225648--2/22/2010--COVANTA_HOLDING

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{cost, contract, operation}

{operation, international, foreign}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{acquisition, growth, future}

{loss, insurance, financial}

{competitive, industry, competition}

{control, financial, internal}

{regulation, government, change}

{product, candidate, development}

{condition, economic, financial}

{cost, operation, labor}

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{tax, income, asset}

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Recent dislocations in credit and capital markets may make it more difficult for us to borrow money or raise capital needed to finance the construction of new projects, the expansion of our existing projects, and the acquisitions of certain businesses. Recent dislocations in the credit and capital markets, if prolonged and severe, could make it more difficult or costly for us to refinance our corporate debt when it matures. Our reputation could be adversely affected if opposition to our efforts to grow our business results in adverse publicity. Changes in technology may have a material adverse effect on our profitability. Operation of our facilities involves significant risks. Development and construction of new projects and expansions may not commence as anticipated, or at all. Construction activities may cost more and take longer than we estimate. Exposure to foreign currency fluctuations may affect our results from operations or construction costs of facilities we develop in international markets. Changes in labor laws could adversely affect our relationship with our employees and cause disruptions to our business. The rapid growth of our operations could strain our resources and cause our business to suffer. Our efforts to grow our business will require us to incur significant costs in business development, often over extended periods of time, with no guarantee of success. Our insurance and contractual protections may not always cover lost revenues, increased expenses or liquidated damages payments. Performance reductions could materially and adversely affect us and our projects may operate at lower levels than expected. Our businesses generate their revenue primarily under long-term contracts and must avoid defaults under those contracts in order to service their debt and avoid material liability to contract counterparties. We have provided guarantees and financial support in connection with our projects. Our businesses depend on performance by third parties under contractual arrangements. We are subject to counterparty and market risk with respect to transactions with financial and other institutions. Concentration of suppliers and customers may expose us to heightened financial exposure. Our waste operations are concentrated in one region, and expose us to regional economic or market declines. Some of our energy contracts involve greater risk of exposure to performance levels which could result in materially lower revenues. Exposure to international economic and political factors may materially and adversely affect our international businesses. Our reputation could be adversely affected if our businesses, or third parties with whom we have a relationship, were to fail to comply with United States or foreign laws or regulations. Exposure to fuel supply prices may affect our costs and results of operations. Our inability to obtain resources for operations may adversely affect our ability to effectively compete. Compliance with environmental laws could adversely affect our results of operations. Energy regulation could adversely affect our revenues and costs of operations. Failure to obtain regulatory approvals could adversely affect our operations. The energy industry is becoming increasingly competitive, and we might not successfully respond to these changes. Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under our indebtedness. We cannot assure you that our cash flow from operations will be sufficient to service our indebtedness. Our credit facilities contain covenant restrictions that may limit our ability to operate our business. We cannot be certain that our NOLs will continue to be available to offset tax liability. Our controls and procedures may not prevent or detect all errors or acts of fraud. Failure to maintain an effective system of internal control over financial reporting may have an adverse effect on our stock price. Provisions of our certificate of incorporation, Debentures and Notes could discourage an acquisition by a third party.

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225648--2/22/2010--COVANTA_HOLDING_CORP