XML 26 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

PROPERTY AND EQUIPMENT | 12 Months Ended
--- | ---
Dec. 31, 2016
PROPERTY AND EQUIPMENT |
4. | PROPERTY AND EQUIPMENT
At December 31, 2016, CoreCivic owned 76 real estate properties, including 49 correctional and detention facilities, three of which CoreCivic leased to third-party operators, 25 residential reentry facilities, five of which CoreCivic leased to third-party operators, and two corporate office buildings. At December 31, 2016, CoreCivic also managed 11 correctional and detention facilities owned by governmental agencies. Property and equipment, at cost, consists of the following (in thousands):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Land and improvements |  | $ | 234,862 |  |  | $ | 207,405 |
Buildings and improvements |  |  | 3,509,825 |  |  |  | 3,443,791 |
Equipment and software |  |  | 379,811 |  |  |  | 360,168 |
Office furniture and fixtures |  |  | 35,651 |  |  |  | 35,018 |
Construction in progress |  |  | 29,831 |  |  |  | 30,401 |
|  |  | 4,189,980 |  |  |  | 4,076,783 |
Less: Accumulated depreciation |  |  | (1,352,323 | ) |  |  | (1,193,723 | )
|  | $ | 2,837,657 |  |  | $ | 2,883,060 |
Construction in progress primarily consists of correctional facilities under construction or expansion. Interest is capitalized on construction in progress and amounted to $0.6 million, $5.5 million, and $2.5 million in 2016, 2015, and 2014, respectively. Depreciation expense was $165.8 million, $151.4 million, and $114.0 million for the years ended December 31, 2016, 2015, and 2014, respectively. Eleven 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. In addition, one facility, which is also subject to a purchase option, is constructed on land that CoreCivic leases from a governmental agency under a ground lease. Under the terms of the ground lease, the facility becomes the property of the governmental agency upon expiration of the ground lease in 2017. CoreCivic depreciates this property over the shorter of the term of the applicable ground lease or the estimated useful life of the property. CoreCivic leases land and building at the Elizabeth Detention Center under operating leases that expire in June 2022. CoreCivic leased portions of the land and building of the San Diego Correctional Facility under an operating lease that expired December 31, 2015 pursuant to amended lease terms executed between CoreCivic and the County of San Diego in January 2010. During December 2013, CoreCivic elected to terminate the lease of land and building at the North Georgia Detention Center effective during the first quarter of 2014. 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 IGSA with ICE which was amended in October 2016, as further described in Note 5. However, ICE can terminate the agreement for convenience or non-appropriation of funds, without penalty, by providing CoreCivic with at least a 60-day notice. In the event CoreCivic cancels the lease with the third-party lessor prior to its expiration as a result of the termination of the IGSA by ICE for convenience, and if CoreCivic is unable to reach an agreement for the continued use of the facility within 90 days from the termination date, CoreCivic is required to pay a termination fee based on the termination date, currently equal to $10.0 million and declining to zero by October 2020. CoreCivic’s original lease agreement with the third-party lessor required CoreCivic to pay $70.0 million in September 2014, which resulted in CoreCivic being deemed the owner of the constructed assets for accounting purposes, in accordance with ASC 840-40-55, formerly Emerging Issues Task Force No. 97-10, “The Effect of Lessee Involvement in Asset Construction”. Accordingly, CoreCivic recorded an asset representing the costs incurred attributable to the building assets constructed by the third-party lessor and a related financing liability. CoreCivic is depreciating the asset over the term of the lease, as amended and extended through September 2021, and is imputing interest on the financing liability. Additionally, CoreCivic determined that the lease with the third-party lessor also included separate units of account for the land and pre-existing cottages as well as food services provided by the third-party lessor. The amount of consideration allocated to each of these separate deliverables was determined based on the relative selling price of the lessor-financing, the land lease, the lease of pre-existing cottages, and the food services. The operating lease term for the land is equivalent to the term of the lease and is recognized on a straight-line basis over the lease term. The operating lease term for the pre-existing cottages was the four-month period in which CoreCivic used the cottages for housing residents. The food services provided by the third-party lessor are recognized proportionally based on the number of beds available to ICE. The expense incurred for the leases at these four facilities, inclusive of the expenses recognized for the South Texas lease, as described above, was $103.0 million, $85.9 million, and $9.1 million for the years ended December 31, 2016, 2015, and 2014, respectively. Future minimum lease payments as of December 31, 2016 under these and other operating leases, inclusive of $242.3 million of payments expected to be made under the cancelable lease at the South Texas facility, are as follows (in thousands):
2017 |  | $ | 51,397 |
2018 |  |  | 51,413 |
2019 |  |  | 51,423 |
2020 |  |  | 51,510 |
2021 |  |  | 39,550 |
Thereafter |  |  | 290 |
In June 2013, CoreCivic entered into an Economic Development Agreement (“EDA”) with the Development Authority of Telfair County (“Telfair County”) in Telfair County, Georgia to implement a tax abatement plan related to CoreCivic’s bed expansion project at its McRae Correctional Facility. The tax abatement plan provides for 90% abatement of real property taxes in the first year, decreasing by 10% over the subsequent nine years. In June 2013, Telfair County issued bonds in a maximum principal amount of $15.0 million. According to the EDA, legal title of CoreCivic’s real property was transferred to Telfair County. Pursuant to the EDA, the bonds were issued to CoreCivic, so no cash exchanged hands. Telfair County then leased the real property back to CoreCivic. The lease payments are equal to the amount of the payments on the bonds. At any time, CoreCivic has the option to purchase the real property by paying off the bonds, plus $100. Due to the form of the transactions, CoreCivic has not recorded the bonds or the capital lease associated with the sale lease-back transaction. The original cost of CoreCivic’s property and equipment is recorded on the balance sheet and is being depreciated over its estimated useful life.

X
- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.13-14) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64862545&loc=d3e2921-110230 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6391035&loc=d3e2868-110229 + Details
Name: | us-gaap_PropertyPlantAndEquipmentDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration