CoreCivic : Third Quarter 2022 Investor Presentation
11/18/2022 | 03:09pm EST
Investor Presentation
Third Quarter 2022
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 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) changes in government policy (including the DOJ not renewing contracts as a result of President Biden's Executive Order on Reforming Our Incarceration System to Eliminate the use of Privately Operated Criminal Detention Facilities) (two agencies of the DOJ, the Federal Bureau of Prisons, or BOP, and the U.S. Marshals Service, or USMS, utilize our services), legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or our business, in particular, including, but not limited to, the continued utilization of our correctional and detention facilities by the federal government, and the impact of any changes to immigration reform and sentencing laws (our company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual's incarceration or detention); (ii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of our services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as well as our ability to utilize available beds; (iv) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on our contract renewals and renegotiations, per diem rates, and occupancy; (v) fluctuations in our operating results because of, among other things, changes in occupancy levels; competition; contract renegotiations or terminations; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the duration of the federal government's denial of entry at the United States southern border to asylum-seekers and anyone crossing the southern border without proper documentation or authority in an effort to contain the spread of COVID-19; (vii) government and staff responses to staff or residents testing positive for COVID-19 within public and private correctional, detention and reentry facilities, including the facilities we operate; (viii) restrictions associated with COVID-19 that disrupt the criminal justice system, along with government policies on prosecutions and newly ordered legal restrictions that affect the number of people placed in correctional, detention, and reentry facilities, including those associated with a resurgence of COVID-19; (ix) whether revoking our REIT election, effective January 1, 2021, and our revised capital allocation strategy can be implemented in a cost effective manner that provides the expected benefits, including facilitating our planned debt reduction initiative and planned return of capital to shareholders; (x) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (xi) our ability to have met and maintained qualification for taxation as a REIT for the years we elected REIT status; and (xiii) the availability of debt and equity financing on terms that are favorable to us, or at all. 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.
The Company takes no responsibility for updating the information contained in this presentation 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 presentation or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.
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CoreCivic Operates at the Intersection of Government and Real Estate
Company Overview
Diversified government-solutions company with the scale and differentiated expertise to solve the tough challenges that governments face in flexible, cost-effective ways
Revenues and Adj. EBITDA for the nine months ended September 30, 2022, were $1.37 billion and $228.0 million (16.6% margin), respectively
Owns and manages 16.3 million square feet of real estate used by government
Approximately 56% of privately-owned correctional facilities in the U.S.
Unprecedented commitment to Environmental, Social and Governance (ESG) reporting within the corrections industry
Founded in 1983 and headquartered in Brentwood, Tennessee
Provides a broad range of solutions to government partners through three segments
Safety
Properties
Community
CoreCivic's historical core business,
Leases mission-critical real estate to
Completes spectrum of correctional
addresses the need for correctional
government tenants to address
services by providing needed
facilities, including programming,
serious challenges in their criminal
residential reentry facilities and
recreational, courts, and
justice infrastructure
non-residential services primarily to
administrative spaces
states and localities
EST. 1983
EST. 2012
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EST. 2013
Compelling Investment Opportunity…
Market Leader with
• Largest private owner of real-estate utilized by
government agencies
Critical Infrastructure in
• Public overcrowding or lack of facilities drive private
Market with High Entry
market need
Barriers
• Significant cost and time to build new facility
Longstanding
Government
• 37+ year history of government service and relationships
Relationships with High
• Average retention rate of 95.0% since 2018(1)
Renewal Rates
Conservative Balance
• Strong and predictable cash flow from large
unencumbered asset base
Sheet with Strong
• Low leverage and strong fixed charge coverage
Predictable Cash Flows
• Diversifying toward growing Properties and Community
and Diversified Growth
segments
Proven Management
Team with Track
• Combined 120+ years experience
Record of Excellence
• Unwavering commitment to rehabilitation and combating
Over Multiple
recidivism
Administrations
…That Benefits the Public Good
• Improved conditions
Reduced overcrowding, modern amenities, and
improved medical programs
Prepares Offenders for
99.6% average facility ACA Audit Score
Successful Reentry Into
• Focus on rehabilitation and reentry
Society
Supports legislation designed to eliminate
discrimination against rehabilitated justice-involved
persons
Training and treatment programs
Company's ESG Focus
• Serves the needs of government partners, taxpayers and
Benefits All
the broader community
Stakeholders
1) Refers to Owned/Controlled Facilities
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Largest Private Owner of Real Estate Utilized by Government Agencies
Manage 16.3 million square feet of real estate used by government
SAFETY
83.5% of segment NOI for the nine months ended September 30, 2022
13.9 millionsquare feet
68,377 correctional/detention beds
7 idle prison facilities, including 8,459 beds available for growth opportunities
PROPERTIES
12.5% of segment NOI for the nine months ended September 30, 2022
1.8 millionsquare feet
Consists of a combination of corrections and reentry facilities leased government entities totaling8 facilities, including 9,154 beds
COMMUNITY
4.0% of segment NOI for the nine months ended September 30, 2022
0.6 millionsquare feet
4,869 community corrections beds
Serves approximately 20,000 individuals on a daily basis through non residential electronic monitoring and case management services
3 idle facilities, including 650 beds available for growth opportunities
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CoreCivic's Business Segments are Complementary
Customers
2022 Business
Mix(1)
(% of NOI)
Industry Trends
Value Proposition
Core Competency
Safety
Properties
Community
Government tenants
83.5%
12.5%
4.0%
Strong fundamental demand from federal and
Government entities require purpose-
States and localities place high value
state partners
built facilities and financing flexibility
on reducing recidivism
Critical infrastructure without available
Facility design, construction and
Broad rehabilitative expertise to deliver
alternative capacity, flexible solutions tailored
maintenance expertise. More efficient
customized and flexible program
to government partners' needs
process for developing needed solutions
offerings, includes critical infrastructure
Ability to develop unique solutions for government partners
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1) Based on financial results for the nine months ended September 30, 2022
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CoreCivic Inc. published this content on 18 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 November 2022 20:08:01 UTC.