☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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95-6021257
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(State or Other Jurisdiction of
Incorporation or Organization)
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|
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(I.R.S. Employer
Identification Number)
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|
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445 South Street
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Morristown,
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NJ
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07960
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(Address of Principal Executive Office)
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|
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(Zip Code)
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Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
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Common Stock, $0.10 par value per share
|
CVA
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New York Stock Exchange
|
Large Accelerated Filer
|
Accelerated
filer
|
Non-accelerated
filer
|
Smaller reporting
company
|
Emerging growth
company
|
þ
|
o
|
o
|
☐
|
☐
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|
|
(Do not check if a smaller reporting company)
|
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|
Class
|
|
Outstanding at July 24, 2020
|
Common Stock, $0.10 par value
|
|
131,982,149
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|
|
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Page
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OTHER
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|
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Three Months Ended June 30,
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|
Six Months Ended June 30,
|
||||||||||||
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|
2020
|
|
2019
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|
2020
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|
2019
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||||||||
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||||||||
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(Unaudited)
(In millions, except per share amounts) |
||||||||||||||
OPERATING REVENUE:
|
|
|
|
|
|
|
|
|
||||||||
Waste and service revenue
|
|
$
|
344
|
|
|
$
|
359
|
|
|
$
|
690
|
|
|
$
|
686
|
|
Energy revenue
|
|
78
|
|
|
72
|
|
|
171
|
|
|
166
|
|
||||
Recycled metals revenue
|
|
20
|
|
|
21
|
|
|
37
|
|
|
42
|
|
||||
Other operating revenue
|
|
12
|
|
|
15
|
|
|
24
|
|
|
26
|
|
||||
Total operating revenue
|
|
454
|
|
|
467
|
|
|
922
|
|
|
920
|
|
||||
OPERATING EXPENSE:
|
|
|
|
|
|
|
|
|
||||||||
Plant operating expense
|
|
340
|
|
|
354
|
|
|
701
|
|
|
713
|
|
||||
Other operating expense, net
|
|
14
|
|
|
16
|
|
|
26
|
|
|
33
|
|
||||
General and administrative expense
|
|
26
|
|
|
31
|
|
|
56
|
|
|
61
|
|
||||
Depreciation and amortization expense
|
|
56
|
|
|
55
|
|
|
114
|
|
|
110
|
|
||||
Impairment charges
|
|
—
|
|
|
1
|
|
|
19
|
|
|
1
|
|
||||
Total operating expense
|
|
436
|
|
|
457
|
|
|
916
|
|
|
918
|
|
||||
Operating income
|
|
18
|
|
|
10
|
|
|
6
|
|
|
2
|
|
||||
OTHER (EXPENSE) INCOME:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
(34
|
)
|
|
(36
|
)
|
|
(68
|
)
|
|
(72
|
)
|
||||
Net (loss) gain on sale of business and investments
|
|
—
|
|
|
(2
|
)
|
|
9
|
|
|
48
|
|
||||
Other (expense) income, net
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
2
|
|
||||
Total expense
|
|
(35
|
)
|
|
(37
|
)
|
|
(61
|
)
|
|
(22
|
)
|
||||
Loss before income tax benefit and equity in net income from unconsolidated investments
|
|
(17
|
)
|
|
(27
|
)
|
|
(55
|
)
|
|
(20
|
)
|
||||
Income tax benefit
|
|
4
|
|
|
3
|
|
|
9
|
|
|
1
|
|
||||
Equity in net income from unconsolidated investments
|
|
—
|
|
|
3
|
|
|
1
|
|
|
3
|
|
||||
Net loss
|
|
$
|
(13
|
)
|
|
$
|
(21
|
)
|
|
$
|
(45
|
)
|
|
$
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
132
|
|
|
131
|
|
|
132
|
|
|
131
|
|
||||
Diluted
|
|
132
|
|
|
131
|
|
|
132
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|
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131
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||||
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||||||||
Loss Per Share:
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|
||||||||
Basic
|
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$
|
(0.10
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.12
|
)
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Cash Dividend Declared Per Share
|
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$
|
0.08
|
|
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.50
|
|
|
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
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(Unaudited, in millions)
|
||||||||||||||
Net loss
|
|
$
|
(13
|
)
|
|
$
|
(21
|
)
|
|
$
|
(45
|
)
|
|
$
|
(16
|
)
|
Foreign currency translation
|
|
6
|
|
|
3
|
|
|
—
|
|
|
(2
|
)
|
||||
Pension and postretirement plan unrecognized benefits
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net unrealized (loss) gain on derivative instruments, net of tax (benefit) expense of ($2), $2, ($2) and $5, respectively
|
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(11
|
)
|
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6
|
|
|
(15
|
)
|
|
6
|
|
||||
Other comprehensive (loss) income
|
|
(6
|
)
|
|
9
|
|
|
(16
|
)
|
|
4
|
|
||||
Comprehensive loss
|
|
$
|
(19
|
)
|
|
$
|
(12
|
)
|
|
$
|
(61
|
)
|
|
$
|
(12
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
|
(Unaudited, in millions)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(45
|
)
|
|
$
|
(16
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
114
|
|
|
110
|
|
||
Amortization of deferred debt financing costs
|
2
|
|
|
2
|
|
||
Net gain on sale of business and investments
|
(9
|
)
|
|
(48
|
)
|
||
Impairment charges
|
19
|
|
|
1
|
|
||
Stock-based compensation expense
|
14
|
|
|
15
|
|
||
Provision for expected credit losses
|
1
|
|
|
2
|
|
||
Equity in net income from unconsolidated investments
|
(1
|
)
|
|
(3
|
)
|
||
Deferred income taxes
|
(9
|
)
|
|
(4
|
)
|
||
Dividends from unconsolidated investments
|
3
|
|
|
5
|
|
||
Other, net
|
3
|
|
|
3
|
|
||
Change in working capital, net of effects of acquisitions and dispositions
|
62
|
|
|
18
|
|
||
Changes in noncurrent assets and liabilities, net
|
1
|
|
|
2
|
|
||
Net cash provided by operating activities
|
155
|
|
|
87
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Purchase of property, plant and equipment
|
(79
|
)
|
|
(93
|
)
|
||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
2
|
|
||
Proceeds from the sale of assets, net of restricted cash
|
3
|
|
|
26
|
|
||
Investment in equity affiliate
|
(10
|
)
|
|
(8
|
)
|
||
Other, net
|
(8
|
)
|
|
(1
|
)
|
||
Net cash used in investing activities
|
(94
|
)
|
|
(74
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from borrowings on long-term debt
|
9
|
|
|
14
|
|
||
Proceeds from borrowings on revolving credit facility
|
256
|
|
|
359
|
|
||
Payments on long-term debt
|
(9
|
)
|
|
(8
|
)
|
||
Payments on revolving credit facility
|
(237
|
)
|
|
(248
|
)
|
||
Payments on project debt
|
(5
|
)
|
|
(13
|
)
|
||
Cash dividends paid to stockholders
|
(68
|
)
|
|
(68
|
)
|
||
Proceeds from related party note
|
9
|
|
|
—
|
|
||
Payment of insurance premium financing
|
(16
|
)
|
|
(14
|
)
|
||
Other, net
|
(5
|
)
|
|
(8
|
)
|
||
Net cash (used in) provided by financing activities
|
(66
|
)
|
|
14
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(1
|
)
|
|
—
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(6
|
)
|
|
27
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
63
|
|
|
105
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
57
|
|
|
$
|
132
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
39
|
|
|
$
|
102
|
|
Restricted funds held in trust- short term
|
10
|
|
|
22
|
|
||
Restricted funds held in trust- long term
|
8
|
|
|
8
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
57
|
|
|
$
|
132
|
|
|
|
|
|
Total
|
||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Earnings (Deficit)
|
|
Treasury Stock
|
|
|||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
(Unaudited, in millions)
|
||||||||||||||||||||||||||||
Balance as of December 31, 2019
|
|
136
|
|
|
$
|
14
|
|
|
$
|
857
|
|
|
$
|
(35
|
)
|
|
$
|
(460
|
)
|
|
5
|
|
|
$
|
—
|
|
|
$
|
376
|
|
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||
Shares repurchased for tax withholdings for vested stock awards
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
||||||
Comprehensive loss, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||
Balance as of March 31, 2020
|
|
136
|
|
|
$
|
14
|
|
|
$
|
860
|
|
|
$
|
(45
|
)
|
|
$
|
(526
|
)
|
|
4
|
|
|
$
|
—
|
|
|
$
|
303
|
|
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Comprehensive loss, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
||||||
Balance as of June 30, 2020
|
|
136
|
|
|
$
|
14
|
|
|
$
|
867
|
|
|
$
|
(51
|
)
|
|
$
|
(550
|
)
|
|
4
|
|
|
$
|
—
|
|
|
$
|
280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance as of December 31, 2018
|
|
136
|
|
|
$
|
14
|
|
|
$
|
841
|
|
|
$
|
(33
|
)
|
|
$
|
(334
|
)
|
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
487
|
|
Cumulative effect change in accounting for ASU 2018-02
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||
Shares repurchased for tax withholdings for vested stock awards
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Comprehensive (loss) income, net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of March 31, 2019
|
|
136
|
|
|
$
|
14
|
|
|
$
|
841
|
|
|
$
|
(37
|
)
|
|
$
|
(364
|
)
|
|
5
|
|
|
$
|
—
|
|
|
$
|
454
|
|
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Comprehensive income (loss), net of income taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Balance as of June 30, 2019
|
|
136
|
|
|
$
|
14
|
|
|
$
|
848
|
|
|
$
|
(28
|
)
|
|
$
|
(418
|
)
|
|
5
|
|
|
$
|
—
|
|
|
$
|
416
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Basic weighted average common shares outstanding
|
|
132
|
|
|
131
|
|
|
132
|
|
|
131
|
|
Dilutive effect of stock options, restricted stock and restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted weighted average common shares outstanding
|
|
132
|
|
|
131
|
|
|
132
|
|
|
131
|
|
Anti-dilutive stock options, restricted stock and restricted stock units excluded from the calculation of EPS
|
|
4
|
|
|
2
|
|
|
3
|
|
|
2
|
|
|
|
Foreign Currency Translation
|
|
Pension and Other Postretirement Plan Unrecognized Net Gain
|
|
Net Unrealized (Loss) Gain On Derivatives
|
|
Total
|
||||||||
Balance at December 31, 2018
|
|
$
|
(23
|
)
|
|
$
|
2
|
|
|
$
|
(12
|
)
|
|
$
|
(33
|
)
|
Cumulative effect change in accounting for ASU 2018-02
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Balance at January 1, 2019
|
|
(23
|
)
|
|
3
|
|
|
(12
|
)
|
|
(32
|
)
|
||||
Other comprehensive (loss) income
|
|
(2
|
)
|
|
—
|
|
|
6
|
|
|
4
|
|
||||
Balance at June 30, 2019
|
|
$
|
(25
|
)
|
|
$
|
3
|
|
|
$
|
(6
|
)
|
|
$
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2019
|
|
$
|
(30
|
)
|
|
$
|
3
|
|
|
$
|
(8
|
)
|
|
$
|
(35
|
)
|
Other comprehensive loss
|
|
—
|
|
|
(1
|
)
|
|
(15
|
)
|
|
(16
|
)
|
||||
Balance at June 30, 2020
|
|
$
|
(30
|
)
|
|
$
|
2
|
|
|
$
|
(23
|
)
|
|
$
|
(51
|
)
|
1.
|
The performance obligation is part of a contract that has an original expected duration of one year or less;
|
2.
|
Revenue is recognized from the satisfaction of the performance obligations in the amount billable to our customer that corresponds directly with the value to the customer of our performance completed to date (i.e. “right-to-invoice” practical expedient); and/or
|
3.
|
The variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service or a series of distinct services that are substantially the same and that have the same pattern of transfer to our customer (i.e. “series practical expedient”).
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Unbilled receivables
|
|
$
|
20
|
|
|
$
|
16
|
|
Deferred revenue
|
|
$
|
15
|
|
|
$
|
18
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Share based compensation expense
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
15
|
|
|
|
As of June 30, 2020
|
||||
|
|
Unrecognized
stock-
based
compensation
|
|
Weighted-average years
to be recognized
|
||
Restricted stock units
|
|
$
|
16
|
|
|
1.6
|
Performance awards
|
|
$
|
9
|
|
|
2.0
|
Restricted stock awards
|
|
$
|
—
|
|
|
0.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Pass through costs
|
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
23
|
|
|
$
|
25
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Accounts receivable sold and derecognized
|
$
|
373
|
|
|
$
|
—
|
|
Cash proceeds received (1)
|
$
|
372
|
|
|
$
|
—
|
|
|
|
|
|
||||
|
June 30,
2020 |
|
December 31,
2019 |
||||
Pledged receivables (2)
|
$
|
121
|
|
|
$
|
142
|
|
(1)
|
Represents proceeds from collections reinvested in revolving-period transfers, net of discount. This amount was included in Net cash provided by operating activities on our consolidated statement of cash flows.
|
(2)
|
Secures our obligations under the RPA and provides a guarantee for the prompt payment, not collection, of all payment obligations relating to the sold receivables.
|
Balance as of December 31, 2019
|
|
$
|
9
|
|
Provision for expected credit losses
|
|
1
|
|
|
Write-offs charged against the allowance
|
|
(4
|
)
|
|
Balance as of June 30, 2020
|
|
$
|
6
|
|
|
|
June 30,
2020 |
|
December 31, 2019
|
||||
Included in prepaid expenses and other assets
|
|
$
|
21
|
|
|
$
|
22
|
|
Included in other assets - long term
|
|
25
|
|
|
15
|
|
||
|
|
$
|
46
|
|
|
$
|
37
|
|
•
|
For marketable securities, the carrying value of these amounts is a reasonable estimate of their fair value.
|
•
|
Fair values for long-term debt and project debt are determined using quoted market prices (Level 1).
|
•
|
The fair value of our floating to fixed rate interest rate swaps is determined using discounted cash flow valuation methodologies that apply the appropriate forward floating rate curve observable in the market to the contractual terms of our swap agreements. The fair value of the interest rate swaps is adjusted to reflect counterparty risk of non-performance and is based on the counterparty’s credit spread in the credit derivatives market.
|
•
|
The fair values of our energy hedges were determined using the spread between our fixed price and the forward curve information available within the market.
|
Financial Instruments Recorded at Fair Value on a Recurring Basis:
|
|
Fair Value Measurement Level
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Assets:
|
|
|
|
|
|
|
||||
Investments — mutual and bond funds (1)
|
|
1
|
|
$
|
2
|
|
|
$
|
2
|
|
Derivative asset — energy hedges (2)
|
|
2
|
|
13
|
|
|
12
|
|
||
Total assets
|
|
|
|
$
|
15
|
|
|
$
|
14
|
|
Liabilities:
|
|
|
|
|
|
|
||||
Derivative liability — interest rate swaps (3)
|
|
2
|
|
$
|
11
|
|
|
$
|
2
|
|
Total liabilities
|
|
|
|
$
|
11
|
|
|
$
|
2
|
|
(1)
|
Included in Other assets in the condensed consolidated balance sheets.
|
(2)
|
The short-term balance was included in Prepaid expenses and other current assets and the long-term balance was included in Other assets in the consolidated balance sheets.
|
(3)
|
The short-term balance was included in Accrued expenses and other current liabilities and the long-term balance was included in Other liabilities in the condensed consolidated balance sheets.
|
|
|
As of June 30, 2020
|
|
As of December 31, 2019
|
||||||||||||
Financial Instruments Recorded at Carrying Amount:
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
|
$
|
2,405
|
|
|
$
|
2,414
|
|
|
$
|
2,383
|
|
|
$
|
2,459
|
|
Project debt
|
|
$
|
128
|
|
|
$
|
134
|
|
|
$
|
133
|
|
|
$
|
138
|
|
|
Average
Rate (1)
|
|
June 30,
2020 |
|
December 31, 2019
|
||||
LONG-TERM DEBT:
|
|
|
|
|
|
||||
Revolving credit facility
|
2.95%
|
|
$
|
202
|
|
|
$
|
183
|
|
Term loan, net
|
3.38%
|
|
379
|
|
|
384
|
|
||
Credit Facilities subtotal
|
|
|
581
|
|
|
567
|
|
||
Senior Notes, net of deferred financing costs
|
|
|
1,187
|
|
|
1,186
|
|
||
Tax-Exempt Bonds, net of deferred financing costs
|
|
|
540
|
|
|
539
|
|
||
China venture loan
|
|
|
9
|
|
|
—
|
|
||
Equipment financing arrangements
|
|
|
81
|
|
|
85
|
|
||
Finance Leases (2)
|
|
|
7
|
|
|
6
|
|
||
Total long-term debt
|
|
|
2,405
|
|
|
2,383
|
|
||
Less: Current portion
|
|
|
(18
|
)
|
|
(17
|
)
|
||
Noncurrent long-term debt
|
|
|
$
|
2,387
|
|
|
$
|
2,366
|
|
|
|
|
|
|
|
||||
PROJECT DEBT:
|
|
|
|
|
|
||||
Total project debt, net of deferred financing costs and unamortized debt premium
|
|
|
$
|
128
|
|
|
$
|
133
|
|
Less: Current portion
|
|
|
(9
|
)
|
|
(8
|
)
|
||
Noncurrent project debt
|
|
|
$
|
119
|
|
|
$
|
125
|
|
|
|
|
|
|
|
||||
TOTAL CONSOLIDATED DEBT
|
|
|
$
|
2,533
|
|
|
$
|
2,516
|
|
Less: Current debt
|
|
|
(27
|
)
|
|
(25
|
)
|
||
TOTAL NONCURRENT CONSOLIDATED DEBT
|
|
|
$
|
2,506
|
|
|
$
|
2,491
|
|
(1)
|
As of June 30, 2020 and December 31, 2019, we entered into interest rate swap agreements to swap the LIBOR portion of our floating interest rate to a fixed rate for our variable rate debt under the Credit Facilities. See Note 12. Derivative Instruments for further information.
|
(2)
|
Excludes Union County WtE facility finance lease which is presented within project debt.
|
|
Total Facility Commitment
|
|
Expiring
|
|
Direct Borrowings
|
|
Outstanding Letters of Credit
|
|
Unutilized Capacity
|
||||||||
Revolving Credit Facility
|
$
|
900
|
|
|
2023
|
|
$
|
202
|
|
|
$
|
236
|
|
|
$
|
462
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Finance lease:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of assets, included in Depreciation and amortization expense
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest on lease liabilities, included in Interest expense
|
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Operating lease:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of assets, included in Total operating expense
|
|
2
|
|
|
2
|
|
|
4
|
|
|
4
|
|
||||
Interest on lease liabilities, included in Total operating expense
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total net lease cost
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Operating leases:
|
|
|
|
|
||||
Operating lease ROU assets, included in Other assets
|
|
$
|
46
|
|
|
$
|
46
|
|
|
|
|
|
|
||||
Current operating lease liabilities, included in Accrued expenses and other current liabilities
|
|
$
|
6
|
|
|
$
|
6
|
|
Noncurrent operating lease liabilities, included in Other liabilities
|
|
46
|
|
|
46
|
|
||
Total operating lease liabilities
|
|
$
|
52
|
|
|
$
|
52
|
|
|
|
|
|
|
||||
Finance leases:
|
|
|
|
|
||||
Property and equipment, at cost
|
|
$
|
170
|
|
|
$
|
168
|
|
Accumulated amortization
|
|
(29
|
)
|
|
(25
|
)
|
||
Property and equipment, net
|
|
$
|
141
|
|
|
$
|
143
|
|
|
|
|
|
|
||||
Current obligations of finance leases, included in Current portion of long-term debt
|
|
$
|
7
|
|
|
$
|
6
|
|
Finance leases, net of current obligations, included in Long-term debt
|
|
81
|
|
|
84
|
|
||
Total finance lease liabilities
|
|
$
|
88
|
|
|
$
|
90
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||
Operating cash flows related to operating leases
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
Financing cash flows related to finance leases
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
|
|
|
|
||||
Weighted average remaining lease term (in years):
|
|
|
|
|
||||
Operating leases
|
|
11.4
|
|
|
12.8
|
|
||
Finance leases
|
|
31.5
|
|
|
33.7
|
|
||
|
|
|
|
|
||||
Weighted average discount rate:
|
|
|
|
|
||||
Operating leases
|
|
4.59
|
%
|
|
4.66
|
%
|
||
Finance leases
|
|
5.06
|
%
|
|
5.06
|
%
|
|
June 30, 2020
|
||||||
|
Operating Leases
|
|
Finance Leases
|
||||
Remainder of 2020
|
$
|
5
|
|
|
$
|
5
|
|
2021
|
9
|
|
|
12
|
|
||
2022
|
8
|
|
|
12
|
|
||
2023
|
7
|
|
|
12
|
|
||
2024
|
6
|
|
|
11
|
|
||
2025 and thereafter
|
33
|
|
|
105
|
|
||
Total lease payments
|
68
|
|
|
157
|
|
||
Less: Amounts representing interest
|
(16
|
)
|
|
(69
|
)
|
||
Total lease obligations
|
$
|
52
|
|
|
$
|
88
|
|
Letters of credit issued under the Revolving Credit Facility
|
|
$
|
236
|
|
Letters of credit - other
|
|
38
|
|
|
Surety bonds
|
|
129
|
|
|
Total other commitments — net
|
|
$
|
403
|
|
•
|
Eliminating all non-essential travel and reducing discretionary spend;
|
•
|
Enacting a hiring freeze for new corporate employees;
|
•
|
Lowering compensation through a 50% reduction in payment of CEO's base salary amount, a 25% reduction in payment of executive leadership base salary amounts, and a 20% reduction in cash compensation for all corporate support employees through a combination of wage reductions and furloughs. These measures remained place through mid-July 2020;
|
•
|
Lowering the cash portion of board of directors' fees by 60% during the same time period as management reductions and furloughs;
|
•
|
Focusing growth investments for the remainder of 2020 primarily on UK projects and the start-up of our first Total Ash Processing System and remaining highly disciplined in making any additional discretionary investments; and
|
•
|
Lowering the annualized dividend payout to $0.32 per share.
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Consumer Price Index (1)
|
|
0.6
|
%
|
|
1.6
|
%
|
||
PJM Pricing (Electricity) (2)
|
|
$
|
15.69
|
|
|
$
|
21.76
|
|
NE ISO Pricing (Electricity) (3)
|
|
$
|
18.23
|
|
|
$
|
24.42
|
|
Henry Hub Pricing (Natural Gas) (4)
|
|
$
|
1.71
|
|
|
$
|
2.56
|
|
#1 HMS Pricing (Ferrous Metals) (5)
|
|
$
|
208
|
|
|
$
|
271
|
|
Old Sheet & Old Cast (Non-Ferrous Metals) (6)
|
|
$
|
0.37
|
|
|
$
|
0.45
|
|
(1)
|
Represents the year-over-year percent change in the Headline CPI number. The Consumer Price Index (CPI-U) data is provided by the U.S. Department of Labor Bureau of Labor Statistics.
|
(2)
|
Average price per MWh for Q2 2020 and Q2 2019. Pricing for the PJM PSEG Zone is provided by the PJM ISO.
|
(3)
|
Average price per MWh for Q2 2020 and Q2 2019. Pricing for the Mass Hub Zone is provided by the NE ISO.
|
(4)
|
Average price per MMBtu for Q2 2020 and Q2 2019. The Henry Hub Pricing data is provided by the Natural Gas Weekly Update, U.S. Energy Information Administration.
|
(5)
|
Average price per gross ton for Q2 2020 and Q2 2019. The #1 Heavy Melt Steel ("HMS") composite index ($/gross ton) price as published by American Metal Market.
|
(6)
|
Average price per pound for Q2 2020 and Q2 2019. Calculated using the high price of Old Cast Aluminum Scrap ($/lb.) as published by American Metal Market.
|
•
|
$9 million for growth investments, including $8 million in our UK business development projects.
|
•
|
In February 2020, we reached financial close on the Newhurst project, a 350,000 metric ton-per-year, 42 megawatt WtE facility under construction in Leicestershire, England. The facility is expected to commence commercial operations in 2023.
|
•
|
“Organic growth”: reflects the performance of the business on a comparable period-over-period basis, excluding the impacts of transactions and contract transitions.
|
•
|
“Transactions”: includes the impacts of acquisitions, divestitures, and the addition or loss of operating contracts.
|
•
|
Contract “transitions”: includes the impact of the expiration of: (a) long-term major waste and service contracts, most typically representing the transition to a new contract structure, and (b) long-term energy contracts.
|
|
Three Months Ended June 30,
|
|
Variance
Increase (Decrease) |
||||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
OPERATING REVENUE:
|
|
|
|
|
|
||||||
Waste and service revenue
|
$
|
344
|
|
|
$
|
359
|
|
|
$
|
(15
|
)
|
Energy revenue
|
78
|
|
|
72
|
|
|
6
|
|
|||
Recycled metals revenue
|
20
|
|
|
21
|
|
|
(1
|
)
|
|||
Other operating revenue
|
12
|
|
|
15
|
|
|
(3
|
)
|
|||
Total operating revenue
|
454
|
|
|
467
|
|
|
(13
|
)
|
|||
OPERATING EXPENSE:
|
|
|
|
|
|
||||||
Plant operating expense
|
340
|
|
|
354
|
|
|
(14
|
)
|
|||
Other operating expense, net
|
14
|
|
|
16
|
|
|
(2
|
)
|
|||
General and administrative expense
|
26
|
|
|
31
|
|
|
(5
|
)
|
|||
Depreciation and amortization expense
|
56
|
|
|
55
|
|
|
1
|
|
|||
Impairment charges
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||
Total operating expense
|
436
|
|
|
457
|
|
|
(21
|
)
|
|||
Operating income
|
$
|
18
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease) |
||||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
OPERATING REVENUE:
|
|
|
|
|
|
||||||
Waste and service revenue
|
$
|
690
|
|
|
$
|
686
|
|
|
$
|
4
|
|
Energy revenue
|
171
|
|
|
166
|
|
|
5
|
|
|||
Recycled metals revenue
|
37
|
|
|
42
|
|
|
(5
|
)
|
|||
Other operating revenue
|
24
|
|
|
26
|
|
|
(2
|
)
|
|||
Total operating revenue
|
922
|
|
|
920
|
|
|
2
|
|
|||
OPERATING EXPENSE:
|
|
|
|
|
|
||||||
Plant operating expense
|
701
|
|
|
713
|
|
|
(12
|
)
|
|||
Other operating expense, net
|
26
|
|
|
33
|
|
|
(7
|
)
|
|||
General and administrative expense
|
56
|
|
|
61
|
|
|
(5
|
)
|
|||
Depreciation and amortization expense
|
114
|
|
|
110
|
|
|
4
|
|
|||
Impairment charges
|
19
|
|
|
1
|
|
|
18
|
|
|||
Total operating expense
|
916
|
|
|
918
|
|
|
(2
|
)
|
|||
Operating income
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
4
|
|
In millions:
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease) |
||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Three Months
|
|
Six Months
|
||||||||||||
WtE tip fees
|
$
|
158
|
|
|
$
|
162
|
|
|
$
|
319
|
|
|
$
|
310
|
|
|
$
|
(4
|
)
|
|
$
|
9
|
|
WtE service fees
|
114
|
|
|
116
|
|
|
232
|
|
|
233
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Environmental services
|
31
|
|
|
37
|
|
|
65
|
|
|
69
|
|
|
(6
|
)
|
|
(4
|
)
|
||||||
Municipal services
|
60
|
|
|
62
|
|
|
114
|
|
|
110
|
|
|
(2
|
)
|
|
4
|
|
||||||
Other revenue
|
10
|
|
|
10
|
|
|
18
|
|
|
16
|
|
|
—
|
|
|
2
|
|
||||||
Intercompany
|
(28
|
)
|
|
(28
|
)
|
|
(57
|
)
|
|
(54
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Total waste and service revenue
|
$
|
344
|
|
|
$
|
359
|
|
|
$
|
690
|
|
|
$
|
686
|
|
|
$
|
(15
|
)
|
|
$
|
4
|
|
WtE facilities - Tons (1)
(in millions):
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease) |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Three Months
|
|
Six Months
|
||||||
Tip fee - contracted
|
2.2
|
|
|
2.3
|
|
|
4.2
|
|
|
4.3
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Tip fee - uncontracted
|
0.5
|
|
|
0.4
|
|
|
1.1
|
|
|
1.0
|
|
|
0.1
|
|
|
0.1
|
|
Service fee
|
2.5
|
|
|
2.7
|
|
|
5.2
|
|
|
5.3
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
Total tons
|
5.2
|
|
|
5.4
|
|
|
10.5
|
|
|
10.6
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
Three Months Ended June 30,
|
|
Variance
Increase (Decrease) |
|||||||||||||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
|
Revenue (2)
|
|
Volume (2) (3)
|
|
Revenue (2)
|
|
Volume (2) (3)
|
|
Revenue
|
|
Volume
|
|||||||||
Energy Sales
|
$
|
57
|
|
|
|
|
$
|
58
|
|
|
|
|
$
|
(1
|
)
|
|
|
|||
Capacity
|
10
|
|
|
|
|
12
|
|
|
|
|
(2
|
)
|
|
|
|
|||||
Other Revenue (1)
|
11
|
|
|
|
|
2
|
|
|
|
|
9
|
|
|
|
||||||
Total energy
|
$
|
78
|
|
|
1.5
|
|
|
$
|
72
|
|
|
1.6
|
|
|
$
|
6
|
|
|
—
|
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease) |
|||||||||||||||||
|
2020
|
|
2019
|
|
2020 vs 2019
|
|||||||||||||||
|
Revenue (2)
|
|
Volume (2) (3)
|
|
Revenue (2)
|
|
Volume (2) (3)
|
|
Revenue
|
|
Volume
|
|||||||||
Energy Sales
|
$
|
134
|
|
|
|
|
$
|
139
|
|
|
|
|
$
|
(5
|
)
|
|
|
|||
Capacity
|
20
|
|
|
|
|
25
|
|
|
|
|
(5
|
)
|
|
|
||||||
Other Revenue (1)
|
17
|
|
|
|
|
2
|
|
|
|
|
15
|
|
|
|
||||||
Total energy
|
$
|
171
|
|
|
3.2
|
|
|
$
|
166
|
|
|
3.1
|
|
|
$
|
5
|
|
|
—
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
Metal Revenue
(in millions)
|
|
Tons Recovered
(in thousands) |
|
Tons Sold
(in thousands) (1) |
||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Ferrous Metal
|
$
|
10
|
|
|
$
|
13
|
|
|
116
|
|
|
111
|
|
|
99
|
|
|
95
|
|
Non-Ferrous Metal
|
9
|
|
|
8
|
|
|
12
|
|
|
12
|
|
|
8
|
|
|
7
|
|
||
Total
|
$
|
20
|
|
|
$
|
21
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
Metal Revenue
(in millions)
|
|
Tons Recovered
(in thousands) |
|
Tons Sold
(in thousands) (1) |
||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Ferrous Metal
|
$
|
21
|
|
|
$
|
24
|
|
|
219
|
|
|
207
|
|
|
190
|
|
|
179
|
|
Non-Ferrous Metal
|
16
|
|
|
18
|
|
|
24
|
|
|
25
|
|
|
16
|
|
|
15
|
|
||
Total
|
$
|
37
|
|
|
$
|
42
|
|
|
|
|
|
|
|
|
|
In millions:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease)
|
||||||||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Three Months
|
|
Six Months
|
||||||||||||
Plant maintenance (1)
|
|
$
|
81
|
|
|
$
|
83
|
|
|
$
|
172
|
|
|
$
|
178
|
|
|
$
|
(2
|
)
|
|
$
|
(6
|
)
|
All other
|
|
259
|
|
|
272
|
|
|
528
|
|
|
535
|
|
|
(13
|
)
|
|
(7
|
)
|
||||||
Plant operating expense
|
|
$
|
340
|
|
|
$
|
354
|
|
|
$
|
701
|
|
|
$
|
713
|
|
|
$
|
(14
|
)
|
|
$
|
(12
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease) |
||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Interest expense
|
$
|
(34
|
)
|
|
$
|
(36
|
)
|
|
$
|
(68
|
)
|
|
$
|
(72
|
)
|
|
$
|
2
|
|
|
$
|
4
|
|
Net (loss) gain on sale of business and investments
|
—
|
|
|
(2
|
)
|
|
9
|
|
|
48
|
|
|
2
|
|
|
(39
|
)
|
||||||
Other (expense) income, net
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
2
|
|
|
(2
|
)
|
|
(4
|
)
|
||||||
Total expense
|
$
|
(35
|
)
|
|
$
|
(37
|
)
|
|
$
|
(61
|
)
|
|
$
|
(22
|
)
|
|
$
|
2
|
|
|
$
|
(39
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance
Increase (Decrease)
|
||||||||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Three Months
|
|
Six Months
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except percentages)
|
||||||||||||||||||||||
Income tax benefit
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
8
|
|
Effective income tax rate
|
23
|
%
|
|
13
|
%
|
|
16
|
%
|
|
7
|
%
|
|
N/A
|
|
|
N/A
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Unaudited)
|
||||||||||||||
Net loss
|
|
$
|
(13
|
)
|
|
$
|
(21
|
)
|
|
$
|
(45
|
)
|
|
$
|
(16
|
)
|
Depreciation and amortization expense
|
|
56
|
|
|
55
|
|
|
114
|
|
|
110
|
|
||||
Interest expense
|
|
34
|
|
|
36
|
|
|
68
|
|
|
72
|
|
||||
Income tax benefit
|
|
(4
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(1
|
)
|
||||
Impairment charges (a)
|
|
—
|
|
|
1
|
|
|
19
|
|
|
1
|
|
||||
Net loss (gain) on sale of businesses and investments (b)
|
|
—
|
|
|
2
|
|
|
(9
|
)
|
|
(48
|
)
|
||||
Loss on asset sales
|
|
2
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Accretion expense
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Business development and transaction costs
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Severance and reorganization costs (c)
|
|
1
|
|
|
1
|
|
|
1
|
|
|
8
|
|
||||
Stock-based compensation expense
|
|
6
|
|
|
7
|
|
|
14
|
|
|
15
|
|
||||
Adjustments to reflect Adjusted EBITDA from unconsolidated investments
|
|
6
|
|
|
6
|
|
|
12
|
|
|
12
|
|
||||
Capital type expenditures at client owned facilities (d)
|
|
5
|
|
|
7
|
|
|
19
|
|
|
20
|
|
||||
Other (e)
|
|
3
|
|
|
1
|
|
|
6
|
|
|
1
|
|
||||
Adjusted EBITDA
|
|
$
|
96
|
|
|
$
|
94
|
|
|
$
|
193
|
|
|
$
|
178
|
|
(a)
|
During the six months ended June 30, 2020, we recorded a $19 million non-cash impairment charge related to our CES reporting unit. For additional information see Item 1. Financial Statements —Note 3. New Business and Asset Management.
|
(b)
|
During the six months ended June 30, 2020, we recorded a $9 million gain related to the Newhurst Energy Recovery Facility development project. For additional information see Item 1. Financial Statements —Note 3. New Business and Asset Management.
|
(c)
|
During the six months ended June 30, 2019, we recorded $8 million of costs related to our ongoing asset rationalization and portfolio optimization efforts, early retirement program, and certain organizational restructuring activities
|
(d)
|
Adjustment for capital equipment related expenditures at our service fee operated facilities which are capitalized at facilities that we own.
|
(e)
|
Includes certain other items that are added back under the definition of Adjusted EBITDA in Covanta Energy, LLC's credit agreement.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net cash provided by operating activities
|
|
$
|
94
|
|
|
$
|
50
|
|
|
$
|
155
|
|
|
$
|
87
|
|
Capital type expenditures at client owned facilities (a)
|
|
5
|
|
|
7
|
|
|
19
|
|
|
20
|
|
||||
Cash paid for interest
|
|
9
|
|
|
12
|
|
|
48
|
|
|
59
|
|
||||
Cash paid for taxes, net
|
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
||||
Equity in net income from unconsolidated investments
|
|
—
|
|
|
3
|
|
|
1
|
|
|
3
|
|
||||
Adjustments to reflect Adjusted EBITDA from unconsolidated investments
|
|
6
|
|
|
6
|
|
|
12
|
|
|
12
|
|
||||
Dividends from unconsolidated investments
|
|
(3
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||
Adjustment for working capital and other
|
|
(15
|
)
|
|
18
|
|
|
(40
|
)
|
|
(2
|
)
|
||||
Adjusted EBITDA
|
|
$
|
96
|
|
|
$
|
94
|
|
|
$
|
193
|
|
|
$
|
178
|
|
|
|
Total Project Debt
|
|
Percentage Ownership
|
|
Proportionate Unconsolidated Project Debt
|
|
Project Stage
|
||||
Dublin WtE (Ireland) (1)
|
|
$
|
434
|
|
|
50%
|
|
$
|
217
|
|
|
Operational
|
Earls Gate (UK) (2)
|
|
49
|
|
|
25%
|
|
12
|
|
|
Under construction
|
||
Rookery (UK) (3)
|
|
145
|
|
|
40%
|
|
58
|
|
|
Under construction
|
||
Zhao County WtE (China)(4)
|
|
—
|
|
|
26%
|
|
—
|
|
|
Under construction
|
||
Newhurst (UK)(5)
|
|
59
|
|
|
25%
|
|
15
|
|
|
Under construction
|
||
Total
|
|
$
|
687
|
|
|
|
|
$
|
302
|
|
|
|
(1)
|
We have a 50% indirect ownership of Dublin WtE, through our 50/50 joint venture with GIG, Covanta Europe Assets Ltd.
|
(2)
|
We have a 25% indirect ownership of Earls Gate, through our 50/50 joint venture with GIG, Covanta Green Jersey Assets Ltd., which owns 50% of Earls Gate. The total estimated project cost is £210 million ($277 million); £147 million ($194 million) is financed through non-recourse project-based debt.
|
(3)
|
We have a 40% indirect ownership of Rookery through our 50/50 joint venture with GIG, Covanta Green UK Ltd. The total estimated project cost is £457 million ($603 million); £310 million ($409 million) is financed through non-recourse project-based debt.
|
(4)
|
We have 26% interest in Zhao County through our venture with Longking Energy Development Co. Ltd. The total estimated project cost is RMB 650 million ($93 million), RMB 455 million ($65 million) is financed through non-recourse project debt.
|
(5)
|
We have a 25% indirect ownership of Newhurst through our 50/50 joint venture with GIG, Covanta Green, The total estimated project cost is £341 million ($422 million); £251 million ($311 million) of which is financed through non-recourse project-based debt.
|
•
|
Hired information technology managers for all previously vacant positions and assigned these individuals specific internal control ownership and oversight;
|
•
|
Trained all information technology employees on information technology general controls and policies;
|
•
|
Centralized the formerly disparate processes to manage and control user accounts within our financial reporting systems;
|
•
|
Trained information technology managers on the process for providing, modifying and terminating application access;
|
•
|
Implemented monitoring procedures to ensure that the management of user accounts is performed in compliance with internal control requirements;
|
•
|
Initiated the design of an enhanced process to periodically reassess the propriety of users’ access to our financial reporting systems;
|
•
|
Designed and implemented change management and access management controls for financially relevant applications;
|
•
|
Trained business application owners on information technology change management procedures and controls; and
|
•
|
Documented and communicated with business application owners information technology change management procedures.
|
•
|
Moving all applications to Single Sign On (SSO) so as to better control termination of access;
|
•
|
Developing enhanced risk assessment procedures related to changes in the information technology systems environment; and
|
•
|
Developing new and enhancing existing logging and reporting capabilities so that changes to applications can be recorded and monitored for propriety.
|
Exhibit
Number
|
|
Description
|
Articles of Incorporation and By-Laws.
|
||
|
||
|
||
|
|
|
Other.
|
|
|
|
||
|
||
|
||
Exhibit 101.INS:
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
Exhibit 101.SCH:
|
|
XBRL Taxonomy Extension Schema
|
Exhibit 101.CAL:
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
Exhibit 101.DEF:
|
|
XBRL Taxonomy Extension Definition Linkbase
|
Exhibit 101.LAB:
|
|
XBRL Taxonomy Extension Labels Linkbase
|
Exhibit 101.PRE:
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
104
|
|
Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)
|
|
COVANTA HOLDING CORPORATION
(Registrant)
|
|
|
|
|
|
By:
|
/S/ BRADFORD J. HELGESON
|
|
|
Bradford J. Helgeson
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
By:
|
/S/ JOSEPH J. SCHANTZ II
|
|
|
Joseph J. Schantz II
|
|
|
Vice President and Chief Accounting Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Covanta Holding Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/S/ STEPHEN J. JONES
|
|
Stephen J. Jones
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Covanta Holding Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/S/ BRADFORD J. HELGESON
|
|
Bradford J. Helgeson
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Covanta Holding Corporation;
|
|
|
|
/S/ STEPHEN J. JONES
|
|
Stephen J. Jones
|
|
President and Chief Executive Officer
|
|
|
|
/S/ BRADFORD J. HELGESON
|
|
Bradford J. Helgeson
|
|
Executive Vice President and Chief Financial Officer
|
|
|