Condensed Consolidating Financial Statements of Company and Subsidiaries

6 Months Ended

Jun. 30, 2013

Condensed Consolidating Financial Statements of Company and Subsidiaries

12. CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF THE COMPANY AND SUBSIDIARIES

The following condensed consolidating financial statements of the Company and subsidiaries have been prepared pursuant to Rule 3-10 of Regulation S-X. These condensed consolidating financial statements have been prepared from CCA’s financial information on the same basis of accounting as the consolidated financial statements. On December 31, 2012 CCA transferred certain real estate assets and contracts from certain of its subsidiaries to the Company (as the parent company). Accordingly, the Company (as the parent corporation to its subsidiaries) which heretofore had no independent assets or operations (as defined under Rule 3-10(f) of Regulation S-X) maintains its own independent assets as of June 30, 2013 and December 31, 2012. With respect to the periods prior to December 31, 2012, such internal legal restructuring has been reported in the following condensed consolidating financial statements as if it had occurred on January 1, 2012.

CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2013

(in thousands)

	Parent		Combined Subsidiary Guarantors		Consolidating Adjustments and Other			Total Consolidated Amounts
ASSETS
Cash and cash equivalents	$	8,971	$	28,904	$	—		$	37,875
Accounts receivable, net of allowance		318,510		316,651		(401,691	)		233,470
Current deferred tax assets		4		5,412		—			5,416
Prepaid expenses and other current assets		8,201		30,366		(9,598	)		28,969
Total current assets		335,686		381,333		(411,289	)		305,730
Property and equipment, net		2,445,166		93,659		—			2,538,825
Restricted cash		649		5,024		—			5,673
Investment in direct financing lease		6,500		—		—			6,500
Goodwill		—		11,158		—			11,158
Other assets		212,880		18,210		(190,851	)		40,239
Non-current deferred tax assets		—		9,561		(526	)		9,035
Total assets	$	3,000,881	$	518,945	$	(602,666	)	$	2,917,160
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	348,266	$	291,046	$	(411,290	)	$	228,022
Income taxes payable		—		652		—			652
Current liabilities of discontinued operations		—		79		—			79
Total current liabilities		348,266		291,777		(411,290	)		228,753
Long-term debt		1,150,000		100,000		(100,000	)		1,150,000
Deferred tax liabilities		526		—		(526	)		—
Other liabilities		900		36,318		—			37,218
Total liabilities		1,499,692		428,095		(511,816	)		1,415,971
Total stockholders’ equity		1,501,189		90,850		(90,850	)		1,501,189
Total liabilities and stockholders’ equity	$	3,000,881	$	518,945	$	(602,666	)	$	2,917,160

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2012

(in thousands)

	Parent		Combined Subsidiary Guarantors		Consolidating Adjustments and Other			Total Consolidated Amounts
ASSETS
Cash and cash equivalents	$	—	$	62,897	$	—		$	62,897
Accounts receivable, net of allowance		136,128		255,192		(138,556	)		252,764
Deferred tax assets		137		7,885		—			8,022
Prepaid expenses and other current assets		1,766		35,175		(9,882	)		27,059
Total current assets		138,031		361,149		(148,438	)		350,742
Property and equipment, net		2,462,917		105,874		—			2,568,791
Restricted cash		—		5,022		—			5,022
Investment in direct financing lease		7,467		—		—			7,467
Goodwill		—		11,988		—			11,988
Other assets		191,502		114,953		(275,723	)		30,732
Total assets	$	2,799,917	$	598,986	$	(424,161	)	$	2,974,742
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	28,061	$	286,342	$	(148,403	)	$	166,000
Income taxes payable		—		102		—			102
Current liabilities of discontinued operations		—		356		—			356
Total current liabilities		28,061		286,800		(148,403	)		166,458
Long-term debt		1,111,545		100,000		(100,000	)		1,111,545
Deferred tax liabilities		138,691		835		—			139,526
Other liabilities		—		35,593		—			35,593
Total liabilities		1,278,297		423,228		(248,403	)		1,453,122
Total stockholders’ equity		1,521,620		175,758		(175,758	)		1,521,620
Total liabilities and stockholders’ equity	$	2,799,917	$	598,986	$	(424,161	)	$	2,974,742

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended June 30, 2013

(in thousands)

	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	318,939		$	345,714		$	(230,672	)	$	433,981
EXPENSES:
Operating		237,181			307,768			(230,672	)		314,277
General and administrative		8,086			17,274			—			25,360
Depreciation and amortization		18,936			9,161			—			28,097
Asset impairments		—			2,637			—			2,637
		264,203			336,840			(230,672	)		370,371
OPERATING INCOME		54,736			8,874			—			63,610
OTHER (INCOME) EXPENSE:
Interest expense, net		10,621			1,291			—			11,912
Expenses associated with debt refinancing transactions		28,386			7,917			—			36,303
Other (income) expense		(1	)		(16	)		(19	)		(36	)
		39,006			9,192			(19	)		48,179
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		15,730			(318	)		19			15,431
Income tax (expense) benefit		(13	)		5,011			—			4,998
INCOME FROM CONTINUING OPERATIONS		15,717			4,693			19			20,429
Income from equity in subsidiaries		4,712			—			(4,712	)		—
NET INCOME	$	20,429		$	4,693		$	(4,693	)	$	20,429

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the three months ended June 30, 2012

(in thousands)

	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	356,070		$	90,883		$	(4,087	)	$	442,866
EXPENSES:
Operating		239,708			80,963			(4,087	)		316,584
General and administrative		18,384			4,711			—			23,095
Depreciation and amortization		18,459			9,843			—			28,302
		276,551			95,517			(4,087	)		367,981
OPERATING INCOME (LOSS)		79,519			(4,634	)		—			74,885
OTHER (INCOME) EXPENSE:
Interest expense, net		14,433			296			—			14,729
Expenses associated with debt refinancing transactions		287			—			—			287
Other (income) expense		27			(5	)		19			41
		14,747			291			19			15,057
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		64,772			(4,925	)		(19	)		59,828
Income tax (expense) benefit		(23,124	)		630			—			(22,494	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		41,648			(4,295	)		(19	)		37,334
Loss from equity in subsidiaries		(4,314	)		—			4,314			—
NET INCOME (LOSS)	$	37,334		$	(4,295	)	$	4,295		$	37,334

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the six months ended June 30, 2013

(in thousands)

	Parent		Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	632,376	$	687,708		$	(460,379	)	$	859,705
EXPENSES:
Operating		471,841		610,345			(460,379	)		621,807
General and administrative		17,695		38,897			—			56,592
Depreciation and amortization		37,587		18,140			—			55,727
Asset impairments		—		2,637			—			2,637
		527,123		670,019			(460,379	)		736,763
OPERATING INCOME		105,253		17,689			—			122,942
OTHER (INCOME) EXPENSE:
Interest expense, net		20,716		3,762			—			24,478
Expenses associated with debt refinancing transactions		28,563		7,965			—			36,528
Other (income) expense		320		(217	)		(38	)		65
		49,599		11,510			(38	)		61,071
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		55,654		6,179			38			61,871
Income tax benefit		138,198		1,452			—			139,650
INCOME FROM CONTINUING OPERATIONS		193,852		7,631			38			201,521
Income from equity in subsidiaries		7,669		—			(7,669	)		—
NET INCOME	$	201,521	$	7,631		$	(7,631	)	$	201,521

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the six months ended June 30, 2012

(in thousands)

	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments and Other			Total Consolidated Amounts
REVENUES	$	705,644		$	181,504		$	(8,977	)	$	878,171
EXPENSES:
Operating		477,239			163,856			(8,977	)		632,118
General and administrative		35,768			9,167			—			44,935
Depreciation and amortization		36,710			19,979			—			56,689
		549,717			193,002			(8,977	)		733,742
OPERATING INCOME		155,927			(11,498	)		—			144,429
OTHER (INCOME) EXPENSE:
Interest expense, net		31,027			592			—			31,619
Expenses associated with debt refinancing transactions		1,828			—			—			1,828
Other (income) expense		48			(34	)		39			53
		32,903			558			39			33,500
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		123,024			(12,056	)		(39	)		110,929
Income tax (expense) benefit		(43,920	)		2,367			—			(41,553	)
INCOME FROM CONTINUING OPERATIONS		79,104			(9,689	)		(39	)		69,376
Loss from equity in subsidiaries		(10,090	)		—			10,090			—
Loss from discontinued operations, net of taxes		—			(362	)		—			(362	)
NET INCOME	$	69,014		$	(10,051	)	$	10,051		$	69,014

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2013

(in thousands)

	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments And Other		Total Consolidated Amounts
Net cash provided by (used in) operating activities	$	(57,630	)	$	240,489		$	—	$	182,859
Net cash used in investing activities		(21,146	)		(7,592	)		—		(28,738	)
Net cash provided by (used in) financing activities		87,747			(266,890	)		—		(179,143	)
Net Increase (Decrease) in Cash and Cash Equivalents		8,971			(33,993	)		—		(25,022	)
CASH AND CASH EQUIVALENTS, beginning of year		—			62,897			—		62,897
CASH AND CASH EQUIVALENTS, end of year	$	8,971		$	28,904		$	—	$	37,875

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2012

(in thousands)

	Parent			Combined Subsidiary Guarantors			Consolidating Adjustments And Other		Total Consolidated Amounts
Net cash provided by operating activities	$	124,107		$	5,905		$	—	$	130,012
Net cash used in investing activities		(24,240	)		(19,115	)		—		(43,355	)
Net cash used in financing activities		(99,867	)		20,508			—		(79,359	)
Net Increase in Cash and Cash Equivalents		—			7,298			—		7,298
CASH AND CASH EQUIVALENTS, beginning of year		—			55,832			—		55,832
CASH AND CASH EQUIVALENTS, end of year	$	—		$	63,130		$	—	$	63,130