CoreCivic, Inc. (NYSE:CXW) (the Company) announced
today its financial results for the third quarter of 2017.
Third Quarter 2017 Highlights
- Diluted EPS of $0.35
- Adjusted Diluted EPS of $0.36
- Normalized FFO per diluted share of $0.56
- Net Income of $41.2 million
- Adjusted Net Income of $42.6 million
- Adjusted EBITDA of $93.1 million
"The second half of the year has already included a
number of positive developments for CoreCivic. In addition to
entering into or commencing five new contracts with government
partners, we advanced our strategy of diversifying the Company by
expanding our residential reentry portfolio through additional
acquisitions," said Damon T. Hininger, CoreCivic's President and
Chief Executive Officer. "We continue to be pleased with the
opportunities we see in the market to meaningfully grow our
CoreCivic Community and CoreCivic Properties platforms as we
continue to expand and diversify the solutions we offer a growing
number of government partners."
Third Quarter 2017 Results
Total revenue in the third quarter of 2017 was $442.8 million
compared to $474.9 million in the third quarter of 2016. In
the third quarter of 2017, we generated $7.6 million of additional
revenue compared with the prior year quarter at our newly
constructed Trousdale Turner Correctional Center and at our newly
expanded Red Rock Correctional Center pursuant to new contracts
with the States of Tennessee and Arizona, respectively, that both
commenced in 2016. We also generated $6.0 million of
additional revenue under existing contracts from the U.S. Marshals
Service (USMS) and the States of Colorado and Hawaii.
However, these increases were offset by the previously disclosed
amendment and extension of the contract for our South Texas Family
Residential Center (STFRC) effective in November 2016, and the
previously disclosed expiration of two contracts with the Federal
Bureau of Prisons (BOP) at our Eden Detention Center and our Cibola
County Corrections Center. The amendment of the STFRC
contract resulted in a reduction to revenue of $28.7 million
compared with the prior year quarter, while the expiration of the
contracts with the BOP collectively resulted in a reduction to
revenue of $15.7 million compared with the prior year period.
Subsequent to these expirations, revenue generated from our two
remaining BOP prison facilities comprised 5% of our total revenue
for the three months ended September 30, 2017.
Net income generated in the third quarter of 2017
totaled $41.2 million, or $0.35 per diluted share, compared with
$55.3 million, or $0.47 per diluted share, in the third quarter of
2016. Adjusted for special items, net income in the third
quarter of 2017 was $42.6 million, or $0.36 per diluted share
(Adjusted Diluted EPS), compared with adjusted net income in the
third quarter of 2016 of $57.2 million, or $0.49 per diluted
share. Special items in the third quarter of 2017 included
expenses associated with mergers and acquisitions of $1.1 million
and asset impairments of $0.4 million. Special items in the
third quarter of 2016 included corporate restructuring charges of
$4.0 million, expenses associated with mergers and acquisitions of
$0.1 million, and a $2.0 million gain on settlement of contingent
consideration.
Earnings Per Share (EPS) in the third quarter of
2017 was negatively impacted by approximately $0.13 for the
aforementioned amendment and extension of the contract for the
STFRC and for the expiration of the contracts with the BOP, net of
the impact from a new contract with U.S. Immigration and Customs
Enforcement (ICE) at the Cibola County Corrections Center, which
commenced shortly following the expiration of our contract with the
BOP at that facility. Net income was also negatively impacted
by staffing and other related activation expenses associated with
an amended contract with the state of Ohio for up to an additional
996 offenders at our Northeast Ohio Correctional Center, where we
began receiving inmates during the third quarter of 2017. As
of September 30, 2017, we cared for approximately 300 offenders
pursuant to this new agreement. We currently expect full
contract utilization to occur during the first quarter of 2018.
Funds From Operations (FFO) was $65.3 million, or
$0.55 per diluted share, in the third quarter of 2017, compared
with $79.0 million, or $0.67 per diluted share, in the third
quarter of 2016. Normalized FFO, which excludes the
aforementioned special items, was $66.4 million, or $0.56 per
diluted share, in the third quarter of 2017, compared with $80.9
million, or $0.69 per diluted share, in the third quarter of
2016.
EBITDA was $97.4 million in the third quarter of
2017, compared with $116.8 million in the third quarter of
2016. Adjusted EBITDA was $93.1 million in the third quarter
of 2017, compared with $105.7 million in the third quarter of
2016. Adjusted EBITDA excludes the aforementioned special
items, and includes the portion of rental payments for the STFRC
that is classified as depreciation and interest expense in our
consolidated financial statements.
Adjusted net income, EBITDA, Adjusted EBITDA, FFO,
and Normalized FFO and their corresponding per share amounts, are
measures calculated and presented on the basis of methodologies
other than in accordance with generally accepted accounting
principles (GAAP). Please refer to the Supplemental Financial
Information and related note following the financial statements
herein for further discussion and reconciliations of these measures
to GAAP measures.
Business Development Update
New Contract with the City of Mesa at the Central
Arizona Florence Correctional Complex. In July 2017,
we began receiving offenders from the City of Mesa, Arizona at our
Central Arizona Florence Correctional Complex under a new
three-year contract. We currently care for detainees from
USMS, ICE, and the U.S. Virgin Islands at the Central Arizona
Florence Correctional complex in addition to caring for
approximately 120 offenders on behalf of the City of
Mesa.
New Contract with Cibola County, New Mexico at the
Cibola County Corrections Center. In September 2017,
we entered into a new contract with Cibola County in New Mexico to
care for a minimum of 120 offenders from the County at our Cibola
County Corrections Center. We currently care for detainees
from USMS and ICE at the Cibola County Corrections Center in
addition to caring for approximately 120 offenders on behalf of
Cibola County.
New Contract with the State of Nevada at the Saguaro
Correctional Facility. In October 2017, we entered
into a new contract with the State of Nevada Department of
Corrections to care for up to 200 offenders at our Saguaro
Correctional Facility in Arizona to help alleviate overcrowding in
the State's correctional system. The contract has an initial
term of approximately two years, renewable for additional periods
by mutual agreement, and we expect to begin receiving offenders in
the fourth quarter of 2017.
New Contract with Hamilton County, Tennessee at the
Silverdale Detention Center. In November 2017, we
entered into a new contract with Hamilton County, Tennessee to
continue management, operation and maintenance of the 1,046-bed
Silverdale Detention Center. The initial term of the new
contract is four years, renewable for four additional four year
periods. The new contract incorporates a Development
Agreement, providing the County the ability to negotiate the
construction of a replacement facility for the County Jail and the
Silverdale Detention Center.
New Contract with the State of Ohio at the Northeast
Ohio Correctional Center. On August 15, 2017, we
began receiving offenders from the State of Ohio under a new
agreement with the Ohio Department of Rehabilitation &
Correction to care for up to 996 offenders at our 2,016-bed
Northeast Ohio Correctional Center. The initial term of the
contract continues through June 2032 with unlimited renewal options
subject to appropriations and mutual agreement. We currently
care for approximately 450 offenders from the State of Ohio at the
Northeast Ohio Correctional Center, and expect full contract
utilization under the new agreement to occur in the first quarter
of 2018.
Acquisition of New Beginnings Treatment Center, Inc. in
Arizona. On August 1, 2017, we completed the
acquisition of New Beginnings Treatment Center, Inc. (New
Beginnings), an Arizona-based community corrections provider,
together with real estate used in the operation of New Beginnings'
business that we acquired from an affiliate of New Beginnings, for
a total purchase price of $6.4 million. In connection with
the acquisition, CoreCivic assumed a contract with the BOP to
provide reentry services to male and female adults in a facility
located in Tucson, Arizona containing 92 beds.
Acquisition of Augusta Transitional Center and Three
Government Leased Properties. On September 15, 2017,
we completed the acquisition of a portfolio of four leased
properties including the 230-bed Augusta Transitional Center, a
community corrections facility leased to the Georgia Department of
Corrections, and three properties in Georgia and North Carolina
leased to the federal government through the General Services
Administration, constituting approximately 30,000 square feet in
the aggregate, for a total purchase price of $8.7 million.
Acquisition of Time to Change, Inc. in
Colorado. On November 1, 2017, we completed the
acquisition of Time to Change, Inc., a Colorado-based community
corrections provider, for a total purchase price of $13.2 million,
with the potential for additional contingent consideration
currently estimated to be $9.0 million, subject to change based
upon future financial performance of the acquisition. In
connection with the acquisition, CoreCivic assumed contracts with
Adams County, Colorado to provide reentry services to male and
female adults in three facilities located in Colorado containing a
total of 422 beds.
Issuance of Senior Unsecured Notes
On October 13, 2017, we completed the issuance of $250.0 million
aggregate principal amount of senior unsecured notes, due October
2027, at a yield to maturity of 4.75% (the notes). The notes
are senior unsecured obligations of the Company and are guaranteed
by all of the Company’s subsidiaries that guarantee its credit
facility. The Company used substantially all of the aggregate
net proceeds from the offering of the notes to repay a portion of
the borrowings outstanding under the revolving portion of the
Company’s credit facility.
2017 Financial Guidance
Based on current business conditions we have provided the
following updated financial guidance for the fourth quarter of 2017
and the full year 2017:
|
Fourth Quarter 2017 |
Full Year 2017 |
|
|
Prior Guidance |
Current Guidance |
|
$0.35 to $0.36 |
$1.50 to $1.54 |
$1.50 to $1.52 |
|
$0.35 to $0.37 |
$1.52
to $1.56 |
$1.52 to $1.54 |
|
$0.55 to $0.57 |
$2.28
to $2.33 |
$2.31 to $2.32 |
- Normalized FFO per diluted share
|
$0.55 to $0.57 |
$2.31 to $2.35 |
$2.33 to $2.35 |
During 2017, we expect to invest approximately $68.5 million to
$75.0 million in capital expenditures, consisting of approximately
$12.0 million to $14.0 million in on-going prison construction and
expenditures related to potential land acquisitions; approximately
$25.5 million to $26.0 million in maintenance capital expenditures
on real estate assets; and approximately $31.0 million to $35.0
million for capital expenditures on other assets and information
technology.
Supplemental Financial Information and Investor
Presentations
We have made available on our website supplemental
financial information and other data for the third quarter
2017. We do not undertake any obligation, and disclaim any
duties to update any of the information disclosed in this
report. Interested parties may access this information
through our website at www.corecivic.com/investors under “Financial
Reports” of the Investors section.
Management may meet with investors from time to
time during the fourth quarter of 2017. Written materials
used in the investor presentations will also be available on our
website beginning on or about November 13, 2017. Interested
parties may access this information through our website at
www.corecivic.com/investors under “Presentations, Webcasts and
Events” of the Investors section.
Webcast and Replay Information
We will host a webcast conference call at 10:00 a.m. Central
Time (11:00 a.m. Eastern Time) on Thursday, November 9, 2017, to
discuss our third quarter 2017 financial results and future
outlook. Interested parties may access this information
through our website at www.corecivic.com/investors under
“Presentations, Webcasts and Events” of the Investors
section. The conference call will be archived on our website
following the completion of the call. In addition, there will
be a telephonic replay available beginning at 1:00 p.m. Central
Time (2:00 p.m. Eastern Time) on November 9, 2017, through 1:00
p.m. Central Time (2:00 p.m. Eastern Time) on November 17, 2017. To
access the telephonic replay, dial 866-548-4713 in the U.S. and
Canada. International callers may dial +1 323-794-2093 and
enter passcode 1044509.
About CoreCivic
CoreCivic is a diversified government solutions company with the
scale and experience needed to solve tough government challenges in
cost-effective ways. We provide a broad range of solutions to
government partners that serve the public good through high-quality
corrections and detention management, innovative and cost-saving
government real estate solutions, and a growing network of
residential reentry centers to help address America’s recidivism
crisis. We are a publicly traded real estate investment trust
(REIT) and the nation’s largest owner of partnership correctional,
detention and residential reentry facilities. CoreCivic has been a
flexible and dependable partner for government for more than 30
years. Our employees are driven by a deep sense of service, high
standards of professionalism and a responsibility to help
government better the public good. Learn more at
http://www.corecivic.com/.
Forward-Looking Statements
This press release contains statements as to our beliefs and
expectations of the outcome of future events that are
"forward-looking" statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from the statements made. These
include, but are not limited to, the risks and uncertainties
associated with: (i) general economic and market conditions,
including, but not limited to, the impact governmental budgets can
have on our contract renewals and renegotiations, per diem rates,
and occupancy; (ii) fluctuations in our operating results
because of, among other things, changes in occupancy levels,
competition, increases in cost of operations, fluctuations in
interest rates and risks of operations; (iii) our ability to
obtain and maintain correctional, detention, and residential
reentry facility management contracts because of reasons including,
but not limited to, sufficient governmental appropriations,
contract compliance and effects of inmate disturbances;
(iv) changes in the privatization of the corrections and
detention industry, the public acceptance of our services, the
timing of the opening of new facilities and the commencement of new
management contracts, as well as our ability to utilize current
available beds; (v) changes in government policy regarding the
utilization of the private sector for corrections and detention
capacity and our services; (vi) changes in government policy and in
legislation and regulation of corrections and detention contractors
that affect our business, including but not limited to,
California's utilization of out-of-state contracted correctional
capacity and the continued utilization of the STFRC by U.S.
Immigration and Customs Enforcement under terms of the current
contract, and the impact of any changes to immigration reform and
sentencing laws (Our company does not, under longstanding policy,
lobby for or against policies or legislation that would determine
the basis for, or duration of, an individual's incarceration or
detention.); (vii) our ability to successfully integrate operations
of our acquisitions and realize projected returns resulting
therefrom; (viii) our ability to meet and maintain
qualification for taxation as a REIT; and (ix) the availability of
debt and equity financing on terms that are favorable to us. Other
factors that could cause operating and financial results to differ
are described in the filings we make from time to time with the
Securities and Exchange Commission.
CoreCivic takes no responsibility for updating the information
contained in this press release following the date hereof to
reflect events or circumstances occurring after the date hereof or
the occurrence of unanticipated events or for any changes or
modifications made to this press release or the information
contained herein by any third-parties, including, but not limited
to, any wire or internet services.
|
CORECIVIC, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
ASSETS |
|
September 30,2017 |
|
December 31,2016 |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
42,735 |
|
|
$ |
37,711 |
|
Accounts receivable,
net of allowance of $572 and $1,580, respectively |
|
|
241,143 |
|
|
|
229,885 |
|
Prepaid expenses and
other current assets |
|
|
20,178 |
|
|
|
31,228 |
|
Total current assets |
|
|
304,056 |
|
|
|
298,824 |
|
|
|
|
|
|
Property and equipment,
net of accumulated depreciation of $1,441,951 and $1,352,323,
respectively |
|
|
2,799,476 |
|
|
|
2,837,657 |
|
Goodwill |
|
|
38,728 |
|
|
|
38,386 |
|
Non-current deferred
tax assets |
|
|
15,460 |
|
|
|
13,735 |
|
Other assets |
|
|
85,046 |
|
|
|
83,002 |
|
|
|
|
|
|
Total assets |
|
$ |
3,242,766 |
|
|
$ |
3,271,604 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses |
|
$ |
266,405 |
|
|
$ |
260,107 |
|
Income taxes
payable |
|
|
1,168 |
|
|
|
2,086 |
|
Current portion of
long-term debt |
|
|
10,000 |
|
|
|
10,000 |
|
Total current liabilities |
|
|
277,573 |
|
|
|
272,193 |
|
|
|
|
|
|
Long-term debt,
net |
|
|
1,411,210 |
|
|
|
1,435,169 |
|
Deferred revenue |
|
|
43,143 |
|
|
|
53,437 |
|
Other liabilities |
|
|
52,159 |
|
|
|
51,842 |
|
|
|
|
|
|
Total liabilities |
|
|
1,784,085 |
|
|
|
1,812,641 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Preferred stock ― $0.01
par value; 50,000 shares authorized; none issued and outstanding at
September 30, 2017 and December 31, 2016, respectively |
|
|
- |
|
|
|
- |
|
Common stock ― $0.01
par value; 300,000 shares authorized; 118,191 and 117,554 shares
issued and outstanding at September 30, 2017 and December 31, 2016,
respectively |
|
|
1,182 |
|
|
|
1,176 |
|
Additional paid-in
capital |
|
|
1,793,568 |
|
|
|
1,780,350 |
|
Accumulated deficit |
|
|
(336,069 |
) |
|
|
(322,563 |
) |
|
|
|
|
|
Total
stockholders’ equity |
|
|
1,458,681 |
|
|
|
1,458,963 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
$ |
3,242,766 |
|
|
$ |
3,271,604 |
|
|
|
CORECIVIC, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
|
|
For the Three Months EndedSeptember
30, |
|
For the Nine Months Ended September
30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
$ |
442,845 |
|
|
$ |
474,935 |
|
|
$ |
1,324,922 |
|
|
$ |
1,385,651 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Operating |
|
|
316,865 |
|
|
|
326,349 |
|
|
|
940,065 |
|
|
|
956,713 |
|
General and administrative |
|
|
28,303 |
|
|
|
27,699 |
|
|
|
79,546 |
|
|
|
81,543 |
|
Depreciation and amortization |
|
|
36,507 |
|
|
|
42,924 |
|
|
|
109,564 |
|
|
|
127,328 |
|
Restructuring charges |
|
|
- |
|
|
|
4,010 |
|
|
|
- |
|
|
|
4,010 |
|
Asset impairments |
|
|
355 |
|
|
|
- |
|
|
|
614 |
|
|
|
- |
|
|
|
|
382,030 |
|
|
|
400,982 |
|
|
|
1,129,789 |
|
|
|
1,169,594 |
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME |
|
|
60,815 |
|
|
|
73,953 |
|
|
|
195,133 |
|
|
|
216,057 |
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME) EXPENSE: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
17,029 |
|
|
|
16,937 |
|
|
|
50,141 |
|
|
|
51,277 |
|
Other (income) expense |
|
|
(65 |
) |
|
|
54 |
|
|
|
(108 |
) |
|
|
103 |
|
|
|
|
16,964 |
|
|
|
16,991 |
|
|
|
50,033 |
|
|
|
51,380 |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
43,851 |
|
|
|
56,962 |
|
|
|
145,100 |
|
|
|
164,677 |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(2,673 |
) |
|
|
(1,622 |
) |
|
|
(8,400 |
) |
|
|
(5,447 |
) |
NET INCOME |
|
$ |
41,178 |
|
|
$ |
55,340 |
|
|
$ |
136,700 |
|
|
$ |
159,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
1.16 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
1.15 |
|
|
$ |
1.35 |
|
|
|
DIVIDENDS DECLARED PER SHARE |
|
$ |
0.42 |
|
|
$ |
0.54 |
|
|
$ |
1.26 |
|
|
$ |
1.62 |
|
|
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS) |
|
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED
EPS |
|
|
For the Three MonthsEnded
September 30, |
For the Nine MonthsEnded
September 30, |
|
|
2017 |
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
Net income |
$ |
41,178 |
$ |
55,340 |
|
$ |
136,700 |
$ |
159,230 |
|
Special items: |
|
|
|
|
Expenses
associated with mergers and acquisitions |
|
1,093 |
|
110 |
|
|
1,524 |
|
1,570 |
|
Gain on
settlement of contingent consideration |
|
- |
|
(2,000 |
) |
|
- |
|
(2,000 |
) |
Restructuring charges |
|
- |
|
4,010 |
|
|
- |
|
4,010 |
|
Asset
impairments |
|
355 |
|
- |
|
|
614 |
|
- |
|
Income
tax benefit for special items |
|
- |
|
(215 |
) |
|
- |
|
(215 |
) |
Adjusted net income |
$ |
42,626 |
$ |
57,245 |
|
$ |
138,838 |
$ |
162,595 |
|
Weighted average common
shares outstanding – basic |
|
118,182 |
|
117,443 |
|
|
118,044 |
|
117,360 |
|
Effect of dilutive
securities: |
|
|
|
|
Stock
options |
|
262 |
|
207 |
|
|
353 |
|
384 |
|
Restricted stock-based awards |
|
84 |
|
44 |
|
|
62 |
|
80 |
|
Weighted average shares
and assumed conversions - diluted |
|
118,528 |
|
117,694 |
|
|
118,459 |
|
117,824 |
|
Adjusted Diluted
Earnings Per Share |
$ |
0.36 |
$ |
0.49 |
|
$ |
1.17 |
$ |
1.38 |
|
|
CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED
FUNDS FROM OPERATIONS
|
|
For the Three MonthsEnded
September 30, |
For the Nine MonthsEnded
September 30, |
|
|
2017 |
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
Net income |
$ |
41,178 |
$ |
55,340 |
|
$ |
136,700 |
$ |
159,230 |
|
Depreciation of real
estate assets |
|
23,762 |
|
23,684 |
|
|
71,417 |
|
70,409 |
|
Impairment of real
estate assets |
|
355 |
|
- |
|
|
355 |
|
- |
|
|
|
|
|
|
Funds
From Operations |
$ |
65,295 |
$ |
79,024 |
|
$ |
208,472 |
$ |
229,639 |
|
Expenses associated
with mergers and acquisitions |
|
1,093 |
|
110 |
|
|
1,524 |
|
1,570 |
|
Gain on settlement of
contingent consideration |
|
- |
|
(2,000 |
) |
|
- |
|
(2,000 |
) |
Restructuring
charges |
|
- |
|
4,010 |
|
|
- |
|
4,010 |
|
Goodwill and other
impairments |
|
- |
|
- |
|
|
259 |
|
- |
|
Income tax benefit for
special items |
|
- |
|
(215 |
) |
|
- |
|
(215 |
) |
|
|
|
|
|
Normalized Funds From Operations |
$ |
66,388 |
$ |
80,929 |
|
$ |
210,255 |
$ |
233,004 |
|
|
|
|
|
|
Funds From Operations
Per Diluted Share |
$ |
0.55 |
$ |
0.67 |
|
$ |
1.76 |
$ |
1.95 |
|
Normalized Funds From
Operations Per Diluted Share |
$ |
0.56 |
$ |
0.69 |
|
$ |
1.77 |
$ |
1.98 |
|
|
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS) |
|
|
|
CALCULATION OF
EBITDA AND ADJUSTED EBITDA |
|
|
|
|
|
|
For the Three MonthsEnded
September 30, |
For the Nine MonthsEnded
September 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
Net income |
$ |
41,178 |
|
$ |
55,340 |
|
$ |
136,700 |
|
$ |
159,230 |
|
Interest expense,
net |
|
17,029 |
|
|
16,937 |
|
|
50,141 |
|
|
51,277 |
|
Depreciation and
amortization |
|
36,507 |
|
|
42,924 |
|
|
109,564 |
|
|
127,328 |
|
Income tax expense |
|
2,673 |
|
|
1,622 |
|
|
8,400 |
|
|
5,447 |
|
|
|
|
|
|
EBITDA |
$ |
97,387 |
|
$ |
116,823 |
|
$ |
304,805 |
|
$ |
343,282 |
|
Expenses associated
with mergers and acquisitions |
|
1,093 |
|
|
110 |
|
|
1,524 |
|
|
1,570 |
|
Gain on settlement of
contingent consideration |
|
- |
|
|
(2,000 |
) |
|
- |
|
|
(2,000 |
) |
Restructuring
charges |
|
- |
|
|
4,010 |
|
|
- |
|
|
4,010 |
|
Depreciation expense
associated with STFRC lease |
|
(4,147 |
) |
|
(10,706 |
) |
|
(12,306 |
) |
|
(31,886 |
) |
Interest expense
associated with STFRC lease |
|
(1,585 |
) |
|
(2,500 |
) |
|
(4,890 |
) |
|
(8,076 |
) |
Asset impairments |
|
355 |
|
|
- |
|
|
614 |
|
|
- |
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
93,103 |
|
$ |
105,737 |
|
$ |
289,747 |
|
$ |
306,900 |
|
|
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS) |
|
|
|
CALCULATION OF ADJUSTED NET INCOME, NORMALIZED FUNDS FROM
OPERATIONS & ADJUSTED EBITDA GUIDANCE |
|
|
|
|
For the Quarter EndingDecember
31, 2017 |
For the Year Ending December
31, 2017 |
|
Low End of Guidance |
High End of Guidance |
Low End of Guidance |
High End of Guidance |
Net
income |
$ |
41,200 |
|
$ |
43,200 |
|
$ |
177,900 |
|
$ |
179,900 |
|
Expenses
associated with mergers and acquisitions |
|
500 |
|
|
500 |
|
|
2,000 |
|
|
2,000 |
|
Asset
impairments |
|
- |
|
|
- |
|
|
600 |
|
|
600 |
|
Adjusted
net income |
$ |
41,700 |
|
$ |
43,700 |
|
$ |
180,500 |
|
$ |
182,500 |
|
|
|
|
|
|
Net
income |
$ |
41,200 |
|
$ |
43,200 |
|
$ |
177,900 |
|
$ |
179,900 |
|
Depreciation of real estate assets |
|
24,000 |
|
|
24,000 |
|
|
95,500 |
|
|
95,500 |
|
Funds
From Operations |
$ |
65,200 |
|
$ |
67,200 |
|
$ |
273,400 |
|
$ |
275,400 |
|
Expenses
associated with mergers and acquisitions |
|
500 |
|
|
500 |
|
|
2,000 |
|
|
2,000 |
|
Asset
impairments |
|
- |
|
|
- |
|
|
600 |
|
|
600 |
|
Normalized Funds From Operations |
$ |
65,700 |
|
$ |
67,700 |
|
$ |
276,000 |
|
$ |
278,000 |
|
Diluted
EPS |
$ |
0.35 |
|
$ |
0.36 |
|
$ |
1.50 |
|
$ |
1.52 |
|
Adjusted
EPS per diluted share |
$ |
0.35 |
|
$ |
0.37 |
|
$ |
1.52 |
|
$ |
1.54 |
|
FFO per
diluted share |
$ |
0.55 |
|
$ |
0.57 |
|
$ |
2.31 |
|
$ |
2.32 |
|
Normalized FFO per diluted share |
$ |
0.55 |
|
$ |
0.57 |
|
$ |
2.33 |
|
$ |
2.35 |
|
|
|
|
|
|
Net
income |
$ |
41,200 |
|
$ |
43,200 |
|
$ |
177,900 |
|
$ |
179,900 |
|
Interest
expense, net |
|
18,900 |
|
|
18,400 |
|
|
69,000 |
|
|
68,500 |
|
Depreciation and amortization |
|
36,900 |
|
|
36,900 |
|
|
146,500 |
|
|
146,500 |
|
Income
tax expense |
|
3,100 |
|
|
2,600 |
|
|
11,500 |
|
|
11,000 |
|
EBITDA |
$ |
100,100 |
|
$ |
101,100 |
|
$ |
404,900 |
|
$ |
405,900 |
|
Expenses
associated with mergers and acquisitions |
|
500 |
|
|
500 |
|
|
2,000 |
|
|
2,000 |
|
Depreciation expense associated with STFRC lease |
|
(4,300 |
) |
|
(4,300 |
) |
|
(16,600 |
) |
|
(16,600 |
) |
Interest
expense associated with STFRC lease |
|
(1,500 |
) |
|
(1,500 |
) |
|
(6,400 |
) |
|
(6,400 |
) |
Asset
impairments |
|
- |
|
|
- |
|
|
600 |
|
|
600 |
|
Adjusted
EBITDA |
$ |
94,800 |
|
$ |
95,800 |
|
$ |
384,500 |
|
$ |
385,500 |
|
|
NOTE TO SUPPLEMENTAL FINANCIAL
INFORMATION
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and
Normalized FFO, and, where appropriate, their corresponding per
share metrics are non-GAAP financial measures. CoreCivic
believes that these measures are important operating measures that
supplement discussion and analysis of the Company's results of
operations and are used to review and assess operating performance
of the Company and its facilities and their management teams.
CoreCivic believes that it is useful to provide investors, lenders
and security analysts disclosures of its results of operations on
the same basis that is used by management. FFO, in
particular, is a widely accepted non-GAAP supplemental measure of
REIT performance, grounded in the standards for FFO established by
the National Association of Real Estate Investment Trusts
(NAREIT).
NAREIT defines FFO as net income computed in accordance with
generally accepted accounting principles, excluding gains (or
losses) from sales of property and extraordinary items, plus
depreciation and amortization of real estate and impairment of
depreciable real estate. EBITDA, Adjusted EBITDA, and
Normalized FFO are useful as supplemental measures of performance
of the Company's facilities because such measures do not take into
account depreciation and amortization, or with respect to EBITDA,
the impact of the Company's tax provisions and financing
strategies. Because the historical cost accounting convention used
for real estate assets requires depreciation (except on land), this
accounting presentation assumes that the value of real estate
assets diminishes at a level rate over time. Because of the
unique structure, design and use of the Company's properties,
management believes that assessing performance of the Company's
properties without the impact of depreciation or amortization is
useful. However, a portion of the rental payments for the
STFRC is classified as depreciation and interest expense for
financial reporting purposes. Adjusted EBITDA includes such
depreciation and interest expense in order to more properly reflect
the cash flows associated with this lease. CoreCivic may make
adjustments to FFO from time to time for certain other income and
expenses that it considers non-recurring, infrequent or unusual,
even though such items may require cash settlement, because such
items do not reflect a necessary component of the ongoing
operations of the Company. Normalized FFO excludes the
effects of such items. CoreCivic calculates Adjusted Net
Income by adding to GAAP Net Income expenses associated with the
Company’s debt refinancing, mergers and acquisitions (M&A)
activity, restructuring charges, and certain impairments that the
Company believes are unusual or non-recurring to provide an
alternative measure of comparing operating performance for the
periods presented. Even though expenses associated with
mergers and acquisitions may be recurring, the magnitude and timing
fluctuate based on the timing and scope of M&A activity, and
therefore, such expenses, which are not a necessary component of
the ongoing operations of the Company, may not be comparable from
period to period.
Other companies may calculate Adjusted Net Income, EBITDA,
Adjusted EBITDA, FFO, and Normalized FFO differently than the
Company does, or adjust for other items, and therefore
comparability may be limited. Adjusted Net Income, EBITDA,
Adjusted EBITDA, FFO, and Normalized FFO and their corresponding
per share measures are not measures of performance under GAAP, and
should not be considered as an alternative to cash flows from
operating activities, a measure of liquidity or an alternative to
net income as indicators of the Company's operating performance or
any other measure of performance derived in accordance with
GAAP. This data should be read in conjunction with the
Company's consolidated financial statements and related notes
included in its filings with the Securities and Exchange
Commission.
Contact:
Investors: Cameron Hopewell - Managing Director, Investor
Relations - (615) 263-3024Financial Media: David Gutierrez, Dresner
Corporate Services – (312) 780-7204
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