WMWaste Management

The acquired Stericycle business, which is now presented as our new WM Healthcare Solutions segment, is subject to numerous risks and uncertainties that could cause performance to be materially different than we anticipate; such factors include, but are not limited to, as decreases in the volume of medical waste and controlled substances wastes or personal and confidential information collected from customers; disruptions resulting from deployment of operational or technological systems, including with respect to the implementation of Stericycle’s Healthcare Solution’s enterprise resource planning (“ERP”) system and related billing and collection delays that Stericycle has experienced following the launch issues and delays; customer loss resulting from frustration due to billing or service issues; delayed revenue growth from planned pricing increases due to factors including customer retention, stabilization of such system upgrade; customer data engagement systems and processes, and more prolonged development of market and customer-specific insights than initially planned; changing market conditions in the healthcare industry; competition and demand for services for the medical waste, controlled substances waste and secure information destruction industries; commodity price volatility; changes in regulation of the collection, transportation, treatment and disposal or destruction of medical waste and controlled substances waste or the proper handling and protection of personal and confidential information; the level of government enforcement of regulations governing medical waste and controlled substances waste collection and treatment or the proper handling and protection of personal and confidential information; and the outcome of pending, future or settled litigation or investigations.

Execution of our growth strategy, including growth through acquisitions, such as our recent Stericycle acquisition, acquisitions and our planned and ongoing expansion of our Recycling Processing and Sales and WM Renewable Energy segments, operations, has caused, and may in the future, cause future cause, us to incur substantial additional indebtedness, which may divert capital away from our traditional business operations and other financial plans, and may introduce additional risks and volatility to our financial performance. plans.

Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – Climate and Sustainability for information about California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, the SEC’s climate-related disclosure rule, which is currently stayed pending judicial review, as well as potential international reporting obligations, including the Corporate Sustainability Reporting Directive. more information.

If we are unable to attract, hire or hire, develop and retain key team members and a high-quality workforce, or if our succession planning does not develop an adequate pipeline of future leaders, and comply with applicable employment regulations, it could disrupt our business, jeopardize our strategic priorities and result in business and strategic disruption and increased costs, negatively impacting our results of operations.

We have also forecasted or projected certain operational and financial information with respect to our sustainability investments and initiatives, and many of these statements are based on expectations and assumptions that are necessarily uncertain and are subject to risks and uncertainties that could cause actual results to be materially different from our forecasts and projections. initiatives.

Risk Factors — Our revenues, earnings and cash flows fluctuate based on changes in commodity prices and demand and may fluctuate substantially without notice in the future and — Our sustainability growth strategy includes significant planned and ongoing investments in our WM Renewable Energy segment; changes Changes to federal and state renewable fuel policies could affect the financial performance of our financial performance, and such investments may not yield the results anticipated. Renewable Energy segment).

We collect, use, share, retain, delete and otherwise process certain personal information data and other sensitive information in connection with our operations and while providing services, including secure information destruction. are subject to increasingly demanding U.S. and international laws and regulations related to data protection and privacy and the protection of confidential information.

Integration of acquisitions and/or new services offerings or lines of business, such as our expansion into medical waste, controlled substances waste and secure information destruction services, Healthcare Solutions segment, and additional expansion into markets outside of North America has and would result America, results in our business being subject to new laws and regulatory regimes, resulting in regulations, greater exposure to risk of inadvertent noncompliance and additional compliance costs.

The Company has invested, and continues to invest, made significant investments in facilities that capture and process landfill gas into RNG so that we can participate in the RFS program, and the Company has grown and stated its intention to continue to grow its asset base to increase its RNG production. program.

We may not be able to achieve our sustainability-related goals, including reduction of our greenhouse gas ("GHG") emissions, or execute on achieve the results and benefits anticipated from our sustainability-related growth strategy investments and initiatives, initiatives within planned timelines or anticipated budget, which could damage our reputation and negatively impact the benefits anticipated from our investments. budget.

While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs, if If we were to incur substantial liabilities in excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected.

As the Company pursues its strategy to grow through acquisitions, including the acquisition of Stericycle, and to pursue new initiatives that improve our operations and cost structure, the The Company is also expanding and improving its information technologies, resulting in a larger technological presence, utilization of cloud computing services, and corresponding exposure to cybersecurity risk.

We Low-Income Housing — During the years ended December 31, 2025 and 2024, we recognized net losses income tax expense of $66 $96 million and $65 million in 2023 and 2022, $78 million, respectively, related to amortization under ASU 2023-02, and a reduction in our income tax expense of $137 million and $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. investments.

As Despite the increase in operating expenses, we significantly reduced our operating expenses as a percentage of revenue, operating expenses improved significantly revenue when compared to the prior year as revenue growth from price, through efficiency gains, improved employee retention and turnover, momentum in truck deliveries offset deliveries, the impacts benefit of inflationary customer price increases in wages and other expenses. higher margin special waste volumes;

However, all The amount of future dividend declarations are at the discretion of the share repurchases executed under our Board of Directors and depend Directors’ authorization is determined in management’s discretion, based on various factors, including our leverage level, net earnings, financial condition, condition and cash required for future business plans, growth and acquisitions and other factors the Board of Directors may deem relevant. acquisitions.

WM Renewable Energy — Income from operations in our WM Renewable Energy segment increased in 2024, as compared with 2023, primarily due to (i) higher RIN quantities generated and sold at higher market values in volumes resulting from the current year and (ii) increased completion of projects that increase the beneficial use of landfill gas sold to third parties due to the completion of additional projects. and higher electricity pricing.

Other — The increase in other expenses in 2024, as compared with 2023, was primarily related due to (i) increased spend across multiple cost categories, including technology, risk management costs incurred in connection with and advertising, largely driven by the acquisition and integration of Stericycle and (ii) increased spend across multiple cost categories including technology and travel. Stericycle.

The $415 $620 million increase in free cash flow was primarily due to the increases in operating cash described above and increase planned reductions in proceeds capital investment in our sustainability growth projects as we move from the divestiture peak construction of non-strategic assets and this portfolio into a period where we will harvest strong returns on these businesses.

We first may perform either a qualitative or quantitative assessment; however, if a qualitative assessment to is performed and we determine if it was more likely than not that the fair value of a reporting unit is more likely than not to be less than its carrying value. amount, a quantitative assessment is performed.

For the year ended December 31, 2024, 2025, we incurred approximately $160 million of acquisition and integration related costs, which are primarily classified as “Selling, costs of $120 million, comprised of $89 million of selling, general and administrative expenses. costs and $31 million of restructuring costs.

The increase in depreciation of tangible property and equipment in 2024, as compared with 2023, was driven by (i) primarily due to our recent acquisitions and increased investments in capital assets such as trucks equipment, primarily within our sustainability businesses, and containers and (ii) the acquisition of Stericycle. trucks.

Transfer and Disposal Costs — The increase in transfer and disposal costs in 2024, as compared with 2023, was primarily due to (i) our recent acquisitions and inflationary cost increases, pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers and (ii) incremental third-party transfer and disposal costs as a result of our recent acquisitions. haulers.

For the year ended December 31, 2024, we incurred approximately $160 million of acquisition and integration related costs, costs of $160 million, which are were primarily classified as “Selling, selling, general and administrative expenses. expenses.Refer to Note 19 for more information on the performance of our Healthcare Solutions segment.

Other, Net — In 2022, During 2024, we acquired a controlling interest the remaining minority interests in a business engaged in accelerating film and plastic wrap recycling capabilities, and in the fourth quarter of 2024, we acquired the remaining minority interests in this business capabilities for $41 million.