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(f) For additional information, see Exhibit 7A - Note (a) of this Press Release. Calculated as follows:Redemption of Term Loan due 2014 $ -- $ -- $ (619) $ --Redemption of Convertible Debentures (g) -- -- (2) (32) -------- -------- ------- -------Total optional repayment of corporate debt $ -- $ -- $ (621) $ (32) ======== ======== ======= =======(g) As of December 31, 2011, there were $25 million aggregate principal amount of the Debentures outstanding. On February 1, 2012, holders of $23 million of outstanding Debentures exercised their option for us to redeem the Debentures at par. The Debentures were also subject to redemption at our option at any time on or after February 1, 2012, and we subsequently redeemed the remaining $2 million of outstanding Debentures on March 23, 2012.(h) Calculated as follows:Total optional principal payments on project debt $ (278) $ -- $ (278) $ --Decrease in related restricted funds held in trust 40 -- 40 -- ------- -------- ------- --------Net cash used for optional repayment of project debt $ (238) $ -- $ (238) $ -- ======= ======== ======= ======== Exhibit 7Covanta Holding CorporationCapitalization Information As of December 31, ------------------------- 2012 2011 ------------ ------------ (Unaudited, in millions)Cash and Cash Equivalents:Domestic $ 12 $ 49International 215 174Insurance Subsidiary 19 9 ------------ ------------Total Cash and Cash Equivalents $ 246 $ 232 ============ ============Restricted Funds Held in Trust: (a)(b) Debt Service - Principal $ 72 $ 113 Debt Service - Interest 6 8 ------------ ------------Debt Service Funds - Total 78 121Revenue Funds 9 16Other Funds 127 54 ------------ ------------Total Restricted Funds Held in Trust $ 214 $ 191 ============ ============(a) Restricted funds held in trust are primarily amounts received by third- party trustees relating to certain projects we own which may be used only for specified purposes. We generally do not control these accounts. They primarily include debt service reserves for payment of principal and interest on project debt. Revenue funds are comprised of deposits of revenues received with respect to projects prior to their disbursement. Other funds are primarily amounts held in trust for operations, maintenance, environmental obligations, operating lease reserves in accordance with agreements with our clients and amounts held for future scheduled distributions.(b) During the three months ended December 31, 2012, we completed a Project Debt Refinancing. For additional information, see Exhibit 7A - Note (a) of this Press Release. Exhibit 7A As of December 31, As of December 31, 2012 2011 --------------------- --------------------- Face Book Face Book Value Value Value Value ---------- ---------- ---------- ---------- (Unaudited, in millions)Corporate Debt:Revolving Credit Facility (a) $ 60 $ 60 $ -- $ --Term Loan due 2014 (a) -- -- 619 619New Term Loan due 2019 (a) 298 297 -- --7.25% Senior Notes due 2020 400 400 400 4006.375% Senior Notes due 2022 (a) 400 400 -- --3.25% Cash Convertible Senior Notes due 2014 460 523 460 4421.00% Senior Convertible Debentures due 2027 (b) -- -- 25 25 ---------- ---------- ---------- ----------Sub-total $ 1,618 $ 1,680 $ 1,504 $ 1,486 ---------- ---------- ---------- ----------Tax-Exempt Bonds (a) 4.875% Massachusetts Series 2012A due 2027 $ 20 $ 20 $ -- $ -- 4.875% Massachusetts Series 2012B due 2042 67 67 -- -- 5.25% Massachusetts Series 2012C due 2042 83 83 -- -- 5.25% Niagara Series 2012A due 2042 130 130 -- -- 4.00% Niagara Series 2012B due 2024 35 35 -- -- ---------- ---------- ---------- ----------Sub-total Tax-Exempt Bonds $ 335 $ 335 $ -- $ -- ---------- ---------- ---------- ----------Total corporate debt (including current portion) $ 1,953 $ 2,015 $ 1,504 $ 1,486 ---------- ---------- ---------- ----------Project Debt:Domestic project debt - service fee facilities (a) $ 223 $ 226 $ 291 $ 295Domestic project debt - tip fee facilities (a) 68 68 355 359International project debt 23 23 26 26 ---------- ---------- ---------- ----------Total project debt (including current portion) $ 314 $ 317 $ 672 $ 680 ---------- ---------- ---------- ----------Total Debt Outstanding $ 2,267 $ 2,332 $ 2,176 $ 2,166 ========== ========== ========== ==========Net Debt (c) $ 1,949 $ 1,831 ========== ==========Availability for Borrowings under the Revolving Credit Facility (a) $ 584 $ 300 ========== ==========(a) During the first quarter of 2012, we completed a refinancing of our previously existing senior secured credit facilities, issued by our subsidiary, Covanta Energy, which consisted of a $300 million revolving credit facility, a $320 million funded letter of credit facility and a $619 million term loan, by entering into $1.2 billion in new senior secured credit facilities (the "2012 Credit Facilities") issued by our subsidiary, Covanta Energy, comprised of a $900 million revolving credit facility that expires in 2017 (the "Revolving Credit Facility") and a $300 million term loan due 2019 (the "Term Loan"), and by issuing $400 million aggregate principal amount of 6.375% senior notes due 2022 (the "6.375% Notes"). The proceeds from the Term Loan and a portion of the proceeds from the 6.375% Notes were used to repay the previously existing term loan, as well as to pay transaction expenses, while the Revolving Credit Facility replaced the previously existing $300 million revolving credit facility and $320 million funded letter of credit facility. The Revolving Credit Facility is available for both the issuance of letters of credit ($256 million outstanding as of December 31, 2012) and for cash borrowings for general corporate purposes ($60 million outstanding cash borrowings as of December 31, 2012). As a result of the refinancing, we recognized a loss on extinguishment of debt of approximately $2 million, pre-tax, which was comprised of the write-off of deferred financing costs in connection with previously existing financing arrangements. We incurred $26 million in offering costs related to the refinancing which has been paid as of December 31, 2012. In November 2012, we issued new tax-exempt corporate bonds totaling $335 million. Proceeds from the offerings were utilized to refinance tax- exempt project debt at our Haverhill, Niagara and SEMASS facilities, as well as to fund certain capital expenditures in Massachusetts. As a result of the refinancing, we recognized a loss on extinguishment of debt of approximately $1 million, pre-tax, which was primarily comprised of the write-off of financing costs in connection with this transaction, offset by the write-off of unamortized premiums on previously existing financing arrangements. We incurred $7 million in offering costs related to the refinancing which has been paid as of December 31, 2012. Corporate Project Debt DebtDebt Refinancing Details (Unaudited, in millions) Refinancing Refinancing ----------- -----------Offering - 6.375% Senior Notes due 2022 $ 400 $ --New Term Loan due 2019 300 --New Tax-Exempt Bonds -- 335Release of financing restricted funds -- 40Offering Costs (26) (7) ----------- -----------Net Proceeds 674 368Redemption of Term Loan due 2014 (619) --Redemption of Project Debt -- (328) ----------- -----------Net Offering funds available for general corporate purposes $ 55 $ 40 =========== ===========(b) As a result of the purchase of outstanding Debentures, we recorded a loss on extinguishment of debt which is comprised of the difference between the fair value and carrying value of the liability component of the Debentures tendered, the write-off of deferred financing costs and fees incurred in conjunction with the tender offer.(c) Net Debt is calculated as total principal amount of debt outstanding less cash and cash equivalents and debt service principal restricted funds. Exhibit 8Covanta Holding CorporationReturn to Stockholders(Unaudited, in millions, except per share amounts and percentages)During years ended December 31, 2010, 2011 and 2012, the following amountswere returned to stockholders: Weighted % of Common Average Stock Shares Cost Per Outstanding Amount Repurchased Share Repurchased -------- ----------- ---------- ------------Common Stock Repurchased(a)FY 2010 $ 95 6.1 $ 15.56 3.9% -------- -----------FY 2011 $ 230 14.4 $ 15.99 9.6% -------- -----------Q1 2012 $ 30 1.8 $ 16.45 1.3%Q2 2012 30 1.9 $ 16.04 1.4%Q3 2012 25 1.5 $ 17.22 1.1%Q4 2012 3 0.1 $ 17.41 0.1% -------- -----------FY 2012 sub-total: $ 88 5.3 $ 16.55 3.9% -------- -----------Total Common Stock Repurchased $ 413 25.8 $ 16.00 16.7% -------- -----------Cash Dividends Declared to StockholdersFY 2010 $ 233 --------FY 2011 $ 42 --------Q1 2012 $ 21Q2 2012 20Q3 2012 20Q4 2012 (b) 20 --------FY 2012 sub-total: $ 81 --------Total Cash Dividends Declared to Stockholders $ 356 -------- --------Total Return to Stockholders $ 769 ========(a) As of December 31, 2012, the amount remaining under our currently authorized share repurchase program was $87 million.(b) On November 27, 2012, the Board of Directors authorized a quarterly cash dividend of $0.15 per share. The Q4 2012 payment was made on December 26, 2012 to stockholders of record as of the close of business on December 18, 2012. Exhibit 9Covanta Holding CorporationConsolidated Reconciliation of Cash Flow Provided by Operating Activities to Adjusted EBITDA Three Months Twelve Months Ended Ended December 31, December 31, ---------------- ---------------- Full Year 2012 2011 2012 2011 Estimated 2013 ------- ------- ------- ------- ---------------- (Unaudited, in millions)Cash flow provided by operating activities from continuing operations $ 74 $ 84 $ 342 $ 360 $325 - $360Cash flow used in operating activities from insurance activities (a) (1) 2 (5) (2) 5 - 10Debt service 37 29 145 122 171 - 155Change in working capital 79 72 27 (5)Change in restricted funds held in trust (44) (39) (34) (4)Non-cash convertible debt related expense (6) (5) (25) (25)Equity in net income from unconsolidated investments -- 2 10 5Dividends from unconsolidated investments (1) (3) (8) (8)Current tax provision 4 18 11 (2)Reversal of uncertain tax positions related to pre-emergence tax matters (b) -- -- -- 24Contractual liability to pre-petition creditors(b) -- (15) -- (15)Change in restricted funds-other related to contractual liability to pre-petition creditors (b) -- -- -- (5)Other 1 2 29 49 ------- ------- ------- ------- ---------------- Sub-total 33 32 10 14 (1) - 5 ------- ------- ------- ------- ----------------Adjusted EBITDA $ 143 $ 147 $ 492 $ 494 $500 - $530 ======= ======= ======= ======= ================(a) For additional information, see Exhibit 4A - Note (a) of this Press Release.(b) For additional information, see Exhibit 4A - Note (i) of this Press Release. Exhibit 10Covanta Holding CorporationPlant Operating Expenses Detail - AmericasThe Americas segment quarterly plant operating expenses typically differssubstantially as a result of the timing of scheduled plant maintenance. Wetypically conduct scheduled maintenance periodically each year, whichrequires that individual boiler units temporarily cease operations. Duringthese scheduled maintenance periods, we incur material repair andmaintenance expenses and receive less revenue until the boiler and/orturbine units resume operations. This scheduled maintenance typically occursduring periods of off-peak electric demand and/or lower waste volumes, whichare our first, second and fourth fiscal quarters. The first half of the yearscheduled maintenance period is typically the most extensive. The thirdquarter scheduled maintenance period is typically the least extensive. Giventhese factors, we typically experience our lowest operating income from ourprojects during the first half of each year. The aggregate of all othercomponents of plant operating expense is relatively consistent each quarterof the year. Three Months Ended Twelve Months Ended December 31, December 31, --------------------- --------------------- 2012 2011 2012 2011 ---------- ---------- ---------- ---------- (Unaudited, in millions)Plant Operating Expenses:Plant maintenance (a) $ 47 $ 44 $ 226 $ 231All other 172 171 705 703 ---------- ---------- ---------- ----------Plant operating expenses $ 219 $ 215 $ 931 $ 934 ========== ========== ========== ==========(a) Plant maintenance costs include our internal maintenance team and non- facility employee costs for facility scheduled and unscheduled maintenance and repair expenses. Exhibit 11ACovanta Holding Corporation - Americas SegmentStatistics - (Unaudited, in millions, except percentages)Boiler Availability Twelve Months Ended December 31, ------------------------- 2012 2011 ------------ ------------EfW Facilities 92.3% 91.7%Waste and Service Revenue Twelve Months Ended December 31, ------------------------- 2012 2011 ------------ ------------Waste and service revenue unrelated to project debt $ 961 $ 953Revenue earned explicitly to service project debt - principal 39 42Revenue earned explicitly to service project debt - interest 8 11 ------------ ------------Total waste and service revenue $ 1,008 $ 1,006 ============ ============
