Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 001-16109

CORECIVIC, INC.

(Exact name of registrant as specified in its charter)


MARYLAND	62-1763875
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

5501 VIRGINIA WAY BRENTWOOD, TENNESSEE	37027 (Zip Code)
(Address of principal executive offices)

(615) 263-3000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CXW	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each class of Common Stock as of October 28, 2022:

Shares of Common Stock, $0.01 par value per share: 114,981,165 shares outstanding.

CORECIVIC, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

INDEX


		PAGE
PART 1 – FINANCIAL INFORMATION

Item 1.	Financial Statements	1
a)	Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1
b)	Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2022 and 2021	2
c)	Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2022 and 2021	3
d)	Consolidated Statement of Stockholders' Equity (Unaudited) for the quarterly periods ended September 30, 2022	4
e)	Consolidated Statement of Stockholders' Equity (Unaudited) for the quarterly periods ended September 30, 2021	5
f)	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46

SIGNATURES		47

PART I – FINANCIAL INFORMATION

ITEM 1. – FINANCIAL STATEMENTS.

CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


ASSETS	September 30, 2022			December 31, 2021
Cash and cash equivalents	$	185,328		$	299,645
Restricted cash		13,833			11,062
Accounts receivable, net of credit loss reserve of $8,332 and $7,931, respectively		293,395			282,809
Prepaid expenses and other current assets		30,748			26,872
Assets held for sale		6,659			6,996
Total current assets		529,963			627,384
Real estate and related assets:
Property and equipment, net of accumulated depreciation of $1,688,390 and $1,657,709, respectively		2,176,050			2,283,256
Other real estate assets		210,242			218,915
Goodwill		4,844			4,844
Other assets		349,827			364,539
Total assets	$	3,270,926		$	3,498,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses	$	295,671		$	305,592
Current portion of long-term debt		177,556			35,376
Total current liabilities		473,227			340,968
Long-term debt, net		1,113,938			1,492,046
Deferred revenue		23,830			27,551
Non-current deferred tax liabilities		97,689			88,157
Other liabilities		160,067			177,748
Total liabilities		1,868,751			2,126,470
Commitments and contingencies
Preferred stock – $0.01 par value; 50,000 shares authorized; none issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—			—
Common stock – $0.01 par value; 300,000 shares authorized; 114,981 and 120,285 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		1,150			1,203
Additional paid-in capital		1,801,867			1,869,955
Accumulated deficit		(400,842	)		(498,690	)
Total stockholders' equity		1,402,175			1,372,468
Total liabilities and stockholders' equity	$	3,270,926		$	3,498,938

The accompanying notes are an integral part of these consolidated financial statements.

CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
REVENUE	$	464,211		$	471,194		$	1,373,896		$	1,390,483
EXPENSES:
Operating		368,194			338,192			1,061,823			1,004,146
General and administrative		30,194			34,600			92,808			97,358
Depreciation and amortization		31,931			33,991			96,218			100,787
Shareholder litigation expense		—			—			1,900			54,295
Asset impairments		3,513			5,177			3,513			9,351
		433,832			411,960			1,256,262			1,265,937
OTHER INCOME (EXPENSE):
Interest expense, net		(20,793	)		(20,653	)		(65,381	)		(62,303	)
Expenses associated with debt repayments and refinancing transactions		(783	)		—			(7,588	)		(52,167	)
Gain on sale of real estate assets, net		83,828			—			87,149			38,766
Other income (expense)		(71	)		49			934			(107	)
INCOME BEFORE INCOME TAXES		92,560			38,630			132,748			48,735
Income tax expense		(24,242	)		(8,618	)		(34,865	)		(128,668	)
NET INCOME (LOSS)	$	68,318		$	30,012			97,883			(79,933	)
BASIC EARNINGS (LOSS) PER SHARE	$	0.59		$	0.25		$	0.82		$	(0.67	)
DILUTED EARNINGS (LOSS) PER SHARE	$	0.58		$	0.25		$	0.82		$	(0.67	)

The accompanying notes are an integral part of these consolidated financial statements.

CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED AND AMOUNTS IN THOUSANDS)


	For the Nine Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	97,883		$	(79,933	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		96,218			100,787
Asset impairments		3,513			9,351
Amortization of debt issuance costs and other non-cash interest		4,421			5,614
Expenses associated with debt repayments and refinancing transactions		7,588			52,167
Gain on sale of real estate assets, net		(87,149	)		(38,766	)
Deferred income taxes		9,532			93,849
Non-cash revenue and other income		(3,155	)		35
Non-cash equity compensation		11,707			13,639
Other expenses and non-cash items		4,565			4,357
Changes in assets and liabilities, net:
Accounts receivable, prepaid expenses and other assets		(14,963	)		36,278
Accounts payable, accrued expenses and other liabilities		(11,971	)		86,763
Net cash provided by operating activities		118,189			284,141
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for facility development and expansions		(17,249	)		(14,541	)
Expenditures for other capital improvements		(33,669	)		(38,439	)
Net proceeds from sale of assets		156,169			320,726
(Increase) decrease in other assets		(3,363	)		6,777
Net cash provided by investing activities		101,888			274,523
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt		100,000			740,563
Scheduled principal repayments		(12,664	)		(27,409	)
Principal repayments of credit facility		—			(284,000	)
Repayment of non-recourse mortgage notes		—			(161,930	)
Other repayments of debt		(332,159	)		(425,988	)
Payment of debt defeasance, issuance and other refinancing and related costs		(6,402	)		(64,425	)
Payment of lease obligations for financing leases		(432	)		(418	)
Contingent consideration for acquisition of business		—			(1,000	)
Dividends paid on RSUs		(886	)		(2,508	)
Purchase and retirement of common stock		(79,080	)		(1,639	)
Net cash used in financing activities		(331,623	)		(228,754	)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(111,546	)		329,910
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		310,707			136,768
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	199,161		$	466,678
NON-CASH INVESTING AND FINANCING ACTIVITIES
Establishment of right of use assets and lease liabilities	$	1,610		$	621
Distributions to non-controlling interest	$	—		$	5,897
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amounts capitalized of $0.8 million and $0.2 million in 2022 and 2021, respectively)	$	50,840		$	37,651
Income taxes paid	$	25,191		$	23,266

The accompanying notes are an integral part of these consolidated financial statements.

CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE QUARTERLY PERIODS ENDED SEPTEMBER 30, 2022

(UNAUDITED AND AMOUNTS IN THOUSANDS)


	Stockholders' Equity
							Additional						Total
	Common Stock						Paid-in			Accumulated			Stockholders'
	Shares			Par Value			Capital			Deficit			Equity
Balance as of December 31, 2021		120,285		$	1,203		$	1,869,955		$	(498,690	)	$	1,372,468
Net income		—			—			—			19,003			19,003
Retirement of common stock		(518	)		(5	)		(5,139	)		—			(5,144	)
Dividends on RSUs		—			—			—			(77	)		(77	)
Restricted stock compensation, net of forfeitures		—			—			5,267			—			5,267
Restricted stock grants		1,819			18			(18	)		—			—
Balance as of March 31, 2022		121,586		$	1,216		$	1,870,065		$	(479,764	)	$	1,391,517
Net income		—			—			—			10,562			10,562
Retirement of common stock		(2,985	)		(30	)		(37,569	)		—			(37,599	)
Forfeiture of dividends on RSUs		—			—			—			7			7
Restricted stock compensation, net of forfeitures		—			—			4,453			—			4,453
Restricted stock grants		19			—			—			—			—
Balance as of June 30, 2022		118,620		$	1,186		$	1,836,949		$	(469,195	)	$	1,368,940
Net income		—			—			—			68,318			68,318
Retirement of common stock		(3,635	)		(36	)		(37,069	)		—			(37,105	)
Forfeiture of dividends on RSUs		—			—			—			35			35
Restricted stock compensation, net of forfeitures		—			—			1,987			—			1,987
Restricted stock grants		(4	)		—			—			—			—
Balance as of September 30, 2022		114,981		$	1,150		$	1,801,867		$	(400,842	)	$	1,402,175

The accompanying notes are an integral part of these consolidated financial statements.

CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE QUARTERLY PERIODS ENDED SEPTEMBER 30, 2021

(UNAUDITED AND AMOUNTS IN THOUSANDS)


	Stockholders' Equity															Non-controlling
							Additional						Total			Interest -
	Common Stock						Paid-in			Accumulated			Stockholders'			Operating			Total
	Shares			Par Value			Capital			Deficit			Equity			Partnership			Equity
Balance as of December 31, 2020		119,638		$	1,196		$	1,835,494		$	(446,519	)	$	1,390,171		$	23,271		$	1,413,442
Net loss		—			—			—			(125,568	)		(125,568	)		—			(125,568	)
Retirement of common stock		(220	)		(2	)		(1,632	)		—			(1,634	)		—			(1,634	)
Dividends on RSUs		—			—			—			(218	)		(218	)		—			(218	)
Restricted stock compensation, net of forfeitures		—			—			4,213			—			4,213			—			4,213
Restricted stock grants		859			9			(9	)		—			—			—			—
Balance as of March 31, 2021		120,277		$	1,203		$	1,838,066		$	(572,305	)	$	1,266,964		$	23,271		$	1,290,235
Net income		—			—			—			15,623			15,623			—			15,623
Forfeiture of dividends on RSUs		—			—			—			43			43			—			43
Restricted stock compensation, net of forfeitures		—			—			4,329			—			4,329			—			4,329
Restricted stock grants		8			—			—			—			—			—			—
Balance as of June 30, 2021		120,285		$	1,203		$	1,842,395		$	(556,639	)	$	1,286,959		$	23,271		$	1,310,230
Net income		—			—			—			30,012			30,012			—			30,012
Retirement of common stock		—			—			(5	)		—			(5	)		—			(5	)
Dividends on RSUs		—			—			—			(79	)		(79	)		—			(79	)
Restricted stock compensation, net of forfeitures		—			—			5,097			—			5,097			—			5,097
Distributions to non-controlling interest		—			—			—			—			—			(5,897	)		(5,897	)
Termination of operating partnership		—			—			17,374			—			17,374			(17,374	)		—
Balance as of September 30, 2021		120,285		$	1,203		$	1,864,861		$	(526,706	)	$	1,339,358		$	—		$	1,339,358

The accompanying notes are an integral part of these consolidated financial statements.

CORECIVIC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2022

ORGANIZATION AND OPERATIONS

CoreCivic, Inc. (together with its subsidiaries, the "Company" or "CoreCivic") is the nation's largest owner of partnership correctional, detention, and residential reentry facilities and one of the largest prison operators in the United States ("U.S."). The Company also believes it is the largest private owner of real estate used by government agencies in the U.S. Through three segments, CoreCivic Safety, CoreCivic Community, and CoreCivic Properties, the Company provides a broad range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America's recidivism crisis, and government real estate solutions. As of September 30, 2022, through its CoreCivic Safety segment, the Company operated 45 correctional and detention facilities, 40 of which the Company owned, with a total design capacity of approximately 68,000 beds. Through its CoreCivic Community segment, the Company owned and operated 24 residential reentry centers with a total design capacity of approximately 5,000 beds. In addition, through its CoreCivic Properties segment, the Company owned 8 properties for lease to third parties and used by government agencies, totaling 1.8 million square feet.

In addition to providing fundamental residential services, CoreCivic's correctional, detention, and reentry facilities offer a variety of rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training, and substance abuse treatment. These services are intended to help reduce recidivism and to prepare offenders for their successful reentry into society upon their release. CoreCivic also provides or makes available to offenders certain health care (including medical, dental, and mental health services), food services, and work and recreational programs.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim consolidated financial statements have been prepared by the Company and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year. Reference is made to the audited financial statements of CoreCivic included in its Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the "SEC") on February 18, 2022 (the "2021 Form 10-K") with respect to certain significant accounting and financial reporting policies as well as other pertinent information of the Company.

Risks and Uncertainties

On January 26, 2021, President Biden issued the Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities ("Private Prison EO"). The Private Prison EO directs the Attorney General to not renew United States Department of Justice ("DOJ") contracts with privately operated criminal detention facilities. Two agencies of the DOJ, the United States Marshals Service ("USMS") and the Federal Bureau of Prisons ("BOP"), utilize CoreCivic's services. U.S. Immigration and Customs Enforcement ("ICE") facilities are not covered by the Private Prison EO, as ICE is an agency of the Department of Homeland Security ("DHS"), not the DOJ, although it is possible that the federal government could choose to take similar action on ICE facilities in the future. CoreCivic currently has two detention facilities that have direct contracts with the USMS that expire in September 2023 and September 2025. The facility with the contract expiring in September 2023 services a substantial number of USMS detainees that the Company believes will be challenging to replace, and the Company intends to work with the USMS to enable it to continue to fulfill its mission. However, the Company can provide no assurance that this contract will be renewed or replaced upon expiration. It is too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future developments could occur prior to the scheduled expiration date.

As a result of the Private Prison EO, the Company expects that CoreCivic's management contract with the BOP at the McRae Correctional Facility will not be renewed when it expires in November 2022. As further described in Note 4, the Company completed the sale of the McRae facility in August 2022 to the Georgia Building Authority, and entered into an agreement to lease the facility through November 2022 to allow the Company to fulfill its obligations to the BOP. During 2021, the Company had four direct contracts with the USMS that expired and were not renewed. At one of these facilities, the Company entered into a new contract with a local government agency to utilize the beds previously contracted by the USMS. The local government agency is responsible for County inmates and federal detainees, including USMS detainees, and the County is using the facility to address its population needs. At another of these facilities, the Company expanded a state contract to utilize the beds previously contracted by the USMS. The remaining two facilities currently remain idle. The USMS and the BOP prison contracts accounted for 22% and 2%, respectively, of CoreCivic's total revenue for the nine months ended September 30, 2022, and 23% and 2%, respectively, of CoreCivic's total revenue for the year ended December 31, 2021.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants and the SEC applicable to financial statements beginning January 1, 2022 or later did not, or are not expected to, have a material effect on the Company's results of operations or financial position.

Fair Value of Financial Instruments

To meet the reporting requirements of Accounting Standards Codification ("ASC") 825, "Financial Instruments", regarding fair value of financial instruments, CoreCivic calculates the estimated fair value of financial instruments using market interest rates, quoted market prices of similar instruments, or discounted cash flow techniques with observable Level 1 inputs for publicly traded debt and Level 2 inputs for all other financial instruments, as defined in ASC 820, "Fair Value Measurement". At September 30, 2022 and December 31, 2021, there were no material differences between the carrying amounts and the estimated fair values of CoreCivic's financial instruments, other than as follows (in thousands):


	September 30, 2022						December 31, 2021
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Note receivable from Agecroft Prison Management, LTD	$	2,524		$	2,833		$	3,063		$	3,491
Debt	$	(1,307,109	)	$	(1,255,224	)	$	(1,551,932	)	$	(1,560,346	)

GOODWILL

ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment", establishes accounting and reporting requirements for goodwill and other intangible assets. Goodwill was $4.8 million as of September 30, 2022 and December 31, 2021, all of which was related to the Company's CoreCivic Safety segment.

CoreCivic performs its impairment tests during the fourth quarter in connection with its annual budgeting process, and whenever circumstances indicate the carrying value of goodwill may not be recoverable. Under the provisions of ASU 2017-04, CoreCivic performs a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company performs a quantitative impairment test. If a quantitative test is required, CoreCivic performs an assessment to identify the existence of impairment and to measure the excess of a reporting unit's carrying amount over its fair value by using a combination of various common valuation techniques, including market multiples and discounted cash flows under valuation methodologies that include an income approach and a market approach. The income valuation approach includes certain significant assumptions impacting projected future cash flows, such as projected revenue, projected operating costs, and the weighted average cost of capital, which are affected by expectations about future market or economic conditions. These impairment tests are required to be performed at least annually.

REAL ESTATE TRANSACTIONS

Assets Held For Sale and Dispositions

In September 2022, CoreCivic entered into a Letter of Intent with a third party for the sale of CoreCivic's Roth Hall Residential Reentry Center and the Walker Hall Residential Reentry Center, both of which are located in Philadelphia, Pennsylvania and reported in CoreCivic's Properties segment. The gross sales price for the properties is $6.3 million. The aggregate carrying value of the properties, amounting to $5.8 million, was reflected as assets held for sale on the Company's consolidated balance sheet as of September 30, 2022.

As of September 30, 2022, CoreCivic also had an additional idled residential reentry center in Oklahoma City, Oklahoma with a carrying value of $0.9 million classified as assets held for sale and reported in CoreCivic's Community segment. The facility is under a Purchase and Sale Agreement for a gross sales price of $1.0 million, which is expected to close in November 2022. Pursuant to the agreement to sell the Oklahoma City property, in the third quarter of 2022, CoreCivic recognized an impairment charge of $3.5 million associated with this facility, based on its estimated net realizable value less costs to sell.

On July 25, 2022, CoreCivic entered into a Purchase and Sale Agreement with the Georgia Building Authority for the sale of CoreCivic's McRae Correctional Facility located in McRae, Georgia, and reported in CoreCivic's Safety segment, for a gross sales price of $130.0 million. The sale of the McRae facility was completed on August 9, 2022. The sale generated net proceeds of $129.7 million, resulting in a gain on sale of $77.5 million after transaction costs, which was reported in the third quarter of 2022. CoreCivic currently has a management contract with the BOP at the McRae facility, which expires November 30, 2022. As previously disclosed, CoreCivic does not expect the BOP to renew the contract upon its expiration. In connection with the sale, CoreCivic and the Georgia Building Authority entered into an agreement to lease the McRae Correctional Facility to CoreCivic through November 30, 2022 to allow the Company to fulfill its obligations to the BOP.

During July 2022, CoreCivic sold its Stockton Female Community Corrections Facility and its Long Beach Community Corrections Center, both located in California, and reported in CoreCivic's Properties segment. The sale of these properties to a third party generated net sales proceeds of $10.9 million, resulting in a gain on sale of $2.3 million after transaction costs, which was reported in the third quarter of 2022. During July 2022, CoreCivic also sold an additional undeveloped parcel of land. The sale of this parcel generated net sales proceeds of $4.8 million, resulting in a gain of $4.2 million after transaction costs, which was reported in the third quarter of 2022.

During the second quarter of 2022, CoreCivic sold an undeveloped parcel of land in Kern, California. The sale generated net proceeds of $1.5 million, resulting in a gain on sale of $1.1 million after transaction costs.

As of December 31, 2021, CoreCivic had two facilities in its CoreCivic Community segment held for sale. The aggregate carrying value of the property and equipment of these two facilities, amounting to $7.0 million, was reflected as assets held for sale on the Company's consolidated balance sheet as of December 31, 2021. The Company closed on the sale of these two facilities, one of which was idle, in the first quarter of 2022. The aggregate net sales proceeds of the two facilities was $9.3 million, resulting in a net gain on sale of $2.3 million after transaction costs.

During the full year 2021, CoreCivic completed the sale of five government-leased properties in the Company's Properties segment. The sales of the five properties generated aggregate net proceeds of $125.0 million, after the repayment of mortgage debt and other transaction-related costs, resulting in an aggregate net gain on sale of $38.7 million.

CoreCivic determined that its joint venture investment in Government Real Estate Solutions, LLC ("GRES"), an unrestricted subsidiary previously controlled by the Company, represented a variable interest entity ("VIE") in accordance with ASC 810, "Consolidation". CoreCivic had 100% voting control in GRES. Accordingly, CoreCivic concluded that it was the primary beneficiary of GRES and consolidated the VIE. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. During June 2021, CoreCivic provided notice to the partners of GRES of its intent to distribute the remaining assets and terminate the partnership. The Company terminated the partnership in September 2021 and cancelled the applicable Operating Partnership Units for no consideration. During the third quarter of 2021, the Company reported an increase to stockholders' equity of $17.4 million resulting from the termination of the partnership.

Idle Facilities

As of September 30, 2022, CoreCivic had seven idled CoreCivic Safety correctional facilities that are currently available and being actively marketed as solutions to meet the needs of potential customers. The following table summarizes each of the idled facilities and their respective carrying values, excluding equipment and

Boards:

Quotes:

CXW