Waste Management (WM) Economic Moat Analysis50

Evidence

The assessment of impairment indicators and the recoverability of our capitalized costs associated with landfills and related expansion projects require significant judgment due to the unique nature of the waste industry, the highly regulated permitting process and the sensitive estimates involved.

Critical Accounting Estimates / landfill permitting and recoverability · Filed 09/02/2026

28 ​ Results of Operations Operating Revenues The mix of operating revenues for the three and six months ended June 30 are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ Intercompany ​ Gross ​ ​ ​ ​ Operating ​ Operating ​ Operating ​ ​ Revenues ​ ​ ​ Revenues (a) ​ ​ ​ Revenues Three Months Ended June 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ ​ ​ Commercial $ 1,485 ​ $ 236 ​ $ 1,721 Industrial ​ 820 ​ ​ 245 ​ 1,065 Residential ​ ​ 911 ​ ​ 19 ​ ​ 930 Other collection ​ 849 ​ 74 ​ 923 Total collection ​ 4,065 ​ 574 ​ 4,639 Landfill ​ ​ 1,004 ​ ​ 429 ​ ​ 1,433 Transfer ​ ​ 410 ​ ​ 300 ​ ​ 710 Total Collection and Disposal ​ 5,479 ​ 1,303 ​ 6,782 Recycling Processing and Sales ​ 403 ​ 88 ​ 491 Renewable Energy ​ 157 ​ — ​ 157 Healthcare Solutions (b) ​ ​ 638 ​ ​ 104 ​ ​ 742 Corporate and Other ​ ​ 7 ​ ​ 8 ​ ​ 15 Total ​ $ 6,684 ​ $ 1,503 ​ $ 8,187 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial $ 1,398 ​ $ 220 ​ $ 1,618 Industrial ​ 790 ​ ​ 223 ​ 1,013 Residential ​ ​ 872 ​ ​ 22 ​ ​ 894 Other collection ​ 796 ​ 68 ​ 864 Total collection ​ 3,856 ​ 533 ​ 4,389 Landfill ​ ​ 1,036 ​ ​ 410 ​ ​ 1,446 Transfer ​ ​ 389 ​ ​ 292 ​ ​ 681 Total Collection and Disposal ​ 5,281 ​ 1,235 ​ 6,516 Recycling Processing and Sales ​ 381 ​ 101 ​ 482 Renewable Energy ​ 115 ​ — ​ 115 Healthcare Solutions (b) ​ ​ 646 ​ ​ 114 ​ ​ 760 Corporate and Other ​ ​ 7 ​ ​ 8 ​ ​ 15 Total ​ $ 6,430 ​ $ 1,458 ​ $ 7,888 ​ 29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ Intercompany ​ Gross ​ ​ ​ ​ Operating ​ Operating ​ Operating ​ ​ Revenues ​ ​ ​ Revenues (a) ​ ​ ​ Revenues Six Months Ended June 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ ​ ​ Commercial $ 2,914 ​ $ 465 ​ $ 3,379 Industrial ​ 1,578 ​ ​ 467 ​ 2,045 Residential ​ ​ 1,799 ​ ​ 37 ​ ​ 1,836 Other collection ​ 1,643 ​ 146 ​ 1,789 Total collection ​ 7,934 ​ 1,115 ​ 9,049 Landfill ​ ​ 1,868 ​ ​ 811 ​ ​ 2,679 Transfer ​ ​ 758 ​ ​ 571 ​ ​ 1,329 Total Collection and Disposal ​ 10,560 ​ 2,497 ​ 13,057 Recycling Processing and Sales ​ 771 ​ 175 ​ 946 Renewable Energy ​ 316 ​ 2 ​ 318 Healthcare Solutions (b) ​ ​ 1,252 ​ ​ 211 ​ ​ 1,463 Corporate and Other ​ ​ 12 ​ ​ 16 ​ ​ 28 Total ​ $ 12,911 ​ $ 2,901 ​ $ 15,812 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial $ 2,778 ​ $ 434 ​ $ 3,212 Industrial ​ 1,531 ​ ​ 422 ​ 1,953 Residential ​ ​ 1,744 ​ ​ 44 ​ ​ 1,788 Other collection ​ 1,549 ​ 140 ​ 1,689 Total collection ​ 7,602 ​ 1,040 ​ 8,642 Landfill ​ ​ 1,876 ​ ​ 763 ​ ​ 2,639 Transfer ​ ​ 725 ​ ​ 548 ​ ​ 1,273 Total Collection and Disposal ​ 10,203 ​ 2,351 ​ 12,554 Recycling Processing and Sales ​ 765 ​ 182 ​ 947 Renewable Energy ​ 206 ​ 1 ​ 207 Healthcare Solutions (b) ​ ​ 1,265 ​ ​ 216 ​ ​ 1,481 Corporate and Other ​ ​ 9 ​ ​ 16 ​ ​ 25 Total ​ $ 12,448 ​ $ 2,766 ​ $ 15,214 (a) Includes each segment’s intercompany activity, including transactions within a segment and between segments.

Results of Operations / collection, landfill and transfer intercompany revenues · Filed 29/07/2026

As of December 31, 2025, we had 103 landfill gas beneficial use projects producing commercial quantities of methane gas at owned or operated landfills.

Renewable Energy / operating projects at owned or operated landfills · Filed 09/02/2026

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

Average Yield / municipal solid waste landfill pricing · Filed 29/07/2026

The significant items affecting income from operations for our segments during the three and six months ended June 30, 2026, as compared to the prior year periods, are summarized below: Collection and Disposal — Income from operations in our Collection and Disposal business increased primarily due to (i) revenue growth from price increases, which translates into increased yield or average unit price; (ii) actions to improve efficiency and the operating costs incurred to serve our customers and (iii) a gain from a business divestiture in our West Tier recognized in the first quarter of 2026.

Segment operating income / Collection and Disposal · Filed 29/07/2026

Also, such governmental units may attempt to impose flow control or other restrictions that would give them a competitive advantage.

Competition risk / governmental flow restrictions · Filed 09/02/2026

In addition, some of our competitors may have lower financial expectations, allowing them to reduce their prices to expand sales volume or to win competitively-bid contracts, including large national accounts and exclusive franchise arrangements with municipalities.

Competition risk / lower-priced bids · Filed 09/02/2026

These increases are partially offset by (i) lower collection and disposal volumes; (ii) volume declines in our Healthcare Solutions segment and (iii) a reduction in single-stream and brokerage recycled commodity prices; ● Operating expenses of $3,955 million, or 59.2% of revenues, compared to $3,803 million, or 59.1% of revenues, in the prior year period.

Current Quarter Financial Results / volume declines and operating expense ratio · Filed 29/07/2026

On April 26, 2026, the Delaware Department of Natural Resources and Environmental Control issued an order against Delaware Recyclable Products, Inc., an indirect, wholly-owned subsidiary of WMI, alleging certain environmental violations related to landfill cover and erosion control, stormwater management, the management of prohibited waste, and other permitting and operational matters.

Environmental proceedings / alleged landfill operational violations · Filed 29/07/2026

While the previous rules under the RFS program reflected the outsized role of biogas under the program and delivered reforms benefiting the solid waste sector, the current administration has retroactively lowered 2024 blending volumes, proposed reductions for 2025, set low targets for 2026–2027 and begun to grant small refinery exemptions from RFS program requirements.

Renewable fuel policy risk / blending volumes and exemptions · Filed 09/02/2026

2024 ​ ​ ​ ​ ​ ​ ​ As a % of ​ ​ ​ ​ ​ ​ ​ Related ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ ​ ​ Business Commercial ​ ​ $ 290 ​ 5.1 % Industrial ​ ​ 99 ​ 2.8 ​ Residential ​ ​ 181 ​ 5.4 ​ Total collection ​ ​ 570 ​ 4.3 ​ Landfill ​ ​ 84 ​ 2.6 ​ Transfer ​ ​ 65 ​ 4.9 ​ Total Collection and Disposal ​ ​ $ 719 ​ 3.8 % ​ Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business.

Average Yield / 2025 Collection and Disposal pricing results · Filed 09/02/2026

2025 June 30, 2026 vs. 2025 ​ ​ ​ ​ ​ ​ As a % of ​ ​ ​ As a % of ​ ​ ​ ​ ​ ​ Related ​ ​ ​ Related ​ ​ ​ ​ ​ Amount ​ ​ ​ ​ ​ Business ​ ​ ​ Amount ​ ​ ​ ​ ​ Business Commercial ​ $ 60 ​ 4.0 % $ 129 ​ 4.4 % Industrial ​ 32 ​ 3.4 ​ 59 ​ 3.3 ​ Residential ​ 51 ​ 6.1 ​ 104 ​ 6.2 ​ Total collection ​ 143 ​ 4.2 ​ 292 ​ 4.3 ​ Landfill ​ 25 ​ 2.5 ​ 46 ​ 2.7 ​ Transfer ​ 13 ​ 3.6 ​ 24 ​ 3.4 ​ Total Collection and Disposal ​ $ 181 ​ 3.6 % $ 362 ​ 3.7 % Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business.

Average Yield / second-quarter and first-half 2026 pricing results · Filed 29/07/2026

Revenue growth from Collection and Disposal average yield includes not only base rate changes and environmental and service fee fluctuations, but also (i) certain average price changes related to the overall mix of services, which are due to the types of services provided; (ii) changes in average price from new and lost business and (iii) price decreases to retain customers.

Average Yield / definition including mix and customer retention concessions · Filed 29/07/2026

Many of our contracts have price adjustment provisions that are tied to an index such as the Consumer Price Index.

Inflation risk / indexed contract price adjustments · Filed 09/02/2026

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

Inflation / contractual recovery limitations and lookback provisions · Filed 29/07/2026

While sustainability remains a priority for many customers, we have observed a shift in prioritization by some companies with respect to sustainability objectives, including a decreased willingness to pay premium prices for recycled materials or enhanced sustainability solutions, which impacts demand for, and viability of, some of our offerings.

Commodity and sustainability demand risk / reduced willingness to pay premiums · Filed 09/02/2026

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

Segment operating income / recycling automation and business suspension · Filed 29/07/2026

Renewable Energy — The increase in income from operations in our Renewable Energy segment was primarily due to higher volumes driven by the completion of projects that increase the beneficial use of landfill gas sold to third parties.

Segment operating income / completed renewable energy projects · Filed 29/07/2026

Our calculation of free cash flow and reconciliation to net cash provided by operating activities is shown in the table below for the year ended December 31 (in millions), and may not be calculated the same as similarly-titled measures presented by other companies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Net cash provided by operating activities ​ $ 6,043 ​ $ 5,390 Capital expenditures to support the business ​ ​ (2,594) ​ ​ (2,281) Capital expenditures - sustainability growth investments (a) ​ ​ (633) ​ ​ (950) Total capital expenditures ​ (3,227) ​ (3,231) Proceeds from divestitures of businesses and other assets, net of cash divested ​ 121 ​ 158 Free cash flow ​ $ 2,937 ​ $ 2,317 (a) These growth investments are intended to further our sustainability leadership position by increasing recycling volumes and growing RNG generation and we expect they will deliver circular solutions for our customers and drive environmental value to the communities we serve.

Liquidity / 2025 operating cash flow, capital expenditures and free cash flow · Filed 09/02/2026

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Cash flows from operating activities: ​ ​ ​ ​ Consolidated net income $ 1,509 ​ $ 1,364 Adjustments to reconcile consolidated net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation, depletion, amortization and accretion ​ 1,512 ​ 1,435 Deferred income tax expense (benefit) ​ 143 ​ 79 Provision for bad debts ​ 69 ​ 43 Equity-based compensation expense ​ 98 ​ 92 Net gain on disposal of assets ​ (6) ​ (12) (Gain) loss from divestitures, asset impairments and other, net ​ (16) ​ 26 Change in operating assets and liabilities, net of effects of acquisitions and divestitures: ​ ​ ​ ​ Receivables ​ (224) ​ (323) Other current assets ​ 3 ​ (52) Other assets ​ 127 ​ 134 Accounts payable and accrued liabilities ​ 134 ​ 42 Deferred revenues and other liabilities ​ (122) ​ (75) Net cash provided by operating activities ​ 3,227 ​ 2,753 Cash flows from investing activities: ​ ​ ​ ​ Acquisitions of businesses, net of cash acquired ​ (85) ​ (366) Capital expenditures ​ (1,280) ​ (1,563) Proceeds from divestitures of businesses and other assets, net of cash divested ​ 77 ​ 103 Other, net ​ (139) ​ (89) Net cash used in investing activities ​ (1,427) ​ (1,915) Cash flows from financing activities: ​ ​ ​ ​ New borrowings ​ 12,823 ​ 9,135 Debt repayments ​ (12,484) ​ (9,234) Common stock repurchase program ​ (1,003) ​ — Cash dividends ​ (764) ​ (669) Exercise of common stock options ​ 32 ​ 50 Tax payments associated with equity-based compensation transactions ​ (40) ​ (49) Other, net ​ (16) ​ (14) Net cash used in financing activities ​ (1,452) ​ (781) Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents ​ (7) ​ 8 Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents ​ 341 ​ 65 Cash, cash equivalents and restricted cash and cash equivalents at beginning of period ​ 297 ​ 487 Cash, cash equivalents and restricted cash and cash equivalents at end of period $ 638 ​ $ 552 ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents and restricted cash and cash equivalents at end of period: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 557 ​ $ 440 Restricted cash and cash equivalents included in other current assets ​ ​ 9 ​ ​ 45 Restricted cash and cash equivalents included in restricted funds ​ ​ 72 ​ ​ 67 Cash, cash equivalents and restricted cash and cash equivalents at end of period $ 638 ​ $ 552 ​ See Notes to Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of Cash Flows / first-half 2026 · Filed 29/07/2026

23 ​ Fair Value of Debt As of June 30, 2026 and December 31, 2025, the carrying value of our debt was $23.4 billion and $22.9 billion, respectively.

Fair Value of Debt / carrying debt balances · Filed 29/07/2026

As of December 31, 2025, our estimated minimum obligations associated with unconditional purchase obligations were $269 million in 2026, $234 million in 2027, $130 million in 2028, $78 million in 2029, $63 million in 2030 and $594 million thereafter.

Commitments / unconditional purchase obligations · Filed 09/02/2026

Internal revenue growth results were below target performance level, largely due to variability in volume trends across markets and lower volume in the residential and commercial collection businesses.

Executive compensation / internal revenue growth below target · Filed 31/03/2026

The following key structural elements and policies, discussed in more detail in the Compensation Discussion and Analysis, further the objective of our executive compensation program and evidence our dedication to competitive and reasonable compensation practices that are in the best interests of stockholders: • a significant majority of our named executive’s target compensation is linked to Company performance and long-term equity awards, which aligns executives’ interests with those of stockholders; ​ • our total direct compensation opportunities for named executive officers are targeted to fall in a range around the competitive median; ​ • performance-based awards include threshold, target and maximum payouts correlating to a range of performance outcomes and are based on a variety of indicators of performance, which limits risk-taking behavior; ​ • performance stock units with a three-year performance period, as well as stock options that vest over a three-year period, link executives’ interests with long-term performance and reduce incentives to maximize performance in any one year at the expense of future years; ​ • all of our executive officers are subject to stock ownership guidelines, which we believe demonstrates a commitment to, and confidence in, the Company’s long-term prospects; ​ • in addition to adoption of the executive compensation clawback policy mandated by the New York Stock Exchange in 2023, the Company has clawback provisions in its equity award agreements and executive officer employment agreements, and has adopted a clawback policy applicable to annual incentive compensation, designed to recoup compensation when cause and/or misconduct are found; and ​ • the Company has adopted policies that limit executive officer severance benefits and prohibit it from entering into agreements with executive officers that provide for certain death benefits or tax gross-up payments.

Executive compensation / equity incentives, ownership guidelines and clawbacks · Filed 31/03/2026

Additionally, the following adjustments will be made when the aggregate impact of the following items has a greater than 5% impact on goal attainment: (a) impacts from strategic acquisitions or divestitures of assets and business are excluded (impacts from normal course of business acquisition and divestitures are included); (b) impacts from discrete growth capital investment projects made to support the long-term organic growth of the business that were not planned for when the performance targets were established are excluded; and (c) material changes in the realization of earnings and cash flow contributions for growth capital investments caused by items outside of the Company’s control will be excluded (the “2025 Cash Flow PSU Definition”).

Executive compensation / cash flow PSU calculation exclusions · Filed 31/03/2026

We separated the roles of Chair of the Board and Chief Executive Officer at our Company in 2004.

Board leadership / separation of Chair and CEO · Filed 31/03/2026

Each member of our Audit Committee satisfies the additional New York Stock Exchange independence standards for audit committees set forth in Section 10A of the Exchange Act.

Audit Committee / independence standards · Filed 31/03/2026

However, the MD&C Committee may not delegate any authority to Company employees under those plans for matters affecting the compensation and benefits of the executive officers.

Compensation Committee / restrictions on delegation · Filed 31/03/2026

The decline in market prices in 2025 for recyclable commodities resulted in a year-over-year decrease in revenue of $166 million, and 29 Table of Contents the increase in market prices in 2024 for recyclable commodities resulted in a year-over-year increase in revenue of $245 million.

Commodity risk / realized recycling revenue effects · Filed 09/02/2026

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

Collection and Disposal / wildfire comparison and weather-related volume declines · Filed 29/07/2026

In lieu of providing separate financial statements for the subsidiary issuer and guarantor (WMI and WM Holdings), we have presented the accompanying supplemental summarized combined balance sheet and income statement information for WMI and WM Holdings on a combined basis after elimination of intercompany transactions between WMI and WM Holdings and amounts related to investments in any subsidiary that is a non-guarantor (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Balance Sheet Information: ​ ​ ​ ​ ​ ​ Current assets $ 19 ​ $ 44 Noncurrent assets ​ ​ 12 ​ ​ 13 Current liabilities ​ 672 ​ 738 Noncurrent liabilities: ​ ​ ​ ​ ​ ​ Advances due to affiliates ​ ​ 19,757 ​ ​ 18,160 Other noncurrent liabilities ​ 19,918 ​ 19,733 ​ 38 ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, 2026 Income Statement Information: ​ ​ ​ Revenue $ — Operating income ​ ​ — Net loss ​ ​ (327) ​ ​ Summary of Cash Flow Activity The following is a summary of our cash flows for the six months ended June 30 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Net cash provided by operating activities ​ $ 3,227 ​ $ 2,753 Net cash used in investing activities ​ ​ (1,427) ​ ​ (1,915) Net cash used in financing activities ​ ​ (1,452) ​ ​ (781) ​ Net Cash Provided by Operating Activities — Our operating cash flows increased by $474 million for the six months ended June 30, 2026, as compared to the prior year period, primarily due to (i) higher earnings, particularly driven by our Collection and Disposal business; (ii) favorable changes in working capital, net of effects from acquisitions and divestitures; (iii) lower annual incentive compensation payments and (iv) lower cash taxes.

Liquidity / operating cash flow growth drivers · Filed 29/07/2026

Publication history

Sources

• filing-1 · Filed 09/02/2026
• filing-2 · Filed 29/07/2026
• filing-3 · Filed 31/03/2026