CoreCivic Lease Agreements and ESG Strategy

Appropriation Process . • • • . • Overview of State of Alabama Appropriations Process The State's annual Appropriation Acts include legally adopted budgets for two budgetary fund groups, the General Fund Budget and the Education Trust Fund ADOC receives appropriations as program or block appropriations, which are not designated to specific line items or projects < < Thus, ADOC's Commissioner generally has large discretion to determine where funds will be expended Constitutional and statutory limits require the State to maintain a balanced budget The State's appropriations process does not face unusual administrative / political risks likely to disrupt appropriations; it further benefits from dedicated payment sources, recent build-up of budgetary reserves and $3.3 billion of internal liquidity support from the Alabama Trust Fund ("ATF") For FY 2020, the overall State General Fund expenditure budget was increased to $2.3 billion from $2.2 billion received in FY 2019 For FY 2020, ADOC received a budgetary increase of approximately $53 million to $540 million in General Fund appropriations, more than 10% over FY 2019 budgeted General Fund Appropriations ADOC receives annual appropriations from the State to fund its activities; rental payments, including those contemplated under the Lease Agreements, are subject to appropriation from the State Legislature; ADOC is subject to market standard 'best efforts' commitment to seek appropriations from the State Legislature Pursuant to the Lease Agreement, ADOC covenants to cause the State Legislature to appropriate amounts sufficient to make lease payments Detail Schedule of Budget and Actual Expenditures ADOC Appropriations, Non-GAAP, Budget Basis (Fiscal Year Ended September 30, 2019) General Fund Earmarked Funds Total Administration Service and Logistical Support Budget 24,976 Actual 24,971 Variance Budget Actual Variance Budget 5 24,976 Correctional Industries 25,928 14,836 11,092 25,928 Actual Variance 24,971 14,836 5 11,092 Institutional Service Corrections 461,860 443,318 18,542 54,896 31,792 23,104 516,756 475,110 41,646 Total 486,836 468,289 18,547 80,824 46,628 34,196 567,660 514,917 52,743 Source: State of Alabama, Comprehensive Annual Financial Report, Fiscal Year Ended September 30, 2019 12

View entire presentation