CXW - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Olivia, and I will be your conference operator.

As a reminder, this call is being recorded. At this time, I'd like to welcome you to CoreCivic's Third Quarter 2020 Earnings Conference Call. [Operator Instructions]. you. Thank like Director call of now Hopewell, to turn Managing CoreCivic's Investor to would over the Cameron I Relations. Mr. Hopewell, you conference. may begin your

Cameron Hopewell

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

Finance, joined also room are Hammonds. in We by our Brian the here Vice President of

of we for updates today, call will evolving overview the and quarter, the our results focus the On financial of business third general an COVID-XX the impacts on pandemic.

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

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

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

Damon Hininger

our of third update you opportunities capital-allocation is awards recent a the you the some strategy, Today, about in with additional made have third close current We'll real you potential update update Good for you sale initiative at quarter quarter conference elections. progress recidivism first for updated recent Thank our expansion financial we with for on property of contract call. in our brief to morning, overview performance, aimed you, on outlook joining our thank you market. and of provide and the we our our provide the an will our and of also our today Cameron. and XXXX with everyone, on non-Correctional priority segment environment, of provide reducing policy multiyear evaluation assets reducing and political certain debt, which comments estate us

third First, quarter COVID-XX. remains touch financial albeit which our strong, I'll on impacted performance, briefly by

$XXX also their lowest of was closure CoreCivic share our the in CoreCivic this Customs due but in of from sentences. over in COVID-XX quarter. FFO year pandemic the to On been of XXXX per the top residents the lower share revenue our down million, segment funds our Safety experienced prior and largest as our decline prior the from normalized $X.XX FFO, operations, the to line, to closest third our was decline Community is was the government end the revenue has of risk those segment, release majority A sought have their COVID-XX been X.X% our or impacted partners due a in third quarter which quarter. $X.XX Immigration quarter, The per Southwest in government utilization or impact Normalized primarily levels on largest and and year Enforcement, the to border. nation's partner, has from

of June in utilization of utilization experienced slowed comparing pace under XXXX. of third somewhat levels substantially While XXXX from declining quarter rate ICE compared year. March XXXX QX high the circumstances the be last with the quarter we because third ICE historically of of reached distorted well was historic the The current in reduction levels by to averages, already utilization any below going are ICE to period same through

of begin following resulting about my reduced ramping, new financial we Dave they will results a portion third quarter that multiple remainder our comments. awarded help as ICE contracts the greater from provide with In you the utilization quarter of details third were during COVID-XX. offset addition, will

new with you States at Oklahoma. with first Service United the Marshals The contract is we discuss facility like I to awarded our Cimarron the that third during quarter would

second As you constraints were the our quarter of year, significant to following to may idle with this remember, State announced facility as to they of sought Oklahoma facing. during navigate intention they the we negotiations them the budget assist

facility apparent to the in provides is or facility. For high-security in to State Cimarron hub Prisoner United end the and transportation August, the their System, in located services City. the JPATS transportation for decade, the close it from and We Oklahoma the of Transportation In Federal that partners Bureau departure Justice meet By the needs could meet The the need proximity through JPATS, capacity, for Alien over buses. the of X,XXX-bed facility began Oklahoma and air operational Immigration City. and of is cars, served reaching a Prisons, of vans of network United Oklahoma particular, in out aircraft, correctional who the center region. also a completed Marshals located Enforcement potentially States to their facility capacity. the and fleets was JPATS the Marshals needed to Customs Oklahoma for quickly medium- Service States

come. to facilitate has to the the September on many transportation agency's new for to available expect facility agency capacity. commenced ample Cimarron up will the We provide taken serve The contract and needs quickly XX, years capacity

As Ms. X, with earnings attractive the our facility. we an the we contract to new contract. cared Detainees believe U.S. previous -- We XXX at of compared upside provides Cimarron November carry the for

operating million. the average facility's the loss For the COVID-XX, the segment. margins before XXXX, months the of impacts operating were X September below $X.X historic incurred margins XX, safety of the ended Even facility Cimarron of an

increases as utilization to an of from extent Complex the In Arizona Central a percentage at with result current operating Subject Facility. to safety revenues with $XX margin levels operating may we annual that up the Correctional utilization inmates expect new terms of mill X,XXX-bed and facility contract. August, income of to current care a CoreCivic under net Saguaro approximates improvement new adult with contract upside at million in to contract, the Florence X,XXX operating into We average entered levels. our approximately increasing Correctional further utilize Idaho X,XXX-bed an availability, the we our for the to Correction Department margin

be contract. to the working the pleased solutions, gradually once Idaho are increase expect We of will State again state the we with to utilization provide of and

However, the period. COVID-XX intake pandemic may slow the

new As of September in highlight our XXX-bed Confinement Tulsa Idaho cared in I Federal of X, of Saguaro Services Turley increased City. The was which Oklahoma XXXX. Prison at and awarded Center utilization in inmates of Residential will XXX result we final November Oklahoma, is Center Home in award award our with The Opportunity and facility. Bureau the XXX-bed contract the Oklahoma at Reentry contract in for will reactivation for Reentry

As these extent X,XXX of sentences. previously, pandemic new of residents existing utilization incremental the the on impacted reentry will place I State mentioned The lower have beds. federal potential for their the in the because of risk approximately are and tail with to the a represent new contracts has contracts residential we are greater populations end X Oklahoma. supplement contract These

Alabama far starting every we infrastructure To a program, lease build market next X correctional outdated procurement their path similar September, facility, remain was of has will a CoreCivic to critical close that to of We facilities CoreCivic a to believe new additional state, pursuing of but actively State come teams not with lease because address process. is the build be selected but the with similar phase opportunities continue segment. The new facilities. these a negotiations completed in [indiscernible] opportunities design of engaged needs. has that negotiations XXXX. which facilities governments reduce modern, to developer help would X,XXX space of to State Modern the merely Nebraska private with theory, the sure is to In type The Alabama a operate, infrastructure governor's French Retrofitting the anticipate approximately make significant clear, will also facility. inmates represent the before is offer Prison's as provides intent enter announcement the partner We pursuing facilities in be retrofitted and state would of state's to useful as for to process the to be facilities to X the and be being end has and nearly life. programming X sector cannot state construct operational definitive to was a opportunities large-scale facilities, continued are its they for the it long to to portion constructed. in this not evaluated first portion, market contract office enter will XX RFP are facilities. significant challenges lease to reached for announced negotiations modernize a of under The including the its that an savings system to they governor's and use typically that fall I'm in successful. provide older combination nimby facilities, of approximately into cost our the efficient prison modern, intention options the successful more because, negotiations. old one Property the which reentry award, opportunity into of beds due We the new their for

quickly. today to cuts, facilities facilities, to improvements available illnesses. off system is design spread more Efficient budget medical forcing ability be to to coupled limited the to the airborne government efficient. with prevent cause This become the challenges particularly the agencies of responding older housing areas, the pretty efficiency high However, typically and is cost, operational relevant with of systems table threat have included limitation the it the Also retrofitting, today taken centralized presented key. HVAC COVID-XX the limited pandemic, hampering concentrated is for relevant

have the conference in run, system, on COVID-XX the Staying will be last our government like expect evolving with I'd subsides. to modernizing topic long COVID-XX, quarter with especially the operational our to we the provide calls, in on by ongoing pandemic of you similar correctional there greater first few interest to after We of brief Since the respond year, our update collaborating COVID-XX. created response. to a partners challenges been the

operational the been changes. times, guidelines plans evolved responsive and the to have CDC so Our these operations from guidelines organization, health have follow our multiple experts leading Health by and these World

cases This decline we the second during in During from the has experienced the third in our across quarter. facilities. cases steady trend been we peak consistent quarter, positive a saw

cases remained consistent. protocols are or addressing for procedures cases Our has and positive suspected

cleaning We with reduce to have the chain our continue disruptions products of risk spread other supply coordination manage to inmate not visitation PPE, products used government facilities in And our interactions in of other our partners, exposure. and COVID-XX. in-person or to any the movement, order for experienced in reduce

what to we quarter Given the in trend testing and expanded expect from we our general in partners of the detainee positive populations cases operational second saw many the CDC. Similar year, beyond government public, inmate to in the the the interventions of these of have guidance testing continue.

We testing expect to expanded continue.

optimistic the positive seen is country are facilities during meaningful in seeing the of While reduction the public. we we about the have cases in remain in vigilant general our the trends third quarter, we

continue remains The has impact of the and to to strong, work to with for underlying you pandemic our there meaningful standpoint, operational partners will COVID-XX quite as see ample implement are financial to best the grow. government in can market COVID-XX performance will been be evolve. We us our certainly the practices from responsive and an but closely opportunities they

net contracts target bringing a X, to because able investment down of a new our cash in were our election of a debt approximately of evident position. target strong this stable our quarter generate debt to shows continued multiple to we lower of flows, that paying and overnight, cost the of activities will C intention free we flexibility on profile of our cash trust remain Revoking financial pandemic, the election pandemic to and path prioritizing This have strategy, total January of to believe third a to through $XXX.X face credit but corporation continued global REIT not over on X.XXx in performance continue quarter we while our convert XXXX. capital. working and achieved overall we Last substantial our the reduction a estate We're provides We million free be flow. successfully much third how with in This million provided leverage meaningfully billion. as recourse quarter allocate net taxable X.XXx our real improve to execute have to allocate our net We during us announced cash debt a to cash a in into debt effective global operating pathway leverage more REIT and or targets. our quarter, total in quarter, clear $X.X will by our was debt even and substantial $XXX reduction. reduction achieving we revoke entered our

also are being sale assets to of properties, debt sale, These top-notch classes, portfolio. noncore retired of environment properties corrections We our our could $XXX sheet. asset in-place after stringent million for with long-term estate and related these of are be leases balance current distinction particularly clear a leased to generate single-tenant the increasingly The sale attractive. also will combined up which is the certain this in of government-leased of in and costs REIT prepayment certain the were which requirements. build-to-suit tenants outside evaluating the The assets government with mortgage nonrecourse according portfolio credit of mission-critical, associated proceeds marketed real properties the quality in from government quality primarily net among repayment government

stock to proceeds does expect to in accelerate properly not our capital-allocation appear properties our reflected price. be excess We these monetizing value these of that to use the strategy,

pleased is this active we of and interest. inbound significant of portfolio amount marketing the now, with Our right are

through will the the provide updates work future We in process. we as sales

and Directors with by cash share Board Following a allocate debt aligned sizable dividends. payments and a one represented repurchases could CoreCivic own shareholders management to priority our XXX% substantial to returning we include and our reduction, flow our portion our of stake free wealth have of personal of number expect to The shareholders, team capital of stock. future of the are which

strategy approach value, market current for the securities, We to shareholder with the content current the capital-allocation are represents create and and given clearly positioning debt our not valuation of long-term believe best company equity we conditions. our

Dave, election. to briefly turn like national on over this things reflect I would Before to week's I

with the successfully organization, has partners nearly for CoreCivic As in government collaborated years. our XX

all government as may Safety in track partners and this federal needs execute their The changing our time, The mission-critical success of responsive missions depend agency's across we We alternatives. administrations across needs. and segment on the presidential to missions. have to to estate that time, viable over that solutions our support a partners over successful record their partners and have our evolve assets lack federal being had The us each we lines. we experienced continue to we of expect business include provide real

to federal resonate. value We and partners our our will will proposition responsive remain believe continue to

like part administrations. not addressing have are states on of horizon. state budget challenges that for the different needs. governments Alabama care. to Kansas their We and stand the local their are critical segment way excited the about opportunities do and quality challenges in that their are infrastructure those state infrastructure, with more These change under And the we action with on individuals for the to the lives They and outdated justice staff in be Property the entrusted solution their of taking appearing criminal the pleased improving of

election, our certain considering monetizing to replication for segment strategy, assets Property value we given dislocation our pending create for that particularly us noncorrectional in way the could believe is of high-quality, sales the the price. shareholders, a our stock accelerate our REIT in the With capital-allocation

of we our on occurred the are Lastly, the pandemic, lives although help people the their currently Community set suppressed track. to people our gratified with we in resources that dialogue number our care in because of reentry in segment, is positive segment get aside country for Community has back additional change for of by

case to succeed. in of managers our care to countless provide help tools proud and them others Our chaplains, the educators, people very are we

and unabated, team entire proud to the mission in this CoreCivic so their mission. need I am of I add, for continues our passion for tremendous Our area

So and expansion jobs. telegrams to support started rights formally for of slate to and an the to reducing in and as The punitive federal formally that we state incarcerated of the for of ago the measures end, act individuals, make includes aimed policies years restoration to initiative that policies of for the remove it October, find announced at reform now we advocate keep restoration incarcerated we X recidivism. licensure incarcerated harder for voting expanded

just years, recidivism. entrusted is process to slow forward now are driver policies the justice what legislative encourage our in of our are and care. the through have facing the of inmates to criminal challenges is of you to complex positions believe and words, down system. step of the companies saying is commitments in it's actions to the we that we I up, the time CoreCivic the about the private that facilities our about With ours website our With the of carrying to proven those United not commitment past programs serious X% States, not more solution. like support to But and be our couple reduce public clear policy taken part visit learn we that

other Now ever, like of social time more of and that work where Dave pass third call politics, a economic around look to all recent progress. provide advantage make and our areas results the to more American now and the the show quarter these the over detailed trends. it's set in I'd take consensus aside can financial Dave? to to to people there are issues together we than

David Garfinkle

local $X.X and of per the $X.X of million, structure gain with $X.X $X.X million of sale real normalized the corporate of with adjusted noncash contingent performance associated expenses, acquisition Thank XXXX with estimated. following Despite are for from third state Adjusted only exclude essential on being to to flow estate on consideration have you, or has based expenses amounts believe net operations. are Adjusted to better for our that quarter, replace. guidelines contracts to critical normal million associated in reentry tax for in million of we a change are and X COVID-XX of share. assets $X.XX taken COVID-XX. cash impacted residential the conservative EPS, our million including new or separable estate in EBITDA quarter. than impairment we Adjusted With the respect we COVID-XX, $XX.X Damon, approach, expenses incremental by associated and and those EPS that a and morning, provide and per share also difficult that $X.X good AFFO and incremental exclude services $X.XX of we million a federal, sign $X.XX very centers of FFO continued was In generate real everyone. significant generated $X.XX financial of nonrecurring, been SEC amounts governments

Oklahoma, inmate the During facility the the because Marshals did quarter the economics. to utilize in that report resulting to which this consequential third the completed budget. We third not Oklahoma, Service long idle Correctional the Marshals state's COVID-XX term contract we Oklahoma anticipated, lower metrics. new originally agreed operational the non-GAAP of the U.S. U.S. facility our signed our with with costs last quarter, to from improved contracted Recall, Service any we us transition impact a X,XXX-bed quarter previously in Cimarron on the facility full to from during for State of facility faster with XXXX, of keep populations of of therefore, with for COVID-XX start-up than Facility we combined and the much enabling announced

own entered Kentucky. up State Property and Correctional X,XXX for of also of with our began the our facilities X a to the Southeast new in Commonwealth we in quarter, to Idaho contract segment to Complex Arizona we leasing third XXX-bed the During into inmate

a the for of contract to beds X,XXX Correctional quarter. second County in Facility During the Tallahatchie we quarter increased state Mississippi Mississippi, the new XXXX, in into to which with our XXX entered State beds up the at of first

Opportunity new Confinement month, Home in Community Finally, City. Prisons we were contract and Oklahoma, Residential by Services idle Oklahoma XXX-bed Reentry for a at segment, the in our of Center our in Center awarded XXX-bed our Federal Bureau Residential Oklahoma last Turley Reentry Tulsa, and

inmate Opportunity quarter to These the critical which Center, the at we Oklahoma result, will previously to new first existing with the as completed and reentry new State of downturns exemplary political Reentry now expect provide intake the through the XXXX, Center XXXX contracts of of Residential a crises. Since continue activated idle signed federal of contracts have various we beginning our additional BOP political populations health the we a Oklahoma. four other the contracts, of by new As five supplement X and of other result reactivate and correctional cycles, need utilization states. facilities Turley economic provide during are services new

the ended or contain the our border effort flow $X.X book months repayments is repay additional total during generated southern XXXX, remained revenue, during of generated flow we billion. strong, properties end, X value This cash as without quarter quarter closed proper a seekers million that repay in in despite the to with managed or debt border southern the cash. spread gross while million to will crossing the increasing over debt enabling amounting total operations of COVID-XX. and approximately strength the third XXX and XX, quarter third of to with quarter the we billion documentation net During an million COVID-XX, is September authority net of owned anyone in we to in of $X.X XXXX, XXXX. from Despite cash $XXX.X million change during essentially from cash an project currently us XXXX, activities the $XXX net of operating We the to debt and our pandemic of $XXX.X $XX fourth of asylum of

COVID-XX the of year may than impact view of the comparisons began since as end of first quarter to investors very During prior we see pandemic, at to more performance relevant XXXX. sequential the the the

due or reduction U.S. the segment accounted remainder the reduction to Community the adjust while average of from ongoing our $X.XX for to XXX, impact with largely $X.X and second with resident $X.X the XX% decline second quarter our Property the in and of to of about our our million XX. a which first to quarter the across Marshals, $X.X XXXX. Oklahoma million end Occupancy declined Normalized second or quarter, in Tallahatchie to our September for quarter at facility declined the of statement second due XXX% including Cimarron the occupancy bottom a third declined We million Total cash the at a FFO to during of quarter $XX.X both. until to respectively, ICE compares in aforementioned to amounted Oklahoma from in share $XXX.X X.X% or align cash quickly This of $X.XX Cimarron, operating were September as net on the ramped detainees the our at of during second million up Declines per Occupancy the again, quarter. $X due million increased did million, in with the by the of our and mentioned, the populations. declines translating minimizing impact to the at begin activities, our As million of from accounted revenue not XX% $XX.X provided third mostly COVID-XX. XX% XXXX, reduction decline, flows, in facilities for presented nonetheless, quarter third line. and structure quarter, U.S. occupancy, decrease XXXX. FFO portfolio in collected. expense during by share the million per XXX from of Safety into transition currently and X,XXX for to $X.X to quarter at stand able daily of from facility Marshals, XXX. at to occupancy this Cimarron in X/X accounted rent of XX%

impact in the the we on share Although disclosure our are operating they results, report. mandate expenses adjusted our supplemental have of per per in margins included statistics COVID-XX and presented excluded

in operating XX.X% than the for Cimarron of which our of COVID-XX Excluding in been because quarter, XX.X% period, aforementioned mainly XX.X% second lower and third first in would total no populations with line facility had the quarter, expenses. expenses quarter, the each margin COVID-XX have the at transition

XX, hand million in September As million matures had on we of $XXX $XXX our of cash which revolving XXXX. credit facility, availability of and on

$XXX is on X% to cash debt EBITDA matures. maturities XXXX with notes net we using by these XX unsecured hand. measured maturity unsecured the have trailing leverage repay expect currently X.Xx of notes until when no and Our We to October months, upon debt million

material in we expenditures no earnings track reduction the split have and total estate capital assets. mentioned in maintenance on on estate expect non-real We and $XX our our to evenly to capital XX% call May, between remain achieve real commitments million, which

$X Our with XXXX includes the tenant estimates year. our new approximately beginning $X associated forecast the leasing expenditure commissions of agreements, improvements million and of also lease at from capital down million

We the the interest in and enable from of proceeds year. first such far strategy, noncore million sale are next $XXX to to and/or can believe net believe our We capital-allocation accelerate continued which should we such and revised to Property in occur by expressed the encouraged still sales, explore us sales could of certain our quarter late this year real estate generate in up in segment very thus assets process. the still we

have will continue state with to these budgets are disruptions difficult the to guidance. new have duration closed, remains many The significant Although and border of to in and remain. our predict. and Because Operations the we budget of continuing segment, state significant business, our COVID-XX system generate suspend to criminal the risks we associated all the normalized, uncertainties and southern cash response well effectively with yet not and Community financial perform fill. win are flows to even holes Safety justice uncertainties challenges and associated

to considered direction our populations facilities and Community new experience statuses capital-allocation rather border reentry to functioning or financial confinement home acted our to the distancing reentry system the early focused forecast, X revised reduction a rightsizing sacrificing Governments to Community with is can safety have in normally remain still strategy, population our and due vaccine to to some continue now a social full the Safety reductions early expense or populations decline, segment, to continue These assigned disproportionate such we the impact having nonresidential in declines on releases intakes than additional releases on closed, we in certain residents a lower-risk to court of structure Without continued Southwest as create provide quarters while executing our expect we Criminal transfer a furloughs, on quality. and effectively on mostly population. facilities. long-term our the which faster to without for are with is within through business enhanced success justice-related segments, space gone distributed. until While under likely COVID-XX. our

U.S. have declines. Our declines, with Marshals to occupancy Idaho mitigate slowed. these expected of pace new to appears contracts in however, are The

of of Facility discussed In that fact, in transition increased of the number our by last on as people segments excluding Community and X quarter, Detention our Safety Metro-Davidson managed-only Cimarron November October from the we has and in XX care out the the end the if of fixed X of facility about and when occupancy contracts federal payments have need our reductions. monthly ensure further increased, the Further, the access in Safety minimizing that segment help populations impact a the capacity as reminder, partners our of have to X/X they September.

at an stable. is increases approximates the average year million extent annual the current by compared operating operating increasing expect that of beyond when We What's more? the we with through There current full faced at $X levels and annual safety largest utilization facility percentage, facility. in an million CoreCivic's upside We approximately XXXX in operating so revenues new far significant result as have to of operations improvement Cimarron also this our margin have the utilization contract which transactional managed would net at income the margin improvement $XX levels. result obstacle to an with backfilling a were least

other conversion fourth to Our line a of be operating miscellaneous structure working as personal inmate in to to third the was with taxable not do expenses REIT quarter we which to complete during corporation medical be estimated incremental procure the margins We certain those that amount third expenses reported protective in equipment our during from quarter. G&A material and related expense corporate expect impacted by quarter. the of for and expenses the C COVID-XX, will supplies a of most a

and third in quarters. as did of We will EPS, calculations our along the and second expenses, adjusted exclude we from EBITDA any of COVID-XX and FFO with expenses adjusted AFFO normalized these the

which facilities opportunity and construction to would Finally, for up a we for pursue to finance to X the continued correctional operate. new state in Alabama design, longer-term build the state,

with for segment. our this opportunity pleased the are Property We progress of

and the operator, back remain turn to will We continue the to questions. for by open negotiations I the be Lease up negotiations the will state optimistic. lines now year-end. call with Olivia, concluded

Operator

Instructions]. [Operator

to We is coming our will Capital move from first Gomes question Markets. that with Joe NOBLE

Joseph Gomes

Nice a environment. quarter challenging in

Damon Hininger

you. Thank Joe. morning, Good

Joseph Gomes

with Let's levels? at if of seeing the reduced population the of first. stabilization be off of the even some type like some levels might it's It sounds easier ones here, some start

Damon Hininger

your question. Yes. This again, Thanks, for is Joe, Damon.

right. So that's yes, think I

If And has what you this ICE the of at think significant our pretty partners, decline I numbers our in been ICE, seen definitely and but versus steady with QX. Service slowdown and continued Marshals two at morning, Marshals slowed Service during decline, the rate we look down first looking has to has we have saw side the then state on state pretty populations. a quarter.

last seen the in of X little increase a bit I increase states a states have in think an we've week. I bit month, think the and last little X shown

of of month And portfolio generally, in of excited of So about a anything yes, to the decline Oklahoma. couple segment, the that I probably last, the of in again, add bit. segment, but a X. sides has again, opportunity slowed facilities for on rate But nice be the in been Safety have new that's think, then I pretty we're the opportunity will a both there of seeing a which on that, bit partners, Dave? at the decline couple or Oklahoma, down stable been, a underutilized to And looking think little a Community kind over

David Garfinkle

were No. Well, flat. populations I say, Marshals our pretty I'd guess,

XX probably were the quarter ICE's to quarter. second think third XXX, like from the like that. down compensated were populations I about down they something

As pops if I Cimarron, mentioned up, slightly of ago. in total couple they script, a is which exclude contract my the up, even the new pops are ramping are were the from of actually up end to September days you --

to little it as mentioned my a still COVID-XX in form going think would script, forward, but impact there's I in middle populations the But has in of the crossed. bit that slowed of and I a in and -- see lot uncertainty So down. fingers expect reductions some of of

Joseph Gomes

retention it any fourth quarter, that are a the in saw looks in renewal? up third significant contracts you the then for rate. guys XX% And Okay. quarter, I like had about

in it like here renewal? looks So for for wondering up what the quarter fourth contracts just

Damon Hininger

Nothing we are XX now Yes. list Houston quarter, but across Joe. we ones The Hutto that near-term again, line, Nothing I say that the I'd and to next gotten fourth months, we've first, relative that the probably go a that's contract probably in and those second kind and Damon here were out significant is being -- to really significant this of of of that renewals. contracts unlikely contracts of XX out in the into months. risk kind we're think little further procure on, the at maybe the quarter, X, finish nothing think pretty competitive focusing whatnot, even

David Garfinkle

significant look averaged let There generally Yes. any it pretty X years terms, it's relative have X material contracts. when been months, at what we speaking, the as expiring in contracts has that always X over But add, me with portion you quiet in XX looking out is are a -- do you're to year. the to next of them

pretty would that coming be are feel I those that they So up about renewed. good

Joseph Gomes

a At REIT you it, of kind the technical had able status here. just I'm be know suspended dividends XXXX. dividend. question thought assuming then for right the now? I would suspended time retain guys thought And process that still you you to the you in said enough Okay. you That's the paid you

Damon Hininger

required at a our obviously there distribution, distribution we properties. probably we I Without right be but year. about benefits -- there, that were additional to qualified significant scripts, gain, in some mentioned that wouldn't been have the and depreciation assets that this under anticipate had don't a portion could we've but now. If we don't We some that, were of the talked sell improvement that there are large to taxable anticipate have Yes. an CARES Yes. Act additional that accelerate an

Joseph Gomes

happened base election, broad that your is just election, little -- price the at bit win here here. XX,XXX the look kind Okay. is know, going the to is if foot. the with what's huge there the based But the on guys' here. with I of been obviously, if on from big stock And a Damon, we you touched on saying, with a a price portion investor the to company, stock what's huge that was negative feeling Biden of for

little private Bureau terms here, you I U.S. the changing I if populations what excess Prisons immigration know actually from in them detail? capacity, fill can regulatory know can color don't a handle Marshals? set minimal those wrong, can being If and are that to detainees me own allow by at ICE the not understanding, facilities Prisons? helped all. correct the government beds the versus sector reduced over its a any standpoint has more or I mean my Federal please, of Bureau Are inmates? of gives It's the of of currently Biden up more to if do to transfer U.S. amount in that time. detainees that Marshals the I'm just

that limited. that, you of the or kind overview extremely would on greatly can Any the be to house detail government for alternatives federal again, more is So detainees these appreciated. give all

Damon Hininger

you Thank Absolutely, for question. Joe. the

partners. three let yes, federal give color all a me So on little

me Federal Bureau with Prisons. of the Let start

was our be about you as going from know, of revenue Bureau the me, ago, that about XX% of to So This years Federal Prisons. excuse XX on about year, -- came XX% about safety revenue X%. was, the that it's of our side,

different noting change was Board were on about and some a reform X, offenses. conversation going BOP some that through they, X going and the started to changed time, the trends at we that sensing for because for So policies our sensing years need criminal with ago, the

recent just a we maybe process alternatives about those the as for -- to contracts notably, exploration so most County, one up, through thinking saw And most we went facilities. come here, Adams

revenue to X%. back from that now it's down the XXXX, in XX% So BOP

direction the Marshals support to and the little Service. we me, think So down BOP is for their maybe your was utilization Marshals, if ICE there system of down and our again move likely into in I pretty guess, to contract. embedded it's towards a the for utilization I'll has gone is the think being that in able we occupancy We one the contracts answer sector, like the their is policy sector on is capacity McRae, that's because if there the think part again, private we're minimal question back they change private about bit they and a one that more in of that's there and missions BOP with directly BOP or that that directed ICE our system. one that there, touch let just have population some but risk because

down, and sector they that's but do a direct they the they've say first own also down, has they step, facilities gone private utilization gone again, contracts got that impacted because think We So they've term here with near if probably has operate. step, COVID-XX. that's those and occupancy the I'll with

what direction of Department Justis either is we think from Prisons. there a that's could and and/or So some of step, desire, Bureau if potentially be

Going to Service. ICE and Marshals

you agencies So on Both law focused. are this. enforcement touched those

have any not do they Service Marshals so And facilities they own or operate.

doesn't facilities So Marshals that they they XXX operate, Service unlike that the own they've and around where country got have BOP, the luxury.

either have and for city the they us, space. private They so alternative. counties no rely And on sector or

that to happen. capital a building be either capacity, So or at large a take X probably and anywhere will if buying commitment to they are would from asked to new look XX very years

something Congress overnight. So it's within require some not on depending they to affect could those And is that again, federalizing would the the Congress with on the leadership obviously, operate concurrence also workforce obviously what facilities.

they steps take. have different several that So also to would

location. solutions to the be has time, our good goes which changed able very very be again, Service high to provide with been bit mission, little think quality, and right we Notably, Marshals those closely agencies, potentially that efficient are capacity of to it and have their ICE, about the mission. has question the work with for So with a we providing in over capacity aligned too, XX years' the BOP

them. which So support has case Diego, for nearby mile capacity, court Southwest for could border, only got from rooms, BOP that it's not and city facility anything San example, space in lawyers X.X is but doesn't have our that and got for managers, that the it's about

very, only from not makes effective. agencies, very and ICE, they're a located are strategically of Marshals the perspective, very that efficient mission facilities our but design So very, both

So come Service I and X last that's The piece. thing from is that the areas. need that say point an different on Marshals important for ICE would

Service, Marshals So directs federal holding into provide capacity they anytime federal judge prisoner. have to a

they to the says, -- regardless this if house and house the policy to situation, individual that detain, judge U.S. someone luxury Marshals have individual. prosecuting don't dollars say, budget maybe and have They the the don't produce they to to or of needs Service, to population. they attorney, the this they the that So they're have person

talked Obama Judiciary. beholden ICE, again, the you charts, W. as by And know, goes by Joe, funding levels. under to circumstances, and Bush, now this Federal And ICE directed through driven and President Trump. what's we've So their they're, President XXXX, back kind so being the going different to funding back then George to of

funding. a Last So Senate ICE has again, you've changes XX you decline on leadership, House not funding different year-over-year either the both years, almost and the or side. XX-plus years X over in administrations. and different ICE seen multiple you've grown. got flat has been administrations, And in had have X

the high-quality have that we've and the a advocate raise private and of here apply ICE reforms sign these solution of also the has XX shown and pretty to in quality oversight years. ICE good for, of regardless we and what facilities, last mentioned so funding capacity, not grown operations or constantly and bar. a have appropriate we've is standards, to in we've but only they have that sector So And either we strategic stable locations, for probably on met local a different continue the standards this advocated improvement all the continued been of election, or over is outcome rely indicator kind has week's of think they need

Dave, I anything you a guess, And probably at that's long answer so add to but look you, to important you would a pretty when it, question, pretty that?

David Garfinkle

a Just of points. couple

touched You the standards. though, on,

meet what the facility, alternative oftentimes plant limitations. facilities of performance-based call county jails, Our facilities that those a they in house meet cannot sector the where public because detention standards in them they just national physical

they officials, to meet physical our standards facilities, newer all facility meet of our the where many use point just I'd And -- can't cases, our because those facilities, of alternative literally of In plan. also standards. public So have the we in And within a hundreds one couple their many where then of last officials in the they ICE jails much up they that -- work. more morning, efficient ICE get facilities courts, they the to extremely opposed when case to is efficient from an It's them them the report at sector points, and in of round place get -- have have our of those facilities as is, make guess, facilities. up hundreds county that when use last of to having space I -- the or of courts court.

estate challenging critical within our very to we provide a lot of real So replicate. needs that's

Damon Hininger

Safety thing our the segment we I'd got that of own Joe, is beds and that in operate. XX,XXX other about One we've we add,

in for either or facilities new few is And the desire buy that amount if was construction lease $XXX,XXX capacity, for bed. the a the anywhere reason, a you over to that put years so it, new is $XXX,XXX to -- a $XXX,XXX dollar federal whatever if seen State construction of about bed. about to per last range per of we've $XXX,XXX range in to there

that's beds, value of that just you $XX and put And maybe the that our about actually the kind XX,XXX -- if with projects half in again, use is it's between $XXX,XXX, X/X state underlying federal midpoint government. So of federal projects versus estate. real of against billion

they great second the have county's which they basically -- ICE we're situation a first, just kind maybe have both keep and I to guess, the needs if sector continue been look place, that private at I of to willing and around appropriate, the desire Service and capacity would to really current capacity, again, alternative. city have But have the in be is for country. say, conversation, Marshals that's So very satisfied have --

Joseph Gomes

and I'll Great. for me, One one last get in queue. back quick

understand using focus sell portion in the to levels? assets if stock stay a I Property assuming and, the buy segment, But given back debt go on noncore price able consideration reduction. stock to the we'll here first again, was is So the to these to of quote, we types stock proceeds the those back of the some to maybe at any were of

Damon Hininger

Yes. our we as put we shareholder own because current my to And down is available on I a program, of destiny make equity us, can pay would the current now with a in large we've obviously, valuation. markets if mean, share are holding. can which agreed as company, repurchase it think and to the obviously, we I based not position of ourselves debt. credit just now, sense lot of that But relates control

focus So that singular our the is at moment.

debt. Let's pay down

especially sense can would stock billion. of have the I back. mean, evaluate, is about $XX to down for some, refine if of get tool conditions, shares focus the These the would early past. to we on kind of we the it Let's last I if that the And $X.X our can program up for in a just million level to see we outstanding the the almost prices down From near-term all, road. And based and but late is our if debt. the guess CEO, say, I current bought newer especially in there I toolbox investors, opens evaluate make were evaluate thing when used us, way, we to days in is pay along XXXX, leverage bond XXXX market opportunity not was down share But continue to market repurchase -- a clearly, X.Xx.

So to level again, want the just down to the and is But paying tool I toolbox reemphasize, is past. our debt down appropriate. utilized in a think #X that getting we've and clearly level it's priority we leverage

Operator

question our Sherman Jordan next Ranger Global. We will from take with

Jordan Sherman

Just want to sure the Alabama make opportunity. understand I

that mentioned and can maybe you beds, think you to Kansas? X,XXX-plus compare I

Damon Hininger

Absolutely.

appreciate question. So Damon. this I your is

Kansas compounds. or medical facility. investment There was beds facility beds high a big X,XXX about outside yes, whatnot to were about two primarily was beds, XXX there, secure about a medium infirmary in So One that security. for was too, the as

kind you of in of about million. $XXX that's to was dollars put a X,XXX, to X,XXX range Capital So it, if about the combined, project, beds. want

it's but be XX to one project, obviously So this here say be lease beds. probably -- to this that been going pretty going is be is probably days, And of a probably because successful next I Alabama, a should projects X,XXX in we've much two negotiations. to are range will selected, about and assuming larger facilities facility will fluid, we on

in The range about other X,XXX be a one beds. will of

is and a right them have big a some is so right it to probably infirmary investment now It's that's now. whatnot, the specialty accomplish. put it also wants going what dollar of amount pretty care, to because medical One fluid beds very for to hard to conceptually just state

key to build obviously perspective, very not the from staffing we a how the things of a also bring we only utilities efficiently table systems perspective. facilities is, but from One to know and

that facility goals meat efficient that, work their to the guess, we're ultimately of And project. of meets doing I is really the with them folks most so the the design to kind the Alabama in with David? now that's that of continue right But to work you'd the give add anything,

David Garfinkle

Yes.

had the put cost $X estimated of them. to billion total I X think of state a all close for

the pay. them that's process mentioned, the lease working and to in rate cost obviously, to would try minimize that now, the Damon right with As ultimately we're they

So much more...

Jordan Sherman

I apologize. amount. the out The dollar cut you phone were saying as just

David Garfinkle

Actually $X on. of put about close billion the $X estimate state to an billion,

Jordan Sherman

all beds for almost -- three something? or to the for was XX,XXX facilities that And

David Garfinkle

their That estimate. was right. That's

Jordan Sherman

returns Okay. guys And for were you expected to Kansas? similar

David Garfinkle

I'd Alabama. That one the state industry one end reverts an Kansas but returns XX-year say, is be some ownership I the lease details -- Kansas. at ever was in in that, get first the also the to is least, the lease of at hate going where option to into Kansas term. not is the done. of to

retain lease expect ownership end XX-year the would to we So of at term. the

returns I think but So yes, it's what there'll thresholds. our be for, shooting that they're hit

Jordan Sherman

probably don't ask I of the of about one ranges? pricing facilities But associated of about -- total I'm And will sort sort be what's And is that. are around, say type sure selling? what quite I'm the my Okay. which you how then know facilities around know. then about any and of just to No thinking you not be I just parameters sold. wanted those that? many mind just -- with careful what NOI to

Damon Hininger

an of about $XX The facilities, NOI million basis. Yes. XX on annual

Services IRS -- at them their disclosure most and are of you leased administration to they're If the lease Most the all our them SSA buildings, CoreCivic look General of building, supplemental GSA, in like buildings. Administration. report, security properties segment social

this noncorrectional want point. And your about I talk so probably it's really wouldn't price at yes, portfolio. to And

Jordan Sherman

of Understood. newer part And direction these are had -- these you been guys some the in? of were headed

Damon Hininger

yes. correct, That's

a the assets not price, we're these, cash couple estate is happened has these path that real for of overall obvious this also any now reasons right advantageous, market ago. lease acquiring started classes for couple to was a because asset parallel other getting we of a There But valuation what is the years red obviously those hot credit diversify mean, I assets. are on But the distressed why which was through is government current that we one reasons. clearly, like the So thought flows with company. stock of of

is kind places misunderstanding of awareness that like should Alabama. opportunity was I with sense assets we're and thought we these strategic do we're complete building credit the not any or buy line were we these cleared to there embedded understand say, to the in we initially, being think portfolio. a that kind interest we now So take current market, reason when market we've the there trying Kansas assets, like lot trying a and properties of of market, the feel maybe getting to hurdle our in of advantage make other to it But what is now not of in

we've Alabama we've and be market, projects that that Kansas of that for and think individual something states option cost made understood. portfolio market but Nebraska, on an they it, seen do kind Kentucky and a We've it's attractive Oklahoma, completely lease the help of that as basis, aware kind can do be of a government aware development of market, a loan like assets. could Now Alabama, the developed for like It's specific want might the we to made project with well of interest we very maybe and how like the having for also very, this Kansas. of very investors even if

ahead couple market will the we So to credit. time a is now there see thought think good but go opportunity not also with reasons. what the buyer's getting hot these an value, relative was a added perspective portfolios from and bear and of being to Strategically, we potential It's market red a purchase.

Jordan Sherman

considering people I'm Scary but credit private these that, days. what about prisons kidding. you thought, just for getting think Maybe are

with Joe and obviously, less Just be so prisons new concern I is for would will Biden's a concern to now Democrats would be if bad a think Biden the on, private -- But not will there with elected demonstrate and question immigration wins, we if see the the rubber -- as policy some the with a that start think feared how just either your expectations? gathered in experience, Joe Say, administration? long over. turn is I'm hitting your how are doesn't not taking before I road from the whatever and all well start these we has When wondering, Congress, in concerns life founded But long that administration to you will as it and history change Republican comments Congress be? it be that the in of that shape? sort going in your the have or to

Damon Hininger

I'd team Yes. this, Good of Dave tag I'll say on a answers. couple question. with And but

say, Service. Let me first the Marshals it was

do federal rely from have private them they They the and completely every produced have again, our that's Service local the facilities. take alternatives, again, XXX% or not no facilities, Marshals to So prisoner they any own judiciary. on sector

have private or in bit that, policy no whatever best to for So very, is think to, made little the Service about of leasing probably, that the through be Marshals and there going of the very government. discussion talked interest that Republicans I you decision the maybe I've there the where longer buying if the some not can facilities. And would Senate, obviously, a use affect. Again, reason, if be agreement the idea is is sector a if impossible, hard, control again, to

So to a difficult one. think going we one is of that be kind

probably see think see As I it potentially maybe what cycle. would is question, relates you funding I to, your through the

funding somewhat into of next of guess, year which XXXX, go So as presidential fiscal over different happen indication a spring so down, been would years, cycle par on could I an new with could you that add during want to be, level or the linked summer up go and new would be or and administration. by buyer has this go controlled that with the of funding that, ICE you for, previous directive funding the to to a Democrats David? kind and policy Again, increased. anything year-over-year or But year. if history Obviously, or administrations the multiple Republicans is in flat, either X has last the congresses under maybe being other XX year either for

David Garfinkle

that help are Biden lot to you there to plate other it's control. can't I we there tax the on to Certainly, is would be under just they private of tackle going to area his is Joe essential governmental on such a complex one just of health president, get that COVID-XX plate, to be want care, that become #X believe because think expect next climate on negotiations, to service with. reform, initiatives provide you if his while focus trade that would to that when deal a solve such Just mission that, an I think prisons. change, box. a before the the probably become It's out But the all were

Jordan Sherman

targeting important, a prisons that the become Yes. bigger the And bigger specifically reform, I a then One be private comprehensive also of that -- the reform, President target. comprehensive immigration well, question shot things two would Trump is prisons. out immigration private would always that more picture the thought true with and really. at less

Damon Hininger

of priorities. That Yes. going list the through kind of kind be, of might again, legislated

are And also and becomes think Biden what's on side, coming controlled President, opening, priorities, Congress of I obviously but years, challenges, of an he's it could -- with pandemic. midterms to be other they've side Republicans so couple and the There through the kind next with think in if ticked there the over is but priority Democrats many got -- the the House notably is list 'XX. especially by on off. my up he's and the Senate got

David Garfinkle

just I'd Right because thing trying add administration of The sector of asylum going in to it's There to the a only not trends that now, good to a to what's they fundamental down administration, a populations surge. humanitarian economy. somewhat has to in States. President Trump a to shift of them to opinion, the the happen expect, -- suspect administration, the are to policy of going the would And numbers large help cross enter Vice a And people in really they're or turning I seekers the create Those might spread immigration are immigration I'd administration during of United potentially little resolve enter from help people is would immigration. that uncertain COVID-XX. the to with was crisis to in number did point been turn COVID-XX. trying compared you number the border. an provided private be although numbers, could saw to Biden that it's softer result prevent of the but away policy the the country the still perceived softer they just on the benefits Obama documents increase the that XXXX. are and It's people people to Joe under Biden trying to and that

So hopefully, and the we have recall provided. long that are memories solutions can

Damon Hininger

the can you of and Senate control White the But we this Marshals seen Service. provide we have good And Obviously, in over again thing Yes. over both leadership, That's that to really an a a over we kind safe, to humane, important in question, answered bottom can that turnover question. the lot and is with through the which call and and of House line. think with question, go scenarios high-quality solutions ICE there's House. we've is

quality, completely operations the So to transparent continue monitors and bar is on our and thing on and control we the can policies to on-site protocols. advocate standards continue and for raise bar raising our which government. a record renewal our if option we'll a the like we keep got contracts, doing attractive feel very we be And we've on good continue rates to based on that, for

Jordan Sherman

question. Understood. And just last

to So the there the concerns the at market right capital both levels by and suggestion, value in attractive at the I that wondering potential would stock of and stock And become view -- the about capital for a step the be I signaling the would the send to purchases guess it's I'm stock up does of appreciate is -- the But what -- management and what level corporate-level sort management buybacks. a suggestion level these question buy? stock. at certainly the behind right needs

Damon Hininger

Yes.

years. So think, And equal about message received. I amount I've options probably the I I've over shares. got, think, bought XXX,XXX of then got, I've

my in I've -- worth vast stock. CoreCivic is So majority net of personal

accordingly. obviously, So incentivized I'm highly motivated,

point. So -- but I your understand

David Garfinkle

think, to was -- then. have restricted I I never And it -- issue I have since XXXX, stock of not sold share used issued like then. options this I'd we've now so until, shares something add up that, and we Dave. since a is

hold that team to management Xx owner I our require have requirements. -- We share own guidelines the we

Damon Hininger

way. same I think I'm

David Garfinkle

performance fellow And certainly, stock. certainly well the the shareholder frustrated So invested. with are of a as

Jordan Sherman

down. purchases levels call We these at averaging

Damon Hininger

Understood. Okay.

David Garfinkle

Right.

Damon Hininger

you. Thank

Operator

today's session This and will for today's participation. you question-and-answer conclude conference. thank We your

now You disconnect. may

CoreCivic (CXW) 5 Nov 202020 Q3 Earnings call transcript