WMWaste Management

During 2024, 2025, we continued to focus on our priorities to advance our strategy—enhancing strategy – enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, and investing in growth through acquisitions and our Recycling Processing and Sales and WM Renewable Energy segments. We invested approximately $8 billion, with $7.5 billion funded in cash segments and $0.5 billion as integrating the assumption of debt, on acquisitions in 2024, including having completed our acquisition of Stericycle in early November. We remain diligent in offering competitive and differentiated services that meet the needs of our customers, and we are focused on driving operating efficiencies and reducing discretionary spend. business. We continue to invest in our people through paying a competitive market wage, investing in our digital platform and providing training for our team members. We also continue to make investments in automation and optimization to enhance our operational efficiency and improve labor productivity for all lines of business. This strategic focus, combined with strong operational execution, resulted in increased revenue, income from operations and income from operations margin in 2024 when compared to the prior year. During 2024, the Company allocated $3,231 million of available cash to capital expenditures. We also allocated $1,472 million of available cash remain committed to our shareholders during 2024 through dividends investment in recycling automation, which reduces costs and common stock repurchases. increases throughput, positioning us to overcome commodity price headwinds and deliver a differentiated service. As part of the ongoing integration of Stericycle, which constitutes our Healthcare Solutions segment, we achieved synergies by reducing costs of duplicative business processes, established a performance management approach aimed at accountability and continued to improve customer engagement, billing and collection processes to deliver cash flow.

Our operations require us to attract, hire, develop and retain a high-quality workforce to provide a superior customer experience. This workforce; this includes key individuals in leadership and specialty roles, as well as a very large number of skilled drivers, technicians and other front-line and back-office team members necessary to provide our environmental services. We experience significant competition to hire and retain individuals for certain front-line positions, such as commercial truck drivers, from within and outside our industry. (Also see Item 1A. Risk Factors — Market disruption, including labor shortages, external strikes, and supply chain constraints, and macroeconomic pressures, including inflation, have recently had, and may in the future have, an adverse impact on our business and results of operations.) drivers. Additionally, the market for employees that serve on our digital team is highly competitive. As we have accelerated and support our investments in our technology-led automation and optimization strategy, it strategy is increasingly important that we are able to attract and retain employees with the skills and expertise necessary to implement and manage these projects. highly competitive. We also compete to attract skilled business leaders, and our own key team members are sought after by our competitors and other companies. We make significant investments, Labor shortages, as we have experienced in the past, could result in increased costs due to wage adjustments, overtime hours, training costs and engage in internal succession planning, inability to provide us with a robust pipeline service customers. As an employer of future leaders. over 60,000 individuals throughout the U.S. and Canada, as well as Western Europe and India, we are subject to numerous employment related regulations, including federal and state wage and hour laws and rapidly changing laws related to employment eligibility. If we are not able to attract, hire, develop and retain a high-quality workforce with the necessary skills and expertise, as well as key leaders, or if we experience significant employee turnover, or if we fail to comply with applicable employment regulations, it can result in business and strategic disruption, increased costs, and loss of institutional knowledge, which could negatively impact our results of operations.

To determine the allowance for doubtful accounts for trade receivables, we rely upon, among other factors, historical payment and loss trends, the age of outstanding receivables, and existing as well as existing and expected economic conditions, and we conditions. We believe that all of our trade receivables across our Collection and Disposal, Recycling Processing and Sales, and Renewable Energy segments share similar risk characteristics. We monitor our credit exposure on an ongoing basis and assess whether assets in the pool trade receivables continue to display similar risk characteristics. Our acquisition of Stericycle introduced a new mix of customers which we believe generally share similar risk characteristics with our existing trade receivables; however, Stericycle has and continues to encounter certain billing and collection delays. The Company determined that a portion of the acquired Stericycle receivables have experienced more-than-insignificant deterioration in credit quality since origination, as of the acquisition date. As a result, a gross allowance for doubtful accounts of trade receivables was recognized in the amount of $130 million as of the acquisition date of November 4, 2024. Based on aging analysis as of December 31, 2024 and 2023, approximately 85% and 90%, respectively, of our trade receivables were outstanding less than 60 days.

In 2018, both of McGinnes Industrial Maintenance Corporation (“MIMC”), a subsidiary of Waste Management of Texas, Inc., and International Paper Company (“IPC”) entered into an Administrative Order on Consent with the EPA as PRPs to develop a remedial design for the San Jacinto River Waste Pits Superfund Site in Harris County, Texas. We recorded a liability for MIMC’s estimated potential share of the EPA’s proposed remedy and related costs, although allocation of responsibility among the PRPs for the proposed remedy has not been established. MIMC and IPC have continued to work on a remedial design to support the EPA’s proposed remedy; however, in the first quarter of 2024, the EPA publicly issued a letter alleging that the remedial design had serious deficiencies. MIMC and IPC engaged with the EPA throughout the year, and in In November 2024, MIMC and IPC publicly issued a proposed revised full remedial design to address that was approved by the EPA’s comments. Due to increases EPA in September 2025. It is expected that the EPA will issue a Unilateral Administrative Order for the site cleanup in the estimated costs first quarter of the remedy to address the EPA’s comments, in 2026. The recorded liability as of December 31, 2025 and 2024, was approximately $100 million and $97 million, respectively.