Slide 1: First Quarter 2018 Investor Presentation
First Quarter 2018 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements As defined within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, certain statements herein may be considered forward-looking statements that are subject to risks and uncertainties tha
Slide 3: About CoreCivic
About CoreCivic
Slide 4: Who We Are
Who We Are • Established in 1983, 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 three
Slide 5: National Portfolio with Geographic Diversity
National Portfolio with Geographic Diversity As of March 31, 2018, we owned 83 real estate assets and provided correctional management services at 7 additional facilities owned by government partners CoreCivic Safety • 44 owned facilities, 64,064 beds • 7 managed-only facilities, 8,769 beds Core
Slide 6: Segment Revenue and NOI
Segment Revenue and NOI CoreCivic continues to diversify our revenue and cash flows through expansion of our CoreCivic Community and Properties business lines In total, CoreCivic Community and Properties accounted for 8.3% of revenue and 11.4% of net operating income for the three months ended Mar
Slide 7: CoreCivic Safety – A National Leader
CoreCivic Safety – A National Leader CoreCivic is the largest non-government owner of correctional and detention real estate in the United States We believe we own approximately 58% of all privately owned correctional and detention capacity Approximately 40% larger than our nearest competitor 1,
Slide 8: CoreCivic Properties – Real Estate Solutions
CoreCivic Properties – Real Estate Solutions CoreCivic Properties offers a wide range of flexible government real estate solutions Deep expertise and experience • We believe we are the largest developer of mission-critical, criminal justice center real estate projects over the past 15 years Very
Slide 9: CoreCivic Community residential reentry centers network
CoreCivic Community is a rapidly growing network of residential reentry centers whose mission is to help address America's recidivism crisis. In the last 4 years CoreCivic Community expanded to be the second largest provider in the market 4.5% of Facility Net Operating Income for the Q1 2018 fro
Slide 10: Diversified Customer Base
Diversified Customer Base As of March 31, 2018, CoreCivic had more than 125 agreements with federal, state and local agencies Further diversification within federal agency customers: • > 100 potential customers within federal agencies: 94 U.S. Marshals districts; 24 ICE field offices; and the Fede
Slide 11: Recent Market Trends & Business Development Update
Recent Market Trends & Business Development Update
Slide 12: Recent Trends & Business Development: Overview
Recent Trends & Business Development: Overview • In recent years CoreCivic has faced meaningful utilization and revenue headwind from a small number of government partners, yet all of these partners present opportunities for future growth across our varied lines of business Immigration and Customs
Slide 13: ICE – STFRC Contract
ICE – STFRC Contract • In 2014, we entered into a new fixed price contract with ICE for the development and operation of the South Texas Family Residential Center 2,400-bed South Texas Family Residential Center Dilley, TX (STFRC), a residential facilities housing families The U.S. was facing a hum
Slide 14: ICE – Demand for STFRC Remains High
ICE – Demand for STFRC Remains High United States Border Patrol FY 2018 year-to-date family unit apprehension Southwest Border Apprehensions Family Unit Subjects (FY13 – FY18) rates are elevated versus historic norms 20,000 18,000 STFRC allows ICE to process families in a 16,000 safe, humane environ
Slide 15: ICE Population Trends
ICE Population Trends United States Border Patrol Following a historic decline in apprehensions Southwest Border Total Apprehensions / Inadmissibles (FY13 – FY18) along the Southwest border in FY 2017, 70,000 activity along the border has returned to historic norms in FY 2018 60,000 Apprehensions in
Slide 16: USMS Population Trends
USMS Population Trends USMS Populations • After multiple years of USMS Population in Private Facilities Total USMS Populations population declines for the US 70,000 50,000 Marshals, populations have 65,000 64,500 45,000 USMS in Private Facilities been increasing since the Total USMS Population 40,00
Slide 17: BOP Population Trends
BOP Population Trends BOP Populations • The BOP population in secure BOP Population in Private Facilities Total BOP Secure Population facilities has declined 33,000 225,000 40,000 (16%) from its high reached in 205,500 Total BOP Secure Population 200,000 35,000 the summer of 2013. BOP in Private Fac
Slide 18: USMS & BOP Trends Have Significantly Impacted Our Utilization
USMS & BOP Trends Have Significantly Impacted Our Utilization Populations Housed in CoreCivic Facilities 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2011 2012 2013 2014 2015 2016 2017 1Q18 BOP USMS Changes in capacity demand from USMS & BOP led to a meaningful decrease i
Slide 19: CA Population Trends
CA Population Trends California Populations • California has undertaken numerous reforms to their California Out of State Population California Total Prison Population criminal justice system since a federal court ruling in 190,000 20,000 California Out of State Population California Total Prison Po
Slide 20: Over the Same Period we have Diversified Our Sources of Revenue
Over the Same Period we have Diversified Our Sources of Revenue Percentage of Total Revenue by Customer Percentage of Total Revenue by Customer Twelve Months Ended December 31, 2010 Three Months Ended March 31, 2018 California 13% (out-of-state) 6% 15% BOP 6%(1) Managed 21% - 23 contracts & 28,636 b
Slide 21: New & Expanded Partnerships - Recent Contract Awards
New & Expanded Partnerships - Recent Contract Awards • Accepted approximately 100 offenders from the state of Wyoming at our Tallahatchie County Correctional Facility under an out-of-state contract not used since April 2018 2010 January 2018 • The State of Kansas enters into a new development and 20
Slide 22: CoreCivic Community Growth - Pursuing More M&A Opportunities
CoreCivic Community Growth - Pursing More M&A Opportunities State(s) of Acquisition Acquisition Date of Acquisition # of Facilities Operation # of Beds Price Correctional Alternatives, Inc. July 2013 2 California 603 $36.5m Avalon Correctional Services, Inc. October 2015 11 Oklahoma, Texas, Wyoming
Slide 23: CoreCivic Properties Growth - Pursuing More M&A Opportunities
CoreCivic Properties Growth - Pursing More M&A Opportunities State(s) of Square Acquisition Acquisition Date of Acquisition # of Facilities Operation Footage Price 4 Facility RRC Portfolio August 2015 4 Pennsylvania 72,000 $13.8m Long Beach, CA June 2016 1 California 16,000 $7.7m Stockton Female Com
Slide 24: CoreCivic Properties Growth - Lease & Development Opportunities
CoreCivic Properties Growth - Lease & Development Opportunities • We are actively pursuing opportunities to lease existing, idle correctional assets in Colorado, Minnesota and OklahomaFacility Location Bed Capacity Huerfano County Correctional Center Colorado 752 Prairie Correctional Facility Minnes
Slide 25: Actively Marketing Available Capacity
Actively Marketing Available Capacity As of March 31, 2018, we had eight idle prison facilities, totaling 9,814 beds, that we are actively marketing to potential government partners. Utilizing available bed capacity up to standard operating capacity could improve cash flow and earnings potential M
Slide 26: Publicly Known Opportunities in the Corrections & Detention Market
Publicly Known Opportunities in the Corrections & Detention Market • Released an RFP in December 2017 to procure up to 1,000 out-of-state beds. The RFP was rescinded in April 2018, but is expected to be reissued for the same Idaho bed quantity soon. Oklahoma • We are actively marketing a potential l
Slide 27: Strong Balance Sheet and Cash Flow
Strong Balance Sheet and Cash Flow
Slide 28: Strong Balance Sheet and Simple Capital Structure
Strong Balance Sheet and Simple Capital Structure Our low cost of capital is a competitive Debt Maturity Schedule as of March 31, 2018 advantage $700M $325M Sr. Notes @ 4.125%, due Apr. 2020 $584M $600M $250M Sr. Notes @ 5.000%, due Oct. 2022 $350M Sr. Notes @ 4.625%, due May 2023 $500M $250
Slide 29: Subsequent Financing Transactions
Subsequent Financing Transactions Subsequent to the end of the first quarter of 2018, we entered into two material credit transactions: • Second Amended and Restated Senior Credit Facility On April 17, 2018, we entered into a new credit agreement for up to $1.0 billion, including a $800 million re
Slide 30: Flexibility with Limited Exposure to Interest Rate Fluctuations
Flexibility with Limited Exposure to Interest Rate Fluctuations • Conservative leverage profile with strong coverage ratios has led to low borrowing rates Average effective interest rate of 4.80% Only $280 million in floating rate debt reduces earnings exposure to rising interest rates • Opportu
Slide 31: Financial Guidance
Financial Guidance
Slide 32: 2018 Financial Guidance
2018 Financial Guidance(1) Q2 2018 Guidance Low-End High-End Diluted EPS $ 0.32 $ 0.33 Adjusted Diluted EPS(2) $ 0.33 $ 0.35 Normalized FFO per diluted share(2) $ 0.53 $ 0.55 AFFO per diluted share(2) $ 0.50 $ 0.52 Adjusted EBITDA(2) (in $ 000s) $ 91,400 $ 93,400 Full Year 2018 Guidance Low-End High
Slide 33: Appendix
Appendix
Slide 34: Increasing Capacity Utilization Could Lead to Meaningful Earnings Growth
Increasing Capacity Utilization Could Lead to Meaningful Earnings Growth Average Margin Estimated Potential Annual Total Beds Available Per Day(1) Incremental EBITDA CoreCivic Safety Vacant Correctional Facility Capacity(2) 9,814 $ 19.65 $ 70,388,462 CoreCivic Safety Facilities with > 100 beds avail
Slide 35: Reconciliation to Adjusted Diluted EPS
Reconciliation to Adjusted Diluted EPS ($ in thousands, except per share amounts) For the Quarter Ended For the Year Ended March 31, December 31, 2018 2017 2017 Net income $ 37,777 $ 50,047 $ 178,040 Special items: Charges associated with adoption of tax reform - - 4,548 Expenses associated with mer
Slide 36: Calculation of FFO, Normalized FFO and AFFO
Calculation of FFO, Normalized FFO and AFFO ($ in thousands, except per share amounts) For the Quarter Ended For the Year Ended March 31, December 31, 2018 2017 2017 Net income $ 37,777 $ 50,047 $ 178,040 Depreciation of real estate assets 24,408 23,699 95,902 Impairment of real estate assets - - 35
Slide 37: Calculation of NOI
Calculation of NOI ($ in thousands) For the Quarter Ended For the Year Ended March 31, December 31, 2018 2017 2017 Revenue Safety $ 404,498 $ 418,683 $ 1,648,224 Community 24,800 17,054 74,263 Properties 11,615 9,872 40,440 Other 3 75 2,571 Total revenues $ 440,916 $ 445,684 $ 1,765,498 Operating Ex
Slide 38: Calculation of EBITDA and Adjusted EBITDA
Calculation of EBITDA and Adjusted EBITDA ($ in thousands) For the Quarter Ended For the Year Ended March 31, December 31, 2018 2017 2017 Net income $ 37,777 $ 50,047 $ 178,040 Interest expense 19,275 16,702 69,507 Depreciation and amortization 38,089 36,257 147,129 Income tax expense 1,935 2,485 13
Slide 39: CoreCivic Segment Data - 2013
CoreCivic Segment Data - 2013 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Twelve Months Ended March 31, 2013 June 30, 2013 September 30, 201
Slide 40: CoreCivic Segment Data - 2014
CoreCivic Segment Data - 2014 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Twelve Months Ended March 31, 2014 June 30, 2014 September 30, 201
Slide 41: CoreCivic Segment Data - 2015
CoreCivic Segment Data - 2015 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Twelve Months Ended March 31, 2015 June 30, 2015 September 30, 201
Slide 42: CoreCivic Segment Data - 2016
CoreCivic Segment Data - 2016 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Twelve Months Ended March 31, 2016 June 30, 2016 September 30, 201
Slide 43: CoreCivic Segment Data - 2017
CoreCivic Segment Data - 2017 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Twelve Months Ended March 31, 2017 June 30, 2017 September 30, 201
Slide 44: CoreCivic Segment Data - 2018
CoreCivic Segment Data - 2018 ($ in thousands, except per man-day amounts, occupancy percentage and operating margin) For the Three Months Ended March 31, 2018 CoreCivic Safety Facilities: Facility revenue $ 404,498 Operating expenses: Fixed expense(1) 214,637 Variable expense 87,405 Total 302,042 F
Slide 45: Reconciliation to 2018 Guidance
Reconciliation to 2018 Guidance ($ in thousands, except per share amounts) Second Quarter 2018 Full-Year 2018 Low High Low High Net income $ 37,750 $ 39,750 $ 166,800 $ 173,800 Expenses associated with mergers and acquisitions 250 250 1,200 1,200 Refinancing charges 1,000 1,000 1,000 1,000 Adjusted
Slide 46: CoreCivic
& coreCivic