JULY 2009

Covanta’s first quarter declines with lower energy and commodity prices

Covanta Holding Corporation reported financial results for the three months ended March 31, 2009. Diluted earnings per share were $0.01 in the first quarter of 2009 compared to $0.09 in the first quarter of 2008.

For the three months ended March 31, 2009, operating revenues were $359 million, an 8 percent decline from $389 million in the prior year comparable period, with domestic revenue falling $10 million and international revenue falling $21 million.

Domestic waste and service revenues declined by $11 million. Excluding lower recycled metal revenue ($6 million) and debt service revenue ($4 million), domestic waste and service revenues were essentially flat with contract escalations nearly offsetting lower market prices for merchant waste.

Domestic electricity revenue was up $10 million driven by business acquisitions and contract transitions offset somewhat by slightly lower overall electricity pricing. Most of the domestic energy revenue remains under long-term contract, but a few of these contracts will end later this year causing a gradual increase in the Company’s energy market exposure.

Domestic operating expenses were up $17 million in the quarter; $12 million of the increase came from acquisitions the Company completed in 2008.

International segment revenue decreased 34 percent or $21 million in the quarter while plant operating expenses declined by $20 million. Both of these declines relate primarily to the Company’s Indian facilities, where falling fuel prices reduced the pass through component of our revenues and also lowered our expenses. Foreign exchange impacts also reduced revenues while benefiting plant operating expenses.