CXW - Earnings call transcript Q3 2018

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Operator

Good day, and welcome to the CoreCivic's Third Quarter 2018 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] At this time I would like to turn the conference over to Mr. Cameron Hopewell, Managing Director of Investor Relation. Please go ahead sir.

Cameron Hopewell

Ryan. you Thank and ladies thank for you Good gentlemen, us. joining morning, and Hininger, call Chief Chief today's on President Financial are Garfinkle, Participating David Damon and and Executive Officer. Officer;

will our today's harbor safe the Litigation to During remarks, and of statements including Securities Act. all your to call, provisions questions, Reform include Private the forward-looking pursuant answers

in Exchange Our actual variety differ quarter factors, filings, those including may earnings of X-K XX-K, our XXXX a XX-Q third and as reports. results materially or our release forms including and identified Commission trends a result Securities in and of

comparable statements You the page are A in reconciliation also GAAP release on discuss reflect call to statements cautioned CEO, President management's and most no this in the the corresponding we www.corecivic.com. undertakes Damon financial of pleasure future. Hininger. to view that and our turn revise at that our also any my With included earnings call, have measurement and data it's to the non-GAAP update will that such forward-looking in provided certain supplemental only measures. Investors over obligation or our current is company the On that, we

Damon Hininger

government morning a our diversified you in real-estate investment call is and solutions And everyone specialized for by serve to real-estate our delivering joining to good. room the Thank Cameron. We're also you, Bryan Finance, third CoreCivic Hammonds. good conference XXXX the here quarter thank today. joined Vice public in President, trust

of a history private solutions broad government in flexible XX assets a to a challenges totally with solve the in range ways. over country's real-estate XX-year tough largest feet square help XXX We of owner cost-effective delivering of lease government are in of million facilities real-estate

cash Our flow by grade a assets consistent government tenants. stream investment generate underwritten

each segments is real-estate government specialized to complementary in which tenants. We have anchored providing business of three

nearly and facilities detention XX,XXX and a design on focuses management of detention and facility capacity with includes XX Our correctional safety ownership beds. segment corrections and

Our that residential network recidivism of residential capacity community centers includes growing XX facilities segment reentry a beds. reentry America's design address and X,XXX helps with is a crisis of

property includes million our government portfolio quarter representing all Finally as leased of XX in business nearly third is a solutions segment developed quickly of we a core mission Each feet provides over of This have of of runway properties government our and meaningful that critical the real-estate in agencies of only growth. the XXX real-estate. have core X.X properties agreements missions. also diversification growing has segments in square end variety our segments active Across delivering with that our each continued a have we base. our of real-estate assets competencies significant not leverage customer but for a

execute to an our we diverse prior cash To summarize strategies from of As X.X% $XXX our briefly third from we increased on growing flows on continue stream for benefit a in financial year business each revenue to the of expect million per performance, company total quarter. segment, nearly growth a increasingly basis. quarter share

XX% revenue was CoreCivic course the a million segment to of of community properties of each XX% growth; notable was segments. growth community year-over-year is highlight important it and revenue business year-over-year revenue quarter. of million While a our most increase the properties that $XX.X and represented experienced prior-year up $XX.X from

and fell results Our year. during versus of represented first-year within X.X% prior the the quarter the normalized FFO in per $X.XX guidance increase range a share our

represented the quarter quarter EBITDA our and guidance $XX.X in adjusted a range also million year-over-year. within Our the of for increase X.X% middle the fell of third

increase seven populations Tallahatchie representing a portfolios. at decline contracts Our personnel and developments incremental and County California state contract expand describe property Dave Facility Correctional we these the Those remarks. interest expenses and were rate generate where M&A new anticipate debt our in growth contracts. to and transactions salary positive more and full-year from conclusion rising and normalized We third detail of a new Correctional overcame safety beds by CoreCivic transactions; utilization recent due partners X,XXX with XXX and expenses. to was Center benefits federal following in combination per quarter than more driven accretive Palma a growth earnings Also our financial of organic in expect approximately will incremental our XXX. projected yesterday's included La in average capacity to was existing FFO to wins a M&A expenses These guidance. in community chiefly bay in increases under environment; daily of XXXX share updated my release currently

share updated to will anticipation the modest of contract primarily existing near certain guidance materialize of higher represents our XXX cover election fourth drivers due as personnel of the normalized certain in from a detail guidance of per we utilization contracts FFO XXX to our previous could expenses to facilities adjustment Our and incur higher our guidance. in Dave in the of new in awards believe primary term. that quarter

guidance acquisitions the award. new important include Vermont we with contract given impact from our of the in announced aside impact minimal contract this year potential the does contract However, time This have new the XXXX is note it will September. to not of new contracts or

representing wins contract months and to approximately the last CoreCivic additional up beds. total XXXX XX our contracts new eight contract this safety roughly brings However, new over

meaningful Ohio we earnings We to number been year of actively and acquisition In are continue opportunities year-over-year year forecast continue fiscal to eight all our full activation attractive serve the with with business beds. next notable year, utilization to our our new the able for haven't contract of incremental targets half course with Of growth X,XXX the of Ohio partners the new ramp since growth utilized XXXX. XXXX agencies to utilization us and contribute approximately state over as the of contracts the we in Center. bed to of we can XXX are pursuing new Adjustment large see diversification. first has capacity of which existing development Lee is beds and state which Correctional CoreCivic future six growth positioned Northeast a generate government contract for of to safety, well and In representing XXX the Kentucky the XXXX a bed at completed Center

bed available. to with to be houses from Correctional Palma Enforcement X,XXX are La tenders approximately currently ICE Customs up a portion adult with Correctional new two in Customs South added out-of-state were with roughly our the state's overcrowding the States housing our housing Immigration government new additional or The expects the the each awarded at the of option more beds. Carolina Arizona and for of Vermont with the contracts approximately course each inmates safety of and The to from Each house also house X,XXX Immigration Nevada, a recently contracts with XXX States assist and United total agencies which June, detainees up federal new Wyoming, are Enforcement under new X,XXX population we're Marshals We July, capacity XXX system. in United with detainees a currently utilize for to today In County remaining corrections government. facility contract contracts California. XXX of Service of state this capacity of to contract In currently. should signed summer over a X,XXX contract. federal a we're Marshal awarded of of Facility under Tallahatchie four detainees

indicated the of an take XXXX However, that exit to reductions advantage has state business facility our system. early intensity projected model flexibility to their population the in offers due in

new CoreCivic demand been see, XXXX year has you winning for opportunities contract market. in successful been strong percentage the a As of safety high of in we have can and a

third states. diversification with EBITDA CoreCivic a includes case and a We continue additional execute M&A beds adjusted design two acquisition reentry beds facilities our expanding county Defender to grew its representing through XXX segments System; and strategy, generated accomplished of XX% through other capacity state provides in of top-line Rocky and services on correction our management additional Management of our January year-over-year governments the and non-residential in X% primarily Community four development XX of XXXX. electronic and and quarter monitoring the to our municipal, facilities non-residential alternatives reentry opportunities. business community X,XXX mountain acquisition of six residential in business

offer portfolio long-term Capitol produce in foot two square assets. and non-correctional year-over-year are revenue the to in government of largest Baltimore, in jurisdictions of CoreCivic in market. will properties complete This XXX,XXX primarily this leases with pace attractive in acquisitions Maryland, XXX,XXX acquisition portfolio candidates, January. aim that the August Center was assets Both facility we the our These have have slowed likely agencies attractive a Records of has expansion to the will two build recidivism GSA. government the lease the attractive building place administration Commerce result and growth measured reentry frame as fewer square-foot an cash due the we both suit a the of Archives late for Ohio that in foot acquisitions was the in In predictable through XX% Administration pipeline long-term combat of social service solutions of steel acquired to our warehouse security expansion flows. cycle we square residential and $X XXX,XXX providers for residential targets non-residential While purchase include properties September, million National a rehabilitation. and to continue and Dayton, leased of

competitive of legacy advantages complexity our a expertise ability not is cap of which generate approximately above this our and with quickly required complete individually accounting one expertise average internal is to close expenditures, certain comprehensive structural The property $X returns. While rate had to a our capital and generate to physical Dayton approximately we day great leverage to remediate to this acquisition simultaneously the modifications efficiently. expected represents of additional of than higher material, a transaction issue is average real-estate XX%. plant one property the After which million example for it

seeing to rates properties low-double the the government complexity. for individual we expect GSA, the accretive properties leased digits with returns cap high with encounter characteristics from the on high-single the potential always While targets federal and are that return transaction digits to don't depending rates to through we acquisition are higher the good for cap

robust We a third So accretive square-foot million excess our this year of we properties acquisition properties M&A targets expand near-term million. total CoreCivic invested additional in a with XX adding XX transactions of far, have real-estate. quarter in X.X of representing $XXX nearly pipeline to million the and ended portfolio of portfolio have properties $XXX

our EBITDA during CoreCivic XX% segment the property over period. Our adjusted generated of

bottom positive of in diversifying noted, completed and have that our business up showing As results top on are line. both financial segments the both developments our

in execute important two on market business ongoing this positive we segments confident are discussing our ability on these development to build facility developments momentum business as opportunities many before touch like new have. and new We to opportunities. upon I'd projects

progressing is Kansas, schedule. Lansing, in project development facility new on our for work site First,

as of facility and of are The development the its We replace nationally CoreCivic by serve of portfolio suit are in for a January team by our kind a this we has a Secured lease date with XXXX contribute properties the other the project our correctional and first facility Kansas completion this project our the built and and awarded will of Kansas the XXX-year-old a pleased this quarter progress partners. agreement, XX-year states. existing model $XXX will year. million first of of new constructive to expansion state

second Detention Center off kicked bed quarter. our which Mesa the is in The project California third ongoing Otay development X,XXX in

expansion as costs be Marshals expected for million our demand approximately partners and slated could For was capacity continue adding efficient so their built to existing changing facility is more or X,XXX growing which add and beds Otay incremental in XXX $XX initial to the an flows operations previous limited attention Service and beds nearly than XXX managed have detention The of Mesa to in that statement a XXX Mesa officially Marshal estimated their many bed States expansion benefit cost us United ICE's we during added excess We at is the anticipated region fourth approximately in cash be safety quarter XX% beginning incremental the is needs Greenfield bed X,XXX and capacity project of The the per our through Otay development. with to project capacity two current cost construct capacity so completed additional we savings facility allow region. capacity. at a opened which have When government XXXX Otay beds in it its XXXX, design initially of to expanded a the XXX,XXX ICE facility. our this for case development XXXX. per to approximately the revenue experienced and project beds CoreCivic in an will The to bed. facility years,

development for quickly to meet the eight of Aside also opportunities investments. have capability from without X,XXX correctional facilities idle our significant beds needs complete partner capacity detention and activated CapEx inventory representing near-term and which using to be these known projects, can we government

all the their essentially territory's Corrections initiative Rehabilitation part see of a near-term of a order for annual Rico Ireland's is crisis the a at develop housed part market and the effort of safety the to discussing island. of government implication issued of the is an savings procurement work of to to to XXXX address before continue full and operations. Governor agencies Earlier the for by level. and initial the move called an significant which We budget of to year, Department Department This CoreCivic Ireland inmates of process. of formal up million. opportunities of impacting to annual budget opportunities Corrections to off continues debt X,XXX to I'll Puerto $XX RFP budget pursue Rico larger as Puerto RFP, the the number Corrections phase of and in reduction the off state-level review Rehabilitation. an The the opportunity this Upon with federal to be reduce again RFP approximately estimates inmates Department

we believe to and We also uniquely environment. to urgent an cost compelling to savings just and programmatic believe shortly is and we Commonwealth meet believe have humane robust a for more positioned responded for We the response are the announced our provide to Commonwealth's award RFP in be need. the but not

our two are a in Marion far X,XXX to in remaining have focused of from the facilities Commonwealth capacity to We having opportunity correctional capacity in need and not next The Currently that states government needs approximately meaningful XXX secession additional the states Lee facilities Kentucky's partners of need the January. discussions ramp Correctional that beds could public alleviate Kentucky's market of believe for safety Adjustment Facility overcrowding, led to utilize overcrowding exceeds. on idle relieve bed Center process. could With returns have restart other a successful these we legislature Adjustment will in to procurement to and the beds have instances, which In are combined over X,XXX the Southeast CoreCivic that state. with capacity the a for have potential active formal with located to we the our number ongoing potential capacity discussions Kentucky many Center discussions have months. that when these XXXX additional average use XX and solutions could our materialize We discussions a estimate segment. on we

to prison as of the $XX lease to in into for investments solving correctional facility represent efficient we better In these aging sector of is help needed we Private properties, kind of rejoin their facilities auto the criminal the to Minnesota government idle we are what X,XXX opportunities three safer These solutions $XX to not replace challenges. successfully with the additional a where of people as providing continue to are space opportunities CoreCivic sector project existing have also enter infrastructure. total, facilities infrastructure infrastructure that Should to program billion moved private being We communities. be desperately are similar out-of-date collaboration under approximately the the agreement, to kind, Kansas substantial. we in and infrastructure. pursue inmates in development of their this can reentry capacity are alike justice problems billion to a half states provide prepare national know to or contemplated dozen and more lease considered accomplished be beds. that Oklahoma, looking overcrowding would build required Colorado, exploring suit estimate opportunities to for Kansas, agreements. In only to publicly other the The of development to a aged runway we solutions replacement than the and would staff make more tracking just these key CoreCivic address correctional operations we we properties Lansing, portfolio a similar and property's

place substantially to CoreCivic facilities the experienced approximate and grown we CoreCivic of Marshal to Marshal with La at States the have are Turning from daily requirements September in to XXth. level, Palma of Contracts United as available XX,XXX increase at both Service capacity already populations clearly beginning the the Marshal accommodate capacity to grow. in safety Multiple this United indicate Tallahatchie projected federal have year and an increased additional agencies XX,XXX have contracts growth. and wins which ICE States with average Marshals recent prisoner Populations

could facilities quarter three X,XXX for capacity needs in resulting La the operating rates Should contracts For quarter. nearly end across between already fully the facility if contract Palma Marshalls insufficient. ability third growth we of incremental under example; capacity be utilized September July. ICE needs, have multiple that We its bed Marshal's of a can contracts space, saw our of portfolio. with capacity the this agency in have and needs. new provide continue the increased utilization capacity our of the capacity detention ICE our through gradually have first to at also with X,XXX meaningfully agency increased with facilities detention accommodate the increased also facilities is rising the our in Should activated additional bed Tallahatchie by the to ICE was and XXXX we activate a have existing is apprehension to idle

most additional is and we DOP Federal the We year. to this first beds. Finally, Prisons announcement award was believe the federal to alleviate XIX and private for Bureau CAR an opportunity from the facilities issued an fiscal will beds from on intended utilization in that waiting to increase of the bureau's of XXXX announcement X,XXX sector operate and are an in provide come conditions of cost-effective the in half procurement overcrowded

have As total a we our contracts revenue. today two of with capacity only DOP X% correctional reminder, representing facility for

of all can developments the existing across utilization we Coupled see, time, put trajectory CFO, mostly contract the the transactions. very have have partners business grow quarter David? positive At business the As stable, to an been of Garfinkle, accretive we turn and updated next like and to to M&A I cash developments you of results on this call that have company have and the fact over third through these serve year. our utilization that our the over three we flow and with positive experienced strategies provide show segments contracts growth increased to financial new Dave the guidance. XXXX right awards, our full-year overview

Dave Garfinkle

and Thank and AFFO FFO the EBITDA total quarter range the range of $X.XX. $X.XX for in guidance $X.XX to $X.XX of our came In to morning third per a million our per compared of quarter. to to $XX.X midpoint of the at share good you normalized our guidance $X.XX we $X.XX third generated compared guidance everyone. Damon share Adjusted of

facilities that under to due ensure approximately populations for the contracts. in facility X,XXX Puerto smooth guidance, per higher facility of Rico, opportunities our was to third transition of ready line to by quarter in for aggregate than Vermont Mississippi our could to or Although be the share levels Palma utilize became Tallahatchie our retention FFO higher negatively salary two capacity our that in with forecasted at at declines retained a beds results and available potentially these We due to Arizona. were existing available in staffing utilize La staff in proposals, impacted and expenses California

experienced when negatively new efficient operating expedited, quarter, decision secure the to While is ensuring are inefficiencies for retention and this impacted of margins existing important transition staff opportunities we to during high-quality created capacity. able an and some

government Marshals when We new the following retained we accept following to in at optimistic On Vermont the our prisoners contract secured past well growth also inmates detainees quickly July care border. We win new to U.S. quickly award like We have our the on California new contract ICE utilize position at successfully XXth, did contract southwest announced reductions were award for due in contracts additional and we September facility. us facility in award at this the to to La Tallahatchie facility from June able staff populations. to despite XXX a the from demand Tallahatchie staff in for Palma available contract up have as we to remain award of Puerto retained the a where capacity our increasing as Rico increasing we about opportunities prospects.

quarter increased detainees. for central on the contract the ICE La beneficial managed year is quarter, per largest long-term doubt In per When in the third impact results with guidance. increase, U.S. Earnings compared X.X% performance with $X.X California XX.X% August in complex XXXX the Adjusted increased impacted the and on Net CoreCivic it EBITDA XXXX were XXXX, maintaining of across share our third The QX, Complex million quarter revenue the XX.X% $X.X by or prior XX financial property to quarter; from where of by to XXXX both million an income central quarterly Palma margins of most and revenue our load results improved resulting by negatively all prior addition, prior the property transitory of segments favorably or operating total QX, prior or acquisition margin million our Financial combination $X.XX. Florence from quarters quarter segment impact EBITDA and achieved three reduction increased compared year the XXrd, increased increased and of in $X.X XXXX. a the of $X.XX year prior notably levels third at at despite in FFO we segment X.X% million AFFO the business Correctional the the which care by million facility, in share with expiration the our XX%. CoreCivic for of Ohio in the $XXX.X quarter safety $XX.X only utilization by CoreCivic offenders did higher at in XXX,XXX Service increase our of a portfolio, square-foot quarter the from populations Marshal contract while positively affected new have Correctional Tallahatchie our of A SSA-Baltimore increased totaling from at June prisoners This Ohio Marshal's X.X%. and higher for the with to new to reductions awards federal XXXX. up the increase in on quarter new populations. transitory impacted third Northeast new the no at respectively. in our La by and from across in Center Arizona, $XXX.X U.S. facilities Texas ICE the million during three in began was our Arizona the resulting property. relative Palma contract July from executed and XXX revenue revenue in segment state XXXX our which staffing were by contract $X.XX in approximately contracts

inmate Although during this populations still state a the contract to transferred ramping California during X,XXX the were the of that third essentially back quarter, to at half offenders the the facility for new replaced first to XXXX. up Tallahatchie

proposition Over Vermont. new the we states we Five value capacity in with the with which state executed and months, believe contracts the safety XX with signed also to of programming segment CoreCivic afore and are including with needs. mentioned six state just for provide contracts reflects these have correctional contract capacity we our correctional Ohio new past contract we partners the

credit short-term our with our durability we XXXX million repayment were XX-year and rate of X.XX% SSA-Baltimore in XX% October that that $XXX interest million solutions net as believe with of results financial of as notes reflects the we long-term fine fixed facilities the maintained partially our resulting These years provide. partially of revolving facility our variable over over retention quality remaining. $XXX XX as assumed past also a rate by issuance expense the from funded with with the years rate We ¾ of borrowings credit X rate which facility. mortgage own services interest higher average acquisition offset contract the million with primarily X.X% under an note was from $XXX.X remaining of unsecured revolving The balance a affects that proceeds well an

including M&A we In a third five XXXX residential three acquisitions of addition party portfolio. XX non-residential reentry operated transactions tenants provides correctional alternatives end our quarter CoreCivic accretive under our in government to acquisition, third $XX.X electronic million. the of properties centers, and investments as included the properties monitoring reported management completed totaling These community that and this CoreCivic case since least company by with serves portfolio

During the portfolio XXXX, X.X% of third EBITDA our generated of portfolio community adjusted generated our our properties quarter CoreCivic XX.X%. and CoreCivic

Our was The monthly has flows cash government has the XX.X% stable grown with leased quarter portfolio very third of our during pipeline fixed CoreCivic properties properties rents. from of our platform and SSA-Baltimore, increased. brokerage network leased

XX the and property were and July acquisition archives GSA the XX% to potential are national we with The we the the from complexity to with the IRS. X% cap acquisitions portfolio rates and leased in these continue XX% achieved to on To to the we with characteristics acquisitions extent low-double September rates records completed property in to dedicated returns acquired administration evaluating the respectively. We digits cap property a for higher depending like individual on XXth, At of million these, maturities on revolving facility XXXX. September our nearly execute relying non-recourse debt no had on able $XX largely we balance will credit and accretive liquidity. debt like sheet until availability hand properties secured growth unencumbered using acquisitions to our our contingent and on identify we million of acquisitions be leaving and these cash sheet $XXX growing availability strategy our of without many and of to of corporate finance instead our balance

guaranteed developer. expenditures. the with under facility September the project The installments release, align cost of $XXX capital will XXth a has XXX% $XX with quarterly be of drawn which financed construction expenditures million, Our be for construction for includes in new the capital estimated million project forecast of a expenditure included totaled a of the disclosed will This contract $XXX Kansas. previously with our has through and XXXX incurred maximum to million is in $XX.X million press to been which Lansing remainder correctional price placement in of private the

from yesterday's As quarter estimated June inclusive Center held expected our of for XXXX. since Otay which had includes expires with also XXXX expenditures complete demand a XXth, partners extension in contract had Marshal's Mesa million ICE incurred California. press the U.S. cost in This forecast XXX capital have that in This September of currently for a including X,XXX through strategic disclosed in and of $X.X XXXX $XX bed limited remainder million expansion capacity. a Detention federal by fourth capital XXXX. facility both of the expenditure in bed under million expansion of XXXX The options $XX be we release, facility is location utilized is total to a in longstanding at both the

of a next guidance. Moving earnings to discussion our

indicated guidance FFO the has range the of release fourth is quarter XXXX press to the $X.XX for EPS fourth per to $X.XX quarter is for in the $X.XX, $X.XX a per guidance to normalized of As quarter $X.XX. guidance share and AFFO share for $X.XX fourth

$X.XX. and FFO EBITDA guidance increases adjusted At our $X.XX a per a QX XX% XXXX. AFFO X% mid-point, For rate normalized fourth is an run share per over the $X.XX in share and as a and share normalized per into $X.XX FFO the guidance is of of $X.XX. up we of of quarter guidance is XXXX share head to of Full-year EPS reflects X%, setting a to range per AFFO $X.XX to full-year, guidance range full-year attractive

assumptions for salaries available La per impact negative we XXXX. the with the prior staffing at higher higher higher which and sustainable the revenue tight facilities secure guidance Tallahatchie will largely populations be The per accretive we from U.S. about facilities ICE believe capacity Marshal's our contemplates $X.XX includes these and if Palma market continued these growth from guidance a share overcome our Vermont, including in updated was for to that of generate new utilize further in opportunities through contract and levels acquisitions results of by needed labor Our full-year will and impacted XXXX. which current growth share also and

is does announced to any difficult new of the previously those on awards guidance government not Our include new because contracts beyond actions predict. always contract timing

additional dilutive share the of on which the FFO expense real-estate a not of an EPS for non-cash and earnings AFFO depreciation FFO or penny but includes guidance Our impact for and SSA-Baltimore updated acquisition amortization because penny AFFO. is per

an were some our general populations we recently our and decline have populations California seen days uptick forecast such Although on below of the the quarter, has pace slowed. for slightly in third

a expense reflects X.X% for EBITDA quarter California fourth therefore tax guidance during you Our with our of to provides full-year quarter populations you range to our The averaged the in of adjusted our third the guidance release enables total interest effective assumptions quarter. the press rate in approximately which calculate depreciation estimate estimated income of X.X% XXXX. for and and for X,XXX fourth

We approximately revenue. expect expense to X.X% be of total G&A

review X.X%. potentially factors very a including dividend Finally, dividend levels forecasted yielding of to and deploy flows, we board opportunities investments. the into currently effecting quarter, is each the ratio, trajectory new leverage dividend attractive our cash our our our with and AFFO capital our payout

results closing February opening past February we year. in up for traditionally when comments year-end did the questions. like have back lines Damon the now will upcoming this call and announced for before any dividend projections the I We turn released to we our increases for

Damon Hininger

Dave. you, Thank

teachers, nurses, I our Before who employees moment our work we for good in Q&A, to recognize take move our care. are and chaplains, doing individuals entrusted many partners a others. and the really people government These to mothers, are great veterans want to

industry that last them come and shown in likely XX% recognized over studies care also certifications held their their they educations to more five years know here our prepares less at have prison. You are CoreCivic, to lives XX,XXX than as to by GED we back but the restart individuals further have earning

have So, lives of get to passionate people and it helping track, one back of talented that type takes a success team priority. their not this on at me on it's reentry last making Day

So, I'm you of to for and all team, honored sincerely serve the your alongside grateful to CoreCivic's I'm all efforts.

turn we'll you over So, Ryan, for now Q&A. it

Operator

Instructions] McClure [Operator first with you. like our Thank Securities. Wells will It question looks from come Fargo Kevin

Kevin McClure

said basis the the encumber taking a balance for I is things. good script that of to with on Dave, at some finance on so are correct? I couple looking a Hey, Thanks the I'm your new end that But acquisitions the of missed pocket, sheet on office if apologize question. great. capacity, Thanks, you you toward morning. of

Dave Garfinkle

XX% attractive XX% records July, archives we're finding like The XX rate. a a was cap rate. acquisitions is That portfolio was part. the And we most bought for property correct, administration yes, and national the in property that cap

to like like our extent capital, the rate. our cap the But where sheet. the mark able extent, the cap properties balance cost find buildings a continue corporate little exceed to we that these to we're identify opportunities rates So, we narrow these, I at find will think of of to outsized bit of an

Damon Hininger

in add now we two have we're efficient We've nice by to the rates. unique, this or efficiently the but potential is I quickly have we go quickly properties is expansion CapEx we cap these and review inbound by complexity, Yes. a up surprised XX% our pleasantly interest take and whatever for team, or buyer some can very type amount and do here We opportunities of it of together are, We've XX% the Ohio. in needs portfolio yesterday maybe the of it. build This kind in our the properties these been these at the when renovation that these I of look just for that improvement did with been also that real-estate mentioned the tenants. the will really for kind And have pleased and some be have one. seeing And really for these recently kind of Day said the are maybe and saw property properties Damon, transactions. Dave on for just that actually

a that I kind it some put for M&A these market surprised complete we've in this these number we've but to got think been nice transactions. can't of opportunities for So, returns pleasantly

Kevin McClure

say it. cap high how for keeping you're there's -- rates people assets bidding many would you market. fairly some properties office the as Got these And against for some of

Damon Hininger

opportunity think much I there think competition. really Yes. great is that's And is of I there That's a the that's kind question.

got expertise not got some maybe the don’t the where where just a but to real-estate but at you quickly properties pick of think at competition. looking who we we can and have talk have these and of government these just also local the some I the not any kind expertise of evaluate only the these kind return typical owners up federate both phone kind lot of level of to state relations seeing tenants. We're of deep

be on So, and these anything that? of us thoughtful add good to to that allows the to to pretty some get returns. price Have getting

Dave Garfinkle

cap cap that I buildings at mean or are as script. X%, little in What expectations say to Kevin, we XX% rates mentioned outsized guess, I and rates properties narrow between my buy and maybe extent going expect And between that that see asset But we're a out good in many find X% those. sheet. corporate cap rates majority able perhaps be those to rate, our would or of number this don’t we're the find to of to to to the evaluating XX% cap XX% around every with to we're in balance of rate, XX%, able we typically except a

Kevin McClure

preliminary guidance. it, you a willing in give to then, could maybe how But XXXX year on it's much you're too know next haven’t released view spend And acquisitions the okay. I CapEx? Got in early us and on

Dave Garfinkle

We script $XXX is the little million. $XXX about interesting right over said to a to But me what's right. of we're that think couple See, in Obviously XXXX premature -- or million. do a an his relatively Yes, evaluating the going you're pipeline, Damon bit have quickly. I expenditures. might it's kind of couple turns process on budget a pipeline guidance talk of close capital cap active to

matured seeing I go new we'd past so the pipeline. week. think ready we're for quite haven’t every actually some coming number deals that opportunity, but There's an not into acquisition online of what we expect We we'll to willing some disclose So, I and attractive We done in where as point be February. that do. haven’t there to we that in in might to something And really guidance this M&A do pipeline getting able the may be market. the it's XXXX think to be provide

Kevin McClure

the has the I any a clearly And And then talking to lame capacity. business. the need also and in bottleneck Congress? additional mean about session expect detention Congress has Got integration, of me meaningful the and Election from movement Congress way, integration Day. the side lame address to duck last that expansion of from then, Obviously kind today's it it, been next find your that caravan have traditionally been or you in anticipate Do just the a a on or the okay. one apprehensions integration? capacity Do change reluctance you to gears tension elevated, switching duck

Damon Hininger

is this Damon. Yes,

you a couple give observations. me Let of

more ICE I of back kind an needs years to notably their a months. here with one really think highlight daily XX we active just XX conversations last but conversation going almost here are It's of where make we've as with disaster or hurricane Southwest are facility. a you a think they've the border, know a always for I there also to got they're kind if they natural need what preparing

talking else system. within or So an their on border about needs we're unique constantly something southwest happening the emerging either

So after even I continuing election. that today's see

that's to duck think, I going into session. going lame the continue

is from think of on The question, the bit and needs. your funding funding a increased bottleneck potentially the I part second on little Congress kind about the of

to fiscal border, or funding discussion coming I fiscal what’s with during of the the be administration, say of and Xth. some end Senate bill there after now this increased year, about fiscal this think and next to complete add kind think I to the till and view a current House probably likely It's should the XXth on our probably full there through funding David? a good know, that probably that December expires probably calendar year, will funding is deliberation they year. that is September needed funding with bill we and year. ourself year And today As you needs there’s activity bill. chance current Anything so year, from on that for bill funding happen the into this And there this that, going pretty immigration a during is a

Dave Garfinkle

really. Not

Kevin McClure

appetite thoughts A facility guys for with your capacity, detention family then to you have you or are final Do the Has And me. content Okay. around the question changed? expand more South location? built Texas sole as detention purpose family

Damon Hininger

about operational forecasted we've to we that, that meet kind overall needs pleased that we've again, now pleased And any house that conversation they've of And so for been within on let families that very folks like think four facility we've ICE we it’s we're needs report other type this Texas think, way from the built an overarching and say if in border. kind that's South our and their for these on been I that of years, solution, office, United Let at at talk point it's facility ICE operations. potentially southwest other increased one other capacity facilities in do daily, is the a States coming solutions with today, needs. about to potentially could with of safe got humane or at if now there to the across facility that day it that It's also. been that kind me to first think got talking time, field no me you the they've Nothing the We really but really got ICE or portfolio. you are leadership it -- mission. very with expansion know within always is that also some

pleased very to I'm there an you from do potentially increased and operation add that. to that can think we happy our and equipped need we're for was [Indiscernible] you ICE him with if So well do

Dave Garfinkle

September I the off And news numbers on presumably you've family seen have are mean, the charts. the they seen apprehensions. and articles you

is at certainly demand that high facility a So this there for point.

Kevin McClure

Got time. it. Thank you for the

Dave Garfinkle

Kevin. Thanks,

Operator

Thank concludes [Operator over time. momentarily. questions there Q&A you. session are conference will at back pause this Instructions] Damon the This will I turn Hininger. more to the as We no

Damon Hininger

outlook in initial for I reporting our Ryan. year and and everyone thank to February XXXX. call Thanks look we us forward results you today's an to provide full again. joining you, to for would like on Thank

Operator

Please Ladies Thank day. have thank The a you and now joining phones your conference great and disconnect today's gentlemen, call. call concluded. you. for is

CoreCivic (CXW) 6 Nov 182018 Q3 Earnings call transcript