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$CXW, which provides various solutions to the government, said it will offer $250Bil aggregate principal amount of senior unsecured notes due 2027. The company plans to use the proceeds from the offering to repay a portion of the debt outstanding under its credit facility. The remaining amount, if any, will be used for general corporate purposes.
$CXW's BoD declared a quarterly cash dividend of $0.42 per share. The dividend is payable on Jan. 13, 2017 to shareholders of record on Jan. 3, 2017. The dividend represents a payout of about 80% of adjusted funds from operations or 75% or normalized FFO, based on 2017 financial forecast provided on Nov. 2, 2016.
$CXW expects 2017 EPS of $1.33-1.43, adjusted EPS of $1.35-1.45, FFO per share of $2.09-2.19 and normalized FFO per share of $2.11-2.21. This is based on current business conditions and reflecting the contract changes at the South Texas Family Residential Center.
$CXW now expects 2016 EPS of $1.73-1.75, adjusted EPS of $1.78-1.81, FFO per share of $2.52-2.55 and normalized FFO per share of $2.57-2.60. $CXW predicts 3Q16 EPS of $0.43-0.45, adjusted EPS of $0.47-0.48, FFO per share of $0.63-0.65 and normalized FFO per share of $0.67-0.68. This is based on current business conditions and contract changes.
$CXW announced a restructuring of its corporate operations and implementation of a cost reduction plan. $CXW expects that 50 to 55 full time positions will be eliminated as a result of the restructuring, or about 12% of corporate workforce at its headquarters. $CXW expects to report a charge in 3Q16 of about $4MM associated with restructuring.
Prison operator $CXW said it is subject to various governmental audits that ensure compliance with contracts. The company added that it is open to additional interactions and assessments of its services. "We look forward to validating the value proposition we provide," CEO Damon Hininger said in a statement.
Prison operator $CXW, which is facing the bleak situation of losing its biggest customer, the U.S. government, said it expects the government to study the utilization of the private prison sector. The Federal Bureau of Prisons had decided to reduce its reliance on private prisons based on the recommendations from the Department of Justice.
$CXW said it responded to the Federal Bureau of Prisons' decision to amend the Criminal Alien Requirement XVI solicitation by reducing the previously announced 10,800 contract beds to 3,600 contract beds. This is in response to recommendations from the Department of Justice to reduce future reliance on privately operated prison facilities.
Prison operator $CXW said Stacia Hylton, currently a Director of SPOK.INC and retired recently as Director of the US Marshals Service, has been appointed as an independent director to its BoD, increasing board count to 10, including 9 independent directors. Hylton will also be a member of the Nominating and Governance Committee.
$CXW said the reentry facility has a 112-bed capacity and is leased to Community Education Centers, Inc. under a triple net lease agreement that extends through June 2020 & includes one 5-year lease extension option. Following this acquisition, $CXW owns or controls 25 residential reentry facilities with a design capacity of 5,082 beds in 6 states.
$CXW said it closed on the acquisition of a residential reentry facility in Long Beach, California from a privately held owner for about $7.7MM, excluding transaction-related expenses. The all-cash transaction closed June 10, 2016, and the company did not assume any debt as part of the transaction.
$CXW said it entered into 4-year extension of its lease agreement for California City Correctional Center with California Department of Corrections and Rehabilitation (CDCR). The initial lease with CDCR for California City Correctional Center included 3-year base term ending on Dec. 1, 2016 and unlimited 2-year renewal upon mutual deal.
$CXW said its BoD appointed Scott Irwin to succeed Steve Groom as its EVP, General Counsel and Secretary, effective June 15, 2016. On Aug. 31, 2015, Groom informed his intent to retire as General Counsel following identification of his successor. He has agreed to remain for a 2-year period to facilitate orderly transition.