Covanta Provides Update on Hurricane Sandy
Revises Guidance Due to Storm Impact
MORRISTOWN, NJ, Nov 07, 2012 (Menafn - MARKETWIRE via COMTEX) --Covanta Holding Corporation CVA ("Covanta" or the"Company"), a world leader in sustainable waste management andrenewable energy, today provided a business update reflecting theeffects of Hurricane Sandy.
All company employees are safe and the Company does not expect anylong-term effects from Hurricane Sandy. Many of Covanta's NorthAmerica facilities are located on the eastern seaboard and 12 ofthese facilities suffered temporary business interruption or winddamage from the storm. The Union and Essex, New Jersey facilitiesalso suffered flood damage causing the facilities to temporarilyshut-down. All facilities have now resumed normal operations with theexception of the Essex facility where the Company expects to resumeoperations within the week.
"Given the unprecedented scale of this storm, we are grateful thatall of our employees are safe and that we sustained so little damage.I'm proud of the way our employees prepared and responded. We are nowworking closely with our clients to help in their clean-up and wastedisposal efforts," said Anthony Orlando, Covanta's CEO and President."Our hearts go out to all those affected by the storm and we'recommitted to support the restoration efforts of our projectcommunities," Orlando concluded.
The disruption caused by the hurricane will result in a short termreduction in revenue, as well as increased expenses relating torepair and restart. The Company is assessing the full financialimpact of the storm. Based on current analysis, it now expects tofinish the year below the low end of the previously announcedguidance ranges. Therefore, the Company is updating the followingguidance ranges:
--Adjusted EBITDA is expected to be 490 million to 500 million (versus
previous guidance range of 500 million to 515 million)
--Adjusted EPS is expected to be 0.50 to 0.55 per share (versus
previous guidance range of 0.55 to 0.60 per share)
The Company anticipates that it will finish the year within thepreviously announced Free Cash Flow range of 250 million to 265million, primarily due to the benefit of its recently-announcedrefinancing, which will offset the adverse impact of the hurricane.
About Covanta Covanta Holding Corporation CVA is aninternationally recognized owner and operator of large-scaleEnergy-from-Waste and renewable energy projects and a recipient ofthe Energy Innovator Award from the U.S. Department of Energy'sOffice of Energy Efficiency and Renewable Energy. Covanta's 44Energy-from-Waste facilities provide communities with anenvironmentally sound solution to their solid waste disposal needs byusing that municipal solid waste to generate clean, renewable energy.Annually, Covanta's modern Energy-from-Waste facilities safely andsecurely convert approximately 20 million tons of waste into 9million megawatt hours of clean renewable electricity andapproximately 9 billion pounds of steam that are sold to a variety ofindustries. For more information, visit www.covantaenergy.com.
Covanta Holding CorporationExhibit 1
Reconciliation of Net Income to Adjusted EBITDA
Unaudited, in millions
Full YearRevised Full Year
Estimated 2012(a) Estimated 2012(b)
----------------- -----------------
Net Income from Continuing Operations
Attributable to Covanta Holding
Corporation63 - 7058 - 63
Net loss related to insurance
subsidiaries, net of tax99
Depreciation and amortization expense196 - 192196 - 192
Debt service:
Net interest expense on project debt
Interest expense
Non-cash convertible debt related
expense
Investment income
Subtotal debt service150 - 145150 - 145
Income tax expense53 - 6148 - 53
Write-off of intangible liability(29)(29)
Development costs1111
Write-off of renewable fuels project1616
Loss on extinguishment of debt22
Net income loss attributable to
noncontrolling interests in
subsidiaries1 - 31 - 3
Other adjustments:
Debt service billings in excess of
revenue recognized
Non-cash compensation expense
Other non-cash items
Subtotal other adjustments28 - 3528 - 35
Total adjustments
----------------- -----------------
Adjusted EBITDA500 - 515490 - 500
================= =================
(a) 2012 guidance as presented on October 17, 2012
(b) Revised 2012 guidance as presented on November 7, 2012
Covanta Holding CorporationExhibit 2
Reconciliation of Diluted Earnings Per Share to Adjusted EPS
Unaudited, in millions except per share amounts
Full YearRevised Full Year
Estimated 2012(a) Estimated 2012(b)
----------------- -----------------
Continuing Operations - Diluted Earnings
Per Share0.48 - 0.530.43 - 0.48
Reconciling Items0.070.07
----------------- -----------------
Adjusted EPS0.55 - 0.600.50 - 0.55
================= =================
(a) 2012 guidance as presented on October 17, 2012
(b) Revised 2012 guidance as presented on November 7, 2012
Reconciling Items
----------------------------------------
Operating loss related to insurance
subsidiaries 9 9
Write-off of intangible liability(29)(29)
Write-off of renewable fuels project1616
Development costs1111
Loss on extinguishment of debt22
Effect on income of derivative
instruments not designated as hedging
instruments(1)(1)
Effect of foreign exchange gain on
indebtedness(3)(3)
Other11
----------------- -----------------
Total Reconciling Items, pre-tax66
Proforma income tax impact22
Grantor trust activity--
----------------- -----------------
Total Reconciling Items, net of tax 8 8
================= =================
Diluted Earnings Per Share Impact 0.07 0.07
================= =================
Weighted Average Diluted Shares
Outstanding134134
================= =================
Covanta Holding CorporationExhibit 3
Reconciliation of Cash Flow Provided by Operating Activities to
Free Cash Flow
Full Year
Estimated 2012(a)
-----------------
Cash flow provided by operating activities from continuing
operations326 -351
Plus: Cash flow used in operating activities from
insurance subsidiaries4
Less: Maintenance capital expenditures(80) - (90)
-----------------
Free Cash Flow250 -265
=================
(a) 2012 guidance as presented on October 17, 2012 and reaffirmed on
November 7, 2012.
SOURCE: Covanta Holding Corporation
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