2009 Operating Cash Flow of $397 Million Exceeds Guidance
FAIRFIELD, N.J., Feb. 22 /PRNewswire-FirstCall/ -- Covanta Holding
Corporation (NYSE:CVA) ("Covanta" or the "Company") reported
financial results today for the three and twelve months ended
December 31, 2009. Anthony Orlando, President and CEO of Covanta
noted that, "Our base business demonstrated strength and resiliency
by generating more free cash flow than our prior best year in spite
of lower recycled metal and energy prices. In addition, we made
excellent progress on our growth initiatives by acquiring Veolia's
North American Energy-from-Waste business and breaking ground on
strategic new Energy-from-Waste capacity on three continents. This
performance is a real credit to all of Covanta's outstanding
employees." Fourth Quarter Results For the three months ended
December 31, 2009, consolidated operating revenues decreased 2% to
$407 million, down from $414 million in the prior year comparative
period. Revenues from the Americas segment increased $16 million,
or 5%, to $358 million. New business revenues of $37 million
related primarily to the acquisition of Veolia's North American
Energy-from-Waste business (the "Veolia Acquisition") more than
offset the $21 million decline in the existing business revenue.
Operating expenses for the Americas segment increased by $26
million during the quarter. New business operating expenses of $34
million were primarily related to the Veolia Acquisition.
International segment revenue decreased by $24 million in the
fourth quarter while plant operating expenses declined by $32
million. The decline in both revenues and operating expenses
resulted primarily from lower demand and fuel costs at our Indian
facilities. Adjusted EBITDA was $140 million, compared to $138
million for 2008, an increase of 1%. Fourth quarter 2008 Adjusted
EBITDA benefitted from an insurance recovery of $8 million and an
$8 million project debt prepayment made by our Stanislaus municipal
client. Excluding these benefits in last year's fourth quarter,
Adjusted EBITDA increased by approximately $18 million with a $10
million contribution from the Veolia Acquisition and $10 million
from our international operations, offset partially by lower
electricity and waste prices. Cash flow provided by operating
activities ("Operating Cash Flow") was $150 million in the fourth
quarter, compared to $132 million in 2008. The fourth quarter 2008
results exclude the $8 million insurance recovery. The
approximately $10 million increase in Operating Cash Flow was
driven by project dividends and working capital. Full-Year 2009
Results For the twelve months ended December 31, 2009, consolidated
operating revenues were $1.55 billion down 7% from $1.66 billion in
2008, primarily as a result of lower International segment
revenues. Americas segment revenues declined $25 million or 2% to
$1.35 billion. New business revenue was $73 million. Existing
business revenues declined by $98 million, largely due to lower
pricing on recycled metals, energy and waste. International segment
revenues decreased $95 million during the year while operating
expenses declined by $97 million. The decreases in revenues and
operating expenses resulted primarily from lower fuel costs at our
Indian facilities. For the year, Operating Cash Flow was $397
million and Free Cash Flow (defined as Operating Cash Flow less
maintenance capital expenditures) was $345 million. Operating Cash
Flow was nearly flat with the prior year while Free Cash Flow
improved slightly. Adjusted EBITDA was $515 million in 2009
compared to $552 million in the prior year when excluding the
benefit of the 2008 insurance recovery and the Stanislaus project
debt prepayment. This decline was driven largely by lower recycled
metal and energy prices off-set by the Veolia Acquisition. Net
income was $102 million compared to $129 million in 2008. 2009
diluted EPS was $0.66 compared to $0.83 in the prior year. At year
end, the Company's balance sheet remained strong and had ample
liquidity with $434 million of unrestricted cash, $278 million of
restricted cash (of which $166 million is designated for future
project debt principal repayment), and an undrawn $300 million
revolving credit facility. "We anticipate 2010 Adjusted EBITDA to
increase modestly driven by last year's acquisitions and organic
growth, off-set by head winds related to contract transitions and
our decision to increase development spending," stated Anthony
Orlando. He continued, "This is an important year for our
development activities, particularly in the U.K. where we are
vigorously pursuing several large Energy-from-Waste opportunities.
I'm confident our investment in long-term growth will bear fruit.
In addition, we're advocating for U.S. Renewable Electricity
Standards that would accelerate our growth." 2010 Guidance The
Company is establishing guidance for 2010 for the following key
metrics: -- Free Cash Flow in the range of $300 million to $340
million; -- Adjusted EBITDA of $520 million to $560 million; and --
Diluted earnings per share of $0.55 to $0.75. Please note that we
have elected to provide Free Cash Flow guidance rather than
guidance relating to Operating Cash Flow for 2010. We are focused
on generating cash and believe that Free Cash Flow is a more useful
metric for evaluating the liquidity of the business as it
represents cash that is available to invest in growth and repay
debt. Conference Call Information Covanta will host a conference
call at 8:30 am (Eastern) on Tuesday, February 23, 2010 to discuss
its results for the three and twelve months ended December 31,
2009. Prepared remarks will be followed by a question-and-answer
session. To participate, please dial 877-806-3982 approximately 10
minutes prior to the scheduled start of the call and when prompted,
enter the passcode 53809407. If you are calling from outside of the
United States, please dial 702-928-7062 and use the same passcode.
The conference call will also be web cast live on the Investor
Relations section of the Covanta website at
http://www.covantaholding.com/. A replay of the conference call
will be available from 11:30 am (Eastern) on Tuesday, February 23,
2010 through midnight (Eastern) on Tuesday, March 2, 2010. To
access the replay, please dial 800-642-1687 or, from outside of the
United States, please dial 706-645-9291 and use the replay
passcode: 53809407. The webcast will also be archived on
http://www.covantaholding.com/ and available for MP3 download.
Additional Information The Company's annual report on Form 10-K
will be filed with the Securities and Exchange Commission on
February 22, 2010. Printed copies of this document are available
free of charge. Requests can be submitted at
http://investors.covantaholding.com/ or by calling 1-800-882-4122,
Ext. 7001. About Covanta Covanta Holding Corporation (NYSE:CVA), is
an internationally recognized owner and operator of large-scale
Energy-from-Waste and renewable energy projects and a recipient of
the Energy Innovator Award from the U.S. Department of Energy's
Office of Energy Efficiency and Renewable Energy. Covanta's 45
Energy-from-Waste facilities provide communities with an
environmentally sound solution to their solid waste disposal needs
by using that municipal solid waste to generate clean, renewable
energy. Annually, Covanta's modern Energy-from-Waste facilities
safely and securely convert approximately 20 million tons of waste
into more than 9 million megawatt hours of clean renewable
electricity and create 10 billion pounds of steam that are sold to
a variety of industries. For more information, visit
http://www.covantaholding.com/. Cautionary Note Regarding
Forward-Looking Statements Certain statements in this press release
may constitute "forward-looking" statements as defined in Section
27A of the Securities Act of 1933 (the "Securities Act"), Section
21E of the Securities Exchange Act of 1934 (the "Exchange Act"),
the Private Securities Litigation Reform Act of 1995 (the "PSLRA")
or in releases made by the Securities and Exchange Commission
("SEC"), all as may be amended from time to time. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the
actual results, performance or achievements of Covanta and its
subsidiaries, or general industry or broader economic performance
in global markets in which Covanta operates or competes, to differ
materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Statements
that are not historical fact are forward-looking statements.
Forward-looking statements can be identified by, among other
things, the use of forward-looking language, such as the words
"plan," "believe," "expect," "anticipate," "intend," "estimate,"
"project," "may," "will," "would," "could," "should," "seeks," or
"scheduled to," or other similar words, or the negative of these
terms or other variations of these terms or comparable language, or
by discussion of strategy or intentions. These cautionary
statements are being made pursuant to the Securities Act, the
Exchange Act and the PSLRA with the intention of obtaining the
benefits of the "safe harbor" provisions of such laws. Covanta
cautions investors that any forward-looking statements made by
Covanta are not guarantees or indicative of future performance.
Important assumptions and other important factors that could cause
actual results to differ materially from those forward-looking
statements with respect to Covanta, include, but are not limited
to, the risk that Covanta may not successfully close its announced
or planned acquisitions or projects in development and those
factors, risks and uncertainties that are described in periodic
securities filings by Covanta with the SEC. Although Covanta
believes that its plans, intentions and expectations reflected in
or suggested by such forward-looking statements are reasonable,
actual results could differ materially from a projection or
assumption in any forward-looking statements. Covanta's future
financial condition and results of operations, as well as any
forward-looking statements, are subject to change and inherent
risks and uncertainties. The forward-looking statements contained
in this press release are made only as of the date hereof and
Covanta does not have or undertake any obligation to update or
revise any forward-looking statements whether as a result of new
information, subsequent events or otherwise, unless otherwise
required by law. Attachments Covanta Holding Corporation Exhibit 1
Consolidated Statements of Income Three Months Twelve Months Ended
Ended December 31, December 31, -----------------
-------------------- 2009 2008 2009 2008 ------- ------- ---------
--------- (Unaudited) (Audited) (in thousands, except per share
amounts) Operating revenues Waste and service revenues $252,306
$235,911 $919,604 $934,527 Electricity and steam sales 140,497
159,898 580,248 660,616 Other operating revenues 14,409 18,011
50,615 69,110 ------- ------- --------- --------- Total operating
revenues 407,212 413,820 1,550,467 1,664,253 ------- -------
--------- --------- Operating expenses Plant operating expenses (A)
242,278 256,089 946,166 999,674 Depreciation and amortization
expense 52,155 47,344 202,872 199,488 Net interest expense on
project debt 10,880 12,452 48,391 53,734 General and administrative
expenses 27,869 26,445 109,235 97,016 Insurance recoveries, net of
write-down of assets (A) - (8,325) - (8,325) Other operating
expenses 13,698 19,227 47,968 66,701 ------- ------- ---------
--------- Total operating expenses 346,880 353,232 1,354,632
1,408,288 ------- ------- --------- --------- Operating income
60,332 60,588 195,835 255,965 ------- ------- --------- ---------
Other income (expense) Investment income 871 1,505 4,007 5,717
Interest expense (10,825) (10,928) (38,116) (46,804) Non-cash
convertible debt related expense (9,728) (4,617) (24,290) (17,979)
------- ------- --------- --------- Total other expenses (19,682)
(14,040) (58,399) (59,066) ------- ------- --------- ---------
Income before income tax expense and equity in net income from
unconsolidated investments 40,650 46,548 137,436 196,899 Income tax
expense (15,847) (24,776) (50,044) (84,561) Equity in net income
from unconsolidated investments 5,945 5,228 23,036 23,583 -------
------- --------- --------- Net Income 30,748 27,000 110,428
135,921 ------- ------- --------- --------- Less: Net (income) loss
attributable to noncontrolling interests in subsidiaries (2,471)
299 (8,783) (6,961) ------- ------- --------- --------- Net Income
Attributable to Covanta Holding Corporation $28,277 $27,299
$101,645 $128,960 ======= ======= ========= ========= Earnings Per
Share: Basic $0.18 $0.18 $0.66 $0.84 ======= ======= =========
========= Weighted Average Shares 153,796 153,417 153,694 153,345
======= ======= ========= ========= Diluted $0.18 $0.18 $0.66 $0.83
======= ======= ========= ========= Weighted Average Shares 155,171
154,673 154,994 154,732 ======= ======= ========= ========= (A) The
SEMASS energy-from-waste facility was damaged by a fire on March
31, 2007. The cost of repair or replacement was insured under the
terms of the applicable insurance policy, subject to deductibles.
During the year ended 2008, Covanta recorded insurance recoveries
of $5.2 million related to business interruption losses as a
reduction to operating expenses and $8.3 million related to repair
and reconstruction costs as a reduction to the loss related to the
write- down of assets. Settlement of the property damage insurance
claim occurred in December 2008. See Note 15 - Supplementary
Financial Information of the Notes to the Consolidated Financial
Statements included in our Annual Report on Form 10-K for the year
ended December 31, 2009 for a discussion of the insurance
recoveries. Covanta Holding Corporation Exhibit 2 Reconciliation of
Net Income to Adjusted EBITDA Three Months Twelve Months Ended
Ended December 31, December 31, ----------------- -----------------
Full Year 2009 2008 2009 2008 Estimated 2010 -------- --------
-------- -------- ------------------- (Unaudited, in thousands) Net
Income Attributable to Covanta Holding Corporation $28,277 $27,299
$101,645 $128,960 $85,000 - $117,000 Depreciation and amortization
expense 52,155 47,344 202,872 199,488 192,000 - 198,000 Debt
service: Net interest expense on project debt 10,880 12,452 48,391
53,734 Interest expense 10,825 10,928 38,116 46,804 Non-cash
convertible debt related expense 9,728 4,617 24,290 17,979
Investment income (871) (1,505) (4,007) (5,717) -------- --------
-------- -------- Subtotal debt service 30,562 26,492 106,790
112,800 127,000 - 121,000 Income tax expense 15,847 24,776 50,044
84,561 61,000 - 71,000 Acquisition-related costs (A) 337 - 6,289 -
- Other adjustments: Change in unbilled service receivables 4,964
7,319 18,620 14,020 Non-cash compensation expense 3,496 3,364
14,220 14,750 Other (B) 1,880 1,773 5,835 12,249 -------- --------
-------- -------- Subtotal other adjustments 10,340 12,456 38,675
41,019 49,000 - 43,000 Net income (loss) attributable to
noncontrolling interests in subsidiaries 2,471 (299) 8,783 6,961
6,000 - 10,000 -------- -------- -------- -------- Total
adjustments 111,712 110,769 413,453 444,829 -------- --------
-------- -------- ------------------- Adjusted EBITDA (C) $139,989
$138,068 $515,098 $573,789 $520,000 - $560,000 ======== ========
======== ======== =================== (A) This amount relates
primarily to acquisition-related costs associated with the Veolia
EfW acquisition in 2009. Acquisition-related costs are no longer
capitalized as a cost of the business acquired. Instead, these
costs are expensed as they are incurred as a result of a recent
accounting pronouncement which was effective January 1, 2009. (B)
These items represent amounts that are non-cash in nature. (C) The
components of Adjusted EBITDA are as follows: Three Months Twelve
Months Ended Ended December 31, December 31, -----------------
----------------- 2009 2008 2009 2008 -------- -------- --------
-------- (Unaudited, in thousands) Impact of SEMASS fire (1) $ -
$8,268 $ - $13,380 Stanislaus debt service prepayment - 8,007 -
8,007 All other 139,989 121,793 515,098 552,402 -------- --------
-------- -------- Adjusted EBITDA $139,989 $138,068 $515,098
$573,789 ======== ======== ======== ======== (1) This amount
primarily includes insurance recoveries received in 2008 for
business interruption losses related to the SEMASS energy-from-
waste facility fire on March 31, 2007. Covanta Holding Corporation
Exhibit 3 Reconciliation of Cash Flow Provided by Operating
Activities to Adjusted EBITDA Three Months Twelve Months Ended
Ended December 31, December 31, ----------------- -----------------
Full Year 2009 2008 2009 2008 Estimated 2010 -------- --------
-------- -------- ------------------- (Unaudited, in thousands)
Cash flow provided by operating activities (A) $149,505 $131,905
$397,238 $402,607 $370,000 - $420,000 Acquisition- related costs
3,930 - 4,619 - - Debt service 30,562 26,492 106,790 112,800
127,000 - 121,000 Amortization of debt premium and deferred
financing costs 474 1,518 3,265 7,023 7,000 Other (44,482) (21,847)
3,186 51,359 16,000 - 12,000 -------- -------- -------- --------
------------------- Adjusted EBITDA $139,989 $138,068 $515,098
$573,789 $520,000 - $560,000 ======== ======== ======== ========
=================== (A) Cash flow provided by operating activities
was negatively affected by payments for acquisition-related costs
related to acquisitions made in 2009. Covanta Holding Corporation
Exhibit 4 Reconciliation of Cash Flow Provided by Operating
Activities to Free Cash Flow Three Months Ended Twelve Months Ended
December 31, December 31, ----------------- ------------------ Full
Year 2009 2008 2009 2008 Estimated 2010 -------- -------- --------
-------- ------------------- (Unaudited, in thousands) Cash flow
provided by operating activities (A) $149,505 $131,905 $397,238
$402,607 $370,000 - $420,000 Less: Maintenance capital expenditures
(B) (7,792) (14,849) (51,937) (60,639) (70,000)-(80,000) --------
-------- -------- -------- ------------------- Free Cash Flow
$141,713 $117,056 $345,301 $341,968 $300,000 - $340,000 ========
======== ======== ======== =================== Selected Uses of
Free Cash Flow: ------------- Principal payments on long-term debt
$(1,582) $(1,831) $(6,591) $(6,877) Principal payments on project
debt, net of restricted funds used (C)
$(40,071)$(47,305)$(129,183)$(166,225) Distributions to partners of
noncontrolling interests in subsidiaries $(1,408) $(2,023)
$(11,004) $(7,061) Non-maintenance capital expend- itures (D)
$(6,718) $(5,771) $(21,682) $(27,281) Acquisition of businesses,
net of cash acquired $(13,910)$(53,265)$(265,644) $(73,393)
Acquisition of noncontrolling interests in subsidiary $(23,700)$ -
$(23,700) $ - Purchase of equity interests $ - $ - $(8,938)
$(18,503) Other investment activities, net $(5,496) $2,833
$(15,339) $(9,492) Purchases of property, plant and equipment:
--------------- Maintenance capital expend- itures (B)
$(7,792)$(14,849) $(51,937) $(60,639) Pre-construction development
projects (E) (3,439) (1,208) (13,233) (1,208) Capital expenditures
associated with technology development(F) (1,739) (1,284) (5,008)
(5,882) Capital expenditures associated with certain
acquisitions(G) (273) (2,851) (1,353) (17,126) Capital expenditures
associated with SEMASS fire (H) (1,267) (428) (2,088) (3,065)
-------- -------- -------- -------- Total purchases of property,
plant and equipment $(14,510)$(20,620) $(73,619) $(87,920) ========
======== ======== ======== (A) Cash flow provided by operating
activities was negatively affected by payments for
acquisition-related costs related to acquisitions made in 2009 of
$3.9 million and $4.6 million for the quarter and year ended
December 31, 2009, respectively. (B) Capital Expenditures primarily
to maintain existing facilities. Purchase of property, plant and
equipment is also referred to as Capital Expenditures. (C)
Principal payments on project debt are net of restricted funds held
in trust used to pay debt principal of $23.6 million and $66.2
million for the quarters ended December 31, 2009 and 2008,
respectively and $54.6 million and $21.6 million for the years
ended December 31, 2009 and 2008, respectively. Principal payments
on project debt excludes a project debt refinancing transaction
related to a domestic energy- from-waste facility in 2009 ($63.7
million) and excludes principal repayments on working capital
borrowings relating to the operations of our Indian facilities
($9.8 million). (D) Non-maintenance capital expenditures include
certain capital expenditures made at our facilities as described in
notes E through H below. (E) Covanta has entered into definitive
agreements for the development of a 1,700 metric ton per day
energy-from-waste project serving the City of Dublin, Ireland and
surrounding communities. Construction commenced in the fourth
quarter of 2009. Covanta incurred capital expenditures related to
pre-construction activities, such as site preparation costs, for
this project. (F) Capital Expenditures related to internal
development efforts and/or agreements with multiple partners for
the development, testing or licensing of new technologies related
to our energy-from-waste and renewable energy business. (G) Capital
Expenditures were incurred at four facilities that Covanta acquired
in 2008 and 2007 primarily to improve the productivity or
environmental performance of those facilities. Although, in
accordance with GAAP, this spending will be recorded as a component
of purchase of property, plant and equipment on Covanta's statement
of cash flows, management considers this spending as a component of
the cost to acquire these businesses since these major capital
improvements are required to achieve desired facility performance.
(H) Capital Expenditures were incurred that related to the repair
and replacement of assets at the SEMASS energy-from-waste facility
that were damaged by a fire on March 31, 2007. The cost of repair
or replacement was insured under the terms of the applicable
insurance policy, subject to deductibles. Settlement of the
property damage insurance claim occurred in December 2008. Covanta
Holding Corporation Exhibit 5 Components of Diluted Earnings Per
Share Three Months Twelve Months Ended Ended December 31, December
31, ------------ ------------ 2009 2008 2009 2008 ----- ----- -----
----- (Unaudited) Impact of SEMASS fire and insurance recoveries,
net of write-down of assets and tax (A) $ - $0.03 $ - $0.05 Net tax
impact from Grantor Trust activity (B) 0.01 (0.06) (0.01) (0.10)
Veolia EfW acquisition-related costs, net of tax (C) - - (0.02) -
All other 0.17 0.21 0.69 0.88 ----- ----- ----- ----- Diluted
Earnings Per Share $0.18 $0.18 $0.66 $0.83 ===== ===== ===== =====
(A) This amount primarily includes insurance recoveries received in
2008 for business interruption losses related to the SEMASS
energy-from- waste facility fire on March 31, 2007. (B) During
2008, Covanta recognized additional tax liabilities associated with
the activity from the wind-down of the grantor trusts that arose
from our predecessor insurance entities. (C) This amount relates
primarily to acquisition-related costs associated with the Veolia
EfW acquisition in 2009. Acquisition-related costs are no longer
capitalized as a cost of the business acquired. Instead, these
costs are expensed as they are incurred as a result of a recent
accounting pronouncement which was effective January 1, 2009.
Discussion of Non-GAAP Financial Measures To supplement our results
prepared in accordance with United States generally accepted
accounting principles ("GAAP"), we use the measures of Adjusted
EBITDA and Free Cash Flow, which are non-GAAP measures as defined
by the Securities and Exchange Commission. The non-GAAP financial
measures of Adjusted EBITDA and Free Cash Flow as described below,
and used in the tables above, are not intended as a substitute and
should not be considered in isolation from measures of financial
performance or liquidity prepared in accordance with GAAP. In
addition, our non-GAAP financial measures may be different from
non-GAAP measures used by other companies, limiting their
usefulness for comparison purposes. We use a number of different
financial measures, both GAAP and non-GAAP, in assessing the
overall performance of our business. We use Adjusted EBITDA to
provide further information that is useful to an understanding of
the financial covenants contained in the credit facilities of our
most significant subsidiary, Covanta Energy Corporation, and as
additional ways of viewing aspects of its operations that, when
viewed with the GAAP results and the accompanying reconciliations
to corresponding GAAP financial measures, provide a more complete
understanding of our business. The presentations of Adjusted EBITDA
and Free Cash Flow are intended to enhance the usefulness of our
financial information by providing measures which management
internally use to assess and evaluate the overall performance of
its business and those of possible acquisition candidates, and
highlight trends in the overall business. Adjusted EBITDA and Free
Cash Flow should not be considered as an alternative to net income
or an alternative to cash flow provided by operating activities as
indicators of our performance or liquidity or any other measures of
performance or liquidity derived in accordance with GAAP. Adjusted
EBITDA The calculation of Adjusted EBITDA is based on the
definition in Covanta Energy's credit facilities, which we have
guaranteed. Adjusted EBITDA is defined as earnings before interest,
taxes, depreciation and amortization, as adjusted for additional
items subtracted from or added to net income. Because our business
is substantially comprised of that of Covanta Energy, our financial
performance is substantially similar to that of Covanta Energy. For
this reason, and in order to avoid use of multiple financial
measures which are not all from the same entity, the calculation of
Adjusted EBITDA and other financial measures presented herein are
ours, measured on a consolidated basis. Under these credit
facilities, Covanta Energy is required to satisfy certain financial
covenants, including certain ratios of which Adjusted EBITDA is an
important component. Compliance with such financial covenants is
expected to be the principal limiting factor which will affect our
ability to engage in a broad range of activities in furtherance of
our business, including making certain investments, acquiring
businesses and incurring additional debt. Covanta Energy was in
compliance with these covenants as of December 31, 2009. Failure to
comply with such financial covenants could result in a default
under these credit facilities, which default would have a material
adverse affect on our financial condition and liquidity. These
financial covenants are measured on a trailing four quarter period
basis and the material covenants are as follows: -- maximum Covanta
Energy leverage ratio of 3.75 to 1.00 (which declines to 3.50 to
1.00 for quarterly periods after September 30, 2010), which
measures Covanta Energy's Consolidated Adjusted Debt (which is the
principal amount of its consolidated debt less certain restricted
funds dedicated to repayment of project debt principal and
construction costs) to its Adjusted EBITDA (which for purposes of
calculating the leverage ratio and interest coverage ratio, is
adjusted on a pro forma basis for acquisitions and dispositions
made during the relevant period); and -- minimum Covanta Energy
interest coverage ratio of 3.00 to 1.00, which measures Covanta
Energy's Adjusted EBITDA to its consolidated interest expense plus
certain interest expense of ours, to the extent paid by Covanta
Energy. In order to provide a meaningful basis for comparison, we
are providing information with respect to our Adjusted EBITDA for
the three and twelve months ended December 31, 2009 and 2008,
reconciled for each such periods to net income and cash flow
provided by operating activities, which are believed to be the most
directly comparable measures under GAAP. Free Cash Flow Free Cash
Flow is defined as cash flow provided by operating activities less
maintenance capital expenditures, which are capital expenditures
primarily to maintain our existing facilities. We use the non-GAAP
measure of Free Cash Flow as a criterion of liquidity and
performance-based components of employee compensation. We use Free
Cash Flow as a measure of liquidity to determine amounts we can
reinvest in our businesses, such as amounts available to make
acquisitions, invest in construction of new projects or make
principal payments on debt. In order to provide a meaningful basis
for comparison, we are providing information with respect to our
Free Cash Flow for the three and twelve months ended December 31,
2009 and 2008, reconciled for each such periods to cash flow
provided by operating activities, which we believe to be the most
directly comparable measure under GAAP. DATASOURCE: Covanta Holding
Corporation CONTACT: Marisa F. Jacobs, Esq., Vice President,
Investor Relations and Corporate Communications, +1-973-882-4196,
Vera Carley, Director, Media Relations and Corporate
Communications, +1-973-882-2439 Web Site:
http://www.covantaholding.com/
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