Covanta Holding (CVA) 25 Oct 192019 Q3 Earnings call transcript

Good morning, everyone, and welcome to the Covanta Holding Corporation's Third Quarter 2019 Financial Results Conference Call and Webcast. An archived webcast will be available two hours after the end of the conference call and can be accessed through the Investor Relations section of the Covanta Web site at www.covanta.com. That’s https://www.covanta.com/. The transcript will also be archived on the company's Web site.

At this time, for opening remarks and introductions, I’d like to turn the call over to Dan Mannes, Covanta's Vice President of Investor Relations. ahead. go Please

good conference and to third Covanta's Thank morning. XXXX call. quarter you Welcome

on will CFO. Joining our call the me today CEO; Brad President be and Helgeson, our and Jones, Steve

update, We an then your will questions. financial operational business take provide results review and and our

prepared prepared call. we of Those after be now supplement their slides slides with and remarks, the will portion www.covanta.com. These be site, these should in or the Web section Steve can our be During the Investor call certain audio referencing Brad remarks that slides. to this Relations to on of accessed prepared listened conjunction

expectations. on to could cause regarding differences following and SEC. The forward-looking statements factors can Now notes. such statements the the in with be registration Safe those the our and actual other differ company's Information preliminary may filed may reports contain and that discussion results found Harbor from materially

of of is contains this time-sensitive The of call October XXXX. that broadcast, date live the information conference XX, content as accurate only this

not Covanta any without retransmission unless redistribution, update by to the required assume prohibited. consent obligation our Any information, rebroadcast written of in express forward-looking any law. the of call form is or do We

calculated with prepared in measures. accordance financial these information includes statements, been have in financial presented which be The non-GAAP isolation with U.S. should considered measures in are not Because they not accordance GAAP, from our GAAP.

and them, was was SEC regarding how which see For well to use night press please our for limitations measures Form last X-K. and we their our more information issued usefulness as purposes, on the comparative definitions non-GAAP of as as furnished to release,

call Steve Steve? Jones. our and that, President like to With over to the I'd turn CEO,

everyone. and Dan, Thanks, morning, good

my using the on results deck, discussion and those Slide begin I'll are summarized of quarterly X. on Slide X, For the you web

million flow. quarter, continued EBITDA on million $XXX of cash free During our operating generating the third of executing adjusted $XX plan we and

the adjusted million on million cash of year, are of million in $XXX and $XXX $XXX we flow. year performance and quarter the remainder With affirming of of our EBITDA line free sight to solid guidance million of to full the $XXX

to year-over-year million more as in adjusted because even to price bear results, XX% we've the X% the overcame $XXX represents the EBITDA We adjusted growth decline EBITDA X% seen Taking context headwind quarter. many around provide able growth this of mind of in we in commodities a moment our the of drive organic we’re sell. of that plus

of of organically. critical assets performance and to reliability fleet grow Energy-from-Waste our is The our ability to

tons increase quarter, processed of million X% During year. waste, over the an X.X we last

includes production levels volume or growth in This last X.X% of plants the continue well to at as record same-store our year. tip contracts as fee tip as September inclusion run fee Palm Beach of some acquired largest near

no accident. results operating These are improved

Over the operating improve operations we last management costs. supply chain Six several and and and our have instituted techniques Lean to the revamped years, reduce Sigma

and quarters we’re in Further, way we those complete, track we've expect perspective a from consistent the plants invested of our the record operating maintenance to paving year year on dollars three production. performance. With right are another maintenance XXXX be and of to

financial Our prices key across waste sustainable performance. ability primary disposal and driver is fleet EfW end has been our to capture of our market waste improving a the

muted strong Tip overcoming higher spot quarter fees X% effective typically basis were prices, up growth the contractual with profiled third waste same-store escalation. a and over on in re-contracting

deliver we say, expect to the a to Northeast, waste As good tip assets and I growth be especially it’s year. to of over a price for fee our with X% like company the in time

focused a into plants. In product waste volume processing unit our on increase material facilitate flows that MPS. order facilities, high-value volume through to was revenue maximizing growth internalized This EfW material Covanta the drove these improvement. to facilities we’re or price XX% is waste Environmental profiled Solutions both in of of same-store our our and EfW

MPS XX% through quarter, increase revenue sourcing service capabilities. increased we our as by to our customers in profiled internalized these continue the waste more and The complementary to assets utilize

rate time, supporting to over internalization our business. grow waste We expect expanding this further of profiled

While profiled many key opportunity area in waste comes waste. is medical forms, regulated of a

three grew During permitted to continue that waste the waste. ramp accept regulated XX% third to quarter, are revenue we by volumes to over medical as this we plants our Energy-from-Waste

strong are a collection companies of with modest medical wholesale the waste regulated of services amount working medical to we source growth still be profiled very the to more to representing and revenue, overall waste provider We leading While regulated disposal aspire see waste industry. potential volume. that

long-term our well we’ve while of system disposal total opportunities, TAPS. first creating reduce been our developing new become to order sustainable revenue processing ash to as In ash cost more or

first at TAPS plant currently The under Fairless processing the Pennsylvania metal is construction Hills, facility.

equipment. the had long-term by quarter the to the and operational we While to fully expected type for This construction its of first the we've an bit is fourth be system optimize Covanta. this timeline a exciting opportunity year, extended

we moving So some of to to We we system early entire the components into anticipate up year. one commissioning first beginning now this this later next right. sure make want start get year, before

in the This In in the in various materials we’re operations now couple from non-ferrous and equipment recently quarter scrap. separating of lower higher zinc, as heavy and copper processing third recover. mentioned began technologies we late mixed last area, to the further non-ferrous metals, like of metal value quarters, types value the we invested we’ve separate

over three appeared we to after not ton we steel in stabilize decline or quarter, soft call, the in quarter scrap, the As ferrous, this per the continue second in pricing third HMS we of On a the quarter for on a to see environment second many discussed months. has $XXX commodities the last and the range. improved sell

another prices what in do. $XXX these markets At per see reaching should will believe October, we which ton. then stabilize That’s prices. levels, that scrap In price took a markets Index down these the with leg the reduction flows

scrap to see we longer demand for the And online new capacity mill next comes ferrous over years. growth term, expect two domestic as continued

However, of to prices recovery timing should fund current us difficult levels, our history tells the at equilibrium again is prices above that market well predict.

the non-ferrous we product aluminum. is scrap side, largest On sell the volumetrically

much the this volume China in the For pricing of world of year, struggled smelters to reduced softened it the rest the has product the accept material. the of has and will excess absorb as

just to trade non-aluminum more from led components they non-ferrous three the at has we’re Old meaningfully is reason severe pressure when $X.XX Index per of under another technology This investing at or separate with price. the price times pricing the why $X.XX This price per to in in pound. down now often This the October. pound as is XXXX averaged stream Cast

Lastly, we some the levels. stability recently at on have historically low energy, seen albeit in price,

reduce exposure energy in As you a know, formulaic us program well volatility. to hedge served market. has This we have this our to

I’ll Earls conclude and and my progress we Gate are and project with construction towards we’re activities. and and remarks our engaged Newhurst swiftly well EPC Protos projects Rookery to now update and partners, with actively project forward. structured well attractive a move continue the Those financial into brief our UK are on development contractors to close. lenders

mentioned XXXX, partnership the in reach project right positioned Protos with behind I forward GIG well in our more these stage to steps. goes well. early project last and Newhurst likely as is have We our earlier The and that financial these close while geographies development other providing close four quarter, when along material in we the efforts with as Further, financial are XXXX. projects to as projects reached moving look remains color projects other more on in as beyond there’re

to over call detail. the hand the results Brad I’ll that, financial greater in With to discuss

outweighed third financial our contributed quarter. Thanks, of Slide the Organic on review EfW Steve. growth, the X. was of with lower construction Good up revenue plant million morning, the everyone. million I’ll XXXX. excluding of $X impact revenue the performance $XXX from for strong and begin in waste Total as prices my million, higher commodities, XX quarter quarter revenue production

Station, the a Manhattan quarter negative to Palm offset contract had revenue impact added million we Marine Transfer $X and QX decline metals. divestitures. with by the in saw acquisition operations Commodities and Beach transitions the the related Transactions quarter. market for September the in in start-up of XXXX partially $XX a revenue million $XX lower of million added energy prices Long-term to as

X. EBITDA $X was of million $XXX compared million quarter in to the quarter, a the to Adjusted Slide third increase on XXXX. Moving

prices Excluding waste production commodities, planned maintenance of adjusted EBITDA than improved higher offset benefit and by $XX higher plant million as organically quarter. the more this

into the comparison meet challenging be respectively, would organic quarter to and growth target, year X% coming knew remains EBITDA we and As you we fourth ahead interruption in $XX $XX the business remind insurance million in We X% would that our and look proceeds it case. full annual to given this million, year-over-year will the year, adjusted XXXX. I lap that this received to

However, of range we excluding in to be the proceeds. target impact expect our insurance

prices, divestitures. EBITDA commodity translated as from again the $X Marine just were directly adjusted Transfer from offset net million contribution of transactions line. headwind acquisition The added Station from the million quarter benefit I the revenue in to discussed, EBITDA Beach as Palm and $XX Manhattan to The the partially by

full expect adjusted we $XXX For in XXXX, EBITDA million year the continue the to million. $XXX to range of

last compared for slide metals in as a further can seen $XX the appendix see by further to prices metals revenue to expectations, to $XX in As outlook noted, previous quarter's We’ve Steve million revised since reduction million we’ve range our presentation. a you call. the

prices as non-ferrous, a Hills This separation well at lower on ferrous price Fairless the our reflects facility. market lower equipment as of given and aluminum sales timing start-up of scrap average processing

to Further impacting year, sales recovered value. have Mint coins U.S. historically we non-ferrous currency and for delivered mutilated this the

its response Mint program redemption closed has the fraudulent in this activity. However, temporarily year to

currently a awaiting as inventory processed in coins we’re So holding result, shipment.

the all our move factors much Though lower essentially this it of metals be noted that else being these us represents to our sales business timing. should will total, and in likely of range. end equal, guidance In

$XX Free the was to X. Turning Slide QX year. cash flow in last quarter $XX compared to as million for million

working to was by While the cash and net adjusted quarter, cash capital lower funds million XXXX. compared inflow and QX million $X a in in in were restricted the $XX outflow EBITDA higher QX

last the dispute of in year. of and holdback high-yield related components largest of last have payments QX which two the interest amounts accrued refinancing payment construction of and previously cash we year's bonds on were the shift plant reduced the The settlement this in Durham to following which timing a payment interest York for final

unchanged improvement year cash is free is for range. fairly and the the in in typical contemplated Our should Therefore, fourth flow expect us. a in working for full pattern you guidance items were cash and flow which these always seasonal quarter free capital sizable a

Now growth investment X where Slide to please review activity. turn I’ll our

just of start-up the to the of in Manhattan growth, most year, nine Transfer support Over over equipment $XX million invested the Marine first months we the Station. notably

delivered and spend being under we with Year-to-date, we spent little spend fourth XXXX quarter further $X but anticipate the TAPS have increased with installed, in now a on we construction. million equipment as complete in

our our In have site we million where Gate Earls Rookery. the fully work spent the as of we UK, proportion equity primarily $XX as investment preconstruction at which represents well primarily have in funded year-to-date

A couple of here. reminders

net investment cost parent remaining company equity Rookery the project funding at was level requirement from in received about of we partners close, at the financed $XX XXXX. bridge our our million the anticipate premium recovery the First, and and financial in of from

specifics Second, include until does investments time. provide funding financial of Newhurst more they in the Protos that not for timing amounts on those at projects forecast and requirements close. this and equity our yet We’ll reach

$X.X September Slide provide XX, XX where from At up sheet. to about billion, on an $XX our was I’ll turn Please net million debt update QX. balance

XX ratio the X.Xx. Our X.Xx, leverage ratio senior credit June facility was unchanged covenant and from consolidated was

available liquidity revolver $XXX Our nearly under was million. our

enhances tenor tax-exempt we TAPS coupon, of series and bonds represent energy unsecured the long-term our first and of bonds, Pennsylvania. issued flexibility from During XX-year on green to quarter, cost, very spending that With and funding further X.XX% primarily a waste attractive fund structure. plants our term capital in these our the

and of as We domestic this means tax-exempt funding over now we’ll this future an corporate market to like the have investment. million look into bonds $XXX of efficient in outstanding tap

for Steve it Before to over to it like I Q&A, I’d concluding hand comments. some turn to back

want The over I Operationally, few and and last we these things. take expected. Thanks, year are performance people investments in is yielding quarters. the several a evident plants are and our well to investments the operating our our a of the benefits Brad. reiterate in moment going growth

pricing waste market, supportive U.S. to volumes which from irreplaceable environment declining assets. we options the waste In strong and disposal driving very with continue alternative a our benefit is at

I progress several remains and also the remain initiatives. TAPS to growth with improve major broad-based very on a excited about fleet. our opportunity opportunities our throughout sustainability profitability

U.S. four on plants in the growth well initial as our target reaching well see development UK the we’re of markets, opportunities we in in way broader front, our On the to international as and

With that, on move operator, to Q&A. let's

Instructions]. [Operator

Michael Stifel. from line question Hoffman of comes first the Your from

is line open. Your

Thank Steve, And, you better. very questions. feel much for hope I the you

was when something I at I know. Friday, off. to started all. going speak couldn’t I say I first Last

is this an So improvement.

So thanks for understanding.

just I a what get XXX-XXX I able remains clarity still if saying? that coins, on the the you sell it. to mutilated can at understood if the were Brad, Is guidance you side, you’d midpoint? were be

coins on issues the are is a few us one of mutilated line. The non-ferrous that revenue impacting

Of course, the commodity underlying first is prices. the one

The increasing second coin. to the generally is mutilated this, another then the metals our heavy scrap it speaking and aluminum. the price alluded the And is from by progress lights, piece on sales average the Steve separating, so of

mentioning. enough significant to worth certainly relative where So coins, all thought be pin it were that going to we was mutilated was I it wouldn’t it we on but

Okay. in lower half? the you But sell mutilated could telegraphing the you coins, would if we’re be

Yes. metal. move us The the back to wouldn’t coins up alone mutilated

that’s Yes, right.

Okay. was That’s trying what to understand. I

Okay.

reasonably a UK assuming XXX and from over that’s you UK the year business in get year. in from leverage conditions the lousy XX the seem midpoint U.S. of under XX from would do your and seems commodity at have like, free a You part back domestic anything you there cash million the to doing comes in would guidance. It and environment now average the five-year you’re That’s supposed model XX living of good. look that this the with, a million the XXX on XX preclude period that a the come year to you Is million place? million target and a

Yes.

short the no. is answer So

you out have waste. focused impacted the of number the ash but There growing growing profitability opportunities were underpins portfolio, on, our top recovery, initiatives of our that plants, TAPS, the the you that with the on Covanta plan I which know, And of profile of management we’re it waste, is we’re commodities UK, what think and to then domestically. metals target solutions, and and the the are That’s grow then, we referenced. the focus markets on that underlying eyes looking production we horizon in our prices. as put million a none drivers strategic medical components immediately un-impacted by that’s when and by course, other on are international of originally XX environmental the ultimately in out capabilities commodity regulated of

So unchanged. all of that is

have impact As it materially little equal, order they being and path million probably to of results. best are today our on are that’s as set regards going XXX the the makes specifically, that guidance And to they to our prices just we step it commodities $XX obviously were you longer. impact about to think back, recognize commodity results all than else where is when a XXX way probably so to the I lower when think we the if bit

get to lowering XXX. going It’s you’re to longer. number. the take still you’ll permanently the that you But Okay. It’s not

that’s saying. we’re Yes, what Steve. is This

on of mean, call when snap an obviously, about depends time to you not takes back right? to take view the environment to important a think start when the the on some get And commodity and but consideration XXX. does that sure can on it the We’re that’s it everybody to

kind have questions. I two high-level type of housekeeping Okay.

that expansion lately; good why not equipment. other for has different? company press peer You pollution contrast a the around Can air a one you landfill have had and you’re particularly ash

those Yes, we saw two.

air pollution second you at take look the let’s equipment. one If – first,

other around that having XX not And I one bag facilities facilities in have a house this the facility. we don’t I particular a issues only have is company think with think bag houses. our now, out of two

that’s think you’re referencing. I what

the going now in when facilities. of We’re process the we’re to add two determining to bag houses

maintenance going it bogey So out we the in and but put the – decide matter will lumpiness that it’s number limited general add in from isn’t much bag about there. to on we’ll inflationary we as really year present vary that a the to think houses,

part So -- With again a that the perspective. pollution was first respect got control handle to air we’ve good on from

denied for Ash. got permit They a --

Yes.

ash, multiple multiple have responsible have most landfill ash able or plants of to – an order get our in We ash where we the options be ash put monofill. our an for we’re to into in

not about particularly So we’re worried that.

place really be right. I an programs is we other think we’ve And from what of then do able in got that to good back to TAPS, up need ash to standpoint. the side

the to ash that interested ash of us I to prepared remarks financially TAPS and going one use that’s and we’re a the of in an from So allows go is the sustainability reasons in volume TAPS monofill. reduce standpoint words into my

very on would and a Fairless at ash even will reduce reduce help Hills going But volume don’t. that the that had excited if we needs issues, what’s right we’re about we that to find So of now which us to home.

from All last hedging XXXX should this we tell Brad, be then for rate the at me, what point? can right. And using you us

terms price? In of

Yes.

we’ll it’s nail hedging year. be it’s would to little - this February to that year, specific on little modestly think than a early I Yes, to lower – out for Though a in going overall number the that. expectation a put we’re still that hedged next rate I for reasonable think be because so

the emphasis on word With modest?

Yes.

emphasis is think appropriate. that I

Okay. All right. Thanks.

Thanks.

from question Oppenheimer. Your the comes next from of line Kaye Noah

line is Your open.

throughput. in want I Thanks. question a around particular ask increasing you to operations plant the and

getting think in this this is million that’s You’ve plants, got think an to operations a just increase uptime X.X volume about you improved growth revenue. million $XX area ton increase stable and million fee I talked bump quarter about tip and X.X% same-store broadly in I $XX when

permitting under of drive expansion much the as can in you the permitted to to Would you for the truly have throughput? really to of throughputs? is capacity? fleet of is permits you stable cushion give how operations? here how Just question a seek the much runway lean close to much you How guess sense increase I operating you operations, So improve capacity higher see operations need us

I’ll start then with in. jump can this Brad and

We we the this not off, it operations, picked so stable all through yet. at know So that quarter. biggest came using first are our plants actually ones we’re our clients, they

– growth well using we’ve the example, tip Essex, really operating big reason fee see basically hours operator about is had same-store is places plants, stable a So for if the operations XX like the board on your me X.X% as talk seven you’ve heard before because think point you’ve They’re or a this which day, Hempstead. you and is best this at these days been week.

so working well. that’s And

will plants, We other from it size. get smaller some more to operations leverage which as little out stable move are a our of we in

the And will continue standpoint, a would this try how from that of waste so limit on we to we with benefit the we particularly will operate way it had it So period permits of a waste great our the permits. less is you our be some plenty the time. market, for this operate say is a downtime. right in The all of is we limit waste there’s saw now, quarter which permit there path can market out time. at I operate to

able move operations downtime So to what we you we we forward. stable because that’s plants to downtime as at have of that and our we we’re do stable some as were – quarter always on were expecting able past look to this limit operations,

a as of just few relevant big what to permit the it the would limitation seeing we’re production hasn’t our the relates in plants, past I is add Yes, now the at to been. it whereas permits

if the to see if plant a at high operating is we’ll modify So in to level. situations flexibility the sustainably those us permits for is there look

on think see then into and type that to place the that’s up, on would full the us in the returns one an processing you’re first additional Okay, capital project. XX% And long IRR fleet? need that standing to you give I plants? comfortable get talked take cover in starting it just that facility, the And the past to put around the you think TAPS facility to about how operate the you’ve very How levered capacity enough in in helpful. of do before you idea long might of in put

prepared We’re and commission commission plant of to this going later start in next mentioned kind to of full then the year my that year remarks. I some and of the aspects

I expect plant sure to say make quarters so new to. think technology, way other is the novel, in used size everything’s bigger particularly I’d used I’m couple the putting This to industries, been places. in we than order working will, for not worried relates is in risk. ramp to our run you a and needs that has been if – it it about of not in industry up it’s technology as the the we’re so This some other it’s technology

we’re couple out So quarters. of test to need that’s say, these, what going to over let’s

We sands testing to that sure – roadways. approved in a through aggregate then go de-wasted, process gets want to it’s is in also make be we effectively got used which produce the [ph] DOT the that to in order

couple the we so used saw Pennsylvania going that looking you then on can frankly projects, at – then, take in own time they’re TAPS, And plants so work item it TAPS Fairless next with quarters to and move on long permitting. of one Hills also applications rollout the it So the now, clients – in and right to we’re our a quite going out. be the discussions and lead other that before when but to that’s was

the the lining in process up of we’re now to well So resources permitting underway. get the

Again, timeline. is we’ll to Fairless little indicator to whole even so rollout waiting see And and pacing on long over Hills probably something say two, fleet, saw in end depending this be going of it the variable the state. like a as that leading How quarters start TAPS you probably item So operate. one, take permitting. later the these that I’d we’re was and three the to process as the years, couple they’ll the that’s that on how of

helpful. That is very Thank you.

Sure.

Tyler Brown question comes from of the next Raymond from James. Your line

open. is line Your

guys. Hi. morning, Good

morning. Good

Tyler. morning, Good

do Can on the there? guys to you exactly job think influenced color I it’s being on come domestic mills, you to that you additional destocking in it’s Great or what’s going back the any give HMS. any relations do us controlling market? but think U.S.-Turkey on that Hi. Do at color want just controllables, by

comments, a leg October both. you saw of HMS and around in Index, it’s comments the they Turkey a saw recent we’re again. could some We go the going little move noise – to there’s that from how down have Yes, some to to think going bit situation. some probably and from on out look destocking back We’ll there’s and – been at Turkey now take X we’re certainly The that’s it Nucor’s bottom other We think generally on. and is impact companies out. that the up that start at plays see

a we’d the that all and rid reclaim get alternative in we we’d it, think have in stay matter, put us metal we’ll to of unlike to of the then some The to other I it ash ash. as folks to continue is the to had can. – get for general rid pay pay

So it where the of to bottom Index from moving us and does to out. me at makes collect the for and a lot metal then start of comes that going kind it’s we’ll feel the see to HMS we’re But kind and around it here. of up sense

to so the cash cash, restricted kind just Brad, then, And want of this bottom on to of Okay. I benefit. get free

to this quarter for 'XX. think So restricted I was flows I to see XX XX that increased the from funds

what’s cash if But just So that is will you talk two, on wondering flow you maybe in one, can about there? number and going recurring be this XXXX beyond? if a can talk,

two really Sure. it. pieces There’s to

in a with this under year, and and the come of take door I’ll earlier We So just increase. right was first one had out cash service through why out that’s capital, and you movement account fee but that. X neutral change was and client essentially working our Essentially contracts in capital so restricted increase the an and the went for restricted guidance explains the one change million. had out accounts range back you a this a in really a the saw to and working net that offsetting for of fund the about range

been one next is it go more has will year. that piece and other away The permanent

for years, the a the the from cash last few distributions cash to ownership So earlier this Valley related structure on of annual concluded trust an been distributions year. Delaware facility. we’ve Those basis receiving

maybe on essentially equal, plus being a but you or a quarter, minus else the it restricted to zero sustained all be basis time. expect in should over line should So fund

Okay, And capital and the it’s know that’s working helpful. then maybe early. on I side

done is recurring – that’s You maybe even that But probably year. positive budgeting. that 'XX that? this haven’t think Is all is something of into well I that so your or beyond as

they over it’s a Yes, are management. few I gotten know One, is initiative of you but capital as couple that collections as working long-term say about guess last times, I’d years and and primarily a of of efficiency probably the also talked things. we’ve several we’ve AP lot a out value

the $XX persistent modeling isn’t long us million, out reduce that to a isn’t to capital continue working quarter-to-quarter million over specific assumption this can efficiencies it’s be the opportunity indefinitely. time. to That would hope to $XX as over a So appropriate being the a over I or said, be assume going lumpy business year-over-year. this term to over comment but ultimately, probably working in long will benefit get and we’re will XXXX, to the ultimately term necessarily – capital That going time. And

put final at far just position to on as the a again, can really and lumpy moment as a so we’re not point it. in be So XXXX, it

And But or it? of maintenance that are at is XXX about CapEx. midpoint so XX% maintenance total XX% to spend the that maintenance then that or to is looking I’m way very on grow right That’s EfW exchange the attributed the that and for and spend, should I we I Does helpful. maintenance think CapEx curious. you assume think guys maybe think year this that is about just maybe

year. that down up My and lumpy similar could working be a capital. my to little response unfortunately is can response to and particular in it It going move to a on sound

time. how the going plan minus alluded a to that’s going forward this towards is Steve operating look going underlying spend long-term to spend conditions. minus year, more what’s plants also earlier, to grow profile weighted with the of to a or it aggregate that plus subject of inflation of trajectory or is maintenance spend now capital keep is be peak the and required maintenance these And and okay, and annual spend. and or at what that’s the expense For what them given that’s to at and we an over to plus versus going In is is much inflation maintain

So all you necessarily I and and XXXX. guess sorry, that mix what of summary XXXX that, in extrapolate extrapolate would XXXX in can’t at – and XXXX look be of

interesting. And my with these two Steve tip facilities? are large one, so plants houses, fee bag last these then without Okay,

so are The at, Yes, we’re looking becoming we works and use what – are technology and both technology them The do? It other more are. a houses of own called just at okay, do point. non-bag popular ESP. want They that this technology to fine. these plants bag house we is

out rather to want we’re looking okay, So changing to right the do? and house bag what What’s than we’re ESP? a – as now I timing mentioned, on do we

the appreciate I okay. see, guys. time. I Thanks,

Sure.

from line the question comes Sachs. from Brian Goldman of Lee next Your

Your is open. line

the taking it has free the weighted flow through XQ talked cash free Hi, Brad, obviously guys. you’ve a it pieces seems years. know then how going is the of being in of did in topic moving you just some kind much little kind you back year to see questions. in us moment, need for driving been cash hit morning. that you ramp steep again than that the year But dynamics that past walk can of versus the past Thanks the full derisk seen Good Maybe cadence now? XQ this more I And do the of bit through we’ve here. for to that flow right years. target a that

Yes.

the historically based fourth a driver rest to weighted early. for And the out. going the actually Really So had quarter. it’s We is the how ago. we cash have the I to working be of free in couple on see mentioned of that be capital playing year heavily saw precedent we years

And taken point. the How a you solid guidance out thinking from of about this to you’re you know down pretty hand cash flow in see being end. where that as from kind I a EBITDA perspective, perspective? at are the lower settling you’ve derisk

guidance. we comfortable feel the with Yes,

Yes, whether guidance. shown we’re that the or receivable order in that working can get we’ve there’s to payable, adjust capital in comfortable The past, in quarter. levers as side, with working the we fourth capital positive accounts it’s accounts

really terms if just volume business? just trying needle the does of strategy not a then that whether impact, of move successful, you’re the some perspective And elaborate metal that? switching enough. Okay, given maybe to technology be pricing the deploying a get on mentioned help gears in side move around you and call a Can timing bit, that know earlier investing then what And bit in a there. or a the from non-aluminum of potential to I potential the maybe goes fair higher the just you in to that handle on metal into could

– Yes, clearly now. something actually in it’s operation it’s

So a and don’t split metals take taking so aren’t non-ferrous in you’re doing at using color this what some piece out looking it’s does was to technology its of think – who from other There’s necessarily this. kind got note I color I interesting. non-ferrous looked yesterday. we’ve in order our order parts. basically about Steve companies sorts at and management the that sorting, to into Bossotti

with metals. non-ferrous the non-ferrous some the metals, price heavier And metals some and the other of darker the darker Xx so of traded

it can needle. So move the

said, a in some our through to unit. see it You out quarter. And It’s order of stockpiled we of to we’re make And take don’t I now actually run had I’ve third order this been in operation need the its to in in it – non-ferrous the as capabilities. of impactful. lot advantage it to unit

lot, Thanks a enough. fair Okay, guys.

Sure.

Your the from comes Macquarie. next of from line Storozynski Angie question

line Your is open.

Thank you.

it. picture a were you two, to to flow bigger up net price EBITDA? commodity your more But you’re Nobody really directionally to get us provide debt the current in at your weighing free on you that volumes, you year-over-year should And a given guidance would have dividend see and we I environment and XXXX not question. persist least your really has about tell asked support can we see if that commodity is to comfortable if ability the Xx? So I think willing question would understand and continue a prices growth that’s pickup EBITDA how So cash and one. the to already with sales are your in your

Sure. Hi, Angie. It’s Brad.

are organic and about guidance is that. a think XXXX our will, specific at next which that rate you impact for all focused would the that’s for we’re when that So that building few is, sort growth of blocks, top, is initiatives One you encompassing I’ll whether or we’re has of of it if X% on I of But directional. view sort changed not to on there Nothing the said X%. giving you year think XXXX on the mention. underlying

So XXXX our that’s us when we count something from you on can guidance. rollout

is course predict. variable big a can’t that we other commodities. The one of It’s

prices But think that I that’s our spot if not thumb headwind look of kind if handy then that, XXXX, of And would did extrapolate course of across year-over-year. imply that you you necessarily about impact. be on and $X at you view. about rules move, HMS current about the impact EBITDA $XX a that calendar that it’s months, $X for year basis what full kind – to could we’ve to talked of million XX every for a frame million it’s people a revenue are help year

$X.XX X is is million. which about every aluminum, X the for index For Old to underlying million Cast,

to how based be going would that’s it your for view what year, on flow commodities an for for into XXXX. So is estimate next

flow as on we view in flows our the that based dividend view the going not based to the that’s particular we’re we’ve long-term The that or in sustainably, is any certainly be dividend. many extent the the policy any period. growing our is to supports And long-term times, generation business cash said as that on not behind. stand based dividend around something And sustainable other what policy question the is we dividend, period particular cash cash what on in the commodities

how could I So better I’m not that. than answer it sure

Let me clear. be

the dividend in we’re clearly going case able out to time. committed don’t look we dividend. as We to see not where support to be a We’re that

in dividend, to persistent as changing call. even to see Brad reduction have we bit XXX over in little us a cash free several up For next frankly cash, years we’d mentioned, and a about talked consider have to growing we and the quite our the free that earlier

we’re in good think place. we a So pretty

bigger question. Thank just you. one And picture

to So not have are I’m prices? you the Northeast, basically we of have contracts less trying of your because downturn commodity dependent this also if all look asking design only but this you the power you of you power some York us to reasons structural on how talk New make change at you positioning from why perceive a potentially generators. continue issue to could offshore have prices putting price on in through have decline, that you your market carbon you wind, Can perspective? kinds about

that’s changing. what is clearly byproduct. Yes, the tricky a of respects in drives a question. lot and is markets power of are the some a side The respects, then our waste business In business the

days to get out not do So grid and figure long-term one into just of the into the is power difficult contracts. that trying how these to sell to we’ve very been things –

of for those Long contracts to have is contract get but example, We Island, types difficult. in a long-term

can place at into for that rather plants. and the electrons example, like things one sell that been we whether We in sell directly Niagara looking turn do steam steam customers Niagara, we’ve to steam our of So and facility. the the in the our is than around

that. them looking of electrons involved And we options calls. on in itself, then about on around talked other We’re few prior I’ve the got the BGS at auction. a

valuable We’re look investors. sell at And direct these for looking lines, to our a in at other we’ll electrons way more that’s to ways example.

and to so both other happy. users sell can wholesale facilities at at a large to buying some it directly large are than lower than at close and price, maybe couple make selling So to those we’d there’s retail of be we middle that higher our users of and electricity parties

some the playing this been are my out. do types just for of way right business of these development reaction, we’re been things those has looking market But the So point the because years at now. a take those couple at been efforts that because has at we’ve looking of time

Thank you. Okay.

Sure.

Henry of line the from comes question Chien BMO. from last Your

open. is line Your

guys. Good Hi, morning.

Good morning.

to cash Like I impact wanted to maybe had guess free explicit think projects – if explore a beyond I bit organic and what the factors EBITDA the necessarily Just figured or guidance but the that flow – one would little XXXX? area more a are I just question not we growth. about also

plants it’s project first – talking and the that’s pipeline is timeframe. least that’s the developing online 'XX Henry, the that at UK in four impact in come we’re been about course us in those – for we’ve the focus Brad area when XXXX, to of going the big something Our that

us umbrella about If you the encompassed organic the in the that’s ongoing really think drivers XXXX, are X%. initiatives growth the X% for and under to

things about international and on then in side. and that’s think you the TAPS is the this. to medical I’ll things that the metals of a – waste, we’re Solutions. more regulated international All the additional order the Environmental more continuous improvement, And side recovery, that domestic waste So grow Brad like pricing, profile undertaking company Covanta mentioned lot on waste, side. mention

There’s UK. additional build quite a seen the in time. like outside It’s in. the plant take have we’re you other plant build to that We’re occurring. very half UK. at. with in looking a GIG’s partnered China around may inside quickly. a There’s the the the Outside new projects of China. three places activity It that’s that reasons these involved years they’ve projects plants some Energy-from-Waste on was In in There’s lot doesn’t frankly, China, them projects one UK, in the of we looking we’re UK at GIG the project publicity Philippines the

XXXX. with some not depending XXXX what into will so but other from these do also And flow markets, many of out that maybe further not on we years too

or I timing sort or not sense. That it, view, at [ph], looking of you out so you’re of regulatory to? maybe milestones with any are looking of the next Got that that or guess XX wise And makes guys things that hoops or forward just midrise months going okay. kind for kind

four in all are not getting the that so is we’re on construction; milestones to of UK initial focused I but think this the go. key question, the two into key the I’m sure two milestones down, your if – projects

operational to those about, performance of talking was And as now that We’re TAPS on going. get out that the and up the Newhurst focused unit running. It’s Protos on getting and across rolling then based Steve fleet.

from those think good be where focused. I and we’re a and can position build we’ll if milestones there, we meet that’s So really

Thank it. Got you.

new Yes. And for is the Energy-from-Waste in other this comment thing for new Energy-from-Waste. too U.S. and opportunities I’ll the a U.S. are There mention

of opportunities are there’s announcements own where clients them and been these the – opportunities, maybe of some client plant. we fee our some of seen You’ve tip some public some

my have the beginning be So Energy-from-Waste new of in I wasn’t U.S. lot to would in you told of even a going there tenure the the in U.S.

I’m my now changing think view I a bit. little

going there’s think timelines opportunities varying here also There us be associated be to the those with will I for in U.S. opportunities.

it. Got

Okay. to hearing forward Thanks. more. Look

Thanks.

questions further There to are call the turn this over at the back I’ll no time. presenters.

a good good ongoing want interest and We a and for support the joining us in your weekend. We appreciate to thank Thanks. for again have Covanta. everybody today. Have call day

concludes This today’s conference call.

may now You disconnect.