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800 Capitol Street - Suite 3000 - Houston, Texas 77002
www.wm.com
2023 ANNUAL REPORT
Proxy Statement
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date and Time:
Tuesday, May 14, 2024 at 10:30 a.m. Central Time
Place:
Waste Management, Inc.
800 Capitol Street, Suite 3000
Houston, Texas 77002
Record Date:
March 19, 2024
Agenda for the Annual Meeting (or any adjournment
or postponement thereof):
• To elect the nine nominees named in the attached proxy
statement to our Board of Directors;
• To vote on a proposal to ratify the appointment of Ernst &
Young LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2024;
• To vote on a non-binding, advisory proposal to approve
our executive compensation;
• To vote on a proposal to approve an amendment to the
Incorporation to provide for officer
Certificate of
exculpation; and
• To conduct other business that is properly raised at the
meeting.
IMPORTANT NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIALS:
This Notice of Annual Meeting and Proxy Statement
and the Company’s Annual Report on Form 10-K for
the year ended December 31, 2023 are available at
investors.wm.com.
in
accordance with
You may submit your proxy via the Internet
by following the instructions provided in
the Notice or, if you received printed copies
of the proxy materials, on your proxy card.
the
If you received printed copies of
materials
the
instructions in the Notice, you also have
the option to submit your proxy by
telephone by calling the toll-free number
listed on your proxy card. Telephone voting
is available 24 hours per day until
11:59 p.m., Eastern Time, on May 13, 2024.
If you received printed copies of the proxy
materials
the
instructions in the Notice and would like to
submit your proxy by mail, please mark,
sign and date your proxy card and return it
promptly in the postage-paid envelope
provided.
accordance with
in
If your shares of Common Stock are held in street name,
you will receive instructions from your broker, bank or
nominee that you must follow in order to have your
shares of Common Stock voted at the Annual Meeting.
Your vote is important. We urge all stockholders to vote and submit their proxies as soon as possible using one of the
methods described above.
Enroll in Electronic Delivery Today. Help us save paper, time and money! If your
shares are held in street name through a bank or broker, visit www.proxyvote.com or
follow the instructions on the Notice, proxy card or voting instructions. All
stockholders may enroll at enroll.icsdelivery.com/wmi.
Courtney A. Tippy
Corporate Secretary
April 2, 2024
PROXY STATEMENT
TABLE OF CONTENTS
GENERAL INFORMATION . . . . . . . . . . . . . . . . .
BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . .
Nominees for Director
. . . . . . . . . . . . . . . . .
Leadership Structure . . . . . . . . . . . . . . . . . .
Independence of Board Members . . . . . . . . . .
Meetings and Board Committees . . . . . . . . . .
Role in Risk Oversight . . . . . . . . . . . . . . . . . .
Oversight of Sustainability Risk and
Performance . . . . . . . . . . . . . . . . . . . . . .
Audit Committee . . . . . . . . . . . . . . . . . . . . .
Audit Committee Report
. . . . . . . . . . . . . . . .
Management Development and Compensation
Committee . . . . . . . . . . . . . . . . . . . . . . . .
Compensation Committee Report . . . . . . . . . .
Compensation Committee Interlocks and
Insider Participation . . . . . . . . . . . . . . . . .
Nominating and Governance Committee . . . . .
Related Party Transactions . . . . . . . . . . . . . .
Board of Directors Governing Documents . . . .
Non-Employee Director Compensation . . . . . .
ELECTION OF DIRECTORS (Item 1 on the Proxy
Card)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTOR AND OFFICER STOCK OWNERSHIP . .
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS . . . . . . . . . . . . . . . . .
DELINQUENT SECTION 16(A) REPORTS . . . . . . .
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . .
Compensation Discussion and Analysis . . . .
Introduction . . . . . . . . . . . . . . . . . . . . . . .
Executive Summary . . . . . . . . . . . . . . . . .
2023 Compensation Program Results and
Company Performance . . . . . . . . . . . . .
Consideration of Stockholder Advisory
Vote . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 Compensation Program Preview . . . . .
Our Compensation Philosophy for Named
Executive Officers . . . . . . . . . . . . . . . . .
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36
Overview of Elements of Our 2023 Executive
Compensation Program . . . . . . . . . . . . .
How Named Executive Officer Compensation
Decisions are Made . . . . . . . . . . . . . . . .
Named Executives’ 2023 Compensation
Program and Results . . . . . . . . . . . . . . .
Post-Employment and Change in Control
Compensation; Clawback Policies . . . . . .
Other Compensation Policies and
Practices . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation Tables . . . . . . . . . .
Summary Compensation Table . . . . . . . . . .
Grant of Plan-Based Awards in 2023 . . . . . .
Outstanding Equity Awards as of
December 31, 2023 . . . . . . . . . . . . . . . .
Option Exercises and Stock Vested . . . . . . .
Nonqualified Deferred Compensation in
2023 . . . . . . . . . . . . . . . . . . . . . . . . . .
Potential Payments Upon Termination or
Change in Control
. . . . . . . . . . . . . . . . .
Potential Consideration Upon Termination of
Employment . . . . . . . . . . . . . . . . . . . . .
Chief Executive Officer Pay Ratio . . . . . . . . .
Equity Compensation Plan Table . . . . . . . . .
Pay Versus Performance . . . . . . . . . . . . . . .
RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM (Item 2 on the
Proxy Card)
. . . . . . . . . . . . . . . . . . . . . . . .
ADVISORY VOTE ON EXECUTIVE
COMPENSATION (Item 3 on the Proxy Card) . .
APPROVAL OF AN AMENDMENT TO THE
CERTIFICATE OF INCORPORATION TO
PROVIDE FOR OFFICER EXCULPATION
(Item 4 on the Proxy Card) . . . . . . . . . . . . . .
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . .
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A-1
GENERAL INFORMATION
Waste Management, Inc. is a holding company, and all operations are conducted by its subsidiaries. Our subsidiaries are
operated and managed locally and generally focus on providing services in distinct geographic areas. Through our
subsidiaries, 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.
Our Board of Directors is soliciting your proxy for the 2024 Annual Meeting of Stockholders and at any postponement or
adjournment of the meeting. We are furnishing proxy materials to our stockholders primarily via the Internet. On April 2,
2024, we sent an electronic notice of how to access our proxy materials and our Annual Report to stockholders that have
previously signed up to receive their proxy materials via the Internet. On April 2, 2024, we began mailing a Notice of
Internet Availability of Proxy Materials to those stockholders that previously have not signed up for electronic delivery.
The Notice contains instructions on how stockholders can access our proxy materials at investors.wm.com or request
that a printed set of the proxy materials be sent to them.
Enroll in Electronic Delivery Today! We encourage stockholders to elect to receive all future proxy materials
electronically, which is free, fast, convenient and helps lower our printing and postage costs. If you are a beneficial
owner, visit www.proxyvote.com or follow the instructions on the Notice, proxy card or voting instructions. All
stockholders may also enroll at enroll.icsdelivery.com/wmi.
Shares Outstanding on the Record Date There were 401,296,564 shares of common stock of Waste Management, Inc.
(our “Common Stock”) outstanding and entitled to vote as of March 19, 2024, the record date for the Annual Meeting.
Attending the Meeting Only stockholders, their proxy holders and our invited guests may attend the Annual Meeting. If
you plan to attend, please bring identification. If you are a beneficial owner that holds shares in street name through a
bank or broker, you must also bring your bank or broker statement showing your beneficial ownership of Waste
Management, Inc. Common Stock in order to be admitted to the meeting. If you are planning to attend our Annual Meeting
and require directions to the meeting, please contact our Corporate Secretary at 713-512-6200. The only items that we
anticipate will be discussed at the Annual Meeting are the items set out in the Notice. We do not anticipate that there will
be any presentations.
Voting Instructions You can submit your proxy by Internet, phone or mail. You may receive more than one proxy card
depending on how you hold your shares. You should complete and return each proxy or other voting instruction request
provided to you. If you are a beneficial owner that holds shares in street name through a bank or broker, you will receive
instructions from your bank, broker or nominee that you must follow in order to have your shares of Common Stock
voted at the Annual Meeting, and your ability to submit your voting instructions by phone or over the Internet depends on
your bank’s or broker’s voting process. If you complete and submit your proxy voting instructions, the persons named as
proxies will follow your instructions. If you submit your proxy but do not give voting instructions, we will vote your shares
in accordance with the recommendation of the Board on each of the proposals set forth below.
Other Matters The Company does not intend to bring any other matters before the Annual Meeting, nor does the
Company have any present knowledge that any other matters will be presented by others for action at the meeting. If any
other matters are properly presented, your proxy card authorizes the people named as proxy holders to vote using their
judgment.
Voting and Asking Questions at the Meeting Stockholders can vote and ask questions at the Annual Meeting relevant
to the items to be voted on or the business of the Company. If you are a beneficial owner that holds shares in street name,
you must bring a legal proxy from the record holder in order to vote your shares at the Annual Meeting. Whether or not
you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting.
Please read the Notice and this Proxy Statement with care and follow the voting instructions to ensure that your shares
are represented at the Annual Meeting.
Changing Your Vote Stockholders of record may revoke their proxy at any time before we vote it at the meeting by
submitting a later-dated proxy via the Internet, by telephone, by mail, by delivering instructions to our Corporate Secretary
2024 Proxy Statement | 1
GENERAL INFORMATION
before the Annual Meeting revoking the proxy or by voting during the Annual Meeting. Attendance at the Annual Meeting,
by itself, will not revoke a proxy. If you hold shares through a bank or broker, you may revoke any prior voting instructions
by contacting that firm.
The Proposals
The following proposals are being presented for a vote of the stockholders at the Annual Meeting:
Proposal
Matter
Registered Public Accounting Firm for fiscal year 2024
1 Election of Director Nominees set forth in this Proxy Statement
2 Ratification of Ernst & Young LLP as the Company’s Independent
3 Approval of the Company’s Executive Compensation
4 Approval of an Amendment to the Certificate of Incorporation to
Provide for Officer Exculpation
Board Vote
Recommendation
FOR each director
nominee
FOR
FOR
FOR
Votes Required to Adopt the Proposals Each share of our Common Stock outstanding on the record date is entitled to
one vote on each of the nine director nominees and one vote on each other proposal.
Proposal 1: To be elected, a director must receive a majority of the votes cast with respect to that director’s election at the
meeting; this means that the number of shares voted “for” a director must exceed 50% of the votes cast with respect to
that director.
Proposal 2 and 3: In order to be adopted, each of proposals 2 and 3 require the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock present, in person or by proxy, and entitled to vote on the matter.
Proposal 4: In order to be adopted, proposal 4 requires the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote on the matter.
Effect of Abstentions Abstentions will have no effect on the election of directors. For each of the other proposals,
abstentions will have the same effect as a vote against these matters.
Effect of Broker Non-Votes If your shares are held by a broker, you may submit your voting instructions to the broker
as to how you want your shares to be voted. If you give the broker instructions, your shares must be voted as you direct.
If you do not instruct your broker how to vote your shares using the instructions your broker provides to you, your broker
may vote your shares at its discretion on proposal 2 regarding ratification of the Company’s independent registered
public accounting firm, but not for any other proposal. When this happens, it is called a “broker non-vote.” To be sure your
shares are voted in the manner you desire, you should instruct your broker how to vote your shares.
With respect to proposal 1 and proposal 3, broker non-votes will have no effect on the outcome. With respect to proposal 4,
a broker non-vote is the same as a vote against the proposal because, as stated above, approval of proposal 4 requires
the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote on the matter.
Quorum The holders of a majority of the shares of Common Stock outstanding on the record date must be present in
person or by proxy to constitute a quorum necessary to conduct the Annual Meeting. Abstentions and broker non-votes
are counted for purposes of determining a quorum.
Stockholder Proposals and Nominees for the 2025 Annual Meeting The Company will not consider any proposal or
nomination that is not timely or otherwise does not meet the Company’s By-law and Securities and Exchange Commission
(“SEC”) requirements for submitting a proposal or nomination. We also ask that you email a courtesy copy of any notice
2 |
2024 Proxy Statement
GENERAL INFORMATION
to GCLegal@wm.com. A copy of our By-laws may be obtained free of charge by writing to our Corporate Secretary
at 800 Capitol Street, Suite 3000, Houston, Texas 77002 and is available in the “ESG — Corporate Governance” section of
investors.wm.com.
Stockholder Proposals: Eligible stockholders who wish to submit a proposal for inclusion in the proxy statement pursuant
to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for our 2025 Annual Meeting
must submit their proposal to our Corporate Secretary at Waste Management, Inc., 800 Capitol Street, Suite 3000,
Houston, Texas 77002 for receipt on or before December 3, 2024. The proponent and the proposal must comply with the
requirements set forth in the federal securities laws, including Rule 14a-8 of the Exchange Act, in order to be included in
the Company’s proxy statement and proxy card for the 2025 Annual Meeting.
Advance Notice Proposals and Nominations: In addition, the Company’s By-laws establish advance notice procedures that
must be complied with for stockholders to bring proposals that are not included in the Company’s proxy materials and
nominations of persons for election as directors (other than pursuant to our proxy access By-law discussed below)
before an annual meeting of stockholders. In accordance with our By-laws, for a proposal or nominee not included in our
proxy materials to be properly brought before the 2025 Annual Meeting, a stockholder’s notice must be delivered to our
Corporate Secretary at Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 no earlier than
December 15, 2024 and no later than January 14, 2025 and must contain the information specified in the Company’s
By-laws. In addition to satisfying the foregoing advance notice requirements under our By-laws, to comply with the
universal proxy rules under the Exchange Act, a stockholder who intends to solicit proxies in support of director nominees
other than Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the
Exchange Act no later than January 14, 2025, and must also comply with all other requirements of Rule 14a-19 under the
Exchange Act. The Company will disregard any proxies solicited for a stockholder’s director nominee(s) if such
stockholder fails to comply with such requirements.
Proxy Access Nominations: The Company’s By-laws permit a stockholder or group of up to 20 stockholders owning 3% or
more of the Company’s outstanding Common Stock continuously for at least three years to nominate and include in the
Company’s proxy materials director nominees constituting up to the greater of 20% of the Board of Directors or two
individuals, provided the stockholder(s) and the nominee(s) satisfy the requirements specified in the Company’s By-laws.
Notice of proxy access director nominees must be delivered to our Corporate Secretary at Waste Management, Inc.,
800 Capitol Street, Suite 3000, Houston, Texas 77002 no earlier than November 3, 2024, and no later than December 3,
2024, together with other information required by the Company’s By-laws.
Expenses of Solicitation We pay the cost of preparing, assembling and mailing this proxy-soliciting material. In addition
to the use of the mail, proxies may be solicited personally, by Internet or telephone, or by the Company’s officers and
employees of the Company’s subsidiaries without additional compensation. We pay all costs of solicitation, including
certain expenses of brokers and nominees who mail proxy materials to their customers or principals. Also, Innisfree
M&A Incorporated has been hired to help in the solicitation of proxies for the 2024 Annual Meeting for a fee of $17,500
plus associated costs and expenses.
Annual Report A copy of our Annual Report on Form 10-K for the year ended December 31, 2023, which includes our
financial statements for fiscal year 2023, is included with this Proxy Statement. The Annual Report on Form 10-K is not
incorporated by reference into this Proxy Statement or deemed to be a part of the materials for the solicitation of proxies.
Householding Information We have adopted a procedure approved by the SEC called “householding.” Under this
procedure, stockholders of record who have the same address and last name and do not participate in electronic delivery
of proxy materials will receive only one copy of the Proxy Statement and Annual Report unless we are notified that one or
more of these individuals wishes to receive separate copies. This procedure helps reduce our printing costs and postage
fees.
If you wish to receive a separate copy of this Proxy Statement and Annual Report, please contact: Waste Management,
Inc., Corporate Secretary, 800 Capitol Street, Suite 3000, Houston, Texas 77002, telephone 713-512-6200.
If you do not wish to participate in householding in the future and prefer to receive separate copies of the proxy materials,
please contact: Broadridge Financial Solutions, Attention Householding Department, 51 Mercedes Way, Edgewood,
NY 11717, telephone 1-866-540-7095. If you are currently receiving multiple copies of proxy materials and wish to
receive only one copy for your household, please contact Broadridge.
2024 Proxy Statement | 3
BOARD OF DIRECTORS
Our Board of Directors currently has 10 members. Each member of our Board is elected annually. Mr. John C. Pope has
reached the retirement age set forth in the Company’s Corporate Governance Guidelines; therefore, he is not standing for
re-election and his term as a director of the Company will expire at the 2024 Annual Meeting. The Board of Directors
intends to reduce the size of the Board to nine members effective as of the expiration of Mr. Pope’s term at the 2024
Annual Meeting.
Nominees for Director
Name
Age
Tenure
Independent
Audit
Committee
Management
Development &
Compensation
Nominating &
Governance
61
67
61
66
66
64
55
65
58
2024 – Present
2023 – Present
2016 – Present
2015 – Present
2013 – Present
2015 – Present
2021 – Present
2019 – Present
2021 – Present
Thomas L. Bené
Bruce E. Chinn
James C. Fish, Jr.
Andrés R. Gluski
Victoria M. Holt
Kathleen M. Mazzarella
Sean E. Menke
William B. Plummer
Maryrose T. Sylvester
Chair
Member
Leadership Structure
Ms. Kathleen M. Mazzarella’s service as Non-Executive Chair of the Board began in May 2023, following the retirement of
Mr. Thomas H. Weidemeyer. The Board elected Ms. Mazzarella to serve as Non-Executive Chair of the Board due to her
extensive leadership experience, expertise in Board governance, and deep understanding of our Company and our
strategic vision. Ms. Mazzarella presides over all meetings of the Board, including executive sessions that only non-
employee directors attend. The Non-Executive Chair also serves on all three Board committees. Stockholders and
interested parties wishing to communicate with the Board or the non-employee directors should address their
communications to Non-Executive Chair of the Board, c/o Waste Management,
Inc., P.O. Box 53569, Houston,
Texas 77052-3569.
We separated the roles of Chair of the Board and Chief Executive Officer at our Company in 2004. We believe that having
a Non-Executive Chair of the Board is in the best interests of the Company and stockholders, due in part to the ever-
increasing demands made on boards of directors under federal securities laws, national stock exchange rules and other
federal and state regulations. The separation of the positions allows our Chair of the Board to focus on management of
Board matters and allows our Chief Executive Officer to focus his attention on managing our business. Additionally, we
believe the separation of those roles contributes to the independence of the Board in its oversight role and in assessing
the Chief Executive Officer and management generally. At this time, we do not contemplate a situation in which our
Company would not have a Non-Executive Chair of the Board.
4 |
2024 Proxy Statement
BOARD OF DIRECTORS
Independence of Board Members
The Board of Directors has determined that each of the following eight non-employee director nominees are independent
in accordance with the New York Stock Exchange listing standards: Thomas L. Bené, Bruce E. Chinn, Andrés R. Gluski,
Victoria M. Holt, Kathleen M. Mazzarella, Sean E. Menke, William B. Plummer and Maryrose T. Sylvester. James C. Fish, Jr.,
our President and Chief Executive Officer, is also a director of the Company. As an employee of the Company, Mr. Fish is
not an “independent” director.
To assist the Board in determining independence, the Board of Directors adopted categorical standards of director
independence, which meet or exceed the requirements of the New York Stock Exchange. These standards specify certain
relationships that are prohibited in order for the non-employee director to be deemed independent. The categorical
standards our Board uses in determining independence are included in our Corporate Governance Guidelines, which can
be found by accessing the “ESG — Corporate Governance” section of investors.wm.com. In addition to these categorical
standards, our Board makes a subjective determination of independence considering relevant facts and circumstances.
The Board reviewed all commercial and non-profit affiliations of each non-employee director and the dollar amount of all
transactions between the Company and each entity with which a non-employee director is affiliated to determine
independence. These transactions consisted of the Company, through its subsidiaries, providing waste management
services in the ordinary course of business and the Company’s subsidiaries purchasing goods and services in the ordinary
course of business and included commercial dealings with Graybar Electric Company, Inc., The AES Corporation, Chevron
Phillips Chemical Company LLC and Sabre Corporation. Ms. Mazzarella, Mr. Gluski, Mr. Chinn and Mr. Menke served as
chief executive officer of these entities, respectively, for all or a portion of calender year 2023. The Board concluded there
are no transactions between the Company and any entity with which a non-employee director is affiliated that are
prohibited by our categorical standards of independence or give rise to a material direct or indirect interest for that
non-employee director. Accordingly, the Board has determined that each non-employee director candidate meets the
categorical standards of independence and that there are no relationships that would affect independence.
Meetings and Board Committees
Last year the Board held seven regular meetings and two special meetings, and each committee of the Board met
independently as set forth below. Each incumbent director attended at least 75% of the meetings of the Board and the
committees on which he or she served. In addition, seven of the then-serving directors attended the 2023 Annual Meeting
of Stockholders. Mr. Gluski and Mr. Pope did not attend the 2023 Annual Meeting of Stockholders, after notifying the Chair
of the Board and the Company of unavoidable conflicts due to travel requirements. Our Corporate Governance Guidelines
provide that directors are expected to attend the annual meeting of stockholders, and if an unavoidable conflict arises,
the director must notify the Chair of the Board in advance.
The Board appoints committees to help carry out its duties. Committee members take on greater responsibility for key
issues. All members of the Board are invited to attend, and do generally attend, all committee meetings. The committees
review meeting results and recommendations with the full Board. The Board has three separate standing committees:
the Audit Committee; the Management Development and Compensation Committee (the “MD&C Committee”); and the
Nominating and Governance Committee. Additionally, the Board has the power to appoint additional committees, as it
deems necessary.
Role in Risk Oversight
Our executive officers have primary responsibility for risk management within our Company. Our Board of Directors
oversees risk management to ensure that the processes designed, implemented and maintained by our executives are
functioning as intended and adapted when necessary to respond to changes in our Company’s strategy as well as
emerging risks. The primary means by which our Board oversees our risk management processes is through its regular
communications with management and by regularly reviewing our enterprise risk management, or ERM, framework. We
believe that our leadership team’s engagement and communication methods are supportive of comprehensive risk
management practices and that our Board’s involvement is appropriate to ensure effective oversight.
Our ERM process is supported by regular inquiries of our Company’s Senior Leadership Team, and additional members
of management and operations leadership across the enterprise, as to the risks, including emerging risks, that may
affect the execution of our business performance or strategic priorities on a short-term, intermediate or long-term basis.
2024 Proxy Statement | 5
BOARD OF DIRECTORS
We also consult with a range of outside advisors and experts throughout the year, depending on the subject matter of the
risk being evaluated. We believe that use of outside advisors and experts complement our ERM process by ensuring our
efforts are comprehensive and balanced. Our ERM process is periodically reviewed and discussed with our Chief
Compliance and Ethics Officer and our Vice President of Internal Audit and Controls to enhance alignment with our
disclosure controls and procedures. Additionally, our Compliance and Ethics department conducts periodic risk
assessments for a range of ongoing risks that are monitored. If those risks rise to certain materiality or frequency
thresholds, they receive further analysis and review through the ERM base evaluation and priority risk evaluation
processes.
For the most significant or immediate risks, the ERM process is designed to generate actionable insights that are actively
discussed and reviewed with the Senior Leadership Team and our Board. Risks and opportunities are assessed and then
prioritized using internal evaluations of financial impact, likelihood and potential timing of occurrence, outlook for
changes in the nature or extent of risk exposure and a self-assessment of the Company’s confidence in existing risk
mitigation efforts. The Senior Leadership Team reviews the outcomes of the risk assessments, focusing largely on the
estimated scope of impacts, as well as the adequacy of current support by internal staff, the sufficiency of financial
support for mitigation measures needed to manage and reduce risk, and the sufficiency of any third-party expertise that
may be necessary to supplement internal resources. All significant risks have a standardized scorecard that includes
forward-looking action plans with measurable indicators and progress updates on action plans from previous
assessments.
At quarterly Audit Committee meetings, management provides an ERM report and regularly provides an in-depth update
on specific risk topics. Additionally, risks related to our strategy, operations and financial results are also addressed in
our Board meetings. Our President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief
Legal Officer, Chief Human Resources and Diversity & Inclusion Officer and Chief Sustainability Officer report to our
Board and Audit Committee at these meetings, and other members of management periodically attend and present
information, including those responsible for our Internal Audit and Controls, Environmental Audit, Ethics and Compliance,
Human Resources, Government Affairs, Digital, Insurance, Safety, Finance and Accounting functions. These presentations
allow our directors to have direct communication with management and assess management’s evaluation and
administration of the Company’s risk profile through our ERM process. Examples of key areas of assessment addressed
by our ERM process and overseen by our Audit Committee and Board include the following: emissions and climate
impact; industry disruption; revenue management; legal and regulatory; capital allocation; supply chain management;
service to customers; cost discipline; physical infrastructure; brand management; environmental, health & safety; human
capital; information security and privacy; technology and currency, interest rate and commodity risk management.
Additionally, in accordance with New York Stock Exchange requirements, the Audit Committee is responsible for
discussing our major financial risk exposures, steps management has taken to monitor and control such exposures and
the Company’s process for risk assessment and management, and quarterly reports are made to the Audit Committee
on financial and compliance risks.
Management is encouraged to communicate with our directors with respect to any issues or developments that may
require consideration between regularly scheduled Board meetings, and members of management are regularly in
direct contact with our Non-Executive Chair of the Board and our committee chairs. Our Non-Executive Chair of the Board
also facilitates communications with our Board of Directors as a whole and is integral in initiating the discussions among
the independent directors necessary to ensure management is adequately evaluating and overseeing risks to our
Company.
Oversight of Sustainability Risk and Performance
As North America’s leading provider of comprehensive environmental services, sustainability and environmental
stewardship are embedded in all that we do. We have enabled a people-first, technology-led focus to drive our mission to
maximize resource value, while minimizing environmental impact, and deliver on our brand promise ALWAYS WORKING
FOR A SUSTAINABLE TOMORROW®. As a result, it would not be effective, or possible, to assign responsibility for oversight
of sustainability, which includes environmental and human capital management risk and performance, to any one
committee of our Board of Directors. Rather, various aspects of sustainability risk and performance, which are already
organically a part of our Board and committees’ oversight of our performance, risk management and strategic vision, are
addressed in different committees and with our full Board of Directors, as appropriate depending on the subject matter.
6 |
2024 Proxy Statement
BOARD OF DIRECTORS
Our Board has a dedicated annual strategic planning session with our Senior Leadership Team and receives focused
strategic updates quarterly. Given the nature of our business, those sessions will address topics such as our people,
sustainable operations, waste diversion, recycling business improvements, sustainability growth investments, potentially
disruptive technologies and environmental impacts, risks and opportunities. In 2023, the Board received several
dedicated updates regarding sustainability topics, including our sustainability growth strategy, and the Board receives
regular updates from our Chief Human Resources and Diversity & Inclusion Officer with respect to our people-first
strategy, including workforce evolution, labor market developments and employee retention. Reflective of the importance
of diversity and inclusion and safety to our organization, the full Board of Directors receives annual in-depth reports on
leadership, workforce and supplier diversity, as well as quarterly safety performance updates and a detailed annual
health and safety report. Additionally, the Company’s Chief Sustainability Officer presents a quarterly Sustainability
Scorecard to the entire Board to highlight critical focus areas. Through these reports, our Board directly oversees our
sustainability-related performance, including progress toward our sustainability goals and our decarbonization plan for
meeting a science-based climate target, detailed in our 2023 Sustainability Report.
The Company previously announced that, in response to the civil rights audit stockholder proposal that was approved at
the 2022 Annual Meeting of Stockholders, it engaged a team led by former U.S. Attorney General Loretta Lynch, now a
partner at Paul, Weiss, Rifkind, Wharton & Garrison, to perform an independent assessment of the impact of the
Company’s policies and practices on the civil rights of Company stakeholders, and to provide recommendations for
further improvement. The assessment included a broad review and analysis in the areas of environmental justice and
diversity and inclusion of employees and suppliers, with input from internal and external stakeholders. Our Board
received several updates from our senior executives, including our Chief Legal Officer, Chief Human Resources and
Diversity & Inclusion Officer and Chief Sustainability Officer, on the structure and progress of the assessment, and the
findings and
Board engaged directly with former U.S. Attorney General Loretta Lynch on the assessment
recommendations. The assessment was recently completed, and the report is available at sustainability.wm.com.
Our Audit Committee also plays a significant role in oversight of sustainability risk and performance. As discussed above,
our Audit Committee receives regular ERM updates with in-depth discussion on specific risk topics. At least annually, one
of the in-depth discussions will look at an aspect of sustainability risk. Additionally, the Audit Committee receives
quarterly reports on our compliance programs, including ethics and environmental and safety audit, with an annual
in-depth review of our compliance programs with risk assessments. During 2023, our Audit Committee received updates
on proposed regulatory disclosure requirements related to climate and cybersecurity and the Company’s preparations.
Our Audit Committee also has responsibility for oversight of information and cybersecurity and assessment of cyber
threats and defenses. Our Audit Committee receives reports from our most senior executives in the Digital organization,
and the Company’s executive officers, at least twice a year. Topics historically covered in such reports include third-party
evaluation of our technology infrastructure and information security against the industry-standard NIST (National
Institute of Standards and Technology) cybersecurity framework; risk mitigation through the Company’s enterprise-wide
cybersecurity training, including our Board of Directors, conducted at least annually, regular simulated phishing tests
and third-party penetration testing; review of the Company’s cyber incident insurance coverage and external cyber
incident resources; review of the Company’s incident response plan and consideration of applicable laws and regulations,
including those related to privacy.
Our MD&C Committee has primary oversight of human capital management, including review of employee health, welfare
and benefit programs and compensation plan risk assessment. The MD&C Committee is also responsible for executive
compensation incentive plan design and the incorporation and measurement of the annual cash incentive program
sustainability scorecard performance modifier discussed in our Compensation Discussion and Analysis below. The
Committee also engages in quarterly sessions with our President and Chief Executive Officer and our Chief Human
Resources and Diversity & Inclusion Officer regarding talent development and succession planning at several levels of
our organization. A critical component of these talent development and succession planning efforts is the recognition
that diversity and inclusion are fundamental Company values. Recognizing the importance of diversity, our Human
Resources programs overseen by our MD&C Committee embrace and cultivate respect, trust, open communication and
diversity of thought and people.
2024 Proxy Statement | 7
BOARD OF DIRECTORS
Strong and effective corporate governance is established and overseen by our Nominating & Governance Committee.
The Committee leads the process for annual Board, committee and director evaluations and is responsible for review
and recommendation of Board and committee composition and leadership. In connection with performing this vital
function, the Nominating & Governance Committee reviews the skills, expertise and qualifications of our existing directors,
as well as potential external candidates, and considers matters such as inclusion and diversity, tenure and Board
refreshment. These efforts deliver on the Nominating & Governance Committee’s purpose to identify and nominate the
best possible candidates to guide and support the Company’s strategy and its commitment to serve and care for our
customers, the environment, the communities in which we work and our stockholders. Please see the discussion of the
Nominating and Governance Committee below for more information on this robust process.
For additional information about the topics discussed above, including sustainability goals, metrics and progress, we
encourage stockholders to review our 2023 Sustainability Report at sustainability.wm.com. 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 and renewable energy businesses. Our 2023 Sustainability Report
and the civil rights assessment report referenced above do not constitute a part of, and are not incorporated by reference
into, this Proxy Statement or any report we file with (or furnish to) the SEC.
8 |
2024 Proxy Statement
THE AUDIT COMMITTEE
BOARD OF DIRECTORS
Number of Meetings Held in 2023: 9
Victoria M. Holt
Kathleen M. Mazzarella
Sean E. Menke
Members:
William B. Plummer, Chair
Bruce E. Chinn
Andrés R. Gluski
Mr. Plummer has been the Chair of our Audit Committee since May 2020. Each member of our Audit Committee satisfies
the additional New York Stock Exchange independence standards for audit committees set forth in Section 10A of the
Exchange Act. Our Board of Directors has determined that Audit Committee Chair Mr. Plummer, Mr. Chinn, Mr. Gluski,
Ms. Holt, Ms. Mazzarella and Mr. Menke are audit committee financial experts as defined by the SEC based on a thorough
review of their education and financial and public company experience. Additional information regarding our directors’
expertise and qualifications is available under “Election of Directors” below.
Key Functions
The Audit Committee’s duties are set forth in a written charter that was approved by the Board of Directors. A copy of the
charter can be found by accessing the “ESG — Corporate Governance” section of investors.wm.com. The Audit
Committee generally is responsible for overseeing all matters relating to our financial statements and reporting,
independent auditors and internal audit function. As part of its function, the Audit Committee reports the results of all of
its reviews to the full Board. In fulfilling its duties, the Audit Committee, has the following responsibilities:
Administrative Responsibilities
• Report to the Board, at least annually, all public company audit committee memberships by members of the Audit
Committee;
• Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full
Board; and
• Provide an orientation program for new Audit Committee members.
Financial Statements
• Review financial statements and Forms 10-K and 10-Q with management and the independent auditor;
• Review all earnings press releases and discuss with management the type of earnings guidance that we provide to
analysts and rating agencies;
• Discuss with the independent auditor any material changes to our accounting principles and matters required to be
communicated by Public Company Accounting Oversight Board (United States) Auditing Standard No. 1301
Communications with Audit Committees;
• Review our financial reporting, accounting and auditing practices with management, the independent auditor and our
internal auditors;
• Review management’s and the independent auditor’s assessment of the adequacy and effectiveness of internal
controls over financial reporting; and
• Review executive officer certifications related to our reports and filings.
Independent Auditor
• Engage an independent auditor, determine the auditor’s compensation and replace the auditor if necessary;
•• Review the independence of the independent auditor and establish our policies for hiring current or former employees
of the independent auditor;
•• Evaluate the lead partner of our independent audit team and review a report, at least annually, describing the
independent auditor’s internal control procedures; and
• Pre-approve all services, including non-audit engagements, provided by the independent auditor.
Internal Audit
• Review the plans, staffing, reports and activities of the internal auditors; and
• Review and establish procedures for receiving, retaining and handling complaints, including anonymous complaints
by our employees, regarding accounting, internal controls and auditing matters.
2024 Proxy Statement | 9
BOARD OF DIRECTORS
AUDIT COMMITTEE REPORT
The role of the Audit Committee is, among other things, to oversee the Company’s financial reporting process on behalf of the
Board of Directors, to recommend to the Board whether the Company’s financial statements should be included in the
Company’s Annual Report on Form 10-K and to select the independent auditor for ratification by stockholders. Company
management is responsible for the Company’s financial statements as well as for its financial reporting process, accounting
principles and internal controls. The Company’s independent auditors are responsible for performing an audit of the Company’s
financial statements and expressing an opinion as to the conformity of such financial statements with accounting principles
generally accepted in the United States.
The Audit Committee has reviewed and discussed the Company’s audited financial statements as of and for the year ended
December 31, 2023 with management and the independent registered public accounting firm, and has taken the following
steps in making its recommendation that the Company’s financial statements be included in its Annual Report on Form 10-K.
• First, the Audit Committee discussed with Ernst & Young LLP, the Company’s independent registered public accounting firm
for fiscal year 2023, those matters required to be discussed by the applicable requirements of the Public Company
Accounting Oversight Board (United States) and the SEC, including information regarding the scope and results of the audit.
These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting
and disclosure process.
• Second, the Audit Committee discussed with Ernst & Young LLP its independence and received from Ernst & Young LLP a
letter concerning independence as required under applicable independence standards for auditors of public companies.
This discussion and disclosure helped the Audit Committee in evaluating such independence. The Audit Committee also
considered whether the provision of other non-audit services to the Company is compatible with the auditor’s independence.
• Third, the Audit Committee met periodically with members of management, the internal auditors and Ernst & Young LLP to
review and discuss internal controls over financial reporting. Further, the Audit Committee reviewed and discussed
management’s report on internal control over financial reporting as of December 31, 2023, as well as Ernst & Young LLP’s
report regarding the effectiveness of internal control over financial reporting.
• Finally, the Audit Committee reviewed and discussed, with the Company’s management and Ernst & Young LLP, the
Company’s audited consolidated balance sheet as of December 31, 2023, and consolidated statements of operations,
comprehensive income, cash flows and changes in equity for the fiscal year ended December 31, 2023, including the quality,
not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of the
disclosure.
• The Committee has also discussed with the Company’s internal auditors and independent registered public accounting firm
the overall scope and plans of their respective audits. The Committee meets periodically with both the internal auditors and
independent registered public accounting firm, with and without management present, to discuss the results of their
examinations and their evaluations of the Company’s internal controls over financial reporting.
• The members of the Audit Committee are not engaged in the accounting or auditing profession and, consequently, are not
experts in matters involving auditing or accounting. In the performance of their oversight function, the members of the Audit
Committee necessarily relied upon the information, opinions, reports and statements presented to them by Company
management and by the independent registered public accounting firm.
• Based on the reviews and discussions explained above (and without other independent verification), the Audit Committee
recommended to the Board (and the Board approved) that the Company’s financial statements be included in its Annual
Report on Form 10-K for its fiscal year ended December 31, 2023. The Committee has also approved the selection of Ernst &
Young LLP as the Company’s independent registered public accounting firm for fiscal year 2024.
The Audit Committee of the Board of Directors
William B. Plummer, Chair
Bruce E. Chinn
Andrés R. Gluski
Victoria M. Holt
Kathleen M. Mazzarella
Sean E. Menke
10 |
2024 Proxy Statement
THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
BOARD OF DIRECTORS
Members:
Andrés R. Gluski, Chair
Thomas L. Bené
Kathleen M. Mazzarella
Mr. Gluski has served as the Chair of our MD&C Committee since May 2021. Mr. Bené was appointed to the MD&C
Committee effective March 1, 2024, after the approval of the Compensation Committee Report below. Each member of
our MD&C Committee is independent in accordance with the rules and regulations of the New York Stock Exchange.
Key Functions
William B. Plummer
John C. Pope
Maryrose T. Sylvester
Number of Meetings Held in 2023: 5
Our MD&C Committee is responsible for overseeing our executive officer compensation, as well as developing the
Company’s compensation philosophy generally. The MD&C Committee’s written charter, which was approved by the
Board of Directors, can be found by accessing the “ESG — Corporate Governance” section of investors.wm.com. In
fulfilling its duties, the MD&C Committee has the following responsibilities:
• Review and establish policies governing the compensation and benefits of our executive officers;
• Approve the compensation of our executive officers and set the incentive plan goals for those individuals;
• Conduct an annual evaluation of our Chief Executive Officer by all independent directors and set his compensation;
• Oversee the administration of our equity-based incentive plans;
• Review the results of the stockholder advisory vote on executive compensation and consider any implications of such
voting results on the Company’s compensation programs;
• Recommend to the full Board new Company compensation and benefit plans or changes to our existing plans;
• Evaluate and recommend to the Board the compensation paid to our non-employee directors;
• Review the independence of the MD&C Committee’s compensation consultant annually; and
• Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full
Board.
In overseeing compensation matters, the MD&C Committee may delegate authority for day-to-day administration and
interpretation of the Company’s plans, including selection of participants, determination of award levels within plan
parameters, and approval of award documents, to Company employees. However, the MD&C Committee may not
delegate any authority to Company employees under those plans for matters affecting the compensation and benefits of
the executive officers.
COMPENSATION COMMITTEE REPORT
The MD&C Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy
Statement with management. Based on their review and discussions, the MD&C Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement.
The Management Development and Compensation Committee of the Board of Directors
Andrés R. Gluski, Chair
Kathleen M. Mazzarella
William B. Plummer
John C. Pope
Maryrose T. Sylvester
2024 Proxy Statement | 11
BOARD OF DIRECTORS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2023, Ms. Mazzarella, Ms. Sylvester and Messrs. Gluski, Plummer and Pope served on the MD&C Committee, as
well as retired director Mr. Thomas H. Weidemeyer. No member of the MD&C Committee was an officer or employee of
the Company during 2023; no member of the MD&C Committee is a former officer of the Company; and during 2023,
none of our executive officers served as a member of a board of directors or compensation committee of any entity that
has one or more executive officers who serve on our Board of Directors or MD&C Committee.
THE NOMINATING AND GOVERNANCE COMMITTEE
Members:
Number of Meetings Held in 2023: 6
John C. Pope
Maryrose T. Sylvester
Victoria M. Holt, Chair
Kathleen M. Mazzarella
Sean E. Menke
Ms. Holt was named Chair of our Nominating and Governance Committee in May 2023. Each member of our Nominating
and Governance Committee is independent in accordance with the rules and regulations of the New York Stock
Exchange.
Key Functions
The Nominating and Governance Committee has a written charter that has been approved by the Board of Directors and
can be found by accessing the “ESG — Corporate Governance” section of investors.wm.com. It is the duty of the
Nominating and Governance Committee to oversee matters regarding corporate governance. In fulfilling its duties, the
Nominating and Governance Committee has the following responsibilities:
• Review and recommend the composition of our Board, and the nature and duties of each of our committees, in
accordance with our Corporate Governance Guidelines;
• Evaluate the charters of each of the committees and recommend directors to serve as committee chairs;
•• Review individual director’s performance in consultation with the Chair of the Board and review the overall
effectiveness of the Board;
• Recommend retirement policies for the Board, the terms for directors and the proper ratio of employee directors to
non-employee directors;
•• Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full
Board;
•• Review stockholder proposals received for inclusion in the Company’s proxy statement and recommend action to be
taken with regard to the proposals to the Board; and
•• Identify and recommend to the Board candidates to fill director vacancies.
The Nominating and Governance Committee is continually engaged in reviewing the skills, expertise and qualifications
of our existing directors, as well as potential external candidates, to identify and nominate the best possible candidates
to guide and support the Company’s strategy and its commitment to serve and care for our customers, the environment,
the communities in which we work and our stockholders. This is a process that the Nominating and Governance
Committee believes should continue to involve significant subjective judgments.
With the assistance of an external consultant, the Nominating and Governance Committee identified Mr. Thomas L. Bené
as a potential director candidate. Following a robust consideration process summarized below and recommendation by
the Nominating and Governance Committee, the Board increased its size to 10 members and elected Mr. Bené to serve
as a member of our Board, effective March 1, 2024. The Nominating and Governance Committee also recommended,
and the Board approved, appointment of Mr. Bené to the MD&C Committee. Mr. Bené is a nominee for re-election at the
Annual Meeting.
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2024 Proxy Statement
BOARD OF DIRECTORS
The Nominating and Governance Committee considers current and future needs of the Board as a whole and reviews a
matrix of experience, skills and expertise to inform nominee criteria. The Committee recommends individuals as
nominees based on an evaluation of all factors deemed relevant, including personal and professional integrity and
sound judgment, business and professional skills and experience, independence, possible conflicts of interest, diversity
and the potential for effectiveness, in conjunction with the other directors, to serve the long-term interests of the
stockholders. The Committee seeks diversity of background, thoughts and opinions on the Board obtained through,
among other factors, diversity in business experience, professional expertise, gender and racial / ethnic background.
The Nominating and Governance Committee has considered the gender and racial / ethnic composition of our Board,
including the presence of three women, Mr. Plummer’s and Mr. Chinn’s self-identification as African American / Black
and Mr. Gluski’s self-identification as Hispanic, and believes these factors, among numerous others, contribute to a
valuable diversity of background, thoughts and opinions on our Board.
When nominating or re-nominating individuals to serve as directors of the Company, the Nominating and Governance
Committee also considers prior contributions to the Board, evaluation feedback, tenure and age of the Board as a whole
and tenure and age of the individual. The Nominating and Governance Committee takes into account the nature and
extent of the directors’ other commitments when determining whether to re-nominate that individual for election to the
Board. In addition to complying with the limitations on public company board memberships set forth in the Corporate
Governance Guidelines, the Committee expects each director to ensure that his or her other commitments do not
interfere with his or her duties as a director of the Company. The Committee’s primary formal mechanism to support
Board refreshment is the retirement age policy set forth in the Corporate Governance Guidelines, which includes the
guideline that directors will not stand for reelection to the Board after reaching age 75 unless the Nominating and
Governance Committee, having considered the foregoing factors, recommends otherwise. The Committee believes that
existing practices have been effective at bringing in new expertise and perspectives, while also maintaining the valuable
industry knowledge, experience and stability that our longer-tenured directors provide.
The Nominating and Governance Committee will consider all potential nominees on their merits and welcomes
suggestions from directors, members of management, and stockholders. Before being recommended for nomination
by the Committee, director candidates are interviewed by the Chief Executive Officer, the Chair of the Nominating and
Governance Committee, and the Non-Executive Chair of the Board, as well as additional members of the Board and an
external consultant. To suggest a nominee for consideration by the Nominating and Governance Committee, you should
submit your candidate’s name, together with biographical information and his or her written consent to nomination to
the Chair of the Nominating and Governance Committee, Waste Management, Inc., 800 Capitol Street, Suite 3000,
Houston, Texas 77002, between November 3, 2024 and December 3, 2024.
Related Party Transactions
The Board of Directors has adopted a written Related Party Transactions Policy for the review and approval of related
party transactions. Our policy generally defines related party transactions as current or proposed transactions since the
beginning of the last fiscal year in excess of $120,000 in which (a) the Company is a participant and (b) any director;
executive officer; immediate family member of any director or executive officer; or party known to be the owner of more
than 5% of the Company’s Common Stock has a direct or indirect material interest. In addition, the policy sets forth
certain transactions that will not be considered related party transactions, including (a) executive officer compensation
and benefit arrangements; (b) director compensation arrangements; (c) business travel and expenses, advances and
reimbursements in the ordinary course of business; (d) indemnification payments and advancement of expenses, and
payments under directors’ and officers’ indemnification insurance policies; (e) any transaction between the Company
and any entity in which a related party has a relationship solely as a director; a less than 5% equity holder; a beneficial
owner of the Company’s Common Stock that reports such ownership on a Schedule 13G due to lack of control or intent to
influence control; or an employee (other than an executive officer) and (f) purchases of Company debt securities, provided
that the related party has a passive ownership of no more than 2% of the principal amount of any outstanding series. The
Nominating and Governance Committee is responsible for overseeing the policy.
All executive officers and directors are required to notify the Chief Legal Officer as soon as practicable of any potential
related party transaction that involves the Company. The Chief Legal Officer will determine whether such transaction or
relationship constitutes a related party transaction that must be referred to the Nominating and Governance Committee.
In the event that the Chief Legal Officer is a participant in a potential related party transaction, the determination whether
the transaction must be referred to the Nominating and Governance Committee shall be made by the Chief Executive
2024 Proxy Statement | 13
BOARD OF DIRECTORS
Officer, with consultation from the Corporate Secretary and the Chief Compliance and Ethics Officer. Any member of the
Committee who has an interest in a transaction presented for consideration will abstain from voting on the related party
transaction.
The Nominating and Governance Committee will review a detailed description of the transaction, including the terms of
the transaction; the business purpose of the transaction; the benefits to the Company and to the relevant related party;
and whether the transaction would require a waiver of the Company’s Code of Conduct.
In determining whether to approve a related party transaction, the Nominating and Governance Committee will consider,
among other things, the following factors:
• whether the terms of the related party transaction are fair to the Company and such terms would be reasonable
in an arms-length transaction;
• whether there are business reasons for the Company to enter into the related party transaction;
• whether the related party transaction would impair the independence of any non-employee director;
• whether the related party transaction would present an improper conflict of interest for any director or executive
officer of the Company; and
• whether the related party transaction is material to the Company or the individual.
The Nominating and Governance Committee’s consideration of related party transactions and its determination of
whether to approve such a transaction are reflected in the minutes of the Nominating and Governance Committee’s
meetings. Based on its review processes for potential related party transactions in 2023, the Company identified certain
continuing transactions involving employment of immediate family members of executive officers that the Nominating
and Governance Committee had previously considered and approved. The Nominating and Governance Committee re-
reviewed the employment relationships set forth below and again concluded that such transactions are not inconsistent
with the interests of the Company and its stockholders. Other than as reported below, we are not aware of any other
transactions in 2023 that are required to be disclosed.
Two brothers of Kelly Rooney, our Senior Vice President and Chief Human Resources and Diversity & Inclusion
Officer, continue to be employed by subsidiaries of Waste Management, Inc. as Senior District Managers. Each
received total cash compensation in 2023 in excess of $120,000 but less than $260,000, and an equity incentive
grant with a target value of less than $15,000. The compensation of Ms. Rooney’s brothers is determined in
accordance with the compensation practices generally applicable to employees of Company subsidiaries with
comparable qualifications and responsibilities and holding similar positions, and without the involvement, input or
approval of Ms. Rooney. In addition, Ms. Rooney is not directly or indirectly responsible for managing or overseeing
the work of her brothers.
The brother-in-law of John Morris, our Executive Vice President and Chief Operating Officer, continues to be
employed by a subsidiary of Waste Management, Inc. as a Senior Manager of Talent Management & Learning
Optimization. In 2023, he received total cash compensation in excess of $120,000, but less than $200,000. The
compensation of Mr. Morris’s brother-in-law is determined in accordance with the compensation practices generally
applicable to employees of Company subsidiaries with comparable qualifications and responsibilities and holding
similar positions, and without the involvement, input or approval of Mr. Morris. In addition, Mr. Morris is not directly
or indirectly responsible for managing or overseeing the work of his brother-in-law.
Board of Directors Governing Documents
Stockholders may obtain copies of our Corporate Governance Guidelines, the charters of the Audit Committee, the MD&C
Committee, and the Nominating and Governance Committee, and our Code of Conduct free of charge by contacting the
Corporate Secretary, Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 or by accessing the
“ESG — Corporate Governance” section of investors.wm.com.
14 |
2024 Proxy Statement
BOARD OF DIRECTORS
Non-Employee Director Compensation
Our non-employee director compensation program consists of equity awards and cash consideration. Director
compensation is reviewed annually by the MD&C Committee, with the assistance of an independent third-party consultant,
and set by action of the Board of Directors. The Board’s goal in designing directors’ compensation is to provide a
competitive package that will enable the Company to attract and retain highly skilled individuals with relevant experience.
The compensation is also designed to reward the time and talent required to serve on the board of a company of our size
and complexity. The Board seeks to provide sufficient flexibility in the form of compensation delivered to meet the needs
of different individuals while ensuring that a substantial portion of directors’ compensation is linked to the long-term
success of the Company. Following its annual review, the MD&C Committee did not recommend any changes to director
compensation for 2023. As a result, the 2023 non-employee director compensation levels are consistent with the levels
established in 2022.
Equity Compensation
Non-employee directors receive an annual grant of shares of Common Stock under the Company’s current stock incentive
plan. The shares are fully vested at the time of grant; however, non-employee directors are required to hold all net
shares throughout their tenure on the Board and are subject to ownership guidelines, as discussed below. The grant of
shares is generally made in two equal installments, and the number of shares issued is based on the market value of our
Common Stock on the dates of grant, which are typically January 15 and July 15 of each year. Each non-employee
director serving at the time received a grant of Common Stock valued at approximately $90,000 in January 2023 and
July 2023. Additionally, any director serving as Non-Executive Chair of the Board receives an additional grant of Common
Stock valued at approximately $50,000 in January and July of each year.
Cash Compensation
Non-employee directors received an annual cash retainer of $120,000 for Board service in 2023. Committee chairs
received the additional annual retainer payments set forth below. Directors do not receive meeting fees in addition to the
retainers. The annual cash retainer is generally paid in advance in two equal installments in January and July of each
year.
Annual Chair Retainers: $100,000 for Non-Executive Chair of the Board
$25,000 for Audit Committee Chair
$20,000 for MD&C Committee Chair
$20,000 for Nominating and Governance Committee Chair
Stock Ownership Guidelines for Non-Employee Directors
Our non-employee directors are subject to ownership guidelines that establish a minimum ownership level and require
that all net shares received in connection with a stock award, after selling shares to pay all applicable taxes, be held
throughout their tenure as a director. The ownership guideline for non-employee directors is equal to five times the
non-employee directors’ annualized cash retainer. As of December 31, 2023, this amount was $600,000. There is no
deadline for non-employee directors to reach their ownership guideline; however, the MD&C Committee performs regular
reviews to confirm that all non-employee directors are in compliance or are showing sustained progress toward
achievement of their ownership guideline. Based on the closing price of our Common Stock on March 5, 2024, all non-
employee directors have reached the ownership guideline with the exception of our two newest directors, Mr. Bené and
Mr. Chinn, who are making appropriate progress toward the ownership guideline. Additionally, our Insider Trading Policy
provides that directors are not permitted to hedge their ownership of Company securities, including trading in options,
warrants, puts and calls or similar derivative instruments on any security of the Company or selling any security of the
Company “short.”
2024 Proxy Statement | 15
BOARD OF DIRECTORS
2023 Director Compensation Table
The table below shows the aggregate cash paid, and stock awards issued, to the non-employee directors in 2023 in
accordance with the descriptions set forth above:
Name
Bruce E. Chinn(2)
Andrés R. Gluski
Victoria M. Holt(3)
Kathleen M. Mazzarella(4)
Sean E. Menke
William B. Plummer
John C. Pope
Maryrose T. Sylvester
Thomas H. Weidemeyer(5)
Fees Earned
or Paid in
Cash ($)
106,800
140,000
133,775
198,785
120,000
145,000
120,000
120,000
110,000
Stock
Awards
($)(1)
160,125
179,992
179,992
248,798
179,992
179,992
179,992
179,992
140,045
Total ($)
266,925
319,992
313,767
447,583
299,992
324,992
299,992
299,992
250,045
(1) Amounts in this column represent the grant date fair value of stock awards granted in 2023, in accordance
with Financial Accounting Standards Board Accounting Standards Codification Topic 718. The grant date
fair value of the awards is equal to the number of shares issued multiplied by the average of the high and
low market price of our Common Stock on each date of grant; there are no assumptions used in the
valuation of shares.
(2) Mr. Chinn was elected to our Board effective February 10, 2023 and received prorated equity and cash
compensation for service as a director from the date of election until the next regular installment of
compensation payments in July 2023.
(3) Ms. Holt received prorated cash compensation for service as Chair of the Nominating and Governance
Committee from May 9, 2023 until the next regular installment of compensation payments in July 2023.
(4) Ms. Mazzarella received prorated equity and cash compensation for service as Non-Executive Chair of the
Board from May 9, 2023 until the next regular installment of compensation payments in July 2023.
(5) As of the 2023 Annual Meeting, Mr. Weidemeyer had reached the retirement age set forth in the Company’s
Corporate Governance Guidelines; therefore, he did not stand for re-election. His term as a director of the
Company expired, and his service as Non-Executive Chair of the Board ended, on May 9, 2023.
16 |
2024 Proxy Statement
ELECTION OF DIRECTORS
(Item 1 on the Proxy Card — Director Nominees)
The first item on the proxy card is the election of nine directors to serve until the 2025 Annual Meeting of Stockholders or
until their respective successors have been duly elected and qualified. The Board has nominated the nine director
candidates named below and recommends that you vote FOR their election. Each of the director nominees currently
serves on our Board of Directors. If any nominee is unable or unwilling to serve as a director, which we do not anticipate,
the Board, by resolution, may reduce the number of directors that constitute the Board or may choose a substitute. To be
elected, a director must receive a majority of the votes cast with respect to that director at the meeting. Our Company’s
By-laws provide that if the number of shares voted “for” any director nominee does not exceed 50% of the votes cast with
respect to that director, he or she will tender his or her resignation to the Board of Directors contingent on the acceptance
of such resignation by the Board. The Nominating and Governance Committee will then make a recommendation to the
Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the
resignation, taking into account the Nominating and Governance Committee’s recommendation, and publicly disclose its
decision and the rationale behind it within 90 days of the date of the certification of the election results.
Below we present biographical information of each director nominee, as well as information about the qualifications,
skills and areas of expertise that make each of these individuals a valuable member of our Board and that were
considered by the Board when nominating them for re-election. Definitions of the categories of skill and expertise
presented in the following chart are provided below. This is intended as a high-level summary to support an
understanding of director qualifications and is not an exhaustive list of the areas of skill and expertise that our director
nominees contribute to the Board.
BOARD COMPOSITION, SKILLS AND EXPERTISE
BOARD DIVERSITY
INDEPENDENCE
TENURE
3
3
6 of 9
Directors are
diverse based on
gender and
race/ethnicity
3
1
4
3
5.4 Years
Average director
tenure
8 of 9
Directors are
independent
8
Racial/ethnically diverse
Women
Independent
President and CEO
2
0-3 years
4-8 years
9-12 years
2024 Proxy Statement | 17
é
n
e
B
i
n
n
h
C
h
s
i
F
i
k
s
u
l
G
t
l
o
H
a
l
l
e
r
a
z
z
a
M
e
k
n
e
M
r
e
m
m
u
l
P
r
e
t
s
e
v
l
y
S
ELECTION OF DIRECTORS
SKILLS AND EXPERIENCE
Executive Leadership
Public Company
Board and
Governance
Strategic Planning
Operational
Excellence
Financial Expertise
and Capital Allocation
Human Capital
Management
Sustainability/
Environmental/
Renewable Energy
Digital / Information
Technology /
Cybersecurity
Risk Management
DEMOGRAPHICS
Gender
Male
Male
Male
Male
Female
Female
Male
Male
Female
Race/Ethnicity
White/
Caucasian
Black/
African
American
White/
Caucasian
Hispanic
White/
Caucasian
White/
Caucasian
White/
Caucasian
Black/
African
American
White/
Caucasian
Each director nominee’s identification of the top four
categories of skill and expertise through which they
contribute to the Board. This is not an indication that
any director nominee does not possess any particular
category of skill or expertise, but rather, a targeted
reflection of the key areas through which each director
nominee supports the effectiveness of the Board and
furthers the long-term success of the Company
Each director nominee’s identification of additional
categories of skill and expertise in which they have
substantial experience and in-depth knowledge
18 |
2024 Proxy Statement
Executive
Leadership
Public Company Board
and Governance
Strategic
Planning
ELECTION OF DIRECTORS
Directors who hold or have held
significant executive leadership positions
with large organizations provide unique
insights. These individuals have valuable
experience developing talent and solving
problems in large, complex organizations
and can capably and confidently advise
the Company’s senior leadership team on
a wide range of issues. These individuals
often possess extraordinary leadership
qualities and have the ability to identify
and develop these qualities in others.
by
drawing
effectively
Directors with a history of service on other
public company boards help our Board
on
function
knowledge of governance best practices.
individuals bring a practical
These
and
understanding
processes
of
the
management accountability, transparency,
and the protection of stockholder interests.
These individuals help our Board structure
and execute its independent oversight of
management.
organizations
importance
and
of
Directors with experience developing and
driving the strategic direction and growth
of large organizations provide valuable
guidance to the Company’s
senior
leadership team. These individuals have
expertise
including
in
transformation,
innovation and change
management. These individuals often also
have sophisticated experience in growth
through large corporate transactions,
including mergers & acquisitions.
areas
Operational
Excellence
Financial Expertise and
Capital Allocation
Human Capital
Management
to
on
implement
and assess
commitments
Directors with experience in a significant
operations role help the Company to
develop,
its
operating plan and capital plan and
execute
cost
optimization and continuous improvement.
Individuals with extensive operational
experience in heavily regulated industries,
including a focus on capital intensive and
labor
with
sophisticated logistics, transportation and
supply chain elements, provide valuable
insights on management’s ability to
operate effectively and efficiently.
businesses
intensive
of
oversight
Directors with a deep understanding of
finance and financial reporting lead our
Board’s
financial
performance and robust internal controls.
These individuals have expertise in
designing and implementing financing
strategies,
and
evaluating stockholder
and
accessing
These
individuals have knowledge of corporate
standards
finance
necessary for effective oversight of public
company financial reporting.
capital markets.
accounting
allocation
returns
capital
and
Directors with experience in human
capital management provide valuable
guidance in support of the Company’s
People First strategy. These individuals
understand the dynamics of attracting,
motivating, and retaining talented and
engaged employees. These individuals
have expertise in talent management,
succession planning and creating a
diverse and inclusive workplace that
prioritizes safety as a core value.
Sustainability/Environmental/
Renewable Energy
Digital/Information
Technology/ Cybersecurity
Risk
Management
These
implementation
Directors with experience overseeing
and
development,
assessment of sustainability strategies,
and risks and opportunities related to
of
sustainability
provision
and
environmental services, support
the
Company’s ability to deliver on its
sustainability growth strategy, goals and
individuals
commitments.
understand the importance of
linking
sustainability and renewable energy to
the creation of long-term stockholder
value, while also operating in an
environmentally sound and responsible
manner.
also
understand the regulatory environment in
which the Company operates and the
connection of sustainability and corporate
responsibility to the Company’s long-
standing commitment to environmental
stewardship.
individuals
These
valuable
perspectives
business models,
e-commerce
Directors with experience in digital and
leadership
technology
information
provide
on
technology innovation, digital solutions,
innovative
data
analytics,
applications,
marketing strategy and cyber risks. These
individuals are particularly engaged in
our Board’s oversight of the Company’s
comprehensive information security and
cybersecurity
These
individuals also bring knowledge of use of
technology to further the Company’s
strategy to enhance customer experience
and reduce costs and labor intensity
through automation.
programs.
of
our
Board
implementation
sophisticated
Directors that have participated in
and
development,
risk
evaluation
in
management programs are critical
its
helping
to risk
responsibilities with respect
oversight
These
and mitigation.
individuals have experience in effectively
identifying, prioritizing and managing a
broad
and
significant risks facing a large public
company.
spectrum of
complex
fulfill
2024 Proxy Statement | 19
ELECTION OF DIRECTORS
THOMAS L. BENÉ
Age: 61
Director since:
March 2024
Board Committee:
Management
Development &
Compensation
POSITION AND BUSINESS EXPERIENCE
President and Chief Executive Officer — Breakthru Beverage Group, LLC (private beverage
wholesale distributor) since October 2021.
Former President and Chief Executive Officer — National Restaurant Association, served from
June 2020 to September 2021.
Former President and Chief Executive Officer — Sysco Corporation (multinational wholesale
restaurant distributor), served from 2018 to January 2020; also served as Executive Advisor from
February 2020 to March 2020.
Director of Sysco Corporation from 2018 to January 2020.
QUALIFICATIONS
Tom Bené has four decades of experience executing on strategic business priorities and delivering
financial growth for large companies. Since 2021, he has served as President and Chief Executive
Officer of Breakthru Beverage Group, where he is focused on leading the company through a
period of growth and expansion by driving new capabilities and innovation. Prior to his current
role, he held several operations and business leadership roles at Sysco Corporation, including
serving as President, Chief Executive Officer, and Chairman. Before joining Sysco in 2013, Mr. Bené
spent over 20 years at PepsiCo in numerous roles of increasing responsibility and scale.
Mr. Bené has a proven track record of driving growth and modernizing business models
throughout his career. Through his prior operations and management positions, Mr. Bené has
gained valuable insight and knowledge in the areas of leadership and management development,
corporate strategy development, merchandising, sales, marketing, revenue management, shared
services and distribution and supply chain management.
Mr. Bené shares his deep experience in logistics, as well as his focus on differentiation through
the use of technology and providing outstanding customer service, to further our Company’s
In addition, his dedication to employee development
growth and optimization strategy.
complements the Company’s People First commitment.
Mr. Bené holds a bachelor of science degree in business administration from the University of
Kansas.
20 |
2024 Proxy Statement
BRUCE E. CHINN
Age: 67
Director since:
February 2023
Board Committee:
Audit
ELECTION OF DIRECTORS
POSITION AND BUSINESS EXPERIENCE
Retired President and Chief Executive Officer — Chevron Phillips Chemical Company LLC, or
CPChem, (global petrochemical joint venture of Chevron USA Inc. and Philips 66 Company), served
from April 2021 to March 2024; currently serving as Executive Advisor to CPChem since
March 2024.
Director of CPChem from November 2020 to March 2024.
Also served as President, Chemicals for Chevron Corporation (multinational energy corporation)
from May 2020 to March 2021 and President, Chevron Oronite (global lubricant and fuel additives
business) for Chevron Corporation from 2018 to April 2020.
QUALIFICATIONS
In his recent position as President, Chief Executive Officer and a Director of CPChem, Bruce Chinn
focused on leading the company through a period of sustainable growth. Mr. Chinn has over
40 years of experience driving operational, safety, and financial results. Previously, he held several
operations and business roles at Chevron Corporation, leading large, diverse organizations. In
these roles, Mr. Chinn focused on performance, partnership, and safety, while striving for
continued success in the business and community. Mr. Chinn began his career at DuPont, where
he held positions of increasing responsibility in manufacturing, technical, commercial and
business leadership at the U.S. and international level.
Mr. Chinn brings extensive knowledge of circular solutions and renewable energy that is aligned
with our Company’s strategic focus on making sustainability growth investments in our recycling
and renewable energy businesses. His operations leadership expertise bolsters our continued
efforts to drive operating efficiencies, enhance our safety culture and differentiate our service
offerings. Mr. Chinn’s broad and expansive dedication to operating excellence and developing
strong corporate culture provides valuable perspective to the Board, and his experience allows
him to share specific insight into focus areas such as renewable energy transition, environmental
regulation and compliance, international exposure and risk management.
Mr. Chinn serves on the American Institute of Chemical Engineers Foundation Board of Trustees,
and he serves as a board director and executive committee member of the Alliance to End Plastic
Waste and the American Chemistry Council. Mr. Chinn holds a bachelor of science degree in
chemical engineering from Texas A&M University.
2024 Proxy Statement | 21
ELECTION OF DIRECTORS
JAMES C. FISH, JR.
Age: 61
Director since:
November 2016
POSITION AND BUSINESS EXPERIENCE
President, Chief Executive Officer and Director — Waste Management, Inc. since 2016.
Director of Caterpillar Inc. since March 2023.
QUALIFICATIONS
Jim Fish has served as our President and Chief Executive Officer and a Director since 2016. Over
more than 20 years, Mr. Fish has held several key positions in our Company, including President
and Chief Financial Officer; Senior Vice President — Eastern Group; Area Vice President for
Pennsylvania and West Virginia; Market Area General Manager for Massachusetts and Rhode
Island; Vice President of Price Management; and Director of Financial Planning and Analysis.
Before joining our Company, Mr. Fish held finance and revenue management positions at Westex,
a Yellow-Roadway subsidiary, Trans World Airlines, and America West Airlines. He began his
professional career at KPMG Peat Marwick.
Mr. Fish’s extensive leadership and operational experience, together with his tremendous
understanding of the environmental services industry, are instrumental to the development and
successful execution of our growth strategy to deliver stockholder value. Additionally, through his
professional and educational experience, Mr. Fish has developed valuable expertise in accounting,
external reporting, investor relations, human capital and performance management, and risk
management. Mr. Fish oversees our Digital organization, and participates directly in matters
related to cybersecurity and information security risk mitigation and response strategies.
As North America’s largest comprehensive environmental solutions provider, sustainability is
embedded in all aspects of our business. As our President and Chief Executive Officer, Mr. Fish
has a thorough understanding of the risks and opportunities presented in the areas of
sustainability and environmental protection. Mr. Fish is deeply involved in our efforts to mitigate
such risks and capitalize on such opportunities in order to deliver on our brand promise, ALWAYS
WORKING FOR A SUSTAINABLE TOMORROW®.
Mr. Fish also champions the importance of our people-first commitment and the necessity of
creating a culture that truly puts the needs of WM employees first. As part of that people-first
culture, Mr. Fish has been actively involved in developing initiatives to promote inclusion and
diversity throughout the Company’s population of approximately 48,000 employees.
Mr. Fish earned a bachelor’s degree in accounting from Arizona State University and a master’s
degree in business administration, with emphasis on finance, from the University of Chicago. He
is also a Certified Public Accountant.
22 |
2024 Proxy Statement
ANDRÉS R. GLUSKI
Age: 66
Director since:
January 2015
Board
Committees:
Audit and
Management
Development &
Compensation
(Chair)
ELECTION OF DIRECTORS
POSITION AND BUSINESS EXPERIENCE
President, Chief Executive Officer and Director — The AES Corporation (global energy company)
since 2011.
Director of AES Gener (Chile) from 2005 to January 2020.
QUALIFICATIONS
Andrés Gluski has served as President, Chief Executive Officer and a Director of The AES
Corporation, a Fortune 500 global energy company, since 2011. Mr. Gluski began his tenure at
AES in 2000 and previously served as Executive Vice President and Chief Operating Officer. Under
his leadership, AES has become a leader in implementing clean technologies, including energy
storage and renewable power. Through his professional experience, Mr. Gluski has extensive
knowledge with respect to evaluating renewable energy strategies, and he has developed
expertise in considering and evaluating climate-related risks and opportunities, which is directly
applicable to our business and our sustainability growth strategy. Mr. Gluski also has experience
in the development of sustainability and corporate social responsibility goals, as well as oversight
of compliance programs.
Prior to joining AES, Mr. Gluski served in a broad range of roles in the public and private sectors,
including working as Executive Vice President of Corporate and Investment Banking in Grupo
Santander. Mr. Gluski served as a member of the President’s Export Council from 2013 to 2016
and served as an expert witness at U.S. Congressional hearings on the subject of energy policy. He
currently serves as Chairman of Council of the Americas.
Mr. Gluski has also focused on shaping an inclusive, innovative workplace at AES with a diverse
and inclusive culture throughout the world. These efforts have given Mr. Gluski valuable expertise
in the areas of human capital management and diversity, equity and inclusion that he utilizes in
his role as Chair of the Management Development & Compensation Committee of the Board.
Mr. Gluski has been named amongst the 100 Most Influential Latinos by Latino Leaders Magazine.
The depth and breadth of Mr. Gluski’s international business and finance background, and
experience in managing growth opportunities while focusing on operational innovation, allow him
to provide invaluable risk management, government affairs, public policy, public relations,
communications and investor relations insight in his role as a member of the Board.
Mr. Gluski holds a bachelor’s degree from Wake Forest University, as well as a master’s degree
and a PhD in economics from the University of Virginia.
2024 Proxy Statement | 23
ELECTION OF DIRECTORS
VICTORIA M. HOLT
Age: 66
Director since:
January 2013
Board
Committees:
Audit and
Nominating &
Governance (Chair)
POSITION AND BUSINESS EXPERIENCE
Retired President and Chief Executive Officer — Proto Labs, Inc. (online and technology-enabled
quick-turn manufacturer), served from 2014 to March 2021; also served as Director from
2014 — May 2021.
Director of Piper Sandler Companies since September 2019.
Director of A. O. Smith Corp. since April 2021.
QUALIFICATIONS
Victoria Holt joined Proto Labs, Inc. as President, Chief Executive Officer and a Director in 2014,
retiring in 2021. With manufacturing facilities in five countries, Proto Labs is a leading e-commerce
technology enabled digital manufacturer of custom prototypes and on-demand product parts.
Ms. Holt began her career at Monsanto Company, where she held various assignments of
increasing responsibility before moving to Solutia, Inc., a divestiture of the Monsanto Company’s
chemical business, as Vice President and General Manager Performance Films. Ms. Holt later
held various roles with PPG Industries, Inc., a leading coatings and specialty products company,
including Senior Vice President of Glass and Fiber Glass. Ms. Holt then served as President and
Chief Executive Officer of Spartech Corporation, a leading provider of plastic sheet, compounds
and packaging products, until its sale to PolyOne in 2013.
Ms. Holt has a diverse international business background serving a wide spectrum of customers
looking for sustainable solutions across diverse end markets including plastics, materials,
automotive, medical, aerospace, consumer and general industrial. Ms. Holt brings passion and
extensive experience in the areas of sustainable innovation, environmental solutions, plastics
operations and management and recycling to the Board. Ms. Holt’s proven success leading large
global companies across a broad range of manufacturing, chemical and materials industries has
demonstrated her deep understanding of risk management, operations, strategic planning and
performance measurement. Ms. Holt provides tremendous insight into the areas of continuous
improvement, use of data analytics, e-commerce, digitally connected operations and execution of
our technology-led, sustainability-linked strategy to grow our business and mitigate climate risks.
Ms. Holt has developed expertise in corporate governance as a member of the public company
boards listed above, in addition to experience serving on private company boards, and she shares
this expertise with the Company’s Board in her position as Chair of the Nominating and Governance
Committee. She also serves on the board of trustees of Dunwoody College.
Ms. Holt holds a bachelor’s degree in chemistry from Duke University and a master’s degree in
business administration from Pace University. Ms. Holt has completed the National Association of
Corporate Directors (NACD) Cyber Risk Oversight Program and earned the CERT Certificate in
Cybersecurity Oversight.
24 |
2024 Proxy Statement
KATHLEEN M. MAZZARELLA
POSITION AND BUSINESS EXPERIENCE
ELECTION OF DIRECTORS
Age: 64
Director since:
October 2015
Chair of the
Board since:
May 2023
Board
Committees:
Audit, Management
Development &
Compensation and
Nominating &
Governance
Chairman, President and Chief Executive Officer — Graybar Electric Company, Inc. (distributor of
electrical, communications and data networking products and provider of related supply chain
management and logistics services) since 2013.
Director of Cigna Corporation since 2018.
Director of Express Scripts Holding Company from 2017 until acquisition by Cigna Corporation in
2018.
Director of Core & Main since January 2019.
QUALIFICATIONS
Kathleen Mazzarella has served as President and Chief Executive Officer of Graybar Electric
Company, Inc. since 2012, and as Chairman since 2013. During her more than 40-year tenure at
Graybar, Ms. Mazzarella has held numerous executive-level positions in operations, sales, human
resources, strategic planning and marketing,
including Executive Vice President and Chief
Operating Officer, Senior Vice President — Sales and Marketing and Senior Vice
President — Human Resources and Strategic Planning.
Ms. Mazzarella has been instrumental in developing and communicating Graybar’s commitment
to sustainability initiatives. Graybar focuses on sustainability in the way it operates and in the
innovative solutions it provides to its customers. The company offers energy-saving products,
renewable energy solutions and supply chain services that support sustainable construction,
renovation and maintenance of infrastructure and facilities. The company also invests in the
communities it serves and emphasizes integrity, inclusion and opportunity for all employees.
Ms. Mazzarella brings her deep and valuable experience leading a diverse range of business
functions necessary for an employee-driven, customer-focused business, similar to our Company.
Through her role as Chief Executive Officer and her service on the board of directors for other
public companies, she has developed expertise in evolving social and governance initiatives. In
addition to her experience overseeing financial reporting and controls, technology systems and
platforms, and other functional and operational areas, she has particular experience in the area of
human capital management, including succession planning and diversity, equity and inclusion
initiatives. Ms. Mazzarella also brings expertise in labor relations, public policy, operational
innovation and strategic planning.
Ms. Mazzarella holds an associate degree in telecommunications engineering, a bachelor’s degree
in applied behavioral sciences from National Louis University, and a master’s degree in business
administration from Webster University.
In addition to the public company boards listed above, Ms. Mazzarella also serves on the board of
the National Association of Wholesaler-Distributors (NAW) and previously served on the board of
the NAW Institute for Distribution Excellence. Ms. Mazzarella previously served as Chairman of
the Federal Reserve Bank of St. Louis, and she has experience serving on various organizational
and charitable boards, such as Greater St. Louis Inc., United Way of Greater St. Louis and the Saint
Louis Club.
2024 Proxy Statement | 25
ELECTION OF DIRECTORS
SEAN E. MENKE
Age: 55
Director since:
March 2021
Board
Committees:
Audit and
Nominating &
Governance
POSITION AND BUSINESS EXPERIENCE
Executive Chairman of the Board — Sabre Corporation (software and technology solutions
provider to the travel industry) since April 2022.
Director of Sabre Corporation since 2016.
Also served as Chief Executive Officer of Sabre Corporation from 2016 to April 2023 and as
President of Sabre Corporation from 2016 to December 2021.
QUALIFICATIONS
As Chair of the Board of Directors of Sabre Corporation and recent Chief Executive Officer, Sean
Menke has experience heading a global network of development, sales, operations and corporate
functions. In 2015, Mr. Menke joined Sabre as president of Sabre Travel Network, Sabre’s largest
line of business. Under Mr. Menke’s leadership, Sabre won major new business opportunities,
increased global market share, secured Sabre’s position as the leading global distribution system
in North America, Latin America and Asia-Pacific, and led innovation to enable sales of more
customized fares and ancillary products that help drive the changing travel industry landscape.
Before joining Sabre, Mr. Menke spent more than 20 years in executive leadership roles in the
airline industry. He served as Chief Executive Officer at Frontier Airlines and at Pinnacle Airlines,
and he held senior level marketing, operations, customer experience, strategy, planning, sales,
distribution and revenue management roles, including with Air Canada and Hawaiian Airlines. He
also served as Executive Vice President at IHS Inc., a global information technology company.
Mr. Menke is a proven transformation leader, and uses his extensive experience in technology and
transportation operations to bring together strategy and data to address complex issues as a
member of the Board. His expertise in logistics and commitment to delivering efficient, customer-
focused innovation through imaginative technology-led solutions helps advance our strategy to
differentiate our services.
Mr. Menke has extensive executive experience in technology-driven companies. He is aware of the
importance and challenges of cybersecurity and privacy issues, and he has experience overseeing
risk mitigation and implementing systems to protect major corporations. Mr. Menke shares with
the Board his experience in the areas of cyber intrusion response planning and remediation.
Mr. Menke holds a bachelor’s degree in economics and aviation management from Ohio State
University and a master’s degree in business administration from the University of Denver.
26 |
2024 Proxy Statement
WILLIAM B. PLUMMER
POSITION AND BUSINESS EXPERIENCE
ELECTION OF DIRECTORS
Age: 65
Director since:
August 2019
Board
Committees:
Audit (Chair) and
Management
Development &
Compensation
Retired Executive Vice President and Chief Financial Officer — United Rentals, Inc. (world’s largest
equipment rental company), served from 2008 to 2018.
Director of Global Payments Inc. since 2017.
Director of Mason Industrial Technology, Inc. from February 2021 to February 2023.
Director of Nesco Holdings, Inc. from July 2019 to March 2021.
Director of John Wiley & Sons, Inc. from 2003 to September 2019.
QUALIFICATIONS
William Plummer served as Executive Vice President and Chief Financial Officer for United Rentals,
Inc., where he was responsible for the development of the company’s finance activities and
investor relations, and he co-led its mergers, acquisitions and divestitures strategies. He also led
the company’s safety function and its data and analytics efforts. Mr. Plummer was instrumental in
helping the company execute a strategy focused on improving the profitability of its core
equipment rental business through revenue growth, margin expansion, operational efficiencies
and acquisitions.
Mr. Plummer brought more than two decades of financial leadership experience when he joined
United Rentals, having served in a several executive roles, including as Executive Vice President
and Chief Financial Officer of Dow Jones & Company, Inc., where he set policy for its global finance
and corporate strategy functions. Prior to Dow Jones, Mr. Plummer was Vice President and
Treasurer of Alcoa Inc., where he was responsible for global treasury policy and capital markets
transactions. Mr. Plummer also held several executive positions at Mead Corporation, including
President of its Gilbert Paper division, Vice President of Corporate Strategy and Planning, and
Treasurer.
Mr. Plummer brings extensive accounting, audit,
internal control, and risk management
experience to the Board and as Chair of the Audit Committee. In particular, he has first-hand
experience developing, enhancing and overseeing risk management programs at large public
companies, including identification and oversight of risks related to human capital, climate,
cybersecurity and information technology. He provides insight based on his broad and substantial
background in finance, logistics, operational improvement, mergers and acquisitions and capital
markets transactions. He also brings valuable experience executing a customer-focused strategy,
driving organic revenue growth and improving free cash flow. Mr. Plummer is deeply engaged in
advancing and overseeing results from our Company’s diversity, equity and inclusion initiatives.
Mr. Plummer holds bachelor’s and master’s degrees in aeronautics and astronautics from
Massachusetts Institute of Technology and a master’s degree in business administration from
Stanford University.
2024 Proxy Statement | 27
ELECTION OF DIRECTORS
MARYROSE T. SYLVESTER
Age: 58
Director since:
March 2021
Board
Committees:
Management
Development &
Compensation and
Nominating &
Governance
POSITION AND BUSINESS EXPERIENCE
Retired U.S. Managing Director and U.S. Head of Electrification — ABB Ltd. (global technology
company focused on electrification, robotics, power and automation), served from August 2019 to
August 2020.
Former President and Chief Executive Officer — Current, powered by GE (energy services and
information technology subsidiary of General Electric subsequently acquired by private equity
investors), served from 2015 to June 2019.
Director of Harley-Davidson, Inc. since 2016.
Director of Vontier Corporation since March 2021.
Director of Flex Ltd. since September 2022.
QUALIFICATIONS
As U.S. Managing Director and U.S. Head of Electrification for ABB Ltd., Maryrose Sylvester was
responsible for ABB’s largest geographical market and the implementation of operational
innovations. Ms. Sylvester also championed the company’s diversity and inclusion efforts and
accelerated ABB’s Encompass Diversity program.
Prior to joining ABB Ltd., Ms. Sylvester spent more than 30 years at General Electric, where she
held a number of leadership roles, including serving as President and Chief Executive Officer of
each of GE Lighting, GE Intelligent Platforms, which focused on industrial automation, and GE
Current, a digital power service business that delivers integrated energy systems. Ms. Sylvester
was instrumental in launching the GE Women’s Network.
Ms. Sylvester is a strategic, growth-oriented leader with a focus on the areas of technology,
innovation and automation. Through her prior experience, Ms. Sylvester has developed expertise
in delivering technology-enabled and energy-efficient sustainable solutions. Ms. Sylvester
provides experience and extensive knowledge of product development, marketing, technology
and supply chain strategy to the Board. Ms. Sylvester has in-depth expertise in the area of
improving energy efficiency in response to climate risk. Ms. Sylvester also shares insight from
her prior experience to inform our strategy to improve processes and drive efficiency through
automation. Ms. Sylvester is passionate about advancing diversity, equity and inclusion and has
expertise developing and driving such initiatives in the workplace. Ms. Sylvester also brings
valuable governance experience from her service on the public company boards listed above.
She holds a bachelor’s degree in procurement and production management from Bowling Green
State University and a master’s degree in business administration from Cleveland State University.
FOR THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION
OF EACH OF THE NINE DIRECTOR NOMINEES.
28 |
2024 Proxy Statement
DIRECTOR AND OFFICER STOCK OWNERSHIP
Our Board of Directors has adopted stock ownership guidelines for our non-employee directors based on the
recommendation of the MD&C Committee, as described in the Non-Employee Director Compensation discussion. Our
executive officers, including Mr. Fish, are also subject to stock ownership guidelines, as described in the Compensation
Discussion and Analysis.
The Security Ownership of Management table below shows the number of shares of Common Stock each director and
each executive officer named in the Summary Compensation Table beneficially owned as of March 5, 2024, as well as the
number owned by all directors and executive officers as a group. These individuals, both individually and in the aggregate,
own less than 1% of our outstanding shares as of the record date.
SECURITY OWNERSHIP OF MANAGEMENT
Name
Thomas L. Bené
Bruce E. Chinn(3)
Andrés R. Gluski
Victoria M. Holt(4)
Kathleen M. Mazzarella(5)
Sean E. Menke
William B. Plummer(6)
John C. Pope
Maryrose T. Sylvester
James C. Fish, Jr.(7)
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
All directors and executive officers as a group (21 persons)(8)
Shares of Common
Stock Owned(1)
579
1,321
15,975
21,473
14,574
3,767
5,992
56,461
3,767
298,540
59,170
90,205
11,006
50,489
740,508
Shares of Common
Stock Covered by
Exercisable Options(2)
—
—
—
—
—
—
—
—
—
63,930
65,398
32,503
20,883
52,800
383,475
(1) The table reports beneficial ownership in accordance with Rule 13d-3 under the Exchange Act. The amounts reported
above include 4,218 stock equivalents attributed to Mr. Fish and 2,372 stock equivalents attributed to Mr. Morris,
based on their holdings in the Company’s 401(k) Retirement Savings Plan stock fund. The amounts reported above
also include 94,844 shares of Common Stock deferred by Mr. Fish. Deferred shares were earned on account of
vested equity awards and pay out in shares of Common Stock after the executive’s departure from the Company
pursuant to the Company’s 409A Deferral Savings Plan (“409A Deferral Plan”).
Executive officers may choose a Waste Management stock fund as an investment option for deferred cash
compensation under the Company’s 409A Deferral Plan. Interests in the fund are considered phantom stock because
they are equal in value to shares of our Common Stock, but these amounts are not invested in stock or funds.
Phantom stock is not included in the table above, but it represents an investment risk based on the performance of
our Common Stock. Mr. Morris has 2,575 phantom stock equivalents under the 409A Deferral Plan.
(2)
Includes the number of options currently exercisable and options that will become exercisable within 60 days of the
record date.
(3) Shares are held by the Chinn Family Trust, for which Mr. Chinn and his wife serve as trustees.
(4) Shares are held by the Victoria M. Holt Trust, for which Ms. Holt and her husband serve as trustees.
(5) Shares are held by the Mazzarella Living Trust, for which Ms. Mazzarella and her husband serve as trustees.
(6) Of this total, 1,623 shares are held by TPO Collectibles LLC, an entity wholly-owned and controlled by Mr. Plummer
and his wife.
2024 Proxy Statement | 29
(7)
(8)
Includes 95,977 shares held in trusts for the benefit of Mr. Fish’s children.
Included in the “All directors and executive officers as a group” are 13,718 stock equivalents attributable to the
executive officers’ collective holdings in the Company’s 401(k) Retirement Savings Plan stock fund.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below shows information for persons known to us to beneficially own more than 5% of our Common Stock
based on their filings with the SEC through March 19, 2024.
Name and Address
The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355
Melinda French Gates; William H. Gates III
500 Fifth Avenue North
Seattle, WA 98109
Bill & Melinda Gates Foundation Trust
2365 Carillon Point
Kirkland, WA 98033
BlackRock, Inc.
50 Hudson Yards
New York, NY 10001
Shares Beneficially
Owned
Number
36,159,856(2)
Percent(1)
9.0%
35,238,154(3)
8.8%
28,665,838(4)
7.1%
(1) Percentage is calculated based on 401,598,077 shares of Common Stock outstanding as of February 8, 2024, as
reported on the cover of the most recent Annual Report on Form 10-K.
(2) This information is based on a Schedule 13G/A filed with the SEC on February 13, 2024. The Vanguard Group reports
that it has shared voting power over 521,224 shares of Common Stock, shared dispositive power over 1,655,291
shares of Common Stock and sole dispositive power over 34,504,565 shares of Common Stock beneficially owned.
(3) This information is based on a Schedule 13G/A filed with the SEC on February 10, 2023, which is the most recent
Schedule 13G filed by the investor with respect to ownership of our Common Stock. Ms. Gates, Mr. Gates and the
Bill & Melinda Gates Foundation Trust each report shared voting and dispositive power over 35,234,344 shares of
Common Stock beneficially owned. Ms. Gates also reports sole voting and dispositive power of 3,810 additional
shares of Common Stock beneficially owned.
(4) This information is based on a Schedule 13G/A filed with the SEC on January 26, 2024. BlackRock, Inc. reports that
it has sole voting power over 25,826,390 shares of Common Stock and sole dispositive power over 28,665,838
shares of Common Stock beneficially owned.
DELINQUENT SECTION 16(A) REPORTS
The federal securities laws require our executive officers and directors to file reports of their holdings and transactions
in our Common Stock with the SEC. Based on a review of the forms and written representations from our executive
officers and directors, we are aware of one delinquent report. In April 2023, Ms. Nagy learned that her investment adviser
executed unauthorized purchases of our Common Stock totaling 13 shares in her individual retirement account. The
purchases occurred in 2022 when Ms. Nagy was serving as Vice President and Chief Accounting Officer, although she
transitioned to a new role with the Company in March 2023 and is no longer serving as an executive officer. Due to
Ms. Nagy not being aware of the purchases, the transactions were not timely reported on a Form 4 but upon discovery
were reported on a Form 4 in April 2023.
30 |
2024 Proxy Statement
EXECUTIVE OFFICERS
The following is a listing of our current executive officers, their ages and their business experience for the past five years
(other than Mr. Fish, whose age, experience and qualifications are included in the director nominees section of this Proxy
Statement). Unless otherwise specified, all prior positions listed below were with our Company.
Name
Charles C. Boettcher
Age
50
Positions Held and Business Experience for Past Five Years
• Executive Vice President, Corporate Development and Chief Legal Officer since
February 2020.
Rafael E. Carrasco
John A. Carroll
Christopher P. DeSantis
Tara J. Hemmer
John J. Morris, Jr.
Devina A. Rankin
Kelly C. Rooney
52
51
60
51
54
48
50
• Senior Vice President, Corporate Development and Chief Legal Officer from
May 2019 to February 2020.
• Senior Vice President and Chief Legal Officer from 2017 to May 2019.
• Senior Vice President — Enterprise Strategy since September 2023.
• Senior Vice President — Operations from July 2021 to September 2023.
• Area Vice President — Greater Mid-Atlantic Area from 2017 to June 2021.
• Vice President and Chief Accounting Officer since March 2023.
• Vice President, Internal Audit and Controls from 2018 to March 2023.
• Senior Vice President — Operations since October 2023
• Area Vice President — New England from 2009 to October 2023.
• Senior Vice President and Chief Sustainability Officer since July 2021.
• Senior Vice President — Operations from January 2019 to June 2021.
• Executive Vice President and Chief Operating Officer since January 2019.
• Executive Vice President and Chief Financial Officer since February 2020.
• Senior Vice President and Chief Financial Officer from 2017 to February 2020.
• Senior Vice President and Chief Human Resources and Diversity & Inclusion
Officer since February 2023.
• Senior Vice President and Chief People Officer from August 2022 to
February 2023.
• Vice President — People Solutions from September 2021 to August 2022.
• Area General Manager from July 2020 to September 2021.
• Area Director Collection Operations from April 2019 to July 2020.
• Regional Manager, Advanced Disposal Services,
(a waste and
environmental services company acquired by our Company in 2020), from 2015
to April 2019.
Inc.
Donald J. Smith
57
• Senior Vice President — Operations since January 2023.
Johnson Varkey
• Area Vice President — Texas & Oklahoma Area from 2012 to December 2022.
• Senior Vice President and Chief Information Officer since January 2024.
52
• Vice President and Chief
Information Officer
from March 2023 to
December 2023.
• Vice President — Enterprise Digital Services from September 2019 to
March 2023.
• Senior Vice President and Chief Information Officer, Centrica (an international
energy and services company) from March 2019 to August 2019.
Michael J. Watson
54
• Senior Vice President and Chief Customer Officer since 2018.
2024 Proxy Statement | 31
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
The Company’s Compensation Discussion and Analysis provides information about the Company’s executive
compensation philosophy and the components of its compensation programs. This includes information about how
compensation of the Company’s named executive officers for the fiscal year ended December 31, 2023 aligned with the
Company’s 2023 financial goals and performance. The Compensation Discussion and Analysis helps readers better
understand the information found in the Summary Compensation Table and other accompanying tables included in this
Proxy Statement.
This Compensation Discussion and Analysis focuses on our executive pay program as it relates to the following executive
officers during 2023, whom we refer to as the “named executive officers” or “named executives”:
• Mr. James C. Fish, Jr. — President and Chief Executive Officer since November 2016.
• Ms. Devina A. Rankin — Executive Vice President and Chief Financial Officer since February 2020.
• Mr. John J. Morris, Jr. — Executive Vice President and Chief Operating Officer since January 2019.
• Mr. Rafael E. Carrasco — Senior Vice President — Operations from July 2021 to September 2023; Senior Vice
President — Enterprise Strategy since September 2023.
• Ms. Tara J. Hemmer — Senior Vice President and Chief Sustainability Officer since July 2021.
For additional information about the named executives’ background and prior experience with the Company, see
“Executive Officers” above.
Executive Summary
The objective of our executive compensation program is to attract, retain, reward and incentivize talented employees
who will lead the Company in the successful execution of our strategy. The Company seeks to accomplish this goal by
designing a compensation program that is supportive of and aligns with the strategy of the Company and the creation of
stockholder value, while discouraging excessive risk-taking.
We have enabled a people-first, technology-led focus to deliver on our brand promise, ALWAYS WORKING FOR A
SUSTAINAIBLE TOMORROW®. Our strategy leverages and sustains the strongest asset network in the industry to drive
best in class customer experience and growth. As North America’s leading provider of comprehensive waste
management environmental services, sustainability and environmental stewardship are embedded in all that we do. As
a result, we believe that positive financial results, including the results for the performance measures on which our
executives are compensated, are naturally aligned with the successful execution of our goals to put our people first and
position them to serve and care for our customers, the environment, the communities in which we work and our
stockholders. We believe our Company would not be successful, on financial performance measures or otherwise, without
our industry-leading focus on sustainability.
The following key structural elements and policies further the objective of our executive compensation program:
• a substantial majority of executive compensation is linked to Company performance, through annual cash
incentive performance criteria and long-term equity-based incentive awards. As a result, our executive
compensation program provides for notably higher total compensation in periods of above-target Company
performance, as we saw with respect to equity awards with a three-year performance period ended 2023 and the
2023 annual cash incentive award;
• at target, 73% of total compensation of our President and Chief Executive Officer was tied to long-term equity
awards, and 61% of total compensation of our other named executives, on average, was tied to long-term equity
awards, which aligns executives’ interests with those of stockholders;
32 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
• our total direct compensation opportunities for named executive officers are targeted to fall in a range around the
competitive median;
• performance-based awards include threshold, target and maximum payouts correlating to a range of
performance outcomes and are based on a variety of indicators of performance, which limits risk-taking behavior;
• performance stock units with a three-year performance period, as well as stock options that vest over a three-
interests with long-term performance and reduce incentives to maximize
year period,
link executives’
performance in any one year;
• all of our executive officers are subject to stock ownership guidelines, which we believe demonstrates a
commitment to, and confidence in, the Company’s long-term prospects;
• in addition to adoption of the executive compensation clawback policy mandated by the New York Stock Exchange
in 2023, the Company has clawback provisions in its equity award agreements and executive officer employment
agreements, and has adopted a clawback policy applicable to annual incentive compensation, designed to recoup
compensation when cause and/or misconduct are found;
• our executive officer severance policy implemented a limitation on the amount of benefits the Company may
provide to its executive officers under severance agreements (the “Severance Limitation Policy”); and
• the Company has adopted a policy that prohibits it from entering into agreements with executive officers that
provide for certain death benefits or tax gross-up payments.
2023 Compensation Program Results and Company Performance
During 2023, we continued to focus on our priorities to advance our strategy — enhancing employee engagement,
permanently reducing our cost to serve through the use of technology and automation, and investing in growth through
our recycling and renewable energy businesses. This strategic focus, combined with strong operational execution,
resulted in increased revenue, income from operations and income from operations margin. We remain diligent in
offering a competitive and differentiated service that meets the needs of our customers, and we are focused on driving
operating efficiencies and reducing discretionary spend. We continue to invest in our people through market wage
adjustments, investments in our digital platform and training for our team members. We also continue to make
investments in automation and optimization to enhance our operational efficiency and improve labor productivity for all
lines of business. The Company allocated $2.438billion of available cash to our shareholders during 2023 through
dividends and Common Stock repurchases. During 2023, the Company allocated $2.895 billion of available cash to capital
expenditures. The increase in capital spending continues to be driven in large part by our acceleration of investments in
our recycling and renewable energy businesses.
Following is a summary of the 2023 compensation program results:
Total Shareholder Return
With respect to the half of the performance share units (“PSUs”) granted in 2021 with a three-year performance period
ended December 31, 2023 that was subject to total shareholder return relative to the S&P 500 (“TSR PSUs”), the
performance of the Company’s Common Stock on this measure translated into a percentile rank relative to the S&P 500
of 77.27%, resulting in a maximum 200% payout on these PSUs in shares of Common Stock. This performance directly
benefited our stockholders, delivering total shareholder return of 58.25% over the three-year performance period.
Cash Flow Generation
The Company generated net cash flow from operating activities, less capital expenditures, for purposes of the
performance goal associated with the other half of our PSUs (“Cash Flow PSUs”) granted in 2021, of $7.789 billion,
exceeding the target performance level of $7.032 billion and the maximum performance level of $7.50 billion for the
three-year performance period ended December 31, 2023. These results exclude the impact of $1.325 billion of
incremental sustainability growth investments in 2022 and 2023, as such capital expenditures were not contemplated at
the time this performance measure was established but were subsequently approved by our Board in furtherance of the
Company’s strategy. This performance resulted in a 200% payout on these PSUs in shares of Common Stock. The robust
2024 Proxy Statement | 33
EXECUTIVE COMPENSATION
cash flow generation of our business over the three-year performance period has allowed the Company to fulfill its
priorities of investing in the business, funding acquisitions with strong returns, and returning available cash to
stockholders through dividend growth and Common Stock repurchases.
Annual Cash Incentive Performance Measures
Company performance on annual cash incentive performance measures for named executive officers is set forth below.
Additional information about the definition and calculation of these performance measures is below under “Named
Executives’ 2023 Compensation Program and Results — Annual Cash Incentive.” Based on these financial results, the
named executives earned an annual cash incentive payment for 2023 equal to 117.85% of target.
Operating EBITDA (generally defined as the Company’s income from operations, excluding depreciation, depletion
and amortization, “Restructuring” and “(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net”
reported in our Annual Report on Form 10-K, and also excluding the impacts of our recycling brokerage
business) — $5.892 billion, yielding a payout of 98.98%
Income from Operations Margin (generally defined as the Company’s income from operations, excluding
“Restructuring” and “(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net” reported in our
Annual Report on Form 10-K, as a percentage of revenue, also excluding the impacts of our recycling brokerage
business from both income from operations and revenue) — 19.30%, yielding a payout of 133.46%
Internal Revenue Growth (defined as internal revenue growth from yield, plus internal revenue growth from volume,
at the consolidated level for the collection and disposal business) — 5.96%, yielding a payout of 139.99%.
Incentive compensation measures presented in this proxy statement are defined differently than corresponding
measures reported in the Company’s quarterly earnings press release. See Appendix A for additional information and
reconciliations of non-GAAP measures to the most comparable GAAP measures.
Sustainability Modifier to Annual Cash Incentive Awards
Beginning in 2023, the MD&C Committee has incorporated a sustainability modifier into the annual cash incentive
program. As a result, annual cash incentive payouts to executive officers for 2023 were eligible to be increased, or
decreased, up to 5% depending on achievement calculated using a sustainability scorecard. The 2023 sustainability
scorecard contained quantifiable performance measures in the areas of safety; diversity & inclusion (“D&I”); circularity
and climate. As discussed further below under “Named Executives’ 2023 Compensation Program and Results — Annual
Cash Incentive,” the Company earned sufficient points on the sustainability scorecard to correlate to a 2% increase to the
annual cash incentive payment for 2023 otherwise earned.
In 2023, each of the executive compensation incentive awards continued to demonstrate strong alignment between
executive pay and Company performance. The payouts on the PSUs granted in 2021 correlate with outstanding cash flow
generation and total shareholder return over the three-year performance period. Additionally, the above-target combined
results on our annual cash incentive performance measures are reflective of another year of strong business growth
and overall financial performance. The Company’s results on each of the performance measures evidence that our
executives have taken the right actions to deliver on operational, strategic and financial priorities in the face of broader
macroeconomic pressures, including inflation, supply chain disruption, labor market constraints, rising interest rates
and commodity price volatility. Management continues to successfully develop and advance strategic initiatives to grow
our business while driving efficiencies. As a result, both stockholders and executives were rewarded by above-target
results on executive compensation financial performance measures in 2023, coupled with positive results on the
sustainability scorecard.
34 |
2024 Proxy Statement
2023 Actual Performance and Compensation Payouts
Annual Cash Incentive
Long-Term Performance Share Units
EXECUTIVE COMPENSATION
77.27th Percentile Actual
50th Percentile Target
(50% weight)
$7.789B Actual
$7.032B Target
(50% weight)
Combined
Results
200%
200%
200%
19.30% Actual
18.80% Target
(25% weight)
133.46%
5.96% Actual
5.40% Target
(25% weight)
139.99%
Combined Results:
(Financial
Performance
Payout of 117.85%,
Sustainability
Modifier of 2%)
120.21%
Maximum
$5.892B Actual
$5.900B Target
(50% weight)
98.98%
Target
Threshold
Operating EBITDA
Income from
Operations
Margin
Internal
Revenue
Growth
Annual Cash
Incentive
Award Payout
Relative TSR
(S&P 500)
Cash Flow
Generation
PSU Award
Payout
Consideration of Stockholder Advisory Vote
When establishing 2023 compensation for the named executives, the MD&C Committee noted the results of the 2022
advisory stockholder vote on executive compensation, with more than 90% of shares present and entitled to vote at the
annual meeting voting in favor of the Company’s executive compensation. Accordingly, the results of the stockholder
advisory vote did not cause the MD&C Committee to make any changes to executive compensation practices for 2023,
although the MD&C Committee does consider feedback received by the Company through stockholder engagement
throughout the year.
2024 Compensation Program Preview
The MD&C Committee continually reviews our compensation program to ensure it is clearly aligned with the business
strategy and best supports the accomplishment of our goals. The MD&C Committee also believes that consistency in
program design reinforces its efforts to maintain a compensation program that is straightforward, easy to communicate
and readily translates into actionable goals. The MD&C Committee’s choice of long-term performance measures and
respective weighting has been consistent since 2016, and the MD&C Committee is pleased with the financial results and
stockholder value that has been generated. Accordingly, the MD&C Committee has approved keeping the 2024 long-term
incentive program design for stock options and PSUs consistent with prior years.
As disclosed last year, with respect to the Cash Flow PSUs granted in 2022 with a performance period ended
December 31, 2024, the MD&C Committee has considered the impact of the Company’s strategy to accelerate investments
in recycling and renewable energy growth projects on the cash flow generation performance measure. Consistent with
calculation of the performance results for the Cash Flow PSUs granted in 2021, discussed above, the MD&C Committee
anticipates that it will be appropriate to exclude the impact of incremental strategic capital investments that were
approved by the Board after the applicable cash flow generation performance measures were established for the Cash
Flow PSUs granted in 2022. The MD&C Committee also anticipates a corresponding exclusion of the benefits resulting
from such incremental strategic capital expenditures that were not anticipated when the performance measures were
established. The MD&C Committee believes that these exclusions are supportive of positive actions by management to
advance sustainable growth.
2024 Proxy Statement | 35
EXECUTIVE COMPENSATION
The MD&C Committee has approved an annual cash incentive program for 2024 with the same performance measures
and weighting as the 2023 annual cash incentive program. The MD&C Committee has also approved continued use of a
sustainability modifier applicable to this program and has increased the weighting of the sustainability modifier. Annual
cash incentive payouts to executive officers for 2024 may be increased, or decreased, up to 10% depending on
achievement calculated using the 2024 sustainability scorecard. The 2024 sustainability scorecard contains quantifiable
performance measures in the areas of safety; employee engagement; circularity and climate. The MD&C Committee
believes that these performance measures align with the Company’s commitments and values, sustainability growth
strategy and 2030 goals presented in the Company’s Sustainability Report.
Our Compensation Philosophy for Named Executive Officers
The Company’s compensation philosophy is designed to:
• Attract and retain exceptional employees through competitive compensation opportunities;
• Encourage and reward performance through substantial at-risk performance-based compensation, while
discouraging excessive risk-taking behavior; and
• Align our decision makers’ long-term interests with those of our stockholders through emphasis on equity
ownership.
Additionally, our compensation philosophy is intended to encourage executives to embrace the Company’s strategy and
to lead the Company in setting aspirations that will continue to drive exemplary performance.
With respect to our named executive officers, the MD&C Committee believes that total direct compensation at target
should generally be in a range around the competitive median according to the following:
• Base salaries should be paid within a range of plus or minus 10% around the competitive median, with attention
given to individual circumstances, including strategic importance of the named executive’s role, the executive’s
experience and individual performance;
• Target short-term and long-term incentive opportunities should generally be set at the competitive median; and
• Total direct compensation opportunities should generally be within a range of plus or minus 20% around the
competitive median.
36 |
2024 Proxy Statement
Overview of Elements of Our 2023 Executive Compensation Program
EXECUTIVE COMPENSATION
Purpose
Key Features
To attract and retain
executives with a competitive
level of regular income
Adjustments to base salary primarily consider competitive
market data and the executive’s tenure, individual
performance and responsibilities.
Timing
Current
Short-Term
Performance
Incentive
Component
Base Salary
Annual Cash
Incentive
To encourage and reward
contributions to our annual
financial objectives through
performance-based
compensation subject to
challenging, yet attainable,
objective and transparent
metrics
Cash incentives are targeted at a percentage of base salary
and range from zero to 200% of target based on the following
performance measures:
• Operating EBITDA — designed to encourage balanced
growth and profitability and assess the financial outcome
from execution of strategic priorities (weighted 50%);
• Income from Operations Margin — designed to motivate
pursuit of high margin revenue growth while also
controlling costs and operating efficiently (weighted 25%);
and
• Internal Revenue Growth — targeted at executing on pricing
strategy and appropriate volume growth aligned with
strategic growth goals (weighted 25%).
Payouts of cash incentives based on the performance
measures above can be increased or decreased by up to 5%,
depending on achievement calculated using the sustainability
scorecard.
The MD&C Committee has discretion to increase or decrease
an individual’s cash incentive payment by up to 25% based on
individual performance, but such modifier has never been
used to increase a payment to a named executive.
Number of shares delivered range from zero to 200% of the
initial target grant based on performance over a three-year
performance period.
Payout on half of each executive’s PSUs granted in 2023 is
dependent on cash flow generation, defined as net cash flow
provided by operating activities, less capital expenditures,
with certain exclusions, which continues our focus on capital
discipline, while also aligning the Company with stockholders’
free cash flow expectations. We refer to these as Cash Flow
PSUs.
Payout on the remaining half of the PSUs granted in 2023 is
dependent on total shareholder return relative to other
companies in the S&P 500 over the three-year performance
period. We refer to these as TSR PSUs.
PSUs earn dividend equivalents that are paid at the end of the
performance period based on the number of shares earned.
Recipients can defer the receipt of shares, in which case such
shares of Common Stock will be paid out, without interest, at
the end of the deferral period.
Stock options granted in 2023 vest ratably in three annual
increments, beginning on the first anniversary of the date of
grant.
The option exercise price is the average of the high and low
market price of our Common Stock on the date of grant.
Stock options have a term of 10 years.
RSUs are not routinely an element of executive compensation,
but grants are made in certain circumstances, including in
recognition of significant promotions and contributions.
RSUs typically vest in full three years after the date of grant.
Time-based vesting aids retention. Dividend equivalents on
RSUs accrue and are paid in cash upon vesting.
2024 Proxy Statement | 37
Long-Term
Performance
Incentives
Performance Share
Units
To encourage and reward
building long-term stockholder
value through successful
strategy execution;
To retain executives; and
To increase stockholder
alignment through executives’
stock ownership
Stock Options
Restricted Stock
Units (“RSUs”)
To support the growth element
of the Company’s strategy and
encourage and reward stock
price appreciation over the
long-term;
To retain executives; and
To increase stockholder
alignment through executives’
stock ownership
Used on a limited basis (e.g.
promotion, new hire, special
recognition) to make awards
that encourage and reward
long-term performance and
increase alignment with
stockholders
EXECUTIVE COMPENSATION
Deferral Plan. Each of our named executive officers is eligible to participate in our 409A Deferral Plan and may elect to
defer receipt of portions of their base salary and cash incentives in excess of the annual compensation threshold
established under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “IRC”). We believe that
providing a program that allows and encourages planning for retirement is a key factor in our ability to attract and retain
talent. Additional details on the 409A Deferral Plan can be found in the Nonqualified Deferred Compensation in 2023
table and accompanying disclosure.
Perquisites. The Company provides very limited perquisites or personal benefits to executive officers, including cost to
the Company for guest participation in corporate events and use of Company aircraft for personal travel. The MD&C
Committee permits our President and Chief Executive Officer to use the Company’s aircraft for business and personal
travel; provided, however, that personal use of the Company aircraft attributed to him that results in incremental cost to
the Company shall not exceed 90 hours during any calendar year without approval from the Chair of the MD&C Committee.
In 2023, our President and Chief Executive Officer had 13 hours of personal use of Company aircraft under this standard.
Personal use of the Company’s aircraft by other employees resulting in incremental cost to the Company is permitted
with Chief Executive Officer approval, although this does not occur frequently. The value of our named executives’
personal use of the Company’s aircraft is treated as taxable income to the respective executive in accordance with IRS
regulations using the Standard Industry Fare Level formula. This is a different amount than we calculate pursuant to the
SEC requirement to report the incremental cost to us of their use. See note (4) to the Summary Compensation Table
below for additional information about this calculation.
Post-Employment and Change in Control Compensation. The Company provides severance protections that aid in retention
of senior leadership by providing the individual with comfort that he or she will be treated fairly in the event of an
involuntary termination not for cause. The change in control provisions included in our Executive Severance Protection
Plan, our stock option award documentation and, if applicable, employment agreements require a double trigger in order
to receive any payment in the event of a change in control situation. Additional details can be found under “— Post
Employment and Change in Control Compensation; Clawback Policies” and “Potential Payments Upon Termination or
Change in Control.”
How Named Executive Officer Compensation Decisions are Made
The MD&C Committee meets several times each year to perform its responsibilities as delegated by the Board of Directors
and as set forth in the MD&C Committee’s charter. These responsibilities include evaluating and approving the Company’s
compensation philosophy, policies, plans and programs for our named executive officers. In the performance of its
duties, the MD&C Committee regularly reviews the total compensation, including the base salary, target annual cash
incentive award opportunities, long-term incentive award opportunities and other benefits, including potential severance
payments for each of our named executive officers. At regularly scheduled meetings each year, the MD&C Committee
reviews our named executives’ total compensation and compares that compensation to the competitive market, as
discussed below. In the first quarter of each year, the MD&C Committee meets to determine salary increases, if any, for
the named executive officers; verifies the results of the Company’s performance for annual cash incentive and PSU
payouts; determines the performance measures and individual annual cash incentive targets for the current year as
a percent of base salary for each of the named executive officers; and makes decisions on the design and grants of
long-term equity awards.
Compensation Consultant. The MD&C Committee uses several resources in its analysis of the appropriate compensation
for the named executive officers. The MD&C Committee selects and employs an independent consultant to provide advice
relating to market and general compensation trends. The MD&C Committee also uses the services of its independent
consultant for data gathering and analyses. The MD&C Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”)
as its independent consultant since 2002. The Company makes regular payments to FW Cook for its services around
executive compensation, including meeting preparation and attendance, advice, and best practice information, as well as
competitive data. Information about such payments is submitted to the Chair of the MD&C Committee.
In addition to services related to executive compensation, FW Cook also provides the MD&C Committee information and
advice with respect to compensation of the non-employee directors. FW Cook has no other business relationships with
the Company and receives no other payments from the Company. The MD&C Committee adopted a charter provision
requiring that it consider the independence of any compensation consultants it uses for executive compensation matters.
The MD&C Committee has considered the independence of FW Cook in light of SEC rules and New York Stock Exchange
38 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
listing standards. In connection with this process, the MD&C Committee has reviewed, among other items, a letter from
FW Cook addressing the independence of FW Cook and the members of the consulting team serving the MD&C Committee,
including the following factors: (a) other services provided to us by FW Cook; (b) fees paid by us as a percentage of FW
Cook’s total revenue; (c) policies or procedures of FW Cook that are designed to prevent conflicts of interest; (d) any
business or personal relationships between the senior advisor of the consulting team with a member of the MD&C
Committee; (e) any Company stock owned by the senior advisor or any member of his immediate family and (f) any
business or personal relationships between our executive officers and the senior advisor. The MD&C Committee reviewed
these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the
engagement did not raise any conflict of interest.
Role of our CEO and our Human Resources Organization. Our President and Chief Executive Officer contributes to
compensation determinations by assessing the performance of the other named executive officers and providing these
assessments with recommendations to the MD&C Committee. Personnel within the Company’s Human Resources
organization assist the MD&C Committee by working with the independent consultant to provide information requested
by the MD&C Committee and assisting it in designing and administering the Company’s compensation programs.
Peer Company Comparisons. The MD&C Committee uses compensation information of comparison groups of companies
to gauge the competitive market, which is relevant for attracting and retaining key talent and for ensuring that the
Company’s compensation practices are aligned with prevalent practices. For purposes of establishing the 2023 executive
compensation program, the MD&C Committee considered a competitive analysis of total direct compensation levels and
compensation mix for our executive officers during the second half of 2022, using information from:
• Size-adjusted median compensation data from two general industry surveys in which management annually
participates; the 2021 Aon Radford Global Compensation Executive Data (as the 2022 Aon Radford Global
Compensation Executive Data was not yet available) and the Willis Towers Watson 2022 Executive Compensation
Database Survey. The 2021 Aon Radford Global Compensation Executive Data included 1,109 organizations
ranging in size from less than $10 million to $560 billion in annual revenue, and the 2022 Willis Towers Watson
Executive Compensation Database Survey included 797 organizations ranging in size from approximately
$20 million to $575 billion in annual revenue. Data selected from these surveys is scoped based on Company
revenue; and
• Median compensation data from a comparison group of 20 publicly traded U.S. companies, described below.
The comparison group of companies is initially recommended by the independent consultant prior to the data gathering
process, with input from management and the MD&C Committee. The composition of the group is evaluated, and a final
comparison group of companies is approved by the MD&C Committee each year. The selection process for the comparison
group begins with all companies in the Standard & Poor’s North American database that are publicly traded U.S.
companies in 15 different Global Industry Classifications. These industry classifications are meant to provide a collection
of companies in industries that share similar characteristics with us. The companies are then limited to those with at
least $5 billion in annual revenue to ensure appropriate comparisons, and further narrowed by choosing those with
asset intensive domestic operations, as well as those focusing on transportation and logistics. Companies with these
characteristics are chosen because the MD&C Committee believes that it is appropriate to compare our executives’
compensation with executives that have similar responsibilities and challenges at other companies.
The following chart sets forth various size comparisons to companies in the comparison group; this table is provided to
evidence that the Company was appropriately positioned within its peer group for purposes of developing 2023
compensation recommendations during 2022. All financial and market data are taken from Standard & Poor’s Capital IQ,
with financial data as of each company’s 2021 fiscal year end and market capitalization as of December 31, 2021.
2024 Proxy Statement | 39
EXECUTIVE COMPENSATION
Peer Company Comparison Group
Net Revenue
Operating Income
Total Assets
Total Equity
Total Employees
Market Capitalization
WM Composite Percentile Rank
44%
37%
64%
61%
76%
70%
59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
20 Company Comparison Group
American Electric Power
Halliburton
Southwest Airlines
Avis Budget
NextEra Energy
Sysco
C.H. Robinson WW
Norfolk Southern
Union Pacific
CSX
Entergy
FedEx
Grainger (WW)
Republic Services
UPS
Ryder System
Schlumberger
Southern
Waste Connections
XPO
For purposes of each of the named executives, the general industry data and the comparison group data are blended
when composing the competitive analysis, when possible, such that the combined general industry data and the
comparison group are each weighted 50%. For competitive comparisons, the MD&C Committee has determined that total
direct compensation packages for our named executive officers within a range of plus or minus 20% of the median total
compensation of the competitive analysis is appropriate. In making these determinations, total direct compensation
consists of base salary, target annual cash incentive, and the annualized grant date fair value of long-term equity
incentive awards.
Allocation of Compensation Elements and Tally Sheets. The MD&C Committee considers the forms in which total
compensation will be paid to executive officers and seeks to achieve an appropriate balance between base salary, annual
cash incentive compensation and long-term incentive compensation. The MD&C Committee determines the size of each
element based primarily on comparison group data and individual and Company performance. The percentage of
compensation that is contingent on achievement of performance criteria typically increases in correlation to an executive
officer’s responsibilities within the Company, with performance-based incentive compensation making up a
greater percentage of total compensation for our most senior executive officers. Additionally, as an executive becomes
more senior, a greater percentage of the executive’s compensation shifts away from short-term to long-term incentive
awards.
The MD&C Committee uses tally sheets to review the compensation of our named executive officers, which show the
cumulative impact of all elements of compensation. These tally sheets include detailed information and dollar amounts
for each component of compensation, the value of all equity held by each named executive, and the value of welfare and
retirement benefits and severance payments. Tally sheets provide the MD&C Committee with the relevant information
necessary to determine whether the balance between short-term and long-term compensation, as well as fixed and
variable compensation, is consistent with the overall compensation philosophy of the Company. This information is also
useful in the MD&C Committee’s analysis of whether total direct compensation provides a compensation package that is
appropriate and competitive. Tally sheets are provided annually to the full Board of Directors.
The following charts display the allocation of total 2023 target compensation among base salary, annual cash incentive
and annual long-term equity awards for (a) our President and Chief Executive Officer and (b) our other named executives,
on average. These charts depict the MD&C Committee’s 2023 desired total mix of target compensation for named
executives and reflect that a substantial majority of executive compensation is linked to Company performance, through
annual cash incentive performance criteria and long-term equity-based incentive awards. We consider stock options
40 |
2024 Proxy Statement
granted under our long-term incentive plan to be performance-based because their value will increase as the market
value of our Common Stock increases.
President and CEO
Other Named Executives, on Average
EXECUTIVE COMPENSATION
10%
Base Salary
17%
Annual Cash
Incentive
73%
Long-Term
Equity Awards
61%
Long-Term
Equity Awards
20%
Base Salary
19%
Annual Cash
Incentive
90% Total Performance Based
80% Total Performance Based
Internal Pay Equity. The MD&C Committee considers the differentials between compensation of the named executive
officers. The MD&C Committee also reviews compensation comparisons between our President and Chief Executive
Officer and the other executive officers, while recognizing the additional responsibilities of our President and Chief
Executive Officer and that such differentials will increase in periods of above-target performance and decrease in times
of below-target performance. Based on these considerations, the MD&C Committee concluded that the compensation
paid to our President and Chief Executive Officer is reasonable compared to that of the other executive officers.
Tax and Accounting Matters. Following the revision of Section 162(m) of the IRC in 2017, the Company generally may no
longer take a deduction for any compensation paid to any of its named executive officers in excess of $1 million.
Section 409A of the IRC (“Code Section 409A”) generally provides that any deferred compensation arrangement that does
not meet specific requirements will result in immediate taxation of any amounts deferred to the extent not subject to a
substantial risk of forfeiture. In general, to avoid a Code Section 409A violation, amounts deferred may only be paid out on
separation from service, disability, death, a specified time or fixed schedule, a change in control or an unforeseen
emergency. Furthermore, the election to defer generally must be made in the calendar year prior to performance of
services. We intend to structure all of our compensation arrangements, including our 409A Deferral Plan, in a manner
that complies with or is exempt from Code Section 409A.
We account for equity-based payments, including stock options, PSUs and RSUs, in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“ASC Topic 718”). The MD&C
Committee takes into consideration the accounting treatment under ASC Topic 718 when determining the form and
amount of annual long-term equity incentive awards. However, because our long-term equity incentive awards are based
on a target dollar value established prior to grant (described in further detail under “Named Executives’ 2023
Compensation Program and Results — Long-Term Equity Incentives”), this target dollar value will differ from the grant
date fair value of awards calculated pursuant to ASC Topic 718 and reported in the Summary Compensation Table.
Risk Assessment. The MD&C Committee uses the structural elements set forth in the Executive Summary earlier to
establish compensation that will provide sufficient incentives for named executive officers to drive results while avoiding
unnecessary or excessive risk taking that could harm the long-term value of the Company. During 2023, the MD&C
Committee reviewed the Company’s compensation policies and practices and the assessment and analysis of related
risk conducted by the independent compensation consultant. Based on this review and analysis, the MD&C Committee
and the independent compensation consultant concluded that our compensation policies and practices do not create
risks that are reasonably likely to have a material adverse effect on the Company.
In 2014, the MD&C Committee adopted a policy on calculation adjustments that affect
Policy on Calculation Adjustments.
payouts under annual and long-term incentive awards in order to address the potentially distorting effect of certain
items. Such adjustments are intended to align award payments with the underlying performance of the business; avoid
volatile, artificial inflation or deflation of awards due to unusual items in either the award year or the previous comparator
year; and eliminate counterproductive incentives to pursue short-term gains and protect current incentive opportunities.
To ensure the integrity of the adjustments, the policy provides that the MD&C Committee’s approach to adjustments shall
generally be consistent with the Company’s approach to reporting adjusted non-GAAP earnings to the investment
2024 Proxy Statement | 41
EXECUTIVE COMPENSATION
community, except that the MD&C Committee has determined that potential adjustments arising from a single transaction
or event generally should be disregarded unless, taken together, they change the calculated award payout by at least 5%.
For this reason, actual results reported in this Proxy Statement on financial performance measures may differ from
earnings results reported to the investment community. The MD&C Committee retains discretion to evaluate all
adjustments, both income and expense, as circumstances warrant; however, the MD&C Committee has agreed that it will
not have the ability to use negative discretion with respect to the calculation of cash flow for purposes of the Cash Flow
PSUs, in order to avoid variable accounting treatment for those awards.
Named Executives’ 2023 Compensation Program and Results
Base Salary
The MD&C Committee approved increases to the 2023 base salaries of named executive officers, consistent with our
compensation philosophy and driven by competitive market data, internal pay equity considerations and individual
performance relative to the executive’s responsibilities and contributions. The table below shows the 2023 annual base
salary established by the MD&C Committee for each of our named executive officers.
Named Executive Officer
Mr. Fish
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Annual Cash Incentive
2023 Base Salary
$1,400,000
$ 767,600
$ 784,000
$ 645,200
$ 668,700
• Annual cash incentives were dependent on the following performance measures: Operating EBITDA; Income from
Operations Margin and Internal Revenue Growth.
• Payouts of cash incentives based on the performance measures could be increased or decreased by up to 5%,
depending on achievement calculated using the 2023 sustainability scorecard.
• Blended results on the performance measures yielded an annual cash incentive payment for 2023 equal to 117.85% of
target, which was then increased by 2% on account of the sustainability modifier, yielding a final payout of 120.21%.
The MD&C Committee develops financial performance measures for annual cash incentive awards to drive improvements
in business operations, as well as support and fund the long-term strategy of the Company. The MD&C Committee has
found that the Operating EBITDA measure encourages balanced focus on growth and profitability. Our Income from
Operations Margin performance measure encourages responsible, high margin revenue growth and cost management
and reduction. The Internal Revenue Growth performance measure supports the Company’s strategic growth and
creation of shareholder value. The MD&C Committee believes these financial performance measures supported and
aligned with the strategy of the Company in 2023, are reflective of the Company’s overall performance, and are
appropriate indicators of our progress toward the Company’s goals. See “2023 Compensation Program Results and
Company Performance” in the Executive Summary above for further discussion and definitions of the annual cash
incentive performance measures.
When setting threshold, target and maximum performance measure levels each year, the MD&C Committee looks to the
Company’s historical results of operations and analyses and forecasts for the coming year. Specifically, the MD&C
Committee considers pricing and volume trends, operational factors, and macroeconomic conditions, such as the recent
inflationary cost pressures. When setting the 2023 performance levels, the MD&C Committee defined the 2023 annual
cash incentive awards to exclude the impacts of our recycling brokerage business. While the relatively small and
traditionally lower-margin recycling brokerage business is additive to our overall customer value proposition, it can have
a distorting effect on results, due in part to commodity price volatility. The table below details the performance measures
set by the MD&C Committee for purposes of the named executive officers’ annual cash incentive for 2023.
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2024 Proxy Statement
Operating EBITDA
Income from Operations Margin
Internal Revenue Growth
EXECUTIVE COMPENSATION
Threshold
Performance
(60% Payment)
Target
Performance
(100% Payment)
Maximum
Performance
(200% Payment)
$5.60 billion
17.3%
4.0%
$5.90 billion
18.8%
5.4%
$6.20 billion
20.3%
6.8%
The following table sets forth the Company’s performance achieved on each of the annual cash incentive performance
measures and the payout earned on account of such performance.
Operating EBITDA
(weighted 50%)
Income from
Operations Margin
(weighted 25%)
Internal Revenue
Growth
(weighted 25%)
Actual
Payout
Earned
Actual
Payout
Earned
Actual
Payout
Earned
Total
Payout Earned
(as a percentage
of Target)
$5.892 billion
98.98%
19.30%
133.46%
5.96%
139.99%
117.85%
For purposes of the Internal Revenue Growth performance measure target and calculation of results, the Company
excluded benefits from Hurricane Ian and prior period recycling rebates, which collectively reduced Internal Revenue
Growth performance by 0.18%.
Sustainability Modifier to Annual Cash Incentive Awards.
In 2023, the MD&C Committee incorporated a sustainability
modifier into the annual cash incentive program. As a result, annual cash incentive payouts to executive officers for 2023
were eligible to be increased, or decreased, up to 5% depending on achievement calculated using the sustainability
scorecard. Results achieved on each of the four performance measures, and corresponding points earned on a scale of
one-to-five, are reported below. The Company earned 13 total points on the 2023 sustainability scorecard, which
correlates to a 2% increase to the annual cash incentive payment for 2023 otherwise earned.
2023 Sustainability Modifier Performance Measures
Safety
Implement serious injury and fatality avoidance program and
Advanced Driver Assistance Systems in model year 2023
collection vehicles
Improve frontline turnover in diverse populations (year-over-year)
D&I
Circularity Increase tons recovered in recycling business (year-over-year)
Climate
Increase recovery of landfill gas for beneficial use (year-over-year)
Sustainability Scorecard
Range Achieved
Corresponding
Sustainability
Scorecard Rating
(1-to-5 Point Scale)
75-99%
3% to 4% improvement
9.1 to 9.4 million
2% to 3% decline
4
3
4
2
2023 Sustainability Modifier: Point Scale
Modification to Annual Cash
Incentive Payout
Total Points Earned
-5%
-4%
-3%
-2%
-1%
0
+1%
+2%
+3%
+4%
+5%
4
5
6
7
8
9-10
11-12
13-14
15-16
17-18
19-20
The MD&C Committee believes that the quantifiable performance measures for 2023, focusing on the areas of safety,
D&I, circularity and climate, aligned well with the Company’s commitments and values, sustainability growth strategy
and 2030 goals presented in the Company’s Sustainability Report.
Annual Cash Incentive Payout for 2023. Target annual cash incentives are a specified percentage of the executives’ base
salary. The following table shows each named executive’s target percentage of base salary for 2023 and each named
executive’s total annual cash incentive for 2023 paid in March 2024.
2024 Proxy Statement | 43
EXECUTIVE COMPENSATION
Named Executive Officer
Mr. Fish(2)
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Target Percentage
of Base Salary
Annual Cash Incentive
For 2023(1)
158
100
110
90
90
$2,638,116
$ 915,228
$1,028,241
$ 686,538
$ 717,576
(1) Calculations of annual cash incentive payouts, as a percentage of base salary, were made using the named
executive’s actual base salary received in 2023. Such amounts are lower than if calculated using the 2023
base salaries in the table above due to the timing of when base salary increases take effect.
(2)
In March 2023, the target percentage of base salary for Mr. Fish was increased from 150% to 160%, yielding
a 158% target percentage of base salary for the full year of 2023.
Long-Term Equity Incentives
Our equity awards are designed to hold individuals accountable for long-term decisions by rewarding the success of
those decisions. The MD&C Committee continuously evaluates the components of its programs. In determining which
forms of equity compensation are appropriate, the MD&C Committee considers whether the awards granted are achieving
their purpose; the competitive market; and accounting, tax or other regulatory issues, among others. In determining the
appropriate awards for the named executives’ 2023 annual long-term incentive award, the MD&C Committee decided to
grant both PSUs comprising 80% of each named executive’s award and stock options comprising 20% of each named
executive’s award, consistent with prior years. Half of each named executives’ PSUs granted in 2023 are Cash Flow PSUs
and the remaining half are TSR PSUs. Meanwhile, stock options encourage focus on increasing the market value of our
stock. Before determining the actual number of PSUs and stock options that were granted to each of the named
executives in 2023, the MD&C Committee established a target dollar amount for each named executive’s annual total
long-term equity incentive award. The values chosen were based primarily on the comparison information for the
competitive market and consideration of the named executives’ responsibility for meeting the Company’s strategic
objectives. Target dollar amounts for equity incentive awards will vary from grant date fair values calculated for
accounting purposes.
Named Executive Officer
Mr. Fish
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Overview of Performance Share Units.
Dollar Values of 2023
Long-Term Equity Incentives
Set by the Committee
(at Target)
$9,750,000
$2,300,000
$2,700,000
$2,000,000
$1,800,000
• Named executives were granted new PSUs with a three-year performance period ending December 31, 2025. Half of
each named executive’s PSUs granted in 2023 are Cash Flow PSUs and the remaining half are TSR PSUs.
• Named executives received a payout of 200% of the PSUs granted in 2021 with a three-year performance period ended
December 31, 2023. The Company exceeded the maximum level of performance for the Cash Flow PSUs and the TSR
PSUs.
PSUs Granted in 2023. Performance share units are granted to our named executive officers annually to align
compensation with the achievement of our long-term financial goals and to increase stockholder alignment through
stock ownership. PSUs provide an immediate retention benefit to the Company because there is unvested potential value
at the date of grant. The number of PSUs granted to our named executive officers corresponds to an equal number of
shares of Common Stock. At the end of the three-year performance period for each grant, the Company will deliver a
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2024 Proxy Statement
number of shares ranging from 0% to 200% of the initial number of PSUs granted, depending on the Company’s three-
year performance against pre-established targets.
The MD&C Committee determined the number of PSUs that were granted to each of the named executives in 2023 by
taking the targeted dollar amounts established for total long-term equity incentives (set forth in the table above) and
multiplying by 80%. Those values were then divided by the average of the high and low market price of our Common
Stock over the 30 trading days preceding the grant date to determine the number of PSUs granted. The number of PSUs
granted in 2023 are shown in the table below.
EXECUTIVE COMPENSATION
Named Executive Officer
Mr. Fish
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Number
of PSUs
51,316
12,106
14,210
10,526
9,474
Half of each named executive’s PSUs included in the table above are Cash Flow PSUs; the cash flow generation
performance measure requires focus on capital discipline and strengthens alignment with stockholders’ free cash flow
expectations. For purposes of these PSUs, we define cash flow as net cash provided by operating activities, less capital
expenditures, with the following adjustments: (a) costs associated with labor disruptions and multiemployer plan
withdrawal liabilities are excluded due to being required as a result of past labor commitments combined with changing
economic conditions and business climate; (b) strategic acquisition, restructuring, and transformation and reorganization
costs are excluded; (c) cash proceeds from strategic divestitures of assets and businesses are excluded; and (d) cash
proceeds from divestitures of any other businesses and assets are included (the “Cash Flow PSU Definition”). The table
below shows the required achievement of the cash flow generation performance measure and the corresponding
potential payouts under our Cash Flow PSUs granted in 2023.
Threshold
Target
Maximum
Performance
Payout
Performance
Payout
Performance
Payout
Cash Flow
$6.60 billion
50% $7.30 billion
100% $8.0 billion
200%
The remaining half of each named executive’s PSUs are TSR PSUs. This measure directly correlates executive
compensation with creation of stockholder value. Total shareholder return is calculated as follows: (Common Stock price
at end of performance period — Common Stock price at beginning of performance period + dividends during performance
period) / Common Stock price at beginning of performance period. The table below shows the required achievement of
the total shareholder return performance measure and the corresponding potential payouts under our TSR PSUs granted
in 2023.
Total Shareholder Return Relative to the S&P 500
Performance
75th percentile (Maximum)
50th percentile (Target)
25th percentile (Threshold)
Payout
200%
100%
50%
The different performance measure levels are determined based on an analysis of historical performance and current
projections and trends. The MD&C Committee uses this analysis and consideration of different scenarios related to items
that affect the Company’s performance such as yield, volumes and capital to set the performance measures. As with the
consideration of targets for the annual cash incentives, when the MD&C Committee established the cash flow targets, the
MD&C Committee carefully considered several material factors anticipated to affect the Company in 2023 and beyond,
including macroeconomic and market conditions and economic indicators for future periods, to align the cash flow
targets with the Company’s long-range strategic plan. The 2023 cash flow targets are also reflective of planned increases
in capital spending to accelerate our sustainability growth strategy.
2024 Proxy Statement | 45
EXECUTIVE COMPENSATION
Payout on PSUs for the Performance Period Ended December 31, 2023. Half of the PSUs granted in 2021 with the
performance period ended December 31, 2023 were TSR PSUs, and the remaining half of the PSUs granted in 2021 were
Cash Flow PSUs. With respect to the TSR PSUs with a three-year performance period ended December 31, 2023, the
performance of the Company’s Common Stock on this measure translated into a percentile rank relative to the S&P 500
of 77.27%, resulting in a maximum 200% payout in shares of Common Stock that were issued in February 2024.
For purposes of the Cash Flow PSUs with a three-year performance period ended December 31, 2023, the Company
generated net cash flow from operating activities, less capital expenditures, of $7.789 billion, exceeding the target criteria
of $7.032 billion and the maximum criteria of $7.50 billion; this performance level yielded a 200% payout in shares of
Common Stock that were issued in February 2024. This performance was calculated in accordance with the Cash Flow
PSU Definition above. Additionally, in line with the MD&C Committee’s policy on calculation adjustments discussed above,
the MD&C Committee approved an adjustment to the measurement of performance on the cash flow measure to exclude
the impact of $1.325 billion of capital expenditures allocated to strategic investments in recycling and renewable energy
that were not contemplated at the time the performance measures were established. These strategic investments did
not have a material impact on any of the other 2023 executive compensation performance measures.
Stock Options. The MD&C Committee believes use of stock options is appropriate to support the growth element of the
Company’s strategy. The grant of options made to the named executive officers in the first quarter of 2022 in connection
with the annual grant of long-term equity awards was based on the targeted dollar amounts established for total
long-term equity incentives (set forth in the table above) and multiplied by 20%. The actual number of stock options
granted was determined by assigning a value to the options using an option pricing model and dividing the dollar value of
target compensation by the value of an option. The resulting number of stock options are shown in the table below.
Named Executive Officer
Mr. Fish
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Number
of Options
59,415
14,016
16,453
12,188
10,969
The stock options granted in 2023 vest ratably in three annual increments, beginning on the first anniversary of the date
of grant. The exercise price of the options granted in 2023 is $150.115, which is the average of the high and low market
price of our Common Stock on the date of grant, and the options have a term of 10 years. We account for our employee
stock options under ASC Topic 718 using a Black-Scholes valuation model to measure stock option expense at the date
of grant. The fair value of the stock options at the date of grant is amortized to expense over the vesting period less
expected forfeitures, except for stock options granted to retirement-eligible employees, for which expense is accelerated
over the period that the recipient becomes retirement-eligible.
Restricted Stock Units. The Company did not grant any RSUs to the named executives in 2023. Each of the named
executives, other than Mr. Fish, holds outstanding RSUs that were granted in 2022 in connection with achievement of
targeted synergies from the Company’s 2020 acquisition of Advanced Disposal Services, Inc. Mr. Carrasco also had RSUs
vest in 2023, and will have RSUs vest in 2024, that were granted prior to his promotion to the senior leadership team.
RSUs vest in full on the third anniversary of the date of grant. Dividends on the RSUs will accrue and be paid in cash upon
vesting. The RSUs may not be voted or sold until vested. Unvested RSUs are subject to forfeiture in the event of voluntary
or for-cause termination. RSUs will be prorated upon involuntary termination other than for cause, and RSUs immediately
vest in the event of an employee’s death or disability.
The MD&C Committee anticipates that grants of RSUs to named executives will continue to be made on a limited basis in
cases such as a significant promotion, increased responsibilities, special recognition and to attract new hires, and that
RSUs will not be a routine component of named executive compensation.
46 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
Post-Employment and Change in Control Compensation; Clawback Policies
Severance Protection Plan.
In December 2017, we adopted an Executive Severance Protection Plan (the “Severance
Protection Plan”) and each of Messrs. Fish and Morris and Ms. Rankin entered into new or amended and restated
employment agreements (the “2017 Employment Agreements”). The Severance Protection Plan covers each of our
executive officers. The 2017 Employment Agreements do not contain separate severance entitlements, but instead
provide for additional terms and protections relating to the respective executive’s participation in the Severance
Protection Plan. The 2017 Employment Agreements served to transition the Company’s severance protections away
from contract-based protections and onto a standardized and flexible plan-based approach. Going forward, the Company
does not anticipate entering into new employment agreements with our executive officers, and neither Mr. Carrasco nor
Ms. Hemmer is a party to an employment agreement with the Company.
Post-Employment Covenants and Clawback Policies. The 2017 Employment Agreements contain noncompetition and
nonsolicitation restrictions that apply during employment and for a two-year period following termination. Additionally,
the Severance Protection Plan contains (a) a requirement that the individual execute a general release prior to receiving
post-termination benefits and (b) a clawback feature that allows for the suspension and refund of termination benefits
for subsequently discovered cause. The clawback feature generally allows the Company to cancel any remaining
payments due and obligates the named executive to refund to the Company severance payments already made if, within
one year of termination of employment of the named executive by the Company for any reason other than for cause, the
Company determines that the named executive could have been terminated for cause.
Our current equity award agreements also include a requirement that, in order to be eligible to vest in any portion of the
award, the employee must enter into an agreement containing restrictive covenants applicable to the employee’s
behavior following termination. Additionally, our equity award agreements include compensation clawback provisions
that provide, if the MD&C Committee determines that an employee either engaged in or benefited from misconduct, then
the employee will refund any amounts received under the equity award agreements. Misconduct generally includes any
act or failure to act that caused or was intended to cause a violation of the Company’s policies, generally accepted
accounting principles or applicable laws and that materially increased the value of the equity award. Further, our MD&C
Committee has adopted a clawback policy applicable to our annual cash incentive awards that is designed to recoup
annual cash incentive payments when the recipient’s personal misconduct affects the payout calculations for the awards.
Clawback terms applicable to our incentive awards allow recovery within the earlier to occur of one year after discovery
of misconduct and the second anniversary of the employee’s termination of employment.
In 2023, the MD&C Committee adopted the executive compensation clawback policy mandated by the New York Stock
Exchange, which is accessible through the Exhibit List to the Company’s Annual Report on Form 10-K. This clawback
policy provides for the recovery of erroneously awarded incentive-based compensation received by current and former
executive officers in connection with a financial restatement, regardless of fault or misconduct. No obligation has arisen
to recover executive compensation pursuant to this policy.
Other Compensation Policies and Practices
Compensation Limitation Policies. The Company has adopted a Severance Limitation Policy that generally provides that
the Company may not enter into severance arrangements with its executive officers that provide for benefits, less the
value of vested equity awards and benefits provided to employees generally, in an amount that exceeds 2.99 times the
executive officer’s then current base salary and target annual cash incentive, unless such future severance arrangement
receives stockholder approval. The Company has also adopted its Policy Limiting Certain Compensation Practices, which
generally provides that the Company will not enter into compensation arrangements that would obligate the Company to
pay a death benefit or gross-up payment to an executive officer unless such arrangement receives stockholder approval.
Both of these compensation limitation policies are subject to certain exceptions, including benefits generally available to
management-level employees and any payment in reasonable settlement of a legal claim. Additionally, “Death Benefits”
under the policy does not include deferred compensation, retirement benefits or accelerated vesting or continuation of
equity-based awards pursuant to generally-applicable equity award plan provisions. None of our executive officers are
party to any employment agreement or arrangement with the Company that provides for severance, gross-up or death
benefits that exceed amounts permitted by these compensation limitation policies.
2024 Proxy Statement | 47
EXECUTIVE COMPENSATION
Stock Ownership Guidelines and Holding Requirements. All of our named executive officers are subject to stock ownership
guidelines. We instituted stock ownership guidelines because we believe that ownership of Company stock demonstrates
a commitment to, and confidence in, the Company’s long-term prospects and further aligns employees’ interests with
those of our stockholders. We believe that the requirement that these individuals maintain a portion of their individual
wealth in the form of Company stock deters actions that would not benefit stockholders generally. Although there is no
deadline set for senior executives to reach their ownership guidelines, the MD&C Committee monitors ownership levels
to confirm that executives are making sustained progress toward achievement of their ownership guidelines. Additionally,
our stock ownership guidelines contain holding requirements. Executives with a title of Senior Vice President or higher,
which includes all of our named executives, must hold 100% of all net shares acquired through the Company’s long-term
incentive plans until the individual’s ownership guideline is achieved. Once achieved, the requisite stock ownership level
must continue to be retained throughout the executive’s employment with the Company.
The MD&C Committee regularly reviews the ownership guidelines to ensure that the appropriate share ownership levels
are in place. Guidelines are expressed as a multiple of base salary and are calculated annually based on the average
closing price of our Common Stock for the 20 trading days preceding April 1. Each named executive’s ownership guideline
multiple of base salary and ownership multiple of base salary attained as of March 5, 2024, using the closing price of our
Common Stock on such date and base salaries in effect on December 31, 2023, are set forth below. Shares owned
outright, vested equity awards that have been deferred, Common Stock equivalents based on holdings in the Company’s
401(k) Retirement Savings Plan and phantom stock held in the Company’s 409A Deferral Plan count toward meeting the
ownership guidelines. Stock options, PSUs, RSUs and restricted stock, if any, do not count toward meeting the ownership
guidelines until they are vested or earned.
Mr. Fish
Ms. Rankin
Mr. Morris
Mr. Carrasco
Ms. Hemmer
Ownership
Guideline Multiple
of Base Salary
Ownership
Multiple of
Base Salary
Attained as of
March 5, 2024
6x
3x
3x
3x
3x
44x
16x
24x
4x
16x
As discussed under “Director and Officer Stock Ownership,” the MD&C Committee also establishes ownership guidelines
for the non-employee directors and performs regular reviews to ensure all non-employee directors are in compliance or
are showing sustained progress toward achievement of their ownership guideline.
Insider Trading; Prohibition of Hedging and Pledging Company Securities. The Company’s Insider Trading Policy prohibits
directors, executive officers and other “designated insiders” from engaging in most transactions involving the Company’s
Common Stock during periods, determined by the Company, that those individuals are most likely to be aware of material,
non-public information. Directors, executive officers and other designated insiders subject to stock ownership guidelines
must clear all their transactions in our Common Stock with the Company’s office of the Chief Legal Officer in advance.
Additionally, it is our policy that directors, executive officers and designated insiders are not permitted to hedge their
ownership of Company securities, including (a) trading in options, warrants, puts and calls or similar derivative
instruments on any security of the Company; (b) selling any security of the Company “short” and (c) purchasing any
financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or
otherwise engaging in transactions that are designed to or have the effect of offsetting any decrease in the market value
of any security of the Company granted as compensation or held, directly or indirectly, by the director, executive officer
or designated insider. The Company’s Insider Trading Policy also provides that directors and executive officers may not
pledge Company securities or hold Company securities in a margin account.
48 |
2024 Proxy Statement
EXECUTIVE COMPENSATION TABLES
We are required to present compensation information in the tabular format prescribed by the SEC. This format, including
the tables’ column headings, may be different from the way we describe or consider elements and components of
compensation internally. The Compensation Discussion and Analysis contains a discussion that should be read in
conjunction with these tables to gain a complete understanding of our executive compensation philosophy, programs
and decisions.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Year
James C. Fish, Jr.
President and Chief Executive Officer
2023
2022
2021
Devina A. Rankin
Executive Vice President and Chief Financial Officer
Salary
($)
Stock
Awards
($)(1)
Option
Awards
($)(2)
Non-Equity
Incentive Plan
Compensation
($)(3)
All Other
Compensation
($)(4)
Total
($)
1,388,461(5) 8,405,433 1,950,000
1,338,462(5) 8,023,256 1,750,011
1,294,231(5) 7,312,195 1,700,005
2,638,116
3,459,049
2,656,497
246,844
14,628,854
249,906
14,820,684
94,435
13,057,363
2023
2022
2021
760,792
1,982,933
460,005
915,228
730,288
3,008,095
439,988
1,258,404
700,671
1,806,413
420,003
958,821
95,142
98,980
56,094
4,214,100
5,535,755
3,942,002
John J. Morris, Jr.
Executive Vice President and Chief Operating Officer
2023
2022
2021
Rafael E. Carrasco
Senior Vice President — Enterprise Strategy
777,031
2,327,562
539,987
1,028,241
748,736
3,870,479
519,995
1,391,871
144,151
131,155
4,816,972
6,662,236
728,138
1,978,522
460,006
996,408
67,420
4,230,494
2023
633,592
1,724,132
400,010
686,538
16,036
3,460,308
Tara J. Hemmer
Senior Vice President and Chief Sustainability Officer
2023
2022
2021
662,769
1,551,818
360,003
630,506
2,302,032
339,992
585,868
1,462,439
339,998
717,576
978,476
721,549
102,639
3,394,805
70,648
45,601
4,321,654
3,155,455
(1) Amounts in this column represent the grant date fair value of PSUs granted to all named executives annually. The
grant date fair values were calculated in accordance with ASC Topic 718, as further described in Note 14 in the
Notes to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. The grant date fair value
of a TSR PSU granted in 2023, based on a multifactor Monte Carlo model, is $177.48, and because total shareholder
return is a market condition, projected achievement is embedded in the grant date fair value. The grant date fair
value of a Cash Flow PSU granted in 2023 is $150.115, which is the average of the high and low market price of our
Common Stock on the date of the grant, in accordance with our 2014 Stock Incentive Plan. The table below shows
(a) the aggregate grant date fair value of Cash Flow PSUs assuming target level of performance is achieved (this is
the amount included in the Stock Awards column in the Summary Compensation Table) and (b) the aggregate grant
date fair value of the same PSUs assuming the Company will reach the highest level of achievement for this
performance measure and maximum payouts will be earned.
2024 Proxy Statement | 49
EXECUTIVE COMPENSATION
James C. Fish, Jr.
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
Aggregate Grant Date
Fair Value of Cash
Flow PSUs
Assuming Target
Level of Performance
Achieved ($)
Aggregate Grant Date
Fair Value of Cash
Flow PSUs
Assuming Highest
Level of Performance
Achieved ($)
3,851,651
3,468,403
3,304,908
908,646
871,981
816,448
1,066,567
1,030,615
894,237
790,055
711,095
673,869
660,982
7,703,302
6,936,806
6,609,816
1,817,292
1,743,962
1,632,896
2,133,134
2,061,230
1,788,474
1,580,110
1,422,190
1,347,738
1,321,963
Year
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2023
2022
2021
(2) Amounts in this column represent the grant date fair value of stock options granted annually, in accordance with
ASC Topic 718. The grant date fair value of the options granted in 2023, calculated using a Black-Scholes option
pricing model, is $32.82 per option. See Note 14 in the Notes to the Consolidated Financial Statements in our 2023
Annual Report on Form 10-K for additional information.
(3) Amounts in this column represent cash incentive awards earned and paid based on the achievement of performance
criteria. See “Compensation Discussion and Analysis — Named Executive’s 2023 Compensation Program and
Results — Annual Cash Incentive” for additional information.
(4) The amounts included in “All Other Compensation” for 2023 are shown below (in dollars):
James C. Fish, Jr.
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
401(k) Plan
Matching
Contributions
409A Deferral
Plan Matching
Contributions
Life Insurance
Premiums
Perquisites and
Other Personal
Benefits(a)
14,850
14,850
14,850
14,850
14,850
191,240
78,835
82,751
—
59,006
2,467
1,457
1,497
1,186
1,280
38,287
—
45,053
—
27,503
(a) This column includes perquisites and personal benefits received by a named executive officer in 2023, to
the extent that the total incremental cost of such perquisites and personal benefits was at least $10,000,
consisting of (i) incremental cost for personal use of Company aircraft in the following amounts:
Mr. Fish — $34,930, Mr. Morris — $41,696 and Ms. Hemmer — $24,146 and (ii) $3,357 of income that was
imputed for the cost of the executive’s guest’s participation in Company events. Annually, we calculate an
hourly direct operating cost for Company aircraft using industry standard measurements of costs for fuel,
catering, telecommunications, maintenance, landing and hangar fees, flight plans and permits, and crew.
We then allocate incremental cost to the named executive based on the amount of aircraft time required
for the personal use, multiplied by the direct operating cost. When a deviation is made from business
travel to pick up or drop off the executive in another location for a personal purpose, we calculate the time
difference resulting from the flight plan deviation and multiply it by the direct operating cost. We also
allocate incremental cost to the named executive in the unusual event that a deadhead flight is required to
position the aircraft to serve personal needs. We own and operate our aircraft primarily for business use;
therefore, we do not include purchase costs or other fixed costs associated with our aircraft in the direct
operating cost.
(5)
Includes $100,000 of base salary in each of 2021 and 2022 and $200,000 of base salary in 2023 to which Mr. Fish
was entitled but voluntarily relinquished to fund scholarships and other programs that benefit Company employees.
50 |
2024 Proxy Statement
GRANT OF PLAN-BASED AWARDS IN 2023
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Grant Date
James C. Fish, Jr.
Cash Incentive 1,316,786 2,194,643 4,389,286
EXECUTIVE COMPENSATION
All other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)
All other
Option
Awards:
Number of
Securities
Underlying
Options(#)(3)
Exercise
or Base
Price of
Option
Awards
($/sh)(4)
Closing
Market
Price on
Date of
Grant
($/sh)
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(5)
3/7/23
3/7/23
25,658
51,316 102,632
59,415
8,405,433
150.115 149.40 1,950,000
Devina A. Rankin
Cash Incentive
456,826
761,377 1,522,754
3/7/23
3/7/23
6,053
12,106
24,212
14,016
150.115 149.40
John J. Morris, Jr.
Cash Incentive
513,235
855,392 1,710,784
3/7/23
3/7/23
7,105
14,210
28,420
16,453
150.115 149.40
Rafael E. Carrasco
Cash Incentive
342,678
571,130 1,142,260
3/7/23
3/7/23
Tara J. Hemmer
Cash Incentive
3/7/23
3/7/23
5,263 10,5266
21,052
12,188
150.115 149.40
358,170
596,950 1,193,900
4,737
9,474
18,948
10,969
150.115 149.40
1,982,933
460,005
2,327,562
539,987
1,724,132
400,010
1,551,818
360,003
(1) Actual payouts of cash incentive awards for 2023 performance are shown in the Summary Compensation Table
under “Non-Equity Incentive Plan Compensation.” The named executives’ possible annual cash incentive payouts
are calculated using a percentage of base salary approved by the MD&C Committee. The threshold levels represent
the amounts that would have been payable if the minimum performance criteria were met for each of the three
financial performance measures. The range of possible payouts does not incorporate the potential impact of the
sustainability modifier, pursuant to which cash incentive payouts were eligible to be increased, or decreased, up to
5% depending on achievement calculated using a sustainability scorecard. See “Compensation Discussion and
Analysis — Named Executive’s 2023 Compensation Program and Results — Annual Cash Incentive” for additional
information.
(2) Consists of the number of shares of Common Stock potentially issuable based on the achievement of performance
criteria under PSU awards granted under our 2014 Stock Incentive Plan. See “Compensation Discussion and
Analysis — Named Executive’s 2023 Compensation Program and Results — Long-Term Equity Incentives — PSUs
Granted in 2023” for additional information. The performance period for these awards ends December 31, 2025.
PSUs earn dividend equivalents, which are paid out based on the number of shares earned at the end of the
performance period.
(3) Consists of the number of shares of Common Stock potentially issuable upon the exercise of options granted under
our 2014 Stock Incentive Plan. See “Compensation Discussion and Analysis — Named Executive’s 2023
Compensation Program and Results — Long-Term Equity Incentives — Stock Options” for additional information.
Stock options vest ratably in three annual increments, beginning on the first anniversary of the date of grant.
Although we consider stock options to be a form of incentive compensation, only awards with performance criteria
are included as “Equity Incentive Plan Awards” in our compensation tables.
(4) The exercise price represents the average of the high and low market price of our Common Stock on the date of the
grant, in accordance with our 2014 Stock Incentive Plan.
(5) These amounts are grant date fair values of the awards as calculated under ASC Topic 718 and as further described
in notes (1) and (2) to the Summary Compensation Table.
2024 Proxy Statement | 51
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2023
Option Awards
Stock Awards(1)
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)(2)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Name
James C. Fish, Jr.
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
—
22,063
—
—
5,547
16,232
25,284
—
6,556
—
13,907
—
4,287
1,546
2,655
3,273
3,207
1,000
—
4,287
13,140
20,860
59,415(3)
44,125(4)
32,850(5)
14,016(3)
11,094(4)
8,116(5)
—
16,453(3)
13,111(4)
8,889(5)
—
12,188(3)
8,572(5)
773(5)
—
—
—
—
10,969(3)
8,572(4)
6,570(5)
—
Option
Exercise
Price
($)
Option
Expiration
Date
150.115
145.67
110.81
3/7/2033
3/1/2032
2/23/2031
150.115
145.67
110.81
126.005
150.115
145.67
110.81
126.005
150.115
145.67
110.81
126.005
98.898
85.34
73.335
150.115
145.67
110.81
126.005
3/7/2033
3/1/2032
2/23/2031
2/19/2030
3/7/2033
3/1/2032
2/23/2031
2/19/2030
3/7/2033
3/1/2032
2/23/2031
2/19/2030
2/19/2029
2/20/2028
2/28/2027
3/7/2033
3/1/2032
2/23/2031
2/19/2030
Number of
Shares or
Units of
Stock
That Have
Not Vested
(#)(6)
Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)(6)
—
—
—
6,803
—
—
—
10,204
—
—
—
3,061
351
—
—
—
—
—
5,102
—
—
—
—
—
—
1,218,417
—
—
—
1,827,536
—
—
—
548,225
62,864
—
—
—
—
—
913,768
—
—
—
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)(7)
98,936
—
—
24,078
—
—
—
28,360
—
—
—
19,778
—
—
—
—
—
—
18,726
—
—
—
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)(7)
35,438,875
—
—
8,624,740
—
—
—
10,158,552
—
—
—
7,084,480
—
—
—
—
—
—
6,707,653
—
—
—
(1) Values are based on the closing price of our Common Stock on December 31, 2023 of $179.10.
(2)
(3)
(4)
Includes vested stock options granted on February 28, 2017; February 20, 2018; February 19, 2019; February 19,
2020, February 23, 2021 and March 1, 2022 pursuant to our 2014 Stock Incentive Plan.
Includes stock options granted on March 7, 2023 that vest ratably in three annual increments, beginning on the first
anniversary of the date of grant.
Includes stock options granted on March 1, 2022 that vest ratably in three annual increments, beginning on the first
anniversary of the date of grant.
52 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
(5)
(6)
(7)
Includes stock options granted on February 23, 2021 that vest ratably in three annual increments, beginning on the
first anniversary of the date of grant.
Includes RSUs granted on March 1, 2022 under our 2014 Stock Incentive Plan that vest in full on the third anniversary
of the date of grant. In the case of Mr. Carrasco, the table also includes 351 RSUs granted on February 23, 2021
under our 2014 Stock Incentive Plan, prior to his promotion to the senior leadership team, that vest in full on the
third anniversary of the date of grant.
Includes PSUs with three-year performance periods ending December 31, 2024 and December 31, 2025. Payouts on
PSUs are made after the Company’s financial results for the performance period are reported and the MD&C
Committee determines achievement of performance results and corresponding vesting during the first quarter of
the succeeding year. The PSUs for the performance period ended December 31, 2023 are not included in the table as
they are considered earned as of December 31, 2023 for proxy statement disclosure purposes; instead, such PSUs
are included in the Option Exercises and Stock Vested table below. Pursuant to SEC disclosure instructions, because
the Company’s performance on the metrics governing our PSUs with the performance period ended December 31,
2022 exceeded target, the payout value of unearned awards is calculated assuming maximum performance criteria
is achieved. The following number of PSUs have a performance period ending December 31, 2024: Mr. Fish — 47,620;
Ms. Rankin — 11,972; Mr. Morris — 14,150; Mr. Carrasco — 9,252; and Ms. Hemmer — 9,252. The following number
of PSUs have a performance period ending December 31, 2025: Mr. Fish — 51,316; Ms. Rankin — 12,106;
Mr. Morris — 14,210; Mr. Carrasco — 10,526; and Ms. Hemmer — 9,474.
OPTION EXERCISES AND STOCK VESTED
Name
James C. Fish, Jr.
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
Option Awards
Stock Awards
Number of Shares
Acquired on Exercise(#)(1)
Value Realized on
Exercise ($)
Number of Shares
Acquired on Vesting (#)(2)
Value Realized on
Vesting ($)(2)
83,419
—
8,889
—
27,005
3,626,951
—
553,792
—
1,970,469
119,300
29,472
32,280
2,451
23,860
23,483,609
5,801,416
6,354,157
467,471
4,696,722
(1) The following number of net shares were received, after withholdings and/or sale of shares to cover option costs
and taxes: Mr. Fish — 13,454; Mr. Morris — 1,940; and Ms. Hemmer — 6,954;
(2)
Includes shares of the Company’s Common Stock issued on account of PSUs granted in 2021 with a performance
period ended December 31, 2023. The determination of achievement of performance results and corresponding
vesting of such PSUs was performed by the MD&C Committee in February 2024. Following such determination,
shares of the Company’s Common Stock earned under this award were issued on February 13, 2024. Also includes
347 RSUs granted to Mr. Carrasco prior to his promotion to the senior leadership team that vested in 2023. The
value of PSUs and RSUs is calculated using the average of the high and low market price of our Common Stock on
the date of payout.
2024 Proxy Statement | 53
EXECUTIVE COMPENSATION
Nonqualified Deferred Compensation in 2023
Amounts that Can be Deferred. Under our 409A Deferral Plan, each of our named executive officers may elect to defer
receipt of portions of their base salary and annual cash incentives for the applicable fiscal year in excess of the annual
compensation threshold (the “Threshold”) established under Section 401(a)(17) of IRC. For 2023, the Threshold was
$330,000. Such deferrals will result in a deferral of taxation on the amounts deferred. The 409A Deferral Plan provides
that a plan participant may defer, for payment at a future date (a) up to 25% of the participant’s base salary, and up to
100% of the participant’s annual cash incentives, payable after the aggregate of such base salary and annual cash
incentives reaches the Threshold; (b) any RSUs that would otherwise be received by the plan participant; and (c) any
PSUs that would otherwise be received by the plan participant.
Matching Contributions. The Company match provided under the 409A Deferral Plan is dollar for dollar on the employee’s
deferrals, up to 3% of the employee’s aggregate base salary and cash incentives in excess of the Threshold, and fifty
cents on the dollar on the employee’s deferrals, in excess of 3% and up to 6% of the employee’s aggregate base salary
and cash incentives in excess of the Threshold. Additional deferral contributions will not be matched but will be tax-
deferred. Amounts deferred under this plan are allocated into accounts that mirror selected investment funds in our
401(k) Retirement Savings Plan, including a Company stock fund, although the amounts deferred are not actually invested
in stock or funds. There is no Company match on deferred RSUs or PSUs, but the Company makes a cash payment of
dividend equivalents on the shares deferred at the same time and at the same rate as dividends on the Company’s
Common Stock.
Timing of Distributions. Participating employees generally can elect to receive distributions commencing six months
after the employee leaves the Company in the form of annual installments or a lump sum payment. Special circumstances
may allow for a modified or accelerated distribution, such as the employee’s death, an unforeseen emergency, or upon
termination of the plan. In the event of death, distribution will be made to the designated beneficiary in a single lump sum
in the following calendar year. In the event of an unforeseen emergency, the plan administrator may allow an early
payment in the amount necessary to satisfy the emergency. All participants are immediately 100% vested in all of their
contributions, Company matching contributions, and gains and/or losses related to their investment choices.
Aggregate Balance
at Last Fiscal
Year End ($)(4)
Executive
Contributions
in Last
Fiscal
Year ($)(1)
Registrant
Contributions
in Last
Fiscal
Year ($)(2)
Aggregate
Earnings
in Last
Fiscal
Year ($)(3)
2,782,176
128,916
546,764
—
139,619
Aggregate
Withdrawals/
Distributions ($)(3)
265,563
—
—
—
—
Name
James C. Fish, Jr.
Devina A. Rankin
John J. Morris, Jr.
Rafael E. Carrasco
Tara J. Hemmer
(1) Contributions are made pursuant to the Company’s 409A Deferral Plan. Executive contributions of base salary and
annual cash incentive compensation is included in the Salary column and the Non-Equity Incentive
Plan Compensation column, respectively, of the Summary Compensation Table.
20,355,169
998,839
3,159,891
—
991,541
250,005
101,352
110,334
—
131,124
191,240
78,835
82,751
—
59,006
(2) Company contributions to the executives’ 409A Deferral Plan accounts are included in the All Other Compensation
column in the Summary Compensation Table.
(3) Earnings on these accounts are not included in any other amounts in the tables included in this Proxy Statement, as
the amounts of the named executives’ earnings on deferred cash compensation represent the general market gains
(or losses) on investments, rather than amounts or rates set by the Company for the benefit of the named executives.
In the case of Mr. Fish, who has deferred receipt of a total of 94,844 shares of Common Stock in prior years, earnings
reported in the column above also include the change in the closing price per share of the Company’s Common
Stock from December 31, 2022 to December 31, 2023, plus $2.80 of dividend equivalents paid per share of Common
Stock in 2023, multiplied by the number of shares deferred. The dividend equivalents on the deferred shares were
paid in cash to Mr. Fish during 2023 and are reflected in the Aggregate Withdrawals/ Distributions column above.
The value of Mr. Fish’s deferred shares was included in the Option Exercises and Stock Vested table in the years
such awards vested.
(4) Amounts shown in this column include the following amounts that were reported as compensation to the named
executive in the Summary Compensation Table for 2021-2023: Mr. Fish — $852,605; Ms. Rankin — $421,888;
Mr. Morris — $408,768 and Ms. Hemmer — $439,700. Mr. Carrasco has not elected to participate in the 409A Deferral
Plan.
54 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
Change in Control. The post-employment compensation our named executives receive is based on provisions included
in retirement and severance plan documents, employment agreements and equity incentive award documentation.
Severance protections aid in retention of senior leadership by providing the individual with comfort that he or she will be
treated fairly in the event of an involuntary termination not for cause. The change in control provisions included in the
Severance Protection Plan, our stock option award agreements and, if applicable, employment agreements require a
double trigger in order to receive any payment in the event of a change in control situation. First, a change in control must
occur, and second, the individual must terminate employment for good reason or the Company must terminate
employment without cause within six months prior to or two years following the change in control event. PSUs are paid
out in cash on a prorated basis based on actual results achieved through the end of the fiscal quarter prior to a change in
control. Thereafter, the executive would typically receive a replacement award from the successor entity, provided that
the successor entity is publicly traded. If the successor is not publicly traded, the executive will be entitled to a
replacement award of cash. RSUs vest upon a change in control unless the successor entity converts the awards to
equivalent grants in the successor. In the case of both converted RSU and PSU awards, they will vest in full if the executive
is terminated without cause following the change in control. We believe providing change in control protection encourages
our named executives to pursue and facilitate transactions that are in the best interests of stockholders while not granting
executives an undeserved windfall.
Involuntary Termination or Resignation for Good Reason. Under the Severance Protection Plan, in the event a participant
is terminated without cause or resigns for good reason, subject to execution of a release of claims and continued
compliance with all restrictive covenants, he or she will be entitled to receive: (a) cash severance in an aggregate amount
equal to two times the sum of the participant’s base salary and target annual bonus (with one half payable in a lump sum
at termination, and the remaining half payable in installments over a two-year period); (b) continuation of group health
benefits over a two-year period following termination and (c) a pro rata annual cash incentive payment for the year of
termination. In the event a named executive is terminated for cause, he or she is entitled to any accrued but unpaid salary
only, and all unvested awards and outstanding stock options, whether exercisable or not, are forfeited.
The terms “cause,” “good reason,” and “change in control” are defined in the executives’ employment agreements, the
Severance Protection Plan and equity award plans and agreements, as applicable, but such terms have the meanings
generally described below. You should refer to the applicable documentation, accessible through the Exhibit List to the
Company’s Annual Report on Form 10-K, for the full definitions.
“Cause” generally means the named executive has: deliberately refused to perform his or her duties; breached his
or her duty of loyalty to the Company; been convicted of a felony; intentionally and materially harmed the Company;
materially violated the Company’s policies and procedures or breached the covenants contained in his or her
agreement.
“Good Reason” generally means that, without the named executive’s consent: his or her duties or responsibilities
have been substantially changed; he or she has been removed from his or her position; the Company has breached
his or her employment agreement; any successor to the Company has not assumed the obligations under his or her
employment agreement; or he or she has been reassigned to a location more than 50 miles away.
“Change in Control” generally means that: at least 25% of the Company’s Common Stock has been acquired by one
person or persons acting as a group; certain significant turnover in our Board of Directors has occurred; there has
been a merger of the Company in which at least 50% of the combined post-merger voting power of the surviving
entity does not consist of the Company’s pre-merger voting power, or a merger to effect a recapitalization that
resulted in a person or persons acting as a group acquired 25% or more of the Company’s voting securities; or the
Company is liquidating or selling all or substantially all of its assets.
Benefits to a participant under the Severance Protection Plan are subject to reduction to the extent required by the
Company’s Severance Limitation Policy or if the excise tax described in Sections 280G or 4999 of the IRC is applicable
and such reduction would place the participant in a better net after tax position.
Voluntary Termination; Retirement. Our equity award agreements generally provide that an executive forfeits unvested
awards if he or she voluntarily terminates employment. RSUs and PSUs generally vest on a pro rata basis upon
involuntary termination other than for cause. RSUs, PSUs and stock options generally continue to vest following a
qualifying retirement as if the employee had remained employed until the end of the performance period. If the recipient
2024 Proxy Statement | 55
EXECUTIVE COMPENSATION
is terminated by the Company without cause or voluntarily resigns, the recipient is entitled to exercise all stock options
outstanding and exercisable within a specified time frame after such termination.
Explanation of Tabular Disclosure. The following table presents potential payouts to our named executives at year-end
upon termination of employment in the circumstances indicated pursuant to the terms of applicable plans and
agreements. The payouts set forth below assume the triggering event indicated occurred on December 31, 2023, when
the closing price of our Common Stock was $179.10 per share. These payouts are calculated for SEC disclosure purposes
and are not necessarily indicative of the actual amounts the named executive would receive. Please note the following
when reviewing the payouts set forth below:
• The compensation component set forth below for accelerated vesting of stock options is comprised of the
unvested stock options granted in 2021, 2022 and 2023, based on the difference between the closing price of our
Common Stock on December 31, 2023 and the exercise price of those options.
• For purposes of calculating the payout of performance share unit awards outstanding as of December 31, 2023,
we have assumed that target performance was achieved; actual performance share unit payouts will be based on
actual performance of the Company during the performance period.
• For purposes of calculating the payout upon the “double trigger” of change in control and subsequent involuntary
termination not for cause, the value of the performance share unit replacement award is equal to the number of
PSUs that would be forfeited based on the prorated acceleration of the PSUs, multiplied by the closing price of our
Common Stock on December 31, 2023.
• The payout for continuation of benefits is an estimate of the cost the Company would incur to continue those
benefits.
• The Company’s practice is to provide all benefits-eligible employees with life insurance that pays one times annual
base salary upon death, subject to an age-based reduction provision beginning at age 65. The insurance benefit is
a payment by an insurance company, not the Company, and is payable under the terms of the insurance policy.
• Refer to the Nonqualified Deferred Compensation in 2023 table above for aggregate balances payable to the
named executives under our 409A Deferral Plan pursuant to the named executive’s distribution elections.
56 |
2024 Proxy Statement
Potential Consideration Upon Termination of Employment
Mr. Fish
Ms. Rankin
Mr. Morris Mr. Carrasco Ms. Hemmer
EXECUTIVE COMPENSATION
Payout or Value of Compensation Components,
in dollars
In Event of Death or Disability
• Accelerated vesting of stock options
• Payment of PSUs (contingent on actual
performance at end of performance period)
• Accelerated vesting of RSUs
• Life insurance benefit paid by insurance company
(in the case of death)
Total
In Event of Termination Without Cause by the
Company or For Good Reason by the Employee
• Two times base salary plus target annual cash
bonus (one-half payable in lump sum; one-half
payable in bi-weekly installments over a two-year
period)
• Continued coverage under health and welfare
5,440,570
1,331,368
1,522,221
692,619 1,053,163
17,719,438
4,312,370
— 1,218,417
5,079,276 3,542,240 3,353,827
913,768
611,089
1,827,536
1,250,000
24,410,008
739,000
7,601,155
754,000
643,000
595,000
9,183,033 5,440,948 5,963,758
7,280,000
3,070,400
3,292,800 2,451,760 2,541,060
benefit plans for two years
31,324
31,324
31,324
31,324
31,324
• Prorated payment of PSUs (contingent on actual
performance at end of performance period)
• Prorated vesting of RSUs
Total
In Event of Termination Without Cause by the
Company or For Good Reason by the Employee Six
Months Following a Change in Control (Double
Trigger)
• Two times base salary plus target annual cash
bonus (one-half payable in lump sum; one-half
payable in bi-weekly installments over a two-year
period)
• Continued coverage under health and welfare
benefit plans for two years
• Accelerated vesting of stock options
• Prorated accelerated payment of PSUs
• Accelerated payment of PSUs replacement grant
• Accelerated vesting of RSUs
• Prorated annual cash bonus(1)
Total
8,749,393
—
16,060,717
2,152,185
743,235
5,997,144
2,537,847 1,733,091 1,670,287
1,114,797
557,399
394,138
6,976,768 4,610,313 4,800,070
7,280,000
3,070,400
3,292,800 2,451,760 2,541,060
31,324
31,324
5,440,570
8,749,393
8,970,045
31,324
1,331,368
2,152,185
2,160,185
— 1,218,417
1,535,200
31,324
31,324
1,522,221
692,619 1,053,163
2,537,847 1,733,091 1,670,287
2,541,429 1,809,149 1,683,540
913,768
611,089
1,827,536
601,830
580,680
1,724,800
34,951,332 11,499,079 13,477,957 7,909,712 8,494,972
4,480,000
(1) Pursuant to the Severance Protection Plan, Ms. Hemmer and Mr. Carrasco receive a prorated target annual cash
bonus under this scenario. Mr. Fish, Ms. Rankin, and Mr. Morris receive a prorated maximum annual cash bonus
under this scenario pursuant to their 2017 Employment Agreements. The 2017 Employment Agreements provided
for this enhanced treatment partially on account of similar terms in pre-existing employment agreements that
executives were agreeing to terminate in order to support the Company’s transition toward a more standardized
and flexible approach to severance protections.
2024 Proxy Statement | 57
EXECUTIVE COMPENSATION
Chief Executive Officer Pay Ratio
In 2022, we reconducted our analysis to identify the Company’s median employee, based on total annual compensation
for all employees other than our Chief Executive Officer, in accordance with SEC Regulation S-K, Item 402(u) (the “Median
Employee”). There have been no changes to the Company’s employee population, compensation arrangements, or the
circumstances of the Median Employee that the Company believes would significantly impact this pay ratio disclosure
and require identification of a new Median Employee. To select the Median Employee, we determined the actual taxable
compensation paid to each listed employee in 2021, converted to U.S. dollars at appropriate exchange rates for non-U.S.
employees, and annualized for salaried employees hired during the year. We did not apply any cost-of-living adjustments
nor did we use any form of statistical sampling. The Median Employee, a Senior Technician in the U.S., was identified
from a list of Company employees as of December 31, 2021. Out of a total worldwide employee population of 48,687 on
that date, the list included 47,617 employees and excluded the Chief Executive Officer and our 1,069 employees based in
India. Approximately 95.7% of these total employees work in the U.S. and approximately 4.3% work in Canada. Over 99%
of these individuals are full-time employees. Any temporary or seasonal employees are included; any subcontracted
workers are not employees and are excluded. For 2023, total annual compensation for the Median Employee was $97,046.
The annual compensation of our Chief Executive Officer was $14,628,854, for a ratio of 1:151. These values were
calculated in accordance with SEC Regulation S-K, Item 402(c)(2)(x) requirements for reporting total compensation in the
Summary Compensation Table.
Equity Compensation Plan Table
The following table provides information as of December 31, 2023 about the number of shares to be issued upon vesting
or exercise of equity awards and shares remaining available for issuance under our equity compensation plans.
Number of
Securities to be
Issued Upon
Exercise
of Outstanding
Options and Rights
4,162,092(2)
Weighted-Average
Exercise Price of
Outstanding
Options and Rights
$111.22(3)
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation Plans
16,085,724(4)
Plan Category
Equity compensation plans approved by security holders(1)
(1)
Includes our 2009 Stock Incentive Plan, 2014 Stock Incentive Plan, 2023 Stock Incentive Plan and Employee Stock
Purchase Plan (“ESPP”). No additional awards may be granted under our 2009 Stock Incentive Plan or our 2014
Stock Incentive Plan.
(2)
Includes: options outstanding for 2,728,522 shares of Common Stock; 182,105 shares of Common Stock to be issued
in connection with deferred compensation obligations; 370,902 shares underlying unvested RSUs and 880,563
shares of Common Stock that would be issued on account of outstanding PSUs if the target performance level is
achieved. Assuming, instead, that the maximum performance level was achieved on such PSUs, the amount of
Common Stock that would be issued on account of outstanding awards would increase by 880,563 shares.
The total number of shares subject to outstanding awards in the table above includes 308,597 shares on account of
PSUs, at target, with the performance period ended December 31, 2023. The determination of achievement of
performance results on such PSUs was performed by the MD&C Committee in February 2024, and the Company
achieved maximum performance criteria on the TSR PSUs and the Cash Flow PSUs, yielding a 200% payout. A total
of 406,810 shares of Common Stock were issued on account of such PSUs in February 2024, net of units deferred,
of which 203,405 shares of Common Stock were included in the first column of the table above.
Excludes purchase rights that accrue under the ESPP. Purchase rights under the ESPP are considered equity
compensation for accounting purposes; however, the number of shares to be purchased is indeterminable until the
time shares are actually issued, as automatic employee contributions may be terminated before the end of an
offering period and the purchase price is not yet known.
(3) Excludes PSUs and RSUs because those awards do not have exercise prices associated with them. Also excludes
purchase rights under the ESPP for the reasons described in note (2) above.
(4) The shares remaining available include 1,795,378 shares under our ESPP and 14,290,346 shares under our 2023
Stock Incentive Plan, assuming payout of PSUs at maximum. Assuming payout of PSUs at target, the number of
shares remaining available for issuance under our 2023 Stock Incentive Plan would be 15,170,909.
58 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
PAY VERSUS PERFORMANCE
We are required to calculate and present the following compensation information in the tabular format prescribed by the
SEC. The Compensation Discussion and Analysis and other executive compensation tables above should be read in
conjunction with this section to gain a complete understanding of our executive compensation philosophy, programs and
decisions.
The tables and discussion below refer to an SEC-prescribed calculation of compensation actually paid, referred to as
“CAP”. However, CAP does not correlate to the total amount of compensation that the executive realized during the year.
CAP is a detailed calculation that includes adjustments to Total Compensation as reported in the Summary Compensation
Table (the “SCT”) to reflect the increase (or decrease) in value of equity compensation over the course of the year,
including equity compensation granted in prior years and equity compensation remaining unvested as of year-end. The
equity compensation values used to determine CAP are calculated in accordance with ASC Topic 718, based on various
methodologies and assumptions. The amount of compensation that the executive will actually realize when such equity
awards vest or options are exercised may be materially different from the amounts used in the CAP calculation.
The table below includes our Operating EBITDA annual cash incentive performance measure as the Company Selected
Measure (“CSM”) that management believes is the most important annual financial performance measure used to link
executive pay and Company performance in 2023. This measure is also discussed in our Compensation Discussion and
Analysis and is generally defined as the Company’s income from operations, excluding depreciation, depletion and
amortization, “Restructuring” and “(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net” reported in
our Annual Report on Form 10-K, and also excluding the impacts of our recycling brokerage business. Operating EBITDA
presented in this proxy statement is a non-GAAP measure and is defined differently than Operating EBITDA reported in
the Company’s quarterly earnings press release. See Appendix A for additional information and a reconciliation of this
non-GAAP measure to the most comparable GAAP measure.
Pay Versus Performance Table
Value of Initial
Fixed $100
Investment
Based on:(3)
CEO CAP(1)(2)
($)
SCT Total
to CEO(1)
($)
Average
Average SCT
Non-CEO
Total for
NEOs
Non-CEO
WM
CAP(1)(2)
NEOs(1)
TSR
($)
($)
($)
6,550,505 168
14,628,854 26,638,740 3,971,546
14,820,684 13,037,001 5,202,091
4,823,249 145
13,057,363 44,273,994 3,637,383 10,803,402 152
4,308,433 105
12,373,925 15,824,928 3,372,614
Peer
Group
TSR
($)
166
141
149
107
Net Income
($ in billions)
2.304
2.238
1.816
1.496
CSM:
Operating
EBITDA
($ in billions)
5.892
5.475
4.961
4.371
Year
2023
2022
2021
2020
(1) For all periods shown in the table above, the Company’s CEO was Mr. James C. Fish, Jr. The Non-CEO NEOs for
purposes of the 2023 disclosures include Ms. Devina A. Rankin, Mr. John C. Morris, Jr., Mr. Rafael E. Carrasco and
Ms. Tara J. Hemmer. The Non-CEO NEOs for purposes of the 2022 and 2020 disclosures include Ms. Rankin,
Mr. Morris, Ms. Hemmer and Mr. Steven R. Batchelor, the Company’s retired Senior Vice President — Operations.
The Non-CEO NEOs for purposes of the 2021 disclosures include Ms. Rankin, Mr. Morris, Ms. Hemmer and
Mr. Charles C. Boettcher, Executive Vice President, Corporate Development & Chief Legal Officer.
(2) To calculate 2023 CAP, we made specified adjustments to Total Compensation as reported in the SCT, as set forth
below:
2024 Proxy Statement | 59
EXECUTIVE COMPENSATION
Adjustments to CEO’s SCT Total Compensation to Calculate CAP:
SCT Total Compensation
Deduction from SCT Total Compensation, in dollars
• Grant date fair values of equity awards reported in the
“Stock Awards” and “Options Awards” columns in the SCT
Additions to SCT Total Compensation, in dollars:
• Fair value of stock awards granted during the year, as of 12/31(a)
• Fair value of option awards granted during the year, as of 12/31(b)
• Change in fair value of prior years’ stock awards unvested at 12/31(a)
• Change in fair value of prior years’ option awards unvested at 12/31(b)
• Change in fair value of prior years’ stock awards vesting during the year(a)
• Change in fair value of prior years’ option awards vesting during the year(b)
• Dividend equivalents paid upon stock awards vesting during the year
Total Additions to SCT Total Compensation, in dollars
CAP
2023
14,628,854
10,355,433
11,099,138
2,595,049
1,765,392
818,348
5,614,556
(445,774)
918,610
22,365,319
26,638,740
Adjustments to Non-CEO NEOs Average SCT Total Compensation to Calculate Average CAP:
SCT Total Compensation
Deduction from SCT Total Compensation, in dollars
• Grant date fair values of equity awards reported in the
“Stock Awards” and “Options Awards” columns in the SCT
Additions to SCT Total Compensation, in dollars:
• Fair value of stock awards granted during the year, as of 12/31(a)
• Fair value of option awards granted during the year, as of 12/31(b)
• Change in fair value of prior years’ stock awards unvested at 12/31(a)
• Change in fair value of prior years’ option awards unvested at 12/31(b)
• Change in fair value of prior years’ stock awards vesting during the year(a)
• Change in fair value of prior years’ option awards vesting during the year(b)
• Dividend equivalents paid upon stock awards vesting during the year
Total Additions to SCT Total Compensation, in dollars
CAP
2023
3,971,546
2,336,613
2,501,178
585,555
552,912
163,643
1,031,736
(88,919)
169,467
4,915,572
6,550,505
(a) Stock awards for all NEOs include annual grants of TSR PSUs and Cash Flow PSUs. The fair value of an unvested
TSR PSU is calculated using a multifactor Monte Carlo model, and because total shareholder return is a market
condition, projected achievement is embedded in the fair value. The fair value of an unvested Cash Flow PSU is
equal to the average of the high and low market price of our Common Stock on the given date; we then multiply
the fair value of a Cash Flow PSU by our projection, for accounting purposes, of the probable outcome of the
Cash Flow Generation performance measure applicable to such PSUs, based on results to-date and forecast.
The following grid summarizes the projected probable outcomes utilized to calculate the value of unvested
Cash Flow PSUs at year-end for years prior to the end of the performance period for purposes of 2023 CAP:
60 |
2024 Proxy Statement
EXECUTIVE COMPENSATION
Projected Payout of Unvested Cash Flow PSUs at Year-End
Cash Flow PSUs with 3-year Performance Period Ended 12/31/2023
Cash Flow PSUs with 3-year Performance Period Ended 12/31/2024
Cash Flow PSUs with 3-year Performance Period Ended 12/31/2025
2023
2022
200%
100% 100%
100%
Stock awards also includes RSUs that vested for Mr. Carrasco in 2023; unvested RSUs that were granted to
Mr. Carrasco in 2021; and unvested RSUs that were granted to Ms. Rankin, Mr. Morris, Ms. Hemmer and
Mr. Carrasco in 2022. The fair value of an RSU is equal to the average of the high and low market price of our
Common Stock on the given date.
(b) Option award fair values are calculated using a Black-Scholes option pricing model.
(3) Total shareholder return (“TSR”) is based on a hypothetical $100 investment on December 31, 2019. The TSR
amounts shown for 2020 represent the value of that $100 investment on December 31, 2020, and TSR is then
calculated, on a cumulative basis, as of December 31, 2021, December 31, 2022 and December 31, 2023. The Peer
Group TSR refers to the Dow Jones Waste & Disposal Services Index.
Tabular Disclosure of Most Important Measures to Determine 2023 CAP
The five items listed below represent the most important measures used to determine CAP for 2023 for all of our NEOs,
as each measure and its impact on executive compensation is further described in our Compensation Discussion and
Analysis.
Most Important Performance Measures
TSR Relative to the S&P 500
Cash Flow Generation
Operating EBITDA
Income from Operations Margin
Internal Revenue Growth
Narrative Disclosure to Pay Versus Performance Table
The following charts reflect the relationship of CAP over the four-year period ended December 31, 2023 to trends in the
Company’s TSR, net income and Operating EBITDA over the same period. In addition, the first chart below reflects that
the Company’s TSR is highly-aligned with the Peer Group TSR.
We believe variations in CAP due to use of ASC Topic 718 fair values for four years of outstanding equity grants at
specified points in time have resulted in CAP for the four-year period presented not having a direct correlation to Company
performance trends. However, we generally believe our CAP, and our CAP relative to our TSR, net income and Operating
EBITDA, is reflective of our use of equity incentives that are tied to stock price, strong operational performance and
financial results, consistent above-target performance on financial compensation metrics and our TSR relative to the
S&P 500 having exceeded the 50th percentile since 2020. Due to the size of our President and CEO’s annual equity
incentive award and the fact that nearly three-quarters of our President and CEO’s compensation is tied to such equity
incentive awards, above target performance has a more pronounced impact on his CAP, relative to our non-CEO NEOs.
Operating EBITDA is identified as our CSM because it is assigned the heaviest weighting, at 50%, in our annual cash
incentive awards, making it the most important annual financial performance measure used to link executive pay and
Company performance in 2023.
2024 Proxy Statement | 61
EXECUTIVE COMPENSATION
Relationship of CAP to WM TSR and WM TSR to Peer Group TSR
s
n
o
i
l
l
i
M
n
i
P
A
C
s
n
o
i
l
l
i
M
n
i
P
A
C
$50
$45
$40
$35
$30
$25
$20
$15
$10
$5
$-
$50
$45
$40
$35
$30
$25
$20
$15
$10
$5
$-
2020
2021
2022
2023
CEO CAP
WM TSR
Non-CEO NEO Average CAP
Dow Jones Waste & Disposal Services Index TSR
Relationship of CAP to Net Income and Operating EBITDA
2020
2021
2022
2023
CEO CAP
Non-CEO NEO Average CAP
Net Income
Operating EBITDA
$170
$160
$150
$140
$130
$120
$110
$100
$6.0
$5.0
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62 |
2024 Proxy Statement
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
(ITEM 2 ON THE PROXY CARD)
Our Board of Directors, upon the recommendation of the Audit Committee, has ratified the selection of Ernst & Young LLP
to serve as our independent registered public accounting firm for fiscal year 2024, subject to ratification by our
stockholders. Representatives of Ernst & Young LLP will attend the Annual Meeting. They will be able to make a statement
if they want, and will be available to answer appropriate questions from stockholders.
Although ratification of the selection of Ernst & Young LLP is not required by our By-laws or otherwise, we are submitting
the selection to stockholders for ratification because we value our stockholders’ views on our independent registered
public accounting firm and as a matter of good governance. If our stockholders do not ratify our selection, it will be
considered a direction to our Board and Audit Committee to consider selecting another firm. Even if the selection is
ratified, the Audit Committee may, in its discretion, select a different independent registered public accounting firm,
subject to ratification by the Board, at any time during the year if it determines that such a change is in the best interests
of the Company and our stockholders.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEE INFORMATION
Fees for professional services provided by our independent registered public accounting firm in each of the last two
fiscal years, in each of the following categories, were as follows:
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Total
2023
2022
(In millions)
$6.8
$6.5
1.0
0.2
—
—
—
—
$7.8
$6.7
Audit fees include fees for the annual audit, reviews of the Company’s Quarterly Reports on Form 10-Q, work performed
to support the Company’s debt issuances, accounting consultations, and separate subsidiary audits required by statute
or regulation. Audit-related fees include attest services related to financial reporting that are not required by statute or
regulations.
The Audit Committee has adopted procedures for the approval of Ernst & Young LLP’s services and related fees. At the
beginning of each year, all audit and audit-related services, tax fees and other fees for the upcoming audit are provided
to the Audit Committee for approval. The services are grouped into significant categories and provided to the Audit
Committee in the format shown above. All projects that have the potential to exceed $100,000 are separately identified
and reported to the Committee for approval. The Audit Committee Chair has the authority to approve additional services,
not previously approved, between Committee meetings. Any additional services approved by the Audit Committee Chair
between Committee meetings are reported to the full Audit Committee at the next regularly scheduled meeting. The
Audit Committee is updated on the status of all services and related fees at every regular meeting. In 2023 and 2022, the
Audit Committee or Audit Committee Chair pre-approved all audit and audit-related services performed by Ernst & Young
LLP. As set forth in the Audit Committee Report, the Audit Committee has considered whether the provision of these
audit-related services is compatible with maintaining auditor independence and has determined that it is.
VOTE REQUIRED FOR APPROVAL
Approval of this proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common
Stock present at the meeting, in person or represented by proxy, and entitled to vote.
FOR THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2024.
2024 Proxy Statement | 63
ADVISORY VOTE ON EXECUTIVE COMPENSATION
(ITEM 3 ON THE PROXY CARD)
Pursuant to Section 14A of the Exchange Act, stockholders are entitled to an advisory (non-binding) vote on compensation
programs for our named executive officers (sometimes referred to as “say on pay”). The Board of Directors has
determined that it will include this “say on pay” vote in the Company’s proxy materials annually, pending consideration of
future advisory stockholder votes on the frequency of this advisory vote on executive compensation.
We encourage stockholders to review the Compensation Discussion and Analysis included in this Proxy Statement. The
Company has designed its executive compensation program to be supportive of, and align with, the strategy of the
Company and the creation of stockholder value, while discouraging excessive risk-taking. The following key structural
elements and policies, discussed in more detail in the Compensation Discussion and Analysis, further the objective of our
executive compensation program and evidence our dedication to competitive and reasonable compensation practices
that are in the best interests of stockholders:
• a significant majority of our named executive’s target compensation is linked to Company performance and
long-term equity awards, which aligns executives’ interests with those of stockholders;
• our total direct compensation opportunities for named executive officers are targeted to fall in a range around the
competitive median;
• performance-based awards include threshold, target and maximum payouts correlating to a range of
performance outcomes and are based on a variety of indicators of performance, which limits risk-taking behavior;
• performance stock units with a three-year performance period, as well as stock options that vest over a three-year
period, link executives’ interests with long-term performance and reduce incentives to maximize performance in
any one year;
• all of our executive officers are subject to stock ownership guidelines, which we believe demonstrates a
commitment to, and confidence in, the Company’s long-term prospects;
• in addition to adoption of the executive compensation clawback policy mandated by the New York Stock Exchange
in 2023, the Company has clawback provisions in its equity award agreements and executive officer employment
agreements, and has adopted a clawback policy applicable to annual incentive compensation, designed to recoup
compensation when cause and/or misconduct are found; and
• the Company has adopted policies that limit executive officer severance benefits and prohibit it from entering into
agreements with executive officers that provide for certain death benefits or tax gross-up payments.
The Board strongly endorses the Company’s executive compensation program and recommends that the stockholders
vote in favor of the following resolution:
RESOLVED, that the compensation of the Company’s named executive officers as described in this Proxy Statement
under “Executive Compensation,” including the Compensation Discussion and Analysis and the tabular and narrative
disclosure contained in this Proxy Statement, is hereby APPROVED.
VOTE REQUIRED FOR APPROVAL
Approval of this proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common
Stock present at the meeting, in person or represented by proxy, and entitled to vote. Because the vote is advisory, it will
not be binding, and neither the Board of Directors nor the MD&C Committee will be required to take any action as a result
of the outcome of the vote on this proposal. The MD&C Committee will carefully consider the outcome of the vote in
connection with future executive compensation arrangements.
FOR THE BOARD RECOMMENDS THAT YOU VOTE TO APPROVE THE COMPANY’S
EXECUTIVE COMPENSATION.
64 |
2024 Proxy Statement
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF
INCORPORTION TO PROVIDE FOR OFFICER EXCULPATION
(ITEM 4 ON THE PROXY CARD)
Background
The State of Delaware, which is the Company’s state of incorporation, enacted legislation, effective August 1, 2022, that
amended Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”) to enable Delaware corporations to
include a provision in their certificates of incorporation to eliminate or limit the personal liability of certain officers for
monetary damages associated with claims of breach of the duty of care in certain instances (referred to as “exculpation”).
The Company’s Third Restated Certificate of Incorporation (the “Certificate of Incorporation”) provides for the exculpation
of directors from personal liability for monetary damages associated with breaches of the duty of care but does not have
a similar limitation of liability for our officers. The Company is asking its stockholders to approve an amendment to the
Certificate of Incorporation to limit the liability of certain of the Company’s officers in specific circumstances, as permitted
by Delaware law (the “Proposed Amendment”). The Proposed Amendment also simplifies the existing exculpation
provision related to directors of the Company set forth in Article Seventh of the Certificate of Incorporation by referring to
the DGCL as the same exists or may hereafter be amended instead of specifying each instance where exculpation for
directors is currently not available under the DGCL. As such, the current exculpation protections available to the directors
will remain unchanged as a result of the Proposed Amendment. In addition, the Proposed Amendment provides that if
the DGCL is further amended to eliminate or limit the liability of officers or directors, the liability of such officers and
directors will be limited or eliminated to the fullest extent permitted by law, as so amended. The following description is
a summary only and is qualified in its entirety by reference to the text of the Proposed Amendment as shown below in the
section titled “Proposed Amendment.”
Consistent with the updated Section 102(b)(7), the Proposed Amendment would only exculpate certain officers of the
Company from personal liability for monetary damages for direct claims brought by stockholders for breaches of the
officer’s fiduciary duty of care, including class actions. In addition, as is the case for our directors under our current
Certificate of Incorporation, officers would not be exculpated from personal liability (a) for breach of the officer’s duty of
loyalty to the Company or its stockholders; (b) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; or (c) for any transaction from which the officer derived an improper personal
benefit. In addition, the Proposed Amendment also would not eliminate an officer’s monetary liability for claims brought
by the Company itself or for derivative claims brought by stockholders in the name of the Company.
The Proposed Amendment will not be retroactive to any act or omission occurring prior to its effective date. Further, the
exculpation would only apply to certain officers, namely a person who (during the course of conduct alleged to be
wrongful): (a) is or was president, chief executive officer, chief operating officer, chief financial officer, chief legal officer,
controller, treasurer or chief accounting officer; (b) is or was identified in the Company’s public filings with the SEC as one
of the most highly compensated executive officers of the Company; or (c) has, by written agreement with the Company,
consented to be identified as an officer for purposes of accepting service of process in Delaware.
Proposed Amendment
We are asking that the stockholders approve the Proposed Amendment. The Proposed Amendment would result in
Article Seventh, which currently provides for exculpation of directors, to be deleted in its entirety and replaced with the
following:
“Seventh: A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from
liability or limitation thereof is not permitted under the General Corporation Law of Delaware as the same exists or
may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely
affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission
occurring prior to the time of such amendment, modification or repeal.”
2024 Proxy Statement | 65
Reasons for Proposed Amendment
Prior to the amendment of Section 102(b)(7) of the DGCL, Delaware law permitted Delaware corporations to exculpate
directors from personal liability for monetary damages associated with breaches of the duty of care, but that protection
did not extend to a Delaware corporation’s officers. Consequently, stockholder plaintiffs have employed the tactic of
bringing certain claims that would otherwise be exculpated if brought against directors against officers to avoid dismissal
of such claims. The amendment to Section 102(b)(7) of the DGCL addressed this inconsistent treatment between officers
and directors and the rising litigation and insurance costs for stockholders.
In the course of the ongoing evaluation of the Company’s corporate governance practices, the Nominating & Governance
Committee and the Board of Directors have determined that the Proposed Amendment would reduce the unequal
treatment of directors and officers associated with claims related to alleged breach of the duty of care and improve
alignment of officers and directors on duty of care responsibilities. The Proposed Amendment would also better position
the Company to continue to attract and retain top management talent by providing this additional protection. In the
absence of such protection, particularly considering the recent trend of plaintiffs increasingly naming corporate officers
as defendants in stockholder litigation, qualified officers might be deterred from serving as officers or, while officers,
from making business decisions that involve risk, due to potential exposure to personal monetary liability for business
decisions that in hindsight may be questioned.
Officers of large publicly-traded corporations, including our Company, are required to make difficult decisions in response
to time-sensitive opportunities and challenges. These decisions can create risk of claims or proceedings seeking to
impose liability on the basis of hindsight. The Board of Directors believes that it is appropriate to limit our officers’
concern about personal risk and empower them to exercise their business judgment in furtherance of stockholder
interests. The Board of Directors believes this will help limit litigation that names officers as defendants, when directors
cannot be named because of their exculpatory protection, as a litigation strategy to compel settlement offers.
Consistent with the recent amendment to the DGCL, the Proposed Amendment only permits exculpation of officers for
direct claims for breaches of the duty of care brought by stockholders (as opposed to claims brought by the Company or
derivative claims made by stockholders on behalf of the Company). Further, as with the director exculpation provision
currently contained in our Certificate of Incorporation, the Proposed Amendment does not apply to breach of the duty of
loyalty, acts or omissions not in good faith or that involve intentional misconduct, a knowing violation of law, or claims
related to any transaction in which the officer derived an improper personal benefit.
After weighing these considerations, upon the recommendation of the Nominating and Governance Committee, the Board
of Directors approved, declared advisable and recommended that our stockholders approve and adopt the Proposed
Amendment. The Proposed Amendment is not being proposed in response to any specific resignation, threat of
resignation, or refusal to serve by any officer or as a result of any pending litigation.
Additional Information
If our stockholders approve the Proposed Amendment, it will become effective upon the filing of the Certificate of
Amendment setting forth the Proposed Amendment with the Delaware Secretary of State, which we anticipate doing
promptly following the Annual Meeting. Other than the replacement of the existing Article Seventh through the Proposed
Amendment, the remainder of our Certificate of Incorporation will remain unchanged. In addition, we intend to file a new
Restated Certificate of Incorporation to integrate the Proposed Amendment (if approved) into a single document. If our
stockholders do not approve the Proposed Amendment, the Company’s current Certificate of Incorporation will remain in
place.
VOTE REQUIRED FOR APPROVAL
Approval of the Proposed Amendment to the Certificate of Incorporation to provide for officer exculpation requires the
affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote on the matter.
Abstentions and broker non-votes will have the same effect as a vote against this proposal. Our Board of Directors
reserves the right to elect to abandon the Proposed Amendment at any time before it becomes effective even if it is
approved by the stockholders.
FOR THE BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO PROVIDE FOR
OFFICER EXCULPATION.
66 |
2024 Proxy Statement
APPENDIX A
Incentive compensation measures presented in this proxy statement are defined differently than corresponding
measures reported in the Company’s quarterly earnings press release. See below for reconciliations of Operating EBITDA,
Income from Operations Margin and Cash Flow Generation to the most comparable GAAP measures. Non-GAAP
measures should not be considered a substitute for financial measures presented in accordance with GAAP.
RECONCILIATION OF CERTAIN NON-GAAP MEASURES
(In Millions)
(Unaudited)
As reported amounts
Adjustments:
Twelve Months Ended December 31, 2023
Revenue
Income from
Operations
Depreciation and
amortization
Operating
EBITDA
$20,426
$3,575
$2,071
$5,646
LESS: Net impacts of recycling brokerage business
622
—
ADD: “Restructuring” and “(Gain) Loss from Divestitures, Asset
Impairments and Unusual Items, Net”
—
247
1
—
Calculated Performance Amounts
Income from Operations Margin Performance Measure
$19,804
$3,822
$2,070
19.3%
1
247
$5,892
As reported amounts
Adjustments:
LESS: Net impacts of recycling brokerage business
ADD: “Restructuring” and “(Gain) Loss from Divestitures, Asset
Impairments and Unusual Items, Net”
ADD: Accrual adjustment(a)
Calculated Performance Amounts
As reported amounts
Adjustments:
Twelve Months Ended December 31, 2022
Revenue
Income from
Operations
Depreciation and
amortization
Operating
EBITDA
$19,698
$3,365
$2,038
$5,403
779
(9)
2
(7)
—
—
$18,919
63
2
$3,439
—
—
$2,036
63
2
$5,475
Twelve Months Ended December 31, 2021
Revenue
Income from
Operations
Depreciation and
amortization
Operating
EBITDA
$17,931
$2,965
$1,999
$4,964
ADD: “Restructuring” and “(Gain) Loss from Divestitures, Asset
Impairments and Unusual Items, Net”
ADD: Accrual adjustment(a)
Calculated Performance Amounts
—
—
(8)
5
—
—
(8)
5
$17,931
$2,962
$1,999
$4,961
(a) Accrual adjustment to true-up recorded accrual amounts against reported financial results.
2024 Proxy Statement | A-1
As reported amounts
Adjustments:(b)
ADD: “Restructuring” and “(Gain) Loss from Divestitures, Asset
Impairments and Unusual Items, Net”
ADD: ADS acquistion and integration costs
ADD: COVID-19 related costs
ADD: Strategic initiative costs
Calculated Performance Amounts
Twelve Months Ended December 31, 2020
Revenue
Income from
Operations
Depreciation and
amortization
Operating
EBITDA
$15,218
$2,434
$1,671
$4,105
—
—
—
—
$15,218
44
149
46
27
$2,700
—
—
—
—
$1,671
44
149
46
27
$4,371
As reported amounts
Adjustments:
Restructuring
Costs associated with labor disruptions and
multiemployer plan withdrawal
Costs incurred in support of strategic
acquisitions
Sustainability growth capital investments in
2022 and 2023
Calculated Performance Amounts
Three Years Ended December 31, 2023
Net Cash Provided
by Operating Activities
Capital
Expenditures
Proceeds from Normal
Course Divestitures
Cash Flow
Generation
$13,593
$ 7,386
$201
$6,408
9
8
39
—
—
—
—
—
—
9
8
39
—
$13,649
(1,325)
$ 6,061
—
$201
1,325
$7,789
(b) Adjustments in 2020 were consistent with reporting of 2020 financial results, excluding $155 million of costs related
to the acquisition and integration of Advanced Disposal Services, Inc. (“ADS”) (of which $149 million was incurred at
the Corporate level); $46 million in costs in connection with COVID-19 and $27 million in costs related to strategic
initiatives launched in 2020 after the performance measure had been established.
A-2 |
2024 Proxy Statement
Form 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12154
Waste Management, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
800 Capitol Street
Suite 3000
Houston, Texas
(Address of principal executive offices)
73-1309529
(I.R.S. Employer
Identification No.)
77002
(Zip code)
Registrant’s telephone number, including area code:
(713) 512-6200
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $0.01 par value
Trading Symbol
WM
Name of Each Exchange on Which Registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2023 was approximately $70.1 billion. The aggregate market value
was computed by using the closing price of the common stock as of that date on the New York Stock Exchange (“NYSE”). (For purposes of calculating this amount only, all
directors and executive officers of the registrant have been treated as affiliates.)
The number of shares of Common Stock, $0.01 par value, of the registrant outstanding as of February 8, 2024 was 401,598,077 (excluding treasury shares of 228,684,384).
DOCUMENTS INCORPORATED BY REFERENCE
Document
Proxy Statement for the
2024 Annual Meeting of Stockholders
Incorporated as to
Part III
TABLE OF CONTENTS
PART I
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1C. Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . .
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.
PART IV
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15.
Item 16.
Page
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2
Cautionary Statement About Forward-Looking Statements
PART I
This Annual Report on Form 10-K 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,” “target,” “plan,” “forecast,”
“project,” “estimate,” “intend,” “commit,” “potential” and words of a similar nature and generally include statements
regarding future results of operations, including revenues, earnings or cash flows; plans and objectives for the future;
projections, estimates or assumptions relating to our operational or financial performance, including anticipated impacts
of the Inflation Reduction Act of 2022; projections, estimates or assumptions relating to our capital expenditures; or our
opinions, views or beliefs about the effects of current or future events, circumstances or performance.
You should view these statements with caution. These statements are not guarantees of future performance,
circumstances or events. They are based on facts and circumstances known to us as of the date the statements are made,
and you should not place undue reliance on any such forward-looking statements. Forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our
present expectations or anticipated results. These risks and uncertainties include, but are not limited to, those described in
Part I, “Item 1A. Risk Factors” and elsewhere in this report and may also be described from time to time in our future
reports filed with the U.S. Securities and Exchange Commission (“SEC”). We do not undertake any obligation to update
forward-looking statements to reflect events, circumstances, changes in expectations or other developments after the date
of those statements.
Item 1. Business.
General
Waste Management, Inc. is a holding company and all operations are conducted by its subsidiaries. When the terms
“the Company,” “we,” “us” or “our” are used in this document, those terms refer to Waste Management, Inc., together
with its consolidated subsidiaries and consolidated variable interest entities. When we use the term “WMI,” we are
referring only to Waste Management, Inc., the parent holding company.
WMI was incorporated in Oklahoma in 1987 under the name “USA Waste Services, Inc.” and was reincorporated as
a Delaware company in 1995. In a 1998 merger, the Illinois-based waste services company formerly known as Waste
Management, Inc. became a wholly-owned subsidiary of WMI and changed its name to Waste Management Holdings, Inc.
(“WM Holdings”). At the same time, our parent holding company changed its name from USA Waste Services to Waste
Management, Inc. Like WMI, WM Holdings is a holding company and all operations are conducted by subsidiaries.
Our principal executive offices are located at 800 Capitol Street, Suite 3000, Houston, Texas 77002. Our telephone
number is (713) 512-6200. Our website address is www.wm.com. Our annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K are all available, free of charge, on our website as soon as practicable after
we file the reports with the SEC. Our stock is traded on the New York Stock Exchange under the symbol “WM.”
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. 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”) business, 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, which is a significant source of fuel that we allocate to our natural gas fleet. During 2023, our
largest customer represented less than 5% of annual revenues.
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We own or operate 263 landfill sites, which is 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 332 transfer stations that consolidate, compact and transport waste efficiently and economically. We also use
waste to create energy, recovering the gas produced naturally as waste decomposes in landfills and using the gas in
generators to make electricity. We are a leading recycler in the U.S. and Canada, handling materials that include cardboard,
paper, glass, plastic and metal. We provide cost-efficient, environmentally sound recycling programs for municipalities,
businesses and households across the U.S. and Canada as well as other services that supplement our solid waste business.
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 is 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 customer
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 planned investments in our WM Renewable Energy and Recycling Processing and Sales businesses,
while increasing automation and reducing labor dependency. We are also evaluating and pursuing emerging diversion
technologies that may generate additional value.
Our Company’s goals are targeted at putting our people first, positioning them to serve and care for our customers,
the environment, the communities in which we work and our stockholders. Our brand promise is ALWAYS WORKING
FOR A SUSTAINABLE TOMORROW®. We live this promise through our service offerings and sustainable solutions,
our investments in innovation, our people, and our commitment to the future. Through our longtime focus on finding
sustainable solutions, we continue to evolve beyond being a traditional environmental waste services company.
Increasingly, our industry-leading focus on environmental sustainability aligns with demand from our customers who want
more of their waste materials recovered. Waste streams are becoming more complex, and our aim is to address current
needs, while anticipating the expanding and evolving needs of our customers. We believe we are uniquely equipped to
meet the challenges of the changing waste industry and our customers’ waste management needs, both today and tomorrow
as we work together to envision and create a more sustainable future.
We believe that execution of our strategy will deliver shareholder value and leadership in a dynamic industry and in
any economic environment. In addition, we intend to continue to return value to our stockholders through dividend
payments and our common stock repurchase program. In December 2023, we announced that our Board of Directors
expects to increase the quarterly dividend from $0.70 to $0.75 per share for dividends declared in 2024, which is a
7.1% increase from the quarterly dividends we declared in 2023. This is an indication of our ability to generate strong and
consistent cash flows and marks the 21st consecutive year of dividend increases. All quarterly dividends will be declared
at the discretion of our Board of Directors and depend on various factors, including our net earnings, financial condition,
cash required for future business plans, growth and acquisitions and other factors the Board of Directors may deem
relevant.
Operations
General
To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid
waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our
Recycling Processing and Sales, and WM Renewable Energy businesses, beginning in the fourth quarter of 2023, our
senior management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal and
resource recovery services businesses independently; (ii) combine the results of all recycling facilities from our East and
West Tier segments with our recycling brokerage and sales activities to form a newly created Recycling Processing and
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Sales reportable segment and (iii) include our WM Renewable Energy business as a reportable segment. Accordingly, our
senior management now evaluates, oversees and manages the financial performance of our business through four
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 and (iv) WM Renewable Energy. Our East and West Tiers, along
with certain ancillary services (“Other Ancillary”) not managed through our Tier segments, but that support our collection
and disposal operations, form our “Collection and Disposal” businesses.
Our East Tier primarily consists of geographic areas located in the Eastern U.S., the Great Lakes region and
substantially all of Canada. Our West Tier primarily includes geographic areas located in the Western U.S., including the
upper Midwest region, and British Columbia, Canada.
We also provide additional services not managed through our four reportable segments, which are presented as
Corporate and Other. For further discussion refer to Note 19 of our Consolidated Financial Statements. Reclassifications
have been made to our prior period consolidated financial information to conform to the current year presentation.
Collection and Disposal
Services provided through our Collection and Disposal businesses are described below:
Collection. Our commitment to customers begins with a vast waste collection network. Collection involves picking
up and transporting waste and recyclable materials from where it was generated to a transfer station, recycling facility or
disposal site. We generally provide collection services under one of two types of arrangements:
• For commercial and industrial collection services, typically we have three-year service agreements. The fees
under the agreements are influenced by factors such as collection frequency, type of collection equipment we
furnish, type and volume or weight of the waste collected, distance to the disposal facility, labor costs, cost of
disposal and general market factors. As part of the service, we provide steel containers to most customers to store
their solid waste between pick-up dates. Containers vary in size and type according to the needs of our customers
and the restrictions of their communities. Many are designed to be lifted mechanically and either emptied into a
truck’s compaction hopper or directly into a disposal site. By using these containers, we can service most of our
commercial and industrial customers with trucks operated by only one employee.
• For most residential collection services, we have a contract with, or a franchise granted by, a municipality,
homeowners’ association or some other regional authority that gives us the exclusive right to service all or a
portion of the homes in an area. These contracts or franchises are typically for periods of three to ten years and
typically mirror maximum terms as allowed by statutes by state. We also provide services under
individual monthly subscriptions directly to households. The fees for residential collection are either paid by the
municipality or authority from their tax revenues or service charges, or are paid directly by the residents receiving
the service. The Company is generally phasing out traditional manual systems and moving to further automate
residential collection services. Benefits of automation include enhanced worker safety, improved service delivery
to the customer and an overall reduction in the cost to provide services.
Landfill. Landfills are the main depositories for solid waste in North America. As of December 31, 2023, we owned
or operated 258 solid waste landfills and five secure hazardous waste landfills, which represents the largest network of
landfills throughout the U.S. and Canada. As of December 31, 2023, we owned or controlled the management of 237 sites
with remedial activities, that are in closure or that have received a certification of closure from the applicable regulatory
agency. Solid waste landfills are constructed and operated on land with engineering safeguards that limit the possibility of
water and air pollution, and are operated under procedures prescribed by regulation. A landfill must meet federal, state or
provincial, and local regulations during its design, construction, operation and closure. The operation and closure activities
of a solid waste landfill include excavation, construction of liners, continuous spreading and compacting of waste, covering
of waste with earth or other acceptable material and constructing final capping of the landfill. These operations are
carefully planned to maintain environmentally safe conditions and to maximize the use of the airspace.
All solid waste management companies must have access to a disposal facility, such as a solid waste landfill. The
significant capital requirements of developing and operating a landfill serve as a barrier to landfill ownership and, thus,
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third-party haulers often dispose of waste at our landfills. It is usually preferable for our collection operations to use
disposal facilities that we own or operate, a practice we refer to as internalization, rather than using third-party disposal
facilities. Internalization generally allows us to realize higher consolidated margins and stronger operating cash flows. The
fees charged at disposal facilities, which are referred to as tipping fees, are based on several factors, including our cost to
construct, maintain and close the landfill, the distance to an alternative disposal facility, the type and weight or volume of
solid waste deposited and competition.
Under environmental laws, the federal government (or states with delegated authority) must issue permits for all
hazardous waste landfills. All of our hazardous waste landfills have obtained the required permits, although some can
accept only certain types of hazardous waste. These landfills must also comply with specialized operating standards. Only
hazardous waste in a stable, solid form, which meets regulatory requirements, can be deposited in our secure disposal cells.
In some cases, hazardous waste can be treated before disposal. Generally, these treatments involve the separation or
removal of solid materials from liquids and chemical treatments that transform waste into inert materials that are no longer
hazardous. Our hazardous waste landfills are sited, constructed and operated in a manner designed to provide long-term
containment of waste. We also operate a hazardous waste facility at which we isolate treated hazardous waste in liquid
form by injection into deep wells that have been drilled in certain acceptable geologic formations far below the base of
fresh water to a point that is safely separated by other substantial geological confining layers.
Included within our Collection and Disposal businesses are landfills having (i) 21 third-party power generating
facilities converting our landfill gas to fuel electricity generators; (ii) 14 third-party renewable natural gas (“RNG”)
facilities processing landfill gas to be sold to natural gas suppliers and (iii) two third-party projects delivering our landfill
gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes. In return for providing
our landfill gas, we receive royalties from each facility, including the benefit of a 15% royalty from our WM Renewable
Energy segment based on net operating revenue generated through the sale of RNG, renewable identification numbers
(“RINs”), electricity and capacity, Renewable Energy Credits (“RECs”) and related environmental attributes from the
83 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active landfills, which is
eliminated in consolidation.
Transfer. As of December 31, 2023, we owned or operated 332 transfer stations in the U.S. and Canada. We deposit
waste at these stations, as do other waste haulers. The solid waste is then consolidated and compacted to reduce the volume
and increase the density of the waste and transported by transfer trucks or by rail to disposal sites.
Access to transfer stations is critical to haulers who collect waste in areas not in close proximity to disposal facilities.
Fees charged to third parties at transfer stations are usually based on the type and volume or weight of the waste deposited
at the transfer station, the distance to the disposal site, market rates for disposal costs and other general market factors.
The utilization of our transfer stations by our own collection operations improves internalization by allowing us to
retain fees that we would otherwise pay to third parties for the disposal of the waste we collect. It enables us to manage
costs associated with waste disposal because (i) transfer trucks, railcars or rail containers have larger capacities than
collection trucks, allowing us to deliver more waste to the disposal facility in each trip; (ii) waste is accumulated and
compacted at transfer stations that are strategically located to increase the efficiency of our network of operations and
(iii) we can retain the volume by managing the transfer of the waste to one of our own disposal sites.
The transfer stations that we operate but do not own generally are operated through lease agreements under which we
lease property from third parties. There are some instances where transfer stations are operated under contract, generally
for municipalities. In most cases, we own the permits and will be responsible for any regulatory requirements relating to
the operation and closure of the transfer station.
Other. Other businesses providing collection and disposal services include the following:
Strategic Business Solutions (“WMSBS”) — Although many waste management services such as collection and
disposal are local services, our WMSBS business works with customers whose locations span the U.S. and Canada. Our
strategic accounts program provides these customers with streamlined service, enhanced reporting, measurement tools
aimed at meeting sustainability objectives and centralized billing and management of accounts.
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Sustainability and Environmental Solutions (“SES”) — Our SES business collaborates with our geographic areas and
WMSBS team to offer our customers end-to-end solutions that help businesses achieve their sustainability, recycling and
waste diversion goals while meeting industry-specific compliance requirements and rising environmental demands. These
solutions include (i) Sustainability Services, where our employees provide full-service waste management solutions and
consulting services, working full-time onsite at our customers’ facilities or through remote-managed programs (this service
is managed through our SES business but reflected principally in our collection line of business); (ii) remediation and
construction services; (iii) management and marketing of fly ash, which is residue generated from the combustion of coal
to generate electricity; and (iv) industrial waste services, which uses thermal and mechanical separation technologies to
minimize waste volumes and recover commodities at the point of generation. The breadth of these service offerings,
combined with our large and expanding network of technology-enabled infrastructure in recycling, organics, and
renewable energy give us the ability to help customers reduce the amount of waste they generate, identify recycling
opportunities, and determine efficient and environmentally friendly means for waste collection and disposal. Through
these services, we aim to help customers increase circularity and accelerate their decarbonization goals.
Recycling Processing and Sales
Recycling involves the separation of reusable materials from the waste stream for processing and resale or other
disposition. We are North America’s leading recycler of post-consumer materials. We not only collect materials from
households and businesses across the U.S. and Canada, we also sell them to manufacturers to be recycled and sold generally
within the North American market. Demand for recycled materials is generally growing. Several states have recently
passed minimum-recycled-content mandates, and many companies are responding to requirements for recycled content
from their own customers and to meet sustainability targets. We are helping expand the availability of recycled materials
by investing in infrastructure, increasing access to recycling services and educating customers through our Recycle Right®
program.
Our recycling operations provide communities and businesses with an alternative to traditional landfill disposal and
support our strategic goals to extract more value from the materials we manage. We were the first major solid waste
company to focus on residential single-stream recycling, which allows customers to mix clean bottles, cans, paper and
cardboard in one bin. Residential single-stream programs have greatly increased recycling volumes. Single-stream
recycling is possible through the use of various mechanized screens and optical sorting technologies. In addition to
advancing our single stream recycling programs for commercial applications, we continue to invest in recycling
technologies and businesses designed to offer services and solutions to support and grow our current operations. We are
investing in enhanced recycling facility technology at new and existing facilities to benefit labor productivity, support
increased recycling capacity and allow for dynamic adjustments to respond to evolving end-market demands. In 2023, we
opened eight new recycling facilities within the U.S. and Canada equipped with advanced recycling technology. We
continue to invest in recycling facility automation and new markets across the U.S. and Canada. Our Recycling Processing
and Sales segment includes the following:
Materials processing — Through our collection operations and third-party customer base, we collect recyclable
materials from residential, commercial and industrial customers and direct these materials to one of our recycling
facilities for processing. As of December 31, 2023, we operated 102 recycling facilities, of which 44 are single stream,
where cardboard, paper, glass, metals, plastics, construction and demolition materials and other recycling commodities
are recovered for resale or redirected for other purposes.
Recycling commodities — We market and resell recycling commodities globally. We manage the marketing of
recycling commodities that are processed in our facilities by continuously analyzing market prices, logistics, market
demands and product quality through our dedicated recycling service centers and account managers.
Recycling brokerage services — We also provide recycling brokerage services, which involve managing the
marketing of recyclable materials for third parties. Our experience in managing recycling commodities for our own
operations gives us the expertise needed to effectively manage volumes for third parties. Utilizing the resources and
capabilities of our recycling service centers and account managers, we can assist customers in marketing and selling
their recycling commodities with minimal capital requirements.
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The recyclable materials processed in our recycling facilities are received from various sources, including third parties
and our own operations. In recent years, we have been focused on reducing dependency on market prices for recycled
commodities by recovering our processing costs first. In our materials processing business, we have been transitioning our
customer base over time from the traditional rebate model, where we paid suppliers for the inbound material, to a
fee-for-service model that ensures the cost of processing the recyclable materials is covered along with an acceptable
margin. With our current fee-for-service model, the pricing for these recyclable materials can either be a charge or “tip
fee” when commodity pricing does not cover our cost to process the recyclable materials or a “rebate” when commodity
pricing is higher than our processing costs and we are able to share this benefit with the customers generating recyclable
materials. In some cases, our pricing is based on fixed contractual rates or on defined minimum per-ton rates. Generally,
this pricing also considers the price we receive for sales of processed goods, market conditions and transportation costs.
As a result, changes in commodity prices for recycled materials also significantly affect the pricing to our suppliers.
Depending on the key terms of the arrangement, these “rebates” are recorded as either operating expenses or a reduction
in operating revenues within our Consolidated Statements of Operations. If the key terms result in a charge to the customer,
the associated “tip fees” would be recorded as operating revenues within our Consolidated Statements of Operations.
WM Renewable Energy
We develop, operate and promote projects for the beneficial use of landfill gas through our WM Renewable Energy
businesses. Landfill gas is produced naturally as waste decomposes in a landfill. The methane component of the landfill
gas is a readily available, renewable energy source that can be gathered and used beneficially as an alternative to fossil
fuel. The U.S. Environmental Protection Agency (“EPA”) endorses landfill gas as a renewable energy resource, in the
same category as wind, solar and geothermal resources. As of December 31, 2023, we had 92 landfill gas beneficial use
projects producing commercial quantities of methane gas at owned or operated landfills. For 66 of these projects, the
processed gas is used to fuel electricity generators. The electricity is then sold to public utilities, municipal utilities or
power cooperatives. For 20 of these projects, the gas is used at the landfill or delivered by pipeline to industrial customers
as a direct substitute for fossil fuels in industrial processes. For six of these projects, the landfill gas is processed to
pipeline-quality RNG and then sold to natural gas suppliers. The revenues from these facilities are primarily generated
through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes. WM Renewable
Energy is charged a 15% royalty on net operating revenue from these facilities residing on our active and closed landfills
from our Collection and Disposal, and Corporate and Other businesses, which is eliminated in consolidation. Additionally,
WM Renewable Energy operates and maintains 12 third-party landfill beneficial gas use projects in return for service
revenue. Our Collection and Disposal and Corporate and Other businesses benefit from these projects as well as 32
additional third-party landfill beneficial gas use projects in the form of royalties.
WM Renewable Energy converts landfill gas into several sources of renewable energy, which include RNG, electricity
and capacity, heat and/or steam. WM Renewable Energy also generates RINs under the Renewable Fuel Standard (“RFS”)
program, other credits under a variety of state programs associated with the use of RNG in our compressed natural gas
fleet, and RECs associated with the production of electricity. The RINs, RECs and other credits are sold to counterparties
who are obligated under the regulatory programs and have a responsibility to procure RINs, RECs and other credits
proportionate to their fossil fuel production and imports. RINs and RECs prices generally respond to regulations enacted
by the EPA or other regulatory bodies, as well as fluctuations in supply and demand.
Corporate and Other
We also provide additional services that are not managed through our operating segments, which are presented in this
report as Corporate and Other as they do not meet the criteria to be aggregated with other operating segments and do not
meet the quantitative criteria to be separately reported. This includes the activities of our corporate office, including costs
associated with our long-term incentive program, expanded service offerings and solutions (such as our investments in
businesses and technologies that are designed to offer services and solutions ancillary or supplementary to our current
operations) as well as our closed sites.
Included within our Corporate and Other businesses are closed sites that include (i) five third-party power generating
facilities converting our landfill gas to fuel electricity generators; (ii) one third-party project delivering our landfill gas by
pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes and (iii) one third-party RNG
processing landfill gas to be sold to natural gas suppliers in return for a royalty. Additionally, Corporate and Other benefits
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from a 15% royalty from our WM Renewable Energy segment based on net operating revenue generated through the sale
of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the nine landfill beneficial use
renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in consolidation.
We continue to invest in businesses and technologies that are designed to offer services and solutions ancillary or
supplementary to our current operations. While most of these investments are in the form of minority equity stakes, they
can also include joint ventures, joint development agreements or majority equity stakes. The solutions and services include
(i) waste collection, processing, and recycling; (ii) the development, operation and marketing of waste processing facilities
and technologies; (iii) operation of RNG plants and (iv) the development and operation of organic recycling technologies.
Furthermore, we continually scout, evaluate and run proof-of-concepts of innovative technologies within our core
operations to improve safety, operational efficiencies and customer solutions.
Competition
We encounter intense competition from governmental, quasi-governmental and private sources in all aspects of our
operations. We principally compete with large national waste management companies, counties and municipalities that
maintain their own waste collection and disposal operations and regional and local companies of varying sizes and financial
resources. The industry also includes companies that specialize in certain discrete areas of waste management, operators
of alternative disposal facilities, companies that seek to use parts of the waste stream as feedstock for renewable energy
and other by-products, and waste brokers that rely upon haulers in local markets to address customer needs.
Operating costs, disposal costs and collection fees vary widely throughout the geographic areas in which we operate.
The prices that we charge are determined locally, and typically vary by volume and weight, type of waste collected,
treatment requirements, risk of handling or disposal, frequency of collections, distance to final disposal sites, the
availability of airspace within the geographic region, labor costs and amount and type of equipment furnished to the
customer. We face intense competition in our solid waste business based on pricing and quality of service. We also compete
for business based on breadth of service offerings. As companies, individuals and communities look for ways to be more
sustainable, we are promoting our comprehensive services that go beyond our core business of collecting and disposing of
waste in order to meet their needs.
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. While weather-related
and other event-driven special projects can boost revenues through additional work for a limited time, due to significant
start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.
Human Capital Resources
Employees
As of December 31, 2023, we had approximately 48,000 full-time employees across the U.S., Canada and India.
Approximately 44,600 employees were located within the U.S. and 3,400 employees were located outside of the U.S.
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Approximately 8,400 employees were employed in administrative and sales positions with the remainder in operations.
Approximately 8,200 of our employees are covered by collective bargaining agreements. Additional information about
our workforce can be found in our 2023 Sustainability Report at https://sustainability.wm.com. Our 2023 Sustainability
Report does not constitute a part of, and is not incorporated by reference into, this report or any other report we file with
(or furnish to) the SEC, whether made before or after the date of this Annual Report on Form 10-K.
People First Commitment
Our People First commitment means knowing that the daily contributions of our team members are what enable us to
play a vital role in the communities we serve. Our success depends upon effective leadership, the contributions of each
employee, and our ability to give them the tools they need to safely execute their roles as well as to develop and excel in
their careers. As our industry and workforce evolve, we are focused on our imperatives of keeping our employees safe,
improving diversity and inclusion (“D&I”) at all levels of our Company, managing employee turnover, increasing
retention, succession planning and development, and supporting employee experience, ongoing cultural integration and
knowledge transfer. We regularly focus on these objectives when managing our business.
We strive to be a workplace of choice through competitive pay, comprehensive benefits for long-term financial and
personal health and opportunities for growth across our ranks. "We Are WM" is our Employer Value Proposition, grounded
in our People First commitment and shared through a framework that enables us to display that we are (i) investing in our
teams by providing comprehensive benefits; (ii) committed to the growth of our team by providing state-of-the-art
trainings and our education benefit, Your Tomorrow, as further discussed under Compensation and Benefits;
(iii) performing essential and meaningful work and (iv) working for a sustainable tomorrow by leaving the world a better
place than we found it. Being an employer of choice is critical to our efforts to attract and retain a high-quality workforce,
while motivating us to sharpen our focus on our values that help us empower and develop good employees. By promoting
from within and offering training and experiential opportunities, we help employees maximize their effectiveness and
grow in their careers.
Safety as a Core Value
At the Company, safety is a core value, with no compromise. A large number of our employee population work as
drivers, heavy equipment operators and sorters, which are essential jobs that carry inherent risks. For nearly 20 years, we
have engaged employees on safety to continually improve our culture and performance. As part of those efforts, in 2023
we developed and implemented a new safety vision for WM, which seeks to ensure that our employees make health and
safety the foundation of their work, guiding each step they take. Our safety commitment is to value every voice, protect
our communities, and work to enable everyone to get home safe, every day. Employees learn safety best practices through
new-hire training, onboarding programs and ongoing training. To build upon lessons learned in training, we conduct
structured observations of frontline employees that cover all aspects of our collection and post-collection operations,
including driving, loading, unloading, lifting and lowering and arriving prepared for work. In 2022, the Company
announced a safety goal focused on reduction of our Total Recordable Incident Rate (“TRIR”) by 3% annually, targeting
TRIR of 2.0 annually by 2030. TRIR measures the number of injuries occurring per 100 employees per year (number of
injuries per 200,000 hours). Our TRIR as of December 31, 2023 and 2022 was 3.08 and 3.02, respectively. While our
overall results in 2023 did not demonstrate targeted progress toward the 2030 goal, we were able to determine that a
significant driver of the measure in the current year was related to acquisition activity. We often find that the discipline
and culture of the Company benefit acquired businesses. Accordingly, while there can be short-term impacts from
acquisitions on measures such as TRIR, we are confident that the time and resources dedicated to bolstering our safety
commitment have us on track for continued progress in the years ahead. The Company also remains focused on the
prevention of serious injuries, and reduced the number of serious injuries that resulted in multiple days away from work
or a change in job role by 8% in 2023.
Diversity and Inclusion
We embrace and cultivate respect, trust, open communications and diversity of thought and people. We are committed
to fostering an environment where all team members feel welcomed, valued and seen. We see D&I as core in everything
that we do. Our commitment to D&I starts at the top with our senior leadership team being comprised of 20% ethnic
minorities and 30% women as of December 31, 2023; and with our overall workforce in the U.S. being comprised of
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approximately 43% ethnic minorities and approximately 19% women as of the same date. We are proud of what we have
been able to achieve so far, and we will continue to strive to further embed D&I within the Company. To solidify this
commitment, in 2022 the Company developed two new D&I goals: (i) increase the overall representation of women in our
workforce and (ii) increase the representation of racial/ethnic minority employees in our manager roles and above. To
enable us to achieve our goals, we have empowered a cross-functional D&I Council to evaluate and enhance our policies,
practices and procedures, recruitment and partnerships to ensure that our D&I efforts are sustainable and are tied to our
business strategy.
Learning and Development
We offer expansive learning and development solutions to meet the development needs of our people and support
opportunities for growth and improvement. Our talent management strategy is designed to reach employees at all levels.
Given the wide variety of employee roles and skill sets in our Company, our training and development programs are varied
but generally fall into the following categories: (i) compliance, including Code of Conduct and cybersecurity training;
(ii) safety; (iii) environmental excellence; (iv) professional development and leadership and (v) job-specific.
Compensation and Benefits
The objective of our compensation and benefit programs is to attract, engage, reward and incentivize valuable
employees who will support the successful execution of our strategy. We pay the full cost to provide employees with
short-term disability benefits, long-term disability benefits, basic life insurance for the employee and their dependents, and
employee and family assistance benefits. The costs for medical and dental coverage are shared with employees, with the
Company paying for a majority of the premium expense. The Company offers other important benefits such as paid
vacation and holidays, mental health services, legal services, flexible spending accounts, dependent care assistance,
adoption assistance, employee discounts and student loan refinancing services. We also recognize the value of learning
beyond the workplace. In 2021, we announced a new education benefit, Your Tomorrow. Your Tomorrow was created in
partnership with Guild Education to pay 100% of benefits-eligible employees’ and dependents’ tuition for a broad range
of four-year college degree programs, as well as programs such as high-school equivalency and, for employees, other
certificate programs and graduate degrees. We also provide plans to help employees save for their future. Refer to Note 9
to the Consolidated Financial Statements for additional information on our employee benefit plans.
Financial Assurance and Insurance Obligations
Financial Assurance
Municipal and governmental waste service contracts generally require contracting parties to demonstrate financial
responsibility for their obligations under the contract. Financial assurance is also a requirement for (i) obtaining or
retaining disposal site or transfer station operating permits; (ii) supporting certain variable-rate tax-exempt debt and
(iii) estimated final capping, closure, post-closure and environmental remedial obligations at many of our landfills. We
establish financial assurance using surety bonds, letters of credit, insurance policies, trust and escrow agreements and
financial guarantees. The type of assurance used is based on several factors, most importantly: the jurisdiction, contractual
requirements, market factors and availability of credit capacity.
Surety bonds and insurance policies are supported by (i) a diverse group of third-party surety and insurance
companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) a wholly-owned insurance captive,
the sole business of which is to issue surety bonds and/or insurance policies on our behalf. Letters of credit generally are
supported by our long-term U.S. and Canadian revolving credit facility (“$3.5 billion revolving credit facility”) and other
credit lines established for that purpose.
Insurance
We carry a broad range of insurance coverages, including health and welfare, general liability, automobile liability,
workers’ compensation, real and personal property, directors’ and officers’ liability, pollution legal liability, cyber incident
liability and other coverages we believe are customary to the industry. Our exposure to loss for insurance claims is
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generally limited to the per-incident deductible under the related insurance policy and any amounts that exceed our insured
limits. We use a wholly-owned insurance captive to insure the deductibles for our general liability, automobile liability
and workers’ compensation claims programs. We do not expect the impact of any known casualty, property, environmental
or other contingency to have a material impact on our financial condition, results of operations or cash flows. Our estimated
insurance liabilities as of December 31, 2023 are summarized in Note 10 to the Consolidated Financial Statements.
Regulation
Our business is subject to extensive and evolving federal, state, provincial and local environmental protection, health,
safety, land use, zoning, transportation, and other related laws and regulations. These laws and regulations are administered
by the EPA, Environment and Climate Change Canada (“ECCC”), and various other federal, state, provincial and local
environmental, zoning, transportation, land use, health and safety agencies in the U.S. and Canada. Many of these agencies
regularly examine our operations to monitor compliance with these laws and regulations and have the power to enforce
compliance, obtain injunctions or impose civil or criminal penalties in cases of violations.
Our business primarily involves the collection, processing and management of solid waste and recyclables in an
environmentally sound manner, and a significant amount of our capital expenditures are related, either directly or
indirectly, to environmental protection measures, including compliance with federal, state, provincial and local laws and
regulations. There are costs associated with siting, design, permitting, construction, operating, monitoring, site
maintenance, corrective actions, financial assurance, and facility closure and post-closure obligations at our facilities. In
connection with the acquisition, development or expansion of a waste management or disposal facility, recycling facility,
compost facility, transfer station, or landfill gas-to-energy facility, we must often spend considerable time, effort and
money to obtain and maintain required permits and approvals. There are no assurances that we will be able to obtain or
maintain permits or other required governmental approvals. Once obtained, permits are subject to renewal, modification,
suspension or revocation by the issuing authority. Compliance with current regulations and future requirements could
require us to make significant capital and operating expenditures. However, most of these expenditures are made in the
normal course of business and do not place us at any competitive disadvantage.
The regulatory environment in which we operate is influenced by changes in leadership at the federal, state, provincial
and local levels. For example, divided government and election-year politics likely will impede significant federal
legislative action in 2024, leading to an expectation that the White House will continue to prioritize regulatory changes to
implement parts of its agenda, including taking steps towards reinstating, and in some cases enhancing, policies and
regulations rolled back by the previous administration. While increasing regulation may have a negative impact on our
operating costs, extensive environmental regulation applicable to our industry is also a barrier to rapid entry that benefits
our Company. Moreover, the risk reduction provided by appropriate regulation is valuable to our customers and the
communities we serve.
Federal Regulation
The primary U.S. federal statutes affecting our business are summarized below:
• The Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, regulates handling, transporting
and disposing of hazardous and non-hazardous waste and delegates authority to states to develop programs to
ensure the safe disposal of solid waste. Landfills are regulated under Subtitle D of RCRA, which sets forth
minimum federal performance and design criteria for solid waste landfills, and Subtitle C of RCRA, which
establishes a federal program to manage hazardous wastes from cradle to grave. These regulations are typically
implemented by the states, although states can impose requirements that are more stringent than the federal
standards. We incur costs in complying with these standards in the ordinary course of our operations.
• The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as
amended, which is also known as Superfund, provides for federal authority to respond directly to releases or
threatened releases of hazardous substances into the environment that have created actual or potential
environmental hazards. CERCLA’s primary means for addressing such releases is to impose strict liability for
cleanup of disposal sites upon current and former site owners and operators, generators of the hazardous
substances at the site and transporters who selected the disposal site and transported substances thereto. Liability
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under CERCLA is not dependent on the intentional release of hazardous substances; it can be based upon the
release or threatened release of hazardous substances, even resulting from lawful, unintentional and attentive
action, as the term is defined by CERCLA and other applicable statutes and regulations. The EPA may issue
orders requiring responsible parties to perform response actions at sites, or the EPA may seek recovery of funds
expended or to be expended in the future at sites. Liability may include contribution for cleanup costs incurred
by a defendant in a CERCLA civil action or by an entity that has previously resolved its liability to federal or
state regulators in an administrative or judicially-approved settlement. Liability under CERCLA could also
include obligations to a potentially responsible party (“PRP”) that voluntarily expends site clean-up costs. Further,
liability for damage to publicly-owned natural resources may also be imposed. We are subject to potential liability
under CERCLA as an owner or operator of facilities at which hazardous substances have been disposed and as a
generator or transporter of hazardous substances disposed of at other locations.
• The Federal Water Pollution Control Act of 1972, as amended, known as the Clean Water Act, regulates the
discharge of pollutants into streams, rivers, groundwater, or other surface waters from a variety of sources,
including solid and hazardous waste disposal sites. If our operations discharge any pollutants into federally
protected surface waters, the Clean Water Act requires us to apply for and obtain discharge permits, conduct
sampling and monitoring, and, under certain circumstances, reduce the quantity of pollutants in those discharges.
The EPA also requires landfills and other waste-handling facilities to obtain storm water discharge permits, and
if a landfill or other facility discharges wastewater through a sewage system to a publicly-owned treatment works,
the facility must comply with discharge limits imposed by the treatment works. Further, before the development
or expansion of a landfill can alter or affect certain “wetlands,” a permit may have to be obtained providing for
mitigation or replacement wetlands. The Clean Water Act provides for civil, criminal and administrative penalties
for violations of its provisions.
• The Clean Air Act of 1970, as amended, provides for federal, state and local regulation of the emission of air
pollutants. Many of our municipal solid waste (“MSW”) landfills and landfill gas-to-energy facilities are subject
to regulations implemented under the Clean Air Act, including new source performance standards, emission
guidelines and national emission standards for hazardous air pollutants. These regulations impose performance
standards to minimize air emissions from regulated MSW landfills, subject those landfills to certain operating
permit requirements under Title V of the Clean Air Act and, in many instances, require installation of landfill gas
collection and control systems to control emissions or to treat and utilize landfill gas on- or off-site. Our vehicle
fleet also must adhere to regulations implemented under the Clean Air Act, which authorizes the EPA to mandate
controls on air pollution from mobile sources.
• The Occupational Safety and Health Act of 1970, as amended, establishes certain employer responsibilities,
including maintenance of a workplace free of recognized hazards likely to cause death or serious injury,
compliance with standards promulgated by the Occupational Safety and Health Administration, and various
reporting and record keeping obligations as well as disclosure and procedural requirements. Various standards
for notices of hazards, safety in excavation and demolition work and the handling of asbestos, may apply to our
operations. The Department of Transportation and the Occupational Safety and Health Administration, along with
other federal agencies, have jurisdiction over certain aspects of hazardous materials and hazardous waste,
including safety, movement and disposal. Various state and local agencies with jurisdiction over disposal of
hazardous waste may seek to regulate movement of hazardous materials in areas not otherwise preempted by
federal law.
State, Provincial and Local Regulations
There are also various state, provincial and local regulations that affect our operations. Each state and province in
which we operate has its own laws and regulations governing solid waste disposal, water and air pollution, and, in most
cases, releases and cleanup of hazardous substances and liabilities for such matters. States and provinces have also adopted
regulations governing the design, operation, maintenance and closure of landfills and transfer stations, and laws governing
where recyclable materials can be sold. Some counties, municipalities and other local governments have adopted similar
laws and regulations that apply to our facilities and operations.
Our landfill operations are affected by the increasing preference for alternatives to landfill disposal. Many state and
local governments mandate recycling and waste reduction at the source and prohibit the disposal of certain types of
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materials at landfills, such as recyclable materials (cardboard, bottles and cans), yard waste, food waste and electronics.
The number of state and local governments with recycling and diversion requirements and disposal bans continues to
grow, while the logistics and economics of recycling or processing many of these items remain challenging.
Various states have enacted, or are considering enacting, laws that restrict or discourage the disposal within the state
of solid waste generated outside the state. While laws that overtly discriminate against out-of-state waste have been found
to be unconstitutional, some laws that are less overtly discriminatory have been upheld in court. From time to time, the
U.S. Congress has considered legislation authorizing states to adopt regulations, restrictions, or taxes on the importation
of out-of-state or out-of-jurisdiction waste. Additionally, several state and local governments have enacted “flow control”
regulations, which attempt to require that all waste generated within the state or local jurisdiction be deposited at specific
sites, which has been upheld by the U.S. Supreme Court for waste directed to facilities owned by the local government.
The U.S. Congress’ adoption of legislation allowing restrictions on interstate transportation of out-of-state or
out-of-jurisdiction waste or certain types of flow control, or courts’ interpretations of interstate waste and flow control
legislation, could adversely affect our solid and hazardous waste management services.
Additionally, regulations establishing extended producer responsibility (“EPR”) are being considered or implemented
in many places around the world, including in the U.S. and Canada. EPR regulations are designed to place either partial
or total responsibility on producers of consumer-packaged goods and other products to fund the post-use life cycle of the
products they create. Along with the funding responsibility, producers may be required to undertake additional
responsibilities, such as taking over management of local recycling programs by taking back their products from end users
or managing the collection operations and recycling processing and marketing infrastructure. During periods of economic
difficulty, governmental entities have increased their interest in implementing EPR regulations to reduce municipal
spending on recycling programs. There is no federal law establishing EPR in the U.S. or Canada; however, federal, state,
provincial and local governments could take, and in some cases have taken, steps to implement EPR regulations for
packaging, including traditional recyclables such as cardboard, bottles and cans. If wide-ranging EPR regulations were
adopted, they could significantly impact the waste, recycling and other streams we manage, including with respect to
quality and volume, and how we operate our business, including contract terms and pricing.
Many states, provinces and local jurisdictions have enacted “fitness” laws that allow the agencies that have jurisdiction
over waste services contracts or permits to deny or revoke these contracts or permits based on the applicant’s or permit
holder’s compliance history. Some states, provinces and local jurisdictions also consider the compliance history of the
parent, subsidiaries or affiliated companies, in addition to the applicant or permit holder. These laws authorize the agencies
to make determinations of an applicant’s or permit holder’s fitness to be awarded a contract to operate, and to deny or
revoke a contract or permit because of unfitness, unless there is a showing that the applicant or permit holder has been
rehabilitated through the adoption of various operating policies and procedures put in place to assure future compliance
with applicable laws and regulations. While fitness laws can present potential increased costs and barriers to entry into
market areas, these laws have not, and are not expected to have a material adverse impact on our business as a whole.
Recent Developments and Focus Areas in Policy and Regulation
Climate and Sustainability
Jurisdictions are increasingly taking action to reduce greenhouse gas (“GHG”) emissions through a broad range of
climate policies. Landfills are one of the focal points for advancing climate-related goals, and we are actively working
with policymakers to promote recognition of the significant reductions in GHG emissions that our industry already has
achieved and the work being done to further measure and reduce emissions, the challenges associated with quantifying
landfill emissions precisely, and the role of our sector in providing an essential, and highly regulated, public service.
We are also closely monitoring the evolving capabilities of ground, aerial, and satellite-based methane detection and
monitoring systems and conducting our own research at several landfills to assess accuracy and reliability of various
methane measurement technologies for applicability to our operations. We continue to expand our work with various
private and government entities employing ground, aerial and satellite-based measurements of our sites. As these
technologies are expected to advance rapidly in the coming years, we are actively engaged with the ECCC, the EPA,
nongovernmental organizations, and environmental stakeholders on the implications of the changing landscape for the
waste industry and potential future regulation. Continued dialogue with these regulatory agencies will be important in
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2024 as both the EPA and the ECCC are expected to evaluate landfill emissions standards that may require the application
of various emerging methane measurement technologies. The EPA has indicated that methane emissions from landfills
will be a focus of its expanded National Enforcement and Compliance Initiatives for 2024 through 2027. Both the EPA
and the ECCC also plan to develop methods and standards for advanced measurement technologies, and we are actively
engaged and collaborating with the agencies in these efforts, leveraging our own study results and experiences.
In light of regulatory and business developments related to concerns about climate change, we have identified strategic
business opportunities to provide our public and private sector customers with sustainable solutions intended to reduce
their carbon footprint. As part of our ongoing marketing evaluations, we assess customer demand for and opportunities to
develop waste services with potential to avoid lifecycle emissions, such as waste reduction, increased recycling,
composting, and conversion of landfill gas and discarded materials into renewable energy. We use carbon life cycle
assessment tools in evaluating potential new services and in establishing the value proposition that makes us attractive as
an environmental service provider. We are active in support of public policies that encourage development and use of
lower carbon energy and waste services that can lower life-cycle carbon footprints. We understand the importance of broad
stakeholder engagement in these endeavors, and actively seek opportunities for public policy discussion on more
sustainable materials management practices. In addition, we work with stakeholders at the federal, state, and provincial
level in support of legislation that encourages production and use of renewable, low-carbon fuels and electricity.
There is increasing governmental and stakeholder interest in environmental, social and governance (“ESG”) matters.
In addition, the nature, scope, and complexity of the matters that our Company must assess, quantify and disclose are
expanding due to current, proposed, and recently enacted federal and state reporting requirements pertaining to climate
related risks and other topics. For example, in October 2023, the California Governor signed into law the Climate Corporate
Data Accountability Act and the Climate-Related Financial Risk Act, which among other things, requires the disclosure
of Scope 1, 2, and 3 GHG emissions and other climate-related risks consistent with the framework established by the Task
Force on Climate-Related Financial Disclosures. We will be required to begin making disclosures in compliance with
certain of these requirements in 2026, with additional disclosures required beginning in 2027. The SEC has also issued a
proposed rule that would require registrants to include certain climate-related disclosures in their registration statements
and periodic reports including, but not limited to, information about our governance and management of climate-related
risks and metrics pertaining to emissions data and climate-related targets and goals. Methodology and timelines for
mandatory emissions reporting requirements, such as the recently passed California Corporate Data Accountability Act,
may be inconsistent with requirements enacted by other governmental entities, including disclosure requirements that are
ultimately adopted by the SEC, which could further increase costs and divert management time and attention. Disclosures
related to GHG emissions data or potential climate-related impacts could also negatively affect our reputation to the extent
we are perceived as not meeting individual stakeholder climate-related expectations.
Our industry faces challenges to implement these rapidly developing disclosure requirements, as well as the risk of
enforcement actions by governmental and regulatory agencies for noncompliance. Significant expenditures and
commitment of time by management, employees and consultants is involved in developing, implementing and overseeing
policies, practices, additional disclosures and internal controls related to environmental and sustainability risk and
performance. Public statements with respect to ESG matters are becoming increasingly subject to heightened scrutiny from
public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false
claims overstating potential ESG benefits. We are aware that non-governmental organizations and other private actors
have filed lawsuits against certain companies under various securities and consumer protection laws alleging that certain
ESG-related statements, goals or standards were misleading, false or otherwise deceptive.
Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have
published our 2023 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
https://sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Annual
Report on Form 10-K. The Company also participates in a number of voluntary reporting programs and frameworks that
provide further transparency on our commitment to sustainability.
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PFAS
Federal and state governments have increased their focus on efforts to safeguard communities from the potentially
harmful effects associated with per- and polyfluoroalkyl substances (“PFAS”). PFAS are a large group of chemicals that
have been used in industrial and consumer products since the 1940s, including in products as diverse as carpets, paints and
stains, water-resistant clothing and fabrics, nonstick cookware, food packaging, and firefighting chemicals. Possible
human health effects of exposure to certain PFAS compounds may include low infant birth weights, immune system
impacts, or cancer.
In 2021, the EPA released its PFAS Strategic Roadmap, providing a high-level overview of activities that the agency
intends to take to safeguard public health, protect the environment, and hold polluters accountable. These actions include
establishing drinking water standards, evaluating landfill discharges of PFAS in leachate, finalizing new risk assessments
and test procedures, and updating guidance on PFAS disposal and destruction options. During 2022, the EPA proposed
the designation of two PFAS compounds (perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)) as
hazardous substances under CERCLA. We are closely monitoring this proposed rulemaking and are actively working with
both Congress and the EPA to provide landfills and other essential public services with relief from CERCLA liability and
instead hold accountable manufacturers and heavy users of these compounds. Without such relief, we may face increased
exposure to remediation and litigation costs associated with properties that the EPA may designate as CERCLA sites due
to the presence of PFAS. A final rule is expected in 2024. Additionally, in 2023, the EPA published an advance notice of
proposed rulemaking seeking public input and data to assist in the consideration of potential future regulations under
CERCLA regarding seven additional PFAS compounds. At the state level, an increasing number of jurisdictions have
enacted new drinking water, surface water and/or groundwater limits for various PFAS, which has led to a patchwork of
PFAS standards across the U.S. Compliance with new and proposed state and federal PFAS standards is anticipated to
result in additional expense to the Company, but such standards are also anticipated to present potential business
opportunities in the area of PFAS management, treatment and disposal.
Recycling; Foreign Import and Export Regulations and Material Restrictions
In recent years, new and updated regulations affecting, and in some cases restricting, the international flow of certain
recyclables have led to a reduction in export activity for such recyclables, as well as higher quality requirements, and
higher processing costs. As an example, on January 1, 2021, new restrictions on the international trade of most plastics
went into effect as part of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and
Their Disposal. At this time, the U.S. is not a party to the Basel Convention, but most countries to which we export
commodities are, which may limit our ability to export certain plastics. However, we do not ship plastics collected on our
residential recycling routes and processed at our single stream recycling facilities to locations outside of North America.
Prices and demand for recyclables fluctuate. We have discussed our sustainability growth strategy that includes
planned and ongoing investments in our recycling business to increase automation and reduce labor dependency. Such
investments are also targeted at addressing increases in regulatory- and customer-driven quality requirements for
commodities. These investments increase our exposure to commodity price fluctuations. We mitigate some of the effects
of price fluctuation through the contract terms pursuant to which we sell commodities, such as floor pricing. Additionally,
future regulation, tariffs, international trade policies or other initiatives, including regulations addressing climate change
or GHG emissions, may impact supply and demand of material, or increase operating costs, which could impact the
profitability of our recycling operations.
With a heightened awareness of the global problems caused by plastic waste in the environment, Canada and an
increasing number of cities and states across the U.S. have passed ordinances banning certain types of plastics from sale
or use. The most common materials banned include plastic bags and straws, polystyrene plastic, and some types of single
use packaging. These bans have resulted in increased pressure by manufacturers on our recycling facilities to accept a
broader array of materials in curbside recycling and composting programs to alleviate public pressures to ban the sale of
those materials. However, with no or limited viable end markets for many of these materials, we and other recyclers are
working to educate and remind customers of the need for end market demand and economic viability to support sustainable
recycling programs. We are also making investments in end markets to support the collection and processing of some of
these materials. With increased focus on responsible management of plastics, our procurement team has taken a proactive
approach to ensure environmental sustainability goals are prioritized in managing the products we buy.
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Tax Legislation
The Inflation Reduction Act of 2022 (“IRA”) was signed into law by President Biden on August 16, 2022, and contains
a number of 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 related to alternative fuel tax credits secure
approximately $55 million of annual pre-tax benefit (recorded as a reduction in our operating expense) for tax credits in
2022, 2023 and 2024.
With respect to the investment tax credit, as expanded by the IRA, we expect the cumulative benefit to be between
$250 million and $350 million, a large portion of which is anticipated to be realized in 2024 through 2026. Recently,
however, the IRS issued proposed regulations applicable to the investment tax credits that could call into question our
ability to realize some, or all, of this tax benefit, which would negatively impact financial expectations in connection with
our significant planned and ongoing investments in sustainability growth projects in our WM Renewable Energy segment.
The proposed regulations provide a public comment period, culminating in public hearings before the Treasury
Department, to allow taxpayers to provide input prior to the issuance of final regulations. In coordination with other
members of the RNG industry, we are actively using this public comment period to work with external advisors, the
U.S. Congress, the current federal administration, and other biogas sector stakeholders to encourage the Treasury
Department to further refine its analysis prior to publication of final regulations that more accurately reflect the express
language and legislative intent of the statute with respect to the investment tax credit. However, there is no guarantee that
such efforts will be successful. We expect that the production tax credit incentives for investments in renewable energy
and carbon capture, as expanded by the IRA, will likely result in an incremental benefit to the Company, although at this
time, the anticipated amount of such benefit has not been quantified.
Our current expectation is that the IRA’s minimum corporate tax will not have an impact on the Company. Finally, in
accordance with the IRA, we incurred a nondeductible excise tax of 1% on the net value of certain stock repurchases in
2023, which is reflected in the cost of purchasing the underlying shares as a component of treasury stock in our
Consolidated Balance Sheet.
Additionally, numerous countries have agreed to a statement in support of the Organization for Economic
Co-operation and Development (“OECD”) model rules that propose a global minimum tax rate of 15%. The Company
operates in countries that have agreed to implement the global minimum tax, and the OECD continues to refine technical
guidance for such. At this time, we do not expect the 15% global minimum tax to have a material, if any, impact to our
income taxes, and we will continue to monitor and evaluate the potential impact on our business in future periods.
Investment in Natural Gas Vehicles and Infrastructure
We operate a large fleet of natural gas vehicles, and we plan to continue to invest in these assets for our collection
fleet. Natural gas fueling infrastructure is not yet broadly available in the U.S. and Canada; as a result, we have constructed
and operate natural gas fueling stations, some of which also serve the public or pre-approved third parties. There is
increasing pressure to reduce the use of fossil fuel in the heavy-duty truck industry, and some regulatory bodies are
pursuing requirements for using alternative engine technology, such as electric powered vehicles, rather than natural gas
or diesel vehicles. This is resulting in regulatory actions to advance the adoption of zero-emission vehicles and a shift
away from tax incentives and grants for natural gas trucks and RNG infrastructure. For example, California is at various
stages of regulation that would require heavy-duty vehicle fleets to phase-in zero-emissions vehicles. The extent to which
other states adopt California’s standards into their own regulatory frameworks could accelerate the industry-wide adoption
of electric vehicles.
Although current options for heavy-duty electric vehicles lack sufficient range and proven experience for our
operations, we are proactively engaging in pilots of electric powered heavy-duty vehicles and anticipate that we could
redirect future planned capital investments in our fleet toward these assets when the vehicles prove economically and
operationally viable. We also are actively working with policymakers to understand the challenges involving the
electrification of heavy-duty collection vehicles. Should regulation mandate an accelerated transition to electric powered
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vehicles, our cost to acquire vehicles needed to service our customers could increase, capital investment required to
establish sufficient charging infrastructure could be significant and investments we have made in an industry-leading
natural gas fleet and infrastructure could be impaired. In addition, tax incentives and grants that advance the adoption of
zero-emissions vehicles and lead to a shift away from natural gas trucks and RNG infrastructure would likely also
negatively impact our investments in landfill gas-to-energy facilities.
WM Renewable Energy
In recent years, we have discussed our sustainability growth strategy that includes significant planned and ongoing
investments in our WM Renewable Energy segment. We have invested, and continue to invest, in facilities to capture
methane produced from the Company’s landfills and convert it into RNG and electricity. RNG produced from our landfills,
as well as dairy biogas, constitute a significant source of fuel allocated to our natural gas collection vehicles. Following
enactment of the IRA, which included expanded tax credits for the construction of new RNG production facilities, we
expect to accelerate our investments in this area. The Company’s investment in renewable energy production is guided
partly by the EPA’s implementation of the RFS program, which promotes the production and use of renewable
transportation fuels. Many of our facilities are EPA-registered producers of transportation fuel making compressed and
liquefied RNG from landfill biogas, which qualifies as a cellulosic biofuel under the RFS program. Oil refiners and
importers are required through the RFS program to blend specified volumes of various categories of renewable
transportation fuels with gasoline or buy credits, referred to as RINs, from renewable fuel producers.
Prior to 2022, the EPA had promulgated rules on an annual basis establishing refiners’ obligations to purchase RNG
and other cellulosic biofuels under the RFS program, which introduced a level of uncertainty into the renewable fuels and
RINs market. However, in 2023, the EPA issued a highly anticipated rule establishing biofuel blending volumes under the
RFS program for compliance years 2023 through 2025. The rule reflected the outsized role of biogas under the program,
delivered on many reforms that benefit the solid waste sector, and recognized the continued growth of the market for RNG
in vehicle applications. However, we cannot be certain that these changes, or the outcome of litigation challenging various
aspects of the rule, will ultimately reduce volatility in the RINs market or that future rulemakings will be similarly
favorable to our business. We continue to advocate for the current administration to implement policies that could reduce
the potential for volatility in the RINs market and ensure long-term stability for renewable transportation fuels, as changes
in the RFS market or the structure of the RFS program can and has impacted the financial performance of the facilities
constructed to capture and treat the gas. We are closely working with state policymakers and non-governmental
stakeholders to understand the role of RNG as a renewable energy resource and in delivering GHG reductions.
The Company’s sustainability growth strategy also is informed by the increased adoption of state and Canadian clean
fuel standard programs, utility policies, and voluntary market demand for RNG in transportation and industrial
applications. Clean fuel standard programs, originally developed in California and subsequently adopted in Oregon and
Washington, establish annual carbon intensity benchmarks for transportation fuels that decrease over time. These programs
operate similar to the RFS program in that certain regulated parties purchase credits from fuel producers, including RNG
producers, to meet their carbon intensity obligations. Like RINs, clean fuel standard program credit values can fluctuate
with policy and market dynamics. As such, we are advocating for existing programs to adopt measures to promote stability
in credit pricing and for other states to adopt similar programs that incentivize the growth in RNG. We also are working
closely with stakeholders to encourage the voluntary market for RNG demand, including utility RNG procurement
programs, and sustainability protocols, as companies and other customers increasingly look to reduce their greenhouse gas
emissions profiles.
Environmental Justice
Federal, state, and local governments are increasingly adopting requirements for environmental justice reviews as part
of certain permitting decisions. These policies generally require permitting agencies to give heightened attention to the
potential for projects to disproportionately impact low-income and minority communities. To that end, federal and state
agencies have developed a number of screening tools, such as the EPA’s EJScreen, to aid and support relevant regulatory
bodies in implementing various programs, such as permitting. Environmental justice considerations are also being
increasingly adopted beyond permitting actions; for example, in rulemaking and enforcement priorities. In August 2023,
the EPA announced that it would integrate environmental justice into each of its National Enforcement and Compliance
Initiatives, and, in November 2023, the agency published a draft update to its Technical Guidance for Assessing
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Environmental Justice in Regulatory Analysis which aims to provide agency analysts with the approaches and methods to
use in evaluating environmental justice concerns in regulatory actions. Our Company supports policies seeking to advance
high standards of environmental performance and the fair treatment of people of all races, cultures, and incomes, and we
continue to proactively engage with local communities. We are actively monitoring recent regulatory developments in this
area, particularly with respect to permitting, as additional conditions imposed on permitting decisions could increase the
time and cost involved to pursue and maintain necessary authorizations.
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Item 1A. Risk Factors.
Our business, financial condition and results of operations are subject to numerous risks and uncertainties. You should
carefully consider the following risk factors in conjunction with “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Item 7 and our “Financial Statements and Supplementary Data” in Item 8. In
addition to the following risks, there may be additional risks and uncertainties that adversely affect our business,
performance, or financial condition in the future that are not presently known or are not currently believed to be material.
Strategy and Operational Risks
If we fail to implement our business strategy, our financial performance and our growth could be materially and
adversely affected.
Our future financial performance and success are dependent in large part upon our ability to implement our business
strategy successfully. Implementation of our strategy will require effective management of our operational, financial and
human resources and will place significant demands on those resources. See Item 1. Business for more information on our
business strategy. There are risks involved in pursuing our strategy, including the following:
• Our employees, customers or investors may not embrace and support our strategy.
• We may not be able to hire or retain the personnel necessary to manage our strategy effectively.
• A key element of our strategy is yield management through focus on price leadership, which has presented
challenges to keep existing business and win new business at reasonable returns. We also utilize an energy
surcharge and other mandated fees. The loss of volumes as a result of price increases and our unwillingness to
pursue lower margin volumes may negatively affect our cash flows or results of operations. Additionally, we
have in the past and may in the future face purported class action lawsuits related to our customer service
agreements, prices and fees.
• We may be unsuccessful in implementing our technology-led automation and optimization strategy and other
improvements to operational efficiency and such efforts may not yield the intended result.
• We may not be able to maintain cost savings achieved, including through our automation and optimization efforts,
due to inflationary cost pressure or otherwise.
• Strategic decisions with respect to our asset portfolio may result in impairments to our assets.
• Our ability to make strategic acquisitions depends on our ability to identify desirable acquisition targets, negotiate
advantageous transactions despite competition for such opportunities, fund such acquisitions on favorable terms,
obtain regulatory approvals and realize the benefits we expect from those transactions.
• Acquisitions, investments and/or new service offerings or lines of business may not increase our earnings in the
timeframe anticipated, or at all, due to difficulties operating in new markets or providing new service offerings
or lines of business, failure of technologies to perform as expected, failure to operate within budget, integration
issues, or regulatory issues and compliance costs, among others, and we may experience issues successfully
integrating acquisitions into our internal controls, operations, and/or accounting systems.
Integration of acquisitions and/or new services offerings or lines of business could increase our exposure to the
risk of inadvertent noncompliance with applicable laws and regulations, and additional expansion into markets
outside of North America would result in our business being subject to new laws and regulatory regimes, resulting
in greater exposure to risk of inadvertent noncompliance and additional compliance costs.
•
• Liabilities associated with acquisitions, including ones that may exist only because of past operations of an
acquired business, may prove to be more difficult or costly to address than anticipated, and businesses or assets
we acquire may have undisclosed liabilities, despite our efforts to minimize exposure to such risks through due
diligence and other measures.
• Execution of our strategy, including growth through acquisitions and our planned expansion of our Recycling
Processing and Sales and WM Renewable Energy segments, may cause us to incur substantial additional
indebtedness, which may divert capital away from our traditional business operations and other financial plans,
and may introduce additional risks and volatility to our financial performance.
• Supply chain, regulatory or permitting disruptions or delays could detrimentally impact the execution timeline
for our planned expansion of our Recycling Processing and Sales and WM Renewable Energy businesses.
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• We continue to seek to divest underperforming and non-strategic assets if we cannot improve their profitability.
We may not be able to successfully negotiate the divestiture of underperforming and non-strategic operations,
which could result in asset impairments or the continued operation of low-margin businesses.
In addition to the risks set forth above, implementation of our business strategy could also be affected by other factors
beyond our control, such as increased competition, legal developments, government regulation, general economic
conditions, including slower growth or recession, increased operating costs or expenses, subcontractor costs and
availability and changes in industry trends. We may decide to alter or discontinue certain aspects of our business strategy
at any time. If we are not able to implement our business strategy successfully, our long-term growth and profitability may
be adversely affected. Even if we are able to implement some or all of the initiatives of our business strategy successfully,
our operating results may not improve to the extent we anticipate, or at all.
Our operations must comply with extensive existing regulations, and changes in regulations, including with respect
to emerging contaminants and extended producer responsibility, can restrict or alter our operations, increase our
operating costs, increase our tax rate, or require us to make additional capital expenditures.
Stringent government regulations at the federal, state, provincial and local level in the U.S. and Canada have a
substantial impact on our operations, and compliance with such regulations is costly. Many complex laws, rules, orders
and interpretations govern environmental protection, health, safety, land use, zoning, transportation and related matters.
Among other things, governmental regulations and enforcement actions restrict our operations at times and may adversely
affect our financial condition, results of operations and cash flows by imposing conditions such as:
•
•
•
limitations on siting and constructing new waste disposal, transfer, recycling or processing facilities or on
expanding existing facilities;
limitations, regulations or levies on collection and disposal prices, rates and volumes;
limitations, bans, taxes or charges on disposal or transportation of out-of-state waste or certain categories of
waste;
• mandates regarding the management of solid waste and other materials, including requirements to recycle, divert
or otherwise process certain waste, recycling and other streams; or
limitations or restrictions on the recycling, processing or transformation of waste, recycling and other streams.
•
Regulations affecting the siting, design and closure of landfills require us, at times, to undertake investigatory or
remedial activities, curtail operations or close landfills temporarily or permanently. We have significant financial
obligations relating to final capping, closure, post-closure and environmental remediation at our existing landfills and we
establish accruals for these estimated costs. Expenditures could be accelerated or materially exceed our accruals due to
earlier than expected closure of landfills; the types of waste collected and manner in which it is transported and disposed
of, including actions taken in the past by companies we have acquired or third-party landfill operators; environmental
regulatory changes; new information about waste types previously collected, such as per- and polyfluoroalkyl substances
(“PFAS”) or other emerging contaminates and other reasons.
Federal and state governments have increased their focus on efforts to safeguard communities from the potentially
harmful effects associated with PFAS. See Item 1. Business – Regulation – Recent Developments and Focus Areas in
Policy and Regulation – PFAS for additional background information. The EPA proposed the designation of two PFAS
compounds as hazardous substances under CERCLA. We are closely monitoring this proposed rulemaking and are actively
working with both Congress and the EPA to provide landfills and other essential public services with relief from CERCLA
liability and instead hold accountable manufacturers and heavy users of these compounds. Without such relief, we may
face increased exposure to remediation and litigation costs associated with properties that the EPA may designate as
CERCLA sites due to the presence of PFAS.
Additionally, regulations establishing extended producer responsibility (“EPR”) are being considered or implemented
in many places around the world, including in the U.S. and Canada. EPR regulations are designed to place either partial
or total responsibility on producers of consumer-packaged goods and other products to fund the post-use life cycle of the
products they create. Along with the funding responsibility, producers may be required to undertake additional
responsibilities, such as taking over management of local recycling programs by taking back their products from end users
or managing the collection operations and recycling processing and marketing infrastructure. During periods of economic
difficulty, governmental entities have increased their interest in implementing EPR regulations to reduce municipal
spending on recycling programs. There is no federal law establishing EPR in the U.S. or Canada; however, federal, state,
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provincial and local governments could, and in several cases have, taken steps to implement EPR regulations for
packaging, including traditional recyclables such as cardboard, bottles and cans. If wide-ranging EPR regulations were
adopted, they could significantly impact the waste and recycling streams we manage and how we operate our business,
including contract terms and pricing. A significant reduction in the waste, recycling and other streams we manage,
including with respect to quality and volume, could have a material adverse effect on our financial condition, results of
operations and cash flows.
Our business is subject to operational and safety risks, including the risk of personal injury to employees and others.
Providing environmental and waste management services, including constructing and operating landfills, transfer
stations, recycling facilities and other disposal facilities, and landfill gas-to-energy facilities, involves risks such as truck
accidents, equipment defects, malfunctions and failures, and improper use of dangerous equipment. Additionally, we
closely monitor and manage landfills to minimize the risk of waste mass instability, releases of hazardous materials, and
odors that are sometimes triggered by weather or natural disasters. There are also risks presented by the potential for
subsurface heat reactions causing elevated landfill temperatures and increased production of leachate, landfill gas and
odors. We also build and operate natural gas fueling stations, some of which also serve the public or third parties. Operation
of fueling stations and landfill gas collection and control systems, as well as operation of heavy machinery and
management of flammable materials at our recycling facilities and transfer stations, involves additional risks of fire and
explosion. Any of these risks could potentially result in injury or death of employees and others, a need to shut down or
reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental
damage, and property damage or destruction.
While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and
recovery programs, as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in
excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected.
Any such incidents could also tarnish our reputation and reduce the value of our brand. Additionally, a major operational
failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding
increase in operating expense.
We may be unable to obtain or maintain required permits or expand existing permitted capacity at our landfills, due
to land scarcity, public opposition or otherwise, which can require us to identify disposal alternatives, resulting in
decreased revenue and increased costs.
Our ability to meet our financial and operating objectives depends in part on our ability to obtain and maintain the
permits necessary to operate landfill sites and transfer stations. Permits to build, operate and expand solid waste
management facilities, including landfills and transfer stations, have become more difficult and expensive to obtain and
maintain. Permits often take years to obtain as a result of numerous hearings and compliance requirements with regard to
zoning, environmental and other regulations. These permits are also often subject to resistance from citizen or other groups
and other political pressures. Local communities and citizen groups, adjacent landowners or governmental agencies may
oppose the issuance of a permit or approval we may need, allege violations of the permits under which we currently operate
or laws or regulations to which we are subjected, or seek to impose liability on us for alleged environmental damage. Such
actions could also impact our ability to do business by causing reputational harm. Federal, state and local governments are
also increasingly adopting requirements for environmental justice reviews as part of certain permitting decisions. These
policies generally require permitting agencies to give heightened attention to the potential for projects to disproportionately
impact low-income and minority communities. Responding to permit challenges has, at times, increased our costs and
extended the time associated with establishing new facilities and expanding existing facilities. In addition, failure to receive
regulatory and zoning approval, as well as land scarcity, particularly in densely populated areas, may prohibit us from
establishing new facilities or expanding existing facilities. Diminishing disposal capacity, typically in proximity to major
metropolitan areas, sometimes requires us to transport waste by rail or find alternative disposal solutions in affected areas,
increasing our operating costs. Our failure to obtain the required permits and necessary capacity expansion to operate our
landfills could have a material adverse impact on our financial condition, results of operations and cash flows.
If we are unable to attract, hire or retain key team members and a high-quality workforce, or if our succession
planning does not develop an adequate pipeline of future leaders, it could disrupt our business, jeopardize our
strategic priorities and result in increased costs, negatively impacting our results of operations.
Our operations require us to attract, hire, develop and retain a high-quality workforce to provide a superior customer
experience. This includes key individuals in leadership and specialty roles, as well as a very large number of drivers,
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technicians and other front-line and back-office team members necessary to provide our environmental services. We
experience significant competition to hire and retain individuals for certain front-line positions, such as commercial truck
drivers, from within and outside our industry. (Also see Item 1A. Risk Factors — Market disruption, including labor
shortages and supply chain constraints, and macroeconomic pressures, including inflation, have adversely impacted our
business and results of operations.) Additionally, the market for employees that serve on our digital team is highly
competitive. As we have accelerated our investments in our technology-led automation and optimization strategy, it is
increasingly important that we are able to attract and retain employees with the skills and expertise necessary to implement
and manage these projects. We also compete to attract skilled business leaders, and our own key team members are sought
after by our competitors and other companies. We make significant investments, and engage in internal succession
planning, to provide us with a robust pipeline of future leaders. If we are not able to attract, hire, develop and retain a
high-quality workforce with the necessary skills and expertise, as well as key leaders, or if we experience significant
employee turnover, it can result in business and strategic disruption, increased costs, and loss of institutional knowledge,
which could negatively impact our results of operations.
Our business depends on our reputation and the value of our brand.
We believe we have developed a reputation for high-quality service, reliability and social and environmental
responsibility, and we believe our brand symbolizes these attributes. The WM brand name, trademarks and logos and our
reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting them.
Adverse publicity, whether or not justified, relating to activities by our operations, employees or agents, or challenges to
our assertions of social and environmental responsibility, could tarnish our reputation and reduce the value of our brand.
(Also see Item 1A. Risk Factors — Focus on, and regulation of, environmental, social and governance (“ESG”)
performance and disclosure can result in increased costs, risk of noncompliance, damage to our reputation and related
adverse effects.) Damage to our reputation could reduce demand for our services and potentially have an adverse effect on
our financial condition, liquidity and results of operations, as well as require additional resources to rebuild our reputation
and restore the value of our brand.
We have made significant investments in an extensive natural gas truck fleet, which makes us partially dependent on
the availability of natural gas and fueling infrastructure and vulnerable to natural gas prices, and requirements to
transition to other vehicle types could impair these investments.
We operate a large fleet of natural gas vehicles, and we plan to continue to invest in these assets for our collection
fleet. However, natural gas fueling infrastructure is not yet broadly available in the U.S. and Canada; as a result, we have
constructed and operate natural gas fueling stations, some of which also serve the public or pre-approved third parties. It
will remain necessary for us to invest capital in fueling infrastructure to power our natural gas fleet. Additionally,
fluctuations in the price and supply of natural gas could substantially increase our operating expenses; a reduction in the
existing cost differential between natural gas and diesel fuel could materially reduce the benefits we anticipate from our
investment in natural gas vehicles.
There is increasing pressure to reduce the use of fossil fuel in the heavy-duty truck industry, and some regulatory
bodies are pursuing requirements for using alternative engine technology, such as electric powered vehicles, rather than
natural gas or diesel vehicles. This is resulting in regulatory actions to advance the adoption of zero-emission vehicles and
a shift away from tax incentives and grants for natural gas trucks and RNG infrastructure. For example, California is at
various stages of regulation that would require heavy-duty vehicle fleets to phase-in zero-emissions vehicles. The extent
to which other states adopt California’s standards or something similar into their own regulatory frameworks could
accelerate the industry-wide adoption of electric vehicles. Although current options for heavy-duty electric vehicles lack
sufficient range and proven experience for our operations, we are proactively engaging in pilots of electric powered
heavy-duty vehicles and anticipate that we could redirect future planned capital investments in our fleet toward these assets
when the vehicles prove economically and operationally viable. Should regulation mandate an accelerated transition to
electric powered vehicles, our cost to acquire vehicles needed to service our customers could increase, capital investment
required to establish sufficient charging infrastructure could be significant and investments we have made in an industry-
leading natural gas fleet and infrastructure could be impaired. In addition, tax incentives and grants that advance the
adoption of zero-emissions vehicles and lead to a shift away from natural gas trucks and RNG infrastructure would likely
also negatively impact our investments in landfill gas-to-energy facilities.
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Increases in our labor costs as a result of labor unions organizing, changes in regulations related to labor unions or
increases in employee minimum wages, could adversely affect our future results.
Labor unions continually attempt to organize our employees, and these efforts will likely continue in the future.
Certain groups of our employees are currently represented by unions, and we have negotiated collective bargaining
agreements with these unions. Additional groups of employees may seek union representation in the future, and, if
successful, would enhance organized labor’s leverage to obtain higher than expected wage and benefits costs and resist
the introduction of new technology and other initiatives, which can result in increased operating expenses and lower net
income. If we are unable to negotiate acceptable collective bargaining agreements, our operating expenses could increase
significantly as a result of work stoppages, including strikes. Additionally, a large portion of our workforce are hourly
personnel, and many of these individuals, particularly in our recycling business, are paid at rates related to federal and
state minimum wages. Increases in minimum wage rates, or the enactment of new wage-related legislation, may
significantly increase our labor costs. Any of these matters could adversely affect our financial condition, results of
operations and cash flows.
The seasonal nature of our business, severe weather events resulting from climate change and event driven special
projects cause our results to fluctuate, and prior performance may not be indicative of our future results.
Our financial and operating results may fluctuate for many reasons. 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. While weather-related and other event-driven special projects can boost revenues through
additional work for a limited time, due to significant start-up costs and other factors, such revenue can generate earnings
at comparatively lower margins. For these and other reasons, operating results in any period may not be indicative of
operating results for any other period. Our stock price may be negatively impacted by interim variations in our results.
We may not be able to achieve our sustainability related goals, including reduction of our greenhouse gas ("GHG")
emissions, or execute on our sustainability-related growth strategy and initiatives, within planned timelines or
anticipated budget, which could damage our reputation and negatively impact the benefits anticipated from our
investments.
Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have
set goals to reduce our GHG emissions and announced other sustainability-related goals and initiatives. We may not be
able to meet such goals or implement such initiatives in the manner or on timelines contemplated due to challenges
including, but not limited to, unforeseen costs or delays, supply chain disruptions, regulatory impacts, technology
limitations or technical difficulties associated with achieving such goals. Also, despite voluntarily announcing such
sustainability goals, we may receive pressure from investors or other groups to adopt more aggressive sustainability-related
goals that may not be technically, operationally, or financially feasible.
In addition, our sustainability growth strategy includes significant planned investments in our Recycling Processing
and Sales and WM Renewable Energy segments. Our ability to successfully execute our sustainability growth strategy
may be impacted by the numerous risks and uncertainties associated with our business and the environmental services
industry, including financial and operating performance, availability of technology and financing, changes in regulation,
commodity price fluctuation and general economic conditions. (Also see Item 1A. Risk Factors — Our revenues, earnings
and cash flows will fluctuate based on changes in commodity prices, and commodity prices for recyclable materials are
particularly susceptible to volatility based on macroeconomic conditions and regulations that affect our ability to export
products and — Our sustainability growth strategy includes significant planned and ongoing investments in our
WM Renewable Energy segment; changes to federal and state renewable fuel policies could affect our financial
performance, and such investments may not yield the results anticipated.)
Some or all of the expected benefits of our sustainability-related investments and initiatives may not occur within the
anticipated time periods or may cost more to achieve than anticipated. An inability to develop, obtain, or scale necessary
technology and innovations, and challenges arising from the availability or cost of materials and infrastructure or
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regulatory approvals or permitting requirements associated with our sustainability investments and initiatives, could
impede our ability to execute on our plans and achieve our goals or realize our expected financial performance from these
investments. Actions we take to achieve these goals and implement our sustainability growth strategy and initiatives,
including development and implementation of enhanced technology and reporting systems, will require increased capital
expenditures and management focus, which may divert investment and management focus away from other aspects of our
business operations.
Additionally, favorable expectations regarding potential investment tax credits or other benefits stemming from the
Inflation Reduction Act of 2022 (“IRA”) may not materialize or could fail to meet expectations. Recently, the IRS issued
proposed regulations applicable to the investment tax credits, as expanded by the IRA, that could call into question our
ability to realize some, or all, of this tax benefit, which would negatively impact financial expectations in connection with
our sustainability growth projects in our WM Renewable Energy segment. See Item 1. Business – Regulation – Recent
Developments and Focus Areas in Policy and Regulation – Tax Legislation. We have also forecasted or projected certain
operational and financial information with respect to our sustainability investments and initiatives, and many of these
statements are based on expectations and assumptions that are necessarily uncertain and are subject to risks and
uncertainties that could cause actual results to be materially different from our forecasts and projections.
Focus on, and regulation of, environmental, social and governance (“ESG”) performance and disclosure can result
in increased costs, risk of noncompliance, damage to our reputation and related adverse effects.
There is increasing governmental and stakeholder interest in ESG matters. In addition, the nature, scope, and
complexity of the matters that our Company must assess, quantify and disclose are expanding due to current, proposed,
and recently enacted federal and state reporting requirements related to climate-related risks and other topics, such as water
usage, waste production, labor, human capital, environmental justice, cybersecurity and privacy, and risk oversight. For
example, see Item 1. Business – Regulation – Recent Developments and Focus Areas in Policy and Regulation – Climate
and Sustainability for information about California’s recently-adopted Climate Corporate Data Accountability Act and
Climate-Related Financial Risk Act and the SEC’s proposed climate-related disclosure rule. Methodology and timelines
for mandatory emissions reporting requirements, such as the recently passed California Corporate Data Accountability
Act, may be inconsistent with requirements enacted by other governmental entities, including disclosure requirements that
are ultimately adopted by the SEC, which could further increase costs and divert management time and attention.
Disclosures related to GHG emissions data or potential climate-related impacts could also negatively affect our reputation
to the extent we are perceived as not meeting individual stakeholder climate-related expectations.
Our industry faces challenges to implement these rapidly developing disclosure requirements, as well as the risk of
enforcement actions by governmental and regulatory agencies for noncompliance. Significant expenditures and
commitment of time by management, employees and consultants is involved in developing, implementing and overseeing
policies, practices, additional disclosures and internal controls related to environmental and sustainability risk and
performance. Public statements with respect to ESG matters are becoming increasingly subject to heightened scrutiny from
public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false
claims overstating potential ESG benefits. We are aware that non-governmental organizations and other private actors
have filed lawsuits against certain companies under various securities and consumer protection laws alleging that certain
ESG-related statements, goals or standards were misleading, false or otherwise deceptive. An inability to implement such
policies, practices, and internal controls and maintain compliance with laws and regulations, or a perception among
stakeholders that our ESG disclosures and sustainability goals are insufficient or our goals are unattainable, could harm
our reputation and competitive position and negatively impact our stock price and business performance.
External Economic and Industry Risks
Market disruption, including labor shortages and supply chain constraints, and macroeconomic pressures, including
inflation, have adversely impacted our business and results of operations.
Macroeconomic pressures, including inflation and rising interest rates, and market disruption resulting in labor market,
supply chain and transportation constraints have impacted our results and are continuing. Significant global supply chain
disruption has reduced availability of certain assets used in our business, and inflation has increased costs for the goods
and services we purchase, particularly for labor, repair and maintenance, and subcontractor costs. Supply chain constraints
have caused delayed delivery of fleet, steel containers and other purchases. Aspects of our business rely on third-party
transportation providers, and such services have become more limited and expensive. Additionally, the downturn in market
prices for recycling commodities that started in the second half of 2022 persisted throughout 2023. The decrease continued
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to be driven by the slowdown in the global economy, which reduced retail demand and the corresponding need for
cardboard packaging to ship retail goods. We may also experience margin pressures from commodity-driven business
impacts. The constrained labor market has resulted in increased costs for wage adjustments, overtime hours and training
new hires. If we are not able to overcome limitations on labor availability, it could materially impact our ability to service
our customers and our financial results. Geopolitical conflicts and the resulting international responses have also
exacerbated market disruption, leading to volatility in commodity prices, impacts on the availability and cost of energy,
and vendor and supplier disruptions across the global supply chain.
Accelerated and pronounced economic pressures, such as rising interest rates and inflationary cost pressure on labor
and the goods and services we rely upon to deliver service to our customers, have impacted and continue to impact our
cost structure and capital expenditures. Significant components of our operating expenses vary directly as we experience
changes in revenue due to volume and a heightened pace of inflation, and we may not be able to dynamically manage our
cost structure in response to such changes. A significant portion of our revenue is tied to a price escalation index with a
lookback provision, resulting in a timing lag in our ability to recover increased costs under those contracts during periods
of rapid inflation. Separately, for many of our customers we provide services under multi-year contracts that can restrict
our ability to increase prices and the timing of such increases. Our overall strategic pricing efforts are focused on recovering
as much of the inflationary cost increases we experience in our business as possible by increasing our average unit rate,
but such efforts may not be successful for various reasons including the pace of inflation, operating cost inefficiencies,
contractual limitations, and market responses. The inability to adequately increase prices to offset increased costs and
inflationary pressures, or otherwise mitigate the impact of these macroeconomic conditions and market disruptions on our
business, will increase our costs of doing business and reduce our margins.
The extent and duration of the impact of these labor market, supply chain, transportation and commodity-price
challenges are subject to numerous external factors beyond our control, including broader macroeconomic conditions;
recessionary fears and/or an economic recession; size, location, and qualifications of the labor pool; wage and price
structures; adoption of new or revised regulations; domestic and international political developments, geopolitical conflicts
and responses; and supply and demand for recycled materials. If such impacts are prolonged and substantial, they could
have a material negative effect on our results of operations.
The environmental services industry is highly competitive, and if we cannot successfully compete in the marketplace,
our business, financial condition and operating results may be materially adversely affected.
We encounter intense competition from governmental, quasi-governmental and private sources in all aspects of our
operations. We principally compete with large national waste management companies, counties and municipalities that
maintain their own waste collection and disposal or recycling operations and regional and local companies of varying sizes
and financial resources. The industry also includes companies that specialize in certain discrete areas of waste
management, operators of alternative disposal facilities, companies that seek to use parts of the waste stream as feedstock
for renewable energy and other by-products, and waste brokers that rely upon haulers in local markets to address customer
needs. In recent years, the industry has seen some additional consolidation, though the industry remains intensely
competitive. Counties and municipalities may have financial competitive advantages because tax revenues are available
to them and tax-exempt financing is more readily available to them. Also, such governmental units may attempt to impose
flow control or other restrictions that would give them a competitive advantage. In addition, some of our competitors may
have lower financial expectations, allowing them to reduce their prices to expand sales volume or to win competitively-
bid contracts, including large national accounts and exclusive franchise arrangements with municipalities. When this
happens, we may lose customers and be unable to execute our pricing strategy, resulting in a negative impact to our revenue
growth from yield on base business.
Our revenues, earnings and cash flows fluctuate based on changes in commodity prices and may fluctuate
substantially without notice in the future.
Prices and demand for recyclables fluctuate and are particularly susceptible to volatility based on macroeconomic
conditions and regulations. The downturn in market prices for recycling commodities that started in the second half of
2022 continued in 2023. Average market prices for single-stream recycled commodities were down 40% in 2023 when
compared to the comparable prior year period. Decreases in the market prices for recycling commodities resulted in a
decrease in recycling revenues attributable to yield of $308 million in 2023 as compared to the prior year period. Recycling
revenues attributable to yield increased $19 million in 2022 as compared with the prior year period, primarily from higher
market prices for recycling commodities in the first half of 2022, before the significant downturn in the second half of
2022.
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In recent years, new and updated regulations affecting, and in some cases restricting, the international flow of certain
recyclables have led to a reduction in export activity for such recyclables, as well as higher quality requirements and higher
processing costs. We are making significant planned and ongoing investments in our recycling business to increase
automation and reduce labor dependency and address increases in regulatory- and customer-driven quality requirements
for commodities. These investments increase our exposure to commodity price fluctuations. Additionally, future
regulation, tariffs, international trade policies or other initiatives, including regulations addressing climate change or GHG
emissions, may impact supply and demand of material, or increase operating costs, which could impact the profitability of
our recycling operations. If the Company does not effectively manage changes in demand and commodity prices for
recycling materials, or if we do not successfully execute our sustainability growth strategy, our investments in recycling
infrastructure and technology may not yield the results anticipated.
Fluctuation in energy-related prices also affects our business, including recycling of plastics manufactured from
petroleum products, and we are currently experiencing commodity-price driven impacts from higher fuel costs. Our
sustainability growth strategy also includes increased investment in landfill gas-to-energy facilities and expansion of our
WM Renewable Energy segment, which generate and sells credits referred to as RINs. RINs prices generally respond to
regulations enacted by the EPA, as well as fluctuations in supply and demand, and have historically been very volatile.
Additionally, significant variations in the price of biogas, electricity and other energy-related products that are marketed
and sold by our landfill gas recovery operations can result in a corresponding impact to our revenue from yield from such
operations. Expansion of our WM Renewable Energy segment may introduce additional risks and volatility to our financial
performance.
Increasing customer preference for alternatives to landfill disposal and bans on certain types of waste could reduce
our landfill volumes and cause our revenues and operating results to decline.
Our customers are increasingly diverting waste to alternatives to landfill disposal, such as recycling and composting,
while also working to reduce the amount of waste they generate. In addition, many state and local governments mandate
diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of materials at landfills,
such as recyclables (cardboard, bottles and cans), yard waste, food waste and electronics. Where organic waste is not
banned from disposal in landfills, some large customers such as grocery stores and restaurants are choosing to divert their
organic waste from landfills. Zero-waste goals (sending no waste to the landfill) have been set by many of the U.S. and
Canada’s largest companies. Although such mandates and initiatives help to protect our environment, these developments
reduce the volume of waste going to our landfills, which may affect the prices that we can charge for landfill disposal. Our
landfills currently provide our highest income from operations margins. Reducing landfilled organic waste also reduces
the amount of landfill gas produced from our landfills, adversely impacting our landfill gas-to-energy facilities. If we are
not successful in expanding our service offerings, growing lines of businesses to service waste streams that do not go to
landfills, and providing alternative services for customers that wish to reduce waste entirely, then our revenues and
operating results may decline. Additionally, despite the development of new service offerings and lines of business, it is
possible that our revenues and our income from operations margins could be negatively affected due to disposal
alternatives.
With a heightened awareness of the global problems caused by plastic waste in the environment, Canada and an
increasing number of cities and states across the U.S. have passed ordinances banning certain types of plastics from sale
or use. The most common materials banned include plastic bags and straws, polystyrene plastic and some types of single
use packaging. These bans have increased pressure by manufacturers on our recycling facilities to accept a broader array
of materials in curbside recycling and composting programs to alleviate public pressures to ban the sale of those materials.
However, there are currently no or limited viable end markets for recycling many of these materials, and inclusion of such
materials in our recycling stream increases contamination and operating costs that can negatively affect the results of our
recycling operations.
General economic conditions, such as a broad-based economic recession, can directly and adversely affect revenues
for environmental services and our income from operations margins.
Our business is directly affected by changes in national and general economic factors that are outside of our control,
including consumer confidence, inflation, interest rates and access to capital markets. In recent years, many in the financial
industry have debated whether the North American economy is likely to enter into a period of economic recession. A weak
economy generally results in decreased consumer spending and decreases in volumes of waste generated, which negatively
impacts the ability to grow through new business or service upgrades, and may result in customer turnover and reduction
in customers’ waste service needs. Consumer uncertainty and the loss of consumer confidence may also reduce the number
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and variety of services requested by customers. Additionally, a weak market for consumer goods can significantly decrease
demand by paper mills for recycled corrugated cardboard used in packaging; such as we have experienced since the second
half of 2022, negatively impacting commodity prices and our operating income and cash flows.
A decrease in waste volumes generated results in an increase in competitive pricing pressure; such economic
conditions may also interfere with our ability to implement our pricing strategy. Many of our contracts have price
adjustment provisions that are tied to an index such as the Consumer Price Index, and our costs may increase more than
the increase, if any, in the Consumer Price Index. This is partially due to our relatively high fixed-cost structure; we may
not be able to dynamically manage our cost structure in response to shifting volume levels and vendor costs, and our cost
structure may not correlate with the Consumer Price Index or the waste industry. An economic recession or other economic
weakness is likely to negatively impact our revenues and margins.
Weakness in the economy may expose us to credit risk of governmental entities and municipalities and other major
customers, which could negatively impact our financial results.
We provide service to a number of governmental entities, municipalities, and large national accounts. During periods
of economic weakness, governmental entities and municipalities can suffer significant financial difficulties, due in part to
reduced tax revenue and/or high cost structures. During these periods, such entities, and our non-governmental customers,
could be unable to pay amounts owed to us or renew contracts with us at previous or increased rates.
Purchasers of our recycling commodities can be particularly vulnerable to financial difficulties in times of commodity
price volatility. The inability of our customers to pay us in a timely manner or to pay increased rates, particularly large
national accounts, could negatively affect our operating results.
In addition, the financial difficulties of municipalities could result in a decline in investors’ demand for municipal
bonds and a correlating increase in interest rates. As of December 31, 2023, we had $1.6 billion of tax-exempt bonds with
term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities. If market
dynamics resulted in repricing of our tax-exempt bonds at significantly higher interest rates, we would incur increased
interest expenses that may negatively affect our operating results and cash flows.
The Company’s effective tax rate and tax liability could materially change as a result of the adoption of new tax
legislation and other factors.
Predominantly all of the Company’s revenues are generated in the U.S., and changes in U.S. tax laws could materially
impact our effective tax rate, financial condition and results of operations. The U.S. Tax Cuts and Jobs Act, enacted on
December 22, 2017 (the “Tax Act”), had a significant impact on our effective tax rate, cash tax expenses and net deferred
tax liabilities. The Tax Act reduced the U.S. corporate statutory tax rate and eliminated or limited the deduction of several
expenses that were previously deductible, among other things. However, future changes in tax laws could reverse the
impacts of the Tax Act and if ultimately enacted into law, such an increase could materially impact our tax provision, cash
tax liability, effective tax rate and net deferred tax liabilities.
Significant shortages in diesel fuel supply or increases in diesel fuel prices will increase our operating expenses.
The price and supply of diesel fuel can fluctuate significantly based on international, political and economic
circumstances, as well as other factors outside our control, such as actions by oil and gas producers, regional production
patterns, weather conditions and environmental concerns. We need diesel fuel to run a significant portion of our collection
and transfer trucks and our equipment used in our landfill operations. Fuel supply shortages and price increases could
substantially increase our operating expenses. Regardless of any offsetting surcharge programs, increased operating costs
due to higher diesel fuel prices will decrease our income from operations margins.
Large-scale disruption of social and commercial activity and financial markets, such as has occurred in the past due
to pandemic conditions, may have a material adverse impact on our business, financial condition, results of operations
and cash flows.
Major external events, including pandemic conditions that result in large-sale disruption of social and commercial
activity, such as business closures and social restrictions, could adversely impact our volumes, costs and operational
execution. If such conditions were to be severe, resulting in a broad-based economic slow-down, it may have a material
adverse impact on our financial condition, results of operations and cash flows and hinder our ability to grow our business
and execute our business strategy.
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Technology and Information Security Risks
Developments in technology could trigger a fundamental change in the waste management industry, as waste streams
are increasingly viewed as a resource, which may adversely impact volumes at our landfills and our profitability.
Our Company and others have recognized the value of the traditional waste stream as a potential resource. Research
and development activities are ongoing to provide disposal alternatives that maximize the value of waste, including using
waste as a source for renewable energy and other valuable by-products. We and many other companies are investing in
and/or developing these new technologies. It is possible that such investments and technological advancements may reduce
the cost of waste disposal or the value of landfill gas recovery to a level below our costs and may reduce the demand for
landfill space. As a result, our revenues and margins could be adversely affected due to advancements in disposal
alternatives.
If we are not able to develop new service offerings and protect intellectual property or if a competitor develops or
obtains exclusive rights to a breakthrough technology, our financial results may suffer.
Our existing and proposed service offerings to customers require that we invest in, develop or license, and protect
new technologies. Our Company is increasingly focusing on new technologies that automate and innovate our operations,
improve the customer experience and provide alternatives to traditional disposal and maximize the resource value of waste.
We are continuing our multi-year commitment to strategic investments in technology that prioritize reduction of labor
dependency for certain high-turnover jobs, further digitalize our customer self-service and implement technologies to
further enhance the safety, reliability and efficiency of our collection operations. Research, development and
implementation of enhanced technology often requires significant spending that may divert capital investment away from
our traditional business operations. We may experience difficulties or delays in the research, development, production
and/or marketing of new products and services or implementation of technologies in which we have invested or acquired,
which may negatively impact our operating results and prevent us from recouping or realizing a return on these investments
and acquisitions. Further, protecting our intellectual property rights and combating unlicensed copying and use of
intellectual property is difficult, and inability to obtain or protect new technologies could impact our services to customers
and development of new revenue sources. If a competitor develops or obtains exclusive rights to a “breakthrough
technology” that provides a revolutionary change in traditional waste management, or if we have inferior intellectual
property to our competitors, our financial results may suffer.
We are increasingly dependent on technology in our operations and if our technology fails, our business could be
adversely affected.
We may experience problems with the operation of our current information technology systems or the technology
systems of third parties on which we rely, as well as the development and deployment of new information technology
systems, that could adversely affect, or even temporarily disrupt, all or a portion of our operations until resolved. Inabilities
and delays in implementing new systems can also affect our ability to realize projected cost savings or other benefits.
Significant system failures could impede our ability to timely collect and report financial results in accordance with
applicable laws and regulations. In 2022, we implemented a new general ledger accounting system, complementary finance
enterprise resource planning system and a human capital management system. These systems increase our utilization of,
and dependance on, third-party “cloud” computing services in connection with our business operations. Employee
work-from-home arrangements also increase various technology risks, including potential exposure to cyber incidents,
loss of data, fraud, internal control challenges and other disruptions as a consequence of more employees accessing
Company systems and information remotely in the course of their ordinary work.
In 2023, the world experienced an exponential level of growth in the availability of potential applications of artificial
intelligence (“AI”). AI could disrupt certain aspects of our business and evolve use of technology in ways that are not yet
known. If we are not able to adapt and effectively incorporate potential advantages of AI in our business, it may negatively
impact our ability to compete. On the other hand, if we are not able to effectively manage the risks of AI, including the
potential for poor or inconsistent quality, privacy concerns, risks related to automated decision-making, and the potential
for exposure of confidential and/or propriety information, we may suffer harm to our results of operation and reputation.
Significant cybersecurity incidents negatively impact our business and our relationships with customers, vendors and
employees and expose us to increased liability.
Substantially all aspects of our business operations rely on digital technology. We use computers, mobile devices,
social networking and other online platforms to connect with our employees, customers, vendors, as well as other
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individuals and third parties. These uses give rise to cybersecurity risks, including security breach, ransomware, espionage,
system disruption, theft and/or inadvertent, accidental, unlawful, unauthorized access, loss, alteration, destruction and/or
release of information. Our business necessitates the processing, collection, use, storage and transmission of numerous
classes of sensitive and/or confidential information and intellectual property, including individuals’ personal information,
private and sensitive employment-related personal information, and financial and strategic information about the Company
and other businesses. In addition to our own safeguarding efforts, we also rely on third parties to process, collect and store
sensitive data, including a Payment Card Industry compliant third party to protect our customers’ credit card information.
We are regularly the target of attempted cyber intrusions, and we anticipate continuing to be subject to such attempts
as cyber intrusions become increasingly sophisticated and more difficult to predict and protect against. Geopolitical
conflicts also increase the risk of cyber incidents. As such, we commit substantial resources to continuously monitor and
further develop our networks and infrastructure to prevent, detect, and address the risk of unauthorized access, misuse,
computer viruses and other events. Our security programs and measures do not prevent all intrusions. Cyber intrusions
require a significant amount of time and effort to assess and remedy, and our incident response efforts may not be effective
in all cases. Although we believe that the probability of occurrence of a significant cybersecurity incident is less than
likely, if such an incident were to occur, the impact on the Company could be substantial. The Company experienced a
cyber intrusion in the first quarter of 2021 that was promptly detected, and the third-party software vulnerability was
quickly remediated. There was no impact to the Company’s operations, services or financial statements. A subsidiary of
WMI was named as a defendant in a class action lawsuit related to this incident. The parties have agreed to a settlement
that is currently pending final court approval, and such settlement will not have a material adverse effect on the Company’s
business, financial condition, results of operations or cash flows; however, assessing and responding to this intrusion
required a significant amount of time and management attention. While the magnitude of future cyber intrusions that result
in a theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual
property, or material interference with our information technology systems or the technology systems of third parties on
which we rely cannot be predicted, such incidents could result in material business disruption, direct financial loss,
negative publicity, brand damage, alleged violation of privacy laws, loss of customers, potential regulatory enforcement
or private litigation liability and competitive disadvantage. We maintain insurance for cyber incidents; however, due to
policy terms, limits and exclusions, such insurance may not apply in all cases, and it may not be adequate to cover all
liabilities incurred.
As the Company pursues its strategy to grow through acquisitions and to pursue new initiatives that improve our
operations and cost structure, the Company is also expanding and improving its information technologies, resulting in a
larger technological presence, utilization of “cloud” computing services, and corresponding exposure to cybersecurity risk.
Certain new technologies, such as use of autonomous vehicles, remote-controlled equipment, virtual reality, automation
and AI, present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation.
If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become
increasingly vulnerable to such risks.
Increased state, federal and international laws and regulations related to cybersecurity protections and disclosures will
require additional resources for compliance, and any inability, or perceived inability, to adequately address new
requirements could subject us to regulatory enforcement, private litigation, public criticism, disrupt our operations, cause
us to lose customers, result in additional costs and legal liability, damage our reputation, and otherwise harm our business.
Increasing regulatory focus on privacy and data protection issues and expanding laws could negatively impact our
business, subject us to criticism and expose us to increased liability.
The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is
likely to remain uncertain for the foreseeable future. We collect, use, share, retain, delete and otherwise process certain
personal information and other sensitive information in connection with our operations and providing environmental and
other services. We are subject to a variety of laws and regulations, including GDPR and other international data protection
laws, and may become subject to additional pending laws and regulations, that govern the collection, use and other
processing of information obtained from individuals, businesses and other third parties. These laws and regulations are
inconsistent across jurisdictions and are subject to evolving interpretations. Government officials, regulators, privacy
advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share,
transmit and destroy personal data. We must continually monitor the development and adoption of, and commit substantial
time and resources to comply with, new and emerging laws and regulations and/ or expanded interpretations of existing
laws. These laws and regulations provide disclosure and other obligations for businesses that collect personal information,
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individual rights relating to personal information, collection, use, storage, transmission and other processing requirements,
automated decision-making transparency, and potential liability expansion. Any inability, or perceived inability, to
adequately address privacy and data protection concerns, even if unfounded, or comply with laws, regulations, policies,
industry standards, contractual obligations, or other legal obligations, including at newly acquired companies, could
subject us to regulatory enforcement, private litigation, public criticism, business disruption, loss of customers, additional
costs and legal liability, reputational damage, and other harm.
Legal, Regulatory and Compliance Risks
Our operations are subject to environmental, health and safety laws and regulations, as well as contractual
obligations that may result in significant liabilities.
There is risk of incurring significant environmental liabilities in the use, treatment, storage, transfer and disposal of
waste materials. Under applicable environmental laws and regulations, we could be liable if it is alleged that our operations
cause environmental damage to our properties or to the property of other landowners, particularly as a result of the
contamination of air, drinking water or soil. Under current law, we could also be held liable for damage caused by
conditions that existed before we acquired the assets or operations involved and for conditions resulting from waste types
or compounds previously considered non-hazardous but later determined to present possible threat to public health or the
environment. The risks of successor liability and emerging contaminants are of particular concern as we execute our
growth strategy, partially through acquisitions, because we may be unsuccessful in identifying and assessing potential
liabilities during our due diligence investigations. Further, the counterparties in such transactions may be unable to perform
their indemnification obligations owed to us. Any substantial liability for environmental damage could have a material
adverse effect on our financial condition, results of operations and cash flows.
In the ordinary course of our business, we have in the past, we are currently, and we may in the future, become
involved in legal and administrative proceedings relating to land use and environmental laws and regulations. These
include proceedings in which governmental entities, private groups or individuals seek to impose liability on us for alleged
environmental damage or violation of statutes or desire to revoke or deny permits required for our operations. We generally
seek to work with the authorities or other persons involved in these proceedings to resolve any issues raised. If we are not
successful, the adverse outcome of one or more of these proceedings could result in, among other things, material increases
in our costs or liabilities as well as material charges for asset impairments.
Further, we often enter into agreements with landowners imposing obligations on us to meet certain regulatory or
contractual conditions upon site closure or upon termination of the agreements. Compliance with these agreements
inherently involves subjective determinations and may result in disputes, including litigation. Costs to remediate or restore
the condition of closed sites may be significant.
Our sustainability growth strategy includes significant planned and ongoing investments in our WM Renewable
Energy segment; changes to federal and state renewable fuel policies could affect our financial performance, and
such investments may not yield the results anticipated.
The primary drivers of renewable fuel development at our landfills are tax policies, such as the recently expanded
federal tax credits for RNG production and renewable electricity generation, and federal and state incentive programs,
such as the federal Renewable Fuel Standard (“RFS”) program and the California Low Carbon Fuel Standard. At the
federal level, oil refiners and importers are required through the RFS program to blend specified volumes of renewable
transportation fuels with gasoline or buy credits, referred to as RINs, from renewable fuel producers. The Company has
invested, and continues to invest, in facilities that capture and convert landfill gas into RNG, and also works with facilities
that capture and convert dairy digester gas into RNG, so that we can participate in the program, and the Company has
stated its intention to grow its asset base to notably increase its RNG production by 2026. RINs prices generally respond
to regulations enacted by the EPA, as well as fluctuations in supply and demand. The value of the RINs associated with
RNG is set through a market established by the program, which market has historically been very volatile.
Prior to 2022, the EPA had promulgated rules on an annual basis establishing refiners’ obligations to purchase RNG
and other cellulosic biofuels under the RFS program, which introduced a level of uncertainty into the renewable fuels and
RINs market. However, in 2023, the EPA issued a highly anticipated rule establishing biofuel blending volumes under the
RFS program for compliance years 2023 through 2025. The rule reflected the outsized role of biogas under the program,
delivered on many reforms that benefit the solid waste sector, and recognized the continued growth of the market for RNG
in vehicle applications. However, we cannot be certain that these changes, or the outcome of litigation challenging various
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aspects of the rule, will ultimately reduce volatility in the RINs market or that future rulemakings will be similarly
favorable to our business. Additionally, the Company’s sustainability growth strategy is informed by the increased
adoption of state and Canadian clean fuel standard programs, utility policies, and voluntary market demand for RNG in
transportation and industrial applications. Clean fuel standard programs operate similar to the RFS program in that certain
regulated parties purchase credits from fuel producers, including RNG producers, to meet their carbon intensity
obligations. Like RINs, clean fuel standard program credit values can fluctuate with policy and market dynamics. Changes
and volatility in the RFS market or other markets, or changes in the structure of the RFS program or other clean fuel
standard programs, can and has impacted the financial performance of the facilities constructed to capture and treat the
gas. Such changes could impact or alter our projected future investments, and such investments may not yield the results
anticipated.
The impact of climate change, and the adoption of climate change legislation or regulations restricting emissions of
GHGs, could increase our costs to operate.
We continue to assess the physical risks, such as sea-level rise, catastrophic storms and other extreme weather
conditions and long-term shifts in climate patterns, and transition risks, such as regulatory, market, policy, and technology
changes, to our operations from the effects of climate change. These risks are expected to be unpredictable and widespread.
Although we have made investments to mitigate risk associated with severe storm events, damage to our facilities or
disruption of service caused by more frequent or more severe storms associated with climate extremes could negatively
impact operating results. We have also identified risk to our assets and our employees associated with drought or water
scarcity, flooding, extreme heat and rain events, and fire conditions associated with climate change. For example, wildfires
influenced by climate change can damage landfill infrastructure such as gas collection systems, flooding in low-lying areas
enhanced by sea level rise can result in greater maintenance expenses at our facilities and service disruption, and more
frequent or extreme rain events can erode the protective vegetative caps on our landfills and generate increased volumes
of leachate to manage. Those areas of the country most prone to these occurrences have protocols in place, or are
developing protocols to address these conditions, including employee safety, driver training, and equipment and facility
protection protocols. We have incurred and will incur costs to develop and implement these protocols, and these protocols
may not be effective in offsetting these risks. Additionally, the actions of others in response to climate change effects, such
as rolling power blackouts, can result in service disruptions and increase our costs to operate.
Our landfill operations emit methane, identified as a GHG. Research efforts have demonstrated that observing landfills
utilizing a combination of aerial and surface-based technologies has the potential to advance understanding of methane
emissions from our sites. Meanwhile, a number of legislative and regulatory efforts at the state, provincial, regional and
federal levels aim to cap and/or curtail the emission of GHGs to ameliorate the effect of climate change, and otherwise to
promote adaptation to climate change, support the transition to a low-carbon economy, and require disclosure of climate-
related matters. We continue to monitor these efforts and the potential impacts to our operations. Additionally, existing
technology presents challenges to our ability to quantify landfill emissions precisely. In 2024, both the EPA and
Environment and Climate Change Canada (“ECCC”) are expected to evaluate landfill emissions standards that may require
the application of various emerging methane measurement technologies. The EPA has indicated that methane emissions
from landfills will be a focus of its expanded National Enforcement and Compliance Initiatives for 2024 through 2027.
Both the EPA and the ECCC also plan to develop methods and standards for advanced measurement technologies. Should
comprehensive federal climate change legislation be enacted, we expect it could impose operational and compliance costs
that might not be offset by the revenue increases associated with our lower-carbon service options, the materiality of which
we cannot predict. Climate change laws and regulations could also result in increased operational costs or disruption to
the business of our customers, potentially impacting our operations and financial condition. We could also experience
damage to our reputation and brand, including as a result of a failure or perceived failure to respond responsibly and
effectively to changes in legal and regulatory measures adopted to address climate change.
We could be subject to significant fines and penalties, and our reputation could be adversely affected, if our
businesses, or third parties with whom we have a relationship, were to fail to comply with U.S. or foreign laws or
regulations.
Some of our projects and new business may be conducted in countries where corruption has historically been
prevalent. It is our policy to comply with all applicable anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act,
and with applicable local laws of the foreign countries in which we operate, and we monitor our local partners’ compliance
with such laws as well. Our reputation may be adversely affected if we were reported to be associated with corrupt practices
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or if we or our local partners failed to comply with such laws. Additionally, violations of such laws could subject us to
significant fines and penalties.
Currently pending or future litigation or governmental proceedings could result in material adverse consequences,
including judgments or settlements.
As a large company with operations across the U.S. and Canada, we are subject to various proceedings, lawsuits,
disputes and claims arising in the ordinary course of our business, including governmental proceedings. Actions that have
been filed against us, and that may be filed against us in the future, include personal injury, property damage, commercial,
customer, and employment-related claims, including purported state and national class action lawsuits related to:
•
•
•
alleged environmental contamination, including releases of hazardous materials and odors;
sales and marketing practices, customer service agreements, prices and fees; and
federal and state wage and hour and other laws.
The timing of the final resolutions to these types of matters is often uncertain. Additionally, the possible outcomes or
resolutions to these matters could include adverse judgments or settlements, either of which could require substantial
payments, adversely affecting our liquidity.
Financial Risks
Our capital requirements and our business strategy could increase our expenses, cause us to change our growth and
development plans, or result in an inability to maintain our desired credit profile.
If economic conditions or other risks and uncertainties cause a significant reduction in our cash flows from operations,
we may reduce or suspend capital expenditures, growth and acquisition activity, implementation of our business strategy,
dividend declarations or share repurchases. We may choose to incur indebtedness to pay for these activities, although our
access to capital markets is not assured and we may not be able to incur indebtedness at a cost that is consistent with
current borrowing rates. We also may need to incur indebtedness to refinance scheduled debt maturities, and it is possible
that the cost of financing could increase significantly, thereby increasing our expenses and decreasing our net income.
Macroeconomic pressures, including inflation and rising interest rates, and market disruption are continuing. The U.S.
government’s decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations may
cause further interest rate increases, disrupt access to capital markets and trigger recessionary conditions. Further, our
ability to execute our financial strategy and our ability to incur indebtedness is somewhat dependent upon our ability to
maintain investment grade credit ratings on our senior debt. The credit rating process is contingent upon our credit profile
and several other factors, many of which are beyond our control, including methodologies established and interpreted by
third-party rating agencies. If we were unable to maintain our investment grade credit ratings in the future, our interest
expense would increase and our ability to obtain financing on favorable terms could be adversely affected. We have
$2.5 billion of debt as of December 31, 2023 that is exposed to changes in market interest rates within the next 12 months,
associated with our commercial paper borrowings and tax-exempt bonds. If interest rates increase, our interest expense
would also increase, lowering our net income and decreasing our cash flow.
We may use our $3.5 billion long-term U.S. and Canadian revolving credit facility (“$3.5 billion revolving credit
facility”) to meet our cash needs, to the extent available, until maturity in May 2027. As of December 31, 2023, we had
no outstanding borrowings under this facility. We had $859 million of outstanding borrowings (net of related discount on
issuance) under our commercial paper program and $180 million of letters of credit issued, both supported by this facility,
leaving unused and available credit capacity of $2.5 billion as of December 31, 2023. In the event of a default under our
$3.5 billion revolving credit facility we could be required to immediately repay all outstanding borrowings and make cash
deposits as collateral for all obligations the facility supports, which we may not be able to do. Additionally, any such
default could cause a default under many of our other credit agreements and debt instruments. Without waivers from
lenders party to those agreements, any such default would have a material adverse effect on our ability to operate.
We have substantial financial assurance and insurance requirements and increases in the costs of obtaining adequate
financial assurance, or the inadequacy of our insurance coverages, could negatively impact our liquidity and increase
our liabilities.
The amount of insurance we are required to maintain for environmental liability is governed by statutory requirements.
We also carry a broad range of other insurance coverages that are customary for a company our size. To the extent our
obligations for claims are more than we estimated, our insurance coverage is inadequate to cover our obligations, or our
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insurers are unable to meet their obligations, the requirement that we pay such obligations could have a material adverse
effect on our financial results.
In addition, to fulfill our financial assurance obligations with respect to variable-rate tax-exempt debt, and final
capping, closure, post-closure and environmental remediation obligations, we generally obtain letters of credit or surety
bonds, rely on insurance, including captive insurance, fund trust and escrow accounts or rely upon WMI financial
guarantees. Our financial position, which can be negatively affected by asset impairments, our credit profile and general
economic factors, may increase the cost of our current financial assurance instruments, and changes in regulations may
impose stricter requirements on the types of financial assurance that will be accepted. In the event we are unable to obtain
sufficient surety bonding, letters of credit or third-party insurance coverage at reasonable cost, or one or more states cease
to view captive insurance as adequate coverage, we would need to rely on other forms of financial assurance. It is possible
that we could be required to deposit cash to collateralize certain obligations, which could negatively impact our liquidity.
We may record material charges against our earnings due to impairments to our assets.
Events that have in the past and may in the future lead to an impairment include, but are not limited to, shutting down
a facility or operation, abandoning a development project, project cost overruns or the denial of an expansion permit.
Additionally, declining waste volumes and development of, and customer preference for, alternatives to traditional waste
disposal could warrant asset impairments. If we determine an asset or expansion project is impaired, we will charge against
earnings any unamortized capitalized expenditures and advances relating to such asset or project reduced by any portion
of the capitalized costs that we estimate will be recoverable, through sale or otherwise. We also carry a significant amount
of goodwill on our Consolidated Balance Sheets, which is required to be assessed for impairment annually, and more
frequently in the case of certain triggering events. We have in the past and may in the future be required to incur charges
against earnings if such impairment tests indicate that the fair value of a reporting unit is below its carrying amount. Any
such charges could have a material adverse effect on our results of operations.
We could face significant liabilities for withdrawal from Multiemployer Pension Plans.
We are a participating employer in a number of trustee-managed multiemployer defined benefit pension plans
(“Multiemployer Pension Plans”) for employees who are covered by collective bargaining agreements. In the event of our
withdrawal from a Multiemployer Pension Plan, we may incur expenses associated with our obligations for unfunded
vested benefits at the time of the withdrawal. Depending on various factors, including potential legislative changes, future
withdrawals could have a material adverse effect on results of operations or cash flows for a particular reporting period,
and our ongoing costs of participation in Multiemployer Pension Plans may increase. See Notes 9 and 10 to the
Consolidated Financial Statements for more information related to our participation in Multiemployer Pension Plans.
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Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Strategy, Governance and Risk Management
Our Technology Risk Program is designed to proactively identify, monitor, and mitigate technology-related risks
across our digital operations and assess cybersecurity risks related to third-party vendors and suppliers. Our Cybersecurity
Program and our Technology Risk Program are led by our Chief Information Security Officer (“CISO”) a Certified
Information Systems Security Professional with two decades of cybersecurity leadership. The CISO and his team are
responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. The
Technology Risk Oversight Committee chaired by our CISO, with members representing leadership throughout our
Company, provides oversight and guidance to technology risks, including cybersecurity. Our Company’s Cybersecurity
Program is designed to align with the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework
and leading industry practices, and our Cybersecurity Program is integrated into our Company’s Enterprise Risk
Management framework. Internal and external experts regularly evaluate our Cybersecurity Program, and the results of
those reviews are reported to senior management and our Company’s Board of Directors. Our Incident Response
Committee, which is comprised of leaders in the areas of information security, digital, legal, finance, privacy, compliance
and ethics, corporate security and communications, is responsible for leading our Company’s response to cyber incidents.
Our Cybersecurity Incident Response Plan outlines the processes by which management is informed about and monitors
detection and mediation of cyber incidents. We actively engage with key vendors, industry participants, and intelligence
and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our
information security policies and procedures.
Risks from cybersecurity threats, including as a result of previous cybersecurity incidents encountered by the
Company and known incidents encountered by third parties with a connection to the Company, have not materially
affected, and are not currently viewed as reasonably likely to materially affect our Company, including our business
strategy, results of operations or financial condition. However, we are regularly the target of attempted cyber intrusions,
and we anticipate continuing to be subject to such attempts. Our security programs and measures do not prevent all
intrusions. Cyber intrusions require a significant amount of time and effort to assess and remedy, and our incident response
efforts may not be effective in all cases. Although we believe that the probability of occurrence of a significant
cybersecurity incident is less than likely, if such an incident were to occur, the impact on the Company could be substantial.
See Item 1A. Risk Factors — Significant cybersecurity incidents negatively impact our business and our relationships
with customers, vendors and employees and expose us to increased liability for additional discussion.
Board Oversight
Management has primary responsibility for risk management within our Company. The Company’s Board of
Directors, with the support of its committees, oversees risk management to ensure that the processes designed,
implemented and maintained by our executives are functioning as intended and adapted when necessary to respond to
changes in our Company’s strategy as well as emerging risks. The Audit Committee of the Company’s Board of Directors
has responsibility for oversight of information and cybersecurity risks and assessment of cyber threats and defenses. The
Audit Committee receives reports on these matters from our most senior executives in the digital organization, including
our Chief Information Officer and CISO, and the Company’s executive officers, at least twice a year. Topics historically
covered in such reports include third-party evaluation of our technology infrastructure and information security against
the NIST cybersecurity framework; risk mitigation through the Company’s enterprise-wide cybersecurity training,
including our Board of Directors, conducted at least annually; regular simulated phishing tests and third-party penetration
testing; review of the Company’s cyber incident insurance coverage and external cyber incident resources; review of the
Company’s Cybersecurity Incident Response Plan and consideration of applicable laws and regulations, including those
related to privacy. The Company’s Cybersecurity Incident Response Plan includes a section on Board escalation that
specifies the process for notification of the Chair of the Audit Committee and the Chair of the Board of the Directors upon
certain triggering events, and that group then determines the appropriate form and frequency of communication with the
full Audit Committee or Board of Directors, depending on the unique characteristics of the incident.
35
Item 2. Properties.
Our principal executive offices are in Houston, Texas where we lease approximately 285,000 square feet under a lease
expiring in 2035. We also have administrative offices in Arizona, Connecticut, Illinois and India. We own or lease real
property in most locations where we have operations or administrative functions. We have operations (i) in all 50 states
except Montana; (ii) in the District of Columbia and (iii) throughout Canada.
Our principal property and equipment consist of land (primarily landfills and other disposal facilities, transfer stations
and bases for collection operations), buildings, vehicles and equipment. We believe that our operating properties, vehicles
and equipment are adequately maintained and sufficient for our current operations. However, we expect to continue to
make investments in additional property and equipment for expansion, for the replacement of aging assets and investment
in assets that support our strategy of continuous improvement through efficiency and innovation. In addition, we continue
to make progress on our planned investments to expand our Recycling Processing and Sales and WM Renewable Energy
segments. As of December 31, 2023, we had 92 landfill gas beneficial use projects producing commercial quantities of
methane gas at owned or operated landfills. For 66 of these projects, the processed gas is used to fuel electricity generators.
The electricity is then sold to public utilities, municipal utilities or power cooperatives. For 20 of these projects, the gas is
used at the landfill or delivered by pipeline to industrial customers as a direct substitute for fossil fuels in industrial
processes. For six of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas
suppliers. For more information, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations included within this report.
The following table summarizes our various operations as of December 31:
Landfills owned or operated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
263
332
102
263
337
97
Item 3. Legal Proceedings.
Information regarding our legal proceedings can be found under the Environmental Matters and Litigation sections
of Note 10 to the Consolidated Financial Statements included within this report.
Item 4. Mine Safety Disclosures.
Information concerning mine safety and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this annual report.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “WM.” The number of
holders of record of our common stock on February 8, 2024 was 7,489.
36
The graph below shows the relative investment performance of Waste Management, Inc. common stock, the
S&P 500 Index and the Dow Jones Waste & Disposal Services Index for the last five years, assuming reinvestment of
dividends at date of payment into the common stock. The graph is presented pursuant to SEC rules and is not meant to be
an indication of our future performance.
Comparison of Cumulative Five Year Total Return
Waste Management, Inc.
S&P 500 Index
Dow Jones Waste & Disposal Services Index
$300
$250
$200
$150
$100
$50
12-31-18
12-31-19
12-31-20
12-31-21
12-31-22
12-31-23
Waste Management, Inc. . . . . . . . . . . . . . . . . . . . .
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dow Jones Waste & Disposal Services Index . . . .
12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23
220
207
224
198 $
200 $
201 $
189
164
190
100
100
100
130
131
135
138
156
144
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
The Company repurchases shares of its common stock as part of capital allocation programs authorized by our Board
of Directors. Share repurchases are a part of our long-term strategy and incorporated into our overall capital allocation
plan to enhance our Company’s performance, in conjunction with our other uses of capital, and to return value to
stockholders in a tax-efficient manner. During 2023, we allocated an aggregate of $1.3 billion to repurchase our common
stock under accelerated share repurchase (“ASR”) agreements and open market transactions. As of December 31, 2023,
we had received 7.8 million shares with a weighted average price per share of $158.47, exclusive of per-share
commissions. In February 2024, we completed our ASR agreement executed in October 2023, at which time we received
0.2 million shares. See Note 13 to the Consolidated Financial Statements for additional information. We announced in
December 2023 that the Board of Directors has authorized up to $1.5 billion in future share repurchases, excluding the 1%
excise tax discussed further below. This new authorization supersedes and replaces remaining authority under the prior
Board of Directors’ authorization for share repurchases announced in December 2022.
37
The following table summarizes common stock repurchases made during the fourth quarter of 2023 (shares in
millions):
Total Number of
Total
Number of
Shares
Shares Purchased as Approximate Maximum
Average
Price Paid
Part of Publicly
Dollar Value of Shares that
Announced Plans or May Yet be Purchased Under
Period
October 1 — 31 (b) . . . . . . . . . . . . . . . . . . . . . . . .
November 1 — 30 . . . . . . . . . . . . . . . . . . . . . . . .
December 1 — 31 . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchased per Share(a)
Programs
1.6
— $
— $
1.6
$ 161.15
—
—
$ 161.15
the Plans or Programs(a)
257.5 million
257.5 million
1.5 billion
1.6 $
— $
— $
1.6
(a) The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible
1% excise tax on the net value of certain stock repurchases made after December 31, 2022. We reflected the applicable
excise tax in treasury stock as part of the cost basis of the stock repurchased. In the table above and footnotes below,
the average price paid per share, total repurchase costs and approximate maximum dollar value of shares that may yet
be purchased under the plans or programs exclude the 1% excise tax.
(b) In October 2023, we repurchased 70,350 shares of our common stock in open market transactions in compliance with
Rule 10b5-1 and Rule 10b-18 of the Exchange Act for $11 million, inclusive of per share commissions, at a weighted
average price of $156.35. Additionally, we repurchased $300 million of our common stock pursuant to an ASR
agreement. At the beginning of the repurchase period, we delivered $300 million cash and received 1.5 million shares
based on a stock price of $161.38. The ASR agreement completed in February 2024, at which time we received
0.2 million additional shares based on a final weighted average price of $175.29.
The amount of future share repurchases executed under our Board of Directors’ authorization is determined in
management’s discretion, based on various factors, including our net earnings, financial condition and cash required for
future business plans, growth and acquisitions.
Item 6. [Reserved]
None.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This section includes a discussion of our results of operations for the three years ended December 31, 2023. This
discussion may contain forward-looking statements. See “Cautionary Statement about Forward-Looking Statements” in
Part I of this Annual Report on Form 10-K for more information. Forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from our historical experience and our present
expectations or anticipated results. These risks and uncertainties include, but are not limited to, those described in Part I,
“Item 1A. Risk Factors” and elsewhere in this report and may also be described from time to time in our future reports
filed with the U.S. Securities and Exchange Commission (“SEC”). The following discussion should be read considering
those disclosures and together with the Consolidated Financial Statements and the notes thereto.
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”) business, 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, which is a significant source
38
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.
To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid
waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our
Recycling Processing and Sales and WM Renewable Energy businesses, beginning in the fourth quarter of 2023, our senior
management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal and resource
recovery service businesses independently; (ii) combine the results of all recycling facilities from our East and West Tier
segments with our recycling brokerage and sales activities to form a newly created Recycling Processing and Sales
reportable segment and (iii) include our WM Renewable Energy business as a reportable segment. Accordingly, our senior
management now evaluates, oversees and manages the financial performance of our business through four 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 and (iv) WM Renewable Energy. Our East and West Tiers along with certain
ancillary services not managed through our Tier segments, but that support our collection and disposal operations, form
our “Collection and Disposal” businesses.
Collection and Disposal
Our Collection and Disposal businesses provide integrated environmental services, including collection, transfer,
disposal and resource recovery services. We evaluate our Collection and Disposal businesses primarily through two
geographic segments, East Tier and West Tier. Our East Tier primarily consists of geographic areas located in the Eastern
U.S., the Great Lakes region and substantially all of Canada. Our West Tier primarily includes geographic areas located
in the Western U.S., including the upper Midwest region, and British Columbia, Canada. Additionally, we provide certain
ancillary services (“Other Ancillary”) that are not managed through the Tier segments but that support our collection and
disposal operations. Other Ancillary includes specialized services performed for customers that have differentiated needs.
These specialized services are targeted at large industrial customers managed through our Sustainability and
Environmental Solutions (“SES”) business or geographically dispersed customers managed through our Strategic Business
Solutions (“WMSBS”) business. Also included within Other Ancillary are the results of non-operating entities that provide
financial assurance and self-insurance support for our business, net of intercompany activity.
Our Collection and Disposal businesses’ operating revenues are primarily generated from fees charged for our
collection, transfer, disposal and resource recovery services. Revenues from our collection operations are influenced by
factors such as collection frequency, type of collection equipment furnished, type and volume or weight of the waste
collected, distance to the disposal facility or recycling facility and our disposal costs. Revenues from our landfill operations
consist of tipping fees, which are generally based on the type and weight or volume of waste being disposed of at our
disposal facilities. Fees charged at transfer stations are generally based on the weight or volume of waste deposited,
considering our cost of loading, transporting and disposing of the solid waste at a disposal site.
Included within our Collection and Disposal businesses are landfills having (i) 21 third-party power generating
facilities converting our landfill gas to fuel electricity generators; (ii) 14 third-party renewable natural gas (“RNG”)
facilities processing landfill gas to be sold to natural gas suppliers and (iii) two third-party projects delivering our landfill
gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes. In return for providing
our landfill gas, we receive royalties from each facility, including the benefit of a 15% royalty from our WM Renewable
Energy segment based on net operating revenue generated through the sale of RNG, renewable identification numbers
(“RINs”), electricity and capacity, Renewable Energy Credits (“RECs”) and related environmental attributes from the
83 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active landfills, which is
eliminated in consolidation.
Recycling Processing and Sales
Our Recycling Processing and Sales segment includes the processing and sales of materials collected from residential,
commercial and industrial customers. The materials are delivered to and processed at one of our many recycling facilities.
Through our brokerage business, we also manage the marketing of recycling commodities that are processed in our
facilities and by third parties by maintaining comprehensive service centers that continuously analyze market prices,
logistics, market demands and product quality.
39
Recycling Processing and Sales revenues generally consist of tipping fees and the sale of recycling commodities to
and/or on behalf of third parties. Our Recycling Processing and Sales segment excludes the collection of recycled materials
from our residential, commercial, and industrial customers which is included within our Collection and Disposal
businesses.
WM Renewable Energy
Our WM Renewable Energy segment develops, operates and promotes projects for the beneficial use of landfill gas.
Landfill gas is produced naturally as waste decomposes in a landfill. The methane component of the landfill gas is a readily
available, renewable energy source that can be gathered and used beneficially as an alternative to fossil fuel.
WM Renewable Energy converts landfill gas into several sources of renewable energy to be sold which include RNG,
electricity and capacity, heat and/or steam. WM Renewable Energy also generates and sells (i) RINs under the Renewable
Fuel Standard (“RFS”) program; (ii) other credits under a variety of state programs associated with the use of RNG in our
compressed natural gas fleet and (iii) RECs associated with the production of electricity. The RINs, RECs, and other
credits are sold to counterparties who are obligated under the regulatory programs and have a responsibility to procure
RINs, RECs, and other credits proportionate to their fossil fuel production and imports. RINs and RECs prices generally
fluctuate in response to regulations enacted by the Environmental Protection Agency (“EPA”) or other regulatory bodies,
as well as changes in supply and demand.
As of December 31, 2023, we had 92 landfill gas beneficial use projects producing commercial quantities of methane
gas at owned or operated landfills. For 66 of these projects, the processed gas is used to fuel electricity generators. The
electricity is then sold to public utilities, municipal utilities or power cooperatives. For 20 of these projects, the gas is used
at the landfill or delivered by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes.
For six of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas suppliers. The
revenues from these facilities are primarily generated through the sale of RNG, RINs, electricity and capacity, RECs and
related environmental attributes. WM Renewable Energy is charged a 15% royalty on net operating revenue from these
facilities residing on our active and closed landfills from our Collection and Disposal, and Corporate and Other businesses,
which is eliminated in consolidation. Additionally, WM Renewable Energy operates and maintains 12 third-party landfill
beneficial gas use projects in return for service revenue. Our Collection and Disposal and Corporate and Other businesses
benefit from these projects as well as 32 additional third-party landfill beneficial gas use projects in the form of royalties.
Corporate and Other
We also provide additional services that are not managed through our operating segments, which are presented in this
report as Corporate and Other. This includes the activities of our corporate office, including costs associated with our
long-term incentive program, expanded service offerings and solutions (such as our investments in businesses and
technologies that are designed to offer services and solutions ancillary or supplementary to our current operations) as well
as our closed sites. Also included within our Corporate and Other businesses are closed sites that include (i) five third-party
power generating facilities converting our landfill gas to fuel electricity generators; (ii) one third-party project delivering
our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes and (iii) one
third-party RNG processing landfill gas to be sold to natural gas suppliers in return for a royalty. Additionally, Corporate
and Other benefits from a 15% royalty from our WM Renewable Energy segment based on net operating revenue generated
through the sale of RNG, RINs, electricity and capacity, RECs and related environmental attributes from the nine landfill
beneficial use renewable energy projects owned by WM Renewable Energy on our closed sites, which is eliminated in
consolidation.
Included in the fees we charge for our services is our energy surcharge and other charges that are intended to pass
through costs to customers.
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
40
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, 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 2023 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
https://sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Annual
Report on Form 10-K. For further discussion see Item1. Business – Regulation – Recent Developments and Focus Areas
in Policy and Regulation.
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. In late 2021, we began to execute
this technology enablement strategy to automate and optimize certain elements of our service delivery model. The key
benefits are to reduce labor dependency on certain high-turnover jobs, 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. Additionally, in 2022, we
implemented a new general ledger accounting system, complementary finance enterprise resource planning system and a
human capital management system, which will continue to drive operational and service excellence by empowering our
people through a modern, simplified and connected employee experience.
Macroeconomic pressures, including inflation and rising interest rates, and market disruption resulting in labor, supply
chain and transportation constraints have impacted our results; however, we began to see moderate improvements during
the second half of 2023. Significant global supply chain disruption has reduced availability of certain assets used in our
business, and inflation has increased costs for the goods and services we purchase, particularly for labor, repair and
maintenance, and subcontractor costs. Supply chain constraints have caused delayed delivery of fleet, steel containers and
other purchases. Aspects of our business rely on third-party transportation providers, and such services have become more
limited and expensive.
With the significant decline in commodity prices that started in the second half of 2022 and has continued into 2023,
we are currently experiencing margin pressures from our commodity-driven businesses, specifically within our
Recycling Processing and Sales and WM Renewable Energy segments. While still below prices seen at the beginning of
2022, recycling commodity prices began to improve in the fourth quarter of 2023 and while there may be short-term
fluctuations in our commodity-driven businesses as prices change, we continue to focus on adjusting our business models
41
to protect against the down-side risk by spreading the inherent risk of changes in commodity prices across the vertically
integrated value chain. The extent and duration of the impact of labor, supply chain, transportation and commodity price
challenges are subject to numerous external factors beyond our control, including broader macroeconomic conditions;
recessionary fears and/or an economic recession; size, location, and qualifications of the labor pool; wage and price
structures; adoption of new or revised regulations; geopolitical conflicts and responses and supply and demand for
commodities. As we experience inflationary cost pressures, we focus on our pricing efforts, as well as operating
efficiencies and cost controls, to maintain our earnings and cash flow and facilitate growth. With these macroeconomic
pressures, 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.
Current Year Financial Results
During 2023, we continued to focus on our priorities to advance our strategy—enhancing employee engagement,
permanently reducing our cost to serve through the use of technology and automation, and investing in growth through
our Recycling Processing and Sales and WM Renewable Energy segments. This strategic focus, combined with strong
operational execution, resulted in increased revenue, income from operations and income from operations margin. We
remain diligent in offering a competitive and differentiated service that meets the needs of our customers, and we are
focused on driving operating efficiencies and reducing discretionary spend. We continue to invest in our people through
paying a competitive market wage, investments in our digital platform and training for our team members. We also
continue to make investments in automation and optimization to enhance our operational efficiency and improve labor
productivity for all lines of business. During 2023, the Company allocated $2,895 million of available cash to capital
expenditures. We also allocated $2,438 million of available cash to our shareholders during 2023 through dividends and
common stock repurchases.
Key elements of our 2023 financial results include:
• Revenues of $20,426 million for 2023 compared with $19,698 million in 2022, an increase of $728 million, or
3.7%. The increase is primarily attributable to (i) higher yield in our Collection and Disposal businesses;
(ii) acquisitions, net of divestitures and (iii) increased volumes. These increases were partially offset by
commodity price declines in our Recycling Processing and Sales and WM Renewable Energy segments and
decreased revenue from our energy surcharge program as a result of a decline in the price of fuel, particularly
diesel;
• Operating expenses of $12,606 million in 2023, or 61.7% of revenues, compared with $12,294 million, or
62.4% of revenues, in 2022. The $312 million increase is primarily attributable to (i) inflationary cost pressures,
particularly for maintenance and repairs and subcontractor costs and (ii) labor cost pressure from wage increases.
These increases were offset, in part, by commodity driven business impacts from lower recycling rebates reflected
in costs of goods sold and lower fuel prices;
• Selling, general and administrative expenses of $1,926 million in 2023, or 9.4% of revenues, compared with
$1,938 million, or 9.8% of revenues, in 2022. The $12 million decrease was primarily due to (i) reduced
professional fees in connection with investments in our digital platform, as certain digital projects have moved
from higher cost development activities to implementation activities and (ii) lower annual incentive compensation
costs;
•
Income from operations of $3,575 million, or 17.5% of revenues, in 2023 compared with $3,365 million, or
17.1% of revenues, in 2022. The increase in the current year earnings was primarily driven by revenue growth
within our Collection and Disposal businesses partially offset by
(i) impairments within our
Recycling Processing and Sales segment as well as certain investments in our Corporate and Other operations;
(ii) lower market values for RINs and (iii) the decline in recycling commodity prices affecting profitability in our
Recycling Processing and Sales segment;
• Net income attributable to Waste Management, Inc. was $2,304 million, or $5.66 per diluted share, compared
with $2,238 million, or $5.39 per diluted share, in 2022. The increase in income from operations discussed above
was partially offset by higher interest and income tax expense;
42
• Net cash provided by operating activities was $4,719 million in 2023, compared with $4,536 million in 2022.
The increase in net cash provided by operating activities was driven by higher earnings attributable to our
Collection and Disposal businesses and lower income tax payments. This increase was partially offset by
(i) unfavorable changes in working capital, net of effects of acquisitions and divestitures; (ii) higher interest
payments and (iii) higher incentive compensation payments during 2023; and
• Free cash flow was $1,902 million in 2023, compared with $1,976 million in 2022. The decrease in free cash
flow is primarily attributable to the increase in capital spending, primarily driven by our planned and ongoing
investments in our Recycling Processing and Sales and WM Renewable Energy segments and higher capital asset
purchases in the current year to support our Collection and Disposal businesses. The decrease was partially offset
by the increase in net cash provided by operating activities discussed above and higher proceeds from divestitures
of businesses and other assets. 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.
43
Results of Operations
Operating Revenues
The mix of operating revenues for the year ended December 31 are as follows (in millions):
Operating
Gross
Net
Intercompany
Operating
Operating
Revenues Revenues(a) Revenues
Year Ended December 31:
2023
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
5,801 $
3,836
3,474
3,006
16,117
4,863
2,293
23,273
1,576
276
51
$ 25,176 $
$
5,450 $
3,681
3,339
2,683
15,153
4,597
2,143
21,893
1,760
315
50
$ 24,018 $
$
4,759 $
3,210
3,181
2,309
13,459
4,184
2,023
19,666
1,760
220
47
$ 21,693 $
(692)
(753)
(96)
(220)
(1,761)
(1,611)
(1,036)
(4,408)
(312)
(3)
(27)
(4,750)
(590)
(656)
(75)
(217)
(1,538)
(1,535)
(977)
(4,050)
(244)
(3)
(23)
(4,320)
(476)
(524)
(36)
(179)
(1,215)
(1,434)
(918)
(3,567)
(232)
56
(19)
(3,762)
$
5,109
3,083
3,378
2,786
14,356
3,252
1,257
18,865
1,264
273
24
$ 20,426
$
4,860
3,025
3,264
2,466
13,615
3,062
1,166
17,843
1,516
312
27
$ 19,698
$
4,283
2,686
3,145
2,130
12,244
2,750
1,105
16,099
1,528
276
28
$ 17,931
(a) Intercompany operating revenues reflect each segment’s total intercompany sales, including intercompany sales
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.
44
The following table provides details associated with the period-to-period change in revenues and average yield for the
year ended December 31 (dollars in millions):
2023 vs. 2022
Collection and disposal . . . . $ 911
Recycling Processing and
Amount Business(a)
5.4 %
As a % of
Related
As a % of
Total
Amount Company(b)
2022 vs. 2021
As a % of
Related
As a % of
Total
Business(a) Amount Company(b)
6.7 %
Amount
$ 1,025
Sales and WM
Renewable Energy
(c)(d) . . . . . . . . . . . . . . . . . (381)
Energy surcharge and
mandated fees (d)(e) . . . . . (104)
Total average yield (f) . . .
Volume (g) . . . . . . . . . . . .
Internal revenue growth . .
Acquisitions . . . . . . . . . . .
Divestitures . . . . . . . . . . . .
Foreign currency
translation . . . . . . . . . . . .
Total . . . . . . . . . . . . . .
(20.2)
(9.7)
67
426
3.5
65.6
$ 426
150
576
186
(5)
(29)
$ 728
2.1 %
0.8
2.9
0.9
—
(0.1)
3.7 %
$ 1,518
233
1,751
62
(15)
(31)
$ 1,767
8.5 %
1.3
9.8
0.4
(0.1)
(0.2)
9.9 %
(a) Calculated by dividing the increase or decrease for the current year by the prior year’s related business revenue
adjusted to exclude the impacts of divestitures for the current year.
(b) Calculated by dividing the increase or decrease for the current year by the prior year’s total Company revenue adjusted
to exclude the impacts of divestitures for the current year.
(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) Beginning in 2023, the results include changes in our revenue attributable to our WM Renewable Energy segment.
Previously these changes in revenue were included in energy surcharges and mandated fees. We have revised our
prior year results to conform with the current year presentation.
(e) Our energy surcharge was revised in the second quarter of 2023 to incorporate market prices for both diesel and
compressed natural gas (“CNG”).
(f) The amounts reported herein represent the changes in our revenue attributable to average yield for the total Company.
(g) 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 revenue 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.
45
The details of our revenue growth from Collection and Disposal average yield for the year ended December 31 are as
follows (dollars in millions):
2023 vs. 2022
2022 vs. 2021
As a % of
Related
Amount Business
As a % of
Related
Amount Business
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
321
240
191
752
76
83
911
6.5 % $
406
307
7.2
185
6.1
898
6.3
79
2.7
7.5
48
5.4 % $ 1,025
9.2 %
10.2
6.1
8.2
3.1
4.5
6.7 %
Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business.
We are continuing to see growth in our landfill business with our municipal solid waste experiencing average yield of
4.9% in 2023.
Recycling Processing and Sales and WM Renewable Energy — Recycling Processing and Sales revenues attributable
to yield decreased $308 million in 2023 and increased $19 million in 2022, respectively, as compared with the prior year
periods. With the significant decline in commodity prices that started in the second half of 2022 and has continued into
2023, we are currently experiencing margin pressures from our commodity-driven businesses, specifically within our
Recycling Processing and Sales and WM Renewable Energy segments. While still below prices seen at the beginning of
2022, recycling commodity prices began to improve in the fourth quarter of 2023 and while there may be short-term
fluctuations in our commodity-driven businesses as prices change, we continue to focus on adjusting our business models
to protect against the down-side risk by spreading the inherent risk of changes in commodity prices across the vertically
integrated value chain. Average market prices for single-stream recycled commodities were down 40% and 10% in 2023
and 2022, respectively, as compared with the prior year periods. During 2023, the revenue decline from lower commodity
pricing that started in 2022 was partially offset by higher pricing in our recycling brokerage business as well as our
continued focus on a fee-based pricing model. Additionally, revenue in our WM Renewable Energy segment decreased
$73 million and increased $48 million in 2023 and 2022, respectively, as compared with the prior year periods, primarily
driven by the fluctuations in energy prices and the value of RINs.
Energy Surcharge and Mandated Fees — These fees decreased $104 million in 2023 and increased $426 million in
2022, as compared with the prior year periods. Beginning in the second quarter of 2023, our energy surcharge was revised
to incorporate market prices for both diesel and CNG. The decrease in energy surcharge revenues in 2023 is primarily due
to a decline of approximately 15% in market prices for diesel fuel as compared to the prior year period. The increase in
energy surcharge revenues in 2022 was driven by a 50% increase in diesel fuel in 2022, as compared with the prior year
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. These amounts have not significantly impacted the change in
revenue for the periods presented.
Volume
Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $150 million, or 0.8%,
and $233 million, or 1.3%, in 2023 and 2022, respectively, as compared with the prior year periods. Our Collection and
Disposal businesses volume grew 0.7% and 1.8% in 2023 and 2022, respectively.
Our 2023 volume growth has moderated when compared to 2022. Special waste volumes at our landfills continue to
be a significant driver, primarily due to an increase in event-driven projects. In addition, we saw an increase in our WMSBS
volumes. These increases were partially offset by a decrease in temporary industrial collection volumes and the intentional
shedding of low-margin residential collection business.
46
Acquisitions and Divestitures
Acquisitions and divestitures, primarily in our Collection and Disposal businesses, resulted in a net increase in revenues
of $181 million, or 0.9%, and $47 million, or 0.3%, in 2023 and 2022, respectively, as compared with the prior year
periods.
Operating Expenses
Our operating expenses are comprised of (i) labor and related benefits costs (excluding labor costs associated with
maintenance and repairs discussed below), which include salaries and wages, bonuses, related payroll taxes, insurance and
benefits costs and the costs associated with contract labor; (ii) transfer and disposal costs, which include tipping fees paid
to third-party disposal facilities and transfer stations; (iii) maintenance and repairs costs relating to equipment, vehicles
and facilities and related labor costs; (iv) subcontractor costs, which include the costs of independent haulers who transport
waste collected by us to disposal facilities and are affected by variables such as volumes, distance and fuel prices; (v) costs
of goods sold, which includes the cost to purchase recycling materials for our Recycling Processing and Sales segment,
including certain rebates paid to suppliers; (vi) fuel costs, net of tax credits for alternative fuel, which represent the costs
of fuel to operate our truck fleet and landfill operating equipment; (vii) disposal and franchise fees and taxes, which include
landfill taxes, municipal franchise fees, host community fees, contingent landfill lease payments and royalties;
(viii) landfill operating costs, which include interest accretion on landfill liabilities, interest accretion on and discount rate
adjustments to environmental remediation liabilities, leachate and methane collection and treatment, landfill remediation
costs and other landfill site costs; (ix) risk management costs, which include general liability, automobile liability and
workers’ compensation claims programs costs and (x) other operating costs, which include gains and losses on sale of
assets, telecommunications, equipment and facility lease expenses, property taxes, utilities and supplies. Variations in
volumes year-over-year, as discussed above in Operating Revenues, in addition to cost inflation, affect the comparability
of the components of our operating expenses.
The following table summarizes the major components of our operating expenses for the year ended
December 31 (dollars in millions and as a percentage of revenues):
Labor and related benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer and disposal costs . . . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance and repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subcontractor costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposal and franchise fees and taxes . . . . . . . . . . . . . . . . .
Landfill operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
$ 3,669 18.0 % $ 3,452 17.5 % $ 3,223 18.0 %
2021
1,273
1,978
2,185
769
501
736
453
320
722
$ 12,606
6.2
1,215
9.7
1,835
10.7
2,006
3.8
973
2.4
592
3.6
720
2.2
421
1.6
348
732
3.5
61.7 % $ 12,294
6.2
1,161
9.3
1,596
10.2
1,766
4.9
936
3.0
393
3.7
698
2.1
412
1.8
344
582
3.7
62.4 % $ 11,111
6.5
8.9
9.9
5.2
2.2
3.9
2.3
1.9
3.2
62.0 %
Our operating expenses increased in 2023, as compared with 2022, primarily due to (i) inflationary cost pressures,
particularly for maintenance and repairs and subcontractor costs and (ii) labor cost pressure from frontline employee
market wage adjustments. These increases were offset, in part, by commodity-driven business impacts, particularly from
lower recycling rebates reflected in costs of goods sold and lower fuel prices. We continue to focus on operating efficiency
and efforts to control our costs, which along with revenue growth, enabled us to improve operating costs as a percent of
revenues in 2023 as compared with 2022.
Our operating expenses increased in 2022, as compared with 2021, primarily due to (i) inflationary cost pressures,
particularly for maintenance and repairs and subcontractor costs; (ii) commodity-driven business impacts from higher fuel
and recycling prices and (iii) labor cost pressure from frontline employee wage adjustments. These impacts were partially
offset by our continued focus on operating efficiency and efforts to control costs as volumes grow.
47
Significant items affecting the comparison of operating expenses between reported periods include:
Labor and Related Benefits — The increase in labor and related benefits costs in 2023, as compared with 2022, was
primarily driven by (i) employee market wage adjustments; (ii) increased headcount primarily from acquisitions and
(iii) increases in health and welfare costs and in medical care activity. These increases were offset, in part, by lower annual
incentive compensation. The increase in labor and related benefits costs in 2022, as compared with 2021, was largely
driven by (i) proactive market wage adjustments to hire and retain talent; (ii) annual merit and annual incentive
compensation cost increases and (iii) increases in health and welfare costs attributable to our investment in delivering a
leading benefits program for our employees and increases in medical care activity.
Transfer and Disposal Costs — The increase in transfer and disposal costs in 2023, as compared with 2022, was
primarily due to inflationary cost increases, which includes increased disposal fees at third-party sites and higher rates
from our third-party haulers, offset, in part, by a decrease in collection volumes. The increase in transfer and disposal costs
in 2022, as compared with 2021, was largely driven by inflationary cost increases, which includes increased disposal fees
at third-party sites and higher fuel from our third-party haulers, offset, in part, by decreases in residential collection and
transfer volume.
Maintenance and Repairs — The increase in maintenance and repairs costs in 2023, as compared with 2022, was
primarily driven by (i) continued inflationary cost increases for parts, supplies and third-party services, although the impact
of such inflationary cost increases moderated throughout the year and (ii) labor cost increases for our technicians, including
additional headcount. The increase in maintenance and repairs costs in 2022, as compared with 2021, was largely driven
by (i) inflationary cost increases for parts, supplies and third-party services; (ii) additional fleet maintenance driven by
supply chain constraints, which have delayed deliveries of new trucks; (iii) labor cost increases for our technicians,
including higher overtime; (iv) increased building maintenance costs including improvements to facilities and (v) an
increase in container repairs driven by delays in delivery of steel containers due to supply chain constraints.
Subcontractor Costs — The increase in subcontractor costs in 2023, as compared with 2022, was primarily due
to (i) an increase in volumes in our WMSBS and SES businesses, which rely more extensively on subcontracted hauling
and services than other parts of our Collection and Disposal businesses and (ii) continued inflationary cost increases,
particularly labor and other costs from third-party haulers. The increase in subcontractor costs in 2022, as compared with
2021, was largely driven by (i) inflationary cost increases, particularly for fuel and labor costs from third-party haulers
and (ii) an increase in volumes in our WMSBS business, which relies more extensively on subcontracted hauling than
other parts of our Collection and Disposal businesses.
Cost of Goods Sold — The decrease in cost of goods sold in 2023, as compared with 2022, was primarily driven by
a 40% decrease in average single-stream recycling commodity prices. The increase in cost of goods sold in 2022, as
compared with 2021, was primarily driven by all-time high recycling commodity pricing in the first half of the year offset,
in part, by the historically low pricing through the second half of the year that persisted into 2023.
Fuel — The decrease in fuel costs in 2023, as compared with 2022, was primarily due to a decrease of approximately
15% in average market prices for diesel fuel. The approximate 50% increase in fuel costs in 2022, as compared with 2021,
was primarily due to increases in market diesel and natural gas fuel prices as compared to the prior year.
Disposal and Franchise Fees and Taxes — The increase in disposal and franchise fees and taxes in 2023, as compared
with 2022, was primarily driven by an overall rate increase in fees and taxes paid to municipalities on our disposal volumes.
The increase in disposal and franchise fees and taxes in 2022, as compared with 2021, was primarily driven by higher
franchise fees, driven by an increase in landfill volumes, paid to certain municipalities where we operate and overall rate
increases in our fees and taxes paid on our disposal volumes.
Landfill Operating Costs — The increase in landfill operating costs in 2023, as compared with 2022, was primarily
due to (i) higher expenses for interest accretion on landfill and environmental remediation liabilities and (ii) an increase in
remediation expense due to changes in measurement of certain environmental remediation obligations. Our measurement
of these balances includes application of a risk-free discount rate, which is based on the rate for U.S. Treasury bonds. In
2023, the U.S Treasury bond rate remained flat versus a significant increase in 2022, which decreased our remediation
48
expense in 2022. Our landfill operating costs increased in 2022, as compared with 2021, primarily due to increases in
methane and leachate management costs.
Risk Management — The decrease in risk management in 2023, as compared with 2022, was primarily due to lower
levels of large loss claims. Risk management costs increased slightly in 2022, as compared with 2021, primarily due to
inflation in premiums and a stable level of large loss claims.
Other — Other operating costs decreased in 2023, as compared with 2022, primarily due to (i) supply chain rebates
in 2023 and (ii) a favorable litigation settlement, which were offset, in part, by (i) inflationary cost pressures, although the
impact of such continued inflationary cost increases moderated throughout the year; (ii) higher utility costs at our facilities;
(iii) an increase in business travel and (iv) higher equipment rental costs. Other operating cost increases in 2022, as
compared with 2021, were primarily due to (i) inflationary cost pressures; (ii) higher equipment rental costs attributable,
in part, to supply chain constraints slowing normal course fleet and equipment orders; (iii) higher utility costs at our
facilities and (iv) an increase in business travel in 2022. Additionally, a favorable litigation settlement in 2021 impacted
the comparison. Net gains on sales of certain assets during each year also impacted the comparability of the reported
periods.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses consist of (i) labor and related benefits costs, which include salaries,
bonuses, related insurance and benefits, contract labor, payroll taxes and equity-based compensation; (ii) professional fees,
which include fees for consulting, legal, audit and tax services; (iii) provision for bad debts, which includes allowances
for uncollectible customer accounts and collection fees and (iv) other selling, general and administrative expenses, which
include, among other costs, facility-related expenses, voice and data telecommunication, advertising, bank charges,
computer costs, travel and entertainment, rentals, postage and printing. In addition, the financial impacts of litigation
reserves generally are included in our “Other” selling, general and administrative expenses.
The following table summarizes the major components of our selling, general and administrative expenses for the year
ended December 31 (dollars in millions and as a percentage of revenues):
Labor and related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
2021
$ 1,205 5.9 % $ 1,195 6.1 % $ 1,215 6.8 %
228
56
437
$ 1,926
268
1.1
50
0.3
425
2.1
9.4 % $ 1,938
228
1.4
37
0.2
384
2.1
9.8 % $ 1,864
1.3
0.2
2.1
10.4 %
Selling, general and administrative expenses in 2023, as compared with 2022, decreased primarily due to (i) reduced
professional fees in connection with investments in our digital platform, as certain digital projects have moved from higher
cost development activities to implementation activities, and (ii) lower annual incentive compensation costs. These
decreases were partially offset by annual wage increases and increased litigation costs.
Selling, general and administrative expenses in 2022, as compared with 2021, increased primarily due to (i) strategic
investments in our digital platform, including those that support our ongoing sustainability initiatives; (ii) higher annual
incentive compensation costs and merit increases for our employees; (iii) increased business travel and entertainment
expense and (iv) an increase in provision for bad debts, partially offset by (i) lower long-term incentive compensation
costs; (ii) market adjustments for deferred compensation plans related to investment performance and (iii) lower litigation
costs.
The effective management of our costs resulted in a significant reduction in our selling, general and administrative
expenses as a percentage of revenues when compared with each of the prior year periods. Partially offsetting these
reductions are annual merit increases and increased litigation costs.
49
Significant items affecting the comparison of our selling, general and administrative expenses between reported
periods include:
Labor and Related Benefits — The increase in labor and related benefits costs in 2023, as compared with 2022, was
primarily related to (i) annual wage increases for our employees; (ii) market adjustments for deferred compensation plans
related to investment performance and (iii) higher long-term incentive compensation costs, partially offset by lower annual
incentive compensation costs and lower contract labor expenses. The decrease in labor and related benefits costs in 2022,
as compared with 2021, was primarily due to (i) lower long-term incentive compensation costs; (ii) reductions in contract
labor and (iii) market adjustments for deferred compensation plans related to investment performance, partially offset by
higher annual incentive compensation and annual merit increases for our employees.
Professional Fees — The decrease in professional fees in 2023, as compared with 2022, was primarily attributable to
reduced expenses in connection with investments in our digital platform, as certain digital projects have moved from higher
cost development activities to implementation activities. The increase in professional fees in 2022, as compared with 2021,
was primarily driven by strategic investments in our digital platform, including those that support our ongoing
sustainability initiatives, partially offset by lower acquisition and integration costs.
Provision for Bad Debts — The increase in provision for bad debts in 2023, as compared with 2022, was primarily
related to an increase in revenue and customer-specific provisions required for bankruptcies of two of our WMSBS
customers. The increase in provision for bad debts in 2022, as compared with 2021, was primarily related to (i) increased
revenue; (ii) increased collection risk with certain customers and (iii) favorable adjustments to our reserves taken in 2021
as a result of improvement in customer account collections.
Other — The increase in other expenses in 2023, as compared with 2022, was primarily related to (i) increased
litigation costs; (ii) increased bank charges and (iii) higher advertising spend, which were partially offset by lower travel
expenses and lower telecommunication costs. The increase in other expenses in 2022, as compared with 2021, was
primarily driven by costs associated with technology infrastructure to support our strategic investments in our digital
platform and an increase in business travel and entertainment expense, partially offset by lower litigation costs.
Depreciation, Depletion and Amortization Expenses
The following table summarizes the components of our depreciation, depletion and amortization expenses for the year
ended December 31 (dollars in millions and as a percentage of revenues):
Depreciation of tangible property and equipment. . . . . . . . . . .
Depletion of landfill airspace . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
2021
$ 1,197 5.9 % $ 1,155 5.9 % $ 1,125 6.2 %
745
129
$ 2,071
3.6
0.6
731
143
10.1 % $ 2,038 10.3 % $ 1,999
754
129
3.8
0.6
4.1
0.8
11.1 %
The increase in depreciation of tangible property and equipment in 2023, as compared with 2022, was mainly
influenced by strategic investments in our digital platform and investments in capital assets to service our customers, such
as machinery and containers. The decrease in depletion of landfill airspace in 2023, as compared with 2022, was primarily
driven by reductions in volume partially offset by the reopening of a previously closed site in our East Tier.
The increase in depreciation of tangible property and equipment in 2022, as compared with 2021, was primarily driven
by investments in capital assets, including containers to service our customers and strategic investments in our digital
platform. The increase in depletion of landfill airspace in 2022, as compared with 2021, was primarily driven by changes
in depletion rates from revisions in landfill cost estimates and increased volumes at our landfills, partially offset by a prior
year charge due to management’s decision to close a landfill in our West Tier earlier than expected, resulting in the
acceleration of the timing of capping, closure, and post-closure activities. The decrease in amortization of intangible assets
in 2022, as compared with 2021, was primarily driven by the amortization of acquired intangible assets from the acquisition
of Advanced Disposal Services, Inc.
50
(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net
The following table summarizes the major components of (gain) loss from divestitures, asset impairments and unusual
items, net for the year ended December 31 (in millions):
Gain from divestitures, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
2021
$
$
— $
275
(32)
243 $
(5)
50
17
62
$
$
(44)
8
20
(16)
During the year ended December 31, 2023, we recognized $243 million of net charges primarily consisting of (i) a
$168 million goodwill impairment charge within our Recycling Processing and Sales segment related to a business
engaged in accelerating film and plastic wrap recycling capabilities, with $22 million attributable to noncontrolling
interests. This charge was partially offset by the recognition of $46 million of income related to the reversal of a liability
for contingent consideration associated with our investment in such business; (ii) $107 million of impairment charges
within Corporate and Other for certain investments in waste diversion technology businesses and (iii) a $17 million charge
within Corporate and Other to adjust an indirect wholly-owned subsidiary’s estimated potential share of the liability for a
proposed environmental remediation plan at a closed site. Refer to Notes 5 and 10 to the Consolidated Financial Statements
for further information.
During the year ended December 31, 2022, we recognized $62 million of net charges consisting of (i) $50 million of
asset impairment charges primarily related to management’s decision to close two landfills within our East Tier and (ii) a
$17 million charge pertaining to reserves for loss contingencies within Corporate and Other to adjust an indirect
wholly-owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a
closed site, as discussed in Note 10 to the Consolidated Financial Statements. These losses were partially offset by a
$5 million gain from the divestiture of a collection and disposal operation in our West Tier.
During the year ended December 31, 2021, we recognized net gains of $16 million primarily consisting of (i) a
$35 million pre-tax gain from the recognition of cumulative translation adjustments on the divestiture of certain
non-strategic Canadian operations in our East Tier and (ii) an $8 million gain from divestitures of certain ancillary
operations within our Collection and Disposal businesses. These gains were partially offset by (i) a $20 million charge
pertaining to reserves for loss contingencies within Corporate and Other and (ii) $8 million of asset impairment charges
primarily related to our WM Renewable Energy segment.
See Note 2 to the Consolidated Financial Statements for additional information related to the accounting policy and
analysis involved in identifying and calculating impairments. See Note 19 to the Consolidated Financial Statements for
additional information related to the impact of impairments on the results of operations of our reportable segments.
51
Income from Operations
The following table summarizes income from operations for the year ended December 31 (dollars in millions):
Collection and Disposal:
2023
Period-to-
Period
Change
Period-to-
Period
Change
2022
2021
$
East Tier . . . . . . . . . . . . . . . . . . . . . . $ 2,446
West Tier . . . . . . . . . . . . . . . . . . . . . .
2,383
Other Ancillary . . . . . . . . . . . . . . . . .
(8)
4,821
Collection and Disposal . . . . . . . . . . . .
(44)
Recycling Processing and Sales . . . . .
WM Renewable Energy . . . . . . . . . . . .
79
(1,281)
Corporate and Other . . . . . . . . . . . . . . .
Total (a) . . . . . . . . . . . . . . . . . . . . $ 3,575
Percentage of revenues . . . . . . . . . . . . .
$
17.5 %
268
201
(8)
461
(172)
(53)
(26)
210
—
12.3 % $ 2,178
2,182
9.2
*
4,360
10.6
128
*
132
(40.2)
2.1
(1,255)
6.2 % $ 3,365
$ 223
243
18
484
(89)
24
(19)
$ 400
11.4 % $ 1,955
1,939
12.5
(18)
*
3,876
12.5
217
(41.0)
108
22.2
1.5
(1,236)
13.5 % $ 2,965
17.1 %
16.5 %
* Percentage change does not provide a meaningful comparison.
(a) From time to time, the operating results of our reportable segments are significantly affected by certain transactions
or events that management believes are not indicative or representative of our results.
Collection and Disposal — The most significant items affecting the results of operations of our Collection and
Disposal businesses during the three years ended December 31, 2023 are summarized below:
•
•
Income from operations in our Collection and Disposal businesses increased in 2023, as compared with 2022,
primarily due to revenue growth in our collection and disposal operations driven by both yield and volume. This
increase was partially offset by (i) inflationary cost pressures, particularly for maintenance and repairs and
subcontractor costs and (ii) labor cost pressure from frontline employee market wage adjustments.
Income from operations in our Collection and Disposal businesses increased in 2022, as compared with 2021,
primarily due to revenue growth in our collection and disposal operations driven by both yield and volume. This
increase was partially offset by (i) inflationary cost pressures; (ii) labor cost increases from frontline employee
wage adjustments and (iii) divestitures, asset impairments and unusual items discussed below in (Gain) Loss from
Divestitures, Asset Impairments and Unusual Items, Net, that impacted our East Tier results.
Recycling Processing and Sales — Income from operations in our Recycling Processing and Sales segment decreased
in 2023, as compared with 2022, primarily due to (i) a $168 million goodwill impairment charge, with $22 million
attributable to noncontrolling interests, which was partially offset by the recognition of $46 million of income related to
the reversal of contingent consideration, as discussed above in (Gain) Loss from Divestitures, Asset Impairments and
Unusual Items, Net; (ii) a decline in recycling commodity prices; (iii) lower revenue resulting from the temporary
shutdown of facilities for technology upgrades combined with increased costs associated with the transportation and
third-party tip fees for processing recyclables and (iv) startup costs linked to the establishment of a new processing facility.
Income from operations in our Recycling Processing and Sales segment decreased in 2022, as compared with 2021,
primarily due to the decline in recycling commodity prices.
WM Renewable Energy — Income from operations in our WM Renewable Energy segment decreased in 2023, as
compared with 2022, primarily due to (i) lower energy prices and the value of RINs and (ii) increased operating and selling,
general and administrative costs associated with the construction of new projects to increase the beneficial use of landfill
gas. These decreases were partially offset by an increase in volume of RFS credits, electricity and natural gas. Income
from operations in our WM Renewable Energy segment increased in 2022, as compared with 2021, primarily due to higher
market values for RINs credits.
Corporate and Other — Income from operations in Corporate and Other decreased in 2023, as compared with 2022,
primarily due to non-cash impairment charges for certain investments as discussed above in (Gain) Loss from Divestitures,
Asset Impairments and Unusual Items, Net. Income from operations in Corporate and Other decreased in 2022, as
52
compared with 2021, primarily due to strategic investments in our digital platform and sustainability initiatives, partially
offset by lower acquisition and integration related costs.
Interest Expense, Net
Our interest expense, net was $500 million, $378 million and $365 million in 2023, 2022 and 2021, respectively. The
increase in interest expense, net for 2023 is primarily related to an increase in our weighted average borrowing rate of
approximately 80 basis points due to increased rates on floating-rate debt and higher fixed rates on refinancing as well as
an increase in average debt balances to fund growth. To mitigate the impact of increasing interest rates and to provide
certainty in cost, we elected to replace certain floating-rate debt, specifically our $1.0 billion two-year, U.S. term credit
agreement (“Term Loan”) and commercial paper borrowings, with longer-term, fixed-rate debt through our senior notes
issuances as discussed within Liquidity and Capital Resources below. The increase in interest expense, net for 2022 was
primarily related to borrowings incurred under our Term Loan and increases in interest rates on our floating-rate debt,
including commercial paper and variable-rate tax-exempt bonds. Partially offsetting these increases in 2023 and 2022 were
benefits from higher capitalized interest and increases in interest income as a result of higher cash and cash equivalent
balances as well as higher investment rates. See Note 6 to the Consolidated Financial Statements for more information
related to our debt balances.
Loss on Early Extinguishment of Debt, Net
In May 2021, WMI issued $950 million of senior notes and used the net proceeds of $942 million as well as available
cash on hand to retire $1.3 billion of certain high-coupon senior notes. The loss on early extinguishment of debt for 2021
includes $220 million of charges related to this tender offer, including cash paid of $211 million related to premiums and
other third-party costs, and $9 million primarily related to unamortized discounts and debt issuance costs.
Equity in Net Losses of Unconsolidated Entities
We recognized equity in net losses of unconsolidated entities of $60 million, $67 million and $36 million in 2023,
2022 and 2021, respectively. The losses for each period were primarily related to our noncontrolling interests in entities
established to invest in and manage low-income housing properties. We generate tax benefits, including tax credits, from
the losses incurred from these investments. The losses are more than offset by the tax benefits generated by these
investments as further discussed in Notes 8 and 18 to the Consolidated Financial Statements.
Income Tax Expense
We recorded income tax expense of $745 million, $678 million and $532 million in 2023, 2022 and 2021,
respectively, resulting in effective income tax rates of 24.7%, 23.2% and 22.6% for the years ended December 31, 2023,
2022 and 2021, respectively. The comparability of our income tax expense for the reported periods has been primarily
affected by the following:
•
Investments Qualifying for Federal Tax Credits — Our low-income housing properties investments reduced our
income tax expense by $108 million, $99 million and $74 million, primarily due to tax credits realized from these
investments as well as the tax benefits from pre-tax losses for the years ended December 31, 2023, 2022 and
2021, respectively. See Note 18 to the Consolidated Financial Statements for additional information related to
these unconsolidated variable interest entities;
• Tax Implications of Impairments — The non-cash impairment charges recognized during 2023 are not expected
to be deductible for tax purposes. The impact of these non-deductible charges would have resulted in a decrease
to income tax expense of $50 million. The non-cash impairment charges recognized during 2022 and 2021 were
deductible for tax purposes. See Note 11 to the Consolidated Financial Statements for more information related
to our impairment charges;
• Permanent Differences — During 2023, 2022 and 2021 we recognized additional income tax expense of
$34 million, $14 million and $2 million, respectively, related to permanent differences between taxable income
and accounting income. This increase is largely due to an increase in taxable interest income associated with the
53
Company’s election to deduct landfill closure and post-closure costs for income tax purposes when incurred and
accrued. The increase in taxable interest income is due to the increase in the applicable federal rate published by
the IRS;
•
State Net Operating Losses and Credits — During 2023, 2022 and 2021, we recognized state net operating losses
and credits resulting in a reduction in our income tax expense of $20 million, $8 million and $15 million,
respectively;
• Equity-Based Compensation — During 2023, 2022 and 2021, we recognized a reduction in our income tax
expense of $14 million, $17 million and $18 million, respectively, for excess tax benefits related to the vesting
or exercise of equity-based compensation awards;
• Tax Audit Settlements — We file income tax returns in the U.S. and Canada, as well as other state and local
jurisdictions. We are currently under audit by various taxing authorities and our audits are in various stages of
completion. During the reported periods, we settled various tax audits which resulted in a reduction in our income
tax expense of $5 million, $6 million and $13 million for the years ended December 31, 2023, 2022 and 2021,
respectively; and
• Tax Legislation — The Inflation Reduction Act of 2022 (“IRA”) was signed into law by President Biden on
August 16, 2022 and 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 related to alternative fuel tax credits secure approximately $55 million of annual pre-tax
benefit (recorded as a reduction in our operating expense) for tax credits in 2022, 2023 and 2024.
With respect to the investment tax credit, as expanded by the IRA, we expect the cumulative benefit to be between
$250 million and $350 million, a large portion of which is anticipated to be realized in 2024 through 2026.
Recently, however, the IRS issued proposed regulations applicable to the investment tax credits that could call
into question our ability to realize some, or all, of this tax benefit, which would negatively impact financial
expectations in connection with our significant planned and ongoing investments in sustainability growth projects
in our WM Renewable Energy segment. The proposed regulations provide a public comment period, culminating
in public hearings before the Treasury Department, to allow taxpayers to provide input prior to the issuance of
final regulations. In coordination with other members of the RNG industry, we are actively using this public
comment period to work with external advisors, the U.S. Congress, the current federal administration, and other
biogas sector stakeholders to encourage the Treasury Department to further refine its analysis prior to publication
of final regulations that more accurately reflect the express language and legislative intent of the statute with
respect to the investment tax credit. However, there is no guarantee that such efforts will be successful. We expect
that the production tax credit incentives for investments in renewable energy and carbon capture, as expanded by
the IRA, will likely result in an incremental benefit to the Company, although at this time, the anticipated amount
of such benefit has not been quantified.
Our current expectation is that the IRA’s minimum corporate tax will not have an impact on the Company. Finally,
in accordance with the IRA, we incurred a nondeductible excise tax of 1% on the net value of certain stock
repurchases in 2023, which is reflected in the cost of purchasing the underlying shares as a component of treasury
stock in our Consolidated Balance Sheet.
Additionally, numerous countries have agreed to a statement in support of the Organization for Economic
Co-operation and Development (“OECD”) model rules that propose a global minimum tax rate of 15%. The
Company operates in countries that have agreed to implement the global minimum tax, and the OECD continues
to refine technical guidance for such. At this time, we do not expect the 15% global minimum tax to have a
material, if any, impact to our income taxes, and we will continue to monitor and evaluate the potential impact
on our business in future periods.
See Note 8 to the Consolidated Financial Statements for more information related to income taxes.
54
Landfill and Environmental Remediation Discussion and Analysis
We owned or operated 258 solid waste landfills and five secure hazardous waste landfills as of December 31, 2023
and December 31, 2022. For these landfills, the following table reflects changes in capacity, as measured in tons of waste,
for the year ended December 31 and remaining airspace, measured in cubic yards of waste, as of December 31 (in
millions):
2023
2022
Remaining
Permitted
Expansion
Total
Remaining
Permitted Expansion
Total
Balance as of beginning of year (in tons) . . . . . . . . . . . .
Acquisitions, divestitures, newly permitted landfills
and closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in expansions pursued (a) . . . . . . . . . . . . . . . . .
Expansion permits granted (b) . . . . . . . . . . . . . . . . . . . . .
Depletable tons received . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in engineering estimates and other (c) (d) . . . .
Balance as of end of year (in tons) (e) . . . . . . . . . . . . . . .
Balance as of end of year (in cubic yards) (e) . . . . . . . . .
Capacity Capacity Capacity Capacity Capacity Capacity
5,063
4,889
5,165
5,355
174
190
—
—
168
(123)
1
5,211
5,095
—
138
(168)
—
1
161
160
—
138
—
(123)
2
5,372
5,255
163
—
57
(125)
181
5,165
5,079
—
62
(57)
—
11
190
180
163
62
—
(125)
192
5,355
5,259
(a) Amounts reflected here relate to the combined impacts of (i) new expansions pursued; (ii) increases or decreases in
the airspace being pursued for ongoing expansion efforts; (iii) adjustments for differences between the airspace being
pursued and airspace granted and (iv) decreases due to decisions to no longer pursue expansion permits, if any.
(b) We received expansion permits at 13 of our landfills during 2023 and 12 of our landfills during 2022, demonstrating
our continued success in working with municipalities and regulatory agencies to expand the disposal airspace of our
existing landfills.
(c) Changes in engineering estimates can result in changes to the estimated available remaining airspace of a landfill or
changes in the utilization of such landfill airspace, affecting the number of tons that can be placed in the future.
Estimates of the amount of waste that can be placed in the future are reviewed annually by our engineers and are based
on a number of factors, including standard engineering techniques and site-specific factors such as current and
projected mix of waste type; initial and projected waste density; estimated number of years of life remaining; depth
of underlying waste; anticipated access to moisture through precipitation or recirculation of landfill leachate and
operating practices. We continually focus on improving the utilization of airspace through efforts that may include
recirculating landfill leachate where allowed by permit; optimizing the placement of daily cover materials and
increasing initial compaction through improved landfill equipment, operations and training.
(d) In 2022, a change in accounting estimate resulted in an increase of 190 million tons across certain landfills.
(e) See Note 2 to the Consolidated Financial Statements for discussion of converting remaining cubic yards of airspace
to tons of capacity.
The depletable tons received at our landfills for the year ended December 31 are shown below (tons in thousands):
2023
2022
Solid waste landfills (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hazardous waste landfills . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Solid waste landfills closed, divested or lease or other
contractual agreement expired during related year . . . . . . .
—
# of
Sites
258
5
263
Depletable Tons per # of Depletable Tons per
Tons
122,141
658
122,799
—
122,799
Day
Sites Tons
450
2
452
258 123,462
652
263 124,114
5
Day
452
2
454
4
633
124,747
(a) As of December 31, 2023 and 2022, we had 17 landfills which were not accepting waste.
55
As of December 31, 2023, we owned or controlled the management of 237 sites with remedial activities, are in closure
or have received a certification of closure or post-closure from the applicable regulatory agency.
Based on remaining permitted airspace as of December 31, 2023 and projected annual disposal volume, the weighted
average remaining landfill life for all of our owned or operated landfills is approximately 38 years. Many of our landfills
have the potential for expanded airspace beyond what is currently permitted. We monitor the availability of permitted
airspace at each of our landfills and evaluate whether to pursue an expansion at a given landfill based on estimated future
disposal volume, disposal prices, construction and operating costs, remaining airspace and likelihood of obtaining an
expansion permit. We are seeking expansion permits at 16 of our landfills that meet the expansion criteria outlined in the
Critical Accounting Estimates and Assumptions — Landfills section below. Although no assurances can be made that all
future expansions will be permitted or permitted as designed, the weighted average remaining landfill life for all owned or
operated landfills is approximately 39 years when considering remaining permitted airspace, expansion airspace and
projected annual disposal volume.
The number of landfills owned or operated as of December 31, 2023, segregated by their estimated operating lives
based on remaining permitted and expansion airspace and projected annual disposal volume, was as follows:
0 to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6 to 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 to 20 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21 to 40 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41+ years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
# of Landfills
31
22
50
66
94
263 (a)
(a) Of the 263 landfills, 222 are owned, 29 are operated under lease agreements and 12 are operated under other
contractual agreements. For the landfills not owned, we are usually responsible for final capping, closure and
post-closure obligations.
Landfill Assets — We capitalize various costs that we incur to prepare a landfill to accept waste. These costs generally
include expenditures for land (including the landfill footprint and required landfill buffer property), permitting, excavation,
liner material and installation, landfill leachate collection systems, landfill gas collection systems, environmental
monitoring equipment for groundwater and landfill gas, directly related engineering, capitalized interest, and on-site road
construction and other capital infrastructure costs. The cost basis of our landfill assets also includes estimates of future
costs associated with landfill final capping, closure and post-closure activities, which are discussed further below.
The changes to the cost basis of our landfill assets and accumulated landfill airspace depletion for the year ended
December 31, 2023 are reflected in the table below (in millions):
Cost Basis of
Landfill Assets
Accumulated
Landfill Airspace
Net Book
Value of
December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations incurred and capitalized . . . . . . . . . . . . .
Depletion of landfill airspace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirements and other adjustments . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
18,526
722
79
—
28
118
19,473
$
$
Depletion
(10,896) $
—
—
(745)
(12)
10
(11,643) $
Landfill Assets
7,630
722
79
(745)
16
128
7,830
As of December 31, 2023, we estimate that we will spend approximately $795 million in 2024, and approximately
$1.7 billion in 2025 and 2026 combined, for the construction and development of our landfill assets. The specific timing
of landfill capital spending is dependent on future events and spending estimates are subject to change due to fluctuations
in landfill waste volumes, changes in environmental requirements and other factors impacting landfill operations.
56
Landfill and Environmental Remediation Liabilities — As we accept waste at our landfills, we incur significant asset
retirement obligations, which include liabilities associated with landfill final capping, closure and post-closure activities.
These liabilities are accounted for in accordance with authoritative guidance on accounting for asset retirement obligations
and are discussed in Note 2 to the Consolidated Financial Statements. We also have liabilities for the remediation of
properties that have incurred environmental damage, which generally was caused by operations or for damage caused by
conditions that existed before we acquired operations or a site. We recognize environmental remediation liabilities when
we determine that the liability is probable and the cost for the likely remedy can be reasonably estimated.
The changes to landfill and environmental remediation liabilities for the year ended December 31, 2023 are reflected
in the table below (in millions):
December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations incurred and capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions in estimates and interest rate assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, divestitures and other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Landfill
Environmental
Remediation
204
—
(27)
6
26
—
209
2,664 $
79
(147)
124
131
2
2,853 $
Landfill Operating Costs — The following table summarizes our landfill operating costs for the year ended
December 31 (in millions):
Interest accretion on landfill and environmental remediation liabilities . . . . . . . . . .
Leachate and methane collection and treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill remediation costs and discount rate adjustments to environmental
remediation liabilities and recovery assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other landfill site costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total landfill operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2023
2022
2021
130 $
196
112
193
7
120
453 $
(2)
118
421
$
$
111
183
1
117
412
Depletion of Landfill Airspace — Depletion of landfill airspace, which is included as a component of depreciation,
depletion and amortization expenses, includes the following:
•
•
the depletion of landfill capital costs, including (i) costs that have been incurred and capitalized and (ii) estimated
future costs for landfill development and construction required to develop our landfills to their remaining
permitted and expansion airspace; and
the depletion of asset retirement costs arising from landfill final capping, closure and post-closure obligations,
including (i) costs that have been incurred and capitalized and (ii) projected asset retirement costs.
Depletion expense is recorded on a units-of-consumption basis, applying cost as a rate per ton. The rate per ton is
calculated by dividing each component of the depletable basis of a landfill (net of accumulated depletion) by the number
of tons needed to fill the corresponding asset’s remaining permitted and expansion airspace. Landfill capital costs and
closure and post-closure asset retirement costs are generally incurred to support the operation of the landfill over its entire
operating life and are, therefore, depleted on a per-ton basis using a landfill’s total permitted and expansion airspace. Final
capping asset retirement costs are related to a specific final capping event and are, therefore, depleted on a per-ton basis
using each discrete final capping event’s estimated permitted and expansion airspace. Accordingly, each landfill has
multiple per-ton depletion rates.
57
The following table presents our landfill airspace depletion expense on a per-ton basis for the year ended
December 31:
Depletion of landfill airspace (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tons received, net of redirected waste (in millions). . . . . . . . . . . . . . . . . . . . . . . . .
Average landfill airspace depletion expense per ton. . . . . . . . . . . . . . . . . . . . . . . . .
$
$
745 $
123
6.07 $
754
125
6.05
$
$
731
124
5.90
2023
2022
2021
Different per-ton depletion rates are applied at each of our 263 landfills, and per-ton depletion rates vary significantly
from one landfill to another due to (i) inconsistencies that often exist in construction costs and provincial, state and local
regulatory requirements for landfill development and landfill final capping, closure and post-closure activities and
(ii) differences in the cost basis of landfills that we develop versus those that we acquire. Accordingly, our landfill airspace
depletion expense measured on a per-ton basis can fluctuate due to changes in the mix of volumes we receive across the
Company each year.
Liquidity and Capital Resources
The Company consistently generates annual 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 Contractual Obligations
The following table summarizes our significant contractual obligations as of December 31, 2023 (other than recorded
obligations related to liabilities associated with environmental remediation costs and non-cancelable operating lease
obligations, which are discussed further in Notes 3 and 7 to the Consolidated Financial Statements, respectively) and the
anticipated effect of these obligations on our liquidity in future years (in millions):
2024
2025
2026
2027
2028
Thereafter Total
Recorded Obligations:
Final capping, closure and post-closure liabilities (a) . . . $ 143 $ 254 $
Debt payments (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecorded Obligations:
Interest on debt (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated unconditional purchase obligations (d) . . . . . .
1,192
1,355
5,902
566
1,035
173
Anticipated liquidity impact as of December 31, 2023 . $ 2,074 $ 2,317 $ 1,542 $ 1,941 $ 1,538 $ 18,292 $ 27,704
448 3,340
470
486
51
518
133
544
164
44
178 $ 206 $ 154 $ 3,480 $ 4,415
16,352
713
892 11,002
1,198
(a) Includes liabilities for final capping, closure and post-closure costs recorded in our Consolidated Balance Sheet as of
December 31, 2023, without the impact of discounting and inflation. Our recorded liabilities for final capping, closure
and post-closure costs will increase as we continue to place additional tons within the permitted airspace at our
landfills.
(b) These amounts represent the scheduled principal payments based on their contractual maturities related to our
long-term debt and financing leases, excluding interest. Refer to Note 6 to the Consolidated Financial Statements for
additional information regarding our debt obligations.
(c) Interest on our fixed-rate debt was calculated based on contractual rates and interest on our variable-rate debt was
calculated based on interest rates as of December 31, 2023. As of December 31, 2023, we had $154 million of accrued
interest related to our debt obligations.
58
(d) Our obligations represent purchase commitments from which we expect to realize an economic benefit in future
periods. We have also made certain guarantees that we do not expect to materially affect our current or future financial
position, results of operations or liquidity. See Note 10 to the Consolidated Financial Statements for discussion of the
nature and terms of our unconditional purchase obligations and guarantees.
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 as of December 31
(in millions):
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted funds:
Insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Final capping, closure, post-closure and environmental remediation funds . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total restricted funds (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt:
Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
458 $
376 $
119
17
512 $
351
313
113
5
431
334 $
15,895
16,229 $
414
14,570
14,984
$
$
$
$
$
(a) As of December 31, 2023 and 2022, $90 million and $83 million, respectively, of these account balances was included
in other current assets in our Consolidated Balance Sheets.
Debt — We use long-term borrowings in addition to the cash we generate from operations as part of our overall
financial strategy to support and grow our business. We primarily use senior notes and tax-exempt bonds to borrow on a
long-term basis, but we also use other instruments and facilities, when appropriate. The components of our borrowings as
of December 31, 2023 are described in Note 6 to the Consolidated Financial Statements.
As of December 31, 2023, we had approximately $2.8 billion of debt maturing within the next 12 months, including
(i) $1.6 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) $859 million of short-term borrowings under our commercial paper program (net of related
discount on issuance); (iii) $175 million of other debt with scheduled maturities within the next 12 months, including
$60 million of tax exempt bonds, and (iv) $156 million of 3.5% senior notes that mature in May 2024. As of
December 31, 2023, we have classified $2.4 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 (“$3.5 billion revolving credit facility”). The
remaining $334 million of debt maturing in the next 12 months is classified as current obligations.
In February 2023, WMI issued $750 million and $500 million of 4.625% senior notes due February 2030 and
February 2033, respectively, the net proceeds of which were $1.24 billion. We used the net proceeds to reduce outstanding
borrowings under our commercial paper program, repay $500 million of WMI’s 2.4% senior notes upon maturity in
in our
May 2023, and for general corporate purposes,
Recycling Processing and Sales and WM Renewable Energy segments.
including our planned and ongoing
investments
In July 2023, WMI issued $750 million and $1.25 billion of 4.875% senior notes due February 2029 and
February 2034, respectively, the net proceeds of which were $1.97 billion. We used the net proceeds to reduce outstanding
borrowings under our commercial paper program, repay $1.0 billion of outstanding borrowings under our Term Loan and
for general corporate purposes.
59
We have credit lines in place to support our liquidity and financial assurance needs. The following table summarizes
our outstanding letters of credit, categorized by type of facility as of December 31 (in millions):
Revolving credit facility (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other letter of credit lines (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2023
180
834
1,014
2022
166
800
966
$
$
(a) As of December 31, 2023 and 2022, we had an unused and available credit capacity of $2.5 billion and $1.6 billion,
respectively.
(b) As of December 31, 2023, these other letter of credit lines are uncommitted with terms extending through December
2027.
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):
Balance Sheet Information:
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent liabilities:
Advances due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2023
276
25
336
21,228
13,798
Income Statement Information:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
348
Year Ended
December 31, 2023
Summary of Cash Flow Activity
The following is a summary of our cash flows for the year ended December 31 (in millions):
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
4,719 $
2022
$
4,536
$ (3,091) $ (3,063)
$ (1,524) $ (1,216)
2021
$
4,338
$ (1,894)
$ (2,900)
Net Cash Provided by Operating Activities — Our operating cash flows increased in 2023, as compared with 2022,
by $183 million primarily driven by higher earnings attributable to our Collection and Disposal businesses and lower
income tax payments as a result of a deposit of approximately $103 million that was made to the IRS in 2022 related to a
disputed tax matter discussed within Note 8 to the Consolidated Financial Statements. These increases were partially offset
60
by (i) unfavorable changes in working capital, net of effects of acquisitions and divestitures; (ii) higher interest payments
and (iii) higher incentive compensation payments.
Our operating cash flows for 2022, as compared with 2021, increased by $198 million. The increase was largely driven
by increased earnings in our Collection and Disposal businesses and WM Renewable Energy segment. We also
experienced lower interest payments due to timing and refinancing activities in 2021 that reduced our overall interest rate.
Partially offsetting our increase in cash from operating activities were higher income tax payments as a result of higher
earnings in 2022 and a deposit of approximately $103 million that was made to the IRS related to a disputed tax matter.
The Company expects to seek a refund of the entire amount deposited with the IRS and litigate any denial of the claim for
refund. See Note 8 to the Consolidated Financial Statements for further details.
Net Cash Used in Investing Activities — The most significant items affecting the comparison of our investing cash
flows for the periods presented are summarized below:
• Acquisitions — Our spending on acquisitions was $173 million, $377 million and $76 million in 2023, 2022 and
2021, respectively, of which $170 million, $377 million and $75 million, respectively, are considered cash used
in investing activities. The remaining spend is financing or operating activities related to the timing of contingent
consideration paid. Substantially all of these acquisitions are related to our Collection and Disposal businesses.
Our acquisition spending in 2022 was primarily attributable to the purchase of a controlling interest in a business
intended to accelerate our film and plastic wrap recycling capabilities. See Note 17 to the Consolidated Financial
Statements for additional information. We continue to focus on accretive acquisitions and growth opportunities
that will enhance and expand our existing service offerings.
• Capital Expenditures — We used $2,895 million, $2,587 million and $1,904 million for capital expenditures in
2023, 2022 and 2021, respectively. The increase in capital spending is primarily driven by our planned and
ongoing investments in our Recycling Processing and Sales and WM Renewable Energy segments, as well as
inflationary increases in many fixed asset categories required to support ongoing operations and investments in
the Company’s landfills to reduce greenhouse gas emissions. The increase in 2022 is primarily driven by our
planned and ongoing investments in our Recycling Processing and Sales and WM Renewable Energy segments,
as well as timing differences in our fixed asset purchases to support our Collection and Disposal businesses.
The Company continues to maintain a disciplined focus on capital management to prioritize investments for
expansion, the replacement of aging assets and assets that support our strategy of differentiation and continuous
improvement through efficiency and innovation. The Company expects to invest $2.8 billion to $2.9 billion in
growth investments across the recycling and renewable energy platforms from 2022 to 2026, which includes the
$1.325 billion already invested in 2022 and 2023.
• Divestitures — Proceeds from divestitures of businesses and other assets, net of cash divested, were $78 million,
$27 million and $96 million in 2023, 2022 and 2021, respectively. In 2023, our proceeds are primarily the result
of the sale of certain non-strategic assets. In 2021, our proceeds are primarily the result of the sale of certain
non-strategic Canadian operations.
• Other, Net — Our spending within other, net was $104 million, $126 million and $11 million in 2023, 2022 and
2021, respectively. During 2023, 2022 and 2021, we used $61 million, $23 million and $32 million, respectively,
of cash from restricted cash and cash equivalents to invest in available-for-sale securities. In 2023, we used
$20 million to make an initial cash payment associated with a low-income housing investment. In 2022, we used
$67 million to fund secured convertible promissory notes associated with an acquisition and $28 million to make
an initial cash payment associated with a low-income housing investment. Our 2021 cash spend was partially
offset by proceeds received from the sale of an equity method investment.
61
Net Cash Used in Financing Activities — The most significant items affecting the comparison of our financing cash
flows for the periods presented are summarized below:
• Debt Borrowings (Repayments) — The following summarizes our cash borrowings and repayments of debt for
the year ended December 31 (in millions):
2023
2022
2021
Borrowings:
Commercial paper program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax-exempt bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments:
Commercial paper program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax-exempt bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash borrowings (repayments) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 17,799 $ 6,596 $ 6,831
—
942
175
$ 21,306 $ 8,688 $ 7,948
1,000
992
100
—
3,207
300
(500)
(1,000)
(65)
(120)
$ (18,709) $ (6,664) $ (6,872)
(1,289)
—
(127)
(116)
$ (20,394) $ (7,328) $ (8,404)
(456)
912 $ 1,360 $
$
(500)
—
(71)
(93)
Refer to Note 6 to the Consolidated Financial Statements for additional information related to our debt borrowings
and repayments.
• Premiums and Other Paid on Early Extinguishment of Debt — During 2021, we paid premiums and other
third-party costs of $211 million to retire certain high-coupon notes. See Loss on Early Extinguishment of Debt,
Net for further discussion.
• Common Stock Repurchase Program — For the periods presented, all share repurchases have been made in
accordance with financial plans approved by our Board of Directors. We allocated $1,302 million, $1,500 million
and $1,350 million of available cash to common stock repurchases during 2023, 2022, and 2021, respectively.
See Note 13 to the Consolidated Financial Statements for additional information.
We announced in December 2023 that the Board of Directors has authorized up to $1.5 billion in future share
repurchases, excluding the 1% excise tax. This new authorization supersedes and replaces remaining authority
under the prior Board of Directors’ authorization for share repurchases announced in December 2022. The amount
of future share repurchases executed under our Board of Directors’ authorization is determined in management’s
discretion, based on various factors, including our net earnings, financial condition and cash required for future
business plans, growth and acquisitions.
• Cash Dividends — For the periods presented, all dividends have been declared by our Board of Directors. Cash
dividends declared and paid were $1,136 million in 2023, or $2.80 per common share, $1,077 million in 2022, or
$2.60 per common share, and $970 million in 2021, or $2.30 per common share.
In December 2023, we announced that our Board of Directors expects to increase the quarterly dividend from
$0.70 to $0.75 per share for dividends declared in 2024. However, all future dividend declarations are at the
discretion of the Board of Directors and depend on various factors, including our net earnings, financial condition,
cash required for future business plans, growth and acquisitions and other factors the Board of Directors may
deem relevant.
• Exercise of Common Stock Options — The exercise of common stock options generated financing cash inflows
of $44 million, $44 million and $66 million from the exercise of 597,000, 675,000 and 962,000 of employee stock
options during 2023, 2022 and 2021, respectively.
62
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 is shown in the table
below for the year ended December 31 (in millions), and may not be calculated the same as similarly-titled measures
presented by other companies:
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Capital expenditures to support the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures - sustainability growth investments (a) . . . . . . . . . . . . . . . . . .
Total capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from divestitures of businesses and other assets, net of cash divested . . . .
Free cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023
4,719 $
(2,131)
(764)
(2,895)
78
1,902 $
2022
4,536 $
(2,026)
(561)
(2,587)
27
1,976 $
2021
4,338
(1,665)
(239)
(1,904)
96
2,530
(a) These growth investments are intended to further our sustainability leadership position by increasing recycling
volumes and growing renewable natural gas generation and 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. Each of these items is discussed in additional detail below and in Note 2 to the
Consolidated Financial Statements. Actual results could differ materially from the estimates and assumptions that we use
in the preparation of our financial statements.
Landfills
Accounting for landfills requires that significant estimates and assumptions be made regarding (i) the cost to construct
and develop each landfill asset; (ii) the estimated fair value of final capping, closure and post-closure asset retirement
obligations, which must consider both the expected cost and timing of these activities and (iii) the determination of each
landfill’s remaining permitted and expansion airspace.
Landfill Costs — We estimate the total cost to develop each of our landfill sites to its remaining permitted and
expansion airspace. This estimate includes such costs as landfill liner material and installation, excavation for airspace,
landfill leachate collection systems, landfill gas collection systems, environmental monitoring equipment for groundwater
and landfill gas, directly related engineering, capitalized interest, on-site road construction and other capital infrastructure
costs. Additionally, landfill development includes all land purchases for the landfill footprint and landfill buffer property.
The projection of these landfill costs is dependent, in part, on future events. The remaining depletable basis of each landfill
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includes costs to develop a site to its remaining permitted and expansion airspace and includes amounts previously
expended and capitalized, net of accumulated airspace depletion, and projections of future purchase and development
costs.
Final Capping Costs — We estimate the cost for each final capping event based on the area to be capped and the
capping materials and activities required. The estimates also consider when these costs are anticipated to be paid and factor
in inflation and discount rates. Our engineering personnel allocate landfill final capping costs to specific final capping
events and the capping costs are depleted as waste is disposed of at the landfill. We review these costs annually, or more
often if significant facts change. Changes in estimates, such as timing or cost of construction, for final capping events
immediately impact the required liability and the corresponding asset. When the change in estimate relates to a fully
consumed landfill, the adjustment to the asset must be depleted immediately through expense. When the change in estimate
relates to a final capping event at a landfill with remaining airspace, the adjustment to the asset is recognized in income
prospectively as a component of landfill airspace depletion.
Closure and Post-Closure Costs — We base our estimates for closure and post-closure costs on our interpretations of
permit and regulatory requirements for closure and post-closure monitoring and maintenance. The estimates for landfill
closure and post-closure costs also consider when the costs are anticipated to be paid and factor in inflation and discount
rates. The possibility of changing legal and regulatory requirements and the forward-looking nature of these types of costs
make any estimation or assumption less certain. Changes in estimates for closure and post-closure events immediately
impact the required liability and the corresponding asset. When the change in estimate relates to a fully consumed landfill,
the adjustment to the asset must be depleted immediately through expense. When the change in estimate relates to a landfill
with remaining airspace, the adjustment to the asset is recognized in income prospectively as a component of landfill
airspace depletion.
Remaining Permitted Airspace — Our engineers, in consultation with third-party engineering consultants and
surveyors, are responsible for determining remaining permitted airspace at our landfills. The remaining permitted airspace
is determined by an annual survey, which is used to compare the existing landfill topography to the expected final landfill
topography.
Expansion Airspace — We also include currently unpermitted expansion airspace in our estimate of remaining
permitted and expansion airspace in certain circumstances. First, for unpermitted airspace to be initially included in our
estimate of remaining permitted and expansion airspace, we must believe that obtaining the expansion permit is likely.
Second, we must generally expect the initial expansion permit application to be submitted within one year and the final
expansion permit to be received within five years, in addition to meeting the following criteria:
• Personnel are actively working on the expansion of an existing landfill, including efforts to obtain land use and
local, state or provincial approvals;
• We have a legal right to use or obtain land to be included in the expansion plan;
• There are no significant known technical, legal, community, business, or political restrictions or similar issues
that could negatively affect the success of such expansion; and
• Financial analysis has been completed based on conceptual design, and the results demonstrate that the expansion
meets Company criteria for investment.
These criteria are evaluated by our field-based engineers, accountants, managers and others to identify potential
obstacles to obtaining the permits. Once the unpermitted airspace is included, our policy provides that airspace may
continue to be included in remaining permitted and expansion airspace even if certain of these criteria are no longer met
as long as we continue to believe we will ultimately obtain the permit, based on the facts and circumstances of a specific
landfill. In these circumstances, continued inclusion must be approved through a landfill-specific review process that
includes approval by our Chief Financial Officer on a quarterly basis.
When we include the expansion airspace in our calculations of remaining permitted and expansion airspace, we also
include the projected costs for development, as well as the projected asset retirement costs related to final capping, closure
and post-closure of the expansion in the depletable basis of the landfill.
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Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization factor
(“AUF”) is established to calculate the remaining permitted and expansion capacity in tons. The AUF is established using
the measured density obtained from previous annual surveys and is then adjusted to account for future settlement. The
amount of settlement that is forecasted will consider several site-specific factors including current and projected mix of
waste type, initial and projected waste density, estimated number of years of life remaining, depth of underlying waste,
anticipated access to moisture through precipitation or recirculation of landfill leachate and operating practices. In addition,
the initial selection of the AUF is subject to a subsequent multi-level review by our engineering group and the AUF used
is reviewed on a periodic basis and revised as necessary. Our historical experience generally indicates that the impact of
settlement at a landfill is greater later in the life of the landfill when the waste placed at the landfill approaches its highest
point under the permit requirements.
After determining the costs and remaining permitted and expansion capacity at each of our landfills, we determine the
per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the costs by the
corresponding number of tons. We calculate per ton depletion rates for each landfill for assets associated with each final
capping event, for assets related to closure and post-closure activities and for all other costs capitalized or to be capitalized
in the future. These rates per ton are updated annually, or more often, as significant facts change.
It is possible that actual results, including the amount of costs incurred, the timing of final capping, closure and
post-closure activities, our airspace utilization or the success of our expansion efforts could ultimately turn out to be
significantly different from our estimates and assumptions. To the extent that such estimates, or related assumptions, prove
to be significantly different than actual results, lower earnings may be experienced due to higher depletion rates or higher
expenses; or higher earnings may result if the opposite occurs. Most significantly, if it is determined that expansion
capacity should no longer be considered in calculating the recoverability of a landfill asset, we may be required to recognize
an asset impairment or incur significantly higher depletion expense. If at any time management makes the decision to
abandon the expansion effort, the capitalized costs related to the expansion effort are expensed immediately.
Environmental Remediation Liabilities
A significant portion of our operating costs and capital expenditures could be characterized as costs of environmental
protection. The nature of our operations, particularly with respect to the construction, operation and maintenance of our
landfills subjects us to an array of laws and regulations relating to the protection of the environment. Under current laws
and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by
conditions that existed before we acquired a site. In addition to remediation activity required by state or local authorities,
such liabilities include potentially responsible party (“PRP”) investigations. The costs associated with these liabilities can
include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated
with site investigation and clean up.
Where it is probable that a liability has been incurred, we estimate costs required to remediate sites based on
site-specific facts and circumstances. We routinely review and evaluate sites that require remediation and determine our
estimated cost for the likely remedy based on a number of estimates and assumptions. Next, we review the same type of
information with respect to other named and unnamed PRPs. Estimates of the costs for the likely remedy are then either
developed using our internal resources or by third-party environmental engineers or other service providers. Internally
developed estimates are based on:
• Management’s judgment and experience in remediating our own and unrelated parties’ sites;
•
• The number, financial resources and relative degree of responsibility of other PRPs who may be liable for
Information available from regulatory agencies as to costs of remediation;
remediation of a specific site; and
• The typical allocation of costs among PRPs, unless the actual allocation has been determined.
Refer to Note 10 to the Consolidated Financial Statements for additional information on our environmental liabilities.
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Fair Value of Nonfinancial Assets and Liabilities
Significant estimates are made in determining the fair value of long-lived tangible and intangible assets (i.e., property
and equipment, intangible assets and goodwill) during the impairment evaluation process. In addition, the majority of
assets acquired and liabilities assumed in a business combination are required to be recognized at fair value under the
relevant accounting guidance.
Fair value is computed using several factors, including projected future operating results, economic projections,
anticipated future cash flows, comparable marketplace data and the cost of capital. There are inherent uncertainties related
to these factors and to our judgment in applying them in our analysis. However, we believe our methodology for estimating
the fair value of our reporting units is reasonable.
Property and Equipment, Including Landfills and Definite-Lived Intangible Assets — We monitor the carrying value
of our long-lived assets for potential impairment on an ongoing basis and test the recoverability of such assets generally
using significant unobservable (“Level 3”) inputs whenever events or changes in circumstances indicate that their carrying
amounts may not be recoverable. These events or changes in circumstances, including management decisions pertaining
to such assets, are referred to as impairment indicators. If an impairment indicator occurs, we perform a test of
recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows.
If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment
has occurred for the group of assets for which we can identify the projected cash flows. If the carrying values are in excess
of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset or asset
group to its carrying value and the difference is recorded in the period that the impairment indicator occurs. Fair value is
generally determined by considering (i) internally developed discounted projected cash flow analysis of the asset or asset
group; (ii) actual third-party valuations and/or (iii) information available regarding the current market for similar assets.
Estimating future cash flows requires significant judgment and projections may vary from the cash flows eventually
realized, which could impact our ability to accurately assess whether an asset has been impaired.
The assessment of impairment indicators and the recoverability of our capitalized costs associated with landfills and
related expansion projects require significant judgment due to the unique nature of the waste industry, the highly regulated
permitting process and the sensitive estimates involved. During the review of a landfill expansion application, a regulator
may initially deny the expansion application although the expansion permit is ultimately granted. In addition, management
may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace, or a landfill
may be required to cease accepting waste, prior to receipt of the expansion permit. However, such events occur in the
ordinary course of business in the waste industry and do not necessarily result in impairment of our landfill assets because,
after consideration of all facts, such events may not affect our belief that we will ultimately obtain the expansion permit.
As a result, our tests of recoverability, which generally make use of a probability-weighted cash flow estimation approach,
may indicate that no impairment loss should be recorded.
Indefinite-Lived Intangible Assets, Including Goodwill — At least annually using a measurement date of October 1,
and more frequently if warranted, we assess the indefinite-lived intangible assets including the goodwill of our reporting
units for impairment using Level 3 inputs.
We first perform a qualitative assessment to determine if it was more likely than not that the fair value of a reporting
unit is less than its carrying value. If the assessment indicates a possible impairment, we complete a quantitative review,
comparing the estimated fair value of a reporting unit to its carrying amount, including goodwill. An impairment charge
is recognized if the asset’s estimated fair value was less than its carrying amount. Fair value is typically estimated using
an income approach using Level 3 inputs. However, when appropriate, we may also use a market approach. The income
approach is based on the long-term projected future cash flows of the reporting units. We discount the estimated cash flows
to present value using a weighted average cost of capital that considers factors such as market assumptions, the timing of
the cash flows and the risks inherent in those cash flows. We believe that this approach is appropriate because it provides
a fair value estimate based upon the reporting units’ expected long-term performance considering the economic and market
conditions that generally affect our business. The market approach estimates fair value by measuring the aggregate market
value of publicly-traded companies with similar characteristics to our business as a multiple of their reported earnings. We
then apply that multiple to the reporting units’ earnings to estimate their fair values. We believe that this approach may
66
also be appropriate in certain circumstances because it provides a fair value estimate using valuation inputs from entities
with operations and economic characteristics comparable to our reporting units.
Acquisitions — In accordance with the purchase method of accounting, the purchase price paid for an acquisition is
allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the
excess of the purchase price over the net assets acquired recorded as goodwill. When we are in the process of valuing all
of the assets and liabilities acquired in an acquisition, there can be subsequent adjustments to our estimates of fair value
and resulting preliminary purchase price allocation. Generally, the valuation of our acquired asset and liabilities rely on
complex estimates and assumptions.
Acquisition-date fair value estimates are revised as necessary if, and when, additional information regarding these
contingencies becomes available to further define and quantify assets acquired and liabilities assumed. Subsequent to
finalization of purchase accounting, these revisions are accounted for as adjustments to income from operations. All
acquisition-related transaction costs are expensed as incurred. See Note 17 to the Consolidated Financial Statements for
additional information related to our acquisitions.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — (Gain) Loss
from Divestitures, Asset Impairments and Unusual Items, Net.
Inflation
Macroeconomic pressures, including inflation and rising interest rates, and market disruption resulting in labor, supply
chain and transportation constraints have impacted our results. Significant global supply chain disruption has reduced
availability of certain assets used in our business, and inflation has increased costs for the goods and services we purchase,
particularly for labor, repair and maintenance, and subcontractor costs. Supply chain constraints have caused delayed
delivery of fleet, steel containers and other purchases. Aspects of our business rely on third-party transportation providers,
and such services have become more limited and expensive. We continue to 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. Refer to Item 1A. Risk Factors for further discussion.
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
In the normal course of business, we are exposed to market risks, including changes in interest rates, certain
commodity prices and Canadian currency rates. From time to time, we use derivatives to manage some portion of these
risks. The Company had no derivatives outstanding as of December 31, 2023.
Interest Rate Exposure — Our exposure to market risk for changes in interest rates relates primarily to our financing
activities. As of December 31, 2023, we had $16.4 billion of long-term debt, excluding the impacts of accounting for debt
issuance costs, discounts and fair value adjustments attributable to terminated interest rate derivatives. We have
$2.5 billion of debt that is exposed to changes in market interest rates within the next 12 months comprised primarily of
(i) $860 million of short-term borrowings under our commercial paper program and (ii) $1.6 billion of tax-exempt bonds
with term interest rate periods that expire within the next 12 months. We currently estimate that a 100-basis point increase
in the interest rates of our outstanding variable-rate debt obligations would increase our 2024 interest expense by
$18 million.
Our remaining outstanding debt obligations have fixed interest rates through either the scheduled maturity of the debt
or, for certain of our fixed-rate tax-exempt bonds, through the end of a term interest rate period that exceeds 12 months.
The fair value of our fixed-rate debt obligations can increase or decrease significantly if market interest rates change.
We performed a sensitivity analysis to determine how market rate changes might affect the fair value of our market
risk-sensitive debt instruments. This analysis is inherently limited because it reflects a singular, hypothetical set of
assumptions. Actual market movements may vary significantly from our assumptions. An instantaneous, 100-basis point
increase in interest rates across all maturities attributable to these instruments would have decreased the fair value of our
debt by approximately $900 million as of December 31, 2023.
We are also exposed to interest rate market risk from our cash and cash equivalent balances, as well as assets held in
restricted trust fund accounts. These assets are generally invested in high-quality, liquid instruments including money
market funds that invest in U.S. government obligations with original maturities of three months or less. We believe that
our exposure to changes in fair value of these assets due to interest rate fluctuations is insignificant as the fair value
generally approximates our cost basis. We also invest a portion of our restricted trust fund account balances in
available-for-sale securities, including U.S. Treasury securities, U.S. agency securities, municipal securities,
mortgage- and asset-backed securities, which generally mature over the next ten years, as well as equity securities.
Commodity Price Exposure — In the normal course of our business, we are subject to operating agreements that
expose us to market risks arising from changes in the prices for commodities such as diesel fuel, electricity (and related
renewable energy credits) and recycled materials, including old corrugated cardboard and plastics. We work to manage
these risks through operational strategies that focus on capturing our costs in the prices we charge our customers for the
services provided. Accordingly, as the market prices for these commodities increase or decrease, our revenues, operating
costs and margins may also increase or decrease. Recycling revenues attributable to yield decreased $308 million and
increased $19 million in 2023 and 2022, respectively, as compared with the prior year periods. With the significant decline
in commodity prices that started in the second half of 2022 from their all-time highs and has continued into 2023, we are
currently experiencing margin pressures from our commodity-driven businesses. Average market prices for single-stream
recycled commodities were down 40% and 10% in 2023 and 2022, respectively, as compared to the prior year periods.
Variability in commodity prices can also impact the margins of our business as certain components of our revenue are
structured as a pass through of costs, including recycling brokerage and fuel surcharges.
We have invested, and continue to invest, in facilities to capture methane produced from the Company’s landfills and
convert it into renewable natural gas (“RNG”) and electricity. RNG produced from our landfills, as well as dairy biogas,
constitute a significant source of fuel allocated to our natural gas collection vehicles. The Company’s investment in
renewable energy production is guided partly by the EPA’s implementation of the Renewable Fuel Standard (“RFS”)
program, which promotes the production and use of renewable transportation fuels. Many of our facilities are
EPA-registered producers of transportation fuel making compressed and RNG from landfill biogas, which qualifies as a
cellulosic biofuel under the RFS program. Oil refiners and importers are required through the RFS program to blend
specified volumes of various categories of renewable transportation fuels with gasoline or buy credits, referred to as
renewable identification numbers (“RINs”), from renewable fuel producers.
68
RIN prices generally respond to regulations enacted by the EPA, as well as fluctuations in supply and demand. The
value of the RINs associated with RNG is set through a market established by the RFS program. Prior to 2022, the EPA
had promulgated rules on an annual basis establishing refiners’ obligations to purchase RNG and other cellulosic biofuels
under the RFS program, which introduced uncertainty and volatility into the renewable fuels and RINs market. However,
in 2023, the EPA issued a highly anticipated rule establishing biofuel blending volumes under the RFS program for
compliance years 2023 through 2025. The rule reflected the outsized role of biogas under the program, delivered on many
reforms that benefit the solid waste sector, and recognized the continued growth of the market for RNG in vehicle
applications. However, we cannot be certain that these changes, or the outcome of litigation challenging various aspects
of the rule, will ultimately reduce volatility in the RINs market or that future rulemakings will be similarly favorable to
our business. We continue to advocate for the current federal administration to implement policies that could reduce the
potential for volatility in the RINs market and ensure long-term stability for renewable transportation fuels, as changes in
the RFS market or the structure of the RFS program can and has impacted the financial performance of the facilities
constructed to capture and treat the gas. Such changes could impact or alter our projected future investments, and such
investments may not yield the results anticipated. Revenue in our WM Renewable Energy segment declined $73 million
and increased $48 million in 2023 and 2022, respectively, as compared to the prior year periods, primarily driven by the
fluctuations in energy and RIN market prices.
The Company’s sustainability growth strategy also is informed by the increased adoption of state and Canadian clean
fuel standard programs, utility policies, and voluntary market demand for RNG in transportation and industrial
applications. Clean fuel standard programs, originally developed in California and subsequently adopted in Oregon and
Washington, establish annual carbon intensity benchmarks for transportation fuels that decrease over time. These programs
operate similar to the RFS program in that certain regulated parties purchase credits from fuel producers, including RNG
producers, to meet their carbon intensity obligations. Like RINs, clean fuel standard program credit values can fluctuate
with policy and market dynamics. As such, we are advocating for existing programs to adopt measures to promote stability
in credit pricing and for other states to adopt similar programs that incentivize the growth in RNG. We also are working
closely with stakeholders to encourage the voluntary market for RNG demand, including utility RNG procurement
programs, and sustainability protocols, as companies and other customers increasingly look to reduce their greenhouse gas
emissions profiles.
Currency Rate Exposure — Our operations are primarily in the U.S. but we also have significant operations in Canada.
Additionally, we have certain support functions in India. Where significant, we have quantified and described the impact
of foreign currency translation on components of income, including operating revenue and operating expenses. However,
the impact of foreign currency has not materially affected our results of operations.
69
Item 8. Financial Statements and Supplementary Data.
INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm (PCAOB ID 42) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of December 31, 2023 and 2022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021 . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021 . . .
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021 . . . . . . . . . . . . . .
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023, 2022 and 2021 . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Waste Management, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Waste Management, Inc.’s internal control over financial reporting as of December 31, 2023, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Waste Management, Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on
the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the 2023 consolidated financial statements of the Company, and our report dated February 13, 2024
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Houston, Texas
February 13, 2024
/s/ ERNST & YOUNG LLP
71
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Waste Management, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Waste Management, Inc. (the Company) as of
December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, cash flows, and
changes in equity for each of the three years in the period ended December 31, 2023, and the related notes (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 13, 2024 expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
72
Description of
Matter
the
How We Addressed
the Matter
in Our
Audit
Landfill Depletion
At December 31, 2023, the Company’s landfill assets, net of accumulated depletion,
totaled $7.8 billion and the associated depletion expense for 2023 was $745 million. As
discussed in Note 2 of the financial statements, the Company updates the estimates used
to calculate individual landfill depletion rates at least annually, or more often if significant
facts change. Landfill depletion rates are used in the computation of landfill depletion
expense.
Auditing landfill depletion rates and related depletion expense is complex due to the highly
judgmental nature of assumptions used in estimating the rates. Significant assumptions
used in the calculation of the rates include: estimated future development costs associated
with the construction and retirement of the landfill, estimated remaining permitted and
expansion airspace, and airspace utilization factors.
We obtained an understanding, evaluated the design, and tested the operating effectiveness
of the Company’s controls over determining landfill depletion rates and calculating
depletion expense. Our audit procedures included, among others, testing controls over: the
Company’s process for evaluating and updating the significant assumptions used in the
development of the landfill depletion rates, management’s review of those significant
assumptions, and the mathematical accuracy of the calculation and recording of depletion
expense.
To test the landfill asset depletion rates, our audit procedures included, among others,
assessing methodologies used by the Company and testing the significant assumptions
discussed above, inclusive of the underlying data used by the Company in its development
of these assumptions. We compared the significant assumptions used by management to
historical trends and, when available, to comparable size landfills accepting a similar type
of waste. Regarding expansion airspace, we evaluated the Company’s criteria for inclusion
in remaining airspace. In addition, we considered the professional qualifications and
the
objectivity of management’s
assumptions. We involved EY engineering specialists to assist with the evaluation of the
Company’s landfill future development cost and airspace assumptions. We also tested the
completeness and accuracy of the historical data utilized in the development of the landfill
depletion rates.
internal engineers responsible for developing
73
Landfill – Final Capping, Closure and Post-Closure Costs
Description of
Matter
the
At December 31, 2023, the carrying value of the Company’s landfill asset retirement
obligations related to final capping, closure and post-closure costs totaled $2.9 billion. As
discussed in Note 2 of the financial statements, the Company updates the estimates used
to measure the asset retirement obligations annually, or more often if significant facts
change.
Auditing the landfill asset retirement obligation is complex due to the highly judgmental
nature of the assumptions used in the measurement process. Significant assumptions
include: estimated future costs associated with the capping, closure and post closure
activities at each specific landfill, airspace consumed to date in relation to total estimated
permitted and expansion airspace and the projected remaining landfill life.
How We Addressed
the Matter
in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness
of the Company’s controls over the calculation of landfill asset retirement obligations. Our
audit procedures included, among others, testing the Company’s controls over the landfill
asset retirement obligation estimation process and management’s review of the significant
assumptions used in the estimation of the liability, including the amount and timing of
retirement costs.
To test the landfill asset retirement obligation valuation, we performed audit procedures
that included, among others, assessing methodologies used by the Company, testing the
completeness of activities included in the estimate (e.g., gas monitoring and extraction),
and testing the significant assumptions discussed above, inclusive of the underlying data
used by the Company in its development of these assumptions. We compared the
significant assumptions used by management to historical trends and, when available, to
comparable size landfills accepting the same type of waste. In addition, we considered the
professional qualifications and objectivity of management’s internal engineers responsible
for developing the assumptions. We involved EY engineering specialists to assist us with
these procedures. Specifically, we utilized the EY engineering specialists to evaluate the
reasons for significant changes in assumptions from the historical trend, and to determine
whether the change from the historical trend was appropriate and identified timely. We
also tested the completeness and accuracy of the historical data utilized in preparing the
estimate.
We have served as the Company’s auditor since 2002.
Houston, Texas
February 13, 2024
/s/ ERNST & YOUNG LLP
74
WASTE MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Share and Par Value Amounts)
December 31,
2023
2022
Current assets:
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts receivable, net of allowance for doubtful accounts of $30 and $26, respectively . .
Other receivables, net of allowance for doubtful accounts of $4 and $7, respectively . . . . . .
Parts and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
458
2,633
237
173
303
3,804
$
351
2,461
291
164
284
3,551
Property and equipment, net of accumulated depreciation and depletion of $22,826 and
$21,627, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,968
9,254
759
422
606
1,010
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,823
15,719
9,323
827
348
578
1,021
$ 31,367
Current liabilities:
LIABILITIES AND EQUITY
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill and environmental remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,709
1,605
578
334
4,226
15,895
1,826
2,888
1,092
25,927
$
1,766
1,625
589
414
4,394
14,570
1,733
2,700
1,106
24,503
Commitments and contingencies (Note 10)
Equity:
Waste Management, Inc. stockholders’ equity:
Common stock, $0.01 par value; 1,500,000,000 shares authorized; 630,282,461 shares
issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
5,351
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,334
(37)
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock at cost, 228,827,218 and 222,396,166 shares, respectively . . . . . . . . . . . . . . .
(12,751)
Total Waste Management, Inc. stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,903
(7)
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,896
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,823
6
5,314
13,167
(69)
(11,569)
6,849
15
6,864
$ 31,367
See Notes to Consolidated Financial Statements.
75
WASTE MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except per Share Amounts)
Year Ended December 31,
2022
19,698 $
2023
20,426 $
2021
17,931
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. . . . . .
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense):
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in net losses of unconsolidated entities. . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests. . . . . . . . . . . . .
Net income attributable to Waste Management, Inc. . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
12,606
1,926
2,071
5
243
16,851
3,575
12,294
1,938
2,038
1
62
16,333
3,365
(500)
—
(60)
6
(554)
3,021
745
2,276
(28)
2,304 $
5.69 $
5.66 $
(378)
—
(67)
(2)
(447)
2,918
678
2,240
2
2,238 $
5.42 $
5.39 $
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Millions)
Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss), net of tax:
$
Derivative instruments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available-for-sale securities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Post-retirement benefit obligations, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss), net of tax. . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Comprehensive income (loss) attributable to noncontrolling interests. .
Comprehensive income attributable to Waste Management, Inc. . . . . . . . . . . . .
$
Year Ended December 31,
2022
2,240
2023
2,276 $
$
14
(11)
26
3
32
2,308
(28)
2,336 $
3
(24)
(65)
—
(86)
2,154
2
2,152
$
See Notes to Consolidated Financial Statements.
76
11,111
1,864
1,999
8
(16)
14,966
2,965
(365)
(220)
(36)
5
(616)
2,349
532
1,817
1
1,816
4.32
4.29
2021
1,817
9
(6)
(28)
3
(22)
1,795
1
1,794
WASTE MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
Year Ended December 31,
2022
2023
2021
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest accretion on landfill and environmental remediation liabilities. . . . . . . . . . . . . . . .
Provision for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net gain on disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss from divestitures, asset impairments (other than goodwill) and other, net. . . . .
Equity in net losses of unconsolidated entities, net of dividends . . . . . . . . . . . . . . . . . . . . .
Loss on early extinguishment of debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenues and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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:
$
2,276 $
2,240
$
1,817
2,071
83
130
56
93
(42)
168
75
60
—
(161)
(2)
61
90
(239)
4,719
2,038
49
112
50
84
(21)
—
62
67
—
(329)
(35)
42
393
(216)
4,536
(170)
(2,895)
78
(104)
(3,091)
(377)
(2,587)
27
(126)
(3,063)
1,999
(77)
111
37
108
(25)
—
(16)
38
220
28
(39)
34
206
(103)
4,338
(75)
(1,904)
96
(11)
(1,894)
New borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,306
8,688
7,948
Debt repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premiums and other paid on early extinguishment of debt. . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock repurchase program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercise of common stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax payments associated with equity-based compensation transactions . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (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 . . . . . . . . . . .
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents at end
of period:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash and cash equivalents included in other current assets . . . . . . . . . . . . . . . . . . . .
Restricted cash and cash equivalents included in restricted funds . . . . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash and cash equivalents at end of period . . . . . . . . . . .
(20,394)
—
(1,302)
(1,136)
44
(31)
(11)
(1,524)
(7,328)
—
(1,500)
(1,077)
44
(39)
(4)
(1,216)
3
107
445
552 $
(6)
251
194
445
458 $
10
84
552 $
351
25
69
445
$
$
$
(8,404)
(211)
(1,350)
(970)
66
(28)
49
(2,900)
2
(454)
648
194
118
7
69
194
$
$
$
See Notes to Consolidated Financial Statements.
77
WASTE MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Millions, Except Shares in Thousands)
Waste Management, Inc. Stockholders’ Equity
Total
Shares
Accumulated
Other
Retained Comprehensive
Earnings (Loss) Income Shares
Treasury Stock
Amounts
Noncontrolling
Interests
Balance, December 31, 2020 . . . . . . . . $ 7,454
Consolidated net income . . . . . . . . . . .
1,817
Other comprehensive income (loss),
net of tax . . . . . . . . . . . . . . . . . . . . .
(22)
Cash dividends declared of $2.30
per common share . . . . . . . . . . . . . .
(970)
Equity-based compensation
transactions, net . . . . . . . . . . . . . . . .
198
Common stock repurchase program . . . (1,350)
Other, net . . . . . . . . . . . . . . . . . . . . . .
(1)
Balance, December 31, 2021 . . . . . . . . $ 7,126
2,240
Consolidated net income . . . . . . . . . . .
Other comprehensive income (loss),
net of tax . . . . . . . . . . . . . . . . . . . . .
(86)
Cash dividends declared of $2.60
per common share . . . . . . . . . . . . . . (1,077)
Equity-based compensation
transactions, net . . . . . . . . . . . . . . . .
150
Common stock repurchase program . . . (1,500)
Acquisitions and other, net . . . . . . . . .
11
Balance, December 31, 2022 . . . . . . . . $ 6,864
2,276
Consolidated net income . . . . . . . . . . .
Other comprehensive income (loss),
net of tax . . . . . . . . . . . . . . . . . . . . .
32
Cash dividends declared of $2.80
per common share . . . . . . . . . . . . . . (1,136)
Equity-based compensation
transactions, net . . . . . . . . . . . . . . . .
169
Common stock repurchase program . . . (1,315)
Other, net . . . . . . . . . . . . . . . . . . . . . .
6
Balance, December 31, 2023 . . . . . . . . $ 6,896
Common Stock
Additional
Paid-In
Amounts Capital
6 $
630,282 $
5,129 $ 11,159 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
110
(70)
—
1,816
—
(970)
(1)
—
—
630,282 $
6 $
5,169 $ 12,004 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,238
—
— (1,077)
75
70
—
2
—
—
630,282 $
6 $
5,314 $ 13,167 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,304
—
— (1,136)
97
(60)
—
(1)
—
—
630,282 $
6 $
5,351 $ 14,334 $
39
—
(22)
—
(207,481) $ (8,881) $
—
—
—
—
—
—
(214,159) $ (10,072) $
—
2,049
— (8,731)
—
4
17
—
—
(86)
—
—
—
—
1,555
— (9,796)
—
4
(69)
—
—
32
—
—
—
1,406
—
— (7,840)
—
3
(37)
89
(1,280)
—
—
—
—
73
(1,570)
—
—
—
—
73
(1,255)
—
(222,396) $ (11,569) $
(228,827) $ (12,751) $
2
1
—
—
—
—
(1)
2
2
—
—
—
—
11
15
(28)
—
—
—
—
6
(7)
See Notes to Consolidated Financial Statements.
78
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2023, 2022 and 2021
1. Basis of Presentation
The financial statements presented in this report represent the consolidation of Waste Management, Inc., a Delaware
corporation; its wholly-owned and majority-owned subsidiaries; and certain variable interest entities for which Waste
Management, Inc. or its subsidiaries are the primary beneficiaries as described in Note 18. Waste Management, Inc. is a
holding company and all operations are conducted by its subsidiaries. When the terms “the Company,” “we,” “us” or “our”
are used in this document, those terms refer to Waste Management, Inc., together with its consolidated subsidiaries and
consolidated variable interest entities. When we use the term “WMI,” we are referring only to Waste Management, Inc.,
the parent holding company.
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. 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”) business, 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, which is a significant source of fuel that we allocate to our natural gas fleet.
To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid
waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our
Recycling Processing and Sales and WM Renewable Energy businesses, beginning in the fourth quarter of 2023, our senior
management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal and resource
recovery services businesses independently; (ii) combine the results of all recycling facilities from our East and West Tier
segments with our recycling brokerage and sales activities to form a newly created Recycling Processing and Sales
reportable segment and (iii) include our WM Renewable Energy business as a reportable segment. Accordingly, our senior
management now evaluates, oversees and manages the financial performance of our business through four 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 and (iv) WM Renewable Energy. Our East and West Tier, along with
certain ancillary services 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 four
reportable segments, which are presented as Corporate and Other. Refer to Note 19 for further discussion.
Reclassifications
When necessary, reclassifications have been made to our prior period financial information to conform to the
current year presentation and are not material to our consolidated financial statements.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying Consolidated Financial Statements include the accounts of WMI, its wholly-owned and
majority-owned subsidiaries and certain variable interest entities for which we have determined that we are the primary
beneficiary. All material intercompany balances and transactions have been eliminated. Investments in unconsolidated
entities are accounted for under the appropriate method of accounting.
79
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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. Each of these items is discussed in additional detail below. Actual results could differ
materially from the estimates and assumptions that we use in the preparation of our financial statements.
Cash and Cash Equivalents
Cash in excess of current operating requirements is invested in short-term interest-bearing instruments with maturities
of three months or less at the date of purchase and is stated at cost, which approximates market value.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash
equivalents, investments held within restricted funds, and accounts receivable. We make efforts to control our exposure to
credit risk associated with these instruments by (i) placing our assets and other financial interests with a diverse group of
credit-worthy financial institutions; (ii) holding high-quality financial instruments while limiting investments in any one
instrument and (iii) maintaining strict policies over credit extension that include credit evaluations, credit limits and
monitoring procedures, although generally we do not have collateral requirements for credit extensions. We also control
our exposure associated with trade receivables by discontinuing service, to the extent allowable, to non-paying customers.
However, our overall credit risk associated with trade receivables is limited due to the large number and diversity of
customers we serve. As of December 31, 2023 and 2022, no single customer represented greater than 5% of total accounts
receivable.
Accounts and Other Receivables
Our receivables, which are recorded when billed, when services are performed or when cash is advanced, are claims
against third parties that will generally be settled in cash. The carrying value of our receivables, net of the allowance for
doubtful accounts, represents the estimated net realizable value. We estimate our allowance for doubtful accounts based
on historical collection trends; type of customer, such as municipal or commercial; the age of outstanding receivables and
existing as well as expected economic conditions. If events or changes in circumstances indicate that specific receivable
balances may be impaired, further consideration is given to the collectability of those balances and the allowance is
adjusted accordingly. Past-due receivable balances are written off when our internal collection efforts have been
unsuccessful. Also, we recognize interest income on long-term interest-bearing notes receivable as the interest accrues
under the terms of the notes. We no longer accrue interest once the notes are deemed uncollectible.
80
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table reflects the activity in our allowance for doubtful accounts of trade receivables for the year ended
December 31 (in millions):
Balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions charged to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts written-off, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, divestitures and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023
2022
26
53
(58)
9
30
$
$
25
55
(49)
(5)
26
To determine the allowance for doubtful accounts for trade receivables, we rely upon, among other factors, historical
loss trends, the age of outstanding receivables, and existing as well as expected economic conditions. We determined that
all of our trade receivables share similar risk characteristics. We monitor our credit exposure on an ongoing basis and
assess whether assets in the pool continue to display similar risk characteristics. Based on aging analysis as of both
December 31, 2023 and 2022, approximately 90% of our trade receivables were outstanding less than 60 days.
To determine the allowance for doubtful accounts for other receivables, as well as loans and other instruments, we
rely primarily on credit ratings and associated default rates based on the maturity of the instrument. Other receivables, as
of December 31, 2023 and 2022, include receivables related to income tax payments in excess of our current income tax
obligations of $120 million and $150 million, respectively. Other receivables as of December 31, 2023 and 2022 also
include a receivable of $26 million and $19 million, respectively, related to alternative fuel tax credits. Based on an aging
analysis as of December 31, 2023 and 2022, approximately 50% and 55%, respectively, of our other receivables were due
within 12 months or less.
Parts and Supplies
Parts and supplies consist primarily of spare parts, fuel, tires, lubricants and processed recycling materials. Our parts
and supplies are stated at the lower of cost (using the average cost method) or market.
Landfill Accounting
Cost Basis of Landfill Assets — We capitalize various costs that we incur to make a landfill ready to accept waste.
These costs generally include expenditures for land (including the landfill footprint and required landfill buffer property);
permitting; excavation; liner material and installation; landfill leachate collection systems; landfill gas collection systems;
environmental monitoring equipment for groundwater and landfill gas; and directly related engineering, capitalized
interest, on-site road construction and other capital infrastructure costs. The cost basis of our landfill assets also includes
asset retirement costs, which represent estimates of future costs associated with landfill final capping, closure and
post-closure activities. These costs are discussed below.
Final Capping, Closure and Post-Closure Costs — Following is a description of our asset retirement activities and
our related accounting:
• Final Capping — Generally involves the installation of flexible membrane liners and geosynthetic clay liners,
drainage and compacted soil layers and topsoil over areas of a landfill where total airspace has been consumed.
Final capping asset retirement obligations are recorded on a units-of-consumption basis as airspace is consumed
related to the specific final capping event with a corresponding increase in the landfill asset. Each final capping
event is accounted for as a discrete obligation and recorded as an asset and a liability based on estimates of the
discounted cash flows associated with each final capping event.
• Closure — Includes the construction of the final portion of methane gas collection systems (when required),
demobilization and routine maintenance costs. These are costs incurred after the site ceases to accept waste, but
81
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
before the landfill is certified as closed by the applicable state regulatory agency. These costs are recorded as an
asset retirement obligation as airspace is consumed over the life of the landfill with a corresponding increase in
the landfill asset. Closure obligations are recorded over the life of the landfill based on estimates of the discounted
cash flows associated with performing closure activities.
• Post-Closure — Involves the maintenance and monitoring of a landfill site that has been certified closed by the
applicable regulatory agency. Generally, we are required to maintain and monitor landfill sites for a 30-year
period. These maintenance and monitoring costs are recorded as an asset retirement obligation as airspace is
consumed over the life of the landfill with a corresponding increase in the landfill asset. Post-closure obligations
are recorded over the life of the landfill based on estimates of the discounted cash flows associated with
performing post-closure activities.
We develop our estimates of these obligations using input from our operations personnel, engineers and accountants.
Our estimates are based on our interpretation of current requirements and proposed regulatory changes and are intended
to approximate fair value. Absent quoted market prices, the estimate of fair value is based on the best available information,
including the results of present value techniques. In many cases, we contract with third parties to fulfill our obligations for
final capping, closure and post-closure. We use historical experience, professional engineering judgment and quoted or
actual prices paid for similar work to determine the fair value of these obligations. We are required to recognize these
obligations at market prices whether we plan to contract with third parties or perform the work ourselves. In those instances
where we perform the work with internal resources, the incremental profit margin realized is recognized as a component
of operating income when the work is completed.
Once we have determined final capping, closure and post-closure costs, we inflate those costs to the expected time of
payment and discount those expected future costs back to present value. As of December 31, 2023, 2022 and 2021, we
inflated these costs in current dollars to the expected time of payment using an inflation rate of 2.50%, 2.50% and 2.25%,
respectively. We discounted these costs to present value using the credit-adjusted, risk-free rate effective at the time an
obligation is incurred, consistent with the expected cash flow approach. Any changes in expectations that result in an
upward revision to the estimated cash flows are treated as a new liability and discounted at the current rate while downward
revisions are discounted at the historical weighted average rate of the recorded obligation. As a result, the credit-adjusted,
risk-free discount rate used to calculate the present value of an obligation is specific to each individual asset retirement
obligation. The weighted average rate applicable to our long-term asset retirement obligations as of December 31, 2023
was approximately 4.8%.
We record the estimated fair value of final capping, closure and post-closure liabilities for our landfills based on the
airspace consumed through the current period. The fair value of final capping obligations is developed based on our
estimates of the airspace consumed to date for each final capping event and the expected timing of each final capping
event. The fair value of closure and post-closure obligations is developed based on our estimates of the airspace consumed
to date for the entire landfill and the expected timing of each closure and post-closure activity. Because these obligations
are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final
capping, closure and post-closure activities could result in a material change in these liabilities, related assets and results
of operations. We assess the appropriateness of the estimates used to develop our recorded balances annually, or more
often if significant facts change.
Sustained changes in inflation rates or the estimated costs, timing or extent of future final capping, closure and
post-closure activities typically result in both (i) a current adjustment to the recorded liability and landfill asset and (ii) a
change in liability and asset amounts to be recorded prospectively over either the remaining permitted and expansion
airspace (as defined below) of the related discrete final capping event or the remaining permitted and expansion airspace
of the landfill, as appropriate. Any changes related to the capitalized and future cost of the landfill assets are then
recognized in accordance with our landfill depletion policy, which would generally result in depletion expense being
recognized prospectively over the remaining permitted and expansion airspace of the final capping event or the remaining
permitted and expansion airspace of the landfill, as appropriate. Changes in such estimates associated with a fully
82
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
consumed landfill result in an adjustment to the recorded liability and landfill assets with an immediate corresponding
adjustment to landfill airspace depletion expense.
Interest accretion on final capping, closure and post-closure liabilities is recorded using the effective interest method
and is recorded as landfill operating costs, which is included in operating expenses within our Consolidated Statements of
Operations.
Depletion of Landfill Assets — The depletable basis of a landfill includes (i) amounts previously expended and
capitalized; (ii) capitalized landfill final capping, closure and post-closure costs; (iii) projections of future purchase and
development costs required to develop the landfill site to its remaining permitted and expansion airspace (as defined below)
and (iv) projected asset retirement costs related to landfill final capping, closure and post-closure activities.
Depletion is recorded on a units-of-consumption basis, applying expense as a rate per ton. The rate per ton is calculated
by dividing each component of the depletable basis of a landfill by the number of tons needed to fill the corresponding
asset’s airspace. For landfills that we do not own, but operate through lease or other contractual agreements, the rate per
ton is calculated based on expected airspace to be utilized over the lesser of the contractual term of the underlying
agreement or the life of the landfill.
We apply the following guidelines in determining a landfill’s remaining permitted and expansion airspace:
• Remaining Permitted Airspace — Our engineers, in consultation with third-party engineering consultants and
surveyors, are responsible for determining remaining permitted airspace at our landfills. The remaining permitted
airspace is determined by an annual survey, which is used to compare the existing landfill topography to the
expected final landfill topography.
• Expansion Airspace — We also include currently unpermitted expansion airspace in our estimate of remaining
permitted and expansion airspace in certain circumstances. First, for unpermitted airspace to be initially included
in our estimate of remaining permitted and expansion airspace, we must believe that obtaining the expansion
permit is likely. Second, we must generally expect the initial expansion permit application to be submitted within
one year and the final expansion permit to be received within five years, in addition to meeting the following
criteria:
• Personnel are actively working on the expansion of an existing landfill, including efforts to obtain land use
and local, state or provincial approvals;
• We have a legal right to use or obtain land to be included in the expansion plan;
• There are no significant known technical, legal, community, business, or political restrictions or similar
issues that could negatively affect the success of such expansion; and
• Financial analysis has been completed based on conceptual design, and the results demonstrate that the
expansion meets Company criteria for investment.
These criteria are evaluated by our field-based engineers, accountants, managers and others to identify potential
obstacles to obtaining the permits. Once the unpermitted airspace is included, our policy provides that airspace may
continue to be included in remaining permitted and expansion airspace even if certain of these criteria are no longer met
as long as we continue to believe we will ultimately obtain the permit, based on the facts and circumstances of a specific
landfill. In these circumstances, continued inclusion must be approved through a landfill-specific review process that
includes approval by our Chief Financial Officer on a quarterly basis. Of the 16 landfill sites with expansions included as
of December 31, 2023, two landfills required the Chief Financial Officer to approve the inclusion of the unpermitted
airspace because the permit application process did not meet the one- or five-year requirements.
83
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
When we include the expansion airspace in our calculations of remaining permitted and expansion airspace, we also
include the projected costs for development, as well as the projected asset retirement costs related to final capping, closure
and post-closure of the expansion in the depletable basis of the landfill.
Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization factor
(“AUF”) is established to calculate the remaining permitted and expansion capacity in tons. The AUF is established using
the measured density obtained from previous annual surveys and is then adjusted to account for future settlement. The
amount of settlement that is forecasted will consider several site-specific factors including current and projected mix of
waste type, initial and projected waste density, estimated number of years of life remaining, depth of underlying waste,
anticipated access to moisture through precipitation or recirculation of landfill leachate and operating practices. In addition,
the initial selection of the AUF is subject to a subsequent multi-level review by our engineering group and the AUF used
is reviewed on a periodic basis and revised as necessary. Our historical experience generally indicates that the impact of
settlement at a landfill is greater later in the life of the landfill when the waste placed at the landfill approaches its highest
point under the permit requirements.
After determining the costs and remaining permitted and expansion capacity at each of our landfills, we determine the
per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the costs by the
corresponding number of tons. We calculate per ton depletion rates for each landfill for assets associated with each final
capping event, for assets related to closure and post-closure activities and for all other costs capitalized or to be capitalized
in the future. These rates per ton are updated annually, or more often, as significant facts change.
It is possible that actual results, including the amount of costs incurred, the timing of final capping, closure and
post-closure activities, our airspace utilization or the success of our expansion efforts could ultimately turn out to be
significantly different from our estimates and assumptions. To the extent that such estimates, or related assumptions, prove
to be significantly different than actual results, lower earnings may be experienced due to higher depletion rates or higher
expenses; or higher earnings may result if the opposite occurs. Most significantly, if it is determined that expansion
capacity should no longer be considered in calculating the recoverability of a landfill asset, we may be required to recognize
an asset impairment or incur significantly higher depletion expense. If at any time management makes the decision to
abandon the expansion effort, the capitalized costs related to the expansion effort are expensed immediately.
Environmental Remediation Liabilities
A significant portion of our operating costs and capital expenditures could be characterized as costs of environmental
protection. The nature of our operations, particularly with respect to the construction, operation and maintenance of our
landfills, subjects us to an array of laws and regulations relating to the protection of the environment. Under current laws
and regulations, we may have liabilities for environmental damage caused by our operations, or for damage caused by
conditions that existed before we acquired a site. In addition to remediation activity required by state or local authorities,
such liabilities include potentially responsible party (“PRP”) investigations. The costs associated with these liabilities can
include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly associated
with site investigation and clean up.
Where it is probable that a liability has been incurred, we estimate costs required to remediate sites based on
site-specific facts and circumstances. We routinely review and evaluate sites that require remediation and determine our
estimated cost for the likely remedy based on a number of estimates and assumptions. Next, we review the same type of
information with respect to other named and unnamed PRPs. Estimates of the costs for the likely remedy are then either
developed using our internal resources or by third-party environmental engineers or other service providers. Internally
developed estimates are based on:
• Management’s judgment and experience in remediating our own and unrelated parties’ sites;
•
Information available from regulatory agencies as to costs of remediation;
84
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
• The number, financial resources and relative degree of responsibility of other PRPs who may be liable for
remediation of a specific site; and
• The typical allocation of costs among PRPs, unless the actual allocation has been determined.
Estimating our degree of responsibility for remediation is inherently difficult. We recognize and accrue for an
estimated remediation liability when we determine that such liability is both probable and reasonably estimable.
Determining the method and ultimate cost of remediation requires that a number of assumptions be made. There can
sometimes be a range of reasonable estimates of the costs associated with the likely site remediation alternatives identified
in the environmental impact investigation. In these cases, we use the amount within the range that is our best estimate. If
no amount within a range appears to be a better estimate than any other, we use the amount that is the low end of such
range. If we used the high ends of such ranges (where estimable), our aggregate potential liability would be approximately
$85 million higher than the $209 million recorded in the Consolidated Balance Sheet as of December 31, 2023. Our
ultimate responsibility may differ materially from current estimates. It is possible that technological, regulatory or
enforcement developments, the results of environmental studies, the inability to identify other PRPs, the inability of other
PRPs to contribute to the settlements of such liabilities, or other factors could require us to record additional liabilities.
Our ongoing review of our remediation liabilities, in light of relevant internal and external facts and circumstances, could
result in revisions to our accruals that could cause upward or downward adjustments to our balance sheet and income from
operations. These adjustments could be material in any given period.
Where we believe that both the amount of a particular environmental remediation liability and the timing of the
payments are fixed or reliably determinable, we inflate the cost in current dollars until the expected time of payment and
discount the cost to present value using a risk-free discount rate, which is based on the rate for U.S. Treasury bonds with
a term approximating the weighted average period until settlement of the underlying obligation.
Property and Equipment (exclusive of landfills, discussed above)
We record property and equipment at cost. Expenditures for major additions and improvements are capitalized and
maintenance activities are expensed as incurred. We depreciate property and equipment over the estimated useful life of
the asset using the straight-line method. We generally assume no salvage value for our depreciable property and equipment.
When property and equipment are retired, sold or otherwise disposed of, the cost and accumulated depreciation are
removed from our accounts and any resulting gain or loss is included in results of operations as an offset or increase to
operating expense for the period.
The estimated useful lives for significant property and equipment categories are as follows (in years):
Vehicles — excluding rail haul cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles — rail haul cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Useful Lives
3 to 10
10 to 30
3 to 30
5 to 40
3 to 10
(a) Includes recycling and renewable natural gas (“RNG”) facilities as well as containers.
Leases
We lease property and equipment in the ordinary course of our business. Our operating lease activities primarily
consist of leases for real estate, landfills and operating equipment. Our financing lease activities primarily consist of leases
for operating equipment, railcars and landfill assets. Our leases have varying terms. Some may include renewal or purchase
85
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
options, escalation clauses, restrictions, penalties or other obligations that we consider in determining minimum lease
payments. The leases are classified as either operating leases or financing leases, as appropriate.
Operating Leases (excluding landfill leases discussed below) — The majority of our leases are operating leases. This
classification generally can be attributed to either (i) relatively low fixed minimum lease payments as a result of real
property lease obligations that vary based on the volume of waste we receive or process or (ii) minimum lease terms that
are much shorter than the assets’ economic useful lives. Management expects that in the normal course of business our
operating leases will be renewed, replaced by other leases or replaced with fixed asset expenditures.
Financing Leases (excluding landfill leases discussed below) — Assets under financing leases are capitalized using
interest rates determined at the commencement of each lease and are depreciated over either the useful life of the asset or
the lease term, as appropriate, on a straight-line basis. The present value of the related lease payments is recorded as a debt
obligation.
Landfill Leases — From an operating perspective, landfills that we lease are similar to landfills we own because
generally we will operate the landfill for the life of the operating permit. The most significant portion of our rental
obligations for landfill leases is contingent upon operating factors such as disposal volume and often there are no
contractual minimum rental obligations. Contingent rental obligations are expensed as incurred. For landfill financing
leases that provide for minimum contractual rental obligations, we record the present value of the minimum obligation as
part of the landfill asset, which is depleted on a units-of-consumption basis over the shorter of the lease term or the life of
the landfill.
For operating and financing leases, including landfill leases, our rent expense for each of the last three years and future
minimum lease payments are disclosed in Note 7.
Acquisitions
We generally recognize assets acquired and liabilities assumed in business combinations, including contingent assets
and liabilities, based on fair value estimates as of the date of acquisition.
Contingent Consideration — In certain acquisitions, we agree to pay additional amounts to sellers contingent upon
achievement by the acquired businesses of certain negotiated goals, such as targeted revenue levels, targeted disposal
volumes or the issuance of permits for expanded landfill airspace. We have recognized liabilities for these contingent
obligations based on their estimated fair value as of the date of acquisition with any differences between the
acquisition-date fair value, subsequent remeasurements and the ultimate settlement of the obligations being recognized as
an adjustment to income from operations. Refer to Note 11 for adjustments recognized during the reported periods.
Acquired Assets and Assumed Liabilities — Assets and liabilities arising from contingencies such as pre-acquisition
environmental matters and litigation are recognized at their acquisition-date fair value when their respective fair values
can be determined. If the fair values of such contingencies cannot be readily determined, they are recognized as of the
acquisition date if the contingencies are probable and an amount can be reasonably estimated.
Acquisition-date fair value estimates are revised as necessary if, and when, additional information regarding these
contingencies becomes available to further define and quantify assets acquired and liabilities assumed. Subsequent to
finalization of purchase accounting, these revisions are accounted for as adjustments to income from operations. All
acquisition-related transaction costs are expensed as incurred. See Note 17 for additional information related to our
acquisitions.
86
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Goodwill and Other Intangible Assets
Goodwill is the excess of our purchase cost over the fair value of the net assets of acquired businesses. We do not
amortize goodwill, but as discussed in the Long-Lived Asset Impairments section below, we assess our goodwill for
impairment at least annually.
Other intangible assets consist primarily of customer and supplier relationships, covenants not-to-compete, licenses,
permits (other than landfill permits, which are combined with landfill tangible assets and depleted per our landfill depletion
policy), and other contracts. Other intangible assets are recorded at fair value on the acquisition date and are generally
amortized using either a 150% declining balance approach or a straight-line basis as we determine appropriate. Customer
and supplier relationships are typically amortized over terms of 10 to 15 years. Covenants not-to-compete are amortized
over the term of the non-compete covenant, which is generally five years. Licenses, permits and other contracts are
amortized over the definitive terms of the related agreements. If the underlying agreement does not contain definitive terms
and the useful life is determined to be indefinite, the asset is not amortized.
Long-Lived Asset Impairments
We assess our long-lived assets for impairment as required under the applicable accounting standards. If necessary,
impairments are recorded in (gain) loss from divestitures, asset impairments and unusual items, net in our Consolidated
Statements of Operations.
Property and Equipment, Including Landfills and Definite-Lived Intangible Assets — We monitor the carrying value
of our long-lived assets for potential impairment on an ongoing basis and test the recoverability of such assets generally
using significant unobservable (“Level 3”) inputs whenever events or changes in circumstances indicate that their carrying
amounts may not be recoverable. These events or changes in circumstances, including management decisions pertaining
to such assets, are referred to as impairment indicators. If an impairment indicator occurs, we perform a test of
recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows.
If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment
has occurred for the group of assets for which we can identify the projected cash flows. If the carrying values are in excess
of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset or asset
group to its carrying value and the difference is recorded in the period that the impairment indicator occurs. Fair value is
generally determined by considering (i) internally developed discounted projected cash flow analysis of the asset or asset
group; (ii) third-party valuations and/or (iii) information available regarding the current market for similar assets.
Estimating future cash flows requires significant judgment and projections may vary from the cash flows eventually
realized, which could impact our ability to accurately assess whether an asset has been impaired.
The assessment of impairment indicators and the recoverability of our capitalized costs associated with landfills and
related expansion projects require significant judgment due to the unique nature of the waste industry, the highly regulated
permitting process and the sensitive estimates involved. During the review of a landfill expansion application, a regulator
may initially deny the expansion application although the expansion permit is ultimately granted. In addition, management
may periodically divert waste from one landfill to another to conserve remaining permitted landfill airspace, or a landfill
may be required to cease accepting waste, prior to receipt of the expansion permit. However, such events occur in the
ordinary course of business in the waste industry and do not necessarily result in impairment of our landfill assets because,
after consideration of all facts, such events may not affect our belief that we will ultimately obtain the expansion permit.
As a result, our tests of recoverability, which generally make use of a probability-weighted cash flow estimation approach,
may indicate that no impairment loss should be recorded.
Indefinite-Lived Intangible Assets, Including Goodwill — At least annually using a measurement date of October 1,
and more frequently if warranted, we assess our indefinite-lived intangible assets, including the goodwill of our reporting
units, for impairment.
87
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting
unit is less than its carrying value. If the assessment indicates a possible impairment, we complete a quantitative review,
comparing the estimated fair value of a reporting unit to its carrying amount, including goodwill. An impairment charge
is recognized if the asset’s estimated fair value is less than its carrying amount. Fair value is typically estimated using an
income approach using Level 3 inputs. However, when appropriate, we may also use a market approach. The income
approach is based on the long-term projected future cash flows of the reporting units. We discount the estimated cash flows
to present value using a weighted average cost of capital that considers factors such as market assumptions, the timing of
the cash flows and the risks inherent in those cash flows. We believe that this approach is appropriate because it provides
a fair value estimate based upon the reporting units’ expected long-term performance considering the economic and market
conditions that generally affect our business. The market approach estimates fair value by measuring the aggregate market
value of publicly-traded companies with similar characteristics to our business as a multiple of their reported earnings. We
then apply that multiple to the reporting units’ earnings to estimate their fair values. We believe that this approach may
also be appropriate in certain circumstances because it provides a fair value estimate using valuation inputs from entities
with operations and economic characteristics comparable to our reporting units.
Fair value is computed using several factors, including projected future operating results, economic projections,
anticipated future cash flows, comparable marketplace data and the cost of capital. There are inherent uncertainties related
to these factors and to our judgment in applying them in our analysis. However, we believe our methodology for estimating
the fair value of our reporting units is reasonable.
Refer to Note 11 for information related to impairments recognized during the reported periods.
Insured and Self-Insured Claims
We have retained a significant portion of the risks related to our health and welfare, general liability, automobile
liability and workers’ compensation claims programs. For our self-insured portions, the exposure for unpaid claims and
associated expenses, including incurred but not reported losses, is based on an actuarial valuation or internal estimates.
The gross estimated liability associated with settling unpaid claims is included in accrued liabilities in our Consolidated
Balance Sheets if expected to be settled within one year; otherwise, it is included in other long-term liabilities. Estimated
insurance recoveries related to recorded liabilities are reflected as other current receivables or other long-term assets in
our Consolidated Balance Sheets when we believe that the receipt of such amounts is probable.
We use a wholly-owned insurance captive to insure the deductibles for our general liability, automobile liability and
workers’ compensation claims programs. We continue to maintain conventional insurance policies with third-party
insurers. WMI pays an annual premium to the insurance captive on behalf of WMI and its insured subsidiaries, typically
in the first quarter of the year, for estimated losses based on an external actuarial analysis. These premiums are held in a
restricted funds account to be used solely for paying insurance claims, resulting in a transfer of risk from our Company to
the insurance captive, and are allocated between current and long-term assets depending on estimated timing of the use of
funds.
Restricted Funds
Our restricted funds accounts primarily consist of funds deposited for purposes of funding insurance claims and
settling landfill final capping, closure, post-closure and environmental remediation obligations. These funds are generally
allocated between cash, money market funds, equity securities and available-for-sale debt securities depending on the
estimated timing and purpose of the use of funds. We use a wholly-owned insurance captive to insure the deductibles for
certain claims programs and the premiums paid are directly deposited into a restricted funds account to be used solely for
paying insurance claims. At several of our landfills, we provide financial assurance by depositing cash into restricted trust
funds for purposes of settling final capping, closure, post-closure and environmental remediation obligations. Balances
maintained in these restricted funds accounts will fluctuate based on (i) changes in statutory requirements; (ii) future
88
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
deposits made to comply with contractual arrangements; (iii) the ongoing use of funds; (iv) acquisitions or divestitures
and (v) changes in the fair value of the financial instruments held in the restricted funds accounts.
See Notes 16 and 18 for additional discussion related to restricted funds accounts for final capping, closure,
post-closure or environmental remediation obligations.
Investments in Unconsolidated Entities
Investments in unconsolidated entities over which the Company has significant influence are accounted for under the
equity method of accounting. Equity investments in which the Company does not have the ability to exert significant
influence over the investees’ operating and financing activities are measured using a quantitative approach as these
investments do not have readily determinable fair values. The quantitative approach, or measurement alternative, is equal
to its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions
for the identical or a similar investment of the same issuer. The fair value of our redeemable preferred stock has been
measured based on third-party investors’ recent or pending transactions in these securities, which are considered the best
evidence of fair value. The following table summarizes our investments in unconsolidated entities as of December 31
(in millions):
Equity method investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments without readily determinable fair values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in unconsolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
538 $
68
—
606 $
460
62
56
578
2023
2022
We monitor and assess the carrying value of our investments throughout the year for potential impairment and write
them down to their fair value when other-than-temporary declines exist. Fair value is generally based on (i) other
third-party investors’ recent or pending transactions in the securities; (ii) other information available regarding the current
market for similar assets; (iii) a market or income approach, as deemed appropriate and/or (iv) a quantitative approach, or
measurement alternative, as noted above. Impairments of our investments are recorded in (gain) loss from divestitures,
asset impairments and unusual items, net in our Consolidated Statements of Operations in accordance with appropriate
accounting guidance.
Refer to Note 11, Note 12 and Note 16 for information related to impairments and other adjustments recognized during
the reported periods.
Foreign Currency
Our operations are primarily in the U.S. but we also have significant operations in Canada. Additionally, we have
certain support functions in India. Local currencies generally are considered the functional currencies of our operations
and investments outside the U.S. The assets and liabilities of our foreign operations are translated to U.S. dollars using the
exchange rate as of the balance sheet date. Revenues and expenses are translated to U.S. dollars using the average exchange
rate during the period. The resulting translation difference is reflected as a component of other comprehensive income
(loss). Foreign currency translation adjustments have primarily been impacted by fluctuations in the U.S. dollar/Canadian
dollar exchange rate which was 1.3243 at December 31, 2023, 1.3554 at December 31, 2022 and 1.2639 at
December 31, 2021. Refer to Note 12 for information regarding the impacts of foreign currency on our comprehensive
income and results of operations.
89
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Revenue Recognition
We generally recognize revenue as services are performed or products are delivered. For example, revenue typically
is recognized as waste is collected, tons are received at our landfills or transfer stations, or recycling commodities are
collected or delivered as product. We bill for certain services prior to performance. Such services include, among others,
certain commercial and residential contracts, and equipment rentals. These advanced billings are included in deferred
revenues and recognized as revenue in the period service is provided.
Our Collection and Disposal operating revenues are primarily generated from fees charged for our collection, transfer
and disposal. Revenues from our collection operations are influenced by factors such as collection frequency, type of
collection equipment furnished, type and volume or weight of the waste collected, distance to the disposal facility or
recycling facility and our disposal costs. Revenues from our landfill operations consist of tipping fees, which are generally
based on the type and weight or volume of waste being disposed of at our disposal facilities. Fees charged at transfer
stations are generally based on the weight or volume of waste deposited, considering our cost of loading, transporting and
disposing of the solid waste at a disposal site. The fees we charge for our services generally include applicable fees, such
as our energy surcharge, which are intended to pass through to customers direct and indirect costs incurred.
Recycling Processing and Sales revenues generally consist of tipping fees and the sale of recycling commodities to
and/or on behalf of third parties.
Our WM Renewable Energy revenue is primarily generated from (i) the sale of captured and converted landfill
methane gas; (ii) the sale of Renewable Identification Numbers (“RINs”) under the Renewable Fuel Standard (“RFS”)
program implemented by the U.S. Environmental Protection Agency (“EPA”); (iii) sale of Low Carbon Fuel credits
designed to stimulate the use of low-carbon fuels and (iv) the sale of energy (electricity and capacity) and associated
Renewable Energy Credits (“RECs”).
See Note 19 for additional information related to revenue by reportable segment and major lines of business.
Deferred Revenues
We record deferred revenues when cash payments are received or due in advance of our performance and classify
them as current since they are earned within a year and there are no significant financing components. Substantially all
our deferred revenues during the reported periods are realized as revenues within one to three months, when the related
services are performed.
Contract Acquisition Costs
Our incremental direct costs of obtaining a contract, which consist primarily of sales incentives, are generally deferred
and amortized to selling, general and administrative expense over the estimated life of the relevant customer relationship,
ranging from five to 13 years. Contract acquisition costs that are paid to the customer are deferred and amortized as a
reduction in revenue over the contract life. Our contract acquisition costs are classified as current or noncurrent based on
the timing of when we expect to recognize amortization and are included in other assets in our Consolidated Balance
Sheets.
As of December 31, 2023 and 2022, we had $207 million and $192 million of deferred contract costs, respectively,
of which $148 million and $137 million, respectively, were related to deferred sales incentives. During each of the years
ended December 31, 2023, 2022 and 2021, we amortized $26 million, $24 million and $23 million, respectively, of sales
incentives to selling, general and administrative expense.
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Long-Term Contracts
Approximately 20% of our total revenue is derived from contracts with a remaining term greater than one year. The
consideration for these contracts is primarily variable in nature. The variable elements of these contracts primarily include
the number of homes and businesses served and annual rate changes based on consumer price index, fuel prices or other
operating costs. Such contracts are generally within our collection, recycling and other lines of business and have a
weighted average remaining contract life of approximately four years. We do not disclose the value of unsatisfied
performance obligations for these contracts as our right to consideration corresponds directly to the value provided to the
customer for services completed to date and all future variable consideration is allocated to wholly unsatisfied performance
obligations.
Capitalized Interest
We capitalize interest on certain projects under development, including landfill expansion projects, certain assets
under construction, including operating landfills and landfill gas-to-energy projects and internal-use software. During
2023, 2022 and 2021, total interest costs were $590 million, $425 million and $388 million, respectively, of which
$63 million, $29 million and $13 million was capitalized in 2023, 2022 and 2021, respectively.
Income Taxes
The Company is primarily subject to income tax in the U.S. and Canada. Current tax obligations associated with our
income tax expense are reflected in the accompanying Consolidated Balance Sheets as a component of accrued liabilities
and our deferred tax obligations are reflected in deferred income taxes.
Deferred income taxes are based on the difference between the financial reporting and tax basis of assets and liabilities.
Deferred income tax expense represents the change during the reporting period in the deferred tax assets and liabilities,
net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carry-forwards and are
reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. We establish reserves for uncertain tax positions when, despite our belief that our
tax return positions are supportable, we believe that certain positions may be challenged and potentially disallowed. When
facts and circumstances change, we adjust these reserves through our income tax expense.
Should interest and penalties be assessed by taxing authorities on any underpayment of income tax, such amounts
would be accrued and classified as a component of our income tax expense in our Consolidated Statements of Operations.
See Note 8 for discussion of our income taxes.
Contingent Liabilities
We estimate the amount of potential exposure we may have with respect to claims, assessments and litigation in
accordance with authoritative guidance on accounting for contingencies. We are party to pending or threatened legal
proceedings covering a wide range of matters in various jurisdictions. It is difficult to predict the outcome of litigation, as
it is subject to many uncertainties. Additionally, it is not always possible for management to make a meaningful estimate
of the potential loss or range of loss associated with such contingencies. See Note 10 for discussion of our commitments
and contingencies.
91
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Supplemental Cash Flow Information
The following table shows supplemental cash flow information for the year ended December 31 (in millions):
Interest, net of capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
447 $
636
348
736
$
387
370
2023
2022
2021
(a) The increase in income taxes paid in 2022 is primarily due to the increase in pre-tax book income during 2022 and a
deposit of approximately $103 million made to the Internal Revenue Service (“IRS”) in the fourth quarter of 2022
related to a disputed tax matter for which we expect to seek a refund. See Note 8 for further discussion.
During 2023, we had $276 million of non-cash financing activities primarily from our low-income housing investment
and new financing leases, which are discussed further in Notes 6 and 8. During 2022, we had $225 million of non-cash
financing activities primarily from our low-income housing investment and new financing leases. Additionally, we had
approximately $25 million and $135 million of non-cash investing activities related to non-cash consideration transferred
as part of our acquisitions in 2023 and 2022, respectively. See Note 17 for further discussion of our 2022 acquisitions.
During 2021, we had $30 million of non-cash financing activities from new financing leases. Non-cash investing and
financing activities are generally excluded from the Consolidated Statements of Cash Flows.
3. Landfill and Environmental Remediation Liabilities
Liabilities for landfill and environmental remediation costs as of December 31 are presented in the table below (in
millions):
2023
2022
Current (in accrued liabilities) . . . . . . . . . . . $
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill
143
2,710
$ 2,853
$
Environmental
Remediation
31
178
209
$
Total
174
2,888
$
$ 3,062
$
Environmental
Landfill Remediation
31
173
204
2,527
$ 2,664 $
137 $
$
Total
168
2,700
$ 2,868
The changes to landfill and environmental remediation liabilities for the year ended December 31, 2023 are reflected
in the table below (in millions):
December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations incurred and capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions in estimates and interest rate assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, divestitures and other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Landfill
Environmental
Remediation
204
—
(27)
6
26
—
209
2,664 $
79
(147)
124
131
2
2,853 $
Our recorded liabilities as of December 31, 2023 include the impacts of inflating certain of these costs based on our
expectations of the timing of cash settlement.
92
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4. Property and Equipment
Property and equipment as of December 31 consisted of the following (in millions):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Containers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture, fixtures and office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation of tangible property and equipment . . . . . . . . . . . . . . . .
Less: Accumulated depletion of landfill airspace. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2023
$
772 $
19,473
6,581
4,989
3,104
4,266
609
39,794
(11,183)
(11,643)
16,968 $
2022
752
18,526
6,173
4,401
3,021
3,809
664
37,346
(10,731)
(10,896)
15,719
(a) As of December 31, 2023 and 2022, includes $1.5 billion and $1.1 billion, respectively, related to recycling facilities.
As of December 31, 2023 and 2022, includes $720 million and $570 million, respectively, related to RNG facilities.
See Note 11 for information regarding asset impairments.
Depreciation and depletion expense, including for assets recorded as financing leases, consisted of the following for
the year ended December 31 (in millions):
Depreciation of tangible property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion of landfill airspace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and depletion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
1,197 $
745
1,942 $
2022
1,155
754
1,909
$
$
2021
1,125
731
1,856
$
$
See Note 5 for information regarding amortization of our intangible assets.
5. Goodwill and Other Intangible Assets
Goodwill was $9,254 million and $9,323 million as of December 31, 2023 and 2022, respectively. As discussed in
Note 2, we perform our annual impairment test of goodwill balances for our reporting units using a measurement date of
October 1. We will also perform interim tests if an impairment indicator exists. As a result of a longer-than-anticipated
ramp toward full scale and profitability of a business engaged in accelerating film and plastic wrap recycling capabilities,
we recorded a goodwill impairment charge of $168 million, with $22 million attributable to noncontrolling interests. This
charge was partially offset by the recognition of $46 million of income related to the reversal of a liability for contingent
consideration associated with our investment in such business. We have a controlling interest in the business, and it is,
therefore, consolidated in our financial statements as part of our Recycling Processing and Sales segment. Fair value of
the business was estimated using an income approach based on long-term projected discounted future cash flows of the
reporting unit. Partially offsetting the decrease in our goodwill balance was a $90 million increase in goodwill associated
with acquisitions primarily within our Collection and Disposal businesses. See Notes 11 and 17 for additional information.
Goodwill is included within each segment’s total assets. For segment reporting purposes, our recycling facilities and
recycling brokerage services are included within our Recycling Processing and Sales segment. Prior to 2023, our recycling
facilities were reflected as a component of the respective Tier segments and our recycling brokerage services were included
as a component of our “Other” operations. Reclassifications have been made to our prior period consolidated financial
93
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
information to conform to the current year presentation. The following table presents changes in goodwill during the
reported periods (in millions):
Collection and Disposal
Recycling
Processing
Balance, December 31, 2021 . . . . . . . . . . . . . . . . . . . .
Acquired goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divested goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation and other . . . . . . . . . . . .
Balance, December 31, 2022 . . . . . . . . . . . . . . . . . . . .
Acquired goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divested goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation and other . . . . . . . . . . . .
Balance, December 31, 2023 . . . . . . . . . . . . . . . . . . . .
$
$
East Tier West Tier Other Ancillary and Sales Other Total
$ 9,028
325
—
(30)
$ 9,323
90
—
(168)
9
$ 9,254
321 $
207
—
(1)
527 $
7
—
(168)
—
366 $
$ 3,673
24
—
(1)
$ 3,696
70
—
—
—
$ 3,766
$ 5,008
92
—
(28)
$ 5,072
13
—
—
9
$ 5,094
25
2
—
—
27
$
—
—
—
—
$
27
1
—
—
—
1
—
—
—
—
1
$
$
Our other intangible assets consisted of the following as of December 31 (in millions):
Covenants Licenses,
Customer
and Supplier
Relationships Compete and Other
Permits
Not-to-
Total
2023
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
1,235
(551)
684
1,288
(543)
745
$
$
$
$
46 $
(19)
27 $
141
(93)
48
$ 1,422
(663)
759
$
51 $
(23)
28 $
141
(87)
54
$ 1,480
(653)
827
$
Amortization expense for other intangible assets was $129 million, $129 million and $143 million for 2023, 2022 and
2021, respectively. Additional information related to other intangible assets acquired through business combinations is
included in Note 17. As of December 31, 2023 and 2022, we had $21 million and $19 million, respectively, of licenses,
permits and other intangible assets that are not subject to amortization because they do not have stated expirations or have
routine, administrative renewal processes. As of December 31, 2023, we expect annual amortization expense related to
other intangible assets to be $119 million in 2024, $109 million in 2025, $86 million in 2026, $80 million in 2027 and
$66 million in 2028.
94
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
6. Debt and Derivatives
The following table summarizes the major components of debt at principal amounts as of each balance sheet date (in
millions) and provides the maturities and interest rate ranges of each major category as of December 31:
Commercial paper program (weighted average interest rate of 5.6% as of
December 31, 2023 and 4.9% as of December 31, 2022) . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
860 $
1,730
2023
2022
Senior notes, maturing through 2050, interest rates ranging from 0.75% to 7.75%
(weighted average interest rate of 3.7% as of December 31, 2023 and 3.2% as of
December 31, 2022) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Term Loan, interest rate of 5.1% as of December 31, 2022. . . . . . . . . . . . . . . . . . . . . . . . . . .
Canadian senior notes, C$500 million maturing September 2026, interest rate of 2.6%. . . .
Tax-exempt bonds, maturing through 2053, fixed and variable interest rates ranging
from 0.55% to 5.0% (weighted average interest rate of 3.3% as of December 31,
2023 and 2.7% as of December 31, 2022) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing leases and other, maturing through 2071 (weighted average interest rate
of 5.0% as of December 31, 2023 and 4.7% as of December 31, 2022) (a). . . . . . . . . . . . .
Debt issuance costs, discounts and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
11,376
—
378
8,626
1,000
369
2,883
2,648
855
(123)
16,229
334
15,895 $
699
(88)
14,984
414
14,570
(a) Excluding our landfill financing leases, the maturities of our financing leases and other debt obligations extend
through 2059.
Debt Classification
As of December 31, 2023, we had approximately $2.8 billion of debt maturing within the next 12 months, including
(i) $1.6 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) $859 million of short-term borrowings under our commercial paper program (net of related
discount on issuance); (iii) $175 million of other debt with scheduled maturities within the next 12 months, including
$60 million of tax-exempt bonds, and (iv) $156 million of 3.5% senior notes that mature in May 2024. As of
December 31, 2023, we have classified $2.4 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 (“$3.5 billion revolving credit facility”), as
discussed below. The remaining $334 million of debt maturing in the next 12 months is classified as current obligations.
Access to and Utilization of Credit Facilities, Commercial Paper Program and Term Loan
$3.5 Billion Revolving Credit Facility — Our $3.5 billion revolving credit facility, maturing May 2027, provides us
with credit capacity to be used for cash borrowings, to support letters of credit and to support our commercial paper
program. The agreement includes a $1.0 billion accordion feature that may be used to increase total capacity in future
periods, and we have the option to request up to two one-year extensions. Waste Management of Canada Corporation and
WM Quebec Inc., each an indirect wholly-owned subsidiary of WMI, are borrowers under the $3.5 billion revolving credit
facility, and the agreement permits borrowing in Canadian dollars up to the U.S. dollar equivalent of $375 million, with
such borrowings to be repaid in Canadian dollars. WM Holdings, a wholly-owned subsidiary of WMI, guarantees all the
obligations under the $3.5 billion revolving credit facility.
95
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The interest rates we pay on outstanding U.S. or Canadian loans are based on a secured overnight financing rate
administered by the Federal Reserve Bank of New York (“SOFR”) or the Canadian Dollar Offered Rate (“CDOR”),
respectively, plus a spread depending on WMI’s senior public debt rating assigned by Moody’s Investors Service, Inc. and
Standard and Poor’s Global Ratings. The spread above SOFR or CDOR can range from 0.585% to 1.025% per annum,
plus a credit adjustment spread of 0.10% per annum on SOFR-based rates (the “SOFR Credit Adjustment Spread”) to
account for the transition from the use of LIBOR to SOFR in such rate calculations. We also pay certain other fees set
forth in the $3.5 billion revolving credit facility agreement, including a facility fee based on the aggregate commitment,
regardless of usage. As of December 31, 2023, we had no outstanding borrowings under this facility. We had $859 million
of outstanding borrowings (net of related discount on issuance) under our commercial paper program and $180 million of
letters of credit issued, both supported by the facility, leaving unused and available credit capacity of $2.5 billion as of
December 31, 2023.
Commercial Paper Program — We have a commercial paper program that enables us to borrow funds for up to 397
days at competitive interest rates. The rates we pay for outstanding borrowings are based on the term of the notes. The
commercial paper program is fully supported by our $3.5 billion revolving credit facility. As of December 31, 2023, we
had $859 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program.
Term Loan — In May 2022, we entered into a $1.0 billion, two-year, U.S. term credit agreement maturing May 2024
(“Term Loan”) to support general corporate purposes. WM Holdings guaranteed all obligations under our Term Loan. The
interest rate we paid on our Term Loan was generally based on SOFR, plus a spread depending on WMI’s senior public
debt rating assigned by Moody’s Investors Service, Inc. and Standard and Poor’s Global Ratings. Our Term Loan had a
contractual maturity of May 2024, but we elected to repay all outstanding borrowings under our Term Loan in August 2023
with proceeds from our July 2023 senior notes issuance, which is discussed further below.
Other Letter of Credit Lines — As of December 31, 2023, we had utilized $834 million of other uncommitted letter
of credit lines with terms extending through December 2027.
Debt Borrowings and Repayments
Commercial Paper Program — During the year ended December 31, 2023 we made cash repayments of $18.7 billion,
which were partially offset by $17.8 billion of cash borrowings (net of related discount on issuance). A portion of these
borrowings were repaid with proceeds from our senior note issuances as discussed below.
Senior Notes — In February 2023, WMI issued $750 million and $500 million of 4.625% senior notes due
February 2030 and February 2033, respectively, the net proceeds of which were $1.24 billion. We used the net proceeds
to reduce outstanding borrowings under our commercial paper program, repay $500 million of WMI’s 2.4% senior notes
upon maturity in May 2023, and for general corporate purposes, including our planned and ongoing investments in our
Recycling Processing and Sales and WM Renewable Energy segments.
In July 2023, WMI issued $750 million and $1.25 billion of 4.875% senior notes due February 2029 and
February 2034, respectively, the net proceeds of which were $1.97 billion. We used the net proceeds to reduce outstanding
borrowings under our commercial paper program, repay $1.0 billion of outstanding borrowings under our Term Loan and
for general corporate purposes.
Term Loan — In August 2023, we repaid $1.0 billion of outstanding borrowings under our Term Loan with proceeds
from our July 2023 senior notes issuance discussed above and contemporaneously terminated the facility.
96
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Tax-Exempt Bonds — We issued $300 million of tax-exempt bonds in 2023. The proceeds from the issuance of these
bonds were deposited directly into a restricted trust fund to be used for the specific purpose for which the money was
raised, which is generally to finance expenditures for solid waste disposal facility, recycling facility and renewable natural
gas facility construction and development. In 2023, we also repaid $65 million of our tax-exempt bonds with available
cash at their scheduled maturities.
Financing Leases and Other — The increase in our financing leases and other debt obligations in 2023 is primarily
related to a note payable associated with our low-income housing investment discussed in Note 8, which increased our
debt obligations by $183 million, and $93 million primarily related to non-cash financing leases. The increase in our debt
obligations was partially offset by $120 million of cash repayments of debt at maturity.
Scheduled Debt Payments
Principal payments of our debt for the next five years and thereafter, based on scheduled maturities are as follows:
$1,192 million in 2024, $1,355 million in 2025, $713 million in 2026, $1,198 million in 2027, $892 million in 2028 and
$11,002 million thereafter. Our recorded debt and financing lease obligations include non-cash adjustments associated
with debt issuance costs, discounts and fair value adjustments attributable to terminated interest rate derivatives, which
have been excluded from these amounts because they will not result in cash payments. As discussed above, we have the
intent and ability to refinance certain 2024 scheduled maturities on a long-term basis, including portions of our commercial
paper borrowings and our $156 million of 3.5% senior notes that mature in May 2024. See Note 7 below for further
discussion of our financing lease arrangements.
Secured Debt
Our debt balances are generally unsecured, except for financing lease obligations and the notes payable associated
with our investments in low-income housing properties. See Notes 8 and 18 for additional information related to these
investments.
Debt Covenants
The terms of certain of our financing arrangements require that we comply with financial and other covenants. Our
most restrictive financial covenant is the one contained in our $3.5 billion revolving credit facility, which sets forth a
maximum total debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization ratio (the
“Leverage Ratio”). This covenant requires that the Leverage Ratio for the preceding four fiscal quarters will not be more
than 3.75 to 1, provided that if an acquisition permitted under the $3.5 billion revolving credit facility involving aggregate
consideration in excess of $200 million occurs during the fiscal quarter, the Company shall have the right to increase the
Leverage Ratio to 4.25 to 1 during such fiscal quarter and for the following three fiscal quarters (the “Elevated Leverage
Ratio Period”). There shall be no more than two Elevated Leverage Ratio Periods during the term of the $3.5 billion
revolving credit facility, and the Leverage Ratio must return to 3.75 to 1 for at least one fiscal quarter between Elevated
Leverage Ratio Periods. The calculation of all components used in the Leverage Ratio covenant are as defined in the
$3.5 billion revolving credit facility. As of December 31, 2023 and 2022, we were in compliance with our Leverage Ratio
covenant.
97
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Our $3.5 billion revolving credit facility, senior notes and other financing arrangements also contain certain
restrictions on the ability of the Company’s subsidiaries to incur additional indebtedness as well as restrictions on the
ability of the Company and its subsidiaries to, among other things, incur liens, engage in sale-leaseback transactions and
engage in mergers and consolidations. We monitor our compliance with these restrictions, but do not believe that they
significantly impact our ability to enter into investing or financing arrangements typical for our business. As of
December 31, 2023 and 2022, we were in compliance with all covenants and restrictions under our financing
arrangements, in addition to our Leverage Ratio covenant, that may have a material effect on our Consolidated Financial
Statements.
Interest Rate Derivatives
During 2023, we entered into treasury rate locks with a total notional value of $800 million to secure underlying
interest rates associated with our senior notes issuances discussed above. We designated our treasury rate locks as cash
flow hedges. These treasury rate locks were terminated contemporaneously with the related issuances of senior notes in
2023, and we received cash of $19 million to settle the related assets. The deferred gains are being amortized as a decrease
to interest expense over the ten-year life of the related senior notes issuances using the effective interest method.
7. Leases
Our operating lease activities primarily consist of leases for real estate, landfills (as discussed further in Note 2) and
operating equipment. Our financing lease activities primarily consist of leases for operating equipment, railcars and landfill
assets. Leases with an initial term of 12 months or less, which are not expected to be renewed beyond one year, are not
recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term. Most leases
include one or more options to renew, with renewal terms generally ranging from one to 10 years. The exercise of lease
renewal options is generally at our sole discretion. We include the renewal term in the calculation of the right-of-use asset
and related lease liability when such renewals are reasonably certain of being exercised. Certain leases also include options
to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease
term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements
include rental payments based on usage and other lease agreements include rental payments adjusted periodically for
inflation; these payments are treated as variable lease payments. Our lease agreements do not contain any material residual
value guarantees or material restrictive covenants.
When the implicit interest rate is not readily available for our leases, we discount future cash flows of the remaining
lease payments using the current interest rate that would be paid to borrow on collateralized debt over a similar term, or
incremental borrowing rate, at the commencement date.
98
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Supplemental balance sheet information for our leases as of December 31 is as follows (in millions):
Leases
Classification
2023
2022
Assets
Long-term:
Operating . . . . . . . . . . . . . . . Other assets
Financing . . . . . . . . . . . . . . .
Property and equipment, net of accumulated
depreciation and depletion
Total lease assets . . . . . . .
Liabilities
Current:
Operating . . . . . . . . . . . . . . . Accrued liabilities
Financing . . . . . . . . . . . . . . . Current portion of long-term debt
Long-term:
Operating . . . . . . . . . . . . . . . Other liabilities
Financing . . . . . . . . . . . . . . . Long-term debt, less current portion
Total lease liabilities . . . .
$
$
$
$
453
$
393
846
66
53
452
321
892
$
$
$
456
328
784
64
44
460
258
826
Operating lease expense was $189 million, $183 million and $155 million during 2023, 2022 and 2021, respectively,
and is included in operating and selling, general and administrative expenses in our Consolidated Statements of Operations.
Financing lease expense was $58 million, $55 million and $58 million during 2023, 2022 and 2021, respectively, and is
included in depreciation, depletion and amortization expense and interest expense, net in our Consolidated Statements of
Operations.
Minimum contractual obligations for our leases (undiscounted) as of December 31, 2023 are as follows (in millions):
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total undiscounted lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discounted lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
Operating
Financing
79 $
69
61
52
45
399
705 $
(187)
518 $
65
72
52
44
33
215
481
(107)
374
As of December 31, 2023, we entered into operating leases, primarily for real estate that have not yet commenced and
therefore are not reflected in the table above, with future lease payments of $57 million. These leases commence through
2024 and have lease terms up to 16 years.
Cash paid during 2023 for our operating and financing leases was $77 million and $60 million, respectively. Cash
paid during 2022 for our operating and financing leases was $76 million and $56 million, respectively. During 2023,
right-of-use assets obtained in exchange for lease obligations for our operating and financing leases were $62 million and
99
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
$121 million, respectively. During 2022, right-of-use assets obtained in exchange for lease obligations for our operating
and financing leases were $69 million and $33 million, respectively.
As of December 31, 2023, the weighted average remaining lease terms of our operating and financing leases were
approximately 19 years and 10 years, respectively. The weighted average discount rates used to determine the lease
liabilities as of December 31, 2023 for our operating and financing leases were approximately 3.4% and 4.2%,
respectively.
8. Income Taxes
Income Tax Expense
Our income tax expense consisted of the following for the year ended December 31 (in millions):
2023
2022
2021
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
477 $
151
34
662
73
2
8
83
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
745 $
456 $
130
43
629
20
30
(1)
49
678 $
436
132
41
609
(55)
(22)
—
(77)
532
The U.S. federal statutory income tax rate is reconciled to the effective income tax rate for the year ended
December 31 as follows:
Income tax expense at U.S. federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . .
State and local income taxes, net of federal income tax benefit . . . . . . . . . . . .
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxing authority audit settlements and other tax adjustments . . . . . . . . . . . . . .
Tax impact of equity-based compensation transactions . . . . . . . . . . . . . . . . . . .
Tax impact of impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate differential on foreign income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
21.00 %
4.15
(3.23)
(0.02)
(0.35)
1.87
0.21
1.03
24.66 %
2022
21.00 %
4.16
(2.81)
0.54
(0.45)
0.02
0.27
0.51
23.24 %
2021
21.00 %
4.14
(2.69)
0.53
(0.60)
(0.29)
0.37
0.16
22.62 %
The comparability of our income tax expense for the reported periods has been primarily affected by (i) federal tax
credits; (ii) the tax implications of impairments; (iii) an unfavorable increase in permanent differences between taxable
income and accounting income associated with our treatment of landfill closure and post-closure costs; (iv) variations in
our income before income taxes; (v) the realization of state net operating losses and credits; (vi) excess tax benefits
associated with equity‑based compensation transactions and (vii) tax audit settlements.
100
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For financial reporting purposes, income before income taxes by source for the year ended December 31 was as
follows (in millions):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2,878 $
143
3,021 $
2023
2022
2,779
139
2,918
2021
2,211
138
2,349
$
$
Investments Qualifying for Federal Tax Credits — We have significant financial interests in entities established to
invest in and manage low-income housing properties. In October 2023, we acquired an additional noncontrolling interest
in a limited liability company established to invest in and manage low-income housing properties. Total consideration for
this investment is expected to be $260 million, comprised of a $183 million note payable, an initial cash payment of
$20 million and $57 million of interest payments expected to be paid over the life of the investment. At the time of the
investment, we increased our investments in unconsolidated entities in our Consolidated Balance Sheet by $203 million,
representing the principal balance of the note and the initial cash payment. We support the operations of these entities in
exchange for a pro-rata share of the tax credits they generate. The low-income housing investments qualify for federal tax
credits that we expect to realize through 2035 under Section 42 or Section 45D of the Internal Revenue Code.
We account for our investments in these entities using the equity method of accounting, recognizing our share of each
entity’s results of operations and other reductions in the value of our investments in equity in net losses of unconsolidated
entities within our Consolidated Statements of Operations. During the years ended December 31, 2023, 2022 and 2021,
we recognized net losses of $66 million, $65 million and $51 million, respectively, and a reduction in our income tax
expense of $108 million, $99 million and $74 million, respectively, primarily due to federal tax credits realized from these
investments as well as the tax benefits from the pre-tax losses realized. In addition, during the years ended
December 31, 2023, 2022 and 2021, we recognized interest expense of $15 million, $14 million and $9 million,
respectively, associated with our investments in low-income housing properties. See Note 18 for additional information
related to these unconsolidated variable interest entities.
Tax Implications of Impairments — The non-cash impairment charges recognized during 2023 are not expected to be
deductible for tax purposes. The impact of these non-deductible charges and the resulting difference between book and
taxable income is an increase in income tax expense of $50 million. The non-cash impairment charges recognized during
2022 and 2021 were deductible for tax purposes. See Note 11 for more information related to our impairment charges.
Permanent Differences —During 2023, 2022 and 2021 we recognized additional income tax expense of $34 million,
$14 million and $2 million, respectively, related to permanent differences between taxable income and accounting income.
This increase is largely due to an increase in taxable interest income associated with the Company’s election to deduct
landfill closure and post-closure costs for income tax purposes when incurred and accrued. The increase in taxable interest
income is due to the increase in the applicable federal rate published by the IRS.
State Net Operating Losses and Credits — During 2023, 2022 and 2021, we recognized state net operating losses and
credits resulting in a reduction in our income tax expense of $20 million, $8 million and $15 million, respectively.
Equity-Based Compensation — During 2023, 2022 and 2021, we recognized a reduction in our income tax expense
of $14 million, $17 million and $18 million, respectively, for excess tax benefits related to the vesting or exercise of
equity-based compensation awards.
Tax Audit Settlements — We file income tax returns in the U.S. and Canada, as well as other state and local
jurisdictions. We are currently under audit by various taxing authorities, as discussed below, and our audits are in various
stages of completion. During the reported periods, we settled various tax audits which resulted in a reduction in our income
101
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
tax expense of $5 million, $6 million and $13 million for the years ended December 31, 2023, 2022 and 2021,
respectively.
We participate in the IRS’s Compliance Assurance Process, which means we work with the IRS throughout the year
towards resolving any material issues prior to the filing of our annual tax return. Any unresolved issues as of the tax return
filing date are subject to routine examination procedures. In the fourth quarter of 2022, the Company received a notice of
tax due for the 2017 tax year related to a remaining disagreement with the IRS. In response to the notice, the Company
made a deposit of approximately $103 million with the IRS. The Company expects to seek a refund of the entire amount
deposited with the IRS and litigate any denial of the claim for refund. As of December 31, 2023 and 2022, the IRS deposit,
net of reserve for uncertain tax positions, was classified as a component of other long-term assets in the Company’s
Consolidated Balance Sheets.
In addition, we are in the examination phase of IRS audits for the 2022 and 2023 tax years and expect the audits to be
completed within the next 18 months. We are also currently undergoing audits by various state and local jurisdictions for
tax years that date back to 2014.
Deferred Tax Assets (Liabilities)
The components of net deferred tax liabilities as of December 31 are as follows (in millions):
Deferred tax assets:
Net operating loss, capital loss and tax credit carry-forwards. . . . . . . . . . . . . . . . . . . . . . .
Landfill and environmental remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous and other reserves, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:
$
2023
2022
137 $
195
128
143
603
(181)
155
216
131
117
619
(143)
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,091)
(1,046)
(111)
(1,826) $
(1,061)
(1,034)
(114)
(1,733)
$
As of December 31, 2023, we had $2 million of federal net operating loss carry-forwards with expiration dates
through 2026 and $2.3 billion of state net operating loss carry-forwards with expiration dates through 2043. We also had
$8 million of federal capital loss carry-forwards with expiration dates through 2025, $39 million of foreign tax credit
carry-forwards with expiration dates through 2033 and $9 million of state tax credit carry-forwards with expiration dates
through 2039.
We have established valuation allowances for uncertainties in realizing the benefit of certain tax loss and credit
carry-forwards and other deferred tax assets. While we expect to realize the deferred tax assets, net of the valuation
allowances, changes in estimates of future taxable income or in tax laws may alter this expectation.
102
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Liabilities for Uncertain Tax Positions
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, including accrued interest,
is as follows (in millions):
Balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current year. . . . . . . . . . . . . . . . .
Additions based on tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2023
2022
2021
64 $
6
—
2
—
(6)
66 $
64
5
—
1
—
(6)
64
$
$
37
22
18
3
(12)
(4)
64
These liabilities are included as a component of other long-term liabilities or as an offset to other long-term assets in
our Consolidated Balance Sheets because the Company does not anticipate that settlement of the liabilities will require
payment of cash within the next 12 months. As of December 31, 2023, we had $54 million of net unrecognized tax benefits
that, if recognized in future periods, would impact our effective income tax rate.
We recognize interest expense related to unrecognized tax benefits in our income tax expense, which was not material
for the reported periods. We did not have any material accrued liabilities or expense for penalties related to unrecognized
tax benefits for the reported periods.
9. Employee Benefit Plans
Defined Contribution Plans — Waste Management sponsors a 401(k) retirement savings plan that covers employees,
except those working subject to collective bargaining agreements that do not provide for coverage under the plan.
U.S. employees who are not subject to such collective bargaining agreements are generally eligible to participate in the
plan following a 90-day waiting period after hire and may contribute as much as 50% of their eligible annual compensation
and 80% of their annual incentive plan bonus, subject to annual contribution limitations established by the IRS. Under the
401(k) retirement savings plan, for non-union employees, we match 100% of employee contributions on the first 3% of
their eligible annual compensation and 50% of employee contributions on the next 3% of their eligible annual
compensation, resulting in a maximum match of 4.5% of eligible annual compensation. Non-union employees are
automatically enrolled in the plan at a 3% contribution rate upon eligibility. Both employee and Company contributions
are in cash and vest immediately. Certain U.S. employees who are subject to collective bargaining agreements may
participate in the 401(k) retirement savings plan under terms specified in their collective bargaining agreement. Certain
employees outside the U.S., including those in Canada, participate in defined contribution plans maintained by the
Company in compliance with laws of the appropriate jurisdiction. Charges to operating and selling, general and
administrative expenses for our defined contribution plans totaled $118 million, $112 million and $104 million for
the years ended December 31, 2023, 2022 and 2021, respectively.
Defined Benefit Plans (other than multiemployer defined benefit pension plans discussed below) — WM Holdings
sponsors a defined benefit plan for certain employees who are subject to collective bargaining agreements that provide for
participation in this plan. Further, certain of our Canadian subsidiaries sponsor defined benefit plans that are frozen to new
participants. As of December 31, 2023, the combined benefit obligation of these pension plans was $119 million supported
by $118 million of combined plan assets, resulting in an aggregate unfunded benefit obligation for these plans of
$1 million. As of December 31, 2022, the combined benefit obligation of these pension plans was $117 million supported
by $113 million of combined plan assets, resulting in an aggregate unfunded benefit obligation for these plans of
$4 million.
103
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In addition, WM Holdings and certain of its subsidiaries provided post-retirement health care and other benefits to
eligible retirees. In conjunction with our acquisition of WM Holdings in July 1998, we limited participation in these plans
to participating retirees as of December 31, 1998. The unfunded benefit obligation for these plans was $7 million and
$8 million as of December 31, 2023 and 2022, respectively.
Our assets and accrued benefit liabilities for our defined benefit pension and other post-retirement plans are included
as components of long-term other assets, accrued liabilities and long-term other liabilities in our Consolidated Balance
Sheets.
Multiemployer Defined Benefit Pension Plans — We are a participating employer in a number of trustee-managed
multiemployer defined benefit pension plans (“Multiemployer Pension Plans”) for employees who are covered by
collective bargaining agreements. The risks of participating in these Multiemployer Pension Plans are different from
single-employer plans in that (i) assets contributed to the Multiemployer Pension Plan by one employer may be used to
provide benefits to employees or former employees of other participating employers; (ii) if a participating employer stops
contributing to the plan, the unfunded obligations of the plan may be required to be assumed by the remaining participating
employers and (iii) if we choose to stop participating in any of our Multiemployer Pension Plans, we may be required to
pay those plans a withdrawal amount based on the underfunded status of the plan. The following table outlines our
participation in Multiemployer Pension Plans considered to be individually significant (dollars in millions):
Pension Protection Act
EIN/Pension Plan
Number
Reported Status(a)
2022
2023
FIP/RP
Status(b)(c) 2023
Implemented $
Company
Contributions
2022
2021
Expiration Date
of Collective
Bargaining
Agreement(s)
1 $
1 $
1
6/30/2025
Implemented
2
2
2 Various dates
through
9/30/2026
Implemented
Not
Applicable
4
4
4 Various dates
through
3/31/2028
41
37
35 Various dates
through
7/13/2028
Critical and
Declining
Not
Endangered
or Critical
as of
3/31/2023
Not
Endangered
or Critical
Not
Endangered
or Critical
Critical and
Declining
Not
Endangered
or Critical
as of
3/31/2022
Not
Endangered
or Critical
Not
Endangered
or Critical
Pension Fund
Automotive Industries Pension Plan . . . . . . . . . . EIN: 94-1133245;
Plan Number: 001
EIN: 36-6140097;
Plan Number: 001
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Midwest Operating Engineers Pension Trust
Suburban Teamsters of Northern Illinois Pension
Plan (d) . . . . . . . . . . . . . . . . . . . . . . . . . . .
EIN: 36-6155778;
Plan Number: 001
Western Conference of Teamsters Pension Plan . . EIN: 91-6145047;
Plan Number: 001
Contributions to other Multiemployer Pension
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total contributions to Multiemployer Pension
Plans (e) . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
48
$
44 $
42
18
17
19
$
66 $
61 $
61
(a) Unless otherwise noted in the table above, the most recent Pension Protection Act zone status available in 2023 and
2022 is for the plan’s year-end as of December 31, 2022 and 2021, respectively. The zone status is based on
information that we received from the plan and is certified by the plan’s actuary. As defined in the Pension Protection
Act of 2006, among other factors, plans reported as critical are generally less than 65% funded and plans reported as
endangered are generally less than 80% funded. Under the Multiemployer Pension Reform Act of 2014, a plan is
generally in critical and declining status if it (i) is certified to be in critical status pursuant to the Pension Protection
Act of 2006 and (ii) is projected to be insolvent within the next 15 years or, in certain circumstances, 20 years.
(b) The “FIP/RP Status” column indicates plans for which a Funding Improvement Plan (“FIP”) or a Rehabilitation Plan
(“RP”) has been implemented.
(c) A Multiemployer Pension Plan that has been certified as endangered, seriously endangered or critical may begin to
levy a statutory surcharge on contribution rates. Once authorized, the surcharge is at the rate of 5% for the first
12 months and 10% for any periods thereafter. Contributing employers, however, may eliminate the surcharge by
entering into a collective bargaining agreement that meets the requirements of the applicable FIP or RP.
104
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(d) Of the Multiemployer Pension Plans considered to be individually significant, the Company was listed in the
Form 5500 of the Suburban Teamsters of Northern Illinois Pension Plan as providing more than 5% of the total
contributions for plan years ending December 31, 2023 and 2022.
(e) Total contributions to Multiemployer Pension Plans exclude contributions related to withdrawal liabilities, if any.
Our portion of the projected benefit obligation, plan assets and unfunded liability for the Multiemployer Pension Plans
is not material to our financial position. However, the failure of participating employers to remain solvent could affect our
portion of the plans’ unfunded liability. Specific benefit levels provided by union pension plans are not negotiated with or
known by the employer contributors.
In connection with our ongoing renegotiations of various collective bargaining agreements, we may discuss and
negotiate for the complete or partial withdrawal from one or more of these pension plans. Further, business events, such
as the discontinuation or nonrenewal of a customer contract, the decertification of a union, or relocation, reduction or
discontinuance of certain operations, which result in the decline of Company contributions to a Multiemployer Pension
Plan could trigger a partial or complete withdrawal. In the event of a withdrawal, we may incur expenses associated with
our obligations for unfunded vested benefits at the time of the withdrawal. Refer to Note 10 for additional information
related to our obligations to Multiemployer Pension Plans.
Multiemployer Plan Benefits Other Than Pensions — During the years ended December 31, 2023, 2022 and 2021, the
Company made contributions of $56 million, $49 million and $51 million, respectively, to multiemployer health and
welfare plans that also provide other post-retirement employee benefits. Funding of benefit payments for plan participants
are made at negotiated rates in the respective collective bargaining agreements as costs are incurred.
10. Commitments and Contingencies
Financial Instruments — We have obtained letters of credit, surety bonds and insurance policies and have established
trust funds and issued financial guarantees to support tax-exempt bonds, contracts, performance of landfill final capping,
closure and post-closure requirements, environmental remediation and other obligations. Letters of credit generally are
supported by our $3.5 billion revolving credit facility and other credit lines established for that purpose. These facilities
are discussed further in Note 6. Surety bonds and insurance policies are supported by (i) a diverse group of third-party
surety and insurance companies; (ii) an entity in which we have a noncontrolling financial interest or (iii) a wholly-owned
insurance captive, the sole business of which is to issue surety bonds and/or insurance policies on our behalf.
Management does not expect that any claims against or draws on these instruments would have a material adverse
effect on our financial condition, results of operations or cash flows. We have not experienced any unmanageable difficulty
in obtaining the required financial assurance instruments for our current operations. In an ongoing effort to mitigate risks
of future cost increases and reductions in available capacity, we continue to evaluate various options to access
cost-effective sources of financial assurance.
Insurance — We carry insurance coverage for protection of our assets and operations from certain risks including
general liability, automobile liability, workers’ compensation, real and personal property, directors’ and officers’ liability,
pollution legal liability, cyber incident liability and other coverages we believe are customary to the industry. Our exposure
to loss for insurance claims is generally limited to the per-incident deductible under the related insurance policy and any
amounts that exceed our insured limits. Our exposure could increase if our insurers are unable to meet their commitments
on a timely basis.
We have retained a significant portion of the risks related to our general liability, automobile liability and workers’
compensation claims programs. “General liability” refers to the self-insured portion of specific third-party claims made
against us that may be covered under our commercial general liability insurance policy. For our self-insured portions, the
exposure for unpaid claims and associated expenses, including incurred but not reported losses, is based on an actuarial
105
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
valuation or internal estimates. The accruals for these liabilities could be revised if future occurrences or loss development
significantly differ from such valuations and estimates. We use a wholly-owned insurance captive to insure the deductibles
for our general liability, automobile liability and workers’ compensation claims programs. Our receivable balance
associated with insurance claims was $127 million and $142 million as of December 31, 2023 and 2022 respectively. The
changes to our insurance reserves for the year ended December 31 are summarized below (in millions):
Balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Self-insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Current portion as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Long-term portion as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023(a)
729
201
(218)
712
175
537
2022
734
242
(247)
729
189
540
$
$
$
$
(a) Based on current estimates, we anticipate that most of our insurance reserves will be settled in cash over the next six
years.
We do not expect the impact of any known casualty, property, environmental or other contingency to have a material
impact on our financial condition, results of operations or cash flows.
Unconditional Purchase Obligations — Our unconditional purchase obligations are generally established in the
ordinary course of our business and are structured in a manner that provides us with access to important resources at
competitive, market-driven rates and consist primarily of the following:
• Disposal — We have several agreements expiring at various dates through 2052 that require us to dispose of a
minimum number of tons at third-party disposal facilities. Under these put-or-pay agreements, we are required to
pay for the agreed upon minimum volumes regardless of the actual number of tons placed at the facilities. We
generally fulfill our minimum contractual obligations by disposing of volumes collected in the ordinary course
of business at these disposal facilities.
• Other — We are party to certain multi-year service agreements, including various contracts to support our
WM Renewable Energy segment, such as interconnection agreements, expiring at various dates through 2044
requiring minimum annual payments.
As of December 31, 2023, our estimated minimum obligations associated with unconditional purchase obligations
were $173 million in 2024, $164 million in 2025, $133 million in 2026, $51 million in 2027, $44 million in 2028 and
$470 million thereafter. We may also establish unconditional purchase obligations in conjunction with acquisitions or
divestitures. Our future minimum obligations under these outstanding purchase agreements are generally quantity driven
and, as a result, our associated financial obligations are not fixed as of December 31, 2023. For contracts that require us
to purchase minimum quantities of goods or services, we have estimated our future minimum obligations based on the
current market values of the underlying products or services or contractually stated amounts. We currently expect the
products and services provided by these agreements to continue to meet the needs of our ongoing operations. Therefore,
we do not expect these established arrangements to materially impact our future financial condition, results of operations
or cash flows.
Other Commitments
• Royalties — We have various arrangements that require us to make royalty payments to third parties including
prior land owners, lessors or host communities where our operations are located. Our obligations generally are
based on per ton rates for waste actually received at our transfer stations or landfills. Royalty agreements that are
non-cancelable and require fixed or minimum payments are included in our financing leases and other debt
obligations in our Consolidated Balance Sheets as disclosed in Note 6. Additionally, our Collection and Disposal
and Corporate and Other businesses earn royalties from our WM Renewable Energy segment related to the
106
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
transfer of landfill gas to our WM Renewable Energy segment from our active and closed landfills. All royalties
between our WM Renewable Energy segment and Collection and Disposal and Corporate and Other businesses
are eliminated in consolidation.
Guarantees — We have entered into the following guarantee agreements associated with our operations:
• As of December 31, 2023, WM Holdings has fully and unconditionally guaranteed all of WMI’s senior
indebtedness, including its senior notes which mature through 2050, $3.5 billion revolving credit facility and
certain letter of credit lines. WMI has fully and unconditionally guaranteed the senior indebtedness of WM
Holdings, which matures in 2026. Performance under these guarantee agreements would be required if either
party defaulted on their respective obligations. No additional liabilities have been recorded for these intercompany
guarantees because all of the underlying obligations are reflected in our Consolidated Balance Sheets.
• WMI and WM Holdings have guaranteed subsidiary debt obligations, including tax-exempt bonds, financing
leases and other indebtedness. If a subsidiary fails to meet its obligations associated with its debt agreements as
they come due, WMI or WM Holdings will be required to perform under the related guarantee agreement.
No additional liabilities have been recorded for these intercompany guarantees because all of the underlying
obligations are reflected in our Consolidated Balance Sheets. See Note 6 for information related to the balances
and maturities of these debt obligations.
• Certain of our subsidiaries have guaranteed the market or contractually-determined value of certain homeowners’
properties that are adjacent to or near certain of our landfills. These guarantee agreements extend over the life of
the respective landfill. Under these agreements, we would be responsible for the difference, if any, between the
sale value and the guaranteed market or contractually-determined value of the homeowners’ properties. As of
December 31, 2023, we have agreements guaranteeing certain market value losses for certain properties adjacent
to or near 19 of our landfills. Any liability associated with the triggering of the home value guarantee has been
reflected in our Consolidated Balance Sheets. We do not believe that the remaining contingent obligations will
have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
• We have indemnified the purchasers of businesses or divested assets for the occurrence of specified events under
certain of our divestiture agreements. Other than certain identified items that are currently recorded as obligations,
we do not believe that it is possible to determine the contingent obligations associated with these indemnities.
Additionally, under certain of our acquisition agreements, we have provided for additional consideration to be
paid to the sellers if established financial targets or other market conditions are achieved post-closing and we
have recognized liabilities for these contingent obligations based on an estimate of the fair value of these
contingencies at the time of acquisition. We do not currently believe that contingent obligations to provide
indemnification or pay additional post-closing consideration in connection with our divestitures or acquisitions
will have a material adverse effect on the Company’s business, financial condition, results of operations or cash
flows.
• WMI and WM Holdings guarantee the service, lease, financial and general operating obligations of certain of
their subsidiaries. If such a subsidiary fails to meet its contractual obligations as they come due, the guarantor has
an unconditional obligation to perform on its behalf. No additional liability has been recorded for service,
financial or general operating guarantees because the subsidiaries’ obligations are properly accounted for as costs
of operations as services are provided or general operating obligations as incurred. No additional liability has
been recorded for the lease guarantees because the subsidiaries’ obligations are properly accounted for as
operating or financing leases, as appropriate.
Environmental Matters — A significant portion of our operating costs and capital expenditures could be characterized
as costs of environmental protection. The nature of our operations, particularly with respect to the construction, operation
and maintenance of our landfills, subjects us to an array of laws and regulations relating to the protection of the
environment. Under current laws and regulations, we may have liabilities for environmental damage caused by our
operations, or for damage caused by conditions that existed before we acquired a site. In addition to remediation activity
107
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
required by state or local authorities, such liabilities include PRP investigations. The costs associated with these liabilities
can include settlements, certain legal and consultant fees, as well as incremental internal and external costs directly
associated with site investigation and clean-up.
As of December 31, 2023, we have been notified by the government that we are a PRP in connection with 73 locations
listed on EPA Superfund National Priorities List (“NPL”). Of the 73 sites at which claims have been made against us, 14
are sites we own. Each of the NPL sites we own was initially developed by others as a landfill disposal facility. At each
of these facilities, we are working in conjunction with the government to characterize or remediate identified site problems,
and we have either agreed with other legally liable parties on an arrangement for sharing the costs of remediation or are
working toward a cost-sharing agreement. We generally expect to receive any amounts due from other participating parties
at or near the time that we make the remedial expenditures. The other 59 NPL sites, which we do not own, are at various
procedural stages under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, known as CERCLA or Superfund.
The majority of proceedings involving NPL sites that we do not own are based on allegations that certain of our
subsidiaries (or their predecessors) transported hazardous substances to the sites, often prior to our acquisition of these
subsidiaries. CERCLA generally provides for liability for those parties owning, operating, transporting to or disposing at
the sites. Proceedings arising under Superfund typically involve numerous waste generators and other waste transportation
and disposal companies and seek to allocate or recover costs associated with site investigation and remediation, which
costs could be substantial and could have a material adverse effect on our consolidated financial statements. At some of
the sites at which we have been identified as a PRP, our liability is well defined as a consequence of a governmental
decision and an agreement among liable parties as to the share each will pay for implementing that remedy. At other sites,
where no remedy has been selected or the liable parties have been unable to agree on an appropriate allocation, our future
costs are uncertain.
In 2018, both of McGinnes Industrial Maintenance Corporation (“MIMC”), a subsidiary of Waste Management of
Texas, Inc., and International Paper Company (“IPC”) entered into an Administrative Order on Consent with the EPA as
PRPs to develop a remedial design for the San Jacinto River Waste Pits Superfund Site in Harris County, Texas. We
recorded a liability for MIMC’s estimated potential share of the EPA’s proposed remedy and related costs, although
allocation of responsibility among the PRPs for the proposed remedy has not been established. MIMC and IPC have
continued to work on a remedial design to support the EPA’s proposed remedy; however, in the first quarter of 2024, the
EPA publicly issued a letter alleging that the remedial design has serious deficiencies and providing MIMC and IPC time
to submit a remedy plan. Due to increases in the estimated costs of the remedy, we recorded an additional $17 million
liability for MIMC’s estimated potential share of such costs in 2023. The total recorded liability as of December 31, 2023
and 2022 was $85 million and $68 million, respectively. MIMC’s ultimate liability could be materially different from
current estimates, including potential increases resulting from MIMC’s continued engagement with the EPA regarding a
final remedial design for the site. Refer to Notes 2 and 11 for additional information regarding the measurement of certain
environmental liabilities.
Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental
authority is a party to the proceedings, or such proceedings are known to be contemplated, unless we reasonably believe
that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, below a stated
threshold. In accordance with this SEC regulation, the Company uses a threshold of $1 million for purposes of determining
whether disclosure of any such environmental proceedings is required. As of the date of this filing, we are not aware of
any matters that are required to be disclosed pursuant to this standard.
From time to time, we are also named as defendants in personal injury and property damage lawsuits, including
purported class actions, on the basis of having owned, operated or transported waste to a disposal facility that is alleged to
have contaminated the environment or, in certain cases, on the basis of having conducted environmental remediation
activities at sites. Some of the lawsuits may seek to have us pay the costs of monitoring of allegedly affected sites and
health care examinations of allegedly affected persons for a substantial period of time even where no actual damage is
108
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
proven. While we believe we have meritorious defenses to these lawsuits, the ultimate resolution is often substantially
uncertain due to the difficulty of determining the cause, extent and impact of alleged contamination (which may have
occurred over a long period of time), the potential for successive groups of complainants to emerge, the diversity of the
individual plaintiffs’ circumstances, and the potential contribution or indemnification obligations of co-defendants or other
third parties, among other factors. Additionally, we often enter into agreements with landowners imposing obligations on
us to meet certain regulatory or contractual conditions upon site closure or upon termination of the agreements. Compliance
with these agreements inherently involves subjective determinations and may result in disputes, including litigation.
Litigation — We are subject to various proceedings, lawsuits, disputes and claims arising in the ordinary course of
our business. Many of these actions raise complex factual and legal issues and are subject to uncertainties. Actions that
have been filed against us, and that may be filed against us in the future, include personal injury, property damage,
commercial, customer, and employment-related claims, including purported state and national class action lawsuits related
to: alleged environmental contamination, including releases of hazardous material and odors; sales and marketing
practices, customer service agreements and prices and fees; and federal and state wage and hour and other laws. The
plaintiffs in some actions seek unspecified damages or injunctive relief, or both. These actions are in various procedural
stages, and some are covered, in part, by insurance. We currently do not believe that the eventual outcome of any such
actions will have a material adverse effect on the Company’s business, financial condition, results of operations or cash
flows.
In June 2022, we and certain of our officers were named as defendants in a complaint alleging violation of the federal
securities laws and seeking certification as a class action in the U.S. District Court for the Southern District of New York.
A lead plaintiff has been appointed and an amended complaint was filed in January 2023. The amended complaint seeks
damages on behalf of a putative class of secondary market purchasers of our senior notes with a special mandatory
redemption feature issued in May 2019, asserting claims under the Securities Exchange Act based on alleged
misrepresentations and omissions concerning the time for completion of our acquisition of Advanced Disposal. Our motion
to dismiss is pending and we will vigorously defend against this pending suit. We believe any potential recovery by the
plaintiffs, in excess of applicable deductibles, will be covered by insurance, and we do not believe that the eventual
outcome of this suit will have a material adverse effect on the Company’s business, financial condition, results of
operations or cash flows.
WMI’s charter and bylaws provide that WMI shall indemnify against all liabilities and expenses, and upon request
shall advance expenses to any person, who is subject to a pending or threatened proceeding because such person is or was
a director or officer of the Company. Such indemnification is required to the maximum extent permitted under Delaware
law. Accordingly, the director or officer must execute an undertaking to reimburse the Company for any fees advanced if
it is later determined that the director or officer was not permitted to have such fees advanced under Delaware law.
Additionally, the Company has direct contractual obligations to provide indemnification to each of the members of WMI’s
Board of Directors and each of WMI’s executive officers. The Company may incur substantial expenses in connection
with the fulfillment of its advancement of costs and indemnification obligations in connection with actions or proceedings
that may be brought against its former or current officers, directors and employees.
Multiemployer Defined Benefit Pension Plans — About 20% of our workforce is covered by collective bargaining
agreements with various local unions across the U.S. and Canada. As a result of some of these agreements, certain of our
subsidiaries are participating employers in a number of Multiemployer Pension Plans for the covered employees. Refer to
Note 9 for additional information about our participation in Multiemployer Pension Plans considered individually
significant. In connection with our ongoing renegotiation of various collective bargaining agreements, we may discuss and
negotiate for the complete or partial withdrawal from one or more of these Multiemployer Pension Plans. A complete or
partial withdrawal from a Multiemployer Pension Plan may also occur if employees covered by a collective bargaining
agreement vote to decertify a union from continuing to represent them. Any other circumstance resulting in a decline in
Company contributions to a Multiemployer Pension Plan through a reduction in the labor force, whether through attrition
over time or through a business event (such as the discontinuation or nonrenewal of a customer contract, the decertification
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
of a union, or relocation, reduction or discontinuance of certain operations) may also trigger a complete or partial
withdrawal from one or more of these pension plans.
We do not believe that any future liability relating to our past or current participation in, or withdrawals from, the
Multiemployer Pension Plans to which we contribute will have a material adverse effect on our business, financial
condition or liquidity. However, liability for future withdrawals could have a material adverse effect on our results of
operations or cash flows for a particular reporting period, depending on the number of employees withdrawn and the
financial condition of the Multiemployer Pension Plan(s) at the time of such withdrawal(s).
Tax Matters — We maintain a liability for uncertain tax positions, the balance of which management believes is
adequate. Results of audit assessments by taxing authorities are not currently expected to have a material adverse effect
on our financial condition, results of operations or cash flows. We participate in the IRS’s Compliance Assurance Process,
which means we work with the IRS throughout the year towards resolving any material issues prior to the filing of our
annual tax return. Any unresolved issues as of the tax return filing date are subject to routine examination procedures. In
the fourth quarter of 2022, the Company received a notice of tax due for the 2017 tax year related to a remaining
disagreement with the IRS. In response to the notice, the Company made a deposit of approximately $103 million with the
IRS. The Company expects to seek a refund of the entire amount deposited with the IRS and litigate any denial of the
claim for refund. As of December 31, 2023 and 2022, the IRS deposit, net of reserve for uncertain tax positions, was
classified as a component of other long-term assets in the Company’s Consolidated Balance Sheets.
11. Asset Impairments and Unusual Items
(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net
The following table summarizes the major components of (gain) loss from divestitures, asset impairments and unusual
items, net for the year ended December 31 (in millions):
Gain from divestitures, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
2021
$
$
— $
275
(32)
243 $
(5) $
50
17
62
$
(44)
8
20
(16)
During the year ended December 31, 2023, we recognized $243 million of net charges primarily consisting of (i) a
$168 million goodwill impairment charge within our Recycling Processing and Sales segment related to a business
engaged in accelerating film and plastic wrap recycling capabilities, with $22 million attributable to noncontrolling
interests. This charge was partially offset by the recognition of $46 million of income related to the reversal of a liability
for contingent consideration associated with our investment in such business; (ii) $107 million of impairment charges
within Corporate and Other for certain investments in waste diversion technology businesses and (iii) a $17 million charge
within Corporate and Other to adjust an indirect wholly-owned subsidiary’s estimated potential share of the liability for a
proposed environmental remediation plan at a closed site. Refer to Notes 5 and 10 for further information.
During the year ended December 31, 2022, we recognized $62 million of net charges consisting of (i) $50 million of
asset impairment charges primarily related to management’s decision to close two landfills within our East Tier and
(ii) a $17 million charge pertaining to reserves for loss contingencies within Corporate and Other to adjust an indirect
wholly-owned subsidiary’s estimated potential share of the liability for a proposed environmental remediation plan at a
closed site, as discussed in Note 10. These losses were partially offset by a $5 million gain from the divestiture of a
collection and disposal business in our West Tier.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
During the year ended December 31, 2021, we recognized net gains of $16 million primarily consisting of
(i) a $35 million pre-tax gain from the recognition of cumulative translation adjustments on the divestiture of certain
non-strategic Canadian operations in our East Tier and (ii) an $8 million gain from divestitures of certain ancillary
operations within our Collection and Disposal businesses. These gains were partially offset by (i) a $20 million charge
pertaining to reserves for loss contingencies within Corporate and Other and (ii) $8 million of asset impairment charges
primarily related to our WM Renewable Energy segment.
See Note 2 for additional information related to the accounting policy and analysis involved in identifying and
calculating impairments. See Note 19 for additional information related to the impact of impairments on the results of
operations of our reportable segments.
Equity in Net Losses of Unconsolidated Entities
The losses for the reported years were primarily related to our noncontrolling interests in entities established to invest
in and manage low-income housing properties. We generate tax benefits, including tax credits, from the losses incurred
from these investments. The losses are more than offset by the tax benefits generated by these investments as further
discussed in Note 8. Refer to Notes 8 and 18 for additional information related to these investments. Refer to (Gain) Loss
from Divestitures, Asset Impairments and Unusual Items, Net above for more information on the impairment of an equity
method investment.
111
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12. Accumulated Other Comprehensive Income (Loss)
The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, which
is included as a component of WMI stockholders’ equity, are as follows (in millions, with amounts in parentheses
representing decreases to accumulated other comprehensive income):
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of tax expense (benefit) of $0,
$(2), $0 and $2, respectively . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
comprehensive (income) loss, net of tax (expense)
benefit of $3, $0, $0 and $0, respectively . . . . . . . . . . .
Net current period other comprehensive income (loss) . . . .
Balance, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of tax expense (benefit) of $0,
$(8), $0 and $0, respectively . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
comprehensive (income) loss, net of tax (expense)
benefit of $1, $0, $0 and $0, respectively . . . . . . . . . . .
Net current period other comprehensive income (loss) . . . .
Balance, December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) before
reclassifications, net of tax expense (benefit) of $5,
$(4), $0 and $2, respectively . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other
comprehensive (income) loss, net of tax (expense)
benefit of $(1), $0, $0 and $0, respectively . . . . . . . . . .
Net current period other comprehensive income (loss) . . . .
Balance, December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . .
Available-
for-Sale
Foreign
Currency
Translation
Post-
Retirement
Benefit
Derivative
Instruments Securities(a) Adjustments(b) Obligations Total
39
(1) $
— $
49 $
(9) $
$
—
(6)
7
5
6
9
9
— $
—
(6)
43 $
(35)
(28)
(29) $
(2)
3
3 $
(28)
(22)
17
—
(24)
(65)
1
(88)
3
3
3 $
—
(24)
19 $
—
(65)
(94) $
(1)
—
3 $
2
(86)
(69)
16
(11)
26
4
35
(2)
14
17 $
—
(11)
8 $
—
26
(68) $
(1)
3
6 $
(3)
32
(37)
$
$
$
(a) In 2023, we recognized a $23 million unrealized loss, net of a deferred tax benefit of $8 million, associated with our
investment in redeemable preferred stock due to the estimated fair value being less than the remaining carrying value.
(b) As a result of the divestiture of certain non-strategic Canadian operations in 2021, we reclassified $35 million of
cumulative foreign currency translation adjustments from accumulated other comprehensive income to (gain) loss
from divestitures, asset impairments and unusual items, net within our Consolidated Statement of Operations.
13. Capital Stock, Dividends and Common Stock Repurchase Program
Capital Stock
We have 1.5 billion shares of authorized common stock with a par value of $0.01 per common share. As of
December 31, 2023, we had 401.5 million shares of common stock issued and outstanding. The Board of Directors is
authorized to issue preferred stock in series, and with respect to each series, to fix its designation, relative rights (including
voting, dividend, conversion, sinking fund, and redemption rights), preferences (including dividends and liquidation) and
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
limitations. We have 10 million shares of authorized preferred stock, $0.01 par value, none of which is currently
outstanding.
Dividends
Our quarterly dividends have been declared by our Board of Directors. Cash dividends declared and paid were
$1,136 million in 2023, or $2.80 per common share, $1,077 million in 2022, or $2.60 per common share, and $970 million
in 2021, or $2.30 per common share.
In December 2023, we announced that our Board of Directors expects to increase the quarterly dividend from $0.70 to
$0.75 per share for dividends declared in 2024. However, all future dividend declarations are at the discretion of our Board
of Directors and depend on various factors, including our net earnings, financial condition, cash required for future
business plans, growth and acquisitions and other factors the Board of Directors may deem relevant.
Common Stock Repurchase Program
The Company repurchases shares of its common stock as part of capital allocation programs authorized by our Board
of Directors. Share repurchases are a part of our long-term strategy and incorporated into our overall capital allocation
plan to enhance our Company’s performance, in conjunction with our other uses of capital, and to return value to
stockholders in a tax-efficient manner. Share repurchases during the reported periods were completed through accelerated
share repurchase (“ASR”) agreements and, to a lesser extent, open market transactions. The terms of these ASR agreements
required that we deliver cash at the beginning of each ASR repurchase period. In exchange, we received a portion of the
total shares expected to be repurchased based on the then-current market price of our common stock. The remaining shares
repurchased over the course of each repurchase period are delivered to us once the repurchase period is complete. In the
table below, shares repurchased are measured and reported based on the period shares are delivered to us, which can differ
from the period cash is delivered to a repurchase agent for the value of such shares. The following is a summary of our
share repurchases under our common stock repurchase program for the year ended December 31:
Shares repurchased (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average price per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total repurchases (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023(a)
2022(b)
7,840
158.47 $
1,242 $
9,796
160.26
1,570
$
$
2021(c)
8,731
$ 146.61
1,280
$
(a) We executed and completed three ASR agreements during 2023 to repurchase $950 million of our common stock and
received 6.0 million shares in connection with these ASR agreements. Additionally, in October 2023, we executed an
ASR agreement to repurchase $300 million of our common stock. At the beginning of the repurchase period, we
delivered $300 million in cash and received 1.5 million shares based on a stock price of $161.38. The ASR agreement
completed in February 2024, at which time we received 0.2 million additional shares based on a final weighted average
price of $175.29.
We also repurchased an additional 0.3 million shares of our common stock in open market transactions in compliance
with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934 (“Exchange Act”) for $52 million,
inclusive of per-share commissions.
The IRA, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value
of certain stock repurchases made after December 31, 2022. We reflected the applicable excise tax in treasury stock
as part of the cost basis of the stock repurchased. The above discussion of our common stock repurchases in 2023 is
excluding the 1% excise tax.
(b) We executed and completed four ASR agreements during 2022 to repurchase $1.417 billion of our common stock and
received 8.8 million shares in connection with these ASR agreements. We also repurchased an additional 0.6 million
shares of our common stock in open market transactions in compliance with Rule 10b5-1 and Rule 10b-18 of the
113
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Exchange Act for $83 million, inclusive of per-share commissions. Shares repurchased in 2022 include 0.4 million
shares of our common stock for $70 million pursuant to our December 2021 ASR agreement that completed in January
2022.
(c) We executed and completed three ASR agreements during 2021 to repurchase $1.0 billion of our common stock and
received 7.0 million shares in connection with these ASR agreements. Additionally, in December 2021, we executed
an ASR agreement to repurchase $350 million of our common stock. At the beginning of the repurchase period, we
delivered $350 million in cash and received 1.7 million shares based on a stock price of $160.67. The ASR agreement
completed in January 2022, at which time we received 0.4 million additional shares based on a final weighted average
price of $160.33.
We announced in December 2023 that the Board of Directors has authorized up to $1.5 billion in future share
repurchases, excluding the 1% excise tax. This new authorization supersedes and replaces remaining authority under the
prior Board of Directors’ authorization for share repurchases announced in December 2022. The amount of future share
repurchases executed under our Board of Directors’ authorization is determined in management’s discretion, based on
various factors, including our net earnings, financial condition and cash required for future business plans, growth and
acquisitions.
14. Equity-Based Compensation
Employee Stock Purchase Plan
We have an Employee Stock Purchase Plan (“ESPP”) under which employees that have been employed for at least
30 days may purchase shares of our common stock at a discount. The plan provides for two offering periods for purchases:
January through June and July through December. At the end of each offering period, enrolled employees have purchased
shares of our common stock at a price equal to 85% of the lesser of the market value of the stock on the first and last day
of the applicable offering period. The ESPP was recently amended, and beginning in 2024, enrolled employees will
purchase shares of our common stock at a price equal to 85% of the market value on the last day of the applicable offering
period. The purchases are made at the end of an offering period with funds accumulated through payroll deductions over
the course of the offering period. Subject to limitations set forth in the plan and under IRS regulations, eligible employees
may elect to have up to 10% of their base pay deducted during the offering period. The total number of shares issued under
the plan for the offering periods in 2023, 2022 and 2021 was approximately 473,000, 455,000 and 513,000, respectively.
After the January 2024 issuance of shares associated with the July to December 2023 offering period, 1.8 million shares
remain available for issuance under the ESPP.
As a result of our ESPP, annual compensation expense increased by $14 million, or $11 million net of tax expense,
for 2023, $13 million, or $10 million net of tax expense, for 2022 and $12 million, or $9 million net of tax expense, for
2021.
Employee Stock Incentive Plans
In May 2023, our stockholders approved our 2023 Stock Incentive Plan (the “2023 Plan”) to replace our 2014 Stock
Incentive Plan (the “2014 Plan”). Upon approval of the 2023 Plan, no further awards could be granted under the 2014
Plan. Pursuant to the terms of the 2023 Plan, approximately 15.2 million shares of our common stock that were previously
available for issuance pursuant to future grants of awards under the 2014 Plan are now available for issuance under the
2023 Plan, in addition to any shares of our common stock that were subject to outstanding awards under the 2014 Plan
that subsequently cease to be subject to such awards as a result of the forfeiture, cancellation or termination. We did not
request that our stockholders approve any shares in addition to the shares that roll over from the 2014 Plan for issuance
pursuant to the 2023 Plan. As of December 31, 2023, approximately 14.3 million shares were available for future grants
under the 2023 Plan. Our equity-based compensation awards described herein have been made pursuant to our 2023 Plan
or our 2014 Plan, and certain employees hold vested unexercised stock options granted under our 2009 Stock Incentive
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Plan (together with the 2023 Plan and the 2014 Plan, the “Incentive Plans”). We currently utilize treasury shares to meet
the needs of our equity-based compensation programs.
Pursuant to the 2023 Plan, we can issue cash awards, stock options, stock appreciation rights, phantom stock and stock
awards, including restricted stock, restricted stock units (“RSUs”) and performance share units (“PSUs”). The terms and
conditions of equity awards granted under the Incentive Plans are determined by the Management Development and
Compensation Committee of our Board of Directors.
The 2023 annual stock incentive plan awards granted to the Company’s senior leadership team, which generally
includes the Company’s executive officers, included a combination of PSUs and stock options. Awards granted to other
eligible employees under the Incentive Plans included a combination of PSUs, RSUs and stock options in 2023. The
Company also periodically grants RSUs to employees working on key initiatives, in connection with new hires and
promotions and to field and corporate managers.
Restricted Stock Units — A summary of our RSUs is presented in the table below (units in thousands):
Unvested as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average
Per Share
Fair Value
Units
365 $
120 $
(97) $
(17) $
371 $
131.26
151.70
123.85
141.17
139.37
The total fair market value of RSUs that vested during the years ended December 31, 2023, 2022 and 2021 was
$15 million, $15 million and $12 million, respectively. During the year ended December 31, 2023, we issued
approximately 69,000 shares of common stock for these vested RSUs, net of approximately 27,000 units deferred or used
for payment of associated taxes.
RSUs may not be voted or sold by award recipients until time-based vesting restrictions have lapsed. RSUs primarily
provide for three-year cliff vesting and include dividend equivalents accumulated during the vesting period. Unvested
units are subject to forfeiture in the event of voluntary or for-cause termination. RSUs are generally subject to pro-rata
vesting upon an employee’s involuntary termination other than for cause and generally payout at the end of the three-year
vesting period and become immediately vested in the event of an employee’s death or disability.
Compensation expense associated with RSUs is measured based on the grant-date fair value of our common stock and
is recognized on a straight-line basis over the required employment period. RSUs generally continue to vest following a
qualifying retirement as if the employee had remained employed until the end of the vesting period, and compensation
expense for RSUs granted to retirement eligible employees is recognized over the longer of (i) the period between grant
date and the date that the recipient becomes retirement-eligible or (ii) the defined service requirement of the award.
Compensation expense is only recognized for those awards that we expect to vest, which we estimate based upon an
assessment of expected forfeitures.
Performance Share Units — Two types of PSUs are currently outstanding: (i) PSUs for which payout is dependent on
total shareholder return relative to the S&P 500 Index (“TSR PSUs”) and (ii) PSUs for which payout is dependent on the
Company’s performance against pre-established adjusted cash flow metrics (“Cash Flow PSUs”). Both types of PSUs are
payable in shares of common stock after the end of a three-year performance period, when the Company’s financial
performance for the entire performance period is reported, typically in the first half of the first quarter of the
succeeding year. At the end of the performance period, the number of shares awarded can range from 0% to 200% of the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
targeted amount, depending on the performance against the pre-established targets. A summary of our PSUs, at 100% of
the targeted amount, is presented in the table below (units in thousands):
Unvested as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average
Per Share
Fair Value
Units
864 $
316 $
(279) $
(20) $
881 $
147.00
163.80
153.34
157.83
150.77
The determination of achievement of performance results and corresponding vesting of PSUs for the three-year
performance period ended December 31, 2023 was performed by the Management Development and Compensation
Committee of our Board of Directors in February 2024. Accordingly, vesting information for such awards is not included
in the table above as of December 31, 2023. The “vested” PSUs are for the three-year performance period ended
December 31, 2022, as achievement of performance results and corresponding vesting was determined in January 2023.
The performance of the Company’s common stock for purposes of the TSR PSUs exceeded maximum performance
criteria, and the Company’s financial results, as measured for purposes of the Cash Flow PSUs, exceeded target
performance criteria. Accordingly, recipients of the PSU awards received a payout of 200% of the vested TSR PSUs and
150.21% of the vested Cash Flow PSUs. In February 2023, approximately 489,000 PSUs vested and we issued
approximately 322,000 shares of common stock for these vested PSUs, net of units deferred or used for payment of
associated taxes. The shares of common stock that were issued or deferred during the years ended December 31, 2023,
2022 and 2021 for prior PSU award grants had a fair market value of $74 million, $91 million and $74 million,
respectively.
PSUs have no voting rights. PSUs receive dividend equivalents that are paid out in cash based on the number of shares
that vest at the end of the awards’ performance period. Subject to attainment of the performance metrics described above,
PSUs are payable to an employee (or his beneficiary) upon death or disability as if that employee had remained employed
until the end of the performance period. PSUs are generally subject to pro-rata vesting upon an employee’s involuntary
termination other than for cause and are subject to forfeiture in the event of voluntary or for-cause termination. PSUs
generally continue to vest following a qualifying retirement as if the employee had remained employed until the end of
the performance period, and compensation expense for PSUs granted to retirement-eligible employees is accelerated over
the period that the recipient becomes retirement-eligible plus a defined service requirement.
Compensation expense associated with our Cash Flow PSUs is based on the grant-date fair value of our common
stock. Compensation expense is recognized ratably over the performance period based on our estimated achievement of
the established performance criteria. Compensation expense is only recognized for those awards that we expect to vest,
which we estimate based upon an assessment of both the probability that the performance criteria will be achieved and
expected forfeitures. The grant-date fair value of our TSR PSUs is based on a Monte Carlo valuation and compensation
expense is recognized on a straight-line basis over the vesting period. Compensation expense is recognized for all TSR
PSUs whether or not the market conditions are achieved less expected forfeitures.
Deferred Units — Certain employees can elect to defer some or all of the vested RSU or PSU awards for payout six
months after the employee leaves the Company. Deferred units are not invested, nor do they earn interest, but deferred
amounts do receive dividend equivalents paid in cash during deferral at the same time and at the same rate as dividends
on the Company’s common stock. Deferred amounts are paid out in shares of common stock at the end of the deferral
period. As of December 31, 2023, we had approximately 182,000 vested deferred units outstanding.
Stock Options — Stock option awards vest ratably in three annual increments, beginning on the first anniversary of
the date of grant. The exercise price of the options is the average of the high and low market value of our common stock
116
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
on the date of grant, and the options have a term of 10 years. A summary of our stock options is presented in the table
below (options in thousands):
Weighted Average
Per Share
Outstanding as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding as of December 31, 2023 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercisable as of December 31, 2023 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options
Exercise Price
101.22
150.12
89.32
136.56
111.22
96.67
2,923 $
437 $
(597) $
(34) $
2,729 $
1,819 $
(a) Includes approximately 83,000 stock options exercised pursuant to a written trading plan that provided for net share
settlement, resulting in the Company withholding approximately 70,000 shares of our common stock to cover the
associated stock option exercise price and taxes.
(b) Stock options outstanding as of December 31, 2023 have a weighted average remaining contractual term of 6.0 years
and an aggregate intrinsic value of $185 million based on the market value of our common stock on
December 31, 2023.
(c) Stock options exercisable as of December 31, 2023 have an aggregate intrinsic value of $150 million based on the
market value of our common stock on December 31, 2023.
During 2023, 2022 and 2021, we received cash proceeds of $44 million, $44 million and $66 million, respectively,
from the exercise of 597,000, 675,000 and 962,000 of employee stock options. The aggregate intrinsic value of stock
options exercised during 2023, 2022 and 2021 was $44 million, $51 million and $66 million, respectively.
Stock options exercisable as of December 31, 2023 were as follows (options in thousands):
Range of Exercise Prices
$41.37-$80.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$80.01-$120.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$120.01-$150.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$41.37-$150.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options Exercise Price
$
$
$
$
61.39
99.55
131.14
96.67
570
727
522
1,819
Weighted Average
Remaining Years
2.2
5.6
6.7
4.8
Weighted Average
Per Share
All unvested stock options shall become exercisable upon the award recipient’s death or disability. In the event of a
recipient’s qualifying retirement, stock options shall continue to vest pursuant to the original schedule set forth in the
award agreement. If the recipient is terminated by the Company without cause or voluntarily resigns, the recipient shall be
entitled to exercise all stock options outstanding and exercisable within a specified time frame after such termination. All
outstanding stock options, whether exercisable or not, are forfeited upon termination for cause.
We account for our employee stock options under the fair value method of accounting using a Black-Scholes valuation
model to measure stock option expense at the date of grant. The weighted average grant-date fair value of stock options
granted during the years ended December 31, 2023, 2022 and 2021 was $32.82, $26.44 and $17.25, respectively. The fair
value of stock options at the date of grant is amortized to expense over the vesting period less expected forfeitures, except
for stock options granted to retirement-eligible employees, for which expense is accelerated over the period that the
117
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
recipient becomes retirement-eligible. The following table presents the weighted average assumptions used to value
employee stock options granted during the year ended December 31 under the Black-Scholes valuation model:
Expected option life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
4.7 years
4.6 years
22.3 %
1.9 %
4.4 %
23.4 %
1.8 %
1.6 %
2021
4.7 years
23.2 %
2.1 %
0.6 %
The Company bases its expected option life on the expected exercise and termination behavior of its optionees and an
appropriate model of the Company’s future stock price. The expected volatility assumption is derived from the historical
volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of
the Company’s stock options, combined with other relevant factors including implied volatility in market-traded options
on the Company’s stock. The expected dividend yield is the annual rate of dividends per share over the exercise price of
the option as of the grant date.
For the years ended December 31, 2023, 2022 and 2021, we recognized $78 million, $71 million and $94 million,
respectively, of compensation expense associated with RSU, PSU and stock option awards as a component of selling,
general and administrative expenses in our Consolidated Statements of Operations. Our income tax expense for the years
ended December 31, 2023, 2022 and 2021 includes related income tax benefits of $15 million, $14 million and
$18 million, respectively. We have not capitalized any equity-based compensation costs during the reported periods.
As of December 31, 2023, we estimate that $44 million of currently unrecognized compensation expense will be
recognized over a weighted average period of 1.5 years for our unvested RSU, PSU and stock option awards issued and
outstanding.
Non-Employee Director Plan
Our non-employee directors receive annual grants of shares of our common stock, generally payable in two equal
installments, under the Incentive Plans described above. Each non-employee director is required to hold all shares issued
pursuant to a Company stock award, after the sale of shares necessary to cover applicable taxes, until retirement or other
termination of service as a director of the Company.
15. Earnings Per Share
Basic and diluted earnings per share were computed using the following common share data for the year ended
December 31 (shares in millions):
Number of common shares outstanding at end of period . . . . . . . . . . . . . . . . . . . . . . .
Effect of using weighted average common shares outstanding . . . . . . . . . . . . . . . .
Weighted average basic common shares outstanding. . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of equity-based compensation awards and other contingently
issuable shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average diluted common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . .
Potentially issuable shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of anti-dilutive potentially issuable shares excluded from diluted
2023
401.5
3.4
404.9
2.0
406.9
5.0
2022
407.9
4.9
412.8
2.2
415.0
5.2
2021
416.1
4.3
420.4
2.5
422.9
5.7
common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.0
1.1
0.6
Refer to the Consolidated Statements of Operations for net income attributable to Waste Management, Inc.
118
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
16. Fair Value Measurements
Assets and Liabilities Accounted for at Fair Value
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When measuring assets and liabilities that are required
to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company
would transact. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure
fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available
and significant to the fair value measurement:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices
for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that
market participants would use in pricing the asset or liability.
We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market
participants would use in pricing an asset or liability, including assumptions about risk when appropriate. Our assets and
liabilities that are measured at fair value on a recurring basis include the following as of December 31 (in millions):
Quoted prices in active markets (Level 1):
Cash equivalents and money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
327 $
61
Significant other observable inputs (Level 2):
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
431
Significant unobservable inputs (Level 3):
Redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
—
819 $
240
37
360
56
693
2023
2022
Cash Equivalents and Money Market Funds
Cash equivalents primarily include short-term interest-bearing instruments with maturities of three months or less.
We invest portions of our restricted trust funds in money market funds and we measure the fair value of these investments
using quoted prices in active markets for identical assets. The fair value of our cash equivalents and money market funds
approximates our cost basis in these instruments.
Equity Securities
We invest portions of our restricted trust funds in equity securities and we measure the fair value of these securities
using quoted prices in active markets for identical assets. Any changes in fair value of these securities related to unrealized
gains and losses have been appropriately reflected as a component of other income (expense).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Available-for-Sale Securities
Our available-for-sale securities include restricted trust funds and an investment in an unconsolidated entity, as
discussed in Note 18. We invest primarily in debt securities, including U.S. Treasury securities, U.S. agency securities,
municipal securities and mortgage- and asset-backed securities, which generally mature over the next ten years. We
measure the fair value of these securities using quoted prices for identical or similar assets in inactive markets. Any changes
in fair value of these trusts related to unrealized gains and losses have been appropriately reflected as a component of
accumulated other comprehensive income (loss).
Redeemable Preferred Stock
Redeemable preferred stock related to a noncontrolling investment in an unconsolidated entity and was included in
investments in unconsolidated entities in our Consolidated Balance Sheets. The fair value of our investment was measured
based on third-party investors’ recent or pending transactions in these securities, which were considered the best evidence
of fair value. When this evidence was not available, we used other valuation techniques as appropriate and available. These
valuation methodologies may have included transactions in similar instruments, discounted cash flow techniques,
third-party appraisals or industry multiples and public company comparable transactions. While we continue to hold this
investment, in 2023, we determined that the carrying value of the investment was fully impaired. This write-off resulted
in (i) a $25 million impairment charge to the income statement and (ii) the recognition of an additional $23 million
unrealized loss, net of a deferred tax benefit of $8 million, within Accumulated Other Comprehensive Income (Loss).
Refer to Notes 11 and 12 for additional information.
Fair Value of Debt
As of December 31, 2023 and 2022, the carrying value of our debt was $16.2 billion and $15.0 billion, respectively.
The estimated fair value of our debt was approximately $15.6 billion and $13.8 billion as of December 31, 2023 and 2022,
respectively.
Although we have determined the estimated fair value amounts using available market information and commonly
accepted valuation methodologies, considerable judgment is required in interpreting market data to develop the estimates
of fair value. Accordingly, our estimates are not necessarily indicative of the amounts that we, or holders of the instruments,
could realize in a current market exchange. The use of different assumptions or estimation methodologies could have a
material effect on the estimated fair values. The fair value estimates are based on Level 2 inputs of the fair value hierarchy
available as of December 31, 2023 and 2022. These amounts have not been revalued since those dates, and current
estimates of fair value could differ significantly from the amounts presented.
17. Acquisitions and Divestitures
Acquisitions
2023 Acquisitions
During the year ended December 31, 2023, we acquired 12 businesses, primarily related to our Collection and
Disposal businesses. Total consideration, net of cash acquired, for all acquisitions was $182 million, which included
$157 million in net cash paid and $25 million in non-cash consideration, primarily related to purchase price holdbacks. In
addition, we paid $13 million of holdbacks, of which $6 million related to prior year acquisitions.
Total consideration for our 2023 acquisitions was primarily allocated to $49 million of property and equipment,
$44 million of other intangible assets and $88 million of goodwill. Other intangible assets included $34 million of
customer relationships and $10 million of covenants not-to-compete.
120
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The goodwill related to our 2023 acquisitions was primarily a result of expected synergies from combining the acquired
businesses with our existing operations and substantially all was tax deductible.
2022 Acquisitions
During the year ended December 31, 2022, we acquired 13 businesses, including the acquisition of a controlling
interest in a business intended to allow us to deliver new recycling capabilities for our customers and provide circular
solutions for film and clear plastic wrap used commercially, such as plastic stretch wrap for pallets, furniture film, grocery
bags and potentially shrink wrap around food and beverage containers. Our other acquisitions in 2022 primarily related to
our Collection and Disposal businesses. Total consideration, net of cash acquired, for all acquisitions was $507 million,
which included $372 million in net cash paid and $135 million in non-cash consideration, primarily related to purchase
price holdbacks and the conversion of $67 million in secured convertible promissory notes receivable into equity of the
acquired business. In addition, we paid $5 million of holdbacks related to prior year acquisitions.
Total consideration for our 2022 acquisitions was primarily allocated to $138 million of property and equipment,
$64 million of other intangible assets, $325 million of goodwill and $14 million of noncontrolling interests. Other
intangible assets included $45 million of customer relationships and $19 million of covenants not-to-compete.
2021 Acquisitions
During the year ended December 31, 2021, we acquired 11 businesses primarily related to our Collection and Disposal
businesses. Total consideration, net of cash acquired, for all acquisitions was $94 million, which included $73 million in
net cash paid and $21 million of other consideration, primarily purchase price holdbacks and the settlement of a preexisting
promissory note with one of the acquired businesses. In addition, we paid $3 million of holdbacks, primarily related to
current year acquisitions.
Our 2021 acquisitions discussed above include our acquisition of the remaining ownership interest in a waste diversion
technology company. Concurrent with our acquisition, the acquired entity issued shares to an unrelated third-party, diluting
our ownership interest. We determined the entity constituted a variable interest entity and concluded that we did not have
the power to direct its significant activities. As a result, we subsequently deconsolidated the entity and account for our
remaining ownership interest as an equity method investment.
Divestitures
Proceeds from divestitures of businesses and other assets, net of cash divested, were $78 million, $27 million and
$96 million in 2023, 2022 and 2021, respectively. In 2023, our proceeds are primarily the result of the sale of certain
non-strategic assets. In 2021, our proceeds are primarily the result of the sale of certain non-strategic Canadian operations,
as discussed in Note 11.
18. Variable Interest Entities
The following is a description of our financial interests in unconsolidated and consolidated variable interest entities
that we consider significant:
Low-Income Housing Properties
We do not consolidate our investments in entities established to manage low-income housing properties because we
are not the primary beneficiary of these entities as we do not have the power to individually direct the activities of these
entities. Accordingly, we account for these investments under the equity method of accounting. Our aggregate investment
balance in these entities was $458 million and $321 million as of December 31, 2023 and 2022, respectively. The debt
121
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
balance related to our investments in low-income housing properties was $408 million and $295 million as of
December 31, 2023 and 2022, respectively. Additional information related to these investments is discussed in Note 8.
Trust Funds for Final Capping, Closure, Post-Closure or Environmental Remediation Obligations
Unconsolidated Variable Interest Entities — Trust funds that are established for both the benefit of the Company and
the host community in which we operate are not consolidated because we are not the primary beneficiary of these entities
as (i) we do not have the power to direct the significant activities of the trusts or (ii) power over the trusts’ significant
activities is shared. Our interests in these trusts are accounted for as investments in unconsolidated entities and receivables.
These amounts are recorded in other receivables, investments in unconsolidated entities and long-term other assets in our
Consolidated Balance Sheets, as appropriate. We also reflect our share of the unrealized gains and losses on
available-for-sale securities held by these trusts as a component of our accumulated other comprehensive income (loss).
Our investments and receivables related to these trusts had an aggregate carrying value of $104 million and $93 million as
of December 31, 2023 and 2022, respectively.
Consolidated Variable Interest Entities — Trust funds for which we are the sole beneficiary are consolidated because
we are the primary beneficiary. These trust funds are recorded in restricted funds in our Consolidated Balance Sheets.
Unrealized gains and losses on available-for-sale securities held by these trusts are recorded as a component of
accumulated other comprehensive income (loss). These trusts had a fair value of $119 million and $113 million as of
December 31, 2023 and 2022, respectively.
19. Segment and Related Information
To enhance transparency regarding our financial performance, highlight the strength and consistency of our core solid
waste businesses, and underscore our commitment to sustainability through planned and ongoing investments in our
Recycling Processing and Sales, as well as our WM Renewable Energy segment, beginning in the fourth quarter of 2023,
our senior management revised its segment reporting to (i) reflect the financial results of our collection, transfer, disposal
and resource recovery services businesses independently; (ii) combine the results of all recycling facilities from our East
and West Tier segments with our recycling brokerage and sales activities to form a newly created Recycling Processing
and Sales reportable segment and (iii) include our WM Renewable Energy business as a reportable segment. Accordingly,
our senior management now evaluates, oversees and manages the financial performance of our business through four
reportable segments, referred to as (i) East Tier; (ii) West Tier; (iii) Recycling Processing and Sales and
(iv) WM Renewable Energy. Our East Tier and West Tier, combined with certain “Other Ancillary” services that are not
managed through the 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 four reportable segments, which are
presented as Corporate and Other.
From time to time, our operating results are significantly affected by certain transactions or events that management
believes are not indicative or representative of our results. Refer to Note 11 for an explanation of certain transactions and
events affecting our operating results. Reclassifications have been made to our prior period consolidated financial
information to conform to the current year presentation.
Collection and Disposal
Our Collection and Disposal businesses provide integrated environmental services, including collection, transfer,
disposal and resource recovery services. We evaluate our Collection and Disposal businesses primarily through two
geographic segments, East Tier and West Tier. Our East Tier primarily consists of geographic areas located in the Eastern
U.S., the Great Lakes region and substantially all of Canada. Our West Tier primarily includes geographic areas located
in the Western U.S., including the upper Midwest region, and British Columbia, Canada. Additionally, we provide certain
ancillary services that are not managed through the Tier segments but that support our collection and disposal operations.
122
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Ancillary includes specialized services performed for customers that have differentiated needs. These specialized
services are targeted at large industrial customers managed through our Sustainability and Environmental Solutions
(“SES”) business or geographically dispersed customers managed through our Strategic Business Solutions (“WMSBS”)
business. Also included within Other Ancillary are the results of non-operating entities that provide financial assurance
and self-insurance support for our business, net of intercompany activity.
Included within our Collection and Disposal businesses are landfills having (i) 21 third-party power generating
facilities converting our landfill gas to fuel electricity generators; (ii) 14 third-party RNG facilities processing landfill gas
to be sold to natural gas suppliers and (iii) two third-party projects delivering our landfill gas by pipeline to industrial
customers as a direct substitute for fossil fuels in industrial processes. In return for providing our landfill gas, we receive
royalties from each facility, including the benefit of a 15% royalty from our WM Renewable Energy segment based on net
operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related environmental
attributes from the 83 landfill beneficial use renewable energy projects owned by WM Renewable Energy on our active
landfills, which is eliminated in consolidation.
Recycling Processing and Sales
Our Recycling Processing and Sales segment includes the processing and sales of materials collected from residential,
commercial and industrial customers. The materials are delivered to and processed at one of our many recycling facilities.
Through our brokerage business, we also manage the marketing of recycling commodities that are processed in our
facilities and by third parties by maintaining comprehensive service centers that continuously analyze market prices,
logistics, market demands and product quality. Our Recycling Processing and Sales segment excludes the collection of
recycled materials from our residential, commercial, and industrial customers which is included within our Collection and
Disposal businesses.
WM Renewable Energy
Our WM Renewable Energy segment develops, operates and promotes projects for the beneficial use of landfill gas.
Landfill gas is produced naturally as waste decomposes in a landfill. The methane component of the landfill gas is a readily
available, renewable energy source that can be gathered and used beneficially as an alternative to fossil fuel.
WM Renewable Energy converts landfill gas into several sources of renewable energy which include RNG, electricity and
capacity, heat and/or steam. WM Renewable Energy also generates RINs under the RFS program, other credits under a
variety of state programs associated with the use of RNG in our compressed natural gas fleet, and RECs associated with
the production of electricity. The RINs, RECs, and other credits are sold to counterparties who are obligated under the
regulatory programs and have a responsibility to procure RINs, RECs, and other credits proportionate to their fossil fuel
production and imports. RINs and RECs prices generally fluctuate in response to regulations enacted by the EPA or other
regulatory bodies, as well as changes in supply and demand.
As of December 31, 2023, we had 92 landfill gas beneficial use projects producing commercial quantities of methane
gas at owned or operated landfills. For 66 of these projects, the processed gas is used to fuel electricity generators. The
electricity is then sold to public utilities, municipal utilities or power cooperatives. For 20 of these projects, the gas is used
at the landfill or delivered by pipeline to industrial customers as a direct substitute for fossil fuels in industrial processes.
For six of these projects, the landfill gas is processed to pipeline quality RNG and then sold to natural gas suppliers. The
revenues from these facilities are primarily generated through the sale of RNG, RINs, electricity and capacity, RECs and
related environmental attributes. WM Renewable Energy is charged a 15% royalty on net operating revenue from these
facilities residing on our active and closed landfills from our Collection and Disposal, and Corporate and Other businesses,
which is eliminated in consolidation. Additionally, WM Renewable Energy operates and maintains 12 third-party landfill
beneficial gas use projects in return for service revenue. Our Collection and Disposal and Corporate and Other businesses
benefit from these projects as well as 32 additional third-party landfill beneficial gas use projects in the form of royalties.
123
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Corporate and Other
We also provide additional services that are not managed through our operating segments, which are presented in this
report as Corporate and Other as they do not meet the criteria to be aggregated with other operating segments and do not
meet the quantitative criteria to be separately reported. This includes the activities of our corporate office, including costs
associated with our long-term incentive program, expanded service offerings and solutions (such as our investments in
businesses and technologies that are designed to offer services and solutions ancillary or supplementary to our current
operations) as well as our closed sites. Also, included within our Corporate and Other businesses are closed sites that
include (i) five third-party power generating facilities converting our landfill gas to fuel electricity generators; (ii) one
third-party project delivering our landfill gas by pipeline to industrial customers as a direct substitute for fossil fuels in
industrial processes and (iii) one third-party RNG processing landfill gas to be sold to natural gas suppliers in return for a
royalty. Additionally, Corporate and Other benefits from a 15% royalty from our WM Renewable Energy segment based
on net operating revenue generated through the sale of RNG, RINs, electricity and capacity, RECs and related
environmental attributes from the nine landfill beneficial use renewable energy projects owned by WM Renewable Energy
on our closed sites, which is eliminated in consolidation.
Our chief operating decision maker (“CODM”) regularly reviews financial results, operating performance, and capital
expenditures of our Collection and Disposal businesses, Corporate and Other businesses, Recycling Processing and Sales
segment, and our WM Renewable Energy segment to assess performance and allocate resources. Summarized financial
information concerning our reportable segments as of December 31 and for the year then ended is shown in the following
table (in millions):
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WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Gross
Intercompany
Operating
Net
Operating
Revenues Revenues(b) Revenues Operations(c) Amortization
Operating
Income
from
Depreciation,
Depletion and Expenditures
Capital
Year Ended December 31:
2023
Collection and Disposal:
East Tier . . . . . . . . . . . . . . . . . . . . . . . $ 10,575
9,987
West Tier . . . . . . . . . . . . . . . . . . . . . . .
2,711
Other Ancillary . . . . . . . . . . . . . . . . .
23,273
Collection and Disposal . . . . . . . . .
1,576
Recycling Processing and Sales (a) . . . .
276
WM Renewable Energy . . . . . . . . . . . . .
51
Corporate and Other . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,176
2022
Collection and Disposal:
East Tier . . . . . . . . . . . . . . . . . . . . . . . $ 9,940
9,540
West Tier . . . . . . . . . . . . . . . . . . . . . . .
2,413
Other Ancillary . . . . . . . . . . . . . . . . .
21,893
Collection and Disposal . . . . . . . . .
1,760
Recycling Processing and Sales . . . . . .
315
WM Renewable Energy . . . . . . . . . . . . .
50
Corporate and Other . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,018
2021
Collection and Disposal:
East Tier . . . . . . . . . . . . . . . . . . . . . . . $ 8,922
8,703
West Tier . . . . . . . . . . . . . . . . . . . . . . .
2,041
Other Ancillary . . . . . . . . . . . . . . . . .
19,666
Collection and Disposal . . . . . . . . .
1,760
Recycling Processing and Sales . . . . . .
220
WM Renewable Energy . . . . . . . . . . . . .
47
Corporate and Other . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,693
$
$
$
$
$
$
(2,163) $ 8,412
7,935
(2,052)
2,518
(193)
18,865
(4,408)
1,264
(312)
273
(3)
24
(27)
(4,750) $ 20,426
(1,929) $ 8,011
7,614
(1,926)
2,218
(195)
17,843
(4,050)
1,516
(244)
312
(3)
27
(23)
(4,320) $ 19,698
(1,700) $ 7,222
6,987
(1,716)
1,890
(151)
16,099
(3,567)
1,528
(232)
276
56
28
(19)
(3,762) $ 17,931
$
$
$
$
$
$
2,446 $
2,383
(8)
4,821
(44)
79
(1,281)
3,575 $
986 $
800
26
1,812
110
33
116
2,071 $
2,178 $
2,182
—
4,360
128
132
(1,255)
3,365 $
977 $
814
25
1,816
92
33
97
2,038 $
1,955 $
1,939
(18)
3,876
217
108
(1,236)
2,965 $
945 $
821
27
1,793
93
35
78
1,999 $
(d)
926
899
28
1,853
450
420
115
2,838
948
774
40
1,762
453
290
304
2,809
598
469
50
1,117
221
116
585
2,039
(a) Included within income from operations for our Recycling Processing and Sales segment is a $168 million goodwill
impairment charge related to a business engaged in accelerating film and plastic wrap recycling capabilities, which
was partially offset by the recognition of $46 million of income related to the reversal of a liability for contingent
consideration associated with our investment in such business.
(b) Intercompany operating revenues reflect each segment’s total intercompany sales, including intercompany sales
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.
(c) For those items included in the determination of income from operations, the accounting policies of the segments are
the same as those described in Note 2.
125
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(d) Includes non-cash items. Capital expenditures and are reported in our reportable segments at the time they are recorded
within the segments’ property and equipment balances and, therefore, include timing differences for amounts accrued
but not yet paid.
Total assets by reportable segment as of December 31 are as follows (in millions):
Collection and Disposal:
East Tier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
West Tier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Ancillary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Elimination of intercompany investments and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets, per Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14,328 $
11,322
783
26,433
2,282
1,077
3,392
(361)
32,823 $
14,194
11,134
686
26,014
1,918
693
3,052
(310)
31,367
2023
2022
126
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The mix of operating revenues from our major lines of business for the year ended December 31 are as follows
(in millions):
Gross
Operating
Revenues
Intercompany
Operating
Revenues
Net
Operating
Revenues
Years Ended December 31:
2023
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Landfill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Collection and Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recycling Processing and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
WM Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
5,801
3,836
3,474
3,006
16,117
4,863
2,293
23,273
1,576
276
51
25,176
5,450
3,681
3,339
2,683
15,153
4,597
2,143
21,893
1,760
315
50
24,018
4,759
3,210
3,181
2,309
13,459
4,184
2,023
19,666
1,760
220
47
21,693
$
$
$
$
$
$
(692) $
(753)
(96)
(220)
(1,761)
(1,611)
(1,036)
(4,408)
(312)
(3)
(27)
(4,750) $
(590) $
(656)
(75)
(217)
(1,538)
(1,535)
(977)
(4,050)
(244)
(3)
(23)
(4,320) $
(476) $
(524)
(36)
(179)
(1,215)
(1,434)
(918)
(3,567)
(232)
56
(19)
(3,762) $
5,109
3,083
3,378
2,786
14,356
3,252
1,257
18,865
1,264
273
24
20,426
4,860
3,025
3,264
2,466
13,615
3,062
1,166
17,843
1,516
312
27
19,698
4,283
2,686
3,145
2,130
12,244
2,750
1,105
16,099
1,528
276
28
17,931
127
WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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. While weather-related
and other event-driven special projects can boost revenues through additional work for a limited time, due to significant
start-up costs and other factors, such revenue can generate earnings at comparatively lower margins.
Net operating revenues relating to operations for the year ended December 31 are as follows (in millions):
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023
2022
$ 19,595 $ 18,860
838
—
$ 20,426 $ 19,698
813
18
2021
$ 17,136
795
—
$ 17,931
(a) Primarily related to recently acquired smaller recycling-related operations in the Netherlands.
Property and equipment, net of accumulated depreciation and depletion, relating to operations as of December 31 are
as follows (in millions):
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,903
1,060
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,968
2023
2022
$ 14,721
994
4
$ 15,719
128
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Effectiveness of Disclosure Controls and Procedures
Our management, with the participation of our principal executive and financial officers, has evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended) in ensuring that the information required to be disclosed in reports that we file or
submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and
communicated to management (including the principal executive and financial officers) as appropriate to allow timely
decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have
concluded that such disclosure controls and procedures were effective as of December 31, 2023 (the end of the period
covered by this Annual Report on Form 10-K) at a reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Management of the Company, including the principal executive and financial officers, is responsible for establishing
and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the
Securities Exchange Act of 1934, as amended. Our management conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the 2013 framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Our internal controls
are designed to provide reasonable assurance as to the reliability of our financial reporting and the preparation of the
consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the
United States and includes those policies and procedures that:
i. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and directors of the Company;
and
iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management of the Company assessed the effectiveness of our internal control over financial reporting as of
December 31, 2023 based on the 2013 framework in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the COSO criteria). Based on this assessment, management has
concluded that our internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, the
independent registered public accounting firm that audited our consolidated financial statements, as stated in their report,
which is included in Item 8 of this Annual Report on Form 10-K.
129
Changes in Internal Control over Financial Reporting
Management, together with our CEO and CFO, evaluated the changes in our internal control over financial reporting
during the quarter ended December 31, 2023. We determined that there were no changes in our internal control over
financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Securities Trading Plans of Directors and Executive Officers
On October 30, 2023, James C. Fish, Jr., President, Chief Executive Officer and member of our Board of Directors,
adopted a stock trading plan (the “Fish Trading Plan”). The Fish Trading Plan went into effect on the date of adoption and
was not intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Fish Trading Plan
provided for the potential exercise of 83,419 vested stock options and instructed that, upon our common stock reaching a
specified market price on or before December 7, 2023, the options would automatically be exercised and the Company
would withhold shares of common stock necessary to cover tax requirements and the exercise price of such options. The
Fish Trading Plan provided that Mr. Fish would continue to hold all remaining shares of common stock resulting from the
option exercise after the net share settlement process.
On November 21, 2023, Mr. Rafael Carrasco, Senior Vice President, Enterprise Strategy, adopted a stock trading plan
(the “Carrasco Trading Plan”) intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The
Carrasco Trading Plan will commence on February 20, 2024 and will automatically terminate on the earlier of
February 20, 2025 and the completion of all of the contemplated transactions set forth therein. The Carrasco Trading Plan
provides for the potential cashless exercise of two stock option awards totaling 4,207 stock options, upon our common
stock reaching a specified market price, pursuant to which shares of common stock will be sold to cover option costs, tax
obligations, commissions and fees; Mr. Carrasco will then continue to hold all remaining shares of common stock resulting
from the option exercise after the settlement.
On November 21, 2023, Ms. Devina Rankin, Executive Vice President and Chief Financial Officer, adopted a stock
trading plan (the “Rankin Trading Plan”) intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange
Act. The Rankin Trading Plan will commence on February 20, 2024 and will automatically terminate on the earlier of
February 20, 2025 and the completion of all of the contemplated transactions set forth therein. The Rankin Trading Plan
provides for the potential sale of 50% of net after-tax shares of our common stock received from the payout of performance
share unit (“PSU”) equity compensation awards, for the performance period ended December 31, 2023, upon our common
stock reaching a specified market price. Ms. Rankin received a target grant of 14,736 PSU awards with a performance
period ended December 31, 2023; the number of shares to be paid out to Ms. Rankin on account of these PSU awards can
range from zero to 200% of the initial target grant. As a result, the number of shares of common stock to potentially be
sold pursuant to the Rankin Trading Plan will be determined in the first quarter of 2024 based on certification by the
Management Development and Compensation Committee of the Board of Directors of the Company’s achievement
relative to applicable performance measures for the underlying PSU awards.
On December 1, 2023, Mr. Fish adopted a stock trading plan (the “Second Fish Trading Plan”) intended to satisfy the
affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Second Fish Trading Plan will commence on
March 1, 2024 and will automatically terminate on the earlier of February 20, 2025 and the completion of all of the
contemplated transactions set forth therein. The Second Fish Trading Plan provides for (a) the potential sale of up to 19,100
shares of our common stock upon our common stock reaching specified market prices and (b) the potential sale of 50% of
net after-tax shares of our common stock received from the payout of PSU equity compensation awards for the performance
period ended December 31, 2023, upon our common stock reaching a specified market price. Mr. Fish received a target
grant of 59,650 PSU awards with a performance period ended December 31, 2023; the number of shares to be paid out to
Mr. Fish on account of these PSU awards can range from zero to 200% of the initial target grant. As a result, as described
above in connection with the Rankin Trading Plan, the number of shares of common stock to potentially be sold pursuant
to the Second Fish Trading Plan will be determined in the first quarter of 2024.
130
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted a code of ethics that applies to our CEO, CFO and Chief Accounting Officer, as well as other
officers, directors and employees of the Company. The code of ethics, entitled “Code of Conduct,” is available on-line at
investors.wm.com in the tab “ESG — Corporate Governance” (https://investors.wm.com/esg-practices/governance). We
intend to post any amendments to the Code of Conduct that apply to our officers and directors, and any required disclosure
of waivers from the Code of Conduct, to the “ESG – Corporate Governance” tab at investors.wm.com.
All other information required by this Item will be included in the Company’s definitive proxy statement for its 2024
Annual Meeting of Stockholders (the “2024 Proxy Statement”) to be filed with SEC within 120 days of the end of our
fiscal year and is incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by
reference.
Item 14. Principal Accounting Fees and Services.
The information required by this Item will be included in the 2024 Proxy Statement and is incorporated herein by
reference.
Item 15. Exhibits, Financial Statement Schedules.
(a) (1) Consolidated Financial Statements:
PART IV
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
(a) (2) Consolidated Financial Statement Schedules:
131
All schedules have been omitted because the required information is not significant or is included in the financial
statements or notes thereto, or is not applicable.
(a) (3) Exhibits:
Exhibit No.
3.1
3.2
4.1
4.2
4.3
4.4
4.5
— Third Restated Certificate of Incorporation of Waste Management, Inc. [incorporated by reference to
Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 2010].
— Amended and Restated By-laws of Waste Management, Inc. [incorporated by reference to Exhibit 3.2
to Form 8-K dated November 6, 2023].
— Specimen Stock Certificate [incorporated by reference to Exhibit 4.1 to Form 10-K for the year ended
Description
December 31, 1998].
— Third Restated Certificate of Incorporation of Waste Management Holdings, Inc. [incorporated by
reference to Exhibit 4.2 to Form 10-K for the year ended December 31, 2014].
— Amended and Restated By-laws of Waste Management Holdings, Inc. [incorporated by reference to
Exhibit 4.3 to Form 10-Q for the quarter ended June 30, 2014].
— Indenture for Subordinated Debt Securities dated February 1, 1997, among the Registrant and The Bank
of New York Mellon Trust Company, N.A. (the current successor to Texas Commerce Bank National
Association), as trustee [incorporated by reference to Exhibit 4.1 to Form 8-K dated February 7, 1997].
— Indenture for Senior Debt Securities dated September 10, 1997, among the Registrant and The Bank of
New York Mellon Trust Company, N.A. (the current successor to Texas Commerce Bank National
Association), as trustee [incorporated by reference to Exhibit 4.1 to Form 8-K dated September 10,
1997].
4.6
— Description of Waste Management, Inc.’s Common Stock [incorporated by reference to Exhibit 4.9 to
Form 10-K for the year ended December 31, 2019].
4.7*
— Schedule of Officers’ Certificates delivered pursuant to Section 301 of the Indenture dated
September 10, 1997 establishing the terms and form of Waste Management, Inc.’s Senior Notes. Waste
Management and its subsidiaries are parties to debt instruments that have not been filed with the SEC
under which the total amount of securities authorized under any single instrument does not exceed 10%
of the total assets of Waste Management and its subsidiaries on a consolidated basis. Pursuant to
paragraph 4(iii)(A) of Item 601(b) of Regulation S-K, Waste Management agrees to furnish a copy of
such instruments to the SEC upon request.
4.8
— Officers’ Certificate delivered pursuant to Section 301 of the Indenture dated September 10, 1997
establishing the terms and form of the 4.875% Senior Notes due 2029 [incorporated by reference to
Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2023].
— Guarantee Agreement by Waste Management Holdings, Inc. in favor of The Bank of New York Mellon
Trust Company, N.A., as Trustee for the holders of the 4.875% Senior Notes due 2029 [incorporated by
reference to Exhibit 4.3 to Form 10-Q for the quarter ended September 30, 2023].
— 2023 Stock Incentive Plan [incorporated by reference to Exhibit 10.1 to Form 8-K dated May 9, 2023].
— 2014 Stock Incentive Plan [incorporated by reference to Exhibit 10.1 to Form 8-K dated May 13, 2014].
— First Amendment to 2014 Stock Incentive Plan [incorporated by reference to Exhibit 10.2 to Form 8-K
4.9
10.1†
10.2†
10.3†
dated May 12, 2020].
10.4†
— Second Amendment to 2014 Stock Incentive Plan [incorporated by reference to Exhibit 10.3 to Form
10-Q for the quarter ended June 30, 2022].
10.5†
— 2009 Stock Incentive Plan [incorporated by reference to Appendix B to the Proxy Statement on
Schedule 14A filed March 25, 2009].
10.6†
— 2005 Annual Incentive Plan [incorporated by reference to Appendix D to the Proxy Statement on
Schedule 14A filed April 8, 2004].
10.7†
— Waste Management, Inc. Employee Stock Purchase Plan (As Amended and Restated effective May 12,
2020) [incorporated by reference to Exhibit 10.1 to Form 8-K dated May 12, 2020].
10.8†* — First Amendment to the Waste Management, Inc. Employee Stock Purchase Plan.
10.9†
— Waste Management, Inc. 409A Deferral Savings Plan as Amended and Restated effective January 1,
2014 [incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2014].
132
10.10
— $3.5 Billion Sixth Amended and Restated Revolving Credit Agreement dated as of May 27, 2022 by
10.11
10.12
and among Waste Management, Inc., Waste Management of Canada Corporation, WM Quebec Inc. and
Waste Management Holdings, Inc., certain banks party thereto, and Bank of America, N.A., as
administrative agent [incorporated by reference to Exhibit 10.1 to Form 8-K dated May 27, 2022].
— Commercial Paper Dealer Agreement, substantially in the form as executed with each of Mizuho
Securities USA LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, MUFG Securities Americas
Inc., Wells Fargo Securities, LLC, RBC Capital Markets, LLC, Siebert Williams Shank & Co., LLC,
and Barclays Capital Inc. as Dealer [incorporated by reference to Exhibit 10.11 to Form 10-K for
the year ended December 31, 2016].
— Commercial Paper Issuing and Paying Agent Agreement between Waste Management, Inc. and U.S.
Bank Trust Company, National Association dated October 28, 2022. [incorporated by reference to
Exhibit 10.11 to Form 10-K for the year ended December 31, 2022].
10.13† — First Amended and Restated Employment Agreement between USA Waste-Management Resources,
LLC and James C. Fish, Jr. dated December 22, 2017 [incorporated by reference to Exhibit 10.2 to
Form 8-K dated December 22, 2017].
10.14†* — Compensation Relinquishment Agreement between USA Waste-Management Resources, LLC and
James C. Fish, Jr.
10.15†* — First Amendment to Compensation Relinquishment Agreement between USA Waste-Management
Resources, LLC and James C. Fish, Jr.
10.16† — Employment Agreement between USA Waste-Management Resources, LLC and Devina A. Rankin
dated December 22, 2017 [incorporated by reference to Exhibit 10.3 to Form 8-K dated December 22,
2017].
10.17† — First Amended and Restated Employment Agreement between USA Waste-Management Resources,
LLC and John J. Morris, Jr. [incorporated by reference to Exhibit 10.4 to Form 8-K dated December 22,
2017].
10.18† — Employment Agreement between USA Waste-Management Resources, LLC and Charles C. Boettcher
dated December 22, 2017 [incorporated by reference to Exhibit 10.23 to Form 10-K for the year ended
December 31, 2017].
10.19† — Form of Director and Executive Officer Indemnity Agreement [incorporated by reference to
Exhibit 10.43 to Form 10-K for the year ended December 31, 2012].
10.20† — Waste Management Holdings, Inc. Executive Severance Plan [incorporated by reference to Exhibit 10.1
to Form 8-K dated December 22, 2017].
10.21† — Form of 2021 Long Term Incentive Compensation Award Agreement for Senior Leadership Team
[incorporated by reference to Exhibit 10.1 to Form 8-K dated February 23, 2021].
10.22† — Form of 2021 Long Term Incentive Compensation RSU Award Agreement [incorporated by reference
to Exhibit 10.19 to Form 10-K for the year ended December 31, 2021].
10.23† — Form of 2022 Long Term Incentive Compensation Award Agreement for Senior Leadership Team
[incorporated by reference to Exhibit 10.1 to Form 8-K dated March 1, 2022].
10.24† — Form of 2022 Long Term Incentive Compensation RSU Award Agreement [incorporated by reference
to Exhibit 10.2 to Form 8-K dated March 1, 2022].
10.25† — Form of 2023 Long Term Incentive Compensation Award Agreement for Senior Leadership Team
[incorporated by reference to Exhibit 10.1 to Form 8-K dated March 7, 2023].
21.1*
22.1*
23.1*
31.1*
— Subsidiaries of the Registrant.
— Guarantor Subsidiary.
— Consent of Independent Registered Public Accounting Firm.
— Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 of
James C. Fish, Jr., President and Chief Executive Officer.
31.2*
— Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 of
Devina A. Rankin, Executive Vice President and Chief Financial Officer.
32.1** — Certification Pursuant to 18 U.S.C. §1350 of James C. Fish, Jr., President and Chief Executive Officer.
32.2** — Certification Pursuant to 18 U.S.C. §1350 of Devina A. Rankin, Executive Vice President and Chief
Financial Officer.
95*
97*
101.INS* — Inline XBRL Instance.
— Mine Safety Disclosures.
— Waste Management, Inc. Clawback Policy.
133
101.SCH* — Inline XBRL Taxonomy Extension Schema.
101.CAL* — Inline XBRL Taxonomy Extension Calculation.
101.LAB* — Inline XBRL Taxonomy Extension Labels.
101.PRE* — Inline XBRL Taxonomy Extension Presentation.
101.DEF* — Inline XBRL Taxonomy Extension Definition.
104*
— Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith.
** Furnished herewith.
† Denotes management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary.
None.
134
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
WASTE MANAGEMENT, INC.
By:
/s/ JAMES C. FISH, JR.
James C. Fish, Jr.
President, Chief Executive Officer and Director
Date: February 13, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ JAMES C. FISH, JR.
James C. Fish, Jr.
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 13, 2024
/s/ DEVINA A. RANKIN
Devina A. Rankin
/s/ JOHN CARROLL
John Carroll
/s/ BRUCE E. CHINN
Bruce E. Chinn
/s/ ANDRÉS R. GLUSKI
Andrés R. Gluski
/s/ VICTORIA M. HOLT
Victoria M. Holt
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
February 13, 2024
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 13, 2024
Director
Director
Director
February 13, 2024
February 13, 2024
February 13, 2024
/s/ KATHLEEN M. MAZZARELLA
Kathleen M. Mazzarella
Chairman of the Board and Director
February 13, 2024
/s/ SEAN E. MENKE
Sean E. Menke
/s/ WILLIAM B. PLUMMER
William B. Plummer
/s/ JOHN C. POPE
John C. Pope
/s/ MARYROSE T. SYLVESTER
Maryrose T. Sylvester
Director
Director
Director
Director
135
February 13, 2024
February 13, 2024
February 13, 2024
February 13, 2024
Corporate Information
BOARD OF DIRECTORS
OFFICERS
THOMAS L. BENÉ (C)
President and Chief Executive Officer
Breakthru Beverage Group, LLC
BRUCE E. CHINN (A)
Former President and Chief Executive Officer
Chevron Phillips Chemical Company LLC
JAMES C. FISH, JR.
President and Chief Executive Officer
Waste Management, Inc.
ANDRÉS R. GLUSKI (A, C)
President and Chief Executive Officer
The AES Corporation
VICTORIA M. HOLT (A, N)
Former President and Chief Executive Officer
Proto Labs, Inc.
KATHLEEN M. MAZZARELLA (A, C, N)
Non-Executive Chair of the Board
Chairman, President and
Chief Executive Officer
Graybar Electric Company, Inc.
SEAN E. MENKE (A, N)
Executive Chairman
Sabre Corporation
WILLIAM B. PLUMMER (A, C)
Former Executive Vice President
and Chief Financial Officer
United Rentals, Inc.
JOHN C. POPE (C, N)
Chief Executive Officer and Chairman
PFI Group
MARYROSE T. SYLVESTER (C, N)
Former U.S. Managing Director
and U.S. Head of Electrification
ABB Ltd.
(A) Audit Committee
(C) Management Development and
Compensation Committee
(N) Nominating and Governance
Committee
JAMES C. FISH, JR.
President and Chief Executive Officer
CHARLES C. BOETTCHER
Executive Vice President, Corporate
Development and Chief Legal Officer
CORPORATE HEADQUARTERS
Waste Management, Inc.
800 Capitol Street, Suite 3000
Houston, Texas 77002
Telephone: (713) 512-6200
Facsimile: (713) 512-6299
RAFAEL E. CARRASCO
Senior Vice President, Enterprise Strategy
WEB SITE
www.wm.com
CHRISTOPHER P. DESANTIS
Senior Vice President, Operations
TARA J. HEMMER
Senior Vice President and Chief
Sustainability Officer
JOHN J. MORRIS, JR.
Executive Vice President and
Chief Operating Officer
DEVINA A. RANKIN
Executive Vice President and
Chief Financial Officer
KELLY C. ROONEY
Senior Vice President,
Chief Human Resources and
Diversity & Inclusion Officer
DONALD J. SMITH
Senior Vice President, Operations
JOHNSON VARKEY
Senior Vice President and
Chief Information Officer
MICHAEL J. WATSON
Senior Vice President and
Chief Customer Officer
JEFF R. BENNETT
Assistant Treasurer
JOHN A. CARROLL
Vice President and
Chief Accounting Officer
MARK A. LOCKETT
Vice President, Tax
LESLIE K. NAGY
Vice President and
Treasurer
CHARLES S. SCHWAGER
Vice President and
Chief Compliance and Ethics Officer
COURTNEY A. TIPPY
Vice President and Corporate Secretary
INVESTOR RELATIONS
Security analysts, investment professionals,
and shareholders should direct inquiries to
Investor Relations at the corporate address
or call (713) 265-1656.
ANNUAL MEETING
The annual meeting of the stockholders of the
Company is scheduled to be held at 10:30 a.m. CT
May 14, 2024 at the offices of:
Waste Management, Inc.
800 Capitol Street, Suite 3000
Houston, Texas 77002
INDEPENDENT AUDITORS
Ernst & Young LLP
5 Houston Center
1401 McKinney Street, Suite 2400
Houston, Texas 77010
(713) 750-1500
COMPANY STOCK
The Company’s common stock is traded on
the New York Stock Exchange (NYSE)
under the symbol “WM.” The number of
holders of record of common stock based on
the transfer records of the Company at
March 8, 2024 was 7,469. Based on security
position listings, the Company believes that,
as of March 12, 2024, it had approximately
1,459,343 beneficial owners.
TRANSFER AGENT AND REGISTRAR
Computershare
Shareholder Services: (800) 969-1190
Shareholder Services - International: +1 (201) 680-6578
P. O. Box 43006
Providence, Rhode Island 02940
Overnight Delivery:
150 Royall Street, Suite 101
Canton, Massachusetts 02021
800 Capitol Street - Suite 3000 - Houston, Texas 77002
www.wm.com