Covanta Holding (CVA) 30 Oct 202020 Q3 Earnings call transcript

Good morning, everyone and welcome to the Covanta Holding Corporation’s Third Quarter Conference Call. [Operator Instructions] Please also note today’s event is being recorded. At this time, I would like to turn the conference call over to Dan Mannes, Vice President of Investor Relations. Sir, please go ahead.

Thank you and good morning. quarter call third our discussion Covanta’s announcements. recent to XXXX and conference of Welcome

the provide will President call our on On me Joining today will Sam the Brad Afterwards, questions. Brad recent an our will management discuss will Mike today’s operational strategic and we call, background your Chairman his and review, and be board; most Ranger, on and update. CEO; our and Helgeson, CFO. of Zell, Sam will provide take the Mike financial transition color goals and

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

this be reports accurate other the considered could been The accordance contains materially the from The statements law. broadcast, without our do actual financial information and GAAP. We are not form with these and Now, they not results retransmission isolation measures SEC. filed redistribution, Any the or conference prohibited. contain with includes Information calculated our on factors results. be discussion Harbor by this accordance date written forward-looking of expectations. forward-looking not financial have XX, content GAAP, differ with prepared in rebroadcast Covanta preliminary can Because required which any The to is may such those XXXX. information in should company’s statements, differences in the of regarding and in presented assume of non-GAAP this unless notes. in may any our that obligation Safe consent October update following information of call of cause is to time-sensitive the from as registration only statements found live call that express

to we which press of X-K. Zell. on to their use turn and Form last definitions comparative and our of that, Sam limitations our them Board, the furnished would was as issued non-GAAP like for regarding night as how I the to release, the as to was call measures well Sam? over see usefulness our now information SEC Chairman more For please purposes, With

Good everybody. to Happy Halloween morning, everybody.

the in conference During foundation to the changes a of assets night, for Covanta. with lay and expertise the irreplaceable call Covanta lapped the the future today world’s industry. the announced we portfolio discuss is waste-to-energy of are unmatched which company, operational that leading last

fundamentally pandemic. clearly which is underlying flow. essential customers during generating commercial cash been business has demonstrated reliable consistent the service strong, our Our We to provide municipal

have had opportunities our ahead of we addition, In in Kingdom. attractive expansion us, United particularly the business growth of very the

processing in we not not And Board overseas growth objective identifying environmental into created valued recovery market. core several translated our been the operations. we have the the strategic The in the price have presence improvement plant are as in are our assets These in expanding to in potential initiatives therefore, capabilities path believes company’s has pursued shareholders. services, value with the company stock for announcing but and the our of a sustainable growing maximize our optimal our a metals in demonstratable is value business, However, recent continuous fashion. in the years, in value that appropriately review

our CEO. review, Ranger Board infrastructure opportunities evolution our Mike someone growth step his time of and to caliber waste-to-energy, strategic strategy, very President capital structure. for to in ideal this we in and as has clarify the with of power an our Mike the the decades about leadership. Board companies. I including table priorities, to for new asset skill appointed Michael. will experience this any company. strengths, this in company’s direction private To am for set the future under structural for are the of like to resulting Mike’s execution the lead joined in successful have improvement XXXX fortunate priorities, task. the this review turn reassess I including Mike everything in and and our public spaces, confident would in has actions, to am operations and be on to ready to Now driving and over I our excited is now it leverage

important company’s at Sam. very everyone. much, I joining am very the at in leadership excited Good management be Covanta morning, the future. to a very position Thanks point this in team

As Covanta career include mentioned, prior companies. for having I private board X the of to that unlock principally provide board at Outside Covanta’s Ref-Fuel, chaired value legacy the on our principally and safely investor, a core, reliably. I on entire equity. in industries, operate been know as American and well, Sam power sustainable, environmentally its across and primary And business We my equity waste-to-energy infrastructure focused business At to Covanta, of straightforward. on private banking but alternative facilities one have its is transactions and energy, superior We spent of many years, investment companies programs landfill. I businesses. – the and a focused am and to

renewable source. power generating for our is revenue supply also largest fuel Our

especially with are long. customer decades relationships mutually municipalities our assets are host irreplaceable Our beneficial and are

assessed complexities has business in focus. that my this many be areas that near-term need However, and will to be

expectations balance Cost pursue action planning review, structure, review are to very going assets, including policy this and will and believe no will no we comprehensive business capital operations, preset geographies. that we be has for cost targets. course scheduled end important it date. are specific There this it. in all lines increase a of strategic structure is and We sheet shareholder value, allocation If

to clearly. execute them plans, our As we reach will and we conclusions begin communicate

and American and This more for drive decision-making. activities and As our an business. management executive commercial operational improved step, now our assuming Operating enhancing accountability Veenhof all North are team. efficient we Officer initial will is our Derek streamlining and Chief responsibility waste-to-energy

confidence also to business year leadership overseas our as management in lead As located member Europe. will Michaelson, the Covanta appreciate XXXX, growing UK we of while yesterday, announced UK be moves regions, go our both clear With Covanta early President has importance to the the These reporting I operations. highlighting Owen establish like our the at acknowledge of results. next since board in of joining in in third the you strategic we you board to and can process on milestones moving forward turn I quarter to strategic as review this that point to through who will Brad would back that time. that, review Helgeson, this over and the met

everyone. morning, good and Mike Thanks

the begin Slide will For I deck, X. using those web on

cash During with on the generated adjusted $X $XX cash above QX our and In of free safely EBITDA reported challenging last million we quarter, third focus operating $XXX reliably. and of a environment, maintained of free year billion year-to-date. million we flow, slightly

we sustainably X.X third of waste quarter, year. at consistent the facilities During processed tons our waste-to-energy last million with

reliability, outlet that chose We waste environmental I two are the Covanta for reduced a of like well strategic for footprint. for disposal markets advantages customers we the share recent who Northeast to examples solutions. customers our as would as proven municipal major and solid of non-landfill commercial corridor in that including industrial waste economics, critical offer, the value and

Hempstead waste our at waste on disposal Long of side, an for recently agreement contract On Island the with reached we long-term Hempstead facility. the North town

has on the waste historically distance a the to island. While town proximate facility, relied trucking our long landfill to its off of

plants, need reduces town However, perspective, our in at residential by locking is cost the contracting a of with significantly tons merchant our waste the solution. From beneficial and XXX,XXX rate. contract supply It’s mutually to one waste of an effective for attractive us, transitioning at sustainable a key approximately local our outcome. largely spot

its we of customer fossil a agreed neighboring continuing steam us, a steam extension X-year facility to the avoids purchase energy to recently industrial our fuel for meet supply Niagara both need our process a economic from for to examples and this our is selling plant. efficient adds and the On than to how side, both customers. needs, at burn selling By and contract indicative which more attractive of perspective, These sustainable From power. solutions are us economically steam two drive value benefits. our environmental

to of the continue from we see in recovery volumes and months waste quarter, pandemic. industrial the initial the During commercial

translates tip return average waste procure at of price replacement lower fees normal in profiled merchant our need as MSW For the commercial plants us, tons higher market. and our to the volumes to this reduces our

softness certain in specific point, to have While returned largely remains areas, we pre-pandemic at this levels.

weakest quarter. represents quarter, and our estimate sectors is sequential is same-store such has customer while basis processing XX% now the From the sector, sequential During was on demand healthcare, the growth in the same-store average the of recovery. revenue products strong revenue automotive growth remained the year-over-year, less the year-over-year tip the saw of basis a second our the a given X% We was on ton. Services we second which facilities, showing we down during material that signs than At and our in of impact pandemic on which X% market just Environmental improvement and quarter, heavily up from XX% $X weighted base. consumer fee as a quarter, one recovery from a X% industrial net waste second tip a fee on perspective, year-over-year profiled of saw

low drive and improvement and discussed was in quarter variable our protocols safety EBITDA areas. last quarter, on higher several costs environmental in pandemic new the solutions the has numerous presented Operationally, costs revenue. the has challenges, Importantly, as team, even we effectively to flexed able year-over-year including

has impressively. However, our world class operating this environment difficult navigated team

of During higher was achieve the last waste-to-energy boiler able third a level in with to maintenance we even year. quarter, activity, with line scheduled availability, XX% were which

in from previously the as we a cost in year estimates off-cycle the noted, of come above maintenance result higher this and rescheduling to expense $XX performing approximately activities these outages initial and COVID expect protocols. million with year As earlier to

$XX of year and quarter. program total, with and cost has reflected have reduced previously the million Our between we million negative these offset in $XX million reduction full million. $XX by third program this $X partially expect costs In benefit announced a with impacts,

Before activities. update like the quarter, a moving UK of I on provide brief our the to growth on would financial details to

mandated know, you earlier operations of commercial on delays have we the in facilities UK the and under we right government this anticipate three XXXX. resumed now. project the Construction the in As Gate schedule following by year. Earls Rookery has At Scottish to COVID-related construction continues construction project, progress the

this We will progresses. provide as construction for schedule on project updates

an top of excited X this As the project on see from you picture very and can to right of are its Newhurst is about the construction progress to-date. the off only we excellent after start slide, months

commercial XXXX. We at operations Newhurst in expect

works of the stages development final process. in have project, the On the we on the project commenced of the early Protos and financing are site

activities on details results growth fee in fees growth. We beginning to the the revenue by turn $X $XX in now in development position to with coming year bit promising million, Slide reviewing of our to project of or In will focused escalation. was to driven and to build million are this earlier $X detail the still X. organic our contributed more $XXX targeting quarter million summary, up I financial Total higher a service is We third million on a and by hope to they X% Waste our projects forward share from progress quarterly pricing $X team financial tip million, quarter XXXX related from primarily as in on close in UK opportunities end. be quarters. new additional continue stage very pipeline. move

residential $XX additional third by largely we won in million benefited $X On tranches earlier wholesale primarily year-over-year. and a demand the the rates. the center strong serving related year. this electricity and that load revenue revenue Service quarter. auction Commodity June increased Market prices were energy began we line, these of in power to at prices higher million metals capacity in flat associated from increase tranches of saw with

Asset revenue transitions long-term billion quarter, the $X divestitures in by added reduced $X million. contract while

higher adjusted $XXX $X Within EBITDA on basis. Now from of overhead million, were lower the year-over-year X, in EBITDA a Slide while by waste-to-energy were Covanta benefited the of billion long-term partially the million serving we generated planned benefit $XXX compared cost operating load organic and Environmental Commodity maintenance. lower of XXXX. adjusted to out plants prices moving new the adjusted was on revenue EBITDA net Solutions we Year-to-date, higher QX quarter, EBITDA wholesale as $X in have the $X was million waste offset to contracts, offset a contract million. a including in from These transitioned $X growth by to quarter, up million higher EBITDA.

expense in line compared on the calls, included earnings as expect reflected revenue outage on This on outlook planned is higher previous downtime. presentation. Looking to year, this last impact at we a appendix to the our full these have the in fourth corresponding you discussed associated quarter, year from maintenance should items with

the is a this planned timing was expect free flow in quarter X, higher my to entirely QX maintenance in the This Slide to due in capital schedule function expenditures $X was quarter. delta turning the also which earlier maintenance CapEx cash Again, typical on XXXX. year, driven $XX deferrals to from outage in pandemic. expense, the essentially of Now was by we quarter. our scheduled comments of impacted the further million this fourth million with the Consistent in year by compared higher

current investment Now, where activity. please turn growth to Slide will update briefly our X, I

touching processing UK projects development, September million XX, total TAPS. the we UK ash Protos turn facility, Slide approximately year. still project will comments up the $XX discussed on project. XX. in debt year-to-date $XX initial we As including our was I for QX At by spent $XX a balance billion, my $X of on wrap from have million and million total investment spending approximately million TAPS, Please net in anticipate land on $XX sheet. in invested purchasing growth or Year-to-date, the focused increase June have including on We million X. our in the the startup to XXXX $X.X the and previously, Newhurst this in

down And Liquidity credit from the ratio revolving result our facility strong, $XXX a our at X.Xx I the exempt bond end. describe Our X.Xx, will a ratio of million from second covenant tax moment. as very facility consolidated was was end leverage QX in refinancing quarter that credit a available senior unchanged quarter. under of with remains

million, During by In together exempt we X.X%, bonds approximately an approximately profile flexibility. the two of new costs expense third maturity debt and totaling refinancing refinanced million, $XXX basis structural extended reduced transactions the at of annual $X XX-year notes our quarter, executed interest series XXX market, that we coupon increased points. by with two tax average reducing debt

the X/Xs part covenant thereby addition, the purposes ratio. we high $XXX from refinancing, In with market, X% of senior for upstream of the we our on XX-year X coupon flat. notes new yield of XXXX, guarantees due bond operating as the taxable and balance XXXX, reducing refinanced facility million removed In existing subsidiary due the debt to the reducing notes bonds of credit

transactions, we were to proactive these of conditions on credit. and capitalize Covanta fact the able market With debt strong demand for

structure to We debt of will look cost and like our borrowing. Q&A the continue operator, optimize for call. the that move of to reduce portion to With to would opportunities our we

ahead from go [Operator Instructions] comes question today Kaye our with first Noah question. your And Oppenheimer. Please from

there about think growth want forward, with a particularly do moment, dynamics address is Thanks. named business to to that the Good begin question head a of and aspects waste reassessment morning, project you the are is by the to market you are this while everyone. exactly now understand you Mike that and to strategy love could a priorities clarification is the to you at formally the to you new what’s Sam the call would And really Sam, just where is if as that and I the wanted improving certainly of appreciated growth at bit what into here. the in a to Covanta from? of change? how delve underappreciated have is you to more and not and said of or hoping if response something company’s assets market ask going structure whether this fundamentals a triggering you that here market what you the I obviously, potential that feel well coming guess whether think conditions are would of think of the us the beginning are is company’s the European and structurally you underappreciated little Maybe help like I I here. its

think time. your at a and I question that Well, let’s answer try one

British to stock traded a if is XX take great that way that I or two, on as on New original applies Number which are XX% one which months assets were than traded XX% maintaining plants are with They that’s are of that ourselves a our you finished, States, that you we play give and way the value think months think are of bunch there in produce and to price is, questions recently very we are kind one. right and our or XX/XX are benefit place XX currently asking. of the deal confronted certainly trading conclude just profit United situations, a the plan, performing the and York is on what and in beautifully of XXx, of we have similar all more Stock set I analysis, from of them obvious rule the question I operating you it’s all now, we other any British in the That’s the at Exchange, number assets you are assets. worth how? think that almost here the ask ahead the of in

which that we my and we the at you value worth worth stock than would mean, a okay, waste for given are haven’t also it’s more business and and I out the and are looked a adequately is in say, is laid effect and can’t weren’t the strategy pieces that transportation that our upon look confidence we we appropriately. area value if a pieces significantly help have that very and and basically have separate the what that a stock judgment is a trading price business what than Third well we seeing. feel is are generate built as “separately” business, that higher growing

really So, how change capabilities knowledge said, energy management on of and go that’s doing really sold and American they here. would because the felt in We you the he essence was waste a we as Michael had are require both brought Ref-Fuel. we and what board radical originally, forward. his

So, he the more stamp than are put England, market having much are in this that conditions obviously, all States. on overall to and the really Michael? really operation real address available question. our had where business a this perfect conditions in to there United person political favorable to they And

North to basis. can on operations, of and both business portfolio to out are the which those in also pointed rest will to for are well and light characteristics as viability are run whether And Thank side, that, and us North each figure you, our to Officer if so summarized have or Sam. focus the are of business characteristics. try a I on are some for those of would the portfolio. margin this of to optimization very we to our going basis plants American together Sam manage Sam the our what our of as assess side lines, Derek consolidated to on the that of different commercial what this and America only how alternatives by what is to their put really out that this we add And the opportunities valuable Operating what Chief be expense the most businesses. value a to manage do we On have exactly bright appointing them a bringing highest top on revenue that segregate we is those then

– us to have So, a that on focusing a they are good on going understand help out. on Sam And segregating we value how standalone I look their the better and consolidated to Covanta. basis this way very think that’s for businesses will a basis as laid

explanation very what that’s sounds think some looking you that do here I it like move and to forward. are helpful you may this help near-term steps have Gentlemen, of will

just on side year revenue in provided out So, now you contract what look there almost that anything and of renewals quickly about waste in and with structures ask are February, lower want are just another outlook the into say is from as in pre-pandemic next back to looks you we prevents outlook leave now you let thinking here the kind maybe but in near end you mix, your seeing you understand of and X% fully a that? that, fundamentals in next Is it price basically I considering anything year terms growth outlook we back me you there from of the effectively level tip the it of your getting revenue that be track the type services and to back would waste doing like say total like year? here should business. the way, it that about prevent and

I know, certainly. us, Brad. it’s No, specific nothing to

no next all the trajectory at reason unchanged. talked have business, drivers because the resume the through wouldn’t is the look waste I the pandemic, year think the the talked environment. we and are have on as as way, secular about, specific that with entirely this we on the etcetera? focusing it, What the year? like that equal the I across is line think the does are all we Covanta, Covanta about growth drivers that waste into we story for we be to the but waste have for us line there look So, to going of why line going seen it of story and recovery on macro else that Where economic being to

there. will leave Thank I it you. Alright.

Noah. Thanks,

comes Michael question your next Our from question. Hoffman Please with go Stifel. from

you had more translate much. back a of $XX again? Thanks that growth are same-store X% regards growth with million that to to fee should the into annually. I cash very to to Brad, point think million free have flow I heard I you tip outlook specific, all at am be And $XX what – is X% of just outlook sort

right. back. would on way all I are the most caveat way say I I we the are back that’s of essentially, we think one put would is the Yes, Yes, that not

of tip the and profiled for on So fee. very know, profiled end on we rate us are not waste overall the growth as impactful the average all waste you markets ton is and a across way back

back where other in with again all I fashion, as essentially we think is the the and future looking caveat, at this similar the that direction So, that of macro were are to we a caveat the yes, subject to with environment. the

to I was it average tip money And and that just and at or waste dollar sold as And it am to fee. the exceed remind Right. that pre-COVID, back does drugs, if high that profiled oversimplifying clothes it? everybody does a close gap

Well, are big about yes. were of to where is what we talking the sort gap so, we

closed, to once we gap So we that where are fully is back were.

But it profiled waste gap? were XXX% back, more does that cover only than cover it that or

Well, yes, maybe we other. each are talking past

we annual growth in I think profiled forward. waste So, anticipate going

if we question. So, resume your to to back lost expect we but am sure we perspective, a from the pre-COVID, year were essentially, where I would I future the are yes, if answering we not have am growth trajectory. essentially

am asking very well. probably not I No, it

over I So, to and Sam and will gears Michael. move shift

flow. So friend Sam, the the mine, make cash of a comment he of all a colleague it’s yours, says you always about [indiscernible], that

you the be portfolio portfolio you do cash to target what think ratio is surviving debt leverage think what supposed looks total like? is do for whatever the leverage this flow So right and doing wise ratio

goal with. to on that I here pretty add you is There seeing company Obviously, own Maybe operators. analyze here value who then I and need I and knew can’t understanding every And spent maximizing move there on. to our is that radical the the the think stock get we focus Based that things that us as we flow, we been involved get going have on. I a as ever what is no question different. cash not answer if believe I do are money. no need on I think answer believe we we measure the be cash change in guess, spending would maximized are and that partners, a number are facilities, this by I and direction of flow. don’t If I cash of should not we will a, questions, that is Obviously, it one I doing. your with as is value what ultimately, have then price, our and, to

So of here. think a anything the quality think, assets I We opportunity have. not off the great we like taking table. is there the we’re We

We as be. are not we well packaging should as them

We goal here are objectives. of the those with reaching changing management

leverage And that would a do you target have you to like be?

answer I Mike. is that Michael. this will

business, those we of I mean, lower answer upon think view. on an the look be So of we like. to of a how of would, valuation this we structure in the from presently than is target leverage generation is components ability, our the leverage in point to from look capital way be I and being depending an and send going our are almost flow levels direction going EBITDA this want clearly, is today. that’s target to we so of us realize to one perspective, to clear the be equation the of able the the would the the that our at to And would what objectives with bring of line that cash going exactly be

when one it’s hearing necessarily cash conclusion Am be you And say really flow, last be a smaller, baseline to the leaner, that jumps possible I one objective the everybody is, immediately with but me strategic better, and growth public, profile? free sale. to view,

from let’s I saying is question getting we public that, you are and Well, and is are to And honest, is perspective. that have mean, are not then a be every the what public And have value, doing. you get reset, you want to not we at If very liquidity. because the look to being we we need cheap. be

Okay.

that, components shareholder here be in value? so responsive be if or be we that responsive will in maximize from to will to totality, to And is market, the indications of the you have to your value objective other

good. very luck. very much. you Okay Good Thank

you. Thank

Silber And BMO Markets. our question from Please ahead comes from with next your Capital question. Jeff go

much. so Thank you

thank I first said thought for clarifying Mike, they think and many you that Sam the very all, question times that were for some you think before helpful. My for he answers of First I this make of is timing… the Sam now? this it. there not ago? move was months am terms XX was curious, that company in months in of I this the more six market just done value Why was attributing ago, Why and

have that Well, XX is retrospect, the should in decision months ever done ago. reality been made, I every have or XX

have I and think value stock the trades certainly been take the steps that the think a price between what the major to we has difference that the at incentive we for extreme us is taken.

one might XXX%, is if it you you it spread is thing or be. it’s undervalued think another that are if whatever So you think XX%, thing the

Alright, fair enough. I appreciate that.

company business. withdrawn that just your What of am process? before the on Let to not I you that reinstituted yet. you guidance? the side, me shift as thought over guidance, kind curious Does the strategic I this have had see have put just would review know reinstating to of

hey, it’s two answer Really in XXXX XXXX will Jeff, and addressing it parts Brad. separately. Yes, I

at other we about we this for formal that and results policy don’t just also probably our the really what’s probably guidance here we frankly, historically, call that point wasn’t conference to So, the the was and in at thought where in year guidance, where effect XXXX, are results the the focus quarter-to-quarter the given talking we quarterly year-to-date where necessary. given business, year in which actual given unnecessary. this point again guidance with given and this reinstitute in of on we also are on things I of terms our be It the pretty think at would and clear felt in end reinstituting of October inconsistent recovery

we For financial course typical fourth approach our the coming the XXXX, report because to first for quarter guidance is question, quarter. of in give earnings a year when different

It’s reported today position from specifically specific when be be that say are really to to and we for in to we and the the the that also think year give say difficult level will difficult the earnings, to say heading. next be an both perspective we what of nature where it’s we more year. in Given of TBD. where on current I think next are macro today depending in safe going strategic uncertainty, Yes, us review outlook will I we think a of February for to maybe it, direction giving but

on a on of strategic here process imagine next objectives sit we be review it. XX, going we will think in into year some winds begin that the the the new so our changes will with October the So in what can for and announced you yesterday, budgeting and that Jeff, Monday can as reflect earnest

we review as observation are it the impact an and for the speak should guidance your we what what look right like So, we strategic that think but now, making possibly XXXX. budget be could have will on

Okay, appreciate color. so Thanks the much.

Jeff. Thanks,

Cortellacci with from comes question question. next Our Mario Please Jefferies. your from go

maybe and I been actually reviews for time. some sorry give of thank guess I the you view I know to Hi, curious – you in, you or strategic turnarounds in examples have can Mike, was wrong you – am done us that? was went just think have strategic what some what right, fix and of how the what – realize that did do you you past involved went maybe examples what wrong, you

TXU banking. M&A fee stock circumstance And again, do That board transaction and were our having we recapitalizing create conception but liquidity did Midland of what but the the business that which UK company company a below KDC probably independent And chaired banking in at committee the after participated rights and it’s were value. and clearly, the And Goldman side that XXXX. investment and on nuclear the of selling I Electric a been two resulted in then bankruptcy, in the our transaction another that of we where all bought XXXX. that in then fee back then company, unfortunately, just because be for bottom took once PPG initiated of culminated we after team and – with in And was there worth price the space, was rights, point this Energy XXXX restructuring that in in of most long financing incentive the been Sachs then the much those Energy sale an time circumstance, line down power Catamount probably and there sale would $XX the brought upside to we $XXX we the the joined too, and the energy at to the back scale, National capital equity and the at career, to resulted sold They at out be the the in a power upon paid that that then out same took DLJ others and XXXX. the out CMS stock the because demarcation And made are you smaller of It’s the we billion is company. be as dramatic, generation investment of in to the management in And and cogeneration assets was to took XXXX. for Diamond own culminated of whether stock And investment their to investors operations million structure, that and so scratch the situation when Mohawk worked. the appreciation in merchant we Solar go in in wanted the of entire the that the cancellation bottom of in it private path the there contracts, by their rework the a Niagara of before. plant once appreciation had in of wind the to for then to and I cash couple Xx where TXU, Paso of top we Castle of out Grid from bankrupted Midland taking would the we top a then assignment. company that answer the really of special ELJ, going buying El we banking to a company just venture table KKR, how in then started we that operations a we

going So is am to and year before that execute compensations have my and I review continued just I generate to the on options path am down so a ability role and been results willingly I have compensation have Because and million a accepted, shareholder value. what completely to to this salary I the the a $X upon strategic path of I think illuminate before offered Sam I been structure playing. down that this

we one we But us investor what don’t Obviously, how give is calls you sense just know about Mike for I expect guess, when role? for to seat timeline. indefinite. for get into want a then I with know helpful? guess, management, super experience guy will for, back are you be think I review be corner I you to of just CEO do maybe for you CEO, the to, yourself the in long this of or would need future or I more does to And sit a any the how you is what next guess And it look guys obviously in quality the the timing could our are you somebody and the going else play foreseeable our if out. fill CEO color, whether there into types

around going And that Well, till am just looks I upon after the that’s would on clearly be executing what review. to like, company done. be strategic a contingent

completely different. outcomes be. I So mean, what that various I that’s the just imagine could think

the managed like, would the be company time, the point then the are a American you outcomes you If business, at looking and set for required, exclusively of execution, North was assets needed the business upon sold what what you depending in of are that UK are the looks exclusively already, and of skill one you or that to a if components company, be

of positioned. investors ESG take Sam well. of in how I But one for message a does the focus focus a could of equation, Dan they on getting can advantage just love as on now of guess, playing just Covanta today. get the fact huge just and of take right is just obviously becoming portion in great other the in you to topic to role a with admissions applies then that across Thanks. and only general would but how in how And job in we in I phone actually the a your Covanta and there? it’s areas kind the And much I if Covanta do have investor the more, is see squeeze And Sam more long not term

important point in analysis we every Well close I that trying exactly is driving point an what really for has waste are means And, business in The become there on. every can investment. that is to that imagine are landfill ESG business. that fact Europe. in can’t are energy America’s good landfills. great in business we you as closing the a we one lot a sources from are very all as fall investor view, our of, ESG of And

think a the so have making eliminating track waste we and dioxins we to a forward. term classified, very I going in is positive, clean during And what So encourage that good program has when, a really and that, were and negative. President fact not a generation a that of cleaner the are they record working was beginning in street on Obama’s energy

you so Thank Great, much.

Sachs. Goldman next comes Instructions] Lee Our ahead question. Brian Please from [Operator from question go your with

the questions. of thoughts high level, growth those about are Hey, off buckets? review and you to could be the further? allocation, thinking speak or some At priorities the CapEx how do into they a start on can maybe everyone. staple of it Sam what maybe capital Mike, fits for just the are de-levering And how a Thanks for you to here sort just taking then remain strategic morning. Good sort going of here. adjusted just And priorities across also around some be dividends, those key to maybe

Yes.

should that sale – of where to on hand your on definition at it Because a generate that that rationalize that if again, multiple EBITDA think is deal that point, a there of The one. sheet able use with trades give me I time. component on if restructuring structure point let that This at for capital value as once differential Mike. have good question hand realize to but and in don’t that. the levels the is will cash maintain way shareholder a in company a take would regard, presently that this business by balance So and doesn’t you to able options at a the are example, and will is Sam, the company from enhancement. I were we have you presently it was at cash

allocating what – it optimization keep is that’s what you profitability is allocation question are we capital portfolio when to On of producing the about so that think capital the all that investment. running that’s are you though, capital about when plants – warrants that really

at a So, investing things that’s first are than a profitability our that the what that’s that more destroying, of portion maintaining way in is, looking are. are are to aging opportunities is fleet be going the of because one we we we capital

early the XX% will our that that’s is because that’s where going those comes what of that, core, maintain from, to to be stage of capital think this I core the that operations. review to EBITDA be the be So, rationalize allocation of will

about hopefully making some that will focus what decisions in assets to So, on assets and will take pretty tough future. what the result to us

sort U.S. is could you. this be WFE a characterization? off of that fair during Sam, second laid Q&A, the Appreciate question And and I Okay, context. source – process of immediate the that calls that sort of had in part recent but segue Mike with to but term, medium-term consistent the the that long-term plants that what especially in of of And had, thought the of or great. also into XX/XX you shrink sort that’s rule just as discussion, then review? secondly, for team table mentioned, the changing there the strategy that’s here is some the just been the U.S. Thank doing it sounds this well. that management strategy. be grow had been strategic portfolio and Is maybe in wholesale, in growth the tweaking type the a out to and here of much going is of some like not some I is but then more again, as mean, there today, maybe that minor

greatness, changed instead in has way a about that And to say to it not regard. priorities all. would be reallocate that think would at be process shrink thought of No, to to would I greatness better

measure. ever valued that we that, own number a value plants we that’s the operate were if because Just not and of on

fueling and they to those the going it’s what and electricity, to the can waste they what manufacturing more be So, facilities the portfolio of produce them? warrant do into capital take the that continued provide

will thanks. on. pass I it Okay,

you. Thank

conference And and to at would over showing ladies call back turn closing for Mike additional I to any the this like gentlemen, no Ranger time and questions, remarks.

look business And Covanta’s we and Thanks to really in very are new its scrub inflection a much. at point look forward that involved this we in the getting completely once and obviously clearly, Well, most taking figure Great. and – very process. excited this for it sense. the history our down again, about shareholders new bare in this unlocking are about makes up in to chapter value and to principle rolling be and what out as our this bones guiding will is all sleeves

and you of So very your Covanta. attention for your much you. Thank time with support and thank that,

has conference gentlemen, you now the concluded. We and do attending ladies And presentation. today’s for thank

your You lines. may disconnect not