CVA - Earnings call transcript Q4 2017

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Operator

Good morning everyone and welcome to the Covanta Holding Corporation’s Fourth Quarter 2017 Financial Results Conference Call and Webcast. An archived 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 introductions, 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 fourth 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 these comments, referencing call. Brad Relations accessed prepared after we Investor Those will and prepared that website, on slides. listened to prepared can now our of call or should their comments be with to slides www.covanta.com. Steve slides of supplement the conjunction in These be

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

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

Steve Jones

morning, good and Dan, everyone. Thanks,

web slide our turn along waste, get our to For of line initiatives. update I’ll on of and into some Then, XXXX revenue you a using the details overview those I’ll energy and provide deck, of on financial strategic results with brief please operating an three. our metals expenses. the

million I’ll flow. development status a adjusted longer Lastly, with on of business project view cash we and year $XXX million the an term XXXX, on with free close out objectives. strategic $XXX our of update outlook In our finished and EBITDA and

energy February initiating are waste million. the cash and XXXX to in the to of of between EBITDA investment $XXX Investment Dublin million million XXth. of factors This the $XX guidance Group’s capital further reflects and guidance and in million will which I’ll Green $XXX adjusted But on go between impact We cash XXXX highlight things. $XXX Brad $XXX before a drove free free through results quickly million, flow detail. few $XXX our million, the closed facility, working that

tremendous of development our year progress First initiatives. a and foremost, on XXXX was international

beginning a our is partnering operation were expected. than and tremendous economics the As Dublin asset. been success even plant the commercial the strong anticipated, facility in factors of has better key and reached the to-date performance with This quarter plant This at of fourth GIG.

is XX% of project executing our these assets December, over shortly, multiple of exchange development types for is At development that for touch invested a in a operations command would type that in but XX partnership to GIG EBITDA, outstanding million valuation in and stake As €XXX the key the of an the experienced of infrastructure deal times priority. not like milestones, this I adjusted projects upon forecasted possible, note plant. we been can not have We’ll example market. would teams. discussed if execution on in specific This these

tirelessly working these we’re you are progress teams respective with to the projects, share further Our throughout and year. mature share updates to

front, protection our domestic facility recovery installation and end few the completed at timing we the of our XXXX. in which at Fairfax had upgraded equipment fire of minutes. performance, I’ll impact and collateral suppression to a service we than of The the and On longer was discuss the this returned on expected XXXX

to driver issues XXXX those the and of growth. rearview be are However, Fairfax key organic mirror, we now in expect a

Beyond generate have able in notably to in In metals in facility line full as prices. swing. to higher monetize on separate XXXX, our order Pennsylvania. second brought Fairfax, our non-ferrous remain positive efforts Results higher net and been growth Eastern we processing organic the quarter been of we’ve value

this to early a contribute XXXX. plant Covanta given our continue of and and footprint between full-year processed. an further to operations in expect XXXX We increase Environmental we acquisitions expand and completed to performance, four XXXX At Solutions, volumes regional

utilization XX% cross-selling business momentum expect XXXX. and increased services environmental by its and grew that initiatives continue revenue Our we in to through

moment take Before our I move and like markets, our on to operations specifics in about a talk XXXX. I’d about to

As majority fleet was facilities. to excellent our Fairfax, plants operations. contexts highlight many by is our of downtime was of on driven want provide of of below nearly one our a vast had performance, you expectations. the are To which our This I largely largest at aware, aggregate original full-year that plant performance more

that we’re This us. effectively move terms to results, tip In we drive larger managing performance area a Essex These the life waste we’re further improve our and fact, Hempstead, confidence all-time are processing, their Valley, we following Niagara. amount taken or that as some like plants XX and maintaining significant our taking assets. Delaware cycle steps. reached deal with a fee of needs value gives of plants plants focus and order In forward, largest have including to our plans for our records shareholder of us are in

and continuous we have expect fleet. through to First, these we’ve implemented at improvement plants tremendous drive further initiatives success had that our

and The peak plants a at goal are to other at that implemented plants, operations best our operating performing our success evident drive plants day. is the have plants stable with performance of implemented performance use to all several program analysis of this CI plants. a statistical operating which plants where replicate Some form in eager are currently this of we program at fleet. And have is every

safety This likelihood installing we review The thorough costs. we future we terms and the our take costs begin for of Second, a of outweigh these facilities, will the borne to fire that potential of of undertook far in complete equipment will the and few to by expect downtime risk systems protection years clients. impact reduce and improving facilities benefits fires. investments client and a be and will reducing upgraded the

we’re to in plant. continue operating investing contract the and risks we’ll maintaining portfolio that our ensure in the to and plant adequately Third, that right these contracts and compensate inherent us plants view our costs for

operations we we’re will discontinue at facilities we and receiving for forward, certain return not As a reasonable move efforts if expertise. our

also of our facilities prioritize are the our our in shareholders. providing We are investment focus to us These highest those efforts. which the to more return plant will where shareholders expect plants

time. prices disposal current of period Harrisburg Management the to contract facilities one Covanta in waste with another Please waste up an the over Earlier waste during strong represent that both markets, start sustainable facility markets into solution service that facility slide Valley detail get to those XXXX shorter customers prices active tip progressive I’ll at represented to waste of Now, we extended County and industry The and Waste a first with Solid expect our recently, as and for years. turn of our with an a half both the contracts Lancaster year Delaware integrated on values More largest of fee fundamentals. those we partner. further the in entered XX term is energy the we Authority, of a the operations. the firm respective I’ll extended business. contract owner waste highly operating for waste plant. year, waste into contracts cases, Lancaster and SECONN as a four. converted we both In management the the from approach plants, negotiations, authority and

And the pleased the We at leadership many Warner to retiring this for recognize are relationship while long-term CEO, very of like authority continue with them. we’d their the is to year, with end passionate Jim expirations except years contract for any sustainable him our at we’ll solutions. advocacy and waste March. for his role early Unlike large Hennepin operator exit not see in thank where the will XXXX, XXXX our as

profiled X.X% of During including from The drive and are increased were most we strong at our same price million to growth waste. X.X%. markets uncontracted and volumes pricing contracted we’re facilities. inflation escalators increased the in or on is growth overall fee X.X% highly tip running improvements Recall, and rollovers contract pricing, in XXXX, coming about of spot And strong store waste price waste. $XX able

increasing same-store Volumes trends support waste favorable waste we expect We pricing on price the And market strong. by with to around growth. into industry further able X%. logistics, to are to growing continue transportation pressure with expect generally be XXXX

strong better investors, while and of or than in the the for slightly waste, XXX,XXX the Dublin weakening to of revenue. committed processed we’ve expected, was nearly operated of throughput, volumes net the tip plants million, representing X.X% fee pricing. at Full-year with our majority the dollar, and Fairfax of given the better impact. As quarter entirety This fourth generating tons same-store million $XX $XX declined

X over of tons full-year Looking improved outlook, full-year million a and volumes, expect see in to Fairfax at XXXX Dublin. given our we

improving our on growth a As back and With digits in through we downtime in due double growth slowed at waste XXXX, fleet, utilization internalized to Fairfax’s profile expect XXXX. we profile primarily waste QX in internalized other to of of plants Fairfax. see discussed the re-acceleration the call, recovery to

waste growth saw I the utilization continued sales grow effective full-year XX%, benefit service as the effort. revenue mentioned, Solutions higher business of site drove facilities processing to Covanta we growth and of through also organic Environmental its With business. majority the As of

that XXXX. completed in we bolt-on or to business. These closed continued service In and meet to better in represent acquisitions our early us customers’ in XXXX growth needs. regional expansions a recently either XXXX, this acquisitions organic As line reminder, three see expect enable we another

energy. move to Please turn five. let’s on slide Now, to

For slipped come primarily to expect $XX reduced back due XXXX. year, Fairfax, course, the we energy in to same-store million, revenue at which, of generation

was positive pricing X% in the side, only On XXXX. down

winter, December the natural cold strong short prices to a bottomed gas January, were in term, power prices. in As With have which and start prices supported to appear out. power

any forward prices. While volatility. with commodity goal This million us, managing in our of XXXX welcome, megawatt we’ve is of near-term in price certainly and only entered we improvement exposure strategy opened. our improvement disciplined hedging remain given level not this we hours seen We material typical for X.X

experienced to XXXX year. moving the To-date, price anticipate legacy XXXX. an through $XX This is of average megawatt in revenue continue already energy million that Toward hedged XXXX several Our power as for offset of we’ve X that we few headwinds. share and slightly contracts partially hedge at below million we totaled for hedging XXXX is by market hours facilities. increased a move

We much expect of net around a million of XXXX increased smaller net capacity. headwinds, to of impact have $X

As very is no This we portfolio long-dated is major until our the change remaining several expirations from have mid-XXXX. challenges over contract with faced a look we forward, material last years. the

questions investors frequently to energy Lastly, a efforts. strategy, of our receive from take since some I’d highlight like moment long-term our about to we

sales, our solutions markets at several improve prices. seek retail in been of key users part our energy collaborating contract energy and To And of our at both identifying reducing a with we on waste each to up energy commercial options on improved While level make address for bucketed sales. supporting gamut low by business. the energy this, is structures, are and majority initiated the of retail wholesale the revenue, we’ve have participating These renewable to profitability plants, energy programs, years, and while investigating direct volatility. wholesale of

hear locations We our update their these to As topics specific any initiatives more about the energy also don’t we today, are optimize look near in but demand, of advantages a the longer at use early of stages these progress. we on opportunities, our have of as the think items term to looking facilities, these sites. technology on of value given

-- to Please business. move the metals on on to Let’s turn slide metals six.

recovery lower energy Sales our with Notably, plant the optimize in year, lower continue For hit plant revenue volumes from driven HMS source even by primarily increased were for at a as realized we Same-store by available Recovery by metals downtime, bit equipment were to as nine XX% the improving growth, positive records year-over-year of to our plants lower increase and XX%, sale. ferrous to plant. pricing were recovery more a the index leading waste product flat separation processed driven in throughput. ferrous despite material, of XXXX. year-over-year. roughly strong prices

recovery getting than plant X prices in expect we HMS were throughput which $XXX for all in sales our Looking at index the ton averaging in of expected per greater likely improvement per into the ferrous with XXXX, is year greater $XXX to will Market elevated ton. with result Fairfax, ferrous also full-year an remained expectations an volumes. average this recovery, better some ton. strength We In January believe $XXX $XXX prices and seasonal and have price the XXXX, is per of of HMS for range. February number

could benefit from domestic to We’re from demand placed that aluminum also Tariffs the tariffs to Commerce’s countries. potential improve closely products. type and further and imported pricing ferrous and and Section be certain Secretary impact XXX our this prices non-ferrous watching steel the of steel likely on aluminum for of would recommendation

exact the dependent is ultimately highly implemented. us are how impact on to recommendations However, these

non-ferrous the year. we even we same-store as by the non-ferrous monetize copper like to more pricing million quarter. $XX cleaning some fully sold higher that the by downtime. the are our improved and offset on this like recovery metals plant separating Through we fractions fractions by with more improved and to saw value Non-ferrous precious from process, second value late beginning lower allowing facility, the previously revenue year in the bundled for us the were benefit aluminum. and side, non-ferrous processing non-ferrous, and deploy or Realized the this than continue XX% X% recovery increased XX% On as equipment,

For expect non-ferrous our of and volumes than around versus plant around our given investments XXXX, to processed and recovered year-over-year, is XX%, both recovery sales months Currently, non-ferrous improved we and ago. in volumes less grow systems recovered throughput. two XX% company-wide

higher expected realized pricing. from of we We a are move complete to facility. expect internalization lead These average to full-year factors as to at and step-up this the processing percentage even in two operations another benefit full-year

you as which pricing our system. expect ash than operating I pricing, of we began compared to interested the double in are was We processing of total non-ferrous more XXXX equipment. before status many to processing the know

move Simultaneously, other regional receive Pennsylvania XXXX. the We operations we and we’ve the commencing economics, with will permit year in unit expect we’re for with proven other positioned this forward Once to technology to first in locations. out looking these units. the develop to be

Please handful took of energy forecasted expected costs on so maintenance and Let’s XXXX’s impacted XXXX, now both to waste would XXXX, the than million was expensing a CapEx maintenance in to turn spend, also which XXXX into last $XXX including Total from move spend to opportunity greater were I expenses. that lessened. at mentioned activity operating slide $XXX plants. from million seven. for versus And the Maintenance year, downtime XXXX. be accelerate we higher maintenance by

maintenance a full-year would the it maintenance During is year actions precisely and to higher. believe approach bit the maintenance noted difficult proactive of operations. ended actions as that asset our We likely I high-end XXXX third profitable recognized, flexible and taken better noted, is optimal to quarter, and range. we estimate for utilization we view toward that position activities discretionary key based a be on beyond. the us ensuring these not And we in and we the but do activity, XXXX We the

Environmental of plant quarter in processing and relative tilted to $XXX inflation. to in XXXX portfolio the million, It X% I’d of basis, with Covanta our said, the inflation. non-ferrous to operating CapEx as is increased -- other $XXX the rate compared our facility, in start-up adjusted expenses range. Dublin. XXXX below XXXX, plant expense. discussed or platform, Our even a when in operations note range total within like Other the from to line waste the for one XXXX, potentially below or driven of is three-year which by X% Solutions increased towards growth opposed is XXXX costs to energy the million expenses On also more operating same-store that previously only maintenance for for maintenance outlook is That results

in recoveries million $XX settlements, EBITDA. insurance Lastly, XXXX, both benefited other adjusted million and in expenses which of positively $XX in included operating client

Fairfax of recoveries to interruption XXXX. receive related in another $XX event We expect the million business to

hand of to activities to update the you time I components development on call turn a Please our I the to long-term Before take Brad, our X. and to few want off revisit outlook. slide

of Rookery, Dublin XX% collaboratively GIG own as XXth. to with most of and closed the you the it. initial advanced same second move which has we’re and closes, the First, operate We Site on saw, February financing the of time, on we permit most projects its we to January these Dublin project project continue the by on working The begun after projects. received into XXth. project this GIG to on occur now is construction work investment future At quarter. into expect in which expect and environmental we full

we’ve on the the about excited the We’re is progress Rookery. pipeline. largest of in projects the It made

expect to given We our largest investment Covanta, the share. XX% represent by it

continued across coming and Rookery, Beyond to hit key milestones quarters I forward progress hit pipeline in we and move look announcing projects the as GIG the forward.

expect had reminder, a million for we’ve witness to to million contribute expect flow relative in free stability, the $XX In which period $XXX cash next partnership we years. reached the our to invest in $XX As years many million projects the existing of we fleet, million not to over these contract to Covanta. several and $XXX

decade. material expirations energy next legacy Following until contract have XXXX, no mid we

year, free updates these contracts have goal I point, expectations. believe think mid maintenance double fee next it’s decade. by headwind. facilities and them an discuss while own and not of will are appropriate cash three-year we that that Covanta’s a material be they on this we service to flow waste a provide provided we at also Last do any we addition, a At to few XXXX, In end initiative in

million, maintenance Our will inflation annual normal this find costs. add adjustment range, is to our most improve range profitable our flow spend our opportunities and at Further, effectively facilities. for review and representing updated relative $XXX cash we to fleet $XXX prioritize contractual we our value a relationships three-year proactive to energy-from-waste maintenance Within will to million range. plans, previous ownership reduce

translates target UK in decade. free next mid transaction, towards meaningful cash to see the contributor of of by the a free of doubling goal flow, specific a a as we our GIG discussed million announcement As which the pipeline flow long-term of $XXX cash

the promising we and favorable I’ll organic development the very XXXX our northeast in outlook to waste contribution With addition timeframe. pipeline, In market to meaningful growth for Brad to discuss UK more and over the XXXX turn over initiatives in dynamics results expect disposal from the long-term call this detail. that, the

Brad Helgeson

Thanks, morning, Steve. everyone. Good

into transparency Before to where a the financials. few we’ve represent numbers, I briefly better I the get of and the want disclosures our business highlight improve our to areas enhanced

that fee revenues ton to First, you’ll disclosure we at where notice per is revenue paid out tip fee Tip revenue and expanded waste a generated and basis. of on service break EfW merchant our service we’re revenues. plants fee

and stream performance some is of generally have volume where represent our So, lens this fees waste inflation volume-dependent with variability, market regardless based annual revenue is and impact. on revenue [ph] initiatives Service waste monthly price escalators. pricing fixed profiled incentives clear a a and

model revenue. be should We an you useful average tip now analyze fee provide revenue waste guidance specifically business. our EfW than This per revenues all more also for information rather and ton for as

useful expenditures this forecast cash provide contributions the guidance to items forward. and line our better facilities. type you owned of free a joint cash from our disclosure Second, to XXXX walk non-GAAP will reconciliation web from our deck, our adjusted We with flow EBITDA we’re EBITDA the some in enable section going ranges believe which including flow, providing capital business and at venture client adjusted GIG for

existing guidance metric. Lastly, to flow providing we’re capital working our before cash now flow explicitly free addition cash to in free

into an capital as be we looking negatively cash our our But color efficiency at working we a capital volatility an of our this area is positively XXXX of improvements and focus. underlying, add capital will before can only As period, significant I’ll both year. Working as to XXXX, performance. in saw working of business part important get couple additional flow minutes, long-run given in generation in cash it expect provides and on and

billion of XXXX review Total $XX Now, XXXX. performance I’ll begin over was up slide on XXXX, my in million financial with revenue our revenue $X.XX XX.

and pricing, million of ferrous net our million positive primarily Recycled top-line prices. increased in revenue commodity the Before a more as a for $XX small waste slightly activities offsetting metal grew prices, the was non-ferrous further at downtime with while environmental energy revenue, material, growth performance benefit increased Fairfax. power offset facility organically $XX strong services improved than lower capacity prices, construction processing provided

During category. was the primary at the quarter, fourth driver in of of million year-over-year which $XX transactions the growth we generated revenue Dublin

several As under XXXX, anticipated, pricing a million contract the headwind $XX transitions net higher as service more agreements new energy long-term waste in power legacy of and and represented improved exploration than sharing offset arrangements.

XXXX, coming same-store to was on full-year for Adjusted adjusted than organic year. in million Moving EBITDA the $XXX EBITDA XXXX. On below an lower was just XX. basis, in last million $XX slide

year. performance the Commodity to Fairfax hit commodity to meaningful performance of initial quarter Fairfax. we at adjusted prices, represented in a issues. impacted on double third effectively to year-over-year headwind EBITDA accept as was business X% Fairfax a target by our we only a organic other relative facilities, shortfall our Before had and relative contributor reach the growth XXXX, X% anticipated We significantly as downtime described, our at noted maintenance prices biggest expectations Clearly, these had previously the XXXX. were not but discussed, which earnings an operating recoveries investments for impact the estimated million a XXXX business in waste $XX impact net million XXXX had to of profiled was down over XXXX. insurance Fairfax was on sharing limited The rate the delay year-over-year of that in $XX the downtime time the for of expectations benefitted the category. relative initial made not alone added quarter EBITDA, we energy the interruption fourth transactions viewed The adjusted also I’ll into results in primary as project improved a the This operations in for impact to the our in not which quarter. costs. $XX the revenue, be partially that and Steve growth of about to this in did million business. call as downtime and run limited offset our Dublin results quarterly in contribution All-in, should other driver on XXXX, few note as collateral the significantly core including contractual

were the contracts transitions we year-over-year with net our contract improved of expiration and contract new Lastly, headwind on County as to impacts Hennepin settlement partially negative power dispute legacy of the contracts. terms when related waste the offset

cash a flow Turning Free XXXX to compared to the slide $XXX year. prior XX. in million $XXX in million was

In cash in $XX flow flow operations that of cash free the moved $XX Dublin quarter, fund two adjusted working expense year-over-year. has with Working the other Since benefitted XXXX, as $XX million increased at years. EBITDA cash in I EBITDA QX interest free working distributions. this capital CapEx, improved in changes capital, roughly facts down translate maintenance was projects by was cash the not Dublin into was million, in flat primarily project-restricted was Before $XX into adjusted words, million by decline in that flow over and driven did in Dublin would timing at million generated given cumulatively free by past still note held the year-end. cash XXXX. project now capital the

cumulative as we continue capital cash our expect which efficiently working normalization for manage as in of this outlook to will occur possible, benefit we flow year. to some our in XXXX, reflected this is While

compared slide our year. million turn result over Growth was to XXXX, growth in construction completion $XX the as Moving a largely of and XXXX facility lower of wind as please investments, down on spend to XX. to Dublin last

organic ahead, expect CES areas $XX processing facilities material to like As recovery systems in the and million in we of spend business. around non-ferrous of expansions growth capital look we

Not in list before capabilities spend of earlier existing also potential At moving further several Rookery complements our a made our Canada. to in small We investments our and top included year forward. XXXX CES that project. this achieve current need milestones the that expands that forecast, acquisition

close the towards the second that project reach we With now provide of our hand, the expected and investment. we’ll on working we’re environmental the point, in equity timing more financial detail permit and quarter. amount financing in Once

Overall, the later we permit year the state Similarly, our expect financial next amount key the and facility, For this first of timing and benefits from ash that the next year which are we of year. when we the of this we’ll from commence system At and to the expected is these receipt ready receive announce to to value. point, step the time notice Pennsylvania, well. grow point, processing the that have investment is beyond. and our increasing construction, expect that spend station believe several we’ll company risk-adjusted opportunities at best growth capitalizing for to we shareholder XXXX on the expectations returns capital in that transfer and to proceed attractive as the marine our opportunities Manhattan update we for for invest at very

objectives XX, as XX slide balance on segue, also the be balance where and over to sheet time, opportunities. flow fourth strategic December we’re under improvement accretive these prioritizing resources our capital as was of and meaningful sheet a turn that With driven well disciplined quarter. cash in removal compared the in million liabilities primarily XXXX, at billion, debt, project by the year-end, on for down This the as highly net September will However, focusing XXth. continue Dublin I’ll when $XXX $X.X balancing to to strong approach, most discuss debt our reclassified balance held please was sale was sheet. so At to which

I’ll times fourth also in EBITDA the ratio was times versus X.X X.X leverage adjusted adjusted project to the debt Dublin excluding end quarter. XXXX net calculated at consolidated the excluding the from ratio was that but contribution Our note September debt this EBITDA Dublin of at XX.

senior ratio Going December consolidated. times. from leverage not covenant contribution credit secured the project, we’ll this to debt including EBITDA not at of our the versus received, the joint ratio with GIG, the of leverage project only calculate extent XX limit The as venture of times forward, under was X.X the proportional will dividends X be facility actually cash

a As billion notes. company the covenant holding $X.X the reminder, excludes of unsecured

we forward, repatriated improve reduce the venture meaningfully US$XXX from investment repaid borrowings. year GIG’s both as times this all We As joint leverage outstanding already the into we ratio the X to to ratio look credit target covenant ratios nearly Dublin we and facility expect of and the million project, roughly times. proceeds to and below the X consolidated revolver

metrics will of this transaction be immediately benefits the our credit for So, QX. seen in

EBITDA. ranges, turn adjusted starting our Now, slide with guidance I’ll to XX. Please review XXXX

expect business $XX strong downtime of residual EBITDA balance growth organic of general, improvement in X% waste XXXX. $XXX of $XX we Fairfax generate to The Of represents the in non-ferrous full including The a driven be profiled by and interruption insurance pricing $XX million will range. growth. million reacceleration growth growth, million growth environmental of continued year core of in relating will and recoveries, to waste the represent to of this over $XXX the core services. processing, million of alone at midpoint adjusted to the around expect which XXXX be to driver in $XX the improvement, largest We million million, organic

which X% stated growth, out issues expect be XXXX. we of in see, we to As the you meaningfully will organic can above balance annual to encountered our target X%

prices a levels to below contracted prices is expect variability to in XXXX, modest in Spot subject look the some our commodity we floors. XXXX higher and but modest hedges that expect be portfolio to We caps headwind. our in between be reduction bit portion a a and of are prices energy

flat prices roughly expect both XXXX. we relative metals, to ferrous and non-ferrous market for For

following from will million fee expected that the For EBITDA total transaction the XX% pay company. plant, the includes of of additional to full consolidated Dublin GIG service operations, $XX drive adjusted contribution and the and revenue components, year-over-year. year proportional project the is two we’ll the of expense, share to Dublin EBITDA operate adjusted around Recall include the which of our

in EBITDA million project the calendar in XXXX. contract slide venture the for can this to the see after reconciliation EBITDA closing As million on proportional in company adjusted XXXX presentation, $XX $XX from be the XX on expect of reflected Dublin we our February joint million to the dispute. you Adjusted of period in settlement non-GAAP $XX the

reflected Babylon that we represents contract also a service specifically Island. the revenue negative plant last bridge roll-off is service Long transition. the plant Waste client debt material of this on in service a include variance service at and year-over-year contract own, a that that So, as transitions

the headwind power a $X have of a New we side, expiration million remaining XXXX. On in England from power contract the in

this, no mid-XXXXs. have we more power after discussed, contract expiring the Steve meaningful legacy until As

maintenance As in results, we we the the tilt, take to relates operations of That I’ll our XXXX slide our first Dublin portion second plant cadence first flow have second of the expect quarters. improvement and quarter to it XXXX we guidance as of expect our first show and larger said, a at the activity given to half XX. on XXXX, significant adjusted my to with remarks the Fairfax. relative free cash in of year-over-year quarter typical EBITDA prepared conclude

$XX not accounting all proportional in million which Dublin as EBITDA. initiating contribution free XXXX, but free of cash to not primarily the distributions, be that compares will the on from after deconsolidation $XXX This cash translate project $XXX by will to million improvement increase will guidance We’re in driven adjusted flow XXXX. our of working equal before at improved into million flow cash share capital EBITDA cash

to restricted addition, be million. structure flow to adjusted project $XX cash XXXX, GIG project held cash now by $XX EBITDA, flow free closer generated to year. Overall, million was but to financing the contribution under cash will to the In free the flow in this in contribute million will Dublin cash will transaction Dublin prior the $XX while flow closing

should As previously that rate million to into $XX we that million normalize run announced. move XXXX, the annual of to we $XX

facilities our we of maintenance including discussed, at expenditures type CapEx when expect capital million Steve be impact this client-owned the minus. or $XX year, to plus As about higher

$XX as lower You’ll flow cash see that and some to year-over-year of completing to restricted items material the XXXX labeled a positive EBITDA from a balances between just in This consists as adjusted Nothing million build essentially in cash the flow. standpoint; ‘Other’. note XXXX Dublin numbers. comparatively at bridge we business as delta show align to other well cash related versus differences

to the our short-term to cash be flow a is modestly $XXX million. working cash to of free significant working on I’d XX two past amount earlier, in guiding to dividend XXXX, portion over phenomenon. range As outflow remiss from of cash I not for the working years. of anticipated an capital $XX below that our a XX of XXXX This flow a we’ve benefits of recognize capital free guidance we generated mentioned before expected current Based reversal million is annual capital the we’re payout.

and made over cost on funding meaningful next shareholder towards over we where near-term trajectory transaction, cash free is flow. we that come the a When to focus immediate years. is long-term flow create of timeframe long through Company’s the at we value. GIG our reported business the knew XXXX, for term it’s doubling this this the some expect cash to free is This several decision the international development would generate While

had year next about we Covanta, capital venture for plan To the sheet to improvement not than attractive This up balance multiple again, years. more we our two believe ourselves the a liquidity about However, over the coincident joint for XX the policy. the have next or it’s with was recycling no dividend in invested once very near-term. reiterate this and adjust our justified setting

and the near-term and strategy nature trajectory our of not dividend one long-term our clear. on business, is based our decision when with policy results a long-term commitment, As is

With up generation like focused In to open remain we’d will our payout. and to very confident attractive long-term that and these on our to intend sustainable assets, we execution dividend business operator, where near-term cash opportunities. to plan the flow meantime, highly our the growing to call eventually and cultivate resume questions. We’re in grow we we continuing

Operator

Please Tyler state line [Operator Instructions] Brown. Your your is question company, first open. your from comes

Tyler Brown

Brad. Hey,

flow, that want on free understand So, cash make it. just I to sure I

expecting, it the are associated correct? million midpoint, cash that that call you So, XX. XX Is EBITDA but is EBITDA with about only in to from Dublin $XX of the

Brad Helgeson

project, is the defined, have the flow, metric cash That’s as of we received. deconsolidation, cash Post the reported actual the correct. free our for accounting purposes dividends Yes. essentially just to equal

Tyler Brown

Okay, right.

time on? So, will as narrow gap goes that

Brad Helgeson

and has will, basis, end on the annualized a upper is the in XX, actually, distribution dates It annual timing an The as basis bit range just probably out mentioned, way that towards a I XX laid exiting probably expect reason to on the be the do by an to are basis that XXXX. of normalized it to on we yes. of depressed, project It’s, with XXXX the little financing in arrangements.

this the So, what long-term, about. we But, is it’s nuance of already impacting a talked run a timing bit rate year.

Tyler Brown

think, before, you how model. CPI explain can I the this but I’ve Okay. And then, asked you through runs

So the Steve, up two. X.X% I mentioned obviously you but is think that above escalator CPI was trending

or work? how difference it lag does So, a exactly is the

Steve Jones

of to. gamut a far with exceptions, regional contracts is lot escalators. There contracts a of that contracts as our or of local escalators yes, is One, nationally, two don’t trend we our time; lag. about is labor could reset our the be few runs can could on also CPI our basket a we the of at the But mid-year. there are contracts be the cost the adjust of reality real It be each could as most but Typically, based PPI, differences. escalators, CPI, really referred are generalize that

CPI direction, give national out, So, lag, you isn’t but bit escalator sense of a the you precise a it a a can I correlation. with pointed for think probably the type necessarily as

Tyler Brown

moves as should, theory, Okay. But guess, it forward. I maybe in it improve time should

Steve Jones

Absolutely, yes.

Tyler Brown

Okay.

Brad Helgeson

Yes.

see those as there environment, you’re some for the companies, more mechanisms of pricing think, inflationary going through supported. to benefit will be for contract that’s that’s an us out I a risk

Tyler Brown

Right.

then, And good. question. my maybe last Okay,

help appreciate versus cash, midpoint cap I the long in you range bridge guys $XXX out free XXX So, neutral. laying the but can working you me million

current growth of maybe takes in prices, are what organic basically metal prices, X, there? or some the electricity does So, and the Biffa that include X puts Rookery, Biffa are assuming you

Brad Helgeson

mean, drivers consistently. of expected terms actual million Yes. we announced announced company the of $XX is the that ones we cash main of to to Certainly we GIG in UK meaningful when contribution, pipeline, the the out. talk built be that pretty flow, we expect distributions parent ultimately, the the a cash we I are When about $XX million contributor. transaction, pipeline

think that time of this big that’s over we our over to across waste of especially disposal the are very, profiled other ash So markets, we decade, very next that’s initiatives driver. dynamics metals, that in England kind the as across be moved organic going growth New and into in period the certainly waste, the are a particularly supportive. all Really driver; processing, timeframe, initiatives

Steve Jones

bit that little add to Tyler. that, me to a Let

UK of in Brad bunch few a chunks think come waste got facilities; activities development But, expand of of So, double right? there’s growth, mentioned improvement, a Pennsylvania. right? levers waste system we in I continuous non-ferrous I we meantime, So, grow large if of the metal flow on you of free series cash our on that large stream about in a those, come the going profiled mentioned expect projects when think operations said that business, increased more tip fee you’ve the profiled to volumes, it, we’re them, and the stream, digits; base and to how even our stable

continue transfer the in free strong then briefly. business York The of start projects a particularly New and where service mentioned been now flow add to marine these waste come environmental Northeast when City system, station and have of strong. That big cash on markets, first will tap some delivering has Brad great Our very between kind initiatives the as footprint, energy that mentioned, up, we on. I

pull, a value levers So sense give go can $XXX towards all we that cash will the will the of of and flow. free that that million

set column if core column, look at you see above a organic mean, to the give all what slide that was represents our X% at target this might growth If business well you look sense it you growth. take new to and you’ll out. that a XX, XX, slide And X% just is note

it us through we to all on you go of playing flow base -- said as see base of I the P&L. to -- business. come to these when and kind on think UK out. it as to I of then, series I starting see larger as kind That’s So, pull cash how here, stream, you’re can or projects hit And that XXXX free will the at levers cylinders these delivered be a bigger our going amounts of relates chunks

Brad Helgeson

to that because a clarify if we target any help or expect which we the of count over part grow would be for this period to expect we timeframe, the energy contract on it certainly prices. I’ll had our out it. but time last decade. generally. your headwind would And, Tyler, not that I Obviously, improvement in question. We big fact we is have point ability year-over-year-over-year that stiff you are don’t point transition in in also we’ve move get one lot we going assume going just on included topic if don’t prices, the A commodity to or don’t But, don’t this in get a we over that

So, that’s going be... to

Steve Jones

we Yes. sit now. We about where right pretty good feel

Tyler Brown

And tax maybe last one. cash assumption it, last mid-XXs in one, Okay. then, that, the is What timeframe? call the truly

Brad Helgeson

into our federal that obviously cash it’s point this at long to So, liabilities, a But, our tax way actually be shielding at away. expect least we timeframe. NOL

continue be have to has for while. have we and those do closer shield on to a a But, certainly to it of yes, to life bit so little So, better continued the exact NOL. the visibility will

Operator

question Please comes your state Michael next Your company. from Hoffman.

line is open. Your

Michael Hoffman

point. Hi, Thank a and starting Brad to you, Steve, could just for questions. it’s the question taking I Dan getting If circle Stifel. back Tyler’s to

should right waterfall is I XX, then XXX? the with whatever the am add slide, to way XXX, that it’s looking think your am the at get start I XXX, So, to I a if with in the adding out

Steve Jones

right. the ballpark That’s Yes. That’s in there.

Michael Hoffman

Okay.

net to math. simple So, UK, you as XX organic a XX projects, way another right is That’s then, is the think just that XX to your growth. leaves about

Steve Jones

correct. That’s Yes.

Michael Hoffman

a of desegregation focus And Okay. end get of I one just big the leverage point in I’d we to you’re let’s waste on -- the like the on regards it. the business, then, -- model, so company with how

the tip tip fee, So, talk will, spot if about fee. this trend, you in

today the it where going it’s that’s your you million is Where -- a on fee the XX spot basis? that? gross, Where expect $XX what relative do and role those? where of incremental do today $XX, sort thoughts market a that in think of the are And tip of from in context ton what’s you

Steve Jones

that that strong, listen if Waste to the Michael, saying because which in know point make Waste same waste the do continue about on I have frankly, is I you you last which and was markets, down. the or year of they the markets much the as New thing. you are before. waste trying Well, to we talked been has England profiled was play quite didn’t Fairfax waste to I strong, markets especially Connections, Management Pricing Also profiled in be

And Our few merchant I plants to and transfer think stations that calls we are a about ago. talked profitable, full, continue be pushing we spot prices.

pointed see active headed So, where reluctant where repricing upside contracts, we directionally, these little remaining I give we so are north I you I we as think expiring tightening again are or we do in go. in running from of But, around to the particularly northeast am opportunities. are is to that think that and really pricing going writings so. out you the in I I think is is five think next Massachusetts years landfills where of market that up market And your out earlier today.

So, it’s tight up getting pretty there.

Michael Hoffman

Okay.

it government of deem renewable? committee, this be their in it are and implications but succeed would to it’s being and full Do off trying as seen, for this gets legislature that remains pull The they So, passed I XXXX. the that if linked renewables gets so and goal passed, is renewables actually pass energy and to they not If doing no XXX% implication? happens the they also trying. that the it they but What’s waste coming is to be on fall, is sure what’s Massachusetts am a by Covanta? pipeline the a bill out XXX% by

Steve Jones

because power from been going government I see work from in advantages. lobbying fit production on out And the the about will where the they and they do. up closing be are pressure talk landfills their go some there pricing. think, future, And you’re of to I quite the doing -- energy Yes, frankly, to standpoint up. how they’re also running want -- both into does we’ve some to upward power waste mean, to there

Michael Hoffman

Okay.

-- don’t is a net if this a negative? not you So, positive, it’s this happens,

Steve Jones

That’s correct.

Michael Hoffman

the you pricing, regards at that volume of and look And between are with does volume then, asking does I metals you opportunity? think as opportunity, in And look today, that recovered but in go to you just not that a what view non-ferrous? -- where to where do can years predict opportunity, like that where in am five sort recovered five-year if number ferrous

Brad Helgeson

additional remaining a putting specific to a I’d ferrous, material. recovering for there say, isn’t it. We’re significant directionally, number probably not opportunity

Steve Jones

of Yes. grow like percent will at kind so. GDP of couple or That

Brad Helgeson

the volumes in metals line, thousands terms in the equally priced of precious talking you’re about you we case including of all robust but at systems sort of Non-ferrous, we’re and more better, stream. at of at basically the still point. have huge the additional doing all very, ash into probably Because processing more a materials there facilities and collection that you’re course that of we take better Yes. talking metal ash then processing but about the basically very is optimizing tons, this rather, the and of have move we’re the and of and recovery ash get then, down and the I to say further the lot system, continuing as of also Hills step. opportunity that’s as then process But to high the first at more saw not to stream total plants; they first probably out total of waste steps system. Fairless once we as start would

I the over topping was probably out. see close I growth to that non-ferrous is meaningful some think next Ferrous non-answer. still you elaborated few So, But, in guess, an can years.

Steve Jones

we up Last non-ferrous in is you’re And it and ferrous the way the in came on think, pricing. the in Pennsylvania went probably of see year’s innings game, I of kind again it way to baseball back, you with as kind is system see up innings going middle pricing, mentioned a quite frankly. go non-ferrous while the stream, late of ‘XX.

Michael Hoffman

Okay.

that think had Is a that potentially still non-ferrous So, clear. you to my could potential? double but that to in follow-on actually the just timeframe? be five-year Do you

Brad Helgeson

recovered. volume of terms in not No,

Michael Hoffman

on Okay. [ph] the because the of rose? how to much was opposed processing the underlying commodity price, due as to of your then, absolute All the price improvements right. price And

Brad Helgeson

On non-ferrous, underlying flat. actually basically the commodity is price

Steve Jones

Yes, processing.

Michael Hoffman

clear, point to off is all it from because Okay. the the sheet? Brad, just on And sitting GIG, draw that balance this important. cash think wanted it’s just I so you received have lastly, I already paid you’ve then, or I that actually

Brad Helgeson

that off already. paid We

Operator

from Your next from comes Kaye Oppenheimer. question Noah

Your open. line is

Noah Kaye

Steve. Hi, Thanks.

maybe to you You for plants. And of other detail mentioned what that before the the already your in performance tip going from you’ve plants, you’re Can just be at fee replicating initiative? might be got us same what operating your percentage operation? savings total then plants

Steve Jones

Yes.

look -- kind a few I’ve So, it. our it said at and and different you of ways said Brad in if

We’re plants, right. to fee on focus really our starting top tip

shareholder on. So, plants standpoint, a to really focus certain for want you from us

say say, About I’d range. it’s And so, -- half started operations. stable we plants. in those It’s that let’s XX of plants

about talk they’ll plants me -- activity. So, lot of operations plant when go do to and a I visits, I stable the to their I

So, -- when plant. half We one undertaking the maybe or drivers better. they’re about operate plants. stable factors XX Sigma Belt. allow to Each of the to full on do Lean has plants, operations expand plant And of to Six that those Black plant Black stable that want depends on the different Belt, operations, with you it of parameters you set that

years put those XX, part even to looking move in think into can year as to as going through then XXXX, see go But, number can you continue can process. be couple about of keep It’s that at time, things where to getting on slide We catch up don’t CI for we’re organic into ultimately you I that strong which is X% want but X% hit as a that X% going we across I back CI that organic up we on because specific a all to further general moving net -- category flows didn’t referred to to that target. $XX the each that, I we’re is told year. growth growth, savings ago, we feed think, a up. to are net and X%, that I folks I a that going that. why over were XXXX, -- is to because million

Noah Kaye

clarify, that And is just $XX is a million an improvement one-time annual to that or opportunity?

Steve Jones

year, every first start then, $XX in the goal another start the the we over So, set was goal. we CI, what from year -- zero, do million. year, again. set you could But I’ve year, you again, mentioned, we In every first

again CI target. challenging of for as that if don’t years but gone You it you credit we And target get the you’re million. we’ve north team, for can every over couple has the here, which in them, moved year imagine, $XX last reset that the makes

Noah Kaye

Yes. you first for opportunity I taking of past the in indicate that about capacity reuse to plant us, mean, cost out the ash $XXX there. could item, the of out taking handle? just line as talked what able percentage Can million some of you be of kind facility $XX your maybe million to beneficial

Steve Jones

XX%. About

plants cover so so need probably client fleet operate. tax the cover to these five where that or and we plants all we fleet, of -- -- just So, the we of our including operate, these

Noah Kaye

it that completely I cost -- knocking is that how… once And or up, that mean, does out they’re item is substantially lower?

Steve Jones

substantially lowers It it.

when XX%. think, you by the we mentioned When ash, I’ve it of trails XX% a this. actually to run take before you reduce you it on I bunch --

you with do improvement, yes, are be something needs of. XX% to figure XX% down probably guys me, we’ll that have you can that still folks that. continuous now, have that -- But, we of. And we’ll out further. through me, ash residual if that to residual whittle still a But, see to if is be see you to still the we’ll assumption So, able dispose are can about my you telling disposed need here we -- telling

Noah Kaye

a And the mean, rates kind around think me. now spreads of are sort to budget and announcements of in, I solid actually to coming mean, European base Dublin maybe got up for we as Okay. I but point come you’ve about financing, one projects. last that operating

they to So, just rates you kind do to what comparable generally Dublin, should rise rates for of base or the for debt be overcome? see too the room improvement expecting you fairly kind are you in can talk around much of Rookery,

Brad Helgeson

two, U.S. base Eurozone been I has I rates financing of obviously you think into and euro Rookery in be rates expect project certainly sterling; UK. rise they to as number Dublin was in acute course one more and the operations whereas to Dublin construction. should is into is reasons. think One, So, heading a were quite the in couple for for going it’s the which versus than of been be as the refinancing, the attractive has don’t next be would -- up,

analysis Dublin XX is X%. So, project goes Dublin years And there’s financing the get back, a credit the into of project let’s different that. financing, that

that. on to we’re financing at for looking bit by So, pretty But, farther we we to bar the that in a financing low any historical the that’s together very project, for look that for a predict, hard attractive. to beyond the any I to project us expect get comparison, much Rookery pulling down But future. think, project financing expect

Steve Jones

other add One color. just to thing little a too,

pretty give bank have Rookery I a the sense. to together strong people We a want project. group for

We going around to run. are the period appeal waiting not to sticking for

We are there. out already dirt moving

We have a already group got a bank quarters group. good have three the credit bank Actually of approval. received

to move are up process. lined through this So, and going go be we review to digital ready as we

Operator

question Baird. from comes from next Kallo Ben Your

Your is open. line

Ben Kallo

between about flow. laid of cash guys you there? should think? guidance. I getting cash $XXX think am But, just we we XXXX want out are in this flow. factor know, there on I you question electricity we to a get headwinds million to the case don’t today to as trying have and I are know, give And strategy I where that

Steve Jones

I I really think so, don’t. don’t

low on bouncing the I think, we gas, the curve of power end natural still of is for kind which are around example, prices. driving

So, are waste And power shape to perspective. on I upward here think we from I see like markets; in think pricing. reasonably good said, you pressure are I going more

early Metals up doing If the did Bush could Commerce have the go Ross end something that President us. an Section would ferrous be on for through is day, I on you I interesting are back impact both in will -- XXX, it done that this XXXXs metals. Section of as back the some big pricing. non-ferrous the other in us, research positive if impact, and be we and XXX, So, year. Secretary believe think good under Bush something a did impact, and it some on had upward Trump

Brad Helgeson

in line. course XXXX to think when item already expectation think Manhattan you going of station the that be transfer model Another the is about I that you is probably on coming have the

Ben Kallo

in U.S. plans And do with are this premature about a but the there might the Dublin, thinking be transaction any type you that just transaction with? there could too, similar

Steve Jones

group put that Investment in the was for one transaction kind when we this a the isn’t transaction, Group Yes. And said, -- that oblique replicatable the Green with of slides we Group. the out things Investment what announced -- we of it Green the

where we’re forces, the sat them talking already, other And so, actually down geographies. about combine what we I’ve else could and with

looking our and other more things extract fleet So, different value. at ways plant around to we’re

Ben Kallo

flow on capital? then, about I of And between kind should the that and mean, working going think cash just Brad, capital. the it. forward, difference housekeeping, Got we working finally, the how

Brad Helgeson

Yes.

a of case and as -- should really what it’s plus range to base about for if the really one well compared couple or essentially course It correction settle XX XXXX, plus-minus happening XXXX. beyond to through a but as in beyond. I as last going year, XX, neutral, that bit you XXXX assumption XX certainly get years. purposes a think, a you items think Once effectively to maybe or of fair assumption want a seeing should couple another we’ve of of is a year, down zero minus normalize modeling been discrete XX as it

Steve Jones

Yes.

too, I’ve of me lot Let little been capital say a a bit because about working driving this.

couple about catch it really I way. think, And our we’ve want last job years. the this over collect done a to working We think capital nice of faster. [ph] managing effectively,

ago calls longer. think, to I few want hold that mentioned I a it and to on we

that’s it have And you pay vendors. bit. mean, onto to be a pay so, I you where paid correct us employees; the you to little see and longer tricky, holding can have

to on it hold can’t You forever.

kind now we’ve job I I’ve capital the So, that had we’re balancing out. in we’ve been of mean that. pleased working improvements that with of process that a But, done nice by here.

Operator

from from Jeff Your next comes question Capital Markets. BMO Silber

open. Your line is

Jeff Silber

much. Thank you so

bit know, level talking free lot you’re I able last a what you Just want next is flow about and cover your puts up question, not dividend a will of there think a follow now? on to to year? get know, XXXX. little But, I you you’ll takes. Do that at know again. back up be cash

Steve Jones

a been around since like is talk Brad addressed out sent which about Well, let When we a I’d the the bit, results generate there to management to so the -- little last cost is funding at fair question we say that’s development, but Board this this some near-term knew, about. floating related made for flow. me the would GIG to and a business cash come decision transaction, international night,

times, all the view and know this attractive our improving liquidity. was at However, balance think and you cash an I XX our sheet that and recycling multiple we sold

more net reduction too that debt EBITDA in that adjusted gotten in lot with was from a to we’ve the offset and our EBITDA flow. metric. reducing Improvements areas high cash than that because of free those So, we a question got investors

So, one Dublin been sell you’ve that at we’ve free the we mentioned. flow Dublin, for Dublin, elected But I got half of cash to XXXX. benefits the impacting

it free put made today. also capital allows grow cash number this by on clear to recycling we’ve us We that that mid-XXXXs, substantially flow Dublin and a

set Board at term. is few sustained the over one a level now, be works and not cash could long Board, based with on a things, we It’s the year. we with set when cash on. So, management note think I talked flow. we’re realize about there. there And but is -- when on, they flow we’ll little come even in projects UK a get the But come million that the the dividend $XXX bit in more come the free before pull at levers that

flow $XXX before million in XXXX capital is cash free for million. guidance to working $XXX Our

ample I $XXX the occurred Dublin this the dividend. million that earlier, our in to sheet liquidity cash, have and to note was needs, balance so someone asked so which think, GIG and now it which enabled bridge more any we transaction sale than or hold. given short-term improved we the generated related -- sale, Also by Dublin

these Group we views Investor cash clear questions free dividend in on dividend policy during of questions, when I with our Sam think about got was the kind flow, call. think some up transaction. So, the pretty in And some associated Jeff, area his had come I Green of current initiated the call and he Investment

to We dividend. is be now. really So, clear we’re the longer the sustainable I wanted to that set committed right the dividend and over term

clears concern working maybe up before capital bit flow is cash associated of how little that so, a dividend. low the impact free And hope may with that XXXX on I and

Brad Helgeson

And Jeff, it’s Brad.

add certain to me in a answer your and I’ll up bit Let question that, sense. a

not guidance. out we’re giving So, XXXX

not I’m answer that as to going XXXX. So, regards to question directly,

heard recognize get about talked we period we quarter flow That dividend said, every it. payout, from have and even of time if XXXX, we about policy, markets, the passes questions. that stated same the it, the every below that with I to near-term about, message. it going the that, And on where to is December we’re clearly policy or and at you talked the time, a Steve XXXX. reiterate being trajectory to look how even if look forward get dividend our As And of dividend change commitment not small it’s public the in think we going Chairman XXXX terms we at a the we reiterate that phone decade just directly our how cash in we even

way that change lost it’s to us stop the to And getting that. not question; the so, it’s on

hope about. soon trajectory along focused possible where on. talking as we that keep that We as that’s So move to on it we’re and do

Steve Jones

that. fix and got will get we We’ve to that,

Jeff Silber

All right.

I that. appreciate think, clear. it you’ve made I do

be a accelerated guys a Just while. I I detriments depreciation, Are follow-ups. are you or maybe specifically couple about not hope tax other from benefits payer federally quick I won’t thinking repatriation? am of for cash any tax and again, On or reform, tax know there reform,

Brad Helgeson

Yes.

to -- tax of on really is life really the it, current the I foreseeable really for sheet the that us it for interest is big thinking about Obviously, how the federal while domestically, us. taxes Net-net, So, deduction, is around, us for that cash us. drivers, positive our you’re NOL. look at that for One code tax one a and limitation one balance impacts future. changes the the impacts there’re will right way no implication based on how the negative, which there’s

issue, Of benefit do we benefit do course, we timeframe. but that’s from a from over timing that bonus this obviously depreciation

XX% So, looking of on net-net, look million numbers change. our our planning, a be at point saw tax can think a -- you taxable corporate took we decade legislation that at a once when I’d about think the XX% balance today the where which of out impact beneficial. balance, impact deferred that the in income. and liabilities it revaluation a to P&L And modestly over we tax get related terms it’s you say tax the and Obviously, our provision at as would we with long we’re tax reduction rate. do payer, we paying year-end, rate rate negative in the timeframe, certainly we’re we through the the to of sheet benefit But, over $XXX our in

future. to think, repatriate more a to say earnings been be us, probably going for positive complicated lot will we to have straight our and than to are system potentially we see Though the going we advertised the would will I awful that. everything is been go think, I but -- lot navigate what net-net, it greater us be internationally, where That’s reaction impact because come area out we in perspective. from our advertised that’s was flexibility as as another legislation I territorial it's It it to could of has to think net-net, a was we case forward. that not

Jeff Silber

more one then, quick And one.

that? XXXX You did forward that the quantify you maintenance pushed accelerated spend into or of was XXXX, mentioned from some

Brad Helgeson

didn’t. we No,

Jeff Silber

that? do to possible it Is

Steve Jones

dollars. Yes, few it was million a

Operator

Sachs. question Your Lee Goldman from next from comes Brian

is Your line open.

Brian Lee

A couple of modeling questions from my end.

the reported I for was revenue EfW. in given any this guys know, But, I you Brad, wondering in on uptick clearly reconcile, math meaningful the there that. the Dublin pieces you as wasn’t for per able XQ, volumes there moving Just, quarter? in played is a pretty so other a role ton quantified, to if

Brad Helgeson

tip fees [indiscernible] biggest plant, one ton. a terms U.S. it’s those is Dublin coming dollar the one but just with just about in it’s Certainly, But, had factor. We plant. on Dublin are $XXX

year-over-year, drivers. of Fairfax pricing really is course, domestic are that comparing meaningful basis. didn’t quarter the on the also And the our median by And have average. portfolio, in Fairfax. average below terms it So, waste on fourth you facility two weighted if of in the is facility are -- a Those within the

Brian Lee

might a to organic fair Okay, adjusted referenced you’re the million? Fairfax going enough. then, Fairfax, a in speaking is what million And -- you million quantify of number $XX to slide missed of but $XX see number you ‘XX. you I as million Could embedded that in have I growth $XX this did know, Steve -- EBITDA XX times, referenced of $XX to

Brad Helgeson

$XX Yes, million. we about did. think, We it’s

Brian Lee

And last one for me.

mix constant think stay lesser we the ‘XX. three-year to you should is between CapEx, and XXXX? in we Is mentioned mix forward? a of revert Just about expense the of be know, out sort going or maintenance it expected there a does I EfW updated post higher But assuming years, mix back CapEx relatively as spend, split CapEx that outlook of here. on the that to

Brad Helgeson

speaking, gradual modeling relative CapEx to regular probably true. I split relative to our see expensed to fair modeling maintenance think, will a expense. continued relatively XXXX purposes, purposes, XXXX Over for But shift, the could holds it’s you guidance. just that in probably for you assume time, assume

Operator

Instructions] from Andrew [Operator Buscaglia question Your from next Credit comes Suisse.

Your line open. is

Andrew Buscaglia

long-term. Could talking facilities ones, into contribute as your profitable to some that the adding one about about or whole more flow, the maybe let And about an cash some you opportunity or in you thing? less there of the You’re meaningfully think How profitable to them. of just look those is play? over talk decade more investing at looking out, go those strategically about could that here

Brad Helgeson

China things is. They you of here. weren’t of real was, at and do Wallingford plants. level saw types do before the not the bottom profitable of some And part And of already, us lower I that curve redid down our EBITDA you see The free half because the what sold of assets. shut we got we frankly, closely cash but so us the to this that contract Pittsfield around of there there we facility kind Yes, can quite the I’m looking saw necessarily, of flow.

good of have to. you could right example, if operator local about So, another that we the could elected stepped where first refusal left -- is not that and this, We plant. a of Hennepin, had that. strongly of Hennepin think some I triggered feel have We into we right. back

get cases, end what So, lot that plants. on pressure at it’s you’re a to for and And cash I of a maintenance that of on XXXX addressing maintain is big we’re we’re have see it either I and paid, be expertise doesn’t And does think But side. it side, think of and because the is the going out putting I these the EBITDA material have because continuing to in facilities. the look these have that’s some it we flow, not And it the on a work really bottom that is do. fairly we the big or interesting; more impact that may to free during figure impact more plants some bring how going case. we team a -- think

And And these getting work or getting so, compensated aren’t my our shareholders undertaking. view, we’re in plants. money spending we’re the not really compensated we’re for on that

Andrew Buscaglia

more with deciding mean or profitable? you them addressing say you do them is what to to when them And Okay. make

Brad Helgeson

Yes.

of shutting had We off-takers a get looked able some to Pittsfield then, value steam. from example. So, down we’re is and of at one more the point good the that

So, value, and down. we may XXXX there additional shut plants we ended in be up cutting [ph] cases the where can’t deal frankly will around But quite find that. we

Operator

[Operator Please comes Hoffman. your Instructions] next company. Your from state Michael question

open. line Your is

Michael Hoffman

two So, the follow-ups.

that neutral. I growth, get to be subtract renewals free outlook, conversation et you’re takes add it right? whatever on starting point, flow I to XXX logically, Then, puts contract and relatively just be forecasting XXX should cash and the in clear my then you’re the and are I’m But starting So, given the at but for working cetera. capital not that’s ‘XX

Brad Helgeson

it And the working volatility, how the Yes, for make exactly. reason we to of XXX XXX. that’s that forward, going why wanted on to emphasis The to capital part Because run easier lot think on basis. metric. into, you a that the does translate about will a increase given it rate

Michael Hoffman

a And to you operating leverage walk covering X the probably do from that, organic supposed get through to can to X% I through, I’m come then, want I comfort reasonable to the zone and dividend. is that if growth

Brad Helgeson

Yes. there. get should you think We

Steve Jones

Yes.

Michael Hoffman

the know lastly… Okay. I just I And forecasting. then, wanted follow to logic, you’re not

Steve Jones

No problem.

Michael Hoffman

framed you On waste, I where the environmental before sort do you on times saw peeking feel of how services and that? in I we metals, same that are opportunity…? out you of profiled about sort in where mean, you’re ferrous are it’s

Steve Jones

the to We’re probably innings, right. early in middle

because that out MSW where year, next was were it’s we’ll very strongly. right year. We’ve but far backing back types baseball MSW and is X years And XX million over down reasonable at the be a profiled timeframe, we -- that years, Fairfax the say, back running out we we’re -- look five waste tons process can’t of of last should I out got That again there’ll on into do where we be now, we’re a come we’ll pocket doing that the look -- the where And those I’d at out. So, use analogy. profiled couple adding million obviously future switch profiled to restriction, it’s waste. even probably in of we’re going activities a some At beyond see waste. point, to and can

Michael Hoffman

that out years? of five on X becomes analogy, million Based Okay. X

Steve Jones

X, we’re but heading I in becomes think that it direction. don’t

Michael Hoffman

All right. Okay.

Brad Helgeson

more your sense we’re of we and likely back towards but to was take Michel, waste priced the to profiled more NPF, that material. [ph] you think, is may double analogous higher in of non-ferrous nature a be and but in the process the see I more skewed tons think discussion, metals we what that I it’s energy to actually amount that what I about the processing in from plants, the us think, the talking not I reference necessarily waste

where growing emphasizing come in at in great high is really pharmaceuticals it waste We’re example pharmaceuticals. the comes and doesn’t area medical And obviously large very regulated points. that in very, price volumes,

double focus double you’ll so, to but the really volume. may see revenue. And not the revenue, us the on likely we’re growing We

Steve Jones

good a It’s point. Yes.

to have We some look these. at of

can really that We’re focused go be and waste higher energy on waste streams disposed at priced of facility. from

Michael Hoffman

this reasons moderated And pace as talk? I’m the is repeatable assuming somewhat one of one-time to is at a you’re seeking opposed moderated, permanent

Steve Jones

have guys business the in that’s from, heard that. folks back say the we’re then opioid heard this, driving that, And program it’s just -- you and to it’s looking taking. in, And it’s And -- some have pharmaceutical we’re take come say driving more me exactly. want Yes, switch me priced be types and to the crisis companies really other all of side, looking with like highest things on to driving business. we’re pocket sustainable, order a waste waste, that’s do already that profiled of in waste again the -- with at, who really

Michael Hoffman

questions. Okay. That’s great. Thanks for it. I the extra appreciate

Steve Jones

problem, No Michael. Yes.

Operator

will [Operator have any turn over not the questions time, the to Instructions] do call phone. I presenters. the We At over this

Steve Jones

We Well, appreciate you the interest this hear, Company. in time is folks can your busy. Steve taking we’re again. excited as know about for are the the I Jones, future. Thanks And and again. Thanks today,

thanks everyone wish nice So, I weekend. care. and today in dialing for Take a very

Operator

This concludes conference today’s call.

You may now disconnect.

Covanta Holding (CVA) 23 Feb 182017 Q4 Earnings call transcript