Corrections Corporation of America (NYSE:CXW) Q4 2017 Earnings Conference Call - Final Transcript

Feb 15, 2018 • 11:00 am ET

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Corrections Corporation of America (NYSE:CXW) Q4 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Savanna and I'll be your conference operator. [Operator Instructions] At this time, I would like to welcome you to the CoreCivic's Fourth Quarter 2017 Earnings Conference. [Operator Instructions]

I would now like to turn the conference over to Cameron Hopewell, CoreCivic's Managing Director of Investor Relations. Mr. Hopewell, you may begin your conference.

Executive
Cameron Hopewell

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

During today's call, our remarks including our answers to your questions will include forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities and Litigation Reform Act. Our actual results or trends may differ materially as a result of a variety of factors, including those identified in our fourth quarter 2017 earnings release and in our SEC filings, including Forms 10-K, 10-Q and 8-K reports.

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

With that, it's my pleasure to turn the call over to our President and CEO, Damon Hininger.

Executive
Damon Hininger

Thank you, Cameron, and good morning and thank you to everyone for joining our call today. We're also joined here in our room by our Vice President of Finance, Brian Hammonds.

Similar to prior quarters in 2017, our fourth quarter financial performance exceeded our most recent guidance and allowed us to close out the year on a positive note. Our normalized FFO of $0.60 per share was $0.03 ahead of the high-end of our fourth quarter guidance, bringing our full-year normalized FFO per share to $2.38 or $0.22 per share higher than the midpoint of our initial 2017 full-year guidance.

Our fourth quarter results were ahead of our expectations, principally due to improving utilization trends across the portfolio for United States Marshals and Immigrations and Customs Enforcement facilities, supported by stability in the balance of our portfolio. Dave will provide a more detailed summary of our fourth quarter financial performance at the conclusion of my remarks.

Also included in yesterday's earnings release was our initial 2018 financial guidance. We currently expect to generate normalized FFO per share of $2.23 to $2.31 and AFFO per share of $2.16 to $2.24. Dave will cover in detail the primary drivers of our guidance, including an assumed reduction in California offenders housed out of state, a full-year impact of additional interest expense resulting from our bond issuance last October and start-up expenses associated with the activation of a previously idle facility in Kentucky.

However, it is important to note our 2018 guidance does not include the potential impact of new contracts,