Investor Relations

Three Months Ended
March 31,

2017

2018

(Unaudited, $ in millions, except per
share amounts)

Revenue

$404

$458

Net (loss) income

$(52)

$201

Adjusted EBITDA

$51

$100

Net cash provided by operating activities

$9

$3

Free Cash Flow Before Working Capital

$(22)

$(8)

Free Cash Flow

$(17)

$(52)

Diluted EPS

$(0.41)

$1.53

Adjusted EPS

$(0.37)

$(0.09)

Reconciliations of non-GAAP measures can be found in the exhibits to this press release.

2017
Actual

2018
Guidance Range ⁽¹⁾

Adjusted EBITDA

$408

$425 - $455

Free Cash Flow Before Working Capital

$88

$100 - $130

Free Cash Flow

$132

$70 - $100

Covanta Holding Corporation

Exhibit 1

Consolidated Statements of Operations

Three Months Ended March 31,

2018

2017

(Unaudited)
(In millions, except per share amounts)

OPERATING REVENUE:

Waste and service revenue

$

312

$

286

Energy revenue

100

86

Recycled metals revenue

24

16

Other operating revenue

22

16

Total operating revenue

458

404

OPERATING EXPENSE:

Plant operating expense

345

332

Other operating expense, net

8

15

General and administrative expense

31

28

Depreciation and amortization expense

54

52

Total operating expense

438

427

Operating income (loss)

20

(23)

OTHER INCOME (EXPENSE):

Interest expense

(38)

(36)

Gain (loss) on sale of assets ^(a)

210

(4)

Total other income (expense)

172

(40)

Income (loss) before income tax benefit

192

(63)

Income tax benefit

9

11

Net income (loss)

$

201

$

(52)

Weighted Average Common Shares Outstanding:

Basic

130

129

Diluted

132

129

Earnings (Loss) Per Share:

Basic

$

1.55

$

(0.41)

Diluted

$

1.53

$

(0.41)

Cash Dividend Declared Per Share

$

0.25

$

0.25

(a) For additional information, see Exhibit 4 of this Press Release

Covanta Holding Corporation

Exhibit 2

Consolidated Balance Sheets

As of

March 31,
2018

December 31,
2017

(Unaudited)

ASSETS

(In millions, except per share amounts)

Current:

Cash and cash equivalents

$

51

$

46

Restricted funds held in trust

42

43

Receivables (less allowances of $11 million and $14 million, respectively)

318

341

Prepaid expenses and other current assets

61

73

Assets held for sale ^(a)

3

653

Total Current Assets

475

1,156

Property, plant and equipment, net

2,609

2,606

Restricted funds held in trust

23

28

Waste, service and energy contract intangibles, net

248

251

Other intangible assets, net

35

36

Goodwill

313

313

Other assets

219

51

Total Assets

$

3,922

$

4,441

LIABILITIES AND EQUITY

Current:

Current portion of long-term debt

$

10

$

10

Current portion of project debt

24

23

Accounts payable

75

151

Accrued expenses and other current liabilities

261

313

Liabilities held for sale ^(a)

—

540

Total Current Liabilities

370

1,037

Long-term debt

2,279

2,339

Project debt

141

151

Deferred income taxes

412

412

Other liabilities

75

75

Total Liabilities

3,277

4,014

Equity:

Preferred stock ($0.10 par value; authorized 10 shares; none issued and outstanding)

—

—

Common stock ($0.10 par value; authorized 250 shares; issued 136 shares, 
     outstanding 131 and 131, respectively)

14

14

Additional paid-in capital

828

822

Accumulated other comprehensive loss

(11)

(55)

Accumulated deficit

(185)

(353)

Treasury stock, at par

(1)

(1)

Total Stockholders' Equity

645

427

Total Liabilities and Equity

$

3,922

$

4,441

(a)  During the fourth quarter of 2017, our EfW facility in Dublin, Ireland met the criteria to be classified as held for sale

Covanta Holding Corporation

Exhibit 3

Consolidated Statements of Cash Flow

Three Months Ended March 31,

2018

2017 ^(a)

(Unaudited, in millions)

OPERATING ACTIVITIES:

Net income (loss)

$

201

$

(52)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense

54

52

Amortization of deferred debt financing costs

2

2

(Gain) loss on asset sales ^(b)

(210)

4

Stock-based compensation expense

9

5

Deferred income taxes

(3)

(14)

Other, net

(12)

2

Change in working capital, net of effects of acquisitions and dispositions

(44)

5

Changes in noncurrent assets and liabilities, net

6

5

Net cash provided by operating activities

3

9

INVESTING ACTIVITIES:

Purchase of property, plant and equipment

(81)

(62)

Acquisition of businesses, net of cash acquired

(4)

(16)

Proceeds from the sale of assets, net of restricted cash

111

—

Property insurance proceeds

7

2

Payment of indemnification claim from sale of asset

(7)

—

Other, net

—

(1)

Net cash provided by (used in) investing activities

26

(77)

FINANCING ACTIVITIES:

Proceeds from borrowings on long-term debt

—

400

Proceeds from borrowings on revolving credit facility

170

331

Proceeds from borrowings on project debt

—

33

Payments on long-term debt

(1)

(1)

Payment on revolving credit facility

(228)

(288)

Payments on equipment financing capital leases

(1)

(1)

Principal payments on project debt

(10)

(9)

Payment of deferred financing costs

—

(8)

Cash dividends paid to stockholders

(33)

(33)

Financing of insurance premiums, net

(7)

—

Other, net

—

(3)

Net cash (used in) provided by financing activities

(110)

421

Effect of exchange rate changes on cash and cash equivalents

3

1

Net (decrease) increase in cash, cash equivalents and restricted cash

(78)

354

Cash, cash equivalents and restricted cash at beginning of period ^(c)

194

194

Cash, cash equivalents and restricted cash at end of period

$

116

$

548

(a)  As adjusted to reflect the adoption of ASU 2016-18 effective January 1, 2018. As a result of adoption, the statement of cash flows explains 
       the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash 
       equivalents.

(b) For additional information, see Exhibit 4 of this Press Release.

(c) For the three months ended March 31, 2018, includes $77 million of restricted cash classified as held for sale as of December 31, 2017.

Covanta Holding Corporation

Exhibit 4

Consolidated Reconciliation of Net Income (Loss) and Net Cash Provided by Operating Activities 
     to Adjusted EBITDA

Three Months Ended March 31,

2018

2017

(Unaudited, in millions)

Net income (loss)

$

201

$

(52)

Depreciation and amortization expense

54

52

Interest expense

38

36

Income tax benefit

(9)

(11)

(Gain) loss on sale of assets ^(a)

(210)

4

Property insurance recoveries, net

(7)

—

Capital type expenditures at client owned facilities ^(b)

12

14

Debt service billings in excess of revenue recognized

1

1

Business development and transaction costs

2

—

Severance and reorganization costs

2

—

Stock-based compensation expense

9

5

Adjustments to reflect Adjusted EBITDA from unconsolidated investments

4

—

Other ^(c)

3

2

Adjusted EBITDA

$

100

$

51

Capital type expenditures at client owned facilities ^(b)

(12)

(14)

Cash paid for interest, net of capitalized interest

(33)

(26)

Cash paid for taxes, net

—

1

Adjustments to reflect Adjusted EBITDA from unconsolidated investments

(4)

—

Adjustment for working capital and other

(48)

(3)

Net cash provided by operating activities

$

3

$

9

(a)   During the three months ended March 31, 2018, we recorded a $204 million gain on the sale of 50% of our Dublin project to our joint 
        venture with GIG and $6 million gain on the sale of our remaining interests in China.

(b)   Adjustment for impact of adoption of FASB ASC 853 - Service Concession Arrangements.  These types of capital equipment related 
        expenditures at our service fee operated facilities were historically capitalized prior to adoption of this new accounting standard effective 
        January 1, 2015 and are capitalized at facilities that we own.

(c)   Includes certain other items that are added back under the definition of Adjusted EBITDA in Covanta Energy, LLC's credit agreement.

Covanta Holding Corporation

Exhibit 5

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow
Before Working Capital

Three Months Ended March 31,

Full  Year
Estimated 2018

2018

2017

(Unaudited, in millions)

Net cash provided by operating activities

$

3

$

9

$195 - $225

Add: Changes in restricted funds - operating ^(a)

(10)

1

10

Less: Maintenance capital expenditures ^(b)

(45)

(27)

(140 - 130)

Free Cash Flow

$

(52)

$

(17)

$70 - $100

Less: Changes in working capital

44

(5)

20 - 40

Free Cash Flow Before Working Capital

$

(8)

$

(22)

(a)   Adjustment for the impact of the adoption of ASU 2016-18 effective January 1, 2018.  As a result of adoption, the 
        statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts 
        generally described as restricted cash or restricted cash equivalents. Therefore, changes in restricted funds are 
        eliminated in arriving at net cash, cash equivalents and restricted funds provided by operating activities

(b)   Purchases of property, plant and equipment are also referred to as capital expenditures. Capital expenditures that 
        primarily maintain existing facilities are classified as maintenance capital expenditures. The following table provides 
        the components of total purchases of property, plant and equipment:

Three Months Ended March 31,

2018

2017

Maintenance capital expenditures

$

(45)

$

(27)

Maintenance capital expenditures paid but incurred in prior periods

(7)

—

Capital expenditures associated with construction of Dublin EfW facility

(17)

(20)

Capital expenditures associated with organic growth initiatives

(8)

(11)

Capital expenditures associated with Essex County EfW emissions control 
     system

—

(3)

Total capital expenditures associated with growth investments

(25)

(34)

Capital expenditures associated with property insurance events

(4)

(1)

Total purchases of property, plant and equipment

$

(81)

$

(62)

Covanta Holding Corporation

Exhibit 6

Reconciliation of Diluted Earnings (Loss) Per Share to Adjusted EPS

Three Months Ended March 31,

2018

2017

(Unaudited)

Diluted Earnings (Loss) Per Share:

$

1.53

$

(0.41)

Reconciling Items ^(a)

(1.62)

0.04

Adjusted EPS

$

(0.09)

$

(0.37)

(a) For details related to the Reconciling Items, see Exhibit 6A of this Press Release

Covanta Holding Corporation

Exhibit 6A

Reconciling Items

Three Months Ended March 31,

2018

2017

(Unaudited)
(In millions, except per share amounts)

Reconciling Items

(Gain) loss on sale of assets⁽ᵃ⁾

$

(210)

$

4

Property insurance recoveries, net

(7)

—

Severance and reorganization costs

2

—

Effect of foreign exchange loss on indebtedness

1

—

Other

(1)

—

Total Reconciling Items, pre-tax

(215)

4

Pro forma income tax impact ^(b)

2

—

Grantor trust activity

—

1

Total Reconciling Items, net of tax

$

(213)

$

5

Diluted Per Share Impact

$

(1.62)

$

0.04

Weighted Average Diluted Shares Outstanding

132

129

(a) For additional information, see Exhibit 4 of this Press Release

(b) We calculate the federal and state tax impact of each item using the statutory federal tax rate and applicable blended state rate

Covanta Holding Corporation

Exhibit 7

Supplemental Information

(Unaudited, $ in millions)

Three Months Ended March 31,

2018

2017

REVENUE

Waste and service revenue:

EfW tip fees

$

153

$

131

EfW service fees

99

98

Environmental services ^(a)

32

29

Municipal services ^(b)

45

44

Other ^(c)

8

8

Intercompany ^(d)

(26)

(23)

Total waste and service

312

286

Energy Revenue:

Energy sales

87

76

Capacity

13

9

Total energy revenue

100

86

Recycled metals revenue:

Ferrous

15

10

Non-ferrous

9

6

Total recycled metals

24

16

Other revenue ^(e)

22

16

Total revenue

$

458

$

404

OPERATING EXPENSE

Plant operating expense:

Plant maintenance

$

90

$

98

Other plant operating expense

255

234

Total plant operating expense

345

332

Other operating expense

8

15

General and administrative

31

28

Depreciation and amortization

54

52

Total operating expense

$

438

$

427

Operating income (loss)

$

20

$

(23)

(a) Includes the operation of material processing facilities and related services provided by our CES business

(b) Consists of transfer stations and transportation component of NYC MTS contract

(c) Includes waste brokerage, debt service and other revenue not directly related to EfW waste processing activities

(d) Consists of elimination of intercompany transactions primarily relating to transfer stations

Note: Certain amounts may not total due to rounding

Covanta Holding Corporation

Exhibit 8

Revenue and Operating Income Changes - Q1 2017 to Q1 2018

(Unaudited, $ in millions)

Organic Growth ^(a)

Contract Transitions ^(b)

Q1 2017

Total

%

Waste

PPA

Trans-
actions ^(c)

Total
Changes

Q1 2018

REVENUE

Waste and service:

EfW tip fees

$

131

$

10

7.9

%

$

3

$

—

$

9

$

22

$

153

EfW service fees

98

1

1.4

%

(3)

—

3

1

99

Environmental services

29

1

3.2

%

—

—

2

3

32

Municipal services

44

1

2.7

%

—

—

—

1

45

Other revenue

8

(1)

(13.1)%

1

—

—

—

8

Intercompany

(23)

(2)

—

—

—

(2)

(26)

Total waste and service

286

11

3.7

%

1

—

15

25

312

Energy:

Energy Sales

76

7

9.3

%

1

(1)

4

11

87

Capacity

9

1

13.2

%

—

2

1

4

13

Total energy revenue

86

8

9.6

%

1

1

5

15

100

Recycled metals:

Ferrous

10

5

46.3

%

—

—

—

5

15

Non-ferrous

6

3

55.8

%

—

—

—

3

9

Total recycled metals

16

8

49.7

%

—

—

—

8

24

Other revenue

16

5

31.9

%

—

—

—

5

22

Total revenue

$

404

$

32

7.9

%

$

1

$

1

$

19

$

53

$

458

OPERATING EXPENSE

Plant operating expense:

Plant maintenance

$

98

$

(9)

(8.9)%

$

(1)

$

—

$

1

$

(9)

$

90

Other plant operating expense

234

13

5.8

%

—

—

8

21

255

Total plant operating expense

332

5

1.4

%

(2)

—

9

12

345

Other operating expense (income)

15

(8)

—

—

—

(8)

8

General and administrative

28

4

—

—

—

4

31

Depreciation and amortization

52

2

—

—

—

2

54

Total operating expense (income)

$

$

2

$

(1)

$

—

$

10

$

11

$

438

Operating (Loss) Income

$

(23)

$

30

$

3

$

1

$

9

$

43

$

20

(a) Reflects performance on a comparable period-over-period basis, excluding the impacts of transitions and transactions.

(b) Includes the impact of the expiration of: (1) long-term major waste and service contracts, most typically representing the transition to a new contract structure, and (2) long-term energy contracts.

(c) Includes the impacts of acquisitions, divestitures, new projects and the addition or loss of operating contracts.

Note: Excludes impairment charges.

Note: Certain amounts may not total due to rounding.

Operating Metrics

Exhibit 9

(Unaudited)

Three Months Ended March 31,

2018

2017

EfW Waste

Tons: (in millions)

Tip fee- contracted

2.1

1.9

Tip fee- uncontracted

0.7

0.6

Service fee

2.1

2.1

Total tons

4.8

4.6

Revenue per ton:

Contracted

$

53.33

$

48.68

Uncontracted

$

65.38

$

68.45

Average revenue per ton

$

56.20

$

54.11

EfW Energy

Energy sales: (MWh in millions)

Contracted

0.5

0.6

Hedged

0.8

0.6

Market

0.3

0.2

Total energy sales

1.6

1.4

Market sales by geography:

PJM East

0.2

0.1

NEPOOL

—

—

NYISO

—

—

Other

0.1

0.1

Revenue per MWh (excludes capacity):

Contracted

$

67.86

$

70.85

Hedged

$

50.07

$

47.76

Market

$

44.08

$

24.44

Average revenue per MWh

$

54.56

$

53.76

Metals

Tons Recovered: (in thousands)

Ferrous

102

95

Non-ferrous

11

9

Tons Sold: (in thousands)

Ferrous

77

60

Non-ferrous

7

9

Revenue per ton:

Ferrous

$

193

$

169

Non-ferrous

$

1,192

$

615

EfW plant operating expense: ($ in millions)

Plant operating expense - gross

$

282

$

275

Less: Client pass-through costs

(14)

(10)

Less: REC sales - contra-expense

(3)

(3)

Plant operating expense, net

$

266

$

262

Client pass-throughs as % of gross costs

4.9

%

3.6

%

Note: Waste volume includes solid tons only. Metals and energy volume are presented net of client revenue sharing. Steam sales are converted to MWh equivalent at an assumed average rate of 11 klbs of steam / MWh. Uncontracted energy sales include sales under PPAs that are based on market prices.

Note: Certain amounts may not total due to rounding.