SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 8-K
-----------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 13, 2001
Covanta Energy Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-3122 13-5549268
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
40 Lane Road, Fairfield, New Jersey 07004
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (973) 882-9000
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On November 14, 2001, Covanta Energy Corporation held a conference call
regarding financial results. A copy of the transcript of the company's prepared
remarks on that conference call is attached hereto as Exhibit A.
On November 14, 2001, Covanta Energy Corporation issued a press
release, a copy of which is attached hereto as Exhibit B.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial Statements of business acquired: Not applicable.
(b) Pro forma financial information: Not applicable.
(c) Exhibit: Not applicable.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereto duly authorized.
Date: November 14, 2001
COVANTA ENERGY CORPORATION
By: /s/ Jeffrey R. Horowitz
------------------------
Name: Jeffrey R. Horowitz
Title: Senior Vice President -
Legal Affairs and Secretary
Exhibit A
---------
COVANTA ENERGY THIRD QUARTER AND
NINE MONTHS ENDED SEPTEMBER 30, 2001 RESULTS
CONFERENCE CALL SCRIPT
Operator: Good morning, everyone. And welcome to the Covanta Energy Corporation
third quarter 2001 earnings conference call. Today's call is being
recorded. At this time, for opening remarks and introductions, I would
like to turn the call over to the Covanta Energy's Treasurer, Mr. Lou
Walters. Please go ahead, sir.
LMW: Thank you, Operator, and good morning, everyone. By now you should
have received our third quarter 2001 earnings release. If you do not
have a copy, it is available on our Website at covantaenergy.com, as
well via our automated information system at 1-866-COVANTA.
Today's conference call is being broadcast live over the Internet on
our Website and a re-broadcast will be available in the Investor
Relations section of the Website.
With me here today are Covanta Energy Corporation's Chief Executive
Officer and President, Scott Mackin and the company's CFO Ed
Moneypenny.
Before we begin I'd like to read a short statement. This conference
call includes forward-looking statements within the meaning of Section
27-A of the Securities Act of 1933, and Section 21-E of the Securities
Exchange Act of 1934. Such statements include declarations regarding
the intent, belief, or current expectations of the company and its
management. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance,
and involve a number of risks and uncertainties that can materially
affect actual results as identified from time to time in the company's
Reports and Registration Statements filed with the Securities and
Exchange Commission.
Now I'd like to turn the call over to Covanta Energy's President and
CEO, Scott Mackin. Scott?
SGM: Thanks, Lou. As usual, Ed Moneypenny will take you through the
release, and I am just going to update you on things that have
happened since our last call.
As all of you are well aware, this has been a tough quarter for many
businesses, given both the general downturn in the economy and in
particular the events of September 11. Those events have impacted us
in terms of delaying non-core asset sales, something that I'll get
into in a moment. However, our base Energy business has done very well
as you can see from the release, and I think demonstrates the value to
the approach we have taken here, which is to lock in the majority of
our revenues long-term.
That's not to say that we don't have any revenues linked to market
fluctuations. We do. But, it is fair to say that about 90% of our
revenues are not linked to market fluctuations, and that number will
actually increase next year. That is important at a time when energy
prices have moved a lot. And I know some of the people who follow us
are not intimately familiar with that. So, let me just recount, for a
second. After a long period of relatively stable energy pricing here
domestically, energy rates started moving upwards sharply last year,
2000, particularly in the third and fourth quarters. They peaked in
the first quarter of this year and then started moving down to more
normal levels which they reached by the beginning of the third
quarter, and they are firming up today as we speak. Thus, even though
the year over year energy prices that we received in places where we
have direct or indirect linkage to market movement - and those are
California, Oklahoma and in New Jersey -- even though those were down
significantly, where we have some direct or indirect linkage to market
movement, were down significantly, our base recurring Energy EBIT was
up approximately 30% for the quarter. I think that says a lot about
our business.
I think it is fair to say we are up because we have executed on basic
blocking and tackling, nothing too glamorous. A number of our domestic
Waste-to-Energy plants are doing better year over year. Our Asia
business, is doing better year over year, both with a new plant on
line and general improvement. And our Water Group is doing better year
over year. Overhead is down, also. This is essentially the nuts and
bolts of what we do here in Energy, as opposed to taking large bets on
market movements.
We have previously given out estimates for the year of $120 to $123
million of recurring EBIT, and we still feel very comfortable with
that range. Also, we have stated that next year's recurring EBIT ought
to be in the $132 million to $135 million range. We also feel
comfortable with that range.
I mentioned before that the events of September 11 impacted a non-core
asset sale, and the victim there is obviously the sale of the Aviation
Fueling division. As you may recall, we entered into a definitive
agreement for the sale of this asset back in the Summer. We had
originally expected the closing to occur in an October timeframe.
However, the September 11 event's impact, not only upon businesses
generally and particularly in the Aviation industry, but also as it
pertains to a principal client of the fueling division, the NY/NJ Port
Authority, have pushed that closing back. We now anticipate
bi-furcating that closing, and selling the non-Port piece this year
and the Port piece in the first quarter of 2002.
We have nothing further on non-core asset sales at this time.
Since our last call, the situation in California has clarified
tremendously. You will recall that we have 15 plants in California,
with a total megawatt output, net to Covanta, of 226 megawatts, and
that we built up $55 million in net receivables as of the end of March
from the two largest utilities in the State. At the end of March, one
of those utilities, PG&E, went into bankruptcy and since then the
status of the other, Southern California Edison, has been in doubt.
Further, you may recall that the CPUC ordered both utilities to begin
making current payments in March, and both have complied.
In our last call, I reported that in early summer the majority of QF
facilities in SoCal's territory, ours included, entered into
agreements with SoCal intended to establish a path for the repayment
of accounts receivable, and to place the facilities on fixed five-year
pricing at $53.70/megawatt hour. When compared to current SRAC or
market-based rates which are in the $30's and low $40's, as well as
from a historical perspective, $53.70 over 5 years is an attractive
rate. Moreover, firming up fixed pricing for 5 years comports entirely
with our philosophy of trying to lock in revenues long term. The
agreements we signed in the Summer also required SoCal to pay our
facilities 10% of the outstanding accounts receivable upon signing,
which we have received (about $4 million, plus interest).
To trigger the balance of the repayment, the agreements contemplated
the passage of legislation to implement an MOU between the state and
SoCal or otherwise that would make SCE creditworthy. Before such
legislation could pass, SoCal and the California Public Utilities
Commission (CPUC) reached a settlement in a filed rate doctrine
lawsuit which SoCal had earlier brought in federal court. The purpose
of the suit was to permit rates to be set at levels sufficient to
cover their wholesale purchasing costs and retire their debt. The
settlement is intended to restore SoCal to creditworthiness and thus
enable the company to pay off its creditors. Among other things, it
permits SoCal to apply all cash on hand (about $3 billion today) to
paying off its creditors. The settlement was approved in Federal
court, though it is now subject to a temporary stay by the 9th Circuit
Court of Appeals. A consumer group has requested a longer-term stay
pending appeal, was denied in US District Court Friday, November 9.
It is our position that the agreements we signed with SoCal now
require SoCal to pay us the past due receivables and to start the 5.37
cent pricing very quickly. SoCal is taking the position that they will
pay us the past due receivables in the first half of 2002 and that
they want to delay the 5.37 cents pricing until June or July of 2002.
That basically defines the bid and ask. So, while there is a lot of
negotiating to do, it certainly appears that we will be repaid 100
cents on the dollar from them and at some point relatively soon begin
to receive the 5.37 cent pricing.
To go back for a second to PG&E, and recount what we told you on the
last call, we signed an agreement with them already providing us 5
year 5.37 cent pricing. That pricing has been in effect now for some
time. That agreement also provides us administrative claim priority
status for the repayment of receivables. This has all been approved by
the bankruptcy court and will be effective when PG&E's bankruptcy plan
is consummated.
With respect to new projects in California, there are a couple of
efforts underway. We are completing the process of satisfying
conditions precedent for the start of construction of our 500 megawatt
Three Mountain Power gas fired facility, as required under our permit.
We continue on track to begin construction in the 2002 timeframe. As
of today, we are in active negotiations with equity investors to
participate in this project.
We are also pursuing the expansion of our geothermal facilities in
California. The geothermal brine resources already under our control
will support significant growth, and just a week ago we executed
Letters of Intent with the California Power Authority to develop about
130 megawatts of new capacity at our existing geothermal facilities.
As geothermal fuel costs are not volatile, the way natural gas prices
are, this will allow a power offtaker to establish a fixed price for
power over a longer period of time -- in this case 10 years. And,
having fairly short construction periods, some of these expansions
could be on line as soon as 2003.
Elsewhere domestically, we continue to pursue our peaker model at
select waste-to-energy sites across the US and we are actively doing
due diligence on one larger Greenfield site in the South East.
Also, domestically, we are in month 6 of a 20 month construction
schedule for the Tampa Bay desalinization plant, and that is going
very well. The Water group has outstanding presently about $170
million of construction value and $10 million in annual operating
value in bids on further domestic projects that we're waiting to hear
upon. In the next 6 months we see a likely $100 million more of hard
bids, with a sizeable amount to follow through 2002. So the Water
Group is looking very positive.
Overseas, in IPP, we continue to permit our 400 megawatt plant in
Spain, the El Gorgel plant, with the expectation of a late 2002
construction start. And things are going well there.
And, with that I am going to turn it over to Ed to walk you through
the release itself.
EWM: Thanks, Scott.
First of all, the recurring base energy EBIT was $40 million, up some
29% from the third quarter of 2000. On a consolidated basis, including
expenses associated with non-core activities and corporate interest,
the Company reported a net loss of about $6 million verses a net loss
of $34 million for the same quarter a year ago.
Now, let me start with the overall non-energy results:
For the current quarter, the OTHER SEGMENT LOSS on our P and L amounts
to $29 million:
- The prime driver for this is a charge for the disposition of
Datacom, a non-energy subsidiary involved in the manufacturing
business for the computer industry, of about $17 million pre tax,
$10 million post tax. Without this transaction involving a non
core asset, the company would have had another profitable
quarter.
- There is a contingent note involved in this transaction that,
depending on the future cash flow of Datacom, could bring up to
$7.5 million of additional proceeds. However, due to the
contingent nature of the note, you can't consider the potential
additional proceeds in the computation of gain or loss.
- While it might have been possible for us to hold on to this asset
and realize a higher value, we believe it was the prudent thing
to do to dispose of it, given it's non-strategic value, and the
very poor state of the computer marketplace.
- In addition, this line item in 2001 also includes some remaining
activity applicable to our aviation and entertainment businesses,
that were shown as discontinued operations up until the end of
2000.
OEES:
- The OEES line relates to period type expenses associated
primarily with a contract at our non-core construction business,
which is estimated to wind down during 2002.
UNALLOCATED CORPORATE OVERHEAD:
- The decrease in the third quarter unallocated corporate overhead
reflects the overall reduction of G and A expenses associated
with the non-energy part of our business.
INTEREST, NET:
- The decrease net interest is basically due to having lower debt
levels and more interest income in the third quarter of 2001
versus the same period a year ago.
LOSS FROM DISCONTINUED OPERAITONS:
- For the third quarter of 2000, loss from discontinued operations
applies solely to the Company's entertainment and aviation units.
As I mentioned in previous calls, discontinued operations
accounting no longer is applicable. Therefore, any remaining
activity associated with these businesses in 2001 is included
with the OTHER SEGMENT expenses.
Let's focus now on our continuing energy business.
We think we had another quality quarter.
- We continue to have strong performance at our various
waste-to-energy facilities.
- In contrast to the two previous quarters of this year, the
pricing at our California facilities were lower when compared to
the third quarter a year ago. Just to give you an idea of the
differentials, the SRAC average price for the third quarter of
'01 was about $40 per megawatt hour vs. the average SRAC price
for the same quarter a year ago of roughly $80.
- That differential translates into about $7 million of EBIT for
the quarter.
- The point is that even with these lower prices, the recurring
energy EBIT was still up 29%.
- The performance at Quezon, as well as the start up of our
Samalpatti project during the second quarter of 2001, also made
important contributions in the current quarter.
- In addition, we continue to have favorable bottom line impact
from lower overhead at our operating units, which is a result of
the implementation of the organizational study the Company
completed late last year. We've had the benefit of this all year.
- Our water business contributed to the increase in EBIT, primarily
related to the Bessemer facility and the Dual Sand contracts. If
you look at the 9 months On a PROFORMA per share basis, our
energy business generated $.41 compared to $.29 for the quarter a
year ago. The increase is directly related to the very favorable
increases in EBIT between these periods.
NINE MONTHS:
- For the first nine months of 2001 versus last year, recurring
energy is up some 48%.
- On a consolidated basis, we've generated net income of about $18
million this year, versus a loss of about $141 million for the
first nine months of 2000.
The only other item I want to mention is where we are in
discussions with our banks. We had stated in our second quarter
10 Q that we had commenced preliminary discussions with our banks
to replace and/or extend our bank facility, which expires may 31,
2002.
We also mentioned on September 28 that we had amended our credit
facility for, among other things, adjustments to our financial
covenants, basically driven by delays in the payment for past
energy sales to California utilities and delays in the sale of
the company's remaining non-core assets. These adjustments apply
through the end of this year.
Looking forward, we will be requesting the banks give us further
financial covenants amendments and the additional borrowing
capacity we believe is necessary in order to execute our business
plan for 2002. We also will look to extend the current facility,
which as I mentioned matures next year. We believe we will be
able to present to the banks a credible plan to complete our
financial restructuring that they can support.
AND WITH THAT, LET'S OPEN IT UP FOR Q AND A.
Exhibit B
---------
[COVANTA LOGO OMITTED]
FOR IMMEDIATE RELEASE
- ---------------------
COVANTA ENERGY CORPORATION REPORTS RESULTS FOR
THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2001
-- Company Posts Third Quarter Recurring Base Energy EBIT of $40 Million,
29% Increase Over 2000 Third Quarter --
-- Year-To-Date Recurring Base Energy EBIT Up 48%
Over Comparable Period Last Year --
--Third Quarter Net Loss of $6 Million Includes Net
Loss On Sale of Non-Energy Subsidiary--
FAIRFIELD, N.J., November 13, 2001 - Covanta Energy Corporation (NYSE: COV)
today reported results for the third quarter and nine months ended September 30,
2001.
Recurring base earnings before interest and taxes (EBIT) from the Company's
continuing Energy operations were $40 million for the quarter ended September
30, 2001, compared to $31 million in the comparable period of 2000. On a
consolidated basis, including expenses associated with non-core activities and
corporate interest, the Company reported a net loss of $6 million, or $0.12 per
diluted share. For the quarter ended September 30, 2000, the Company reported a
consolidated net loss of $34 million, including net losses from discontinued
operations.
Recurring base EBIT from continuing Energy operations were $111 million for the
nine months ended September 30, 2001, compared to $75 million in the comparable
period of 2000. On a consolidated basis, net income amounted to $18 million for
the first nine months of 2001 or $0.35 per diluted share, compared to a
consolidated net loss for the same period of a year ago of $141 million,
including a net loss from discontinued operations of $129 million.
"In the face of a rapidly changing energy market, our base energy business
continues to perform well. This results from continued strong production at our
energy facilities, as well as our business practice of utilizing long-term,
fixed price contracts which lock-in acceptable returns on our invested capital
and minimize our risks to energy market fluctuations," said Scott G. Mackin,
President and Chief Executive Officer.
Covanta continues to expect recurring proforma earnings per share (EPS) for 2001
for its Energy business of between $1.18 and $1.22. Embedded in this EPS
projection is an expectation that recurring base Energy EBIT will aggregate
approximately $120 to $123 million, or a 17% increase over 2000.
THIRD QUARTER 2001 RESULTS
FOR THE THREE MONTHS
CONTINUING ENERGY: ENDED SEPTEMBER 30, ($MM)
=========================
EBIT 2001 2000
---- ----
Recurring base EBIT 40 31
Non-recurring items - (1)
- ---
Total Energy EBIT 40 30
NON-ENERGY:
Other (loss) (29) (4)
OEES (loss) (1) (6)
Unallocated corporate overhead (10) (12)
INTEREST EXPENSE, NET (7) (8)
--- ---
PRE TAX INCOME (LOSS) (7) 0
INCOME TAX PROVISION 1 3
- -
INCOME (LOSS) FROM CONTINUING OPERATIONS (6) 3
LOSS FROM DISCONTINUED OPERATIONS (net of tax) - (37)
- ----
CONSOLIDATED NET LOSS (6) (34)
=== ====
For the three months ended September 30, 2001, the Company reported EBIT from
its continuing Energy business of $40 million on revenues of $240 million,
compared to EBIT of $30 million on revenues of $212 million in the comparable
period of 2000. The 2000 EBIT results included $1 million of non-recurring
expenses associated with additional depreciation in connection with shortened
estimated useful lives of certain pollution control equipment.
The recurring base Energy EBIT for the three months ended September 30, 2001 was
$40 million, compared to $31 million for the comparable period in 2000. The
increase in recurring base Energy EBIT of $9 million, or 29%, is largely due to
the continued strong performance at the waste-to-energy (WTE) facilities and the
contributions of Covanta Water, specifically related to the Bessemer facility
and smaller DualSand(TM) contracts in upstate New York. In addition, the
Company's Samalpatti, India project, which commenced commercial operations
during the second quarter of 2001 and the Quezon project in The Philippines,
which came on stream in the second quarter of 2000, contributed favorably to
this quarter's results. The implementation of the organizational study the
Company completed in late 2000 continues to improve the bottom line. On a
proforma per share basis, earnings of the recurring Energy business for the
third quarter of 2001, amounted to $0.41, compared to the Company's earnings of
$0.29 per share for the year-ago quarter.
In addition to the factors previously noted, the 2001 third quarter benefited
from reductions in unallocated corporate overhead, as well as reduced interest
expense (net). This was more than offset by losses on non-energy businesses,
primarily related to a loss on the sale of Datacom, a subsidiary involved in the
manufacturing of electro-mechanical devices for computers and other equipment.
YEAR-TO-DATE RESULTS
FOR THE NINE MONTHS
CONTINUING ENERGY: ENDED SEPTEMBER 30, ($MM)
=========================
EBIT 2001 2000
---- ----
Recurring base EBIT 111 75
Non-recurring items 26 12
-- --
Total Energy EBIT 137 87
NON-ENERGY:
Other (loss) (39) (15)
OEES (loss) (19) (16)
Unallocated corporate overhead (23) (45)
INTEREST EXPENSE, NET (22) (26)
---- ----
PRE TAX INCOME (LOSS) 34 (15)
INCOME TAX PROVISION (16) 3
---- -
INCOME (LOSS) FROM CONTINUING OPERATIONS 18 (12)
LOSS FROM DISCONTINUED OPERATIONS (net of tax) - (129)
- -----
CONSOLIDATED NET INCOME (LOSS) 18 (141)
== =====
For the nine months ended September 30, 2001, the Company reported EBIT from its
Energy business of $137 million on revenues of $719 million, compared to EBIT of
$87 million on revenues of $630 million in the comparable period of 2000. The
2001 results include $26 million of net non-recurring income consisting of
approximately $21 million in insurance settlement proceeds related to a WTE
facility, and $6 million associated with the reimbursement of the Quezon project
development expenses. The 2000 EBIT results include $12 million of non-recurring
income also resulting from an insurance settlement related to a WTE facility,
offset by the additional depreciation expense noted above.
Adjusting for non-recurring items, the recurring base Energy EBIT for the nine
months ended September 30, 2001 was $111 million, compared to $75 million for
the comparable period in 2000. The increase in recurring base Energy EBIT of $36
million, or 48%, is largely due to continued strong production at various
independent power (IPP) and WTE sites, as well as the addition of a full
quarter's operation of the Samalpatti project and improved performance at the
Quezon project and in Covanta's Water operations. In addition, the bottom line
was favorably impacted by the reductions in overhead resulting from
implementation of the organizational study the Company completed in the fourth
quarter of 2000. On a proforma per share basis, earnings of the recurring energy
business for the first nine months of 2001 amounted to $1.10, compared to the
Company's earnings of $0.60 per share for the comparable period a year ago.
In addition to the factors previously noted, the first nine months of 2001
benefited from significantly lower unallocated corporate overhead and interest
expense (net), partially offset by an increase in charges associated with
non-energy activities, including the loss on the sale of Datacom.
* * *
Covanta Energy Corporation is an internationally recognized designer, developer,
owner and operator of power generation projects and provider of related
infrastructure services. The Company's independent power business develops,
structures, owns, operates and maintains projects that generate power for sale
to utilities and industrial users worldwide. Its waste-to-energy facilities
convert municipal solid waste into energy for numerous communities,
predominantly in the United States. The Company also offers single-source
design/build/operate capabilities for water and wastewater treatment
infrastructures. Additional information about Covanta can be obtained via the
Internet at www.covantaenergy.com, or through the Company's automated
information system at 866-COVANTA (268-2682).
Certain statements included in this news release are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward-looking statements above
include, but are not limited to, expected earnings and future financial
performance. Although Covanta believes that its expectations are reasonable, it
can give no assurance that these expectations will prove to have been correct.
Factors that could cause Covanta's actual results to differ materially from
those contemplated in the forward-looking statements above include, among
others, the following:
- - Economic, capital market and other business conditions
effecting power generation enterprises
specifically and commerce generally including interest, inflation and
exchange rates; weather conditions; creditworthiness of customers and
suppliers, changes in fuel costs and supply; unscheduled outages;
environmental incidents; electric transmission restraints and risks and
uncertainties associated with the recently deregulated energy industry;
- - Trade, monetary, fiscal, taxation, energy regulation and environmental
policies of governments, agencies and similar organizations in
geographic areas where Covanta has a financial interest;
- - Financial or regulatory accounting principles or policies imposed by
the Financial Accounting Standards Board, the Securities and Exchange
Commission, the Federal Energy Regulatory Commission and similar
entities with regulatory oversight, including without limitation the
impact of newly adopted FASB 133 relating to accounting for derivatives
which is effective beginning January 1, 2001. The impact of FASB 133
will vary between accounting periods based on changes in pricing of
various items bought and sold by the Company.
- - Cost and other effects of legal and administrative proceedings,
settlements, investigations and claims;
- - Limitations on Covanta's ability to control the development or
operation of projects in which Covanta has less than 100% interest;
- - The lack of operating history at development projects provides only a
limited basis for management to project the results of future
operations;
* * *
Contacts: Investor Relations:
-------------------
Louis M. Walters, 973-882-7260
Media Relations:
Eric Berman, David Lilly
Kekst & Company, 212-521-4800
COVANTA ENERGY CORPORATION
EARNINGS
(000's Omitted)
Quarter ended September 30,
----------------------------------------
2001 2000
------------------ ------------------
CONTINUING ENERGY OPERATIONS:
REVENUE $ 240,493 $ 212,282
DIRECT COSTS 189,909 172,385
-------------- --------------
CONTINUING ENERGY GROSS MARGIN 50,584 39,897
% of Revenue 21.03% 18.79%
S.G.& A. 9,040 8,563
-------------- --------------
CONTINUING ENERGY OPERATING INCOME 41,544 31,334
% of Revenue 17.27% 14.76%
Minority interests (1,660) (985)
-------------- --------------
ENERGY EBIT 39,884 30,349
OTHER - Operating loss (28,448) (3,512)
OEES - Operating loss (1,055) (6,188)
Unallocated corporate overhead (10,227) (12,497)
Interest - Net (7,287) (7,873)
-------------- --------------
Pre-tax income (loss) (7,133) 279
Income taxes 971 2,422
-------------- --------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (6,162) 2,701
-------------- --------------
LOSS FROM DISCONTINUED OPERATIONS - (37,072)
-------------- --------------
CONSOLIDATED NET INCOME (LOSS) $ (6,162) $ (34,371)
============== ==============
EPS-Continuing operations
Basic $ (0.12) $ 0.05
Fully Diluted $ (0.12) $ 0.05
EPS-Discontinued operations
Basic $ (0.75)
Fully Diluted $ (0.75)
COVANTA ENERGY CORPORATION
EARNINGS
(000's Omitted)
Nine months ended September 30,
----------------------------------------
2001 2000
------------------ ------------------
CONTINUING ENERGY OPERATIONS:
REVENUE $ 719,321 $ 629,804
DIRECT COSTS 549,634 513,412
-------------- --------------
CONTINUING ENERGY GROSS MARGIN 169,687 116,392
% of Revenue 23.59% 18.48%
S.G.& A. 28,185 26,432
-------------- --------------
CONTINUING ENERGY OPERATING INCOME 141,502 89,960
% of Revenue 19.67% 14.28%
Minority interests (4,586) (3,149)
-------------- --------------
CONTINUING ENERGY EBIT 136,916 86,811
OTHER - Operating loss (39,241) (14,610)
OEES - Operating loss (19,067) (16,194)
Unallocated corporate overhead (23,237) (44,808)
Interest - Net (21,867) (26,089)
-------------- --------------
Pre-tax income (loss) 33,504 (14,890)
Income taxes (15,793) 3,003
-------------- --------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 17,711 (11,887)
-------------- --------------
LOSS FROM DISCONTINUED OPERATIONS (128,871)
-------------- --------------
CONSOLIDATED NET INCOME (LOSS) $ 17,711 $ (140,758)
============== ==============
EPS-Continuing operations
Basic $ 0.36 $ (0.24)
Fully Diluted $ 0.35 $ (0.24)
EPS-Discontinued operations
Basic $ (2.60)
Fully Diluted $ (2.60)