JULY 25, 2007 - COVANTA HOLDING CORPORATION REPORTS 2007 SECOND QUARTER RESULTS REAFFIRMS 2007 GUIDANCE

FAIRFIELD, NJ, July 25, 2007 – Covanta Holding Corporation (NYSE:CVA) (“Covanta” or the “Company”) reported financial results today for the three months ended June 30, 2007. Diluted earnings per share was $0.24 in the second quarter of 2007, which included a net benefit of $0.03 per diluted share from insurance recoveries and expenses relating to a fire at the SEMASS facility which occurred in the first quarter of 2007. These results compare to diluted earnings per share of $0.35 in the prior year period, which included a net benefit of $0.09 per diluted share for certain items impacting the results of the Company.

Second Quarter Results
For the three months ended June 30, 2007 total Company operating revenues grew 6 percent to $355 million, up from $334 million in the prior year comparative period.

The Company’s domestic waste and energy operating revenues grew 5 percent to $301 million, driven primarily by contractual service fee escalations, construction revenues related to the Hillsborough County facility expansion and two facilities added to the company’s portfolio this year; the Harrisburg Energy-from-Waste facility and the Holliston transfer station. International revenues of $52 million grew by 17 percent primarily due to higher electricity sales at both Indian facilities.

Adjusted EBITDA at the Company’s principal subsidiary Covanta Energy Corporation (“Covanta Energy”) was $141 million in the second quarter while Covanta’s Cash Flow Provided by Operating Activities (“Operating Cash Flow”) was $86 million for the three months ended June 30, 2007.

Six Months Results
For the six months ended June 30, 2007, total Company operating revenues rose 7 percent to $685 million. Covanta Energy’s Adjusted EBITDA was $246 million while Covanta’s Operating Cash Flow was $143 million for the year-to-date period.

“The second quarter was marked by solid operating performance and tangible progress on our growth initiatives that position us to take advantage of promising opportunities around the world,” said Anthony Orlando, President and Chief Executive Officer of Covanta. “Notably, we signed a 10 year agreement to operate the Harrisburg Energy-from-Waste facility, completed our joint venture to enter the Energy-from-Waste market in China, announced the acquisition of two biomass renewable energy facilities in California, and received a Letter of Intent to design, build and operate a 1,700 ton per day Energy-from-Waste facility in Dublin, Ireland.”

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; and
• Covanta diluted earnings per share in the range of $0.65 to $0.75.

To provide additional clarity as to Covanta’s cash flow generated and available to grow its business and repay debt, the Company is for the first time providing full year 2007 guidance for Covanta’s Operating Cash Flow, together with information regarding how the company has utilized its cash flow for these purposes. This key metric, which is a GAAP metric, is provided in lieu of Free Cash Flow, a non-GAAP metric which was previously furnished.

The Company is providing full year 2007 guidance for Operating Cash Flow:

• Covanta’s Operating Cash Flow 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, July 26, 2007 to discuss its results for the three months ended June 30, 2007. Prepared remarks will be followed by a question-and-answer session. To participate, please dial 800-475-3716 approximately 10 minutes prior to the scheduled start of the call. If you are calling from outside of the United States, please dial 719-457-2728. The conference call will also be webcast 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, July 26, 2007 through midnight (Eastern) Thursday, August 2, 2007. To access the replay, please dial 888-203-1112 or 719-457-0820 and use the replay pass code: 7109495. The webcast will also be archived on www.covantaholding.com.


About Covanta
Covanta is a New York Stock Exchange listed company engaging in waste disposal, energy services and specialty insurance through its subsidiaries. Covanta's subsidiary, Covanta Energy, is an internationally recognized owner and operator of energy-from-waste and power generation projects. Covanta Energy's energy-from-waste facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States.

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
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