Waste Management · Earnings release

WM

Announces First Quarter 2025 Earnings

Strong Operational

Performance Combined with WM Healthcare Solutions Results Deliver Outsized Growth

WM Adds Two Recycling

Automation Projects in Key Markets During the Quarter

Houston — April 28, 2025 — WM (NYSE: WM) today announced financial results for the quarter ended March 31, 2025.

Three Months Ended

Three Months Ended

(in millions, except per share amounts)

(in millions, except per share amounts)

As Reported

As Adjusted(a)

As Reported

As Adjusted(a)

Revenue

$

$

$

$

Income from Operations

$

$

$

$

Operating EBITDA(b)

$

$

$

$

Operating EBITDA Margin

%

%

%

%

Net Income(c)

$

$

$

$

Diluted EPS

$

$

$

$

“Our first quarter results reflect the strong

track record of the WM team as we started the year delivering on each of our strategic priorities,” said Jim Fish, WM’s President

and CEO. “We continue to deliver disciplined revenue growth and cost optimization in our core business, while advancing our sustainability

growth investments and driving value from the Stericycle acquisition. This led to first quarter revenue growth of 16.7% and adjusted operating

EBITDA growth of 12.2% compared to the prior year period.(a) These solid first quarter results, as well as the strength

and resiliency of our business model, give us confidence we are on pace to achieve our 2025 outlook.”

Fish continued, “Our new medical waste

and secure information destruction businesses, together referred to as WM Healthcare Solutions, performed well in the first full quarter

as part of WM. Integration efforts are advancing and keeping us on track to achieve our full year synergy targets.”

KEY

HIGHLIGHTS FOR the fIRST quarter OF 2025

Operating EBITDA

($ in millions)

($ in millions)

Total Company

Breakout

As Adjusted(a)

Total Company

Breakout

As Adjusted(a)

Amount

Margin

Amount

Margin

Amount

Margin

Amount

Margin

WM Legacy Business(d)

$

%

$

%

$

%

$

%

WM Healthcare Solutions

%

%

-

-

-

-

Total Company

$

%

$

%

$

%

$

%

·

Adjusted operating EBITDA for the WM Legacy Business grew 6.0% and margin achieved 30% for the fourth

consecutive quarter.(a) The Company’s Collection and Disposal business led the way, driven by organic revenue growth

from price, disciplined cost initiatives, and a continued focus on optimizing business mix. The Company’s Recycling Processing and

Sales and WM Renewable Energy businesses together contributed $18 million to operating EBITDA growth, primarily due to sustainability

growth projects.

·

WM Healthcare Solutions contributed $95 million of adjusted operating EBITDA, in line with expectations.(a) G1The

Company is on track to achieve its targeted synergies of $80 to $100 million in 2025.

Revenue

($ in millions)

($ in millions)

Amount

Growth

Amount

Growth

WM Legacy Business(d)

$

%

$

%

WM Healthcare Solutions

N/A

-

-

Total Company

$

%

$

%

·

Revenue growth of 4.7% in the WM Legacy Business was driven by core price of 6.5% and Collection and Disposal

yield of 4.0% as the Company continues its focus on maximizing customer lifetime value.(e)

·

Workday adjusted volumes in the Collection and Disposal business were flat in the quarter with growth

in landfill volumes offset by the Company’s strategic exit from low-margin residential collection business.

·

Volume was negatively impacted by 30 basis points from winter weather events in the Company's Eastern

Tier.

Operating Expenses

($ in millions)

($ in millions)

Total Company

Breakout

As Adjusted(a)

Total Company

Breakout

As Adjusted(a)

Amount

Margin

Amount

Margin

Amount

Margin

Amount

Margin

WM Legacy Business(d)

$

%

$

%

$

%

$

%

WM Healthcare Solutions

%

%

-

-

-

-

Total Company

$

%

$

%

$

%

$

%

·

Adjusted operating expenses as a percentage of revenue for the WM Legacy Business improved 50 basis points,

reflecting the Company’s disciplined cost focus driven by a people-first culture, technology adoption, and strategic exit from low-margin

residential business.(a)

SG&A Expenses

($ in millions)

($ in millions)

Total Company

Breakout

As Adjusted(a)

Total Company

Breakout

As Adjusted(a)

Amount

Margin

Amount

Margin

Amount

Margin

Amount

Margin

WM Legacy Business(d)

$

%

$

%

$

%

$

%

WM Healthcare Solutions

%

%

-

-

-

-

Total Company

$

%

$

%

$

%

$

%

·

SG&A results in the WM Legacy Business demonstrate the Company’s continued focus on cost discipline

and optimization.

·

Adjusted SG&A as a percentage of revenue for WM Healthcare Solutions improved 70 basis points sequentially,

reflecting the contribution of synergies from the Company’s efforts to integrate and streamline its sales and back-office processes.(a)

Cash Flow and Investments

·

The Company generated $1.21 billion of net cash provided by operating activities, with strong operating

EBITDA growth more than offset by working capital timing differences and higher cash interest related primarily to the funding of the

Stericycle acquisition. Free cash flow was $475 million, which was in line with the Company’s expectations.(a)

·

During the quarter, the Company continued to progress its investments in sustainability growth projects,

investing $128 million in these growth platforms and completing two recycling automation projects in key markets.(f)

Fishconcluded, “2025 is off to a strong start, and our team remains focused on driving further improvements in operational efficiency

and maximizing growth opportunities from acquisitions and sustainability investments. Our first quarter performance sets us up for another

year of robust financial growth.”

(a)

The information labeled as adjusted in this press release, as well as free cash flow, are non-GAAP measures.

Please see “Non-GAAP Financial Measures” below and the reconciliations in the accompanying schedules for more information.

(b)

Management defines operating EBITDA as GAAP income from operations before depreciation, depletion and

amortization; this measure may not be comparable to similarly titled measures reported by other companies.

(c)

For purposes of this press release, all references to “Net income” refer to the financial

statement line item “Net income attributable to Waste Management, Inc.”

(d)

Management defines WM Legacy Business as total Company GAAP results excluding the WM Healthcare Solutions

segment and net of intercompany eliminations.

(e)

Core price is a performance metric used by management to evaluate the effectiveness of our pricing strategies;

it is not derived from our financial statements and may not be comparable to measures presented by other companies. Core price is based

on certain historical assumptions, which may differ from actual results, to allow for comparability between reporting periods and to reveal

trends in results over time.

(f)

The Company’s blended average price received for single stream recycled commodities sold during

the quarter was about $88 per ton compared to about $84 per ton in the prior year period. The average price received for Renewable Fuel

Standard credits was $2.59 during the quarter compared to $3.01 in the prior year period. The average price received for natural gas was

$3.93 per MMBtu during the quarter compared to $2.27 per MMBtu in the prior year period. The average price received for renewable electricity

was about $73 per megawatt hour in the quarter compared to about $62 per megawatt hour in the prior year period.

The Company will host a conference call at 10

a.m. ET on April 29, 2025, to discuss the first quarter 2025 results. Information contained within this press release will be

referenced and should be considered in conjunction with the call.

Listeners

can access a live audio webcast of the conference call by visiting investors.wm.com and selecting “Events & Presentations”

from the website menu. A replay of the audio webcast will be available at the same location following the conclusion of the call.

Conference

call participants should register to obtain their dial in and passcode details. This streamlined process improves security and

eliminates wait times when joining the call.

about wm

WM

(WM.com) is North America's leading provider of comprehensive environmental solutions. Previously known as Waste Management and based

in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. The company, through its subsidiaries,

provides collection, recycling and disposal services to millions of residential, commercial, industrial, medical and municipal customers

throughout the U.S.

and Canada. With innovative infrastructure and capabilities in recycling,

organics and renewable energy, WM provides environmental solutions to and collaborates with its customers in helping them pursue their

sustainability goals. WM has the largest disposal network and collection fleet in North America, is the largest recycler of post-consumer

materials and is a leader in beneficial use of landfill gas, with a growing network of renewable natural gas plants and the most landfill

gas-to-electricity plants in North America. WM also has the largest heavy-duty natural gas truck fleet in the industry in North America.

WM Healthcare Solutions provides collection and disposal services of regulated medical waste, as well as secure information destruction

services, in the U.S., Canada and Western Europe. To learn more about WM and the company's sustainability progress and solutions, visit

Sustainability.WM.com.

Forward-Looking Statements

The Company, from time to time, provides estimates

or projections of financial and other data, comments on expectations relating to future periods and makes statements of opinion, view

or belief about current and future events, circumstances or performance. This press release contains a number of such forward-looking

statements, including all statements regarding future performance and results of our business; achievement of targets, financial guidance

or outlook; growth and optimization of our business; integration of the Stericycle business and related contributions, results and benefits,

including amount and timing of synergies; amount and timing of sustainability investments, upgrades and project completions and related

returns, contributions, and benefits; future capital allocation and acquisition spending; drivers of performance, including pricing programs

and volume; and assumptions regarding commodity prices, natural gas production, tax credits and renewable fuel programs. You should view

these statements with caution. They are based on the facts and circumstances known to the Company 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

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, 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; 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. Please also see the Company’s filings

with the SEC, including Part I, Item 1A of the Company’s most recently filed Annual Report on Form 10-K, as updated

by subsequent Quarterly Reports on Form 10-Q, for additional information regarding these and other risks and uncertainties applicable

to its business. The Company assumes 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.

Non-GAAP Financial Measures

To supplement its financial information, the Company

has presented, and/or may discuss on the conference call, adjusted measures including adjusted earnings per diluted share, adjusted net

income, adjusted income from operations and margin, adjusted operating EBITDA and margin, adjusted operating expense and margin, and adjusted

SG&A expenses and margin. All adjusted measures and free cash flow are non-GAAP financial measures, as defined in Regulation G of

the Securities Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP but believes that also

discussing non-GAAP measures provides investors with (i) financial measures the Company uses in the management of its business and

(ii) additional, meaningful comparisons of current results to prior periods’ results by excluding items that the Company does

not believe reflect its fundamental business performance and are not representative or indicative of its results of operations.

The Company discusses free cash flow and provides

a projection of free cash flow because the Company believes that it is indicative of its ability to pay its quarterly dividends, repurchase

common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay its debt obligations. The Company

believes free cash flow gives investors useful insight into how the Company views its 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 the Company has committed to, such

as declared dividend payments and debt service requirements. The Company defines 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); this definition may

not be comparable to similarly-titled measures reported by other companies.

The quantitative reconciliations of non-GAAP measures

to the most comparable GAAP measures are included in the accompanying schedules. Non-GAAP measures should not be considered a substitute

for financial measures presented in accordance with GAAP.

FOR MORE INFORMATION

WM

Website

www.wm.com

Analysts

Ed Egl

eegl@wm.com

Media

Toni Werner

media@wm.com

###

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Millions, Except per Share Amounts)

(Unaudited)

Three Months Ended

Operating revenues

$

$

Costs and expenses:

Operating

Selling, general and administrative

Depreciation, depletion and amortization

Restructuring

—

(Gain) loss from divestitures, asset impairments and unusual items, net

2

(2

)

Income from operations

Other income (expense):

Interest expense, net

)

)

Equity in net income (loss) of unconsolidated entities

5

)

Other, net

2

2

)

)

Income before income taxes

Income tax expense

Consolidated net income

Less: Net income (loss) attributable to noncontrolling interests

—

(1

)

Net income attributable to Waste Management, Inc.

$

$

Basic earnings per common share

$

$

Diluted earnings per common share

$

$

Weighted average basic common shares outstanding

Weighted average diluted common shares outstanding

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions)

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

$

Receivables, net

Other

Total current assets

Property and equipment, net

Goodwill

Other intangible assets, net

Other

Total assets

$

$

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable, accrued liabilities and deferred revenues

$

$

Current portion of long-term debt

Total current liabilities

Long-term debt, less current portion

Other

Total liabilities

Equity:

Waste Management, Inc. stockholders’ equity

Noncontrolling interests

1

2

Total equity

Total liabilities and equity

$

$

WASTE MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

Three Months Ended

Cash flows from operating activities:

Consolidated net income

$

$

Adjustments to reconcile consolidated net income to net cash provided by operating activities:

Depreciation, depletion and amortization

Other

Change in operating assets and liabilities, net of effects of acquisitions and divestitures

)

9

Net cash provided by operating activities

Cash flows from investing activities:

Acquisitions of businesses, net of cash acquired

(3

)

)

Capital expenditures

)

)

Proceeds from divestitures of businesses and other assets, net of cash divested

Other, net

)

)

Net cash used in investing activities

)

)

Cash flows from financing activities:

New borrowings

Debt repayments

)

)

Common stock repurchase program

—

)

Cash dividends

)

)

Exercise of common stock options

Tax payments associated with equity-based compensation transactions

)

)

Other, net

)

(6

)

Net cash used in financing activities

)

)

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

1

(2

)

Decrease in cash, cash equivalents and restricted cash and cash equivalents

)

)

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period

Cash, cash equivalents and restricted cash and cash equivalents at end of period

$

$

WASTE MANAGEMENT, INC.

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

Operating Revenues by Line of Business

Three Months Ended

Gross

Intercompany

Net

Gross

Intercompany

Net

Operating

Operating

Operating

Operating

Operating

Operating

Revenues

Revenues

Revenues

Revenues(a)

Revenues(a)

Revenues

Commercial

$

$

)

$

$

$

)

$

Industrial

)

)

Residential

)

)

Other collection

)

)

Total collection

)

)

Landfill(a)

)

)

Transfer

)

)

Total Collection and Disposal(a)

$

$

)

$

$

$

)

$

Recycling Processing and Sales

)

)

WM Renewable Energy

(1

)

(1

)

WM Healthcare Solutions

(8

)

—

—

—

Corporate and Other(a)

(8

)

2

(5

)

6

Total(a)

$

$

)

$

$

$

)

$

(a)

Beginning in the fourth quarter of 2024, the Company adjusted gross and intercompany operating revenues

to reflect the 15% royalty paid by WM Renewable Energy to Collection and Disposal and Corporate and Other businesses for the purchase

of landfill gas. There was no change to net operating revenues. Prior periods were recast to conform to current year presentation.

WASTE MANAGEMENT, INC.

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

Internal Revenue Growth

Period-to-Period Change for the

Three Months Ended

As a % of

As a % of

Related

Total

Amount

Business(a)

Amount

Company(b)

Collection and Disposal

$

%

Recycling Processing and Sales and WM Renewable Energy(c)

1

Energy surcharges and mandated fees

(2

)

)

Total average yield(d)

$

%

Volume(e)

4

Internal revenue growth

Acquisitions

Divestitures

(4

)

)

Foreign currency translation

)

)

Total

$

%

Period-to-Period Change for the

Three Months Ended

As a % of Related Business(a)

Yield

Volume(f)

Commercial

%

%

Industrial

)

Residential

)

Total collection

)

MSW

Transfer

)

Total collection and disposal

%

%

(a)

Calculated by dividing the increase or decrease for the current year

period by the prior year period’s related business revenue 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 revenue adjusted to exclude the impacts of divestitures for the current 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.

(f)

Workday adjusted volume impact.

WASTE MANAGEMENT, INC.

SUMMARY DATA SHEET

(In Millions)

(Unaudited)

Free Cash Flow(a)

Three Months Ended

Net cash provided by operating activities

$

$

Capital expenditures to support the business

)

)

Proceeds from divestitures of businesses and other assets, net of cash divested

Free cash flow before sustainability growth investments

Capital expenditures - sustainability growth investments

)

)

Free cash flow

$

$

Three Months Ended

Supplemental Data

Internalization of waste, based on disposal costs

%

%

Landfill depletable tons (in millions)

Acquisition Summary(b)

Gross annualized revenue acquired

$

$

1

Total consideration, net of cash acquired

7

3

Cash paid for acquisitions consummated during the period, net of cash acquired

7

2

Cash paid for acquisitions including contingent consideration and other items from prior periods, net of cash acquired

Landfill Amortization and Accretion Expenses:

Three Months Ended

Landfill depletion expense:

Cost basis of landfill assets

$

$

Asset retirement costs

Total landfill depletion expense(c)

Accretion expense

Landfill depletion and accretion expense

$

$

(a)

The summary of free cash flow has been prepared to highlight and facilitate understanding of the principal

cash flow elements. Free cash flow is not a measure of financial performance under generally accepted accounting principles and is not

intended to replace the consolidated statement of cash flows that was prepared in accordance with generally accepted accounting principles.

(b)

Represents amounts associated with business acquisitions consummated during the applicable period except

where noted.

(c)

The increase in landfill depletion cost for the three months ended March 31, 2025 as compared to the quarter ended March 31,

2024 was driven by increased volumes, particularly at higher cost sites.

WASTE MANAGEMENT, INC.

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions, Except Per Share Amounts)

(Unaudited)

Income from

Pre-tax

Tax

Net

Diluted Per

Operations

Income

Expense

Income(a)

Share Amount

As reported amounts

$

$

$

$

$

Adjustments:

Stericycle acquisition and integration-related costs(b)

7

Loss from asset impairments, unusual items and other, net(c)

3

As adjusted amounts

$

$

$

(d)

$

$

Depreciation, depletion and amortization

As adjusted operating EBITDA

$

Adjusted operating EBITDA margin

%

Income from

Pre-tax

Tax

Net

Diluted Per

Operations

Income

Expense

Income(a)

Share Amount

As reported amounts

$

$

$

$

$

Adjustment:

Gain from asset impairments, unusual items and other, net

(2

)

(2

)

—

(2

)

—

As adjusted amounts

$

$

$

(d)

$

$

Depreciation, depletion and amortization

As adjusted operating EBITDA

$

Adjusted operating EBITDA margin

%

(a)

For purposes of this press release table, all references to "Net income" refer to the financial

statement line item "Net income attributable to Waste Management, Inc."

(b)

Includes acquisition and integration related costs, severance and retention, and WM Healthcare Solutions

Enterprise Resource Planning (ERP) system costs.

(c)

Primarily due to a legacy loss contingency reserve adjustment and other restructuring costs.

(d)

The Company calculates its effective tax rate based on actual dollars. When the effective tax rate is

calculated by dividing the Tax Expense amount in the table above by the Pre-tax Income amount, differences occur due to rounding, as these

items have been rounded in millions. The first quarter 2025 and 2024 adjusted effective tax rates were 19.2% and 18.6%, respectively.

WASTE MANAGEMENT, INC.

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions)

(Unaudited)

Recycling

WM

Total WM

WM

Collection

Processing

Renewable

Corporate

Legacy

Healthcare

and Disposal(a)(b)

and Sales(a)

Energy(b)

and Other

Business

Solutions

Total WM

Adjusted Operating EBITDA and Adjusted Operating EBITDA Margin

Operating revenues, as reported

$

$

$

$

2

$

$

$

Income from Operations, as reported

$

$

$

$

)

$

$

)

$

Depreciation, depletion and amortization

Operating EBITDA, as reported

$

$

$

$

)

$

$

$

Adjustments:

Stericycle acquisition and integration-related costs(c)

—

—

—

Loss from asset impairments, unusual items and other, net(d)

2

4

—

7

—

2

4

—

Adjusted operating EBITDA

$

$

$

$

)

$

$

$

Operating EBITDA margin, as reported

%

%

%

N/A

%

%

%

Adjusted operating EBITDA margin

%

%

%

N/A

%

%

%

Recycling

WM

Collection

Processing

Renewable

Corporate

and Disposal(a)(b)

and Sales(a)

Energy(b)

and Other

Total WM

Adjusted Operating EBITDA and Adjusted Operating EBITDA Margin

Operating revenues, as reported

$

$

$

$

6

$

Income from Operations, as reported

$

$

$

$

)

$

Depreciation, depletion and amortization

8

Operating EBITDA, as reported

$

$

$

$

$

Adjustment:

Gain from asset impairments, unusual items and other, net

(2

)

—

—

—

(2

)

Adjusted operating EBITDA

$

$

$

$

)

$

Operating EBITDA margin, as reported

%

%

%

N/A

%

Adjusted operating EBITDA margin

%

%

%

N/A

%

(a)

Certain fees related to the processing of recycled material we collect are included within our Collection

and Disposal businesses. The total amount of such fees in income from operations for the three months ended March 31, 2025 and 2024

is $20 million and $22 million, respectively.

(b)

WM Renewable Energy pays a 15% intercompany royalty to our Collection and Disposal businesses for landfill

gas. The total amount of royalties in income from operations for the three months ended March 31, 2025 and 2024 is $14 million and

$10 million, respectively.

(c)

Includes acquisition and integration related costs, severance and retention, and WM Healthcare Solutions

Enterprise Resource Planning (ERP) system costs.

(d)

Primarily due to a legacy loss contingency reserve adjustment and other restructuring costs.

WASTE MANAGEMENT, INC.

RECONCILIATION OF CERTAIN NON-GAAP MEASURES

(In Millions, Except Per Share Amounts)

(Unaudited)

Three Months

Ended

Three Months

Ended

WM

WM

Legacy

Healthcare

Business

Solutions

Total WM

Total WM

Adjusted Operating Expenses and Adjusted Operating Expenses Margin

Operating revenues, as reported

$

$

$

$

Operating expenses, as reported

$

$

$

$

As a % of revenues

%

%

%

%

Adjustment:

Legacy loss contingency reserve

(7

)

—

(7

)

Operating expenses, as adjusted

$

$

$

As a % of revenues

%

%

%

Three Months

Ended

Three Months

Ended

WM

WM

Legacy

Healthcare

Business

Solutions

Total WM

Total WM

Adjusted SG&A Expenses and Adjusted SG&A Expenses Margin

Operating revenues, as reported

$

$

$

$

SG&A expenses, as reported

$

$

$

$

As a % of revenues

%

%

%

%

Adjustment:

Stericycle acquisition and integration-related costs

)

)

)

As adjusted SG&A expenses

$

$

$

%

%

%

2025 Projected Free Cash Flow Reconciliation(a)

Scenario

1

Scenario

2

G2Net cash provided by operating activities

$

$

G3Capital expenditures to support the business

)

)

G4Proceeds from divestitures of businesses and other assets, net of cash divested

G5Free cash flow before sustainability growth investments

$

$

G6Capital expenditures - sustainability growth investments

)

)

G7Free cash flow

$

$

(a) The reconciliation includes

two scenarios that illustrate our projected free cash flow range for 2025. The amounts used in the reconciliation are subject to many

variables, some of which are not under our control and, therefore, are not necessarily indicative of actual results.

WASTE MANAGEMENT, INC.

SUPPLEMENTAL INFORMATION PROVIDED FOR ILLUSTRATIVE

PURPOSES ONLY

(In Millions)

(Unaudited)

Diversity in the structure

of recycling contracts results in different accounting treatment for commodity rebates. In accordance with revenue recognition guidance,

our Company records gross recycling revenue and records rebates paid to customers as cost of goods sold. Other contract structures allow

for netting of rebates against revenue.

Additionally, there are differences

in whether companies adjust for accretion expense in their calculation of EBITDA. Our Company does not adjust for landfill accretion expenses

when calculating operating EBITDA, while other companies do adjust it for the calculation of their EBITDA measure.

The table below illustrates

the impact that differing contract structures and treatment of accretion expense has on the Company’s adjusted operating EBITDA

margin results. This information has been provided to enhance comparability and is not intended to replace or adjust GAAP reported results.

Three Months Ended March 31,

Amount

Change in

Adjusted

Operating

EBITDA Margin

Amount

Change in

Adjusted

Operating

EBITDA Margin

Recycling commodity rebates

$

%

$

%

Accretion expense

$

%

$

%