Covanta — Q2 2020 Earnings Presentation
18 slides from Covanta's earnings presentation, Jul 30, 2020
Slide 1: Second Quarter 2020 Earnings Conference Call
Exhibit 99.2 Second Quarter 2020 Earnings Conference Call NYSE: CVA July 30, 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 Q2 results ◦ Adjusted EBITDA of $96 million ◦ Free Cash Flow of $62 million ü Waste markets recovering from initial pandemic levels ◦ Improving MSW volumes under core contracts reducing spot MSW needs ◦ WtE profiled waste and environmental services recovering with industrial
Slide 4: COVID-19 Financial Impacts
COVID-19 Financial Impacts 4 July 30, 2020
Slide 5: Revenue: Q2 2020 vs. Q2 2019
Revenue: Q2 2020 vs. Q2 2019 (Unaudited) 1) Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, and construction activity. 5 July 30, 2020
Slide 6: Adjusted EBITDA: Q2 2020 vs. Q2 2019
Adjusted EBITDA: Q2 2020 vs. Q2 2019 (Unaudited) 1) Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, plant operating costs, construction activity, insurance proceeds, and overhead. 2) Energy price includes capacity payments and all RECs.
Slide 7: Free Cash Flow: Q2 2020 vs. Q2 2019
Free Cash Flow: Q2 2020 vs. Q2 2019 (Unaudited) 1) Includes capital type expenditures at client owned facilities. 7 July 30, 2020
Slide 8: Growth Investment Outlook FY 2020
Growth Investment Outlook FY 2020 (Unaudited, in millions) YTD 2020 FY 2019 Estimate Total Ash Processing System $8 $9 ~$15 New York City MTS contract - 19 - Other organic growth investments (1) 1 13 1 Acquisitions - (2) - International developments (2) 10 17 10 - 15 Total growth investments $19 $56
Slide 9: Capitalization Summary
Capitalization Summary (Face value; unaudited, in millions) 6/30/2020 12/31/2019 12/31/2018 Cash and cash equivalents $39 $37 $58 Corporate debt: Secured $680 $659 $671 Unsecured 1,744 1,744 1,694 Total corporate debt $2,424 $2,403 $2,365 Project debt 126 131 150 Total debt $2,550 $2,534 $2,515 Net
Slide 10: Appendix
Appendix COWANTA 10. July30,.20220 00 ar tty ten Toman
Slide 11: Waste Update
Waste Update (Unaudited) • Q2 2020 revenue drivers vs. Q2 2019: (in millions, except price) Q2 2020 Q2 2019 2020E ▪ Same store WtE tip fee revenue: Waste & Service Revenue: ◦ Price lower by $1 million WtE tip fees $158 $162 ◦ Volume down $1 million WtE service fees 114 116 465 - 475 ◦ WtE profiled w
Slide 12: Energy Update
Energy Update (Unaudited) • Q2 2020 revenue drivers vs. Q2 2019: (in millions, except price) Q2 2020 Q2 2019 2020E ▪ Same store WtE energy revenue down $1 million on Energy Revenue: slightly lower production ▪ Other energy revenue increase primarily driven by Energy sales $57 $58 $260 - $270 wholesa
Slide 13: Long-term Outlook: Energy Detail
Long-term Outlook: Energy Detail (Unaudited, in millions, except price) 2018A 2019A 2020E 2021E 2022E 2023E 2024E MWh Sold – CVA Share: Contracted 2.1 2.1 2.1 2.1 2.1 2.0 2.0 Hedged (1) 3.1 3.0 3.8 2.7 0.8 0.2 - Market 1.3 1.3 0.7 1.7 3.7 4.3 4.5 Total MWh Sold 6.5 6.4 6.6 6.6 6.6 6.5 6.5 Market Sal
Slide 14: Recycled Metals Update
Recycled Metals Update (Unaudited) • Q2 2020 revenue drivers vs. Q2 2019: ($ in millions, except price; tons in thousands) Q2 2020 Q2 2019 2020E ▪ Ferrous revenue down $3 million on lower HMS Metals Revenue: ▪ Non-ferrous: ◦ Realized pricing down $1 million on lower prices Ferrous $10 $13 $35 - $45
Slide 15: Maintenance and Operating Expenses
Maintenance and Operating Expenses (Unaudited) • Q2 2020 drivers vs. Q2 2019: (in millions) Q2 2020 Q2 2019 2020E ▪ 2020 second quarter maintenance lower than prior year Plant Maintenance Expense: due to outage deferrals WtE $79 $81 $305 - $315 ▪ COVID-19 cost impacts: Other 2 2 ◦ $3 million higher
Slide 16: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation: Adjusted EBITDA Q2 Full Year LTM (Unaudited, in millions) 2020 2019 2019 2018 June 30, 2020 Net (loss) income $(13) $(21) $10 $152 $(19) Depreciation and amortization expense 56 55 221 218 225 Interest expense 34 36 143 145 139 Income tax (benefit) expense (4) (3) (7) (29) (
Slide 17: Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow
Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow Q2 Full Year (Unaudited, in millions) 2020 2019 2019 2018 Adjusted EBITDA $96 $94 $428 $457 Cash paid for interest, net of capitalized interest (9) (12) (152) (136) Cash paid for taxes, net — (3) (5) (2) Capital type expenditures at client
Slide 18: 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