FEBRUARY 26, 2008 - COVANTA HOLDING CORPORATION REPORTS 2007 FOURTH QUARTER AND FULL-YEAR RESULTS AND ESTABLISHES 2008 GUIDANCE

FAIRFIELD, NJ, February 26, 2008 – Covanta Holding Corporation (NYSE:CVA) (“Covanta” or the “Company”) reported financial results today for the three and twelve months ended December 31, 2007. Diluted earnings per share was $0.47 in the fourth quarter of 2007, which compares to diluted earnings per share of $0.08 in the prior year comparative period. For the full year 2007, diluted earnings per share was $0.85, up from $0.72 in the prior year.

Fourth Quarter Results

For the three months ended December 31, 2007, operating revenues grew 24 percent to $395 million, up from $318 million in the prior year comparative period. The increase was driven by construction revenues from the Hillsborough County facility expansion, revenue from domestic acquisitions completed in 2007, higher prices for domestic waste disposal services, and increased electricity sales at two facilities located in India.

Net income was $72 million for the quarter, up from $12 million in the prior year comparative period. This increase was impacted by lower interest expense, resulting from the recapitalization completed in early 2007, and a lower effective tax rate, driven primarily by the release of a valuation allowance. Cash Flow Provided by Operating Activities (“Operating Cash Flow”) was $98 million in the fourth quarter. Adjusted EBITDA at the Company’s principal subsidiary, Covanta Energy Corporation (“Covanta Energy”), was $155 million.

Full-Year 2007 Results

For the twelve months ended December 31, 2007, operating revenues rose 13 percent to $1.43 billion, up from $1.27 billion in 2006. The Company’s domestic segment operating revenues grew by 11 percent to $1.25 billion for the year, driven primarily by the Hillsborough County facility expansion, revenue from domestic acquisitions completed in 2007, higher pricing on recycled metal sales, and higher electricity rates. International revenues grew by 29 percent to $177 million primarily due to increased electricity sales at the two facilities in India.

Net income grew 23 percent to $131 million, up from $106 million in 2006. This increase was impacted by lower interest expense and a lower effective tax rate.  Operating Cash Flow was $358 million for the year. Covanta Energy’s Adjusted EBITDA was $552 million.

The Company incurred $86 million of capital expenditures in 2007, which included $18 million related to the SEMASS fire, $12 million of capital improvements at facilities acquired during the year, and $55 million primarily to maintain existing facilities.  In addition, the Company repaid $164 million of project debt and invested $110 million in acquisitions and $11 million in equity interests. In total, the Company reinvested all of its Operating Cash Flow back into the business.

“2007 was a milestone year for Covanta, as we made significant progress towards our strategic goals,” said Anthony Orlando, President and Chief Executive Officer of Covanta. “We recapitalized our balance sheet to provide the financial flexibility to seize growth opportunities, successfully integrated several acquisitions to complement our domestic fleet, and we established platforms to expand our energy-from-waste business in Europe and China. In addition, we extended our track record of consistent operational performance, safely converting 15 million tons of waste into clean, renewable energy for our clients, while again generating strong financial results within or above our guidance ranges.”

2008 Guidance

The Company is establishing guidance for 2008 for the following key metrics:

• Adjusted EBITDA of $550 million to $575 million;
• Diluted earnings per share of $0.90 to $1.00; and
• Operating Cash Flow in the range of $380 million to $420 million.

For simplicity, guidance for 2008 is now being provided entirely for Covanta Holding Corporation. See the “Discussion of Non-GAAP Financial Measures” which follows the exhibits.

Conference Call Information

Covanta will host a conference call at 8:30 am (Eastern) on Wednesday, February 27, 2008 to discuss its results for the three and twelve months ended December 31, 2007.  Prepared remarks will be followed by a question-and-answer session.  To participate, please dial 877-419-6590 approximately 10 minutes prior to the scheduled start of the call.  If you are calling from outside of the United States, please dial 719-325-4864.  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 11:30 am (Eastern) on Wednesday, February 27, 2008 through midnight (Eastern) on Wednesday, March 5, 2008.  To access the replay, please dial 888-203-1112 or 719-457-0820 and use the replay pass code: 3944084.  The web cast will also be archived on www.covantaholding.com.

About Covanta

Covanta Holding Corporation, a New York Stock Exchange listed company, is an internationally recognized owner and operator of energy-from-waste and 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 world 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 37 energy-from-waste 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 convert 15 million tons of waste into more than 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.covantaholding.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, 2007, 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.

Contacts:

Bradford Helgeson
Vice President & Treasurer
1-973-882-4193

Vera Carley
Media Relations Manager
1-973-882-2439

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