<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
-----------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _______________ to _______________
Commission File Number: 1- 14031
CORRECTIONAL PROPERTIES TRUST
(Exact name of Registrant as specified in its declaration of trust)
Maryland 65-0823232
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3300 PGA Blvd., Suite 430, Palm Beach Gardens, Florida 33410
(Address and zip code of principal executive offices)
(561) 630-6336
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year if changed since last report)
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 [X] No [ ]
7,130,000
(Outstanding shares of the issuer's common shares,
$0.001 par value per share as of May 12, 2000)
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CORRECTIONAL PROPERTIES TRUST
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
INDEX
- --------------------------------------------------------------------------------
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
a) Consolidated Balance Sheets 3
as of March 31, 2000 and December 31, 1999
b) Consolidated Statements of Income
for the three months ended March 31, 2000 and 1999 4
c) Consolidated Statements of Cash Flow
for the three months ended March 31, 2000 and 1999 5
d) Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About 10
Market Risk
PART II - OTHER INFORMATION
Item 6. Exhibits 11
SIGNATURE
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS.
CORRECTIONAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2000 AND DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
REAL ESTATE PROPERTIES, AT COST
CORRECTIONAL AND DETENTION FACILITIES $ 222,501 $ 207,189
LESS - ACCUMULATED DEPRECIATION (8,105) (6,774)
--------- ---------
NET REAL ESTATE PROPERTIES 214,396 200,415
CASH AND CASH EQUIVALENTS 83 121
DEFERRED FINANCING COSTS 1,544 1,654
OTHER ASSETS 1,507 1,358
--------- ---------
TOTAL ASSETS $ 217,530 203,548
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 1,574 1,899
DEFERRED REVENUE 1,830 1,689
REVOLVING LINE OF CREDIT 83,700 69,200
--------- ---------
TOTAL LIABILITIES 87,104 72,788
--------- ---------
SHAREHOLDERS' EQUITY
PREFERRED SHARES, $.001 PAR VALUE;
50,000,000 SHARES AUTHORIZED;
NONE OUTSTANDING -- --
COMMON SHARES, $.001 PAR VALUE;
150,000,000 SHARES AUTHORIZED;
7,130,000 ISSUED AND OUTSTANDING 7 7
CAPITAL IN EXCESS OF PAR VALUE 131,149 131,112
BALANCE OF UNDISTRIBUTED INCOME (730) (359)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 130,426 130,760
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 217,530 $ 203,548
========= =========
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
<PAGE> 4
CORRECTIONAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2000 and 1999
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
-------- ---------
(Unaudited)
<S> <C> <C>
REVENUES
RENTAL $ 5,647 $ 4,861
INTEREST 2 11
------- -------
5,649 4,872
------- -------
EXPENSES
DEPRECIATION 1,331 1,168
GENERAL AND ADMINISTRATIVE 357 370
INTEREST 1,730 1,122
------- -------
3,418 2,660
------- -------
NET INCOME $ 2,231 $ 2,212
======= =======
NET INCOME PER COMMON SHARE
BASIC $ 0.31 $ 0.31
======= =======
DILUTED $ 0.31 $ 0.31
======= =======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC 7,130 7,130
======= =======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, DILUTED 7,130 7,130
======= =======
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
<PAGE> 5
CORRECTIONAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
--------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 2,231 $ 2,212
ADJUSTMENTS TO NET INCOME:
DEPRECIATION OF REAL ESTATE ASSETS 1,331 1,168
OTHER AMORTIZATION 147 168
CHANGES IN ASSETS AND LIABILITIES:
OTHER ASSETS (149) (185)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (325) 345
DEFERRED REVENUE 141 524
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,376 4,232
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITION OF REAL ESTATE INVESTMENTS (15,312) (66,102)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (15,312) (66,102)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
DIVIDENDS PAID (2,602) (2,496)
BORROWINGS UNDER LINE OF CREDIT 14,500 64,000
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,898 61,504
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (38) (366)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 121 2,325
-------- --------
CASH AND CASH EQUIVALENTS, END OF QUARTER $ 83 $ 1,959
======== ========
CASH PAID FOR INTEREST $ 1,368 $ 811
======== ========
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ARE AN INTEGRAL PART OF THESE STATEMENTS.
5
<PAGE> 6
CORRECTIONAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
1. GENERAL
The consolidated financial statements of the Company include all the accounts of
the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.
The accompanying interim consolidated financial statements are unaudited.
However, the financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in conjunction with the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the disclosures required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting solely of normal
recurring matters) necessary for a fair presentation of the financial statements
for this interim period have been included. The results of operations for the
interim period are not necessarily indicative of the results to be obtained for
the full fiscal year. These financial statements should be read in conjunction
with the prospectus filed as a part of the Company's Registration Statement
filed on Form S-11 pursuant to Rule 424 (b) of the Securities Act of 1933
(Commission File No. 333-46681) (the "Prospectus"), and the pro forma financial
statements and notes thereto included therein and the Company's Form 10-K for
the year ended December 31, 1999 filed with the Securities and Exchange
Commission.
2. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or a liability measured at its fair value. SFAS
133 requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. In June 1999, the
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities
- -- Deferral of the effective date of SFAS 133." SFAS 137 deferred the effective
date of SFAS 133 to fiscal years beginning after June 15, 2000. Management
believes the impact of adopting this statement will not have a material impact
upon the Company's results of operations or financial position.
3. ACQUISITIONS
On January 7, 2000 the Company purchased the Jena Juvenile Justice Center (the
"Jena Facility") from Wackenhut Corrections Corporation ("WCC") for
approximately $15,300,000 using funds available under a $100 million secured
line of credit (the "Bank Credit Facility"). WCC will leaseback the newly
constructed 276-bed facility located in Jena, Louisiana at an initial cap rate
of 11% with 4% annual escalators for an initial term of ten years, with three
additional renewal options for terms of five years each in length. The lease
provides for fixed rental payments to the Company without regard for occupancy.
The purchase price of the Jena Facility consisted of WCC's estimated total
project costs.
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4. BANK CREDIT FACILITY
The Company has a $100 million secured line of credit that may be used to
finance the acquisition of additional correctional and detention facilities from
WCC and others, to expand the Facilities and for general working capital
requirements. The Company's ability to borrow under the Bank Credit Facility is
subject to the Company's ongoing compliance with several covenants including a
cash flow covenant restricting collateralized borrowings to four times Adjusted
EBITDA. However, the Company has the ability under certain circumstances to do
additional non-recourse borrowings through subsidiaries as discussed in the
Credit Agreement. Additionally, the Bank Credit Facility is secured by all of
the Company's facilities at December 31, 1999. In total, the Company had the
ability to borrow on its Bank Credit Facility approximately an additional $1
million at March 31, 2000.
As of March 31, 2000, $83,700,000 had been drawn on the Bank Credit Facility at
a an average rate of 7.6% based upon LIBOR plus an applicable margin through
April 28, 2000. No Indebtedness greater than 30 days in duration existed as of
March 31, 2000.
5. EARNINGS PER SHARE
The following data show the amounts used in computing earnings per share and the
effects on income and the weighted-average number of shares of potential
dilutive common stock (in thousands, except share data):
<TABLE>
<CAPTION>
For the Three Months Ended For the Three Months Ended
March 31, 2000 March 31, 1999
--------------------------- ---------------------------
<S> <C> <C>
EPS
Net income $ 2,231 $ 2,212
------- -------
Weighted average shares - basic 7,130 7,130
------- -------
Per share - Basic $ 0.31 $ 0.31
======= =======
Effect of dilutive stock options 0 0
------- -------
Weighted average shares - diluted 7,130 7,130
------- -------
Per share - Diluted $ 0.31 $ 0.31
======= =======
</TABLE>
In conjunction with the Company's initial public offering ("IPO") the Company
granted options with respect to an aggregate of 590,000 common shares to
officers, employees and trustees. The exercise price of such options is the IPO
price of $20 with a ten-year term from date of grant. In general, options
granted to executive officers and employees vested immediately as to one-forth
of the aggregate of 565,000 shares and vested as to an additional one-fourth on
the first and second anniversary of grant with the remaining one-fourth vesting
on the third anniversary of the date of grant. Options with respect to an
aggregate of 25,000 shares granted to the non-employee trustees vested in full
at the date of grant. In addition, the value of an aggregate of 240,000 shares
of options granted to non-employees is being charged to compensation expense
over the life of the options.
On January 21, 1999 the Company granted options with respect to an aggregate of
51,000 shares to officers and employees and an aggregate of 10,000 shares to
non-employee trustees. Such options were granted at an exercise price of $17.31
per share.
On April 25, 2000 the Company granted options with respect to 96,000 shares to
officers and employees and 10,000 shares to nonemployee trustees at an exercise
price of $11.19 per share.
None of these options were included in the computation of diluted EPS because
their effect would be anti-dilutive. All options expire in either the years
2008, 2009 or 2010 and were still outstanding at March 31, 2000. All options
were granted at the fair market value at the date of grant.
7
<PAGE> 8
6. SUBSEQUENT EVENT
On April 25, 2000, the Board of Trustees declared a distribution of $0.365 per
share for the quarter ended March 31, 2000, to shareholders of record on May 9,
2000. The distribution will be paid on May 23, 2000 and represents a
distribution for the period from January 1, 2000 through March 31, 2000.
ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FINANCIAL CONDITION
The following discussion should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this report.
FORWARD-LOOKING STATEMENTS: The management's discussion and analysis of
financial condition and results of operations contain forward-looking statements
that are based on current expectations, estimates and projections about the
business marketplace in which Correctional Properties Trust (the "Company")
operates. This section of the quarterly report also includes management's
beliefs and assumptions. Words such as "expects", "anticipates", "intends",
"plans", "believes", "seeks", "estimates", and variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions ("Future Factors") which are difficult to
predict. Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements. The Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Future Factors include increasing price and product/service competition by
foreign and domestic competitors, including new entrants in the marketplace; the
mix of possible future tenants as it relates to other private operators and
governmental entities; governmental and public policy changes; reliance on a
single tenant for revenue; interest rate risk; continued availability of
financing at rates less than tenant lease rates; rental rates sufficient to make
acquisitions feasible; continued ability to pay a dividend; reliance upon a
single property type for the company's development or acquisitions; and
financial instruments and financial resources in the amounts, at the times and
on the terms required to support the company's future business. In addition,
such statements could be affected by general industry and market conditions and
growth rates, general domestic and international economic conditions including
interest rate fluctuations and other future factors. The Company discusses such
risks in the Company's various reports filed with the Securities and Exchange
Commission.
OVERVIEW
The Company was formed in February 1998 as a Maryland real estate investment
trust to capitalize on the growing trend toward privatization in the corrections
industry by acquiring correctional and detention facilities from both private
prison operators and governmental entities and to lease such facilities to
experienced correctional and detention facility operators under long-term,
noncancelable, triple-net leases (leases where the tenant is required to pay all
operating expenses, taxes, insurance, structural and nonstructural repairs and
other costs). On April 28, 1998, the Company completed its IPO of 6,200,000
common shares of beneficial interest. Subsequently, on May 13, 1998 the
underwriters involved in the IPO exercised their over-allotment option for an
additional 930,000 shares resulting in a total of 7,130,000 shares of beneficial
interest outstanding. The 7,130,00 common shares were issued at an IPO price of
$20.00 generating gross proceeds of $142,600,000. The aggregate proceeds to the
Company, net of underwriters' discount of $9,982,000 and offering costs of
$1,892,000 were approximately $130,726,000.
The principal business strategy of the Company is to acquire correctional and
detention facilities that meet the Company's investment criteria. The Company
may at some point in the future acquire facilities from private prison managers
and government entities, expand its existing facilities, and lease all such
facilities under long-term leases to qualified third-party operators. The
Company's facilities are privately-managed facilities that are operated by
Wackenhut Corrections Corporation.
Substantially all of the Company's revenues are derived from: (i) rents received
under triple net leases of correctional and detention facilities; and (ii)
interest earned from the temporary investment of funds in short-term
investments.
The Company incurs operating and administrative expenses including compensation
expense for its executive officers and other employees, office rental and
related occupancy costs, and various expenses incurred in the process of
acquiring additional properties. The Company is self-administered and managed by
its executive officers and staff, and does not engage a separate advisor or pay
8
<PAGE> 9
an advisory fee for administrative or investment services, although the Company
does engage legal, accounting, tax and financial advisors from time to time. The
primary non-cash expense of the Company is depreciation of its correctional and
detention facilities.
The Company has leveraged and anticipates having to continue to leverage its
portfolio of real estate equity investments. As such the Company expects to
continue to incur short-term indebtedness, and related interest expense.
The Company intends to make distributions to its shareholders in amounts not
less than the amounts required to maintain REIT status under the Internal
Revenue Service Code.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 vs. THREE MONTHS ENDED MARCH 31, 1999
For the period from January 1, 2000 to March 31, 2000, rental revenues of $5.6
million were generated from the leaseback to WCC of eleven correctional and
detention facilities (eight purchased April 28, 1998 with proceeds of the IPO,
two additional facilities purchased January 15, 1999 and one facility
purchased January 7, 2000). This is a 16% percent increase from the $4.8
million in revenue for the three months ended March 31, 1999. The increase
resulted primarily from revenue associated with the Jena Facility purchased on
January 7, 2000 for approximately $15,300,000.
Interest income of $2,000 was earned during the quarter by investing in
short-term instruments bearing interest at approximately 5%. This decrease from
$11,000 for the three months ended March 31, 1999 was due to less cash on hand
after the purchase of the Jena Facility. Depreciation of eleven real estate
properties totaled approximately $1.3 million for the quarter ended March 31,
2000.
Depreciation associated with the Jena Facility resulted in a 14% increase in
depreciation from $1.2 million for the three months ended March 31, 1999.
General and administrative expenses incurred during the quarter ended March 31,
2000 were approximately $357,000, or 6% of lease revenues. These expenses
consisted primarily of management salaries and benefits, accounting, legal and
other administrative costs. Decreases in legal and other administrative costs
caused a 4% decrease in general and administrative expenses from $370,000 for
the three months ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company expects to meet its short-term liquidity requirements generally
through its initial working capital and net cash provided by operations. The
Company believes that its net cash provided by operations may be sufficient to
allow the Company to make distributions necessary to enable the Company to
qualify as a REIT. All facilities owned by the Company are leased under triple
net leases, which require the lessee to pay substantially all expenses
associated with the operation of such facilities. As a result of these
arrangements, the Company does not believe it will be responsible for any major
expenses in connection with the facilities during the terms of the Leases.
The Bank Credit Facility will enable the Company to borrow generally at floating
rates between 125 to 200 basis point spread over LIBOR. The Company's ability to
borrow under the secured line of credit is subject to the Company's compliance
with a number of covenants.
During the three months ended March 31, 2000 the Company made additional
borrowings of $14,500,000 under the Bank Credit Facility to finance the
acquisition of the Jena Facility. As of March 31, 2000, $83,700,000 had been
drawn on the Bank Credit Facility.
The Company has no commitments with respect to other capital expenditures. The
Company has an option to acquire, at a price of up to 105% of cost, and lease
back to WCC, any correctional or detention facility acquired or developed and
owned by WCC.
The Company expects to meet its long-term liquidity requirements for the funding
of real estate property development and acquisitions by borrowing under the Bank
Credit Facility and by issuing equity or debt securities in public or private
transactions. The Company anticipates that it will be able to obtain financing
for its long-term capital needs. However, there can be no assurance that such
additional financing or capital will be available on terms acceptable to the
Company. Even if capital is available at terms acceptable to the Company there
can be no assurance that the Company will reach agreement with its tenant as to
appropriate lease rates. The Company may, under certain circumstances, borrow
additional amounts in connection with the renovation or expansion of facilities,
the acquisition of additional properties, or as necessary, to meet certain
distribution requirements imposed on REITs under the Code.
9
<PAGE> 10
FUNDS FROM OPERATIONS
Management believes Funds from Operations ("FFO") is helpful to investors as a
measure of the performance of an equity REIT. Along with cash flows from
operating activities, financing activities and investing activities, FFO
provides investors with an understanding of the ability of the Company to incur
and service debt and make capital expenditures.
The Company computes Funds from Operations in accordance with standards
established by the White Paper on Funds from Operations approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") in 1995, which may differ from the methodology for calculating Funds
from Operations utilized by other equity REITs, and accordingly, may not be
comparable to such other REITs. The White Paper defines FFO as net income
(loss), computed in accordance with generally accepted accounting principles
("GAAP"), excluding gains (or losses) from debt restructuring and sales of
property, plus real estate related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures. Further, Funds
from Operations does not represent amounts available for management's
discretionary use because of needed capital replacement or expansion, debt
service obligations, or other commitments and uncertainties.
FFO should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of the Company's financial performance or
to cash flows from operating activities (determined in accordance with GAAP) as
a measure of the Company's liquidity, nor is it indicative of funds available to
fund the Company's cash needs, including its ability to make distributions.
The Company believes that in order to facilitate a clear understanding of the
consolidated operating results of the company, funds from operations should be
examined in conjunction with net income as presented in the consolidated
financial statements.
The following table presents the Company's Funds from Operations for the period
from January 1, 2000 to March 31, 2000 and January 1, 1999 to March 31, 1999:
January 1 to March 30
-----------------------
2000 1999
------- -------
Net Income $ 2,231 $ 2,212
Plus real estate depreciation 1,331 1,168
------- -------
Funds from Operations $ 3,562 $ 3,380
======= =======
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is exposed to market risks inherent in the Company's financial
instruments. These instruments arise from transactions entered into in the
normal course of business and relate to the Company's acquisitions of
correctional and detention facilities. The Company is subject to interest rate
risk on its existing Bank Credit Facility and any future financing requirements.
As of March 31, 2000, $83,700,000 had been drawn on the Bank Credit Facility at
an average rate of 7.6% based upon LIBOR plus an applicable margin through April
28, 2000. No Indebtedness greater than 30 days in duration existed as of
March 31, 2000.
The Company's primary marker risk exposure relates to (i) the interest rate risk
on short-term borrowings, (ii) its ability to refinance its Bank Credit Facility
at maturity at market rates, (iii) the impact of interest rate movements on its
ability to obtain adequate financing to fund future acquisitions. While the
Company can not predict or manage its ability to refinance existing debt or the
impact interest rate movements will have on its existing debt, management
advises the Board of Trustees as to the Company's financial position on an
ongoing basis and may in the future seek to minimize interest rate exposure.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the Company's business results in claims or litigation against the
Company for damages arising from the conduct of its employees or others.
Except for routine litigation incidental to the business of the Company, there
are no pending material legal proceedings to which the Company or any of its
subsidiaries is a party or to which any of their property is subject. The
Company believes that the outcome of the proceedings to which it is currently a
party will not have a material adverse effect upon its operations or financial
condition. WCC indemnifies the Company for incidents that arise from operation
of the facilities.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 25, 2000, the Company elected George R. Wackenhut, Anthony P.
Travisono, and Clarence E. Anthony, to a three-year term as Trustees until the
2003 Annual Meeting and until their successors have been duly elected and
qualified.
In addition, on April 25, 2000, the Company's shareholders ratified the actions
of the Board of Trustees in appointing the firm of Arthur Andersen LLP to be
independent certified public accountants for the fiscal year 2000, and in
approving and adopting the Correctional Properties Trust 2000 Stock Option Plan.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - 27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K - The Company did not file a Form 8-K during the
quarter ending March 31, 2000.
11
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CORRECTIONAL PROPERTIES TRUST
/s/ Patrick T. Hogan
- ----------------------------------------
Patrick T. Hogan
Vice President, Chief Financial Officer,
Secretary & Treasurer
(Principal Financial Officer &
Principal Accounting Officer)
Date: May 12, 2000
EXHIBIT INDEX
27 Financial Data Schedule (for SEC use only)
THIS DOCUMENT CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CORRECTIONAL PROPERTIES TRUST FOR THE PERIOD ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH DISCUSSION AND ANALYSIS PROVIDED WITHIN THE
FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2000.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 83
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 83
<PP&E> 222,501
<DEPRECIATION> (8,105)
<TOTAL-ASSETS> 217,530
<CURRENT-LIABILITIES> 3,404
<BONDS> 83,700
0
0
<COMMON> 7
<OTHER-SE> 130,419
<TOTAL-LIABILITY-AND-EQUITY> 217,530
<SALES> 5,647
<TOTAL-REVENUES> 5,649
<CGS> 0
<TOTAL-COSTS> 357
<OTHER-EXPENSES> 1,331
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,730
<INCOME-PRETAX> 2,231
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,231
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,231
<EPS-BASIC> .31
<EPS-DILUTED> .31
</TABLE>
