The ratings on Covanta Holding Corp. reflect an "aggressive" financial risk profile marked by high debt balances, a capital-intensive business, and increased use of free cash flow to pay for dividends and share repurchases. We view Covanta's business risk profile as "satisfactory", reflecting steady cash distributions from operating assets that are mostly contracted with highly creditworthy municipal and county governments, good operations history, with average boiler availability of about 90%, well above the typical contractual requirement of 85% and the waste business' generally favorable risk characteristics. Covanta owns and operates large energy-from-waste (EFW) and renewable energy projects. It is the largest EFW operator in North America, with 41 EFW facilities with a concentration in the U.S. Northeast. It also has
