Slide 1: Investor Overview Fourth Quarter 2018
Investor Overview Fourth Quarter 2018
Slide 2: Table of Contents
Table of Contents CoreCivic at a Glance 2-5 Complementary Operating Segments & Diversification Strategy 6-20 ESG and Rehabilitation Focus 21-24 Financials 25-26 Appendix 27-33 Investment Thesis 34 c 1
Slide 3: CoreCivic Operates at the Intersection of Government and Real Estate
CoreCivic Operates at the Intersection of Government and Real Estate Prioritizes returning capital to shareholders CoreCivic is a diversified government- Dividend yield of solutions REIT with the scale and differentiated expertise to solve the tough challenges that governments Increased Q1 2019 8.0%
Slide 4: Investment Thesis
Investment Thesis Leader in government real estate solutions, with differentiated deal-origination and property management capabilities Complementary segment assets and operating strategies, combined with deep industry expertise, deliver stable cash flows Executing diversification strategy to drive
Slide 5: CoreCivic Snapshot of Segment Data
CoreCivic Snapshot of Segment Data CoreCivic Revenue & Net Operating Combined Properties and Community NOI Income by Segment Segments Revenue Trend Growth 2018 Revenue 2018 NOI $101.8M $24.9M $42.5M $57.9M Community NOI $101.8M CAGR: 33.7% $74.3M $61.4M $1,676.0M $453.6M $20.3M $14.8M Properties NOI
Slide 6: Significant Addressable Market Opportunity
Significant Addressable Market Opportunity Continuing demand from Targeted asset-class has a 4.5 million adults were under community USMS, ICE and BOP strong annual pipeline supervision (parole, probation or monitoring) at the end of 2016(3) 29 states and the BOP with ≈$3B in annual government real
Slide 7: Complementary Business Segments
Complementary Business Segments Safety Properties Community Government tenants Customers 2020 Target Business Mix 75% 25% (% of NOI) Market existing capacity to meet federal Leverage differentiated capabilities to Expand incrementally to strengthen Strategy and state market demands expand in unique
Slide 8: Largest Private Owner of Real Estate Utilized by Government Agencies
Largest Private Owner of Real Estate Utilized by Government Agencies Own 17M+ square feet of real estate used by government SAFETY • 14.7M square feet • 72,833 correctional/detention beds • 85% NOI in the fourth quarter of 2018 • 8 idle facilities, including 9,814 beds available for growth opportuni
Slide 9: Executing Diversification Strategy
Executing Diversification Strategy Continue Community Market existing corrections segment’s incremental capacity to meet urgent expansion federal & state demands for Drive sustainable FFO growth, using modern infrastructure multiple paths for organic expansion and acquisitions Expand upon innovative
Slide 10: Diversification Strategy Has Increased Cash Flow Stability
Diversification Strategy Has Increased Cash Flow Stability CoreCivic has reduced dependence on BOP, California and low-margin managed-only contracts Entity Revenue % 2010 Revenue % 2018 Variance Federal Bureau of Prisons 15% 6% (9%) (correctional facilities) California 13% 4% (9%) (out-of-state popu
Slide 11: CoreCivic: Safety
CoreCivic: Safety • Provide high quality correctional and detention services to federal, state and local government agencies Strategy • Provide innovative, comprehensive, flexible turn-key solutions to government partners • Supply just-in-time correctional and detention capacity • Near-term goal: Ma
Slide 12: Track Record of Safety Awards
Track Record of Safety Awards Date Details September 2018 The state of Vermont enters into a new contract to house up to 350 offenders at our 2,672-bed Tallahatchie County Correctional Facility in Mississippi July 2018 Immigration and Customs Enforcement (ICE) enters into a new contract to house adu
Slide 13: Market Existing Corrections Capacity to Help States Meet Demands for Modern Infrastructure
Market Existing Corrections Capacity to Help States Meet Demands for Modern Infrastructure As of December 31, 2018: 8 idle prison facilities, including 9,814 beds • Strong pipeline of federal and state opportunities • Utilizing available bed capacity could improve cash flow and earnings potential •
Slide 14: Leverage Alternative Uses for Prison Facilities
Leverage Alternative Uses for Prison Facilities • Owned & Operated correctional North Fork Correctional Facility Tallahatchie County Cibola County Corrections Correctional Facility Center facilities can be easily converted to a leased facility, operated by a government partner • Facilities are simul
Slide 15: CoreCivic: Properties
CoreCivic: Properties • Acquire and manage government-leased real estate, with bias toward mission-critical tenants Strategy • Growth in government-leased assets supports portfolio diversification • Expand on innovative build-to-suit lessee model • Began diversification with first government-leased
Slide 16: Detail: Acquisitions of Government-Leased Real Estate
Detail: Acquisitions of Government-Leased Real Estate Acquisition Date of Acquisition # of Facilities State(s) of Operation Square Footage Acquisition 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 Community
Slide 17: Acquire New Properties with State and Local Tenants
Acquire New Properties with State and Local Tenants to Utilize Core Competence in Management and Maintenance • Core competency: Long-standing government relationships and real estate management capabilities built over the company's 35-year history Unique strategy that leverages existing resources
Slide 18: Leverage Strong Government Relationships to Expand Build-to-Suit Lessee Model
Leverage Strong Government Relationships to Expand Innovative Build-to-Suit Lessee Model Case Study: Lansing Correctional Facility • Core competency: Efficient builders of essential infrastructure Currently marketing solutions to address overwhelming criminal justice infrastructure needs across co
Slide 19: CoreCivic: Community
CoreCivic: Community • Reduce recidivism rates by helping offenders transition successfully to society Strategy • Continue incremental expansion through acquisitions • Expand the scope of correctional alternative solutions provided to government agencies • 26 facilities with ~5,200 beds • Second-lar
Slide 20: Detail: Consistent Growth in Community Segment
Detail: Consistent Growth in Community Segment Date of # of # of Acquisition Acquisition Acquisition Facilities State(s) of Operation Beds Price Correctional Alternatives, Inc. July 2013 2 California 603 $36.5m Avalon Correctional Services, Inc. October 2015 11 Oklahoma, Texas, Wyoming 3,157 $157.5m
Slide 21: Continue Incremental Expansion, Building on Position as Industry Consolidator
Continue Incremental Expansion, Building on Position as Industry Consolidator • Core competency: Industry consolidation; second largest residential reentry facility provider in the United States Anticipate adding capacity gradually over next 3-5 years through accretive acquisitions • Established r
Slide 22: Unprecedented Commitment to ESG within the Corrections Industry
Unprecedented Commitment to ESG within the Corrections Industry • Committed to addressing the critical problem of recidivism • Ardent supporter of “Ban the Box” and other efforts to remove reentry barriers • Publicly supported the First Step Act • Documented success assisting incarcerated population
Slide 23: Industry-Leading Commitment to Rehabilitation and Combating Recidivism
Industry-Leading Commitment to Rehabilitation and Combating Recidivism • Board and management committed to leadership in all stages of the rehabilitation cycle • Documented success in combatting recidivism • Governance: Board has the right expertise and diverse set of experiences to execute long-ter
Slide 24: 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 25: Diverse Board of Directors with Relevant Expertise
Diverse Board of Directors with Relevant Expertise Mark A. Emkes Donna M. Alvarado Robert J. Dennis Damon T. Hininger Stacia Hylton Harley G. Lappin • Chairman of the Board • Founder and MD, Aguila • Chairman and CEO, • President and CEO, • SVP, MTM Technologies, Inc. • Previous EVP, CoreCivic • For
Slide 26: Strong Balance Sheet with Low Cost of Capital
Strong Balance Sheet with Low Cost of Capital Debt Maturity Schedule as of December 31, 2018 Our low cost of capital is a competitive advantage $800M $721M • Weighted average cost of debt: 4.87% $700M $600M Next significant maturity in 2020 $500M $400M $344M Debt rated one notch below investme
Slide 27: 2019 Financial Guidance
2019 Financial Guidance(1) Q1 2019 Guidance Low-End High-End Diluted EPS $ 0.36 $ 0.37 Adjusted Diluted EPS(2) $ 0.36 $ 0.38 Normalized FFO per diluted share(2) $ 0.58 $ 0.60 AFFO per diluted share(2) $ 0.56 $ 0.58 Adjusted EBITDA(2) (in $ 000s) $ 102,500 $ 103,500 Full Year 2019 Guidance Low-End Hi
Slide 28: Appendix
Appendix
Slide 29: Numerous Publicly Known Opportunities in All Segments
Numerous Publicly Known Opportunities in All Segments • The Governor is pursuing a plan to construct 3 new male prisons, replacing up to 13 outdated and overcrowded facilities, at an estimated cost of up to Properties Alabama $1 billion. Properties Oklahoma • We are actively marketing a potential lo
Slide 30: Reconciliation to Adjusted Diluted EPS
Reconciliation to Adjusted Diluted EPS ($ in thousands, except per share amounts) For the Quarter Ended For the Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 Net income $ 41,239 $ 41,340 $ 159,207 $ 178,040 Special items: Expenses associated with debt refinancing transactions - -
Slide 31: 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 Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 Net income $ 41,239 $ 41,340 $ 159,207 $ 178,040 Depreciation and amortization of real estate assets 26,982 24,485 10
Slide 32: Calculation of NOI
Calculation of NOI ($ in thousands) For the Quarter Ended For the Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 Revenue Safety $ 435,979 $ 409,785 $ 1,675,998 $ 1,648,224 Community 27,190 20,431 101,841 74,263 Properties 19,002 10,346 57,899 40,440 Other 22 14 28 2,571 Total reve
Slide 33: Calculation of EBITDA and Adjusted EBITDA
Calculation of EBITDA and Adjusted EBITDA ($ in thousands) For the Quarter Ended For the Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 Net income $ 41,239 $ 41,340 $ 159,207 $ 178,040 Interest expense 22,518 18,617 82,129 69,507 Depreciation and amortization 40,387 37,565 156,501
Slide 34: Reconciliation to 2019 Guidance
Reconciliation to 2019 Guidance ($ in thousands, except per share amounts) First Quarter 2019 Full-Year 2019 Low High Low High Net income $ 42,280 $ 44,280 $ 170,120 $ 180,120 Expenses associated with mergers and acquisitions 720 720 2,880 2,880 Adjusted net income $ 43,000 $ 45,000 $ 173,000 $ 183,
Slide 35: Investment Thesis
Investment Thesis Leader in government real estate solutions, with differentiated deal-origination and property management capabilities Complementary segment assets and operating strategies, combined with deep industry expertise, deliver stable cash flows Executing diversification strategy to drive