CoreCivic, Inc. (NYSE:CXW) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:00 am ET

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CoreCivic, Inc. (NYSE:CXW) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
David Garfinkle

the contract from 375 inmates to 1,000 during the first quarter of 2020. Last month, the Idaho Board of Corrections authorized the Idaho Department of Corrections to enter into a contract with core service to care for Idaho offenders that are facilities in Arizona.

Although we have not yet executed a contract, we are optimistic that a final contract will be executed in the coming weeks with an expectation of receiving offenders at our Saguaro Correctional Facility shortly thereafter. The state of Kansas and Nevada, which we are both expected to return their inmate populations to the respective states upon expiration of their management contracts this year both extended them for another year from avail themselves of our capacity during the pandemic. Although not incremental for the second half of the year, Damon mentioned the renewal of a contract with ICE at our T. Don Hutto facility in Texas for up to an additional 10-years. And we expect a similar renewal of a contract at our Houston Processing Center under the same procurement in the coming weeks, both demonstrating the continued bed demand. Finally, we continue to pursue a longer term opportunity in Alabama to design build and finance construction for up to three new correctional facilities for the state, which the state would operate. We are pleased with the progress on this opportunity for our property segment.

We are one of two remaining bidders and remain optimistic in a contract awarded by the end of the year. Damon covered in detail our decision to become a Taxable C Corp starting in 2021. So I will conclude my remarks by pointing you to an investor presentation on our website that further describes the strategy. In it you will see among other things, our historical ability to repurchase $500 million of stock in the three years proceeding our conversions to REIT in 2013, because of our durable cash flows, we are confident the C-Corp structure will open new pathways to build shareholder value, including strengthening our balance sheet and improving our credit profile, returning capital to investors and investing in growth opportunities. We look forward to the potential to sell lower yielding noncore real estate outside of our correctional portfolio, possibly at levels accreted to FFO per share, which would accelerate the implementation of our revised capital allocation strategy. As we are seeing in this volatile time, CoreCivic has a durable business model and financial strength thanks to the essential nature of our services and facilities and the embedded in long standing culture of service excellence of our professionals.

I will now turn the call back to the operator, Casey to open up the lines for questions.