Corecivic, Inc. · NYSE:CXW
Corecivic — Q1 2023 Earnings Presentation
36 slides from Corecivic's earnings presentation, 2023
Slide 1: Investor Presentation First Quarter 2023
Investor Presentation First Quarter 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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
Slide 3: CoreCivic Operates at the Intersection of Government and Real Estate
CoreCivic Operates at the Intersection of Government and Real Estate Company Overview Compelling Investment Opportunity… • Largest private owner of real-estate utilized by • Diversified government-solutions company with the scale and differentiated expertise to solve the tough challenges Market Lead
Slide 4: Largest Private Owner of Real Estate Utilized by Government Agencies
Largest Private Owner of Real Estate Utilized by Government Agencies Manage 15.8 million square feet of real estate used by government SAFETY • 84.5% of segment NOI for the quarter ended March 31, 2023 • 13.5 million square feet • 66,399 correctional/detention beds • 7 idle prison facilities, includ
Slide 5: CoreCivic's Business Segments are Complementary
CoreCivic's Business Segments are Complementary Safety Properties Community Government tenants Customers 2023 Business Mix(1) 84.5% 12.0% 3.5% (% of NOI) Strong fundamental demand from federal and Government entities require purpose-built States and localities place high value on Industry Trends sta
Slide 6: Current Financial Performance
Current Financial Performance March 31, December 31, September 30, June 30, March 31, For the quarter ended 2023 2022 2022 2022 2022 Net Income $12.4MM $24.4MM $68.3MM $10.6MM $19.0MM Diluted EPS $0.11 $0.21 $0.58 $0.09 $0.16 Adjusted Diluted EPS(1) $0.13 $0.22 $0.08 $0.13 $0.14 Normalized FFO Per S
Slide 7: Key Factors Impacting 2022 Financial Results
Key Factors Impacting 2022 Financial Results Impacted Business Segments ➢ COVID-19 has had a significant impact on our occupancy, including most notably due to population reductions from ICE, but our earnings and cash SAFETY COMMUNITY flows remain strong—allowing for significant debt reduction in th
Slide 8: Extensive History of Durable Earnings and Cash Flows
Extensive History of Durable Earnings and Cash Flows • Long term stable cash flows from government partners due to essential, mission critical Adjusted EBITDA ($ in millions)(1) infrastructure and valued services 40% − 40-year track record of providing government $500 35% $441 $444 solutions with pi
Slide 9: A Recovery in Occupancy Post-Pandemic Could Provide Significant Earnings Growth
A Recovery in Occupancy Post-Pandemic Could Provide Significant Earnings Growth ➢ The COVID-19 pandemic has had a significant impact on the occupancy in our Safety and Community segments. An eventual recovery in occupancy to pre-pandemic levels would provide significant growth in earnings and cash f
Slide 10: Debt Reduction Due to Multi-Year Capital Allocation Strategy
Debt Reduction Due to Multi-Year Capital Allocation Strategy Debt Maturity Schedule – June 30, 2020 Debt Maturity Schedule – March 31, 2023 ($ in millions) ($ in millions) $1,400 $1,400 $382.7 $1,200 $1,200 $1,000 $1,000 $800 $157.5 $800 $600 $620.4 $400 $294.0 $266.4 $600 $631.0 $227.9 $196.0 $200
Slide 11: Positioned for Long-Term Success and Value Creation
Positioned for Long-Term Success and Value Creation ➢ Significant liquidity of approximately $274.0 million as of March 31, 2023 25.1% 3.5x Net Debt/ Fixed Charge Coverage(1)(2) ➢ Used liquidity to repay remaining $154 million of Undepreciated Fixed Assets our 4.625% Senior Unsecured Notes on Februa
Slide 12: Active Share Repurchase Plan & History of Returning Capital to Shareholders
Active Share Repurchase Plan & History of Returning Capital to Shareholders • Since 2009, CoreCivic has delivered $2.3 billion in capital STOCK BUYBACKS, DIVIDENDS AND LEVERAGE ($MM) returned to shareholders • As a C-Corp: $300 7.8x Since 2009, CXW has delivered $2.3bn in $256 buybacks and dividends
Slide 13: Market Updates & Recent Developments
Market Updates & Recent Developments
Slide 14: Our Value Proposition to Our Government Partners Remains Strong
Our Value Proposition to Our Government Partners Remains Strong… CoreCivic provides tailored solutions to meet the needs of state and federal partners State Partners Federal Partners • Key State Partner Challenges: • Key Federal Partner Challenges: ➢ Prison over-crowding, exacerbated by COVID-19 pan
Slide 15: And Has Resulted in Many New Contract Wins
…And Has Resulted in Many New Contract Wins New Contract Awards Date Details A local government agency enters into a two-year contract renewal for our 2,672-bed Tallahatchie County Correctional Facility in June 2022 Tutwiler, Mississippi, that allows the U.S. Marshals Service (USMS) to continue util
Slide 16: Core Value is in the Real Estate, But Our Business Model is Flexible
Core Value is in the Real Estate, But Our Business Model is Flexible We have been responsive to the needs of our government partners and those needs have evolved over our 40-year history Early Stages Rapid Growth Phase Current Market • Operational Cost Efficiencies → • Rapid Population Growth & Lack
Slide 17: Our Real Estate is Flexible for Alternative Uses
Our Real Estate is Flexible for Alternative Uses We have a well-established recent history of repurposing facilities for alternative government partners: Facility Facility Capacity State Details In August 2020, the State of Oklahoma ended their contract due to budget shortfalls. The facility Cimarro
Slide 18: America's Prisons: The Aging Infrastructure Crisis
America's Prisons: The Aging Infrastructure Crisis "There are almost 500 prisons nation wide built between 1980 and 2000 that need major upgrades, repurposing, or replacement…With the prison infrastructure challenges at an all-time high, we may be entering the next prison building boom, as states ar
Slide 19: Potential Growth Channels & Opportunities
Potential Growth Channels & Opportunities Multiple opportunities in the market to drive future growth, some of which can be realized due to our decision to convert to a taxable C-Corp in 2021, allowing CoreCivic to fund future growth initiatives with internally generated cash flows Properties Segmen
Slide 20: Southwest Border Apprehensions Remain Elevated
Southwest Border Apprehensions Remain Elevated • Apprehension rates along the United States Southwest border FY Southwest Land Border Encounters by Month remains elevated—hitting 22-year highs during the summer of 2023 (FYTD) 2022 2021 2020 2019 2022 and further increasing in the first three months
Slide 21: Unprecedented Commitment to ESG within the Corrections Industry
Unprecedented Commitment to ESG within the Corrections Industry • CoreCivic released the Company’s fifth Environmental, Social and Governance (ESG) report in April 2023, demonstrating the continued commitment to transparency and accountability and providing more robust disclosures to show how the Co
Slide 22: Company's ESG Focus Benefits All Stakeholders
Company's ESG Focus Benefits All Stakeholders Holistic Approach Toward Preparing Inmates for Successful Reentry… More Humane Conditions Focus on Rehabilitation & Reentry • Reduced Overcrowding • Ban the Box • Modern Real Estate Amenities • Education & Vocational Training • Improved Medical Programs
Slide 23: Human Rights – CoreCivic's Approach and Goals
Human Rights – CoreCivic's Approach and Goals Human rights are foundational in all that we do, therefore the salient rights of residents and employees are considered throughout our ESG and corporate strategies. We recognize the inherent dignity of every person and the benefits of promoting a culture
Slide 24: CoreCivic's Quality Assurance and Government Oversight
CoreCivic's Quality Assurance and Government Oversight CoreCivic facilities’ operations are subject to oversight and accountability measures, both internally and externally. Many of CoreCivic’s government partners maintain full-time, on-site monitors to promote transparency and ease of communication
Slide 25: CoreCivic's Quality Assurance and Government Oversight
CoreCivic's Quality Assurance and Government Oversight CoreCivic facilities also are subject to a range of other audit and inspection processes, based on facility mission, location and contractual and regulatory requirements: • CoreCivic Safety facilities that maintain American Correctional Associat
Slide 26: Operational Transparency Through Multiple Levels of Oversight
Operational Transparency Through Multiple Levels of Oversight Quality Assurance Audit Hotlines On-Site Contract Monitors Accrediting Organizations The quality assurance division, Residents, employees, and visitors have Many of our facilities have government The American Correctional Association inde
Slide 27: CoreCivic's Health Services – Scope of Care
CoreCivic's Health Services – Scope of Care c 26
Slide 28: CoreCivic's Health Services – Care Delivery
CoreCivic's Health Services – Care Delivery Whether CoreCivic directly provides health services or coordinates with partner agencies and third-party providers, we are committed to providing quality care in line with correctional health standards set by organizations like National Commission on Corre
Slide 29: CoreCivic's Commitment to Promoting Diversity, Equity and Inclusion
CoreCivic's Commitment to Promoting Diversity, Equity and Inclusion We believe that diversity, equity and inclusion drives the quality of our operations, increases employee engagement and fortifies a culture of dignity and respect. CoreCivic leans on our Diversity, Equity and Inclusion Advisory Coun
Slide 30: Highly Qualified, Proven Management Team
Highly Qualified, Proven Management Team Damon T. Hininger David Garfinkle Tony Grande President and Chief Executive Officer EVP and Chief Financial Officer EVP and Chief Development Officer • 25+ years of corrections experience • Began at CoreCivic in 2001 • Began at CoreCivic in 2003 • Began at Co
Slide 31: Diverse Board of Directors (Eight Independent) with Relevant Expertise
Diverse Board of Directors (Eight Independent) with Relevant Expertise Mark A. Emkes Donna M. Alvarado Robert J. Dennis Damon T. Hininger Stacia Hylton • Chairman of the Board • Founder and President, Aguila • Former Chairman and CEO, • President and CEO, CoreCivic • Principal, LS Advisory • Former
Slide 32: Appendix
E CoreCivic
Slide 33: Reconciliation to Adjusted Diluted EPS
Reconciliation to Adjusted Diluted EPS For the Three Months Ended March 31, December 31, September 30, June 30, March 31, ($ in thousands, except per share amounts) 2023 2022 2022 2022 2022 Net income $12,400 $24,437 $68,318 $10,562 $19,003 Special Items: Expenses associated with debt repayments and
Slide 34: Calculation of FFO, Normalized FFO and AFFO
Calculation of FFO, Normalized FFO and AFFO For the Three Months Ended March 31, December 31, September 30, June 30, March 31, ($ in thousands, except per share amounts) 2023 2022 2022 2022 2022 Net income $12,400 $24,437 $68,318 $10,562 $19,003 Depreciation and amortization of real estate assets 24
Slide 35: Calculation of NOI and Segment NOI
Calculation of NOI and Segment NOI For the Three Months Ended For the Twelve Months Ended March 31, December 31, ($ in thousands) 2023 2022 2022 Revenue Safety $ 417,650 $ 414,248 $ 1,684,035 Community 26,414 24,115 103,263 Properties 13,837 14,591 57,873 Other 101 34 158 Total revenues $ 458,002 $
Slide 36: Calculation of EBITDA and Adjusted EBITDA
Calculation of EBITDA and Adjusted EBITDA Three Months Ended Twelve Months Ended March 31, December 31, ($ in thousands) 2023 2022 2022 Net income $ 12,400 $ 19,003 $ 122,320 Interest expense 22,089 25,392 95,851 Depreciation and amortization 31,042 32,028 127,906 Income tax expense 8,146 6,610 42,9