UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXCHANGE ACT OF 1934
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
Commission File Number 001-16109
EXCHANGE ACT OF 1934
CORECIVIC, INC.
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of
incorporation or organization)
5501 VIRGINIA WAY
BRENTWOOD, TENNESSEE
(Address of principal executive offices)
62-1763875
(I.R.S. Employer
Identification No.)
37027
(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (615) 263-3000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class
Common Stock, par value $.01 per share
Trading Symbol(s)
CXW
Name of each exchange
on which registered
New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company",
and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company
Accelerated filer
Smaller reporting company
☒
☐
☐
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b) ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of the shares of the registrant's Common Stock held by non-affiliates was approximately $1,048,718,811 as of
June 30, 2023 based on the closing price of such shares on the New York Stock Exchange on that day. The number of shares of the
registrant's Common Stock outstanding on February 12, 2024 was 112,608,075.
Yes ☐ No ☒
☐
☒
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's definitive Proxy Statement for the 2024 Annual Meeting of Stockholders, currently scheduled to be held on
May 16, 2024, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Item
No.
1.
1A.
1B.
1C.
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4.
5.
6.
7.
7A.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
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15.
16.
CORECIVIC, INC.
FORM 10-K
For the fiscal year ended December 31, 2023
TABLE OF CONTENTS
PART I
Business ....................................................................................................................................................
Overview .............................................................................................................................................
Operating Procedures and Offender Services for Correctional, Detention, and Residential Reentry
Facilities .......................................................................................................................................
Business Development ........................................................................................................................
2023 Accomplishments .......................................................................................................................
Facility Portfolio ..................................................................................................................................
Competitive Strengths .........................................................................................................................
Human Capital .....................................................................................................................................
Government Regulation .......................................................................................................................
Insurance .............................................................................................................................................
Competition .........................................................................................................................................
Risk Factors ..............................................................................................................................................
Unresolved Staff Comments .....................................................................................................................
Cybersecurity............................................................................................................................................
Properties ..................................................................................................................................................
Legal Proceedings ....................................................................................................................................
Mine Safety Disclosures ...........................................................................................................................
PART II
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities ...........................................................................................................................................
Market Price of and Distributions on Capital Stock ............................................................................
Dividend Policy ...................................................................................................................................
Issuer Purchases of Equity Securities ..................................................................................................
Reserved ...................................................................................................................................................
Management's Discussion and Analysis of Financial Condition and Results of Operations ....................
Overview .............................................................................................................................................
Critical Accounting Policies and Estimates .........................................................................................
Results of Operations...........................................................................................................................
Liquidity and Capital Resources ..........................................................................................................
Inflation ...............................................................................................................................................
Seasonality and Quarterly Results .......................................................................................................
Quantitative and Qualitative Disclosures about Market Risk ...................................................................
Financial Statements and Supplementary Data ........................................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...................
Controls and Procedures ...........................................................................................................................
Other Information .....................................................................................................................................
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections ....................................................
PART III
Directors, Executive Officers and Corporate Governance .......................................................................
Executive Compensation ..........................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
Certain Relationships and Related Party Transactions and Director Independence .................................
Principal Accounting Fees and Services ..................................................................................................
PART IV
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Exhibits and Financial Statement Schedules ............................................................................................
Form 10-K Summary ................................................................................................................................
SIGNATURES
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2
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K, or Annual Report, 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, as amended. All statements other than statements of current or historical fact contained
in this Annual Report, including statements regarding our future financial position, business strategy, budgets,
projected costs and plans, and objectives of management for future operations, are forward-looking statements. The
words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "projects," "will,"
and similar expressions, as they relate to us, are intended to identify forward-looking statements. These forward-
looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the
statements made in this Annual Report. These include, but are not limited to, the risks and uncertainties associated
with:
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•
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, or 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, or the Private Prison EO, impacting
utilization primarily by the United States Federal Bureau of Prisons, or BOP, and the United States
Marshals Service, or USMS, 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);
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;
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;
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;
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;
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;
government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns
and changing budget priorities;
our ability to successfully identify and consummate future development and acquisition opportunities and
realize projected returns resulting therefrom;
3
•
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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
the availability of debt and equity financing on terms that are favorable to us, or at all.
Any or all of our forward-looking statements in this Annual Report may turn out to be inaccurate. We have based
these forward-looking statements largely on our current expectations and projections about future events and financial
trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs.
Our statements can be affected by inaccurate assumptions we might make or by known or unknown risks, uncertainties
and assumptions, including the risks, uncertainties, and assumptions described in "Risk Factors" included elsewhere
in this Annual Report and in other reports, documents, and other information we file with the Securities and Exchange
Commission, or the SEC, from time to time.
In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this
Annual Report may not occur and actual results could differ materially from those anticipated or implied in the
forward-looking statements. When you consider these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this Annual Report, including in "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business" and "Risk Factors."
Our forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future events or circumstances or
otherwise, except as required by law. All subsequent written and oral forward-looking statements attributable to us
or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this
Annual Report.
4
RISK FACTORS SUMMARY
Our business faces significant risks and uncertainties. If any of the following risks are realized, our business, financial
condition and results of operations could be materially and adversely affected. You should carefully review and
consider the full discussion of our risk factors in "Part I, Item 1A. Risk Factors" of this Annual Report. Set forth below
is a summary list of the principal risk factors as of the date of the filing of this Annual Report.
• Resistance to privatization of correctional, detention, and residential reentry facilities, and negative publicity
regarding inmate disturbances or perceived poor operational performance, could result in our inability to
obtain new contracts, the loss of existing contracts, or other unforeseen consequences.
• We are subject to fluctuations in occupancy levels, and a decrease in occupancy levels could cause a decrease
in revenues and profitability.
• We are dependent on government appropriations, and our results of operations may be negatively affected
by governmental budgetary challenges or government shutdowns.
• Efforts to reduce the U.S. federal deficit could adversely affect our liquidity, results of operations and
financial condition.
• Competition may adversely affect the profitability of our business.
• We are subject to terminations, non-renewals, or competitive re-bids of our government contracts.
• Our ability to secure new contracts to develop and manage correctional, detention, and residential reentry
facilities depends on many factors outside our control.
• We may face community opposition to facility location, which may adversely affect our ability to obtain new
contracts.
• We may incur significant start-up and operating costs on new contracts before receiving related revenues,
which may impact our cash flows and not be recouped.
• Government agencies may investigate and audit our contracts and operational performance, and if any
deficiencies or improprieties are found, we may be required to cure those deficiencies or improprieties, refund
revenues we have received, or forego anticipated revenues, and we may be subject to penalties and sanctions,
including contract termination and prohibitions on our bidding in response to Requests for Proposals.
• Failure to comply with facility contracts or with unique and increased governmental regulation could result
in material penalties or non-renewal or termination of noncompliant contracts or our other contracts to
provide or manage correctional, detention, and residential reentry facilities.
• The failure to comply with data privacy, security and exchange legal requirements could have a material
adverse impact on our business, financial position, results of operations, cash flows and reputation.
• We depend on a limited number of governmental customers for a significant portion of our revenues.
• We are dependent upon our senior management and our ability to attract and retain sufficient qualified
personnel.
• We are subject to various types of litigation.
• We are subject to necessary insurance costs.
• We may be adversely affected by inflation.
• We depend in part on the performance and capabilities of third parties with whom we have commercial
relationships.
• Technological changes or negative changes in the level of acceptance of, or resistance to, the use of electronic
monitoring products could cause our electronic monitoring products and other technology to become obsolete
or require the redesign of our electronic monitoring products, which could have an adverse effect on our
business.
• We depend on a limited number of third parties to manufacture and supply our electronic monitoring
products. If our suppliers cannot provide the products or services we require in a timely manner and with
such quality as we expect, our ability to market and sell our electronic monitoring products and services could
be harmed.
• We may be subject to costly product liability claims from the use of our electronic monitoring products,
which could damage our reputation, impair the marketability of our products and services and force us to pay
costs and damages that may not be covered by adequate insurance.
5
• We are subject to risks associated with ownership of real estate.
• We may be adversely affected by an increase in costs or difficulty of obtaining adequate levels of surety
•
credit on favorable terms.
Interruption, delay or failure of the provision of our technology services or information systems, or the
compromise of the security thereof, could adversely affect our business, financial condition or results of
operations.
• We are subject to risks related to corporate social responsibility.
• As an owner and operator of correctional, detention, and residential reentry facilities, we are subject to risks
relating to acts of God, outbreaks of epidemic or pandemic disease, global climate change, terrorist activity
and war.
• Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations
under our debt securities.
• The New Bank Credit Facility, indentures related to our senior notes, and other debt instruments have
restrictive covenants that could limit our financial flexibility.
• Our indebtedness is secured by a substantial portion of our assets.
• Servicing our indebtedness will require a significant amount of cash or may require us to refinance our
indebtedness before it matures. Our ability to generate cash depends on many factors beyond our control and
there is no assurance that we will be able to refinance our debt on acceptable terms, or at all.
• We are required to repurchase all or a portion of our senior notes upon a change of control, and the debt under
our New Bank Credit Facility is subject to acceleration upon a change of control.
• Despite current indebtedness levels, we may still incur more debt.
• Our access to capital may be affected by general macroeconomic conditions.
•
Increasing activist resistance to the use of public-private partnerships for correctional, detention, and
residential reentry facilities could impact our ability to obtain financing to grow our business or to refinance
existing indebtedness, which could have a material adverse effect on our business, financial condition and
results of operations.
• Rising interest rates increase the cost of our variable rate debt.
•
If we failed to remain qualified as a REIT for those years we elected REIT status, we would be subject to
corporate income taxes and would not be able to deduct distributions to stockholders when computing our
taxable income for those years.
• Even if we remained qualified as a REIT for those years we elected REIT status, we may owe taxes under
certain circumstances.
• The market price of our equity securities may vary substantially, which may limit our stockholders' ability to
liquidate their investment.
• The number of shares of our common stock available for future sale could adversely affect the market price
of our common stock.
• Future offerings of debt or equity securities ranking senior to our common stock or incurrence of debt
(including under our New Bank Credit Facility) may adversely affect the market price of our common stock.
• Our issuance of preferred stock could adversely affect holders of our common stock and discourage a
takeover.
• Our charter and bylaws and Maryland law could make it difficult for a third party to acquire our company.
6
ITEM 1. BUSINESS.
Overview
PART I.
We are a diversified government solutions company with the scale and experience needed to solve tough government
challenges in flexible, cost-effective ways. Through three segments, CoreCivic Safety, CoreCivic Community, and
CoreCivic Properties, we provide a broad range of solutions to government partners that serve the public good through
corrections and detention management, a network of residential reentry centers to help address America's recidivism
crisis, and government real estate solutions. 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.
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. As of December 31, 2023, through our CoreCivic Safety segment,
we operated 43 correctional and detention facilities, 39 of which we owned, with a total design capacity of
approximately 65,000 beds. Through our CoreCivic Community segment, we owned and operated 23 residential
reentry centers with a total design capacity of approximately 5,000 beds. In addition, through our CoreCivic Properties
segment, we owned 6 properties, with a total design capacity of approximately 10,000 beds.
In addition to providing fundamental residential services, our correctional, detention, and residential reentry facilities
offer a variety of rehabilitation and educational programs, including basic education, faith-based services, life skills
and employment training, and substance abuse treatment. These services are intended to help reduce recidivism and
to prepare offenders for their successful reentry into society upon their release. We also provide or make available to
offenders certain health care (including medical, dental, and mental health services), food services, and work and
recreational programs.
We are a Maryland corporation formed in 1983. Our principal executive offices are located at 5501 Virginia Way,
Brentwood, Tennessee, 37027, and our telephone number at that location is (615) 263-3000. Our website address is
www.corecivic.com. We make available on or through our website certain reports and amendments to those reports
that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended, or the
Exchange Act. These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current
Reports on Form 8-K and our definitive proxy statement. We make this information available on our website free of
charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. In
addition, we routinely post on the “Investors Relations” page of our website news releases, announcements and other
statements about our business and results of operations, some of which may contain information that may be deemed
material to investors. Therefore, we encourage investors to monitor the “Investors Relations” page of our website and
review the information we post on that page. Information contained on our website is not part of this Annual Report.
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC at the following address: www.sec.gov.
7
Our ongoing operations are organized into three principal business segments:
• CoreCivic Safety segment, consisting of 43 correctional and detention facilities that are owned, or controlled
via a long-term lease, and managed by CoreCivic, as well as those correctional and detention facilities owned
by third parties but managed by CoreCivic. CoreCivic Safety also includes the operating results of our
subsidiary that provides transportation services to governmental agencies, TransCor America, LLC, or
TransCor.
• CoreCivic Community segment, consisting of 23 residential reentry centers that are owned, or controlled
via a long-term lease, and managed by CoreCivic. CoreCivic Community also includes the operating results
of our electronic monitoring and case management services.
• CoreCivic Properties segment, consisting of 6 correctional real estate properties owned by CoreCivic and
held for lease to third-party operators.
For the years ended December 31, 2023, 2022, and 2021, our total segment net operating income, which we define as
a facility's revenues (including interest income associated with finance leases) less operating expenses, was divided
among our three business segments as follows:
Segment:
Safety
Community
Properties
For the Years Ended December 31,
2022
2021
2023
84.7 %
5.2 %
10.1 %
84.1 %
3.9 %
12.0 %
85.5 %
3.3 %
11.2 %
Our customers primarily consist of federal, state, and local government agencies. Federal correctional and detention
authorities primarily consist of U.S. Immigration and Customs Enforcement, or ICE, the USMS, and the BOP.
Payments by federal correctional, detention and residential reentry authorities represented 52%, 54%, and 56% of our
total revenue for the years ended December 31, 2023, 2022, and 2021, respectively.
Our customer contracts for providing bed capacity and correctional, detention, and residential reentry services in our
CoreCivic Safety and CoreCivic Community segments typically have terms of three to five years and contain multiple
renewal options. Most of our facility contracts also contain clauses that allow the government agency to terminate the
contract at any time without cause, and our facility contracts are generally subject to annual or bi-annual legislative
appropriations of funds. Notwithstanding these termination clauses, the contract renewal rate for properties we owned
or controlled via long-term lease in these segments was approximately 95% over the five years ended December 31,
2023. The lease agreements in our CoreCivic Properties segment typically have terms of five to twenty years including
renewal options, and generally have more restrictive termination clauses.
In our CoreCivic Safety and CoreCivic Community segments, we are compensated for providing bed capacity and
correctional, detention, and residential reentry services at a per diem rate based upon actual or minimum guaranteed
occupancy levels. Occupancy rates for a particular facility are typically low when first opened or immediately
following an expansion. However, beyond the start-up period, which typically ranges from 90 to 180 days, the
occupancy rate tends to stabilize. Our occupancy rates declined during 2021 and 2022 due to the effects of COVID-
19, but began to increase in 2023 following the expiration of Title 42, among other factors, and as further described
hereinafter. The average compensated occupancy of our correctional, detention, and residential reentry facilities,
based on rated capacity was as follows for 2023, 2022, and 2021:
CoreCivic Safety facilities
CoreCivic Community facilities
Total
2023
2022
2021
72 %
62 %
72 %
71 %
58 %
70 %
73 %
55 %
72 %
The average compensated occupancy of our CoreCivic Safety and CoreCivic Community facilities, excluding idled
facilities, was 82%, 81%, and 80% for 2023, 2022, and 2021, respectively.
8
Operating Procedures and Offender Services for Correctional, Detention, and Residential Reentry Facilities
Pursuant to the terms of our customer contracts, we are responsible for the overall operations of our facilities, including
staff recruitment, general administration of the facilities, facility maintenance, security, and supervision of the
residents in our care. We are required by our customer contracts to maintain certain levels of insurance coverage for
general liability, workers' compensation, vehicle liability, and property loss or damage. We also are required to
indemnify our customers for claims and costs arising out of our operations and, in certain cases, to maintain
performance bonds and other collateral requirements.
Reentry programs.
We believe a focus on inmate reentry provides great benefits for our communities – more people living healthy and
productive lives and contributing to strong families and local economies. We have committed to evolving our model
with an increased focus on reentry services, and we are working to equip the men and women in our care with the
services, support, and resources they need to be successful upon reentry.
We provide a wide range of evidence-based reentry programs and activities in our facilities. At most of the facilities
we manage, offenders have the opportunity to enhance their basic education from literacy through earning a high
school equivalency certificate endorsed by their respective state. In some cases, we also provide opportunities for
postsecondary educational achievements and chances to participate in college degree programs.
For the offenders who are close to taking their GED/HiSET exam, we have invested in the equipment needed to use
the GED/HiSET Academy software program, which is an offline software program providing over 200 hours of
individualized lessons up to a 12th grade level. The GED/HiSET Academy incorporates teaching best practices and
provides an atmosphere to engage and motivate students to learn everything they need to know to pass the GED/HiSET
exam. According to a 2022 study by Steven Sprick Schuster and Ben Stickle, "Are Schools in Prison Worth It? The
Effects of and Economic Returns to Prison Education", prison education decreases the likelihood of recidivism by
14.8% and increases the likelihood of employment by 6.9%.
In addition, we offer a broad spectrum of career/technical education opportunities to help individuals learn marketable
job skills. Our construction trade programs are certified by the National Center for Construction Education and
Research, or NCCER. This progressive program has evolved into curricula for more than 70 craft and maintenance
areas and a complete series of more than 70 assessments offered in over 6,000 NCCER-accredited training and
assessment locations across the United States. Graduates of these programs enter the job market with certified skills
that significantly enhance employability. We also offer other effective vocational programs, such as the Persevere
and Pivot Tech coding programs discussed more thoroughly below.
We are proud of the educational programs we offer and intend to maintain and continue to develop such programs.
Examples of programs and new programming technology we deployed or expanded over the previous two years:
•
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In 2023, we deployed a Resident Network, or ResNet, at approximately 20 of our correctional facilities,
which involved the installation of a secure controlled network, and the addition of an average of 20 new
Microsoft® Surface laptops at each of these sites. With strict security measures in place designed to ensure
compliance and public safety, an important component of ResNet is connecting residents to online job skills
training, testing and certification. ResNet is now the means by which many of our programs are offered,
including our educational and vocational programs, some of which are listed below, and other programs we
believe are vital to reentry such as anger management, substance abuse education, and financial literacy.
In 2023, we partnered with Re-entry Coaching Academy, or ReCA, a non-profit organization, to offer Life
Coaching training and certification for incarcerated individuals at our Saguaro Correctional Facility in
Arizona. The program is peer-based, being led by certified life coaches, facilitators, and community leaders
with lived experience. Graduates of the program will serve as future Peer Life Coaches at the Saguaro
facility.
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In 2023, we partnered with Our Journey, a non-profit organization led by an individual who has lived
experience. Our Journey produces reentry booklets customized for each state. The booklets are written
from the lived-experience perspective and use information gathered from focus groups and community
networks to develop customized local information. We have partnered with Our Journey to produce these
booklets for each state in which we have facilities. In 2023, a booklet for the state of Georgia was completed
and a booklet for the state of Tennessee is in process.
In 2023, we implemented several additional programs to help prepare returning citizens for life after release,
including "2nd Opportunity", a life skills and employment readiness program that we are piloting at our
Tallahatchie County Correctional Facility in Mississippi, and Rebound Employment Training, which
teaches the skills necessary to become a successful online freelancer or remote worker upon release. We
are piloting the Rebound Employment Training program at five facilities. In 2023, we also partnered with
Geographic Solutions whose "Virtual One Stop Reentry Employment Opportunities" software system was
customized for us and allows incarcerated persons the opportunity to search and apply for current job
openings in the communities to which they will be released. The Geographic Solutions program also
provides employment readiness and resume building skills and is being piloted at our Jenkins Correctional
Center in Georgia with plans of expanding the program to additional facilities.
In 2023, we began piloting Steered Straight's "One Step Away" recovery program at our Hardeman County
Correctional Facility in Tennessee and at our Cibola County Corrections Facility in New Mexico. Steered
Straight is a non-profit organization formed in 2007 and is designed to carry an important message to youth
on the extreme dangers of drugs, gang involvement and associated criminal activity. The "One Step Away"
program is the organization's prison inmate rehabilitation program that works to reduce drug usage and
overdoses, particularly fentanyl, as well as to strengthen incarcerated persons' recovery and aftercare.
In 2023, we partnered with Reboot Recovery to offer a peer-led, 12-week research-based PTSD/Trauma and
Resiliency program for incarcerated veterans. We piloted the program at four facilities and are now
expanding the program to all of our CoreCivic Safety facilities.
In 2022, we introduced MaxxContent as a pilot program at each of our Crossroads Correctional Center in
Montana, our Lee Adjustment Center in Kentucky, our Red Rock Correctional Center in Arizona, our
Trousdale Turner Correctional Center in Tennessee, and our La Palma Correctional Center in Arizona.
MaxxContent is a custom online Learning Management System that includes content such as life skills,
mental health, financial literacy, GED preparation, communications, workforce skills, and reentry
preparation, and is available to students in the education computer labs at each of the pilot program facilities.
In 2022, we partnered with Felon Education Project and introduced Felon Education as a pilot program at
our Wheeler Correctional Facility in Georgia. Felon Education is a course that teaches inmate students how
to start their own businesses. The course teaches the students how to write a business plan, obtain funding,
set goals, and work through small business finances, regulations and much more.
• Since 2019, we have partnered with Persevere, a national non-profit organization, to offer offenders at our
Trousdale Turner facility an opportunity to learn software coding and job readiness/employability skills
specific to the technology field. The partnership with Persevere was expanded to include our Red Rock
Correctional Center in 2020 and our Saguaro Correctional Facility in 2021. Both the Red Rock and Saguaro
facilities are in Arizona. The instructor-led, self-paced program utilizes both a coding instructor and a
Technology Employability Specialist to ensure students are learning the craft and how to obtain and maintain
a job in the field, post-incarceration. The program is split into two phases that allows students to become
certified Front-end Developers (phase 1) and Full Stack Developers (phase 2) upon completion. In 2022, to
further expand our programming in this area, we partnered with Pivot Technology School to pilot Pivot
Tech, a technology career program, at our Jenkins facility. Pivot Tech is a five-month "boot camp" style
course taught in a classroom setting with instructors participating virtually. Students learn computer coding
and data analytics and receive certificates that prepare them for career success upon reentry. We plan to
expand the Pivot Tech program to other facilities.
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For those with assessed substance abuse disorders, we offer cognitive behavioral evidence-based treatment programs
with proven clinical outcomes, such as the Residential Drug Abuse Program. We offer both therapeutic community
models and intensive outpatient programs. We also offer drug and alcohol use education/DWI programs at some of
our facilities. Our goal in providing substance abuse treatment is to stimulate internal motivation for change and
progress through the stages of change so that lasting behavioral change can occur. Our drug and alcohol education
programs help participants understand their relationships with drugs and alcohol and the links between drug and
alcohol use and crime, as well as equipping participants with information designed to help them make better choices
that can lead to healthier relationships in their lives. According to a study by the Florida State University College of
Criminology and Criminal Justice, "An Assessment of Substance Abuse Treatment Programs in Florida's Prisons
Using a Random Assignment Experimental Design" submitted to the National Institute of Justice, Office of Justice
Programs, U.S. Department of Justice, in 2016, inmates who completed addiction treatment in prison have
significantly lower recidivism levels regardless of the treatment model used.
Additional program offerings include our Victim Impact Programs, available at a number of our Safety and
Community facilities, which seek to educate offenders about the negative effects their criminal conduct can have on
others. All of our facility chaplains facilitate diverse and inclusive opportunities for those in our care to engage in the
practice of spirituality and to exercise individual religious freedom. In several facilities, we offer faith-based programs
with an emphasis on character development, spiritual growth, and successful reentry. Presently, we utilize Threshold,
an innovative, evidence-based inter-faith component of comprehensive reentry services.
Our Reentry and Life Skills programs prepare individuals for life after incarceration by teaching them how to
successfully conduct a job search, how to manage their budget and financial matters, parenting skills, and relationship
and family skills. Equally significant, we offer cognitive behavioral programs aimed at changing anti-social attitudes
and behaviors in offenders, with a focus on altering the level of criminal thinking. In 2017, we introduced a
comprehensive reentry strategy we call "Go Further," a forward thinking, process approach to reentry. "Go Further"
encompasses all facility reentry programs, adds a proprietary cognitive/behavioral curriculum, and encourages staff
and offenders to take a collaborative approach to assist in reentry preparation.
In 2021, we opened a "Go Further Release" program in the Denver, Colorado area. Go Further Release is a program
we developed that provides stabilization services and reentry coaching to individuals being released from our facilities.
The program provides "Reach-in" services during the returning citizen's last 90 days of incarceration which are
designed to prepare individuals for release and make a connection with a reentry coach that will provide support to
them after release. "Stabilization and Reentry Coaching" services are provided during an individual's first 90 days of
release and an ongoing community support group is available as long as needed. All services are free of charge. In
2022, we received approval from the Georgia Department of Corrections, or GDOC, to implement a Go Further
Release program to support our Coffee, Jenkins, and Wheeler facilities. We are providing this program through a
partnership with Life Empowerment Enterprises, a local non-profit organization.
Across the country, our dedicated staff, along with the assistance of thousands of volunteers, work to provide guidance,
direction, and post-incarceration services to the men and women in our care. We believe these critical reentry
programs help fight the serious challenge of recidivism facing the United States.
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Through our community corrections facilities, we provide an array of services to defendants and offenders who are
serving their full sentence, the last portion of their sentence, waiting to be sentenced, or awaiting trial while supervised
in a community environment. We offer housing and programs with a key focus on employment, job readiness, life
skills and various substance abuse treatment programs, in order to help offenders successfully reenter their
communities and reduce the risk of recidivism. For example, some of our community corrections facilities have
community networking programs, like those at our Cheyenne Transitional Center in Wyoming, to help residents
connect with community members and match them with jobs. Our staff takes an active role in going into the
community and creating collaborative relationships with employers to assist residents when they first arrive at our
facility and provide support for a smoother transition in job seeking. Beginning in 2022, our programs in the state of
Colorado partnered with a financial institution to conduct classes with our residents on financial wellness, including
the importance of having a savings account, the importance of, and how to establish, credit, and how to establish a
bank account. In addition, in 2023, 24 residents at our CAI Ocean View facility in California received a "Certificate
of Completion in Money Smarts and Transitional Skills". The classes are taught by our Employment Specialist and
Program Facilitator at the Ocean View facility and are offered to all residents on a daily basis. The Ocean View
facility has also partnered with the San Diego City College to offer residents classes in Forklift Operation, Auto
Mechanics, and Carpentry. Also in 2023, we partnered with Coastline and Career Expansion, Inc. at our CAI Boston
Avenue facility in California to provide a training program in workforce development, construction, utilities, energy
and safety. Students learn skills from basic industry awareness to Occupational Safety and Health Administration, or
OSHA, requirements in this five-week, on-site program. They also learn how to properly use hand and power tools,
and how to safely handle construction materials. Upon completion, students receive an industry-recognized
certificate. In some of our community corrections facilities, we offer housing and program services to parolees who
have completed their sentence but lack a viable reentry plan. Through a focus on employment and skill development,
we provide a means for these parolees to successfully reintegrate into their communities.
In addition, we provide day-reporting and substance abuse treatment programs at some of our community corrections
facilities. These programs, depending on the needs of the offender, can provide cognitive behavioral-based programs
to assist in the offender's successful reentry while holding the individual accountable while living in the community.
We also provide a number of non-residential correctional alternative services, including electronic monitoring and
case management services, under our CoreCivic Community segment. Governmental customers use electronic
monitoring products and services to monitor low risk offenders as a way to help reduce overcrowding in correctional
facilities, as a monitoring and sanctioning tool, and to promote public safety by imposing restrictions on movement
and serving as a deterrent for alcohol usage. Providing these non-residential services is a natural complement to our
broad network of residential reentry facilities and can help keep individuals from returning to prison or being
incarcerated in the first place.
Ultimately, the work we do is intended to give people the necessary skills to reintegrate with their communities
permanently. We are proud of the teachers, counselors, case managers, chaplains, and other offender support service
professionals who provide these services to the men and women entrusted in our care.
Further underscoring our long-term commitment to reducing recidivism, since October 2017, we have maintained a
nationwide initiative to advocate for a range of government policies that will help formerly incarcerated people
successfully reenter society and stay out of prison. As part of this continued initiative, we apply government relations
resources and expertise to advocate for the following policies:
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"Ban-the-Box" proposals to help improve former inmates' chances at getting a job;
Reduced legal barriers to make it easier and less risky for companies to hire former incarcerated
individuals;
Increased funding for reentry programs in areas such as education, addiction treatment, faith-based
offerings, victim impact and post-release employment; and
Social impact bond pilot programs that tie contractor payments to positive outcomes.
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In 2020, we announced that we will publicly advocate at the federal and state levels for a slate of new policies that
will help people succeed in their communities after being released from prison. Specifically, we pledged our support
for Pell Grant Restoration, Voting Rights Restoration and Licensure Reform Policies. Also in 2020, we began a
partnership with, and continue to invest in, Prison Fellowship, a leading advocate for criminal justice reform serving
formerly incarcerated individuals and their family members. Through a network of programming and advocacy
efforts, the organization seeks to effect positive change at every level of the criminal justice system. We have
committed to a multi-year partnership in Prison Fellowship's First Chance Network, or FCN. Serving over 230,000
children annually, the FCN addresses persistent gaps in opportunity for children who have incarcerated parents and
seeks to create a trajectory toward healthy life outcomes and prevent youth justice involvement.
Advocacy for Pell Grant Restoration is an extension of our longtime commitment to providing educational
opportunities in our facilities, as research consistently shows that educational attainment can significantly reduce an
incarcerated person's likelihood of recidivating. Currently, CoreCivic has working partnerships with fifteen colleges
and institutions of higher learning nationwide to facilitate provision of post-secondary educational opportunities in
various facilities. We continue to pursue opportunities to expand this network and the facilities in which these services
are offered.
Supporting policies that advance the expansion of reentry programs aligns closely with our ongoing efforts to assess
and expand reentry-focused programming in our facilities. To that end, we actively engage subject matter experts and
practitioners, including formerly incarcerated individuals who bring valuable, lived experiences that better inform
innovations and enhancements to those programmatic offerings.
We believe that as successful as we may be with our work inside our facilities, incarcerated individuals still face
embedded societal barriers and collateral consequences when they return to their communities. Supporting recidivism-
reducing policies is one way we can bridge the gap and give the men and women entrusted in our care a better
opportunity at never returning to prison.
Operating guidelines.
The American Correctional Association, or ACA, is an independent organization comprised of corrections
professionals that establishes accreditation standards for correctional and detention facilities around the world.
Outside agency standards, such as those established by the ACA, provide us with the industry's most widely accepted
operational guidelines. ACA accredited facilities must be audited and re-accredited at least every three years. We
have sought and received ACA accreditation for 33, or approximately 97%, of the eligible facilities we operated as of
December 31, 2023, excluding our residential reentry facilities. During 2023, 12 of the facilities we manage were
newly accredited or re-accredited by the ACA with an average score of 99.6%, making our portfolio average 99.6%.
Beyond the standards provided by the ACA, our facilities are operated in accordance with a variety of company and
facility-specific policies and procedures, as well as various contractual requirements. Many of these policies and
procedures reflect the high standards generated by a number of sources, including the ACA, the National Commission
on Correctional Healthcare, OSHA, as well as federal, state, and local government codes and regulations and
longstanding correctional procedures.
In addition, our facilities are operated in compliance with the Prison Rape Elimination Act, or PREA, standards. All
confinement facilities covered under the PREA standards must be audited at least every three years to maintain
compliance with the PREA standards. We utilize DOJ certified PREA auditors to help ensure that all facilities operate
in compliance with applicable PREA regulations.
Our facilities operate under these established standards, policies, and procedures, and also are subject to annual audits
by our Quality Assurance Division, or QAD, which operates under, and reports directly to, our Office of General
Counsel and acts independently from our Operations Division. Through the QAD, we have devoted significant
resources to ensuring that our facilities meet outside agency and accrediting organization standards and guidelines.
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The QAD employs a team of full-time auditors, who are subject matter experts from all major disciplines within
institutional operations. Annually, QAD auditors generally conduct unannounced on-site evaluations of each
CoreCivic Safety facility we operate using specialized audit tools, typically containing approximately 1,350 audit
indicators across all major operational areas. In most instances, these audit tools are tailored to facility and partner
specific requirements. In addition, audit teams provide guidance to facility staff on operational best practices and
assist staff with addressing specific areas of need, such as meeting requirements of new partner contracts and providing
detailed training on compliance requirements for new departmental managers.
The QAD management team coordinates overall operational auditing and compliance efforts across all correctional,
detention, and residential reentry facilities we manage. In conjunction with subject matter experts and other
stakeholders having risk management responsibilities, the QAD management team develops performance
measurement tools used in facility audits. The QAD management team provides governance of the corrective action
plan process for any items of nonconformance identified through internal and external facility reviews. Our QAD also
contracts with teams of ACA certified correctional auditors to evaluate compliance with ACA standards at accredited
facilities. Similarly, the QAD routinely incorporates a review of facility compliance with key ACA standards and
PREA regulations during annual audits of company facilities.
In addition to our own internal audit and contract compliance efforts, we are also subject to oversight by our
government partners. As part of their standard monitoring and compliance programs, approximately 71% of our
federal and state government partners typically conduct formal contract-compliance audits and inspections at least
annually at CoreCivic Safety facilities. In addition to these annual audits of our facilities, many partners conduct
additional area-specific operational audits and inspections on a more frequent basis, including monthly, quarterly, and
semi-annually. Some of these audits and facility inspections by our partners are conducted on an unannounced basis.
In 2023, our government partners conducted approximately 220 annual, semi-annual, quarterly, and monthly
compliance audits and inspections at our CoreCivic Safety facilities. In addition, the majority of our federal and state
government partners employ on-site contract monitors who monitor performance and contract compliance at our
facilities on a full- or part-time basis. In 2023, 94% of the CoreCivic Safety facilities we manage had an assigned
contract monitor.
Business Development
We believe we own, or control via a long-term lease, approximately 56% of all privately owned prison beds in the
United States, manage nearly 38% of all privately managed prison beds in the United States, and are currently the
second largest private owner and provider of community corrections services in the nation. Under the direction of our
partnership development department, we market our facilities and services to government agencies responsible for
federal, state, and local correctional, detention, and residential reentry facilities in the United States. With 2023
occupancy in our Safety and Community segments of 72%, including idle correctional and residential reentry facilities
during the period they were idle, we have the capacity to grow earnings and cash flows without the need to deploy
significant capital. At December 31, 2023, we also had a 2,400-bed idle facility in our Properties segment that could
generate additional earnings and cash flow if we are able to enter into an agreement to utilize the facility. Under the
direction of our innovation department, we also intend to continue to pursue new development opportunities in our
Properties segment, to meet the need to modernize outdated correctional infrastructure across the country, and explore
potential opportunities to expand the scope of non-residential correctional alternatives we provide in our Community
segment. We will also respond to customer demand and may develop or expand correctional and detention facilities
when we believe potential long-term returns justify the capital deployment.
We execute cross-departmental efforts to market CoreCivic Safety solutions to government partners that seek
corrections and detention management services, CoreCivic Community solutions to government partners seeking
residential reentry services, and CoreCivic Properties solutions to customers that need correctional real estate and
maintenance services. Our flexible business model enables our customers to utilize our real estate assets to suit their
needs, which can result in facilities moving among our Safety, Community, and Properties segments.
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Business from our federal customers, including primarily ICE, the USMS, and the BOP, constituted 52%, 54%, and
56% of our total revenue during 2023, 2022, and 2021, respectively. Business from our federal customers continues
to be a significant component of our business, although the source of revenue is derived from many contracts at various
types of properties (i.e., correctional, detention, and reentry). ICE (30%, 29%, and 30% during 2023, 2022, and 2021,
respectively) and the USMS (21%, 22%, and 23% during 2023, 2022 and 2021, respectively) each accounted for 10%
or more of our total revenue during the last three years.
Certain of our contracts with federal partners contain clauses that guarantee the federal partner access to a minimum
bed capacity in exchange for a fixed monthly payment. However, these contracts also generally provide the
government the ability to cancel the contract for non-appropriation of funds or for convenience. The solutions we
provide to our federal customers continue to be a significant component of our business. We believe our ability to
provide flexible solutions and fulfill emergent needs of our federal customers would be very difficult and costly to
replicate in the public sector.
On January 26, 2021, President Biden issued the Private Prison EO. The Private Prison EO directs the Attorney
General to not renew DOJ contracts with privately operated criminal detention facilities. Two agencies of the DOJ,
the BOP and the USMS, utilize our services. The BOP houses inmates who have been convicted, and the USMS is
generally responsible for detainees who are awaiting trial. The BOP has experienced a steady decline in inmate
populations over the last decade, a trend that was accelerated by the COVID-19 pandemic. Our remaining prison
contract with the BOP at the 1,978-bed McRae Correctional Facility expired on November 30, 2022 and was not
renewed. Following the non-renewal of the BOP contract in 2022 and our sale of the McRae facility to the state of
Georgia in August 2022, we no longer operate any prison contracts for the BOP. The Private Prison EO only applies
to agencies that are part of the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Private
Prison EO, as ICE is an agency of the Department of Homeland Security, or DHS, not the DOJ. For the year ended
December 31, 2023, USMS and ICE accounted for 21% ($400.4 million) and 30% ($565.5 million), respectively, of
our total revenue. For the year ended December 31, 2022, USMS and ICE accounted for 22% ($403.9 million) and
29% ($527.3 million), respectively, of our total revenue. For the year ended December 31, 2021, USMS and ICE
accounted for 23% ($433.6 million) and 30% ($552.2 million), respectively, of our total revenue.
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. As a result, in the
first quarter of 2020, the federal government decided 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 COVID-19, a policy known as Title 42. This policy resulted in a reduction to the number of people ICE
detained, including in our detention facilities. The financial impact was somewhat mitigated by fixed monthly
payments from ICE at certain of our facilities, to ensure ICE has adequate bed capacity in the event of a surge in the
future. Based on COVID-19 trends, the Department of Health and Human Services allowed Title 42 to expire on May
11, 2023, which has resulted in an increase in the number of undocumented people permitted to enter the United States
claiming asylum, and has resulted in an increase in the number of people apprehended and detained by ICE. Due to
fixed payments under many of our federal contracts, the increase in residential populations does not result in a
proportionate increase in our financial results at such facilities until populations clear the fixed payment levels for
certain bed capacity. Residential populations under certain of our federal contracts largely cleared the minimum
compensated bed total associated with fixed payments during the second half of 2023. During 2022, revenue from
ICE was $527.3 million compared to $579.5 million during 2019, prior to the implementation of Title 42. During
2023, revenue from ICE was $565.5 million. Revenue from ICE increased at facilities other than our La Palma facility
by $71.4 million from 2022 due to increased occupancy and the impact of per diem increases at certain
facilities. During 2022, revenue from ICE at our La Palma facility was $33.2 million. This facility was transitioned
from an ICE population to a population from the state of Arizona throughout 2022, with the offender intake process
being substantially completed during the fourth quarter of 2022.
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Federal revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased
0.1% from $994.7 million during 2022 to $995.2 million during 2023. The increase in federal revenues was primarily
a result of increased occupancy and per diem increases at certain facilities. The increase in federal revenues resulting
from these factors was partially offset by the impact of the aforementioned expiration of the contract with the BOP at
the McRae facility, which resulted in a reduction in federal revenues of $37.8 million (2% of our total revenue) and
as a result of the transition at our La Palma facility from an ICE population to the state of Arizona throughout 2022,
as further described in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations", or MD&A.
State revenues from contracts at correctional, detention, and residential reentry facilities that we operate constituted
39%, 36%, and 32% of our total revenue during 2023, 2022, and 2021, respectively, and increased 10.4% from $669.2
million during 2022 to $738.6 million during 2023. The state of Tennessee is our largest state customer, accounting
for 10% of our total revenue during 2023, with no other state customer generating 10% or more of our total revenue.
State revenues increased primarily as a result of the new management contract with the state of Arizona at our La
Palma facility for up to 2,706 inmates, as the state transferred inmate populations from public sector facilities into our
La Palma facility. We began receiving inmates from the state of Arizona in April 2022, and as of December 31, 2023,
we cared for approximately 2,200 inmates from the state of Arizona at this facility, as further described in MD&A.
State revenue at the La Palma facility increased $48.9 million during 2023 compared with 2022. State revenues also
increased as a result of per diem increases under a number of our state contracts, as many of our state partners have
recognized the need to provide additional funding to address increases in the wages of our employees.
We believe the long-term growth opportunities of our business remain attractive as government agencies consider
their emergent needs, as well as the efficiency and offender programming opportunities we provide as flexible
solutions to satisfy our partners' needs. We have also been in discussions with several state and county government
agencies that have experienced challenges in staffing their public-sector facilities and are seeking solutions from the
private sector. Further, several of our existing government partners, as well as prospective government partners, have
been experiencing growth in offender populations and overcrowded conditions, as well as an increase in violent crime.
Governments are continuing to assess their need for correctional space, and several are continuing to consider
alternative correctional capacity for their aged or inefficient infrastructure, or are seeking cost savings by utilizing the
private sector, which could result in increased future demand for the solutions we provide. For example, on September
25, 2023, we announced that we signed a new management contract with Hinds County, Mississippi to care for up to
250 adult male pre-trial detainees at our 2,672-bed Tallahatchie County Correctional Facility in Tutwiler,
Mississippi. The initial contract term is for two years, which may be extended for an additional year upon mutual
agreement. In addition, on November 16, 2023, we announced that we signed a new management contract with the
state of Wyoming to care for up to 240 male inmates at the Tallahatchie facility. The term of the new contract runs
through June 30, 2026. Also on November 16, 2023, we announced that we signed a new contract with Harris County,
Texas, to care for up to 360 male inmates at the Tallahatchie facility. Upon mutual agreement, Harris County may
access an additional 360 beds at the facility. The initial contract term began on December 1, 2023, and is scheduled
to expire on November 30, 2024. However, the contract may be extended at Harris County's option for up to four
additional one-year terms. In addition to the recent contracts with Hinds County, the state of Wyoming, and Harris
County, we currently care for residents from the USMS, Vermont, South Carolina, the U.S. Virgin Islands, and
Tallahatchie County at the Tallahatchie facility, which demonstrates the flexible solutions that we provide. On
November 14, 2023, we announced that we signed a new management contract with the state of Montana to care for
up to 120 inmates at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona. The new contract is scheduled to
expire on October 31, 2025, and may be extended by mutual agreement for a total term of up to seven years. We
currently care for residents from the state of Hawaii and the state of Idaho at the Saguaro facility. 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.
Further, in December 2021, the state of Arizona awarded us a new contract for up to 2,706 inmates at our 3,060-bed
La Palma Correctional Center in Arizona, which commenced in April 2022. We are not aware of a larger prison
contract awarded to the private sector by any state in over a decade. In August 2022, we completed the sale of the
1,978-bed McRae Correctional Facility to the Georgia Building Authority in order to update its aged and inefficient
public sector correctional infrastructure. Competing budget priorities often impede our customers' ability to construct
new prison beds of their own or update their older facilities, which we believe could result in further demand for
private sector prison capacity solutions in the long-term.
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Following our first priority of debt reduction, which may include the purchase of our outstanding debt in open market
transactions, privately negotiated transactions or otherwise, we expect to allocate a substantial portion of our free cash
flow to returning capital to our shareholders, which could include share repurchases and/or future dividends, and
pursuing alternative growth opportunities. We believe the revocation of our REIT election and conversion to a taxable
C Corporation, effective January 1, 2021, provides us with significantly more liquidity and financial flexibility, which
enables us to reduce our reliance on the capital markets and enabled us to reduce the size of our Bank Credit Facility.
We believe that we can further develop our business by, among other things:
• Maintaining and expanding our existing customer relationships and filling existing capacity within our
facilities, while maintaining an adequate inventory of available capacity that we believe provides us with
flexibility and a competitive advantage when bidding for new management contracts;
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Enhancing the terms of our existing contracts and expanding the services we provide under those
contracts;
Pursuing additional opportunities to lease our facilities to government and other third-party operators in
need of correctional, detention, and residential reentry capacity;
Pursuing mission-critical real estate solutions for government agencies focused on corrections and
detention real estate assets;
Pursuing other asset acquisitions and business combinations through transactions with non-government
third parties;
• Maintaining and expanding our focus on community corrections and reentry programming that align with
the needs of our government partners;
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Exploring potential opportunities to expand the scope of non-residential correctional alternative solutions
we provide to government agencies; and
Establishing relationships with new customers that have either previously not outsourced their
correctional facility management needs or have utilized other private enterprises.
We generally receive inquiries from or on behalf of government agencies that are considering outsourcing the
ownership and/or management of certain facilities or that have already decided to contract with a private enterprise.
When we receive such an inquiry, we determine whether there is an existing need for our correctional, detention, and
residential reentry facilities and/or services and whether the legal and political climate in which the inquiring party
operates is conducive to serious consideration of outsourcing. Based on these findings, an initial cost analysis is
conducted to further determine project feasibility.
Frequently, government agencies responsible for correctional, detention, and residential reentry facilities and services
procure space and services through solicitations or competitive procurements. As part of our process of responding
to such requests, members of our management team meet with the appropriate personnel from the agency making the
request to best determine the agency's needs. If the project fits within our strategy, we submit a written response. A
typical solicitation or competitive procurement requires bidders to provide detailed information, including, but not
limited to, the space and services to be provided by the bidder, its experience and qualifications, and the price at which
the bidder is willing to provide the facility and services (which services may include the purchase, renovation,
improvement or expansion of an existing facility or the planning, design and construction of a new facility). The
requesting agency selects a provider believed to be able to provide the requested bed capacity, if needed, and most
qualified to provide the requested services, and then negotiates the price and terms of the contract with that provider.
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2023 Accomplishments
In spite of the continued challenges presented by the actions in response to COVID-19 and the challenging labor
market in 2023, we renewed several significant contracts and completed numerous other transactions and milestones,
including the following:
CoreCivic Safety:
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Renewed all of the 18 management contracts scheduled to expire during 2023.
Entered into a new management contract with Hinds County, Mississippi to care for up to 250 adult male
pre-trial detainees at our Tallahatchie County Correctional Facility in Tutwiler, Mississippi.
Entered into a new management contract with the state of Wyoming to care for up to 240 male inmates at
the Tallahatchie County Correctional Facility.
Entered into a new management contract with Harris County, Texas, to care for up to 360 male inmates
at the Tallahatchie County Correctional Facility.
Entered into a new management contract with the state of Montana to care for up to 120 inmates at our
1,896-bed Saguaro Correctional Facility in Eloy, Arizona.
Served our customer's unique surge in demand by accommodating and managing an average daily ICE
population that more than doubled following the expiration of Title 42 in May 2023.
Deployed ResNet at approximately 20 of our correctional facilities, which involved the installation of a
secure controlled network, and the addition of an average of 20 new Microsoft® Surface laptops at each
of these sites. With strict security measures in place designed to ensure compliance and public safety, an
important component of ResNet is connecting residents to online job skills training, testing and
certification. ResNet is now the means by which many of the programs we have in place are offered,
including our educational and vocational programs and other programs we believe are vital to reentry such
as anger management, substance abuse education and financial literacy.
Partnered with ReCA, a non-profit organization, to offer Life Coaching training and certification for
incarcerated individuals at our Saguaro facility in Arizona. Graduates of the program will serve as future
Peer Life Coaches at the Saguaro facility.
Partnered with Our Journey, a non-profit organization led by an individual who has lived experience to
produce reentry booklets for each state in which we have facilities. In 2023, a booklet for the state of
Georgia was completed and a booklet for the state of Tennessee is in process.
Implemented several additional programs to help prepare returning citizens for life after release, including
"2nd Opportunity", a life skills and employment readiness program, and Rebound Employment Training,
which teaches the skills necessary to become a successful online freelancer or remote worker upon release.
We also partnered with Geographic Solutions whose "Virtual One Stop Reentry Employment
Opportunities" software system provides employment readiness and resume building skills and was
customized for us to allow incarcerated persons the opportunity to search and apply for current job
openings in the communities to which they will be released.
Began piloting Steered Straight's "One Step Away" rehabilitation and recovery program at our Hardeman
County Correctional Facility in Tennessee and at our Cibola County Corrections Facility in New Mexico
to reduce drug usage, particularly fentanyl, and all overdoses, as well as to strengthen incarcerated persons'
recovery and aftercare.
Partnered with Reboot Recovery to offer a peer-led, 12-week research-based PTSD/Trauma and
Resiliency program for incarcerated veterans. We piloted the program at four facilities and are now
expanding the program to all of our facilities.
Deployed the first in-facility Medication Assisted Treatment, or MAT, program at our Tallahatchie
County Correctional facility for residents under the state of Vermont's jurisdiction and also at our Saguaro
Correctional Facility for residents under the state of Montana's jurisdiction. MAT is the use of
medications in combination with counseling and behavioral therapies, which is effective in the treatment
of opioid use disorders and can help some people to sustain recovery.
18
•
•
•
•
Launched "BriefCam", an AI-based camera solution designed to assist with monitoring risk areas at our
facilities.
Launched "Remote Vital Signs Monitoring" in certain facilities designed to fight overdose and suicide-
related risks by providing constant monitoring of an individual while in a designated area.
Our Librarian at the Trousdale Turner Correctional Center in Tennessee was selected as the 2023 winner
of the "Exceptional Service Award" by the American Library Association. She was selected because of
her noteworthy contributions to expand resources and literature at the Trousdale Turner facility.
Our Warden at the Northeast Ohio Correctional Center received the North American Association of
Wardens and Superintendents 2023 "Warden of the Year" award. The award recognizes a warden who
has gone the extra mile to solve problems in their organization, involve themselves in community and
local organizations, and mentor in the development of others.
CoreCivic Community:
•
•
•
•
Renewed all of the 16 management contracts scheduled to expire during 2023.
Twenty-four residents at our CAI Ocean View facility in California received a "Certificate of Completion
in Money Smarts and Transitional Skills".
Partnered with the San Diego City College to offer classes in Forklift Operation, Auto Mechanics, and
Carpentry to residents at our Ocean View facility.
Partnered with Coastline and Career Expansion, Inc. at our CAI Boston Avenue facility in California to
provide a training program in workforce development, construction, utilities, energy and safety. Students
learn skills from basic industry awareness to OSHA requirements in this five-week, on-site program. They
also learn how to properly use hand and power tools, and how to safely handle construction materials.
Upon completion, students receive an industry-recognized certificate.
CoreCivic Properties:
•
Entered into a lease agreement with the Oklahoma Department of Corrections, or ODC, for our 1,670-bed
Allen Gamble Correctional Center (formerly known as the Davis Correctional Facility). The new lease
agreement includes a base term that commenced on October 1, 2023, with a scheduled expiration date of
June 30, 2029, and unlimited two-year renewal options. We previously operated the Allen Gamble facility
in our Safety segment under a management contract with the ODC. The management contract was
scheduled to expire on June 30, 2023. However, effective July 1, 2023, we entered into a 90-day contract
extension for the management contract, after which time, operations of the Allen Gamble facility
transferred from us to the ODC in accordance with the new lease agreement. The new lease agreement
meets the needs of our customer while providing us with more stable cash flows and enhanced
profitability.
•
Completed the sale of three residential reentry centers, generating net sales proceeds of $10.3 million.
Corporate and Other:
•
•
Amended and extended our Third Amended and Restated Credit Agreement, or the Previous Bank Credit
Facility, by entering into a Fourth Amended and Restated Credit Agreement, or the New Bank Credit
Facility, in an aggregate principal amount of $400.0 million, consisting of a $125.0 million term loan
(previously $100.0 million under the Previous Bank Credit Facility), or the Term Loan, and a revolving
credit facility with a borrowing capacity of $275.0 million (previously $250.0 million under the Previous
Bank Credit Facility), or the Revolving Credit Facility. The New Bank Credit Facility extends the
maturity to October 2028 from the May 2026 maturity under the Previous Bank Credit Facility. The New
Bank Credit Facility and the Previous Bank Credit Facility are together referred to herein as the Bank
Credit Facility.
Purchased $21.0 million of our 8.25% senior unsecured notes with a maturity date of April 2026 and $6.9
million of our 4.75% senior unsecured notes with a maturity date of October 2027 at a weighted average
purchase price of approximately 97% of par through open market purchases.
19
•
•
•
Redeemed in full our 4.625% senior unsecured notes that remained outstanding, amounting to $153.8
million, on February 1, 2023. The notes, with an original principal amount of $350.0 million, were
originally scheduled to mature in May 2023.
Repurchased a total of 3.5 million common shares at a total cost of $38.1 million, or $10.97 per share,
under our existing share repurchase program.
Named a 2023 Middle Tennessee Top Workplace by "The Tennessean", making us one of just 117
companies to make the 2023 list. The top workplaces award is based solely on employee feedback
gathered through a third-party survey. The confidential survey uniquely measures 15 culture drivers that
are critical to the success of any organization, including alignment, execution, and connection.
Facility Portfolio
CoreCivic Safety and Community Facilities and Facility Management Contracts
Our correctional, detention, and residential reentry facilities can generally be classified according to the level(s) of
security at such facility. Minimum security facilities have open housing within an appropriately designed and patrolled
institutional perimeter. Medium security facilities have either cells, rooms or dormitories, a secure perimeter, and
some form of external patrol. Maximum security facilities have cells, a secure perimeter, and external patrol. Multi-
security facilities have various areas encompassing minimum, medium or maximum security.
Our CoreCivic Safety and Community facilities can also be classified according to their primary function. The
primary functional categories are:
•
•
•
•
Correctional Facilities. Correctional facilities care for and provide contractually agreed upon programs
and services primarily to sentenced adult prisoners, typically prisoners on whom a sentence in excess of
one year has been imposed.
Detention Facilities. Detention facilities care for and provide contractually agreed upon programs and
services to (i) individuals being detained by ICE, (ii) individuals who are awaiting trial who have been
charged with violations of federal criminal law (and are therefore in the custody of the USMS) or state
criminal law, and (iii) prisoners who have been convicted of crimes and on whom a sentence of one year
or less has been imposed.
Residential Facilities. Residential facilities provide space and residential services in an open and safe
environment to individuals who have been detained by ICE and are awaiting the outcome of immigration
hearings. As contractually agreed upon, residential facilities offer services including, but not limited to,
educational programs, medical care, recreational activities, counseling, and access to religious and legal
services pursuant to Family Residential Standards issued by ICE.
Community Corrections. Community corrections/residential reentry facilities offer housing and programs
to offenders who are serving the last portion of their sentence or who have been assigned to the facility in
lieu of a jail or prison sentence, with a key focus on employment, job readiness, and life skills.
As of December 31, 2023, through our CoreCivic Safety segment, we operated 43 correctional and detention facilities,
39 of which we owned and managed and four of which we managed and were owned by our government partners.
Through our CoreCivic Community segment, we also owned and managed 23 residential reentry centers. Owned and
managed facilities include facilities placed into service that we own or control via a long-term lease and manage. The
following table includes certain information regarding each facility, including the term of the primary customer
contract related to such facility.
20
Facility Name
Primary Customer
Design
Capacity
(A)
Security
Level
Facility
Type
(B)
Term
Remaining
Renewal
Options
(C)
CoreCivic Safety Facilities:
Safety - Owned and Managed:
Central Arizona Florence
Correctional Complex
Florence, Arizona
Eloy Detention Center
Eloy, Arizona
La Palma Correctional Center
Eloy, Arizona
Red Rock Correctional Center (D)
Eloy, Arizona
Saguaro Correctional Facility
Eloy, Arizona
Leo Chesney Correctional Center
Live Oak, California
USMS
4,128 Multi
Detention
Sep-28
—
ICE
1,500 Medium Detention
Jun-28
Indefinite
State of Arizona
3,060 Multi
Correctional Apr-27
(1) 5 year
State of Arizona
2,024 Medium Correctional
Jul-26
(2) 5 year
State of Hawaii
1,896 Multi
Correctional
Jul-24
(2) 1 year
Idled 2015
240
—
—
—
—
Otay Mesa Detention Center
San Diego, California
ICE
1,994 Minimum/ Detention
Medium
Dec-24
(2) 5 year
Bent County Correctional Facility
Las Animas, Colorado
Crowley County Correctional
Facility
Olney Springs, Colorado
Huerfano County Correctional Center
Walsenburg, Colorado
Kit Carson Correctional Center
Burlington, Colorado
Coffee Correctional Facility (E)
Nicholls, Georgia
Jenkins Correctional Center (E)
Millen, Georgia
Stewart Detention Center
Lumpkin, Georgia
Wheeler Correctional Facility (E)
Alamo, Georgia
Midwest Regional Reception Center
Leavenworth, Kansas
Lee Adjustment Center
Beattyville, Kentucky
State of Colorado
1,420 Medium Correctional
Jun-24
(2) 1 year
State of Colorado
1,794 Medium Correctional Jun-24
(2) 1 year
Idled 2010
752 Medium Correctional
—
Idled 2016
1,488 Medium Correctional
—
—
—
State of Georgia
2,312 Medium Correctional
Jun-24
(10) 1 year
State of Georgia
1,124
Medium Correctional Jun-24
(11) 1 year
ICE
1,752 Medium Detention
Indefinite
—
State of Georgia
2,312 Medium Correctional
Jun-24
(10) 1 year
Idled 2021
1,033 Multi
Detention
—
—
Commonwealth of
816 Multi
Correctional
Jun-25
(3) 2 year
Kentucky
21
Facility Name
Primary Customer
Design
Capacity
(A)
Security
Level
Facility
Type
(B)
Term
Idled 2013
826 Minimum/ Correctional
—
Medium
Idled 2010
1,600 Medium Correctional
—
Remaining
Renewal
Options
(C)
—
—
Marion Adjustment Center
St. Mary, Kentucky
Prairie Correctional Facility
Appleton, Minnesota
Adams County Correctional Center
Adams County, Mississippi
Tallahatchie County Correctional
Facility (F)
Tutwiler, Mississippi
Crossroads Correctional Center (G)
Shelby, Montana
Nevada Southern Detention Center
Pahrump, Nevada
Elizabeth Detention Center
Elizabeth, New Jersey
Cibola County Corrections Center
Milan, New Mexico
Torrance County Detention Facility
Estancia, New Mexico
Lake Erie Correctional
Institution (H)
Conneaut, Ohio
Northeast Ohio Correctional Center
Youngstown, Ohio
Cimarron Correctional Facility
Cushing, Oklahoma
Diamondback Correctional Facility
Watonga, Oklahoma
Trousdale Turner Correctional Center
Hartsville, Tennessee
West Tennessee Detention Facility
Mason, Tennessee
Whiteville Correctional Facility (I)
Whiteville, Tennessee
Eden Detention Center
Eden, Texas
ICE
2,232
Medium Detention
Aug-24
Indefinite
USMS
2,672 Multi
Correctional
Jun-24
Indefinite
State of Montana
664 Multi
Correctional
Jun-25
(2) 2 year
USMS
1,072 Medium Detention
Sep-25
(1) 5 year
ICE
300 Minimum Detention
Feb-24
(1) 6 month
USMS
1,129 Medium Detention
Indefinite
—
ICE
910 Multi
Detention
May-24
Indefinite
State of Ohio
1,798 Medium Correctional
Jun-32
Indefinite
State of Ohio
2,016 Medium Correctional
Jun-24
Indefinite
USMS
1,600 Multi
Detention
Sep-25
Indefinite
Idled 2010
2,160 Multi
Correctional
—
State of Tennessee
2,552 Multi
Correctional
Jun-26
Idled 2021
600 Multi
Detention
—
State of Tennessee
1,536 Medium Correctional
Jun-26
—
—
—
—
USMS
1,422 Medium Detention
Indefinite
—
22
Facility Name
Primary Customer
Design
Capacity
(A)
Security
Level
Facility
Type
(B)
Term
Remaining
Renewal
Options
(C)
Houston Processing Center
Houston, Texas
Laredo Processing Center
Laredo, Texas
South Texas Family Residential
Center
Dilley, Texas
T. Don Hutto Residential Center
Taylor, Texas
Webb County Detention Center
Laredo, Texas
Safety - Managed Only:
Citrus County Detention Facility
Lecanto, Florida
Lake City Correctional Facility
Lake City, Florida
Hardeman County Correctional
Facility
Whiteville, Tennessee
South Central Correctional Center
Clifton, Tennessee
ICE
1,000 Medium Detention
Aug-24
(6) 1 year
ICE
258 Minimum/ Detention
Feb-24
Indefinite
Medium
ICE
2,400
— Residential Sep-26
Indefinite
ICE
ICE
512 Medium Detention
Jul-24
(6) 1 year
480 Medium Detention
Feb-24
Indefinite
Citrus County, FL
760 Multi
Detention
Sep-30
(2) 5 year
State of Florida
893 Medium Correctional
Jun-24
Indefinite
State of Tennessee
2,016 Medium Correctional
Jun-25
(1) 2 year
State of Tennessee
1,676 Medium Correctional
Jun-25
—
Total design capacity for CoreCivic
Safety Facilities
64,729
23
Facility Name
Primary Customer
Design
Capacity
(A)
Security
Level
Facility
Type
(B)
Term
Remaining
Renewal
Options
(C)
CoreCivic Community Facilities:
CAI Boston Avenue
San Diego, California
CAI Ocean View
San Diego, California
Adams Transitional Center
Denver, Colorado
Arapahoe Community Treatment
Center
Englewood, Colorado
Centennial Community Transition
Center
Englewood, Colorado
State of California
120
— Community
Corrections
Jun-24
—
BOP
483
— Community Aug-24
(2) 1 year
Adams County
102
Corrections
— Community
Corrections
Jun-24
Indefinite
Arapahoe County
135
Community
Corrections Jun-24
—
Arapahoe County
107
Community
Corrections Jun-24
—
—
—
—
Columbine Facility
Denver, Colorado
Idled 2020
60
— Community
Corrections
—
Commerce Transitional Center
Commerce City, Colorado
Dahlia Facility*
Denver, Colorado
Longmont Community Treatment
Center
Longmont, Colorado
South Raleigh Reentry Center
Raleigh, North Carolina
Oklahoma Reentry Opportunity
Center
Oklahoma City, Oklahoma
Tulsa Transitional Center
Tulsa, Oklahoma
Turley Residential Center
Tulsa, Oklahoma
Austin Residential Reentry Center
Del Valle, Texas
Austin Transitional Center
Del Valle, Texas
Corpus Christi Transitional Center
Corpus Christi, Texas
Adams County
136
— Community Jun-24
Indefinite
Corrections
Denver County
120
— Community Jun-24
—
Corrections
Boulder County
69
Community
Corrections Jun-24
—
(1) 6 month
BOP
60
— Community Sep-24
(3) 1 year
Corrections
BOP
494
— Community Jan-25
(1) 1 year
Idled 2020
390
Corrections
— Community
Corrections
—
—
BOP
BOP
289
— Community
Corrections
Jan-25
(1) 1 year
116
— Community Aug-24
—
Corrections
State of Texas
460
— Community Aug-25
(3) 1 year
Corrections
State of Texas
160
— Community Aug-25
(1) 2 year
Corrections
24
Facility Name
Primary Customer
Design
Capacity
(A)
Security
Level
Facility
Type
(B)
Term
Remaining
Renewal
Options
(C)
Dallas Transitional Center
Hutchins, Texas
El Paso Multi-Use Facility
El Paso, Texas
El Paso Transitional Center
El Paso, Texas
Fort Worth Transitional Center
Fort Worth, Texas
Ghent Residential Reentry Center
Norfolk, Virginia
James River Residential Reentry
Center
Newport News, Virginia
State of Texas
300
— Community Aug-25
(3) 1 year
Corrections
State of Texas
360
— Community Aug-25
(3) 1 year
Corrections
State of Texas
224
— Community Aug-25
(3) 1 year
Corrections
State of Texas
248
— Community Aug-25
(3) 1 year
Corrections
BOP
36
— Community Aug-24
(3) 1 year
Corrections
BOP
84
Community
Corrections Aug-24
—
(3) 1 year
Cheyenne Transitional Center
Cheyenne, Wyoming
State of Wyoming
116
— Community Jun-24
Corrections
(2) 1 year
and
(1) 1 year
Total design capacity for CoreCivic
Community Facilities
*Held for Sale
4,669
25
(A) Design capacity measures the number of beds, and accordingly, the number of offenders each facility is
designed to accommodate. Facilities housing detainees on a short-term basis may exceed the original
intended design capacity due to the lower level of services required by detainees in custody for a brief
period. From time to time, we may evaluate the design capacity of our facilities based on the customers
using the facilities, and the ability to reconfigure space with minimal capital outlays.
(B) We manage numerous facilities that have more than a single function (i.e., housing both long-term
sentenced adult prisoners and pre-trial detainees). The primary functional categories into which facility
types are identified were determined by the relative size of offender populations in a particular facility on
December 31, 2023. If, for example, a 1,000-bed facility cared for 900 adult offenders with sentences in
excess of one year and 100 pre-trial detainees, the primary functional category to which it would be
assigned would be that of correctional facilities and not detention facilities. It should be understood that
the primary functional category to which multi-user facilities are assigned may change from time to time.
(C) Remaining renewal options represents the number of renewal options, if applicable, and the term of each
option renewal.
(D) Pursuant to the terms of a contract awarded by the state of Arizona in September 2012, the state of Arizona
has an option to purchase the Red Rock facility at any time during the term of the contract, including
extension options, based on an amortization schedule starting with the fair market value and decreasing
evenly to zero over the 20-year term of the contract.
(E) These facilities are subject to purchase options held by the GDOC, which grants the GDOC the right to
purchase the facility for the lesser of the facility's depreciated book value, as defined, or fair market value
at any time during the term of the contract between the GDOC and us.
(F) The facility is subject to a purchase option held by the Tallahatchie County Correctional Authority that
grants Tallahatchie County Correctional Authority the right to purchase the facility at any time during the
contract at a price generally equal to the cost of the premises less an allowance for amortization that
originally occurred over a 20-year period. The amortization period was extended through 2050 in
connection with an expansion completed during the fourth quarter of 2007.
(G) The state of Montana has an option to purchase the facility generally at any time during the term of the
contract with us at fair market value.
(H) The state of Ohio has the irrevocable right to repurchase the facility before we may resell the facility to a
third party, or if we become insolvent or are unable to meet our obligations under the management contract
with the state of Ohio, at a price generally equal to the fair market value.
(I) The state of Tennessee has the option to purchase the facility in the event of our bankruptcy, or upon an
operational or financial breach under the management agreement, at a price equal to the book value, as
determined under such agreement.
26
CoreCivic Properties
Through our CoreCivic Properties segment, we owned 6 correctional facilities held for lease to third-party operators.
The following table includes certain information regarding each property.
Property Name
Primary Customer
Design
Capacity
Square
Footage
Lease
Expiration
Remaining
Renewal
Options
(A)
California City Correctional
Center (B)
California City, California
Lansing Correctional Facility
Lansing, Kansas
Southeast Correctional
Complex (C)
Wheelwright, Kentucky
Northwest New Mexico Correctional
Center
Grants, New Mexico
State of California
2,560 522,000 Mar-24
NA
State of Kansas
2,432 401,000
Jan-40
NA
Commonwealth of
Kentucky
656 127,000
Jun-30 (5) 2 year
State of New Mexico
596 188,000 Oct-24 (6) 3 year
Allen Gamble Correctional Center
Holdenville, Oklahoma
State of
Oklahoma
1,670 288,757
Jun-29 Indefinite
North Fork Correctional Facility
Sayre, Oklahoma
Idled 2023
2,400 466,000
—
—
10,314 1,992,757
(A) Remaining renewal options represents the number of renewal options, if applicable, and the term of each
option renewal.
(B) On December 6, 2022, we received notice from the California Department of Corrections and Rehabilitation,
or CDCR, of its intent to terminate the lease agreement for the facility by March 31, 2024, due to the state's
declining inmate population.
(C) The KYDOC has an option to purchase the facility at any time during the term of the lease with us at a price
equal to the fair market value of the property.
27
Competitive Strengths
Through our three segments, CoreCivic Safety, CoreCivic Community, and CoreCivic Properties, we offer multiple
solutions to unique challenges, allowing government organizations to address their various needs while customizing
the solution based on their unique circumstances. Accordingly, we believe that we benefit from the following
competitive strengths:
Largest Private Owner of Correctional and Detention Facilities. As of December 31, 2023, we owned, or controlled
via a long-term lease, approximately 14.6 million square feet of real estate, all used directly or indirectly by
government agencies. Our complementary set of business assets provide critical infrastructure and services under
contracts with federal, state, and local government agencies that generally have credit ratings of single-A or better,
which also contributes to our steady, predictable cash flows.
In our CoreCivic Safety segment, we own, or control via a long-term lease, 12.0 million square feet of real estate used
to provide innovative, comprehensive, flexible, turn-key correctional and detention services to federal, state and local
government agencies. As of December 31, 2023, our CoreCivic Safety segment operated 43 facilities, 39 of which
we owned, with a total design capacity of 64,729 beds, making us the nation's largest private prison owner and one of
the largest prison operators in the United States. Eight facilities in our Safety segment, containing 8,699 beds, are
currently idle and available for growth opportunities. Our CoreCivic Safety segment generated 84.7% of our total
segment net operating income during 2023.
In our CoreCivic Community segment, we own, or control via a long-term lease, 0.5 million square feet of real estate
representing, as of December 31, 2023, 23 residential reentry centers with a design capacity of 4,669 beds, making us
the second largest community corrections owner and operator in the United States. Two of our residential reentry
centers, containing 450 beds, were idle as of December 31, 2023. Our CoreCivic Community segment generated 5.2%
of our total segment net operating income during 2023.
In our CoreCivic Properties segment, as of December 31, 2023, we owned 2.0 million square feet of correctional real
estate representing 6 properties with a total design capacity of 10,314 beds. One facility in our Properties segment,
containing 2,400 beds, is currently idle and available for growth opportunities. Our CoreCivic Properties segment
generated 10.1% of our total segment net operating income during 2023.
We believe our synergistic set of business segments, combined with our operating strategies, corrections-industry
commitment to rehabilitation, extensive government relationships, and deep real estate expertise, provide us with a
diversified platform for stable cash flows and sustainable growth, with multiple paths for organic expansions and
acquisitions.
Pioneered Modern-Day Private Prisons. Through our CoreCivic Safety segment, we are the nation's largest private
prison owner and one of the largest prison operators in the United States, which provides us significant credibility
with our current and prospective clients. We believe we own, or control via a long-term lease, approximately 56% of
all privately owned prison beds in the United States and manage nearly 38% of all privately managed prison beds in
the United States. We pioneered modern-day private prisons with a list of notable accomplishments, such as:
•
•
•
•
•
the first company to design, build, and operate a private prison;
the first company to manage a private maximum-security facility under a direct contract with the federal
government;
the first company to purchase a government-owned correctional facility from a government agency in the
United States and to manage the facility for the government agency;
the first company to lease a private prison to a state government; and
the first company to develop a privately-owned, build-to-suit correctional facility to be operated by a
government agency through a long-term lease agreement.
28
In addition to providing us with extensive experience and institutional knowledge, our size also helps us deliver value
to our customers by providing purchasing power and allowing us to achieve certain economies of scale.
Available Beds within Our Existing Facilities. We currently have 10,859 beds at eight correctional and detention
facilities that are vacant and immediately available to use. We are actively engaged in marketing this available
capacity as solutions to meet the needs of potential customers. Historically, we have been successful in identifying
opportunities to utilize our inventory of available beds. Occupancy rates at our facilities were negatively impacted by
COVID-19, and we have been focused on filling available capacity within our existing facilities. As available capacity
within existing operating facilities is utilized, we believe increasing demand will result in the utilization of idle bed
capacity. We also believe the scarcity in supply of available public sector beds, increases in the cost of constructing
new facilities, and challenges in financing new correctional facilities in the public sector will result in an increase in
the value of our portfolio and the utilization of our idle bed capacity over the long-term.
Our available bed capacity can also be used for emergent needs. For example, on September 25, 2023, we announced
that we signed a new management contract with Hinds County, Mississippi to care for up to 250 adult male pre-trial
detainees at our 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi. The initial contract
term is for two years, which may be extended for an additional year upon mutual agreement. In addition, on November
16, 2023, we announced that we signed a new management contract with the state of Wyoming to care for up to 240
male inmates at the Tallahatchie facility. The term of the new contract runs through June 30, 2026. Also on November
16, 2023, we announced that we signed a new contract with Harris County, Texas, to care for up to 360 male inmates
at the Tallahatchie facility. Upon mutual agreement, Harris County may access an additional 360 beds at the facility.
The initial contract term began on December 1, 2023, and is scheduled to expire on November 30, 2024. However,
the contract may be extended at Harris County's option for up to four additional one-year terms. In addition to the
recent contracts with Hinds County, the state of Wyoming, and Harris County, we currently care for residents from
the USMS, Vermont, South Carolina, the U.S. Virgin Islands, and Tallahatchie County at the Tallahatchie facility,
which demonstrates the flexible solutions that we provide. On November 14, 2023, we announced that we signed a
new management contract with the state of Montana to care for up to 120 inmates at our 1,896-bed Saguaro
Correctional Facility in Eloy, Arizona. The new contract is scheduled to expire on October 31, 2025, and may be
extended by mutual agreement for a total term of up to seven years. We currently care for residents from the state of
Hawaii and the state of Idaho at the Saguaro facility. 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.
Well-Established Community Corrections Platform. Through our CoreCivic Community segment, as of December
31, 2023, we had a network of 23 residential reentry centers containing a total of 4,669 beds. We offer housing and
programs, with a key focus on employment, job readiness and life skills in order to help offenders successfully re-
enter the community and reduce the risk of recidivism. We also provide non-residential correctional alternatives,
including electronic monitoring and case management services, to municipal, county and state governments in
multiple states. We expect to continue to pursue opportunities that expand the scope of non-residential correctional
alternative solutions available to government agencies.
We are the second largest community corrections owner and operator in the United States. We believe the demand
for the housing and programs that community corrections facilities offer will grow as offenders are released from
prison and due to an increased awareness of the important role these programs play in an offender's successful
transition from prison to society. We expect to continue to pursue opportunities to provide these services to parolees,
defendants, and offenders who are serving their full sentence, the last portion of their sentence, waiting to be sentenced,
awaiting trial while supervised in a community environment, or as an alternative to incarceration. We believe we have
the opportunity to maximize utilization of available beds within our community corrections portfolio that would
further increase the number of individuals benefiting from the services we provide in such facilities. For example, in
the first quarter of 2021, we activated a new contract with the BOP for residential reentry and home confinement
services at our previously idled 289-bed Turley Residential Center and at our 494-bed Oklahoma Reentry Opportunity
Center, both in Oklahoma. The new contract, which was renewed in January 2024 through January 2025, and contains
an additional one-year renewal option through January 2026, supplements the existing utilization by the state of
Oklahoma at the Oklahoma Reentry Opportunity Center. Further, we are exploring potential opportunities to expand
the scope of non-residential correctional alternative solutions we provide to government agencies.
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Flexible Real Estate Solutions. Through our CoreCivic Properties segment, as of December 31, 2023, we owned 6
correctional properties totaling 2.0 million square feet. We have an extensive network of government and other third-
party relationships and the capability to manage and maintain complex properties, built over our 40-year history. In
addition, we offer our customers an attractive portfolio of correctional, detention, and reentry facilities that can be
leased for various needs as an alternative to providing "turn-key" correctional, detention, and residential reentry bed
space and services to our government partners. In June 2023, we announced that we had entered into a lease agreement
with the ODC for our 1,670-bed Allen Gamble Correctional Center. The new lease agreement includes a base term
that commenced on October 1, 2023, with a scheduled expiration date of June 30, 2029, and unlimited two-year
renewal options. We previously operated the Allen Gamble facility in our Safety segment under a management
contract with the ODC. The management contract was scheduled to expire on June 30, 2023. However, effective July
1, 2023, we entered into a 90-day contract extension for the management contract, after which time, operations of the
Allen Gamble facility transferred from us to the ODC in accordance with the new lease agreement. In September
2021, we announced that we had entered into a three-year lease agreement with the state of New Mexico at our 596-
bed Northwest New Mexico Correctional Center. We previously operated the Northwest New Mexico facility in our
Safety segment under a contract with the state of New Mexico. The new lease agreement commenced on November
1, 2021 and includes extension options that could extend the term of the lease through October 31, 2041. We will
retain responsibility for facility maintenance throughout the term of the lease. The leases of these two facilities, along
with the lease of our 656-bed Southeast Correctional Complex to the KYDOC originating in 2019 demonstrate our
ability to react quickly to our partners' needs with innovative, flexible and cost-effective solutions. We previously
operated these three correctional facilities for various government partners. We intend to pursue additional
opportunities to lease prison facilities to government and other third-party operators in need of correctional capacity.
In January 2018, we entered into a 20-year lease agreement with the Kansas Department of Corrections, or KDOC,
for a 2,432-bed correctional facility to be constructed in Lansing, Kansas. This transaction represented the first
development of a privately owned, build-to-suit correctional facility to be operated by a government agency through
a long-term lease agreement. We commenced construction of the facility in the first quarter of 2018. In December
2019, the Lansing facility began accepting offenders into the 512-bed minimum security complex ahead of schedule,
with the remaining 1,920-bed medium/maximum security complex completed in January 2020. The new facility
replaced the Lansing Correctional Facility, Kansas' largest correctional complex for adult male inmates, originally
constructed in 1863. We are responsible for facility maintenance throughout the 20-year term of the lease, at which
time ownership will revert to the state of Kansas. We financed the construction of the Lansing Correctional Facility
100% with project specific financing, requiring no equity commitment from us.
With the extensively aged criminal justice infrastructure in the U.S. today, we also believe we can provide our "turn-
key" services to public correctional systems in need of replacement capacity, growing our business without an overall
increase in incarcerated populations. In December 2021, we were awarded a new management contract from the state
of Arizona for up to 2,706 inmates at our 3,060-bed La Palma Correctional Center in Arizona. The state of Arizona
closed an outdated public-sector prison and transferred the inmate populations from this prison and multiple other
public-sector prisons to our La Palma facility. The transfer commenced in April 2022 and was substantially completed
in the fourth quarter of 2022. Before the new award, the La Palma facility supported the mission of ICE by caring for
approximately 1,800 detainees. We also offer real estate only solutions to government agencies that need correctional
capacity where they prefer to perform the operations, similar to our Allen Gamble Correctional Center in Oklahoma,
as previously described herein. In addition, in August 2022, we completed the sale of the 1,978-bed McRae
Correctional Facility to the Georgia Building Authority in order to update its aged and inefficient public sector
correctional infrastructure. As previously described herein, we have also recently been awarded new management
contracts from two county government agencies to accept transfers of offender populations from public-sector
facilities because of their challenges in maintaining adequate staffing levels to manage their facilities. As a private
enterprise, we have the ability to respond more quickly to changing market conditions, and can offer various types of
incentives to attract and retain correctional staff that are more difficult for government agencies to provide.
Attractive Real Estate Portfolio. As of December 31, 2023, the properties we owned or controlled represented 94%
of our portfolio of 72 facilities. The weighted average age of the facilities we own in the portfolio of facilities in our
CoreCivic Safety, CoreCivic Community, and CoreCivic Properties segments is 25, 31, and 23 years, respectively.
These valuable assets are located in areas with high barriers to entry, particularly due to the unique permitting and
zoning requirements for these facilities. Further, the majority of our assets are constructed primarily of concrete and
steel, generally requiring lower maintenance capital expenditures than other types of commercial properties.
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We believe we are the largest developer of mission-critical, criminal justice center real estate projects over the past 15
years. We provide space and services under contracts with federal, state, and local government agencies that generally
have credit ratings of single-A or better. In addition, a majority of our contracts have terms between one and five
years, and we have experienced customer retention of approximately 95% at facilities we owned or controlled via
long-term lease during the previous five years, which contributes to our relatively predictable and stable revenue base.
This stream of revenue combined with our low maintenance capital expenditure requirement translates into steady,
predictable cash flow.
Development and Expansion Opportunities. Several of our existing government partners, as well as prospective
government partners, have been experiencing growth in offender populations and overcrowded conditions, as well as
an increase in violent crime. Governments are continuing to assess their need for correctional space, and several are
continuing to consider alternative correctional capacity for their aged or inefficient infrastructure, or are seeking cost
savings by utilizing the private sector, which could result in increased future demand for the solutions we provide.
Competing budget priorities often impede our customers' ability to construct new prison beds of their own or update
their older facilities, which we believe could result in further demand for private sector prison capacity solutions in
the long-term. Over the long-term, we would like to see meaningful utilization of our available capacity and better
visibility from our customers into their potential future needs before we develop new prison capacity on a speculative
basis. We will, however, respond to customer demand and may develop or expand correctional and detention facilities
when we believe potential long-term returns justify the capital deployment. With the extensively aged criminal justice
infrastructure in the U.S. today, we also believe we can bring real estate solutions to government agencies like we did
in connection with the construction of the Lansing Correctional Facility that was brought online in January 2020.
Increasing Financial Flexibility. Effective January 1, 2021, we revoked our election to be taxed as a REIT. We
believe this conversion in corporate tax structure improves our overall credit profile, as we are able to allocate our
free cash flow toward the repayment of debt, which may include the purchase of our outstanding debt in open market
transactions, privately negotiated transactions or otherwise, and to exercise more discretion in returning capital to our
shareholders. Any such debt repurchases will depend upon prevailing market conditions, our liquidity requirements,
contractual requirements, applicable securities laws requirements, and other factors. From January 1, 2021 through
December 31, 2023, we have repaid $711.5 million of debt, net of the change in cash. Following our first priority of
utilizing free cash flow to reduce debt, we expect to allocate a substantial portion of our free cash flow to returning
capital to our shareholders, which could include additional share repurchases and future dividends. Any future
dividend is subject to the Board of Directors', or BODs', determinations as to the amount of distributions and the
timing thereof, as well as limitations under the Company's debt covenants. We were not able to implement a
meaningful share repurchase program under the REIT structure without increasing our debt because a substantial
portion of our free cash flow was required to satisfy the distribution requirements under the REIT structure. On May
2, 2022, the BOD approved a share repurchase program to purchase up to $150.0 million of our common stock. On
August 2, 2022, the BOD increased the authorization to repurchase under the share repurchase program by up to an
additional $75.0 million of our common stock, which resulted in a total aggregate authorized amount to repurchase
up to $225.0 million of our common stock. Repurchases of our outstanding common stock will be made in accordance
with applicable securities laws and may be made at our discretion based on parameters set by our BOD from time to
time in the open market, through privately negotiated transactions, or otherwise. The share repurchase program has
no time limit and does not obligate us to purchase any particular amount of our common stock. The authorization for
the share repurchase program may be terminated, suspended, increased or decreased by the BOD in its discretion at
any time. Through December 31, 2023, we completed the repurchase of 10.1 million shares of our common stock at
a total cost of $112.6 million, or $11.16 per share, using cash on hand and cash provided by operations, including 3.5
million shares at a total cost of $38.1 million, or $10.97 per share, during 2023. For more information about the
repurchases made under our share repurchase program, see "Part II, Item 5. Market For Registrant's Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities – Issuer Purchases of Equity Securities."
During 2023, we completed an amendment and extension of our Previous Bank Credit Facility, increasing its size
from $350.0 million to $400.0 million, extending the maturity from May 2026 to October 2028, relaxing certain
covenants, while essentially maintaining existing pricing. The New Bank Credit Facility provides us with additional
liquidity and flexibility to execute our business plan.
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As of December 31, 2023, we had cash on hand of $121.8 million and $257.1 million available under our Revolving
Credit Facility, which has borrowing capacity of up to $275.0 million. Our total weighted average effective interest
rate on all outstanding debt was 7.6%, while our total weighted average maturity on all outstanding debt was 4.7 years.
For the year ended December 31, 2023, our fixed charge coverage ratio was 3.8x and our debt leverage ratio was 2.8x.
During the year ended December 31, 2023, we generated $231.9 million in cash through operating activities.
Offer Compelling Value to Correctional Agencies. We believe our government partners seek a compelling value and
service offering when selecting an outsourced correctional services provider. We believe we offer a cost-effective
alternative to our government partners by reducing their correctional services costs, including the avoidance of long-
term pension obligations and large capital investments in new bed capacity. We endeavor to improve operating
performance and efficiency through the following key operating initiatives: (1) standardizing supply and service
purchasing practices and usage; (2) implementing a standard approach to staffing and business practices; (3) improving
offender management, resource consumption, and reporting procedures through the utilization of numerous
technological initiatives; (4) reconfiguring facility bed space to optimize capacity utilization; and (5) improving
outcomes for incarcerated individuals in our care through investments in a variety of programs intended to reduce
recidivism. Through ongoing company-wide initiatives, we continue to focus on efforts to improve operating
efficiencies.
Since 2017, we have maintained a nationwide initiative to advocate for a range of government policies that will help
former offenders successfully reenter society and stay out of prison. In 2020, we announced that we will publicly
advocate at the federal and state levels for a slate of new policies that will help people succeed in their communities
after being released from prison. Specifically, we pledged our support for Pell Grant Restoration, Voting Rights
Restoration and Licensure Reform Policies. Also in 2020, we began a partnership with, and continue to invest in,
Prison Fellowship, a leading advocate for criminal justice reform serving current and formerly incarcerated individuals
and their family members. Through a network of programming and advocacy efforts, the organization seeks to effect
positive change at every level of the criminal justice system. We have committed to a multi-year partnership in Prison
Fellowship's First Chance Network, or FCN. Serving over 230,000 children annually, the FCN addresses persistent
gaps in opportunity for children who have incarcerated parents and seeks to create a trajectory toward healthy life
outcomes and prevent youth justice involvement.
Supporting policies that advance the expansion of reentry programs aligns closely with our ongoing efforts to assess
and expand reentry-focused programming in our facilities. To that end, we actively engage subject matter experts and
practitioners, including formerly incarcerated individuals who bring valuable, lived experiences that better inform
innovations and enhancements to those programmatic offerings and the delivery of other services to the individuals
entrusted to our care.
We believe that as successful as we may be with our work inside our facilities, incarcerated individuals still face
embedded societal barriers and collateral consequences when they return to their communities. Supporting recidivism-
reducing policies is one way we can bridge the gap and give the men and women entrusted in our care a better
opportunity at never returning to prison.
Through our strong commitment to community corrections and reentry programs, we offer our government partners
additional long-term value. Our evidence-based reentry programs, including academic education, vocational training,
substance abuse treatment, life skills training, and faith-based programming, are customizable based on partner needs
and are applied utilizing best practices and/or industry standards. Our proprietary reentry process and
cognitive/behavioral curriculum, "Go Further," promotes a comprehensive approach to addressing the barriers to a
successful return to society. Through our efforts in community corrections and reentry programs, we can provide
consistency and common standards across facilities. We can also serve multiple levels of government on an as-needed
basis, all toward reaching the goal we share with our government partners of providing incarcerated individuals with
the opportunity to succeed when they are released, making our communities safer, and, ultimately, reducing
recidivism.
We also offer a wide variety of specialized services that address the unique needs of various segments of the offender
population. Because the offenders in the facilities we operate differ with respect to security levels, ages, genders, and
cultures, we focus on the particular needs of an offender population and tailor our services based on local conditions
and our ability to provide services on a cost-effective basis.
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We believe our government partners and other agencies in the criminal justice sector also seek a compelling value and
service offering when pursuing solutions to their unique real estate needs. We believe our track record of constructing
quality assets on time and within budget, our design and construction methods, unique financing alternatives, and our
expertise and experience enable us to provide a compelling value proposition for the construction of mission-critical
government real estate assets. We also offer utility management services using environmentally-friendly, state-of-
the-art technology and believe our robust preventive maintenance program included in our service offering
significantly reduces the risk of real estate neglect.
Proven Senior Management Team. Our senior management team has applied their prior experience and diverse
industry expertise to improve our operations, related financial results, and capital structure. Under our senior
management team's leadership, we have successfully executed strategies to diversify our business and offer a broader
range of solutions to government partners, created new business opportunities with customers that have not previously
utilized the private corrections sector, completed several business combination transactions and corporate structure
changes adapting to dynamic environments, and successfully completed numerous financing transactions.
ESG Reporting. In April 2023, we issued our fifth Environmental, Social and Governance, or ESG, report, which
summarizes efforts and aspirational goals across environmental, social, and governance topics. The report covers the
year ended December 31, 2022, and addresses topics such as evidence-based practices in our reentry programs and
human rights-related activities, including delivery of human rights training to all of our employees. The report also
summarizes our management approach and activities in topics including energy/utilities management; DE&I; lobbying
and political activity; supplier diversity; charitable giving; PREA compliance; ethics; and employee compensation,
benefits and training.
The ESG report was designed to be in accordance with the Global Reporting Initiative, or GRI, standards: Core option
issued by the Global Sustainability Standards Board. GRI is an international independent standards organization
created to help business, government and other organizations understand and communicate how their operations affect
stakeholders.
The ESG report may be accessed on our website at www.corecivic.com/esg. The information included in the ESG
report is not incorporated by reference into this Annual Report.
Human Capital
In order to fulfill our mission of providing high quality, compassionate treatment to all those in our care, we strive to
attract, develop, and retain a diverse workforce of individuals who are driven by a deep sense of service, high standards
of professionalism, and a responsibility to help government partners better the public good. The following information
outlines the human capital strategies and initiatives designed to address the twin challenges of turnover and retention.
Demographics
Employees
Total Employees
% Female
% People of Color or Under-
represented Minorities (URM)
% Veterans
% Facility-level employees
Hiring
2023
11,194 Total Hires
% Female
53%
% People of Color or Under-
represented Minorities (URM)
% Veterans
% Facility-level employees
61%
8%
95%
2023
7,283
53%
61%
12%
99%
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Leadership & Learning
We facilitate annual performance and career development discussions with all employees. These discussions consist
of a continuous cycle of goal alignment, individual development planning, and performance and talent reviews. In
2023, 98% of all employees received annual performance reviews. We continue to use a leading cloud-based talent
system to align performance, talent management, career development activities, and training.
In addition, every year we facilitate talent review discussions to help assess potential and identify developmental
opportunities within our leadership pipeline. Through these discussions, we continue to see opportunities for
advancement for our existing workforce. Our 2023, talent reviews included all leaders in our facilities, from facility
department heads through wardens, plus headquarters-based directors and above. Of the 1,296 leaders assessed, 18%
were identified for accelerated development, with 9% classified as "ready now" for advanced leadership
responsibilities. Supervisors of the 91% of leaders who were not "ready now" received development resource guides
with CoreCivic-specific ideas for experience, exposure, and education opportunities. Supervisors can use these
resources to help those employees close the gap between their current performance and the requirements for higher
levels of responsibility and complexity.
In 2023, we continued our focus on our leadership candidate pipeline and leader development needs. The CoreCivic
Leadership Experiences and Rotations program, or CLEAR, continues to yield positive results as a development
mechanism for top talent. CLEAR is a two-year rotational development program designed to provide individuals
identified during our talent management discussions with accelerated development opportunities through multiple,
short-term experiences. The breadth of roles can vary across different career paths and are intended to develop the
rising leader's readiness for targeted roles with higher levels of responsibility and complexity following successful
completion of the program. In 2023, we graduated our first cohort of CLEAR participants. These CLEAR graduates
were all placed in facility leadership roles. We also began our second CLEAR cohort of participants.
We recognize the importance of investing in our people. Our management approach to training and development is
overseen by our Chief Human Resources Officer and Managing Director, Enterprise Learning and Development, and
is implemented by leaders at our headquarters as well as a network of learning and development managers across our
facilities. Our training activity and records are managed according to our learning and development policy, and our
BOD receives periodic updates on the delivery of strategic training programs.
All CoreCivic employees are eligible to participate in various leadership and operational trainings. For example,
through CoreCivic University, our employees can refine their current skills as well as learn new, valuable skills. To
date, we have graduated 4,733 employees from CoreCivic University programs. For new and existing employees
alike, we provide training that meets or exceeds ACA and government partner standards, including an average of 200
hours of pre-service and on-the-job training for new employees. We also require a minimum of 40 hours of annual
in-service and specialty training for employees in our Safety and Community segments.
Culture & Employee Engagement
People are at the center of what we do. We believe that culture influences employee engagement. Therefore, we seek
the perspectives of our employees through our periodic, anonymous, full-census culture survey to help us enhance our
culture and make the workplace more engaging.
In 2023, we conducted an abbreviated culture survey. This survey was an outcome of a recommendation by our DE&I
Advisory Council to measure progress on our diversity and inclusion strategies. In addition to the DE&I related
questions, we included questions designed to answer key questions about our organization's culture, giving us a pulse
on the work we're doing to strengthen our culture and complimenting the internal pulse survey we conducted in 2022.
The results of the 2023 survey will be disseminated to our employees and action plans created in early 2024.
We know that bringing out the best in our people is the greatest way to recruit, retain, and develop our employees.
We continually work to create a culture of respect where we value everyone's differences, appreciate individual
contributions, and support people so they reach their highest potential.
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Diversity, Equity & Inclusion
We are proud of our diverse workforce. We recognize that employees come from many different backgrounds and
that these differences are integral to how we view and experience the world. We believe that DE&I improves safety
and security, drives quality, increases employee engagement, and provides greater accountability, all of which allow
us to better serve the needs of our government and other third-party partners and employees.
Our Chief Human Resources Officer and our Vice President of Human Resources lead our strategic approach to DE&I.
Our DE&I policies prohibit harassment and promote proactive efforts around DE&I initiatives. In accordance with
federal contract requirements, we maintain affirmative action plans designed to provide equality of opportunity for all
common diversity demographics, including but not limited to, qualified minorities, women, persons with disabilities,
and covered veterans.
We believe there are opportunities to further advance our strategies around providing diversity of opportunity to all
staff at CoreCivic. We have made significant investments and strides in the development of an executive-endorsed
company roadmap for our DE&I-intended outcomes and established principles. We have communicated our plans to
all leaders, employees, and the BOD. Additionally, we have taken steps towards achieving our stated DE&I principles
(Create a Common DE&I Language, Create a Culture of Belongingness and Respect, and Create a Pipeline of Diverse
Candidates) through the recommendations of our DE&I Advisory Council. This DE&I Advisory Council includes a
select team of CoreCivic employees representing our organization's diversity by gender, ethnicity, tenure, business
unit, and geography. In 2023, we concluded the successful pilot of our three Business Resource Groups, or BRGs,
women's, military, and multicultural. We extended membership for all BRGs to our enterprise employees. We've
already seen the tangible, positive impacts these groups are having on our culture.
In 2023, we issued our second DE&I Annual Report showcasing our DE&I journey from the beginning, our progress
towards our DE&I goals, our external impact within the community and some brief highlights of our future work for
the year ahead. The DE&I report may be accessed on our website at www.corecivic.com/dei. The information
included in the report is not incorporated by reference into this Annual Report.
In collaboration with executives and senior leaders, we continued our focus on measuring the outcomes of our DE&I
actions for continuous improvement. In 2023, we had a collective 98% completion rate for yearly DE&I e-learning.
We also continue to use a DE&I e-learning module as part of our pre-service and in-service curricula. We continued
to refine governance for our DE&I strategy with accountability to enterprise executives and the BOD. We also
extended our involvement and sponsorship of DE&I community organizations such as Advancement of Women in
Nashville, The Table, and Middle Tennessee State University's Charlie and Hazel Daniels Veterans and Military
Family Center, to name a few.
Hiring & Sustaining our Workforce
We are the largest employer in many of the areas in which our facilities are located. As such, we are committed to
supporting and growing the local communities through our hiring and outreach efforts. Our long-term tenure in many
of the communities we serve has provided stable careers and career growth opportunities to workforces in these areas.
We provide equal opportunity employment to all candidates and follow the United States Department of Labor Office
of Federal Contract Compliance Programs equal employment opportunity guidelines for hiring.
In 2023, we invested approximately $9.2 million in talent attraction efforts to reach prospective candidates, and we
received over 106,900 job applications, an increase of 61% over 2022. For the past thirteen consecutive years,
CoreCivic has been recognized as a GI Jobs Military Friendly employer. CoreCivic has been notified that we will
once again receive awards for Military Friendly Employer, Military Friendly Spouse, Military Friendly Brand, and
Military Friendly Supplier Diversity Program in 2024.
Compensation & Benefits
We utilize descriptive and prescriptive Human Capital analytics to align pay with our compensation strategy. We
leverage these analytics to act on changing labor market conditions to assist us with our efforts to maintain market
competitive wages. In addition, we evaluate internal pay equity though the use of job evaluation and market analyses
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that we then adjust for tenure, experience, location, performance, and other variables that can affect wages. We have
experienced labor shortages and wage pressures in many markets across the country. During the third quarter of 2023,
we provided wage increases to nearly all of our facility staff not covered by the McNamara-O'Hara Service Contract
Act, which is applicable to our facilities with federal contracts, in order to remain competitive. Additionally,
throughout the year we made out-of-cycle wage adjustments to maintain market competitiveness. We achieved higher
staffing levels during 2023 as a result of these investments in staffing, and we expect to continue to invest in staffing
resources during 2024, which may result in additional compensation and incremental expenses. While we have
achieved recent successes, the benefits of our investments in staffing may not be sustained, and labor shortages could
intensify again in the future.
We offer multiple medical and wellness benefit plans, dental, vision, and disability income insurance, flexible
spending accounts, and life and accidental death and dismemberment insurance. In addition, we provide our
employees with paid time off and paid holidays. We also provide retirement benefits to our employees through a
401(k) retirement plan. To be eligible for most benefit plans, employees must be in a full-time position; certain
exceptions apply, such as eligibility for the 401(k) retirement plan if the 401(k) retirement plan's service and hour
requirements are met or at locations where the McNamara-O'Hara Service Contract Act applies.
Labor Relations
As of December 31, 2023, we employed 11,694 full- and part-time employees, including employees with our
transportation and electronic monitoring subsidiaries, TransCor and Recovery Monitoring Solutions Corporation,
respectively. Approximately 1,860 of our employees at 12 of our facilities, or approximately 15.9% of our workforce,
are represented by labor unions. All of our collective bargaining agreements contain no-strike clauses that bind the
unions and the bargaining unit employees. Work stoppages at any of our facilities are exceedingly rare. In the opinion
of management, overall employee relations are good. New executive orders, administrative rules and changes in
National Labor Relations could increase organizing activity at locations where employees are currently not represented
by a labor organization. Increases in organizational activity or any future work stoppages could have an adverse
impact on our business, financial condition, or results of operations.
Employee Safety
We are committed to bettering the public good by making our facilities and communities safe for our team members,
those under our care, and the public. In 2023, our "Team Safety" program continued initiatives to provide a safe
environment and safe working conditions as reflected in our policies and procedures.
Government Regulation
Business Regulations
The industry in which we operate is subject to extensive federal, state, and local regulations, including educational,
health care, data privacy and security, transportation, telecommunications, and safety regulations, which are
administered by many governmental and regulatory authorities. Some of the regulations are unique to the corrections
industry, and some target private, for-profit entities by imposing location requirements, compliance requirements,
elevated litigation risk and financial penalties only on private, for-profit correction and detention providers. Facility
management contracts typically include specific staffing requirements, reporting requirements, supervision, and on-
site monitoring by representatives of the contracting governmental agencies. Corrections and reentry personnel are
customarily required to meet certain training standards and, in some instances, facility personnel are required to be
licensed and subject to background investigation. Certain jurisdictions also require us to award subcontracts on a
competitive basis or to subcontract with certain types of businesses, such as small businesses and businesses owned
by members of minority groups. Our facilities are also subject to operational and financial audits by the governmental
agencies with which we have contracts. In addition, our technological infrastructure is required by federal agencies
to undergo a security compliance audit and provide security logs on a monthly basis. Failure to comply with these
regulations and contract requirements can result in material penalties or non-renewal or termination of facility
management contracts which could have a material effect on our financial position, results of operations and cash
flows, or on our competitive position as a dependable government partner.
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Environmental Matters
Under various federal, state, and local environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on,
under, or in such property. Such laws often impose liability whether or not the owner or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances. As an owner of real estate assets and as the result
of our operation and management of correctional, detention, and residential reentry facilities, we have been, and
continue to be, subject to these laws, ordinances, and regulations. Phase I environmental assessments have been
obtained on substantially all of the properties we currently own. We are not aware of any environmental matters that
are expected to materially affect our financial condition or results of operations; however, if such matters are detected
in the future, the costs of complying with environmental laws could have a material effect on our financial position,
results of operations and cash flows, or on our competitive position as a dependable government partner.
Privacy and Security Requirements
The Health Insurance Portability and Accountability Act of 1996, as amended and implementing regulations, or
HIPAA, require covered entities, which include most health care providers, to protect the privacy and security of
individually identifiable health information, known as “protected health information” and establish individual rights
related to understanding and controlling how health information is used or disclosed. In the event of breaches of
unsecured protected health information, covered entities must notify affected individuals, the U.S. Department of
Health and Human Services, or DHHS, and, in certain situations involving large breaches, the media. Additionally,
we are subject to complex and evolving U.S. federal and state privacy laws and regulations, including those pertaining
to the processing of personal data, such as the California Consumer Privacy Act, as amended by the California Privacy
Rights Act and similar laws in Colorado and Virginia.
Healthcare providers are also subject to a growing number of requirements intended to promote the interoperability
and exchange of patient health information, including information blocking restrictions that prohibit practices that are
likely to interfere with the access, exchange or use of electronic health information, with limited exceptions.
For additional information regarding data privacy and other risks related to our business, see Item 1A. Risk Factors—
Risks Related to Our Business and Industry—The failure to comply with data privacy, security and exchange legal
requirements could have a material adverse impact on our business, financial position, results of operations, cash
flows and reputation.
Insurance
We maintain general liability insurance for all the facilities we operate, as well as insurance in amounts we deem
adequate to cover property and casualty risks, employee health, workers' compensation, automobile liability,
cybersecurity, and directors and officers liability. In addition, each of our leases with third parties provides that the
lessee will maintain insurance on each leased property under the lessee's insurance policies providing for the following
coverages: (i) fire, vandalism, and malicious mischief, extended coverage perils, and all physical loss perils; (ii)
comprehensive general public liability (including personal injury and property damage); and (iii) workers'
compensation. Under each of these leases, we have the right to periodically review our lessees' insurance coverage
and provide input with respect thereto.
Each of our management contracts and the statutes of certain states require the maintenance of insurance with some
states imposing insurance requirements specific to private corrections and detention providers as a requirement for
continued operation. Because we are significantly self-insured for employee health, workers' compensation,
automobile liability, and general liability insurance, the amount of our insurance expense is dependent on claims
experience, and our ability to control our claims experience. Our insurance policies contain various deductibles and
stop-loss amounts intended to limit our exposure for individually significant occurrences. However, the nature of our
self-insurance policies provides little protection for deterioration in overall claims experience or an increase in medical
costs. We are continually developing strategies to improve the management of our future loss claims but can provide
no assurance that these strategies will be successful. However, unanticipated additional insurance expenses resulting
from adverse claims experience or an increasing cost environment for general liability and other types of insurance
could adversely impact our results of operations and cash flows.
37
Competition
The correctional, detention, and residential reentry facilities we own, operate, or manage, as well as those facilities
we own but are managed by other operators, are subject to competition for offenders and residents from other private
operators. We compete primarily on the basis of bed availability, cost, the quality and range of services offered, our
experience in the design, construction, and management of correctional and detention facilities, and our reputation.
We compete with government agencies that are responsible for correctional, detention, and residential reentry facilities
and a number of companies, including, but not limited to, The GEO Group, Inc. and Management and Training
Corporation. We also compete in some markets with small local companies that may have a better knowledge of the
local conditions and may be better able to gain political and public acceptance. Other potential competitors may in the
future enter into businesses competitive with us without a substantial capital investment or prior experience. We may
also compete in the future for acquisitions and new development projects with companies that have more financial
resources than we have or those willing to accept lower returns than we are willing to accept. Competition by other
companies may adversely affect occupancy at our facilities, which could have an adverse impact on the operating
revenue of our facilities. In addition, revenue derived from our facilities will be affected by a number of factors,
including the demand for beds, general economic conditions, and the age of the general population.
ITEM 1A. RISK FACTORS.
As the owner and operator of correctional, detention, and residential reentry facilities, we are subject to certain risks
and uncertainties associated with, among other things, the corrections and detention industry and pending or threatened
litigation in which we are involved. In addition, we are also currently subject to risks associated with real estate
ownership, our indebtedness, as well as our qualification as a REIT for federal income tax purposes for those years
we elected REIT status. The risks and uncertainties set forth below could cause our actual results to differ materially
from those indicated in the forward-looking statements contained herein and elsewhere. The risks described below
are not the only risks we face. Additional risks and uncertainties not currently known to us or those we currently deem
to be immaterial may also materially and adversely affect our business operations. Any of the following risks could
materially adversely affect our business, financial condition, or results of operations.
Risks Related to Our Business and Industry
Resistance to privatization of correctional, detention, and residential reentry facilities, and negative publicity
regarding inmate disturbances or perceived poor operational performance, could result in our inability to obtain
new contracts, the loss of existing contracts, or other unforeseen consequences.
Privatization of correctional, detention, and residential reentry facilities has not achieved complete acceptance by
either government agencies or the public at large. The operation of correctional, detention, and residential reentry
facilities by private entities has encountered resistance from certain groups, such as labor unions, prison reform
organizations, activists and others that believe that correctional, detention, and residential reentry facilities should
only be operated by governmental agencies. Any political platform or promise, governmental agency report,
investigation or inquiry, public statement by any governmental agency, policy or legislative change, or other similar
occurrence or action, that seeks to, or purports to, prohibit, eliminate, or otherwise restrict or limit in any way, the
federal government’s (or any state or local government’s) ability to contract with private operators of correctional,
detention, and residential reentry facilities, could negatively impact our growth and our ability to renew or maintain
existing contracts or to obtain new contracts and could have a material adverse effect on our business, financial
condition, results of operations or the market price of our common stock.
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On January 26, 2021, President Biden issued the Private Prison EO. The Private Prison EO directs the Attorney
General to not renew DOJ contracts with privately operated criminal detention facilities. Two agencies of the DOJ,
the BOP and the USMS, utilize our services. The BOP houses inmates who have been convicted, and the USMS is
generally responsible for detainees who are awaiting trial. The BOP has experienced a steady decline in inmate
populations over the last decade, a trend that was accelerated by the COVID-19 pandemic. Our remaining prison
contract with the BOP at the 1,978-bed McRae Correctional Facility expired on November 30, 2022 and was not
renewed. Following the non-renewal of the BOP contract in 2022 and our sale of the McRae facility to the state of
Georgia in August 2022, we no longer operate any prison contracts for the BOP. The Private Prison EO only applies
to agencies that are part of the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Private
Prison EO, as ICE is an agency of the DHS, not the DOJ. For the year ended December 31, 2023, USMS and ICE
accounted for 21% ($400.4 million) and 30% ($565.5 million), respectively, of our total revenue. For the year ended
December 31, 2022, USMS and ICE accounted for 22% ($403.9 million) and 29% ($527.3 million), respectively, of
our total revenue. For the year ended December 31, 2021, USMS and ICE accounted for 23% ($433.6 million) and
30% ($552.2 million), respectively, of our total revenue.
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
Immigration reform laws are currently a focus for legislators and politicians at the federal, state, and local level.
Legislation has been passed in California, Colorado, and New Jersey, where we operate detention facilities, as well as
Maryland, Illinois, Oregon and Washington, that prohibits state and local agencies from contracting to detain
immigrants in ICE custody. In addition, legislation has been proposed in New Mexico, a state in which we own
facilities, that would prohibit state and local agencies from contracting to detain immigrants in ICE custody. While
recent court decisions in California and New Jersey have struck down these restrictions as to direct contracts between
ICE and private companies, restrictions on state and local agency contracts to detain immigrants in ICE custody
generally remain in place in the states where such laws have been passed.
In addition, negative publicity regarding offenders escaping, rioting or any other disturbances at our facilities or any
public perception of poor operational performance at our facilities, contract non-compliance, or other conditions
(including disease outbreaks at the facilities we own and manage) at a privately managed facility may result in adverse
publicity to us and the private corrections industry in general and could negatively impact our growth and our ability
to renew or maintain existing contracts or to obtain new contracts, which could have an adverse impact on our business,
reputation, financial condition, results of operations or the market price of our common stock.
We are subject to fluctuations in occupancy levels, and a decrease in occupancy levels could cause a decrease in
revenues and profitability.
While a substantial portion of our cost structure is fixed, a substantial portion of our revenue is generated under facility
ownership and management contracts that specify per diem payments based upon daily or minimum guaranteed
occupancy levels. We are dependent upon the governmental agencies with which we have contracts to provide
offenders for facilities we operate. We cannot control occupancy levels at the facilities we operate. We do not lobby
or advocate for any policies that determine the basis for or duration of an individual's incarceration or detention. Under
a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenue and profitability. For
the years 2023, 2022, and 2021, the average compensated occupancy of our facilities, based on rated capacity, was
72%, 70%, and 72%, respectively, for all of the facilities we operated, exclusive of facilities that are leased to third-
party operators where our revenue is generally not based on daily occupancy. Occupancy rates may, however, decrease
below these levels in the future. When combined with relatively fixed costs for operating each facility, a decrease in
occupancy levels could have an adverse impact on our profitability.
39
We are dependent on government appropriations, and our results of operations may be negatively affected by
governmental budgetary challenges or government shutdowns.
Our cash flow is subject to the receipt of sufficient funding of, and timely payment by, contracting governmental
entities. If the appropriate governmental agency does not receive sufficient appropriations to cover its contractual
obligations, it may terminate our contract or delay or reduce payment to us. While we have historically been required
to continue to perform under our government contracts during government shutdowns, we are generally not paid until
the government reopens. Any delays in payment, or the termination of a contract, could have an adverse effect on our
results of operations, cash flow and financial condition. In addition, federal, state and local governments are constantly
under pressure to control additional spending or reduce current levels of spending. In prior years, these pressures have
been compounded by economic downturns. Accordingly, we have been requested and may be requested in the future
to reduce our existing per diem contract rates or forego prospective increases to those rates. Further, our government
partners could reduce offender population levels in facilities we own or manage to contain their correctional costs. In
addition, it may become more difficult to renew our existing contracts on favorable terms or otherwise.
Efforts to reduce the U.S. federal deficit could adversely affect our liquidity, results of operations and financial
condition.
Any reductions in government spending in an effort to reduce the U.S. federal deficit could result in a reduction in the
utilization of our services or additional pricing pressure. Further, there is ongoing uncertainty regarding the federal
budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S.
government default on its debt could have broad macroeconomic effects that could, among other things, raise our
borrowing costs. Any future shutdown of the federal government or failure to enact annual appropriations could also
have a material adverse impact on our liquidity, results of operations and financial condition.
Competition may adversely affect the profitability of our business.
We compete with government entities and other private operators on the basis of bed availability, cost, quality and
range of services offered, experience in designing, constructing, and managing facilities, and reputation of
management and personnel. While there are barriers to entering the market for the ownership and management of
correctional, detention, and residential reentry facilities, these barriers may not be sufficient to limit additional
competition. In addition, our government customers may assume the management of a facility that they own and we
currently manage for them upon the termination of the corresponding management contract or, if such customers have
capacity at their facilities, may take offenders and residents currently cared for in our facilities and transfer them to
government-run facilities. Since we are paid on a per diem basis with no minimum guaranteed occupancy under most
of our contracts, the loss of such offenders and residents, and the resulting decrease in occupancy, would cause a
decrease in our revenues and profitability.
We are subject to terminations, non-renewals, or competitive re-bids of our government contracts.
We typically enter into facility contracts with governmental entities for terms of up to five years, with additional
renewal periods at the option of the contracting governmental agency. Notwithstanding any contractual renewal
option of a contracting governmental agency, 32 of our facility contracts with the customers listed under "Business –
Facility Portfolio" are currently scheduled to expire on or before December 31, 2024 but have renewal options (25),
or are currently scheduled to expire on or before December 31, 2024 and have no renewal options (7). Although we
generally expect these customers to exercise renewal options or negotiate new contracts with us, one or more of these
contracts may not be renewed and we may not be able to negotiate a new contract on favorable terms or at all with the
corresponding governmental agency. In addition, these and any other contracting agencies may determine not to
exercise renewal options with respect to any of our contracts in the future. Our government partners can also re-bid
contracts in a competitive procurement process upon termination or non-renewal of our contract. Competitive re-bids
may result from the expiration of the term of a contract, including the initial term and any renewal periods, or the early
termination of a contract. Competitive re-bids are often required by applicable federal or state procurement laws
periodically in order to further competitive pricing and other terms for the government agency. The aggregate revenue
40
earned during the year ended December 31, 2023 for the 32 contracts with scheduled maturity dates, notwithstanding
contractual renewal options, on or before December 31, 2024 was $642.9 million, or 34% of total revenue.
As stated above, the Private Prison EO directs the Attorney General to not renew DOJ contracts with privately operated
criminal detention facilities. Two agencies of the DOJ, the BOP and the USMS, utilize our services. The BOP houses
inmates who have been convicted, and the USMS is generally responsible for detainees who are awaiting trial. The
BOP has experienced a steady decline in inmate populations over the last decade, a trend that was accelerated by the
COVID-19 pandemic. Our remaining prison contract with the BOP at the 1,978-bed McRae Correctional Facility
expired on November 30, 2022 and was not renewed. The Private Prison EO only applies to agencies that are part of
the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Private Prison EO, as ICE is an
agency of the DHS, not the DOJ. For the year ended December 31, 2023, USMS and ICE accounted for 21% ($400.4
million) and 30% ($565.5 million), respectively, of our total revenue.
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
On December 6, 2022, we received notice from the CDCR, of its intent to terminate the lease agreement for our 2,560-
bed California City Correctional Center by March 31, 2024, due to the state's declining inmate population. As part of
its annual budget process for the fiscal year ending June 30, 2024, the California legislature approved funding for the
lease through March 31, 2024. We have engaged with the state of California regarding the continued utilization of our
California City facility by the CDCR. However, we can provide no assurance that we will be successful in reaching
an agreement for the utilization of the facility beyond March 31, 2024. We are also marketing the facility to other
potential customers. Rental revenue generated from the CDCR at the California City facility was $31.1 million, $34.0
million, and $33.3 million for 2023, 2022, and 2021, respectively. Facility net operating income at the facility was
$25.5 million, $27.9 million and $27.4 million for 2023, 2022, and 2021, respectively.
Governmental agencies typically may terminate a facility contract at any time without cause or use the possibility of
termination to negotiate a lower per diem rate. In the event any of our contracts are terminated or are not renewed on
favorable terms or otherwise, we may not be able to obtain additional replacement contracts. The non-renewal,
termination, renegotiation or competitive re-bid of any of our contracts with governmental agencies could materially
adversely affect our financial condition, results of operations and liquidity, including our ability to secure new facility
contracts from others.
Based on information available as of the date of this Annual Report, other than the previously mentioned lease
agreement with the CDCR for our California City facility, we believe we will renew all other contracts with our
government partners that have expired or are scheduled to expire within the next twelve months that could have a
material adverse impact on our financial statements. We believe our renewal rate on existing contracts remains high
due to a variety of reasons including, but not limited to, the constrained supply of available beds within the U.S.
correctional system, our ownership of the majority of the beds we operate, and the cost effectiveness of the services
we provide. However, we can provide no assurance that we will continue to achieve high renewal rates in the future.
41
Our ability to secure new contracts to develop and manage correctional, detention, and residential reentry facilities
depends on many factors outside our control.
Our growth is generally dependent upon our ability to obtain new contracts to develop and manage correctional,
detention, and residential reentry facilities. This possible growth depends on a number of factors we cannot control,
including crime rates and sentencing patterns in various jurisdictions, governmental budgetary constraints, and
governmental and public acceptance of the privatization of correctional, detention, and reentry facilities. The demand
for our facilities and services could be adversely affected by the relaxation of enforcement efforts, the expansion of
alternatives to incarceration and detention, leniency in conviction or parole standards and sentencing practices through
the decriminalization of certain activities that are currently proscribed by criminal laws. For instance, any changes
with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested,
convicted, and sentenced, thereby potentially reducing demand for correctional or detention facilities to house them.
Immigration reform laws are an ongoing focus for legislators and politicians at the federal, state, and local level.
Legislation has also been proposed in numerous jurisdictions that could lower minimum sentences for some non-
violent crimes and make more inmates eligible for early release based on good behavior. On December 21, 2018,
President Trump signed legislation, known as The First Step Act, that reduces sentences for first-time offenders in
possession of a gun when committing a crime, eliminates mandating life-time sentences for three-time offenders,
provides judges more discretion in crafting sentences for some drug-related offenses, and allows offenders to seek a
retroactive reduction in sentences affected by the disparity in the sentences for crack and powder cocaine cases
narrowed by the Fair Sentencing Act of 2010. Although, under long-standing policy, CoreCivic does not draft, lobby
for, promote, or in any way take a position on policies that determine the basis or duration of an individual's
incarceration or detention, CoreCivic supported adoption of The First Step Act because the legislation aligns with our
publicly stated commitment to advocate for a range of recidivism-reducing policies by providing additional resources
to help ensure that incarcerated individuals are given the best possible chance to successfully return to their
communities and stay out of prison. Also, the expansion of alternatives to incarceration and detention, such as
electronic monitoring or the use of other technologies, may reduce the number of offenders who would otherwise be
incarcerated or detained. Similarly, reductions in crime rates, increases in resources dedicated to preventing crime,
reduced funding for law enforcement, or strained law enforcement resources could lead to a reduction in arrests, which
could lead to a decrease in convictions and sentences requiring incarceration at correctional facilities.
Moreover, certain jurisdictions may require successful bidders to make a significant capital investment in connection
with the financing of a particular project. We may compete for such projects with companies that have more financial
resources than we have. Further, we may not be able to obtain capital resources with favorable terms, if at all, when
needed. A prolonged downturn in the financial capital markets or in our stock price could make it more difficult to
obtain capital resources at favorable rates of return or obtain capital resources at all.
We may face community opposition to facility location, which may adversely affect our ability to obtain new
contracts.
Our success in obtaining new awards and contracts sometimes depends, in part, upon our ability to locate land that
can be leased or acquired, on economically favorable terms, by us or other entities working with us in conjunction
with our proposal to construct and/or manage a facility. Some locations may be in or near populous areas and,
therefore, may generate legal action or other forms of opposition from residents in areas surrounding a proposed site.
When selecting project sites, we attempt to conduct business in communities where local leaders and residents
generally support the establishment of a privatized correctional, detention, or residential reentry facility. Even if we
identify sites where local leaders and residents generally support the establishment of a correctional, detention, or
residential reentry facility, whether to be publicly or privately operated, such endeavors may still face resistance by
broader groups to facilities perceived as supporting over-incarceration. Therefore, future efforts to find suitable host
communities may not be successful. We may incur substantial costs in evaluating the feasibility of the development
of a correctional, detention, or residential reentry facility. As a result, we may report significant charges if we decide
to abandon efforts to develop a correctional, detention, or residential reentry facility on a particular site. Further, in
many cases, the site selection is made by the contracting governmental entity. In such cases, site selection may be
made for reasons related to political and/or economic development interests and may lead to the selection of sites that
have less favorable environments.
42
We may incur significant start-up and operating costs on new contracts before receiving related revenues, which
may impact our cash flows and not be recouped.
When we are awarded a contract to provide or manage a facility, we may incur significant start-up and operating
expenses, including the cost of constructing the facility, purchasing equipment and staffing the facility, before we
receive any payments under the contract. We may also experience a disruption in cash flows when transitioning from
one contract to another. For example, during 2022, as a result of a new contract award from the state of Arizona for
up to 2,706 inmates, we transitioned the population at our 3,060-bed La Palma Correctional Center from ICE detainees
to inmates from the state of Arizona, which resulted in the disruption of earnings and cash flows during the transition
period. Further, due to higher staffing level requirements under the management contract with Arizona, combined
with a challenging labor market, we expect the disruption at this facility will continue until we stabilize the operating
expense structure by reducing incremental expenses associated with temporary staffing, which we have recently begun
to experience. Disruptions like these could result in a significant reduction in our cash reserves and may make it more
difficult for us to meet other cash obligations. In addition, a contract may be terminated prior to its scheduled
expiration, and as a result, we may not recover these expenditures or realize any return on our investment.
Government agencies may investigate and audit our contracts and operational performance, and if any deficiencies
or improprieties are found, we may be required to cure those deficiencies or improprieties, refund revenues we
have received, or forego anticipated revenues, and we may be subject to penalties and sanctions, including contract
termination and prohibitions on our bidding in response to Requests for Proposals.
Governmental agencies with which we contract have the authority to audit and investigate our contracts with them.
As part of that process, government agencies may review our performance of the contract, our pricing practices, our
cost structure and our compliance with applicable performance requirements, laws, regulations and standards. The
regulatory and contractual environment in which we operate is complex and many aspects of our operations remain
subject to manual processes and oversight that make compliance monitoring difficult and resource intensive. A
governmental agency audit, review or investigation could result in a request to cure a performance or compliance
issue, and if we are unable to, or otherwise fail to do so, the failure could lead to the imposition of monetary penalties
or revenue deductions, or the termination of the contract in question and/or other contracts that we have with that
governmental agency. Similarly, for contracts that actually or effectively provide for certain reimbursement of
expenses, if an agency determines that we have improperly allocated costs to a specific contract, we may not be
reimbursed for those expenses, and we could be required to refund the amount of any such expenses that have been
reimbursed or pay liquidated damages. If a government audit asserts improper or illegal activities by us, we may be
subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of
profits, suspension of payments, fines and suspension or disqualification from doing business with certain government
entities. In addition to the potential civil and criminal penalties and administrative sanctions, any adverse
determination with respect to contractual or regulatory violations could negatively impact our reputation and our
ability to bid in response to Requests for Proposals, or RFPs, in one or more jurisdictions.
43
Failure to comply with facility contracts or with unique and increased governmental regulation could result in
material penalties or non-renewal or termination of noncompliant contracts or our other contracts to provide or
manage correctional, detention, and residential reentry facilities.
The industry in which we operate is subject to extensive federal, state, and local regulations, including educational,
environmental, health care, data privacy, transportation, telecommunications, and safety regulations, which are
administered by many regulatory authorities. Some of the regulations are unique to the corrections industry, some
target private, for-profit entities by imposing location requirements, compliance requirements, elevated litigation risk
and financial penalties only on private, for-profit correction and detention providers, and some are unique to
government contractors. The combination of regulations we face is unique and complex. Facility management
contracts typically include reporting requirements, supervision, and on-site monitoring by representatives of the
contracting governmental agencies. Corrections and reentry personnel are customarily required to meet certain
training standards and, in some instances, facility personnel are required to be licensed and subject to background
investigation. Certain jurisdictions also require us to award subcontracts on a competitive basis or to subcontract with
certain types of businesses, such as small businesses and businesses owned by members of minority groups. Our
facilities are also subject to operational and financial audits by the governmental agencies with which we have
contracts. Federal regulations also require federal government contractors like us to self-report evidence of certain
forms of misconduct. We may not always successfully comply with these regulations and contract requirements, and
failure to comply can result in material penalties, including financial penalties, non-renewal or termination of
noncompliant contracts and/or our other facility contracts, exclusion from new contract procurement or RFP bidding,
and suspension or debarment from contracting with certain government entities.
In addition, private prison managers are subject to government legislation and regulation attempting to restrict the
ability of private prison managers to house certain types of inmates, such as inmates from other jurisdictions or inmates
at medium or higher security levels. Legislation has been enacted in several states, and has previously been proposed
in the United States Congress, containing such restrictions. Such legislation, if enacted, could have an adverse effect
on us.
There also has been increasing focus by U.S. and foreign government authorities on environmental matters, such as
climate change, the reduction of greenhouse gases and water consumption. In particular, the State of California
recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will
impose broad climate-related disclosure obligations on certain companies doing business in California, starting in
2026. The SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if
adopted, could significantly increase compliance burdens, associated regulatory costs, and complexity. New or revised
laws and regulations or new interpretations of existing laws and regulations, such as those related to climate change,
could affect the operation of our properties or result in significant additional expense and restrictions on our business
operations.
Our inmate transportation subsidiary, TransCor, is subject to regulations promulgated by the Departments of
Transportation and Justice. TransCor must also comply with the Interstate Transportation of Dangerous Criminals
Act of 2000, which covers operational aspects of transporting prisoners, including, but not limited to, background
checks and drug testing of employees; employee training; employee hours; staff-to-inmate ratios; prisoner restraints;
communication with local law enforcement; and standards to help ensure the safety of prisoners during transport. Any
changes in such regulations could result in an increase in the cost of our transportation operations.
From time to time, we enter into agreements with telecommunications providers to provide telephone services to
residents in our facilities. Although we are not a telecommunications provider, these services are subject to regulations
which may change from time to time. We are subject to the direct and indirect effects of these regulations.
Non-compliance with these regulations, either by us or by our telecommunications providers, subjects us to risks
which could result in increases to our costs or decreases in our revenue. The impact to our revenue is limited because
a significant amount of commissions paid by our telecommunications providers is passed along to our customers or is
reserved and must be used for the benefit of offenders in our care.
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The failure to comply with data privacy, security and exchange legal requirements could have a material adverse
impact on our business, financial position, results of operations, cash flows and reputation.
We are subject to complex and evolving U.S. federal and state privacy laws and regulations, which sometimes conflict
among the various jurisdictions where we do business. For example, we are subject to HIPAA, which requires us to
protect the privacy and security of individually identifiable health information, known as “protected health
information” and recognize individual rights related to understanding and controlling how health information is used
or disclosed. Various states, including California, Colorado, Virginia and New Jersey, have passed laws pertaining to
the processing of personal data that require companies, including us, to provide new disclosures and options to such
persons about data collection, use and sharing practices. Some of these laws are already in effect, while others will go
into effect during 2024 and 2025. HIPAA and state laws require us to report data breaches to affected individuals,
government regulators, and in certain cases involving large breaches, the media. Further, the U.S. federal government
and a significant number of additional states are considering expanding or passing privacy laws in the near term. We
are also subject to increasing legal requirements with respect to the use of artificial intelligence and machine learning
applications and tools (including in relation to hiring and employment practices) and biometric information. These
legal requirements are rapidly changing and are subject to uncertain application, interpretation and enforcement
standards.
The increasingly complex, restrictive and rapidly evolving regulatory environment at the federal and state level related
to data privacy and data protection, including protected health information, may require significant continued effort
and cost, changes to our business and data processing practices and impact our ability to obtain and use data. These
laws provide for civil penalties for violations, and some confer a private right-of-action to certain individuals for data
breaches. Federal and state regulatory bodies, including the Federal Trade Commission and the California Privacy
Protection Agency are engaging in enforcement investigations and actions with respect to privacy and data
protection. There is no assurance that our security controls, training of employees on data privacy and data security,
and policies, procedures and practices will prevent the improper use or disclosure of personal data. Our inability to
adapt or comply with such legal requirements, or the improper use or disclosure of personal data in violation of data
privacy laws could harm our reputation, cause loss of consumer confidence, subject us to government enforcement
actions, or result in private litigation against us, which could result in loss of revenue, increased costs, liability for
monetary damages, fines and/or criminal prosecution, all of which could have a material adverse impact on our
business, financial position, results of operations and cash flows.
We depend on a limited number of governmental customers for a significant portion of our revenues.
We currently derive, and expect to continue to derive, a significant portion of our revenues from a limited number of
governmental agencies. The three primary federal governmental agencies with correctional and detention
responsibilities, ICE, the USMS, and the BOP accounted for 52% of our total revenues for the year ended December
31, 2023 ($995.0 million). For the year ended December 31, 2023, ICE, USMS, and the BOP accounted for 30%
($565.5 million), 21% ($400.4 million), and 2% ($29.1 million), respectively, of our total revenue. Although the
revenue generated from each of these agencies is derived from numerous management contracts and various types of
properties, i.e. correctional, detention, and reentry, the loss or substantial reduction in value of one or more of such
contracts could have a material adverse impact on our financial condition, results of operations, and cash flows. We
expect to continue to depend upon federal agencies, including ICE and the USMS, and a relatively small group of
other governmental customers for a significant percentage of our revenues.
Additionally, the Private Prison EO directs the Attorney General to not renew DOJ contracts with privately operated
criminal detention facilities. Two agencies of the DOJ, the BOP and the USMS, utilize our services. The BOP houses
inmates who have been convicted, and the USMS is generally responsible for detainees who are awaiting trial. The
BOP has experienced a steady decline in inmate populations over the last decade, a trend that was accelerated by the
COVID-19 pandemic. Our remaining prison contract with the BOP at the 1,978-bed McRae Correctional Facility
expired on November 30, 2022 and was not renewed. The Private Prison EO only applies to agencies that are part of
the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Private Prison EO, as ICE is an
agency of the DHS, not the DOJ. For the year ended December 31, 2023, USMS and ICE accounted for 21% ($400.4
million) and 30% ($565.5 million), respectively, of our total revenue.
45
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
Revenue from our South Texas Family Residential Center, a facility that we believe is unique in its design and
operation, was $156.6 million in 2023, $156.5 million in 2022, and $159.9 million in 2021. The loss or reduction in
value of this contract, whether due to change in mission, legal challenges, or change in government policy, could have
an adverse impact on our financial condition, results of operations, and cash flows.
We are dependent upon our senior management and our ability to attract and retain sufficient qualified personnel.
The success of our business depends in large part on the ability and experience of our senior management. The
unexpected loss of any of these persons could materially adversely affect our business and operations.
In addition, the services we provide are labor-intensive. The success of our business, and our ability to satisfy the
staffing and operational performance requirements of our contracts, require that we attract, hire, develop and retain
sufficient qualified personnel. When we are awarded a facility management contract or open a new facility, we must
hire operating management, correctional officers, and other personnel. Our inability to hire sufficient qualified
personnel on a timely basis, or experiencing excessive turnover or the loss of significant personnel at existing facilities,
could adversely affect our business and operations. Many of our contracts include specific staffing requirements, and
our failure to satisfy such requirements may result in the imposition of financial penalties or loss of contract. Staffing
challenges have recently been exacerbated by labor shortages in the marketplace.
We have experienced labor shortages and wage pressures in many markets across the country, and have provided
customary inflationary wage increases to remain competitive. The challenges of recruiting and retaining staff,
including nursing, has been and could continue to be exacerbated by the current labor market. Further, we have
incurred incremental expenses to help ensure sufficient staffing levels under unique and challenging working
conditions. These incremental investments have enabled us to increase overall staffing levels.
We achieved higher staffing levels during 2023 when compared to 2022 and, correspondingly, we were able to reduce
our use of temporary incentives by $9.8 million as we began to see improvement in our attraction and retention of
facility staff in this challenging labor market. We believe these investments in our workforce have positioned us to
manage the increased number of residents we have begun to experience now that the remaining occupancy restrictions
caused by the COVID-19 pandemic, most notably Title 42, have been removed. We have continued to invest in staffing
resources during 2023, which has resulted in additional compensation and incremental expenses, and we expect to
continue to invest in staffing resources in future quarters, which may result in additional compensation and incremental
expenses. Incremental expenses include, but may not be limited to, incentive payments to our front-line and field
staff, temporary employee housing expenses and other travel related reimbursements, additional paid time off, off-
cycle wage increases in certain markets to remain competitive, and registry nursing expenses. As the labor market
improves and labor shortages and wage pressures are alleviated, which we believe will take some additional time, we
expect to further reduce our reliance on these temporary incentives. While we have achieved recent successes, the
benefits of our investments in staffing may not be sustained, and labor shortages could intensify again in the future,
which could adversely affect our results of operations, financial condition and cash flows.
To the extent federal and state agencies with oversight in areas where we operate review and adopt more permanent
measures to address the continuing and future potential threat of airborne infections in work environments, it is
possible that compliance with future mandates may impose additional compliance and other costs. The requirements
could also result in attrition, including attrition of qualified personnel, and difficulty securing future labor needs, which
could materially and adversely affect our results of operations, financial condition and cash flows.
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We are subject to various types of litigation.
Legal proceedings related to, and adverse developments in our relationship with, our employees could adversely affect
our business, financial condition or results of operations. We and our subsidiaries are party to a variety of claims and
legal proceedings in the ordinary course of business, including but not limited to claims and legal proceedings related
to employment matters. Because the resolution of claims and legal proceedings is inherently uncertain, there can be
no assurance we will be successful in defending against such claims or legal proceedings, or that management's
assessment of the materiality of these matters, including the reserves taken in connection therewith, will be consistent
with the ultimate outcome of such claims or legal proceedings. In the event management's assessment of materiality
of current claims and legal proceedings proves inaccurate or litigation that is material arises in the future, the resolution
of such matters may have an adverse impact on our business, financial condition or results of operations.
As of December 31, 2023, we employed 11,694 full- and part-time employees, including employees with our
transportation and electronic monitoring subsidiaries, TransCor and Recovery Monitoring Solutions Corporation,
respectively. Approximately 1,860 of our employees at 12 of our facilities, or approximately 15.9% of our workforce,
are represented by labor unions. All of our collective bargaining agreements contain no-strike clauses that bind the
unions and the bargaining unit employees. Work stoppages at any of our facilities are exceedingly rare. In the opinion
of management, overall employee relations are good. New executive orders, administrative rules and changes in
National Labor Relations could increase organizing activity at locations where employees are currently not represented
by a labor organization. Increases in organizational activity or any future work stoppages could have an adverse impact
on our business, financial condition, or results of operations.
We are subject to legal proceedings associated with owning and managing correctional, detention, and residential
reentry facilities. Our ownership and management of correctional, detention, and residential reentry facilities, and the
provision of inmate transportation services by a subsidiary, expose us to potential third-party claims or litigation by
prisoners or other persons relating to personal injury, illness, or other damages resulting from contact with a facility,
its managers, personnel or other prisoners, including damages arising from a prisoner's escape from, or a disturbance
or riot at, a facility we own or manage, from the misconduct of our employees, or the failure to prevent or detect the
introduction of contraband and prohibited substances. To the extent the events serving as a basis for any potential
claims are alleged or determined to constitute illegal or criminal activity, we could also be subject to criminal liability.
Such liability could result in significant monetary fines and could affect our ability to bid on future contracts and retain
our existing contracts. In addition, as an owner of real property, we may be subject to a variety of proceedings relating
to personal injuries of persons at such facilities. The claims against our facilities may be significant and may not be
covered by insurance. Even in cases covered by insurance, our deductible (or self-insured retention) may be
significant.
We are subject to necessary insurance costs.
Workers' compensation, auto liability, employee health, and general liability insurance represent significant costs to
us. Because we are significantly self-insured for workers' compensation, auto liability, employee health, and general
liability risks, the amount of our insurance expense is dependent on claims experience, our ability to control our claims
experience, and in the case of workers' compensation and employee health, rising health care costs in general.
Unanticipated additional insurance costs could adversely impact our results of operations and cash flows, and the
failure to obtain or maintain any necessary insurance coverage could have an adverse impact on us.
We may be adversely affected by inflation.
Many of our facility contracts provide for fixed fees or fees that increase by only small amounts during their terms.
If, due to inflation or other causes, our operating expenses, such as wages and salaries of our employees, insurance,
medical, and food costs, increase at rates faster than increases, if any, in our revenues, then our profitability would be
adversely affected. We have experienced increases in personnel costs and expect the labor market to remain
challenging, which could have a material adverse effect on our operations. See "Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations and Management's
Discussion and Analysis of Financial Condition and Results of Operations – Inflation."
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We depend in part on the performance and capabilities of third parties with whom we have commercial
relationships.
We maintain business relationships with key partners, suppliers, channel partners and other parties that have
complementary products, services or skills. We depend, in part, on the performance and capabilities of these third
parties and on the financial condition of, and our relationship with, distributors and other indirect channel partners,
which can affect our capacity to effectively and efficiently serve current and potential government partners. We depend
on these third parties and suppliers to also protect themselves from the risks of cybersecurity to ensure timely delivery
of products and services we procure. Additionally, cost inflation and supply chain disruptions may lead to higher
labor and other costs, as well as an inability to procure products needed to deliver the services we provide, which
could adversely affect our results of operations.
Technological changes or negative changes in the level of acceptance of, or resistance to, the use of electronic
monitoring products could cause our electronic monitoring products and other technology to become obsolete or
require the redesign of our electronic monitoring products, which could have an adverse effect on our business.
Technological changes within our electronic monitoring business may require us to expend resources in an effort to
acquire, maintain and/or utilize new electronic monitoring products and technology. We may not be able to anticipate
or respond to technological changes in a timely manner, and our response may not result in successful electronic
monitoring product offerings. If we are unable to anticipate or timely respond to technological changes, our business
could be adversely affected. Further, our business could be adversely affected if the level of acceptance of or resistance
to the use of electronic monitoring products and services by governmental customers were to change over time in a
negative manner so that governmental customers decide to decrease their usage levels and contracting for electronic
monitoring products and services.
We depend on a limited number of third parties to manufacture and supply our electronic monitoring products. If
our suppliers cannot provide the products or services we require in a timely manner and with such quality as we
expect, our ability to market and sell our electronic monitoring products and services could be harmed.
If our suppliers fail to supply, in a timely manner, electronic monitoring products that meet our quantity, quality, cost
requirements, or technical specifications, we may not be able to access alternative sources of these products within a
reasonable period of time or at commercially reasonable rates. A reduction or interruption in the supply of such
products, or a significant increase in the price of such products, including as a result of supply chain delays, could
have an adverse impact on our marketing and sales initiatives, which could adversely affect our financial condition
and results of operations. In addition, contracts with such suppliers may not continue to be available on acceptable
terms or at all.
We may be subject to costly product liability claims from the use of our electronic monitoring products, which could
damage our reputation, impair the marketability of our products and services and force us to pay costs and damages
that may not be covered by adequate insurance.
The operation of our electronic monitoring products and services entails a risk of product liability. We could be subject
to product liability claims to the extent these electronic monitoring products fail to perform as intended. Even
unsuccessful claims against us could result in the expenditure of funds in litigation, the diversion of management time
and resources, damage to our reputation and impairment of the marketability of our electronic monitoring products
and services. While we maintain liability insurance, it is possible that a successful claim could be made against us,
that the amount of our insurance coverage would not be adequate to cover the costs of defending against or paying
such a claim, and that damages payable by us would harm our business.
We are subject to risks associated with ownership of real estate.
Our ownership of correctional, detention, and residential reentry facilities subjects us to risks typically associated with
investments in real estate. Investments in real estate and, in particular, correctional and detention facilities have limited
or no alternative use and thus are relatively illiquid. Therefore, our ability to divest ourselves of one or more of our
facilities promptly in response to changing conditions is limited. Investments in real estate properties subject us to
risks involving potential exposure to environmental liability and uninsured loss. Our operating costs may be affected
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by the obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as
well as the cost of complying with future legislation. In addition, although we maintain insurance for many types of
losses, there are certain types of losses, such as losses from earthquakes and acts of terrorism, which may be either
uninsurable or for which it may not be economically feasible to obtain insurance coverage in light of the substantial
costs associated with such insurance. As a result, we could lose both our capital invested in, and anticipated profits
from, one or more of the properties we own. Further, it is possible to experience losses that may exceed the limits of
insurance coverage.
The primary risk we face for asset impairment charges is associated with real estate that we own. As of December
31, 2023, we had $2.1 billion in property and equipment, including $253.2 million in long-lived assets at eight idled
CoreCivic Safety facilities, two idled CoreCivic Community facilities, and one idled CoreCivic Properties correctional
facility. We can provide no assurance that we will be able to secure agreements to utilize our idle properties, or that
we will not incur impairment charges in the future.
Certain of our facilities are subject to options to purchase and reversions. Nine of our facilities are subject to an
option to purchase by certain governmental agencies. Such options are exercisable by the corresponding contracting
governmental entity generally at any time during the term of the respective facility contract. Certain of these purchase
options are based on the depreciated book value of the facility, which essentially could result in the transfer of
ownership of the facility to the governmental agency at the end of the life used for accounting purposes, while other
options to purchase are exercisable at prices below fair market value. See "Business – Facility Portfolio." If any of
these options are exercised, there exists the risk that we will be unable to invest the proceeds from the sale of the
facility in one or more properties that yield as much cash flow as the property acquired by the government entity. In
addition, in the event any of these options is exercised, there exists the risk that the contracting governmental agency
will terminate the management contract associated with such facility. For the year ended December 31, 2023, the nine
facilities currently subject to these options generated $304.2 million in revenue (16.0% of total revenue) and incurred
$260.6 million in operating expenses.
Risks related to facility construction and development activities may increase our costs related to such activities.
When we are engaged to perform construction and design services for a facility, we typically act as the primary
contractor and subcontract with other companies that act as the general contractors. As primary contractor, we are
subject to the various risks associated with construction (including, without limitation, shortages of labor and
materials, work stoppages, labor disputes, and weather interference which could cause construction delays). In
addition, we are subject to the risk that the general contractor will be unable to complete construction at the budgeted
costs or be unable to fund any excess construction costs, even though we require general contractors to post
construction bonds and insurance. Under such contracts, we are ultimately liable for all late delivery penalties and
cost overruns.
We may be adversely affected by an increase in costs or difficulty of obtaining adequate levels of surety credit on
favorable terms.
We are often required to post bid or performance bonds issued by a surety company as a condition to bidding on or
being awarded a contract. Availability and pricing of these surety commitments are subject to general market and
industry conditions, among other factors. Increases in surety costs could adversely affect our operating results if we
are unable to effectively pass along such increases to our customers. We cannot assure you that we will have continued
access to surety credit or that we will be able to secure bonds economically, without additional collateral, or at the
levels required for any potential facility development or contract bids. If we are unable to obtain adequate levels of
surety credit on favorable terms, we would have to rely upon letters of credit under our Revolving Credit Facility,
which could entail higher costs if such borrowing capacity was even available when desired, and our ability to bid for
or obtain new contracts could be impaired.
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Interruption, delay or failure of the provision of our technology services or information systems, or the compromise
of the security thereof, could adversely affect our business, financial condition or results of operations.
Components of our business depend significantly on effective information systems and technologies, some of which
are provided and/or maintained by third parties. As with all companies that utilize information systems, we are
vulnerable to negative impacts to our business if the operation of those systems malfunctions or experiences errors,
interruptions or delays, or certain information contained therein is compromised. As a matter of course, we may store
or process the personal information of offenders, employees and other persons as required to provide our services and
such personal information or other data may be hosted or exchanged with our government partners and other third-
party providers. While we employ industry standard administrative, technical and physical safeguards designed to
protect the confidentiality, integrity, availability and security of personal data we collect or process, despite the
security measures we have in place, and any additional measures we may implement in the future, our facilities and
systems, and those of our vendors, government partners, and third-party service providers, could be vulnerable to
service interruptions, outages, cyberattacks and security breaches and incidents, human error, earthquakes, hurricanes,
floods, pandemics, fires, other natural disasters, power losses, disruptions in telecommunications services, fraud,
military or wars and other geopolitical conflicts (including between Ukraine and Russia and Israel and Hamas),
terrorist attacks and other geopolitical unrest, changes in social, political, or regulatory conditions or in laws and
policies, or other changes or events.
The current cybersecurity threat environment presents increased risk for all companies, including companies in our
industry. We, our employees, government partners, and third parties are regularly the target of cyberattacks and other
attempts to breach, or gain unauthorized access to, our information systems and databases. Moreover, given the current
cybersecurity threat environment, we expect the volume and intensity of cyberattacks and attempted intrusions to
continue to increase in the future. Cybersecurity threats and techniques used in cyberattacks are pervasive,
sophisticated and difficult to prevent, including, computer viruses, malicious or destructive code (such as
ransomware), social engineering (including phishing, vishing and smishing), denial of service or information or
security breach tactics that could result in disruptions to our business and operations, unauthorized disclosure, release,
gathering, monitoring, misuse, loss or destruction or theft of confidential, proprietary or other information, including
intellectual property of ours, our employees or of third parties. Cyberattacks are carried out on a worldwide scale and
by a growing number of cyber actors, including organized crime groups, hackers, terrorist organizations, extremist
parties, hostile foreign governments, state-sponsored actors, activists, disgruntled employees and other third parties.
For example, several well-known companies have recently disclosed high-profile security breaches involving
sophisticated and highly targeted attacks on their company's infrastructure or their customers' data, which were not
recognized or detected until after such companies had been affected notwithstanding the preventive measures they
had in place. In addition, since Russia's invasion of Ukraine and the recent Israel and Hamas conflict, many companies
have experienced heightened cybersecurity risks. Cybersecurity threats and the techniques used in cyberattacks
change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial
intelligence, machine learning and quantum computing. Further, the information systems of third parties upon which
we rely in connection with our business, such as vendors, suppliers, government partners, and other third-party service
providers, could be comprised in a manner that adversely affects us and our information systems. Additionally, the
failure of our employees to exercise sound judgment and vigilance when targeted by social engineering or other
cyberattacks may increase our vulnerability.
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There is no assurance that the security measures we take to reduce the risk of such incidents and protect our systems
will be sufficient. Any cyberattack, data breach, security breach, or other security incident resulting in the interruption,
delay, compromise or failure of our services or information systems, or the misappropriation, loss, or other
unauthorized disclosure of personal data or confidential information, including confidential information about our
employees, or other proprietary information, including intellectual property, whether by us directly, our vendors, our
employees, our government partners, those entrusted to our care, or our third-party service providers, could damage
our reputation, expose us to the risks of litigation and liability, result in significant monetary penalties and/or
regulatory actions for violation of applicable laws or regulations, disrupt our business and result in significant costs
for investigation and notification regarding the incident and remedial measures to prevent future occurrences and
mitigate past violations, result in lost business, or otherwise adversely affect our results of operations. Moreover, any
significant cybersecurity incident could require us to devote significant management time and resources to address
such incident, interfere with our pursuit of other important business strategies and initiatives, and cause us to incur
additional expenditures, which could be material. There is no assurance that any remedial actions will meaningfully
limit the success of future attempts to breach our information systems, particularly because malicious actors are
increasingly sophisticated and utilize tools and techniques specifically designed to circumvent security measures,
avoid detection and obfuscate forensic evidence, which means we may be unable to identify, investigate or remediate
effectively or in a timely manner. Although we maintain cybersecurity insurance covering certain security and privacy
damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability
and in any event, insurance coverage would not address the reputational damage that could result from a security
incident.
We are subject to risks related to corporate social responsibility.
The growing integration of ESG factors in making investment decisions is relatively new; frameworks and methods
used by investors for assessing ESG policies are not fully developed and vary considerably among the investment
community; and investor, societal and political sentiments on ESG, both as to particular ESG factors and as to its
general relevance to investors and their decisions, continue to evolve. Further, pending rules proposed by the SEC and
the Federal Acquisition Regulatory Council may require new environmental and climate risk disclosures which may
introduce additional regulatory obligations and legal and reputational risk. Additionally, the State of California
recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will
impose broad climate-related disclosure obligations on certain companies doing business in California, starting in
2026. During 2023, we issued our fifth ESG report, which broadly describes how we attempt to deliver on our service
commitment to our government and other third-party partners and manage our operations responsibly and
ethically. The policies and practices we summarize in our ESG reporting, whether they relate to the standards we set
for ourselves or ESG criteria established by third parties, and whether or not we meet such standards, may influence
our reputation. For example, the perception held by the general public, our governmental partners, vendors, suppliers,
other stakeholders, or the communities in which we do business may depend, in part, on the standards we have chosen
to aspire to meet, whether or not we meet these standards on a timely basis or at all, and whether or not we meet
external ESG factors they deem relevant. Nonetheless, the subjective and evolving nature and wide variety of methods
and processes used by various stakeholders, including investors, to assess a company with respect to ESG criteria can
result in the perception of negative ESG factors or a misrepresentation of our ESG policies and practices. Our failure,
or perceived failure, to meet expectations on ESG reporting, achieve meaningful progress on ESG-related policies and
practices, address stakeholder expectations or meet ESG criteria set by third parties on a timely basis, or at all, could
adversely affect our business, results of operations, financial condition and cash flows.
By electing to publicly share ESG-related information and our approach to ESG standards, our business may also face
increased scrutiny related to ESG activities. As a result, our reputation could be harmed if we fail to meet goals we
share, report accurate data or act in a manner deemed appropriate or responsible in light of shifting social and political
standards and perspectives in the areas in which we report, such as safety and security, human rights, diversity, quality
assurance, community engagement, and environmental sustainability. Any harm to our reputation resulting from
sharing information, setting goals, attempting to meet external standards set by third-parties or our failure or perceived
failure to meet such standards or act in a manner that meets evolving societal and political perspectives could impact,
among other things: employee retention; the willingness of our governmental partners, vendors and suppliers to do
business with us; investors willingness or ability to purchase or hold our securities; or our ability to access capital, any
of which could adversely affect our business, results of operations, financial condition and cash flows. Our ESG
report is not incorporated by reference into and does not form any part of this Annual Report.
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As an owner and operator of correctional, detention, and residential reentry facilities, we are subject to risks
relating to acts of God, outbreaks of epidemic or pandemic disease, global climate change, terrorist activity and
war.
We may encounter staffing constraints as well as costs and expenses associated with owning and/or operating our
correctional, detention, and residential reentry facilities as a result of acts of God, outbreaks of epidemic or pandemic
disease, global climate change (including the potential for increased inclement weather and natural disasters), wars
and other geopolitical conflicts (including between Ukraine and Russia and Israel and Hamas) and the potential for
war, terrorist activity (including threats of terrorist activity), political unrest, geopolitical uncertainty and other forms
of civil strife, in or around locations where we own and/or operate significant properties. These events could have an
adverse impact on our business, financial condition, results of operations or the market price of our common stock.
Risks Related to Our Indebtedness
Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under
our debt securities.
We have a significant amount of indebtedness. As of December 31, 2023, we had total indebtedness of $1,106.7
million. Our indebtedness could have important consequences. For example, it could:
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make it more difficult for us to satisfy our obligations with respect to our indebtedness;
increase our vulnerability to general adverse economic and industry conditions;
require us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital
expenditures, dividends, stock repurchases and other general corporate purposes;
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we
operate;
restrict us from pursuing strategic acquisitions or certain other business opportunities;
place us at a competitive disadvantage compared to our competitors that have less debt; and
limit our ability to borrow additional funds or refinance existing indebtedness on favorable terms, or at
all.
If we are unable to meet our debt service obligations, we may need to suspend our share repurchase program, reduce
capital expenditures, restructure or refinance our indebtedness, obtain additional equity financing or sell assets. We
may be unable to restructure or refinance our indebtedness, obtain additional equity financing or sell assets on
satisfactory terms or at all.
The New Bank Credit Facility, indentures related to our senior notes, and other debt instruments have restrictive
covenants that could limit our financial flexibility.
The indentures related to our 8.25% senior notes due 2026, and 4.75% senior notes due 2027, collectively referred to
herein as our senior notes, and the credit agreement related to our New Bank Credit Facility contain restrictive
covenants that limit our ability to engage in activities that may be in our long-term best interests. Our New Bank
Credit Facility requires us to comply with certain financial covenants, including leverage and fixed charge coverage
ratios. The New Bank Credit Facility includes other restrictions that, among other things, limit our ability to incur
indebtedness; grant liens; engage in mergers, consolidations and liquidations; make asset dispositions, make restricted
payments and investments; issue disqualified stock; enter into transactions with affiliates; and amend, modify or
prepay certain indebtedness. The indentures related to our senior notes contain limitations on our ability to effect
mergers and change of control events, as well as other limitations on our ability to create liens on our assets. The
indenture related to our 8.25% senior notes due 2026 additionally limits our ability to incur indebtedness, make
restricted payments and investments and prepay certain indebtedness.
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Our failure to comply with these covenants could result in an event of default that, if not cured or waived, could result
in the acceleration of all or a substantial portion of our debt. We do not have sufficient working capital to satisfy our
debt obligations in the event of an acceleration of all or a significant portion of our outstanding indebtedness.
Our indebtedness is secured by a substantial portion of our assets.
Our New Bank Credit Facility is secured by a pledge of all of the capital stock (or other ownership interests) of our
domestic restricted subsidiaries, 65% of the capital stock (or other ownership interests) of our "first-tier" foreign
subsidiaries, all of our accounts receivable and those of our domestic restricted subsidiaries, and substantially all of
our deposit accounts and those of our domestic restricted subsidiaries. In the event that (a) the consolidated total
leverage equals or exceeds 4.25 to 1.00 or (b) we incur certain debt above a specified threshold, certain intangible
assets and unencumbered real estate assets that meet a 50% loan-to-value requirement are required to be added as
collateral. Subject to compliance with the restrictive covenants under our existing indebtedness, we may incur
additional indebtedness secured by existing or future assets of ours or our subsidiaries. In the event of a default under
our New Bank Credit Facility or any other secured indebtedness, or if we experience insolvency, liquidation,
dissolution or reorganization, the holders of our secured debt would be entitled to payment from their collateral
security, and after that the holders of our unsecured debt (including the holders of any deficiency remaining after
application of collateral to secured debt) would be entitled to payment from our remaining assets. In such an event,
there can be no assurance that we would have sufficient assets to pay amounts due to holders of our unsecured debt,
and unsecured debtholders may receive less than the full amount to which they are entitled.
Servicing our indebtedness will require a significant amount of cash or may require us to refinance our
indebtedness before it matures. Our ability to generate cash depends on many factors beyond our control and there
is no assurance that we will be able to refinance our debt on acceptable terms, or at all.
Currently, our Term Loan and Revolving Credit Facility both mature in October 2028. We also have outstanding
$593.1 million in aggregate principal amount of our 8.25% senior notes due 2026, and $243.1 million in aggregate
principal amount of our 4.75% senior notes due 2027. In addition, we have $145.5 million outstanding under a non-
recourse mortgage note with an interest rate of 4.43% maturing in 2040. Our ability to make payments on our
indebtedness, to refinance our indebtedness, and to fund planned capital expenditures will depend on our ability to
generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative,
regulatory, and other factors that are beyond our control.
The risk exists that our business will be unable to generate sufficient cash flow from operations or that future
borrowings will not be available to us in an amount sufficient to enable us to pay our indebtedness, including our
existing senior notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our
indebtedness, including our senior notes, on or before maturity. Our ability to refinance all or a portion of our
indebtedness on acceptable terms, or at all, will be dependent upon a number of factors, including our degree of
leverage, the amount of our cash flows, the value of our assets, borrowing and other financial restrictions imposed by
lenders, and conditions in the credit markets at the time we refinance. If we are unable to refinance our indebtedness
on acceptable terms, we may be forced to agree to otherwise unfavorable financing terms or to sell one or more
properties at unattractive prices or on disadvantageous terms. Any one of these options could have a material adverse
effect on our business, financial condition, results of operations and our cash flows.
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We are required to repurchase all or a portion of our senior notes upon a change of control, and the debt under
our New Bank Credit Facility is subject to acceleration upon a change of control.
Upon certain change of control events, as that term is defined in the indentures for our senior notes, including a change
of control caused by an unsolicited third party, we are required to make an offer in cash to repurchase all or any part
of each holder's notes at a repurchase price equal to 101% of the principal thereof, plus accrued interest. The source
of funds for any such repurchase would be our available cash or cash generated from operations or other sources,
including borrowings, sales of equity or funds provided by a new controlling person or entity. Sufficient funds may
not be available to us, however, at the time of any change of control event to repurchase all or a portion of the tendered
notes pursuant to this requirement. Our failure to offer to repurchase notes, or to repurchase notes tendered, following
a change of control will result in a default under the respective indentures, which could lead to a cross-default under
our New Bank Credit Facility and under the terms of our other indebtedness. A change in control (as described in our
New Bank Credit Facility), is also a default under our New Bank Credit Facility, entitling the lenders to refuse to
make further extensions of credit thereunder and to accelerate the maturity of the debt outstanding under the New
Bank Credit Facility. Prior to repurchasing the notes upon a change of control event, we must either repay outstanding
indebtedness under our New Bank Credit Facility or obtain the consent of the lenders under our New Bank Credit
Facility. If we do not obtain the required consents or repay our outstanding indebtedness under our New Bank Credit
Facility, we would effectively be prevented from offering to repurchase the notes, which would cause a default under
the indentures governing the notes.
Despite current indebtedness levels, we may still incur more debt.
The terms of the indentures for our senior notes and our New Bank Credit Facility restrict our ability to incur
indebtedness; however, we may nevertheless incur additional indebtedness in the future, and in the future, we may
refinance all or a portion of our indebtedness, including our New Bank Credit Facility indebtedness, and may incur
additional indebtedness as a result so long as we comply with the limitations in our senior notes and New Bank Credit
Facility while they are in effect. As of December 31, 2023, we had $257.1 million of additional borrowing capacity
available under our Revolving Credit Facility. The New Bank Credit Facility includes an option to increase the
availability under the Revolving Credit Facility and to request term loans from the lenders in an aggregate amount not
to exceed the greater of (a) $200.0 million and (b) 50% of consolidated EBITDA for the most recently ended four-
quarter period, subject to, among other things, the receipt of commitments for the increased amount. In addition, so
long as we comply with the limitations in our senior notes and New Bank Credit Facility while they are in effect, we
may incur additional debt from time to time when we determine that market conditions and the opportunity to utilize
the proceeds therefrom are favorable. If new debt is added to our and our subsidiaries' current debt levels, the related
risks that we and they now face could intensify.
Our access to capital may be affected by general macroeconomic conditions.
Credit markets may tighten significantly for various reasons that may or may not result from company-specific
activities such that our ability to obtain new capital could be more challenging and more expensive. Further, we can
provide no assurance that the banks that have made commitments under our New Bank Credit Facility will continue
to operate as going concerns in the future or will agree to extend commitments beyond the maturity date. If any of
the banks in the lending group were to fail, or fail to renew their commitments, it is possible that the capacity under
our New Bank Credit Facility would be reduced. In the event that the availability under our New Bank Credit Facility
was reduced significantly, we could be required to obtain capital from alternate sources in order to continue with our
business and capital strategies. Our options for addressing such capital constraints would include, but not be limited
to (i) delaying certain capital expenditure projects, (ii) obtaining commitments from the remaining banks in the lending
group or from new banks to fund increased or new amounts under the terms of our New Bank Credit Facility, (iii)
accessing the public capital markets, or (iv) retaining more of our cash flow. Such alternatives could be on terms less
favorable than under existing terms, which could have a material effect on our consolidated financial position, results
of operations, or cash flows.
54
Increasing activist resistance to the use of public-private partnerships for correctional, detention, and residential
reentry facilities could impact our ability to obtain financing to grow our business or to refinance existing
indebtedness, which could have a material adverse effect on our business, financial condition and results of
operations.
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. This strict policy also applies to external
government relations professionals working on our behalf at all levels of government. Nonetheless, contracting for
correctional, detention, and residential reentry facilities and related services has not achieved complete acceptance by
certain governments or the public at large. The operation of correctional, detention, and residential reentry facilities
by private entities has encountered resistance from certain groups, such as immigration advocates, labor unions, prison
reform organizations and other special interest groups that believe correctional, detention, and residential reentry
facilities should only be operated by governmental agencies, or that alternatives to immigrant detention should be
utilized to enforce the nation's border policies. Further, opposition to immigration, detention and incarceration policies
and the association of private companies with the enforcement of such policies have caused some financial institutions
to decline to provide capital, credit or financial services to private entities that own or operate correctional and
detention facilities, including CoreCivic, or to otherwise participate in the provision of capital, credit or financial
services in connection with the development of correctional and detention facilities that are associated with private
companies. Moreover, proposed and future legislation could restrict financial institutions from providing capital, credit
or financial services to private entities that own or operate correctional and detention facilities, including CoreCivic.
For example, the New York State Legislature is considering a bill that would prohibit New York state chartered banks
from investing in and providing financing for privately operated secured facilities. If this legislation becomes law,
certain financial institutions may be prohibited from providing us with capital, credit or financial services. While we
believe we will continue to have access to capital, restrictions on our access to capital, or increases in the cost of
capital, could have a material adverse effect on our business, financial condition and results of operations.
Rising interest rates increase the cost of our variable rate debt.
We have incurred and expect in the future to incur indebtedness that bears interest at variable rates, including
indebtedness under our New Bank Credit Facility. Accordingly, rising interest rates increase our interest costs, which
could have an adverse impact on us and our ability to pay down our debt, return capital to our stockholders and pay
maturing debt or cause us to be in default under certain debt instruments.
Risks Related to our Corporate Tax Structure
If we failed to remain qualified as a REIT for those years we elected REIT status, we would be subject to corporate
income taxes and would not be able to deduct distributions to stockholders when computing our taxable income for
those years.
We operated in a manner that was intended to allow us to qualify as a REIT for federal income tax purposes during
those years we elected REIT status, 2013 through 2020. However, we cannot assure you that we qualified as a REIT
during those years. Qualification as a REIT required us to satisfy numerous requirements established under highly
technical and complex sections of the Internal Revenue Code of 1986, as amended, or the Code, which may change
from time to time and for which there are only limited judicial and administrative interpretations. Satisfaction of these
requirements depended on the determination of various factual matters and circumstances not entirely within our
control. For example, in order to qualify as a REIT, the REIT must derive at least 95% of its gross income in any year
from qualifying sources. In addition, a REIT is required to distribute annually to its stockholders at least 90% of its
REIT taxable income (determined without regard to the dividends paid deduction and by excluding capital gains) and
must satisfy specified asset tests on a quarterly basis. These REIT provisions of the Code are complex and are not
always subject to clear interpretation.
55
If we failed to qualify as a REIT in any taxable year we elected REIT status, we would be subject to federal income
tax (including any applicable alternative minimum tax for years before 2018 and after 2022) on our taxable income
computed in the usual manner for corporate taxpayers and without any deduction for distributions to our stockholders.
Any such corporate income tax liability could be substantial and would reduce the amount of cash available for other
purposes, because, unless we would be entitled to relief under certain statutory provisions, we would be taxable as a
C Corporation, beginning in the year in which the failure occurred and for each year thereafter, and we would not be
allowed to re-elect to be taxed as a REIT for the following four years. In addition, it is possible that we would need to
borrow additional funds or issue additional securities to pay any such additional tax liability.
Even if we remained qualified as a REIT for those years we elected REIT status, we may owe taxes under certain
circumstances.
Even if we qualify as a REIT for those years we elected REIT status, we will be subject to certain U.S. federal, state
and local taxes on our income and property, including on taxable income that we did not distribute to our stockholders,
and on net income from certain "prohibited transactions". In addition, the REIT provisions of the Code are complex
and are not always subject to clear interpretation. For example, a REIT must derive at least 95% of its gross income
in any year from qualifying sources, including rents from real property. Rents from real property include amounts
received for the use of limited amounts of personal property and for certain services. Whether amounts constitute rents
from real property or other qualifying income may not be entirely clear in all cases. We may fail to qualify as a REIT
for those years we elected REIT status if we exceed the permissible amounts of non-qualifying income unless such
failures qualify for relief under certain statutory relief provisions. Even if we qualify for statutory relief, we may be
required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more such
relief provisions under the Code to maintain our qualification as a REIT for those years we elected REIT status.
Furthermore, we conducted substantial activities through TRSs, and the income of those subsidiaries is subject to U.S.
federal income tax at regular corporate rates.
Performing services through our TRSs during those years we elected REIT status may increase our overall tax liability
or subject us to certain excise taxes. During those years we elected REIT status, we conducted significant business
activities through our TRSs. A TRS may hold assets and earn income, including income earned from the performance
of correctional services, that would not be qualifying assets or income if held or earned directly by a REIT. During
those years we elected REIT status, we conducted a significant portion of our business activities through our TRSs.
The TRS rules impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not
conducted on an arm's-length basis. We believe our arrangements with our TRSs were on arm's-length terms. If it is
determined that our arrangements with our TRSs were not on an arm's-length terms, we would be subject to the 100%
excise tax.
The value of the securities we owned in our TRSs during those years we elected REIT status was limited under the
REIT asset tests. Under the Code, we would fail to qualify as a REIT if more than 20% of the value of our gross assets
were represented by securities of one or more TRSs. While we monitored the value of the securities of our TRSs, there
can be no assurance that we were able to comply with this limitation. If it is determined that we were unable to comply
with this limitation, we would fail to qualify as a REIT for those years we elected REIT status beginning in the year
in which we did not comply with this limitation.
The tax imposed on REITs engaging in "prohibited transactions" limited our ability to engage in transactions during
those years we elected REIT status which would be treated as sales for federal income tax purposes. A REIT's net
income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or
other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary
course of business. Although we do not believe that we held any properties that would be characterized as held for
sale to customers in the ordinary course of our business during those years we elected REIT status, we would be
subject to such 100% excise tax if the Internal Revenue Service, or IRS, were to successfully challenge our
characterization of our properties or the availability of certain safe harbors.
56
General Risk Factors
The market price of our equity securities may vary substantially, which may limit our stockholders' ability to
liquidate their investment.
Factors that could affect the market price of our equity securities include, but are not limited to, the following:
•
•
•
•
•
•
•
actual or anticipated variations in our quarterly results of operations;
changes in market valuations of companies in the corrections, detention, or residential reentry industries;
changes in expectations of future financial performance or changes in estimates of securities analysts;
changes in government policy, legislation and regulations that affect utilization of the private sector for
corrections, detention, and residential reentry services including, but not limited to, government funding
proposals;
fluctuations in stock market prices and volumes;
issuances and re-purchases of common shares or other securities in the future; and
announcements by us or our competitors of acquisitions, investments or strategic actions.
The number of shares of our common stock available for future sale could adversely affect the market price of our
common stock.
We cannot predict the effect, if any, of future sales of common stock, or the availability of common stock for future
sale, on the market price of our common stock. Sales of substantial amounts of common stock, including stock issued
under equity compensation plans, or the perception that these sales could occur, may adversely affect prevailing
market prices for our common stock.
Future offerings of debt or equity securities ranking senior to our common stock or incurrence of debt (including
under our New Bank Credit Facility) may adversely affect the market price of our common stock.
If we decide to issue debt or equity securities in the future ranking senior to our common stock or otherwise incur
indebtedness (including under our New Bank Credit Facility), it is possible that these securities or indebtedness will
be governed by an indenture or other instrument containing covenants restricting our operating flexibility and limiting
our ability to return capital to our stockholders. Additionally, any convertible or exchangeable securities that we issue
in the future may have rights, preferences and privileges, including with respect to distributions, more favorable than
those of our common stock and may result in dilution to owners of our common stock. Because our decision to issue
debt or equity securities in any future offering or otherwise incur indebtedness will depend on market conditions and
other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or
financings, any of which could reduce the market price of our common stock and dilute the value of our common
stock.
Our issuance of preferred stock could adversely affect holders of our common stock and discourage a takeover.
Our Board of Directors has the authority to issue up to 50.0 million shares of preferred stock without any action on
the part of our stockholders. Our Board of Directors also has the authority, without stockholder approval, to set the
terms of any new series of preferred stock that may be issued, including voting rights, dividend rights, liquidation
rights and other preferences superior to our common stock. In the event that we issue shares of preferred stock in the
future that have preferences superior to our common stock, the rights of the holders of our common stock or the market
price of our common stock could be adversely affected. In addition, the ability of our Board of Directors to issue
shares of preferred stock without any action on the part of our stockholders may impede a takeover of us and
discourage or prevent a transaction that may be favorable to our stockholders.
57
Our charter and bylaws and Maryland law could make it difficult for a third party to acquire our company.
The Maryland General Corporation Law and our charter and bylaws contain provisions that could delay, deter, or
prevent a change in control of our company or our management. These provisions could also discourage proxy contests
and make it more difficult for our stockholders to elect directors and take other corporate actions. These provisions:
•
•
•
authorize us to issue "blank check" preferred stock, which is preferred stock that can be created and issued
by our Board of Directors, without stockholder approval, with rights senior to those of common stock;
provide that directors may be removed with or without cause only by the affirmative vote of at least a
majority of the votes of shares entitled to vote thereon; and
establish advance notice requirements for submitting nominations for election to the Board of Directors
and for proposing matters that can be acted upon by stockholders at a meeting.
We are also subject to anti-takeover provisions under Maryland law, which could delay or prevent a change of control.
Together, these provisions of our charter and bylaws and Maryland law may discourage transactions that otherwise
could provide for the payment of a premium over prevailing market prices for our common stock, and also could limit
the price that investors are willing to pay in the future for shares of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 1C. CYBERSECURITY.
Cybersecurity Risk Management and Strategy
We recognize the importance of developing, implementing and maintaining the integrity of our information
technology systems and safeguarding the personal data and confidential information we receive and store. We have a
cybersecurity risk management program in place designed to assess, identify and manage material risks from
cybersecurity threats utilizing a defense-in-depth security strategy that integrates our staff, technology and operations
to establish various securities barriers across multiple layers and missions of our operations. Our cybersecurity risk
management program is designed to employ industry standard practices across our operations and business functions,
including monitoring and analysis of the threat environment, vulnerability assessments, and third-party cybersecurity
risks; detecting and responding to cybersecurity incidents, attacks and data breaches; cybersecurity preparedness,
incident response plans, and business continuity and disaster recovery capabilities; and investments in cybersecurity
infrastructure and program needs. Key aspects of our cybersecurity risk management program include, but are not
limited to, the following:
•
•
•
•
•
•
Surveillance controls and technical protective capabilities, including a centralized security incident event
management system, or SIEM, and a third-party continuous monitoring engagement, that monitors threat
detection and response 24/7/365;
Utilization of third parties to assess our practices related to, and provide expertise and assistance with,
various aspects of information security, as further described below;
Annual cybersecurity training for all employees, including social engineering (e.g., phishing, vishing, and
smishing), privacy and other related topics;
Established policies and procedures that govern information security and cybersecurity which apply to all
employees and information systems we control;
Business continuity, incident response and disaster recovery procedures, including quarterly tabletop
incident response exercises, annual disaster recovery tests, annual unannounced penetration tests, annual
phishing campaigns, and annual security control assessments;
Database activity monitoring, encryption, secure file transfer protocols and application firewalls; and
58
• Maintaining cybersecurity insurance covering certain security and privacy damages and claim expenses
resulting from cybersecurity incidents (we periodically meet with our insurer to discuss trends in
cybersecurity).
We engage third parties in connection with assessing, identifying and managing our cybersecurity risks, including,
but not limited to, the following:
• We engage an independent third-party with incident response expertise to provide intelligence-based
cybersecurity solutions and services to assist us with preparing for, investigating, and responding to
cybersecurity incidents, including attacks that target on premise, cloud, and critical infrastructure
environments.
• We engage an independent third-party service provider to conduct an annual security program assessment
of the controls, maturity and performance of our information security program and the information
security risks associated with our technology and business systems.
• We engage an independent third-party service provider to annually perform external and internal
penetration and intrusion testing using industry standard tools and techniques.
• We engage an independent third-party auditor to help ensure compliance with certain information security
standards required under some of our federal contracts.
• We have an established cadence of reviews, reporting and coordination with government agencies to
review cybersecurity metrics, findings and any applicable remediation efforts. These agencies conduct
assessments of our controls on a periodic basis using the National Institute of Standards and Technology
Cybersecurity Framework.
• We engage a third-party auditor to review processes and procedures designed to control access to
information systems as part of its Sarbanes-Oxley testing.
In addition to the third parties described above, we regularly engage consultants, advisors, service providers and other
third parties to help develop and manage our cybersecurity risk management program. Further, our internal audit team
conducts annual assessments of our cybersecurity risk management program and controls.
To help identify and manage cybersecurity risks associated with our use of third-party service providers, we have
implemented processes to assess third-party systems which could be compromised in a manner that adversely impacts
us and our technology systems. We conduct diligence of significant third-party service providers who will have access
to our data or information technology systems and incorporate certain cybersecurity protections in our engagement
contracts with such providers. In addition, we require such third-party service providers to promptly notify us of any
actual or suspected breach impacting our data or operations.
We have a risk assessment program in place to assess, identify and manage material risks from cybersecurity threats.
Cybersecurity risks we face include cyberattacks, computer viruses, malicious or destructive code (such as
ransomware), social engineering (including phishing, vishing and smishing), denial of service or information or
security breach tactics as well as attacks to our website, financial applications, operational technology,
telecommunications and human resources data. Our cybersecurity risk management program includes technology and
processes designed to maintain active security of our information technology systems. We do not believe that any
risks we have identified to date from cybersecurity threats, including as a result of any previous cybersecurity
incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy,
results of operations or financial condition. However, we cannot ensure you that future cybersecurity incidents will
not materially affect our business strategy, results of operations or financial condition.
For more information on the Company’s risks associated with cybersecurity threats and incidents, information and
security breaches and technology failures, see Part I, Item 1A. Risk Factors - Interruption, delay or failure of the
provision of our technology services or information systems, or the compromise of the security thereof, could adversely
affect our business, financial condition or results of operations.
59
Governance
Our cybersecurity risk management program is integrated into our overall risk management system. Our BOD has a
formalized enterprise risk management program, or ERM Program, which the Risk Committee of the BOD, or Risk
Committee, on behalf of the BOD and the Audit Committee of the BOD, oversees. Our ERM Program addresses the
identification, prioritization and assessment of a broad range of risks (e.g., cybersecurity, financial, operational,
business, reputational, governance and managerial), and the formulation of plans to develop and improve controls for
managing these risks or mitigating their effects in an integrated effort involving our BOD, relevant committees of the
BOD, management, and other personnel. Our ERM Program is led by our General Counsel and is a component of
management’s strategic planning process. Our BOD and Risk Committee have primary oversight responsibility
regarding our cybersecurity risk management program. Our BOD and Risk Committee each receives regular and
frequent updates on cybersecurity and information technology matters from management (including our Chief
Information Officer, or CIO) and, periodically, from outside experts. For example, the CIO provides reports to our
BOD, Technology Steering Committee and Risk Committee regarding cybersecurity risks, as well as plans and
strategies to mitigate those risks, on a periodic basis.
In addition, our Enterprise Risk Council, or ERC, is a management-level team comprised of a select group of executive
officers, vice presidents, and senior managers overseeing risk, which is responsible for managing enterprise risks and
planning and organizing the activities of our organization to minimize the effects of risk on our business, operations
and financial results. ERC is led by our General Counsel and our Managing Director, Litigation & Risk Management.
The ERC coordinates enterprise risk management reports to the Risk Committee and/or our BOD. Further, the Risk
Committee reviews management’s cybersecurity risk management program controls, including management’s
assessment of recent cybersecurity incidents meeting certain criteria.
We also have a Technology Steering Committee that assists with fulfilling oversight responsibilities of information
technology risks, including cybersecurity risks. The Technology Steering Committee is comprised of our executive
officers and relevant business leaders from the information security, information technology, legal, human resources,
audit, finance, communication and risk functions, and identifies, defines, manages and measures information
technology and cybersecurity risks applicable to us on an enterprise level. The Technology Steering Committee meets
quarterly, and reviews all cybersecurity risks and incidents meeting certain criteria, and provides oversight with respect
to cybersecurity matters at a management level. Further, the Technology Steering Committee reviews management’s
cybersecurity risk management program controls meeting certain criteria.
Our Technology Cybersecurity Committee is comprised of a subset of our Technology Department, including our
CIO. The Technology Cybersecurity Committee meets bi-weekly and reviews all cybersecurity risks and incidents
meeting certain criteria, provides oversight with respect to cybersecurity matters at a technology management level,
and reports through our CIO to the Technology Steering Committee.
We also maintain a management governance structure for reviewing and approving changes related to new and
existing systems, software and infrastructure design. Any new items that would require a material change must be
reviewed and approved by our architecture review board, or ARB. Non-material changes are governed by the change
advisory board, or CAB. The ARB and CAB each meet on a weekly basis and take security impacts into consideration
during the decision-making process. All changes, whether approved or rejected, are formally documented in our
information technology service management system.
As mentioned above, our SIEM tool monitors threat detection and response 24/7/365. Identified threats are alerted
and addressed by our information technology team in accordance with internal policies, industry standard practices
and regulatory requirements. Audit logs of external security threats are reviewed weekly as part of general event threat
intelligence monitoring procedures. Other ongoing monitoring includes data from our information services team,
which maintains an audit trail to detect risks in areas such as unauthorized local connections, network use and remote
connections. Vulnerability scans are performed weekly and are supplemented on an ad-hoc basis for specific threats
or to test patch status.
60
Our Director, Information Security Compliance, prepares an incident summary and collaborates with the CIO to
conduct an initial assessment of cybersecurity incidents. They perform an impact assessment with respect to
cybersecurity incidents meeting certain criteria and elevate the review of any such cybersecurity incidents for review
by our executive officers.
Cybersecurity incidents meeting a certain criteria are escalated to our Disclosure Committee for SEC disclosure
consideration. The materiality of any cybersecurity incident is ultimately evaluated and determined by our Disclosure
Committee in collaboration with our CIO. Our Disclosure Committee is comprised of our executive officers, our CIO,
our Chief Ethics and Compliance Officer, and relevant business leaders from our finance and legal departments. The
Disclosure Committee is presented with a detailed overview of the cybersecurity incident by the CIO. The Disclosure
Committee then evaluates the cybersecurity incident and its potential materiality based on SEC guidance and by
considering relevant quantitative and qualitative factors.
We have also adopted a cybersecurity incident response plan which provides for controls and procedures in connection
with cybersecurity incidents, including these escalation procedures.
At a management level, our cybersecurity risk management program is led by our CIO, along with our Director,
Information Security Compliance. As of the date of this Annual Report, our Technology Department, led by our CIO,
along with our Director, Information Security Compliance, is comprised of nearly 100 technology professionals, with
currently 11 of such technology professionals exclusively dedicated to cybersecurity. These 11 technology
professionals have an average cybersecurity tenure of 13 years and certifications from ISC2, ISACA, CompTIA and
other industry certification leaders including CISSP, CISM, CISA, CCNA, CCNP, Network+, Security+, Project+,
A+, CEH, CCSP and ITIL, among other advanced Cybersecurity and Technology degrees, tool and process specific
certifications and cybersecurity related work experience. Our Technology Department stays current on cybersecurity
issues and trends through continuing education activities such as conferences and participating in webinars,
maintaining continuous education requirements for certification bodies, as well as through the monitoring of security
and vendor feeds on cybersecurity trends and threats.
ITEM 2. PROPERTIES.
The properties we owned at December 31, 2023 are described under Item 1 and in Note 4 of the Notes to the
Consolidated Financial Statements contained in this Annual Report, as well as in Schedule III in Part IV of this Annual
Report.
ITEM 3. LEGAL PROCEEDINGS.
The information required under this item can be found in Note 15 of the Notes to the Consolidated Financial
Statements contained in this Annual Report and is incorporated by reference in this Part I, Item 3.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
61
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Price of and Distributions on Capital Stock
Our common stock is traded on the New York Stock Exchange, or NYSE, under the symbol "CXW." On February 9,
2024, the last reported sale price of our common stock was $14.84 per share and there were approximately 2,400
registered holders and approximately 32,000 beneficial holders, respectively, of our common stock.
Dividend Policy
In order to qualify as a REIT for the years we elected REIT status, we were generally required to distribute to our
stockholders at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and
excluding net capital gains), and we were subject to tax to the extent our net taxable income (including net capital
gains) was not fully distributed. We announced on June 17, 2020 that our Board of Directors, or BOD, suspended our
quarterly dividend while it evaluated corporate structure and capital allocation alternatives. On August 5, 2020, our
BOD voted unanimously to approve a plan to revoke our REIT election and become a taxable C Corporation, effective
January 1, 2021; our BOD also voted unanimously to discontinue the quarterly dividend and prioritize allocating our
free cash flow to reduce debt levels. In addition, subsequently, our BOD approved a share repurchase program as
further described below under the heading “Issuer Purchases of Equity Securities”.
Issuer Purchases of Equity Securities
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
Approximate
Dollar Value of
Shares that
May Yet Be
Purchased
Under the Plans
or Programs (1)
—
—
872,219
872,219
$
$
$
$
124,906,633
124,906,633
112,406,645
112,406,645
Total
Number
of Shares
Purchased
Average
Price
Paid per
Share
—
—
872,219
872,219
—
$
$
—
$ 14.33
$ 14.33
Period
October 1, 2023 - October 31, 2023
November 1, 2023 - November 30, 2023
December 1, 2023 - December 31, 2023
Total
(1) On May 12, 2022, the Company announced that its BOD had approved a share repurchase program to repurchase up to $150.0
million of the Company's common stock. On August 2, 2022, the BOD increased the authorization to repurchase under the share
repurchase program by up to an additional $75.0 million of the Company's common stock, which resulted in a total aggregate
amount to repurchase up to $225.0 million of the Company's common stock. Repurchases of the Company's outstanding common
stock will be made in accordance with applicable securities laws and may be made at the Company's discretion based on parameters
set by the BOD from time to time in the open market, through privately negotiated transactions, or otherwise. The share repurchase
program has no time limit and does not obligate the Company to purchase any particular amount of its common stock. The
authorization for the share repurchase program may be terminated, suspended, increased or decreased by the BOD in its discretion
at any time. As of December 31, 2023, the Company had repurchased a total of 10.1 million common shares at an aggregate cost
of approximately $112.6 million.
ITEM 6.
[Reserved]
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this Annual Report on Form 10-K, or this Annual Report. In this Annual Report, we use the
term, the "Company," "CoreCivic," "we," "us," and "our" to refer to CoreCivic, Inc. and its subsidiaries unless context
indicates otherwise. This discussion contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those described under "Part I, Item 1A. Risk Factors" and included in other
portions of this report.
OVERVIEW
We are a diversified government solutions company with the scale and experience needed to solve tough government
challenges in flexible, cost-effective ways. Through three segments, CoreCivic Safety, CoreCivic Community, and
CoreCivic Properties, we provide a broad range of solutions to government partners that serve the public good through
corrections and detention management, a network of residential reentry centers to help address America's recidivism
crisis, and government real estate solutions. 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.
As of December 31, 2023, through our CoreCivic Safety segment, we operated 43 correctional and detention facilities,
39 of which we owned, with a total design capacity of approximately 65,000 beds. Through our CoreCivic Community
segment, we owned and operated 23 residential reentry centers with a total design capacity of approximately 5,000
beds. In addition, through our CoreCivic Properties segment, we owned 6 properties, with a total design capacity of
approximately 10,000 beds. 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. Our size and experience provide us with
significant credibility with our current and prospective customers, and enable us to generate economies of scale in
purchasing power for food services, health care and other supplies and services we offer to our government partners.
See "Part I, Item 1. Business – Overview" for a description of how we are organized.
Our Business
Through our CoreCivic Safety and CoreCivic Community segments, we are compensated for providing bed capacity
and correctional, detention, and residential reentry services at a per diem rate based upon actual or minimum
guaranteed occupancy levels. Federal, state, and local governments are constantly under budgetary constraints putting
pressure on governments to control correctional budgets, including per diem rates our customers pay to us as well as
pressure on appropriations for building new prison capacity.
The solutions we provide to our federal customers continue to be a significant component of our business. We provide
an essential governmental service, and believe our ability to provide flexible solutions and fulfill emergent needs of
our federal customers would be very difficult and costly to replicate in the public sector.
63
On January 26, 2021, President Biden issued the Executive Order on Reforming Our Incarceration System to Eliminate
the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO. The Private Prison EO directs
the Attorney General to not renew DOJ contracts with privately operated criminal detention facilities. Two agencies
of the United States Department of Justice, or DOJ, the United States Federal Bureau of Prisons, or BOP, and the
United States Marshals Service, or USMS, utilize our services. The BOP houses inmates who have been convicted,
and the USMS is generally responsible for detainees who are awaiting trial. The BOP has experienced a steady decline
in inmate populations over the last decade, a trend that was accelerated by the COVID-19 pandemic. Our remaining
prison contract with the BOP at the 1,978-bed McRae Correctional Facility expired on November 30, 2022 and was
not renewed. Following the non-renewal of the BOP contract in 2022 and our sale of the McRae facility to the state
of Georgia in August 2022, we no longer operate any prison contracts for the BOP. The Private Prison EO only
applies to agencies that are part of the DOJ, which includes the BOP and USMS. U.S. Immigration and Customs
Enforcement, or ICE, facilities are not covered by the Private Prison EO, as ICE is an agency of the Department of
Homeland Security, or DHS, not the DOJ. For the year ended December 31, 2023, USMS and ICE accounted for
21% ($400.4 million) and 30% ($565.5 million), respectively, of our total revenue. For the year ended December 31,
2022, USMS and ICE accounted for 22% ($403.9 million) and 29% ($527.3 million), respectively, of our total
revenue.
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. As a result, in the
first quarter of 2020, the federal government decided 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 COVID-19, a policy known as Title 42. This policy resulted in a reduction to the number of people ICE
detained, including in our detention facilities. Based on COVID-19 trends, the Department of Health and Human
Services allowed Title 42 to expire on May 11, 2023, which has resulted in an increase in the number of undocumented
people permitted to enter the United States claiming asylum, and has resulted in an increase in the number of people
apprehended and detained by ICE.
We believe the long-term growth opportunities of our business remain attractive as government agencies consider
their emergent needs, as well as the efficiency and offender programming opportunities we provide as flexible
solutions to satisfy our partners' needs. We have also been in discussions with several state and county government
agencies that have experienced challenges in staffing their public-sector facilities and are seeking solutions from the
private sector. Further, several of our existing government partners, as well as prospective government partners, have
been experiencing growth in offender populations and overcrowded conditions, as well as an increase in violent crime.
Governments are continuing to assess their need for correctional space, and several are continuing to consider
alternative correctional capacity for their aged or inefficient infrastructure, or are seeking cost savings by utilizing the
private sector, which could result in increased future demand for the solutions we provide. For example, on September
25, 2023, we announced that we signed a new management contract with Hinds County, Mississippi to care for up to
250 adult male pre-trial detainees at our 2,672-bed Tallahatchie County Correctional Facility in Tutwiler,
Mississippi. The initial contract term is for two years, which may be extended for an additional year upon mutual
agreement. In addition, on November 16, 2023, we announced that we signed a new management contract with the
state of Wyoming to care for up to 240 male inmates at the Tallahatchie facility. The term of the new contract runs
through June 30, 2026. Also on November 16, 2023, we announced that we signed a new contract with Harris County,
Texas, to care for up to 360 male inmates at the Tallahatchie facility. Upon mutual agreement, Harris County may
access an additional 360 beds at the facility. The initial contract term began on December 1, 2023, and is scheduled
to expire on November 30, 2024. However, the contract may be extended at Harris County's option for up to four
additional one-year terms. In addition to the recent contracts with Hinds County, the state of Wyoming, and Harris
County, we currently care for residents from the USMS, Vermont, South Carolina, the U.S. Virgin Islands, and
Tallahatchie County at the Tallahatchie facility, which demonstrates the flexible solutions that we provide. On
November 14, 2023, we announced that we signed a new management contract with the state of Montana to care for
up to 120 inmates at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona. The new contract is scheduled to
64
expire on October 31, 2025, and may be extended by mutual agreement for a total term of up to seven years. We
currently care for residents from the state of Hawaii and the state of Idaho at the Saguaro facility. 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.
Further, in December 2021, the state of Arizona awarded us a new contract for up to 2,706 inmates at our 3,060-bed
La Palma Correctional Center in Arizona, which commenced in April 2022. We are not aware of a larger prison
contract awarded to the private sector by any state in over a decade. In August 2022, we completed the sale of the
1,978-bed McRae Correctional Facility to the Georgia Building Authority in order to update its aged and inefficient
public sector correctional infrastructure. We had a management contract with the BOP at this facility, which expired
on November 30, 2022. In connection with the sale, we entered into an agreement to lease the McRae facility from
the Georgia Building Authority through November 30, 2022 to allow us to fulfill our obligations to the BOP. The
BOP transferred the BOP inmates to alternative federal capacity prior to expiration of the contract, and the McRae
Correctional Facility converted to a facility owned and operated by the State of Georgia upon the termination of our
lease with the Georgia Building Authority. Competing budget priorities often impede our customers' ability to
construct new prison beds of their own or update their older facilities, which we believe could result in further demand
for private sector prison capacity solutions in the long-term.
Governments continue to experience many significant spending demands, and competing budget priorities often
impede our customers' ability to construct new prison beds of their own or update their older facilities, which we
believe could result in further demand for private sector prison capacity solutions in the long-term. We believe the
outsourcing of corrections and detention management services to private operators allows governments to manage
increasing inmate populations while simultaneously controlling costs. We believe our customers discover that
partnering with private operators to provide residential services to their offenders introduces competition to their
correctional system, resulting in improvements to the quality and cost of services throughout their correctional system.
Further, the use of facilities owned and managed by private operators allows governments to expand correctional
capacity without incurring large capital commitments and allows them to avoid long-term pension obligations for their
employees.
We also believe that having beds immediately available to our partners provides us with a distinct competitive
advantage when bidding on new contracts. We believe the most significant opportunities for growth are in providing
our government partners with available beds within facilities we currently own or that we will develop. Over the long-
term, we would like to see meaningful utilization of our available capacity and better visibility from our customers
into their potential future needs before we develop new correctional or detention capacity on a speculative basis. We
will, however, respond to customer demand and may develop or expand correctional and detention facilities when we
believe potential long-term returns justify the capital deployment. We also believe that owning the facilities in which
we provide management services enables us to more rapidly replace business lost compared with managed-only
facilities, since we can offer the same beds to new and existing customers and, with customer consent, may have more
flexibility in moving our existing populations to facilities with available capacity. Our management contracts generally
provide our customers with the right to terminate our management contracts at any time without cause.
We are actively engaged in marketing our available capacity as solutions to meet the needs of potential customers.
Historically, we have been successful in obtaining new contracts when we have an inventory of available beds to
provide flexible and immediate solutions to our government customers. Occupancy rates at our facilities were
negatively impacted by COVID-19, and we have been focused on filling available capacity within our existing
facilities. As available capacity within existing operating facilities is utilized, we believe increasing demand will
result in the utilization of idle bed capacity. Available bed capacity can also be used for emergent needs. For example,
as previously mentioned herein, since September 2023, we have announced that we signed new contracts with Hinds
County, Mississippi to care for up to 250 inmates, the state of Wyoming to care for up to 240 inmates, and Harris
County, Texas to care for up to 360 inmates at our Tallahatchie facility. We also announced that we signed a new
contract with the state of Wyoming to care for up to 120 inmates at our Saguaro facility.
65
We also offer our customers an attractive portfolio of correctional, detention, and reentry facilities that can be leased
for various needs as an alternative to providing "turn-key" correctional, detention, and residential reentry bed space
and services to our government partners. In June 2023, we announced that we had entered into a lease agreement with
the Oklahoma Department of Corrections, or ODC, for our 1,670-bed Allen Gamble Correctional Center. The new
lease agreement includes a base term that commenced on October 1, 2023, with a scheduled expiration date of June
30, 2029, and unlimited two-year renewal options. We previously operated the Allen Gamble facility in our Safety
segment under a management contract with the ODC. The management contract was scheduled to expire on June 30,
2023. However, effective July 1, 2023, we entered into a 90-day contract extension for the management contract,
after which time, operations of the Allen Gamble facility transferred from us to the ODC in accordance with the new
lease agreement. In September 2021, we announced that we had entered into a three-year lease agreement with the
state of New Mexico at our 596-bed Northwest New Mexico Correctional Center. We previously operated the
Northwest New Mexico facility in our Safety segment under a contract with the state of New Mexico. The new lease
agreement commenced on November 1, 2021 and includes extension options that could extend the term of the lease
through October 31, 2041. The lease of these two facilities, along with the lease of our 656-bed Southeast Correctional
Complex to the Kentucky Department of Corrections, or KYDOC, originating in 2019 demonstrate our ability to react
quickly to our partners' needs with innovative, flexible and cost-effective solutions. We previously operated these
three correctional facilities for various government partners. We intend to pursue additional opportunities to lease
prison facilities to government and other third-party operators in need of correctional capacity.
In January 2018, we entered into a 20-year lease agreement with the Kansas Department of Corrections, or KDOC,
for a 2,432-bed correctional facility to be constructed in Lansing, Kansas. This transaction represented the first
development of a privately owned, build-to-suit correctional facility to be operated by a government agency through
a long-term lease agreement. We commenced construction of the facility in the first quarter of 2018. In December
2019, the Lansing facility began accepting offenders into the 512-bed minimum security complex ahead of schedule,
with the remaining 1,920-bed medium/maximum security complex completed in January 2020. The new facility
replaced the Lansing Correctional Facility, Kansas' largest correctional complex for adult male inmates, originally
constructed in 1863. We are responsible for facility maintenance throughout the 20-year term of the lease, at which
time ownership will revert to the state of Kansas. We believe we can bring solutions like this to other government
agencies in need of new correctional capacity.
We also remain steadfast in our efforts to contain costs. Approximately 60% of our operating expenses consist of
salaries and benefits. The turnover rate for correctional officers for our company, and for the corrections industry in
general, remains high, and staffing challenges have recently been exacerbated by labor shortages and wage pressures
in the marketplace as further described under the heading "Results of Operations." We are making investments in
systems and processes intended to help manage our workforce more efficiently and effectively, especially with respect
to overtime and costs of turnover. We are also focused on workers' compensation and medical benefits costs for our
employees due to continued rising healthcare costs throughout the country. Effectively managing these staffing costs
requires a long-term strategy to control such costs, and we continue to dedicate resources to enhance our benefits and
provide specialized training and career development opportunities to our staff in order to attract and retain quality
personnel. Finally, we are evaluating potential cost savings opportunities in areas such as inmate medical expenses,
utilities, and maintenance, among others. Through ongoing company-wide initiatives, we continue to focus on efforts
to manage costs and improve operating efficiencies.
Through the combination of our operational initiatives to (i) provide valuable and critically needed services that could
increase our revenues and increase the utilization of our available beds, (ii) deliver new bed capacity through new
facility construction and expansion opportunities, (iii) expand our real estate-only solutions, (iv) grow the utilization
of our community corrections facilities, (v) develop or acquire new business offerings that expand the range of
solutions we provide to government partners and diversify our cash flows, and (vi) contain our operating expenses,
we believe we will be able to maintain our competitive advantage and continue to diversify the range of services we
provide to our customers at an attractive price, thereby producing value for our stockholders. As further explained
under the heading "Liquidity and Capital Resources," through the revocation of our REIT election and revised capital
allocation strategy, following our first priority of reducing debt, we expect to allocate a substantial portion of our free
cash flow to returning capital to stockholders, further enhancing stockholder value.
66
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The consolidated financial statements in this report are prepared in conformity with U.S. generally accepted
accounting principles, or GAAP. As such, we are required to make certain estimates, judgments, and assumptions
that we believe are reasonable based upon the information available. These estimates and assumptions affect the
reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts
of revenue and expenses during the reporting period. A summary of our significant accounting policies is described
in Note 2 of the Notes to the Consolidated Financial Statements contained in this Annual Report. The significant
accounting policies and estimates which we believe are the most critical to aid in fully understanding and evaluating
our reported financial results include the following:
Asset impairments. The primary risk we face for asset impairment charges is associated with facilities we own. As of
December 31, 2023, we had $2.1 billion in property and equipment, including $247.0 million in long-lived assets at
eight idled correctional facilities. The carrying values of the eight idled facilities as of December 31, 2023 were as
follows (in thousands):
Prairie Correctional Facility
Huerfano County Correctional Center
Diamondback Correctional Facility
Marion Adjustment Center
Kit Carson Correctional Center
West Tennessee Detention Facility
Midwest Regional Reception Center
North Fork Correctional Facility
$
13,230
14,058
33,764
9,968
47,638
18,568
49,736
60,044
$ 247,006
As of December 31, 2023, we also had one idled non-core facility in our Safety segment containing 240 beds with a
total net book value of $2.8 million, and two idled facilities in our Community segment, containing an aggregate of
450 beds with an aggregate net book value of $3.4 million.
We incurred operating expenses at these idled facilities of approximately $12.5 million, $9.7 million, and $7.6 million
during the period they were idle for the years ended December 31, 2023, 2022, and 2021, respectively. The amount
for 2021 excludes $2.2 million of operating expenses incurred at our West Tennessee Detention Facility during the
fourth quarter of 2021. The amount for 2022 excludes $3.5 million of operating expenses incurred at the West
Tennessee Detention Facility and the Midwest Regional Reception Center during the three months ended March 31,
2022. The West Tennessee facility was idled upon the expiration of a USMS contract on September 30, 2021, and
the Midwest Regional Reception Center was idled upon the expiration of a USMS contract on December 31, 2021.
We retained a certain staffing level at both facilities through the first three months of 2022 in order to quickly respond
in the event we were able to enter into new contracts with government agencies promptly following the contract
expirations. We also continued to incur expenses related to transportation services provided by staff at the Midwest
Regional Reception Center during the first three months of 2022.
On December 6, 2022, we received notice from the California Department of Corrections and Rehabilitation, or
CDCR, of its intent to terminate the lease agreement for our California City Correctional Center by March 31, 2024,
due to the state's declining inmate population. As part of its annual budget process for the fiscal year ending June 30,
2024, the California legislature approved funding for the lease through March 31, 2024. We have engaged with the
state of California regarding the continued utilization of the California City facility by the CDCR. However, we can
provide no assurance that we will be successful in reaching an agreement for the utilization of the facility beyond
March 31, 2024. We are also marketing the facility to other potential customers.
67
We evaluate the recoverability of the carrying values of our long-lived assets when events suggest that an impairment
may have occurred. Such events primarily include, but are not limited to, the termination of a management contract,
a significant decrease in populations within a facility we own in our Safety and Community segments that we believe
will be longer than short-term, and the expiration and non-renewal of lease agreements in our Properties segment.
We perform the impairment analyses for each of our idle facilities as well as any other properties with indicators of
impairment. Our estimates of recoverability are based on projected undiscounted cash flows that are comparable to
historical cash flows from management contracts or lease agreements at facilities similar to the idled facilities,
including historical operations for the idled facilities when such facilities were operating. Our undiscounted cash flows
factor in assumptions around when idle facilities will commence generating revenues based on our best estimates
around contract negotiations and market conditions. Our impairment evaluations also take into consideration our
historical experience in securing new management contracts to utilize correctional facilities that had been previously
idled for substantial periods of time. Such previously idled correctional facilities are currently being operated under
contracts that continue to generate cash flows resulting in the recoverability of the net book value of the previously
idled facilities by material amounts. Our experience has shown that our facilities could remain idle for substantially
longer periods of time than most other types of commercial real estate and, based upon receipt of a new contract,
produce future cash flows that would still result in a recovery of the carrying values in a relatively short period of time
under the undiscounted cash flows. We also perform sensitivity analyses that consider reductions to such cash flows.
Our sensitivity analyses include reductions in projected cash flows compared to historical cash flows generated by the
respective facility as well as prolonged periods of vacancies.
We also evaluate on a quarterly basis market developments for the potential utilization of each of our idle facilities in
order to identify events that may cause us to reconsider our most recent assumptions. Such events could include
negotiations with a prospective customer for the utilization of an idle facility at terms significantly less favorable than
those used in our most recent impairment analysis, or changes in legislation surrounding a particular facility that could
impact our ability to care for certain types of populations at such facility, or a demolition or substantial renovation of
a facility. Further, a substantial increase in the number of available beds at other facilities we own could lead to a
deterioration in market conditions and cash flows that we might be able to obtain under a new contract at our idle
facilities. Although they are not frequent, an unsolicited offer to purchase any of our idle facilities at amounts that are
less than the carrying value could also cause us to reconsider the assumptions used in our most recent impairment
analysis.
We can provide no assurance that we will be able to secure agreements to utilize our idle properties, or that we will
not incur impairment charges in the future. By their nature, these estimates contain uncertainties with respect to the
extent and timing of the respective cash flows due to potential delays or material changes to historical terms and
conditions in contracts with prospective customers that could impact the estimate of cash flows. With respect to idle
correctional facilities, we believe the long-term trends favor an increase in the utilization of our correctional facilities
and management services. This belief is based on our experience in working with governmental agencies faced with
significant budgetary challenges, which is a primary contributing factor to the lack of appropriated funding over the
past decade to build new bed capacity by the federal and state governments with which we partner, as well as the
extensively aged criminal justice infrastructure in the U.S. today. Due to a variety of factors, the lead time to negotiate
contracts with our federal and state partners to utilize idle bed capacity at correctional facilities is generally lengthy.
68
Self-funded insurance reserves. As of December 31, 2023 and 2022, we had $51.7 million and $49.7 million,
respectively, in accrued liabilities for employee health, workers' compensation, and automobile insurance claims. We
are self-insured for employee health, workers' compensation, and automobile liability insurance claims. As such, our
insurance expense is largely dependent on claims experience and our ability to control our claims. We accrue the
estimated liability for employee health insurance claims based on our history of claims experience and the estimated
time lag between the incident date and the date we pay the claims. We accrue the estimated liability for workers'
compensation claims based on an actuarial valuation of the outstanding liabilities using a combination of actuarial
methods used to project ultimate losses, and our automobile insurance claims based on estimated development factors
on claims incurred. The liability for employee health, workers' compensation, and automobile insurance includes
estimates for both claims incurred and for claims incurred but not reported. In recent history, our methods for
determining our exposure have remained consistent, and our historical trends have been appropriately factored into
our estimates and reserves. As we obtain additional information and refine our methods regarding the assumptions
and estimates we use to recognize liabilities incurred, we will adjust our reserves accordingly. Arriving at these
estimates, however, requires subjective judgment, and as a result these estimates are uncertain, and our actual exposure
may be different from our estimates. It is possible that future cash flows and results of operations could be materially
affected by changes in assumptions and new developments.
Legal reserves. As of December 31, 2023 and 2022, we had $7.8 million and $6.9 million, respectively, in accrued
liabilities under the provisions of Accounting Standards Codification, or ASC, Subtopic 450-20, "Loss
Contingencies," related to certain claims and legal proceedings in which we are involved. We have accrued our best
estimate of the probable costs for the resolution of these claims, if estimable. In addition, we are subject to current
and potential future claims and legal proceedings for which little or no accrual has been reflected because our current
assessment of the potential exposure is nominal, or because we cannot reasonably estimate the amount of loss or range
of loss, if any, that may result. These estimates have been developed in consultation with our General Counsel's office
and, as appropriate, outside counsel handling these matters, and are based upon an analysis of potential results,
assuming a combination of litigation and settlement strategies. It is possible that future cash flows and results of
operations could be materially affected by changes in our assumptions, new developments, or by the effectiveness of
our litigation and settlement strategies.
RESULTS OF OPERATIONS
Our results of operations are impacted by the number of correctional and detention facilities we operated, including
39 we owned and four owned by our government partners (CoreCivic Safety), the number of residential reentry centers
we owned and operated (CoreCivic Community), the number of facilities we leased to government agencies
(CoreCivic Properties), and the facilities we owned that were not in operation. The following table sets forth the
changes in the number of facilities operated for the years ended December 31, 2023 and 2022.
69
Effective
Date
Safety
CoreCivic
Community Properties
10
26
46
Facilities as of December 31, 2021
Expiration of a managed-only contract in
Indiana
Sale of a residential reentry facility in
Colorado
Sale of a residential reentry facility in
Colorado
Sale of two leased community
corrections facilities in California
Sale and subsequent termination of the
contract and lease of the McRae
Correctional Facility in Georgia
Sale of an idled residential reentry
facility in Oklahoma
Facilities as of December 31, 2022
Sale of two leased community
corrections facilities in Pennsylvania
Lease of the Allen Gamble Correctional
Center
Sale of a leased property in
Georgia
Facilities as of December 31, 2023
January 2022
February 2022
March 2022
July 2022
Aug/Nov 2022
December 2022
May 2023
October 2023
December 2023
(1 )
—
—
—
(1 )
—
44
—
(1 )
—
43
—
(1 )
(1 )
—
—
(1 )
23
—
—
—
23
—
—
—
(2 )
—
—
8
(2 )
1
(1 )
6
Total
82
(1 )
(1 )
(1 )
(2 )
(1 )
(1 )
75
(2 )
—
(1 )
72
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022
During the year ended December 31, 2023, net income was $67.6 million, or $0.59 per diluted share, compared with
net income of $122.3 million, or $1.03 per diluted share, for the previous year. Financial results for 2023 reflected an
$0.8 million gain on the sale of real estate assets, $2.7 million of asset impairments, and $0.7 million of expenses
associated with debt repayments and refinancing transactions. For the year ended December 31, 2023, income tax
expense reflects a net expense of $0.2 million associated with these special items and a change in our corporate
structure.
Financial results for 2022 reflected an $87.7 million gain on the sale of real estate assets, $8.1 million of expenses
associated with debt repayments and refinancing transactions, $4.4 million of asset impairments, and $1.9 million
associated with shareholder litigation expense. For the year ended December 31, 2022, income tax expense reflects a
net expense of $19.3 million associated with these special items.
Our Current Operations
Our ongoing operations are organized into three principal business segments:
• CoreCivic Safety segment, consisting of the 43 correctional and detention facilities that are owned, or
controlled via a long-term lease, and managed by CoreCivic, as well as those correctional and detention
facilities owned by third parties but managed by CoreCivic. CoreCivic Safety also includes the operating
results of our subsidiary that provides transportation services to governmental agencies, TransCor America,
LLC, or TransCor.
• CoreCivic Community segment, consisting of the 23 residential reentry centers that are owned, or controlled
via a long-term lease, and managed by CoreCivic. CoreCivic Community also includes the operating results
of our electronic monitoring and case management services.
• CoreCivic Properties segment, consisting of the 6 correctional real estate properties owned by CoreCivic.
For the years ended December 31, 2023 and 2022, our total segment net operating income, which we define as facility
revenue (including interest income associated with finance leases) less operating expenses, was divided among our
three business segments as follows:
70
Segment:
Safety
Community
Properties
Facility Operations
For the Years Ended December 31,
2022
2023
84.7 %
5.2 %
10.1 %
84.1 %
3.9 %
12.0 %
A key performance indicator we use to measure the revenue and expenses associated with the operation of the
correctional, detention, and residential reentry facilities we own or manage is expressed in terms of a compensated
man-day, which represents the revenue we generate and expenses we incur for one offender for one calendar
day. Revenue and expenses per compensated man-day are computed by dividing facility revenue and expenses by the
total number of compensated man-days during the period. A compensated man-day represents a calendar day for
which we are paid for the occupancy of an offender. We believe the measurement is useful because we are
compensated for operating and managing facilities at an offender per diem rate based upon actual or minimum
guaranteed occupancy levels. We also measure our costs on a per compensated man-day basis, which are largely
dependent upon the number of offenders we accommodate. Further, per compensated man-day measurements are also
used to estimate our potential profitability based on certain occupancy levels relative to design capacity. Revenue and
expenses per compensated man-day for all of the correctional, detention, and residential reentry facilities placed into
service that we owned or managed, exclusive of those held for lease, and for TransCor were as follows for the years
ended December 31, 2023 and 2022:
Revenue per compensated man-day
Operating expenses per compensated man-day:
Fixed expense
Variable expense
Total
Operating income per compensated man-day
Operating margin
Average compensated occupancy
Average available beds
Average compensated population
For the Years Ended
December 31,
2023
2022
$
98.06
$
93.26
$
55.40
21.19
76.59
$
21.47
21.9 %
71.6 %
51.41
21.31
72.72
20.54
22.0 %
70.3 %
70,647
50,566
73,165
51,446
71
Revenue
Total revenue consists of management revenue we generate through CoreCivic Safety and CoreCivic Community in
the operation of correctional, detention, and residential reentry facilities, as well as the revenue we generate from
TransCor and our electronic monitoring and case management services. Total revenue also consists of lease revenue
we generate through CoreCivic Properties from facilities we lease to third-party operators. The following table reflects
the components of revenue for the years ended December 31, 2023 and 2022 (in millions):
For the Years Ended
December 31,
2023
2022
$ Change % Change
Management revenue:
Federal
State
Local
Other
Total management revenue
Lease revenue
Other revenue
Total revenue
$
995.2 $
738.6
36.0
76.7
1,846.5
49.9
0.2
994.7 $
669.2
35.5
87.9
1,787.3
57.9
0.1
$ 1,896.6 $ 1,845.3 $
0.5
69.4
0.5
(11.2 )
59.2
(8.0 )
0.1
51.3
0.1 %
10.4 %
1.4 %
(12.7 %)
3.3 %
(13.8 %)
100.0 %
2.8 %
The $59.2 million, or 3.3%, increase in total management revenue was primarily a result of an increase in revenue of
approximately $88.6 million driven primarily by an increase of 5.1% in average revenue per compensated man-day.
The increase in management revenue was partially offset by a decrease in revenue of $29.9 million driven primarily
by a decrease in average daily compensated population from 2022 to 2023, as discussed further hereinafter. The
increase in average revenue per compensated man-day primarily resulted from the effect of per diem increases at
several of our facilities. We believe the impact of these per diem increases will provide further benefit to our operating
margins as residential populations continue to recover from the impact of COVID-19 and will help offset the wage
and employee benefit increases we have been incurring, as further discussed hereinafter. Revenue generated from our
electronic monitoring and case management services during 2023 increased $0.5 million (from $36.2 during 2022 to
$36.7 million during 2023).
Average daily compensated population decreased 880, or 1.7%, to 50,566 in 2023 compared to 51,446 in 2022. The
decrease in average daily compensated population was primarily a result of the contract expiration at the 1,978-bed
McRae Correctional Facility effective November 30, 2022, as further described hereinafter. The decrease in average
daily compensated population was partially offset by an increase in average population at our 3,060-bed La Palma
Correctional Center, which was a result of a new management contract from the state of Arizona, and by an increase
in occupancy at facilities where ICE is our federal partner, both as further discussed hereinafter.
The solutions we provide to our federal customers, including primarily ICE and the USMS, continue to be a significant
component of our business. The federal customers in our Safety and Community segments generated approximately
52% and 54% of our total revenue in 2023 and 2022, respectively, increasing $0.5 million, or 0.1%, in 2023 from
2022. The increase in federal revenue was primarily a result of increased occupancy and per diem increases at certain
facilities. The increase in federal revenue was partially offset by the impact of the expiration of the contract with the
BOP at the McRae facility, which resulted in a reduction in federal revenue of $37.8 million (2.0% of our total revenue)
during 2023 from 2022, and as a result of the transition at our La Palma facility, as further described hereinafter.
72
The decision near the end of the first quarter of 2020 by the federal government 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 COVID-19, a policy known as Title 42, resulted in a reduction in people being
apprehended and detained by ICE. The financial impact was somewhat mitigated by fixed monthly payments from
ICE at certain of our facilities, to ensure ICE has adequate bed capacity in the event of a surge in the future. Based
on COVID-19 trends, the Department of Health and Human Services allowed Title 42 to expire on May 11, 2023,
which has resulted in an increase in the number of undocumented people permitted to enter the United States claiming
asylum, and has resulted in an increase in the number of people apprehended and detained by ICE. Due to fixed
payments under many of our federal contracts, the increase in residential populations does not result in a proportionate
increase in our financial results at such facilities until populations clear the fixed payment levels for certain bed
capacity. Residential populations under certain of our federal contracts largely cleared the minimum compensated
bed total associated with fixed payments during the second half of 2023. During 2023 and 2022, revenue from ICE
was $565.5 million and $527.3 million, respectively, compared to $579.5 million during 2019, prior to the
implementation of Title 42. Revenue from ICE during 2023 increased at facilities other than our La Palma facility by
$71.4 million from 2022 due to increased occupancy and the impact of per diem increases at certain facilities. During
2022, revenue from ICE at our La Palma facility was $33.2 million. This facility was transitioned from an ICE
population to a population from the state of Arizona throughout 2022, with the offender intake process being
substantially completed during the fourth quarter of 2022.
State revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased
$69.4 million, or 10.4%, from 2022 to 2023. State revenues increased primarily as a result of the new management
contract with the state of Arizona at our 3,060-bed La Palma Correctional Center for up to 2,706 inmates, as the state
transferred inmate populations from public sector facilities into our La Palma facility. We began receiving inmates
from the state of Arizona in April 2022 and as of December 31, 2023, we cared for approximately 2,200 inmates from
the state of Arizona at this facility. State revenue at the La Palma facility increased $48.9 million during 2023
compared with 2022. State revenues also increased as a result of per diem increases under a number of our state
contracts, as many of our state partners have recognized the need to provide additional funding to address increases
in the wages of our employees. Finally, state revenues also increased due to higher utilization from Montana and
Wyoming due to new management contracts executed during 2023, as well as higher utilization under existing
management contracts most notably from the states of Idaho and Colorado. The increase in state revenues was
partially offset by a decrease in state revenues at our Allen Gamble Correctional Center that resulted from a new lease
agreement effective October 1, 2023, as further described hereinafter.
Local revenues from contracts at correctional, detention, and residential reentry facilities that we operate increased
$0.5 million, or 1.4%, from 2022 to 2023. The new contracts with Harris County, Texas and Hinds County,
Mississippi at our Tallahatchie County Correctional Facility, as further described hereinafter, contributed to the
increase in local revenues.
The $8.0 million, or 13.8%, decrease in lease revenue from 2022 to 2023 primarily resulted from the termination of
the lease at our North Fork Correctional Facility effective June 30, 2023, partially offset by the new lease revenue at
our Allen Gamble Correctional Center from a new lease agreement that became effective October 1, 2023, both as
further described hereinafter.
Operating Expenses
Operating expenses totaled $1,462.4 million and $1,413.8 million in 2023 and 2022, respectively. Operating expenses
consist of those expenses incurred in the operation and management of correctional, detention, and residential reentry
facilities, as well as those expenses incurred in the operations of TransCor and our electronic monitoring and case
management services. Operating expenses also consist of those expenses incurred in the operation of facilities we
lease to third-party operators.
73
Operating expenses incurred by CoreCivic Safety and CoreCivic Community in connection with the operation and
management of our correctional, detention, and residential reentry facilities, as well as those incurred in the operations
of TransCor and our electronic monitoring and case management services, increased $48.8 million, or 3.5%, during
2023 compared with 2022. Operating expenses increased primarily as a result of wage increases resulting from labor
shortages and wage pressures, as further described hereinafter. We achieved higher staffing levels during 2023 when
compared to 2022, and correspondingly, we were able to reduce our use of temporary incentives by $9.8 million
during 2023 as we began to see improvement in our attraction and retention of facility staff in this challenging labor
market. We believe these significant investments in our workforce have positioned us to manage the increased number
of residents we have begun to experience now that the remaining occupancy restrictions caused by the COVID-19
pandemic, most notably Title 42, have been removed. We have continued to invest in staffing resources during 2023,
which has resulted in additional compensation and incremental expenses, and we expect to continue to invest in
staffing resources in future quarters, which may result in additional compensation and incremental expenses. As the
labor market improves and labor shortages and wage pressures are alleviated, which we believe will take some
additional time, we expect to further reduce our reliance on temporary incentives. While we have achieved recent
successes, the benefits of our investments in staffing may not be sustained, and labor shortages could intensify again
in the future. Additionally, operating expenses increased as a result of expenses incurred at our La Palma Correctional
Center as utilization of the facility increased under the new contract with the state of Arizona while we contended
with a challenging labor market. The increase in operating expenses was partially offset by the contract expiration at
the 1,978-bed McRae Correctional Facility effective November 30, 2022, and the new lease of our Allen Gamble
Correctional Center effective October 1, 2023.
Total expenses per compensated man-day increased to $76.59 during 2023 from $72.72 during 2022. We have
experienced labor shortages and wage pressures in many markets across the country, and have provided customary
inflationary wage increases to remain competitive. Recruiting has been particularly challenging since the start of the
pandemic due to the front-line nature of the services we provide and the shortage of nursing staff across the country
intensified as a result of the COVID-19 pandemic and the challenging labor market. The challenges of recruiting and
retaining staff, including nursing, has been and could continue to be exacerbated by the current labor market. Further,
we have incurred incremental expenses to help ensure sufficient staffing levels under unique and challenging working
conditions. While, as mentioned in the preceding paragraph, we were able to reduce the use of these temporary
incentives by $9.8 million during 2023 when compared to 2022, we expect to continue to incur a certain level of
incremental expenses in future quarters. Incremental expenses include, but may not be limited to, incentive payments
to our front-line and field staff, temporary employee housing expenses and other travel related reimbursements,
additional paid time off, off-cycle wage increases in certain markets to remain competitive, and registry nursing
expenses. These incremental investments have enabled us to increase overall staffing levels, as described in the
preceding paragraph, which has contributed to the increase in total expenses per compensated man-day.
We continually monitor compensation levels very closely along with overall economic conditions and will adjust
wage levels necessary to help ensure the long-term success of our business. Further, we continually evaluate the
structure of our employee benefits package and training programs to ensure we are better able to attract and retain our
employees. Salaries and benefits represent the most significant component of our operating expenses, representing
approximately 60% and 59% of our total operating expenses during 2023 and 2022, respectively. As previously
mentioned, recruiting and retaining staff has been particularly challenging for us and for the corrections and detention
industry as a whole. An inability to attract and retain sufficient personnel could prevent us from caring for additional
residential populations for government agencies in need of additional capacity due to an increase in inmate populations
or an inability to adequately staff their facilities. An inability to attract and retain sufficient personnel in our existing
facilities could also cause our government partners to assess liquidated damages, reduce our residential populations,
or in certain circumstances, cancel our contracts. We have also been subjected to staff vacancy deductions as a result
of the labor shortages, which are reflected as reductions to other management revenue. Estimating vacancy deduction
amounts can be complex and subject to management judgment and estimations. Some of our government partners
have granted waivers for vacancy deductions in recognition of the unique and challenging labor market, while others
have discretionarily adjusted such deductions based on our extraordinary costs, efforts and incentive programs
implemented to attract and retain staff.
Variable expenses per compensated man-day decreased to $21.19 during 2023 from $21.31 during 2022. The decrease
in variable expenses per compensated man-day during 2023 was primarily a result of a decrease in registry nursing
expense of $19.3 million, or $1.02 per compensated man-day, during 2023 when compared to 2022. The decrease in
74
registry nursing expenses was partially offset by the effect of a high inflation rate applicable to all of our variable
expenses, as well as increases in recruiting expenses and travel expenses as we supported our staff who were
temporarily deployed across the Company to help address the labor shortages we experienced in certain regions, most
notably at our La Palma facility in Arizona. While the shortage of nursing staff across the country continues to be
challenging, we have seen, and continue to see, improvement in our recruiting and retention of facility staff, including
nursing staff, as we have made investments in higher wages and increased our use of part-time positions, which helped
us achieve higher staffing levels. The hiring environment for these positions has also improved.
Operating expenses incurred by CoreCivic Properties in connection with facilities we lease to third-party operators
increased $0.1 million, or 1.1%, during 2023 when compared to 2022. The increase was primarily a result of the new
lease at our Allen Gamble Correctional Center effective October 1, 2023, partially offset by a reduction in operating
expenses primarily attributable to a decrease in utilities expense at our California City Correctional Center due to a
reduction in inmate populations.
Facility Management Contracts
We enter into facility management contracts to provide bed capacity and management services to governmental
entities in our CoreCivic Safety and CoreCivic Community segments for terms typically ranging from three to five
years, with additional renewal periods at the option of the contracting governmental agency. Accordingly, a substantial
portion of our facility management contracts are scheduled to expire each year, notwithstanding contractual renewal
options that a government agency may exercise. Although we generally expect these customers to exercise renewal
options or negotiate new contracts with us, one or more of these contracts may not be renewed by the corresponding
governmental agency. Further, our government partners can generally terminate our management contracts for non-
appropriation of funds or for convenience.
Additionally, on January 26, 2021, President Biden issued the Private Prison EO. The Private Prison EO directs the
Attorney General to not renew DOJ contracts with privately operated criminal detention facilities. Two agencies of
the DOJ, the BOP and the USMS, utilize our services. The BOP houses inmates who have been convicted, and the
USMS is generally responsible for detainees who are awaiting trial. The BOP has experienced a steady decline in
inmate populations over the last decade, a trend that was accelerated by the COVID-19 pandemic. Our remaining
prison contract with the BOP at the 1,978-bed McRae Correctional Facility expired on November 30, 2022 and was
not renewed. Following the non-renewal of the BOP contract in 2022 and sale of the McRae facility to the state of
Georgia in 2022, we no longer operate any prison contracts for the BOP. The Private Prison EO only applies to
agencies that are part of the DOJ, which includes the BOP and USMS. ICE facilities are not covered by the Private
Prison EO, as ICE is an agency of the DHS, not the DOJ. For the year ended December 31, 2023, USMS and ICE
accounted for 21% ($400.4 million) and 30% ($565.5 million), respectively, of our total revenue. For the year ended
December 31, 2022, USMS and ICE accounted for 22% ($403.9 million) and 29% ($527.3 million), respectively, of
our total revenue.
Unlike the BOP, the USMS does not own detention capacity and relies on the private sector, along with various
government agencies, for its detainee population. We currently have two detention facilities that have direct contracts
with the USMS. Because of the lack of alternative bed capacity, one of the contracts was renewed upon its expiration
in September 2023, and now expires in September 2028. The second direct contract expires in September 2025. It is
too early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
On December 6, 2022, we received notice from the CDCR of its intent to terminate the lease agreement for our 2,560-
bed California City Correctional Center by March 31, 2024, due to the state's declining inmate population. As part of
its annual budget process for the fiscal year ending June 30, 2024, the California legislature approved funding for the
lease through March 31, 2024. We have engaged with the state of California regarding the continued utilization of our
California City facility by the CDCR. However, we can provide no assurance that we will be successful in reaching
an agreement for the utilization of the facility beyond March 31, 2024. We are also marketing the facility to other
potential customers. Rental revenue generated from the CDCR at the California City facility was $31.1 million and
$34.0 million for 2023 and 2022, respectively. Facility net operating income at the facility was $25.5 million and
$27.9 million for 2023 and 2022, respectively.
75
Based on information available as of the date of this Annual Report, other than the previously mentioned lease
agreement with the CDCR for our California City facility, we believe we will renew all other contracts with our
government partners that have expired or are scheduled to expire within the next twelve months that could have a
material adverse impact on our financial statements. We believe our renewal rate on existing contracts remains high
due to a variety of reasons including, but not limited to, the constrained supply of available beds within the U.S.
correctional system, our ownership of the majority of the beds we operate, and the cost effectiveness of the services
we provide. However, we can provide no assurance that we will continue to achieve high renewal rates in the future.
CoreCivic Safety
CoreCivic Safety includes the operating results of the correctional and detention facilities that we operated during
each period. Total revenue generated by CoreCivic Safety increased $47.4 million, or 2.8%, from $1,684.0 million
during 2022 to $1,731.4 million during 2023. CoreCivic Safety's facility net operating income increased $4.5 million,
or 1.2%, from $370.5 million during 2022 to $374.9 million during 2023. During 2023 and 2022, CoreCivic Safety
generated 84.7% and 84.1%, respectively, of our total segment net operating income.
The following table displays the revenue and expenses per compensated man-day for CoreCivic Safety's correctional
and detention facilities placed into service that we own and manage and for the facilities we manage but do not own,
inclusive of the transportation services provided by TransCor:
CoreCivic Safety Facilities:
Revenue per compensated man-day
Operating expenses per compensated man-day:
Fixed expense
Variable expense
Total
Operating income per compensated man-day
Operating margin
Average compensated occupancy
Average available beds
Average compensated population
For the Years Ended December 31,
2023
2022
$
99.53
$
94.85
$
56.25
21.72
77.97
$
21.56
21.7 %
72.2 %
65,978
47,662
52.13
21.85
73.98
20.87
22.0 %
71.2 %
68,296
48,643
Operating margins in the CoreCivic Safety segment have been negatively impacted by increased operating expenses
per man-day, which was driven primarily by incremental staffing levels, higher wage rates and other related expenses.
As previously described herein, we have experienced labor shortages and wage pressures in many markets across the
country, and have provided inflationary wage increases above historical averages to remain competitive, including
increases to most of our facility staff during July of the last three years since the COVID-19 pandemic started. Further,
we have incurred incremental expenses to help ensure sufficient staffing levels under unique and challenging working
conditions, including but not limited to, shift incentive bonuses, recruiting and retention bonuses, temporary employee
housing expenses and travel reimbursements, off-cycle wage increases, as well as relocation incentives. While, as
previously described herein, we were able to reduce the use of these temporary incentives during 2023 when compared
to 2022, we expect to continue to incur a certain level of additional incremental expenses in future quarters as we
expect to continue to invest in staffing resources. We believe the significant investments we have made in our
workforce have positioned us to meet the emerging needs of our government partners, as certain government agencies
are experiencing an increase in the need for correctional and detention capacity in a post-pandemic environment,
including as a result of the expiration of Title 42. The negative impact on operating margins resulting from these
factors was partially offset by a 4.9% increase in average revenue per compensated man-day during 2023 when
compared to 2022. The increase in average revenue per compensated man-day resulted from the effect of per diem
increases at several of our facilities, as we have received per diem increases resulting from additional government
appropriations funding to address increases in the wages of our employees.
76
In December 2021, we were awarded a new management contract from the state of Arizona for up to 2,706 inmates
at our 3,060-bed La Palma Correctional Center in Arizona. The State closed an outdated public-sector prison and
transferred the inmate populations from this prison and multiple other public-sector prisons to our La Palma facility.
The transfer began in April 2022 with the offender intake process being substantially completed during the fourth
quarter of 2022. During 2023, the average daily population was 2,421 inmates from the state of Arizona at our La
Palma facility. During the first quarter of 2022, before the new contract commenced, the La Palma facility supported
the mission of ICE by caring for an average daily population of 1,678 detainees. The management contract expands
and strengthens our relationship with the state of Arizona and we believe will maximize the utilization of our La Palma
facility, while providing ICE with the ability to continue its mission under existing contracts at alternative facilities
we own and operate in the same geographic region. The transition of populations from ICE detainees to inmates from
the state of Arizona has resulted in the disruption of earnings and cash flows since the first quarter of 2022, and we
expect this disruption will continue until we stabilize the operating expense structure at this facility by reducing
incremental expenses associated with temporary staffing, which we have recently begun to experience. Facility net
operating income generated by the La Palma facility decreased by $8.4 million during 2023, contributing to the slight
decline in operating margin in the CoreCivic Safety segment when compared with 2022.
As previously described herein, we had one prison contract with the BOP at our 1,978-bed McRae Correctional
Facility, which expired in November 2022 and was not renewed. During 2022, this facility generated facility net
operating income of $6.4 million. We entered into a Purchase and Sale Agreement with the Georgia Building Authority
to purchase the McRae facility in July 2022 and completed the sale in August 2022. We leased the McRae Correctional
Facility from the Georgia Building Authority through November 30, 2022 to allow us to fulfill our obligations to the
BOP. We generated net sales proceeds of $129.7 million on the sale of the McRae facility, resulting in a net gain on
the sale of $77.5 million, which we recognized in the third quarter of 2022.
On June 14, 2023, we announced that we entered into a lease agreement with the ODC for our 1,670-bed Allen Gamble
Correctional Center which, until October 1, 2023, we reported in our CoreCivic Safety segment and operated under a
management contract with the ODC. The management contract was scheduled to expire on June 30, 2023. However,
effective July 1, 2023, we entered into a 90-day contract extension for the management contract, after which time,
operations of the Allen Gamble facility transferred from us to the ODC in accordance with the new lease
agreement. The new lease agreement includes a base term commencing October 1, 2023, with a scheduled expiration
date of June 30, 2029, and unlimited two-year renewal options. Annual lease revenue to be generated from the ODC
at the Allen Gamble facility under the new lease agreement will be $7.5 million during the base term. The annual rent
during each renewal option term shall be mutually agreed upon by the parties. Management revenue generated from
the ODC at the Allen Gamble facility was $23.0 million and $29.1 million for 2023 during the period it was reported
in the Safety segment and 2022, respectively. The Allen Gamble facility incurred a net operating loss of $1.2 million
during the period it was reported in the Safety segment during 2023, compared with a net operating loss of $0.9 million
during 2022. Upon commencement of the new lease agreement, the Allen Gamble facility has been reported in our
CoreCivic Properties segment.
On September 25, 2023, we announced that we signed a new management contract with Hinds County, Mississippi
to care for up to 250 adult male pre-trial detainees at our 2,672-bed Tallahatchie County Correctional Facility in
Tutwiler, Mississippi. The initial contract term is for two years, which may be extended for an additional year upon
mutual agreement. We began receiving inmates from Hinds County during October 2023. In addition, on November
16, 2023, we announced that we signed a new management contract with the state of Wyoming to care for up to 240
male inmates at the Tallahatchie facility. The term of the new contract runs through June 30, 2026. We began
receiving inmates from Wyoming in November 2023. Also on November 16, 2023, we announced that we signed a
new contract with Harris County, Texas, to care for up to 360 male inmates at the Tallahatchie facility. Upon mutual
agreement, Harris County may access an additional 360 beds at the facility. The initial contract term began on
December 1, 2023, and is scheduled to expire on November 30, 2024. However, the contract may be extended at
Harris County's option for up to four additional one-year terms. We began receiving inmates from Harris County in
December 2023. During the fourth quarter of 2023, we provided off-cycle wage increases to help ensure sufficient
staffing levels to accommodate the sudden increase in occupancy. Nonetheless, these three new contracts are expected
to result in an increase in facility net operating income at the Tallahatchie facility.
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On November 14, 2023, we announced that we signed a new management contract with the state of Montana to care
for up to 120 inmates at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona. The new contract is scheduled
to expire on October 31, 2025, and may be extended by mutual agreement for a total term of up to seven years. We
began receiving inmates from the state of Montana in November 2023. We currently care for residents from the state
of Hawaii and the state of Idaho at the Saguaro 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.
CoreCivic Community
CoreCivic Community includes the operating results of the residential reentry centers that we operated during each
period, along with the operating results of our electronic monitoring and case management services. Total revenue
generated by CoreCivic Community increased $11.8 million, or 11.4%, from $103.3 million during 2022 to $115.1
million during 2023. CoreCivic Community's facility net operating income increased $5.9 million, or 34.4%, from
$17.2 million during 2022 to $23.2 million during 2023. During 2023 and 2022, CoreCivic Community generated
5.2% and 3.9%, respectively, of our total segment net operating income.
The following table displays the revenue and expenses per compensated man-day for CoreCivic Community's
residential reentry facilities placed into service that we own and manage, but exclusive of the electronic monitoring
and case management services given that revenue is not generated on a per compensated man-day basis for these
services:
CoreCivic Community Facilities:
Revenue per compensated man-day
Operating expenses per compensated man-day:
Fixed expense
Variable expense
Total
Operating income per compensated man-day
Operating margin
Average compensated occupancy
Average available beds
Average compensated population
For the Years Ended December 31,
2023
2022
$
73.98
$
65.58
$
41.50
12.37
53.87
$
20.11
27.2 %
62.2 %
4,669
2,904
38.84
11.94
50.78
14.80
22.6 %
57.6 %
4,869
2,803
Similar to our CoreCivic Safety segment, operating margins in our CoreCivic Community segment were negatively
impacted during 2023 by increased operating expenses per man-day, which were driven primarily by higher staffing
levels and wage rates. However, the effect of the increased operating expenses was more than offset during 2023
when compared to 2022 by an increase in average revenue per compensated man-day during 2023. Average revenue
per compensated man-day increased primarily as a result of per diem increases and increased occupancy under certain
contracts. Similar to our CoreCivic Safety segment, occupancy in our CoreCivic Community facilities has not yet
returned to pre-pandemic occupancy levels due to a variety of factors being evaluated by our government partners,
including appropriated funding for non-secure residential contracts. However, we do expect the current favorable
occupancy trend to continue in our Community segment as our government partners return to residential reentry
programs that we offer that help individuals be better prepared for successfully transitioning back into our
communities. Because facilities in our Community segment are typically smaller in size than those in our Safety
segment, occupancy changes have a larger impact on operating margin per compensated man-day. Accordingly,
modest changes in occupancy can have a notable impact in our Community segment.
Also contributing to the improved average compensated occupancy in the CoreCivic Community segment during 2023
were the sales of our 120-bed Fox Facility and Training Center and our 90-bed Ulster Facility in the first quarter of
2022. The two facilities were located in Denver, Colorado and had been under-utilized by Denver County. Also
contributing to the improved average compensated occupancy in the CoreCivic Community segment during 2023 was
the sale of an idled residential reentry center in Oklahoma City, Oklahoma in December 2022.
78
In January 2024, we also completed the sale of our 120-bed Dahlia Facility, another residential reentry center in
Denver, Colorado. The Dahlia facility was reported as an asset held for sale as of December 31, 2023. We received
gross sales proceeds of $8.0 million on the sale of the Dahlia facility compared to the carrying value of $7.5 million,
resulting in a nominal net gain on the sale after transaction related expenses, which will be recognized in the first
quarter of 2024. We will continue to operate the Dahlia facility through the expiration of the current management
contract in June 2024.
CoreCivic Properties
CoreCivic Properties includes the operating results of the properties we leased to government agencies during each
period. Total revenue generated by CoreCivic Properties decreased $8.0 million, or 13.8%, from $57.9 million during
2022 to $49.9 million during 2023. CoreCivic Properties' facility net operating income decreased $8.1 million, or
18.4%, from $44.2 million during 2022 to $36.0 million during 2023. CoreCivic Properties generated operating
margins of 72% and 76% for 2023 and 2022, respectively. The decreases in total revenue and net operating income
were primarily the result of the termination of the lease at our North Fork Correctional Facility effective June 30,
2023, the sale of two actively leased properties in the second quarter of 2023, and the sale of two actively leased
properties in the third quarter of 2022, all as further described hereinafter. These decreases in total revenue and net
operating income were net of increases due to the aforementioned new lease agreement at our Allen Gamble
Correctional Center effective October 1, 2023, which contributed to increases in revenue and net operating income of
$1.9 million and $0.3 million, respectively, during the fourth quarter of 2023, which reflects the period this facility
has been reported in the Properties segment. During 2023 and 2022, CoreCivic Properties generated 10.1% and
12.0%, respectively, of our total segment net operating income.
During July 2022, we sold the Stockton Female Community Corrections Facility and the Long Beach Community
Corrections Center, both located in California, generating net sales proceeds of $10.9 million. During our period of
ownership in 2022, these two properties generated facility net operating income of $0.6 million. We reported an
aggregate net gain on the sale of these two properties of $2.3 million during the third quarter of 2022.
During the third quarter of 2022, we began marketing for sale our Roth Hall Residential Reentry Center and the Walker
Hall Residential Reentry Center, both located in Philadelphia, Pennsylvania. A purchase and sale agreement for these
two Philadelphia properties was executed in March 2023 and the properties were sold on May 2, 2023, generating net
sales proceeds of $5.8 million, resulting in a loss on sale of $25,000, which was reported in the second quarter of
2023. During the year ended December 31, 2022, these two properties generated facility net operating income of $0.2
million. During our period of ownership in 2023, these two properties generated facility net operating income of $0.3
million.
On April 25, 2023, we announced that we received notice from the ODC of its intent to terminate the lease agreement
for our 2,400-bed North Fork Correctional Facility upon the lease expiration on June 30, 2023. Rental revenue
generated from the ODC while the lease was active at the North Fork facility was $6.1 million for 2023 and was $12.2
million for the year ended December 31, 2022. Facility net operating income at this facility was $4.7 million for the
period the lease was active in 2023 and was $9.3 million for the year ended December 31, 2022. Upon expiration of
the lease, the North Fork facility was idled in the third quarter of 2023. We are marketing the facility to potential
customers.
As previously described herein, beginning in the fourth quarter of 2023, a new lease agreement with the ODC for the
Allen Gamble Correctional Center commenced, at which time we began reporting the financial results in the CoreCivic
Properties segment. Annual lease revenue to be generated from the ODC at the Allen Gamble facility under the new
lease agreement of $7.5 million, at a margin expected to be consistent with the average operating margin we report in
this segment, will partially offset the reduction of lease revenue and net operating income that was previously
generated under the lease agreement for the North Fork facility prior to its termination.
On December 6, 2022, we received notice from the CDCR, of its intent to terminate the lease agreement for our 2,560-
bed California City Correctional Center by March 31, 2024, due to the state's declining inmate population. As part of
its annual budget process for the fiscal year ending June 30, 2024, the California legislature approved funding for the
lease through March 31, 2024. We have engaged with the state of California regarding the continued utilization of our
California City facility by the CDCR. However, we can provide no assurance that we will be successful in reaching
79
an agreement for the utilization of the facility beyond March 31, 2024. We are also marketing the facility to other
potential customers. Rental revenue generated from the CDCR at the California City facility was $31.1 million and
$34.0 million for 2023 and 2022, respectively. Facility net operating income at this facility was $25.5 million and
$27.9 million for 2023 and 2022, respectively.
On December 28, 2023, we sold the Augusta Transitional Center, a community corrections facility in Georgia that
was leased to the state of Georgia, for net sales proceeds of $4.5 million, resulting in a gain on sale of $0.5 million.
During 2023 and 2022, this property generated facility net operating income of $0.4 million and $0.5 million,
respectively.
General and administrative expense
For the years ended December 31, 2023 and 2022, general and administrative expenses totaled $136.1 million and
$127.7 million, respectively. General and administrative expenses consist primarily of corporate management salaries
and benefits, professional fees, and other administrative expenses. General and administrative expenses increased
primarily as a result of an increase in corporate management salaries and benefits, which was largely related to higher
incentive-based compensation.
Depreciation and Amortization
For the years ended December 31, 2023 and 2022, depreciation and amortization expense totaled $127.3 million and
$127.9 million, respectively. Depreciation and amortization expense decreased primarily as a result of the previously
described sale of the McRae Correctional Facility in the third quarter of 2022. This reduction was partially offset by
depreciation on renovations completed at several facilities during 2022 and 2023.
Asset impairments
During the third quarter of 2023, we recognized a $2.7 million contract acquisition asset impairment associated with
the pursuit of new contracts with a selected technology vendor, as the agreement with the vendor terminated during
the third quarter of 2023.
Pursuant to the agreement to sell the Oklahoma City Transitional Center in our Community segment, which closed in
the fourth quarter of 2022, we recognized an impairment charge of $3.5 million during the third quarter of 2022
associated with this facility, based on its estimated fair value less costs to sell. Additionally, during the fourth quarter
of 2022, we recognized an impairment charge of $0.7 million based on its estimated fair value pursuant to an
agreement to sell the 60-bed Columbine Facility in Denver, Colorado, an agreement that was terminated in 2023. The
Columbine Facility is an idle residential reentry facility in our Community segment.
Interest expense, net and expenses associated with debt repayments and refinancing transactions
Interest expense is reported net of interest income and capitalized interest for the years ended December 31, 2023 and
2022. Gross interest expense, net of capitalized interest, was $85.3 million and $95.9 million in 2023 and 2022,
respectively. Gross interest expense was based on outstanding borrowings under our revolving credit facility, or
Revolving Credit Facility, our outstanding term loan, or Term Loan, and our Term Loan B (which we repaid in full in
May 2022, as further described hereinafter), our outstanding senior unsecured notes, and our outstanding non-recourse
mortgage note, as well as the amortization of loan costs and unused facility fees. Interest expense during 2023
decreased primarily as a result of the $124.1 million repayment of the remaining balance of the Term Loan B during
May 2022 and as a result of the redemption of the outstanding balance of the 4.625% senior unsecured notes, or the
4.625% Senior Notes, on February 1, 2023, both as further described hereinafter. In addition, the repurchase in the
open market of $80.8 million principal amount of senior unsecured notes during 2022 and $27.9 million during 2023
contributed to the decrease in interest expense. The decrease in interest expense was partially offset by an increase in
interest rates associated with our variable rate debt, as further described hereinafter. During 2022, we incurred charges
of $1.3 million for the write-off of a pro-rata portion of the loan costs associated with open market purchases of the
4.625% Senior Notes and the 8.25% Senior Notes, net of discounts to the principal balance of notes purchased.
80
On May 12, 2022, we entered into a Third Amended and Restated Credit Agreement, or the Previous Bank Credit
Facility, in an aggregate principal amount of $350.0 million, consisting of a $100.0 million Term Loan and a
Revolving Credit Facility with a borrowing capacity of $250.0 million. During the second quarter of 2022, we incurred
charges of $0.8 million for the write-off of a portion of the pre-existing loan costs associated with the credit facility
that was replaced by the Previous Bank Credit Facility, reported as expenses associated with debt repayments and
refinancing transactions.
As further described hereinafter, on October 11, 2023, we entered into a Fourth Amended and Restated Credit
Agreement, or the New Bank Credit Facility, that, among other things, increased the available borrowings under the
Revolving Credit Facility from $250.0 million to $275.0 million and increased the size of the Term Loan from an
initial balance of $100.0 million under the Previous Bank Credit Facility to $125.0 million, extended the maturity date
to October 11, 2028 and made conforming changes to replace the Bloomberg Short-Term Bank Yield, or BSBY, index
with the Secured Overnight Financing Rate, or SOFR. At the closing of the New Bank Credit Facility, we received
approximately $33.8 million of net borrowings before transaction costs as a result of the increased size of the Term
Loan, and our Revolving Credit Facility remains unused, except for $17.9 million in outstanding letters of credit.
During 2023, we incurred charges of $0.7 million primarily associated with the New Bank Credit Facility and for the
write-off of loan costs associated with the purchase of $21.0 million of our 8.25% Senior Notes and $6.9 million of
our 4.75% senior unsecured notes through open market purchases, net of discounts to the principal balance of the
notes repurchased.
On May 19, 2022, we voluntarily repaid in full the debt outstanding under our Term Loan B, amounting to $124.1
million, and satisfied all of our outstanding obligations under the Term Loan B. We did not incur any prepayment
penalties in connection with the repayment of the Term Loan B, which had a scheduled maturity of December 18,
2024. The prepayment was made in full with cash on hand. The Term Loan B bore interest at LIBOR plus 4.50%,
with a 1.00% LIBOR floor (or, at our option, a base rate plus 3.50%). During the second quarter of 2022, we incurred
charges of $6.0 million associated with the write-off of the remaining unamortized debt issuance costs and original
issue discount resulting from the prepayment of the Term Loan B, reported as expenses associated with debt
repayments and refinancing transactions.
On December 22, 2022, we delivered an irrevocable notice to the holders of the 4.625% Senior Notes that we elected
to redeem in full the 4.625% Senior Notes that remained outstanding on February 1, 2023. The 4.625% Senior Notes
were redeemed on February 1, 2023 at a redemption price equal to 100% of the principal amount of the outstanding
4.625% Senior Notes, which amounted to $153.8 million, plus accrued and unpaid interest to, but not including, the
redemption date. We used a combination of cash on hand and available capacity under our Revolving Credit Facility
to fund the redemption. Following the redemption of the 4.625% Senior Notes, we have no debt maturities until 2026.
Based on our total leverage ratio, interest on loans under our Previous Bank Credit Facility through October 10, 2023
were at a base rate plus a margin of 2.25% or at BSBY plus a margin of 3.25%, and a commitment fee equal to 0.45%
of the unfunded balance of the Revolving Credit Facility. Based on our total leverage ratio, interest on loans under
our New Bank Credit Facility since October 11, 2023 were at a base rate plus a margin of 2.25% or at the SOFR rate
plus a margin of 3.25%, and a commitment fee equal to 0.45% of the unfunded balance of the Revolving Credit
Facility. In an effort to mitigate inflation, the Federal Reserve increased interest rates throughout 2022 and continued
to increase interest rates in 2023. Although we continue to be exposed to rising interest rates, we have reduced our
exposure to rising interest rates by paying down our variable rate debt. The only remaining variable rate debt we have
is associated with our Term Loan, which had an outstanding balance of $125.0 million as of December 31, 2023, and
our Revolving Credit Facility which, as of December 31, 2023, had no borrowings outstanding.
Gross interest income was $12.3 million and $10.9 million in 2023 and 2022, respectively. Gross interest income is
earned on notes receivable, investments, cash and cash equivalents, and restricted cash. Interest income also includes
interest income associated with the 20-year finance receivable associated with the Lansing Correctional Facility lease
to the KDOC, which commenced in January 2020, and amounted to $8.5 million and $8.7 million in 2023 and 2022,
respectively. Total capitalized interest was $1.0 million during 2022.
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Gain on sale of real estate assets, net
Gain on sale of real estate assets, net during the year ended December 31, 2023, includes the $0.5 gain on the sale of
the Augusta Transitional Center in Georgia in our Properties segment, as previously described herein. The gain on the
sale was recorded in the fourth quarter of 2023. In addition, during the third quarter of 2023, we sold a vacant parcel
of land generating net sales proceeds of $0.5 million and resulting in a gain on sale of $0.4 million. The gain was
reported in the third quarter of 2023.
Gain on sale of real estate assets, net during the year ended December 31, 2022, primarily includes the gains on the
sales of the McRae Correctional Facility in our Safety segment and the Stockton Female Community Corrections
Facility and the Long Beach Community Corrections Center in our Properties segment, all of which were recorded in
the third quarter of 2022, as previously described herein. Gain on sale of real estate assets, net during 2022 also
includes gains related to the sales of certain other real estate properties, including two vacant land parcels.
Income tax expense
We recorded income tax expense of $28.2 million and $43.0 million during the years ended December 31, 2023 and
2022, respectively. Income tax expense for 2023 included an increase to income tax expense of $0.9 million for the
revaluation of net deferred tax liabilities associated with a change in our corporate tax structure. During the first
quarter of 2023, we completed a reorganization of our tax structure to simplify and more closely align operations and
assets of certain of our subsidiaries and to reduce administrative efforts following our conversion from a real estate
investment trust to a taxable C-corporation. Income tax expense related to operations for 2023 was net of an income
tax benefit of $0.8 million associated with asset impairments and expenses associated with debt repayments and
refinancing transactions, net of the gain on sale of real estate assets. Income tax expense related to operations for
2022 included an income tax expense of $19.3 million associated with the gain on sale of real estate assets previously
described, partially offset by an income tax benefit associated with shareholder litigation expenses, asset impairments,
and expenses associated with debt repayments and refinancing transactions previously described.
Our effective tax rate could fluctuate in the future based on changes in estimates of taxable income, the implementation
of additional tax planning strategies, changes in federal or state tax rates or laws affecting tax credits available to us,
changes in other tax laws, limits on certain deductible expenses, changes in estimates related to uncertain tax positions,
or changes in state apportionment factors, as well as changes in the valuation allowance applied to our deferred tax
assets that are based primarily on the amount of state net operating losses and tax credits that could expire unused.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021
Pursuant to Regulation S-K item 303, a detailed review of our performance for the year ended December 31, 2022
compared to our performance for the year ended December 31, 2021 is set forth in "Part 2, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for
the year ended December 31, 2022, filed with the SEC on February 21, 2023.
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LIQUIDITY AND CAPITAL RESOURCES
Our principal capital requirements are for working capital, capital expenditures, and debt service payments, as well as
outstanding commitments and contingencies, as further discussed in the notes to our financial statements. Effective
January 1, 2021, we revoked our election to be taxed as a REIT. We believe this conversion in corporate tax structure
improves our overall credit profile, as we are able to allocate our free cash flow toward the repayment of debt, which
may include the purchase of our outstanding debt in open market transactions, privately negotiated transactions or
otherwise, and to exercise more discretion in returning capital to our shareholders. Any such debt repurchases will
depend upon prevailing market conditions, our liquidity requirements, contractual requirements, applicable securities
laws requirements, and other factors. From January 1, 2021 through December 31, 2023, we have repaid $711.5
million of debt, net of the change in cash. Following our first priority of utilizing free cash flow to reduce debt, we
expect to allocate a substantial portion of our free cash flow to returning capital to our shareholders, which could
include share repurchases and/or future dividends. Any future dividend is subject to the Board of Directors', or BODs',
determinations as to the amount of distributions and the timing thereof, as well as limitations under the Company's
debt covenants. We were not able to implement a meaningful share repurchase program under the REIT structure
without increasing our debt because a substantial portion of our free cash flow was required to satisfy the distribution
requirements under the REIT structure. On May 2, 2022, the BOD approved a share repurchase program to purchase
up to $150.0 million of our common stock. On August 2, 2022, the BOD increased the authorization to repurchase
under the share repurchase program by up to an additional $75.0 million of our common stock, which resulted in a
total aggregate authorized amount to repurchase up to $225.0 million of our common stock. Repurchases of our
outstanding common stock will be made in accordance with applicable securities laws and may be made at our
discretion based on parameters set by our BOD from time to time in the open market, through privately negotiated
transactions, or otherwise. The share repurchase program has no time limit and does not obligate us to purchase any
particular amount of our common stock. The authorization for the share repurchase program may be terminated,
suspended, increased or decreased by the BOD in its discretion at any time. Through December 31, 2023, we
completed the repurchase of 10.1 million shares of our common stock at a total cost of $112.6 million, or $11.16 per
share, using cash on hand and cash provided by operations, including 3.5 million shares at a total cost of $38.1 million,
or $10.97 per share, during 2023.
We will also pursue attractive growth opportunities, including new development opportunities in our Properties
segment, to meet the need to modernize outdated correctional infrastructure across the country, and explore potential
opportunities to expand the scope of non-residential correctional alternatives we provide in our Community segment.
With the extensively aged criminal justice infrastructure in the U.S. today, we believe we can bring real estate and
financing solutions to government agencies as we did in connection with the construction of the Lansing Correctional
Facility that commenced operations in January 2020. We financed the construction of the Lansing Correctional
Facility 100% with project specific financing, requiring no equity commitment from us. We believe we can also
provide other real estate solutions to government agencies faced with extensively aged criminal justice infrastructure,
including "turn-key" solutions similar to those we are providing to the state of Arizona in connection with the new
contract that commenced during the second quarter of 2022 at our La Palma Correctional Center, as well as real estate
only solutions to government agencies that need correctional capacity where they prefer to operate the facility, similar
to the lease of our Allen Gamble Correctional Center in Oklahoma to the ODC signed in 2023, as previously described
herein. In addition, in August 2022, we completed the sale of the 1,978-bed McRae Correctional Facility to the Georgia
Building Authority in order to update its aged and inefficient public sector correctional infrastructure. Most real estate
only solutions would not require material capital expenditures if we have existing capacity. However, in the future we
could incur capital expenditures to provide replacement capacity for government agencies that have extensively aged
criminal justice infrastructure and are in need of new capacity.
As of December 31, 2023, we had cash on hand of $121.8 million, and $257.1 million available under our Revolving
Credit Facility. During the years ended December 31, 2023 and 2022, we generated $231.9 million and $153.6
million, respectively, in cash through operating activities. We currently expect to be able to meet our cash expenditure
requirements for the next year and beyond utilizing cash on hand, cash flows from operations, and availability under
our Revolving Credit Facility. As of December 31, 2023, we had no debt maturities until April 2026.
83
Our cash flow is subject to the receipt of sufficient funding of and timely payment by contracting governmental
entities. If the appropriate governmental agency does not receive sufficient appropriations to cover its contractual
obligations, it may terminate our contract or delay or reduce payment to us. Delays in payment from our major
customers, which could include the deferral of payments to us during government shutdowns or the termination of
contracts from our major customers, could have an adverse effect on our cash flow and financial condition. We have
not experienced any unusual delays in payments from our major customers.
Debt
As of December 31, 2023, we had $243.1 million principal amount of unsecured notes outstanding with a fixed stated
interest rate of 4.75% and $593.1 million principal amount of unsecured notes outstanding with a fixed stated interest
rate of 8.25%, or collectively, the Senior Notes. In addition, as of December 31, 2023, we had $145.5 million
outstanding under the Kansas Notes with a fixed stated interest rate of 4.43% and $125.0 million outstanding under
our Term Loan with a variable interest rate of 8.7%. We had $17.9 million of letters of credit outstanding under our
Revolving Credit Facility at December 31, 2023. There was no amount outstanding under our Revolving Credit
Facility as of December 31, 2023. As of December 31, 2023, our total weighted average effective interest rate was
7.6%, while our total weighted average maturity was 4.7 years, and we have no debt maturities until 2026. In 2023,
we purchased $21.0 million of the 8.25% Senior Notes through open market purchases, reducing the outstanding
balance of the 8.25% Senior Notes to $593.1 million as of December 31, 2023. In addition, in 2023, we purchased
$6.9 million of the 4.75% Senior Notes through open market purchases, reducing the outstanding balance of the 4.75%
Senior Notes to $243.1 million as of December 31, 2023. The Senior Notes were purchased at a weighted average
purchase price of 97% of par. In the future, we could elect to use our free cash flow to purchase additional Senior
Notes in open market transactions, privately negotiated transactions or otherwise. We could also use our effective
shelf registration statement to issue additional debt securities when we determine that market conditions and the
opportunity to utilize the proceeds therefrom are favorable.
As previously mentioned, on October 11, 2023, we entered into a New Bank Credit Facility that, among other things,
increased the available borrowings under the Revolving Credit Facility from $250.0 million to $275.0 million and
increased the size of the Term Loan from an initial balance of $100.0 million to $125.0 million, extended the maturity
date to October 11, 2028 and made conforming changes to replace the BSBY index with SOFR. Our financial
covenants were modified to remove the $100.0 million limit of netting unrestricted cash and cash equivalents when
calculating the consolidated total leverage ratio and the consolidated secured leverage ratio. Further, the consolidated
total leverage ratio resulting in a "springing lien" event was increased from 4.00 to 1.00 to 4.25 to 1.00. At the closing
of the New Bank Credit Facility, we received approximately $33.8 million of net borrowings before transaction costs
as a result of the increased size of the Term Loan, and our Revolving Credit Facility remains unused, except for $17.9
million in outstanding letters of credit.
Operating Activities
Our net cash provided by operating activities for the year ended December 31, 2023 was $231.9 million compared
with $153.6 million in 2022. Cash provided by operating activities represents our net income plus depreciation and
amortization, changes in various components of working capital, and various non-cash charges. The increase in cash
provided by operating activities resulted primarily from positive fluctuations in working capital accounts relative to
the prior year.
Investing Activities
Our net cash flow used in investing activities was $58.9 million for the year ended December 31, 2023 and was
primarily attributable to capital expenditures for facility development and expansions of $4.9 million and $65.4 million
for facility maintenance and information technology capital expenditures, partially offset by $11.1 million in net
proceeds from the sale of assets.
Our net cash flow provided by investing activities was $73.0 million for the year ended December 31, 2022 and was
primarily attributable to $157.7 million in net proceeds from the sale of assets, partially offset by capital expenditures
for facility development and expansions of $23.1 million and $58.3 million for facility maintenance and information
technology capital expenditures.
84
Financing Activities
Our net cash flow used in financing activities was $206.2 million for the year ended December 31, 2023 and was
primarily attributable to debt repayments, including $91.2 million related to our previous Term Loan, the $153.8
million redemption of the 4.625% Senior Notes, the $21.0 million purchase of the 8.25% Senior Notes, and the $6.9
million purchase of the 4.75% Senior Notes. In addition, our net cash flow used in financing activities was attributable
to $9.9 million of scheduled principal repayments under our Term Loan and our non-recourse mortgage note. Our net
cash flow used in financing activities also included $43.0 million for the share repurchase program, as well as the
purchase and retirement of common stock that was issued in connection with equity-based compensation, and dividend
payments on restricted stock units that became vested of $0.1 million. These payments were partially offset by the
$125.0 million of proceeds from the aforementioned issuance of the Term Loan in October 2023 associated with the
Fourth Amended and Restated Credit Agreement. We also borrowed $125.0 million on our Revolving Credit Facility,
and repaid such amount during the year.
Our net cash flow used in financing activities was $375.2 million for the year ended December 31, 2022 and was
primarily attributable to debt repayments, including $167.5 million related to our previous Term Loan, $124.1 million
related to our Term Loan B, and $80.6 million related to our 4.625% and 8.25% Senior Notes. In addition, our net
cash flow used in financing activities was attributable to $15.1 million of scheduled principal repayments under our
Term Loan, Term Loan B, and our non-recourse mortgage note. Our net cash flow used in financing activities also
included $79.9 million for the share repurchase program, as well as the purchase and retirement of common stock that
was issued in connection with equity-based compensation, and dividend payments on restricted stock units that
became vested of $0.9 million. These payments were partially offset by the $100.0 million of proceeds from the
aforementioned issuance of the Term Loan in May 2022 associated with the Third Amended and Restated Credit
Agreement.
Supplemental Guarantor Information
All of the domestic subsidiaries of CoreCivic (as the parent corporation) that guarantee the Bank Credit Facility have
provided full and unconditional guarantees of our Senior Notes. All of CoreCivic's subsidiaries guaranteeing the
Senior Notes are 100% owned direct or indirect subsidiaries of CoreCivic, and the subsidiary guarantees are full and
unconditional and are joint and several obligations of the guarantors.
As of December 31, 2023, neither CoreCivic nor any of its subsidiary guarantors had any material or significant
restrictions on CoreCivic's ability to obtain funds from its subsidiaries by dividend or loan or to transfer assets from
such subsidiaries.
The indentures governing our Senior Notes contain certain customary covenants that, subject to certain exceptions
and qualifications, restrict CoreCivic's ability to, among other things, create or permit to exist certain liens and
consolidate, merge or transfer all or substantially all of CoreCivic's assets. In addition, if CoreCivic experiences
specific kinds of changes in control, CoreCivic must offer to repurchase all or a portion of the Senior Notes. The offer
price for the Senior Notes in connection with a change in control would be 101% of the aggregate principal amount
of the notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased to the date of purchase.
The indenture related to our 8.25% Senior Notes additionally limits our ability to incur indebtedness, make restricted
payments and investments and prepay certain indebtedness.
85
The following tables present summarized information for CoreCivic and the subsidiary guarantors, on a combined
basis after elimination of (i) intercompany transactions and balances among CoreCivic and the subsidiary guarantors
and (ii) equity in earnings from, and any investments in, any subsidiary that is a non-guarantor (in thousands).
Current assets
Real estate and related assets
Other assets
Total non-current assets
Current liabilities
Long-term debt, net
Other liabilities
Total long-term liabilities
Revenue
Operating expenses
Other expenses
Total expenses
Income before income taxes
Net income
Funds from Operations
$
December 31,
2023
460,475
2,323,562
175,413
2,498,975
284,886
945,949
246,903
1,192,852
$
2022
415,304
2,384,279
204,606
2,588,885
345,241
942,147
276,752
1,218,899
For the Years Ended December 31,
2023
$ 1,895,291
1,462,414
263,401
1,725,815
92,437
64,203
2022
$ 1,844,084
1,413,788
261,898
1,675,686
162,454
119,472
Funds From Operations, or FFO, is a widely accepted supplemental non-GAAP measure utilized to evaluate the
operating performance of real estate companies. The National Association of Real Estate Investment Trusts, or
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 is an important
supplemental measure of our operating performance and believe it is 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 when reporting results.
We also present Normalized FFO as an additional supplemental measure as we believe it is more reflective of our core
operating performance. We may make adjustments to FFO from time to time for certain other income and expenses
that we consider 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 our ongoing operations. Normalized FFO excludes the
effects of such items.
FFO and Normalized FFO are supplemental non-GAAP financial measures of real estate companies' operating
performance, which do not represent cash generated from operating activities in accordance with GAAP and therefore
should not be considered an alternative for net income or as a measure of liquidity. Our method of calculating FFO
and Normalized FFO may be different from methods used by other REITs and real estate operating companies and,
accordingly, may not be comparable to such REITs and other real estate operating companies.
86
Our reconciliation of net income to FFO and Normalized FFO for the years ended December 31, 2023, 2022, and
2021 is as follows (in thousands):
For the Years Ended December 31,
2022
2021
2023
FUNDS FROM OPERATIONS:
Net income (loss)
Depreciation and amortization of real estate assets
Impairment of real estate assets
Gain on sale of real estate assets, net
Income tax expense for special items
Funds From Operations
Expenses associated with debt repayments
and refinancing transactions
Expenses associated with COVID-19
Income tax expense associated with change in corporate
tax structure and other special tax items
Shareholder litigation expense
Goodwill and other impairments
Other asset impairments
Income tax benefit for special items
Normalized Funds From Operations
$
67,590 $ 122,320 $
96,917
98,076
4,392
—
(87,728 )
(798 )
21,995
226
157,896
165,094
(51,896 )
98,738
3,335
(38,766 )
8,785
20,196
686
—
8,077
—
56,279
2,434
930
—
—
2,710
(984 )
114,249
54,295
8,043
—
(30,012 )
$ 168,436 $ 165,216 $ 225,484
—
1,900
—
—
(2,657 )
Material Cash Requirements
The following table summarizes our material cash requirements related to borrowings, contracts and leases by the
indicated period as of December 31, 2023 (in thousands):
Long-term debt
Interest on senior and mortgage notes
Contractual facility developments and
other commitments
South Texas Family Residential Center
Leases
Total
2024
Payments Due By Year Ending December 31,
2027
$ 11,597 $ 12,073 $ 608,814 $ 262,423 $ 97,995 $ 113,789 $ 1,106,691
229,812
66,837 66,592 41,860 17,105
5,247 32,171
Thereafter
Total
2025
2026
2028
—
5,058
—
51,562 51,421 38,460
4,856
5,058
141,443
35,111
$ 140,446 $ 135,359 $ 693,990 $ 283,711 $ 107,014 $ 157,595 $ 1,518,115
—
—
3,772 11,635
—
—
4,183
—
—
5,273
5,392
The cash obligations in the table above do not include future cash obligations for variable interest expense associated
with our Term Loan or the balance outstanding on our Revolving Credit Facility, if any, as projections would be based
on future outstanding balances as well as future variable interest rates, and we are unable to make reliable estimates
of either. Certain of our other ongoing construction projects are not currently under contract and thus are not included
as a contractual obligation above as we may generally suspend or terminate such projects without substantial penalty.
With respect to the South Texas Family Residential Center, the cash obligations included in the table above reflect the
full contractual obligations of the lease of the site, excluding contingent payments, even though the lease agreement
provides us with the ability to terminate if ICE terminates the amended inter-governmental service agreement
associated with the facility.
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We had $17.9 million of letters of credit outstanding at December 31, 2023 primarily to support our requirement to
repay fees and claims under our self-insured workers' compensation plan in the event we do not repay the fees and
claims due in accordance with the terms of the plan, and for a debt service reserve requirement under terms of the
Kansas Notes. The letters of credit are renewable annually. We did not have any draws under these outstanding letters
of credit during 2023, 2022, or 2021.
INFLATION
Many of our contracts include provisions for inflationary indexing, which may mitigate an adverse impact of inflation
on net income. However, a substantial increase in personnel costs, workers' compensation, utilities, food, and medical
expenses could have an adverse impact on our results of operations in the future to the extent that these expenses
increase at a faster pace than the per diem or fixed rates we receive for our management services. As previously
described herein, we have experienced increases in personnel costs and expect the labor market to remain challenging,
which could have a material adverse effect on our operations. We outsource our food service operations to a third
party. The contract with our outsourced food service vendor contains certain protections against increases in food
costs.
SEASONALITY AND QUARTERLY RESULTS
Certain aspects of our business are subject to seasonal fluctuations. Because we are generally compensated for
operating and managing correctional, detention, and reentry facilities at a per diem rate, our financial results are
impacted by the number of calendar days in a fiscal quarter. Our fiscal year follows the calendar year and therefore,
our daily profits for the third and fourth quarters include two more days than the first quarter (except in leap years)
and one more day than the second quarter. Further, salaries and benefits represent the most significant component of
operating expenses. Significant portions of our unemployment taxes are recognized during the first quarter, when
base wage rates reset for unemployment tax purposes. Quarterly results are also affected by government funding
initiatives, acquisitions, the timing of the opening of new facilities, or the commencement of new management
contracts and related start-up expenses which may mitigate or exacerbate the impact of other seasonal influences.
Because of seasonality factors, and other factors described herein, results for any quarter are not necessarily indicative
of the results that may be achieved for the full fiscal year.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our primary market risk exposure is to changes in U.S. interest rates. In an effort to mitigate inflation, the Federal
Reserve increased interest rates throughout 2022 and continued to increase interest rates in 2023. We are exposed to
market risk related to our Bank Credit Facility because the interest rates on these loans are subject to fluctuations in
the market. We were also exposed to market risk related to our Term Loan B prior to its prepayment in full in May
2022. If the interest rate for our outstanding indebtedness under the Bank Credit Facility and the Term Loan B was
100 basis points higher or lower (but not less than 0%) during the years ended December 31, 2023, 2022, and 2021,
our interest expense, net of amounts capitalized, would have been increased by $1.1 million, $1.4 million, and $3.0
million, respectively, and would have been decreased by $1.1 million, $0.8 million, and $0.3 million, respectively.
As of December 31, 2023, we had outstanding $593.1 million of senior notes due 2026 with a fixed interest rate of
8.25%, and $243.1 million of senior notes due 2027 with a fixed interest rate of 4.75%. We also had $145.5 million
outstanding under the Kansas Notes with a fixed interest rate of 4.43%. Because the interest rates with respect to these
instruments are fixed, a hypothetical 100 basis point increase or decrease in market interest rates would not have a
material impact on our financial statements.
We may, from time to time, invest our cash in a variety of short-term financial instruments. These instruments
generally consist of highly liquid investments with original maturities at the date of purchase of three months or less.
While these investments are subject to interest rate risk and will decline in value if market interest rates increase, a
hypothetical 100 basis point increase or decrease in market interest rates would not materially affect the value of these
instruments. See the risk factor discussion captioned "Rising interest rates increase the cost of our variable rate debt"
under Part 1, Item 1A of this Annual Report on Form 10-K for more discussion on interest rate risks that may affect
our financial condition.
88
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and supplementary data required by Regulation S-X are included in this Annual Report on
Form 10-K commencing on Page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Management's Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our senior management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures,
as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Annual
Report. Based on that evaluation, our officers, including our Chief Executive Officer and Chief Financial Officer,
concluded that as of the end of the period covered by this Annual Report our disclosure controls and procedures are
effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms
and information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over
financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The Company's internal control over financial reporting includes those policies and procedures that:
i.
ii.
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of management and
directors of the Company; and
iii.
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the Company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31,
2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework released in 2013.
Based on this assessment, management believes that, as of December 31, 2023, the Company's internal control over
financial reporting was effective.
The Company's independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report
on the Company's internal control over financial reporting. That report begins on page 91.
89
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the fourth fiscal
quarter of 2023 that have materially affected, or are likely to materially affect, our internal control over financial
reporting.
90
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of CoreCivic, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited CoreCivic, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, CoreCivic, Inc.
and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated February 20, 2024
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
Nashville, Tennessee
February 20, 2024
91
ITEM 9B. OTHER INFORMATION
None. Without limiting the generality of the foregoing, during the three months ended December 31, 2023, no director
or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement,” or any “non-Rule 10b-5
trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
None.
92
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by this Item 10 will appear in, and is hereby incorporated by reference from, the information
under the headings "Proposal 1 – Election of Directors-Incumbent Directors Standing for Re-Election," "Executive
Officers," "Corporate Governance – Board Meetings and Committees," "Corporate Governance – Director
Independence,” "Corporate Governance – Certain Relationships and Related Party Transactions," and "Security
Ownership of Certain Beneficial Owners and Management – Section 16(a) Beneficial Ownership Reporting
Compliance" in our definitive proxy statement for the 2024 Annual Meeting of Stockholders.
Our Board of Directors has adopted a Code of Ethics and Business Conduct applicable to the members of our Board
of Directors and our officers, including our Chief Executive Officer and Chief Financial Officer. In addition, the
Board of Directors has adopted Corporate Governance Guidelines and charters for our Audit Committee, Risk
Committee, Compensation Committee, Nominating and Governance Committee and Executive Committee. You can
access our Code of Ethics and Business Conduct, Corporate Governance Guidelines and current committee charters
under the "Investor Relations" tab on our website at www.corecivic.com.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item 11 will appear in, and is hereby incorporated by reference from, the information
under the headings "Executive and Director Compensation" in our definitive proxy statement for the 2024 Annual
Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The information required by this Item 12 will appear in, and is hereby incorporated by reference from, the information
under the heading "Security Ownership of Certain Beneficial Owners and Management – Ownership of Common
Stock – Directors and Executive Officers," and "Security Ownership of Certain Beneficial Owners and Management
– Ownership of Common Stock – Principal Stockholders" in our definitive proxy statement for the 2024 Annual
Meeting of Stockholders.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth certain information as of December 31, 2023 regarding compensation plans under which
our equity securities are authorized for issuance.
(c)
Number of
Securities
Remaining
Available
for Future
Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column
(a))
(a)
Number of
Securities
to be Issued
Upon Exercise
of Outstanding
Options
(b)
Weighted –
Average
Exercise Price
of Outstanding
Options
— $
—
— $
—
—
—
6,070,118 (1)
—
6,070,118
Plan Category
Equity compensation plans approved by
stockholders
Equity compensation plans not approved by
stockholders
Total
(1) Reflects shares of common stock available for issuance under our Amended and Restated 2020 Stock Incentive Plan, the
only equity compensation plan approved by our stockholders under which we continue to grant awards.
93
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
The information required by this Item 13 will appear in, and is hereby incorporated by reference from, the information
under the heading "Corporate Governance – Certain Relationships and Related Party Transactions" and "Corporate
Governance – Director Independence" in our definitive proxy statement for the 2024 Annual Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information required by this Item 14 will appear in, and is hereby incorporated by reference from, the information
under the heading "Proposal 2 – Non-Binding Ratification of Appointment of Independent Registered Public
Accounting Firm" in our definitive proxy statement for the 2024 Annual Meeting of Stockholders.
94
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this Annual Report:
(1)
Financial Statements:
The financial statements as set forth under Item 8 of this Annual Report on Form 10-K have been filed
herewith, beginning on page F-1 of this Annual Report.
(2)
Financial Statement Schedules:
Schedule III-Real Estate Assets and Accumulated Depreciation.
Information with respect to this item begins on page F-36 of this Annual Report on Form 10-K. Other
schedules are omitted because of the absence of conditions under which they are required or because the
required information is given in the financial statements or notes thereto.
(3)
Exhibits:
* Filed herewith.
** Furnished herewith.
*** As directed by Item 601(a)(5) or 601(b)(2) of Regulation S-K, as applicable, certain schedules and
exhibits to this exhibit are omitted from this filing. The Company agrees to furnish supplementally a copy
of any omitted schedule or exhibit to the SEC upon request.
# Management contract or compensatory plan or arrangement.
Other exhibits have previously been filed with the Securities and Exchange Commission (the
"Commission") and are incorporated herein by reference:
Articles of Amendment and Restatement of the Company (previously filed as Exhibit 3.1 to the Company's
Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on May 20,
2013 and incorporated herein by this reference).
Articles of Amendment of the Company (previously filed as Exhibit 3.1 to the Company's Current Report
on Form 8-K (Commission File no. 001-16109), filed with the Commission on November 10, 2016 and
incorporated herein by this reference).
Eleventh Amended and Restated Bylaws of the Company (previously filed as Exhibit 3.1 to the Company's
Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on December
15, 2023 and incorporated herein by this reference).
Specimen of certificate representing shares of the Company's Common Stock (previously filed as Exhibit
4.1 to the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the
Commission on November 10, 2016 and incorporated herein by this reference).
Indenture (2023 Notes), dated as of April 4, 2013, by and among the Company, certain of its subsidiaries,
and U.S. Bank National Association, as Trustee (previously filed as Exhibit 4.3 to the Company's Current
Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on April 8, 2013 and
incorporated herein by this reference).
Indenture (2022 Notes, 2026 Notes and 2027 Notes), dated as of September 25, 2015, by and between the
Company and U.S. Bank National Association, as Trustee (previously filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
September 25, 2015 and incorporated herein by this reference).
Form of 4.625% Senior Note due 2023 (incorporated by reference to Exhibit A to Exhibit 4.2 hereof).
Form of 4.75% Senior Note due 2027 (incorporated by reference to Exhibit A to Exhibit 4.8 hereof).
Form of 8.25% Senior Note due 2026 (incorporated by reference to Exhibit A to Exhibit 4.14 hereof).
3.1
3.2
3.3
4.1
4.2
4.3
4.4
4.5
4.6
95
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
Supplemental Indenture (2023 Notes), dated as of September 4, 2013, by and among the Company, certain
of its subsidiaries, and U.S. Bank National Association, as Trustee (previously filed as Exhibit 4.2 to the
Company's Quarterly Report on Form 10-Q (Commission File no. 001-16109), filed with the Commission
on November 7, 2013 and incorporated herein by this reference).
Second Supplemental Indenture (2027 Notes), dated as of October 13, 2017, by and among the Company,
the Guarantors, and U.S. Bank National Association, as Trustee (previously filed as Exhibit 4.2 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
October 13, 2017 and incorporated herein by this reference).
Schedule of additional Supplemental Indentures (2023 Notes), relating to the Supplemental Indenture in
Exhibit 4.6 hereof (previously filed as Exhibit 4.12 to the Company's Annual Report on Form 10-K
(Commission File no. 001-16109), filed with the Commission on February 25, 2016 and incorporated
herein by this reference).
Supplemental Indenture (2023 Notes), dated as of January 7, 2019, by and among the Company, certain
of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National Association, as Trustee
(previously filed as Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q (Commission File No.
001-16109), filed with the Commission on May 9, 2019 and incorporated herein by this reference).
Supplemental Indenture (2027 Notes), dated as of January 7, 2019, by and among the Company, certain
of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National Association, as Trustee
(previously filed as Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q (Commission File No.
001-16109), filed with the Commission on May 9, 2019 and incorporated herein by this reference).
Supplemental Indenture (2023 Notes), dated as of February 3, 2020, by and among the Company, certain
of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National Association, as Trustee
(previously filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q (Commission File No.
001-16109), filed with the Commission on May 7, 2020 and incorporated herein by this reference).
Supplemental Indenture (2027 Notes), dated as of February 3, 2020, by and among the Company, certain
of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National Association, as Trustee
(previously filed as Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q (Commission File No.
001-16109), filed with the Commission on May 7, 2020 and incorporated herein by this reference).
Third Supplemental Indenture (2026 Notes), dated as of April 14, 2021, by and among the Company,
certain of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National Association, as
Trustee (previously filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (Commission File
No. 001-16109), filed with the Commission on April 14, 2021 and incorporated herein by this reference).
Fourth Supplemental Indenture (2026 Notes), dated as of September 29, 2021, by and among the
Company, certain of its subsidiaries, and Regions Bank, successor-in-interest to U.S. Bank National
Association, as Trustee (previously filed as Exhibit 4.3 to the Company's Current Report on Form 8-K
(Commission File No. 001-16109), filed with the Commission on September 19, 2021 and incorporated
herein by this reference).
4.16*
Description of Securities of CoreCivic, Inc.
10.1***
Fourth Amended and Restated Credit Agreement, dated October 11, 2023 (previously filed as Exhibit 10.1
to the Company's Current Report on Form 8-K (Commission File no. 001-16109, filed with the
Commission on October 12, 2023 and incorporate herein by this reference).
10.2***
Third Amended and Restated Credit Agreement, dated May 12, 2022 (previously filed as Exhibit 10.1 to
the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission
on May 13, 2022 and incorporated herein by this reference).
10.3
Second Amended and Restated Credit Agreement, dated as of April 17, 2018 (previously filed as Exhibit
10.1 to the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the
Commission on April 18, 2018 and incorporated herein by this reference).
96
10.4
10.5#
10.6#
10.7#
10.8#
10.9#
10.10#
10.11#
10.12#
10.13#
10.14#
First Amendment to Second Amended and Restated Credit Agreement, dated August 4, 2020, to the
Second Amended and Restated Credit Agreement, dated as of April 17, 2018 (previously filed as Exhibit
10.2 to the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the
Commission on August 5, 2020 and incorporated herein by this reference).
The Company's Non-Employee Directors' Compensation Plan (previously filed as Appendix C to the
Company's definitive Proxy Statement relating to its Annual Meeting of Stockholders (Commission File
no. 001-16109), filed with the Commission on April 11, 2003 and incorporated herein by this reference).
The Company's Amended and Restated 2008 Stock Incentive Plan (previously filed as Exhibit 10.1 of the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
May 17, 2011 and incorporated herein by this reference).
Form of Executive Restricted Stock Unit Award Agreement for the Company's Amended and Restated
2008 Stock Incentive Plan (previously filed as Exhibit 10.1 to the Company's Current Report on Form 8-
K (Commission File no. 001-16109), filed with the Commission on March 21, 2012 and incorporated
herein by this reference).
Form of Non-Employee Directors Restricted Stock Unit Award Agreement with deferral provisions for
the Company's Amended and Restated 2008 Stock Incentive Plan (previously filed as Exhibit 10.2 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
March 21, 2012 and incorporated herein by this reference).
Form of Non-Employee Directors Restricted Stock Unit Award Agreement for the Company's Amended
and Restated 2008 Stock Incentive Plan (previously filed as Exhibit 10.3 to the Company's Current Report
on Form 8-K (Commission File no. 001-16109), filed with the Commission on March 21, 2012 and
incorporated herein by this reference).
Form of Restricted Stock Unit Award Agreement for the Company's Amended and Restated 2008 Stock
Incentive Plan (Time-Vesting Form for Executive Officers) (previously filed as Exhibit 10.23 to the
Company's Annual Report on Form 10-K (Commission File no. 001-16109), filed with the Commission
on February 27, 2013 and incorporated herein by this reference).
Amended and Restated Non-Employee Director Deferred Compensation Plan (previously filed as Exhibit
10.1 to the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the
Commission on August 16, 2007 and incorporated herein by this reference).
Amendment to the Amended and Restated Non-Employee Director Deferred Compensation Plan
(previously filed as Exhibit 10.35 to the Company's Annual Report on Form 10-K (Commission File no.
001-16109), filed with the Commission on February 24, 2010 and incorporated herein by this reference).
Amended and Restated Executive Deferred Compensation Plan (previously filed as Exhibit 10.2 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
August 16, 2007 and incorporated herein by this reference).
Form of Indemnification Agreement (previously filed as Exhibit 10.1 to the Company's Current Report on
Form 8-K (Commission File no. 001-16109), filed with the Commission on August 18, 2009 and
incorporated herein by this reference).
10.15*** Term Loan Credit Agreement, dated as of December 18, 2019, by and among the Company, Nomura
Corporate Funding Americas, LLC, as Administrative Agent and Nomura Securities International, Inc.,
as a Lead Arranger and Bookrunner (previously filed as Exhibit 10.19 to the Company's Annual Report
on Form 10-K (Commission File no. 001-16109), filed with the Commission on February 20, 2020 and
incorporated herein by this reference).
10.16
First Amendment to Term Loan Credit Agreement, dated August 4, 2020, to the Term Loan Credit
Agreement, dated as of December 18, 2019 (previously filed as Exhibit 10.1 to the Company's Current
Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on August 5, 2020 and
incorporated herein by this reference).
97
10.17#
10.18#
10.19#
10.20#
10.21#
10.22#
10.23#
10.24#
The Company's Second Amended and Restated 2008 Stock Incentive Plan (previously filed as Exhibit
10.1 to the Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the
Commission on May 12, 2017 and incorporated herein by this reference).
The Company's 2020 Stock Incentive Plan (previously filed as Exhibit 10.1 to the Company's Current
Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on May 18, 2020 and
incorporated herein by this reference).
Form of Executive Time-Based Restricted Share Unit Award Agreement for the Company's 2020 Stock
Incentive Plan (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
(Commission File no. 001-16109), filed with the Commission on August 6, 2020 and incorporated herein
by this reference).
Form of Executive Performance-Based Restricted Share Unit Award Agreement for the Company's 2020
Stock Incentive Plan (previously filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
(Commission File no. 001-16109), filed with the Commission on August 6, 2020 and incorporated herein
by this reference).
Form of Non-Employee Director Restricted Share Unit Agreement for the Company's 2020 Stock
Incentive Plan (previously filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
(Commission File no. 001-16109), filed with the Commission on August 6, 2020 and incorporated herein
by this reference).
Form of Non-Employee Director Restricted Share Unit Agreement with deferral provisions for the
Company's 2020 Stock Incentive Plan (previously filed as Exhibit 10.4 to the Company's Quarterly Report
on Form 10-Q (Commission File no. 001-16109), filed with the Commission on August 6, 2020 and
incorporated herein by this reference).
The Company's Amended and Restated 2020 Stock Incentive Plan (previously filed as Exhibit 10.1 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
May 16, 2022 and incorporated herein by this reference).
The Company's Executive Severance and Change in Control Plan (previously filed as Exhibit 10.1 to the
Company's Current Report on Form 8-K (Commission File no. 001-16109), filed with the Commission on
December 15, 2023 and incorporated herein by this reference).
21.1*
Subsidiaries of the Company.
22.1*
List of Guarantor Subsidiaries.
23.1*
Consent of Independent Registered Public Accounting Firm.
31.1*
31.2*
32.1**
32.2**
Certification of the Company's Chief Executive Officer pursuant to Securities and Exchange Act Rules
13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of the Company's Chief Financial Officer pursuant to Securities and Exchange Act Rules
13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97*
CoreCivic, Inc. NYSE Executive Compensation Recoupment Policy.
101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document.
101.SCH* Inline XBRL Taxonomy Extension Schema.
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase.
98
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase.
104*
The cover page from the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2023, formatted in Inline XBRL (included in Exhibit 101).
ITEM 16. FORM 10-K SUMMARY
None.
99
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
CORECIVIC, INC.
Date: February 20, 2024
By: /s/ Damon T. Hininger
Damon T. Hininger, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Damon T. Hininger
Damon T. Hininger, President and Chief Executive Officer
(Principal Executive Officer and Director)
February 20, 2024
/s/ David M. Garfinkle
David M. Garfinkle, Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
February 20, 2024
/s/ Mark A. Emkes
Mark A. Emkes, Chairman of the Board of Directors
/s/ Donna M. Alvarado
Donna M. Alvarado, Director
/s/ Robert J. Dennis
Robert J. Dennis, Director
/s/ Stacia A. Hylton
Stacia A. Hylton, Director
/s/ Harley G. Lappin
Harley G. Lappin, Director
/s/ Anne L. Mariucci
Anne L. Mariucci, Director
/s/ Thurgood Marshall, Jr.
Thurgood Marshall, Jr., Director
/s/ Devin I. Murphy
Devin I. Murphy, Director
/s/ John R. Prann, Jr.
John R. Prann, Jr., Director
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
100
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Consolidated Financial Statements of CoreCivic, Inc. and Subsidiaries
Report of Independent Registered Public Accounting Firm (PCAOB ID 00042) ................................................ F-2
Consolidated Balance Sheets as of December 31, 2023 and 2022 ....................................................................... F-4
Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 ....................... F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 ...................... F-6
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2023, 2022 and 2021 ....... F-7
Notes to Consolidated Financial Statements ........................................................................................................ F-8
Schedule III .......................................................................................................................................................... F-36
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of CoreCivic, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CoreCivic, Inc. and subsidiaries (the Company) as
of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash
flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement
schedule listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated February 20, 2024 expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective or complex judgments. The communication of this critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
F-2
Impairment of Idle Facilities
Description of the Matter At December 31, 2023, the Company’s property and equipment, net of accumulated
depreciation, was $2.1 billion, which includes $247.0 million related to eight idle
correctional facilities and $6.2 million related to other idle facilities. As discussed in Note
2 and Note 6 to the consolidated financial statements, long-lived assets other than
goodwill are reviewed for impairment when circumstances indicate the carrying value of
an asset may not be recoverable. The Company estimates undiscounted cash flows for
each facility with an impairment indicator, including the idle facilities described above.
When the estimated undiscounted cash flows associated with the asset or group of assets
are less than their carrying value, an impairment is recognized as the difference between
the carrying value of the asset and its fair value.
Auditing management’s evaluation of idle facilities for impairment was subjective due to
the estimation uncertainty in determining the future undiscounted cash flows of the idle
facilities, including whether and when the Company will obtain contracts to utilize these
facilities in the future. These assumptions can be affected by expectations about market
conditions as well as management’s intent to hold and operate each facility over the term
and in the manner assumed in the analysis.
How We Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness
of controls over the Company’s long-lived asset impairment review process over idle
facilities, including controls over management’s review of assumptions supporting the
projected utilization of idle facilities and the estimated undiscounted cash flows for each
facility.
To test the Company’s long-lived asset impairment analysis, we performed audit
procedures that included, among others, evaluating evidence to support the projected
utilization of idle facilities and to support recoverability of net book values based on
anticipated cash flows. We also performed sensitivity analyses to evaluate the impact of
changes in assumptions on estimated undiscounted cash flows of idle facilities.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2002.
Nashville, Tennessee
February 20, 2024
F-3
CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
ASSETS
Cash and cash equivalents
Restricted cash
Accounts receivable, net of credit loss reserve of $6,827 and $8,008,
respectively
Prepaid expenses and other current assets
Assets held for sale
Total current assets
Real estate and related assets:
Property and equipment, net of accumulated depreciation of $1,821,015
and $1,716,283, respectively
Other real estate assets
Goodwill
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
Current portion of long-term debt
Total current liabilities
Long-term debt, net
Deferred revenue
Non-current deferred tax liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Preferred stock – $0.01 par value; 50,000 shares authorized; none issued
and outstanding at December 31, 2023 and 2022, respectively
Common stock – $0.01 par value; 300,000 shares authorized;
112,733 and 114,988 shares issued and outstanding
at December 31, 2023 and 2022, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
December 31,
$
2023
121,845 $
7,111
2022
149,401
12,764
$
$
312,174
26,304
7,480
474,914
312,435
32,134
6,936
513,670
2,114,522
201,561
4,844
309,558
3,105,399 $
285,857 $
11,597
297,454
1,083,476
18,315
96,915
131,673
1,627,833
2,176,098
208,181
4,844
341,976
3,244,769
285,226
165,525
450,751
1,084,858
22,590
99,618
154,544
1,812,361
—
—
1,127
1,785,286
(308,847 )
1,477,566
3,105,399 $
1,150
1,807,689
(376,431 )
1,432,408
3,244,769
$
The accompanying notes are an integral part of these consolidated financial statements.
F-4
CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
REVENUE
EXPENSES:
Operating
General and administrative
Depreciation and amortization
Shareholder litigation expense
Asset impairments
OTHER INCOME (EXPENSE):
Interest expense, net
Expenses associated with debt repayments
and refinancing transactions
Gain on sale of real estate assets
Other income (expense)
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME (LOSS)
BASIC EARNINGS (LOSS) PER SHARE
DILUTED EARNINGS (LOSS) PER SHARE
For the Years Ended December 31,
2022
$ 1,896,635 $ 1,845,329 $ 1,862,616
2021
2023
1,462,430
136,084
127,316
—
2,710
1,728,540
1,413,792
127,700
127,906
1,900
4,392
1,675,690
1,337,065
135,770
134,738
54,295
11,378
1,673,246
(72,960 )
(84,974 )
(85,542 )
(686 )
798
576
95,823
(28,233 )
67,590 $
0.59 $
0.59 $
(8,077 )
87,728
986
165,302
(42,982 )
122,320 $
1.03 $
1.03 $
(56,279 )
38,766
(212 )
86,103
(137,999 )
(51,896 )
(0.43 )
(0.43 )
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Years Ended December 31,
2022
2021
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization
Asset impairments
Amortization of debt issuance costs and other non-cash interest
Expenses associated with debt repayments and refinancing
transactions
Deferred income taxes
Gain on sale of real estate assets
Other expenses and non-cash items
Non-cash revenue and other income
Non-cash equity compensation
Changes in assets and liabilities, net:
Accounts receivable, prepaid expenses and other assets
Accounts payable, accrued expenses and other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for facility development and expansions
Expenditures for other capital improvements
Net proceeds from sale of assets
Other investing activities
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt and borrowings from credit facility
Scheduled principal repayments
Principal repayments of credit facility
Repayment of non-recourse mortgage notes
Other repayments of debt
Payment of debt defeasance, issuance and other refinancing and
related costs
Payment of lease obligations for financing leases
Contingent consideration for acquisition of businesses
Purchase and retirement of common stock
Dividends paid
Net cash used in financing activities
$
67,590 $
122,320
$
(51,896 )
127,316
2,710
4,446
686
(2,703 )
(798 )
6,294
(2,783 )
20,760
6,704
1,679
231,901
(4,886 )
(65,369 )
11,068
313
(58,874 )
250,000
(9,895 )
(125,000 )
—
(272,936 )
(4,632 )
(595 )
—
(43,047 )
(131 )
(206,236 )
127,906
4,392
5,643
8,077
11,461
(87,728 )
7,337
(3,998 )
17,568
(35,172 )
(24,223 )
153,583
(23,119 )
(58,277 )
157,680
(3,246 )
73,038
100,000
(15,064 )
—
—
(372,346 )
(6,402 )
(578 )
—
(79,887 )
(886 )
(375,163 )
134,738
11,378
7,345
56,279
99,270
(38,766 )
5,830
(718 )
18,733
(10,628 )
31,666
263,231
(18,612 )
(62,272 )
320,754
(1,447 )
238,423
740,563
(35,305 )
(284,000 )
(161,930 )
(516,350 )
(64,987 )
(559 )
(1,000 )
(1,639 )
(2,508 )
(327,715 )
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
beginning of period
CASH, CASH EQUIVALENTS AND RESTRICTED CASH,
end of period
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Establishment of right of use assets and lease liabilities
Distributions to non-controlling interest
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amounts capitalized of $1.0 million and
$0.4 million in 2022 and 2021, respectively)
Income taxes paid
$
$
$
$
$
(33,209 )
(148,542 )
173,939
162,165
310,707
136,768
128,956 $
162,165
$
310,707
2,551 $
— $
2,096
—
$
$
1,483
5,897
81,765 $
25,888 $
90,815
28,286
$
$
80,587
36,477
The accompanying notes are an integral part of these consolidated financial statements.
F-6
CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021
(in thousands)
Balance as of December 31, 2020
Net loss
Retirement of common stock
Dividends on RSUs
Restricted stock compensation, net
of forfeitures
Restricted stock grants
Distributions to non-controlling
interest
Termination of operating
partnership
Balance as of December 31, 2021
Net income
Retirement of common stock
Dividends on RSUs
Restricted stock compensation, net
of forfeitures
Restricted stock grants
Balance as of December 31, 2022
Net income
Retirement of common stock
Dividends on RSUs
Restricted stock compensation, net
of forfeitures
Restricted stock grants
Balance as of December 31, 2023
Stockholders' Equity
Non-
controlling
Interest -
Additional
Common Stock
Par
Paid-in
Value Capital
Total
Accumulated Stockholders' Operating
Deficit
Total
Partnership Equity
Equity
Shares
119,638 $ 1,196 $ 1,835,494 $ (446,519 ) $ 1,390,171 $ 23,271 $ 1,413,442
(51,896 )
(51,896 )
(1,639 )
—
(275 )
(275 )
— —
(2 )
— —
(51,896 )
(1,639 )
(275 )
—
(1,637 )
—
—
—
—
(220 )
— —
9
867
18,733
(9 )
— —
—
—
—
—
18,733
—
18,733
—
—
—
(5,897 )
(5,897 )
— —
17,374
—
17,374
120,285 $ 1,203 $ 1,869,955 $ (498,690 ) $ 1,372,468 $
—
(79,816 )
—
— —
(71 )
— —
122,320
(79,887 )
(61 )
122,320
—
(61 )
(7,141 )
— —
18
17,568
1,844
(18 )
114,988 $ 1,150 $ 1,807,689 $ (376,431 ) $ 1,432,408 $
—
(43,146 )
—
— —
(40 )
— —
67,590
(43,186 )
(6 )
67,590
—
(6 )
17,568
—
(3,936 )
—
—
— —
17
20,760
1,681
(17 )
112,733 $ 1,127 $ 1,785,286 $ (308,847 ) $ 1,477,566 $
20,760
—
—
—
(17,374 )
—
— $ 1,372,468
122,320
—
(79,887 )
—
(61 )
—
17,568
—
—
—
— $ 1,432,408
67,590
—
(43,186 )
—
(6 )
—
20,760
—
—
—
— $ 1,477,566
The accompanying notes are an integral part of these consolidated financial statements.
F-7
CORECIVIC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023, 2022 AND 2021
1. ORGANIZATION AND OPERATIONS
CoreCivic, Inc. (together with its subsidiaries, the "Company" or "CoreCivic") is the nation's largest owner of
partnership correctional, detention, and residential reentry facilities and one of the largest prison operators in
the United States ("U.S."). Through three segments, CoreCivic Safety, CoreCivic Community, and CoreCivic
Properties, the Company provides a broad range of solutions to government partners that serve the public good
through corrections and detention management, a network of residential reentry centers to help address
America's recidivism crisis, and government real estate solutions. As of December 31, 2023, through its
CoreCivic Safety segment, the Company operated 43 correctional and detention facilities, 39 of which the
Company owned, with a total design capacity of approximately 65,000 beds. Through its CoreCivic Community
segment, the Company owned and operated 23 residential reentry centers with a total design capacity of
approximately 5,000 beds. In addition, through its CoreCivic Properties segment, the Company owned 6
properties, with a total design capacity of approximately 10,000 beds.
In addition to providing fundamental residential services, CoreCivic's correctional, detention, and reentry
facilities offer a variety of rehabilitation and educational programs, including basic education, faith-based
services, life skills and employment training, and substance abuse treatment. These services are intended to
help reduce recidivism and to prepare offenders for their successful reentry into society upon their release.
CoreCivic also provides or makes available to offenders certain health care (including medical, dental, and
mental health services), food services, and work and recreational programs.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting
principles and include the accounts of CoreCivic on a consolidated basis with its wholly-owned subsidiaries.
All intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
CoreCivic considers all liquid deposits and investments with a maturity of three months or less at the time of
purchase to be cash equivalents.
Restricted Cash
Restricted cash at December 31, 2023 and 2022 included deposit accounts totaling $7.1 million and $12.8
million, respectively, to ensure the timely payment of certain operating expenses, capital expenditures and debt
service associated with the Lansing Correctional Facility, as further discussed in Note 10. The restricted cash
accounts are required under the terms of the indebtedness securing such property.
Accounts Receivable and Credit Loss Reserve
At December 31, 2023 and 2022, accounts receivable of $312.2 million and $312.4 million, respectively, were
net of credit loss reserve totaling $6.8 million and $8.0 million, respectively. Accounts receivable consist
primarily of amounts due from federal, state, and local government agencies for the utilization of CoreCivic's
properties, including amounts due for operating and managing the Company's correctional, detention, and
residential reentry facilities, as well as its electronic monitoring and case management services operations.
F-8
Accounts receivable are stated at estimated net realizable value. CoreCivic recognizes reserves for credit losses
to ensure receivables are not overstated due to uncollectibility. Credit loss reserves are maintained for customers
using an expected loss model based on a variety of factors, including the nature of the accounts receivable, risks
of loss, length of time receivables are past due, and historical experience. If circumstances related to customers
change, estimates of the recoverability of receivables would be further adjusted.
Property and Equipment
Property and equipment are carried at cost. Assets acquired by CoreCivic in conjunction with acquisitions are
recorded at estimated fair market value at the time of purchase. Betterments, renewals and significant repairs
that extend the life of an asset are capitalized; other repair and maintenance costs are expensed. Interest is
capitalized to the asset to which it relates in connection with the construction or expansion of real estate
properties. Construction costs directly associated with the development of a property are capitalized as part of
the cost of the development project. Such costs are written-off to expense whenever a project is abandoned.
The cost and accumulated depreciation applicable to assets retired are removed from the accounts and the gain
or loss on disposition is recognized in income. Depreciation is computed over the estimated useful lives of
depreciable assets using the straight-line method. Useful lives for property and equipment are as follows:
Land improvements
Buildings and improvements
Equipment and software
Office furniture and fixtures
5 – 20 years
5 – 50 years
3 – 10 years
5 years
Other Real Estate Assets
Other real estate assets are accounted for in accordance with Accounting Standards Codification ("ASC") 853,
"Service Concession Arrangements". ASC 853 stipulates that the facilities subject to the standard may not be
accounted for as a lease, nor should the infrastructure used in the service concession arrangement be recognized
as property and equipment by the operating entity. Instead, the contracts should be accounted for under the
applicable revenue standards. The Company owns four facilities that are accounted for as service concession
arrangements.
On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, "Revenue from
Contracts with Customers" and its subsequent corresponding update, ASC 606. For facilities which CoreCivic
constructed for the public entity, two separate and distinct performance obligations exist. Service revenue is
recognized as provided. All revenues and costs related to the construction of the facilities were recognized upon
adoption of ASC 606. Revenue recognized related to the construction of the facilities for which cash has not yet
been received is recorded as a contract asset and is amortized and evaluated for impairment on an on-going
basis. For facilities contributed to a service contract, the cost of the facility is accounted for as costs to fulfill
the service contract and the cost is recognized over the term of the service contract. The costs related to contract
assets and costs to fulfill the service contracts are recoverable if the contract is terminated or not renewed due
to the existence of residual interest options.
Prior to the adoption of ASC 606, other real estate assets were stated at cost, net of accumulated amortization.
These assets represent the cost of all infrastructure to be transferred to the public entity grantors should the
grantors exercise their residual interest. The costs related to the facilities constructed for a governmental entity
were deferred as an other real estate asset, and the deferred costs were amortized in proportion to revenue
recognized over the term of the related services arrangement. The costs related to the facilities that were
constructed before entering into the service concession arrangement were amortized in proportion to revenue
recognized over the term of the related service contract as an investment in the service contract.
F-9
Accounting for the Impairment of Long-Lived Assets Other Than Goodwill
Long-lived assets other than goodwill are reviewed for impairment when circumstances indicate the carrying
value of an asset may not be recoverable. The Company estimates undiscounted cash flows for each facility
with an impairment indicator. An impairment is recognized when the estimated undiscounted cash flows
associated with the asset or group of assets are less than their carrying value. If impairment exists, an adjustment
is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying
value and fair value. Fair values are determined based on quoted market values, comparable sales data,
discounted cash flows or internal and external appraisals, as applicable.
Goodwill
Goodwill represents the cost in excess of the fair value of net assets of businesses acquired. As further discussed
in Note 3, goodwill is tested for impairment at least annually.
Investment in Affiliates
Investments in affiliates that are equal to or less than 50%-owned over which CoreCivic can exercise significant
influence are accounted for using the equity method of accounting. Investments under the equity method are
recorded at cost and subsequently adjusted for contributions, distributions, and net income attributable to the
Company's ownership based on the governing agreement.
Debt Issuance Costs
Debt issuance costs, excluding those costs incurred related to CoreCivic's revolving credit facility, are presented
as a direct deduction from the face amount of the related liability on the consolidated balance sheets. Debt
issuance costs related to the Company's revolving credit facility are included in other assets on the consolidated
balance sheets. Generally, debt issuance costs are capitalized and amortized into interest expense using the
interest method, or on a straight-line basis over the term of the related debt, if not materially different than the
interest method. Certain debt issuance costs incurred in connection with debt refinancings are charged to
expense in accordance with ASC 470-50, "Modifications and Extinguishments".
Revenue Recognition
Revenue is recognized over time when control of the promised service is transferred to CoreCivic's customers,
in an amount that reflects consideration CoreCivic expects to be entitled for those services which is typically in
the form of a fixed rate. These services are considered to be a performance obligation and are generally satisfied
in one to thirty days depending on the performance obligation. CoreCivic maintains contracts with certain
governmental entities to manage their facilities for fixed per diem rates. CoreCivic also maintains contracts
with various federal, state, and local governmental entities for the housing of offenders in company-owned
facilities at fixed per diem rates or monthly fixed rates. These contracts usually contain expiration dates with
renewal options ranging from annual to multi-year renewals. Most of these contracts have current terms that
require renewal every two to five years. Additionally, most facility management contracts contain clauses that
allow the government agency to terminate a contract without cause and are generally subject to legislative
appropriations. CoreCivic generally expects to renew these contracts for periods consistent with the remaining
renewal options allowed by the contracts or other reasonable extensions; however, no assurance can be given
that such renewals will be obtained. Fixed monthly rate revenue is recorded in the month earned, and fixed per
diem revenue, including revenue under those contracts that include guaranteed minimum populations, is
recorded based on the per diem rate multiplied by the number of offenders housed or guaranteed during the
respective period.
Certain of the government agencies also have the authority to audit and investigate CoreCivic's contracts with
them. If the agency determines that CoreCivic has improperly allocated costs to a specific contract or otherwise
was unable to perform certain contractual services, CoreCivic may not be reimbursed for those costs and could
be required to refund the amount of any such costs that have been reimbursed, or to pay liquidated damages. In
these instances, the amounts that are required to be returned to the customer are considered to be variable
consideration and are classified as reductions to revenue.
F-10
Lease revenue is recognized in accordance with ASC 842, "Leases". In accordance with ASC 842, minimum
lease revenue is recognized on a straight-line basis over the term of the related lease. Lease incentives are
recognized as a reduction to lease revenue on a straight-line basis over the term of the related lease. Lease
revenue associated with expense reimbursements from tenants is recognized in the period that the related
expenses are incurred based upon the tenant lease provision.
Other revenue consists primarily of revenues associated with the Company's electronic monitoring and case
management services, as well as ancillary revenues associated with operating correctional, detention and
residential reentry facilities, such as commissary, phone, and vending sales. Other revenue is also generated
from prisoner transportation services for governmental agencies. Revenue is recorded at a point in time when
goods are provided or over time when services are provided.
Self-Funded Insurance and Litigation Reserves
CoreCivic is self-insured for employee health, workers' compensation, automobile liability claims, and general
liability claims. As such, CoreCivic's insurance expense is largely dependent on claims experience and
CoreCivic's ability to control its claims experience. CoreCivic accrues the estimated liability for employee
health insurance based on its history of claims experience and time lag between the incident date and the date
the cost is paid by CoreCivic. CoreCivic accrues the estimated liability for workers' compensation claims based
on an actuarially determined liability using a combination of actuarial methods used to project ultimate losses,
and the Company's automobile insurance claims based on estimated development factors on claims incurred.
The liability for employee health, workers' compensation, and automobile insurance includes estimates for both
claims incurred and for claims incurred but not reported. CoreCivic records its best estimate of the probable
costs for the resolution of certain claims and legal proceedings in which it is involved, if estimable. In addition,
the Company is subject to current and potential future claims and legal proceedings for which little or no accrual
has been reflected because the Company's current assessment of the potential exposure is nominal, or because
the Company cannot reasonably estimate the amount of loss or range of loss, if any, that may result. These
estimates have been developed in consultation with CoreCivic's General Counsel's office and, as appropriate,
outside counsel handling these matters, and are based upon an analysis of potential results, assuming a
combination of litigation and settlement strategies. These estimates could change in the future.
Income Taxes
Income taxes are accounted for under the provisions of ASC 740, "Income Taxes". ASC 740 generally requires
CoreCivic to record deferred income taxes for the tax effect of differences between book and tax bases of its
assets and liabilities. Deferred income taxes reflect the available net operating losses and the net tax effect of
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes using enacted tax rates in effect for the year in which the
differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is
recognized in the statement of operations in the period that includes the enactment date. Realization of the
future tax benefits related to deferred tax assets is dependent on many factors, including CoreCivic's past
earnings history, expected future earnings, the character and jurisdiction of such earnings, unsettled
circumstances that, if unfavorably resolved, would adversely affect utilization of its deferred tax assets,
carryback and carryforward periods, and tax strategies that could potentially enhance the likelihood of
realization of a deferred tax asset.
F-11
CoreCivic elected to become a taxable C Corporation effective January 1, 2021. CoreCivic operated in
compliance with Real Estate Investment Trust ("REIT") requirements for federal income tax purposes from
January 1, 2013 through December 31, 2020. During the years the Company elected REIT status, the Company
generally was not subject to corporate level federal income tax on taxable income it distributed to its
stockholders as long as it met the organizational and operational requirements under the REIT rules. However,
certain subsidiaries made an election to be treated as TRSs in conjunction with the Company's REIT election.
The TRS elections permitted CoreCivic to engage in certain business activities in which the REIT could not
engage directly, so long as these activities were conducted in entities that elected to be treated as TRSs under
the Internal Revenue Code of 1986, as amended. A TRS is subject to federal and state income taxes on the
income from these activities and therefore, CoreCivic included a provision for taxes in its consolidated financial
statements, even in periods it operated as a REIT.
CoreCivic's deferred tax assets and liabilities are classified as non-current on the consolidated balance sheets.
See Note 12 for further discussion of the significant components of CoreCivic's deferred tax assets and
liabilities.
Income tax contingencies are accounted for under the provisions of ASC 740. ASC 740 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. The guidance prescribed in ASC 740 establishes a recognition
threshold of more likely than not that a tax position will be sustained upon examination. The measurement
attribute requires that a tax position be measured at the largest amount of benefit that is greater than 50% likely
of being realized upon ultimate settlement.
Fair Value of Financial Instruments
To meet the reporting requirements of ASC 825, "Financial Instruments", regarding fair value of financial
instruments, CoreCivic calculates the estimated fair value of financial instruments using market interest rates,
quoted market prices of similar instruments, or discounted cash flow techniques with observable Level 1 inputs
for publicly traded debt and Level 2 inputs for all other financial instruments, as defined in ASC 820, "Fair
Value Measurement". At December 31, 2023 and 2022, there were no material differences between the carrying
amounts and the estimated fair values of CoreCivic's financial instruments, other than as follows (in thousands):
December 31,
2023
Carrying
Amount
Fair Value
2022
Carrying
Amount
Fair Value
Note receivable from APM
Debt
$
2,886
$ (1,106,691 )
3,061
$
$ (1,090,326 )
$
2,741
$ (1,264,522 )
$
3,076
$ (1,247,201 )
Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual results could differ from those
estimates and those differences could be material.
Concentration of Credit Risks
CoreCivic's credit risks relate primarily to cash and cash equivalents, restricted cash, and accounts receivable.
Cash and cash equivalents and restricted cash are primarily held in bank accounts and overnight investments.
CoreCivic maintains deposits of cash in excess of federally insured limits with certain financial institutions.
CoreCivic's accounts receivable represents amounts due primarily from governmental agencies. CoreCivic's
financial instruments are subject to the possibility of loss in carrying value as a result of either the failure of
other parties to perform according to their contractual obligations or changes in market prices that make the
instruments less valuable.
F-12
CoreCivic derives its revenues primarily from amounts earned under federal, state, and local government
contracts. For each of the years ended December 31, 2023, 2022, and 2021, federal correctional and detention
authorities represented 52%, 54%, and 56%, respectively, of CoreCivic's total revenue. Federal correctional
and detention authorities consist primarily of U.S. Immigration and Customs Enforcement ("ICE"), the United
States Marshals Service ("USMS"), and the Federal Bureau of Prisons ("BOP"). ICE accounted for 30%, 29%,
and 30% of total revenue for 2023, 2022, and 2021, respectively. The USMS accounted for 21%, 22%, and
23% of total revenue for 2023, 2022, and 2021, respectively. The BOP accounted for 2%, 3%, and 3% of total
revenue for 2023, 2022, and 2021. State revenues from contracts at correctional, detention, and residential
reentry facilities that CoreCivic operates represented 39%, 36%, and 32% of total revenue during the years
ended December 31, 2023, 2022, and 2021, respectively. The state of Tennessee generated 10% of CoreCivic's
total revenue in 2023 and 2022, with no other state customer generating 10% or more of our total revenue in
2023, 2022, or 2021. Although the revenue generated from each of these agencies is derived from numerous
management contracts and various types of properties, i.e. correctional, detention, and reentry, the loss or
substantial reduction in value of one or more of such contracts could have a material impact on CoreCivic's
financial condition and results of operations.
On January 26, 2021, President Biden issued the Executive Order on Reforming Our Incarceration System to
Eliminate the Use of Privately Operated Criminal Detention Facilities ("Private Prison EO"). The Private Prison
EO directs the Attorney General to not renew United States Department of Justice ("DOJ") contracts with
privately operated criminal detention facilities. The USMS is an agency of the DOJ that utilizes CoreCivic's
facilities and services, and accounted for 21% of CoreCivic's total revenue for the year ended December 31,
2023. Another federal agency that utilizes CoreCivic's facilities and services, ICE, is not covered by the Private
Prison EO, as ICE is an agency of the Department of Homeland Security ("DHS"), not the DOJ.
CoreCivic currently has two detention facilities that have direct contracts with the USMS. Because of the lack
of alternative bed capacity, one of the contracts was renewed upon its expiration in September 2023 and now
expires in September 2028. The second direct contract with the USMS expires in September 2025. It is too
early to predict the outcome of the expiration of the contract scheduled to expire in September 2025, and future
developments could occur prior to the scheduled expiration date.
Accounting for Stock-Based Compensation
CoreCivic accounts for restricted stock-based compensation under the recognition and measurement principles
of ASC 718, "Compensation-Stock Compensation". CoreCivic amortizes the fair market value as of the grant
date of restricted stock unit ("RSU") awards over the vesting period using the straight-line method. The fair
market value of performance-based restricted stock units is amortized over the vesting period as long as
CoreCivic considers it probable that it will meet the performance criteria. To the extent performance-based
RSUs are expected to increase or decrease based on revised estimates of performance, the related expense is
adjusted accordingly. If achievement of the performance criteria becomes improbable, an adjustment is made
to reverse the expense previously recognized. The Company estimates the number of awards expected to be
forfeited and adjusts the estimate when it is likely to change.
Leases
Leases are accounted for under the provisions of ASU 2016-02, "Leases (Topic 842)" and ASU 2018-11,
"Targeted Improvements – Leases (Topic 842)", cumulatively "ASC 842". For finance leases and operating
leases, CoreCivic recognizes on the balance sheet a liability to make lease payments and a right-of-use ("ROU")
asset representing its right to use the underlying asset for the lease term, with each initially measured at the
present value of the lease payments. The Company also applies the "short-term lease exception" permitted by
ASC 842 for all classes of underlying assets. With the exception of the South Texas Family Residential Center
lease, as further described in Note 5, the Company accounts for each separate lease component of a contract and
its associated non-lease components as a single lease component. All rental payments associated with the South
Texas Family Residential Center lease are classified as operating expenses.
F-13
For those operating leases that contain renewal options, the Company includes the renewal period in the lease
terms, and the related payments are reflected in the ROU asset and lease liability, when it is reasonably certain
that a renewal option will be exercised. The ROU asset is included in other assets on the consolidated balance
sheets, while the current portion of the lease liability is included in accounts payable and accrued expenses, and
the long-term portion of the liability is included in other liabilities on the consolidated balance sheets. Because
CoreCivic does not generally have access to the interest rates implicit in its leases, the Company utilizes its
incremental borrowing rate, based upon the terms and tenure of each base lease, as the discount rate when
calculating the present value of future minimum lease payments for each lease arrangement.
For leases where the Company is the lessor, the Company applies the practical expedient provided by ASC 842
to not separate non-lease components from the associated lease component if certain criteria are met for each
class of underlying assets. Lease components are elements of an arrangement that provide the customer with the
right to use an identified asset. Non-lease components are distinct elements of a contract that are not related to
securing the use of the leased asset and revenue is recognized in accordance with ASC 606. The Company
considers common area maintenance ("CAM") and service income associated with tenant work orders to be
non-lease components because they represent delivery of a separate service but are not considered a cost of
securing the identified asset. In the case of the Company's business, the identified asset would be the leased real
estate. The Company has concluded that the timing and pattern of transfer for non-lease components and the
associated lease component are the same. The Company has also determined that the predominant component
is the lease component and as such its leases qualify as operating leases. The Company accounts for and presents
the lease component and the non-lease component as a single component in revenue.
Recent Accounting Pronouncements
Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the
American Institute of Certified Public Accountants and the Securities and Exchange Commission ("SEC") did
not, or are not expected to, have a material effect on the Company's results of operations or financial position.
3. GOODWILL
ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test of Goodwill Impairment",
establishes accounting and reporting requirements for goodwill and other intangible assets. Goodwill was
$4.8 million as of December 31, 2023 and 2022, all of which was related to the Company's CoreCivic Safety
segment.
CoreCivic performs its impairment tests during the fourth quarter in connection with its annual budgeting
process, and whenever circumstances indicate the carrying value of goodwill may not be recoverable. Under
the provisions of ASU 2017-04, CoreCivic performs a qualitative assessment to determine whether the existence
of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company
determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then
the Company performs a quantitative impairment test. If a quantitative test is required, CoreCivic performs an
assessment to identify the existence of impairment and to measure the excess of a reporting unit's carrying
amount over its fair value by using a combination of various common valuation techniques, including market
multiples and discounted cash flows under valuation methodologies that include an income approach and a
market approach. The income valuation approach includes certain significant assumptions impacting projected
future cash flows, such as projected revenue, projected operating costs, and the weighted average cost of capital,
which are affected by expectations about future market or economic conditions. These impairment tests are
required to be performed at least annually.
4. REAL ESTATE AND RELATED ASSETS
At December 31, 2023, CoreCivic owned or controlled via long-term leases 68 correctional, detention, and
residential reentry real estate properties, including 6 correctional properties in the Company's CoreCivic
Properties segment. At December 31, 2023, CoreCivic also managed four correctional and detention facilities
owned by governmental agencies.
F-14
Property and equipment, at cost, consists of the following (in thousands):
Land and improvements
Buildings and improvements
Equipment and software
Office furniture and fixtures
Less: Accumulated depreciation
December 31,
2023
2022
465,337
38,747
$ 237,505 $ 238,707
3,193,948 3,169,493
445,658
38,523
3,935,537 3,892,381
(1,821,015 ) (1,716,283 )
$ 2,114,522 $ 2,176,098
Depreciation expense was $126.8 million, $126.7 million, and $132.9 million for the years ended December 31,
2023, 2022, and 2021, respectively.
Nine of the facilities owned by CoreCivic are subject to options that allow various governmental agencies to
purchase those facilities. Certain of these options to purchase are based on a depreciated book value while others
are based on a fair market value calculation. Four of the facilities that are subject to options are accounted for
in accordance with ASC 853 and are recorded in other real estate assets on the consolidated balance sheets, as
further described in Note 2. As of December 31, 2023 and 2022, CoreCivic had $201.6 million and $208.2
million, respectively in other real estate assets, including $134.8 million and $136.3 million, respectively,
accounted for as a contract cost and $66.8 million and $71.9 million, respectively, accounted for as costs of
fulfilling the related service contract.
5.
LEASES
Lessee
As further described in Note 2, CoreCivic accounts for leases in accordance with ASC 842. CoreCivic leases
land and buildings from third-party lessors for multiple properties under operating leases that expire over
varying dates through 2032. The ROU asset related to these leases amounted to $119.8 million and $145.5
million at December 31, 2023 and 2022, respectively, while the current portion of the lease liability amounted
to $25.9 million and $24.1 million and the long-term portion of the liability amounted to $70.9 million and
$96.9 million at December 31, 2023 and 2022, respectively. As of December 31, 2023, the weighted-average
lease term of the operating leases was 3.5 years, and the weighted average discount rate associated with the
operating leases was 6.3%.
CoreCivic leases the South Texas Family Residential Center and the site upon which it was constructed from a
third-party lessor. CoreCivic's lease agreement with the lessor is over a base period concurrent with an inter-
governmental service agreement ("IGSA") with ICE, which was amended in September 2020 to extend the term
of the agreement through September 2026. ICE's termination rights, which permit ICE to terminate the
agreement for convenience or non-appropriation of funds, without penalty, by providing CoreCivic with at least
a 60-day notice, were unchanged under the extension. Concurrent with the extension of the amended IGSA, the
lease with the third-party lessor for the site was also extended through September 2026. Other terms of the
extended lease agreement were unchanged and provide CoreCivic with the ability to terminate the lease if ICE
terminates the amended IGSA associated with the facility. Under provisions of ASC 842, CoreCivic determined
that the South Texas Family Residential Center lease with the third-party lessor includes a non-lease component
for food services representing approximately 44% of the consideration paid under the lease.
F-15
The expense incurred for all operating leases, inclusive of short-term and variable leases, but exclusive of the
non-lease food services component of the South Texas Family Residential Center lease, was $34.2 million,
$34.2 million, and $34.6 million for the years ended December 31, 2023, 2022, and 2021, respectively. The
cash payments for operating leases are reflected as cash flows from operating activities on the accompanying
consolidated statements of cash flows and cash payments for financing leases are reflected as cash flows from
financing activities. Future minimum lease payments as of December 31, 2023 for the Company's operating
lease liabilities, inclusive of $79.1 million of payments expected to be made under the cancelable lease at the
South Texas facility (excluding the non-lease food services component), are as follows (in thousands):
2024
2025
2026
2027
2028
Thereafter
Total future minimum lease payments
Less amount representing interest
Total present value of minimum lease payments
$
$
33,372
33,263
25,705
3,579
3,167
8,940
108,026
(11,202 )
96,824
Lessor
In addition, through its CoreCivic Properties segment, as of December 31, 2023, the Company owned
$248.0 million in property and equipment at 6 properties, 5 of which are currently leased to government
agencies under operating and finance leases that expire over varying dates through 2040 and some of which
contain renewal options. In accordance with ASC 842, minimum lease revenue is recognized on a straight-line
basis over the term of the related lease. Lease incentives are recognized as a reduction to lease revenue on a
straight-line basis over the term of the related lease. Lease revenue associated with expense reimbursements
from tenants is recognized in the period that the related expenses are incurred based upon the tenant lease
provision. See Note 6 for further discussion regarding a 20-year lease agreement with the Kansas Department
of Corrections ("KDOC"). Future minimum lease payments to be received from third-party lessees as of
December 31, 2023 for the Company's operating and finance leases are as follows (in thousands):
2024
2025
2026
2027
2028
Thereafter
6. REAL ESTATE TRANSACTIONS
Assets Held For Sale and Dispositions
$
39,466
28,119
28,542
28,971
29,412
228,343
During the fourth quarter of 2023, CoreCivic completed the sale of its Augusta Transitional Center, located in
Augusta, Georgia and reported in CoreCivic's Properties segment. The sale of the property generated net sales
proceeds of $4.5 million and resulted in a gain on sale of $0.5 million reported in the fourth quarter of 2023.
During the third quarter of 2023, CoreCivic sold a vacant parcel of land generating net sales proceeds of
$0.5 million and resulting in a gain on sale of $0.4 million reported in the third quarter of 2023.
During the third quarter of 2022, CoreCivic began marketing for sale its Roth Hall Residential Reentry Center
and the Walker Hall Residential Reentry Center, both located in Philadelphia, Pennsylvania and reported in
CoreCivic's Properties segment. A purchase and sale agreement for these two Philadelphia properties was
executed in March 2023. The properties were sold on May 2, 2023, generating net sales proceeds of $5.8
million, resulting in a loss on sale of $25,000, which was reported in the second quarter of 2023.
F-16
As of December 31, 2023, CoreCivic had a facility in its CoreCivic Community segment held for sale. The
aggregate carrying value of the property and equipment of this facility, amounting to $7.5 million, was reflected
as assets held for sale on the Company's consolidated balance sheet as of December 31, 2023. The Company
closed on the sale of this property in January 2024 for a gross sales price of $8.0 million.
On July 25, 2022, CoreCivic entered into a Purchase and Sale Agreement with the Georgia Building Authority
for the sale of CoreCivic's McRae Correctional Facility located in McRae, Georgia, and reported in CoreCivic's
Safety segment, for a gross sales price of $130.0 million. The sale of the McRae facility was completed on
August 9, 2022. The sale generated net proceeds of $129.7 million, resulting in a gain on sale of $77.5 million
after transaction costs, which was reported in the third quarter of 2022. CoreCivic had a management contract
with the BOP at the McRae facility, which expired on November 30, 2022 and was not renewed. In connection
with the sale, CoreCivic and the Georgia Building Authority entered into an agreement to lease the McRae
Correctional Facility to CoreCivic through November 30, 2022 to allow the Company to fulfill its obligations
to the BOP.
In addition, during the full year 2022, CoreCivic completed the sales of three residential reentry centers in
Oklahoma and Colorado and reported in CoreCivic's Community segment, two community corrections facilities
leased to government agencies in California and reported in CoreCivic's Properties segment, and two
undeveloped parcels of land. The sales of these seven properties generated aggregate net sales proceeds of $27.3
million, resulting in an aggregate net gain on sale of $9.9 million after transaction costs. Pursuant to the
agreement to sell the Oklahoma property, in the third quarter of 2022, CoreCivic recognized an impairment
charge of $3.5 million associated with the facility, based on its fair value less costs to sell.
During the full year 2021, CoreCivic completed the sale of five government-leased properties in the Company's
Properties segment. The sales of the five properties generated aggregate net proceeds of $125.0 million, after
the repayment of mortgage debt and other transaction-related costs, resulting in an aggregate net gain on sale of
$38.7 million.
Financing Leasing Transactions
On January 24, 2018, CoreCivic entered into a 20-year lease agreement with the KDOC for a 2,432-bed
correctional facility to be constructed by the Company in Lansing, Kansas. The new facility replaced the
Lansing Correctional Facility, Kansas' largest correctional complex for adult male inmates, originally
constructed in 1863. CoreCivic will be responsible for facility maintenance throughout the 20-year term of the
lease, at which time ownership will revert to the state of Kansas. Construction of the facility commenced in the
first quarter of 2018, and construction was completed in January 2020, at which time the lease commenced.
CoreCivic accounts for the lease with the KDOC partially as a financing receivable under ASU 2016-02, "Leases
(Topic 842)", with the remaining portion of the lease payments attributable to maintenance services and capital
expenditures as revenue streams under ASC 606, "Revenue from Contracts with Customers". As of December
31, 2023 and 2022, the financing receivable was $139.0 million and $142.2 million, respectively, recognized in
Other Assets on the consolidated balance sheet. During 2023 and 2022, the Lansing Correctional Facility
generated $2.6 million and $2.5 million, respectively, of revenue associated with the non-lease services
components of the arrangement, and $8.5 million and $8.7 million of interest income, respectively.
F-17
Idle Facilities
As of December 31, 2023, CoreCivic had eight idled correctional facilities that are currently available and being
actively marketed as solutions to meet the needs of potential customers. The following table summarizes each
of the idled facilities and their respective carrying values, excluding equipment and other assets that could
generally be transferred and used at other facilities CoreCivic owns without significant cost (dollars in
thousands):
Facility
Prairie Correctional Facility
Huerfano County Correctional Center
Diamondback Correctional Facility
Marion Adjustment Center
Kit Carson Correctional Center
West Tennessee Detention Facility
Midwest Regional Reception Center
North Fork Correctional Facility
Net Carrying Values at
December 31,
2023
2022
$
$
13,230 $
14,058
33,764
9,968
47,638
18,568
49,736
60,044
247,006 $
14,165
14,580
35,587
10,326
49,444
19,581
51,938
62,737
258,358
As of December 31, 2023, CoreCivic also had one idled non-core facility in its Safety segment containing 240
beds with an aggregate net book value of $2.8 million, and two idled facilities in its Community segment,
containing an aggregate of 450 beds with an aggregate net book value of $3.4 million.
CoreCivic incurred operating expenses at these idled facilities of approximately $12.5 million, $9.7 million, and
$7.6 million during the period they were idle for the years ended December 31, 2023, 2022, and 2021,
respectively. The amount for 2021 excludes $2.2 million of operating expenses incurred at the West Tennessee
Detention Facility during the fourth quarter of 2021. The amount for 2022 excludes $3.5 million of operating
expenses incurred at the West Tennessee Detention Facility and the Midwest Regional Reception Center during
the three months ended March 31, 2022. The West Tennessee facility was idled upon the expiration of a USMS
contract on September 30, 2021, and the Midwest Regional Reception Center was idled upon the expiration of
a USMS contract on December 31, 2021. CoreCivic retained a certain staffing level at both facilities through
the first three months of 2022 in order to quickly respond in the event the Company was able to enter into new
contracts with government agencies promptly following the contract expirations. The Company also continued
to incur expenses related to transportation services provided by staff at the Midwest Regional Reception Center
during the first three months of 2022.
On December 6, 2022, the Company received notice from the California Department of Corrections and
Rehabilitation ("CDCR") of its intent to terminate the lease agreement for the Company's California City
Correctional Center by March 31, 2024, due to the state's declining inmate population. As part of its annual
budget process for the fiscal year ending June 30, 2024, the California legislature approved funding for the lease
through March 31, 2024. The Company has engaged with the state of California regarding the continued
utilization of the California City facility by the CDCR. However, the Company can provide no assurance that
it will be successful in reaching an agreement for the utilization of the facility beyond March 31, 2024. The
Company is also marketing the facility to other potential customers.
The Company estimated undiscounted cash flows for each facility with an impairment indicator, including the
idle facilities described above. The Company's estimated undiscounted cash flows reflect the Company’s most
recent expectations around potential utilization and/or sale of the facilities and projected cash flows based on
historical cash flows, cash flows of comparable facilities, and recent contract negotiations for utilization, as
applicable. The Company concluded that the estimated undiscounted cash flows exceeded carrying values for
each facility as of December 31, 2023 and 2022.
F-18
CoreCivic evaluates on a quarterly basis market developments for the potential utilization of each of its idle
properties in order to identify events that may cause CoreCivic to reconsider its assumptions with respect to the
recoverability of book values as compared to undiscounted cash flows. CoreCivic considers the cancellation of
a contract in its Safety or Community segment or an expiration and non-renewal of a lease agreement in its
CoreCivic Properties segment as indicators of impairment and tests each of the idled properties for impairment
when it is notified by the respective customers or tenants that they would no longer be utilizing such property.
7.
INVESTMENT IN AFFILIATE
CoreCivic has a 50% ownership interest in APM, an entity holding the management contract for a correctional
facility, HM Prison Forest Bank, under a 25-year prison management contract with an agency of the United
Kingdom government. CoreCivic has determined that its joint venture investment in APM represents a variable
interest entity ("VIE") in accordance with ASC 810, "Consolidation" of which CoreCivic is not the primary
beneficiary. The Forest Bank facility, located in Salford, England, which was sold in April 2001, was previously
constructed and owned by a wholly-owned subsidiary of CoreCivic. All gains and losses under the joint venture
are accounted for using the equity method of accounting. During 2000, CoreCivic extended a working capital
loan to APM, which has an outstanding balance of $2.9 million as of December 31, 2023 and is reported in other
assets on the accompanying consolidated balance sheets.
For the year ended December 31, 2023, equity in earnings of the joint venture was $325,000. For the years
ended December 31, 2022 and 2021, equity in losses of the joint venture was $124,000 and $138,000,
respectively. The equity in earnings and losses of the joint venture is included in other income (expense) in the
consolidated statements of operations.
8. OTHER ASSETS
Other assets consist of the following (in thousands):
Intangible assets, less accumulated amortization
of $2,307 and $2,435, respectively
Financing receivable - Kansas lease
ROU lease assets
Lease incentive assets
Debt issuance costs for revolving credit facility,
less accumulated amortization of $180 and
$765, respectively
Cash equivalents and cash surrender value of life
insurance held in rabbi trust
Straight-line rent receivable
Insurance receivable
Note receivable from APM
Other
December 31,
2023
2022
$
7,173 $
138,989
119,773
—
7,724
142,214
145,539
3,529
3,397
3,343
16,545
1,854
15,966
2,886
2,975
309,558 $
15,988
2,378
14,144
2,741
4,376
341,976
$
The gross carrying amount of intangible assets amounted to $9.5 million and $10.1 million at December 31,
2023 and 2022, respectively. Amortization expense related to intangible assets was $0.5 million, $1.3 million,
and $1.9 million for 2023, 2022, and 2021, respectively, and was reported as depreciation and amortization in
the accompanying statement of operations for the respective periods.
F-19
As of December 31, 2023, the estimated amortization expense related to intangible assets for each of the next
five years is as follows (in thousands):
2024
2025
2026
2027
2028
$
454
454
454
454
454
9. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES
Accounts payable and accrued expenses consist of the following (in thousands):
December 31,
Trade accounts payable
Accrued salaries and wages
Income taxes payable
Accrued dividends on RSUs
Accrued workers' compensation and auto liability
Accrued litigation
Accrued employee medical insurance
Accrued property taxes
Accrued interest
Lease liabilities
Deferred revenue
Construction payable
Other
$
2023
72,020 $
60,918
4,619
301
9,223
7,756
6,640
25,914
14,399
34,353
13,117
2,044
34,553
2022
89,683
49,345
2,190
406
9,208
6,905
7,233
26,460
15,733
32,696
10,903
3,034
31,430
$ 285,857 $ 285,226
Other long-term liabilities consist of the following (in thousands):
Intangible contract liability
Accrued workers' compensation
Accrued deferred compensation
Lease financing obligation
Lease liabilities
Other
December 31,
2023
2022
$ 3,869 $ 4,256
35,856 33,308
14,026 12,992
7,039
70,935 96,918
31
12
$ 131,673 $ 154,544
6,975
F-20
December 31,
2023
2022
$
— $
—
125,000
96,250
—
153,754
243,068
250,000
593,113
614,113
145,510
150,405
1,106,691 1,264,522
(14,763 )
624
(165,525 )
$ 1,083,476 $ 1,084,858
(12,052 )
434
(11,597 )
10. DEBT
Debt outstanding consists of the following (in thousands):
Revolving Credit Facility maturing October 2028.
Interest payable periodically at variable interest rates.
Term Loan maturing October 2028. Interest payable periodically
at variable interest rates. The rate at December 31, 2023 and 2022
was 8.7% and 7.5%, respectively. Unamortized debt issuance costs
amounted to $1.5 million and $1.4 million at December 31, 2023
and 2022, respectively. The Term Loan was increased and the
maturity was extended in the fourth quarter of 2023 in connection
with an amendment and restatement of the Bank Credit Facility,
as further described below.
4.625% Senior Notes. The 4.625% Senior Notes were redeemed
on February 1, 2023, as further described below.
4.75% Senior Notes maturing October 2027. Unamortized debt
issuance costs amounted to $1.5 million and $1.9 million at
December 31, 2023 and 2022, respectively.
8.25% Senior Notes maturing April 2026. Unamortized debt
issuance costs amounted to $5.8 million and $8.7 million at
December 31, 2023 and 2022, respectively.
4.43% Lansing Correctional Center Non-Recourse Mortgage Note
maturing January 2040. Unamortized debt issuance costs amounted
to $2.6 million and $2.8 million at December 31, 2023
and 2022, respectively.
Total debt
Unamortized debt issuance costs
Net unamortized original issue premium
Current portion of long-term debt
Long-term debt, net
F-21
Bank Credit Facility. On October 11, 2023, CoreCivic entered into a Fourth Amended and Restated Credit
Agreement (referred to herein as the "New Bank Credit Facility") in an aggregate principal amount of $400.0
million, consisting of a $125.0 million term loan (the "Term Loan") and a revolving credit facility with a
borrowing capacity of $275.0 million (the "Revolving Credit Facility"). The New Bank Credit Facility replaced
the Third Amended and Restated Credit Agreement (the "Previous Bank Credit Facility"), which was in an
aggregate principal amount of $350.0 million and consisted of a term loan with an original principal balance of
$100.0 million and a revolving credit facility with a borrowing capacity of $250.0.0 million. The New Bank
Credit Facility extends the maturity to October 2028 from the May 2026 maturity under the Previous Bank
Credit Facility. Consistent with the Previous Bank Credit Facility, the New Bank Credit Facility includes an
option to increase the availability under the Revolving Credit Facility and to request term loans from the lenders
in an aggregate amount not to exceed the greater of (a) $200.0 million and (b) 50% of consolidated EBITDA
for the most recently ended four-quarter period, subject to, among other things, the receipt of commitments for
the increased amount. At CoreCivic's option, interest on outstanding borrowings under the New Bank Credit
Facility is based on either a base rate plus a margin ranging from 1.75% to 3.5%, or at the Secured Overnight
Financing Rate ("SOFR") rate plus a margin ranging from 2.75% to 4.5% based on the Company’s then-current
total leverage ratio (replacing the Bloomberg Short-Term Bank Yield Index ("BSBY") rate under the Previous
Bank Credit Facility). The Revolving Credit Facility includes a $25.0 million sublimit for swing line loans that
enables CoreCivic to borrow at the base rate plus the applicable margin from the Administrative Agent (as
defined in the New Bank Credit Facility) on same-day notice. At the closing of the New Bank Credit Facility,
CoreCivic received approximately $33.8 million of net borrowings before transaction costs as a result of the
increased size of the Term Loan, and the Revolving Credit Facility remains unused, except for $17.9 million in
outstanding letters of credit. CoreCivic recorded a charge of approximately $1.0 million during the fourth
quarter of 2023 for the write-off of a portion of the pre-existing loan costs associated with the Previous Bank
Credit Facility. CoreCivic recorded a charge of approximately $0.8 million during the second quarter of 2022
for the write-off of a portion of the pre-existing loan costs associated with the bank credit facility replaced by
the Previous Bank Credit Facility.
Based on CoreCivic's total leverage ratio, loans under the New Bank Credit Facility at December 31, 2023 bore
interest at a base rate plus a margin of 2.25% or at the SOFR rate plus a margin of 3.25%, and a commitment
fee equal to 0.45% of the unfunded balance of the Revolving Credit Facility. The Revolving Credit Facility
also has a $100.0 million sublimit for the issuance of standby letters of credit. As of December 31, 2023,
CoreCivic had no borrowings outstanding under the Revolving Credit Facility. As of December 31, 2023,
CoreCivic had $17.9 million in letters of credit outstanding, resulting in $257.1 million available under the
Revolving Credit Facility. The Term Loan requires scheduled quarterly principal payments through October
2028, and is pre-payable without penalty. As of December 31, 2023, the outstanding balance of the Term Loan
was $125.0 million.
F-22
Consistent with the Previous Bank Credit Facility, the New Bank Credit Facility requires CoreCivic to meet
certain financial covenants, including, without limitation, a total leverage ratio of not more than 4.50 to 1.00, a
secured leverage ratio of not more than 2.50 to 1.00, and a fixed charge coverage ratio of not less than 1.75 to
1.00. The Previous Bank Credit Facility also included a $100.0 million limit of netting unrestricted cash and
cash equivalents when calculating the consolidated total leverage ratio and the consolidated secured leverage
ratio. The New Bank Credit Facility was modified to remove the $100.0 million limit from those covenants. As
of December 31, 2023, CoreCivic was in compliance with all such covenants. Also consistent with the Previous
Bank Credit Facility, the New Bank Credit Facility is secured by a pledge of all of the capital stock (or other
ownership interests) of CoreCivic's domestic restricted subsidiaries, 65% of the capital stock (or other ownership
interests) of CoreCivic's "first-tier" foreign subsidiaries, all of the accounts receivable of the Company and its
domestic restricted subsidiaries, and substantially all of the deposit accounts of the Company and its domestic
restricted subsidiaries. In the event that (a) the consolidated total leverage equals or exceeds 4.25 to 1.00 (4.00
to 1.00 under the Previous Bank Credit Facility) or (b) the Company incurs certain debt above a specified
threshold, each known as a "springing lien" event, certain intangible assets and unencumbered real estate assets
that meet a 50% loan-to-value requirement are required to be added as collateral. The New Bank Credit Facility
is consistent with the Previous Bank Credit Facility in that it contains certain covenants that, among other things,
limit the incurrence of additional indebtedness, payment of dividends and other customary restricted payments,
permitted investments, transactions with affiliates, asset sales, mergers and consolidations, liquidations,
prepayments and modifications of other indebtedness, liens and other encumbrances and other matters
customarily restricted in such agreements. Also consistent with the Previous Bank Credit Facility, the New
Bank Credit Facility is subject to certain cross-default provisions with terms of CoreCivic's other unsecured
indebtedness and is subject to acceleration upon the occurrence of a change of control.
Senior Notes. Interest on the $243.1 million remaining aggregate principal amount of CoreCivic's 4.75% senior
notes issued in October 2017 with an original principal amount of $250.0 million (the "4.75% Senior Notes")
accrues at the stated rate and is payable in April and October of each year. The 4.75% Senior Notes are scheduled
to mature on October 15, 2027. During 2023, the Company purchased $6.9 million principal amount of the
4.75% Senior Notes through open market purchases, reducing the outstanding balance of the 4.75% Senior
Notes to $243.1 million as of December 31, 2023. Interest on the $593.1 million remaining aggregate principal
amount of CoreCivic's 8.25% senior notes issued in April and September 2021 with an original principal amount
of $675.0 million (the "8.25% Senior Notes") accrues at the stated rate and is payable in April and October of
each year. The 8.25% Senior Notes are scheduled to mature on April 15, 2026. During 2022, the Company
purchased $60.9 million principal amount of the 8.25% Senior Notes at a weighted average purchase price
approximately equal to par through open market purchases. CoreCivic recorded charges of $1.2 million during
2022 primarily for the write-off of a pro-rata portion of the pre-existing loan costs associated with these open
market purchases. During 2023, the Company purchased an additional $21.0 million principal amount of the
8.25% Senior Notes through open market purchases, reducing the outstanding balance of the 8.25% Senior
Notes to $593.1 million as of December 31, 2023. The 2023 purchases of the 4.75% and 8.25% Senior Notes
were at a weighted average purchase price of 97% of par, resulting in a net discount of approximately
$0.7 million recorded as a credit to expenses associated with debt repayments and refinancing transactions. The
net discount was partially offset by $0.4 million of charges associated with third-party fees and the write-off of
a pro-rata portion of the pre-existing loan costs associated with the open market purchases of the 4.75% and
8.25% Senior Notes.
The 4.75% Senior Notes and the 8.25% Senior Notes, collectively referred to herein as the "Senior Notes," are
senior unsecured obligations of the Company and are guaranteed by all of the Company's existing and future
subsidiaries that guarantee the New Bank Credit Facility. CoreCivic may redeem all or part of the 4.75% Senior
Notes at any time prior to three months before their maturity date at a "make-whole" redemption price, plus
accrued and unpaid interest thereon to, but not including, the redemption date. Thereafter, the 4.75% Senior
Notes are redeemable at CoreCivic's option, in whole or in part, at a redemption price equal to 100% of the
aggregate principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to, but not
including, the redemption date. The Company may redeem all or part of the 8.25% Senior Notes at any time
prior to April 15, 2024, in whole or in part, at a "make-whole" redemption price, plus accrued and unpaid interest
thereon to, but not including, the redemption date. Thereafter, the 8.25% Senior Notes are redeemable at
CoreCivic's option, in whole or in part, at a redemption price expressed as a percentage of the principal amount
thereof, which percentage is 104.125% beginning on April 15, 2024 and 100% beginning on April 15, 2025,
plus, in each such case, accrued and unpaid interest thereon to, but not including, the redemption date.
F-23
On December 22, 2022, CoreCivic delivered an irrevocable notice to the holders of CoreCivic's 4.625% senior
notes issued in April 2013 with an original principal amount of $350.0 million (the "4.625% Senior Notes") that
the Company elected to redeem in full the 4.625% Senior Notes that remained outstanding on February 1, 2023.
During 2021 and 2022, CoreCivic purchased $196.2 million of the 4.625% Senior Notes through privately
negotiated transactions and open market purchases. The remaining 4.625% Senior Notes were redeemed on
February 1, 2023 at a redemption price equal to 100% of the principal amount of the outstanding 4.625% Senior
Notes, which amounted to $153.8 million, plus accrued and unpaid interest to, but not including, the redemption
date. The Company used a combination of cash on hand and available capacity under its Revolving Credit
Facility to fund the redemption.
The indentures governing the Senior Notes contain certain customary covenants that, subject to certain
exceptions and qualifications, restrict CoreCivic's ability to, among other things, create or permit to exist certain
liens and consolidate, merge or transfer all or substantially all of CoreCivic's assets. In addition, if CoreCivic
experiences specific kinds of changes in control, CoreCivic must offer to repurchase all or any portion of the
Senior Notes. The offer price for the Senior Notes in connection with a change in control would be 101% of
the aggregate principal amount of the notes repurchased plus accrued and unpaid interest, if any, on the notes
repurchased to the date of purchase. The indenture related to our 8.25% Senior Notes additionally limits our
ability to incur indebtedness, make restricted payments and investments and prepay certain indebtedness. The
Senior Notes are also subject to certain cross-default provisions with certain of CoreCivic's other indebtedness,
which includes the New Bank Credit Facility.
Lansing Correctional Facility Non-Recourse Mortgage Note. On April 20, 2018, CoreCivic of Kansas, LLC
(the "Issuer"), a wholly-owned unrestricted subsidiary of the Company, priced $159.5 million in aggregate
principal amount of non-recourse senior secured notes of the Issuer (the "Kansas Notes"), in a private placement
pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The private placement closed on June 1,
2018. The Company used the proceeds of the private placement, which were drawn on quarterly funding dates
beginning in the second quarter of 2018, to fund construction of the Lansing Correctional Facility, along with
costs and expenses of the project. The Kansas Notes have a yield to maturity of 4.43% and are scheduled to
mature in January 2040, 20 years following completion of the project, which occurred in January 2020. Principal
and interest on the Kansas Notes are payable in quarterly payments, which began in July 2020 and continue
until maturity. CoreCivic may redeem all or part of the Kansas Notes at any time upon written notice of not less
than 30 days and not more than 60 days prior to the date fixed for such prepayment, with a "make-whole"
amount, together with interest on the Kansas Notes accrued to, but not including, the redemption date. CoreCivic
capitalized approximately $3.4 million of costs associated with the private placement. Because the Issuer has
been designated as an unrestricted subsidiary of the Company under terms of the Company's New Bank Credit
Facility, the issuance and service of the Kansas Notes, and the revenues and expenses associated with the facility
lease, do not impact the financial covenants associated with the Company's New Bank Credit Facility. As of
December 31, 2023, the outstanding balance of the Kansas Notes was $145.5 million.
Guarantees and Covenants. All of the restricted domestic subsidiaries of CoreCivic (as the parent corporation)
have provided full and unconditional guarantees of the Senior Notes. All of CoreCivic's subsidiaries
guaranteeing the Senior Notes are 100% owned subsidiaries of CoreCivic; and the subsidiary guarantees are full
and unconditional and are joint and several obligations of the guarantors.
As of December 31, 2023, neither CoreCivic nor any of its subsidiary guarantors had any material or significant
restrictions on CoreCivic's ability to obtain funds from its subsidiaries by dividend or loan or to transfer assets
from such subsidiaries.
Other Debt Transactions
Letters of Credit. At December 31, 2023 and 2022, CoreCivic had $17.9 million and $16.8 million, respectively,
in outstanding letters of credit. The letters of credit were issued primarily to secure CoreCivic's workers'
compensation and general liability insurance policies, performance bonds, and for a debt service reserve
requirement under terms of the Kansas Notes.
F-24
Debt Maturities
Scheduled principal payments as of December 31, 2023 for the next five years and thereafter were as follows
(in thousands):
2024
2025
2026
2027
2028
Thereafter
Total debt
$
11,597
12,073
608,814
262,423
97,995
113,789
$ 1,106,691
Cross-Default Provisions
The provisions of CoreCivic's debt agreements relating to the New Bank Credit Facility and the Senior Notes
contain certain cross-default provisions. Any events of default under the New Bank Credit Facility that result
in the lenders' actual acceleration of amounts outstanding thereunder also result in an event of default under the
Senior Notes. Additionally, any events of default under the Senior Notes that give rise to the ability of the
holders of such indebtedness to exercise their acceleration rights also result in an event of default under the New
Bank Credit Facility.
If CoreCivic were to be in default under the New Bank Credit Facility, and if the lenders under the New Bank
Credit Facility elected to exercise their rights to accelerate CoreCivic's obligations under the New Bank Credit
Facility, such events could result in the acceleration of all or a portion of CoreCivic's Senior Notes, which would
have a material impact on CoreCivic's liquidity and financial position. CoreCivic does not have sufficient
working capital to satisfy its debt obligations in the event of an acceleration of all or a substantial portion of
CoreCivic's outstanding indebtedness.
11. DEFERRED REVENUE
In September 2014, CoreCivic announced that it had agreed under an expansion of an existing IGSA to care for
up to 2,400 individuals for ICE at the South Texas Family Residential Center, a facility leased by CoreCivic in
Dilley, Texas. Services provided under the original IGSA commenced in the fourth quarter of 2014 and had an
original term of up to four years. The agreement provided for a fixed monthly payment in accordance with a
graduated schedule. In October 2016, CoreCivic entered into an amended IGSA that provided for a new, lower
fixed monthly payment commencing in November 2016, and extended the term of the contract through
September 2021. In September 2020, the term of the amended IGSA was extended from September 2021 to
September 2026. The agreement can be further extended by bi-lateral modification. ICE's termination rights,
which permit ICE to terminate the agreement for convenience or non-appropriation of funds, without penalty,
by providing CoreCivic with at least a 60-day notice, were unchanged under the extension. ICE began housing
the first residents at the facility in December 2014, and the site was completed during the second quarter of
2015.
F-25
Under the fixed monthly payment schedule of the original IGSA, ICE agreed to pay CoreCivic $70.0 million in
two $35.0 million installments during the fourth quarter of 2014 and graduated fixed monthly payments over
the remaining months of the contract. During the years ended December 31, 2023, 2022, and 2021, CoreCivic
recognized $156.1 million, $156.1 million, and $159.7 million, respectively, in revenue associated with the
amended IGSA with the unrecognized balance of the fixed monthly payments reported in deferred revenue. The
current portion of deferred revenue is reflected within accounts payable and accrued expenses while the long-
term portion is reflected as deferred revenue on the accompanying consolidated balance sheets. As of December
31, 2023 and 2022, total deferred revenue associated with this agreement amounted to $7.3 million and
$9.9 million, respectively.
12.
INCOME TAXES
CoreCivic recorded an income tax expense of $28.2 million, $43.0 million, and $138.0 million for the years
ended December 31, 2023, 2022 and 2021, respectively. Income tax expense during 2021 included $114.2
million primarily resulting from the revaluation of the Company's net deferred tax liabilities due to the
completion of all significant actions necessary to revoke its REIT election. No catch-up tax payments or
penalties resulted from the revocation of the Company's REIT election.
Income tax expense is comprised of the following components (in thousands):
For the Years Ended December 31,
2021
2022
2023
Current income tax expense
Federal
State
Deferred income tax expense (benefit)
Federal
State
Income tax expense
$ 25,037 $ 25,681 $ 32,137
6,592
38,729
5,840
31,521
5,899
30,936
(2,156 )
(547 )
(2,703 )
86,703
12,567
99,270
$ 28,233 $ 42,982 $ 137,999
11,484
(23 )
11,461
Significant components of CoreCivic's deferred tax assets and liabilities as of December 31, 2023 and 2022, are
as follows (in thousands):
Noncurrent deferred tax assets:
Asset reserves and liabilities not yet deductible for tax
Accrued compensation not yet deductible for tax
Accrued workers comp liabilities not yet deductible for tax
Depreciation
ROU lease assets
Losses and tax credit carryforwards
Intangible assets
Other
$
Total noncurrent deferred tax assets
Less valuation allowance
Total noncurrent deferred tax assets
Noncurrent deferred tax liabilities:
Depreciation
Lease liabilities
Intangible liabilities
Other
Total noncurrent deferred tax liabilities
Net total noncurrent deferred tax liabilities
$
December 31,
2023
2022
14,915 $
12,419
11,333
8,669
25,282
1,591
7,669
9,010
90,888
(848 )
90,040
8,625
9,913
10,976
8,502
33,226
1,807
7,836
9,954
90,839
(848 )
89,991
(151,918 )
(24,721 )
(7,860 )
(2,456 )
(186,955 )
(96,915 ) $
(148,255 )
(32,663 )
(7,557 )
(1,134 )
(189,609 )
(99,618 )
F-26
A reconciliation of the income tax provision at the statutory income tax rate and the effective tax rate as a
percentage of income from continuing operations before income taxes for the years ended December 31, 2023,
2022, and 2021 is as follows:
Statutory federal rate
Revaluation of deferred tax liabilities
State taxes, net of federal tax benefit
Permanent differences
Tax expense (benefit) of equity-based compensation
Other items, net
2023
2022
2021
21.0 %
—
4.5
4.3
(0.3 )
—
29.5 %
21.0 %
—
3.4
1.7
—
(0.1 )
26.0 %
21.0 %
132.7
4.8
2.8
2.6
(3.6 )
160.3 %
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act
(the "CARES Act"). The CARES Act, among other things, incentivized companies to retain employees through
an Employee Retention Credit ("ERC"). The ERC compensates employers for wages of employees that were
retained and could not perform their job duties at 100% capacity as a result of coronavirus pandemic restrictions.
In December 2020, the Consolidated Appropriations Act provided additional funding for the ERC with
expanded benefits through June 30, 2021. During the year ended December 31, 2022, the Company recorded
an ERC of $7.0 million, which offset operating expenses. The credit was reduced by $1.8 million of federal
income tax expense.
The Inflation Reduction Act of 2022 (the "Inflation Reduction Act") was signed into law on August 16, 2022.
Among other provisions, such act creates an excise tax of 1% on the fair value of net stock repurchases in excess
of share issuances made by publicly traded U.S. corporations, effective for repurchases after December 31,
2022. The impact of this excise tax on the Company’s financial position, and/or liquidity, in future periods, will
vary based on the level of net stock repurchases in excess of share issuances made by the Company in a given
year. The Company has concluded that the excise tax associated with stock repurchases is properly recognized
as a component of equity given that it is a direct cost associated with the repurchase of common stock. The
excise tax recognized during the year ended December 31, 2023 was estimated to be $0.3 million associated
with the repurchase of 3.5 million shares, net of the shares issued for restricted stock plans as permitted by the
issuance offset rule under the Inflation Reduction Act.
CoreCivic had no liabilities for uncertain tax positions as of December 31, 2023 and 2022. CoreCivic recognizes
interest and penalties related to unrecognized tax positions in income tax expense. CoreCivic does not currently
anticipate that the total amount of unrecognized tax positions will significantly change in the next twelve
months.
CoreCivic's U.S. federal income tax returns for tax years 2020 through 2022 remain subject to examination by
the Internal Revenue Service ("IRS"). The majority of states in which CoreCivic files income tax returns follow
the same statute of limitations as the federal government. Certain states in which CoreCivic files income tax
returns have statutes that remain open from 2019.
13. STOCKHOLDERS' EQUITY
Dividends on Common Stock
On August 5, 2020, the Board of Directors ("BOD") voted unanimously to approve a plan to revoke the
Company’s REIT election and become a taxable C Corporation, effective January 1, 2021; the BOD also voted
unanimously to discontinue the then-current quarterly dividend and prioritize allocating the Company's free
cash flow to reduce debt levels.
F-27
Common Stock
Share Repurchase Program. On May 12, 2022, the BOD approved a share repurchase program to repurchase
up to $150.0 million of the Company's common stock. On August 2, 2022, the BOD increased the authorization
to repurchase under the share repurchase program by up to an additional $75.0 million of the Company's
common stock, or a total aggregate authorized amount to repurchase up to $225.0 million of the Company's
common stock. Repurchases of the Company's outstanding common stock will be made in accordance with
applicable securities laws and may be made at the Company's discretion based on parameters set by the BOD
from time to time in the open market, through privately negotiated transactions, or otherwise. The share
repurchase program has no time limit and does not obligate the Company to purchase any particular amount of
its common stock. The authorization for the share repurchase program may be terminated, suspended, increased
or decreased by the BOD in its discretion at any time. Through December 31, 2023, the Company repurchased
10.1 million shares of its common stock at a total cost of $112.6 million, excluding costs associated with the
share repurchase program, or $11.16 per share, including 3.5 million shares at a total cost of $38.1 million, or
$10.97 per share, during 2023.
Restricted stock units. During 2023, CoreCivic issued approximately 2.0 million RSUs to certain of its
employees and non-employee directors, with an aggregate value of $22.3 million, including 1.8 million RSUs
to employees and non-employee directors whose compensation is charged to general and administrative expense
and 0.2 million RSUs to employees whose compensation is charged to operating expense. During 2022,
CoreCivic issued approximately 2.1 million RSUs to certain of its employees and non-employee directors, with
an aggregate value of $21.5 million, including 1.9 million RSUs to employees and non-employee directors
whose compensation is charged to general and administrative expense and 0.2 million RSUs to employees
whose compensation is charged to operating expense.
CoreCivic has established performance-based vesting conditions on a portion of the RSUs awarded to its officers
and executive officers that, unless earlier vested under the terms of the agreements, are subject to vesting over
a three-year period based upon the satisfaction of certain annual performance criteria. The RSUs awarded to
officers and executive officers in 2021, 2022 and 2023 consist of a combination of awards with performance-
based conditions and time-based conditions. Unless earlier vested under the terms of the RSU agreements, the
RSUs with time-based vesting conditions vest in equal amounts over three years on the later of (i) the
anniversary date of the grant or (ii) the delivery of the audited financial statements by the Company's
independent registered public accountant for the applicable fiscal year. The RSUs with performance-based
vesting conditions are divided into one-third increments, each of which is subject to vesting based upon
satisfaction of certain annual performance criteria established at the beginning of the fiscal years ending
December 31, 2021, 2022, and 2023 for the 2021 awards, December 31, 2022, 2023, and 2024 for the 2022
awards, and December 31, 2023, 2024, and 2025 for the 2023 awards, and which can be increased up to 150%
or decreased to 0% based on performance relative to the annual performance criteria, and further increased or
decreased using a modifier of 80% to 120% based on CoreCivic's total shareholder return relative to a peer
group. Based on performance achieved for 2023, the RSUs subject to performance-based vesting criteria were
increased by 106.9%; and were further increased by a 120% modifier based on CoreCivic's total shareholder
return relative to the peer group. Because the performance criteria for the fiscal years ending December 31,
2024 and 2025 have not yet been established, the values of the third RSU increment of the 2022 awards and of
the second and third increments of the 2023 awards for financial reporting purposes will not be determined until
such criteria are established. Time-based RSUs issued to other employees, unless earlier vested under the terms
of the agreements, generally vest in equal amounts over three years on the later of (i) the anniversary date of the
grant or (ii) the delivery of the audited financial statements by the Company's independent registered public
accountant for the applicable fiscal year. RSUs issued to non-employee directors generally vest one year from
the date of award.
F-28
Nonvested RSU transactions as of December 31, 2023 and activity for the year then ended are summarized
below (in thousands, except per share amounts).
Nonvested at December 31, 2022
Granted
Cancelled
Vested
Nonvested at December 31, 2023
Shares of
RSUs
3,871
1,968
(120)
(1,849)
3,870
Weighted
average
grant date
fair value
$9.87
$11.35
$10.20
$10.33
$10.61
During 2023, 2022, and 2021, CoreCivic expensed $20.8 million ($1.6 million of which was recorded in
operating expenses and $19.2 million of which was recorded in general and administrative expenses), $17.6
million ($1.5 million of which was recorded in operating expenses and $16.1 million of which was recorded in
general and administrative expenses), and $18.7 million ($1.6 million of which was recorded in operating
expenses and $17.1 million of which was recorded in general and administrative expenses), net of forfeitures,
relating to RSUs, respectively. As of December 31, 2023, CoreCivic had $16.2 million of total unrecognized
compensation cost related to RSUs that is expected to be recognized over a remaining weighted-average period
of 1.6 years. The total fair value of RSUs that vested during 2023, 2022, and 2021 was $17.8 million,
$18.3 million, and $6.4 million, respectively.
At CoreCivic's 2022 annual meeting of stockholders held in May 2022, CoreCivic's stockholders approved the
CoreCivic, Inc. Amended and Restated 2020 Stock Incentive Plan that authorized the issuance of new awards
to an aggregate of up to 5.9 million shares, plus remaining shares that were available for grant under the
CoreCivic, Inc. 2020 Stock Incentive Plan. As of December 31, 2023, CoreCivic had 6.1 million shares
available for issuance under the Amended and Restated 2020 Stock Incentive Plan.
Preferred Stock
CoreCivic has the authority to issue 50.0 million shares of $0.01 par value per share preferred stock (the
"Preferred Stock"). The Preferred Stock may be issued from time to time upon authorization by the BOD, in
such series and with such preferences, conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or other provisions as may be fixed by CoreCivic's BOD.
14. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted average number of common shares
outstanding during the year. Diluted earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted into common stock or resulted
in the issuance of common stock that then shared in the earnings of the entity. For CoreCivic, diluted earnings
per share is computed by dividing net income by the weighted average number of common shares after
considering the additional dilution related to restricted stock-based awards and stock options.
F-29
A reconciliation of the numerator and denominator of the basic earnings per share computation to the numerator
and denominator of the diluted earnings per share computation is as follows (in thousands, except per share
data):
NUMERATOR
Basic:
Net income (loss)
Diluted:
Net income (loss)
DENOMINATOR
Basic:
For the Years Ended December 31,
2021
2022
2023
$ 67,590 $ 122,320 $ (51,896 )
$ 67,590 $ 122,320 $ (51,896 )
Weighted average common shares outstanding
113,798 118,199 120,192
Diluted:
Weighted average common shares outstanding
Effect of dilutive securities:
Restricted stock-based awards
Weighted average shares and assumed
conversions
BASIC EARNINGS (LOSS) PER SHARE
DILUTED EARNINGS (LOSS) PER SHARE
113,798 118,199 120,192
852
899
—
114,650 119,098 120,192
(0.43 )
$
(0.43 )
$
0.59 $
0.59 $
1.03 $
1.03 $
For the year ended December 31, 2021, 0.5 million of restricted stock-based awards and 1.0 million of non-
controlling interest - operating partnership units were excluded from the computation of diluted loss per share
because they were anti-dilutive. In addition, approximately 0.1 million and 0.3 million of stock options were
excluded from the computations of diluted earnings (loss) per share for the years ended December 31, 2022 and
2021, respectively, because they were anti-dilutive.
15. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The nature of CoreCivic's business results in claims and litigation alleging that it is liable for damages arising
from the conduct of its employees, offenders or others. The nature of such claims includes, but is not limited
to, claims arising from employee or offender misconduct, medical malpractice, employment matters, property
loss, contractual claims, including claims regarding compliance with contract performance requirements, and
personal injury or other damages resulting from contact with CoreCivic's facilities, personnel or offenders,
including damages arising from an offender's escape or from a disturbance at a facility. CoreCivic maintains
insurance to cover many of these claims, which may mitigate the risk that any single claim would have a material
effect on CoreCivic's consolidated financial position, results of operations, or cash flows, provided the claim is
one for which coverage is available. The combination of self-insured retentions and deductible amounts means
that, in the aggregate, CoreCivic is subject to self-insurance risk.
F-30
Based upon management's review of the potential claims and outstanding litigation, and based upon
management's experience and history of estimating losses, and taking into consideration CoreCivic's self-
insured retention amounts, management believes a loss in excess of amounts already recognized would not be
material to CoreCivic's financial statements. Adversarial proceedings and litigation are, however, subject to
inherent uncertainties, and unfavorable decisions and rulings resulting from legal proceedings could occur which
could have a material impact on CoreCivic's consolidated financial position, results of operations, or cash flows
for the period in which such decisions or rulings occur, or future periods. Expenses associated with legal
proceedings may also fluctuate from quarter to quarter based on changes in CoreCivic's assumptions, new
developments, or by the effectiveness of CoreCivic's litigation and settlement strategies.
CoreCivic records a liability in the consolidated financial statements for loss contingencies when a loss is known
or considered probable, and the amount can be reasonably estimated. If the reasonable estimate of a known or
probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount
of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably
estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss,
significant judgment is required to estimate the amount and timing of a loss to be recorded. Any receivable for
insurance recoveries is recorded separately from the corresponding litigation reserve, and only if recovery is
determined to be probable and the amount of payment can be determined. CoreCivic does not accrue for
anticipated legal fees and costs and expenses those items as incurred.
ICE Detainee Labor and Related Matters.
On May 31, 2017, two former ICE detainees, who were detained at the Company's Otay Mesa Detention Center
("OMDC") in San Diego, California, filed a class action lawsuit against the Company in the United States
District Court for the Southern District of California. The complaint alleged that the Company forces detainees
to perform labor under threat of punishment in violation of state and federal anti-trafficking laws and that
OMDC's Voluntary Work Program ("VWP") violates state labor laws including state minimum wage law. ICE
requires that CoreCivic offer and operate the VWP in conformance with ICE standards and ICE prescribes the
minimum rate of pay for VWP participants. The Plaintiffs seek compensatory damages, exemplary damages,
restitution, penalties, and interest as well as declaratory and injunctive relief on behalf of former and current
detainees. On April 1, 2020, the district court certified a nationwide anti-trafficking claims class of former and
current detainees who participated in an ICE VWP at a CoreCivic facility. It also certified a state law class of
former and current detainees who participated in a VWP wherever the Company held ICE detainees in
California. The court did not certify any claims for injunctive or declaratory relief. On March 10, 2021, the
Ninth Circuit Court of Appeals granted CoreCivic's petition to appeal the class certification ruling. On June 3,
2022, a three-judge panel of the Ninth Circuit affirmed the class certification ruling. Following the three-judge
panel affirmance, the Company petitioned the Ninth Circuit for a discretionary appellate review, which was
denied. On January 3, 2023, the Ninth Circuit Court granted the Company's motion to stay its mandate during
the pendency of the Company's petition for Supreme Court review. On June 12, 2023, the Supreme Court
dismissed the Company's petition. The claims resulting in certified classes will now proceed in the United
States District Court for the Southern District of California.
Since this case was filed, four similar lawsuits have been filed. A second California lawsuit concerning the Otay
Mesa facility has been stayed pending the outcome of class proceedings in the first California case discussed
above. The Company disputes the allegations in this case and intends to vigorously defend itself against them. A
Maryland case was dismissed on September 27, 2019, and the dismissal was affirmed on appeal. Two suits filed
in Georgia and Texas do not allege minimum wage violations. The Texas case was voluntarily dismissed on
March 14, 2022. The Georgia case was appealed to the Eleventh Circuit following the District Court's decision
not to certify any classes, and the Eleventh Circuit affirmed the District Court's ruling on May 31, 2023. On
September 29, 2023, the parties submitted a notice of settlement to the District Court, and finalized the
settlement on October 17, 2023, without material liability to the Company.
Due to the stage of the ongoing proceedings, the Company cannot reasonably predict the outcomes, nor can it
estimate the amount of loss or range of loss, if any, that may result. As a result, the Company has not recorded
an accrual relating to these matters at this time, as losses are not considered probable or reasonably estimable at
this stage of these lawsuits.
F-31
Shareholder Litigation.
In a memorandum to the BOP dated August 18, 2016, the DOJ directed that, as each contract with privately
operated prisons reaches the end of its term, the BOP should either decline to renew that contract or substantially
reduce its scope in a manner consistent with law and the overall decline of the BOP's inmate population.
Following the release of the August 18, 2016 DOJ memorandum, a securities class action lawsuit was filed on
August 23, 2016 against the Company and certain of its current and former officers in the United States District
Court for the Middle District of Tennessee (the "District Court"), captioned Grae v. Corrections Corporation
of America et al., Case No. 3:16-cv-02267. The Company settled this lawsuit in April 2021. The settlement,
which was approved by the District Court on November 8, 2021, contains no admission of liability, wrongdoing,
or responsibility by any of the defendants including the Company. The Company paid the settlement amount of
$56.0 million in May 2021. As a result of the settlement, the Company recognized an expense of $54.3 million
during the year ended December 31, 2021, which was net of the remaining insurance available under the
Company's policies.
The Company was also named along with several of our directors in six derivative lawsuits which raise similar
allegations to those raised in the Grae securities litigation. On June 17, 2022, CoreCivic and derivative plaintiffs
informed the District Court that the parties had reached an agreement as to the plaintiffs' attorneys' fees and
expenses, including $1.9 million the Company expensed during the year ended December 31, 2022. The final
settlement, which was approved by the District Court on December 2, 2022, also calls for the Company to adopt
certain governance changes, which the Company has implemented.
Insurance Contingencies
Each of CoreCivic's management contracts and the statutes of certain states require the maintenance of
insurance. CoreCivic maintains various insurance policies including employee health, workers' compensation,
automobile liability, and general liability insurance. These policies are fixed premium policies with various
deductible amounts that are self-funded by CoreCivic. Reserves are provided for estimated incurred claims for
which it is probable that a loss has been incurred and the range of such loss can be estimated.
Retirement Plan
All employees of CoreCivic are eligible to participate in the CoreCivic 401(k) Savings and Retirement Plan (the
"Plan") upon reaching age 18 and completing six months of qualified service. Eligible employees may
contribute up to 90% of their eligible compensation, subject to IRS limitations. For the years ended December
31, 2023, 2022, and 2021, CoreCivic provided a discretionary matching contribution equal to 100% of the
employee's contributions up to 5% of the employee's eligible compensation to employees with at least 500 hours
of employment in the plan year. Employer matching contributions paid into the Plan each pay period vest
immediately pursuant to safe harbor provisions adopted by the Plan. During 2023, 2022, and 2021, CoreCivic's
discretionary contributions and expense to the Plan were $14.4 million, $15.3 million, and $15.2 million,
respectively.
F-32
Deferred Compensation Plans
CoreCivic provides two non-qualified deferred compensation plans (the "Deferred Compensation Plans") for
non-employee directors and for certain senior executives. The Deferred Compensation Plans are unfunded plans
maintained for the purpose of providing CoreCivic's directors and certain of its senior executives the opportunity
to defer a portion of their compensation. Under the terms of the Deferred Compensation Plans, certain senior
executives may elect to contribute on a pre-tax basis up to 50% of their base salary and up to 100% of their cash
bonus, and non-employee directors may elect to contribute on a pre-tax basis up to 100% of their director retainer
and meeting fees. During the years ended December 31, 2023, 2022, and 2021, CoreCivic matched 100% of
employee contributions up to 5% of total cash compensation. CoreCivic also contributes a fixed rate of return
on balances in the Deferred Compensation Plans, determined at the beginning of each plan year. Matching
contributions and investment earnings thereon become vested 20% after two years of service, 40% after three
years of service, 80% after four years of service, and 100% after five or more years of service. Distributions
are generally payable no earlier than five years subsequent to the date an individual becomes a participant in the
Plan, or upon termination of employment (or the date a director ceases to serve as a director of CoreCivic), at
the election of the participant. Distributions to senior executives must commence on or before the later of 60
days after the participant's separation from service or the fifteenth day of the month following the month the
individual attains age 65.
During 2023, 2022, and 2021, CoreCivic provided a fixed return of 5.0% in each year to participants in the
Deferred Compensation Plans. CoreCivic has purchased life insurance policies on the lives of certain employees
of CoreCivic, which are intended to fund distributions from the Deferred Compensation Plans. CoreCivic is the
sole beneficiary of such policies. At the inception of the Deferred Compensation Plans, CoreCivic established
an irrevocable Rabbi Trust to secure the plans' obligations. However, assets in the Deferred Compensation
Plans are subject to creditor claims in the event of bankruptcy. During 2023, 2022, and 2021, CoreCivic
recorded $0.3 million, $0.3 million, and $0.2 million, respectively, of matching contributions as general and
administrative expense associated with the Deferred Compensation Plans. Assets in the Rabbi Trust were $16.5
million and $16.0 million as of December 31, 2023 and 2022, respectively, and were reflected in other assets
on the accompanying consolidated balance sheets. As of December 31, 2023 and 2022, CoreCivic's liability
related to the Deferred Compensation Plans was $14.6 million and $13.8 million, respectively, which was
reflected in accounts payable and accrued expenses and other liabilities on the accompanying consolidated
balance sheets.
Employment and Severance Agreements
CoreCivic currently has employment agreements with several of its executive officers, which provide for the
payment of certain severance amounts upon termination of employment under certain circumstances or a change
of control, as defined in the agreements.
16. SEGMENT REPORTING
As of December 31, 2023, CoreCivic operated 43 correctional and detention facilities, 39 of which the Company
owned. In addition, CoreCivic owned and operated 23 residential reentry centers and owned 6 properties held
for lease to government agencies. Management views CoreCivic's operating results in three operating segments,
CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. CoreCivic Safety includes the operating
results of those correctional and detention facilities placed into service that were owned, or controlled via a
long-term lease, and managed by CoreCivic, as well as those correctional and detention facilities owned by a
third party and managed by CoreCivic. CoreCivic Safety also includes the operating results of TransCor
America, LLC, a subsidiary of the Company that provides transportation services to governmental
agencies. CoreCivic Community includes the operating results of those residential reentry centers placed into
service that were owned, or controlled via a long-term lease, and managed by CoreCivic. CoreCivic Community
also includes the operating results of the Company's electronic monitoring and case management services.
CoreCivic Properties includes the operating results of those properties leased to government agencies. The
operating performance of the three segments can be measured based on their net operating income. CoreCivic
defines facility net operating income as a facility's revenues less operating expenses.
F-33
The revenue and net operating income for each of the three segments and a reconciliation to CoreCivic's income
before income taxes is as follows for the three years ended December 31, 2023, 2022, and 2021 (in thousands):
Revenue:
Safety
Community
Properties
Total segment revenue
Operating expenses:
Safety
Community
Properties
Total segment operating expenses
Facility net operating income:
Safety
Community
Properties
Total facility net operating income
Other revenue (expense):
Other revenue
Other operating expense
General and administrative
Depreciation and amortization
Shareholder litigation expense
Asset impairments
Interest expense, net
Expenses associated with debt repayments
and refinancing transactions
Gain on sale of real estate assets, net
Other income (expense)
Income before income taxes
For the Years Ended December 31,
2021
2022
2023
$ 1,731,421 $ 1,684,035 $ 1,693,968
99,435
68,934
1,896,364 1,845,171 1,862,337
115,068 103,263
57,873
49,875
1,356,496 1,313,567 1,236,938
81,610
18,155
1,462,220 1,413,265 1,336,703
91,895
13,829
86,016
13,682
374,925 370,468
23,173
17,247
44,191
36,046
434,144 431,906
457,030
17,825
50,779
525,634
158
(527 )
271
(210 )
279
(362 )
(136,084 ) (127,700 ) (135,770 )
(127,316 ) (127,906 ) (134,738 )
(54,295 )
(11,378 )
(85,542 )
(1,900 )
(4,392 )
(84,974 )
—
(2,710 )
(72,960 )
(686 )
798
576
(8,077 )
87,728
986
95,823 $ 165,302 $
(56,279 )
38,766
(212 )
86,103
$
The following table summarizes capital expenditures including accrued amounts for the years ended
December 31, 2023, 2022, and 2021 (in thousands):
For the Years Ended December 31,
2021
2022
2023
$ 51,070 $ 70,399 $ 56,978
2,631
9,081
12,804
$ 67,749 $ 83,444 $ 81,494
3,138
2,324
11,217
2,362
3,560
7,123
Capital expenditures:
Safety
Community
Properties
Corporate and other
Total capital expenditures
F-34
The total assets are as follows (in thousands):
Assets:
Safety
Community
Properties
Corporate and other
Total assets
17. SUBSEQUENT EVENTS
December 31,
2023
2022
$ 2,284,243 $ 2,433,126
216,303
362,908
232,432
$ 3,105,399 $ 3,244,769
213,145
402,889
205,122
During February 2024, CoreCivic issued approximately 1.5 million RSUs to certain of CoreCivic's employees
and non-employee directors, with an aggregate value of $22.0 million. Unless earlier vested under the terms of
the RSU agreement, approximately 1.0 million RSUs with time-based vesting conditions vest in equal amounts
over three years on the later of (i) the anniversary date of the grant or (ii) the delivery of the audited financial
statements by the Company's independent registered public accounting firm for the applicable fiscal year.
Approximately 0.4 million RSUs with performance-based vesting conditions issued to officers and executive
officers are divided into one-third increments, each of which is subject to vesting based upon satisfaction of
certain annual performance criteria for the fiscal years ending December 31, 2024, 2025, and 2026, and which
can be increased or decreased based on performance relative to the annual performance criteria, and further
increased or decreased based on total shareholder return relative to a peer group. Approximately 0.1 million
RSUs issued to non-employee directors vest on the first anniversary of the award. Any RSUs that become vested
will be settled in shares of CoreCivic's common stock.
F-35
CORECIVIC, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023
(in thousands)
Initial Cost to
Company
Land
Buildings and
Improvements
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which Carried at
Close of Period
Buildings and
Leasehold
Improvements
Land and Land
Improvements
Total (A)
Accumulated
Depreciation
(B)
Date
Constructed/
Acquired
$
$
874
6,090
119,565
853
$
$
4,661
820
$
1,194
6,347
123,906
1,416
$
125,100
7,763
$
(38,202 )
(390 )
2008
2017
Description
Adams County Correctional
Center
Adams Transitional Center
Allen Gamble Correctional Center
Arapahoe Community
Treatment Center
Austin Residential Reentry
Center
Austin Transitional Center
Bent County Correctional Facility
Bridgeport Pre-Parole Transfer
Facility
CAI Boston Avenue
California City Correctional
Center
Centennial Community
Transition Center
Central Arizona Florence
Correctional Complex
Cheyenne Transitional Center
Cibola County Corrections
Center
Cimarron Correctional Facility
Coffee Correctional Facility (C)
Columbine Facility
Commerce Transitional Center
Corpus Christi Transitional
Center
Crossroads Correctional Center
Crowley County Correctional
Facility
Dahlia Facility (D)
Dallas Transitional Center
Diamondback Correctional
Facility
Eden Detention Center
Location
Adams County,
Mississippi
Denver, Colorado
Holdenville,
Oklahoma
250
66,701
48,718
Englewood, Colorado
3,760
Del Valle, Texas
Del Valle, Texas
Las Animas,
Colorado
Bridgeport, Texas
San Diego, California
California City,
California
Englewood, Colorado
Florence, Arizona
Cheyenne, Wyoming
Milan, New Mexico
Cushing, Oklahoma
Nicholls, Georgia
Denver, Colorado
Commerce City,
Colorado
Corpus Christi, Texas
Shelby, Montana
Olney Springs,
Colorado
Denver, Colorado
Hutchins, Texas
Watonga, Oklahoma
Eden, Texas
4,190
19,488
550
70
800
1,785
4,905
1,298
5,567
444
250
—
1,414
5,166
—
413
211
6,788
—
208
925
1,239
1,058
4,607
13,115
291
11,440
125,337
1,256
133,531
2,092
16,215
71,303
—
488
1,758
1,886
33,196
46,845
727
3,852
41,677
27,645
890
385
1,167
70,248
—
1,309
18,071
554
57,032
1,025
34,875
52,215
—
231
488
622
46,084
34,874
306
1,945
26,835
41,066
F-36
1,400
3,760
4,215
19,506
114,269
115,669
(49,840 )
1996
2,129
1,418
5,756
5,889
5,633
25,262
(602 )
2017
(557 )
(1,872 )
2015
2015
1,601
82,312
83,913
(35,448 )
1992
70
845
3,103
5,021
5,113
5,567
1,598
910
—
669
5,171
—
1,710
2,605
6,835
23
1,361
5,673
—
12,704
70 (E)
13,549
-
(4,777 )
1995
2013
142,090
145,193
(69,763 )
1999
1,694
6,715
(547 )
2016
186,748
3,117
49,936
122,858
—
720
191,861
8,684
(96,454 )
(1,079 )
1994/1999
2015
51,534
123,768
—
1,389 (E)
(27,025 )
(53,470 )
—
(253 )
1994
1997
1998
2016
2,241
7,412
(491 )
2017
2,508
77,983
79,325
986
5,774
67,359
63,963
2,508
79,693
81,930
7,821
5,797
68,720
69,636
(1,992 )
(47,464 )
(36,309 )
(365 )
(2,411 )
(34,956 )
(32,061 )
2015
1999
2003
2016
2015
1998
1995
CORECIVIC, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023
(in thousands)
Description
El Paso Multi-Use Facility
El Paso Transitional Center
Eloy Detention Center
Fort Worth Transitional Center
Houston Processing Center
Huerfano County Correctional
Center
James River Residential Center
Jenkins Correctional Center (C)
Kit Carson Correctional Center
La Palma Correctional Center
Lake Erie Correctional
Institution
Laredo Processing Center
Lee Adjustment Center
Leo Chesney Correctional
Center
Longmont Community
Treatment Center
Marion Adjustment Center
Midwest Regional Reception Center
Nevada Southern Detention
Center
North Fork Correctional
Facility
Northeast Ohio Correctional
Center
Northwest New Mexico
Correctional Center
Oklahoma Reentry Opportunity
Center
Otay Mesa Detention Center
Prairie Correctional Facility
Recovery Monitoring Solutions
Location
El Paso, Texas
El Paso, Texas
Eloy, Arizona
Fort Worth, Texas
Houston, Texas
Walsenburg,
Colorado
Newport News,
Virginia
Millen, Georgia
Burlington, Colorado
Eloy, Arizona
Conneaut, Ohio
Laredo, Texas
Beattyville, Kentucky
Live Oak, California
Longmont, Colorado
St Mary,
Kentucky
Leavenworth, Kansas
124
800
—
432
283
2,871
788
500
250
3,364
250
130
Pahrump, Nevada
7,548
Sayre, Oklahoma
Youngstown, Ohio
Grants, New Mexico
Oklahoma City,
Oklahoma
San Diego, California
Appleton, Minnesota
Dallas, Texas
—
750
142
8,562
28,845
100
1,152
Initial Cost to
Company
Land
14,936
10,325
498
3,251
2,250
Buildings and
Improvements
4,536
4,198
33,308
334
53,373
Cost Capitalized
Subsequent to
Acquisition
2,055
1,043
19,840
431
57,967
5,053
140
—
44,749
18,125
7,667
3,944
20,601
1,862
352
9,060
46,065
12,514
65,130
16,634
23,400
1,611
48,099
11,799
523
Gross Amount at Which Carried at
Close of Period
Buildings and
Leasehold
Improvements
6,554
5,099
51,320
735
109,039
Land and Land
Improvements
14,973
10,467
2,326
3,281
4,551
Total (A)
21,527
15,566
53,646
4,016
113,590
Accumulated
Depreciation
(B)
(2,201 )
(1,672 )
(31,312 )
(625 )
(50,513 )
Date
Constructed/
Acquired
2015
2015
1995
2015
1984
1,116
814
—
1,051
2,677
4,280
986
1,285
265
3,363
925
1,054
8,458
30,419
31,535
(17,476 )
1997
627
—
80,108
198,886
76,037
30,483
20,331
6,621
935
18,379
90,111
1,441
—
81,159
201,563
80,317
31,469
21,616
6,886
4,298
19,304
91,165
(78 )
—
(33,521 )
(67,080 )
(21,913 )
(16,287 )
(10,892 )
2019
2012
1998
2008
2011
1985
1998
(4,039 )
1989
(242 )
2016
(9,336 )
(41,429 )
1998
1992
75,966
84,424
(24,498 )
2010
717
106,579
107,296
(47,252 )
1998
2,289
1,228
8,603
37,104
1,068
1,280
54,678
56,967
(29,970 )
1997
38,202
39,430
(21,729 )
1989
6,201
154,251
33,137
2,374
14,804
191,355
34,205
3,654
(2,070 )
(24,921 )
(20,975 )
(641 )
2015
2015/2019
1991
2018
26,358
501
—
35,978
183,155
69,779
26,737
515
4,774
582
9,994
44,970
64,362
42,166
39,583
15,888
4,631
114,411
22,306
1,979
F-37
Description
Red Rock Correctional
Center (C)
Saguaro Correctional Facility
South Raleigh Reentry Center
Southeast Kentucky
Correctional Facility
Stewart Detention Center
T. Don Hutto Residential Center
Tallahatchie County
Correctional Facility
Torrance County Detention
Facility
Trousdale Turner Correctional
Center
Tulsa Transitional Center
Turley Residential Center
Webb County Detention
Center
West Tennessee Detention
Facility
Wheeler Correctional
Facility (C)
Whiteville Correctional
Facility
Totals
CORECIVIC, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023
(in thousands)
Initial Cost to
Company
Location
Land
Buildings and
Improvements
Cost Capitalized
Subsequent to
Acquisition
Gross Amount at Which Carried at
Close of Period
Buildings and
Leasehold
Improvements
Land and Land
Improvements
Total (A)
Accumulated
Depreciation
(B)
Date
Constructed/
Acquired
Eloy, Arizona
Eloy, Arizona
Raleigh, North
Carolina
Wheelwright,
Kentucky
Lumpkin, Georgia
Taylor, Texas
Tutwiler, Mississippi
Estancia, New
Mexico
Hartsville, Tennessee
Tulsa, Oklahoma
Tulsa, Oklahoma
Laredo, Texas
Mason, Tennessee
Alamo, Georgia
Whiteville,
Tennessee
—
193
277
500
143
183
—
511
649
8,206
421
498
538
—
—
98,903
663
24,487
70,560
13,418
44,638
52,599
135,412
4,061
4,105
20,161
31,931
—
—
6,736
75
20,198
23,865
13,160
109,263
14,659
6,051
731
1,203
7,023
8,585
—
—
3,040
298
2,587
1,654
982
2,373
1,994
2,004
606
432
2,330
2,174
—
—
102,792
—
105,832
—
(34,854 )
2006
2007
717
1,015
(99 )
2019
42,598
92,914
25,779
45,185
94,568
26,761
(20,701 )
(40,558 )
(10,964 )
1998
2004
1997
151,528
153,901
(68,614 )
2000
65,775
67,769
(34,359 )
1990
140,108
2,839
5,297
142,112
3,445 (E)
5,729
(23,480 )
(1,209 )
(1,789 )
2015
2015
2015
25,352
27,682
(15,469 )
1998
38,880
41,054
(22,486 )
1990
—
—
—
1998
303
166,019
$
51,694
2,083,727
$
9,619
1,084,253
$
$
1,671
220,603
$
59,945
3,102,808
61,616
$ 3,323,411
(32,999 )
$ (1,324,581 )
1998
F-38
CORECIVIC, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2023
(in thousands)
NOTES TO SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
(A) The aggregate cost of properties for federal income tax purposes is approximately $3.7 billion at December 31, 2023.
(B) Depreciation is calculated using estimated useful lives of depreciable assets up to 50 years for prison facilities.
(C) CoreCivic retains title to this asset, which is classified under other real estate assets on the Company's consolidated balance sheets in accordance with ASC
853.
(D) Held for Sale.
(E) CoreCivic recorded non-cash impairments during the third quarter of 2017 to write down the book value of the Bridgeport facility, during the second quarter
of 2020 to write down the book value of the Tulsa Transitional Center, and during the fourth quarter of 2022 to write down the book value of the Columbine
Facility to the estimated fair values assuming uses other than correctional or residential reentry facilities.
F-39
CORECIVIC, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022, AND 2021
(in thousands)
Investment in Real Estate:
Balance at beginning of period
Additions through capital expenditures
Asset impairments
Disposals/Other
Balance at end of period
Accumulated Depreciation:
Balance at beginning of period
Depreciation
Disposals/Other
Balance at end of period
$
$
$
For the Years Ended December 31,
2022
2023
2021
3,288,714 $
46,773
—
(12,076 )
3,323,411 $
3,352,942 $
41,449
(4,241 )
(101,436 )
3,288,714 $
3,595,278
27,217
(3,335 )
(266,218 )
3,352,942
(1,244,044 ) $
(82,780 )
2,243
(1,194,051 ) $
(81,937 )
31,944
(1,128,563 )
(81,693 )
16,205
(1,194,051 )
$
(1,324,581 ) $
(1,244,044 ) $
F-40
DESCRIPTION OF CAPITAL STOCK
Exhibit 4.16
CoreCivic, Inc. (“CoreCivic,” “we,” “our,” “us” or the “Company”) is incorporated in the state of
Maryland. The following description of our capital stock is a summary and does not purport to be
complete. The description of our capital stock is subject to and qualified in its entirety by reference to (i)
our Articles of Amendment and Restatement of the Company, together with our Articles of Amendment
of the Company (collectively, the “Charter”), and (ii) our Eleventh Amended and Restated Bylaws (the
“Bylaws”), which are incorporated by reference as Exhibit 3.1, Exhibit 3.2 and Exhibit 3.3, respectively,
to our Annual Report on Form 10-K for the year ended December 31, 2023. We encourage you to read
the Charter, the Bylaws and the applicable provisions of the Maryland General Corporation Law (the
“MGCL”) for additional information.
Our authorized capital stock consists of:
General
• 300,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”); and
• 50,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”).
All outstanding shares of Common Stock are fully paid and nonassessable. There are no
outstanding shares of Preferred Stock.
Description of Common Stock
Voting Rights. Each holder of our Common Stock is entitled to one vote per share of Common
Stock on all matters to be voted on by our stockholders. Notwithstanding the foregoing, holders of
Common Stock shall not be entitled to vote on any proposal to amend provisions of our Charter setting
forth the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends,
qualification, or terms or conditions of redemption of a class or series of Preferred Stock, if the proposed
amendment would not alter the contract rights of the Common Stock.
Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge,
sell all or substantially all its assets, engage in a share exchange, or convert into a different type of entity,
unless the transaction is declared advisable by the board of directors and approved by the affirmative vote
of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. A
Maryland corporation, however, may provide in its charter for approval of such matters by a lesser
percentage, but not less than a majority of the votes entitled to be cast on the matter. Our Charter provides
for approval of such matters by the affirmative vote of a majority of the votes entitled to be cast.
Special Meetings. Special meetings of stockholders may be called by our president, chairman of
the Company’s Board of Directors (the “Board”), a majority of our Board or a committee of our Board
that has been duly designated by the Board and whose powers and authority include the power to call
such meetings and must be called by our secretary on a written request of stockholders entitled to cast a
majority of the votes entitled to be cast at the meeting.
Dividends and Rights Upon Liquidation. After the provisions with respect to preferential
dividends of any class or series of Preferred Stock, if any, shall have been satisfied, then, and not
otherwise, all Common Stock will participate equally in dividends payable to holders of shares of
Common Stock when and as declared by the Board at their discretion out of funds legally available
therefor. In the event of voluntary or involuntary dissolution or liquidation of the Company, after
distribution in full of the preferential amounts, if any, to be distributed to the holders of Preferred Stock,
the holders of Common Stock shall, subject to the additional rights, if any, of the holders of Preferred
Stock, be entitled to receive all of the remaining assets of the Company, tangible and intangible, of
whatever kind available for distribution to stockholders.
Other Rights and Preferences. Holders of our Common Stock have no preemptive rights, no
cumulative voting rights and no redemption, sinking fund or conversion provisions
Maryland Business Combination Law
Under the MGCL, certain “business combinations” (including certain issuances of equity
securities) between a Maryland corporation and any person who beneficially owns ten percent or more of
the voting power of the corporation’s outstanding voting stock, or an affiliate or associate of the
corporation who beneficially owned ten percent or more of the voting power at any time within the
preceding two years, in each case referred to as an “interested stockholder,” or an affiliate thereof, are
prohibited for five years after the most recent date on which the interested stockholder becomes an
interested stockholder. These business combinations include a merger, consolidation, share exchange and,
in circumstances specified in the MGCL, an asset transfer or issuance or reclassification of equity
securities. After the five-year moratorium, any such business combination must be approved by 80% of
the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and by
two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares
held by the interested stockholder with, which, or with whose affiliate, the business combination is to be
effected or held by an affiliate or associate of the interested stockholder. The super-majority vote
requirements do not apply if, among other conditions, the corporation’s common stockholders receive a
minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in
the same form as previously paid by the interested stockholder for its shares of common stock. The
business combination provisions of the MGCL do not apply to business combinations that are approved
or exempted by the board of directors prior to the time that the interested stockholder becomes an
interested stockholder. These provisions of the MGCL may delay, defer or prevent a transaction or a
change in control of us that might involve a premium price for the Common Stock or otherwise be in the
best interests of the stockholders.
Maryland Control Share Acquisitions Law
The MGCL provides that holders of “control shares” of a Maryland corporation acquired in a
“control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of
the votes entitled to be cast on the matter, excluding shares of stock of which voting power can be
exercised or directed by the acquiror, by officers of the corporation or by employees who are directors of
the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such
shares of stock previously acquired by the acquiror or in respect of which the acquiror is able to exercise
or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within one of the following ranges of voting
power; (1) one-tenth or more but less than one-third, (2) one-third or more but less than a majority, or (3)
a majority or more of all voting power. Control shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained stockholder approval. A “control share
acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon satisfaction of
certain conditions (including an undertaking to pay expenses), may compel the board of directors of the
2
corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the
voting rights of the shares. If no request for a meeting is made, the corporation may itself present the
question at any stockholders meeting. If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the statute, then, subject to certain
conditions and limitations, the corporation may redeem any and all of the control shares (except those for
which voting rights have previously been approved) for fair value determined, without regard to the
absence of voting rights for the control shares, as of the date of the last control share acquisition by the
acquiror or of any meeting of stockholders at which the voting rights of such shares are considered and
not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror
becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise
appraisal rights, meaning that they may require the corporation to repurchase their shares for their
appraised value as determined pursuant to the MGCL. The fair value of the shares as determined for
purposes of such appraisal rights may not be less than the highest price per share paid by the acquiror in
the control share acquisition.
“Control share acquisition” does not include (1) shares acquired in a merger, consolidation or
share exchange if the corporation is a party to the transaction, or (2) acquisitions exempted by the charter
or bylaws of the corporation, adopted at any time before the acquisition of the shares.
As permitted by the MGCL, our Bylaws contain a provision exempting us from the control share
acquisition statute. That Bylaw provision states that the control share statute shall not apply to any
acquisition by any person of shares of our stock. Our Board may, without the consent of any of our
stockholders, amend or eliminate this Bylaw provision at any time, which means that we would then
become subject to the Maryland control share acquisition statute. If we become subject to the Maryland
control share acquisition statute, these provisions of the MGCL may delay, defer or prevent a transaction
or a change in control of us that might involve a premium price for the Common Stock or otherwise be in
the best interests of the stockholders, and there can be no assurance that such provision will not be
amended or eliminated by our Board at any time in the future.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities
registered under the Securities Exchange Act of 1934, as amended, and with at least three independent
directors to elect to be subject, by provision in its charter or bylaws or by a resolution of its board of
directors and notwithstanding any contrary provision in its charter or bylaws, to any or all of five
provisions:
•
•
•
•
•
a classified board,
a two-thirds vote requirement for removing a director,
a requirement that the number of directors be fixed only by vote of the directors,
a requirement that a vacancy on the board be filled only by affirmative vote of a majority of
the remaining directors in office and (if the board is classified) for the remainder of the full
term of the class of directors in which the vacancy occurred, and
a majority requirement for the calling of a stockholder-requested special meeting of
stockholders.
3
Through a provision in our Bylaws unrelated to Subtitle 8, we already provide that a special
meeting of stockholders will be called on the request of stockholders entitled to cast a majority of votes
entitled to be cast. Our Charter provides that the number of our directors shall be determined by resolution
of the Board.
A Maryland corporation may by its charter or by a resolution of its board of directors be
prohibited from electing to be subject to the provisions of Subtitle 8. We are not subject to that
prohibition. If we were to elect into any or all of these provisions of Subtitle 8 of the MGCL, it could
delay, defer or prevent a transaction or a change in control of us that might involve a premium price for
the Common Stock or otherwise be in the best interest of the stockholders.
Amendment of Organizational Documents
Except for amendments that are permitted to be made without stockholder approval, our Charter
may be amended, after approval by our Board, by the affirmative vote of a majority of the votes entitled
to be cast by stockholders on the matter. Our Bylaws may be amended in any manner not inconsistent
with the Charter by a majority vote of our directors present at a Board meeting. In addition, stockholders
may amend our Bylaws by the affirmative vote of a majority of the votes entitled to be cast by
stockholders on the matter; provided, however, that stockholders may not amend the provisions of the
Bylaws relating to indemnification of directors and officers or the limitations in the Bylaws on the
stockholders’ ability to amend the Bylaws, in either case without the approval of the Board.
Restrictions on Ownership and Transfers of Stock
Our Charter currently references certain restrictions on the ownership and transfer of our
Common Stock which, among other purposes, were intended to assist us in complying with applicable
Internal Revenue Code of 1986, as amended requirements. However, as a result of our revocation of our
real estate investment trust election, effective as January 1, 2021, the Board determined that these
restrictions are no longer applicable as of such date.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is Equiniti Trust Company, LLC.
National Securities Exchange
The Common Stock is listed on the New York Stock Exchange under the trading symbol “CXW”.
Description of Preferred Stock
We are authorized to issue 50,000,000 shares of Preferred Stock, $0.01 par value per share.
Our Charter authorizes our Board, without stockholder action, to authorize the issuance of one or
more series of Preferred Stock with such preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or other provisions as may be fixed by the Board.
Voting Rights. The holders of Preferred Stock shall have no voting rights and shall have no rights
to receive notice of any meetings, except as required by law, or as expressly provided for in our Charter.
4
Exhibit 21.1
LIST OF SUBSIDIARIES OF CORECIVIC, INC.
ACS Corrections of Texas, L.L.C., a Texas limited liability company
Avalon Corpus Christi Transitional Center, LLC, a Texas limited liability company
Avalon Correctional Services, LLC, a Nevada limited liability company
Avalon Transitional Center Dallas, LLC, a Texas limited liability company
Avalon Tulsa, L.L.C., an Oklahoma limited liability company
Carver Transitional Center, L.L.C., an Oklahoma limited liability company
CCA Health Services, LLC, a Tennessee limited liability company
CCA International, LLC, a Delaware limited liability company
CCA South Texas, LLC, a Maryland limited liability company
CCA (UK) Ltd., a United Kingdom limited company
CoreCivic, LLC, a Delaware limited liability company
CoreCivic of Kansas Holdings LLC, a Maryland limited liability company
CoreCivic of Kansas LLC, a Maryland limited liability company
CoreCivic of Tennessee, LLC, a Tennessee limited liability company
CoreCivic Western Operations, LLC, a Delaware limited liability company
Correctional Alternatives, LLC, a California limited liability company
Correctional Management, LLC, a Colorado limited liability company
EP Horizon Management, LLC, a Texas limited liability company
Fort Worth Transitional Center, L.L.C., an Oklahoma limited liability company
Green Level Realty LLC, a Colorado limited liability company
Innovative Government Solutions, LLC, a Maryland limited liability company
National Offender Management Systems, LLC, a Colorado limited liability company
Prison Realty Management, LLC, a Tennessee limited liability company
Recovery Monitoring Solutions, LLC, a Texas limited liability company
Rocky Mountain Offender Management Systems, LLC, a Colorado limited liability company
Southern Corrections Systems of Wyoming, L.L.C., an Oklahoma limited liability company
Technical and Business Institute of America, LLC, a Tennessee limited liability company
Thrivur Health, LLC, a Colorado limited liability company
Time To Change, LLC, a Colorado limited liability company
TransCor America, LLC, a Tennessee limited liability company
TransCor Puerto Rico, Inc., a Puerto Rico corporation
Turley Residential Center, L.L.C., an Oklahoma limited liability company
List of Guarantor Subsidiaries
Exhibit 22.1
The following subsidiaries of CoreCivic, Inc. (the "Issuer") are guarantors of the Issuer's (i) 8.25% Senior Notes due
2026; and (ii) 4.75% Senior Notes due 2027:
ACS Corrections of Texas, L.L.C., a Texas limited liability company
Avalon Corpus Christi Transitional Center, LLC, a Texas limited liability company
Avalon Correctional Services, LLC, a Nevada limited liability company
Avalon Transitional Center Dallas, LLC, a Texas limited liability company
Avalon Tulsa, L.L.C., an Oklahoma limited liability company
Carver Transitional Center, L.L.C., an Oklahoma limited liability company
CCA Health Services, LLC, a Tennessee limited liability company
CCA International, LLC, a Delaware limited liability company
CCA South Texas, LLC, a Maryland limited liability company
CoreCivic, LLC, a Delaware limited liability company
CoreCivic of Tennessee, LLC, a Tennessee limited liability company
CoreCivic Western Operations, LLC, a Delaware limited liability company
Correctional Alternatives, LLC, a California limited liability company
Correctional Management, LLC, a Colorado limited liability company
EP Horizon Management, LLC, a Texas limited liability company
Fort Worth Transitional Center, L.L.C., an Oklahoma limited liability company
Green Level Realty LLC, a Colorado limited liability company
Innovative Government Solutions, LLC, a Maryland limited liability company
National Offender Management Systems, LLC, a Colorado limited liability company
Prison Realty Management, LLC, a Tennessee limited liability company
Recovery Monitoring Solutions, LLC, a Texas limited liability company
Rocky Mountain Offender Management Systems, LLC, a Colorado limited liability company
Southern Corrections Systems of Wyoming, L.L.C., an Oklahoma limited liability company
Technical and Business Institute of America, LLC, a Tennessee limited liability company
Thrivur Health, LLC, a Colorado limited liability company
Time To Change, LLC, a Colorado limited liability company
TransCor America, LLC, a Tennessee limited liability company
Turley Residential Center, L.L.C., an Oklahoma limited liability company
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-8 No. 333-115493) pertaining to the CoreCivic, Inc. Non-Employee Directors’
Compensation Plan,
(2) Registration Statement (Form S-8 No. 333-69358) pertaining to the CoreCivic, Inc. 401(k) Savings and
Retirement Plan,
(3) Registration Statement (Form S-8 No. 333-264985) pertaining to the CoreCivic, Inc. Amended and Restated
2020 Stock Incentive Plan,
(4) Registration Statement (Form S-8 No. 333-238479) pertaining to the CoreCivic, Inc. 2020 Stock Incentive
Plan,
(5) Registration Statement (Form S-8 No. 333-176140) pertaining to the registration of additional shares for the
Corrections Corporation of America Amended and Restated 2008 Stock Incentive Plan,
(6) Registration Statement (Form S-8 No. 333-143046) pertaining to the Corrections Corporation of America 2008
Stock Incentive Plan, and
(7) Registration Statement (Form S-3 No. 333-255070) pertaining to a shelf registration of debt securities,
guarantees of debt securities, preferred stock, common stock, warrants, or units.
of our reports dated February 20, 2024 with respect to the consolidated financial statements and schedule of CoreCivic,
Inc. and subsidiaries and the effectiveness of internal control over financial reporting of CoreCivic, Inc. and subsidiaries,
included in this Annual Report (Form 10-K) of CoreCivic, Inc. and subsidiaries for the year ended December 31, 2023.
/s/ Ernst & Young LLP
Nashville, Tennessee
February 20, 2024
CERTIFICATION OF THE CEO PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Damon T. Hininger, certify that:
1.
I have reviewed this Annual Report on Form 10-K of CoreCivic, Inc.;
Exhibit 31.1
2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statement made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this Annual Report;
3. Based on my knowledge, the financial statements, and other financial information included in this Annual
Report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this Annual Report based on such evaluation; and
d) Disclosed in this Annual Report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over financial reporting.
Date: February 20, 2024
/s/ Damon T. Hininger
Damon T. Hininger
President and Chief Executive Officer
CERTIFICATION OF THE CFO PURSUANT TO
SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, David M. Garfinkle, certify that:
Exhibit 31.2
1.
I have reviewed this Annual Report on Form 10-K of CoreCivic, Inc.;
2. Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statement made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this Annual Report;
3. Based on my knowledge, the financial statements, and other financial information included in this Annual
Report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this Annual Report based on such evaluation; and
d) Disclosed in this Annual Report any change in the registrant's internal control over financial reporting
that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over financial reporting.
Date: February 20, 2024
/s/ David M. Garfinkle
David M. Garfinkle
Executive Vice President, Chief
Financial Officer, and Principal
Accounting Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report of CoreCivic, Inc. (the "Company") on Form 10-K for the period ending December
31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Damon T. Hininger,
President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to
§906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Damon T. Hininger
Damon T. Hininger
President and Chief Executive Officer
February 20, 2024
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report of CoreCivic, Inc. (the "Company") on Form 10-K for the period ending December
31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David M. Garfinkle,
Executive Vice President, Chief Financial Officer, and Principal Accounting Officer of the Company, certify, pursuant
to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ David M. Garfinkle
David M. Garfinkle
Executive Vice President, Chief
Financial Officer, and Principal
Accounting Officer
February 20, 2024
CoreCivic, Inc.
NYSE Executive Compensation Recoupment Policy
Exhibit 97
1.
Purpose. The purpose of this NYSE Executive Compensation Recoupment Policy of the
Company (as amended from time to time, the “Policy”), dated as of November 15, 2023, is to describe the
circumstances in which current and former Executive Officers will be required to repay or return
Erroneously Awarded Compensation to members of the Company Group. The Company has adopted this
Policy to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, as codified by Section 10D of the Exchange Act, Exchange Act Rule 10D-1 promulgated
thereunder, and the rules and requirements of the NYSE (including Section 303A.14 of the NYSE Listed
Company Manual) (such legal requirements, and rules and requirements of the NYSE, collectively, the
“SEC/NYSE Clawback Rules”). Each Executive Officer shall be required to sign and return to the
Company the form of acknowledgment to this Policy in the form attached hereto as Exhibit A pursuant to
which such Executive Officer will agree to be bound by the terms and comply with this Policy.
2.
Administration. This Policy shall be administered by the Committee. The Committee is
authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or
advisable for the administration of this Policy, and any such determinations made by the Committee shall
be in the Committee’s sole discretion, and shall be final and binding on all affected individuals. Except as
otherwise required by applicable legal requirements or the rules and requirements of the NYSE, any
determinations of the Committee hereunder need not be uniform with respect to one or more Executive
Officers (whether current and/or former).
3.
Definitions. For purposes of this Policy, the following capitalized terms shall have the
meanings set forth below:
(a)
“Accounting Restatement” shall mean an accounting restatement due to the material
noncompliance of the Company with any financial reporting requirement under the securities laws,
including any required accounting restatement (i) to correct an error in previously issued financial
statements that is material to the previously issued financial statements (a “Big R” restatement), or (ii)
that would result in a material misstatement if the error were corrected in the current period or left
uncorrected in the current period (a “little r” restatement).
(b)
“Board” shall mean the Board of Directors of the Company.
(c)
“Clawback Eligible Incentive Compensation” shall mean all Incentive-Based
Compensation Received by any current or former Executive Officer on or after the NYSE Effective Date,
provided that:
(i)
such Incentive-Based Compensation is Received after such individual began
serving as an Executive Officer;
(ii)
such individual served as an Executive Officer at any time during the
performance period for such Incentive-Based Compensation;
(iii)
such Incentive-Based Compensation is Received while the Company has a class
of securities listed on the NYSE; and
(iv)
Period.
such Incentive-Based Compensation is Received during the applicable Clawback
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(d)
“Clawback Period” shall mean, with respect to any Accounting Restatement, the three
completed fiscal years of the Company immediately preceding the Restatement Date and any transition
period (that results from a change in the Company’s fiscal year) of less than nine months within or
immediately following those three completed fiscal years.
(e)
“Committee” shall mean the Compensation Committee of the Board.
(f)
Company.
(g)
(h)
subsidiaries.
“Common Stock” shall mean the common stock, par value $.01 per share, of the
“Company” shall mean CoreCivic, Inc., a Maryland corporation.
“Company Group” shall mean the Company, together with each of its direct and indirect
(i)
“Erroneously Awarded Compensation” shall mean, with respect to any current or former
Executive Officer in connection with any Accounting Restatement, the amount of Clawback Eligible
Incentive Compensation Received by such current or former Executive Officer that exceeds the amount of
Clawback Eligible Incentive Compensation that otherwise would have been Received by such current or
former Executive Officer had such Clawback Eligible Incentive Compensation been determined based on
the restated amounts as reflected in connection with such Accounting Restatement, computed without
regard to any taxes paid.
(j)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(k)
“Executive Officer” shall mean any officer as defined in Rule 10D-1(d) (or any successor
provision thereof) under the Exchange Act.
(l)
“Financial Reporting Measures” shall mean measures that are determined and presented
in accordance with the accounting principles used in preparing the Company’s financial statements, and
any other measures that are derived wholly or in part from such measures. Financial Reporting Measures
may include “non-GAAP financial measures” as well as other measures, metrics and ratios that are not
GAAP measures. For purposes of this Policy, stock price and total shareholder return (and any measures
that are derived wholly or in part from stock price or total shareholder return) shall be considered
Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be
presented within the Company’s financial statements or included in a filing with the SEC.
(m)
“Incentive-Based Compensation” shall mean any compensation that is granted, earned or
vested (including any compensation deferred with respect thereto) based wholly or in part upon the
attainment of a Financial Reporting Measure.
(n)
(o)
“NYSE” shall mean the New York Stock Exchange.
“NYSE Effective Date” shall mean October 2, 2023 (which is the effective date of the
final NYSE listing standards).
(p)
“Received” shall mean when Incentive-Based Compensation is received, and Incentive-
Based Compensation shall be deemed received in the Company’s fiscal period during which the Financial
Reporting Measure specified in the Incentive-Based Compensation award is attained, even if payment or
grant of the Incentive-Based Compensation occurs after the end of that period.
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(q)
“Restatement Date” shall mean the earlier to occur of (i) the date the Board, a committee
of the Board or the officers of the Company authorized to take such action if Board action is not required,
concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting
Restatement, or (ii) the date a court, regulator or other legally authorized body directs the Company to
prepare an Accounting Restatement.
(r)
4.
“SEC” shall mean the U.S. Securities and Exchange Commission.
Recoupment of Erroneously Awarded Compensation.
(a)
In the event that the Company is required to prepare an Accounting Restatement, (i) the
Committee shall determine the amount of any Erroneously Awarded Compensation for each applicable
current or former Executive Officer (whether or not such individual is serving as an Executive Officer at
such time) (the “Applicable Executives”) in connection with such Accounting Restatement, and (ii) the
Company will reasonably promptly require the recoupment of such Erroneously Awarded Compensation
from any such Applicable Executive, and any such Applicable Executive shall surrender such
Erroneously Awarded Compensation to the Company, at such time(s), and via such method(s), as
determined by the Committee in accordance with the terms of this Policy.
(b)
For Incentive-Based Compensation based on (or derived from) stock price or total
shareholder return where the amount of Erroneously Awarded Compensation is not subject to
mathematical recalculation directly from the information in the applicable Accounting Restatement, (i)
such amount shall be determined by the Committee based on a reasonable estimate of the effect of the
Accounting Restatement on the stock price or total shareholder return upon which the Incentive-Based
Compensation was Received, and (ii) the Company will maintain documentation of the determination of
that reasonable estimate and provide such documentation to the NYSE.
(c)
The Committee shall determine, in its sole discretion, the method(s) for recouping any
Erroneously Awarded Compensation from any Applicable Executive, which may include one or more of
the following:
(i)
requiring one or more cash payments to the Company Group from such
Applicable Executive, including, but not limited to, the repayment of cash Incentive-Based
Compensation previously paid by the Company Group to such Applicable Executive;
(ii)
seeking recovery of any gain realized on the vesting, exercise, settlement, sale,
transfer or other disposition of any equity-based awards previously made by the Company to such
Applicable Executive and/or, subject to applicable legal requirements, otherwise requiring the
delivery to the Company of shares of Common Stock held by such Applicable Executive;
(iii)
withholding, reducing or eliminating future cash compensation (including cash
incentive payments), future equity awards and/or other benefits or amounts otherwise to be paid
or awarded by the Company Group to such Applicable Executive;
(iv)
offsetting amounts against compensation or other amounts otherwise payable by
the Company Group to any Applicable Executive, including without limitation, forfeiture of
deferred compensation, to the extent consistent with Section 409A of the Internal Revenue Code
of 1986, as amended, and the regulations thereunder;
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(v)
cancelling, adjusting or offsetting against some or all outstanding vested or
unvested cash or equity awards of the Company held by such Applicable Executive; and/or
(vi)
taking any other remedial and recovery actions with respect to such Applicable
Executive permitted by applicable legal requirements and the rules and regulations of the NYSE,
as determined by the Committee.
(d)
Notwithstanding anything herein to the contrary, the Company shall not be required to
recover Erroneously Awarded Compensation from any Applicable Executive pursuant to the terms of this
Policy if (1) the Committee determines that such recovery would be impracticable, and (2) any of the
following conditions is met:
(i)
the direct expenses paid to a third party to assist in enforcing the Policy would
exceed the amount to be recovered, provided that, before concluding that it would be
impracticable to recover any amount of Erroneously Awarded Compensation based on expense of
enforcement pursuant to this clause (i), the Company has (x) made a reasonable attempt to
recover such Erroneously Awarded Compensation, (y) documented such reasonable attempt(s) to
recover, and (z) provided such documentation to the NYSE;
(ii)
recovery would violate home country law where that law was adopted prior to
November 28, 2022, provided that, before determining that it would be impracticable to recover
any amount of Erroneously Awarded Compensation based on violation of home country law, the
Company has obtained an opinion of home country counsel, acceptable to the NYSE, that
recovery would result in such a violation, has provided copy of the opinion is provided to the
NYSE; or
(iii)
recovery would likely cause an otherwise tax-qualified retirement plan, under
which benefits are broadly available to employees of the Company Group, to fail to meet the
requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
5.
No Indemnification, Etc. The Company Group shall not (x) indemnify any current or
former Executive Officer against (i) the loss of any Erroneously Awarded Compensation that is repaid,
returned or recovered pursuant to the terms of this Policy, or (ii) any claims relating to the Company
Group’s enforcement of its rights under this Policy, or (y) pay or reimburse any current or former
Executive Officers for insurance premiums to recover losses incurred under this Policy.
6.
Supersedure. This Policy will supersede any provisions in (x) any agreement, plan or
other arrangement applicable to any member of the Company Group, and (y) any organizational
documents of any entity that is part of Company Group that, in any such case, (a) exempt any Incentive-
Based Compensation from the application of this Policy, (b) waive or otherwise prohibit or restricts the
Company Group’s right to recover any Erroneously Awarded Compensation, including, without
limitation, in connection with exercising any right of setoff as provided herein, and/or (c) require or
provide for indemnification to the extent that such indemnification is prohibited under Section 5 above.
7.
Amendment; Termination; Interpretation. The Board may amend or terminate this
Policy at any time, subject to compliance with all applicable legal requirements and the rules and
requirements of the NYSE. It is intended that this Policy be interpreted in a manner that is consistent
with the SEC/NYSE Clawback Rules. This Policy is separate from, and in addition to, the CoreCivic,
Inc. Recoupment Policy (the “Adverse Event Recoupment Policy”), which was adopted by the Company
on December 13, 2022 and is intended to provide for mandatory recoupment beyond the scope of the
SEC/NYSE Clawback Rules in certain circumstances beyond the scope of this Policy.
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8.
Other Recoupment Rights; No Additional Payments.
(a)
Subject to Section 8(b) of this Policy below, any right of recoupment under this Policy is
in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the
Company Group pursuant to (i) the Adverse Event Recoupment Policy, (ii) the terms of any recoupment
provisions in any employment agreement, incentive or equity compensation plan or award or other
agreement, (iii) any other legal requirements, including, but not limited to, Section 304 of Sarbanes-Oxley
Act of 2002, and (iv) any other legal rights or remedies available to the Company.
(b)
Notwithstanding anything herein to the contrary, to prevent duplicative recovery:
(i)
to the extent that the amount of any Erroneously Awarded Compensation is
recovered from any current or former Executive Officers under this Policy, the Company will not
be entitled to recover any such amounts under the Adverse Event Recoupment Policy; and
(ii)
to the extent that any Erroneously Awarded Compensation includes any amounts
that have been actually reimbursed to the Company Group from any Applicable Executive
pursuant to Section 304 of the Sarbanes-Oxley Act (any such amounts that have been reimbursed
to the Company Group, the “Applicable SOX Recoupment Amount”), the amount of any
Erroneously Awarded Compensation to be recovered from any such Applicable Executive shall
be reduced by the Applicable SOX Recoupment Amount.
(c)
As determined by the Committee, in its sole and absolute discretion, each Applicable
Executive shall be required to reimburse the Company for any and all fees, costs and expenses reasonably
incurred (including legal fees) by the Company in recovering Erroneously Awarded Compensation that is
the subject to recovery under this Policy.
9.
Successors. This Policy shall be binding and enforceable against all current and former
Executive Officers and, to the extent required by applicable law or guidance from the SEC or NYSE as
determined by the Committee, their beneficiaries, heirs, executors, administrators or other legal
representatives.
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Exhibit A
Form of Acknowledgment
By signing below, the undersigned acknowledges and confirms that the undersigned has received
and reviewed a copy of the CoreCivic, Inc. NYSE Executive Compensation Recoupment Policy (such
policy, as amended from time to time, the “Policy”). Capitalized terms used but not otherwise defined in
this acknowledgment shall have the meanings ascribed to such terms in the Policy.
By signing this acknowledgment, the undersigned acknowledges and agrees that the undersigned
is and will continue to be subject to the Policy and that the Policy will apply both during and after the
undersigned’s employment with the Company Group. Further, by signing below, the undersigned agrees
the terms of the Policy, including, without limitation, any withholding of, or offset against, future
compensation as determined to be appropriate by the Committee, and agrees to abide by those terms,
including without limitation, by returning any Erroneously Awarded Compensation to the Company
Group to the extent required by the Policy.
______________________________
Signature
______________________________
Print Name
______________________________
Date