CVA - Earnings call transcript Q1 2018

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Operator

Good morning, everyone, and welcome to the Covanta Holding Corporation's First Quarter 2018 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'd like to turn the call over to Dan Mannes, Covanta's Vice President of Investor Relations. Please go ahead.

Daniel Mannes

morning. good and you, Thank Welcome to Call. XXXX First 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

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

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

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

Stephen Jones

Dan. Thanks, everyone. Good morning,

turn along of For the a results, the go strong update those of Slide with on deck, financial brief quarter. using on X. strategic impacted million adjusted provide of an through of started overview initiatives, the then off We the some to web drivers I'll color our more key year with $XXX I'll that EBITDA. you please

results along our flow of our versus guidance our we cash today. with Our before year and which in working line improved expectations. last position free These was working well metrics, with on us are to affirming usage was our capital all meet year capital full

first our the During improved the showed first fleet quarter performance quarter, to of XXXX. compared

plants. downtime X As many significant QX XXXX, recall, will of you unplanned we at had during

I'm highest closely we than very power of quarterly significant insurers in the of year this in One performance meeting we The as XXXX. is plant more performance which client, which and our performance point. Virginia by quarter restarted material the quarter in of efforts prior that to full This the processed after Investments and waste a at prior guidance. the more set is running nearly community is off full plant work year couple a to quarter, In now this to of levels. out Fairfax in Fairfax, proud achieving incurred now without increased it parties throughout get due and in this the we ago, are years a first component of our weighed to operating expectations any recovery event in the with we and of all costs. had fire. with late while unplanned downtime experienced key normal our improvement first local on made plant the the that was paying facility quarter, December was downtime and County The the year, record generation history. its

Another ramped, second annually a have Manhattan. tons when a about proceed already X waste we to XXX,XXX City Marine positive where receive or contract. XX-year the This XXst We Station, disposal MTS, MTS Street XXX,XXX The in of Department notice And expect the in Street. XXst from that is Transfer tons of for news. Sanitation New Shore North issued from Queens. take fully we we'll York the MTS's,

New services. sustainable and for look year, providing to provide procure Over and the for critical install this forward next start-up XXXX. these City is infrastructure we and support March solutions will with to expanded waste to which the scheduled the York We're facility, years the many opportunity

received discussed we as XXXX. transaction to closed for call, in on operate reduce with business short, or Investment Dublin during performing very XX, quarter high cash on plant is Green at the it to the was used we we From standpoint, continue leverage, February our The Dublin million the Lastly, will level. Brad Group, his GIG fourth a which and $XXX review a on presentation.

Newhurst our key effect, any, without assess on development partners development waste continue And Along U.K. development defend will operating agency's are understand media that will social project we our plant may aggressively construction of At year. targeted progressing. steps Our challenging and a and through interruption, projects claim same schedule. have we'll project that expect fail. financing to claim local file The if through by the end environment GIG permitting negotiations these next a decision work in Rookery we permit. with And our its GIG what of may and are The Environment permit. to time, we with move efforts permitting. the the we agreements, EPC Several the partners, group grant the rigorous permit. this full into continue U.K. given projects, including its Protos, on has Agency to process, claim with the will the received

continues I'll Waste full and a of our year-on-year throughout our Fairfax, X. primarily Slide to in well. processed performed was and improved expect with Same-store year-over-year turn get revenue added perform first at due contractual quarter of contributor revenue less the of it business. the Fairfax. XXX,XXX of balance the operations escalators, realized prices. X% X% $XX quarter to detail growth, same-store and service tons pricing I'll we better we volumes to start repricing due as operations. improved by fleet XXXX. Dublin volume very a Please nearly into the strong million Now Outside waste downtime, strong of to markets spot as also the waste and on to quarter contract with and

growth our plants know, you we waste and many believe a preferred industrial unique commericial a for key opportunity, of of and waste. is profiled forms all and offer As solution

X% profiled waste facilities achieving growth our drove XX% Our Covanta recycling Environmental while revenue service revenue growth in lines. Solutions and Energy-from-Waste disposal in at treatment our business material

continued in course as process of to existing over the business Covanta the complete the We expansion projects increase expect this we more designed of utilization to of see help network. volume year sites and

me highlight X examples of progress. let So this

portfolio near volumes First, we plant. by MPF, waste the manage liquid waste to a and and we completed total is of profiled can or and construction different existing to waste logistics both of commercial treat capability addition ultimately that our and a key solid improving industrial of types increasing accept. This material it our explains as our processing for Energy-from-Waste Indianapolis facility, profiled

expired focused facilities replacing expanding from unused capability licensed us market, health than expanding in solutions capabilities, enhance broader superior a requires hope as received order can add made which this A and our landfilled on revenues focused of waste. waste type on Second, secure enable And we're third these higher-priced increase provide plant separately more In we time, for growth waste. strides sites, and treatment. for thermal pricing waste we the expired pharmaceutical unused to of this MSW. to DEA permit MSW incremental destruction growing line Over The as to order and care it capabilities. our to for to higher we're EfW is medical medical In our significantly allows of business fleet. process regulated well. at pharmaceuticals We're at a our on disposal business. this focused to for this be this solution efforts a with that disposal further regulated services to offering on take providing we waste EfW

these goal be growing the to We revenue waste is remain collect least provider profiled our our at be by year same-store Our this year-over-year, materials. pricing key confident overall preferred full double-digit that X%. and a of growth services driver of to will approach companies disposal will

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

which forward increased weather, Fairfax. also full nearly quarter XX%, positive colder were quarter solid to market was quarter pricing First in first improved Similar The welcome, a the were of driver power revenue waste, improvement. improved as increased X% same-store in XX% on Same-store prices. energy volumes the benefited from given biggest QX impact we prices accompanied not a impact but better by had the pricing. including

power revenue full quarter. in the during $X expectation the in at So revenue and prices year The another million is unchanged. for Dublin kicked operations

revenues Dublin ownership. under the However, going our the forward, from will agreement, we but XX% not through will in still we receive performance power plant O&M participate

line Lastly, risk reduce prudently policies. our in to with we historical continue

our hours At XXXX. than For less XXXX, market time, and we exposure, the of X.X generation. we XXXX of in retained same total megawatt open reducing expected actively million nearly represents XX% which position are

what And also been move volume. improvements metals common both the we has and quarter, price year-over-year theme on X. in a in Slide saw Let's to gains this metals with on business

realized an X% inventory XXXX. improved driven With On also in increased the first quarterly side, first by volumes quarter in as increase XX%, performance, in XX% did Fairfax, increased primarily saw index we recovered by particular not sales year-over-year volumes prices the way HMS year-over-year. did the grow plant build at by we while we same-store

we the growth For the in still has quarter. April further pricing in year-over-year sold. with expect ton Ferrous with improved of on setting firm HMS initial the year-to-date, recovered Section the there Index year, per XXX the $XXX mill pricing at demand, light long-term the believe in Pricing we outlook. averaging Domestic tons are remains is first HMS tons impacts $XXX in solid full utilization and #X some amid the and of strong In high positive. caution was tariffs ton. per

same-store recovery by story range over left modestly the from Pennsylvania, recovery pricing year-over-year, giving given reduced volumes greater with HMS and to We full both processing. throughput the fell for in XXXX. second to had the volumes impact the ton. $XXX nonferrous nearly salable We given our equipment. started of to increased due nonferrous XX% facility nonferrous plant an per increased in -- improved year which after by quarter of XX% Nonferrous Steel positive doubling HMS processing -- $XXX side a similar on our have

on discussion metals, the As the on wanted outweighs on we pricing of the volume and impacts to far in reduction. touch I potential discussed this and processing tariffs of close To current business. past, benefit the trade our out

XX% increase The The As know, results nonferrous. production increase prices of of aluminum these imposed imports like scrap on respectively, most of and these domestic the of to result you of immediate the this tariffs steel, visible and products U.S. imports in for tariffs and association, improved demand and drive XXX by and of was steel are XX%, ferrous aluminum. copper. for actions Section

could impact of initial see countries, for and been of some we could which have products. has metals the our activity seen reduce out these retaliatory in more While positive, China and developments other demand

monitor year progresses. carefully will as markets the We

both spend to million turn for Let's maintenance operating $XXX expense. last and now maintenance CapEx, expense to and move was including $XXX million versus Energy-from-Waste year. Please X. Slide the quarter, on Total

of materially expected comfortable now remain quarter higher we And have total of to given XX% than with date, that our experience million number full completed the $XXX We for while range is million. mix are year, $XXX is the we spend. full maintenance year I to note would Energy-from-Waste last year -- our our our different.

we're lower planned reduced we we to higher a to this more tend did also as to outages, costs. of timing side, due unplanned QX bit expense for expense in maintain year the and carry which than due On have XXXX

in was operating side, expenses CapEx in biggest driver increase impact year-over-year. an operations the Solutions growth our platform year other that processing plant and by Energy-from-Waste The the QX, the increased Dublin. did facility. full On with of maintenance, were in expectations. Non-Energy-from-Waste our the at line Covanta nonferrous operating X% was of this Environmental increase Outside of have expenses we driven but

primarily plant As nonferrous the balance inclusion processing of I Energy-from-Waste less migrate of costs due year, the costs we higher, non-Energy-from-Waste the the while of growth should in Pennsylvania. we to out see as operating the look start-up expect the to of to pass anniversary Dublin,

$X with received up second year. we to had in results we year. safe an a and waste, the $X half operating in very pleased hard the on update the our facilities, nicely another quarter. the thank very all the note. manner. and of as Lastly, and I'm successful during million QX. for in to full quarter, a business sets for employees insurance, us We One sourcing It I last focus our interruption million undertaking work want proceeds our related done reliable and in outages expect

We to to as are we greater discuss With turn in fiscal call over to committed results performance this that, this move detail. continuing I'll through the Brad year. quarterly the

Bradford Helgeson

year. on million and Steve, everyone. I'll morning, in with my review quarter revenue quarter, $XX performance good X. was of the up begin first last financial million $XXX revenue Thanks, our over Slide Total

the top by we $XX organically. million prices, commodity Excluding line grew

million performance provided drive strong higher particularly with winter the more helping prices another energy and with service the of the This benefit and project filed million company Green transactions scrap $X $X consisted across fleet, quarter, modest up with earned steel under compared a of and after have $XX contract to in as last we of Investment closing revenue Commodity discussed, Steve million. in majority the category. operations a closing. Fairfax. our nonferrous price added revenue our improvement Group of Dublin to our results consolidated makes prices year February vast JV at normal As adding of O&M the project which

future expect to quarters, smaller particular, XXX% anniversary the under from a quarter quarter, Dublin revenue be For contributions fourth the in ownership modeling we purposes, in of operations as last should you year. year-over-year

contracts energy transitions revenue reduced from $X in contract long-term new quarter, and net better sharing. were the Lastly, million tailwind prices resulting client waste under

$XX on on in an a EBITDA QX the of quarter, increase with in driver significant contributing strong organic of over to inclusive Moving additional of quarter. full the grew XX. EBITDA interruption Slide most million at business in same-store received of an million proceeds $X was operations Adjusted by $XX quarter Fairfax insurance being Adjusted year-over-year, basis, an million million first $XXX XXXX. million $XX the

to we as compared Beyond less unplanned results improved experienced downtime our last overall significantly we Fairfax, across fleet year. saw

this revenue million fair represented On we growth, contributed EBITDA the remainder ownership the benefit by million quarter, metals the QX positive reflecting of is forward. year-over-year outside the transitions adjusted going quarter, with mind commodity connection with quarters front, in XXXX. through recorded Hennepin ownership in $X XXX% of the we of expect ownership benefit County the our XXX% again, our the expect quarter EBITDA to lower as of ownership It's and our prices. contract. we'll that in the saw will improved last Contract a growth. from $XX to in particularly given far Regardless, line this still and And energy adjusted Fairfax, our largest operations third that we Dublin the XX% third fourth benefit with EBITDA quarter. portion from full lap Bear Dublin JV. in that at be from XX% in second year-over-year quarter a exit September for adjusted net of in million settlement a a driver the $X year, net transitions the be first headwind from and

you as refine the second more quarter, your to I'd X things ahead note Looking models.

quarter this This heavily second maintenance represents half sequential similar be a plan is to should XXXX and QX. first as maintenance activity that the year. fairly our different First, compared slightly reflects weighted mix to more

year recoveries the the we in while Second, of last insurance significant second this the quarter received to insurance second remainder we expect recall, year, our half. receive Fairfax in if you recoveries

XX. in was reflected much this to $XX flow of cash year. the anticipated which quarter, we negative Free Turning Slide capital the that million working outflow

dramatically You from should expect to see working normalize capital movements here.

working improved flow year-over-year seasonally capital, cash our cash $XX what weakest quarter. Before is flow free in million

factors some quarter. the during that the of For worth discussing it's $XX adjusted million other cash flow impacted higher, EBITDA the

for in of was out $XX and expenditures our quarter expectations maintenance proved higher versus line with in First, we last this as including plan year, Again, increase increased year first to based guidance. maintenance This the at our compared anticipate a our maintenance CapEx, facilities, P&L client this as full maintenance mix capital-type year. by on expense CapEx million.

proportional plant we until to quarter. Dublin our record not the of adjusted the dividend only with year Second, moving this included the share are ownership, which extent EBITDA XX% expected or of fourth flow to project cash distributions,

unique items quarter. a we couple of the had in Lastly,

as EBITDA. flow XXXX, million for During from weeks the adjusted us to in most the track quarter ranges at our hit the annual was of of flow sustainable case real operating on guidance structure as the next the which are we ins and looking free for million cash summary first cash into contributed restricted cash accounts combined X excluded a focused decade. target company, of has of $XX by to middle severance, reported which that quarter, project was year, and the Dublin for to our the consolidated full relating cost the squarely strong the all flow. of under financing the When on we cash outs performance free of past headwinds $XXX transactions incurred our fourth million free definition an cash a is these and GIG represented Also remain flow year $X

to growth Slide please on investments, our to turn Moving XX.

our Station. with relating business invest primarily officially in $XX outlook projects, York That Marine our City recovery. Steve preparations metal noted, New as Transfer processing or around For CES Street and XXst moving to facilities, we're is increased organic Further, million for plan unchanged. the material XXXX, to ahead growth in now we MPFs,

with deferred and to as roughly cash total In retainage-type This amount further spend $XX contractors was equipment, previously Most, and no year-end, a this was payments equipment fully and planned a accrued million our Dublin, leased construction impact so has capital on if expect balance financed. total for in million final to in corporate not following the million of funded this be to $XX $XX around budget. cash last year year. all of completion our expect discussed XXXX. on transportation included will efficiently of We spend we

change is it's timing there final payments. So there, just

Rookery expectations X.Xx. to total $XX be XX, million cash to project and exclude with with from consolidated our repatriated those clear, we an we conclude as investments. billion, from down on a turn along borrowings. our of relates The repay clarity ash which EBITDA adjusted $X.X Please transaction, resulted received update these sheet. year-end Lastly, by I'll was our turn March growth debt spending Slide XX, where XXXX. primarily and to our in await At improving processing balance the quarter ratio for investment leverage timing on XXXX, net from of to the GIG This this used improved improvement to cash, the last full revolver combination on nearly

where we're X.Xx. at the the our want third that consolidated made we've stride XXXX, to we're peaked of material quarter when Clearly, quarters. leverage past certainly of for I've deleveraging not yet described be, we While the several since path on

liquidity covenant us Xx, ended the ratio, credit which senior the quarter more-than-ample On at facility we and flexibility. provides

covenant our $X.X a As this excludes holding billion of company notes. calculation reminder,

even Pending investments of Looking this flows, next quarterly range all being we equal, quarter. at higher rest ratios. of anticipate leverage see tick leverage in the the we both and the on timing remaining may else year, cash

we'll that, next our to this allocation capital to order Xx. with move And we'd With reduce continue plan leverage highly below to in move However, to like disciplined operator, our Q&A. our to to delever meaningfully long-term remain in goal. further towards remain target

Operator

[Operator Instructions].

James. from first Raymond Tyler comes Our of Brown question

Patrick Brown

quarter, see it bars bridge this there any does few nice about the for but to the we year. the having not in So red sound should like that think of a remainder is EBITDA it things

transitions is from the including the service full this bit? a So PPA Babylon Hennepin, year the drag the and me with basically, debt help can New what you year? settlement, So little England the maybe bridge

Bradford Helgeson

Brad. Yes, it's sorry, Tyler,

can in out you the of fourth call our kind and a that get refer of settlement bridge -- that won't side. contract transitions, year quarter year Hennepin and this obviously, net XX extrapolate the the higher had XX quarter of we the So over do I'll is first market I'll XXXX what year related on to XXXX million another cadence of guidance, We on to the the hangover the prices support from we million obviously, of XXXX in the and the Most that quarter. in of there and energy on put you we then $XX last quarterly to rest headwinds quarter -- on out year, basis, support third from to so positive I'll year that a service see that's of New are for basis, On expect first the recur. the the expressions full fact contract waste the second. $X the for England. in headwind year, the then a And a the is PPA sum is net generally because seasonal that is full

you And year, to the the much drag, but million. we compared over didn't about course have the $X of it's a of think so contract,

for I is in meaningful going remarks, think to interruption on quarter, the play that rest the you had last particular, insurance year. second if year, that how business we as out mentioned the -- does in So recovery the prepared of about how a in

settlement the was Dublin we from in the in from the fourth third in project. So $XX second that million of quarter, year EBITDA Then, an quarter. won't Under standpoint, will the joint the a posted Hennepin The quarter. contribution be be as of venture, course, this headwind year-over-year significant. the EBITDA

Patrick Brown

you insurance Fairfax or total for the last about do What it have million apologize. was It the collectively year. I on me sounds like this remind be $XX proceeds? it'll cadence? you can And Okay. in

Bradford Helgeson

half. the which adjusted to $X and on are interruption, in we million business $XX quarter what Fairfax. impacts terms we year, in were business be so we interruptions another $X Yes, was collected total, expect $XX expect about million of second interruption this business in said, as then I the of we of just in year million most There bulk that, other -- first already EBITDA, million, on total as really that the $XX -- quarter, recoverable interruption the third that collections over couple the up, the the was were were a of We business most of million Fairfax ended for the in of rest about $X events we fourth of took year. and year. it insurance quarters collecting the second in the another which last million. recoveries of bulk Last about

Patrick Brown

then That's the capital think helpful. million we Okay. XXst Street, on And about Maybe should EBITDA on the deployed? how multiple of $XX the

Bradford Helgeson

It will it in be about you to at a way fiberglass. if Xx want multiple look that

Patrick Brown

project? And Okay. TAPS Steve, then the update That's any helpful. on

Stephen Jones

the which Actually, Yes. excuse at ferrous, will -- include increased which kind Pennsylvania activities for our file at which the now issued under we'll TAPS project. permit of ferrous, umbrella me,

we'll permit in that So put shortly.

site We of to is some are working at technology with and our equipment. providing the They are their kind doing work modularize vendor who setup. equipment the

of still first next we're operation. target we So think year kind firmly quarter on for

things they So we'll are to moving the us they've going done be were Pennsylvania kind how describe waiting there. We for see that quite and would frankly like now, permit and of ahead. from to well

Patrick Brown

Okay.

is the But is growth clarification. the quick current $XX not investment that million Just outlook? in

Stephen Jones

for be back-end permit the most we'll Pennsylvania. -- -- work, that's not. and in process no, this it year it's anyway we'll to but No, to of because will loaded wait do mostly, this -- It's some

early of -- So kind spend. for we're 'XX, the later of most at 'XX looking early

Bradford Helgeson

and where taken for mentioned, I approach the year at regulatory in just we've this, we timing formally year, the moving there all as shooting uncertainty one we approvals, this totality, outlook, what's we'll on it in growth whenever certainty, in we'll have forecast. related, out similar flag on incorporate Yes, a into there than rather the particular, target is Rookery, investment to is a once

Operator

of comes from Your Noah question next Kaye Oppenheimer.

Noah Kaye

start understand can so operationally. we Just waste? kind we with When of profiled can

expectations You accelerates. double-digit again, it year, revenue in talked but this waste the about growing profiled quarter, X% for growth,

to of of the the the to profiled over of on just start-up the what's for year. I kind the going that reason operationally, increase of the waste maybe would flow course cadence helpful at Just be given Fairfax? kind understand

Stephen Jones

that's now Yes, a question. good

ramp than bit would slower have And I was frankly a Our related Fairfax. lot of a quite to these liked.

big plant. mentioned year, Fairfax a As we profiled last is waste

it's on that of happened, stream, there So waste couple quarter. was now places. in that part that things to this went efforts particularly a of reacquiring our other But are other

weather the issues given first of was had throughout also less in an snowfall in the year. the impact -- The area event significant QX Some the last work serviced quarter it. there on in

So now although York program. of the around momentum drug crisis. U.S. But pretty drug you're New if to a more access play because the the first in And -- New the Usually up now, we event the the aren't mentioned I year we that RFP State waste, X right York great profiled quickly. seeing now this an that ramp profiled The of City also had volumes we'll more right as around Noah, lot that kind work, large takeback takeback get rest the impact. of waste. the fairly we're -- do look areas comfortable is we out won to will programs that which -- also in the opioid or

be medical start medical our roll the to of will is of that got the to in. then And So a which us allows we that waste also receiver third one facilities, regulated largest waste. at have, permit we one regulated

of heat and medical levels have in go able disposal medical because option, where treatment, we of because a to So our the and to pick regulated as thermal out we up regulated the -- we're waste -- will plants, waste. regulated try certain types

waste feed into and this plant, that that that go through all permit we as it -- out logistics all work that on as So the program get we the year. into profiled

I'm be hitting talked pretty numbers we So about. that we'll double-digit the comfortable

Noah Kaye

and U.K. Understanding next that think good. of recently, to quite And in Very touched frame And expectation about reasonable be maybe of construction? resolved the pipeline. this great. full-scale to a the you Rookery developments Right, the should to enter claim your understanding filed time there? we was get what's with able for how then in on step process

Stephen Jones

sure. Yes,

First off, clear. has it claim I let make will to think the think say, merit. don't any We I fail. And wanted me it

we'll And meantime, so continuing the in project. to be develop

the construction we at on have site So already. going

I think mentioned I that on last the call.

And close. we'll is really impacted financial X that that's year so continue project -- work

at And GIG. claim from to the few to media. and could social from our it's we're early at We'll a partners, hearing look But a schedule -- so delay look few both mentioned, under anywhere And reviewed. Veolia kind anything is this we'll which weeks of be I the potentially months. assess. with Like

So led we It's U.K. a haven't media yet. this robust of very a the kind point. at social that process. We're confident received agency environment event anything

rigorous So really the of allow has environmental has U.K. to periods, the the idea. pay claim which we answered cost. think through claims to be agency. just is held environmental to on had to agency The under extended an suit by process that the were on questions for and And by of consultation pretty people And process. the they give all really X they were both the a the went the the loser system, feedback and incremental

opposition group. is So local this a

challenge. a I So bit of becomes that think a

will merit going and said, they process. to is agency in effort. as defend And doesn't vigorously the confident the So claim have prevail think I the we're I any environment that ultimately the

from on few to a weeks say mentioned what that tell But anywhere means. I to As timing, I few little months. can early a potentially a it's

Noah Kaye

mean I this could permit right, to mean, is helpful. not that and challenge, and the project years in of online is a very the we process future, come just understand. that's -- itself. challenge And proceeding several and you're still so this a merits the again, Yes. a I

Stephen Jones

exactly That's right.

Noah Kaye

just of is there sooner. even understand looking case I know have a all just at process, could folks couple there Again, background, that. are but in a reply in possibility do? in like weeks be legal So seems it that or no the So team I a there we your review

Stephen Jones

when agency they're all It's types -- go time. environment processes of say U.K. the correct. these challenge the And that through the that's a environmental up, in on they the process Yes, I set utilize.

-- permit. good very around waste the operating process a this they're So at granting

So we're pretty confident.

Operator

Hoffman Michael Stifel. of from comes next Your question

Michael Hoffman

all, any you expo a I look volume. and he of have volume I'm asked each if plants recently comments One, so curious, But -- had lots Jim like thought panel were we had the in there's first trash, they plenty two Recycling, seeing of he conditions started this and had interesting. of operate. Warner road on two what made of

or So across I'm to Has out the was warehouses seeing doing curious was portfolio. And the moved he waste -- you're curious what on into the landfills I incinerators? mixed Chinese about was But to what market that's impact from of of second the either paper? it of spot any your coming and seeing ban finally, going that?

Stephen Jones

put We to want it some don't to those want a it So We plastic questions get So guys from this it take this you a has of has that plastic? landfill. is plant." interesting. we're warehouse can and lot into who a A friend in a yesterday said, fleet. of starting mine to text Energy-from-Waste of throughout -- he "Hey, to take and our

out. tell So at plays how a this early stage, to it's all this little

I having other going think this from be U.K. They're across I about countries in that to means heard bit in waste mean, U.S. the our ultimately, partners. and it some sheds U.K. more we've issues of there's too. a too. the little waste

plastic, it preference is is -- as the take energy you know, content, higher particular. not has to in materials -- has well Our this because

of that not for head the will change may kind other Michael, believe -- direction. about and They outcome So is to this talked of obstruct maybe Chinese some the of will the and sort best often I X know in regulations and this that, then path out we it before, there. itself you've be do kind

Waste view, Pricing kind this our England out out. strong, talked waste profiled more to to more of that continue you've been in the has in But plays market. we'll it's be how leading in about strong -- have there. certainly, New see markets especially not waste pricing strong So and before. to

Our be merchant spot we're prices. full, our and and plants continue transfer stations to pushing so

good a a time it's be company. matter, general to waste a as so And

waste think good just I shed. now. darn into the China the are waste adding the markets right situation And pretty more is

Michael Hoffman

to is million I the gears. at I'm to this want EBITDA. XQ, I the to $XXX, midpoint in following is Switching you sure There just the about model. how reaffirmed Okay. right make think path $XXX

sure news, second think comes down let's the that in to and EBITDA in way up comes Given all and it $XX make or it, with to the about down takes half. as $XXX in do that million don't -- right? should just bad not things like shared That's pattern about right assume we in sequentially? we hedging the follow XQ puts and the again at then down we XQ changes us, you repeat XQ, profile goes That's model and

Bradford Helgeson

the than think period I is in quarter, everyone obviously, which that's particular, stronger knows. always second Yes, and the third the half right,

your quarter, guidance broadly second first think relatively I think, It the with consistent a characterization the is with quarters, accurate. give be downward of maybe obviously pressure. we on bit quarter but don't I should precise

I is think that fair.

Michael Hoffman

you're in -- second the reaffirming the in And the power your point. notes XX%

first drive get to XX% down that... into to the in range to I make got XX% XX%, to to So versus XX% to the the the somewhere be able

Bradford Helgeson

yes, right. On power, yes, that's

Stephen Jones

correct. That's

Michael Hoffman

okay. Yes,

show follow And wanted exists? just does balance is that -- project of what that I all to on up XX% joint up, pass sheet make How Rookery your that I on around logic remind spent me approximately noise financing you Dublin. this it's lined you sure again the venture Just get right. the now to so then,

Bradford Helgeson

Yes.

unconsolidated sheet. equity -- really it's So in project assets, in to in the our with it's debt no joint quarter, the balance only other our again, in interest this in would the venture, in be subsidiaries

Michael Hoffman

shows So up debt the balance in when starts financing, none Rookery that of sheet?

Bradford Helgeson

correct. That's

Michael Hoffman

I want sure Okay. just remember to make correctly. that I

Operator

Instructions]. [Operator

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

Jeffrey Silber

investors. any quarter. know I from had but the first or few did you're a pass to there year raising a conservative? overly in you for going sizable guidance Was it's the I'm you along or reason consider I got outperformance question being early, just

Stephen Jones

in still first pleased year. It's with have -- I'm the the really early quarter. we Look,

year. I mentioned, guidance up us But it days been for only gave initially. since sets we I the nicely it's XX As about think

the of the let's rest So to starts year how see we thought play out.

So know, Brad, if want Brad that was want really more of our -- you to might thinking. comment. don't talk to I

Bradford Helgeson

the going in quarter. typically frankly, expect a mean, Yes, our back plants way first we to, that operated should, guidance. the in I'll plants the we way way them they our the just to of -- in description in operations I would assume emphasize they a

that extraordinary regard. So there really was nothing in

as the think to benefited quarter unfortunately, favorable last I first it relates we candidly from, pretty year comp. a

Jeffrey Silber

bit then increases accelerating when for talked on when quarter? waste saw in a trends the from about imply about into are volume. what Or that talked and Does waste you -- looking stay further you to processing you further the you Okay, the and growth? Slide growth we drilling outlooks, X segment, just first stable in

Bradford Helgeson

levels, at of refers for it extent volume, capacity processing and full Fairfax the to is relatively record course, as Dublin essentially now operating characterized operating to But with fixed now our capacity, fee year an see a isn't -- higher service arrangement growth. volumes, but beyond ongoing isn't it really processing us. necessarily that, of for rate ongoing going to you're it With added an with

Jeffrey Silber

Okay. on if of then you maybe side, that, acceleration. bit just you Can little that about And color pricing on possible? sorry, quantify a talked the I'm get

Bradford Helgeson

Yes.

Sorry.

of last to the So quarter we in expectation for the We that have we X%. that our quarter the view. saw for price X%. year in And be growth still first talked about neighborhood same-store year-over-year of

So that acceleration. implies an

Stephen Jones

our good X% pretty about number. still We're

go carry as will pricing waste go year -- I and my not expectations on the with X% kind the from overall is going was asked, just waste Along It's up kind the As X%. good profiled first you and to Michael this waste up accelerate with point. the through of profiled market good beating of in quarter. dynamics -- along mentioned, at Jeff, that through as pretty as it that to you

Operator

of from Sachs. comes question next Your Brian Goldman Lee

Brian Lee

always guys that you But you had a on I modeling same-store versus is this say trends given be for But you the the the uncontracted streams dynamics you for up recognition at But quarter. from can that And sure down look on drove given moving talked per I'm it perspective, them as year? about pricing and while where there the of pricing-wise you X uncontracted partial some those should here. a to moving thinking the follow-up the of -- pricing contracted embedded waste is about -- speak just way. first in in report contracted that through we time And know you This think then, contracted ASPs Dublin. contract when revenue seen the this would point. year-on-year some I streams. don't general pieces ton I of what we to we've the year-on-year. the being the a on think in know

Bradford Helgeson

it's Brian, Hey, Brad.

mix I issue touched a I going mean, think the in on averages. you was there on it.

actually we XXX% it Dublin our that for much, And in meaningful the -- portfolio had on much at quarter meaningful Having domestic plans. So consolidated focus disclosures now being owned the tip tip been included fee and in pricing the the half than Dublin Dublin, part anything mix of as impact. is half structure that -- our of higher fee quarter. had has a even for Dublin, a in on XXX% the

but is story, coming Going below the average tip our market is on course, just in, big given on great other below a actually as Fairfax contributor, it's back the was, way a of it average fee. it's

weighs both uncontracted of other at for that kind and contracted way. So the

some underneath have do churn you surface. So the

try contracts focus key I same-store across it's that whether is escalating which we are the and finally we see the consistent and and then, pressure think see now on on are generally if the probably, course, of a we anything forward. on to market where waste with which for in profiled numbers putting going dynamics we spot basis, improving see growth strong uncontracted inflation,

Brian Lee

a you and mixed back headwind as of would of year? But we being bit enough. XQ normalize the Fair it the characterize as get into into then half Okay. things a or

Bradford Helgeson

Yes.

Stephen Jones

right. Probably

Bradford Helgeson

a of the is going through Yes, that's year-over-year way at all Fairfax basis the on be out comparable course, and, comes not year. fair to because Dublin mix look it way to the

yes. So

Brian Lee

any for recently. more the With just here on. the the I'll are you're Okay. that metals And having then, outlook, it me second seeing we strength one respect not pass HMS here to raised changes That's to business, pricing the despite assumptions making and helpful. also, and

the tracking your to you HMS you're time interpret toward Just want updated year? strength didn't ranges the fair this that range it to on assume to early on to higher is end or the the just outlook. no first raise view on how So wondering change and and in the

Stephen Jones

comment, That's a Brian. fair

If I now my range Copper really remarks, the good. in we're look are HMS you mentioned at #X. -- prepared prices on $XXX right we're as in

the we're reasons One with associated is retaliation here XXX potential of because any being Section little tariffs. a the of cautious

how sure this to is really all not play we're So going out.

and it the some retaliation, and Realize around -- our plays become our what actually there point. seen. come our bigger on all go year metals are to back We'll So little move of But how that from portion will most of the markets China. there issues China are we'd thought the we're cautious based clear. too U.S., the HMS But go pieces that also in out nonferrous as see, of this this or after over range we a we've the whether and see at we other are being the nonferrous through sold world. there's

I wait or again, see of this point through So and impacted we're be to don't depending kind impacted. move bit we'll severely But happens I on said, what the what next around the at quarter. markets happens. like see think seriously a may little

Bradford Helgeson

revenue material least on incur that, arrangements And door delivery entering the the control some ton this cost a our the then, the are and into some the a delivered offtaker In in By point. higher doing cases, where plant, i.e., historically, there's transportation we as our been circumstances have we Brian, charge per that effectively. We, little of FOB, that of plant. at -- product at takes have nuance ferrous end also here this where impacting side. to well,

not down. transportation cost the anymore, revenue comes incurring but we're So

necessarily revenue short, long doesn't whole where So situation story the the that's story. tell a

Brian Lee

for drivers what there? Section Last volume XXX XXXX. for of outlook and takes missed and helpful takes to what Is for me just budgeting ferrous were the but playing follow-up retaliation color. might have Okay. potential down your nonferrous slight sort that, a down one behind here. both all the issue the that on you're That's in I on shipping and

Bradford Helgeson

Dublin up of the -- approach the accounting effectively sale other the and done that book The you kind where this assuming the have guidance U.K. with there picked cost. the are revenue the we -- ash our primarily the initial in handled, is had that changed here against the and There for -- is way another we is ash on full consistent be metal waste way provided as sales will metals year which we value of metals. the for metal in the is that Dublin, is well, netted nuance your

accounting decided think, case we've treatment is change cost. against more appropriate to, a we revenue in to where So Dublin's netted the metals

elsewhere, the processed on get centralized recovery of just just we terms revenue, some processing it generate tons statistics slightly and of the but at based benefit adjusted timing projects. again, we facility the So for in sold the they nonferrous, out our the volume that On came of number.

Operator

call There at are no to Steve comments. will now the for further return final time. Jones I questions this

Stephen Jones

we appreciate taking taking the time time appreciate to share first busy, about Covanta we questions we We and about for goes everyone, where the on, is season, the us and headed. with know and Thanks, as quarter it's you're company. earning talk were to all very our the talk -- excited and your year about

weekend. So Take day good and care. thanks, and good a a have

Operator

call. concludes today's This conference

You may now disconnect.

Covanta Holding (CVA) 27 Apr 182018 Q1 Earnings call transcript