CoreCivic (NYSE:CXW) 2025 Conference Transcript

Summary of CoreCivic Investor Conference Company Overview - Company Name: CoreCivic - Ticker Symbol: CXW - Founded: 1983 - Total Assets: Approximately $2.9 billion - Real Estate Assets: Approximately $2.3 billion - 2024 Revenue: Approximately $2 billion - Adjusted EBITDA: $330.8 million - Market Capitalization: Approximately $2.2 billion - Facilities: 70 correctional, detention, and reentry facilities in the U.S. with a total of 79,202 beds - Revenue Sources: 51% from federal government, 41% from state governments, and 8% from local governments and others [2][3][4] Business Segments 1. Safety Segment: - Largest segment with 44 facilities and 67,289 beds - Contributes approximately 92% of net operating income (NOI) [4] 2. Community Segment: - 21 residential reentry facilities (halfway houses) with 4,159 beds - Contributes about 5% of NOI [5] 3. Property Segment: - 5 facilities leased to state government agencies with 7,754 beds - Contributes about 3% of NOI [5] Market Position - CoreCivic is the largest owner of private correctional and detention facilities, managing 57% of all owned beds and 41% of privately managed beds [6] - The company manages 27% of total ICE detention populations and 13% of U.S. Marshals populations [6][7] Recent Developments - COVID-19 Impact: Occupancy rates dropped during the pandemic, with a recovery to 76.8% by Q2 2023 [8] - ICE Detention Capacity: The One Big Beautiful Bill Act approved $45 billion for ICE, aiming to increase detention beds from 50,000 to 100,000. CoreCivic currently has 58,000 to 60,000 beds available [10][11] - Idle Facilities: CoreCivic has 13,419 beds in idle facilities that can be activated to meet ICE's growing demands [11][15] Financial Performance - EBITDA Potential: By activating idle facilities, CoreCivic could generate an additional $200 million to $225 million in EBITDA [17] - Contract Renewal Rate: 97% over the past five years, indicating strong customer retention [18] - Debt Management: Since August 2020, CoreCivic has repaid $1.3 billion in debt, maintaining a leverage ratio of 2.3 times [19][20] - Share Repurchase Program: $500 million authorization with $237.9 million remaining as of June 30, 2025 [21] Industry Dynamics - The company is positioned to benefit from a shift towards interior enforcement by ICE, as border encounters decrease [22][23] - Concerns about alternative detention facilities (e.g., Guantanamo Bay) are viewed as less viable due to higher costs and operational challenges compared to CoreCivic's existing facilities [24][25] Conclusion - CoreCivic presents a compelling investment opportunity with strong government contracts, a solid financial position, and growth potential in the detention market as federal needs increase [27]