Fourth Quarter Results
Operating revenues of $430 million were flat with the prior year period. Significant factors included the positive impacts of:
•Organic growth initiatives in special waste, recycled metals and other; and •Escalations in service fee contracts.
Negative impacts were:
•Hurricane Sandy as certain facilities were briefly forced off-line; •Lower revenues earned explicitly to service project debt; •Lower recycled metals pricing; and •Lower revenues from our insurance business.
Excluding the items noted above, operating expenses were $351 million in 2012 compared to $345 million for 2011, an increase of $6 million. Benefits from various operational improvements were more than offset by the negative impact of Hurricane Sandy and normal cost escalations.
Excluding the items noted above and the net operating income effects of Hurricane Sandy, operating income was $88 million for the year ended December 31, 2012, or an increase of $3 million compared to the prior year period.
Adjusted EBITDA declined $4 million to $143 million in 2012, primarily due to the negative impact of Hurricane Sandy, lower recycled metals pricing, lower alternative fuel tax credits, partially offset by the benefits of organic growth initiatives.
Free Cash Flow of $57 million in 2012 declined $6 million versus 2011 primarily due to higher interest expense, which was partially offset by the timing of other working capital.
Adjusted EPS of $0.20 declined by $0.07 from the prior year period due to a higher effective tax rate, increased interest expense and the negative impact of Hurricane Sandy. These declines were partially offset by a lower number of shares outstanding due to the Company's common stock buyback program.
2013 Guidance
The Company is establishing guidance for 2013 for the following key metrics:
(In millions, except per share amounts)
---------------------------------------------------------------------------- 2012 2013Metric Actual Guidance Range % Change At Midpoint----------------------------------------------------------------------------Adjusted EBITDA $ 492 $ 500 - $ 530 +5%----------------------------------------------------------------------------Free Cash Flow $ 262 $ 250 - $ 280 +1%----------------------------------------------------------------------------Adjusted EPS $ 0.52 $ 0.40 - $ 0.50 -13%----------------------------------------------------------------------------
Conference Call Information
Covanta will host a conference call at 8:30 am (Eastern) on Thursday, February 7, 2013 to discuss its fourth quarter results. The conference call will begin with prepared remarks, which will be followed by a question and answer session. To participate, please dial 800-860-2442 approximately 10 minutes prior to the scheduled start of the call. If calling from Canada, please dial 866-605-3852. If calling outside of the United States and Canada, please dial 412-858-4600. Please request the "Covanta Holding Corporation call" when prompted by the conference call operator. The conference call will also be webcast live from the Investor Relations section of the Company's website. A presentation will be made available during the call and will be found on the Investor Relations section of the Covanta website at www.covantaenergy.com.
