Waste Management — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue was $6,846 million for the three months ended September 30, 2026, representing a 6.3% increase from $6,443 million in the prior year period.
• Income from operations was $1,279 million (reported) and $1,329 million (adjusted), compared to $989 million (reported) and $1,241 million (adjusted) in the prior year.
• Operating EBITDA was $2,071 million (reported) and $2,121 million (adjusted), compared to $1,753 million (reported) and $2,005 million (adjusted) in the prior year.
• Adjusted operating EBITDA margin was 31.0%, down 10 basis points from 31.1% in the prior year.
• Net income was $820 million (reported) and $858 million (adjusted), compared to $603 million (reported) and $801 million (adjusted) in the prior year.
• Diluted EPS was $2.05 (reported) and $2.15 (adjusted), compared to $1.49 (reported) and $1.98 (adjusted) in the prior year.
• Net cash provided by operating activities for the first nine months of 2026 was $4.87 billion, a 12.0% increase from the prior year.
• Free cash flow for the first nine months of 2026 was $3.01 billion, a 42% increase from $2.11 billion in the prior year period.
• Operating expenses were 59.8% of revenue, compared to 58.9% in the prior year.
• SG&A expenses were 9.6% of revenue (9.3% adjusted), an improvement of 70 basis points from the prior year.

Guidance and Future Outlook:

• The Company affirmed its 2026 guidance ranges.
• Full-year 2026 revenue is expected to be at the high end of the range of $26.275 billion to $26.475 billion.
• Full-year 2026 adjusted operating EBITDA is expected to be within the range of $8.15 billion to $8.25 billion.
• Full-year 2026 free cash flow is expected to be at the high end of the range of $3.75 billion to $3.85 billion.
• The Company expects to repurchase a total of $2 billion of shares in 2026.

Business Segments and Product Lines:

• Healthcare Solutions revenue grew 3.7% in the quarter, and operating EBITDA increased more than 30%, driven by cost management, synergy capture, and pricing growth.
• Collection and Disposal volume declined 0.4% (0.5% on a workday adjusted basis) due to the intentional shedding of lower-margin residential business and commercial declines from prior national account broker losses.
• Collection and Disposal revenue growth was driven by a core price increase of 5.8% and a yield increase of 3.4%.
• Recycling and renewable energy businesses saw higher volumes due to completed growth projects.
• A new renewable natural gas facility began operations in New York, marking the eighteenth new facility completed since 2022.
• Blended average price for single stream recycled commodities was approximately $82 per ton in the quarter, compared to $68 per ton in the prior year.
• Average price for Renewable Fuel Standard credits was $2.32 in the quarter, compared to $2.56 in the prior year.
• Average price for natural gas was $2.56 per MMBtu in the quarter, compared to $2.46 per MMBtu in the prior year.
• Average price for electricity was about $78 per megawatt hour in the quarter, compared to $73 per megawatt hour in the prior year.

Market and Competitive Landscape:

• The Company is North America's leading provider of comprehensive environmental solutions with the largest disposal network, collection fleet, and recycler.
• The Company holds the largest heavy-duty natural gas truck fleet in the industry.

Risks and Challenges:

• Operating efficiency in Collection and Disposal improved by 40 basis points but was offset by dilutive impacts of 130 basis points related to higher fuel costs and increased risk management costs.
• Forward-looking statements note risks including failure to integrate acquisitions (specifically Stericycle), environmental regulations, landfill capacity constraints, labor costs, severe weather, and commodity price fluctuations.

Management Commentary and Tone:

• CEO Jim Fish stated the quarter delivered solid operating and financial performance in line with expectations, underscoring consistent strategy execution.
• Management highlighted a strong price-to-cost spread in Collection and Disposal and growing contributions from healthcare and sustainability businesses.
• Management noted the quality of earnings is evident in the strength of cash flow generation and disciplined operational execution.

Other Key Points:

• The Company returned $957 million to shareholders during the third quarter, consisting of $580 million in share repurchases and $377 million in cash dividends.
• Returns to shareholders totaled more than $2.72 billion in the first nine months of 2026, representing more than 90% of free cash flow generated during the period.
• The Company repurchased $1.58 billion of its shares through the first nine months of 2026.
• Landfill accretion expense was moved from operating expenses to depreciation, depletion, amortization, and accretion beginning in 2026; 2025 results were updated for comparability.
• The three months ended September 30, 2026, included an $18 million impairment charge related to accelerating the closure of a landfill in the East Tier.
• The three months ended September 30, 2025, included a $152 million impairment charge for suspending business operations, a $45 million landfill closure charge, and an $11 million contract termination payment.