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CCA Announces 2014 First Quarter Financial Results
First Quarter 2014 Financial Highlights
- Diluted EPS of
$0.44 - Operating income of
$63.1 million - Net income of
$51.7 million - Normalized FFO of
$72.8 million , or$0.62 per diluted share - AFFO of
$68.1 million , or$0.58 per diluted share
Net income was
First quarter 2014 per share amounts were negatively impacted by the issuance of 13.9 million shares of common stock in connection with the payment of a special dividend on
CCA President and Chief Executive Officer,
Operating Results
Operating income increased to
Total revenue during the first quarter of 2014 was
Interest expense decreased to
Adjusted net income, FFO, Normalized FFO and AFFO, and their corresponding per share amounts, as well as the per share amounts calculated as if shares issued in connection with the special dividend were issued as of the beginning of the periods presented, 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 notes following the financial statements herein for further discussion and reconciliations of these measures to GAAP measures.
Partnership Development Update
Diamondback Update. As previously disclosed, during the third quarter of 2013, CCA activated its
Guidance
The Company expects Adjusted Diluted EPS for the second quarter of 2014 to be in the range of
We expect weighted average shares outstanding of approximately 117.5 million in the second quarter of 2014, and approximately 118.0 million for the full-year 2014.
During 2014, we expect to invest approximately
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the first quarter of 2014. We do not undertake any obligation, and disclaim any duty to update any of the information disclosed in this report. Interested parties may access this information through our website at www.cca.com under "Financial Information" of the Investors section.
An updated Investor Presentation will be available on our website beginning on or about
Webcast and Replay Information
We will host a webcast conference call at
About CCA
CCA, a publicly traded real estate investment trust (REIT), is the nation's largest owner of partnership correction and detention facilities and one of the largest prison operators in
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 as defined within the meaning of the Private Securities Litigation Reform Act of 1995. 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) general economic and market conditions, including the impact governmental budgets can have on our per diem rates, occupancy, and overall utilization; (ii) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, increases in cost of operations, fluctuations in interest rates and risks of operations; (iii) our ability to obtain and maintain correctional facility management contracts, including, but not limited to, as a result of sufficient governmental appropriations, contract compliance and as a result of inmate disturbances; (iv) changes in the privatization of the corrections and detention industry, the public acceptance of our services, the timing of the opening of and demand for new prison facilities and the commencement of new management contracts; (v) changes in governmental policy and in legislation and regulation of the corrections and detention industry that affect our business, including but not limited to, the impact of a government shutdown, and
CCA 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.
| CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||||
| March 31, | December 31, | |||||||||
| ASSETS | 2014 | 2013 | ||||||||
| Cash and cash equivalents | $ | 52,681 | $ | 77,909 | ||||||
| Accounts receivable, net of allowance of $968 and $1,265, respectively | 239,300 | 244,957 | ||||||||
| Current deferred tax assets | 7,809 | 9,241 | ||||||||
| Prepaid expenses and other current assets | 18,720 | 20,612 | ||||||||
| Current assets of discontinued operations | 6 | 15 | ||||||||
| Total current assets | 318,516 | 352,734 | ||||||||
| Property and equipment, net | 2,543,470 | 2,546,613 | ||||||||
| Restricted cash | 5,590 | 5,589 | ||||||||
| Investment in direct financing lease | 4,936 | 5,473 | ||||||||
| Goodwill | 16,110 | 16,110 | ||||||||
| Non-current deferred tax assets | 5,505 | 3,078 | ||||||||
| Other assets | 75,131 | 77,828 | ||||||||
| Total assets | $ | 2,969,258 | $ | 3,007,425 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Accounts payable and accrued expenses | $ | 227,041 | $ | 252,277 | ||||||
| Income taxes payable | 1,859 | 1,243 | ||||||||
| Current liabilities of discontinued operations | 388 | 886 | ||||||||
| Total current liabilities | 229,288 | 254,406 | ||||||||
| Long-term debt | 1,195,000 | 1,205,000 | ||||||||
| Other liabilities | 45,954 | 45,512 | ||||||||
| Total liabilities | 1,470,242 | 1,504,918 | ||||||||
| Commitments and contingencies | ||||||||||
| Preferred stock -- $0.01 par value; 50,000 shares authorized; none issued and outstanding at March 31, 2014 and December 31, 2013, respectively | - | - | ||||||||
| Common stock -- $0.01 par value; 300,000 shares authorized; 116,339 and 115,923 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 1,163 | 1,159 | ||||||||
| Additional paid-in capital | 1,729,807 | 1,725,363 | ||||||||
| Accumulated deficit | (231,954 | ) | (224,015 | ) | ||||||
| Total stockholders' equity | 1,499,016 | 1,502,507 | ||||||||
| Total liabilities and stockholders' equity | $ | 2,969,258 | $ | 3,007,425 | ||||||
| CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||||
| For the Three Months Ended March 31, |
|||||||||||
| 2014 | 2013 | ||||||||||
| REVENUE: | |||||||||||
| Owned and controlled properties | $ | 339,169 | $ | 341,774 | |||||||
| Managed only and other | 65,053 | 74,949 | |||||||||
| 404,222 | 416,723 | ||||||||||
| EXPENSES: | |||||||||||
| Operating: | |||||||||||
| Owned and controlled properties | 225,219 | 229,444 | |||||||||
| Managed only and other | 62,161 | 68,778 | |||||||||
| Total operating expenses | 287,380 | 298,222 | |||||||||
| General and administrative | 25,392 | 31,232 | |||||||||
| Depreciation and amortization | 28,384 | 27,377 | |||||||||
| 341,156 | 356,831 | ||||||||||
| OPERATING INCOME | 63,066 | 59,892 | |||||||||
| OTHER (INCOME) EXPENSE: | |||||||||||
| Interest expense, net | 10,348 | 12,566 | |||||||||
| Expenses associated with debt refinancing transactions | - | 225 | |||||||||
| Other (income) expense | (387 | ) | 101 | ||||||||
| 9,961 | 12,892 | ||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 53,105 | 47,000 | |||||||||
| Income tax (expense) benefit | (1,367 | ) | 134,447 | ||||||||
| INCOME FROM CONTINUING OPERATIONS | 51,738 | 181,447 | |||||||||
| Loss from discontinued operations, net of taxes | - | (355 | ) | ||||||||
| NET INCOME | $ | 51,738 | $ | 181,092 | |||||||
| BASIC EARNINGS PER SHARE: | |||||||||||
| Income from continuing operations | $ | 0.45 | $ | 1.81 | |||||||
| Loss from discontinued operations, net of taxes | - | - | |||||||||
| Net income | $ | 0.45 | $ | 1.81 | |||||||
| DILUTED EARNINGS PER SHARE: | |||||||||||
| Income from continuing operations | $ | 0.44 | $ | 1.78 | |||||||
| Loss from discontinued operations, net of taxes | - | - | |||||||||
| Net income | $ | 0.44 | $ | 1.78 | |||||||
| REGULAR DIVIDENDS DECLARED PER SHARE | $ | 0.51 | $ | 0.53 | |||||||
| CORRECTIONS CORPORATION OF AMERICA 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, |
||||||||
| 2014 | 2013 | |||||||
| Net income | $ | 51,738 | $ | 181,092 | ||||
| Special items: | ||||||||
| Expenses associated with debt refinancing transactions, net of taxes | - | 207 | ||||||
| Expenses associated with REIT conversion, net of taxes | - | 7,477 | ||||||
| Income tax benefit for reversal of deferred taxes due to REIT conversion | - | (137,686 | ) | |||||
| Diluted adjusted net income | $ | 51,738 | $ | 51,090 | ||||
| Weighted average common shares outstanding - basic | 115,773 | 100,070 | ||||||
| Effect of dilutive securities: | ||||||||
| Stock options | 963 | 1,556 | ||||||
| Restricted stock-based compensation | 224 | 209 | ||||||
| Weighted average shares and assumed conversions - diluted | 116,960 | 101,835 | ||||||
| Adjusted Diluted Earnings Per Share | $ | 0.44 | $ | 0.50 | ||||
| Pro forma Adjusted Diluted Earnings Per Share(1) | $ | 0.44 | $ | 0.44 | ||||
| (1) | The Pro forma Adjusted Diluted EPS for the first quarter of 2013 reflects the issuance of 13.9 million shares in connection with the payment of a special dividend in May 2013 as if those shares were issued at the beginning of the period presented. See Page 8 for a reconciliation of reported diluted weighted average shares outstanding to pro forma diluted weighted average shares outstanding. |
| CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES | ||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | ||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||
| CALCULATION OF FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS | ||||||||
| For the Three Months Ended March 31, |
||||||||
| 2014 | 2013 | |||||||
| Net income | $ | 51,738 | $ | 181,092 | ||||
| Depreciation of real estate assets | 21,077 | 19,605 | ||||||
| Depreciation of real estate assets for discontinued operations | - | 142 | ||||||
| Funds From Operations | $ | 72,815 | $ | 200,839 | ||||
| Expenses associated with debt refinancing transactions, net of taxes | - | 207 | ||||||
| Expenses associated with REIT conversion, net of taxes | - | 7,477 | ||||||
| Income tax benefit for reversal of deferred taxes due to REIT conversion | - | (137,686 | ) | |||||
| Normalized Funds From Operations | $ | 72,815 | $ | 70,837 | ||||
| Maintenance capital expenditures on real estate assets | (8,728 | ) | (4,134 | ) | ||||
| Stock-based compensation | 3,293 | 3,205 | ||||||
| Amortization of debt costs and other non-cash interest | 771 | 1,047 | ||||||
| Other non-cash revenue and expenses | (16 | ) | - | |||||
| Adjusted Funds From Operations | $ | 68,135 | $ | 70,955 | ||||
| Normalized Funds From Operations Per Diluted Share | $ | 0.62 | $ | 0.70 | ||||
| Adjusted Funds From Operations Per Diluted Share | $ | 0.58 | $ | 0.70 | ||||
| Pro forma Normalized FFO Per Diluted Share (1) | $ | 0.62 | $ | 0.61 | ||||
| Pro forma AFFO Per Diluted Share (1) | $ | 0.58 | $ | 0.61 | ||||
| (1) | The Pro forma Normalized FFO Per Diluted Share and the Pro forma AFFO Per Diluted Share for the first quarter of 2013 reflects the issuance of 13.9 million shares in connection with the payment of a special dividend in May 2013 as if those shares were issued at the beginning of the period presented. Refer to the table below for a reconciliation of reported diluted weighted average shares outstanding to pro forma weighted average shares outstanding. |
| RECONCILIATION OF REPORTED DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING TO PRO FORMA DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | |||
| For the Three Months Ended March 31, 2013 | |||
| Weighted average shares and assumed conversions - diluted | 101,835 | ||
| Non-GAAP Adjustment: | |||
| Shares issued in Special Dividend (1) | 13,876 | ||
| Pro forma weighted average shares and assumed conversions - diluted | 115,711 | ||
| (1) | Pro forma adjustment reflects the issuance of shares in connection with the Special Dividend in May 2013 as if those shares were issued at the beginning of the period presented. See Note B hereafter. |
| CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES | ||||||||||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | ||||||||||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||||||||||
| CALCULATION OF ADJUSTED FUNDS FROM OPERATIONS PER SHARE GUIDANCE | ||||||||||||||||
| For the Quarter Ending June 30, 2014 |
For the Year Ending December 31, 2014 |
|||||||||||||||
| Low End of Guidance | High End of Guidance | Low End of Guidance | High End of Guidance | |||||||||||||
| Adjusted Net income | $ | 53,000 | $ | 55,000 | $ | 217,000 | $ | 227,000 | ||||||||
| Depreciation of real estate assets | 21,000 | 21,000 | 85,000 | 85,000 | ||||||||||||
| Funds From Operations | $ | 74,000 | $ | 76,000 | $ | 302,000 | $ | 312,000 | ||||||||
| Other non-cash expenses | 4,200 | 4,300 | 17,000 | 17,000 | ||||||||||||
| Maintenance capital expenditures on real estate assets | (5,000 |
) | (5,000 |
) | (25,000 |
) | (25,000 |
) | ||||||||
| Adjusted Funds From Operations | $ | 73,200 | $ | 75,300 | $ | 294,000 | $ | 304,000 | ||||||||
| Normalized Funds From Operations Per Diluted Share | $ | 0.63 | $ | 0.65 | $ | 2.56 | $ | 2.64 | ||||||||
| Adjusted Funds From Operations Per Diluted Share | $ | 0.62 | $ | 0.64 | $ | 2.49 | $ | 2.58 | ||||||||
NOTES TO SUPPLEMENTAL FINANCIAL INFORMATION
Note A: Adjusted Net Income, EBITDA, Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO), and their corresponding per share metrics are non-GAAP financial measures. FFO and AFFO are widely accepted non-GAAP supplemental measures of REIT performance following the standards established by the
NAREIT defines FFO as net income computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate. EBITDA, FFO and AFFO are useful as supplemental measures of performance of the Company's corrections facilities because they don't 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 correctional facilities, management believes that assessing performance of the Company's correctional facilities without the impact of depreciation or amortization is useful. CCA 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 component of the ongoing operations of the Company. Normalized FFO excludes the effects of such items. CCA calculates AFFO by adding to Normalized FFO non-cash expenses such as the amortization of deferred financing costs and stock-based compensation, and by subtracting from Normalized FFO recurring real estate expenditures that are capitalized and then amortized, but which are necessary to maintain a REIT's properties and its revenue stream. Some of these capital expenditures contain a discretionary element with respect to when they are incurred, while others may be more urgent. Therefore, these capital expenditures may fluctuate from quarter to quarter, depending on the nature of the expenditures required, seasonal factors such as weather, and budgetary conditions. CCA calculates Adjusted Net Income by adding or deducting from GAAP Net Income amounts associated with the Company's debt refinancing, REIT conversion, mergers and acquisitions activity and certain impairments that the Company believes are unusual or nonrecurring to provide an alternative measure of comparing operating performance for the periods presented.
Other companies may calculate Adjusted Net Income, EBITDA, FFO, Normalized FFO, and AFFO differently than the Company does, or adjust for other items, and therefore comparability may be limited. Adjusted Net Income, EBITDA, FFO, Normalized FFO, and AFFO and 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
Note B: On
Contact:
Investors and Analysts:
CCA
(615) 263-3005
Financial Media:
(312) 780-7204
Source: