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Prison Realty Announces Third Quarter Results
Prison Realty Announces Third Quarter Results
November 10, 1999
NASHVILLE, Tenn., Nov. 10 /PRNewswire/ -- Prison Realty Trust, Inc., a
Maryland corporation ("Prison Realty" or the "Company") (NYSE: PZN), announced
today its financial results for the third quarter of 1999. Funds from
operations, or FFO, of $66.2 million, or $0.56 per diluted share, were earned
on revenues of $75.0 million for the quarter. In addition, the Company also
announced selected occupancy related to the Company's primary tenant,
Corrections Corporation of America ("CCA"), and the two service companies
affiliated with the Company who, together with CCA, operate under the name of
Corrections Corporation of America.
During the third quarter, system wide CCA brought on line 4,056 new beds,
increasing its beds in operation from 49,069 at the beginning of the quarter
to 53,125 at September 30, 1999. Corrections Corporation of America's average
system wide occupancy for the third quarter was 93.2% compared to 92.7% for
the second quarter. The average occupancy level for the third quarter for
Prison Realty owned facilities that are managed by CCA was 88.8% compared to
87.3% for the second quarter.
In addition, CCA announced that it has been advised by the Department of
Corrections of the State of Wisconsin that CCA has been selected as the
preferred vendor in the recently completed Wisconsin procurement. Wisconsin
has indicated that they intend to contract for all of CCA's vacant beds at its
Prairie facility, all of CCA's vacant beds at its West Tennessee facility and
all of CCA's beds at its Tallahatchie County, Mississippi facility when it is
completed, for a total of 1,896 beds.
The Company and CCA also announced that they have engaged Merrill Lynch &
Co. ("Merrill Lynch") as their respective financial advisors. Merrill Lynch
was engaged in connection with the requirement in the Company's credit
facility that the companies complete a sale of equity and/or debt securities
in order for the Company to make its special dividend payment in cash. As
part of this process, both companies and Merrill Lynch have evaluated the
Company's and CCA's financial conditions and results of operations and are
considering a broad range of financing and strategic alternatives to address
the liquidity needs of both companies. The companies and Merrill Lynch are in
the process of evaluating proposals received with respect to these financing
and strategic alternatives. No assurance can be given that any transaction
will ultimately be consummated. In addition, no assurance can be given as to
the exact timing of the payment of the special dividend, whether paid in cash
and/or in securities. The Company will not update its review and negotiation
of financing and strategic alternative proposals until this process has been
completed.
Additional information regarding the Company's and CCA's financial results
and liquidity needs, the payment of dividends by the Company, and the
Company's and CCA's engagement of Merrill Lynch can be found in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended September 30,
1999, filed today with the United States Securities and Exchange Commission.
Prison Realty's business is the ownership of correctional and detention
facilities. Prison Realty 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 or is in the
process of developing 51 correctional and detention facilities in 18 states,
the District of Columbia and the United Kingdom having a total design capacity
of 50,000 beds, of which 40 facilities are operating, eight are under
construction or expansion and three are in the planning stage. Prison Realty
is based in Nashville, Tennessee and operates so as to qualify as a real
estate investment trust under the Internal Revenue Code. The entities
operating under the Corrections Corporation of America name provide
correctional and detention facility management services to governments under
contracts for 83 facilities with an approximate design capacity of
75,000 beds, of which 70 facilities with an approximate design capacity of
55,000 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 Commission.
PRISON REALTY TRUST, INC.
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 1999
(Unaudited and amounts in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
Sept. 30, 1999 Sept. 30, 1999
REVENUES:
Rental revenues $67,075 $196,543
Interest income 5,708 17,749
Licensing fees 2,192 6,510
74,975 220,802
EXPENSES:
Depreciation and amortization 11,224 31,643
General and administrative 1,979 4,586
Interest expense 11,610 26,919
Write off of loan cost 8,967 8,967
Loss on disposition of property -- 1,631
33,780 73,746
OPERATING INCOME 41,195 147,056
Equity in earnings of subsidiaries
and amortization of
deferred gains 6,950 22,107
Interest income -- --
INCOME BEFORE INCOME TAXES 48,145 169,163
Provision for change in tax status -- 83,200
Provision for income taxes -- --
NET INCOME 48,145 85,963
Dividends to preferred shareholders (2,150) (6,450)
NET INCOME AVAILABLE FOR COMMON SHARES $45,995 $79,513
NET INCOME AVAILABLE PER COMMON SHARE:
Basic $0.39 $0.70
Diluted $0.39 $0.69
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC 118,196 114,003
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, DILUTED 118,315 114,547
FUNDS FROM OPERATIONS:
Net Income Available for Common Shares $45,995 $79,513
Plus real estate depreciation 11,224 31,643
Add back non-recurring items:
Write off of deferred tax asset -- 83,200(a)
Loss on disposition of property -- 1,631(b)
Write off of loan costs 8,967 8,967(c)
$66,186 $204,954
FUNDS FROM OPERATIONS PER COMMON SHARE:
Basic $0.56 $1.80
Diluted $0.56 $1.79
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC 118,196 114,003
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, DILUTED 119,533 115,915
(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).
(c) - Write off of loan costs related to amendment and restatement of
Credit Facility.
PRISON REALTY TRUST, INC.
Consolidated Balance Sheet
September 30, 1999
(Unaudited and amounts in thousands)
September 30,
1999
ASSETS
Real estate properties, at cost:
Correctional and detention facilities $2,306,074
Less accumulated depreciation (39,015)
Net real estate properties 2,267,059
Cash and cash equivalents 19,743
Restricted cash 24,205
Notes Receivable 138,549
Investments in affiliates and others 126,875
Investments in direct financing leases 74,042
Amounts under lease arrangements, net 49,499
Receivable from New CCA 26,221
Other assets 57,340
Total assets $2,783,533
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Distributions payable $209,729
Bank credit facility 845,250
Notes payable 100,000
Convertible subordinated notes and other debt 70,778
Accounts payable and accrued expenses 59,135
Income taxes payable 6,029
Deferred gains on sales of contracts 108,079
Deferred tax liability 32,000
Total liabilities 1,431,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
20,000 shares authorized;
4,300 outstanding 43
Common stock, $.01 par value;
300,000 shares authorized,
118,284 shares issued and
outstanding 1,183
Treasury stock (242)
Additional paid-in-capital 1,380,469
Cumulative net income 169,163
Accumulated distributions (198,083)
Total stockholders' equity 1,352,533
Total liabilities and stockholders'
equity $2,783,533
The following table includes selected financial information from Prison
Realty's primary tenant, CCA, for the nine months ended September 30, 1999:
CORRECTIONS CORPORATION OF AMERICA
Selected Financial Information
For the Nine Months Ended September 30, 1999
(Unaudited and amounts in thousands, except per share amounts)
Nine Months
Ended
September 30, 1999
Revenues $365,222
Net loss (84,488)
Current assets 87,970
Total assets 237,740
Current liabilities 76,026
Deferred credits 87,268
Total liabilities 300,294 (a)
Stockholders' equity (62,554)
Cash flows used in operating activities $(6,999)
Cash flows used in investing activities (3,383)
Cash flows used in financing activities (6,125)
Net decrease in cash for the nine months
ended September 30, 1999 (16,507)
CASH AND CASH EQUIVALENTS, beginning
of the period 19,057
CASH AND CASH EQUIVALENTS, end of the
period $2,550
(a) - At September 30, 1999 there were no borrowings under CCA's revolving
credit facility. Currently, there are borrowings of approximately
$20 million outstanding under CCA's revolving credit facility.