Waste Management Inc.
10/28/2025 | Press release | Distributed by Public on 10/28/2025 13:48
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included under Item 1 and our Consolidated Financial Statements and notes thereto and related Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
This Quarterly Report on Form 10-Q contains certain forward-looking statements that are made subject to the safe harbor protections provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the words, "will," "may," "should," "continue," "anticipate," "believe," "expect," "plan," "forecast," "project," "estimate," "intend," and words of a similar nature and include estimates or projections of financial and other data; comments on expectations relating to future periods; plans or objectives for the future; and statements of opinions, views or beliefs about current and future events, circumstances or performance. You should view these statements with caution. They are based on the facts and circumstances known to us as of the date the statements are made. These forward looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those set forth in such forward-looking statements, including but not limited to failure to implement our optimization, automation, growth and cost savings initiatives and overall business strategy; failure to obtain the results anticipated from strategic initiatives, investments, acquisitions or new lines of business; failure to identify acquisition targets, consummate and integrate acquisitions, including our ability to integrate the acquisition of Stericycle and achieve the anticipated benefits therefrom, including synergies; legal, regulatory, operational, technological and other matters that may affect the costs and timing of our ability to integrate and deliver all of the expected benefits of the Stericycle acquisition; failure to maintain an effective system of internal control over financial reporting; existing or new environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, recyclables, extended producer responsibility and our natural gas fleet; significant environmental, safety or other incidents resulting in liabilities or brand damage; failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise; diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives; exposure to different regulatory, legal, financial and economic conditions in international jurisdictions; failure to attract, hire and retain key team members and a high quality workforce; increases in labor costs due to union organizing activities or changes in wage and labor related regulations; disruption and costs resulting from severe weather and destructive climate events; failure to achieve our sustainability goals or execute on our sustainability-related strategy and initiatives, including within planned timelines or anticipated budgets due to disruptions, delays, cost increases or changes in environmental or tax regulations and incentives; focus on and regulation of, environmental and sustainability-related disclosures, which could lead to increased costs, risk of non-compliance, brand damage and litigation risk related to our sustainability efforts; macroeconomic conditions, geopolitical conflict and large-scale market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs; increased competition; pricing actions; impacts from international trade restrictions and tariffs; competitive disposal alternatives, diversion of waste from landfills and declining waste volumes; changing conditions in the healthcare industry; changing conditions in the recycling industry, including impacts on demand, pricing and availability of counterparties; weakness in general economic conditions and capital markets; instability of financial institutions; adoption of new tax legislation; fuel shortages; failure to develop and protect new technology; failure of technology to perform as expected; failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations; inability to adapt and manage the benefits and risks of artificial intelligence; negative outcomes of litigation or governmental proceedings, including those acquired through transactions; and operational or management decisions or developments that result in impairment charges and other risks discussed in our filings with the SEC, including Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. We assume no obligation to update any forward-looking statement, including financial estimates and forecasts, whether as a result of future events, circumstances or developments or otherwise.
Overview
We are North America's leading provider of comprehensive environmental solutions, providing services throughout the United States ("U.S.") and Canada. We partner with our customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy. We own or operate the largest network of landfills throughout the U.S. and Canada. In order to make disposal more practical for larger urban markets, where the distance to landfills is typically farther, we manage transfer stations that consolidate, compact and transport waste efficiently and economically. 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") 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 ("RNG"), which is a significant source of fuel that we allocate to our natural gas fleet. Additionally, we are a leading recycler in the U.S. and Canada, handling materials that include paper, cardboard, glass, plastic and metal.
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; (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.
Stericycle Acquisition
On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle, Inc., a provider of regulated waste and compliance services and secure information destruction services that protect people and brands, promote health and well-being and safeguard the environment. The post-closing operating results of Stericycle have been included in our Condensed Consolidated Financial Statements as a new reportable segment referred to as WM Healthcare Solutions. Since closing the acquisition we have prioritized service delivery for our customers and the integration of operations into WM's organizational structure, ensuring business alignment with WM's core values and capturing synergies through reduction of duplicative processes and costs. We have also focused on business integration and process optimization through technological enhancements, establishing a performance management approach aimed at accountability, improving customer engagement, billing and collection processes to deliver cash flow, enhancing customer lifetime value and optimizing disposal costs by internalizing waste within our integrated asset portfolio.
Strategy
Our fundamental strategy has not changed; we remain dedicated to providing long-term value to our stockholders by successfully executing our core strategy of focused differentiation and continuous improvement. We have enabled a people-first, technology-led focus to drive our mission to maximize resource value, while minimizing environmental impact, and sustainability and environmental stewardship are embedded in all that we do. Our strategy leverages and sustains the strongest asset network in the industry to drive best-in-class customer experience and growth. Our strategic planning processes appropriately consider that the future of our business and the industry can be influenced by changes in economic conditions, the competitive landscape, the regulatory environment, asset and resource availability and technology. We believe that focused differentiation, which is driven by capitalizing on our unique and extensive network of assets, will deliver profitable growth and position us to leverage competitive advantages. Simultaneously, we believe that investing in automation to improve processes and drive operational efficiency combined with a focus on the cost to serve our customers will yield an attractive profit margin and enhanced service quality. We are furthering our strategy of focused differentiation and continuous improvement beyond our traditional waste operations through our sustainability growth strategy that includes significant investments in our WM Renewable Energy and Recycling Processing and Sales segments, while increasing automation and reducing labor dependency. In addition, with our acquisition of Stericycle, we have advanced our growth strategy and built upon our sustainability initiatives. The acquisition provides a complementary business platform in regulated waste and compliance services involving medical waste, a sector with attractive near- and long-term growth dynamics and in secure information destruction services to further our leading suite of comprehensive
waste and environmental solutions. Furthermore, we are also evaluating and pursuing emerging diversion technologies that may generate additional value.
Business Environment
The waste industry is a comparatively mature and stable industry. However, customers increasingly expect more of their waste materials to be recovered, and those waste streams are becoming more complex. In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of waste at landfills. We monitor these developments to adapt our service offerings. As companies, individuals and communities look for ways to be more sustainable, we promote our comprehensive services that go beyond our core business of collecting and disposing of waste in order to meet their needs. This includes expanding traditional recycling services, increasing organics collection and processing, providing regulated waste and compliance services and secure information destruction and expanding our renewable energy projects to meet the evolving needs of our diverse customer base. As North America's leading provider of comprehensive environmental solutions, we are taking big, bold steps to catalyze positive change - change that will impact our Company as well as the communities we serve. Consistent with our Company's long-standing commitment to sustainability and environmental stewardship, we have published our 2025 Sustainability Report providing details on our sustainability-related performance and outlining progress towards our 2030 sustainability goals. The Sustainability Report conveys the strong linkage between the Company's sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company's Recycling Processing and Sales and WM Renewable Energy segments. The information in this report can be found at sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.
We encounter intense competition from governmental, quasi-governmental and private service providers based on pricing, and to a much lesser extent, the nature of service offerings, particularly in the residential line of business. Our industry is directly affected by changes in general economic factors, including increases and decreases in consumer spending, business expansions and construction activity. These factors generally correlate to volumes of waste generated and impact our revenue. Negative economic conditions and other macroeconomic trends can and have caused customers to reduce their service needs. Such negative economic conditions, in addition to competitor actions, can impact our strategy to negotiate, renew, or expand service contracts and grow our business. We also encounter competition for acquisitions and growth opportunities. General economic factors and the market for consumer goods, in addition to regulatory developments, can also significantly impact commodity prices for the recyclable materials we sell. Significant components of our operating expenses vary directly as we experience changes in revenue due to volume and inflation. Volume changes can fluctuate significantly by line of business and volume changes in higher margin businesses can impact key financial metrics. We must dynamically manage our cost structure in response to volume changes and cost inflation.
We believe the Company's industry-leading asset network and strategic focus on investing in our people and our digital platform will give the Company the necessary tools to address the evolving challenges impacting the Company and our industry. In line with our commitment to continuous improvement and a differentiated customer experience, we remain focused on our automation and optimization investments to enhance our operational efficiency and change the way we interact with our customers. Advancements made through these initiatives are intended to seamlessly and digitally connect all enterprise functions required to service customers and provide the best experience. We have made significant progress in executing this technology enablement strategy to automate and optimize certain elements of our service delivery model. The key benefits are reduced labor dependency for certain high-turnover positions, particularly in customer experience, recycling and residential collection, while further elevating our customer self-service through digitalization and implementation of technologies to enhance the safety, reliability and efficiency within our collection operations.
We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments. During the nine months ended September 30, 2025, we experienced decreases in market prices for recycled commodities when compared to the prior year period caused by a number of factors, including the closure of domestic paper mills, a decrease in demand for recycled content by certain consumer goods producers, focused reduction in cardboard packaging and overall market conditions. While the combined impacts of commodity price fluctuations from the prior year had a modestly favorable
impact on the WM Renewable Energy segment in the first nine months of 2025, we may experience more significant impacts from fluctuations in the prices of renewable identification numbers ("RINs") and natural gas in the future.
Variability in economic conditions, including inflation, interest rates, employment trends and supply chain reliability, can create risk and uncertainty in financial outlook. We take proactive steps to recover and mitigate inflationary cost pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity and investments in technology to automate certain aspects of our business. We remain committed to putting our people first to ensure that they are well positioned to execute our daily operations diligently and safely. We remain focused on delivering outstanding customer service, managing our variable costs with changing volumes and investing in technology that will enhance our customers' experience and provide operating efficiencies intended to reduce our cost to serve our customers.
Current Quarter Financial Results
During the third quarter of 2025, we continued to focus on our priorities to advance our strategy - enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, investing in growth through our Recycling Processing and Sales and WM Renewable Energy segments and integrating the Stericycle 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 remain committed to our investment in recycling automation, which reduces costs and increases throughput, positioning us to overcome commodity price headwinds and deliver a differentiated service. As part of the integration of Stericycle, which constitutes our new WM 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.
Key elements of our financial results for the third quarter include:
| ● | Revenues of $6,443 million, compared to $5,609 million in the prior year period, an increase of $834 million, or 14.9%. The increase is primarily attributable to (i) our recent acquisitions, particularly Stericycle; (ii) higher yield in our Collection and Disposal businesses and (iii) higher volumes primarily in our landfill, renewable energy, industrial collection and recycling businesses. The increase was partially offset by lower residential collection volumes and a reduction in single-stream and brokerage recycled commodity prices; |
| ● | Operating expenses of $3,833 million, or 59.5% of revenues, compared to $3,399 million, or 60.6% of revenues, in the prior year period. Despite the increase in operating expenses, efficiency gains, improved turnover and momentum in truck deliveries, combined with the benefit of price increases and high margin special waste volumes, positioned us to reduce our operating expenses as a percentage of revenue when compared to the prior year period; |
| ● | Selling, general and administrative expenses were $665 million, or 10.3% of revenues, compared to $525 million, or 9.4% of revenues, in the prior year period. The $140 million increase is primarily attributable to our recent acquisitions, particularly Stericycle, including consulting and technology costs incurred to support Stericycle's integration; |
| ● | Income from operations was $989 million, or 15.3% of revenues, compared to $1,119 million, or 20.0% of revenues, in the prior year period. The $130 million decrease is primarily attributable to (i) a $152 million charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities resulting from significant deterioration of market pricing and demand for post-consumer plastics; (ii) higher depreciation and amortization costs and integration-related expenses arising from our Stericycle acquisition; (iii) a $45 million impairment charge related to the decision to accelerate the closure of a landfill within our East Tier and (iv) an $11 million negotiated payment for early termination of a contract in our WM Renewable Energy segment. These reductions were partially offset by growth in our Collection and Disposal businesses and declines in annual incentive compensation and employee benefit expenses; |
| ● | Net income attributable to Waste Management, Inc. was $603 million, or $1.49 per diluted share, compared to $760 million, or $1.88 per diluted share, in the prior year period. The $157 million decrease was primarily driven |
| by a decrease in income from operations, discussed above, and increased interest expense related to the additional debt incurred to finance our Stericycle acquisition. These decreases were partially offset by lower income tax expense; |
| ● | Net cash provided by operating activities was $1,592 million compared to $1,358 million in the prior year period, with the increase driven by (i) higher earnings in our Collection and Disposal businesses; (ii) contributions from our recent acquisitions and (iii) lower cash tax payments. These increases were partially offset by higher cash interest payments primarily due to additional debt incurred to fund our acquisition of Stericycle; |
| ● | Free cash flow was $821 million compared to $618 million in the prior year period. The increase in free cash flow is attributable to the increase in net cash provided by operating activities discussed above, partially offset by a planned reduction in capital investment in our sustainability growth projects as we move from peak construction of this portfolio into a period where we will harvest strong returns on these businesses. Free cash flow is a non-GAAP measure of liquidity. Refer to Free Cash Flow below for our definition of free cash flow, additional information about our use of this measure, and a reconciliation to net cash provided by operating activities, which is the most comparable GAAP measure. |
Results of Operations
Operating Revenues
The mix of operating revenues from our major lines of business for the three and nine months ended September 30 are as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
Intercompany |
|
Gross |
|||
|
|
Operating |
|
Operating |
|
Operating |
||||
|
|
|
Revenues |
Revenues (a)(b) |
Revenues |
|||||
|
Three Months Ended September 30: |
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
1,419 |
|
$ |
223 |
|
$ |
1,642 |
|
|
Industrial |
|
808 |
|
|
234 |
|
1,042 |
||
|
Residential |
|
|
884 |
|
|
22 |
|
|
906 |
|
Other collection |
|
819 |
|
69 |
|
888 |
|||
|
Total collection |
|
3,930 |
|
548 |
|
4,478 |
|||
|
Landfill |
|
|
995 |
|
|
407 |
|
|
1,402 |
|
Transfer |
|
|
396 |
|
|
294 |
|
|
690 |
|
Total Collection and Disposal |
|
5,321 |
|
1,249 |
|
6,570 |
|||
|
Recycling Processing and Sales |
|
372 |
|
98 |
|
470 |
|||
|
WM Renewable Energy |
|
115 |
|
1 |
|
116 |
|||
|
WM Healthcare Solutions |
|
|
628 |
|
|
110 |
|
|
738 |
|
Corporate and Other |
|
|
7 |
|
|
7 |
|
|
14 |
|
Total |
|
$ |
6,443 |
|
$ |
1,465 |
|
$ |
7,908 |
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
1,359 |
|
$ |
205 |
|
$ |
1,564 |
|
|
Industrial |
|
797 |
|
|
206 |
|
1,003 |
||
|
Residential |
|
|
875 |
|
|
22 |
|
|
897 |
|
Other collection |
|
765 |
|
57 |
|
822 |
|||
|
Total collection |
|
3,796 |
|
490 |
|
4,286 |
|||
|
Landfill |
|
|
923 |
|
|
388 |
|
|
1,311 |
|
Transfer |
|
|
365 |
|
|
276 |
|
|
641 |
|
Total Collection and Disposal |
|
5,084 |
|
1,154 |
|
6,238 |
|||
|
Recycling Processing and Sales |
|
432 |
|
71 |
|
503 |
|||
|
WM Renewable Energy |
|
87 |
|
1 |
|
88 |
|||
|
Corporate and Other |
|
|
6 |
|
|
5 |
|
|
11 |
|
Total |
|
$ |
5,609 |
|
$ |
1,231 |
|
$ |
6,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
Intercompany |
|
Gross |
|||
|
|
Operating |
|
Operating |
|
Operating |
||||
|
|
|
Revenues |
Revenues (a)(b) |
Revenues |
|||||
|
Nine Months Ended September 30: |
|
|
|
|
|
|
|
|
|
|
2025 |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
4,197 |
|
$ |
657 |
|
$ |
4,854 |
|
|
Industrial |
|
2,339 |
|
|
656 |
|
2,995 |
||
|
Residential |
|
|
2,628 |
|
|
66 |
|
|
2,694 |
|
Other collection |
|
2,368 |
|
209 |
|
2,577 |
|||
|
Total collection |
|
11,532 |
|
1,588 |
|
13,120 |
|||
|
Landfill |
|
|
2,871 |
|
|
1,170 |
|
|
4,041 |
|
Transfer |
|
|
1,121 |
|
|
842 |
|
|
1,963 |
|
Total Collection and Disposal |
|
15,524 |
|
3,600 |
|
19,124 |
|||
|
Recycling Processing and Sales |
|
1,137 |
|
280 |
|
1,417 |
|||
|
WM Renewable Energy |
|
321 |
|
2 |
|
323 |
|||
|
WM Healthcare Solutions |
|
|
1,893 |
|
|
326 |
|
|
2,219 |
|
Corporate and Other |
|
|
16 |
|
|
23 |
|
|
39 |
|
Total |
|
$ |
18,891 |
|
$ |
4,231 |
|
$ |
23,122 |
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
4,005 |
|
$ |
586 |
|
$ |
4,591 |
|
|
Industrial |
|
2,323 |
|
|
592 |
|
2,915 |
||
|
Residential |
|
|
2,592 |
|
|
67 |
|
|
2,659 |
|
Other collection |
|
2,192 |
|
162 |
|
2,354 |
|||
|
Total collection |
|
11,112 |
|
1,407 |
|
12,519 |
|||
|
Landfill |
|
|
2,588 |
|
|
1,137 |
|
|
3,725 |
|
Transfer |
|
|
1,022 |
|
|
797 |
|
|
1,819 |
|
Total Collection and Disposal |
|
14,722 |
|
3,341 |
|
18,063 |
|||
|
Recycling Processing and Sales |
|
1,205 |
|
209 |
|
1,414 |
|||
|
WM Renewable Energy |
|
225 |
|
3 |
|
228 |
|||
|
Corporate and Other |
|
|
18 |
|
|
18 |
|
|
36 |
|
Total |
|
$ |
16,170 |
|
$ |
3,571 |
|
$ |
19,741 |
| (a) | Includes each segment's intercompany activity, including transactions 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) | Beginning with the 2024 Form 10-K, the Company adjusted gross and intercompany operating revenues to reflect the 15% royalty paid by WM Renewable Energy to our Collection and Disposal and Corporate and Other businesses for the purchase of landfill gas. There was no change to net operating revenues. Prior periods have been recast to conform to current presentation. |
The following table provides details associated with the period-to-period change in revenues and average yield (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Period-to-Period Change for the |
|
|
Period-to-Period Change for the |
||||||||||||||||||||||||
|
|
|
|
|
|
As a % of |
|
|
|
|
|
As a % of |
|
|
|
|
As a % of |
|
|
|
|
As a % of |
||||||||
|
|
|
|
|
|
Related |
|
|
|
|
|
Total |
|
|
|
|
Related |
|
|
|
|
Total |
||||||||
|
|
Amount |
Business(a) |
Amount |
Company(b) |
|
Amount |
Business(a) |
Amount |
Company(b) |
|
|||||||||||||||||||
|
Collection and Disposal |
|
$ |
185 |
|
3.8 |
% |
|
|
|
|
|
|
|
$ |
551 |
|
3.9 |
% |
|
|
|
|
|
|
|||||
|
Recycling Processing and Sales and WM Renewable Energy (c) |
|
(74) |
|
(14.0) |
|
|
|
|
|
|
|
(99) |
|
(6.8) |
|
|
|
|
|
|
|||||||||
|
Energy surcharge and mandated fees |
|
12 |
|
5.0 |
|
|
|
|
|
|
|
19 |
|
2.8 |
|
|
|
|
|
|
|||||||||
|
Total average yield (d) |
|
|
|
|
|
|
$ |
123 |
|
2.2 |
% |
|
|
|
|
|
|
$ |
471 |
|
2.9 |
% |
|||||||
|
Volume (e) |
|
|
|
|
|
|
43 |
|
0.8 |
|
|
|
|
|
|
|
166 |
|
1.0 |
|
|||||||||
|
Internal revenue growth |
|
|
|
|
|
|
|
|
166 |
|
3.0 |
|
|
|
|
|
|
|
|
|
637 |
|
3.9 |
|
|||||
|
Acquisitions |
|
|
|
|
|
|
|
|
674 |
|
11.9 |
|
|
|
|
|
|
|
|
|
2,114 |
|
13.1 |
|
|||||
|
Divestitures |
|
|
|
|
|
|
|
|
(3) |
|
- |
|
|
|
|
|
|
|
|
|
(13) |
|
(0.1) |
|
|||||
|
Foreign currency translation |
|
|
|
|
|
|
|
|
(3) |
|
- |
|
|
|
|
|
|
|
|
|
(17) |
|
(0.1) |
|
|||||
|
Total |
|
|
|
|
|
|
|
$ |
834 |
|
14.9 |
% |
|
|
|
|
|
|
|
$ |
2,721 |
|
16.8 |
% |
|||||
| (a) | Calculated by dividing the increase or decrease for the current year period by the prior year period's related business revenues adjusted to exclude the impacts of divestitures for the current year period. |
| (b) | Calculated by dividing the increase or decrease for the current year period by the prior year period's total Company revenues adjusted to exclude the impacts of divestitures for the current year period. |
| (c) | Includes combined impact of commodity price variability in both our Recycling Processing and Sales and WM Renewable Energy segments, as well as changes in certain recycling fees charged by our collection and disposal operations. |
| (d) | The amounts reported herein represent the changes in our revenues attributable to average yield for the total Company. |
| (e) | Includes activities from our Corporate and Other businesses. |
The following provides further details about our period-to-period change in revenues:
Average Yield
Collection and Disposal Average Yield - This measure reflects the effect on our revenues from the pricing activities of our collection, transfer and landfill operations, exclusive of volume changes. 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.
The details of our revenue growth from Collection and Disposal average yield are as follows (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-to-Period Change for the |
|
Period-to-Period Change for the |
|||||||
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||
|
|
|
September 30, 2025 vs. 2024 |
September 30, 2025 vs. 2024 |
|
|||||||
|
|
|
|
|
|
As a % of |
|
|
|
As a % of |
|
|
|
|
|
|
|
|
Related |
|
|
|
Related |
|
|
|
|
Amount |
Business |
Amount |
Business |
|||||||
|
Commercial |
|
$ |
67 |
|
4.7 |
% |
$ |
221 |
|
5.2 |
% |
|
Industrial |
|
21 |
|
2.3 |
|
78 |
|
2.9 |
|
||
|
Residential |
|
55 |
|
6.5 |
|
145 |
|
5.8 |
|
||
|
Total collection |
|
143 |
|
4.2 |
|
444 |
|
4.5 |
|
||
|
Landfill |
|
23 |
|
2.7 |
|
57 |
|
2.4 |
|
||
|
Transfer |
|
19 |
|
5.6 |
|
50 |
|
5.1 |
|
||
|
Total Collection and Disposal |
|
$ |
185 |
|
3.8 |
% |
$ |
551 |
|
3.9 |
% |
Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business. We continue to see yield growth in our landfill business primarily driven by municipal solid waste, which achieved average yield of 6.7% and 6.0% for the three and nine months ended September 30, 2025, respectively.
Recycling Processing and Sales and WM Renewable Energy - Recycling Processing and Sales revenues attributable to yield decreased $72 million and $113 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. Average market prices for single-stream recycled commodities declined nearly 35% and 15% for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. Revenues attributable to yield in our WM Renewable Energy segment decreased $2 million and increased $14 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. Year-to-date increases in natural gas and electricity pricing were partially offset by declines in RINs pricing. While there may be short-term fluctuations in our commodity-driven businesses as prices change, we continue to take proactive steps to adjust our business models to protect against the downside risk of changes in commodity prices.
Energy Surcharge and Mandated Fees - These fees increased $12 million and $19 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. During the three and nine months ended September 30, 2025, as compared to the prior year periods, mandated fees increased $4 million and $29 million, respectively. Fluctuations in energy surcharges drove an increase of $8 million for the quarter to date period and a decrease of $10 million for the year to date period. The mandated fees are primarily related to fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations, particularly in our West Tier.
Volume
Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $43 million and $166 million for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. For the three months ended September 30, 2025, volume growth was led by our landfill business, with increases in municipal solid waste and special waste. Industrial collection volumes rose for the first time since 2022, and growth projects drove gains in our WM Renewable Energy and Recycling Processing and Sales segments. These gains were partially offset by a decline in residential collection volumes, reflecting our strategic exit from lower-margin contracts. In addition to the growth in the quarter, the year-to-date period benefited from elevated special waste volumes in the West Tier driven by wildfire clean-up efforts that were completed by August 2025, and an increase in Strategic Business Solutions volumes due to our differentiated service model. These gains were also partially offset by a decline in residential collection volumes, reflecting our strategic exit from lower-margin contracts.
Acquisitions and Divestitures
Acquisitions and divestitures resulted in a net increase in revenues of $671 million, or 11.9%, and $2,101 million, or 13.0%, respectively, for the three and nine months ended September 30, 2025, as compared to the prior year periods. This
increase was primarily due to our acquisition of Stericycle in November 2024. The remaining increase was related to our ongoing investment in tuck-in collection and disposal businesses.
Operating Expenses
The following table summarizes the major components of our operating expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||||||
|
|
2025 |
|
2024 |
2025 |
|
2024 |
|
|||||||||||||||||
|
Labor and related benefits |
|
$ |
1,139 |
17.7 |
% |
|
$ |
962 |
17.2 |
% |
|
$ |
3,342 |
17.7 |
% |
|
$ |
2,780 |
17.2 |
% |
||||
|
Transfer and disposal costs |
|
357 |
|
5.5 |
|
|
339 |
|
6.0 |
|
|
1,055 |
|
5.6 |
|
|
981 |
|
6.1 |
|
||||
|
Maintenance and repairs |
|
569 |
|
8.8 |
|
|
527 |
|
9.4 |
|
|
1,698 |
|
9.0 |
|
|
1,538 |
|
9.5 |
|
||||
|
Subcontractor costs |
|
657 |
|
10.2 |
|
|
576 |
|
10.3 |
|
|
1,888 |
|
10.0 |
|
|
1,673 |
|
10.3 |
|
||||
|
Cost of goods sold |
|
233 |
|
3.6 |
|
|
282 |
|
5.0 |
|
|
715 |
|
3.8 |
|
|
766 |
|
4.7 |
|
||||
|
Fuel |
|
132 |
|
2.1 |
|
|
106 |
|
1.9 |
|
|
392 |
|
2.1 |
|
|
329 |
|
2.0 |
|
||||
|
Disposal and franchise fees and taxes |
|
211 |
|
3.3 |
|
|
197 |
|
3.5 |
|
|
607 |
|
3.2 |
|
|
559 |
|
3.5 |
|
||||
|
Landfill operating costs |
|
138 |
|
2.1 |
|
|
130 |
|
2.3 |
|
|
404 |
|
2.1 |
|
|
393 |
|
2.4 |
|
||||
|
Risk management |
|
72 |
|
1.1 |
|
|
96 |
|
1.7 |
|
|
278 |
|
1.4 |
|
|
269 |
|
1.7 |
|
||||
|
Other |
|
325 |
|
5.1 |
|
|
184 |
|
3.3 |
|
|
940 |
|
5.0 |
|
|
542 |
|
3.4 |
|
||||
|
|
|
$ |
3,833 |
|
59.5 |
% |
|
$ |
3,399 |
|
60.6 |
% |
|
$ |
11,319 |
|
59.9 |
% |
|
$ |
9,830 |
|
60.8 |
% |
Our operating expenses for the three and nine months ended September 30, 2025 increased as compared to the three and nine months ended September 30, 2024, primarily due to (i) our recent acquisitions, particularly Stericycle; (ii) increased landfill volumes and (iii) moderate inflationary pressures. These increases were offset, in part, by (i) lower residential volumes; (ii) decreased cost of goods sold attributable to lower recycling commodity prices; (iii) continued operating efficiency and cost control initiatives in our Collection and Disposal businesses and (iv) lower annual incentive compensation and employee benefit expenses. Despite the overall increase in operating expenses, efficiency gains, improved turnover and momentum in truck deliveries, combined with the benefit of price increases and high margin special waste volumes, positioned us to reduce our operating expenses as a percentage of revenue when compared to the prior year period.
Significant items affecting operating expenses during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:
Labor and Related Benefits -The increase in labor and related benefits costs was driven by the addition of employees as a result of our recent acquisitions, particularly Stericycle, and annual employee wage increases. The increase was offset, in part, by (i) lower annual incentive compensation and employee benefit expenses; (ii) residential collection efficiency improvements; (iii) lower residential volumes attributable to intentional shedding of lower margin contracts and (iv) improved driver retention.
Transfer and Disposal Costs - The increase in transfer and disposal costs was primarily due to our recent acquisitions and inflationary cost pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers. This increase was partially offset by lower residential volumes attributable to intentional shedding of lower margin contracts.
Maintenance and Repairs - The increase in maintenance and repairs costs was driven by (i) additional costs incurred as a part of our recent acquisitions; (ii) inflation in parts, supplies and third-party services and (iii) annual employee wage increases and higher technician headcount. These increases were offset, in part, by an increase in new truck deliveries, which lowered the average fleet age and reduced demand for parts, supplies and third-party services.
Subcontractor Costs - The increase in subcontractor costs was primarily due to additional costs incurred as a part of our recent acquisitions and continued inflationary cost pressures, particularly labor costs from third-party haulers.
Cost of Goods Sold - The decrease in cost of goods sold was primarily driven by a 35% and 15% decrease in average market prices for single-stream recycled commodities for the three and nine months ended September 30, 2025, respectively, as compared to the prior year periods. This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought on-line since the prior year periods.
Fuel - The increase in fuel costs was primarily due to our recent acquisitions and the expiration of the federal alternative fuel tax credit on December 31, 2024. For the nine months ended September 30, 2025, the increase was partially offset by declines in diesel prices.
Disposal and Franchise Fees and Taxes - The increase in disposal and franchise fees and taxes was primarily driven by increased landfill volumes and an overall rate increase in fees and taxes paid to municipalities on our disposal volumes.
Landfill Operating Costs - The increase in landfill operating costs for the three and nine months ended September 30, 2025, as compared to the prior year periods, was primarily due to an increase in volumes and higher leachate treatment costs in our West Tier. Partially offsetting the increase for the nine months ended September 30, 2025 were certain adjustments to increase our environmental remediation reserve during the first quarter of 2024.
Risk Management - Risk management costs decreased for the three months ended September 30, 2025, as compared to the prior year period, primarily due to an insurance recovery associated with a 2022 transfer station fire and improved claims experience. These reductions were offset, in part, by additional claims and premiums attributable to our recent acquisitions, particularly Stericycle. The increase for the nine months ended September 30, 2025, as compared to the prior year period, was due to additional claims and premiums attributable to our recent acquisitions, particularly, Stericycle, and increases in claims costs due to negative claim development on a limited population of severe cases during the first quarter of 2025. These increases were offset, in part, by increased insurance recoveries and improved claims experience.
Other - Other operating cost increases were primarily due to (i) additional expenses attributable to our recent acquisitions, particularly Stericycle; (ii) gains on the sale of real estate in 2024 and, to a much lesser extent, (iii) increased utility costs and property taxes largely attributable to new RNG plants brought on-line since the prior year periods.
Selling, General and Administrative Expenses
The following table summarizes the major components of our selling, general and administrative expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
||||||||||||||||
|
Labor and related benefits |
|
$ |
402 |
6.2 |
% |
|
$ |
324 |
5.8 |
% |
|
$ |
1,241 |
6.6 |
% |
|
$ |
961 |
6.0 |
% |
||||
|
Professional fees |
|
100 |
|
1.6 |
|
|
89 |
|
1.6 |
|
|
298 |
|
1.6 |
|
|
200 |
|
1.2 |
|
||||
|
Provision for bad debts |
|
18 |
|
0.3 |
|
|
11 |
|
0.2 |
|
|
61 |
|
0.3 |
|
|
37 |
|
0.2 |
|
||||
|
Other |
|
145 |
|
2.2 |
|
|
101 |
|
1.8 |
|
|
448 |
|
2.3 |
|
|
319 |
|
2.0 |
|
||||
|
|
|
$ |
665 |
|
10.3 |
% |
|
$ |
525 |
|
9.4 |
% |
|
$ |
2,048 |
|
10.8 |
% |
|
$ |
1,517 |
|
9.4 |
% |
Selling, general and administrative expenses increased for the three and nine months ended September 30, 2025, as compared to the prior year periods, primarily due to our recent acquisitions, particularly Stericycle, including consulting and technology costs incurred to support Stericycle's integration.
Significant items affecting selling, general and administrative expenses during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:
Labor and Related Benefits - The increase in labor and related benefits costs was primarily related to (i) our recent acquisitions, particularly Stericycle; (ii) higher long-term incentive compensation costs and (iii) annual employee wage increases. These increases were partially offset by lower annual incentive compensation and employee benefit costs.
Professional Fees -The increase in professional fees was primarily attributable to our acquisition of Stericycle, including integration, business optimization and system development costs.
Provision for Bad Debts - The increase in provision for bad debts during the three months ended September 30, 2025, as compared to the prior year period, was primarily due to variability in the adjustments to our allowance for doubtful accounts driven by changes in the balance and slight changes in mix of accounts receivable. Additionally, there was an increase for the nine months ended September 30, 2025, as compared to the prior year period, primarily attributable to our WM Healthcare Solutions segment driven by legacy Stericycle data and system challenges.
Other - The increase in other expenses was primarily related to increased spend across multiple cost categories, including technology, risk management and travel, largely driven by the acquisition and integration of Stericycle.
Depreciation, Depletion and Amortization Expenses
The following table summarizes the components of our depreciation, depletion and amortization expenses for the three and nine months ended September 30 (in millions of dollars and as a percentage of revenues):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||||||
|
|
2025 |
|
2024 |
2025 |
|
2024 |
||||||||||||||||||
|
Depreciation of tangible property and equipment |
|
$ |
394 |
6.1 |
% |
|
$ |
323 |
5.8 |
% |
|
$ |
1,151 |
6.1 |
% |
|
$ |
943 |
5.8 |
% |
||||
|
Depletion of landfill airspace |
|
227 |
|
3.5 |
|
|
203 |
|
3.6 |
|
|
630 |
|
3.3 |
|
|
580 |
|
3.6 |
|
||||
|
Amortization of intangible assets |
|
108 |
|
1.7 |
|
|
32 |
|
0.5 |
|
|
312 |
|
1.7 |
|
|
92 |
|
0.6 |
|
||||
|
|
|
$ |
729 |
|
11.3 |
% |
|
$ |
558 |
|
9.9 |
% |
|
$ |
2,093 |
|
11.1 |
% |
|
$ |
1,615 |
|
10.0 |
% |
The increase in depreciation of tangible property and equipment for the three and nine months ended September 30, 2025, as compared to the prior year periods, was driven by our recent acquisitions and increased investments in capital assets such as trucks, equipment and landfills. The increase in depletion of landfill airspace for the three months ended September 30, 2025, as compared to the prior year period, was primarily driven by volume increases. The increase in depletion of landfill airspace for the nine months ended September 30, 2025, as compared to the prior year period, was primarily driven by volume increases, including increases driven by wildfire volumes. The increase in amortization of intangible assets for the three and nine months ended September 30, 2025 was primarily driven by the amortization of customer relationships and other intangibles acquired as part of the Stericycle acquisition.
Restructuring
Restructuring charges for the three and nine months ended September 30, 2025 were primarily driven by employee costs related to integration of our acquisition of Stericycle as well as employee retention and severance costs incurred to support automation at our recycling facilities and in certain back-office functions.
(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net
(Gain) loss from divestitures, asset impairments and unusual items, net for the three months ended September 30, 2025 includes (i) a $152 million impairment charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities within our Recycling Processing and Sales segment resulting from significant deterioration of market pricing and demand for post-consumer plastics; (ii) a $45 million impairment charge related to the decision to accelerate the closure of a landfill within our East Tier and (iii) an $11 million negotiated payment for early termination of a contract in our WM Renewable Energy segment. The nine months ended September 30, 2025 also includes a $16 million goodwill impairment charge related to a business engaged
in oil recovery and sludge processing services. This charge is reflected in Other Ancillary within our Collection and Disposal businesses.
(Gain) loss from divestitures, asset impairments and unusual items, net for the three months ended September 30, 2024 primarily relates to 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 November 2024 acquisition of Stericycle. The nine months ended September 30, 2024 included 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. This charge is reflected in our Corporate and Other measures within our segment reporting.
Income from Operations
The following table summarizes income from operations for our reportable segments for the three and nine months ended September 30 (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|||||||||||||||
|
|
|
September 30, |
|
Period-to-Period |
|
September 30, |
|
Period-to-Period |
|||||||||||||||
|
|
|
2025 |
2024 |
Change |
|
2025 |
2024 |
|
Change |
||||||||||||||
|
Collection and Disposal: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
East Tier |
|
$ |
740 |
|
$ |
718 |
|
$ |
22 |
3.1 |
% |
$ |
2,130 |
|
$ |
2,064 |
|
$ |
66 |
3.2 |
% |
||
|
West Tier |
|
|
728 |
|
|
708 |
|
|
20 |
|
2.8 |
|
|
2,164 |
|
|
2,009 |
|
|
155 |
7.7 |
|
|
|
Other Ancillary |
|
- |
|
- |
|
- |
* |
|
(20) |
|
(9) |
|
(11) |
* |
|
||||||||
|
Collection and Disposal |
|
1,468 |
|
1,426 |
|
42 |
2.9 |
|
4,274 |
|
4,064 |
|
210 |
5.2 |
|
||||||||
|
Recycling Processing and Sales |
|
(137) |
|
21 |
|
(158) |
* |
|
(95) |
|
69 |
|
(164) |
* |
|
||||||||
|
WM Renewable Energy |
|
|
21 |
|
|
28 |
|
|
(7) |
|
(25.0) |
|
|
78 |
|
|
67 |
|
|
11 |
|
16.4 |
|
|
WM Healthcare Solutions |
|
|
(21) |
|
|
- |
|
|
(21) |
|
* |
|
|
(65) |
|
|
- |
|
|
(65) |
|
* |
|
|
Corporate and Other |
|
|
(342) |
|
|
(356) |
|
|
14 |
|
(3.9) |
|
|
(1,039) |
|
|
(1,056) |
|
|
17 |
|
(1.6) |
|
|
Total |
|
$ |
989 |
|
$ |
1,119 |
|
$ |
(130) |
(11.6) |
% |
$ |
3,153 |
|
$ |
3,144 |
|
$ |
9 |
0.3 |
% |
||
|
Percentage of revenues |
|
15.3 |
% |
|
20.0 |
% |
|
|
|
|
|
|
16.7 |
% |
|
19.4 |
% |
|
|
|
|
|
|
*Percentage change does not provide a meaningful comparison.
The significant items affecting income from operations for our segments during the three and nine months ended September 30, 2025, as compared to the prior year periods, are summarized below:
| ● | Collection and Disposal - Income from operations in our Collection and Disposal businesses increased primarily due to (i) revenue growth from price increases, which translate into increased yield or average unit price; (ii) elevated special waste volume in our West Tier, which was favorably impacted by the wildfire clean-up activities that were completed by August 2025; (iii) contributions from our strategic acquisitions; (iv) actions to improve the efficiency and operating costs incurred to serve our customers and (v) a decline in employee benefit expenses. These increases were partially offset by (i) higher depreciation and depletion costs as discussed in Depreciation, Depletion and Amortization Expensesabove; (ii) prior year gains on the sale of non-strategic assets and (iii) a $45 million impairment charge in the current year related to the decision to accelerate the closure of a landfill within our East Tier. |
| ● | Recycling Processing and Sales- The decline in income from operations in Recycling Processing and Sales was primarily due to a $152 million impairment charge related to the decision to temporarily suspend the operations of a business engaged in accelerating plastic film and wrap recycling capabilities resulting from significant deterioration of market pricing and demand for post-consumer plastics and declining commodity prices compared to the prior year periods. These decreases were partially offset by increased volumes, which can be attributed to the improved throughput of our facilities and the addition of new market facilities, and improved operating costs from the automation of our recycling facilities. |
| ● | WM Renewable Energy- The decline in income from operations in WM Renewable Energy for the three months ended September 30, 2025, as compared to the prior year period, was primarily due to declines in RINs pricing and a negotiated payment for early termination of a contract. This decline was partially offset by higher volumes resulting from the completion of projects that increase the beneficial use of landfill gas sold to third parties and an increase in electricity pricing. The increase in income from operations for the nine months ended September 30, 2025, as compared to the prior year period, was due to higher electricity pricing and higher volumes resulting from the completion of projects that increase the beneficial use of landfill gas sold to third parties. |
| ● | WM Healthcare Solutions - The positive earnings contributions from the WM Healthcare Solutions business during the three and nine months ended September 30, 2025, were more than offset by depreciation and amortization expenses and integration related expenses, driving a loss in both periods. |
| ● | Corporate and Other - The increase in income from operations for the three and nine months ended September 30, 2025, as compared to the prior year periods, was due to (i) lower annual incentive compensation; (ii) transaction costs incurred in the prior year in connection with our Stericycle acquisition and (iii) a prior year charge associated with the divestiture of a minority investment in a medical waste company. The increase was partially offset by (i) higher long term incentive compensation; (ii) annual employee wage increases and (iii) increases in consulting fees driven by integration and business optimization activities related to the acquisition of Stericycle. Additionally, for the nine months ended September 30, 2025, the increase was further offset by a $54 million charge in the prior year period to increase the estimated fair value of a liability associated with the expected disposition of an investment we hold in a waste diversion technology business. |
Interest Expense, Net
Our interest expense, net was $225 million and $689 million for the three and nine months ended September 30, 2025, respectively, compared to $131 million and $397 million for the three and nine months ended September 30, 2024, respectively. The increase is primarily related to an increase in our average debt balances to fund our November 2024 acquisition of Stericycle.
Income Tax Expense
Our income tax expense and effective income tax rate was $172 million, or 22.2%, and $524 million, or 21.0%, for the three and nine months ended September 30, 2025, respectively, compared to $235 million, or 23.6%, and $611 million, or 22.2%, for the three and nine months ended September 30, 2024, respectively. See Note 4 to the Condensed Consolidated Financial Statements for more information related to income taxes.
Tax Legislation - On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law. We are currently evaluating several business tax provisions in the legislation, none of which are expected to have a material impact on our effective tax rate. However, the permanent reinstatement of 100% bonus depreciation is expected to reduce our cash taxes by approximately $125 million in 2025.
The Inflation Reduction Act of 2022 ("IRA") contains several tax-related provisions, including with respect to (i) alternative fuel tax credits; (ii) tax incentives for investments in renewable energy production, carbon capture and other climate actions and (iii) the overall measurement of corporate income taxes. Given the complexity and uncertainty around the applicability of the legislation to our specific facts and circumstances, we continue to analyze the IRA provisions to identify and quantify potential opportunities and applicable benefits included in the legislation. The provisions of the IRA concerning investment tax credits are expected to generate a cumulative benefit of approximately $400 million, $145 million of which was recognized in 2023 and 2024 with the remainder anticipated to be realized in 2025 and 2026. The expected benefit from the investment tax credit for 2025 and 2026 is dependent on a number of estimates and assumptions, including the timing of project completion. Additionally, we expect that the production tax credit incentives for investments in renewable energy and carbon capture, as expanded by the IRA, could result in an incremental benefit to the Company, although at this time, the anticipated amount of such benefit has not been quantified due, in part, to the lack of regulatory guidance.
Liquidity and Capital Resources
The Company consistently generates cash flow from operations that meets and exceeds our working capital needs, allows for payment of our dividends, investment in the business through capital expenditures and tuck-in acquisitions and funding of strategic sustainability growth investments. We continually monitor our actual and forecasted cash flows, our liquidity and our capital resources, enabling us to plan for our present needs and fund unbudgeted business requirements that may arise during the year. The Company believes that its investment grade credit ratings, diverse investor base, large value of unencumbered assets and modest leverage enable it to obtain adequate financing, and refinance upcoming maturities, as necessary to meet its ongoing capital, operating, strategic and other liquidity requirements. We also have the ability to manage liquidity during periods of significant financial market disruption through temporary modification of our capital expenditure and share repurchase plans.
Summary of Cash and Cash Equivalents, Restricted Funds and Debt Obligations
The following is a summary of our cash and cash equivalents, restricted funds and debt balances (in millions):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
||
|
|
2025 |
2024 |
||||
|
Cash and cash equivalents |
|
$ |
175 |
|
$ |
414 |
|
Restricted funds and other: |
|
|
|
|||
|
Insurance reserves |
|
$ |
502 |
|
$ |
385 |
|
Final capping, closure, post-closure and environmental remediation funds |
|
|
138 |
|
|
128 |
|
Other |
|
31 |
|
- |
||
|
Total restricted funds and other (a) |
|
$ |
671 |
|
$ |
513 |
|
Debt: |
|
|
||||
|
Current portion |
|
$ |
880 |
|
$ |
1,359 |
|
Long-term portion |
|
22,482 |
|
22,541 |
||
|
Total debt |
|
$ |
23,362 |
|
$ |
23,900 |
| (a) | As of September 30, 2025 and December 31, 2024, $130 million and $100 million, respectively, of these account balances were included in other current assets in our Condensed Consolidated Balance Sheets. |
Debt - As of September 30, 2025, we had approximately $3.9 billion of debt maturing within the next 12 months, including (i) $1.5 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) $861 million of short-term borrowings under our commercial paper program (net of related discount on issuance); (iii) $500 million of 0.75% senior notes that mature in November 2025; (iv) $223 million of 7.1% senior notes that mature in August 2026; (v) $359 million of 2.6% Canadian senior notes that mature in September 2026 and (vi) $380 million of other debt with scheduled maturities within the next 12 months, including $188 million of tax-exempt bonds. As of September 30, 2025, we have classified $3.0 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. The remaining $880 million of debt maturing in the next 12 months is classified as current obligations.
Guarantor Financial Information
WM Holdings has fully and unconditionally guaranteed all of WMI's senior indebtedness. WMI has fully and unconditionally guaranteed all of WM Holdings' senior indebtedness. None of WMI's other subsidiaries have guaranteed any of WMI's or WM Holdings' debt. 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):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
||
|
|
2025 |
2024 |
||||
|
Balance Sheet Information: |
|
|
|
|
|
|
|
Current assets |
$ |
66 |
|
$ |
15 |
|
|
Noncurrent assets |
|
|
13 |
|
|
14 |
|
Current liabilities |
|
896 |
|
1,367 |
||
|
Noncurrent liabilities: |
|
|
|
|
|
|
|
Advances due to affiliates |
|
|
17,274 |
|
|
15,328 |
|
Other noncurrent liabilities |
|
20,018 |
|
20,140 |
||
|
|
|
|
|
|
|
Nine Months Ended |
||
|
|
|
September 30, 2025 |
|
|
Income Statement Information: |
|
|
|
|
Revenue |
$ |
- |
|
|
Operating income |
|
|
- |
|
Net loss |
|
|
(510) |
Summary of Cash Flow Activity
The following is a summary of our cash flows for the nine months ended September 30 (in millions):
|
|
|
|
|
|
|
|
|
|
|
2025 |
2024 |
|||
|
Net cash provided by operating activities |
|
$ |
4,345 |
|
$ |
3,879 |
|
Net cash used in investing activities |
|
$ |
(2,699) |
|
$ |
(2,839) |
|
Net cash used in financing activities |
|
$ |
(1,830) |
|
$ |
(903) |
Net Cash Provided by Operating Activities - Our operating cash flows increased by $466 million for the nine months ended September 30, 2025, as compared to the prior year period, driven by higher earnings in the majority of our segments, including the contributions from our recent acquisitions, and lower cash tax payments. These increases were partially offset by higher cash interest primarily due to additional debt incurred to fund our acquisition of Stericycle and higher annual incentive compensation payments. We continue to execute well in optimizing working capital, particularly in reducing days sales outstanding and aligning our days-to-pay measure with contract terms, though overall working capital changes have been pressured by the Stericycle acquisition.
Net Cash Used in Investing Activities - The most significant items included in our investing cash flows for the nine months ended September 30, 2025 and 2024 are summarized below:
| ● | Capital Expenditures -We used $2,339 million and $2,116 million for capital expenditures during the nine months ended September 30, 2025 and 2024, respectively. The increase in capital spending is primarily driven by (i) increased investments in capital assets such as trucks, equipment and landfills and (ii) capital expenditures within our WM Healthcare Solutions segment to support the business. The increase in capital spending was partially offset by a planned reduction in capital investment in our sustainability growth projects as we move from peak construction of this portfolio into a period where we will harvest strong returns on these businesses. |
| ● | Acquisitions - Our spending on acquisitions was $403 million and $790 million during the nine months ended September 30, 2025 and 2024, respectively, of which $395 million and $782 million, respectively, are considered cash used in investing activities. The remaining spend is cash used in financing activities related to the timing of contingent consideration paid. Substantially all of these acquisitions are related to our solid waste and recycling businesses. |
| ● | Divestitures- Proceeds from divestitures of businesses and other assets, net of cash divested were $108 million and $99 million for the nine months ended September 30, 2025 and 2024, respectively. Proceeds in 2025 primarily related to the sale of our WM Healthcare Solutions' Spain and Portugal subsidiaries. The remaining 2025 and 2024 proceeds were from the sale of certain non-strategic assets. |
| ● | Other, Net- The year-over-year changes in other investing activities are primarily driven by changes in our investment portfolio associated with a wholly-owned insurance captive. During the nine months ended September 30, 2025 and 2024, we used $75 million and $38 million, respectively, of cash from restricted cash and cash equivalents to invest in available-for-sale securities. |
Net Cash Used in Financing Activities - The most significant items affecting the comparison of our financing cash flows for the nine months ended September 30, 2025 and 2024 are summarized below:
| ● | Debt Borrowings and Repayments -The following summarizes our cash borrowings and repayments of debt for the nine months ended September 30 (in millions): |
|
|
|
|
|
|
|
|
|
|
2025 |
|
2024 |
|||
|
Borrowings: |
|
|
||||
|
Commercial paper |
$ |
14,704 |
|
$ |
9,424 |
|
|
Senior notes |
|
|
- |
|
|
1,490 |
|
Tax-exempt bonds |
|
252 |
|
|
- |
|
|
|
$ |
14,956 |
|
$ |
10,914 |
|
|
Repayments: |
|
|||||
|
Commercial paper |
$ |
(15,133) |
|
$ |
(10,306) |
|
|
Senior notes |
|
(422) |
|
|
(156) |
|
|
Tax-exempt bonds |
(110) |
|
(60) |
|||
|
Other debt |
(107) |
|
(97) |
|||
|
|
$ |
(15,772) |
|
$ |
(10,619) |
|
|
Net cash borrowings (repayments) |
|
$ |
(816) |
|
$ |
295 |
Refer to Note 3 to the Condensed Consolidated Financial Statements for additional information related to our debt borrowings and repayments.
| ● | Common Stock Repurchase Program -During the nine months ended September 30, 2024, we used $262 million to repurchase shares of our common stock under accelerated share repurchase agreements. In the fourth quarter of 2024, we announced our temporary suspension of share repurchase activity as a result of the acquisition of Stericycle. We expect to resume share repurchases once the Company's leverage returns to targeted levels, which is currently projected to be the second quarter of 2026. |
| ● | Cash Dividends - For the periods presented, all dividends have been declared by our Board of Directors. We paid cash dividends of $1,001 million and $909 million during the nine months ended September 30, 2025 and 2024, respectively. The increase in dividend payments is primarily due to our quarterly per share dividend increasing from $0.75 in 2024 to $0.825 in 2025. |
Free Cash Flow
We are presenting free cash flow, which is a non-GAAP measure of liquidity, in our disclosures because we use this measure in the evaluation and management of our business. We define free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other assets, net of cash divested. We believe it is indicative of our ability to pay our quarterly dividends, repurchase common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay our debt obligations. Free cash flow is not intended to replace net cash provided by operating activities, which is the most comparable GAAP measure. We believe free cash flow gives investors useful insight into how we view our liquidity, but the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that we have committed to, such as declared dividend payments and debt service requirements.
Our calculation of free cash flow and reconciliation to net cash provided by operating activities for the three and nine months ended September 30, 2025 and 2024 is shown in the table below (in millions) and may not be calculated the same as similarly-titled measures presented by other companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
September 30, |
|
September 30, |
||||||||
|
|
|
2025 |
2024 |
2025 |
2024 |
|||||||
|
Net cash provided by operating activities |
|
$ |
1,592 |
|
$ |
1,358 |
|
$ |
4,345 |
|
$ |
3,879 |
|
Capital expenditures to support the business |
|
|
(635) |
|
|
(598) |
|
|
(1,910) |
|
|
(1,545) |
|
Capital expenditures - sustainability growth investments (a) |
|
|
(141) |
|
|
(183) |
|
|
(429) |
|
|
(571) |
|
Total capital expenditures |
|
(776) |
|
(781) |
|
(2,339) |
|
(2,116) |
||||
|
Proceeds from divestitures of businesses and other assets, net of cash divested |
|
5 |
|
41 |
|
108 |
|
99 |
||||
|
Free cash flow |
|
$ |
821 |
|
$ |
618 |
|
$ |
2,114 |
|
$ |
1,862 |
| (a) | These growth investments are intended to further our sustainability leadership position by increasing recycling volumes and growing renewable natural gas generation. We expect they will deliver circular solutions for our customers and drive environmental value to the communities we serve. |
Critical Accounting Estimates and Assumptions
In preparing our financial statements, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with precision from available data or simply cannot be calculated. In some cases, these estimates are difficult to determine and we must exercise significant judgment. In preparing our financial statements, the most difficult, subjective and complex estimates and the assumptions that present the greatest amount of uncertainty relate to our accounting for landfills, environmental remediation liabilities, long-lived asset impairments, intangible asset impairments and the fair value of assets and liabilities acquired in business combinations, as described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.
Seasonal Trends
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. Our operating revenues and volumes typically experience seasonal increases in the summer months that are reflected in second and third quarter revenues and results of operations.
Service or operational disruptions caused by severe storms, extended periods of inclement weather or climate events can significantly affect the operating results of the geographic areas affected. Extreme weather events may also lead to
supply chain disruption and delayed project development, or disruption of our customers' businesses, reducing the amount of waste generated by their operations.
Conversely, certain destructive weather and climate conditions, such as wildfires in the Western U.S. and hurricanes that most often impact our operations in the Southern and Eastern U.S. during the second half of the year, can increase our revenues in the geographic areas affected as a result of the waste volumes generated by these events.
Inflation
Variability in economic conditions, including inflation, interest rates, employment trends, and supply chain reliability, can create risk and uncertainty in financial outlook. We take proactive steps to recover and mitigate inflationary cost pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity and investments in technology to automate certain aspects of our business. 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.
Waste Management Inc. published this content on October 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 28, 2025 at 19:49 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]