[Part I](index=7&type=section&id=PART%20I) [Business](index=7&type=section&id=Item%201.%20Business) CoreCivic operates three segments—Safety, Community, and Properties—providing correctional, reentry, and real estate solutions, with **56% of 2021 revenue** from federal agencies, and recently revoked its REIT status for financial flexibility - CoreCivic is organized into three main business segments: CoreCivic Safety, CoreCivic Community, and CoreCivic Properties, providing corrections, reentry, and real estate solutions to government partners[18](index=18&type=chunk)[26](index=26&type=chunk) Segment Net Operating Income Contribution (FY 2019-2021) | Segment | 2021 | 2020 | 2019 | |------------|---------|---------|---------| | Safety | 85.5% | 82.2% | 85.2% | | Community | 3.3% | 3.4% | 5.0% | | Properties | 11.2% | 14.4% | 9.8% | - Effective January 1, 2021, the company revoked its REIT election to become a taxable C Corporation, discontinuing its quarterly dividend to prioritize using free cash flow for **debt reduction**[24](index=24&type=chunk)[25](index=25&type=chunk) Revenue from Federal Agencies (FY 2019-2021) | Year | Federal Revenue (% of Total) | |------|------------------------------| | 2021 | 56% | | 2020 | 52% | | 2019 | 51% | Average Compensated Occupancy (FY 2019-2021) | Facility Type | 2021 | 2020 | 2019 | |---------------------------|-------|-------|-------| | CoreCivic Safety facilities | 73% | 75% | 82% | | CoreCivic Community facilities| 55% | 62% | 76% | | **Total** | **72%** | **74%** | **82%** | [Operating Procedures and Offender Services](index=9&type=section&id=Operating%20Procedures%20and%20Offender%20Services) CoreCivic offers extensive evidence-based reentry programs and maintains high operational standards, with **95% of eligible facilities ACA accredited** and regular internal audits ensuring compliance - CoreCivic offers a wide range of reentry programs including education, vocational training, substance abuse treatment, and life skills to prepare individuals for successful reentry into society[33](index=33&type=chunk)[34](index=34&type=chunk) - The company has established partnerships to enhance its educational offerings, including a Construction Academy with HBI, a Culinary Training Program with Trinity Services Group, and a software coding program with Persevere[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - Approximately **95% of eligible facilities** operated by CoreCivic are accredited by the American Correctional Association (ACA), with an average reaccreditation score of **99.6% in 2021**[57](index=57&type=chunk) - An internal Quality Assurance Division (QAD) conducts annual, often unannounced, audits to ensure facilities meet partner requirements and accrediting standards, supplementing oversight from government partners[60](index=60&type=chunk)[61](index=61&type=chunk)[64](index=64&type=chunk) [Business Development](index=14&type=section&id=Business%20Development) Business development, heavily reliant on federal customers, faces challenges from President Biden's Executive Order and COVID-19 policies, but seeks long-term opportunities in modernizing public correctional infrastructure - President Biden's January 2021 Executive Order directs the Department of Justice (DOJ) not to renew contracts with private operators, impacting the Bureau of Prisons (BOP) and U.S. Marshals Service (USMS), but not Immigration and Customs Enforcement (ICE), which is under the Department of Homeland Security[70](index=70&type=chunk) Revenue Contribution from Key Federal Agencies (FY 2021) | Agency | Revenue (USD Million) | % of Total Revenue | |--------|-----------------------|--------------------| | USMS | $433.6 | 23% | | ICE | $552.2 | 30% | | BOP | $40.6 | 2% | - The company is actively marketing facilities where USMS contracts expired, such as the West Tennessee and Leavenworth centers, to other government agencies[71](index=71&type=chunk) - COVID-19 policies, particularly Title 42 which denies entry at the southern border, have reduced ICE detention populations; the reversal of this policy could increase demand for detention capacity[73](index=73&type=chunk)[76](index=76&type=chunk) - Long-term growth strategy focuses on providing solutions for aged or inefficient public correctional infrastructure, as demonstrated by a new contract with Arizona to replace an outdated state prison[82](index=82&type=chunk) [Facility Portfolio](index=20&type=section&id=Facility%20Portfolio) As of December 31, 2021, CoreCivic's portfolio includes **46 Safety facilities (69,407 beds)**, **26 Community centers (5,049 beds)**, and **10 Properties (1.8 million sq ft)**, with some facilities subject to government purchase options Facility Portfolio Summary (as of Dec 31, 2021) | Segment | Number of Facilities/Properties | Total Design Capacity (Beds) | Total Square Footage | |---------------------|---------------------------------|------------------------------|----------------------| | CoreCivic Safety | 46 | 69,407 | N/A | | CoreCivic Community | 26 | 5,049 | N/A | | CoreCivic Properties| 10 | N/A | 1.8 million | - The portfolio includes various facility types such as correctional, detention, residential, and community corrections, categorized by security levels from minimum to maximum[92](index=92&type=chunk)[93](index=93&type=chunk) - Several facilities are subject to purchase options held by government partners, which could allow the government to acquire the facility at a predetermined price, such as depreciated book value or fair market value[104](index=104&type=chunk) [Competitive Strengths](index=28&type=section&id=Competitive%20Strengths) CoreCivic's competitive strengths include being the largest private owner of U.S. government-used real estate, offering flexible capacity and real estate solutions, and enhanced financial flexibility post-REIT revocation - CoreCivic is the largest private owner of real estate used by government agencies in the U.S., with approximately **15.1 million square feet** as of year-end 2021[110](index=110&type=chunk) - The company maintains **8,459 vacant beds** in seven prison facilities, providing immediately available capacity to meet potential customer needs[118](index=118&type=chunk) - Revoking its REIT election provides greater financial flexibility, with **debt reduction** as the first priority, followed by returning capital to shareholders and pursuing growth[128](index=128&type=chunk) - The company offers flexible real estate solutions, including leasing facilities to government agencies for them to operate, as demonstrated by agreements with New Mexico, Kentucky, Oklahoma, and Kansas[123](index=123&type=chunk) [Human Capital](index=33&type=section&id=Human%20Capital) CoreCivic's human capital strategy focuses on attracting and retaining a diverse workforce of **10,348 employees** through competitive wages, comprehensive benefits, and strong DEI initiatives Employee Demographics (2021) | Metric | Percentage/Number | |---------------------------------------------|-------------------| | Total Employees | 10,348 | | % Female | 52% | | % People of Color or Underrepresented Minorities | 57% | | % Veterans | 10% | - The company has a formal Diversity, Equity, and Inclusion (DEI) strategy led by a VP-level executive and supported by a DEI Advisory Council, with goals to create a common DEI language and a diverse leadership pipeline[150](index=150&type=chunk) - CoreCivic has been named a GI Jobs Military Friendly employer for **eleven consecutive years**[152](index=152&type=chunk) - The company has experienced labor shortages and wage pressures, responding with wage increases for most facility staff in both 2020 and 2021 to remain competitive[153](index=153&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) CoreCivic faces significant business risks from political opposition, customer concentration, and COVID-19 impacts, alongside financial risks from substantial indebtedness and challenges in accessing capital post-REIT revocation - President Biden's Executive Order directing the Attorney General not to renew DOJ contracts with private operators is a primary risk, affecting contracts with the BOP and USMS, which together accounted for **25% of 2021 revenue**[171](index=171&type=chunk) - The company is dependent on a limited number of government customers, with ICE, USMS, and BOP accounting for **56% of total revenues in 2021**[209](index=209&type=chunk) - The COVID-19 pandemic has negatively affected business by reducing ICE, USMS, and state populations due to border policies and disruptions to the criminal justice system[179](index=179&type=chunk)[181](index=181&type=chunk) - Increasing activist resistance and decisions by several major banks to stop financing the private corrections industry could impact the company's ability to obtain financing or refinance existing debt[253](index=253&type=chunk) - Significant indebtedness (**$1.55 billion as of Dec 31, 2021**) includes restrictive covenants that could limit financial flexibility and requires substantial cash flow for servicing[238](index=238&type=chunk)[241](index=241&type=chunk) [Unresolved Staff Comments](index=60&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[274](index=274&type=chunk) [Properties](index=60&type=section&id=Item%202.%20Properties) Details on the company's properties are provided in Item 1 (Business) and the Notes to the Consolidated Financial Statements - Details on the company's properties are located in Item 1 of the report and in Schedule III of the Financial Statements[275](index=275&type=chunk) [Legal Proceedings](index=60&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in legal proceedings, including a class action lawsuit regarding its Voluntary Work Program and a **$56.0 million securities class action settlement** in 2021 - The company faces a class action lawsuit alleging its Voluntary Work Program for ICE detainees violates anti-trafficking and state labor laws; the company disputes the allegations and is vigorously defending itself[687](index=687&type=chunk) - A securities class action lawsuit was settled for **$56.0 million in 2021**, with the company recognizing a net expense of **$54.3 million** after insurance recoveries; the settlement included no admission of liability[690](index=690&type=chunk)[691](index=691&type=chunk) [Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures - There are no mine safety disclosures[277](index=277&type=chunk) [Part II](index=61&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=61&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CoreCivic's common stock trades on the NYSE under "CXW"; the company discontinued its quarterly dividend in August 2020 to prioritize **debt reduction** and made no equity security purchases - The company's common stock is traded on the NYSE under the symbol CXW[280](index=280&type=chunk) - The Board of Directors discontinued the quarterly dividend in August 2020 to prioritize allocating free cash flow to reduce debt levels after revoking its REIT election[281](index=281&type=chunk) - No issuer purchases of equity securities were made[282](index=282&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) CoreCivic reported a **net loss of $51.9 million in 2021**, driven by special charges and a **2.3% revenue decrease to $1.86 billion**, with liquidity prioritizing debt reduction post-REIT conversion Financial Performance Summary (FY 2021 vs. FY 2020) | Metric | FY 2021 | FY 2020 | |--------------------------------------|----------------|----------------| | Total Revenue | $1,862.6 M | $1,905.5 M | | Net Income (Loss) Attributable to Common Stockholders | ($51.9 M) | $54.2 M | | Diluted EPS | ($0.43) | $0.45 | - The 2021 net loss was primarily driven by special charges, including **$54.3 million** for shareholder litigation, **$56.3 million** for debt refinancing, **$11.4 million** in asset impairments, and a **$138.0 million** income tax expense related to the C-Corp conversion[325](index=325&type=chunk) - The company's primary capital allocation strategy is to use free cash flow to reduce debt, followed by returning capital to shareholders and pursuing growth opportunities[412](index=412&type=chunk) - As of December 31, 2021, liquidity consisted of **$299.6 million in cash** and **$786.1 million available** under the Revolving Credit Facility[415](index=415&type=chunk) [Results of Operations](index=69&type=section&id=Results%20of%20Operations) In FY 2021, total revenue decreased **2.3% to $1.86 billion**, driven by lower state/local populations and property sales, partially offset by increased federal revenue and a **$69.3 million reduction in operating expenses** Revenue by Source (in millions) | Revenue Source | 2021 | 2020 | % Change | |----------------------------|-----------|-----------|----------| | Federal Management Revenue | $1,050.7 | $999.2 | 5.2% | | State Management Revenue | $602.1 | $636.3 | (5.4%) | | Local Management Revenue | $51.5 | $81.7 | (37.0%) | | Lease Revenue | $68.9 | $93.1 | (26.0%) | | **Total Revenue** | **$1,862.6**| **$1,905.5**| **(2.3%)** | Key Performance Indicators (Facility Operations) | Metric | 2021 | 2020 | |------------------------------------|---------|---------| | Revenue per compensated man-day | $89.86 | $84.71 | | Operating expenses per compensated man-day | $65.67 | $64.06 | | Operating margin | 26.9% | 24.4% | | Average compensated occupancy | 71.5% | 74.1% | - The decrease in state and local revenue was primarily driven by lower inmate populations resulting from government actions to prevent the spread of COVID-19[337](index=337&type=chunk)[341](index=341&type=chunk) - Operating expenses decreased by **$69.3 million**, mainly due to lower staffing levels corresponding to lower occupancy and the absence of **$13.8 million** in incremental COVID-19 expenses (like hero bonuses) incurred in 2020[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk) [Liquidity and Capital Resources](index=84&type=section&id=Liquidity%20and%20Capital%20Resources) CoreCivic's liquidity is supported by **$299.6 million cash** and a **$786.1 million credit facility**, with its capital strategy prioritizing debt reduction, including **$675.0 million in new senior notes** and asset sale proceeds, resulting in **$1.55 billion total debt** at year-end - The company's capital allocation strategy prioritizes debt reduction, followed by returning capital to shareholders and pursuing growth, enabled by the revocation of its REIT status[411](index=411&type=chunk)[412](index=412&type=chunk) - In 2021, CoreCivic issued **$675.0 million in 8.25% senior notes due 2026** and used proceeds to redeem its **5.0% senior notes** and repurchase a portion of its **4.625% senior notes**, extending its debt maturity profile[395](index=395&type=chunk)[398](index=398&type=chunk)[418](index=418&type=chunk) - Net proceeds of **$152.8 million** from the sale of 47 non-core assets were used to pay down debt, primarily on the Revolving Credit Facility[425](index=425&type=chunk) Debt Summary (as of Dec 31, 2021) | Debt Instrument | Principal Outstanding (USD Million) | |------------------------------|-------------------------------------| | Revolving Credit Facility | $0.0 | | Term Loan A | $170.0 | | Term Loan B | $128.8 | | 4.625% Senior Notes (2023) | $173.7 | | 8.25% Senior Notes (2026) | $675.0 | | 4.75% Senior Notes (2027) | $250.0 | | Non-Recourse Mortgage Notes | $154.5 | | **Total Debt** | **$1,551.9** | [Quantitative and Qualitative Disclosures about Market Risk](index=91&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its variable-rate debt, where a **100 basis point increase** would have raised 2021 interest expense by **$3.0 million** - The primary market risk is from interest rate changes on variable-rate debt, including the Revolving Credit Facility, Term Loan A, and Term Loan B[450](index=450&type=chunk) - A **100 basis point increase** in interest rates would have increased interest expense by **$3.0 million in 2021**[450](index=450&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with an unqualified opinion from Ernst & Young LLP - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[456](index=456&type=chunk) - Management's report on internal control over financial reporting concluded that the company's internal controls were effective as of December 31, 2021[457](index=457&type=chunk)[460](index=460&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of 2021[462](index=462&type=chunk) [Part III](index=96&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement - Required information for this item is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement[475](index=475&type=chunk) [Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement - Required information for this item is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement[477](index=477&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=96&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2022 proxy statement, with **2,812,906 securities** available for future issuance under approved equity compensation plans as of December 31, 2021 - Required information for this item is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement[478](index=478&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2021) | Plan Category | Securities to be Issued Upon Exercise of Outstanding Options | Weighted-Average Exercise Price | Securities Remaining Available for Future Issuance | |---------------------------------------------|--------------------------------------------------------------|---------------------------------|----------------------------------------------------| | Equity compensation plans approved by stockholders | 300,741 | $22.77 | 2,812,906 | [Certain Relationships and Related Party Transactions and Director Independence](index=97&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%20and%20Director%20Independence) Information on certain relationships, related party transactions, and director independence is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement - Required information for this item is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement[482](index=482&type=chunk) [Principal Accounting Fees and Services](index=97&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement - Required information for this item is incorporated by reference from the 2022 Annual Meeting of Stockholders proxy statement[483](index=483&type=chunk) [Part IV](index=98&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=98&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides a comprehensive list of all financial statements, schedules, and exhibits filed as part of the Annual Report - This section contains a comprehensive list of all financial statements, schedules, and exhibits filed with the Form 10-K[486](index=486&type=chunk)

CoreCivic, Inc. (NYSE:CXW) Q4 2021 Earnings Conference Call February 10, 2022 11:00 AM ET Company Participants Cameron Hopewell - MD, IR Damon Hininger - President, CEO & Director David Garfinkle - EVP & CFO Conference Call Participants Joseph Gomes - NOBLE Capital Markets Kirk Ludtke - Imperial Capital Ben Briggs - StoneX Financial Marla Marin - Zacks Investment Research Jordan Sherman - Ranger Global Real Estate Advisors Michael Christodolou - Inwood Capital Management Operator Good morning. My name is An ...

CoreCivic, Inc. (NYSE:CXW) Q3 2021 Earnings Conference Call November 9, 2021 11:00 AM ET Company Participants Cameron Hopewell - Managing Director of Investor Relations Damon Hininger - President & Chief Executive Officer David Garfinkle - Chief Financial Officer Conference Call Participants Joe Gomes - NOBLE Capital Brian Violino - Wedbush Securities Kirk Ludtke - Imperial Capital Ben Briggs - StoneX Financial M. Marin - Zacks Michael Christodolou - Inwood Capital Operator Good morning. My name is Eli and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-16109 CORECIVIC, INC. (Exact name of registrant as specified in its charter) MARYLAND 62-1763875 (State or other jurisdiction of inco ...

Corecivic, Inc. (NYSE:CXW) Q2 2021 Earnings Conference Call August 10, 2021 11:00 AM ET Company Participants Cameron Hopewell - MD, IR Damon Hininger - President, CEO & Director David Garfinkle - EVP & CFO Conference Call Participants Joseph Gomes - NOBLE Capital Markets Marla Marin - Zacks Investment Research Benjamin Briggs - StoneX Financial Inc. Henry Coffey - Wedbush Securities Jordan Sherman - Ranger Global Operator Good morning, My name is Cassey, and I will be your conference operator. As a reminder ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-16109 CORECIVIC, INC. (Exact name of registrant as specified in its charter) MARYLAND 62-1763875 (State or other jurisdiction of incorpora ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-16109 CORECIVIC, INC. (Exact name of registrant as specified in its charter) MARYLAND 62-1763875 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-16109 CORECIVIC, INC. (Exact name of registrant as specified in its charter) MARYLAND 62-1763875 (State or other jurisdiction of incorporation or organization)(I.R.S. Employer Id ...

CoreCivic, Inc. (NYSE:CXW) Q4 2020 Earnings Conference Call February 11, 2021 8:30 AM ET Company Participants Cameron Hopewell - MD, IR Damon Hininger - President, CEO & Director David Garfinkle - EVP & CFO Conference Call Participants Joe Gomes - NOBLE Capital Markets M. Marin - Zacks Investment Jordan Sherman - Ranger Global Real Estate Advisors Dane Bowler - 2nd Market Capital Operator Good morning. My name is David, and I will be your conference operator. As a reminder, this call is being recorded. At t ...

Financial Performance - In Q3 2020, the company's revenue was $468 million, a decline of 7.9% compared to the same quarter last year, primarily due to impacts from COVID-19 [6][7] - Normalized funds from operations (FFO) decreased to $0.52 per share from $0.70 per share in the prior year quarter, largely affected by lower utilization levels from Immigration and Customs Enforcement (ICE) [7][8] - The company generated $0.22 of EPS and $0.28 of adjusted EPS for the quarter, with adjusted EBITDA at $94.6 million [36] Business Segment Performance - The CoreCivic Safety segment experienced the majority of the revenue decline, while the CoreCivic Community segment was also impacted as government partners released lower-risk residents [6][7] - Occupancy in the Safety and Community facilities declined from 75% in Q2 to 71% in Q3, resulting in a decrease of 3,178 average daily resident populations [46] - The Property segment saw occupancy increase to 99% from 97% in the previous quarter, with 100% of rent collected [47] Market Opportunities - The company was awarded multiple new contracts during Q3, including one with the U.S. Marshals Service for the Cimarron facility, which is expected to improve earnings with annual revenues projected at approximately $30 million [10][12] - New contracts with the Idaho Department of Correction and the Federal Bureau of Prisons for reentry services were also highlighted, representing potential incremental utilization of approximately 3,000 beds [13][14][15] - The company is engaged in negotiations to build and lease new correctional facilities in Alabama, which could represent approximately 7,000 beds [17] Strategic Direction - The company plans to prioritize debt reduction as part of its capital-allocation strategy, having repaid over $100 million of net debt in Q3 [25][26] - The decision to revoke its REIT status and convert to a taxable C corporation is aimed at providing more flexibility in capital allocation [25][29] - The company is exploring the sale of non-core real estate assets, which could generate up to $150 million in net proceeds to accelerate its capital-allocation strategy [28][50] Management Commentary - Management acknowledged the ongoing challenges posed by COVID-19 but emphasized the company's strong underlying financial performance and continued execution of its strategy [24][51] - The company remains optimistic about future opportunities in the market, particularly in modernizing correctional facilities post-pandemic [20][21] - Management expressed confidence in the stability of its federal contracts, despite potential changes in the political landscape following the recent elections [30][64] Other Important Information - The company has maintained strong cash flow, generating $107.2 million from operating activities in Q3, allowing for significant debt repayment [43][44] - The company has no material capital commitments and expects to achieve a 10% reduction in maintenance capital expenditures [48][49] - The management team is aligned with shareholders and is considering share repurchases as part of its capital allocation strategy [29][72] Q&A Session Summary Question: Population levels stabilization - Management noted that while ICE populations have continued to decline, the rate of decline has slowed, and some state populations have shown slight increases [58][59] Question: Contracts up for renewal in Q4 - Management indicated that there are no significant contracts up for renewal in Q4, with a strong retention rate observed in Q3 [60][61] Question: Dividend suspension and REIT status - Management confirmed that they do not anticipate any additional distributions required this year, maintaining their position regarding REIT status [62][63] Question: Impact of election results on business - Management provided insights on how potential changes in administration could affect federal contracts, emphasizing the continued need for private sector capacity [64][66][69] Question: Consideration for stock buybacks - Management acknowledged the potential for share repurchases if non-core assets are sold, but emphasized the current focus on debt reduction [72]