EX-99.2 3 cxw-ex992_6.htm EX-99.2 cxw-ex992_6.htm

Exhibit 99.2

 

CoreCivic, Inc.

Unaudited Pro Forma Consolidated Financial Statements

 

Basis of Presentation.  On June 29, 2021 (the “SSA-Baltimore Closing Date”), CoreCivic, Inc. (the “Company”) consummated the sale of 100% of the membership interests of SSA Baltimore Holdings, LLC, a wholly-owned unrestricted subsidiary of the Company and the owner of the approximately 541,000 square-foot Social Security Administration office building in Baltimore, Maryland (“SSA-Baltimore”), to a third party (the “Baltimore Sale”), for a gross sales price of $253.0 million (the “Sales Price”).  Concurrent with the Baltimore Sale, the Company used $170.6 million of the Sales Price to fully repay the 4.5% non-recourse mortgage note secured by SSA-Baltimore (the “SSA-Baltimore Mortgage Note”), which includes a make-whole payment in the amount of $29.1 million. The SSA-Baltimore Mortgage Note was assumed by the Company in connection with the acquisition of SSA-Baltimore and had an outstanding principal balance of $141.5 million on the SSA-Baltimore Closing Date.  

In addition, on May 28, 2021 (the “CCC/NARA Closing Date”), the Company consummated the sale to another third party of two additional properties (collectively, the “CCC/NARA Sale”), an approximately 277,000 square-foot office property primarily leased to an agency of the State of Florida (“Capital Commerce Center”) and an approximately 217,000 square-foot warehouse property leased to the General Services Administration and used by the National Archives & Records Administration ("NARA"), in a single transaction for an aggregate gross sales price of $73.0 million (the “CCC/NARA Sales Price”). Concurrent with the CCC/NARA Sale, the Company used $23.8 million of the CCC/NARA Sales Price to fully repay the 4.5% non-recourse mortgage note secured by Capital Commerce Center (the “CCC Mortgage Note”), which includes a prepayment charge of $3.4 million. The CCC Mortgage Note was obtained in connection with the acquisition of the Capital Commerce Center and had an outstanding principal balance of $20.4 million on the CCC/NARA Closing Date.

 

The Baltimore Sale and the CCC/NARA Sale are collectively referred to herein as the “Property Sales”. The unaudited pro forma consolidated balance sheet data as of March 31, 2021 gives effect to the Property Sales as if they occurred on March 31, 2021. The unaudited pro forma consolidated statements of operations data for the year ended December 31, 2020, and for the quarterly period ended March 31, 2021, give effect to the Property Sales as if they occurred on January 1, 2020. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma consolidated financial statements. The statements have been derived from, and should be read in conjunction with, the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on February 22, 2021, and the unaudited consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q as of and for the quarterly period ended March 31, 2021 filed with the SEC on May 6, 2021.

 

The unaudited pro forma adjustments are based on currently available information and assumptions that the Company’s management believes are directly attributable to the Property Sales and factually supportable. The pro forma financial statements are based upon information and assumptions available at the time of the filing of this Current Report on Form 8-K. Actual adjustments, however, may differ materially from the information presented. The unaudited pro forma adjustments may differ from the amounts that will be calculated and reported in the Company’s future filings. The unaudited pro forma consolidated financial information is for illustrative and informational purposes only and should not be considered representative of the Company’s future results of operations or financial position.


 

 

CORECIVIC, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET

(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

March 31, 2021

 

ASSETS

 

As Reported

 

 

SSA - Baltimore

Adjustments

 

 

CCC/NARA Sale

Adjustments

 

 

Notes

 

Pro Forma

 

Cash and cash equivalents

 

$

168,141

 

 

$

82,811

 

 

$

45,463

 

 

(A)

 

$

296,415

 

Restricted cash

 

 

16,413

 

 

 

(6,620

)

 

 

1,850

 

 

(B)

 

 

11,643

 

Accounts receivable, net of credit loss reserve of $6,105

 

 

259,620

 

 

 

—

 

 

 

—

 

 

 

 

 

259,620

 

Prepaid expenses and other current assets

 

 

27,681

 

 

 

(1,258

)

 

 

(12

)

 

 

 

 

26,411

 

Assets held for sale

 

 

281,523

 

 

 

(229,120

)

 

 

(50,590

)

 

 

 

 

1,813

 

Total current assets

 

 

753,378

 

 

 

(154,187

)

 

 

(3,289

)

 

 

 

 

595,902

 

Real estate and related assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Property and equipment, net of accumulated depreciation

       of $1,572,711

 

 

2,333,340

 

 

 

—

 

 

 

—

 

 

 

 

 

2,333,340

 

   Other real estate assets

 

 

225,341

 

 

 

—

 

 

 

—

 

 

 

 

 

225,341

 

Goodwill

 

 

5,902

 

 

 

—

 

 

 

—

 

 

 

 

 

5,902

 

Other assets

 

 

395,843

 

 

 

—

 

 

 

—

 

 

 

 

 

395,843

 

Total assets

 

$

3,713,804

 

 

$

(154,187

)

 

$

(3,289

)

 

 

 

$

3,556,328

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

346,494

 

 

$

(3,011

)

 

$

3,476

 

 

(C)

 

$

346,959

 

Current portion of long-term debt

 

 

38,914

 

 

 

(5,997

)

 

 

(1,349

)

 

 

 

 

31,568

 

Total current liabilities

 

 

385,408

 

 

 

(9,008

)

 

 

2,127

 

 

 

 

 

378,527

 

Long-term debt, net

 

 

1,719,115

 

 

 

(136,817

)

 

 

(18,977

)

 

 

 

 

1,563,321

 

Deferred revenue

 

 

22,804

 

 

 

—

 

 

 

—

 

 

 

 

 

22,804

 

Non-current deferred tax liabilities

 

 

85,356

 

 

 

—

 

 

 

—

 

 

 

 

 

85,356

 

Other liabilities

 

 

210,886

 

 

 

—

 

 

 

606

 

 

(D)

 

 

211,492

 

Total liabilities

 

 

2,423,569

 

 

 

(145,825

)

 

 

(16,244

)

 

 

 

 

2,261,500

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock – $0.01 par value; 50,000 shares authorized;

    none issued and outstanding at March 31, 2021

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

—

 

Common stock – $0.01 par value; 300,000 shares authorized;

    120,277 shares issued and outstanding at March 31, 2021

 

 

1,203

 

 

 

—

 

 

 

—

 

 

 

 

 

1,203

 

Additional paid-in capital

 

 

1,838,066

 

 

 

—

 

 

 

—

 

 

 

 

 

1,838,066

 

Accumulated deficit

 

 

(572,305

)

 

 

(8,362

)

 

 

12,955

 

 

(E)

 

 

(567,712

)

Total stockholders' equity

 

 

1,266,964

 

 

 

(8,362

)

 

 

12,955

 

 

 

 

 

1,271,557

 

Non-controlling interest – operating partnership

 

 

23,271

 

 

 

—

 

 

 

—

 

 

 

 

 

23,271

 

Total equity

 

 

1,290,235

 

 

 

(8,362

)

 

 

12,955

 

 

 

 

 

1,294,828

 

Total liabilities and equity

 

$

3,713,804

 

 

$

(154,187

)

 

$

(3,289

)

 

 

 

$

3,556,328

 

 


 

CORECIVIC, INC. AND SUBSIDIARIES

PRO FORMA STATEMENT OF OPERATIONS

(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

 

For the Twelve Months Ended December 31, 2020

 

 

 

As Reported

 

 

SSA - Baltimore

Adjustments

(F)

 

 

CCC/NARA Sale

Adjustments

(F)

 

 

Pro Forma

 

REVENUES

 

$

1,905,485

 

 

$

(23,812

)

 

$

(7,955

)

 

$

1,873,718

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

 

1,406,376

 

 

 

(9,378

)

 

 

(2,211

)

 

 

1,394,787

 

General and administrative

 

 

124,338

 

 

 

—

 

 

 

—

 

 

 

124,338

 

Depreciation and amortization

 

 

150,861

 

 

 

(7,334

)

 

 

(1,626

)

 

 

141,901

 

Shareholder litigation expense

 

 

620

 

 

 

—

 

 

 

—

 

 

 

620

 

Asset impairments

 

 

60,628

 

 

 

—

 

 

 

—

 

 

 

60,628

 

 

 

 

1,742,823

 

 

 

(16,712

)

 

 

(3,837

)

 

 

1,722,274

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(83,299

)

 

 

6,626

 

 

 

992

 

 

 

(75,681

)

Expenses associated with debt repayments and refinancing

       transactions

 

 

(7,141

)

 

 

(29,266

)

 

 

(3,723

)

 

 

(40,130

)

Gain (loss) on sale of real estate assets

 

 

(13,023

)

 

 

17,893

 

 

 

21,342

 

 

 

26,212

 

Other income (expense)

 

 

525

 

 

 

—

 

 

 

—

 

 

 

525

 

INCOME BEFORE INCOME TAXES

 

 

59,724

 

 

 

(11,847

)

 

 

14,493

 

 

 

62,370

 

Income tax expense

 

 

(4,386

)

 

 

—

 

 

 

—

 

 

 

(4,386

)

NET INCOME

 

 

55,338

 

 

 

(11,847

)

 

 

14,493

 

 

 

57,984

 

Net income attributable to non-controlling interest

 

 

(1,181

)

 

 

—

 

 

 

—

 

 

 

(1,181

)

NET INCOME ATTRIBUTABLE TO COMMON

      STOCKHOLDERS

 

$

54,157

 

 

$

(11,847

)

 

$

14,493

 

 

$

56,803

 

EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Basic

 

$

0.45

 

 

 

 

 

 

 

 

 

 

$

0.48

 

      Diluted

 

$

0.45

 

 

 

 

 

 

 

 

 

 

$

0.48

 

WEIGHTED AVERAGE COMMON SHARES

      OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Basic

 

 

119,559

 

 

 

 

 

 

 

 

 

 

 

119,559

 

      Diluted

 

 

120,929

 

 

 

 

 

 

 

 

 

 

 

120,929

 

 

 

 

 

 

 

 


 

CORECIVIC, INC. AND SUBSIDIARIES

PRO FORMA STATEMENT OF OPERATIONS

(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

 

 

 

For the Three Months Ended March 31, 2021

 

 

 

As Reported

 

 

SSA - Baltimore

Adjustments

(F)

 

 

CCC/NARA Sale

Adjustments

(F)

 

 

Pro Forma

 

REVENUES

 

$

454,718

 

 

$

(6,009

)

 

$

(1,956

)

 

$

446,753

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

 

332,884

 

 

 

(2,406

)

 

 

(612

)

 

 

329,866

 

General and administrative

 

 

29,530

 

 

 

—

 

 

 

—

 

 

 

29,530

 

Depreciation and amortization

 

 

32,712

 

 

 

—

 

 

 

—

 

 

 

32,712

 

Shareholder litigation expense

 

 

51,745

 

 

 

—

 

 

 

—

 

 

 

51,745

 

Asset impairments

 

 

1,308

 

 

 

—

 

 

 

—

 

 

 

1,308

 

 

 

 

448,179

 

 

 

(2,406

)

 

 

(612

)

 

 

445,161

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(18,428

)

 

 

1,621

 

 

 

239

 

 

 

(16,568

)

Other income (expense)

 

 

(148

)

 

 

—

 

 

 

—

 

 

 

(148

)

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(12,037

)

 

 

(1,982

)

 

 

(1,105

)

 

 

(15,124

)

Income tax expense

 

 

(113,531

)

 

 

(525

)

 

 

(293

)

 

 

(114,349

)

NET INCOME (LOSS)

 

 

(125,568

)

 

 

(2,507

)

 

 

(1,398

)

 

 

(129,473

)

Net income attributable to non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON

      STOCKHOLDERS

 

$

(125,568

)

 

$

(2,507

)

 

$

(1,398

)

 

$

(129,473

)

EARNINGS (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Basic

 

$

(1.05

)

 

 

 

 

 

 

 

 

 

$

(1.08

)

      Diluted

 

$

(1.05

)

 

 

 

 

 

 

 

 

 

$

(1.08

)

WEIGHTED AVERAGE COMMON SHARES

      OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Basic

 

 

119,909

 

 

 

 

 

 

 

 

 

 

 

119,909

 

      Diluted

 

 

121,366

 

 

 

 

 

 

 

 

 

 

 

121,366

 

 

 

 

 

 


 

CORECIVIC, INC. AND SUBSIDIARIES

 

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

 

The following pro forma adjustments have been reflected in the unaudited pro forma consolidated financial information.

 

(A)

Adjustment reflects the net cash proceeds received from the sale of the SSA-Baltimore, Capital Commerce Center, and NARA-Dayton properties after the deduction for closing costs and credits as well as the repayment of debt balances outstanding associated with the SSA-Baltimore and Capital Commerce Center properties and the associated defeasance premiums required by the lenders for the early repayment.  

(B)

Adjustment reflects the release of escrow accounts required under the SSA-Baltimore Mortgage Note, and the amount of sales proceeds withheld at closing of the SSA-Baltimore property and held in escrow pursuant to the Baltimore Sale.

(C)

Adjustments reflect the elimination of accrued liabilities and other accrued expenses related to the SSA-Baltimore, Capital Commerce Center, and NARA-Dayton properties, net of the accrual of income taxes payable for the pro forma balance sheet which assumes the sales took place on March 31, 2021.

(D)

Adjustment reflects the estimated accrued liability calculated by the Company pursuant to the Baltimore Sale.

(E)

Adjustment reflects the estimated effect on retained earnings from the impact of the gains on the sales of the SSA-Baltimore, Capital Commerce Center, and NARA-Dayton properties, net of the non-recourse debt defeasance costs, after income taxes.    

(F)

Adjustments reflect the revenue and expenses attributable to the SSA-Baltimore, Capital Commerce Center, and NARA-Dayton properties for the year ended December 31, 2020 and the three months ended March 31, 2021, which were included in the Company’s historical financial statements prior to being sold, as well as the impact of recording the gains on sales as if the Property Sales had occurred on January 1, 2020. The Company operated in compliance with REIT requirements for federal income tax purposes from January 1, 2013 through December 31, 2020.  The Company revoked its REIT election effective January 1, 2021, and the Company is, therefore, subject to federal and state income taxes on its taxable income at applicable tax rates, and is no longer entitled to a tax deduction for dividends paid. As a result, the pro forma adjustments to revenues and expenses for the year ended December 31, 2020 does not include a provision for income tax expense but the pro forma adjustments for the three month period ended March 31, 2021 includes a provision for income taxes at the statutory income rates.