What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-29 compared with 2025-10-28 · 184 added, 268 removed, 212 unchanged (68% of the section changed)

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failure to obtain the results anticipated from strategic initiatives, investments, acquisitions or new lines of business;

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

failure to identify acquisition targets, consummate and integrate acquisitions, including our ability to integrate the acquisition of Stericycle, Inc.

(“Stericycle”) (which is now presented as our Healthcare Solutions segment) and achieve the anticipated benefits therefrom, including synergies;

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

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

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

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diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives;

exposure to different regulatory, legal, financial and economic conditions in international jurisdictions;

failure to attract, hire and retain key team members and a high quality workforce;

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macroeconomic conditions, geopolitical conflict and large-scale market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs;

increased competition;

pricing actions;

increased competition and pricing pressure;

impacts from international trade restrictions and tariffs;

competitive disposal alternatives, diversion of waste from landfills and declining waste volumes;

changing conditions in the healthcare industry;

changes in general economic conditions, capital markets or consumer trends;

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

weakness in general economic conditions and capital markets;

instability of financial institutions;

changing conditions in the healthcare industry;

adoption of new tax legislation;

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failure of technology to perform as expected;

failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations;

inability to adapt and manage the benefits and risks of artificial intelligence;

failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations;

negative outcomes of litigation or governmental proceedings, including those acquired through transactions;

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

and operational or management decisions or developments that result in impairment charges and other risks discussed in our filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

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We own or operate the largest network of landfills throughout the U.S.

In order to make disposal more practical for larger urban markets, where the distance to landfills is typically farther, we manage transfer stations that consolidate, compact and transport waste efficiently and economically.

In order to make disposal

more practical for larger urban markets, where the distance to landfills is typically farther, we manage transfer stations that consolidate, compact and transport waste efficiently and economically.

Our solid waste business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provide collection, transfer, disposal, recycling and resource recovery services.

Through our subsidiaries, including our Waste Management Renewable Energy (“WM Renewable Energy”) segment, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the U.S.

Through our 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.

Additionally, we are a leading recycler in the U.S.

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.

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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 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.

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

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

Stericycle Acquisition

On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle, Inc., a provider of regulated waste and compliance services and secure information destruction services that protect people and brands, promote health and well-being and safeguard the environment.

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

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

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

Our fundamental strategy has not changed;

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Simultaneously, we believe that investing in automation to improve processes and drive operational efficiency combined with a focus on the cost to serve our customers will yield an attractive profit margin and enhanced service quality.

We are furthering our strategy of focused differentiation and continuous improvement beyond our traditional waste operations through our sustainability growth strategy that includes significant investments in our WM Renewable Energy and Recycling Processing and Sales segments, while increasing automation and reducing labor dependency.

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

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

waste and environmental solutions.

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

We have furthered our strategy of focused differentiation and continuous improvement beyond our traditional waste operations through our sustainability growth strategy, which has positioned us to capitalize on the significant investments made in our Renewable Energy and Recycling Processing and Sales segments, while increasing automation and reducing labor dependency.

In addition, our Healthcare Solutions segment provides a complementary business platform in medical waste, a sector with attractive near- and long-term growth dynamics and in secure information destruction services to further our leading suite of comprehensive waste and environmental solutions.

Furthermore, we continue to evaluate and plan to pursue emerging diversion technologies that may generate additional value.

Business Environment

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As companies, individuals and communities look for ways to be more sustainable, we promote our comprehensive services that go beyond our core business of collecting and disposing of waste in order to meet their needs.

This includes expanding traditional recycling services, increasing organics collection and processing, providing regulated waste and compliance services and secure information destruction and expanding our renewable energy projects to meet the evolving needs of our diverse customer base.

This includes expanding traditional recycling services, increasing organics collection and processing, providing medical waste services and expanding our renewable energy projects to meet the evolving needs of our diverse customer base.

As North America’s leading provider of comprehensive environmental solutions, we are taking big, bold steps to catalyze positive change – change that will impact our Company as well as the communities we serve.

Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 2025 Sustainability Report, providing details on our sustainability-related performance and outlining progress towards our 2030 sustainability goals.

The Sustainability Report conveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company’s Recycling Processing and Sales and WM Renewable Energy segments.

The 2025 Sustainability Report conveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the

expansion of the Company’s Recycling Processing and Sales and Renewable Energy segments.

The information in this report can be found at sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.

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Significant components of our operating expenses vary directly as we experience changes in revenue due to volume and inflation.

Volume changes can fluctuate significantly by line of business and volume changes in higher margin businesses can impact key financial metrics.

Volume changes can fluctuate significantly by line of business and can impact key financial metrics.

We must dynamically manage our cost structure in response to volume changes and cost inflation.

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We have made significant progress in executing this technology enablement strategy to automate and optimize certain elements of our service delivery model.

The key benefits are reduced labor dependency for certain high-turnover positions, particularly in customer experience, recycling and residential collection, while further elevating our customer self-service through digitalization and implementation of technologies to enhance the safety, reliability and efficiency within our collection operations.

We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments.

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

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

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

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

The key benefits are reduced labor dependency on certain high-turnover jobs, particularly in customer experience, recycling and residential collection, while further elevating our customer self-service through digitalization and implementation of technologies to enhance the safety, reliability and efficiency within our collection operations.

During the quarter ended March 31, 2026, we continued to experience decreases in market prices for recycled commodities when compared to the prior year quarter.

Additionally, commodity price fluctuations from the prior year quarter had an unfavorable impact on the Renewable Energy segment.

We continue to take proactive steps to adjust our business models to protect against the down side risk of changes in commodity prices.

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

We take proactive steps to recover and mitigate inflationary cost pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity and investments in technology to automate certain aspects of our business.

We remain committed to putting our people first to ensure that they are well positioned to execute our daily operations diligently and safely.

We remain focused on delivering outstanding customer service, managing our variable costs with changing volumes and investing in technology that will enhance our customers’ experience and provide operating efficiencies intended to reduce our cost to serve our customers.

Current Quarter Financial Results

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

During the first quarter of 2026, we continued to focus on our priorities to advance our strategy – growing the core business by focusing on customer lifetime value;

delivering operational excellence and capitalizing on network advantages;

capturing and enhancing returns from our investments in our Recycling Processing and Sales and Renewable Energy segments and driving accretive growth as we take our Healthcare Solutions segment from integration to scalable growth.

We continue to invest in our people through paying a competitive market wage, investing in our digital platform and providing training for our team members.

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

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

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

During the period, we also allocated $729 million of available cash to our shareholders through dividends and common stock repurchases.

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

● Revenues of $6,227 million compared to $6,018 million in the prior year period, an increase of $209 million, or 3.5%.

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

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

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

The increase is primarily due to (i) higher yield in our Collection and Disposal business;

(ii) incremental volumes from our Renewable Energy segment primarily due to contributions from growth projects and (iii) our recent acquisitions.

These increases are partially offset by lower collection volumes and a reduction in single-stream and brokerage recycled commodity prices;

● Operating expenses of $3,694 million, or 59.3% of revenues, compared to $3,612 million, or 60.0% of revenues, in the prior year period.

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

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

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

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

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

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

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

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

The $82 million increase is primarily due to (i) annual wage increases and higher employee medical costs;

(ii) higher fuel prices and (iii) growth in our Renewable Energy business.

These increases were offset by (i) lower costs driven by lower collection volumes and (ii) continued efficiency and cost control initiatives in our Collection and Disposal business.

Although total operating expenses increased, costs as a percent of revenue improved due to continued cost discipline;

● Selling, general and administrative expenses of $707 million, or 11.4% of revenues, compared to $687 million, or 11.4% of revenues, in the prior year period.

The $20 million increase is primarily due to increases in (i) technology spend;

(ii) bad debt expense and (iii) labor costs;

● Income from operations of $1,113 million, or 17.9% of revenues, compared to $1,013 million, or 16.8% of revenues, in the prior year period.

The $100 million increase is primarily due to (i) growth in our Collection and Disposal business;

(ii) contributions from increased volumes in our Renewable Energy segment and (iii) a gain from a business divestiture in our West Tier.

These increases were partially offset by higher annual incentive compensation, employee wage increases and higher technology spend;

● Net income attributable to Waste Management, Inc.

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

The $157 million decrease was primarily driven

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

These decreases were partially offset by lower income tax expense;

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

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

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

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

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

of $723 million, or $1.79 per diluted share, compared to $637 million, or $1.58 per diluted share, in the prior year period.

The $86 million increase is primarily due to the increase in income from operations, discussed above;

● Net cash provided by operating activities of $1,501 million compared to $1,208 million in the prior year period.

The $293 million increase in net cash provided by operating activities is primarily due to (i) higher earnings, particularly driven by our Collection and Disposal business;

(ii) favorable changes in working capital, net of effects from acquisitions and divestitures and (iii) lower annual incentive compensation payments;

● Free cash flow of $920 million compared to $475 million in the prior year period.

The $445 million increase in free cash flow is primarily due to the increase in net cash provided by operating activities described above as well as a decrease in capital spending driven by (i) lower spend on collection vehicles and (ii) anticipated reductions in capital investment in our sustainability growth projects due to our transition from peak construction of this portfolio into a period of harvesting returns.

These changes are partially offset by lower proceeds from the sale of certain non-strategic assets.

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

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Operating Revenues

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

Revenues (a)(b)

Three Months Ended September 30:

Other collection

Total collection

Total Collection and Disposal

Recycling Processing and Sales

WM Renewable Energy

WM Healthcare Solutions

Corporate and Other

Other collection

Total collection

Total Collection and Disposal

Recycling Processing and Sales

WM Renewable Energy

Corporate and Other

Revenues (a)(b)

Nine Months Ended September 30:

The mix of operating revenues for the three months ended March 31 are as follows (in millions):

Other collection

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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 (b)

Corporate and Other

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

(b) Beginning with the 2024 Form 10-K, the Company adjusted gross and intercompany operating revenues to reflect the 15% royalty paid by WM Renewable Energy to our Collection and Disposal and Corporate and Other businesses for the purchase of landfill gas.

There was no change to net operating revenues.

Prior periods have been recast to conform to current presentation.

(b) 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 three months ended March 31, 2025 were made to properly reflect intra-segment activity for the period.

Intra-segment operating revenues and operating expenses within Healthcare Solutions for the three months ended March 31, 2026 and 2025 are $101 million and $94 million, respectively.

The following table provides details associated with the period-to-period change in revenues and average yield (dollars in millions):

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Three Months Ended

September 30, 2025 vs.

Period-to-Period Change for the

Nine Months Ended

September 30, 2025 vs.

March 31, 2026 vs.

Collection and Disposal

Recycling Processing and Sales and WM Renewable Energy (c)

Recycling Processing and Sales and Renewable Energy (c)

Energy surcharge and mandated fees

Total average yield (d)

Total average yield

Healthcare Solutions (e)

Internal revenue growth

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(b) Calculated by dividing the increase or decrease for the current year period by the prior year period’s total Company revenues adjusted to exclude the impacts of divestitures for the current year period.

(c) Includes combined impact of commodity price variability in both our Recycling Processing and Sales and WM Renewable Energy segments, as well as changes in certain recycling fees charged by our collection and disposal operations.

(d) The amounts reported herein represent the changes in our revenues attributable to average yield for the total Company.

(e) Includes activities from our Corporate and Other businesses.

The following provides further details about our period-to-period change in revenues:

(c) Includes combined impact of commodity price variability in both our Recycling Processing and Sales and Renewable Energy segments, as well as changes in certain recycling fees charged by our collection and disposal operations.

(d) Includes activities from our Corporate and Other businesses.

(e) The amounts reported herein represent the change in our revenues from the combined impacts of yield and volume attributable to our Healthcare Solutions business.

The significant items affecting revenues during the first quarter of 2026, as compared to the prior year period, are summarized below:

Average Yield

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Period-to-Period Change for the

Three Months Ended

Nine Months Ended

September 30, 2025 vs.

March 31, 2026 vs.

Total collection

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Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business.

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

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

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

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

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

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

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

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

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

The mandated fees are primarily related to fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations, particularly in our West Tier.

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

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

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

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

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

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

We continue to see yield growth in our landfill business primarily driven by municipal solid waste, which achieved yield of 6.9% for the first quarter of 2026.

Recycling Processing and Sales and Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $28 million as compared to the prior year period.

Average market prices for single-stream recycled commodities declined approximately 27% in the first quarter of 2026 as compared to the prior year period.

Revenues attributable to yield in our Renewable Energy segment decreased $7 million as compared to the prior year period primarily due to lower RNG pricing, partially offset by higher electricity and natural gas prices.

While there may be short-term fluctuations in our commodity-driven businesses as prices change, we believe that our business models and processes appropriately mitigate the downside risk of changes in commodity prices.

Energy Surcharge and Mandated Fees — These fees increased $20 million as compared to the prior year period.

The increase in energy surcharge revenues is primarily due to an increase of approximately 12% in market prices for diesel fuel as compared to the prior year period.

Our revenues from volume (excluding volumes from acquisitions and divestitures, as well as Healthcare Solutions) increased $10 million, or 0.2% as compared to the prior year period.

Volume increased in both our Recycling Processing Sales and our Renewable Energy segments primarily due to contributions from growth projects.

These volume increases were largely offset by volume declines in our collection business primarily due to harsh winter weather in the current period as well as our intentional shedding of lower-margin residential business.

Additionally, special waste landfill volumes were down compared to the prior year period, which benefited from wildfire cleanup activities in the West Tier.

Healthcare Solutions

Revenues from our Healthcare Solutions business decreased $13 million, or 0.2% as compared to the prior year period as contributions from pricing activities were more than offset by declines in volumes.

Acquisitions and Divestitures

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

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

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

Acquisitions and divestitures resulted in a net increase in revenues of $31 million, or 0.6%, as compared to the prior year period primarily due to 2025 investments in tuck-in collection and disposal businesses.

Operating Expenses

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

Three Months Ended

Nine Months Ended

September 30,

The following table summarizes the major components of our operating expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

Labor and related benefits

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Risk management

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

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

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

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

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

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

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

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

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

(ii) residential collection efficiency improvements;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our operating expenses increased as compared to the prior year period, primarily due to (i) annual employee wage increases and higher employee medical costs;

(ii) higher fuel prices and (iii) growth in our Renewable Energy business.

These increases were partially offset by (i) lower costs driven by lower collection volumes, as discussed above and (ii) continued operating efficiency and cost control initiatives in our Collection and Disposal business.

Although total operating expenses increased, costs as a percent of revenue improved due to continued cost discipline.

The significant items affecting operating expenses during the first quarter of 2026, as compared to the prior year period, are summarized below:

Labor and Related Benefits — The increase in labor and related benefits costs is primarily due to annual employee wage increases and an increase in employee medical costs as compared with the prior year period.

These increases were partially offset by (i) lower costs driven by lower collection volumes as discussed above;

(ii) collection efficiency improvements and (iii) improved driver retention.

Transfer and Disposal Costs — The decrease in transfer and disposal costs is primarily due to lower transfer and disposal volumes, caused by harsh winter weather during the current period, and lower residential volumes attributable to intentional shedding of lower-margin contracts.

Maintenance and Repairs — The slight decrease in maintenance and repairs costs is primarily due to reduced demand for third-party services driven by fleet and operational optimization.

The decrease was partially offset by annual wage increases and increased headcount of our maintenance technicians.

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

Cost of Goods Sold — The decrease in cost of goods sold is primarily due to 27% decrease in average market prices for single-stream recycling commodities.

This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought on line during 2025.

Fuel — The increase in fuel costs is primarily due to an increase of approximately 12% and 6% in average market prices for diesel and CNG fuel, respectively.

This increase was partially offset by reduced fuel consumption due to declines in collection volumes.

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

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

Risk Management — The slight decrease in risk management costs is primarily due to lower auto and property premium costs as compared to the prior year period.

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

Selling, General and Administrative Expenses

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

Three Months Ended

Nine Months Ended

September 30,

The following table summarizes the major components of our selling, general and administrative expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

Labor and related benefits

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Provision for bad debts

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

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

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

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

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

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

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

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

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

Depreciation, Depletion and Amortization Expenses

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

Three Months Ended

Nine Months Ended

September 30,

Selling, general and administrative expenses increased from the prior year period primarily due to increases in (i) technology spend;

(ii) bad debt expenses and (iii) labor costs.

The significant items affecting selling, general and administrative expenses during the first quarter of 2026, as compared to the prior year period, are summarized below:

Labor and Related Benefits — The increase in labor and related benefits costs is primarily due to annual employee wage increases and higher annual incentive compensation costs.

These increases were partially offset by a reduction in workforce as we achieved synergies from our acquisitions, particularly Stericycle.

Professional Fees — The decrease in professional fees is primarily due to non-recurring consulting costs incurred in the prior year period to support Stericycle’s integration.

Provision for Bad Debts —The increase in provision for bad debts is primarily due to a benefit recorded in the prior year period on specific accounts as well as a favorable credit reserve adjustment booked in the prior year period in our Collection and Disposal business.

Other — The increase in other expenses is primarily due to increased technology spend to support strategic initiatives.

Depreciation, Depletion, Amortization and Accretion Expenses

The following table summarizes the components of our depreciation, depletion, amortization and accretion expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

Depreciation of tangible property and equipment

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Amortization of intangible assets

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

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

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

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

Restructuring

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

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

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

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

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

in oil recovery and sludge processing services.

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

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

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

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

Interest accretion on landfill and environmental remediation liabilities

The increase in depreciation of tangible property and equipment is primarily due to investments in capital assets placed in service during 2025, particularly within our sustainability businesses.

The increase in depletion of landfill airspace is primarily due to changes in rates from revisions in landfill estimates within our East Tier.

The decrease in amortization of intangible assets is primarily due to the conclusion of amortization related to customer relationships and other intangibles acquired as a result of acquisitions during prior years within our East Tier.

The increase in interest accretion on landfill and environmental remediation liabilities is primarily due to revisions in landfill estimates.

Income from Operations

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

Three Months Ended

Nine Months Ended

September 30,

Period-to-Period

September 30,

The following table summarizes income from operations for our reportable segments for the three months ended March 31 (dollars in millions):

Period-to-Period

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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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* Percentage change does not provide a meaningful comparison.

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

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

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

(iii) contributions from our strategic acquisitions;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The significant items affecting income from operations for our segments during the first quarter of 2026, as compared to the prior year period, are summarized below:

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

(ii) actions to improve efficiency and the operating costs incurred to serve our customers and (iii) a gain from a business divestiture in our West Tier.

These increases were partially offset by declines in volumes primarily due to harsh winter weather.

Recycling Processing and Sales — Income from operations in our Recycling Processing and Sales segment remained steady due to lower expenses from the suspension of a business engaged in accelerating plastic film and wrap recycling capabilities during 2025, and increased volumes and reduced costs from the automation of our recycling facilities as well as investments in new facilities, mostly offset by declines in commodity prices.

Renewable Energy — Income from operations in our Renewable Energy segment increased primarily due to higher volumes driven by the completion of projects that increase the beneficial use of landfill gas sold to third parties.

This increase was partially offset by a decline in RINs pricing.

Healthcare Solutions — The loss from operations in our Healthcare Solutions segment improved primarily due to non-recurring integration costs incurred during the prior year period along with lower costs in the current year from the realization of synergies.

Corporate and Other — The loss from operations in Corporate and Other increased primarily due to (i) higher health and welfare expenses, driven by a comparison to an unusually favorable first quarter in 2025 resulting from workforce

mix changes from a large acquisition and improved vendor economics;

(ii) increased technology support costs to support strategic initiatives;

(iii) higher annual incentive compensation and (iv) annual wage increases.

Interest Expense, Net

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

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

Our interest expense, net was $225 million and $232 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease is primarily due to a decrease in our average debt balances period over period.

Income Tax Expense

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

Our income tax expense and effective income tax rates were $168 million, or 18.9%, and $151 million, or 19.2%, for the three months ended March 31, 2026 and 2025, respectively.

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

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

We are currently evaluating several business tax provisions in the legislation, none of which are expected to have a material impact on our effective tax rate.

However, the permanent reinstatement of 100% bonus depreciation is expected to reduce our cash taxes by approximately $125 million in 2025.

The Inflation Reduction Act of 2022 (“IRA”) contains several tax-related provisions, including with respect to (i) alternative fuel tax credits;

Tax Legislation — The Inflation Reduction Act of 2022 (“IRA”) contains several tax-related provisions, including with respect to (i) alternative fuel tax credits;

(ii) tax incentives for investments in renewable energy production, carbon capture and other climate actions and (iii) the overall measurement of corporate income taxes.

Given the complexity and uncertainty around the applicability of the legislation to our specific facts and circumstances, we continue to analyze the IRA provisions to identify and quantify potential opportunities and applicable benefits included in the legislation.

The provisions of the IRA concerning investment tax credits are expected to generate a cumulative benefit of approximately $400 million, $145 million of which was recognized in 2023 and 2024 with the remainder anticipated to be realized in 2025 and 2026.

The expected benefit from the investment tax credit for 2025 and 2026 is dependent on a number of estimates and assumptions, including the timing of project completion.

Additionally, we expect that the production tax credit incentives for investments in renewable energy and carbon capture, as expanded by the IRA, could result in an incremental benefit to the Company, although at this time, the anticipated amount of such benefit has not been quantified due, in part, to the lack of regulatory guidance.

We secured approximately $60 million of annual pre-tax benefit through the provisions of the IRA related to alternative fuel tax credits (recorded as a reduction in our operating expense) from tax credits in 2024.

The alternative fuel credit expired at the end of 2024 and will not provide any future benefit to the Company without further legislative action.

With respect to the Section 48 investment tax credit, we expect our cumulative benefit to be between $400 million and $425 million, $309 million of which was recognized between 2023 and 2025 with the remainder anticipated to be realized in 2026 and 2027 .

Finally, in February 2026 the Internal Revenue Service issued proposed regulatory guidance clarifying qualification for the Section 45Z clean fuel production tax credit.

We expect our cumulative benefit from this clean fuel production tax credit to be as much as $150 million through 2029.

This expected benefit is dependent on a number of estimates and assumptions, which we continue to monitor and factor into our credit realization expectations.

Liquidity and Capital Resources

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

September 30,

Cash and cash equivalents

Restricted funds and other:

Restricted funds:

Insurance reserves

Final capping, closure, post-closure and environmental remediation funds

Total restricted funds and other (a)

Total restricted funds (a)

Current portion

Long-term portion

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

Debt — As of September 30, 2025, we had approximately $3.9 billion of debt maturing within the next 12 months, including (i) $1.5 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities;

(ii) $861 million of short-term borrowings under our commercial paper program (net of related discount on issuance);

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

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

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

As of September 30, 2025, we have classified $3.0 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S.

(a) As of March 31, 2026 and December 31, 2025, $100 million and $109 million, respectively, of these account balances were included in other current assets in our Condensed Consolidated Balance Sheets.

Debt — As of March 31, 2026, 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 their scheduled maturities;

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

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

(iv) $359 million of 2.6% Canadian senior notes that mature in September 2026 and (v) $201 million of other debt with scheduled maturities within the next 12 months.

As of March 31, 2026, we have classified $3.1 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.

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Guarantor Financial Information

WM Holdings has fully and unconditionally guaranteed all of WMI’s senior indebtedness.

WM Holdings, Inc.

(“WM Holdings”) has fully and unconditionally guaranteed all of Waste Management, Inc.’s (“WMI’s”) senior indebtedness.

WMI has fully and unconditionally guaranteed all of WM Holdings’ senior indebtedness.

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

September 30,

March 31, 2026

December 31, 2025

Balance Sheet Information:

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Other noncurrent liabilities

Nine Months Ended

September 30, 2025

Three Months Ended

March 31, 2026

Income Statement Information:

1 unchanged sentence

Summary of Cash Flow Activity

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

The following is a summary of our cash flows for the three months ended March 31 (in millions):

Net cash provided by operating activities

1 unchanged sentence

Net cash used in financing activities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Net Cash Provided by Operating Activities — Our operating cash flows increased by $293 million for the three months ended March 31, 2026, as compared to the prior year period, primarily due to (i) higher earnings, particularly driven by our Collection and Disposal business;

(ii) favorable changes in working capital, net of effects from acquisitions and divestitures and (iii) lower annual incentive compensation payments.

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

● Capital Expenditures — We used $650 million and $831 million for capital expenditures during the three months ended March 31, 2026 and 2025, respectively.

The decrease in capital spending is primarily driven by (i) lower spend on collection vehicles and (ii) anticipated reductions in capital investments in our sustainability growth projects due to our transition from peak construction of this portfolio into a period of harvesting returns.

● Divestitures — Proceeds from divestitures of businesses and other assets, net of cash divested were $69 million and $98 million for the three months ended March 31, 2026 and 2025, respectively.

Proceeds in 2026 primarily related to a business divestiture in our West Tier.

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

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

During the three months ended March 31, 2026 and 2025, we used $146 million and $92 million, respectively, of cash from restricted cash and cash equivalents to invest in available-for-sale securities.

Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash flows for the three months ended March 31, 2026 and 2025 are summarized below:

● Debt Borrowings and Repayments — The following summarizes our cash borrowings and repayments of debt for the three months ended March 31 (in millions):

Commercial paper

Tax-exempt bonds

Commercial paper

Tax-exempt bonds

Net cash borrowings (repayments)

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

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

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

We expect to resume share repurchases once the Company’s leverage returns to targeted levels, which is currently projected to be the second quarter of 2026.

● Common Stock Repurchase Program — During the three months ended March 31, 2026, we paid cash of $344 million for common stock repurchases.

There were no share repurchases made in 2025.

See Note 10 to the Condensed Consolidated Financial Statements for additional information about our share repurchase activity.

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

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

We paid cash dividends of $385 million and $336 million during the three months ended March 31, 2026 and 2025, respectively.

The increase in dividend payments is primarily due to our quarterly per share dividend increasing from $0.825 in 2025 to $0.945 in 2026.

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

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

Three Months Ended

Nine Months Ended

September 30,

Our calculation of free cash flow and reconciliation to net cash provided by operating activities for the three months ended March 31, 2026 and 2025 is shown in the table below (in millions) and may not be calculated the same as similarly-titled measures presented by other companies:

Net cash provided by operating activities

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Free cash flow

(a) These growth investments are intended to further our sustainability leadership position by increasing recycling volumes and growing renewable natural gas generation.

These growth investments are intended to further our sustainability leadership position by increasing recycling volumes and growing renewable natural gas generation.

We expect they will deliver circular solutions for our customers and drive environmental value to the communities we serve.

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Service or operational disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the geographic areas affected.

Extreme weather events may also lead to

supply chain disruption and delayed project development, or disruption of our customers’ businesses, reducing the amount of waste generated by their operations.

Extreme weather events may also lead to supply chain disruption and delayed project development, or disruption of our customers’ businesses, reducing the amount of waste generated by their operations.

Conversely, certain destructive weather and climate conditions, such as wildfires in the Western U.S.

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Quantitative and Qualitative Disclosures About Market Risk.

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

Information about market risks as of March 31, 2026 does not materially differ from that discussed under Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis