Revises 2018 Guidance to Position for
Growth Prospects
CoreCivic, Inc. (NYSE: CXW) (the Company)
announced today its financial results for the third quarter of
2018.
Third Quarter 2018 Highlights
- Total revenue of $462.7 million, up 4.5% from the prior
year quarter
- Net income of $41.0 million, Adjusted Net Income of $43.0
million
- Strong performance by both diversifying segments:-
CoreCivic Properties revenue of $15.3 million, up 50% from the
prior year quarter- CoreCivic Community revenue of $25.1
million, up 31% from the prior year quarter
- Diluted EPS of $0.34, Adjusted EPS per diluted share of
$0.36
- Normalized FFO per diluted share of $0.58, up 3.6% from the
prior year quarter
- Adjusted EBITDA of $99.7 million, up 6.8% from the prior
year
"Our third quarter financial and strategic
accomplishments highlight CoreCivic's ability to drive growth both
organically and through acquisitions. We grew FFO per share
and closed acquisitions that will generate attractive risk-adjusted
returns as we continue to transform our portfolio through the
diversification and expansion of our industry-leading
government-leased real estate portfolio," said Damon T. Hininger,
CoreCivic's President and Chief Executive Officer.
"Our revenue and normalized FFO per share growth
were primarily the result of seven new Safety contracts,
representing approximately 4,500 beds. Five of these
contracts were with state agencies, four of which are new state
partners, and two with federal agencies. An additional new contract
with Vermont executed after quarter-end, coupled with numerous
opportunities for accretive acquisitions, position us well to
increase cash flow generated by our portfolio and create long-term
shareholder value."
Third Quarter 2018 Results
Net income generated in the third quarter of 2018
totaled $41.0 million, or $0.34 per diluted share, compared with
$41.2 million, or $0.35 per diluted share, in the third quarter of
2017. Adjusted for special items, net income in the third
quarter of 2018 was $43.0 million, or $0.36 per diluted share
(Adjusted Diluted EPS), compared with adjusted net income in the
third quarter of 2017 of $42.6 million, or $0.36 per diluted
share. Special items in the third quarter of 2018 included
expenses associated with mergers and acquisitions (M&A) of $1.0
million and charges of $1.0 million associated with refined
estimates of the revaluation of deferred tax assets and liabilities
resulting from the passage of the Tax Cuts and Jobs Act in December
2017, while special items in the third quarter of 2017 included
M&A expenses of $1.1 million and asset impairments of $0.4
million.
Funds From Operations (FFO) was $66.5 million, or
$0.56 per diluted share, in the third quarter of 2018, compared to
$65.3 million, or $0.55 per diluted share, in the third quarter of
2017. Normalized FFO, which excludes the aforementioned
special items, was $68.5 million, or $0.58 per diluted share, in
the third quarter of 2018, compared with $66.4 million, or $0.56
per diluted share, in the third quarter of 2017.
Per share results in the third quarter of 2018
compared with the third quarter of 2017 were positively impacted
primarily by increased utilization of existing contracts with the
U.S. Marshals Service (USMS), contributions from recent
acquisitions, and business from newly signed state and federal
contracts, which offset declines in California prisoner
populations. Financial results in the third quarter of 2018,
when compared with the third quarter of 2017, were also negatively
impacted by increased interest expense and higher salary and
benefits expenses. An increase in interest expense with a
negative impact of approximately $0.03 per share resulted from the
repayment of floating rate, short-term borrowings under our
revolving credit facility with net proceeds from the issuance in
October 2017 of $250.0 million of ten-year unsecured senior notes
at a fixed interest rate of 4.75%, combined with higher interest
rates and a higher average debt balance resulting from
acquisitions. Salaries and benefits were negatively impacted
by approximately $0.03 per share as a result of our decision to
retain higher staffing levels at our Tallahatchie County
Correctional Facility and our La Palma Correctional Center, despite
lower California populations at these facilities. We retained
higher staffing levels in order to ensure an expedited and smooth
transition with experienced staff in anticipation of new contract
awards at these facilities, or to help our partners utilize
available capacity at these facilities under existing contracts
resulting from increasing activity on the Southwest border.
EBITDA was $104.2 million in the third quarter of
2018, compared with $97.6 million in the third quarter of
2017. Adjusted EBITDA was $99.7 million in the third quarter
of 2018, compared with $93.3 million in the third quarter of
2017. Adjusted EBITDA excludes the aforementioned non-tax
special items, and includes the portion of rental payments for the
South Texas Family Residential Center (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.
CoreCivic Safety
Total revenue for the CoreCivic Safety portfolio in the third
quarter of 2018 was $422.3 million compared with $411.0 million in
the third quarter of 2017, or a 2.8% increase. The increase
in revenue compared with the prior year quarter principally
resulted from the following events:
- $16.0 million of additional revenue compared to the prior year
quarter under existing and new contracts with the USMS and U.S.
Immigration and Customs Enforcement (ICE).
- $11.7 million of additional revenue compared with the prior
year quarter under new contracts with the states of Kentucky,
Nevada, Ohio, South Carolina and Wyoming.
Partially offsetting these increases in revenue were the
following previously disclosed events:
- Continued decrease in inmate populations from the state of
California, which resulted in a reduction to revenue of $13.0
million.
- Expiration of three managed-only contracts with the state of
Texas in the third quarter of 2017. While these facilities
collectively generated $6.6 million of total revenue in the third
quarter of 2017, they incurred operating losses of $0.5 million
before depreciation and amortization during such period.
CoreCivic Community
Total revenue for the CoreCivic Community portfolio in the third
quarter of 2018 was $25.1 million compared with $19.2 million in
the third quarter of 2017, or a 30.9% increase. The increase
in revenue compared with the prior year quarter principally
resulted from the following previously disclosed events:
- $2.4 million of additional revenue compared with the prior year
quarter resulting from the acquisition of four additional
residential reentry facilities, representing an aggregate of 514
additional beds, since the beginning of the third quarter
2017.
- $4.2 million of additional revenue compared with the prior year
quarter generated from non-residential electronic monitoring and
case management services, resulting from the January 2018
acquisition of Rocky Mountain Offender Management Systems,
LLC.
CoreCivic Properties
Total revenue for the CoreCivic Properties portfolio in the
third quarter of 2018 was $15.3 million compared with $10.2 million
in the third quarter of 2017, an increase of 49.7%. The
increase in revenue compared with the prior year quarter
principally resulted from the previously disclosed acquisitions
of:
- Capital Commerce Center, a 260,867 square-foot property in
Tallahassee, Florida leased primarily to an agency of the state of
Florida, completed in January 2018.
- A twelve-property portfolio of single-tenant properties
containing a total of 106,881 square feet, each separately leased
to the federal government, completed in July 2018.
- SSA-Baltimore, a 540,566 square foot property in Baltimore,
Maryland leased to the Social Security Administration (SSA) through
the General Services Administration (GSA), completed in August
2018.
Business Development Update
Safety Segment
Expansion of the Otay Mesa Detention Center.
As a result of long-standing demand from the USMS and ICE,
and limited detention capacity in the Southwest region of the
United States, necessary permits were obtained during the fourth
quarter of 2018 to expand the 1,482-bed Otay Mesa Detention Center
in San Diego, California by 512 beds. The expansion is
expected to be complete during the fourth quarter of 2019 at an
estimated cost of approximately $43.0 million, including $5.8
million incurred through September 30, 2018 for architectural and
related costs. Both the USMS and ICE currently utilize the
Otay Mesa Detention Center under an existing contract that enables
both agencies to utilize the additional capacity without any
contract modifications.
New Contract with the Vermont Department of Corrections
at the Tallahatchie County Correctional Facility. On
September 19, 2018, the Company entered into a new contract with
the Vermont Department of Corrections to care for up to 350 of the
State's inmates at our Tallahatchie County Correctional
Facility. The new management contract commenced on October 1,
2018, and has an initial term of two years, with one two-year
extension option upon mutual agreement. The Company currently
cares for approximately 200 inmates from the state of Vermont at
the Tallahatchie facility pursuant to this contract.
New Contract with Immigration & Customs Enforcement
at the La Palma Correctional Center. On July 24,
2018, the Company announced that the city of Eloy agreed to modify
an existing Intergovernmental Agreement with ICE to add our La
Palma Correctional Center as an additional place of
performance. The Company currently cares for approximately
875 ICE detainees at this facility.
Properties Segment
Acquisition of National Archives and Records
Administration Facility in Dayton, Ohio. On
September 21, 2018, the Company completed the acquisition of a
217,394-square foot, steel frame warehouse in Dayton, Ohio for $6.9
million, excluding transaction-related costs and certain closing
credits, that was built-to-suit for the National Archives and
Records Administration (NARA) in 2002 (NARA – Dayton). After
accounting for approximately $0.8 million of additional capital
expenditures, this property is expected to generate a
capitalization rate of approximately 15.0%. The building
consists of 212,664 square feet of warehouse storage with five
individual storage bays, a central service corridor, receiving
facilities and 4,730 square feet of office space. NARA-Dayton
is 100% leased to the GSA on behalf of NARA through January 2023
and includes two 10-year renewal options. The facility
provides 1.2 million cubic feet of storage space, approximately 90%
of which is dedicated to archives of the U.S. Internal Revenue
Service.
Acquisition of 540,566 SF Social Security
Administration Facility in Baltimore, Maryland. On
August 23, 2018, the Company completed the acquisition of a
540,566-square foot office building in Baltimore, Maryland leased
to the SSA through the GSA (SSA–Baltimore) for a total purchase
price of $242.0 million, excluding transaction costs and certain
closing credits. SSA–Baltimore was purpose built to SSA
specifications in 2014 under a 20-year firm term lease expiring in
January 2034. SSA–Baltimore serves approximately 2,000 SSA
employees, is located less than five miles from SSA's federally
owned headquarters in Woodlawn, Maryland, and is the newest of
several other properties occupied by the SSA in Baltimore, which we
believe further strengthens the durability of the lease. In
connection with the acquisition, the Company assumed $157.3 million
of in-place financing that was used to fund the initial
construction of the property in 2014. The assumed debt
carries a fixed interest rate of 4.50% and requires monthly
principal and interest payments, with a balloon payment of $40
million due at maturity in February 2034.
2018 Financial Guidance
Based on current business conditions the Company is providing
the following financial guidance for the fourth quarter 2018 and
the following updated guidance for the full year 2018:
|
Fourth Quarter
2018 |
Full Year
2018 |
|
Prior Guidance |
Current Guidance |
|
$0.39 to $0.41 |
$1.43 to $1.47 |
$1.38 to $1.40 |
- Adjusted EPS per diluted share
|
$0.39 to $0.41 |
$1.47 to $1.51 |
$1.44 to $1.46 |
|
$0.60 to $0.63 |
$2.26 to $2.30 |
$2.24 to $2.26 |
- Normalized FFO per diluted share
|
$0.61 to $0.63 |
$2.29 to $2.33 |
$2.29 to $2.31 |
Our full year 2018 financial guidance was adjusted from the
previously disclosed full year 2018 guidance for higher salaries
expense primarily to reflect the decision to maintain higher
personnel expenses at certain facilities in anticipation of near
term growth prospects from potential new contracts and increased
utilization of available capacity under existing
contracts.
During 2018, the Company expects to invest approximately $141.1
million to $147.6 million in capital expenditures, consisting of
approximately $78.1 million to $82.6 million in prison construction
and expansion costs, including primarily costs associated with the
construction project in Lansing, Kansas and the aforementioned
expansion of our Otay Mesa Detention Center; approximately $28.5
million to $29.0 million in maintenance capital expenditures on
real estate assets; and approximately $34.5 million to $36.0
million for capital expenditures on other assets and information
technology. These estimates exclude M&A activity.
Supplemental Financial Information and Investor
Presentations
We have made available on our website supplemental financial
information and other data for the third quarter of 2018.
Interested parties may access this information through our website
at http://ir.corecivic.com/ under “Financial Information” of the
Investors section. We do not undertake any obligation, and
disclaim any duties to update any of the information disclosed in
this report.
Management may meet with investors from time to
time during the fourth quarter of 2018. Written materials
used in the investor presentations will also be available on our
website beginning on or about November 7, 2018. Interested
parties may access this information through our website at
http://ir.corecivic.com/ under “Events & Presentations” of the
Investors section.
Webcast and Replay Information
The Company will host a webcast conference call at 10:00 a.m.
Central Time (11:00 a.m. Eastern Time) on Tuesday, November 6,
2018, to discuss our third quarter 2018 financial results and
updated full year 2018 outlook. Interested parties may access
this information through our website at http://ir.corecivic.com/
under “Events & Presentations” of the Investors page. 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 6, 2018, through 1:00 p.m.
Central Time (2:00 p.m. Eastern time) on November 14, 2018. To
access the telephonic replay, dial 888-203-1112 in the U.S. and
Canada. International callers may dial +1 719-457-0820 and
enter passcode 6490015.
About CoreCivic
The Company is a diversified government solutions company with
the scale and experience needed to solve tough government
challenges in flexible cost-effective ways. We provide a broad
range of solutions to government partners that serve the public
good through corrections and detention management, a growing
network of residential reentry centers to help address America’s
recidivism crisis, and government real estate solutions. We are a
publicly traded real estate investment trust (REIT) and the
nation’s largest owner of partnership correctional, detention and
residential reentry facilities. We also believe we are the largest
private owner of real estate used by U.S. government
agencies. The Company has been a flexible and dependable
partner for government for more than 35 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, contract renegotiations or terminations, increases in
costs 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,
negative publicity, 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, detention, and
residential reentry 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, the continued utilization of the STFRC by ICE 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
identify and consummate future acquisitions and our ability to
successfully integrate the operations of completed acquisitions and
realize projected returns resulting therefrom; (viii)
increases in costs to develop or expand real estate properties that
exceed original estimates, or the inability to complete such
projects on schedule as a result of various factors, many of which
are beyond our control, such as weather, labor conditions, cost
inflation, and material shortages, resulting in increased
construction costs; (ix) our ability to meet and maintain
qualification for taxation as a REIT; and (x) the availability of
debt and equity financing on terms that are favorable to us, or at
all. 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
30,2018 |
|
December 31,2017 |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
93,625 |
|
|
$ |
52,183 |
|
Restricted cash |
|
|
11,103 |
|
|
|
- |
|
Accounts receivable,
net of allowance of $919 and $782, respectively |
|
|
234,162 |
|
|
|
254,188 |
|
Prepaid expenses and
other current assets |
|
|
27,965 |
|
|
|
21,119 |
|
Total current
assets |
|
|
366,855 |
|
|
|
327,490 |
|
|
|
|
|
|
Property and equipment,
net of accumulated depreciation of $1,576,128 and $1,475,951,
respectively |
|
|
3,023,963 |
|
|
|
2,802,449 |
|
Goodwill |
|
|
43,996 |
|
|
|
40,927 |
|
Non-current deferred
tax assets |
|
|
14,309 |
|
|
|
12,814 |
|
Other assets |
|
|
134,909 |
|
|
|
88,718 |
|
|
|
|
|
|
Total
assets |
|
$ |
3,584,032 |
|
|
$ |
3,272,398 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses |
|
$ |
307,689 |
|
|
$ |
277,804 |
|
Income taxes
payable |
|
|
1,375 |
|
|
|
3,034 |
|
Current portion of
long-term debt |
|
|
12,795 |
|
|
|
10,000 |
|
Total current
liabilities |
|
|
321,859 |
|
|
|
290,838 |
|
|
|
|
|
|
Long-term debt,
net |
|
|
1,752,185 |
|
|
|
1,437,187 |
|
Deferred revenue |
|
|
29,510 |
|
|
|
39,735 |
|
Other liabilities |
|
|
58,403 |
|
|
|
53,030 |
|
|
|
|
|
|
Total
liabilities |
|
|
2,161,957 |
|
|
|
1,820,790 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Preferred stock ― $0.01
par value; 50,000 shares authorized; none issued and outstanding at
September 30, 2018 and December 31, 2017, respectively |
|
|
- |
|
|
|
- |
|
Common stock ― $0.01
par value; 300,000 shares authorized; 118,670 and 118,204 shares
issued and outstanding at September 30, 2018 and December 31, 2017,
respectively |
|
|
1,187 |
|
|
|
1,182 |
|
Additional paid-in
capital |
|
|
1,803,903 |
|
|
|
1,794,713 |
|
Accumulated
deficit |
|
|
(383,015 |
) |
|
|
(344,287 |
) |
|
|
|
|
|
Total
stockholders’ equity |
|
|
1,422,075 |
|
|
|
1,451,608 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
$ |
3,584,032 |
|
|
$ |
3,272,398 |
|
|
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
EndedSeptember 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Safety |
|
|
422,313 |
|
|
|
410,975 |
|
|
|
1,240,019 |
|
|
|
1,238,439 |
|
Community |
|
|
25,133 |
|
|
|
19,199 |
|
|
|
74,651 |
|
|
|
53,832 |
|
Properties |
|
|
15,281 |
|
|
|
10,206 |
|
|
|
38,897 |
|
|
|
30,094 |
|
Other |
|
|
1 |
|
|
|
2,465 |
|
|
|
6 |
|
|
|
2,557 |
|
|
|
|
462,728 |
|
|
|
442,845 |
|
|
|
1,353,573 |
|
|
|
1,324,922 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
|
|
Safety |
|
|
310,698 |
|
|
|
300,577 |
|
|
|
905,670 |
|
|
|
894,077 |
|
Community |
|
|
18,911 |
|
|
|
13,504 |
|
|
|
57,035 |
|
|
|
37,498 |
|
Properties |
|
|
4,020 |
|
|
|
2,619 |
|
|
|
10,306 |
|
|
|
8,025 |
|
Other |
|
|
130 |
|
|
|
165 |
|
|
|
438 |
|
|
|
465 |
|
Total operating
expenses |
|
|
333,759 |
|
|
|
316,865 |
|
|
|
973,449 |
|
|
|
940,065 |
|
General and
administrative |
|
|
25,085 |
|
|
|
28,303 |
|
|
|
77,594 |
|
|
|
79,546 |
|
Depreciation and
amortization |
|
|
39,465 |
|
|
|
36,507 |
|
|
|
116,114 |
|
|
|
109,564 |
|
Asset
impairments |
|
|
- |
|
|
|
355 |
|
|
|
1,580 |
|
|
|
614 |
|
|
|
|
398,309 |
|
|
|
382,030 |
|
|
|
1,168,737 |
|
|
|
1,129,789 |
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME |
|
|
64,419 |
|
|
|
60,815 |
|
|
|
184,836 |
|
|
|
195,133 |
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE: |
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
20,534 |
|
|
|
17,029 |
|
|
|
58,608 |
|
|
|
50,141 |
|
Expenses
associated with debt refinancing transactions |
|
|
- |
|
|
|
- |
|
|
|
1,016 |
|
|
|
- |
|
Other
(income) expense |
|
|
49 |
|
|
|
(65 |
) |
|
|
39 |
|
|
|
(108 |
) |
|
|
|
20,583 |
|
|
|
16,964 |
|
|
|
59,663 |
|
|
|
50,033 |
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAXES |
|
|
43,836 |
|
|
|
43,851 |
|
|
|
125,173 |
|
|
|
145,100 |
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
(2,842 |
) |
|
|
(2,673 |
) |
|
|
(7,205 |
) |
|
|
(8,400 |
) |
NET INCOME |
|
$ |
40,994 |
|
|
$ |
41,178 |
|
|
$ |
117,968 |
|
|
$ |
136,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS
PER SHARE |
|
$ |
0.35 |
|
|
$ |
0.35 |
|
|
$ |
1.00 |
|
|
$ |
1.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EARNINGS PER SHARE |
|
$ |
0.34 |
|
|
$ |
0.35 |
|
|
$ |
0.99 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
DIVIDENDS
DECLARED PER SHARE |
|
$ |
0.43 |
|
|
$ |
0.42 |
|
|
$ |
1.29 |
|
|
$ |
1.26 |
|
|
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 Months
EndedSeptember 30, |
|
For the Nine Months
EndedSeptember 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
Net income |
$ |
40,994 |
|
$ |
41,178 |
|
$ |
117,968 |
|
$ |
136,700 |
Special items: |
|
|
|
|
|
|
|
Expenses
associated with debt refinancing transactions |
|
- |
|
|
- |
|
|
1,016 |
|
|
- |
Charges
associated with adoption of tax reform |
|
1,024 |
|
|
- |
|
|
1,024 |
|
|
- |
Expenses
associated with mergers and acquisitions |
|
994 |
|
|
1,093 |
|
|
2,333 |
|
|
1,524 |
Asset
impairments |
|
- |
|
|
355 |
|
|
1,580 |
|
|
614 |
Adjusted net
income |
$ |
43,012 |
|
$ |
42,626 |
|
$ |
123,921 |
|
$ |
138,838 |
Weighted average common
shares outstanding – basic |
|
118,597 |
|
|
118,182 |
|
|
118,544 |
|
|
118,044 |
Effect of dilutive
securities: |
|
|
|
|
|
|
|
Stock
options |
|
178 |
|
|
262 |
|
|
123 |
|
|
353 |
Restricted stock-based awards |
|
74 |
|
|
84 |
|
|
44 |
|
|
62 |
Weighted average shares
and assumed conversions - diluted |
|
118,849 |
|
|
118,528 |
|
|
118,711 |
|
|
118,459 |
Adjusted Diluted
Earnings Per Share |
$ |
0.36 |
|
$ |
0.36 |
|
$ |
1.04 |
|
$ |
1.17 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS) |
|
CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS
FROM OPERATIONS |
|
|
For the Three Months
EndedSeptember 30, |
|
For the Nine Months
EndedSeptember 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
Net income |
$ |
40,994 |
|
$ |
41,178 |
|
$ |
117,968 |
|
$ |
136,700 |
Depreciation and
amortization of real estate assets |
|
25,460 |
|
|
23,762 |
|
|
74,789 |
|
|
71,417 |
Impairment of real
estate assets |
|
- |
|
|
355 |
|
|
1,580 |
|
|
355 |
Funds
From Operations |
$ |
66,454 |
|
$ |
65,295 |
|
$ |
194,337 |
|
$ |
208,472 |
|
|
|
|
|
|
|
|
Expenses associated
with debt refinancing transactions |
|
- |
|
|
- |
|
|
1,016 |
|
|
- |
Charges associated with
adoption of tax reform |
|
1,024 |
|
|
- |
|
|
1,024 |
|
|
- |
Expenses associated
with mergers and acquisitions |
|
994 |
|
|
1,093 |
|
|
2,333 |
|
|
1,524 |
Goodwill and other
impairments |
|
- |
|
|
- |
|
|
- |
|
|
259 |
Normalized Funds From Operations |
$ |
68,472 |
|
$ |
66,388 |
|
$ |
198,710 |
|
$ |
210,255 |
|
|
|
|
|
|
|
|
Funds From Operations
Per Diluted Share |
$ |
0.56 |
|
$ |
0.55 |
|
$ |
1.64 |
|
$ |
1.76 |
Normalized Funds From
Operations Per Diluted Share |
$ |
0.58 |
|
$ |
0.56 |
|
$ |
1.67 |
|
$ |
1.77 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS) |
|
CALCULATION OF EBITDA AND ADJUSTED EBITDA |
|
|
For the Three Months
EndedSeptember 30, |
|
For the Nine Months
EndedSeptember 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
40,994 |
|
|
$ |
41,178 |
|
|
$ |
117,968 |
|
|
$ |
136,700 |
|
Interest expense |
|
20,881 |
|
|
|
17,239 |
|
|
|
59,611 |
|
|
|
50,890 |
|
Depreciation and
amortization |
|
39,465 |
|
|
|
36,507 |
|
|
|
116,114 |
|
|
|
109,564 |
|
Income tax expense |
|
2,842 |
|
|
|
2,673 |
|
|
|
7,205 |
|
|
|
8,400 |
|
EBITDA |
$ |
104,182 |
|
|
$ |
97,597 |
|
|
$ |
300,898 |
|
|
$ |
305,554 |
|
Expenses associated
with debt refinancing transactions |
|
- |
|
|
|
- |
|
|
|
1,016 |
|
|
|
- |
|
Expenses associated
with mergers and acquisitions |
|
994 |
|
|
|
1,093 |
|
|
|
2,333 |
|
|
|
1,524 |
|
Depreciation expense
associated with STFRC lease |
|
(4,147 |
) |
|
|
(4,147 |
) |
|
|
(12,306 |
) |
|
|
(12,306 |
) |
Interest expense
associated with STFRC lease |
|
(1,362 |
) |
|
|
(1,585 |
) |
|
|
(4,268 |
) |
|
|
(4,890 |
) |
Asset impairments |
|
- |
|
|
|
355 |
|
|
|
1,580 |
|
|
|
614 |
|
Adjusted
EBITDA |
$ |
99,667 |
|
|
$ |
93,313 |
|
|
$ |
289,253 |
|
|
$ |
290,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018 |
For the Year Ending December
31, 2018 |
|
Low End of Guidance |
High End of Guidance |
Low End of Guidance |
High End of Guidance |
Net income |
$ |
45,750 |
|
$ |
48,250 |
|
$ |
163,797 |
|
$ |
166,297 |
|
Expenses
associated with debt refinancing transactions |
|
- |
|
|
- |
|
|
1,016 |
|
|
1,016 |
|
Charges
associated with the adoption of tax reform |
|
- |
|
|
- |
|
|
1,024 |
|
|
1,024 |
|
Expenses
associated with mergers and acquisitions |
|
750 |
|
|
750 |
|
|
3,083 |
|
|
3,083 |
|
Asset
impairments |
|
- |
|
|
- |
|
|
1,580 |
|
|
1,580 |
|
Adjusted
net income |
$ |
46,500 |
|
$ |
49,000 |
|
$ |
170,500 |
|
$ |
173,000 |
|
|
|
|
|
|
Net
income |
$ |
45,750 |
|
$ |
48,250 |
|
$ |
163,797 |
|
$ |
166,297 |
|
Depreciation and
amortization of real estate assets |
|
26,000 |
|
|
26,000 |
|
|
101,000 |
|
|
101,000 |
|
Asset
impairments |
|
- |
|
|
- |
|
|
1,580 |
|
|
1,580 |
|
Funds
From Operations |
$ |
71,750 |
|
$ |
74,250 |
|
$ |
266,377 |
|
$ |
268,877 |
|
Expenses
associated with debt refinancing transactions |
|
- |
|
|
- |
|
|
1,016 |
|
|
1,016 |
|
Charges
associated with the adoption of tax reform |
|
- |
|
|
- |
|
|
1,024 |
|
|
1,024 |
|
Expenses
associated with mergers and acquisitions |
|
750 |
|
|
750 |
|
|
3,083 |
|
|
3,083 |
|
Normalized Funds From Operations |
$ |
72,500 |
|
$ |
75,000 |
|
$ |
271,500 |
|
$ |
274,000 |
|
Diluted
EPS |
$ |
0.39 |
|
$ |
0.41 |
|
$ |
1.38 |
|
$ |
1.40 |
|
Adjusted
EPS per diluted share |
$ |
0.39 |
|
$ |
0.41 |
|
$ |
1.44 |
|
$ |
1.46 |
|
FFO per
diluted share |
$ |
0.60 |
|
$ |
0.63 |
|
$ |
2.24 |
|
$ |
2.26 |
|
Normalized FFO per diluted share |
$ |
0.61 |
|
$ |
0.63 |
|
$ |
2.29 |
|
$ |
2.31 |
|
|
|
|
|
|
Net
income |
$ |
45,750 |
|
$ |
48,250 |
|
$ |
163,797 |
|
$ |
166,297 |
|
Interest
expense |
|
22,500 |
|
|
22,000 |
|
|
82,000 |
|
|
81,500 |
|
Depreciation and amortization |
|
40,000 |
|
|
40,000 |
|
|
156,000 |
|
|
156,000 |
|
Income
tax expense |
|
2,750 |
|
|
2,250 |
|
|
10,000 |
|
|
9,500 |
|
EBITDA |
$ |
111,000 |
|
$ |
112,500 |
|
$ |
411,797 |
|
$ |
413,297 |
|
Expenses
associated with debt refinancing transactions |
|
- |
|
|
- |
|
|
1,016 |
|
|
1,016 |
|
Expenses
associated with mergers and acquisitions |
|
750 |
|
|
750 |
|
|
3,083 |
|
|
3,083 |
|
Depreciation expense associated with STFRC lease |
|
(4,200 |
) |
|
(4,200 |
) |
|
(16,500 |
) |
|
(16,500 |
) |
Interest
expense associated with STFRC lease |
|
(1,400 |
) |
|
(1,400 |
) |
|
(5,500 |
) |
|
(5,500 |
) |
Asset
impairments |
|
- |
|
|
- |
|
|
1,580 |
|
|
1,580 |
|
Adjusted
EBITDA |
$ |
106,150 |
|
$ |
107,650 |
|
$ |
395,476 |
|
$ |
396,976 |
|
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
GAAP, 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, M&A
activity, restructuring charges, and certain impairments and other
charges 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 |
|
|
|
CoreCivic (NYSE:CXW)
Historical Stock Chart
From Mar 2024 to Apr 2024
CoreCivic (NYSE:CXW)
Historical Stock Chart
From Apr 2023 to Apr 2024