COVANTA HOLDING CORPORATION REPORTS 2007 FOURTH QUARTER AND FULL-YEAR RESULTS
COVANTA HOLDING CORPORATION REPORTS 2007 FOURTH QUARTER AND FULL-YEAR RESULTS AND ESTABLISHES 2008 GUIDANCE
FAIRFIELD, NJ, February 26, 2008 – Covanta Holding Corporation (NYSE:CVA) (“Covanta” or the “Company”) reported financial results today for the three and twelve months ended December 31, 2007. Diluted earnings per share was $0.47 in the fourth quarter of 2007, which compares to diluted earnings per share of $0.08 in the prior year comparative period. For the full year 2007, diluted earnings per share was $0.85, up from $0.72 in the prior year. Fourth Quarter Results For the three months ended December 31, 2007, operating revenues grew 24 percent to $395 million, up from $318 million in the prior year comparative period. The increase was driven by construction revenues from the Hillsborough County facility expansion, revenue from domestic acquisitions completed in 2007, higher prices for domestic waste disposal services, and increased electricity sales at two facilities located in India. Net income was $72 million for the quarter, up from $12 million in the prior year comparative period. This increase was impacted by lower interest expense, resulting from the recapitalization completed in early 2007, and a lower effective tax rate, driven primarily by the release of a valuation allowance. Cash Flow Provided by Operating Activities (“Operating Cash Flow”) was $98 million in the fourth quarter. Adjusted EBITDA at the Company’s principal subsidiary, Covanta Energy Corporation (“Covanta Energy”), was $155 million. Full-Year 2007 Results For the twelve months ended December 31, 2007, operating revenues rose 13 percent to $1.43 billion, up from $1.27 billion in 2006. The Company’s domestic segment operating revenues grew by 11 percent to $1.25 billion for the year, driven primarily by the Hillsborough County facility expansion, revenue from domestic acquisitions completed in 2007, higher pricing on recycled metal sales, and higher electricity rates. International revenues grew by 29 percent to $177 million primarily due to increased electricity sales at the two facilities in India. Net income grew 23 percent to $131 million, up from $106 million in 2006. This increase was impacted by lower interest expense and a lower effective tax rate. Operating Cash Flow was $358 million for the year. Covanta Energy’s Adjusted EBITDA was $552 million. The Company incurred $86 million of capital expenditures in 2007, which included $18 million related to the SEMASS fire and $12 million of capital improvements at facilities acquired during the year, and $55 million primarily to maintain existing facilities. In addition, the Company repaid $164 million of project debt and invested $110 million in acquisitions and $11 million in equity interests. In total, the Company reinvested all of its Operating Cash Flow back into the business.