CoreCivic, Inc. (NYSE: CXW) (the Company)
announced today its financial results for the first quarter of
2023.
Damon T. Hininger, CoreCivic's President and Chief
Executive Officer, said, “We are pleased to report first quarter
results that were in line with our expectations, while we continue
to operate through a challenging labor market and execute on our
long-term capital allocation strategy. During the first quarter, we
generated $73.7 million of EBITDA that, along with existing
liquidity, enabled us to repay in full the $153.8 million
outstanding balance of our 4.625% Senior Notes that were scheduled
to mature on May 1, 2023. We also continued to execute on our share
repurchase program during the quarter by repurchasing 2.5 million
shares, representing an additional 2% of our outstanding shares, at
a total cost of $24.9 million.
Hininger continued, “We're also proud to have
recently released our fifth Environmental, Social and Governance
(ESG) Report. The ESG report details the ways we delivered reentry
and vocational programming designed to prepare those in our care
for long-lasting success upon reentry to their communities during
2022, a mission that our organization has been carrying out for
more than 40 years. I hope you have an opportunity to review our
latest ESG report to learn more about CoreCivic and the important
services we provide. We are proud of our history and our
accomplishments that truly help individuals in our care change
their lives for the better primarily through the strength and
volume of our evidence-based programs."
Financial Highlights – First Quarter 2023
- Total revenue of $458.0 million
- CoreCivic Safety revenue of $417.7
million
- CoreCivic Community revenue of $26.4
million
- CoreCivic Properties revenue of $13.8
million
- Net Income of $12.4 million
- Diluted earnings per share of $0.11
- Adjusted Diluted EPS of $0.13
- Normalized Funds From Operations per diluted share of
$0.34
- EBITDA of $73.7 million
First Quarter 2023 Financial Results Compared With First
Quarter 2022
Net income in the first quarter of 2023 totaled
$12.4 million, or $0.11 per diluted share, compared with net income
in the first quarter of 2022 of $19.0 million, or $0.16 per diluted
share. Adjusted for special items, adjusted net income in the first
quarter of 2023 was $14.7 million, or $0.13 per diluted share
(Adjusted Diluted EPS), compared with adjusted net income in the
first quarter of 2022 of $17.4 million, or $0.14 per diluted share.
Special items for each period are presented in detail in the
calculation of Adjusted Diluted EPS in the Supplemental Financial
Information following the financial statements presented
herein.
The $0.01 per share decline in Adjusted Diluted EPS
occurred despite transitioning to the previously announced contract
with the state of Arizona at our 3,060-bed La Palma Correctional
Center in Arizona, the expiration of our contract with the Federal
Bureau of Prisons (BOP) at the McRae Correctional Facility on
November 30, 2022, and ongoing labor market pressures, including
above average wage inflation. We substantially completed the
transition of inmate populations at the La Palma facility by the
end of 2022, but we continued to incur elevated operating expenses
during the first quarter of 2023 due to ongoing efforts to attract
and retain local staff at the facility. Despite the expiration of
the contract with the BOP at the McRae facility, a facility we sold
to the state of Georgia in 2022, our renewal rate on owned and
controlled facilities remains high at 94% over the previous five
years. We believe our renewal rate on existing contracts remains
high due to a variety of reasons including the aged and constrained
supply of available beds within the U.S. correctional system, our
ownership of the majority of the beds we operate, the value our
government partners place in the wide range of recidivism-reducing
programs we offer to those in our care, and the cost effectiveness
of the services we provide.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) was $73.7 million in the first quarter of
2023, compared with $83.0 million in the first quarter of 2022.
Adjusted EBITDA was $73.7 million in the first quarter of 2023,
compared with $80.8 million in the first quarter of 2022. Adjusted
EBITDA of $80.8 million in the prior year quarter excludes a net
gain on sale of real estate assets. Adjusted EBITDA decreased from
the prior year quarter primarily due to the previously mentioned
transition of offender populations at our La Palma Correctional
Center, which resulted in a reduction in EBITDA of $7.4 million,
and the expiration of our BOP contract at the McRae Correctional
Facility in November 2022, which resulted in a reduction in EBITDA
of $2.3 million from the first quarter of 2022 to the first quarter
of 2023. Due to an improving labor market, we achieved
higher staffing levels in the first quarter of 2023 than in the
prior year quarter; however, we incurred higher wage rates than in
the prior year quarter in order to attract and retain facility
staff in the challenging labor market. We also incurred higher
travel expenses in order to augment staffing levels at multiple
facilities. We believe these investments in staffing are
positioning us to manage the increased number of residents we
anticipate at our facilities once the remaining occupancy
restrictions attributable to COVID-19 are removed, most notably
Title 42, a policy that denies entry at the United States border to
asylum-seekers and anyone crossing the border without proper
documentation or authority in an effort to contain the spread of
COVID-19. Title 42 is currently scheduled to end in May
2023. Despite the difficult labor market, we have been able to
reduce certain labor-related expenses, such as registry nursing and
temporary incentives, which moderated during the first quarter of
2023 compared with the first quarter of 2022.
Funds From Operations (FFO) was $36.6 million, or
$0.32 per diluted share, in the first quarter of 2023, compared to
$41.5 million, or $0.34 per diluted share, in the first quarter of
2022. Normalized FFO, which excludes special items, was $38.9
million, or $0.34 per diluted share, in the first quarter of 2023,
compared with $41.5 million, or $0.34 per diluted share, in the
first quarter of 2022. Normalized FFO was impacted by
the same factors that affected Adjusted EBITDA.
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO,
and Normalized FFO, and, where appropriate, 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 the note following the financial
statements herein for further discussion and reconciliations of
these measures to net income, the most directly comparable GAAP
measure.
Asset Dispositions and Assets Held for Sale
During the third quarter of 2022, we began marketing for sale
our Roth Hall Residential Reentry Center and the Walker Hall
Residential Reentry Center, both of which are located in
Philadelphia, Pennsylvania and reported in our CoreCivic Properties
segment. The properties were classified as held for sale as of
March 31, 2023 and December 31, 2022. A purchase and sale agreement
for these two Philadelphia properties was executed in March 2023
and the properties were sold on May 2, 2023, generating net sales
proceeds of $5.8 million, which approximated the carrying value of
the properties. We are also marketing for sale a
residential reentry center in Denver, Colorado with a carrying
value of $1.2 million and reported in our CoreCivic Community
segment, which was also classified as held for sale as of March 31,
2023.
Share Repurchases
On May 12, 2022, our Board of Directors approved a share
repurchase program authorizing the Company to repurchase up to
$150.0 million of our common stock. On August 2, 2022, our Board of
Directors authorized an increase in our share repurchase program of
up to an additional $75.0 million in shares of our common stock, or
a total of up to $225.0 million. During the first quarter of 2023,
we repurchased 2.5 million shares of our common stock at an
aggregate purchase price of $24.9 million, excluding fees,
commissions and other costs related to the repurchases. Since the
share repurchase program was authorized, through March 31, 2023, we
have repurchased a total of 9.1 million shares at an aggregate
price of $99.4 million under this share repurchase program.
As of March 31, 2023, we had $125.6 million remaining under the
share repurchase program authorized by the Board of Directors.
Additional repurchases of common stock will be made in accordance
with applicable securities laws and may be made at management’s
discretion within parameters set by the Board of Directors from
time to time in the open market, through privately negotiated
transactions, or otherwise. The share repurchase program has no
time limit and does not obligate us to purchase any particular
amount of our common stock. The authorization for the share
repurchase program may be terminated, suspended, increased or
decreased by our Board of Directors in its discretion at any
time.
Debt Repayments
On December 22, 2022, we delivered an irrevocable notice to the
trustee of the holders of the 4.625% Senior Notes that we elected
to redeem in full the 4.625% Senior Notes that remained outstanding
on February 1, 2023. The 4.625% Senior Notes were redeemed on
February 1, 2023 at a redemption price equal to 100% of the
principal amount of the outstanding 4.625% Senior Notes, which
amounted to $153.8 million, plus accrued and unpaid interest to,
but not including, the redemption date. We used a combination of
cash on hand and available capacity under our Revolving Credit
Facility to fund the redemption. During the first quarter of 2023,
we reduced our total debt balance by $146.2 million, or by $48.2
million net of the change in cash. Following the redemption of the
4.625% Senior Notes, we have no debt maturities until 2026.
2023 Financial Guidance
Based on current business conditions, we are providing the
following update to our financial guidance for the full year
2023:
|
GuidanceFull Year 2023 |
Prior GuidanceFull Year 2023 |
|
$51.2 million to $63.2 million |
$58.0 million to $75.0 million |
|
$53.5 million to $65.5 million |
$58.0 million to $75.0 million |
|
$0.44 to $0.55 |
$0.50 to $0.65 |
|
$0.46 to $0.57 |
$0.50 to $0.65 |
|
$1.29 to $1.40 |
$1.35 to $1.50 |
- Normalized FFO per diluted share
|
$1.31 to $1.42 |
$1.35 to $1.50 |
|
$291.3 million to $301.3 million |
$298.5 million to $313.5 million |
|
$293.6 million to $303.6 million |
$298.5 million to $313.5 million |
|
Financial guidance has been updated to reflect a favorable $0.01
per share variance to our internal forecast for the first quarter
of 2023, offset by $0.04 per share to reflect the non-renewal of
our lease with the state of Oklahoma at our North Fork Correctional
Facility expiring June 30, 2023, which we previously disclosed on
April 24, 2023. In addition, we continue to negotiate in good faith
with the state of Oklahoma for the renewal of our contract to
manage our Davis Correctional Facility, which also expires June 30,
2023, and operated at a loss during 2022 and the first quarter of
2023. However, we have not yet been able to reach acceptable terms.
Our updated guidance was further reduced by $0.03 per share to
reflect the potential transition of inmate populations out of the
Davis Correctional Facility during the second quarter of 2023 and
idle operations during the second half of the year, which we did
not contemplate in our previous forecast. If we are able to reach
acceptable terms on a new agreement, the $0.03 per share reduction
will be avoided, as we would exceed our forecast by approximately
$0.02 per share during the second quarter by avoiding the
transition, and we would further exceed our guidance during the
second half of 2023, the magnitude of which would depend on the
terms of a new agreement.
During 2023, we expect to invest $64.0 million to $67.0 million
in capital expenditures, consisting of $36.0 million to $37.0
million in maintenance capital expenditures on real estate assets,
$25.0 million to $26.0 million for maintenance capital expenditures
on other assets and information technology, and $3.0 million to
$4.0 million for other capital investments. These capital
expenditure amounts are unchanged from our previous
guidance.
Supplemental Financial Information and Investor
Presentations
We have made available on our website supplemental financial
information and other data for the first quarter of 2023.
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 second quarter of 2023. Written materials used in
the investor presentations will also be available on our website
beginning on or about May 19, 2023. Interested parties may access
this information through our website at http://ir.corecivic.com/
under “Events & Presentations” of the Investors section.
Conference Call, 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, May 4, 2023, which will
be accessible through the Company's website at www.corecivic.com
under the “Events & Presentations” section of the "Investors"
page.
To participate via telephone and join the call live, please
register in advance here
https://register.vevent.com/register/BI6394fffe952b47d497a2735e53d08f32.
Upon registration, telephone participants will receive a
confirmation email detailing how to join the conference call,
including the dial-in number and a unique passcode.
About CoreCivic
CoreCivic 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 high-quality corrections and detention management, a
network of residential and non-residential alternatives to
incarceration to help address America’s recidivism crisis, and
government real estate solutions. We are the nation’s largest owner
of partnership correctional, detention and residential reentry
facilities, and one of the largest prison operators in the United
States. We have been a flexible and dependable partner for
government for 40 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
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, as amended. 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) changes in government
policy, legislation and regulations that affect utilization of the
private sector for corrections, detention, and residential reentry
services, in general, or our business, in particular, including,
but not limited to, the continued utilization of our correctional
and detention facilities by the federal government, including as a
consequence of the United States Department of Justice, or DOJ, not
renewing contracts as a result of President Biden's Executive Order
on Reforming Our Incarceration System to Eliminate the Use of
Privately Operated Criminal Detention Facilities, or the Private
Prison EO, impacting utilization primarily by the BOP and the
United States Marshals Service, and the impact of any changes to
immigration reform and sentencing laws (we do 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); (ii) 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;
(iii) changes in the privatization of the corrections and
detention industry, the acceptance of our services, the timing of
the opening of new facilities and the commencement of new
management contracts (including the extent and pace at which new
contracts are utilized), as well as our ability to utilize
available beds; (iv) 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; (v) fluctuations in our operating results
because of, among other things, changes in occupancy levels;
competition; contract renegotiations or terminations; inflation and
other increases in costs of operations, including a continuing rise
in labor costs; fluctuations in interest rates and risks of
operations; (vi) the duration of the federal government’s denial of
entry at the United States southern border to asylum-seekers and
anyone crossing the southern border without proper documentation or
authority in an effort to contain the spread of COVID-19, a policy
known as Title 42 (Title 42 is expected to end May 11, 2023, when
President Biden has decided to lift the public health emergency for
COVID-19, although its termination may be subject to ongoing
litigation, the outcome of which is unclear. Most recently, on
December 27, 2022, the Supreme Court granted a stay on the
cessation of Title 42, while it considers an appeal by a group of
states to continue the expulsions.); (vii) our ability to
successfully identify and consummate future development and
acquisition opportunities and realize projected returns resulting
therefrom; (viii) our ability to have met and maintained
qualification for taxation as a real estate investment trust, or
REIT, for the years we elected REIT status; and (ix) 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.
We take 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 SUBSIDIARIES |
CONSOLIDATED
BALANCE SHEETS |
(UNAUDITED AND
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
ASSETS |
|
March 31,2023 |
|
December 31,2022 |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
51,463 |
|
|
$ |
149,401 |
|
Restricted cash |
|
|
13,713 |
|
|
|
12,764 |
|
Accounts receivable, net of credit loss reserve of $8,122 and
$8,008, respectively |
|
|
256,175 |
|
|
|
312,435 |
|
Prepaid expenses and other current assets |
|
|
27,685 |
|
|
|
32,134 |
|
Assets held for sale |
|
|
6,936 |
|
|
|
6,936 |
|
Total current assets |
|
|
355,972 |
|
|
|
513,670 |
|
Real estate and related assets: |
|
|
|
|
Property and equipment, net of accumulated depreciation of
$1,743,783 and $1,716,283, respectively |
|
|
2,153,252 |
|
|
|
2,176,098 |
|
Other real estate assets |
|
|
206,736 |
|
|
|
208,181 |
|
Goodwill |
|
|
4,844 |
|
|
|
4,844 |
|
Other assets |
|
|
334,598 |
|
|
|
341,976 |
|
|
|
|
|
|
Total assets |
|
$ |
3,055,402 |
|
|
$ |
3,244,769 |
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
259,432 |
|
|
$ |
285,226 |
|
Current portion of long-term debt |
|
|
12,506 |
|
|
|
165,525 |
|
Total current liabilities |
|
|
271,938 |
|
|
|
450,751 |
|
|
|
|
|
|
Long-term debt, net |
|
|
1,092,623 |
|
|
|
1,084,858 |
|
Deferred revenue |
|
|
21,350 |
|
|
|
22,590 |
|
Non-current deferred tax liabilities |
|
|
101,183 |
|
|
|
99,618 |
|
Other liabilities |
|
|
148,576 |
|
|
|
154,544 |
|
|
|
|
|
|
Total liabilities |
|
|
1,635,670 |
|
|
|
1,812,361 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Preferred stock ― $0.01 par value; 50,000 shares authorized;
none issued and outstanding at March 31, 2023 and December 31,
2022, respectively |
|
|
- |
|
|
|
- |
|
Common stock ― $0.01 par value; 300,000 shares authorized;
113,685 and 114,988 shares issued and outstanding at March 31, 2023
and December 31, 2022, respectively |
|
|
1,137 |
|
|
|
1,150 |
|
Additional paid-in capital |
|
|
1,782,632 |
|
|
|
1,807,689 |
|
Accumulated deficit |
|
|
(364,037 |
) |
|
|
(376,431 |
) |
Total stockholders’ equity |
|
|
1,419,732 |
|
|
|
1,432,408 |
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
3,055,402 |
|
|
$ |
3,244,769 |
|
CORECIVIC,
INC. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(UNAUDITED AND
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
|
|
For the Three Months EndedMarch
31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
REVENUE: |
|
|
|
|
Safety |
|
$ |
417,650 |
|
|
$ |
414,248 |
|
Community |
|
|
26,414 |
|
|
|
24,115 |
|
Properties |
|
|
13,837 |
|
|
|
14,591 |
|
Other |
|
|
101 |
|
|
|
34 |
|
|
|
|
458,002 |
|
|
|
452,988 |
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
Operating |
|
|
|
|
Safety |
|
|
328,398 |
|
|
|
321,021 |
|
Community |
|
|
22,715 |
|
|
|
20,227 |
|
Properties |
|
|
3,361 |
|
|
|
3,282 |
|
Other |
|
|
63 |
|
|
|
99 |
|
Total operating expenses |
|
|
354,537 |
|
|
|
344,629 |
|
General and administrative |
|
|
32,679 |
|
|
|
31,101 |
|
Depreciation and amortization |
|
|
31,042 |
|
|
|
32,028 |
|
|
|
|
418,258 |
|
|
|
407,758 |
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
Interest expense, net |
|
|
(19,151 |
) |
|
|
(22,920 |
) |
Gain on sale of real estate assets, net |
|
|
- |
|
|
|
2,261 |
|
Other income (expense) |
|
|
(47 |
) |
|
|
1,042 |
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
20,546 |
|
|
|
25,613 |
|
|
|
|
|
|
Income tax expense |
|
|
(8,146 |
) |
|
|
(6,610 |
) |
NET INCOME |
|
$ |
12,400 |
|
|
$ |
19,003 |
|
|
|
|
|
|
BASIC EARNINGS PER SHARE |
|
$ |
0.11 |
|
|
$ |
0.16 |
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
$ |
0.11 |
|
|
$ |
0.16 |
|
CORECIVIC,
INC. AND SUBSIDIARIES |
SUPPLEMENTAL
FINANCIAL INFORMATION |
(UNAUDITED AND
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
CALCULATION OF ADJUSTED NET INCOME AND
ADJUSTED DILUTED EPS |
|
|
For the Three Months EndedMarch
31, |
|
2023 |
|
2022 |
|
|
|
|
Net
income |
$ |
12,400 |
|
$ |
19,003 |
|
|
|
|
|
Special items: |
|
|
|
Income tax expense associated with change in corporate tax
structure |
|
2,308 |
|
|
- |
|
Gain on sale of real estate assets, net |
|
- |
|
|
(2,261 |
) |
Income tax expense for special items |
|
- |
|
|
625 |
|
Adjusted net income |
$ |
14,708 |
|
$ |
17,367 |
|
Weighted average common shares outstanding – basic |
|
114,533 |
|
|
120,796 |
|
Effect of dilutive securities: |
|
|
|
Restricted stock-based awards |
|
937 |
|
|
624 |
|
Weighted average shares and assumed conversions - diluted |
|
115,470 |
|
|
121,420 |
|
Adjusted Diluted EPS |
$ |
0.13 |
|
$ |
0.14 |
|
CORECIVIC,
INC. AND SUBSIDIARIES |
SUPPLEMENTAL
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 EndedMarch
31, |
|
2023 |
|
2022 |
|
|
|
|
Net income |
$ |
12,400 |
|
$ |
19,003 |
|
Depreciation and amortization
of real estate assets |
|
24,171 |
|
|
24,166 |
|
Gain on sale of real estate
assets, net |
|
- |
|
|
(2,261 |
) |
Income tax expense for special
items |
|
- |
|
|
625 |
|
Funds From Operations |
$ |
36,571 |
|
$ |
41,533 |
|
|
|
|
|
Income tax expense associated
with change in corporate tax structure |
|
2,308 |
|
|
- |
|
Normalized Funds From Operations |
$ |
38,879 |
|
$ |
41,533 |
|
|
|
|
|
Funds From Operations Per
Diluted Share |
$ |
0.32 |
|
$ |
0.34 |
|
Normalized Funds From
Operations Per Diluted Share |
$ |
0.34 |
|
$ |
0.34 |
|
CALCULATION OF EBITDA AND ADJUSTED EBITDA |
|
|
For the Three Months EndedMarch
31, |
|
2023 |
|
2022 |
|
|
|
|
Net income |
$ |
12,400 |
|
$ |
19,003 |
|
Interest expense |
|
22,089 |
|
|
25,392 |
|
Depreciation and
amortization |
|
31,042 |
|
|
32,028 |
|
Income tax expense |
|
8,146 |
|
|
6,610 |
|
EBITDA |
$ |
73,677 |
|
$ |
83,033 |
|
Gain on sale of real estate
assets, net |
|
- |
|
|
(2,261 |
) |
Adjusted EBITDA |
$ |
73,677 |
|
$ |
80,772 |
|
CORECIVIC, INC. AND SUBSIDIARIES |
SUPPLEMENTAL FINANCIAL INFORMATION |
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
|
GUIDANCE
-- CALCULATION OF ADJUSTED NET INCOME, FUNDS FROM OPERATIONS,
EBITDA & ADJUSTED EBITDA |
|
|
For the Year EndingDecember 31,
2023 |
|
Low End of Guidance |
|
High End of Guidance |
Net income |
$ |
51,192 |
|
$ |
63,192 |
Income tax expense associated with change in corporate tax
structure |
|
2,308 |
|
|
2,308 |
Adjusted net income |
$ |
53,500 |
|
$ |
65,500 |
|
|
|
|
Net income |
$ |
51,192 |
|
$ |
63,192 |
Depreciation and amortization of real estate assets |
|
97,500 |
|
|
98,000 |
Funds From Operations |
$ |
148,692 |
|
$ |
161,192 |
Income tax expense associated with change in corporate tax
structure |
|
2,308 |
|
|
2,308 |
Normalized Funds From
Operations |
$ |
151,000 |
|
$ |
163,500 |
Diluted EPS |
$ |
0.44 |
|
$ |
0.55 |
Adjusted Diluted EPS |
$ |
0.46 |
|
$ |
0.57 |
FFO per diluted share |
$ |
1.29 |
|
$ |
1.40 |
Normalized FFO per diluted
share |
$ |
1.31 |
|
$ |
1.42 |
|
|
|
|
Net income |
$ |
51,192 |
|
$ |
63,192 |
Interest expense |
|
85,750 |
|
|
84,750 |
Depreciation and
amortization |
|
128,750 |
|
|
128,750 |
Income tax expense |
|
25,559 |
|
|
24,559 |
EBITDA |
$ |
291,251 |
|
$ |
301,251 |
Income tax expense associated with change in corporate tax
structure |
|
2,308 |
|
|
2,308 |
Adjusted EBITDA |
$ |
293,559 |
|
$ |
303,559 |
|
|
|
|
|
|
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. The Company 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 properties and their management teams. The
Company 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 performance of real estate companies, 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 and after adjustments for unconsolidated partnerships and
joint ventures calculated to reflect funds from operations on the
same basis. As a company with extensive real estate holdings, we
believe FFO and FFO per share are important supplemental measures
of our operating performance and believe they are frequently used
by securities analysts, investors and other interested parties in
the evaluation of REITs and other real estate operating companies,
many of which present FFO and FFO per share when reporting results.
EBITDA, Adjusted EBITDA, and FFO are useful as supplemental
measures of performance of the Company's properties because such
measures do not take into account depreciation and amortization, or
with respect to EBITDA, the impact of the Company's tax provision
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. The Company 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 or ordinary component of the
ongoing operations of the Company. Normalized FFO
excludes the effects of such items. The Company calculates Adjusted
Net Income by adding to GAAP Net Income expenses associated with
the Company’s debt repayments and refinancing transactions, 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.
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, where appropriate, 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) 263-3024 |
|
Financial Media: David Gutierrez, Dresner Corporate Services -
(312) 780-7204 |
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