Waste Management, Inc. · NYSE:WM
Waste Management — Investor Day (April 2023)
70 slides from Waste Management's investor day presentation, Apr 5, 2023
Slide 1: Sustainability Investor Day
Sustainability : Investor Day April 5, 2023
Slide 2: Agenda
10:00AM EDT 11:15AM EDT Welcome Ed Egl Senior Director, Investor Relations Strengthening an Already Compelling Investment Thesis Jim Fish President & CEO Poised for Sustainable Growth Tara Hemmer SVP, Chief Sustainability Officer Building the Leading Platform in Renewable Energy from Waste Shahid Ma
Slide 3: Forward-Looking Statements & Projections
Forward-Looking Statements & Projections This presentation contains a number of forwardJooking statements and projections, including but not limited to, all statements regarding: future, planned, projected, estimated or targeted investments, capital expenditures, strategies and initiatives; timing,
Slide 4: Strengthening an Already Compelling Investment Thesis
Strengthening an Already Compelling Investment Thesis Jim Fish President & CEO
Slide 5: Compounding Shareholder Value
Compounding Shareholder Value Proven history of balancing capital allocation between organic and Innovative culture and cutting-edge technologies Strong track record of improving solid waste margins Stable, growing, and recurring revenue streams, driven by the most through disciplined to maximize va
Slide 6: Strategy for Long-term, Profitable Growth
Strategy for Long-term, Profitable Growth Becoming an employer of choice by putting our people first tainag, ° ore Po eae Ps Sustainability Strengthening value proposition and solutions to drive positive benefits for all stakeholders Differentiation Optimization Delivering value and experience Execu
Slide 7: Differentiated Leader with Strong Compounding, Profitable Growth
Differentiated Leader with Strong Compounding, Profitable Growth Vertically Integrated Assets ] | Technology il Expertise oS S ‘ml: : 15.2K 497 337 collection routes hauling operations transfer facilities ] Investing in MRF automation World-class routing and Fay logistics teams SO fi Extending WM 25
Slide 8: Leading the Way in Environmental and Economic Stewardship
Leading the Way in Environmental and Economic Stewardship Our Actions and Goals... Transitioned 74% of collection routes to compressed natural gas (CNG) vehicles Increasing landfill gas (LFG) beneficially used from 45% to 65% Expanding tons of recyclables managed from 15M to 25M Generating significa
Slide 9: Experienced and Committed Management Team with Expertise to Execute
Experienced and Committed Management Team with Expertise to Execute Jim Fish President & CEO Since: 2016 Joined WM: 2001 Devina Rankin EVP, CFO 2017 2002 John Morris EvP, COO 2019 1994 Tara Hemmer SVP, Chief Sustainability Officer 2021 1999 Shahid Malik VP, Renewable Energy 2023 2023 Brent Bell VP,
Slide 10: Poised for Sustainable Growth
Poised for Sustainable Growth € “a Tara Hemmer SVP, Chief Sustainability Officer
Slide 11: Accelerating Growth to Benefit All Stakeholders
Accelerating Growth to Benefit All Stakeholders Solutions partner at the intersection of two key customer trends: decarbonization and circularity Uniquely positioned to drive value for our people, customers, the environment, and shareholders Clear strategy to execute on opportunities in our Renewabl
Slide 12: Our Sustainability Growth Investment Program
Our Sustainability Growth Investment Program Renewable ° 20 planned new WM-owned RNG Energy facilities expected to generate Multi-year plan 25M incremental MMBtu in 2026 for significant investments - + 43 planned new or automated Recycling MRFs expected to add 2.8M incremental tons managed Les * Inc
Slide 13: Clear Strategy to Accelerate Growth and Value
Clear Strategy to Accelerate Growth and Value * Most comprehensive portfolio of landfills * Increasing beneficial use of landfill gas Renewable - reso 9 , Energy * Industry-leading fleet of CNG trucks * Strategic third-party relationships * Largest network of owned facilities * Ability to develop ne
Slide 14: Track Record of Executing on Sustainability Investments
Track Record of Executing on Sustainability Investments 1982-2000 200. 022 Network in the U.S. i) Renewable Energy | Largest LFG-to-Ene Vv 1982-1985: Co-developed LFG-fueled Y 2003: Created WM Renewable Energy cf Executing on plans for 20 new engines and turbines Y 2015-2022: Commissioned WM-owned R
Slide 15: Why We Win | Industry-Leading Capabilities and Talent
Why We Win | Industry-Leading Capabilities and Talent Business Mode! |] ABR 3 Size and Scale Customer Focus Innovation Leveraging vertical ! 6 - Optimizing most integration benefits to Partnering to create Se comprehensive network focus on evolving our solutions helping eerie of landfills and MRFs s
Slide 16: Case Study | Strong Complement to Core Solid Waste Business
Case Study | Strong Complement to Core Solid Waste Business Initial Results Demonstrate Meaningful Profitable Growth Alongside Core Disposal Assets On average, WM’s RNG investments more than doubled Adj. Op. EBITDA? at our first 4 sites : , Going Forward... Strategically pursued best initial opportu
Slide 17: Sustainability Investments Expected to Deliver Significant Environmental Benefits
Sustainability Investments Expected to Deliver Significant Environmental Benefits Sustainability Investments ..Continuously Executing on are Paramount to... Strategy and Sustainability Goals* Monetizing increased capture of LFG by converting to renewable energy Expanding capture supports growth and
Slide 18: Growing Financial Contribution Supports Growth in Core Business
Growing Financial Contribution Supports Growth in Core Business Today... Strategically Important: But only <10% of 2022 Adj. Op. EBITDA? Strong Complement to Solid Waste National Strong capabilities National Account business has Account support growth with more than doubled through Growth largest cu
Slide 19: Poised for Sustainable Growth
Poised for Sustainable Growth Solutions partner at the intersection of two key A ep) customer trends: decarbonization and circularity Ey | Uniquely positioned to drive value for our people, 2g | customers, the environment, and shareholders ee @ Clear strategy to execute on opportunities in our Renew
Slide 20: Building the Leading Platform in Renewable Energy from Waste
Building the Leading Platform in Renewable Energy from Waste Shahid Malik VP, Renewable Energy
Slide 21: Poised for Next Phase of Renewable Energy Growth
Poised for Next Phase of Renewable Energy Growth Based on Unparalleled Size and Scale Well-positioned to develop assets that directly tie to decarbonization mega-trend Strong vertical integration advantages as we pursue high potential LFG-to-Energy opportunities Asset optionality to drive positive o
Slide 22: Market Leader Creating Environmental and Economic Value
Market Leader Creating Environmental and Economic Value Vertical Integration Downstream Optionality BS x EY ts a} Collection Gas-to-Electricity Circularity Diverse Expected Benefits [,5) Transfer Gas-to-RNG (Transportation Market) ») Ce) CNG Fueling » Decarbonization Landfill j QO 34 Party Sales th
Slide 23: Capturing Long-term Opportunity to Support Financial Outperformance
Capturing Long-term Opportunity to Support Financial Outperformance Growing the Renewable Energy Portfolio ~135M MMBtu jl 120M MMBtu Se Captured? Available for Beneficial Use WM LFGTE? Third-party ~65% Beneficial Use WM RNG WM Gas to Industrial Customers ~45% Beneficial Use 2021 2026 Doing What's Ri
Slide 24: Well-positioned for Rapidly Growing Renewable Natural Gas Opportunity
fins Well-positioned for Rapidly Growing Renewable Natural Gas Opportunity Winning Platform 2026 Milestone Goals Largest network of landfills in N America Long standing experience successfully constructing and operating renewable energy plants * +25M additional Strong balance sheet and ability to le
Slide 25: Capabilities, Scale, and Expertise Enable Sustainable Competitive Advantages
a Capabilities, Scale, and Expertise Enable Sustainable Competitive Advantages @ r @ ] r e Premier Intrinsic Engineering Asset Base Circularity Expertise Extensive, available Environmental credits Successfully built and landfill gas drives captured via operated ~100 gas and cost advantages WM truck
Slide 26: Robust RNG Demand Expected to Outpace Supply
(hes) | OS Robust RNG Demand Expected to Outpace Supply Transportation Market Direct monetization of RNG by creating RINs through WM and other CNG fleets Voluntary Market Purchase and consumption of RNG by companies for decarbonization efforts Under Most Scenarios, U.S. RNG Supply Trails U.S. RNG De
Slide 27: Holistic Portfolio Management and Optimization
eg tA Holistic Portfolio Management and Optimization Price fluctuations occur in all ..but can be mitigated by proactively identifying, commodity markets... monitoring, and managing portfolio risk Transportation Multiple Tools in Risk Management Toolbox Market Pricing + Proactive contracting approac
Slide 28: Programmatic Price Risk Management Framework
eg tA Programmatic Price Risk Management Framework De-risking RNG Portfolio through Contracted Forward Sales in Transportation and Voluntary Markets Implementing A Balanced WM Plans to Execute Forward, Fixed-price Approach to Risk Sales on a Rolling 36-month Basis? Y¥ Contracting with stable, high-q
Slide 29: Investing to Capture Significant Opportunity with Additional Upside in Future Years
Investing to Capture Significant Opportunity with Additional Upside in Future Years eg tA New RNG Investments are Expected to Generate Attractive Returns, Driving Anticipated ~$500M in Incremental Annual Adj. Op. EBITDA by 2026+ Actual and Projected Incremental RNG Volume (Millions of MMBtu) 25 f oO
Slide 30: Leveraging Scale and Capabilities to Capture Landfill Gas-to-Electricity and e-RIN Opportunity
iy © Leveraging Scale and Capabilities to Capture Landfill Gas-to-Electricity and Potential e-RIN Opportunity High Quality Business Today... + ~60 fully owned plants (largest LFG-to-Electricity producer) * Stable, consistent revenue and earnings from existing assets + Potential opportunity to moneti
Slide 31: Significant Potential e-RIN Opportunity Unlocks Value
eal | Ee Significant Potential e-RIN Opportunity Unlocks Value in Landfill Gas-to-Electricity Portfolio with No Incremental Capital ¥_ Maximize power production, anticipate 1.8-2.0M MWh sold in 2026 Y Portfolio is expected to generate a minimum of $70M in incremental value from e-RIN generation to W
Slide 32: Strategically Working with Third-party Developers on our Landfills
Strategically Working with Third-party Developers on our Landfills Optimizing Mix of WM-Owned vs. Third-party Facilities at Landfills Additional Upside Third-party relationships can enable WM to: Lower Priority RNG Y Focus WM’s development on top-tier opportunities Opportunities | Y Work with owners
Slide 33: Case Study | Proven Ability to Create Shareholder Value through Third-party Relationships
Case Study | Proven Ability to Create Shareholder Value through Third-party Relationships Background Strategically Leveraged Our LFG Rights + WM had existing relationship with Kinetrex (now part of Kinder Morgan) * 3LFGTE? facilities were developed by Kinetrex on WM landfills in Indiana + Made strat
Slide 34: Key Contributors to 2026 Adj. Op. EBITDA Growth
Key Contributors to 2026 Adj. Op. EBITDA Growt Renewable Energy Platform is Positioned to Potentially Add ~$600M+ Adj. Op. EBITDA in 20261 ~$500M $70M+ ~$30M RNG e-RINs Third-party Development Leveraging landfills and facilities in innovative ways to benefit our shareholders Focused on Increasing Po
Slide 35: Strong Potential from Future Opportunities
Strong Potential from Future Opportunities Landfill Gas Available a Carbon Capture Sustainable for Bane ficial se and Storage Aviation Fuel (45M MMBtu) 9 * Pursue additional + Explore potential to capture + Supply RNG as feedstock for * Convert food waste into RNG projects and sequester at WM sites
Slide 36: Building the Leading Platform in Renewable Energy from Waste
Eo on 36 Building the Leading Platform in Renewable Energy from Waste Well-positioned to develop assets that directly tie to decarbonization mega-trend Strong vertical Asset optionality to integration advantages drive positive outcomes as we pursue high meee fOr shareholders potential LFG-to-Energy
Slide 37: Leading the Way in the Circular Economy
Leading the Way in the Circular Economy Brent Bell VP, Recycling
Slide 38: Industry Leader with Unique Capabilities
Industry Leader with Unique Capabilities Differentiated Recycling business has multiple levers for value creation Westside Houston MRF. 38 w
Slide 39: Market Leader with Scale and Expertise
Market Leader with Scale and Expertise Largest North American Manager of Recyclables* 5M Tons of volume Across MRF Footprint? 7,780,337 9 1,226,043 584,756 Paper C&D?/Wood Glass ©, 516,717 417,452 3,919,198 08 gs oe Pam Plastic Metal Mixed Organics e eo ’ a °2 “Tee DP % °° is ° ° ° 97 All ° 2 , 884,
Slide 40: Strong and Growing End-Market Demand
Strong and Growing End-Market Demand Increasing Commi from Manufacture and Potentially Favorable Legislative and Regulatory Iwinds CPG and Packaging Companies Packaging, Consumer Product, Minimum Content Public Commitments on: and Retail Companies Expected Legislation to Drive Significant Demand Pas
Slide 41: Unique Capabilities to Drive Differentiation and Strengthen Value Proposition
Size and Scale to Unique Capabilities to Drive Differentiation and Strengthen Value Proposition Serve Large Customers and Retail Brands Grow largest recycling business in North America Expand solutions globally (top 10 U.S. exporter) Ability to Proprietary Industry-leading Provide Fully Sorting Tale
Slide 42: Deep Dive | Internal Brokerage Capabilities Supports Growth
Deep Dive | Internal Brokerage Capabilities Supports Growth Across Waste Management EEEEGP > swarm Combines National Account customer Brokerage materials with MRF processed materials to generate best values ~ + Helps capture wallet share in National Accounts through bundled services MRF ~5M Breakdow
Slide 43: Clear Strategy to Enhance Economic Value
Clear Strategy to Enhance Economic Value ~$240M Annual Adj. Op. EBITDA Projected by 2026 via MRF Investments’ Expanding Capacity Unlocking Volume Driving Value through Enhancing Material in New Markets Labor Efficiency Quality in Existing Markets ~$70M ~$35M ~$65M ~$70M Projected Annual Projected An
Slide 44: Enhancing Material Quality Drives Increased Revenue
Sam & Enhancing Material Quality Drives Increased Revenue Projected Incremental Annual Adj. Op. EBITDA ~$70M by 20261 Further Separating Materials for Higher Value Leveraging Patented Technology for More Efficient Sorting and Processing @ ® fw CX & Optical Volumetric Control Intelligent Sorters Scan
Slide 45: Expanding Capacity in Existing Markets
Expanding Capacity in Existing Markets Projected Incremental Annual Adj. Op. EBITDA ~$35M by 20261 Well-positioned for Expected 1M+ Ton Increase in Capacity + Providing additional support for higher diversion rates for customers + Expanding to include additional recyclable commodities + Responding t
Slide 46: Unlocking Volume in New Markets
Unlocking Volume in New Markets Expanding to Communities that Lack and Need Access Entering 8 new markets + Focusing on high-growth population areas + Leveraging existing facilities where possible to create hub-and-spoke model Targeting 4 additional markets + Continuing strategic expansion Achieving
Slide 47: Driving Value through Labor Efficiency
i Driving Value through Labor Efficiency Projected Incremental Annual Adj. Op. EBITDA ~$70M by 20261 Full Year 2022 Benefits from Automation r 7 Increased Productivity and Efficiency Safer Work Environment Headcount Reduction Labor Cost/Ton Total Reported Incident Rate % Achieved Processed (TRIR), Y
Slide 48: Automation Projects Catalyzing Growth and Value Creation: Houston
Automation Projects Catalyzing Growth and Value Creation 35 Automation Projects Case Study: Houston Planned or Completed Objectives New State-of-the-Art MRF to replace two legacy facilities Q 4 Completed prior to 2022 Increase capacity/throughput, reduce labor costs, improve commodity recovery and r
Slide 49: Significant Incremental Growth Opportunity
Significant Incremental Growth Opportunity Labor Efficiency, Revenue Quality, Capacity Expansion, and New Markets Driving ~$240M in Annual Adj. Op. EBITDA by 20261 Actual and Projected Actual and Projected Actual Adjusted and Projected Actual and Projected Incremental MRF Capacity? Incremental Recyc
Slide 50: Additional Upside from Future Recycling Opportunities
Additional Upside from Future Recycling Opportunities Capability Expansion * Capitalize on Natura PCR investment with $125M of additional investment * Meet demand for plastic network, focused on food waste solutions + Leverage network of recycling solutions for National Accounts venues to create zer
Slide 51: Leading the Way in the Circular Economy
51 Leading the Way in the Circular Economy Differentiated Recycling business has multiple levers for value creation
Slide 52: Executing on Key Financial Commitments
Executing on Key Financial Commitments Devina Rankin EVP, CFO
Slide 53: Delivering Another Strong Year of Company-wide Growth
Delivering Another Strong Year of Company-wide Growth 2023 Outlook* 9, 9 2 4-5.5% 6 - 8% $2.6B - $2.7B Glen plents Revenue Growth Adj. Operating FCF Excluding deliver on EBITDA Growth Sustainability Growth financial Investments A +40-80 bps commitments Margin Expansion while confidently WM Hauling S
Slide 54: Strong Expected Returns from Sustainability Investments as We Execute on Commitments
Strong Expected Returns from Sustainability Investments as We Execute on Commitments Actual and Projected Incremental CAPEX ($M) $980 a) $510 $165 mm: 2022 2023 2024 2025 2026 =RNG mRecycling Additional Non-Financial _ 2026 Projected KPls: 54 ~135M MMBtu landfill gas collected Actual Adj. and Projec
Slide 55: xcluding 2022 sustainability investments. 3. Net of 2022 sustainability investments.
xcluding 2022 sustainability investments. 3. Net of 2022 sustainability investments.
Slide 56: Managing Risk to Ensure Profitable Growth
Managing Risk to Ensure Profitable Growth Flexible Framework to Manage Risk * Proactive contracting approach + Long-term offtake agreements * Flexible contract structures * Regulatory and legislative engagement + Multiple monetization channels + Robust financial strength and balance sheet Investment
Slide 57: Continued Commitment to Prudent Capital Management
Continued Commitment to Prudent Capital Management Reinvestments 2. Dividends M&A Buybacks 5-Year Go-Forward Look Back Outlook $1.8B average Long-term annual CAPEX to support the business, or 10.7% of sales target range to support the business: 9.5-10.5% of sales 8.5% compound annual dividend growth
Slide 58: Closing | Growing an Unmatched Core Business while Positioning for Long-term Financial Upside
Closing | Growing an Unmatched Core Business while Positioning for Long-term Financial Upside Stable, growing, and recurring revenue streams, driven by the most Proven history of balancing capital allocation between organic and inorganic growth Innovative culture and cutting-edge technologies to max
Slide 59: wy — “S
wy — “S : 3 — \ —" | % Aion -. . aal's Ww Jim Fish Devina Rankin John Morris Tara Hemmer Shahid Malik Brent Bell President & CEO EVP, CFO EVP, COO. SVP, Chief VP, Renewable VP, Recycling Sustainability Officer Energy | wr)
Slide 60: Thank you.
Thank you.
Slide 61: Appendix
Appendix
Slide 62: Glossary
Glossary Term Acronym Definition Landfill LF A discrete area of land or excavation that receives and stores waste Landfill Gas LFS Landfil gas is a natural byproduct of the decomposition of organic material in landfills Renewable natural gas (RNG) is a pipeline-quality gas derived from Biogas that i
Slide 63: Key Considerations and Assumptions Impacting Expected Financial Performance
Key Considerations and Assumptions Impacting Expected Financial Performance General Assumptions Alll projections are as of April 5, 2023. Capital expenditures related to our sustainability-related investments in renewable energy and recycling are based on estimates as of April 5, 2023. Supply chain
Slide 64: Key Considerations and Assumptions Impacting Expected Financial Performance
Key Considerations and Assumptions Impacting Expected Financial Performance Assumptions Related to Renewable Energy General 2026 projections of landfill gas captured assume a 50% methane (CH4) content and are based on a 4% annual growth rate from current volumes. Landfill gas flows to produce renewa
Slide 65: Key Considerations and Assumptions Impacting Expected Financial Performance
Key Considerations and Assumptions Impacting Expected Financial Performance Assumptions Related to Renewable Energy (continued) Assumptions Specific to the Generation of e-RINS Assumptions Specific to Revenue Associated with Third Party Development on WM Landfills Projected range of 1.8-2.0M MWh of
Slide 66: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED OPERATING EBITDA ($M, except margins) 2022 2021 2020 2019 Income from operations (as reported) $3,365 $2,965 $2,434 $2,706 Depreciation and amortization $2,038 $1,999 $1,671 $1,574 Advanced Disposal acquisition-related costs $8 $47 $146 $33 Enterprise res
Slide 67: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures FREE CASH FLOW (63)) 2022 2021 2020 2019 Net cash provided by operations $4,536 $4,338 $3,403 $3,874 copia orp es) excluding sustainability growth ($2,026) ($1,665) ($1,632) ($1,818) Gees een teeta secrets at wa oe v9 Free Cash Flow without sustainability growth i
Slide 68: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures RETURN ON INVESTED CAPITAL ($M, except margins) 2022 2021 2020 2019 Adjusted income from operations! $3,474 $3,033 $2,650 $2,809 Less: Adjusted provision for income tax* ($704) ($585) ($456) ($477) Net Operating Profit AfterTax $2,770 $2,448 $2,194 $2,332 Long-ter
Slide 69: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED INCOME FROM OPERATIONS ($M) 2022 2021 2020 2019 Income from operations (as reported) $3,365 $2,965 $2,434 $2,706 Adjustments Advanced Disposal acquisition-related costs $8 $47 $146 $33 Enterprise resource planning system related costs $40 $30 $25 $10 eee
Slide 70: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ADJUSTED TAX EXPENSE ($M) 2022 2021 2020 2019 Provision for income taxes (as reported) $678 $532 $397 $434 Adjustments Advanced Disposal acquisition-related costs $2 $11 $29 $8 Enterprise resource planning system related costs $11 $7 $6 $2 eee asset impairments an