Covanta Announces 20-Year Agreement with New York City Department of Sanitation for Sustainable Solid Waste Disposal
Significant Long-Term Contract Will Reduce Greenhouse Gases and Generate Clean Energy- from-Waste
Morristown, NJ – August 26, 2013—Covanta (NYSE: CVA), a world leader in sustainable waste management and renewable energy, announced today a new 20-year agreement with New York City Department of Sanitation to transport and sustainably dispose of municipal solid waste (“MSW”) delivered to a pair of marine transfer stations located in Queens and Manhattan. Covanta is the largest owner and operator of Energy-from-Waste (“EfW”) facilities in North America and plans to utilize capacity at existing facilities to convert the City’s MSW into clean energy. It is anticipated New York City will deliver approximately 800,000 tons of MSW per year which reflects the City’s continued efforts to reduce waste generation and increase recycling.
“New York City is a leader in addressing climate change which makes us particularly proud that they chose Covanta and our Energy-from-Waste solution to help achieve one of their important sustainability goals,” said Anthony Orlando, Covanta president and chief executive officer. “This contract is also important to Covanta because it will provide a significant and stable base of revenue, further enhancing our already predictable business model.”
The agreement is for 20 years of service and it provides New York City with options for two additional five-year periods. It calls for waste to be transported via sealed containers using a multi-modal approach including barges and railcars which will significantly reduce long-haul truck transportation of MSW. Service for the Queens marine transfer station is expected to begin in early 2015, with service to the Manhattan marine transfer station to follow in 2016 when construction work is expected to be completed by New York City. To fulfill its obligations under this agreement, Covanta must purchase equipment, including barges, railcars, containers and intermodal equipment. Covanta expects its total investment to purchase this equipment will be approximately $110 million. This investment will be made over several years beginning in 2013.
The decision to utilize Energy-from-Waste facilities marks a major milestone in reaching the City’s goal of diverting 75 percent of solid waste from landfills. Recovering energy and metal from post-recycled waste at EfW facilities provides communities like New York City with an environmentally superior alternative to landfilling. According to the US EPA, for every ton of MSW processed at Energy-from-Waste facilities, greenhouse gas emissions are reduced by the equivalent of approximately one ton of carbon dioxide emissions. This is possible due to the avoidance of methane from landfills, the offset of greenhouse gases from fossil fuel electrical production and the recovery of metals for recycling.
Covanta is a world leader in sustainable waste management and renewable energy. The Company’s 45 Energy-from-Waste facilities provide communities and businesses around the world with an environmentally sound solution to their solid waste disposal needs by using 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 clean, renewable electricity to power one million homes and recycle over 430,000 tons of metal. Energy-from-Waste facilities reduce greenhouse gases, complement recycling and are a critical component to sustainable solid waste management. For more information, visit www.covantaenergy.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 Holding Corporation and its subsidiaries (“Covanta”) or industry results, 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 factors, risks and uncertainties that could cause actual results to differ materially from those forward-looking statements with respect to Covanta include, but are not limited to: fluctuations in the prices of energy, waste disposal, scrap metal and commodities; adoption of new laws and regulations in the United States and abroad; the fee structures of our contracts; difficulties in the operation of our facilities, including fuel supply and energy transfer interruptions, failure to obtain regulatory approvals, equipment failures, labor disputes and work stoppages, weather interference and catastrophic events; difficulties in the financing, development and construction of new projects and expansions, including increased construction costs and delays; limits of insurance coverage; our ability to avoid defaults under our long-term service contracts; performance of third parties under our contractual arrangements; concentration of suppliers and customers; increased competitiveness in the energy industry; changes in foreign currency exchange rates; limitations imposed by our existing indebtedness; exposure to counterparty credit risk and instability of financial institutions in connection with financing transactions; our ability to utilize our net operating losses; failures of disclosure controls and procedures; general economic conditions in the United States and abroad, including the availability of credit and debt financing and market conditions at the time our contracts expire; and other risks and uncertainties affecting our businesses described in Item 1A. Risk Factors of our Annual Report on Form 10-K and in other 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 of its 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.