CoreCivic Reports Fourth Quarter and Full Year 2023 Financial Results
- Positive financial results for the full year 2023, exceeding guidance for Net income, Diluted EPS, FFO per diluted share, and EBITDA
- Increased population and occupancy levels, reaching 74% occupancy - the highest quarterly level since the second quarter of 2020
- Debt reduction progress with total debt reduced by $158 million in 2023, and leverage nearly in line with the longer-term target
- Share repurchase program initiated in 2022, repurchasing 3.5 million shares of common stock in 2023
- Three new management contracts signed in the fourth quarter of 2023, indicating growth and expansion opportunities
- Expected impact of the expiration of the lease of the California City Correctional Center on revenue and EBITDA
- Continued labor challenges despite improvements in staffing levels
Momentum Continues With Three New Management Contracts
Signed During the Fourth Quarter
Provides 2024 Full Year Guidance
BRENTWOOD, Tenn., Feb. 07, 2024 (GLOBE NEWSWIRE) -- CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the fourth quarter and full year 2023.
Damon T. Hininger, CoreCivic's President and Chief Executive Officer, commented, "CoreCivic is experiencing strong business momentum as we head into 2024. Our margins and occupancy are progressing toward pre-COVID-19 levels. Labor availability and wage inflation are normalizing. Our government partners are increasingly looking to us to help solve their growing capacity and infrastructure challenges, evidenced by the three new management contracts and increase in overall utilization during the fourth quarter. We have managed our business prudently, and we are well-positioned to serve their growing needs."
Financial Highlights – Full Year 2023
- Total revenue of
$1.90 billion - CoreCivic Safety revenue of
$1.73 billion - CoreCivic Community revenue of
$115.1 million - CoreCivic Properties revenue of
$49.9 million
- CoreCivic Safety revenue of
- Net income of
$67.6 million - Diluted earnings per share of
$0.59 - Adjusted Diluted EPS of
$0.61 - Normalized FFO per diluted share of
$1.47 - Adjusted EBITDA of
$311.0 million
Commenting on financial results for the quarter, Hininger added, "We are pleased with CoreCivic's financial performance for 2023, as we exceeded the financial guidance for the fourth quarter we provided in November 2023, and ended up in the top half of the financial guidance range we provided in February 2023 for Net income, Diluted EPS, FFO per diluted share and EBITDA. Importantly, we experienced a positive progression in our population and occupancy during each quarter of 2023, and we ended the year at
Hininger continued, "We are also very pleased with our debt reduction progress. During 2023, we reduced total debt by
"Looking ahead," Hininger added, "we are excited to have returned to a more normal operating environment, with most issues relating to COVID-19, including Title 42 occupancy restrictions and our most acute labor challenges, largely behind us. We anticipate the continued positive population trends in 2024, both through higher utilization of existing contracts and new contracts signed in 2023. Facility operating margins are also expected to show improvement compared to 2023, reflecting the positive impact of higher occupancy on our leveraged operating model, as well as the continued normalization of our operating expenses. Against that, our guidance includes the impact of the expected March 31, 2024 expiration of the lease of our California City Correctional Center to the California Department of Corrections and Rehabilitation, which generated
Financial Highlights – Fourth Quarter 2023
- Total revenue of
$491.2 million - CoreCivic Safety revenue of
$448.7 million - CoreCivic Community revenue of
$30.5 million - CoreCivic Properties revenue of
$12.0 million
- CoreCivic Safety revenue of
- Net Income of
$26.5 million - Diluted earnings per share of
$0.23 - Adjusted Diluted EPS of
$0.23 - Normalized FFO per diluted share of
$0.45 - Adjusted EBITDA of
$90.0 million
Fourth Quarter 2023 Financial Results Compared With Fourth Quarter 2022
Net income in the fourth quarter of 2023 increased to
The increased adjusted per share amounts resulted primarily from higher federal and state populations, particularly at our facilities serving U.S. Immigration & Customs Enforcement (ICE), combined with lower interest expense and a decrease in shares outstanding, both resulting from our capital allocation strategy. These earnings increases were partially offset by the expiration of our lease with the Oklahoma Department of Corrections (ODC) at our North Fork Correctional Facility on June 30, 2023, and tax credits reflected in the fourth quarter of 2022 that were available under the Coronavirus Aid, Relief and Economic Security Act.
Our labor attraction and retention initiatives continue, and our staffing levels have improved while the costs of temporary labor resources, including associated travel expenses, overtime and incentives, declined meaningfully from the prior year quarter. The investments in our staffing place CoreCivic in a strong position to manage increased populations resulting from the end of Title 42 COVID-19 occupancy restrictions, which ended May 11, 2023. Under Title 42, asylum-seekers and others crossing the border without proper documentation or authority were denied entry at the United States border to contain the spread of COVID-19. From mid-May 2023 through December 2023, the number of individuals in the custody of ICE increased
Earnings before interest, taxes, depreciation and amortization (EBITDA) was
Funds From Operations (FFO) increased to
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, 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 the note following the financial statements herein for further discussion and reconciliations of these measures to net income, the most directly comparable GAAP measure.
Business Updates
Capital Strategy
Debt Repayments. We continued to make progress on our debt reduction strategy, and our total debt repaid for the twelve months ended December 31, 2023 was
Amendment and Extension of Bank Credit Facility. On October 11, 2023, we entered into a Fourth Amended and Restated Credit Agreement (New Bank Credit Facility) in an aggregate amount of
Share Repurchases. On May 12, 2022, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to
As of December 31, 2023, we had
New Management Contracts
New Management Contract with State of Montana. On November 14, 2023, we announced a new management contact with the state of Montana to care for up to 120 inmates at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona. The initial term of the contract is for two years, ending October 31, 2025. The contract may be extended by mutual agreement in two-year intervals, or any interval advantageous to the State. The total term, including renewals, may not exceed seven years. The intake process for the 120 inmates was complete as of December 31, 2023. As of December 31, 2023, we also cared for approximately 875 residents from Hawaii and nearly 600 residents from the state of Idaho at the Saguaro Correctional Facility. The new contract represents an expansion of our relationship with the state of Montana where we also manage the fully occupied company-owned Crossroads Correctional Center in Shelby, Montana for the state of Montana pursuant to a separate management contract.
New Management Contract with State of Wyoming. On November 16, 2023, we announced a new management contact with the state of Wyoming to care for up to 240 inmates at the Company's 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi. We previously cared for inmates for Wyoming under a management contract that had not been utilized since 2019. The term of the new contract runs through June 30, 2026. The intake process for the 240 inmates was complete as of December 31, 2023.
New Management Contract with Harris County, Texas. On November 16, 2023, we announced a new management contract to care for up to 360 inmates at the Tallahatchie County Correctional Facility. Upon mutual agreement, the County may access an additional 360 beds at the Tallahatchie facility. The initial contract term began on December 1, 2023, and ends November 30, 2024. The contract may be extended at the County's option for up to four additional one-year terms. We began receiving inmates from Harris County during the fourth quarter of 2023 and anticipate the intake process to be complete during the first quarter of 2024.
We also cared for residents from the U.S. Marshals Service, Wyoming, Vermont, South Carolina, the U.S. Virgin Islands, Tallahatchie County (MS), and Hinds County (MS) at the Tallahatchie County Correctional Facility.
2024 Financial Guidance
Based on current business conditions, we are providing the following financial guidance for the full year 2024:
| Full Year 2024 | |
| • Net income | |
| • Diluted EPS | |
| • FFO per diluted share | |
| • EBITDA |
During 2024, we expect to invest
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the fourth quarter of 2023. Interested parties may access this information through our website at http://ir.corecivic.com/ under “Financial Information” of the Investors section. We do not undertake any obligation and disclaim any duties to update any of the information disclosed in this report.
Management may meet with investors from time to time during the first quarter of 2024. Written materials used in the investor presentations will also be available on our website beginning on or about February 29, 2024. Interested parties may access this information through our website at http://ir.corecivic.com/ under “Events & Presentations” of the Investors section.
Conference Call, 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 Thursday, February 8, 2024, which will be accessible through the Company's website at www.corecivic.com under the “Events & Presentations” section of the "Investors" page.
To participate via telephone and join the call live, please register in advance here https://register.vevent.com/register /BI9f81fd3b3bcb458780947f04024c22e2. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode.
About CoreCivic
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 high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
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 within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. 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, 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, including as a consequence of the United States Department of Justice 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, impacting utilization primarily by the United States Federal Bureau of Prisons and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do 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 impact resulting from the termination of Title 42, the federal government's policy to deny 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 the coronavirus and related variants, or COVID-19; (vii) government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns and changing budget priorities; (viii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (ix) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (x) 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.
We take 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 or the information contained herein by any third-parties, including, but not limited to, any wire or internet services, except as may be required by law.
| CORECIVIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||
| December 31, | ||||||||
| ASSETS | 2023 | 2022 | ||||||
| Cash and cash equivalents | $ | 121,845 | $ | 149,401 | ||||
| Restricted cash | 7,111 | 12,764 | ||||||
| Accounts receivable, net of credit loss reserve of | 312,174 | 312,435 | ||||||
| Prepaid expenses and other current assets | 26,304 | 32,134 | ||||||
| Assets held for sale | 7,480 | 6,936 | ||||||
| Total current assets | 474,914 | 513,670 | ||||||
| Real estate and related assets: | ||||||||
| Property and equipment, net of accumulated depreciation of | 2,114,522 | 2,176,098 | ||||||
| Other real estate assets | 201,561 | 208,181 | ||||||
| Goodwill | 4,844 | 4,844 | ||||||
| Other assets | 309,558 | 341,976 | ||||||
| Total assets | $ | 3,105,399 | $ | 3,244,769 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Accounts payable and accrued expenses | $ | 285,857 | $ | 285,226 | ||||
| Current portion of long-term debt | 11,597 | 165,525 | ||||||
| Total current liabilities | 297,454 | 450,751 | ||||||
| Long-term debt, net | 1,083,476 | 1,084,858 | ||||||
| Deferred revenue | 18,315 | 22,590 | ||||||
| Non-current deferred tax liabilities | 96,915 | 99,618 | ||||||
| Other liabilities | 131,673 | 154,544 | ||||||
| Total liabilities | 1,627,833 | 1,812,361 | ||||||
| Commitments and contingencies | ||||||||
| Preferred stock – | — | — | ||||||
| Common stock – | 1,127 | 1,150 | ||||||
| Additional paid-in capital | 1,785,286 | 1,807,689 | ||||||
| Accumulated deficit | (308,847 | ) | (376,431 | ) | ||||
| Total stockholders' equity | 1,477,566 | 1,432,408 | ||||||
| Total liabilities and stockholders' equity | $ | 3,105,399 | $ | 3,244,769 | ||||
| CORECIVIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| REVENUE: | |||||||||||||||
| Safety | $ | 448,704 | $ | 430,247 | $ | 1,731,421 | $ | 1,684,035 | |||||||
| Community | 30,499 | 26,994 | 115,068 | 103,263 | |||||||||||
| Properties | 11,987 | 14,169 | 49,875 | 57,873 | |||||||||||
| Other | 56 | 23 | 271 | 158 | |||||||||||
| 491,246 | 471,433 | 1,896,635 | 1,845,329 | ||||||||||||
| EXPENSES: | |||||||||||||||
| Operating: | |||||||||||||||
| Safety | 341,426 | 326,095 | 1,356,496 | 1,313,567 | |||||||||||
| Community | 23,007 | 22,485 | 91,895 | 86,016 | |||||||||||
| Properties | 4,077 | 3,121 | 13,829 | 13,682 | |||||||||||
| Other | 52 | 268 | 210 | 527 | |||||||||||
| Total operating expenses | 368,562 | 351,969 | 1,462,430 | 1,413,792 | |||||||||||
| General and administrative | 36,866 | 34,892 | 136,084 | 127,700 | |||||||||||
| Depreciation and amortization | 32,133 | 31,688 | 127,316 | 127,906 | |||||||||||
| Shareholder litigation expense | - | - | - | 1,900 | |||||||||||
| Asset impairments | - | 879 | 2,710 | 4,392 | |||||||||||
| 437,561 | 419,428 | 1,728,540 | 1,675,690 | ||||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest expense, net | (17,655 | ) | (19,593 | ) | (72,960 | ) | (84,974 | ) | |||||||
| Expenses associated with debt repayments and refinancing transactions | (360 | ) | (489 | ) | (686 | ) | (8,077 | ) | |||||||
| Gain on sale of real estate assets, net | 455 | 579 | 798 | 87,728 | |||||||||||
| Other income | 619 | 52 | 576 | 986 | |||||||||||
| INCOME BEFORE INCOME TAXES | 36,744 | 32,554 | 95,823 | 165,302 | |||||||||||
| Income tax expense | (10,276 | ) | (8,117 | ) | (28,233 | ) | (42,982 | ) | |||||||
| NET INCOME | $ | 26,468 | $ | 24,437 | $ | 67,590 | $ | 122,320 | |||||||
| BASIC EARNINGS PER SHARE | $ | 0.23 | $ | 0.21 | $ | 0.59 | $ | 1.03 | |||||||
| DILUTED EARNINGS PER SHARE | $ | 0.23 | $ | 0.21 | $ | 0.59 | $ | 1.03 | |||||||
CORECIVIC, INC. 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 Ended | For the Twelve Months ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 26,468 | $ | 24,437 | $ | 67,590 | $ | 122,320 | |||||||
| Special items: | |||||||||||||||
| Expenses associated with debt repayments and refinancing transactions | 360 | 489 | 686 | 8,077 | |||||||||||
| Income tax expense associated with change in corporate tax structure | - | - | 930 | - | |||||||||||
| Gain on sale of real estate assets, net | (455 | ) | (579 | ) | (798 | ) | (87,728 | ) | |||||||
| Shareholder litigation expense | - | - | - | 1,900 | |||||||||||
| Asset impairments | - | 879 | 2,710 | 4,392 | |||||||||||
| Income tax expense (benefit) for special items | 26 | (205 | ) | (758 | ) | 19,338 | |||||||||
| Adjusted net income | $ | 26,399 | $ | 25,021 | $ | 70,360 | $ | 68,299 | |||||||
| Weighted average common shares outstanding - basic | 113,440 | 114,982 | 113,798 | 118,199 | |||||||||||
| Effect of dilutive securities: | |||||||||||||||
| Restricted stock-based awards | 1,346 | 1,274 | 852 | 899 | |||||||||||
| Weighted average shares and assumed conversions - diluted | 114,786 | 116,256 | 114,650 | 119,098 | |||||||||||
| Adjusted Diluted EPS | $ | 0.23 | $ | 0.22 | $ | 0.61 | $ | 0.57 | |||||||
CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 26,468 | $ | 24,437 | $ | 67,590 | $ | 122,320 | |||||||
| Depreciation and amortization of real estate assets | 24,870 | 24,092 | 98,076 | 96,917 | |||||||||||
| Impairment of real estate assets | - | 879 | - | 4,392 | |||||||||||
| Gain on sale of real estate assets, net | (455 | ) | (579 | ) | (798 | ) | (87,728 | ) | |||||||
| Income tax expense (benefit) for special items | 126 | (78 | ) | 226 | 21,995 | ||||||||||
| Funds From Operations | $ | 51,009 | $ | 48,751 | $ | 165,094 | $ | 157,896 | |||||||
| Expenses associated with debt repayments and refinancing transactions | 360 | 489 | 686 | 8,077 | |||||||||||
| Income tax expense associated with change in corporate tax structure | - | - | 930 | - | |||||||||||
| Shareholder litigation expense | - | - | - | 1,900 | |||||||||||
| Other asset impairments | - | - | 2,710 | - | |||||||||||
| Income tax benefit for special items | (100 | ) | (127 | ) | (984 | ) | (2,657 | ) | |||||||
| Normalized Funds From Operations | $ | 51,269 | $ | 49,113 | $ | 168,436 | $ | 165,216 | |||||||
| Funds from Operations Per Diluted Share | $ | 0.44 | $ | 0.42 | $ | 1.44 | $ | 1.33 | |||||||
| Normalized Funds From Operations Per Diluted Share | $ | 0.45 | $ | 0.42 | $ | 1.47 | $ | 1.39 | |||||||
CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CALCULATION OF EBITDA AND ADJUSTED EBITDA
| For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 26,468 | $ | 24,437 | $ | 67,590 | $ | 122,320 | |||||||
| Interest expense | 21,228 | 22,712 | 85,265 | 95,851 | |||||||||||
| Depreciation and amortization | 32,133 | 31,688 | 127,316 | 127,906 | |||||||||||
| Income tax expense | 10,276 | 8,117 | 28,233 | 42,982 | |||||||||||
| EBITDA | $ | 90,105 | $ | 86,954 | $ | 308,404 | $ | 389,059 | |||||||
| Expenses associated with debt repayments and refinancing transactions | 360 | 489 | 686 | 8,077 | |||||||||||
| Gain on sale of real estate assets, net | (455 | ) | (579 | ) | (798 | ) | (87,728 | ) | |||||||
| Shareholder litigation expense | - | - | - | 1,900 | |||||||||||
| Asset impairments | - | 879 | 2,710 | 4,392 | |||||||||||
| Adjusted EBITDA | $ | 90,010 | $ | 87,743 | $ | 311,002 | $ | 315,700 | |||||||
CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
GUIDANCE -- CALCULATION OF FUNDS FROM OPERATIONS & EBITDA
| For the Year Ending | |||||
| December 31, 2024 | |||||
| Low End of Guidance | High End of Guidance | ||||
| Net Income | $ | 65,000 | $ | 80,000 | |
| Depreciation and amortization of real estate assets | 98,250 | 99,250 | |||
| Funds From Operations | $ | 163,250 | $ | 179,250 | |
| Diluted EPS | $ | 0.58 | $ | 0.72 | |
| FFO per diluted share | $ | 1.46 | $ | 1.61 | |
| Net income | $ | 65,000 | $ | 80,000 | |
| Interest expense | 79,000 | 78,000 | |||
| Depreciation and amortization | 126,500 | 126,500 | |||
| Income tax expense | 29,750 | 28,750 | |||
| EBITDA | $ | 300,250 | $ | 313,250 | |
NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures. The Company 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 properties and their management teams. The Company believes that it is useful to provide investors, security analysts, and other interested parties disclosures of its results of operations on the same basis that is used by management.
FFO, in particular, is a widely accepted non-GAAP supplemental measure of performance of real estate companies, grounded in the standards for FFO established by the National Association of Real Estate Investment Trusts (NAREIT). NAREIT defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis. As a company with extensive real estate holdings, we believe FFO and FFO per share are important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs and other real estate operating companies, many of which present FFO and FFO per share when reporting results. EBITDA, Adjusted EBITDA, and FFO are useful as supplemental measures of performance of the Company's properties because such measures do not 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 properties, management believes that assessing performance of the Company's properties without the impact of depreciation or amortization is useful. The Company 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 or ordinary component of the ongoing operations of the Company. Normalized FFO excludes the effects of such items. The Company calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt repayments and refinancing transactions, and certain impairments and other charges that the Company believes are unusual or non-recurring to provide an alternative measure of comparing operating performance for the periods presented.
Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited. Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and, where appropriate, 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.
| Contact: | Investors: Mike Grant - Managing Director, Investor Relations - (615) 263-6957 |
| Financial Media: David Gutierrez, Dresner Corporate Services - (312) 780-7204 |
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