CVA - Earnings call transcript Q3 2017

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Operator

Good morning everyone and welcome to the Covanta Holding Corporation's Third Quarter 2017 Financial Results Conference Call and Webcast. An archive 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 website at www.covanta.com. The transcript will also be archived on the company's website. At this time, for opening remarks and introduction, I would like to turn the call over to Dan Mannes, Covanta's Vice President of Investor Relations. Please go ahead.

Dan Mannes

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

an be call our Helgeson, Joining your update, questions. provide then the results, will our our and Steve financial review We'll Brad me on take and today Jones, and business CEO; President CFO. operational and

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

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

press as Form President SEC of For call our that, our and and CEO, X-K. Steve? well purposes, which I'd we like night and to regarding their to more definitions the the was on to use furnished Steve as was our Jones. please last to usefulness them, see competitive release, turn issued as non-GAAP imitations for how information measures With over

Stephen Jones

good Thanks, everyone. Dan morning and

solid you the of I'll slide Adjusted for those impacting million, and full a Dublin was commissioning highlight the start year our our the results key for deck, million. process at $XX past months we to reaffirming $XXX turn the to For With operations. through progressing quarter few please visibility are quarter. quick drivers Facility outlook. free its the commercial quarter, overview off The financial and EBITDA and the cash was on three. is using the Covanta of with fourth undoubtedly web flow Energy-from-Waste transitioning

an sees Covanta in We emissions our In tons of earlier During years to my employees with our of limits. we I'm website. to operations be of Dublin partners permit results test excited a quarter this view this and Council City generated renewable In financial our and waste And to over XX plant. in power. sustainable significantly for many month. over these this and accomplishment. We the day this below region for thankful with possible. management expect line and megawatt our we in We're emissions come. performance XXX,XXX run nearly our demonstration full test fourth posted also contribution commissioning, solution results very processed a to to quarter guidance, XX,XXX the production extremely position smoothly who hours and Dublin our made EFW completed proud decades and Dublin waste from many the quite the provide effort successfully third previous energy is

facility At approval the originally than is the of equipment. to This the expected. expect this for new fire and service update longer year. installation Fairfax As of the the earlier the timeline facility, we'd month secured detection end status of for suppression around return we this the much to point, an on we the County

discussion. further there's So

recall you the the call on in quarter. we second quarter back earnings later If facility April, first line in expected to come the

the nature could that. the damage have we of achieved Given

suppression simply agree in However, The to discussion system is codes on working this as we to to fire operations through required. a another to possible. facility that process in and so nature fire the the longer protection County, we're extensive quickly fire protection was here most important installation unique of far message took track resume given straightforward is not We'll of the The as the was plan of and application normal education of than expected. new do facility underway couple the months. and the

XXXX As the in went even greater overall Brad accounting up will this, this a detail. all in for anticipated previously result more insurance impact than review coverage. financial when of

price as or all With seeing the The materials of prices we expect increased realized and continued business Market prices, markets. end services volumes is opportunities profound exception Solutions see to of MSW trend, strength general processing. we MSW also we with outpace ways. disposal power Environmental growing CES continue pricing our to across firm site and waste Covanta supplement for for

prices this firm investment and improvements are the quarter's metals in non-ferrous results pricing processing. Lastly, the highlight from

and to markets Now, turn detail get business. X. I'll I'll into Waste Slide on start operation. Please the the with

price was EfW a X.X%. During $X or the quarter growth million same-store

all grew offset X%. plant. revenue key disposed total the in to Pricing business profile of as profile though Solutions quarter, at downtime waste by some the primarily another produced for availability quarter, capacity million. lower internal year-over-year challenges at Covanta the Fairfax, $X well to is grew by downtime However, Environmental it revenue faced related which solid this and as due Fairfax The double-digits an profile with at waste waste volumes reduced outage another

revenue continue alone The the us mid-single to internal of Fairfax X.X% growth will which However, of as through result year-over-year waste to the a a slowed lower headwind end. volumes EfW to internalize profile impact in waste, year-over-year. revenue EfW loss created profile digit quarter, year

fleet working of EfW or flexibility facilities CES balance of and our we're and continue expect services XX% our streams, anomaly, strong primarily capabilities, we usage facilities business of represents the waste materials third logistics the well these as the Environmental expanding footprint internalized industrial non-internalized of expand number XXXX more Fairfax growth and to increasing network capabilities. the processing certainly our to which of to waste option. fuel by facilities incremental growth. material exhibited With the acquisitions an identifying approximately to event to business except as the of and in profile service integrate Fairfax's recovery management disposal high price return increased and party throughout incremental CES improve expanding While a was waste profile successfully pace includes we typical Services, of and

reduced expected. given year service EfW waste the the full year previously Dublin Leaving full we unchanged pace they Offsetting These year. growth contribution all total environmental in than a that, as the have items. and outlook, quarter's revenue discussed have full expectations. For stronger modestly previously services of previous include from volumes we from mostly is forecasts

on X. Please move let's Now to Slide Energy. turn to

Soft was we by million were in while plants at partially other $X mild This energy contract downtime headwind. a the as by improved in again impacted fleet. the offset year another Northeast the this $X summer is Fairfax. prices the volume Separately, million production headwind, expect very year-over-year transitions impacted at by represented

waste, have We've Similar downtime and output with open managing to we actively to discussed, hours to which our further position. for forecast our and we megawatt position market previously when million year have approximately our production hedged due reduced the XXXX XXXX of Fairfax. full the for exposure of at As power only combined contracted market already our XXXX we're subject volume XX% leaves prices. reduced our modestly XXXX outlook X

Dublin. electric quarter from a the from However, will quarter revenue fourth benefit full of

Last in with year of sales on the expectation to business prices the to this some strong in out increase draw ferrous HMS begun quarter, XX% driven HMS second Same-store realized index ferrous sequential on were $XXX one inventory in Let's the with primarily to in quarter prices by move Metals index prices we half noted an now quarter. XX% per compared Market volumes in second down and the number X. averaging increase increased for ferrous XX% a a ton. for Slide the ferrous year-over-year. the play has

remained to for the ton. slightly full are $XXX per firm, we expectations year $XXX average have to raising prices our As

same-store On at ton realize processing facility. the non-ferrous The side, quarter doubling we or a from than year. more million centralized basis. after benefited sold per improved non-ferrous led revenue This pricing, as on versus increased to XX% by revenue material $X value the last higher processing new

improvement internalization the processing year non-ferrous previously pricing value. of reduces materials quarter stronger guidance As as volume processing trade-off facility. the is expecting This we reflected the fourth in represents net our also to sold, increased range. realized a additional in discussed, but We're non-ferrous full significant clearly

operating certain Total the and Slide now $XX increased in the Please and Let's EfW continued maintenance move scope both million costs CapEx and quarter, at including expenses. were facilities. downtime Maintenance was expense QX turn to impacted million to versus maintenance $XX work by XXXX. Fairfax in during on spend X. maintenance at

outlook maintenance to remains $XXX at million the at Looking and million. $XXX for full year, EfW our expense CapEx maintenance

of expect now to that be range. the top at we end So

X% the expectations. same-store QX to XXXX, appropriate facility, Solutions compare Importantly, longer escalation. year range this that provided the with operating flat related start-up also we million Other year processing growth year-over-year. and and the the wage non-ferrous expenses well reiterate basis, three driven benefit costs XXX a is for we beginning of is platform, the $XXX were expenses within on normal the in million increased of to Environmental that relatively plant Covanta by Same-store business setting EfW the at a range term this for

to During expected come million recoveries we insurance XXXX. some receipts the in recoveries. Incremental $X the in in quarter, are recognized third later year with expected

with million in disclosed we resulted which the Lastly, an to settlement related $X contract a a client reached dispute, previously benefit.

the hand want few drivers of outlook. I to I call a business our to revisit Brad, Before off

of raising us get efforts, permit finalizing UK year in we construction. first This early financing. pipeline in to development First, the is as the closer. expected the construction and XXXX. we financing and of a advanced move in are half put project continue project this international The The little position to to or environmental should more later contracts a Look about our closer hear final now into our most is project this make to we Rookery in progress. next and year

Second, on commodity our noted remains annually, the regard. of we organic generate an prices. quarter that as has expected to annual that the Absolutely in excluding X% nothing to fourth expectation X% growth changed call, impact we This XXXX average.

is event in impact year, push that and likely reaffirming to in will XXXX. for expected us operating right We guidance Fairfax, the return Fairfax the our some growth better improve facility the highly in XXXX. performance the down of temporary. along drive of our the into for of investments below long-term the But confident most of in impact year. of we're deferral the ranges or with target type facilities XXXX recovery the notwithstanding Fairfax maintain the impact essentially making However, this believe we're a being insurance are to And business growth this trajectory in and a overall this again, organic of and growth results

transition Dublin results to the operations, I'll adding gratified expectations call stage while efforts. for financial Brad the turn results to in discuss sets to XXXX, that, particularly the detail. With original to we're This third development to line our more out. with improved momentum we commercial quarter financial the in the over plant in laid Lastly,

Brad Helgeson

and we energy while partially as offset million $X capacity lower electricity organic saw ferrous, this increased Stephen. an the business sales, Thanks, Waste basis $X payments. million million solutions quarter. $X revenue the financial by contracts. QX service off Slide within was increased morning, our small completed XXXX. our $XX environmental organic a downtime partially of commodity year-over-year, X. everyone. through was overall, the million price $XXX benefit, performance of in more headwind on power a on offset amount $X $X my acquisitions million expirations new revenue year-over-year. Total price rolling ongoing business growth prices improved long-term improvement three growth, activities, year in for quarter core were contributed increased energy earlier improved of share excluding by the were on down our line. as offset I'll metal and revenue million the metals than Recycled improved transitions higher million Revenue processing $X changes an Good contracts with represented Outside at the pricing net prices million Fairfax following contract pricing over revenue same-store expansion on $XX prices of million by impact revenue the begin review Contract services waste quarter, we markets with that environmental third

same EBITDA was year. was Slide Moving year. last million on million compared $XXX $X last On decline organic quarter, XX. million adjusted in to EBITDA same-store Adjusted lower a than the basis, period $X to the an

to little Excluding timing in the Fairfax, the insurance quarter due primary in earnings offset the from decline benefit on the core had flagged $XX downtime prices, from business driver to million activities last related which as had higher commodity the was at the quarter. call. was interruption business of our we recoveries, The

net pricing slightly factors result, softer in settlement the the prices our gain long-term an offset impact was stronger the prices. with dispute Commodity of million Irma transitions Florida, processing. expiration of plants higher were contracts than in quarter, the the on year-over-year, and couple new to improved of a effectively non-ferrous $X $X Hurricane a EBITDA, was impact on waste prices adjusted Combined Contract As the impact contract waste downtime well flat outweighing offset as maintenance, of year-over-year. market a improved and Fairfax above contracts. metals these power negative terms of from negative at approximately the as regarding more million energy were benefit benefit to as which the a expiring of

which Fairfax organic warrants of exceeded deductible At downtime all year, forecast and had driver it's to business has from of to around represent in claims financial our to to will Fairfax The impact we'd net mentioned approximately for we annual major guidance clearly able is including initial Looking at excluding year, growth and activities, not ahead be far reflected a the this point, our we'll as a Since million, main explanation. the reach the X% that would stated for Fairfax, we initial estimates. midyear. had year, previously unlikely fire assumed we for this return the our interruption provided just prices. deeper Steve core resolved we commodity of that impact be When $X that X% target believed a service business XXXX. insurance the

with improved the half, plant back significantly in we benefit up second the versus running performance addition, and would year-over-year In XXXX. from

and transition a we in As our this production investment plant the profile following of time made and growth merging a the waste in discussed anticipated XXXX. key year, better on of the last return XXXX to significant was we the investment plan volumes at structure higher as plant in generating a for that in form driver

way returning the discussed time push to protection the the fire which a However, as to took of load. the anticipated, the securing the operations control. timeline of of by year approval ramp to for of Ultimately the restart was up the system all will full complete we out longer our much than with fire and likely installation, this plan process end simply plant County full

XXXX in reasons. grown financial overall substantially the result, impact a has two As for

insurance a is million. earnings now $X XXXX had collect of mentioned could our from last This XXXX benefit a purely issue, possibility we this slippage on we as interruption which to Note will our any total portion business dollar-for-dollar. as results in a XXXX to in million expect $XX First, timing call.

initial overcome our $XX event. is of $XX initial much for be That improvement range history operational totals into Covanta, good the event stated had plant purposes investments of the and And million, full following represents Second, this heading a will The to below we've million volumes. able of In guidance. depend target. waste up out includes of time not that's of our this growth with an too to exactly and will organic amount another record of we our occurred. relative to when to the reaffirming about our positioned million. in XXXX. recognize million a likely we're All expected our is operational course will delay never look onetime and but profile million expectations made to we're insurance event on be of generate midpoint. the which as $XXX recovery, news XXXX, in, year-over-year in the guidance compared we any that this simply $XX growth timing to to in part scale come end performance we to we Fairfax, Notwithstanding XXXX forward year Where $XXX and to

you as million and $XX contribution of would Lastly, think quarter business Fairfax. be expect year a benefit of with Dublin of from our interruption of potential the about fourth $XX we quarter insurance the full it the million million additional to recoveries to roughly for $X strongest

$XX XX. billion prior million Slide quarter flow the to Turning compared Free year. the was $XX in in to cash third

changes driven in lower primarily was cash $XX in by EBITDA the flow adjusted and working Excluding quarter. million capital, CapEx free lower maintenance higher year-on-year,

we're full seasonality substantial the implies $XXX in our year, be adjusted of is our to of free fourth and flow cash in will $XXX our a for For quarter, come line flow guidance reaffirming range cash portion core which by supported million historical EBITDA. the will with million. of strongest This

XX. the Around and Dublin Slide the construction debt as given fourth as some estimate the scope million for increased final to dollar funded our small well terms, year $XX completing spent is will drawdown in by this quarter $XX facility. stronger be be in The to non-recourse left of US Turning changes. million by project entirely euro,

attractive explore plant Solutions, years optimization. and ahead, in anticipate future ash Looking drive opportunities to Environmental and processing and our in continue assets spend returns to to invest we in growth continued organic and metals

to seek balance improvement organic we highly growth the EfW project growth, sheet disciplined strike balance over on or we be as will and and However, acquisitions at looking between risks time. projects whether returns Greenfield right

about UK meaningful our get our of questions to pipeline, a these lot our opportunities in balance investment plans relates for development financing project sheet position. it light of we As

So like clarify things. to a I'd few

that investments capital all will environment well-structured, of return matter, in attract general we for is will we're First many very as that current projects The robust. a be the market believe high infrastructure developing finance forms.

So at range attractive have project financing of a level. options we'll the

these to the to move clearly Rookery with financing investment, must invest payout this. for in forward will holders. We're so when to Any our commitment project allow to accordance our the Second, other alternatives with all plan evaluating achieve our of without we must capital objectives currently balance it sheet not comprehensive only impacting any with us the or and just strategic presented do improving that be dividend a major will one. plan objectives we our

I Third, funding strategies Slide of contemplating XX. of to currently $XX the XX. September can compared that we're confirm Difficulty] none as a Net that public debt Difficulty] equity XX [Technical includes June million [Technical

leverage the project senior $XXX versus point. excludes covenant billion X.X company $X.X of is limit net and ratio covenant before, I've high at credit as of September well [Technical this The trajectory a commence cash Difficulty] debt, as our adjusted of times. [Technical line, Dublin. expect XX improved holding of will the times at And in QX unsecured consolidated Difficulty] QX stronger debt we secured EBITDA improvement The our on to Our at and now turning to this debt Dublin was performance represent flow secured as million with mentioned here ratio relates covenant ratio, over this only free facility under end the as four the watermark, times. to the in

this flow with move consolidated drive improved will lower next Q&A to quarter. adjusted the we we'd and section. ratio like beginning operator expect to cash As ratio, EBITDA With that, the that

Operator

from & of question a Your comes Oppenheimer Instructions] first line Company. [Operator Kaye Noah from

Your open. is line

Noah Kaye

Thanks first questions. Good for my on taking And Dublin. up congratulations morning. standing

Stephen Jones

you. Thank

Noah Kaye

you both we If as your here. look it pipeline, in and does prepared mentioned opportunities to that near-term the could project remarks, know, turn done. Brad some Steve be Well to you

ramped? talking X mentioned a kind the Can permit half and know, Just us plant has you the secure years you Rookery, could like remind is know, of about as kind XXXX. you of Steve as think for early you in be that potentially construction stood you up I right that if just timeframe environmental begin the first

Stephen Jones

it kind step appeal right. Yeah. so in to we're goes mean, That's be a process it be the the environmental kick about - XX the an next expecting to day off then that the next and permit appeal, process consent through the is can kind here I then of of project. the - issued permit and

some process. appeal - people three then kick that and Although a and plant. some it people - years about XX during to day off I But it's construct understand

Noah Kaye

you a your know, Where that Understood. process? of And or then waste you've terms identified. in are environmental partner couple with permit of those projects that identified in has UK other

Stephen Jones

like. about process Rookery Dublin two waste there's think And with Biffa in - to XXX,XXX we about is XX%, that now of on last look are projects working in on The stages Biffa how we're earlier metric you about announced what quarter per a the structures other plant projects, as five plants out figuring something. So is that that's so that kind This going if are supplier. know, ton we're that with two sizes, XXX,XXX the we're working - now the range. you ton, move five forward year this those with

that's little the further in in Rookery. So pipeline a back

Brad Helgeson

And far environmental planning for permission compared and those away is about just development have of we permit. the which hurdle, plants the those for as have all three permit, is to all were planning a asked three you because of difficult reminder,

Noah Kaye

Brad And Right. Right. very commentary around was financing your I the know, think helpful. you

a I viable a clear know, to on have point believe getting question. Rookery the lot provide that questions this a are finance without plan of Do I the want portion ask dividend? for We at But just to guess, cutting equity the you of obviously. you you

Brad Helgeson

Yes. the That's certainly objective.

Noah Kaye

Okay.

I'll turn much. over. you Okay, Thank so excellent. it

Stephen Jones

Thanks, Noah.

Operator

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

Your open. line is

Tyler Brown

guys. morning, Good Hey.

Stephen Jones

morning, Good Tyler.

Brad Helgeson

morning. Good

Tyler Brown

today, year Fairfax think based about maybe a waste County, forward? Dublin I away. so processed so of how and fleet know maybe guys going that got annual Hennepin basically few million line, ton's to are this pieces Brad, process think guiding should But we XX moving quite on I there's the and around you you transitioning back Hey, coming tons here, on

Brad Helgeson

precise guidance approaching year. that of expect a mean, will out tons. next put I million should course when we put XX for We approximately number our to be

Tyler Brown

then can And million is remind tons? Okay. profile and the special in us of much XXXX how just you waste XX

Brad Helgeson

about is think expect Yeah, year. I we there is XXX,XXX, the for what full

Stephen Jones

Right.

Tyler Brown

you a me Okay, if not maybe indulge little we've we I'm year. here again if organic for perfect. Fairfax, sure you've And this bit, impact just then positive to maybe about the can got you X% from add continuous mean, not. basically then know, improvement, cetera, that the not? if those think take But hangs over from profiled you pieces maybe I the pieces got in is little includes I waste know there transition metal power we an et we X% growth. missing Brad and next we are that Hennepin the transition or anything more a I'm that and on prices. and XX then Dublin bit to northeast think and whatever bridge But the think, away this or

Brad Helgeson

the hit know, the that's all course, pieces The is you talked point and we all of one clarify the about about mean, you past. the that I is we've - No organic of of that growth. transition big talk outside head of what I'll in

own. to X% stands on the X% its So

X the as $XX year-over-year the if probably of on contract And If the the include go and with negative the about headwind transitions. end number a on up. transition impact waste about power we like a then XX you you of number between you remainder million year-over-year talked up Hennepin of a Hennepin,

Tyler Brown

kind would so the included that Fairfax Okay. X? of be X in And to

Brad Helgeson

than in year to investment that plant fact but included the the production hear we're I put know, record is all we and that that you'll I into ahead yet, fact that be out down really would not going to better our X%. the that's going you I recoveries go XXXX. X, XXXX out at getting expect know, to us say do made Yeah, we to am we XXXX but given you to running that the to year expect is hope be Fairfax given guidance insurance this next expectation X some be X% will in falling what entire point

Tyler Brown

Right.

just No, hop to go appreciate. I I pieces, over but Okay. kind in I'll of wanted queue. the back

Operator

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

Your line is open.

Michael Hoffman

Steve Could rate if with you, questions. Brad for have us what what you for million morning. help is and - hours hedged, you 'XX? my megawatt Thank hedge And good is taking X the

Brad Helgeson

roughly we - to much but than XX for consistent. higher this hedge XX, It it's so is Brad, roughly probably it's hi, year, Michael,

Michael Hoffman

in X then XXX and ones at XXX spending, you year How from range? relationship that about think [ph] in And range Okay. three about year that to two talked I in to do maintenance total XXX.

Brad Helgeson

that's that come with give head. direction know, I the before, 'XX guidance. in expect still down obviously will range we back 'XX where we same So little around guidance shaping our out that and of up we'll But it about 'XX we'll that when talked as a coming then in higher tighten and you - we 'XX on

Michael Hoffman

make and want that Okay. XX XX in 'XX? 'XX Is it in understood then just to comment. there's sure some the And total I potentially Brad or insurance to X its I still to could happen X

Brad Helgeson

Yeah.

out just let the So components. me lay

impacted quarter EBITDA on is million. we $X the any, up in obviously us So downtime, the $XX We $X second quarter, offset an just of to going ended but the million this if $XX quarter. that with we receive million impact reported positively, we million were weren't by sure

in the then to quarter X next another XX year. to expectation fourth XX Our and is X

Michael Hoffman

Okay…

Brad Helgeson

the That's as here about today. we estimate sit

Michael Hoffman

And That's then total. me. we for or one talking whether I in pieces didn't understand Okay. last were what is

would typical being? growth internalized that a to as growth rate what define return a rate framing profiled You're you

Brad Helgeson

for this our - issue or hands profile home on Double-digits. Yeah, we it. know, a you issue had got it, know, we was sourcing it's year after this waste, interesting, there's you finding the no quarter after we in

too down, third it large a So us doing a our investing Fairfax plants lot of of and that little party be of in be we're also business, robust well waste to energy customer our network but facilities participate in because disrupts other will have Fairfax more now for to plants waste to in of which plant waste profile be it respect. first mature one energy little so for stable also from a what to quarters, like Fairfax kind bit. with that a there. two get up that we our its profile can But our profile has And the things goes processing a have doing through the not base we again, waste recipient a and with and in facility that we ways that allowed caught customers and were we're there's is plenty waste - out this right, facility profile trying out of more

Michael Hoffman

And handling enough. you're capturing lastly investments benefit do the ash on of any that? stand where we Fair making, on

Brad Helgeson

in different sites. Probably year, next we're We're the at looking late early XXXX. - several

distant probably then One things sites is the the in probably there. headed system. good not from feeling processing We'll in we'll not pre-order far on the strategy permitting future. permit of are some where that equipment. fire X - about we're And what ash guidance months too think to and pretty the not right getting Pennsylvania is our on XX it's I of We're here

of time cycle by try the there. to the down if going equipment. kind start So pre-ordering of We're to cut you some will we'll

Michael Hoffman

very Okay. Thank much. you

Brad Helgeson

Michael. Thanks,

Operator

comes the question from Baird. Kallo of next from Ben line Your

Your is open. line

Ben Kallo

you Could should think guys how the picked if just year, CapEx maintenance same Hi. for about Thanks next kind of this going year we levels? into a on about should it's about of talk we that little guys of that elevated question. type about get taking and we or as think my you for just and head up sort bit or

Brad Helgeson

look - maintenance years out maintain you So before. at detail to folks and in down plan and a different as great level and we multi-year pretty this X do years plant move to the on It's we talked we about we're X XX to through we then before what shared actually we robust with facilities. going need now

you at is of do through we do the look plants boiler. are and piece during third at year that year year. you if a as pop than we issues So through within plants where example up or a - our versus had more work higher know, say driven when and of mean, with maintenance. were I'd right this like this and September our XX, process is maintenance do been discoverable the and that you have than effectively thirds expected there's that for by they from last lower two X:XX, you're more I you to year-on-year about or turbine a equipment projected of occur, about

to as year, going we're next we forward same the go process So now. through

little higher we I if then X XXX will to expect a at come to XXX, As start they you again. started will year we be to guidance down back earlier, and little our year next mentioned a that get look

is it has - number year a Next of activities. different

some example, major to generator For turbine that have we do so. outages

higher and down is expectation. come it go back And then a so again, little will our

Ben Kallo

Okay, great. Thanks very much.

Brad Helgeson

sure. Yeah,

Operator

Silber of BMO from Your comes from line the question Jeff Capital. next

Your line is open.

Jeff Silber

just I wanted much. so Thanks to to Fairfax first. back for go

that it let's plant so you running and of get the kind pre-fire back next long this How to beginning going levels? take And by of end assume to that to up is of year. kind year, in know, you're

Stephen Jones

in of By putting a it's kind that's November on - period you be it's we'll restart that right. time. start the of you down sometime then we'll now would going to and up, built know, all at the We're equipment, done the you look in to and the plant end timeline in. of start putting been plant a right if this in fire year, tell after suppression for I

full end know So year of to at when the operations. - back we give you you that's the restart,

Jeff Silber

a just hear. then Do of regarding the terms that you terms a permit? Okay. getting there period. That's great in small permit. comment of kind on in foresee any was Rookery, environmental to of the issues know And delay I item

Stephen Jones

don't. we no, No,

Jeff Silber

Okay…

Stephen Jones

again to and mentioned, need in permits and the permit tougher that planning really two process in is the you it. a We're Rookery the And projects, go we permit that have get the through is midst As to easier to get. Brad Biffa now. the process of environmental order

Jeff Silber

for call. Okay, great. the Thanks

Stephen Jones

Yes, sure.

Operator

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

Your open. is line

Brian Lee

Thanks taking guys. Hey, for questions. the

Stephen Jones

Hi, Brian. morning. Good

Brian Lee

morning. good Hey,

Just one on me Fairfax. more for

a row, you And that had mentioned impact Just Can was you're the heading did the of what also and incremental our into year recovery of coming proceeds? year of you opportunity with for in you where insurance here expectation into delayed the know ducks so sort $XX out we you improvements all falling facility. the have that quantify EBITDA operational full at fiscal a then you know, Fairfax sort 'XX. million from

to is in get the 'XX? for you'll for Fairfax mode operational just year So more this you where base about is of square normal modeling as catch off all know much trying of that be should we to how up think

Brad Helgeson

it's Hey, Brad. Sure. Brian,

you just I So of of key our the for the providing - do profit we specific expectation expectation a made actually and are our little production benefit, of 'XX individual number investments - on why there we reflected from running But in reasons of that million than that. for hit numbers we'd numbers, a think plans XXXX. short was stopped the year-on-year $XX better more

part organic is you going you you be X% $XX a that as plus think X% X% or know it expect to or next or when modeling of So we growth benefit that know, a about would X% year. million the overall

Brian Lee

Okay.

Okay. Fair a just couple housekeeping enough. And then things.

settlement million that view this from embedded would And quarter. that $X future the that the residual year? was announced Any you that complete. in that or that is quarters also capture EBITDA this impacted that impacts On in was

Brad Helgeson

ongoing year. probability we the entered as no to could settlement, So like the do - lingering not assumption we there other, think happen around that the in done. dispute you a certainly suppose may we any one this weighted of this, year. number that's reached it that have way we've so the of things was no as I is settlements is - and impact or the been paid there We

of our say part thoughts factored many again maybe overall pointed into range. as So it in but with guidance other I'd along wasn't range, our it many, things, specifically out on the

Brian Lee

Okay. Makes last sense. for pass that on. one then And I'll me,

mentioned the residual and I provided CapEx last to XXXX? should facility we expect up that the drivers to Any in Thank $XX related you quarter. outlook you. any also can to was euro, Dublin but versus million it think speak the you growth CapEx related

Brad Helgeson

you think completed, final and part on. making slight is the in the change I sort take up you I'll orders, There subcontractors increases nothing know construction as just operation, we're about blended just finish last obviously some some we're scope first. - warrants still of as individually so is It's as talked to payments that we're Yes. was explanation. commercial being as general but more project. - There we've scope No, expansion.

a course, of I size. percentage event wrapping up the But small it project think though scheme in it's in quarter. of of any the in here we're things the overall very fourth

Brian Lee

makes Its right. All sense.

Operator

Your from the next from JPMorgan. line question comes Abebe of Yilma

is line Your open.

Yilma Abebe

morning. you. Thank Good

Stephen Jones

Good morning.

Yilma Abebe

much call over on pipeline and looking next you When forward. at sheet the to financing going that the How XX should of see we months? expect the the various the projects have it balance

Brad Helgeson

So on of them of an course developing contracts, way our individual the project projects pure not these approach for merchant we're are baseline is primarily generally long-term with finance with level are non-recourse projects project projects structured, these PPPs. the to that they're waste underpinning

of with modeling thirds XX% the XX%, structure project two be to that capital with maybe for they purposes So generally - you can raised could debt. support

projects a the we we - improving of on is so that continue So considering options range can project the and the as we sort both balance that's our sheet. And of level corporate and equity. at the the next on can beyond continue and becomes path how year fund plan where that the level, of of fund path you then we're know, at our question

Yilma Abebe

to a But tune just that. fine on put

if happen or we the we would this more 'XX to see look You beyond? XXXX is and that financing expect at know,

Brad Helgeson

You'll - have it move first which talking the financing to see the to we Rookery's specifically, to in place in project the forward half going in plan XXXX is ahead about we're a will, going first project that. expect if is the am the I - going move of if forward in

Yilma Abebe

Okay.

I and financing high Okay. the of sort you talked about that then with here. end the How of at down trending And leverage of and guess currently sort that being 'XX? change half then to context does first in that from point and

Brad Helgeson

it's into out we know, the specific get plan. the impossible really so the lay to impact and plan, You of

that committed said So again just move you But go hard know, to to to minute a question. I having ago, leverage answer what that those we're I'll back ratios down.

point. the that's think I

Stephen Jones

focused on that. we're Yeah,

Yilma Abebe

Okay.

one you the types? know, Okay. And know, were in about you you half know, 'XX, that of in then terms particular how total the last first XX talking we of project one much in for project

Stephen Jones

Dublin, this moving past Rookery Dublin. that is out past size the about we've about roughly the XX% talked point at XX% where we're in to of detail. it's we've in when more of and the in What to the talked we're comparable we'll But lay forward of size is the about

you project to Dublin, US$XXX you're XX% at looking if to XX% of ballpark going - cost So to have capital look leverage. we're at million. take that, the of level have We're going

We have partnering partner. We're Veolia project. a with that in

we to make to that to what can you lay assumptions clearly. come we'll again So will both point requirement be. out of very that investment when some those around get all But equity our

Yilma Abebe

in are Okay. the that's 'XX right, only in beyond, true? projects XXXX, financing all And expected the really and that is

Stephen Jones

we It probably as should that's here good I assumption… sit but today think determined, be

Brad Helgeson

going probably yeah, good forward. - probably assumption it's That's

Yilma Abebe

had. very Thanks much. Okay. That's I all

Stephen Jones

Thanks. Sure.

Operator

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

Your open. line is

Tyler Brown

what quick there plan how York, a kind just but spend year, CapEx be growth But follow early, so here. perhaps the there. next be then about facility? you buckets - to growth do all it's up will spending on I any know in specifically guys we Steve will should Rookery. think New Hey, I there, much additional tap's of guess And will

Stephen Jones

So year, be you all that the am right. I buckets expecting next three mentioned, the they'll that in

getting a proceed. about They're finishing construction. close let's New to to the York We're expecting talk So second. notice for

about station in pretty lot of know, people saw and the pictures you I along forgotten other and transfer second some construction. which have far a the they're is But interesting. marine think day I

us notice again but know, construction on one standpoint sites, X, from - get half facility different the in a Brad just of options to XXXX. kick equipment. some looking off it'll of we're expect to couple we'll Fairless you of of take months like feeling mentioned project, the good So expecting the on at proceed and we're XX into Rookery, to likely that pretty the then Pennsylvania. permitting in about And first sites XX talked taps a a gets about then buy we're is I and things

in that will will That kind about out of on so. permitting. DEP see $XX with working and square 'XX been cost kind through numbers of some or the be you'll we've we're the - you coming probably we and if that through, permit obviously, so facility the of So those know, get Pennsylvania now, in coming folks of some million

Tyler Brown

the City - York And for for marines… New

Brad Helgeson

just as as Yeah, with but will the that be on be all we'll as likely a is station equipment to at structured be reminder, looking we of for capital the did equipment transfer Queen's probably leasing leased, we're equipment going purchases, but million $XX about that equipment. sheet be balance

Tyler Brown

Okay….

Stephen Jones

incrementally [indiscernible] $X once gets million about transfer that of Yeah, started so. EBITDA second marine up, that's station

Tyler Brown

for that's barges the cetera? et and And containers Okay. the

Stephen Jones

right. That's

Tyler Brown

just I'm mean, the And I there I'm optics look then end financing so on But of the analysts, up front? asking. on instead then sure that issue. Rookery whole don't - towards equity, keep are know financing we what leverage And leverage why the just that have even post to Brad, options I'm at are sell side can posting there somehow replay bay. not but Dublin structures the where I some not again

Brad Helgeson

both guess that get Yeah, and to options at so saying I there yes, think of I'll I answer that corporately this and project but level are is… the range

Stephen Jones

to that… answer The

Brad Helgeson

we're the options you up. of most dream But could probably reviewing

Tyler Brown

Thanks. All Look more. to right. Okay. forward

Brad Helgeson

Tyler. Thanks,

Operator

next Your from Noverini comes question the from of Barbara line Morningstar.

Your open. line is

Barbara Noverini

morning. good Hey,

from a quick one Just me.

Stephen Jones

Morning.

Barbara Noverini

Stephen, upgraded that's to plans planning baked CapEx install near talked the plans many benefit an term, suppression you're for about know, how from your plants like your had already? could you you of what mid-term I'm and maintenance Fairfax and whether curious into your system, fire fleet

Stephen Jones

and been our Realize We are roll other those just Fairfax out I Yeah, learning's so less that's across I've plant. or taking the to the team of with number fleet. the able to by on working than were because question, develop owned know, folks. we at good start a little a plants, half the here really operate that you that achieve

very with and look So million. suppression cameras decision deluge mean, in systems. to out expensive. infrared be facility less to our is to their different They're a to to this fire $XX a we're start rolling capital. is put decision probably to their [ph] fit that going not now out at - is kit And the But out. the going I our plans, than realize

of And so lot cheaper, has the because got a cameras. particularly technology around the

and starting we're that to roll that And now at so out. looking

think upgrades as an that's important I to plans our forward. move we

Barbara Noverini

All lot. Thanks right. a

Stephen Jones

Barbara. Thanks,

Operator

call the at no There questions I over turn back this further are now to Jones. time. Steve

Stephen Jones

excited I'd where do it's like come into really this transition to thank we're and allows year Dublin a Dublin stream today. things. joining operation. and proud everybody of about as a us for that is coming to I us Again, on mentioned previously number other

I So we're for trying joining folks XXXX for rest as thanks are Thanks at time. understand of taking and us into to that doing Again, busy. XXXX. looking the through forward here move the what and Covanta. we're we to appreciate know

have rest of day. the and a thanks good So

Operator

today's conference call. concludes This

You may disconnect. now

Covanta Holding (CVA) 27 Oct 172017 Q3 Earnings call transcript