Our third quarter revenue of $471.2 million represented a 1% increase over the prior year quarter despite the sale of 47 non-core real estate assets within our property segment in multiple transactions between December 2020 and June 2021 and our decision to exit two managed-only contracts with local governments in the state of Tennessee during the fourth quarter of 2020.
And in the five quarters since we announced the change in our capital allocation strategy, we have substantially improved our credit profile, reducing our net debt balance by approximately $730 million during a time of unprecedented challenges.
We remain committed to reaching and maintaining a total leverage ratio or net debt to adjusted EBITDA of 2.25 times to 2.75 times.
Using the trailing 12-months ended September 30 of 2021, our total leverage ratio was 2.7 times.
Just one year ago, our total leverage ratio was at 4.0 time.
And the last time our total leverage ratio was below 3 times was in 2012, nine years ago.
I believe this is evidenced by our recent $225 million unsecured bond issuance which price nearly a 100 basis points lower than the bonds we issued back in April of this year.
In 2009, one of my first acts as CEO was to seek authorization from our Board of Directors for an equity repurchase program.
Our Safety segment's occupancy was 73.2% in the quarter, an increase of 110 basis points compared with the prior year quarter and our Community segment's occupancy was 56.4%, up 180 basis points.
Normalized funds from operations or FFO for the third quarter was $0.48 per share, a decline of 8% compared with the third quarter of 2020.
When compared to pro forma results for the third quarter of 2020, our adjusted earnings per share, normalized FFO per share and AFFO per share increased 33%, 9% and 15% respectively.
Our adjusted EBITDA of $100.9 million increased 7% compared to the third quarter of 2020, and again, this is after the sale of 47 non-core assets since the end of the third quarter of 2020.
Across the company this year, we have provided the large -- largest wage increases in my 12 years as CEO and we are committed to utilizing all necessary resources to address this challenge.
We currently have one prison contract with the BOP, accounting for approximately 2% of our total revenue.
At the end of September 2021 our contract with the Marshals at our 600-bed West Tennessee Detention Facility expired and the federal detainee populations were transferred to alternative locations, including approximately 200 to our Tallahatchie County Correctional Facility in Mississippi.
The only remaining Marshals contract I have yet to discuss is at our 1,033 bed Leavenworth Detention Center expiring in December of 2021.
The largest driver of their lower utilization levels has been the enactment of Title 42 since March of 2020, which prevents nearly all asylum claims at the country's borders and ports of entry in order to prevent the spread of COVID-19.
Instead, Title 42 allows individuals apprehended at the Southwest border to immediately be expelled to Mexico or the individual's country of origin.
Administrative changes and court decisions have occurred since the enactment of Title 42, which have enabled unaccompanied minors and some family units to enter and remain in the United States, while their immigration cases are adjudicated.
We primarily provide ICE with detention capacity for adult populations and it is unclear when Title 42 will no longer be applied to adults.
Certain factors such as criminal histories or previous deportations may compel the government to keep individuals in custody instead of applying Title 42.
Whenever Title 42 is rescinded, we believe there will be a significant surge in the need for detention capacity.
Moving now to state and local developments and opportunities, I'll first mention our new lease agreement with the state of New Mexico for our 596 bed Northwest New Mexico Correctional Center that we announced in September.
The new lease has an initial term of three years, but includes automatic extension options that could extend the lease term through 2041.
We continue to pursue an opportunity with the state of Arizona, which adds an active procurement for up to 2,700 beds for medium and close security inmates.
Their ranking goes through a rigorous four-step process, starting with a review of the top 2,000 public companies based on revenue, then afterwards a detailed review of company ESG reports and the relevant KPIs along with a reputational survey to 7,500 U.S. resident.
Prior to co-founding CoreCivic, then known as Corrections Corporation of America, with businessman Tom Beasley in 1983, Don had a long and prestigious career in the corrections industry, including as Commissioner of Corrections for the State of Arkansas and later the Director of Corrections for the Commonwealth of Virginia.
At that time, there were over 40 states that had some level of control or oversight by the federal government due to inhumane conditions.
In the third quarter of 2021, we reported net income of $0.25 per share or $0.28 of adjusted earnings per share, $0.48 of normalized FFO per share and AFFO per share of $0.47.
Adjusted and normalized per share amounts exclude an impairment charge of $5.2 million for pre-development activities associated with the Alabama project that we are no longer pursuing, as disclosed last quarter.
For illustration purposes, in the supplemental disclosure report posted on our website, we present the calculations of adjusted net income, normalized funds from operations and AFFO for each quarter and full year of 2020 on a pro forma basis to reflect such metrics, applying an estimated effective tax rate of 27.5%.
Adjusted net income per share in the third quarter of 2021 of $0.28 compares to $0.21 on a pro forma basis, applying this estimated effective tax rate for the third quarter of 2020 while normalized FFO per share of $0.48 compares to $0.44 on a pro forma basis for the prior year quarter and AFFO per share of $0.47 compares to $0.41 on a pro forma basis for the prior year quarter.
Adjusted EBITDA, which is obviously before income taxes was $100.9 million in the third quarter of 2021 compared with $94.6 million in the prior year quarter.
The growth in adjusted EBITDA and the aforementioned per share metrics were achieved despite the sale of 47 properties since the end of the third quarter of 2020 and the execution of numerous refinancing transactions that were collectively dilutive for the quarter as we paid down low cost, short-term variable-rate bank debt with the proceeds from the property sales and issued new unsecured senior notes that have higher interest rates than the debt we repaid.
The 47 properties that we sold accounted for $7.3 million of EBITDA in the prior year quarter.
Therefore, excluding these sales, adjusted EBITDA increased $13.6 million or 16% from the prior year quarter, demonstrating strong core operating results.
Occupancy in our safety and community facilities continues to reflect the impact of COVID-19, but increased to 72.1% in the third quarter of 2021 from 70.9% in the prior year quarter, and increased from 71.6% in the second quarter of 2021.
Operating margins have trended similarly and was 27.2% in the third quarter of 2021 compared with 23.8% in the prior year quarter and 26.8% in the second quarter of 2021.
As of September 30, we had $456 million of cash on hand and $786 million of availability on our revolving credit facility, which matures in 2023.
During the third quarter of 2021, we issued an additional $225 million aggregate principal amount of 8.25% senior unsecured notes due 2026.
The issuance constituted a tack on to the original 8.25% senior notes we issued in April 2020 of $450 million aggregate principal amount.
The additional 8.25% senior notes were priced at 102.25% of their face value, resulting in an effective yield to maturity of 7.65%.
While we believe this effective yield is still high relative to the stability of our cash flows and credit ratings, it compares favorably to the issuance in April when the notes were priced at 99% of face value, resulting in an effective yield to maturity of 8.5%.
As a reminder, the net proceeds from the April issuance were used to fully repay $250 million of 5% senior unsecured notes that were scheduled to mature in 2022 and to repurchase, in privately negotiated transactions, $176 million of the $350 million outstanding principal balance of our 4.625% senior unsecured notes that are scheduled to mature in 2023.
We continue to be steadfast on our debt reduction strategy, paying down $188 million of additional debt during the third quarter alone, net of the change in cash, including the $112 million outstanding balance on our revolving credit facility which remains undrawn today.
Subsequent to quarter-end, we repaid $90 million of the outstanding balance on our Term Loan B, reducing its outstanding balance to $133.4 million.
Including the repayments of the mortgage notes associated with the aforementioned sale of non-core assets, during the nine months ended September 30th, 2021, we have reduced our total net debt balance by over $500 million and our net recourse debt balance by $334 million.
Our leverage, measured by net debt to EBITDA was 2.7 times using the trailing 12 months, down from 4 times using the trailing 12 months at the end of the third quarter of 2020 when we announced our revised capital allocation strategy and decision to revoke our election.
As Damon mentioned, the last time our leverage was below 3 times was 2012, which was the last year we operated as a taxable C Corporation prior to our conversion to a REIT in 2013.
Notably, 2012 followed an aggressive stock repurchase program in 2009 through 2011 when we repurchased over $0.5 billion of stock or equal to half our market capitalization today.
It is possible we could slip slightly above our targeted leverage ratio of 2.25 to 2.75 times in the fourth quarter, when we are scheduled to make almost $40 million of semi-annual interest payments on our unsecured notes, about $15 million in social security payments that were deferred under the CARES Act, and capital expenditures consistent with our previous guidance.
Higher demand for our detention facilities could also result from lifting Title 42 to healthcare policy causing the Southern border to remain effectively closed in an effort to prevent the spread of COVID-19.
However, the timing of when the federal government ends Title 42, which is evaluated every 60 days, is difficult to predict and therefore likely won't have a material impact in the fourth quarter.
But depending on the outcome and timing of a decision as well as the pace of utilization, we could experience a reduction in earnings in the fourth quarter of up to $0.02 per share compared with the third quarter.
Our last contract with U.S. Marshals expiring in 2021 is at our 1,033 bed Leavenworth Detention Center in Kansas, which expires in December.
During the third quarter, we responded to a request for proposal from the state of Arizona to care for up to 2,700 inmates the state plans to transfer from a facility owned and operated by the Arizona Department of Corrections, Rehabilitation and Reentry.
Compared with the third quarter, we expect higher interest expense as a result of the additional issuance at the end of September of $225 million of our 8.25% senior notes, somewhat offset by the $90 million repayment in October of our Term Loan B, which has a total effective rate of 7%.
We currently estimate our income tax expense to reflect a normalized effective tax rate of 27% to 28%, although we estimate our cash taxes to be approximately 20% for the year because of net deductions for special items.

Summary:
Our third quarter revenue of $471.2 million represented a 1% increase over the prior year quarter despite the sale of 47 non-core real estate assets within our property segment in multiple transactions between December 2020 and June 2021 and our decision to exit two managed-only contracts with local governments in the state of Tennessee during the fourth quarter of 2020.
Normalized funds from operations or FFO for the third quarter was $0.48 per share, a decline of 8% compared with the third quarter of 2020.
In the third quarter of 2021, we reported net income of $0.25 per share or $0.28 of adjusted earnings per share, $0.48 of normalized FFO per share and AFFO per share of $0.47.
Adjusted net income per share in the third quarter of 2021 of $0.28 compares to $0.21 on a pro forma basis, applying this estimated effective tax rate for the third quarter of 2020 while normalized FFO per share of $0.48 compares to $0.44 on a pro forma basis for the prior year quarter and AFFO per share of $0.47 compares to $0.41 on a pro forma basis for the prior year quarter.
During the third quarter of 2021, we issued an additional $225 million aggregate principal amount of 8.25% senior unsecured notes due 2026.