exv99w1
Exhibit 99.1
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News Release
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Contact: |
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Investors and Analysts: Karin Demler, CCA at (615) 263-3005
Financial Media: Dave Gutierrez, Dresner Corporate Services at (312) 780-7204 |
CCA Announces 2011 First Quarter Financial Results
Raising Full-Year 2011 Guidance To Be In The Range of $1.43 to $1.49
First Quarter Diluted EPS Increased 23.3% Over the Prior Year Quarter to $0.37
NASHVILLE, Tenn. May 4, 2011 CCA (NYSE: CXW) (the Company or Corrections Corporation of
America), Americas leader in partnership corrections and the nations largest provider of
corrections management services to government agencies, announced today its financial results for
the first quarter ended March 31, 2011.
Financial Review First Quarter 2011 Compared with First Quarter 2010
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Diluted EPS up 23.3% to $0.37 from $0.30 |
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Net income up 15.5% to $40.3 million from $34.9 million |
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EBITDA increased 13.4% to $110.5 million from $97.4 million |
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Adjusted Funds From Operations Per Diluted Share up 22.1% to $0.83 from $0.68 |
For the first quarter of 2011, CCA generated net income of $40.3 million, or $0.37 per diluted
share, compared with net income of $34.9 million, or $0.30 per diluted share, for the first quarter
of 2010.
Total management revenue for the first quarter of 2011 increased 5.5% to $426.6 million from $404.4
million during the first quarter of 2010, primarily driven by a 5.8% increase in average daily
inmate populations. Management revenue from our federal partners increased 5.9% to $182.4 million
generated during the first quarter of 2011 compared with $172.2 million generated during the prior
year period. The increase in federal revenue primarily resulted from the commencement of a new
contract with the U.S. Marshals Service (USMS) at our Nevada Southern Detention Center combined
with higher USMS populations in certain facilities predominantly located in the southwestern region
of the United States. Per diem increases associated with certain federal contracts, which are
generally received during the fourth quarter, also contributed to the improvement in federal
revenues. These increases were partially offset by the September 30, 2010 expiration of the
contract with the Federal Bureau of Prisons (BOP) at our California City Correctional Center.
Management revenue from our state partners increased 5.7% to $216.3 million during the first
quarter of 2011 compared with $204.7 million during the first quarter of 2010. State revenue
increased primarily as a result of higher inmate populations from the state of California and from
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10 Burton Hills Boulevard, Nashville, Tennessee 37215, Phone: 615-263-3000
CCA First Quarter 2011 Financial Results
Page 2
the two expansions in Georgia we completed in May 2010, combined with the commencement of two new
contracts during the third quarter of 2010 at managed-only facilities in Florida. The increases in
populations were partially offset by reductions in inmate populations from the state of Arizona.
Operating income increased 15.1% to $83.5 million during the first quarter of 2011 compared to
$72.5 million during the first quarter of 2010. The improvement in operating income was due to an
increase in revenues combined with a $4.1 million charge incurred during the first quarter of 2010
for bonuses paid to non-management level staff in lieu of wage increases. The improvement in
operating income was partially offset by an increase in general and administrative expenses which
was largely due to an increase in incentive compensation in 2011 compared to the first quarter of
2010, and an increase in depreciation and amortization resulting from the completion of our Nevada
Southern Detention Center.
EBITDA for the first quarter of 2011 increased 13.4% to $110.5 million from $97.4 million during
the first quarter of 2010. Funds From Operations increased 12.9% to $95.5 million during the first
quarter of 2011 from $84.6 million in the prior year quarter. Adjusted Funds From Operations,
which includes maintenance and technology capital expenditures, for the first quarter of 2011
increased to $90.7 million compared with $79.2 million during the prior year period. Adjusted
Funds From Operations per diluted share improved to $0.83 during the first quarter of 2011 from
$0.68 per diluted share in the first quarter 2010. Our per share results were favorably impacted
by our share repurchase program.
Our total average daily compensated population increased 5.8% to 80,946 in the first quarter of
2011 from 76,490 in the first quarter of 2010. Our total portfolio occupancy decreased slightly to
89.9% during the first quarter of 2011 from 90.5% during the first quarter of 2010. The decline in
occupancy is due to a 6.5% increase in our average number of available beds to 90,037 during the
first quarter of 2011 from 84,520 during the prior year quarter. The increase in average available
beds was due to the completion of our Nevada Southern Detention Center in September 2010, which
began receiving detainees in October 2010, and the completed expansions in May 2010 of our Coffee
and Wheeler facilities located in Georgia.
EBITDA, Funds From Operations, Adjusted Funds From Operations, and 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 GAAP measures.
Commenting on the first quarter financial results, Chief Executive Officer, Damon Hininger,
stated, We are very pleased with our first quarter financial results, as we continue to generate
meaningful growth in revenue, earnings per share and Funds From Operations. We believe the
share repurchase program and our cost containment initiatives have benefitted our financial results
during a difficult economy.
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CCA First Quarter 2011 Financial Results
Page 3
Hininger continued, Although budgetary challenges for our government partners remain, we are
encouraged by the opportunities that could arise as certain states consider efficiency and savings
opportunities provided by the partnership corrections industry.
Operations Highlights
For the quarters ended March 31, 2011 and 2010, key operating statistics for the continuing
operations (i.e. excluding discontinued operations) of CCA were as follows:
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Quarter Ended March 31, |
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Metric |
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2011 |
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2010 |
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% Change |
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Average Available Beds |
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90,037 |
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84,520 |
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6.5 |
% |
Average Compensated Occupancy |
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89.9 |
% |
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90.5 |
% |
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-0.7 |
% |
Total Compensated Man-Days |
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7,285,140 |
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6,884,079 |
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5.8 |
% |
Average Daily Compensated Population |
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80,946 |
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76,490 |
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5.8 |
% |
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Revenue per Compensated Man-Day |
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$ |
58.56 |
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$ |
58.74 |
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-0.3 |
% |
Operating Expense per Compensated Man-Day: |
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Fixed |
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30.73 |
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32.01 |
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-4.0 |
% |
Variable |
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9.47 |
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9.58 |
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-1.1 |
% |
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Total |
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40.20 |
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41.59 |
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-3.3 |
% |
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Operating Margin per Compensated Man-Day |
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$ |
18.36 |
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$ |
17.15 |
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7.1 |
% |
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Operating Margin |
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31.4 |
% |
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29.2 |
% |
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7.5 |
% |
Revenue per compensated man-day in the first quarter of 2011 decreased 0.3% to $58.56 from
$58.74 in the first quarter of 2010, primarily due to a change in mix with more managed-only
business combined with higher populations in certain facilities that have tiered per diem rates.
However, operating expenses per compensated man-day decreased 3.3% to $40.20 from $41.59. The
improvement in operating expenses partially resulted from a 4.0% decline in fixed expenses due to
an improvement in salaries and benefits attributed to the $4.1 million charge incurred during the
first quarter of 2010 for bonuses awarded to non-management level staff in lieu of wage increases
combined with lower expenses associated with cost containment initiatives. The net result was a
7.1% increase in operating margin per compensated man-day.
As of May 1, 2011, we had approximately 11,900 unoccupied beds at facilities that had availability
of 100 or more beds, and an additional 1,124 beds under development. This inventory of beds
available is reduced to approximately 8,700 beds after taking into consideration the beds committed
pursuant to management contracts and an Intent to Award from the state of California.
Partnership Development Update
As previously disclosed, in January 2011, the newly elected Governor of California proposed a state
budget which called for a significant reallocation of responsibilities between the state government
and local jurisdictions, including transferring some number of inmates from state custody to the
custody of cities and counties. The Governor has approved the realignment of
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CCA First Quarter 2011 Financial Results
Page 4
services
contingent upon identifying a funding source. At this time CCA cannot reasonably assess the
opportunities or challenges that could develop if realignment is implemented. As it relates
to the Intent to Award for the additional beds with the state of California, negotiations have been
suspended while the state finalizes its fiscal year 2012 budget.
As previously disclosed, under the renewal of our contract with the California Department of
Corrections, CCA elected not to renew the 880 beds under contract at our Florence Detention Center.
In April 2011, the CDCR began the process of transferring those inmates out of our system and CCA
expects that the transfer will be completed by the end of the second quarter of 2011. As of March
31, 2011, we housed approximately 10,350 inmates from the state of California.
Share Repurchase Program
In November 2008 the Board of Directors approved a program to repurchase up to $150 million of our
common stock that expired on December 31, 2009. In February 2010, the Board of Directors approved
a second program to repurchase up to $250 million of common stock. Through April 30, 2011, we have
repurchased 20.4 million shares in total under both plans at an average cost per share of $16.34.
This represents approximately 16.2% of the total shares outstanding prior to the initiation of the
first program.
From January 1, 2011 through April 30, 2011, we have repurchased 2.5 million shares at a total cost
of $61.7 million. As of April 30, 2011, we had approximately $42.7 million left available under
the program to repurchase stock through June 30, 2011. As of April 30, 2011, we had 107.4 million
shares outstanding.
Liquidity Update
At March 31, 2011, our liquidity was provided by cash on hand of $37.8 million and $286.5 million
available under our revolving credit facility. We believe we have the ability to fund our capital
expenditure requirements, stock repurchase program, working capital and debt service requirements
with cash on hand, net cash provided by operations, and borrowings available under our revolving
credit facility. None of our outstanding debt requires scheduled principal repayments, and we have
no debt maturities until December 2012.
Guidance
We expect EPS for the second quarter of 2011 to be in the range of $0.36 to $0.37 and have raised
our full year 2011 EPS to be in the range of $1.43 to $1.49, with full year Adjusted Funds From
Operations Per Diluted Share to be in the range of $2.32 to $2.44.
We believe the long-term growth opportunities of our business remain attractive as our partners
seek cost effective corrections solutions and as insufficient bed development by our partners
should result in a return to the supply and demand imbalance that has benefitted the partnership
corrections industry.
-more-
CCA First Quarter 2011 Financial Results
Page 5
During 2011, we expect to invest approximately $100.0 million to $115.0 million in capital
expenditures, consisting of approximately $52.0 million to $62.0 million in on-going prison
construction and expenditures related to potential land acquisitions and $48.0 million to $53.0
million in maintenance and information technology. We also expect an effective income tax rate of
approximately 38.0%, with payments for income taxes expected to approximate $70.2 million to $73.2
million for the full year.
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the
first quarter of 2011. 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.
Management may meet with investors from time to time during the second quarter of 2011. Written
materials used in the investor presentations will also be available on our website beginning on or
about May 24, 2011. Interested parties may access this information through our website at
www.cca.com under Webcasts of the Investors section.
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 May
5, 2011, to discuss our first quarter 2011 financial results. To listen to this discussion, please
access Webcasts on the Investors page at www.cca.com. The conference call will be archived on
our website following the completion of the call. In addition, a telephonic replay will be
available at 6:00 p.m. eastern time on May 5, 2011 through 11:59 p.m. eastern time on May 12, 2011,
by dialing (888) 203-1112 or (719) 457-0820, pass code 2269858.
About CCA
CCA is the nations largest owner and operator of partnership correction and detention facilities
and one of the largest prison operators in the United States, behind only the federal government
and three states. We currently operate 66 facilities, including 45 company-owned facilities, with
a total design capacity of approximately 90,000 beds in 19 states and the District of Columbia. We
specialize in owning, operating and managing prisons and other correctional facilities and
providing inmate residential and prisoner transportation services for governmental agencies. In
addition to providing the fundamental residential services relating to inmates, our facilities
offer a variety of rehabilitation and educational programs, including basic education, religious
services, life skills and employment training and substance abuse treatment. These services are
intended to reduce recidivism and to prepare inmates for their successful re-entry into society
upon their release. We also provide health care (including medical, dental and psychiatric
services), food services and work and recreational programs.
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
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CCA First Quarter 2011 Financial Results
Page 6
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 as a result of sufficient governmental
appropriations 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) judicial challenges and the outcome of budget proposals regarding Californias utilization of
out of state private correctional facilities; and (vi) increases in costs to construct or expand
correctional facilities that exceed original estimates, or the inability to complete such projects
on schedule as a result of various factors, many of which are beyond our control, such as weather,
labor conditions and material shortages, resulting in increased construction costs. Other factors
that could cause operating and financial results to differ are described in the filings made from
time to time by us with the Securities and Exchange Commission.
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.
-more-
CCA First Quarter 2011 Financial Results
Page 7
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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March 31, 2011 |
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December 31, 2010 |
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ASSETS |
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Cash and cash equivalents |
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$ |
37,792 |
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$ |
25,505 |
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Accounts receivable, net of allowance of $1,531 and $1,568, respectively |
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277,616 |
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305,305 |
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Deferred tax assets |
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|
10,920 |
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|
14,132 |
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Prepaid expenses and other current assets |
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|
13,934 |
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|
|
31,196 |
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Current assets of discontinued operations |
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|
2,135 |
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|
2,155 |
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Total current assets |
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342,397 |
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378,293 |
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Property and equipment, net |
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2,534,839 |
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2,549,295 |
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Restricted cash |
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6,758 |
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6,756 |
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Investment in direct financing lease |
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10,425 |
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10,798 |
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Goodwill |
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11,988 |
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11,988 |
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Other assets |
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25,622 |
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26,092 |
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Non-current assets of discontinued operations |
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6 |
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Total assets |
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$ |
2,932,029 |
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$ |
2,983,228 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Accounts payable and accrued expenses |
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$ |
184,796 |
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$ |
203,796 |
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Income taxes payable |
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9,903 |
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|
476 |
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Current liabilities of discontinued operations |
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1,392 |
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1,583 |
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Total current liabilities |
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196,091 |
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205,855 |
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Long-term debt |
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1,112,744 |
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1,156,568 |
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Deferred tax liabilities |
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121,477 |
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118,245 |
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Other liabilities |
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32,428 |
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31,689 |
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Total liabilities |
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1,462,740 |
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1,512,357 |
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Commitments and contingencies |
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Common stock - $0.01 par value; 300,000 shares authorized;
108,094 and 109,754 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively |
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1,081 |
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1,098 |
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Additional paid-in capital |
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1,312,796 |
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1,354,691 |
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Retained earnings |
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155,412 |
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|
115,082 |
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Total stockholders equity |
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1,469,289 |
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1,470,871 |
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Total liabilities and stockholders equity |
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$ |
2,932,029 |
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$ |
2,983,228 |
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|
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-more-
CCA First Quarter 2011 Financial Results
Page 8
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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For the Three Months Ended |
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March 31, |
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2011 |
|
|
2010 |
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REVENUE: |
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|
|
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|
|
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Management and other |
|
$ |
427,523 |
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$ |
404,989 |
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Rental |
|
|
551 |
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|
|
793 |
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428,074 |
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|
405,782 |
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EXPENSES: |
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Operating |
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|
296,105 |
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|
|
289,673 |
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General and administrative |
|
|
21,447 |
|
|
|
18,614 |
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Depreciation and amortization |
|
|
27,055 |
|
|
|
24,964 |
|
|
|
|
|
|
|
|
|
|
|
344,607 |
|
|
|
333,251 |
|
|
|
|
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OPERATING INCOME |
|
|
83,467 |
|
|
|
72,531 |
|
|
|
|
|
|
|
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OTHER EXPENSES: |
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|
|
|
|
|
|
|
Interest expense, net |
|
|
18,402 |
|
|
|
17,271 |
|
Other expenses |
|
|
71 |
|
|
|
72 |
|
|
|
|
|
|
|
|
|
|
|
18,473 |
|
|
|
17,343 |
|
|
|
|
|
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
|
64,994 |
|
|
|
55,188 |
|
Income tax expense |
|
|
(24,664 |
) |
|
|
(21,016 |
) |
|
|
|
|
|
|
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INCOME FROM CONTINUING OPERATIONS |
|
|
40,330 |
|
|
|
34,172 |
|
Income from discontinued operations, net of taxes |
|
|
|
|
|
|
734 |
|
|
|
|
|
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NET INCOME |
|
$ |
40,330 |
|
|
$ |
34,906 |
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BASIC EARNINGS PER SHARE: |
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|
|
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|
|
Income from continuing operations |
|
$ |
0.37 |
|
|
$ |
0.29 |
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Income from discontinued operations, net of taxes |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.37 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
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DILUTED EARNINGS PER SHARE: |
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|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.37 |
|
|
$ |
0.29 |
|
Income from discontinued operations, net of taxes |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
|
|
Net income |
|
$ |
0.37 |
|
|
$ |
0.30 |
|
|
|
|
|
|
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|
-more-
CCA First Quarter 2011 Financial Results
Page 9
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CALCULATION OF EBITDA
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|
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For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
Net income |
|
$ |
40,330 |
|
|
$ |
34,906 |
|
Interest expense, net |
|
|
18,402 |
|
|
|
17,271 |
|
Depreciation and amortization |
|
|
27,055 |
|
|
|
24,964 |
|
Income tax expense |
|
|
24,664 |
|
|
|
21,016 |
|
Income from discontinued operations, net of taxes |
|
|
|
|
|
|
(734 |
) |
|
|
|
|
|
|
|
EBITDA |
|
|
110,451 |
|
|
|
97,423 |
|
|
|
|
|
|
|
|
CALCULATION OF FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2011 |
|
|
2010 |
|
Net income |
|
$ |
40,330 |
|
|
$ |
34,906 |
|
Income tax expense |
|
|
24,664 |
|
|
|
21,016 |
|
Income tax refund (paid), net |
|
|
4 |
|
|
|
(52 |
) |
Depreciation and amortization |
|
|
27,055 |
|
|
|
24,964 |
|
Depreciation and amortization for discontinued operations |
|
|
|
|
|
|
234 |
|
Income tax expense for discontinued operations |
|
|
|
|
|
|
451 |
|
Stock-based compensation reflected in G&A expense |
|
|
2,377 |
|
|
|
2,006 |
|
Amortization of debt costs and other non-cash interest |
|
|
1,066 |
|
|
|
1,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations |
|
$ |
95,496 |
|
|
$ |
84,599 |
|
|
|
|
|
|
|
|
|
|
Maintenance and technology capital expenditures |
|
|
(4,830 |
) |
|
|
(5,401 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Funds From Operations |
|
$ |
90,666 |
|
|
$ |
79,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations Per Diluted Share |
|
$ |
0.87 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
Adjusted Funds From Operations Per Diluted Share |
|
$ |
0.83 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
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CCA First Quarter 2011 Financial Results
Page 10
CALCULATION OF ADJUSTED FUNDS FROM OPERATIONS PER SHARE GUIDANCE
|
|
|
|
|
|
|
|
|
|
|
For the Year Ending |
|
|
|
December 31, 2011 |
|
|
|
Low End of |
|
|
High End of |
|
|
|
Guidance |
|
|
Guidance |
|
Net income |
|
$ |
155,497 |
|
|
$ |
162,021 |
|
Income tax expense |
|
|
95,304 |
|
|
|
99,303 |
|
Income taxes paid |
|
|
(70,224 |
) |
|
|
(73,171 |
) |
Depreciation and amortization |
|
|
111,199 |
|
|
|
111,199 |
|
Other non-cash items |
|
|
13,500 |
|
|
|
13,700 |
|
|
|
|
|
|
|
|
Funds From Operations |
|
$ |
305,276 |
|
|
$ |
313,052 |
|
Maintenance and technology capital expenditures |
|
|
(53,000 |
) |
|
|
(48,000 |
) |
|
|
|
|
|
|
|
Adjusted Funds From Operations |
|
$ |
252,276 |
|
|
$ |
265,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations Per Diluted Share |
|
$ |
2.81 |
|
|
$ |
2.88 |
|
|
|
|
|
|
|
|
Adjusted Funds From Operations Per Diluted Share |
|
$ |
2.32 |
|
|
$ |
2.44 |
|
|
|
|
|
|
|
|
NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION
EBITDA, Funds From Operations and Adjusted Funds From Operations, and 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 Companys results of operations
and are used to review and assess operating performance of the Company and its correctional
facilities 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
as that used by management.
Management and investors review both the Companys overall performance using GAAP and non-GAAP
measures including EPS, net income, Funds From Operations and Adjusted Funds From Operations, and
their corresponding per share metrics, as well as EBITDA to assess the operating performance of the
Companys correctional facilities. EBITDA, Funds From Operations and Adjusted Funds From
Operations are useful as supplemental measures of the performance of the Companys correctional
facilities because they do not take into account depreciation and amortization, or with respect to
EBITDA, the impact of the Companys 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 Companys
correctional facilities, management believes that assessing performance of the Companys
correctional facilities without the impact of depreciation or amortization is useful. The
calculation of Adjusted Funds From Operations substitutes capital expenditures incurred to maintain
the functionality and condition of the Companys correctional facilities in lieu of a provision for
depreciation. Some of these capital expenditures contain a discretionary element with respect to
when they are incurred, while others may be more urgent. Therefore, maintenance capital
expenditures may fluctuate from quarter to quarter, depending on the nature of the expenditures
required, seasonal factors such as weather, and budgetary conditions. The calculation of Funds
From Operations and Adjusted Funds From Operations also reflect the amount of income taxes paid.
We continuously evaluate tax planning strategies to reduce the effective tax rate for financial
reporting purposes as well as strategies to reduce the amount of taxes we pay. As a result, the
amount of taxes we pay may fluctuate from
period to period depending on the effectiveness of our strategies. The amount of taxes we pay may
also result from many factors beyond our control, such as changes in tax law. Finally, income
taxes paid fluctuate significantly from quarter to quarter based on statutory methods of computing
inter-period payment requirements and the date such taxes are due.
The Company may make adjustments to GAAP net income, EBITDA, Funds From Operations and Adjusted
Funds From Operations from time to time for certain other income and expenses that it considers
non-recurring, infrequent
-more-
CCA First Quarter 2011 Financial Results
Page 11
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. Other companies may
calculate EBITDA, Funds From Operations and Adjusted Funds From Operations differently than the
Company does, or adjust for other items, and therefore comparability may be limited. EBITDA, Funds
From Operations and Adjusted Funds From Operations, 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 Companys operating performance or any other measure of performance derived in
accordance with GAAP. This data should be read in conjunction with the Companys consolidated
financial statements and related notes included in its filings with the Securities and Exchange
Commission.
###