OCTOBER 24, 2007 - COVANTA HOLDING CORPORATION REPORTS 2007 THIRD QUARTER RESULTS REAFFIRMS 2007 GUIDANCE

FAIRFIELD, NJ, October 24, 2007 – Covanta Holding Corporation (NYSE:CVA) (“Covanta” or the “Company”) reported financial results today for the three months ended September 30, 2007. Diluted earnings per share grew 19 percent to $0.25 in the third quarter of 2007, which included a net benefit of $0.01 per diluted share from net insurance recoveries relating to a fire at the Company’s SEMASS facility which occurred in the first quarter of 2007. These results compare to diluted earnings per share of $0.21 in the prior year comparative period.

Third Quarter Results
For the three months ended September 30, 2007 total Company operating revenues grew 13 percent to $352 million, up from $311 million in the prior year comparative period.

The Company’s domestic segment’s operating revenues grew by 12 percent to $312 million, driven primarily by construction revenues related to the Hillsborough County facility expansion, revenue from four facilities added to the Company’s portfolio this year, and contractual service fee escalation. International revenues of $37 million grew by 32 percent primarily due to higher electricity sales at two facilities located in India.

Adjusted EBITDA at the Company’s principal subsidiary Covanta Energy Corporation (“Covanta Energy”) was $152 million in the third quarter and total Company Cash Flow Provided by Operating Activities (“Operating Cash Flow”) was $117 million for the same period.

YTD Results
For the nine months ended September 30, 2007, total Company operating revenues rose 9 percent to $1.04 billion. Covanta Energy’s Adjusted EBITDA was $397 million and total Company Operating Cash Flow was $260 million for the year-to-date period.

“We are very pleased with the continued progress during the quarter on our growth initiatives. In the last two months we signed a definitive agreement to design, build and operate a 1,700 metric tonnes per day Energy-from-Waste facility in Dublin, Ireland, and we acquired two Energy-from-Waste facilities and four transfer stations to expand our portfolio in the northeastern United States. At the same time we continue to see improving growth opportunities in all our key markets, driven by higher energy prices and the environmental benefits of Energy-from-Waste,” said Anthony Orlando, President and Chief Executive Officer of Covanta. “We are also pleased with our continued strong operating performance and smooth integration of the businesses we have acquired. This performance is a testament to Covanta’s relentless focus on client service and operational excellence throughout the organization.”

2007 Guidance
The Company is reaffirming its full year 2007 guidance for the following key metrics:

Covanta Energy Adjusted EBITDA in the range of $545 million to $565 million;>
Covanta diluted earnings per share in the range of $0.65 to $0.75; and
Covanta’s Operating Cash Flow is in the range of $345 million to $375 million.

Conference Call Information
Covanta will host a conference call at 8:30 am (Eastern) on Thursday, October 25, 2007 to discuss its results for the three months ended September 30, 2007. Prepared remarks will be followed by a question-and-answer session. To participate, please dial 888-466-4447 approximately 10 minutes prior to the scheduled start of the call. If you are calling from outside of the United States, please dial 719-325-2188. The conference call will also be web cast live on the Investor Relations section of the Covanta website at www.covantaholding.com.

A replay of the conference call will be available from 11:00 am (Eastern) on Thursday, October 25, 2007 through midnight (Eastern) Thursday, November 1, 2007. To access the replay, please dial 888-203-1112 or 719-457-0820 and use the replay pass code: 2419442. The web cast will also be archived on www.covantaholding.com.

About Covanta
Covanta is an internationally recognized owner and operator of Energy-from-Waste and other renewable energy projects. Covanta’s energy-from-waste facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States. As a premier operator of large-scale Energy-from-Waste facilities, Covanta is proud to offer an environmentally sound solution to communities’ solid waste disposal needs. With over 30 facilities worldwide, Covanta uses municipal solid waste as a fuel to generate clean, renewable energy. Covanta’s modern Energy-from-Waste facilities safely and securely turn 15 million tons of waste into over 8 million megawatt hours of clean, renewable electricity each year and create 10 billion pounds of steam that are sold to a variety of industries. 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 and its subsidiaries, 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 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, those factors, risks and uncertainties that are described in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2006, and in 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.

Contact:
Gavin Bell
Vice President, Investor Relations & Corporate Communications
Covanta Holding Corporation

973.882.7107
Attachments

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Discussion of Non-GAAP Financial Measures
To supplement Covanta’s results prepared in accordance with United States generally accepted accounting principles (“GAAP”), Covanta uses the measure of Adjusted EBITDA, which is a non-GAAP measure as defined by the Securities and Exchange Commission. The non-GAAP financial measure of Adjusted EBITDA described below, and used in the tables above, is not intended as a substitute and should not be considered in isolation from measures of financial performance or liquidity prepared in accordance with GAAP. In addition, Covanta’s non-GAAP financial measure may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes.

Covanta uses a number of different financial measures, both GAAP and non-GAAP, in assessing the overall performance of its business. Covanta uses Adjusted EBITDA to provide further information that is useful to an understanding of the financial covenants contained in its credit facilities, and as additional ways of viewing aspects of its operations that, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of Covanta’s business. The presentation of Adjusted EBITDA is intended to enhance the usefulness of Covanta’s financial information by providing a measure which management internally uses to assess and evaluate the overall performance of its business and those of possible acquisition candidates, and highlight trends in the overall business. Covanta also uses this non-GAAP financial measure as a significant criterion of performance-based components of employee compensation.

Adjusted EBITDA should not be considered as an alternative to net income or an alternative to cash flow provided by operating activities as indicators of Covanta’s performance or liquidity or any other measures of performance or liquidity derived in accordance with GAAP.

Adjusted EBITDA
The calculation of Adjusted EBITDA is based on the definition in Covanta’s credit facilities. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, as adjusted for additional items subtracted from or added to net income for Covanta’s principal subsidiary, Covanta Energy.

Under its credit facilities, Covanta is required to satisfy certain financial covenants, including certain ratios of which Adjusted EBITDA is an important component. Compliance with such financial covenants is expected to be the principal limiting factor which will affect Covanta’s ability to engage in a broad range of activities in furtherance of its business, including making certain investments, acquiring businesses and incurring additional debt. Covanta was in compliance with these covenants as of September 30, 2007. Failure to comply with such financial covenants could result in a default under Covanta’s credit facilities, which default would have a material adverse affect on its financial condition and liquidity.

These financial covenants are measured on a trailing four quarter period basis and the material covenants are as follows:

maximum Covanta Energy leverage ratio of 4.50 to 1.00 (which declines for quarterly periods after September 30, 2007), which measures Covanta Energy’s Consolidated Adjusted Debt, (which is the principal amount of its consolidated debt less certain restricted funds dedicated to repayment of project debt principal and construction costs) to its Adjusted EBITDA; and
minimum Covanta Energy interest coverage ratio of 3.00 to 1.00, which measures Covanta Energy’s Adjusted EBITDA to its consolidated interest expense plus certain interest expense of ours, to the extent paid by Covanta Energy.

In order to provide a meaningful basis for comparison, Covanta is providing information with respect to Covanta Energy’s Adjusted EBITDA for the three and nine months ended September 30, 2007 and 2006, reconciled for each such period to net income and cash flow provided by operating activities, which are believed to be the most directly comparable measures under GAAP. Covanta is providing similar reconciliations with respect to its guidance for full year 2007 Adjusted EBITDA.

Prior Use of Free Cash Flow
Previously, Covanta has provided annual guidance for Free Cash Flow as a liquidity measure, and through the first quarter of 2007 furnished Free Cash Flow results on a quarterly basis. Free Cash Flow had been used by management as a liquidity measure which provided useful information about the amount of cash flow generated by Covanta available for the repayment of debt and for strategic opportunities, including, among others, investing in the business, making strategic acquisitions and constructing new or expanding existing facilities.

Covanta calculated Free Cash Flow as cash flow provided by operating activities, less purchases of property, plant and equipment (also referred to as “Capital Expenditures”). The amount of Capital Expenditures Covanta has historically incurred were primarily related to maintaining existing operating facilities. However, Covanta’s Capital Expenditures, as calculated and disclosed in accordance with GAAP, can materially increase in certain situations that are outside of the scope of maintaining its existing facilities and do not affect its ability to repay debt or invest in strategic opportunities, including those where we incur Capital Expenditures that are:

related to the construction of new facilities or the expansion of existing facilities,
incurred directly in connection with the acquisition of new businesses, or
reimbursed by third parties or through insurance proceeds.

In addition, with its new capital structure that closed during the first quarter of 2007, Covanta now has greater, but not unrestricted, flexibility to use its cash flow for a variety of purposes. As a result, management has determined that a more clear and useful measure of its cash flow available for the repayment of debt and for strategic opportunities, is cash flow provided by operating activities, which is a GAAP measure. Beginning with the second quarter of 2007, Covanta furnished such information, as well as additional information regarding how it has utilized its cash flow provided by operating activities to repay debt, invest in strategic opportunities, and incur Capital Expenditures.