Covanta — Q3 2020 Earnings Presentation
17 slides from Covanta's earnings presentation, Oct 29, 2020
Slide 1: Third Quarter 2020 Earnings Conference Call
Exhibit 99.2 Third Quarter 2020 Earnings Conference Call NYSE: CVA October 29, 2020
Slide 2: Cautionary Statements
Cautionary Statements All information included in this earnings presentation is based on continuing operations, unless otherwise noted. Forward-Looking Statements Certain statements in this press release may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1
Slide 3: Business Update
Business Update ü Strong Q3 results ◦ Sustainably processed 5.5 million tons of waste ◦ Adjusted EBITDA of $128 million ◦ Free Cash Flow of $3 million; $84 million year-to-date ü Waste markets returning to near pre-pandemic levels ◦ Continued recovery in commercial and industrial volumes ◦ Same stor
Slide 4: Revenue: Q3 2020 vs. Q3 2019
Revenue: Q3 2020 vs. Q3 2019 (Unaudited) 1. Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, plant operating costs, and construction activity. 2. Energy price includes capacity payments and bundled RECs. 4 October 29, 2020
Slide 5: Adjusted EBITDA: Q3 2020 vs. Q3 2019
Adjusted EBITDA: Q3 2020 vs. Q3 2019 (Unaudited) 1. Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, plant operating costs, construction activity, and overhead. 2. Energy price includes capacity payments and all RECs. 5 October 29, 2020
Slide 6: Free Cash Flow: Q3 2020 vs. Q3 2019
Free Cash Flow: Q3 2020 vs. Q3 2019 (Unaudited) 1. Includes capital type expenditures at client owned facilities. 6 October 29, 2020
Slide 7: Growth Investment Outlook FY 2020
Growth Investment Outlook FY 2020 (Unaudited, in millions) YTD 2020 FY 2019 Estimate Total Ash Processing System $11 $9 ~$15 New York City MTS contract - 19 - Other organic growth investments (1) 1 13 1 Acquisitions - (2) - International developments (2) 11 17 ~15 Total growth investments $23 $56 ~$
Slide 8: Capitalization Summary
Capitalization Summary (Face value; unaudited, in millions) September 30, 2020 December 31, 2019 December 31, 2018 Cash and cash equivalents $34 $37 $58 Corporate debt: Secured $714 $659 $671 Unsecured 1,744 1,744 1,694 Total Corporate debt $2,458 $2,403 $2,365 Project debt 125 131 150 Total debt $2
Slide 9: Appendix
Appendix Powering Today. Pr rotecting Tomorrow. 9 October 29, 2020
Slide 10: Waste Update
Waste Update (Unaudited) • Q3 2020 revenue drivers vs. Q3 2019: (in millions, except price) Q3 2020 Q3 2019 2020E ▪ Same store WtE tip fee revenue: Waste & Service Revenue: ◦ Price up $5 million (3%) WtE tip fees $168 $163 $645 - $655 ◦ Volume down $1 million WtE service fees 118 114 465 - 475 ◦ WtE
Slide 11: Energy Update
Energy Update (Unaudited) • Q3 2020 revenue drivers vs. Q3 2019: (in millions, except price) Q3 2020 Q3 2019 2020E ▪ Same store WtE energy revenue: Energy Revenue: ◦ Price down $1 million Energy sales $63 $66 $260 - $265 ◦ Volume down $1 million Capacity 10 9 40 ▪ Other energy revenue increase prima
Slide 12: Long-term Outlook: Energy Detail
Long-term Outlook: Energy Detail (Unaudited, in millions, except price) 2018A 2019A 2020E 2021E 2022E 2023E 2024E MWh Sold – CVA Share: Contracted 2.1 2.1 2.1 2.2 2.2 2.1 2.1 Hedged (1) 3.1 3.0 3.8 2.7 0.8 0.2 — Market 1.3 1.3 0.6 1.7 3.6 4.3 4.4 Total MWh Sold 6.5 6.4 6.5 6.6 6.6 6.5 6.5 Market Sal
Slide 13: Recycled Metals Update
Recycled Metals Update (Unaudited) ($ in millions, except price; • Q3 2020 revenue drivers vs. Q3 2019: tons in thousands) Q3 2020 Q3 2019 2020E ▪ Ferrous revenue higher on improved volumes Metals Revenue: ▪ Non-ferrous revenue up $1 million on sales timing Ferrous $12 $11 $40 - $45 • Trends and out
Slide 14: Maintenance and Operating Expenses
Maintenance and Operating Expenses (Unaudited) • Q3 2020 drivers vs. Q3 2019: (in millions) Q3 2020 Q3 2019 2020E ▪ 2020 third quarter maintenance higher than prior year as Plant Maintenance Expense: expected due to planned outage schedule WtE $63 $59 $305 - $315 ▪ COVID-19 cost impacts: Other 3 3 ◦
Slide 15: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation: Adjusted EBITDA Q3 Full Year LTM September 30, (Unaudited, in millions) 2020 2019 2019 2018 2020 Net income (loss) $5 $14 $10 $152 $(28) Depreciation and amortization expense 54 55 221 218 224 Interest expense 32 36 143 145 135 Income tax expense (benefit) 3 (5) (7) (29) (7)
Slide 16: Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow
Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow Q3 Full Year (Unaudited, in millions) 2020 2019 2019 2018 Adjusted EBITDA $128 $125 $428 $457 Cash paid for interest, net of capitalized interest (56) (64) (152) (136) Cash paid for taxes, net (2) (1) (5) (2) Capital type expenditures at cl
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Free Cash Flow Free Cash Flow is defined as cash flow provided by operating activities, plus changes in restricted funds - operating, less maintenance capital expenditures, which are capital expenditures primarily to maintain our existing facilities. We use the non-GAAP m