Segment and Related Information

9 Months Ended

Sep. 30, 2024

Segment and Related Information

Segment and Related Information

7.    Segment and Related Information

Our senior management 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 and West Tier, along with Other 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.

Summarized financial information concerning our reportable segments is shown in the following table (in millions):

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues(a)		Revenues		Operations(b)
Three Months Ended September 30:
2024
Collection and Disposal:
East Tier	$	2,835	$	(593)	$	2,242	$	718
West Tier		2,687		(549)		2,138		708
Other Ancillary		750		(46)		704		—
Collection and Disposal(c)(d)		6,272		(1,188)		5,084		1,426
Recycling Processing and Sales(c)		503		(71)		432		21
WM Renewable Energy(d)		88		(1)		87		28
Corporate and Other		12		(6)		6		(356)
Total	$	6,875	$	(1,266)	$	5,609	$	1,119
2023
Collection and Disposal:
East Tier	$	2,700	$	(556)	$	2,144	$	648
West Tier		2,546		(522)		2,024		613
Other Ancillary		701		(48)		653		(2)
Collection and Disposal(c)(d)		5,947		(1,126)		4,821		1,259
Recycling Processing and Sales(c)		386		(81)		305		18
WM Renewable Energy(d)		68		(1)		67		17
Corporate and Other		12		(7)		5		(273)
Total	$	6,413	$	(1,215)	$	5,198	$	1,021

	Gross		Intercompany		Net		Income
	Operating		Operating		Operating		from
	Revenues		Revenues(a)		Revenues		Operations(b)
Nine Months Ended September 30:
2024
Collection and Disposal:
East Tier	$	8,202	$	(1,701)	$	6,501	$	2,064
West Tier		7,800		(1,593)		6,207		2,009
Other Ancillary		2,149		(135)		2,014		(9)
Collection and Disposal(c)(d)		18,151		(3,429)		14,722		4,064
Recycling Processing and Sales(c)		1,414		(209)		1,205		69
WM Renewable Energy(d)		228		(3)		225		67
Corporate and Other		36		(18)		18		(1,056)
Total	$	19,829	$	(3,659)	$	16,170	$	3,144
2023
Collection and Disposal:
East Tier	$	7,934	$	(1,622)	$	6,312	$	1,778
West Tier		7,450		(1,541)		5,909		1,720
Other Ancillary		1,998		(141)		1,857		(2)
Collection and Disposal(c)(d)		17,382		(3,304)		14,078		3,496
Recycling Processing and Sales(c)		1,154		(239)		915		55
WM Renewable Energy(d)		201		(3)		198		51
Corporate and Other		38		(20)		18		(812)
Total	$	18,775	$	(3,566)	$	15,209	$	2,790

(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.

(b) 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 1.

(c) Certain fees related to the processing of recycled material we collect are included within our Collection and Disposal businesses. The amounts in income from operations for the three and nine months ended September 30, 2024, are $29 million and $77 million, respectively. The amounts in income from operations for three and nine months ended September 30, 2023, are $16 million and $41 million, respectively.

(d) WM Renewable Energy pays a 15% intercompany royalty to our Collection and Disposal businesses for landfill gas. The total amount of royalties in income from operations for the three and nine months ended September 30, 2024, are $13 million and $34 million, respectively. The total amount of royalties in income from operations for the three and nine months ended September 30, 2023, are $10 million and $30 million, respectively.

The mix of operating revenues from our major lines of business are as follows (in millions):

	Gross		Intercompany		Net
	Operating		Operating		Operating
	Revenues		Revenues (a)		Revenues
Three Months Ended September 30:
2024
Commercial	$	1,564	$	(205)	$	1,359
Industrial		1,003		(206)		797
Residential		897		(22)		875
Other collection		822		(57)		765
Total collection		4,286		(490)		3,796
Landfill		1,345		(422)		923
Transfer		641		(276)		365
Total Collection and Disposal		6,272		(1,188)		5,084
Recycling Processing and Sales		503		(71)		432
WM Renewable Energy		88		(1)		87
Corporate and Other		12		(6)		6
Total	$	6,875	$	(1,266)	$	5,609
2023
Commercial	$	1,464	$	(179)	$	1,285
Industrial		982		(194)		788
Residential		875		(23)		852
Other collection		773		(55)		718
Total collection		4,094		(451)		3,643
Landfill		1,259		(412)		847
Transfer		594		(263)		331
Total Collection and Disposal		5,947		(1,126)		4,821
Recycling Processing and Sales		386		(81)		305
WM Renewable Energy		68		(1)		67
Corporate and Other		12		(7)		5
Total	$	6,413	$	(1,215)	$	5,198

	Gross		Intercompany		Net
	Operating		Operating		Operating
	Revenues		Revenues (a)		Revenues
Nine Months Ended September 30:
2024
Commercial	$	4,591	$	(586)	$	4,005
Industrial		2,915		(592)		2,323
Residential		2,659		(67)		2,592
Other collection		2,354		(162)		2,192
Total collection		12,519		(1,407)		11,112
Landfill		3,813		(1,225)		2,588
Transfer		1,819		(797)		1,022
Total Collection and Disposal		18,151		(3,429)		14,722
Recycling Processing and Sales		1,414		(209)		1,205
WM Renewable Energy		228		(3)		225
Corporate and Other		36		(18)		18
Total	$	19,829	$	(3,659)	$	16,170
2023
Commercial	$	4,300	$	(508)	$	3,792
Industrial		2,889		(563)		2,326
Residential		2,595		(73)		2,522
Other collection		2,207		(161)		2,046
Total collection		11,991		(1,305)		10,686
Landfill		3,672		(1,220)		2,452
Transfer		1,719		(779)		940
Total Collection and Disposal		17,382		(3,304)		14,078
Recycling Processing and Sales		1,154		(239)		915
WM Renewable Energy		201		(3)		198
Corporate and Other		38		(20)		18
Total	$	18,775	$	(3,566)	$	15,209

(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.

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.