CoreCivic, Inc. (NYSE:CXW) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 11:00 am ET

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CoreCivic, Inc. (NYSE:CXW) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] We'll take our first question from Joe Gomes with Noble Capital.

Analyst
Joe Gomes

Good morning. Thanks for taking my questions.

Executive
David M. Garfinkle

Good morning, Joe.

Analyst
Joe Gomes

On the California AB32, just wondering, have you guys seen any momentum out there for other states to go down that same path?

Executive
Damon T. Hininger

Yeah. So this is Damon. The answer is no. I will tell you that I've been with the company 27 years and I think there has been a couple of times in at least my tenure with the company, where there's been couple of other states that kind of made a similar run and as you know, as I said in my script, there's various options that the Federal Government can consider and so what I've seen in the past is the Federal Government will point to the supremacy clause, which you know -- which as you know the constitution and laws, take President or any state laws or state constitution and that will allow states to interfere with any Federal function, so I don't see, to your question, I don't see anything to look around the country, any other efforts. But I do -- historically, there has been other state that may kind of similar actions and the Federal Government reminds obviously the supremacy clause, in that case -- in those cases, you kinda say that because of the state laws.

Analyst
Joe Gomes

Okay. How vulnerable are you guys to other states in sourcing populations or are we at a point where there's just no government capacity that you're -- your facilities are really the ones that are available to house populations?

Executive
Damon T. Hininger

Yeah. We don't see any -- First, we don't see any new capacity virtually anywhere in the country. It's been a couple of efforts like Alabama, but even in those cases, they've had difficulty to get the funding from the respective legislature, so even if they need new capacity, they kind of deal with aged or really old infrastructure, they think the private sector, our solutions can bring a solution forward and let them accomplish those type of goal is to replace that capacity. But the second is, yeah, we don't see any really available capacity around the country. So we think our capacity based on locations is really a mission critical to those respective agency's needs and with that are some of the newest beds within those respective jurisdictions. So if you look at our system on the Safety side, our average age is about 20 years old and I would say most states, their average age is anywhere from 50 years to 75 years. So not only is there no excess capacity, but we're also the youngest portfolio -- or youngest I should say in a lot of those jurisdictions. Anything to add to that David?

Executive
David M. Garfinkle

You saw that I mentioned, a couple of states looking at leasing facilities. So that's an alternative option for states as well if they prefer state employees operate their correctional facilities. We've done that