CXW - Earnings call 4 2023 | CoreCivic, Inc.

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Operator

Thank you for standing by, and welcome to the CoreCivic Fourth Quarter 2023 Earnings Call. [Operator Instructions].

As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Mike Grant, Managing Director of Investor Relations.

Michael Grant

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

room and We'll We joined for as partners Finance, Hammonds. On our quarter you results call, are today's financial of also the other with general financial Vice will government our the here the guidance Brian discuss also we discuss for with President developments by provide updates. in XXXX of year. our XXXX fourth well as business

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

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

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

Damon T. Hininger

also earnings provide financial XXXX . with with and and of our you on latest for call, update developments, joining will our fourth our partners. you will financial and our our latest discuss morning, Good call. Thank details you, Mike. government the for you introduce year I I developments us fourth today's XXXX operational guidance. On full quarter performance quarter thank

in in over call provide Garfinkle, share more now our will our will on Facility turn revenue $XXX.X initiatives, X% of and generated final will Correctional remarks, and of review results increase year which my credit quarter. I'll XX, prior of to detail. previously the our the expiration of at our the on brief our our the financial detailed in who guidance we a ongoing Dave Correctional and also Bureau our Following XXXX at I provide greater North contract McRae the prison the of November quarter, overview facility financial the with Prisons He comes of our CFO, debt compared XXXX. XXXX Federal fourth June was update spite million, a facility structure our quarter. Department quarter bank a fourth This in to of increase obtained owned expiration financial the agreement Fork with lease Corrections results. of buybacks including new fourth Oklahoma In capital our reduction,

quarter. in in which sale combined the prior from lease from populations The our resulted increase with debt FFO driven despite the operations, revenue with of compared combined the per share occurred of of in or CoreCivic our $XX.X expirations, our facility or representing $X.X million from Community McRae portfolios. from generated the normalized Safety reduction or share expiration higher strategy. lower expense XXXX, fourth to and increased by per total to a quarter EBITDA a demonstrating of FFO reductions Oklahoma, We and these FFO, growth and $X.XX X interest state occupancy increase of strong Including in million per was $XX.X our $X.XX share funds X%, revenue Federal X%. The and the year the of increase million resulting

as strategies attraction related incremental and our our and through have hiring staffing We overall incentives in fourth environment. temporary in That including quarter. operating improvement achieved significant experienced pressures labor an have necessitated said, rates from market well expense improvements as retention the XXXX, resulting the

leave trends continue And labor pre-pandemic to progress tight as the we levels. occupancy expense favorable continue ] toward we should we that and continues market operating more as XXXX, As to loosen. believe [ staffing

As staffing calls, and on the mentioned increased staff in improved conference successfully have past made recruiting investments have several significant retention. we through existing and our our levels

and the were [ have prior population quarter positioned right achieved well enabled COVID-XX highest us pandemic fourth from reduce the XXXX, the since In of of temporary the the start is they response. our to quarter make, us quarter and immediately year XXXX, you may the and the rate comes customers' quarter manage recall, investors These occupancy needs. second have to usage of higher we ] to of our incentives following as which,

an ] population For to in XX.X% asylum occupancy also ICE. from ] came the Enforcement, Title onset time, health of the occupancy in temporary our the our seeking COVID-XX [ during XX, individuals partner, order implemented increased or from pandemic May a [ fourth our segment to restrictions pandemic detention public occupancy primarily had At fourth from our CDC closed same of end. nations the the occupancy in of [ issued Community from XX, end. quarter ICE Safety came our our Customs border at largest XX.X%. The XX% the government since resulted and ] segment of to an essentially quarter year, that this to to XX.X% by XXXX On to higher in increase the facilities Safety increased segment Immigration

report DHS. individuals X at the to has border. Last an increase country of we demand people to the numbers There and attaining Department entered number have enforcing Southern and XX in who to or capacity XX or record increase Title been reported end immigration the since people in country the XX, the for These entry on under within is of custody continues activities ICE encountered the responsible in Homeland of increased States. Security, arresting granted that authority remove have quickly the United the X of DHS Title quarter, for illegally. from lifted. laws the Without is deny individuals detention since Title agencies of of the was the

For mid-May the the of XXXX XX%. in increased number of individuals of custody XXXX, December through ICE

in residential the populations levels. our the minimum associated a within result total Federal the proportionate increased our facilities detention same Over increase we in staffing. XX%, fixed results ICE the bed a Because of is include [ our believe in in which populations because our investments payment facilities period, the financial with clear, payment was fixed many possible of not population ] increase part until such, as do in compensated component, contracts

many now our facilities our partners that Most Safety are above also broad-based occupancy increased the of resulted The our or from notably level. states levels government Colorado. at Arizona, from occupancy higher segment of Georgia, and state of in Idaho from

Palma State year Eloy, improvements our Now financial management as metrics. operating Center as La Correctional contract with continues under of Arizona to show and Arizona, second it's in in in occupancy well

to we and quarter as quarter our During to vital and our requiring incentives on able facilities best-of-class demonstrated the fourth quarter, outcomes hiring facilities exceptionally sharply for strong oversight. an reliance the reduce due The resource new busy partners temporary and services. local was contracts were a fourth flexible to services, provide labor resources

available which During incremental produced each capacity. three the commenced three with and occupancy quarter, new facilities at we signed management of already contracts,

our As and at expanded XXX utilization is a we to contract correlated our for a Montana margins. X,XXX-bed ours up correctional in state of November, with business reminder, Eloy, higher new inmates model male In leveraged facility of announced a management facilities is care the with to for Arizona.

cared November, to Tallahatchie, State term with in Montana at intake at completed intake partnering [ for manage XXXX, complete the XXX State occupied XXX fully we Correctional is The XXX previously contract. be XXXX. runs June to not residents with two to of had XXX County before a may Hawaii inmates also we a a the management initial was We management inmates Wyoming we contract for extended the Saguaro their Montana Facility. of first Shelby, not the for state from company-owned The is inmates Wyoming the relationship XXXX. the for Center up new expansion also for including Tallahatchie XXXX. management Mississippi. Crossroads residents XX, them Also the This that Idaho inmates This as total years, contract Facility December years. represents XXX nearly The of year-end. At an is of our Correctional up The in from in for term, and December contract process mutual utilized contract XX, contract the X,XXX-bed our announced process of as XX, agreement. Correctional under approximately care with time as of and our separate care by term ] for of it we new since renewals, under our through new X the been

year. Finally, county we up December facility. November. began ends announced for option contract this on care County contract the at to November additional Texas an management The Harris to to at of new the for initial XXX facility. contract County, This access includes new inmates beds Correctional contract Tallahatchie third XXX XX the and The X, term XXXX, is a during Tallahatchie with

we relationships. complete during the anticipate completed fourth during Tallahatchie The on We Facility. population and during end additional for quarter of to of the fourth Harris began County update year. XXX Hinds At extended management with pretrial at the terms. county's quarter, that Also, option Cardium new to also for signed our X be inmates the first contract process up our detainees XXXX from third contract quarter quarter. to this may as X-year male [ the intake receiving the at we an County, intake be the adult ] up Mississippi, County a the of of Correctional We

have throughout populations as United While many to and interesting Federal begun that more experience constraints large note capacity contracts, result is of and counties larger have focused infrastructure both historically, States to a we it state on problems. the

Expanded several to precedes in population their as long challenges county in typically address note, geo geo term. adjudicated additional to with jurisdictions remain sentenced. populations the Further we prison state help and growth is near in the populations discussions

turning to Colorado. facilities many XX from well as prior the Now Community as of XX.X% XX.X% reentry facilities, in including XXXX continue serving residential fourth our the of and our of occupancy an Bureau the is of of states, to quarter BOP Prisons in or period. Populations comprised which experienced across improve Texas both year segment, increase in we

provide in our We management and services Community monitoring electronic also segment. case

a the of represents care. critical segment Community Our our and to residents is in [indiscernible] often successful reentry

temporary reduce segment increased we have as increases XX% in been occupancy our incentives due able We quarter renewals. from fourth in income staffing as and year increase of the Safety to per in the able to operating were segment. diem contract also prior in to Net XXXX the did as just this we quarter well attain

We pandemic-related successfully expect trend period communities. in from prepared of as more important to occupancy reentry continue an transitioning return that the residential be these incarceration for a individuals come partners help public health to and programs our government to have into now community segment back of that the better end our policies

the the rate contracts partners. retention granted for We never that XX% performance the segments with to our quality the renewal renewal and in years during management rewarded to X continue course our including community through facilities from and year. up contract existing of colleagues management Finally, and of XX long-term take high our for of over continue government all safety be came of XXXX of a the commitments the renewals contracts high and enjoy of our

entered an XXXX. X, lease into the our agreement Correctional beds Oklahoma of state effective to Facility we with reminder, Davis a October As X,XXX

Allen named Gamble value mutually segment. facility the of our operations Center reported now segment one is with advantageous facility, with facility we transitioned facility ongoing the our converting that effectively Oklahoma. is our simply Correctional in to to our to reached lease which own That is state. Safety government state, the to which in successfully We have the contract operated Property now remain in pleased this we from the state We relationship one a we and and and now for employees, operating

the remain environment Federal, optimistic macro in local and long-term our forward, state business. we Looking for

are in to are bed level, unclear of serve complex that opportunities governments impacted the a steady needs. increased increase infrastructure growing there and end the Federal Our capacity, population of to impact At Title the see XX and long-term factors facing by levels challenges, utilization we is their continue although detention detention utilization, as still ICE. we see other

The significant levels has most funding annually. historically Congress approved factor been by

only the However, is needs for the geopolitical significant enhance the border facing security. events and challenges country still at southern

through funding way remains appropriations -- remaining over fiscal into which the Although flux. in September XX, the the year, for we ends the year are Federal fiscal process XXXX,

includes for Congress. by DHS funding not administration Further, has and significant that proposed bill ICE by acted the a supplemental upon been funding

on the The outcome process DHS ICE at is services bipartisan And significant population though the just address have of more solution, to While impact southern challenges positioned are has overall resolution related levels and there even funding is part been recognition reached. a need overall our border, the and facilities funding fund forward. moving their of of ICE well to to expected to the serve in needs. detention we appropriations not are the robustly

This RFI, monetary the services. custody people portion according release in physical of could interactions not the is shape. Earlier of about border to yet space, budgets last engagement involves by and overall management participate with apply individuals from the and part the RFI services, comply scope noncitizens obligations. the the request ICE information, for services early RFI X.X their a large immigration or Another current the service DHS to released participant detention. coordination level, potentially year, and technology, to docket. million program with that reporting funded issued intended information state RFI, community are to expand and Congress non-attain the only of alternatives overall and to state At on help management Though includes management seeking of a good is for stages, including engaging the very and in

partners state their also states their indicator in are in which for prison prison are further populations. populations a populations increases our Jail Most prison increases reporting many are and backlogs, remain state of significant. projecting leading

our in normalize and as agencies while to to have be adjudicated, environment remain, operations operate continues state continue reflect improve which general begun challenges are macro the uncertainties we results correctional that and financial certainly and impacted. In [indiscernible] cases Additionally, to will improvement. summary,

high, reflect pressures leverage and that cost a Our occupancy multiyear COVID-XX our sharply margin with to that occupancy has progress solid begun higher making labor-related are is at comes the rose period. operating we the during against

to FFO XXXX $XXX In year our of release, of press guidance. our includes introduced EBITDA million. It $X.XX $X.XX a to share range million financial per forecast full we and normalized $XXX range

Correctional California year. been we As over State these March our California our calls Center of a ends sharing have the for on XX for of year, lease this City with

in generated has facility EBITDA. That slightly over million $XX

new of So pending with quarters in focused now of this that guidance. leads three a to financial over further call great on impacts a detail beds EBITDA financial absence our for will expiration guidance at in more the is top positive the California including and to at negatively our in on final markets the location for credit of further anticipated He allocation Garfinkle, share for capital capital City. and will Finding XXXX comprised and debt CoreCivic. I'll who State a you, our turn also a to the the activities our as our facility look is detailed CFO, progress reflected lease results strategy, details Dave are the Obviously, provide we quarter. California as fourth buybacks. replicate and of about which facility, Dave. is bank in and Over solution discuss is a for well reduction priority solution our XXXX

David Garfinkle

of fourth year fourth quarter. reported special per compared the of adjusted share in $X.XX the for to in net the quarter quarter. morning, of XXXX GAAP was $X.XX per quarter share year income per In Damon, you, compared items, prior EPS and prior $X.XX good Adjusting Thank share everyone. XXXX, during the $X.XX we to

in with compared per share was quarter the fourth Normalized the $X.XX during $X.XX quarter. prior year of FFO XXXX

our the of as and adjusted last FFO and expenses These included resulting a reflected the the to continued the in favorably and in normalization $X.XX of expenses. figures disclosed expense Act. per offset in increase populations, per related prior expenses impact impacted increase adjusted occupancy structure share under of trend entitled expense quarter and reduction the share were year, of partially by by of G&A continued state normalized net we from to normalized As tax fourth we lower the from and an operating credits pace interest results quarter, the Federal XXXX second and certain Title higher than increasing year in credits. The XX credits ICE quarter, a expiration on from resulted EPS following were operating CARES The the during quarters, nationwide slower albeit populations May fourth XX, detention at of the third XXXX.

Title December XX asylum increase without or effort quarter. within U.S. of our ICE used authority XXXX crossing the XX, border contain fourth At facilities anyone the an XX,XXX, to and up proper denied XXXX, from spread detention at by XXXX X.X% since September COVID-XX. that XX% to to third is ICE compared increased March had policy detention the in the residents XXXX populations a daily nationwide or border of entry Average a seekers the that documentation populations with XX. were during quarter been

due that do incremental Note population of payments where models included at in compensated occupancy facilities not our compensated certain to and fixed in result our because population. increases at were increases can in populations always revenue facilities, already occur

an $X.XX increase in XX% to to normalized expenses, population of $X.XX $X.XX ICE combined populations from and adjusted awards of QX. with FFO sequential compensated XX%. new Our in normalization up to Higher from increase contract average was contributed of $X.XX share continuing a ICE to and QX QX, of increase EPS of an in per from X.X% QX, operating the daily from QX QX

in the in prior Operating margins XXXX in of year XXXX. to facilities fourth to quarter the and third quarter our community XX.X% improved XX.X% XX.X% and safety the compared of in quarter

The our credits, aforementioned the Center segment. operating tax increases we the and due Correctional to increase quarter. transition Property continued of Excluding in the in of in our to Gamble obtaining the operating occupancy margins successful the the increases were been in margins in the prior per diem was XX.X% year a have successful lease impact of expenses normalization Allen

we quarter the operating the have in by in to over leverage The XXXX. obtain, and fixed to from of community resulting enabled The safety our quarter amplified able our was in us occupancy XXXX. fourth over increases to in and fourth of per third revenue quarter revenue the in the occupancy up from increase XX.X% XX% occupancy XX% been in Compensated of diem quarter year prior compared increases facilities the incremental increased which increases in X.X% expenses. was XXXX

the During continue reducing incentives able expenses the past and easing labor-related have to and labor fourth steadily we incremental quarter, quarters. wage were inflation as travel certain registry despite that nursing, several market pressures such over been temporary

Facility expense three These from transition improved $X.X the in Allen million million by forward. effective the Gamble the and return segment XXXX. quarter categories of the quarter will fourth fourth The October Property of in XXXX our continue stable $X.X a X, third provide successful going XXXX to from of declined quarter operating margins XXXX, of and

the to balance next Turning sheet.

quarter, previously date previous maintaining fourth credit revolving million structure. increasing increases $XXX total undrawn from extended May million completed certain facility, The similar $XXX an the $XXX the pricing borrowings $XXX size XXXX available the million bank our size from and to to the new the and the under October the to of XXXX into loan facility bank credit million. $XXX while of balance amendment previous $XXX to effectively from initial of and extension which we term replacing during maturity an a covenants relaxed facility, million increases million As disclosed, credit our bank remains facility, credit from facility

progress strategy. focused on debt remain paying debt and continue on down make We reduction our to

the the XXXX million a decrease year interest Our interest to of $XX of XXXX. $X.X debt full in strategy from resulted a expense and fourth reduction in expense of decrease quarter from million

During million, cash. repaid or change XXXX, we in $XXX.X $XXX.X the of million of debt net

of including notes the in visibility the reaching X.XXx. million X.XXx of targeted repurchased $X.X During our open market, in unsecured ratio fourth With $XX.X XXXX, we of leverage quarter. million clear to our

at of our million, an quarter, million totals fourth average aggregate XXX,XXX bringing share aggregate to of per under $XX.X of at shares repurchased X.X an our $XX.XX common we our price or the cost shares an stock repurchase During cost $XX.X million share. program of XXXX

ratio. paying allocate discipline Going debt targeted down forward, flow free both and cash maintaining we to expect our on shares, repurchasing towards our leverage

trailing net the EBITDA measured leverage Our using months XXXX. December ended debt to X.Xx was XX, by XX

on with we million us As facility, million had $XXX XX, liquidity our additional capacity an and of of of hand credit December on $XXX $XXX cash of million. total revolving borrowing providing

of XXXX guidance. Moving lastly financial our a to discussion

to and FFO expect to per EPS $X.XX. share $X.XX generate to of We $X.XX $X.XX of

awards Our guidance the reflects growth to the half second local XXXX. residential of during state in and attributable obtained largely contract new populations

Intakes substantially under those contracts complete. are

that utilization experience we state Our higher existing to began populations reflect also under expected in contracts XXXX.

further reflects Title daily our due May. Our compared XXXX to an XXXX, in average in with XX mainly of increase populations guidance the Federal in expiration

Congress approved ICE these Federal expect funding continuing upside for detention for to Congress We be Homeland detention historically at our stable the Federal levels at highly by the capacity by including Funding throughout funding XXXX. beds of border. The populations higher border include utilization security, supplemental detention to funding ICE, under publicized the for a expires to to insufficient impacting factor the significant been partners If is is southern demand the additional meet bill guidance. Security, provides most approved our March as levels remain resolution could funding for there X. Department or has

improving we less higher labor to progress precoded an for staffing temporary guidance continue resulting market hiring in staffing the levels. of Our on incentives, continuation contemplates as reliance but with toward costs

of expiration State with the the California the City Correctional contemplates of our XX, at XXXX. lease effective guidance California Center March Our

to million and million revenue to such maintenance, in carrying result and expiration. XXXX taxes of to in during This lease will and costs $XX.X that as XXXX, million expected after in to EBITDA property reduction incur including facility insurance a generated in $XX the continue $XX is EBITDA $XX.X we million approximately

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

encouraged are populations the quarter's at we While this fourth to pre-COVID higher level our return to margins of likely staffing sustained quarter, to in strength levels. our by as require margins the continues are

For fourth incur is because higher and quarter, as the during quarterly to day QX of quarter, the seasonally fewer and QX decline reminder, margins. negatively our operating in quarter XX% utilities impacting a a results, we approximately of modeling $X.XX our the because weaker unemployment compared QX one per collective our resulting in taxes to share from first

now authorized under Moving our to XXXX, we $XXX.X through XX, million stock our aggregate the December million, repurchase the XX.X capital of shares at program allocation Board strategy. share repurchased Board authorization. $XXX.X Since million our common leaving May XXXX in of cost an

opportunistic consideration remain in trajectory, taking capital. additional our liquidity and into of and shares deploy stock XXXX, will shares leverage, price, our alternative to expect repurchase opportunities common to We in earnings repurchasing stock

Our guidance prices. various assumed includes a range of repurchase amounts scenarios at at various and

debt operations par from cash also continue or flow redeemable paying open April notes cash to XXXX. XX, and down partial our scheduled purchases hand include XXX.XXX% of XXXX could on of our are senior at to which use We to in which become on mature market and redemptions X.XX% expect additional

we additional if debt debt our to debt opportunity conditions continue to to existing favorable. securities debt maturities that and monitor markets weighted when and and capital portions of refinance market utilize average could the the proceeds to We the our determine are issue extend

and balance range debt Again, flow tremendous repurchases. our our and and our share repurchases. and cash in balance our cash of share guidance a both and repayments capital of liquidity scenarios deploy allocation flexibility we flows, free with sheet have strategy how reduction associated debt contemplates the between we Given strength

decisions cash expect available for from million share. We proxy $X.XX to million flow $XXX.X range consider which per capital to allocation a we $X.XX $XXX.X our AFFO, for or to

depreciation We and our total expect you in to to full year our tax guidance XX%, release our press EBITDA interest and the with normalized rate estimate provides expense. effective XX% be of

million million capital expenses spend $XX We XXXX, during are expenditures forecasting $X for plan million line consistent compared for with incurred during the lines maintenance to and call on operator other to million with now We investments the open $XX to questions. in in G&A to XXXX be XXXX. $X will capital $X $XX million the turn XXXX. I to million XXXX in to back up to

Operator

[Operator Instructions].

comes from from the Gomes NOBLE first Joe of Capital. Our question line

Joseph Gomes

I So wanted populations of And with quarter. the some growth that, going It the we start today. sounds where had conjunction kind kind ICE And are in of to like good sequentially you supplemental, with in the it that year. looks up like today? and facilities occupancy XX% of you to occupancy those ICE do the they had yet at were two And end get we are facilities not how through like Where to XX% that level. the above there.

Damon T. Hininger

Yes.

let Joe, one. me on tag team with that Dave So

lot of Ukraine that's at kind total think resources your First that of that facilities question, was we path be and ICE I additional know that's bill as year then know the bigger is I saw with as little we XX,XXX just which did between our our a the on part up. leadership I give of funding. at maybe as between of that's Thanksgiving Congress is and think in Obviously, decline that yesterday, up, going that time and funding ICE . And people much of a know I following the on kind leadership probably quick the within see where of population pretty again, the I discussions of to if house from you Taiwan and real-time bit number all current that there's and seasonality. it you ends with on holidays, And do don't little a just based comment. real pretty typical a for Christmas typical think a center forward with and utilization.

days what see we'll So again, happens in here and coming weeks. the

of watch kind you So and off to there, ICE over The know, closely. year, appropriation DHS pass -- your current let on on especially we'll watching are through done be me Border we'll closely is fiscal and funded what a adjustments early March, on for of parallel path, Dave. as it facilities, But and Patrol.

David Garfinkle

Yes.

because payments where asking to Joe, you all kind of be think, I payments. facilities not have the fixed those may fixed facility of our stand-alone

So I'm this are really or payment that may fixed hurdles fixed payment few They below not A to in referring payments. level. point. aggregate are they those XX%, hundred fixed which not clearing at the the may portfolio. below facilities total, the we're have you're sure probably in across But

thousands. not they're So

this would part. the So populations into most any at incremental for point translate revenues incremental

Joseph Gomes

talked Okay. about Great. then you population. flat the ICE of kind in assuming And the guidance, you're

know, your ICE We're there. year was more at to it expecting more was for are think recent think, XX the XX? that in you that to beds. guidance, population XX,XXX I all XX,XXX, funding? you trying we most As for a funding level stays number. look get the do little Or Just at you last detail at be When

Damon T. Hininger

Yes. this talk of X last That's -- funding They've say. the hard our actual -- the number bigger in been all continued so little bit it's year. just guidance, I to for under so XX,XXX just a ICE, working, level about let populations, October I'll as not know, that's you year kind CoreCivic, taking from but since Dave of resolutions basically,

the we've a go clearly than of feel they're a higher fiscal little couple a to gotten months they into like into in So year. position that as

for ahead the XX,XXX, So and that but XX,XXX. That could the at year maybe run rest they still go possible. fund at of

middle did, think the It strategy again, necessarily about maybe -- on for national second the But critical go they maybe that As the populations. and B up rest I will year. I number, The pretty happens though, with I part weeks be year, fiscal that the part obviously Plan last you determining don't that a the may down. couple during go of year, that next will to be of I of our what reprogramming, the little your the the know, know. will think, think, more in of didn't proportion question obviously, and your guidance. of say,

to that. So number what add a from we the national the we've the stakeholders And of gives Dave on of let our the of comfort little utilization flat. maybe country population go number pretty some different but bit, let on based but the me we're parts the good with kind a ground got add that pretty ICE -- is operate hearing where various year, down our and for us rest and

David Garfinkle

would a at the with the fourth we what high reflect think saw quarter. probably Joe, populations consistent level, I guidance in

anticipating continuing budget quarter. in in or assuming guidance. detention a or could of for in the So as decline going March not whether my populations, a we're X those a increases through the when fourth funding we're year, gets remarks, full see the a not we're not funding if And be funding And I upside anticipating our even mentioned prepared on rest populations, like supplemental resolution I that's increases. for refreshed probably that said, do to or likewise, they from significant beds

stable So pretty throughout at least populations, the level Federal XXXX. at

Joseph Gomes

you U.S. mention I'm Marshals really update Okay. little Damon, Service. on you client. that on the if wondering a give didn't anything might us

Damon T. Hininger

appreciate or just I question. bit a kind we're that little up been a goes. Yes, basically it Yes, have of steady down The as seeing populations nationally.

bit. populations also a down Our fit up little

That's last XX,XXX-XX,XXX. X, -- X, around March probably XX for X the I stable. think is months pretty X, months national we've population little now service the again, the stable a last X, been over bit But years. X pretty last over down the right been

forecasting see So real of that of the like for add there any we're with kind changes to year. big you the Dave. the rest don't Is anything that, of customer I year. would that rest for

David Garfinkle

were with populations QX. Yes. QX very in consistent [indiscernible]

slightly. were they up fact, In

Joseph Gomes

Community Okay. increase segment, on kind of Great. was And the a revenue large compensated mandate. touched There on in then this the little a per bit, you David.

you I anything think up of compensated more do high there's you there we community -- it's watermark? in about renewals Should a bit contract more that? a upside just about year-over-year, kind revenue some the driving mentioned else mandate Or potential think is got, that expect per is that that's I $XX. side. of you little on

Damon T. Hininger

Yes. of quarters in Joe, tackle side. one. growth on of actually, the couple Yes, I'll we've a row community really seen strong that a

the but compensated as of contract, the got know, I you also kind had for really renewals some both should good pricing on occupancy So growing, reset say. where we've the we've

to the distancing support go was Again, release to COVID. everything part on increase population with So ahead easy to and see of we populations was continue with that going good and that there. social

we kind because to concerns some that those see perspective, continue think back over go of we up. and health from So the is now really bounce a alleviated of populations the were pandemic is big

there. So to again, good with and see really, continue really growth that pleased

Joseph Gomes

for me, Okay. more aside one step I'll and here. And

near wonder you terms of Cal tell be you're types new I there. Just to might significant anything that City you for mentioned in can here alternatives for business you're talking and any term? looking if in there's of who other the that and

Damon T. Hininger

Yes.

So a business. City new is Cal

client a in it specific facility. I script, here is to discuss location. any as not mean But noted for my that great So

Southwest is not Angeles. from Los far

would a think Federal facility partner we a good or solution partner there. So state a be

past, ICE So I Joe, past. [indiscernible] know facility in you the the have in think more used the that and

their a facility for it's mission. So great

again X facility. To conversations And we just secretaries governors that really the X over within of you, closed of that have question as and come a becoming been within the backed up So it's issues just X generally last system, knowing to as population capabilities months. and of starting their the years. the to seeing great to and are and out more same actual see location, in facilities new also are be populations your I'll solution because, infrastructure its a course, with next probably jails but the challenging met then lot about tell being increases or have message significant also more continues about have overcrowded of and X Corrections here business, I to are the continuing second directors

us conveyed So partners. from to continues that message our to be

entire to our is other thing that or say the COVID difficult closure operate, and targeted maybe for The a surprise bit more are facilities maybe that just for either they closed that customers, folks challenging units are is maybe usually they again ones some facilities maybe of I'll what really older, the little maybe staff. during but

I of it. make we just sense kind and operational it XYZ our us facility of immediate from opportunity for part certain customers doesn't are in closed And more this, so say, coming jurisdiction, to for reactivate some think, of us to

make declined I'm that, didn't systems sense may what facilities system more ] their Dave. to system they've basically, [ our created there. use So in just capacity and has that demand have is units little to got that's or guess bit you capacity them saying a little Is there a because I that or reactivate operational so to anything you'd from add a

David Garfinkle

Yes.

reemphasize, second to the the Just signed that in XXXX as just underlying still drivers are getting of of more half And contracts urgent. there. the mentioned, Damon new we

contracts fourth going have having momentum, into and county prospects 'XX. three in we and the quarter good with about into moving quarter we're another contract So signed governments, new good good so as third really both feel and in XXXX that's the state momentum

Damon T. Hininger

supplemental. about that watching the reinforce knows new really but appreciate around I this we're the how mentioned what XX,XXX of with to that is we now impacted we I'd just I to really staffing some now contracts. that Yes. other who forward about conversations Joe, and think say, of with script, enterprise with we you little along and know, little some for in as some closely about with we is that also the thing nationwide, benefits there way. was obviously, happens But -- a margins, discussion beds and bit funding getting likelihood one want we're and supplemental. on are those our some a want leaned ago There again, investments it, know these the year Again, ICE of a good had that

long just need continue but not saying, new what probably we on trying staffing or anticipate to customer are But customers to existing the we a today, as needs what little on bit front, very customers. be with as is the thoughtful

Operator

question the comes Zacks. of line next our M. from from And Marin

Marla Marin

running, we're a grow. seems rather it's than and now like seems it During were ] getting seeing that in smaller, and COVID, advance that still and [ obviously the backlog, courts treatment they're it appearing to back up

utilization So you some the your of post-COVID case, that your impact might of how that's if think some do facilities. and rates

Damon T. Hininger

Yes. a it's different little It's a catalysts. couple a good question. of of bit yes, And

in with where were get going is to it to alluded numbers geo You them seen that in in operationally course, this pre-COVID populations backlog they nationwide. we've you, back of to

again, we're -- we that now. So seeing

we as Idaho, mean, think, in the I I think utilization contracts reason. with Montana increased Wyoming about, again, part talked with that's like I of

I But are within another capacity the another some add is of I going outcomes get some also more okay, of some it again, the the of going you'd indicator, the again, happening it thing seeing have I backlog And us and that a sense around to that, and material part at country looking for by which I systems anything I'd just think because guess state today say CoreCivic. think is just reason crime these lead cost effective, lot off-line just of rates the to to Dave? actions makes capacity reactivate took impact is, on what some probably the too think, of that on using that's top better and of level, you're with third at kind populations we're local there that, is COVID. to to

David Garfinkle

add, Damon. to anything have don't I No,

You covered it.

Marla Marin

Okay.

to you So operations, I'm your that you maybe -- also the and services, that, monitoring And community talked would do prepared electronic alternatives detention. include see about in mentioned service you guessing your remarks, see you talked as had you courts of that benefiting how Do and good in use the the quarters some from that operations. services some prison before we're prison on changes seeing about community detention? you potentially

Damon T. Hininger

me and been on [indiscernible] rates. per had -- the the just answer utilization also has we've again, diem driver community, some mean [ our per from population on some day of the I I the Yes. and renegotiation ] perspective and big terms, improvements a into contract Dave. keep increased facilities say again, favorable there

case on part bullish our question, your for good community But our within management support community attraction good services But maybe we really that seeing, other also too, do services to are of I'll also and can we we the a monitoring, and think segment. the and again, I remain use say, business.

going year, And to new investments technology with full over the of people either supplemental Sunday on and partners. on needs partners the both but in supplemental Again, on week. a so existing this continue who potentially to billion. how either back almost from [indiscernible] proposed Congress funded there or carry lease to moved or was this to $X night of through meet we will Again, the knows make a much

expansion I ] additional [ was think ICE. of under earmarked for Walters that detention

good what but prisons, in again, I that opportunity, just bullish with continued I be are the seeing and And So think Dave? really again, counties not to the But we're to and add business. anything to continue also think, even investment, investments. bureau that, on we for the on cities

David Garfinkle

inertia helping centers the as people more Federal and some Yes, of residential that's the of communities I from whether to the reentry Prisons expand into trying assimilate. of due them prison out there's Bureau to utilization infrastructure, get think well to

administration. be getting some began So kind the some last seems be there more that could funding of there legs to And think it during I now.

surprised saw to So we I RCs early like that. alternatives wouldn't programs, be release BOP expand by and detention if the utilization its of things

lot of there. accommodate So we a lot need. I upside a capacity there's that have of community that within agree And portfolio to our

Operator

Ludtke Kirk Imperial And our Capital. next question from from the line of comes

Kirk Ludtke

Just a couple of follow-ups.

that beds, funding hear I XX,XXX I that ICE the On bill did population did included for immigration the correctly? hear

Damon T. Hininger

of heard That's a of that this out XX,XXX that correct. Senate and out came the and Yes. times where you the the looking of funding of the during this population Sunday bill week noted couple taking they the know, that negotiators as you were was beds. course for night, bill at The up

So talking points [indiscernible] the that's of been Sunday. bill on the with part

obviously well that as know probably on I, strong views the you bill house. about as some again, So there's

bill, So thin but here that's the just was handicap the supplemental. again, indicate, what to not relative we to least it to want making at that

Kirk Ludtke

Got helpful. it. And did where peak your pre-pandemic? Well, ICE that's population

Damon T. Hininger

Dave. Pre-pandemic, keep here, honest me

summer the we XX,XXX. in got think I 'XX, near of

Kirk Ludtke

XX,XXX From today?

Damon T. Hininger

Yes.

Kirk Ludtke

-- remember the funded it. you then? back were beds do what And many Got how

David Garfinkle

around -- at don't less less were if flooded probably than that. know that was know was it I level. they nationwide that are I It I populations necessarily know XX,XXX.

Damon T. Hininger

now, Yes. Actually, I was think about it. pretty I it meaningful think if

Kirk Ludtke

Interesting.

on California then And City. helpful. That's Okay.

started just months, expires of that in couple down. So ramp a lease the now has the state facility to

Damon T. Hininger

they've Yes, through and activation, the have. They going of think, population the staffing. both for kind I been steps

Kirk Ludtke

as are use limitations facility for. it. you And Okay. legal that to Got can any there what

Damon T. Hininger

had there think head, and my we're [ I don't top California There obviously of was no But then are the ] a issues off know the in past. obviously, couple. ICE there, -- there's I on and in right we've housing a few.

So.

David Garfinkle

you're... . Would be inmate that type of the

Damon T. Hininger

Yes. can limitations [indiscernible] probably you my offline that. the . on up we like classification follow some on right. don't off Probably with I Maybe top there's or I head, of But that. that's maybe expect know something

Kirk Ludtke

my Harris County Google County, they Got that's over between a came And you Maps nice just Harris then -- because XXX that? and And Can if why about? on miles Tallahatchie. win. correctly, it. expand that how on is that's And working

what maybe how curious just came expand I'm So on Tallahatchie? that why about and

Damon T. Hininger

sir. Yes, Yes.

obviously, system is existing the So maybe they're needs we playbook some part potential what's existing of needs that experiencing. we're the utilization monitoring only should County with challenges partner, that, partners, but Harris capacity, like partners always -- or the not with I their say, also

where the think really is that's And I -- company got Houston started.

first very years Houston Our ago. was contract almost in X

and county well. that really that know we city really, So

think And so had just plant. they expressed some with physical they issues I

had They really the outcomes overcrowding. couple here last of think, difficult I of in because some, years some

[indiscernible] And system. some have XX,XXX there to people staffing it's pretty a think and think were their It's big and I County. Obviously, Houston Harris big this, almost in system. system. I Metropolitan a issues. jail they

and is of question to is population look the about your population that what us and of be the would at suited part distance individuals. of do last this So well allowed to the part your kind is say, that okay, entire to the

And to whatnot jail to and in the office Sheriff's go every connect of them Tallahatchie appropriate a as them setting County. conferencing in keep county. Harris don't or to with on video with we'll course, court here work and go that to transportation, could day They of the courts be have

of the said plays of kind Is Houston. there of parts Dave. distance we be add that population helping deal again, So a in suited miles you'd the large, distance got from system that, well again, again, the with you lot with would the them a from on of that to XXX playbook anything of But some issues. there's

David Garfinkle

great facility. a is Tallahatchie mean occupied. I Yes. It's about XX%

X quickly, where immediately with the we X location customers we bring could need I in could the there's about facility. that mean, -- So satisfy in detainees probably or different and the

a a facility with job the with customer, moved our in Montana there. we like fantastic inmates So we could Arizona, facility locations new did doing of a XXX of exception accommodate handful Montana. they're Saguaro what so probably But is Saguaro in where there.

speculatively. look a have on towards where a customer. -- We that new it's County, kind Obviously, we could like there of staff a open now But advance we but Harris of to facility where do left. accommodate those up have location that demand. wouldn't at dozen and it's It's accommodate to in see activating point many new we we visibility Tallahatchie of and expensive the and facility a getting contract aren't we a to do -- great probably is it's have to XXX, if facilities, may

Operator

our next comes Wedbush. And Brian question from Violino the from line of

Brian Violino

in you quickly, how Just us when XXXX? about those will contribute bit a fourth quarter. anticipate give quite talked EBITDA the state Could in the much and contracts contracts three you local you're you

David Garfinkle

facility disclosed that haven't but One was We then like largely Arizona as one mentioned, was Tallahatchie, and just was occupied that, the a they're XX% occupied. in different I probably profiles.

the that. it's in So maybe of a EBITDA million year, over two between bit few little dollars a a of probably them north

Brian Violino

Got it.

over additional that can you bed guess seat, for than more for to to are like there within has be there's DHS seems your need supplemental hard number. see reallocated funding maybe it given reallocating And been funding anticipate XX,XXX answer from bed to ICE or counts your Okay. funds additional but much that really we're rise we perspective, that then the I from you do do dollars today. DHS

Damon T. Hininger

right. your the you're last That's in hard really year. they to the part exactly of playbook first Again, Well, answer. play had that question,

out think of or reallocation indicated the know, last doing and sector June came [ a were you May of funding. year As ] I they

that do to And for the the said what ability, it have So say. hard they was. I again? even can they they me if do don't really be publicly know amount

back from a it, but came I just think them sector heard out think ever saying doing I number. I don't the we're

they're quarter. little currently the XX,XXX. at that earlier to population, XX,XXX, about number as during consistent Dave a funded I said, the again, fourth officially XX,XXX. was at the Again, bit think question Again, that pretty you're

You bit down up seasonality. it's and had again little a because

We if the just end for funding until XX,XXX. to that and see. And rest go them fiscal do think to do Maybe the I question, So the have of say through think year, will of do full above they they like go funded March of at they be this could Again, the do February to potential wait funding talked full full is ahead they that come could and And or could meaningfully I full end of for -- and year to again, and and year. just feel the year ability additional again, last that, part we'll the I'll additional supplemental. got they've your it funding. the about require budget

increase have could Do funding. to option, be they add you different these discussions So obviously, these too. that's we'll still all Dave? different an where Again, anything vehicles to watching, for that

David Garfinkle

No, right. Great. that's

Brian Violino

And a Great. could. just then of note. on similar Kind one one, if I last

terms [ City? waiting something potentially of can at looking be ICE supplemental looking they your In of outside that funding idle think facilities, that is without idle you of at involved some facilities Cal ] with that

Damon T. Hininger

to and their Well, through on what are and license members we're the little I direction guess X ] guess, [ have getting about daily in needs we've we I'll mean this we had from obviously, and say conversations from DHS mean worked the bit to so Congress. we're I somewhat last, been discussion administration in obviously, years, and of it's I staffing. year a it I way.

to where capacity, CapEx based decisions or So did that felt we're what felt in in went -- on constant would go then do get conversation the we know, certain some with always investments either we ICE got on up, like and were that's that. for staffing X,XXX. we we again, be We that's staff. away last make do we at to of vacant facilities. when like of that, we having We bit make And and/or information our capabilities place Title a steps on little earning either before a for populations needed to on we've as if facilities And XX year. prepared need you

working what I them normal also with from those of and get have lot discussions to part that continuing of of customer, a internally our eyes on we direction the lot And we're So know that's steps behavior see prudent different them. of as -- but they acknowledge also of prepare some lot best -- there just as with to just a I kind But do on want future a add and any Dave? make be saying, hear that, for we our appropriate. they're anything appropriate you'd proactive to to demand. that to but but to also I stakeholders, guess,

David Garfinkle

that into into from Yes, for funding then because I'd facilities say multiple example, consolidate if transferring wanted one require populations would a and they from not of local of number facilities, facility. one dollars to you're consolidate just jails incremental them our

you taken incremental So that. a on but an where we facility a facility that particular activate ICE auto on could it conversations could funding. action have at be yet, haven't potential had with I an without

Damon T. Hininger

a good point. That's

Operator

Greg question Gibas line Securities. And comes our Northland from from next the of

Gregory Gibas

in size dynamics the respect split change to in if a changing assumptions could could not you compensation you a little bit maybe But changes is like increased with kind for implicit it just elaborate occupancy about that if per per bed really between on and your talk there. of more population revenue the guidance. wondering was ICE any I versus forecasting sounds bed. occupancy

David Garfinkle

just of not Yes, getting talked in of to the higher about magical than past XX%. that XX%. is on north stable, fairly calls forecast occupancy much We've front, the occupancy so pre-pandemic

guidance the the include from stable, we a does in XX% that. slight probably fourth maybe achieved So certainly not occupancy It's the quarter. increase

populations bringing that population we're executed already the new XXXX as second four saw of number of would well in that increases the under contracts. have as -- existing the in we half contracts to -- a that the respect some under we during states and With that actually under include brought from or

increases to occupancy. contribute will those So in

take per fiscal July the per years begin. diem On in since state our customers diem from rate, their most of particularly increases that's effect when our

beginning our needs we per So and conversations talking diem be our about haven't if costs. inflationary staffing related engaging to already for we'll with partners, increases other those

the talk diem visibility that in diem -- now. a stipulated our of that get have take include to forecast. put which per in increases approach those conservative we increases we're going contracts pretty hard case, increases So when obviously, about We per in we to them, per several diem

Others dependent appropriations. are on

particular history a that. or So customer, not may may depending with on we the include

most Our hand, Federal per contracts them those contracts. on the diem other of have built increases into

into so built the guidance would as be well. And they

increases, increase XXXX, provide say during as wage a pretty average the continue successful to need to maintain from increases staff our per diem year that pandemic. diem provided So to probably were we particularly really our get I'd per And we in year. Last increases we per and diem margins states appropriately. hadn't pay quite a

had we're ground 'XX, during I lost were pandemic. for forecasting So 'XX as wouldn't say we some up as making good year in a we the in XXXX because

Gregory Gibas

higher percentage kind you in And more you based, -- wanted as going local to nice mostly margin to ask wanted some staffing just that up That's to particularly of there sense. I of expenses, helpful. of tailwind it the Great. normalized? very And to more continued of upside see if was permanent. I a follow Or like see just and from Makes improvement reducing kind so seemed a for do temporary XXXX? normalization that profitability already

David Garfinkle

normalize a question. made a some both. of to opportunities we but lot That's of facilities have expense where are say a bit some There structure, I'd great the we've progress. still little

prepared XXXX complete. There's some a in reduce you And XXXX to I we bit those out I where fourth reductions, quarter still could fourth remarks. opportunities compared say my significant pointed quarter travel further. totally as expenses of But wouldn't with back it's go so of if the

We will also too. staff, be hiring some additional

So normalize there's the I'd put and expenses. to opportunities takes But there's overall, some on still that. say

Operator

further session Instructions] remarks. Damon for [Operator to And question-and-answer to Hininger conclude this hand the today's of program program. back any I'd does like the

Damon T. Hininger

great results. thank in and investors, confidence and our talk your on our first investment to you the in thank you for forward company. so you all you May Have talking for quarter and much, We about Thank joining to a trust us very day, we our your today especially and call to look as everyone.

Operator

This Thank you, ladies the and gentlemen, does for your in conference. conclude participation today's program.

day. You may Good disconnect. now

CoreCivic (CXW) 8 Feb 242023 Q4 Earnings call transcript