Facility Operations and Capacity - CoreCivic operates 44 correctional and detention facilities with a total design capacity of approximately 66,000 beds, and 23 residential reentry centers with a capacity of approximately 5,000 beds as of December 31, 2022[24] - CoreCivic owns 8 properties leased to government agencies, totaling 1.8 million square feet[24] - CoreCivic Safety segment operated 44 facilities with a total design capacity of 66,399 beds, generating 84.1% of total segment net operating income in 2022[108] - CoreCivic Community segment had 23 residential reentry centers with a design capacity of 4,669 beds, contributing 3.9% of total segment net operating income in 2022[109] - CoreCivic Properties segment owned 8 properties totaling 1.8 million square feet, generating 12.0% of total segment net operating income in 2022[110] - CoreCivic owns or controls approximately 56% of all privately owned prison beds and manages nearly 38% of all privately managed prison beds in the United States[112] - CoreCivic has 8,459 beds at seven prison facilities that are vacant and immediately available for use[116] - CoreCivic entered into a three-year lease agreement with the state of New Mexico for the 596-bed Northwest New Mexico Correctional Center, with extension options through October 2041[121] - CoreCivic signed a 20-year lease agreement with the Kansas Department of Corrections for a 2,432-bed correctional facility in Lansing, Kansas, completed in January 2020[122] - CoreCivic's CoreCivic Safety segment has 8,699 idle beds available for growth opportunities[108] - CoreCivic's CoreCivic Community segment had 450 idle beds as of December 31, 2022, with one facility classified as held for sale[109] - CoreCivic owns or controls approximately 14.6 million square feet of real estate used by government agencies, providing steady and predictable cash flows[107] - As of December 31, 2022, the company owned or controlled 95% of its portfolio of 75 facilities, with weighted average ages of 23, 28, and 21 years for CoreCivic Safety, CoreCivic Community, and CoreCivic Properties segments, respectively[124] - Company operates 44 correctional and detention facilities with a total design capacity of approximately 66,000 beds, 40 of which are owned[24] - Company owns and operates 23 residential reentry centers with a total design capacity of approximately 5,000 beds[24] - Company owns 8 properties leased to government agencies, totaling 1.8 million square feet[24] - CoreCivic Safety segment consists of 44 correctional and detention facilities, while the Community segment includes 23 residential reentry centers[33] Financial Performance and Risks - The company faces risks from fluctuations in occupancy levels, which could decrease revenues and profitability[21] - CoreCivic is dependent on government appropriations, and its operations may be negatively affected by budgetary challenges or government shutdowns[21] - The COVID-19 pandemic has had, and may continue to have, negative effects on CoreCivic's business, potentially impacting its financial condition and cash flows[21] - CoreCivic is subject to risks related to contract terminations, non-renewals, or competitive re-bids of government contracts[21] - The company may incur significant start-up and operating costs on new contracts before receiving related revenues, impacting cash flows[21] - CoreCivic depends on a limited number of governmental customers for a significant portion of its revenues[21] - The company is subject to risks associated with technological changes or resistance to electronic monitoring products, which could render its products obsolete[21] - CoreCivic may face costly product liability claims from the use of its electronic monitoring products, potentially damaging its reputation and marketability[22] - Federal revenues decreased by 5.3% from $1,050.7 million in 2021 to $994.7 million in 2022, primarily due to a decrease in detainees at the La Palma Correctional Facility and the termination of the BOP contract at the McRae Correctional Facility[73][74] - State revenues increased by 11.1% from $602.1 million in 2021 to $669.2 million in 2022, driven by a new management contract with the state of Arizona for up to 2,706 inmates at the La Palma facility[75] - The BOP contract at the McRae Correctional Facility, which accounted for 2% ($37.8 million) of total revenue in 2022, expired on November 30, 2022, and was not renewed[67] - USMS and ICE accounted for 22% ($403.9 million) and 29% ($527.3 million) of total revenue in 2022, respectively[67] - The La Palma Correctional Facility transitioned from an ICE population to a state of Arizona population, reducing ICE detainees from approximately 1,800 to zero[73] - The company completed the sale of the McRae Correctional Facility in August 2022 and leased it through November 2022 to fulfill BOP obligations[67][73] - Two USMS contracts are set to expire in September 2023 and September 2025, with uncertainty around renewal or replacement[69] - The state of Tennessee generated 10% of total revenue in 2022, reflecting growth in state inmate populations and per diem increases[75] - Occupancy in correctional and detention facilities remains depressed due to COVID-19, Title 42, and other government-imposed restrictions[76] - The company secured a new contract with the state of Arizona for up to 2,706 inmates at the La Palma Correctional Center, the largest state prison contract awarded to the private sector in over a decade[77] - Sold the 1,978-bed McRae Correctional Facility for a gross sales price of $130.0 million, generating net proceeds of $129.7 million and a gain on sale of $77.5 million[82] - Transitioned populations at the 3,060-bed La Palma Correctional Center from ICE to Arizona state residents, with a new contract for up to 2,706 inmates[82] - Renewed 8 out of 9 management contracts scheduled to expire in 2022[82] - Completed the sale of two idled facilities and an under-utilized facility, generating aggregate net sales proceeds of $10.2 million[82] - Entered into a Third Amended and Restated Credit Agreement with an aggregate principal amount of $350.0 million, extending maturity to May 2026[85] - Repurchased 6.6 million common shares at an aggregate cost of approximately $74.5 million under a $225.0 million share repurchase program[85] - As of December 31, 2022, the company had cash on hand of $149.4 million and $233.2 million available under its New Revolving Credit Facility, with a total weighted average effective interest rate on all outstanding debt of 7.1%[128] - The company generated $153.6 million in cash through operating activities for the year ended December 31, 2022[128] - The company's total weighted average maturity on all outstanding debt was 4.9 years as of December 31, 2022[128] - The company's fixed charge coverage ratio and debt leverage ratio were both 3.2x for the year ended December 31, 2022[128] - CoreCivic's total segment net operating income for 2022 was divided as follows: Safety (84.1%), Community (3.9%), and Properties (12.0%)[31] - Federal correctional and detention authorities accounted for 54% of CoreCivic's total revenue in 2022, down from 56% in 2021 and 52% in 2020[31] - The contract renewal rate for CoreCivic's owned or controlled facilities was 95% over the five years ended December 31, 2022[32] - Average compensated occupancy rates for CoreCivic Safety facilities were 71% in 2022, down from 73% in 2021 and 75% in 2020[34] - CoreCivic Properties segment's average occupancy was 100% in 2022, consistent with 2021 and up from 99% in 2020[35] - Competition in the correctional and detention industry is based on bed availability, cost, quality of services, and reputation, with competitors including The GEO Group, Inc. and Management and Training Corporation[171] - Revenue from facilities is affected by demand for beds, general economic conditions, and population age[171] - Company faces risks from government policy changes, including potential non-renewal of contracts due to executive orders impacting private prison operations[15] - Occupancy fluctuations and competition may adversely affect operating revenue[171] - Company is subject to risks from government budget constraints, contract terminations, and inflation, which could impact per diem rates and occupancy[15] - COVID-19-related policies, such as Title 42, may impact operations and revenue due to ongoing litigation and government actions[15] - Company's ability to secure new contracts and manage facilities depends on factors such as government appropriations, contract compliance, and public perception[21] Educational and Reentry Programs - The company introduced MaxxContent, a custom online Learning Management System, as a pilot program in 2022 at multiple facilities[42] - Inmates participating in correctional education programs were 28% less likely to recidivate compared to those who did not participate[40] - The company partnered with Felon Education Project in 2022 to introduce a business startup course for inmates[42] - Inmates who completed addiction treatment in prison had significantly lower recidivism levels, according to a 2016 study[43] - In 2022, the company partnered with Pivot Technology School to pilot a five-month technology career program at Jenkins Correctional Center in Georgia, focusing on computer coding and data analytics[45] - The company expanded its post-secondary educational offerings with Ashland University, enabling offenders to obtain Associate's or Bachelor's degrees in General Studies, Communication Studies, or Interdisciplinary Studies at no cost through Pell Grant funding[45] - Since 2016, the company has operated state-of-the-art Diesel Maintenance and Welding programs at Coffee and Wheeler facilities in Georgia, allowing students to earn trade certificates from nearby community colleges[45] - In 2021, the company launched the "Go Further Release" program in Denver, Colorado, providing stabilization services and reentry coaching to individuals being released from facilities[47] - In 2022, the company received approval from the GDOC to implement the Go Further Release program at Coffee, Jenkins, and Wheeler facilities, partnering with Life Empowerment Enterprises[47] - The company's community corrections facilities offer housing and programs focused on employment, job readiness, life skills, and substance abuse treatment, aiming to reduce recidivism[49] - The company provides non-residential correctional alternative services, including electronic monitoring and case management, under its CoreCivic Community segment[51] - Introduced MaxxContent as a pilot program at five correctional centers, offering online learning management system with life skills, mental health, financial literacy, GED preparation, communications, workforce skills, and reentry preparation[81] - Partnered with Felon Education Project and Pivot Technology School to introduce pilot programs focused on business education and technology career training at correctional facilities[82] - CoreCivic introduced MaxxContent, a custom online Learning Management System, as a pilot program in 2022 at five facilities[42] - CoreCivic partnered with Felon Education Project in 2022 to introduce a business startup course at Wheeler Correctional Facility[42] - CoreCivic's Residential Drug Abuse Program aims to reduce recidivism, with studies showing lower recidivism levels for inmates completing addiction treatment[43] - CoreCivic's Victim Impact Programs educate offenders about the negative effects of their criminal conduct on others[44] - Partnered with Persevere to offer software coding and job readiness programs at Trousdale Turner, Red Rock, and Saguaro facilities, with Red Rock and Saguaro in Arizona[45] - Expanded programming in 2022 by partnering with Pivot Technology School to pilot Pivot Tech, a 5-month boot camp-style course at Jenkins Correctional Center in Georgia[45] - Increased post-secondary educational offerings with Ashland University, enabling offenders to earn Associate's or Bachelor's degrees at no cost through Pell Grant funding[45] - Offered an online Information Support and Services computer program at Lee Adjustment Center in Kentucky since 2018, with students earning NOCTI credentials[45] - Operated state-of-the-art Diesel Maintenance and Welding programs at Coffee and Wheeler facilities in Georgia since 2016, enabling trade certifications[45] - Introduced the "Go Further" reentry strategy in 2017, incorporating cognitive/behavioral curriculum and collaborative reentry preparation[46] - Reentry and Life Skills programs focus on job search, financial management, parenting, and relationship skills[46] - Cognitive behavioral programs aim to reduce anti-social attitudes and criminal thinking in offenders[46] Employee Training and Development - The company delivered human rights training to more than 90% of continuing employees and incorporated human rights elements in over 20 pre-service training courses[135] - In 2022, the company had a total of 10,653 employees, with 53% female and 60% people of color or underrepresented minorities (URM)[139] - CoreCivic has graduated 4,365 employees from CoreCivic University programs, with new employees receiving an average of 200 hours of pre-service and on-the-job training[145] - The company saw a 31% increase in Core Values, a 24% increase in Team Orientation, and a 35% increase in Empowerment at facilities that completed 75% or more of their action plans[147] - CoreCivic invested approximately $30.9 million in talent attraction efforts in 2022, resulting in over 66,400 job applications, a 30% increase from 2021[155] - The company employed 11,144 full- and part-time employees as of December 31, 2022, with approximately 12.7% represented by labor unions[158] - CoreCivic provided wage increases to nearly all facility staff not covered by the McNamara-O'Hara Service Contract Act in Q3 2022 to remain competitive[156] - The company achieved a 97% completion rate for two new DE&I e-learnings in 2022, with 17 new enterprise leaders completing Conscious Inclusion Training[153] - CoreCivic launched pilot BRGs (Business Resource Groups) for women, military, and multicultural interests in 2022 based on DE&I Advisory Council recommendations[152] - The company maintained COVID-19 pandemic measures, including provisions of PPE, paid leave for COVID-19 related needs, and specialized education and training[159] - CoreCivic is subject to extensive federal, state, and local regulations, including staffing requirements, reporting, and on-site monitoring by government agencies[160] - The company is significantly self-insured for employee health, workers' compensation, and general liability, with insurance expenses dependent on claims experience[170] Facility Contracts and Occupancy - Federal correctional and detention authorities accounted for 54%, 56%, and 52% of total revenue in 2022, 2021, and 2020, respectively[31] - The contract renewal rate for properties owned or controlled via long-term lease was 95% over the five years ended December 31, 2022[32] - Average compensated occupancy rates for CoreCivic Safety facilities were 71%, 73%, and 75% in 2022, 2021, and 2020, respectively[34] - CoreCivic Properties segment achieved 100% occupancy for 2022 and 2021, and 99% for 2020[35] - Trousdale Turner Correctional Center has a capacity of 2,552 and is contracted until Jun-26[93] - South Texas Family Residential Center has a capacity of 2,400 and is contracted until Sep-26[94] - Lake Erie Correctional Institution has a capacity of 1,798 and is contracted until Jun-32[92] - Northeast Ohio Correctional Center has a capacity of 2,016 and is contracted until Jun-32[92] - Houston Processing Center has a capacity of 1,000 and is contracted until Aug-23[94] - Laredo Processing Center has a capacity of 258 and is contracted until Jun-23[94] - T. Don Hutto Residential Center has a capacity of 512 and is contracted until Jul-23[94] - Webb County Detention Center has a capacity of 480 and is contracted until Feb-23[94] - The company experienced customer retention of approximately 95% at facilities it owned or controlled via long-term lease over the previous five years[125] - The company was awarded a new management contract from the state of Arizona for up to 2,706 inmates at its 3,060-bed La Palma Correctional Center, with the transfer of inmates completed in Q4 2022[123]

Financial Data and Key Metrics Changes - In Q4 2022, the company generated revenue of $471.4 million, a decline of only 0.1% compared to the prior year quarter [44] - Normalized funds from operations (FFO) were $49.1 million or $0.42 per share, down from $57.8 million or $0.48 per share in Q4 2021 [14] - The company reported net income of $0.21 per share and adjusted earnings per share of $0.22 [64] - The average utilization of facilities in Q4 was 66%, up from 50% in Q3 2022 [17] Business Line Data and Key Metrics Changes - The La Palma facility transitioned from federal to state contracts, resulting in a significant increase in workforce and service scope [5] - The transition at La Palma contributed to a $13.1 million or 2.7% reduction in revenue in Q4 compared to the prior year [14] - Occupancy in safety and community facilities was 71.1% in Q4 2022, slightly down from 72.5% in the prior quarter [36] Market Data and Key Metrics Changes - Utilization by federal partners, particularly ICE, increased nearly 26% in October 2022 [22] - Despite improvements, overall ICE detainee populations remain well below historical levels due to ongoing Title 42 restrictions [93] Company Strategy and Development Direction - The company aims to diversify away from prison contracts with the Bureau of Prisons (BOP) and is exploring new contracts with various government partners [27][56] - The capital allocation strategy focuses on reducing debt and executing share repurchase programs, with a commitment to maintaining a targeted leverage ratio of 2.25 to 2.75 times [31][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about increased demand from government partners as COVID-19 restrictions are lifted [15] - The company anticipates a gradual recovery in occupancy levels and financial performance throughout 2023, despite not expecting a surge in ICE detainees [97] Other Important Information - The company celebrated its 40th anniversary, highlighting its long-standing commitment to the correctional system [11] - The company reduced its debt balance by $287.4 million during 2022, with no debt maturities until April 2026 [31][61] Q&A Session Summary Question: Can you provide an update on guaranteed minimum contracts with ICE? - Management indicated meaningful discussions with ICE regarding future needs and potential contract adjustments, emphasizing the importance of maintaining capacity [78][79] Question: What is the status of the California facility lease termination? - Management expressed confidence in the potential reversal of the lease termination decision based on ongoing communications with state officials [84] Question: How should Title 42 be viewed in 2023? - Management acknowledged uncertainty surrounding Title 42 but indicated readiness for potential changes, emphasizing ongoing discussions with ICE [82][108] Question: What are the expectations for net operating margins in 2023? - Management expects margins to improve as occupancy increases but does not anticipate reaching pre-pandemic levels in 2023 [126]

CoreCivic, Inc. (NYSE:CXW) Q3 2022 Earnings Conference Call November 3, 2022 11:00 AM ET Company Participants Cameron Hopewell - Managing Director, Investor Relations Damon Hininger - President and Chief Executive Officer David Garfinkle - Chief Financial Officer Brian Hammonds - Vice President, Finance Conference Call Participants Joe Gomes - NOBLE Capital M. Marin - Zacks Kirk Ludtke - Imperial Capital Brian Violino - Wedbush Securities Operator Good morning. My name is Amy and I will be your conference o ...

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, 2022 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 2022 Earnings Conference Call August 3, 2022 11:00 AM ET Company Participants Cameron Hopewell – Managing Director of Investor Relations Damon Hininger – President and Chief Executive Officer David Garfinkle – Chief Financial Officer Conference Call Participants Joe Gomes – NOBLE Capital Jay McCanless – Wedbush Kirk Ludtke – Imperial Capital M. Marin – Zachs Ben Briggs – StoneX Financial Operator Good morning. My name is Samira and I will be your conference operator. As a remin ...

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, 2022 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 ...

CoreCivic, Inc. (NYSE:CXW) Q1 2022 Earnings Conference Call May 5, 2022 11:00 AM ET Company Participants Cameron Hopewell - Managing Director, Investor Relations Damon Hininger - President and Chief Executive Officer David Garfinkle - Chief Financial Officer Brian Hammonds - Vice President, Finance Conference Call Participants Joe Gomes - NOBLE Capital Markets Kirk Ludtke - Imperial Capital Ben Briggs - StoneX Financial Operator Good morning. My name is Samira and I will be your conference operator. As a re ...

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, 2022 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 ...

[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 ...