What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 173 added, 122 removed, 274 unchanged (52% of the section changed)

40 unchanged sentences

We are North America’s leading provider of comprehensive environmental solutions, providing services throughout the United States (“U.S.”) and Canada.

We partner with our customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy.

We partner with our customers and the communities we serve to manage and

reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy.

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

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.

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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 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.

Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 2026 Sustainability Report, providing details on our

sustainability-related performance and outlining progress towards our 2030 sustainability goals.

The 2026 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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We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and Renewable Energy segments.

During the 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.

During the first half of 2026, we continued to experience decreases in market prices for recycled commodities when compared to the prior year period.

Additionally, we experienced declines in commodity prices from the prior year period that had an unfavorable impact on the Renewable Energy segment.

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

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Current Quarter Financial Results

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;

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

delivering operational excellence and capitalizing on network advantages;

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

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

During the period, 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:

We continue to invest in our people through paying a competitive market wage, investing in our digital platform

and providing training for our team members.

During the second quarter of 2026, we also allocated $1,038 million of available cash to our shareholders through dividends and common stock repurchases.

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

● Revenues of $6,684 million, compared to $6,430 million in the prior year period, an increase of $254 million, or 4.0%.

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;

(ii) increases in our energy surcharge due to higher fuel prices and (iii) volume growth in our Recycling Processing and Sales and Renewable Energy segments.

These increases are partially offset by (i) lower collection and disposal volumes;

(ii) volume declines in our Healthcare Solutions segment and (iii) a reduction in single-stream and brokerage recycled commodity prices;

● Operating expenses of $3,955 million, or 59.2% of revenues, compared to $3,803 million, or 59.1% of revenues, in the prior year period.

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;

The $152 million increase is primarily due to (i) higher fuel prices;

(ii) annual employee wage increases and higher employee medical costs and (iii) growth in our Renewable Energy segment.

These increases were offset by (i) the Company’s ability to flex spending with lower collection and special waste volumes and (ii) continued operating efficiency and cost control initiatives;

● Selling, general and administrative expenses of $683 million, or 10.2% of revenues, compared to $696 million, or 10.8% 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;

The $13 million decrease is primarily due to lower professional fees and lower labor costs resulting from synergies achieved from our acquisitions, particularly Stericycle, partially offset by higher bad debt expenses;

● Income from operations of $1,253 million, or 18.7% of revenues, compared to $1,151 million, or 17.9% 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;

The $102 million increase is primarily due to (i) growth in our Collection and Disposal business driven by yield;

(ii) benefits from the realization of synergies in our Healthcare Solutions segment and (iii) contributions from increased volumes in our Recycling Processing and Sales and Renewable Energy segments.

These increases were partially offset by prior year earnings from wildfire clean-up activities;

● Net income attributable to Waste Management, Inc.

of $785 million, or $1.95 per diluted share, compared to $726 million, or $1.80 per diluted share, in the prior year period.

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

The $59 million increase is primarily due to the increase in income from operations, discussed above, partially offset by higher income tax expense;

● Net cash provided by operating activities of $1,726 million compared to $1,545 million in the prior year period.

The $181 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;

(ii) favorable changes in working capital, net of effects from acquisitions and divestitures and (iii) lower cash taxes;

● Free cash flow of $1,104 million compared to $818 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.

The $286 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) planned 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.

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

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Operating Revenues

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

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

Three Months Ended June 30:

Other collection

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Renewable Energy

Healthcare Solutions

Healthcare Solutions (b)

Corporate and Other

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Corporate and Other

Six Months Ended June 30:

Other collection

Total collection

Total Collection and Disposal

Recycling Processing and Sales

Renewable Energy

Healthcare Solutions (b)

Corporate and Other

Other collection

Total collection

Total Collection and Disposal

Recycling Processing and Sales

Renewable Energy

Healthcare Solutions (b)

Corporate and Other

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

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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.

Accordingly, adjustments to the three and six months ended June 30, 2025 were made to properly reflect intra-segment activity for each period.

Intra-segment operating revenues and operating expenses within Healthcare Solutions for the three and six months ended June 30, 2026 are $101 million and $202 million, respectively.

Intra-segment operating revenues and operating expenses within Healthcare Solutions for the three and six months ended June 30, 2025 are $113 million and $207 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

March 31, 2026 vs.

June 30, 2026 vs.

Period-to-Period Change for the

Six Months Ended

June 30, 2026 vs.

Collection and Disposal

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(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:

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

The significant items affecting revenues during the three and six months ended June 30, 2026, as compared to the prior year periods, are summarized below:

Average Yield

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Period-to-Period Change for the

Three Months Ended

March 31, 2026 vs.

Six Months Ended

June 30, 2026 vs.

Total collection

1 unchanged sentence

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

We continue to see yield growth in our landfill business primarily driven by municipal solid waste, 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.

We continue to see yield growth in our landfill business primarily driven by municipal solid waste, which achieved average yield of 5.2% and 5.9% for the three and six months ended June 30, 2026, respectively.

Recycling Processing and Sales and Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $2 million and $30 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

Average market prices for single-stream recycled commodities declined by about 10% and 20% for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

Revenues attributable to yield in our Renewable Energy segment decreased $4 million and $13 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods primarily due to lower RNG pricing, partially offset by higher electricity 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.

Energy Surcharge and Mandated Fees — These fees increased $102 million and $122 million for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

The increase in energy surcharge revenues was primarily due to an increase of approximately 50% and 30% in market prices for diesel fuel for three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

Our revenues from volume (excluding volumes from acquisitions and divestitures, as well as Healthcare Solutions) decreased $22 million, or 0.3%, and $10 million, or 0.1%, for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods.

Volume increased in both our Recycling Processing Sales and our Renewable Energy segments primarily due to contributions from recycling automation and growth projects and new renewable natural gas plants.

These volume increases were largely offset by special waste volume declines compared to the prior year periods, which benefited from wildfire cleanup activities in the West Tier, and volume declines in our collection business primarily due to our intentional shedding of lower-margin residential business.

Additionally, the six months ended June 30, 2026 was negatively impacted by harsh winter weather conditions in the first quarter of 2026.

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.

Revenues from our Healthcare Solutions segment for three and six months ended June 30, 2026, decreased $30 million, or 0.5%, and $42 million, or 0.3%, respectively, as compared to the prior year periods 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 $31 million, or 0.6%, as compared to the prior year period primarily due to 2025 investments in tuck-in collection and disposal businesses.

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

Operating Expenses

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):

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

Three Months Ended

Six Months Ended

Labor and related benefits

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Risk management

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;

Our operating expenses for the three and six months ended June 30, 2026 increased as compared to the prior year periods, primarily due to (i) higher fuel prices;

(ii) annual employee wage increases and higher employee medical costs and (iii) growth in our Renewable Energy segment.

These increases were partially offset by (i) the Company’s ability to flex spending with lower collection and special waste volumes and (ii) continued operating efficiency and cost control initiatives.

The significant items affecting operating expenses during the three and six months ended June 30, 2026, as compared to the prior year periods, are summarized below:

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

These increases were partially offset by (i) the Company’s ability to flex spending with lower collection and special waste volumes;

(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.

Transfer and Disposal Costs — The decrease in transfer and disposal costs for the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to lower residential volumes attributable to intentional shedding of lower-margin contracts.

Lower transfer and disposal volumes caused by harsh winter weather during the first quarter of 2026 further contributed to the cost decrease for the six months ended June 30, 2026 as compared to the prior year period.

Maintenance and Repairs — The increase in maintenance and repairs costs was primarily due to annual wage increases and increased maintenance technician headcount.

The increase was partially offset by reduced demand for third-party services driven by fleet and operational optimization.

Subcontractor Costs — The increase in subcontractor costs was primarily due to increases in market prices for diesel fuel as previously mentioned.

Cost of Goods Sold — The decrease in cost of goods sold was primarily due to fluctuations in average market prices for single-stream recycling commodities discussed above.

This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought online during 2025 and 2026.

Fuel — The increase in fuel costs was primarily due to the increases in average market prices for diesel fuel previously mentioned.

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

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes 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.

Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes was 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 was primarily due to higher leachate treatment costs in our West Tier .

Risk Management — The increase in risk management costs was primarily due increased claims costs as compared to the prior year periods.

Other — The increase in other operating costs was primarily due to increased utility costs largely attributable to higher electricity prices and new RNG plants brought online during 2025 and 2026.

Selling, General and Administrative Expenses

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):

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

Three Months Ended

Six Months Ended

Labor and related benefits

1 unchanged sentence

Provision for bad debts

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.

Selling, general and administrative expenses decreased for the three months ended June 30, 2026, as compared to the prior year period, primarily due to decreases in professional fees and lower labor costs resulting from synergies achieved from our acquisitions, particularly Stericycle, partially offset by higher bad debt expenses.

Selling, general and administrative expenses increased for the six months ended June 30, 2026, as compared to the prior year period, primarily due to increases in bad debt expenses and technology costs, partially offset by lower professional fees.

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

Labor and Related Benefits — The decrease in labor and related benefits costs for the three months ended June 30, 2026, as compared to the prior year period, was primarily due to a reduction in workforce as we achieved synergies from our acquisitions, particularly Stericycle, and lower annual incentive compensation costs.

These decreases were partially offset by annual employee wage increases.

The increase in labor and related benefits costs for the six months ended June 30, 2026, as compared to the prior year period, was primarily due to annual employee wage increases and higher long-term incentive compensation costs.

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

Professional Fees — The decrease in professional fees 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.

Professional Fees — The decrease in professional fees was primarily due to higher consulting costs incurred in the prior year periods to support the integration of Stericycle.

Provision for Bad Debts — The increase in provision for bad debts in both the three and six months ended June 30, 2026 was primarily due to increased receivable balances in our Collection and Disposal business driven by increased revenues.

The increase for the six months ended June 30, 2026 as compared to the prior year period was also driven by favorable adjustments to the provision for bad debts that benefited the first quarter of 2025.

Other — The decrease in other expenses for the three months ended June 30, 2026, as compared to the prior year period, was primarily due to lower litigation expenses.

The increase in other expenses for the six months ended June 30, 2026, as compared to the prior year period, was primarily due to increased technology costs 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):

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

Three Months Ended

Six Months Ended

Depreciation of tangible property and equipment

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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.

The increase in depreciation of tangible property and equipment for the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to investments in capital assets placed in service during 2025 and 2026, particularly within our sustainability businesses.

The increase in depletion of landfill airspace for the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to changes in rates from revisions in landfill estimates within our East Tier.

The decrease in amortization of intangible assets for the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to the conclusion of amortization related to customer relationships and other intangibles acquired as a result of acquisitions during prior years within our East Tier.

The increase in interest accretion on landfill and environmental remediation liabilities for the three and six months ended June 30, 2026, as compared to the prior year periods, was primarily due to revisions in landfill estimates.

Restructuring

Restructuring charges for the three and six months ended June 30, 2026 were not material.

Restructuring charges for the three and six months ended June 30, 2025 were primarily due to employee costs related to integration of our November 2024 acquisition of Stericycle.

(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 June 30, 2026 was not material.

(Gain) loss from divestitures, asset impairments and unusual items, net for the six months ended June 30, 2026 primarily relates to a $34 million gain on a business divestiture in our West Tier, offset by immaterial charges related to legal and remediation liabilities.

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

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

Income from Operations

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

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

Three Months Ended

Six Months Ended

Period-to-Period

Collection and Disposal:

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*Percentage change does not provide a meaningful comparison.

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:

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

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

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

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.

(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 recognized in the first quarter of 2026.

These increases were partially offset by declines in special waste volume in our West Tier, which was favorably impacted by wildfire clean-up activities in the prior year periods, and lower volumes caused by harsh winter weather in early 2026.

Recycling Processing and Sales — The increase in income from operations in our Recycling Processing and Sales segment was primarily due to lower expenses from the suspension of a business engaged in plastic film and wrap recycling during 2025, increased volumes and reduced costs from the automation of our recycling facilities as well as investments in new facilities.

These increases were partially offset by declines in commodity prices compared to the prior year periods.

Renewable Energy — The increase in income from operations in our Renewable Energy segment was 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.

Healthcare Solutions — Our Healthcare Solutions segment generated income from operations in the three months ended June 30, 2026 and a loss from operations in the six months ended June 30, 2026.

The improvement across both time periods is primarily due to non-recurring integration costs incurred during the prior year periods along with lower costs in the current year from the realization of synergies, offset by lower volumes.

Corporate and Other — The loss from operations in Corporate and Other increased in the three months ended June 30, 2026 primarily due to (i) increased technology costs to support strategic initiatives;

(ii) higher risk management expenses and (iii) annual wage increases.

The loss from operations in Corporate and Other increased in the six months ended June 30, 2026 primarily due to (i) increased technology costs to support our strategic initiatives;

(ii) annual wage increases and (iii) increased employee medical costs.

Interest Expense, Net

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.

Our interest expense, net was $233 million and $458 million for the three and six months ended June 30, 2026, respectively, compared to $232 million and $464 million for the three and six months ended June 30, 2025, respectively.

Interest expense, net benefited from a decrease in our average debt balances and increases in interest income as compared to the prior year periods.

These benefits were partially offset for the six-month period, and more than offset for the three-month period, by lower capitalized interest resulting from the completion of the majority of our sustainability growth projects by the end of 2025.

Income Tax Expense

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.

Our income tax expense and effective income tax rate was $238 million, or 23.2%, and $406 million, or 21.2%, for the three and six months ended June 30, 2026, respectively, compared to $201 million, or 21.7%, and $352 million, or 20.5%, for the three and six months ended June 30, 2025, respectively.

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

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

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

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) 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.

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Cash and cash equivalents

Restricted funds:

Restricted funds and other:

Insurance reserves

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

Total restricted funds (a)

Total restricted funds and other (a)

Current portion

Long-term portion

(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;

(a) As of June 30, 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 June 30, 2026, we had approximately $3.8 billion of debt maturing within the next 12 months, including (i) $2.0 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities;

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

(iii) $223 million of 7.10% 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.

(iv) $352 million of 2.60% Canadian senior notes that the Company elected to redeem in July 2026 and (v) $206 million of other debt with scheduled maturities within the next 12 months.

As of June 30, 2026, we have classified $2.7 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S.

and Canadian revolving credit facility.

The remaining $641 million of debt maturing in the next 12 months is classified as current obligations.

The remaining $1.1 billion of debt maturing in the next 12 months is classified as current obligations.

Guarantor Financial Information

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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):

March 31, 2026

December 31, 2025

Balance Sheet Information:

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Other noncurrent liabilities

Three Months Ended

March 31, 2026

Six Months Ended

June 30, 2026

Income Statement Information:

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Summary of Cash Flow Activity

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

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

Net cash provided by operating activities

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Net cash used in financing activities

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.

Net Cash Provided by Operating Activities — Our operating cash flows increased by $474 million for the six months ended June 30, 2026, as compared to the prior year period, primarily due to (i) higher earnings, particularly driven by our Collection and Disposal business;

(ii) favorable changes in working capital, net of effects from acquisitions and divestitures;

(iii) lower annual incentive compensation payments and (iv) lower cash taxes.

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

● Capital Expenditures — We used $1,280 million and $1,563 million for capital expenditures during the six months ended June 30, 2026 and 2025, respectively.

The decrease in capital spending is primarily driven by (i) lower spend on collection vehicles and (ii) planned 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.

● Acquisitions — Our cash spending on acquisitions was $98 million and $374 million during the six months ended June 30, 2026 and 2025, respectively, of which $85 million and $366 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.

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 $77 million and $103 million for the six months ended June 30, 2026 and 2025, respectively.

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

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● 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):

During the six months ended June 30, 2026 and 2025, we used $134 million and $87 million, respectively, of cash from restricted cash and cash equivalents to invest in available-for-sale securities.

Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash flows for the six months ended June 30, 2026 and 2025 are summarized below:

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

Commercial paper

Tax-exempt bonds

Commercial paper

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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 three months ended March 31, 2026, we paid cash of $344 million for common stock repurchases.

● Common Stock Repurchase Program — During the six months ended June 30, 2026, we paid cash of $1,003 million for common stock repurchases.

There were no share repurchases made in 2025.

See Note 11 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 $385 million and $336 million during the three months ended March 31, 2026 and 2025, respectively.

● Cash Dividends — We paid cash dividends of $764 million and $669 million during the six months ended June 30, 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 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:

Our calculation of free cash flow and reconciliation to net cash provided by operating activities for the three and six months ended June 30, 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:

Three Months Ended

Six Months Ended

Net cash provided by operating activities

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Free cash flow

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

(a) 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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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 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.

These efforts may not be successful for various reasons including the pace of inflation, operating cost inefficiencies, market responses and contractual limitations, such as the timing lag in our ability to recover increased costs under certain contracts that are tied to a price escalation index with a lookback provision.

Quantitative and Qualitative Disclosures About Market Risk.

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.

Information about market risks as of June 30, 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