What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-19 compared with 2024-02-13 · 556 added, 315 removed, 1295 unchanged (40% of the section changed)

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

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

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2024 consolidated financial statements of the Company, and our report dated February 19, 2025 expressed an unqualified opinion thereon.

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

Acquisition of Stericycle, Inc.

– Valuation of Customer Relationships

Description of the Matter

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

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

The transaction was accounted for as a business combination.

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

The Company valued the customer relationships using an income approach;

specifically, the multi-period excess earnings model.

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

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

How We Addressed the Matter in Our Audit

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

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

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

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

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

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

/s/ ERNST & YOUNG LLP

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Parts and supplies

Other current assets

Total current assets

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Investments in unconsolidated entities

Other long-term assets

LIABILITIES AND EQUITY

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Landfill and environmental remediation liabilities

Other liabilities

Other long-term liabilities

Total liabilities

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Loss on early extinguishment of debt, net

Equity in net losses of unconsolidated entities

Equity in net income (losses) of unconsolidated entities

Income before income taxes

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

Equity in net losses of unconsolidated entities, net of dividends

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

Loss on early extinguishment of debt, net

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Debt repayments

Premiums and other paid on early extinguishment of debt

Common stock repurchase program

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Tax payments associated with equity-based compensation transactions

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents

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Common stock repurchase program

Acquisitions and other, net

Balance, December 31, 2022

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Common stock repurchase program

Acquisitions and other, net

Balance, December 31, 2023

Adoption of new accounting standard

Consolidated net income

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

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

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

and Canada that produce renewable electricity and renewable natural gas, which is a significant source of fuel that we allocate to our natural gas fleet.

To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our Recycling Processing and Sales and WM Renewable Energy businesses, beginning in the fourth quarter of 2023, our senior management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal and resource recovery services businesses independently;

(ii) combine the results of all recycling facilities from our East and West Tier segments with our recycling brokerage and sales activities to form a newly created Recycling Processing and Sales reportable segment and (iii) include our WM Renewable Energy business as a reportable segment.

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

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

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

The acquisition expands our offerings in the U.S.

and Canada and adds operations in parts of Western Europe.

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

Refer to Note 17 for further discussion.

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

(ii) Collection and Disposal - West Tier (“West Tier”);

(iii) Recycling Processing and Sales and (iv) WM Renewable Energy.

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

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

(iii) Recycling Processing and Sales;

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

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

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

Refer to Note 19 for further discussion.

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The accompanying Consolidated Financial Statements include the accounts of WMI, its wholly-owned and majority-owned subsidiaries and certain variable interest entities for which we have determined that we are the primary beneficiary.

All material intercompany balances and transactions have been eliminated.

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

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

All material intercompany

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balances and transactions have been eliminated.

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

Estimates and Assumptions

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

Past-due receivable balances are written off when our internal collection efforts have been unsuccessful.

Past-due receivable balances are written off when our collection efforts have been unsuccessful.

Also, we recognize interest income on long-term interest-bearing notes receivable as the interest accrues under the terms of the notes.

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Balance as of December 31

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

We determined that all of our trade receivables share similar risk characteristics.

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

Based on aging analysis as of both December 31, 2023 and 2022, approximately 90 % of our trade receivables were outstanding less than 60 days .

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

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

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

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

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

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

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These costs are discussed below.

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Final Capping, Closure and Post-Closure Costs — Following is a description of our asset retirement activities and our related accounting:

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● Closure — Includes the construction of the final portion of methane gas collection systems (when required), demobilization and routine maintenance costs.

These are costs incurred after the site ceases to accept waste, but

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before the landfill is certified as closed by the applicable state regulatory agency.

These are costs incurred after the site ceases to accept waste, but before the landfill is certified as closed by the applicable regulatory agency.

These costs are recorded as an asset retirement obligation as airspace is consumed over the life of the landfill with a corresponding increase in the landfill asset.

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We develop our estimates of these obligations using input from our operations personnel, engineers and accountants.

Our estimates are based on our interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value.

Our estimates are based on our interpretation of current requirements and are intended to approximate fair value.

Absent quoted market prices, the estimate of fair value is based on the best available information, including the results of present value techniques.

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Once we have determined final capping, closure and post-closure costs, we inflate those costs to the expected time of payment and discount those expected future costs back to present value.

As of December 31, 2023, 2022 and 2021, we inflated these costs in current dollars to the expected time of payment using an inflation rate of 2.50 %, 2.50 % and 2.25 %, respectively.

As of December 31, 2024, 2023 and 2022, we inflated these costs in current dollars to the expected time of payment using an inflation rate of 2.50 %, for each year.

We discounted these costs to present value using the credit-adjusted, risk-free rate effective at the time an obligation is incurred, consistent with the expected cash flow approach.

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The fair value of closure and post-closure obligations is developed based on our estimates of the airspace consumed to date for the entire landfill and the expected timing of each closure and post-closure activity.

Because these obligations are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final capping, closure and post-closure activities could result in a material change in these liabilities, related assets and results of operations.

Because these obligations

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are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final capping, closure and post-closure activities could result in a material change in these liabilities, related assets and results of operations.

We assess the appropriateness of the estimates used to develop our recorded balances annually, or more often if significant facts change.

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Any changes related to the capitalized and future cost of the landfill assets are then recognized in accordance with our landfill depletion policy, which would generally result in depletion expense being recognized prospectively over the remaining permitted and expansion airspace of the final capping event or the remaining permitted and expansion airspace of the landfill, as appropriate.

Changes in such estimates associated with a fully

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consumed landfill result in an adjustment to the recorded liability and landfill assets with an immediate corresponding adjustment to landfill airspace depletion expense.

Changes in such estimates associated with a fully consumed landfill result in an adjustment to the recorded liability and landfill assets with an immediate corresponding adjustment to landfill airspace depletion expense.

Interest accretion on final capping, closure and post-closure liabilities is recorded using the effective interest method and is recorded as landfill operating costs, which is included in operating expenses within our Consolidated Statements of Operations.

Depletion of Landfill Assets — The depletable basis of a landfill includes (i) amounts previously expended and capitalized;

(ii) capitalized landfill final capping, closure and post-closure costs;

Depletion of Landfill Assets — The depletable basis of a landfill includes (i) amounts previously expended and capitalized, net of accumulated airspace depletion;

(ii) capitalized landfill final capping, closure and post-closure costs, net of accumulated airspace depletion;

(iii) projections of future purchase and development costs required to develop the landfill site to its remaining permitted and expansion airspace (as defined below) and (iv) projected asset retirement costs related to landfill final capping, closure and post-closure activities.

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● We have a legal right to use or obtain land to be included in the expansion plan;

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● There are no significant known technical, legal, community, business, or political restrictions or similar issues that could negatively affect the success of such expansion;

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

Of the 16 landfill sites with expansions included as of December 31, 2023, two landfills required the Chief Financial Officer to approve the inclusion of the unpermitted airspace because the permit application process did not meet the one - or five-year requirements.

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

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

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

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

Under current laws

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

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

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Next, we review the same type of information with respect to other named and unnamed PRPs.

Estimates of the costs for the likely remedy are then either developed using our internal resources or by third-party environmental engineers or other service providers.

Estimates of the costs for the likely remedy are then developed using our internal resources, third-party environmental engineers or other service providers.

Internally developed estimates are based on:

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● Information available from regulatory agencies as to costs of remediation;

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● The number, financial resources and relative degree of responsibility of other PRPs who may be liable for remediation of a specific site;

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These adjustments could be material in any given period.

Where we believe that both the amount of a particular environmental remediation liability and the timing of the payments are fixed or reliably determinable, we inflate the cost in current dollars until the expected time of payment and discount the cost to present value using a risk-free discount rate, which is based on the rate for U.S.

Treasury bonds with a term approximating the weighted average period until settlement of the underlying obligation.

We record our obligations on an undiscounted basis unless we are aware of a material environmental liability where we believe that both the amount and timing of the payments are fixed or reliably determinable.

Property and Equipment (exclusive of landfills, discussed above)

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When property and equipment are retired, sold or otherwise disposed of, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is included in results of operations as an offset or increase to operating expense for the period.

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The estimated useful lives for significant property and equipment categories are as follows (in years):

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Furniture, fixtures and office equipment

(a) Includes recycling and renewable natural gas (“RNG”) facilities as well as containers.

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

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

Our operating lease activities primarily consist of leases for real estate, landfills and operating equipment.

Our operating lease activities primarily consist of leases for real estate, landfills, fleet vehicles and operating equipment.

Our financing lease activities primarily consist of leases for operating equipment, railcars and landfill assets.

Our leases have varying terms.

Some may include renewal or purchase

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options, escalation clauses, restrictions, penalties or other obligations that we consider in determining minimum lease payments.

Some may include renewal or purchase options, escalation clauses, restrictions, penalties or other obligations that we consider in determining minimum lease payments.

The leases are classified as either operating leases or financing leases, as appropriate.

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

Contingent Consideration — In certain acquisitions, we agree to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain negotiated goals, such as targeted revenue levels, targeted disposal volumes or the issuance of permits for expanded landfill airspace.

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volumes or the issuance of permits for expanded landfill airspace.

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

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Acquired Assets and Assumed Liabilities — Assets and liabilities arising from contingencies such as pre-acquisition environmental matters and litigation are recognized at their acquisition-date fair value when their respective fair values can be determined.

If the fair values of such contingencies cannot be readily determined, they are recognized as of the acquisition date if the contingencies are probable and an amount can be reasonably estimated.

Acquired contingencies whose fair value is not determinable during the measurement period are recognized only if they are probable and reasonably estimable.

Acquisition-date fair value estimates are revised as necessary if, and when, additional information regarding these contingencies becomes available to further define and quantify assets acquired and liabilities assumed.

Subsequent to finalization of purchase accounting, these revisions are accounted for as adjustments to income from operations.

All acquisition-related transaction costs are expensed as incurred.

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

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

We also acquired 11 solid waste and recycling businesses.

See Note 17 for additional information related to our acquisitions.

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Goodwill and Other Intangible Assets

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

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

Other intangible assets are recorded at fair value on the acquisition date and are generally amortized using either a 150% declining balance approach or a straight-line basis as we determine appropriate.

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Covenants not-to-compete are amortized over the term of the non-compete covenant, which is generally five years .

Definite-lived intangibles are amortized over their useful lives on a straight-line basis while indefinite-lived intangibles are not amortized.

Licenses, permits and other contracts are amortized over the definitive terms of the related agreements.

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

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

Fair value is

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

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

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

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

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

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

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

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

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Balances maintained in these restricted funds accounts will fluctuate based on (i) changes in statutory requirements;

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deposits made to comply with contractual arrangements;

(ii) future deposits made to comply with contractual arrangements;

(iii) the ongoing use of funds;

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Investments in Unconsolidated Entities

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

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

Investments in unconsolidated entities over which the Company has significant influence are accounted for under the equity method of accounting.

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The quantitative approach, or measurement alternative, is equal to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

The fair value of our redeemable preferred stock has been measured based on third-party investors’ recent or pending transactions in these securities, which are considered the best evidence of fair value.

The following table summarizes our investments in unconsolidated entities as of December 31 (in millions):

Equity method investments

Investments qualifying for proportional amortization method (a)

Investments without readily determinable fair values

Redeemable preferred stock

Investments in unconsolidated entities

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

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

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We monitor and assess the carrying value of our investments throughout the year for potential impairment and write them down to their fair value when other-than-temporary declines exist.

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Impairments of our investments are recorded in (gain) loss from divestitures, asset impairments and unusual items, net in our Consolidated Statements of Operations in accordance with appropriate accounting guidance.

Refer to Note 11, Note 12 and Note 16 for information related to impairments and other adjustments recognized during the reported periods.

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

Derivative Instruments

At times we use derivative instruments to manage risk.

To qualify for hedge accounting, the hedged item must expose us to risk and the related derivative instrument must reduce the exposure to that risk and meet specific hedge documentation requirements related to designation dates, expectations for hedge effectiveness and the probability that hedged future transactions will occur as forecasted.

We formally designate derivative instruments as hedges and document and assess their effectiveness at inception of the hedge and on a quarterly basis thereafter.

Forecasted transactions are evaluated for the probability of occurrence.

We are required to recognize derivative instruments at fair value as either assets or liabilities on our Consolidated Balance Sheets unless such instruments meet certain normal purchase/normal sale criteria.

For derivatives that qualify for hedge accounting, we designate them as cash flow hedges.

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

See Note 6 for additional information regarding our derivative instruments.

Foreign Currency

Our operations are primarily in the U.S.

but we also have significant operations in Canada.

but we also have significant operations in Canada and certain countries in Western Europe.

Additionally, we have certain support functions in India.

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dollars using the average exchange rate during the period.

The resulting translation difference is reflected as a component of other comprehensive income (loss).

The resulting translation difference is reflected as a component of other comprehensive income (loss), net of tax.

Foreign currency translation adjustments have primarily been impacted by fluctuations in the U.S.

dollar/Canadian dollar exchange rate which was 1.3243 at December 31, 2023, 1.3554 at December 31, 2022 and 1.2639 at December 31, 2021.

dollar/Canadian dollar exchange rate and to a lesser extent, the U.S.

dollar/Euro exchange rates and the U.S.

dollar/British pound sterling exchange rate.

dollar/Canadian dollar exchange rate was 1.4384 at December 31, 2024, 1.3243 at December 31, 2023 and 1.3554 at December 31, 2022.

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

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

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

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Revenue Recognition

We generally recognize revenue as services are performed or products are delivered.

For example, revenue typically is recognized as waste is collected, tons are received at our landfills or transfer stations, or recycling commodities are collected or delivered as product.

We bill for certain services prior to performance.

Such services include, among others, certain commercial and residential contracts, and equipment rentals.

For example, revenue typically is recognized as waste is collected;

tons are received at our landfills, transfer stations or processing facilities;

or recycling and other commodities, such as RNG, electricity and capacity, Renewable Identification Numbers (“RINs”) and Renewable Energy Credits (“RECs”), are sold.

Compliance services revenues are recognized over the contractual service period.

We also bill for certain services prior to performance.

Such services include, among others, certain commercial

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and residential contracts, and equipment rentals.

These advanced billings are included in deferred revenues and recognized as revenue in the period service is provided.

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

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

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

Environmental Protection Agency (“EPA”);

(iii) sale of Low Carbon Fuel credits designed to stimulate the use of low-carbon fuels and (iv) the sale of energy (electricity and capacity) and associated Renewable Energy Credits (“RECs”).

(iii) sale of Low Carbon Fuel credits designed to stimulate the use of low-carbon fuels and (iv) the sale of energy (electricity and capacity) and associated RECs.

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

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

We receive fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending on measures including the volume, weight, and type of waste, as specified in applicable contracts.

See Note 19 for additional information related to revenue by reportable segment and major lines of business.

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The consideration for these contracts is primarily variable in nature.

The variable elements of these contracts primarily include the number of homes and businesses served and annual rate changes based on consumer price index, fuel prices or other operating costs.

The variable elements of these contracts primarily include the number of homes and businesses served, weight, number of containers served and annual rate changes based on consumer price index, fuel prices or other operating costs.

Such contracts are generally within our collection, recycling and other lines of business and have a weighted average remaining contract life of approximately four years .

We do not disclose the value of unsatisfied performance obligations for these contracts as our right to consideration corresponds directly to the value provided to the customer for services completed to date and all future variable consideration is allocated to wholly unsatisfied performance obligations.

Environmental Credits

We generate environmental credits through our production and sale of renewable energy.

Our operating costs are associated with the production of renewable energy.

The environmental credits are a form of government incentive generated through our renewable energy production and not as a result of the physical attributes of our production.

The environmental credits are able to be separated and sold independent of the renewable energy produced.

Thus, no cost is allocated to the environmental credit when it is generated.

Capitalized Interest

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

During 2023, 2022 and 2021, total interest costs were $ 590 million, $ 425 million and $ 388 million, respectively, of which $ 63 million, $ 29 million and $ 13 million was capitalized in 2023, 2022 and 2021, respectively.

The Company is primarily subject to income tax in the U.S.

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

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

Current tax obligations associated with our income tax expense are reflected in the accompanying Consolidated Balance Sheets as a component of accrued liabilities and our deferred tax obligations are reflected in deferred income taxes.

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We estimate the amount of potential exposure we may have with respect to claims, assessments and litigation in accordance with authoritative guidance on accounting for contingencies.

We are party to pending or threatened legal proceedings covering a wide range of matters in various jurisdictions.

We are party to pending or threatened legal

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

proceedings covering a wide range of matters in various jurisdictions.

It is difficult to predict the outcome of litigation, as it is subject to many uncertainties.

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See Note 10 for discussion of our commitments and contingencies.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Supplemental Cash Flow Information

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Interest, net of capitalized interest

Income taxes (a)

(a) The increase in income taxes paid in 2022 is primarily due to the increase in pre-tax book income during 2022 and a deposit of approximately $ 103 million made to the Internal Revenue Service (“IRS”) in the fourth quarter of 2022 related to a disputed tax matter for which we expect to seek a refund.

See Note 8 for further discussion.

During 2023, we had $ 276 million of non-cash financing activities primarily from our low-income housing investment and new financing leases, which are discussed further in Notes 6 and 8.

During 2022, we had $ 225 million of non-cash financing activities primarily from our low-income housing investment and new financing leases.

Additionally, we had approximately $ 25 million and $ 135 million of non-cash investing activities related to non-cash consideration transferred as part of our acquisitions in 2023 and 2022, respectively.

Accrued capital expenditures

During 2024, 2023 and 2022, we had $ 474 million, $ 276 million and $ 225 million, respectively, of non-cash financing activities primarily from our low-income housing investments and new financing leases.

These are discussed further in Notes 6 and 8.

Additionally, we had approximately $ 20 million, $ 25 million and $ 135 million of non-cash investing activities related to non-cash consideration transferred as part of our acquisitions in 2024, 2023 and 2022, respectively.

See Note 17 for further discussion of our acquisitions.

During 2021, we had $ 30 million of non-cash financing activities from new financing leases.

Non-cash investing and financing activities are generally excluded from the Consolidated Statements of Cash Flows.

Adoption of New Accounting Standards in 2024

Investments—Equity Method and Joint Ventures:

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

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

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

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

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

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

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

Improvements to Reportable Segment Disclosures

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

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

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

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

See Note 19 for further discussion of our segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Landfill and Environmental Remediation Liabilities

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Our recorded liabilities as of December 31, 2024 include the impacts of inflating certain of these costs based on our expectations of the timing of cash settlement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property and Equipment

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Accumulated depletion of landfill airspace

Property and equipment, net

(a) As of December 31, 2023 and 2022, includes $ 1.5 billion and $ 1.1 billion, respectively, related to recycling facilities.

As of December 31, 2023 and 2022, includes $ 720 million and $ 570 million, respectively, related to RNG facilities .

Property and equipment, net (b)

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(b) Includes approximately $ 3.4 billion and $ 2.8 billion of construction in progress as of December 31, 2024 and 2023, respectively.

See Note 11 for information regarding asset impairments.

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

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

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

We have a controlling interest in the business, and it is, therefore, consolidated in our financial statements as part of our Recycling Processing and Sales segment.

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

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

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

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

Partially offsetting the decrease in our goodwill balance was a $ 90 million increase in goodwill associated with acquisitions primarily within our Collection and Disposal businesses.

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

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

See Notes 11 and 17 for additional information.

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

Prior to 2023, our recycling facilities were reflected as a component of the respective Tier segments and our recycling brokerage services were included as a component of our “Other” operations.

Reclassifications have been made to our prior period consolidated financial

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

information to conform to the current year presentation.

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

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

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

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Balance, December 31, 2024

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our other intangible assets consisted of the following as of December 31 (in millions):

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Additional information related to other intangible assets acquired through business combinations is included in Note 17.

As of December 31, 2023 and 2022, we had $ 21 million and $ 19 million, respectively, of licenses, permits and other intangible assets that are not subject to amortization because they do not have stated expirations or have routine, administrative renewal processes.

As of December 31, 2024 and 2023, we had $ 970 million and $ 21 million, respectively, of indefinite lived trade names, licenses, permits and other intangible assets that are not subject to amortization because they do not have stated expirations or have routine, administrative renewal processes.

As of December 31, 2024, we expect annual amortization expense related to other intangible assets to be $ 448 million in 2025, $ 405 million in 2026, $ 300 million in 2027, $ 267 million in 2028 and $ 220 million in 2029.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Debt and Derivatives

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Senior notes, maturing through 2054, interest rates ranging from 0.75 % to 7.75 % (weighted average interest rate of 4.2 % as of December 31, 2024 and 3.7 % as of December 31, 2023)

Term Loan, interest rate of 5.1 % as of December 31, 2022

Canadian senior notes, C$ 500 million maturing September 2026, interest rate of 2.6 %

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Classification

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

(ii) $ 859 million of short-term borrowings under our commercial paper program (net of related discount on issuance);

(iii) $ 175 million of other debt with scheduled maturities within the next 12 months, including $ 60 million of tax-exempt bonds, and (iv) $ 156 million of 3.5 % senior notes that mature in May 2024.

(ii) $ 1.2 billion of short-term borrowings under our commercial paper program (net of related discount on issuance);

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

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

As of December 31, 2024, we have classified $ 2.6 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $ 3.5 billion long-term U.S.

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

The remaining $ 334 million of debt maturing in the next 12 months is classified as current obligations.

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

$3.5 Billion Revolving Credit Facility — Our $3.5 billion revolving credit facility, maturing May 2027, provides us with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper program.

and Canadian revolving credit facility (“$3.5 billion revolving credit facility”).

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

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

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

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

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

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

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

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

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

WM Holdings, Inc.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

The interest rates we pay on outstanding U.S.

or Canadian loans are based on a secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”) or the Canadian Dollar Offered Rate (“CDOR”), respectively, plus a spread depending on WMI’s senior public debt rating assigned by Moody’s Investors Service, Inc.

or Canadian loans are based on a secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”) or the Canadian Overnight Repo Rate Average (“CORRA”) administered by the Bank of Canada, respectively, plus a spread depending on our senior public debt rating assigned by Moody’s Investors Service, Inc.

and Standard and Poor’s Global Ratings.

The spread above SOFR or CDOR can range from 0.585 % to 1.025 % per annum, plus a credit adjustment spread of 0.10 % per annum on SOFR-based rates (the “SOFR Credit Adjustment Spread”) to account for the transition from the use of LIBOR to SOFR in such rate calculations.

The spread above SOFR or CORRA can range from 0.585 % to 1.025 % per annum, plus applicable credit adjustments.

We also pay certain other fees set forth in the $3.5 billion revolving credit facility agreement, including a facility fee based on the aggregate commitment, regardless of usage.

As of December 31, 2024, we had no outstanding borrowings under this facility.

We had $ 859 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program and $ 180 million of letters of credit issued, both supported by the facility, leaving unused and available credit capacity of $ 2.5 billion as of December 31, 2023.

We had $ 1.2 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program and $ 224 million of letters of credit issued, both supported by the facility, leaving unused and available credit capacity of $ 2.1 billion as of December 31, 2024.

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

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The commercial paper program is fully supported by our $3.5 billion revolving credit facility.

As of December 31, 2023, we had $ 859 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program.

Term Loan — In May 2022, we entered into a $ 1.0 billion, two-year , U.S.

term credit agreement maturing May 2024 (“Term Loan”) to support general corporate purposes.

WM Holdings guaranteed all obligations under our Term Loan.

The interest rate we paid on our Term Loan was generally based on SOFR, plus a spread depending on WMI’s senior public debt rating assigned by Moody’s Investors Service, Inc.

and Standard and Poor’s Global Ratings.

Our Term Loan had a contractual maturity of May 2024, but we elected to repay all outstanding borrowings under our Term Loan in August 2023 with proceeds from our July 2023 senior notes issuance, which is discussed further below.

As of December 31, 2024, we had $ 1.2 billion of outstanding borrowings (net of related discount on issuance) under our commercial paper program.

Other Letter of Credit Lines — As of December 31, 2024, we had utilized $ 862 million of other uncommitted letter of credit lines with terms extending through December 2028.

Debt Borrowings and Repayments

Commercial Paper Program — During the year ended December 31, 2023 we made cash repayments of $ 18.7 billion, which were partially offset by $ 17.8 billion of cash borrowings (net of related discount on issuance).

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

Senior Notes — In February 2023, WMI issued $ 750 million and $ 500 million of 4.625 % senior notes due February 2030 and February 2033, respectively, the net proceeds of which were $ 1.24 billion.

We used the net proceeds to reduce outstanding borrowings under our commercial paper program, repay $ 500 million of WMI’s 2.4 % senior notes upon maturity in May 2023, and for general corporate purposes, including our planned and ongoing investments in our Recycling Processing and Sales and WM Renewable Energy segments.

In July 2023, WMI issued $ 750 million and $ 1.25 billion of 4.875 % senior notes due February 2029 and February 2034, respectively, the net proceeds of which were $ 1.97 billion.

We used the net proceeds to reduce outstanding borrowings under our commercial paper program, repay $ 1.0 billion of outstanding borrowings under our Term Loan and for general corporate purposes.

Term Loan — In August 2023, we repaid $ 1.0 billion of outstanding borrowings under our Term Loan with proceeds from our July 2023 senior notes issuance discussed above and contemporaneously terminated the facility.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Borrowings and Repayments

Commercial Paper Program — During the year ended December 31, 2024 we made cash repayments of $ 12.3 billion, which were partially offset by $ 12.7 billion of cash borrowings (net of related discount on issuance).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Financing Leases and Other — The increase in our financing leases and other debt obligations in 2023 is primarily related to a note payable associated with our low-income housing investment discussed in Note 8, which increased our debt obligations by $ 183 million, and $ 93 million primarily related to non-cash financing leases.

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Scheduled Debt Payments

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

As discussed above, we have the intent and ability to refinance certain 2024 scheduled maturities on a long-term basis, including portions of our commercial paper borrowings and our $ 156 million of 3.5% senior notes that mature in May 2024.

As discussed above, we have the intent and ability to refinance our commercial paper borrowings on a long-term basis.

See Note 7 below for further discussion of our financing lease arrangements.

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

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

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

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As of December 31, 2024 and 2023, we were in compliance with our Leverage Ratio covenant.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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As of December 31, 2024 and 2023, we were in compliance with all covenants and restrictions under our financing arrangements, in addition to our Leverage Ratio covenant, that may have a material effect on our Consolidated Financial Statements.

Interest Rate Derivatives

During 2023, we entered into treasury rate locks with a total notional value of $ 800 million to secure underlying interest rates associated with our senior notes issuances discussed above.

We designated our treasury rate locks as cash flow hedges.

These treasury rate locks were terminated contemporaneously with the related issuances of senior notes in 2023, and we received cash of $ 19 million to settle the related assets.

The deferred gains are being amortized as a decrease to interest expense over the ten-year life of the related senior notes issuances using the effective interest method.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

We designated our treasury locks as cash flow hedges.

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

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

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

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

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

Our financing lease activities primarily consist of leases for operating equipment, railcars and landfill assets.

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

Adoption of new accounting standard

Federal tax credits

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

(ii) the tax implications of impairments;

(iii) an unfavorable increase in permanent differences between taxable income and accounting income associated with our treatment of landfill closure and post-closure costs;

(iv) variations in our income before income taxes;

(v) the realization of state net operating losses and credits;

(vi) excess tax benefits associated with equity‑based compensation transactions and (vii) tax audit settlements.

(ii) variations in our income before income taxes;

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

WASTE MANAGEMENT, INC.

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Income before income taxes

Investments Qualifying for Federal Tax Credits — We have significant financial interests in entities established to invest in and manage low-income housing properties.

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

and Canada that produce renewable electricity and RNG.

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

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

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

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

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

We account for our investments in these entities using the equity method of accounting, recognizing our share of each entity’s results of operations and other reductions in the value of our investments in equity in net losses of unconsolidated entities within our Consolidated Statements of Operations.

During the years ended December 31, 2023, 2022 and 2021, we recognized net losses of $ 66 million, $ 65 million and $ 51 million, respectively, and a reduction in our income tax expense of $ 108 million, $ 99 million and $ 74 million, respectively, primarily due to federal tax credits realized from these investments as well as the tax benefits from the pre-tax losses realized.

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

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

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

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

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

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

In addition, during the years ended December 31, 2024, 2023 and 2022, we recognized interest expense of $ 24 million, $ 15 million and $ 14 million, respectively, associated with our investments in low-income housing properties.

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

Tax Implications of Impairments — The non-cash impairment charges recognized during 2023 are not expected to be deductible for tax purposes.

The impact of these non-deductible charges and the resulting difference between book and taxable income is an increase in income tax expense of $ 50 million.

The non-cash impairment charges recognized during 2022 and 2021 were deductible for tax purposes.

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

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

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

Permanent Differences —During 2023, 2022 and 2021 we recognized additional income tax expense of $ 34 million, $ 14 million and $ 2 million, respectively, related to permanent differences between taxable income and accounting income.

This increase is largely due to an increase in taxable interest income associated with the Company’s election to deduct landfill closure and post-closure costs for income tax purposes when incurred and accrued.

The increase in taxable interest income is due to the increase in the applicable federal rate published by the IRS.

State Net Operating Losses and Credits — During 2023, 2022 and 2021, we recognized state net operating losses and credits resulting in a reduction in our income tax expense of $ 20 million, $ 8 million and $ 15 million, respectively.

Equity-Based Compensation — During 2023, 2022 and 2021, we recognized a reduction in our income tax expense of $ 14 million, $ 17 million and $ 18 million, respectively, for excess tax benefits related to the vesting or exercise of equity-based compensation awards.

Tax Audit Settlements — We file income tax returns in the U.S.

and Canada, as well as other state and local jurisdictions.

We are currently under audit by various taxing authorities, as discussed below, and our audits are in various stages of completion.

During the reported periods, we settled various tax audits which resulted in a reduction in our income

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

Any unresolved issues

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tax expense of $ 5 million, $ 6 million and $ 13 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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

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

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

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

In response to the notice, the Company made a deposit of approximately $ 103 million with the IRS.

The Company expects to seek a refund of the entire amount deposited with the IRS and litigate any denial of the claim for refund.

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

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

As of December 31, 2024 and 2023, the IRS deposit, net of reserve for uncertain tax positions, was classified as a component of other long-term assets in the Company’s Consolidated Balance Sheets.

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

We are also currently undergoing audits by various state and local jurisdictions for tax years that date back to 2014.

We are also currently undergoing audits by the Canada Revenue Agency for the 2021 tax year and various state and local jurisdictions for tax years that date back to 2014.

Deferred Tax Assets (Liabilities)

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Miscellaneous and other reserves, net

Total deferred tax assets

Valuation allowance

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Net deferred tax liabilities

As of December 31, 2023, we had $ 2 million of federal net operating loss carry-forwards with expiration dates through 2026 and $ 2.3 billion of state net operating loss carry-forwards with expiration dates through 2043.

We also had $ 8 million of federal capital loss carry-forwards with expiration dates through 2025, $ 39 million of foreign tax credit carry-forwards with expiration dates through 2033 and $ 9 million of state tax credit carry-forwards with expiration dates through 2039.

These net deferred tax liabilities are included as a component of other long-term assets, accrued liabilities and deferred income taxes in our Consolidated Balance Sheets.

As of December 31, 2024, we had $ 123 million of international net operating loss carry-forwards with expiration dates through 2041 and $ 2.0 billion of state net operating loss carry-forwards with expiration dates through 2044.

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

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

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Additions based on tax positions related to the current year

Additions based on tax positions of prior years

Accrued interest

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Employee Benefit Plans

Defined Contribution Plans — Waste Management sponsors a 401(k) retirement savings plan that covers employees, except those working subject to collective bargaining agreements that do not provide for coverage under the plan.

Defined Contribution Plans — The Company sponsors a 401(k) retirement savings plan that covers employees, except those working subject to collective bargaining agreements that do not provide for coverage under the plan.

employees who are not subject to such collective bargaining agreements are generally eligible to participate in the plan following a 90-day waiting period after hire and may contribute as much as 50 % of their eligible annual compensation and 80 % of their annual incentive plan bonus, subject to annual contribution limitations established by the IRS.

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Both employee and Company contributions are in cash and vest immediately.

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

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

Certain employees outside the U.S., including those in Canada, participate in defined contribution plans maintained by the Company in compliance with laws of the appropriate jurisdiction.

Certain employees outside the U.S., including those in Canada and across Europe, participate in defined contribution plans maintained by the Company in compliance with laws of the appropriate jurisdiction.

Charges to operating and selling, general and administrative expenses for our defined contribution plans totaled $ 125 million, $ 118 million and $ 112 million for the years ended December 31, 2024, 2023 and 2022, respectively.

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

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

As of December 31, 2022, the combined benefit obligation of these pension plans was $ 117 million supported by $ 113 million of combined plan assets, resulting in an aggregate unfunded benefit obligation for these plans of $ 4 million.

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

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

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

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of Collective

EIN/Pension Plan

Reported Status(a)

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Various dates

Pension Plan Private Sanitation Union, Local 813 IBT

Red and Critical

Various dates

Contributions to other Multiemployer Pension Plans

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As defined in the Pension Protection Act of 2006, among other factors, plans reported as critical are generally less than 65% funded and plans reported as endangered are generally less than 80% funded.

Under the Multiemployer Pension Reform Act of 2014, a plan is generally in critical and declining status if it (i) is certified to be in critical status pursuant to the Pension Protection Act of 2006 and (ii) is projected to be insolvent within the next 15 years or, in certain circumstances, 20 years .

Under the Multiemployer Pension Reform Act of 2014, a plan is

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generally in critical and declining status if it (i) is certified to be in critical status pursuant to the Pension Protection Act of 2006 and (ii) is projected to be insolvent within the next 15 years or, in certain circumstances, 20 years.

(b) The “FIP/RP Status” column indicates plans for which a Funding Improvement Plan (“FIP”) or a Rehabilitation Plan (“RP”) has been implemented.

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Contributing employers, however, may eliminate the surcharge by entering into a collective bargaining agreement that meets the requirements of the applicable FIP or RP.

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(d) Of the Multiemployer Pension Plans considered to be individually significant, the Company was listed in the Form 5500 of the Suburban Teamsters of Northern Illinois Pension Plan as providing more than 5% of the total contributions for plan years ending December 31, 2024 and 2023.

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In an ongoing effort to mitigate risks of future cost increases and reductions in available capacity, we continue to evaluate various options to access cost effective sources of financial assurance.

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Insurance — We carry insurance coverage for protection of our assets and operations from certain risks including 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.

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

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

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valuation or internal estimates.

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

The accruals for these liabilities could be revised if future occurrences or loss development significantly differ from such valuations and estimates.

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Cash paid and other

Assumed liabilities from acquisitions

Balance as of December 31

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

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

For contracts that require us to

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

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

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Other Commitments

● Royalties — We have various arrangements that require us to make royalty payments to third parties including prior land owners, lessors or host communities where our operations are located.

● Royalties — We have various arrangements that require us to make royalty payments to third parties including prior landowners, lessors or host communities where our operations are located.

Our obligations generally are based on per ton rates for waste actually received at our transfer stations or landfills.

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

Additionally, our Collection and Disposal and Corporate and Other businesses earn royalties from our WM Renewable Energy segment related to the

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transfer of landfill gas to our WM Renewable Energy segment from our active and closed landfills.

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

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

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Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be paid to the sellers if established financial targets or other market conditions are achieved post-closing and we have recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition.

We do not currently believe that contingent obligations to provide indemnification or pay additional post-closing consideration in connection with our divestitures or acquisitions will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

We do not currently believe that contingent obligations to provide indemnification or pay additional post-closing consideration in connection with our divestitures or acquisitions

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will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

● WMI and WM Holdings guarantee the service, lease, financial and general operating obligations of certain of their subsidiaries.

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

In addition to remediation activity

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required by state or local authorities, such liabilities include PRP investigations.

In addition to remediation activity required by state or local authorities, such liabilities include PRP investigations.

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

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

however, in the first quarter of 2024, the EPA publicly issued a letter alleging that the remedial design has serious deficiencies and providing MIMC and IPC time to submit a remedy plan.

Due to increases in the estimated costs of the remedy, we recorded an additional $ 17 million liability for MIMC’s estimated potential share of such costs in 2023.

The total recorded liability as of December 31, 2023 and 2022 was $ 85 million and $ 68 million, respectively.

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

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

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

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

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

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

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

As of the date of this filing, we are not aware of any matters that are required to be disclosed pursuant to this standard.

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

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

Some of the lawsuits may seek to have us pay the costs of monitoring of allegedly affected sites and health care examinations of allegedly affected persons for a substantial period of time even where no actual damage is

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While we believe we have meritorious defenses to these lawsuits, the ultimate resolution is often substantially uncertain due to the difficulty of determining the cause, extent and impact of alleged contamination (which may have occurred over a long period of time), the potential for successive groups of complainants to emerge, the diversity of the individual plaintiffs’ circumstances, and the potential contribution or indemnification obligations of co-defendants or other third parties, among other factors.

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We currently do not believe that the eventual outcome of any such actions will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

On November 4, 2024, the Company acquired Stericycle.

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

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

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

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

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

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

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

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

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

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

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

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

On January 17, 2025, the U.S.

Attorney filed a complaint in the U.S.

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

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

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

Drug Enforcement Administration (“DEA”), which executed a search warrant at a facility in Rancho Cordova, California and an administrative inspection warrant at a facility in Indianapolis, Indiana for materials related to Stericycle’s now-divested Domestic Environmental Solutions business of collecting, transporting, and destroying controlled substances from retail customers (the “ESOL Retail Controlled Substances Business”).

On that same day, agents from the California Department of Toxic Substances Control executed a separate search warrant at the Rancho Cordova facility.

Since that time, the U.S.

Attorney’s Office for the Eastern District of California (“USAO EDCA”) has been overseeing criminal and civil investigations of the ESOL Retail Controlled Substances Business.

The USAO EDCA informed Stericycle that the investigations relate to Stericycle’s operation and sale of its ESOL Retail Controlled Substances Business that was divested in 2020 and has asserted that Stericycle and some of Stericycle’s current or former employees may have civil and criminal liability under the Controlled Substances Act and other federal statutes related to that business.

Stericycle has been cooperating with the ongoing investigations, which are limited to the period of Stericycle’s historical operation and ownership of the ESOL Retail Controlled Substances Business from 2015 through 2020.

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

In June 2022, we and certain of our officers were named as defendants in a complaint alleging violation of the federal securities laws and seeking certification as a class action in the U.S.

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Multiemployer Defined Benefit Pension Plans — About 20 % of our workforce is covered by collective bargaining agreements with various local unions across the U.S.

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

and Canada, and certain parts of Europe.

As a result of some of these

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

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

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A complete or partial withdrawal from a Multiemployer Pension Plan may also occur if employees covered by a collective bargaining agreement vote to decertify a union from continuing to represent them.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of a union, or relocation, reduction or discontinuance of certain operations) may also trigger a complete or partial withdrawal from one or more of these pension plans.

Any other circumstance resulting in a decline in Company contributions to a Multiemployer Pension Plan through a reduction in the labor force, whether through attrition over time or through a business event (such as the discontinuation or nonrenewal of a customer contract, the decertification of a union, or relocation, reduction or discontinuance of certain operations) may also trigger a complete or partial withdrawal from one or more of these pension plans.

We do not believe that any future liability relating to our past or current participation in, or withdrawals from, the Multiemployer Pension Plans to which we contribute will have a material adverse effect on our business, financial condition or liquidity.

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In response to the notice, the Company made a deposit of approximately $ 103 million with the IRS.

The Company expects to seek a refund of the entire amount deposited with the IRS and litigate any denial of the claim for refund.

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

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

As of December 31, 2024 and 2023, the IRS deposit, net of reserve for uncertain tax positions, was classified as a component of other long-term assets in the Company’s Consolidated Balance Sheets.

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Asset impairments

During the year ended December 31, 2024, we recognized $ 82 million of net charges primarily consisting of (i) a $ 54 million charge required to increase the estimated fair value of a liability associated with the expected disposition of an investment the Company holds in a waste diversion technology business within Corporate and Other;

(ii) a $ 14 million loss associated with the divestiture of a minority investment in a medical waste company within Corporate and Other, in connection with our acquisition of Stericycle and (iii) a $ 13 million charge pertaining to reserves for loss contingencies in our Corporate and Other to adjust an indirect wholly-owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a closed site, as discussed in Note 10 .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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During the year ended December 31, 2021, we recognized net gains of $ 16 million primarily consisting of (i) a $ 35 million pre-tax gain from the recognition of cumulative translation adjustments on the divestiture of certain non-strategic Canadian operations in our East Tier and (ii) an $ 8 million gain from divestitures of certain ancillary operations within our Collection and Disposal businesses.

These gains were partially offset by (i) a $ 20 million charge pertaining to reserves for loss contingencies within Corporate and Other and (ii) $ 8 million of asset impairment charges primarily related to our WM Renewable Energy segment.

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

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

Equity in Net Losses of Unconsolidated Entities

The losses for the reported years were primarily related to our noncontrolling interests in entities established to invest in and manage low-income housing properties.

Equity in Net Income (Losses) of Unconsolidated Entities

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

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

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

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

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

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

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Securities(a)

Adjustments(b)

Balance, December 31, 2021

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

(b) As a result of the divestiture of certain non-strategic Canadian operations in 2021, we reclassified $ 35 million of cumulative foreign currency translation adjustments from accumulated other comprehensive income to (gain) loss from divestitures, asset impairments and unusual items, net within our Consolidated Statement of Operations .

Capital Stock, Dividends and Common Stock Repurchase Program

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As of December 31, 2024, we had 401.5 million shares of common stock issued and outstanding.

The Board of Directors is authorized to issue preferred stock in series, and with respect to each series, to fix its designation, relative rights (including voting, dividend, conversion, sinking fund, and redemption rights), preferences (including dividends and liquidation) and

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

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

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

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Total repurchases (in millions)

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

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

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

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

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

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

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

We reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased.

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

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

We also repurchased an additional 0.6 million shares of our common stock in open market transactions in compliance with Rule 10b5-1 and Rule 10b-18 of the

We reflected the applicable excise tax in treasury stock

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Exchange Act for $ 83 million, inclusive of per-share commissions.

as part of the cost basis of the stock repurchased.

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

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

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

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

(c) We executed and completed three ASR agreements during 2021 to repurchase $ 1.0 billion of our common stock and received 7.0 million shares in connection with these ASR agreements.

Additionally, in December 2021, we executed an ASR agreement to repurchase $ 350 million of our common stock.

At the beginning of the repurchase period, we delivered $ 350 million in cash and received 1.7 million shares based on a stock price of $ 160.67 .

The ASR agreement completed in January 2022, at which time we received 0.4 million additional shares based on a final weighted average price of $ 160.33 .

We announced in December 2023 that the Board of Directors has authorized up to $ 1.5 billion in future share repurchases, excluding the 1% excise tax.

This new authorization supersedes and replaces remaining authority under the prior Board of Directors’ authorization for share repurchases announced in December 2022.

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

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

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

Equity-Based Compensation

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January through June and July through December.

At the end of each offering period, enrolled employees have purchased shares of our common stock at a price equal to 85 % of the lesser of the market value of the stock on the first and last day of the applicable offering period.

The ESPP was recently amended, and beginning in 2024, enrolled employees will purchase shares of our common stock at a price equal to 85 % of the market value on the last day of the applicable offering period.

At the end of each offering period, enrolled employees purchase shares of our common stock at a price equal to 85 % of the market value on the last day of the applicable offering period.

The purchases are made at the end of an offering period with funds accumulated through payroll deductions over the course of the offering period.

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In May 2023, our stockholders approved our 2023 Stock Incentive Plan (the “2023 Plan”) to replace our 2014 Stock Incentive Plan (the “2014 Plan”).

Upon approval of the 2023 Plan, no further awards could be granted under the 2014 Plan.

Pursuant to the terms of the 2023 Plan, approximately 15.2 million shares of our common stock that were previously available for issuance pursuant to future grants of awards under the 2014 Plan are now available for issuance under the 2023 Plan, in addition to any shares of our common stock that were subject to outstanding awards under the 2014 Plan that subsequently cease to be subject to such awards as a result of the forfeiture, cancellation or termination.

Upon approval of the 2023 Plan, no further awards could be granted under the 2014 Plan, and the 15.2 million shares of our common stock that were previously available for issuance under the 2014 Plan became available for issuance under the 2023 Plan, in addition to any shares of our common stock that were subject to outstanding awards under the 2014 Plan that subsequently cease to be subject to such awards as a result of the forfeiture, cancellation or termination.

We did not request that our stockholders approve any shares in addition to the shares that roll over from the 2014 Plan for issuance pursuant to the 2023 Plan.

As of December 31, 2024, approximately 13.5 million shares were available for future grants under the 2023 Plan.

Our equity-based compensation awards described herein have been made pursuant to our 2023 Plan or our 2014 Plan, and certain employees hold vested unexercised stock options granted under our 2009 Stock Incentive

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Plan (together with the 2023 Plan and the 2014 Plan, the “Incentive Plans”).

Our equity-based compensation awards described herein have been made pursuant to our 2023 Plan or our 2014 Plan (collectively, the “Incentive Plans”).

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The 2024 annual stock incentive plan awards granted to the Company’s senior leadership team, which generally includes the Company’s executive officers, included a combination of PSUs and stock options.

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

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

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

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

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

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

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RSUs may not be voted or sold by award recipients until time-based vesting restrictions have lapsed.

RSUs primarily provide for three-year cliff vesting and include dividend equivalents accumulated during the vesting period.

RSUs currently outstanding primarily provide for three-year cliff vesting and include dividend equivalents accumulated during the vesting period.

Unvested units are subject to forfeiture in the event of voluntary or for-cause termination.

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

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

At the end of the performance period, the number of shares awarded can range from 0 % to 200 % of the

Both types of PSUs are

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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

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

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Unvested as of December 31, 2024

The determination of achievement of performance results and corresponding vesting of PSUs for the three-year performance period ended December 31, 2023 was performed by the Management Development and Compensation Committee of our Board of Directors in February 2024.

The determination of achievement of performance results and corresponding vesting of PSUs for the three-year performance period ended December 31, 2024 was performed by the Management Development and Compensation Committee of our Board of Directors in January 2025.

Accordingly, vesting information for such awards is not included in the table above as of December 31, 2024.

The “vested” PSUs are for the three-year performance period ended December 31, 2022, as achievement of performance results and corresponding vesting was determined in January 2023.

The performance of the Company’s common stock for purposes of the TSR PSUs exceeded maximum performance criteria, and the Company’s financial results, as measured for purposes of the Cash Flow PSUs, exceeded target performance criteria.

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

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

Accordingly, recipients of the PSU awards received a payout of 200 % of the vested TSR PSUs and 200 % of the vested Cash Flow PSUs.

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PSUs receive dividend equivalents that are paid out in cash based on the number of shares that vest at the end of the awards’ performance period.

Subject to attainment of the performance metrics described above, PSUs are payable to an employee (or his beneficiary) upon death or disability as if that employee had remained employed until the end of the performance period.

Subject to attainment of the performance metrics described above, PSUs are payable to an employee (or applicable beneficiary) upon death or disability as if that employee had remained employed until the end of the performance period.

PSUs are generally subject to pro-rata vesting upon an employee’s involuntary termination other than for cause and are subject to forfeiture in the event of voluntary or for-cause termination.

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As of December 31, 2024, we had approximately 183,000 vested deferred units outstanding.

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

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

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

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

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

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

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Exercisable as of December 31, 2024 (c)

(a) Includes approximately 83,000 stock options exercised pursuant to a written trading plan that provided for net share settlement, resulting in the Company withholding approximately 70,000 shares of our common stock to cover the associated stock option exercise price and taxes.

(a) Includes approximately 118,000 stock options exercised pursuant to written trading plans that provided for net share settlement, resulting in the Company withholding approximately 89,000 shares of our common stock to cover the associated stock option exercise price and taxes.

(b) Stock options outstanding as of December 31, 2024 have a weighted average remaining contractual term of 5.9 years and an aggregate intrinsic value of $ 174 million based on the market value of our common stock on December 31, 2024.

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

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

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

Fair Value Measurements

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Available-for-sale securities

Significant unobservable inputs (Level 3):

Redeemable preferred stock

Total assets measured at fair value

Cash Equivalents and Money Market Funds

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Available-for-Sale Securities

Our available-for-sale securities include restricted trust funds and an investment in an unconsolidated entity, as discussed in Note 18.

Our available-for-sale securities include restricted trust funds and investments in unconsolidated entities as discussed in Note 18.

We invest primarily in debt securities, including U.S.

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

Redeemable Preferred Stock

Redeemable preferred stock related to a noncontrolling investment in an unconsolidated entity and was included in investments in unconsolidated entities in our Consolidated Balance Sheets.

The fair value of our investment was measured based on third-party investors’ recent or pending transactions in these securities, which were considered the best evidence of fair value.

When this evidence was not available, we used other valuation techniques as appropriate and available.

These valuation methodologies may have included transactions in similar instruments, discounted cash flow techniques, third-party appraisals or industry multiples and public company comparable transactions.

While we continue to hold this investment, in 2023, we determined that the carrying value of the investment was fully impaired.

This write-off resulted in (i) a $ 25 million impairment charge to the income statement and (ii) the recognition of an additional $ 23 million unrealized loss, net of a deferred tax benefit of $ 8 million, within Accumulated Other Comprehensive Income (Loss).

Refer to Notes 11 and 12 for additional information.

Fair Value of Debt

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These amounts have not been revalued since those dates, and current estimates of fair value could differ significantly from the amounts presented.

See Note 11 for information related to our nonrecurring fair value measurements.

See Note 17 for information related to the nonrecurring fair value measurement of assets and liabilities acquired in connection with our acquisition of Stericycle.

Acquisitions and Divestitures

Stericycle Acquisition

On June 3, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire all outstanding shares of Stericycle for $ 62.00 per share in cash, representing a total enterprise value of approximately $ 7.2 billion (net of cash acquired) when including the assumption of $ 0.5 billion of debt and the repayment of approximately $ 0.8 billion of net debt.

The acquisition expands our offerings in the U.S., Canada and parts of Western Europe by providing RWCS and SID services that protect people and brands, promote health and well-being and safeguard the environment.

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

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

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

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

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

The acquisition is accounted for as a business combination.

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

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

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

(i) property and equipment were valued primarily using the cost approach with significant assumptions including replacement cost, trend indices, and normal useful lives;

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

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

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

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

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

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

Goodwill of $ 3.6 billion was calculated as the excess of the consideration paid over the net assets recognized and represents the future economic benefits expected to arise from other assets acquired that could not be individually identified and separately recognized and from synergies of the combination.

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

November 4, 2024

Cash and cash equivalents

Accounts and other receivables (a)

Parts and supplies

Other current assets

Assets held for sale (b)

Property and equipment

Other intangible assets

Accounts payable

Accrued liabilities

Deferred revenues

Current portion of long-term debt

Liabilities held for sale (b)

Long-term debt, less current portion

Deferred income taxes

Other liabilities

Total purchase price

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

See Note 2 for further discussion.

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

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

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

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

Examples of adjustments made to arrive at the pro forma amounts include, but are not limited to, the following:

• Transaction expenses incurred by us and Stericycle;

• Elimination of revenue and expenses between us and Stericycle;

• Adjustments to depreciation and amortization expense due to step-up in fair value of the acquired assets;

• Interest expense adjustments;

• Accounting policy alignment adjustments;

• Income tax adjustments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Operating revenues

Net income attributable to Waste Management, Inc.

Other 2024 Acquisitions

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

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

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

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

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

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

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

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

2023 Acquisitions

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Other intangible assets included $ 34 million of customer relationships and $ 10 million of covenants not-to-compete.

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

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

Total consideration, net of cash acquired, for all acquisitions was $ 507 million, which included $ 372 million in net cash paid and $ 135 million in non-cash consideration, primarily related to purchase price holdbacks and the conversion of $ 67 million in secured convertible promissory notes receivable into equity of the acquired business.

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

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

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

2021 Acquisitions

During the year ended December 31, 2021, we acquired 11 businesses primarily related to our Collection and Disposal businesses.

Total consideration, net of cash acquired, for all acquisitions was $ 94 million, which included $ 73 million in net cash paid and $ 21 million of other consideration, primarily purchase price holdbacks and the settlement of a preexisting promissory note with one of the acquired businesses.

In addition, we paid $ 3 million of holdbacks, primarily related to current year acquisitions.

Our 2021 acquisitions discussed above include our acquisition of the remaining ownership interest in a waste diversion technology company.

Concurrent with our acquisition, the acquired entity issued shares to an unrelated third-party, diluting our ownership interest.

We determined the entity constituted a variable interest entity and concluded that we did not have the power to direct its significant activities.

As a result, we subsequently deconsolidated the entity and account for our remaining ownership interest as an equity method investment.

Proceeds from divestitures of businesses and other assets, net of cash divested, were $ 78 million, $ 27 million and $ 96 million in 2023, 2022 and 2021, respectively.

In 2023, our proceeds are primarily the result of the sale of certain non-strategic assets.

In 2021, our proceeds are primarily the result of the sale of certain non-strategic Canadian operations, as discussed in Note 11.

Assets Held for Sale

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

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

2024 Divestitures

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

Variable Interest Entities

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

Accordingly, we account for these investments under the equity method of accounting.

Our aggregate investment balance in these entities was $ 707 million and $ 458 million as of December 31, 2024 and 2023, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

balance related to our investments in low-income housing properties was $ 408 million and $ 295 million as of December 31, 2023 and 2022, respectively.

The debt balance related to our investments in low-income housing properties was $ 670 million and $ 408 million as of December 31, 2024 and 2023, respectively.

Additional information related to these investments is discussed in Note 8.

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accumulated other comprehensive income (loss).

These trusts had a fair value of $ 128 million and $ 119 million as of December 31, 2024 and 2023, respectively.

Segment and Related Information

To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our Recycling Processing and Sales, as well as our WM Renewable Energy segment, beginning in the fourth quarter of 2023, our senior management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal and resource recovery services businesses independently;

Accordingly, our senior management now evaluates, oversees and manages the financial performance of our business through four reportable segments, referred to as (i) East Tier;

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

(ii) West Tier;

(iii) Recycling Processing and Sales and (iv) WM Renewable Energy.

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

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

(iii) Recycling Processing and Sales;

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

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

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

From time to time, our operating results are significantly affected by certain transactions or events that management believes are not indicative or representative of our results.

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

Additionally, we provide certain ancillary services that are not managed through the Tier segments but that support our collection and disposal operations.

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Additionally, we provide Other Ancillary services that are not managed through the Tier segments but that support our collection and disposal operations.

Other Ancillary includes specialized services performed for customers that have differentiated needs.

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Included within our Collection and Disposal businesses are landfills having (i) 20 third-party power generating facilities converting our landfill gas to fuel electricity generators;

(ii) 14 third-party RNG facilities processing landfill gas to be sold to natural gas suppliers and (iii) two third-party projects delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes.

(ii) 16 third-party RNG facilities processing landfill gas to be sold to natural gas suppliers and (iii) six third-party projects delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes.

In return for providing our landfill gas, we receive royalties from each facility, including the benefit of a 15 % royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the 84 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active landfills, which is eliminated in consolidation.

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

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WM Renewable Energy

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For 23 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.

For six of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas suppliers.

For 11 of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas suppliers.

Additionally, three of these projects are on third-party landfills.

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

WM Renewable Energy is charged a 15 % royalty on net operating revenue from these facilities residing on our active and closed landfills from our Collection and Disposal and Corporate and Other businesses, which is eliminated in consolidation.

Additionally, WM Renewable Energy operates and maintains 12 third-party landfill beneficial gas use projects in return for service revenue.

Additionally, WM Renewable Energy operates and maintains seven third-party landfill beneficial gas use projects in return for service revenue.

Our Collection and Disposal and Corporate and Other businesses benefit from these projects as well as 52 additional third-party landfill beneficial gas use projects in the form of royalties.

WM Healthcare Solutions

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

RWCS are provided to customers in the U.S., Canada, Ireland and the United Kingdom (“U.K.”).

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

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

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

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

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

Our WM Healthcare Solutions customers typically enter into a contract for the provision of services on a scheduled basis including weekly, monthly or on an as-needed basis over the contract term.

Under the contract terms, the WM Healthcare Solutions businesses receive fees based on a monthly, quarterly or annual rate and/or fees based on contractual rates depending upon measures including the volume, weight or type of waste.

Operating revenues are invoiced based on the terms of the underlying contract either on a regular basis, or as services are performed and are generally due within a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

short period of time after invoicing based upon normal terms and conditions for our business type and the geography of the services performed.

As of December 31, 2024, our WM Healthcare Solutions businesses include a global fleet of approximately 6,100 routed trucks, tractors, collection vans and small duty vehicles.

Our WM Healthcare Solutions segment operates out of approximately 361 leased and owned facilities worldwide with 69 autoclaves or other alternative medical waste treatment facilities, 18 medical waste incinerator facilities, 107 SID processing facilities, and 167 transfer stations.

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

Corporate and Other

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This includes the activities of our corporate office, including costs associated with our long-term incentive program, expanded service offerings and solutions (such as our investments in businesses and technologies that are designed to offer services and solutions ancillary or supplementary to our current operations) as well as our closed sites.

Also, included within our Corporate and Other businesses are closed sites that include (i) five third-party power generating facilities converting our landfill gas to fuel electricity generators;

(ii) one third-party project delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes and (iii) one third-party RNG processing landfill gas to be sold to natural gas suppliers in return for a royalty.

Additionally, Corporate and Other benefits from a 15 % royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the nine landfill beneficial use renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in consolidation.

Our chief operating decision maker (“CODM”) regularly reviews financial results, operating performance, and capital expenditures of our Collection and Disposal businesses, Corporate and Other businesses, Recycling Processing and Sales segment, and our WM Renewable Energy segment to assess performance and allocate resources.

Also, included within our Corporate and Other businesses closed sites are (i) six third-party power generating facilities converting our landfill gas to fuel electricity generators;

(ii) two third-party projects delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes and (iii) two third-party RNG facilities processing landfill gas to be sold to natural gas suppliers in return for a royalty.

Additionally, Corporate and Other benefits from a 15 % royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the 15 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in consolidation.

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

The CODM regularly reviews financial results, operating performance, and capital expenditures of our five reportable segments.

Our CODM uses income from operations for each segment predominantly in the annual budget and forecasting process and considers budget-to-actual variances on a monthly basis when making decisions about the allocation of operating and capital resources to each segment.

Our CODM also uses segment income from operations to assess the performance of each segment by comparing the results of each segment with one another.

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

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Depreciation,

Depletion and

Administrative

Operations(c)

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Other Ancillary

Collection and Disposal

Recycling Processing and Sales (a)

WM Renewable Energy

Corporate and Other

Collection and Disposal (e)(f)

Recycling Processing and Sales (e)

WM Renewable Energy (f)

WM Healthcare Solutions

Corporate and Other (f)

Intercompany Elimination

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Depreciation,

Depletion and

Administrative

Operations(c)

Year Ended December 31:

Collection and Disposal:

Other Ancillary

Collection and Disposal

Recycling Processing and Sales

WM Renewable Energy

Corporate and Other

Collection and Disposal (e)(f)

Recycling Processing and Sales (a)(e)

WM Renewable Energy (f)

Corporate and Other (f)

Intercompany Elimination

Depreciation,

Depletion and

Administrative

Operations(c)

Year Ended December 31:

Collection and Disposal:

Other Ancillary

Collection and Disposal

Recycling Processing and Sales

WM Renewable Energy

Corporate and Other

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

Collection and Disposal (e)(f)

Recycling Processing and Sales (e)

WM Renewable Energy (f)

Corporate and Other (f)

Intercompany Elimination

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

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

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

(d) Includes non-cash items.

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

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

The amounts in income from operations for the years ended December 31, 2024, 2023 and 2022 are $ 100 million, $ 61 million and $ 77 million, respectively.

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

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

Prior to the fourth

WASTE MANAGEMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(d) Includes non-cash items.

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

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

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

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

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

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WM Renewable Energy

WM Healthcare Solutions

Corporate and Other

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

Revenues(a)(b)

Years Ended December 31:

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WM Renewable Energy

WM Healthcare Solutions

Corporate and Other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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

There was no change to net operating revenues.

Prior periods were recast to conform to current year presentation.

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

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

(a) Primarily related to recently acquired smaller recycling-related operations in the Netherlands .

Western Europe and other (a) (b)

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

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

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

Western Europe and other (a) (b)

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

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

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

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data