Prison Realty Reports Second Quarter Results
Prison Realty Reports Second Quarter Results
August 11, 1999
NASHVILLE, Tenn., Aug. 11 /PRNewswire/ -- Prison Realty Trust, Inc. ("Prison Realty" or the "Company") (NYSE: PZN), a Maryland corporation, today announced second quarter 1999 results. Funds from operations (FFO) of $70.4 million, or $0.60 per diluted share were earned on revenues of $73.8 million for the quarter ended June 30, 1999. In addition, the Company announced selected occupancy and financial data related to the Company's primary tenant, Corrections Corporation of America ("CCA"), and the two service companies affiliated with the Company who together operate under the name of Corrections Corporation of America. Corrections Corporation of America's June 30, 1999 system-wide occupancy level was 94.1%, up from 91.4% at March 31, 1999. The occupancy level for Prison Realty-owned facilities managed by CCA has increased from 85.4% at March 31, 1999 to 89.6% at June 30, 1999. Currently, the CCA managed facilities are 89.8% occupied. In addition, CCA reported a net decrease in cash and cash equivalents of $4.3 million for the six month period ended June 30. Chairman and CEO Doctor R. Crants commented as follows: "Since our last earnings report we have successfully increased our credit facility to $1.0 billion and issued $100.0 million in high yield notes, enabling us to continue to develop quality bed space for government in keeping with our business plan. Operating results were negatively impacted by the issuance of equity in the second quarter as we worked to arrange our long term debt financing. We feel the short term effect of this dilution is more than offset by the long term competitive advantage we gain by remaining the primary private provider of available cell space. For instance, on August 6th a Commerce Business Daily notice announced that the Federal Bureau of Prisons expected to issue an RFP for 7,500 bed spaces in contractor-owned, contractor-managed facilities on September 1. The CBD notice specifically excludes from participation new construction or new expansions started after the date of the notice. Only facilities already under construction and able to accept inmates within 90 days of contract award are eligible to participate in this RFP. In light of this and other identified customer requests for secure beds in the immediate future, I could not be more pleased with our current position." "In keeping with our commitment to enhance CCA disclosure, we are including certain cash performance measures and selected data of our primary tenant CCA in conjunction with our earnings release. In addition, we will be including CCA financials in our 10Q when filed." Prison Realty's business is the ownership of correctional and detention facilities. The Company provides financing, design, construction and renovation of new and existing jails and prisons that it leases to both private and governmental managers. Prison Realty currently owns 51 correctional and detention facilities in 17 states, the District of Columbia and the United Kingdom having a total design capacity in excess of 49,000 beds, of which twelve new facilities are under construction. Prison Realty Trust, Inc. is based in Nashville, Tennessee and plans to qualify as a real estate investment trust under the Internal Revenue Code. Entities operated under the name of Corrections Corporation of America provide correctional and detention facility management services to governments under contracts for 83 correctional and detention facilities with an approximate design capacity of 73,000 beds, of which 69 facilities with an approximate design capacity of 53,000 beds are in operation. This press release contains forward-looking statements that involve various risks and uncertainties. Actual results could differ materially from those contained in these forward-looking statements due to certain factors. These and other risks and uncertainties are detailed in the Company's reports filed with the SEC. Financial Tables to follow. Prison Realty Trust, Inc. Consolidated Statement of Income For the Three and Six Months Ended June 30, 1999 (Unaudited and amounts in thousands, except per share amounts) Three Months Six Months Ended Ended June 30, 1999 June 30, 1999 REVENUES: Rental revenues $65,828 $129,468 Interest income 5,827 12,041 Licensing fees 2,186 4,318 73,841 145,827 EXPENSES: Depreciation and amortization 10,502 20,419 General and administrative 1,725 2,607 Interest expense 7,036 15,309 Loss on disposition of property 1,631 1,631 20,894 39,966 OPERATING INCOME 52,947 105,861 Equity in earnings of subsidiaries and amortization of deferred gains 7,476 15,157 INCOME BEFORE INCOME TAXES 60,423 121,018 Provision for change in tax status -- 83,200 NET INCOME 60,423 37,818 Dividends to preferred shareholders (2,150) (4,300) NET INCOME AVAILABLE FOR COMMON SHARES $58,273 $33,518 NET INCOME AVAILABLE PER COMMON SHARE: Basic $0.50 $0.30 Diluted $0.50 $0.30 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC 116,421 111,871 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED 117,763 112,687 FUNDS FROM OPERATIONS: Net Income Available for Common Shares $58,273 $33,518 Plus real estate depreciation 10,502 20,419 Add back non-recurring items: Write off of deferred tax asset -- 83,200(a) Loss on disposition of property 1,631 1,631(b) $70,406 $138,768 FUNDS FROM OPERATIONS PER COMMON SHARE: Basic $0.60 $1.24 Diluted $0.60 $1.23 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC 116,421 111,871 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED 117,763 114,071 (a) -- One-time charge related to change of Company tax status from C-corporation to REIT. (b) -- Non-cash loss resulting from resolution of CCA pre-Merger facility issue (1997). Prison Realty Trust, Inc. Consolidated Balance Sheet June 30, 1999 (Unaudited and amounts in thousands) June 30, 1999 ASSETS Real estate properties, at cost: Correctional and detention facilities $2,200,325 Less accumulated depreciation (27,799) Net real estate properties 2,172,526 Cash and cash equivalents 2,052 Restricted cash 38,870 Notes Receivable from New CCA 138,549 Investments in affiliates and others 129,975 Investments in direct financing leases 74,981 Amounts under lease arrangements 44,423 Receivable from New CCA 10,593 Other assets 41,607 Total assets $2,653,576 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Distributions payable $215,642 Bank credit facility 648,750 Notes payable 100,000 Convertible subordinated notes and other debt 70,796 Accounts payable and accrued expenses 99,373 Income taxes payable 5,746 Deferred gains on sales of contracts 110,996 Deferred tax liability 32,000 Total liabilities 1,283,303 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, $.01 par value; 10,000 shares authorized; 4,300 outstanding 43 Common stock, $.01 par value; 300,000 shares authorized, 118,116 shares issued and outstanding 1,182 Additional paid-in-capital 1,378,922 Cumulative net income 121,018 Accumulated distributions (130,892) Total stockholders' equity 1,370,273 Total liabilities and stockholders' equity $2,653,576 Corrections Corporation of America Selected Financial Information For the Six Months Ended June 30, 1999 (Unaudited and amounts in thousands, except per share amounts) The following table includes selected financial information from Prison Realty Trust's primary tenant, Corrections Corporation of America, for the six months ended June 30, 1999: Six Months Ended June 30, 1999 Revenues $244,109 Net loss (48,134) Current assets 94,955 Total assets 224,995 Current liabilities 49,910 Deferred credits 64,479 Total liabilities 251,389 (a) Stockholders' equity (26,394) Cash flows provided by operating activities $3,091 Cash flows used in investing activities (1,256) Cash flows used in financing activities (6,125) Net decrease in cash for the six months ended June 30, 1999 (4,290) CASH AND CASH EQUIVALENTS, beginning of the period 19,057 CASH AND CASH EQUIVALENTS, end of the period $14,767 (a) -- At June 30, 1999 there were no borrowings under CCA's revolving credit facility, nor are there currently.