CCA Announces 2014 Second Quarter Financial Results

CCA Announces 2014 Second Quarter Financial Results 
Raises Full-Year EPS Guidance 
NASHVILLE, TN -- (Marketwired) -- 08/06/14 --   CCA (NYSE: CXW) (the
"Company" or "Corrections Corporation of America"), America's largest
owner of partnership correctional and detention facilities, announced
today its financial results for the second quarter of 2014. 
Second Quarter 2014 Financial Highlights 


 
--  Diluted EPS of $0.48
--  Adjusted Diluted EPS of $0.49
--  Normalized FFO Per Diluted Share of $0.68
--  AFFO Per Diluted Share of $0.68

  
Net income generated in the second quarter of 2014 totaled $55.7
million, or $0.48 per diluted share, compared to $20.4 million, or
$0.19 per diluted share generated in the second quarter of 2013. Net
income after adjusting for special items, increased to $58.0 million,
or $0.49 per diluted share during the second quarter of 2014,
compared to $57.1 million, or $0.52 per diluted share during the
second quarter of 2013. Special items include non-cash impairment
charges in both quarters, and debt refinancing and REIT conversion
costs in the prior year quarter. 
Second quarter 2014 per share amounts, as compared to the second
quarter 2013 per share amounts, were negatively impacted by the
issuance of 13.9 million shares of common stock in connection with
the payment of a special dividend on May 20, 2013. Pro forma Adjusted
Diluted EPS, calculated as if the shares were issued at the beginning
of 2013, was $0.49 in the second quarter of 2013. Normalized FFO per
diluted share was $0.68 in the second quarter of 2014 compared with
Pro forma Normalized FFO per share of $0.66 in the second quarter of
2013.  
Second quarter 2013 financial results were affected by an income tax
benefit of approximately $5.0 million resulting from tax planning
strategies implemented during the second quarter of 2013, which was
offset by the Company's decision to provide a Special Incentive Bonus
totaling approximately $5.0 million to non-management level staff in
lieu of merit increases in 2013.  
CCA President and Chief Executive Officer, Damon Hininger, stated,
"We are pleased with our second quarter financial results, with
adjusted diluted earnings per share coming in $0.02 higher than the
high end of the guidance we provided in May." 
Hininger continued, "During the second quarter we were also pleased
to have announced that the state of Tennessee and Trousdale County
executed an intergovernmental service agreement, the final step in
allowing us to move forward on construction of our new Trousdale
facility which we expect to be completed late in 2015." 
Operating Results 
Total revenue for the second quarter of 2014 totaled $410.7 million
compared to $425.0 million in the second quarter of 2013. The decline
in revenue was primarily attributable to contract losses that
resulted in a reduction of revenue of $23.2 million, while the impact
on facility net operating income (NOI) for these contract losses was
a decline of only $0.3 million from the second quarter of 2013 to the
second quarter of 2014. In addition, revenue declined due to a
reduction in populations from the United States Marshals Service
primarily at our California City facility. These reductions in
revenue were partially offset by an increase in revenue resulting
from the new lease of our California City facility effective December
1, 2013, our acquisition on July 31, 2013 of Correctional
Alternatives Inc., increases in populations from the states of
Oklahoma, Tennessee and New Mexico under existing contracts, and an
increase in population from the state of Arizona pursuant to a new
management contract at our Red Rock facility that commenced January
1, 2014. 
In total, NOI increased $2.1 million, from $121.0 million in the
second quarter of 2013 to $123.1 million in the second quarter of
2014, despite a reduction in facility NOI of $4.9 million resulting
from the transition of our Red Rock facility to a new management
contract effective January 1, 2014, and despite expenses associated
with the transition of the management contract at the Idaho
Correctional Center to the state of Idaho effective July 1, 2014.
These reductions were offset by an improvement in NOI for increases
in inmate populations and at our California City facility. NOI for
the second quarter of 2013 was also negatively impacted by the
aforementioned Special Incentive Bonus.  
Adjusted net income, NOI, FFO, Normalized FFO and AFFO, and their
corresponding per share amounts, are measures calculated and
presented on the basis of methodologies other than in accordance with
generally accepted accounting principles (GAAP). Please refer to the
Supplemental Financial Information and related note following the
financial statements herein for further discussion and
reconciliations of these measures to GAAP measures. 
Guidance  
The Company expects Adjusted Diluted EPS for the third quarter to be
in the range of $0.46 to $0.48 and Adjusted Diluted EPS for fourth
quarter to be in the range of $0.47 to $0.51, resulting in an
increase in full year 2014 Adjusted Diluted EPS in the range of $1.87
to $1.93 from the previous range of $1.84 to $1.92. The Company also
increased guidance for FFO per diluted share for the full-year 2014
to be in the range of $2.59 to $2.65, from $2.56 to $2.64, while
full-year 2014 AFFO per diluted share is in the range of $2.53 to
$2.58 from $2.49 to $2.58. 
During 2014, we expect to invest approximately $150.0 million to
$165.0 million in capital expenditures, consisting of $100.0 million
to $110.0 million in on-going prison construction and expenditures
related to potential land acquisitions, $25.0 million in maintenance
capital expenditures on real estate assets, and $25.0 million to
$30.0 million on capital expenditures on other assets and information
technology.  
Supplemental Financial Information and Investor Presentations 
We have made available on our website supplemental financial
information and other data for the second quarter of 2014. We do not
undertake any obligation, and disclaim any duty to update any of the
information disclosed in this report. Interested parties may access
this information through our website at www.cca.com under "Financial
Information" of the Investors section.  
The Second Quarter Investor Presentation will be available on our
website beginning on or about August 30, 2014. Interested parties may
access this information through our website at www.cca.com under
"Webcasts" of the Investors section. 
Webcast and Replay Information 
We will host a webcast conference call at 10:00 a.m. central time
(11:00 a.m. eastern time) on August 7, 2014, to discuss our second
quarter 2014 financial results and future outlook. To listen to this
discussion, please access "Webcasts" on the Investors page at
www.cca.com. The conference call will be archived on our website
following the completion of the call. In addition, a telephonic
replay will be available at 2:00 p.m. eastern time on August 7, 2014
through 2:00 p.m. eastern time on August 15, 2014, by dialing (888)
203-1112 or (719) 457-0820, pass code 3358950.  
About CCA 
CCA, a publicly traded real estate investment trust (REIT), is the
nation's largest owner of partnership correction and detention
facilities and one of the largest prison operators in the United
States, behind only the federal government and three states. We
currently own or control 52 correction and detention facilities and
manage 12 additional facilities owned by our government partners,
with a total design capacity of approximately 84,500 beds in 19
states and the District of Columbia. CCA specializes in owning,
operating and managing prisons and other correctional facilities and
providing inmate residential, community re-entry and prisoner
transportation services for governmental agencies. In addition to
providing the fundamental residential services relating to inmates,
our facilities offer a variety of rehabilitation and educational
programs, including basic education, faith-based services, life
skills and employment training and substance abuse treatment.  
Forward-Looking Statements  
This press release contains statements as to our beliefs and
expectations of the outcome of future events that are forward-looking
statements as defined within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to
differ materially from the statements made. These include, but are
not limited to, the risks and uncertainties associated with: (i)
general economic and market conditions, including the impact
governmental budgets can have on our per diem rates, occupancy, and
overall utilization; (ii) fluctuations in our operating results
because of, among other things, changes in occupancy levels,
competition, increases in cost of operations, fluctuations in
interest rates and risks of operations; (iii) our ability to obtain
and maintain correctional facility management contracts, including,
but not limited to, sufficient governmental appropriations, contract
compliance and as a result of inmate disturbances; (iv) changes in
the privatization of the corrections and detention industry, the
public acceptance of our services, the timing of the opening of and
demand for new prison facilities and the commencement of new
management contracts; (v) changes in government policy and in
legislation and regulation of the corrections and detention industry
that affect our business, including but not limited to, California's
continued utilization of out of state private correctional capacity;
(vi) our ability to meet and maintain REIT qualification status; and
(vii) increases in costs to construct or expand correctional
facilities that exceed original estimates, or the inability to
complete such projects on schedule as a result of various factors,
many of which are beyond our control, such as weather, labor
conditions and material shortages, resulting in increased
construction costs. Other factors that could cause operating and
financial results to differ are described in the filings we make from
time to time with the Securities and Exchange Commission.  
CCA takes no responsibility for updating the information contained in
this press release following the date hereof to reflect events or
circumstances occurring after the date hereof or the occurrence of
unanticipated events or for any changes or modifications made to this
press release. 


 
                                                                            
                                                                            
            CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES             
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
       (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       
                                                                            
                                                   June 30,    December 31, 
                     ASSETS                          2014          2013     
                                                 ------------  ------------ 
                                                                            
Cash and cash equivalents                        $     46,615  $     77,909 
Accounts receivable, net of allowance of $968                               
 and $1,265, respectively                             246,894       244,957 
Current deferred tax assets                             6,351         9,241 
Prepaid expenses and other current assets              29,007        20,612 
Current assets of discontinued operations                   -            15 
                                                 ------------  ------------ 
    Total current assets                              328,867       352,734 
                                                                            
Property and equipment, net                         2,538,996     2,546,613 
                                                                            
Restricted cash                                         2,607         5,589 
Investment in direct financing lease                    4,382         5,473 
Goodwill                                               16,110        16,110 
Non-current deferred tax assets                         5,875         3,078 
Other assets                                           76,657        77,828 
                                                 ------------  ------------ 
                                                                            
    Total assets                                 $  2,973,494  $  3,007,425 
                                                 ============  ============ 
                                                                            
      LIABILITIES AND STOCKHOLDERS' EQUITY                                  
                                                                            
Accounts payable and accrued expenses            $    237,438  $    252,277 
Income taxes payable                                      676         1,243 
Current liabilities of discontinued operations            370           886 
                                                 ------------  ------------ 
    Total current liabilities                         238,484       254,406 
                                                                            
Long-term debt                                      1,195,000     1,205,000 
Other liabilities                                      40,380        45,512 
                                                 ------------  ------------ 
                                                                            
    Total liabilities                               1,473,864     1,504,918 
                                                 ------------  ------------ 
                                                                            
Commitments and contingencies                                               
                                                                            
Preferred stock -- $0.01 par value; 50,000                                  
 shares authorized; none issued and outstanding                             
 at June 30, 2014 and December 31, 2013,                                    
 respectively                                               -             - 
Common stock -- $0.01 par value; 300,000 shares                             
 authorized; 116,413 and 115,923 shares issued                              
 and outstanding at June 30, 2014 and December                              
 31, 2013, respectively                                 1,164         1,159 
Additional paid-in capital                          1,734,404     1,725,363 
Accumulated deficit                                  (235,938)     (224,015)
                                                 ------------  ------------ 
                                                                            
    Total stockholders' equity                   $  1,499,630  $  1,502,507 
                                                 ------------  ------------ 
                                                                            
    Total liabilities and stockholders' equity   $  2,973,494  $  3,007,425 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
            CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES             
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
       (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       
                                                                            
                                 For the Three Months   For the Six Months  
                                    Ended June 30,        Ended June 30,    
                                 --------------------  -------------------- 
                                    2014       2013       2014       2013   
                                 ---------  ---------  ---------  --------- 
REVENUE:                                                                    
  Owned and controlled                                                      
   properties                    $ 348,557  $ 348,889  $ 687,726  $ 690,663 
  Managed only and other            62,137     76,116    127,190    151,065 
                                 ---------  ---------  ---------  --------- 
    Total revenue                  410,694    425,005    814,916    841,728 
                                 ---------  ---------  ---------  --------- 
EXPENSES:                                                                   
  Operating:                                                                
    Owned and controlled                                                    
     properties                    229,635    234,903    454,854    464,347 
    Managed only and other          57,975     69,098    120,136    137,876 
                                 ---------  ---------  ---------  --------- 
      Total operating expenses     287,610    304,001    574,990    602,223 
  General and administrative        26,559     25,360     51,951     56,592 
  Depreciation and amortization     28,752     27,675     57,136     55,052 
  Asset impairments                  2,238          -      2,238          - 
                                 ---------  ---------  ---------  --------- 
                                   345,159    357,036    686,315    713,867 
                                 ---------  ---------  ---------  --------- 
                                                                            
OPERATING INCOME                    65,535     67,969    128,601    127,861 
                                 ---------  ---------  ---------  --------- 
                                                                            
OTHER (INCOME) EXPENSE:                                                     
  Interest expense, net              8,364     11,912     18,712     24,478 
  Expenses associated with debt                                             
   refinancing transactions              -     36,303          -     36,528 
  Other (income) expense              (613)       (37)    (1,000)        64 
                                 ---------  ---------  ---------  --------- 
                                     7,751     48,178     17,712     61,070 
                                 ---------  ---------  ---------  --------- 
INCOME FROM CONTINUING                                                      
 OPERATIONS BEFORE INCOME TAXES     57,784     19,791    110,889     66,791 
                                                                            
Income tax (expense) benefit        (2,052)     3,377     (3,419)   137,824 
                                 =========  =========  =========  ========= 
                                                                            
INCOME FROM CONTINUING                                                      
 OPERATIONS                         55,732     23,168    107,470    204,615 
                                                                            
  Loss from discontinued                                                    
   operations, net of taxes              -     (2,739)         -     (3,094)
                                 ---------  ---------  ---------  --------- 
                                                                            
NET INCOME                       $  55,732  $  20,429  $ 107,470  $ 201,521 
                                 =========  =========  =========  ========= 
                                                                            
BASIC EARNINGS PER SHARE:                                                   
  Income from continuing                                                    
   operations                    $    0.48  $    0.22  $    0.93  $    1.97 
  Loss from discontinued                                                    
   operations, net of taxes              -      (0.03)         -      (0.03)
                                 ---------  ---------  ---------  --------- 
    Net income                   $    0.48  $    0.19  $    0.93  $    1.94 
                                 =========  =========  =========  ========= 
                                                                            
DILUTED EARNINGS PER SHARE:                                                 
  Income from continuing                                                    
   operations                    $    0.48  $    0.21  $    0.92  $    1.94 
  Loss from discontinued                                                    
   operations, net of taxes              -      (0.02)         -      (0.03)
                                 ---------  ---------  ---------  --------- 
    Net income                   $    0.48  $    0.19  $    0.92  $    1.91 
                                 =========  =========  =========  ========= 
                                                                            
REGULAR DIVIDENDS DECLARED PER                                              
 SHARE                           $    0.51  $    0.48  $    1.02  $    1.01 
                                 =========  =========  =========  ========= 
SPECIAL DIVIDENDS DECLARED PER                                              
 SHARE                           $       -  $    6.66  $       -  $    6.66 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
            CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES             
                     SUPPLEMENTAL FINANCIAL INFORMATION                     
       (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       
                                                                            
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS                 
                                                                            
                                  For the Three Months  For the Six Months  
                                     Ended June 30,       Ended June 30,    
                                 --------------------- -------------------- 
                                    2014       2013       2014       2013   
                                 ---------- ---------- ---------- --------- 
                                                                            
Net income                       $   55,732 $   20,429 $  107,470 $ 201,521 
Special items:                                                              
  Expenses associated with debt                                             
   refinancing transactions, net                                            
   of tax                                 -     33,092          -    33,299 
  Expenses associated with REIT                                             
   conversion, net of tax                 -      1,641          -     9,118 
  Asset impairments, net of tax       2,235      1,911      2,235     1,911 
  Income tax benefit for                                                    
   reversal of deferred taxes                                               
   due to REIT conversion                 -          -          -  (137,686)
                                 ---------- ---------- ---------- --------- 
Diluted adjusted net income      $   57,967 $   57,073 $  109,705 $ 108,163 
                                 ========== ========== ========== ========= 
Weighted average common shares                                              
 outstanding - basic                116,114    107,400    115,944   103,755 
Effect of dilutive securities:                                              
  Stock options                         835      1,284        899     1,420 
  Restricted stock-based                                                    
   compensation                         247        307        236       258 
                                 ---------- ---------- ---------- --------- 
Weighted average shares and                                                 
 assumed conversions - diluted      117,196    108,991    117,079   105,433 
                                 ========== ========== ========== ========= 
Adjusted Diluted Earnings Per                                               
 Share                           $     0.49 $     0.52 $     0.94 $    1.03 
                                 ========== ========== ========== ========= 
Pro forma Adjusted Diluted                                                  
 Earnings Per Share(1)           $     0.49 $     0.49 $     0.94 $    0.93 
                                 ========== ========== ========== ========= 
                                                                            
(1) The Pro forma Adjusted Diluted EPS for the three and six months ended   
    June 30, 2013 reflects the issuance of 13.9 million shares in connection
    with the payment of a special dividend in May 2013 as if those shares   
    were issued at the beginning of the period presented. See Page 9 for a  
    reconciliation of reported diluted weighted average shares outstanding  
    to pro forma diluted weighted average shares outstanding.               
                                                                            
                                                                            
                                                                            
            CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES             
                     SUPPLEMENTAL FINANCIAL INFORMATION                     
       (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       
                                                                            
CALCULATION OF FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS     
                                                                            
                                 For the Three Months   For the Six Months  
                                    Ended June 30,        Ended June 30,    
                                 --------------------  -------------------- 
                                    2014       2013       2014       2013   
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income                       $  55,732  $  20,429  $ 107,470  $ 201,521 
Depreciation of real estate                                                 
 assets                             21,431     19,957     42,508     39,562 
Depreciation of real estate                                                 
 assets for discontinued                                                    
 operations                              -        157          -        299 
Impairment of real estate                                                   
 assets, net of tax                  2,235          -      2,235          - 
                                 ---------  ---------  ---------  --------- 
    Funds From Operations        $  79,398  $  40,543  $ 152,213  $ 241,382 
                                                                            
Expenses associated with debt                                               
 refinancing transactions, net                                              
 of tax                                  -     33,092          -     33,299 
Expenses associated with REIT                                               
 conversion, net of tax                  -      1,641          -      9,118 
Goodwill and other impairments,                                             
 net of tax                              -      1,911          -      1,911 
Income tax benefit for reversal                                             
 of deferred taxes due to REIT                                              
 conversion                              -          -          -   (137,686)
                                 ---------  ---------  ---------  --------- 
    Normalized Funds From                                                   
     Operations                  $  79,398  $  77,187  $ 152,213  $ 148,024 
                                                                            
Maintenance capital expenditures                                            
 on real estate assets              (4,221)    (4,396)   (12,949)    (8,530)
Stock-based compensation             3,631      3,193      6,924      6,398 
Amortization of debt costs and                                              
 other non-cash interest               777        919      1,548      1,966 
Other non-cash revenue and                                                  
 expenses                              (16)         -        (32)         - 
                                 ---------  ---------  ---------  --------- 
    Adjusted Funds From                                                     
     Operations                  $  79,569  $  76,903  $ 147,704  $ 147,858 
                                 =========  =========  =========  ========= 
                                                                            
Normalized Funds From Operations                                            
 Per Diluted Share               $    0.68  $    0.71  $    1.30  $    1.40 
                                 =========  =========  =========  ========= 
Adjusted Funds From Operations                                              
 Per Diluted Share               $    0.68  $    0.71  $    1.26  $    1.40 
                                 =========  =========  =========  ========= 
Pro forma Normalized FFO Per                                                
 Diluted Share(1)                $    0.68  $    0.66  $    1.30  $    1.28 
                                 =========  =========  =========  ========= 
Pro forma AFFO Per Diluted                                                  
 Share(1)                        $    0.68  $    0.66  $    1.26  $    1.27 
                                 =========  =========  =========  ========= 
                                                                            
(1) The Pro forma Adjusted Diluted Normalized FFO and AFFO for the three and
    six months ended June 30, 2013 reflects the issuance of 13.9 million    
    shares in connection with the payment of a special dividend in May 2013 
    as if those shares were issued at the beginning of the period presented.
    See Page 9 for a reconciliation of reported diluted weighted average    
    shares outstanding to pro forma diluted weighted average shares         
    outstanding.                                                            
                                                                            
                                                                            
                                                                            
            CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES             
                     SUPPLEMENTAL FINANCIAL INFORMATION                     
       (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       
                                                                            
RECONCILIATION OF REPORTED DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING TO   
PRO FORMA DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING                       
                                                                            
                                 For the Three Months   For the Six Months  
                                    Ended June 30,        Ended June 30,    
                                 --------------------  -------------------- 
                                    2014       2013       2014       2013   
                                 ---------- ---------  ---------- --------- 
                                                                            
Weighted average shares                                                     
 outstanding and assumed                                                    
 conversions - diluted              117,196   108,991     117,079   105,433 
Non-GAAP Adjustment:                                                        
  Shares issued in Special                                                  
   Dividend (1)                           -    13,876           -    13,876 
  Weighted average impact                 -    (6,404)          -    (3,220)
                                 ---------- ---------  ---------- --------- 
Pro forma diluted shares                                                    
 outstanding                        117,196   116,463     117,079   116,089 
                                 ========== =========  ========== ========= 
                                                                            
(1) Reflects the issuance of shares in connection with the Special Dividend in 
May 2013 as if those 
    shares were issued at the beginning of the period presented. See Note B 
hereafter.              
                                                                                
                    
                                                                                
                    
                                                                                
                    
CALCULATION OF ADJUSTED FUNDS FROM OPERATIONS PER SHARE GUIDANCE            
                                                                            
                                    For the Quarter                         
                                        Ending          For the Year Ending 
                                  September 30, 2014     December 31, 2014  
                                 --------------------  -------------------- 
                                  Low End    High End   Low End    High End 
                                     of         of         of         of    
                                  Guidance   Guidance   Guidance   Guidance 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income                       $  54,000  $  56,000  $ 218,765  $ 225,765 
Asset impairments, net of tax            -          -      2,235      2,235 
                                 ---------  ---------  ---------  --------- 
Adjusted net income              $  54,000  $  56,000  $ 221,000  $ 228,000 
Depreciation on real estate                                                 
 assets                             21,000     21,000     85,000     85,000 
                                 ---------  ---------  ---------  --------- 
                                                                            
Funds From Operations            $  75,000  $  77,000  $ 306,000  $ 313,000 
                                                                            
Other non-cash expenses              4,200      4,300     17,000     17,000 
Maintenance capital expenditures                                            
 on real estate assets              (7,000)    (7,000)   (25,000)   (25,000)
                                 ---------  ---------  ---------  --------- 
                                                                            
Adjusted Funds From Operations   $  72,200  $  74,300  $ 298,000  $ 305,000 
                                 =========  =========  =========  ========= 
                                                                            
Funds From Operations Per                                                   
 Diluted Share                   $    0.64  $    0.65  $    2.59  $    2.65 
                                 =========  =========  =========  ========= 
Adjusted Funds From Operations                                              
 Per Diluted Share               $    0.61     $ 0.63  $    2.53  $    2.58 
                                 =========  =========  =========  ========= 

 
NOTES TO SUPPLEMENTAL FINANCIAL INFORMATION 
Note A: Adjusted Net Income, EBITDA, Funds From Operations (FFO) and
Adjusted Funds From Operations (AFFO), and their corresponding per
share metrics are non-GAAP financial measures. FFO and AFFO are
widely accepted non-GAAP supplemental measures of REIT performance
following the standards established by the National Association of
Real Estate Investment Trusts (NAREIT). CCA believes that these
measures are important operating measures that supplement discussion
and analysis of the Company's results of operations and are used to
review and assess operating performance of the Company and its
correctional facilities and their management teams. CCA believes that
it is useful to provide investors, lenders and security analysts'
disclosures of its results of operations on the same basis that is
used by management. 
NAREIT defines FFO as net income computed in accordance with
generally accepted accounting principles, excluding gains (or losses)
from sales of property and extraordinary items, plus depreciation and
amortization of real estate and impairment of depreciable real
estate. EBITDA, FFO and AFFO are useful as supplemental measures of
performance of the Company's corrections facilities because they
don't take into account depreciation and amortization, or with
respect to EBITDA, the impact of the Company's tax provisions and
financing strategies. Because the historical cost accounting
convention used for real estate assets requires depreciation (except
on land), this accounting presentation assumes that the value of real
estate assets diminishes at a level rate over time. Because of the
unique structure, design and use of the Company's correctional
facilities, management believes that assessing performance of the
Company's correctional facilities without the impact of depreciation
or amortization is useful. CCA may make adjustments to FFO from time
to time for certain other income and expenses that it considers
non-recurring, infrequent or unusual, even though such items may
require cash settlement, because such items do not reflect a
necessary component of the ongoing operations of the Company.
Normalized FFO excludes the effects of such items. CCA calculates
AFFO by adding to Normalized FFO non-cash expenses such as the
amortization of deferred financing costs and stock-based
compensation, and by subtracting from Normalized FFO recurring real
estate expenditures that are capitalized and then amortized, but
which are necessary to maintain a REIT's properties and its revenue
stream. Some of these capital expenditures contain a discretionary
element with respect to when they are incurred, while others may be
more urgent. Therefore, these capital expenditures may fluctuate from
quarter to quarter, depending on the nature of the expenditures
required, seasonal factors such as weather, and budgetary conditions.
CCA calculates Adjusted Net Income by adding or deducting from GAAP
Net Income amounts associated with the Company's debt refinancing,
REIT conversion, mergers and acquisitions activity and certain
impairments that the Company believes are unusual or nonrecurring to
provide an alternative measure of comparing operating performance for
the periods presented.  
Other companies may calculate Adjusted Net Income, EBITDA, FFO,
Normalized FFO, and AFFO differently than the Company does, or adjust
for other items, and therefore comparability may be limited. Adjusted
Net Income, EBITDA, FFO, Normalized FFO, and AFFO and their
corresponding per share measures are not measures of performance
under GAAP, and should not be considered as an alternative to cash
flows from operating activities, a measure of liquidity or an
alternative to net income as indicators of the Company's operating
performance or any other measure of performance derived in accordance
with GAAP. This data should be read in conjunction with the Company's
consolidated financial statements and related notes included in its
filings with the Securities and Exchange Commission.  
Note B: On May 20, 2013, CCA paid a special dividend in connection
with its conversion to a REIT. The shareholders were allowed to elect
to receive their payment of the special dividend either in all cash
,
all shares of CCA common stock, or a combination of cash and CCA
common stock, except that CCA placed a limit on the aggregate amount
of cash payable to the shareholders. Under ASC 505, "Equity" and ASU
2010-01, "Accounting for Distributions to Shareholders with
Components of Stock and Cash, a consensus of the FASB Emerging Issues
Task Force", a distribution that allows shareholders to elect to
receive cash or stock with a potential limitation on the total amount
of cash that all shareholders can elect to receive in the aggregate
is considered a share issuance that is reflected in per share results
prospectively. As such, the stock portion of the special dividend is
presented prospectively in basic and diluted per share results and
was not presented retroactively for all periods presented as it
would, for example, with a stock split or a stock dividend. As a
result CCA believes investors would benefit from seeing the operating
performance for the comparable periods accounting for the effect of
the special dividend in both periods. Therefore, for comparison
purposes, CCA has presented per share results on a pro forma basis as
if the shares issued in the special dividend were issued as of the
beginning of the periods presented.  
Contact: 
Investors and Analysts: 
Karin Demler
CCA 
(615) 263-3005  
Financial Media: 
Dave Gutierrez, 
Dresner Corporate Services 
(312) 780-7204 
 
 
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