What changed in this filing

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Item 1. Business

2022-02-15 compared with 2021-02-22 · 151 added, 164 removed, 258 unchanged (55% of the section changed)

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When the terms “the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste Management, Inc., its consolidated subsidiaries and consolidated variable interest entities.

When we use the term “WM,” we are referring only to Waste Management, Inc., the parent holding company.

WM was incorporated in Oklahoma in 1987 under the name “USA Waste Services, Inc.” and was reincorporated as a Delaware company in 1995.

When we use the term “WMI,” we are referring only to Waste Management, Inc., the parent holding company.

WMI was incorporated in Oklahoma in 1987 under the name “USA Waste Services, Inc.” and was reincorporated as a Delaware company in 1995.

In a 1998 merger, the Illinois-based waste services company formerly known as Waste Management, Inc.

became a wholly-owned subsidiary of WM and changed its name to Waste Management Holdings, Inc.

became a wholly-owned subsidiary of WMI and changed its name to Waste Management Holdings, Inc.

(“WM Holdings”).

At the same time, our parent holding company changed its name from USA Waste Services to Waste Management, Inc.

Like WM, WM Holdings is a holding company and all operations are conducted by subsidiaries.

Our principal executive offices are located at 800 Capitol Street, Houston, Texas 77002.

Like WMI, WM Holdings is a holding company and all operations are conducted by subsidiaries.

Our principal executive offices are located at 800 Capitol Street, Suite 3000, Houston, Texas 77002.

Our telephone number is (713) 512-6200.

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We employed approximately 48,500 people as of December 31, 2021.

We own or operate 268 landfill sites, which is the largest network of landfills in the U.S.

We own or operate 260 landfill sites, which is 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 340 transfer stations that consolidate, compact and transport waste efficiently and economically.

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we remain dedicated to providing long-term value to our stockholders by successfully executing our core strategy of focused differentiation and continuous improvement.

We have enabled a

people-first, technology-led focus, that leverages and sustains the strongest asset network in the industry to drive best-in-class customer experience and growth.

As North America’s

leading provider of comprehensive waste management environmental services, sustainability and environmental stewardship is embedded in all that we do.

We have enabled a people-first, technology-led focus to drive our mission, that we are always working for a sustainable tomorrow.

Our strategy leverages and sustains the strongest asset network in the industry to drive best in class customer experience and growth.

Our strategic planning processes appropriately consider that the future of our business and the industry can be influenced by changes in economic conditions, the competitive landscape, the regulatory environment, asset and resource availability and technology.

We believe that focused differentiation, which is driven by capitalizing on our unique and extensive network of assets, will deliver profitable growth and position us to leverage competitive advantages.

Simultaneously, we believe the combination of cost control, process improvement and operational efficiency will deliver on the Company’s strategy of continuous improvement and yield an attractive total cost structure and enhanced service quality.

While we will continue to monitor emerging diversion technologies that may generate additional value and related market dynamics, our current attention will be on improving existing diversion technologies, such as our recycling operations.

Simultaneously, we believe the combination of cost control, enhancements to our digital platform, process improvement and operational efficiency will deliver on the Company’s strategy of continuous improvement and yield an attractive total cost structure and enhanced service quality.

While we continue to improve existing diversion technologies, such as through investments in our recycling operations, we are also evaluating and pursuing emerging diversion technologies that may generate additional value.

We believe that execution of our strategy will deliver shareholder value and leadership in a dynamic industry and challenging economic environment.

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All quarterly dividends will be declared at the discretion of our Board of Directors and depend on various factors, including our net earnings, financial condition, cash required for future business plans, growth and acquisitions and other factors the Board of Directors may deem relevant.

We evaluate, oversee and manage the financial performance of our Solid Waste business subsidiaries through our 17 Areas.

See Note 20 to the Consolidated Financial Statements for additional information about our reportable segments.

In 2021, our senior management began evaluating, overseeing and managing the financial performance of our Solid Waste operations through two operating segments.

Our East Tier primarily consists of geographic areas located in the Eastern U.S., the Great Lakes region and substantially all of Canada.

Our West Tier primarily includes geographic areas located in the Western U.S., including the upper Midwest region, and British Columbia, Canada.

Each of our Solid Waste operating segments provides integrated environmental services, including collection, transfer, recycling, and disposal.

The Company finalized the assessment of our segments during the fourth quarter of 2021.

The East and West Tiers are presented in this report and constitute our existing Solid Waste business.

On October 30, 2020, we acquired Advanced Disposal Services, Inc.

(“Advanced Disposal”), the operations of which are presented in this report within our existing Solid Waste tiers.

Additional information related to our acquisition of Advanced Disposal and segments is included in Notes 17 and 19 to the Consolidated Financial Statements, respectively.

We also provide expanded service offerings and solutions that are not managed through our Solid Waste business, as described below.

These operations are presented in this report as “Other.” The services we currently provide include collection, landfill (solid and hazardous waste landfills), transfer, recycling and resource recovery and other services, as described below.

On October 30, 2020, we completed the acquisition of all outstanding shares of Advanced Disposal Services, Inc.

(“Advanced Disposal”).

This acquisition expanded our collection and disposal business in a number of markets in the Eastern half of the U.S.

The acquisition is discussed further in Note 18 to the Consolidated Financial Statements.

These operations are presented in this report as “Other.” The services we provide are described below.

Our commitment to customers begins with a vast waste collection network.

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We also provide services under individual monthly subscriptions directly to households.

The fees for residential collection are either paid by the municipality or authority from their tax revenues or service charges, or are paid

directly by the residents receiving the service.

The fees for residential collection are either paid by the municipality or authority from their tax revenues or service charges, or are paid directly by the residents receiving the service.

The Company is generally phasing out traditional manual systems and moving to further automate residential collection services.

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Landfills are the main depositories for solid waste in North America.

As of December 31, 2020, we owned or operated 263 solid waste landfills and five secure hazardous waste landfills, which represents the largest network of landfills in the U.S.

As of December 31, 2021, we owned or operated 255 solid waste landfills and five secure hazardous waste landfills, which represents the largest network of landfills throughout the U.S.

Solid waste landfills are constructed and operated on land with engineering safeguards that limit the possibility of water and air pollution, and are operated under procedures prescribed by regulation.

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Single-stream recycling is possible through the use of various mechanized screens and optical sorting technologies.

We have also been advancing the single-stream recycling programs for commercial applications.

In 2021, we made significant investments in technology to automate our equipment, which benefits our labor productivity, produce higher quality commodities for our customers, and increase our capacity in geographies where we currently have a MRF, as well as expanding our footprint into new geographies.

In addition to advancing our single stream recycling programs for commercial applications, we will continue to invest in recycling technologies designed to offer services and solutions to support and grow our current operations.

Recycling involves the separation of reusable materials from the waste stream for processing and resale or other disposition.

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Materials processing — Through our collection operations and third-party customer base, we collect recyclable materials from residential, commercial and industrial customers and direct these materials to one of our MRFs for processing.

As of December 31, 2020, we operated 103 MRFs where cardboard, paper, glass, metals, plastics, construction and demolition materials and other recycling commodities are recovered for resale or redirected for other purposes.

As of December 31, 2021, we operated 96 MRFs, of which 49 are single stream, where cardboard, paper, glass, metals, plastics, construction and demolition materials and other recycling commodities are recovered for resale or redirected for other purposes.

Recycling commodities — We market and resell recycling commodities globally.

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In recent years, we have been focused on reducing dependency on market prices for recycled commodities by recovering our processing costs first.

Over time we have been transitioning our customer base from the traditional rebate model, where we paid suppliers for the inbound material, to a fee-for-service model that ensures the cost of processing the recyclable materials is covered along with an acceptable margin.

In our materials processing business, we have been transitioning our customer base over time from the traditional rebate model, where we paid suppliers for the inbound material, to a fee-for-service model that ensures the cost of processing the recyclable materials is covered along with an acceptable margin.

With our current fee-for-service model, the pricing for these recyclable materials can either be a charge or “tip fee” when commodity pricing does not cover our cost to process the recyclable materials or a “rebate” when commodity pricing is higher than our processing costs and we are able to share this benefit with the customers generating recyclable materials.

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Although many waste management services such as collection and disposal are local services, our Strategic Business Solutions (“WMSBS”) business works with customers whose locations span the U.S.

Our strategic accounts program provides centralized customer service, billing and management of accounts to streamline the administration of customers’ waste management needs across multiple locations.

Our strategic accounts

program provides centralized customer service, billing and management of accounts to streamline the administration of customers’ waste management needs across multiple locations.

Our Energy and Environmental Services (“EES”) business offers our customers a variety of services in collaboration with our Area and strategic accounts programs, including (i) construction and remediation services;

(ii) services associated with the disposal of fly ash, residue generated from the combustion of coal and other fuel stocks;

(iii) in-plant services, where our employees work full-time inside our customers’ facilities to provide full-service waste management solutions and consulting services (this service is managed through our EES business but reflected principally in our collection line of business) and (iv) specialized disposal services for oil and gas exploration and production operations (revenues for this

service are also reflected principally in our collection line of business).

(ii) services associated with the disposal of fly ash, which is residue generated from the combustion of coal, and other fuel stocks;

Our vertically integrated waste management operations enable us to provide customers with full management of their waste.

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For 26 of these projects, the gas is used at the landfill or delivered by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes.

WM Renewable Energy also produces renewable natural gas (“RNG”) from landfill gas and generates renewable identification numbers (“RINs”) under the Renewable Fuel Standard (“RFS”) program and other credits under a variety of state programs associated with the use of RNG in our compressed natural gas fleet.

The RINs and credits are sold to counterparties who are obligated under the regulatory programs and have a responsibility to procure RINs and credits proportionate to their fossil fuel production and imports.

RINs prices generally respond to regulations enacted by the EPA or other regulatory bodies, as well as fluctuations in supply and demand.

WM Renewable Energy currently has four owned facilities producing 3.2 million MMBtu of RNG annually and most of the revenue from these facilities is generated through the sale of RINs.

We expect to grow the number of plants from four to 21 by 2026 and project that we will generate approximately 24 million MMBtu of RNG annually with the expanded asset base.

While developing these facilities and expanding our renewable energy generation, we intend to evaluate various offtake arrangements, including the sale of RINs and the direct sale of RNG to large industrial users such as utilities and colleges and universities.

We provide expanded service offerings and solutions that are not managed through our Solid Waste business including the collection of project waste, including construction debris and household or yard waste, through our Bagster ® business.

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The industry also includes companies that specialize in certain discrete areas of waste management, operators of alternative disposal facilities, companies that seek to use parts of the waste stream as feedstock for renewable energy and other by-products, and waste brokers that rely upon haulers in local markets to address customer needs.

In recent years, the industry has seen some additional consolidation, though the industry remains intensely competitive.

Operating costs, disposal costs and collection fees vary widely throughout the Areas in which we operate.

Operating costs, disposal costs and collection fees vary widely throughout the geographic areas in which we operate.

The prices that we charge are determined locally, and typically vary by volume and weight, type of waste collected, treatment requirements, risk of handling or disposal, frequency of collections, distance to final disposal sites, the availability of airspace within the geographic region, labor costs and amount and type of equipment furnished to the customer.

We face intense competition in our Solid Waste business based on pricing and quality of service.

We have also begun competing for business based on breadth of service offerings.

We also compete for business based on breadth of service offerings.

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

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Our operating revenues tend to be somewhat higher in summer months, primarily due to higher construction and demolition waste volumes.

The volumes of industrial and residential waste in certain regions where we operate also tend

to increase during the summer months.

The volumes of industrial and residential waste in certain regions where we operate also tend to increase during the summer months.

Our second and third quarter revenues and results of operations typically reflect these seasonal trends.

Service disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the Areas impacted.

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

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

and hurricanes that most often impact our operations in the Southern and Eastern U.S.

during the second half of the year, can increase our revenues in the Areas affected as a result of the waste volumes generated by these events.

during the second half of the year, can increase our revenues in the geographic areas affected as a result of the waste volumes generated by these events.

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

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Our success depends upon effective leadership, the contributions of each employee, and our ability to give them the tools they need to safely execute their roles as well as to develop and excel in their careers.

As our industry and workforce evolve, we are focused on our imperatives of keeping our employees safe, improving diversity, equity, and inclusion at all levels of our Company, managing employee turnover and increasing retention and supporting ongoing cultural integration and knowledge transfer.

retention and supporting ongoing cultural integration and knowledge transfer.

We regularly focus on these objectives when managing our business.

Refer to COVID-19 Update within Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for discussion regarding our focus on employees during the COVID-19 pandemic.

We strive to be a workplace of choice through competitive pay, comprehensive benefits for long-term financial and personal health and opportunities for growth across our ranks.

"We Are WM"

is our Employer Value Proposition, grounded in our People First commitment and shared through a framework that enables us to display that we are (i) investing in our teams by providing comprehensive benefits;

(ii) committed to the growth of our team by providing state-of-the-art trainings and our new education benefit, Your Tomorrow, as further discussed under Compensation and Benefits ;

(iii) performing essential and meaningful work and (iv) working for a sustainable tomorrow by leaving the world a better place than we found it.

Being an employer of choice is critical to our efforts to attract and retain a high-quality workforce, while motivating us to sharpen our focus on our values that help us empower and develop good employees.

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(iv) professional development and leadership and (v) job-specific.

Inclusion and Diversity

Fostering mutual trust and respect for one another is a cornerstone of being an inclusive and welcoming workplace, one that is well-positioned to serve our customers and communities.

Inclusion and diversity (“I&D”) are part of the Company’s core values;

we embrace and cultivate respect, trust, open communication and diversity of thought and people.

We are continually working to further embed I&D as central pillars of our culture.

To this end, we established two aspirational goals to achieve by 2025:

(i) achieve ethnic diversity in each segment of our workforce, with an emphasis on improving representation of minorities in all aspects of our business, including leadership and (ii) lead the industry in female representation at all levels, with a special emphasis on operations and leadership.

To enable us to achieve these goals, we have established a cross-functional Inclusion and Diversity Leadership Council aimed at ensuring all of the Company’s policies, practices and procedures support these efforts.

Inclusion, Equity and Diversity

We embrace and cultivate respect, trust, open communications and diversity of thought and people.

We are committed to equality for all, and foster an environment where all teammates feel welcomed, valued and seen.

We are laser-focused on strengthening our current business strategy to see that inclusion, equity and diversity (“IE&D”) are not an initiative, but core in everything that we do.

Our commitment to IE&D starts at the top with our senior leadership team being comprised of 30% ethnic minorities and 30% women as of December 31, 2021;

and with our overall workforce in the U.S.

being comprised of approximately 45% ethnic minorities and approximately 19% women as of the same date.

We are proud of what we have been able to achieve.

To enable us to achieve our goals, we have established a cross-functional IE&D Council aimed at evaluating policies, practices and procedures, recruitment and partnerships to ensure that our IE&D efforts are sustainable and are tied to our business strategy.

Compensation and Benefits

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The Company offers other important benefits such as paid vacation and holidays, legal services, flexible spending accounts, dependent care assistance, adoption assistance, employee discounts and student loan refinancing services.

We also recognize the value of learning beyond the workplace.

In 2021, we announced a new education benefit, Your Tomorrow.

Your Tomorrow was created in partnership with Guild Education

to pay 100% of benefits-eligible employees’ and dependents’ tuition for a broad range of four-year college degree programs, as well as programs such as high-school equivalency and, for employees, other certificate programs and graduate degrees.

We also provide plans to help employees save for their future;

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and Canadian revolving credit facility (“$3.5 billion revolving credit facility”) and other credit lines established for that purpose.

We carry a broad range of insurance coverages, including health and welfare, general liability, automobile liability, workers’ compensation, real and personal property, directors’ and officers’ liability, pollution legal liability, cyber incident

liability and other coverages we believe are customary to the industry.

Our exposure to loss for insurance claims is generally limited to the per-incident deductible under the related insurance policy.

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Many of these agencies regularly examine our operations to monitor compliance with these laws and regulations and have the power to enforce compliance, obtain injunctions or impose civil or criminal penalties in cases of violations.

Because the primary mission of our business is to collect and manage solid waste in an environmentally sound manner, a significant amount of our capital expenditures are related, either directly or indirectly, to environmental protection measures, including compliance with federal, state, provincial and local rules.

There are costs associated with siting, design, permitting, operations, monitoring, site maintenance, corrective actions, financial assurance, and facility closure and post-closure obligations.

With acquisition, development or expansion of a waste management or disposal facility or transfer station, we must often spend considerable time, effort and money to obtain or maintain required permits and approvals.

There are no assurances that we will be able to obtain or maintain required governmental approvals.

Once obtained, operating permits are subject to renewal, modification, suspension or revocation by the issuing agency.

Because the primary mission of our business is to collect, process and manage solid waste and recyclables in an environmentally sound manner, a significant amount of our capital expenditures are related, either directly or indirectly, to environmental protection measures, including compliance with federal, state, provincial and local rules.

There are costs associated with siting, design, permitting, construction, operations, monitoring, site maintenance, corrective actions, financial assurance, and facility closure and post-closure obligations.

With acquisition, development or expansion of a waste management or disposal facility, materials recovery facility, compost facility or transfer station, we must often spend considerable time, effort and money to obtain or maintain required permits and approvals.

There are no assurances that we

will be able to obtain or maintain required governmental approvals.

Once obtained, permits are subject to renewal, modification, suspension or revocation by the issuing authority.

Compliance with current regulations and future requirements could require us to make significant capital and operating expenditures.

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The regulatory environment in which we operate is influenced by changes in leadership at the federal, state, provincial and local levels.

The policies set forth under the previous U.S.

administration, for example, generally were in favor of reducing regulation and corporate taxation.

While it is anticipated that the new U.S.

administration will reverse course on regulatory policies impacting our Company, we cannot predict what impact the change in administrations will have on specific regulations, nor can we predict the timing of any such changes.

Reduction of regulation may have a favorable impact on our operating costs, but the extensive environmental regulation applicable to the waste sector is a barrier to rapid entry that benefits our Company.

The current U.S.

administration, for example, has been taking steps towards reinstating, and in some cases enhancing, policies and regulations rolled back by the previous administration.

While increasing regulation may have a negative impact on our operating costs, extensive environmental regulation applicable to the waste sector is also a barrier to rapid entry that benefits our Company.

Moreover, the risk reduction provided by stringent regulation is valuable to our customers and the communities we serve.

Federal Regulation

The primary U.S.

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We incur costs in complying with these standards in the ordinary course of our operations.

We continue to monitor certain developments under RCRA, including relief from increased user fees accompanying the system that the EPA uses to track hazardous waste shipments electronically, potential changes to the rules governing the disposal and beneficial use of coal combustion residuals, and clarity on the U.S.

Department of Energy’s progress in establishing a government facility and corresponding fee structure for the long-term storage and disposal of elemental mercury.

We cannot predict what costs we will incur in connection with these regulations, but we do not anticipate a material impact to our operations.

We also are working closely with both agencies to minimize risks to our industry on these regulatory matters.

● The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended, which is also known as Superfund, provides for federal authority to respond directly to releases or threatened releases of hazardous substances into the environment that have created actual or potential environmental hazards.

CERCLA’s primary means for addressing such releases is to impose strict liability for

cleanup of disposal sites upon current and former site owners and operators, generators of the hazardous substances at the site and transporters who selected the disposal site and transported substances thereto.

CERCLA’s primary means for addressing such releases is to impose strict liability for cleanup of disposal sites upon current and former site owners and operators, generators of the hazardous substances at the site and transporters who selected the disposal site and transported substances thereto.

Liability under CERCLA is not dependent on the intentional release of hazardous substances;

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● The Federal Water Pollution Control Act of 1972, as amended, known as the Clean Water Act, regulates the discharge of pollutants into streams, rivers, groundwater, or other surface waters from a variety of sources, including solid and hazardous waste disposal sites.

If our operations discharge any pollutants into surface waters, the Clean Water Act requires us to apply for and obtain discharge permits, conduct sampling and monitoring, and, under certain circumstances, reduce the quantity of pollutants in those discharges.

In 1990, the EPA issued additional standards for management of storm water run-off that require landfills and other waste-handling facilities to obtain storm water discharge permits.

Also, if a landfill or other facility discharges wastewater through a sewage system to a publicly-owned treatment works, the facility must comply with discharge limits imposed by the treatment works.

Further, before the development or expansion of a landfill can alter or affect “wetlands,” a permit may have to be obtained providing for mitigation or replacement wetlands.

If our operations discharge any pollutants into federally protected surface waters, the Clean Water Act requires us to apply for and obtain discharge permits, conduct sampling and monitoring, and, under certain circumstances, reduce the quantity of pollutants in those discharges.

The EPA also requires landfills and other waste-handling facilities to obtain storm water discharge permits, and if a landfill or other facility discharges wastewater through a sewage system to a publicly-owned treatment works, the facility must comply with discharge limits imposed by the treatment works.

Further, before the development or expansion of a landfill can alter or affect certain “wetlands,” a permit may have to be obtained providing for mitigation or replacement wetlands.

The Clean Water Act provides for civil, criminal and administrative penalties for violations of its provisions.

● The Clean Air Act of 1970, as amended, provides for federal, state and local regulation of the emission of air pollutants.

Certain of our operations are subject to the requirements of the Clean Air Act, including municipal solid waste (“MSW”) landfills and landfill gas-to-energy facilities.

In 1996, the EPA issued new source performance standards (“NSPS”) and emission guidelines (“EG”) controlling landfill gases from new and existing MSW landfills larger than specified size thresholds.

In January 2003, the EPA issued Maximum Achievable Control Technology (“MACT”) standards for municipal solid waste landfills subject to the NSPS and EG.

The EPA issued two new rules that serve to update the 1996 NSPS and EG regulatory requirements in August 2016 and updated its MACT regulations in 2020.

These NSPS, EG and MACT regulations impose performance standards to minimize air emissions from regulated MSW landfills, subject those landfills to certain operating permit requirements under Title V of the Clean Air Act and, in many instances, require installation of landfill gas collection and control systems to control emissions or to treat and utilize landfill gas on- or off-site.

Many of our municipal solid waste (“MSW”) landfills and landfill gas-to-energy facilities are subject to regulations implemented under the Clean Air Act, including new source performance standards, emission guidelines and national emission standards for hazardous air pollutants.

These regulations impose performance standards to minimize air emissions from regulated MSW landfills, subject those landfills to certain operating permit requirements under Title V of the Clean Air Act and, in many instances, require installation of landfill gas collection and control systems to control emissions or to treat and utilize landfill gas on- or off-site.

The EPA finalized a rule in May 2021 implementing landfill gas control and monitoring requirements for older landfills;

however, the regulatory changes contemplated therein are not expected to have a material adverse impact on our business as a whole.

We also are closely monitoring the evolving capabilities of ground, aerial, and satellite-based methane detection and monitoring systems, and investing in pilot programs to further explore these innovations.

As these technologies are expected to advance rapidly in the coming years, we are continuing to engage with the EPA on the implications of the changing landscape for the waste industry and potential future regulation.

● The Occupational Safety and Health Act of 1970 (“OSHA”), as amended, establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by the Occupational Safety and Health Administration, and various reporting and record keeping obligations as well as disclosure and procedural requirements.

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Various state and local agencies with jurisdiction over disposal of hazardous waste may seek to regulate movement of hazardous materials in areas not otherwise preempted by federal law.

We are also actively monitoring the following recent federal regulatory developments affecting our business:

● With regard to regulatory developments under RCRA, the EPA published an advance notice of proposed rulemaking in December 2018 to consider whether to propose revisions to the municipal solid waste landfill criteria to support advances in liquids management.

Although the notice does not reopen any existing regulations, we have been working closely with the EPA to ensure that the agency is aware of how future regulation could impact our industry.

In July 2019, the EPA announced increases in the user fees accompanying the system that

the agency uses to track hazardous waste shipments electronically.

Department of Energy (“DOE”) has responsibility under the Mercury Export Ban Act to designate a government facility to consolidate the long-term storage and disposal of elemental mercury and establish a fee structure to cover the facility’s operating costs.

Our Company continues to store mercury, largely on behalf of our customers, in anticipation of the planned DOE announcements.

We cannot predict what cost we will incur in connection with these regulations, but we do not anticipate a material impact to our hazardous waste business units.

We are working closely with the EPA and DOE to minimize risks more broadly to our industry.

● With regard to regulatory requirements pertaining to greenhouse gas emissions, since 2014, decisions from the U.S Supreme Court and U.S.

Court of Appeals for the D.C Circuit, as well as EPA policy memoranda, have significantly narrowed the applicability and scope of EPA permitting requirements for GHGs from stationary sources, including with respect to biogenic carbon dioxide (“CO2”) permitting.

In 2016, the EPA proposed revisions to the Prevention of Significant Deterioration (“PSD”) and Title V Greenhouse Gas (“GHG”) permitting regulations establishing a significant emissions rate (“SER”) threshold, below which sources would not be required to implement additional control technologies for their GHG emissions.

This SER threshold should prevent most of our operational changes, such as landfill expansions and beneficial gas recovery projects, from being subject to PSD or Title V permit requirements due to our GHG emissions – assuming the EPA classifies biogenic CO2 emissions from municipal solid waste and landfill gas as carbon neutral.

The EPA has not yet finalized this rulemaking, although the EPA’s independent Science Advisory Board has recommended that the agency treat waste-derived CO2 emissions as carbon neutral.

These judicial and regulatory actions have reduced, and are expected to continue to reduce, the potential impact of the GHG-related PSD and Title V regulations on our air permits, compliance and operating requirements.

Future GHG regulations may require landfill gas emission quantification and/or emission reduction requirements beyond what is currently required, and such amendments could have an adverse effect on our operating costs.

Potential climate change, GHG regulatory, and corporate sustainability initiatives have influenced our business strategy to provide low-carbon services to our customers, and we increasingly view our ability to offer lower carbon services as a key component of our business growth.

We continue to anticipate the needs of our customers, which include investing in and developing ever-more-advanced recycling and reuse technologies.

and Canada continue to explore various forms of GHG regulation that increase demand for low-carbon service offerings, the services we are developing are becoming increasingly valuable.

● We continue to monitor periodic regulatory actions to increase the stringency of certain National Ambient Air Quality Standards (“NAAQS”) which could affect the cost, timeliness and availability of air permits for new and modified large municipal solid waste landfills and landfill gas-to-energy facilities.

While we cannot predict the ultimate outcome of potential revisions to NAAQS, we do not believe that the such requirements will have a material adverse impact on our business as a whole.

● In December 2014, the EPA issued a final rule regulating the disposal and beneficial use of coal combustion residuals (“CCR”).

This codification of the CCR rule provides utilities with a stable regulatory regime and encourages beneficial use of CCR in encapsulated uses (e.g., used in cement or wallboard), and use according to established industry standards (e.g., application of sludge for agricultural enrichment).

The EPA also deemed disposal and beneficial use of CCR at permitted municipal solid waste landfills exempt from the new regulations because the RCRA Subtitle D standards applicable at municipal solid waste landfills provide at least equivalent protection.

These standards are consistent with our approach to handling CCR at our sites currently, and the new standards have provided a growth opportunity for the Company.

In 2018, the U.S.

Court of Appeals for the D.C Circuit vacated significant portions of the 2014 final rule and remanded the rule to the EPA for further revision.

As of December 2020, the EPA had finalized two rules and is in the process of developing three other rules aimed at providing utilities with some flexibility in closing or retrofitting unlined storage ponds and in regulating onsite storage of CCR for beneficial reuse.

The Company will monitor whether the new administration intends to revisit these rules as we continue to evaluate opportunities to provide CCR disposal services.

● In May 2016, the EPA established lifetime health advisories for certain per- and polyfluoroalkyl substances (“PFAS”), a group of man-made chemicals that have been manufactured and used globally since the 1940s in products such as textiles, fire suppressants, cookware, packaging and plastics.

PFAS are typically very persistent in the environment and can be found in water, soil and air.

Citing concerns about potential adverse human health

effects from exposure to PFAS, the EPA announced its “PFAS Action Plan” in February 2019 and has taken various actions to address PFAS contamination.

Meanwhile, an increasing number of states have enacted new drinking water, surface water and/or groundwater limits for various PFAS, which has led to a patchwork of PFAS standards across the U.S.

The EPA is expected to increase its regulatory oversight of PFAS in 2021, with proposals anticipated that would establish drinking water standards, expand authority for PFAS remediation, impose chemical release reporting obligations, and provide guidance on PFAS disposal.

Compliance with new and proposed PFAS standards is anticipated to result in additional expense to the Company, but such standards are also anticipated to present potential business opportunities in the area of PFAS management, treatment and disposal.

● In August 2016, the EPA published two rules to update the 1996 standards with new requirements for landfill gas control and monitoring at both new municipal solid waste landfills (constructed or modified after July 17, 2014) as well as existing landfills (operating after November 8, 1987, and not modified after July 17, 2014).

Working with our trade associations and other landfill owners and operators, we identified significant legal, technical and implementation concerns with the rules and together filed a judicial appeal of the rules while also filing administrative petitions asking that the EPA stay the rules and initiate a rulemaking process.

We also alerted the EPA that its August 2016 rulemakings led to an inconsistent regulatory structure in which six separate overlapping and inconsistent sets of work practices now govern the disposal industry.

In May 2017, the EPA granted our industry’s administrative petitions for reconsideration and rulemaking, signaling its intent to reconsider its 2016 rulemakings.

In March 2020, the EPA updated its regulations to its 2003 MACT standards, adding further confusion to this regulatory scheme, while declining to address many of the ongoing issues that our industry has identified as problematic.

Meanwhile, the agency continues to move forward with an additional rulemaking package (a federal plan to implement the 2016 rule for existing landfills) that could also lead to further regulatory confusion.

We cannot predict the outcome of any of these ongoing rulemaking processes;

however, we do not believe any such regulatory changes will have a material adverse impact on our business as a whole.

OSHA has recently indicated that it will pursue COVID-19 vaccine and testing requirements through a traditional rulemaking process, and additional vaccine mandates may be announced in jurisdictions in which our businesses operate.

We cannot currently predict the impact of any such vaccine requirements on our workforce.

State, Provincial and Local Regulations

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Each state and province in which we operate has its own laws and regulations governing solid waste disposal, water and air pollution, and, in most cases, releases and cleanup of hazardous substances and liabilities for such matters.

States and provinces have also adopted regulations governing the design, operation, maintenance and closure of landfills and transfer stations.

States and provinces have also adopted regulations governing the design, operation, maintenance and closure of landfills and transfer stations, and laws governing where recyclable materials can be sold.

Some counties, municipalities and other local governments have adopted similar laws and regulations.

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Our landfill operations are affected by the increasing preference for alternatives to landfill disposal.

Many state and local governments mandate recycling and waste reduction at the source and prohibit the disposal of certain types of waste, such as yard waste, food waste and electronics at landfills.

The number of state and local governments with recycling requirements and disposal bans continues to grow, while the logistics and economics of recycling the items remain challenging.

Many state and local governments mandate recycling and waste reduction at the source and prohibit the disposal of certain types of materials at landfills, such as recyclable materials (cardboard, bottles and cans), yard waste, food waste and electronics.

The number of state and local governments with recycling and diversion requirements and disposal bans continues to grow, while the logistics and economics of recycling or processing many of these items remain challenging.

Various states have enacted, or are considering enacting, laws that restrict the disposal within the state of solid waste generated outside the state.

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Congress has considered legislation authorizing states to adopt regulations, restrictions, or taxes on the importation of out-of-state or out-of-jurisdiction waste.

Additionally, several state and local governments have enacted “flow control” regulations, which attempt to require that all waste generated within the state or local jurisdiction be deposited at specific sites.

In 1994, the U.S.

Supreme Court ruled that a flow control ordinance that gave preference to a local facility that was privately owned was unconstitutional, but in 2007, the Court ruled that an ordinance directing waste to a facility owned by the local government was constitutional.

Supreme Court for waste directed to facilities owned by the local government.

Congress’ adoption of legislation allowing restrictions on interstate transportation of out-of-state or out-of-jurisdiction waste or certain types of flow control, or courts’ interpretations of interstate waste and flow control legislation, could adversely affect our solid and hazardous waste management services.

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While fitness laws can present potential increased costs and barriers to entry into market areas, these laws have not, and are not expected to have a material adverse impact on our business as a whole.

States and municipalities are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.

These policies generally require permitting agencies to give heightened attention to the potential for projects to disproportionately impact low-income and minority communities.

Our Company supports policies seeking to advance high standards of environmental performance and the fair treatment of people of all races, cultures, and incomes.

Nevertheless, we are actively monitoring recent regulatory developments in this area as additional conditions imposed on permitting decisions could increase the time and cost involved to pursue and maintain necessary permits.

Emerging Trends in Policy and Regulation

Climate and Sustainability

Jurisdictions are increasingly taking action to reduce greenhouse gas (“GHG”) emissions through a broad range of climate policies.

As landfills are emerging as one of the focal points for advancing climate-related goals, we are actively working with policymakers to ensure they recognize the significant reductions in GHG emissions that the waste sector already has achieved and the work being done to further reduce emissions, the challenges associated with quantifying landfill emissions precisely, and the role of our sector in providing an essential, and highly regulated, public service.

In light of regulatory and business developments related to concerns about climate change, we have identified strategic business opportunities to provide our public and private sector customers with sustainable solutions to reduce their GHG emissions.

As part of our on-going marketing evaluations, we assess customer demand for and opportunities to develop waste services offering verifiable carbon reductions, such as waste reduction, increased recycling, composting, and conversion of landfill gas and discarded materials into electricity and fuel.

We use carbon life cycle assessment tools in evaluating potential new services and in establishing the value proposition that makes us attractive as an environmental service provider.

We are active in support of public policies that encourage development and use of lower carbon energy and waste services that lower users’ carbon footprints.

We understand the importance of broad stakeholder engagement in these endeavors, and actively seek opportunities for public policy discussion on more sustainable materials management practices.

In addition, we work with stakeholders at the federal and state level in support of legislation that encourages production and use of renewable, low-carbon fuels and electricity.

We continue to assess the physical risks to our Company’s operations from the effects of severe weather events and use risk mitigation planning to increase our resiliency in the face of such events.

We are investing in infrastructure to withstand more severe storm events, which may afford us a competitive advantage and reinforce our reputation as a reliable service provider through continued service in the aftermath of such events.

Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 2021 Sustainability Report, which details the GHG emissions reductions we have facilitated to date and our determination to expand these reductions in the future, as well as our commitment to help make the communities in which we live and work safe, resilient and sustainable.

Our 2021 Sustainability Report can be found at https://sustainability.wm.com, but it does not constitute a part of, and is not incorporated by reference into, this Annual Report on Form 10-K.

The Company actively participates in a number of sustainability reporting programs and frameworks, including being listed on the 2021 Dow Jones Sustainability Index World and North America Indices.

Efforts to address sites contaminated with per- and polyfluoroalkyl substances (“PFAS”) have drawn increased attention by the federal government and in the states.

PFAS are a large group of chemicals that have been used in industrial and consumer products since the 1940s, including in products as diverse as carpets, paints and stains, water-resistant clothing and fabrics, nonstick cookware, food packaging, and firefighting chemicals.

Possible human health effects of exposure to certain PFAS compounds may include low infant birth weights, immune system impacts, or cancer.

In October 2021, the EPA released its PFAS Strategic Roadmap, providing a high-level overview of activities that the agency intends to take through 2024 to address PFAS contamination.

These actions include establishing drinking water standards, expanded authority for PFAS remediation, research and data collection on landfill discharges of PFAS in leachate, new risk assessments and test procedures, and updated guidance on PFAS disposal and destruction options.

Meanwhile, an increasing number of states have enacted new drinking water, surface water and/or groundwater limits for various PFAS, which has led to a patchwork of PFAS standards across the U.S.

Foreign Import and Export Regulations and Material Restrictions

Enforcement or implementation of foreign and domestic regulations can affect our ability to export products.

In 2017, the Chinese government announced bans on certain scrap materials and begun to enforce extremely restrictive quality and other requirements, which significantly reduced China’s import of recyclables.

As of January 1, 2021, China ceased importing virtually all recyclables, including those exported by us.

Many other markets, both domestic and foreign, have also tightened their quality expectations and limited or restricted the import of certain recyclables.

As an example, on January 1, 2021, new restrictions on the trade of most plastics went into effect as part of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.

is not a party to the Basel Convention, but most countries to which we export are, which may limit exports of certain plastics.

The impact of Basel Convention restrictions is unknown at this time, but it will be mitigated by the fact that we no longer export residential recyclables.

Such trade restrictions have disrupted the global trade of recyclables, particularly fiber, creating excess supply and decreasing recyclable commodity prices.

The heightened quality requirements have been difficult for the industry to achieve and have driven up operating costs.

In particular, single-stream MRFs process a wide range of commingled materials and tend to receive a higher percentage of non-recyclables, which results in increased processing and residual disposal costs to achieve quality standards.

As recyclable commodity prices have fallen and operating costs have increased, recyclers are passing cost increases through to customers.

The resulting price increase for recycling services in communities and at businesses in the U.S.

has resulted in some customers reducing or eliminating their recycling service.

COVID-19 placed additional financial stress on municipalities, resulting in recycling programs being paused or eliminated.

When combined with the impacts of the global markets shifts caused by China’s termination of imports, the most recent financial stress has led to a number of states considering EPR regulations, which would shift the financial burden of recycling to the producers of products and goods.

Industry trade organizations and government agencies are engaged in discussions to mitigate long-term impacts to recycling programs and the industry as a whole.

Enforcement or implementation of foreign and domestic regulations can affect our ability to export recyclables.

Attention on waste in the environment has led to new international laws restricting the flow of certain recyclables.

As an example, on January 1, 2021, new restrictions on the international trade of most plastics went into effect as part of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal.

At this time, the U.S.

is not a party to the Basel Convention, but most countries to which we export commodities are, which may limit our ability to export certain plastics.

In recent years, changes in regulations affecting the international flow of recyclables have led to a reduction in export activity for recyclables, higher quality requirements, and higher processing costs.

COVID-19 placed additional financial stress on recyclers and municipalities, resulting in some recycling programs being paused or eliminated.

These changes have led to a number of states considering EPR regulations.

Prices and demand for recyclables fluctuate.

Recycling revenue increased $537 million and $75 million in 2021 and 2020, respectively, as compared with the prior year periods primarily from higher market prices for recycling commodities.

To support recent increases in both quality requirements and demand for commodities, we have increased our investment in recycling infrastructure and the size of our recycling operations.

This, in turn, increases our exposure to commodity price fluctuations.

Additionally, future regulation, tariffs, international trade policies or other initiatives may impact supply and demand of material, or increase operating costs, which could impact the profitability of our recycling operations.

For the past several years, we have been working with stakeholders to educate the public on the need to recycle properly.

We are investing time and labor and working with customers to help improve quality and have seen improvement in the quality of material that we receive at our facilities.

We have continued our focus on developing a sustainable recycling business model that meets customers’ environmental needs by passing through the increasing cost of processing and higher contamination rates, and these efforts had a positive impact on the operating results for our recycling business in 2020.

We continue to invest time and effort in working closely with customers to improve the quality of materials received at our facilities.

We have continued our focus on developing a sustainable recycling business model that meets

customers’ environmental needs by passing through the increasing cost of processing and higher contamination rates, and these efforts continued to have a positive impact on the operating results for our recycling business in 2021.

With a heightened awareness of the global problems caused by plastic waste in the environment, an increasing number of cities and states across the country have passed ordinances banning certain types of plastics from sale or use.

The most common materials banned include plastic straws, polystyrene plastic and single use packaging.

These bans have increased pressure by manufacturers on our recycling facilities to accept a broader array of materials in curbside recycling programs to alleviate public pressures to ban the sale of those materials.

However, with no viable end markets for recycling these materials, we and other recyclers are working to educate and remind customers of the need for end market demand and economic viability to support sustainable recycling programs.

The most common materials banned include plastic bags and straws, polystyrene plastic, and some types of single use packaging.

These bans have increased pressure by manufacturers on our recycling facilities to accept a broader array of materials in curbside recycling and composting programs to alleviate public pressures to ban the sale of those materials.

However, with no viable end markets for many of these materials, we and other recyclers are working to educate and remind customers of the need for end market demand and economic viability to support sustainable recycling programs.

With increased focus on responsible management of plastics, our procurement team has taken a proactive approach to ensure environmental sustainability goals are prioritized in managing the products we buy.

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This is resulting in a reduction in tax incentives and grants for natural gas trucks.

Although current options for heavy-duty electric vehicles lack sufficient range and proven experience for our operations, we proactively engage in pilots of electric powered heavy duty vehicles and anticipate that we could redirect future planned capital investments in our fleet toward these assets when the vehicles prove economically and operationally viable.

Should regulation mandate an accelerated transition to electric powered vehicles, our cost to acquire vehicles needed to service

our customers could increase, capital investment required to establish sufficient charging infrastructure could be significant and investments we have made in an industry-leading natural gas fleet and infrastructure could be impaired.

Although current options for heavy-duty electric vehicles lack sufficient range and proven experience for our operations, we are proactively engaging in pilots of electric powered heavy-duty vehicles and anticipate that we could redirect future planned capital investments in our fleet toward these assets when the vehicles prove economically and operationally viable.

Should regulation mandate an accelerated transition to electric powered vehicles, our cost to acquire vehicles needed to service our customers could increase, capital investment required to establish sufficient charging infrastructure could be significant and investments we have made in an industry-leading natural gas fleet and infrastructure could be impaired.

Renewable Fuel Production

We have invested, and continue to invest, in facilities to capture and treat renewable natural gas (“RNG”) from the Company’s landfills, and RNG from landfill and dairy biogas is a significant source of fuel for our natural gas collection vehicles.

The Energy Policy Act of 2005 and Energy Independence and Security Act of 2007 authorize the Renewable Fuels Standards (“RFS”) program that promotes the production and use of renewable transportation fuels.

The Company is an EPA-registered producer of transportation fuel making compressed and liquefied RNG from landfill biogas, which qualifies as a cellulosic biofuel under the RFS program.

Oil refiners and importers are required through the RFS program to blend specified volumes of various categories of renewable transportation fuels with gasoline or buy credits, referred to as renewable identification numbers (“RINs”), from renewable fuel producers.

Market uncertainty related to the EPA’s implementation of the RFS program led to volatility and a decline in the price of RINs between 2017 and 2020.

We have invested, and continue to invest, in facilities to capture methane produced from the Company’s landfills and convert it into RNG.

RNG produced from our landfills, as well as dairy biogas, constitute a significant source of fuel for our natural gas collection vehicles.

The Energy Policy Act of 2005 and Energy Independence and Security Act of 2007 authorized the RFS program that promotes the production and use of renewable transportation fuels.

Many of our facilities are the EPA-registered producers of transportation fuel making compressed and liquefied RNG from landfill biogas, which qualifies as a cellulosic biofuel under the RFS program.

Market uncertainty related to the EPA’s implementation of the RFS program led to volatility and declines in the price of RINs between 2017 and 2020.

RIN prices rebounded in 2020 in response to a court ruling limiting the number of small refinery exemptions that the EPA could grant to renewable fuel obligations, and later following the November 2020 federal elections on the belief that the newly elected presidential administration would result in stronger enforcement of mandates for RNG and other advanced and conventional biofuels.

Federal, State and Local Climate Change Initiatives;

Sustainability

In light of regulatory and business developments related to concerns about climate change, we have identified a strategic business opportunity to provide our public and private sector customers with sustainable solutions to reduce their GHG emissions.

As part of our on-going marketing evaluations, we assess customer demand for and opportunities to develop waste services offering verifiable carbon reductions, such as waste reduction, increased recycling, and conversion of landfill gas and discarded materials into electricity and fuel.

We use carbon life cycle tools in evaluating potential new services and in establishing the value proposition that makes us attractive as an environmental service provider.

We are active in support of public policies that encourage development and use of lower carbon energy and waste services that lower users’ carbon footprints.

We understand the importance of broad stakeholder engagement in these endeavors, and actively seek opportunities for public policy discussion on more sustainable materials management practices.

In addition, we work with stakeholders at the federal and state level in support of legislation that encourages production and use of renewable, low-carbon fuels and electricity.

We continue to assess the physical risks to company operations from the effects of severe weather events and use risk mitigation planning to increase our resiliency in the face of such events.

Consistent with our Company’s long-standing commitment to corporate sustainability and environmental stewardship, we have published our 2020 Sustainability Report, which details the GHG emissions reductions we have facilitated to date and our determination to expand these reductions in the future, as well as our commitment to help make the communities in which we live and work safe, resilient and sustainable.

Our 2020 Sustainability Report can be found at https://sustainability.wm.com, but it does not constitute a part of, and is not incorporated by reference into, this Annual Report on Form 10-K.

The Company actively participates in a number of sustainability reporting programs and frameworks, including the Dow Jones Sustainability Indices, where we are “Sector Leader” for Commercial Services, the CDP, where we are among “A List” companies, and the Sustainability Accounting Standards Board, on which we serve as a member of the Board’s advisory group.

The market’s expectations were realized in December 2021, when the EPA proposed robust volumetric standards under the RFS program while proposing to deny all pending applications for small refinery exemptions.

The EPA is expected to propose a rule later in 2022 setting forth the direction of the RFS program for 2023 and years after, which rule is expected to afford additional opportunities for the biogas sector to participate in the RFS program.

We will continue to advocate for the current administration to implement policies that ensure long term stability for renewable transportation fuels, as changes in the RFS market or the structure of the RFS program can and has impacted the financial performance of the facilities constructed to capture and treat the gas.

Environmental Justice

Federal, state, and local governments are also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions.

These policies generally require permitting agencies to give heightened attention to the potential for projects to disproportionately impact low-income and minority communities.

Our Company supports policies seeking to advance high standards of environmental performance and the fair treatment of people of all races, cultures, and incomes.

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

What changed 10-K

Item 1. Business