CVA - Earnings call transcript Q4 2020

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Operator

Good morning, everyone, and welcome to the Covanta Holding Corporation Fourth Quarter and Full Year 2020 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.

Dan Mannes

good and Lisa, you, morning, everyone. Thank Covanta's conference call. to fourth quarter earnings XXXX year full and Welcome

Joining take the COO; provide Brad President will Derek and update. our me will Ranger, financial On a provide CEO; your Mike on CFO. we operating the Afterwards, Derek more call an today discuss update detailed Veenhof, strategic call, our will our today's and questions. on Helgeson, be Brad will Mike will review, our and performance

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

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

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

Mike Ranger

When Dan. role into Good situations. with to the Thanks, similar issues morning, review ago I and stepped brought X.X my the given months on and a the perspective this everyone. and company good I process, about lead opportunities strategic the company experience

and committed our actions. not fully plan our let bring analysis data we to and However, a the decisions formed direct we did that and at point,

As and we of to more unlocked announced value in to October, some I has so. and now With process the how see our how shareholders, we just to where strategies to be in of of to been an exactly value to company's objectives a specific businesses review selecting opportunity and initiatives. do deliver Allow to understand layout initial our efforts focus and in-depth the date, me the do can clear are that.

market. assets believe company are the we undervalued that some the by First, of

result the of on this in order business our evaluate this our certain demand best will alternatives we capitalize recognize In value some parts cases, such, for in As could to potential to value. market differentials. the testing –

our our business, not Waste-to-Energy of core our the subset in derives A flow. of plants current Second, the cash is operations of profitability uniform. our majority

will for reviews, for of this to asset is improve less we be each effort importance an act will be the possible, the of to level many exit specific execution, or In in but levers we the work challenging unique not most we will future. here if and risk strategic plant look the great contributions, area as decisively will reduce use company to ways, operations. it efforts be to flow. the situation, will part The improve but Our cash profitable best this position will we

likely consequence emerges be capital this of portfolio focused. the objective, resizing I an leaner and company Our of our allocation. third will any from evaluation a expected and review our of that asset would more costs and be

Importantly, we better pursue growth and be expect to business. in remaining able the fund to

our Lastly, be an activities expected outcome reducing of financial leverage. will

story. can the our pressure, current the of overhang mix rating both and enterprise less shareholder to market equity potentially returns. and increased increase public company de-levering, added allocation, able our that capital While the trading on growth liquidity a in equity optionality an value, benefit Board over believe of our An are and aggressive or the is investors is valuation. capital or on structure whether participate is under agency leveraged no as leverage the multiples By opportunities I of universe we for a broader increase time

occurred and assets markets public coming the that pandemic pricing our our in in meeting we goals fully waste will that discrete Brexit time waste the with have recognized million review that of when result we soon While middle strategic occur the reached years share projects, of of when out in the the made last we ensuring the business have explicitly we that price. This international growth, partnership debate and two set new GIG. making we are today, X.X terms small four that specific the full we no component by totaling have will the announced the not of the we construction. is moved year. remarkable world, piece tons quarters. have as This projects strides steps three one financial actions coupled lockdowns. the support. a was is anticipate ago and COVID-XX our is strategic capacity will review discussed into we I close key of of the best any the is play make project, announcements A begin And related of the a and in this anticipate metric over on Since in that that over critical value of announcements processing And with I will that through this during Dublin of to five in midst the task located series

As I'd three the two projects, you UK our over our portfolio, pandemic-related the majority highlight material we've progress delays made also on profitability with last represent the years the in notable which consider English the construction no of vast portfolio.

construction on operator company, a lead the took As complete. construction, the we'll is we be these projects, all on and and development once of three construction

the we is to roughly ago. XXXX, over as financial major begin Rookery, financial waste close you complete. on right phase. in and plant the you processing reached with so on of into progress Rookery two receiving expect construction two nearly see some at middle last years investor projects the project our moves the which commissioning in is March Looking reached budget schedule the close years. the can photos as this know presentation, year, hot which Around advanced, the of and Most

Given our progress Rookery first full to-date plants, and half in be and expect new of EBITDA experience generating the we to operation next commissioning in year.

$XX our and $XXX least from cash at million facility, we these the construction generating of with operations year, the free EBITDA With portfolio anticipate million the million. Ireland sizeable annual already commercial contributions at when completed, from Rookery to wanted operational to least I flow transition including million to projects the UK approaching Dublin we to adjusted next of highlight $XXX expect is at $XX

create a UK perspective, that is President demand you outlook and and landfill given significant out will effort regulatory for and we should Covanta for market successful member, team, leading believe our be From the as floor, operating management primary shareholders. growth and of Europe through of source some, UK avenue, Now you remind that in the a for new Waste-to-Energy Michaelson. additional to vein, pipeline. the the build four Owen the ceiling. In view attractive this the our construction potential development Owen’s the remains and additional alternatives. that projects would board of of international our fellow a support market drive role In value completion not for tremendous I projects, development, value financial remains

financial to our on move let's update. Now

would of ongoing, pre-pandemic million, fell to focus. reporting inside for review range. results, guidance original strategic the our of easy the we But be with $XXX With strong full which it EBITDA adjusted finished XXXX lose team year

greater and Brad to Derek conditions. We cash the $XX even our possible we challenging essential a in only with million undertook our which of as and of in a discuss and credit tremendous of effort of of volume typical planned results, It people is detail, also nature than flow our generated will the model were business free These resiliency investment. services. more capital to team incredibly a maintenance

guidance $XXX from we of impact the and these expect ahead, in are $XXX free million results XXXX on million adjusted million. initiating flow EBITDA to any of we $XXX XXXX. of to Looking to review, cash strategic actions million, Prior to $XXX the build

strategic that improved results. I process, are it committed Derek on operational over we am core remain With business will value driving While discuss to to through highlights. to the review I'd this our and that, confident and on to financial turn business focused the like team creating Derek?

Derek Veenhof

obviously the on and presentation X. I'll was Thanks, could morning, a referring and And everyone. passed unique that good plans begin people, ways think assets anticipated. investor overall, my XXXX in handily. will year never our Mike, Slide we tested I have and comments we be the to test

our integrated flow customer commercial quarter, be a a in moment of the made perspective, waste late portfolio leaned our really base due all significant response, along pandemic of the we with meeting strong we our on of the the pandemic. of and It I'd impact way. and plants. that, heavily regard. into our team of the located the this beginning client in waste For stations, along take transfer for personal never a marketing From to year contraction waste for assets, the market witnessed In will to employees thank forget ensure a and steady a our like first waste strategically to relationships sacrifices people the in challenges including will volumes

volumes of we fee lower our we during the increased quarter, our up of total, typical total with going we greater X% waste, year. our average time, kept locations in mix fee our sequentially in opportunistically preferential Given contracted we full believe for year. second quality prices and and tip both the price prices to quarter. growth even volume our full bottomed our even the plants counterparties, the price weighted In which At the more provides throughout ticked residential same tip spot forward. fourth a tip fee the reliance stability third draw on After waste, same-store and

core stabilization ahead, I our Looking pleased we am waste in with are flows seeing markets. the in

goals. new to with term Similarly, increased in in of sustainability to tip XXXX we X% tightening a inflation improvement, markets see see expect including combined prices, capacity. their demand ongoing trends We X% solutions continue see When pricing, meet to this looking to price even by increases disposal companies our in continue higher support that to environment. for longer during same-store contract fee low we

On XX.X% to ensure CapEx maintain safety protocols. incredible million This waste. will a To us number CapEx of This work able compliance even the level pandemic planned investment, our maintenance of the operation of the with of of required and robust large of of scope a of our diligence. fact environmental proud that I'm to side, take availability, and XXXX pandemic, operating work, fleet. of the reliability, all during a volume enabled execution, during and on our tons the the were was this significant process $XXX also included solid and million. projects year challenges that we XX.X long-term planning strength of a boiler demonstrating success availability with

ahead, in expect XXXX. Looking be maintenance lower significantly we capital to

years, expect watermark we As future XXXX high capital maintenance I be to for look a spending. will

have maintenance than in a for schedule typical we XXXX Our will XXXX. more experienced cadence

a in environment heavier compared XXXX you spend first of XXXX the spend. the to normalize operating half Assuming expect should to our of continues weighting

pandemic, quarter. As we more first of the timing outage in this at activity deliberately difference onset acute the deferred be the will

steel and multiple our see and are an began latter serving focused for U.S. on we remained transitions that very challenging limited load inventories load the In in demand particular months we finished XXXX, prices. energy steel industry economy, furnaces towards improvement hedged remain on steel. year facilities. weak energy, both rely incremental front maximizing for metals. a energy our we There throughput of for improving the and base In to XX In part as our electric heavily metals risk. managing both was and metals cases, On including arc global highly margins prices the increased on scrap to business the recycled drivers, renewable drive next the of commodity for we will with XXXX utilize

metals. better ferrous pricing result, a and we both to XXXX in with XXXX non-ferrous as compared entered As

Moving to to our is ongoing commitment waste. to like on an to construction of plants The of This business. landfilling as Covanta’s initially our foundation drove alternative defines of our company preferable really Slide to remind and mission X, I'd you environmentally a ability the commitment sustainability. provide of our

All to usage, multitude to clients methane at are emissions avoids our we of greenhouse which and When reduces landfills, providing see of going our landfills. energy, reduced initiatives significantly to look sustainable production and benefits environment. The broader leachate waste land mitigates a compared the waste the growth to released solutions centered-around we customers. to gas by

Through electricity load offsets metal which which reduces extraction homes. power the to generate And burn efforts energy materials million recovery need intensive activities. recycled we renewable also base XXXX We fossil our X fuels. in produced we to mineral electricity,

whole live awareness the of our each highlight time almost is beneficial of of one the of to it of risks to in Outside and process, our on to the administration, organization reduced in gas prioritize nearly continue where basis Taken decarbonisation. think reduced and our of million ton In increasing by same we XXXX, gas focus our a And climate greenhouse throughout XX work. communities waste change tons. a gases total impacts, we of metric greenhouse the the clear greenhouse going also sustainability we essential role by at and for we plants a to landfill. a emissions as compared net lifecycle ton we waste new

We have where today goals communities have place a in we workforce diverse represent even operate. better and the to we

company. we our Our safety workforce is of their paramount. is backbone And believe the

decrease testament history. even This team a protocols with achieved commitment pandemic, safety proved XXXX to we During and their the operating highly lowest of challenges and rate additional X% is our to last the injury X.XX, effective a the our year compared as our safely. of recordable during operating a in to

a and to from As With financial solid have cultural results. continue see can turn you an to over I'll it we that Brad improvement. discuss Brad? standpoint, ESG to the drive focus

Brad Helgeson

refurbishment $X revenue. ferrous activity evenly energy at roughly for we earn metal. had Transactions related XXXX, of for in added financial client-owned facilities prices by results impact million And revenue my Commodity overall between market reduced negative prices Slide million Derek. I'll up revenue split the begin $X.X partially environmental Thanks, which XXXX, was which and review lower a higher and driven from $XX million. and million on spring million. year-over-year Transfer These slowdown new lower divestitures added to million contract over a electricity revenue the pandemic $XX the by operation offset load full-year of added $XX summer, Station. Completing which asset revenue the by on XXXX with closures and and the X. billion Total fee $XX Manhattan by Marine serving project were at offset bridge services partially tip long-term $X transitions revenue

XXXX represented Now fee were we transactions a $XXX cost Slide to from to wholesale higher prices reflecting contracts, planned lower operating program in XXXX. new $X EBITDA Commodity essentially were in headwind Environmental contract that higher million adjusted total. to the X, growth, X% the $X These of during the transitions maintenance compared savings million added EBITDA, higher million a response expense. serving instituted offset pandemic. items Positive pandemic drivers million tip while cost and in overhead and Covanta moving the $X in to by long-term Solutions decline on EBITDA was costs adjusted load

reflected was EBITDA to at Slide for outlook relatively increased please for Slide upside quarter. year. planned cash year-over-year which higher program our the the beginning $XX accounts compared in of cash offset from X. was $XX million partially the XXXX, the by The review to to receivable guidance flat, consistent driver flow This year turning our capital will I million primary securitization XXXX. million maintenance X, $XXX now working with turn a was free our during fourth flow CapEx adjusted Now of the

increase $XXX million Derek The driven recycled as We million. are primarily for XXXX higher metals year-over-year discussed. of $XXX to our by prices forecast guidance EBITDA adjusted initiating is

we're expecting year-over-year. similar commodities, Before generally results be to

of under as pandemic leads to the a there surface and comparisons. in However, noise number negative both are the variances positive the some

X% growth waste We growth. X% normal for expect tip the trend to results. key resumed markets to fee as of largely have returned and This we remains driver our

see On difficult expense some we side, to expect the comparisons.

in of XXXX while were highly temporary XXXX. one-time and saved will reductions notably the XXXX. reduction nearly we in in in remain Our million $XX focused program savings salary Most furloughs controlling nature, pandemic on recur and those and costs most not cost

many medical like reduction benefit addition experience in companies, we experienced In XXXX. a in

to range how out. or guidance towards levels, see a assumes Our normal plays we'll normalized that so return

pressures rates, the increase macro with year. $XX of costs in potential experienced does casualty adverse that reflect million and we're the time, approximately and market, at the review. steps, will Lastly, I guidance if specific an in in specifically update actions this as taken we'll claims interest insurance discussed announce low property part insurance strategic our note today seeing we any appropriate. that as guidance not of and When

in to Now maintenance are million adjusted CapEx. free million the The turning in discussed range main to EBITDA as XXXX. Slide flow generate $XXX significantly of XX, expect in $XXX cash the to and we year-over-year drivers lower improvement

represent to the in XXXX. the essentially we working inflow million implying $XX to to flat in compared Lastly basis, XXXX relatively on working year-over-year headwind capital million expect $XX capital a cash positive

flow. this the cash year, million From discuss we're Slide allocation. $XX of approximately I expanding here of construction funding overall planning investment in UK. usual at perspective, look primarily presentation where will growth a XX, to to turn We're free please our Now utilization capital the discretionary

our our cost as and and and This premiums bought to XXXX partners Protos into in defray development project at Newhurst XXXX, investments these financial close. projects. the garnered Rookery, we recovery help During

policy $XX resulted now dividend million in path $XX of reduction equal. in confidently annualized million strategic with $XX at is debt a dividend being Our We an XXXX. in else the million reduction a the expectation XXXX leverage to for $XX in available have review. reflected in point our April can account new in reducing And to rate resulting actions baseline into the announced reduction of change payments or approximately our before million XXXX taking to from

Now I December year the an debt XX, $X.X At the million provide please XXXX. sheet. increase turn will a net from Slide was update to on balance where XX, billion end $XX of

first XXXX of Sale XXXX. proceeds four the of $XXX leverage which in additional received conclude times. end. my our We the update consolidated with X.X under into the please Earls remained on times, of in into million the turn construction come was UK XXXX. an ratio I'll on facility order; the following our XXXX, was are Slide Protos right investment the And two. has million top largely at in The Rookery schedule two through of was at half UK, to growing and and slide have an net estimate UK and Available in our now credit projects. revolving year remarks four covenant in premiums which expected Our senior and liquidity under business during in $XXX facility with the Gate required flat XXXX, to presents XX. majority projects Covanta’s to credit the projects to investment Newhurst Ireland, of XXXX. We the complete operations equity net in move ratio construction the

liquidity and fund ample We have flow than these more amounts. to cash

XX% XXXX, $XX for generate of are of $XX in reflecting fund GIG adjusted $XXX ownership operational, million O&M flow, we As in and a our entirety will and to-date will premiums to the the all our project Ireland investments in UK sale four formed to received projects. effect the business cash that our million our projects the of distributions initial the estimate with equity you where free see in fees. along in we million million EBITDA our the and UK in of proportional with new project can When a Dublin partnership interest $XXX

along debt business. Given estimate data unconsolidated $XXX have basis, million to the the you these value the emerging estimates, of approximately proportional with share this of a necessary our project of on fully-funded

operation As I expected to the of Rookery commercial first reach mentioned, XXXX. in is half

purposes, an of basis. $XX date million as Covanta adjusted modeling will EBITDA on For approximately this Rookery to approaches annual generate

forward we're As additional projects Mike discussed, mature. providing look to these developments and details pursuing as

attractive economics regulatory Given growth the With is financial landfill we're the providing the supportive alternatives today framework of portion and to starting on to operator, for the see move here estimates would we UK, our continued that for we Q&A and need in to a that due opportunities more point. the like call.

Operator

first ahead. Kaye [Operator Noah today comes Instructions] go Oppenheimer. Our question from with Please

Noah Kaye

for is Thanks with priorities the morning. or the I what for see? Good with with learned after you? a days the come Mike, appreciate start color would and share questions. I so all I business about question about the to what for this the the getting can well. I'm strategic ask, or taking guess everyone opportunities can review. Appreciate hope incrementally just of I have on you you've us kind XXX about started you What you review.

Mike Ranger

of things. couple A

largely to conclusion organized in was fashion. the business a we First of that one is all, came homogenized quickly the

to without, at expenses look at very think it's consolidated assets. the process most in warrant we So still we're And rationalizing directed need the to, profitable like, allocation what and the the once of profitable for directed operations. structure most again, I enough capital should scrutiny expense

the that would So first. be

our environmental is is, alternative premium environmental customers an together dedicated supply can consolidated is facilities, when our for landfill character opportunity like business, helpful pricing. and services have, breadth we zero having it services a Waste-to-Energy commercial the that at bring to where facilities of other The things that services comes of our plus that that is some

the that Ireland waste business clearly, completely we're solution. pretty is because customer facing plants newest looking technology, for now a a one the that's And So then non-landfill are UK strong I somewhat environment think together. than unique. in different newest That's those that is is

service you've both more you've pricing. than and different a in America, constrained much North So contractually assets very obviously, that's client and got dated obligations business where got contractual,

So being preferential. very own for merchant America UK North and more in a the in is in obviously market plants our

Noah Kaye

I'm sense. the with higher. looks, improved Brad said a we slightly UK think there's portfolio in profitability make it view your about look economics? the about Thanks. here color own portfolio? what of does has the That markets then just nudged of sort UK or the valuation on mean, what for portfolio lot waste like wondering, in judgments. seen Can you're makes it which of us you've and expectations of I And can run may I profitability anything detail any rate give our you you the have improving Ireland kind in the as But

Brad Helgeson

to percentage is equity it's ownership based project our we positions be those in the assumed There has two led project. increasing a that number when Number finalized few we will We Protos in range, the the pretty the relative ranges, in here things pound first morning, preliminary recently. In been Brad. ownership strengthened nudging it one. currency. provided on UK, Good Obviously, ended significantly us always up our had what final Yes. were up. that off, as said to

project now that it rates. this range current a improvement been So management And operating – slide. we've years. the updated Dublin updated we've forward for We've asset contemplates then on certain the currency few we opportunities. also We see noted for the at

contribution. be shouldn't static of as necessarily that level a viewed so And

Noah Kaye

helpful. Okay. you. Thank That's very

Brad Helgeson

Sure.

Operator

Please next from The question Hoffman Stifel. comes go ahead. Michael with

Michael Hoffman

assets could to what And Hi. evaluation review, to, to EBITDA so us marketed strategic you're that if Thank asking also we about that should much. what the thinking advisors concluded analysis? certain you're looks actually us if give very in such, you be incorporate the apply been have and UK, hired? selling say, can Back you you have like

Mike Ranger

We’re organized terms value we're of now seek specific third-party to market from the some point in at where assets. the

market to could beginning So get the as be publicly our what a better the trading the value in until the once maximize traded of relative a multiples, to that guessing much try those everything value But market. be the be what have is and greatest of our differentials at to we sense – have market we'll would was what table really said of sense interest that. interested But would we the feedback, to on from we company. we clearly,

market to short be we're So engaged in of time. period pretty here in with that a going interaction the is what

Michael Hoffman

Okay.

So simple are shopping and and if prepared values I'm sell to not, you And them, wouldn't, you a Very specifically, I'm assets. pretty that fellow. hearing? certain appropriate you're you if what is get you're

Mike Ranger

fairly Right. that's Yes, accurate.

Michael Hoffman

Okay.

a fee versus the in what the allocation the versus company-owned side? side, comment the spend what Mike, between If total service about you the statement, flow On cash side what look made the at goes across capital how the beginning maintenance would portfolio flow. cash I through to goes P&L, proportion I of sort

Mike Ranger

question. good a That's

terms be volumes investment. the would biggest would with volumetric warrant plants more the in it of of continued Some most

the the merchant plants capital would client and service allocation skewing be the XX across So, plants than garner clearly North greater do. America in plants

Michael Hoffman

Okay.

Mike Ranger

client-owned do plants One-third plants maybe is merchant about and the that being two-thirds, the split, to You would had one-third being right. owns. might be two-thirds Covanta you say

Michael Hoffman

right. guidance All around the a transparency very this And XX, helpful. now. That's standpoint, from Brad, Okay. Dublin's on then million about Slide $XX

suggesting You're a If million million. into of tons $XXX million, the sort apply to ownership, EBITDA of $XXX Rookery’s EBITDA contribution I coming sort that's of $XX proportion versus about I the the the to look get kind to $XXX at to out assuming map way to $XXX million not the rest I'm map to a bad out the can how of that's of range rest. million. of

Brad Helgeson

close that suspect using come No, methodology. you'd it's not. pretty I

Michael Hoffman

reasonable, XX% sort of down using is a as the one? of multiple a sort each then And from cash Okay. cash of generation EBITDA drop to the the just

Brad Helgeson

Yes, more or less.

Michael Hoffman

that's and of XXXX, right. year, a million full if to of when kind Okay. then that the to And roll then $XXX at – middle, same pathway so $XXX forward get half million it's All contribution, it contribution. that's about, kind layout I first XXXX, I'm

Brad Helgeson

and mid-year Newhurst we'll to get course, Gate. specific more as you mean, want of we assume yet but Earls second inappropriate. to haven't half, guidance, any not been we that's as I of absence Protos’ give on specific first which in Yes. But if half closer,

Michael Hoffman

your start hedge we evolution able I of haven't Okay. this And metals business to do that furnace growing volatility in the to, some I we some take there been markets I electric that opportunity out a then of Is and own arc of the be recycling. able head but I comment, a cover historically so of model? to dust get given the mean, volatility? can some to agree, companies

Brad Helgeson

would an And can. emerging for us, opportunity. we I say Yes, it's

As increased be sorting our to us think to, specifically was non-ferrous opportunities a really we have opposed materials, I product, historically. as for and recovery improved of copper mixed hedgeable not hedge example, for there'll which

hedged We we forward. non-ferrous the but haven't material, on opportunity an going that as see yet

one one the that's On plant. a as sell that's has again, We've one to the at we a that over that result so would challenge hedging the contract effectively with is traded side, face to for currently the traded at output begun corresponding done not far and hedgeable we traded with is against our just contract. that essentially actually we transition a a is ferrous index There plant prices, financial off-takers contract. time equivalent, hope have ferrous that

would So so absolutely baby going this hedge revenue forward. be our objective far. steps increasingly But to

Michael Hoffman

All right. Thank you very much.

Brad Helgeson

you. Thank

Operator

Brown The next Tyler go with Raymond from question ahead. Please James. is

Tyler Brown

Hey, good morning, guys.

Mike Ranger

Tyler. morning, Good

Tyler Brown

we remind CPI much to know flow considered to tip CPI tied expect But is all some XXXX. prints of how And do through book year. you higher in think this in us directly job see CPI? you nice XXXX? this should the then just those I pricing, can into kind fee maybe being the the on deck about if we muted through talked year, of Derek, I Hey, Hey. things

Derek Veenhof

I on into all, the compliment went of first the thanks Tyler Well, lot for that. tip of A fees. appreciate work that.

So inflation or of on the the of the year. indices our waste expect would the side, at a on escalation towards I end move the either mid-year lot

revenue of of the have whatever And the we form benefit tied is it exposed base some see answer CPI escalation, less contract within waste So when question that being yes, be see at is it contract, it in yes. revenue indices between $X is, of to roughly governed if your we would that the and fee to you revenue the about to overall would plants some a would being the fixed some by. you look then service XXXX, of muted, billion

Tyler Brown

Right.

movements. in Yes move would the with CPI, think. sympathy I So they'll

Mike Ranger

Yes.

Tyler Brown

that's And then you perfect. yes, mentioned Okay. –

You mentioned in growth X% to X% here tip fee XXXX.

core So over and how it do couple rebid next that of the much bigger to it versus, the call chunkier pricing of mix say call years have Northeast? volumes simply set in you any is

Mike Ranger

generally because always a major speaking snowstorm it's be absent the we So full, two. to plants going or keep mix,

it's So on going side. to be mix the always

I we're fiscal So last Again, committed we're – the We alignment. pretty XX% committed. for this over we've right on Tyler increased our year. committed now, contracted, think few years, merchant actually roughly have been heavily side the

more much flexibility results. stronger plants of lot contracted as So these what's We're repricing there's lot we've years repricing opportunities. not And exposure a to then, can lot wiggle of we're you a and because into and seeing that strongly be we a the be roll-off chase. choosy it more I go think lot at lot a and exposed we But on I what of pretty room back, got had we of markets our now, about our reality several if do nature disciplined, is, a contracts currently. in left stronger feel you're into

Tyler Brown

just Okay, that appreciate then simple EBITDA very more helpful. business was piece. in bridge. little But core And I Brad hoping color for the a

much the everything. and bit out some trying of strong costs core color insurance, is includes headwind it the figure costs Basically, little are to back, that's I'm basically which specifically gave but to of the So all a healthcare of how coming business and how – those that. I going think on call of you offsetting I'm comebacks,

Brad Helgeson

It's in Yes, three phenomenon. Covanta insurance, the not casualty it mentioned does. $XX benefits Medical what's mostly increase specific pretty Yes. can million our phenomenon. mean my in I is which a a I and by discretely experience are prepared for remarks property in point to about has that our our year-over-year. premiums the coverage forecast driven relatively guidance That's and a there, employees, assumed for market substantial which And the is so on it's then estimates cited, that $XX what point. by as higher there, actuarial well, this estimate happens other we'll based that's that at an and see specified savings to from just we’ve that put million close $XX cost calculated place as we to program describe last relatively We million that discrete in that the specific benefited cost year. that, reduction would total was I we in program.

of other where new office. pretty we've macro example some as not has to environment a Certainly maintained example reductions. back corporate it and retain tight the another hiring given was, the travel reasons grip on in will We for those gone cost

but some was by was definition it, most retain So of temporary that by design. we'll it of

vast have number that but the back. don't for million majority would of say $XX I come So, a I majority you, – should specific

Tyler Brown

some could And saves in lingering I XXXX. But well? Okay. be comebacks, as there's some there structural probably guess

Brad Helgeson

course reflects structure things our said what's the with the Absolutely. as today looking at thoughts. the of for right this Well. review is, nothing we're strategic course business talked And we've guidance evolves, regarding those Mike of one as business cost at of beginning, any so of the about and

Derek Veenhof

just And about cost moves I of on it to if think Services in going American step make a up plants if portfolio you're plus streamline change of have mean, definition a you Environmental XX follow having business, an business, some perspective the just you that. function a to North by from structure. to

time things So on. that an spending of enormous that's one of the we're amount

the what will way. the We're that's us operate on. very we in this you with the allow top-down you about trying essential, need, of to we're that figure in continue think bottom-up all advantageous out to we've had and want structures most not what's out to a it to cost but cost-effective come do from from integrity what and position what the If when working

more it. So the it's kind time, just but of board reductions little kind trying a that's taking than across that of without the why enforce from thought it's to behind better top,

Tyler Brown

my utility much a up. not That's creeping Mike, of so Okay. I'm one, just line this serving, last is I load squeeze then in, if one can And that helpful. guy, but keeps what basically

about quite it future? but a it about the that talked how into what drives call, just in think the what that, we basically and times You've do is few

Mike Ranger

used facility, stabilizing regard. so in a mean, which a It's I'll Derek force. that It's renewable, the really term, well. – use sustainable is it I load advance It's as base the unusual

And system. it's on-call able so to to support the be

if like because utility, to So so mean I solar that more we've be now public support more intermittent wind, for needs of a example the in where New Jersey, work, power policy power got stabilizing right it have levelized facilities we the system you operate, having the now. can't so as that some of like would and in levelized when and basically load ups against the downs get

all not volatile. were is to I that of many storm too you in could all correlated that mean, the Texas So system things each get into the but just to see was perfect other. – this, more

when that have way, operate not gas it's So you've different because prices. natural to going correlated very can not It's pipelines. something or constraints got this like it's have we to

going counter way on it's So are sensitive that things to to that a operate in is system. most those electric somewhat an

Tyler Brown

you. a I didn't go Appreciate Thank down it. helpful. very to rabbit want hole. That's Okay.

Operator

Jefferies. Please Next go question ahead. from Mario is Cortellacci with

Mario Cortellacci

Hi good morning.

strategic on Just the review.

for could buyer? this is guess maybe something is a be touched I the I give from bundling just a us and whether or on, considering sales the some or shopping even three of obviously offer you're right few you're assets, a if sense plant think if or a this particular two be you could you'd where separate but plants,

Mike Ranger

idea attractive discovery most the market All of what what of above to and is the market, figure that's and in it. configuration get could out the value for valuation differentials is kind can the we to the whole

is of in being So everything process you just pursued. is described the what

Mario Cortellacci

then still obviously the in And it. process. you're Got

you a less who you think like you I from Just had PE or this to thinking for like one selling best is way about potential other you the but something to And said, or would guess be guess, speculation, I buyers, municipalities? like strategic more like would that? a something more obviously, if are buyer expect perspective be to or do the

Mike Ranger

fits of infrastructure would the our pools Well, of lot it depends categories, pretty with so capital. nature of focused business well come And upon clearly in. private the assets our equity value fit a where

in strategics our there one of and So, alternative I clearly are line mean every that's business.

a we wouldn't pools But would some cost of our to advantage business the various capital So discount bring to want profile capital of that clearly that either. there's of segments.

Mario Cortellacci

it. Got

in just just year, that you lockdowns? guess you the guys and waste or then guys can me. do what thinking from last virus up more you then you the for there? restrictions terms are are in and And does waste, resurgence On negative of one imply XXXX that the Okay. QX that of driven think were and profiled get volume from more in I price And and more is X% you on profiled

Brad Helgeson

sure it's we numbers Mario, QX. Hey what up at down Yes. QX, I'm you're imply Brad. not looking were to

next which rate reconcile growth XX% we're can back can business been looking that. of looking maybe we've Again to in waste. far the we remember. growth that offline I had to So in has take help year, ahead as that to profiled X% But at

Mario Cortellacci

you. it. Got Thank

Operator

has conference now presentation. The session. concluded. question-and-answer our concludes This also today's for Thank you attending

disconnect. You may now

Covanta Holding (CVA) 19 Feb 212020 Q4 Earnings call transcript