Waste Management, Inc.

Industry regulation · Licensing and permits

We may be unable to obtain or maintain required permits for our operations 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.

Tax and financial reporting · Tax compliance and changes in tax law

Changes to applicable tax laws and regulation or interpretation thereof or the imposition of new or increased taxes may increase our tax liabilities and could adversely affect our operating results and cash flows.

Legal and litigation · Employment and labor law compliance

Actions that have been filed against us, and that may be filed against us in the future, include federal and state wage and hour and other laws. The timing of the final resolutions to these types of matters is often uncertain.

Market position and competition · Pricing pressure and margin compression

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.

Customer and revenue · Customer concentration and key customer dependence

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.

Strategic execution · Strategic transformation and turnaround 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.

Customer and revenue · Reimbursement and pricing pressure healthcare or insurance

Reduction in volumes of medical waste, controlled substances wastes, and personal and confidential information, and changing conditions in the healthcare industry could adversely affect our financial results. Healthcare providers are focused on cutting costs within their businesses. These changes and consolidation of the customer base increase the competitive nature of the healthcare waste industry and exert downward pricing pressure.

Supply chain and procurement · Geographic concentration of suppliers

Geopolitical conflicts and the resulting international responses may also exacerbate market disruption, leading to volatility in commodity prices, impacts on the availability and cost of energy, increased cyberattacks, and vendor and supplier disruptions across the global supply chain.

Supply chain and procurement · Transportation and logistics disruption

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.

Economic and market conditions · Consumer spending and confidence

General economic conditions and consumer trends can directly and adversely affect revenues for our services, our income from operations margins and our overall financial results. Our business is directly affected by changes in consumer trends and economic factors that are outside of our control, including consumer preferences and priorities, consumer confidence, inflation, interest rates and access to capital markets.

Geopolitical and trade · Regulatory and policy uncertainty

Focus on, and regulation of, sustainability performance and disclosure can result in increased costs, risk of noncompliance, damage to our reputation and related adverse effects. The nature, scope, and complexity of matters that our Company must assess, quantify and disclose are expanding due to current, proposed, and recently enacted governmental reporting requirements.

Natural and catastrophic events · Natural disasters and extreme weather

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.

Geopolitical and trade · Trade policies tariffs and sanctions

Significant restrictions and tariffs on foreign trade have a negative impact on our recycling export business and our cross-border commerce, particularly with Canada, decrease paper mills' demand for recycled corrugated cardboard used in packaging and increase the cost of certain equipment and other materials used in our operations.

Social and demographic · Public perception and reputation

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.

Cybersecurity and data protection · Third party data security and vendors

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. Data security measures that our third-party service providers have implemented may not be effective against all current or future security threats.

Technology infrastructure · Cloud services and data center operations

Systems that increase our utilization of, and dependency on, third-party cloud computing services and digital platforms also increase various technology risks, including potential exposure to cyber incidents, loss of data, fraud, internal control challenges and other disruptions.

Digital transformation and innovation · Technology implementation and upgrades

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.

Capital structure and performance · Debt management and refinancing

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.

Credit and liquidity · Banking relationships and credit facilities

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.

Reputation and brand · Brand damage and negative publicity

If we encounter regulatory compliance issues in the course of operating our business, we may experience adverse publicity, which may intensify if such noncompliance results in legal liability. Any legal liability or adverse publicity from such noncompliance may harm our reputation.