CoreCivic, Inc.

fourth quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Michael Grant, Managing Director of Investor Relations.

Thank you, operator. Good morning, everyone, and welcome to CoreCivic's fourth quarter and full year 2024 earnings call. Participating on today's call are Damon Heiniger, CoreCivic's Chief Executive Officer, Patrick Swindle, CoreCivic's President and Chief Operating Officer, and David Garfinkel, our Chief Financial Officer. We are also joined here in the room by our Vice President of Finance, Brian Hammonds. On this call, We will discuss financial results for the fourth quarter of 2024, as well as financial guidance for the 2025 year. We will also discuss developments with our government partners and provide you with other general business updates. 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 2024 earnings release issued after market yesterday, as well as in our Securities and Exchange Commission's 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. Management will also discuss certain non-GAAP metrics. A reconciliation of the most comparable GAAP measurement is provided in the corresponding earnings release and included in the company's quarterly supplemental financial data report posted on the investor's page of the company's website at corecivic.com. With that, it is my pleasure to turn the call over to our CEO, Damon Heininger.

Thanks, Mike. Good morning, and thanks, everyone, for joining us for our CoreCivic fourth quarter 2024 earnings call. On this morning's call, we will discuss our latest operational results and update you on the latest developments and opportunities with our government partners. Following our opening remarks, we will turn the call over to our CFO, Dave Garfinkel, who will provide greater detail on our fourth quarter and full year 2024 financial results, as well as introduce our 2025 financial guidance. Dave will also provide an update on our capital structure initiatives, including progress on our leverage target and share repurchase program. I'm going to tag team the opening remarks today with our Chief Operating Officer, Patrick Swindle, who was also named CoreCivic's president in December 2024. Patrick has been with CoreCivic for 17 years in positions of increasing responsibility within finance and operations. He has excelled as our chief operating officer and chief corrections officer for the past seven years. Patrick is an excellent problem solver and brings experience and a great strategic and financial mindset to the president position. We truly look forward to his leadership during what we anticipate to be a period of rapid growth and opportunity. So let me start with this. I've worked at CoreCivic for 32 years, and this is truly one of the most exciting periods in my career with the company. Having just wrapped up a strong 2024, we're anticipating significant growth opportunities. Perhaps the most significant growth in our company's history over the next several years. We believe CoreCivic is exceptionally well positioned operationally and financially to meet what we expect to be a sharp acceleration demand from our partners, particularly our key federal partners, Immigration and Customs Enforcement, or ICE, and the United States Marshal Service. The change in presidential administration on January 20th has ushered in significant policy and legislative changes that directly impact our business. And I would like to run through a few of those that are the most significant. Upon inauguration, President Donald Trump issued nine executive actions intended to secure the borders of the United States and remove illegal immigrants. These initial orders included the declaration of a national emergency on the southern border, aiming to effectively shut down the border to illegal immigration. One notable executive order issued on January 20th was titled Protecting the American People Against Invasion. In this EO, the President calls for the federal government to faithfully execute the immigration laws of the United States, including the removal of aliens, particularly those who threaten the safety of American people. Included in this EO is language calling on the Secretary of Homeland Security to take all appropriate action and allocate all legally available resources or establish contracts to construct, operate, control, or use facilities to detain removable aliens. The Secretary of Homeland Security further shall take all appropriate actions to assure the detention of aliens apprehended for violations of immigration law pending the outcome of their removal proceedings or their removal from the country to the extent permitted by law. Effectively, this EO increases interior enforcement by ICE and directs the Department of Homeland Security to detain those arrested by ICE pending their removal. The Lincoln Riley Act was passed by the Senate with a bipartisan support on January 20th and signed into law by President Trump on January 29th, making it the first law of the current Congress. The act was named for Lincoln Riley, the nursing student who was murdered on the University of Georgia campus by undocumented immigrant with a history of arrests and releases. The Lincoln-Riley Act requires to detain certain non-U.S. nationals who have been charged, arrested, or convicted of crimes including burglary, theft, assault of law enforcement officer, as well as killing or injuring another person. ISIS estimated that this act could require 60,000 to 110,000 additional detention beds. This obligation is not specifically funded. However, since this requires mandatory detention, funding will have to be secured shortly. Also on January 20th, President Trump reversed a January 26, 2021 Biden executive order that had directed the Justice Department, which includes the Federal Bureau of Prisons and the United States Marshal Service, to not renew direct contracts with privately operated criminal detention facilities. The administration had the authority to waive its own executive order where no alternative capacity was available, and it often did so over the past four years, renewing a number of significant marshals contracted facilities. Still, the Biden executive order did result in a closure of two core civic facilities that were previously contracted to the marshals. Our West Tennessee detention facility in Mason, Tennessee, and our facility in Leavenworth, Kansas, now named the Midwest Regional Reception Center. We enjoy a strong relationship with United States Market Service, our second largest customer, and it is very helpful to both parties to have the tool of direct contracting available again. The Marshal Service, we believe, prefers the level of service the private sector can provide in relation to what they receive from local county jails, and we look forward to renewing discussions about those and other locations with them. We expect increased demand to come from the United States Marshal Service, which could require an additional 10,000 or more beds over the next several years based on past usage. Finally, as for the Bureau of Prisons, one item of note. During her Senate confirmation hearing, Attorney General Pam Bondi emphasized the importance of fully implementing the First Step Act, a law that was passed with strong bipartisan support in 2018. Specifically, she referenced the need to increase capacity above their 12,000 current community placements. The First Step Act allows Federal Adults in Custody, or AIC, especially in minimum and low security facilities, to earn time credits through meaningful programs, reducing their sentences, and expanding pre-release custody options like halfway houses or home confinement. The law is intended to significantly increase the population in community-based custody, but the Bureau of Prisons has faced criticism and lawsuits for delays in the implementation. Because of this, we think the BOP will lean on the private sector to fill this gap in implementation. For over 20 years, we have been a trusted partner to the BOP for residential and home confinement community services. We believe we are well positioned to help accelerate the First Steps Act implementation with our cost-effective available bed capacity and industry-leading reentry technology and services. Regarding new contracts, we are engaged in active conversations with ICE and the United States Marshal Service in preparation for their increased secure bed needs. This has included the submission of multiple proposals of our capabilities, tours of existing facilities, and anticipated cost estimates. Additionally, as noted in our press release, we are leaning forward on expenditures for Facility CapEx and transportation assets with a current estimated range of expenditures between $40 to $45 million. For ICE, most new contracts may come after funding is established via a congressional budget agreement, and the timing and structure of those contracts are still to be determined. That said, it is possible that contracts could precede a congressional budget agreement. We're still just a few weeks into the new administration, So stay tuned for more on ICE contracting. One final comment on ICE, if I may. The detention beds supplied by the private sector are the least expensive, most humane, most efficient logistically, have the highest audit compliance scores in the system, and are readily available. Additionally, with 42 years of operating experience with ICE, The private sector beds are the least likely to be legally challenged. Looking at specifically previously public identified opportunities, little has changed since our discussion last quarter as contracting activity typically is interrupted around the handoff from one administration to the next in order to incorporate the guidance of the new administration. We only have one minor update that we mentioned last quarter to an RFP ICE issued in June of 2024 for up to 600 detention beds in the state of New Jersey, which would expand their capacity in the state. As a reminder, we have responded with our Elizabeth detention facility in Elizabeth, New Jersey. ICE has extended our existing contract there several times now through the end of February as it continues to evaluate proposals. We continue to believe that the Elizabeth detention facility responds well to ICE's needs in that market where bed space is scarce. With respect to state opportunities, during January, we announced that we have been awarded a new management contract with the state of Montana to expand the geographical range of core civic facilities that can serve the state of Montana to the east of the Mississippi. We expect to care for 240 inmates at our 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi, under this contract commencing during the first quarter of 2025. The base term of the new management contract with the state of Montana, which is for an unspecified number of inmates and therefore could grow beyond 240, runs through December of 2026, and contract extensions could run as long as seven years. During January of 2025, we also received an additional 120 Montana inmates that are 1,896 beds, the world correctional facility in Eloy, Arizona under existing contract with the state of Montana. And those beds bring us close to that facility's capacity. We enjoy a strong partnership with Montana and we appreciate the trust they put in our company and our facility teams. CoreCivic remains in active dialogue with several other existing state partners, as well as new state partners that could result in additional populations, including the possible use of one or more idle facilities. These opportunities could manifest as early as 2025. Now I'll pass it over to Patrick Swindle for an overview of fourth quarter operations. Patrick?