CoreCivic, Inc. (NYSE: CXW) (the Company)
announced today its financial results for the first quarter of
2024. Damon T. Hininger, CoreCivic’s President and Chief Executive
Officer, commented, “CoreCivic experienced a strong first quarter
of 2024. Propelled by 75.2% occupancy – our highest level
since the first quarter of 2020 – CoreCivic generated sturdy
margins and year-over-year growth in our key metrics. Revenue
increased 9% versus the first quarter of 2023, with Federal, State,
and Local revenues all increasing, and our cost-management
initiatives also contributed to our favorable results.”
Commenting on capital market activities for the
quarter, Hininger added, “In addition to the strong quarterly
financial results, we are equally pleased with the continued
progress we have made on our capital structure initiatives. During
the quarter, we repurchased 2.7 million shares of our common stock
for $39.4 million – an acceleration over recent quarters.
Also, during the quarter, we successfully issued $500 million of
new senior unsecured notes, effectively refinancing and extending
the term of our existing debt by roughly three years at the same
rate as the senior unsecured notes that we issued in 2021, when
interest rates were much lower. Even with those activities, we
ended the quarter with leverage, measured as net debt to Adjusted
EBITDA, at 2.7x for the trailing twelve months – placing us,
for the first time, within our target leverage range of 2.25x to
2.75x that we established in August 2020. This is a significant
accomplishment, and we are proud of the strategy, focus, and
discipline that led us here.”
“We are thankful for our many partners. Our
federal, state, and local government partners continue to trust the
essential solutions CoreCivic provides, and we renewed the eight
contracts that were up for renewal during the quarter –
following a year in which we renewed all of the 34 contracts up for
renewal. We are also thankful to our financial partners for their
ongoing support, including of our recent debt refinancing.”
Financial Highlights – First Quarter 2024
- Total revenue of $500.7 million
- CoreCivic Safety revenue of $457.7
million
- CoreCivic Community revenue of $29.9
million
- CoreCivic Properties revenue of $13.0
million
- Net income of $9.5 million; Adjusted net income of $27.9
million
- Diluted earnings per share of $0.08
- Adjusted Diluted EPS of $0.25
- Normalized FFO per diluted share of $0.46
- Adjusted EBITDA of $89.5 million
First Quarter 2024 Financial Results Compared With First
Quarter 2023
Net income in the first quarter of 2024 was $9.5
million, or $0.08 per diluted share, compared with net income in
the first quarter of 2023 of $12.4 million, or $0.11 per diluted
share. However, when adjusted for special items, adjusted net
income for the first quarter of 2024 improved to $27.9 million, or
$0.25 per diluted share (Adjusted Diluted EPS), compared with
adjusted net income in the first quarter of 2023 of $14.7 million,
or $0.13 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 and, most notably, included $27.2
million of expenses associated with debt repayments and refinancing
transactions in the first quarter of 2024.
The increased adjusted per share amounts resulted
from higher federal, state, and local populations, particularly at
our facilities serving U.S. Immigration & Customs Enforcement
(ICE), combined with lower interest expense and a decrease in
shares outstanding, both resulting from our capital allocation
strategy. These earnings increases were partially offset by the
expiration of our lease with the Oklahoma Department of Corrections
(ODC) at our North Fork Correctional Facility on June 30, 2023.
Our labor attraction and retention initiatives
continue to generate positive results. The costs of registry
nursing, temporary labor resources, including associated travel
expenses, overtime and incentives, declined meaningfully from the
prior year quarter as well as sequentially.
Revenue from ICE, our largest partner, increased
significantly versus the same quarter of 2023, when Title-42
restrictions were still in effect, and ICE revenue was essentially
flat versus the fourth quarter of 2023. Under Title 42, which ended
May 11, 2023, asylum-seekers and anyone crossing the border without
proper documentation or authority were denied entry at the United
States border to contain the spread of COVID-19. During the three
months ended March 31, 2024, revenue from ICE was $153.8 million
compared to $130.7 million during the three months ended March 31,
2023.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) was $62.8 million in the first quarter of
2024. Adjusted EBITDA, which excludes special items, was $89.5
million in the first quarter of 2024, compared with $73.7 million
in the first quarter of 2023. The increase in Adjusted EBITDA was
attributable to an increase in occupancy, combined with a general
reduction in temporary staffing incentives and related labor costs,
partially offset by the expiration of the lease with the ODC at the
North Fork facility.
Funds From Operations (FFO) for the first quarter
of 2024 was $33.9 million. Normalized FFO, which excludes special
items, increased to $52.6 million, or $0.46 per diluted share, in
the first quarter of 2024, compared with $38.9 million, or $0.34
per diluted share, in the first quarter of 2023, representing an
increase in Normalized FFO per share of 35%. Normalized FFO was
impacted by the same factors that affected Adjusted EBITDA, further
improved by a reduction in interest expense resulting from our debt
reduction strategy that is not reflected in Adjusted EBITDA, as
well as a 2% reduction in weighted average shares outstanding
compared with the prior year quarter.
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.
Business Updates
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 three months ended March 31, 2024, we repurchased 2.7
million shares of our common stock at an aggregate purchase price
of $39.4 million, excluding fees, commissions and other costs
related to the repurchases. Since the share repurchase program was
authorized, through March 31, 2024, we have repurchased a total of
12.8 million shares at an aggregate price of $152.0 million, or
$11.87 per share, excluding fees, commissions and other costs
related to the repurchases.
As of March 31, 2024, we had $73.0 million remaining under the
share repurchase program. 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 Refinancing. On March 12, 2024, we
announced the completion of an underwritten registered public
offering of $500 million aggregate principal amount of 8.250%
senior unsecured notes due 2029 (the 2029 Notes). The net proceeds
from the offering of the 2029 Notes, amounting to $490.3 million,
together with borrowings under our revolving credit facility and
cash on hand, were used to fund the tender offering for, and
subsequent redemption of, the 8.250% senior unsecured notes due
2026 (the 2026 Notes), which had an outstanding principal balance
of $593.1 million. Note holders with an aggregate principal amount
of $494.3 million, or 83.3% of the aggregate principal amount of
the 2026 Notes then-outstanding, tendered their notes by the
expiration date on March 11, 2024, and on April 15, 2024, we
redeemed the remaining $98.8 million principal balance
outstanding.
California City Correctional Center. As
previously disclosed, the lease with the California Department of
Corrections and Rehabilitation at our 2,560-bed California City
Correctional Center expired on March 31, 2024, and was not renewed.
The facility was idled effective April 1, 2024. Rental revenue at
this facility was $8.5 million and $31.1 million for the three
months ended March 31, 2024 and twelve months ended December 31,
2023, respectively. Facility net operating income at the facility
was $7.2 million and $25.5 million for the three months ended March
31, 2024 and the twelve months ended December 31, 2023,
respectively. As a result, although we are marketing the facility
to potential customers, we expect per share results to decline by
approximately $0.06 per share during the second quarter of 2024
compared with the first quarter of 2024, and by approximately $0.15
to $0.16 per share for the year ended December 31, 2024 compared
with the year ended December 31, 2023. The impact of this lease
expiration has been, and continues to be, included in our 2024
financial guidance.
2024 Financial Guidance
Based on current business conditions, we are providing the
following updated financial guidance for the full year 2024:
|
New GuidanceFull Year 2024 |
Prior GuidanceFull Year 2024 |
– Net income |
$52.7 million to $63.7 million |
$65.0 million to $80.0 million¹ |
– Adjusted net income |
$74.0 million to $85.0 million |
$65.0 million to $80.0 million |
– Diluted EPS |
$0.47 to $0.57 |
$0.58 to $0.72¹ |
– Adjusted Diluted EPS |
$0.66 to $0.76 |
$0.58 to $0.72 |
– FFO per diluted share |
$1.36 to $1.46 |
$1.46 to $1.61¹ |
– Normalized FFO per diluted share |
$1.56 to $1.66 |
$1.46 to $1.61 |
– EBITDA |
$281.1 million to $290.1 million |
$300.3 million to $313.3 million¹ |
– Adjusted EBITDA |
$312.0 million to $321.0 million |
$300.3 million to $313.3 million |
|
¹ Prior guidance
did not include the aforementioned $27.2 million of expenses
associated with debt repayments and refinancing transactions
incurred during the first quarter of 2024. |
|
During 2024, we expect to invest $70.0 million to $76.0 million
in capital expenditures, consisting of $30.0 million to $31.0
million in maintenance capital expenditures on real estate assets,
$32.0 million to $35.0 million for maintenance capital expenditures
on other assets and information technology, and $8.0 million to
$10.0 million for other capital investments.
Supplemental Financial Information and Investor
Presentations
We have made available on our website supplemental financial
information and other data for the first quarter of 2024.
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 2024. Written materials used in
the investor presentations will also be available on our website
beginning on or about May 21, 2024. 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 9, 2024, 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/BIa41ba53918294659afa34f33febf12cc.
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 over 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 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, impacting
utilization primarily by the United States Federal Bureau of
Prisons 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) government budget uncertainty, the impact of the
debt ceiling and the potential for government shutdowns and
changing budget priorities; (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, except as may be required by law.
|
CORECIVIC, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
|
|
March 31, |
|
December 31, |
ASSETS |
|
|
2024 |
|
|
|
2023 |
|
Cash and cash equivalents |
|
$ |
111,399 |
|
|
$ |
121,845 |
|
Restricted cash |
|
|
7,978 |
|
|
|
7,111 |
|
Accounts receivable, net of
credit loss reserve of $6,349 and $6,827, respectively |
|
|
274,311 |
|
|
|
312,174 |
|
Prepaid expenses and other
current assets |
|
|
32,612 |
|
|
|
26,304 |
|
Assets held for sale |
|
|
— |
|
|
|
7,480 |
|
Total current assets |
|
|
426,300 |
|
|
|
474,914 |
|
Real estate and related
assets: |
|
|
|
|
Property and equipment, net of accumulated depreciation of
$1,846,456 and $1,821,015, respectively |
|
|
2,095,606 |
|
|
|
2,114,522 |
|
Other real estate assets |
|
|
199,248 |
|
|
|
201,561 |
|
Goodwill |
|
|
4,844 |
|
|
|
4,844 |
|
Other assets |
|
|
301,360 |
|
|
|
309,558 |
|
Total assets |
|
$ |
3,027,358 |
|
|
$ |
3,105,399 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Accounts payable and accrued
expenses |
|
$ |
254,066 |
|
|
$ |
285,857 |
|
Current portion of long-term
debt |
|
|
110,487 |
|
|
|
11,597 |
|
Total current liabilities |
|
|
364,553 |
|
|
|
297,454 |
|
Long-term debt, net |
|
|
984,085 |
|
|
|
1,083,476 |
|
Deferred revenue |
|
|
17,761 |
|
|
|
18,315 |
|
Non-current deferred tax
liabilities |
|
|
91,799 |
|
|
|
96,915 |
|
Other liabilities |
|
|
125,237 |
|
|
|
131,673 |
|
Total liabilities |
|
|
1,583,435 |
|
|
|
1,627,833 |
|
Commitments and
contingencies |
|
|
|
|
Preferred stock – $0.01 par
value; 50,000 shares authorized; none issued and outstanding at
March 31, 2024 and December 31, 2023, respectively |
|
|
— |
|
|
|
— |
|
Common stock – $0.01 par
value; 300,000 shares authorized; 111,568 and 112,733 shares issued
and outstanding at March 31, 2024 and December 31, 2023,
respectively |
|
|
1,116 |
|
|
|
1,127 |
|
Additional paid-in
capital |
|
|
1,742,111 |
|
|
|
1,785,286 |
|
Accumulated deficit |
|
|
(299,304 |
) |
|
|
(308,847 |
) |
Total stockholders’ equity |
|
|
1,443,923 |
|
|
|
1,477,566 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,027,358 |
|
|
$ |
3,105,399 |
|
CORECIVIC, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
|
|
For the Three Months Ended |
|
|
March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
REVENUE: |
|
|
|
|
Safety |
|
$ |
457,746 |
|
|
$ |
417,650 |
|
Community |
|
|
29,900 |
|
|
|
26,414 |
|
Properties |
|
|
13,039 |
|
|
|
13,837 |
|
Other |
|
|
1 |
|
|
|
101 |
|
|
|
|
500,686 |
|
|
|
458,002 |
|
EXPENSES: |
|
|
|
|
Operating: |
|
|
|
|
Safety |
|
|
350,098 |
|
|
|
328,398 |
|
Community |
|
|
24,144 |
|
|
|
22,715 |
|
Properties |
|
|
3,835 |
|
|
|
3,361 |
|
Other |
|
|
26 |
|
|
|
63 |
|
Total operating expenses |
|
|
378,103 |
|
|
|
354,537 |
|
General and administrative |
|
|
36,465 |
|
|
|
32,679 |
|
Depreciation and amortization |
|
|
31,730 |
|
|
|
31,042 |
|
|
|
|
446,298 |
|
|
|
418,258 |
|
OTHER INCOME
(EXPENSE): |
|
|
|
|
Interest expense, net |
|
|
(18,613 |
) |
|
|
(19,151 |
) |
Expenses associated with debt repayments and refinancing
transactions |
|
|
(27,242 |
) |
|
|
- |
|
Gain on sale of real estate assets, net |
|
|
568 |
|
|
|
- |
|
Other income |
|
|
(58 |
) |
|
|
(47 |
) |
INCOME BEFORE INCOME
TAXES |
|
|
9,043 |
|
|
|
20,546 |
|
Income tax benefit (expense) |
|
|
500 |
|
|
|
(8,146 |
) |
NET
INCOME |
|
$ |
9,543 |
|
|
$ |
12,400 |
|
|
|
|
|
|
BASIC EARNINGS PER
SHARE |
|
$ |
0.08 |
|
|
$ |
0.11 |
|
|
|
|
|
|
DILUTED EARNINGS PER
SHARE |
|
$ |
0.08 |
|
|
$ |
0.11 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL 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, |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
|
$ |
9,543 |
|
|
$ |
12,400 |
|
Special items: |
|
|
|
|
Expenses associated with debt repayments and refinancing
transactions |
|
|
27,242 |
|
|
|
- |
|
Income tax expense associated with change in corporate tax
structure |
|
|
- |
|
|
|
2,308 |
|
Gain on sale of real estate assets, net |
|
|
(568 |
) |
|
|
- |
|
Income tax benefit for special items |
|
|
(8,358 |
) |
|
|
- |
|
Adjusted net income |
|
$ |
27,859 |
|
|
$ |
14,708 |
|
|
|
|
|
|
Weighted average common shares
outstanding - basic |
|
|
112,306 |
|
|
|
114,533 |
|
Effect of dilutive
securities: |
|
|
|
|
Restricted stock-based awards |
|
|
1,181 |
|
|
|
937 |
|
Weighted average shares and
assumed conversions - diluted |
|
|
113,487 |
|
|
|
115,470 |
|
|
|
|
|
|
Adjusted Diluted EPS |
|
$ |
0.25 |
|
|
$ |
0.13 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL 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, |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
|
$ |
9,543 |
|
|
$ |
12,400 |
|
Depreciation and amortization
of real estate assets |
|
|
24,784 |
|
|
|
24,171 |
|
Gain on sale of real estate
assets, net |
|
|
(568 |
) |
|
|
- |
|
Income tax expense for special
items |
|
|
178 |
|
|
|
- |
|
Funds From Operations |
|
$ |
33,937 |
|
|
$ |
36,571 |
|
|
|
|
|
|
Expenses associated with debt
repayments and refinancing transactions |
|
|
27,242 |
|
|
|
- |
|
Income tax expense associated
with change in corporate tax structure |
|
|
- |
|
|
|
2,308 |
|
Income tax benefit for special
items |
|
|
(8,536 |
) |
|
|
- |
|
Normalized Funds From Operations |
|
$ |
52,643 |
|
|
$ |
38,879 |
|
|
|
|
|
|
Funds from Operations Per
Diluted Share |
|
$ |
0.30 |
|
|
$ |
0.32 |
|
Normalized Funds From
Operations Per Diluted Share |
|
$ |
0.46 |
|
|
$ |
0.34 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
CALCULATION OF EBITDA AND ADJUSTED EBITDA |
|
|
|
For the Three Months Ended |
|
|
March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
|
$ |
9,543 |
|
|
$ |
12,400 |
|
Interest expense |
|
|
22,058 |
|
|
|
22,089 |
|
Depreciation and
amortization |
|
|
31,730 |
|
|
|
31,042 |
|
Income tax (benefit)
expense |
|
|
(500 |
) |
|
|
8,146 |
|
EBITDA |
|
$ |
62,831 |
|
|
$ |
73,677 |
|
|
|
|
|
|
Expenses associated with debt
repayments and refinancing transactions |
|
|
27,242 |
|
|
|
- |
|
Gain on sale of real estate
assets, net |
|
|
(568 |
) |
|
|
- |
|
Adjusted EBITDA |
|
$ |
89,505 |
|
|
$ |
73,677 |
|
CORECIVIC, INC. AND
SUBSIDIARIESSUPPLEMENTAL FINANCIAL
INFORMATION(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS) |
|
GUIDANCE — CALCULATION OF FUNDS FROM OPERATIONS &
EBITDA |
|
|
|
For the Year Ending |
|
|
December 31, 2024 |
|
|
Low End ofGuidance |
|
High End ofGuidance |
Net income |
|
$ |
52,723 |
|
|
$ |
63,723 |
|
Expenses associated with debt repayments and refinancing
transactions |
|
|
31,442 |
|
|
|
31,442 |
|
Gain on sale of real estate assets, net |
|
|
(568 |
) |
|
|
(568 |
) |
Income tax benefit for special items |
|
|
(9,597 |
) |
|
|
(9,597 |
) |
Adjusted net income |
|
$ |
74,000 |
|
|
$ |
85,000 |
|
|
|
|
|
|
Net income |
|
$ |
52,723 |
|
|
$ |
63,723 |
|
Depreciation and amortization of real estate assets |
|
|
99,500 |
|
|
|
100,000 |
|
Gain on sale of real estate assets, net |
|
|
(568 |
) |
|
|
(568 |
) |
Income tax expense for special items |
|
|
178 |
|
|
|
178 |
|
Funds From Operations |
|
$ |
151,833 |
|
|
$ |
163,333 |
|
Expenses associated with debt repayments and refinancing
transactions |
|
|
31,442 |
|
|
|
31,442 |
|
Income tax benefit for special items |
|
|
(9,775 |
) |
|
|
(9,775 |
) |
Normalized Funds From
Operations |
|
$ |
173,500 |
|
|
$ |
185,000 |
|
|
|
|
|
|
Diluted EPS |
|
$ |
0.47 |
|
|
$ |
0.57 |
|
|
|
|
|
|
Adjusted Diluted EPS |
|
$ |
0.66 |
|
|
$ |
0.76 |
|
|
|
|
|
|
FFO per diluted share |
|
$ |
1.36 |
|
|
$ |
1.46 |
|
|
|
|
|
|
Normalized FFO per diluted
share |
|
$ |
1.56 |
|
|
$ |
1.66 |
|
|
|
|
|
|
Net income |
|
$ |
52,723 |
|
|
$ |
63,723 |
|
Interest expense |
|
|
80,500 |
|
|
|
79,500 |
|
Depreciation and
amortization |
|
|
127,500 |
|
|
|
127,500 |
|
Income tax expense |
|
|
20,403 |
|
|
|
19,403 |
|
EBITDA |
|
$ |
281,126 |
|
|
$ |
290,126 |
|
Expenses associated with debt
repayments and refinancing transactions |
|
|
31,442 |
|
|
|
31,442 |
|
Gain on sale of real estate
assets, net |
|
|
(568 |
) |
|
|
(568 |
) |
Adjusted EBITDA |
|
$ |
312,000 |
|
|
$ |
321,000 |
|
|
|
|
|
|
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, security
analysts, and other interested parties 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 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.
Contact: |
Investors: Mike Grant – Managing Director, Investor
Relations – (615) 263-6957 |
|
Financial Media: David Gutierrez,
Dresner Corporate Services – (312) 780-7204 |
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