JULY 22, 2010 - COVANTA HOLDING CORPORATION REPORTS SECOND QUARTER 2010 RESULTS; 2010 GUIDANCE REAFFIRMED

FAIRFIELD, NJ, July 22, 2010– Covanta Holding Corporation (NYSE:CVA) (“Covanta” or the “Company”) reported financial results today for the second quarter of 2010.

Anthony Orlando, President and CEO of Covanta noted that, “Our second quarter performance was right in line with our expectations and we have once again reaffirmed our guidance for 2010.  Our development pipeline continues to advance and we’ve now successfully completed the majority of our scheduled maintenance for the year, which positions us for a strong second half.   And, given our strong cash generation, we were pleased to issue a special dividend to shareholders earlier this week.”

For the three months ended June 30, 2010, consolidated operating revenues increased $59 million or 16% to $435 million, up from $376 million in the prior year comparative period. 

Revenues from the Americas segment increased $53 million or 16% to $383 million with $49 million of that related to the acquisition of new businesses.  The existing business benefitted primarily from higher recycled metal prices and increased construction revenue related to the Honolulu expansion project.   Those gains were largely offset by lower revenue relating to contract transitions.  Americas plant operating expenses increased by $43 million or 24% with $29 million of that increase attributable to the acquisition of new businesses.  Cost escalation and increased maintenance activities that reflect timing shifts within the year were the primary drivers of the increase in existing business plant operating expenses during the second quarter of 2010.

International segment revenue increased $6 million or 15% to $48 million in the second quarter, while plant operating expenses rose by $9 million or 29%.  The increase in both revenues and plant operating expenses resulted primarily from increased fuel costs at our Indian facilities. The remaining increase in plant operating expenses resulted primarily from higher fuel costs at our coal facility in China.

Adjusted EBITDA was $137 million or $3 million lower than the prior year comparative period.  The Veolia acquisition yielded a $20 million improvement and increased recycled metal prices added $8 million to the existing business.  However, these gains were offset by a $13 million decline related to contract transitions at our Hempstead, Union and Detroit facilities. Adjusted EBITDA was also reduced by increased scheduled maintenance activities which were largely due to timing.

Free Cash Flow was $74 million in the second quarter, comparable to the prior year comparative period.

Covanta reported earnings per diluted share of $0.17 for the second quarter of 2010, compared to $0.21 per diluted share for the second quarter of 2009.  Virtually all of the reduction related to non-cash items, including expenses related to the special dividend, interest expense and a higher book tax rate due to the sunset of production tax credits.

2010 Guidance

The Company reaffirmed its guidance for the following key metrics:

- Free Cash Flow of $300 million to $340 million;
- Adjusted EBITDA of $520 million to $560 million; and
- Diluted earnings per share of $0.55 to $0.75.

Conference Call Information

Covanta will host a conference call at 8:30 am (Eastern) on Friday, July 23, 2010 to discuss its results for the three months ended June 30, 2010.  To participate, please dial 877-806-3982 approximately 10 minutes prior to the scheduled start of the call.  If you are calling from outside of the United States, please dial 702-928-7062. Please utilize conference ID number 84494781 when prompted by the conference call operator.   The conference call will also be web cast live on the Investor Relations section of the Covanta website atwww.covantaholding.com.

A replay of the conference call will be available from 11:30 am (Eastern) Friday, July 23, 2010 through midnight (Eastern) Friday, July 30, 2010. To access the replay, please dial 800-642-1687, or from outside of the United States 706-645-9291 and use the replay conference ID number 84494781. The webcast will also be archived onwww.covantaholding.com.

About Covanta

Covanta Holding Corporation (NYSE:CVA), is an internationally recognized owner and operator of large-scale Energy-from-Waste and renewable energy projects and a recipient of the Energy Innovator Award from the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy.  Covanta's 45 Energy-from-Waste facilities provide communities with an environmentally sound solution to their solid waste disposal needs by using that municipal solid waste to generate clean, renewable energy. Annually, Covanta's modern Energy-from-Waste facilities safely and securely convert approximately 20 million tons of waste into more than 9 million megawatt hours of clean renewable electricity and create 10 billion pounds of steam that are sold to a variety of industries. For more information, visitwww.covantaholding.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission (“SEC”), all as may be amended from time to time.  Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Covanta and its subsidiaries, or general industry or broader economic performance in global markets in which Covanta operates or competes, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Statements that are not historical fact are forward-looking statements.  Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words "plan," "believe," "expect," "anticipate," "intend," "estimate," "project," "may," "will," "would," "could," "should," "seeks," or "scheduled to," or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions.  These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws.  Covanta cautions investors that any forward-looking statements made by Covanta are not guarantees or indicative of future performance.  Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Covanta, include, but are not limited to, the risk that Covanta may not successfully close its announced or planned acquisitions or projects in development and those factors, risks and uncertainties that are described in periodic securities filings by Covanta with the SEC.  Although Covanta believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements.  Covanta's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and Covanta does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law. 

Contacts

Marisa F. Jacobs, Esq.
Vice President, Investor Relations and Corporate Communications
1-973-882-4196

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