The following MD&A is intended to help the reader understand the results of
operations and financial condition of Covanta for the three and nine months
ended September 30, 2021. The financial information as of September 30, 2021
should be read in conjunction with the financial statements for the year ended
December 31, 2020 contained in our 2020 Annual Report on Form 10-K.

Factors Affecting Business Conditions and Financial Results

Impact of novel coronavirus ("COVID-19") on the United States and the global economy



The COVID-19 pandemic has impacted our employees, our operations, our business
and the economy. While we have experienced a normalization in commercial
activity and general business conditions, the extent of potential impacts from
COVID-19 in the future remains uncertain. We cannot predict the potential future
impact of the COVID-19 pandemic with new variants of the virus circulating and
it could materially and adversely affect our business, financial condition and
results of operations in the future.

While a limited number of our employees have contracted COVID-19, we have
followed recommended protocols and have thus far not experienced material
disruptions to our operations as result of workforce availability issues.
Depending upon the rate, extent, and location of future COVID-19 infection, more
widespread infection of our employees could cause significant increases to
operating expenses at specific facilities, or the curtailment of operations at
such facilities on a temporary basis.

Our WtE plants and material processing facilities provide a vital service to our
municipal and commercial clients. As waste disposal facilities, they have been
recognized as part of Critical Infrastructure by the Department of Homeland
Security and as essential services by state and local governments. Residential
waste represents the substantial majority of our contracted volumes, and there
has been limited impact on these volumes to date. We also process commercial
waste, including profiled waste, at many facilities, and while overall volumes
of these materials for disposal in the market fell during the early stages of
the pandemic, volumes have generally returned to pre-pandemic levels, and our
average revenue per ton levels have returned as well.

As the COVID-19 pandemic is ongoing with new variants and the near term
worldwide economic outlook remains uncertain, we cannot reasonably estimate the
length or severity of this pandemic, or the extent to which the disruption may
materially impact our consolidated financial statements.

Commodity Markets - Our quarterly results within an operating year may be affected substantially by movements in commodity markets relevant to our business, principally those relating to energy and metals.



Energy Markets - A portion of our energy revenue is sold under short term
arrangements at prevailing market prices. Underlying market prices are affected
by a variety of factors not within our control such as weather, natural gas
supply/demand conditions (including seasonal storage), regional electricity
transmission and system conditions, and global demand. We maintain a disciplined
program to hedge our exposure to market price volatility, see Item 1. Financial
Statements - Note 11. Derivative Instruments. As a result of our hedging
program, we have only a limited amount of exposure to market price volatility in
the near term, including for the remainder of 2021.

Metals Markets - We sell recycled ferrous and non-ferrous metals under short
term arrangements based on prevailing rates that are affected by regional and
global demand for specific types of recycled metals. In addition, recycled metal
prices for both ferrous and non-ferrous materials are potentially impacted,
directly and indirectly, by tariff and trade actions both by the U.S. as well as
foreign countries.

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The following are various published pricing indices relating to the U.S.
economic drivers that are relevant to those aspects of our business where we
have market exposure; however, there is not an exact correlation between our
results and changes in these metrics.

September 30, September 30,


                                                                         2021                  2020
Consumer Price Index (1)                                                       5.4%                  1.4%
PJM Pricing (Electricity) (2)                                       $      37.18          $      18.77
NE ISO Pricing (Electricity) (3)                                    $      44.88          $      22.68
Henry Hub Pricing (Natural Gas) (4)                                 $       4.36          $       2.00
#1 HMS Pricing (Ferrous Metals) (5)                                 $        438          $        221
Old Sheet & Old Cast (Non-Ferrous Metals) (6)                       $

0.69 $ 0.39




(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 megawatt hours ("MWh") for Q3 2021 and Q3 2020. Pricing for
the PJM PSEG Zone is provided by the PJM ISO.
(3)Average price per MWh for Q3 2021 and Q3 2020. Pricing for the Mass Hub Zone
is provided by the NE ISO.
(4)Average price per MMBtu for Q3 2021 and Q3 2020. The Henry Hub Pricing data
is provided by the Natural Gas Weekly Update, Energy Information Administration,
Washington DC.
(5)Average price per gross ton for Q3 2021 and Q3 2020. The #1 Heavy Melt Steel
("HMS") composite index ($/gross ton) price as published by American Metal
Market.
(6)Average price per pound for Q3 2021 and Q3 2020. Calculated using the high
price of Old Cast Aluminum Scrap ($/lb.) as published by American Metal Market.

Seasonal - Our quarterly operating results within the same fiscal year typically
differ substantially due to seasonal factors, primarily as a result of the
timing of scheduled plant maintenance. We conduct scheduled maintenance
periodically each year, which requires that individual boiler and/or turbine
units temporarily cease operations. During these scheduled maintenance periods,
we incur material repair and maintenance expense and receive less revenue until
the boiler and/or turbine units resume operations. This scheduled maintenance
usually occurs during periods of off-peak electric demand and/or lower waste
volumes, which are our first, second and fourth fiscal quarters. The scheduled
maintenance period in the first half of the year (primarily first quarter and
early second quarter) is typically the most extensive, while the third quarter
scheduled maintenance period is the least extensive. Given these factors, we
normally experience our lowest operating income from our projects during the
first half of each year.

Our operating results may also be affected by seasonal weather extremes during
summers and winters. Increased demand for electricity and natural gas during
unusually hot or cold periods may affect certain operating expenses and may
trigger material price increases for a portion of the electricity and steam we
sell.

Completion of Strategic Review



In October 2020, we announced the launch of a comprehensive strategic review of
our assets, operations, growth priorities, and capital structure. This review
was an opportunity to explore all options to enhance stockholder value,
including assessing plans for each of our business lines and geographies. The
board of directors appointed Michael Ranger as President and Chief Executive
Officer to lead this review and its subsequent execution.

On July 14, 2021, we announced that we had entered into a definitive agreement
with EQT Infrastructure whereby EQT will acquire all shares of Covanta common
stock for $20.25 per share. The Merger is subject to customary government
approvals and is expected to close in the fourth quarter of this year. Covanta
obtained the required approval of its stockholders at a special meeting of
stockholders held on October 12, 2021. The agreement resulted from a competitive
sale process and is not subject to a financing condition. This Merger represents
the conclusion of the strategic review.

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CONSOLIDATED RESULTS OF OPERATIONS

The following general discussions should be read in conjunction with the condensed consolidated financial statements, the notes to the condensed consolidated financial statements and other financial information appearing and referred to elsewhere in this report.



The comparability of the information provided below with respect to our revenue,
expense and certain other items for the periods presented was affected by
several factors. As outlined in Item 1. Financial Statements - Note 1.
Organization and Basis of Presentation in this quarterly report on Form 10-Q and
in Item 8. Financial Statements And Supplementary Data - Note 1. Organization
and Summary of Significant Accounting Policies and Note 3. New Business and
Asset Management of our 2020 Annual Report on Form 10-K, our business
development initiatives, contract transitions, and acquisitions resulted in
various transactions, which are reflected in comparative revenue and expense.

Certain reclassifications of the prior years' amounts have been made to conform
to the current year's presentation. The change in presentation did not affect
our total operating revenue, total operating expense or operating loss. For
further information on the reclassifications, see Item 1. Financial Statements -
Note 1. Organization and Basis of Presentation. In addition, comparability of
our results was affected by the COVID-19 pandemic as discussed above under
Impact of COVID-19 on the U.S. and the global economy. These factors must be
taken into account in developing meaningful comparisons between the periods
compared below.

As discussed in Item 8. Financial Statements And Supplementary Data - Note 1.
Organization and Summary of Significant Accounting Policies of our 2020 Annual
Report on Form 10-K, we have one reportable segment which comprises our entire
operating business.

The following terms used within the Results of Operations discussion are defined as follows:



•"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 contracts, most typically representing the transition to a new
contract structure, and (b) long-term energy contracts.

Certain amounts in our Consolidated Results of Operations may not total due to rounding.


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