8-K
false 0001070985 0001070985 2022-05-04 2022-05-04

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2022 (May 4, 2022)

 

 

CoreCivic, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-16109   62-1763875

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

5501 Virginia Way

Brentwood, Tennessee

  37027
(Address of principal executive offices)   (Zip Code)

(615) 263-3000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On May 4, 2022, CoreCivic, Inc., a Maryland corporation (the “Company”), issued a press release announcing its 2022 first quarter financial results. A copy of the release is furnished as part of this Current Report as Exhibit 99.1 and is incorporated herein in its entirety by reference. The release contains certain financial information calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles, or GAAP, which the Company believes is useful to investors and other interested parties. The Company has included information concerning this non-GAAP information in the release, including a reconciliation of such information to the most comparable GAAP measures, the reasons why the Company believes such information is useful, and the Company’s use of such information for additional purposes.

The information furnished pursuant to this Item 2.02 of Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and Section 11 of the Securities Act of 1933, as amended, or otherwise subject to the liabilities of those sections. This Current Report will not be deemed an admission by the Company as to the materiality of any information in this report that is required to be disclosed solely by Item 2.02. The Company does not undertake a duty to update the information in this Current Report and cautions that the information included in this Current Report is current only as of the date made and may change thereafter.

 

Item 9.01.

Financial Statements and Exhibits.

(d) The following exhibits are filed as part of this Current Report:

 

99.1    Press Release dated May 4, 2022.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Date: May 5, 2022     CORECIVIC, INC.
    By:  

/s/ David Garfinkle

     

David Garfinkle

Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

 

News Release       LOGO

 

Contact:   

Investors: Cameron Hopewell—Managing Director, Investor Relations—(615) 263-3024

Financial Media: David Gutierrez, Dresner Corporate Services—(312) 780-7204

CORECIVIC REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS

BRENTWOOD, Tenn. – May 4, 2022 – CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the first quarter of 2022.

Financial Highlights – First Quarter 2022

 

   

Total revenue of $453.0 million

 

   

CoreCivic Safety revenue of $414.2 million

 

   

CoreCivic Community revenue of $24.1 million

 

   

CoreCivic Properties revenue of $14.6 million

 

   

Net Income of $19.0 million

 

   

Diluted earnings per share of $0.16

 

   

Adjusted diluted EPS of $0.14

 

   

Funds From Operations per diluted share of $0.34

 

   

Adjusted EBITDA of $80.8 million

 

   

TTM Debt Leverage of 2.7x

Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “We continued to generate strong cash flow during the first quarter, despite a few short-term headwinds, including earnings disruption from the commencement of a large new state contract at our La Palma Correctional Center in Arizona and a challenging labor market. For long term value creation, we remain focused on executing our debt reduction strategy. We’ve made great strides in the last year, reducing our total net debt by nearly $450 million, which positions us to begin returning capital to shareholders in the near future.

Hininger continued, “We’re also proud to have recently released our fourth Environmental, Social and Governance (ESG) Report, which details the many ways we delivered life-changing reentry and vocational programming to our residents in 2021. It takes our entire staff of teachers, chaplains, counselors, correctional officers and so many more dedicated people to make these achievements possible, and I’m grateful for my colleagues who truly live out our mission to better the public good every day.”

First Quarter 2022 Financial Results Compared With First Quarter 2021

Net income in the first quarter of 2022 totaled $19.0 million, or $0.16 per diluted share, compared with net loss in the first quarter of 2021 of $125.6 million, or a net loss of $1.05 per diluted share. Adjusted for special items, net income in the first quarter of 2022 was $17.4 million, or $0.14 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the first quarter of 2021 of $29.3 million, or $0.24 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 decline in adjusted per share amounts

 

5501 Virginia Way, Brentwood, Tennessee 37027, Phone: 615-263-3000


First Quarter 2022 Financial Results

Page 2

 

was primarily the result of property sales and refinancing transactions, both of which strengthened our balance sheet, as well as the non-renewal of contracts with the United States Marshals Service (USMS) at the 1,033-bed Leavenworth Detention Center and the 600-bed West Tennessee Detention Facility in 2021, and the non-renewal of a contract with Marion County, Indiana, at the managed-only 1,030-bed Marion County Jail effective January 31, 2022.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $83.0 million in the first quarter of 2022, compared with $41.6 million in the first quarter of 2021. The increase in EBITDA was primarily due to shareholder litigation expense in the prior year quarter. Adjusted EBITDA, which excludes the shareholder litigation expense and other special items, was $80.8 million in the first quarter of 2022, compared with $96.3 million in the first quarter of 2021. Adjusted EBITDA decreased from the prior year quarter primarily due to the sale of three non-core properties, which generated $4.9 million in Adjusted EBITDA in the first quarter of 2021, the transition of offender populations at our La Palma Correctional Center, and the aforementioned non-renewal of contracts at three facilities that collectively resulted in a reduction in EBITDA of $9.0 million from the first quarter of 2021 to the first quarter of 2022.

Funds From Operations (FFO) was $41.5 million, or $0.34 per diluted share, in the first quarter of 2022, compared to a loss of $100.9 million, or $0.83 per diluted share, in the first quarter of 2021. Normalized FFO, which excludes special items, was $41.5 million, or $0.34 per diluted share, in the first quarter of 2022, compared with $53.0 million, or $0.44 per diluted share, in the first quarter of 2021. FFO was negatively impacted by the same factors that affected Adjusted EBITDA, as well as an increase in interest expense. The increase in interest expense was attributable to the issuance during the second and third quarters of 2021 of an aggregate principal amount of $675.0 million of 8.25% unsecured senior notes, the net proceeds of which were primarily used to repay shorter-term debt with lower interest rates. These refinancing activities strengthened our balance sheet by increasing our liquidity, extending our weighted average debt maturities, and creating more financial flexibility.

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 related note following the financial statements herein for further discussion and reconciliations of these measures to net income, the most directly comparable GAAP measure.

Business Updates

Commencement of New Contract with the State of Arizona at the La Palma Correctional Center. On January 10, 2022, we announced that we were awarded a new contract with the state of Arizona to care for up to 2,706 adult male inmates on behalf of the Arizona Department of Corrections, Rehabilitation & Reentry (ADCRR) at the Company’s 3,060-bed La Palma Correctional Center in Eloy, Arizona. The new management contract has an initial term of five years, with one extension option for up to five years thereafter upon mutual agreement. We began receiving inmates from the state of Arizona in April 2022 under this new contract, and expect the transfer process to be complete in the fourth quarter of 2022. Before the new award, the La Palma facility


First Quarter 2022 Financial Results

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supported the mission of ICE by caring for approximately 1,800 detainees. As the new contract with Arizona commences and state inmates are accepted at the facility, we are working closely with ICE to provide alternative capacity within the region in order to continue to support its needs. Upon full utilization of the new contract, we expect to generate approximately $75.0 million to $85.0 million in annualized revenue at the La Palma facility. However, because of the preparation to receive the Arizona inmates, including a reduction in the average daily population of ICE detainees at the facility, facility net operating income decreased $2.4 million during the first quarter of 2022 compared with the first quarter of 2021.

2022 Financial Guidance

Based on current business conditions, the Company is providing the following update to its financial guidance for the full year 2022:

 

     Guidance
Full Year 2022
     Prior Guidance
Full Year 2022
 

➣ Diluted EPS

   $ 0.64 - $0.79        $ 0.72 - $0.86    

➣ Adjusted Diluted EPS

   $ 0.63 - $0.77        $ 0.72 - $0.86    

➣ FFO per diluted share

   $ 1.45 - $1.60        $ 1.55 - $1.70    

➣ EBITDA

   $
$
336.1 million -
351.4 million
 
 
   $
$
354.8 million -
370.0 million
 
 

➣ Adjusted EBITDA

   $
$
333.9 million -
349.1 million
 
 
   $
$
354.8 million -
370.0 million
 
 

Our 2022 guidance reflects uncertainties associated with the timing of the reversal of Title 42, a public health order that has been used since March 2020 to deny 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. On April 1, 2022, the Center for Disease Control and Prevention terminated Title 42, and began preparing for a resumption of regular migration at the United States southern border, effective May 23, 2022. However, the reversal of Title 42 has been subject to legal challenges, and on April 25, 2022, a federal judge issued a temporary restraining order blocking its termination. The termination of Title 42 is expected to result in an increase in the number of undocumented people permitted into the United States to claim asylum, and could result in an increase in the number of people apprehended and detained by ICE, our largest government customer. However, it is difficult to predict when Title 42 will be terminated.

Our 2022 guidance also reflects the continuation of a challenging labor market, including above average wage inflation and, most notably, higher nursing-related expenses than previously estimated due to a national nursing shortage. Finally, our 2022 guidance also reflects a larger earnings disruption at our La Palma Correctional Center than previously estimated. Although we successfully began the complex transition of inmate populations from the state of Arizona into the facility in April 2022, pursuant to a new management contract, we currently expect detainee populations from ICE to decline more rapidly than previously forecasted.


First Quarter 2022 Financial Results

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During 2022, we expect to invest $78.5 million to $82.0 million in capital expenditures, consisting of $33.5 million to $34.0 million in maintenance capital expenditures on real estate assets, $30.0 million to $32.0 million for capital expenditures on other assets and information technology, and $15.0 million to $16.0 million for facility renovations.

Supplemental Financial Information and Investor Presentations

We have made available on our website supplemental financial information and other data for the first quarter of 2022. 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 2022. Written materials used in the investor presentations will also be available on our website beginning on or about May 13, 2022. 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 5, 2022, and will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. The live broadcast can also be accessed by dialing 888-882-4478 in the U.S. and Canada, including the confirmation passcode 8967211. An online replay of the call will be archived on our website promptly following the conference call. In addition, there will be a telephonic replay available beginning at 1:15 p.m. central time (2:15 p.m. eastern time) on May 5, 2022, through 1:15 p.m. central time (2:15 p.m. eastern time) on May 13, 2022. 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 8967211.

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 believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 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.


First Quarter 2022 Financial Results

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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 (including 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) (two agencies of the DOJ, the United States Federal Bureau of Prisons and the United States Marshals Service utilize our services), 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, 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); (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. (On April 1, 2022, the Center for Disease Control and Prevention, or CDC, terminated Title 42, and began preparing for a resumption of regular migration at the United States southern border, effective May 23, 2022; however, on April 25, 2022, a judge issued a temporary restraining order blocking the termination of Title 42.); (vii) government and staff responses to staff or residents testing positive for COVID-19 within public and private correctional, detention and reentry facilities, including the facilities we operate; (viii) restrictions associated with COVID-19 that disrupt the criminal justice system, along with government policies on prosecutions and newly ordered legal restrictions that affect the number of people placed in correctional, detention, and reentry facilities, including those associated with a resurgence of COVID-19; (ix) whether revoking our REIT election, effective January 1, 2021, and our revised capital allocation strategy can be implemented in a cost effective manner that provides the expected benefits, including facilitating our planned debt reduction initiative and planned return of capital to shareholders; (x) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (xi)


First Quarter 2022 Financial Results

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our ability to have met and maintained qualification for taxation as a REIT for the years we elected REIT status; and (xii) the availability of debt and equity financing on terms that are favorable to us, or at all, including our ability to refinance our Bank Credit Facility, which matures in April 2023. 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.

###


First Quarter 2022 Financial Results

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CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

 

     March 31,
2022
    December 31,
2021
 

ASSETS

    

Cash and cash equivalents

   $  378,204     $  299,645  

Restricted cash

     12,330       11,062  

Accounts receivable, net of credit loss reserve of $8,488 and $7,931, respectively

     262,467       282,809  

Prepaid expenses and other current assets

     27,759       26,872  

Assets held for sale

     —         6,996  
  

 

 

   

 

 

 

Total current assets

     680,760       627,384  

Real estate and related assets:

    

Property and equipment, net of accumulated depreciation of $1,685,556 and $1,657,709, respectively

     2,269,913       2,283,256  

Other real estate assets

     216,161       218,915  

Goodwill

     4,844       4,844  

Other assets

     357,874       364,539  
  

 

 

   

 

 

 

Total assets

   $  3,529,552     $  3,498,938  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Accounts payable and accrued expenses

   $  326,003     $  305,592  

Current portion of long-term debt

     37,072       35,376  
  

 

 

   

 

 

 

Total current liabilities

     363,075       340,968  

Long-term debt, net

     1,483,948       1,492,046  

Deferred revenue

     26,311       27,551  

Non-current deferred tax liabilities

     90,836       88,157  

Other liabilities

     173,865       177,748  
  

 

 

   

 

 

 

Total liabilities

     2,138,035       2,126,470  
  

 

 

   

 

 

 

Commitments and contingencies

    

Preferred stock—$0.01 par value; 50,000 shares authorized; none issued and outstanding at March 31, 2022, and December 31, 2021, respectively

     —         —    

Common stock—$0.01 par value; 300,000 shares authorized; 121,586 and 120,285 shares issued and outstanding at March 31, 2022, and December 31, 2021, respectively

     1,216       1,203  

Additional paid-in capital

     1,870,065       1,869,955  

Accumulated deficit

     (479,764     (498,690
  

 

 

   

 

 

 

Total stockholders’ equity

     1,391,517       1,372,468  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,529,552     $ 3,498,938  
  

 

 

   

 

 

 


First Quarter 2022 Financial Results

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CORECIVIC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

     For the Three Months Ended
March 31,
 
     2022     2021  

REVENUE:

    

Safety

   $  414,248     $ 409,769  

Community

     24,115       23,658  

Properties

     14,591       21,255  

Other

     34       36  
  

 

 

   

 

 

 
     452,988       454,718  
  

 

 

   

 

 

 

EXPENSES:

    

Operating

    

Safety

     321,021       305,427  

Community

     20,227       21,100  

Properties

     3,282       6,274  

Other

     99       83  
  

 

 

   

 

 

 

Total operating expenses

     344,629       332,884  

General and administrative

     31,101       29,530  

Depreciation and amortization

     32,028       32,712  

Shareholder litigation expense

     —         51,745  

Asset impairments

     —         1,308  
  

 

 

   

 

 

 
     407,758       448,179  
  

 

 

   

 

 

 

OTHER INCOME (EXPENSE):

    

Interest expense, net

     (22,920     (18,428

Gain on sale of real estate assets, net

     2,261       —    

Other income (expense)

     1,042       (148
  

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     25,613       (12,037

Income tax expense

     (6,610     (113,531
  

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 19,003     $  (125,568
  

 

 

   

 

 

 

BASIC EARNINGS (LOSS) PER SHARE

   $ 0.16     $ (1.05
  

 

 

   

 

 

 

DILUTED EARNINGS (LOSS) PER SHARE

   $ 0.16     $ (1.05
  

 

 

   

 

 

 


First Quarter 2022 Financial Results

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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 Ended
March 31,
 
     2022     2021  

Net income (loss)

   $ 19,003     $  (125,568

Special items:

    

Expenses associated with COVID-19

     —         1,598  

Income taxes associated with change in corporate tax structure and other special tax items

     —         114,249  

Gain on sale of real estate assets, net

     (2,261     —    

Shareholder litigation expense

     —         51,745  

Asset impairments

     —         1,308  

Income tax expense (benefit) for special items

     625       (14,060
  

 

 

   

 

 

 

Adjusted net income

   $ 17,367     $ 29,272  
  

 

 

   

 

 

 

Weighted average common shares outstanding – basic

     120,796       119,909  

Effect of dilutive securities:

    

Restricted stock-based awards

     624       115  

Non-controlling interest – operating partnership units

     —         1,342  
  

 

 

   

 

 

 

Weighted average shares and assumed conversions—diluted

     121,420       121,366  
  

 

 

   

 

 

 

Adjusted Earnings Per Diluted Share

   $ 0.14     $ 0.24  
  

 

 

   

 

 

 


First Quarter 2022 Financial Results

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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 Ended
March 31,
 
     2022     2021  

Net income (loss)

   $  19,003     $  (125,568

Depreciation and amortization of real estate assets

     24,166       23,759  

Impairment of real estate assets

     —         1,308  

Gain on sale of real estate assets, net

     (2,261     —    

Income tax expense (benefit) for special items

     625       (350
  

 

 

   

 

 

 

Funds From Operations

   $ 41,533     $  (100,851

Expenses associated with COVID-19

     —         1,598  

Income taxes associated with change in corporate tax structure and other special tax items

     —         114,249  

Shareholder litigation expense

     —         51,745  

Goodwill and other impairments

     —         —    

Income tax benefit for special items

     —         (13,710
  

 

 

   

 

 

 

Normalized Funds From Operations

   $ 41,533     $ 53,031  
  

 

 

   

 

 

 

Funds From Operations Per Diluted Share

   $ 0.34     $ (0.83
  

 

 

   

 

 

 

Normalized Funds From Operations Per Diluted Share

   $ 0.34     $ 0.44  
  

 

 

   

 

 

 


First Quarter 2022 Financial Results

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CORECIVIC, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

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

CALCULATION OF EBITDA AND ADJUSTED EBITDA

 

     For the Three Months Ended
March 31,
 
     2022     2021  

Net income (loss)

   $  19,003     $  (125,568 )

Interest expense

     25,392       20,925  

Depreciation and amortization

     32,028       32,712  

Income tax expense

     6,610       113,531  
  

 

 

   

 

 

 

EBITDA

   $ 83,033     $ 41,600  

Expenses associated with COVID-19

     —         1,598  

Gain on sale of real estate assets, net

     (2,261     —    

Shareholder litigation expense

     —         51,745  

Asset impairments

     —         1,308  
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 80,772     $ 96,251  
  

 

 

   

 

 

 

GUIDANCE — CALCULATION OF ADJUSTED NET INCOME, FUNDS FROM OPERATIONS, EBITDA & ADJUSTED EBITDA

 

     For the Year Ending
December 31, 2022
 
     Low End of
Guidance
    High End of
Guidance
 

Net income

   $ 77,136     $ 94,386  

Gain on sale of real estate assets, net

     (2,261     (2,261

Income tax expense for special items

     625       625  
  

 

 

   

 

 

 

Adjusted net income

   $ 75,500     $ 92,750  
  

 

 

   

 

 

 

Net income

   $ 77,136     $ 94,386  

Depreciation and amortization of real estate assets

     98,500       99,000  

Gain on sale of real estate assets, net

     (2,261     (2,261

Income tax expense for special items

     625       625  
  

 

 

   

 

 

 

Funds From Operations

   $  174,000     $  191,750  
  

 

 

   

 

 

 

Diluted EPS

   $ 0.64     $ 0.79  
  

 

 

   

 

 

 

Adjusted EPS

   $ 0.63     $ 0.77  
  

 

 

   

 

 

 

FFO per diluted share

   $ 1.45     $ 1.60  
  

 

 

   

 

 

 

Net income

   $ 77,136     $ 94,386  

Interest expense

     96,500       95,500  

Depreciation and amortization

     130,500       130,500  

Income tax expense

     32,000       31,000  
  

 

 

   

 

 

 

EBITDA

   $ 336,136     $ 351,386  

Gain on sale of real estate assets, net

     (2,261     (2,261
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 333,875     $ 349,125  
  

 

 

   

 

 

 


First Quarter 2022 Financial Results

Page 12

 

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. EBITDA, Adjusted EBITDA, and Normalized 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 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. 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.

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