WASTE MANAGEMENT INC

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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

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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

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that consolidate, compact and transport waste efficiently and economically. Our solid waste business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provide collection, transfer, disposal, recycling and resource recovery services. Through our subsidiaries, including our Waste Management Renewable Energy (“WM Renewable Energy”) segment, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the U.S. and Canada that produce renewable electricity and renewable natural gas (“RNG”), which is a significant source of fuel that we allocate to our natural gas fleet. Additionally, we are a leading recycler in the U.S. and Canada, handling materials that include paper, cardboard, glass, plastic and metal.

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energy. We own or operate the largest network of landfills throughout the U.S. and Canada. In order to make disposal more practical for larger urban markets, where the distance to landfills is typically farther, we manage transfer stations that consolidate, compact and transport waste efficiently and economically. Our solid waste business is operated and managed locally by our subsidiaries that focus on distinct geographic areas and provide collection, transfer, disposal, recycling and resource recovery services. Through our subsidiaries, including our Waste Management Renewable Energy (“WM Renewable Energy”) segment, we are also a leading developer, operator and owner of landfill gas-to-energy facilities in the U.S. and Canada that produce renewable electricity and renewable natural gas (“RNG”), which is a significant source of fuel that we allocate to our natural gas fleet. Additionally, we are a leading recycler in the U.S. and Canada, handling materials that include paper, cardboard, glass, plastic and metal.

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On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle, Inc., a provider of regulated waste and compliance services and secure information destruction services that protect people and brands, promote health and well-being and safeguard the environment. The post-closing operating results of Stericycle have been included in our Condensed Consolidated Financial Statements as a new reportable segment referred to as WM Healthcare Solutions. During the first quarter of 2025, we prioritized maintaining service delivery continuity for our customers, ensuring business alignment with WM’s core values and capturing preliminary synergies through reduction of duplicative processes and costs. Additional integration efforts focused on optimizing processes through technological enhancements, establishing a performance management approach aimed at accountability and improving utilization and optimization of the asset portfolio.

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On November 4, 2024, we completed our acquisition of all outstanding shares of Stericycle, Inc., a provider of regulated waste and compliance services and secure information destruction services that protect people and brands, promote health and well-being and safeguard the environment. The post-closing operating results of Stericycle have been included in our Condensed Consolidated Financial Statements as a new reportable segment referred to as WM Healthcare Solutions.** **During the first half of 2025, we continued to prioritize service delivery for our customers and the integration of operations into WM’s organizational structure, ensuring business alignment with WM’s core values and capturing synergies through reduction of duplicative processes and costs. Additional efforts focused on business integration and process optimization through technological enhancements, establishing a performance management approach aimed at accountability and improving utilization of the asset portfolio.

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of waste at landfills. We monitor these developments to adapt our service offerings. As companies, individuals and communities look for ways to be more sustainable, we promote our comprehensive services that go beyond our core business of collecting and disposing of waste in order to meet their needs. This includes expanding traditional recycling services, increasing organics collection and processing, providing regulated waste and compliance services and secure information destruction and expanding our renewable energy projects to meet the evolving needs of our diverse customer base. As North America’s leading provider of comprehensive environmental solutions, we are taking big, bold steps to catalyze positive change – change that will impact our Company as well as the communities we serve. Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 2024 Sustainability Report providing details on our sustainability-related performance and outlining progress towards our 2030 sustainability goals. The Sustainability Report conveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company’s Recycling Processing and Sales and WM Renewable Energy segments. The information in this report can be found at sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.

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The waste industry is a comparatively mature and stable industry. However, customers increasingly expect more of their waste materials to be recovered and those waste streams are becoming more complex. In addition, many state and local governments mandate diversion, recycling and waste reduction at the source and prohibit the disposal of certain types of waste at landfills. We monitor these developments to adapt our service offerings. As companies, individuals and communities look for ways to be more sustainable, we promote our comprehensive services that go beyond our core business of collecting and disposing of waste in order to meet their needs. This includes expanding traditional recycling services, increasing organics collection and processing, providing regulated waste and compliance services and secure information destruction and expanding our renewable energy projects to meet the evolving needs of our diverse customer base. As North America’s leading provider of comprehensive environmental solutions, we are taking big, bold steps to catalyze positive change – change that will impact our Company as well as the communities we serve. Consistent with our Company’s long-standing commitment to sustainability and environmental stewardship, we have published our 2025 Sustainability Report providing details on our sustainability-related performance and outlining progress towards our 2030 sustainability goals. The Sustainability Report conveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company’s Recycling Processing and Sales and WM Renewable Energy segments. The information in this report can be found at sustainability.wm.com but it does not constitute a part of, and is not incorporated by reference into, this Quarterly Report on Form 10-Q.

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We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments. During the first quarter, we experienced moderate decreases in the market price for recycled commodities when compared to the prior year period. The impacts of commodity price fluctuations are not currently material to our WM Renewable Energy segment; however, as we continue to make investments to grow that segment, we may experience more significant impacts from fluctuations in the prices of electricity, natural gas, RINs and RECs. We continue to take proactive steps to adjust our business models to protect against the downside risk of changes in commodity prices.

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We sometimes experience margin pressures and variability in earnings and margins from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments. During the first half of 2025, we experienced decreases in market prices for recycled commodities when compared to the prior year period, particularly in our recycling brokerage business. While the combined impacts of commodity price fluctuations from the prior year had a modestly favorable impact on the WM Renewable Energy segment in the first half of 2025, we may experience more significant impacts from fluctuations in the prices of renewable identification numbers (“RINs”) and natural gas as we continue to make investments to grow that segment in the future.

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Variability in economic conditions, including inflation, interest rates, employment trends and supply chain reliability, can create risk and uncertainty in financial outlook. We take proactive steps to recover and mitigate inflationary cost pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity and investments in technology to automate certain aspects of our business. We remain committed to putting our people first to ensure that they are well positioned to execute our daily operations diligently and safely. We remain focused on delivering outstanding customer service, managing our variable costs with changing volumes and investing in technology that will enhance our customers’ experience and provide operating efficiencies intended to reduce our cost to serve our customers.

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pressures through our overall pricing efforts and by managing our costs through efficiency, labor productivity and investments in technology to automate certain aspects of our business. We remain committed to putting our people first to ensure that they are well positioned to execute our daily operations diligently and safely. We remain focused on delivering outstanding customer service, managing our variable costs with changing volumes and investing in technology that will enhance our customers’ experience and provide operating efficiencies intended to reduce our cost to serve our customers.

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During the first quarter of 2025, we continued to focus on our priorities to advance our strategy – enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, investing in growth through our Recycling Processing and Sales and WM Renewable Energy segments and integrating the Stericycle business. We continue to invest in our people through paying a competitive market wage, investing in our digital platform and providing training for our team members. We also continue to make investments in automation and optimization to enhance our operational efficiency and improve labor productivity for all lines of business. As part of the integration of Stericycle, which constitutes our new WM Healthcare Solutions segment, we achieved synergies by reducing costs of duplicative business processes, focused on service delivery for our customers and aligned team members and business processes with WM’s core values.

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During the second quarter of 2025, we continued to focus on our priorities to advance our strategy – enhancing employee engagement, permanently reducing our cost to serve our customers through the use of technology and automation, investing in growth through our Recycling Processing and Sales and WM Renewable Energy segments and integrating the Stericycle business. We continue to invest in our people through paying a competitive market wage, investing in our digital platform and providing training for our team members. We also continue to make investments in automation and optimization to enhance our operational efficiency and improve labor productivity for all lines of business. As part of the integration of Stericycle, which constitutes our new WM Healthcare Solutions segment, we achieved synergies by reducing costs of duplicative business processes, focused on service delivery for our customers and aligned team members and business processes with WM’s core values.

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Key elements of our financial results for the first quarter include:

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Key elements of our financial results for the second quarter include:

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The mix of operating revenues for the three months ended March 31 are as follows (in millions):

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The mix of operating revenues from our major lines of business for the three and six months ended June 30 are as follows (in millions):

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Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business. We continue to see yield growth in our landfill business primarily driven by municipal solid waste landfills, which achieved average yield of 4.0% for the first quarter of 2025.

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Our overall pricing efforts are focused on keeping pace with the increasing costs and capital intensity of our business. We continue to see yield growth in our landfill business primarily driven by municipal solid waste landfills, which achieved average yield of 7.0% and 5.6% for the three and six months ended June 30, 2025, respectively, led by strong performance in our West Tier.

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Recycling Processing and Sales and WM Renewable Energy— Recycling Processing and Sales revenues attributable to yield decreased $7 million in the first quarter of 2025 as compared with the prior year period. This decline was driven by 10% lower average market prices in our brokerage business compared with the prior year, partially offset by 5% higher average market prices for our single-stream recycled commodities. In addition, revenues attributable to yield in our WM Renewable Energy segment increased $8 million as compared with the prior year period, primarily driven by an increase in electricity and natural gas prices due in part to extreme winter weather in the current quarter, which was partially offset by lower RINs pricing. While there may be short-term fluctuations in our commodity-driven businesses as prices change, we continue to take proactive steps to adjust our business models to protect against the downside risk of changes in commodity prices.

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Recycling Processing and Sales and WM Renewable Energy — Recycling Processing and Sales revenues attributable to yield decreased $33 million and $41 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. Average market prices for single-stream recycled commodities declined nearly 15% and 5% for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. Revenues attributable to yield in our WM Renewable Energy segment increased $8 million and $16 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods, primarily driven by an increase in natural gas and electricity pricing. While there may be short-term fluctuations in our commodity-driven businesses as prices change, we continue to take proactive steps to adjust our business models to protect against the downside risk of changes in commodity prices.

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*Energy Surcharge and Mandated Fees —*These fees decreased $2 million for the first quarter of 2025 as compared with the prior year period. Our energy surcharge revenues declined $9 million primarily due to a decline in the market prices for diesel fuel of approximately 8.5% in the first quarter of 2025 as compared with the prior year period. This decline was partially offset by a $7 million increase in our mandated fees primarily related to fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations, particularly in our West Tier.

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*Energy Surcharge and Mandated Fees —*These fees increased $9 million and $7 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. The increase was primarily due to higher mandated fees of $18 million and $25 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. The mandated fees are primarily related to fees and taxes assessed by various state, county and municipal government agencies at our landfills and transfer stations, particularly in our West Tier. Partially offsetting the increase was a decline in our energy surcharge revenues of $9 million and $18 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods, primarily due to a decline in the market prices for diesel fuel of approximately 8% for the three and six months ended June 30, 2025.

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Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $4 million for the first quarter of 2025 as compared with the prior year period. Special waste volume in our West Tier was favorably impacted by the wildfires clean-up activities that began in the first quarter of 2025. Additionally, volumes increased in both our Recycling Processing and Sales and WM Renewable Energy segments primarily due to contributions from growth projects. These volume increases were largely offset by declines in industrial and residential collection volume as well as the impacts of one fewer workday and extreme winter weather in the current quarter. Industrial collection volume declined primarily due to lower contributions from temporary business and residential collection volume declined largely due to our intentional shedding of lower-margin business.

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Our revenues from volume (excluding volumes from acquisitions and divestitures) increased $115 million and $119 million for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. Special waste volume in our West Tier was favorably impacted by the wildfire clean-up activities that began in the first quarter of 2025. Additionally, volumes increased in both our WM Renewable Energy and Recycling Processing and Sales segments primarily due to contributions from growth projects. Furthermore, volumes increased in our Strategic Business Solutions business due to our focus on a differentiated service model for national account customers. These volume increases were partially offset by declines in industrial and residential collection volume primarily due to lower contributions from temporary industrial business and intentional shedding of lower-margin residential business.

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Acquisitions and divestitures resulted in a net increase in revenues of $690 million, or 13.4%, in the first quarter of 2025 as compared with the prior year. This increase was primarily due to our acquisition of Stericycle in November 2024. The remaining increase was related to our ongoing investment in tuck-in collection and disposal businesses.

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Acquisitions and divestitures resulted in a net increase in revenues of $740 million, or 13.6%, and $1,430 million, or 13.5%, respectively, for the three and six months ended June 30, 2025, as compared with the prior year periods. This increase was primarily due to our acquisition of Stericycle in November 2024. The remaining increase was related to our ongoing investment in tuck-in collection and disposal businesses.

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The following table summarizes the major components of our operating expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

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The following table summarizes the major components of our operating expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

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Our operating expenses for the three months ended March 31, 2025 increased as compared with the three months ended March 31, 2024, primarily due to (i) our recent acquisitions and (ii) moderate inflationary pressures. These increases were offset, in part, by (i) lower residential and industrial volumes attributable, in part, to intentional shedding of lower margin residential contracts, industrial economic softness and one less workday as compared with the first quarter of 2024 and (ii) continued operating efficiency and cost control initiatives in our Collection and Disposal businesses. Although our operating expenses increased overall, efficiency gains, improved turnover and momentum in truck deliveries combined with the benefit of price increases positioned us to reduce our operating expenses as a percentage of revenue when compared with the prior year period.

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Our operating expenses for the three and six months ended June 30, 2025 increased as compared with the three and six months ended June 30, 2024, primarily due to (i) our recent acquisitions; (ii) increased post-collection volumes and (iii) moderate inflationary pressures. These increases were offset, in part, by (i) lower residential and temporary industrial business volumes and (ii) continued operating efficiency and cost control initiatives in our Collection and Disposal businesses. Despite the overall increase in operating expenses, efficiency gains, improved turnover and momentum in truck deliveries, combined with the benefit of price increases and high margin special waste volumes, positioned us to reduce our operating expenses as a percentage of revenue when compared with the prior year period.

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Labor and Related Benefits — The increase in labor and related benefits costs was largely driven by (i) the addition of employees as a result of our recent acquisitions and (ii) annual employee wage increases. The increase was offset, in part, by residential collection efficiency improvements, improved driver retention and conversion to automated side-load routes.

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Labor and Related Benefits — The increase in labor and related benefits costs was largely driven by (i) the addition of employees as a result of our recent acquisitions and (ii) annual employee wage increases. The increase was offset, in part, by (i) residential collection efficiency improvements; (ii) lower residential volumes attributable to intentional shedding of lower margin contracts and (iii) improved driver retention.

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Transfer and Disposal Costs— The increase in transfer and disposal costs was primarily due to additional disposal costs attributable to our recent acquisitions and inflationary cost pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers. These increases were offset, in part, by decreases in residential and industrial collection volumes.

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Transfer and Disposal Costs — The increase in transfer and disposal costs was primarily due to our recent acquisitions and inflationary cost pressures, which includes increased disposal fees at third-party sites and higher rates from our third-party haulers. This increase was partially offset by lower residential volumes attributable to intentional shedding of lower margin contracts.

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Maintenance and Repairs — The increase in maintenance and repairs costs was largely driven by (i) additional costs incurred as a part of our recent acquisitions; (ii) inflation in parts, supplies and third-party services and (iii) annual employee wage increases. These increases were offset, in part, by new truck deliveries, which lowered average fleet age and reduced demand for third-party services, parts and supplies.

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Maintenance and Repairs — The increase in maintenance and repairs costs was largely driven by (i) additional costs incurred as a part of our recent acquisitions; (ii) inflation in parts, supplies and third-party services and (iii) annual employee wage increases. These increases were offset, in part, by new truck deliveries, which lowered average fleet age and reduced demand for parts, supplies and third-party services.

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Subcontractor Costs — The increase in subcontractor costs was primarily due to (i) additional costs incurred as a part of our recent acquisitions and (ii) continued inflationary cost pressures, particularly labor costs from third-party haulers. These increases were offset, in part, by the impact of lower fuel prices on third-party subcontracted hauling and services as compared with the three months ended March 31, 2024.

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Subcontractor Costs — The increase in subcontractor costs was primarily due to (i) additional costs incurred as a part of our recent acquisitions and (ii) continued inflationary cost pressures, particularly labor costs from third-party haulers. These increases were offset, in part, by the impact of lower fuel prices on third-party subcontracted hauling and services as compared with the three and six months ended June 30, 2024.

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Cost of Goods Sold — The increase in cost of goods sold was primarily driven by (i) additional pipeline costs attributable to new RNG facilities brought on-line since the first quarter of 2024 and (ii) a 5% increase in recycled commodity prices compared to the prior year period.

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Cost of Goods Sold — The decrease in cost of goods sold was primarily driven by a 15% and 5% decrease in average market prices for single-stream recycled commodities for the three and six months ended June 30, 2025, respectively, as compared with the prior year periods. This decrease was partially offset by additional pipeline transportation costs attributable to new RNG facilities brought on-line since the prior year periods.

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Fuel — The increase in fuel costs was primarily due to (i) our recent acquisitions and (ii) the expiration of the federal alternative fuel tax credit on December 31, 2024. These increases were offset, in part, by an 8.5% decrease in market prices for diesel fuel.

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Fuel — The increase in fuel costs was primarily due to (i) our recent acquisitions and (ii) the expiration of the federal alternative fuel tax credit on December 31, 2024. These increases were offset, in part, by a decline in the market prices for diesel fuel of approximately 8% as compared to the prior year periods.

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Landfill Operating Costs — The decrease in landfill operating costs was primarily due to certain adjustments to increase our environmental remediation reserve during the first quarter of 2024.

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Landfill Operating Costs — The increase in landfill operating costs for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, was primarily due to an increase in volumes and higher leachate treatment costs in our West Tier. Partially offsetting the increase for the six months ended June 30, 2025 were certain adjustments to increase our environmental remediation reserve during the first quarter of 2024.

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Risk Management — Risk management costs increased primarily due (i) additional claims and premiums attributable to our recent acquisitions and (ii) increases in claims costs due to negative claim development from prior accident years.

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Risk Management — Risk management costs decreased for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to improved claims experience offset, in part, by (i) additional claims and premiums attributable to our recent acquisitions and (ii) prior year quarter insurance recoveries for property claims associated with a hurricane in 2023. The increase for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was due to (i) additional claims and premiums attributable to our recent acquisitions and (ii) increases in claims costs due to negative claim development on a limited population of severe cases during the first quarter of 2025.

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Other — Other operating cost increases were primarily due to (i) additional expenses attributable to our recent acquisitions and, to a much lesser extent, (ii) increased utility costs largely attributable new RNG plants brought on-line since the first quarter of 2024 and increased power prices.

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Other — Other operating cost increases were primarily due to (i) additional expenses attributable to our recent acquisitions; (ii) gains on the sale of real estate in 2024 and, to a much lesser extent, (iii) increased utility costs largely attributable to new RNG plants brought on-line since the prior year periods and increased power prices.

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The following table summarizes the major components of our selling, general and administrative expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

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The following table summarizes the major components of our selling, general and administrative expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

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Selling, general and administrative expenses have increased primarily due to higher labor costs from acquisitions as well as consulting costs incurred to support the integration of Stericycle.

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Selling, general and administrative expenses increased for the three and six months ended June 30, 2025 primarily due to higher labor costs from acquisitions as well as consulting costs incurred to support the integration of Stericycle.

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*Labor and Related Benefits —*The increase in labor and related benefits costs was primarily related to (i) our recent acquisitions, particularly Stericycle; (ii) higher long-term incentive compensation costs; (iii) increased headcount and (iv) annual employee wage increases.

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*Labor and Related Benefits —*The increase in labor and related benefits costs was primarily related to (i) our recent acquisitions, particularly Stericycle; (ii) higher long-term incentive compensation costs and (iii) annual employee wage increases.

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Provision for Bad Debts—The increase in provision for bad debts was primarily attributable to our Stericycle acquisition.

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Provision for Bad Debts— The increase in provision for bad debts was primarily attributable to our WM Healthcare Solutions segment.

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The following table summarizes the components of our depreciation, depletion and amortization expenses for the three months ended March 31 (in millions of dollars and as a percentage of revenues):

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The following table summarizes the components of our depreciation, depletion and amortization expenses for the three and six months ended June 30 (in millions of dollars and as a percentage of revenues):

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The increase in depreciation of tangible property and equipment during the first quarter of 2025, as compared with the first quarter of 2024, was driven by (i) our recent acquisitions and (ii) investments in capital assets such as trucks, landfills and equipment. The increase in depletion of landfill airspace was driven by volume increases, particularly at sites within our West Tier. The increase in amortization of intangible assets during the first quarter of 2025, as compared with the first quarter of 2024, was primarily driven by the amortization of customer relationships and other intangibles acquired as part of the Stericycle acquisition.

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The increase in depreciation of tangible property and equipment for the three and six months ended June 30, 2025, as compared to the prior year periods, was driven by (i) our recent acquisitions and (ii) investments in capital assets such as trucks, landfills and equipment. The increase in depletion of landfill airspace for the three and six months ended June 30, 2025, as compared to the prior year periods, was primarily driven by volume increases, particularly at sites within our West Tier. The increase in amortization of intangible assets for the three and sixth months ended June 30, 2025 was primarily driven by the amortization of customer relationships and other intangibles acquired as part of the Stericycle acquisition.

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The increase in restructuring during the first quarter of 2025, as compared with the first quarter of 2024, was primarily driven by employee costs related to our acquisition of Stericycle.

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The increase in restructuring charges during the three and six months ended June 30, 2025 was primarily driven by employee costs related to our acquisition of Stericycle.

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The following table summarizes income from operations for our reportable segments for the three months ended March 31 (dollars in millions):

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The following table summarizes income from operations for our reportable segments for the three and six months ended June 30 (dollars in millions):

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The significant items affecting income from operations for our segments during the first quarter of 2025, as compared with the prior year period, are summarized below:

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The significant items affecting income from operations for our segments during the three and six months ended June 30, 2025, as compared with the prior year periods, are summarized below:

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Our interest expense, net was $232 million and $130 million during the three months ended March 31, 2025 and 2024, respectively. The increase is primarily related to an increase in our average debt balances to fund our November 2024 acquisition of Stericycle.

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Our interest expense, net was $232 million and $464 million for the three and six months ended June 30, 2025, respectively, compared to $136 million and $266 million for the three and six months ended June 30, 2024, respectively. The increase is primarily related to an increase in our average debt balances to fund our November 2024 acquisition of Stericycle.

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Our income tax expense and effective income tax rates were $151 million, or 19.2%, and $162 million, or 18.6%, for the three months ended March 31, 2025 and 2024, respectively. See Note 4 to the Condensed Consolidated Financial Statements for more information related to income taxes.

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Our income tax expense and effective income tax rate was $201 million, or 21.7%, and $352 million, or 20.5%, for the three and six months ended June 30, 2025, respectively, compared to $214 million, or 23.9%, and $376 million, or 21.3%, for the three and six months ended June 30, 2024, respectively. See Note 4 to the Condensed Consolidated Financial Statements for more information related to income taxes.

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Tax Legislation —The Inflation Reduction Act of 2022 (“IRA”) contains several tax-related provisions, including with respect to (i) alternative fuel tax credits; (ii) tax incentives for investments in renewable energy production, carbon capture and other climate actions and (iii) the overall measurement of corporate income taxes. Given the complexity and uncertainty around the applicability of the legislation to our specific facts and circumstances, we continue to analyze the IRA provisions to identify and quantify potential opportunities and applicable benefits included in the legislation. The provisions of the IRA concerning investment tax credits are expected to generate a cumulative benefit ranging from $300 million to $400 million, $145 million of which was recognized in 2023 and 2024 with the remainder anticipated to be realized in 2025 and 2026. The expected benefit from the investment tax credit for 2025 and 2026 is dependent on a number of estimates and assumptions, including the timing of project completion. Additionally, we expect that the production tax credit incentives for investments in renewable energy and carbon capture, as expanded by the IRA, could result in an incremental benefit to the Company, although at this time, the anticipated amount of such benefit has not been quantified due, in part, to the lack of regulatory guidance.

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The Inflation Reduction Act of 2022 (“IRA”) contains several tax-related provisions, including with respect to (i) alternative fuel tax credits; (ii) tax incentives for investments in renewable energy production, carbon capture and other climate actions and (iii) the overall measurement of corporate income taxes. Given the complexity and uncertainty around the applicability of the legislation to our specific facts and circumstances, we continue to analyze the IRA provisions to identify and quantify potential opportunities and applicable benefits included in the legislation. The provisions of the IRA concerning investment tax credits are expected to generate a cumulative benefit of approximately $400 million, $145 million of which was recognized in 2023 and 2024 with the remainder anticipated to be realized in 2025 and 2026. The expected benefit from the investment tax credit for 2025 and 2026 is dependent on a number of estimates and assumptions, including the timing of project completion. Additionally, we expect that the production tax credit incentives for investments in renewable energy and carbon capture, as expanded by the IRA, could result in an incremental benefit to the Company, although at this time, the anticipated amount of such benefit has not been quantified due, in part, to the lack of regulatory guidance.

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The Company consistently generates cash flow from operations that meets and exceeds our working capital needs, allows for payment of our dividends, investment in the business through capital expenditures and tuck-in acquisitions and funding of strategic sustainability growth investments. We continually monitor our actual and forecasted cash flows, our liquidity and our capital resources, enabling us to plan for our present needs and fund unbudgeted business requirements that may arise during the year. The Company believes that its investment grade credit ratings, diverse investor base, large value of unencumbered assets and modest leverage enable it to obtain adequate financing, and refinance upcoming

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The Company consistently generates cash flow from operations that meets and exceeds our working capital needs, allows for payment of our dividends, investment in the business through capital expenditures and tuck-in acquisitions and funding of strategic sustainability growth investments. We continually monitor our actual and forecasted cash flows, our liquidity and our capital resources, enabling us to plan for our present needs and fund unbudgeted business requirements that may arise during the year. The Company believes that its investment grade credit ratings, diverse investor base, large value of unencumbered assets and modest leverage enable it to obtain adequate financing, and refinance upcoming maturities, as necessary to meet its ongoing capital, operating, strategic and other liquidity requirements. We also have the ability to manage liquidity during periods of significant financial market disruption through temporary modification of our capital expenditure and share repurchase plans.

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Debt — As of March 31, 2025, we had approximately $3.8 billion of debt maturing within the next 12 months, including (i) $1.5 billion of short-term borrowings under our commercial paper program (net of related discount on issuance); (ii) $1.3 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $500 million of 0.75% senior notes that mature in November 2025 and (iv) $454 million of other debt with scheduled maturities within the next 12 months, including $298 million of tax exempt bonds. As of March 31, 2025, we have classified $2.8 billion of debt maturing in the next 12 months as long-term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S. and Canadian revolving credit facility. The remaining $954 million of debt maturing in the next 12 months is classified as current obligations.

Current wording

Debt — As of June 30, 2025, we had approximately $4.0 billion of debt maturing within the next 12 months, including (i) $1.5 billion of short-term borrowings under our commercial paper program (net of related discount on issuance); (ii) $1.5 billion of tax-exempt bonds with term interest rate periods that expire within the next 12 months, which is prior to their scheduled maturities; (iii) $500 million of 0.75% senior notes that mature in November 2025 and (iv) $464 million of other debt with scheduled maturities within the next 12 months, including $298 million of tax-exempt bonds. As of June 30, 2025, we have classified $3.0 billion of debt maturing in the next 12 months as long term because we have the intent and ability to refinance these borrowings on a long-term basis as supported by the forecasted available capacity under our $3.5 billion long-term U.S. and Canadian revolving credit facility. The remaining $964 million of debt maturing in the next 12 months is classified as current obligations.

Previous wording

The following is a summary of our cash flows for the three months ended March 31 (in millions):

Current wording

The following is a summary of our cash flows for the six months ended June 30 (in millions):