assumptions used by management to historical trends and, when available, to comparable size landfills accepting the same type of waste.

To test the landfill asset retirement obligation, we performed audit procedures that included, among others, assessing methodologies used by the Company, testing the completeness of activities included in the estimate (e.g., gas monitoring and extraction), and testing the significant assumptions discussed above, inclusive of the underlying data used by the Company in its development of these assumptions.

We compared the significant assumptions used by management to historical trends and, when available, to comparably sized landfills accepting the same type of waste.

In addition, we considered the professional qualifications and objectivity of management’s internal engineers responsible for developing the assumptions.

We involved EY engineering specialists to assist us with these procedures.

Specifically, we utilized the EY engineering specialists to evaluate the reasons for significant changes in assumptions from the historical trend, and to determine whether the change from the historical trend was appropriate and identified timely.

We involved EY engineering specialists to assist us in evaluating the reasons for significant changes in assumptions from the historical trend and determining whether the change from the historical trend was appropriate and identified timely.

We also tested the completeness and accuracy of the historical data utilized in preparing the estimate.

Acquisition of Stericycle, Inc.

– Valuation of Customer Relationships

Goodwill Impairment Assessment - Healthcare Solutions Segment

Description of the Matter

As described in Note 17 to the consolidated financial statements, during the year ended December 31, 2024, the Company completed the acquisition of Stericycle, Inc.

(“Stericycle”) for purchase consideration of approximately $6.9 billion, of which $2.3 billion was allocated to customer relationships.

The transaction was accounted for as a business combination.

Auditing the Company's accounting for its acquisition of Stericycle was complex due to the significant estimation uncertainty in determining the fair value of certain customer relationships included within Other intangible assets.

The Company valued the customer relationships using an income approach;

specifically, the multi-period excess earnings model.

The significant estimation uncertainty was primarily due to the sensitivity of the fair value to underlying assumptions, including projected revenue, attrition rate, EBITDA margin, and discount rate.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

At December 31, 2025, the Company’s goodwill related to the Healthcare Solutions segment totaled $3.8 billion.

As discussed in Note 2 and Note 5 of the consolidated financial statements, goodwill is tested for impairment at least annually on October 1 at the reporting unit level, or more frequently if impairment indicators arise.

The assessment of goodwill for impairment requires a comparison of the fair value of the reporting unit to its carrying amount, including goodwill.

If the fair value of a reporting unit is less than its carrying amount, an impairment loss would be recognized.

Auditing the Company’s annual goodwill impairment test for one Healthcare Solutions reporting unit was complex due to the significant estimation uncertainty in determining the fair value of the reporting unit.

The significant estimation uncertainty was primarily due to the sensitivity of the fair value to underlying assumptions used in the income approach, including EBITDA margin and discount rate.

These significant assumptions could be impacted by future economic and market conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the purchase price allocation process.

We tested management’s review controls over the significant assumptions described above along with the completeness and accuracy of the data used in the fair value estimates.

To test the estimated fair value of the customer relationships, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions described above used to develop the prospective financial information and testing the completeness and accuracy of the underlying data supporting the significant assumptions.

We involved our valuation specialists to assist with evaluating the methodology and significant assumptions used by the management to determine the fair value estimates.

We compared the significant assumptions to current industry, market and economic trends, the assumptions used by the Company to value similar assets in other acquisitions, as well as historical results of the Company's business and other guideline companies within the same industry.

We also performed a sensitivity analysis of the significant assumptions to evaluate the change in the estimated fair value of the customer relationships resulting from changes in the assumptions.

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the goodwill impairment process.

We tested management’s review controls over the significant assumptions described above.

To test the estimated fair value of the Healthcare Solutions reporting unit, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions described above used to develop the prospective financial information and testing the completeness and accuracy of the underlying data supporting the significant assumptions.

We involved our valuation specialists to assist with evaluating the methodology and significant assumptions used by management to determine the fair value estimate.

We compared the significant assumptions used by the Company to relevant industry reports, historical operating results and other guideline companies within the same industry.

We also performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

/s/ ERNST & YOUNG LLP

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Interest expense, net

Loss on early extinguishment of debt, net

Equity in net income (losses) of unconsolidated entities

Equity in net income (loss) of unconsolidated entities

Income before income taxes

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Net gain on disposal of assets

Goodwill impairment

(Gain) loss from divestitures, asset impairments (other than goodwill) and other, net

Equity in net (income) losses of unconsolidated entities, net of dividends

Loss on early extinguishment of debt, net

(Gain) loss from divestitures, asset impairments and other, net

Equity in net (income) loss of unconsolidated entities, net of dividends

Change in operating assets and liabilities, net of effects of acquisitions and divestitures:

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Common stock repurchase program

Acquisitions and other, net

Balance, December 31, 2023

Adoption of new accounting standard

Consolidated net income

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Balance, December 31, 2024

Adoption of new accounting standard

Consolidated net income

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Equity-based compensation transactions, net

Common stock repurchase program

Balance, December 31, 2025

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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, which is a significant source of fuel that we allocate to our natural gas fleet.

On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle, Inc.

(“Stericycle”), the operations of which are presented in this report as our new WM Healthcare Solutions segment.

The acquisition expands our offerings in the U.S.

and Canada and adds operations in parts of Western Europe.

These businesses provide Regulated Waste and Compliance Services (“RWCS”) and Secure Information Destruction (“SID”) services that protect people and brands, promote health and well-being and safeguard the environment.

Refer to Note 17 for further discussion.

Through our Waste Management Renewable Energy (“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 (“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.

Our senior management evaluates, oversees and manages the financial performance of our business through five reportable segments, referred to as (i) Collection and Disposal - East Tier (“East Tier”);

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(iii) Recycling Processing and Sales;

(iv) WM Renewable Energy and (v) WM Healthcare Solutions.

(iv) Renewable Energy and (v) Healthcare Solutions.

Our East and West Tiers, along with certain ancillary services (“Other Ancillary”) that are not managed through our Tier segments but that support our collection and disposal operations, form our “Collection and Disposal” businesses.

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In the opinion of management, these Consolidated Financial Statements include all adjustments, which, unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and changes in equity for the periods presented.

All material intercompany

All material intercompany balances and transactions have been eliminated.

Investments in unconsolidated entities are accounted for under the appropriate method of accounting.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

balances and transactions have been eliminated.

Investments in unconsolidated entities are accounted for under the appropriate method of accounting.

Estimates and Assumptions

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Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments held within restricted funds, and accounts receivable.

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments held within restricted funds, and accounts and other receivables.

We make efforts to control our exposure to credit risk associated with these instruments by (i) placing our assets and other financial interests with a diverse group of credit-worthy financial institutions;

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type of customer, such as municipal or commercial;

the age of outstanding receivables and existing as well as expected economic conditions.

the age of outstanding receivables as well as existing and expected economic conditions.

If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly.

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Balance as of December 31

To determine the allowance for doubtful accounts for trade receivables, we rely upon, among other factors, historical loss trends, the age of outstanding receivables, and existing as well as expected economic conditions, and we believe that all of our trade receivables share similar risk characteristics.

We monitor our credit exposure on an ongoing basis and assess whether assets in the pool continue to display similar risk characteristics.

Our acquisition of Stericycle introduced a new mix of customers which we believe generally share similar risk characteristics with our existing trade receivables;

however, Stericycle has and continues to encounter certain billing and collection delays.

The Company determined that a portion of the acquired Stericycle receivables have experienced more-than-insignificant deterioration in credit quality since origination, as of the acquisition date.

As a result, a gross allowance for doubtful accounts of trade receivables was recognized in the amount of $ 130 million as of the acquisition date of November 4, 2024.

Based on aging analysis as of December 31, 2024 and 2023, approximately 85 % and 90 %, respectively, of our trade receivables were outstanding less than 60 days .

To determine the allowance for doubtful accounts for trade receivables, we rely upon, among other factors, historical payment and loss trends, the age of outstanding receivables, as well as existing and expected economic conditions.

We believe that trade receivables across our Collection and Disposal, Recycling Processing and Sales, and Renewable Energy segments share similar risk characteristics.

We monitor our credit exposure on an ongoing basis and assess whether trade receivables continue to display similar risk characteristics.

Generally, the risk characteristics of Healthcare Solutions customers are similar to customers of our other business segments, though complexities within the customer engagement systems and processes of the acquired business have caused billing and collection delays.

As of the acquisition date, the Company determined that these issues contributed to a portion of the acquired Stericycle receivables having a more-than-insignificant deterioration in credit quality since origination.

As a result, a gross allowance for doubtful accounts of trade receivables was established with our opening balance sheet for the acquired business in the amount of $ 144 million.

Over the course of 2025, $ 88 million of acquired and reserved trade account receivable balances related to the Stericycle acquisition was written off.

Based on aging analysis as of December 31, 2025 and 2024, approximately 85 % of our trade receivables were outstanding less than 60 days .

To determine the allowance for doubtful accounts for other receivables, as well as loans and other instruments, we rely primarily on credit ratings and associated default rates based on the maturity of the instrument.

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In these circumstances, continued inclusion must be approved through a landfill-specific review process that includes approval by our Chief Financial Officer on a quarterly basis.

Of the 18 landfill sites with expansions included as of December 31, 2024, one landfill required the Chief Financial Officer to approve the inclusion of the unpermitted airspace because the permit application process did not meet the one - or five-year requirements.

Of the 15 landfill sites with expansions included as of December 31, 2025, there were none that required approval by our Chief Financial Officer.

When we include the expansion airspace in our calculations of remaining permitted and expansion airspace, we also include the projected costs for development, as well as the projected asset retirement costs related to final capping, closure and post-closure of the expansion in the depletable basis of the landfill.

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The nature of our operations, particularly with respect to the construction, operation and maintenance of our landfills, subjects us to an array of laws and regulations relating to the protection of the environment.

Under current laws

Under current laws and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by conditions that existed before we acquired a site.

conditions that existed before we acquired a site.

In addition to remediation activity required by state or local authorities, such liabilities include potentially responsible party (“PRP”) investigations.

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Furniture, fixtures and office equipment

(a) Includes recycling and renewable natural gas (“RNG”) facilities and WM Healthcare Solutions autoclaves and incinerators as well as containers.

(a) Includes recycling and RNG facilities and Healthcare Solutions autoclaves and incinerators as well as containers.

We lease property and equipment in the ordinary course of our business.

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We generally recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, based on fair value estimates as of the date of acquisition.

Contingent Consideration — In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain negotiated goals, such as targeted revenue levels, targeted disposal

We have recognized liabilities for these contingent

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

volumes or the issuance of permits for expanded landfill airspace.

We have recognized liabilities for these contingent obligations based on their estimated fair value as of the date of acquisition with any differences between the acquisition date fair value, subsequent remeasurements and the ultimate settlement of the obligations being recognized as an adjustment to income from operations.

obligations based on their estimated fair value as of the date of acquisition with any differences between the acquisition date fair value, subsequent remeasurements and the ultimate settlement of the obligations being recognized as an adjustment to income from operations.

Refer to Note 11 for adjustments recognized during the reported periods.

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All acquisition-related transaction costs are generally expensed as incurred.

During 2024, we acquired Stericycle which is included in our new WM Healthcare Solutions segment.

We also acquired 11 solid waste and recycling businesses.

See Note 17 for additional information related to our acquisitions.

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Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses.

We do not amortize goodwill, but as discussed in the Long-Lived Asset Impairments section below, we assess our goodwill for impairment at least annually.

As discussed in the Long-Lived Asset Impairments section below, we assess our goodwill for impairment at least annually.

Other intangible assets consist primarily of customer and supplier relationships, covenants not-to-compete, licenses, permits (other than landfill permits, which are combined with landfill tangible assets and depleted per our landfill depletion policy), trade names and other contracts.

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If the carrying values are in excess of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset or asset group to its carrying value and the difference is recorded in the period that the impairment indicator occurs.

Fair value is

Fair value is generally determined by considering (i) internally developed discounted projected cash flow analysis of the asset or asset group;

(ii) third-party valuations and/or (iii) information available regarding the current market for similar assets.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

generally determined by considering (i) internally developed discounted projected cash flow analysis of the asset or asset group;

(ii) third-party valuations and/or (iii) information available regarding the current market for similar assets.

Estimating future cash flows requires significant judgment and projections may vary from the cash flows eventually realized, which could impact our ability to accurately assess whether an asset has been impaired.

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Indefinite-Lived Intangible Assets, Including Goodwill — At least annually using a measurement date of October 1, and more frequently if warranted, we assess our indefinite-lived intangible assets, including the goodwill of our reporting units, for impairment.

We first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If the assessment indicates a possible impairment, we complete a quantitative review, comparing the estimated fair value of a reporting unit to its carrying amount, including goodwill.

An impairment charge is recognized if the asset’s estimated fair value is less than its carrying amount.

We may perform either a qualitative or quantitative assessment;

however, if a qualitative assessment is performed and we determine that the fair value of a reporting unit is more likely than not to be less than its carrying amount, a quantitative assessment is performed.

The quantitative assessment compares the estimated fair value of a reporting unit to its carrying amount, including goodwill.

An impairment charge is recognized if the reporting unit’s estimated fair value is less than its carrying amount.

Fair value is typically estimated using an income approach using Level 3 inputs.

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However, we believe our methodology for estimating the fair value of our reporting units is reasonable.

As part of our 2025 annual assessment, we performed a quantitative review for a reporting unit within our Healthcare Solutions segment due its sensitivity to changes in estimates of fair value, specifically changes driven by revenue growth, cost and discount rate assumptions, given the recent acquisition of the business.

Based on our assessment no impairment was recorded for the year ended December 31, 2025.

Refer to Note 11 for information related to impairments recognized during the reported periods.

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We have retained a significant portion of the risks related to our health and welfare, general liability, automobile liability and workers’ compensation claims programs.

For our self-insured portions, the exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial valuation or internal estimates.

The gross estimated liability associated with settling unpaid claims is included in accrued liabilities in our Consolidated Balance Sheets if expected to be settled within one year;

otherwise, it is included in other long-term liabilities.

For our self-insured portions, the exposure for unpaid claims and

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

insurance recoveries related to recorded liabilities are reflected as other current receivables or other long-term assets in our Consolidated Balance Sheets when we believe that the receipt of such amounts is probable.

associated expenses, including incurred but not reported losses, is based on an actuarial valuation or internal estimates.

The gross estimated liability associated with settling unpaid claims is included in accrued liabilities in our Consolidated Balance Sheets if expected to be settled within one year;

otherwise, it is included in other long-term liabilities.

Estimated insurance recoveries related to recorded liabilities are reflected as other current receivables or other long-term assets in our Consolidated Balance Sheets when we believe that the receipt of such amounts is probable.

We use a wholly-owned insurance captive to insure the deductibles for our general liability, automobile liability and workers’ compensation claims programs.

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Investments in Unconsolidated Entities

As a result of adopting ASU 2023-02 in 2024, our investments in entities established to invest in and manage low-income housing properties are accounted for using the proportional amortization method.

As a result of adopting Accounting Standards Update (“ASU”) 2023-02 in 2024, our investments in entities established to invest in and manage low-income housing properties are accounted for using the proportional amortization method.

Under the proportional amortization method, the equity investment is amortized in proportion to the income tax credits and other income tax benefits received.

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Equity method investments

Investments qualifying for proportional amortization method (a)

Investments qualifying for proportional amortization method

Investments without readily determinable fair values

Investments in unconsolidated entities

(a) As discussed above, our low-income housing investments are accounted for using the proportional amortization method.

Prior to 2024, these investments were included as equity method investments.

WASTE MANAGEMENT, INC.

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The change in the fair value of a cash flow hedge is reported in accumulated other comprehensive income (loss) and is reclassified to earnings when the forecasted transaction affects earnings.

See Note 6 for additional information regarding our derivative instruments.

Foreign Currency

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dollar/Canadian dollar exchange rate was 1.3724 at December 31, 2025, 1.4384 at December 31, 2024 and 1.3243 at December 31, 2023.

dollar/Euro exchange rate was 0.9659 at December 31, 2024.

dollar/British pound sterling exchange rate was 0.7990 at December 31, 2024.

dollar/Euro exchange rate was 0.8514 at December 31, 2025 and 0.9659 at December 31, 2024.

dollar/British pound sterling exchange rate was 0.7421 at December 31, 2025 and 0.7990 at December 31, 2024.

Refer to Note 12 for information regarding the impacts of foreign currency on our comprehensive income and results of operations.

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Recycling Processing and Sales revenues generally consist of tipping fees and the sale of recycling commodities to and/or on behalf of third parties.

Our WM Renewable Energy revenue is primarily generated from (i) the sale of captured and converted landfill methane gas;

Our Renewable Energy revenue is primarily generated from (i) the sale of captured and converted landfill methane gas;

(ii) the sale of RINs under the Renewable Fuel Standard (“RFS”) program implemented by the U.S.

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(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) and associated RECs.

Our WM Healthcare Solutions revenue is primarily generated from (i) RWCS, which provide collection, processing and disposal of regulated and specialized waste, including medical, pharmaceutical and hazardous waste, and compliance programs and (ii) SID services, which provides for the collection of personal and confidential information for secure destruction and recycling of sorted office paper.

Our Healthcare Solutions revenue is primarily generated from (i) RWCS, which provide collection, processing and disposal of regulated and specialized waste, including medical, pharmaceutical and hazardous waste, and compliance programs and (ii) SID services, which provide for the collection of personal and confidential information for secure destruction and recycling of sorted office paper.

The customers typically enter into a contract for the provision of services on a weekly, monthly or as-needed basis over the contract term.

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We capitalize interest on certain projects under development, including landfill expansion projects, certain assets under construction, including operating landfills and landfill gas-to-energy projects and internal-use software.

During 2024, 2023 and 2022, total interest costs were $ 728 million, $ 590 million and $ 425 million, respectively, of which $ 84 million, $ 63 million and $ 29 million were capitalized in 2024, 2023 and 2022, respectively.

During 2025, 2024 and 2023, total interest costs were $ 1.0 billion, $ 728 million and $ 590 million, respectively, of which $ 82 million, $ 84 million and $ 63 million were capitalized in 2025, 2024 and 2023, respectively.

The Company is subject to income tax in the U.S., Canada and within parts of Western Europe.

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Accrued capital expenditures

Income taxes (net of refunds):

State and Local

During 2025, 2024 and 2023, we had $ 238 million, $ 474 million and $ 276 million, respectively, of non-cash financing activities primarily from our low-income housing investments and new financing leases.

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See Note 17 for further discussion of our acquisitions.

Restructuring

During the year ended December 31, 2025, we recognized $ 51 million of pre-tax restructuring charges, primarily related to employee costs associated with the integration of Stericycle as well as employee retention and severance costs incurred to support automation at our recycling facilities and in certain back-office functions.

Adoption of New Accounting Standards in 2025

Investments—Equity Method and Joint Ventures:

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method" (“ASU 2023-02”), which allows reporting entities the option to use the proportional amortization method to account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met.

For public business entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

In 2024, the Company adopted ASU 2023-02 on a modified retrospective basis.

The amended guidance did not have a material impact on our consolidated financial statements.

See Note 8 for further discussion of our low-income housing investments.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”) which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 was effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 for the year ended 2024 and accordingly, our segment disclosures for years 2023 and 2022 have been retrospectively recast under this guidance.

See Note 19 for further discussion of our segments.

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”) which improves the transparency of income tax disclosures by requiring specific categories in the income tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

Further, ASU 2023-09 requires certain disclosures on income taxes paid disaggregated by jurisdiction.

ASU 2023-09 was effective for public entities for fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a retrospective basis and accordingly, our income tax disclosures for years 2024 and 2023 have been retrospectively recast under this guidance.

See Note 8 for additional information.

WASTE MANAGEMENT, INC.

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Interest accretion

Revisions in estimates and interest rate assumptions

Revisions in estimates

Acquisitions, divestitures and other adjustments

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Property and equipment, net (b)

(a) As of December 31, 2024 and 2023, includes (i) $ 1.7 billion and $ 1.5 billion, respectively, related to recycling facilities and (ii) $ 834 million and $ 720 million, respectively, related to RNG facilities.

December 31, 2024 also includes $ 419 million related to autoclaves, incinerators, and other equipment of Stericycle that was acquired on November 4, 2024 and is now included in WM Healthcare Solutions.

(a) As of December 31, 2025 and 2024, includes (i) $ 1.7 billion related to recycling facilities;

(ii) $ 1.2 billion and $ 834 million, respectively, related to RNG facilities and (iii) $ 340 million and $ 419 million, respectively, related to autoclaves, incinerators, and other equipment of Healthcare Solutions.

WASTE MANAGEMENT, INC.

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Goodwill and Other Intangible Assets

Goodwill was $ 13,438 million and $ 9,254 million as of December 31, 2024 and 2023, respectively.

Goodwill was $ 13.9 billion and $ 13.4 billion as of December 31, 2025 and 2024, respectively.

As discussed in Note 2, we perform our annual impairment test of goodwill balances for our reporting units using a measurement date of October 1.

We will also perform interim tests if an impairment indicator exists.

In 2023, as a result of a longer-than-anticipated ramp toward full scale and profitability of a business engaged in accelerating film and plastic wrap recycling capabilities, we recorded a goodwill impairment charge of $ 168 million, with $ 22 million attributable to noncontrolling interests.

This charge was partially offset by the recognition of $ 46 million of income related to the reversal of a liability for contingent consideration associated with our investment in such business for the year ended December 31, 2023.

This net charge was reflected in our financial statements as part of our Recycling Processing and Sales segment.

Fair value of the business was estimated using an income approach based on long-term projected discounted future cash flows of the reporting unit.

The $ 4,184 million increase in goodwill during 2024 is primarily related to our acquisition of Stericycle.

There were no impairments of goodwill or other intangible assets as of December 31, 2024.

The $ 442 million increase in goodwill during 2025 is primarily related to our solid waste and recycling acquisitions.

This increase was offset by a $ 16 million goodwill impairment charge to a business engaged in oil recovery and sludge processing services.

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

There were no impairments of goodwill or other intangible assets for the year ended December 31, 2024.

See Notes 11 and 17 for additional information.

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For segment reporting purposes, our recycling facilities and recycling brokerage services are included within our Recycling Processing and Sales segment.

All of the goodwill from our acquisition of Stericycle was provisionally assigned to the WM Healthcare Solutions segment.

The assignment of goodwill to reporting units is not complete as of December 31, 2024.

In 2025, we finalized the determination of our reporting units related to the Stericycle acquisition and allocated the goodwill balance to two reporting units within our Healthcare Solutions segment using a relative fair value allocation method.

The following table presents changes in goodwill during the reported periods (in millions):

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Divested goodwill

Foreign currency translation and other

Foreign currency translation and other (a)

Balance, December 31, 2025

(a) For our Healthcare Solutions segment, this amount includes a $ 131 million purchase price allocation adjustment.

See Note 17 for additional information.

WASTE MANAGEMENT, INC.

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See Note 17 for additional information related to intangibles acquired from our acquisitions.

Debt and Derivatives

The following table summarizes the major components of debt at principal amounts as of each balance sheet date (in millions) and provides the maturities and interest rate ranges of each major category as of December 31:

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Tax-exempt bonds, maturing through 2055, fixed and variable interest rates ranging from 0.70 % to 4.60 % (weighted average interest rate of 3.4 % as of December 31, 2025 and 3.7 % as of December 31, 2024)

Financing leases and other, maturing through 2082 (weighted average interest rate of 4.9 % as of December 31, 2024 and 5.0 % as of December 31, 2023) (a)

Financing leases and other, maturing through 2075 (weighted average interest rate of 4.8 % as of December 31, 2025 and 4.9 % as of December 31, 2024)

Debt issuance costs, discounts and other

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Long-term debt, less current portion

(a) Excluding our landfill financing leases, the maturities of our financing leases and other debt obligations extend through 2059.

Debt Classification

As of December 31, 2025, we had approximately $ 3.7 billion of debt maturing within the next 12 months, including (i) $ 1.8 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Classification

As of December 31, 2024, we had approximately $ 4.0 billion of debt maturing within the next 12 months, including (i) $ 1.4 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities;

their scheduled maturities;

(ii) $ 1.1 billion of short-term borrowings under our commercial paper program (net of related discount on issuance);

(iii) $ 422 million of 3.125 % senior notes that mature in March 2025;

(iv) $ 500 million of 0.750 % senior notes that mature in November 2025 and (v) $ 438 million of other debt with scheduled maturities within the next 12 months, including $ 298 million of tax-exempt bonds.

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

(iv) $ 364 million of 2.6 % Canadian senior notes that mature in September 2026 and (v) $ 200 million of other debt with scheduled maturities within the next 12 months.

As of December 31, 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 (“$3.5 billion revolving credit facility”).

The remaining $ 1.4 billion of debt maturing in the next 12 months is classified as current obligations.

Access to and Utilization of Credit Facilities, Term Credit Agreement and Commercial Paper Program

Term Credit Agreement up to $7.2 Billion — On August 28, 2024, the Company entered into a delayed draw Term Credit Agreement in a principal amount of up to $ 7.2 billion (the “Term Credit Agreement”).

In October 2024, we drew $ 5.2 billion of borrowings under the Term Credit Agreement that were applied to funding our acquisition of Stericycle.

In November 2024, we repaid all outstanding borrowings and contemporaneously terminated the Term Credit Agreement .

$3.5 Billion Revolving Credit Facility — In May 2024, we amended and restated our $3.5 billion U.S.

and Canadian revolving credit facility, extending the term through May 2029.

The agreement includes a $ 1.0 billion accordion feature that may be used to increase total capacity in future periods, and we have the option to request up to two one-year extensions.

Waste Management of Canada Corporation and WM Quebec Inc., each an indirect wholly-owned subsidiary of WMI, are borrowers under the $3.5 billion revolving credit facility, and the agreement permits borrowing in Canadian dollars up to the U.S.

dollar equivalent of $ 375 million, with such borrowings to be repaid in Canadian dollars.

WM Holdings, Inc.

(“WM Holdings”), a wholly-owned subsidiary of WMI, guarantees all the obligations under the $3.5 billion revolving credit facility.

The $3.5 billion revolving credit facility provides us with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper program.

and Canadian revolving credit facility (“$3.5 billion revolving credit facility”), as discussed below.

The remaining $ 711 million of debt maturing in the next 12 months is classified as current obligations.

Access to and Utilization of Credit Facilities and Commercial Paper Program

$3.5 Billion Revolving Credit Facility — Our $ 3.5 billion revolving credit facility, maturing May 2029, provides us with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper program.

The interest rates we pay on outstanding U.S.

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We had $ 1.1 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program and $ 227 million of letters of credit issued, both supported by the facility, leaving unused and available credit capacity of $ 2.2 billion as of December 31, 2025.

The agreement includes a $ 1.0 billion accordion feature that may be used to increase total capacity in future periods, and we have the option to request up to two one -year extensions.

Waste Management of Canada Corporation and WM Quebec Inc., each an indirect wholly-owned subsidiary of WMI, are borrowers under the $ 3.5 billion revolving credit facility, and the agreement permits borrowing in Canadian dollars up to the U.S.

dollar equivalent of $ 375 million, with such borrowings to be repaid in Canadian dollars.

WM Holdings, Inc.

(“WM Holdings”), a wholly-owned subsidiary of WMI, guarantees all the obligations under the $ 3.5 billion revolving credit facility.

Commercial Paper Program — We have a commercial paper program that enables us to borrow funds for up to 397 days at competitive interest rates.

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Other Letter of Credit Lines — As of December 31, 2025, we had utilized $ 920 million of other uncommitted letter of credit lines with terms extending through December 2029.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Borrowings and Repayments

Commercial Paper Program — During the year ended December 31, 2025, we made cash repayments of $ 20.4 billion, which were partially offset by $ 20.2 billion of cash borrowings (net of related discount on issuance).

A portion of these borrowings were repaid with proceeds from our senior notes issuances discussed below.

Senior Notes — In July 2024, WMI issued $ 750 million of 4.950 % senior notes due July 2027 and $ 750 million of 4.950 % notes due July 2031, the net proceeds of which were $ 1.49 billion.

The net proceeds were used primarily to reduce outstanding borrowings under our commercial paper program.

We also repaid $ 156 million of WMI’s 3.500 % senior notes upon maturity in May 2024.

In November 2024, we issued senior notes, the net proceeds of which were approximately $ 5.2 billion, consisting of (i) $ 1.0 billion of 4.500 % senior notes due March 2028;

(ii) $ 700 million of 4.650 % senior notes due March 2030;

(iii) $ 750 million of 4.800 % senior notes due March 2032;

(iv) $ 1.5 billion of 4.950 % senior notes due March 2035 and (v) $ 1.25 billion of 5.350 % senior notes due October 2054.

We used the net proceeds to repay all outstanding borrowing under the Term Credit Agreement.

Term Credit Agreement - In October 2024, we drew $ 5.2 billion of borrowings under the Term Credit Agreement that were applied to funding our acquisition of Stericycle.

In November 2024, we repaid all outstanding borrowings with net proceeds from our November 2024 issuance of $ 5.2 billion of senior notes and contemporaneously terminated the Term Credit Agreement, resulting in a $ 7 million loss on early extinguishment of debt.

Stericycle Exchange Offer and Consent Solicitation – On November 8, 2024, we completed our private offer to eligible holders to exchange $ 500 million of outstanding 3.875 % senior notes issued by Stericycle (the “Stericycle Notes”) for new notes issued by us (the “WM Notes”) and cash.

The WM Notes have the same interest rate, interest payment dates, and maturity date as the exchanged Stericycle Notes but differ in certain respects from the Stericycle Notes, including with respect to the redemption provisions.

Approximately $ 485 million in aggregate principal amount of the Stericycle Notes, or 97 %, were tendered and accepted, and new WM Notes were issued.

The portion of Stericycle Notes not exchanged, approximately $ 15 million, remains an outstanding obligation of Stericycle, our wholly-owned subsidiary.

The debt exchange is accounted for as a modification of debt, as the financial terms of the WM Notes do not differ from the Stericycle Notes, and there is no substantial difference between the present value of cash flows under each respective set of notes.

In connection with the exchange offer, we solicited and obtained sufficient consents to amend the Stericycle Notes and related indenture to eliminate substantially all the restrictive covenants, restrictive provisions and events of default, other than payment-related, guarantee-related and bankruptcy-related events of default, and such amendments took effect with respect to the remaining Stericycle Notes on November 8, 2024.

Tax-Exempt Bonds — We issued $ 50 million of tax-exempt bonds in 2024.

The proceeds from the issuance of these bonds were deposited directly into a restricted trust fund to be used for the specific purpose for which the money was raised, which is generally to finance expenditures for solid waste disposal, recycling and renewable natural gas facility construction and development.

In 2024, we also repaid $ 60 million of our tax-exempt bonds with available cash at their scheduled maturities.

Financing Leases and Other — The increase in our financing leases and other debt obligations in 2024 are primarily related to (i) a note payable associated with our low-income housing investment discussed in Note 8, which increased our debt obligations by $ 316 million and (ii) $ 153 million primarily related to non-cash financing leases.

The increase in our debt obligations was partially offset by $ 135 million of cash repayments of debt at maturity.

Senior Notes — We repaid $ 422 million of 3.125 % senior notes in March 2025 and $ 500 million of 0.75 % senior notes in November 2025, in both cases with available cash at their scheduled maturities.

Senior Notes Exchange Offer — On June 25, 2025, we completed an exchange offer pursuant to which we issued approximately $ 483 million of new notes (the “Registered Notes”) registered under the Securities Act of 1933, as amended, in exchange for a like amount of our outstanding unregistered 3.875 % Senior Notes due 2029 (the “Restricted Notes”).

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

This amount represents approximately 99 % of the $ 485 million aggregate principal amount of Restricted Notes that were originally issued on November 8, 2024, in a private offer in exchange for notes of Stericycle.

The terms of the Registered Notes are substantially identical in all material respects to the terms of the Restricted Notes, except that the Registered Notes are not subject to restrictions on transfer.

The debt exchange is accounted for as a modification of debt, as the financial terms of the Registered Notes do not differ from the Restricted Notes, and there is no substantial difference between the present value of cash flows under each respective set of notes.

Tax-Exempt Bonds — We issued $ 252 million of tax-exempt bonds in 2025.

The proceeds from the issuance of these bonds were deposited directly into a restricted trust fund to be used for the specific purpose for which the money was raised, which is generally to finance expenditures for solid waste disposal and recycling facility construction and development.

We also repaid $ 298 million of tax-exempt bonds in 2025 at their respective scheduled maturities with available cash on hand.

Financing Leases and Other — The increase in our financing leases and other debt obligations in 2025 is due to an increase of $ 248 million, primarily related to non-cash financing leases, partially offset by $ 153 million of cash repayments of debt at maturity.

Scheduled Debt Payments

Principal payments of our debt for the next five years and thereafter, based on scheduled maturities are as follows:

$ 2,613 million in 2025, $ 747 million in 2026, $ 2,022 million in 2027, $ 1,969 million in 2028, $ 2,048 million in 2029 and $ 14,680 million thereafter.

$ 1.8 billion in 2026, $ 2.0 billion in 2027, $ 2.0 billion in 2028, $ 2.1 billion in 2029, $ 1.7 billion in 2030 and $ 13.5 billion thereafter.

Our recorded debt and financing lease obligations include non-cash adjustments associated with debt issuance costs, discounts and fair value adjustments attributable to terminated interest rate derivatives, which have been excluded from these amounts because they will not result in cash payments.

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Our most restrictive financial covenant is the one contained in our $ 3.5 billion revolving credit facility, which sets forth a maximum total debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization ratio (the “Leverage Ratio”).

This covenant requires that the Leverage Ratio for the preceding four fiscal quarters will not be more than 3.75 to 1, provided that if an acquisition permitted under the $3.5 billion revolving credit facility involving aggregate consideration in excess of $ 200 million occurs during the fiscal quarter, the Company shall have the right to increase the Leverage Ratio to 4.25 to 1 during such fiscal quarter and for the following three fiscal quarters (the “Elevated Leverage Ratio Period”).

Given the strength of the Company’s financial position and its expectation to maintain headroom within the Leverage Ratio, the Company has not elected to increase the Leverage Ratio for an Elevated Leverage Ratio Period in connection with the acquisition of Stericycle.

There shall be no more than two Elevated Leverage Ratio Periods during the term of the $3.5 billion revolving credit facility, and the Leverage Ratio must return to 3.75 to 1 for at least one fiscal quarter between Elevated Leverage Ratio Periods.

This covenant requires that the Leverage Ratio for the preceding four fiscal quarters will not be more than 3.75 to 1, provided that if an acquisition permitted under our $ 3.5 billion revolving credit facility involving aggregate consideration in excess of $ 200 million occurs during the fiscal quarter, the Company shall have the right to increase the Leverage Ratio to 4.25 to 1 during such fiscal quarter and for the following three fiscal quarters (the “Elevated Leverage Ratio Period”).

There shall be no more than two Elevated Leverage Ratio Periods during the term of our $ 3.5 billion revolving credit facility, and the Leverage Ratio must return to 3.75 to 1 for at least one fiscal quarter between Elevated Leverage Ratio Periods.

The Company has not elected to increase the Leverage Ratio for an Elevated Leverage Ratio Period during the term of our $ 3.5 billion revolving credit facility.

The calculation of all components used in the Leverage Ratio covenant are as defined in the $ 3.5 billion revolving credit facility.

As of December 31, 2025 and 2024, we were in compliance with our Leverage Ratio covenant.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our $ 3.5 billion revolving credit facility, senior notes and other financing arrangements also contain certain restrictions on the ability of the Company’s subsidiaries to incur additional indebtedness as well as restrictions on the ability of the Company and its subsidiaries to, among other things, incur liens, engage in sale-leaseback transactions and engage in mergers and consolidations.

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As of December 31, 2025 and 2024, we were in compliance with all covenants and restrictions under our financing arrangements, in addition to our Leverage Ratio covenant, that may have a material effect on our Consolidated Financial Statements.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In order to secure underlying interest rates associated with senior note issuances, we entered into treasury lock transactions during 2024 to (i) fix the ten-year treasury rate on an aggregate notional amount of $ 900 million and (ii) to fix the thirty-year treasury rate on an aggregate notional amount of $ 650 million.

We designated our treasury locks as cash flow hedges.

These treasury rate locks were terminated contemporaneously with the related issuances of senior notes in November 2024, and we received cash of $ 35 million to settle the related assets.

The deferred gains are being amortized from accumulated other comprehensive (loss) income to interest expense over the ten-year and thirty-year lives of the related senior notes issuances using the effective interest method.

Additionally, although not material to our financial statements, we do periodically enter into natural gas hedges to mitigate against risk from fluctuation in natural gas prices.

As of December 31, 2024, our outstanding natural gas hedges were immaterial.

Our operating lease activities primarily consist of leases for real estate, landfills (as discussed further in Note 2), fleet vehicles and operating equipment.

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When the implicit interest rate is not readily available for our leases, we discount future cash flows of the remaining lease payments using the current interest rate that would be paid to borrow on collateralized debt over a similar term, or incremental borrowing rate, at the commencement date.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Supplemental balance sheet information for our leases as of December 31 is as follows (in millions):

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Total lease liabilities

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Operating lease expense was $ 427 million, $ 264 million and $ 189 million during 2025, 2024 and 2023, respectively, and is included in operating and selling, general and administrative expenses in our Consolidated Statements of Operations.

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Discounted lease liabilities

As of December 31, 2024, we entered into operating leases, primarily for real estate that have not yet commenced and therefore are not reflected in the table above, with future lease payments of $ 73 million.

These leases commence through 2025 and have lease terms up to 16 years .

Cash paid during 2025 for our operating and financing leases was $ 214 million and $ 101 million, respectively.

Cash paid during 2024 for our operating and financing leases was $ 103 million and $ 90 million, respectively.

During 2024, right-of-use assets obtained in exchange for lease obligations for our operating and financing leases were $ 74 million and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$ 118 million, respectively.

Increases in cash paid for operating leases was primarily driven by activity within our Healthcare Solutions segment.

During 2025, right-of-use assets obtained in exchange for lease obligations for our operating and financing leases were $ 132 million and $ 184 million, respectively.

During 2024, right-of-use assets obtained in exchange for lease obligations for our operating and financing leases were $ 74 million and $ 118 million, respectively.

As of December 31, 2025, the weighted average remaining lease terms of our operating and financing leases were approximately 12 years and 10 years , respectively.

The weighted average discount rates used to determine the lease liabilities as of December 31, 2025 for our operating and financing leases were approximately 4.4 % and 4.9 %, respectively.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income Tax Expense

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Income tax expense:

federal statutory income tax rate is reconciled to the effective income tax rate for the year ended December 31 as follows:

federal statutory income tax rate is reconciled to the effective income tax rate for the year ended December 31 as follows (in millions, except percentages):

Income tax expense at U.S.

federal statutory rate

State and local income taxes, net of federal income tax benefit

Adoption of new accounting standard

Federal tax credits

Taxing authority audit settlements and other tax adjustments

Tax impact of equity-based compensation transactions

Tax impact of impairments

Tax rate differential on foreign income

Effective income tax rate

State and local income tax, net of federal income tax effect (a)

Foreign tax effects

Investment tax credits

Low income housing tax credits

Other tax credits

Changes in valuation allowances

Nontaxable or nondeductible items

Changes in unrecognized tax benefits

Other adjustments

Proportional amortization method

(a) For the years ended December 31, 2025, 2024 and 2023, the states that make up a majority of the effect of the state and local income tax category include California, Florida, Illinois, New Jersey, New York and Oregon .

Additionally, Georgia is included in the year ended December 31, 2024.

The comparability of our income tax expense for the reported periods has been primarily affected by (i) federal tax credits;

(ii) variations in our income before income taxes;

(iii) impacts on adopting Accounting Standards Updates (“ASU”) 2023-02 and (iv) the tax implications of impairments.

(iii) impacts of adopting Accounting Standards Updates (“ASU”) 2023-02 and (iv) the tax implications of impairments.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For financial reporting purposes, income before income taxes by source for the year ended December 31 was as follows (in millions):

Income before income taxes by source for the year ended December 31 was as follows (in millions):

Income before income taxes

Renewable Natural Gas — Through our subsidiaries, including our WM Renewable Energy segment, we have invested in building landfill gas-to-energy facilities in the U.S.

Renewable Natural Gas — Through our Renewable Energy segment, we have invested in building landfill gas-to-energy facilities in the U.S.

and Canada that produce renewable electricity and RNG.

We expect our new RNG facilities to qualify for federal tax credits and to realize those credits through 2027 under Sections 48 and 45Z of the Internal Revenue Code.

We completed construction of five RNG facilities in 2024 and one RNG facility in 2023, resulting in a reduction to our income tax expense of $ 137 million and $ 8 million, respectively for investment tax credits under Section 48.

We expect our new RNG facilities to qualify for federal tax credits and to realize those credits through 2027 under Section 48 of the Internal Revenue Code.

We completed construction of seven RNG facilities in 2025, five RNG facilities in 2024 and one RNG facility in 2023, resulting in a reduction to our income tax expense of $ 184 million, $ 137 million and $ 8 million, respectively.

Low-Income Housing — We have significant financial interests in entities established to invest in and manage low-income housing properties.

In October 2024, we acquired an additional noncontrolling interest in a limited liability company established to invest in and manage low-income housing properties.

Total consideration for this investment is expected to be $ 426 million, comprised of a $ 316 million note payable, an initial cash payment of $ 33 million and $ 77 million of interest payments expected to be paid over the life of the investment.

At the time of the investment, we increased our investments in unconsolidated entities in our Consolidated Balance Sheet by $ 349 million, representing the principal balance of the note and the initial cash payment.

We support the operations of these entities in exchange for a pro-rata share of the tax credits they generate.

The low-income housing investments qualify for federal tax credits that we expect to realize through 2036 under Section 42 or Section 45D of the Internal Revenue Code.

As a result of adopting ASU 2023-02, we amortize our investments in these entities using the proportional amortization method.

The low-income housing investments qualify for federal tax credits that we expect to realize through 2036 under Section 42 and Section 45D of the Internal Revenue Code.

As a result of adopting ASU 2023-02 in 2024, we amortize our investments in these entities using the proportional amortization method.

Under the proportional amortization method, the equity investment is amortized in proportion to the income tax credits and other income tax benefits received.

The amortization expense and the income tax credits are required to be presented on a net basis in income tax expense on the Consolidated Statements of Operations.

Prior to fiscal year 2024, we accounted for our investments in these entities using the equity method of accounting, recognizing our share of each entity’s results of operations and other reductions in the value of our investments in equity in net income (losses) of unconsolidated entities, within our Consolidated Statements of Operations.

During the year ended December 31, 2024, we recognized additional income tax expense of $ 78 million, related to amortization under ASU 2023-02.

For the years ended December 31, 2023 and 2022, we recognized net losses of $ 66 million and $ 65 million, respectively, and a reduction in our income tax expense of $ 104 million, $ 108 million and $ 99 million in 2024, 2023 and 2022, respectively, primarily due to federal tax credits realized from these investments as well as the tax benefits from the pre-tax losses realized.

Prior to 2024, we accounted for our investments in these entities using the equity method of accounting, recognizing our share of each entity’s results of operations and other reductions in the value of our investments in equity in net income (loss) of unconsolidated entities, within our Consolidated Statements of Operations.

During the years ended December 31, 2025 and 2024, we recognized income tax expense of $ 96 million and $ 78 million, respectively, related to amortization under ASU 2023-02 and a reduction in our income tax expense of $ 137 million and $ 104 million, respectively, primarily due to federal tax credits realized from these investments.

For the year ended December 31, 2023, we recognized net losses of $ 66 million and a reduction in our income tax expense of $ 108 million primarily due to federal tax credits realized from these investments as well as the tax benefits from the pre-tax losses realized.

In addition, during the years ended December 31, 2025, 2024 and 2023, we recognized interest expense of $ 33 million, $ 24 million and $ 15 million, respectively, associated with our investments in low-income housing properties.

See Note 18 for additional information related to these unconsolidated variable interest entities.

See Notes 2 and 18 for additional information related to these unconsolidated variable interest entities.

Tax Implications of Impairments — During the years ended December 31, 2024 and 2023, we recognized additional income tax expense of $ 14 million and $ 50 million, respectively, due to non-cash impairment charges that were not deductible for tax purposes in the year of impairment.

The non-cash impairment charge recognized during 2022 was deductible for tax purposes.

The non-cash impairment charges recognized during 2025 were deductible for tax purposes.

See Note 11 for more information related to our impairment charges.

Tax Audits — We participate in the IRS’s Compliance Assurance Process, which means we work with the IRS throughout the year towards resolving any material issues prior to the filing of our annual tax return.

Any unresolved issues

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

as of the tax return filing date are subject to routine examination procedures.

Any unresolved issues as of the tax return filing date are subject to routine examination procedures.

In the fourth quarter of 2022, the Company received a notice of tax due for the 2017 tax year related to a remaining disagreement with the IRS.

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As of December 31, 2025 and 2024, the IRS deposit, net of reserve for uncertain tax positions, was classified as a component of other long-term assets in the Company’s Consolidated Balance Sheets.

In addition, we are in the examination phase of IRS audits for the 2023 and 2024 tax years and expect the audits to be completed within the next 15 months.

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In addition, we are under IRS audits for the 2024 and 2025 tax years and expect the audits to be completed within the next 15 months.

We are also currently undergoing audits by the Canada Revenue Agency for the 2021 tax year and various state and local jurisdictions for tax years that date back to 2018.

Tax Legislation — On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law.

We have evaluated the business tax provisions in the legislation, none of which had a material impact on our effective tax rate.

However, we had a beneficial impact to cash taxes related to bonus depreciation.

Deferred Tax Assets (Liabilities)

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As of December 31, 2025, we had $ 114 million of international net operating loss carry-forwards with expiration dates through 2034 and $ 2.2 billion of state net operating loss carry-forwards with expiration dates through 2045.

We also had $ 106 million of federal and foreign interest expense carry-forwards that do not expire, $ 40 million of foreign tax credit carry-forwards with expiration dates through 2033 and $ 6 million of state tax credit carry-forwards with expiration dates through 2034.

We also had $ 46 million of foreign interest expense carry-forwards that do not expire, $ 40 million of foreign tax credit carry-forwards with expiration dates through 2033 and $ 5 million of state tax credit carry-forwards with expiration dates through 2038.

We have established valuation allowances for uncertainties in realizing the benefit of certain tax loss and credit carry-forwards and other deferred tax assets.

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Balance as of December 31

These liabilities are included as a component of other long-term liabilities or as an offset to other long-term assets in our Consolidated Balance Sheets because the Company does not anticipate that settlement of the liabilities will require payment of cash within the next 12 months.

These liabilities are included as a component of other long-term liabilities or as an offset to other long-term assets in our Consolidated Balance Sheets.

As of December 31, 2025, we had $ 36 million of net unrecognized tax benefits that, if recognized in future periods, would impact our effective income tax rate.

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In connection with our acquisition of Stericycle in November 2024, we acquired a domestic defined contribution plan with attributes similar to our existing Waste Management 401(k) retirement savings plan.

In January 2026, the Stericycle 401(k) plan was merged into the Waste Management 401(k) retirement savings plan.

employees who are subject to collective bargaining agreements may participate in the 401(k) retirement savings plan under terms specified in their collective bargaining agreement.

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Further, certain of our Canadian subsidiaries sponsor defined benefit plans that are frozen to new participants.

As of December 31, 2024, the combined benefit obligation of these pension plans was $ 115 million supported by $ 117 million of combined plan assets, resulting in an aggregate plan asset for these plans of $ 2 million.

As of December 31, 2025, the combined benefit obligation of these pension plans was $ 118 million supported by $ 123 million of combined plan assets, resulting in a net plan asset for these plans of $ 5 million.

As of December 31,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2023, the combined benefit obligation of these pension plans was $ 119 million supported by $ 118 million of combined plan assets, resulting in an aggregate unfunded benefit obligation for these plans of $ 1 million.

2024, the combined benefit obligation of these pension plans was $ 115 million supported by $ 117 million of combined plan assets, resulting in a net plan asset for these plans of $ 2 million.

In addition, WM Holdings and certain of its subsidiaries provided post-retirement health care and other benefits to eligible retirees.

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The unfunded benefit obligation for these plans was $ 6 million and $ 7 million as of December 31, 2025 and 2024, respectively.

Our assets and accrued benefit liabilities for our defined benefit pension and other post-retirement plans are included as components of long-term other assets, accrued liabilities and long-term other liabilities in our Consolidated Balance Sheets.

Our assets and accrued benefit liabilities for our defined benefit pension and other post-retirement plans are included as components of other long-term assets, accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets.

Multiemployer Defined Benefit Pension Plans — We are a participating employer in a number of trustee-managed multiemployer defined benefit pension plans (“Multiemployer Pension Plans”) for employees who are covered by collective bargaining agreements.

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Critical and Declining

Midwest Operating Engineers Pension Trust Fund

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Red and Critical

Various dates

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Our exposure could increase if our insurers are unable to meet their commitments on a timely basis.

We have retained a significant portion of the risks related to our general liability, automobile liability and workers’ compensation claims programs.

We have retained a significant portion of the risks related to our health and welfare, general liability, automobile liability and workers’ compensation claims programs.

“General liability” refers to the self-insured portion of specific third-party claims made against us that may be covered under our commercial general liability insurance policy.

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We generally fulfill our minimum contractual obligations by disposing of volumes collected in the ordinary course of business at these disposal facilities.

● Other — We are party to certain multi-year service agreements, including various contracts to support our WM Renewable Energy segment, such as interconnection agreements, expiring at various dates through 2046 requiring minimum annual payments.

● Other — We are party to certain multi-year service agreements, including various contracts to support our Renewable Energy segment, such as interconnection agreements, expiring at various dates through 2046 requiring minimum annual payments.

As of December 31, 2025, our estimated minimum obligations associated with unconditional purchase obligations were $ 269 million in 2026, $ 234 million in 2027, $ 130 million in 2028, $ 78 million in 2029, $ 63 million in 2030 and $ 594 million thereafter.

We may also establish unconditional purchase obligations in conjunction with acquisitions or divestitures.

Our future minimum obligations under these outstanding purchase agreements are generally quantity driven and, as a result, our associated financial obligations are not fixed as of December 31, 2024.

For contracts that require us to

Our future minimum obligations under these outstanding purchase agreements are generally quantity driven

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

purchase minimum quantities of goods or services, we have estimated our future minimum obligations based on the current market values of the underlying products or services or contractually stated amounts.

and, as a result, our associated financial obligations are not fixed as of December 31, 2025.

For contracts that require us to purchase minimum quantities of goods or services, we have estimated our future minimum obligations based on the current market values of the underlying products or services or contractually stated amounts.

We currently expect the products and services provided by these agreements to continue to meet the needs of our ongoing operations.

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Royalty agreements that are non-cancelable and require fixed or minimum payments are included in our financing leases and other debt obligations in our Consolidated Balance Sheets as disclosed in Note 6.

Additionally, our Collection and Disposal and Corporate and Other businesses earn royalties from our WM Renewable Energy segment related to the transfer of landfill gas to our WM Renewable Energy segment from our active and closed landfills.

All royalties between our WM Renewable Energy segment and Collection and Disposal and Corporate and Other businesses are eliminated in consolidation.

Additionally, our Collection and Disposal and Corporate and Other businesses earn royalties from our Renewable Energy segment related to the transfer of landfill gas to our Renewable Energy segment from our active and closed landfills.

All royalties between our Renewable Energy segment and Collection and Disposal and Corporate and Other businesses are eliminated in consolidation.

Guarantees — We have entered into the following guarantee agreements associated with our operations:

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The costs associated with these liabilities can include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated with site investigation and clean-up.

As of December 31, 2024, we have been notified by the government that we are a PRP in connection with 74 locations listed on EPA Superfund National Priorities List (“NPL”).

As of December 31, 2025, we had been notified by the government that we are a PRP in connection with 75 locations listed on the EPA’s Superfund National Priorities List (“NPL”).

Of the 75 sites at which claims have been made against us, 14 are sites we own.

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We recorded a liability for MIMC’s estimated potential share of the EPA’s proposed remedy and related costs, although allocation of responsibility among the PRPs for the proposed remedy has not been established.

MIMC and IPC have continued to work on a remedial design to support the EPA’s proposed remedy;

however, in the first quarter of 2024, the EPA publicly issued a letter alleging that the remedial design had serious deficiencies.

MIMC and IPC engaged with the EPA throughout the year, and in November 2024, MIMC and IPC publicly issued a proposed revised full remedial design to address the EPA’s comments.

Due to increases in the estimated costs of the remedy to address the EPA’s comments, in

In November 2024, MIMC and IPC publicly issued a proposed revised full remedial design that was approved by the EPA in September 2025.

It is expected that the EPA will issue a Unilateral Administrative Order for the site cleanup in the first quarter of 2026.

The recorded liability as of December 31, 2025 and 2024, was approximately $ 100 million and $ 97 million, respectively.

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the fourth quarter of 2024 we recorded an additional $ 13 million liability for MIMC’s estimated potential share of such costs.

As a result, the recorded liability as of December 31, 2024 and 2023, was approximately $ 97 million and $ 85 million, respectively.

MIMC’s ultimate liability could be materially different from current estimates, including potential increases resulting from MIMC’s continued engagement with the EPA regarding a final remedial design for the site.

Refer to Notes 2 and 11 for additional information regarding the measurement of certain environmental liabilities.

Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings, or such proceedings are known to be contemplated, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, below a stated threshold.

In accordance with this SEC regulation, the Company uses a threshold of $ 1 million for purposes of determining whether disclosure of any such environmental proceedings is required.

Other than the matter discussed below involving Stericycle’s divested Domestic Environmental Solutions business, as of the date of this filing, we are not aware of any matters that are required to be disclosed pursuant to this standard.

We are not aware of any matters as of year end 2025 that are required to be disclosed pursuant to this standard.

From time to time, we are also named as defendants in personal injury and property damage lawsuits, including purported class actions, on the basis of having owned, operated or transported waste to a disposal facility that is alleged to have contaminated the environment or, in certain cases, on the basis of having conducted environmental remediation activities at sites.

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On November 4, 2024, the Company acquired Stericycle.

At the time of the acquisition, Stericycle was subject to the following legal matters, which are now legal matters of our wholly-owned subsidiary.

Stericycle entered into a deferred prosecution agreement (“DPA”) with the U.S.

Department of Justice (“DOJ”) and a cease-and-desist order with the SEC in 2022 relating to Stericycle’s compliance with the U.S.

Foreign Corrupt Practices Act and other anti-corruption laws with respect to now-divested operations in Latin America.

The DPA and cease-and-desist order required Stericycle to engage an independent compliance monitor for two years, which Stericycle satisfied.

Additionally, the DPA requires Stericycle to self-report any potential violations of the anti-corruption laws through November 2025.

If Stericycle remains in compliance with the DPA during the remainder of the term, deferred charges against Stericycle will be dismissed with prejudice.

We do not expect this matter to have any material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

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Stericycle has been cooperating with an investigation by the office of the U.S.

Attorney for the Southern District of New York (“SDNY”) and the EPA into Stericycle’s historical compliance with federal environmental statutes, including the Resource Conservation and Recovery Act, in connection with the collection, transportation and disposal of hazardous waste by Stericycle’s Domestic Environmental Solutions business unit that was divested in 2020.

Stericycle previously disclosed that it made an accrual in respect of this matter of approximately $ 10 million.

In January 2025, the parties agreed on settlement terms for this matter, which are within Stericycle’s prior accrual.

On January 17, 2025, the U.S.

Attorney filed a complaint in the U.S.

District Court for the SDNY, and on the same day, announced the settlement agreement with Stericycle that will resolve this matter upon court approval.

The settlement will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

At the time of the acquisition, Stericycle was subject to the following legal matter, which is now a legal matter of our wholly-owned subsidiary.

On February 11, 2020, Stericycle received an administrative subpoena from the U.S.

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Stericycle has been cooperating with the ongoing investigations, which are limited to the period of Stericycle’s historical operation and ownership of the ESOL Retail Controlled Substances Business from 2015 through

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While the ultimate disposition of this matter remains uncertain, we do not currently believe that it will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

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District Court for the Southern District of New York.

A lead plaintiff has been appointed and an amended complaint was filed in January 2023.

The amended complaint seeks damages on behalf of a putative class of secondary market purchasers of our senior notes with a special mandatory redemption feature issued in May 2019, asserting claims under the Securities Exchange Act based on alleged misrepresentations and omissions concerning the time for completion of our acquisition of Advanced Disposal.

Our motion to dismiss is pending and we will vigorously defend against this pending suit.

We believe any potential recovery by the plaintiffs, in excess of applicable deductibles, will be covered by insurance, and we do not believe that the eventual outcome of this suit will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

A lead plaintiff was appointed and an amended complaint was filed in January 2023.

The amended complaint sought damages on behalf of a putative class of secondary market purchasers of our senior notes with a special mandatory redemption feature issued in May 2019, asserting claims under the Securities Exchange Act of 1934, as amended, based on alleged misrepresentations and omissions concerning the anticipated time for completion of our acquisition of Advanced Disposal.

On December 18, 2025, the court granted final approval of a settlement that will be covered by insurance.

This settlement will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

WMI’s charter and bylaws provide that WMI shall indemnify against all liabilities and expenses, and upon request shall advance expenses to any person, who is subject to a pending or threatened proceeding because such person is or was a director or officer of the Company.

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and Canada, and certain parts of Europe.

As a result of some of these

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agreements, certain of our subsidiaries are participating employers in a number of Multiemployer Pension Plans for the covered employees.

As a result of some of these agreements, certain of our subsidiaries are participating employers in a number of Multiemployer Pension Plans for the covered employees.

Refer to Note 9 for additional information about our participation in Multiemployer Pension Plans considered individually significant.

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In the fourth quarter of 2024, the Company filed a claim for refund of the entire amount deposited with the IRS.

We expect to litigate any denial of the claim for refund.

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expect to litigate any denial of the claim for refund.

As of December 31, 2025 and 2024, the IRS deposit, net of reserve for uncertain tax positions, was classified as a component of other long-term assets in the Company’s Consolidated Balance Sheets.

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Asset impairments

During the year ended December 31, 2025, we recognized $ 248 million of net charges primarily consisting of (i) a $ 160 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;

(iii) a $ 16 million goodwill impairment charge related to a business engaged in oil recovery and sludge processing services reflected in Other Ancillary within our Collection and Disposal businesses and (iv) an $ 11 million negotiated payment for early termination of a contract in our Renewable Energy segment.

Refer to Note 5 for further information.

During the year ended December 31, 2024, we recognized $ 82 million of net charges primarily consisting of (i) 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 within Corporate and Other;

(ii) 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 acquisition of Stericycle and (iii) a $ 13 million charge pertaining to reserves for loss contingencies in our Corporate and Other to adjust an indirect wholly-owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a closed site, as discussed in Note 10 .

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During the year ended December 31, 2023, we recognized $ 243 million of net charges primarily consisting of (i) a $ 168 million goodwill impairment charge within our Recycling Processing and Sales segment related to a business engaged in accelerating film and plastic wrap recycling capabilities, with $ 22 million attributable to noncontrolling interests.

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(ii) $ 107 million of impairment charges within Corporate and Other for certain investments in waste diversion technology businesses and (iii) a $ 17 million charge within Corporate and Other to adjust an indirect wholly owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a closed site.

Refer to Notes 5 and 10 for further information.

During the year ended December 31, 2022, we recognized $ 62 million of net charges consisting of (i) $ 50 million of asset impairment charges primarily related to management’s decision to close two landfills within our East Tier and (ii) a $ 17 million charge pertaining to reserves for loss contingencies within Corporate and Other to adjust an indirect wholly owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a closed site, as discussed in Note 10.

These losses were partially offset by a $ 5 million gain from the divestiture of a collection and disposal business in our West Tier.

See Note 2 for additional information related to the accounting policy and analysis involved in identifying and calculating impairments.

See Note 19 for additional information related to the impact of impairments on the results of operations of our reportable segments.

Equity in Net Income (Losses) of Unconsolidated Entities

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Equity in Net Income (Loss) of Unconsolidated Entities

These financial statement impacts are largely related to our noncontrolling interests in entities established to invest in and manage low-income housing properties.

In 2024, we adopted ASU 2023-02, and, as a result, beginning in 2024, the amortization of these investments is recognized as a component of income tax expense.

We generate tax benefits, including tax credits, from the losses incurred from these investments.

The losses more than offset by the tax benefits generated by these investments as further discussed in Note 8.

We generate tax credits and other tax benefits from the losses incurred from these investments.

The losses are more than offset by the tax benefits generated by these investments as further discussed in Note 8.

Refer to Notes 8 and 18 for additional information related to these investments.

Refer to (Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net above for more information on the impairment of an equity method investment.

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Accumulated Other Comprehensive Income (Loss)

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(a) In 2023, we recognized a $ 23 million unrealized loss, net of a deferred tax benefit of $ 8 million, associated with our investment in redeemable preferred stock due to the estimated fair value being less than the remaining carrying value.

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Capital Stock, Dividends and Common Stock Repurchase Program

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We have 10 million shares of authorized preferred stock, $ 0.01 par value, none of which is currently outstanding.

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Our quarterly dividends have been declared by our Board of Directors.

Cash dividends declared and paid were $ 1,210 million in 2024, or $ 3.00 per common share, $ 1,136 million in 2023, or $ 2.80 per common share, and $ 1,077 million in 2022, or $ 2.60 per common share.

Cash dividends declared and paid were $ 1.3 billion in 2025, or $ 3.30 per common share, $ 1.2 billion in 2024, or $ 3.00 per common share, and $ 1.1 billion in 2023, or $ 2.80 per common share.

In December 2025, we announced that our Board of Directors expects to increase the quarterly dividend from $ 0.825 to $ 0.945 per share for dividends declared in 2026.

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Total repurchases (in millions)

(a) We executed and completed one ASR agreement during 2024 to repurchase $ 250 million of our common stock and received 1.2 million shares in connection with this ASR agreement.

(a) There were no common stock repurchases for the year ended December 31, 2025.

(b) We executed and completed one ASR agreement during 2024 to repurchase $ 250 million of our common stock and received 1.2 million shares in connection with this ASR agreement.

In February 2024, we also received 0.2 million shares pursuant to our October 2023 ASR agreement based on a final weighted average price of $ 175.29 .

We also repurchased an additional 0.1 million shares of our common stock in open market transactions in compliance with Rule 10b5-1 and Rule 10b 18 of the Securities Exchange Act of 1934 (“Exchange Act”) for $ 12 million, inclusive of per-share commission.

(b) We executed and completed three ASR agreements during 2023 to repurchase $ 950 million of our common stock and received 6.0 million shares in connection with these ASR agreements.

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(c) We executed and completed three ASR agreements during 2023 to repurchase $ 950 million of our common stock and received 6.0 million shares in connection with these ASR agreements.

Additionally, in October 2023, we executed an ASR agreement to repurchase $ 300 million of our common stock.

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We also repurchased an additional 0.3 million shares of our common stock in open market transactions in compliance with Rule 10b5-1 and Rule 10b 18 of the Securities Exchange Act of 1934 (“Exchange Act”) for $ 52 million, inclusive of per-share commissions.

The IRA, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

We reflected the applicable excise tax in treasury stock

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as part of the cost basis of the stock repurchased.

The above discussion of our common stock repurchases in 2023 is excluding the 1% excise tax.

(c) We executed and completed four ASR agreements during 2022 to repurchase $ 1.417 billion of our common stock and received 8.8 million shares in connection with these ASR agreements.

We also repurchased an additional 0.6 million shares of our common stock in open market transactions in compliance with Rule 10b5-1 and Rule 10b 18 of the Exchange Act for $ 83 million, inclusive of per-share commissions.

Shares repurchased in 2022 include 0.4 million shares of our common stock for $ 70 million pursuant to our December 2021 ASR agreement that completed in January 2022.

As a result of the Stericycle acquisition, the Company has temporarily suspended share repurchases.

We expect to resume share repurchase once the Company’s leverage returns to targeted levels, which is currently projected to be about 18 months after the November 2024 acquisition of Stericycle.

We announced in December 2025 that our Board of Directors has authorized up to $ 3.0 billion in future share repurchases, exclusive of fees, commissions and taxes.

This new authorization supersedes and replaces remaining authority under the prior Board of Directors’ authorization for share repurchases announced in December 2023.

The amount of future share repurchases executed under our Board of Directors’ authorization is determined in management’s discretion, based on various factors, including our leverage level, net earnings, financial condition and cash required for future business plans, growth and acquisitions.

Equity-Based Compensation

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After the January 2026 issuance of shares associated with the July to December 2025 offering period, 0.9 million shares remain available for issuance under the ESPP.

As a result of our ESPP, annual compensation expense increased by $ 11 million, or $ 8 million net of tax expense, for 2024, $ 14 million, or $ 11 million net of tax expense, for 2023 and $ 13 million, or $ 10 million net of tax expense, for 2022.

Annual compensation expense resulting from our ESPP was $ 13 million, or $ 10 million net of tax expense, for 2025, $ 11 million, or $ 8 million net of tax expense, for 2024 and $ 14 million, or $ 11 million net of tax expense, for 2023.

Employee Stock Incentive Plans

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We currently utilize treasury shares to meet the needs of our equity-based compensation programs.

Pursuant to the 2023 Plan, we can issue cash awards, stock options, stock appreciation rights, phantom stock and stock awards, including restricted stock, restricted stock units (“RSUs”) and performance share units (“PSUs”).

The terms and conditions of equity awards granted under the Incentive Plans are determined by the Management Development and Compensation Committee of our Board of Directors.

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The terms and conditions of equity awards granted under the Incentive Plans are determined by the Management Development and Compensation Committee of our Board of Directors.

The 2025 annual stock incentive plan awards granted to the Company’s senior leadership team, which generally includes the Company’s executive officers, included a combination of PSUs and stock options.

Awards granted to other eligible employees under the Incentive Plans included a combination of PSUs, RSUs and stock options in 2025.

The Company also periodically grants RSUs to employees working on key initiatives, in connection with new hires and promotions and to field and corporate managers.

Upon our acquisition of Stericycle on November 4, 2024, each outstanding award of Stericycle RSUs and PSUs held by an employee of Stericycle that continued their employment with us was assumed by us and converted into new RSU awards granted pursuant to the 2023 Plan (the “Replacement RSUs”).

The number of Replacement RSUs issued was calculated by multiplying the number of Stericycle RSUs and PSUs by a conversion factor of 0.289171 , which represents the $ 62.00 per share consideration for the Stericycle acquisition divided by the average of the closing sales price of a share or our common stock for each of the five consecutive trading days before the closing.

The Replacement RSUs pay out in shares of our common stock and are subject to substantially the same terms and conditions as were applicable to the corresponding Stericycle RSUs.

Stericycle RSUs and PSUs held by employees who did not continue their employment with us, and all employee stock options, were cancelled and converted into a right to receive cash immediately upon closing of the acquisition.

The Company also periodically grants equity awards, primarily consisting of RSUs, to employees working on key initiatives, in connection with new hires and promotions and to field and corporate managers.

Restricted Stock Units — A summary of our RSUs is presented in the table below (units in thousands):

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Compensation expense is only recognized for those awards that we expect to vest, which we estimate based upon an assessment of expected forfeitures.

Performance Share Units — Two types of PSUs are currently outstanding:

Performance Share Units — There are primarily two types of PSUs currently outstanding:

(i) PSUs for which payout is dependent on total shareholder return relative to the S&P 500 Index (“TSR PSUs”) and (ii) PSUs for which payout is dependent on the Company’s performance against pre-established adjusted cash flow metrics (“Cash Flow PSUs”).

Both types of PSUs are

Both types of PSUs are payable in shares of common stock after the end of a three-year performance period, when the Company’s financial performance for the entire performance period is reported, typically in the first half of the first quarter of the succeeding year.

At the end of the performance period, the number of shares awarded can range from 0 % to

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payable in shares of common stock after the end of a three-year performance period, when the Company’s financial performance for the entire performance period is reported, typically in the first half of the first quarter of the succeeding year.

At the end of the performance period, the number of shares awarded can range from 0 % to 200 % of the targeted amount, depending on the performance against the pre-established targets.

200 % of the targeted amount, depending on the performance against the pre-established targets.

A summary of our PSUs, at 100 % of the targeted amount, is presented in the table below (units in thousands):

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Accordingly, vesting information for such awards is not included in the table above as of December 31, 2025.

The “vested” PSUs are for the three-year performance period ended December 31, 2023, as achievement of performance results and corresponding vesting was determined in February 2024.

The “vested” PSUs are for the three-year performance period ended December 31, 2024, as achievement of performance results and corresponding vesting was determined in January 2025.

The performance of the Company’s common stock for purposes of the TSR PSUs and the Cash Flow PSUs exceeded maximum performance criteria.

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As of December 31, 2025, we had approximately 176,000 vested deferred units outstanding.

Stock Options — Stock option awards vest ratably in three annual increments, beginning on the first anniversary of the date of grant.

The exercise price of the options is the average of the high and low market value of our common stock

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Stock Options — Stock option awards vest ratably in three annual increments, beginning on the first anniversary of the date of grant.

The exercise price of the options is the average of the high and low market value of our common stock on the date of grant, and the options have a term of 10 years .

on the date of grant, and the options have a term of 10 years .

A summary of our stock options is presented in the table below (options in thousands):

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Non-Employee Director Plan

Our non-employee directors receive annual grants of shares of our common stock, generally payable in two equal installments, under the Incentive Plans described above.

Our non-employee directors receive annual grants of shares of our common stock under the Incentive Plans described above.

Each non-employee director is required to hold all shares issued pursuant to a Company stock award, after the sale of shares necessary to cover applicable taxes, until retirement or other termination of service as a director of the Company.

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Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding

Refer to the Consolidated Statements of Operations for net income attributable to Waste Management, Inc.

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Refer to the Consolidated Statements of Operations for net income attributable to Waste Management, Inc.

Fair Value Measurements

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We invest portions of our restricted trust funds in equity securities and we measure the fair value of these securities using quoted prices in active markets for identical assets.

Any changes in fair value of these securities related to unrealized gains and losses have been appropriately reflected as a component of other income (expense).

Any changes in fair value of these securities related to unrealized gains and losses have been appropriately reflected as a component of other, net in our Consolidated Statements of Operations.

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Acquisitions and Divestitures

Stericycle Acquisition

On June 3, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire all outstanding shares of Stericycle for $ 62.00 per share in cash, representing a total enterprise value of approximately $ 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 expands our offerings in the U.S., Canada and parts of Western Europe by providing RWCS and SID services that protect people and brands, promote health and well-being and safeguard the environment.

The transaction closed on November 4, 2024 and was funded using borrowings under our Term Credit Agreement, commercial paper program and available cash on hand.

Shortly thereafter, we repaid all outstanding borrowings under our Term Credit Agreement with net proceeds from our November 2024 issuance of $ 5.2 billion of senior notes.

We incurred acquisition and integration related costs of approximately $ 160 million, which were primarily classified as “Selling, general and administrative expenses.” The post-closing operating results of Stericycle have been included in our consolidated financial statements, within our new reportable WM Healthcare Solutions segment.

Post-closing through December 31, 2024, Stericycle recognized $ 403 million, $ 244 million and $ 155 million of operating revenue, operating expenses and selling, general and administrative expenses, respectively, which are net of intercompany transactions and included in our Consolidated Statements of Operations.

2025 Acquisitions

During the year ended December 31, 2025, we completed solid waste and recycling acquisitions primarily in Virginia, Maryland and Washington D.C.

for total consideration of $ 440 million.

Total consideration included $ 399 million in net cash paid and $ 41 million in non-cash consideration, primarily related to purchase price holdbacks.

In addition, we paid $ 9 million of holdbacks, of which $ 8 million related to prior year acquisitions.

Total consideration for our 2025 acquisitions was primarily allocated to $ 92 million of property and equipment, $ 45 million of other intangible assets, primarily customer relationships, and $ 315 million of goodwill.

Other intangible assets included $ 39 million of customer relationships and $ 6 million of covenants not-to-compete.

The goodwill related to our 2025 acquisitions was primarily a result of expected synergies from combining the acquired businesses with our existing operations and substantially all was tax deductible.

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2024 Acquisitions

In addition to the acquisition of Stericycle, during the year ended December 31, 2024, we completed solid waste and recycling acquisitions primarily in New York, Florida, North Carolina and Arizona for total consideration of $ 790 million.

Total consideration included $ 783 million in net cash paid and $ 7 million in non-cash consideration, primarily related to purchase price holdbacks.

In addition, we paid $ 23 million of holdbacks, of which $ 16 million related to prior year acquisitions.

Total consideration for our 2024 acquisitions, exclusive of Stericycle, was primarily allocated to $ 160 million of property and equipment, $ 79 million of other intangible assets and $ 588 million of goodwill.

Other intangible assets included $ 63 million of customer relationships and $ 14 million of covenants not-to-compete.

The goodwill related to our other 2024 acquisitions was primarily a result of expected synergies from combining the acquired businesses with our existing operations, a significant portion of which was tax deductible.

In 2024, we paid $ 41 million to acquire the remaining minority interests in a business engaged in accelerating film and plastic wrap recycling capabilities that is included in our Recycling Processing and Sales segment.

Stericycle Acquisition — On June 3, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire all outstanding shares of Stericycle for $ 62.00 per share in cash, representing a total enterprise value of approximately $ 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 transaction closed on November 4, 2024 and was funded using $ 5.2 billion of borrowings under a term credit agreement, our commercial paper program and available cash on hand.

Shortly thereafter, we repaid all outstanding borrowings under the term credit agreement with net proceeds from our November 2024 issuance of $ 5.2 billion of senior notes.

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 acquisition and integration related costs of $ 160 million, which were primarily classified as selling, general and administrative expenses.

The post-closing operating results of Stericycle have been included in our consolidated financial statements within our Healthcare Solutions segment.

Our consolidated financial statements have not been retroactively restated to include Stericycle’s historical financial position or results of operations.

The acquisition is accounted for as a business combination.

In accordance with the purchase method of accounting, the purchase price paid has been allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the excess of the purchase price over the net assets acquired recorded as goodwill.

We are in the process of valuing all of the assets and liabilities acquired in the acquisition, and, until we have completed our valuation process, there may be adjustments to our estimates of fair value and resulting preliminary purchase price allocation.

The acquisition was accounted for as a business combination.

In accordance with the acquisition method of accounting, the purchase price paid has been allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the excess of the purchase price over the net assets acquired recorded as goodwill.

The allocation of the purchase price was finalized in November 2025.

We used the following valuation techniques for the following significant accounts in which carrying value did not approximate fair value:

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(ii) customer relationship assets were valued using the multi-period excess earnings method with significant assumptions including projected revenue, attrition rate, operating expense, selling and general administrative expenses, and discount rate;

(iii) indefinite trade name assets were valued using the relief from royalty method with significant assumptions including revenue attributable to the trade names and royalty rates and (iv) permit assets were valued using the cost to recreate method with significant assumptions including costs required to obtain the permits and the opportunity costs if the permits were not in place on the acquisition date.

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including costs required to obtain the permits and the opportunity costs if the permits were not in place on the acquisition date.

The fair values for property and equipment and intangibles were based on significant inputs that are not observable in the market and thus represent a Level 3 measurement in the fair value hierarchy.

The WM Notes were valued using observable market prices which represent a Level 1 measurement in the fair value hierarchy.

Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date.

The areas of acquisition accounting that are not yet finalized primarily relate to (i) finalizing the review and valuation of trade names, permits, customer relationships, and certain property plant and equipment and other intangibles (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable and amortizable assets and (ii) finalizing the review and valuation of accounts receivable, accrued expenses, contingent liabilities, deferred taxes and goodwill (including key assumptions, inputs and estimates).

The Restricted Notes were valued using observable market prices which represent a Level 1 measurement in the fair value hierarchy.

Goodwill of $ 3.8 billion was calculated as the excess of the consideration paid over the net assets recognized and represents the future economic benefits expected to arise from other assets acquired that could not be individually identified and separately recognized and from synergies of the combination.

All of the goodwill was provisionally assigned to the WM Healthcare Solutions segment.

We have not yet completed the assignment of goodwill to our reporting units as of December 31, 2024.

Goodwill has been assigned to two reporting units within our Healthcare Solutions segment using a relative fair value allocation method.

Substantially all of the goodwill is not deductible for income tax purposes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table shows the preliminary purchase price allocation (in millions):

The following table shows the purchase price allocation as of the date acquired and adjustments made through November 4, 2025 (in millions):

November 4, 2024

November 4, 2025

Cash and cash equivalents

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Total purchase price

(a) Includes allowance for doubtful accounts of $ 130 million.

(a) Net of allowance for doubtful accounts of $ 144 million as of close of the measurement period.

See Note 2 for further discussion.

(b) Includes Stericycle’s Spain and Portugal subsidiaries.

See “Assets Held for Sale” under 2024 Divestitures for additional information.

The preliminary allocation of $ 3,536 million for other intangible assets includes $ 2,279 million for customer relationships with a weighted average amortization period of 15 years , $ 630 million for indefinite lived trade names, $ 319 million for indefinite lived permits, $ 162 million for definite lived trade names with a weighted average amortization period of 2.2 years, $ 141 million for ERP software with a weighted average amortization period of 4.7 years, and $ 5 million for developed technology with an amortization period of 17 years .

(b) Represents Stericycle’s Spain and Portugal subsidiaries.

See “Divestitures” for additional information.

The final allocation of $ 3.5 billion for other intangible assets includes $ 2.3 billion for customer relationships with a weighted average amortization period of 15 years , $ 610 million for indefinite lived trade names, $ 319 million for indefinite lived permits, $ 114 million for definite lived trade names with a weighted average amortization period of 2.9 years, $ 138 million for ERP software with a weighted average amortization period of 4.7 years and $ 5 million for developed technology with an amortization period of 17 years .

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The unaudited pro forma financial information in the table below summarizes the combined results of operations for Waste Management and Stericycle as though the companies had been combined as of January 1, 2023.

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• Income tax adjustments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as January 1, 2023 for the year ended December 31 (in millions):

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Net income attributable to Waste Management, Inc.

Other 2024 Acquisitions

In addition to Stericycle, during the year ended December 31, 2024, we completed solid waste and recycling acquisitions primarily in New York, Florida, North Carolina and Arizona for total consideration of $ 790 million.

Total consideration included $ 783 million in net cash paid and $ 7 million in non-cash consideration, primarily related to purchase price holdbacks.

In addition, we paid $ 23 million of holdbacks, of which $ 16 million related to prior year acquisitions.

Total consideration for our other 2024 acquisitions was primarily allocated to $ 160 million of property and equipment, $ 79 million of other intangible assets and $ 588 million of goodwill.

Other intangible assets included $ 63 million of customer relationships and $ 14 million of covenants not-to-compete.

The goodwill related to our other 2024 acquisitions was primarily a result of expected synergies from combining the acquired businesses with our existing operations a significant portion of which was tax deductible.

In 2022, we acquired a controlling interest in a business engaged in accelerating film and plastic wrap recycling capabilities that is included in our Recycling Processing and Sales segment.

In the fourth quarter of 2024, we acquired the remaining minority interests in this business for $ 41 million.

2023 Acquisitions

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The goodwill related to our 2023 acquisitions was primarily a result of expected synergies from combining the acquired businesses with our existing operations and substantially all was tax deductible.

2022 Acquisitions

During the year ended December 31, 2022, we acquired 13 businesses, including the acquisition of a controlling interest in a business intended to allow us to deliver new recycling capabilities for our customers and provide circular solutions for film and clear plastic wrap used commercially, such as plastic stretch wrap for pallets, furniture film, grocery bags and potentially shrink wrap around food and beverage containers.

Our other acquisitions in 2022 primarily related to our Collection and Disposal businesses.

Total consideration, net of cash acquired, for all acquisitions was $ 507 million, which included $ 372 million in net cash paid and $ 135 million in non-cash consideration, primarily related to purchase

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price holdbacks and the conversion of $ 67 million in secured convertible promissory notes receivable into equity of the acquired business.

In addition, we paid $ 5 million of holdbacks related to prior year acquisitions.

Total consideration for our 2022 acquisitions was primarily allocated to $ 138 million of property and equipment, $ 64 million of other intangible assets, $ 325 million of goodwill and $ 14 million of noncontrolling interests.

Other intangible assets included $ 45 million of customer relationships and $ 19 million of covenants not-to-compete.

Assets Held for Sale

Upon our acquisition of Stericycle in November 2024, WM Healthcare Solutions’ Spain and Portugal subsidiaries were classified as held for sale and included within the “Assets held for sale” and “Liabilities held for sale” line items in the preliminary allocation of purchase price.

We completed the sale of these assets on January 2, 2025.

2024 Divestitures

Proceeds from divestitures of businesses and other assets, net of cash divested, were $ 158 million, $ 78 million and $ 27 million in 2024, 2023 and 2022, respectively primarily the result of the sale of certain non-strategic assets.

Proceeds from divestitures of businesses and other assets, net of cash divested, were $ 121 million, $ 158 million and $ 78 million in 2025, 2024 and 2023, respectively.

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

As the fair value of consideration transferred was equal to the carrying value of the divested subsidiaries, no gain or loss was recognized.

The remaining 2025, 2024, and 2023 proceeds were from the sale of certain non-strategic assets.

Variable Interest Entities

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Low-Income Housing Properties

We do not consolidate our investments in entities established to manage low-income housing properties because we are not the primary beneficiary of these entities as we do not have the power to individually direct the activities of these entities.

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Our aggregate investment balance in these entities was $ 624 million and $ 707 million as of December 31, 2025 and 2024, respectively.

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Our interests in these trusts are accounted for as investments in unconsolidated entities and receivables.

These amounts are recorded in other receivables, investments in unconsolidated entities and long-term other assets in our Consolidated Balance Sheets, as appropriate.

These amounts are recorded in other receivables, investments in unconsolidated entities and other long-term assets in our Consolidated Balance Sheets, as appropriate.

We also reflect our share of the unrealized gains and losses on available-for-sale securities held by these trusts as a component of our accumulated other comprehensive income (loss).

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These trust funds are recorded in restricted funds in our Consolidated Balance Sheets.

Unrealized gains and losses on available-for-sale securities held by these trusts are recorded as a component of

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accumulated other comprehensive income (loss).

Unrealized gains and losses on available-for-sale securities held by these trusts are recorded as a component of accumulated other comprehensive income (loss).

These trusts had a fair value of $ 140 million and $ 128 million as of December 31, 2025 and 2024, respectively.

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(iii) Recycling Processing and Sales;

(iv) WM Renewable Energy and (v) WM Healthcare Solutions.

Our East and West Tiers along with Other Ancillary services that are not managed through our Tier segments, but that support our collection and disposal operations, form our “Collection and Disposal” businesses.

(iv) Renewable Energy and (v) Healthcare Solutions.

Our East and West Tiers, along with Other Ancillary services, form our “Collection and Disposal” businesses.

We also provide additional services not managed through our five reportable segments, which are presented as Corporate and Other.

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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 Western U.S., including the upper Midwest region and British Columbia, Canada.

Our West Tier primarily includes geographic areas located in the Western, 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.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Included within our Collection and Disposal businesses are landfills having (i) 19 third-party power generating facilities converting our landfill gas to fuel electricity generators;

(ii) 16 third-party RNG facilities processing landfill gas to be sold to natural gas suppliers and (iii) six 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, RINs, electricity and capacity, RECs and related environmental attributes from the 84 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active landfills, which is eliminated in consolidation.

(ii) 17 third-party RNG facilities processing landfill gas to be sold to natural gas suppliers and (iii) nine 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 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 86 landfill beneficial use renewable energy projects owned by Renewable Energy on our active landfills, which is eliminated in consolidation.

Recycling Processing and Sales

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Our Recycling Processing and Sales segment excludes the collection of recycled materials from our residential, commercial, and industrial customers which is included within our Collection and Disposal businesses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

WM Renewable Energy

Our WM Renewable Energy segment develops, operates and promotes projects for the beneficial use of landfill gas.

Renewable Energy

Our 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 which include RNG, electricity and capacity, heat and/or steam.

WM Renewable Energy also generates RINs under the RFS program, other credits under a variety of state programs associated with the use of RNG in our compressed natural gas fleet, and RECs associated with the production of electricity.

Renewable Energy converts landfill gas into several sources of renewable energy which include RNG, electricity and capacity, heat and/or steam.

Renewable Energy also generates RINs under the RFS program, other credits under a variety of state programs associated with the use of RNG in our compressed natural gas fleet and 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.

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For 17 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 the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes.

WM 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 seven third-party landfill beneficial gas use projects in return for service revenue.

Additionally, three projects are on third-party landfills.

The revenues from these facilities are primarily generated through the sale of RNG, RINs, electricity and capacity, heat and/or steam, RECs and related environmental attributes.

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, Renewable Energy operates and maintains six 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 54 additional third-party landfill beneficial gas use projects in the form of royalties.

WM Healthcare Solutions

Our WM Healthcare Solutions segment includes (i) RWCS, which provide compliance programs and collection, processing and disposal of regulated and specialized waste, including medical, pharmaceutical and hazardous waste and (ii) SID services, which provide for the collection of personal and confidential information for secure destruction and recycling of sorted office paper.

Healthcare Solutions

Our Healthcare Solutions segment includes (i) RWCS, which provide compliance programs and collection, processing and disposal of regulated and specialized waste, including medical, pharmaceutical and hazardous waste and (ii) SID

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 in the U.S., Canada, Ireland and the United Kingdom (“U.K.”).

SID services are provided to customers in the U.S., Canada, Belgium, France, Germany, Ireland, Luxembourg, the Netherlands and the U.K.

Our WM Healthcare Solutions customers are primarily in the following industries:

Our Healthcare Solutions customers are primarily in the following industries:

enterprise healthcare (i.e., hospitals, health systems and national and corporate healthcare), practices and care providers (i.e., physician offices, surgery centers, veterinary clinics, nursing and long-term care facilities, dental clinics, clinics and urgent care, dialysis centers and home health organizations), and pharmacy labs and research centers.

Our WM Healthcare Solutions businesses also provide services to airports and seaports, education institutions, funeral homes and crematories, government and military, banks and professional services, and other businesses.

While the WM Healthcare Solutions businesses manage large volumes of waste and other materials, the average volume per customer site is relatively small.

Our WM Healthcare Solutions 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 or type 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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, 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 361 leased and owned facilities worldwide with 69 autoclaves or other alternative medical waste treatment facilities, 18 medical waste incinerator facilities, 107 SID processing facilities, and 167 transfer stations.

Included within our WM Healthcare Solutions segment are 35 locations that are classified as held for sale as of December 31, 2024.

Our Healthcare Solutions businesses also provide services to airports and seaports, education institutions, funeral homes and crematories, government and military, banks and professional services, and other businesses.

While the Healthcare Solutions businesses manage large volumes of waste and other materials, the average volume per customer site is relatively small.

Our Healthcare Solutions 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 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 type and volume 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, 2025, our Healthcare Solutions segment operates out of approximately 307 leased and owned facilities worldwide with 51 autoclaves or other alternative medical waste treatment facilities, 17 medical waste incinerator facilities, 99 SID processing facilities, and 140 transfer stations.

Corporate and Other

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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) six third-party power generating facilities converting our landfill gas to fuel electricity generators;

Also, included within our Corporate and Other businesses closed sites are (i) five 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 15 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in consolidation.

Additionally, Corporate and Other benefits from a 15 % royalty from our 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 17 landfill beneficial use renewable energy projects owned by Renewable Energy on our closed sites, which is eliminated in consolidation.

Our chief operating decision maker (“CODM”) is the chief executive officer.

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Summarized financial information concerning our reportable segments as of December 31 and for the year then ended is shown in the following table (in millions):

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Depreciation,

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Other Ancillary

Collection and Disposal (e)(f)

Collection and Disposal(e)(f)(g)

Recycling Processing and Sales(e)

WM Renewable Energy (f)

WM Healthcare Solutions

Renewable Energy(f)

Healthcare Solutions(g)(h)

Corporate and Other(f)

Intercompany Elimination

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Intercompany Elimination(a)

Depreciation,

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Other Ancillary

Collection and Disposal (e)(f)

Recycling Processing and Sales (a)(e)

WM Renewable Energy (f)

Collection and Disposal(e)(f)(g)

Recycling Processing and Sales(e)

Renewable Energy(f)

Healthcare Solutions(g)(h)

Corporate and Other(f)

Intercompany Elimination

Intercompany Elimination(a)

Depreciation,

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Other Ancillary

Collection and Disposal (e)(f)

Collection and Disposal(e)(f)(g)

Recycling Processing and Sales(e)

WM Renewable Energy (f)

Renewable Energy(f)

Corporate and Other(f)

Intercompany Elimination

(a) For the year ended December 31, 2023 included within income from operations for our Recycling Processing and Sales segment is a $ 168 million goodwill impairment charge related to a business engaged in accelerating film and plastic wrap recycling capabilities, which was partially offset by the recognition of $ 46 million of income related to the reversal of a liability for contingent consideration associated with our investment in such business.

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

Intercompany Elimination(a)

(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.

(b) Other net expenses include restructuring expenses, (gain) loss from divestitures, and asset impairments and unusual items, net.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(c) For those items included in the determination of income from operations, the accounting policies of the segments are the same as those described in Note 2.

(d) Includes non-cash items.

Capital expenditures are reported in our reportable segments at the time they are recorded within the segments’ property and equipment balances and, therefore, include timing differences for amounts accrued but not yet paid.

(e) Certain fees related to the processing of recycled material we collect are included within our Collection and Disposal businesses.

Additionally, our Corporate and Other business recognizes construction work in progress for fleet purchases during the period.

(e) Certain fees related to the processing of recyclable material we collect are included within our Collection and Disposal businesses.

The amounts in income from operations for the years ended December 31, 2025, 2024 and 2023 are $ 75 million, $ 100 million and $ 61 million, respectively.

(f) WM Renewable Energy pays a 15 % intercompany royalty to our Collection and Disposal and Corporate and Other businesses for landfill gas.

The total amount of royalties in gross and intercompany operating revenues for the East Tier, West Tier, and Corporate and Other and in operating expenses for WM Renewable Energy for the years ended December 31, 2024, 2023 and 2022 are $ 48 million, $ 41 million and $ 47 million, respectively.

Prior to the fourth

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quarter of 2024, amounts related to intercompany royalty payments were adjusted through income from operations.

Prior periods have been recast to conform to current year presentation.

(g) Other net expenses include restructuring expenses, (gain) loss from divestitures, and asset impairments and unusual items, net.

(f) Renewable Energy pays a 15 % intercompany royalty to our Collection and Disposal and Corporate and Other businesses for landfill gas.

The total amount of royalties in gross and intercompany operating revenues for the East Tier, West Tier, and Corporate and Other and in operating expenses for Renewable Energy for the years ended December 31, 2025, 2024 and 2023 are $ 72 million, $ 48 million and $ 41 million, respectively.

(g) Our Collection and Disposal business records intercompany operating revenue for collection and disposal services provided to Healthcare Solutions.

The total amount of intercompany operating revenues reflected in our Collection and Disposal businesses and in operating expenses for Healthcare Solutions for the years ended December 31, 2025 and 2024, are $ 55 million and $ 8 million, respectively.

(h) In the third quarter of 2025, as a result of continued integration efforts and to enhance transparency and accountability, the Company began reflecting intra-segment activity within the Healthcare Solutions segment.

These charges were designed to measure profitability at more granular levels of the enterprise and to facilitate clearer financial accountability within operating units.

Accordingly, adjustments to the years ended December 31, 2025 and 2024 activity were made to properly reflect intra-segment activity for both periods.

Intra-segment operating revenues and operating expenses within Healthcare Solutions for the years ended December 31, 2025 and 2024 are $ 425 million and $ 58 million, respectively.

Total assets by reportable segment as of December 31 are as follows (in millions):

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Recycling Processing and Sales

WM Renewable Energy

WM Healthcare Solutions

Renewable Energy

Healthcare Solutions

Corporate and Other

Elimination of intercompany investments and advances

Total assets, per Consolidated Balance Sheet

Total assets, per Consolidated Balance Sheets

WASTE MANAGEMENT, INC.

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The mix of operating revenues from our major lines of business for the year ended December 31 are as follows (in millions):

Revenues(a)(b)

Years Ended December 31:

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Recycling Processing and Sales

WM Renewable Energy

WM Healthcare Solutions

Renewable Energy

Healthcare Solutions

Corporate and Other

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Recycling Processing and Sales

WM Renewable Energy

Renewable Energy

Healthcare Solutions

Corporate and Other

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Recycling Processing and Sales

WM Renewable Energy

Renewable Energy

Corporate and Other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(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.

(b) In the fourth quarter of 2024, the Company adjusted gross and intercompany operating revenues to reflect the 15 % royalty paid by WM Renewable Energy to Collection and Disposal and Corporate and Other businesses for the purchase of landfill gas.

There was no change to net operating revenues.

Prior periods were recast to conform to current year presentation.

Our financial and operating results may fluctuate for many reasons, including period-to-period changes in the relative contribution of revenue by each line of business, changes in commodity prices and general economic conditions.

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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.

Net operating revenues relating to operations for the year ended December 31 are as follows (in millions):

Western Europe and other (a) (b)

(a) 2024 primarily relates to the impact of operations from the U.K., Ireland, Belgium, France, Germany, Luxembourg, and the Netherlands as a result of the Stericycle acquisition.

Western Europe(a)(b)

(a) 2025 and 2024 primarily relates to the impact of operations from the U.K., Ireland, Belgium, France, Germany, Luxembourg, and the Netherlands as a result of the November 2024 Stericycle acquisition.

(b) 2023 primarily relates to an acquired smaller recycling-related operations in the Netherlands .

Property and equipment, net of accumulated depreciation and depletion, relating to operations as of December 31 are as follows (in millions):

Western Europe and other (a) (b)

(a) 2024 primarily relates to the impact of operations from the U.K., Ireland, Belgium, France, Germany, Luxembourg, and the Netherlands as a result of the Stericycle acquisition.

(b) 2023 primarily relates to an acquired smaller recycling-related operations in the Netherlands .

Western Europe and other(a)

(a) 2025 and 2024 asset balances primarily relate to Healthcare Solutions’ operations in the U.K., Ireland, Belgium, France, Germany, Luxembourg, and the Netherlands.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data